1 IN THE HIGH COURT OF JDICATURE AT BOMBAY ORDINARY ORIGINA CIVIL JURISDICTION SUMMONS FOR JUDGMENT NO.207 OF 2008 IN SUMMARY SUIT NO. 638 OF 2008 M/s Hazel Mercantile Ltd. ......Plaintiff V. Lakhani Group of Industries & others ......Defendants Mr.Vivek Kantawala i/b M/s Vivek Kantawala & Co. for the plaintiff Mr. Vineet Bajaj for the defendant Nos. 1,2 & 4 CORAM : A.A. SAYED, J. DATE : 8TH JULY, 2009. P.C. 1 The above Summons for Judgment is taken out by the plaintiff praying for a judgment against the defendants for a sum of Rs. 34,70,868/- with further interest at the rate of 24% p.a. on the principal amount of Rs. 24,81,865/- from the date of filing of the suit till payment. 2 The case of the plaintiff is that they have supplied goods defendant No. 4 under purchase order dated 9-06-2006 placed by Defendant No. 1 through defendant Nos. 2 and 3. The said goods 2 are valued at Rs. 29,81,865/-. However, the defendants did not make payment within 15 days from the date of Lorry Receipt as per the terms mentioned in the purchase order. The goods were received and acknowledged by the defendants without raising any dispute of any nature as regards the quality and quantity thereof. The plaintiff has addressed a letter dated 09-06-2006 to the defendant No.4 demanding payment. On 18-08-2006 another letter was sent through E-mail to defendant No. 4. Thereafter a fax dated 3-10-2006 was also sent to defendant No. 2. As no payment was forthcoming further e-mail dated 14-11-2006 was sent to the Chairman of Defendant No.1. The defendant No.2 thereupon sent a e-mail on 13-11-2004 to the plaintiff and stated that due to some temporary problem their bank transactions were held up and assured that a sum of Rs. 5 lacs would be released around 15-12-2006. The plaintiff sent a reply on 15-12-2006 to the defendant no.2 to release the funds expeditiously. On 4-12-2006 the General Manager (Purchase) of defendant No. 1, forwarded an e-mail dated 2-12-2006 to the plaintiff and promised to pay Rs. 5 lacs on or before 10-12-2006. Upon receipt of Rs. 5 lacs, the plaintiff on or about 20-02-2007, while acknowledging receipt of Rs. 5 lacs, called upon the defendants to make payment of the balance amount. Another reminder was also sent by the plaintiff to the defendants on 18-04-2007. 3 Since the defendants failed and neglected to pay the balance amount, the plaintiff issued a demand notice dated 23-06-2007 through their Advocate calling upon them to pay the balance amount of Rs. 24,81865/- alongwith interest @ 24% per annum. The 3 defendants have replied to the Advocate's notice and sought time to take payment. Thereafter the plaintiff has addressed letters dated 30-10-2007 and 5-11-2007 recording the meetings which took place between their representatives and defendants and their promise to issue post dated cheques and their request to await the resolution of disputes between their partners interse. 4 The plaintiff has in their rejoinder annexed a letter dated 18-08-2006 of one Amar Transport Company stating that the goods in question were delivered to M/s Lakhani at Bhiwandi. 5 The learned counsel for the plaintiff took me though the entire correspondence between the parties which is annexed to the plaint, and submitted that the claim of the plaintiff is clearly admitted and there are no triable issues raised in the matter and therefore the Summons for Judgment may be made absolute by passing a decree against the defendants as prayed. 6 The Summons for Judgment has been opposed by the defendants by filing a reply on behalf of the defendants 1,2, and 4. The case of the defendants in their reply is that the plaintiff has not placed on record any documents to prove the delivery of the goods, or delivery challan, or lorry receipts. The suit suffers for want of territorial jurisdiction inasmuch as the goods were supplied from Kochin to Rajasthan and purchase order was placed upon the plaintiff at Kochin and that the plaintiff cannot take benefit of obtaining leave under clause XII of Letters Patent. It is further 4 stated in the reply that there is no invoice or delivery challans or lorry receipts to establish that the plaintiff has sold supplied and deliver any goods to the defendant No.4. It is further pointed out that Lakhani Group has undergone process of partition and division has taken place and defendant No.1 is no more in existence. It is further stated that correspondence relied upon the plaintiff has to pass the test of evidence as the documents exhibited by the plaintiff are not admissible in evidence. It is further stated that there is no contractual or statutory obligation to pay interest at the rate of 24% p.a. 7 The learned counsel for the defendant Nos. 1, 2 and 4 relied upon the case of Mrs. Raj Duggal V. Ramesh Kumar Bansal, reported in AIR 1990 S.C. 2218, wherein in paragraph 3 of the judgment it has been observed by the Apex Court as under: " Leave is declined where the Court is of the opinion that the grant of leave would merely enable the defendants to prolong the litigation by raising untenable and frivolous defenses. The test is to see whether the defence raises a real issue and not a sham one, in the sense that if the facts alleged by the defendant are established there would be a good or even a plausible defence on those facts. If the Court is satisfied about that leave must be given. If there is a triable issue in the sense that there is a fair dispute to be tried as to the meaning of a document on which the claim is based on uncertainty as to the amount actually due or where the alleged facts are of such a nature as to entitle the defendant to interrogate the plaintiff or to cross-examine his witnesses, leave should not be denied. Where also, the defendant shows that even on a fair probability he has a bonafide defence, he ought to have leave. 5 Summary judgments under Order 37 should not be granted where serious conflicts as to matter of fact or where any difficulty on issues as to law arises. The Court should not reject the defence of the defendant merely because of its inherent implausibility or its inconsistency." 8 The learned Counsel urged that since the defendants have raised bonafide dispute and triable issues are involved, the defendants be granted unconditional leave to defend the suit and the Summons for Judgment be dismissed. 9 I have heard the learned Counsel for the parties and perused the material on record. At the outset it would be necessary to advert to the correspondence between the parties which correspondence is annexed as exhibits to the plaint. The correspondence reveals that the plaintiff has repeatedly demanded payment and except a sum of Rs. 5 lacs paid by the defendants to the plaintiff, the balance amount has remained unpaid. 10 In the email/letter dated 13-11-06 of the defendants it is stated as follows: "....... In this connection please note that our Bank transaction are held up due to some temporary problem. We are very hopeful that our problems may get sorted out by December end and we have plans to release approx. Rs. 5 lac around 15th December, 2006 and regarding the balance payment we shall start releasing as soon as our Bank A/c. gets into operations. Kindly bear with us for the time being." 6 11 In the email/letter dated 2/4th December 2006 of the defendants it is stated thus: "This refers to your to your mail dated 15th November, 2006 regarding your outstanding payments. I am very thankful for the support you have extended during the tenure our bank accounts remain un- operational. As already informed, we are very hopeful that our bank A/c shall be in operation by end of this month. I believe your total outstanding is approx. Rs. 30.0 lacs out of which your Rs. 5.00 lacs shall be cleared before 10th of this month and regarding Rs.25.0 lacs we shall start issuing the cheque from 5th of January, 2007 and shall clear your total outstanding by end of January, 2007. We are extremely sorry what-ever inconvenience is being caused to you. At the same time I also assure that we are also looking for long lasting business relationship for you other items vis-a-vis EVA/PVC/EPOXY etc. and we can have open discussion in that regard once the above problems gets started out." 12 In the letter dated 24-07-07 addressed by the defendants to the plaintiff’s advocate’s notice it is stated as under: ".......Your client is well aware that our Group is undergoing the process of partition. Regular accounts of the group where he had credit facilities have been frozen and till date these accounts are not in operation. We are in the process of settlement and expect to resolve the dispute very soon. We assure you that as soon as our complete settlement take place, we will make the payment immediately. 7 We would, in view of the above, request you to bear with us some more time." 13 A bare perusal of the contents of the above letters clearly reveals that the defendants have acknowledged their liability. In the Affidavit in Reply of the defendants the correspondence has not been disputed. It is merely stated that the documents exhibited by the plaintiff has to pass the test of evidence and are not perse admissible in evidence. It is however true that except for the purchase order dated 09-06-06 and the letter dated 18-08-06 addressed by one Amar Transport Company to the plaintiff (annexed to the Rejoinder of the plaintiff), which states that the goods in question were delivered to the defendants on 14-06-06 quoting the Lorry Receipt Nos. etc., no invoices or delivery challans have been relied upon by the plaintiff in their pleadings. There is also nothing on record to indicate that interest @ 24% p.a. was agreed to be paid on delayed payments. 14 Considering the facts and circumstances of the case, in my view, the suit is maintainable under Order 37. Prima facie, the correspondence between the parties, clearly establishes the liability of the defendants and the defendants cannot escape from the admissions made by them. It is evident from the correspondence that the defendant-company was undergoing some problems on account of the disputes between the partners/directors and that the bank account of the defendant company was frozen and the defendants have made part payment of Rs. 5 lacs and time and again assured the plaintiff to 8 make payment of the balance amount. The plaintiff has been granted leave under clause XII of the Letters Patent and there appears to be no application made by the defendants to revoke the leave granted by this Court. In my view, therefore, no substantial defence has been raised by the defendants. However, in the facts and circumstances of the case, I am not inclined to shut out the defendants completely from defending the suit. 15 Taking an overall view of the matter, in my opinion, the following order would meet the ends of justice; (i) The defendants are granted leave to defend the suit conditional upon their depositing in this Court a sum of Rs. 15,00,000/- within 12 weeks. (ii) In the event the defendants deposit the aforesaid amount, the suit to stand transferred to the list of suits of commercial causes; (iii) The plaintiff is permitted to withdraw an amount of Rs. 7,50,000/- from the aforesaid deposit upon their furnishing appropriate security to the satisfaction of the Ld. Prothonotary and Senior Master. The balance amount shall be deposited by the Ld. Prothonotary & Senior Master in a term deposit of a Nationalised Bank. (iv) The defendants to file Written Statement within 30 days from the date of the aforesaid deposit being made. Affidavit of Documents within 8 weeks thereafter. Discovery and Inspection within 10weeks therefrom; (v) In the event the defendants fail to deposit the aforesaid 9 amount, liberty to the plaintiff to apply for further orders. 16 The Summons for Judgment to stand disposed of accordingly. (A.A. SAYED J)