IMPORTANT POINT
The distinction between a disputed claim and an admitted claim in a suit filed under Order XXXVII of CPC and the condition precedent for granting leave to defend based on the admitted amount.

JUDGMENT :

Aniruddha P. Mayee, J.

1. The present Special Civil Application impugns the judgment and order dated 6.12.2023 passed under Exh.31 and Exh.35 of the Commercial Civil Suit No.87 of 2016 whereby the learned Principal Senior Civil Judge, Rajkot has granted conditional leave to defend on deposit of Rs.79,77,023/- by the defendants – petitioners herein.

2. The brief facts of the case are that the parties to the suit are conducting business with each other since April/May-2010. As per the agreed terms, after the delivery of the goods by the plaintiff – respondent No.1 herein to the respondent No.2 firm, various invoices came to be issued. However, the dispute arose due to non-payment of the invoices so raised. During the business transactions, some cheques came to be issued in favour of the respondent No.1 – plaintiff which came to be dishonoured with an endorsement “funds insufficient”. Further, the respondent Nos.2 and 3 addressed a letter to the respondent No.1 company admitting and acknowledging dues to the extent of Rs.79,77,023/- out of total dues of Rs.93,46,023/- as claimed by the respondent No.1 – plaintiff. Some more cheques, thereafter, came to be issued in favour of the respondent No.1 – plaintiff for the purpose of clearing the outstanding dues. However, the said cheques also came to be dishonoured with the endorsement “drawer’s signature differs”.

2.1 In the year 2011, the respondent No.1 – plaintiff initiated proceedings under Section 138 of the Negotiable Instrument Act, 1881 [“NI ACT” for short] in the Court of learned Additional Chief Judicial Magistrate, Rajkot vide Criminal Case No.4876 of 2011, which is pending adjudication. The respondent No.1 – plaintiff, thereafter, filed a suit praying for recovery of outstanding amount with interest thereon. The respondent No.1 – plaintiff filed his affidavit of Summons for Judgment before the learned Trial Court. The respondent Nos.2 and 3 – defendants jointly filed an application under Exh.31 seeking leave to defend in the said suit. Thereafter, the petitioners herein who claim to be “dormant partners” of the respondent No.2 partnership firm also jointly filed an application below Exh.35 seeking leave to defend. The learned Trial Court after hearing the parties, vide order dated 21.2.2013 was pleased to allow the application for leave to defend granting conditional leave to the defendants in the suit on a deposit of Rs.40,00,000/-

2.2 Aggrieved by the said order granting conditional leave to defend, the petitioners filed Special Civil Application No.8108 of 2013 in this Court. By order dated 15.1.2016, this Court set aside the order dated 21.2.2013 and remanded the matter back to the lower Court for fresh consideration on the ground that it was a non-speaking order and triable issues were involved. Pursuant to the remand, the learned Trial Court again heard the parties on two applications and by the impugned order dated 6.12.2023 was pleased to allow the application granting leave to defend on condition of depositing Rs.79,77,023/- jointly and severally before the learned Trial Court since as per the contentions and record of the suit, the said amount was an admitted liability of the defendants.

2.3 Aggrieved by the impugned judgment and order, the petitioners herein, who claim to be the dormant partners of the respondent No.1 firm, have preferred the present Special Civil Application.

3. Mr. Mehul S. Shah, learned senior counsel appearing for the petitioners, submitted that the respondent No.2 – firm being a partnership firm and as the petitioners herein were the dormant partners thereof, they did not participate in the day-to-day working of the said firm. He submitted that the respondent No.1 - firm has filed summary suit against the petitioners and the respondent Nos.2 and 3. However, since the said suit is raising triable issues and also claims 18% interest on the amount due, which is not part of the contract between the parties, the suit cannot be said to be su