Jolly Constructions vs Stephan Bernard Construction Co.

A.P. Bhangale, J.—Heard submission at the bar. Perused the affidavits on the record.

The suit is filed by a registered partnership firm dealing in construction as sub-contractor. According to the plaintiffs, the defendants had invited offers for construction of project Royal Palms (I) Private Limited to construct Mastermind II & III projects at Goregaon (East), Mumbai. As the defendants were awarded contract from M/s. National Buildings Construction Corporation Limited and also from Royal Palms, a letter dated 9-4-2004 was sent by the defendants to the plaintiffs. According to the plaintiffs, balance sum of Rs. 22,51,670/- is payable to the plaintiffs by the defendants pursuant to the statement which is prepared and signed by both the parties (vide Exhibit-B to the plaint). It is further contended that two cheques were issued by the defendants i.e., cheque bearing No. 032166 for a sum of Rs. 2,00,000/- and cheque No. 005432, dated 5-4-2005, for a sum of Rs. 20,51,67 0/-. Both the cheques were dishonoured for the reason insufficient fund and thus, according to the plaintiffs, the suit was instituted to recover the liquidated sum.

The defendants have opposed the claim of the plaintiffs on the ground that the plaintiffs have suppressed true facts by conveniently annexing document, the copy of which is unfounded by the plaintiffs to support the suit claim. According to the learned Counsel for the defendants, as copy of document is annexed as Exhibit-I to the affidavit in reply, the plaintiffs had already acknowledged receiving cash amount of Rs. 22,51,670/- on 17-2-2005 as full and final settlement. Therefore, there was no question of issuing cheques again for the same amounts which were allegedly due. Further more, the plaintiffs, as a natural course of action, would have prosecuted the defendants if the cheques were dishonoured. Therefore, it is contended that the suit claim is false and frivolous and the summons for judgment ought to be dismissed by granting unconditional leave to defend the suit.

The legal position in this regard is well-settled by the decision of the Supreme Court in Mechelec Engineers and Manufacturers Vs. Basic Equipment Corporation, wherein, in para 8, it has laid down the following principles:

In Sm. Kiranmoyee Dassi v. Dr. J. Chatterjee (1945) 49 Cal WN 246 at p.253, Das, J., after a comprehensive review of authorities on the subject, stated the principles applicable to cases covered by Order 37, C.P.C. in the form of the following propositions (at p.253):

(a) If the defendant satisfies the Court that he has a good defence to the claim on its merits the plaintiff is not entitled to leave to sign judgment and the defendant is entitled to unconditional leave to defend.

(b) If the defendant raises a triable issue indicating that he has a fair or bona fide or reasonable defence although not a positively good defence the plaintiff is not entitled to sign judgment and the defendant is entitled to unconditional leave to defend.

(c) If the defendant discloses such facts as may be deemed sufficient to entitle him to defend, that is to say, although the affidavit does not positively and immediately make it clear that he had a defence, yet, shows such a state of facts as leads to the inference that at the trial of the action he may be able to establish a defence to the plaintiffs claim the plaintiff is not entitled to judgment and the defendant is entitled to leave to defend but in such a case the Court may in its discretion impose conditions as to the time or mode of trial but not as to payment into Court or furnishing security.

(d) If the defendant has no defence or the defence set up is illusory or sham or practically moonshine then ordinarily the plaintiff is entitled to leave to sign judgment and the defendant is not entitled to leave to defend.

(e) If the defendant has no defence or the defence is illusory or sham or practically moonshine then although ordinarily the plaintiff is entitled to leave to sign judgment, the Court may protect the plaintiff by only allowing the defence to proceed if the amount claimed is paid into Court or otherwise secured and give leave to the defendant on such condition, and thereby show mercy to the defendant by enabling him to try to prove a defence.

Applying the said principles to the facts and circumstances of the present case, the dispute in the present case is covered by category (c), as quoted above. Hence, I am inclined to pass the following order:

ORDER

(a) The summons for judgment is rejected.

(b) Conditional leave to defend is granted. The defendants shall file their written statement within eight weeks. Hearing of the suit is expedited and shall be disposed of within eight weeks after framing of the issues.

(c) Liberty to the parties to apply for appointment of Commissioner to record evidence.

(d) The parties to produce the original documents relied upon by them in support of their respective contentions.