Final Order 1

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MHCC010101782019
Presented on : 05/10/2019
Registered on : 05/10/2019
Decided on : 07/12/2021
Duration : Y M D
02 02 02
BEFORE THE CITY CIVIL COURT, MUMBAI
( Court No.14 )
(Presided Over by S. U. Hake)
SUMMONS FOR JUDGMENT NO.241 OF 2019
IN
COMMERCIAL SUIT NO.662 OF 2021
(SUMMARY SUIT NO.61 OF 2019)
Jayantilal Chogalal Doshi
Age: 48 years,
carrying on business in
name and style as
M/s. Padmavati Steel &
Engineering Company,
a registered proprietor thereof
having its office at 1416,
Kanta Terrace, Ground Floor, Shop No. 1,
Dr. Wilson Street, Opp Wilson School,
Mumbai 400004. ..Plaintiff
Versus
1. M/s. Global Engineering,
In front of Sunton Ceramic,
At: Rangpar, Jetpar Road,
Morbi, Gujarat363642.
2. Aatish Shankarlal Garole,
Asha Park, Near Circuit House,
Morbi, Gujarat363642.
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Or at
Genda Circle/Housing,
Opp. Hrishikesh Vidhyalaya,
Bungalow No.2, Gali No.1,
Morbi, Gujarat363642.
3. Jalabhai Jashabhai Rathod
Vidhyut Nagar, Opp. Circuit
House, Morbi, Gujarat363642.
Or at
Radhe Shyam PVC, Plot No.9,
Nagda Vaas Gandhidham,
Highway Road, Morbi, Gujarat363642.
Or at
Saisut Apartment,
Behind Rajkot Nagrik Bank,
Housing Road,
Morbi, Gujarat363642.
4. Mrs.Geeta Jala Rathod
Vidhyut Nagar, Opp. Circuit
House, Morbi, Gujarat363642.
Or at
Saisut Apartment,
Behind Rajkot Nagrik Bank,
Housing Road,
Morbi, Gujarat363642.
5. Ranvijay Kumar Kartiklal Shah,
Asha Park, near Bahadur Villa,
Morbi, Gujarat363642. ..Defendants
_______________________________________________________
Ld. Advocate Bharat Joshi for plaintiff.
Ld. Advocate Jayant Rasal for defendant Nos.3 and 4.
______________________________________________________
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ORAL ORDER
(Dated this 7th day of December 2021)
Summons for Judgment is taken out against
defendant Nos.3 and 4 for decree of an amount of Rs.1 crore
alongwith future interest.
Briefly stated, plaintiff's case is as under:
2. Plaintiff is a proprietor of M/s. Padmavati Steel &
Engineering Company, Mumbai. Defendant No.1 M/s. Global
Engineering is a registered partnership firm. Defendant Nos.2 to 5
were partners of defendant No.1firm during relevant time.
Defendants placed purchase orders for supply of goods during the
period from 10/12/2015 to 21/09/2016. In pursuance to the
purchase orders placed by defendants, plaintiff supplied goods to
defendants through Aparna Transport and H.H. Roadways.
Plaintiff has specifically pleaded about the purchase orders placed
by defendants and supply of goods to defendants. Plaintiff raised
the invoices against supply of goods. Goods were supplied to the
State of Gujarat. Therefore, excise gatepasses were also prepared
at the time of delivery of goods to defendants. Plaintiff supplied
goods to the tune of Rs.75,92,765/ during the period from
10/12/2015 to 21/09/2016. The transaction was Inter State. If
defendants issue Cforms in the prescribed format, plaintiff would
have got concession in value added tax (VAT). Defendant No.1
failed to issue Cforms under Central Sales Tax regarding 6
invoices which were issued during the period from 10/12/2015 to
21/09/2016. Therefore, plaintiff is entitled to 2% of the invoice
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value which comes to Rs.97,854.39/. As per the terms of the
contract, defendants are also liable to pay interest at the rate of
24% p.a. and said interest comes to Rs.48,94,000/. By notice
dated 05/10/2018, plaintiff called upon defendants to pay
outstanding amount of Rs.1,25,84,619/. Defendant Nos.3 and 4
replied said notice and denied the liability. Plaintiff has
abandoned part of claim and restricted his claim for Rs.One crore.
3. Defendants have no defence. Defendant Nos.3 and 4
appeared on 04/02/2019. Plaintiff was not well and could not
give instructions to his advocate, therefore, he could not take out
Summons for Judgment within time. There is delay of 30 days in
taking out Summons for Judgment. By making all these
submissions, plaintiff prayed for condonation of delay in taking
out Summons for Judgment. He further prayed to make Summons
for Judgment absolute.
4. As per service affidavit (Exh.4), defendant Nos.1, 2
and 5 were deemed to be served with writ of summons. But, they
failed to tender their appearance. Therefore, suit proceeded
without appearance of defendant Nos.1, 2 and 5. Defendant
Nos.3 and 4 tendered their appearance on 04/02/2019 as
contemplated under Order 37 Rule 3 of C.P.C. Thereafter,
plaintiff has taken out present summons for judgment against
defendant Nos.3 and 4 on 26/09/2019.
Reply of defendant Nos.3 and 4 :
5. Defendant Nos.3 and 4 by filing their reply affidavit,
strongly resisted Summons for Judgment. It is submitted that suit
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is based upon invoices and delivery challans. Suit is not based
upon a written contract, therefore, summary suit under Order 37
Rule 2 of C.P.C. is not maintainable.
6. Plaintiff failed to take out Summons for Judgment
within 6 months as provided in Rule 119(4) of The Bombay City
Civil & Sessions Court Rules, 1948. Therefore, Summons for
Judgment is not maintainable.
7. Summons for Judgment is taken out against
defendant Nos.3 and 4 only. Other defendants are necessary
parties to Summons for Judgment.
8. Plaintiff never delivered goods to defendants as
referred to in the purchase orders. All the documents are falsely
prepared.
9. Defendant No.4 is retired from the firm as per the
deed of retirement dated 01/03/2017. The liability regarding all
the claims has been taken over by the continuing partners of M/s.
Global Engineering. Defendant No.4 has been wrongly joined as
party to the suit. Suit is bad for misjoinder of parties.
10. As per the deed of dissolution dated 16/06/2017,
defendant No.1firm is dissolved with effect from 16/06/2017.
Defendant No.2 has taken over the business of the firm as a sole
proprietor of the firm. Defendant No.2 was wholly responsible for
all the liabilities and for statutory debts pending till the date of
dissolution of firm. Thus, defendant No.3 is also wrongly joined
as party to the suit. Defendant Nos.3 and 4 further specifically
denied delivery of the goods under all the invoices. They have
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also denied issuance of Cform. They also denied plaintiff's claim
regarding interest and issuance of cheque towards the
transaction. It is further submitted that plaintiff was having
independent dealings with Kumar Enterprises. Defendant Nos.3
and 4 are not liable to pay the amount claimed in the Summons
for Judgment. Defendant Nos.3 and 4 are having substantial
defence. They have raised triable issues. By making all these
submissions, they prayed for unconditional leave to defend the
suit.
Plaintiff's oral submissions :
11. Ld. Counsel appearing for plaintiff made following
submissions:
(a) Plaintiff supplied goods to defendant No.1
partnership firm. Defendant Nos.2 to 5 were partners of the firm
when transaction took place. Plaintiff has filed on record copies of
the purchase orders placed by defendants. As per these purchase
orders, plaintiff supplied goods to defendants. For Inter State
transaction, excise gatepasses are required. Plaintiff has
prepared excise gatepasses for all the invoices. The transaction
was subject to issuance of Cform by defendants, therefore, only
2% GST was charged on all the invoices. Goods were supplied
through transport. Plaintiff has filed on record copies of the
transport receipts. Plaintiff has specifically pleaded about all the
details regarding transactions. The specific pleadings regarding
transaction are supported by documents filed on record.
(b) As per the terms of the invoices, plaintiff is entitled to
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interest @ 24% p.a. Plaintiff supplied goods of worth
Rs.75,92,765/. He is entitled to the interest of Rs.48,94,000/.
Thus, plaintiff is entitled to the total amount of Rs.1,25,84,619/.
Plaintiff has abandoned part of his claim and restricted his claim
to Rs.1 crore. Defendant Nos.3 and 4 are partners of defendant
No.1partnership firm. Therefore, they are responsible for
business of the firm. The retirement deed and dissolution deed of
the firm will not affect plaintiff's right to claim suit amount from
defendant Nos.3 and 4. Defendant Nos.3 and 4 do not have any
defence. They have raised moon shine defence and therefore,
defendants are not entitled for unconditional leave to defend the
suit. By making these submissions, advocate for plaintiff prayed
for making Summons for Judgment absolute.
Defendant’s oral submissions :
12. Ld. Counsel appearing for defendant Nos.3 and 4
contravened above submissions with following arguments:
(i) There is delay of 30 days in taking out Summons for
Judgment. Plaintiff was required to make appropriate application
for condonation of delay before taking out Summons for
Judgment against defendant Nos.3 and 4. Plaintiff failed to apply
for condonation of delay and therefore, Summons for Judgment
against defendant Nos.3 and 4 is not maintainable.
(ii) Suit is not based upon written contract, therefore,
suit is not covered under Order 37 Rule 2 of C.P.C. Defendant
Nos.3 and 4 are coming with the specific case that defendant No.4
is retired from the partnership firm with effect from 01/03/2017.
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Copy of the retirement deed is filed alongwith reply. Defendant
No.4 is no more partner in the firm, therefore, she is not
responsible for the business of the firm. Partnership firm is
dissolved with effect from 16/06/2017. The copy of deed of
dissolution is filed on record. As per said deed of dissolution,
defendant no.2 became proprietor of the firm. He is liable to pay
all the debts of the firm. Suit is filed after dissolution of the
partnership firm. Ld. Counsel for defendant No.3 and 4 also
relied upon Form No.‘G’ of Registrar of Firms to show that
defendant No.4Geetaben Jalabhai Rathod is retired from the
partnership firm with effect from 01/03/2017 and firm has been
dissolved on 16/06/2017.
(iii) Delivery of the goods is not acknowledged by
defendants. Therefore, they are not liable to pay the amount
claimed in the plaint. By making all the above submissions, Ld.
Counsel for defendant Nos.3 and 4 urged that defendant Nos.3
and 4 have raised the issue regarding liability of defendant Nos.3
and 4. They have raised the issues which require trial and
therefore, they are entitled for unconditional leave to defend the
suit.
13. Considered the submissions advanced on behalf of
both the sides. It is submitted on behalf of defendant Nos.3 and 4
that there is delay in taking out Summons for Judgment.
Roznama shows that defendant Nos.3 and 4 appeared on
04/02/2019 and plaintiff has taken out Summons for Judgment
on 26/09/2019. Rule 119 of The Bombay City Civil Court Rules,
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1948 deals with procedure regarding summary suit. It provides
if defendant enters an appearance, or files a Vakalatnama,
plaintiff shall on affidavit made by himself or by any other person
apply for Summons for Judgment returnable not less than 10 days
from the date of service. Rule 119(3) of Bombay City Civil Court
Rules, 1948 provides if defendant does not enter an appearance
or file a Vakalatnama within ten days of the service upon him of
the writ of summons, plaintiff shall be at liberty to apply to put
the suit down for hearing forthwith. Rule 119(4) prescribes if
plaintiff does not apply for a decree within six months after filing
of the plaint, the suit shall be set down in the daily cause list for
dismissal.
14. On perusal of roznama, it is clear that Court has not
passed any order for setting down the suit for dismissal for want
of applying for decree within stipulated period. Plaintiff has
specifically contended that he was not feeling well and therefore,
he could not give instructions to his advocate. On perusal of
ordersheet, it is evident that matter was pending for appearance
of defendant Nos.1, 2 and 5 and suit was not set down in the
daily cause board for dismissal. Court has granted leave to
register summons for judgment. Thus, delay for taking out
summons for judgment deemed to be condoned.
15. Defendant Nos.3 and 4 contended that suit is not
based upon written contract and therefore, suit claim would not
be covered under Order 37 Rule 2 of C.P.C. Plaintiff is coming
with the specific case that defendants placed purchase orders. In
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pursuance to purchase orders, goods were delivered to defendants
under invoices and delivery challans.
16. In case of Jatin Kotecha V/s VFC Industries, 2008
(2) BomCR 155, Hon’ble Bombay High Court pleased to hold that suit
based upon invoices can be treated as suit based upon written
contract.
17. Defendant Nos.3 and 4 submits that Summons for
Judgment is taken out only against defendant Nos.3 and 4. Other
defendants are also necessary parties to the summons for
judgment. Record shows that defendant Nos.1, 2 and 5 failed to
appear before the Court. Plaintiff has taken out Summons for
Judgment against defendant Nos.3 and 4 only. Considering the
averments in the plaint, it would be relevant to refer Section 25 of
The Indian Partnership Act, 1932 which provides that every
partner is liable, jointly with all the other partners and also
severally, for all acts of the firm done while he is a partner. The
liability of the partner is joint and several. Therefore, Summons
for Judgment would not be bad for nonjoinder of other partners
of the aforesaid firm.
18. Defendant Nos.3 and 4 further submits that
defendant No.4 was retired from the partnership firm vide
Retirement deed dated 01/03/2017. Reliance is also placed upon
deed of retirement deed dated 01/03/2017. It shows that
defendant No.4 is retired from partnership firm with effect from
01/03/2017. Defendant No.3 and 4 further submit that defendant
No.1firm is dissolved w.e.f. 16/06/2017 and defendant No.2 has
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taken over and continued with the business of defendant No.1. As
per the deed of dissolution dated 16/06/2017, it was agreed
between defendant Nos.2 and 3 that defendant No.2 shall be
wholly responsible for all the liabilities and statutory debt of the
firm and therefore defendant Nos.3 and 4 would not be liable for
dues of the partnership firm after the dissolution of partnership
firm on 16/06/2017.
19. Plaintiff is not disputing the retirement deed dated
01/03/2017. Sec. 32 of The Indian Partnership Act, 1932 deals
with retirement of partner. Section 32(2) of The Indian
Partnership Act, 1932 provides that a retiring partner may be
discharged from any liability to any third party for acts of the firm
done before his retirement by an agreement made by him with
such third party and the partners of the reconstituted firm, and
such agreement may be implied by a course of dealing between
such third party and the reconstituted firm after he had
knowledge of the retirement. There is no agreement between
plaintiff and partners of the firm as contemplated u/s. 32(2) of
The Indian Partnership Act. Plaintiff is claiming dues of the firm
during the period from 10/12/2015 to 21/09/2016. Thus,
plaintiff is claiming the amount of the transactions which took
place before the retirement of defendant No.4. There is no
agreement between plaintiff and partners of the reconstituted
firm discharging liability of defendant No.4. Thus, defendant
No.4 cannot seek discharge of her liability on the basis of
retirement deed dated 01/03/2017.
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20. Defendant Nos.3 and 4 have disputed the entire
transaction with plaintiff's firm. They have specifically denied
delivery of the goods under the invoices to the defendants.
Plaintiff has filed on record purchase orders placed by defendants.
The purchase orders are from 10/12/2015 to 21/09/2016.
Plaintiff has also filed on record invoices, excise gatepasses and
transport receipts to show that goods were delivered to
defendants. Defendant Nos.3 and 4 merely denied the
transactions. They have not explained as to how plaintiff got
custody of the purchase orders placed by defendants.
21. Plaintiff issued demand notice dated 30/06/2017 for
dishonour of one of the cheque issued by defendant No.1
partnership firm. Defendant No.2Aatish Shankarlal Garole and
Defendant No.3Jalabhai Jashabhai Rathod have replied the said
notice by giving separate replies. It is pertinent to note that all
the replies were sent through one advocate only. Defendant No.2
Aatish admits that defendant No.1 was having business relations
with plaintiff for a long time. Defendant No.2 Aatish further
admits to have purchased S.S.CR. Coils from plaintiff. However,
defendant No.2 further claims that he has paid entire
consideration amount towards supply of goods and no amount is
outstanding against defendant No.1. Thus, from the reply given
by defendant No.2 Aatish, it is evident that defendant No.1
partnership firm was having business relations for a long time
with plaintiff.
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22. Defendant No.3 also replied the said notice.
However, he claims that he joined the partnership firm on
01/01/2017 and therefore, he has no knowledge about the
transactions between defendant No.1 and plaintiff during the
period from 10/12/2015 to 21/09/2016. It is pertinent to note
that defendant No.3 has also not specifically denied the
transactions with plaintiff.
23. Defendant No.4 also replied the said notice. In her
reply, she claims that she is a silent partner and therefore, she has
no knowledge about transactions which took place between
plaintiff and defendant No.1.
24. Before filing of the suit, Plaintiff issued notice dated
05/10/2018 to defendants and asked for the amount of
Rs.1,43,26,001/. The said notice was replied by defendant Nos.3
and 4. Defendant No.3 contended that he joined the partnership
firm on 01/01/2017 and therefore, he has no knowledge of
transactions made by defendant No.1 before 01/01/2017.
Defendant No.4 claims that she is a silent partner and therefore,
she is not aware about the transactions between plaintiff and
defendant No.1firm.
25. In reply affidavit, defendant Nos.3 and 4 are denying
the transactions with plaintiff. But, as discussed supra, defendant
No.2 in his reply to the notice dated 30/06/2017, admits business
relationship with plaintiff for a long time. Thus, from the
material produced before the Court, it can be inferred that plea
taken by the defendants in their reply affidavit is not in
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consonance with their replies to notice given by plaintiff.
26. Plaintiff's case is that he has supplied goods to
defendants of worth Rs.75,92,765/ during the period from
10/12/2015 to 21/09/2016. His claim is well supported by
documents filed on record which consist of purchase orders
placed by defendants, tax invoices, excise gatepasses and
transport receipts. Plaintiff further claims that he has charged
VAT @ 2% of the invoice value as goods were supplied against
issuance of Cforms. The purchase order also contains a
stipulation regarding purchase against Cforms. Plaintiff has also
filed Cforms details which shows that plaintiff has received
Cforms till 30/03/2016. Plaintiff is claiming to be in possession
of Cforms issued by defendants. No explanation is offered by
defendant Nos.3 and 4 as to how plaintiff came into possession of
these Cforms. Thus, the very contention of defendant Nos.3 and
4 regarding non receipt of goods under invoices filed on record is
not substantiated by the material on record.
27. As discussed above, defendant No.4 cannot avoid her
liability on the ground that she retired from the partnership firm
on 01/03/2017. The form No.G of Registrar of Firms shows that
she was the partner of the partnership firm during the relevant
time. As discussed supra, there is no agreement between plaintiff
and partners of reconstituted firm, after retirement of defendant
No.4, discharging defendant No.4 from the liability as
contemplated under sec.32 of The Indian Partnership Act.
Therefore, she cannot avoid the liability on the basis of retirement
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deed dated 01/03/2017.
28. Form G of Registrar of Firms shows that defendant
No.3 joined the partnership firm on 31/12/2016. As discussed
supra, transactions between plaintiff and defendants took place
from 10/12/2015 to 21/09/2016. Thus, transactions between
plaintiff and defendant No.1 partnership firm took place prior to
joining of defendant No.3 as a partner to the firm. Section 31 of
the Indian Partnership Act deals with introduction of partners.
Section 31(2) provides that subject to provisions of section 30, a
person who is introduced as a partner into a firm does not thereby
become liable for any act of the firm done before he became a
partner. Thus, by virtue of Section 31(2) of the Partnership Act,
defendant No.3 cannot be held liable for any act of the firm done
before he became a partner. Therefore, defendant No.3 cannot be
held responsible for the acts of the firm done before he became
partner. Therefore, he is entitled to unconditional leave to defend
the suit.
29. As discussed above, defendant No.4 cannot avoid her
liability merely on the ground that she retired from the firm with
effect from 01/03/2017. As stated supra, defendant Nos.3 and 4
have denied the transactions with plaintiff firm, but, could not
substantiate their defence. Mere denial is not sufficient to avoid
the liability. Defendant No.4 would be liable for the acts of the
firm when she was partner of the firm. The material on record
shows that goods under invoices were supplied to defendant
No.1partnership firm. The conspectus of the above all discussion
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is that defence raised by defendant No.4 is illusory or practically
moon shine. However, by showing mercy to defendant No.4, in
order to enable her to prove her defence, leave to defend can be
granted to defendant No.4. However, while doing so, Court will
be well justified in protecting the interest of plaintiff by directing
defendant No.4 to deposit an amount of Rs.75 lacs in the Court.
In the result, following order:
ORDER
1. Defendant No.4 Mrs.Geeta Jala Rathod shall deposit a
sum of Rs.75,00,000/(Rs.Seventy Five Lacs only) in Court
within a period of 12 weeks from today. If this condition is
compiled with, defendant No.4 is granted leave to defend
the suit and she shall file Written Statement within a period
of 30 days from the date of deposit.
2. If aforesaid condition of the deposit is not followed
by defendant No.4 within stipulated time, plaintiff
shall be at liberty to apply for exparte decree against
defendant No.4.
3. Unconditional leave to defend the suit is granted to
defendant No.3 Jalabhai Jashabhai Rathod.
4. Defendant No.3 shall file his written statement
within 30 days from today.
5. There shall be no order as to costs.
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6. S/J No.241/19 is disposed of accordingly.
07/12/2021 S.U.HAKE
JUDGE,
CITY CIVIL COURT,
GR.MUMBAI.
Dictated on : 07/12/2021
Transcribed on : 13/12/2021
Signed on : 17/12/2021
CERTIFIED TO BE TRUE AND CORRECT COPY OF THE
ORIGINAL SIGNED JUDGMENT/ORDER”.
18/12/21 at 04.30 pm.
Mrs.Tanushree C.Kamble
Name of the Judge HHJ SHRI SU Hake
Date of Pronouncement of
judgment/order
07/12/21
Judgment and order signed by P.O. 17/12/21
Judgment/order uploaded on 18/12/21
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