SCA/1854120/2007 1/6 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 18541 of 2007 For Approval and Signature: HONOURABLE MR.JUSTICE M.R. SHAH ========================================= = 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================= = NIYATI KETAN SHAH - Petitioner(s) Versus M/S CORE HEALTHCARE LIMITED - Respondent(s) ========================================= = Appearance : NANAVATI ASSOCIATES for Petitioner(s) : 1, MR AMAR N BHATT for Respondent(s) : 1, ========================================= = CORAM : HONOURABLE MR.JUSTICE M.R. SHAH Date : 24/11/2008 ORAL JUDGMENT 1. By way of this petition under Article 227 of the SCA/1854120/2007 2/6 JUDGMENT Constitution of India the petitioner-original plaintiff has prayed for an appropriate writ, order or direction quashing and setting aside the impugned order dated 09/03/2007 passed by the learned Auxiliary Chamber Judge, Court No. 12, Ahmedabad below Exh. 8 in Civil Suit No. 423/2005 granting unconditional leave to the respondent herein-original defendant to defend the aforesaid Civil Suit No. 423/2005. 2. Heard Shri Mihir Joshi, learned Senior advocate appearing on behalf of the petitioner-original plaintiff and Shri S.N. Soparkar, learned Senior advocate with Shri Amar Bhatt appearing on behalf of the respondent-original defendant 3. The petitioner-original plaintiff had instituted Civil Suit No. 423/2005 to recover a sum of Rs. 4,64,14,165.30 ps on the basis of the Memorandum Of Understanding between the petitioner-original plaintiff and the respondent-original defendant dated 18/10/1999. Certain payments were made by post dated cheques as per Clause 9 of the Memorandum Of Understanding and as per the last statement of account, a sum of Rs. 4,64,14,165.30 ps was due and payable to the petitioner-original plaintiff. In the said suit, the respondent- original defendant submitted an application to leave to defend submitting that no amount was due and payable and that the amount due and payable to the petitioner-original plaintiff has been adjusted and/or repaid and squared up. The respondent- original defendant relied upon certain documentary evidence produced alongwith affidavit-in-sur-rejoinder to the affidavit in rejoinder of the plaintiff dated 29/11/2006. Considering the rival submissions made on behalf of the respective parties and considering the documents on record, the learned Auxiliary SCA/1854120/2007 3/6 JUDGMENT Chamber Judge granted unconditional leave to the respondent- original defendant to defend by observing that there are serious bonafide triable issues. Being aggrieved and dissatisfied with the same, the petitioner-original plaintiff has preferred the present Special Civil Application under Article 227 of the Constitution of India. 4. Shri Mihir Joshi, learned advocate appearing on behalf of the petitioner-original plaintiff has vehemently submitted that the learned Auxiliary Chamber Judge has materially erred in holding that there are triable issues. It is further submitted that the parties were maintaining two separate accounts, one with respect to export and another with respect to transactions here and the amount under the export was sought to be adjusted in the account of the petitioner-original plaintiff and, therefore, the same has wrongly been squared up and/or adjusted. Therefore, it is requested to allow the present Special Civil Application and to quash and set aside the impugned order passed by the learned Auxiliary Chamber Judge granting unconditional leave to the respondent-original defendant. In the alternative, it is submitted to expedite the suit considering the commercial nature of transaction and the dispute involved in the suit. 5. The petition is opposed by Shri S.N. Soparkar, learned Senior advocate appearing on behalf of the respondent- original defendant. It is submitted that the amount due and payable has been adjusted and squared up and the contention on behalf of the petitioner-original plaintiff that the amount could not have been squared up and/or adjusted while considering separate account maintained for export are all SCA/1854120/2007 4/6 JUDGMENT questions, which are required to be decided at the time of trial and the same is triable issue. It is further submitted that even the documents produced alongwith the affidavit-in-sur- rejoinder to the affidavit-in rejoinder of the plaintiff to show how the amount has been squared up and/or adjusted has not been disputed till date by the petitioner-original plaintiff. Under the circumstances, it is submitted that the learned Auxiliary Chamber Judge has not committed an error in granting unconditional leave to defend to the respondent- original defendant. Shri S.N. Soparkar, learned Senior advocate appearing on behalf of the respondent-original defendant has relied upon the following decision of the Hon'ble Supreme Court with respect to his submission to dismiss the present Special Civil Application. (i) M/S. MECHALEC ENGINEERS AND MANUFACTURERS Vs. M/S. BASIC EQUIPMENT CORPORATION reported in AIR 1977 SC 577 (ii) M/S. SUNIL ENTERPRISES AND ANR Vs. SBI COMMERCIAL AND INTERNATIONAL BANK LTD., reported in AIR 1998 SC 2317 6. Heard the learned advocates appearing on behalf of the respective parties. On considering the impugned order and the supporting documents, affidavit-in-sur-rejoinder and the affidavit by the respective parties, it appears to this Court also that there are serious bonafide disputes and there are triable issues. It is the contention on behalf of the petitioner-original plaintiff that an amount of Rs. 4,64,14,165.30 ps was due and payable to the petitioner-original plaintiff and on the other hand, by producing necessary documentary evidence, it is the SCA/1854120/2007 5/6 JUDGMENT contention on behalf of the respondent-original defendant that the amount due and payable to the petitioner-original plaintiff has been repaid, adjusted and squared up. The contention on behalf of the petitioner-original plaintiff that while considering the statement of account of export, the amount due and payable to the petitioner-original plaintiff could not have been adjusted and squared up itself is a triable issue. Even the documents produced on behalf of the respondent-original defendant alongwith the affidavit-in-sur-rejoinder pointing out and showing how the amount is due and payable to the petitioner-original plaintiff was adjusted and squared up has not been disputed by the petitioner-original plaintiff till date. 7. The law on the point of granting unconditional leave to defend is now not res integra. As observed by the Hon'ble Supreme Court in catena of decision and in the case of M/S. MECHALEC ENGINEERS AND MANUFACTURERS Vs. M/S. BASIC EQUIPMENT CORPORATION (supra) and M/S. SUNIL ENTERPRISES AND ANR Vs. SBI COMMERCIAL AND INTERNATIONAL BANK LTD., (supra), if the Court is of the opinion that the case raises a triable issue then leave to defend should ordinarily be granted unconditionally. If the Court is satisfied that the facts disclosed by the defendant do not indicate that he has a substantial defence to raise or that the defence intended to be put up by the defendant is frivolous or vexatious it may refuse leave to defend altogether. But in cases where the Court entertains a genuine doubt on the question as to whether the defence is genuine or sham or whether it raises a triable issue or not, the Court may impose conditions in granting leave to defend. In the facts and circumstances of the case, the learned trial Court has SCA/1854120/2007 6/6 JUDGMENT specifically found that there are triable issues and considering the above, granted unconditional leave to the respondent- original defendant to defend the aforesaid suit. It cannot be said that the learned trial Court has committed an error, which calls for interference of this Court in exercise of powers under Article 227 of the Constitution of India. 8. However, in the facts and circumstances of the case and considering the nature of controversy in the suit, if the pleadings are completed, the learned trial Court is directed to expedite the suit. 9. With this, the present Special Civil Application is dismissed. Notice is discharged. (M.R. SHAH, J.) siji