Maruti Distributor vs Hind Provision Store
2021 Latest Caselaw 15310 Guj

    C/SCA/14483/2021                             ORDER DATED: 29/09/2021




           IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

            R/SPECIAL CIVIL APPLICATION NO. 14483 of 2021

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                        MARUTI DISTRIBUTOR
                              Versus
                       HIND PROVISION STORE
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Appearance:
MR RAJESH K SAVJANI(2225) for the Petitioner(s) No. 1
for the Respondent(s) No. 1
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 CORAM:HONOURABLE MR. JUSTICE B.N. KARIA

                           Date : 29/09/2021

                             ORAL ORDER

By filing present petition, petitioner has requested to quash and set aside the order dated 31.08.2021 passed by the learned Commercial Court, City Civil Court, Ahmedabad below applications Exh. 13 and 16 in Commercial Civil Suit No. 1314 of 2021 (Old Summary suit No. 492 of 2019) .

Having gone through the facts of the present case and documents produced on record, this court deems not fit to issue notice to the respondent.

Heard learned advocate for the petitioner.

It was submitted by learned advocate for the petitioner that the defendant was the firm which was engaged in the retail business and purchasing goods from the plaintiff on 7 to 30 days credit basis. That, during the period of 2018-19, the defendant purchased various products/items of FMCG from

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the petitioner on credit basis on the strength of invoice cum delivery orders and delivery of the said goods was duly acknowledged by respondent-defendant. That, time to time orders were placed with the petitioner and as per orders placed by the defendant, goods were supplied to the defendant by the plaintiff by raising bills for the prices of the products sold and delivered to the defendant. That, a running and mutual account was maintained by the plaintiff in its books of account in the name of the defendant. That, the amounts of credit notes were also raised and the debit notes were also raised and were executed. That, Rs. 9,44,282/- of the plaintiff was due and defendant failed to make full payment towards bills/invoices and hence, for outstanding amount, suit was filed by the plaintiff. It is further argued that learned trial court, without considering the documentary evidence produced on record and aspect of admitted amount due and payable by the defendant, granted unconditional leave to defend and rejected the plaintiff's application for summons for judgment. That, the impugned order is contrary to very object of Order 37 Rule5 of the Code of Civil Procedure, therefore, it is illegal and arbitrary and same is required to be corrected by setting aside. That, unconditional leave to defend as prayed by the defendant cannot be granted by the court below, as it is contrary to the law declared by the Hon'ble Apex court. That, the trial court

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has not considered the material placed on record as well as reply filed by the plaintiff in respect of the application for leave to defend as well as written statement. In support of his arguments, learned advocate for the petitioner has relied upon the judgment passed by the Coordinate Bench of this Court in Special Civil Application No. 19328 of 2018. Learned advocate for the petitioner has requested to admit this petition and quash and set aside the order dated 31.08.2021 passed by the learned Commercial Court, City Civil Court, Ahmedabad below applications Exh. 13 and 16 in Commercial Civil Suit No. 1314 of 2021 (Old Summary suit No. 492 of 2019) Having gone through the facts of the present case and submissions made by learned advocate for the petitioner, averments made by the plaintiffs in the plaint as well as application for summons for judgment and leave to defend submitted by the defendant, it appears that the dispute was raised by the defendant in application Exh. 16 that suit itself is not maintainable under Order 37 Rule 2 of the Code of Civil Procedure and it cannot be entertained as a summary suit. The contentions made by the plaintiff in the suit were denied as well as summons for judgment, raising the dispute of limitation. It appears that statements of accounts produced by the plaintiff were disputed by the defendant and requested to prove by the plaintiff by recording evidence. It was further

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contended that with the bills produced by the plaintiff along with suit, plaintiff has not produced the delivery challan as well as receipt of supplying the goods to transport. Till the bills are proved by the plaintiff, no prayer can be granted by the court. It was also disputed that certain amount was paid by the defendant in cash to the plaintiff but no credit note was issued by the plaintiff nor it was shown in the account statements. Mainly contention was raised by the defendant in respect of the account statements produced by the plaintiff. The trial court, in paragraph no.5 of the order, observed as under:

"From the entire proceedings, ie. the suit filed by the plaintiff, application for summons for judgment and application to leave to defend, it is nowhere admitted by the defendant regarding the claim made by the plaintiff. Under Sub Rule 5 of Rule 3 of Order 37 of the Code of Civil Procedure, if any amount of the claim is admitted by the defendant to be due from him, has to be deposited in the court before the leave to defend the suit can be granted. In the present case, no amount as claimed by the plaintiff was admitted in the application for elave to defend by the defendant."

Hon'ble Apex Court in Civil Appeal No. 6120 of 2019 has framed certain guidelines observing that when the defendants raised triable issues indicating that they have fair

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and reasonable defence, the defendants are ordinarily entitled to unconditional leave to defend. By referring the case of IDBI Trusteeship, the Hon'ble Supreme Court has summarized the principles as to grant of leave in summary suit and held as under:

"17. Accordingly, the principles stated in para 8 of Mechelec case will now stand superseded, given the amendment of Order 37 Rule 3 and the binding decision of four Judges in Milkhiram case, as follows:

17.1 If the defendant satisfies the court that he has a substantial defence, that is, a defence that is likely to succeed, the plaintiff is not entitled to leave to sign judgment, and the defendant is entitled to unconditional leave to defend the suit.

17.2 If the defendant raises triable issues indicating that he has a fair or reasonable defence, although not a positively good defence, the plaintiff is not entitled to sign judgment, and the defendant is ordinarily entitled to unconditional leave to defend.

17.3 Even if the defendant raises triable issues, if a doubt is left with the trial Judge about the defendant's good faith, or the genuineness of the triable issues, the trial Judge may impose conditions both as to time or mode of trial, as well as payment into court or furnishing security. Care must be taken to see that the object of the provisions to assist expeditious disposal of commercial causes is not defeated. Care must also be taken to see that such triable

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issues are not shut out by unduly severe orders as to deposit or security.

17.4 If the defendant raises a defence which is plausible but improbable, the trial Judge may impose conditions as to time or mode of trial, as well as payment into court, or furnishing security. As such a defence does not raise triable issues, conditions as to deposit or security or both can extend to the entire principal sum together with such interest as the court feels the justice of the case requires.

17.5 If the defendant has no substantial defence and/or raises no genuine triable issues, and the court finds such defence to be frivolous or vexatious, then leave to defend the suit shall be refused, and the plaintiff is entitled to judgment forthwith.

17.6 If any part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit, (even if triable issues or a substantial defence is raised), shall not be granted unless the amount so admitted to be due is deposited by the defendant in court." (Underlining added)

In the present case, the defendant has raised the triable issues and as per the opinion of this court, the defendant is entitled to unconditional leave to defend. Prima facie, there is no error committed by the trial court in granting application for leave to defend unconditionally preferred by the defendant as triable issues were raised in respect of the accounts produced by the plaintiff. When the Trial Court is satisfied that

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defendant has substantial defence and he is likely to succeed, plaintiff is not entitled to leave to sign judgment and defendant is entitled to unconditional leave to defend the suit.

Hence, at this juncture, this court is not inclined to accept the prayer of the petitioner and hence, present petition stands dismissed as limine.

(B.N. KARIA, J) K. S. DARJI