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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
A.J. SHASTRI, J.
Pallavi Dealers Pvt. Ltd. – Appellant
Versus
Vineet S. Jain – Respondent
R/Special Civil Application No. 13956 of 2019
Decided On : 26-08-2019
Civil Procedure Code, 1908 – Order- 8 & 37 – Rule 3(5) – Companies Act, 1956 – Negotiable Instruments Act, 1881 – Constitution of India – Articles 226 and 227 – Seeking to issue writ of mandamus or writ in nature of mandamus or writ of certiorari or appropriate writ, order or direction quashing and setting aside impugned order passed by Judge, City Civil Court – Pending hearing and final disposal of present petition, may be pleased to stay implementation, operation and execution of impugned order passed by Judge, City Civil Court – Petitioners that City Civil Judge reheard parties and passed further common order rejecting summons for judgment and allowed leave to defend at on condition that petitioners shall deposit an amount to defend suit within a period of one month from the date of the order. It is this order of granting conditional leave, present petitioners have invoked extraordinary jurisdiction of this Court for challenging same. – Challenged – Held, According to background of fact is that cheques have been issued and same returned without any encashment this is an additional circumstance about conduct of petitioners and even after agreement of payable amount – Cheques not been allowed to be encashed such conduct also ousts petitioners from equitable principle which is very relevant to exercise extraordinary jurisdiction – On contrary, original plaintiff dragged to a Court of law under provisions of Negotiable Instruments Act. Irrespective of this, it is also a principle laid down that issuance of cheque itself is an acknowledgment of debt – Unless it is case that no cheques have been issued at all. This is not case of petitioners here on hand – Circumstance which not ignored by Court, as rightly been agitated by counsel appearing for respondent – No error is committed by Court below in imposing condition while granting leave to defend to petitioners – Petition dismissed (Paras: 25 & 26 )
Facts of the case:
Seeking to issue writ of mandamus or writ in nature of mandamus or writ of certiorari or appropriate writ, order or direction quashing and setting aside impugned order passed by Judge, City Civil Court – Pending hearing and final disposal of present petition, may be pleased to stay implementation, operation and execution of impugned order passed by Judge, City Civil Court – Petitioners that City Civil Judge reheard parties and passed further common order rejecting summons for judgment and allowed leave to defend at on condition that petitioners shall deposit an amount to defend suit within a period of one month from the date of the order. It is this order of granting conditional leave, present petitioners have invoked extraordinary jurisdiction of this Court for challenging same. – Challenged
Findings of the court
According to background of fact is that cheques have been issued and same returned without any encashment this is an additional circumstance about conduct of petitioners and even after agreement of payable amount – Cheques not been allowed to be encashed such conduct also ousts petitioners from equitable principle which is very relevant to exercise extraordinary jurisdiction – On contrary, original plaintiff dragged to a Court of law under provisions of Negotiable Instruments Act. Irrespective of this, it is also a principle laid down that issuance of cheque itself is an acknowledgment of debt – Unless it is case that no cheques have been issued at all. This is not case of petitioners here on hand – Circumstance which not ignored by Court, as rightly been agitated by counsel appearing for respondent – No error is committed by Court below in imposing condition while granting leave to defend to petitioners.
Result: Petition dismissed
JUDGMENT :
A.J. Shastri, J.
1. Present petition under Articles 226 and 227 of the Constitution of India is filed for the purpose of seeking following reliefs:-
(B) Pending the hearing and final disposal of the present petition, Your Lordships may be pleased to stay the implementation, operation and execution of the impugned order dated 16.07.2019 passed by the learned Judge, City Civil Court No. 31, Ahmedabad below Leave to Defend (Exh. 17) in Summary Suit No. 631 of 2017 at ANNEXURE-F hereto.
(C) … .......
(D) … ......."
2. The case of the petitioners that the petitioner No. 1-original defendant No. 1 is a Private Limited Company registered under the provisions of the Companies Act, 1956. The petitioner No. 2-original defendant No. 2 is an ex-director of the petitioner No. 1 company and the respondent is individual plaintiff who instituted a suit for recovery of the unliquidated amount against the petitioners on the premise of having advanced personal loan of Rs. 3,50,00,000/- to the petitioner No. 1 at the behest of the petitioner No. 2. It is stated in the petition that the respondent on the premise of having advanced a personal loan of Rs. 3,50,00,000/-, as stated above, to the petitioner No. 1 company at the behest of the petitioner No. 2, ultimately filed Summary Suit no. 631 of 2017 in the City Civil Court at Ahmedabad against the petitioners under Order-37 of the Code of Civil Procedure for recovery of an amount of Rs. 5,10,18,836/-, including interest thereon mainly on the ground that the petitioners have failed and neglected to repay the said amount of loan (subject matter of the four cheques issued in that regard), for which criminal complaint under the provisions of the Negotiable Instruments Act, 1881 has also been filed in the Court of learned Metropolitan Magistrate, 33rd Court at Mumbai. The plaint of the summary suit is attached with certain documents and along with that, the respondent also filed Summons for Judgment at Exh. 12 and simultaneously upon service of summons, the petitioners have submitted leave to defend at Exh. 17 by way of affidavit. According to the petitioners, the petitioner No. 2 has raised defense that the petitioner No. 1 company, being a Private Limited Company, cannot accept personal loan from any one nor the said acceptance of alleged loan is supported by any resolution of the company. Secondly, it was also denied that at the behest of the petitioner No. 2, the respondent had advanced a personal loan to the petitioner No. 1. It has also been asserted in the leave to defend that the respondent-original plaintiff could not have lent any money without holding requisite money lending license or any permission from the Reserve Bank of India and further for the loan to the petitioner No. 1, the Directors cannot be held responsible and further except the petitioner No. 2, no other directors of the petitioner No. 1 company were joined in the proceedings and further it has been asserted that the alleged loan is not supported by any loan document and as such, in absence of any agreement or written contract, the suit itself is not maintainable. It has also been stated that the Court has no territorial jurisdiction as the transaction had taken place not within the jurisdiction of Ahmedabad as the petitioner resided at Bombay, carries on business at Mumbai and the cheques were issued at Mumbai, drawn at Mumbai and therefore, no cause of action has arisen within the territorial limits of Ahmedabad and therefore, on account of these multifarious contentions, the leave to demand was submitted
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