Interim Order 3

Order Details: Other
Pdf Text: 1 Summary Judgment 11/2022
In Comm. Suit No.484/2020
MHCC010029802020
IN THE CITY CIVIL COURT AT MUMBAI.
(Court Room No.32)
SUMMARY JUDGMENT NO.11 OF 2022
IN
COMMERCIAL SUIT NO.484 of 2020
Mr. Mahesh Govind Hule … Plaintiff
VERSUS
M/s. Madhucon Projects Ltd. & others … Defendants
Shri Prakash N. Wagh, learned advocate for the plaintiff.
Shri Srinivas Chakravarthy, learned advocate for defendants.
CORAM : JUDGE SHRI. N.P. TRIBHUWAN
J U D G M E N T
(Delivered on 24/2/2023)
Defendant No.1 has filed this application for Summary
Judgment under Order XIIIA of CPC. on the following grounds :
i) The suit is against law and hence liable to be dismissed.
ii) Misjoinder of parties / no cause of action : Plaintiff has made
defendant No.2 and 3 as party without having any cause of
action against them. Plaintiff has also made another official as
defendants without any obligation and liability only to harass
them. There is no right of relief accruing to the plaintiff
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In Comm. Suit No.484/2020
against defendant No.2 and 3.
iii) Reply dt.6/10/2016 on which plaintiff relies as one of the
cause of action, clearly states that the said cheque was issued
as a security cheque. The said cheque was issued subject of
fulfillment of settlement of amount payable. The unsettled
issues are with regard to the amounts claimed by the plaintiff.
Plaint itself discloses that the plaintiff has himself resorted to
wrong billing and it is an admitted fact by plaintiff that there
were certain payments not certified. Since the cheque was
issued as a security on condition of settlement of amount
payable no legally enforceable debt has accrued to plaintiff.
Defendant No.1/ Company had never admitted its liability.
iv) Plaintiff has suppressed that the complaint under Section 138
of NI Act was dismissed by the Learned Magistrate for the
reasons : i) Nonpayment of Court fees, ii)No argument on
delay, iii) Nonappearance of complainant and / or Advocate,
iv) No Prosecution.
v) Plaintiff had purportedly filed police complaint against
defendant No.1/company and its officials, but the plaintiff has
not stated as to what happened thereafter to the said police
complaint. Evidently, the police have not taken any
cognizance on the said complaint. Plaintiff has suppressed the
fact about what had happened after filing of police complaint.
vi) Plaintiff has not made clear averments in the plaint as to how
the present suit will come under category of “commercial
disputes” and attracts the jurisdiction of Commercial Courts.
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In Comm. Suit No.484/2020
Present suit does not come under the jurisdiction of
Commercial Courts Act, 2015. The transactions pertain to a
period of 201213 to 201415 and therefore, suit is barred by
limitation. As per pleading in the plaint, the last transaction
taken place on 30.11.2014 and last purported payment was
made on 10.02.2015. All transactions have different cause of
action and different limitation periods, which have been
suppressed by plaintiff. Plaintiff relied on email
communication dated 01.06.2017 & reply 10/6/2017 for fresh
cause of action, which is absurd as the same is not acceptable
to raise fresh cause of action. It is the email of plaintiff himself
giving time to defendant No.1.
vii) If date of dishonor of cheque is considered for fresh cause of
action, the said would end on or about 05.10.2019 i.e. 3 years
from the date of purported reply dated 06.10.2016. Plaintiff
has filed preinstitution mediation application on or about
19.08.2019. Thus, there was about 47 days balance left for
period of limitation to file suit from date of purported reply
dated 06.10.2016. The period of preinstitution mediation
should be for period of 3 months from date of application
which is 19.08.2019 and ends on or about 18.11.2019. The
extension period of two months provided under the proviso
would be applicable only when both parties to the pre
institution mediation give consent for the same. Defendant
no.1 neither received the said notice nor participated in such
preinstitution mediation nor gave consent to extension of
time limit. Plaintiff neither served copy of application for pre
institution mediation to defendant nor ensured that the said
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In Comm. Suit No.484/2020
process is completed within 3 months. Plaintiff with malafide
intention got the “NonStarter Report” on or about 26/2/2020
which is almost 6 months and 8 days from the date of said
application. As per section 12A of the Commercial Courts Act,
2015 the plaintiff should have obtained the said NonStarter
Report on or around 18/11/2019 and should have filed plaint
on or before 4/1/2020 but he has filed this suit on 6/3/2020.
viii) Neither bills submitted with unreconciled, disputed claims and
with admission that certain claims were for uncertified work,
nor the abuse of the cheque given conditionally as security
would give rise to file summary suit under order XXXVII of
CPC.
ix) Plaintiff has not filed statement of truth under order VI Rule
15A (4) CPC. and hence, plaint be rejected.
x) Plaintiff has not complied with mandatory requirement under
order XI CPC application to Commercial Courts Act because
plaintiff has to be made disclosures with list of documents.
xi) In view of above the plaintiff has no real prospects of
succeeding on the claim and hence suit be dismissed.
2. Plaintiff has filed reply at Exh.18 and contended that
summary judgment filed by defendant is nothing but to cause delay in
the matter. Defendants are trying to frustrate the plaintiff by prolonging
the matter. Plaintiff has filed this suit on 8/8/2019 under order XXXVII
CPC. The department of City Civil Court has converted the suit into a
“Commercial Suit”. Plaintiff has not violated objectives of section 14 of
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the Commercial Courts Act. The claim of plaintiff is based on documents
and the legal transaction between plaintiff and defendants. The
documents relied upon by plaintiff are sufficient to prove his case and
claim. He has made party to defendant no. 2 & 3 because defendant
no.2 was a managing director and defendant no.3 was one of the
directors of defendant no.1. They are not misjoinder of parties but they
are responsible for nonpayment of dues. Defendant no.2 & 3 had
approached the plaintiff and gave order for carrying out the excavation
work for the project of Eastern Express Highway Chembur. Plaintiff has
conducted the said work on the instruction of defendant no.2 & 3. The
bills raised by plaintiff were acknowledged by defendant no.2 & 3.
Hence, they are vicarious liable to pay dues.
3. Plaintiff time to time raise bills and invoices for excavation
work done for the project of Eastern Express Highway Chembur and
defendants have given cheque against the said work for discharging
legal liability. In the letter dt.6/10/2016 the defendants have requested
the plaintiff that due to delay in finalizing the bills from MMRDA towards
the claims made by the company, we request you to extend your co
operation in this regard by dropping the proposed action under NI Act or
any other Act, as we are intending to settle the issue at earliest without
resorting to judicial intervention. This statement of defendants is an
admission of liabilities. However, defendant by taking U turn denied the
claim of plaintiff.
4. Plaintiff trusted the defendants that they will pay his dues
and therefore, he has not filed complaint u/sec. 138 NI Act within
stipulated period. Later on plaintiff came to know that defendants sent
him letter dt.6/10/2016 and requested orally not to file complaint
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u/sec. 138 NI Act. Because of unreasonable delay in filing complaint
u/s. 138 NI Act, plaintiff lost hope and therefore could not deposited
the court fees, hence learned Magistrate has dismissed the said
complaint and not on merit.
5. Plaintiff has filed police complaint against defendants but
police have not paid heed. Hence, plaintiff could not pursue the said
complaint. Dismissal of complaint u/s.138 of NI Act and non
registration of FIR cannot be the ground for deciding suit by summary
judgment under order XXXA of CPC.
6. The suit is well within limitation though the transaction
taken place between 2012 to 2015 but defendants time and again
admitted their liabilities in later years. On 6/10/2016 defendants have
admitted their liabilities and admitted that they have issued cheque for
the sum of Rs.9,00,000/. Not only that in the year 2017 plaintiff has
sent several emails to defendants but they did not respond. If
defendants disagreed with due amount, they would deny the same by
sending reply to the said emails. It means the defendants time to time
accepted their liability and confirmed the due amount.
7. After filing application for preinstitution mediation, the
department of City Civil Court has served the notices to defendants but
they intentionally avoided to attend the mediation. Defendants time
and again given reason that due to covid19 they could not respond
summons. Considering the covid situation, an opportunity was given to
defendants on several occasions, hence time limit for nonstarter report
was extended in order to not to deprive defendants from attending
mediation.
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8. Prima facie it appears that this application u/o XXXA CPC
is based on false information. This application is nothing but false
defense of defendants and it is filed with ill intention and hence deserve
to be dismissed with compensatory costs u/sec.35A of CPC.
9. Considering above facts, following points arise for
determination of this court and recorded findings thereon for the
reasons stated as under.
POINTS FINDINGS
1. Whether defendant proved that plaintiff
has no real prospect of succeeding on the
claim?
...No
2. What order? ...As per final
order.
REASONS
As to point Nos.1 and 2 :
10. Order XIIIA CPC, as made applicable to commercial suits
within the meaning of the Commercial Courts Act, is titled “Summary
Judgment”. Rule 2 thereof provides, that an application for summary
judgment may be made at any time after summons have been served on
the defendant, till the framing of issues. Rule 3 pertains to grounds for
summary judgment – (a) the plaintiff has no real prospect of succeeding
on the claim or the defendant has no real prospect of successfully
defending the claim, as the case may be; and (b) there is no other
compelling reason why the claim should not be disposed of before
recording of oral evidence. Rule 4 thereof providing the procedure for
applying for a summary judgment inter alia requires the applicant to
state the reason why there are no real prospects of succeeding on the
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claim or defending the claim and requires notice of the said application
to be given to the opposite party of 30 days, and the reply to such
application to precisely identify the points of law if any and the reasons
why the relief of summary judgment should not be granted and why
there are real prospects of succeeding on the claim or defending the
claim and to state the issues to be framed for trial and what evidence is
to be lead thereon and permits additional documentary evidence to be
filed with such reply.
11. Heard learned counsel of both the parties. Plaintiff
mentioned in para 11 of reply that that following factors have been
culled out from various case laws. (i) While deciding summary
judgement, the court must consider whether the claimant has a
"realistic" as opposed to a "fanciful" prospect of success. A "realistic"
claim is one that carries some degree of conviction. This means a claim
that is more than merely arguable. (ii) The court must take at face value
and without analysis everything that a claimant says in his statements
before the court. (iii) The court must take into account not only the
evidence actually placed before it on the application for summary
judgment, but also the evidence that can reasonably be expected to be
available at trial. (iv) The court must be satisfied that there is no
genuine issue requiring a trial with respect to a claim or defense. (v) It
is not enough simply to argue that the case should be allowed to go to
trial because something may turn up which would have a bearing on
the question of construction. (vi) Summary judgement ought to be
refused if there were compelling reasons to conduct a trial. (vii) The
court has to strike a balance between a fair trial and expedition.
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12. Learned counsel of defendants relied on following case
laws:
(i) La Fin Financial Services Pvt. Ltd. Vs. Multi Commodity
Exchange of India Ltd., dt.24.09.2021, Interim Application
No.247/2021 in Commercial Suit No.64/2015, Hon’ble Bombay High
Court held, The purpose and ambit of the Commercial Courts Act is not
antidefendant. It is not merely intended to put a defendant under a
strict time limit for entering a defence. It is intended to ensure that
Commercial Suits are disposed of expeditiously. What unfortunately the
Commercial Courts Act does not say but must reasonably be held to say,
is that there is a corresponding duty and obligation on the part of each
plaintiff in a Commercial Suit to act with the utmost dispatch and to
adhere to reasonable timelines, even if there is no strict limitation. It
simply cannot be that a defendant is disadvantaged by statutory
limitation and a plaintiff has no obligation to act promptly and in
reasonable time. The Commercial Courts Act no more aids a dilatory
defendant than it assists a procrastinating plaintiff.
(ii) Ambalal Sarabhai Enterprises Ltd. Vs. K.S. Infraspace LLP &
Anr. dt.04.10.2019, Civil Appeal No.7843/2019, the Hon’ble
Supreme Court held, in that view it is also necessary to carefully
examine and entertain only disputes which actually answers the
definition “commercial disputes” as provided under the Act. In the
instant case, as already taken note neither the agreement between the
parties refers to the nature of the immovable property being exclusively
used for trade or commerce as on the date of the agreement nor is there
any pleading to that effect in the plaint. Further the very relief sought in
the suit is for execution of the Mortgage Deed which is in the nature of
specific performance of the terms of Memorandum of Understanding
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without reference to nature of the use of the immovable property in
trade or commerce as on the date of the suit. Therefore, if all these
aspects are kept in view, we are of the opinion that in the present facts
the High Court was justified in its conclusion arrived through the order
dated 01.03.2019 impugned herein. The Commercial Court shall
therefore return the plaint indicating a date for its presentation before
the Court having jurisdiction.
13. According to defendants, the plaintiff has made defendants
No.2 and 3 party without having any cause of action against them and
without any obligation and liability. It is case of plaintiff that he has
made party to defendant no. 2 & 3 because defendant no.2 was a
managing director and defendant no.3 was one of the directors of
defendant no.1. They are responsible for nonpayment of dues.
Defendant no.2 & 3 had approached the plaintiff and gave order for
carrying out the excavation work for the project of Eastern Express
Highway Chembur. Plaintiff has conducted the said work on the
instruction of defendant no.2 & 3. The bills raised by plaintiff were
acknowledged by defendant no.2 & 3. Hence, they are vicarious liable
to pay dues. In view of above rival pleading, the issue of misjoinder is
itself a matter for trial to be decided on basis of the evidence that may
be led.
14. Defendant no.1 come with case that there is no cause of
action against defendants. The cheque was issued as a security. The
subject matter is not commercial dispute u/s. 2(1)(c) of the Commercial
Courts Act. The suit is barred by limitation. On these aspects, it is
contention of plaintiff that he time to time raise bills and invoices for
excavation work done and defendants have given cheque against the
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said work for discharging legal liability. In the letter dt.6/10/2016 the
defendants have their liabilities. However, defendants by taking U turn
denied the claim of plaintiff. Plaintiff trusted the defendants that they
will pay his dues and therefore, he has not filed complaint u/sec. 138 NI
Act within stipulated period. He has filed police complaint against
defendants but police have not paid heed. Dismissal of complaint
u/s.138 of NI Act and nonregistration of FIR cannot be the ground for
deciding suit by summary judgment under order XXXA of CPC. Thus,
in view of above facts, the above facts are itself a matter for trial to be
decided on basis of the evidence that may be led in full fledged trial.
15. According to plaintiff, the suit is well within limitation
though the transaction taken place between 2012 to 2015 but
defendants time and again admitted their liabilities in later years. On
6/10/2016 defendants have admitted their liabilities and admitted that
they have issued cheque for the sum of Rs.9,00,000/. Not only that in
the year 2017 plaintiff has sent several emails to defendants but they
did not respond. If defendants disagreed with due amount, they would
deny the same by sending reply to the said emails. It means the
defendants time to time accepted their liability and confirmed the due
amount. After filing application for preinstitution mediation, the
department of City Civil Court has served the notices to defendants but
they intentionally avoided to attend the mediation. Considering the
covid situation, an opportunity was given to defendants on several
occasions, hence time limit for nonstarter report was extended in order
to not to deprive defendants from attending mediation. On this point it
pertinent to mention here that issue of limitation is mixed question of
law and facts. Therefore, it is itself a matter for trial to be decided on
basis of the evidence that may be led.
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16. According to defendants the plaintiff has not complied with
the requirement of Order 6 Rule 15(A) of CPC. However plaintiff has
annexed the statement of truth under Order VI Rule 15(A) of CPC with
the plaint as page No.95A. Moreover, it is curable defect. As far as the
subject matter is within ambit of commercial dispute u/sec. 2(1) (C) is
concerned; it is case of plaintiff that during course of business the
defendants have issued several work orders to the plaintiff for
excavation works and hired Poclain excavation machine and stone
crusher machine with labour and on the basis of transport charges on
monthly 200 hours. Section 2(1)(c) provided 22 categories of
commercial dispute. Sec. 2(1)(c) (vi) says commercial dispute means a
dispute arising out of construction and infrastructure contracts,
including tenders.
17. In view of the above facts, I come to the conclusion that
there are reasons to conduct a trial mentioned in para supra. Defendant
failed to prove that plaintiff has no real prospect of succeeding on the
claim. Hence, I answer point No.1 as above. Hence, I pass following
order.
ORDER
Summary Judgment No.11 of 2022 stands rejected.
Date :24/2/2023.
(N.P. TRIBHUWAN)
Judge, City Civil Court,
(C.R.No.32), Mumbai.
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Dictated on : 24/02/2023
Checked on : 24/02/2023
Signed on : 24/02/2023
CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER”
24/02/2023. Mrs. K.S.Bhosale
UPLOAD DATE AND TIME NAME OF STENOGRAPHER
Name of the Judge(with CR No.) HHJ SHRI. N. P. TRIBHUVAN
(C.R.No.32)
Date of pronouncement of Order 24/02/2023
Order signed by P.O. on 24/02/2023
Order uploaded on 24/02/2023
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