In a summary suit under Order CPC, the defendant has no right to defend as of course; he must first obtain leave to defend, and leave is refused only when the defence is sham, illusory, frivolous, or vexatious.student.
The defence so raised itself being the question of law, as the interpretation of documents itself goes to the root of the transactions/contract and the claim based upon it. In the present case, B.O.I. Finance Ltd. (Supra), as relied is not applicable on facts and the laws. That was a case of ready forward contract. In the case in hand, three documents and the transactions, of which two views of the learned Judges unless decided finally in due trial, it is difficult to accept the case that the view taken by the one learned Judge that transactions are sham and bogus and unseverable and other Judge hold it to be severable, without trial and by overlooking the earlier opinion, this itself is a triable issue. The Appellate Bench also may not decide such issue on such question of law, considering the scope and purpose of law on order XXXVII of the CPC, at this stage of the Summary Suit. It should be after final Judgment. In the present case, the same documents are interlinked and interconnected as observed by the earlier learned Judge, therefore, unless these findings are set aside, the findings in the impugned order that those are severable just cannot be accepted, without the trial. The case of misconstruction or interpretation of all connected documents itself made out a case of good defence. It cannot be treated as sham or bogus defence. The misinterpretation itself affects the rights and the transaction/claim. Therefore, the construction of documents is always question of law so is the position in case in hand. The distinction, therefore, at this stage, in summary proceedings like this, itself will not sufficient to deny the order of unconditional leave as granted by one Judge on the basis of same documents. (Sir Chunilal V. Mehta and sons Ltd. v. Century Spinning and Manufacturing Co. Ltd.11 and Hero Vinoth (Minor) v. Seshammal12) {Para 56}
Interpretation of documents and the nature of transactions-triable issue-
57. We have to consider the legal position in view of the contentions so raised by the learned counsel appearing for the parties. The Apex Court in Smt. Krishnabai Bhritar Ganpatrao Deshmukh v. Appasaheb Tuljaramarao Nimbalkar13, while dealing with the aspects of interpretation of any deed or documents, has held as under:-
“27. Secondly, there is ample authority for the proposition that when there is a dispute in regard to the true character of a writing, evidence de hors the document can be led to show that the writing was not the real nature of the transaction, but was only an illusory, fictitious and colourable device which cloaked something else, and that the apparent state of affairs was not the real state of affairs. [See Chandi Prasad Singh v. Piari Bidi C.A. No. 75 of 1964, decided on 16-3-1966, and Bhagwan Dayal v. Mst. Reoti Devi (supra)].
58. While dealing with the effect of various transactions, based upon the various documents, the Court required to deal with and take into consideration every connected transactions and the documents, to give total effect to the transactions by treating them all as one document. The Apex Court in (S. Chattanatha Karayalar v. The Central Bank of India Ltd.)14 has observed as under:-
3. ………. “The principle is well established that if the transaction is contained in more than one document between the same parties they must be read and interpreted together and they have the same legal effect for all purposes as if they are one document. In Manks v. Whiteley 1912-1 Ch. 735 at p. 754, Moulton, L.J. Stated:
“Where several deeds form part of one transaction and are contemporaneously executed they have the same effect for all purposes such as are relevant to this case as if they were one deed. Each is executed on the faith of all the others being executed also and is intended to speak only as part of the one transaction, and if one is seeking to make equities apply to the parties they must be equities arising out of the transaction as a whole.”
In the High Court of Bombay
(Before Anoop V. Mohta and G.S. Kulkarni, JJ.)
Hubtown Limited Vs IDBI Trusteeship Service Limited,
Commercial Appeal No. 7 of 2016
Decided on October 24, 2016
Citation: 2016 SCC OnLine Bom 9019. Read full Judgment here: Click here. |
“Summary Suit” and “Summary Judgment”-
34. The conceptual position of “summary suit” as contemplated under Order XXXVII of CPC and its specific provisions are governed as per the original provisions of CPC. The amended CPC, in view of Section 16 of the Commercial Courts Act inserted the provision for a “summary judgment”, through Order XIII-A which is made applicable to the classes of Suits (commercial suits) which required to be decided by the Commercial Division/Court. It prescribes the procedure and stages for application for summary judgment. This also includes and provides the powers of a Commercial Judge to pass conditional order including for evidence for hearing of summary judgment. We are concerned with Order XIII-A, Rule 1(3) of CPC, whereby it is specifically provided “notwithstanding anything to the contrary, “an application” for summary judgment under this Order shall not be made in a Suit in respect of any commercial disputes that is originally filed as a summary suit under Order XXXVII.”. Therefore, once the summary suit as originally filed, prior to the commencement of the and as now transferred, being commercial dispute matter, the original procedure as provided under Order XXXVII shall be applicable to such summary suits. The parties are not entitled to prayer for summary judgment under XIII-A in view of the specific provision so referred above. This also means that the judgments and the issues so decided in summary suit shall for all purposes be governed by the CPC, even after such suits are transferred as commercial suits. The Commercial Division Judge is required to follow the original C.P.C. and is required to keep in mind the position in law revolving around all the facets of summary suits. The provisions of Section 13, therefore, is required to be interpreted and/or considered accordingly, when any decision is given by the Commercial Division/Court in such summary suit.
In the High Court of Bombay
(Before Anoop V. Mohta and G.S. Kulkarni, JJ.)
Hubtown Limited Vs IDBI Trusteeship Service Limited,
Commercial Appeal No. 7 of 2016
Decided on October 24, 2016
Citation: 2016 SCC OnLine Bom 9019. |
In the wake of the above, the impugned order which take a view that the transaction of advancing the amount as a friendly loan is commercial in nature, is an erroneous finding as a solitary transaction of advancing loan, on friendly terms, unlike a commercial lending with the prevailing market rate, would fall short or ordinary transaction of a financer, banker. Moreso, even the plaintiff is conscious of this position and in her response to the Application filed for return of plaint for presentation of appropriate court, she admit so. {Para 17}
In the High Court of Bombay
(Before Bharati Dangre, J.)
Glasswood Realty Pvt. Ltd. and Others Vs Chandravilas Kailashkumar Kothari
Writ Petition No. 8393 of 2021
Decided on December 6, 2021
Citation: 2021 SCC OnLine Bom 5032 : (2022) 1 Bom CR 527.
Print PageThe plaintiff is a businessman. The 1st defendant is a partnership firm; the 2nd and 3rd defendants are its partners. And the 2nd defendant is said to be the plaintiffs friend. Therefore, acting beyond the call of his business, the plaintiff has given “a friendly loan” to the defendants. The defendants executed a promissory note and issued cheques as well. But the cheques were dishonoured. So, the plaintiff has sued the defendants for recovery.
16. It is trite to observe that, for the Court to determine the nature of the suit, what matters at this stage is the plaint allegations and nothing else. Both the learned counsel agree of section 2, what applies is clause (c) (i) of sub-section (1), the lexical provision of the Commercial Courts Act, 2015. The transaction may be ‘ordinary’ but must have occurred between “merchants, bankers, financiers and [or] traders”. And that ordinary transaction may relate to “mercantile documents, including enforcement and interpretation of such documents”. A merchant or a trader need not be as such-always and invariably. That merchant or trader is an individual, at first. And he may transact with another only as an individual. An individual may help another individual and that help may take the shape of lending. Not every instance of lending must reek of business or trade; not every trader must always act as a trader.
17. Here, the plaintiff pleads that he lent a friendly loan to another needy friend. It is not a transaction between them in the course of their ordinary business; much less can it be treated as money lending perse.
18. First, the definition is exhaustive because section 2 (1) (c) (i) employs the expression “means”. Second, though it may be an ordinary transaction, it is not between or among merchants, bankers, financiers, or traders. So, it cannot be treated as a transaction, ordinary or otherwise, between merchants, bankers, financiers, or traders. It is indeed a private transaction sans any commercial or business trappings.
19. At any rate, the Commercial Courts Act, 2015 has not obliterated Order 37 of CPC. If I indulge in some generalisation, Order 37 is a genus and the Commercial Courts Act, 2015 a species.
20. Under these circumstances, I hold that the Suit ought to be treated as a Summary Suit rather than a Commercial Summary Suit. After re-numbering the suit thus, the Registry will place it before the Court the next week.
In the High Court of Bombay
(Before Dama Seshadri Naidu, J.)
Bharat Huddanna Shetty Vs Ahuja Properties & Developers and Others
Summons for Judgment No. 9 of 2021,
Decided on July 13, 2021
Citation: 2021 SCC OnLine Bom 13984.
Print PageSummary procedure is a legal process designed to expedite the resolution of certain types of cases, typically by allowing for a faster and simpler resolution than the regular court process. In the context of Indian law, both the Civil Procedure Code (CPC) and the Commercial Courts Act provide mechanisms for summary procedures, but they differ in scope, application, and specific procedures.
3. Fraudulent default by Financial Establishment. Any Financial Establishment, which fraudulently defaults any repayment of deposit on maturity alongwith any benefit in the form of interest, bonus, profit or in any other form as promised or fraudulently fails to render service as assured against the deposit, every person including the promoter, partner, director, manager or any other person or an employee responsible for the management of or conducting of the business or affairs of such Financial Establishment shall, on conviction, be punished with imprisonment for a term which may extend to six years and with fine which may extend to one lac of rupees and such Financial Establishment also shall be liable for a fine which may extend to one lac of rupees.
4. Attachment of properties on default of return of deposits.
Print PageThe court took note of the judgment in Punjab Pen House (supra) and made the following observations:
In the case cited a suit under Order xxxvII C.P.C. was held to be maintainable abased on an invoice since the invoice embodied all the terms and conditions of the contract. It was the admitted position between the parties that the supply of the goods had been under he terms and conditions as per invoice. In the case before us the invoice does not contain the terms and conditions of the contract and it cannot be said that all the terms and conditions of supply had been agreed to between the parties in the correspondence exchanged."
