Naveen Sangari vs Escorts Ltd.

Rajiv Sahai Endlaw, J.—The plaintiff has instituted this suit under Order 37 of the CPC for recovery of Rs. 53,06,208/- together with interest at the rate of 15% per annum from the date of institution of the suit till realization, pleading:

(i) that the plaintiff served the defendant Company for 27 years in different capacities and ultimately resigned on 14.12.2007;

(ii) that the plaintiff in the resignation letter dated 14.12.2007 as well as subsequently requested the defendant to settle his employment dues but the same have not been settled;

(iii) the details of employment dues as on 30.09.2010 are as under:

DETAILED CALCULATION OF DUES

(iv) that the defendant, in order to evade its aforesaid liability, has filed CS(OS) No. 2252/2007 alleging the plaintiff to be guilty of taking away the know-how and technology of the defendant and carrying on the competitive parallel business; and,

(v) that the suit is based on a written employment contract dated 09.09.1982, written amendments/revisions thereto by the defendant from time to time including by letters dated 12.10.1998, 16.09.1999, 25.12.2000, 20.07.2001, 01.08.2002, 07.10.2003, 17.08.2004, 18.10.2005 and 17.07.2007 and the written employment policies of the defendant Company applicable to the employees.

The defendant has sought leave to defend on the grounds:

(i) that CS(OS) No. 2252/2007 against the plaintiff was filed one month before the alleged resignation of the plaintiff and upon discovering that the plaintiff in blatant violation of contract of his employment had set up a business parallel to that of the defendant, while still in employment of the defendant;

(ii) that the plaintiff for setting up of the said business, has utilized the confidential technical information and know-how of the defendant and had entered into direct negotiations with the foreign collaborators of the defendants and had weaned away the key employees of the defendant and also siphoned away the monies of the defendant;

(iii) that only after coming to know of the filing of the said suit and ex parte ad interim injunction against him, the plaintiff hurriedly as an afterthought and with a view to evade further action by the defendant, tendered his resignation, without handing over charge and absented from duty without permission; and,

(iv) that the plaintiff, in the plaint, has suppressed all the aforesaid facts.

The senior counsel for the plaintiff has argued that the only ground on which the defendant has sought leave is of the defendant''s counter claim against the plaintiff and the defendant else in the leave to defend application has not controverted the claim in the suit. Reliance is placed on Bramec Suri P. Ltd. Vs. Suri Smith Chem., , Punjab and Sind Bank Vs. S.K. Tulshan, and Deutsche Raitco Gmbh Vs. Mohan Murti, to contend that merely because the defendant may have a counter claim against the plaintiff is no ground to grant leave to defend. Reliance is further placed on Rajinder Kumar Khanna Vs. The Oriental Insurance Co. and another, laying down that a suit under Order 37 is maintainable even where the sum claimed can be arrived at by arithmetical calculation.

It has been enquired from the senior counsel for the plaintiff as to how the suit is maintainable under Order 37 and whether not, even in the absence of a leave to defend, it is incumbent upon the Court to, before passing a decree under Order 37, satisfy itself of the maintainability of the suit thereunder.

The senior counsel for the plaintiff has argued that the defendant in the present case has filed the application for leave to defend and has not taken any such plea and the plaintiff is thus entitled to a decree.

I am unable to agree. Order 37 is intended to be an exception to the ordinary adversarial adjudicatory process adopted in this country and in which process certain delays owing to the requirement of giving opportunity of being heard and lead evidence are implicit. The legislature being probably of the view that where the suit is only for recovery of money on the basis inter alia of a document, the ordinary adversarial adjudicatory procedure be not automatically followed unless the defendant discloses a substantial defence, enacted Order 37. However the procedure prescribed under Order 37 can be adopted only when the suit falls within the ambit of the said provision and not otherwise. Merely because a claim has reference to a document would not make the suit fall under Order 37.

The senior counsel for the plaintiff has thus been asked to satisfy as to from which document the entitlement of the plaintiff to the amounts aforesaid under various heads as listed out hereinabove can be deciphered.

The senior counsel for the plaintiff has invited attention only to the letter dated 17.07.2007 of the defendant to the plaintiff filed at serial no. 5 of the list of documents dated 25.11.2010 filed by the plaintiff and particularly to page no. 18 thereof.

Page 18 is not signed by any party. There is nothing in the letter dated 17.07.2007 at page no. 17 to indicate that there is any annexure thereto. The plaintiff has subsequently under list of documents dated 02.12.2010 filed original of the said letter and the original of the corresponding page no. 18 is not found to have the writings in hand as found in the photocopy at page no. 18.

The senior counsel for the defendant has argued that though the defendant does not dispute the letter dated 17.07.2007 at page no. 17 but disputes page no. 18 to be part of the said letter.

The senior counsel for the plaintiff argues that no such plea has been taken in the application for leave to defend.

Order 37 Rule 3(1) requires service on the defendant not only of plaint but also of annexures thereof i.e. the documents filed by the plaintiff along with the plaint. It is not in dispute that the list of documents dated 25.11.2010 together with documents was so served upon the defendant. The said list at serial no. 5 refers to the letter dated 17.07.2007 and describes the same as filed at pages no. 17 and 18. It is thus evident that the plaintiff in the plaint and its annexures pleaded the letter dated 17.07.2007 to be comprising of pages no. 17 as well as no. 18. The defendant in the application for leave to defend has not taken a ground that page no. 18 is not a part of the letter at page no. 17. It is the settled position in law that a defendant who applies for leave to defend is deemed to have admitted the contents of the plaint which are not controverted in the application for leave to defend. In the face of the categorical assertion of the plaintiff in the annexures to the plaint that the letter dated 17.07.2007 comprise of not only page no. 17 but also of page no. 18 and non traverse thereof by the defendant, the defendant is deemed to have admitted the said fact. I am therefore inclined to read page no. 18 as part of letter dated 17.07.2007.

However that still does not bring the suit under Order 37. The senior counsel for the plaintiff inspite of being repeatedly asked to demonstrate the documents in which a contract in writing for the claim under each and every head can be found, has been unable to do so.

Be that as it may, what definitely takes the suit outside the ambit of Order 37 is the fact that the grant of the decree in favour of the plaintiff is dependent not only on the agreement in writing for payment of various allowances vis. HRA, Superannuation Allowance, Special Allowance, Professional Allowance, Medical, Entertainment Allowance, Car Substitution Allowance, LTA, Leave Encashment, Gratuity, Superannuation, Key Man Policy of which payment is stated to be due but also upon writing as to the period for which the said allowances are due. The senior counsel for the plaintiff has as such been asked as to what is the document to show salary of 14 days being due or leave encashment for 210 days is payable.

The senior counsel for the plaintiff is unable to do so.

It is worth highlighting that for a suit to be filed under Order 37, the entire claim in the suit has to be within the ambit of Order 37 and merely because some of the claims in the suit may satisfy the requirement of Order 37, is no reason to entertain the suit thereunder.

I am therefore unable to hold the suit to be maintainable under Order 37 of the CPC. Once that is so, the application for leave to defend becomes inconsequential and is disposed of as infructuous.

To complete the record, it may be mentioned that the senior counsel for the defendant has also argued that under the policy for the employees of the defendant qua several of the heads under which claim is made, applications have to be submitted and to be verified and which has not been done by the plaintiff. It is also argued that in the superannuation scheme there is no provision for payment of superannuation in the case of resignation and on which account the plaintiff has claimed a sum of Rs. 18 lacs. The senior counsel for the defendant has on the aspect of maintainability also invited attention to Juki Singapore PTE Ltd. Vs. Jay Cee Enterprises Pvt. Ltd. 157 (2009) DLT 580 and on the principle for grant of leave to defend relied on Krishan Kumar Karnani Vs. M/s Reliance Industries Ltd. and Another, .

I may also record that it was the contention of the senior counsel for the plaintiff that the claims had not been disputed by the defendant inspite of the legal notices preceding the suit. In response thereto, it was enquired from the counsels whether the principles of Order 12 Rule 6 could be attracted at the stage of leave to defend. Though no arguments on this aspect were addressed but I am of the opinion that Order 37 having prescribed a special procedure, if a suit is not found to be maintainable under Order 12 Rule 6 of the CPC, before giving an opportunity to file written statement, no decree of admissions also can be passed. The senior counsel for plaintiff protested that after a thread bare discussion, the defendant in its written statement will deny everything which has not been denied in the application for leave to defend. However that is a risk which a plaintiff, who chooses to file under Order 37, when it is not so maintainable, runs. I may mention that a Division Bench of this Court in judgment dated 30th August, 2011 in FAO(OS) No. 128/2011 titled Modipon Ltd. Vs. M/s. Singhal Transport Corporation held that Order 12 Rule 6 can be invoked in an Order 37 suit, if the suit is maintainable under Order 37. Here, as aforesaid, the suit is found to be not maintainable under Order 37.

Accordingly, the suit is ordered to be treated as an ordinary suit.

The defendant to file written statement within four weeks. Replication within four weeks thereof. The parties to file their documents along with their pleadings. List before the Joint Registrar on 24th July, 2013 for admission/denial of documents and before this Bench on 2nd September, 2013 for framing of issues if any.