Puneet Miglani vs M/S Surface Finishing Equipment ...
2013 Latest Caselaw 4853 Del

*       IN THE HIGH COURT OF DELHI AT NEW DELHI

+       I.A. No. 14068/2010 (O.37 R.3(5) CPC) IN CS (OS) 1090/2010

%                                                Reserved on: 9th September, 2013
                                                 Decided on: 23rd October, 2013
PUNEET MIGLANI                                                  ..... Plaintiff
                                   Through:   Mr. N.K. Nayyar, Advocate.
                                   versus

M/S SURFACE FINISHING EQUIPMENT
CO & ORS                                      ..... Defendants
                   Through: Mr. R. Singhavi, Advocate.

CORAM:
HON'BLE MS. JUSTICE MUKTA GUPTA

1.

By this application under Order XXXVII Rule 3 (5) CPC the

Defendants seek unconditional leave to defend.

2. Learned counsel for the Defendants/applicants contends that as per

Para-7 of the plaint it is stated that the commission of the Plaintiff was

enhanced to on flat rate of 10% on all products of Defendant No. 1 w.e.f. 1st

November, 2005 on the basis of verbal agreement. For enforcement of the

terms of verbal agreement, no suit under Order XXXVII CPC is

maintainable. Further no invoices or bills of exchange have been filed thus

the present suit is not maintainable under Order XXXVII CPC. The case of

the Plaintiff is based allegedly on the statements of account which show

varying percentage of commission awarded, that is, 5%, 7.5%, 10% thus the

claim of the Plaintiff on the basis of the documents filed itself stands

falsified that the parties verbally settled commission @10% which has not

been awarded to the Plaintiff. Further no documents of the year 2009-2010

have been filed by the Plaintiff to base the claim. All accounts had been

settled between the Plaintiff and the Defendants and that is why no document

of the contemporary period is available. It is an admitted fact that the

Plaintiff had stopped working for the Defendant vide its letter dated 10 th

October, 2008 and all the works referred have come into existence in 2008.

Most of these works have been completed in the year 2010. Certain

agreements relied upon like with Shri Ganesh and COMFMOW PR -1729

were never executed by the Defendants as the work orders of these two

companies stand cancelled. Since the case of the Plaintiff is not based on a

determined liability, the Defendants/applicants are entitled to leave to

defend. Reliance is placed on Bank of India and another vs. Madura Coats

Ltd., 157 (2009) DLT 240 (DB) and Juki Singapore PTE Ltd. vs. Jay Cee

Enterprises Pvt. Ltd. and another, 157 (2009) DLT 580.

3. Learned counsel for the Plaintiff on the other hand contends that the

Plaintiff has relied upon the documents of the Defendants which itself show

that the Plaintiff was entitled to a commission @10%. In view of this

admitted liability, no leave to defend is required to be granted to the

Defendants. The Defendants have concealed material facts, the defence

raised by the Defendants is sham and thus no leave to defend be granted.

Reliance is placed on Mechalec Engineers and Mfr. vs. Basic Equipment

Corporation, 1977 Rajdhani Law Reporter (SC) 184.

4. I have heard learned counsel for the parties.

5. The present suit has been filed by the Plaintiff against the Defendants

under Order XXXVII CPC seeking recovery of Rs. 31,31,210.96 along with

interest @15% per annum on account of the commission earned for the work

done by the Plaintiff. It is stated that the father of the Plaintiff who is the

proprietor of M/s Veetech Associates entered into an agreement dated 17th

July, 1999 with the Defendant No. 2 on behalf of Defendant Nos. 1 and 3 to

5 for procuring orders for various products, equipments being manufactured

by all Defendants. As per the agreement, the Plaintiff was entitled to certain

amount of commission for the various followed up works/orders secured in

Northern Region or other areas. Subsequently by fresh agreement dated 15th

December, 2003 the agreement was extended by Defendant No. 2 on behalf

of all the Defendants. Due to the diligent and hard work put in by the

Plaintiff the business of the Defendants increased manifold and thus the

Defendant No. 2 acting on behalf of Defendant Nos. 1, 3 to 5 happily and

favorably agreed to allow commission at the flat rate of 10% on all products

of Defendant No. 1 w.e.f. 1st November, 2005 on the basis of verbal

agreement and started releasing commission accordingly. However,

thereafter the Defendants curtailed the commission arbitrarily and malafidely

and thus a balance of Rs. 31,31,210.96 is being held back by the Defendants

illegally.

6. A perusal of the plaint itself shows that the agreement of enhancing

the commission between the Plaintiff and Defendant No. 2 on behalf of

Defendant Nos. 1 and 3 to 5 was oral and thus provision of Order XXXVII

Rule 1 (2) (b) is not applicable to the facts of the present case. Further a

perusal of the document filed by the Plaintiff show that for a particular

period in November, 2005 rate of commission of 10% was noted, as also

mentioned vide letter dated 30th November, 2005 however, the commission

statements for the period March, April and July, 2008 etc. show that the rate

of commission has been calculated @5% or 7.5%. In view of the liability

not being acknowledged or the claim not being in pursuance of written

agreement or based on a bill of exchange etc. the plaintiff has not made out a

case for trial under Order XXXVII CPC. Thus, the defendants are required

to be granted unconditional leave to defend. While dealing with the similar

situation, wherein the accounts had to be collated, interpreted and given

effect to, this Court in Juki Singapore PTE Ltd. (supra) held that such a suit

would not fall under Order XXXVII CPC. It was held:

"7. Though the plaint states that the suit is filed under Order 37 of the CPC, as required to be stated under Rule 2 thereof, but it has nowhere been specified as to under which clause specified in Rule1 (2) of Order 37, the suit falls. During the course of arguments, it was argued that the suit was on the basis of the balance amount due on the invoices of sale of goods by the plaintiff to the defendant. Undoubtedly, it has been held by this court that a suit on the basis of such invoices lies under Order 37 of the CPC. However, the present is not a suit on the basis of invoices for the recovery of the amount thereof but is for recovery of balance due on an account between the parties as set out in para 9 of the plaint. The said account besides the invoices contains entries of debits and credits between the parties. Out of the amount due on the said account, the plaintiff claims to have deducted further amounts admitted to be due to the defendant and to have added the amount of another invoice, for which initially the defendant No.2 bank was also claimed to be liable. The matter does not end there; from the order dated 15th December, 2005 (Supra) it seems that certain other entries are there in the said account between the parties of the payments by the defendant to the plaintiff and for the reason whereof the plaintiff dropped the defendant No.2 bank from the array of parties. There is nothing to show as to what is the final amount claimed to be due on the aforesaid accounts between the parties. During the course of the hearing it was stated that a sum of Rs.40,17,000/- was paid during the pendency of the suit. However, there is nothing on record in that respect and ultimately an account may have to be taken of the same also.

8. In my view, a suit for recovery of such an amount does not qualify as a suit under Order 37 of the CPC. A suit, from the averments in the plaint has to fall under Order 37. The averments in the plaint in the present case do not show as to on what written contract the amounts sought to be recovered as a debt or liquidated demand in money is sought to be recovered. No single document has been referred to in the plaint, wherein the suit amount is contained as a debt due from the defendant to the plaintiff.

9. Order 37 of the CPC was intended to be an exception to the ordinary adversorial 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 were implicit. It was thought that where the suit was only for recovery of money on the basis of a document, the genuineness whereof could not be doubted or where owing to the existence of a written document disclosing the amount claimed in the suit, it was expedient to shift the onus to the defendant, it was enacted that the defendant would not be entitled to contest the suit till satisfies the court that he had a defence. However, I find myself unable to apply the said principles to the instant suit. I am unable to deduce from any document or documents the amount due. Merely because the claim is based on documents would not make the suit fall under Order 37 of the CPC. Claims in a large number of suits are based on documents but such suits do not fall under Order 37. Where a large number of documents have to be collated, interpreted and effect thereof to be adjudicated in juxta position of other documents, merely because the suit is based on documents would not make it fall under Order 37 of the CPC. That is the position in the present case."

7. Thus the application is disposed of granting leave to defend to the

Defendants.

CS (OS) 1090/2010

Written statement be filed within four weeks. Replication be filed

within four weeks thereafter.

List before the learned Joint Registrar for completion of pleadings and

admission/denial of the documents on 16th January, 2014.

The matter be placed before this Court for framing of issues on 16th

July, 2014.

(MUKTA GUPTA) JUDGE OCTOBER 23, 2013 'vn'