Gujarat High Court
Shridhar Goud Mallepula vs M/S Gujarat Craft Industries Ltd on 22 April, 2025
Author: Sunita Agarwal
Bench: Sunita Agarwal
NEUTRAL CITATION
C/SCA/4804/2025 ORDER DATED: 22/04/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 4804 of 2025
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SHRIDHAR GOUD MALLEPULA & ANR.
Versus
M/S GUJARAT CRAFT INDUSTRIES LTD.
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Appearance:
MR. HJ KARATHIYA(7012) for the Petitioner(s) No. 1,2
PRANAV D THAKKAR(8501) for the Respondent(s) No. 1
VIJAYKUMAR B LIMBACHIYA(8763) for the Respondent(s) No. 1
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CORAM:HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE
SUNITA AGARWAL
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 22/04/2025
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE PRANAV TRIVEDI)
1. The present writ petition under Article 227 of the Constitution of India assails the order dated 21.2.2025 passed by the Commercial Court, Ahmedabad in Commercial Summary Suit No. 3692 of 2021 below Exh-13 wherein leave to defend was conditionally allowed in favour of the petitioner- original defendant subject to the deposit of 50% of the amount due, i.e. Rs.14,14,067.50 ps. Page 1 of 11 Uploaded by SAJ GEORGE(HC01069) on Mon Apr 28 2025 Downloaded on : Mon Apr 28 22:39:17 IST 2025
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2. Brief facts leading to filing of the present writ-petition is that the petitioner is the original defendant No.1 in Commercial Suit No. 3692 of 2021 and, inter alia, engaged in the business of trading and supply of agricultural plastic products. The respondent is the original plaintiff in Commercial Civil Suit No. 3692 of 2021 and is a Company registered under the provisions of Companies Act, 1956 and, inter alia, engaged in the business of manufacturing and production of GEO-MEMBRANE & HDPE woven pipes.
3. It was the case of the respondent-original plaintiff that commercial relationship between the petitioner and the respondent started in the year 2013 wherein the petitioner approached the respondent for availing supply of various types of plastic HDPE GEO- MEMBRANCE SHEET for water proofing. Pursuant to the negotiation, purchase orders were given from time to time and supply was made by the respondent. Pursuant thereto, various invoices were raised and amounts were paid for initial invoices. Page 2 of 11 Uploaded by SAJ GEORGE(HC01069) on Mon Apr 28 2025 Downloaded on : Mon Apr 28 22:39:17 IST 2025
NEUTRAL CITATION C/SCA/4804/2025 ORDER DATED: 22/04/2025 undefined There was a running Account between the petitioner and parties and the same was maintained smoothly till the year 2018. It was the case of the respondent that there were a total uncleared invoices to the tune of Rs.28,28,135/-. Such dispute led to filing of the Commercial Suit.
4. The Commercial Suit was instituted before the Commercial Court, Ahmedabad being Commercial Suit No. 3692 of 2021. Initially mandatory procedure under Section 12-A of the Commercial Courts Act, 2015 (hereinafter referred to 'the Act' for short) for mediation and conciliation was undertaken, however, the same was unsuccessful. There was non-starter report on 28.10.2022. This lead to initiation of the Suit proceedings.
5. The Suit was preferred under the provisions of the Act along with the provisions of Order 37 of the Code of Civil Procedure as a Summary Suit. On 28.9.2022 respondent - original plaintiff preferred an Page 3 of 11 Uploaded by SAJ GEORGE(HC01069) on Mon Apr 28 2025 Downloaded on : Mon Apr 28 22:39:17 IST 2025 NEUTRAL CITATION C/SCA/4804/2025 ORDER DATED: 22/04/2025 undefined application under Order 37 Rule 3 of the Code of Civil Procedure for summons of judgment. The petitioner- original defendant also preferred an application for leave to defend in November, 2022. The Commercial Court by way of order dated 21.2.2025 below Exh-13 in Commercial Suit No. 3692 of 2021 granted the petitioner leave to defend but with a condition to deposit 50% of the amount due i.e. Rs.14,14,067.50 ps, which has led to filing of the present writ-petition.
6. Mr. H.J. Karathiya, learned advocate for the petitioner has submitted that the impugned order by the Commercial Court is absolutely discriminatory and arbitrary. The Commercial Court has not assigned proper reasons as to why the conditions are ascertained while granting leave to defend. There is no sanctity in imposing condition of making payment of 50% of amount due.
7. It was further sought to be submitted that Commercial Court has not appreciated that there was Page 4 of 11 Uploaded by SAJ GEORGE(HC01069) on Mon Apr 28 2025 Downloaded on : Mon Apr 28 22:39:17 IST 2025 NEUTRAL CITATION C/SCA/4804/2025 ORDER DATED: 22/04/2025 undefined NO QUALITY test certificate of the goods in question. In wake of absence of such certificate, the contract could not have been fulfilled. It was further sought to be submitted by Mr. Karathiya that there was no cause of action and issue with regards to jurisdiction was also raised. Therefore, leave to defend ought to have been allowed unconditionally.
8. Relying on judgment of this Court in Appeal from Order No. 370 of 2013, it was sought to be submitted by Mr. Karathiya that when there was issue of jurisdiction, plaint ought to have been returned under the provisions of Order 7 Rule 10 of the Code of Civil Procedure. Further reliance was placed on the order of this Court in Special Civil Application No. 301 of 2023 and it was contended that there were triable issues and therefore, the Commercial Court ought to have considered that the Suit was not falling within the scope and ambit of Order 37 of the Code of Civil Procedure. In wake of such submissions, Mr. Karathiya has submitted to allow present writ petition Page 5 of 11 Uploaded by SAJ GEORGE(HC01069) on Mon Apr 28 2025 Downloaded on : Mon Apr 28 22:39:17 IST 2025 NEUTRAL CITATION C/SCA/4804/2025 ORDER DATED: 22/04/2025 undefined and to quash the impugned order. However, while assailing the impugned order, it was categorically accepted by Mr. Karathiya that the condition as stipulated in the impugned order for payment of 50% amount due, within a period of four weeks, has not been complied by the petitioner and for the same separate action has been initiated by the respondent.
9. Having heard Mr. Karathiya, learned advocate for the petitioner and perused the material on record, the only issue raised by the petitioner is with regard to grant of "conditional" leave to defend. The petitioner being original defendant in Commercial Suit No. 3692 of 2021 has been granted leave to defend with a condition of payment of 50% amount due. According to the petitioner, it ought to have been unconditional leave to defend.
10. The main issue put forward with a lot of vehemence by Mr. Karathiya is with regard to the testing report. It was sought to be argued by Mr. Karathiya that Page 6 of 11 Uploaded by SAJ GEORGE(HC01069) on Mon Apr 28 2025 Downloaded on : Mon Apr 28 22:39:17 IST 2025 NEUTRAL CITATION C/SCA/4804/2025 ORDER DATED: 22/04/2025 undefined once there is "no quality" test certificate of the goods then the conditions of contract were not fulfilled and there ought to have been unconditional leave to defend. However, the Commercial Court has given a categorical findings that the testing report was produced for the first time in the month of July, 2023 before the Commercial Court i.e. after two years from the filing of the Suit. It was also observed by the Commercial Court after perusing the e-mails between the parties that for a very long time, the petitioner has not raised any issue with regard to supply of inferior quality goods. Therefore, the contention with regard to the testing report raised by the petitioner fails in view of such factual findings returned by the Commercial Court.
11. Another issue raised by Mr. Karathiya is with regard to the period of limitation. However, only a general argument with regard to limitation has been raised before the Commercial Court. It has been categorically observed by the Commercial Court that Page 7 of 11 Uploaded by SAJ GEORGE(HC01069) on Mon Apr 28 2025 Downloaded on : Mon Apr 28 22:39:17 IST 2025 NEUTRAL CITATION C/SCA/4804/2025 ORDER DATED: 22/04/2025 undefined there is no dispute with regard to sending of goods by the plaintiff, i.e. the respondent herein. Further, from a bare perusal of the plaint, appended at Page- '42' of the present writ-petition, it is to be noted that the respondent asserted that the cause of action arose when last payment was made in the year 2018 and subsequently notice was given in the year 2019. Therefore, when there is a running Account and the payment was made on 5.12.2018 and the Suit was filed in the year 2021, it is within the prescribed period of limitation. The argument canvassed with regard to the limitation, therefore, cannot be sustained.
12. The third contention raised is with regard to jurisdiction. However, Mr. Karathiya has not been able to demonstrate as to what was the ground raised before the Commercial Court with regards to jurisdiction. It can be perused from the cause title of the Plaint itself that the respondent-plaintiff has its registered office within the jurisdiction of the Page 8 of 11 Uploaded by SAJ GEORGE(HC01069) on Mon Apr 28 2025 Downloaded on : Mon Apr 28 22:39:17 IST 2025 NEUTRAL CITATION C/SCA/4804/2025 ORDER DATED: 22/04/2025 undefined Commercial Court and the transaction with the respondent is not at all disputed. Therefore, vague ground raised by Mr. Karathiya with regard to jurisdiction, cannot be sustained.
13. The last issue raised by Mr. Karathiya is with regard to the fact that there are triable issues. However, the Commercial Court has given categorical findings that there are purchase orders and there is non-payment by the petitioner. Further, there is no dispute with regard to supply of goods by the respondent-plaintiff. Further, there is no dispute with regard to placement of purchase order by the petitioner herein namely original defendant. Further, the fact is disclosed with regard to non-payment of the running Accounts. On such factual background, the Commercial Court has granted leave to defend conditionally on payment of 50% of the amount due and such observations are absolutely justifiable and not required to be interfered with.
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14. It needs to be observed that the circumstances under which the learned Commercial Court is required to grant unconditional leave to defend are cases where the defendant shows substantial good defence where he is very likely to succeed and further showcases that there are genuine triable issues which shadows clout on the transaction itself. In such situation, the Commercial Court can definitely grant unconditional leave to defend. However, when defendant raises as triable issues but is not able to showcase the genuineness of such issues raised, then the Commercial Court can definitely balance the requirement of expeditious disposal of Commercial Cases on one hand with imposing conditions of payment in the Court.
15. In the instant case, when the Commercial Court has categorically observed about the genuineness of the transaction as well as the factum of delivery of goods and other aspects of commercial transaction are Page 10 of 11 Uploaded by SAJ GEORGE(HC01069) on Mon Apr 28 2025 Downloaded on : Mon Apr 28 22:39:17 IST 2025 NEUTRAL CITATION C/SCA/4804/2025 ORDER DATED: 22/04/2025 undefined brought on record then the conditional leave to defend on payment of 50% of the amount due cannot be interfered with. The reasons assigned by the Commercial Court while granting conditional leave to defend in favour of the petitioner are absolutely justifiable in wake of discussion made herein above.
In view of the same, the present petition is devoid of merits and is hereby dismissed with no order as to costs.
(SUNITA AGARWAL, CJ ) (PRANAV TRIVEDI,J) SAJ GEORGE Page 11 of 11 Uploaded by SAJ GEORGE(HC01069) on Mon Apr 28 2025 Downloaded on : Mon Apr 28 22:39:17 IST 2025