G. Runghen & Co. vs Shri Surender Nanda, Proprietor, ...
2002 Latest Caselaw 1486 Del

JUDGMENT

S. Mukerjee, J.

IA 3345/2001

1. This is an application on behalf of defendant No. 1 for condensation of delay in filing the leave to defend application. From the order sheets, it appears that the attention of the Court was not dawn by either of the parties, to the requirement for the application for condensation of delay to be decided prior to the application for leave to contest.

2. Both the parties argued the leave to contest on merits before me, and keeping in view this aspect of the matter, and without going into any further details, I consider it appropriate to allow the application seeking condensation of delay, be treating the application IA No. 3344/2001 as warranting consideration on merits of the prayer for leave to contest. IA No.3345/2001 is allowed accordingly.

IA 3344/2001 in Suit No. 280/90

3. This summary suit for recovery of Rs. 16,966,54.04/-, being the amount equivalent to USD 41,081.20/-. has been instituted by the plaintiff which is incorporated company of Mauritius, engaged in the business of supplying of Heavy Melting Scrap and Scrap Brass Tubes.

4. The defendant No. 1 is the sole proprietor of business in Scrap being carried out in the trading name of M/s. Nanda Bros. Defendant No. 2 one M/s. United Western Bank Limited, are a proforma party.

5. This summary suit is based upon a negotiable instrument in the form of Bill of exchange drawn by the plaintiff company upon defendant No.1 and which was duly accepted by the said defendant for payment. The said Bill of Exchange was payable at the order of the plaintiff banker viz namely Mauritius Commercial Bank Limited. The plaintiff Bank further transferred the documents to United Western Bank Ltd. (Defendant No. 2) for collecting the payments on behalf of Plaintiff. It is for this reason that the United Western Bank Ltd. has been made a proforma party for effective adjudication of disputes arising in the Suit.

6. M/s United Western Bank Limited are otherwise a proforma party since no relief has been claimed against them.

7. The case of the plaintiff company is that during the month of November,1996 on the request of defendant No. 1, the plaintiff supplied to the said defendant No. 1 material in the form of Heavy Melting Scrap through various shipments and also raised invoices for these supplies.

8. Plaintiff company effect those transactions through M/s Mauritius Commercial Bank Limited, who in turn authorised United Esetern Bank Limited (defendant No. 2), for collecting the payment under the Bill of Exchange on behalf of Mauritius Bank and the plaintiff.

9. On each occasion, intimation of supply of material was being sent to defendant No. 1 who then used to get original documents released from their bankers (viz defendant No. 2). On the basis of these original documents so taken from defendant No. 2 the defendant No. 1 used to take delivery of the goods.

10. Defendant No. 1 also accepted the Bill of Exchange drawn on them for payment according to the respective tenure of their respective due dates of payment. In particular Bill of Exchange dated 12.11.96 for USD 30,261.55/-, with due date 9th February 1997, was accepted by defendant No. 1.

11. It is the case of the plaintiff that while admitting the liability, the defendant No. 1 however failed to make payment of the above said Bill of Exchange.

12. The plaintiff sent legal notice by Regd. A.D. post to defendant No. 1, which notice is dated 24.7.98 calling upon the defendant No. 1 to make payment of USD 30, 26155. The defendant No. 1, it is stated despite receiving the said notice failed to reply to the same and also failed to make payment of the amount forming subject matter of the said legal notice.

13. In the above circumstances, the plaintiff filed this summary suit for the Bill of Exchange amount of USD 30,261/55, at the exchange rate of Rs. 41 being equal to USD 1 totalling Rs. 12,49,807.02/- plus interest thereon @ 18% under Section 80 of the Negotiable Instruments Act. from the date on which the payment fell due, viz., 9.2.97 till the date of filing of the suit i.e. till 1st February 1999, coming to interest dues of Rs. 4,46,847.02/-, totalling thus in all the present summary suit amount of Rs. 16,96,654.04/-. Interest on suit amount was claimed @ 18% claimed @ 18% pendente lite and future till the date of payment.

14. Defendant No. 1 has filed an application for leave to contest application under Order 37 Rule 3(5) read with Section 151 of CPC seeking leave to contest the suit. Basically the ground on which leave to contest is sought, is the stand that the transactions of defendant No. 1 with the plaintiff company, were allegedly through one Goenka & Company based in Jamrudpur, Kailash Colony New Delhi- 110048, to whom allegedly has been paid the entire actual outstanding amount.

15. It is alleged that the said Goenka & Company was an agent of plaintiff in India and that all supplies made by the plaintiff to the defendant No. 1, were on the instructions of M/s Goenka & Company, and payment for the same was always settled with M/s Goenka & Company.

16. The further case of the defendant No.1 is that when the Heavy Melting Scrap was received it was found to be " lacking in quality and also in quantity ", about which allegedly complaint was made to M/s. S.N. Goenka & Company. The further contention of defendant No. 1 is that since the alleged problem could not be sorted out by M/s S.N. Goenka & Company, the defendant No. 1 decided to finish all dealings with the said M/s Goenka and Company by making the payment to them.

17. Thereafter the following averment is made in the leave to contest affidavit.:

"It is submitted that besides other payments a payment of Rs. 10 lakh in cash was made by me to the said M/s S.N. Goenka and Company and which payment was made to square the liability of supply, which the subject matter of the suit."

18. Defendant No. 1 further took the stand that later to the suit transaction, he received a letter dated 19th May 1997, enclosing documents relating to shipments of three containers of "HMS" and that when he brought the same to the notice of M/s S.N. Goenka & Company, one Ms. Shashi Malhotra of the said M/s Goenka & Company, took over those documents and assured that they would handle the matter directly with the plaintiff.

19. The suggestion of defendant No. 1 is that sending of further consignment later in 1997, is itself a corroboration of defendant stand that the matter stood specifically resolved, otherwise why would further consignment to be sent to defendant No. 1.

20. The defendant No. 1 further case is that some disputes having arisen between plaintiff and said M/s Goenka & Company, the defendant No. 1 is being made the scapegoat.

21. The plaintiff filed reply to the application and affidavit seeking leave to contest. In the said reply, a categorical stand was taken to the effect that a false story has been set up by involving one M/s Goenka & Company, who have nothing to do with the facts of the case. The invokes were raised directly upon defendant No. 1 and the goods were also supplied to defendant No. 1 and that it was defendant No. 1 who had accepted the Bill of exchange for USD 30 261.55 and who had obtained the original documents from defendant No. 2 bank for taking he delivery of the material.

22. It is also denied categorically by the plaintiff that M/s Goenka & Company at all were the agents of the plaintiff in India. The plaintiff categorically states that it had nothing to do with the M/s Goenka & Co. and they were not working for the plaintiff. It is also denied that any accounts were settled with M/s Goenka & Company. It is further pointed out that the fact that defendant No. 1 kept on accepting supplies from plaintiff, goes to show that there was no grievance regarding either of the quantity or quality, and that a false allegation of settlement of account, has bene made vis-a-vis one M/s S.N. Goenka & Company who has no concern whatsoever with the plaintiff.

23. The above said reply of the plaintiff was filed on 13.2.2002, where after the matter came up on 11.3.2002 when defendant No. 1 sought time to file rejoinder. Time of four weeks was granted. However even till 29th July, 2002, no rejoinder was filed. On 29.7.2002 the matter was heard are orders reserved.

24. The defendant No. 1 has set up a totally implausible and moonshine defense. The entire averments of defendant No. 1 are vague and lacking in material particulars.

25. Defendant No. 1 is to be taken to have admitted, by not disputing, the following aspects:-

(i) The Bill of Exchange for USD 31, 261.55/- was accepted by the plaintiff;

(ii) The documents covering the said goods, had been handed over to defendant No. 1 by defendant No. 2 bank, and the goods were actually collected on the basis of those original documents which were sent through the said bank;

(iii) A legal notice of demand dated 24.7.98 was served upon defendant No. 1 to which neither compliance was made nor even replies filed;

26. Furthermore a perusal of the affidavit seeking leave to contest reveals that through in para 8 a bald averment of 'lacking in quality and quantity; is made, yet no details are mentioned regarding the extent of quality and quantity problems therein, or the effect of the same on reducing the value of the accepted Bill of Exchange. Similar is the position regarding the allegation that there was demurrage, wharfage etc. to be settled as alleged in the leave to defend.

27. In paras 10 and 11, the averments are made regarding final settlement of the outstanding by making payment of Rs. 10 lakh in cash to M/s Goenka & Company. Again there are no particulars regarding the date of alleged payment or of settlement of account or any credible details thereof.

28. It is also unbelievable that a huge amount of Rs. 10 lakh will be paid in cash, and that too in relation to a transaction in relation to which the defendant No. 1 himself claims, that there was lack of commercial understanding between defendant No. 1 and the said M/s S.N. Goenka & Company.

29. It is equally unbelievable that defendant No. 1 would not have forwarded or sent at that time contemporaneously an intimation of the final settlement to the actual person concerned, viz the plaintiff in whose favor defendant No. 1 had accepted the Bill of Exchange for a large amount of USD 30, 261/55.

30. Above all, the total silence of defendant No. 1 regarding the accepted Bill of Exchange and in relation to the legal notice, in the entire body of application/ affidavit seeking leave to contest, are very strong pointers to the defense being concocted and/or moonshine.

31. The non-filing of rejoinder to the reply affidavit by the plaintiff company categorically denying the contentions of defendant No. 1, more so when opportunity was sought by defendant No. 1 himself for the said purpose, but rejoinder was neither field in the period of four weeks which had been granted nor even thereafter during the further period of about three months which elapsed, it would follow that the reply of plaintiff to the leave to contest application/affidavit, thus stands unrebutted.

32. There is also no dispute regarding the liability to pay interest, or about the rate or for that matter period of the interest.

33. In view of the above, and in terms of the judgment of the Supreme Court in Raj Duggal v. Ramesh Kumar Bansal; and Mechalec Engineers and Manufacturers v. Basic Equipment Corporation; it is directed that conditional upon defendant depositing in this Court an amount of Rs. 16,968,54.04/-, or upon furnishing latest within four weeks a bank guarantee for the said amount from a nationalised bank to the satisfaction of the Registrar General of this Court and also filing the written statement within the same time, the defendant No. 1 will be entitled to contest the summary, suit, and not otherwise. In case the deposit in the Court or furnishing of bank guarantee to the satisfaction of the Registrar of this Court, is not carried out within a period of our weeks from the date of this order, the said non-compliance with the conditional order of this Court, will result in the leave to defend application and affidavit being deemed to have been dismissed and thereupon decree in the sums of Rs. 16,66,954.04/- Along with interest pendente lite and future @ 18% with costs stand granted in favor of the plaintiff and against the defendant No. 1.

The application stands disposed of.

IA 523/2001

34. This is an application for leave to contest on behalf of defendant No. 1 Bank. The said bank is only a proforma party. No relief is claimed against the said bank. Vide my earlier orders passed today in IA No. 3344/2001, I have granted conditional leave to contest to defendant No. 1 keeping in view the same, and the absence of any relief claimed against defendant No. 2 the said defendant No. 2 is also granted leave to contest the summary suit being a proforma party, which will however be subject to the direction that in the event of non-compliance by defendant No. 1 with the conditional order passed one defendant No. 1 application in that eventuality the suit shall become liable to be decreed and upon the suit getting so concluded, the defendant No. 2 being only a proforma party, will thereupon have no necessity to contest the same.

Application stands disposed of.

SUIT NO. 280/99

List of 1st October, 2002 for directions.