Madhya Pradesh High Court
Anish Kumar vs Agroweb Online Private Limited on 3 March, 2023
Author: Vivek Rusia
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M.P. No. 1064/2023
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE VIVEK RUSIA
&
HON'BLE SHRI JUSTICE ANIL VERMA
ON THE 3rd OF MARCH, 2023
MISC. PETITION No. 1064 of 2023
BETWEEN:-
ANISH KUMAR S/O CHANDRIKA PRASAD JAISWAL 80, KALINDI
MIDTOWN, DEVGURARDIYA, OPPOSITE SAHARA CITY BYPASS
ROAD, INDORE (MADHYA PRADESH)
.....PETITIONER
(SHRI NAMAN NAGRATH, LEARNED SENIOR ADVOCATE WITH SHRI
PARAKRAM SINGH CHOUHAN AND SHRI UTKARSH KUMAR SONKAR,
ADVOCATES FOR THE PETITIONER.)
AND
AGROWEB ONLINE PRIVATE LIMITED 101, KANCHAN VIHAR,
1. KANCHAN BAG SOUTH TUKOGANJ, INDORE (MADHYA
PRADESH)
KRISHAN BIHARI SHARMA S/O SHRI JAGANNATH PRASAD
2. SHARMA 108, INDIRA VIHAR, RICO HOUSING COLONY, KOTA
RAJASTHAN (RAJASTHAN)
K SHANKAR SATISH S/O SHRI KUUPUSWAMY RAMMURTI OLD
3. 10, NEW 24, CENTRAL EXCISE COLONY SAIDAPET, CHENNAI
TAMIL NADU (TAMIL NADU)
AGREE YA SOLUTIONS GULF JLT I NOVATE TEHCNOLOGIES
LTD. UNIT NO. 2501, TIFFANY TOWER, PLOT NO. W2 BOX NO.
4.
120801, JUMERIAH, LAKE TOWER, DUBAI (DADRA & NAGAR
HAVELI)
5. I NOVATE TECHNOLOGIES LTD 203 , PREM AASHRAM,
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M.P. No. 1064/2023
APPARTMENT 12/7 , SOUTH TUKOGANJ, INDORE /AT PRESENT -
80, KALINDI MID TOWN, DEVGURARDIYA, OPP. SAHARA CITY
BYPASS ROAD, INDORE (MADHYA PRADESH)
HDFC BANK, THROUGH BRANCH MANAGER UG 1 AND 2, TRADE
6.
HOUSE, SOUTH TUKOGANJ INDORE (MADHYA PRADESH)
.....RESPONDENTS
(SHRI VEER KUMAR JAIN, LEARNED SENIOR ADVOCATE WITH MS.
VAISHALI JAIN, ADVOCATE FOR THE RESPONDENT NO.1.)
This petition coming on for hearing on admission this day,
JUSTICE VIVEK RUSIA passed the following:
ORDER
The petitioner/defendant No.2 has filed the present petition under Article
227 of the Constitution of India being aggrieved by the order dated 13.12.2018
passed by the Commercial Court, Indore whereby applications filed under
Order 37 Rule 3(5) of C.P.C. seeking leave to defend and under
Order 1 Rule 10 of C.P.C. read with Section 45 of the Companies
Act,1956( now 2013) seeking deletion of his name from the array of
the defendants have been dismissed. The petitioner is also aggrieved
by the order dated 29.10.2022 whereby the application filed under
Order 47 Rule 114 of C.P.C. seeking a review of the order dated
13.12.2018 has been dismissed.
The facts of the case, in short, are as under :
1. Respondent No.1 being the plaintiff has filed a summary suit
against the present petitioner and respondents No.2 to 6 for
recovery of Rs.7,30,57,050/- with interest.
2. The plaintiff ( respondent No.1) and defendants 1 to 4
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M.P. No. 1064/2023
( herein petitioner and respondents No.2, 3 & 4) entered into a loan
agreement dated 27.12.2010 whereby a loan of Rs. 7,30,57,050 was
given by the plaintiff to the defendants under the terms and
conditions written therein. The amount of the said loan was liable to
be repaid by way of instalments. Due to non-payment of the first
instalment another agreement dated 17.9.2012 was executed in
which the defendants admitted their liability and agreed to return
the loan amount to the plaintiff with interest. When the aforesaid
agreements were not complied with, the plaintiff filed the summary
suit under Order 37 of the C.P.C. on 11.7.2013 for recovery of
Rs.7,30,57,050/- along with interest @ 12% per annum. In the suit,
notices were issued to all the defendants and they all individually
appeared before the Court through counsel with an application
seeking permission to defend the suit.
3. Till the filing of the present two applications by the present
petitioners, 24 applications had already been filed by the petitioner
as well as other defendants from the year 2013 to 2019. After the
dismissal of some of the applications as many as 7 Civil Revision,
Writ Petition/s, Review Petition/s, Misc. Petition/s were filed before
this Court. In M.P. No. 5237/2018, the Single Bench of this Court
after considering all the orders passed by this court in Revisions and
petitions dismissed the Writ Petition vide order dated 24.6.2019
with costs of Rs.5,00,000/- with a direction to the trial Court to
decide the suit within a period of 3 months. Copy of the aforesaid
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M.P. No. 1064/2023
order is filed along with the objection filed by respondent
No.1/plaintiff. Hence, the entire order is not liable to be reproduced
here to avoid repletion of the facts in this order.
4. The present petitioner/defendant No.2 after receipt of the
notice appeared before the learned trial Court through an advocate
on 24.1.2015 and objected to the maintainability of the suit for want
of remedy under the Arbitration and Conciliation Act by virtue of an
arbitration clause in the agreement. The said objection came to be
dismissed vide order dated 24.1.2015.
5. Thereafter, the petitioner has filed an application under Order
37 Rule 3(5) seeking leave to defend the suit ..
6. The plaintiff opposed the aforesaid application and vide
impugned order dated 13.12.2018 learned Commercial Court has
dismissed the application.
7. Defendant No.2 also filed an application under Order 1 Rule
10 of C.P.C. seeking deletion of his name on the ground that the suit
is not maintainable against the directors of defendant No.1, because
it is a registered company and that the Managing Director and the
Directors have no independent liability to repay the loan amount to
the plaintiff. Hence the name of defendant No.2 is liable to be
deleted. 8. The application was opposed by the plaintiff by filing a
reply and vide impugned order dated 13.12.2018 the learned
Commercial Court has dismissed both applications. Thereafter,
defendant No.2 filed a review petition which came to be dismissed
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M.P. No. 1064/2023
vide order dated 29.12.2022 and the learned Commercial Court has
fixed suit for final arguments on 11.11.2022. Hence, the present
petition before this Court.
Submissions of the petitioner
9. Shri Naman Nagrath, learned senior counsel appearing for the
petitioner submits that once the right of defence has been denied,
then, now nothing remains to be adjudicated in the summary suit
and straightway a decree of more than Rs.7 Crores would be passed
against the petitioner and being a money decree, the petitioner
would be required to deposit a huge amount before filling First
Appeal. In support of the above contention, learned senior counsel
has placed reliance on the judgment of the apex Court in the case of
Kamlesh Kohli (Smt.) and another V/s. Escotrac Finance &
Investment Ltd. & others : (2000) 1 SCC 324. Shri Naman Nagrath
learned senior counsel submits that the petitioner has sought leave
to defend summary suit inter alia on the ground that - (i) there is an
arbitration clause in the agreement dated 27.12.2010, hence all the
disputes are liable to be decided by an Arbitrator; (ii) notice was
served on a wrong address, therefore, it cannot be treated as a valid
service in the eyes of law; (iii) the company has been made one of
the defendant through Managing Director Shri Pramod Devgirikar
where he had already been removed from the said post and
defendant No.2 is holding the post of Managing Director; (iv) for
the same relief the plaintiff has approached the Company Law
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M.P. No. 1064/2023
Board, Mumbai and this fact has been suppressed in the suit; (v) as
per clause 4.1 of the loan agreement, the loan was liable to be
repaid in 3, 4 and 5 years and the first installment was to be paid on
27.12.2013, but the plaintiff has filed the suit on 10.7.2013,
therefore, the suit is premature; (vi) The plaintiff by way of forgery
and conspiracy with Ranveer Chadha entered into an agreement
dated 24.8.2012 and the suit based on such a forged agreement is
not maintainable. Learned senior counsel submits that the petitioner
facts disclosed by the petitioner constitute a valid defence available
to him to defend the suit, hence unconditional leave to defend
should have been granted to the petitioner. Therefore impugned
orders are liable to be set aside and the leave to defend the suit be
granted to the petitioner to contest the suit.
Contentions of respondent No.1/ the plaintiff
10. Shri Veer Kumar Jain, learned senior counsel appearing for
respondent No.1/plaintiff, contends that the petitioner as well as
other defendants had already raised all sorts of objections by filing
as many as 27 applications before the trial Court to delay the trial.
Except for one application i.e. application u/s. 151 of C.P.C. filed by
defendants No.2 and 3 for hearing on affidavits for leave to defend
has been allowed and the rest of all the applications had been
dismissed by detailed and speaking orders. For challenging some of
the orders passed by the learned commercial court other defendants
approached this Court by way of various writ petitions, civil
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M.P. No. 1064/2023
revisions, misc. petitions, etc. (7 in number) and all of them have
been dismissed. It is further submitted by the learned senior counsel
that the present applications have also been filed on the same
grounds which had been raised by the other defendants earlier and
none of them has been entertained. The grounds on which the is
some relying are mainly the availability of arbitration clause, and
the directors are not liable to pay the amount which is payable by
the company.
11. Shri Jain learned senior counsel further submits that the
summary suit which is filed in the year 2013 has not been decided
to date despite 3 months' time given by this Court on 24.6.2019. So
far rejection of the application under Order 1 Rule 10 Civil
Procedure Code is concerned, the petitioner is a signatory of the
agreement in his own capacity and thereafter, he became Managing
Director of the defendant company. There is no dispute that the
defendants took a loan of Rs. 7,30,57,050/- from the plaintiff and
the same has not been paid so far. Therefore, there is no triable issue
raised by the petitioner to defend the summary suit. Hence, there is
no ground to interfere by this court under art 227 of the Constitution
of India and the petition is liable to be dismissed with costs.
Appreciations & Conclusion
12. Order 37 Rules 2 and 3 so far as relevant read as follows:
"2. Institution of summary suits.--(1) A suit, to which this order applies,
may if the plaintiff desires to proceed hereunder, be instituted by presenting a
plaint which shall contain,--
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M.P. No. 1064/2023
(a) a specific averment to the effect that the suit is filed under this
order;
(b) that no relief, which does not fall within the ambit of this rule, has
been claimed in the plaint; and
(c) the following inscription, immediately below the number of the suit
in the title of the suit, namely--
"(Under Order 37 of the Code of Civil Procedure, 1908)."
(2) The summons of the suit shall be in Form 4 in Appendix B or in such
other form as may, from time to time, be prescribed.
(3) The defendant shall not defend the suit referred to in sub-rule (1)
unless he enters an appearance and in default of his entering an appearance the
allegations in the plaint shall be deemed to be admitted and the plaintiff shall
be entitled to a decree for any sum, not exceeding the sum mentioned in the
summons, together with interest at the rate specified, if any, up to the date of
the decree and such sum for costs as may be determined by the High Court
from time to time by rules made in that behalf and such decree may be
executed forthwith.
3. Procedure for the appearance of defendant.--(1) In a suit to which this
order applies, the plaintiff shall, together with the summons under Rule 2,
serve on the defendant a copy of the plaint and annexures thereto and the
defendant may, at any time within ten days of such service, enter an
appearance either in person or by pleader and, in either case, he shall file in
court an address for service of notices on him.
(2) Unless otherwise ordered, all summonses, notices and other judicial
processes, required to be served on the defendant, shall be deemed to have
been duly served on him if they are left at the address given by him for such
service.
(3) On the day of entering the appearance, notice of such appearance shall
be given by the defendant to the plaintiff's pleader, or, if the plaintiff sues in
person, to the plaintiff himself, either by notice delivered at or sent by a pre-
paid letter directed to the address of the plaintiff's pleader or of the plaintiff, as
the case may be.
(4)***
(5) The defendant may, at any time within ten days from the service of
such summons for judgment, by affidavit or otherwise disclosing such facts as
may be deemed sufficient to entitle him to defend, apply on such summons for
leave to defend such suit, and leave to defend may be granted to him
unconditionally or upon such terms as may appear to the court or judge to be
just:
Provided that leave to defend shall not be refused unless the court is
satisfied that the facts disclosed by the defendant do not indicate that he has a
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M.P. No. 1064/2023
substantial defence to raise or that the defence intended to be put up by the
defendant is frivolous or vexatious:
Provided further that, where a part of the amount claimed by the plaintiff
is admitted by the defendant to be due from him, leave to defend the suit shall
not be granted unless the amount so admitted to be due is deposited by the
defendant in court."
Under subrule (5) the defendant must disclose such facts by way of an
affidavit or otherwise as may be deemed sufficient to entitle him to
defend and as per proviso the court should be satisfied that the facts
disclosed by the defendant do indicate that he has a substantial
defence to raise in the suit which is not frivolous or vexatious.
13. The facts disclosed by the petitioner as stated above had
already been disclosed by other defendants by way of filling
affidavit under Or.37 Rule 3(5) of the Civil Procedure Code and the
court did not grant leave to defend. The said rejection had been
upheld by this High Court. Hence the petitioner has not disclosed
any new facts in the case by way of affidavit or otherwise to open
the right of defence. 14. The facts of the case as stated above are not
in much dispute except for the execution of the second agreement
which the defendants are disputing. The plaintiff is relying on the
said subsequent agreement, for limited purpose whereas the
defendants are disputing its execution by way of fraud and
conspiracy. The entire summary suit is based on an agreement dated
27.12.2010. So far as the subsequent agreement is concerned, prima
facie that is only in respect of settlement arrived at between the
parties for repayment of the loan in an extended period. According
to the plaintiff, after execution of the agreement dated 27.12.2010,
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M.P. No. 1064/2023
defendants No.1 to 4 paid the interest for the period from 1.10.2009
to 30.6.2011, but thereafter, from 1.7.2011 neither the principal
amount nor the interest amount was paid. Thereafter, defendant
No.1 sent a letter dated 10.9.2012 for resolving the dispute. Plaintiff
and officers of defendant No.1 met on 17.9.2012 in which
defendant No.1 agreed to repay Rs.6,00,00,000/- and interest up to
15.9.2012. Prima facie, the subsequent agreement was executed
only to give some more time to repay the loan amount. Primarily,
the suit is based on an agreement dated 27.12.2010.
15. So far as the issue of an arbitration clause in the agreement is
concerned, that had earlier been raised by way of application u/s. 9
by the petitioner and other defendants and learned the trial court
rejected and the said rejection had been upheld by this Court.
16. So far as service of notice on a wrong address is concerned,
that objection is frivolous because only after such service the
petitioner appeared in the Court on 29.7.2013 and raised objections.
Other similar objections raised by the defendants to seek the right to
defend the summary suit had already been decided by this Court.
More so, the present petitioner has no independent defence to be
raised before the Court to defend the summary suit . All the
defendants have common grounds to defend the suit. When other
defendants had been denied leave to defend by the trial Court as
well as by this Court, then the petitioner being CMD and the
signatory of the agreement has no independent right to defend the
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M.P. No. 1064/2023
suit. Learned Court below has not committed any error while
dismissing the applications under consideration which were filed
only to cause the delay in deciding the summary suit. The details of
the applications filed by the defendants before the trial Court and
this Court are as under :
Applications before the Commercial Court :
S.No. Date of Particulars of application. The fate of the
Application. application/date
1 29.07.2013 Application for Leave to Defend Dismissed on
by Defendant No.6 05.05.2017
2 12.08.2013 Affidavit for leave to defend by Dismissed on
Def.2 13.12.2018
3 12.08.2013 Application u/o 7, Rule 11 CPC Dismissed on
by Def. 2 26.03.2014
4 27.08.2013 Application u/o 7, Rule 11 CPC Dismissed on
by Def.3 & 4 26.03.2014
5 11.11.2013 Application U/o. 7 Rule 11, CPC Dismissed on
by defendant No.6 26.3.2014
6 15.4.2014 Application U/o.37 Rule 3(7), Dismissed on
CPC for condonation of delay by 24.4.2017.
defendant No.1.
7 15.4.2014 Application U/o. 37 rule 3(5) of Dismissed on
CPC for leave to defend by 28.4.2017.
defendant No.1
8 15.4.2014 Application u/s. 8 of Arbitration Dismissed on
& Conciliation Act by defendant 24.1.2015
No.1.
9 15.10.2014 Application u/s. 8 of Arbitration Deemed to be
& Conciliation Act by defendants dismissed on
No.2 & 3. 24.1.2015
10 15.10.2014 Application U/o. 11 Rule 12, Dismissed on
CPC by defendant No.1. 24.1.2015
11 24.1.2015 Application U/o. 7 Rule 11, CPC Dismissed on
by defendant No.1 9.12.2015
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M.P. No. 1064/2023
12 21.2.2015 (MJC No.5/2015) Review Dismissed on
petition U/o. 47 Rule 1, CPC 24.7.2015
filed by defendant No.1.
13 4.3.2015 Application u/s. 151 of CPC for Dismissed on
a stay of proceedings filed by 4.3.2015
defendant No.1
14 24.6.2015 Application u/s. 8 of Arbitration Dismissed on
& Conciliation Act filed by 9.12.2015.
defendants No.2, 3 and 4.
15 5.8.2016 Application U/o. 19 rule 1 & 2, Dismissed on
CPC filed by defendants No.2 & 14.9.2016
16 6.3.2017 Application U/o. 7 Rule 11, CPC Dismissed on
filed by defendant No.1 14.9.2016
17 17.1.2018 Application U/o. 37 Rule 3(7), Dismissed on
CPC filed by defendant No.4 25.6.2018 with
costs.
18 255.1.2018 Application U/o. 37 Rule 3(5), Dismissed on
CPC filed by defendant No.3 25.6.2018 with
costs.
19 25.1.2018 Application U/o. 37 Rule 3(7), Dismissed on
CPC filed by defendant No.3 25.6.2018
20 10.7.2018 Application u/s. 151, CPC for Allowed on
hearing on the affidavit for leave 26.9.2018
o defend filed by defendant No.2
on 12.8.2013
21 17.8.2018 Application for review of order Dismissed on
dated 25.6.2018 filed by 26.9.2018
defendant No.3.
22 26.10.2018 Application U/o. 1 Rule 10(2), Dismissed on
CPC filed by defendants No.2 & 13.12.2018 with
3 costs.
23 3.1.2019 Application u/s. 10, CPC filed by 8.2.2022
all the defendants.
24 22.12.2018 Review application filed U/o. 47 Dismissed on
r/w. Section 114/151, CPC filed 29.10.2022.
by defendant No.2.
25 6.12.2021 Application u/s. 2(c) and Section Dismissed on
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M.P. No. 1064/2023
15/16 of the Commercial Courts 17.1.2022.
Act filed by defendant No.2
26 24.2.2022 Application U/o. 47 r/w. Section Dismissed on
114 of CPC filed by defendants 3.3.2022
for review of order dated
8.2.2022
Application/Proceedings before the District Judge :
16.7.2018 Defendant No.2 filed an application u/s. 24, CPC for transfer of
the case.
7.8.2018 Said application was dismissed as not pressed.
Civil Revision/Writ Petition/Review Petition/Misc. Petition before the
High Court :
S.No. Date Case No. Parties Name Fate
1 24.5.2014 CR 102/2014 Novate V/s. Agroweb Dismissed on
20.9.2014
2 30.4.2015 CR 141/2015 Novate V/s. Agroweb Dismissed on
30.9.2015
3 6.4.2017 WP 2321/2017 Novate V/s. Agroweb Dismissed on
19.4.2017
4 2.5.2017 WP 2939/2017 Novate V/s. Agroweb Dismissed on
18.12.2017
5 1.2.2018 RP 169/2018 Novate V/s. Agroweb Dismissed on
7.8.2018
6 25.10.2018 MP 5234/2018 K. Shankar Satish V/s. Dismissed on
Agroweb 20.2.2019
7 6.12.2022 CR 724/2022 Anish Kumar V/s. Dismissed on
Agroweb 31.1.2023
8 MP 5237/2018 Krishan Bihari Sharma Dismissed on
V/s. Agroweb 24.6.2019
From the above, it is clear that the petitioner and all other
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M.P. No. 1064/2023
defendants have filed all the aforesaid applications/revisions/
petitions only to delay the proceedings in the suit filed by the
plaintiff. The petitioner has not disclosed new facts by way of an
affidavit or otherwise to give leave to defend the suit alone when
other defendants do not have such leave to defend. The petitioner
has substantially caused the delay in deciding the summary suit.
In view of the foregoing discussion, this petition fails and is
hereby dismissed.
[ VIVEK RUSIA ] [ ANIL VERMA]
JUDGE. JUDGE.
Alok/-
Digitally signed by ALOK GARGAV
Date: 2023.03.05 19:14:44 +05'30'
