1988 (3) TMI 459 - HC - Indian Laws

Summary

Issues Involved:
1. Whether the plaintiff was a registered firm.
2. Whether the bill/invoice constituted a written contract under Order 37 of the Code of Civil Procedure (CPC).
3. Whether the defendants were entitled to unconditional leave to defend.
4. The effect of setting aside an order refusing unconditional leave to defend on the subsequent decree.

Detailed Analysis:

1. Whether the plaintiff was a registered firm:
The defendants disputed the plaintiff's status as a registered firm and questioned whether Babulal, who represented the plaintiff, was a partner. The court found that the plaintiff had disclosed the registration details in the original plaint, thus not raising a triable issue. The court concluded that the dispute over the plaintiff's status did not warrant unconditional leave to defend.

2. Whether the bill/invoice constituted a written contract under Order 37 of the CPC:
The defendants contended that the invoice was neither an order nor a contract and thus the suit was not maintainable as a summary suit under Order 37 of the CPC. The court examined the relevant part of Order 37, Rule 1(2), which allows summary suits for liquidated demands arising on a written contract. The court cited the case of T.A. Ruf and Company Ltd. v. Pauwels, explaining that a written contract does not necessarily need to be signed by both parties. Acceptance of goods delivered pursuant to an invoice can constitute a written contract. The court concluded that the demand for the price of goods received by the defendants arose from a written contract, thereby validating the summary suit.

3. Whether the defendants were entitled to unconditional leave to defend:
The defendants raised several defenses, including allegations of understatement of the bill to defraud the Revenue and claims of repayment. The court found the defendants' plea regarding repayment of Rs. 9,252.92 vague and unsupported by details. The court concluded that while the defendants might be entitled to conditional leave to defend, they were not entitled to unconditional leave. The court ordered that the defendants be granted leave to defend upon depositing Rs. 10,000 within one month.

4. The effect of setting aside an order refusing unconditional leave to defend on the subsequent decree:
The court discussed whether the revision petition had become infructuous since no appeal was filed against the decree passed after the defendants' application for unconditional leave was rejected. The court reviewed several precedents, including Siri Krishnan Bhardwaj v. Manohar Lal Gupta and Sundaram Chettiar v. P.A. Valli Ammal, which held that if the order refusing leave to defend is set aside, the subsequent decree must also fall. The court decided that the revision petition did not become infructuous and had to be decided on its merits.

Conclusion:
The court set aside the order of the III Assistant Judge rejecting the application for leave to defend. The defendants were granted conditional leave to defend the suit upon depositing Rs. 10,000 within one month. The revision petition was allowed to this extent, and the suit was restored to the trial court for disposal on merits. No order as to costs was made due to the absence of the plaintiff's representation.