2018 (5) TMI 991 - HC - Indian Laws

Recovery of amount for supply of goods to partnership firm - the only ground urged before this Court in this appeal, was that the goods which were supplied by the respondent no.1/plaintiff to the appellants/defendant nos.1 and 3 were defective and hence the respondent no.1/plaintiff was not entitled to the amount - Held that - neither in the leave to defend application nor in this Court documents have been filed showing any RFA No.401/2018 Page 5 of 6 intimation sent by the appellants/defendant nos.1 and 3 to the respondent no.1/plaintiff/seller, that the goods supplied under the subject invoices as stated in para 4 of the plaint, are defective. Once that is so, the provision of Section 42 of the Sale of Goods Act applies and hence it was not open to the appellants/defendant nos.1 and 3 to contend that payment could not be claimed by the respondent no.1/plaintiff on account of having supplied the defective goods. Unless a defendant in an Order XXXVII CPC suit raises genuine triable issues, leave to defendant cannot be granted on the basis of the defences which are frivolous and vexatious - In the present case the defence of the defective goods is completely frivolous and vexatious and the defence does not raise genuine triable issue in view of Section 42 of the Sale of Goods Act. Petition dismissed - decided against petitioner.

Summary

Issues Involved:
1. Condonation of delay in re-filing the appeal.
2. Impugning judgments of the Trial Court in an Order XXXVII CPC suit.
3. Interpretation of Section 42 of the Sale of Goods Act, 1930.
4. Principles for granting leave to defend in Order XXXVII CPC suits.

Analysis:

Condonation of Delay:
The delay of 211 days in re-filing the appeal was condoned by the court based on the reasons stated in the application, and the exemption was allowed subject to just exceptions.

Impugning Trial Court Judgments:
The appeal was filed by the defendants challenging the Trial Court's judgments, which decreed the suit as the defendants failed to comply with the pre-condition of depositing 50% of the principal amount of dishonored cheques. The defendants argued that the goods supplied by the plaintiff were defective, but the Trial Court rejected this argument as the defendants failed to provide any evidence to substantiate their claims.

Interpretation of Section 42 of the Sale of Goods Act:
The Court referred to Section 42 of the Sale of Goods Act, stating that a buyer is deemed to have accepted the goods if no intimation of rejection is given to the seller within a reasonable time. As the defendants did not provide any evidence of rejecting the goods, the provision of Section 42 applied, and their defense regarding defective goods was deemed frivolous and vexatious.

Principles for Granting Leave to Defend:
The Court applied the principles outlined in the case of IDBI Trusteeship Services Ltd. Vs. Hubtown Ltd., emphasizing that leave to defend in Order XXXVII CPC suits should only be granted if genuine triable issues are raised. The defense of defective goods was considered frivolous and did not raise genuine triable issues, leading to the dismissal of the appeal.

Overall, the appeal was dismissed as the defense raised by the defendants was deemed frivolous and vexatious, failing to raise genuine triable issues as required by the legal principles governing Order XXXVII CPC suits.