Notice of Motion No. 310 of 2010,Summary Suit No. 2183 of 2003

9th March, 2012

Petitioner Counsel: Mr.CYRUS ARDESHIR i/b. MADEKAR & CO.
Respondent Counsel: Mr.TUSHAR BHAVSAR, i/b. Mr.MANOJ BHATT

Cases Cited:
Dr.Sanjay G. Khemuka Vs. The State of Maharashtra and others, 2004(3) ALL MR 687=AIR 2004 Bom. 245 [Para 10]
Satyadhyan Ghosal and others Vs. Smt.Deorajin Debi and another, AIR 1960 SC 941 [Para 11]
Suraj Sanghi Finance Ltd. Vs. Credential Finance Ltd. and others, AIR 2002 Bom. 481 [Para 12]
Enkay Texo Food Industries Ltd. Vs. Consite Engineering Co. Pvt. Ltd, 1994 Mh.L.J. 514 [Para 12]
Leela Capital and Finance Ltd. Vs. Modiluft Ltd, 2003(1) ALL MR 290 [Para 13,19]
Raj Duggal Vs. Ramesh Kumar Bansal, 1991 Supp, (1) SCC 191 [Para 19]

JUDGMENT

JUDGMENT :- By this Notice of Motion, Plaintiffs have applied for an order of withdrawal of a sum of Rs.48,73,250.55 deposited by the Defendant in this Court together with interest accrued thereon from the date of deposit till payment on such terms and conditions as this Court may deem fit. To appreciate the controversy made in the petition, it would be appropriate to refer some of the facts emerged from the records produced by the parties.

2.The Plaintiffs have filed the aforesaid Summary Suit No. 2183 of 2003 for recovery of Rs.1,28,80,060.87 togetherwith interest thereon at the rate of 18% per annum from the date of filing suit till payment/realisation based (i) on diverse invoiced as mentioned in the schedule being Ex."A" to the plaint (ii) on the basis of Defendant's alleged admission of liability in writing dated 5th September, 2000, (iii) two dishonoured cheques bearing nos. 119847 dated 15th October, 2000 and No. 120009 dated 30th November, 2000. The Plaintiffs thereafter took out Summons for judgment No. 382 of 2004 in the said Summary Suit. The said Summons for judgment was replied by the Defendant by filing affidavit in reply dated 22nd September, 2004. By an Order dated 26th September, 2005, this Court granted conditional leave to the Defendant to defend the said suit on deposit of Rs. 50 lacs within a period of six weeks making it clear that if the same was not deposited, the Plaintiffs would be entitled to a decree as prayed and further directed that the amount if so deposited, the Prothonotary and Senior Master do deposit the same in a Fixed Deposit with any nationalised bank initially for a period of one year and renew the same from time to time till further orders from this court.

3.The Defendant thereafter took out Notice of Motion in the said Summons for Judgment No. 382 of 2004 for seeking extension of time to deposit. By an Order dated 8th November, 2005, Anoop V. Mohta, J. granted extension of 10 days to the Defendant to deposit the amount directed to be deposited by the Order dated 26th September, 2005 on the condition that the Defendant shall deposit Rs. 10 lacs within three days from the date of the said Order i.e. 8th November, 2005 in this Court. Pursuant to the said Order dated 8th November, 2005 the Defendant deposited a sum of Rs. 10 lacs in this Court within stipulated time as granted by the said Order dated 8th November, 2005.

4.In the meantime, being aggrieved by the said Order dated 26th September, 2005 passed by this Court, the Defendant preferred an Appeal being Appeal No. 991 of 2005 and also took out Notice of Motion No. 3399 of 2005 therein praying for ad-interim reliefs for obtaining stay of execution of the said Order dated 26th September, 2005. In the said Notice of Motion, by an Order dated 23rd January, 2006 Division Bench directed the Defendant herein to deposit the balance amount of Rs.38,73,250.55 in two installments i.e. Rs. 15,00,000/- on or before 28th February, 2006 and Rs.23,73,250.55 by 30th June, 2006 as condition precedent for granting stay of the said impugned order. The Division Bench admitted the said Appeal being Appeal No. 991 of 2005 filed by the Defendant herein.

5.Being aggrieved by the said Order dated 23rd January, 2006 by the Division Bench, the Defendant preferred Special Leave Petition being No. 3771 of 2006 in the Apex Court. By an Order dated 3rd March, 2006 the Apex Court did not find any merit in the said Special Leave Petition. Defendant herein prayed for time to deposit the balance amount of Rs.38,73,250.55 till 30th June, 2006. Accordingly, the Apex Court extended time to deposit upto 30th June, 2006 on the request made by the Defendant herein.

6.Pursuant to the said Order, passed by the Apex Court, the Defendant deposit a sum of Rs.38,73,250.55 in this Court. Defendant accordingly deposited an aggregate sum of Rs.48,73,250.55 in this Court inclusive of Rs.10,00,000/- deposited earlier. The Plaintiffs thereafter took out Notice of Motion being Notice of Motion No. 4939 of 2007 in Summary Suit No. 2183 of 2003 for seeking withdrawal of Rs.48,73,250.55 togetherwith accrued interest thereon from the date of deposit till payment on such terms and conditions as this Court deem fit and proper. The Learned Counsel appearing for the Plaintiffs informed that no affidavit in reply was filed opposing the said Notice of Motion bearing No. 4939 of 2007 by the Defendant. By an Order dated 22nd January, 2009, passed by S.C.Dharmadhikari J., the said Notice of Motion No. 4939 of 2007 was dismissed. Paragraph Nos. 8 and 9 of the said order are setout herein as under :-

8.From a reading of the order passed by this Court, it is not apparent as to whether the Court has passed the order invoking 2nd proviso to Order XXXVII Rule 3 (Sub-Rule 5) or Rule 222 of the Bombay High Court, Original Side Rules. In that sense, this is not a claim which is stated to be admitted. The Appeal is still pending. The conditional order was an interim order in the Appeal.

9.In these circumstances, and when the challenge to the order on the Summons for Judgment is still pending, it would not be fair, just and proper to grant the relief. Granting of this relief would mean that the Suit is decreed at this stage itself. When conditional leave to defend the Suit is granted and that order is impugned in the Appeal, such directions and more particularly as sought by the Plaintiffs, cannot be issued More particularly, in the facts of this case. The Motion is, therefore, misconceived and is dismissed. No costs.

7.On 26th March, 2009, the Defendant withdrew Appeal No. 991 of 2005 which was filed challenging the Order dated 26th September, 2005 passed by this Court granting conditional leave to the Defendant. The Defendant withdrew the said Appeal unconditionally at the stage of final hearing. The Plaintiffs have taken out the present Notice of Motion seeking leave to withdraw Rs. 48,73,250.55 together with interest accrued thereon from the date of deposit till payment on such terms and conditions as this Court may deem fit and proper. The Defendant has filed an affidavit dated 24th January, 2012 opposing the said Notice of Motion on various grounds.

8.I have heard Learned Counsel Shri Cyrus Ardeshir, appearing for the Plaintiffs, Shri Tushar Bhavsar appearing for the Defendant and have perused the record. The Learned Counsel appearing for the Plaintiffs submitted that the suit was based on the admission of liability in writing dated 5th September, 2000 and also on the basis of two dishonoured cheques dated 15th October, 2000 and 30th November, 2000 respectively for an amount of Rs.23,64,388.04 and Rs. 25,08,862.51 respectively. The Learned Counsel submitted that in the Order dated 26th September, 2005 passed by this Court in Summons for judgment No. 382 of 2004, it was held that once the cheques were issued to the extent of 47 lacs, the liability in the said claim was acknowledged and therefore fresh period of limitation arose. The Learned Counsel invited my attention to the observations made by this Court in the said order that even without taking into consideration, Ex. "C" to the plaint, the Plaintiffs was entitled to substantial payment towards his claim. The Learned Counsel also submitted that even Division Bench had directed the Defendant herein to deposit the entire amount as directed by the Order dated 26th September, 2005 in this Court while considering application for stay taken out by the Defendant in appeal. The Appellate Court while granting stay of the Order dated 26th September, 2005 observed as under :-

"Taking overall facts and circumstances of the case, we are of the view that the Appellant should atleast deposit the amount under the two cheques that got dishonoured."

9.The Learned Counsel for the Plaintiff contended that the earlier Notice of Motion No. 4939 of 2007 was dismissed by. S.C.Dharmadhikari J. by an Order dated 22nd January, 2009 in view of the fact that at that stage appeal being No. 991 of 2005 filed by the Defendant challenging the Order dated 26th September, 2005 granting conditional leave was pending in this Court. It was observed by S.C.Dharmadhikari, J. in para (9) of the said Order that when the challenge to the order on the Summons for judgment was still pending, it would not be fair, just and proper to grant the relief. It was further stated that granting of reliefs for withdrawal amounts would mean that suit was decreed at that stage itself. It was held that when conditional leave to defend the suit was granted and the said order was impugned in the Appeal, such directions and more particularly as sought by the Plaintiffs could not be issued more particularly, in the facts of that case. The Learned Counsel submitted that in view of the fact that the Appeal filed by the Defendants challenging the Order dated 26th September, 2005 is now withdrawn unconditionally, the Plaintiffs should be permitted to withdraw the amount of Rs.48,73,250.55 with interest accrued thereon on such terms and conditions as this Court may deem fit and proper. The Learned Counsel also invited my attention to para (4) of the affidavit in rejoinder dated 12th October, 2011 that for the period ended on 30th June, 2011, the Plaintiffs had earned the profit of Rs.112,44,00,000/- and had sufficient reserve and surplus for the same period. The Plaintiffs annexed unaudited financial results of the Plaintiffs for the quarter and six months ended on 30th June, 2011.

10.Though, the Defendant in his affidavit in reply has raised various issues on merits disputing the liability, the Learned Counsel appearing for the Defendant opposed the Notice of Motion on two grounds (1) that Notice of Motion taken out by the Plaintiffs is barred by resjudicata contending that the Plaintiffs had already taken out similar Notice of Motion earlier with similar reliefs being Notice of Motion No. 4935 of 2007 and the said Notice of Motion was dismissed by this Court. The Learned Counsel appearing for the Defendant submitted that Defendant had not admitted any liability in respect of the amount claimed by the Plaintiffs in the summary suit and that the entire claim of the Plaintiffs was not admitted. The Learned Counsel also submitted that in view of the fact that the Plaintiffs did not apply for liberty to withdraw the amount directed to be deposited by this Court while passing order dated 26th September, 2005, the present Notice of Motion taken out by the Plaintiffs is barred by principles of constructive resjudicata. The Learned Counsel appearing for the Defendant placed reliance on the judgment of this Court in case of Dr.Sanjay G.Khemuka vs. The State of Maharashtra and others reported in AIR 2004 BOMBAY 245 : [2004(3) ALL MR 687] in support of his plea that doctrine of res judicata, is attracted even in the successive stages of the same proceedings where the decision is reached and rendered. The Division Bench of this Court in the said judgment in para (41) has held as under :-

The doctrine of res judicata, therefore, is attracted even in the successive stages of the same proceedings where the decision is reached and rendered. Giving finality to the issue would act, as res judicata for the parties to the said proceedings to reagitate the same issue once again at the subsequent stage of the same proceedings. It is implicit that the issue in which the matter directly and substantially in issue in the earlier stages of the proceedings between the same parties and the decision, which is rendered on that issue by the Competent Court shall not only be binding, but also would be res judicata to the parties to such proceedings to reagitate the same in the successive stages of the same proceedings. It is, therefore, not correct to suggest that the scope of the principles of res judicata is only confined to what is contained in Section 11, of the Civil Procedure Code in view of the law laid down by the Apex Court in the case of Arjun Singh (supra). Consequently, Civil Application No. 6127 of 2002 itself is not maintainable and barred by the doctrine of res judicata.

11.The Learned Counsel appearing for the Defendant also placed reliance on the judgment of the Apex Court in the case of Satyadhyan Ghosal and others vs. Smt.Deorajin Debi and another reported in AIR 1960 Supreme Court 941 in support of plea that the principle of res judicata was based on the need of giving finality to judicial decisions and once the res is judicata, it shall not be adjudged again.

12.The Learned Counsel also placed reliance on the judgment of this Court in case of Suraj Sanghi Finance Ltd. vs. Credential Finance Ltd. and others reported in AIR 2002 BOMBAY 481 and the judgment of the Division Bench of this Court in case of Enkay Texo Food Industries Ltd. vs. Consite Engineering Co. Pvt. Ltd. reported in 1994 Mh.L.J. Page 514 in support of his plea that the Plaintiff should not be allowed to withdraw the amount deposited in this court in Summons for judgment.

13.The Learned Counsel appearing for the Plaintiff placed reliance on the judgment of the Division Bench of this Court in the case of The Leela Capital and Finance Ltd. vs. Modiluft Ltd. reported in 2003(1) ALL MR 290 in support of the plea that the court can allow withdrawal of the amount deposited on such terms and conditions as court deem fit. The Learned Counsel agreed to furnish the bank guarantee of the equivalent amount as a security if the said amount is allowed to be withdrawn in the present proceedings so as to safeguard the interest of the Defendant.

14.For appreciating the submissions of the Defendant on the applicability of Section 11 of the Code of Civil Procedure, 1908, Section 11 is set out thus :-

11. Res judicata. - No Court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a Court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such Court.

Explanation I.--The expression "former suit" shall denote a suit which has been decided prior to the suit in question whether or not it was instituted prior thereto.

Explanation II.--For the purposes of this section, the competence of a Court shall be determined irrespective of any provisions as to a right of appeal from the decision of such Court.

Explanation III.--The matter above referred to must in the former suit have been alleged by one party and either denied or admitted, expressly or impliedly, by the other.

Explanation IV.--Any matter which might and ought to have been made ground of defence or attack in such former suit shall be deemed to have been a matter directly and substantially in issue in such suit.

Explanation V.--Any relief claimed in the plaint, which is not expressly granted by the decree, shall, for the purposes of this section, be deemed to have been refused.

Explanation VI.--Where persons litigate bona fide in respect of a public right or of a private right claimed in common for themselves and others, all persons interested in such right shall, for the purposes of this section, be deemed to claim under the persons so litigating.

[Explanation VII.--The provisions of this section shall apply to a proceeding for the execution of a decree and references in this section to any suit, issue or former suit shall be construed as references, respectively, to a proceeding for the execution of the decree, question arising in such proceeding and a former proceeding for the execution of that decree.

Explanation VIII.--An issue heard and finally decided by a Court of limited jurisdiction, competent to decide such issue, shall operate as res judicata in a subsequent suit, notwithstanding that such Court of limited jurisdiction was not competent to try such subsequent suit or the suit in which such issue has been subsequently raised.]

15.In so far as the first submission made by the Learned Counsel appearing for the Defendant regarding maintainability of the present Notice of Motion on the plea of res judicata is concerned, the moot question arises is whether any decision was based in the earlier proceedings between the same parties in the same proceedings for seeking withdrawal of the amount deposited by the Defendant. It is common ground that no such application for withdrawal of the amount was made by the Plaintiffs at the stage when the said order dated 26th September, 2005 came to be passed by this Court. As far as order dated 22nd January, 2009 passed by S.C.Dharmadhikari, J. in Notice of Motion No. 4939 of 2007 is concerned, from the perusal of the said order, it is clear that relief in the said Notice of Motion seeking liberty to withdraw the amount deposited by the Defendant was rejected in view of the pendency of the Appeal filed by the Defendant in this Court challenging the order dated 26th September, 2005. In the said order, this Court took a view that it would not be fair and proper to grant the relief when the challenge order on Summons for judgment was pending and grant of the relief would mean that suit was decreed at that stage itself. It is common ground that the said appeal filed by the Defendant has been withdrawn after order dated 22nd January, 2009 came to be passed by S.C.Dharmadhikari J. In my view therefore application now made for withdrawal of amount can not be rejected on the ground of res-judicata based on the order dated 22nd January, 2009.

16.In my view when the said Notice of Motion No. 4939 of 2007 was taken out by the Plaintiffs, the Appeal challenging the Order dated 26th September, 2005 by which Defendant was granted conditional leave to deposit itself was pending and therefore this court at that stage did not think it appropriate to pass the order allowing the withdrawal of the said amount in view of the pendency of the said appeal. Thus, in my view the said Order dated 22nd January, 2009 refusing to permit Plaintiffs to withdraw amount cannot be considered as the decision having reached on the issue of withdraw of the amount between the same parties in the same proceeding and therefore would not attract under Section 11 of the Code of Civil Procedure, 1908. In view of the subsequent facts and more particularly in view of the withdrawal of appeal by the Defendant, in my view the Plaintiffs are entitled to apply for withdrawal of the amount deposited and, therefore, the present proceedings are not barred by res judicata under Section 11 of the Code of Civil Procedure, 1908. In my view the judgments relied upon by the Defendant on these issues reported in AIR 2004 BOMBAY 245, AIR 1960 Supreme Court 941 are, therefore, not applicable to the facts of this case and therefore the reliance placed by the Defendant thereon is misplaced.

17.As far as plea of constructive res judicata raised by the Defendant is concerned, at the outset it is pointed out that no such plea of constructive res judicata has been raised in the affidavit in reply filed by the Defendant. Even otherwise principles of constructive res judicata deals with grounds of attack and defence which ought to have been raised but not raised. Principles of constructive res judicata therefore would not apply to the application of Plaintiffs for withdrawal of amount. Even if provision of Order 2 Rule 2 of the Code are extended to interim application of this nature in view of the fact that by the said Order dated 26th September, 2005, the Defendant was granted conditional leave to deposit and was granted six weeks time to deposit the said amount, in my view the Plaintiffs could not apply for withdrawal of the said amount at that stage in anticipation of the amount being deposited in future and therefore application for withdrawal would not be barred even by provisions of Order 2 Rule 2 of the Code. Since the Plaintiffs could not have applied for, it was not mandatory on the part of the Plaintiff to apply for withdrawal at the same time when the conditional leave to defend was granted and was given time of six weeks to deposit. In my view, plea of the Defendant that the Plaintiffs ought to have applied for withdrawal of the said amount at the stage of granting conditional leave to deposit though time to deposit was granted and having not applied then, application now made is barred by constructive res judicata is totally misplaced and has no substance. No sooner the amount directed to be deposited on 26th September, 2005 followed by the subsequent orders came to be deposited by the Defendant, the Plaintiffs have taken out the Notice of Motion for withdrawal of the said amount. Defendant did not even oppose the said Notice of Motion bearing No. 4939 of 2007 on the ground of res judicata and constructive res judicata. In my view, the Defendant cannot be allowed to raise the plea of constructive res judicata at this stage in the present proceeding. Even otherwise in my view, the plea of constructive res judicata raised by the Defendant across the bar has no substance and the same is, therefore, rejected.

18.Similarly, there is also no substance in the plea raised by the Defendant that since there was no admission of liability and there was no order passed by this Court on 26th September, 2005 invoking second proviso to Order 37 Rule 3 sub rule 5 or the rule 222 of Bombay High Court Original Side Rules and therefore no relief allowing the Plaintiff to withdraw the said amount could be granted. In my view, the observations made by this Court while granting the conditional leave by the Order dated 26th September, 2005 and the Order dated 23rd January, 2006 by the Division Bench passed in Notice of Motion No. 3399 of 2005 it indicates that in view of the two cheques issued by the Defendant having got dishonoured, the said order of deposit came to be made by the said two orders. In any event, the merits of the claim would be considered at the time of hearing of the suit after recording evidence of both the parties.

19.I have also considered the judgment of the Division Bench in the case of The Leela Capital and Finance Ltd. vs. Modiluft Ltd. Reported in 2003(1) ALL MR 290 granting liberty to the Plaintiff therein to withdraw the amount deposited and pursuant to the Order granted leave to defend upon furnishing the undertaking to institute the amount allowed to be withdrawn with interest. Division Bench had considered the judgment of the Apex Court in case of Raj Duggal vs. Ramesh Kumar Bansal reported in 1991 Supp.(1) SCC 191 and several other judgments delivered by the Single Judge of this Court allowing withdrawal of the amount deposited in Summons for Judgment.

20.Though the Plaintiffs invited my attention to the unaudited balancesheet of the Plaintiffs' company for the year ending 30th June, 2011, showing the amount of profit and the value of the assets of the Plaintiffs' company, the Plaintiffs cannot be allowed to withdraw in this Court the amount deposited by the Defendant unconditionally or without any security.

21.In the aforesaid circumstances, I pass the following order :-

(i) Notice of Motion is made absolute in terms of prayer clause (a).

(ii)Plaintiffs is allowed to withdraw the sum of Rs.48,73,250.55 together with interest accrued thereon within four weeks from the date of this order upon the Plaintiffs' furnishing bank guarantee of a nationalised bank in favour of the Prothonotary and Senior Master. It should be kept alive initially for a period of two years and thereafter to be renewed every year and be kept alive till disposal of the suit.

(iii)No order as to costs.

22.The Learned Counsel appearing for the Defendant applies for stay of this order for a period of four weeks from today. The Learned Counsel appearing for the Plaintiffs opposes the stay. In view of facts of this case, the operation of this Order is stayed for a period of four weeks.

Ordered accordingly.