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Bush Boake Allen (India) Ltd. Versus Mehtajee And Company And Ors.

2005 (8) TMI 718 - DELHI HIGH COURT

Dated:- 25-8-2005 - S Kumar, J. JUDGMENT Swatanter Kumar, 1. Plaintiff-Bush Boake Allen (I) Ltd. filed a suit for recovery of ₹ 27,70,832/- under the provisions of Order 37 of the Code of Civil Procedure (hereinafter referred to as the Code') Plaintiff is a Company incorporated under the provisions of Companies Act, 1956 with its registered office at 1-5 Seven Wells Street, St. Thomas Mount, Chennai-600016 and has a Regional Office at Delhi. The suit has been instituted, signed and ver .....

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fendant No. 1 and have been conducting the business of defendant No. 1. The defendants had approached the plaintiff for supply of the item being sold by the plaintiff. The supplies was made as per requirement of defendant No. 1 and invoices were issued for such supplies. Number of cheques were issued by defendants in favor of the plaintiff. The plaintiff presented the said cheques on the respective due dates, but they were dishonoured by the bankers due to insufficiency of funds'. It was the .....

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dant No. 2 had also requested the plaintiff that in the meanwhile the supplies of the material may be continued so as to ensure that the cheques already issued are not dishonoured on presentation. However, in violation to the assurance given the defendant asked the plaintiff not to present the cheques and vide letter dated 2nd March, 2001, the plaintiff had asked the defendant as to when the cheque should be presented. The cheques were again dishonoured and the plaintiff demanded the payment of .....

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ility. Defendant No. 2 acknowledged the outstanding dues but failed to pay the said amount as confirmed in the letter dated 17th November, 2001. The agreement arrived at between the parties on 16.11.2001 was also not adhered to by the defendants. Finally, the plaintiff having left with no alternative, got a notice served upon the defendants through their counsel on 3rd March, 2002 calling upon them to clear the dues. The attempts were also made by the defendants to dissolve their firm and to sel .....

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f the Code. 2. Summons in the suit were issued vide order dated 8th April, 2002. Notice was also issued on IAs 3420-21/2002. These were the applications filed by the plaintiff under Order 38 Rule 5 and Order 39 Rules 1 & 2 of the Code respectively. IA 7618/2002 and IA 7627/2002 are the applications filed by the plaintiff under Order 37 Sub-Rule 4 of Rule 3 and Order 39 Rules 1 & 2 of the Code respectively. The plaintiff by way of IA 7627/2002 praying for restraining the defendants from s .....

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/2003 is the another application by defendant No. 3 seeking condensation of delay in filing the IA No. 2830/2003. As all the above seven applications are one way or the other related to the basic question as to whether the defendants are entitled to grant of leave to defend unconditionally or otherwise and whether there should be any order of injunction against them in relation to their property, as prayed for by the plaintiff. In IA 2831/2003, as already stated above, which is an application fo .....

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able reasons could only come back on 7th February, 2003 and her daughter fell ill due to acute stomach infection and as such the application could not be filed within time. The delay in filing the application is for bonafide reasons. The application was opposed. But keeping in view the peculiar facts and circumstances of the case and in the interest of justice, defendant No. 3 has been able to show sufficient cause for condensation of delay of seven days in filing the application for leave to de .....

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application for leave to defend could be condoned particularly when the application for leave to defend filed by defendant No. 2 has been considered separately by the Court within the stipulated period. Consequently IA 2831/2003 is allowed. The delay of seven days' is condoned. The application for leave to defend bearing IA No. 2830/2003 would be decided Along with application for leave to defendant of defendant No. 2 being IA 9208/2002. As already noticed, the case of the plaintiff is based .....

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anding and cheques in hand are attached), you have agreed to clear all the payments and requested us for time for clearing the total amount. Accordingly, you have assured us that you will clear ₹ 2.00 lakhs (Rupees Two lakhs) by November 25, 2001 and an additional ₹ 3.0 lakhs (Rupees Three Lakhs) by 24th December, 2001. You also have agreed that you will try to clear another ₹ 4.0 (Rupees Four Lakhs) - in addition to above two payment schedules - before 27th December 2001. We h .....

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records. 4. There are various letters placed on record by the plaintiff but all these are letters written by the plaintiff to defendant No. 1 relating to dishonouring of cheque, issuance of fresh cheques and the commitments made by the defendants to the plaintiff. There is no other letter except the minutes dated 17th November, 2001 which has been signed or confirmed by the defendants. There is a statement filed by the plaintiff on record which is stated to be Statement of cheques v. Invoices un .....

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₹ 16 lacs will be cleared in the month of June, 2001. Thereafter on 18th September, 2001, plaintiff had still written another letter to the defendant confirming that the fresh cheques have been issued in lieu of the cheques already with the plaintiff. Some of these cheques were presented while other fresh cheques were not issued by the defendants. There are corroborative facts averred in these letters that the cheques issued by the defendants were dishonured and they were not presented by .....

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ntiff have in paragraph j) of the ground for leave to defend has specifically stated "the goods worth ₹ 25 lacs to ₹ 30 lacs could not be sold by defendants on account of the reasons mentioned above. The said goods are still lying with the defendants and officials of the plaintiff have been asked several times to left the goods". Further it is stated that the goods supplied by the plaintiff to the defendant were of inferior quality and are not of good quality and the same b .....

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nt No. 2 on behalf of defendant No. 1 and the suit is not maintainable. Though the defendants have admitted in the application for leave to defend that the goods worth ₹ 25 lacs to ₹ 30 lacs were received by them, no detail thereof whatsoever has been given as to how much goods were sold and how much goods are still lying with the defendant. Not even a single letter has been placed on record which the defendant might have written to the plaintiff requiring them to leave the defective .....

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ts to disclose true facts in his application for leave to defend as to these vital issues also. It is nowhere stated in the application that the defendants had not issued the cheques as claimed by the plaintiff. What is argued on behalf of the applicant while relying upon the judgment of this Court in the case of Goyal Tax Fab .Pvt. Ltd. v. Anil Kapoor that the suit of the plaintiff is not maintainable because cheques were not even presented to the Bank. This case is of no help to the defendant .....

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ssues and as such the would be entitled to an unconditional leave to defend. The Supreme Court in this case held that summary judgment under order 37 should not be granted where serious conflict as to matter of fact or where any difficulty on issues as to law arises. This judgment again is not of much help to the applicant in as much as the receipt of goods is not denied. The goods were supplied during the period 2nd May, 2000 to 23rd February, 2001 and these goods admittedly were worth ₹ .....

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defendant. The signatures on the letter appear quite to be that of the defendant if compared to the signatures of the defendant on the application for leave to defend, at least to the naked eye. The stand taken by the defendant appears to be more imaginative and is based on falsehood. The counsel appearing for the plaintiff/non-applicant while relying upon another judgment of this Court in the case of Aganail Traders Ltd. v. Shyam Ahuja AIR 1999 Delhi 369, Minerals and Metals Trading Corporatio .....

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he goods by the defendant is an afterthought for avoiding the payment as no such endorsement was even made on the invoices which were received by the defendant over a long period. The defendants having acknowledged their liability in the letter dated 17th November, 2001 and the invoices where material was received, no penumbra for speculation remains and the plaintiff would be entitled to the decree. The stand taken by defendant No. 2 is not trustworthy and in fact is not supported by any corres .....

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ff immediately thereafter in April, 2002, it was obligatory on the part of the defendant to react to the said notice or at least give his explanation in his application for leave to defend. The Supreme Court in the case of Mechalec Engineers & Manufacturers v. Basic Equipment Corporation clearly held where the defendant sets up a defense which is illusory or sham or practically a moonshine, then ordinarily the plaintiff is entitled to leave to sign judgment. The stand of defendant No. 3 in h .....

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efendant No. 2, the applicant/defendant No. 3 was constrained to send a notice dated 11.7.2002 through her advocate for dissolution of partnership firm and for rendition of accounts of the firm". It is further stated that thereafter a compromise deed has been entered into wherein defendant No. 2 and one Smt.Shanti Seth has agreed to liquidate the entire liability after absolving the applicant/defendant No. 3. In fact, there is nothing in the application for leave to defend which require any .....

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reply to IA 3421/2002, defendant No. 2 has already made a statement in the Hon'ble Court stating therein that defendant No. 2 will not transfer, alienate, part with or create any third party interest in respect of property No. 1484, S.P. Mukherjee Marg, Delhi, as such the application is not maintainable. In view of this statement made by defendant No. 2 nothing survives in this application and the same can be disposed of by binding the respondent/defendants to their statements and no further .....

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er and even the plaintiff is not entitled to the principal amount of ₹ 20,37,376.52p as claimed in the plaint, but would be entitled to get only a sum of ₹ 19.5 lacs on account of principal. In regard to interest, the written contract between the parties does not postulate any payment of another interest. There is no document on record vide which the defendant had agreed to pay interest as claimed in the notice by the plaintiff. There is no invoice on record wherein payment of intere .....

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of the interest for payment of interest. Thus the claim of the plaintiff for grant of interest is also declined. The plaintiff has prayed for award of interest @ 24% per annum pendente lite and future. 7. After amendment of 1976 of the Code the discretion to give leave to defend is delineated by the proviso. The first proviso to Order 37 Rule 3(5) provides that leave to defend shall not be refused unless the Court is satisfied that the facts disclosed by the defendant do not indicate that he ha .....

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