Delhi High Court
Sarmon Pte Ltd. vs Chemi Nova Industries Pvt. Ltd. on 5 March, 2002
Equivalent citations: 99(2002)DLT103
Author: Mukundakam Sharma
Bench: Mukundakam Sharma
JUDGMENT Mukundakam Sharma, J.
1. The present suit is instituted by the plaintiff for recovery of an amount of US Dollars 3,32,118.80. The suit is filed under the provision of Order 37 of the Code of Civil Procedure and, therefore, it is a summary suit. The suit is based on invoices, bill of lading and bills of exchange.
2. In the plaint it is stated by the plaintiff that the defendant had been importing from the plaintiff raw materials for manufacturing Polyurethane Foam namely, Polyarcol and that the plaintiff had been supplying the same to the defendants in terms of the requests made by the defendants from time to time. In order to support the aforesaid contention the plaintiff has produced nine invoices of different dates amounting to Rs. 2,78,616/- U.S.$ and copies of the said documents have been annexed to the petition as Ex.A. It is further stated that the plaintiff forwarded the aforesaid invoices Along with the other documents relating to the shipment of the goods including the bills of lading from time to time and that the said bills of lading in respect of the goods shipped by the plaintiff to the defendants covered under the invoices being Ex.A have been placed on record as Ex.B. It is also stated that in respect of the goods supplied by the plaintiff from time to time to the defendant, the said defendant accepted the bills of exchange drawn on them by the plaintiff and the said goods were presented for payment on their respective dates and subsequently also but the defendant failed and neglected to honour are bills of exchange and that the plaintiff duly protested and notarised the dishonouring of the bills of exchange. The said bills of exchange were annexed with the plaint as Ex.C.
3. It is also alleged that the outstanding sums due in respect of the aforesaid goods supplied, invoiced raised and bills of exchange accepted by the defendant have not been cleared by the defendant and that instead of repeated requests the defendant has failed and neglected to clear the said outstanding dues. It is also stated that the amount involved in the suit is admitted by the defendant as the defendant had written to the Reserve Bank of India for grant of permit for the payment of the plaintiff in U.S. Dollars and that on the written requests of the defendant the Reserve Bank of India issued permits from time to time for making payment in U.S. Dollars of the aforesaid in favor of the plaintiff by the defendant, copies of which have been annexed with the plaint Mar. Ex.D, which are various exchange permits granted by the Reserve Bank of India authorising to make payments to the plaintiff from time to time.
4. As the aforesaid amount was not cleared the plaintiff sent a legal notice by Fax and also by Registered Post stating the aforesaid facts and calling upon the defendant to make payments of the outstanding amounts in U.S. Dollars 2,78,616.00 with further interest thereon at the rate of 14% per annum. The said notice dated 22.1.1990 is annexed with the plaint and Marked Ex.F. As there was no response from the defendant, the plaintiff instituted the present suit seeking for recovery from the defendant the total amount due and payable amounting to U.S. Dollars 3,32,18.80 with further interest at 18% per annum from the date of the suit till payment and/or realisation.
5. The defendant herein entered appearance and upon Summons for Judgment being served an application was filed by the defendant seeking for leave to defend the suit. In the application filed by the defendant several objections have been raised regarding maintainability of the summary nature of the suit.
6. It was argued before me by the counsel for the defendant that no such goods in respect of which outstanding amount is claimed by the plaintiff were supplied to the defendant. It was submitted that the plaintiff shall have to establish/actual physical delivery of the goods to the defendant before claim for the price of the goods could be claimed and amount recovered from the defendant by the plaintiff and that in absence of any proof on the record showing alleged delivery of the goods friable issues arise for consideration. It was also submitted that the plaintiff do not admit any document save and except the six bills of exchange which were signed by the defendant and, therefore, no decree could be granted on the basis of the other documents placed on record. It was also submitted that the invoices/bills filed Along with the suit relate to the period between 12.1.1988 to 5.7.1988 and the due dates of the said invoices are stated to be 11.4.1988 to 29.8.1988 and that the last date due as per the demand of the plaintiff expired on 29.9.1988 and, therefore, according to the defendant period of limitation started against the plaintiff on 29.9.1988 itself and expired on 29.9.1991. It was accordingly submitted that as the suit was filed on 21.10.1992, the suit is hopelessly barred by time. It was also submitted that bills of exchange are also of the period 1988 and became due after 60 days and even if the suit is based on the aforesaid bills of exchange, which is of the year 1988 and became due after 60 days then also the suit is barred by time. Further contention was that the plaintiff has not been able to prove any acknowledgement of the alleged debt in accordance with the provisions of Section 18 & 19 of the Limitation Act and, therefore, at least to that extent a friable issue does arise in the suit. It was also submitted that in the suit also an amount of US $ 535002 by way of interest is claimed although there was no agreement in writing to pay any such interest and to that extent also according to the defendant a friable issue arises.
7. Counsel appearing for the plaintiff while refuting the aforesaid contention submitted that the suit is based in bill of exchange and, therefore, the present suit under Order 37 is maintainable as provided for under Order 37 Rule 1(2) of the Code of Civil Procedure. It was also submitted that six bills of exchange submitted and filed by the plaintiff are admitted by the defendant and, therefore, on the basis thereof the plaintiff is entitled to a decree in the suit. It was also submitted that the defendant had received all the materials imported by the plaintiff, which is proved from the documents annexed with the plaint.
8. I have considered the rival submissions of the counsel appearing for the parties on the basis of the documents placed on record. The suit filed by the plaintiff under Order 37 of the Code of Civil Procedure is maintainable as the suit is based on bills of exchange. However, the said bills of exchange which are admitted documents are for amount less than for what the suit is filed. In Punjab & Sind Bank v. Seth Roller Flour Mills and Ors., reported in AIR 1988 Delhi 308 it was held by this Court that in order to entitle the defendants for leave to defend in a suit for recovery of money under Order 37, Rule 3 it is incumbent upon them to show that they have substantial defense and friable issues are raised and their defense is not frivolous or vexatious. It was also held that no rule of thumb could be laid down for grant of leave to defend and each case has to be decided on its particular facts and circumstances and that leave to defend would be granted if it is shown that the defendants are raising friable issues and their plea is at least bona fide and plausible and not sham or illusory or practically moonshine. In the said decision it was also held that under the provisions of Order 37 Rule 3 of the Code of Civil Procedure the only requirement is that copy of the plaint and annexures thereto have to be furnished to the defendants.
9. In view of the aforesaid position the contention of the counsel appearing for the defendant that the documents to which reference is made and reliance is sought to be placed having only been annexed and not filed as documents cannot be relied upon and referred to by the court cannot be accepted. Documents in the present suit were filed by the plaintiff in accordance with the requirements of Order 37 of the Code of Civil Procedure and, therefore, the said contention is rejected.
10. Having held thus, let me now proceed to scrutinise and examine as to whether or not the defendant has been able to raise substantial triable issue. Documents were filed as annexures to the plaint. The suit was directed to be listed for admission/denial of documents during the course of which the defendant has admitted only the documents in the nature of the bills of exchange. They are six in number and are admitted documents in the present suit. So far the remaining documents which are filed Along with the plaint are concerned, the same were neither admitted nor denied by the defendant on the ground that there is no signature of the defendant No. 2 on the said documents. The six documents which are admitted in the present case are for amount less than what is claimed in the suit.
11. The counsel appearing for the plaintiff during the course of his arguments sought to rely upon the bills of lading and also on the invoices in support of the claim of the plaintiff in the suit. Reliance was also placed on the permission given by the Reserve Bank of India, which are annexed as Annexure-D which are copies of various exchange permit granted by the Reserve Bank of India authorising the defendants to make payments from time to time. Although the said documents are on record, in my considered opinion the said shall have to be co-related to the demand made in the plaint. The suit is based on the bills of exchange which is of the period 1988 and if the suit is based only on the said documents, the suit would be barred by time.
12. In case the plaintiff seeks to relay upon certain acknowledgements, the same shall have to be proved by leading evidence which could be either oral or documentary. So far the claim for payment of interest is concerned, the definite stand of the defendant is that no payment of interest was envisaged at the time of the agreement and, therefore, no such claim could be made. All these issues in my considered opinion are friable issues and, therefore, the defense raised in the present suit cannot be said to be vexatious or frivolous and in no case the same is moonshine. The defense raised by the defendant raises friable issues which are required to be tried and proved by leading evidence and, therefore, I am of the considered opinion that this is a fit case where leave should be granted to the defendant to defend the present suit, which I hereby do. Accordingly, the suit shall be treated as an ordinary suit and the defendant shall file its written statement positively within six weeks. The matter shall be listed immediately thereafter that is on 15th April, 2002 for further orders in the suit. The application filed by the defendant under Order 37 Rule 3 is allowed to the aforesaid extent.