Gujarat High Court
M/S Isabelle Tours N Travels vs Devangshubhai Shantilal Kothari on 21 February, 2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 1753 of 2025
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE MAULIK J.SHELAT
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Approved for Reporting Yes No
✔
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M/S ISABELLE TOURS N TRAVELS & ANR.
Versus
DEVANGSHUBHAI SHANTILAL KOTHARI
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Appearance:
MR JB DASTOOR(239) for the Petitioner(s) No. 1,2
MR. NISHIT P. GANDHI WITH MR. VIPUL B SUNDESHA(6689) for the
Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE MAULIK J.SHELAT
Date : 21/02/2025
ORAL JUDGMENT
1 Heard learned advocate Mr. J. B. Dastoor for the
petitioner and learned advocate Mr. Nishit P. Gandhi with
learned advocate Mr.Vipul B. Sundesha for the respondent on
a caveat.
2 The present application has been filed under Article 227
of the Constitution of India seeking the following reliefs:-
A) Your Lordships may be pleased to admit and allow this Special
Civil Application;
B) Your Lordships may be pleased to issue the writ of certiorari or
any other appropriate writ, order or direction and be pleased to
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quash and set aside the impugned order dated 13.6.2024 (Exh.25
(Ann:C) passed by the Learned 3rd Additional Senior Civil Judge,
Ahmedabad (Rural) in Special Sammary Suit No.158 of 2015
C) Pending admission hearing and final disposal of this petition,
Your Lordships may be pleased to stay the execution, operation
and implementation of the impugned order dated 13.6.2024 at
Exh.25 (Ann:C) in Special Summary Suit No.158 of 2015 and
further be pleased to order to grant of unconditional leave to
defend the suit in the interest of justice.
D) Your Lordships may be pleased to grant such other and further
relief/s that may be deemed fit and proper in the facts and
circumstances of the case;
E) Your Lordships may be pleased to award the cost of this
petition;
3 The short facts of the case appears to be as under:-
3.1 The respondent No.1 herein is a plaintiff of the
Special Summary Suit No. 158 of 2015 filed against the
present petitioners seeking monetary relief of Rs.50,00,000/-
principle amount plus Rs.41,52,902/- interest amount in all
thereby, filed a recovery suit of Rs.91,52,902/- against the
petitioners under Order 37 of Code of Civil Procedure, 1908
(herein after referred as 'CPC').
3.2 It is the case of the plaintiff that the promissory note
has been executed by the defendants on 27.01.2010, which is
a notarized agreement and on 25.01.2010, defendants have
provided two set of cheques as a security in connection to the
money paid by the plaintiff to the defendant i.e.
Rs.50,00,000/-.
3.3 When both these cheques were deposited by the
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plaintiff in May, 2014, both were dishonored. So, in view of
the above, a summary suit came to be filed on 16.05.2015.
3.4 It further appears that the defendants, after entering
their appearance, did not respond to the summon of judgment
filed by the plaintiff thereby, their right was closed. Later on,
it was re-opened by the trial Court vide its order dated
08.08.2017 by directing the defendants to pay cost.
3.5 It further appears that leave to defend without any
supporting documentary evidence has been filed by
defendants but after submitting it, defendants have
disappeared from the proceedings as neither defendants nor
their advocate were even present till the time the impugned
order was passed. This fact is clearly recorded in the rojkam,
which is produced on record by the caveator with the paper-
book.
3.6 So, the impugned order was passed after hearing the
learned advocate appearing for the plaintiff. The trial Court,
after examined the merit of the matter and after going
through the leave to defend, which was filed without any
material particulars, was kind in favour of the defendants,
thereby, directed them to deposit a sum of Rs.33,33,000/-
within a month of passing of the impugned order i.e.
13.06.2024.
3.7 Technically, after 13.07.2024, as per Order 37 R. 3 (6)
(b) of CPC, plaintiff is entitled to get a judgment / decree, if
the defendants failed to deposit aforesaid amount as per the
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impugned order.
3.8 It appears that till date, despite there is no stay in
favour of the petitioners, no amount has been deposited by
them as per impugned order. The plaintiff appears to have
filed two applications, one below Exh.22 on 18.04.2023 i.e.
prior to passing of impugned order as at the relevant time,
defendants had not responded to summon for judgment and
their right was closed and the second application is filed
below Ex.30 on 24.07.2024 under Order XXXVII Rule 3 (6) (b)
of the Code of Civil Procedure, which is claimed to have been
pending as the defendants are not allowing the trial Court to
pass a formal decree, which is otherwise a formality once
there is a non-compliance of the order passed by the Trial
Court granting conditional leave in favour of the defendants.
3.9 With these background of facts, the petitioner /
defendants have preferred the present application challenging
the impugned order dated 13.06.2024 passed by 3 rd Senior
Civil Judge, Ahmedabad (Rural) at Navrangpura passed in
Special Summary Suit No. 158 of 2015.
SUBMISSION OF THE PETITIONERS - DEFENDANTS
4 Learned counsel Mr. J. B. Dastoor would submit that the
trial Court, without considering the nature of transactions
took place between the parties and without appreciating the
defenses, which are so raised in the leave to defend
application filed by the defendants, has partly allowed it by
imposing a condition to deposit Rs.33,33,000/-, which is
contrary to law.
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5 Learned counsel Mr. Dastoor further submitted
Promissory Note and the cheques were issued in year 2010
and the present suit is filed in the year 2015, the debt became
time barred thereby suit itself is time barred filed beyond
period of limitation.
6 Learned counsel Mr. Dastoor would further submit that
when the suit itself is time barred, defendants were required
to be granted unconditional leave to defend the summary suit.
7 Learned counsel Mr. Dastoor would further submit that
the triable issues, which are raised in the leave to defend, are
not at all considered by the trial Court thereby, a serious
irregularity and jurisdictional error committed by the trial
Court which needs to be corrected by this Court by exercising
its power under Article 227 of the Constitution of India.
8 Learned counsel Mr. Dastoor would submit that two
criminal complaints, which were filed by the plaintiff against
defendants under Section 138 of the Negotiable Instrument
Act were dismissed, such aspect of the matter is not at all
considered by the trial Court while partly allowing leave to
defend in favour of the defendants.
9 Making the above submissions, he requested this Court
to allow this petition.
10 To buttress his submissions, learned advocate Mr.
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Dastoor relied upon the decision of the Apex Court in the case
of Sudin Dilip Talaulikar Vs. Polycap Wires Private
Limited and Ors. [(2019) 7 SCC 577] and the decision of
the High Court of Madras in the case of Anoopchand
Chordia Vs. M/s A. K. Medicals [CRP (NPD) No.1662 of
2012 and M.P. No.1 of 2012].
SUBMISSIONS OF THE RESPONDENT - PLAINTIFF
11 Per Contra, Learned advocate Mr. Nishit P. Gandhi
along with Mr. Vipul B. Sundesha appearing for the
respondent plaintiff would submit that present application is
misconceived at law and requires to be rejected as impugned
order was passed by the trial Court on 13.06.2024 and as per
Order XXXVII Rule 3 (6)(b) of the Code of Civil Procedure,
plaintiff is entitled to get judgment / decree, which is a matter
of course to be passed by trial court thereby, now the
petitioners are required to prefer an appeal against such
judgment and decree.
12 Learned counsel Mr. Gandhi would submit that
considering the conduct of the defendants, who have initially
not responded to summon for judgment, thereby their right
was closed and after some time, such right was reopened,
defendants have not pursued their leave to defend application,
which is apparent from the rojkam produced on record.
13 Learned advocate Mr. Gandhi would further submit that
wording of the promissory note itself is very clear that on
demand of the amount, defendants were required to pay with
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12% interest thereby, the suit is filed within limitation as
demand was raised in the year 2014 as two cheques, which
were given as a security, were dishonored and the suit came
to be filed in the year 2015, which is within three years as
provided under Article 22 of the Limitation Act.
14 Learned Counsel Mr. Gandhi would submit that except
filing the leave to defend, there is nothing on record to
substantiate the defence of the defendant and as such,
defendants are required to pay full amount as execution of
promissory note is a notarized document and two cheques are
undisputedly given by the defendants to the plaintiff.
15 Learned Counsel Mr. Gandhi would further submit that
defence of petitioners-defendants is sham, bogus and
moonshine thereby, as such not even entitled for any
conditional leave to defend but having so found their defence
plausible but improbable put up a condition which is very
reasonable then, this Court may not interfered with the
impugned order.
16 Learned advocate Mr. Gandhi would submit that the
defendants have made actually a wrong statement on affidavit
in leave to defend about the dismissal of two complaints filed
under Negotiable Instrument Act (herein after referred as N.I.
Act), which is alleged to have been dismissed on merit. Such
is a wrong statement on affidavit, which disentitle the
defendants to claim any equitable relief.
17 Learned counsel Mr. Gandhi have invited the attention
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of this Court to statement made in the petition in Grounds
(Paragraph 'e') on Page No.4 and the statement made by the
defendants in paragraph No.8 of their leave to defend, about
the dismissal of the criminal complaint filed under Section 138
of the N.I. Act.
18 Learned counsel Mr. Gandhi states that both these
complaints were dismissed for default and were not
adjudicated by the criminal court on its merits. It is submitted
that criminal complaints were filed under Section 138 of N.I.
Act were filed beyond period of its limitation and there is no
finding recorded by competent court dealing with such
complaint to hold that debt of plaintiff was time barred.
19 So, learned counsel Mr. Gandhi would humbly submit
that this Court may not entertain the present petition.
20 To buttress the arguments, learned counsel Mr. Nishit
Gandhi relied upon the decision of the Apex Court in the case
of Ajay Bansal Vs. Anup Mehta [2007 (2) SCC 275].
21 No further submissions have been made by the learned
advocates for the parties.
22 I have heard the learned counsels appearing for the
parties at length and perused the documents, which are part
of the suit, provided by the respective counsels in the form of
paper-book.
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23 It appears from reading the impugned order as well as
going through the rojkam, neither the defendants nor their
advocate remained present during the course of hearing of
the leave to defend application filed by the defendants.
24 The trial Court, after considering the fact that the
promissory note was executed coupled with two cheques
which were given by the defendants from their own account,
which is undisputedly dishonored, is a ground weighed with
the trial Court that debt in question is a legal enforceable
debt, thereby the plaintiff can recover such debt from the
defendants.
25 When the promissory note has been duly executed by
defendants and two cheques of amount so borrowed by them
from plaintiff have been dishonored and after going through
wording of such promissory note, prima facie, plaintiff has
established its legal debt. As such trial Court is kind to impose
conditions upon the defendants to deposit only Rs.33,33,000/-
against the claim of the plaintiff of Rs.91,52,902/-, which
include interest.
26 It is required to be taken note of the fact that when the
trial Court has accepted the case of the plaintiff about
promissory note as well as two cheques, which were given at
the relevant time, nothing more requires to be seen in the
matter especially when defendants have not brought any
contrary evidence on the record in support of their leave to
defend application. As the plaintiff is not in appeal / challenge
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of the impugned order, this Court restrain itself to make
further comment on such aspect.
27 Be that as it may, once it has been established on record
that the promissory note has been executed by the defendants
in favour of the plaintiff, where the wordings of the
promissory note itself is very clear that upon making demand,
defendants were required to make the payment with 12%
interest, and if such demand is raised by depositing the
cheques issued by the defendants and the same is dishonored,
a cause of action arose with the plaintiff to file a suit for
recovery of amount so due from defendants.
28 Such fact happened in the year 2014 and within a short
span, summary suit came to be filed by the plaintiff, which is
well within the period of limitation, considering the provisions
of Article 22 of the Limitation Act. Thus, the first claim of
argument of the learned advocate Mr.Dastoor is misconceived
at law and contrary to the records of the case.
29 So far as the conduct of the defendants are concerned
which is highly deplorable and requires to be taken note of.
The defendants in their leave to defend filed on affidavit,
made a false statement that both these criminal complaints
filed under Section 138 of the N.I. Act by the plaintiff are
dismissed on the ground of time barred debt. This is factually
incorrect as the petitioner themselves in Paragraph 'e' on
Page No.4 of the present petition - application stated that
both these complaints were dismissed for non-prosecution on
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01.08.2017.
30 Making such a false statement on oath by the defendants
not only disentitle them to get any equitable relief but it is a
matter of concerned and it is left to the discretion of the trial
Court to initiate any appropriate proceedings, if so desired,
against the defendants for making a false statements on
affidavit, which was presented before the Court of law.
31 At this stage, it is apposite to refer to and rely upon the
decision of the Supreme Court of India in the case of B.L.
Kashyap & Sons Ltd. v. JMS Steels & Power Corpn.,
[(2022) 3 SCC 294], which is as under:-
32.2. In IDBI Trusteeship[IDBI Trusteeship Services
Ltd.v.Hubtown Ltd., (2017) 1 SCC 568 : (2017) 1 SCC (Civ) 386] ,
this Court modulated the aforementioned principles and laid down
as follows: (SCC pp. 596-97, para 17)
"17. Accordingly, the principles stated in para 8 of Mechelec
case [Mechelec Engineers & Manufacturer sv. 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] , 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,
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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 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."
(emphasis supplied)
33. It is at once clear that even though in IDBI Trusteeship [IDBI
Trusteeship Services Ltd. v. Hubtown Ltd., (2017) 1 SCC 568 :
(2017) 1 SCC (Civ) 386] , this Court has observed that the
principles stated in para 8 of Mechelec Engineers case [Mechelec
Engineers & Manufacturer sv.Basic Equipment Corpn., (1976) 4
SCC 687] shall stand superseded in the wake of amendment of
Rule 3 of Order 37 but, on the core theme, the principles remain
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the same that grant of leave to defend (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."
32 The judgment, which has been relied upon by the
learned counsel Mr. Dastoor of the High Court of Madras in
the case of Anoopchand Chordia (supra) is not at all
applicable to the facts of the present case, wherein it appears
that the trial Court has without assigning any reasons, has
believed the case of plaintiff and discarded the defense of the
defendant and in that background of facts, Madras High Court
has passed the following order. In the present case, except
bare denial, defendants have not substantiated about
execution of promissory note and issuance of cheques in
favour of plaintiff. As such cogent reasons assigned by trial
Court while passing impugned order.
33 Likewise, the facts are not at all similar as canvassed by
the learned counsel Mr. Dastoor in the case of Sudin Dilip
Talaulikar (supra), as in that case, it was a commercial
transaction between the two entities thereby plaintiff appears
to have sold the goods to the defendants and dealings
between the parties already ended on 03.06.2011 and stand
taken by the plaintiff that there was outstanding payment in
respect of transaction, which was ended on 03.06.2011, a
cheque dated 01.03.2014 was made is not believed by the
Hon'ble Supreme Court and in that particular factual
background of case, the unconditional leave was granted by
the Hon'ble Supreme Court. In the present case, it is based
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upon promissory note coupled with cheque.
34 Thus, both these decisions which are relied upon by the
learned counsel Mr. Dastoor are not at all applicable to the
facts of the case and distinguishable on the facts itself.
35 Lastly, the present application is filed under Article 227
of the Constitution of India wherein, except in cases where
there is a gross error law and / or a jurisdictional error
committed by the trial Court, this court ordinarily would not
like to interfere with the impugned orders passed by the trial
Court. (Reference is made to the decision of Sameer Suresh
Gupta TR PA Holder vs. Rahul Kumar Agarwal,[2013 (9)
SCC 374] and Garment Craft v. Prakash Chand Goel,
[(2022) 4 SCC 181]). This Court have not find any such error
on the part of trial Court while passing the impugned order
thereby, no interference of this Court requires while
exercising its power under Article 227 of Constitution of India.
CONCLUSION
36 The upshot of the aforesaid discussion, observation,
reasons and analysis, the present application lacks merit and
requires to be dismissed which is dismissed.
37 Having dismissed the application, now the trial Court is
hereby directed to decide application filed by the plaintiff
below Exh.30, thereby draw the decree as per Order XXXVII
Rule 3 (6) (b) of the Code of Civil Procedure forthwith.
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38 The present application is hereby dismissed. No order as
to costs.
(MAULIK J.SHELAT,J)
SAHIL S. RANGER
