The Indian Rayon and Industries Ltd. Vs. M/S. Sirohya Enterprises - Court Judgment

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the court adjudged that under order37, rule 3(5) of the civil procedure code, 1908, the defendant was not required to disclose the facts upon affidavit - the court further explain various conditions under which leave to defend could be refused or granted. - maharashtra scheduled castes, scheduled tribes, de-notified tribes (vimukta jatis), nomadic tribes, other backward classes and special backward category (regulation of issuance and verification of) caste certificate act (23 of 2001), sections 6 & 10: [s.b. mhase, a.p. deshpande & p.b. varale, jj] caste certificate petitioner seeking appointment against the post reserved for member of schedule tribe his caste certificate was invalidated subsequently held, his appointment would not be protected. the observations/directions issued by supreme court in para 36 of judgment in the case of state v millind reported in 2001 91) mah. lj sc 1 is not the law declared by supreme court under article 141 of the constitution of india. said observations/directions are issued in exercise of powers under article 142 of the constitution and also have no application to the cases relating to appointments and are restricted to the cases relating to admissions. the protection, if any, to be granted in the fact and circumstances of case would depend upon exercise of discretion by supreme court under article 142 of the constitution. said powers under article 142 of constitution is not available to the high court. hence no protection can be granted by high court even in cases relating to admissions. - provided that leave to defend shall not be refused unless the court is satisfied that the facts disclosed by the defendant do not indicate that he has a substantial defence to raise or that the defence intended to be put up by the defendant is frivolous or vexatious;order1. this summons for judgment is taken out by the plaintiffs in summary suit to recover a sum of rs. 85,280/- being the balance of the price of goods sold and supplied by the plaintiffs to the defendants and interest thereon.2. the plaintiffs' case is that by nine contracts evidenced in writing, they sold and supplied to the defendants goods consisting of grey yarn as per quality, price, quantities, rates etc. as specified in each contract. the particulars of these are shown in tabulated form in para 2 of the plaint. the suit claim is in respect of nine bills/challans. 3. the defence sought to be raised are as follows : in respect of the items mentioned at sr. nos. 1, 2 and 6 of para 2 of the plaint, the amount shown as credit by the plaintiffs is higher than the amount actually paid by the defendants to the plaintiffs. in respect ofthe bill at sr. no. i there was a rate difference of rs. 250/-, discount of rs. 495/-, brokerage of rs. 125/- and quality claim rs. 2,000/-. the plaintiffs therefore ought to give credit for rs. 2,870/- the balance of rs. 21,872.24 has been paid by cheque. the plaintiffs have wrongly shown payment of a higher amount, namely, rs. 22,056,56. in respect of the bill at sr.no. 2 the plaintiffs were to compensate the defendants for rs. 3,370/- being the total of (i) difference in rate amounting to rs. 250/-, (ii) discount at 2% amounting to rs. 495/-, (iii) brokerage amounting to rs. 125/- and (iv) quality claim amounting to rs. 2,500/-. in respect of the third bill (bill at sr. no. 6 of para 2 of the plaint) the plaintiffs were to compensate defendants for a total amount of rs. 3,370/- on account of deductions similar to the other two bills. now there is nothing in the bills or challans or in the written documents to substantiate the defendants' contentions. further these said transactions took place in february/march 1987 and such a contention was never raised by the defendants until the plaintiffs served upon them a demand notice in 1989. therefore, although it can be said that the defendants have raised triable issue, certainly they have not raised a substantial defence. 4. as regards items nos. 3 and 7 of para 2 of the plaint the case of the defendants is that the goods were of inferior quality. now the goods were supplied in march 1987 and this contention was never raised by the defendants until the plaintiffs sent demand notice in 1989. there is nothing shown to me which substantiates the defendants' contention. again therefore, it can be said that the defendants have raised the defences which give rise to triable issues but these are hot substantial defences. 5. as regards items nos. 4 and 5 of para 2 of the plaint, it is the defendants' contention that the goods were returned to the plaintiffs except 31 kg. which they term as 'wastage'. now the claim of the plaintiffs is only in respect of 31 kg. of goods. the contention regarding wastage therefore is required to be proved by the defendants. nothing is shown to me to substantiate the defendants' con-tention. here again the defence cannot be said to be a substantial defence. 6. as regards items nos. 8 and 9 of para 2 of the plaint, the defendants' contentions are similar to those regarding items nos. !, 2 and 6 of para 2 of the plaint. for the same reason, therefore, the defence sought to be raised by the defendants cannot be said to be substantial. 7. by the amendments to order xxxvii, civil procedure code made in 1976, two new provisos were added to sub-rule (5) of rule 3. sub-rule (5) and the two provisos read as follows: '(5) the defendant may, at any time within ten days from the service of such summons for judgment, by affidavit or otherwise disclosing such facts as may be deemed sufficient to entitle him to defend, apply on such summons for leave to defend such suit, and leave to defend may be granted to him unconditionally or upon such terms as may appear to the court or judge to be just: provided that leave to defend shall not be refused unless the court is satisfied that the facts disclosed by the defendant do not indicate that he has a substantial defence to raise or that the defence intended to be put up by the defendant is frivolous or vexatious; provided further that, where a part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit shall not be granted unless the amount so admitted to be due is deposited by the defendant in court'. 8. in order to obtain unconditional leave to defend it is now not enough for the defendant to indicate defences which merely give rise to triable issues but the defendant should satisfy the court that he has a substantial defence to raise. in other words it is now required for the defendant to show that the defence he intends to raise has substance behind it. it is true that this is not the stage for 'adducing' evidence, but it is open to the defendant to show the court what evidence he would adduce in order to satisfy the court that he has 'substantial defence' toraise. if he has documentary evidence in his hands, it is now open to him to show that documentary evidence to the court. it may be pointed out that under order 37 prior to the amendment of 1976 the defendant was requested to disclose facts to the court upon affidavit, while now he can do this by affidavit or otherwise. 9. considering the two new provisos, the following principles can be spelled out in the matter of grant or refusal of leave to defend in summary suits:(a) where no defence is indicated, then the leave to defend must be refused. (b) where none of the defences sought to be raised is tenable in law, then leave to defend must be refused. (c) where part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend shall not be granted unless the amount so admitted to be due is deposited by the defendant in court. (d) where the facts disclosed by the defendant indicate that a triable issue is raised, but this is not a substantial defence, then leave to defend may be granted only upon such terms as may appear to the court or judge to be just. (e) where the facts disclosed by the defendant indicate that he has a substantial defence to raise, unconditional leave to defend must be granted.10. this case would fall under category (d) above. hence leave to defend will only be granted upon terms. hence i pass he following order:--

Judgment:
ORDER

1. This summons for Judgment is taken out by the plaintiffs in Summary Suit to recover a sum of Rs. 85,280/- being the balance of the price of goods sold and supplied by the plaintiffs to the defendants and interest thereon.

2. The plaintiffs' case is that by nine contracts evidenced in writing, they sold and supplied to the defendants goods consisting of grey yarn as per quality, price, quantities, rates etc. as specified in each contract. The particulars of these are shown in tabulated form in para 2 of the Plaint. The suit claim is in respect of nine Bills/Challans.

3. The defence sought to be raised are as follows : In respect of the items mentioned at Sr. Nos. 1, 2 and 6 of para 2 of the Plaint, the amount shown as credit by the plaintiffs is higher than the amount actually paid by the defendants to the plaintiffs. In respect ofthe bill at Sr. No. I there was a rate difference of Rs. 250/-, discount of Rs. 495/-, brokerage of Rs. 125/- and quality claim Rs. 2,000/-. The plaintiffs therefore ought to give credit for Rs. 2,870/- the balance of Rs. 21,872.24 has been paid by cheque. The plaintiffs have wrongly shown payment of a higher amount, namely, Rs. 22,056,56. In respect of the bill at Sr.No. 2 the plaintiffs were to compensate the defendants for Rs. 3,370/- being the total of (i) difference in rate amounting to Rs. 250/-, (ii) discount at 2% amounting to Rs. 495/-, (iii) brokerage amounting to Rs. 125/- and (iv) quality claim amounting to Rs. 2,500/-. In respect of the third Bill (Bill at Sr. No. 6 of para 2 of the Plaint) the plaintiffs were to compensate defendants for a total amount of Rs. 3,370/- on account of deductions similar to the other two Bills. Now there is nothing in the Bills or Challans or in the written documents to substantiate the defendants' contentions. Further these said transactions took place in February/March 1987 and such a contention was never raised by the defendants until the plaintiffs served upon them a demand notice in 1989. Therefore, although it can be said that the defendants have raised triable issue, certainly they have not raised a substantial defence.

4. As regards items Nos. 3 and 7 of para 2 of the Plaint the case of the defendants is that the goods were of inferior quality. Now the goods were supplied in March 1987 and this contention was never raised by the defendants until the plaintiffs sent demand notice in 1989. There is nothing shown to me which substantiates the defendants' contention. Again therefore, it can be said that the defendants have raised the defences which give rise to triable issues but these are hot substantial defences.

5. As regards items Nos. 4 and 5 of para 2 of the Plaint, it is the defendants' contention that the goods were returned to the plaintiffs except 31 kg. which they term as 'wastage'. Now the claim of the plaintiffs is only in respect of 31 kg. of goods. The contention regarding wastage therefore is required to be proved by the defendants. Nothing is shown to me to substantiate the defendants' con-tention. Here again the defence cannot be said to be a substantial defence.

6. As regards items Nos. 8 and 9 of Para 2 of the Plaint, the defendants' contentions are similar to those regarding items Nos. !, 2 and 6 of para 2 of the Plaint. For the same reason, therefore, the defence sought to be raised by the defendants cannot be said to be substantial.

7. By the amendments to Order XXXVII, Civil Procedure Code made in 1976, two new provisos were added to sub-rule (5) of Rule 3. Sub-rule (5) and the two provisos read as follows:

'(5) The defendant may, at any time within ten days from the service of such summons for judgment, by affidavit or otherwise disclosing such facts as may be deemed sufficient to entitle him to defend, apply on such summons for leave to defend such suit, and leave to defend may be granted to him unconditionally or upon such terms as may appear to the Court or Judge to be just:

Provided that leave to defend shall not be refused unless the Court is satisfied that the facts disclosed by the defendant do not indicate that he has a substantial defence to raise or that the defence intended to be put up by the defendant is frivolous or vexatious;

Provided further that, where a part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit shall not be granted unless the amount so admitted to be due is deposited by the defendant in Court'.

8. In order to obtain unconditional leave to defend it is now not enough for the defendant to indicate defences which merely give rise to triable issues but the defendant should satisfy the Court that he has a substantial defence to raise. In other words it is now required for the defendant to show that the defence he intends to raise has substance behind it. It is true that this is not the stage for 'adducing' evidence, but it is open to the defendant to show the Court what evidence he would adduce in order to satisfy the Court that he has 'substantial defence' toraise. If he has documentary evidence in his hands, it is now open to him to show that documentary evidence to the Court. It may be pointed out that under Order 37 prior to the amendment of 1976 the defendant was requested to disclose facts to the Court upon affidavit, while now he can do this by affidavit or otherwise.

9. Considering the two new provisos, the following principles can be spelled out in the matter of grant or refusal of leave to defend in summary suits:

(a) Where no defence is indicated, then the leave to defend must be refused.

(b) Where none of the defences sought to be raised is tenable in law, then leave to defend must be refused.

(c) Where part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend shall not be granted unless the amount so admitted to be due is deposited by the defendant in Court.

(d) Where the facts disclosed by the defendant indicate that a triable issue is raised, but this is not a substantial defence, then leave to defend may be granted only upon such terms as may appear to the Court or Judge to be just.

(e) Where the facts disclosed by the defendant indicate that he has a substantial defence to raise, unconditional leave to defend must be granted.

10. This case would fall under category (d) above. Hence leave to defend will only be granted upon terms. Hence I pass he following order:--