Madhya Pradesh High Court
Jyoti Ltd. vs Anil Steel Works on 28 February, 2024
Author: Pranay Verma
Bench: Pranay Verma
1
IN THE HIGH COURT OF MADHYA PRADESH
AT I N D O R E
BEFORE
HON'BLE SHRI JUSTICE PRANAY VERMA
WRIT PETITION No. 21454 of 2019
BETWEEN:-
JYOTI LTD. AUTHORIZE SIGNATORY
SHRI V.V. DESHMUKH S/O VINAYAK RAO
DESHMUKH REGISTERED OFFICE:
NANUBHAI AMIN MARG, INDUSTRIAL
AREA, P.O. CHEMICAL INDUSTRIES,
VADODARA (GUJRAT) (GUJARAT)
.....PETITIONER
(BY SHRI PARESH JOSHI - ADVOCATE)
AND
ANIL STEEL WORKS THROUGH
PARTNER SHRI ARPIT SURANA S/O
PUNYAPAL SURANA 402, SHEKHAR
1.
CENTRAL, 4-5, MANORAMAGANJ,
PALASIA SQUARE, INDORE (MADHYA
PRADESH)
SHRI ARPIT SURANA S/O PUNYAPAL
SURANA OCCUPATION: PARTNER ANIL
2. STEEL WORKS 109-A, SECTOR-B,
SANWER ROAD, INDUSTRIAL AREA,
INDORE (MADHYA PRADESH)
.....RESPONDENTS
(BY SHRI RANJEET SEN - ADVOCATE )
.................................................................................................................
Reserved on : 05.02.2024
Pronounced on : 28.02.2024
................................................................................................................
Signature Not Verified
Signed by: NEERAJ
SARVATE
Signing time: 06-03-2024
13:58:26
2
This petition coming on for admission this day, the court passed
the following:
ORDER
1. This petition under Article 226/227 of the Constitution of India
has been preferred by the plaintiff/petitioner being aggrieved by the
order dated 19.08.2019 passed in Civil Suit No.RCSB/05/2019 by the
Commercial Court, District Indore whereby the application under Order
37 Rule 3 of the CPC preferred by the defendants/respondents for grant
of leave to them to defend the suit has been allowed.
2. The plaintiff has instituted an action against the defendants for
recovery of a sum of Rs.2,79,73,976/- from the defendants under the
provisions of Order 37 Rule 1 and 2 of the CPC. Upon service of
summons upon them the defendants filed an application under Order 37
Rule 3 of the CPC for grant of leave to them to defend the suit which
has been allowed by the Commercial Court by the impugned order.
3. The aforesaid order has been challenged by the plaintiff on the
ground that the sale note which has been relied upon has no bearing on
the present case since a fresh work order dated 18.06.2018 has been
issued by the defendants in favour of the plaintiff. The defence taken by
the defendants in the application cannot be said to be a real one and is
on the contrary imaginary and baseless. The documents brought on
record by the plaintiff including the undertaking with regard to payment
of the balance amount have not been disputed by the defendants. After
issuance of the work order dated 18.06.2008 all the other work orders
automatically came to an end. The letter dated 13.08.2015 whereby
undertaking for payment of balance amount was given by the
defendants has not been considered. The sale note relied upon by the
defendants is not a contract between the parties and has no bearing once
fresh work order has been issued. In the available facts of the case the
Commercial Court has erred in granting unconditional leave to the
defendants to defend the suit and instead the application filed by them
ought to have been rejected.
4. Per contra, learned counsel for the defendants has submitted that
cogent reasons have been given by the Commercial Court for granting
leave to the defendants to contest the suit. In the application filed by the
defendants they have raised a plausible defence for contesting the suit
and it cannot be said that the defence as raised by them is imaginary.
The suit has been instituted by the plaintiff for recovering an amount of
Rs.2,79,73,976/- which is a huge amount the recovery of which as
sought for by the plaintiff deserves to be contested by the defendants.
The impugned order is a discretionary order and is not liable to be
interfered with in exercise of supervisory jurisdiction by this Court in
view of which the petition deserves to be dismissed.
5. I have considered the submissions of the learned counsel for the
parties and have perused the record.
6. The suit has been instituted by the plaintiff for recovery of an
amount of Rs.2,79,73,976/- from the defendants claiming it to be an
amount paid to them under a work order dated 13.03.2008 and a
subsequent work order dated 18.06.2008. It is contended by plaintiff
that under both the aforesaid work orders supply was made to the
defendants but payment for the same has not been done in entirety
hence plaintiff is entitled for recovery of the said amount from the
defendants.
7. The defendants have contended in their application that the work
order dated 13.03.2008 was issued by the plaintiff on the basis of
supply and erection work. By letter dated 13.05.2018 the defendants
denied the execution work and stated that there is limited scope of
supply of equipments only. It is further submitted that the plaintiff has
not filed a sale note dated 08.05.2008 which is a material document for
determining the dispute between the parties. Relying upon the same
leave to defend has been granted by the Commercial Court in which no
fault can be found.
8. In IDBI Trusteeship Services Limited V/s. Hubtown Limited
(2017) 1 SCC 568 the principles as regards leave to appeal in a suit
instituted under Order 37 of the CPC have been considered in detail and
it has eventually been held as under :-
"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.
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."
9. From the material available on record it appears that plaintiff has
instituted the suit by pleading the work order dated 13.03.2008 and
18.06.2008 and on that basis has contended that the defendants are
liable to pay the amount to them as claimed. In the application for grant
of leave to defend the defendants have relied upon a sale note dated
08.05.2008 to contend that on the basis of the same plaintiff is not
entitled for recovery of the amount as claimed by it. The same has been
found to be a plausible defence by the Commercial Court on the basis
of which the impugned order has been passed granting leave to
defendants to defend the suit. The Commercial Court has hence
considered the submissions of both the parties and has thereafter held
that the defendants deserve to be granted the leave to defend.
10. All the contentions which have been raised by the plaintiff in this
petition for challenging the impugned order are matters which are
required to be considered at the appropriate stage of proceedings. For
the present it has only to be seen whether the defendants have raised a
triable issue before the Commercial Court for grant of leave to them to
defend the suit. In my opinion, the Commercial Court has rightly
observed that a triable issue has been raised by the defendants on the
basis of which they deserve to be granted leave to defend. No error in
the aforesaid order is found.
11. Moreover the order passed by the Commercial Court is a
discretionary order and has been passed in sound exercise of
jurisdiction vested in it. It cannot be said that while passing the
impugned order the Commercial Court has exercised its jurisdiction
illegally or with material irregularity. The valuable rights of the
defendants are involved wherein they are seeking to defend recovery of
an amount of Rs.2,79,73,976/- from them. They certainly deserve to
have a hearing in the matter. They have shown that they have a fair and
reasonable defence although not a positively good defence hence are
entitled to unconditional leave to defend as has rightly been granted by
the Commercial Court.
12. Thus in view of the aforesaid, I do not find any error having been
committed by the Commercial Court in passing the impugned order as a
result of which the same is affirmed and the petition is dismissed.
(PRANAY VERMA)
JUDGE
ns
