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TMI Blog2021 (2) TMI 978X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the suit and at a time when the plaintiff would be precluded by the law of limitation from bringing a further suit against the defendant, the defendant must be deemed to have waived the privilege of the notice. Having seen that the provisions of section 12A of the CC Act and section 80 of the CPC are similar, I do not see why on parity of reasoning, it cannot be held that in a given set of facts and circumstances, the defendant has waived the privilege of asking the plaintiff to first invoke the remedy of pre-institution mediation before instituting a suit in this Court. As mentioned earlier, without considering the facts and circumstances of a particular case, to mechanically drive the plaintiff to go for mediation under section 12A of the CC Act before allowing him to institute the suit, would in fact run counter to the very object and purpose for which the CC Act was brought into force. This interpretation, which is earlier held to sub-serve the ends of justice, would not in any event cause prejudice to the defendant. The present suit came to be lodged on 6th July, 2019. After the suit was filed, the writ of summons was served on the defendant and the plaintiff therea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the plaintiff and has not repaid the same. In fact, the defendant, to repay the moneys advanced by the plaintiff to the defendant, had also issued a post-dated cheque of ₹ 5 crores which was dishonoured when presented for payment. Similarly, even the cheque issued for the payment of ₹ 54 lakhs (towards interest) was dishonoured. The reason for dishonour of both the aforesaid cheques was funds insufficient . There is also no dispute with reference to the rate of interest payable. When one looks at the overall facts of the matter, it is abundantly clear that the defendant has absolutely no defence on the merits of the claim of the plaintiff. The defendant shall deposit in this Court, a sum of ₹ 5.54 crores within a period of twelve weeks from today. On the aforesaid condition being complied with, the defendant is granted leave to defend the suit and he shall file his written statement within a period of eight weeks from the date of deposit - If the aforesaid condition of deposit is not adhered to within the stipulated time, the plaintiff shall be entitled to apply for an ex-parte decree after obtaining a non-deposit certificate from the Prothonotary Senior ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the agreed terms until 9th December, 2016. Thereafter, as the defendant wanted a reduction in the rate of interest, on 9th December, 2016, the defendant addressed a letter to the plaintiff inter alia acknowledging the plaintiff s loan of ₹ 5 Crores and requested the plaintiff to reduce the rate of interest to 12% p.a. By the said letter, the defendant requested confirmation of the revised terms, namely, that the interest amount of ₹ 27,22,192/- at the rate of 12% p.a. till 31st December, 2016 would be paid through RTGS and thereafter the interest rate would be 12% p.a. payable at the end of the calendar year i.e. 31st December, 2017. Acceding to this request, the plaintiff obliged to reduce the rate of interest from 19% p.a. to 12% p.a. Accordingly, on 20th December, 2016, the defendant and four others gave an undertaking (Exhibit D to the plaint) to the plaintiff as well as two other persons, under which, inter alia, the defendant acknowledged the loan of ₹ 5 Crores taken from the plaintiff and also agreed to issue the post-dated cheques for repayment. Accordingly, the defendant issued two post-dated cheques, one in the sum of ₹ 5 Crores dated 1st Jan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that there is absolutely no defence to the present suit. He submitted that taking of the loan is undisputed. He further submitted that the defendant has time and again acknowledged his liability and this is clear from the letter dated 9th December, 2016 as well as the undertaking executed on 20th December, 2016. He submitted that in furtherance of the said undertaking, the defendant also issued two post-dated cheques, one for the sum of ₹ 5 Crores towards the principal amount of the loan and the second for ₹ 54 Lacs towards interest. Both these cheques, when presented for payment, were dishonoured with a remark Funds Insufficient . This was also brought to the notice of the defendant by the plaintiff s advocate s notice dated 17th April, 2018 to which there was no reply. This being the case, he submitted that there is absolutely no defence to the present Summary Suit, and therefore, the Summons for Judgment be made absolute. 8. On the other hand, Mr. Bookwala, the learned senior counsel appearing on behalf of the defendant, submitted the following :- (i) the above suit is filed for recovery of a loan and is therefore, barred by section 13(1) of the Maharas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings, namely, the Commercial Courts (Pre-institution Mediation and Settlement) Rules, 2018. He submitted that in the present case, admittedly, the remedy of pre-institution mediation has not been availed of by the plaintiff. This being the case, the suit itself is barred under section 12A of the CC Act. To substantiate this argument, Mr. Bookwala relied upon the following decisions:- (a) Anil Gupta Vs. Babu Ram Singla (CS (OS) 201/2020), decided by Single bench comprising of Ms. Justice Mukta Gupta of Delhi High Court, vide order dated 30th September, 2020 (b) Terai Overseas Pvt. Ltd. Vs. Kejriwal Sugar Agencies Pvt. Ltd. Ors (C.S. No.78 of 2020) decided by Single Bench comprising of Mr. Justice Debangsu Bask of Calcutta High Court vide order dated 3rd September, 2020 (c) Re. Cognizance For Extension of Limitation (MANU/SC/0654/2020) decided by Full Bench comprising of Mr. CJI S. A. Bobde, Mr. Justice R. Subhash Reddy and Mr. Justice A.S. Bopanna, Supreme Court on 10th July, 2020. (d) GSD Constructions Pvt. Ltd. Vs. Balaji Febtech Engineering Pvt. Ltd. (MANU/MP/0451/(2019) 9. Lastly, Mr. Bookwala contended that the present suit has been filed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lid license, it shall dismiss the suit. On bare reading of section 13(1), it is ex-facie clear that the bar applies when a money lender seeks a decree in any suit with reference to recovery of a loan or any part thereof. If the money advanced cannot be termed as a loan under the Money Lenders Act, then the question of the suit being barred as set out in section 13(1) does not arise at all. 12. I must note that a similar issue came up before another learned Single Judge of this Court in the case of Bipin Vazirani Vs. V. Raheja Design Construction Pvt. Ltd. Anr. (Summons for Judgment No.101 of 2018 in Comm. Summary Suit No. 424 of 2018, decided on 12th December, 2018). In the facts of that case also there were two cheques that were issued by the 1st defendant to the plaintiff and which were dishonoured for the reason Funds Insufficient . There too, an argument with reference to money lending was raised. Negating the contention of the defendants in that case, this Court held as under :- 7. In that decision I considered the settled law on the subject including amendments to the Money Lending Act and the interpretation of the expressions loan , money lender , busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hing on record to establish that the present suit would be barred under the provisions of the said Act. As set out in the aforesaid judgment referred to earlier, not every loan is axiomatically a money lending transaction for the purposes of the Money Lenders Act. There is no such presumption in law. It is doing the business of money-lending that attracts the provisions of the statute. In interpreting that phrase, the correct emphasis is on the word business , not money-lending . It is the word business and not the expression money-lending , that is determinative. Simply put, every instance of lending money would not amount to a money-lending transaction as contemplated under the Money Lenders Act. To constitute business of money lending , a single isolated instance does not, and even several isolated stray instances do not, constitute the business of moneylending . To be engaged in the business of money-lending , the activity must be systematic, regular, repetitive, and continuous, and must generate an appreciable revenue. The fact that the borrower is a stranger to the lender does not on its own make the latter a money-lender . A loan recovery action is not barred merely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lt with by the Commercial Courts or the Commercial Division of the High Court. This Bill was then made into an Act, namely, The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015. Thereafter, the name of the Act was changed to The Commercial Courts Act, 2015 w.r.e.f 03-05-2018. To put it in a nutshell, to ensure quick resolution of commercial disputes and which is very important in the business world, as well as to boost the image of India with the international investor community, the aforesaid Act was brought into force. The entire Act and the provisions thereunder are basically to achieve the aforesaid objectives. 16. After this Act (the CC Act) was brought into force, Chapter IIIA was inserted by Act 28 of 2018 with retrospective effect from 3rd May, 2018. Under this Chapter, section 12A was brought on the statute book and which reads as under:- 12A. Pre-Institution Mediation and Settlement.- (1) A suit, which does not contemplate any urgent interim relief under this Act, shall not be instituted unless the plaintiff exhausts the remedy of pre-institution mediation in accordance with such manner and procedure as may be p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d District Authorities constituted under the Legal Services Authorities Act, 1987 for conducting mediation contemplated under section 12A of the CC Act. 18. Firstly, on perusing section 12A of the CC Act it is clear that it is a procedural provision and there is no absolute embargo in instituting the suit unless the plaintiff exhausts the remedy of mediation. This is clear from sub-section (1) of section 12A of the CC Act which contemplates that where any urgent interim relief is applied for under the Act, the plaintiff is not required to exhaust the remedy of mediation before approaching the Court. It is not as if the Court lacks inherent jurisdiction to entertain the suit because the remedy of mediation is not resorted to before approaching the Court. The purpose of section 12A of the CC Act appears to be that parties should try and resolve their disputes before coming to the Court. This is for the simple reason that if parties resolve their disputes, they need not approach the Court at all. However, when parties have tried to resolve their disputes unsuccessfully, it would be futile to still drive the parties to pre-institution mediation. If such an interpretation is put on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it. As Justice Vivian Bose has so eloquently put it, [AIR 1955 SC 425] It is procedure, something designed to facilitate justice and further its ends: not a penal enactment for punishment and penalties; not a thing designed to trip people up. Too technical a construction of sections that leaves no room for reasonable elasticity of interpretation should therefore be guarded against (provided always that justice is done to both sides) lest the very means designed for the furtherance of justice be used to frustrate it . To put it simply, section 12A being a procedural provision, the Court has to see if the object sought to be achieved thereby is substantially complied with. If there is substantial compliance, then the plaintiff cannot be non-suited. 19. There is one more facet to this. The objection of noncompliance of the provisions of section 12A must be taken by the defendant at the earliest opportunity. If he doesn t, then, at least for the purposes of section 12A, it would be presumed that the defendant does not want to resolve his dispute through mediation. To my mind, such an interpretation would not only further the object sought to be achieved by section 12A but also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aint for presentation to it after complying with the requirements of subsection (1). (3) No suit instituted against the Government or against a public officer in respect of any act purporting to be done by such public officer in his official capacity shall be dismissed merely by reason of any error or defect in the notice referred to in sub-section (1), if in such notice- (a) the name, description and the residence of the plaintiff had been so given as to enable the appropriate authority or the public officer to identify the person serving the notice and such notice had been delivered or left at the office of the appropriate authority specified in sub-section (1), and (b) the cause of action and the relief claimed by the plaintiff had been substantially indicated. (emphasis supplied) 21. Section 80(1) also stipulates that no suit can be instituted against the Government or a public officer until the expiration of 2 months of giving notice as contemplated in the said section. Sub-section (2) of section 80 of the CPC contemplates that a suit to obtain an urgent or immediate relief against the Government or any public officer in respect of any act purporting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstant case, the issuance of the notice under section 80(1), Civil Procedure Code was not waived by the defendants. He pointed out that in the written statement filed on behalf of the State of Maharashtra and Collector, Yavatmal, on the trial Court's record, which is at Exhibit 16, the defendants, at the end of para 2, have pleaded that it was not necessary to reply the averments of the plaintiff as regards the dispensing with notice since the Court had granted leave to the plaintiff under section 80(2), Civil Procedure Code to institute the suit by dispensing with the mandatory notice. The learned A.G.P. canvassed that these pleadings indicate that the defendants were under the impression that the leave under section 80(2), Civil Procedure Code to bring the suit without notice was granted to the plaintiff and, therefore, the defendants did not raise any objection as to the nonissuance of notice. 17. The material on record shows that the State Government and the Collector had not waived the notice under section 80(1), Civil Procedure Code in express terms. However, the learned counsel for the plaintiff-appellant submitted that there was a deemed waiver of the notice on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objection in that respect was taken in suit at any stage and even in the grounds of appeal, the plea of want of notice was not taken but the said plea was taken for the first time in the arguments in appeal. In such circumstances, it was held that the defendant concerned was deemed to have waived the notice. 20. The learned counsel for the plaintiff-appellant submitted that the case of the plaintiff herein is on a better footing. He pointed out that in the cited case, the plea of want of notice was raised, whereas in the present case no such plea was taken and the absence of urgency was not pleaded. Further in the cited case, the plea of want of notice was taken for the first time at the time of arguments in the appeal, whereas in the present case that plea was not taken by the defendants even at the stage of arguments in the appeal and the lower Appellate Court itself suo motu dealt with that issue. 21. Again the following observations in Purna Chandra Sarkar v. Radharani Dassya, AIR 1931 Cal. 175 , which are reproduced in para 21 of the abovesaid authority, are relevant. They are as under: The plea of want of notice under section 80, Civil Procedure Code, which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of the matter. The High Court has held that having participated in the original proceedings, it was not now open to the State to raise a fresh issue as to the maintainability of the suit, in view of waiving the defect at the earliest point of time. The High Court has also observed that knowing fully well about non-issue of notice under Section 80 CPC the State had not raised such a plea in the written statement or additional written statement filed in the suit and, therefore, deemed to have waived the objection. It goes without saying that the question whether in fact, there is waiver or not necessarily depends on the facts of each case and is liable to be tried by the court, if raised, which, as noted above, is not the case here. (emphasis supplied) 25. As can be seen from the aforesaid two decisions, though serving a notice under section 80 of the CPC is mandatory, the same is capable of being waived. Naturally, whether there is a waiver or not, would depend on the facts and circumstances of the case. In fact, the plea for want of notice under section 80, and which is a clear bar to the institution of proceedings against the Government or a public officer, must be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion that not having raised this issue at the earliest point of time, the defendant is now precluded from doing so. In fact, if I were to allow such a plea at this stage, it takes the plaintiff by surprise. The scope and ambit of section 12A is not to defeat a just claim of the plaintiff. As mentioned earlier, section 12A is a procedural provision and it is well settled that procedure cannot defeat justice. I am, therefore, clearly of the view that in the facts of the present case, the plaintiff cannot be non-suited on this ground considering that the plea of requiring the plaintiff to invoke pre-institution mediation has not even been raised in the pleadings before me and is only argued across the Bar for the first time in December, 2020. 28. Even otherwise, in the facts of the present case, I find that the provisions of section 12A have been substantially complied with. As mentioned earlier, the scope and ambit of section 12A is to try and see if the parties can resolve their disputes before approaching the Court of law. If they cannot, then naturally the parties have to approach the Court for redressal of their grievances. In the facts of the present case, after the suit w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not contend that he was not required to comply with the provisions of section 12A. That is not the case before us at all. In the facts of our case, as narrated above, the objection that section 12A has not been complied with, has never been taken at all, except across the Bar. Even otherwise, as stated earlier, in the facts of the present case, the defendant, in fact, albeit after the filing of the suit, had given a settlement proposal to the plaintiff to try and resolve the disputes amicably. This was rejected by the plaintiff. In these circumstances, the fact situation before the Delhi High Court was totally different from the facts before me. The aforesaid decision, therefore, has no application in the present case. 30. The next decision is that of the Calcutta High Court in the case of Terai Overseas Private Ltd. Ors. (supra). In this decision, the plaintiff filed an application for leave to institute a suit without complying with the provisions of section 12A of the CC Act. In paragraph 23 of the plaint it was stated that the plaintiff apprehends that the defendants are acting in collusion and, therefore, there is no chance for any conciliation as mandated under the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Trial Court to hear the applications filed by the appellants and proceed ahead in the matter without forcing the appellants to invoke the remedy of pre-institution mediation. Again, I fail to see how this judgment in any way supports the defendant. In fact, the Trial Court had returned the Plaint and had directed the plaintiff to exhaust the remedy of pre-institution mediation. This direction was set aside by the Appeal Court. In these circumstances, this judgment also is of no assistance to the defendant. 33. I, therefore find that all these decisions have no application to the facts of the present case and do not assist the defendant in any manner whatsoever. 34. The last contention canvassed, and I must fairly say not seriously pressed by Mr. Bookwala, was that the present suit has been filed in contravention of certain provisions of the CPC, namely, that the plaint does not comply with Rule 2-A of Order VII of the CPC inasmuch as the plaint is silent on the mode and manner in which the interest has to be calculated. 35. I find this argument to be totally fallacious. In the present case, the plaintiff has made his claim on two dishonoured cheques. One cheque is for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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