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. |
A Summary Suit based on dishonoured cheques stands on a higher pedestal. In addition to the proof of underlying consideration, evidenced by the documents and material on record, in a given case, the plaintiff can bank upon the presumptions contained in Section 118 of the Negotiable Instruments Act, 1881 and Section 114 illustration (c) of the Indian Evidence Act, 1872.
32. A slightly distinct position of a Summary Suit based on a dishonoured cheque has been expounded by a Division Bench of this Court in the case of Rajesh Laxmichand Udeshi @ Bhatia v. Pravin Hiralal Shah8 wherein the Court adverted to the effect of the statutory presumptions under the Negotiable Instruments Act, 1881, while considering the prayer for leave to defend the suit based on a negotiable instrument.
33. The observations of the Division Bench in paragraph 14 and 15 of the said judgment are material and, hence, extracted below.-
14] When a summary suit instituted is based on a cheque which is dishonoured, effect of Sections 138 and 139 of Negotiable Instruments Act raising statutory presumption that the cheque was issued in discharge of a liability, is a relevant consideration to be kept in mind. The said Sections cast a burden upon the defendant to rebut the presumption. Summary suits instituted on cheques which are dishonoured will, therefore, stand on a higher footing than summary suits instituted on the basis of other documents. In such cases, the Court will have to take into consideration the statutory presumption which is raised when the cheques are dishonoured. The object behind providing a statutory presumption under the N egotiable Instruments Act has to be kept in mind while judging the credibility of a defence raised by the defendant in summary suit. Thus, the test of more than “shadowy” and less than “probable” as adverted to by the Apex Court cannot apply in cases where the law requires a person to explain certain state of affairs. The judgments which are relied upon by the learned counsel do not consider the effect of the statutory presumptions raised under the Negotiable Instruments Act when a cheque is dishonoured. In our opinion, when a cheque is dishonoured, the Court is enjoined with the duty to scrutinize the defence put up by the defendant with a much higher degree of care and circumspection. Such summary suits cannot be treated as on par with the cases instituted on contracts or invoices etc. where such statutory presumptions do not operate.
15] The legislative intent behind enactment of Sections 138 and 139 of the Negotiable Instruments Act is to prevent abuse of the banking system. Thus, one who issues a cheque extends a solemn promise to pay. Based on this promise and action, the recipients arrange their affairs and quite often enter into further transactions. Unless extra ordinary circumstances are made out, one who issues cheque is deemed to have undertaken to pay. Negotiable Instruments Act enforces the promise strictly by raising statutory presumption and treating it as an offence. This provision elevates a cheque to a higher status than the other instruments, such as written contract etc. to which no such statutory presumption is attached. What needs to be emphasized is that presumption in respect of a dishonoured cheque places a higher burden on the defendant to elucidate the defence than the burden which is cast on a defendant where the suit is filed on the basis of ordinary instruments. In the cases based on dishonour of cheques, the defendant must satisfy the conscience of the Court and cannot take shelter behind the rules formulated primarily in respect of suits based on ordinary instruments. The Court while exercising the discretion to grant leave or otherwise to the defendant in such cases cannot be oblivious of the legislative intent to place the promise made through a cheque on a higher pedestal than the promise made through an ordinary instrument. This is not to state that moment a Summary Suit is lodged based on a dishonoured cheque, it must be decreed without anything more. What needs to be emphasised is that the fact that there is a statutory presumption attached to the dishonoured cheque will constitute an important ingredient while considering the question whether leave to defend should be granted in cases of dishonoured cheques and the Court must scrutinise the defence strictly. The object of the summary procedure is ultimately to see that the defendant does not needlessly prolong the litigation by creating untenable, frivolous and casual defences so as to deprive the plaintiff of the monies due to him.
In the High Court of Bombay
(Before N.J. Jamadar, J.)
Shailesh Bhagoobhai Bhoolabhai Vs Deepak Raheja.
Summons for Judgment No. 36 of 2021,
Decided on December 15, 2022,
Citation: 2022 SCCONLINE Bom 11643.
Read full Judgment here: Click here.
Print PageEven the endeavor of Mr. Momaya to seek leave to defend by canvassing a submission that plaintiff has charged interest at an exorbitant and unconscionable rate does not advance the cause of the defendant. The plaintiff is seeking pre-suit, pendent lite, and future interest at the agreed rate of 12% per annum. In a business transaction in a commercial city like Mumbai, interest at the rate of 12% per annum can not be said to be exorbitant and unreasonable. Moreover, in the case at hand, there is an unequivocal undertaking to pay interest. In any event the award of interest on the amount covered by dishonoured cheques would be governed by the provisions contained in Section 80 of the Negotiable Instruments Act, 1881, which stipulates rate of 18 % per annum. Therefore, I am not persuaded to accede to the submission on behalf of the defendant to grant leave to defend the suit qua the interest component. {Para 35}
In the High Court of Bombay
(Before N.J. Jamadar, J.)
Shailesh Bhagoobhai Bhoolabhai Vs Deepak Raheja.
Summons for Judgment No. 36 of 2021,
Decided on December 15, 2022,
Citation: 2022 SCCONLINE Bom 11643.
Read full Judgment here: Click here.
Print PageThe second challenge based on the dispute not falling within the ambit of ‘commercial dispute’ under Section 2(c) of the Act, 2015, also does not carry much substance. Mr. Momaya made an endeavor to demonstrate that the dispute in question does not fall within the meaning of “commercial dispute” as envisaged by Section 2(1)(c)(i) of the Act, 2015. According to Mr. Momaya, the transaction in question is essentially of a loan simplicitor and does not partake the character of ordinary transactions of merchants, bankers, financiers and traders. {Para 17}
18. To bolster up of this submission, Mr. Momaya placed reliance on an order passed by Calcutta High Court in the case of Ladymoon Towers Private Limited v. Mahendra Investment Advisors Private Limited in IA No. GA/4/2021 in CS/99/2020, decided on 13th August, 2021, and another order passed by this Court in Summons for Judgment No. 9 of 2021, in Commercial Summary Suit No. 6 of 2021, Bharat Huddanna Shetty v. Ahuja Properties & Developers, dated 13th July, 2021.
19. “Commercial dispute” is defined under Section 2(1)(c)(i) of the Act, 2015 as under:—
“(i) ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents;”
20. Evidently, whether a dispute falls within the ambit of Section 2(1)(c)(i) is, by its very nature, rooted in facts. The decisions relied upon by Mr. Momaya essentially turned on the facts of those cases with which the Court was confronted. It is true that in the case of Ambalal Sarabhai Enterprises Limited v. K.S. Infraspace LLP3, the Supreme Court has not approved a wide construction of the definition of “commercial dispute”. However, the issue as to whether the dispute in a given case constitutes a “commercial dispute” must necessarily be decided in the backdrop of the facts of the said case.
21. In the case at hand, in my view, the following factors assumes significance. First, the deceased plaintiff claimed that the loan was advanced to the defendant, who was dealing in a real estate business, to discharge his statutory dues. Second, the Bill of Exchange against which the loan was advanced, over the drawal of which there is no dispute, clearly records that the loan was advanced for a business purpose. Third, the letter dated 20th December, 2016, suggests that the defendant availed loan from the plaintiff and his companies regularly. Fourth, the plaintiff seems to have advanced the amount to the defendant in the regular course of business as is evident from the ledger account maintained by the plaintiff. In the circumstances, I find it rather difficult to accede to the submission that the transaction in question is one of a loan advanced by an individual to another without there being any element of commercial interest therein.
In the High Court of Bombay
(Before N.J. Jamadar, J.)
Shailesh Bhagoobhai Bhoolabhai Vs Deepak Raheja.
Summons for Judgment No. 36 of 2021,
Decided on December 15, 2022,
Citation: 2022 SCCONLINE Bom 11643.
Print PageI agree with the Plaintiff's Counsel submission relying on the case of Jyotsna Valia (supra) that a written contract need not always be a contract signed by both parties and may consist of correspondence exchanged between the parties without signature. In the present case the authenticity or veracity or truth of its contents of the emails exchanged between the parties are not in dispute. Thus the contentions of the Defendant with regard to no agreement between the parties to extend time upto 31st March 2020 is repelled as misconceived.{Para 30}
IN THE HIGH COURT OF BOMBAY
Interim Application No. 655 of 2023 in Commercial Summary Suit No. 75 of 2021 and Summons for Judgment No. 65 of 2021 in Commercial Summary Suit No. 75 of 2021
Decided On: 20.09.2023
Play Games 24X7 Pvt. Ltd. Vs. Loran Leasing And Infotech Pvt. Ltd.
Hon'ble Judges/Coram:
Kamal Khata, J.
Citation: MANU/MH/3838/2023.
Read full Judgment here: Click here.
I am in respectful agreement with the judgement of this Court in the case of First Rand Services Pvt. Ltd vs. Pantheon Infrastructure Ltd.2 which held that
"I find substance in the submission of Mr. Engineer. If the contention on behalf of the defendant that the defendant is entitled to an unconditional leave to defend the suit since the defendant has raised a counterclaim is accepted, the very object of providing summary procedure under Order XXXVII of the Code would be rendered otiose. It is one thing to contend that while seeking leave to defend the suit, the Defendant has raised a counterclaim which raises a substantive defence or at any rate triable issues. It is a completely different thing to assert that since the Defendant has raised a counter claim, irrespective of the nature and quality of the defence and/or counterclaim the Defendant is entitled to an unconditional leave to defend the suit. It all turns upon the quality of defence raised by the Defendant. The tests enunciated by a catena of decisions and reformulated in the case of Hubtown (supra) are required to be applied even in a case where the Defendant raises a counterclaim. An unconditional leave cannot be granted on the sole premise that the Defendant has raised a counterclaim."{Para 36}
IN THE HIGH COURT OF BOMBAY
Interim Application No. 655 of 2023 in Commercial Summary Suit No. 75 of 2021 and Summons for Judgment No. 65 of 2021 in Commercial Summary Suit No. 75 of 2021
Decided On: 20.09.2023
Play Games 24X7 Pvt. Ltd. Vs. Loran Leasing And Infotech Pvt. Ltd.
Hon'ble Judges/Coram:
Kamal Khata, J.
Citation: MANU/MH/3838/2023.
Print PageIn view of the above, Section 4 of the Limitation Act could rescue the petitioner, as 24/11/2019 was a Sunday and even 23/11/2019 was a non-working Saturday (the Fourth Saturday). However, it would have to be seen, whether Exh.-8, can be said to be an application, in the eyes of law. In the entire pleadings in the memo of petition, there has not been a whisper that, Exh.-8 was supported with an affidavit that was sworn before an oath administering authority or a notary on or before 25/11/2019. Even a glance at Exh.-8, which is placed on record, would indicate that even the lawyer has not identified the petitioner on the last page of the application. The signature of the petitioner is found at two places with no signature of the lawyer, identifying the petitioner, much less an affidavit in support of Exh.-8. {Para 12}
13. In Amitabh s/o. Ramsharan Nigam v. Amit Raghunandan Saran Sharma & Ors. MANU/MH/0359/2020 : 2020 (3) All M.R. 188, it has been held that the requirement under Section 43(4)(a) of the Rent Act is mandatory in nature. An application filed by the counsel, bearing his signature, seeking leave to defend, does not satisfy the strict requirement of the said provision. No affidavit was filed by the petitioner. Hence, refusing to grant leave to defend was proper, as the petitioner did not satisfy the strict requirement of Section 43(4)(a) of the Rent Act.
14. In view of the above, it is obvious that Exh.-8, without the mandatory affidavit, would not be an application, which is within the strict prescription of law. In fact, the language used in Section 43(4)(a) requires an affidavit to be filed and not a mere application. As such, though Section 4 of the Limitation Act may have rescued the petitioner, the absence of an affidavit, which is mandatory, would render the said application non-existent in the eyes of law.
15. In view of the above, this petition being devoid of merits, is, therefore, dismissed.
IN THE HIGH COURT OF BOMBAY
Writ Petition No. 579 of 2022
Decided On: 19.01.2022
Laxman Dadasaheb Jagtap Vs. Additional Commissioner, Kokan and Ors.
Hon'ble Judges/Coram:
R.V. Ghuge, J.
Citation: MANU/MH/0226/2022
Print PageThough the learned advocate for the petitioner, at first blush, would appear to be right in placing reliance upon Section 4 of the Limitation Act, the issues that need to be considered are, (a) whether Section 5 of the Limitation Act would be applicable to the case of the petitioner and, (b) whether application, Exh.-8, seeking leave to defend, could be termed to be an application, in the eyes of law, in the absence of an affidavit or even a verification not affirmed before an oath administering authority. {Para 10}
11. In Prakash H. Jain v. Ms. Marie Fernandes1, the Hon'ble Apex Court has held that the competent authority cannot be mistaken to be a ‘court’. The authority has a limited scope and a specific purpose under the Act and it cannot be deemed to be a ‘court’ for invoking Section 5 of the Limitation Act. A similar view was taken in Sunda Associates v. Ajit Kisanlal Agarwal2, wherein it was held that the authority cannot be deemed to be a ‘court’ and the delay of even one day, cannot be condoned.
13. In Amitabh s/o. Ramsharan Nigam v. Amit Raghunandan Saran Sharma4, it has been held that the requirement under Section 43(4)(a) of the Rent Act is mandatory in nature. An application filed by the counsel, bearing his signature, seeking leave to defend, does not satisfy the strict requirement of the said provision. No affidavit was filed by the petitioner. Hence, refusing to grant leave to defend was proper, as the petitioner did not satisfy the strict requirement of Section 43(4)(a) of the Rent Act.
14. In view of the above, it is obvious that Exh.-8, without the mandatory affidavit, would not be an application, which is within the strict prescription of law. In fact, the language used in Section 43(4)(a) requires an affidavit to be filed and not a mere application. As such, though Section 4 of the Limitation Act may have rescued the petitioner, the absence of an affidavit, which is mandatory, would render the said application non-existent in the eyes of law.
In the High Court of Bombay
(Before Ravindra V. Ghuge, J.)
Laxman Dadasaheb Jagtap Vs Additional Commissioner and Another
Writ Petition No. 579 of 2022
Decided on January 19, 2022
Citation: 2022 SCC OnLine Bom 155
Print PageThe brief background is that the Plaintiff filed a summary suit under
Order XXXVII CPC for recovery of a sum of Rs.21 lakhs along with
interest. The case of the Plaintiff is that the Plaintiff gave a loan to the Defendant to the tune of Rs.21 lakhs, which was transferred from the bank account of the Plaintiff in Bank of Baroda to the bank account of the Defendant’s firm i.e., MK Clothing, in HDFC Bank, Priyadarshini Vihar, Delhi. The payment of Rs.21 lakhs and receipt thereof on 8th August, 2015 is not disputed by the Defendant.
14. Considering the fact that the amount, which was transferred by the Plaintiff to the Defendant was through proper banking channels for which clear evidence has been placed on record, the suit under Order XXXVII CPC would be maintainable as it is for a liquidated sum. The onus would be on the Defendant to show as to why the leave to defend should be granted.
IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 15th December, 2020
C.R.P. 57/2020 & CM APPL.20305/2020
SURENDER KUMAR Vs MANOJ KUMAR
CORAM:
JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J. (Oral)
