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Delhi Metal Industries v/s Jitender Jain

    Civil Appeal No. 310 of 1998

    Decided On, 30 November 1999

    At, High Court of Delhi

    By, THE HONOURABLE DR. JUSTICE M.K. SHARMA

    For the Appearing Parties: S.C. Gulati, Satish Aggarwal, Advocates.



Judgment Text

M.K. SHARMA, J.


(1) THIS revision petition has been preferred by the petitioners/defendants as against the order dated 22nd December, 1997 passed by the Additional District Judge in Suit No. 275/1996 dismissing the application filed by the defendants 1, 2 and 4 prayi for leave to defend and consequently passing a decree in terms of the provisions of Order 37 Civil Procedure Code for an amount of Rs. 4,58,550. 00 with pendent elite and future interest @ 18% p. a. from the date of filing of the suittill realisation.


(2) THE respondents filed the aforesaid suit under provisions of Order 37 Civil Procedure Code for recovery of a sum of Rs. 4,58,550. 00 against four defendants. The first defendant was the partnership firm and the other three defendants were stated to be the partners thereof. It was stated in the plaint that defendant No. 2, who is the partner of defendant No. 1, had been purchasing various ferrous and non-ferrous metal from the plaintiff time and again on cash and credit basis, in respect of which various bills were raised by the plaintiff details of which have been given in paragraph No. 3 of the plaint. In respect, of the aforesaid bills a total amount of Rs. 4,58,428. 75p was due and payable, in respect of which the plaintiff gave an oral discount to the defendants for Rs. 428. 75p. It is also stated that the defendants issued four cheques amounting to Rs. 4,58,000. 00 against the aforesaid dues payable to the plaintiff which were issued as against the goods so purchased by the defendants from the plaintiff against the bills mentioned above being the consideration amount. The first cheque was for Rs. One lakh dates 10. 8. 94 and the second cheqe was also for an amount of Rs. One lakh dated 13. 8. 94, whereas the third cheque was dated 17. 8. 94 for Rs. 1,50,000. 00. The fourth cheque was dated 6. 9. 94 for Rs. 1,08,000. 00. The first three cheques when presented by the plaintiff to their bank for payment, the same were dishonored by the bank with the endorsement "funds insufficient. On receipt of the aforesaid communication from the bank, the plaintiff contacted the defendants and apprised defendants 2 to 4 about the fact of dishonoring of the said cheques, upon which the defendants 2 to 4 requested the plaintiff to wait for some time. Still the fourth cheque dated 6. 9. 94 for Rs. 1,08,000. 00 , which was presented for encashment was also dishonored. Since the aforesaid cheques were dishonored when presented and the defendants did not take any steps for payment of the dues, a demand notice was issued on 16. 7. 96 to the defendants. But in spite of service of said notice the defendants failed to make payment and, therefore, the said suit was instituted by the plaintiff under Order 37 Civil Procedure Code. It was also stated in the said plaint that the defendants had already issued ST-35 From against the aforesaid bills to the plaintiff as the aforesaid sales were made by the plaintiff as the defendants against ST-35 Form.


(3) DEFENDANTS land 2 made appearance on 6. 12. 1996 as per the records whereas the other two defendants did not choose to put in appearance despite having been served. Later on, the court, however, ordered on the application of defendant No. 3 that defendant No. 4 be also served and accordingly defendant No. 4 was again served with notice of the suit and she also put in appearance and also moved an application seeking for leave to defend and to contest the suit. Thereafter, the Additional District Judge proceeded to dispose of the application filed by the defendants 1,2, and 4 and by the impugend order he dismissed the said application and also passed a decree. The aforesaid judgment and decree is challenged before this Court by the petitioner.


(4) COUNSEL for the petitioner submitted that defendant No. 1 firm was dissolved in 1992 i. e. on 31. 3. 1992 and the transaction in respect of which the aforesaid suit was instituted, admittedly was between 16. 6. 94 to 4. 8. 94 i. e. subsequent to the period of dissolution defendant No. 1 firm and, therefore, the aforesaid suit could not have been instituted as against the firm and its partners. It was also submitted by the counsel for the petitioner that the said application under Order 37 Civil Procedure Code was not maintainable as the ingredients and pre-conditions laid therein are not satisfied in the present case. It was also submitted that several points were raised before the Additional District Judge but none of the said point was discussed in the impugned order. According to the counsel, the suit should have been in the manner prescribed under Order 37 Civil Procedure Code and the said suit could have been instituted only on the basis of a written contract and as there was no written contract and there was only an oral contract in respect of deductions, no such decree could have been passed. It was also submitted that summons for judgment were not issued in statutory form and there was non-compliance thereof and as such the suit was not maintainable.


(5) COUNSEL appearing for the respondent, however, submitted that the points sought to be raised now with regard to maintainability of the suit under Order 37 Civil Procedure Code was never raised before the trial court nor they have been raised in the present revision petition and, therefore the aforesaid pleas cannot be take the first time during the course of the arguments. All the preliminary objections were not raised before the trial court nor the same form part of the impugned order. The aforesaid issues have also not been raised in the present petition and, therefore, I agree with the counsel appearing for the respondent that the said issues and points cannot 'be raised at the time of argument without laying foundation for the same in the revision petition. Even otherwise, the points raised are found to be without any merit, for in my considered opinion, the suit instituted substantially complies with the provisions of Order 37 Civil Procedure Code and, therefore, the same cannot be dimissed as not maintainable.


(6) WITH regard to issue regarding issuance of summons for judgment in statutory form suffices to say that as against the said summons for judgment the petitioners filed an application for leave to defend without raising any objection thereto, nor such an objection had been raised at the time, of arguments before the trial court nor any foundation has been laid down in the present revision petition. The said objection has no merit and is dismissed.


(7) THE only issue, therefore, which arises for my consideration is whether the firm, namely, defendant No. 1 stood dissolved on 31. 3. 1992 as alleged and wh?t would be the effect thereof on the transactions made thereafter by and on behalf of defendant No. 2. It was submitted by the counsel appearing for the petitioner that defendants No. 1, 3 and 4 could not have been made liable, for defendant No. 1 firm was dissolved and therefore, defendants 3 and 4 could not have been made liable for the aforesaid amount as partners could not have been made liable for the dues of the partnership firm after the dissolution. Admittedly, the cheques which were dishonored by the bank were issued by defendant No. 2. A perusal of the copies of the said cheques, which were placed on record, would indicate that the said cheques were issued by defendant No. 2 in his capacity as partner of defendant No. 1. The said cheques were also issued as against the account of the partnership firm, namely, defendant No. 1. The said cheques were also dishonored for insufficient funds. Therefore, the bank account of defendant No. 1 continued to exist with the bank and the defendant no. 1 continued to have a bank account in the name of the firm. The copy of the Deed of Dissolution although has been placed on record but the same is an unregistered document. The transaction in respect of which the aforesaid amount is claimed and for which cheques were issued, was for the supplies made by the plaintiff to the defendants. The said supplies had been received by the defendants in lieu of which the said four cheques were issued by defendant No. 2 acting as partner of defendant No. 1. It also transpires from the records that the defendants had already issued ST-35 Form against the aforesaid bills to the plaintiff thereby acknowledging that the aforesaid sales were made by the plaintiff to the defendants against ST-35 Form. It is nowhere proved that the plaintiff had the knowledge that defendent No. 1 was intended to be dissolved by the partners prior to the aforesaid date. Even if it is assumed that the said partnership firm

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stood dissolved w. e. f. 31. 3. 1992, issuance of aforesaid four cheques in favour of the plaintiff is not denied by any of the defendants. (8) CONSIDERING the entire facts and circumstances of the case, I am of the considered opinion that the plea taken by the defendants 1, 2 and 4 as defence to the suit is vexatious and moonshine. In my considered opinion, no valid defence is made out by the defendants and no triable issue. arises out of the alleged defence sought to be raised by the petitioners in their application seeking for leave to defend. The application filed by the defendants 1, 2 and 4 was rightly dismissed by the trial court. The said order is upheld. As the application seeking for leave to defend was rejected, the trial court rightly proceeded to pass a decree forthwith. I find no infirmity in the judgment and decree passed by trial court and the said action is also upheld. The petition has no merit and is dismissed accordingly.
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