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TMI Blog2023 (1) TMI 1398X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of Order XIII-A of the Code. To achieve more clarity, it would be profitable to make reference to the order passed by the City Civil Court on November 22, 2019 when Unregistered Summons for Judgment was filed by Plaintiffs under the provisions of Order XXXVII of the Code. Thus, as per order dated November 22, 2019, Plaintiffs' application came to be numbered as the one for Summary Judgment under the provisions of Order XIII-A of the Code. Therefore, the provisions of Order XXXVII of the Code would not be directly relevant while examining correctness of the impugned order dated August 11, 2021 passed by the City Civil Court. Now that a clarity is achieved about the exact provision of the Code under which application was filed for Summary Judgment, the objection raised about maintainability of Plaintiffs' application under Order XIII-A of the Code needs to be determined. Relying on provisions of sub-rule (3) of Rule 1 of Order XIII A of the Code, it is contended that since the suit was initially filed as a summary suit, the provisions of Order XIII-A of the Code would have no application to Plaintiffs' suit. Here again, there is some degree of dispute as to whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary judgment is the subject matter of challenge in the present Petition. 2. Petitioners are the Plaintiffs in commercial suit instituted for recovery of money with interest against defendant, who is Respondent herein. The case pleaded in plaint is that Plaintiff No. 1, who is in business of trading in property and financing, was approached by Defendant for financial assistance in the form of loan of Rs. 50,00,000/-. Plaintiffs paid Rs. 50,00,000/- to the Defendant by RTGS on May 27, 2015. It is alleged that Defendant has executed a Bill of Exchange in favour of the Petitioners/Plaintiffs payable on demand after the due date of June 26, 2015, which however is silent on interest payable, if any. Defendant issued letter dated August 5, 2015 to Plaintiffs confirming receipt of amount of Rs. 50,00,000/- towards business loan, undertook to repay the same and issued two post dated cheques of bearing date October 30, 2015 for Rs. 50,00,000/- towards principal amount and Rs. 2,33,333/- towards interest. Additionally, one more Bill of Exchange was executed by Defendant for the said amount of Rs. 50,00,000/- with due date of October 30, 2015. On presentation, the cheques were dishonoured with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter dated August 5, 2015, issuance of post-dated cheques and non-denial of receipt of Rs. 50,00,000/- by Defendant. Mr. Jain would take me through the provisions of second Proviso to sub-rule 5 of Rule 3 of Order XXXVII of the Code in support of his contention that since there is an admission of claim on the part of the Defendant, the Court could not have granted leave to defend without the condition of deposit of the admitted amount. He would rely upon the judgment of the Apex Court in IDBI Trustee-ship Services Limited vs. Hubtown Ltd. (2017) 1 SCC 568 laying down broad principles on interpretation of provisions of Order XXXVII Rule 3 of the Code. Mr. Jain would then take me through the provisions of Order XIII-A of the Code introduced by way of amendment in Commercial Courts Act, 2015 providing for Summary Judgment. He would submit that the provisions of Order XIII A of the Code are even wider than the provisions of Order XXXVII of the Code. He would further submit that Defendant failed to file reply to the application for Summary Judgment as mandated under Order XIII A, Rule 3 of the Code. Since the claim of Plaintiffs is virtually admitted, the Court ought to have pronounced j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld rely upon the judgment of this Court in Bank of India vs. Lafans India Export Private Limited, (1994) 1 Bom.C.R. 419. He would also rely upon the judgment of this Court Madhya Pradesh Industrial Development Corporation Ltd. Vs. Mumbai District Central Co-operative Bank Ltd., AIR 2005 Bom 318, in support of his contention that issue of limitation is irrelevant while deciding summary suits. He would also rely upon the judgment of Delhi High Court Su-Kam Power Systems Ltd. vs. Mr. Kunwer Sachdev Anr., in support of his contention that the Commercial Courts Act, 2015 has been enacted with an intent to improve efficiency and to prevent delay in disposal of commercial cases and that in the event of a Court arriving at a conclusion that there is no reasonable prospect of success for the Defendant, the claim has to be allowed by pronouncing a Summary Judgment. Though not fully relevant to the present case, he would contend that the scope of provision of summary judgment is now so wide which would cover even a claim for damages. 10. Rival contentions of the parties now fall for my consideration. 11. Before adverting to the merits of the contentions raised by rival parties, it is necessar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o defend in summary suits under Order XXXVII Rule 3 as enunciated in IDBI Trustee-ship Services Limited vs. Hubtown Ltd. (supra) would continue to apply even to Summary Judgment in commercial suits, as the provisions in Order XIII-A merely broaden what was already provided for in Order XXXVII. 13. Now that a clarity is achieved about the exact provision of the Code under which application was filed for Summary Judgment, the objection raised by Mr. Davar about maintainability of Plaintiffs' application under Order XIII-A of the Code needs to be determined. Relying on provisions of sub-rule (3) of Rule 1 of Order XIII A of the Code, Mr. Davar has contended that since the suit was initially filed as a summary suit, the provisions of Order XIII-A of the Code would have no application to Plaintiffs' suit. Sub-rule (3) of Rule 1 of Order XIII A of the Code reads thus: (3) Notwithstanding anything to the contrary, an application for summary judgment under this Order shall not be made in a suit in respect of any Commercial Dispute that is originally filed as a summary suit under Order XXXVII. 14. Here again, there is some degree of dispute as to whether the suit was initially filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of application for Summary Judgment filed by the Petitioners is repelled. 16. Turning to the merits of the Order passed by the City Civil Court rejecting application for Summary Judgment, Mr. Jain has made strenuous efforts to demonstrate that Plaintiffs' claim stands admitted and that there is no probable defence available to Defendant. He has placed reliance on the judgment of Single Judge of Delhi High Court Su-Kam Power Systems Limited (supra) in which the object and purpose of introducing special provision under Commercial Courts Act for summary judgment has been discussed. It is held in paragraphs 39, 40, 44, 45, 48, 49, 50 and 52 as under: 39. The Commercial Courts Act, 2015 has been enacted with the intent to improve efficiency and reduce delay in disposal of commercial cases. The relevant portion of the Statement of Objects and Reasons of the Commercial Courts Act, 2015 is reproduced hereinbelow:- to have a streamlined procedure which is to be adopted for the conduct of cases in the Commercial Courts and in the Commercial Divisions by amending the Code of Civil Procedure 1908, so as to improve the efficiency and reduce delays in disposal of commercial cases. The propo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation allows the Court to find the necessary facts and resolve the dispute, proceeding to trial would generally not be proportionate, timely or cost effective. It bears reiteration that the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the Court the confidence that it can find the necessary facts and apply the relevant legal principles so as to resolve the dispute as held in Robert Hryniak (supra). 50. In fact, the legislative intent behind introducing summary judgment under Order XIIIA of CPC is to provide a remedy independent, separate and distinct from judgment on admissions and summary judgment under Order XXXVII of CPC. 52. Consequently, this Court is of the opinion that there will be 'no real prospect of successfully defending the claim' when the Court is able to reach a fair and just determination on the merits of the application for summary judgment. This will be the case when the process allows the court to make the necessary finding of fact, apply the law to the facts, and the same is a proportionate, more expeditious and less expensive means to achieve a fair and just result. 17. No doubt Commercial Court is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eded that the since suit is based on Bills of Exchange, the same would not be hit by the provisions of section 13(1) of the Act of 2014. However, there are other issues especially with regard to limitation, which in my view would not put the claim of Plaintiffs as the one which is impossible of being defended or zero prospect of Defendant successfully defending the same. 21. I am therefore of the view that the present case would not be covered by eventuality of clause (a) of Rule 3 of Order XIII A of the Code where this court is in a position to record a finding with degree of certainty that Defendant has no real prospect of successfully defending the claim. Therefore, no case was made out for City Civil Court to pronounce a summary judgment on the claim of Plaintiffs under Order XIII Rule 6 of the Code. 22. This leads me to the alternative submission made by Mr. Jain that even if summary judgment could not have been pronounced on Plaintiffs' claim, the City Civil Court could have atleast made a conditional order under Order XIII-A, Rule 7 of the Code, which read thus: 6. Orders that may be made by Court. --(1) On an application made under this Order, the Court may make such or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amendment of Order 37 Rule 3 and the binding decision of four Judges in Milkhiram case [Milkhiram (India) (P) Ltd. v. Chamanlal Bros., `AIR 1965 SC 1698: (1966) 68 Bom LR 36], as follows: 17.1. If the defendant satisfies the court that he has a substantial defence, that is, a defence that is likely to succeed, the plaintiff is not entitled to leave to sign judgment, and the defendant is entitled to unconditional leave to defend the suit. 17.2. If the defendant raises triable issues indicating that he has a fair or reasonable defence, although not a positively good defence, the plaintiff is not entitled to sign judgment, and the defendant is ordinarily entitled to unconditional leave to defend. 17.3. Even if the defendant raises triable issues, if a doubt is left with the trial Judge about the defendant's good faith, or the genuineness of the triable issues, the trial Judge may impose conditions both as to time or mode of trial, as well as payment into court or furnishing security. Care must be taken to see that the object of the provisions to assist expeditious disposal of commercial causes is not defeated. Care must also be taken to see that such triable issues are not sh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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