M/S. Swarovski India Pvt. Ltd. vs M/S. Spa Agencies & Anr.
2009 Latest Caselaw 2470 Del

*             HIGH COURT OF DELHI AT NEW DELHI

+                     CS (OS) No.1342/2004

                              Date of decision : July 03, 2009

M/S. SWAROVSKI INDIA PVT. LTD.    ..... PLAINTIFF
             Through : Mr. Prag P. Tripathi, Senior
                       Advocate with Mr. Sanjay
                       Grover, Advocate.

                             Versus


M/S. SPA AGENCIES & ANR.       ..... DEFENDANTS
             Through : Mr. J.P.Sengh, Advocate with
                       Mr. Pankaj Kumar, Advocate

%
       CORAM:
       HON'BLE MS. JUSTICE ARUNA SURESH

     (1) Whether reporters of local paper may be
         allowed to see the judgment?

     (2) To be referred to the reporter or not?     Yes

     (3) Whether the judgment should be reported
         in the Digest ?                      Yes

                         JUDGMENT

ARUNA SURESH, J.

IA No.2001/2006 (Order 37 Rule 3(5) CPC) and IA No.2002/2006 (s. 5 of the Limitation Act) in CS (OS) No.1342/2004

1. Plaintiff company has filed the present suit under

Order 37 of the Code of Civil Procedure (hereinafter

referred to as „CPC‟) for recovery of Rs.27,47,587/-

i.e. Rs.20,52,995/- as the principal amount and

Rs.6,94,592/- as interest on the outstanding amount

@ 12% per annum for the period from October,

2001 till 30.9.2004 against the defendant for the

supply of goods against 15 invoices for the period

from October, 2001 to December, 2001 which the

defendant failed to pay despite service of legal

notice dated 24.5.2004.

2. Defendants were duly served with summons for

appearance and they entered appearance.

Thereafter plaintiff filed an application under Order

37 Rule 3 CPC seeking service of summons for

judgment on the defendants. Summons for

judgment were duly served upon the defendants at

their correct address and the defendants put in

their appearance in the court through their counsel

on 6th January, 2006 but no application for leave to

defend the said suit was filed. Defendants took two

adjournments and thereafter filed the applications

under consideration. Both the applications have

been contested by the plaintiff.

IA No.2002/2006

3. This application has been filed under Section 5 of

the Limitation Act seeking condonation of delay in

filing the application under Order 37 Rule 3 (5) CPC

for leave to defend and contest the suit.

4. Defendants have sought condonation of delay in

filing the application for leave to defend contending

inter alia that defendant No.2 was out of station in

the month of January, 2006 and hence was not

aware about the proceedings/summons for

judgment through publication, that when he came

back to India on 13.2.2006 he came to know about

the proceedings through publication published on

6.1.2006 and thereafter he contacted his counsel

and filed an application for grant of leave to defend

and contest the suit, that delay in filing the

application under Order 37 Rule 3(5) CPC is neither

intentional nor deliberate but because of bona fide

reasons of defendant No.2 being out of station and

not aware of the proceedings. Hence, this

application for condonation of delay.

5. Plaintiff has contested this application on various

grounds alleging that defendants were served as far

back as on 17.12.2005 and they could have moved

an application for leave to defend within ten days

thereafter by 27.12.2005, but the application has

been filed after delay of nearly 60 days without any

justification and the same is hopelessly barred by

limitation, that defendant No.2 has not disclosed as

to when he left India and has not enclosed copy of

the pass port to show the date on which he left

India and came back, that defendant No.2 is a

resident of Chennai and the affidavit has been

prepared and sworn in Delhi whereas defendant

No.2 has not disclosed when he came to Delhi, that

there was no publication at all in this case nor there

was any order of publication and therefore the

defendant No.2 has made a false statement that he

came to know about summons through publication

published on 6.1.2006, that defendants had been

served on 17.12.2005 and remained silent till the

filing of this application, that delay is willful and

deliberate and defendants all along been were

aware of the proceedings through their advocate

who was appearing in this case therefore, this

application deserves dismissal with costs and the

plaintiff is entitled to a decree under Order 37 CPC

for the amount claimed.

6. I have heard Mr. Prag P. Tripathi, Senior counsel for

the plaintiff, Mr. J.P.Sengh learned counsel for the

defendants and have perused the file carefully.

7. After receipt of summons for appearance,

defendants filed their appearance under order 37

Rule 3 (1) CPC on 5.2.2005. Plaintiff filed

application under Order 37 Rule 3(4) CPC for

issuance of summons for judgment upon the

defendants on 15.2.2005. Since defendants had

changed their address, summons for judgment

could not be served upon them when issued by the

court. Thereafter, the plaintiff filed correct and new

address of the defendants by way of IA

No.9526/2005 under Order 5 Rule 17 & 20 CPC.

8. Summons for judgment were accordingly ordered to

be issued upon the defendants at their new address

on 28.11.2005 and the matter was listed for

6.1.2006.

9. Perusal of the record indicates that defendants were

served through approved courier service „Blazeflash

Couriers Limited‟ with summons for judgment on

17.12.2005. The sender copies are enclosed with an

affidavit of service of Shir Sanjeev Kumar, the court

clerk of the counsel for the plaintiff. Defendant

No.2 also received summons for judgment vide

registered AD card on 17.12.2005 at 1.30 P.M.

Defendant No.2 is either a proprietor or partner of

defendant No.1. Thus, it is clear from the record

that defendants were duly served with summons for

judgment on 17.12.2005. Defendants were

required to file their application for leave to defend

the present suit within ten days of the service of

summons for judgment upon them.

10. Admittedly, the defendants did not file any

application seeking leave to defend and contest the

suit within the prescribed period of ten days. The

application was filed only on 14.2.2006 i.e. almost

about two months of the service of summons for

judgment upon them.

11. In the application, the defendants have pleaded that

they came to know of the service of summons for

judgment through publication published on

6.1.2006 on 13.2.2006 as defendant No.2 was out

of India in the month of January. It is pertinent to

mention here that the defendants have not

mentioned the name of the paper in which the

summons for judgment of this case were allegedly

published on 6.1.2006 nor any cutting of the

newspaper has been placed on record. Infact,

though an application under Order 5 Rule 17 & 20

CPC was filed by the plaintiff, the court did not order

any service for summons for judgment by way of

publication. The court ordered for service of

summons for judgment on PF and registered AD

cover and through approved courier service at the

new and correct address of the defendants.

Therefore, to my mind, the defendants willfully and

deliberately made a false statement in the

application with a view to misguide the court that

summons for judgment were published on 6.1.2006

in a newspaper.

12. Defendant No.2 has alleged that he was out of India

in January, 2006. The fact remains, summons for

judgment were received by him on 17.12.2005 by

approved courier service as well as by registered

AD card. He was very much in India at the relevant

time and had all the opportunity and time to

contact his Advocate, brief him and ensure that

application for leave to defend and contest the suit

was filed within the period of limitation of ten days.

Besides the defendants have not disclosed as to

when defendant No.2 had left India. He has not

disclosed the destination where he had gone.

13. After receipt of summons for judgment, counsel for

the defendants Mr. Subhash Tagra advocate

appeared in the court on 6.1.2006. Even at that

time there was no mention to the court that

defendant No.2 was out of India and therefore the

defendants needed time to file application for leave

to defend and contest the suit. The matter was

listed for 15.2.2006. Just two days before the said

date, the present application along with other

application under Order 37 Rule 3 (5) CPC for leave

to defend and contest the suit was filed.

14. Under these circumstances, I am of the opinion that

defendants has made every endeavor to misguide

this court by creating the facts and representing

them in such a manner which when read left an

impression on the court‟s mind that it was because

of just and bonafide reasons that the defendants

could not file their application for leave to defend

and contest the suit within the prescribed period of

ten days. However, when read properly in the

context of the record, it is obvious that the

defendants were properly served on 17.12.2005 but

deliberately delayed the filing of the application

under Order 37 Rule 3 (5) CPC with a view to delay

the proceedings of the case.

15. Under Order 37 Rule 3 (7) CPC court has the power

to excuse the delay of the defendants in entering

the appearance and applying for leave to defend

the suit if sufficient cause is shown by the

defendant. Order 37 is a complete Code in itself and

it does not need any assistance of Section 5 of the

Limitation Act for condonation of delay.

16. Section 5 of the Limitation Act is a discretion which

the court can exercise in the way in which judicial

power and discretion ought to be exercised upon

principles which are well understood. The words

'sufficient cause' in Order 37 (3) (7) CPC receives a

liberal construction so as to advance substantial

justice when no negligence nor inaction nor want of

bona fide is imputable to the application. In 'DCM

Finance Services Limited vs. Khaitan

Hostombe Spinels Ltd., 75 (1998) Delhi Law

Times 629', it has been held that the test whether

or not a cause is sufficient is to see whether delay

could have been avoided by the party seeking

condonation by exercise of due care and attention

as nothing could be deemed to be done bona fide

and in good faith which is not done in due care and

attention. It was observed:-

"7. The contents of the application filed by the defendant under Section 5 of the Limitation Act would abundantly and clearly prove and establish that instead of explaining the cause for the delay not to speak of proving sufficient cause for condonation of delay the defendant sought to assert that its appearance was within time of 10 days as provided for under rule 3 of Order XXXVII as the summons were not served on the defendant. The aforesaid assertion of the plaintiff was negatived both by the order dated 5.8.1997 passed by this court and order dated 12.1.1998 passed by a Division Bench of this Court. The aforesaid assertion of the defendant that the summons were not served on the defendant and that appearance had been made within 10 days of coming to know about the pendency of the case, was found to be incorrect and contradicted by the documents available on record. The defendant has failed to plead any cause much less sufficient cause for the delay in making appearance in the court in terms of Rule 3 of Order XXXVII CPC. No Explanation is forthcoming from the defendant about the reasons and grounds for the delay in making appearance. The test whether or not a cause is sufficient is to see whether it could have been avoided by the party by the exercise of due care and attention as nothing shall be deemed to be done bonafide or in good faith which is not done with due care and attention. In order to find out and adjudge whether there is sufficient cause or not to condone the delay there should have been pleadings in the application giving reasons and

grounds and making out a case of sufficient cause for the delay in making appearance in the court. In the absence of any such pleading this court is not in a position to hold that the defendant was prevented by sufficient cause in making appearance in the case in terms of rule 3 of Order XXXVII CPC. Thus the application filed by the defendant under Section 5 of the Limitation Act and registered as I.A. 11951/1996 stands rejected."

17. Reference is also made to 'Escorts Fiance ltd. vs.

Nielcon Ltd. & Anr., 2000 (55) DRJ' and 'Rane

Parkash & Ors. vs. Central Bank of India, 105

(2003) Delhi Law Times 373'.

18. Coming back to the present case it was for the

defendants who sought condonation of delay in

filing the leave to defend application to explain

each days delay and making certain delayed and

imaginary grounds cannot be considered sufficient

for condonation of delay in the present case.

19. As discussed above liberal construction to 'sufficient

cause' in this case is not available to defendant

No.2 because he was negligent and inactive in

taking appropriate steps for compliance of

summons for judgment.

20. As discussed above, there is lack of bona fide on the

part of defendant No.2. He is also responsible for

his carelessness, want of due diligence and

therefore cannot claim the shelter of liberal

interpretation of „sufficient cause‟. The provisions

of order 37 are special enactment which apply to

certain categories of cases specified therein. This

provision has been enacted with an object that the

defendants do not unnecessarily prolong litigation

and prevent the plaintiff from obtaining early

decree in a case falling within the ambit of the said

decision where speedy decisions are desirable in

the interest of trade and commerce.

21. Hence, from the discussion as above, I conclude

that defendants have not been able to explain

sufficient cause in not filing the application for leave

to defend within the prescribed period of limitation.

The delay is attributable to their own malafides,

lack of diligence and indifferent attitude to the

summons received by them. The delay is not only of

few days but is of about three months. Therefore, I

find no merits in the application and the same is

accordingly dismissed.

IA No.2001/2006 (Order 37 Rule 3(5) CPC) in CS (OS) No.1342/2004

In view of my discussion in IA No.2002/2006

(delay), the application for leave to defend and contest

the suit being barred by period of limitation is hereby

dismissed.

CS (OS) No.1342/2004

1. Since application of the defendants for leave to

defendant is dismissed being barred by period of

limitation, plaintiff is entitled to the decree for the

principal amount as prayed for. Since as per the

averments in the plaint itself, admittedly, there is no

agreement between the parties that the defendants shall

be liable to pay interest @ 12% if the payment was not

made in time, plaintiff is not entitled to any interest as

claimed.

2. Hence, I hereby pass a decree for Rs.20,52,995/-

with proportionate costs in favour of the plaintiff and

against the defendants. Plaintiff is awarded interest

pendent lite and future interest on the said principal

amount @ 12% per annum from the date of the

institution of the suit till realization of the decretal

amount.

3. Decree sheet be prepared accordingly.

ARUNA SURESH (JUDGE) JULY 03, 2009 vk