AJN 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO.3567 OF 2008 IN APPEAL NO.744 OF 2006 IN SUMMONS FOR JUDGMENT NO.898 OF 2001 IN SUMMARY SUIT NO.1721 OF 2001 Shri Venkatesh Chemi-colour Co. & Ors. .... Appellants Vs. Mr. Hatim Suterwalla & Ors. .... Respondents Mr. Girish Godbole i/b Nivit Srivastava for the appellants. Mr. Kishor Jain i/b Gaurang R. Mehta for respondent 1. CORAM : SMT. RANJANA DESAI & K.K. TATED, JJ. DATE ON WHICH THE ORDER IS RESERVED : 24TH OCTOBER, 2008. DATE ON WHICH THE ORDER IS PRONOUNCED : 20TH NOVEMBER, 2008. P.C. :- 1. This notice of motion is taken out by original defendants 1, 2, 3, 5, 7 and 8 in Summary Suit No.1721 of 2001. They are the AJN 2 appellants in Appeal No.744 of 2006. Respondent 1 is the original plaintiff. Respondent 2 is original defendant 4 and respondents 3 is original defendant 6. It is prayed in this notice of motion that Appeal No.744 of 2006 be restored to file and the appellants be permitted and/or allowed to deposit the amount as mentioned in order dated 19/10/2005 passed in the said appeal and that delay in depositing the amount as per the said order dated 19/10/2005 be condoned. It is further prayed that decree dated 9/4/2007 passed in Summary Suit No.1721 of 2001 be set aside upon the appellants depositing the amount as mentioned in order dated 19/10/2005. 2. It is necessary to narrate a few facts. Respondent 1/plaintiff filed the instant summary suit for recovery of a sum of Rs.31,39,809/- along with further interest at the rate of 18% per annum on the total amount of Rs.30 lakhs from the date of filing of the suit till payment and/or realization. The case of the plaintiff is that the defendants, from time to time, borrowed amount from the plaintiff. In part payment of their debt, the defendants by their letter dated 30/10/1999 forwarded six undated cheques drawn on the United Bank of India in favour of the plaintiff. On presentation, the said cheques were dishonoured. In the circumstances, the plaintiff AJN 3 had to file the instant suit for recovery of amount as stated hereinabove. The plaintiff took out Summons for Judgment No.898 of 2001. On 6/9/2005, the defendants were granted leave to defend the suit on their depositing a sum of Rs.30 lakhs within four weeks from the date of the said order. The defendants carried an appeal from the said order dated 6/9/2005 being Appeal No.744 of 2006. On 19/10/2005, by a reasoned order, the said appeal was dismissed but the time for depositing the amount of Rs.30 lakhs was extended by four weeks. It expired on 16/11/2005. On 9/4/2007, learned Single Judge of this court decreed the plaintiff's suit observing that the appellants failed to deposit sum of Rs.30 lakhs as per order dated 19/10/2005 passed in Appeal No.744 of 2006 and a non-deposit certificate dated 19/10/2006 was issued by the Master and Assistant Prothonotary and that the claim in the suit is duly established on the basis of material on record. Learned counsel for the defendants were present when the suit was decreed. The defendants, inter alia, want the decree to be set aside upon depositing the amount mentioned in order dated 19/10/2005. AJN 4 3. We have heard learned counsel appearing for the appellants at some length. He has drawn our attention to the affidavit in support of the notice of motion. The affidavit is filed by appellant 2 – Mr. Devang Sarvaiya, who is original defendant 2. It is, inter alia, stated in the affidavit that the appellants, except appellant 3, were not aware of the orders passed in the present matter. In 2001- 2002, business of Sarvaiya family suffered losses because of the change in the circumstances in the dyeing business as the Chinese companies started dumping the materials in the Indian market. Therefore, there were financial constraints in the Sarvaiya family. It is further stated that appellant 3 underwent a bye-pass surgery in April, 2005 and, therefore, the other members of the Sarvaiya family could not bring any pressure on him. The suggestion obviously is that because of bye-pass surgery of appellant 3, the matter could not be attended to. It is further stated that the orders dated 6/9/2005 and 19/10/2005 were not communicated to the other appellants as appellant 3 was in charge of the matter. According to the appellants, except appellant 3, no one was aware of the decree dated 9/4/2007. According to the appellants, they came to know about the decree and order only when the insolvency proceedings were initiated against them. The AJN 5 appellants contend that they have very good case on merits as there is no consideration whatsoever shown by respondent 1/plaintiff for issuance of the cheques. It is further stated in the affidavit that if the delay in depositing the amount mentioned in the order dated 19/10/2005 is condoned, the appellants will get an opportunity to defend the suit. 4. We have heard Mr. Godbole, learned counsel appearing for the appellants. He reiterated all that is stated in the affidavit in support of the notice of motion which we have reproduced hereinabove. He submitted that appellant 3 was looking after the litigation. He underwent a bye-pass surgery and, therefore, he could not take necessary steps. He submitted that the appellants have suffered a loss in the business. Financial difficulties have prevented the appellants from taking steps. He submitted that the appellants are ready to deposit Rs.30 lakhs in the court with interest as claimed by respondent 1/plaintiff and even at a higher rate, if he so desires. He stated that a demand draft in the sum of Rs.30 lakhs has been brought by the appellants to the court. This fact may be taken into consideration. He submitted that technically an appeal would lie from the judgment and decree dated 9/4/2007 AJN 6 passed by learned Single Judge. However, that appeal has little chance of success and, therefore, the appellants have taken out the present notice of motion for setting aside order dismissing the appeal filed by the appellants from the order passed by learned Single Judge granting conditional leave to the appellants to defend the suit on deposit of Rs.30 lakhs. In this connection, learned counsel relied on the judgment of the Division Bench of this court in M/s. D. Shanalal and etc. etc. v. Bank of Maharashtra, AIR 1989 Bom. 150. Learned counsel submitted that in the interest of justice, the prayers made in the notice of motion be granted. The appellants be permitted to deposit Rs.30 lakhs with interest and costs and they may be permitted to defend the summary suit. 5. As against that, Mr. Jain, learned counsel for respondent 1/plaintiff submitted that no case is made out for grant of relief to the appellants. He took us through the affidavit of respondent 1/plaintiff - Mr. Hatim Suterwalla and contended that the appellants are guilty of laches. Their conduct dis-entitles them from getting any relief from this court. He submitted that, therefore, this motion be dismissed. AJN 7 6. We have given our anxious consideration to the submissions advanced by learned counsel for the parties. We have perused the affidavit in support of the notice of motion and also affidavit in reply filed by respondent 1/plaintiff. In our opinion, affidavit in support of the notice of motion does not make out any case for granting any indulgence to the appellants. It is contended that appellant 3's illness prevented the appellants from taking any prompt steps. It is difficult to digest this submission. Apart from appellant 3, there were other defendants. It is inconceivable that only appellant 3 was following the matter and the other appellants were totally oblivious of the orders passed in the suit. A bald statement made in the affidavit in reply that the firm of the appellants had suffered financial losses is not sufficient to absolve them of laches. In fact, when the decree was passed on 9/4/2007, the defendants were represented by a lawyer. Learned Single Judge has in his order mentioned that on 6/9/2005, conditional leave to defend the suit was granted subject to deposit of Rs.30 lakhs within four weeks and on 19/10/2005, the Division Bench had while dismissing the appeal extended the time to deposit the amount by four weeks. Learned Single Judge has observed that a non-deposit certificate AJN 8 was issued by the Prothonotary & Senior Master. Learned Single Judge has made a reference to the dishonoured cheques in the sum of Rs.30 lakhs and, after observing that the claim in the suit is established, he has passed the decree in terms of prayer clause (a). Learned Single Judge's order does not indicate that, at any time, the appellants prayed that they may be permitted to deposit the amount. 7. It is necessary to see how the matter progressed. For that purpose, we must give a gist of what is stated by respondent 1/plaintiff in his affidavit in reply to the notice of motion. The affidavit states that the suit came to be filed in the year 2001. In 2001, Summons for Judgment No.898 of 2001 was taken out. On 23/12/2003, Chamber Summons No.1837 of 2003 was taken out by defendant 6 and Chamber Summons No.1849 of 2003 was taken out by defendant 4 for striking off their names from the suit. On 9/12/2004, the said chamber summons were allowed to be withdrawn at the instance of advocate for defendants 4 and 6. On 6/9/2005, a reasoned order was passed by learned Single Judge granting leave to the appellants to defend the suit on deposit of Rs.30 lakhs within four weeks. On 5/10/2005, time to deposit AJN 9 expired. Order dated 6/9/2005 was carried in appeal by the appellants. On 19/10/2005, by a reasoned order, the Division Bench dismissed the appeal, but extended the time to deposit by four weeks. On 16/11/2005, the time to deposit expired. The appellants did not deposit the amount and, therefore, on 19/10/2006, the Prothonotary & Senior Master issued a non- deposit certificate. On 9/4/2007, learned Single Judge passed decree against the appellants and the other defendants. The appellants and defendants 4 and 6 were present through their respective advocates. No statement was made that the appellants would deposit the amount or that time to deposit the amount may be extended. On 1/9/2007, respondent 1 took out insolvency notice by way of enforcement/execution of the decree. On 26/9/2007, insolvency notice was personally served upon appellant 6 for and on behalf of other appellants. On 30/10/2007, the appellants took out Notice of Motion No.133 of 2007 for setting aside the insolvency notice. On 4/12/2007, the said notice of motion was dismissed without reserving any leave for them to take out notice of motion for setting aside the decree. The act of insolvency on the part of the defendants was complete. On 3/1/2008, respondent 1/plaintiff filed an insolvency petition against AJN 10 the appellants. On 5/8/2008, the insolvency court passed an order restraining the appellants from selling or alienating their assets and properties. On 16/9/2008, the insolvency court passed an order appointing Interim Receiver of the assets and properties of the appellants and also directed them to disclose on oath their respective assets and properties as well as of appellant-1 firm. On 3/10/2008, the appellants took out Notice of Motion No.3456 of 2008 for setting aside Decree dated 9/4/2007. We are informed that the said notice of motion is pending. 8. The above history will indicate that the appellants have, all along, prosecuted the proceedings. Their case that appellant 3 suffered heart attack and that they were not aware of the various orders passed in the suit does not appear to be true. We are of the confirmed opinion that they are guilty of extreme procrastination and it is only when insolvency proceedings were initiated by respondent 1 and insolvency court appointed the Interim Receiver and directed the appellants to disclose their assets on oath, that the appellants have now filed this motion in a disposed of appeal and prayed that they may be allowed to deposit the amount. It is true that today in the court a statement has been made on behalf of AJN 11 the appellants by their counsel that they are willing to deposit the amount. We are not at all satisfied with the conduct of the appellants. This offer should have come much earlier. Besides, the appellants have also taken out a notice of motion for setting aside the decree under the provisions of XXXVII Rule 4 of the Code of Civil Procedure. The appellants, therefore, could not have taken out this notice of motion in a disposed off appeal. For all the above reasons, in our opinion, there is no merit in the notice of motion. Notice of motion is accordingly, dismissed. [SMT. RANJANA DESAI, J.] [K.K. TATED, J.] AJN 12 9. At this stage, learned counsel for the appellants states that the appellants want to challenge this order in the Supreme Court. He states that the present order be stayed. Learned counsel for the respondents opposes the stay. In the circumstances of the case, we feel that since the appellants want to challenge this order, operation of this order should be stayed and is stayed till 18/12/2008. [SMT. RANJANA DESAI, J.] [K.K. TATED, J.]