1. This Civil Revision Petition, under Article 227 of the Constitution of India, is filed by the petitioner/plaintiff, challenging the order, dated 14.03.2019, passed in I.A.No.816 of 2018 in O.S.No.648 of 2018, by the XIV Additional District Judge, Ranga Reddy District at L.B.Nagar, Hyderabad, whereby, the subject interlocutory application filed by the respondent/defendant under Order XXXVII Rule 3(5) of the Code of Civil Procedure, 1908, seeking unconditional leave to defend the subject summary suit in O.S.No.648 of 2018 filed by the revision petitioner/plaintiff, was allowed.
2. Heard the learned counsel for both the sides and perused the record.
3. The revision petitioner herein is the plaintiff and the respondent herein is the defendant in the subject Original suit. The parties will be hereinafter referred to as per their array in the Original Suit.
4. The plaintiff filed the subject summary suit in O.S.No.648 of 2018 before the Court below against the defendant under Order XXXVII read with Section 151 of C.P.C. for recovery of an amount of Rs.28,25,159/- along with interest @ 15% per annum from the date of filing of the suit till realisation. Upon receipt of summons in the subject summary suit, the defendant filed the subject interlocutory application in I.A.No.816 of 2018 before the Court below under Order XXXVII Rule 3(5) of C.P.C. seeking unconditional leave to defend the summary suit, contending as follows:
“The subject summary suit filed by the plaintiff is not maintainable, as the plaintiff has suppressed several facts. The plaintiff has relied on a manipulated document, dated 01.04.2012, which is called as "rate contract with terms and conditions". In fact, said document is only a “Quotation” and it was tampered by the plaintiff. The said document does not contain the signature of the defendant. Originally, plaintiff is an agent of Air Canada Cargo. Defendant is a private limited company engaged in export of bulk drugs. The defendant engages services of plaintiff for export of its products. The plaintiff, in turn, engages the services of general sales agent of principal carriers such as Air Canada Cargo and ships the goods to international destinations. In the month of August, 2015, defendant has utilized the services of plaintiff and goods valued USD 31,325 were sent to Brazil. Said goods were neither handed over to the consignee in Brazil nor the consignee intimated about the arrival of the goods. On enquiry, plaintiff informed the defendant that Air Canada Cargo, which was engaged by the plaintiff to send the goods of defendant to Brazil, has failed to manifest the goods and due to the negligence of Air Canada Cargo engaged by plaintiff, entire consignment was confiscated by Brazilian Customs authorities. Though the defendant insured the consignment, the insurer refused to entertain any claim, as the consignment was neither destroyed nor lost, but was only seized by customs authorities due to the negligence of the airline engaged by the plaintiff i.e., Air Canada Cargo. Therefore, defendant not only lost the consignment, but also lost business and goodwill and suffered loss of Rs.40 Lakhs in the entire transaction. Plaintiff, being agent of Air Canada Cargo, is vicariously liable for the loss suffered by defendant. Defendant has also filed suit in O.S.No.226 of 2016 against Air Canada Cargo on the file of IX Additional Chief Judge, City Civil Court, Hyderabad, and in the said suit, defendant has not made the plaintiff as party, as the plaintiff assured the defendant that he will cooperate with the defendant by all means. Since February, 2006, till April, 2016, defendant has transacted with plaintiff on 797 occasions and provided business of Rs.2,85,16,512/- to plaintiff. Since March/April, 2016, plaintiff resorted to unfair trade practices such as withholding post export documents such as Airway bills, exchange control copies of shipping bills and applications for removal of excisable goods bills etc., which are required to be handed over to the defendant under acknowledgement due. On noticing the same, defendant has stopped engaging the services of plaintiff. The above said documents were handed over to defendant only in September, 2017, under due acknowledgment. Defendant has exercised its right of lien over the amount receivable by it from the plaintiff, being agent of Air Canada Cargo. Defendant is not liable to pay any amount to the plaintiff, including suit claim, as the amount due to the defendant by Air Canada Cargo and its agents, including plaintiff, is much higher than the alleged suit claim. Though the plaintiff stated in paragraph No.7 of the plaint that the defendant has made payment of Rs.4,99,905/- on 05.04.2016 against the outstanding amount of Rs.22,80,151/-, the ‘ledger extract’ provided to the defendant do not reflect the same. Moreover, there is no indication of interest payable @ 15%, as charged and calculated, either in the ‘Rate Contract with terms and conditions’ or in the alleged invoices. One of the alleged invoices, dated 23.05.2015, is beyond the statutory limitation period of three years, since the suit is filed on 15.06.2018 and as such, the suit itself is not maintainable. The defendant has got substantial defence in the suit. Hence, it is prayed to grant unconditional leave to the defendant to defend the suit.”
5. The plaintiff filed counter contending as follows:
“The alleged transaction between the parties is admitted. The ‘rate contract’, dated 01.04.2012, is not manipulated, as alleged by the defendant. The subject summary suit was filed basing on the pending invoices due from the defendant and the roles/responsibilities of a registered Custom House Agent has no bearing over the subject summary suit. The plaintiff is not responsible for the actions of Air Canada Cargo. The defendant filing a suit against Air Canada Cargo for recovery of money does not, in any way, come in the way of the subject summary suit filed by the plaintiff against the defendant for recovery of money due, basing on pending invoices. Even if the allegations of resorting to unfair practices etc., by the plaintiff are considered to be true, they are required to be addressed in a separate suit, but cannot be treated as a ground for defence in the subject summary suit. The defendant filed the subject interlocutory application seeking unconditional leave to defend the subject summary suit only to avoid legal requirements and payment of amount. Except stating that there are defects and inconsistencies in the subject summary suit, neither the actual amount is disclosed nor the actual defence is elaborated, except claiming that the defendant has a cause of action, which is untenable in law. The subject interlocutory application is frivolous and untenable and is filed only to drag on the proceedings, which cannot be permitted in a summary suit. The application is liable to be dismissed.”
6. On merits, the Court below allowed the subject interlocutory application by granting unconditional leave to the defendant to defend the subject summary suit, holding that there is a bona fide issue to be tried in the main suit and unless and until the defendant is granted leave, he cannot produce his defence before the Court. Aggrieved by the same, the plaintiff filed this Civil Revision Petition.
7. The learned counsel for the revision petitioner/plaintiff would contend that the Court below erred in granting unconditional leave to the defendant to defend the subject summary suit. No triable issues would arise for determination in the subject summary suit. There is no defence to the defendant in the subject suit, as the transaction between both the parties is an admitted fact. Hence, the subject suit can be straight away decreed as summary suit. There is no principle of law, which makes an agent vicariously liable for the actions of the principal. The other suit in O.S.No.226 of 2016 filed by the defendant against Air Canada Cargo, has no bearing on the subject summary suit filed basing on the pending invoices, which were admitted by the defendant. In O.S.No.226 of 2016, the plaintiff was not added as a party, which clearly show that the contract between the defendant and Air Canada Cargo is entirely different contract and the plaintiff has no liability arising out of that contract. Even if the plaintiff is made a party to the said suit, all triable issues would arise in that suit and not in the subject summary suit. The Court below failed to appreciate that the defendant, after two years of commencement of suit in O.S.No.226 of 2016, is now trying to add the revision petitioner/plaintiff as a party to the said suit. The invoice, which is alleged to be time barred, is only for Rs.3,252/- and that invoice can be kept aside if it comes in the way of expeditious disposal of the subject summary suit. The Court below ought to have rejected the ground taken by the defendant that the ‘rate contract’ is a fabricated document. The Court below has not even considered granting conditional leave to a limited extent to the defendant, but granted unconditional leave to defend the subject suit, which has changed the nature of the suit from summary suit to a regular suit. The Court below did not look into merits of the matter and passed the impugned order in a mechanical manner, which is detrimental to the interest of the plaintiff and ultimately prayed to set aside the order under challenge and allow the Civil Revision Petition as prayed for.
8. Per contra, the learned counsel for the respondent/defendant supported the impugned order and contended that the Court below rightly granted unconditional leave to the defendant to defend the subject summary suit. The defendant has got substantial defence in the subject summary suit. There are triable issues in subject suit and hence, the same cannot be decreed as a summary suit. The first document which was filed by the plaintiff in the subject summary suit, i.e., ‘Quotation’, is a fabricated document and unless and until the defendant adduces evidence on his behalf, he cannot prove that the said document as fabricated. The plaintiff, being agent of Air Canada Cargo, is vicariously liable for the loss suffered by defendant. One of the alleged invoices, dated 23.05.2015, is barred by limitation and as such, the suit itself is not maintainable and ultimately prayed to sustain the impugned order and dismiss the Civil Revision Petition.
9. In view of the above submissions, the point that arises for determination in this Civil Revision Petition is as follows:
“Whether the impugned order, dated 14.03.2019, passed in I.A.No.816 of 2018 in O.S.No.648 of 2018, by the XIV Additional District Judge, Ranga Reddy District at L.B.Nagar, Hyderabad, is liable to be set aside?”
10. Admittedly, the subject suit is a summary suit filed under Order XXXVII Rule 3(5) of C.P.C. Summary trial of a suit is intended to ensure expeditious hearing and disposal of the suit by preventing unreasonable obstruction by the defendant, who has no defence or a frivolous and vexatious defence. The ultimate object of a summary suit is expeditious disposal of a commercial dispute. The only difference between an ordinary suit and a summary suit is that in an ordinary suit, the defendant will naturally have a chance to defend the suit, but in a summary suit, the defendant has to apply for grant of leave to defend his case. Grant of leave to defend no doubt delays the trial, but it will be a travesty of justice where a plaintiff, on the basis of some photocopies of documents, reproducing only the relevant extracts of an agreement and without evidence and crossexamination of crucial witnesses on the side of the defendant, gets a decree in his favour, solely on the basis that he has been able to make out a prima facie case. Therefore, the Courts dealing with summary trials, should act very carefully taking note of the interests of both the parties. Merely on the ground that the defendant may resort to prolonged litigation by putting forth untenable and frivolous defences, grant of leave to defend cannot be declined. At the same time, the Court must ensure that the defendant raises a substantial and real issue and not a sham one. The Court cannot reject the defence on the ground of implausibility or inconsistency. Before recording a finding of granting leave to defend, the Court should assess the facts and circumstances of the case and come to the conclusion that if the facts alleged by the defendant in the affidavit are established, there would be a good or even a plausible defence on those facts. Therefore, the Courts while dealing with a summary suit is required to maintain a delicate balance between the respective rights and contentions of the parties, by not passing an order which may, ultimately, end up impeding the speedy resolution of the dispute.
11. The law determining the grant of leave to defend a summary suit is no more res integra and shall not detain this Court any longer. In IDBI Trusteeship Services Limited Vs. Hubtown Limited (2017 (1) Supreme Court Cases 568), the Hon’ble Apex Court summarised the principles as to grant of leave in summary suit and held as under:
“17. Accordingly, the principles stated in para 8 of Mechelec case will now stand superseded, given the amendment of Order 37 Rule 3 and the binding decision of four Judges in Milkhiram case, as follows:
17.1 If the defendant satisfies the court that he has a substantial defence, that is, a defence that is likely to succeed, the plaintiff is not entitled to leave to sign judgment, and the defendant is entitled to unconditional leave to defend the suit.
17.2 If the defendant raises triable issues indicating that he has a fair or reasonable defence, although not a positively good defence, the plaintiff is not entitled to sign judgment, and the defendant is ordinarily entitled to unconditional leave to defend.
17.3 Even if the defendant raises triable issues, if a doubt is left with the trial Judge about the defendant's good faith, or the genuineness of the triable issues, the trial Judge may impose conditions both as to time or mode of trial, as well as payment into court or furnishing security. Care must be taken to see that the object of the provisions to assist expeditious disposal of commercial causes is not defeated. Care must also be taken to see that such triable issues are not shut out by unduly severe orders as to deposit or security.
17.4 If the defendant raises a defence which is plausible but improbable, the trial Judge may impose conditions as to time or mode of trial, as well as payment into court, or furnishing security. As such a defence does not raise triable issues, conditions as to deposit or security or both can extend to the entire principal sum together with such interest as the court feels the justice of the case requires.
17.5 If the defendant has no substantial defence and/or raises no genuine triable issues, and the court finds such defence to be frivolous or vexatious, then leave to defend the suit shall be refused, and the plaintiff is entitled to judgment forthwith.
17.6 If any part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit, (even if triable issues or a substantial defence is raised), shall not be granted unless the amount so admitted to be due is deposited by the defendant in court."
12. Thus, it is clear that if the defendant raises triable issues indicating that he has a fair or reasonable defence, although not a positively good defence, the plaintiff is not entitled to sign judgment, and the defendant is ordinarily entitled to unconditional leave to defend. In the instant case, firstly, the plaintiff contends that he exported the products of the defendant through Air Canada Cargo and he is not responsible for the mistakes committed by Air Canada Cargo and he is entitled for the suit amount from the defendant. Refuting this contention, the defendant contended that Air Canada Cargo was engaged by the plaintiff to export the products of defendant and only due to the negligence of the plaintiff and Air Canada Cargo, the defendant suffered loss of about Rs.40 lakhs. Secondly, the plaintiff contends that the defendant neglected servicing the payables it owed to the plaintiff as per the terms and conditions in the ‘rate contract’, which was operational from the year 2012. Refuting this contention, the defendant contended that there was never any ‘rate contract’ agreed by the defendant and that the document which the plaintiff termed as ‘rate contract’ is a mere ‘quotation’ and that basing on the said quotation only, entire transactions took place between the plaintiff and defendant and even in the bottom of the said quotation, it was written that the prices are as per the year 2015-2016 and that the said document is tampered and fabricated by the plaintiff. Thirdly, the plaintiff contended that the invoices filed by him in the subject summary suit are admitted by the defendant and as such, the subject suit can be straight away decreed as summary suit. Refuting this contention, the defendant contended that he has filed a suit against the Air Canada Cargo as regards the subject transaction and he has also tried to implead the plaintiff as a party to the said suit. Fourthly, the defendant contended that one of the invoices filed along with the subject summary suit is barred by limitation and unless and until he is allowed to adduce evidence on this aspect, he cannot substantiate the same. Refuting this contention, the plaintiff contended that the said time barred invoice can be simply kept aside and the subject suit can be decreed as a summary suit, basing on the remaining invoices.
13. In view of the above rival contentions, it is clear there is a serious dispute between the parties to the litigation. When the defendant raises serious dispute with regard to the claim of the plaintiff, it is in the interest of justice to give opportunity to both the parties to adduce evidence on their behalf and decide the suit basing on the said evidence. In view of the above rival contentions and the facts and circumstances of the case, this Court is satisfied that the defendant has raised triable issues in the subject summary suit and he is entitled for unconditional leave to defend the suit. In a summary suit, when the defendant is able to demonstrate that he has got substantial defence to his credit, he should not be declined a right of fair hearing (audi alteram partem). As rightly contended by the learned counsel for the respondent/defendant, unless and until the defendant is permitted to lead evidence on his behalf, he cannot substantiate his defence, since there is a serious dispute with regard to the subject matter of the subject suit. Further, the question of limitation raised by the
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defendant in the instant case is a mixed question of fact and law, which is required to be decided after fullfledged trial, basing on the evidence adduced by both the parties. Considering the totality of circumstances, this Court is satisfied that there are triable issues in the subject suit and the defendant was able to demonstrate that he has bona fide and substantial defence in the subject suit and all the issues raised by the plaintiff are required to be decided after full-fledged trial of the suit. The Court below rightly granted unconditional leave to the defendant to defend the subject summary suit. 14. Here it is apt to mention that the scope of the High Court under Article 227 of the Constitution of India is very narrow. The High Court, in exercise of its power under Article 227 of the Constitution of India, should interfere with an order, only to keep the Tribunals and Courts subordinate to it within the bounds of their authority and to ensure that law is followed by such Tribunals and Courts by exercising jurisdiction which is vested in them and by not declining to exercise the jurisdiction which is vested in them. Apart from the above, High Court can interfere in exercise of its power of superintendence, when there has been a patent perversity in the orders of the Tribunals and Courts subordinate to it or where there has been a gross and manifest failure of justice or the basic principles of natural justice have been flouted. 15. In the instant case, neither there is patent perversity in the order under challenge nor the Court below travelled beyond its jurisdiction in passing the impugned order. The Court below discussed the material on record at length and ultimately granted the relief claimed by the defendant, assigning reasons. There is nothing to take a different view. The Civil Revision Petition is devoid of merit and is liable to be dismissed. 16. In the result, the Civil Revision Petition is dismissed. There shall be no order as to costs. Miscellaneous petitions, if any, pending in this Civil Revision Petition, shall stand closed.