Nirma Limited vs Jai Agencies
2023 Latest Caselaw 2416 Guj

     C/SCA/3975/2023                            ORDER DATED: 21/03/2023




           IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

             R/SPECIAL CIVIL APPLICATION NO. 3975 of 2023

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                            NIRMA LIMITED
                                Versus
                            JAI AGENCIES
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Appearance:
SINGHI & CO(2725) for the Petitioner(s) No. 1
ADITYA C YAGNIK(8228) for the Respondent(s) No. 1,2,3,5
JAYANI B SHAH(8495) for the Respondent(s) No. 1,2,3,5
UNSERVED EXPIRED (N) for the Respondent(s) No. 4
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 CORAM:HONOURABLE MR. JUSTICE ASHUTOSH SHASTRI
       and
       HONOURABLE MR. JUSTICE J. C. DOSHI

                           Date : 21/03/2023

                            ORAL ORDER

(PER : HONOURABLE MR. JUSTICE ASHUTOSH SHASTRI)

1. By way of this application under Article 227 of the Constitution of India, the petitioner-original plaintiff has challenged the legality and validity of the order passed by the learned Commercial Court, City Civil Court at Ahmedabad dated 22nd December, 2022 in Commercial Civil Suit No.625 of 2020 and asked for consequential relief. The reliefs, as sought for in the present petition, are as under;

"(a) This Hon'ble Court be pleased to set aside the Order dated 22.12.2022 passed by the Ld. Commercial Court, City Civil Court at

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Ahmedabad in Commercial Civil Suit No.625 of 2020 and direct the Ld. Commercial Court, City Civil Court at Ahmedabad to take the affidavit in lieu of examination in chief with original documents on behalf of the Petitioner on record;

(b) Pending admission and final hearing of the present Petition, this Hon'ble Court be pleased to stay the proceedings of Commercial Civil Suit No.625 of 2020 pending before the Ld. Commercial Court, City Civil Court at Ahmedabad;

(c ) Ex parte ad interim and/or interim relief in terms of prayer 5(b) be granted; and

(d) Such other and further orders as may be considered fit and expedient in the facts of the case be passed."

2. The background of the facts which has given rise to the present petition is that the petitioner-original plaintiff is a company registered under the provisions of the Companies Act, 1956 and is engaged in the business of manufacturing and selling the products which include the washing powder, detergent cake, bath soap etc., whereas the respondent No.1-original defendant No.1 is a partnership firm and respondent Nos.2 to 5 are the original defendant Nos.2 to 5 who are the partners of the respondent No.1-firm. It is the case of the petitioner that respondent No.1 was used to purchase the goods manufactured by the petitioner and the accounting of transaction was done with the mutual current account for

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the period commencing from 2nd April, 2004 to 24th November, 2004. In response to the business transaction, the petitioner supplied goods worth Rs.1,92,83,016/- to respondent No.1 and the payment with respect to this remained outstanding and the interest was accumulating, and as such, the respondent No.1, later on, requested the petitioner to shift the outstanding amount from current account to loan account to reduce the rate of interest and approximately, the respondent No.1 paid an amount of Rs.35,00,000/- towards its outstanding amount, but even after adjustment of the said amount, the total amount of Rs.1,56,94,025/- remained due and payable. Time and again, the petitioner reminded to clear the aforesaid outstanding dues and by giving assurances, the respondent No.1 continued to purchase the goods from the petitioner under the mutual current account, but then the respondent failed to discharge his duty to make the repayment, as a result of this, the petitioner was constrained to re-transfer the outstanding dues of the respondent No.1 from loan account to current account. Resultantly, the amount due and payable remained as Rs.3,56,39,450/-.

3. It is the case of the petitioner that the respondent, against its outstanding amount as stated of Rs.1,96,33,790/- for the period commencing from 3 rd April, 2004 to 14th December, 2004 issued various credit

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notes between 2nd April, 2004 to 19th November, 2004 totaling around Rs.3,55,226/- and with a view to discharge its dues, the respondent No.1 issued two cheques being Cheque No.304956 for the amount of Rs.78,31,080/- dated 24th November, 2004 and another cheque bearing No.304957 for the amount of Rs.78,31,080/- dated 1st December, 2004, and the said cheques when deposited for encashment, were dishonoured with an endorsement of "Refer to Drawer".

4. It is the say of the petitioner that on account of such return of cheques, a legal notice dated 21st December, 2004 under Section 138 of the Negotiable Instruments Act, 1881 was issued by the petitioner, however, despite the aforesaid notice being served upon the respondent, the respondent failed to clear the outstanding dues, as a result of which, the petitioner was constrained to file a summary suit being Summary Suit No.85 of 2005 before the learned City Civil Court at Ahmedabad with the following prayers;

"(A) A decree of Rs.1,56,50,434.81P being the principal amount plus interest @ 15% pa. from the date of the notice till the date of the suit being Rs.1,74,588 plus Rs.5,500/- being the notice charges, totaling to Rs.1,58,30,522.81 p with costs on running interest at the rate of Rs.15% p.a. thereon from the date of the suit till its realization from the property of the defendant no.1 and from persons and property of

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the defendant No.2 to 5 be passed in favour of the plaintiff and against the defendants.

(B) Cost of the Suit be awarded to the plaintiff from the defendants.

(C ) Any other relief which this Hon'ble Court may deem fit looking to the merits of the case be passed."

5. Pursuant to the said summary suit, the petitioner took out a Summons for Judgment on 24 th February, 2005, and in response thereto, a leave to defend was submitted by the respondent on 14th July, 2005. The learned Trial Judge, after hearing the parties, was pleased to grant a conditional leave to defend to the respondent vide order dated 28th March, 2008, and feeling aggrieved by the said conditional leave to defend, the respondent preferred Special Civil Application No.12071 of 2008, challenging the said order dated 28th March, 2008.

6. It is further the say of the petitioner that this Hon'ble Court was pleased to dispose of the petition vide judgment and order dated 13th October, 2008, and by setting aside the impugned order, remanded the matter back for fresh consideration in accordance with law, and later on, pursuant to the said order of remand, the leave to defend application of the respondent was reheard by the learned Trial Judge, and once again, a conditional leave to defend was granted vide order dated 26 th November, 2008 subject to deposit of Rs.25,00,000/-, and

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the said summary suit came to be transferred to a long Cause Suit. It is, undoubtedly, the said conditional leave to defend was responded by the respondent by depositing the amount, and a purshish to that effect was already filed on 12th May, 2009.

7. The petitioner has contended that pursuant to the said conditional leave to defend, the said summary suit was turned out to be a long Cause Suit and, thereafter, went into cut-off until for the first time the said civil suit was relisted before the Trial Court on 27 th November, 2018 and the issues came to be framed. Later on, the said suit was adjourned from time to time until the order dated 25th February, 2022 came to be passed whereby the said suit was transferred to the learned Small Causes Court by virtue of amendment dated 3rd June, 2019 to the Government Notification dated 15th April, 2019, and later on, the suit was renumbered as Suit No.483 of 2020. Thereafter, on 1st January, 2021, the said Suit No.483 of 2020 was transferred to the learned Commercial Court in view of Notification No.GK/28/2020/SPC/102017/GOI-44D dated 26th October, 2020 and then renumbered as Commercial Civil Suit No.625 of 2020.

8. It is further the case of the petitioner that after being converted the said suit to a commercial suit, the respondent approached the petitioner for exploring the possibility of an overall resolution of the dispute in view

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of the longstanding business relation, as a result of which, the said commercial suit was adjourned on various occasions precisely on 24th September, 2021, 17th December, 2021 as well as on 17th March, 2022. By this time, Nirma Consumer Care Limited, in whose name the summary suit was filed, was amalgamated into the present petitioner-Company, and for amending the cause title in view of such amalgamation, an application was submitted on 8th April, 2022 which was granted vide order dated 20th July, 2022. Later on, i.e., on 26th September, 2022, the learned advocate for the petitioner presented the copy of the amended plaint, and the learned Commercial Court was pleased to grant the opportunity, as a last chance, to the petitioner to produce the evidence on the next date of hearing. On the next date of hearing, i.e., on 21st December, 2022, a purshish was filed by the petitioner to the effect that the amended plaint has already been sent through Registered Post to the respondent, and the learned advocate for the petitioner was carrying with him all original documents and was ready and willing to produce the same, the affidavit in lieu of examination-in-chief since was not affirmed on the said date, the copy could not be furnished, and as such, in view of said circumstance, the petitioner sought an adjournment by filing an application which was registered at Exh.74. The said application was filed for grant of adjournment with a view to produce the

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affidavit in lieu of examination-in-chief along with all original documents which are already available with the learned advocate for the petitioner. However, surprisingly, the learned Commercial Court was pleased to pass an order below Exh.1 and Exh.74, whereby the right of the petitioner to lead evidence was ordered to be closed. The operative part of the said order reads thus;

"It seems that plaintiff is not interested in perusing the present suit as not even a single witness has been examined and not even single original document has been filed by the plaintiff even after 17 years of filing of the suit. Several opportunities have been granted to the plaintiff for the same but despite that, no steps have been taken by the plaintiff. In these circumstances, the rights of evidence of the plaintiff is hereby ordered to be closed."

9. It is the case of the petitioner that the affidavit in lieu of examination-in-chief of its witnesses is already affirmed and ready along with all original documents and can be tendered at any point of time whenever the Court commands the petitioner to produce, but by this time, the learned Commercial Court passed an order as indicated above, and as such, the same being seriously prejudiced to the case of the petitioner, the petitioner left with no other option but to approach this Court by way of present petition.

10. When the petition came up for consideration,

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initially the Court passed an order dated 9 th March, 2023 issuing notice upon the respondents and subsequently upon service of the writ of this Court, learned advocate Ms. Jayani Shah has received instructions to appear on behalf of the respondents, and since both the learned advocates, armed with the relevant instructions, requested the Court to take up the matter for hearing. Accordingly, upon such request being made, the matter was taken up for final disposal at the admission stage itself.

11. The learned senior counsel Mr. R.S. Sanjanwala appearing for the petitioner has submitted that the learned Commercial Court, no doubt, had a discretion to pass any order, but in a given situation which is prevailing on record, the discretion ought not to have been exercised in such a manner which has seriously prejudiced the right of the petitioner and would result into failure of justice since the right of evidence itself is closed. Hence, the said order deserves to be quashed in the interest of justice. It has further been contended that while passing the impugned order, the learned Commercial Court has come to a conclusion that the petitioner is no longer interested in pursuing the suit. This is contrary to the record itself and the Rojkam reflects that not only the petitioner has attended the court proceedings on a regular basis but has also taken

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all the effective steps so as to see that the suit can be adjudicated upon. Even on the day on which the learned Trial Court passed an order, the affidavit in lieu of examination-in-chief was also ready to be tendered and the learned advocate representing the petitioner was already having all the original documents which can be produced, but unfortunately, the learned Commercial Court has ignored such circumstance and closed the right of the petitioner to lead evidence which would frustrate the very main proceedings, and as such, the order deserves to be corrected.

12. The learned senior counsel has further submitted that the sequence of events as stated herein above would clearly indicate that the suit, from its inception, was entangled in the proceedings one after the other. When the Summons for Judgment was sought for, an application was submitted for leave to defend and initially the said leave to defend was granted on a conditional basis and the same was the subject matter of filing of writ petition before this Court as indicated above. After the writ petition came to be disposed of, the matter was remanded back to the learned Trial Court, and the learned Trial Court again heard the leave to defend application and passed an order granting conditional leave to defend on deposit of Rs.25,00,000/-. The said condition was then complied with by the respondent and the suit went in

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long Cause Suit. The said suit, thereafter, went into cut- off right from the year 2009 till 2018. This averment has been uncontroverted by the respondent and the issues have been framed only on 27th November, 2018. Subsequently, the suit was transferred to the learned Small Causes Court on 25th February, 2020 in view of amendment of Government Notification dated 15 th April, 2019, and later on, the same was renumbered. The learned counsel has submitted that again the said suit was transferred from learned Small Causes Court to learned Commercial Court in view of Notification dated 26th October, 2020 and was again renumbered as Commercial Civil Suit No.625 of 2020 and since there was a Covid-19 period during the pendency of the said proceedings, the petitioner as well as the respondent were exploring the possibility of overall resolution of the dispute. Since the said step was initiated by the respondents themselves, and as such, the suit was adjourned. Further, over a period of time, even an amalgamation has taken place whereby the original plaintiff Nirma Consumer Care Limited was amalgamated into the present petitioner-Company, and as such, on 8 th April, 2022, the amendment was sought for in the cause title by way of an application, and the said application came to be allowed on 20th July, 2022. All these issues which have taken place during the pendency of the proceedings and the same being part of the record, the

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assumption of the learned Commercial Court that petitioner is no longer interested in pursuing the suit, is clearly ill-founded and perverse to record.

13. Apart from that, the learned senior counsel has submitted that when the date was fixed of 22 nd December, 2022, the amended plaint was already sent to the respondent through Registered Post and purshish to that effect was also submitted, and at that juncture also, the learned advocate representing the petitioner was already having original documents and was ready and willing to produce the same. It is only on account of the fact that though affidavit in lieu of examination-in-chief was not affirmed on that day, though it was ready, could not be submitted, and as such, an adjournment was sought for and straightway, later on, the impugned order came to be passed, and as such, if this sequence of events to be seen, the conclusion arrived at by the learned Commercial Court while passing the impugned order is not only contrary to the record but also ill-founded. Hence, the discretion undertaken by the learned Commercial Court deserves to be corrected. No doubt, the object underline in treating the commercial disputes as expeditiously as possible, but this being a peculiar circumstance, the learned Commercial Court ought to have exercised due discretion vested in him. Having not done so, the error which has been committed in exercising jurisdiction

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deserves to be corrected. The learned senior counsel has further submitted that simply because several adjournments were sought for by either side and the same having been granted, it cannot be presumed that the plaintiff is no longer interested in pursuing the suit, and as such, in view of this, the order passed by the Commercial Court closing down the right of the petitioner to lead evidence would result in serious miscarriage of justice, and as such, in the larger interest of justice, the order impugned be quashed and set aside.

14. The learned senior counsel, after submitting this, has further submitted that the petitioner is ready and willing to abide by any of the schedule which may be prescribed by the Court and would ensure that suit would be expeditiously dealt with and no unnecessary adjournments will be sought by the petitioner in any form and further has also submitted that any of the terms which may be incorporated while granting relief as prayed for in the petition, the petitioner would abide by the same, and as such, under this set of circumstances, the learned senior counsel has requested the Court to allow the petition by granting relief as prayed for. At this stage, the learned senior counsel has further submitted that the affidavit in lieu of examination-in-chief is already affirmed and ready along with all original documents which can be submitted at any point of time wherever the

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learned Commercial Court commands the petitioner, and as such, has submitted that in view of this circumstance, peculiar in nature, and more so, in between, the period of Covid-19 has passed through, the discretion ought to have been exercised little leniently. Having not done so, the order passed by the learned Commercial Court may be quashed by granting consequential relief.

15. As against this, the learned advocate Ms. Jayani Shah appearing for the contesting respondent has explicitly submitted that the aforesaid circumstances are not in dispute and has fairly submitted that to some extent, certain adjournments were also sought for by the respondent with a view to explore the possibility of settlement and has submitted that, since this be the situation, there will be no objection at the end of the respondent if the order be set aside and the proceedings may be allowed to be carried out as early as possible and has further ensured, upon instructions, that the respondent also will not seek any adjournment or make any effort to prolong the proceedings in any manner. Hence, learned advocate Ms. Shah has submitted that she has no objection if the relief, as prayed for, is granted. However, at this stage, Ms. Shah has also submitted that the right of the defendant to lead evidence is also closed down during the passage of time by virtue of order dated 3rd February, 2023, and as such, if appropriate order be

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passed in the context of relief prayed for, the same would subserve the interest of justice. Hence, left it to the discretion of the Court.

16. Having heard the learned advocates appearing for the parties and having gone through the materials on record, the sequence of events which have been projected by the petitioner which are not controverted by the petitioner and has gone undenied, and the perusal of the same would indicate that the petitioner is never interested in pursuing the suit is not curled out from the record, and as such, the observations made by the learned Commercial Court qua that effect are not well supported by material on record. Hence, the same appears to be perverse, and as such, we deem it proper to interfere in the present proceedings.

17. Additionally, we have found that no doubt the suit has a passage of time of 17 years and several adjournments have been sought for by the petitioner as well as by the respondent. It is not that the same have been denied at any point of time and further even the suit went in cut-off for a pretty long period practically right from 2009 to 2018 as specifically asserted by the petitioner on oath and since the same has gone undenied, we believe the same that for a substantial period, the suit went in cut-off and when the same was surfaced on

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record, twice the same came to be transferred by virtue of amendment and by virtue of notification as indicated above and, thereafter, the amalgamation has taken place which has resulted into the amendment of the cause title of the suit. Therefore, all these circumstances which have occurred during the passage of time cannot infer that the petitioner is no longer interested in pursuing the suit. Hence, the discretion undertaken by the learned Commercial Court appears to be ill-founded and not acceptable. Further, we found that the petitioner is a plaintiff and its right to lead evidence has been closed which would have a far reaching consequence upon the stand taken by the petitioner in the suit proceedings and especially now when the affidavit in lieu of examination- in-chief is already affirmed and ready to be tendered along with original documents as stated and undertaken by the petitioner's counsel, we deem it proper to quash and set aside the impugned order with a consequential direction which may be issued hereunder.

18. It is a well settled position of law that whenever any conflict arises between substantial justice and technical consideration, the substantial justice must be given a predominance and further it is trite law that there can be no legal presumption about factum of abandonment of the proceedings. The abandonment has to be expressed, and even if it is to be implied, the circumstance must be so

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cogent and convincing to draw the said inference and if the said inference is inevitable, only in that circumstance, such presumption may be made, but here is a case where aforesaid sequence of events would clearly indicate that it is not proper to conclude that petitioner is no longer interested in the suit proceedings simply because 17 years have been passed. No doubt, the commercial suits are to be dealt with expeditiously and within a time schedule, but keeping the said object in mind, the right of leading the evidence of the plaintiff cannot be closed since it is well recognized that justice hurried is justice buried, and keeping the aforesaid circumstances in mind, we are of the clear opinion that a case is made out by the petitioner to call for an interference, more particularly, when the learned senior counsel appearing for the petitioner has assured that they would fully cooperate with the Trial Court for expeditious disposal of the suit. Furthermore, there appears to be an express no objection by the respondent if the suit is allowed to be prosecuted further in accordance with law after allowing the petitioner to lead evidence and submit original documents or the affidavit as the case may be. Hence, the conjoint effect of aforesaid circumstances would indicate that the case is made out by the petitioner to extend the relief as prayed for in the petition. At this stage, we are also of the opinion that the petitioner cannot be given any leverage to just go on with the suit proceedings at its own

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sweet will or its own convenient time, and as such, we deem it proper to impose appropriate condition while granting relief as prayed for. Hence, following order would meet the ends of justice;

ORDER

(i) The present petition is allowed.

(ii) The impugned order dated 22nd December, 2022 is hereby quashed and set aside, and as a consequent thereof, the petitioner is permitted to tender the affidavit in lieu of examination-in-chief along with all original documents on record, and the learned Trial Judge is directed to take the same on record and continue with the proceedings of the Commercial Civil Suit No.625 of 2020 from the stage where it has stuck up.

(iii) Since the suit proceedings are very old, we direct the learned Commercial Court, City Civil Court at Ahmedabad to hear and dispose of the same in accordance with law as expeditiously as possible preferably within a period of four months from the date of receipt of the writ of this order.

(iv) It is made clear that the petitioner as well as the respondent shall not ask for an unnecessary adjournment or make any effort to delay the suit proceedings in any manner as undertaken by the learned senior counsel upon

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instructions, and if any such attempt is made, it would be open for the learned Commercial Court to pass any suitable order in the interest of justice including the imposition of heavy cost for such attempt. Since the petitioner has also been responsible to some extent as reflecting from the record, while allowing the petition, we hereby impose a cost of Rs.25,000/- upon the petitioner to be deposited with the City & District Law Library, Lal Darwaja, Ahmedabad. If the said amount is not deposited within a period of four weeks from today, the same shall be recovered as an arrears of the land revenue after following due procedure.

19. With these observations, the present petition stands allowed.

(ASHUTOSH SHASTRI, J)

(J. C. DOSHI,J)

VAHID