Concast Steel & Power Limited vs Ramesh Gudla on 3 March, 2016

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Calcutta High Court

Concast Steel & Power Limited vs Ramesh Gudla on 3 March, 2016

Bench: Harish Tandon

ORDER

GA No.2294 of 2014
CS No.261 of 2014
IN THE HIGH COURT AT CLACUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE

CONCAST STEEL & POWER LIMITED
VERSUS
RAMESH GUDLA

BEFORE:
The Hon'ble JUSTICE HARISH TANDON
Date : 3rd March, 2016

Appearance:
Ms. Noelle Banerjee, Adv.
Mr. Dipak Dey, Advocate.
Ms. Rimpa Rajpal, Advocate.
..for the petitioner.

The Court:- In a suit for recovery of money to the tune of

Rs.53,63,443/- on account of goods sold and delivered, the present

application has been taken out by the plaintiff for judgment on

admission to the tune of Rs.46,75,000/-. It is pleaded that the

transaction between the parties took place in the year 2012 when

different purchase orders were placed by the defendant upon the

plaintiff for supply of goods. The plaintiff executed those

orders and raised invoices from time to time. The plaintiff

restricted its claim to eight of such purchase orders, particulars

whereof have been jotted down in Annexure-A to the application.

It is contended by the plaintiff that the purchase orders were
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received and accepted by them at the registered office of the

plaintiff situated within the jurisdiction of this Court and the

goods were also sold and delivered by them from the said office.

The plaintiff states that there was no objection on quality and

quantity of the materials from the defendant who accepted the same

without any demur or protest. Two cheques were issued by the

defendant to the plaintiff covering a sum of Rs.46,75,000/-

towards part payment of the total outstanding, which were

presented with the plaintiff's banker but were dishonoured. It

would reveal from pages 26 and 27 of the application that the

cheques were dishonoured as no fund was available. The

application for judgment on admission is basically founded on

dishonour of two cheques which, according to the plaintiff, is a

clear admission of part liability and it would be futile exercise

if the plaintiff is compelled to face trial at least for such

amount.

Though the defendant is not represented when the application

is taken up today, but the affidavit in opposition to the said

application is found on record. On perusal of the averments made

therein, it would transpire that the objection against judgment on

admission rests upon the jurisdiction of this Court to entertain

the suit, as no cause of action, either wholly or partly, arose

therein. It is further stated that a memorandum of agreement

dated 1st April 2011 was executed by and between the plaintiff and

defendant at Orissa, which contains an arbitration clause. It is
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further stated that five blank cheques were issued to be kept as

security for transaction between the parties and were never meant

for part payment of the alleged liability. The defendant denies

that the cheques were dishonoured for insufficient fund, rather he

says that an instruction was given to his banker to stop payment

of the aforesaid two cheques as there was no legal enforceability

of liability. Except denial of receiving the material and the

delivery thereof, there is no other positive case made out by the

defendant. Attention of the Court is further drawn to several

letters annexed to the affidavit in opposition pertaining to the

year 2011 wherefrom it appears that certain purchase orders were

issued at that relevant point of time but because of non-dispatch

of those orders were subsequently cancelled. The letter dated

26.1.2012

annexed at page 19 to the affidavit in opposition relates to the handing over of five cheques for enhancing the security from Rs.40 lakh to Rs.100 lakh and return of those cheques as the defendant did not want to enhance liability.

Plaintiff in turn denies the existence of such letter or the same being dispatched to them. The plaintiff has further denied the ledger account annexed to the affidavit in opposition to be true and correct state of affairs. There is no denial of the said Memorandum of Agreement dated 1.4.2011 executed between the plaintiff and the defendant. The explanation offered in reply is that the said agreement has no nexus or connection with the transaction forming subject matter of the instant suit. 4 On meaningful reading of clauses of the said Memorandum of Agreement dated 1.4.2011, it transpires that the said agreement for a period of one year was subject to renewal every year with effect from 1.4.2011, provided both the parties are satisfied with their commercial dealing. Clause 19 thereof contains a security to be given by the defendant as distributor to safeguard the interest of the plaintiff company to the extent of Rs.1 crore by way of bank guarantee from any nationalized bank. Interestingly, it is provided in the said clause that such bank guarantee would remain operative till 31.3.2015 and shall cover all the claims of demand of the plaintiff company. It is nobody's case that in terms of the said clause, the security by way of bank guarantee was furnished by the defendant but what can be culled out from the stand of the defendant is that the security by depositing five several cheques were deposited with the plaintiff company to secure the claim. There is no denial on the part of the defendant that those cheques were not given by him to the plaintiff but the disputes hinges on whether those cheques were separately given to the plaintiff towards part payment of the total liabilities or not as a security deposit. Endeavour has failed to find out from the defence put forth by the defendant that there was no dealing with the parties and the entire claim is the fictitious one. The Memorandum of Agreement would undoubtedly suggest that parties entered into commercial dealings and in terms thereof goods were sold and delivered to the defendant by the plaintiff. Even the letter dated 5 26.4.2011 disclosed by the defendant would speak of an order dated 18.4.2011 which was subsequently cancelled for non-dispatch of material within the specified time. The letter dated 11.06.2011 would manifest that the supplies were made by the plaintiff to the defendant but the objection was raised on the price quoted by the plaintiff to be at the higher end and request was made to the plaintiff to give credit of Rs.200 per MT to the defendant. It is, therefore, apparent even from the stand of the defendant that the parties were connected with the commercial dealing and the defendant was receiving the materials of the plaintiff and it is inconceivable that the plaintiff would not be entitled to the price of the goods sold and delivered. Once the plaintiff approaches the Court for judgement on admission, it is the foremost duty cast upon it to satisfy the Court that the admission is clear, unequivocal and unconditional. If there is a plausible defence taken by the defendant, which is striking at the root of the matter and requires evidence to be adduced in this regard, it would not be proper for the Court to pass a judgement on admission under Order 12 Rule 6 of the Code. It is no longer res integra that power under Order 12 Rule 6 of the Code is discretionary and not a matter of right of the plaintiff to get the judgement on admission. In this regard, reliance can be safely placed upon the judgement of the Supreme Court in the case of S. M. Asif versus Virender Kumar Bajaj, reported in (2015) 9 SCC 287 wherein it is held that the words in Order 12 Rule 6 CPC 'may' and 'make such 6 order...' show that the power under Order 12 Rule 6 CPC is discretionary and cannot be claimed as a matter of right.

The judgement on admission is not a matter of right; rather is a matter of discretion of the Court. Where the defendants have raised objections, which go to the root of the case, it would not be appropriate to exercise the discretion under Order 12 Rule 6 of the Code of Civil Procedure. The said Rule is an enabling provision which confers discretion on the Court in delivering a quick judgement on admission and to the extent of the claim admitted by one of the parties of his opponent's claim.

The expression "admission" came up for consideration before the Supreme Court in the case of Uttam Singh Duggal & Co. Ltd. Vs. United Bank of India & Ors reported in (2000) 7 SCC 120 and it is held that the admission should not only be clear and unequivocal but the admission can also be gathered otherwise. It is, therefore, settled that if certain statements are made and have been brought before the Court to treat it as admission the reasonable opportunity should be given to the other side against whom such admission is applied to give its explanation of such admission. It would be profitable to the quote the observation made in the paragraph 17 of the said report which runs thus:-

"17. Learned counsel for the petitioner contended that admissions referred to in Order 12 Rule 6 CPC should be of the same nature as 7 other admissions referred to in other rule preceding this Rule. Admissions generally arise when a statement is made by a party in any of the modes provided under Sections 18 to 23 of the Evidence Act, 1872. Admissions are of many kinds; they may be considered as being on the record as actual if they are either in the pleadings or in answer to interrogatories or implied from the pleadings by non-traversal. Secondly, as between parties by agreement or notice. Since we have considered that admission for passing the judgement is based on pleadings itself it is unnecessary to examine as to what kinds of admissions are covered by Order 12 Rule 6 CPC."

The judgement of the coordinate Bench in the case of Adhunik Ispat Ltd. Vs. Triveni Infrastructure Development Co. Ltd. reported in 2011(2) CHN 527 can be looked into for limited purposes on presumption of admission under Negotiable Instruments Act. It is expressly observed that the Negotiable Instruments Act recognizes that a presumption arises out of the cheque being issued that it has been done so for valid consideration. The admission has not been defined in the Code of the Civil Procedure for the purpose of order 12 Rule 6 and 8 therefore to be understood taking aid from different Acts which stands pari materia, even Evidence Act deals with the kind of an admission under Section 17 thereof, to mean, that admission has to be an overt Act of the maker thereof different from the admission that have assumed logical consequence. What is sine qua non is that there must be express and clear admission of the statement made by the plaintiff either in the pleading or otherwise which includes an admission made orally to succeed under Order 12 Rule 6 of the Code of Civil Procedure. The object behind the incorporation of provisions under Order 12 Rule 6 of the Code is to expedite the trial or an admission can be inferred from the attending facts and circumstances of the case without any dispute.

The Apex Court in the case of Charanjit Lal Mehra & Ors. Vs. Kamal Saroj Mahajan & Ors. reported in (2005) 11 SCC 279 succinctly observed that undoubtedly narrowing down the meaning of the admission under the said Rule shall be opposed to the legislative intent and shall frustrate the object of enabling the parties to obtain a speedy judgement in the following words:-

" 8.Learned counsel made an alternative submission that the revision petition was not maintainable and the lease deed is not a 9 registered one and therefore, it is not maintainable. None of these objections were raised by the defendants before the learned Single Judge. Even before the trial court, the non-registration of lease deed(which did not prescribe any term) was not put in issue. It is only devised now to somehow defeat and delay the eviction and possession of the premises to the landlady. In fact, Order 12 Rule 6 CPC is enacted for the purpose of and in order to expedite the trials if there is any admission on behalf of the defendants or an admission can be inferred from the facts and circumstances of the case without any dispute; then, in such a case in order to expedite and dispose of the matter such admission can be acted upon. In the present case, looking at the terms of the lease deed, there can be no two opinions that the tenancy was joint/composite and not an individual one. Therefore, on these admitted facts the view taken by learned Single Judge of the High Court appears to be justified. In this connection, a reference may be made to a decision of this Court in the case of Uttam 10 Singh Duggal & Co. Ltd. Vs. United Bank of India. Their Lordships have held as follows:

"In the objects and reasons set out while amending Rule 6 of Order 12 CPC it is stated that `where a claim is admitted, the court has jurisdiction to enter a judgement for the plaintiff and to pass a decree on admitted claim. The object of the rule is to enable the party to obtain a speedy judgement at least to the extent of the relief to which according to the admission of the defendant, the plaintiff is entitled.' The Supreme Court should not unduly narrow down the meaning of this rule as the object is to enable a party to obtain speedy judgment."

Therefore, in the present case, as appearing to us, thee is a clear admission on behalf of the defendants that there existed a relationship of landlord and tenants, the rent is more than Rs.3500 and the tenancy is a joint and composite one. As such, on these admitted facts, there are no two opinions in the matter and the view taken by the learned Single Judge of the High Court appears to be 11 correct and there is no ground to interfere in this special leave petition and the same is dismissed.

The learned Advocate for the plaintiff cited another coordinate Bench decision in the Abheya Realtors Pvt. Ltd. Vs. SSIPL Retails Ltd. & Anr. reported in 2010(2) CHN(CAL) 203 to show that in a commercial matter relegating the parties to trial, even if the Court finds a clear admission would amount to putting the defendant to premium as the suit takes years to get disposed of.

The object and purpose for incorporating Order 12 Rule 6 in the Code of Civil Procedure is to provide speedy trial where the defendant has made a clear, unequivocal and unconditional admission of the claim of the plaintiff and it would be futile exercise to invite or to relegate the parties to go to the trial. The plaintiff should not be detained and held to prove his claim once success can be achieved on mere admission of the defendant.

There is no quarrel to the settled proposition of law that the admission, which is clear, unequivocal and unconditional, may entitled the plaintiff to get the judgment on admission, provided the Court must offer an opportunity to the defendant to explain such admission. Though power under Order 12 Rule 6 of the Code is discretionary, such discretion 12 should be exercised reasonably, rationally and in accordance with law. The admission must be of such nature which would entitle the plaintiff to succeed and therefore depend upon the facts and circumstances involved therein.

It would be apparent from the stand taken by the defendant that there is no specific denial of jural relationship between plaintiff and the defendant. The objection is basically founded on the jurisdiction of this Court as, according to him, none of the part of the cause of action arose wholly or partly within the jurisdiction of this Court. It would further transpire from the affidavit in opposition that there is a clear and unequivocal admission of handing over the cheques to the plaintiff. According to the defendant, the said cheques were given as security for due performance of his obligation under the contract. On the other hand, the plaintiff claims that the aforesaid two cheques were given towards part payment of the total liability. Even if it is construed that the cheques were given as security, such security was obtained to meet out the claim of the plaintiff. It would further reveal that the defendant categorically asserts that an instruction was given to its banker not to honour the aforesaid cheques, which is found to be factually incorrect and a blatant lie from the Cheque Return Memo of UCO Bank, the banker of the plaintiff, stating that the chqeues could not be honoured for non 13 availability of funds. Since the defendant could not deny the transaction between the plaintiff and the defendant nor could he deny the handing over of the cheques to the plaintiff, this Court finds that there is a clear, unequivocal and unconditional admission on the part of the defendant for the said sum of Rs. 46,75,000/-.

There is no hesitation in my mind that the plaintiff has been able to make out a case under Order 12 Rule 6 of the Code. There shall be a judgment on admission to the extent of Rs. 46,75,000/- which the defendant shall pay within a month. In default, the plaintiff shall be entitled to an interest @ 18% per annum from the date of judgment till realization.

[HARISH TANDON, J.] nm / S.Kumar

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