2022 (1) TMI 1004 - HC - Indian Laws

Dishonor of Cheque - Suit for recovery of money - insufficiency of funds - commercial dispute or not - Order 13A and Order 37 of the Code of Civil Procedure, 1908 - HELD THAT - I do not find merit in the argument of the respondent, that this is not a commercial dispute within the meaning of the Commercial Courts Act, 2015. On the contrary, I am of the view that this is a classic commercial dispute which falls within the ambit of Section 2(c)(i) of the Commercial Courts Act, 2015 read with Explanation (a) of Section 2(c) of the Act. It is pertinent to mention that, the post-dated cheques furnished by the respondent were repeatedly dishonoured by the bankers of the respondent on the ground that the funds were insufficient in the account of the respondent. The respondent also provided a letter dated 13 June, 2016, as an undertaking for the post-dated cheques furnished by the petitioner to the respondent - the respondent has unequivocally, unambiguously and categorically admitted its liability to the petitioner. The facts of the instant case, pertain to an ordinary transaction for realisation of monies and that there are mercantile documents which have been executed by and between the parties. The negotiations and documents which merchants undertake ought not to depend on the subtleties and niceties of law but are best left to their commercial wisdom. The receipt of ₹ 4 crores is unequivocally, unambiguously and indisputably admitted by the respondent. The obligation of the respondent to pay interest @15% per annum is also admitted, indisputable and uncontroverted. In view of the demand notice dated 15 April 2019, the obligation of the respondent to repay the principal sum including interest has also arisen - in view of the fact that the respondent has already dealt with the security furnished to the petitioner in terms of the Memorandum of Understanding, liberty is granted to the petitioner to take appropriate steps for securing its claim, in accordance with law, if so advised. There shall be a decree on admission in favour of the petitioner and against the respondent for a sum of ₹ 6,27,72,055/- (particulars whereof appear from paragraph 24 of the petition). The respondent shall also pay to the petitioner costs of this application assessed at ₹ 1,00,000/- - Application disposed off.

Summary

Issues Involved:
1. Admissibility of the suit as a commercial dispute.
2. Admission of liability by the respondent.
3. Maintainability and prematurity of the application.
4. Injunction and security for the petitioner’s claim.

Issue-wise Detailed Analysis:

1. Admissibility of the Suit as a Commercial Dispute:
The petitioner argued that the suit is maintainable before the Commercial Division of the Court, emphasizing that the transaction falls within the ambit of Section 2(c) of the Commercial Courts Act, 2015. The respondent contended that the dispute is not a 'commercial dispute' and should be treated as an Ordinary Civil Suit, relying on an unreported judgment in Ladymoon Towers Private Limited Vs. Mahendra Investment Advisors Private Limited. The court found that the present case is a classic commercial dispute, supported by multiple documents executed by the parties, distinguishing it from the Ladymoon Towers case where the loan was a friendly loan without any documents.

2. Admission of Liability by the Respondent:
The court observed that the respondent had unequivocally admitted receiving ?4 crores from the petitioner, as evidenced by post-dated cheques and a Memorandum of Understanding dated 13 June 2015 and 13 June 2016. The respondent’s repeated issuance of post-dated cheques, which were dishonored due to insufficient funds, further confirmed the liability. The court noted that the respondent had also signed a confirmation of accounts for the period 1 April 2017 to 31 March 2018, admitting the debt.

3. Maintainability and Prematurity of the Application:
The respondent argued that the application was premature and not maintainable under Order 13A and Order 37 of the Code of Civil Procedure, 1908. The court rejected this contention, stating that Order 12 Rule 6 of the Code of Civil Procedure allows for a speedy judgment based on admissions. The court emphasized that the rule provides wide discretion to pass a judgment at any stage of the suit based on admitted facts, without waiting for further determination.

4. Injunction and Security for the Petitioner’s Claim:
The petitioner sought an injunction to restrain the respondent from dealing with the property provided as security and requested the respondent to furnish security for the claimed amount. The court noted that the respondent had already dealt with the security furnished under the Memorandum of Understanding. Consequently, the court granted liberty to the petitioner to take appropriate steps to secure its claim in accordance with the law.

Conclusion:
The court decreed in favor of the petitioner for a sum of ?6,27,72,055/-, as detailed in paragraph 24 of the petition, along with costs of ?1,00,000/-. The application GA/1/2021 in C.S 221 of 2021 was disposed of with the aforementioned directions.