1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUMMONS FOR JUDGMENT NO. 371 OF 2008 IN SUMMARY SUIT NO. 2879 OF 2008 Raj Oil Industries Pvt. Ltd. .. Plaintiff V/s. Raj Kumar Aggarwal and ors. .. Defendants -------- Mr. Swapnil Bangar i/b M/s. Vinod Mistry Advocate for Plaintiff. Mr. Santosh, Advocate for Defendant No. 3. Ms. Sunita Maurya, Advocate for Defendant Nos. 1 and 2. -------- CORAM : A.A. SAYED, J. DATE : 31st July, 2009. P.C. 1. The above Summons for Judgment has been taken out by the plaintiff for judgment to be entered against the Defendant Nos. 1 and 2 for a sum of Rs. 15,67,130.14 alongwith further interest @ 9% p. a. on Rs.15,00,000/- from the date of the suit till payment and/or realization. 2. The case of the Plaintiff is that they are in the business of export of Edible Oil and they are a 100% Export Oriented Unit. The Plaintiff upon the request of Defendant No. 1, placed orders with their sister concern, the Defendant No.3, for ndm sj.371.08.sxw 2 Sesame Seeds Oil. The said orders for supply of 1500 tins for 15 kg nett were made vide their first purchase order dated 13.03.2008 and delivery of the same was to be effected by the Defendant No. 3 by 02.04.2008 and vide their second purchase order of the same date i.e. 13.03.2008 and delivery of the same was to be effected by 15.04.2008. 3. According to the Plaintiff, the said two purchase orders and the rates mentioned therein was against H-Form for export only and the delivery was subject to approved samples. The plaintiff also advanced a sum of Rs. 15,00,000/- towards the execution of the said two purchase orders to the Defendant No.3, vide their 3 cheques of Rs. 5 lacs each. 4. However, during the interregnum of the purchase order and the date of delivery, Government of India through the Ministry of Commerce and Industries, Department of Commerce, by its Notification dated 17th March, 2008 prohibited export of all Edible Oils under Chapter XV of Schedule 1 of the Foreign Trade Policy with effect from 17th March, 2008. 5. In view of the said Notification, the Plaintiff had no option and was forced to cancel the orders due to “force majuere” with the Defendant No. 3 as the purchase was only for export and since the Plaintiff is an Export Oriented Unit, ndm sj.371.08.sxw 3 they did not have any facility to purchase goods for local consumption or sale. The Plaintiff therefore, by letter dated 02nd June, 2008, addressed to the Defendant No.3 cancelled the orders and demanded the refund of the amount of Rs. 15,00,000/-. According to the Plaintiff, the Defendant No. 3 did not refund the amount and did not reply to the said letter dated 02nd June, 2008. The Plaintiff, thereafter, through their advocate’s letter dated 12th July, 2008 called upon the Defendant No. 3 to refund the amount of Rs.15,00,000/- alongwith interest @ 24% per annum. According to the Plaintiff, the said letter was duly received by the Defendant No. 3 on 16.07.2008. The Plaintiff also addressed another letter through their advocate dated 14.08.2008 to all the defendants calling upon them to refund the amount of Rs.15,00,000/-. According to the plaintiff, the Defendant No.1 and 2 are also liable since they had induced the plaintiff to place orders with Defendant No.3, which is their sister concern. According to the Plaintiff, reply dated 10th September, 2008 was received by them only from the Defendant No. 2. 6. The Defendant No. 3 has filed a reply resisting the Summons for Judgment. According to the Defendant No. 3, the suit does not fall under the class of suits as contemplated under Order XXXVII, Rule 1 (2) of Civil Procedure Code, 1908 and therefore, the suit is not maintainable as a summary suit. According to the Defendant No. 3, it is incorrect that the Defendant No. 3 did not reply to the letter dated 02nd June, 2008 of the Plaintiff. The letter of the Plaintiff ndm sj.371.08.sxw 4 was replied to by their letter dated 17.06.2008, which was sent by Registered Post AD. Though it is stated in the reply that a copy of the acknowledgment duly signed by the Plaintiff is annexed, it appears that inadvertently it is not annexed and copy of the same was tendered across the bar. The Defendant No. 3 has further stated that the Advocate’s letter dated 12.07.2008 was also replied through his advocate vide letter dated 10.08.2008 and the said reply was sent to the plaintiff’s advocate M. Singaporewalla and the copy of the said letter was also marked to the Plaintiff and the Plaintiff has intentionally suppressed this fact. 7. The further case of the Defendant No.3 is that they are not liable to pay any amount to the plaintiff and on the contrary, the Plaintiff is liable to pay them an amount of Rs. 75,000/- and this fact was brought to the notice of the Plaintiff in their two reply letters itself. According to the Defendant No.3, in pursuance to the two purchase orders, the Defendant No. 3 purchased Sesame Seeds for making supply to the Plaintiff in the month of April 2008. However, the Plaintiff instructed the Defendant No. 3 to sell the 3000 tins of Sesame Seeds Oil, which was purchased by them and to be supplied to the Plaintiff, in the open market and the plaintiff agreed to pay the difference amount and accordingly the Defendant No. 3 sold the 3000 tins of Sesame Seeds Oil at the rate of Rs.58 per kg. in the open market and the plaintiff is liable to pay the differential amount of Rs.75,000/- to him as set out in the affidavit in reply. According to the Defendant No.3, the ndm sj.371.08.sxw 5 Plaintiff has intentionally not disclosed these facts in the plaint. 8. The Defendant No.3 has also stated that he is carrying on business in the Jaipur in the state of Rajasthan and the purchase order was placed at Jaipur and the payment was to be made at Jaipur and the delivery was to be made at Jaipur, therefore, the entire cause-of-action arose in Jaipur and Rajasthan and this Court has not jurisdiction to entertain and try the suit. 9. The Defendant Nos. 1 and 2 have also filed a reply contending that they being 3rd parties and not involved in the transaction between the plaintiff and the Defendant No. 3, no liability can be fastened on them. 10. The learned counsel for the Plaintiff relied upon the decision of learned Single Judge of this Court in the case of Jatin Koticha vs. VFC Industries Pvt. Ltd. reported in 2008 (2) Bombay C.R. 155, wherein, it was held that even if the invoices are not signed, in view of the admitted position, the transaction would amount to a written contract. The learned counsel for the Plaintiff also relied upon the case of Boothalinga Agencies vs. V.T.C Poriaswami Nadar reported in A.I.R. 1969 Supreme Court 110 to submit that the present case would fall under the doctrine of frustration of contract as the performance of the contract became illegal and unlawful and therefore, the contract becomes void under Section 56 of ndm sj.371.08.sxw 6 the Contract Act. Reliance is also placed upon the case of Alluri Narayana Murthy Raju vs. District Collector, Visakhapatnam reported in AIR 2008 Andhra Pradesh 264, wherein it was held that when the performance of contract was rendered impossible, doctrine of frustration would apply and the petitioner was liable to refund of the amount. 11. Having heard the learned Counsel for the parties and on perusal of material on record, I find that the purchase orders are dated 13.03.2008, however, it is only for the first time on 02nd June, 2008, the Plaintiff cancelled the orders placed by them, when admittedly the Notification dated 17th March, 2008, prohibiting export of all Edible Oils was received by the Plaintiff on 18th March, 2008. The case of the Defendant No. 3 is plausible that after the receipt of the purchase orders, the Defendant No. 3 has taken steps to execute the orders and had purchased Sesame Seeds and had incurred the expenses in that regard. The plaintiff, in my view, ought to have cancelled the orders immediately after 18th March, 2008 and ought not have waited till 02nd June, 2008 to cancel the orders. Infact, in the plaint, it is specifically averred that the plaintiff and their principals in Malaysia were making efforts with the Ministry of Commerce to permit the plaintiff to export the goods of which orders were already placed with the Defendant No. 3, which explains the delay on part of the plaintiff to cancel the orders placed with the Defendant No. 3. In my view, the defence of the Defendant No. 3 cannot be said to be frivolous or ndm sj.371.08.sxw 7 moonshine. 12. It is not as if it is stated in the purchase orders that in the event that the purchase orders are not executed due to force majeur, the Defendant No. 3 would be liable to refund the amount advanced within a specified period notwithstanding any steps taken or expenses incurred by the Defendant No. 3 towards the execution of the purchase orders. Nor does the purchase orders speak of any interest amount to be paid, as claimed in the present suit, in the event the orders were cancelled. It is also not as if the cancellation of the Orders is attributable to any default on part of the defendant No.3. In my opinion, in the facts and circumstances of the case, the Defendants have raised triable issues which would entitle them for leave to defend the suit. 13. Considering the peculiar facts and circumstances of this case, I find that the case of the Plaintiff does not fall under Order XXXVII, Rule 2 as the amount of advance of Rs.15,00,000/-, which was paid by the Plaintiff to the Defendant No. 3 of which the plaintiff is claiming refund, cannot be termed as debt or a liquidated demand in money payable by the Defendants. Had the plaintiff immediately cancelled the purchase orders, the case of the plaintiff could probably have been considered under Order XXXVII, Rule 1 (2) (b) (ii) of Civil Procedure Code in view of Section 56 of the Indian Contract Act, 1872, which deals with the doctrine ndm sj.371.08.sxw 8 of frustration. The cases of Boothalinga Agencies (Supra) and Alluri Narayana Murthy Raju (Supra) would not be applicable to the facts of the present case inasmuch as those cases were not decided in the context of a Summons for Judgment and whether leave to defend ought to be granted or not. In any event, the contentions raised and ratio laid down by those judgments can always come to the aid of the plaintiff and be considered at the time of hearing of the suit. So far as the case of Jatin Koticha (supra) is concerned, that case was primarily based on Invoices, whereas in the present case there are no Invoices involved and in any event, having found that the defendants have raised triable issues, the case of Jatin Koticha (Supra) would not be applicable to the facts of the present case. 14. In the circumstances, the defendants are granted unconditional leave to defend the suit. The suit to stand transferred to the list of commercial causes. Written Statement to be filed within 8 weeks. Affidavit of Documents within 8 weeks thereafter. Discovery and Inspection within 8 weeks thereafter. 15. Summons for Judgment is dismissed. A.A. SAYED, J. ndm sj.371.08.sxw