Kapil Deo Pandey v. Vasudeb De — 1985 DIGILAW 90 (CAL)

JUDGMENT 1. THIS appeal by the defendant is directed against the order passed by the Learned judge of the Court of the first instance; on 16th June, 1982 upon the applications; made by the plaintiff under Chapter xiii a of the Original Side Rules of this court. 2. IN or about 1980, the plaintiff. Vasudeb Devshankar Shukla instituted a suit against the defendant, the appellant before us, inter alia, for a decree for' rs. 4,41,350. 32/ -. The plaintiff once obtained an ex-parte decree against; the defendant for the sum as claimed in the plaint. The defendant made an application for setting aside of the said decree and upon payment of assessed costs the decree was set aside. It appears that no direction, however, was given to the defendant to file written statement. On 20th January, 1982 the plaintiff made an application under Chapter xiiia. The defendant contested the application by filing affidavit -in -opposition. The plaintiff filed affidavit- in- reply. In the affidavit in support of the application under Chapter XIIIA the plaintiff has alleged that on the request and orders of the defendant, the plaintiff had from time to time supplied coal to various concerns and the defendant who is interested in and connected with the said concerns agreed to pay the price of such supplies. The defendant, it is alleged, by writing dated 12th September, 1979 and signed by him confirmed and unconditionally acknowledged that a sum of Rs. 4,16,836. 32p. was due and payable by the defendant to the plaintiff with agreed interest at the rate of 12% per annum. The alternative case is that on or about September 12, 1979 the accounts in respect of transactions between the parties were gone into and stated by the said writing dated September 12, 1979 by and between the plaintiff and the defendant in Calcutta and signed by the defendant. By the said writing, the defendant confirmed that a sum of Rs. 4,16,836,32p. was due and payable by him to the plaintiff with agreed interest of 12% per annum. It is also alleged that along with7 the said writing ] dated 12th September, 1979 the defendant had sent to the plaintiff a promissory note for Rs. 4,16,836. 32p. By the said writing, the defendant confirmed that a sum of Rs. 4,16,836,32p. was due and payable by him to the plaintiff with agreed interest of 12% per annum. It is also alleged that along with7 the said writing ] dated 12th September, 1979 the defendant had sent to the plaintiff a promissory note for Rs. 4,16,836. 32p. repayable with agreed interest at the rate of 12% per annum in favour of the plaintiff, but the said promissory note has since been mis-placed by the plaintiff and is not traceable at present. The case which is not made out in the plaint but made out! in the affidavit in support of the said application is that the defendant had also on a previous occasion confirmed in writing dated 24th December, 1976 on the letter head of one Hindusthan Coal. Suppliers the amount then due (Rs. 4,16,836. 32p.) from him to the plaintiff in respect of the said transactions. 3. THE defendant in his affidavit denied having any business transaction with the plaintiff. On the contrary the defendant has stated that he had business transactions since the year 1970 with one M/s. D. M. Shukla and Co. of No. 24 Bra bourne road, Calcutta. The plaintiff was the sole proprietor of that concern until its conversion into a partnership firm, The defendant has denied that any account of the transaction was gone into or was stated in writing on September 12, 1979 or on any other date at Calcutta or any other place. The defendant has categorically stated that there was never any dealing or transaction between the plaintiff in his personal capacity and the defendant and the question of confirming or acknowledging or promising to pay any amount to the plaintiff did not or could not arise. The defendant has denied and disputed the correctness, validity and genuineness of the documents dated 12th September, 1979 and 24th december, 1976. It is further alleged that the plaintiff with knowledge and consent of the said M/s. D. M. Shukla and Co. utilised the blank letter head of the defendant and caused the said documents purported to be dated 12th September, 1979 and 24th December, 1976 prepared. The defendant has also denied having executed any promissory note. 4. It is further alleged that the plaintiff with knowledge and consent of the said M/s. D. M. Shukla and Co. utilised the blank letter head of the defendant and caused the said documents purported to be dated 12th September, 1979 and 24th December, 1976 prepared. The defendant has also denied having executed any promissory note. 4. IN this background the learned Judge passed the following order :- "it is ordered that upon the defendant (your petitioner) furnishing security for the sum of Rs. 2,50,000/- (Rupees two lakhs fifty thousand)only to the satisfaction of the Registrar of this Court within 8 weeks from the date hereof the defendant be at liberty to defend this suit. And it is further ordered that the defendant be at liberty to furnish such security as aforesaid by way of immoveable property in any municipal town in the State of Uttar Pradesh. And it is further ordered that in the event of the defendant furnishing such security as aforesaid within the time aforesaid the defendant be at liberty to file his written statement in this suit within one week thereafter from the date of furnishing security as aforesaid and that in that event the cost of and incidental to this application be costs in the suit. And it is further ordered that in default, of the defendant furnishing such security as aforesaid within the time aforesaid there will be a decree in terms of prayer (a) of the Master's Summons for the sum of Rs. 4,41,850.32 paise against the defendant under Chapter XIIIA of the Rules of this Court. And it is further ordered that the said Registrar and all parties concerned do act on a signed copy of the minutes of this order signed by an officer of this court being produced before them. " Mr. Nripendra Nath Dutt, learned counsel appearing for the appellant has contended that more than one triable issue has been raised and the learned judge should have given unconditional leave to defend the suit. He has submitted that apart from the question of genuineness of the documents relied on by the plaintiff the question of limitation and jurisdiction are also involved. The defendant has wholly denied the claim of the plaintiff and as such the trial court ought to have given unconditional leave to defend. He has submitted that apart from the question of genuineness of the documents relied on by the plaintiff the question of limitation and jurisdiction are also involved. The defendant has wholly denied the claim of the plaintiff and as such the trial court ought to have given unconditional leave to defend. He has relied on several decisions in support of his contention which we shall presently refer. 5. MR. Anindya Mitra the learned counsel appearing for respondent has contended that the appellant sought to frustrate execution of the decree at every stage without furnishing any security whatsoever. The defendant does not disclose such facts as would lead to the inference that at the trial of the action he may be able to establish a defence to the plaintiff's claim. It is submitted that the defendant has not denied the genuineness of his signature appearing on the letter dated 24th, December, 1976" and the letter dated 12th September, 1979. The dates in the said letters have been put by the defendant in his own hand under his signature. The signature of the defendant appears over the typewritten portion of the documents which clearly shows that the document has been typed out before the defendant put his signature. The letter of confirmation dated 12th September, 1979 is not at all on any letter head. He has further submitted that the defendant has not given any reply to the letter of demand dated 18th August, 1979. It is his submission that the defendant has not denied that ' the coal was supplied to the defendant's concern. The partnership firm has no claim in respect of the transaction of the suit, The transaction involved liability of the defendant to the plaintiff personally and not to the partnership firm. He has submitted that the state of defence as disclosed is a moonshine defence. It is also his contention that the trial court, exercised its discretion judicially and there is no perversity or infirmity in exercise of judicial discretion. The appeal Court; therefore, should be slow in interfering with the exercise of such judicial discretion. 6. WE have considered the rival submissions. Chapter XIIIA prescribes the summary procedure in suit, inter alia, to recover debt or liquidated demand. The appeal Court; therefore, should be slow in interfering with the exercise of such judicial discretion. 6. WE have considered the rival submissions. Chapter XIIIA prescribes the summary procedure in suit, inter alia, to recover debt or liquidated demand. Under Rule 3 of Chapter XIIIA where the defendant in any suit has entered appearance the plaintiff may, as regards any claim which is within the terms of Rule 1, on affidavit made by himself or by any other person who can swear positively to the facts verifying the cause of action and the amount claimed if any, and stating that in his belief there is no defence to the claim, apply to the Judge for final judgment for the amount claimed together with interest, if any or for the recovery of the land as the case may be and costs. The defendant may show cause against both application by affidavit. The affidavit shall state whether the defence alleged goes to the whole or to a part only and (if so) to what part of the plaintiff's claim and shall deal specifically with all matters of fact, rule 6 provides that upon such application the Judge may, unless the defendant shall satisfy by affidavit or otherwise that he has a good defence to the claim on its merits or disclose such facts as may be deemed sufficient to entitle him to defend, the Judge make an order refusing leave to defend and forthwith pronounce judgment, in favour of the plaintiff. To resist the claim of the plaintiff, the defendant has to raise a triable issue which requires taking of evidence and which cannot be decided on the affidavit. The affidavit in support of the application under Chapter XIIIA has been affirmed not by the plaintiff but by his son who has affirmed the said affidavit true to his knowledge. It is only after the affidavit- in -opposition was filed by the defendant, a supplementary affidavit was filed by the plaintiff stating, inter -alia, that he authorised his son to affirm the affidavit on his behalf. It is only after the affidavit- in -opposition was filed by the defendant, a supplementary affidavit was filed by the plaintiff stating, inter -alia, that he authorised his son to affirm the affidavit on his behalf. Where the case of the plaintiff is that he had transactions in his personal capacity with the defendant and the partnership firm had no concern at all, the plaintiff himself should have affirmed the affidavit Neither in the plaint nor in the affidavit in support of the application under Chapter XIIIA the particulars of the transactions have been given. It has not been stated since then the transactions by and between the plaintiff and the defendant started The allegations that since the year 1970 the defendant had dealings and transactions in coal with M/s. D. M. Shukla and Co. has not been denied. It has not been denied that the plaintiff was originally the sole proprietor of the said M/s D. M. Shukla and Co. The date of conversion of the sole proprietorship concern into partnership firm, which is a very relevant fact within the knowledge of the plaintiff, has not been disclosed by the plaintiff. The plaintiffs son who affirmed the affidavit has stated as follows : -. "the defendant had dealt with my father and had transactions with him directly. " "i say that my father was previously the sole proprietor of M/s. D. M. Shukla and Co. " it has nowhere been stated by the plaintiff's son in the said affidavit affirmed by him that he was any way connected with the transactions which allegedly took place by and between the plaintiff and the defendant. There is no mention of D. M. Shukla and Co. either in the plaint or in the Affidavit filed in support of the application under Chapter XIIIA. 7. THE question before us is whether in a case like this the defendant is entitled to defend the suit Unconditionally, the plaintiff solely relied on the acknowledgement dated 12th September, 1979. By a writing dated 12th September, 1979 the defendant allegedly confirmed and unconditionally acknowledged that a sum of Rs. 4,16, 836. 32p. with the agreed interest was due and payable by the defendant. The defendant categorically denied the confirmation or acknowledgement. The alternative case of the plaintiff that the account was stated by the said writing dated 12th September. By a writing dated 12th September, 1979 the defendant allegedly confirmed and unconditionally acknowledged that a sum of Rs. 4,16, 836. 32p. with the agreed interest was due and payable by the defendant. The defendant categorically denied the confirmation or acknowledgement. The alternative case of the plaintiff that the account was stated by the said writing dated 12th September. 1979 has also been denied categorically by the defendant. The defendant has challenged the correctness, validity and genuineness of the said writing dated 12th september, 1979. The case of the defendant is that the signed paper has been utilized for the purpose of creating an acknowledgement. Thus the entire case of the plaintiff is based on the said document dated 12th' September, 1970. If this document goes then the whole suit would fail. The question of limitation is also dependant on whether the document dated 12th September, 1979 is genuine or not. The question of jurisdiction has also been raised. Admittedly the defendant does not reside in Calcutta and the suit has been instituted under clause 12 of the Letters Patent. The jurisdiction of this Court to entertain the suit will depend on whether any part of the cause of action has arisen within the jurisdiction of this Court or not It has been alleged that the said writing dated 12th September, 1979 was issued from calcutta and received by the plaintiff at calcutta. Alternatively the account was stated in writing dated 12th September, 1979 by and between the plaintiff and the defendant in Calcutta within the jurisdiction of this Court. Thus that part of the cause of action which gives jurisdiction to this Court to entertain the suit will depend on whether the said writing dated 12th September, 1979 was issued from Calcutta and whether the account stated by the writing dated 12th september, 1979 was signed in Calcutta. Prima facie, therefore, the maintainability of the suit by the plaintiff, limitation and jurisdiction are some of the issues which are likely to arise in this suit. In such a case it cannot be said that the defendant is not entitled to defend the suit unconditionally. 8. WE shall now refer to the decisions cited before us. The first decision is in the case of Radha Kissen Gooka. (vs. Thakursidas Kh-emka reported in 30 C.W.N. 228. In such a case it cannot be said that the defendant is not entitled to defend the suit unconditionally. 8. WE shall now refer to the decisions cited before us. The first decision is in the case of Radha Kissen Gooka. (vs. Thakursidas Kh-emka reported in 30 C.W.N. 228. In that case the plaintiff alleged that there were various dealings with the Defendant, that after the adjustment of the account a sum of Rs. 20,364/-was found due to the plaintiff and the defendant admitted the liability and promised to pay it on demand with interest at the rate of 12 per cent per annum; that at the time of the adjustment the plaintiff held certain shares and jewelleries of the Defendant as security and since adjustment the Defendant had paid Rs. 4,995-4-0 and that the sum of rs. 17,535-1-6 was then due to the Plaintiff with interest, Rs. 5,218-8 9, and the plaintiff prayed for cm order of sale of the securities. After filing the plaint the plaintiff took out summons under Chapter XIIIA for final judgment. The Defendant totally denied that he ever promised to pay interest and stated that the Plaintiff had received various sums from and also on behalf of the Defendant by way of dividends on the snares and asked for an account. The matter came before Ghose, J. on 7th July, 1925, and the directed the Defendant to give security of Rs. 22,753-10-3 within a fortnight, in default the suit to stand decreed for Rs. 22,753-10-3 with costs of suit, the securities were directed to be sold by the Registrar and the sale proceeds to be applied in satisfaction of the decree. There the Court held : "to begin with, the claim for interest was denied and it is entirely a wrong practice under Chapter XIIIA for a learned Judge to order security merely because looking at the statements on either side he rather thinks that the Plaintiff has a better prospect of success then the Defendant. There was a specific denial with respect of this agreement and it would be quite impracticable to decide that matter under Chapter XIIIA". There was a specific denial with respect of this agreement and it would be quite impracticable to decide that matter under Chapter XIIIA". The Division Bench further observed that the said case is one in which proper order would have simply been an unconditional leave to defend; "but it appears that at the last stage of the summons the parties appeared before the learned Judge and the learned Counsel for the Defendant is recorded to have said that he consented to a decree for Rs. 15,000-which he contended was the principal sum due". Mr. Anindya Mitra has sought to. distinguish the aforesaid decision on facts. He has submitted that in that case the Court has rightly held that under chapter XIIIA the Court has no jurisdiction to pass a declaratory decree or to order sale of shares and jewellery. But the decision did not rest on the question whether the Court had jurisdiction under Chapter XIIIA to pass a declaratory decree or to order sale of securities. The Division Bench was of the view that where the defendant denied the agreement which was the basis of the claim for interest, the defendant is entitled to leave to defend unconditionally, even though the plaintiff may pettier prospect of success than the defendant. In our case the correctness, validity and genuineness of the document dated 12th september, 1979 has been totally denied. The claim of the plaintiff is solely dependent on the said document. We are of the view that the principles laid down in the said case would equally apply to the facts of this case. 9. THE next decision is in the case of sm. Kiranmoyee Dassi v. Dr. J. Chatterjee reported in 49 C. W. N. 246. There das, J. observed that "after considering the facts appearing on the affidavits filed herein, there is no doubt in my mind that a triable issue has been raised by the defendant and that the defence applies to the whole of the plaintiffs' claim. It may well be that weighing the probabilities in the light of the criticisms advanced by Mr. Sett the chances of success are more in favour of the plaintiffs than in favour of the defendant; yet it is difficult to say, with any amount of certainty, that the defence is wholly sham or illusory or is bound to fail. It may well be that weighing the probabilities in the light of the criticisms advanced by Mr. Sett the chances of success are more in favour of the plaintiffs than in favour of the defendant; yet it is difficult to say, with any amount of certainty, that the defence is wholly sham or illusory or is bound to fail. If is therefore, clear that the plaintiff is not entitled to final judgment on this summary application and the defendant must have leave to defend the suit. The question is whether such leave should be given unconditionally or subject to terms as to paying into Court or giving'; security. 10. THE following propositions were laid down by Das J :- "(a) If the defendant satisfies the court that he has a good defence to the claim on its merits the plaintiff is not entitled to leave to sign judgment and the defendant is entitled to unconditional leave to defend. (b) If the defendant raises a triable issue indicating that he has a fair or bona fide or reasonable defence although not a positively good defence the plaintiff is not entitled to unconditional leave to defend. (c) If the defendant discloses such facts as may be deemed sufficient to entitle him to defend, that is to say, although the affidavit does not positively and immediately make it clear that he has a defence yet she was such a state of facts as leads to the inference that at the trial of the action he may be able to establish a defence to the plaintiff's claim the plaintiff is not entitled to judgment and the defendant is entitled to leave to defend but in such a case the court may in its discretion impose conditions as to the time or mode of trial but not as to payment into Court or furnishing security, (d) If the defendant has no defence or the defence set up is illusory or sham or practically moonshine then ordinarily the plaintiff is entitled to leave to sign judgment and the defendant is not entitled to leave to defend. (e) If the defendant has no defence or the defence is illusory or sham or practically moonshine then although ordinarily the plaintiff is entitled to leave to sign judgment, the Court may protect 'the plaintiff by only allowing the defence to proceed if the amount claimed as paid into Court or otherwise secured and give leave to the defendant on such condition, and thereby show mercy to the attendant by enabling him to try to prove a defence". In arriving at the said conclusion me learned judge retted on the observation in the case of Radha Kissen Genka vs. Tnakursidas Khemka (supra. k there Das, J. considered various decisions of English Courts on Order 14 of the English Rules. The provisions of chapter XIIIA have been adopted from order 14 of the English Rules. The judgment of Das, J was approved by the supreme Court in the case of M/s. Mechalec Engineers and Manufactures v. M/s basic Equipment Corporation reported in AIR 1977 S. C. 577. There the Supreme Court in paragraph 7 at page 479 observed as follows : "we need not dilate on the well established principles repeatedly laid down by this Court which govern jurisdiction of the High Courts under Section 115, C. P. C. We think that these principles were ignored by the learned Judge of the High court in interfering with the discretionary order after a very detailed discussion of the facts of the case by the learned judge of the. High Court who had differed on pure question of fact whether the defences could be honest and bona fide. Any decision on such a question, even before evidence has been led by the two sides, is generally hazardous. We do not think that it is fair to pronounce a categorical opinion on such a matter before the evidence of the parties is taken so that its effects could be examined. In the case before us, the defendant had denied, inter -alia, liability to pay anything to the plaintiff for an alleged supply of goods. We do not think that it is fair to pronounce a categorical opinion on such a matter before the evidence of the parties is taken so that its effects could be examined. In the case before us, the defendant had denied, inter -alia, liability to pay anything to the plaintiff for an alleged supply of goods. It is only in cases where the defence is patently dishonest or so unreasonable that it could not reasonably be expected to succeed that the exercise of discretion by the trial Court to grant leave unconditionally may be questioned in the judgment of the High Court we are unable to find a ground of interference covered by Section 115, C.P.C." 11. THE Supreme Court in paragraph that page 580 observed that "in Urn. Kiranmoyee Dassi v. Dr. J. Chatterjee. (1945) 49 C.W.N. 246 at p. 253 Das, J after a comprehensive review of authorities on the subject stated that principles applicable to cases covered by Order 37 C.P.C. in the form of the aforesaid propositions. 12. IT may be mentioned that the case in which Das, J laid down the aforesaid propositions was on an application made under Chapter XIIIA of the Original side Rules and not under Order 37 of the Civil Procedure Code. Mr. Mitra has submitted that under the provisions of order 37 the court may grant leave to defend where there is "substantial" defence in contradiction to "-frivolous or vexatious" defence. He has submitted that Rule 6 of Chapter XIIIA also refers to "good defence" Substantial defence or good defence must be understood in the context of the facts and circumstances of each particular case. But where on the facts disclosed in the affidavits it appears that there is a triable issue, it can be said that the defence raised by the defendant is not frivolous or vexatious or no defence at all. It has been contended by Mr. Mitra that in view of the breach of solemn undertaking to the Court by the appellant the appeal is not competent nor main-tainable and should be dismissed. The breach complained of is non-inclusion of the order dated 23rd August, 1982 admitting the appeal and the list of dates' relevant for the determination of the question of limitation. Mitra that in view of the breach of solemn undertaking to the Court by the appellant the appeal is not competent nor main-tainable and should be dismissed. The breach complained of is non-inclusion of the order dated 23rd August, 1982 admitting the appeal and the list of dates' relevant for the determination of the question of limitation. We do not think that on the facts of this case, we shall be justified in dismissing the appeal on the breach of the aforesaid undertaking. We have gone through the records and we find that the appeal has been filed within the period of limitation. The aforesaid undertaking will therefore, stand discharged. 13. IT has also been contended by Mr. Mitra that in default of furnishing security the final judgment has been passed and the decree was sought to be executed. The defendant has not made independent appeal against the execution proceeding and as such this appeal has become infractuous. We are unable to accept this contention. The decree has been passed in this case upon the default of the defendant in furnishing the security as directed by the learned Judge. The decree does not stand by itself. It rests upon the default of the defendant in complying with the order for furnishing security. If the appeal is allowed giving the defendant unconditional leave to defend, in that event the decree will become honest. If the condition directing the furnishing of security goes, the decree which rests on non- compliance of the said condition must necessarily fail. 14. HAVING regard to the facts of this case we are of the view that triable issues have been raised in this case and the defence is not wholly illusory or sham or practically moonshine. It may be (hat the defence may not be positively a good defence but it cannot be held to be unfair or mala fide or unreasonable defence or a defence which is bound to fail at the trial. The facts disclosed in this case prima facie show that at the trial of the action the plaintiff may be able to establish a defence to the plaintiff's claim. In that view of the matter the plaintiff is not entitled to final judgment on the summary application and the defendant is entitled to unconditional leave to defend -. The appeal is, therefore, allowed. The order under appeal is set aside. In that view of the matter the plaintiff is not entitled to final judgment on the summary application and the defendant is entitled to unconditional leave to defend -. The appeal is, therefore, allowed. The order under appeal is set aside. The defendant is given leave to defend the suit unconditionally. We make it clear that we have not expressed any opinion as to the merits or the ultimate result of the suit. The defendant shall file the written statement within 3 weeks from date. Affidavits of documents shall be filed by both the parties within 2 weeks thereafter and inspection be given forthwith thereafter. Let the suit appear in the appropriate prospective list 6 weeks hence. It is desired that the suit should be disposed of as expeditiously as possible. 15. ALL parties to act on a signed copy of the operative part of this order. There will be no order as to costs.