Delhi High Court
Naveen Sangari vs Escorts Ltd. on 12 April, 2013
Author: Rajiv Sahai Endlaw
*IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 12th April, 2013
+ CS(OS) No.2403/2010
NAVEEN SANGARI ..... Plaintiff
Through: Mr. Suhail Dutt, Sr. Adv. with Mr.
R.S. Mittal, Adv.
Versus
ESCORTS LTD. ..... Defendant
Through: Mr. Ravinder Sethi, Sr. Adv. with
Mr. Simran Mehta & Ms. Yogita
Sunaria, Advs.
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
RAJIV SAHAI ENDLAW, J
1. The plaintiff has instituted this suit under Order 37 of the CPC for
recovery of Rs.53,06,208/- together with interest at the rate of 15% per
annum from the date of institution of the suit till realization, pleading:
(i) that the plaintiff served the defendant Company for 27 years
in different capacities and ultimately resigned on
14.12.2007;
(ii) that the plaintiff in the resignation letter dated 14.12.2007 as
well as subsequently requested the defendant to settle his
employment dues but the same have not been settled;
CS(OS) No.2403/2010 Page 1 of 12
(iii) the details of employment dues as on 30.09.2010 are as
under:
"Monthly Package
Basic Pay at the time of resignation 63250.00
HRA (70% of Basic Pay) 44275.00
Superannuation Allowance 9487.00
Special Allowance 30000.00
Professional Allowance 14350.00
Medical 5339.00
Entertainment Allowance 3500.00
Car Substitution Allowance 32000.00
-----------
Total 202201.00
DETAILED CALCULATION OF DUES
1. Salary for 14 days (Above Total
x 14/31) 91316.00
2. LTA (two months' basic salary) 126500.00
3. Leave Encashment 210 days
(basic salary) 442750.00
4. Gratuity (basic pay x 17/30) x
Years of Service (25 years) 896042.00
5. Superannuation (15% salary
contribution per month by company) 1800000.00
6. Key Man Policy (Endowment Policy
Premium Rs.21,664/PA) 400000.00
--------------
Dues 37,56,608/-
Plus: 15% per annum simple interest on
Rs.37,56,608/- from January 1, 2008
to September 30, 2010 (33 months) 15,49,600/-
---------------
TOTAL DUES AS ON SEPTEMBER 30, 2010 53,06,208/-
----------------
(iv) that the defendant, in order to evade its aforesaid liability,
has filed CS(OS) No.2252/2007 alleging the plaintiff to be
guilty of taking away the know-how and technology of the
defendant and carrying on the competitive parallel business;
and,
(v) that the suit is based on a written employment contract dated
09.09.1982, written amendments / revisions thereto by the
defendant from time to time including by letters dated
12.10.1998, 16.09.1999, 25.12.2000, 20.07.2001,
01.08.2002, 07.10.2003, 17.08.2004, 18.10.2005 and
17.07.2007 and the written employment policies of the
defendant Company applicable to the employees.
2. The defendant has sought leave to defend on the grounds:
(i) that CS(OS) No.2252/2007 against the plaintiff was
filed one month before the alleged resignation of the
plaintiff and upon discovering that the plaintiff in
blatant violation of contract of his employment had set
up a business parallel to that of the defendant, while
still in employment of the defendant;
(ii) that the plaintiff for setting up of the said business, has
utilized the confidential technical information and
know-how of the defendant and had entered into direct
negotiations with the foreign collaborators of the
defendants and had weaned away the key employees of
the defendant and also siphoned away the monies of
the defendant;
(iii) that only after coming to know of the filing of the said
suit and ex parte ad interim injunction against him, the
plaintiff hurriedly as an afterthought and with a view to
evade further action by the defendant, tendered his
resignation, without handing over charge and absented
from duty without permission; and,
(iv) that the plaintiff, in the plaint, has suppressed all the
aforesaid facts.
3. The senior counsel for the plaintiff has argued that the only ground
on which the defendant has sought leave is of the defendant's counter
claim against the plaintiff and the defendant else in the leave to defend
application has not controverted the claim in the suit. Reliance is placed
on Bramec Suri P. Ltd. Vs. Suri Smith Chem MANU/DE/0221/1980,
Punjab & Sind Bank Vs. S.K. Tulshan (1992) 74 Company Cases 788
and Deutsche Ranco GMBH Vs. Mohan Murti 52 (1993) DLT 288 to
contend that merely because the defendant may have a counter claim
against the plaintiff is no ground to grant leave to defend. Reliance is
further placed on Rajinder Kumar Khanna Vs. Oriental Insurance Co.
AIR 1990 Delhi 278 laying down that a suit under Order 37 is
maintainable even where the sum claimed can be arrived at by
arithmetical calculation.
4. It has been enquired from the senior counsel for the plaintiff as to
how the suit is maintainable under Order 37 and whether not, even in the
absence of a leave to defend, it is incumbent upon the Court to, before
passing a decree under Order 37, satisfy itself of the maintainability of
the suit thereunder.
5. The senior counsel for the plaintiff has argued that the defendant in
the present case has filed the application for leave to defend and has not
taken any such plea and the plaintiff is thus entitled to a decree.
6. I am unable to agree. Order 37 is intended to be an exception to
the ordinary adversarial adjudicatory process adopted in this country and
in which process certain delays owing to the requirement of giving
opportunity of being heard and lead evidence are implicit. The legislature
being probably of the view that where the suit is only for recovery of
money on the basis inter alia of a document, the ordinary adversarial
adjudicatory procedure be not automatically followed unless the
defendant discloses a substantial defence, enacted Order 37. However the
procedure prescribed under Order 37 can be adopted only when the suit
falls within the ambit of the said provision and not otherwise. Merely
because a claim has reference to a document would not make the suit fall
under Order 37.
7. The senior counsel for the plaintiff has thus been asked to satisfy as
to from which document the entitlement of the plaintiff to the amounts
aforesaid under various heads as listed out hereinabove can be
deciphered.
8. The senior counsel for the plaintiff has invited attention only to the
letter dated 17.07.2007 of the defendant to the plaintiff filed at serial no.5
of the list of documents dated 25.11.2010 filed by the plaintiff and
particularly to page no.18 thereof.
9. Page 18 is not signed by any party. There is nothing in the letter
dated 17.07.2007 at page no.17 to indicate that there is any annexure
thereto. The plaintiff has subsequently under list of documents dated
02.12.2010 filed original of the said letter and the original of the
corresponding page no.18 is not found to have the writings in hand as
found in the photocopy at page no.18.
10. The senior counsel for the defendant has argued that though the
defendant does not dispute the letter dated 17.07.2007 at page no.17 but
disputes page no.18 to be part of the said letter.
11. The senior counsel for the plaintiff argues that no such plea has
been taken in the application for leave to defend.
12. Order 37 Rule 3(1) requires service on the defendant not only of
plaint but also of annexures thereof i.e. the documents filed by the
plaintiff along with the plaint. It is not in dispute that the list of
documents dated 25.11.2010 together with documents was so served
upon the defendant. The said list at serial no.5 refers to the letter dated
17.07.2007 and describes the same as filed at pages no.17 and 18. It is
thus evident that the plaintiff in the plaint and its annexures pleaded the
letter dated 17.07.2007 to be comprising of pages no.17 as well as no.18.
The defendant in the application for leave to defend has not taken a
ground that page no.18 is not a part of the letter at page no.17. It is the
settled position in law that a defendant who applies for leave to defend is
deemed to have admitted the contents of the plaint which are not
controverted in the application for leave to defend. In the face of the
categorical assertion of the plaintiff in the annexures to the plaint that the
letter dated 17.07.2007 comprise of not only page no.17 but also of page
no.18 and non traverse thereof by the defendant, the defendant is deemed
to have admitted the said fact. I am therefore inclined to read page no.18
as part of letter dated 17.07.2007.
13. However that still does not bring the suit under Order 37. The
senior counsel for the plaintiff inspite of being repeatedly asked to
demonstrate the documents in which a contract in writing for the claim
under each and every head can be found, has been unable to do so.
14. Be that as it may, what definitely takes the suit outside the ambit of
Order 37 is the fact that the grant of the decree in favour of the plaintiff is
dependent not only on the agreement in writing for payment of various
allowances vis. HRA, Superannuation Allowance, Special Allowance,
Professional Allowance, Medical, Entertainment Allowance, Car
Substitution Allowance, LTA, Leave Encashment, Gratuity,
Superannuation, Key Man Policy of which payment is stated to be due
but also upon writing as to the period for which the said allowances are
due. The senior counsel for the plaintiff has as such been asked as to
what is the document to show salary of 14 days being due or leave
encashment for 210 days is payable.
15. The senior counsel for the plaintiff is unable to do so.
16. It is worth highlighting that for a suit to be filed under Order 37,
the entire claim in the suit has to be within the ambit of Order 37 and
merely because some of the claims in the suit may satisfy the requirement
of Order 37, is no reason to entertain the suit thereunder.
17. I am therefore unable to hold the suit to be maintainable under
Order 37 of the CPC. Once that is so, the application for leave to defend
becomes inconsequential and is disposed of as infructuous.
18. To complete the record, it may be mentioned that the senior
counsel for the defendant has also argued that under the policy for the
employees of the defendant qua several of the heads under which claim is
made, applications have to be submitted and to be verified and which has
not been done by the plaintiff. It is also argued that in the superannuation
scheme there is no provision for payment of superannuation in the case of
resignation and on which account the plaintiff has claimed a sum of Rs.18
lacs. The senior counsel for the defendant has on the aspect of
maintainability also invited attention to Juki Singapore PTE Ltd. Vs. Jay
Cee Enterprises Pvt. Ltd. 157 (2009) DLT 580 and on the principle for
grant of leave to defend relied on Krishan Kumar Karnani Vs. Reliance
Industries Ltd. 187 (2012) DLT 333 (DB).
19. I may also record that it was the contention of the senior counsel
for the plaintiff that the claims had not been disputed by the defendant
inspite of the legal notices preceding the suit. In response thereto, it was
enquired from the counsels whether the principles of Order 12 Rule 6
could be attracted at the stage of leave to defend. Though no arguments
on this aspect were addressed but I am of the opinion that Order 37
having prescribed a special procedure, if a suit is not found to be
maintainable under Order 12 Rule 6 of the CPC, before giving an
opportunity to file written statement, no decree of admissions also can be
passed. The senior counsel for plaintiff protested that after a thread bare
discussion, the defendant in its written statement will deny everything
which has not been denied in the application for leave to defend.
However that is a risk which a plaintiff, who chooses to file under Order
37, when it is not so maintainable, runs. I may mention that a Division
Bench of this Court in judgment dated 30 th August, 2011 in FAO(OS)
No.128/2011 titled Modipon Ltd. Vs. M/s. Singhal Transport
Corporation held that Order 12 Rule 6 can be invoked in an Order 37
suit, if the suit is maintainable under Order 37. Here, as aforesaid, the
suit is found to be not maintainable under Order 37.
20. Accordingly, the suit is ordered to be treated as an ordinary suit.
21. The defendant to file written statement within four weeks.
Replication within four weeks thereof. The parties to file their documents
along with their pleadings.
22. List before the Joint Registrar on 24 th July, 2013 for admission /
denial of documents and before this Bench on 2 nd September, 2013 for
framing of issues if any.
RAJIV SAHAI ENDLAW, J
APRIL 12, 2013
'gsr'...
