Summary Suit No.1280 of 2006

17th February, 2009

Petitioner Counsel: Mr. UDAY BOBADE,. MOHAN TEKAVDE, Mrs. SWATI M. TEKAVDE , Mr. SACHIN DERE
Respondent Counsel: Mr. P. M. SHAH

JUDGMENT

JUDGMENT :- The plaintiffs have filed this suit for recovery of Rs.15,14,474/-. The plaintiffs have also prayed for interest to the tune of Rs.10,86,495.52 @ 24% p.a., from the date of the dishonour, till filing of the suit. The plaintiffs have also claimed interest @ 18% p.a. from the date of the filing of the suit till realization and costs.

2. The plaintiffs have instituted the present suit on the basis of four cheques of different dates totaling to Rs.15,14,474/-, which eventually got dishonoured on 12-12-2002.

3. The present suit is basically filed on the basis of four dishonoured cheques by taking the benefit of provisions of Order 37 of C.P.C. Accordingly, the plaintiffs had taken out Summons for Judgment. The Summons for Judgment was decided on merits. By an order dated 07-10-2008, the defendants were ordered to deposit a sum of Rs.10,00,000/- on or before 12-11-2008 and subject to that condition, the defendants were permitted to file the written statement. It is an admitted fact that the defendants have not complied with the order dated 07-10-2008. The plaintiffs have therefore, filed affidavit of evidence and tendered in the Court original documents, namely four dishonoured cheques and the bank memos, showing the reasons of dishonour and have prayed for a decree in accordance with the provisions of Order 37, Rules 3(6)(b). It is in these circumstances, the suit was posted for ex-parte decree on the last occasion. I have heard the arguments of learned counsel Mr.Bobade on behalf of the plaintiffs on 09-02-2009 and the matter was posted today for ex-parte decree.

4. Before I could take up the dictation of the order, the learned counsel Mr. Shah, appearing on behalf of the defendants, objected to this Court passing a decree and contended that the defendants have a right to cross-examine the plaintiffs and their witness through the counsel of the defendants and that is how he wanted this Court to give an opportunity to the defendants to go for a full-fledged trial and then consider the matter on merits and pass a decree. In these circumstances, it is become necessary for this Court to ascertain as to whether the Court should pass a decree as prayed for by the plaintiffs, only after the plaintiffs put their witness in the box, allow the defendants to cross-examine the witnesses, carrying out the procedural part of recording of evidence, hear the counsel on the merits of the matter and then pass a decree.

5. In order to decide the aforesaid point, I have heard learned counsel Mr. Bobade, for the plaintiffs and Mr. Shah, the learned counsel appearing for the defendant.

6. The learned counsel for the plaintiffs, read to me the provisions of Order 37, Rule 3(6)(b) of C.P.C., and pointed out that if the Court puts the defendant to certain terms and if the defendants failed to comply with the terms and carry out the directions as may be given by the Court, the plaintiff shall be entitled to a Judgment forthwith. The learned counsel for the plaintiffs, took me through the words in particular, "Plaintiff shall be entitled to judgment forthwith", and submitted that the summary procedure provided under Order 37, does not contemplate recording of formal evidence by the Court so far as the plaintiff's case is concerned, when the defendant has not complied with the order passed pursuant to the procedure adopted for the disposal of Summons for Judgment set out in Order 37, Rule 3 of C.P.C. Mr.Bobade, the learned counsel for the plaintiffs, further submitted that once the defendant fails to comply with the order passed by the Court in the matter of deposit of monies, there is no question of recording formal evidence and pass an order. According to the learned counsel for the plaintiffs, the Court has to consider the case of the plaintiff on the basis of the record before it and consider whether a decree on merits can be passed by applying the principles, as if the claim of the plaintiff has gone unchallenged.

7. Mr. Shah, the learned counsel for the defendant, contended that the procedure suggested by the learned counsel for the plaintiffs cannot be accepted by the Court in view of the language of Order 37, Rule 3(6)(b) of C.P.C. He contended that even if the defendant does not comply with the order regarding deposit of monies and consequently, the defendant has not filed the written statement, the rights of the defendant to cross-examine the plaintiff or his witnesses, cannot be shut off. According to him, the Court must direct the plaintiff to put his witnesses in the box, allow the defendant to cross-examine them and then consider the matter on merits. He further submitted that here the plaintiffs have not furnished statements of account and inspection of the same has not been granted by the plaintiffs, though demanded from time to time and that the defendants have a right to bring the factual aspect of the matter on record and then the Court should consider the matter thereafter on merits. Mr. Shah, the learned counsel for the defendants, insisted that the Court should direct the plaintiffs to put their witness in the box, allow the defendants to cross-examine the witnesses and then decide the matter on merits.

8. I have considered the rival submissions on the procedure to be followed once the defendant in a suit does not comply with the order passed in the Summons for Judgment. I have perused the provisions of Order 37 of C.P.C., and I am inclined to accept the arguments advanced by the learned counsel for the plaintiffs. It is required to be noted that the Order 37 of C.P.C., prescribes the special procedure for dealing with the suits which are titled as 'Summary Suits'. It is required to be noted that a Summary Suit can be instituted by a person provided the same is filed within the parameters of Order 37, Rule 1(2). Once it is noted that the suit is instituted as summary suit under Order 37 of C.P.C., the Court is required to follow the procedure set out in Order 37 upto the stage of disposal of the Summons for Judgment and thereafter, as set out in Order 37, Rule 3(6)(b). Once this is done, it will be taken that whatever order is passed by the Court is in accordance with the provisions of law and after applying the principles of natural justice.

9. It is required to be noted that when the Summons for Judgment is decided on merits and when the defendant is directed to deposit certain amount of money as a condition precedent and is ordered to file written statement subject to compliance of those directions, the Court wants that the defendant should comply with those terms and conditions and then only, he would be able to raise the aforesaid contentions. The provisions of Order 37 if considered in totality, it is clear that if the defendant fails to comply with the order passed in Summons for Judgment, it will be treated that the defendant has no defence and that situation will have to be equated with a situation where the averments in the plaint are deemed to have been admitted. In substance, if the defendant does not comply with the order passed at the stage of disposal of Summons for Judgment in Order 37 of C.P.C., it will be deemed that the defendant has no defence and that the case of the plaintiff is required to be decided on merits as a whole and no further proof as expected under the Evidence Act is required to be placed by the plaintiff in order to prove his case.

10. The stand taken by the learned counsel for the defendants, that the rights of the defendants to cross-examine the plaintiffs' witnesses is permissible in a case where the defendants file written statement and the suit is to be taken up for disposal as a normal suit. The procedure suggested by Counsel for defendants is not to be followed when the defendant has not complied with the order passed at the stage of disposal of Summons for Judgment. The next contention of the learned counsel for the defendants is that certain statements of accounts were not made available to the defendants and inspection has not been given. This stand could have been raised at the time of disposal of the Summons for Judgment. The summons for Judgment was heard and disposed of on merits. In my view, whether the statement of accounts were furnished to the defendants or not prior to taking out the Summons for Judgment or even thereafter, cannot be a subject matter of discussion at a stage when the defendants have not complied with the order of deposit of money. In substance, the stand taken by the defendants that the plaintiffs should be directed to put their witness in the box, permit the defendants to cross-examine the them and then arrive at a final conclusion, cannot be accepted. In my view, once the defendants fails to comply with the terms to which they were put, the plaintiffs case will have to be decided on the basis of the plaint and the original documents by following the provisions of Order 37, Rule 3(6)(b), keeping in view the terminology "Plaintiff shall be entitled to judgment forthwith". It is in the circumstances, the stand taken by the defendants is required to be rejected.

11. In view of the aforesaid observations, it has now become necessary for this Court to decide the case of the plaintiffs on the basis of the record and the arguments advanced on behalf of the parties.

12. The plaintiffs have filed the present suit for recovery of Rs.15,14,474/- for dishonourment of cheques. It is seen that all the cheques got dishonoured on 12-12-2002. The present suit came to be instituted on 01-12-2005 and hence, the institution of the suit is within the period of limitation. Since the suit is purely based on dishonour of cheques, it is well within the parameters and requirements of Order 37, Rule 1(2) of C.P.C., to that extent the institution of the suit as Summary Suit is maintainable. Since the defendants have not complied with the order passed by the Court, the plaintiffs would be entitled to a decree in regard to the principal amount of Rs.15,14,474/-.

13. The plaintiffs have claimed interest @ 24% p.a. from the date of the dishonour of the cheques. It is required to be mentioned that in the entire plaint, there are no specific averments to show as to why interest @ 24% is being charged. It is in the circumstances, the case of the plaintiffs that the plaintiffs are entitled to interest @ 24% p.a., cannot be accepted. In my view, in the present situation, keeping in view the provisions of Section 80 of the Negotiable Instruments Act, the plaintiffs can be granted interest @ 18% p.a. on the principal amount.

14. The plaintiffs can be granted interest from 12-12-2002 i.e. from the date on which four suit cheques got dishonoured. It is in the circumstances, I am inclined to pass a decree in favour of the plaintiffs as regards the interest after the dishonour of the cheques till the filing of the suit @ 18% p.a. In so far as the interest to be paid to the plaintiffs by the defendants after the filing of the suit till realization, again keeping in view the provisions of Section 80 of the Negotiable Instruments Act, read with Section 34 of C.P.C., I am inclined to pass a decree in favour of the plaintiffs by granting interest @ 18% p.a. from the date of filing of the suit till realization. Of course, the plaintiffs would be entitled to recover costs of the suit.

15. Before I part with the Judgment, needless to mention that since the written statement was not filed, there was no need to this Court to frame formal issues. For the reasons aforestated, I pass the following decree.

: D E C R E E :

1. The defendants do pay to the plaintiffs Rs.15,14,474.00.

2. The defendants do pay to the plaintiffs interest @ 18% p.a. from 12-12-2002 till the filing of the suit on Rs.15,14,474.00.

3. The defendants do pay to the plaintiffs interest @ 18% p.a. from the date of the filing of the suit till realization on Rs.15,14,474.00.

4. The defendants do pay to the plaintiffs costs of the suit.

Ordered accordingly.