Bombay High Court
Mr. Jawaharlal L. Agicha vs Murphy Electronics Pvt. L Td. And ... on 25 January, 2023
Bench: N. J. Jamadar
nms-1808-2003.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
NOTICE OF MOTION NO.1808 OF 2003
VISHAL
SUBHASH IN
PAREKAR SUMMARY SUIT NO.2058 OF 2001
Digitally signed by
VISHAL SUBHASH
PAREKAR M/s. Murphy Electronics Private Limited and Ors. ...Applicants
Date: 2023.01.25
19:30:43 +0530 In the matter between
Jawaharlal Lachmandas Agicha ...Plaintiff
vs.
Murphy Electronics Private Limited and Others ...Defendants
Mr. Anshul Anjarlekar, for the Applicants/Ori. Defendants.
Mr. Prakash Nichani i/b. P.V. Nichani & Co., for the Respondent/ Ori.
Plaintiff.
CORAM : N.J. JAMADAR, J.
RESERVED ON : NOVEMBER 10, 2022
PRONOUNCED ON : JANUARY 25, 2023
-------------
ORDER:
1. The applicants/defendants have preferred this Notice of
Motion to condone the delay in taking out the Notice of Motion and
set aside the order passed by this Court in Summons for Judgment
No. 1124 of 2021 thereby decreeing the suit with a direction to give
credit of a sum of Rs. 10,000/- to the defendants while drawing up
the decree.
2. Shorn of superfluities, the background facts, and the
circumstances in which this Notice of Motion warrants
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determination, at this length of time, can be stated as under:-
2.1 M/s. Murphy Electronics Private Limited, defendant No. 1, is a
limited company. Video Vision Centre, the defendant No. 2, is a
proprietary concern. Defendant Nos. 3 to 5 are in-charge of and
responsible to the affairs of defendant Nos. 1 and 2.
2.2 The defendants approached the plaintiff for financial
assistance. During the months of February/August, 1999, the
plaintiff had advanced a sum of Rs. 25,50,000/- to the defendants
against the bills of exchange drawn by defendant No. 1 and accepted
by defendant No. 2. Upon presentment, the bills of exchange were
dishonoured by defendant No. 2. After payment a sum of Rs.
2,50,000/- towards interest, the defendants had drawn in all 52
cheques for varying amounts payable on varying dates towards
discharge of liability. Few of the cheques were honoured. However as
many as 30 cheques were returned un-encashed. The plaintiff thus
addressed demand notices under section 138 of the Negotiable
Instruments Act, 1881 (the Act, 1881) and called upon the
defendants to pay the amount covered by the cheques. In view of the
default on the part of the defendants in complying with the demand
therein the plaintiff was constrained to lodge the complaints for the
offence punishable under section 138 of the Act, 1881.
2.3 Vide legal notice dated 22 nd November, 2000 the plaintiff also
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called upon the defendants to pay the outstanding amount of Rs.
15,45,000/- along with interest accrued thereon. In a response,
dated 19th December, 2000 the defendants gave vague and evasive
reply. Hence, the plaintiff was constrained to institute the suit for
recovery of the sum of a Rs. 16,84,430/- along with interest thereon
on the strength of the bills of exchange.
2.4 The Writ of Summons was served on the defendants in the
month of September, 2001. The defendants entered appearance.
Thereupon, the Summons for Judgment was served on the advocate
for the defendants on 10th October, 2001. However, the defendants
did not file affidavit in reply seeking leave to defend.
2.5 On 24th February, 2003 when the Summons for Judgment was
listed before the Court, the learned counsel for the defendants made
a statement before the Court that, according to his instruction, the
defendants had paid the entire amount to the plaintiff. The learned
counsel for the plaintiff contested the said claim and submitted that
an amount of Rs. 10,000/- only had been paid. Noting the aforesaid
submissions and the fact that the defendants had not sought leave
to defend, the Court was persuaded to pass a decree with a
direction that the defendants be given credit of Rs. 10,000/- as the
plaintiff admitted to have received the said amount during the
pendency of the suit.
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2.6 The applicants/defendants took out this Notice of Motion
contending that they were unaware of the passing of the said
decree. In fact, on 14th February, 2002 the entire suit claim was
settled by the parties upon payment of a sum of Rs. 6,10,000/- by
defendant No. 1 to the plaintiff. The plaintiff has passed a duly
stamped receipt, acknowledging the said payment in full and final
settlement of the claim. The plaintiff had assured the defendants
that the suit would be withdrawn. The defendants had informed
their advocate about the said settlement. However, their advocate
had expressed a view that as and when the Summons for Judgment
would be listed before the Court, the Court would be apprised about
the said settlement and there was no need to move the Court till
then. The defendants contend, contrary to the settlement and
assurances, when the Summons for Judgment was listed before the
Court on 24th February, 2003, the plaintiff falsely claimed that a
sum of Rs. 10,000/- only was paid.
2.7 The applicants/defendants further contended that in the
Complaint Case No. 739/S/2002 the plaintiff made an endevour to
produce a forged document dishonestly claiming that only a sum of
Rs. 10,000/- was paid under the receipt dated 14 th February, 2002.
The applicants/ defendants further contended that only in the
month of March, 2003, when in the complaint for the offence
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punishable under section 138 of the Act, 1881, the advocate for the
complainant/plaintiff sought to produce a copy of the decree passed
in the suit on 24th December, 2003, they became aware of the
passing of the said decree.
2.8 On 11th March, 2004, the learned single Judge granted an ad-
interim relief in this Notice of Motion subject to deposit of a sum of
Rs. 8,95,000/-. In Appeal No. 267 of 2004 in Notice of Motion No.
669 of 2004 by an order dated 19 th April, 2004, the appeal Bench
directed that the stay to the execution and operation of the decree
would operate subject to deposit of a sum of Rs. 3,00,000/- only.
2.9 In Interim Application (L) No. 5117 of 2021 in Appeal No. 267
of 2004, by an order dated 29th July, 2021 the appeal Bench, with
the consent of the parties, restored the Notice of Motion and
granted four weeks time to respondent/plaintiff to file an affidavit in
Notice of Motion and two weeks to the appellant/defendant to file
affidavit in rejoinder, with a direction to decide the Notice of Motion
within a period of four weeks from the date of completion of
pleadings.
2.10 Upon remand, the plaintiff made a statement that he does not
wish to file further affidavit in reply. The defendants have, however,
filed additional affidavit in support of the Notice of Motion to place
on record the copies of the record and proceedings in the complaints
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filed under section 138 of the Act, 1881 and the documents tendered
therein. This is how the Notice of Motion now comes up for
determination.
3. I have heard Mr. Anshul Anjarlekar, learned counsel for the
applicants/defendants and Mr. Prakash Nichani, learned counsel for
the respondent/ plaintiff. With the assistance of the learned counsel
for the parties, I have perused the pleadings and material on record.
4. Mr. Anjarlekar, the learned counsel for the applicants
submitted that the peculiar facts of the case justify the exercise of
discretion by the Court under Order XXXVII Rule 4 of the Code of
Civil Procedure, 1908 (the Code) to set aside the decree and grant
an efficacious opportunity to the defendants to defend the suit. Mr.
Anjarlekar was at pains to canvass a submission that the decree in
question is obtained by plaintiff by resorting to a sharp practice.
Post decree, to bolster up the case which was presented before the
Court on the date of passing of decree i.e. on 24 th February, 2003,
the plaintiff resorted to forgery, which is evident from the
documents relied upon by the plaintiff in the affidavit in reply filed
to the Notice of Motion and tendered before the learned Magistrate.
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5. Mr. Anjarlekar would further urge that the then advocate for
the defendants, namely, Mr. Niranjan Jagtap has sworn an affidavit
to substantiate the claim of the defendants that they had informed
him that the suit claim was settled and the plaintiff had assured to
withdraw the suit and that he had not apprised the factum of
service of the Summons for Judgment on the defendants. In the
face of this material, according to Mr. Anjarlekar, the defendants
have made out the 'special circumstances' which warrant the
exercise of the power under Order XXXVII Rule 4 of the Code.
6. In opposition to this Mr. Nichani would submit that the
veracity of the receipt sought to be placed on record by the
defendants in support of their claim that they had settled the entire
suit claim itself is in contest. According to Mr. Nichani to bolster up
a false case of settlement, the defendants had forged the receipt
dishonestly claiming that a sum of Rs. 6,00,000/- was paid to the
plaintiff in cash.
7. Mr. Nichani laid emphasis on the probabilities of the case. It
was urged that on 4th October, 2021 when the defendants claimed to
have settled the entire dispute by paying a sum of Rs. 6,10,000/-,
the complaints were subjudice before the Magistrate. In such a
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situation, it is inconceivable that the defendants would have made
payment of a huge sum of Rs. 6,00,000/- in cash, without insisting
for the settlement and/or withdrawal and/or composition of the
pending proceedings between the parties.
8. It was further submitted that the endevour of the plaintiff to
send the receipt tendered by the defendants (accused) before the
learned Magistrate for the opinion of the handwriting expert was
stonewalled by the defendants and eventually the said application
came to be rejected. Yet, the plaintiff has obtained the opinion of the
handwriting expert which vouches for the genuineness of the
receipt tendered by the plaintiff and establishes the forgery by
interpolation in the receipts relied upon by the defendants.
9. Mr. Nichani would further urge that since the defendants were
present when the decree was passed by this Court, the decree, can
not be said to have been passed ex-parte. In any event, having failed
to seek the leave to defend the suit, at this juncture, the defendants
can not seek setting aside of the decree.
10. To begin with, uncontroverted facts. The service of the Writ of
Summons on the defendants is incontestable. The defendants
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admittedly entered appearance upon service of Writ of Summons. It
is also indubitable that the Summons for Judgment was served on
the advocate for the defendants. The defendants do not claim to
have sought leave to defend the suit. Mr. Jagtap, the then advocate
for the defendants has put oath behind the statement that he had
not apprised the factum of service of Summons for Judgment to the
defendants and, upon being informed by the defendants that the suit
claim was settled, he was of the opinion that it was not necessary to
file an affidavit seeking leave to defend and it would be suffice to
apprise the Court as and when the Summons for Judgment was
listed before the Court.
11. In this context, it would be appropriate to extract the relevant
part of the order passed by this Court on 24 th February, 2003 in the
Summons for Judgment. It reads as under:-
"The learned counsel for the plaintiff informs
that the defendants have been served with the
summons for judgement on 10-10-2001. He
undertakes to file affidavit of service within one
week from today.
The learned counsel for the defendants states
that according to instructions of the defendants
the entire amount has been paid.
This statement is disputed by the learned
counsel for the plaintiff. He states that only an
amount of Rs. 10,000/- has been paid.
In any case, even it the statement of the
learned counsel for the defendant is correct that
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the entire amount has been paid. The defendants
can produce the receipt at the time of execution of
the decree.
Defendants have not filed any application for
leave to defend the suit nor they filed any affidavit
disclosing the grounds on which leave to defend
can be granted to the defendants. Therefore, in
terms of the provisions of Order 37 Rule 3 of CPC
the plaintiff is entitled to the judgment.
Perused the record. Summons for Judgment
is granted accordingly. Suit is decreed in terms of
clauses of the suit.
While drawing the decree, credit of Rs.
10,000/- be given to the defendants which
according to the plaintiff the defendants have paid
during the pendency of the suit."
12. In the light of the aforesaid order, a submission was sought to
be canvassed on behalf of the plaintiff that the decree can not be
said to have been passed ex-parte and, therefore, a Notice of Motion
to set aside the decree is untenable. I am afraid to accede to this
submission for the reason that it does not appreciate the scope and
ambit of the provision contained in Order XXXVII Rule 4 of the
Code. The submission seeks to constrict the scope of the provision
contained in Order XXXVII Rule 4 of the Code to that of Order IX
Rule 13 of the Code.
13. Rule 4 of the Order XXXVII reads as under:-
"4. Power to set aside decree -
After decree the Court may, under special
circumstances set aside the decree, and if necessary
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stay or set aside execution, and may give leave to the
defendant to appear to the summons and to defend
the suit, if it seems reasonable to the Court so to do,
and on such terms as the Court thinks fit."
14. A careful reading of the afore-extracted rule would indicate
that rule is not confined to setting aside ex-parte decree. The Court
which has passed a decree in a summary suit is vested with the
discretionary jurisdiction to set aside the decree which is not passed
ex-parte under special circumstances. The Court is further
empowered to either stay or set aside the execution and also grant
leave to the defendant to appear to the Summons for Judgment and
defend the suit.
15. A jurisdictional condition for exercise of the discretion under
Rule 4 is the satisfaction of the Court about the existence of "special
circumstances" which warrant setting aside of the decree. The term
"special circumstances" is not susceptible to precise definition. In
the very nature of the things, the existence or otherwise of special
circumstances would largely depend on the facts of a given case.
16. A useful reference in this context can be made to a judgment
of the Supreme Court in the case of Rajni Kumar vs. Suresh Kumar
Malhotra and Another1 wherein the Supreme Court had an occasion
1 (2003) 5 Supreme Court Cases 315.
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to consider the scope and import of Rule 4 of Order XXXVII and the
distinction between the provisions contained in Order XXXVII Rule
4 and Order IX Rule 13, in the matter of the power of the Court to
set aside the decree. The observations of the Court in paragraphs 8,
9 and 11 are instructive and hence extracted below:-
8] A careful reading of Rule 4 shows that it
empowers, under special circumstances, the court
which passed an ex parte decree under Order 37
to set aside the decree and grant one or both of the
following reliefs, if it seems reasonable to the court
so to do and on such terms as the court thinks fit :
(i) to stay or set aside execution and
(ii) to give leave to the defendant (a) to appear to
the summons and (b) to defend the suit.
9] The expression 'special circumstances' is not
defined in the Civil Procedure Code nor is it
capable of any precise definition by the court
because problems of human beings are so varied
and complex. In its ordinary dictionary meaning it
connotes something exceptional in character,
extra-ordinary, significant, uncommon. It is an
antonym of common, ordinary and general. It is
neither practicable nor advisable to enumerate
such circumstances. Non-service of summons will
undoubtedly be a special circumstance. In an
application under Order 37, Rule 4, the court has
to determine the question, on the facts of each
case, as to whether circumstances pleaded are so
unusual or extra ordinary as to justify putting the
clock back by setting aside the decree; to grant
further relief in regard to post-decree matters,
namely, staying or setting aside the execution and
also in regard to pre decree matters viz., to give
leave to the defendant to appear to the summons
and to defend the suit.
... ...............
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11] It is important to note here that the power
under Rule 4 of Order 37 is not confined to setting
aside the ex parte decree, it extends to staying or
setting aside the execution and giving leave to
appear to the summons and to defend the suit. We
may point out that as the very purpose of Order 37
is to ensure an expeditious hearing and disposal of
the suit filed thereunder, Rule 4 empowers the
court to grant leave to the defendant to appear to
summons and defend the suit if the Court
considers it reasonable so to do, on such terms as
court thinks fit in addition to setting aside the
decree. Where on an application, more than one
among the specified reliefs may be granted by the
Court all such reliefs must be claimed in one
application. It is not permissible to claim such
reliefs in successive petitions as it would be
contrary to the letter and spirit of the provision.
That is why where an application under Rule 4 of
Order 37 is filed to set aside a decree either
because the defendant did not appear in response
to summons and limitation expired, or having
appeared, did not apply for leave to defend the suit
in the prescribed period, the court is empowered
to grant leave to defendant to appear to the
summons and to defend the suit in the same
application. It is, therefore, not enough for the
defendant to show special circumstances which
prevented him from appearing or applying for
leave to defend, he has also to show by affidavit or
otherwise, facts which would entitle him leave to
defend the suit. In this respect, Rule 4 of Order 37
is different from Rule 13 of Order 9.
17. The Supreme Court has thus enunciated that when the
defendant seeks setting aside of a decree passed in a summary suit
by invoking the provision contained in Order XXXVII Rule 4, two
conditions are required to be satisfied. First, it is incumbent upon
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the defendant to demonstrate, "special circumstances" which merit
setting aside of the decree. Second, there is further obligation on the
defendant to satisfy the Court that the facts of the case are such
that he is entitled to leave to defend the suit. This additional
requirement stems from the legislative policy of not permitting a
defendant in a suit under Order XXXVII to defend the suit as a
matter of right.
18. On the aforesaid touchstone, reverting to the facts of the case,
it has to be seen whether there exist "special circumstances" and
the defendants are otherwise entitled to leave to defend the suit.
First and foremost, the nature of the order passed by this Court, in
my view, assumes critical significance. While passing the order on
the Summons for Judgment, the Court notes that a statement was
made on behalf of the defendants that the entire amount had been
paid. In controversion, the plaintiff asserted that only a sum of Rs.
10,000/- was paid. Secondly, the Court proceeds to record that even
if it was assumed that the defendants had paid the entire amount, it
was open for the defendants to produce the receipt at the time of
execution of the decree. Thirdly, on account of the default on the
part of the defendants to seek leave to defend, the Court took
recourse to Rule 3 of Order XXXVII to pass the decree. Fourthly,
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taking note of the admission of receipt of a sum of Rs. 10,000/-, the
Court directs that the credit of Rs. 10,000/- be given to the
defendants while drawing the decree.
19. The aforesaid order makes it clear that the stand of the
defendants that there was a settlement between the parties was
made known to the Court. The parties were at issue over the
quantum of the amount paid in persuance of the purported
settlement. It also becomes abundantly clear that the defendants
claimed that they had receipts which acknowledge the payment
and thus the Court observed that, if that was the case, the
defendants could produce the receipt at the stage of execution of the
decree. This part of the direction, in my view, gives a considerable
heft to the submission on behalf of the defendants that the course
suggested by the Court was fraught with infirmity as the executing
Court could not have gone behind the decree.
20. The aforesaid order, in the least, would indicate that on the
day the said order came to be passed settlement there were
negotiation for and the controversy porincipally revolved around
the quantum of the amount, actually paid by the defendants to the
plaintiff towards the same.
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21. The affidavit filed by Mr. Jagtap, the then advocate for the
defendants, if seen through the aforesaid prism, assumes
significance. Had the plaintiff taken a stand that there was no offer
of/ effort at settlement and no payment was made in pursuance
thereof, different considerations would have come into play. The
submission on behalf of the plaintiff that only a sum of Rs. 10,000/-
was paid thus, prima facie, lent credence to the submission on
behalf of the defendants that there efforts to settle the matter out of
Court.
22. Though the learned counsel for the parties made an endevour
to persuade the Court to delve deep into the aspect as to which of
the two receipts, namely, the one evidencing the receipt of a sum of
Rs. 6,10,000/- banked upon by the defendants, and another
evidencing the receipt of a sum of Rs. 10,000/- only pressed into
service by the plaintiff, is forged yet. I do not deem it appropriate to
record a definitive finding on the said core controversy, at this
stage. In the context of the scope of inquiry in the instant
application to set aside the decree, in my view, the question as to
whether the defendants have made out a justifiable ground to do so,
can be determined with reference to the two receipts purportedly
produced by the plaintiff.
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23. In the affidavit in reply to the Notice of Motion, the plaintiff
affirmed that when the defendants had paid a sum of Rs. 10,000/-
only to him and asked him to execute a receipt, he had obtained a
photocopy thereof and the copy annexed to the affidavit in reply
(Exhibit 1) is the said photostate copy. In C.C. No.963/SS/2005, the
plaintiff professed to produce on the record of the Metropolitan
Magistrate Court original receipt dated 14th February, 2002.
24. It is pertinent to note that there is material variance in both
these documents. The receipt tendered before the learned
Magistrate was professedly original typed receipt. In contrast, a
photostate copy of the receipt, which was allegedly obtained by the
plaintiff, was sought to be annexed to the affidavit in reply.
Secondly, the receipt annexed to the affidavit in reply appeared to
be duly stamped, with a part of the signature appearing on the
stamp. Whereas, the receipt tendered before the learned Magistrate
was not duly stamped. Thirdly, the original typed receipt tendered
before the learned Magistrate contains stamp and endorsement of
the defendant No. 1. Copy of the receipt annexed to the affidavit in
reply, does not contain such stamp and endorsement. On a bare
perusal and comparison of the two sets of the documents, relied
upon by the plaintiff himself, the discrepancies are clear and
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explicit. This factor singularly persuades the Court to hold that the
veracity of the competing claims about the genuineness of the
receipts, banked upon by the parties, warrants adjudication.
25. The conspectus of the aforesaid consideration is that the
defendants have succeeded in demonstrating that there were
"special circumstances" which prevented them filing the affidavit
seeking leave to defend. Mr. Jagtap, the then advocate for the
defendants, has categorically affirmed about the circumstances in
which the order came to be passed on 24th February, 2003. The
claim of Mr. Jagtap has not been controverted. The situation to
which Mr. Jagtap adverted is not inconceivable. If that is the case, it
is trite, a party can not be made to suffer for an error of judgment on
the part of an advocate.
26. In any event, in the totality of the circumstances, the question
as to whether there was a settlement out of the Court between the
parties and the plaintiff accepted a sum of Rs. 6,10,000/- in full and
final satisfaction of the suit claim, is a matter which warrants
adjudication. As noted above, the parties differ on the quantum of
the amount paid. Mr. Nichani may be justified in canvassing a
submission that, in the circumstances of the case, it was highly
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improbable for the plaintiff to accept a sum of Rs. 6,10,000/- only
against the entire suit claim. However, that is a matter for trial.
Since which of the receipts is genuine is in the realm of controversy
and the defendants have placed on record two receipts banked upon
by the plaintiff, which are at variance with each other, I am impelled
to hold that the defendants deserve leave to defend the suit.
27. Lastly, since the defendants have deposited a sum of Rs. 3
lakhs pursuant to the order of the appeal Bench, in my view, no
further condition of deposit is required to be imposed. However,
having regard to the time which has elapsed since the institution of
the suit, it may be expedient to stipulate conditions as to time for
completion of trial.
Hence, the following order:
ORDER
1] The Notice of Motion stands allowed in terms of
prayer clauses (a) and (b).
2] The order dated 24th February, 2003 in Summons
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for Judgment No. 1124 of 2001 and the decree stand
set aside.
3] The defendants are granted leave to defend the
suit subject to the condition of continuing the deposit of
the sum of Rs. 3 lakhs till the final disposal of the suit.
4] Hearing of the suit stands expedited.
5] The defendants shall file their written statement
within a period of 30 days from the date of this order.
6] The pre-trial formalities be completed within a
further period of two months.
7] The suit be listed for directions on 26 th April, 2023.
(N. J. JAMADAR, J.)
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