Supreme Court - Daily Orders
Sujata Shetty vs Pushpendra R. Bansal on 6 August, 2019
Bench: R. Banumathi, A.S. Bopanna
1
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.6120 OF 2019
(@ SPECIAL LEAVE PETITION (CIVIL) NO.9922 OF 2019)
SUJATA SHETTY & ORS. ...APPELLANT(S)
VERSUS
PUSHPENDRA R. BANSAL ...RESPONDENT(S)
O R D E R
R. BANUMATHI, J.:
Leave granted.
2. This appeal arises out of the order dated 22.02.2019 passed by the High Court of Judicature at Bombay in Writ Petition No. 12646 of 2016 in and by which the High Court has affirmed the order of the Trial Court granting conditional leave to the appellants to defend the Summary Suit on condition that the appellants-defendant are to deposit the amount of Rs.24,85,000/-(Rupees twenty four lakhs eighty five thousand).
3. The brief facts which led to the filing of the appeal are as under:
The respondent-plaintiff offered to purchase the catering business of the appellants and the appellants business was sold to the respondent for a consideration of Rs. 45,00,000/- (Rupees forty Signature Not Verified five lakhs) and with an employment to appellant no. 2 with a salary Digitally signed by MADHU BALA Date: 2019.08.10 12:41:10 IST Reason: of Rs.1,10,000/- (Rupees one lakh ten thousand) per month. The parties have entered into an agreement on 29th November, 2008. The 2 respondent is said to have paid Rs.24,85,000/- (Rupees twenty four lakhs eighty five thousand) to the appellants in cash. For the balance amount of Rs. 20,00,000/- (Rupees twenty lakhs), the respondent-plaintiff issued three post-dated cheques in favour of the appellants. The appellants are also said to have executed Promissory Note on 27.03.2009 in favour of the respondent; the appellants are, however, disputing the execution of the promissory note and contends that the said promissory note is forged one. Based upon clause 9 of the agreement, the respondent has filed the suit for recovery of Rs.24,51,703/- alleging that the business is not performing well and, therefore, the appellants will have to refund the investment or payment made by the respondent-plaintiff.
4. The Trial Court vide its order dated 31.03.2015 granted conditional leave to the appellants directing them to deposit Rs.24,85,000/-. in the Court in order to defend the suit. The Trial Court has observed that if leave to defend is not granted, it would cause prejudice to the appellants. Being aggrieved, the appellants have filed writ petition before the High Court challenging the condition to deposit Rs.24,85,000/- which came to be dismissed vide the impugned order.
5. We have heard learned counsel appearing on behalf of the appellants as well as learned counsel appearing on behalf of the respondent.
6. Learned counsel appearing on behalf of the appellants submitted that the summary suit is based upon clause 9 of the Agreement dated 29.11.2008 and for invoking clause 9, the respondent-plaintiff has prima facie to show that the business was 3 not performing well and without establishing the same, the respondent cannot succeed in the suit. Placing reliance in the case of IDBI Trusteeship Services Limited vs. Hubtown Limited reported in 2017 (1) SCC 568, learned counsel submitted that the appellants have raised triable issues and while so the appellants can not be deprived of opportunity to defend the suit by imposing upon them condition to pay the huge amount of Rs.24,85,000/-.
7. Per contra, learned counsel appearing on behalf of the respondent has drawn our attention to the documents and submitted that the promissory note was executed by the appellants for a sum of Rs.24,85,000/-. and taking into account the Agreement between the parties, in particular, clause 9 of the agreement, the Courts rightly granted leave to defend on condition to deposit Rs.24,85,000/-.
8. As rightly submitted by the learned counsel appearing on behalf of the appellants that the summary suit is based upon clause 9 and the respondent-plaintiff has prima facie to show that the business was not performing well and the same can be established only when the parties adduced evidence. In our view, since the appellants have raised triable issues and an opportunity has to be granted to them to substantiate their defence. If the defendant satisfies the Court that he has a defence to the claim on merits the defendant is entitled to unconditional leave to defend. The appellants cannot be deprived of their defence to contest the suit by imposing stringent condition and directing them to deposit Rs.24,85,000/-. It is also pertinent to note that the appellants have also filed a case under Section 138 of the Negotiable 4 Instruments Act regarding three post-dated cheques issued by the respondent-plaintiff.
9. When the defendants raised triable issues indicating that they have fair and reasonable defence, the defendants are ordinarily entitled to unconditional leave to defend. In IDBI Trusteeship this Court summarised the principles as to grant of leave in summary suit and held as under:
"17. Accordingly, the principles stated in para 8 of Mechelec case will now stand superseded, given the amendment of Order 37 Rule 3 and the binding decision of four Judges in Milkhiram case, as follows:
17.1 If the defendant satisfies the court that he has a substantial defence, that is, a defence that is likely to succeed, the plaintiff is not entitled to leave to sign judgment, and the defendant is entitled to unconditional leave to defend the suit.
17.2 If the defendant raises triable
issues indicating that he has a fair or
reasonable defence, although not a
positively good defence, the plaintiff is not entitled to sign judgment, and the defendant is ordinarily entitled to unconditional leave to defend.
17.3 Even if the defendant raises triable issues, if a doubt is left with the trial Judge about the defendant's good faith, or the genuineness of the triable issues, the trial Judge may impose conditions both as to time or mode of trial, as well as payment into court or furnishing security.
Care must be taken to see that the object of the provisions to assist expeditious disposal of commercial causes is not defeated. Care must also be taken to see that such triable issues are not shut out by unduly severe orders as to deposit or security.
517.4 If the defendant raises a defence which is plausible but improbable, the trial Judge may impose conditions as to time or mode of trial, as well as payment into court, or furnishing security. As such a defence does not raise triable issues, conditions as to deposit or security or both can extend to the entire principal sum together with such interest as the court feels the justice of the case requires.
17.5 If the defendant has no substantial defence and/or raises no genuine triable issues, and the court finds such defence to be frivolous or vexatious, then leave to defend the suit shall be refused, and the plaintiff is entitled to judgment forthwith.
17.6 If any part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit, (even if triable issues or a substantial defence is raised), shall not be granted unless the amount so admitted to be due is deposited by the defendant in court." (Underlining added)
10. As discussed earlier, in the present case the appellants have raised a triable issue and in our view, the appellants are entitled to unconditional leave to defend. However, considering the facts and circumstances of the present case and the business relationship between the parties, we deem it appropriate to direct the appellants to deposit Rs. 5,00,000/-.
11. The impugned order of the High Court as well as the Trial Court are modified and the appeal is partly allowed. The appellants are granted leave to defend on condition that they shall deposit a sum of Rs.5,00,000/- (Rupees five lakhs) within a period of four weeks from today before the Trial Court. When the amount of 6 Rs.5,00,000/- (Rupees five lakhs) is deposited, the same shall be invested in a fixed deposit so that the accrued interest will enure the benefit of either party. After deposit of Rs.5,00,000/-(Rupees five lakhs), the appellants shall file written statement within two weeks thereafter. The Trial Court shall proceed with the matter in accordance with law after affording sufficient opportunity to both the parties. We make it clear that we have not expressed any opinion on the merits of the matter.
.......................J.
[R. BANUMATHI]
NEW DELHI .......................J.
6TH AUGUST, 2019 [A.S. BOPANNA]
7
ITEM NO.22 COURT NO.7 SECTION IX
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (C) No(s). 9922/2019 (Arising out of impugned final judgment and order dated 22-02-2019 in WP No. 12646/2016 passed by the High Court Of Judicature At Bombay) SUJATA SHETTY & ORS. Petitioner(s) VERSUS PUSHPENDRA R. BANSAL Respondent(s) (WITH APPLN. FOR EXEMPTION FROM FILING CERTIFIED COPY OF THE IMPUGNED JUDGMENT AND FINAL ORDER) Date : 06-08-2019 This petition was called on for hearing today. CORAM :
HON'BLE MRS. JUSTICE R. BANUMATHI HON'BLE MR. JUSTICE A.S. BOPANNA For Petitioner(s) Mr. Kunal Cheema, AOR Ms. Aditi Parkhi,Adv.
For Respondent(s) Mr. Vikas Sharma,Adv.
Mr. Ashwani K.Dubey,Adv.
Mr. Sandeep K. Mishra,Adv.
UPON hearing the counsel the Court made the following O R D E R Leave granted.
The appeal is partly allowed in terms of the signed order.
Pending application(s), if any, shall also stand disposed of.
(MADHU BALA) (NISHA TRIPATHI)
COURT MASTER (SH) BRANCH OFFICER
(Signed order is placed on the file)