1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUMMONS FOR JUDGMENT NO.126 OF 2009 IN SUMMARY SUIT NO.770 OF 2004 Major V.J.Joseph .. Plaintiff V/s Ravi Shankar Kailash Rai .. Defendant Mr.Wasim Ansari i/by M/s.Roys’ Law Firm for the Plaintiff. Mr.R.A.Shaikh 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 entering the judgment in the suit against the Defendant for a sum of Rs.40 lakhs, after considering the fact of payment of Rs.3 lakhs by the Defendant to the plaintiff during the pendency of the suit as set out in the amended plaint, and for interest and costs. The facts that are relevant and material for the disposal of the Summons for Judgment are as under:- 2. On December 28, 2003 the plaintiff instituted above summary suit in this Court asserting that the Defendant was introduced to him by common friends and that the Defendant is engaged in hotel business 2 that is run in the name and style of M/s.S.K.Interprises. Between March and June 2000, the defendant approached the plaintiff for financial assistance on the ground that he needed finance for expanding his hotel business etc. He represented that he would shortly receive substantial amount from the private chit funds and also the loan from banks and he would be in a position to return the finance provided by the plaintiff to him. It is the case of the plaintiff that on this representation he advanced a sum of Rs.26 lakhs to the defendant from time to time. 3. It is further case of the plaintiff that since the defendant could not return the amount in short period, by acknowledgement of writing dated July 27, 2000 he admitted the amount of Rs.26 lakhs as due to the plaintiff from him. He agreed and promised to pay the same on or before December 31, 2000. That writing acknowledging debt/ liability is at Exh. ‘A’ to the plaint. In furtherance of the said writing, the Defendant gave further writing on July 27, 2000 itself which was styled as Promissory Note promising to pay the said amount to the plaintiff. The said document styled as Promissory Note dated July 27, 2000 is at Exh. ‘B’ to the plaint. The plaintiff further asserts that by an agreement dated August 1, 2000 the defendant promised to transfer the rights of his hotel M/s.S.K.Interprises for non payment of the said amount of Rs.26 lakhs. The said agreement is at Exh. ‘C’ to the plaint. The plaintiff further claims that the Defendant issued post-dated 3 cheques for Rs.26 lakhs, however the said cheques were dishonoured. After complying the procedure laid down u/s.138 of the Negotiable Instruments Act, 1881, the plaintiff filed cases against the defendant. The plaintiff therefore claimed amount of Rs.26 lakhs together with interest of Rs.14 lakhs as more particularly set out in the Particulars of Claim at Exh. ‘D’ to the plaint. 4. On November 3, 2004 summons was issued by this Court under Order XXXVII Rule 2 of the Civil Procedure Code, 1908 (for short C.P.C.). Summons for Judgment No.109 of 2005 was registered in this Court on February 22, 2005. The defendant resisted the same by filing his affidavit in reply on October 14, 2005. The plaintiff was permitted to withdraw Summons for Judgment with liberty to file fresh Summons for Judgment after amending the Plaint. The said order was passed by this Court (S.J.Vazifdar, J.) on November 14, 2005. The plaintiff thereafter took out Chamber Summons No.367 of 2006 for amending the plaint and the same was allowed by this Court (S.J.Vazifdar, J.) on January 22, 2008. It was clarified that the contention that the suit is barred by law of limitation even on the basis of amended pleadings, was kept open. 5. It seems that the plaintiff carried out amendment to the plaint and thereafter the writ of summons was issued under Order XXXVII Rule 2 of the C.P.C. The said writ of summons was served on the defendant 4 on August 14, 2008. It is the case of the defendant that writ of summons was not accompanied by the plaint. The present Summons for Judgment was filed on April 1, 2009. The defendant filed his affidavit in reply on April 15, 2009 i.e.within 10 days from the receipt of Summons for Judgment. 6. The plaintiff filed affidavit in support reiterating the averments made in the plaint. The defendant has sworn an affidavit on April 20, 2009. It is submitted that the present Summons for Judgment is taken out beyond the period of six months after filing of the suit and having regard to Rule 227 of the High Court Original Side Rules, the defendant as a matter of course is entitled to the grant of unconditional leave to defend. The defendant also relied upon the judgment and order passed by the learned Additional Sessioins Judge, Greater Mumbai in Criminal Appeal No.1 of 2008 & Criminal Appeal No.2 of 2008 dated May 4, 2009 wherein the Additional Sessions Judge has observed that the entire transaction covered by Exhibits A to C is sham and bogus. The defendant also contended that while allowing the Chamber Summons on January 22, 2008 the contention of the defendant that the suit is barred by law of limitation even on the basis of amended pleadings was expressly kept open. He submitted that the purported writing was executed on July 27, 2000 and the suit is instituted in December 2003. The suit ought to have been filed within three years and since it is filed beyond the period of 5 three years from July 27, 2000 i.e.when the loan was made, the suit is hit by Article 19 of the Limitation Act, 1963. 7. It is further submitted by the defendant that even accepting the case of the plaintiff at its face value, in respect of the acknowledgement of writing dated July 27, 2000 as also the Promissory Note of July 27, 2000, the plaintiff came with the case that by an agreement dated August 1, 2000 the defendant promised to transfer the rights of his hotel in favour of the plaintiff for non payment of Rs. 26 lakhs and consequently, the plaintiff cannot maintain the suit under Order XXXVII of the C.P.C. If that be so, the Summons for Judgment taken out by the Plaintiff is wholly misconceived and the defendant is entitled to unconditional leave to defend. 8. The defendant further relied upon various judgments in support of his contention that the defence disclosed by him is substantial defence and is neither frivolous nor vexatious. According to the defendant, the defence raised by him raises several triable issues and consequently, he is entitled to unconditional leave to defend. 9. In support of this Summons for Judgment, the learned counsel for the plaintiff has submitted that after filing of the suit, the defendant has paid diverse amount between April 2, 2004 and January 27, 2005. Since the defendant has made part payment, it cannot be contended 6 that the suit is barred by law of limitation and in particular hit by Article 19 of the Limitation Act. He strongly relied upon the acknowledgement of debt/liability duly signed by the defendant on July 27, 2000 promising to repay the amount of Rs.26 lakhs on or before December 31, 2000. He also relied upon the documents styled as Promissory Note at Exh. ‘B’ to the plaint duly signed by the Defendant on July 27, 2000. It is the case of the plaintiff that he had advanced amount of Rs.26 lakhs to the defendant as a friendly loan which he promised to pay within a short period, and since he failed and neglected to repay the said amount he was constrained to institute the present suit and no relief which does not fall within the ambit of Order XXXVII Rule 2 of the C.P.C.has been claimed as the claim is liquidated claim. 10.I have heard learned counsel for the parties at length. Perusal of the material on record would indicate that though the suit was instituted on December 28, 2003 in effect the Summons for Judgment was taken out on April 1, 2009. As observed by the learned Single Judge of this Court (D.G.Karnik, J.) in the case of Kamlesh L.Talreja V/s.Vashav P.Valecha, 2004 (2) Bom.C.R.314, not taking out Summons for Judgment within six months after filing of the suit is one of the factors while considering whether to grant leave to defend to the defendant unconditionally or subject to certain conditions. Apart from that in respect of very transaction, the plaintiff filed complaint against the 7 defendant under Section 138 of the Negotiable Instruments Act, 1881. By judgment and order dated May 4, 2009 the learned Additional Sessions Judge acquitted the defendant of the offence under Section 138 thereof. It was observed by the learned Additional Sessions Judge that the complainant therein (plaintiff herein) did not lead any convincing evidence beside his own words to show that huge amount of Rs.26 lakhs was advanced by him to the accused (defendant herein). The learned Sessions Judge also observed that the accused (defendant herein) entered into an agreement on August 1, 2000 to transfer his shop in favour of the complainant (plaintiff herein). The said agreement was not rescinded. Mr.Shaikh, learned counsel for the defendant submitted that earlier documents at Exhibits A & B merged into Exh.C. Prima-facie I find substance in the said contention and in my opinion, the same also raises triable issue and it really goes to the very maintainability of the suit under Order XXXVII of the C.P.C. The defendant has also contended that the suit is barred by limitation. 11.On the other hand, the plaintiff after amendment has submitted that the defendant has made a part payment on various dates after filing of the suit. Mr.Shaikh, learned counsel for the defendant relied upon the judgment of the Apex Court in the case of Santalal V/s.Kamlaprasad, AIR 1951 SC 477. He submitted that whether the suit is time barred or not has got to be determined exclusively with reference to the date on which plaint is filed and the allegations made therein, and to claim 8 exemption u/s.20 of the Limitation Act the plaintiff must be in a position to allege and prove not only that there was part payment of the principal but such payment has been acknowledged in writing in the manner contemplated by that section. The ground of exemption is not complete without this second element and unless both these elements are proved to exist at the date of the plaint, the suit would be held to be time barred. In my opinion, whether the suit is barred by limitation or not is also one of the triable issues arising between the parties. While acquitting the defendant, the learned Sessions Judge observed that the plaintiff herein did not lead any convincing evidence to show that the huge amount of Rs.26 lakhs was advanced by him to the defendant. Quite apart, the plaintiff asserts that by agreement dated August 1, 2000 the defendant promised to transfer the rights of his hotel M/s.S.K.Enterprises for non payment of Rs.26 lakhs. Mr.Shaikh, learned counsel for the defendant submitted that the documents at Exhibits A & B merged into Exh.C and hence it is not a liquidated claim. He therefore submitted that the suit instituted by the plaintiff under Order XXXVII of the C.P.C.itself is not maintainable. In my opinion, this also raises the triable issue. 12.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 9 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 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 10 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. 13.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. 14.Having regard to the material on record, I am of the opinion that the present case is covered by clause (b) extracted hereinabove. In view of this, the defendant is entitled to grant of unconditional leave to defend. 15.Considering the cumulative effect, in my opinion, the defendant is entitled to grant of unconditional leave to defend. Summons for Judgment is disposed of. Suit is transferred to the list of long causes. Defendant shall file written statement within twelve weeks from today. (R.G.KETKAR, J.)