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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
MILIND N. JADHAV, J.
M/s. Mobile Arts S.A.L. - Petitioner
Versus
M/s. Mauj Mobile Private Ltd. - Respondent
Writ Petition No. 5795 of 2024
Decided On : 02-09-2024
Judgment - Commercial Dispute - Commercial Courts Act, 2015, Section 12A - Indian Evidence Act, 1872, Section 65B - Code of Civil Procedure, 1908, Order XXXVII Rule 3 - The court emphasized the enforceability of the Media Sales Insertion Order and the necessity of prima facie evidence for claims in summary suits, ultimately ruling against the trial court's decision to grant leave to defend.
Fact of the Case:
The petitioner, a Lebanese company, provided digital advertising services to the respondent, an Indian media company, under a Media Sales Insertion Order. The respondent failed to pay the outstanding invoices, leading the petitioner to file a summary suit for recovery of dues.
Finding of the Court:
The court found that the trial court erred in granting unconditional leave to defend, as the respondent did not adequately dispute the existence of the agreement or the outstanding payments, and the petitioner provided sufficient prima facie evidence.
Issues: Whether the trial court correctly granted unconditional leave to defend despite the respondent's acknowledgment of the debt and the petitioner's prima facie evidence of the claim.
Ratio Decidendi: The court held that the existence of a valid agreement and acknowledgment of debt by the respondent warranted a summary judgment in favor of the petitioner, as the respondent failed to provide a substantial defense.
Result: The impugned judgment was quashed, and the summons for judgment was made absolute in favor of the petitioner.
JUDGMENT:
Milind N. Jadhav, J.
1. Heard Mr. Pankaj Mehta, learned Advocate for Petitioner and Mr. Kunal Mehta, learned Advocate for Respondent.
2. Present Writ Petition challenges the impugned judgment dated 25.01.2024 passed by the City Civil Court at Mumbai in Summons for Judgment No.152 of 2023 in Commercial Summary Suit No.316 of 2022. By the impugned judgment dated 25.01.2024, Trial Court has dismissed Summons for Judgment filed by Petitioner who is Plaintiff before the Trial Court and granted unconditional leave to defend to Respondent who is Defendant before the Trial Court.
3. Facts necessary for adjudication of the present case are as follows:-
3.1. Petitioner is a Company incorporated and registered in Lebanon and is engaged in the business of providing variants of digital advertising services. Respondent is a private limited company engaged in the business of media in India and involved in computer related activities and is a premium content market place for entertainment and edutainment.
3.2. Admittedly Petitioner and Respondent executed agreement nomenclatured as Media Sales Insertion Order dated 15.01.2019 wherein Respondent agreed to avail digital advertising services from Petitioner in regard to its brands viz; ‘Gamesbond’ and ‘Video Vogue’ and parties decided that the terms of service and charges would be determined by parties via e-mail.
3.3. Subsequently, as per agreed terms and charges Petitioner provided digital advertising services to Respondent and raised three invoices for the services provided viz; invoice dated 03.07.2019 for amount of USD $38,560.30; invoice dated 13.08.2019 for amount of USD $59,834.34 and invoice dated 05.09.2019 for amount of USD $22,181.79, which were duly received and acknowledged by Respondent by e-mails dated 30.05.2019, 28.06.2019, 31.07.2019 and 06.08.2019.
3.4. It is an admitted position by both parties that out of the total amount of the first invoice dated 03.07.2019, amount of USD $10,001.60 was paid by Respondent to Petitioner. Regarding balance payment, Respondent agreed to repay the same alongwith interest as stipulated in the agreement.
3.5. As Respondent failed to clear the balance payment along with interest, Petitioner through their Advocate addressed notice dated 09.05.2020 calling upon Respondent to clear the outstanding dues of USD $110,574.83.
3.6. On 20.05.2020, Respondent addressed e-mail to Petitioner to settle the outstanding dues and on the same day it was agreed between parties that Respondent would clear outstanding dues of Petitioner by paying monthly installments of USD $20,000.00 over a period of six (6) months and in lien thereof interest of 6% on the same was waived of by Petitioner.
3.7. On 21.05.2020, Respondent informed Petitioner by email that it was undergoing financial constraints and crisis and was on the verge of liquidation. On 22.05.2020, Respondent addressed email to Petitioner that in the event Petitioner did not accept Respondent’s offer of settlement of one time payment of $ 20,000 against the outstanding liability, then it would take them several years in Court for getting a favourable judgment and hence they should accept their offer. Correspondence has been exchanged between parties thereafter which I have adverted to in detail later in the judgment.
3.8. In view of the above, on 09.10.2020 Petitioner filed Application for pre-institution mediation under Section 12A of the Commercial Courts Act, 2015 (for short “the said Act”) in the Trial Court. As Respondent failed to appear for mediation, on 09.10.2021, Trial Court issued a non-starter report dated 09.10.2021. Thereafter, Petitioner filed Summary Suit being Commercial Suit No.316 of 2022 in Court seeking recovery of outstanding dues of USD $115,550.69 alongwith interest @ 6% per annum from the date of filing of the Suit till realization of the entire amount.
3.9. On 26.09.2022, Trial Court issued writ of summons to Respondent and the same though initially remained unserved, was admittedly se
AI
The court established that acknowledgment of debt and a valid agreement are sufficient for summary judgment, overriding the trial court's decision to grant leave to defend.
Point of Law - Court has considered the issue and confirmed the order passed by the learned trial court granting the application for leave to defend conditionally. All the rights and contentions of t....
Order XXXVII CPC be called upon to look at various documents and various statements of accounts, spread over periods running into years, so as to determine how amount due in the suit claimed is arriv....
In summary suits, the trial judge has discretion to grant conditional leave to defend based on triable issues, essential for expediting commercial disputes, unless genuine financial inability is subs....
The court emphasized the necessity of proper service of summons in summary suits and the defendants' rights to defend, leading to the modification of the order directing the deposit of the admitted a....
The presence of triable issues in a summary suit, where the defendant's obligations are interdependent, necessitates unconditional leave to defend without a pre-deposit requirement.
The court confirmed that jurisdiction is established where significant parts of the cause of action arise, supported by relevant documentation, and upheld the decree in absence of a legitimate triabl....
Unconditional leave to defend is the rule, conditional leave to defend is the exception, and denial of leave to defend is to be limited to the most extreme of cases.
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