TaxTMI 
TaxTMI 
2024 (4) TMI 1292
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....wer and appellant no. 2 (defendant no. 2 before the learned Trial Court) is the co-borrower. b. The respondent (plaintiff before the learned Trial Court) is a bank with whom the appellants entered into an Agreement dated 28th February, 2004 for a term loan of Rs. 10,00,000/-. The said term loan was availed by the appellant for the purpose of purchasing a flat from M/s Supertech Constructions Pvt. Ltd. c. Since, the appellants failed to repay the loan, the respondent filed a suit for recovery of money against the appellants vide Civil Suit bearing no. CS (Comm) 292/2019 before the ADJ-03 (East), Karkardooma Courts, Delhi. In the said suit, the appellants preferred an application under Order VII Rule 11 of the CPC, thereby, seeking rejection of the respondent's plaint on the ground of pecuniary jurisdiction. d. In the afore said civil suit, the learned Trial Court passed a judgment dated 14th October, 2019 vide which it dismissed the above stated application, closed the appellants' right to file written statement and upon oral submission of the respondent, it decreed the suit by way of passing a summary judgment. e. Being aggrieved by the impugned judgment dated 14th October,....
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....y be granted as prayed for. 11. Per Contra, the learned counsel appearing on behalf of the respondent vehemently opposed the instant appeal submitting to the effect that the same being devoid of any merit is liable to be dismissed. 12. It is submitted that the learned Trial Court has taken into consideration the entire facts and circumstances as well as the relevant position of law and only after due consideration; it dismissed the appellants' application under Order VII Rule 11 of the CPC, closed their right to file written statement and passed a summary judgment. 13. It is submitted that the present appeal is liable to be dismissed on the grounds that the appellants have failed to bring up any substantial question of law which needs to be addressed or any wrongful exercise of any provision of law by the learned Court below. 14. It is submitted that the appellants' contentions are baseless due to the reason that the learned Court below has exercised its jurisdiction in accordance with the settled legal propositions and there is no infirmity in the impugned judgment passed by it. 15. Therefore, in view of the submissions made above, it is submitted that instant appeal being de....
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.... closed. 5. Plaintiffs counsel at this stage orally applies for a summary judgment. Plaintiffs case is that defendant no. 1 being the borrower and defendant no. 2 being co-borrower had availed of a house loan in February, 2004 to purchase a flat bearing no. 610, Supertech Residency, 6A, Sector - 5, Vaishali, Ghaziabad, UP. Home loan of Rs. 10 lacs for 20 years by way of equitable mortgage of the aforesaid flat was granted. Defendants did not adhere to the financial discipline. As per the statement of account dt. 19.11.2018 a sum of Rs. 10,19,302/- is due upon the defendants. Plaintiff bank in support of its case relies on the Housing Loan Application Form, Agreement for Term Loan, Memorandum of Deposit of Title Deed, Acknowledgment of Debt/Liabilities etc. duly signed by both the defendants. 6. In this case defendants' right to file written statement having been forfeited, there is no defence to the claim of the plaintiff bank. 7. In this case, the defendants have no real prospect of successfully defending the claim of the plaintiff bank. Further, there is no other compelling reason as to why the claim of the plaintiff bank should not be disposed of before recording of or....
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....ng reason as to why the claim of the respondent bank should not be disposed of before recording any oral evidence. Taking the said observations into its consideration, the learned Court below decreed the suit in favor of the respondent bank in terms of Order XIII-A Rule 3 (a) of the CPC as well as in terms of Order VIII Rule 10 of the CPC. 24. A bare reading of the impugned judgment states that the same was passed in terms of Order XIII-A Rule 3 (a) of the CPC as well as in terms of Order VIII Rule 10 of the CPC. Therefore, the illegality alleged by the appellants has to be adjudicated in terms of reasoning given qua both the provisions. Hence, the following issues are framed: 1. Whether the learned Trial Court has passed the impugned judgment in accordance with Order XIII-A of the CPC? 2. Whether the learned Trial Court has passed the impugned judgment in accordance with Order VIII Rule 10 of the CPC? Issue no. 1 - Whether the learned Trial Court has passed the impugned judgment in accordance with Order XIII-A of the CPC? 25. Before delving into the facts of the matter at hand, this Court deems it imperative to discuss Order XIII-A of the CPC which prescribes the provision ....
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....relevant content of such documentary evidence on which the applicant relies; (d) the application must state the reason why there are no real prospects of succeeding on the claim or defending the claim, as the case may be; (e) the application must state what relief the applicant is seeking and briefly state the grounds for seeking such relief. (2) Where a hearing for summary judgment is fixed, the respondent must be given at least thirty days' notice of:- (a) the date fixed for the hearing; and (b) the claim that is proposed to be decided by the Court at such hearing. (3) The respondent may, within thirty days of the receipt of notice of application of summary judgment or notice of hearing (whichever is earlier), file a reply addressing the matters set forth in clauses (a) to (f) mentioned hereunder in addition to any other matters that the respondent may deem relevant:- (a) the reply must precisely-- (i) disclose all material facts; (ii) identify the point of law, if any; and (iii) state the reasons why the relief sought by the applicant should not be granted; (b) in the event the respondent seeks to rely upon any documentary evidence in its reply, the respond....
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....e Court must consider whether the plaintiff has a realistic claim as opposed to a fanciful prospect of success and the realistic claim is of such a nature which carries some degree of conviction to it. 30. Rule 4 of Order XIII-A of the CPC prescribes the procedure to be followed while adjudicating upon an application for summary judgment. Sub-rule (1) of Rule 4 explicitly provides for 'matters' which are required to be included in an application for summary judgment. It is stated therein that firstly the application must state that it is for summary judgment under Order XIII-A of the CPC. Secondly, it must also disclose all material facts and identify the point of law, if any. Thirdly, the person making the application may rely on any documentary evidence, which is required to be included in the application and the relevant contents of it are also required to be identified. Lastly, the reasons that there is no real prospect of succeeding in the suit must be stated in the application along with the relief being sought. It is further stated that the respondent has thirty days to file a response to the said application for the summary judgment and the notice of hearing. 31. In Brigh....
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....mons also uses the word 'may' as opposed to 'shall'. This, according to the learned counsel, meant that it was not incumbent upon the Court to issue summons in every suit which has been duly instituted. It was, therefore, contended that having regard to the provisions of Order V Rule 1 read with Order XIIIA Rule 3 CPC, the Court had the power and jurisdiction in a commercial matter to dismiss a suit on merits without issuance of notice to the defendant in case the Court was of the opinion that the plaintiff had no real prospect of succeeding in the claim and that there was no other compelling reason as to why the claim should not be disposed of before recording oral evidence. It was contended that the general power of the Court under Order XIIIA Rule 3 could not be curtailed or whittled down by making it subject to the fulfilment of the condition of filing an application. It was, therefore, contended that no interference with the impugned judgment was called for and the appeal be dismissed. *** *** 21. Apart from this, we are of the view that the learned Single Judge has gone wrong in invoking the provisions of Order XIIIA CPC for rendering a summary judgment. It is true that....
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....umentary evidence on which the applicant relies. The application must also state the reason why there are no real prospects of succeeding or defending the claim, as the case may be. 23. Rule 4(2) of Order XIIIA also requires that where a hearing for summary judgment is fixed, the respondent must be given at least thirty days' notice of the date fixed for the hearing and the claim that is proposed to be decided by the Court at such hearing. Rule 4(3) of Order XIIIA makes provision which enables the respondents to file a reply within the stipulated time addressing the matters set forth in clauses (a) to (f) of the said sub-rule. In particular, the reply of the respondent ought to precisely disclose all the material facts and identify the point of law, if any, and the reasons why the relief sought by the applicant for summary judgment should not be granted. Just as in the case of the applicant, the respondent is also given the opportunity to rely upon documentary evidence in its reply which must be included in the reply and the relevant content identified. The respondent's reply is also required to give reason as to why there are real prospects of succeeding on the claim or ....
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....on. 34. The said date shall be after a period of thirty days since Sub-rule (2) of Rule 4 of Order XIII-A of the CPC mandates that the respondent shall be given a prior notice of thirty days' before the date fixed for hearing of the application for summary judgment. The Court shall also give the notice of the claim that is proposed to be decided by the Court at such hearing to the respondent. 35. Although, the procedure of summary judgment is with the intent to expedite a claim made under the civil law, however, this Court must set it out in clear words that in no circumstance, the said provision envisages violation of the principles of natural justice. The intent of the legislature is that whatsoever may be the circumstance, the principles of natural justice cannot be ignored under the garb of a 'summary procedure'. 36. The inference which can be drawn from the above stated observation of this Court is 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. 37. In the present matter, it is not disputed that no application was filed by the respondent bank/plaintiff un....
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....Trial Court has passed the impugned judgment in accordance with Order VIII Rule 10 of the CPC? 44. Before delving into the merits of the instant issue, this Court deems it imperative to set out set out principle behind Order VIII Rule 10 of the CPC. The relevant extracts of the said provision is as under: "...ORDER VIII [Written statement, set-off and counter-claim] [1. Written Statement.-The Defendant shall, within thirty days from the date of service of summons on him, present a written statement of his defence: Provided that where the defendant fails to file the written statement within the said period of thirty days, he shall be allowed to file the same on such other day, as may be specified by the Court, for reasons to be recorded in writing, but which shall not be later than ninety days from the date of service of summons.] *[Provided that where the defendant fails to file the written statement within the said period of thirty days, he shall be allowed to file the written statement on such other day, as may be specified by the Court, for reasons to be recorded in writing and on payment of such costs as the Court deems fit, but which shall not be later than one hund....
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....ithin the prescribed time, the Hon'ble Supreme Court in C.N. Ramappa Gowda v. C.C. Chandregowda, (2012) 5 SCC 265 held as under: "...25. We find sufficient assistance from the apt observations of this Court extracted hereinabove which has held that the effect of non-filing of the written statement and proceeding to try the suit is clearly to expedite the disposal of the suit and is not penal in nature wherein the defendant has to be penalised for non-filing of the written statement by trying the suit in a mechanical manner by passing a decree. We wish to reiterate that in a case where written statement has not been filed, the court should be a little more cautious in proceeding under Order 8 Rule 10 CPC and before passing a judgment, it must ensure that even if the facts set out in the plaint are treated to have been admitted, a judgment and decree could not possibly be passed without requiring him to prove the facts pleaded in the plaint. 26. It is only when the court for recorded reasons is fully satisfied that there is no fact which needs to be proved at the instance of the plaintiff in view of the deemed admission by the defendant, the court can conveniently pass a judgment....
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....is permissive in nature, enabling the trial court to exercise, in a given case, either of the two alternatives open to it. Notwithstanding the alternative of proceeding to pronounce a judgment, the court still has an option not to pronounce judgment and to make such order in relation to the suit it considers fit. The verb 'shall' in Rule 10 [although substituted for the verb 'may' by the Amendment Act of 1976] does not elevate the first alternative to the status of a mandatory provision, so much so that in every case where a party from whom a written statement is invited fails to file it, the court must pronounce the judgment against him. If that were the purport, the second alternative to which 'shall' equally applies would be rendered otiose. 16. At this stage, we consider it apposite to take a quick look at Balraj Taneja (supra) to examine the scope of Rule 10 of Order VIII. Therein, this Court ruled that a court is not supposed to pass a mechanical judgment invoking Rule 10 of Order VIII, CPC merely on the basis of the plaint, upon the failure of a defendant to file a written statement. The relevant paragraphs of the judgment are reproduced below for convenience: "29. As po....
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....ternative but to pass a judgment in favour of the plaintiff, if the defendant fails or neglects to file his written statement. 19. If indeed, in a given case, the defendant defaults in filing written statement and the first alternative were the only course to be adopted, it would tantamount to a plaintiff being altogether relieved of its obligation to prove his case to the satisfaction of the court. Generally, in order to be entitled to a judgment in his favour, what is required of a plaintiff is to prove his pleaded case by adducing evidence. Rule 10, in fact, has to be read together with Rule 5 of Order VIII and the position seems to be clear that a trial court, at its discretion, may require any fact, treated as admitted, to be so proved otherwise than by such admission. Similar is the position with section 58 of the Indian Evidence Act, 1872. It must be remembered that a plaint in a suit is not akin to a writ petition where not only the facts are to be pleaded but also the evidence in support of the pleaded facts is to be annexed, whereafter, upon exchange of affidavits, such petition can be decided on affidavit evidence. Since facts are required to be pleaded in a plaint and....
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....whether the right of filing of written statement in the above said civil suit has rightly been closed by the learned Trial Court. 55. In the impugned judgment, while rendering its decision, the learned Trial Court has categorically noted that it is passing the same in terms of Order VIII Rule 10 of the CPC. The relevant extract is as under: "..Further, in terms of Order VIII Rule 10, CPC too the present suit is liable to be decreed in plaintiffs favour and against the defendants..." 56. Perusal of the impugned judgment states that the plaintiff, i.e., the respondent bank, during arguments, relied upon the evidence filed along with the plaint such as housing loan application form, agreement for term loan for Rs. 10 Lakhs for 20 years by way of equitable mortgage, memorandum of deposit of title deed, acknowledgment of debt/liabilities by way of correspondence dated 27th June, 2018 etc. (annexed as Annexure A-8 with the appeal) duly signed by both the defendants along with the statement of account dated 19th November, 2018 as per which a sum of Rs.10,19,302/- was due upon the appellants herein. 57. The respondent bank had averred that the borrowers/appellants availed a term loan ....