Bombay High Court
M/S. Hawa Valves (India) Pvt. Ltd. ... vs Naseem Ahmad Shaikh on 30 March, 2021
Bench: Anuja Prabhudessai
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 8729 OF 2019
M/s. Hawa Valves (India) Pvt. Ltd.
through Director. .. Petitioner
v/s.
Naseem Ahmad Shaikh ..Respondent
Mr. Ajit Anekar and Mr. Prithvi Aringale i/b. Auris Legal for the
Petitioner.
CORAM : ANUJA PRABHUDESSAI, J.
DATED : 30th MARCH, 2021.
P.C. :
1. The Petitioner herein has assailed order dated 7th September,
2018 whereby the learned Civil Judge, Thane, has declined to grant an
unconditional leave to defend the suit and has granted conditional
leave subject to deposit of an amount of Rs.42,06,736/- or bank
guarantee equivalent to the said amount.
2. Shri Anekar, learned Counsel for the Petitioner submits that the
Respondent herein had issued inflated invoices and this fact has been
accepted by the trial Court. He therefore contends that this is a triable
issue and since the Petitioner has substantial defence or atleast fair
and reasonable defence, the trial Court ought to have granted
unconditional leave to defend the suit. In support of his contention, he
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has relief upon the judgment of the Apex Court in IDBI Trusteeship
Services Ltd. vs. Hubtown Ltd, (2017) 1 SCC 568.
3. I have perused the records and considered the submissions
advanced by the learned Counsel for the Petitioner. Before adverting
to the facts, it would be relevant to refer to the decision in IDBI
Trusteeship (supra) wherein the Apex Court, after considering the
previous judgment on the issue has laid down the following principles
as to grant of leave in summary suits;
"18. Accordingly, the principles stated in paragraph
8 of Mechelec's case will now stand superseded, given the
amendment of O. XXXVII R.3, and the binding decision of
four judges in Milkhiram's case shall apply. Hence the
following principles shall be observed while considering
whether to grant leave to defend a summary suit:
(i) If the defendant satisfies the Court that he has
a substantial defence, that is, a defence that is likely to
succeed, the plaintiff is not entitled to leave to sign
judgment, and the defendant is entitled to unconditional
leave to defend the suit.
(ii) If the defendant raises triable issues indicating
that he has a fair or reasonable defence, although not a
positively good defence, the plaintiff is not entitled to sign
judgment, and the defendant is ordinarily entitled to
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unconditional leave to defend.
(iii) The question whether the defence raises a
triable issue or not has to be ascertained by the court from
the pleadings before it and the affidavit of parties and it is
not open to it to call for evidence at that stage.
(iv) Even if the defendant raises triable issues, if a
doubt is left with the trial Judge about the defendant's good
faith, or the genuineness of the triable issues, the trial
judge may impose conditions both as to time or mode of
trial, as well as payment into court or furnishing security.
Care must be taken to see that the object of the provisions
to assist expeditious disposal of commercial causes is not
defeated. Care must also be taken to see that such triable
issues are not shut out by unduly severe orders as to
deposit or security.
(v) If the defendant raises a defence which is a
plausible but improbable, the trial judge may impose
conditions as to time or mode of trial as well as payment
into court or furnishing security. As such a defence does
not raise triable issues, conditions as to deposit or security
or both can extend to the entire principal sum together with
such interest as the court feels the justice of the case
requires.
(vi) If the Defendant has no substantial defence
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and/or raises no genuine triable issues, and the court finds
such defence to be frivolous or vexatious, then leave to
defend the suit shall be refused, and the plaintiff is entitled
to judgment forthwith;
(vii) If any part of the amount claimed by the
Plaintiff is admitted by the defendant to be due from him,
leave to defend the suit, (even if triable issues or a
substantial defence is raised), shall not be granted unless
the amount so admitted to be due is deposited by the
defendant in Court."
4. In the instant case, the Plaintiff has filed a suit under Order 37
Rule 1 of CPC for recovery of Rs. 84,13,473/- being the price of goods
supplied to the Defendant. The Defendant has filed application under
Order 37 Rule 3 of CPC seeking unconditional leave to defend the suit
mainly on the ground that the plaintiff had issued inflated invoices.
5. It is not in dispute that the Plaintiff is dealing in supply of
industrial construction equipment and materials. The Defendant had
placed purchase orders with the Plaintiff company for supply of certain
goods. Accordingly, the Plaintiff supplied goods and raised invoice for
Rs.76,03,368/- from March 2015 to September 2015. The said
amount was required to be paid within 90 days, failing which the
Plaintiff was entitled for interest @ 18% per anum. The Defendant has
not paid the said amount on the ground that the invoices are inflated.
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It is pertinent to note that the Defendant had received the goods
mentioned in the said invoices without raising any dispute as to the
quality and the quantity of the goods. As rightly observed by the trial
Court, the defendant had not disclosed in any of the correspondence
with the Plaintiff, the actual market value of the material supplied by the
Plaintiff and had also not offered to pay to the Plaintiff the actual value
of the material supplied. It is in these circumstances, the trial Court
has held that the Defendant has failed to raise the substantial defence
and is therefore not entitled for unconditional leave to defend the suit.
It may be noted that the trial Court, upon considering the material on
record has held that the defence raised is not improbable and therefore
granted unconditional leave by directing the defendant to deposit
Rs.46,06,736/- or to furnish bank guarantee of equivalent amount as
condition precedent. In my considered view, the trial Court has
exercised the discretion judiciously and has tried to protect the interest
of the Plaintiff and has further ensured that none of the parties to the
suit suffer avoidable prejudice. The impugned order is just, fair,
equitable and is in tune with the object of the provision. The order
does not suffer from any jurisdictional error and does not warrant any
interference. The Petition has no merits and is accordingly dismissed.
(ANUJA PRABHUDESSAI, J.)
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