NILIMA SYNTHETICS PVT. LTD. Vs. MANOJKUMAR AGRAWAL

JUDGEMENT

(1.) The petitioners are the original defendants and the respondent is the original plaintiff in Summary Suit No. 18 of 2008. The petitioners are before this Court challenging the order dated 14.05.2012 passed in application below Ex. 23 filed in Summary Suit No. 18 of 2008. By the said order, the defendants were refused permission to unconditionally defend the summary suit. The trial Court granted leave to defend the said suit on condition that the defendants deposit 50% of the amount due as per the amount claimed by the plaintiff.

(2.) The respondent herein-original plaintiff had filed a suit contending that he was in the business of selling POY yarn. It was his case that the petitioner no. 1 and the remaining petitioners were the Directors who had purchased goods worth Rs. 7,92,995/- in the year 2005 and therefore together with an interest of Rs. 4,22,545/-, the respondent-original plaintiff was entitled to a sum of Rs. 12,15,540/-. A summary suit, therefore, invoking Order 37 of the Code of Civil Procedure, 1908 was filed. 2. 1 After summons for judgement was issued, the original defendants-petitioners herein filed an application below Ex. 23 seeking unconditional leave to defend. In the application so filed seeking unconditional leave, it was the case of the petitioners that they had not undertaken such a transaction of purchase of yarn and that the bills for an amount of Rs. 7,92,995/- dated 07.05.2005, 08.05.2005 and 11.05.2005 were forged and bogus. A further pleading was made in the application that the fact that there was no proof of the delivery challans or the bills as to the amount of yarn, the weight and the tempos in which such goods were sent was absent, the entire transaction so alleged to have occurred had in fact not so occurred; that the bills were subsequently got up. It was further the case of the defendants that the books of accounts for the period from 01.04.2005 to 31.03.2006 and 01.04.2006 to 31.03.2008 were wrong and no money was due to the plaintiff. A preliminary contention was also raised that the bills under which such amounts were claimed were of May 2005 namely 07.05.2005, 08.05.2005 and 11.05.2005 whereas the suit was filed on 13.05.2008, beyond a period of three years. The suit was, therefore, barred by limitation. 2. 2 The plaintiff objected to the application seeking unconditional leave to defend. Pointing out the provisions of Order 37, it was the case of the plaintiff-respondent herein that such a defence raised by the defendants was a substantial defence; that it was frivolous and vexatious and that the fact that they had lodged criminal complaint suggesting that the bills were bogus, it was a case where a false defence was sought to be raised. As far as question of limitation was concerned, it was the case of the plaintiff that the suit was within the period of limitation because from the last bill dated 11.05.2005, the petitioners had been given a credit period of seven days. Moreover, it was the case of the plaintiff that it was open for the defendant to deny such a transaction when the Directors themselves had issued a cheque for an amount of Rs. 2,69,432/- on 20.05.2005 towards part payment of such transactions and the cheque had bounced. The plaintiff, therefore, suggested that there was no reason that the defendants be granted unconditional leave to defend as there was no triable issue to be raised and the defence was illusory.

(3.) Ms. Kruti M. Shah, learned advocate appearing on behalf of the petitioners has taken me to the order of the trial Court below Ex. 23. She has assailed the order of the trial Court on the ground that the trial court failed to appreciate that when the defence of the defendants was plausible and was a substantial defence, it was open for the trial court to insist on a conditional leave to defend as so directed. She further submitted that a categorical case was made out denying issuance of such bills or that such a transaction was entered into and averments in the application so made suggested that no such transaction in fact had occurred. Apart from the fact that no summary suit would lie under the provisions of Order 37, it was her case that even assuming without admitting that such a summary suit was maintainable, the learned trial Court ought to have granted unconditional leave to defend in view of the extensive averments made in the application which would suggest a plausible and substantial defence which was vexations or frivolous. In support her submissions, Ms. Shah has relied upon the decision of the Apex Court in the case of M/s. Mechelec Engineers &Manufacturers v. M/s. Basic Equipment Corporation reported in (1976) 4 SCC 68 7. Taking me through this judgement, Ms. Shah has contended that when a triable issue is raised, as was in the present one, leave to defend unconditionally ought to have been granted. She has also relied on another decision rendered by this Court in the case of State Bank of Saurashtra v. M/s. Ashit Shipping Services (P) Ltd. &Anr. reported in 2002 (2) GLH 673 , more particularly paras 12, 13 and 17. 3. 1 Essentially, therefore, in the submission of Ms. Shah, the trial Court committed an error in granting conditional leave to defend when apparently in the operative portion of the order, the Court has come to a specific opinion that there was a question of limitation which could be only decided on the basis of evidence and also opined that the question whether the suit was maintainable under Order 37 was a question that needed to be decided. Apparently, therefore, according to Ms. Shah when the Court itself had opined that there were two triable issues namely that of limitation and that whether the suit was maintainable under Order 37 of the Civil Procedure Code, 1908, unconditional leave to defend ought to have been granted.