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2021 DIGILAW 787 (GUJ)

NIRMA CONSUMER CARE LIMITED v. AMRIT AGENCIES

2021-09-06

B.N.KARIA

body2021
ORDER 1. By way of present petition, petitioner has prayed for following reliefs: “a) The Hon'ble Court be pleased to issue a writ of certiorari and/or any other appropriate writ, order or direction in the nature of certiorari holding and declaring that the impugned order passed below summons for Judgment Exh.11 dated 16th July, 2010 in Summary Civil Suit No.171/2008 is void and illegal and the same is not sustainable in law and the same be quashed and set-aside and this Hon'ble Court be pleased to impose a condition to the extent of amount of the cheque, which was twice issued and which was not realized namely, condition be imposed upon the respondent to deposit before this Hon'ble Court or before the trial Court a sum of Rs.11,54,475/-. b) Pending admission, hearing and/or final disposal of this petition, the Hon'ble Court be pleased to stay the execution, operation and implementation of the order dated 16.07.2010 passed below Exh.11 Summons for Judgement in Summary Civil Suit NO.171/2008. c) That by way of interim relief, this Ho'ble Court be pleased to direct the respondent hereinto deposit the cheque ofRs.11,54,475/- in this Hon'ble Court. d) Such other and further reliefs as this Hon'ble Court may deem just and expedient be granted in favour of the petitioner. e) Costs of this petition be provided for to the petitioner.” 2. The short facts of this petition may be summarized as under: 2.1 Petitioner is carrying on the business of manufacturing, selling and trading in washing powder, bath soap, liquid soap, beauty shampoo and various other items, as stated in the plaint in the name and style of Nirma and Shakti Powder. That the goods were sold to the respondent-original defendant between the period 07.04.2005 to 29.06.2005, worth Rs.46,37,791/- and in this regard, bills were also supplied to the respondent-defendant. The goods was ordered at Ahmedabad and the terms and conditions of the sale and payment were fixed at Ahmedabad and respondent used to make the payment at Ahmedabad. That on 1st April, 2005, the respondent had an outstanding balance to pay to the petitioner to the tune of Rs.25,68,000.80 ps. That the said outstanding balance and the new purchases totaling Rs.72,05,791.80 ps. were payable to the petitioner-original plaintiff. That the respondent-original defendant paid Rs.47,30,000/- between 07.04.2005 and 24.06.2005 and this payment was made by draft payable at Ahmedabad through ICICI Bank. That the said outstanding balance and the new purchases totaling Rs.72,05,791.80 ps. were payable to the petitioner-original plaintiff. That the respondent-original defendant paid Rs.47,30,000/- between 07.04.2005 and 24.06.2005 and this payment was made by draft payable at Ahmedabad through ICICI Bank. Receipts of the said payment were also issued in favour of the respondent-original defendant. 2.2 That the present petitioner had also issued credit notes for the total amount of Rs.2,03, 092/- between May, 2005 and July, 2005. That the security deposit of the respondent totaling Rs,11,18,224.72 ps. were also transferred to the current account from the deposit account as on 01.07.2005 and thus, deducting the credit notes and the deposits, the respondent- original defendant was liable to pay the balance amount for which a cheque was issued on 07.09.2005 for Rs.11,54,475/- and such cheque was not honoured and returned back. Thereafter, the respondent again issued a new cheque on 29.12.2005 for the said amount of Rs.11,54,475/-. That the said cheque was stopped by the drawer respondent, and thus, there was an outstanding amount in the account of the respondent to the tune of Rs.11,54,475.08 ps. As a result thereof, repeated demands were made, but payment was not coming forth, and therefore, a notice dated 11.11.2006 was given by the petitioner to the respondent. The notice was sent by RPAD post as well as by UPC, but neither the RPAD nor the UPC returned back and, therefore, it is deemed that the service is effected. 2.3 The petitioner has stated that in all the bills, there is a condition that the delayed payment would carry interest at the rate of 17% per annum, and therefore, the interest is chargeable as per the terms and conditions of the contract. In the aforesaid background, as there was no reply to the notice, the petitioner was constrained to file Summary Civil Suit No.171/2008 in the City Civil Court at Ahmedabad. 2.4 That the summons was served upon the respondent, who filed Leave to Defend Affidavit at Exh. 23, in which all the new contentions were raised for the first time and the liability was refuted and contending that the summary suit is not maintainable, suit is purely for the accounts, and therefore, summary suit does not lie. He further raised the contentions that triable issues are involved. 23, in which all the new contentions were raised for the first time and the liability was refuted and contending that the summary suit is not maintainable, suit is purely for the accounts, and therefore, summary suit does not lie. He further raised the contentions that triable issues are involved. 2.5 That against the said leave to defend affidavit where contentions were raised for the first time and all were without substance, against the said Leave to Defend Affidavit, a detailed rejoinder was filed by the petitioner, wherein all contentions were negated. However, the learned Judge, after hearing the summons for judgment, granted unconditional leave to defend by order dated 16th July, 2010. 2.6 That the said order is contrary to the settled principles of law and once a party has given the cheque for setting right the accounts, then in that case, all such contentions which are not raised at the time of notice being given, in that case, the defence disclosed in the leave to defend affidavit cannot be said to be bonafide and it is nothing, but an afterthought defence, and therefore, in no circumstances, the respondent is entitled to unconditional leave to defend. On the contrary, on the basis of the outstanding of Rs.11,54,475/- for which a cheque was issued twice, the Hon'ble Judge ought to have passed a decree for the said amount. Hence, this petition. 3. Heard learned advocate Mr. Chinmay Gandhi for the petitioner and learned advocate Mr. Harsh v. Gjjar for the respondent. 4. It is submitted by learned advocate for the petitioner that the impugned order is erroneous, illegal, contrary to facts and law. That learned Judge has failed to appreciate and consider that the defendant has not produced his books of account along with the leave to defend affidavit. That learned Judge has failed to appreciate and consider that the defendant has produced the statements of accounts, which were sent by the petitioner to the respondent about the transactions. That the learned Trial Judge has failed to appreciate and consider that the bills which were supplied to the respondent have also been produced by the respondent himself along with the list and in the same, there is a condition of payment of 17% interest, and therefore, the condition of interest is not sustainable at law. That the learned Trial Judge has failed to appreciate and consider that the bills which were supplied to the respondent have also been produced by the respondent himself along with the list and in the same, there is a condition of payment of 17% interest, and therefore, the condition of interest is not sustainable at law. That learned Trial Judge has erred in not taking into consideration the fact that alongwith the plaint, large number of documents are produced to show the responsibility of the respondent. That learned Judge has erred in considering and giving weightage to the contentions, which are raised by the respondent-defendant. That learned Judge has firstly erred in accepting the contentions of the respondent that the dispute raised by the respondent regarding the accounts, commissions, quality of the goods and scheme introduced by the petitioner-original plaintiff and on that basis, he accepted that the disputes are raised with regard to accounts, and therefore, without evidence, the accounts cannot be decided. However, this conclusion is illegal for the simple reason that it is the case of which goods were sold and delivered by bills and the respondent should produce all the bills, and therefore, it is a matter where accounts are not disputed or any commission is to be paid. The party buys the good and sells in the open market and that is the profit. The learned Judge has failed to appreciate and consider that there is no scheme produced on record of the case, and therefore, also there is no question of payment of commission. That learned Judge has failed in coming to the conclusion that no disputes are raised with regard to the quality of the goods. Under these circumstances, for the first time, the defence is disclosed which cannot be accepted and the defence can be said to be a moonshine defence. That learned Judge has erred in not considering the invoices, which are produced by the petitioner-original plaintiff from Exh.4/1 of 4/14. That the learned Judge has erred in accepting that when the credit notes and debits notes which are issued to the respondent original defendant, are produced on the record of the case from that for the credit invoices are given and the learned Trial Judge, without recording any reasons, has come to the conclusion that bonafide dispute is raised. That the learned Judge has erred in accepting that when the credit notes and debits notes which are issued to the respondent original defendant, are produced on the record of the case from that for the credit invoices are given and the learned Trial Judge, without recording any reasons, has come to the conclusion that bonafide dispute is raised. That learned Trial Judge has erred in not coming to the conclusion that it is a mere allegation that the goods are returned, but no documents are produced. That the learned Judge has failed to appreciate and consider that quality of goods are also raised, but for which there is no evidence produced on record of the case, and therefore, in absence of any evidence, learned Judge cannot come to conclusion that there is a disputed question of facts. That the learned Judge has failed to appreciate and consider that the accounts are also clearly produced and when the account being produced by the respondent-defendant, there cannot be said to be a dispute about the account, and therefore, the learned Trial Judge is wrong in coming to this conclusion. That the learned Judge has erred in granting unconditional leave to the respondent-defendant in spite of the fact being admitted that the cheques were issued twice for a sum of Rs.11,54,475/-, but no payment was made. Thus, a person who is doing the business and maintain regular business would ever commit by issuing a cheque and once the cheque is issued, it amounts to admission of the liability by the debtor to the creditor, and therefore, when such a cheque is issued twice, the Hon'ble Court ought to have imposed a condition upon the respondent-defendant. However, it is unfortunate that this particular aspect, which is stated in the plaint and which has not been denied by the respondent-original defendant about the issuance of the cheques, even then, the learned Judge has not referred to at all this particular aspect in the order, and therefore, the order is from the very bottom defective and not sustainable in the eyes of law. That learned Judge has not considered the rejoinder and number of statements as well as documentary evidence produced on the record of the case. That learned Judge has not considered the rejoinder and number of statements as well as documentary evidence produced on the record of the case. That all the documents by which the orders were ordered at Ahmedabad and where the respondent-original defendant called upon the petitioner-original plaintiff to supply the accounts and when on the basis of such supply of the accounts when cheques are issued, then naturally, the Hon'ble Court ought to have passed an order for the same. That for non-reliazation of the cheques issued twice, there was a breach of Section 138 of the Negotiable Instruments Act and the petitioner-company has also filed criminal prosecution for the dishonour of the cheques. The learned Judge has not considered that aspect. Ultimately, it is requested by learned advocate for the petitioner to quash and set aside the impugned order passed below Exh.11 dated 16.07.2010 in Summary Suit No.171 of 2008 granting unconditional leave to defend the suit. In support of his arguments, learned advocate for the petitioner has relied upon the judgments of this Court passed in Special Civil Application No.23320 of 2005 on 07.02.2007, Special Civil Application No.18677 of 2007 on 12.02.2008 and Special Civil Application No.19750 of 2007 on 13.03.2008. 5. Learned advocate for the respondent – defendant has submitted in his argument that the summary suit filed by the petitioner/plaintiff is not maintainable as the defendant is an agent and distributor of the plaintiff company since 1996 and plaintiff is principal of defendant, and therefore, it is necessary to ascertain how much money is due to the plaintiff and hence, account is to be taken. That plaintiff is duty bound to file a suit for accounts only and even then, the Court has to pass preliminary decree, and thereafter, may pass final decree. It is further submitted that the plaintiff cannot file summary suit and the suit is based on accounts, wherein the plaintiff has charged penalty and interest. It is further submitted that the plaintiff has used to obtain signature on printed form of debit note and stamp paper, etc. and it is never disclosed to the defendant and after getting signature in the blank cheque, they were deposited before the bank. That the defendant was assured that the said cheques would be treated as collateral security and shall help in saving demand draft commission and hassles from bank and transit period. and it is never disclosed to the defendant and after getting signature in the blank cheque, they were deposited before the bank. That the defendant was assured that the said cheques would be treated as collateral security and shall help in saving demand draft commission and hassles from bank and transit period. It is further submitted that the plaintiff has misused the aforesaid cheques in the year 2006 and books of account was not maintained by the plaintiff in proper form, and thereby, has committed jugglery in preparing bills and sending goods to the defendant. That the goods are not sent as per the scheme offered and agreed upon by the plaintiff. At present, the suit is based on accounts, wherein the plaintiff has charged penalty, and therefore, the present suit is not maintainable against the defendant as summary suit. That the defendant has made payment, and nothing is due from the defendant. That the defendant has raised dispute in respect of accounts, commission, quality of goods and scheme introduced by the plaintiff and the dispute cannot be determined without recording of evidence. That the Trial Court has committed no error in granting unconditional leave to defend the suit filed by the plaintiff as triable issues are raised by the defendant. It is further submitted that interference of this Court is not warranted in the impugned order dated 16.07.2010 passed by the Trial Court as it is legal and proper. Learned advocate for the respondent, in support his arguments, has relied upon the judgment of the Hon'ble Apex Court reported in 2019 7 SCC Page 577 and 2015 10 SCC 521 . Hence, it is requested by learned advocate for the respondent – defendant to dismiss the present petition and confirm the order passed by the learned Judge of the City Civil Court, Court No.21, Ahmedabad dated 16.07.2010. 6. Having heard learned advocates of the respective parties and gone through the contents of the dispute between the parties, the impugned order dated 16.07.2010 and record place before the Court, it appears that in respect of the transaction taken place between the plaintiff and the defendant, no dispute was raised by the defendant as well as the amount due claimed by the plaintiff in the suit. The defendant has not controverted anything in his application leave to defend or by way of documentary evidence. The defendant has not controverted anything in his application leave to defend or by way of documentary evidence. It also appears that prior to filing of the suit, legal notice dated 11.11.2006 was issued by the plaintiff to the defendant by registered post as well as under postal certificate. The defendant is silent in respect of the notice issued by the plaintiff. From the material placed on record, it appears that the defendant is engaged with the business of the plaintiff and placed various orders to the plaintiff in Ahmedabad has received the goods with the invoice as per their orders. Each and every time, all the terms and conditions were shown in the invoice and one of the conditions regarding the interest is also reflecting in bottom of the invoice “17% interest will be charged from the date of the invoice”. It also appears that from 07.04.2005 to 26.06.2005, amount was paid to the plaintiff and against the said payments, stamps receipts were issued by the plaintiff from Ahmedabad in favour of the defendant. No objections were raised by the defendant regarding the interest conditions with the plaintiff which are narrated in their leave to defend affidavit. The contentions of the defendant in the application leave to defend of obtaining signature by the plaintiff on printed form, debit notes, credit notes, blank papers, stamp papers cannot be believed at this juncture, as the same were never disclosed by the defendant. It also appears that the defendant issued cheque bearing no.38641 dated 07.09.2005 for the amount of Rs.11,54,475/- which was returned back, and therefore, fresh cheque was issued bearing No.38642 dated 29.12.2005 of Rs.11,54,475/- drawn on Bank of Baroda, Main Branch, Faizabad in favour of the plaintiff. The said cheques were deposited by the plaintiff in his account, however, the said cheques were returned back with an endorsement of “payment stopped by the drawer”, and thereafter, the plaintiff has also filed a Criminal Complaint No.1781 of 2006 against the defendant and same is pending before the Metropolitan Court at Ahmedabad. However, this fact is within the knowledge of the defendant, the defendant has created false story in leave to defend affidavit regarding blank cheques and blank papers etc., which cannot be sustainable against the claim of the plaintiff. However, this fact is within the knowledge of the defendant, the defendant has created false story in leave to defend affidavit regarding blank cheques and blank papers etc., which cannot be sustainable against the claim of the plaintiff. It also appears from the record that credit note of Rs.2,03,092/- was issued by the plaintiff from 01.05.2005 to 01.07.2005 plus plaintiff has also transferred the defendant’s security deposit with interest of total Rs.11,18,224.72 paisa from the deposit account to current account on 01.07.2005 and for the same, general voucher was issued to the defendant. The question would not arise to be alleged by the defendant that the plaintiff had to issue a credit note or giving amount, as alleged by them in their leave to defend affidavit. It appears from the record that the defendant has placed the order by way of letter, fax or on telephone to the plaintiff at Ahmedabad, and thereafter, as per the order of the defendant, goods were delivered to the transporter on behalf of the defendant and the payment was also made by the defendant at Ahmedabad to the plaintiff and against the payment, stamp receipts were also received by the defendant as per the terms and conditions. Prima facie, it appears that the defendant has no bona fide and reasonable defence against the plaintiff’s claim and no triable issues were involved in this matter, in respect of the so-called transaction with the third party as raised by the defendant, which cannot be sustainable against the claim of the plaintiff as transactions between the plaintiff and the defendant are not disputed in leave to defend affidavit. It appears that the Trial Court has committed an error in not considering the documents produced along with the plaint by the plaintiff to show the responsibilities of the defendant. Further, the defendant has also produced the statement of the accounts which were sent by the petitioner to the defendant about the transaction. The Trial Court has wrongly accepted the contentions of the defendant that the dispute is raised by the defendant regarding the accounts, commission, quality of the goods and scheme introduced by the petitioner – original plaintiff and on that basis, the suit cannot be decided without recording evidence. All the issues were raised by the defendant for the first time in leave to defend affidavit which cannot be accepted by the Court. All the issues were raised by the defendant for the first time in leave to defend affidavit which cannot be accepted by the Court. Further, it appears that the credit notes and debit notes, which were issued to the defendant, are produced on record in the suit which are not considered by the Trial Court and it is a mere allegation that the goods are returned, but no documents are produced. So far as quality of goods is concerned, no evidence was produced before the Trial Court. This Court (Coram: Hon’ble Mr. Justice Bankim N. Mehta) in Special Civil Application No.23320 of 2005 in a similar facts of the case, has observed in Paragraph-6 as under: “6. ……The respondents-defendants have raised defence of account for the first time in their leave to defend affidavit. It is not in dispute that there were series of transactions between the parties and the respondents-defendants have made payments against the bills.” 7. In Special Civil Application No.18677 of 2007, this Court (Coram: Hon’ble Mr. Justice Akil Kureshi) again dealt with the similar issues and observed in Paragraph-7 as under: “7. ……To permit the defendant to raise contentions regarding the deficient quality of goods, as also the question of appropriate interest and other related issues, though he may have leave to defend, the same must be conditional on his depositing certain sum. As noted earlier, the main belated dispute of the respondent is with respect to the goods worth Rs.66,000/- being deficient and therefore having been returned.” 8. In another Special Civil Application No.19750 of 2007, this Court (Coram: Hon’ble Mr.Justice Akil Qureshi) dealt with the issue and has observed in Paragraph-8 as under: “8. Viewed from the above background the defence of the defendant, it would appear that in response to the legal notice issued by the plaintiff, no defence was raised by the defendant. The defendant had also issued two cheques which were however, not been honoured. Even thereafter, no defence was raised by the defendant regarding the amount not being due and payable or with respect to the quality of goods supplied. The defendant had also issued two cheques which were however, not been honoured. Even thereafter, no defence was raised by the defendant regarding the amount not being due and payable or with respect to the quality of goods supplied. It was for the first time before the trial Court in leave to defend affidavit, the defendant raised the defences and contended that cheques were not meant for payment but were required to be held by the plaintiff by way of deposit, that goods supplied were of inferior quality and the defendant had taken up this issue with the agents of the petitioner, that in any case he had never purchased the goods but was acting only as an agent of the petitioner’s firm.” 9. The Court directed the defendant to deposit before the Trial Court 40% of the suit claim by granting liberty to defend the suit. All the judgments relied upon by the petitioner are quite applicable to the facts of the present case as defence raised in the leave to defend affidavit are similar to the cited cases. 10. In the case of State Bank of Hyderabad Vs Rabo Bank in Civil Appeal No.8194 of 2015 (arising out of Special Leave Petition (Civil) No.33549 of 2014) dated 01.10.2015, although affidavit by the defendant did not positively and immediately make it clear that he had a defence, yet, it showed such a state of facts leading to the inference that at the trial of the action, the defendant 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. 11. In case of Sudin Dilip Talaulikar Vs. Polycap Wires Pvt. Ltd. in Civil Appeal Nos.5528 of 2019 (arising out of SLP (Civil) No(s).9368 of 2018), dated 15.07.2019, it was held that in summary suit if defendant discloses facts of fair and reasonable defence, the Court may grant unconditional leave to defend. This naturally concerns subjective satisfaction of the Court on basis of materials that may be placed before it. This naturally concerns subjective satisfaction of the Court on basis of materials that may be placed before it. However, in appropriate case if Court is satisfied of plausible or probable defence and which defence is not considered sham or moonshine, but yet leaving certain doubts in mind of Court, it may grant conditional leave to defend. 12. In the present case, if defence of the defendant is illusory and sham as well as practically moonshine, the plaintiff would be entitled to leave to sign judgment. This Court will protect the plaintiff by only allowing the defence to proceed if the amount claimed is paid into Court or otherwise secured and give leave to the defendant on such condition, and thereby show mercy to the defendant by enabling him to try to prove a defence. 13. With the above observation, the impugned order dated 16th July 2010 passed below Exh.11 in Summary Civil Suit No.171 of 2008 granting unconditional leave to his suit is required to be quashed and set aside. Accordingly the order dated 16th July 2010 passed below Exh.11 in Summary Civil Suit No.171 of 2008 by City Civil Court, Ahmedabad is quashed and set aside. 14. Respondent/defendant is permitted to defend the suit on depositing Rs. 11,54,475/- before the Trial Court concerned within a period of 8 weeks from the date of this order. On depositing the aforesaid amount, respondent/defendant shall be entitled to file written statement within a period of 8 weeks. 15. With aforesaid direction present petition is allowed. Rule is made absolute to the aforesaid extent. No order as to costs. 16. Looking to the facts that Summary Suit is pending before the Trial Court since last 13 years, it shall be expedited by the City Civil Court, Ahmedabad and dispose of such suit within a period of 6 weeks preferably and parties shall cooperate in the proceedings before the trail Court.