By observing that while oral evidence may not be necessary and the suit may be disposed of expeditiously, further documentary evidence is necessary and the suit cannot be disposed of summarily on the basis of the material on record, the Madras High Court disposed of the application filed by the applicant for summary judgment.
A Single Bench of Justice Senthil Kumar Ramamoorthy while dealing with an application for summary judgment observed that the present application needs to be entertained and cannot be solely rejected on the ground that because the earlier application under Order XII Rule 6 CPC was rejected.
The plaintiff instituted the present application for summary judgment. In pursuance of the same, the plaintiff was seeking judgment and decree for the suit claim of Rs.38,16,45,711/-, jointly and severally, against the first and second respondents/ defendants.
Factual matrix of the case was such that the plaintiff submitted that the first defendant borrowed money from the Plaintiff under multiple facility agreements. These loans were guaranteed by the second and third respondents/ defendants. Thereafter on october 7, 2020, the then Chief Financial Officer and other senior employees of the first Defendant issued a communication stating that the first Defendant does not have sufficient liquidity to service its debt obligations and had defaulted in repayment since September 30, 2020.
Eventually, the plaintiff filed a suit for claiming a total sum of Rs. 38,16,45,711/- along with interest on the said amount at the rate of 18% per annum from November 4, 2020 till the date of the repayment.
The Court after hearing the rival contentions of the parties, observed that the prime objection that was posed for consideration was whether the present application was liable to be rejected on account of dismissal of the earlier application filed by the plaintiff under Order XVII Rule 6 of CPC. The Court further noted that the respondents/ defendants relied on the fact that the application for a judgment on admissions was rejected after considering the same documents which are relied upon by the applicant to support the present application under Order XIII-A of CPC. The applicant on the contrary contended that "that the scope of inquiry under Order XIII-A of CPC is different. To deal with the same, the Court deemed it fit to re- produce the Order XII Rule 6 of CPC.
In view of the same, the Court inferred that it was clear that a party to suit may apply under this provision, or, the court may act suo moto, if admissions of fact were made either in the pleading or otherwise. The text of Order XII Rule 6(1) indicates that such admission may be made orally or in writing. It was further observed by the Court, that the Supreme Court and various High Courts have consistently interpreted Order XII Rule 6 as being applicable only if the admission is clear, categorical, unambiguous and unequivocal.
Further, the Court noted the stark distinctions between Order XIII-A order Order XII Rule 6, in respect of the same , the Court opined that Order XIII-A enables either the plaintiff(s) or the defendant(s) to apply for summary judgment at any time after the summons has been served on the defendant(s) but before issues are framed in the suit. Another difference that was noted by the Court was that the Court may act on its own motion to pronounce a judgment on admission, whereas an application by one of the parties was mandatory under Order XIII-A.
In addition to the aforesaid observations, the Court took into consideration Rule 3 of Order XIII- A wherein grounds for summary judgment are mentioned. In view of the same, the Court noted that there were two requirements that should be satisfied for the grant of a summary judgment. The first requirement was that the applicant should establish that the counterparty has no real prospect of successfully defending the claim, if the applicant is the plaintiff, or, if the applicant is the defendant, of succeeding on the claim. The second requirement was that there is no other compelling reason why the claim should not be disposed of before recording oral evidence.
Thus, in pursuance of the aforesaid pre- requisites, the short question that was posed before this Court with respect to the instant case was whether the counter party had the real prospect of defending or successfully prosecuting the claim, as the case may be, if the suit is carried to trial. If such a threshold was met, the Court should also be satisfied that there is no other compelling reason to allow parties to adduce oral evidence before pronouncing summary judgment.
Hence, while alaysing the pleadings in the light of the provisions cited above and keeping in view the wider scope of Order XIII-A CPC, the Court observed that the present application needs to be entertained and cannot be solely rejected on the ground that because the earlier application under Order XII Rule 6 CPC was rejected. In addition to the same, the Court also observed that there was no realistic possibility that the defendants may successfully defend the suit.
Thus, at last, the Court concluded by observing that a suit cannot be summarily decreed at the instance of a plaintiff unless such plaintiff satisfies the court that the suit claim stands duly proved. In the present case, while oral evidence may not be necessary and the suit may be disposed of expeditiously, further documentary evidence is necessary and the suit cannot be disposed of summarily on the basis of the material on record, the Court remarked. Hence, the application was disposed of while observing that the suit should be listed for further hearing for framing of issues and for filing of affidavits.
Case name: NORTHERN ARC CAPITAL LIMITED V. SAMBANDH FINSERVE PRIVATE LIMITED And Ors
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