1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUMMONS FOR JUDGMENT NO.23 OF 2009 IN SUMMARY SUIT NO.1674 OF 2007 Clean Coats pvt.Ltd. .. Plaintiff V/s Rekvina Pharmaceuticals Pvt.Ltd. .. Defendant Mr.Gautam Ankhad i/by M/s.Ashwin Ankhad & Associates for Plaintiff. Mr.Doshi i/by Doshi & Co.for the Defendant. CORAM : R.G.KETKAR, J. DATE : 4th January, 2010. P.C.: 1. The plaintiff has taken out this summons for judgment for enterting the judgment against the defendants for Rs.4,24,226/- comprising of Rs.3,02,592/- as principal amount and Rs.1,21,634/- as interest till the date of filing of the suit and further interest at such rate as this court deems fit on the said principal amount from the date of the suit till decree and payment of costs of the suit. The facts material for the disposal of this summons for judgment are as under:- 2. The plaintiff is a private limited company registered under the Indian Companies Act, 1956 and is engaged in the business of supplying 1 2 materials as well as accepting Works Contracts relating to wall coating, flooring works among other things. The defendant is a pharmaceutical company who had placed order by its Works Order dated December 15, 2004 on the plaintiff for conducting coating and plastering and specialised coating work at defendant’s factory at Baddi, Himachal Pradesh. As per the said works order the payment was to be made by the defendant to the plaintiff in the following manner: (i) 50% Token Advance with the order. (ii) 40% Against material receipt (iii) 10% After completion of job within 30 days. 3. It is the case of the plaintiff that they duly dispatched the material on December 23, 2004 and December 27, 2004. The plaintiff raised two invoices both dated August 30, 2005 for Rs.11,52,234/- and Rs. 1,95,858/-. The particulars of the invoices are set out in paragraph 3 of the plaint. The plaintiff also claimed transportation charges of Rs. 13,000/- on December 27, 2004. The plaintiff asserts that out of the total amount of Rs.13,48,092/- raised through two invoices, the defendant has paid an amount of Rs.10,48,500/-. In so far as transportation charges are concerned, the defendant has paid Rs. 10,000/-. Thus the balance amount of Rs.3,02,592 is payable by the defendant towards the material supplied, works done and the 2 3 transportation charges. The plaintiff has annexed copies of invoices at Exhibits C and C1 and copies of the transport challans at Exhibits B and B1. 4. The plaintiff issued reminders on June 9, 2006, June 30, 2006, August 21, 2006 and September 13, 2006 which are at Exhibits D1 to D4. The plaintiff further asserts that the site work was completed by the end of August, 2005 and thereafter they had raised the aforesaid invoices. The plaintiff further asserts that the defendant did not dispute the quantum of invoices as also the measurements among other things. It is only when the plaintiff issued winding up notice on December 20, 2006, in reply dated January 2, 2007 the defendant raised dishonest and baseless plea of non-completion of the work and the imaginary financial losses. According to the plaintiff the above actions of the defendant are malafide solely with a view to withholding outstanding payment due to the plaintiff. The plaintiff instituted the aforesaid suit under the written contract evidenced by the Works Contract at Exhibit A and two invoices at Exhibits C & C1 and filed suit under Order XXXVII of the Code of Civil Procedure, 1908 (for short C.P.C.). The plaintiff has not claimed any relief not falling within the scope and ambit of Order XXXVII Rule 2 of the C.P.C. 5. In support of this summons for judgment, the plaintiff filed an 3 4 affidavit of Mr.Mahesh Sahi, Assistant Manager, Accounts Department and authorised signatory, reiterating the contentions raised in the plaint. 6. On behalf of the defendant, Mr.Mukesh Shah, Director, has made an affidavit. It is contended that the suit was instituted in June, 2007 and the present summons for judgment is taken out on January 14, 2009 i.e. Two years after institution of the suit, and hence the defendant is entitled to grant of unconditional leave to defend. It is further submitted that the plaintiff has raised invoices and demand beyond the scope of the Works Order and therefore the summary suit is not maintainable. The defendant further submitted that the invoices raised by the plaintiff are not due and payable by the defendant as they are not in conformity with the Works Order at Exhibit A to the plaint. Finally it is submitted that the defendant had lost business in the sum of Rs.21 lakhs and therefore the defendant will claim the said amount from the plaintiff on account of causing delay in completing the work. It is also submitted that the suit is not covered under Order XXXVII Rule 2 of the C.P.C., as it is not based upon any written contract. 7. I have heard learned counsel for the parties at length. In so far as the plea that the suit is not based on written contract is concerned, 4 5 learned counsel for the plaintiff relied upon the judgment in the case of Jatin Cotecha V/s.VFC Industrial Private Limited, 2008(2) Bombay C.R. 155, wherein, after exhaustively considering the judgments on the subject in hand as also Section 70 of the Contract Act, it was held by the Court that the invoices must be treated as written contract and the suit based on such invoices is suit based on the written contract. In view of this I am of the opinion that the contentions raised by the defendant that the suit is not based on written contract cannot be accepted. 8. It was further submitted on behalf of the defendant that the suit was instituted in June 2007 and the present Summons for Judgment is taken out on January 14, 2009 i.e.two years after the institution of the suit, and the defendant is therefore entitled to grant of unconditional leave to defend. In the case of Kamlesh L.Talreja V/s. Vashdev P.Valecha, 2004 (2) Bom.C.R.314 this Court held that the fact that the plaintiff had not applied for Summons for Judgment within a period of six months may be only one of the circumstances which the Court may take into consideration while considering whether the defendant should be granted leave to defend, and if so, subject to what conditions. It does not create right in the defendant to automatically get the leave to defend the suit. The defendant has to make out the defence that is not sham, fictitious or moonshine to get an 5 6 unconditional leave. I do not find substance in the contention raised by the defendant as on considering the material on record, the defendant has not raised the substantial defence. 9. After completing the works the plaintiff has issued reminders on June 9, 2006 at Exh.D1, June 30, 2006 at Exh.D2, August 21, 2006 at Exh.D3 and finally on September 13, 2006 at Exhibit D4. Though these letters were duly received by the defendant, the defendant did not dispute the contents thereof. It is only when the plaintiff issued winding up notice under sections 433 and 434 of the Companies Act, 1956 on December 20, 2006 for the first time the defendant raised dispute by giving reply on January 2, 2007. It is pertinent to note that the works were completed by end of August 2005 and the plaintiff repeatedly called upon the defendant to pay the balance amount. Though the reminders were received by the defendant, no reply was given. No dispute was even raised by the defendant. It is only after receipt of the winding up notice for the first time nearly after two years the defendant raised the dispute in its reply dated January 2, 2007. Considering the material on record, in my opinion, the defence raised by the defendant is clearly moonshine. No triable issues have been raised by the defendant. The defence raised by the defendant is frivolous and vexatious and is raised solely with a view to denying the claim made by the plaintiff. Even otherwise the defendant is bound to 6 7 compensate the plaintiff for the works done in terms of Section 70 of the Contract Act. 10.In the case of Kiranmoyee Dassi and Another Vs.Dr.J.Chatterjee, AIR 1949 Cal.479, after considering the contentions raised, the learned Single Judge recorded a finding in Paragraph No.9 to the effect that the triable issue was raised by the defendant and that defence applied to the whole of the plaintiff’s claim. In view of this, he held that the plaintiff was not entitled to final judgment on the summary application and the defendant was entitled to leave to defend the suit. The question posed was whether such leave should be given unconditionally or subject to terms as to paying into Court or giving security. After comprehensive review of the authorities on the subject, the following propositions were laid down in Kiranmoyee’s case: (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 indicating that he has a fair or bonafide 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. (c) If the defendant discloses such facts as may be deemed sufficient to entitle him to defend, that is to say, although the 7 8 affidavit does not positively and immediately make it clear that he has 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 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. 11.These propositions have been approved by the Apex Court in the case of Machelec Engineers and Manufacturers V/s.Basic Equipment Corporation, (1976) 4 SCC 687. 12.Having regard to the material on record, I am of the opinion that the present case is covered by clause (d) extracted hereinabove. In view of this the plaintiff is entitled to sign the judgment in its favour. 8 9 13.The plaintiff has claimed interest at the rate of 2% p.m.being contractual rate of interest from October 1, 2005 till filing of the suit and further interest at 2% p.m.or at such rate as this Court may deem fit on the principal amount of Rs.3,02,592/-. In this regard the plaintiff had issued reminders from June 6, 2006 to September 13, 2006 which are at Exhibits D1 to D4. In that he had not claimed any interest on the outstanding amount of Rs.3,02,592/-. It is only when the notice u/s.433 and 434 of the Companies Act was issued on December 20, 2006 he claimed interest. In view of this, I am of the opinion that the plaintiff is entitled to claim interest on the principal amount of Rs.3,02,592/- from December 20, 2006 till realisation at the rate of 2% per month. This is because even the invoices at Exhibits C and C1 merely set out that the interest at the rate of 2% p.m.will be charged. However there is no specific stipulation that the interest at the rate of 2% p.m.will be charged after expiry of particular period. The reminders at Exh.D1 to D4 did not call upon the defendant to pay any interest on the outstanding amount. In my opinion, since the plaintiff has claimed interest only at the time of issuing notice on December 20, 2006, it can be reasonably inferred that from that date onwards the plaintiff, treating the delay in payment of outstanding amount claimed interest at the rate of 2% p.m. 14.In the result, Summons for Judgment stands disposed of. Plaintiff’s 9 10 suit stands decreed and the defendant is directed to pay to the plaintiff a sum of Rs.3,02,592/- together with interest thereon at the rate of 2% per annum from December 20, 2006 till realisation. No order as to costs. (R.G.KETKAR, J.) 10