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Bombay Enamel Works Vs. Purshottam S. Somaiya - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai High Court
Decided On
Case NumberAppeal No. 281 of 1969
Judge
Reported inAIR1975Bom128; (1974)76BOMLR580; 1974MhLJ947
ActsCode of Civil Procedure (CPC), 1908 - Sections 107 and 148 - Order 37, Rules 2 and 3; Bombay City Civil Court Act, 1948 - Sections 9
AppellantBombay Enamel Works
RespondentPurshottam S. Somaiya
Appellant AdvocateL.G. Khare, Adv.
Respondent AdvocateM.G. Kikla, Adv.
Excerpt:
a) it was adjudged under order 37, rules 2 and 3 of the civil procedure code, 1908 as the conditional leave to defend was granted in a summary suit , hence, mere inability to pay the deposit ordered by the court would not be a ground for extension of time to fulfill the condition of the deposit ;b) the case questioned whether the propriety of an interlocutory or the interim order could be challenged in the first appeal when in a summary suit, the leave to defend was granted conditionally - in view to it, no revision was filed - so where an appeal was raised from the decree, the defendant could raise the contention that he should have been granted an unconditional leave to defend the suit - hence, it was held that the propriety of the said order could be challenged in the first appeal;c).....mukhi, j. 1. this is an appeal filed by the original defendants against the decree passed against them by the judge of the city civil court, bombay, in summary suit no. 8471 of 1968. 2. it is necessary to notice the relevant facts and circumstances in order to decide the contentions raised in this appeal. the respondent. purshottam s. somaiya (who will hereinafter be referred to as the plaintiff) filed summary suit no. 8471 of 1968 against the appellants the bombay enamel works a firm carrying on business at ravi industries compound. agra road. thana, (who will hereinafter be referred to as 'the defendants'). the said suit was a summary suit under o. 37 of the code of civil procedure, 1908, as amended by the bombay high court and was based on 5 hundies executed by the defendants under the.....
Judgment:

Mukhi, J.

1. This is an appeal filed by the original defendants against the decree passed against them by the Judge of the City Civil Court, Bombay, in Summary Suit No. 8471 of 1968.

2. It is necessary to notice the relevant facts and circumstances in order to decide the contentions raised in this appeal. The respondent. Purshottam S. Somaiya (who will hereinafter be referred to as the plaintiff) filed Summary Suit No. 8471 of 1968 against the appellants the Bombay Enamel Works a firm carrying on business at Ravi Industries Compound. Agra Road. Thana, (who will hereinafter be referred to as 'the Defendants'). The said suit was a summary suit under O. 37 of the Code of Civil procedure, 1908, as amended by the Bombay High Court and was based on 5 Hundies executed by the defendants under the signature of one of their partners Champsinh Narsinh Vaidya. The total claim was for Rupees 11,500/- with interest thereon as prayed. The summary suit was filed on 7th December 1968 and the defendants were duly served. On 14th January 1969 the summons for judgment was taken out by the plaintiff and on 5th February 1969 an affidavit in reply to the said summons for judgment was sworn and filed by the said Champsinh Narsinh Vaidya as the partner of the defendants. The summons for judgment came up for hearing on the 6th of February 1969 when His Honour Judge, Rege. (as he then was) after taking the affidavits in reply and rejoinder on file passed the following order:

'On the defendants depositing in Court Rupees 7,500 within ten (10) weeks leave to defend grated. On such deposit being made the suit be transferred to the List of Long Causes. Written Statement within 4 weeks thereafter. Usual order for Discovery and Inspection.

Hundies dated 22nd November 1967 to be retained on the file'.

3. It requires to be noticed that the substantial time of 10 weeks given to the defendants for making the deposit, as directed, was to expire on the 17th April 1969. The defendants did nt make the deposit but took out a Chamber Summons which bears no date. It is however stated at the foot thereof that the affidavit of Shri Jayant C. Vaidaya, solemnly affirmed on 10th day of April 1969 would be used in support of the Chamber Summons. This Chamber Summons appears to have been registered on the 12th of April and was made returnable on the 17th of April 1969. It is not disputed that the Chamber Summons was not immediately served upon the Advocate for the Plaintiff but the Defendant's Advocate one V. R. Tripathi appears attempted to sere the Chamber Summons on the Plaintiff's Advocate in Court on the 15th of April. The said Advocate pointed out that the service would be short and he could not accept the same. The defendant's Advocate Mr. V. R. Tripathi then went to the office of the plaintiff's Advocate and handed over a copy of the Chamber Summons and the affidavit in support to the receiving clerk of the plaintiff's Advocate. In this manner the Chamber Summons was sought to be served. When the matter came up on 17th of April it was naturally ordered to stand over for one week because there had been no proper service. On 24th April, 1969 the Chamber Summons came to be heard when the Advocates for both the parties were present and His Honour Judge S. K, Desai (as he then was) dismissed the same with no order as to costs.

4. As is the practice the same suit came up for disposal later in the day when Mr. Kikla for the plaintiff was present but the defendant's Advocate Tripathi, who had been earlier present at the hearing of the Chamber Summons, remained absent probably on instruction and the trial court passed the decree as prayed for after taking on record and exhibiting the Registrar's certificate as to the non-payment of the sum of Rs. 7,500/- (ordered to be deposited when leave to defend had been granted) and this certificate was marked as Ex. A. The 5 Hundies on which the suit was passed were marked as Ex. B. There was also an order of refund of 2/3 court-fees paid by the plaintiff. It may be stated that although Order 37, Rule 4 of the Civil P. C. contains a provision that after decree the court may under special circumstances set it aside no such application was made presumably because there was no special circumstances to warrant the making of such an application.

5. Thereafter this First Appeal k was filed and was admitted by a Single Judge on 28th April 1969. Mr. Khare, the learned Advocate for the defendants who are the appellants before us has urged that the learned Trial Judge ought to have allowed the Chamber Summons and time ought to have been extended in order to enable the defendants to fulfil the condition of deposit and avail of the leave to defend. Mr. Khare has secondly urged that in any event in view of the defence as disclosed in the affidavit in reply to Summons for judgment the defendants should have been granted unconditional leave to defend the suit. Mr. Khare contends that this being a first appeal from the decree passed by the City Civil Court the matter is at large and he is entitled to take up this contention also although he did nt file any revision application to the h against the conditional order made by His Honour Judge Rege (as he then was).

6. These then are the contentions urged on behalf of ht e defendants appellants and we shall proceed to consider them in relation to the material on record.

7. Before we do that, however it would be appropriate to notice the state of the law as regards the filing of summary suits and Order 37 (as amended by the Bombay High Court) and to notice the discretion available to the trial Judge and the circumstances which would warrants interference in appeal.

8. Reference may be made to Milkhiram India Private Ltd. v. Chimanram Brothers, : AIR1965SC1698 , in which the Supreme Court referred to an earlier decision of that court in Santosh Kumar v. Bhai Moolsingh, : [1958]1SCR1211 and to the observations of Bose, J. which were in the following words:

'Taken by and large, the object is to see that the defendant does not unnecessarily prolong the litigation and prevent the plaintiff from obtaining an early decree by raising untenable and frivolous defences in a class of cases where speedy decisions are desirable in the interest of trade and commerce. In general, therefore, the test is to see whether the defence raise 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 these facts'.

In the same case the Supreme Court also said:

If upon consideration of material placed before it the court comes to the conclusion that the defence is a sham one or is fantastic or highly improbable it would be justified in putting the defendant upon terms before granting leave to defend. Even when a defence is plausible but is improbable the Court would be justified in coming to the conclusion that the issue is not a treble issue and put the defendant on terms while granting leave to defend. To hold otherwise would make it impossible to give effect to the provisions of O. 37 which have been enacted, as rightly pointed out by Bose, J., to ensure speedy decision in cases of certain types. It will be seen that Order 37, Rule 2 is applicable to what may be compendiously described as commercial causes. Trading and commercial operations are liable to be seriously impeded if in particular, money disputes between the parties are not adjudicated upon expeditiously. It is these consideration which have to be borne in mind for the purpose of deciding whether leave to defend should be given or withheld and if given should be subject to a condition'. The Supreme Court then went on to make further observations in the following words: 'It is indeed not easy to say in many cases whether the defence is a genuine one or not and, therefore, it should be left to the discretion of the trial Judge who has experience of such matters both at the Bar and the bench to from his own tentative conclusion about the quality or nature of the defence and determine the conditions upon which leave to defend may be granted. It the Judge is of opinion that the case raise a triable issue, then leave should ordinarily be granted unconditionally. On the other hand, if he is of opinion that the defence raised is frivolous, or false, or sham, he should refuse leave to defend altogether. Unfortunately, however, the majority of cases canto be dealt with in a clear cut way like this and the Judge may entertain a genuine doubt on the question as to whether the defence is genuine or sham or in other words whether it raises a triable issues or not. It is to meet such cases that the amendment to Order 37, Rule 2 made by the Bombay High Court contemplates that even in cases where an apparently triable issue is raised the Judged may impose condition in granting leaved to defend. Thus this is a matter in discretion of the trial Judge and in dealing with it, he ought to exercise his discretion judiciously. Care must be taken to see that the object of the rule to assist the expeditious disposal of commercial causes to which the order applies, is not defeated. Care must also be taken to see that real and genuine triable issues are nt shut out by unduly serve order ass to despot. In a matter of this kind, it would be undesirable and inexpedient to lay down any rule of general application'.

9. These observations of the Supreme Court clearly set out the manner in which the discretion is to be exercised by the trial Judge hearing the summons for judgment and the application for leave to defend in a summary suit.

10. Although the main point in the appeal before us centers round the order dated 24th April 1969 whereby the chamber summons taken out by the defendants was dismissed and the learned Judged of the City Civil Court declined to extent the time for making the deposit as directed by the Court by its earlier order on the summons for judgment dated 6th February, 1969, we have referred to the state of the law as to the grant of leave to defend the summary suit, because Mr. Khare has contended that in this first appeal he is also entitled to challenge the order of 6th February, 1969 whereby conditional leave to defend was given. Even though the defendants did not file any revision application against that order dated 6th February, 1969 we shall deal with this aspect of the case at a later stage and we shall now consider the contention of Mr. Khare that the trial court ought to have extended the time for deposit of the sum of Rs. 7,500/- when the leave to defend was granted to the defendants Mr. Khare has invited our attention to the affidavit filed by the defendants in support of the Chamber Summons dated 12th April, 1969 and is made by one J. C. Vaidya another partner of the defendant's firm who curiously describes himself as the third defendant in the suit although the suit as filed had imploded only the defendants firm as the sole defendant. If the Chamber Summons is itself looked into it will be found that the title shows the plaintiff purshottam Somaiya residing at some address in mailed West, whereas the plaintiff has stated in his plaint d that he resides at Wassanji Nandji House, Raj Vadkar Road, Colaba, Bombay- 5. Again the title of the Chamber Summons shows Champsinh Vaidya as the second defendant and J. C. Vaidya, (who is his son) as the third defendant. The Advocate for the plaintiff has pointed out that these two partners had never been imploded separately in the suit as filed by the plaintiff. This curious thing has happened because there are a number of suits against the defendants in which probably the two partners to the defendants firm were separately being imploded and in which probably one of the plaintiffs had his address at Malad, West. But this affidavit is obviously an affidavit filed by one of the partners of the defendant firm by one of the partners of the defendant firm and will have to be looked into. Mr. Khare contends that this affidavit shows that the defendants were in difficulties because they had various payment to make under several decree against them as enumerated and that, therefore, they had made out a case for extension of time. In para 3 of this affidavit Jayant C. Vaidaya, a partner of the defendants firm, has stated that the time to deposit the sum of Rs. 7,500 directed by the court was to expire on 17th April 1969 and ' the defendants could not make any arrangement for certain financial difficulties. The defendants, therefore, appeal to this Hon'ble Court for the necessary extension of time to make the said deposit'. The dependent then goes on to say that the defendants were involved in some other suits and k were required to make several payments immediately against their liabilities and then the payments required to be made against various decrees and in various suits are shown. This affidavit shows that there were at least a dozen suits, decrees and execution proceedings pending at that time against the defendants. Now all the this affidavit really states is that the defendants were in financial difficulties. Mr. Kikla, the learned Advocate for the plaintiff has pointed out that there is no reference in this affidavit ass to the assets and income of the defendants. In other words, it is impossible for the court on the basis of the affidavit alone to arrive at a conclusion that the defendants were unable to make the deposit of Rs. 7,500/- as directed by the court. There is no mention of the assets of the firm or the assets of the two partners, and what is the inflow of moneys into the defendants' firm from various sources. As Mr. Kikla rightly pointed out, the defendants; firm a is a manufacturing concern and they have a factory where Enamelware is manufactured so that this manufacturing concern must be presumed to have stocks sales and inflow of moneys from such sales. For all that the court knows the defendant may also be having a bank balance and even overdraft facilities. Nothing is stated as to assets but only a bald statements made purporting to show their inability to deposit the amount of Rs. 7,500/-, Mr. Kikla has pointed out that the affidavit does not in any manner show that there were any unforeseen circumstances whereby the defendant's calculations to arrange the necessary finance for making the deposit of Rupees 7,500/- could have gone wrong. In other words it is contended by Mr. Kikla, and in our view, this contention has considerable force, that no case of inability on the part of the defendants to make the deposit of Rs. 7,500/- in court (and thus avail of the leave to defend the suit) has been even prima facie made out.

11. Mr. Kikla, the learned Advocate for the plaintiff has also pointed out that in this very suit an application for attachment before judgment been made by the plaintiff and in reply there to Champsinh Vaidya,. Partner of the defendants firm filed an affidavit dated 16th December, 1968 in which he denied that any case had been made out for a grant of attachment before judgment of certain stock of Titanuum Dioxide which was then with the defendants. The said Champsinh then stated 'I say that the defendants have considerable assets and the two partners of the defendants are substantial parties to meet any legitimate claim of the plaintiff if proved'.

12. It is obvious that while on the one hand the defendant were contending that they were substantial parties and were in such a position that they were able to pay their debts as and when they arose, in the affidavit in support of Chamber Summons for extension of time they took up a plea which was the exact opposite i.e. of inability to make the deposit of Rs. 7,500/-.

13. We are afraid it is difficult for us to accept the contention of Mr. Khare, that because of a number of payment which the defendants had to make against certain suits and decree, they, the defendants, were really unable to make the deposit of Rupees 7,500/- within 10 weeks granted to them by the Court. As we have stated, without details of the corresponding income and assets of the defendants, the court could not arrive at the conclusions suggested by Mr. Khare that the defendants were in difficulties and unable to pay. As a matter of fact, it is to be noticed that after the appeal had been admitted by this Court on the 20th of April, 1969 the defendants applied for stay and were granted interim stay of execution of the decree on an undertaking to deposit Rupees 7,500/- within two weeks and its deposit was accordingly made. We are therefore of the opinion that even on an indulgent reading of the affidavit in support of the Chamber Summons the defendants failed to show that they were unable to make the deposit.

14. No we shall assume for the purpose of argument that the defendants had by their affidavit in support of Chamber Summons demonstrated their inability to pay. We asked Mr. Khare to show to us how mere inability to pay the deposit ordered by the Court entitled the defendants to extension of time. It is to be noticed that by the Chamber Summons the defendants asked for extension of time from 17th April, 1969 to 17th June, 1969 that is to say, after the summer vacation. Mr. Khare is unable to place any argument before us or to invite our attention to any authority which lays down that mere inability to pay is a ground for extension of time.

15. In this view of the matter, we are of the opinion that the learned trial Judge was right in dismissing the Chamber Summons, by which the time for making the deposit was sought to be extended by a further 8 weeks in addition to the 10 weeks which had already elapsed. It is to be noticed that the order dismissing the Chamber Summons is dated 24th April, 1969 by which time more than 11 weeks had passed. Mr. Khare has contended that the learned Trial Judge ought to have given some time at least but when asked whether any application was made that the time should k be extended at least for a day after the date of the hearing of the Chamber Summons he admitted that no such applications was made. In these circumstances we are unable to accept Mr. Khare's contention that the learned trial Judge had wrongly exercised his discretion in dismissing the Chamber Summons for extension of time.

16. We have not as yet referred to the nature of defense which was taken up in the defendant's affidavit in reply to the summons for judgment and we shall presently consider that aspect while dealing with Mr. Khare's contention that the trial court should have granted unconditional leave to defend and should not have directed that Rs. 7,500/- be deposited by the defendants as a condition for granting of the leave to defend.

17. Now it is to be noticed that when the conditional order for granting leave to defend was passed on 6th February, 1969 the defendants accepted the order and did not seek to challenge it by filing a revision application in the High Court, a course which was clearly available to them. Mr. Khare, however, contends that as this is a first appeal he is appeal he is entitled to take up this contention namely that the learned trial Judge ought to have granted defendants unconditional leave to defend. He referred to a Calcutta judgment which he said supported his contention but did not actually cite or read it out to us. It would appear that the Calcutta judgment referred to by Mr. Khare is a judgment reported in ILR (1955) 1 Cal 299 and although the authority is not before us it would appear that it is laid down in this judgment that although no appeal may lie from an order refusing leave to defend the propriety of the order can be canvassed in the appeal from the decree. Broadly speaking it would appear to us to be a correct proposition of law that in a first appeal the propriety of any interlocutory or interim order made during the proceedings in the trial court could be challenged.

18. In this view we shall deal with Mr. Khare's contention that on the defence as contained in the affidavit of reply to the summons of judgment the City Civil Court ought to have granted unconditional leave to defend. Let us, therefore, see what is the nature and content of the alleged defence as set out.

19. As earlier discussed by us the plaintiff's suit is founded on 5 Hundies and they fall into three categories. The first 2 Hundies of Rs.2,500/- each are dated 22nd February, 1968 and both are signed by Champsinh Vaidya as partner of the defendant firm. It is to be noticed that on 6th May, 1968 a notice of demand was sent by the plaintiff's advocate by registered acknowledgment due post in respect of these 2 Hundies but no reply was received . The suit was thereafter filed and the summons for judgment taken out. The defendants in their affidavit in reply took up the plea that these 2 Hundies of 22nd February, 1969 were not executed for any cash consideration but were in renewal of 2 earlier Hundies dated 22nd November, 1967. This is what they said 'The defendants being in need of money approached to the plaintiff on 22.11.1967 and requested him to lend and advance to the Defendants sum of Rs. 5,000/- for their business purpose. Defendants got the loan of Rs.5,000/- from the plaintiff on the same date and executed two hundies of Rs.2,500/- each in favour of the plaintiff. Hereto annexed the copies of the said hundies and marked as Exhibit 1. (Colly). I rely on the said hundies whenever produced . I say that as the financial condition of the Defendants was not sound, they requested the plaintiff to renew the said two hundies and consequently the hundies were renewed on 22.2/1968. It is not true that the defendants were paid any money on 22.2.1968. Defendants state that the claim of the plaintiff has arisen on the original hundies and not on the present hundies. No considerations was advanced to the Defendants on the day when the present hundies were renewed ..........'

20. A further defence in relation to these two hundies was sought to be raised in the same para 3 of the affidavit in reply to which we have already referred. This defence was that the defendants had taken a loan of Rs.7,500/- from one Shri Pathak and out of this amount paid back a sum of Rupees 5,000/- towards the principal amount due to the plaintiff as also Rs.450/- towards interest, and this payment is supposed to have been made on the 2nd of July. There is, therefore, the alleged defence of having discharged the debt but curiously enough the defendants did not take back the hundies from the plaintiff duly discharged or put it on record that the debt had been paid up. It is only after the filing of the suit and as late as 5th February, 1969 that in relation to these 2 hundies the story is put forward that these two hundies were issued not against cash received, but where as and by way of renewal of the previous bundies of 22nd November, 1967.

21. It is appropriate to state at this stage that on 6th February, 1969 when his Honour, Judge Rege (as he then was) made the conditional order of deposit, the two hundies dated 22nd November, 1967 were produced in original and inspected by the Court and it was discovered that although the hundies were said been executed on 22nd November, 1967 the hundies stamp papers on which they are executed are both marked on the reverse as having been issued by the General Stamp Office only on the 13th January, 1968. This somewhat starting discovery prima facie shows that there was something wrong about these hundies and the learned trial Judge ordered that these two hundies be impounded and retained on the file. There is no dispute that these hundies bore the signature of Champsinh N. Vaidya as a partner of the defendants i.e. Bombay Enamel Works. As a matter of fact it is significant that on one of them there are initials against an alteration of a typed date, that is to say the due date appears to have been wrongly typed as 22.12.1967 whereas it was to be 22.12.1967 and the figure 12 by changing the last digit from '1' to '2' and initials of Champsinh N. Vaidya appear to have been placed threat. It will have to be investigated if these initials are the initials of Champsinh Narsinh Vaidya.

22. Now it is obvious that if it was true that the two hundies dated the 22nd February, 1968 were by way of renewal of the 2 alleged hundies of 22nd November, 1967 then nothing prevented the defendants from saying so in reply to the notice of demand sent to them on the 6th May, 1968 by the Advocate for the plaintiff. Now there can be no doubt that this aspect of the matter covers the defence with a certain amount of justifiable suspicion

23. The second category of hundies consists of one hundies of Rs.2,500/- dated 1st February 1968 and executed by the defendants under the signature of both the partners of the defendant firm in favour of one Shri H.N. Chakravarti of Bandra (East). This hundi has been endorsed in favour of the plaintiff but it is to be noticed that before the endorsement the said Chakravarti by his the endorsement the said Chakravarti by his Advocate's notice also dated 6th May,. 1968 and also sent by the same Advocate, called upon the defendants again chose not to reply. The defence as now taken with regard to this hundi is that this hundi was also a renewal hundi and that the plaintiff was not the holder in due course because the hundi was negotiated after its maturity date and a curious defence is taken that the negotiation was without consideration. Mr. Kikla at once pointed out that the plaintiff did not claim to be a holder in due course but relied on Section 59 of the Negotiable Instruments Act by reason of which provision of law he was the holder of a negotiable instrument acquired after dishonor and that he had the right thereon of his transferor. Mr. Kikla has also pointed out that renewal is a good consideration and that the defendants had admitted having taken the loan of Rs. 2,500/- from Shri H.N. Chakravarti on 9th August, 1967 and that the hundi dated 1st February 1968 on which the plaintiff had sued was executed as and by way of renewal of the earlier hundi.

24. This takes us to the third category of hundies which consist of two hundies of 2,500/- executed by the defendants in favour of one laxmibai in relation to which also a similar defence was sought to be taken by the defendants namely that the plaintiff was not a holder in due course. There is also a somewhat half hearted defence that in one of the hundies the word 'order' is not used and, therefore, the said hundi is not negotiable. There is also some kind of defence that the date of endorsement is not shown and according to the defendant this is a fatal defect. These contentions are specifically met by Mr. Kikla by referring to Section 13 and Section 108 of the negotiable Instruments Act to show firstly that only negotiability is barred, that the mere non user of the word 'order' would not have any legal effect and that under Section 118, which contains special rules of evidence, there are presumptions which must be given effect to unless there is an element of fraud. It is to be noticed that in the affidavit in reply fraud has not been alleged, Mr. Khare, sought to suggest that he could have taken up the plea of fraud if he was allowed to file a written statement. Such a contention, in our view, deserves no comment

25. We may mention that in relation to hounds executed in favour of laxmibai there is a further but very improbable defence taken that although 2 hundies each of Rs. 2,000 were executed in favour of Laxmibai as far back as 12th July, 1965 only a sum of Rs. 2,000/- was in fact received. It is suggested that these 2 hundies were obtained through an agent of the defendants one Waghji Ralen who had arranged for the loan and that these 2 hundies were renewed from time to time. But in so far as hundies dated 27th May, 1968 are concerned the defendants' partner surprisingly says 'I deny that I executed any hundi on 27.5.1968.' The explanation for this startling statement is that what defendants partner is saying is that these hundies were executed without his specific knowledge in so far as he had signed bland hundies and given them to Waghji Ralen who was in the habit of filling them up. Inn our view this is not a convincing explanation at all and the approach of the defendants in saying that they deny knowledge of the execution of any hundies on 27.5.1968 is clearly dishonest.

26. We have gone through the entire defence on which the defendants had based their claim for unconditional leave to defend and we do not find it difficult to come to the conclusion that the defence, in the words of the Supreme Court is a sham one.

27. Nevertheless, it is to be noticed that the learned trial Judge was pleased to grant conditional leave to defend on the deposit of a sum of Rs.7,500 which represented only a part of the amount claimed by the plaintiff. Now clearly this was a matter left to the discretion of the trial Judge who had considerable experience of such matters and in this particular case before us it would appear that although the defence appears to be false or sham or at any rate extremely improbable the learned trial Judge seems to have entertained a genuine doubt so that he granted leave but, as it was open to him under Order 37, Rule 2 as amended by the Bombay High Court, he imposed a condition.

28. On these facts and circumstances it can never be said that the learned trial Judge had exercised his discretion improperly. As a matter of fact it would appear that he exercised his discretion some what in favour of the defendants by granting them leave and if the defendants had chosen to make a deposit of Rs. 7,500/- which they however failed to do there would have been an opportunity, available, to them to file a written statement, lead evidence, and try to convince the court on the basis of such evidence that their defence was true. But it appears to us substantially clear that on the material on record and in view of the special procedure provided for disposal of Summary suits no fault can be found with the order of the trial Judge giving conditional leave to defend. Mr. Khare's contention therefore that on the facts and circumstances of the case the learned trial Judge ought to have granted unconditional leave to defend to the defendants cannot be accepted.

29. Mr. Khare has also made a grievance of the fact that the court below had not given any reason for dismissing the Chamber Summons taken out by the defendants for extension of time to make the deposit of Rs. 7,500/-.

30. It is to be noticed that no appeal is provided against an order refusing extension of time and we have not been able to understand why it should have been necessary for the learned Judge who heard the Chamber Summons to give reasons for not giving further indulgence to the defendants. It is to be noticed that the defendants had been given an unusual long time of 10 whole weeks to make the deposit of only Rs.7,500/-. We should have thought than 4 to 5 weeks would ordinarily be sufficient for a person with a running business to produce such an amount. Nevertheless, 10 weeks were given but the deposit was not made. As we have set out above the ground shown in the affidavit in support of the Chamber Summon was that the defendants were in financial difficulties. This was clearly a suggestion which runs counter to the earlier affidavit filed by the defendants that they were substantial parties and were in a position to meet all just demands made against them. It can never be contended that an order of deposit made by a Court is not a just demand and if that is so, then on their own saying the defendants by filing their earlier affidavit had placed on record their statement that they were substantial parties and were able to meet such a demand. The affidavit in support of the Chamber Summons sets out only one amounts. It does not even refer to the inflow of income and the assets available with the defendants which could be converted into moneys for the purpose of making the deposit as ordered by the trial Court.

31. The enlargement of time by the court for making the deposit is a matter clearly within the discretion of the court and it has not been shown to us how and why it should be necessary for the court to give reasons for not permitting the enlargement Mr. Khare has not shown to us how it required in law that the trial court should have given reasons for dismissing the Chamber Summons and the application of the defendants for extension of time. As a matter of fact the relevant rules of the Bombay City Civil Courts dealing with Chamber work contain no provision under which it could be said that the Judge was required to give reasons for dismissing the Chamber Summons. It is of course true that reasons may be given and in some complex cases it may be desirable that short reasons are given.

32. This brings us to the contention of Mr. Khare that the learned trial Judge who made the conditional order granting leave to defend on deposit of Rs. 7,500/- should have given reasons for having made a conditional order. We may point out that this point was never taken at any stage of these proceedings. Even in the appeal before us the appeal memo does not even indirectly refer to this point. There is a general ground that the decree passed against the appellants is clearly bad in law and is not based on the principle of justice and equity. But even this point would not encompass the point now sought to be taken by Mr. Khare.

33. It is really not necessary therefore for us to consider this point but we may deal with it in so far as it is an important point of law.

34. Mr. Khare referred to a judgment of this court in Waman Vasudeo Wagh v. Pratapmal, 62 Bom LR 592 : AIR 1960 Bom 520 where a single Judge of this High Court (Mudholkar, J. as he then was) held that it was undoubtedly within the discretion of the court below to decide whether the defendants should be given unconditional leave to defend or whether the leave should be made conditional upon depositing a certain amount of money in the court.

35. The learned Judge then observed: '.........but the order of the court is open to revision by this court. In order to enable this court to consider whether the court below raised before it while making an order of this kind, it is essential that the order on the face of it, must show that the court had done so. This is only possible if the court gives is reasons for passing the particular order.' The learned judge then went on to state that while it was true that the court below had been given discretion to grant or not to grant leave to defend a summary suit the superior court would not lightly interfere with the exercise of such discretion. However in order to enable the superior Court to discharge its duty it must know the reasons which led the Court below to exercise its discretion in a particular manner.

36. It is now necessary to refer to another judgment of this High Court in Amrit Banaspati Co. Ltd. v. M/s. J. C. Engineer & Co. : (1961)63BOMLR568 where another single Judge of this Court (Patel, J.) dealt with the same question i.e. whether the Bombay City Civil Court was bound to give reasons in support of the discretion exercised by it on the question whether unconditional or conditional leave to defend be given. The learned Single Judge referred to Section 9 of the Bombay City Civil Court act, 1948 which reads as follows: Save as otherwise provided in this Act all questions which arise in suits or other proceedings under this Act in the City Court shall be dealt and determined according to the law for the time being administered by the High Court in the exercise of its ordinary original civil jurisdiction.'

The learned Judge pointed out that on the Original Side of this Court in non-appealable matters a Judge does not give reasons and the appellate-Courts does not require him to do so and that following this practice if a Judge of the City Civil Court does not give reasons in non-appealable orders it cannot be said that such an order is illegal. The court also pointed out that in Waman Vasudeo v. Pratapmal the attention of the learned Judge in that case had not been invited to Ser. 9 of the Bombay City Civil Court, Judge must, in every case, give reasons. Reference was then made to the fact that the learned Judge (Mudholkar, J.) in 62 Bom LR 592 : AIR 1960 Bom 20 had only said that 'where a court deals with a matter of this kind it is desirable that it should set out in its order the substance of the defence made by the defendant and then give its reasons for its conclusion that the defence disclose a triable issue or that it does not disclose one.'

37. The High Court therefore in Amrit Banaspati's case : (1961)63BOMLR568 held that a Judge of the City Civil Court was not required to give reasons in such matters but that it was desirable that in complicated cases the Judge should give an indication of what he thinks about the defences sought to be set up, and that this may be done by giving a reference to the paragraphs in the affidavits and the Judge's conclusion briefly. It was also held that each case must depend on its own facts and the High Court would interfere in revision if it was satisfied that the learned Judge of the City Civil Court had not really appreciated the points of issue or that its order was arbitrary or capricious, and there was consequential failure of justice.

38. It was then suggested by Mr. Khare that there are certain observations in the judgment of the Supreme Court in AIR 1956 SC 1698 that so far as City Civil Court is concerned reasons must be given, when deciding the question of leave to defend.

39. Now in this Supreme Court case a reference was made to Pratapmal Dipaji 62 Bom LR 592 : AIR 1960 Bom 520 (supra) and the decision of the Bombay High Court in that case was distinguished on the ground that the decision of the Bombay High Court was given while dealing with an order made by the City Civil Court whereas the order before the Supreme Court was an order passed by the High Court of Bombay on its original side.

40. We are unable to see how this decision of the Supreme Court lays down the rule that the City Court must in all cases give reasons in support of the discretion exercised by it. On the contrary the Supreme Court made the following significant observation 'while laying down the normal rule it does not appear to have been intended to make it inflexible'.

41. It is to be noticed that by reason of the provisions of Section 9 of the Bombay City Civil Court Act of 1948 the City Civil Court follows the procedure adopted by this High Court in the exercise of its Ordinary original civil jurisdiction. It is a procedure and practice which appears to have worked well and we do not find any reason for departing from it.

42. It is useful to refer to two judgments of the Gujarat High Court where similar questions were considered. In Vijayakumar v. Pari Nareshchandra Firm, AIR 1969 Guj 247 reference was made to certain observations in Milkhiram's case : AIR1965SC1698 (supra) and it was argued that these observations seemed to suggest that if an order was made by a Judge of the subordinate Court and the order was appealable or subject to revision the obligation to give reasons in support of the order would be imported by necessary implication. Bhagwati, J. (as he then was) held that the observations of the Supreme Court in Milkhiram's case : AIR1965SC1698 could not be read as laying down any such proposition. Bhagwati, J. noted that the decision of the Bombay High Court in 62 Bom LR 592 : AIR 1960 Bom 520 (supra) had been cited but the Supreme Court distinguished that decision by pointing out that the matter before the Supreme Court related to an order made by Single Judge of the Bombay High Court and that in any event it was not necessary for the Supreme Court to consider the validity of the decision in 62 Bom LR 592 : AIR 1960 Bom 520 or the correctness of the observations made in that decision.

43. After holding that the observations of the Supreme Court in Milkhiram's case : AIR1965SC1698 could not be relied upon as constituting a decision of the Supreme Court that where a subordinate Court makes an order, which is an enable to appeal or revision the order must give reasons the Gujarat High Court then went on to observe as follows:

'We do not think there is any principle of law which requires that where a subordinate Court makes an order which is not appealed but is subject to the revisional jurisdiction of the High Court under Section 115, it must give reasons in support of the order. Having regard to the severely restricted ambit of the revisional jurisdiction of the High Court under Section 115, there does not appear to be any necessity or reason for introducing such principle. We are, therefore, of the view that it is not necessary that an order granting or refusing leave to defend a suit filed under the summary procedure must contain the reasons in support of the order. The order passed by the learned Judge granting conditional leave to defend the suit could not, therefore, be held to be bad on the ground that it did not set out the reasons which prevailed with the learned Judge in making the order'.

44. In another matter coming before another Division Bench of the Gujarat High Court to which Bhagwati, C. J. (as he then was) was a party a contention was taken that the d decision of the Supreme Court in Bhagat Raja v. Union of India, : [1967]3SCR302 , had impliedly overruled the decision of the k Gujarat High Court in Vijayakumar v. Pari Nareshchandra, : AIR1968Guj247 . The Gujarat High Court repelled that contention and pointed out that the decision of the Supreme Court in Bhagat Raja's case : [1967]3SCR302 dealt with the Central Government acting as a tribunal and it was therefore confined to tribunals and it was therefore confined to tribunals exercising judicial or quasi judicial powers and reference to courts of law was avoided. Bhagwati, C. J. also said that:

'the question whether an order made by a court of law is required to be supported by a judgment setting out reasons would be governed by the Code of Civil Procedure. So far as order granting or refusing leave to defend in a summary suit is concerned there is no provision in the Code of Civil procedure which requires that such an order must contain reasons for making the order'.

45. In the light of the above discussion and confining ourselves to the Bombay City Civil court we are of the view that it is not required of the Bombay City Civil Court in all cases to give reasons when granting leave to defend, refusing it or making a conditional order under Order 37, Civil P. C. as amended by this High Court . And in would not be correct to suggest that if reasons are not given the order would be liable to be set aside on that ground alone.

46. If the matter before the City Civil Court is a complicated one or points of law or fact are of a somewhat involved nature then it would be indeed desirable and appropriate that reasons for making the order be briefly stated so that the superior courts which may have occasion to deal with the matter may at least be informed as to what was in the mind of the Judge when he made the order.

47. In particular when leave is being refused (so that a decree is to follow) it would be even more necessary in the interest of justice, and because he is passing a drastic order, for the trial Judge to indicate briefly what the defences are and why they are being considered useless or worthless.

48. It requires to be stated that points to be considered by the High Court in a revision application are not necessarily disclosed by any reasons that may be record by the trial Judge in granting or refusing leave to defend. But it cannot be denied that whatever may be the grounds urged by a party in support of a revision application the High Court would always be in a better position to deal with those grounds if the views of the Judge of the City Civil Court making the order under challenge are available to it.

49. In this view of the matter the validity of the conditional order made on the 6th February, 1968 cannot be challenged on this ground, and the contention raised by Mr. Khare must be rejected.

50. We regret that before parting with this matter we have to deal with the two hundies, which are said to have been executed on 22nd November, 1967 although the endorsement of the General Stamp Office, Bombay, clearly shows that the hundi papers were issued on 13th January, 1968.

51. We fell it our duty to consider the question whether a show cause notice is to be issued to the partners of the defendants firm whose defence has bee discussed by us in the foregoing paragraph of the judgment. (After considering this question in Paras 52 to 70, the judgment proceeded):

52. Having gone through the evidence carefully and having heard the learned Advocates appearing for the parties who argued the appeal before us in great detail and at length we are of the opinion that it is a fit case in which it would be expedient in the interest of justice to take further proceedings in this behalf. In making this conclusion we may wish to make it clear that we are not expressing any opinion about the guilt or innocence of the partners of the defendants firm.

53. What remains to be considered is the question whether the second partner of the defendants' firm namely Jayant C. Vaidya should also be prosecuted for the act of the other partner Champsinh N. Vaidya. It is not the defendants case that the two partners were never aware of these two hundies and the circumstances in which they came into existence.54. On the facts and circumstances of the case before us it cane b properly said that both the partners seem to have shared a common intention in creating this false evidence and forging these documents and uttering them as genuine.

55. In the alternative, jayant C. Vaidya, could be, if the evidence so established prosecuted as an abetter, if it be found that Champsinh N. Vaidya is the prime mover in this affair.

56. We, therefore, direct that a show cause notice be issued to (1) Champsinh Narsinh Vaidya and (2) Jayant Champsinh Vaidya to show cause as to why sanction be not accorded to prosecute them for offences punishable under Section 193 , 463 read with Sections 465, 467, 471 read with Section 34 and / or 109, Indian Penal Code. Notice to be returnable within two months from today.

57. The appeal is dismissed with costs. Liberty to the respondent-plaintiff to withdraw the sum of Rs. 7,500/- deposited in the Court.

58. Order accordingly.


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