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2023 Supreme(Online)(Bom) 315
HIGH COURT OF BOMBAY
SANDEEP V. MARNE, J
M/s. Ashok Commercial Enterprises – Appellant
Versus
Rajesh Jugraj Madhani – Respondent
Civil Appellate Jurisdiction Writ Petition No.10573 of 2022
For the Appellants/Petitioners: Mr. Darshit Jain, Ms. Neuty Thakkar, Ms. Parichehr Zaiwalla, Mr. Tushar Goradia
For the Respondent: Mr. Anoshak Davar, Mr. Nirav Shah, Mr. Nishant Tanna, M/s. Little & Co.
The court determined that the application for summary judgment was not maintainable based on the presence of triable issues and defenses related to limitations and the nature of contractual obligations.
Headnote:(A) Code of Civil Procedure, 1908 - Order XXXVII and Order XIII A - Summary Judgment application - The application for summary judgment under the Commercial Courts Act presents a streamlined procedure, allowing the court to decide on claims without oral evidence if necessary facts can be established without further trial considerations - Definition of limitation in the context of Bills of Exchange and the rate of interest payable therein was established - Court found uncertainties in the Defendant's claims raised against the Plaintiffs’ application for summary judgment. (Paras 1, 10, 20, 22, 24)
(B) Commercial Dispute - Nature of litigation under commercial transactions such as bills of exchange - Defenses raised included limitation and non-licensing under money-lending statutes - Sufficient grounds exist for requiring trial rather than summary judgment. (Paras 5, 19, 23)
Facts of the case:
Plaintiffs claim recovery of Rs.50,00,000/- was neglected in the lower court ruling due to alleged triable issues raised concerning limitations and permissions under the Maharashtra Money-Lending Act, although the primary Bills of Exchange were unchallenged.
Findings of Court:
The court observed that the basis for the summary judgment application by the Plaintiffs did not provide compelling grounds to override the right to a fair trial and thus denied the application.
Issues: The main issues revolved around the maintainability of the summary judgment application considering it may not have been feasible due to raised defenses leading to questions about limitation timelines and other contractual disputes.
Ratio Decidendi: The court concluded that even if the summary judgment could not be granted, the application required a rigorous examination of all presented evidence and issues under the Code as both parties' rights must be preserved in fair litigation.
Result: The Petition is dismissed without any orders as to costs.
| Table of Content |
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| 1. assessment of application merits and conclusion denial. (Para 15) |
JUDGMENT:
1 Order dated August 11, 2021 passed by the City Civil and Sessions Court, Mumbai, rejecting Petitioners/Plaintiffs’ application for summary judgment is the subject matter of challenge in the present Petition.
2 Petitioners are the Plaintiffs in commercial suit instituted for recovery of money with interest against defendant, who is Respondent herein. The case pleaded in plaint is that Plaintiff No.1, who is in business of trading in property and financing, was approached by Defendant for financial assistance in the form of loan of Rs.50,00,000/-. Plaintiffs paid Rs.50,00,000/- to the Defendant by RTGS on May 27, 2015. It is alleged that Defendant has executed a Bill of Exchange in favour of the Petitioners/ Plaintiffs payable on demand after the due date of June 26, 2015, which however is silent on interest payable, if any. Defendant issued letter dated August 5, 2015 to Plaintiffs confirming receipt of amount of Rs.50,00,000/- towards business loan, undertook to repay the same and issued two post dated cheques of bearing date October 30, 2015 for Rs.50,00,000/- towards principal amount and Rs.2,33,333/- towards interest. Additionally, one more Bill of Exchange was executed by Defendant for the said amount of Rs.50,00,000/- with due date of October 30, 2015. On presentation, the cheques were dishonoured with the remark ‘insufficient funds’.
3 After coming across a public notice regarding auction of properties of Respondent/Defendant, notice dated June 28, 2019 was issued at the behest of Plaintiffs demanding the due amount alongwith interest. The Defendant replied the notice on August 9, 2019 disputing the notice and raising the defence of Plaintiffs not possessing licence under the provisions of Maharashtra Money-Lending (Regulation) Act, 2014. Plaintiffs presented Summary Suit under the provisions of Order XXXVII of the Code of Civil Procedure, 1908 (for short ‘Code’), before the City Civil Court at Bombay on or about August 30, 2019. The same however came to be registered as Commercial Suit No.134 of 2019. Defendant made an unsuccessful attempt to seek dismissal of the suit for non-compliance of pre-institution mediation enumerated under section 12A of the Commercial Courts Act, 2015 and its Notice of Motion came to be dismissed by order dated March 10, 2021. In the meantime, Plaintiffs filed Summons for Judgment possibly under an impression that the suit was treated as a summary suit under the provisions of Order XXXVII of the Code. After noticing the provisions of Order XIII A of the Code, leave was granted to Plaintiffs to register the Chamber Summons as application for Summary Judgment. In the meantime, Defendant was permitted to file Written Statement by an order dated March 10, 2001, in which it denied various contentions raised in the Plaint in addition to raising the issue of limitation.
4 When the application for Summary Judgment No.2 of the 2019 was pressed before the City Civil Court, the same has been rejected by order dated August 11, 2021 holding that there are triable issues involved in the suit. That order is subject matter of challenge in the present Petition.
5 Appearing for the Petitioners/Plaintiffs Mr. Jain the learned Counsel would submit that the suit is based on Bills of Exchange dated May, 27 2015 and October 30, 2015, execution of which is not under dispute. He would submit that the only defence raised by Defendant while replying Plaintiffs’ notice on August 9, 2019 was about non-possession of money- lenders license, which is not a requirement for suit based on Bills of Exchange as per the settled position of law. He would submit that the admission of the claim can be inferred on the basis Defendant’s letter dated August 5, 2015, issuance of post-dated cheques and non-denial of receipt of Rs.50,00,000/- by Defendant. Mr. Jain would take me through the provisions of second Proviso to sub-rule 5 of Rule 3 of O
