SJ208-09 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUMMONS FOR JUDGEMENT NO.208 OF 2009 IN SUMMARY SUIT NO.431 OF 2009 Indian Oil Corporation Ltd. .. Plaintiff Versus M/s.Parekh Petroleum & Ors. .. Defendants Mr.Naushad Engineer with Sunil Gangan & Jayesh Mistry i/b. RMG Law Associates for plaintiff Mr.A.S.Kamat i/b. Apex Law Partners for defendant Nos. 1 and 2. CORAM : S.C.DHARMADHIKARI, J. DATE : 8th September 2010. P.C.: 1] This is a suit filed to recover a sum of Rs.11,21,117/- being outstanding sum together with interest from July 2006 till the date of filing of the suit with further interest at 18% p.a. It is stated that the interest claimed is on the basis of the provisions of Interest Act. 2] According to plaintiffs, defendants were appointed as their dealers. The dealership agreement is dated 28th February 1987. According to SJ208-09 2 plaintiffs, during the subsistance of this dealership agreement a sum of Rs.19,13,616/- was due and payable on account of credit given under clause 11 of the same. 3] Thereafter, there was termination of the dealership agreement on the own showing of the plaintiffs by their letter dated 9th June 2004. 4] After termination, they entered into fresh dealership agreement with some other entity but when that agency/ entity submitted its account with regard to taking over of the retail dealership and reconciling the accounts, plaintiffs realised that even after giving credit of the stock amount, there are still sums due and payable by the defendants i.e. how they called upon defendants to pay the sums. A letter to that effect is addressed and a copy of the same is at Annexure F to the plaint. It is clear from the said letter that what the plaintiffs are claiming is an amount which is stated to be debit balance in their accounts. Further letters are also on these lines. 5] When the defendants did not respond favourably and pointed out SJ208-09 3 that there is nothing due and payable on 29th September 2006, a letter was addressed on page 34 enclosing therewith the statement of account which was followed by a demand notice and in response thereto all that the Advocate for the defendants stated is that as per their statement of accounts, they have to recover a sum of Rs.4,04,322.47 and how that figure has been arrived at is stated in the said letter. 6] In fact this letter is a demand for payment of that sum. 7] It is based upon a sentence in para 1 clause (c) of this letter that Mr.Engineer would like me to hold that there is an admission of the liability and the suit, therefore, will not be a suit on accounts but maintainable as a summary suit as the balance to this extent is confirmed. He places reliance upon judgement of the Supreme Court reported in A.I.R. 2009 S.C. 320 (Southern Sales & Services Vs. Sauermilch Design & Handles Gmbh). 8] On the other hand, Mr.Kamat appearing for defendants submits that this letter must be read as a whole. Far from acknowledging and SJ208-09 4 admitting any sum as due and payable what it sets out is the position in defendant's accounts. Therefore, when the accounts are yet to be reconciled and the amounts crystalised, this Court cannot entertain this suit as a summary suit. More so, when there is serious issue as to the claim being within limitation. 9] Having heard the learned Counsel for parties, I am of the opinion that the defendants deserve unconditional leave to defend. In the case before the Supreme Court, the Karnataka High Court had granted conditional leave to defend after noticing the amendment to the Order XXXVII Rule 2(3) of CPC. That was on the basis that there was a clear admission of the liability. Therefore, the High Court insisted that by virtue of the amended provisions defendants will have to deposit that sum and only then can he be granted leave to defend. Such is not the controversy before me. There is no dispute that there is an admission of the liability. Thus, full effect must be given to the provisions and particularly Order XXXVII Rule 2(3) as amended by the Civil Procedure (Amendment) Act, 1976. SJ208-09 5 10] However, for that to apply, there must be a liability which is admitted. 11] In the instant case, on the own showing of the plaintiffs, the matter is of reconciliation of accounts. They seek to invoke Order XXXVII on the basis a of stray sentence in the defendant's Advocate's reply to their demand notice. That must be read as a whole together with the assertions in the affidavit in reply. So read, there is no question of admission of any liability by the defendants. 12] The submission of Mr.Kamat that the suit claim is also barred by limitation has to be gone into and that can only be at the trial. Therefore, this is a fit case where unconditional leave deserves to be granted. It is accordingly granted to defendants. Summons for judgement is dismissed. Suit is transfered to the list commercial causes with usual directions to file written statement, discovery and inspection etc. (S.C.DHARMADHIKARI, J)