Soneko Marketing Pvt Ltd vs Rashmi Metaliks Ltd

The Court : These applications have been filed by the defendant for dismissal of the summary suit for being defective in form and for leave to defend the summary suit upon filing of the written statement. As is evident, the prayer made in the two applications are contradictory to each other as the relief sought in the second application can only be entertained if the first fails. Since the defendant, has not elected which application it would like to press, the application for dismissal of the summary suit being G.A. No. 1060 of 2018 (although made after the application for leave to defend), is taken up first.

Mr. Soumya Roy, learned counsel appearing for the defendant relies on an order dated 4th February, 2013 passed in a winding up proceedings filed by the plaintiff by which the learned Judge was pleased to record the following:

"It is not necessary to conclusively answer the question since it is well recognized that even an arguable defence will not result in a creditor's winding-up petition being admitted or advertised. The covering letter of January 15, 2011 did not acknowledge that there was any amount due or owing from the company to the petitioner. Even if it is assumed that the relevant form dated April 30, 2009 made an admission that some amount was due and owing from the company to the petitioner, since the present petition has been filed in Court beyond a period of three years and four months from the date of the perceived acknowledgement contained in the form, the claim cannot be entertained only by virtue of the contents of the form. If then, it does not appear from the face of the covering letter of January 15, 2011 that there is any acknowledgement of the company's indebtedness to the petitioner which would entitle the petitioner to count a fresh period of limitation from such acknowledgement, then there is an arguable defence which has been made out.

On the basis of the material now brought by the petitioner, it cannot be conclusively said that the claim can be entertained or that the petitioner can pursue the same. It will be open to the petitioner to rely on appropriate material in the event the petitioner makes the claim to be the subject-matter of a regular action, but the company petition is liable to be permanently stayed on the basis of the affidavit evidence now available."

The winding up petition was permanently stayed on the basis of the above finding and the claim of the plaintiff (petitioner before the Company Court) was relegated to a suit.

On an appeal filed by the plaintiff from the above order, the Division Bench was of the view that the correspondence between the parties established a jural relationship and the claim of the plaintiff may not be time-barred.

The primary contention of counsel appearing for the applicant/defendant is that the order passed by the learned Single Judge on 4th February, 2013 had relegated the claim of the petitioner in the winding up proceeding to a suit and that the petitioner had been given leave to rely on appropriate material in the event the petitioner makes the claim to be a subject matter of a regular action. Counsel submits that the instant suit, which is a summary suit under Order XXXVII of The Code of Civil Procedure (CPC), is not a regular action and that no additional material has been brought by the plaintiff in the present suit. Counsel also relies on an order of the Hon'ble Justice Soumen Sen dated 16th September, 2014 passed in an application made by the defendant for leave to enter appearance in the suit. By the said order, the delay on the part of the defendant to enter appearance in the suit was condoned and it was further noted that the summons served on the defendant was not in the form as prescribed under the CPC. The defendant's application was allowed in terms of prayer (a) of the Master's Summons. Since counsel urges on the scope of the relief granted by this order, it is necessary to set out prayer (a) of the Master's Summons;

"Delay on the part of the defendant in entering an appearance in CS No.1509 of 2014 (Soneko Marketing (P) Ltd. -Vs- Rashmi Metaliks Limited) be condoned and the appearance on behalf of the defendant on 09.04.2014 be accepted;"

According to counsel, the order dated 16th September, 2014 can be construed as satisfying the requirements of Rule 3 (3) of Order XXXVII of the CPC. Counsel emphasizes that if the summons served on the defendant is not in proper form, the entire suit becomes defective and is liable to be dismissed.

Mr. Reetobroto Mitra, learned counsel appearing for the plaintiff and opposing the two applications, relies on Sub-Rule 3 of Rule (3) of Order XXXVII, and submits that even if the summons was not in proper form, the defendant was required to take certain procedural steps as mandated under the aforesaid provision which the defendant failed to do in the instant case. For a proper appreciation of the procedural requirements under Rule 3 (3) of Order XXXVII, the relevant portion of Order XXXVII is set out below:-

[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 annexures 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 ordered, all summonses, notices and other judicial processes, required to be served on the defendant, shall be 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 a pre-paid 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.4A in Appendix B or 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.]

Mr. Mitra places emphasis on sub-Rule-3 of Rule 3 of Order XXXVII to contend that on the day of entering appearance, the defendant must give notice of such appearance to the plaintiff's pleader or to the plaintiff himself if the plaintiff is suing in person. The manner in which such notice is to be given to the plaintiff has also been provided for in sub-Rule 3. According to counsel, the defendant has not done any of the above. In any event, Mr. Mitra urges that the two applications cannot be pressed at the same time and the defendant must elect which application it intends to pursue.

I have considered the submissions of counsel appearing for the defendant/applicant and the plaintiff. It is not necessary to dwell at length on the defendant having to elect which relief it intends to pursue since counsel has admitted that the application for leave to defend has been filed by way of abundant caution in the event the application for dismissal of the suit is rejected.

Hence, the present dispute can be addressed on the short point whether the order dated 16th September, 2014 gave sufficient protection to the defendant for not complying with the requirement of Sub-Rule 3 to Rule 3 of Order XXXVII.

Prayer (a) of the Judges summons which has been set out above was only for condonation of delay on the part of the defendant in entering appearance in the summary suit and for acceptance of such appearance on behalf of the defendant. In the view of this Court, prayer (a) does not mention any relief with regard to waiving notice of appearance to the plaintiff or to the plaintiff's pleader as required under Order XXXVII Rule 3 (3). The application of the defendant being allowed in terms of prayer (a) by the order dated 16th September, 2014 cannot therefore be construed to mean that by reason of such order, the failure of the defendant to comply with the procedural requirement of Order XXXVII (3)(3) of the C.P.C., was condoned.

Counsel for the parties were invited to enlighten this Court whether a summary suit can be seen to be outside the purview of a regular suit as contemplated in the order of the Learned Single Judge in the winding-up proceeding. In the absence of any statutory provision or case law to the effect that a summary suit is not a regular suit or that the plaintiff would therefore not be entitled to file the instant suit, (in terms of the order of the Single Judge in the winding up proceedings) the contention of Mr. Roy must be rejected. It should also be mentioned that Order XXXVII of the C.P.C. does not make any distinction between regular suits as opposed to suits of a summary nature. By reason of the aforesaid, the order passed by the learned Single Judge on 4th February, 2013 cannot stand in the way of the plaintiff filing the instant suit. It should also be mentioned that in the said order the plaintiff was given liberty to rely on appropriate material in the event the plaintiff makes a claim on the same subject matter. The expression used cannot be interpreted to mean additional material or material which was not before the Court when deciding the winding-up proceedings.

This Court also finds merit in the submission of Mr.Mitra that the stage contemplated under sub-Rule 4 of Rule 3 of Order XXXVII with regard to service of summons on a defendant and the form of such summons, would only come after a defendant satisfies the procedure contemplated under the preceding Sub-Rule, being Order XXXVII (3)(3). Admittedly, such stage has not yet been reached since no notice of entering appearance has been served by the defendant on the plaintiff till date.

In light of the above, GA No. 1060 of 2018, being the application for dismissal of the summary suit, is rejected.

List GA No.1059 of 2018 on 8th January, 2019.