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1989 Supreme(Cal) 185

High Court Of Calcutta
PADMA KHASTGIR, AMARENDRA CHANDRA SENGUPTA
CYCLE CORPN.OF INDIA LTD. - Appellant
Versus
BISWANATH DHANDHANIA - Respondent
A. F. O. O.  462  Of  1987
Decided On : 04/12/1989

In an application under Chapter 13A of the Rules of the Court, the court should consider the entire facts and circumstances of the case and the defence raised by the defendant before passing a final decree. The admission of liability should be unconditional and unequivocal and cannot be dissected and accepted in part and rejected in part.

Headnote:

ADMISSION OF LIABILITY - FINAL JUDGMENT - CHAPTER 13A OF THE RULES OF THE COURT - CIVIL PROCEDURE CODE, 1908 - ORDER 37 RULE 3 - INTERPRETATION OF ADMISSION OF LIABILITY - TRIABLE ISSUE - BONA FIDE DEFENCE - SETTING ASIDE OF FINAL JUDGMENT - APPEAL - DISCRETION OF THE COURT - JUDICIAL LINES - PRINCIPLES OF NATURAL JUSTICE.

Fact of the Case:

Cycle Corporation of India (appellant) and Biswanath Dhandhania and others (respondents) had various business transactions. The accounts of the respondents' sister concerns were combined and adjusted from time to time. The respondents filed a suit against the appellant for recovery of Rs. 20 lakhs. The appellant filed a counterclaim for Rs. 88 lakhs against the respondents and their sister concerns. In an application under Chapter 13A of the Rules of the Court, the trial court passed a final decree directing the appellant to pay Rs. 12,13,482/- to the respondents based on an admission of liability by the appellant.

Finding of the Court:

The court found that the admission of liability was made in the context of a letter where the appellant had also raised various other issues and requested for settlement of accounts. The court also found that the appellant had raised bona fide defences and triable issues in its affidavit in opposition to the application under Chapter 13A.

Issues: 1. Whether the admission of liability made by the appellant in its letter was unconditional and unequivocal? 2. Whether the trial court erred in passing a final decree under Chapter 13A without considering the entire facts and circumstances of the case and the appellant's defence? 3. Whether the appellant was entitled to an opportunity to defend the suit in view of the triable issues raised by it?

Ratio Decidendi: 1. The court held that the admission of liability made by the appellant in its letter was not unconditional and unequivocal as it was made in the context of a letter where the appellant had also raised various other issues and requested for settlement of accounts. 2. The court held that the trial court erred in passing a final decree under Chapter 13A without considering the entire facts and circumstances of the case and the appellant's defence. 3. The court held that the appellant was entitled to an opportunity to defend the suit in view of the triable issues raised by it.

Final Decision: The court set aside the impugned order and allowed the appeal.

PADMA KHASTGIR, J.

( 1 ) IN a suit filed by the respondents Biswanath Dhandhania and Ors. against Cycle Corporation of India Ltd. the appellant herein, an application for final judgment under Chapter 13a of the Rules of this Court was moved before Mr. Justice Ajit Kumar Sengupta whereupon the learned Judge passed a decree directing the appellant to pay to the plaintiffs a sum of Rs. 12,13,482/- together with interest at the rate of 9% per annum and cost assessed at Rs. 1,700/- of such application. Mr. Gour Roychowdhury, the learned lawyer was appointed as Receiver to hold the decretal sum. The learned Judge proceeded on the basis that there was an unequivocal admission of liability by the appellant in respect of a sum of Rs. 12,13,482. 95 and the respondents/plaintiffs were not in any way concerned with the liabilities of their sister concerns.

( 2 ) BISWANATH Dhandhania and Radheshyam Dhandhania carried on business in partnership in the name and style of M/s. General Oil Co. Biswanath Dhandhania is also the sole Proprietor of Sri Hanuman Trading Co. Biswanath Dhandhania, Bajranglal Dhandhania and Pawan Kumar Dhandhania carried on business in copartnership under the name and style of M/s. Premier Trading Corporation. Biswanath Dhandhania also carried on business in co-partnership under the name and style of Industrial Trade Centre. Biswanath Dhandhania is a common partner in all the three firms of General Oil Co. , Premier Trading Corporation and Industrial Trade Centre and the sole proprietor of Sri Hanuman Trading Co. The appellant Cycle Corporation of India had various transactions with each of the said concerns. Various correspondences that passed by and between the parties and relied upon by the parties indicate that there were requests made by one concern and the other to the Cycle Corporation of India to transfer their debit account to one sister concern to the other. Under the circumstances the accounts of the said concerns were combined and adjusted from time to time. Biswanath Dhandhania and Radheshyam Dhandhania on 29th Sept. 1986 filed the suit against Cycle Corporation of India for recovery of Rs. 20 lakhs and in such suit as indicated earlier on an application under Chapter 13a the judgment was passed for a sum of Rs. 12,13,482/- on the basis of an admission stated to have been made by the appellant by its letter dt. 2nd of June, 1986. Cycle Corporation of India on 21st of Mar. 1987 filed a suit against Biswanath Dhandhania and the other firms for recovery of a sum of Rs. 88 lakhs. Being aggrieved the present appeal had been preferred from the said impugned judgment.

( 3 ) THE main contention of the appellant was that the learned Judge while passing a final decree under Chapter 13a in a summary procedure should have taken into consideration the entire facts and circumstances of the case and the letters written by Cycle Corporation of India in entirety instead of splitting the said letter and relying only on a portion thereof as an admission of liability. In the affidavit filed on behalf of the appellant in the said application under Chapter 13a the appellant raised bona fide defence and disputed the claim of the plaintiffs, the accounts maintained by and between the parties require detailed investigation and scrutiny. In that view of the matter, the admission of liability without taking into consideration the context and also the defence triable, issue raised in the affidavit in opposition did not amount to an unconditional and unequivocal admission on the part of the appellant. A portion of the letter where such admission had been made should not have been taken in isolation for the purpose of passing a final decree when the appellant by letters dt. 29th July, 1986 and 4th of Aug. 1986 informed the respondents of the consolidation and adjustment of accounts which had not been disputed by them. In fact the appellant had filed a suit being Suit No. 219 of 1987 claiming a decree for Rs. 88,91,028. 67 jointly and








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