National Agency represented by its Partner, G. Chandrasekaran and others v. K. Nanda Gopal Chetty
2004-03-29
K.GNANAPRAKASAM
body2004
DigiLaw.ai
ORDER: The revision petitioners are the defendants and they question the validity of the suit filed under summary procedure, as the plaintiff, has not complied with the mandatory requirements of the procedure, as contemplated under O.37, C.P.C., 1908. 2. The suit of the plaintiff is for recovery of Rs.1,37,968.60 in respect of the goods sold and delivered to the defendants and the claim is for the definite/ascertained amount and therefore, there is no impediment for the maintainability of the suit. 3. The case of the revision petitioners is that there is a dispute with regard to the quality of the goods supplied by the plaintiff and the plaintiff agreed to reduce the rate of the oil, as per its quality and on such reduction, any amount that would be found payable would be paid by the petitioners/defendants and the amount payable by the defendants is an unascertained amount and therefore, the suit filed under O.37, C.P.C. is not maintainable. 4. The defendant states that the plaintiff took out an application for attachment before judgment of the defendants’ properties, and the Court had ordered the defendants to furnish security of the petition mentioned property in S.No.29/5E3, in Solamedu Village, Koloiyanur Panchayat, Villipuram and the defendants have filed an affidavit, stating that the said property could not be furnished as security, since they have already entered into an agreement of sale of the said property on 26.5.2003 itself, with a third part, viz., D.Govindaraj and voluntarily came forward to furnish security of another property owned by Chidambaram situated in different place and the security furnished by the revision petitioners/defendants was neither accepted nor rejected. 5. Pending disposal of the offer made by the defendants in furnishing the security, the Court passed further order directing the defendants to pay a sum of Rs.2,00,000 out of the suit claim to the plaintiff and there same is questioned by the defendants.
5. Pending disposal of the offer made by the defendants in furnishing the security, the Court passed further order directing the defendants to pay a sum of Rs.2,00,000 out of the suit claim to the plaintiff and there same is questioned by the defendants. The defendants have questioned the validity of the suit on the following grounds: (1) The inscription immediately below the number of the suit, in the title of the suit, viz., (under O.37 C.P.C., 1908), is missing as it is required under O.37, Rule 2(1), C.P.C. (2) The plaint contains O.S.No. So, the suit has got to be converted into an ordinary suit under O.7, Rule 1, C.P.C. (3) The plaintiff has not served any affidavit verifying the cause of action, the amount claimed and stating that in his belief, there is no defence to the suit, as contemplated under O.37, Rule 3(4) C.P.C., but, on the other hand, the respondent’s Advocate has served to the petitioners’ advocate on 25.9.2003 only a summons for judgment in form No.4A in Appendix B of C.P.C. (4) The suit of the plaintiff also does not come within the purview of O.37, Rule 2(1), C.P.C.. 6. The trial Court, after taking into consideration the averments in the affidavit and the counter, came to the conclusion that the defendants did not deny the entire liability, but, on the other hand, they have stated that the amount has got to be reduced as the goods supplied by the plaintiff were defective in nature and therefore, the trial Court felt that only a conditional leave alone could be granted and accordingly directed the defendants to pay a sum of Rs.2,00,000 of the suit claim straight away to the plaintiff and on such condition, the defendants were permitted to file a written statement. The said order is being questioned in this civil revision petition. Heard, the learned Advocate for the revision petitioners and the respondent. 7.
The said order is being questioned in this civil revision petition. Heard, the learned Advocate for the revision petitioners and the respondent. 7. The questions arise in this case are: (1) whether the suit claims, would fall within the categories of the suits as prescribed under O.37, C.P.C. And (2) whether the respondent/plaintiff has complied with all the requirements in filing the suit of summary procedure as required under O.37, C.P.C. especially when the description of the suit is not properly titled, and (3) Whether the trial Court is correct in directing the defendants to pay a sum of Rs.2,00,000, out of the suit claim straight away to the plaintiff, as a condition for permitting them to file a written statement, when the defendants have already furnished security in the application taken out by the plaintiff in I.A.No.13400 of 2003? 8.Point No.1: The suit of summary procedure as provided under O.37, C.P.C. applies to certain kinds of suits only as set forth in O.37, Rule 1(2), which states as follows: "Subject to the provisions of Sub-rule (1), the Order applies to the following classes of suits, namely: (a) suits upon bills of exchange, hundies, promissory notes; (b) suits in which the plaintiff seeks only to recover a debt or liquidated demand in money payable by the defendant, with or without interest, arising: (i) on a written contract, or (ii) on an enactment, where the sum sought to be recovered is fixed sum of money or in the nature of a debt other than a penalty; or (iii) on a guarantee, where the a claim against the principal is in respect of a debt or liquidated demand only. The present suit filed by the plaintiff is in respect of the goods sold and delivered and the amount claimed is also an ascertained amount. But, however, the learned Advocate for revision petitioners/defendants would contend that there is no written contract between the plaintiff and the defendants for the claim of this amount as contemplated under O.37, Rule 1(2)(b). As such, the suit itself is not maintainable. 9. The petitioner relied upon the case of M/s. West Bengal Decorating Company v. Damodar Das Daga, A.I.R. 1982 Cal. 386, wherein it was held, "A suit for recovery of price of goods sold and delivered which is not founded on a written contract cannot be said to arise on an enactment.
As such, the suit itself is not maintainable. 9. The petitioner relied upon the case of M/s. West Bengal Decorating Company v. Damodar Das Daga, A.I.R. 1982 Cal. 386, wherein it was held, "A suit for recovery of price of goods sold and delivered which is not founded on a written contract cannot be said to arise on an enactment. Therefore, such a suit does not come within the meaning of O.37, C.P.C." 10. In M/s.J.K.Enterprise v. Prithviraj Ratanchand Mehta and another, A.I.R. 1991 Bom. 162, the questioned arose for consideration of the Court in the said case was regarding the correctness or otherwise of the order granting conditional leave to the defendant in a summary suit. That case arose in respect of the goods supplied by the plaintiff were found to be of inferior quality and suffered from some weaving defects and hence, the defendants were either not liable to pay the amount claimed or were liable to pay the lesser amount. The fact that the goods were initially delivered to the defendants as per the details mentioned in the 3 bills, referred to above, were not disputed. That in the said context, it was held that, "Part of claim admitted, but defence taken that goods supplied were of inferior quality and the order granting conditional leave upheld." 11. In M/s.Pragathi Bearings v. M/s.Laxmi Durga Granites Limited, A.I.R. 2001 A.P. 56, the plaint does not contain proper plea and it was held, "There must be a specific pleading touching upon the jurisdiction of the Court. On a perusal of the entire averments made in the plaint, there has been no specific averment that the conditions stipulated at the foot note of the invoices would by themselves amount to a written contract. Had there been such an averment in the plaint, that would have been sufficient enough to give jurisdiction to the Court under O.37 of the Code, so long as it is not found that it is a camouflage or a trick in the pleading." 12. The case in Sunil Enterprises and another v. SBI Commercial and International Bank Limited, (1998)5 S.C.C. 354 , deals with bills of exchange.
The case in Sunil Enterprises and another v. SBI Commercial and International Bank Limited, (1998)5 S.C.C. 354 , deals with bills of exchange. It is stated that the bills of exchange were accepted by the defendant even though they had already discharged earlier bills of exchange as and when they were due and the Bank had continued to pay out large amounts of bills of exchange accepted by the party who was already a defaulter. It was also contended that some of the bills of exchange were mere secondary documents and therefore, these matters required examination. That only in the said circumstances, the Court held that it cannot be said that the defence raised by the appellants is totally defenceless or moonshine or illusory and therefore, passed an order granting leave to the defendant to defend the suit. 13. On the contrary, the learned Advocate for the respondents relied upon the case of Lucky Electrical Stores, by partner Mahendra Kumar Shah and another v. Ramesh Steel House, by Partner Babulal, (1988)1 L.W. 574 , wherein this Court considered the scope of O.37, Rules 1, 2 and 4 and O.41, Rule 5(3) and also the scope of a written contract as required under O.37, Rule 1(2), C.P.C. This Court, (M.N.Chadurkar, C.J.), after considering several decisions on this point and also analysing O.37, Rule 1(2), C.P.C. had opined, “Under Clause (b) of Rule 1(2), a summary suit can be filed to recover liquidated demand in money payable by the defendant, arising on a written contract. What is necessary for the purpose of this case is is that a liquidated demand in money must arise on a written contract. A written contract or a contract in writing need not always be a contract signed by both parties. The Court of appeal in S.A.Aruf and Co Limited v. Pauwells, (1919)1 K.B. 660, was called upon to consure the words’,” contract in writing“. By considering the said judgment rendered in the said case, it was observed,” There is, therefore, sufficient authority to indicate that even though the invoice or the bills is not signed by the other party to the contract, as a result of the acceptance of the goods delivered in pursuance of the invoice the demand for the price of goods admittedly received by the purchaser on the basis of the invoice must be said to arise on ‘written contract’.
“ Even in the said case, the defendants had received goods in pursuance of their order and the goods were expressly supplied to them and the defendants admitted that they were liable to pay some amount. In the said context, it was held,” At best they may be entitled to a conditional leave to defend on the deposit of the admitted amount. “ By relying upon the said judgment, the learned Advocate for the respondents state that the conditional order of attachment passed by the Court below is proper and the same cannot be questioned. 14. In Minerals and Metal Trading Corporation Limited v. Dimple Overseas Limited, A.I.R. 2001 Del. 427, there was a contract for supply of goods and the supplier and the transporter did not dispute the quantity of goods supplied. There was a dispute only in respect of the quality of the goods and the said dispute was raised long after the supply of goods and in the said context, it was held that it was an after thought for avoiding payment and in the said circumstances, leave to defend the suit was not granted. In our case also, the defendants have not stated anything in the letter dated 9.4.2003, but, only in the written statement they have raised a plea that the goods supplied were defective, which is clearly an after thought. 15. O.37, Rule 1(2)(b)(ii) reads that,” on an enactment, where the sum sought to be recovered is fixed sum of money or in the nature of debt other than a penalty’ ‘the suit could be filed. If the claim in the suit is in the nature of a debt other than a penalty, the same is permissible under this order. The sum claimed by the plaintiff is definitely in the nature of a debt, as the defendants have purchased the goods from the plaintiff and only for the goods sold and delivered, the plaintiff has filed the suit for the balance of the amount. In fact, the defendants, by their letter dated 9.4.2003, have admitted that they have purchased the goods and in respect of the same, they have already paid a sum of Rs.3,000 and requested the plaintiff to credit the said amount on their account and acknowledge the receipt of the same.
In fact, the defendants, by their letter dated 9.4.2003, have admitted that they have purchased the goods and in respect of the same, they have already paid a sum of Rs.3,000 and requested the plaintiff to credit the said amount on their account and acknowledge the receipt of the same. They have also further stated that, “we have paid so far Rs.8,70,000 including the above pay order for the Bill Nos.2914, 2923, 2952 and 2955, having a total balance of Rs.12,01,793.60.” It is clear from this letter that the defendants have purchased the goods to the extent of Rs.12,01,793.60 which is an ascertained amount and thereafter, they have paid a sum of Rs.8,70,000 and the balance amount is payable by the defendants is an ascertained amount and as such, it is in the nature of a debt, and the suit is maintainable. 16. No doubt, the defendants have stated, in their affidavit filed in support of the petition, seeking the leave of the Court to grant an unconditional leave to defend the suit, that the goods supplied by them is not to the quality as agreed and the plaintiff has to reduce the rate. Having stated so, there also they have admitted that they are liable to pay the balance amount. But, such a kind of statement about the deficiency in the quality of the goods supplied was not stated in the letter dated 9.4.2003 and therefore, what has been stated in the affidavit is only an after thought. The defendants having admitted their liability in their letter dated 9.4.2003 and as the liability was also an ascertained amount, now, they cannot turn round and say that the amount was not ascertained and therefore, the suit is not maintainable, which cannot at all be countenanced. 17.Point No.2: The next objection taken out by the defendants is that, there is no inscription immediately below the number of the suit, in the title of the suit, as required under O.37, Rule 2(1)(c), C.P.C., and the suit as instituted is bad in law. It is true, that the title of the suit namely, “Under O.37 of the Code of Civil Procedure, 1908” is missing in the plaint as required. But, the said provision i.e., O.37, Rules 1 and 2 is furnished after the short cause title of the plaint.
It is true, that the title of the suit namely, “Under O.37 of the Code of Civil Procedure, 1908” is missing in the plaint as required. But, the said provision i.e., O.37, Rules 1 and 2 is furnished after the short cause title of the plaint. Though it is not furnished immediately below the number of the suit, the provision of slaw i.e., O.37 C.P.C., 1908 is furnished below the names of the parties and the same is conspicuously visible and as such, it cannot be stated that the plaintiff has not complied with the said provision. As it is only a procedure with respect to the furnishing of the order under which the suit has been filed, the Court cannot adopt too technical view of the matter. The object of furnishing the provision O.37, below the suit number is to appraise of the defendants that the suit has been laid under that provision. The provision has been given, instead of immediately below the number of the suit, in the title of the suit itself, i.e., it was given little below, after the names of the parties in the short cause title and it cannot be stated that there is a great deviation in the procedure, which caused any prejudice to the defendants. In fact, the defendants have not complained of any prejudice and therefore, the arguments advanced on this point is also liable to be rejected. 18.Point No.3: The revision petitioners contend that they have already furnished security in the application taken out by the plaintiff for attachment before judgment and the security furnished is neither accepted nor rejected and the same is pending. In the said circumstances, further order passed by the Court, directing the defendants to pay a sum of Rs.2,00,000 to the plaintiff is not sustainable. As the defendants have furnished security, on hearing objections, if any, from the plaintiff, the Court should have either accepted the security or rejected the security. Without doing so, the trial Court has chosen to pass a conditional order, directing the defendants to pay a sum of Rs.2,00,000 within a month and only on that condition, the defendants were granted leave to file written statement and to contest the suit. It is submitted that the conditional order is not valid and the same is vitiated. We cannot reject the said argument as if it is invalid.
It is submitted that the conditional order is not valid and the same is vitiated. We cannot reject the said argument as if it is invalid. The security offered by the defendants, is pending and further conditional order, passed by the Court below, without either accepting or rejecting the security offered by the defendants, is not proper and the trial Court has erred in passing such an order and the same is liable to be set aside. 19. The next objection is that in the plaint, instead of stating summary suit number, it is stated as O.S.No. and therefore, it is not properly described and the suit has got to be converted into an ordinary suit under O.7, Rule 1, C.P.C. Whether, it is a suit filed under summary procedure under O.37 or O.7, Rule 1, C.P.C. or not is the question to be answered. The number will be given only as O.S.No. It is also stated that in paragraph 6 of plaint, “ no relief, which does not fall under O.37, C.P.C. is included in the above suit” and as such, it is made clear that the suit has been filed under O.37, C.P.C. and therefore, the objections taken by the defendants is unsustainable. 20. The next objection is that the plaintiff has not served any affidavit, as contemplated under O.37, Rule 3(4), which states, “If the defendant enters an appearance, the plaintiff shall thereafter serve on the defendant a summons for judgment in Form No.4-A in Appendix B or such other Form as may be prescribed from time to time, returnable not less than ten days from the date of service supported by an affidavit verifying the cause of action and the amount claimed and stating that in his behalf there is no defence in the suit.” Though the defendants have stated that no such affidavit has been served and only a summons for judgment in Form No.4A in Appendix B of C.P.C. alone has been served, the defendants have not chose to file the summons served upon them to find out, whether the said summons was accompanied with affidavit or not. That in the absence of the same, we are unable to accept the case of the defendants that no affidavit has been served, as contemplated of by the defendants. 21. In the result, the civil revision petition is allowed for the reasons stated in paragraph 8.
That in the absence of the same, we are unable to accept the case of the defendants that no affidavit has been served, as contemplated of by the defendants. 21. In the result, the civil revision petition is allowed for the reasons stated in paragraph 8. It is for the trial Court to accept or reject the security already furnished by the defendants. The Court below is hereby directed to pass an order on the security furnished by the defendants which is pending and then pass appropriate further order. No costs. Consequently, connected C.M.P. is closed.