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TMI Blog2013 (9) TMI 1267X X X X Extracts X X X X X X X X Extracts X X X X ..... om April, 2008 till the institution of the suit in February, 2010, thus amounting to a total amount of ₹ 4,00,44,341.20/-. 2. As the Single Judge records, the pleading on behalf of the plaintiff is as follows: 1. XXXXXX XXXXXX XXXXXX (i) that the defendant is the sole proprietor of M/s Guru Mehar Construction; (ii) that in December, 2000, the defendant approached the plaintiff with offer to conduct the excavation activities required by the Plaintiff at its mining site near Dongamohua village, District Raigarh, Chhattisgarh; iii) that after negotiations and deliberations, the plaintiff awarded to the defendant, the contract for hiring of heavy earth moving equipment and services for excavation works for a total period of four years i.e. till March, 2005 vide Work Order dated 02.03.2001; (iv) that vide letter dated 13.06.2005, the defendant requested the plaintiff to provide a one time soft loan of ₹ 7.17 crores recoverable over the period of five years on the ground that the defendant needed to replace and revamp the existing equipments; (v) that the plaintiff agreed to so provide financial assistance to the defendant as is evident f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ork Order and called upon the defendant to pay the sum of ₹ 548.64 lacs along with interest and also to pay the liquidated damages; (xiv) that the defendant challenged the legality and validity of the termination and raised a claim to the tune of ₹ 436 lacs on account of non adjustments and being due to him under the Work Order though not disputing the outstanding of ₹ 548.64 lacs in the loan account; (xv) that the plaintiff denied the claim of the defendant of ₹ 436 lacs and claimed the amount of ₹ 2,98,39,060/- towards principal outstanding loan amount and ₹ 163.86 lacs under the work order; (xvi) that the plaintiff thereafter filed an Arbitration Application No. 53/2009 under Section 11 of the Arbitration and Conciliation Act, 1996 before this Court. The said petition was dismissed vide judgment dated 03.12.2009 holding that the loan transaction was independent of the Work Order and not arbitrable under the arbitration clause in the Work Order; and (xvii) that hence this suit for recovery of principal outstanding of ₹ 2,98,39,060 under the loan account with interest as aforesaid. 3. The appellant had argued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that there had been meeting of mind between the parties and they had actually reached an agreement, upon all material terms, then and then alone can it be said that a binding contract was capable of being spelt out from the correspondence. Equally, reliance was placed on the decision in Corporate Voice (P) Ltd. v. Uniroll Leather India Ltd., 60 (1995) DLT 321, for the proposition that a suit under Order XXXVII CPC may be entertained on the basis of letters exchanged between parties. Thus, it was argued by the learned senior counsel that the letters exchanged between the two parties here clearly establishes a liquidated debt due to JSPL. 6. Contrary to this, learned counsel for the defendant argued that the termination of the work order by JSPL was illegal, and that this issue required to be tried. In these circumstances, it was argued that the judgment of this Court dated 31.08.2012 in GE Capital Services India v. May Flower Healthcare Pvt. Ltd. [CS(OS) 2859/2011], comes in the way of such suits, as the Court noted that the balance due at the foot of the account is not the same as the original loan document, which contains a different amount, and thus, such a suit is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d thus, liable to be rejected under Order VII Rule 11 CPC, which a Court must do even in summary proceedings. 10. While it is correct that Order XXXVII CPC is applicable only to the limited circumstances mentioned in Rule 2, and that the Court cannot extend the scope of application of the summary procedure to other cases, the argument that the present case does not fall within Rule 2, sub-rule (b)(1) ( suits arising on a written contract ) is incorrect. It is clear that a suit based on an agreement through exchange of letters is amenable to being decided under Order XXXVII; Corporate Voice, (supra), states that: 6. The letters exchanged between the parties and their Counsel, which are on record have not been disputed. It is also not disputed that plaintiff sent and defendant received the estimates, invoices and the bills. It is also not disputed that letters, purported to have been written by the plaintiff were duly received by the defendant and some of them were duly replied including notice got sent by the plaintiff. 11. Indeed, that was also the plea taken by JSPL: that the exchange of letters in this case establishes an agreement for the amount claimed. Not only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case and the approach of the Learned Single Judge is in accord with the decision of the Supreme Court in Mechelec Engineers Manufacturers v. Basic Equipment Corporation, (1976) 4 SCC 687, that no leave to defend must be granted if 8. XXXXXX XXXXXX XXXXXX (a) the Defendant has no defence or the defence set up is illusory or sham or practically moonshine then ordinarily the Plaintiff is entitled to leave to sign judgment and the Defendant is not entitled to leave to defend. 14. Here, after the liability has been admitted, and the basis of the liability (the letters exchanged between the parties) also remains unquestioned, the exercise of proceeding to trial would be reduced to a mere formality. Therefore, the learned Single Judge, in our opinion, justifiably held that the defendant s lack of explanation on the one hand, and the averments made were so weak and untenable, as to disentitle the grant of leave. 15. Finally, on the question of interest, the learned Single Judge noted that JSPL could not provide any details of an agreement between the parties for interest at the rates that have been claimed. Nor was any independent justification provided for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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