SCA/10853/2008 1/11 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 10853 of 2008 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 ? ========================================================= HARSHIT NAVNITBHAI SHAH - Petitioner(s) Versus BHARATBHAI JIVRAJBHAI BAGADIA - Respondent(s) ========================================================= Appearance : MR HARNISH V DARJI for Petitioner(s) : 1, MR GHANSHYAM THURIA for Respondent(s) : 1, ========================================================= CORAM : HONOURABLE MR.JUSTICE M.R. SHAH Date : 01/09/2008 ORAL JUDGMENT By this petition under Article 227 of the Constitution of India, the petitioner-original defendant has prayed for appropriate writ, order or direction quashing and setting the impugned order SCA/10853/2008 2/11 JUDGMENT passed by the learned City Civil Judge, Court No.7, Ahmedabad dated 21/07/2008 passed below Summons for Judgment, Exh.9 in Summary Civil Suit No.2252 of 2007 by which the learned trial Court has granted conditional leave to the petitioner – defendant to contest the suit on his depositing Rs.4 Lacs before the learned trial Court within a period of four weeks. 2. The respondent-original plaintiff had instituted Summary Suit No.2252 of 2007 claiming Rs.7,85,400/- from the petitioner-defendant submitting that the defendant was partner of one Harshit Plast, Changodar and the said firm obtained a loan from Bhagyoday Co-operative Bank Ltd., of Rs.28 Lacs which was to be paid to the Bank and as per the understanding between the defendant and other partners, the liability of the defendant was fixed at Rs.6,54,500/- and the said amount was to be paid by the defendant to the Bhagyoday Co-operative Bank Ltd. As per the plaintiff, as the defendant was unable to pay dues of the Bank and discharge his obligations, the Bhagyoday Co-operative Bank Ltd., also initiated legal proceedings against the defendant and therefore the defendant requested to the plaintiff who is close SCA/10853/2008 3/11 JUDGMENT relative of defendant to help him in such crucial condition and further requested to pay up amount of Rs.6,54,500/- with the Bank of his liability. As per the plaintiff, the defendant also promised that he will repay the said amount with interest @ 12 % per annum. Therefore, on the said assurance the plaintiff paid up Rs.6,54,500/- to the Bank for and on behalf of defendant. As against above, the defendant had issued 17 cheques for the said amount drawn on State Bank of India, Naroda Road Branch, Ahmedabad each of Rs.38,500/- and also assured that on respective dates, cheques will be honoured and the plaintiff will receive the cheque amount. Thus, the defendant was indebted to the plaintiff of Rs.6,54,500/-. As per the plaintiff, he presented eight cheques each of Rs.38,500/- respectively with Canara Bank, Ashram Road Branch, Ahmedabad which came to be returned dishonoured on the ground of “Account Closed”. The plaintiff further submitted that as defendant had closed his A/c. With State Bank of India and therefore he did not deposit remaining cheques for the encasement. After returning of the above above stated cheques as dishonoured, the plaintiff served a legal notice upon the defendant and thereafter even the plaintiff had also filed two SCA/10853/2008 4/11 JUDGMENT Criminal Case against the defendant for the offences punishable under Section 138 of the Negotiable Instruments Act. As the above amount was not paid to the plaintiff, he had instituted the aforesaid summary suit for recovery of Rs.7,85,400/-. In the said summary suit, the plaintiff took out summons for judgment and on having been served with the summons, the plaintiff herein original defendant submitted leave to defend application denying the issuance of all the cheques as well as even denying the fact that the Bank Account from which cheques were issued was his Bank Account. 3. The learned Judge of the City Civil Court, Ahmedabad by impugned order dated 21/07/2008 granted conditional leave to the petitioner-defendant to contest the suit on merits on his depositing Rs.4 Lacs only in the Court. Being aggrieved and dissatisfied with the order passed by the learned City Civil Court, Ahmedabad, granting conditional leave to defendant-petitioner to defend the suit, the petitioner-original defendant has preferred the present Special Civil Application under Article 227 of the Constitution of India. SCA/10853/2008 5/11 JUDGMENT 4. Shri Harnish Darji, learned Advocate appearing on behalf of petitioner-original defendant has vehemently submitted that in the facts and circumstances of the case, the learned trial Court has materially erred in granting conditional leave to the petitioner – defendant to contest the suit on depositing of Rs.4 Lac. It is submitted that considering the triable issues, the learned trial Court ought to have granted unconditional leave to defendant to contest the suit. It is submitted that the defendant has disputed that any amount of Rs.6,54,500/- was paid by the plaintiff with the Bhagyoday Co-operative Society Ltd for and on behalf of defendant. It is also further submitted that even it was also disputed that the Bank Account from which the cheques are alleged to have been issued does not belong to the defendant and the Bank Account was not in his name. Relying upon the decision reported in AIR 2001 DELHI 341, it is submitted that as all the cheques were not deposited and therefore the summary suit is not maintainable. 5. By making the above submission, it is requested to quash and set aside the impugned order passed by the learned trial Court granting SCA/10853/2008 6/11 JUDGMENT conditional leave to defendant to defend the suit and further requesting to grant unconditional leave to defendant to contest the suit. 6. The petition is opposed by Shri G.J.Thoria, learned Advocate appearing for the original plaintiff. He has submitted that the plaintiff has already produced on record the certificate issued by the Bhagyoday Co-operative Bank Ltd., showing that in-fact the plaintiff had deposited Rs.6,54,500/- for and on behalf of the defendant and therefore the amount of Rs.6,54,500/- paid by the plaintiff with the Bhagyoday Co-operative Bank Ltd for and on behalf of the defendant is proved. It is also further submitted that even the conduct on the part of the defendant is also required to be considered. It is, therefore, submitted that even the defendant has gone to the extent by submitting that the Bank Account on which alleged 17 cheques are issued, was not in the name of the defendant; though it is born out from leave to defend application that the same was in the name of the defendant. It is submitted that after depositing of eight cheques given by the defendant and when all of them came to be dishonoured on the SCA/10853/2008 7/11 JUDGMENT ground that “Account Closed”, the remaining cheques were not deposited and therefore when the remaining cheques were not deposited, will not take away the right of the plaintiff to file a summary suit. It is submitted that in the facts and circumstances of the case the learned trial Court has not committed any error in granting conditional leave to defend the suit on depositing Rs.4 Lacs against the claim of Rs.7,54,500/-. It is, therefore, requested to dismiss the present petition. 7. Heard the learned Advocates appearing on behalf of the respective parties. At the outset, it is required to be noted that the petitioner-defendant had issued seventeen cheques drawn on State Bank of India and in the leave to defend application the very defendant had submitted that Bank had closed the Account on the ground of non-operation of the account. Meaning thereby, a Bank Account was in the name of the defendant but the same was closed by the Bank, as the account was not operated. In spite of above, the defendant had gone to the extent of submitting that the defendant had no account in the SCA/10853/2008 8/11 JUDGMENT Bank. This reflects the conduct on the part of the defendant. 8. By documentary evidence the plaintiff has established the fact of paying Rs.6,54,500/- with Bhagyoday Co-operative Bank Ltd., for and on behalf of defendant. Thus,, prima-facie it appears that the amount of Rs.6,54,500/- was paid by the plaintiff for and on behalf of the defendant against which the defendant had issued seventeen cheques drawn on the State Bank of India, Naroda Branch, Ahmedabad each of Rs.38,500/-. Out of seventeen cheques, eight cheques were deposited by the plaintiff. However, the same came to be returned with an endorsement “Account Closed”. Therefore, naturally when the account was closed and the eight cheques were dishonoured on the aforesaid ground, the plaintiff was justified in not presenting the other cheques. 9. In view of the above, the decision of the Delhi High Court relied upon by the petitioner would not be of any assistance to the petitioner as in the said case, the cheques were dishonoured on the ground SCA/10853/2008 9/11 JUDGMENT of insufficient funds and in the present case the cheques came to be dishonoured on the ground “account closed”. Considering the aforesaid facts and circumstances of the case, the trial Court has exercised the discretion judiciously and has imposed the condition of depositing Rs.4 Lacs only against the claim of Rs.7,54,500/- while granting conditional leave to defendant to defend the suit. At this stage, the decision of the learned Single Judge of this Court in case of New India Assurance Company Ltd., Vs. State Trading Corporation of India Ltd., & Anr., reported in 2007 (1) GCD 467 (GUJ) is required to be referred to wherein the learned Single Judge of this Court has held considering the decision of the Hon'ble Supreme Court that defendant is not entitled to leave to defend as of right. If the Court comes to the conclusion that defence of the defendant is false, vexatious, leave to defend should be refused. It is also further held that it could also be made conditional if the Court doubts bona fides of the defendant or thinks that the defence is only put into gain time. In the facts and circumstances of the present case, the trial Court is well justified in SCA/10853/2008 10/11 JUDGMENT directing the defendant to deposit Rs.4 Lacs only against the claim of Rs.6,54,500/- 10. For the reasons stated above, it cannot be said that the learned trial Court has committed any error in imposing condition of depositing Rs.4 Lacs while granting conditional leave to defendant to defend the suit and therefore same does not call for the interference of this Court in exercise of powers under Article 227 of the Constitution of India. Hence, the present petition deserves to be and is accordingly dismissed. 11. At this stage, Shri Darji, learned Advocate appearing for the petitioner – org. defendant had requested the Court to extend the time to deposit Rs.4 Lacs as ordered by the learned trial Court, as the petitioner had preferred the present Special Civil Application. 11.1 In the facts and circumstances of the case and as the petitioner was prosecuting the present Special Civil Application, time to deposit Rs.4 Lacs SCA/10853/2008 11/11 JUDGMENT as per the order passed by the learned trial Court is extended upto 30/09/2008. (M.R.SHAH, J.) sompura