2006 Supreme(Guj) 754

Gujarat High Court
Judgename :K.M.MEHTA
NEW INDIA ASSURANCE COMPANY LTD. - Appellant
Versus
STATE TRADING CORPORATION OF INDIA LTD. - Respondent
SPECIAL CIVIL APPLICATION 22891 Of 2006
Decided On : 12/01/2006

Headnote:Point in Issue :

       Whether suit for liquidated demand with interest is maintainable under provisions of summary procedure under the Code.

       Head Note :

       (a) Civil Procedure Code, 1908 (Central Act 5 of 1908) - Order 37, Rule 2(b) - Summary suit - Liquidated demand with interest - Maintainability - Finding of - The plaintiffs had filed suit on the basis that they have suffered damages to the goods on account of VIS MAJOR - The defendant has appointed Surveyors for assessment of damages - Surveyors have submitted their reports - The said reports were not repudiated by defendant - Therefore, plaintiffs claims are based on liquidated demand - On plain reading of the provision under the Code suit is maintainable - Contention that when plaintiff had filed a suit for liquidated demand plus interest thereon, it is not maintainable is without any substance particularly after amendment which provides that plaintiff can recover debt or liquidate demand in money payable by defendant with or without interest.

       Held :

       In this case, the plaintiffs had filed suit on the basis that they have suffered damages to the goods on account VIS MAJOR. The defendant has appointed surveyors and the surveyors have submitted their reports. The said reports were not repudiated by the defendant. Therefore, the claim of the plaintiffs are based on liquidated demand. [Para 8.1]

       The second contention of the defendant that present suit of the plaintiffs under Order 37 is not maintainable when plaintiffs filed a suit for liquidated demand plus interest thereon. In this behalf I once again rely upon provision of Order 37 Rule 2 (b) of the CPC, particularly after amendment which provides that plaintiffs can recover debt or liquidate demand in money payable by the defendant, with or without interest. The said provision makes it clear that plaintiffs can file suit of principal amount plus interest. [Para 8.5]

       Head Note :

       (b) Civil Procedure Code, 1908 (Central Act 5 of 1908) - Order 37 and Order 37, Rule 3 - Summary suit - Granting leave to defend - Condition to deposit half of suit amount - Jurisdiction - Exercise of - Sustainability - Finding of - Provision under the Code provides for a summary procedure in respect of certain suit - The essence of the summary suit is that defendant is not, as in an ordinary suit entitled as of right to defend the suit - The defendant has to apply for leave to defend and that can be granted only if the affidavit filed by him discloses such facts as the Court may deem sufficient for granting leave to defendant to appear and defend the suit - It is also settled law from various decisions of Apex Court that the leave to defend should be given unconditionally if defendant shows a prima facie case or raise triable issue - However, leave should be made conditional as in the case if the Court doubts bona fide and thinks that defence is only to give time - Court opined that imposition of condition by trial Court of 50% is based on the facts and circumstances of the case and based on sound judicial discretion and the same cannot be interfered by the Court particularly under restricted jurisdiction of the Court.

       Held :

       In view of the aforesaid facts and circumstances of the case, when I have examined the facts of the case and the trial Court also examined the facts of the case and has come to the conclusion that in the present case the damage to the goods on account of Vis major is not in dispute. The loss is assessed by the surveyor who are appointed by the defendant. The same has been accepted by the defendant. However, only defence of the defendant in the reply in discarding earlier surveyor report and appointment of another surveyor without any cogent and convincing reasons or material is not well justified. I have considered the facts and circumstances as to how the contention of the defendant regarding report of second surveyor is not believable to the Court. In view of this, in my view, when the trial Court exercised judicial discretion on sound judicial principle and the trial Court has come to the conclusion that the defence of the defendant is not good or bona fide and defence is not reasonable defence and the defendant discloses such fact which may not deemed sufficient to entitle to defend the case. The trial Court is well justified in directing the defendant to defend the suit only imposing condition to deposit 50% of suit amount in this behalf. In my view for imposing condition by the trial Court of 50% is based on the facts and circumstances of the case and based on sound judicial discretion and the same cannot be interfered with by this Court particularly under Article 227 of the Constitution of India. [Para 9.4C]

       When the trial Court passed the order on the basis of the material produced by the parties, this is not the matter in which this Court while exercising power under Section 115 of the CPC (as it was existing at the relevant time) or can entertain a petition under Article 227 of the Constitution of India in this behalf. [Para 9.5]

       So, in any view of the matter, once when the trial Court has not committed any error and there is no jurisdictional error and acted with discretionary jurisdiction then this Court may not interfere in this behalf. [Para 9.7]

       Court is of the view that even if this Court has power to examine the matter under Article 227 of the Constitution, this Court is of the view that this Court may not exercise the power under Article 227 of the Constitution because there are no jurisdictional error committed by the learned Judge in this behalf. The trial Court passed the order within the jurisdiction and the trial Court has not crossed the limit of the authority while passing the order. [Para 9.8-A]

       In the facts and circumstances of the case, when the trial Court imposed the conditions, the said conditions are based on material facts set out in the case and the learned trial Judge has exercised discretion on sound judicial principle. In view of the same, this Court do not intend to interfere with the discretionary order of the learned trial Judge based on sound principle after appreciating all the facts and circumstances of the case by imposing condition of depositing 50% of the suit amount particularly in view of Division Bench judgment of this Court in United Industries & Ors. vs. M/s. Dalwadi and Co. & Anr., AIR 1969 Guj. 18, and coupled with the fact that two decisions of the Honble Supreme Court where under Article 227 of the Constitution, the Honble Supreme Court held that the High Court should not interfere with discretionary jurisdiction in this behalf. [Para 12]

       Law Laid Down :

       Where the case raises a triable issue then leave to defend should ordinarily be granted unconditionally.

       Case Law Analysis :

       United Industries & Ors. vs. M/s. Dalwadi and Co. & Anr., AIR 1969 Guj. 18 [Para 5.12];; Mohd. Yunus vs. Mohd. Mustquin, AIR 1984 SC 38 [Para 5.12];; Mohd. Yunus vs. Mohd. Mustquin, AIR 1984 SC 38 [Para 9.7];; Ouseph athai & Ors. vs. M. Abdul, 2002 (1) SCC 319 [Para 9.8];; Rajinder Kumar Khanna vs. The Oriental Insurance Co. & Anr., AIR 1990 Delhi 278 [Para 8.3];; Ficom Organics Ltd. vs. Laffans Petrochemicals (Guj.) 99 Company Cases (2000) 471 [Para 11];; Ficom Organics Ltd. vs. Laffans Petrochemicals Limited, 2000 Vol. 99 Company Cases 471 [Para 5.11];; Ouseph Mahai & Ors. vs. M. Abdul Khadir, 2002 (1) SCC 319 [Para 5.12];; Santosh Kumar vs. Bhai Mool Singh, AIR 1958 SC 321 [Para 9];; Jacobs vs. Booths Distillery Co., 1901 (85) LT 262 [Para 9];; Defiance Knitting Industries (P) Ltd. vs. Jay Arts, 2006 (8) SCC 25 [Para 9.3];; Ouseph Mathai and Others vs. M. Abdul Khadir, 2002 (1) SCC 319 [Para 9.8];; ONGC vs. Collector of Central Excise, 1995 (4) SCC 541 [Para 9.10];; Chief Conservator of Forest, Government of Andhra Pradesh vs. Collector & Ors., 2003 (3) SCC 472 [Para 9.10].-Relied on

       Conclusion :

       In the facts of the case Court held that leave to defend granted to petitioner defendant on payment of half of the suit amount is justified and calls for no interference.

       Cases Referred :

       Kalubhai Karsanbhai vs. Bai Jiviben Ramji, 1982 Guj. (UJ) 7;; Jashbhai Motibhai Patel vs. Hasmukhbhai Ravjibhai Patel, 1990 (2) GLH 438;; Santosh Kumar vs. Bhai Mool Singh, AIR 1958 SC 321;; M/s. Mechalec Engineers & Manufacturers vs. M/s. Basic Equipment Corporation, AIR 1977 SC 577;; Surya Dev Rai vs. Ram Chander Rai, AIR 2003 SC 3044;; The New Ashapuri Co-operative Housing Society Ltd. & Anr. vs. Arvindkumar Manilal Patel, 1975 Vol. 16 GLR 53;; Rifkin vs. Safenovitz, 40 A 2d. 188;; National Textile Corporation, Ahmedabad vs. Rajendra Sankalchand, 1982 GLH (UJ) 7;; Manohar Lal vs. Nanhe Mal, AIR 1938 Lah 548(I);; Shib Karan Das vs. Mohammed Sadiq, AIR 1936 Lahore 584;; S. Kiranmoyee Dassi vs. Dr. J. Chatterjee, 1945 (49) Cal WN 246;; Mrs. Raj Duggal vs. Ramesh Kumar Bansal AIR 1990 SC 2218;; Milkhiram (India) (P) Ltd. vs. Chamanlal Bros., AIR 1965 SC 1698 = 68 Bom LR 36;; Kiranmoyee Dassi vs. Dr. J. Chatterjee AIR 1949 Cal 479 = 49 CWN 246;; Trimbak Gangadhar Teland, 1977 (2) SCC 437;; Gajanan Moreshwar Parelkar vs. Moreshwar Madan Mantri, AIR 1942 Bom 302;;

       Decided in Favour of :

       Respondent

       Petition Dismissed