Sanjay Jain vs J.K. Transformers and Switch Gears and Anr

Kailash Gambhir

By this application moved under Order XXXVII Rule 3 Sub Rule 5 read with Section 151 CPC the defendants seek leave to defend. Arguing the leave to defend application counsel appearing for the defendants submits that the suit filed by the plaintiff does not fall within the provision of Order XXXVII Rule 2 CPC, as their exists no written contract between the parties to recover the debt or liquidated demand in money from the defendants. Counsel further submits that the plaintiff and the defendants were maintaining a running account and from time to time the defendants have been making payments towards the outstanding dues of the plaintiff but such payments were never made by the defendants invoice wise and, therefore, the plaintiff is not entitled to claim any amount in consequence to the invoices issued by the defendants without giving proper adjustment of the amounts made by the defendants in the running account. To support this argument the learned counsel for the defendants invited attention of this Court to the copy of the ledger account placed on record by the plaintiff himself, which clearly demonstrates that against various invoices, which are subject matter of the present suit, various payments in different break-up were made by the defendants. Citing an example of invoice No. 053 for an amount of Rs. 15,49,560/- counsel submits that against the said invoice the defendants had paid an amount of Rs. 5 lakhs on 11th June, 2009, another Rs. 5 lakhs on 22.6.2009 and yet another payment of Rs. 5 lakhs on 4.7.2009. Counsel also submits that the plaintiff had also malafidely raised certain false invoices, although no goods under such invoices were supplied by the plaintiff to the defendants. Counsel also submits that against invoice No. 357 dated 28.2.2009 the goods supplied were sub-standard and despite repeated requests made by the defendants, the plaintiff has not lifted the said sub-standard goods from the factory of the defendants. Counsel also submits that the goods supplied by the plaintiff vide bill No. 274 dated 3.12.2008 were returned back to the plaintiff because the goods under this invoice were of inferior quality. Counsel also submits, that issuance of C Forms by the defendants would not mean that the defendants have acknowledged the liability of various invoices in respect of which the C Forms were issued. Counsel for the defendants also raised objection with regard to the territorial jurisdiction of this Court on the premise that defendant No.2 is a permanent resident of Jammu while defendant No.1 is having its factory and office in Jammu. Counsel also submits that the entire cause of action arose in favour of the plaintiff at Jammu as the defendants had placed an order on the plaintiff at Jammu, goods were delivered at Jammu and C Forms were issued by the defendants from Jammu. Based on these submissions counsel for the defendants states that the defendants are entitled to unconditional leave to defend the present suit.

Counsel for the plaintiff on the other hand submits that the present suit filed by the plaintiff is based upon four invoices only and as per the settled legal position, the invoices supported with the C Forms issued by the defendants, constituted contract between the parties, therefore, it cannot be said that the suit filed by the plaintiff does not fall under Order XXXVII. Counsel also submits that the original C Forms issued by the defendants clearly disclosed invoice numbers and the amount of such invoice number and with the issuance of the C Forms, the defendants cannot turn around to say that goods were not supplied by the plaintiff to the defendants. Counsel further submits that the invoices mentioned by the defendants in their leave to defend application are not subject matter of the suit and, therefore, the defendants cannot escape their liability so far the four invoices are concerned. Counsel also submits that even if there was a running account between the parties, the same does not debar the remedy of the plaintiff to claim amount of individual invoices. Counsel also submits that this Court has the territorial jurisdiction to try and entertain the present suit as all the orders were placed by the plaintiff in Delhi and the defendant No. 2 is having residence/branch office at Yojana Vihar, Delhi. Counsel also submits that even the summons on both the defendants were duly served at Delhi address and likewise, the legal notice was sent by the plaintiff which was also served upon the defendants at Delhi.

I have heard learned counsel for the parties.

Order XXXVII CPC provides summary procedure entitling the plaintiff approaching the Court to claim quick decree instead of taking a longer route of a regular suit subject, however, to the condition that the suit filed by the plaintiff is clearly covered under the provisions of Order XXXVII and secondly the defendants have failed to disclose any substantial defense or the defense disclosed by the defendants is not only a moonshine but frivolous and vexatious on the very face of it. The plaintiff has filed the present suit based on four invoices in respect of which even C Forms were also issued by the defendants and, therefore, it cannot be said that the said invoices supported by the C Forms do not constitute a written contract between the parties. No satisfactory explanation came forth from the counsel for the plaintiff to rebut this contention. Dealing with the other contentions raised by the defendants that the parties were maintaining a running account, for that the answer lies in the copy of ledger account placed on record by the plaintiff himself. The copy of the ledger account clearly demonstrates that the defendants were not making payments as per the amount of respective invoices but were rather advancing payments in part against the accumulated dues in respect of various invoices. The defendants on the other hand have not been able to give any satisfactory answer to dispute their outstanding liability, with regard to the said four invoices for which they had even issued C Forms.

To balance the equities between the parties, this Court is inclined to grant conditional leave to the defendants to contest the present suit. Let principal amount of four invoices be deposited by the defendant within a period of four weeks from the date of this order and subject to the deposit of the said amount the defendants will become entitled to contest the present suit.

With the above directions the present leave to defend application is disposed of.

On the deposit of the principal amount of four invoices, the defendants shall file their written statement within a period of four weeks and replication thereto by the plaintiff within a period of two weeks. List this matter on 21st November, 2012.