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2018 DIGILAW 726 (GUJ)

Arrow Digital Pvt. Ltd. v. Legal Manager, Sepal Tiles Pvt. Ltd.

2018-05-11

A.Y.KOGJE, M.R.SHAH

body2018
JUDGMENT : M.R. Shah, J. 1. By way of this petition under Article 226/227 of the Constitution of India, the petitioner herein – original plaintiff has prayed to quash and set aside the impugned order dated 15.09.2017 passed below Summons Court Judgment Exh.10 by the learned Judge, Commercial Court, Ahmedabad (hereinafter referred to as “learned Commercial Court”) in Commercial Civil Suit No.176/2016 by which the learned Commercial Court has ordered that the summons for judgment application be heard alongwith the suit and accordingly the suit stands converted into long cause suit. 2. The facts leading to the present Special Civil Application in nutshell are as under: 2.1 That the petitioner herein – original plaintiff instituted the Summary Suit No.1008/2014 against the respondent Company – original defendant before the City Civil Court, Ahmedabad claiming a decree for an amount of Rs.1,08,65,296.35 paise with interest. Subsequently, the said suit came to be transferred to the Commercial Court, Ahmedabad on establishment of the Commercial Court, Ahmedabad under the provisions of Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (hereinafter referred to as “Commercial Courts Act, 2015”). The same was numbered as Commercial Civil Suit No.176/2016. That prior thereto the plaintiff submitted the application for summons for judgment on 07.07.2014. It appears that thereafter the defendant company appeared through its Advocate and filed an application for leave to defend on 20.08.2014. It is the case on behalf of the petitioner herein – original plaintiff that thereafter the defendant Company had remained absent and not cooperated with the proceedings and therefore, the plaintiff filed an affidavit to pass ex parte judgment and decree against the defendant Company. On the very same day i.e. on 29.08.2017, the learned Commercial Court passed an order that “matter be proceeded ex parte against the defendant”. It appears that thereafter the matter came to be adjourned time and again. It appears that thereafter under the bonafide belief that as the Court passed an order that “suit to be proceeded ex parte” the learned Advocate appearing on behalf of the plaintiff made an endorsement on the application for summons for judgment that “summons for judgment be heard alongwith the suit”. It appears that thereafter under the bonafide belief that as the Court passed an order that “suit to be proceeded ex parte” the learned Advocate appearing on behalf of the plaintiff made an endorsement on the application for summons for judgment that “summons for judgment be heard alongwith the suit”. That thereafter considering the aforesaid endorsements the learned trial Court has passed the impugned order that “in view of the endorsement made by the learned Advocate for the plaintiff below the summons for judgment, the same is ordered to be heard alongwith the suit and accordingly, the present suit stands converted into long causes suit”. That thereafter the learned trial Court has framed the issues ex parte at Exh.41 on 16.02.2018. 2.2 Feeling aggrieved and dissatisfied with the impugned order dated 15.09.2017 passed below Exh.10 in Commercial Civil Suit No.176/2016 by which the learned Commercial Court has passed an order that the summons for judgment application be heard alongwith the suit and the suit stands converted into long causes suit, the original plaintiff has preferred the present Special Civil Application under Article 227 of the Constitution of India. 3. Shri Percy Kavina, learned Senior Advocate appearing on behalf of the original plaintiff has vehemently submitted that the impugned order passed by the learned Commercial Court below Exh.10 is contrary to the provisions of Order 37 of the Code of Civil Procedure, 1908 (hereinafter referred to as “CPC”). 3.1 It is further submitted by Shri Kavina, learned Counsel appearing on behalf of the petitioner that the impugned order passed by the learned Commercial Court ordering to hear the application for summons for judgment alongwith the suit and converting the suit into long causes suit is not sustainable under the law. 3.2 It is further submitted by Shri Kavina, learned Counsel appearing on behalf of the petitioner that as such considering Order 37 of the CPC, once the application for summons for judgment is submitted by the plaintiff and thereafter the defendants submit the application for leave to defend the suit, unless and until both the applications are decided and disposed of, the suit cannot be converted into long causes suit. 3.3 It is further submitted by Shri Kavina, learned Counsel appearing on behalf of the petitioner that even otherwise there is no provision of the CPC more particularly under Order 37 to hear the application for summons for judgment alongwith the suit and simultaneously to convert the summary suit into long cause suit. 3.4 It is further submitted by Shri Kavina, learned Counsel appearing on behalf of the petitioner that as such by passing the impugned order the learned Commercial Court has virtually allowed the leave to defend application submitted by the defendant and virtually has granted unconditional leave to defend the suit to the defendant which is not permissible under the law unless and until the application for summons for judgment and the leave to defend application are decided and disposed of. 3.5 It is further submitted by Shri Kavina, learned Counsel appearing on behalf of the petitioner that as such as the learned Commercial Court passed the order on 29.08.2017 that the matter to be proceeded ex parte against the defendant, learned Advocate appearing on behalf of the plaintiff bonafidely believing that now the judgment will be pronounced by the learned Commercial Court ex parte the Advocate for the plaintiff made an endorsement that the summons for judgment application be heard alongwith the suit. It is submitted that as such there was no intention on the part of the learned Advocate appearing on behalf of the plaintiff to convert the summary suit into long cause suit, which otherwise is not permissible unless and until the application for summons for judgment and the leave to defend application are decided and disposed of on merits. Making above submissions and relying upon Order 37 of the CPC, it is requested to allow the present petition and quash and set aside the impugned order. 4. Though served, nobody appears on behalf of the respondent herein – original defendant. 4.1 At this stage it is required to be noted that even before the learned Commercial Court also on most of the occasions the suit is proceeded ex parte and even at one point of time vide order dated 29.08.2017, the learned Commercial Court passed an order that “matter to be proceeded ex parte against the defendant”. 4.1 At this stage it is required to be noted that even before the learned Commercial Court also on most of the occasions the suit is proceeded ex parte and even at one point of time vide order dated 29.08.2017, the learned Commercial Court passed an order that “matter to be proceeded ex parte against the defendant”. Under the circumstances and as though served nobody has appeared on behalf of the respondent herein – original defendant, present petition is heard ex parte against the defendant. 5. We have heard Shri Kavina, learned Counsel appearing on behalf of the petitioner herein – original plaintiff. We have perused and considered the impugned order passed by the learned Commercial Court by which the learned Commercial Court has passed an order to hear the application for summons for judgment alongwith the suit and has ordered to convert the summary suit into long cause suit. We have considered the material on record. At the outset it is required to be noted that the suit before the learned Commercial Court was a summary suit under Order 37 of the CPC. It appears that prior to transfer of the summary suit to the Commercial Court, the learned City Civil Court before whom the summary suit was instituted, an application for summons for judgment was given by the plaintiff. Even the defendant also submitted the application for leave to defend. That thereafter vide order dated 29.08.2017, the learned Commercial Court passed an order that “matter to be proceeded ex parte against the defendant”. It appears that therefore the learned Advocate appearing on behalf of the plaintiff under the bonafide belief that now the decree shall be passed ex parte, made an endorsement that the application for summons for judgment be heard alongwith the suit. That thereafter without considering the provisions of Order 37 of the CPC and mainly on the endorsement made by the learned Advocate appearing for the plaintiff that the application for summons for judgment be heard alongwith the suit, the learned Commercial Court has passed the impugned order to hear the application for summons for judgment alongwith the suit and has also ordered to convert the summary suit into long cause suit. Considering the provisions of Order 37 of the CPC, the impugned order is not sustainable under the law. Considering the provisions of Order 37 of the CPC, the impugned order is not sustainable under the law. Once the application for summons for judgment is given by the plaintiff and the defendant files an application for leave to defend, unless and until the unconditional leave to defend to the defendant is granted, summary suit cannot be converted into long cause suit. The impugned order passed by the learned Commercial Court is absolutely contrary to Order 37, Rule 3 of the CPC. Order 37 Rule 3 of the CPC reads as under: “3. Procedure for the appearance of defendant : - (1) In a suit to which this Order applies, the plaintiff shall, together with the summons under rule 2, serve on the defendant a copy of the plaint and annexure thereto and the defendant may, at any time within ten days of such service, enter an appearance either in person or by pleader and, in either case, he shall file in court an address for service of notice on him. (2) Unless otherwise ordered, all summonses, notices and other judicial processes, required to be served on the defendant, shall be deemed to have been duly served on him if they are left at the address given by him for such service. (3) On the day of entering the appearance, notice of such appearance shall be given by the defendant to the plaintiff’s pleader, or, if the plaintiff sues in person, to the plaintiff himself, either by notice delivered at or sent by a prepaid letter directed to the address of the plaintiff’s pleader or of the plaintiff, as the case may be. (4) If the defendant enters an appearance, the plaintiff shall thereafter serve on the defendant a summons for judgment in Form No. 4A in Appendix B or such other Form as may be prescribed fr6m 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 belief there is no defence to the suit. (5) The defendant may at any time within ten days from the service of such summons for It's affidavit or otherwise d such facts as may be deemed sufficient to entitle him to defend, apply on such summons for leave to defend such suit, and leave to defend may be granted to him unconditionally or upon such terms as may appear to the court or judge to be just : Provided that leave to defend shall not be refused unless the court is satisfied that the facts disclosed by the defendant do not indicate that he has a substantial defence to raise or that the defence intended to be put up by the defendant is frivolous or vexatious: Provided further that, where a part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit shall not be granted unless the amount so admitted to be due is deposited by the defendant in court. (6) At the hearing of such summons for judgment,— (a) if the defendant has not applied for leave to defend, or if such application has been made and is refused, the plaintiff shall be entitled to judgment forthwith; or (b) if the defendant is permitted to defend as to the whole or any part of the claim, the court or judge may direct him to give such security and within such time as may be fixed by the court of judge and that, on failure to give such security within the time specified by the court or judge or to carry out such other directions as may have been given by the court or judge, the plaintiff shall be entitled to judgment forthwith. (7) The court or judge may, for sufficient cause shown by the defendant, excuse the delay the defendant in entering an appearance or in applying for leave to defend the suit.” Therefore, the learned Commercial Court was required to decide and dispose of the leave to defend application submitted by the defendant as provided under sub-Rule (5) of Rule 3 of Order 37 of the CPC and thereafter is required to proceed further with the suit as provided under sub-Rule (6) of Rule 3 of Order 37 of the CPC. There is no provision under the CPC to hear the application for summons for judgment alongwith the suit. There is no provision under the CPC to hear the application for summons for judgment alongwith the suit. There is no provision under the CPC straightway to order to convert the summary suit into long cause suit without deciding and disposing on merits the application for leave to defend. As observed hereinabove, it appears that the learned Advocate appearing on behalf of the plaintiff made an endorsement on the application for summons for judgment to hear the application for summons for judgment alongwith the suit bonafidely as the learned Commercial Court passed an order on 29.08.2017 to proceed further with the suit against the defendant ex parte and under the bonafide belief that now the ex parte decree shall be passed. However, that does not mean that the learned Commercial Court may pass the order to convert the summary suit into long cause suit de hors the provision of Order 37 of the CPC. Under the circumstances, the impugned order passed by the learned Commercial Court cannot be sustained. 6. In view of the above and for the reasons stated above, impugned order dated 15.09.2017 passed below Exh.10 in Commercial Civil Suit No.176/2016 by the learned Judge, Commercial Court, Ahmedabad is hereby quashed and set aside. The learned Judge, Commercial Court, Ahmedabad is directed to proceed further with the summary suit and follow the procedure as provided under Order 37 of the CPC more particularly Order 37 Rule 3 of the CPC and proceed with the summary suit accordingly. The consequent order of framing the issues at this stage is hereby quashed and set aside as the impugned order converting the summary suit into long cause suit is being quashed and set aside. Rule is made absolute accordingly to the aforesaid extent. No costs. Order Accordingly