1 mst IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.1003 OF 2010 Maharashtra Bio Fertilizers India Pvt.Ltd. and another Petitioners versus Mitcon Consultancy Service Ltd. Respondent Mr.G.S.Godbole i/by Ms.Manjiri Parasnis for petitioners. Mr.R.B.Jagtap and Ashok Tajane for respondent no.1. CORAM : A.S.OKA, J. DATE : 23rd April 2010 JUDGMENT : 1. By this writ petition under Article 227 of the Constitution of India, the petitioners who are the defendants in a summary suit filed under Order XXXVII of the Code of Civil Procedure, 1908, have challenged the order by which conditional leave to defend the suit filed by respondent- plaintiff has been granted by the Trial Court. 2. The suit is filed by the respondent-plaintiff for recovery of a sum of Rs.23,91,008/- together with interest thereon @ 9% p.a. from the due date of payment till filing of the suit and thereafter till realization. In the suit 2 reliance has been placed on agreement executed by the first petitioner and the respondent. The said agreement is dated 29th April 2004 by which it was agreed that the respondent-plaintiff shall sell and the first petitioner shall purchase certain products such as bio-fertilizers, bio- pesticides etc.. It is the case of the respondent that under the said agreement, the first petitioner agreed to pay to the respondent 50% of the invoice price with the purchase orders and the balance amount was to be paid within sixty days from the date of receipt of the goods. Reliance has been placed on various purchase orders issued by the petitioners from 15th May 2004 to 9th September 2005. The case of the respondent is that under the said orders, products worth Rs.42,08,059/- were sold to the petitioners by the respondent. In the plaint, reliance has been placed on letters dated 27.7.2005 and 17.10.2005 allegedly sent by the petitioners. According to the respondent, by the said letters, the petitioners- defendants accepted and acknowledged their liability. It is stated that a sum of Rs.18,70,051/- has been paid by the petitioners to the respondent towards price of the goods supplied. The suit is filed for recovery of the balance amount. It is stated that three cheques in the sum of Rs.1.50 lakhs, Rs.5.00 lakhs and Rs.5.00 lakhs dated 4-9-21005, 16-11-2005 and 17.11.2005 were issued by the petitioners to the respondent. The said cheques were dishonoured. Thereafter a complaint has been filed under section 138 of the Negotiable Instruments Act, 1881. Reliance is placed on letter dated 10th December 2005 by which the petitioners admitted the liability to the extent of Rs.19,07,169/- towards respondent and the petitioners agreed to pay the said amount by installments from January 3 2006 onwards. 3. An application for leave to defend the suit was taken out by the petitioners on which impugned order has been passed. The learned Trial Judge has referred to the letter at Exhibit.3/29 dated 10.12.2005 sent by the petitioners and has held that there is a clear acceptance of liability on the part of petitioners. In view of clear admission of outstanding liability by the petitioners, the learned Judge came to the conclusion that there is no plausible or reasonable defence disclosed by the petitioners. However, with an object of giving an opportunity to the petitioners to defend the suit, a conditional leave subject to deposit of Rs.19.00 lakhs was granted. 4. The learned counsel appearing for the petitioners has invited my attention to the averments made in the plaint. He pointed out that the suit has been filed on 16th October 2008 and the purchase orders on which reliance is placed have been issued from 15th May 2004. He submitted that even taking into account the credit period of sixty days, the amount payable under all the bills except only two bills was barred by limitation in view of Article 14 of the Limitation Act, 1963. He invited the attention of the Court to the letter dated 10th December 2005 on which reliance was placed by the learned Trial Judge in the impugned order. He submitted that firstly the document on which reliance is placed is not addressed to the respondent. He pointed out that the respondent-plaintiff is Mitcon Consultancy Service Ltd. and the letter has been addressed to the Managing Director of Mitcon Biotech, Pune. He submitted that the said 4 letter dated 10th December 2005 by no stretch of imagination is the acknowledgement in writing by the petitioners of the liability covered by the suit. He relied upon a decision of the Division Bench of this Court in case of Vijaykumar Satishchandra and Co. and another Vs. M/s.Rajgopal Badrinarayan Malpani and another (1996(1)-Mh.L.J.-594). He submitted that in view of the law laid down by this Court, the starting point of limitation of three years will be the date of delivery of goods. He submitted that the claim based on all bills except last two was clearly barred by Law of Limitation. He submitted that there is serious doubt whether the so called acknowledgement can be read as an acknowledgement under section 18 of the said Act of 1963. He submitted that on plain reading of the plaint, substantial part of the claim appears to be barred by limitation even after applying Article 15 of the said Act of 1963. Relying upon a decision of the Apex Court in case of M/s.Mechalee Engineers and Manufacturers Vs. M/s.Basic Equipment Corporation (AIR-1977-SC-577), he submitted that this was a case where certainly there was a fair or bona fide or reasonable defence, if not a positively good defence, and, therefore, this was a case for grant of unconditional leave to defend. Learned counsel for the respondents supported the impugned judgment and order. 5. I have given careful consideration to the submissions. The respondent has relied upon letter dated 10th December 2005 addressed by the petitioners to one Pradip Bavdekar described as Managing Director of Mitcon Biotech, Pune. The said letter refers to the discussion between 5 the petitioners and the recovery officer one Mr.Yadav. It is stated in the letter that the petitioners were liable to pay a sum of Rs.21,67,169/-. It is stated that the petitioners were entitled to adjustment of a sum of Rs.1.60 lakhs on account of C.I.C.registration. It is stated that after the registration was made in the name of petitioners, the amount of Rs.1.60 lakhs will be paid by the petitioners. The petitioners offered to pay a sum of Rs.19,07,169/- by monthly installments payable from January 2006 to October 2006. The petitioners assured to pay the said amount. It must be noted here that the main challenge to the said letter is on the ground that the letter is not addressed to the respondent-plaintiff but to one Pradip Bavadekar, Managing Director, Mitcon Biotech. The letter has been referred to and relied upon in the plaint. It must be noted here that in paragraph 8 of the application for leave to defend, the petitioners have referred to the said letter. Paragraph 8 reads thus :- "8. That, the defendant never issued any letter dated 10/12/2005 to Plaintiff company accepting the alleged liability amounting Rs.19,07,169/- (Nineteen Lacks Seven Thousand One Hundred and Sixty Nine Rupees) therefore the contention made in the suit by the plaintiff is totally false and misleading, further as the defendant has not sent any letter dated 10/12/2005 to Plaintiff company therefore to reply the same and to made additional demand is also baseless, to clarify all the misleading contentions of the plaintiff it is necessary that the plaintiff should prove the delivery of goods supplied time to time as per the contention of the plaintiff and it is just and necessary on the part of the defendant to defend the suit and for that purpose permission of this Hon'ble Court is just and necessary to defend the suit in the interest of justice." There is no specific denial of the execution of said letter. The petitioners have not even stated that the transactions referred to therein or the 6 liability referred to therein has nothing to do with the suit transaction. The only defence is that the said letter is not issued by the petitioner to the respondent-plaintiff. There is no case made out that the liability referred to therein does not relate to the suit transaction. The execution and contents of the said document are not disputed. At this stage it must be noted that the plaint is signed by Mr.Pradip Bavdekar to whom the letter dated 10th December 2005 is addressed. He is described in the letter as the Managing Director of Mitcon Biotech. The said Mr.Bavdekar has signed and verified the plaint as the Managing Director of the respondent Mitcon Consultancy Services Ltd.. Section 18 is attracted if there is acknowledgement of liability in writing. Though opportunity was available to the petitioners to say that the amounts mentioned in the letter did not relate to the said transaction, the petitioners have not come out with that case. That is why for the purposes of considering the prayer for grant of leave, the learned Trial Judge has come to the conclusion that there is an acknowledgement of liability to the extent of Rs.21,67,169/- out of which the petitioners offered to pay a sum of Rs.19,07,169/- by installments spread over from January 2006 till October 2006. Considering all the aforesaid aspects, the learned Trial Judge rightly held that the letter dated 10th December 2005 contains clear acknowledgement of debt under section 18 of the Limitation Act, 1963. 6. Apart from this letter reliance has been placed in the plaint on three cheques in the sum of Rs.1.50 lakhs, Rs.5.00 lakhs and Rs.5.00 lakhs. The last two of which were issued in November 2005 which were 7 dishonoured. However, a complaint under section 138 of the Negotiable Instruments Act, 1881 has resulted in acquittal. 7. Based on the aforesaid letter dated 10th December 2005 the learned Judge has recorded a finding that there is no plausible or reasonable defence disclosed by the petitioners. The view taken by the learned Trial Judge is correct. The said letter is dated 10th December 2005 and the suit has been filed on 16th October 2008. As per the said letter the petitioners agreed to pay the amount by installments in the year 2006. 8. It is not possible to interfere in writ jurisdiction under Article 227 of the Constitution of India with the impugned order. Even after holding that there is no plausible defence, the learned Judge has proceed to grant leave subject to deposit of an amount of Rs.19.00 lakhs. It is not possible to interfere with the said discretionary order. There is no merit in the petition and the same is accordingly rejected. 9. It is made clear that the observations made in this order are for limited purposes for considering the issue regarding grant of leave to defend the suit and no observation shall be construed as any finding on the merit of the suit. 10. The learned counsel for the petitioners seeks continuation of protection as petitioners want to approach the Apex Court. It is directed 8 that the suit shall not be decreed for a period of twelve weeks from today. It is directed that for a period of twelve weeks from today, the Court will not pass a decree notwithstanding confirmation of the impugned order. (A.S.OKA, J.)