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2002 Supreme(Del) 379
High Court Of Delhi
A.R.ELECTRONIC PRIVATE LIMITED - Appellant
Versus
R.K.GRAPHICS PRIVATE LIMITED - Respondent
Decided On : 03/15/2002
The main legal point established in the judgment is that the summary procedure under Order 37 CPC is not applicable when the invoice does not constitute a written contract as required by the law.
Headnote:
Order 37 CPC - Recovery of Debt - 37(1)(b) - Summary procedure not applicable - Judgment discussed the applicability of summary procedure under Order 37 CPC based on the invoice of goods supplied to the defendant. The court held that the invoice did not amount to a written contract as required under Order 37 CPC, and therefore, the summary procedure was not applicable. The court referred to previous judgments to support its decision.
Fact of the Case:
The plaintiff filed a civil suit for recovery of the price of goods supplied to the defendant. The defendant filed an application under Order 37 Rule 4 CPC to set aside the decree, claiming that the summons was not served, and there was no written contract or substantial defense to the suit.
Finding of the Court:
The court found that the invoice did not amount to a written contract as required under Order 37 CPC, and therefore, the summary procedure was not applicable. The court also held that the defendant needed to prove substantial defense to set aside the decree under Order 37 Rule 4 CPC.
Issues: Applicability of summary procedure under Order 37 CPC, sufficiency of the invoice as a written contract, and the requirement of substantial defense to set aside the decree under Order 37 Rule 4 CPC.
Ratio Decidendi: The court held that the invoice did not constitute a written contract as required under Order 37 CPC, and the defendant needed to prove substantial defense to set aside the decree under Order 37 Rule 4 CPC.
Final Decision: The court dismissed the petition, finding no error of jurisdiction, illegality, or material irregularity in the exercise of jurisdiction by the trial court.
( 1 ) THIS revision petition filed under Section 115 cpc is filed by the petitioner, which is plaintiff in the suit assailing the order of the Commercial Civil judge dated 28. 11. 1998 by which he had allowed the application of the respondent (defendant) filed under order 37 Rule 4 CPC and had set aside a decree passed under Order 37 Rule 2 CPC.
( 2 ) BRIEFLY, the facts are that the petitioner/ plaintiff filed a civil suit for recovery of the price of the floods supplied to the defendant by invoice no. 635 dated 9. 6. 1994 for Rs. 33,948. 00 plus compound interest with monthly rests @ 5% over and above 18% per annum from 11. 6. 1994 to 10. 5. 1997 amounting to Rs. 35,302. 00 making the total amount outstanding to Rs. 69,250. 00. It was alleged that the amount due was not paid despite service of the notice of demand.
( 3 ) THE summons prescribed in Form 4 of Appendix B of cpc was served on the defendant which failed to enter appearance in accordance with Order 37 Rule 3 (1) CPC. The court accordingly allowed the claim of the plaintiff and passed a decree for recovery of Rs. 69,250. 00 alongwith cost and compound interest with monthly rest @ 5% over and above 18% per annum pendente lite as well as future interest till realisation of the decretal amount by order dated 1. 11. 1997.
( 4 ) THE defendant filed an application on 27. 3. 1998 under Order 37 Rule 4 CPC for setting aside the decree dated 1. 11. 1997, inter alia, pleading that the summons of the suit was not served on it; the defendant was earlier functioning at A-2/177 Safdar jung Enclave. New delhi but had shifted to the new address (C-9 Sector 8. NOIDA. UP); the present occupant of the premises at safdar jung Enclave informed the defendant that a warrant of attachment was brought by the bailiff from the court to the said premises on 16. 3. 1998; the defendant contacted the counsel and learnt about the passing of the impugned decree on 1. 11. 1997; before that the defendant had no knowledge of the suit and the decree; no amount was due or recoverable from the defendant since the goods were never purchased under the invoice in question; notice of demand was also not served; there was no agreement about compound interest as claimed and lastly; the suit for recovery of the price of the goods cannot be filed under Order 37 CPC.
( 5 ) THIS application was resisted by the plaintiff. It filed a reply in which the allegations made in the application were refuted. It was asserted that the summons of the suit was duly served on the defendant and that the defendant failed to enter appearance within the prescribed period of 10 days in accordance with Rule 3 (1) of Order 37 CPC, therefore, the trial court was justified in passing the decree. It was further alleged that for getting a relief under Order 37 Rule 4 CPC the defendant was not only to show that the summons was not served on it in accordance with Order 37 Rule 3 (1) CPC but he was further required to show that it had substantial defence to the suit. The learned trial judge has held that the summons under Order 37 Rule 3 cpc was served on the defendant. Therefore, his view that the defendant had disclosed substantial defence in the application and it was entitled to defend the suit unconditionally was erroneous and illegal. He prayed that the application should be dismissed.
( 6 ) NOTICE of the petition was served on the respondent but it failed to contest it. Arguments of the counsel for the petitioner were heard and the case law cited in support was taken into consideration. The learned Commercial Civil Judge in the impugned order granted leave to defend the suit to the defendant mainly on the ground that the suit was filed on the basis of an invoice and the plaintiff had failed to prove that there was a written contract indicating the terms thereof between the parties, therefore, special reasons have been disclosed in the application for which the defendant is entitled to unconditional leave to defend. On t
