Calcutta High Court
Darshan Mekani vs Aman Khemka on 22 August, 2017
Author: Soumen Sen
Bench: Soumen Sen
ORDER SHEET
GA No.174 of 2016
With
CS No.294 of 2015
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
DARSHAN MEKANI
Versus
AMAN KHEMKA
BEFORE:
The Hon'ble JUSTICE SOUMEN SEN
Date : 22nd August, 2017.
Appearance:
Mr. Ratnanko Banerjee, Sr. Adv.
Mr. Kuldip Mullick, Adv.
Mr. Sabyasachi Chowdhury, Adv.
Mr. N. Chowdhury, Adv.
Mr. A. Poddar, Adv.
The Court : The suit is filed under Order 37 of the Code of Civil Procedure, 1908. The suit is based on a dishonoured cheque claimed to have been issued by the defendant to the plaintiff. The summon in the prescribed form was served upon the defendant by postal service on 10th December, 2015 and by Bailiff on 14th December, 2015. The defendant, however, did not enter appearance within the period of ten days from the date of service of summons and instead had filed an application for leave to defend after the expiry of the statutory period. The said application, however, was not pursued and was ultimately dismissed for default.
However, the instant application was filed prior to the application filed for extension of time to enter appearance in the suit. At this stage, the question arises as to whether the defendant would be entitled to be heard on this question. 2
Mr. Sabyasachi Chowdhury, learned counsel appearing on behalf of the defendant/applicant submits that notwithstanding the dismissal of the application for extension of time to enter appearance and file written statement, the Court is required to be satisfied that the Court has jurisdiction to try the suit as a summary suit. In other words, it is contended that irrespective of the appearance of the defendant in the suit, the Court needs to be satisfied that it comes within the purview of Order 37 of the Code of Civil Procedure. Mr. Chowdhury has referred to Section 30 of the Negotiable Instruments Act, 1881 and submits that the cause of action in the suit is based on Section 30 of the Negotiable Instruments Act and not on Section 31 of the said Act. Mr. Chowdhury submits that it is a liability of the drawer which is now sought to be enforced in this proceeding and not of the drawee of the cheque and accordingly, this court has no jurisdiction to try and determine the suit on ground of lack of territorial jurisdiction as no part of cause of action has arisen within the jurisdiction of this Court.
Mr. Ratnanko Banerjee, learned senior counsel representing the plaintiff submits that in view of failure on the part of the defendant to enter appearance in the suit and to pursue its remedy by filing an application for leave to defend, which proceeding the defendant has abandoned, the defendant cannot be heard in this proceeding at all. It is submitted that even in the application for leave to defend, the point of jurisdiction of this Court was urged. The application as on date does not survive. Mr. Banerjee has relied upon a decision of this Court in 'Nawn Estates Pvt. Ltd. vs. Maheswary Ispat Ltd. reported at 2015(3) CHN (CAL) 231 in support of the submission that this application is not maintainable and the defendant cannot be heard on the point of demurrer at all. In Nawn Estates Pvt. Ltd. (Supra) I had the occasion to consider the difference between the procedure of ordinary suit and the summary suit. On the basis of the authority on the subject in the said decision it was held that a decree passed in a summary suit where 3 leave to defend the suit has been refused is almost automatic. The consequence of passing a decree cannot be avoided.
In view of Order 37 Rule 2 Sub-Rule (3), in my view, the defendant cannot be heard at all in this proceeding. Hearing on any point including the demurrer would mean the defendant would be allowed to appear and contest the suit of which the defendant is robbed off by reason of failing to enter appearance in the suit. In Nawn Estates Pvt. Ltd. (Supra), it is held :
" 8. The difference between the procedure of ordinary suit and of summary is well-known as in the case of the former the defendant requires no leave of Court to defend suit and he is entitled to defend it as of right while in case of latter defendant is required to apply for leave to defend within 10 days of service of summons for judgment. In a summary suit, the defendant has no right to defend per se unless leave is granted to him by Court to defend suit. In the plaint, a specific averment is made to the effect that the suit is filed under Order 37 and no relief which does not fall within the ambit of the said rule has been claimed in the plaint. If the defendant has not indicated appearance in the stipulated period under Order 37 Rule 2, C.P.C., the consequence indicates under Order 37 Rule 2 would follow and the plaintiff would be entitled to succeed in suit. [Mrinalini Dassi v. Kumar Surjendu Narayan Deb, ILR 1956(1) Cal 197]
9. The words "allegations in the plaint shall be deemed to be admitted" mentioned in Order 37, have been substituted for the Explanation contained in the old section 532 of the 1882 Code. They embody an exception to the fundamental principle that a plaintiff must prove the case with which he comes to Court and dispense with such proof in view of the special nature of the documents mentioned in Rule 1.4
10. The effect of this words is to enable the plaintiff to succeed on his own allegations, though they may be of such a nature that had the defendant appeared and denied them, they would have to be proved by the plaintiff by leading evidence.
11. Such presumption having regard to the stringent provision of the statute is elevated to an undeniable position thereby forfeiting the right of the defendant to contest the suit in failure to enter an appearance in the suit within the stipulated period of 10 days in view of the stipulations mentioned in the summons. The mandatory duty cast upon the Court on failure to enter appearance is quite clear from the language of the said provision.
12. In a summary suit, if the defendant does not enter appearance within ten days of service of summons, the allegations in the plaint shall be deemed to be admitted and the plaintiff shall be entitled to a decree not exceeding the sum mentioned therein together with interest at the rate specified.
13. The learned Single Judge of this Court in Universal Cable Ltd. vs. West Bengal State Electricity Board, reported in 1997(2) C.W.N. 148 in dealing with a suit under the Negotiable Instruments Act, on the basis of the ratio laid down in AIR 1917 Cal 269 (J.B.Ross & Co. vs. C.R.Scrivan & Ors.) stated:
"It is needless to mention that Order 37 is a special summary procedure which cannot be equated to that of the course of prosecution of a procedure in a regular suit. Otherwise there would have been no efficacy for notification or incorporation of Order 37 in the body of the Civil Procedure by way of separate species of procedure canvassed for disposal of the matter which comes under the four corners of the summary proceeding. In support of his contention Mr. Chatterjee has relied on a case of J.B.Ross & Co. vs. C.R.Scrivan & Ors, reported 5 in AIR 1917 Calcutta 269 where the Division Bench of this Court has held that a Court cannot pass a decree except in suits on negotiable instrument governed by the provisions of Order 37 Rule 2. No decree can legally be given without evidence in a case where the defendant does not choose to contest except in suits on negotiable instruments governed by the provisions of Order 37 Rule 2 of the Code of Civil Procedure. We find even concurrence by Woodroffe J. who has been pleased to hold that according to Rule 2 sub-rule (2) of Order 37, in default of obtaining leave to appear and defend, the allegations of the plaint shall be deemed to be admitted and the plaintiff shall be entitled to a decree. In this context a reference may be made with regard to the provisions of Section 118 of the Negotiable Instruments Act and it may be compared to that of the provisions of section 114 of the Evidence Act. The significant expression used in the body of section 114 of the Evidence Act is that the Court may presume existence of any fact and the said presumption is optional at the discretion of the Court in section 114 of the Evidence Act. In terms of section 118 of the Negotiable Instrument Act it has been contended that unless contrary is proved, certain presumption shall be made under section 118 of Negotiable Instruments Act. Section 118 of the Negotiable Instrument Act forecasts a mandatory provision about presumption but section 114 of the Evidence Act makes reference to the discretion to be optionally exercised by the court. There is general option and the opinion of the same may be formed by the court about existence of any fact under section 114 but such option is not to be found unless contrary is proved in respect of presumption flowing from certain species of Negotiable Instrument. The presumption about passing of for consideration in specified clauses of negotiable instrument is compulsory and not optional unless contrary is proved. Therefore, 6 in the background of the same, the observation of Woodroffe J. assumed significance and therefore this Court is made to ponder about construction of the provisions of Order 37 of the Code of Civil Procedure. This Court in the light of the discussion made above leans in favour of a construction that in absence of leave being put forward within the deadline, there is no other option left to the Court but to pass a decree because the decree will follow as a matter of course and the Court cannot fix it on the Board for hearing."
14. In J.B Ross (Supra) Woodroffe in his Lordship's concurrent judgment have categorically stated that no decree can legally be given in any case without evidence except in cases of Order 37, C.P.C. According to Rule 2, sub-rule (2) of that order in default of obtaining leave to appear and defence in pursuance thereof, the allegations in the plaint shall be deemed to be admitted and the plaintiff shall be entitled to a decree for any sum not exceeding the sum mentioned in the summons.
15. In view of the stringent provision contained in Order 37, Rule 2, sub-rules (2) and (3) and having regard to the fact that the defendant did not enter appearance in the aforesaid period and obtain any leave to defend, the plaintiff would be entitled to a decree as claimed in terms of the summons.
16. The issuance of cheque itself creates a strong presumption of a debtor-creditor relationship and such presumption is not dislodged even from the contents of the reply to the winding up notice although the defendant had disputed the claim on the basis of purchase agreement contained in the letter dated May 4, 2010 and contended that the defendant was enjoying some loan facility but could not offer any explanation for issuance of such cheques which were dishonoured on presentation.
7
17. In Ramkarandas Radhavallabh v. Bhagwandas Dwarkadas reported in AIR 1965 SC 1144, the Hon'ble Supreme Court considered the scope of Order 37, Rule 2(2) of the CPC and held that :
"On the merits too, we think that the contention is fallacious. It proceeds on the basis that when leave to defend has been refused to a defendant, the Court is bound to pass a decree. It seems to us that what sub-rule (2) of R.2 of O.37 contemplates is that the Court will accept the statements in the plaint as correct and on those statements pass such decree as the plaintiff may in law be entitled to. If, for example, the plaint discloses no cause of action, the Court cannot pass any decree in favour of the plaintiff. If this were not so, the words "allegations in the plaint shall be deemed to be admitted" in sub-rule (2) of R.2 of O.37 would have been unnecessary. The Court in making a decree under sub-rule (2) of R.2 of O.37 has to keep the law in mind. If the law requires the Court to exercise a discretion on the facts deemed to be admitted, it will have to do so."
18. The Hon'ble Supreme Court in Ajay Bansal v. Anup Mehta and Others reported in (2007)2 SCC 275, considering on Order 37 Rule 3(5) held that a decree passed in a summary suit where leave to defend the suit has been refused is almost automatic. The consequence of passing a decree cannot be avoided." In view of the aforesaid, this application stands dismissed. However, there shall be no order as to costs.
(SOUMEN SEN, J.) B.Pal