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2014 DIGILAW 102 (CAL)

Nawn Estates v. Maheswary Ispat

2014-02-11

SOUMEN SEN

body2014
Judgment : Soumen Sen, J. This application is at the instance of the defendant for setting aside of ex parte decree dated 5th September, 2013. The ground for setting aside of the decree appears to be that although the defendant after receiving summon had appointed an Advocate to conduct the proceedings but there had been some delay in preparation and affirmation of the affidavit of competency and filing the same with the Registry. The Junior to the Advocate-on-record, it is alleged, has failed to take steps in the matter resulting in the said ex parte decree. It is stated that on 2nd September, 2013, the Advocate being informed by his clerk appeared before me through Mr. Jishnu Chowdhury and during that time it was noticed that the Junior to Mr. Sengupta had forgotten to file the Vakalatnama and affidavit of competency. It was on such facts that a prayer was made for recalling of the ex parte decree and giving an opportunity to the petitioner to contest this suit. The suit had appeared in the list on a number of days that the defendant was unaware of the pendency of the suit, is difficult to accept. However, certain explanations have been given for not being able to file the Vakalatnama and the affidavit of competency in time. The suit is based on dishonour of cheques. Mr. Samrat Sen, the learned Counsel appearing on behalf of the petitioner submits that the defendant had earlier contested a petition filed by the plaintiff for winding up of the defendant Company the claim of the plaintiff was relegated to the suit. The defendant in the said proceeding has contended that there was no agreement for sale and the amount which was claimed in the said proceeding was by way of accommodation loan which under the arrangement was not payable when such winding up petition was presented. It, however, cannot be disputed that in the letter dated 19th October, 2012 where the defendant has made out a case on accommodation loan, the defendants have admitted that such loan was for a period of one year from the respective dates mentioned in the said letter dated 19th October, 2012. It, however, cannot be disputed that in the letter dated 19th October, 2012 where the defendant has made out a case on accommodation loan, the defendants have admitted that such loan was for a period of one year from the respective dates mentioned in the said letter dated 19th October, 2012. Even if it is accepted at this stage that the case put forward by the defendant that there was an accommodation loan and there was no agreement to supply and sell any materials, the fact remains that the amount covered under the said cheques became due and payable on 19th October, 2013 in respect of Rs.35,00000/- and 22nd November, 2013 in respect of Rs.32,70,000/- aggregating to Rs.67,70,000/-. The only issue on which the defendant wants to go to trial is that the defendant impinges the nature of the transaction on which the case of the plaintiff is founded without disputing its liability. The present application appears to have been filed under Order 37 Rule 3 Sub-rule 7 which empowers the Court for sufficient cause shown by the defendant to excuse the delay of the defendant in entering an appearance or in applying for leave to defend the suit. The expression “sufficient cause” has not been defined in the Code. It is an elastic expression for which no hard and fast rule and guidelines could be laid down. It all depends on the facts and circumstances of the case. Discretion has to be exercised on sound judicial principles. If it appears to the Court that a party has approached the Court merely for the purpose of delaying the hearing of the suit and the material does not even prima facie disclose a tribal issue, the Court would not be chary to exercise such discretion in favour of such a party. In the instant case, the defendant even on its own showing would be liable to pay as on date the amount covered under the two several cheques even if it is assumed that such amount was given to the defendant petitioner by way of an accommodation loan. The Counsel for both the parties have relied upon a Division Bench decision of our High Court reported in (2012) 174 Company Cases 14 (Cal) (Statesman Ltd. Vs. Nevatia Udyog Ltd.). In the said decision Their Lordships held that the decisions laid in Kiranmoyee Dassi v. Dr. The Counsel for both the parties have relied upon a Division Bench decision of our High Court reported in (2012) 174 Company Cases 14 (Cal) (Statesman Ltd. Vs. Nevatia Udyog Ltd.). In the said decision Their Lordships held that the decisions laid in Kiranmoyee Dassi v. Dr. J. Chatterjee reported in 1945 (49) CWN 246 would be equally applicable in a proceeding for winding up which means the principles to be applied for leave to defend would be same in deciding an application for winding up. A just defence would always stand the trial but if there is no plausible defence and if it appears to the Court that such defence as disclosed, is moonshine then giving an opportunity to the defendant to contest the proceeding would be defeating the very object of the Code. The fact admitted need not be proved. Irrespective of the fact that whether there is a failure of consideration or amount payable under an accommodation loan, the liability of the defendant to pay Rs.67,70,000/- cannot be disputed. In the decree I have reduced the interest to 10 per cent and not accepted the amount claimed by the plaintiff. I see no reason to permit the defendant to enter appearance since it appears to me that the only object is to prolong hearing. On the basis of the materials on record and on consideration of the fact that the entire amount has become due and payable leave to defend could not and does not arise. Hence the application stands dismissed.