Johar Shaikh @ Joharali Anawarali ... vs Kalash Buildcon
2023 Latest Caselaw 7796 Guj

                                                                                          NEUTRAL CITATION




     C/SCA/18564/2023                                       ORDER DATED: 20/10/2023

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            IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

             R/SPECIAL CIVIL APPLICATION NO. 18564 of 2023

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             JOHAR SHAIKH @ JOHARALI ANAWARALI SHAIKH
                              Versus
                         KALASH BUILDCON
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Appearance:
MR AMIT V THAKKAR(3073) for the Petitioner(s) No. 1
for the Respondent(s) No. 2,3,4
MR.NANDISH H THACKAR(7008) for the Respondent(s) No. 1,1.1,1.2,1.3
VENU H NANAVATY(7458) for the Respondent(s) No. 1,1.1,1.2,1.3
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 CORAM:HONOURABLE MR. JUSTICE DEVAN M. DESAI

                              Date : 20/10/2023

                                  ORAL ORDER

1. Heard learned advocate Mr.Amit Thakkar for the

petitioner and learned advocate Mr.Nandish Thackar for

respondent Nos.1.1, 1.2 and 1.3.

2. By way of this petition, petitioner has challenged

the common order below Exhibit 14 and Exhibit 17 in

Summary Civil Suit No.6 of 2023 passed by the learned 3 rd

Additional Senior Civil Judge, Surat, wherein conditional leave

to defend the suit qua the defendant No.3 i.e. present

petitioner, was granted with a condition to deposit

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Rs.30,00,000/- within one month.

3. Learned advocate for the petitioner has submitted

that the respondent Nos.1.1 to 1.3 filed Summary Suit No.6 of

2023 under the provisions of Order 37 of the Code of Civil

Procedure, 1908, for recovery of Rs.75,00,000/-. The suit is

filed on agreement dated 28.04.2022 executed between the

defendant No.3 and plaintiff No.1(A) - Dashrathbhai

Mahadevbhai Shah. The birth of the said agreement dated

28.04.2022 is arising out of a compromise decree arrived at in

Commercial Suit No.77 of 2022 between the parties of

Commercial Civil Suit No.77 of 2022. The case of the plaintiff

is that in satisfaction of consent Decree by the said agreement

dated 28.04.2022, possession of BMW 7 series Car bearing

registration No.GJ-05-RA-7869 was given to the said

Dashrathbhai Mahadevbhai Shah. Since the car was alleged to

be stolen by the defendant No.3 and one Hiren Patel, a FIR

came to be registered against defendant No.3 and one

Imranbhai. Thus, the case of the plaintiffs is that the

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agreement dated 28.04.2022 was not complied with and

defendant No.3 committed breach of agreement dated

28.04.2022. It is also the case of the plaintiffs that, for the

execution petition bearing Execution Petition No.71 of 2022 is

filed on 05.12.2022 against all the defendants which is pending

as on today. After execution was filed, the summary Suit No.6

of 2023 came to be filed on 06.04.2023.

4. The defendant Nos.1 and 3 filed common leave to

defend affidavit and defendant No.2 filed a separate leave to

defend affidavit. The contention of the present petitioner i.e.

defendant No.3 herein, is mainly that the defences raised by

the defendant, are genuine and legal. To substantial this

submission, learned advocate for the petitioner submitted that

so far as the allegation of stolen car is concerned, the

petitioner filed Special Criminal Application No.23132 of 2022

before this Court. Vide order dated 05.01.2023 this Court has

observed that on considering the report it was found that at

the relevant point of time accused Hiren Patel was found at

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the scene of offence and the present petitioner did not play

any role in the alleged offence. Thus, by relying upon this

observations made by the learned advocate for the petitioner

submitted that the theory of theft requires trial before the

competent criminal Court and till trial is completed,

involvement of petitioner in theft can't be inferred. It is

further submitted by the learned advocate for the petitioner

that the present suit is filed on the basis of compromise decree

passed between the parties in Commercial Suit No.77 of 2022.

The learned advocate for the petitioner has also raised an

objection of maintainability of suit under summary procedure.

5. Learned advocate for the petitioner has also

submitted that the plaintiff No.1 is a partnership firm and

there is no evidence produced on record that the said firm is

registered firm. It is further submitted that the learned trial

Court has observed that on considering the provisions of law

and facts, the defendant deserves unconditional leave to

defend. However, the learned trial court has imposed a

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condition to defend the suit.

6. Per contra, learned advocate for the respondent

Nos.1.1 to 1.3, objected the present petition and submitted

that while deciding the leave to defend affidavit, trial Court

has not gone into the merits of the case and has rightly and

correctly imposed the condition upon defendant No.3. It is

further submitted by the learned advocate for the respondent

Nos.1 and 2, an agreement dated 28.04.2022 executed between

the plaintiff No.1(a) and defendant No.3, is an admitted

document. Since the defendant No.2 and 3 committed an

offence of theft and thereby the terms and conditions of

agreement dated 28.04.2022, were breached.

So far as the objection with regard to maintainability of

the suit, learned advocate for the respondent Nos.1 and 2

submitted that maintainability of the suit could be tried and

alleging a false defence of maintainability of the suit,

defendant no.3 is not entitled unconditional leave to defend of

suit.

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7. It is interesting to note that both the learned

advocates for the parties have placed reliance the decision of

the Hon'ble Supreme Court in the case of B.L.Kashyap and Sons

Limited Vs. JMS Steels and Power Corporation and Another

reported in (2022) 3 Supreme Court Cases 294 and heavily placed

reliance paras 32.2, 33, 33.1 and 33.2 which is reproduced

hereinunder:-

32.2 In the case of IDBI Trusteeship (supra), this Court modulated the aforementioned principles and laid down as follows: -

"17. Accordingly, the principles stated in para 8 of Mechelec case [Mechelec Engineers & Manufacturers v. Basic Equipment Corpn., (1976) 4 SCC 687] will now stand superseded, given the amendment of Order 37 Rule 3 and the binding decision of four Judges in Milkhiram case [Milkhiram (India) (P) Ltd. v. Chamanlal Bros., AIR 1965 SC 1698 : (1966) 68 Bom LR 36] , 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.

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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 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."

33. It is at once clear that even though in the case of IDBI Trusteeship, this Court has observed that the principles stated in paragraph 8 of Mechelec Engineers' case shall stand superseded in the wake of amendment of Rule 3 of Order XXXVII but, on the core theme, the principles remain the same that grant of leave to defend

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(with or without conditions) is the ordinary rule; and denial of leave to defend is an exception. Putting it in other words, generally, the prayer for leave to defend is to be denied in such cases where the defendant has practically no defence and is unable to give out even a semblance of triable issues before the Court.

33.1 As noticed, if the defendant satisfies the Court that he has substantial defence, i.e., a defence which is likely to succeed, he is entitled to unconditional leave to defend. In the second eventuality, where the defendant raises triable issues indicating a fair or bonafide or reasonable defence, albeit not a positively good defence, he would be ordinarily entitled to unconditional leave to defend. In the third eventuality, where the defendant raises triable issues, but it remains doubtful if the defendant is raising the same in good faith or about genuineness of the issues, the Trial Court is expected to balance the requirements of expeditious disposal of commercial causes on one hand and of not shutting out triable issues by unduly severe orders on the other. Therefore, the Trial Court may impose conditions both as to time or mode of trial as well as payment into the Court or furnishing security. In the fourth eventuality, where the proposed defence appear to be plausible but improbable, heightened conditions may be imposed as to the time or mode of trial as also of payment into the Court or furnishing security or both, which may extend to the entire principal sum together with just and requisite interest.

33.2. Thus, it could be seen that in the case of substantial defence, the defendant is entitled to unconditional leave; and even in the case of a triable issue on a fair and reasonable defence, the defendant is ordinarily entitled to unconditional leave to defend. In case of doubts about the intent of the defendant or genuineness of the triable issues as also the probability of defence, the leave could yet be granted but while imposing conditions as to the time or mode of trial or payment or furnishing security. Thus, even in such cases of doubts or reservations, denial of leave to defend is

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not the rule; but appropriate conditions may be imposed while granting the leave. It is only in the case where the defendant is found to be having no substantial defence and/or raising no genuine triable issues coupled with the Court's view that the defence is frivolous or vexatious that the leave to defend is to be refused and the plaintiff is entitled to judgment forthwith. Of course, in the case where any part of the amount claimed by the plaintiff is admitted by the defendant, leave to defend is not to be granted unless the amount so admitted is deposited by the defendant in the Court."

8. Learned advocate for the petitioner has also placed

reliance on the decision passed by the Co-ordinate Bench in

Special Civil Application No.4725 of 2021 and allied matters in

the case of Dineshbhai Khimjibhai Patel Vs. Pareshbhai Devilal

Sankhesara. In para-13, this Court has observed as under:-

"13. In view of the above discussion, this Court is of the opinion that the learned trial Court has committed grave error in the eye of law by not considering the settled position of law, more particularly, when the interest is claimed on the amount of damages which are yet to be ascertained after full-fledged trial and when the claim is based on running bill and no contracts are produced which are relevant at the present petitioners are sub- contractors of the respondent no.1 and the findings of the learned trial Court are not found in consonance with the pleadings and also against the settled position of law and therefore, require interference of this Court by exercising the powers under Article 227 of the Constitution of India.

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9. Learned advocate for respondent No.1.1 to 1.3

while distinguishing the aforesaid decision of Dineshbhai

Khimjibhai Patel (supra) states that the conclusion arrived at by

the Co-ordinate Bench of this Court was on different set of

facts and the decision of Disnesbhai (supra) could not be made

applicable to the facts of the present case.

10. This Court has considered the submissions of

learned advocates for the parties and has also taken into

consideration the order impugned, it is worthwhile to observe

that while deciding Exhibit 14 and 17 by the learned

Additional Senior Civil Judge, Surat, the defence of defendant

has not been properly considered. The plaintiff has alleged that

defendant Nos.2 & 3 are involved in the case of theft of BMW

7 series Car bearing Registration No.GJ-05-RA-7869.

Resultantly the defendants committed breach of the agreement

dated 28.04.2022, whereas the specific defence of denial of the

theft being committed by petitioner is raised by the defendant

No.3. Further, there is no material on record which shows that

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the plaintiff No.1 is a registered partnership firm. While

invoking the provisions of Section 69 of the Indian Partnership

Act, when a partnership firm files a suit for recovery of

amount of more than Rs.100, the said partnership firm must

be a registered partnership firm. At this juncture, it would be

ad rem to observe that there is no document placed on record

which shows that the plaintiff No.1 is a partnership firm.

Though, this aspect has been taken note by the learned trial

Court but the same has not been properly appreciated. A

dispute of a suit being filed by an unregistered partnership

firm is a triable issue.

11. In the case of B.L.Kashyap and Sons Limited (supra),

the Hon'ble Apex Court has observed that when a substantial

defence raised, the defendant is entitled to unconditional leave.

In cases of doubts about taking the intent of defendant or

genuineness of the triable issues as also the probability of

defence, issue as to the probability of defence, the leave could

yet be granted but while imposing certain conditions as to the

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time or mode of trial or payment or furnishing security.

12. Keeping the aforesaid observations of the Hon'ble

Apex Court in mind, this Court is of the view that the

defendant No.3 has raised triable issues in leave to defend

affidavit and the averments and contentions of the plaintiffs

require full-fledge trial. The suit is based on breach of

agreement. The factum of breach can only be established by

going into the trial.

13. It is also a fact to be considered that the agreement

dated 28.04.2022 seems to be entered into between the

plaintiff No.1(A) and Dshrathbhai Mahadev Shah defendant

No.3. However, the said suit is filed by the partnership firm

and one Ravi Construction Propriety through its proprietor Mr.

Ravi Shah. The maintainability of suit also requires trial. The

Execution Petition is also pending so plaintiffs cannot have

double benefit under one cause. Such defence is also a

bonafide and the genuine defence which requires trial. Hence,

in the totality of the facts, this Court is of the view that the

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learned trial Court has committed an error of law while

imposing the condition upon defendant No.3. Hence, the order

impugned requires interference and the same deserves to be

quashed and set aside.

14. The petition is allowed accordingly. The order dated

20.09.2023 passed in Special Summary Suit No.6 of 2023 by

the learned 3rd Additional Senior Civil Judge, Surat, is hereby

quashed and set aside. The defendant No.3 is permitted to

defend the suit unconditionally. The defendant No.3 shall file

written statement within a period of 15 days from the receipt

of the copy of this order.

Direct service is permitted.

(D. M. DESAI,J) MANOJ