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2012 Supreme(Del) 1499
High Court of Delhi
VALMIKI J. MEHTA
M/S Upvan Steel Tubes Pvt. Ltd. & Another
Versus
M/S Tube Investments Of India Ltd.
RFA No. 593 OF 2007
Decided on : 18-05-2012
For the Appellants:Ajay Malhotra, Advocate.
For the Respondent: None.
The main legal point established in the judgment is that defenses raised by the defendant must not be illusory or devoid of merit, and there must be a triable issue for grant of leave to defend.
Headnote:
CPC - Recovery Suit - 96 - Summary judgment was decreed in favor of the plaintiff for recovery of a sum of Rs.14,01,320/- along with interest. The defendant raised defenses related to defective goods, settlement between the parties, and alleged payments to an agent of the plaintiff. The trial court dismissed the leave to defend application, holding that the defenses were devoid of merit and did not raise any triable issues.
Fact of the Case:
The plaintiff filed a suit for recovery of a sum of Rs.14,01,320/- along with interest against the defendant for non-payment of invoices for goods supplied. The defendant raised defenses related to defective goods, settlement between the parties, and alleged payments to an agent of the plaintiff.
Finding of the Court:
The trial court found that the defenses raised by the defendant were devoid of merit and did not raise any triable issues. The court dismissed the leave to defend application and decreed the suit in favor of the plaintiff.
Issues: The issues involved in the case were related to the validity of the defenses raised by the defendant, including the alleged defective goods, settlement between the parties, and alleged payments to an agent of the plaintiff.
Ratio Decidendi: The court held that the defenses raised by the defendant must not be a 'moonshine' and there must be a triable issue for grant of leave to defend. The court also emphasized the importance of contemporaneous correspondence and written evidence to support the defenses raised.
Final Decision: The appeal was dismissed, and the trial court's decision to decree the suit in favor of the plaintiff was upheld.
VALMIKI J. MEHTA, J.
1. The challenge by means of this Regular First Appeal filed under Section 96 of the Code of Civil Procedure, 1908(CPC) is to the impugned judgment of the trial Court dated 29.8.2007 decreeing the suit for recovery filed under Order 37 CPC of the respondent/plaintiff for a sum of Rs.14,01,320/- alongwith pendente lite and future interest at 9% per annum simple.
2. The facts of the case are that the respondent/plaintiff was the seller and the appellant No. 1/defendant company was the buyer of tubes and tubular goods made of steel and other metals. The respondent/plaintiff claimed that a sum of Rs.11,99,209/- became payable as per invoices which were annexed with the plaint as annexure 3 to 16 and also because the appellant had acknowledged the debts in writing under the signatures of the Director of the appellant No. 1/defendant company, being a sum of Rs.8,37,799/-with respect to the Delhi branch; and a sum of Rs.4,65,366.25 with respect to the Noida branch. Since the dues were not paid the subject suit came to be filed.
3. On service for summons for judgment, the appellant/defendant filed its leave to defend application in which three principal defences were raised, and which are also the points argued before this Court:-
i) The goods which were supplied by the respondent/plaintiff to the appellant were defective and therefore no amount can be claimed with respect to the subject invoices.
ii) In fact there was a settlement between the parties on 7.8.2004 whereby the respondent/plaintiff agreed to give adjustment to the appellant/defendant with respect to the defective goods.
iii) That payments were in fact made to one Mr. M.D.Bhasin who was an agent of the respondent/plaintiff-company, and therefore, no amount is due to the respondent/plaintiff.
4. Trial Court has dismissed leave to defend application by making the following observations:
“6. Order 37 CPC provides for summary procedure in respect of the suit for recovery of money. The essence of summary suit is that the defendant is not, as in an ordinary suit, entitled as a matter of right to defend the suit. The object underlying the summary procedure is to prevent unreasonable obstruction by a defendant, who has no defence. The arguments of Ld. Counsel for the defendant that the court has no territorial jurisdiction is devoid of any merits as it can be seen that the invoices were issued from Delhi and the defendant was carrying on its business, admittedly, till July, 2002 in Delhi. Therefore, firstly, if the plaintiff is supplying certain goods at Noida, no issue can be raised that the Delhi courts have no jurisdiction merely because the accounts are maintained separately. It cannot be said that no cause of action has arisen within the jurisdiction of this court, thus this argument is rejected. The next argument that the defendant has never dealt with the plaintiff company is also conceived as bare perusal of invoices show that the invoices are being issued by Tube investments, which is the plaintiff company. The defendant very well knew that they are dealing with which company. The invoices do not mention that the goods are being supplied through Mr. M.S.Bhasin herein. Therefore, these arguments are also devoid on merits.
7. The other arguments of Ld. Counsel for the defendant that the suit has not been properly instituted by a duly authorized person does not hold good as the defendant has failed to show as to how the person is not authorized. By merely making an averment that the person is not authorized is neither here nor there. It does not prove the contention of the defendant that the suit has not been filed by the authorized person, therefore, this contention is accordingly rejected.
8. It has been argued that the goods supplied by the plaintiff company to the defendant were of inferior quality. From the perusal of the record, it is clear that nothing has been pointed out by the defendant that when they had returned the goods ba
