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The judgment revolves around a suit filed under Order 37 of the Civil Procedure Code (CPC) by the plaintiff for the recovery of a sum of money from the defendant, the Food Corporation of India. The primary issues considered by the court include the applicability of Order 37 CPC to the suit, the timeliness of the defendant's application under Section 34 of the Arbitration Act, and the interpretation of what constitutes a "debt" under the relevant legal framework.
1. ISSUES PRESENTED and CONSIDERED The core legal questions considered were:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Applicability of Order 37 CPC The court examined whether the suit for the recovery of the price of goods could be construed as a suit for enforcing payment of a debt under Order 37 CPC. The relevant legal framework included the amended clause (b) of sub-rule (2) of Rule 1 of Order 37 CPC, which covers suits for recovery of a debt arising from a written contract. The court referred to precedents such as M/s. Print Pack Machinery Ltd. v. M/s. Jay Kay Paper Congeters and Sushila Mehta v. Shri Bansi Lal Arora & another to support its interpretation that the suit falls within the ambit of Order 37 CPC. In its reasoning, the court held that the price of goods constitutes an ascertained amount payable under an unqualified present liability, thereby qualifying as a debt. The court rejected the defendant's argument that the absence of a contractual stipulation for interest precludes the suit from being covered by Order 37 CPC. Issue 2: Timeliness of Application under Section 34 of the Arbitration Act The court considered whether the application under Section 34 of the Arbitration Act was timely and whether the delay could be condoned. The relevant legal framework involved Rule 3 of Order 37 CPC and the Original Side Rules, which prescribe a timeline for defendants to seek leave to defend. The court also considered precedents such as Pench Valley Coal Co. Ltd. v. The Indian Cable Co. Ltd. and Tekchand Madan v. M/s. Shyam Kamal Agencies. The court reasoned that while Order 37 CPC and the Original Side Rules prescribe specific timelines, these do not preclude the filing of an application under Section 34 of the Arbitration Act as long as a decree has not been passed. The court emphasized that the special law of arbitration should prevail over the general procedural rules. Issue 3: Definition of "Debt" The court analyzed the definition of "debt" under Order 37 CPC, relying on precedents such as Webb v. Stenton and Commissioner of Wealth Tax v. Pierce Leslie & Co. Ltd. The court identified the essential requisites of a debt as an ascertained or readily calculable amount, an absolute unqualified liability, and an obligation that has accrued and subsists. The court concluded that the claim in question meets these criteria and thus qualifies as a debt. 3. SIGNIFICANT HOLDINGS The court made several significant holdings:
The court ultimately set aside the order and decree under appeal, directing that the application under Section 34 of the Arbitration Act be decided on its merits by the learned single judge.
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