1 sj23-08 IN THE HIGH COURT OF JUDICATURE AT BOMBAY O.O.C.J. rpa SUMMONS FOR JUDGMENT NO. 23 OF 2008 IN SUMMARY SUIT NO. 2062 OF 2005 Kishordas Shamjibhai Mehta .. Plaintiff V/s. Alaknanda Stainless Limited & Ors. .. Defendants .... Ms. Mangal Bhandari a/w. Mr. H. V. Chande for the plaintiff. Mr. M.P.S.Rao, senior advocate a/w. Mr. D. Davare i/b. Udwadia & Udeshi & Co. for defendant Nos. 1 and 2. .... CORAM : A. S. OKA, J. DATE : FEBRUARY 3, 2011. ORAL JUDGMENT :- Heard the learned counsel appearing for the parties. With a view to appreciate the submissions made by the learned counsel appearing for the parties, it will be necessary to deal with the facts of the case in brief. 2. The suit is filed for recovery of a sum of Rs.13,96,498/- with further interest of Rs. 8,67,383/- at the rate of 18% per annum. 2 sj23-08 The case made out in the plaint is that for valuable consideration, the first defendant drew in favour of plaintiff a bill of exchange for a sum of Rs.10,47,383/- dated 11th January, 2002. By the bill of exchange, the first defendant directed the second defendant to pay the plaintiff a sum of Rs.10,47,383/-. It is stated that the bill of exchange drawn in connection with sale of certain quantity of stainless steel. He stated that the bill was duly accepted by the second defendant. 3. According to the case of the plaintiff, the first defendant requested the plaintiff by letter dated 11th January, 2002, to discount the said bill of exchange and release the payment after deducting the discounting and other charges. The first defendant confirmed that they are supplied the goods in a good condition to the second defendant and there was no dispute as regards the goods. By the said letter, the first defendant waived presentation of the bill of exchange as well as the noting and protesting of the same. 4. Reliance is placed on the letter of the second defendant dated 11th January, 2002, by which the second defendant 3 sj23-08 confirmed having accepted the Bill of Exchange and requested the plaintiff to release the payment to the drawer. The second defendant confirmed of having received the goods in good condition. The second defendant also waived presentation of the Bill of Exchange as well as noting and protesting the same. The second defendant forwarded a cheque dated 11th April, 2002 in the sum of Rs.10,47,383/-. The cheque was a post dated cheque. On receipt of the cheque, the plaintiff discounted the Bill of Exchange and released payment to the first defendant by issuing a cheque in the amount of Rs.10,00.896/- after deducting the discounting charges. According to the plaintiff, the original third defendant was the Chairman and Managing Director of the second defendant who had given a written personal guarantee on 14th February, 2002. 5. According to the case of the plaintiff, the cheque issued by the second defendant was dishonoured for non payment on the ground that the funds were insufficient. It is stated that when the Bill of Exchange was presented to the second defendant, the same was dishonoured for non payment on the ground of financial difficulties. He stated that on the basis of the guarantee of third 4 sj23-08 defendant, a demand was made to the third defendant of payment of the amount of Bill of Exchange, who declined to pay. Reliance is placed on notice of demand dated 19th March, 2002. A case is made out that the second defendant made a part payment of Rs.1,80,000/- on 19th March, 2003 by a pay order. The suit is accordingly filed for recovery of the balance amount. In the plaint, it is contended that the bar of limitation, if any, is saved by part payment of a sum of Rs.1,80,000/- made by the second defendant. By amending the plaint, it was contended that by notification issued by the Government of Gujarat under Section 4 of the Bombay Relief Undertaking (Special Provisions) Act, 1958, the second defendant was declared as Relief Undertaking for the period from 28th February, 2005 to 27th February, 2006, thereby suspending all the obligations and liabilities of defendant No.2 during the said period. It is contended that the liability revived only upon the period coming to end by 27th February, 2008. 6. It must be stated here that earlier summons for judgment No. 668 of 2005 was taken out by the plaintiff to which a reply was filed. The said summons for judgment was permitted to withdrawn with liberty to file fresh summons for judgment on the 5 sj23-08 ground that the plaintiff desires to amend the plaint. 7. To the present summons for judgment, Mr. Shaunak Choksi, a Director of the first defendant has filed a reply. Various contention have been raised in the reply. One of the contentions raised is that one Mr. Harshad Bakshi who was an employee of the second defendant acted in collusion with the plaintiff and has committed criminal breach of trust. It has contended that the books of account of the first defendant were prepared under the directions of the said Harshad Bakshi. It is contended in the reply that infact the first defendant have paid various amounts in excess of the amount payable under the Bill of Exchange. It was contended that the plaintiff has not produced the books of account for verification and he has not explained as to when a sum of Rs.1,80,000/- was allegedly paid by the first defendant to the plaintiff. It was contended that in ledger account of the plaintiff in the books of account of the first defendant, the sum of Rs.1,80,000/- cannot be found. 9. Separate affidavit was filed by the same person as the Director of the second defendant in which reliance was placed on order passed by BIFR case. Reliance was placed on order dated 6 sj23-08 22nd September, 2007 passed by AAIFR. It is stated that by order dated 19th December, 2007, BIFR appointed State Bank of India as the operating agency. A rejoinder filed by the plaintiff to the affidavit in reply. In the rejoinder, the plaintiff relied upon the affidavit in reply filed by Mr. Himanshu Choksi on behalf of the first and second defendants to the earlier summons for judgment. It is pointed out that in the said reply, the first and second defendants admitted of having received the amount in the sum of Rs. 1,80,000/- on 19th March, 2003. It is stated in the rejoinder that in fact the defendants admitted the entire transaction. There is a sur-rejoinder filed by the first defendant. It is contended that the books of account maintained by the defendants do not record payment of sum of Rs. 1,80,000/- made by the second defendant to the plaintiff. It is contended that in the audited account of the second defendant for the financial year 2002-2003, an entry of the sum of Rs. 1,80,000/- has not been made. There is an affidavit in sur-rejoinder filed on behalf of the second defendant in which contention has been raised that there was collusion between Mr. Harshad Bakshi who was an employee of the second defendant and the plaintiff. It is stated that the audited books of account of the second defendant do not reflect payment of a sum of 7 sj23-08 Rs.1,80,000/-. There is sur-sur-rejoinder filed by the plaintiff in which he reiterated that the payment by demand draft in the sum of Rs. 1,80,000/- has been admitted by the first and second defendants. There is a further affidavit filed on 23rd June, 2009, by authorized signatory of the first defendant. It is reiterated that in the books of account of the plaintiff, there is nothing to substantiate payment of amount of Rs. 1,80,000/- by the second defendant. There is another affidavit filed on 13th July, 2009, by the plaintiff to which an extract of account has been annexed. Reliance is placed on Exhibit-G to the said affidavit which is a Bank Statement. There is another affidavit dated 8th October, 2010 filed by the plaintiff. 10. The learned counsel appearing for the plaintiff has taken through the affidavit filed by Mr. Himanshu Choksi on behalf of first and second defendants in earlier summons for judgment No. 668 of 2005. He submitted that in the said affidavit, the entire transaction has been admitted and even part payment of a sum of Rs. 1,80,000/- on 19th March, 2003 by a demand draft by the second defendant to the plaintiff has been accepted. He pointed out that a summersault has been taken by the first and second 8 sj23-08 defendants while filing an affidavit in reply to the present summons for judgment. He pointed out the averments in the said earlier affidavit. He submitted that the defence raised in the affidavit in reply is completely bogus as evidenced by the affidavit in reply filed to the first summons for judgment. The learned counsel appearing for the plaintiff invited attention of the Court to the annexures to the affidavit of the plaintiff dated 13th July, 2009. He pointed out what is set out in Exhibit-F and Exhibit-G and submitted that these two documents prove that a sum of Rs.1,80,000/- was paid by the second defendant in part payment of the amount due and payable to the plaintiff. He submitted that there is no dispute regarding dishonour of the cheque and dishonour of the Bill of Exchange for non payment. He, therefore, submitted that the defence raised by the defendants is a moonshine defence and hence the defendants are not entitled to leave to defend. 11. The learned senior counsel appearing for the first and second defendants submitted that there is a serious dispute whether the payment of a sum of Rs.1,80,000/- which is relied upon in paragraph No.14 in the plaint was really made. 9 sj23-08 He submitted that the suit has been filed in July 2005 and unless the part payment of Rs. 1,80,000/- on 19th March, 2003 is proved, the suit will not be within limitation in as much as the cheque was dishonoured in April, 2002 and notice of demand dated 15th February, 2002 was issued by the plaintiff to the defendants. He submitted that the payment of the said amount is not reflected in the audited accounts of the second defendant. He submitted that there are several triable issues including the issue of limitation. 12. The learned counsel appearing for the plaintiff invited attention of the Court to the amended plaint wherein the averments have been incorporated regarding orders passed under Bombay Relief Undertaking (Special Provisions) Act, 1958. It is contended that the liability of the second defendant remained suspended from 28th February, 2005 to 27th February, 2006 which will save the limitation. 13. Before dealing with the submissions made on merits, it must be noted here that the plaint including the annexures thereto consists of 24 pages and affidavits running into 183 pages have 10 sj23-08 been filed in the summons for judgment and that is how the summons for judgment remained pending for more than two years. 14. The suit is based on a Bill of Exchange and dishonoured cheque. The cheque has been dishonoured on 11th April, 2002. reliance is placed in the plaint on notice dated 15th February, 2002 issued on the basis of the dishonoured cheque. The averments made in plaint discloses that even the Bill of Exchange was dishonoured prior to date of issuing notice. As stated earlier, the suit has been lodged in the year 2005. 15. To save the limitation, reliance is placed on what is averred in paragraph 14 in the plaint which reads thus : “The Plaintiff says that the suit is not barred by law of limitation and the same is being filed within the period of limitation. The bar of limitation if any is saved by reason of part payment of Rs. 1,80,000/- made by Demand Draft on 19.3.2003 and the suit is being filed in time. The said Demand Draft was drawn by Banker of the 2nd Defendants in favour of the Plaintiff as per the instructions of the Defendant No.2. The said Bankers are the agents of Defendant No.2.” 11 sj23-08 16. The plaintiff has relied upon reply filed to the first summons for judgment. Reliance is placed on admission of receipt of a sum of Rs.1,80,000/- by Demand Draft. Only one statement in the said reply cannot be picked up. In fact, a specific contention was raised in the paragraph No.8 of the said reply that entire payment towards the bill of exchange was made by the second defendant to the plaintiff and there were no outstanding dues. Reliance is also placed not only on payment of a sum of Rs.1,80,000/- on 19th May, 2003, but also on amounts allegedly paid to the plaintiff of Rs.3,00,000/- and 7,00,000/- on 22nd April, 2003 and 1st August, 2003 respectively. Obviously, the payment of the last two amounts have not been accepted by the plaintiff. In the affidavit filed to the subsequent summons for judgment, there are large number of documents relied upon by both the parties relating to payment of a sum of Rs.1,80,000/-. Case of second defendant is that in the audited accounts of the said defendant, the payment of said amount has not been reflected. Reliance is placed by the plaintiff on documents annexed to the last affidavit dated 13th July, 2009, which according to him show that a Demand Draft was taken by the second defendant in the sum of Rs.1,80,000/- on 19th March, 2003. It must be noted here that apart from the alleged suit 12 sj23-08 transaction, there were other transactions between the parties. It is contended that the said payment is not reflected in the account of the plaintiff maintained by the first defendant. Thus, there is a serious contest on the issue of payment of the said amount of Rs.1,80,000/- as alleged in paragraph No.14 of the plaint towards the amount due and payable under the bill of exchange. Reliance is also placed on certain orders passed under the Bombay Relief Undertaking (Special Provisions) Act, 1951, by submitting that for a period of one year from 28th February, 2005, the liability of the second defendant was suspended. Whether the said orders will suspend the period of limitation which had already started running is an issue which will arise for determination. 17. But, for the allegation of payment of a sum of Rs.1,80,000/- made in paragraph No.14, the suit claim may not be within limitation. The issue of limitation certainly arises in the present suit which is certainly a triable issue. Under the circumstances, this is a case where unconditional leave will have to be granted to first and second defendant. The third defendant was impleaded as a guarantor. The third defendant has died and his legal representative have been brought on record. They are also entitled 13 sj23-08 to unconditional leave. 18. Hence, summons for judgment is disposed of by passing following order : :: O R D E R :: i. Unconditional leave is granted to the defendants to defend the suit. ii. Written statement shall be filed within three months from today. iii. Suit shall be transferred to the list of commercial causes. JUDGE