Full Text
ORDINARY ORIGINAL CIVIL JURISDICTION
CHAMBER SUMMONS NO.785 OF 2019
IN
COMMERCIAL SUMMARY SUIT NO.785 OF 2018
MARIANELLA PROPERTIES PVT. LTD. )...APPLICANT
IN THE MATTER BETWEEN
SWASTIK ENTERPRISES )...PLAINTIFF
Mr.Deepak Chitnis a/w. Roshan D’Sa a/w. Ms.Simran Jaggi i/by
Purnima Bhatia, Advocate for the Applicant/Defendant.
Mr.Deep Madnani a/w. Mr.Tushar Gujjar and Mr.Gopal N. i/by
S.L.Partners, Advocate for the Respondent/Plaintiff.
JUDGMENT
1. This Chamber Summons has been instituted on behalf of the Defendant in the summary suit seeking condonation of delay of 282 days in filing Vakalatnama and a direction thereafter to take the Vakalatnama on file. avk 1/23
2. The suit has been filed as a summary suit by the Plaintiff against the Defendant Company praying for a decree and order for a sum of Rs.1,35,00,065/- with further penal interest at the rate of 24% per annum from the date of filing of the suit till its realization as per the statement of claim annexed as Exhibit ‘H’ to the plaint.
3. The Plaintiff has claimed that the Defendant had engaged the Plaintiff to undertake the civil work at the site of the Vasai Mall of the Defendant. That, the Plaintiff issued a quotation dated 5th March 2016 for the entire RCC civil work of labour for a total area of approximately 91647 sq.feet (basement + ground floor + upper 3 floors + terrace floor) at the rate of Rs.450/- per sq.feet. Thereafter, the Plaintiff and the Defendant executed an agreement dated 17th June 2016 in the form of a Work Order for provision of labour work and the Plaintiff had been entrusted to carry out the RCC civil work for approximately an area of 91647 sq.feet at the rate of Rs.450/- per sq.feet aggregating to Rs.4,12,41,150/-.
4. According to the Plaintiff, although it was incumbent upon the Defendant to make available to the Plaintiff the entire work area, the Plaintiff was directed to start with only 35% of the work area. That, avk 2/23 the Plaintiff commenced and carried out the said work under the Work Order and the Defendant was required to pay, however, the Defendant was irregular in payment not only to the Plaintiff but also to other contractors.
5. It is submitted that due to the said delay, Plaintiff was required to suffer a loss, as the work had stopped for no fault on the part of the Plaintiff. Thereafter, Plaintiff completed the plinth work and also simultaneously initiated the work of slab of first floor. However, one of the Director of the Defendant, informed that the Defendant was unable to obtain further Commencement Certificate from Vasai-Virar Municipal Corporation, and therefore, the construction work had to be stalled.
6. It is the case of the Plaintiff that the Plaintiff initiated and completed the work at the site and has raised the bills i.e. R.A. No.1 to R.A. No.7 as per work completed and the tax invoices thereon towards the payment of amount received against the work order dated 17th June 2016 which have been communicated to the Defendant from time to time. That the authenticity of the bills and the quality and quantity of the work done was always checked and verified by the Defendant’s representative and Architect and on submission of such Completion avk 3/23 Certificate, the necessary payment was released from the concerned bank. That upon raising and communicating the bills and tax invoices towards the payment of work undertaken and completed by the Plaintiff, the Defendant has paid Rs.1,74,88,154/- by cheques which have been received by the Plaintiff. It is submitted that though the Plaintiff completed the work to the extent mentioned in the bills and tax invoices, the total built up area was not ascertained by the Defendant and all bills were raised and settled at a percentage of the approximate total area, as mentioned in the work order. The Plaintiff has submitted that despite various meetings, as set out in the plaint, to calculate the total work area, neither the Defendant nor their Architect communicated the final area statement to the Plaintiff and therefore left with no choice, the Plaintiff calculated the entire workable area from the drawing and sketch submitted by the Defendant and his Architect at the time of commencement of the work as 1,21,337 sq.feet and requested the Defendant to make the balance payment in accordance with the mail dated 9th September 2017. However, since the Defendant did not consider the request of the Plaintiff for the payment of the balance amount towards the total work done by the Plaintiff, the Plaintiff addressed a notice dated 16th September 2017 to the Defendant making a demand of Rs.1,35,00,065/-. However, to the avk 4/23 shock and surprise of the Plaintiff, the Defendant addressed a termination notice dated 10th October 2017 terminating the work order and in turn demanded a refund of Rs.91,84,078/- from the Plaintiff. According to the Plaintiff, vide the said termination notice, the Defendant impliedly admitted the part of the claim of the Plaintiff towards payment of balance amount of total work done by the Plaintiff. It is submitted that the Defendant has falsely and incorrectly mentioned the total area in the termination letter as 77,363.10 sq.feet and the total work undertaken by the Plaintiff. Thereafter, the Defendant addressed a reminder dated 13th November 2017 with respect to the termination notice and called upon the Plaintiff to make payment of Rs.91,84,078/- towards the alleged dues. It is submitted that the Plaintiff / Respondent filed reply posted on 2nd December 2017 denying contentions in the termination notice dated 10th October 2017 and reminder dated 13th November 2017. That since the Defendant has failed and neglected to pay the balance amount towards the total work done by the Plaintiff of Rs.1,35,00,065/- and illegally terminated the work order dated 17th June 2016 and made a demand of Rs.91,84,078/-, the Plaintiff is compelled to approach this Court, and therefore, this suit has been filed as a summary suit on 7th February
2018. avk 5/23
7. Mr.Deep Madnani, learned Counsel for the Plaintiff, would submit that the summary suit was registered on 27th July 2018 and a writ of summons dated 7th August 2018 along with a copy of the plaint and annexures was duly served upon the Defendant and acknowledged by the Defendant on 18th September 2018, which is clearly borne out by paragraph 3 of the affidavit of service filed in this Court on 25th October 2018. Mr.Madnani would submit that the timeline in accordance with Order XXXVII of Code of Civil Procedure, 1908, to file Vakalatnama and / or enter appearance on behalf of the Defendant is ten days from the date of service of writ of summons, which ended on 28th September 2018. Learned Counsel adverts to the bailiff’s report dated 16th October 2018 submitting that the same clearly indicates that the writ of summons with plaint was duly served on 18th September 2018 upon the receiving person of the Defendant having address as mentioned in the cause title along with a duplicate copy of the writ of summons with plaint and the said clerk had signed and stamped an acknowledgment on the original of the writ of summons. Learned Counsel would submit that the Chamber Summons has been filed by the Defendant on 27th June 2019 after a delay of 282 days. avk 6/23
8. That, thereafter, on 25th April 2023, there was an order of this Court directing that the matter to proceed ex-parte against the Defendant, perhaps, since the Chamber Summons was not brought to the notice of the Court. However, by order dated 14th June 2023, the Plaintiff was directed to file a reply to the Chamber Summons. This Court also took note of the fact that the pendency of this Chamber Summons was not pointed out, and therefore, an order was passed on 25th April 2023 to place the matter on 14th June 2023 for ex-parte order. Thereafter, reply and rejoinder were filed and the matter came up for hearing of the Chamber Summons on 24th August 2023 when the matter was substantially heard and listed for continued hearing on 25th August 2023. Thereafter, arguments have been concluded on 25th August 2023 and the judgment has been reserved.
9. Mr.Madnani would submit that if the Defendant has not entered appearance within ten days, in the absence of memo of appearance on behalf of Defendant, the Plaintiff is entitled to judgment and further that the Court can excuse delay for a certain period but the same cannot be mechanically done but if the delay is long in a suit of summary nature, such long delay is inexcusable and cannot be avk 7/23 condoned if no sufficient cause is shown and the Defendant fails to assign reasons for such a long delay.
10. Mr.Madnani has relied upon following two decisions of the Delhi High Court in support of his contentions:
(i) Emmsons International Ltd. vs. Harshvardhan Chemicals &
(ii) Anand Shekhar Singh vs. M/s.Apco Construction Pvt. Ltd. and
11. On the other hand, Mr.Chitnis, learned Counsel for the Applicant/Defendant, would submit that no amount of whatsoever nature is due and payable by the Defendant to the Plaintiff, let alone the amount of Rs.1,35,00,000/- claimed by the Plaintiff along with interest at 24% per annum which is not due and payable by the Defendant to the Plaintiff. It is denied that there are undisputed work orders and invoices issued by the Plaintiff under which the Defendant was liable to pay the amount. It is denied that plaintiff had carried out the construction work as has been wrongly contended by the Plaintiff in the orders and invoices. Infact, it is the Defendant who is entitled to recover from the Plaintiff a sum of Rs.91,84,078/- along with interest accrued thereon as also the loss and damages suffered by the 1 2005 (80) DRJ 513 2 CS(OS) 3381 OF 2012 decided on 24th December 2014 avk 8/23 Defendant as the Plaintiff failed and neglected to carry out the RCC Construction within the time stipulated in the contract which has resulted in a huge loss in construction of the Vasai Central Mall. It is submitted that time was the essence of the said contract for carrying out the construction work by the Plaintiff and inspite of repeated requests and reminders, the Plaintiff failed to carry out the construction within the time stipulated in the agreement dated 17th June 2016. It is submitted that payments were always made to the Plaintiff in time and the Plaintiff has recovered excess amounts for the work which was not done by the Plaintiff and thus has put the Defendant to loss and inconvenience.
12. It is submitted that the Plaintiff has intentionally and deliberatedly raised the issue of not annexing the copies of medical bills of the Director of the Defendant, as well as the medical discharge summary issued by Asian Heart Institute. It is submitted that the Defendant has been suffering from multi vessel coronary artery disease since 2005 and was taking treatment and was admitted to Asian Heart Institute on 11th September 2018. The Defendant is also suffering from diabetes mellitus and on a number of occasions suffered chest pain and therefore the doctors advised him to take rest. It is submitted that avk 9/23 during the period from July 2018 to October 2018, the Defendant/ Applicant suffered severe pain and heart problems and was advised to take rest by the doctors and was not attending office. That it is only the said Director of the Defendant who looks after the company affairs. The Defendant has annexed the medical reports issued by Asian Heart Institute as well as of Kokilaben Dhirubhai Ambani hospital in support of his contention. That, therefore, during the period from July 2018 to June 2019, the Defendant was unaware of any such proceedings having been filed by the Plaintiff against the Defendant. That even though the said Director started attending office from January 2019, however, even after that the staff had forgotten to handover the packet containing the plaint and the writ of summons. That, since there was a leakage problem in the Defendant’s office the work of water proofing had to be done in the office. That in the second week of June, 2019 the work of water proofing and painting work started. At that time the papers and furniture where cleaned up and shifted. The packet of the suit papers was found and thereafter handed over to the said Director on 20th June,
2019. Being shocked and surprised that the same must have been served a few months back, the said Director contacted the present Advocate who advised filing of Chamber Summons for filing Vakalatnama in the matter as there was a delay beyond the period of avk 10/23 ten days after receipt of the writ of summons. Hence, the Defendant could not engage any Advocate to represent the Defendant in time. The delay, it is submitted, is neither deliberate nor intentional.
13. It is submitted that, apart from the Defendant, his wife is one of the Directors of the Defendant but as she was looking after the Defendant(Applicant), the proceedings for grant of leave to file Vakalatnama and to appear and defend the suit could not be initiated in time. That the son of the Defendant, Mr.Lynton, also suffered a brain hemmorrhage and had to undergo brain surgery somewhere in the month of October 2019.
14. Mr.Chitnis would submit that though the writ of summons was served on the office of the Defendant company on 18th September 2018, however as the Defendant and his wife were not attending the office as the Defendant/Applicant was suffering from heart disease and his staff could not inform about the said proceedings being served. It is not disputed that the said proccedings have been served on 18th September 2018, however, due to aforesaid medical exigencies, the Vakalatnama could not be filed in the matter in time and the matter could not be attended to by the Defendant. Therefore, it is submitted avk 11/23 by the learned Counsel for the Defendant that sufficient ground has been made out by the Defendant for not filing the appearance in time and that there is no deliberate or intentional delay on the part of the Defendant for not approaching this Court for filing the Application. It is submitted that the Defendant has a good case on merits and has explained the sufficient reasons for not filing the Vakalatnama in time.
15. It is submitted that the Plaintiff is intentionally and deliberately seeking to obtain an ex-parte decree. As per principles of natural justice the Defendant is entitled to file his Vakalatnama and defend the above proceedings. It is submitted that under Order XXXVII Rule 2 of the CPC, the Defendant has been able to demonstrate that he has a valid cause which has been legitimately and properly explained.
16. It is submitted that the Defendant has to recover large amounts from the Plaintiff towards its claims arising under the agreement dated 17th June 2016, and therefore, in the facts and circumstances of all above, the Defendant is entitled to leave to defend the suit and hence the Chamber Summons for condoning the delay in filing the Vakalatnama be made absolute and the Defendant be permitted to file appearance. avk 12/23
17. Mr. Madnani, learned Counsel for the Plaintiff would submit that the Defendant has miserably failed to place on record any reasonable and cogent explanation for the delay in filing Vakalatnama; that the explanation offered is neither cogent nor bonafide and no documentary evidence has been placed on record to substantiate delay.
18. It is submitted that the main object of Order 37 of the Civil Procedure Code, 1908 for summary disposal of suits will be defeated if there is delay in filing Vakalatnama or entering appearance and if such frivolous applications are entertained.
19. Learned Counsel would submit that the discretion vested in the Court cannot be exercised in a whimsical manner as it has to be exercised judiciously after the perusal of documents on record and the explanation offered for such delay. It is submitted that no reasonable explanation has been offered for the delay of 282 days and that delays have to be explained per day wise. That the intent of the Defendant is to prolong the pendency of the suit to ensure that the bonafide debt of the Plaintiff is not paid and the matter is delayed. avk 13/23
20. Learned Counsel submits that no appropriate explanation has been afforded for the delay of 282 days, Chamber Summons is bereft of any reasons or corroborative evidence or proof. It is submitted that, the Director of the Defendant has not placed on record any evidence of his undergoing treatment for the period starting from July-2018 to October-2018.
21. Learned Counsel for the Plaintiff would submit that out of the 282 days, only 1 day delay has been explained by way of the discharge summary which indicates that the Director of the Defendant company was admitted on 11th September, 2018 and discharged on the same day. It is submitted that no evidence/photographs/bills of the alleged leakage, repair, painting work carried out at the premises of the Defendant company has been provided.
22. Learned Counsel for the Plaintiff submits that in the absence of any justification, the taking out of Chamber Summons is only a dilatory tactic and a feeble attempt to wriggle out of the contractual obligation to pay the outstanding dues to the Plaintiff. It is submitted that admittedly since the receipt of the writ of summons and the plaint if no Vakalatnama has been filed within 10 days in accordance with the writ avk 14/23 of summons, the Plaintiff will be entitled at any time after the expiration of 10 days to obtain decree. It is submitted therefore, the Chamber of Summons be dismissed.
23. I have heard the learned Counsel for the parties and considered the rival contentions.
24. This suit has been filed as a summary suit on 27th July 2018, by the Plaintiff against the Defendant Company praying for a decree for a sum of Rs.1,35,00,065/- with further penal interest at the rate of 24% per annum from the date of filing of the suit till its realization as per the statement of claim. It is also not in dispute that the Writ of summons dated 7th August 2018 along with a copy of the plaint and annexures was duly served upon the Defendant and acknowledged by the Defendant on 18th September 2018, which is clearly borne out from paragraph 3 of the affidavit of service filed in this Court on 25th October
2018. As per Order XXXVII of CPC time to file Vakalatnama and / or enter appearance on behalf of the Defendant is ten days from the date of service of writ of summons, which ended on 28th September 2018.
25. The Chamber Summons has been filed by the Defendant on 27th June 2019 after a delay of 282 days. avk 15/23
26. In accordance with Order XXXVII Rule 3 of the CPC, the time to file Vakalatnama and / or enter appearance on behalf of the Defendant is ten days from the date of service of writ of summons. Order XXXVII Rule 3 of the CPC reads as under: “Rule 3. Procedure for the appearance of defendant. (1) In a suit to which this Order applies, the plaintiff shall, together with the summons under Rule 2, serve on the defendant a copy of the plaint and annexes thereto and the defendant may, at any time within ten days of such service, enter an appearance either in person or by pleader and, in either case, he shall file in Court an address for service of notices on him. (2) Unless otherwise order, all summonses, notices and other judicial processes, required to be served on the defendant, shall deemed to have been duly served on him if they are left at the address given by him for such service. (3) On the day of entering the appearance, notice of such appearance shall be given by the defendant to the plaintiff’s pleader, or, if the plaintiff sues in person, to the plaintiff himself, either by notice delivered at or sent by presaid letter directed to the address of the plaintiff’s pleader or of the plaintiff, as the case may be. (4) If the defendant enters an appearance, the plaintiff shall thereafter serve on the defendant a summons for judgment in Form No. 4-A in Appendix B for such other Form as may be prescribed from time to time, returnable not less than ten days from the date of service supported by an affidavit verifying the cause of action and the amount claimed and stating that in his belief there is no defence to the suit. (5) The defendant may, at any time within ten days from service of such summons for judgment, by affidavit or otherwise disclosing such facts as may be deemed sufficient to entitle him to defend, apply on such summons for leave to avk 16/23 defend such suit, and leave to defend may be granted to him unconditionally or upon such terms as may appear to the Court or Judge to be just: Provided 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 has a substantial defence to raise or that the defence intended to be put up by the defendant is frivolous or vexatious: Provided further that, where a part of the amount claimed by the the plaintiff is admitted by the defendant to be due from him, leave to defend the suit shall not be granted unless the amount so admitted to be due is deposited by the defendant in Court. (6) At the hearing of such summons for judgment,- (a) if the defendant has not applied for leave to defend, or if such application has been made and is refused, the plaintiff shall be entitled to judgment forthwith; or (b) if the defendant is permitted to defend as to the whole or any part of the claim, the Court or Judge may direct him to give such security and within such time as may be fixed by the Court or Judge and that, on failure to give such security with the time specified by the Court or Judge or to carry out such other directions as may have been given by the Court or judge, the plaintiff shall be entitled to judgment forthwith. (7) The Court or Judge may, for sufficient cause shown by the defendant, excuse the delay of the defendant in entering an appearance or in applying for leave to defend the suit.” (emphasis supplied)
27. As can be seen from the provisions of Order XXXVII Rule 3(7) of the CPC quoted above, the Court can excuse the delay if sufficient avk 17/23 cause is shown by the Defendant for the delay in entering an appearance or in applying for leave to defend the suit.
28. I am therefore conscious that this Application has been made in a summary suit where a summary procedure with strict time lines is prescribed for summary disposal of suits. However, as noted above, Sub-rule (7) of Rule 3 itself empowers the Court to condone the delay if sufficient cause is shown by the Defendant for delay in entering an appearance or in applying for leave to defend. The length of delay is not the determinative criteria. If a sufficient cause is made out, the length of delay does not matter. The Courts lean in favour of condonation of delay so as to advance the cause of substantive justice, on the premise that the procedure, which is a handmaiden of justice, should not be allowed to score a march over substantive justice. I am also mindful of the fact that refusal to exercise the discretion in favour of the Applicant, in the instant case, would entail the consequence of depriving the Defendant of leave to defend, if the Court so finds the Defendant entitled to upon the hearing of the Summons for Judgment.
29. The Defendant is suffering from multi vessel coronary artery disease since 2005 and has been taking treatment and was also admitted in Asian Heart Institute. The Defendant is also suffering from avk 18/23 diabetic mellitus and on a number of occasions suffered chest pain and therefore the doctors advised him to take rest. Also during the period from July 2018 to October 2018, the Defendant suffered severe pain and heart problem and was advised to take rest by the doctors. The Defendant has annexed the medical reports issued by Asian Heart Institute in support of his contention. The Defendant being unaware of these proceedings having been filed by the Plaintiff against the Defendant could not engage any Advocate to represent the Defendant in time. Though his wife is one of the Directors of the Defendant but as she was looking after the Defendant(Applicant), the proceedings for grant of leave to file Vakalatnama and to appear and defend the suit could not be initiated in time. Also, the son of the Defendant, Mr.Lynton, suffered a brain hemmorrhage and had to undergo brain surgery somewhere in the month of October 2019. Therefore, as the Defendant and his wife were not attending the office as the Defendant/ Applicant was suffering from heart disease and his staff did not inform him about the said proceedings being served, it is not disputed that the said proccedings have been served on 18th September 2018. Therefore, due to the aforesaid exigencies, the Vakalatnama could not be filed in the matter and the matter could not be attended to by the Defendant. avk 19/23
30. No doubt as claimed by the learned Counsel for the Plaintiff that the whole purpose of expeditious and summary disposal of an Order 37 of the Civil Procedure Code, 1908, suit which avowedly prescribes summary procedure is totally defeated if the Defendant who under Order 37 Rule (3) of the Civil Procedure Code, 1908 has been served with the statutory summons is given further opportunity to file the application for condonation of delay in filing memo of appearance and is obviously not interested in any expeditious disposal and can easily delay proceedings by making himself scarce. Once the service is complete and 10 days have elapsed then Summons for Judgment under Sub-section (4) is only required to be served on such Counsel, who files memo of appearance on behalf of the defendant within the stipulated time of 10 days of receipt of the writ of summons. All such hearings could have been averted and valuable judicial time and effort saved in case the Defendant’s Counsel had taken care in filing the memo of appearance on behalf of the Defendant within the stipulated time of 10 days of the receipt of the writ of summons.
31. The two decisions cited by the learned Counsel reemphasize the aforesaid submissions. However, as noted, the Court may for sufficient avk 20/23 cause shown by the Defendant excuse the delay of the Defendant in entering appearance or in applying for leave to defend. In the above two cases, the Courts found the delays to be inexcusable on the basis of the respective facts of those cases. In the case of Emmsons International Ltd Vs. Harshvardhan Chemicals & Minerals Ltd (supra), that was a case where the court has decreed the suit as the Defendant had neither filed any application for condonation of delay nor memo of appearance and 4 months after having appeared in the matter, thereafter, when the matter was listed again, further time was sought to file application for condonation of delay but no application was filed and time was sought to take instructions to settle the matter. As on the date of the decision, neither any application for condonation of delay nor any memo of appearance had been filed. Those are not facts here. This is a case where the Director of the Defendant who was running the show was unable to attend the office due to ill health having been advised bedrest and when he resumed office, his staff did not inform him about the same. Thereafter there was some repair and painting work and shifting when the packet containing the writ of summons and plaint was discovered. Although not many details have been provided, but there are two medical reports annexed to the Rejoinder indicating the health condition of the Director of the Defendant as suffering from avk 21/23 multi vessel coronary artery disease. No contrary facts have brought on record by the Plaintiff to disprove the same.
32. Even the decision of Delhi High Court in the case of Anand Shekhar Singh Vs. M/s. Apco Construction Pvt. Ltd and Anr (supra), relied upon by the Plaintiff is distinguishable on the facts in as much as what weighed with the Hon’ble Court was that it was a case of bouncing of a cheque which was given as security for repayment of a loan and the Defendant failed to assign reasons for the long delay and no sufficient cause was shown. As noted above, in the present case, the facts are distinguishable and this Court has already observed that sufficient cause has been shown by the Defendant. Not only was he suffering from an adverse and serious health conditions such as the multi vessel coronary artery disease in addition to diabetes and hypertension and not only that his wife was taking care of him but even his son was not well and had suffered brain hemorrhage, which has not been controverted by the Plaintiffs with any material or cogent evidence.
33. Therefore, in my view, sufficient cause has been made out by the Defendant for not filing the appearance in time and that there is no avk 22/23 deliberate or intentional delay on the part of the Defendant for not approaching this Court for filing the Application and for making an Application for grant of leave to file an appearance in this Court but at the same time the delay of 282 days cannot be ignored, and therefore, although there is sufficient cause for the delay, costs need to be imposed, as it cannot be denied that if the delay was not condoned, the Plaintiff would be entitled to a decree, and therefore, I propose to balance the situation by imposing costs. In this view of the matter, I am inclined to allow the Chamber Summons, subject to payment of costs. Accordingly, the following order is passed: ORDER
(i) The Chamber Summons is made absolute in terms of Prayer
Clauses (a) and (b), subject to the Applicant-Defendant making payment of costs of Rs.50,000/- to the Plaintiff within a period of four weeks.
(ii) If the aforesaid deposit is made within the stipulated period, the delay of 282 days in filing the Vakalatnama in the summary suit be condoned and the Vakalatnama be taken on file.
(iii) The Chamber Summons, accordingly, stands disposed.