[Cites 17, Cited by 0]
Karnataka High Court
Sri. Annapurneswari Ginning vs M/S Udaya Krishna Mills on 23 February, 2026
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R.F.A. No.382/2019
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 23RD DAY OF FEBRUARY, 2026
PRESENT
THE HON'BLE MRS. JUSTICE ANU SIVARAMAN
AND
THE HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL
REGULAR FIRST APPEAL NO.382/2019 (MON)
BETWEEN:
SRI. ANNAPURNESWARI GINNING
AND PRESSING INDUSTRIES
REPRESENTED BY ITS PARTNERS.
a. SRI. VISHWANATH B. PATIL
Digitally signed by S/O BABU RAO PATIL
ARSHIFA BAHAR
KHANAM AGED ABOUT 55 YEARS.
Location: HIGH
COURT OF b. SMT. AMRUTA V. PATIL
KARNATAKA W/O SRI. VISHWANATH B. PATIL
AGED ABOUT 51 YEARS.
BOTH ARE R/O NO.110/5F
RMC LINK ROAD, DAVANAGERE -577 001.
...APPELLANTS
(BY SRI. R. GOPAL, ADV.,)
AND:
M/S. UDAYA KRISHNA MILLS
A PARTNERSHIP FIRM
REPRESENTED BY ITS PARTNERS.
a. SRI. A. SUBRAMANIAN
S/O S. ARMUGA GOUNDER
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AGED ABOUT 53 YEARS.
b. SMT. S. MEENA
AGED MAJOR.
BOTH R/O. 7-A, EAST STREET
KARUGAM PALAYAM
ICHIPATTY POST, VIA SOMANUR -641668
TIRUPUR DISTRICT, TAMIL NADU.
...RESPONDENTS
(BY SRI. RAM SINGH K, ADV., FOR R1(a & b))
THIS RFA IS FILED UNDER SECTION 96 R/W ORDER 41
RULE 1 OF CPC, PRAYING TO ALLOW THE APPEAL AND SET
ASIDE THE IMPUGNED ORDER AND DECREE DATED 22.11.2018
PASSED BY THE COURT OF II ADDL. SENIOR CIVIL JUDGE AND
JMFC AT DAVANAGERE IN O.S.NO.198/2017 AND
CONSEQUENTLY DISMISS I.A.NO.2 AND REMIT THE SUIT FOR
DISPOSAL AFRESH IN ACCORDANCE WITH LAW, IN THE ENDS
OF JUSTICE AND EQUITY.
THIS APPEAL HAVING BEEN HEARD AND RESERVED ON
13.02.2026, COMING ON FOR PRONOUNCEMENT OF
JUDGMENT, THIS DAY VIJAYKUMAR A. PATIL J., DELIVERED
THE FOLLOWING:
CORAM: HON'BLE MRS. JUSTICE ANU SIVARAMAN
and
HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL
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R.F.A. No.382/2019
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CAV JUDGMENT
(PER: HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL)
This appeal is filed by the appellants under Section
96 read with Order XLI Rule 1 of the Code of Civil
Procedure, 1908 (hereinafter referred to as 'CPC')
challenging the order dated 22.11.2018 passed on
I.A.No.II in O.S.No.198/2017 by the II Additional Senior
Civil Judge and JMFC, Davanagere (hereinafter referred to
as 'the trial Court').
2. The brief facts leading to the filing of this
appeal are that the appellants filed suit for recovery of
Rs.26,07,956/- together with current and future interest at
the rate of 15% p.a. on Rs.22,54,160/- from the date of
suit till realization. In the said suit, the respondents-
defendants filed an application - I.A.No.II under Order VII
Rule 11(d) read with Section 151 of CPC for rejection of
plaint, which came to be allowed under the impugned
order. Being aggrieved, the plaintiffs are in appeal.
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3. Sri.R.Gopal, learned counsel appearing for the
appellants-plaintiffs submits that the trial Court committed
a grave error in rejecting the plaint by considering the
averments made in the written statement. It is submitted
that the plaint was rejected for non production of prior
permission from the market committee as required under
Section 84(4) of the Karnataka Agricultural Produce
Marketing (Regulation and Development) Act, 1966, (for
short, 'APMC Act'), which is incorrect. It is further
submitted that the trial Court ought to have framed an
issue and allowed the plaintiffs to adduce evidence and
meanwhile they would have produced the permission from
the marketing committee. It is also submitted that the
issue involved is squarely covered by the decision of this
Court in the case of Mahantayya Basalingayya Koppal vs.
Sri.Kottureswar & Co.1 and submits that the production of
permission from the marketing committee is a curable
defect and now the appellants have produced the same
1972 (1) KAR.LJ 555
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with the appeal and the suit being within the period of
limitation, the production of certificate is also within the
limitation period, hence, appeal is required to be allowed
by remanding the matter back to the trial Court to
consider the suit on merits. It is also submitted that the
appeal is a continuation of suit, hence, the same principle
applies to appeals also and the Court is also required to
take into account subsequent events and in support of said
preposition, he placed reliance on the decision of the
Hon'ble Supreme Court in the case of Pasupuleti
Venkateswarlu v. The Motor and General Traders2
and Inderchand Jain (Dead) Through LRs vs. Motilal (Dead)
Through LRs . Hence, he seeks to allow the appeal.
4. There is no representation on behalf of
respondents on the previous date of hearing and to
provide one opportunity, the matter was ordered to be re-
AIR 1975 SC 1409
(2009) 14 SCC 663
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listed. However, even today there is no representation for
the respondents.
5. We have heard the arguments advanced by the
learned counsel appearing for the appellants and perused
the material available on record. We have given our
anxious consideration to the submissions advanced.
6. The point that arises for our consideration in
this appeal is:
"Whether the impugned judgment of the
trial Court calls for any interference?"
7. The above point is answered in the affirmative
for the following reasons.
8. The appellants filed O.S.No.198/2017 for
recovery of Rs.26,07,956/- together with current and
future interest at the rate of 15% p.a. on Rs.22,54,160/-
from the date of suit till realization. In the said suit, the
defendants filed an application - I.A.No.II under Order VII
Rule 11(d) of CPC for rejection of plaint, which came to
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allowed under the impugned judgment. The trial Court
rejected the plaint on the ground that the appellants-
plaintiffs being the APMC licencing merchant, having
Licence No.KT41715, have not obtained prior sanction
from the marketing committee of the said APMC prior to
filing of the suit as required under Section 84(4) of the
APMC Act. Hence, the suit is barred under Section 84(4) of
the APMC Act. A perusal of the plaint averments does not
indicate anything with regard to obtaining or non obtaining
of permission, however, the trial Court considered the
application of the respondent-defendant filed for rejection
of plaint and by considering the law, allowed the
application by rejecting the plaint.
9. The law mandates that no suit shall to be
'entertained' by any Court in respect of disputes referred
to in sub section 1 of Section 84 of the APMC Act without
previous sanction of the marketing committee. The plaint
averments is silent with regard to obtaining or not
obtaining of the sanction of the marketing committee and
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the trial Court based on the averments made in the
application and the provision of APMC Act, rejected the
plaint. In our considered view, the trial Court ought to
have considered the law laid down by this Court in the
case Mahantayya Basalingayya Koppal referred supra.
The perusal of the said judgment clearly indicates that the
suit can be entertained if the permission is obtained and
produced during the pendency of the said suit and the
production of such permission/sanction by the marketing
committee should be within the time of limitation as per
Article 15(2) of Limitation Act, 1963. Learned counsel for
the appellants have contended that the appeal is nothing
but an extension of suit, hence, the principles laid down in
the said case are squarely applicable to the case on hand.
10. It would be useful to refer to the decision of the
Hon'ble Supreme Court in the case of Nusli Neville
Wadia v. Ivory Properties4, wherein it was held as
under:
(2020) 6 SCC 557
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35. The expression "entertain" means to admit a thing
for consideration. When a suit or proceeding is not
thrown out in limine, but the court receives it for
consideration for disposal under the law, it must be
regarded as entertaining the suit or proceeding. It is
inconsequential what is the final decision. The word
"entertain" has been held to mean to admit for
consideration, as observed by this Court in Lakshmi
Rattan Engg. Works Ltd. v. CST [Lakshmi Rattan Engg.
Works Ltd. v. CST, AIR 1968 SC 488] . The expression
"entertain" means to adjudicate upon or to proceed to
consider on merits as observed in Hindusthan
Commercial Bank Ltd. v. Punnu Sahu [Hindusthan
Commercial Bank Ltd. v. Punnu Sahu, (1971) 3 SCC
124].
36. The meaning of the word "entertain" has been
considered to mean "adjudicate upon" or "proceed to
consider on merits". It has been observed in Hindusthan
Commercial Bank Ltd. v. Punnu Sahu [Hindusthan
Commercial Bank Ltd. v. Punnu Sahu, (1971) 3 SCC 124]
as under : (SCC pp. 125-26, para 4)
"4. Before the High Court it was contended on behalf
of the appellant, and that contention was repeated in this
Court, that clause (b) of the proviso did not govern the
present proceedings as the application in question had
been filed several months before that clause was added
to the proviso. It is the contention of the appellant that
the expression "entertain" found in the proviso refers to
the initiation of the proceedings and not to the stage
when the court takes up the application for consideration.
This contention was rejected by the High Court relying on
the decision of that Court in Kundan Lal v. Jagan Nath
Sharma [Kundan Lal v. Jagan Nath Sharma, 1962 SCC
OnLine All 38 : AIR 1962 All 547] . The same view had
been taken by the said High Court in Dhoom Chand
Jain v. Chaman Lal Gupta [Dhoom Chand Jain v. Chaman
Lal Gupta, 1962 SCC OnLine All 29 : AIR 1962 All 543]
and Haji Rahim Bux v. Haji Sanaullah & Sons [Haji Rahim
Bux v. Haji Sanaullah & Sons, 1962 SCC OnLine All 156 :
AIR 1963 All 320] and again in Mahavir Singh v. Gauri
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Shankar [Mahavir Singh v. Gauri Shankar, 1963 SCC
OnLine All 221 : AIR 1964 All 289] . These decisions
have interpreted the expression "entertain" as meaning
"adjudicate upon" or "proceed to consider on merits".
This view of the High Court has been accepted as correct
by this Court in Lakshmi Rattan Engg. Works
Ltd. v. CST [Lakshmi Rattan Engg. Works Ltd. v. CST,
AIR 1968 SC 488] . We are bound by that decision, and
as such, we are unable to accept the contention of the
appellant that clause (b) of the proviso did not apply to
the present proceedings."
The word "entertain" came up for consideration
in Hindusthan Commercial Bank Ltd. [Hindusthan
Commercial Bank Ltd. v. Punnu Sahu, (1971) 3 SCC 124]
in the context of Order 21 Rule 90 as amended by the
Allahabad High Court. The expression "entertain" has
been held to mean to adjudicate upon or proceed to
consider on merits.
11. Keeping in mind the enunciation of law laid
down by the Hon'ble Supreme Court in the case of Nusli
Neville Wadia referred supra and Mahanayya
Basalingayya Koppal referred supra, we are of the
considered view that the sanction mandated under Section
84(4) is a curable defect and will not bar a suit from being
filed. The word 'entertained' in Section 84(4) of the Act is
to be interpreted as consideration of a suit on merits and
not registration or filing of a suit. In the instant case, the
appeal was filed on 18.02.2019 and along with said
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appeal, the appellants have filed an application under
Section 151 read with Order XLI Rule 27 of CPC seeking to
produce the copy of the application dated 04.09.2018
received by APMC, Davanagere, on 06.09.2018 seeking
permission/sanction; copy of the notice dated 02.01.2019
issued by the APMC to the appellants to appear for enquiry
on 07.01.2019 for consideration of their application for
sanction; copy of the resolution of APMC, Davanagere,
dated 07.01.2019 and copy of communication of the
decision granting sanction under Section 84(4) of the
APMC Act dated 10.01.2019. The aforesaid events clearly
indicate that the appellants'-plaintiffs' application was
considered by the APMC and sanction was accorded under
Section 84(4) of the APMC Act as per order dated
10.01.2019. It is to be noticed that the suit for recovery of
money is filed based on invoices dated 22.07.2016 and
10.08.2016. The invoices and plaint averment indicate
that the appellants have provided credit of 15 days and if
15 days is excluded from the invoice date as per Article
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15(2) of the Limitation Act, three years limitation period
would come to an end in the month of September 2019
and the suit for recovery was filed on 16.12.2017, which is
within the period of limitation and granting sanction by the
APMC under Section 84(4) of the APMC Act dated
10.01.2019 is also within the period of limitation. Having
held that the appeal is continuation of the suit proceedings
and now the appellants-plaintiffs have produced the
sanction accorded by APMC to file a suit, we are of the
considered view that interest of justice would be met if we
remand the matter back to the trial Court to consider the
suit on merits.
12. Learned counsels for the appellants have
contended that the subsequent event of granting sanction
by APMC is required to be taken note of.
13. Considering the said submission and taking
note of the decision of Hon'ble Supreme Court in the case
of Pasupuleti Venkateswarlu referred supra, we are of the
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considered view that the production of sanction required
under Section 84(4) of the APMC Act, now having been
produced in the appeal, the defect in filing the suit is cured
and the substantive right of appellants-plaintiffs to recover
the money based on aforesaid two invoices cannot be
scuttled for non production of sanction from APMC at the
time of presentation of the plaint.
14. For the aforementioned reasons, we proceed to
pass the following:
ORDER
i. This appeal is allowed with costs.
ii. The order dated 22.11.2018 passed on
I.A.No.II in O.S.No.198/2017 by the II
Additional Senior Civil Judge and JMFC,
Davanagere, is hereby set aside and
consequently I.A.No.II is rejected. The
suit is restored.
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iii. The trial Court shall consider the suit on
merits and in accordance with law.
iv. The observations made by this Court are
limited only to the extent of consideration
of impugned order.
v. It is open for the trial Court to adjudicate
the suit on merits and in accordance with
law.
vi. Registry shall refund the eligible Court
fees to the appellants on proper
identification.
No order as to costs.
Sd/-
(ANU SIVARAMAN)
JUDGE
Sd/-
(VIJAYKUMAR A. PATIL)
JUDGE
BSR
List No.: 3 Sl No.: 2
