2024 (4) TMI 1292 - HC - Indian Laws

Summary Judgment Set Aside for Lack of Notice Under Order XIII-A CPC, Other Trial Court Decisions Upheld

Atanu Bhattacharjee & Anr. Versus Corporation Bank

Atanu Bhattacharjee & Anr. Versus Corporation Bank - 2024:DHC:2702 ISSUES: Whether the learned Trial Court passed the impugned judgment in accordance with the procedural and substantive requirements of Order XIII-A of the Code of Civil Procedure, 1908 (CPC) relating to summary judgment in commercial suits'Whether the learned Trial Court correctly exercised its powers under Order VIII Rule 10 of the CPC in passing judgment due to the appellants' failure to file a written statement within the prescribed statutory period? RULINGS / HOLDINGS: On the first issue, the Court held that the learned Trial Court erred in passing a summary judgment without a formal written application as mandated by Order XIII-A Rule 4(1) CPC, without affording the appellants the mandatory thirty days' notice under Rule 4(2), and without allowing them an opportunity to file a reply. The Court emphasized that 'the procedure, as prescribed under Order XIII-A of the CPC is mandatory and is required to be followed if a summary judgment under Order XIII-A is to be rendered.' Consequently, the portion of the impugned judgment relying on Order XIII-A was set aside.On the second issue, the Court upheld the learned Trial Court's exercise of jurisdiction under Order VIII Rule 10 CPC, observing that since the appellants failed to file their written statement within the statutory period of 120 days (as extended under the Commercial Courts Act, 2015), their right to file was correctly closed. The Court found the plaintiff's case prima facie unimpeachable on the basis of the documents filed with the plaint, and held that the Trial Court was justified in passing judgment without requiring further proof. Accordingly, the impugned judgment was upheld to the extent it was based on Order VIII Rule 10 CPC. RATIONALE: The Court applied the statutory framework under the Commercial Courts Act, 2015 and the CPC, particularly Order XIII-A (introduced by the Commercial Courts Act for summary judgment in commercial disputes) and Order VIII Rule 10 CPC (procedure when a party fails to file a written statement). The Court relied on the express provisions of Order XIII-A CPC which require a written application for summary judgment, inclusion of specified particulars, and a minimum thirty days' notice to the respondent to ensure adherence to principles of natural justice. It rejected the notion that summary judgment can be granted on an oral application or without notice, emphasizing the adversarial nature of such proceedings and the mandatory procedural safeguards.The Court also considered binding precedent which clarifies that Order VIII Rule 10 CPC is permissive, allowing the Court discretion to either pronounce judgment or require proof of facts despite non-filing of written statement. It must be satisfied that no fact requires proof beyond the deemed admissions before passing judgment. The Court found that the Trial Court correctly exercised this discretion given the appellants' failure to file written statement within the extended statutory timeline and the absence of disputed factual issues in the plaint.The Court distinguished the two grounds relied upon by the Trial Court in the impugned judgment, setting aside the summary judgment portion for procedural non-compliance while affirming the judgment based on the forfeiture of the right to file written statement. This represents a doctrinal reaffirmation of the mandatory procedural safeguards in summary judgment applications under Order XIII-A CPC and the cautious exercise of discretion under Order VIII Rule 10 CPC to avoid mechanical decrees.