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2009 Supreme(Del) 76
IN THE HIGH COURT OF DELHI
RAJIV SAHAI ENDLAW
JUKI SINGAPORE PTE LTD. - Appellant
Versus
JAY CEE ENTERPRISES PVT.LTD. - Respondent
I.A.3995/2004 IN CS(OS) 1760/2003
Decided On : 20-01-2009
Mr. P.V. Kapur, Sr. Advocate, Mr. Dhruv Wahi, Advocate
Mr. Arvind Nigam, Advocate with Mr. Samrat K. Nigam, Advocate
The main legal point established in the judgment is that a suit for recovery of a debt must meet the requirements of Order 37 of the CPC to qualify as a suit under the order. Claims based on documents do not automatically fall under Order 37, and the lack of a single document specifying the suit amount as a debt due can render the suit not maintainable under the order.
Headnote:
Order 37 of the CPC - Suit for recovery of balance due on an account - No single document referred to in the plaint - Suit not maintainable under Order 37 of the CPC
Fact of the Case:
Plaintiff filed a suit under Order 37 of the CPC for recovery of balance due on an account between the parties. Defendant No.1 failed to make payments for supplied goods, leading to a total outstanding amount. Defendant No.2 bank released shipping documents without acceptance of payment. Plaintiff claimed the suit was filed under Order 37, but no specific clause was mentioned. Defendant applied for leave to defend.
Finding of the Court:
The court found that the suit did not qualify as a suit under Order 37 of the CPC as it did not fall under the requirements of the order. The court emphasized that no single document containing the suit amount as a debt due from the defendant to the plaintiff was referred to in the plaint. The court also noted that the suit did not meet the criteria for expedited adjudication under Order 37.
Issues: The main issue was the maintainability of the suit under Order 37 of the CPC and the application for leave to defend. The court also considered the disputed transactions between the parties and the nature of the relationship between the plaintiff and the defendant.
Ratio Decidendi: The court held that a suit for recovery of the amount did not qualify as a suit under Order 37 of the CPC as it did not meet the requirements of the order. The court emphasized the lack of a single document specifying the suit amount as a debt due from the defendant to the plaintiff. The court also highlighted that claims based on documents do not automatically fall under Order 37.
Final Decision: The application for leave to defend the suit was allowed as the court found the suit to be not maintainable under Order 37 of the CPC.
1. Application of the defendants for leave to defend a suit filed under Order 37 of the CPC is for consideration. The plaintiff instituted the suit impleading Corporation Bank as the defendant No.2.
2. It is the case in the plaint that the defendant No.1 approached the plaintiff for being appointed as the Incharge for sales and service of certain machines of the plaintiff for North India market operations; that MOUs dated 17th June, 1997 and 20th September, 2000 were executed by the parties; that pursuant to the said MOUs the plaintiff supplied sewing machines and various spare parts to the defendant No.1 in total amounting to USD 2,64,610.44. The details of invoices together with bills of lading and debit notes, credit notes raised by the plaintiff on the defendant No.1 against the supplies made during the relevant period were set out in para 9 of the plaint; it was further stated that the defendant No.1 was a habitual defaulter in making payment coercing the plaintiff to issue debit notes for interest accrued on the invoices @1.5% of the invoices value; that the defendant No.2 bank acting in connivance with the defendant No.1 released shipping documents in respect of invoice dated 11th August, 2002 of the value of USD 45,844 in favour of the defendant No.1 without acceptance of the documents and the defendant No.1 had failed to pay the value thereof also; thus the said amount of USD 45,844 was stated to be due from the defendant No.1 to the plaintiff in addition to the total outstanding of USD 2,64,610.44 as set out in para 9 of the plaint; that the defendant No.2 bank was also liable for the said USD 45,844 jointly and severally with the defendant No.1.
3. It is further the case in the plaint that commission of USD 32,424.93 and reimbursement of expenses of USD 2,784 was due from the plaintiff to the defendant No.1. It was thus stated that after adjusting the amounts due from the plaintiff to the defendant No.1, an amount of USD 2,29,401.51 was due from the defendant No.1 to the plaintiff. It is further the case in the plaint that the defendant No.1 admitted liability to pay USD 2,57,602 to the plaintiff in its letters dated 14th February, 2003 and 21st February, 2003. It was further pleaded that however upon failure of the defendant No.1 to pay the amounts, the plaintiff got legal notices issued to the defendant No.1 in response whereto the defendant No.1 as an after thought took false defences to the aforesaid claim. Inclusive of interest, a sum of USD 2,67,365.89 equivalent to Rs.1,23,30,914.85 was stated to be due to the plaintiff.
4. The plaintiff in para 17 of the plaint stated that the suit was filed under Order 37 of the CPC and no relief which did not fall within the ambit of the said rule had been claimed in the plaint. Even though the claim against the defendant No.2 bank was stated to be to the extent USD 45,844 only but in the prayer paragraphs the decree against both the defendants in the said sums of Rs.1,23,30,914.84 was claimed.
5. Both the defendants applied for leave to defend. On 15th December, 2005 the counsel for the plaintiff stated that since some deposits had been made by the defendant No.1 with the plaintiff during the pendency of the these proceedings and since these deposits covered the particular invoices because of which the defendant No.2 was impleaded, the defendant No.2 be deleted from the array of parties. The same was allowed. Thus, the suit survives against the sole defendant now.
6. Before proceeding to consider the application of the defendant for leave to defend, it is worthwhile to consider the maintainability of the suit under Order 37 of the CPC and which plea is taken in the application for leave to defend also.
.7. Though the plaint states that the suit is filed under Order 37 of the CPC, as required to be stated under Rule 2 thereof, but it has nowhere been specified as to under which clause specified in Rule1 (2) of Order 37, the suit falls. During the
