1 sj41.10.sxw IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUMMONS FOR JUDGMENT NO. 41 OF 2010 IN SUMMARY SUIT NO. 2778 OF 2009 Satchi Development Company Pvt. Ltd. A Company duly registered under the Companies Act, 1956 having their Addres at B-2, Shangri-La Apartments, St. Mary Colony, Miramar, Panjim, Goa. .....Plaintiffs. Vs. 1 Karishma Mahtani @ Vijayalakshmi Shyamsunder Advani, Presently having her address at 22/1, Skyscraper Building A, Breach Candy, Bhulabhai Desai Road, Mumbai-400 026. 2 Kalawati Advani, of Mumbai Indian Inhabitant having an address at 22/1, Skyscraper Building A, Breach Candy, Bhulabhai Desai Road, Mumbai-400 026. .....Defendants. Mr. Karl Shroff with Mr. C.D. Abuwala i/by M/s. Dave & Co. for the Plaintiffs. Ms. Anita Castelino with Mrs. A. Lambey and Mr. Vikas Singh i/by M/s. Lambey & Co. for Defendant No.1 Mr. Y.E. Divekar i/by M/s. Divekar and Co. for Defendant No.2. CORAM : ANOOP V. MOHTA, J. JUDGMENT RESERVED ON : 7 JULY, 2011. 2 sj41.10.sxw JUDGMENT PRONOUNCED ON : 19 JULY, 2011. JUDGMENT:- A Summons for Judgment is taken out by the Plaintiffs through its nominal Director, which is basically the company of the son of Defendant No.2 and brother of Defendant No.1, in a suit for recovery of ` 3,70,20,410/- with future interest, against Defendant No.1, based upon the alleged agreement for Project Management, Construction, Development and Finance dated 21 April 2003 (The Agreement). 2 The Plaintiffs’ one of the Director Indresh Advani (Indresh) and Defendant No.2, the mother of Defendant No.1 and Indresh were the beneficiaries of equal shares in the estate of deceased Shamsunder T. Advani (the father) of Defendant No.1 and Indresh, under the last Will and testament dated 13 May 2001. 3 The piece and parcel of land admeasuring about 862 sq. yards together with the bungalow and outhouse standing thereon known as “Shamkala” situated at 95-I, Oomer Park, Breach Candy, Mumbai (the property) for which development, Defendant No.1, who resides in Nigeria by her General Power of Attorney dated 22 August 2002 to do 3 sj41.10.sxw all acts appointed Defendant No.2 as a constituted Attorney. 4 Indresh was appointed on 10 April 2003 as an Administrator in Testamentary Petition No. 819 of 2002 by the Bombay High Court, to administer the estate of the deceased in accordance with the last Will. Pursuance to the letter of Administration, Indresh and Defendant No.1 represented by her constituted Attorney Defendant No.2, executed as alleged, various documents. 5 The property as was in dilapidated condition, therefore they decided to repair and reconstruct and accordingly got the approval/ permission from the Municipal Corporation on 12 July 2002 and also obtained a Commencement Certificate dated 29 August 2002, on an application moved and filed by Defendant No.2. The agreement in question was signed by the Plaintiffs’ Director-Defendant No.1 through her constituted Attorney Defendant No.2 and also on her behalf as a confirming party, along with Indresh, by which they as alleged to have appointed the Plaintiffs to supervise the construction, finance, promote and to develop the property for sale, lease, rent or hire. Indresh was the Director of Plaintiffs Company. 4 sj41.10.sxw 6 The basic construction and development costs was incurred by all the parties. The Plaintiffs claim to have spent certain amounts during the period of four years on the project including purchase of construction material, architect fees etc. The lists and details are part of the record. The said property was sold on 14 June 2007 by the Defendants and Indresh for ` 42 Crores. The sale proceeds as per the Sale Deed were distributed as under:- a) Indresh Advani .. ` 18 Crores b) Kalawanti Advani (Defendant No.2) .. ` 12 Cores. c) Karishma Mehtani (Defendant No.1) .. ` 12 Crores. Indresh Advani got ` 6 crores more than others. 7 The Plaintiffs’ case is that in view of clause of the agreement their entitlement towards the expenses and Supervision/Commission charges is ` 2,62,50,000/- from Defendant No.1. As there was no payment made by Defendant No.1, therefore legal notice was issued on 21 August 2009. Defendant No.1 replied and resisted the same and even denied the existence of the agreement and alleged it to be false, fabricated and fictitious document, as admittedly, it was not 5 sj41.10.sxw signed by Defendant No.1. 8 This dispute, therefore, ultimately resulted into the present Summary Suit and Summons for Judgment, as Plaintiffs as a Company, is claiming the share against Defendant No.1 only and not claiming anything against the Indresh and Defendant No.2, who were also liable to make the payment, as per the agreement. 9 To the Affidavit in support of Summons for Judgment, Defendant No.1 has denied the averments by filing its reply dated 8 March 2011. Defendant No.2 has replied the Affidavit of Plaintiffs on 21 April 2011. The Plaintiffs have filed the rejoinders, also. 10 The basic purpose and object of order 37 of the Code of Civil Procedure (CPC) is reiterated as under by the Supreme Court in V.K. Enterprises and Anr. Vs. Shiva Steels 1 “10. Order 37 CPC has been included in the Code of Civil Procedure in order to allow a person, who has a clear and undisputed claim in respect of any monetary dues, to recover the dues quickly by a summary procedure instead of taking the long route of a regular suit. The courts have consistently held that if the affidavit filed by the defendant discloses a triable issue that is at least plausible, leave should be 1 (2010) 9 SCC 256 6 sj41.10.sxw granted, but when the defence raised appears to be moonshine and sham, unconditional leave to defend cannot be granted. 11. What is required to be examined for grant of leave is whether the defence taken in the application under Order 37 Rule 3 CPC makes out a case, which if established, would be a plausible defence in a regular suit. In matters relating to dishonour of cheques, the aforesaid principle becomes more relevant as the cheques are issued normally for liquidation of dues which are admitted.” 11 In Sunil Enterprises Vs. SBI Commercial and International Bank Limited 2 the Supreme Court has reiterated the following principles while dealing with such Summary Suits based upon the Mechelec Engineers and Manufacturers Vs. Basic Equipment Corporation 3 . Recently again in Fixity Packaging Industries Private Limited & Ors. Vs. Udyen Jain (HUF) 4 . Those are :- “(a) If the defendant satisfies the court that he has a good defence to the claim on merits, the defendant is entitled to unconditional leave to defend. (b) If the defendant raises a triable issue indicating that he has a fair or bona fide or reasonable defence, although not a possibly good defence, the defendant is entitled to unconditional leave to defend. (c) If the defendant discloses such facts as may be 2 (1998) 5 SCC 354 3 (1998) 4 SCC 687 4 (2009) 8 SCC 761 7 sj41.10.sxw deemed sufficient to entitle him to defend, that is, if the affidavit discloses that at the trial he may be able to establish a defence to the plaintiff’s claim, the court may impose conditions at the time of granting leave to defend – the conditions being as to time of trial or mode of trial but not as to payment into court or furnishing security. (d) If the defendant has no defence, or if the defence is sham or illusory or practically moonshine, the defendant is not entitled to leave to defend.” 12 In Fixity Packaging Industries Private Limited, (Supra) the Supreme Court has further elaborated the Scheme and thereby granted installments and extended the time to deposit as ordered by the Trial Court, while granting the conditional leave to defend in such Summary Suits, as under:- “15. We are not oblivious of the fact that ordinarily the conditions imposed for grant of leave to defend in a suit filed under Order 37 of the Code of Civil Procedure should not be unduly onerous when leave to defend is granted. The conditions imposed thereunder unsustainably should not be onerous. As a result whereof, the defendant would not be able to defend the action for all intent and purpose.” 13 In SIFY Limited Vs. First Flight Couriers Ltd. 5 the Supreme Court has reiterated that if a Single Judge has exercise its discretion 5 (2008) 4 SCC 246 8 sj41.10.sxw based upon the facts and circumstances and grants conditional leave to the Respondent to defend the Suit, when case is made out and as the order so passed was not arbitrary or unreasonable, it is not open to the Division Bench to interfere with the discretionary order of the Single Bench. 14 It is also observed in SIFY Limited (Supra) that the learned Judge needs to consider the pleadings in the Suit as well as the Application filed by the Respondent for leave to defend the Suit and/or the Summons for Judgment and reply affidavit to it before passing any order based upon the above principles. 15 The full bench of this Court in Jyotsna K. Valia Vs. T.S. Parekh & Co. 6 has observed as under- “28. Before answering the issue we must note that there must be the following requirements before a summary suit would lie:- (1) There must be a concluded contract; (2) The contract must be in writing; (3) The contract must contain an express or implied promise to pay. There is no dispute in respect of the first two 6 2007(3) Bom.C.R. 772 9 sj41.10.sxw predicates. The only issue is in respect of the third predicate. As we have noted earlier, we are not concerned here with an implied contract, but an implied term in a written contract. The defendants would be right to contend that an implied contract is not a written contract.” ...... “The issue before us is limited to an implied promise to pay. That would necessarily depend on the facts of each case. The two issues as formulated may now be answered.” 16 In S.P. Brothers Vs. Biren Ramesh Kadakia7, a Division Bench of this Court has recorded as under:- “9. It is a settled principle of law that before a plaintiff can bring a suit to be tried under the special summary procedure provided under Order 37 of the Code, it is obligatory on the part of the plaintiff to satisfy the Court that the suit as framed is not only maintainable under the provisions of Order 37 of the Code but no relief whatsoever have been claimed in the suit that are falling outside the ambit and scope of the said provision. Wherever such an objection is taken, which in fact has been taken in the present case, the law requires the plaintiff in a suit to show that taking the averments made in the plaint to be correct, the suit satisfies the ingredients of the special provisions. If the ingredients of Order 37 on the plain reading of the plaint are not satisfied, then plaintiff cannot claim any benefit of the summary procedure. Even on the plea of demur, the appellant is unable to demonstrate in the present case that suit squarely falls within the ambit of Order 37 and the reliefs claimed therein including the interest claim 7 2009(1) Bom. C.R. 453 10 sj41.10.sxw falls within the ambit and scope of the said provision.” 17 From all above, it is clear that the Court needs to consider the material placed on record by the Plaintiffs, as well as, by the Respondents defence before exercising its discretion to pass any order, under Order 37 of CPC in such Summary Suits. 18 Admittedly, agreement dated 21 April 2003 was not signed by Defendant No.1. Defendant No.2, confirming party, mother of Indresh Advani and Defendant No.1, based upon the disputed constituted power of attorney has signed the agreement. a) Indresh Adwani who was a party to the agreement in question, is not a party to this proceeding. He was the main Director of the Plaintiffs Company. He has not claimed his share/alleged liability based upon the Agreement, as per Clause 9, which is as follows:- “9. The total revenue arising out of the said premises sold/transferred in the entire project would be shared between the said owners and SDPCL in the ratio: 87.5% : 12.5% (SDPCL will receive 12.5%) Of the share of 87.5, half share amounting to 43.75% shall be paid to Mr. Indresh Shamsunder Advani and the other 43.75% shall be paid to Ms. 11 sj41.10.sxw Vijayalakshmi Advani now married and known as Karishma Suresh Mahatani.” Indresh and Defendant No.2 have received their respective shares. (b) The Plaintiffs have not placed on record the detailed expenses incurred for the construction and the fact of payment by the Defendants or owners in their respective capacity. The expenses so incurred and as demanded/claimed by the Plaintiffs itself is in dispute. (c) Defendant Nos. 1 and 2 have filed their detailed reply and denied the contents and correctness of the agreement. It is specifically averred by Defendant No.1 that the Indresh and his wife were the only Directors and share holders of the Plaintiffs company. An application to recall the grant of letter of administration is also filed and thereby, prayer is to recall the grant of letter of administration. There are clear averments made that the agreement is bogus, fabricated and false. (d) Apart from signature and authorization, three different copies of the documents are produced in the plaint, the probate proceedings and with letter dated 14 February 2009. One copy contains no signature of attesting witnesses. Other two copies show different 12 sj41.10.sxw signatures of attesting witnesses. (e) Indresh has claimed the expenses of renovation of his house at Goa, as of the property in question. (f) Defendant No.1 specifically contended, and which is not in serious dispute that she is staying at Logos, Nigeria and therefore, appointed Defendant No.2 as constituted Attorney by General Power of Attorney dated 22 August 2002, which nowhere provides and/or authorizes Defendant No.2 and/or anyone to sign such documents/agreement to share to the Plaintiff Company the alleged supervision charges and/or authority to repair or reconstruct or develop the property in question. (g) The positive averments are made that Defendant No.2 had obtained requisite permission for additional alteration from the Municipal Corporation, Mumbai. (h) Indresh for more than 46 years was carrying out his business at Goa with his family and visits his mother occasionally. 13 sj41.10.sxw (i) Defendant No.2 was in exclusive possession of the said property and was looking after and monitoring the construction/ development of the property. Defendant No.1 has even denied the payment made by the Plaintiffs to the labour contractor. (j) There was litigation even to stop the construction which was settled by the consent terms dated 24 August 2006, when a Memorandum of Understanding dated 15 March 2007 was executed, there was no such claim raised by the Plaintiffs. In totality, there is denial to the claim so raised by the Plaintiffs in all respect. (k) Though Defendant No. 2 is made party, but no reliefs are claimed against her. Therefore, the allegations so raised for and against Defendant No.2 revolving around the agreement between the parties who is relevant for the adjudication of the claim raised in the Suit, at this stage, are not sufficient to accept the case of the Plaintiffs to grant relief as prayed in Summons for Judgment. (l) Defendant No.2 has also resisted the case/claim of the Plaintiffs in all respect by supporting basically above contentions/averments made by Defendant No.1. It is also averred that Mr. Rajiv Kaskar, who 14 sj41.10.sxw has filed the present Suit, is the driver of Indresh and his wife. Though he was though concerned with Plaintiff No.1, the signatures are also different of Mr. Rajiv Kaskar who was also signatory as a witness to the basic agreement dated 21 April 2003. (m) Defendant No.2 also contended that documents are false, bogus and concocted. Defendant No. 2 also stated on oath that Defendant No.1 had never given any such power or authority to appoint the Plaintiffs to construct, re-construct, repair and/or alter the said property. (n) She had denied the various payments so alleged to have been made by the other parties. She has also contended that the Plaintiffs not produced four registered irrevocable power of Attorney that was required to be executed as alleged in paras 5,6,7 and 8 of the agreement. (o) Defendant No.2 has further elaborated and gave detailed reply to the correspondences, as well as, the pending cases upto date and thereby denied the claim of the Plaintiffs and pointed out the falsity in the contents of the documents so relied upon by the Plaintiffs in all 15 sj41.10.sxw respect apart from above, supporting grounds in favour of Defendant No.1. 19 The requisite requirements as elaborated above in various judgments to grant summons for judgment or to reject the leave to defend are missing in the present case. The Defendants have made out a case for unconditional leave to defend. It cannot be stated to be moonshine or sham or illusory. There was no concluded or crystalised/admitted claim or liability. Though the alleged agreement is referred and relief but it cannot be accepted as binding, as there are disputed questions raised about it’s validity and it’s execution itself. It was admittedly not signed by Defendant No.1 against whom basic decree is claimed. The Suit also suffers from non-joinder of party and related averments to restrict the claim only against Defendant No.1, though Defendant No.2 was also party to the same documents with Indresh Kumar, the brother of Defendant No.1 and the son of Defendant No.2. It is not acceptable, therefore, at this stage, based upon affidavits only that there was any express or implied admission to pay as claimed. I am inclined to exercise the discretion in favour of granting the unconditional leave to defend. 16 sj41.10.sxw 20 Therefore, taking all this into account and considering the facts and circumstances of the case and the relation between the parties and the law so laid down, I am satisfied that Defendant No.1 and 2 have good defence to the claims on merits and therefore, the Plaintiffs are not entitled to judgment and on the contrary, Defendant No.1 and 2 are entitled to unconditional leave to defend. The written statement to be filed within a period of 4 weeks. 21 The summons for Judgment is accordingly disposed of with no order as to costs. (ANOOP V. MOHTA, J.)