1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUMMONS FOR JUDGMENT NO.459 OF 2009 IN SUMMARY SUIT NO. 604 OF 2003 Bank of India ..... Plaintiffs. V/s Shashank P. Ingle ..... Defendant. Mr. O.A. Das for plaintiff. Mr. V.P Amin i/b M/s. B. Amin & Co. for defendant. CORAM: V. M. KANADE, J. DATE : 29TH JANUARY, 2010 P.C.:- 1. Heard the learned Counsel appearing on behalf of plaintiffs and the learned Counsel appearing on behalf of defendants. 2. Plaintiffs are a Body Corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act V of 1970 and are carrying on business as Bankers. Defendant availed the India Card Facility from the Plaintiffs – Bank and upon the application made by 2 defendant, plaintiffs issued the India Card bearing No. 5420343021822304 to the defendant. As a result of the said Credit Card which was issued, defendant could avail of various services including withdrawal of cash from plaintiffs’ different Branches and/or to purchase goods from Member Establishments against the said Card. Defendant, while accepting the Card, had accepted terms and conditions of the said India Card Facility and he had agreed to reimburse/remit the outstanding amount within 15 days of the receipt of the Bills which were prepared by plaintiffs and the said bills were dispatched by 15th of every month to the card holder. According to plaintiffs. According to plaintiffs, defendant used this Card at different Establishments and plaintiffs and defendant were maintaining a mutual and current account. According to plaintiffs, defendant had not repaid an amount of Rs 27,120.21 as per the terms and conditions of the said Facility in spite of repeated demands and reminder from plaintiffs. Accordingly, plaintiffs called upon the defendant to pay plaintiffs Rs. 63,951.96 as on 15/11/2002 together with service charges/interest thereon @ 2.5% per month with monthly rests from 16/11/2002 till payment or realization. Plaintiffs, therefore, filed this summary suit against the defendant for recovery of the said amount. 3. The Summons for Judgment was taken out by plaintiffs, after service of summons. The learned Counsel appearing on behalf of plaintiffs firstly submitted that according to 3 terms and conditions of the said Card, the card holder was under an obligation to collect original bills from Member Establishments at the time of signing the charge slips at the Member Establishment. Secondly, he submitted that the Bank was under an obligation to make available duplicate copy of the statement of account in case of a dispute on card holder’s specific request, if such a request was received within three months from the date of usage and thirdly it is submitted that if there is no dispute made by the card holder regarding entries in the statement sent to him within 60 days from the date of the statement, there was presumption that card holder accepts the transaction as per the statement. He submitted that, therefore, upon receiving the statement sent by the Bank, the card holder did not raise any dispute and, therefore, he was liable to pay the amount demanded by plaintiffs. He also invited my attention to the computer statement of the holder of the card which showed details of the usage of the card by the card holder. He also invited my attention to the half monthly statement of the opening and closing balance of the said card. He further submitted that in view of the judgment of this court in the case of Central Bank of India v. Manipur Vasant Kini1 in respect of dispute regarding usage of credit card, a summary suit under Order XXXVII Rule 2 is maintainable. 4. On the other hand, the learned Counsel appearing on behalf of defendant firstly submitted that there was non- compliance of provisions of Order XXXVII of the Civil 1 AIR 1999 BOMBAY 409 4 Procedure Code and the averments which are required to be made in the plaint and in the affidavit in support are not made by plaintiffs and, therefore, Plaintiffs are not entitled to file the suit as a summary suit. Secondly, he submitted that statement of account which is annexed to the plaint is not certified in accordance with Bankers’ Books of Evidence Act and, therefore, no reliance could be placed on the said statement. Thirdly, he submitted that there is discrepancy in the statement which was annexed at Exhibit-B and the statement of account annexed at Exhibit-D. He invited my attention to the said two statements. He submitted that if explanation is given by plaintiffs in the affidavit in rejoinder filed by plaintiffs even then the said discrepancy is not properly explained. He then submitted that the statements of account were not received by defendants and, there is no proof to show that the said statements had been sent by plaintiffs to defendant and that though defendant had demanded duplicate copies, plaintiffs had not supplied the said copies to defendants. He submitted that there is gross delay in taking out Summons for Judgment and on that ground alone, defendant is entitled to get unconditional leave to defend. He denied the correctness of the statement at Exhibit-B and contended that proper credit and payments were not reflected. He, however, submitted that since there was heavy rainfall in the said year due to which the entire record which was with the defendant had washed away, he was not in a position to produce the record to show the payments made by him. According to defendant, he had 5 not used the Card since 14/10/1999 and, therefore, question if making payment as alleged did not arise. The learned Counsel appearing on behalf of defendant has relied upon the judgment of the Apex Court in Mechelec Engineers and Manufacturers v. Basic Equipment Corporation1. He submitted that since there are triable issues raised by defendant, defendant is entitled to get unconditional leave to defend. 5. The first question which falls for consideration is : whether the suit can be filed by plaintiffs -Bank as a Summary Suit for the purpose of recovery of dues for the use of Credit Card Facility. This Court had an occasion to consider this aspect in the case of Manipur Vasant Kini2 and the learned Single Judge of this Court, after examining terms and conditions of the contract, has observed that the holder of the Card using and signing the voucher/slip at the sellers establishments, results in a contract in writing under which an ascertained or liquidated amount becomes due and payable and under the terms and conditions of use of the Credit Card, the card holder has agreed to pay the amount payable on notice being served. If, however, there is a dispute regarding user of a card, that dispute would not be in respect of maintainability of the suit as a Summary Suit, but an issue could be raised whether conditional leave or unconditional leave could be granted to the defendants. In my view, therefore, this suit is maintainable as a Summary 1 1976 (4) SCC 687 : 1977 AIR (SC) 577 2 AIR 1999 BOMBAY 409 6 Suit. 6. This Court in Manipur Vasant Kini1 in paras 8, 9 and 10 has observed as under:- “8. Considering the above, can it be said that the transaction is in the nature of a cash credit facility as contended by the Defendant and as such the suit cannot be tried as a summary suit. On behalf of the defendant his learned counsel has filed submission to show how the grant of Cash Credit Facility and the use of a Credit Card are similar and/or have similar trappings. It is contended that in so far as cash credit facility the Apex Court in the case of Raneegunj Coal Association Ltd. v. Union of India, AIR 1990 SC 1879, has held that money deposited by the banks in Cash Credit Account would not attract any interest and that cash credit account is in the nature of a current account and no interest is payable in the account. The question is whether the service charge is interest on the principal amount due and payable. It will, therefore, be necessary to discuss the nature of service charge which is claimed on failure to pay the amount after a specified period. A learned single Judge of this Court in the case of Bank of India v. M/s. 1 AIR 1999 BOMBAY 409 7 Shah Engineering Equipment Co., in Summons for Judgment No.133 of 1996 in Summary Suit No.2480 of 1995 was dealing with the contention on behalf of the defendants that the claim towards interest cannot be claimed under the contract. The contention was that the service charge was in fact as interest charged by the bank to the user of the card. The learned single Judge seems to have accepted the contention that the service charge is in fact interest which is claimed from the user of a card. The question is whether in fact the service charge claimed is interest. In so far as banks are concerned, they are subject to the provisions of the Banking Regulation Act, 1949. They would be subject to the directions issued by the Reserve Bank of India under Section 21 of the Act. However, in the agreement itself what the parties agreed is not the payment of interest, but payment of service charge. The service charge is not payable as a matter of course. It is payable only in the event the amounts are not paid within a particular time and on the amount due and outstanding. At the first blush it may be reasonable to contend that ultimately it is an amount payable on failure to pay the principal and as such in fact it is nothing but interest payable on the principal amount. The fact, 8 however, remains that between the bank and the holder of the card, parties have agreed that the amount they are paying is service charge. If that be so parties have understood the charge as service charge. Once they have so understood it is the term of the contract that will have to be followed and not a judicial interpretation of what possibly it might be. In this case the contract as described is service charge. If it is held to be a service charge. It is then argued that the service charge is payable under Service Tax Charges Act and certain formalities have to be complied with. The mere fact that the bank may not be complying with the formality if any, in law they are bound to comply, does not and will not be a reason to hold that it is not a service charge. In my opinion, at the highest on failure to comply with the said provisions of the Service Tax Charges Act penal consequences may follow. However, it would not cease to be a service charge. It is also contended that the service charge is a penalty under Section 74 of the Indian Contract Act or attracts the provisions of the Usurious Loans Act. As I have already held the service charge is not interest or tax. It is an amount charged during the repayment of the amount oustanding for services rendered. It is not interest. Therefore, Usurious Loans Act 9 would not apply. 9. As pointed out earlier, even if it is construed that the terms and conditions themselves may not spell out a written contract for a debt or liquidated amount nevertheless on the holder of the card, using and signing the voucher/slip at the sellers results in a contract in writing under which as ascertained or liquidated amount becomes due and payable. Once this be so, under the terms and conditions of the use of the Credit Card the card hgolder has agreed to pay the amount payable, on notice being served. If there is a dispute regarding the user of a card that dispute will not be in respect of maintainability of the suit as a Summary Suit but at the highest would be an issue as to whether the defendants are entitled to conditional leve or unconditional leave. That does not determine the character of the suit. 10. Having said so, I am clearly of the opinion that the suit based on the use of credit card is maintainable as a Summary Suit.” 7. Before examining rival contentions, it would be profitable to notice the observations made by the Apex Court in the case of Mechelec Engineers and Manufacturers 10 v. Basic Equipment Corporation1. The Apex Court has noticed the principles applicable to cases covered under Order XXXVII of the Civil Procedure Code, which were laid down in S. Kiranmoyee v. Dr. J. Chaterjee2. In para 8 of the said judgment in Basic Equipment Corporation3, the Supreme Court has observed as under:- “8. In S. Kiranmoyee Dassi v. Dr. J. Chatterjee, (1945) 49 Cal WN 246 at p. 253, Das, J., after a comprehensive review of authorities on the subject, stated the principles applicable to cases covered by Order 37, CPC, in the form of the following propositions (at p.253). “(a) If the defendant satisfies the Court that he has a good defence to the claim on its merits the plaintiff is not entitled to leave to sign judgment and the defendant is entitled to unconditional leave to defend. (b) If the defendant raises a triable issue including that he has a fair or bona fide or reasonable defence although not a positively good defence the plaintiff is not entitled to sign judgment and the defendant is entitled to unconditional leave to defend. 1 1976 (4) SCC 687 : 1977 AIR (SC) 577 2 (1945) 49 Cal WN 246 at p. 253 3 1976 (4) SCC 687 : 1977 AIR (SC) 577 11 (c) If the defendant discloses such facts as may be deemed sufficient to entitle him to defend, that is to say, although the affidavit does not positively and immediately make it clear that he had a defence, yet, shews such a state of facts as leads to the inference that at the trial of the action he may be able to establish a defence to the plaintiff’s claim the plaintiff is not entitled to judgment and the defendant is entitled to leave to defend but in such a case the Court may in its discretion impose conditions as to the time or mode of trial but not as to payment into Court or furnishing security. (d) If the defendant has no defence or the defence set up is illusory or sham or practically moonshine then ordinarily the plaintiff is entitled to leave to sign judgment and the defendant is not entitled to leave to defend. (e) If the defendant has no defence or the defence is illusory or sham or practically moonshine then although ordinarily the plaintiff is entitled to leave to sign judgment, the Court may protect the plaintiff by only allowing the defence to proceed if the 12 amount claimed is paid into Court or otherwise secured and give leave to the defendant on such condition and thereby show mercy to the defendant by enabling him to try to prove a defence.” 8. I have given my anxious consideration to the rival contentions raised by both parties. 9. The first objection which is raised by the defendant that the suit is not maintainable as summary suit because the necessary averments are not made in the plaint and in the affidavit in support, cannot be accepted. It is no doubt true that under Order XXXVII Rule 2 it is incumbent upon plaintiffs to make certain averments in the suit. However, even though the said averments are not made and if the relief claimed by plaintiffs is maintainable as a summary suit then merely because the said procedure is not followed, defendant would not be entitled to claim unconditional leave to defend on that ground. Moreover the said defect is curable defect and plaintiffs are always be entitled to cure the defect by making necessary averments in the plaint. So far as the second submission of the defendant that the statement of account which is annexed to the plaint is not certified in accordance with the Bankers’ Books of Evidence Act and, therefore, plaintiffs are not entitled to rely on the said documents is concerned, this submission cannot be 13 accepted. Plaintiffs are entitled to produce certified copy while filing list of original documents and, therefore, merely at the stage of hearing of the Summons for Judgment, certified true copy of the entries is produced which are maintained in the Ledger of the Bank with a certificate that such entries were made in the usual and ordinary course of business and the Ledger is in the custody of the Bank as certified by the Chief Manager, Card Department, is, in my view, sufficient for the purpose of deciding the claim of plaintiffs. The third submission of the the defendant is that the statements of account have not been received by defendant and that no inspection was given by plaintiffs and, therefore, defendant is entitled to get unconditional leave to defend. This submission, however, cannot be accepted. The defendant has not disputed the terms and conditions which have been signed by him and which are annexed at Exhibit-A to the plaint. Condition Nos. 13, 14 specifically state that the card holder must collect original bills at the time of signing charge slips at the Member Establishment and secondly the Bank is under an obligation to give duplicate copy of the statement of account to the card holder on specific request made by the card holder and condition No. 15 states that if no dispute is raised within 60 days from the date of the statement, it would be presumed that the card holder accepts the transaction. Admittedly, defendant did not make any request for duplicate statement within three months from the date of receipt and did not dispute the entries in the statement within 60 days from the date of the 14 statement and, as such, it is now not open for defendant to dispute the correctness of the said entries. 10. There is, however, some substance in the submission made by the learned Counsel for defendant that even if the statements on which reliance is placed by plaintiffs – Bank are accepted, there are several discrepancies in the said statements. The learned Counsel for defendant pointed out that the figure which is arrived at in the daily usage statement card and the half monthly usage of the card did not tally. Though, an additional affidavit in support dated 19/1/2010 has been filed by plaintiffs, the learned Counsel for plaintiffs was unable to pin point the discrepancies in the statement in the daily usage statement and the half monthly statement of the plaintiffs. The defendants, therefore, in my view, would be squarely covered by the propositions (a) and (e) which are quoted in para 8 of the judgment of the Apex Court in Basic Equipment Corporation1 and the said propositions read as under:- “(a) If the defendant satisfies the Court that he has a good defence to the claim on its merits the plaintiff is not entitled to leave to sign judgment and the defendant is entitled to unconditional leave to defend.” “(e) If the defendant has no defence or the defence is illusory or sham or practically 1 1976 (4) SCC 687 : 1977 AIR (SC) 577 15 moonshine then although ordinarily the plaintiff is entitled to leave to sign judgment, the Court may protect the plaintiff by only allowing the defence to proceed if the amount claimed is paid into Court or otherwise secured and give leave to the defendant on such condition and thereby show mercy to the defendant by enabling him to try to prove a defence.” In view of this, the defendant, in my view, is entitled to file his Written Statement subject to depositing Rs 25,000/- within six weeks from the date of this order. Written Statement to be filed within eight weeks after the said amount is deposited in this Court. 11. Summons for Judgment is partly allowed in the aforesaid terms and disposed of. (V.M. KANADE, J.) 16