SCA/6075/2008 1/8 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 6075 of 2008 For Approval and Signature: HONOURABLE MR.JUSTICE BANKIM.N.MEHTA ========================================================= 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? ========================================================= M/S SHRI KUMARPAL MANEKLAL SHAH - Petitioner(s) Versus M/S ANIL TRADERS THROUGH PROP ANIL KHIMRAJ JAIN - Respondent(s) ========================================================= Appearance : MR DHARMESH V SHAH for Petitioner(s) : 1, MR SUDHIR M MEHTA for Respondent(s) : 1, ========================================================= CORAM : HONOURABLE MR.JUSTICE BANKIM.N.MEHTA Date : 10/04/2008 ORAL JUDGMENT : 1. By filing this petition under Article 227 of the Constitution of India, the petitioner – defendant has challenged the order dated 13-3- 2008 passed by learned Auxiliary Chamber Judge, Court No.8, City Civil Court, Ahmedabad below Summons for Judgment Exh. 10 in Summary Suit SCA/6075/2008 2/8 JUDGMENT No.714 of 2007, whereby the petitioner – defendant was granted conditional leave to defend the suit on his depositing Rs.2,00,000/- within four weeks from the date of the order. 2. Rule. Learned advocate Mr. Sudhir M. Mehta for the respondent waives service of Notice of Rule on behalf of the respondent. 3. In the facts and circumstances of the case and with the consent of the learned advocates for the parties, this petition is taken up for final hearing today. 4. The respondent - plaintiff filed suit to recover Rs.5,40,187/- being the amount of loan advanced for business together with interest @ 12% p.a. and costs of the suit from the petitioner – defendant under Order 37 Rule 2 of the Civil Procledure Code. After service of summons the petitioner – defendant appeared through his advocate. Thereafter, the respondent – plaintiff took out summons for judgment and claimed the aforesaid amount contending that Rs.6,00,000/- was advanced to the petitioner – defendant by cheque on 30-8-1997 as he was in need for his business; that the account was a running account and the petitioner – defendant had acknowledged the debt; that till 31-3-2004 SCA/6075/2008 3/8 JUDGMENT Rs.5,42,187/- remained due and payable by the petitioner – defendant and he acknowledged the same by signing in the Account Ledger; that despite demand the petitioner – defendant failed to repay the aforesaid amount. Therefore, a notice was served, but petitioner – defendant neither replied to the notice nor paid the amount, and therefore, the respondent – plaintiff is entitled for decree of the aforesaid amount together with interest @ 12% p.a. from the date of the suit and costs. 5. The petitioner – defendant filed his leave to defend affidavit Exh. 14 and raised various contentions. The main contentions raised by the petitioner – defendant were; limitation and interest. The petitioner – defendant contended that according to the documents produced by the respondent – plaintiff last payment of Rs.25,000/- allegedly made by the petitioner – defendant was on 10-2-2000, and therefore, the suit is barred by limitation. It was also contended that the respondent – plaintiff with a view to bring the suit within limitation obtained signature of unauthorised person – Ravindrabhai working with him but said Ravindrabhai who has expired recently was not authorised to acknowledge the debt, and therefore, the suit claim is barred by limitation. It was also contended that there was no agreement with SCA/6075/2008 4/8 JUDGMENT regard to the interest despite that the respondent – plaintiff has credited the amounts towards interest though they were given towards principal amounts and hence he is entitled for unconditional leave to defend the suit. 6. After hearing, the learned trial Judge granted conditional leave to defendant to the petitioner – defendant to defend the suit. Being aggrieved by the said decision, the petitioner - defendant has approached this Court by filing the present petition. 7. I have heard learned advocate Mr. R.R. Deliwala for Mr. Dharmesh V. Shah for the petitioner – defendant and learned advocate Mr. Sudhir M. Mehta for the respondent – plaintiff at length and in great detail. 8. It appears from the copy of the extracts of Account produced on the record of this case that last payment of Rs.25,000/- was allegedly made by the petitioner – defendant on 10-2-2000 and it was credited in the Account Book maintained by the respondent – plaintiff. The copy of extract of Account for the year 2001-2002 produced on the record indicates that Rs.5,42,187/- is payable. It also appears that one Ravindrabhai has signed the extract of account on 16-9-2003. It is SCA/6075/2008 5/8 JUDGMENT alleged by the respondent – plaintiff that thereby petitioner - defendant has acknowledged the debt. The petitioner – defendant has disputed the authority of Ravindrabhai. It also appears from the plaint and the summons for judgment Exh .10 that the amount was allegedly advanced to an individual and not to a firm. The extract of account indicates that last payment was allegedly made on 10-2-2000. Therefore, suit after 9-2-2003 would be barred by limitation but it was got extended by alleged acknowledgment. The petitioner – defendant has disputed the authority to acknowledge the debt. Therefore, whether said Ravindrabhai had any authority to acknowledge the debt on behalf of the petitioner – defendant is a triable issue and it could be decided only after adducing evidence. Therefore, the learned trial Judge committed error in passing the impugned order. 9. Learned advocate for the respondent – plaintiff also relied upon the writing dated 23- 4-2001 allegedly executed on behalf of the petitioner – defendant. It appears from the copy thereof annexed with the compilation that the writing was executed on the letter head of Kumarpal Maneklal Shah. It does not indicate as to who signed the writing. The petitioner - defendant has disputed the writing. Therefore, it is also a triable issue which could be decided SCA/6075/2008 6/8 JUDGMENT at the time of trial. 10. A copy of the extracts of Account of the petitioner – defendant maintained in the Books of Account of the respondent – plaintiff produced on the record of this case indicate that various amounts of interest have been debited in the account. The petitioner – defendant has also raised dispute of right of the respondent - plaintiff to claim interest. It appears from the affidavit of summons for judgment that the respondent – plaintiff claimed interest @ 12% p.a. The respondent – plaintiff did not produce any evidence in support of his claim of interest. Therefore, whether the respondent – plaintiff is entitled for interest, and if yes, at what rate and from which date, would become triable issues and it could only be decided after the trial. The amounts of interest have been debited in the Account Books and in absence of any written agreement with regard to interest, the entire claim of the respondent – plaintiff would become unascertained claim. Therefore, the suit under Order 37 Rule 2 of the Civil Procedure would not be maintainable. Hence, the learned trial Judge committed error in passing the impugned order. 11. Learned advocate for the respondent – SCA/6075/2008 7/8 JUDGMENT plaintiff has relied upon the decision of Uma Shankar Kamal Narain & Anr. Vs. M.D. Overseas Ltd. reported in (2007) 4 SCC 133, wherein the Hon'ble Supreme Court laid down principles that if the defendant satisfies the Court that he has good defence to claim on merits, the defendant is entitled to unconditional leave to defend the suit. In the instant case, the contention raised by the petitioner – defendant clearly indicates that he has a good defence on merits and therefore the impugned order warrants interference by this Court. 12. Learned advocate for the respondent – plaintiff has also relied upon the decision of Greengold Timber Pvt. Ltd. Vs. Shipra Ocean Trade Pvt. Ltd., reported in 2008 (1) G.L.R. 251, wherein this Court on facts held that, “if the defendant has no defence or defence is illusory/sham/moonshine, the Court may grant conditional leave protecting interest of plaintiff”. In the facts of the present case, looking to the nature of the disputes raised by the petitioner – defendant, the impugned order cannot sustain. He has also relied upon decision of Defence Knitting Industries (P) Ltd. Vs. Jay Arts, reported in (2006) 8 SC 25, wherein the Hon'ble Apex Court has held that, “if the court is of the opinion that the case raises a triable SCA/6075/2008 8/8 JUDGMENT issue then leave to defend should ordinarily be granted unconditionally.” In the facts of the present case, the learned trial Judge committed error in passing the impugned order and it has resulted into grave injustice to the petitioner – defendant, and therefore, impugned order is required to be quashed and set aside and the petitioner – defendant is required to be granted unconditional leave to defend the suit. 13. In the result, this petition succeeds and the order dated 13-3-2008 passed by learned Auxiliary Chamber Judge, Court No.8, City Civil Court, Ahmedabad below Summons for Judgment Exh. 10 in Summary Suit No.714 of 2007 is quashed and set aside and the petitioner – defendant is granted unconditional leave to defend the suit. The petitioner – defendant shall file written statement within 10 weeks from today. Rule is made absolute, with no order as to costs. (Bankim N. Mehta, J.) /JVSatwara/