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2003 Supreme(Del) 295

High Court Of Delhi
RELIANCE INDUSTRIES LIMITED - Appellant
Versus
IMPERIAL PIGMENTS (P) LIMITED - Respondent
Interim Application 968 of 1999
Decided On : 03/25/2003

Advocates Appeared:
ANSHU MAHAJAN, KAJAL CHANDRA, R.SASIPRABHU, Rajiv Sawhney, Valmiki Mehta

Headnote:Civil Procedure Code, 1908 - Order 37 Rule 3 — Leave to defend — Summary suit — Suit filed on basis of invoices — A summary suit predicated on an acknowledgement signed by one partner is maintainable and that such a document fully conforms to the rigours of a contract — Leave to defend granted to the defendants conditional on either of the defendants deposits suit amount with the interest thereon — Application disposed of.

       Held :

       Not only a written acknowledgement of debt by Defendant No. 2 but as a complementary feature, several cheques aggregating to the sum of Rs. 1.90 crores. So far as cheques are concerned, the Negotiable Instruments Act stipulates that there shall be a presumption as far as consideration for their issuance is concerned. This aspect of the case has not been answered by the Defendants. Although there is no material available on the record to indicate that deliveries were not effected, I need not go into this question since it is not the Defendants case that the bounced cheques were in respect of another series of transactions. Moreover the plethora of documentary evidence admitting and assuming liability cannot be ignored.

       It is also being contended by senior counsel for the Defendants that a summary suit under Order xxxvII C.P.C. is not permissible on the basis of a running account. This case has not been set up in either of the affidavits of the Defendants seeking Leave to Defend. Since it is legal in nature, I have considered it nevertheless. Counsel for respondent has also relied on Sections 25, 126, 127 of the Indian Contract Act. In the Plaint it has been pleaded that the Plaintiffs are entitled to claim interest at the rate of 24 per cent per annum as per the companys policy. Counsel for respondent has challenged this claim on the grounds of it being unilateral. I do not propose to go into this question in detail at the present stage and am of the opinion that interest at the rate of 12 per cent per annum should be calculated on the total quantum of the cheques which have been issued and thereafter dishonoured.

       Leave to Defend is granted to the Defendants conditional on either of the Defendants depositing a sum of Rupees One Crore and Ninety Lakhs together with the interest thereon calculated at the rate of twelve per cent per annum from the date of the issuance of each of the cheque.

VIKRAMAJIT SEN

( 1 ) BY these Orders, I shall dispose off the Defendants applications (under Order XXXVII Rule 3 (5) read with Section 151 of the C. P. C. praying for Leave to Defend the Suit) being IAs No. 968/99 [filed by Defendant No. 2] and I. A. 1939/00 [filed by Defendant No. 1].

( 2 ) THE first question to be addressed is whether the parties had entered into a written contract on the breach of which this summary suit is founded. The Plaintiff argues that all the terms of the parties engagement have been reduced to writing and can be found on the reverse side of each of its Invoices. I had the occasion to consider this very contention in the case titled KLG Systems Ltd. vs. Fujitsu ICIM Ltd. , 92 (2001) Delhi Law Times 88. My conclusion was that " it is no longer res integra that invoices/bills are written contracts within the contemplation of this Order. Reference is directed to Messrs. Punjab Pen House v. Samrat Bicycles Ltd. , AIR 1992 Delhi 1; Corporate Voice (Pvt.) Ltd. v. Uniroll Leather India Ltd. , 60 (1995) DLT 321; and Beacon Electronics v. Sylvania and Laxman Ltd. , 1998 (3) Apex Decisions (Delhi) 141. " I may only add that if the transaction in question is covered by a single invoice or bill the party relying on it should be in a position to indubitably disclose that the adversary s attention was specifically drawn to the terms on the back of the bill, and that it consented to be bound to those terms by failing to lodge any demur. One must not lose sight of the reality that a person does not always read a bill or invoice from its start to its finish, especially the reverse side. Where the bill is preceded by a delivery challan which does not contain all the terms of the transaction, this presumption may be an exception. However, where there have been a series of transactions in respect of which identical terms are printed on the bill, especially where both parties are commercial entities, this presumption would become irresistible. In the case at hand, several supplies have been made and each one is covered by identical and replicated terms. I am in no manner of doubt that a written contract can be found in these invoices such as would sufficiently attract the rigours of Order XXXVII of the C. P. C.

( 3 ) THE next point is obviously whether the Defendant s liability towards the sums claimed in the summary suit, or any lesser sums, is apparent on the face of the record. The Court must eschew a minute investigation into the rival cases, and if there is reasonable doubt in its mind, if there is only a preponderant possibility in the veracity of the Plaintiff s claim, leave should be granted. The approach advocated by the Hon ble Supreme Court in Mechalec Engineers and Manufacturers v. Basic Equipment Corporation, AIR 1977 SC 577 should be adhered to since the spectrum of possibilities has been spelt out in that judgment. These have been adumbrated in this celebrated judgment to comprise- " (a) If the defendant satisfies the Court that he has a good defence to the claim on its merits the plaintiff is not entitled to leave to sign judgment and the defendant is entitled to unconditional leave to defend, (b) If the defendant raises a trivial issue indicating that he has a fair or bona fide or reasonable defence although not a positively good defence the plaintiff is not entitled to sign judgment and the defendant is entitled to unconditional leave to defend, (c) If the defendant discloses such facts as may be deemed sufficient to entitle him to defend, that is to say, although the affidavit does not positively and immediately make it clear that he has a defence, yet, shews such a state of facts as leads to the inference that at the trial of the action he 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





















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