Gujarat High Court
Shridhar Goud Mallepula vs M/S Gujarat Craft Industries Ltd on 22 April, 2025
Author: Sunita Agarwal
Bench: Sunita Agarwal
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 4804 of 2025
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SHRIDHAR GOUD MALLEPULA & ANR.
Versus
M/S GUJARAT CRAFT INDUSTRIES LTD.
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Appearance:
MR. HJ KARATHIYA(7012) for the Petitioner(s) No. 1,2
PRANAV D THAKKAR(8501) for the Respondent(s) No. 1
VIJAYKUMAR B LIMBACHIYA(8763) for the Respondent(s) No. 1
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CORAM:HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE
SUNITA AGARWAL
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 22/04/2025
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE PRANAV TRIVEDI)
1. The present writ petition under Article 227 of the
Constitution of India assails the order dated
21.2.2025 passed by the Commercial Court,
Ahmedabad in Commercial Summary Suit No. 3692
of 2021 below Exh-13 wherein leave to defend was
conditionally allowed in favour of the petitioner-
original defendant subject to the deposit of 50% of
the amount due, i.e. Rs.14,14,067.50 ps.
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2. Brief facts leading to filing of the present writ-petition
is that the petitioner is the original defendant No.1 in
Commercial Suit No. 3692 of 2021 and, inter alia,
engaged in the business of trading and supply of
agricultural plastic products. The respondent is the
original plaintiff in Commercial Civil Suit No. 3692 of
2021 and is a Company registered under the
provisions of Companies Act, 1956 and, inter alia,
engaged in the business of manufacturing and
production of GEO-MEMBRANE & HDPE woven pipes.
3. It was the case of the respondent-original plaintiff
that commercial relationship between the petitioner
and the respondent started in the year 2013 wherein
the petitioner approached the respondent for availing
supply of various types of plastic HDPE GEO-
MEMBRANCE SHEET for water proofing. Pursuant to
the negotiation, purchase orders were given from
time to time and supply was made by the
respondent. Pursuant thereto, various invoices were
raised and amounts were paid for initial invoices.
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There was a running Account between the petitioner
and parties and the same was maintained smoothly
till the year 2018. It was the case of the respondent
that there were a total uncleared invoices to the tune
of Rs.28,28,135/-. Such dispute led to filing of the
Commercial Suit.
4. The Commercial Suit was instituted before the
Commercial Court, Ahmedabad being Commercial
Suit No. 3692 of 2021. Initially mandatory procedure
under Section 12-A of the Commercial Courts Act,
2015 (hereinafter referred to 'the Act' for short) for
mediation and conciliation was undertaken, however,
the same was unsuccessful. There was non-starter
report on 28.10.2022. This lead to initiation of the
Suit proceedings.
5. The Suit was preferred under the provisions of the
Act along with the provisions of Order 37 of the Code
of Civil Procedure as a Summary Suit. On 28.9.2022
respondent - original plaintiff preferred an
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application under Order 37 Rule 3 of the Code of Civil
Procedure for summons of judgment. The petitioner-
original defendant also preferred an application for
leave to defend in November, 2022. The Commercial
Court by way of order dated 21.2.2025 below Exh-13
in Commercial Suit No. 3692 of 2021 granted the
petitioner leave to defend but with a condition to
deposit 50% of the amount due i.e. Rs.14,14,067.50
ps, which has led to filing of the present writ-petition.
6. Mr. H.J. Karathiya, learned advocate for the petitioner
has submitted that the impugned order by the
Commercial Court is absolutely discriminatory and
arbitrary. The Commercial Court has not assigned
proper reasons as to why the conditions are
ascertained while granting leave to defend. There is
no sanctity in imposing condition of making payment
of 50% of amount due.
7. It was further sought to be submitted that
Commercial Court has not appreciated that there was
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NO QUALITY test certificate of the goods in question.
In wake of absence of such certificate, the contract
could not have been fulfilled. It was further sought to
be submitted by Mr. Karathiya that there was no
cause of action and issue with regards to jurisdiction
was also raised. Therefore, leave to defend ought to
have been allowed unconditionally.
8. Relying on judgment of this Court in Appeal from
Order No. 370 of 2013, it was sought to be submitted
by Mr. Karathiya that when there was issue of
jurisdiction, plaint ought to have been returned under
the provisions of Order 7 Rule 10 of the Code of Civil
Procedure. Further reliance was placed on the order
of this Court in Special Civil Application No. 301 of
2023 and it was contended that there were triable
issues and therefore, the Commercial Court ought to
have considered that the Suit was not falling within
the scope and ambit of Order 37 of the Code of Civil
Procedure. In wake of such submissions, Mr.
Karathiya has submitted to allow present writ petition
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and to quash the impugned order. However, while
assailing the impugned order, it was categorically
accepted by Mr. Karathiya that the condition as
stipulated in the impugned order for payment of 50%
amount due, within a period of four weeks, has not
been complied by the petitioner and for the same
separate action has been initiated by the respondent.
9. Having heard Mr. Karathiya, learned advocate for the
petitioner and perused the material on record, the
only issue raised by the petitioner is with regard to
grant of "conditional" leave to defend. The petitioner
being original defendant in Commercial Suit No. 3692
of 2021 has been granted leave to defend with a
condition of payment of 50% amount due. According
to the petitioner, it ought to have been unconditional
leave to defend.
10. The main issue put forward with a lot of vehemence
by Mr. Karathiya is with regard to the testing report.
It was sought to be argued by Mr. Karathiya that
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once there is "no quality" test certificate of the goods
then the conditions of contract were not fulfilled and
there ought to have been unconditional leave to
defend. However, the Commercial Court has given a
categorical findings that the testing report was
produced for the first time in the month of July, 2023
before the Commercial Court i.e. after two years from
the filing of the Suit. It was also observed by the
Commercial Court after perusing the e-mails between
the parties that for a very long time, the petitioner
has not raised any issue with regard to supply of
inferior quality goods. Therefore, the contention with
regard to the testing report raised by the petitioner
fails in view of such factual findings returned by the
Commercial Court.
11. Another issue raised by Mr. Karathiya is with regard
to the period of limitation. However, only a general
argument with regard to limitation has been raised
before the Commercial Court. It has been
categorically observed by the Commercial Court that
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there is no dispute with regard to sending of goods
by the plaintiff, i.e. the respondent herein. Further,
from a bare perusal of the plaint, appended at Page-
'42' of the present writ-petition, it is to be noted that
the respondent asserted that the cause of action
arose when last payment was made in the year 2018
and subsequently notice was given in the year 2019.
Therefore, when there is a running Account and the
payment was made on 5.12.2018 and the Suit was
filed in the year 2021, it is within the prescribed
period of limitation. The argument canvassed with
regard to the limitation, therefore, cannot be
sustained.
12. The third contention raised is with regard to
jurisdiction. However, Mr. Karathiya has not been
able to demonstrate as to what was the ground
raised before the Commercial Court with regards to
jurisdiction. It can be perused from the cause title of
the Plaint itself that the respondent-plaintiff has its
registered office within the jurisdiction of the
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Commercial Court and the transaction with the
respondent is not at all disputed. Therefore, vague
ground raised by Mr. Karathiya with regard to
jurisdiction, cannot be sustained.
13. The last issue raised by Mr. Karathiya is with regard
to the fact that there are triable issues. However, the
Commercial Court has given categorical findings that
there are purchase orders and there is non-payment
by the petitioner. Further, there is no dispute with
regard to supply of goods by the respondent-plaintiff.
Further, there is no dispute with regard to placement
of purchase order by the petitioner herein namely
original defendant. Further, the fact is disclosed with
regard to non-payment of the running Accounts. On
such factual background, the Commercial Court has
granted leave to defend conditionally on payment of
50% of the amount due and such observations are
absolutely justifiable and not required to be
interfered with.
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14. It needs to be observed that the circumstances under
which the learned Commercial Court is required to
grant unconditional leave to defend are cases where
the defendant shows substantial good defence where
he is very likely to succeed and further showcases
that there are genuine triable issues which shadows
clout on the transaction itself. In such situation, the
Commercial Court can definitely grant unconditional
leave to defend. However, when defendant raises as
triable issues but is not able to showcase the
genuineness of such issues raised, then the
Commercial Court can definitely balance the
requirement of expeditious disposal of Commercial
Cases on one hand with imposing conditions of
payment in the Court.
15. In the instant case, when the Commercial Court has
categorically observed about the genuineness of the
transaction as well as the factum of delivery of goods
and other aspects of commercial transaction are
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brought on record then the conditional leave to
defend on payment of 50% of the amount due cannot
be interfered with. The reasons assigned by the
Commercial Court while granting conditional leave to
defend in favour of the petitioner are absolutely
justifiable in wake of discussion made herein above.
In view of the same, the present petition is
devoid of merits and is hereby dismissed with no
order as to costs.
(SUNITA AGARWAL, CJ )
(PRANAV TRIVEDI,J)
SAJ GEORGE
