Bombay High Court
Forward Financial Services Ltd vs Primus Chemicals Ltd. ...Defenda Nt S on 15 October, 2008
Author: Roshan Dalvi
Bench: Roshan Dalvi
1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NOTICE OF MOTION NO.273 4 OF 200 8
IN
SUIT NO.10 0 OF 199 9
Forward Financial Services Ltd. ...Plaintiffs
Vs.
Primus Chemicals Ltd. ...Defenda nt s
Mr.S.K.Jain for the Plaintiffs
Mr.Kunal Chima with Mr. Manoj Kadam for Defenda nt s
CORAM: SMT. ROSHAN DALVI, J.
DATED : 15 TH OCTOBER, 200 8
ORAL ORDER:
1. Unconditional leave was granted to the Defenda nt s in the Sum mo n s for Judgment taken out in this suit on 28 th August, 2000. The Defenda nt s were directed to file their written statement within 12 weeks of that date. Parties were directed to file their affidavits of docume nt s within 8 weeks thereafter and complete the discovery and inspection within 8 weeks thereafter. Suit was transferred to the list of Commercial Causes. The Defenda nt s were to file their written statement by 27 th December, 2000. The Defendant s failed to file their written stateme nt. The further directions were not complied. The suit could not appear on the list of Commercial Causes. The order on the Sum mo ns for ::: Downloaded on - 09/06/2013 13:58:38 ::: 2 Judgmen t remained at that. Due to such non- compliance, decree under Order XXXVII Sub Rule 3(6)(b) was required to be passed. Since the directions given at the hearing of the Sum mo ns for Judgme nt were not complied and the Plaintiff became entitled to judgment forthwith.
2. Some how no judgment came to be passed for many years.
3. On 27 th Ju ne, 2007 the Defendan t sought to file the written statement. It remained under objection inter alia because leave of the Court was not obtained for condonation of the delay in filing the written stateme nt.
4. The parties sought to settle the dispute by filing certain consent terms in April, 2008. The decree to be passed in terms of Consent Terms was depende nt upon certain private criminal complaint s lodged by the Defenda nt s against the Plaintiff in 1999 in which process came to be issued only in August, 2007. Hence, after executing the Consent Terms and tendering them to Court, the parties made a request for deferring of the order in terms of the Consent Terms. Conseque n tly on 24 th April, 2008 though the Consent Terms were placed on record and filed, the suit came to be adjourned beyond vacation for passing of the decree in terms ::: Downloaded on - 09/06/2013 13:58:38 ::: 3 thereof. The parties did not purs u e the Consent Terms. No decree was passed in terms thereof. The written statemen t remained to be filed. The Defenda n t s did not obtain leave of the Court to file the written stateme nt. The suit appeared on board as an undefended suit. On 19 th Ju ne, 2008 the Court recorded that the minutes of the Consent Terms were placed on record, but in view of the lack of settlement between the parties the Consent Terms came to be rejected. Suit was directed to be proceeded. Court recorded that unconditional leave was passed with directions to file written stateme nt within 12 weeks, but was not followed until 27 th Ju ne, 2005 and which until then was still under objection. Even the copy of the written stateme nt was not served upon the Plaintiff. The Court directed the Defendan t to serve the copy of the written statement within one week and adjour ned the suit. On 20 th Ju ne, 2006 the written statement yet remained under objection. Even on that date an application was not moved for condonation of delay. The copy was also not served. Hence, the Court observed that the Plaintiff was entitled to a judgment under Order XXX VII Sub Rule 3(6)(b) of the C.P.C and stood over the suit for judgment in the next week.
5. On 3 rd July, 2008 the Defendan t remained absent. The Defenda nt was not represented by any Advocate. The Court ::: Downloaded on - 09/06/2013 13:58:38 ::: 4 recorded non- compliance of the directions passed under the Sum mo ns for Judgme n t. The Court again recorded the fact of the written statement having been filed as late as on 27 th Ju ne, 2005, which was still under objection without seeking permission of the Court. The Court also recorded that no application was moved even on that day for such permission.
The Court perused the facts of the case and held that the Plaintiff was entitled for the judgment under the provisions of Order XXXVII Sub Rule 3(6)(b) of the C.P.C. The Court passed the decree accordingly.
ig The decree / j u dg me n t Is
indeed passed under Order XXXVII Sub Rule 3(6)(b). The
defenda nt has applied for setting aside the decree under Order XXXVII Rule 4 of the C.P.C. The Defendan t has to show special circum st a n ces for having it set aside.
Order XXXVII Sub Rule 4 runs thus :-
4. Power to set aside decree :- After decree the Court may, under special circu m s ta n c e s , set aside the decree, and if neces s ary stay or set aside the execu ti o n , and may give leave to the defendan t to appear to the sum m o n s and to defend the suit , if it see m s reasonable to the Court so to do, and on such terms as the Court think s fit.::: Downloaded on - 09/06/2013 13:58:38 ::: 5
6. Conseque ntly it is seen that to set aside the decree and if necessary to stay or set aside execution the Court would have to give leave to the Defenda n t to appear in the Sum mo ns for Judgme n t and to defend the suit if it is reasona ble to do so. In this case the Summo n s for Judgmen t has been disposed off on merits. The Court has already granted leave to the Defendan t to defend the Suit. The leave has been granted about 8 years before. The Defenda nt was directed to file his written stateme n t since December, 2000. There is no question now to grant the Defenda nt leave to appear in the Summon s for Judgme nt and defend the Suit. All that the Defendan t was required to do was to apply for condon ation of delay and to file the written stateme nt which has not been done.
7. It is seen that the Defenda nt has been served. It has appeared. It has shown its defence in the Sum mon s for Judgmen t. It has not carried out the directions to file written stateme nt. The suit, to that extent, has been un- defended. A judgment has been passed not under Order XXXVII Rule 3(6)(a), but under Order XXXVII Sub Rule 3(6)
(b). Under Sub Rule 6(a) the Plaintiff would be entitled to judgment if the Defenda nt had not applied for leave to defend or if leave to defend was refused. But under Rule 6(b) the Plaintiff would be entitled to judgment only if the ::: Downloaded on - 09/06/2013 13:58:38 ::: 6 Defenda nt failed to give security or carry out the directions passed at the time of the hearing of the Sum mon s for Judgmen t. There is an essential distinction in the 2 procedures. The judgment under Sub Rule 6(a) (supra) would be passed for non- appeara nce of the Defenda nt. It would be analogous to an Ex- parte decree passed under Order IX Rule 6(a) of the C.P.C., which would apply to a Regular Suit. The judgment passed under Sub Rule 6(b) (supra) would be analogous to a judgment passed under Order VIII Rule 10 of the C.P.C., which would apply to a regular Suit.
8. The provisions of Order XXXVII Rule 4 to set aside the decree essentially show the decree passed without considering the Defenda nt's case in the Summon s for Judgmen t. Hence, upon showing special circum st a n ces the Defenda nt could have the decree stayed and be granted leave to defend the Suit. The fact that the Rule 4 requires the Court to pass an order to grant leave to appear in the Sum mo ns for Judgme n t and defend the suit essentially considers that the Defenda nt has until then not appeared in the Sum mon s for Judgment and not had the opport u nity to defend the Suit. In this case the Defenda nt has been given leave to defend the suit already. An order passed under Order XXXVII Sub Rule 4 would, therefore, be innocuou s ::: Downloaded on - 09/06/2013 13:58:38 ::: 7 since the Defendan t has already been granted leave. The Defenda nt cannot be again granted leave to defend. The Defenda nt had to avail of the leave granted to him 8 years ago. He has failed to avail of that leave. His application under Order XXXVII Sub Rule 4 is, therefore, wholly misconceived. Since the Defendant was granted leave to defend, but failed to defend by not following the directions of the Court in filing the written stateme nt within the time granted to the Defenda nt and also not applying for condonation of delay ig for filing the written stateme nt Defenda nt has to face the judgment that has been passed against him. The Defenda nt's position is much the same as of a Defenda nt in a Regular Suit, who though having appeared in the suit and having been represented in the suit has failed to present the written statemen t, called for by the Court constraining the Court to pronou nce judgment against him.
9. Once the judgment is pronou nced the jurisdiction of the Court comes to an end. Hence, as in the case of a judgment being pronou nced under Order VIII Rule 10 of the C.P.C once judgment is pronou nced under Order XXXVII Sub Rule 3(6)(b) of the C.P.C., also an appeal would allow therefrom. This Court would not have the jurisdiction to set aside its own decree and to grant the Defenda nt any further leave.
::: Downloaded on - 09/06/2013 13:58:38 ::: 810. Be that as it may, the Defenda nt has sought to argue the case on merits to show "special circum st a n ces" to set aside the decree / j u dg me n t dated 3 rd July, 2008. Paragrap h No.3 of the affidavit in reply shows that the Defenda nt's written stateme nt was ready, but was not filed on accou nt of two reasons :-
(i) Heavy and grave losses incurred by the
Defenda nt s in their busines s,
(ii) Non- availability
ig of Defendant's Director
due to their over involvement in survival of the project.
11. It has to be seen whether these two reasons of losses and non- availability of Directors would be special circumst a n ce s shown as required under Order XXXVII Rule 4 of the C.P.C. The Defendan t has successfully defended the Sum mo ns for Judgmen t and obtained unconditional leave to defend. The Defendant s had only failed to file their written stateme nt. The failure has been for 8 years in place of the 12 weeks granted to the Defenda nt.
12. The Defenda nt's Advocate argued that the written stateme nt was ready and filed on 27 th Ju ne, 2005 and then remained under objection. He argued that that was because ::: Downloaded on - 09/06/2013 13:58:38 ::: 9 the resolution of the board was not filed and not because directions of the Court were not followed. It is seen that it remained under objection because a permission of the Court itself was not obtained. Even if the period only prior to 27 th Ju ne, 2005 has to be considered the losses of the Defenda nt and the non- applicability of its Directors would not be any special circum st a n ce s because the Defenda nt s defended the Sum mo ns for Judgme n t on merits despite both of these factors. Hence, no special circumst a nce s are also shown. In fact no reason for condonation of delay in filing the written stateme nt is shown to have been made out.
13. It is now too late in the day to even consider and condone such gross delay. Despite the specific observation of the Court on 19 th Ju ne, 2008 and 26 th Ju ne, 2008 no application for condonation of delay was moved.
14. It may be mentioned that the Defenda nt had sought to take out a Notice of Motion on the eve of the judgment day. Though the notice of motion shows that it was typed in Ju ne, 2008 and is sought to be moved on 29 th August, 2008, the affidavit in support of the Notice of Motion was affirmed on 2 nd July, 2008. The Notice of Motion was filed on 23 rd July, 2008, well after the judgment came to be passed in the suit disposing off the suit itself.
::: Downloaded on - 09/06/2013 13:58:38 ::: 1015. The Defenda nt has sought to contend that though the Advocate was absent the represent a tive of the Defenda nt was present on 3 rd July, 2008 but his application was not considered and the judgment was passed. It may be mentioned that the Court itself observed twice about the fact of the lack of application for condonation of delay in filing the written stateme nt. The Court adjourned the suit twice after making those observations. No application came to be made even on the judgment day.
ig The judgment dated 3rd July, 2008 itself mentions that the written stateme nt was still under objection. Permission of the Court was not sought and the Defendan t did not make any application in that behalf. The Defendant's affidavit to the contrary is not only contempt uo u s but perjurial. It is best ignored.
16. The Advocate for the Plaintiff has nevertheless taken me through the affidavit. The reasons for condonation of delay in filing the written statemen t shown in paragrap h 3 of that affidavit and the special circum st a nces shown in paragrap 3 of that affidavit in this Notice of Motion are losses and non availability of Directors. However, the reason for non- availability of the Directors in the previous affidavit is that they had been abroad "for the purpose of taking jobs". The reason for non- availability of the Defenda nt's Directors in the ::: Downloaded on - 09/06/2013 13:58:38 ::: 11 affidavit in this Notice of Motion is their "over involvement in the survival of the project". The project is in India. Hence it would imply that they remained in India and did not go abroad. It will also imply that they were busy with their own business project and hence did not take up jobs. Both the stateme nt s showing the reason for not filing the written stateme nt as also for not appearing in Court are diametrically different.
17. The Defenda nt ighas relied upon the Supreme Court judgment in the case of Ajay Bansal Vs. Anup Mehta 200 7 2 SCC 27 5 to show that an application for setting aside the order passed under Order XXXVII Rule 3 of the C.P.C can lie under Order XXXVII Rule 4 thereof as an alternative to an appeal or any other permissible mode. The forum may be in the Court passing the order albeit taking into account the fact that it was passed as a final judgment or initially on the Sum mo ns for Judgmen t and also upon considering the special circum st a nces on the facts of each case independen tly.
18. The Defenda nt has also relied upon the judgment in the case of P.N. Films Vs. Overseas Films 59 B.L.R . 406 regarding the bar of limitation which has no application in this case.
::: Downloaded on - 09/06/2013 13:58:38 ::: 1219. No special circumst a nce s are shown by the Defenda nt to set aside the judgment passed in the Suit.
20. Conseque ntly the Notice of Motion is dismissed.
(SMT. ROSHAN DALVI,J.) ::: Downloaded on - 09/06/2013 13:58:38 :::