TaxTMI 
TaxTMI 
2024 (4) TMI 1292
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....o. 1 (defendant no. 1 before the learned Trial Court) is the borrower 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 passin....
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....n view of the foregoing submissions, it is submitted that the instant appeal may be allowed and the reliefs may 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 judg....
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.... summons, failing which he forfeits his right to file the same. The right of the defendants to file their written statement hereby stands 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 ....
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....y judgment; the learned Court below held that the appellants had no real prospect of successfully defending the claim. It further observed that there is no compelling 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 wit....
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.... (b) the application must precisely disclose all material facts and identify the point of law, if any; (c) in the event the applicant seeks to rely upon any documentary evidence, the applicant must,-- (i) include such documentary evidence in its application, and (ii) identify the 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 oth....
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....he claim should not be disposed of before recording of oral evidence. Further, the said provision makes it clear that (a) a summary judgment can only be decreed upon an application being made by a party, (b) such an application can only be filed after service of summons, and; (c) such an application must be filed before the issues are framed by the Court. 29. Therefore, in order to allow an application for summary judgment, the 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....
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....l amendments to the CPC, in order to expeditiously dispose commercial matters and also having regard to the fact that there was no requirement of recording oral evidence in order to pass a judgment in proceedings where there was no real prospect of success, it was open to Court to pass a summary judgment without notice to the defendants. 14. It was also contended by the learned counsel for the said respondent that Order V Rule 1 which deals with the issuance of summons 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 pow....
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....mary judgment under Order XIIIA CPC is not permissible without there being an appropriate application for summary judgment. The contents of an application for summary judgment are also stipulated in Rule 4 of Order XIIIA. The application is required to precisely disclose all material facts and identify the point of law, if any. In the event, the applicant seeks to rely on any documentary evidence, the applicant must include such documentary evidence in its application and identify the relevant content of such documentary 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 re....
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....morandum of deposit of title deed, acknowledgment of debt/liabilities etc. which were duly signed by both the defendants along with the statement of account of the appellants' loan account. 33. This Court is of the view that that as per contents of the provision, when read as a whole, it is inferred that if an application for a summary judgment is made in accordance with Sub-rule (1) of Rule 4 of Order XIII-A of the CPC at the stage as mentioned in Rule 2 of Order XIII-A of the CPC, the Court is required to fix a date for hearing the said application. 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 princi....
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....nder Order XIII-A of the CPC was illegal since the appellants had no opportunity to respond to the contentions raised by the respondent. 42. In light of the foregoing, this Court is of the view that the decision of the learned Trial Court that the respondent bank's suit was liable to be decreed in terms of Order XIII-A of the CPC is erroneous and only to the said extent, the same is set aside being contrary to the statutory provisions as well as the settled law. 43. Accordingly, issue no. 1 is decided in favour of the appellants. Issue no. 2 - Whether the learned 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 st....
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.... 46. Order VIII Rule 10 of the CPC empowers a civil Court to pass a judgment/order in the event the defendant fails to file his written statement in accordance with Rule 1 of Order VIII. The time period prescribed for filing the written statement in Rule 1 shall not be extended by the court. 47. This Court is of the view that the above said provision has been enshrined with the intent to conclude the civil proceedings as the same cannot linger on and it is also in the interest of justice to the other party. 48. With regard to the scope of powers of a Court to render a judgment in the event the defendant fails to file a written statement within 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....
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....st, 1991 against Samiullah, postulates the procedure that could be adopted when a party fails to present its written statement upon the same being called for by the court. Rule 10 reads as follows: "10. Procedure when party fails to present written statement called for by Court.- Where any party from whom a written statement is required under rule 1 or rule 9 fails to present the same within the time permitted or fixed by the Court, as the case may be, the Court shall pronounce judgment against him, or make such order in relation to the suit as it thinks fit and on the pronouncement of such judgment a decree shall be drawn up." 15. We have no hesitation to hold that Rule 10 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 provisio....
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.... considering that the verb used in the provision is 'may', but nothing substantial turns on it. 18. What emerges from a reading of Balraj Taneja (supra), with which we wholeheartedly concur, is that only on being satisfied that there is no fact which need to be proved on account of deemed admission, could the court pass a judgment against the defendant who has not filed the written statement; but if the plaint itself suggests involvement of disputed questions of fact, it would not be safe for the court to pass a judgment without requiring the plaintiff to prove the facts. Balraj Taneja (supra) also lays down the law that provision of Rule 10 of Order VIII, CPC is by no means mandatory in the sense that a court has no alternative 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 i....
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....plaint itself indicates that there are disputed questions of fact involved in the case regarding which two different versions are set out in the plaint itself, it would not be prudent for the Court to pass a judgment without the plaintiff proving the facts so as to settle the factual controversy. 53. The position of law thus now has been settled that given the consequences of non-filing of written statement, the amended provisions of the CPC have been held to be mandatory to be complied with and it cannot be circumvented even by recourse to inherent power under Section 151 of the CPC as also held in SCG Contracts (India) (P) Ltd. v. K.S. Chamankar Infrastructure (P) Ltd., (2019) 12 SCC 210. 54. Now coming to the determination of the issue 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 decre....