Gujarat High Court
Merchem Limited & 3 vs New India Acid Baroda Private Limited on 17 April, 2017
Author: M.R. Shah
Bench: M.R. Shah, B.N. Karia
C/SCA/6351/2017 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 6351 of 2017
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE M.R. SHAH Sd/-
and
HONOURABLE MR.JUSTICE B.N. KARIA Sd/-
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1 Whether Reporters of Local Papers may be allowed NO
to see the judgment ?
2 To be referred to the Reporter or not ? NO
3 Whether their Lordships wish to see the fair copy of NO
the judgment ?
4 Whether this case involves a substantial question of NO
law as to the interpretation of the Constitution of
India or any order made thereunder ?
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MERCHEM LIMITED & 3....Petitioner(s)
Versus
NEW INDIA ACID BARODA PRIVATE LIMITED....Respondent(s)
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Appearance:
MR SALIL M THAKORE, ADVOCATE for the Petitioner(s) No. 1 - 4
MR DEVEN PARIKH, SENIOR ADVOCATE with
MR KUNAL J VYAS, ADVOCATE for
NANAVATI ASSOCIATES, ADVOCATE for the Respondent(s) No. 1
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CORAM:HONOURABLE MR.JUSTICE M.R. SHAH
and
HONOURABLE MR.JUSTICE B.N. KARIA
Date : 17/04/2017
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ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1.00. By way of this petition under Article 226 / 227 of the Constitution of India, the petitioners - original defendant Nos.1 to 4 have prayed for appropriate writ, order and/or direction to quash and set aside the impugned order dated 6/2/2017 passed by the learned Commercial Court, Vadodara below Ex.14 in Commercial Civil Suit No.182 of 2016 (Old Summary Suit No.42 of 2015) to the extent the said order imposes conditions on the petitioners against grant of leave to defend. It is also further prayed to issue appropriate order holding that the petitioners have right to defend the suit and are entitled to unconditional leave to defend the said suit.
2.00. Facts leading to the present Special Civil Application in nutshell are as under :-
2.01. That the respondent filed Summary Suit No.42 of 2015 before the learned Civil Court, Vadodara claiming an amount of Rs.2,49,59,728/- from the petitioners (hereinafter referred to as "the original defendants") towards supply of "Aniline Oil" as a dealer of GNFC Ltd. to the petitioner No.1 Company.
2.02. The original plaintiff filed the Suit under Order XXXVII of the Code of Civil Procedure for recovery of Rs.2,49,59,728/- on the ground that the plaintiff company is a private limited company duly registered under the Companies Act, 1956 having business of sale, marketing and manufacturing of various kinds of Chemicals substance / items.Page 2 of 20
HC-NIC Page 2 of 20 Created On Tue Aug 15 10:23:03 IST 2017 C/SCA/6351/2017 JUDGMENT The original defendant No.1 is registered company under the Companies Act and having it two different units at Kochin and Panoli at Bharuch. The original defendant No.2 and 4 are the Directors / MD of the defendant No.1 Company and responsible persons to lookafter and handle and conduct all day-to-day affairs of the defendant No.1 Company. It has been further averred in the paint that the plaintiff Company is having the dealership of GNFC, Bharuch for "Aniline Oil" and since 2011 the plaintiff has been supplying "Aniline Oil" to the defendants and since then they have business relation with the defendants. It has been further averred that in the beginning the defendant No.1 company made payment regularly against the delivered "Aniline Oil" but thereafter from 2013, defendants have adopted delay in payment against the supply of "Aniline Oil" and as per the statement of the account for the supplied "Aniline Oil" to the defendant No.1 Company, there is outstanding amount of Rs.2,17,04,112/-. It has been further averred that the plaintiff Company is having the Delivery Challans, G.C. Notes of Sowmya Transport, Retail Invoices and L.R. Of Classic Roadways for the supply of "Aniline Oil" to the defendants at Ernakulam. It has been further averred in the plaint that the defendants have accepted / received "Aniline Oil" from time to time without any dispute regarding the quantity and quality. It has been further averred that during the course of recovery of the outstanding amount, the defendants have issued three cheques each of Rs.50,00,000/- in the name of plaintiff / New India Acid (Baroda) Pvt. Ltd. and have assured to the plaintiff that all the cheques will be realized whenever presented in the Bank but when the plaintiff Company presented the said cheques in the HDFC Bank, Gotri, Vadodara on 2/4/2014 for clearance, the said cheques got Page 3 of 20 HC-NIC Page 3 of 20 Created On Tue Aug 15 10:23:03 IST 2017 C/SCA/6351/2017 JUDGMENT bounced unpaid on 5/4/2014 with an endorsement of "Insufficient Fund" and the bank has intimated this fact to the plaintiff with the cheque return memos. It has been further averred by the plaintiff that thereafter, a demand notice was issued on 19/4/2014 to the defendants which was duly served to them on 26/4/2014 but neither they paid the legitimate amount to the plaintiff nor did they reply the notice. It has been further averred by the plaintiff that all the defendants have committed economic criminal offence and breach of trust and he has also initiated the proceeding under section 138 of the Negotiable Instruments Act, 1881.
2.02.1. Under the aforesaid circumstances, the plaintiff has filed the suit for recovery of an amount of Rs.2,17,04,112/- along with interest from the defendants.
2.02.2. Thus, according to the plaintiff, orders for supply were placed orally / verbally.
2.02.3. In the suit, the plaintiff claimed the following :
(a). Amount of Rs.2,49,59,728/- which comprises of non-
contractual interest of Rs.32,55,616/- (for different periods).
(b). Non-contractual running interest from the date of the
filing of the suit and
(c). Legal Expenses (non-contractual).
2.02.4. That as observed hereinabove, the suit filed by the original plaintiff was filed as Summary Suit under Order Page 4 of 20 HC-NIC Page 4 of 20 Created On Tue Aug 15 10:23:03 IST 2017 C/SCA/6351/2017 JUDGMENT XXXVII of the Code of Civil Procedure.
2.03. That after services of Summons, the defendants filed appearance at belated stage along with application for condonation of delay. The said application came to be allowed subject to cost. That thereafter, the plaintiff filed an application vide Ex.9 for issuance of Summons for Judgement. In pursuance of the application for Summons for Judgement, the defendants filed an application dated 2/11/2015 for leave to defend the suit. That the plaintiff filed reply to the application for leave to defend in the form of Affidavit vide Ex.14. That in the meantime, on establishment of the Commercial Court at Vadodara, the suit came to be transferred to the Commercial Court, Vadodara having jurisdiction.
2.03.1. It was submitted on behalf of the defendants that the defendants never placed orders as alleged in the plaint and that there is no business transaction between the plaintiff and the defendants and therefore, the suit is not maintainable. It was submitted on behalf of the defendants that even the plaintiff has concealed true facts from the Court. It was further submitted that even the plaintiff has concealed material facts from the Court. It was submitted that the plaintiff has concealed agreement executed between the plaintiff and the defendants. It was also further submitted that the plaintiff has also suppressed the factum of filing of two criminal complaints under section 138 of the Negotiable Instruments Act against the defendants. Therefore, it was alleged that the plaintiff is guilty of suppression of material facts and therefore, the suit is liable to be dismissed. It was further submitted on behalf of the defendants that in the suit the plaintiff has claimed interest at Page 5 of 20 HC-NIC Page 5 of 20 Created On Tue Aug 15 10:23:03 IST 2017 C/SCA/6351/2017 JUDGMENT the rate of 15%, however, there is no agreement between the parties to pay the interest and therefore, defendants are entitled to unconditional leave to defend. It was further submitted that the suit is time barred. It was submitted on behalf of the defendants that the alleged cheques were issued on 17/7/2012, however, the plaintiff has filed the suit in the year 2015 i.e. after 3 years and therefore, the suit is time- barred. It was further submitted that the alleged cheques were issued as security and therefore, the suit under Order XXXVII is not maintainable. It was submitted on behalf of the defendants that as per the agreement executed between the parties, there is an arbitration clause and therefore, the suit is not maintainable.
2.04. On the other-hand, it was submitted on behalf of the plaintiff that the defendants have placed several orders and the plaintiff has supplied "Aniline Oil" to the defendants. It was submitted that the defendants have duly acknowledged the goods on the Delivery Challan and also issued cheques. It was submitted that therefore, the submission on behalf of the defendants that the defendants have no business relation with the plaintiff and the defendants have never placed orders to the plaintiff, is not sustainable. It was further submitted on behalf of the plaintiff that the plaintiff has not suppressed any material facts from the Court. It was submitted that the complaint under section 138 of the Negotiable Instruments Act was filed subsequently and therefore, the plaintiff had no occasion to disclose the same. It was submitted that therefore, the plaintiff has duly disclosed the said fact in the application for Summons for Judgement. It was further submitted that even the plaintiff has also placed original Agreement executed Page 6 of 20 HC-NIC Page 6 of 20 Created On Tue Aug 15 10:23:03 IST 2017 C/SCA/6351/2017 JUDGMENT between the plaintiff and the defendants and therefore, it was denied that there was any suppression of material fact on the part of the plaintiff. It was further submitted on behalf of the plaintiff that the plaintiff has claimed 15% interest on the basis of agreement executed between the plaintiff, defendant and GNFC and the plaintiff has claimed interest in accordance with the terms of the agreement. It was further denied that the suit of the plaintiff is barred. It was submitted that the defendants issued cheques on 2/4/2014 and also admitted their liability in the letter dated 2/5/2014 and therefore, the suit has been instituted on 4/9/2015 and thus, the suit has been filed within the period of limitation. It was further submitted on behalf of the plaintiff that after the receiving the summons, the defendants have not filed any application under section 8 of the Arbitration Act and therefore, by virtue of his conduct, he has waived his plea to refer the dispute to arbitration and therefore, the suit is maintainable.
2.05. Now, so far as the submission on behalf of the defendants that the cheques were given by way of security is concerned, it was submitted on behalf of the plaintiff that the defendants have not disputed supply of materials, quality and quantity of the goods and the supply has been duly admitted and amount has also been admitted and therefore, the defendants issued cheques against their dues. It was further submitted that the defendants had admitted their liability in the letter dated 2/5/2014 and therefore, the plea raised by the defendants is moonshine story and the plaintiff is entitled to the decree as prayed for.
2.06. That after hearing the learned advocates
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appearing on behalf of the respective parties and considering the rival contentions of the learned advocates appearing on behalf of the respective parties, by the impugned order the learned Commercial Court has allowed the application of the original defendants for leave to defend subject to deposit of 50% of the suit amount within 30 days with the Nazir of the Court. The learned Commercial Court passed an order that after depositing the said amount within the stipulated period, the defendants are permitted to file Written Statement on record.
2.07. Feeling aggrieved and dissatisfied with the impugned order dated 6/2/2017 passed by the learned Commercial Court, Vadodara passed below Ex.14 (application for leave to defend), in Commercial Suit No.182 of 2016, original defendants have preferred the present Special Civil Application.
3.00. Mr.Salil Thakore, learned advocate has appeared on behalf of the petitioners and Mr. Deven Parikh, learned Senior Advocate has appeared on behalf of the respondent - original plaintiff.
3.01. Mr.Salil Thakore, learned advocate appearing on behalf of the petitioners has vehemently submitted that in the facts and circumstances of the case, the learned Commercial Courts has materially erred in not granting unconditional leave to defend the suit to the petitioners.
3.02. Mr.Salil Thakore, learned advocate appearing on
behalf of the petitioners has further submitted that the
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impugned order passed by the learned Commercial Court is contrary to Order XXXVII of the Code of Civil Procedure.
3.03. Mr.Salil Thakore, learned advocate appearing on behalf of the petitioners has further submitted that the learned Commercial Court ought to have granted the petitioners' unconditional leave to defend the suit in view of the fact that the suit though styled as a summary suit claims reliefs which do not fall within the ambit of Order XXXVII of the Code of Civil Procedure and is, therefore not a summary suit and consequently, the defendants have a right to defend the suit.
3.04. Mr.Salil Thakore, learned advocate appearing on behalf of the petitioners has further submitted that there is between the parties absolutely no contract for payment of interest much less a written contract for payment of interest. It is submitted that consequently, the respondent's claims for payment of interest are not based on any contract much less on any written contract. It is submitted that in the suit, the plaintiff has claimed interest which shall fall beyond the ambit of Order XXXVII of the Code of Civil Procedure.
3.05. Mr.Salil Thakore, learned advocate appearing on behalf of the petitioners has further submitted that the learned Judge has failed to appreciate that the plaintiff's claim for interest were not made under agreement dated 17/7/2012 and that the clauses of the said agreement do not govern the payment terms between the plaintiff and the defendant No.1 or contemplate or provide for payment of interest by defendant No.1 to the plaintiff much less at any specified rate Page 9 of 20 HC-NIC Page 9 of 20 Created On Tue Aug 15 10:23:03 IST 2017 C/SCA/6351/2017 JUDGMENT and that in any event the same had expired and could not have governed the proceedings or any claims made thereunder.
3.06. Mr.Salil Thakore, learned advocate appearing on behalf of the petitioners has further submitted that as such the plaintiff has specifically admitted that its claim is not based upon the agreement dated 17/7/2012. It is submitted that, therefore, the learned Judge has failed to appreciate that the plaintiff itself was not claiming interest on the basis of the agreement dated 17/7/2012 and had never invoked any clause thereof or made claims thereunder.
3.07. Mr.Salil Thakore, learned advocate appearing on behalf of the petitioners has further submitted that the learned judge has erred in holding that under the agreement dated 17/7/2012 the plaintiff shall be entitled to 18% interest per annum. It is submitted that, therefore, the interest claimed by the plaintiff and that too at what rate would certainly be triable issue. It is submitted that therefore, the reliefs sought in the plaint would be outside the purview of Order XXXVII of the Code of Civil Procedure and therefore, the learned judge ought to have granted unconditional leave to the defendants to defend the suit.
3.08. Mr.Salil Thakore, learned advocate appearing on behalf of the petitioners has further submitted that in the plaint it is not specifically averred by the plaintiff that no relief which does not fall within the ambit of Order XXXVII Rule 2 of the Code of Civil Procedure is being claimed in the plaint. It is submitted that in absence of such averments the plaintiff is not Page 10 of 20 HC-NIC Page 10 of 20 Created On Tue Aug 15 10:23:03 IST 2017 C/SCA/6351/2017 JUDGMENT entitled to institute Summary Suit under Order XXXVII to the Code of Civil Procedure. It is submitted that therefore, the learned Judge ought to have granted unconditional leave to defend the suit to the defendants.
Making above submissions and relying upon the following decisions, it is requested to allow the present petition and quash and set aside the impugned order passed by the learned Commercial Court and consequently grant unconditional leave to defend the suit to the defendants :-
(1).1982 GLH (U.J.) 7 (The National Textile Corporation, Ahmedabad Versus Shri Rajendra Sankalchand Parikh - Civil Revision Application No. 511 of 1981);
(2).2001(0) GLHEL-HC 214015 (Zonal Manager Versus Akhilbhai B. Mehta - Civil Revision Application No.160 of 2000); (3).2014(0) AIJEL-HC Chlochem Limited Versus Lifeline Industries Limited - Special Civil Application No. 13041 of 2012) and (4).2009(1) GLH 590 (Satellite Television Asian Region Limited and another Versus Kunvar Ajay Foods Pvt. Ltd. - Special Civil Application No. 11469 & allied petitions)
4.00. Present petition is opposed by Mr.Deven Parikh, learned Senior Advocate appearing on behalf of the respondent - original plaintiff.
4.01. Mr.Deven Parikh, learned Senior Advocate appearing on behalf of the original plaintiff has submitted that in the facts and circumstances of the case the learned judge has not committed any error in granting conditional leave to defend the suit to the defendants i.e. on deposit of 50% of the suit amount.
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4.02. Mr.Deven Parikh, learned Senior Advocate
appearing on behalf of the original plaintiff has further submitted that as such the defendants have purchased the goods from the plaintiff and that they have consumed the goods supplied by the plaintiff but did not make the payment. It is submitted that therefore for recovery of the amount for the goods supplied, which is not disputed by the defendants, it is immaterial whether there is any written contract / agreement or not. It is submitted that the contract may be oral. It is submitted that once the goods supplied by the plaintiff being accepted and even subsequently the defendants also issued cheques which came to be dishonoured, in the facts and circumstances of the case, the learned Judge has not committed any error in granting conditional leave to defend the suit to the defendants.
4.03. Mr.Deven Parikh, learned Senior Advocate appearing on behalf of the original plaintiff has further submitted that as such the suit instituted by the plaintiff is based on Invoices issued and thereafter Challans and Debit Notes issued. It is submitted that the Debit Notes are consisting of interest on delayed payment also. It is submitted that therefore, when the suit is based on Bill of Exchange which contains interest on delayed payment, the learned Judge has not committed any error in granting conditional leave to defend the suit.
4.04. Mr.Deven Parikh, learned Senior Advocate appearing on behalf of the original plaintiff has further submitted that in the tri-parte agreement dated 17/7/2012 , Page 12 of 20 HC-NIC Page 12 of 20 Created On Tue Aug 15 10:23:03 IST 2017 C/SCA/6351/2017 JUDGMENT there is provision for interest on delayed payment. It is submitted that therefore the plaintiff is entitled to interest at the rate of 18% per annum on the delayed payment on Invoice Bill and therefore, the plaintiff has rightly claimed interest in the summary suit. It is submitted that therefore when there is no plausible defence to defend the suit, more particularly when the defendants issued cheques total amounting to Rs.1.50 Crores which came to be dishonoured, the learned Judge has rightly granted conditional leave to defend the suit to the defendants.
Making above submissions it is requested to dismiss the present petition.
5.00. Heard the learned counsel appearing on behalf of the respective parties at length.
5.01. At the outset, it is required to be noted that the respondent - original plaintiff has instituted Summary Suit against the petitioners - original defendants for recovery of Rs.2,49,59,728/- which is including Rs.32,55,616/- towards interest at the rate of 15% per annum from 1/4/2014. The cause of action pleaded in the suit is as under :-
"(7). Cause of Action : Cause of action arose when the defendants placed orders for "Aniline Oil" on different date i.e. date 20/8/2013 etc. and the respective invoices / challans were raised and it also arose when defendants accepted the said material / "Aniline Oil"
without any dispute as to the quality / quantity / "Aniline Oil" and price of the said material and it also arose when defendants have signed the delivery Page 13 of 20 HC-NIC Page 13 of 20 Created On Tue Aug 15 10:23:03 IST 2017 C/SCA/6351/2017 JUDGMENT challan for the supplied of the said material. It also arose when defendants have made payment on account of Rs.1,12,05,469 by various cheques on dt. 02-04-2014 for the supplied of the said material and it further arose when plaintiff has sent demand notices by R.P.A.D. on dtd.19-04-2014 to the defendants Nos.1 to 4 and after duly service of the said notice, no single rupee is paid up to today by the defendants."
5.02. It an admitted position that as such there is no written contract between the parties more particularly with respect to interest on delayed payment on invoice bills. Though the plaintiff and even the learned Judge have considered the tri-parte agreement dated 17/7/2012 as contract between the parties, and more particularly with respect to interest on delayed payment, however it is required to be noted that as such the plaintiff has not claimed any relief on the basis of the tri-parte agreement dated 17/7/2012. On the contrary in para 8 of the Affidavit-in-reply of the application to leave to defend submitted by the defendants, the plaintiff has specifically stated that the said agreement is not binding and applicable here in this matter. It is further stated that the said agreement is tri-parte agreement and restricted only to supply of material / substance to the required persons / defendants as well as defendants and GNFC but not terms and conditions of the payment. It is further states that the said agreement was effective and continued only upto 13/4/2013. It is further averred that the defendant cannot raise plea of terms and conditions of the agreement executed on 17/7/2012 between the plaintiff, defendants and GNFC. It is further averred in para 12 of the reply that the plaintiff has claimed 15% interest per annum which is just and correct as per the Page 14 of 20 HC-NIC Page 14 of 20 Created On Tue Aug 15 10:23:03 IST 2017 C/SCA/6351/2017 JUDGMENT commercial transaction between the plaintiff and the defendants. Therefore, the plaintiff has claimed interest not based on the tri-parte agreement dated 17/7/2012, but as per the commercial transaction. In para 15 also the same is reiterated and again it is reiterated that the plaintiff is not claiming any benefit of the said agreement. Considering the facts and circumstances of the case, the learned Judge has materially erred in observing that the plaintiff is entitled to the interest on the delayed payment as per tri-parte agreement dated 17/7/2012. Thus, as such, there is no written contract between the parties with respect to interest on delayed payment. The Debit Notes issued by the plaintiff and/or Invoices issued subsequently after the goods came to be supplied and/or anything mentioned in the Delivery Note whether can be said to be contract between the parties more particularly with respect to interest on delayed payment can be said to be triable issue. At what rate the plaintiff is entitled to interest on delayed payment also can be said to be a triable issue. In light of the aforesaid facts and circumstances of the case, the following few decisions of this Court are required to be referred to :
5.03. In the case of The National Textile Corporation, Ahmedabad (supra), the plaintiff filed the suit to recovery a particular amount comprising price of goods sold and delivered as well as interest. The plaintiff claimed interest relying on custom of the Trade to charge interest and the learned trial court granted conditional leave, which came to be set aside by the learned Single Judge of this Court, after following decision of the Bombay High Court in the case of Keshavjee Versus The Indian Mercantile Insurance Co.Page 15 of 20
HC-NIC Page 15 of 20 Created On Tue Aug 15 10:23:03 IST 2017 C/SCA/6351/2017 JUDGMENT Ltd. in Civil Revision Application No. 259 of 1956 decided on 5/11/1954, by observing that in order to succeed in getting the amount of interest, the plaintiff will have to prove his case by evidence and this cannot be permitted in summary suit.
5.04. In the case of Chlochem Limited (supra) while confirming the order passed by the learned trial court granting unconditional leave, in para 20 to 23, the learned Single Judge has observed and held as under :-
"20. If the prayer made in the plaint of the suit filed by the petitioner is perused, it is clear that the petitioner is claiming interest along with the amount due and further interest at the rate of 6% per annum over the total amount of Rs.75,73,512/-, which includes the principal claim, plus the interest.
21. In Zonal Manager v. Akhilbhai B.Mehta (supra), this Court has held as below:
"7. Having heard both the learned advocates and having gone through the facts of the case and record it will have to be decided whether the present dispute as has been raised by the plaintiff is falling within the ambit of Order-37 Rule-1 of the Civil Procedure Code. It was urged that the suit is filed for liquidated amount of 24 days Earned Leave and therefore it falls within the ambit of Order-37. Perusing Order-37 Rule-1 Sub sec.(2) it is clear that the dispute falls in none of the sub-clause of Sub-rule(2) of Rule-1 of Order-37. It is not the suit for recovery of liquidated Page 16 of 20 HC-NIC Page 16 of 20 Created On Tue Aug 15 10:23:03 IST 2017 C/SCA/6351/2017 JUDGMENT amount but the amount of interest at the rate of 24% has also been sought to be recovered by the plaintiff respondent. The case is clearly covered by the unreported decision of this Court as reported in the matter of National Textile Corporation Ahmedabad vs. Shri Rajendra Sankalchand and Parikh, as reported in 1982 GLH (UJ)7 wherein the Court in unequivocal terms ruled that in order to succeed in getting the amount of interest the opponent-plaintiff will have to prove his case by evidence and this cannot be permitted in a Summary Suit and, therefore, in view of the claim of interest amount made by the plaintiff in the suit the suit cannot be said to be Summary Suit and consequently not triable as Summary Suit. Claiming of the amount in the present case at the rate of 24% takes out the dispute of the scope of Summary Suit and therefore the learned Judge committed a jurisdictional error to grant conditional leave. Not only that, neither the dispute can be termed as liquidated demand as envisaged by the Order-37 Rule 1(2) but the claim of interest is also a triable issue and takes the suit out of the ambit of the Summary Suit. On this ground alone this Revision Application is required to be allowed, irrespective of the fact that even if it is Summary Suit there were triable issues.
8. In this view of the matter, since the Page 17 of 20 HC-NIC Page 17 of 20 Created On Tue Aug 15 10:23:03 IST 2017 C/SCA/6351/2017 JUDGMENT suit filed by the plaintiff is not falling within ambit of Summary Suit the order passed by the learned trial Judge to defend the suit on condition is without jurisdiction and erroneous and is required to be set aside. In this view of the matter, this Revision Application is allowed. The order impugned passed by the City Civil Court for issuing summons for judgment which is dated 17.12.1991 is set aside and consequently the order impugned which is dated 12.1.2000 granting conditional leave to defend is also set aside. Rule is made absolute. No order as to costs.
22. The principles of law enunciated in the above- quoted judgment would squarely apply to the facts of the present case. Learned advocate for the petitioner has not chosen to distinguish this judgment or to make any submissions regarding the aspect regarding charging of interest. There is no denying the fact that not only has the petitioner claimed interest in the suit but the statement of account prepared by the petitioner, a copy of which is annexed to the petition, also clearly shows that interest claimed for late payment of interest has been debited to the account of the respondent and interest of Rs.7,07,904/- has been added to the principal claim of Rs.68,65,618/-. There is no material on record to show that there is an agreement between the parties regarding the claim of interest. Moreover, the claim for interest cannot be said to be a liquidated demand."Page 18 of 20
HC-NIC Page 18 of 20 Created On Tue Aug 15 10:23:03 IST 2017 C/SCA/6351/2017 JUDGMENT 5.05. In the case of Akhilbhai B. Mehta (supra), in summary suit where the plaintiff claimed interest in absence of any contract between the parties with respect to interest, the learned Single Judge has observed and held that the interest on claim is triable issue and therefore, the defendant is entitled to unconditional leave.
5.06. At this stage it is required to be noted that even in the plaint the plaintiff has not averred that no relief which does not fall within the ambit of Order XXXVII Rule 1 or 2 is being claimed in the plaint. Rule 2 of Order XXXVII provides that if the plaintiff who desires to institute the summary suit under Order XXXVII of the Code of Civil Procedure, is required to institute the suit by presenting a plaint which shall contain (a) special specific averments to the effect that the suit is filed under the said Order and; (b) that no relief which does not fall within the ambit of the said rule is being claimed in the plaint.
Identical question came to be considered by the learned Single Judge in the case of Satellite Television Asian Region Limited and another (supra) wherein, no such averments were made in the plaint, it was held that the defendant is entitled to unconditional leave to defend.
5.07. Considering the facts and circumstances of the case more particularly when there does not appear to be any contract / agreement between the parties with respect to interest on delayed payment and as observed hereinabove even when the plaintiff does not claim any relief more particularly interest based upon the tri-parte agreement dated 17/7/2012, and as such the plaintiff is not at all relying upon Page 19 of 20 HC-NIC Page 19 of 20 Created On Tue Aug 15 10:23:03 IST 2017 C/SCA/6351/2017 JUDGMENT and/or has not made its claim pursuant to the agreement dated 17/7/2012 and claim of interest being triable issue, the learned Judge ought to have granted unconditional leave to defend the suit to the defendants. The learned Judge has materially erred in granting conditional leave to defend the suit to the defendants on deposit of 50% of the suit claim.
6.00. In view of the above and for the reasons stated above present petition succeeds. The impugned order passed by the learned Judge, Commercial court, Vadodara passed below Leave to Defend Application in Commercial Civil Suit No.182 of 2016 is hereby quashed and set aside and the petitioners herein - original defendants are granted unconditional leave to defend the suit. Rule is made absolute to the aforesaid extent. In the facts and circumstances of the case, there shall be no order as to costs.
Sd/-
(M.R. SHAH, J.) Sd/-
(B.N. KARIA, J.) Rafik..
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