Delhi High Court
True Fab Pvt. Ltd. vs Steel Mongers (India) Pvt. Ltd. on 25 May, 2006
Author: S Kumar
Bench: S Kumar, S Bhayana
JUDGMENT
Swatanter Kumar, J.
1. The plaintiff(in suit)/respondent in this appeal filed a suit under Order 37 for recovery of Rs. 19,41,586/-. The respondent, M/s. Steel Mongers (India) Pvt. Ltd., is a company dealing in iron and steel products. The appellant/defendant (in suit), M/s. True Fab Private Limited, had approached the respondent for purchase of raw materials known as HR Sheets @ Rs. 17500/- per metric tonne on 30 days credit. The price was negotiated and vide purchase order dated 20.7.2001, the respondent supplied the raw materials. These goods were supplied vide three invoices dated 23.7.2001, 28.7.2001 and 3.8.2001. Total value of the materials purchased was Rs. 13,63,456/-. In discharge of its liabilities, the appellant had issued two cheques; one was for a sum of Rs. 1 lakh and the other one was for a sum of Rs. 12,63,456/- dated 21.8.2001 both drawn on Oriental Bank of Commerce, Sector-7, Faridabad. These cheques were dishonoured on presentation resulting in filing of the suit as well as a complaint under Section 138/141 of the Negotiable Instruments Act.
2. Summons under the provisions of Order 37 of the Code of Civil Procedure (for short 'CPC') were issued to the appellant which filed an application for leave to defend. This application was allowed by the learned Trial Court vide its order dated 21.8.2001 and the appellant was granted leave to defend, subject to depositing a sum of Rs. 19,00,000/- (19 Lacs) in the court within a period of 15 days from the date of the order. The amount was not deposited and even the written statement was not filed despite orders of the Trial Court dated 21.9.2004, 1.10.2004 and grant of last and final opportunity vide order dated 18.10.2004 The counsel appearing for the appellant made a statement before the Trial Court that he was not receiving any instructions from his clients. He was discharged and the case was listed for ex-parte evidence on 9.4.2004 Subsequently, the appellant filed an application under Order 7 Rule 9 of the CPC for recalling the ex parte proceedings and permitting the appellant to participate in the suit. This application was opposed by the respondent. The learned Trial Court vide its order dated 14.10.2005 dismissed the said application and further observed that as the defendant had not complied with the order dated 21.8.2004, a decree in favor of the plaintiff and against the defendant be passed. This order was passed by the court on 14.2.2005 wherein it passed a decree for a sum of Rs. 19,41,586/- together with interest @ 18% per annum till the date of realisation.
3. Against the judgment and decree dated 14.2.2005, the appellant filed the present appeal. It may be noticed here that against the order dated 21.8.2001 granting conditional leave to the appellant to contest the suit the appellant had filed a Civil Miscellaneous (Main) No. 1191/2004 in the High Court of Delhi and when the said petition came up for hearing on 10.9.2004, the Court passed the following order:
10.09.2004
Present : Mr. B.L. Wali for the petitioner.
CM No. 11315/2004
Allowed, subject to all exceptions.
CM (M) No. 1191/2004
Notice be issued to the respondent to show cause as to why this petition be not admitted, returnable on 6th December, 2004
CM No. 11314/2004
Notice for 6th December, 2004
The petitioner will furnish Bank guarantee in th sum of Rs. 19 lacs in the Court within four weeks from today in the meantime the direction to deposit the said amount in cash shall remain in abeyance.
dusty.
4. It is not disputed before us that after passing of the above order, the appellant had furnished a bank guarantee before the Trial Court. However, according to the counsel appearing for the respondent, the bank guarantee is not proper and does not deserve to be accepted by the Court. This is not a question which will be gone into by this Court. It is for the learned Trial Court to accept or reject the bank guarantee in its discretion. Suffices it to note that during the course of hearing, the learned Counsel appearing for the parties commonly conceded that an opportunity could be granted to the appellant to defend the suit, subject to acceptance of the bank guarantee and such other remedies as the court may direct. It may be noticed that when the present appeal came up for hearing before the Court on 1.2.2006, after hearing the learned Counsel appearing for the parties by a detailed order the judgment and decree of the Trial Court was set aside while imposing a cost of Rs. 5000/- and an opportunity was granted to the appellant for filing the written statement and the bank guarantee for a sum of Rs. 19 lacs. In pursuance to this order, the appellant furnished the bank guarantee before the trial court as well as is stated to have filed the written statement but the same has not been taken on record by the trial court as they were not filed within the period of four weeks from the date of the passing of the order. This resulted in filing of the present application i.e. CM No. 4111/2006 praying for extension of time.
5. Without going into the merits of the present appeal in view of the common stand taken by the counsel appearing for the parties and particularly in view of the fact that the decree under appeal is a consequence of default of non-deposit of Rs. 19 lacs and non-filing of the written statement, it will be appropriate to dispose of this appeal in the following terms, which by and large, have been agreed to by the counsel for the parties:
(a) The judgment and decree of the Trial Court stands set aside in terms of the order of the Division Bench dated 1.2.2006.
(b) Time of filing the bank guarantee as well as the written statement is extended. The bank guarantee would be looked into by the trial court on the next date of hearing i.e. 25.5.2006, and in its discretion it would pass such appropriate orders as are required in accordance with law
(c) On that date (25.5.2006) the written statement, if already filed by the appellant would be taken on record and it is made clear that no further opportunity would be allowed by the trial court in that regard. If the written statement is filed on that date the suit shall proceed in accordance with law and if no written statement is filed, the decree dated 14.2.2005, passed by the Trial Court, shall stand restored and the present appeal of the appellant, against the said judgment and decree would be deemed to have been dismissed.
6. In view of the above, the application of the appellant is allowed. Accordingly, the application as well as the appeal stand disposed of in the above terms. The appellant shall pay a sum of Rs. 3000/- as costs, in addition to the cost imposed vide order dated 1.2.2006, for causing delay in progress of the suit.
7. Parties are directed to appeal before the Trial Court on 25.5.2006.
