2014(2) ALL MR 376
IN THE HIGH COURT OF JUDICATURE AT BOMBAY

D.Y. CHANDRACHUD AND M.S. SONAK, JJ.

The Official Liquidator Vs. Prabha P. Shenai

Appeal No. 245 of 2013,Summary Suit No. 3179 of 1998

24th September, 2013

Petitioner Counsel: PANKAJ VIJAYAN
Respondent Counsel: PRAKASH R. SHENAI

Civil P.C. (1908), O.37 R.2, O.8 R.10 - Suit for recovery of amount - Suit decreed by observing that averments made in plaint are left uncontroverted due to non filing of written statement - Even if no written statement is filed, court is duty bound to write judgment in conformity with provisions of Code or at least set out reasons by which controversy is resolved - There is no reasoning in judgment and order - Some application of mind to facts of case was necessary - Allowing suit for recovery not proper. (Paras 6, 8)

Cases Cited:
Balraj Taneja Vs. Sunil Madan, AIR 1999 SC 3381 [Para 7]
C. N. Ramappa Gowda Vs. C.C. Chandregowda (Dead) by L Rs. & Anr., 2012 ALL SCR 1563 =AIR 2012 SC 2528 [Para 7]


JUDGMENT

DR. CHANDRACHUD, J. :- This appeal arises from the judgment and order of a learned Single Judge dated 5 February 2009 by which a summary suit instituted under Order 37 of the Code of Civil Procedure, 1908 (C.P.C.) has been decreed as prayed.

2. The respondent instituted a suit on the Original Side of this Court on 17 July 1998 against the appellant for the recovery of an amount of Rs.38,73,530.43/- together with interest on the principal amount of Rs.25,23,360.00 at the rate of 30% per annum from the date of the institution of the suit till decree and thereafter until payment or realization. The case of the respondent is that on 24 September 1996, the appellant sought a quotation for the supply of M.S. Flanges and Bolt-Nuts. The respondent allegedly furnished its quotation on 27 September 1996. According to the respondent, the appellant accepted the quotation by placing an order on 28 September 1996. The respondent claims to have supplied the material on 5 October 1996 and avers that the invoice was accepted by the appellant by acknowledging the receipt. The respondent issued a notice of demand on 29 June 1998 and thereafter instituted a suit. The decree sought was in the amount of Rs.38,73,530.43/- which was inclusive of interest at the rate of 30% per annum on the principal sum of Rs.25,23,360/- as set out in the statement of claim, Exh.-F to the plaint. Future interest is claimed also at the same rate of 30% per annum.

3. A summons for judgment was taken out in the suit under the provisions of Order 37 of the C.P.C. On 11 August 2003, unconditional leave to defend the suit was granted to the appellant and a written statement was directed to be filed within a period of eight weeks. The written statement was not filed. On 5 February 2009 the suit came up before a learned Single Judge when the advocate appearing on behalf of the appellant was present. The learned Single Judge noted that the original documents were produced and though the appellant had knowledge of the order passed on the summons for judgment and of the previous orders of the court no written statement has been filed. The learned Single Judge on this basis observed as follows:

"5.The averments in the Plaint are left uncontroverted. The Suit is decreed as prayed. The original documents are taken on record and marked Exhibit-A (collectively).

6.Refund as per Rules."

4. The appellant took out a notice of motion for setting aside the decree under Order 9 Rule 13 of the C.P.C. The motion was dismissed on 22 November 2010. There was a delay of 76 days in filing an appeal. The Division Bench of this Court on 4 October 2011 declined the application for condonation of delay observing that no written statement was filed within the time stipulated; no application for extension of time was made before the learned Single Judge and hence no useful purpose would be served by condoning the delay.

5. The appellant has filed a substantive appeal against the judgment and order of the learned Single Judge dated 5 February 2009. The delay in filing the appeal was condoned by an order of the Division Bench dated 4 April 2012.

6. The admitted facts are that unconditional leave had been granted to the appellant to defend the suit under Order 37. No written statement has been filed. The appellant was ordered to be wound up on 18 March 2010 after the decree was passed by the learned Single Judge and the Official Liquidator has, with the leave of the Company Court, filed this appeal. The law on the subject is clear. Even if the written statement is not filed and the case is proceeded with under Order 8 Rule 10 of the CPC, the Court is duty bound to write a judgment in conformity with the provisions of the Code or at least to set out the reasons by which the controversy is resolved.

7. In Balraj Taneja v. Sunil Madan, AIR 1999 SC 3381. the Supreme Court observed as follows:

"(27)In view of the above, it is clear that the court, at no stage, can act blindly or mechanically. While enabling the court to pronounce judgment in a situation where no Written Statement is filed by the defendant, the court has also been given the discretion to pass such order as it may think fit as an alternative. This is also the position under Order 8 Rule 10 Civil Procedure Code where the court can either pronounce judgment against the defendant or pass such order as it may think fit."

Again as held by the Supreme Court:

"(30)As pointed out earlier, the Court has not to act blindly upon the admission of a fact made by the defendant in his Written Statement nor the Court should proceed to pass judgment blindly merely because a Written Statement has not been filed by the defendant traversing the facts set out by the plaintiff in the plaint filed in the Court. In a case, specially where a Written Statement has not been filed by the defendant, the Court should be a little cautious in proceeding under Order 8 Rule 10 CPC. Before passing the judgment against the defendant it must see to it that even if the facts set out in the plaint are treated to have been admitted, a judgment could possibly be passed in favour of the plaintiff without requiring him to prove any fact mentioned in the plaint. It is a matter of Court's satisfaction and, therefore, only on being satisfied that there is no fact which need be proved on account of deemed admission, the Court can conveniently pass a judgment against the defendant who has not filed the Written Statement........"

The same principle has been reiterated in recent judgment of the Supreme Court in C.N. Ramappa Gowda v. C.C. Chandregowda (Dead) by L Rs. & Anr. AIR 2012 SC 2528 : [2012 ALL SCR 1563].

"14. We find sufficient assistance from the apt observations of this Court extracted hereinabove which has held that the effect of non-filing of the written statement and proceeding to try the suit is clearly to expedite the disposal of the suit and is not penal in nature wherein the Defendant has to be penalised for non filing of the written statement by trying the suit in a mechanical manner by passing a decree. We wish to reiterate that in a case where written statement has not been filed, the Court should be a little more cautious in proceeding under Order 8 Rule 10 Code of Civil Procedure and before passing a judgment, it must ensure that even if the facts set out in the plaint are treated to have been admitted, a judgment and decree could not possibly be passed without requiring him to prove the fact pleaded in the plaint. It is only when the Court for recorded reasons is fully satisfied that there is no fact which needs to be proved at the instance of the Plaintiff in view of the deemed admission by the Defendant, the Court can conveniently pass a judgment and decree against the Defendant who has not filed the written statement. But, if the plaint itself indicates that there are disputed questions of fact involved in the case arising from the plaint itself giving rise to two versions, it would not be safe for the Court to record an exparte judgment without directing the Plaintiff to prove the facts so as to settle the factual controversy. In that event, the exparte judgment although may appear to have decided the suit expeditiously, it ultimately gives rise to several layers of appeal after appeal which ultimately compounds the delay in finally disposing of the suit giving rise to multiplicity of proceeding which hardly promotes the cause of speedy trial. However, if the Court is clearly of the view that the Plaintiff's case even without any evidence is prima facie unimpeachable and the Defendant's approach is clearly a dilatory tactic to delay the passing of a decree, it would be justified in appropriate cases to pass even an uncontested decree. What would be the nature of such a case ultimately will have to be left to the wisdom and just exercise of discretion by the trial court who is seized of the trial of the suit."

8. In the present case, the learned Trial Judge has merely observed that the averments made in the plaint are left uncontroverted. Having so held, the Court proceeded to decree the suit as prayed. There is absolutely no reasoning in the judgment and order of the learned Single Judge. Even if, as in the present case, no written statement has been filed, the Court was required to write a judgment which would elucidate the reasons on the basis of which the suit was being decreed. The Court has decreed the suit as prayed and even as regards future interest, awarded interest at the rate of 30% per annum. In our view, some application of mind to the facts of the case was necessary particularly having regard to the fact that unconditional leave to defend the suit was granted to the appellant.

9. In these circumstances, we are of the view that the interests of justice would require that the appeal should be allowed and the suit be restored to the file of the learned Single Judge for disposal afresh. The suit will proceed from the stage it was at when the suit came to be decreed by the learned Single Judge but we clarify that in the event any application is made by the appellant to permit him to file a written statement, such an application shall be heard and disposed of by the learned Single Judge in the considered exercise of discretion of the trial court.

10. The appeal is accordingly allowed in the aforesaid terms. The impugned decree dated 5 February 2009 is accordingly set aside and Summary Suit No.3179/1998 is restored to the file of the learned Single Judge. In the circumstances, there shall be no order as to costs.

Appeal allowed.