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2015 DIGILAW 1257 (KAR)

Shamala Murthy v. D. Ravi Kumar Reddy

2015-11-19

ARAVIND KUMAR

body2015
ORDER : Aravind Kumar, J. 1. This is a plaintiff's writ petition calling in question order dated 18-4-2015 - Annexure-H whereunder Trial Court has granted leave to defendant to defend their case by condoning delay and receiving the written statement on record. I have heard the arguments of Sriyuths B. Phalakshaiah, learned Advocate appearing for petitioners and Sri K.A. Ariga, learned Advocate appearing for respondent. 2. It is the contention of learned Advocate appearing for petitioners that Trial Court could not have granted unconditional leave in a summary suit under Order 37 of Civil Procedure Code, 1908 particularly when defendant has admitted the claim partially and at least to the extent of admission made and Trial Court ought to have put the defendant on terms. In support of his submission, he has relied upon judgment of the Apex Court in the case of Southern Sales and Services and Others v. Sauermilch Design and Handles Gmbh, AIR 2009 SC 320 : (2008) 14 SCC 457 . 3. Per contra, Sri K.A. Ariga, learned Advocate appearing for respondent would support the impugned order contending that where a summary suit is filed and leave is sought to defend the suit by filing written statement, Trial Court would be at liberty to find out as to whether there is a triable issue and if it finds from the defence set up by defendant that it is not a frivolous defence, then it can grant unconditional leave without putting defendant on terms and as such, impugned order does not suffer from any infirmity. In support of his submission, he has relied upon the judgment of Apex Court in the case of Neebha Kapoor v. Jayantilal Khandwala and Others, AIR 2008 SC 1117 : (2008)3 SCC 770 . 4. In the background of arguments advanced by learned Advocates appearing for parties, when the pleadings are examined, it would indicate that writ petitioners - plaintiffs have instituted a suit under Order 37, Rule 2 read with Section 26 of Civil Procedure Code, 1908 namely, summary suit contending that defendant is due in a sum of Rs. 1,90,00,000/-. Defendant on service of suit summons, appeared and filed written statement and sought leave of the Court to contest the suit on merits contending inter alia that there was a contract between first plaintiff's husband and defendant and defendant had agreed to pay a sum of Rs. 1,90,00,000/-. Defendant on service of suit summons, appeared and filed written statement and sought leave of the Court to contest the suit on merits contending inter alia that there was a contract between first plaintiff's husband and defendant and defendant had agreed to pay a sum of Rs. 1,90,00,000/- to husband of first plaintiff and had repaid a sum of Rs. 1,50,00,000/- by cash and what remained to be paid was only Rs. 40,00,000/- and as security towards repayment of said amount, 7 cheques had been issued which is now sought to be misused by plaintiffs and as such, Trial Court has accepted the defence raised as a bona fide defence and has also found that there is a triable issue and as such has granted unconditional leave to defend the suit and there is no error committed by Trial Court. 5. Perusal of averments made in the written statement would clearly indicate that defendant in an unequivocal terms has admitted that he is due to the plaintiff in a sum of Rs. 40 lakhs. In his own words, his admission reads as under: "4. That the averments made xxx Rs. 1,90,00,000/-. But that said cheque was given for the security purpose for Rs. 40,00,000/- only. That is, it is to be noted xxx Rs. 1,50,00,000/-. And for balance of Rs. 40,00,000/- the defendant requested the plaintiff's husband to grant 2 months time. As per the request the plaintiff's agreed to give 2 months time to repay the balance amount of Rs. 40,00,000/- but with a condition that to issue 7 cheques for an amount of Rs. 1,90,00,000/-." Even in paragraph 12 of written statement, defendant has admitted that he had to pay balance of Rs. 40,00,000/- and had requested first plaintiff's husband to grant two months time and as per request made by defendant, plaintiff's husband is said to have agreed to give two months time to defendant to repay balance amount of Rs. 40,00,000/-. In fact, in the very same paragraph 12, it is admitted by defendant that he is liable to pay plaintiff's husband a sum of Rs. 40,00,000/- only. These admissions of defendant is not seriously disputed by learned Advocate appearing for respondent. 6. 40,00,000/-. In fact, in the very same paragraph 12, it is admitted by defendant that he is liable to pay plaintiff's husband a sum of Rs. 40,00,000/- only. These admissions of defendant is not seriously disputed by learned Advocate appearing for respondent. 6. A bare reading of proviso to sub-rule (5) of Rule 3 of Order 37 of CPC would clearly indicate that leave to defend could not be refused unless the Court is satisfied that facts disclosed by defendant do not indicate that he has substantial defence or defence intended to be put up by defendant is not frivolous or vexatious. Said proviso to sub-rule (5) of Rule 3 would further indicate that where a part of the amount claimed by plaintiff is admitted by defendant to be due from him, leave to defend the suit should not be granted unless amount so admitted to be due is deposited by defendant in the Court. 7. Apex Court in the case of Southern Sales and Services has held that earlier concept of granting unconditional leave to defend when triable issue is raised on behalf of defendant has been altered by the addition of a mandate which has been imposed on the defendant to deposit admitted amount before leave to defend suit can be granted. It came to be held by Apex Court as under: "14. Having considered the submissions made on behalf of the respective parties and the decisions cited, there appears to be force in Mr. Sharma's submissions regarding the object intended to be achieved by the introduction of sub-rules (4), (5) and (6) in Rule 3 of Order 37 of the Code. Whereas in the unamended provisions of Rule 3, there was no compulsion for making any deposit as a condition precedent to grant of leave to defend a suit by virtue of the second proviso to sub-rule (5), the said provision was altered to the extent that the deposit of any admitted amount is now a condition precedent for grant of leave to defend a suit filed under Order 37 of the Code. A distinction has been made in respect of any part of the claim, which is admitted. The second proviso to sub-rule (5) of Rule 3 makes it very clear that leave to defend a suit shall not be granted unless the amount as admitted to be due by the defendant is deposited in Court. A distinction has been made in respect of any part of the claim, which is admitted. The second proviso to sub-rule (5) of Rule 3 makes it very clear that leave to defend a suit shall not be granted unless the amount as admitted to be due by the defendant is deposited in Court. ............ 17. In the instant case, the High Court did not lack jurisdiction to pass an order with regard to the subject-matter of dispute, though the order itself may be incorrect. There is, therefore, little scope for this Court to interfere with the directions given to the appellant herein to deposit in Court 55% of the admitted dues as a precondition to grant of leave to defend a suit. The judgment of the High Court impugned in this appeal does not warrant any interference since the Trial Court had exercised its jurisdiction under the second proviso to sub-rule (5) of Rule 3 of Order 37 of the Code. The earlier concept of granting unconditional leave when a triable issue is raised on behalf of the defendant, has been supplemented by the addition of a mandate, which has been imposed on the defendant, to deposit any amount as admitted before leave to defend the suit can be granted. The question as to whether leave to defend a suit can be granted or not is within the discretionary powers of the High Court and it does not appear to us that such discretion has been exercised erroneously or with any irregularity which warrants interference by this Court." 8. In view of unequivocal admission of defendant that he is due to the plaintiffs a sum of Rs. 40,00,000/- and dispute having been raised in respect of Rs. 1,50,00,000/- contending same is not be due or payable by defendant to plaintiffs, defendant cannot be compelled to deposit entire Rs. 1,90,00,000/- which is claimed by plaintiff in the suit. However, when defendant has admitted a fixed sum is due, same is required to be deposited by such defendant before Court below. Sri Chandranath Ariga, learned Advocate appearing for respondent-defendant has contended that Apex Court in the case of Neebha Kapoor has opined where applicability of Order 37 of CPC is itself in question, grant of unconditional leave would be permissible and he has relied upon paragraph 12 of the said judgment whereunder it has been held as follows: "12. Sri Chandranath Ariga, learned Advocate appearing for respondent-defendant has contended that Apex Court in the case of Neebha Kapoor has opined where applicability of Order 37 of CPC is itself in question, grant of unconditional leave would be permissible and he has relied upon paragraph 12 of the said judgment whereunder it has been held as follows: "12. Order 37 of the Code has been prescribed in terms of the provisions contained in clause (f) of sub-section (2) of Section 128 of the Code so as to expedite trial of suits specified therein. We have no doubt in our mind that the underlying public policy behind Order 37 is expeditious disposal of suits of commercial nature. It provides for such disposal as expeditiously as possible by prescribing time frame therefor. Where, however, applicability of Order 37 of the Code itself is in question which appears to be the principal reason behind the impugned judgment, in our opinion, grant of leave may be permissible. The Court before passing a decree was entitled to take into consideration the consequences therefor." 9. A decree in summary suit is to be granted in favour of plaintiff provided plaintiff fulfils all the criteria prescribed thereunder. Question as to whether defence of defendant is bona fide, honest and not a moon shine defence is required to be examined when such leave to defend is sought for. Though in the instant case it has been contended by defendant that 7 cheques were issued by him to first plaintiff's husband towards security for payment of Rs. 40,00,000/- only, still he admits said amount is due by him to plaintiff's husband. Thus, said amount would partake the character of "admitted amount" as indicated in Order 37, Rule 3(5) of CPC. 10. Question that would arise for consideration in the instant case is, when defendant has admitted unequivocally that he is due in a sum of Rs. 40,00,000/- to plaintiff's husband, whether he should be allowed to defend the suit unconditionally or not? and, answer has to be necessarily in the negative i.e., against defendant and in favour of plaintiffs inasmuch as, in the facts obtained in the present case, plea in the written statement filed by defendant would clearly indicate that defendant has admitted that he is due to the plaintiffs in a sum of Rs. 40,00,000/- only. and, answer has to be necessarily in the negative i.e., against defendant and in favour of plaintiffs inasmuch as, in the facts obtained in the present case, plea in the written statement filed by defendant would clearly indicate that defendant has admitted that he is due to the plaintiffs in a sum of Rs. 40,00,000/- only. As such, contention of Sri K.A. Ariga, learned Advocate appearing for respondent cannot be accepted. 11. It is also contended by Sri K.A. Ariga that defendant is ready and willing to offer 50% of the admitted amount as security and prays for modification of the order of Trial Court to that extent. I am unable to accept said plea for reasons more than one. (i) First plaintiff is the wife of late Sri D. Murthy and plaintiffs 2 to 4 are his children and during the lifetime of late Sri D. Murthy, he had entered into an agreement to purchase the property belonging to defendant and by way of advance had paid a sum of Rs. 1,90,00,000/- which is the subject-matter of dispute in the suit and undisputedly, said sale agreement came to be cancelled and it was agreed between the parties therein that sum of Rs. 1,90,00,000/- would be refunded by defendant to plaintiffs. Said Sri D. Murthy who had entered into agreement with defendant is no more. His wife and children are before the Court contending that amount admitted to be due by defendant to Sri D. Murthy has not been paid. However, defendant has contended he had repaid Rs. 1,50,000/- to late Sri D. Murthy on date of agreement being cancelled. This issue regarding repayment of Rs. 1,50,00,000/- is in dispute and this is a matter in the realm of Trial Court which may have to be adjudicated. As such, sum of Rs. 40,00,000/- which is admitted by defendant has to be deposited by defendant before Trial Court, (ii) When defendant knew that husband of first plaintiff had expired on 2-7-2013, least that was expected of him was to inform them about the money which he owes to plaintiffs. No material is placed by defendant for having taken such steps. Thus, collectively, it can be inferred that defendant undisputedly owes a sum of Rs. 40,00,000/- to late Sri D. Murthy and his legal heirs. No material is placed by defendant for having taken such steps. Thus, collectively, it can be inferred that defendant undisputedly owes a sum of Rs. 40,00,000/- to late Sri D. Murthy and his legal heirs. Plaintiffs being wife and children of deceased Sri D. Murthy, as Class-I heirs would be entitled to recover said amount from defendant. As such, admitted amount is required to be deposited by defendant before Trial Court. For The reasons aforestated, I proceed to pass the following: ORDER "(1) Writ petition is hereby allowed in part. (2) Order dated 18-4-2015 passed by XXXI Additional City Civil and Sessions Judge, Bengaluru City in O.S. No. 5012 of 2014 -Annexure-H is hereby modified and leave granted by the Trial Court to the defendant to file written statement and defend the suit is affirmed subject to condition that respondent-defendant shall deposit a sum of Rs. 40,00,000/- before Trial Court within an outer limit of six weeks from today failing which consequences prescribed under Order 37 of CPC would necessarily follow. (3) On such deposit being made, Trial Court would be at liberty to regulate its payment or deposit as it deems fit in the fitness of things. (4) Trial Court shall expeditiously dispose of the suit at any rate, within six months from the date of receipt of certified copy of this order." Ordered accordingly.