Calcutta High Court
Rashmi Metaliks Limited vs The Owners And Parties Interested on 20 June, 2023
OCD 2
ORDER SHEET
APOT/184/2023
IA NO:GA/1/2023
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
COMMERCIAL DIVISION
RASHMI METALIKS LIMITED
VS
THE OWNERS AND PARTIES INTERESTED
IN THE VESSES M.V. VAN NICE
BEFORE:
The Hon'ble JUSTICE SOUMEN SEN
AND
The Hon'ble JUSTICE UDAY KUMAR
Date: 20th June, 2023.
Appearance:
Mr. Ranjan Bachawat, Sr. Adv.
Mr. Sakya Sen, Adv.
Mr. Subhankar Nag, Adv.
Mr. Chayan Gupta, Adv.
Mr. Avishek Guha, Adv.
Ms. Debarati Das, Adv.
Ms. Akansha Chopra, Adv.
Ms. A. Dutta, Adv.
...for the appellant
Mr. Soumabho Ghose, Adv.
Ms. Tiana Bhattacharya, Adv.
Mr. Sayan Banerjee, Adv.
Mr. Diptendu Acharjee, Adv.
Ms. Riti Basu, Adv.
...for the defendant
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The Court: By consent of the parties, the appeal and the application are
taken up together and disposed of by this common judgment.
The appeal is arising out of an order dated 15th June, 2023 passed by the
learned Single Judge in an admiralty suit dismissing the suit for non-
prosecution. The learned Judge in dismissing the suit had relied upon three
orders dated 6th February, 2023, 10th April, 2023 and 8th June, 2023 to arrive at
a conclusion that these three orders would demonstrate that the plaintiff was not
diligent in proceeding with the suit. The learned Single Judge has placed much
reliance on the order dated 10th April, 2023 in arriving at a conclusion that the
conduct of the appellant is indolent, lackadaisical and shows complete
unpreparedness.
Mr. Ranjan Bachawat, learned senior counsel representing the plaintiff,
submits that the delay in proceeding with the suit is not attributable to the
plaintiff as by reason of change of advocate, sufficient time was not available to
the present Advocate-on-Record to prepare the cause papers and to make the
said suit ready for hearing. The plaintiff, in fact, filed an application for
transferring the suit from Ordinary Original Civil Jurisdiction to Commercial
Division of this Court and on the basis of such application, the suit was
registered as a commercial suit on 10th April, 2023. It is submitted that the three
orders relied upon by the learned Single Judge would not show any lack of
diligence or unprepareness. There may be a delay in complying with the other
provisions of the Commercial Courts Act, 2015 in relation to case management
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but merely because there has been a delay, the suit should not be dismissed for
non-prosecution. It is submitted that there is no provision in the Code of Civil
Procedure, since amended, or in the Commercial Courts Act, 2015 for dismissal
of a suit in such circumstances.
It is submitted that Justice Patherya on 14th September, 2010 being
satisfied with the merits of the matter directed furnishing of bank guarantee in a
subsequent order dated 1st October, 2010. The said bank guarantee has been
renewed from time to time and it is valid till December, 2023. It is submitted that
the defendant had never objected to such extension of the bank guarantee and
had kept the bank guarantee alive. No prejudice would be caused to the
defendant in the event peremptory direction is passed with regard to the conduct
of the trial.
Mr. Soumabho Ghose, learned counsel representing the respondent
submits that in spite of the order dated 11th November, 2016 and several
adjournments obtained by the plaintiff due to unpreparedness disclosures have
not been made. There has been a total lack of diligence on the part of the plaintiff
to proceed with the suit. Our attention is drawn to the order dated 11th
November, 2016 in which lack of instruction was the reason shown by the
learned Advocate representing the appellant for seeking an adjournment. The
learned Single Judge observed that in the event the plaintiff is not represented on
the returnable date, i.e., on 16th December, 2016, the suit may be dismissed.
Other orders have been placed to show that in spite of repeated orders extending
the time for discovery and inspection of the documents of the plaintiff, till date,
the same has not been done. Mr. Ghose submits that the Court has inherent
power to dismiss the suit as it is abuse of the process of law and in this regard he
has relied upon a judgment of the Hon'ble Supreme Court in the case of 'K.K.
Velusamy vs. N. Palanisamy' reported at (2011) 11 SCC 275 at paragraph 21.
There is no dispute that the suit was registered as a commercial suit on
10th April, 2023. After the suit was transferred to the Commercial Division, the
case management mentioned in the Commercial Courts Act is required to be
followed. The plaintiff did not file the statement of truth and Mr. Bachawat has
candidly submitted that documents have not been disclosed as yet. Although it
appears that extension was granted to the plaintiff to disclose documents, till
date no such affidavit of documents has been filed. After the suit was transferred
to the Commercial Division, the plaintiff ought to have followed the case
management procedure for filing the statement of truth and the documents.
However, this is not the ground on which the suit was dismissed for non-
prosecution. The three orders on which reference have been made by the learned
Single Judge do not record that the plaintiff was not diligent to proceed with the
suit after it was marked as a Commercial Suit. However, the past conduct shows
that the plaintiff is not diligent and we have been informed that the plaintiff has
obtained change of advocates five times between 2010 till date, which does not
speak high about the conduct of the plaintiff in proceeding with the suit.
However, the conduct of the plaintiff is to be assessed after the suit was marked
as a commercial suit, in which case, the procedure under the Commercial Courts
Act, 2015 is required to be followed. There has been some initial delay on the
part of the defendant in filing the written statement and also in disclosing the
documents. Mr. Ghose has submitted that earlier two applications have been
filed for release of the bank guarantees. Mr. Ghose also submits that it may not
be equitable to keep the bank guarantee renewed and not to discharge it at this
stage.
However, no effective order was passed in respect of the said two
applications and the bank guarantee was directed to be kept renewed. In view of
the fact that the suit is required to be heard on merits and now the plaintiff has
given an undertaking that it would proceed with the suit diligently and would not
pray for adjournment unless it is unavoidable, the plaintiff, upon furnishing an
unconditional bank guarantee of Rs.1 crore in favour of the Registrar, Original
Side, within a period of three weeks from date initially for a period of one year,
shall be entitled to file statement of truth and discovery of documents within two
weeks thereafter and shall be allowed to proceed with the suit. The bank
guarantee shall be renewed from time to time till the disposal of the suit.
A copy of the unconditional bank guarantee shall be supplied to the
Advocate-on-Record of the defendant after it is filed with the learned Registrar,
Original Side.
The bank guarantee shall be allowed to be invoked in case of lack of due
diligence on the part of the plaintiff in proceeding with the suit with the leave of
the learned Single Judge.
We also make it clear that if the hearing of the suit is delayed due to lack of
diligence on the part of the plaintiff and the delay is attributable to the plaintiff,
the defendant shall be entitled to seek release of the bank guarantee which has
now been kept renewed till December, 2023. Any further renewal of the bank
guarantee furnished by the defendant shall be dependent upon the conduct of
the plaintiff in the suit.
The impugned order dated 15th June, 2023 is set aside.
The appeal and the application are thus disposed of.
However, there shall be no order as to costs.
(SOUMEN SEN, J.)
(UDAY KUMAR, J.)
B.Pal
