w w w . L a w y e r S e r v i c e s . i n



Raj Kumar Chawla v/s M/s Lucas Indian Services

    LAA 130 of 2004

    Decided On, 27 April 2006

    At, High Court of Delhi

    By, THE HONOURABLE MR. JUSTICE SWATANTER KUMAR & THE HONOURABLE MR. JUSTICE S.L. BHAYANA

    For the Petitioner: J.M. Bari, Advocate. For the Respondents: Mayank Bughani, Advocate.



Judgment Text

Swatanter Kumar, J.


1. The present appeal under Section 96 r/w Order 41 Rule 2 of the code of Civil Procedure 1908 (hereinafter referred to as the 'Code') is directed against the judgment and decree dated 29th October, 2003. M/s Lucas Indian Services, the plaintiff, filed a suit for the recovery of Rs.3,61,186.74/- alongwith interest. The suit was filed by the plaintiff for recovery of money for the goods supplied. This suit was contested by the defendant who had raised certain preliminary objections as well as had contested the claim on merits.


2. The defendants not only disputed the liability but even gave detailed facts in regard to the payments made to the plaintiff in Paragraph 18 to 22 of the written statement. The defendants claimed that they were entitled to receive Rs.40,000/- from the plaintiff for the goods which they had returned and this according to them had been accepted by the plaintiff in response to the letter dated 12th July, 1999 and 29th June, 2000. In other words, serious controversies had been raised relatable to various documents and the case was at the stage of admission and denial of documents and even issues had not been framed in the suit.


3. In the written statement the defendants claimed that they had specifically denied its liability and the plea taken was not vague. They had raised dispute with regard to quantum and quality of the goods alleged to have been supplied by the plaintiff to the defendants. They had also filed documents during the pendency of the suit. On 29th October, 2003, the case was fixed for admission/denial of documents on which date the admission/denial of the documents of the defendant was completed. Plaintiff had not filed original documents and resultantly his documents could not be admitted or denied and the case was adjourned for that purpose for 21st November, 2003. On that very date, the application of the plaintiff under Order XII Rule 6 was taken up for hearing and while referring to Para 15 of the plaint and the letter of the defendant sent to the plaintiff dated 12th July, 1999 being acknowledgment and admission of the debt, the Trial Court passed a decree for a sum of Rs.1,90,949/- and for the remaining amount the suit was ordered to be dismissed. The Trial Court held as under :


?However, today the defendants have placed on record a letter dated 22.9.2000 written by the plaintiff to them and have also filed letter dated 23.9.2000 purporting to be written by them to the chairman of the plaintiff company. Vide letter dated 22.9.2000 the general manager of the plaintiff company referred to a meeting with defendant no.2 on Sept.2, 2000. The letter indicates that in the meeting the defendant company had agreed to take back old material worth Rs.154949/- and defendant no.2 had agreed to release the payment of Rs.66415/-. Vide letter dated 23.9.2000 purporting to have been sent to the chairman of the plaintiff company, defendant no.2 stated that the outstanding towards him which was Rs.3.97 lacs prior to the meeting with him had come down to Rs.0.36 lacs with out any payment by him. However, even in this letter, the defendant no.2 did not dispute his liability to return old material worth Rs.154949/-. Thus, vide this letter also defendant no.2 acknowledged his liability to pay Rs.0.36 lacs to the plaintiff company, pursuant his meeting with the chairman of the plaintiff company. If the letter referred in the plaint as well as the letters filed today by the defendants are read together, the defendants admits liability to pay at least Rs.0.36 lacs to the plaintiff company and were also required to return old material worth Rs.154949/-. In the written statement, the defendants have not claimed that the plaintiff company had refused to accept goods worth Rs.154949/- when tendered by them. Admittedly, the defendant had sought amendment of the W.S in order to plead certain claims which were in the nature of counter claims. As he was not ready to pay the requisite court fee on those claims, the amendments were disallowed vide order dated 3.5.03.As the defendants have not returned goods worth Rs.154949/- and have also admitted the liability to pay Rs.0.36 lacs in the letter dated 23.9.2000 the admitted liability of the defendants comes to Rs.1,90,949/-. I, therefore, pass a part decree of Rs.1,90,949/- in favour of the plaintiff and against the defendant, on the basis of the admissions contained in the correspondence between the parties. Decree sheet be prepared accordingly.?


4. The above decree on admission is challenged by the appellant for the reasons that no decree could be passed under the provisions of Order XII Rule 6 of the Code inasmuch as there was no unambiguous, clear, unconditional admission which could enable the Court to pass this decree. Furthermore, it is argued that the defendant in the suit was entitled to prove his case and explain the averments made in Paragraph 15 of the plaint as well as the letter in question. 5. The provisions of Order XII are intended to provide expeditious grant of decree in favour of a plaintiff in a suit or proceedings where the defendant has made any admission in the pleadings or otherwise, orally or in writing of any amount due. The plaintiff would be entitled to a decree on the basis of such admission without waiting for completion of the trial. The provisions of Order XII Rule 6 were incorporated by way of amendment. The legislative object of these provisions is to curtail the period for determination of disputes between the parties to a suit and ensure that a decree on admission is passed without any unnecessary hindrance. The expression 'Admission' has been given a wider meaning and connotation so as to take within its ambit admissions made by a party in pleadings or otherwise, orally or in writing. These provisions thus are capable of liberal construction and without imposition of any unreasonable restriction, must be permitted to operate but the Courts have to be careful while passing a decree on admission. The Court essentially should look into the fact that all essential ingredients of an admission are satisfied before such a decree is passed in favour of any of the parties to the suit. Admission has to be unambiguous, clear and unconditional and the law would not permit admission by inference as it is a matter of fact. Admission of a fact has to be clear from the record itself and cannot be left to the interpretative determination by the Court, unless there was a complete trial and such finding could be on the basis of cogent and appropriate evidence on record. Rule 6 of Order XII certainly enables a party to obtain a speedy judgment fully or partially to which according to the admission of the defendant the plaintiff is entitled to. In the case of the Uttam Singh Duggal and Co. vs. Union Bank of India and Ors. AIR 2000 SC 2740 the Court while explaining the scope and ambit of these provisions held as under :


?Learned counsel for the appellant contended that Order XII, Rule 6 comes under the heading 'admissions' and a judgment on admission could be given only after the opportunity to the other side to explain the admission, if any, made; that such admission should have been made only in the course of the pleadings or else the other side will not have an opportunity to explain such admission, that even though, the provision reads that the Court may at any stage of the suit make such order as it thinks fit effect of admission, if any, can be considered only at the time of trial; that the admission even in pleadings will have to be read along with Order VIII, Rule 5(1) of CPC and Court need not necessarily proceed to pass an order or a judgment on the basis of such admission but call upon the party relying upon such admission to prove its case independently, that during pendency of other suits and the nature of contentions raised in the case, it would not be permissible at all to grant the relief before trial as has been done in the present case; that the expression 'admissions' made in the course of the pleadings or otherwise will have to be read together and the expression 'otherwise' will have to be interpreted ejusdem generies. As to the object of the Order XII, Rule 6, we need not say anything more than what the legislature itself has said when the said provision came to be amended. In the objects and reasons set out while amending the said rule, it is stated that ?where a claim ia admitted, the Court has jurisdiction to enter a judgment for the plaintiff and to pass a decree on admitted claim. The object of the Rule is to enable the party to obtain a speedy judgment at least to the extent of the relief to which according to the admission of the defendant, the plaintiff is entitled.? We should not unduly narrow down the meaning of this Rule as the object is to enable a party to obtain speedy judgment. Where other party has made a plain admission entitling the former to succeed, it should apply and also wherever there is a clear admission of facts in the face of which, it is impossible for the party making such admission to succeed. The next contention canvassed is that the resolutions or minutes of meeting of the Board of Directors, resolution passed thereon and the letter sending the said resolution to the respondent bank cannot amount to a pleading or come within the scope of the Rule as such statements are not made in the course of the pleadings or otherwise. When a statement is made to a party and such statement is brought before the Court showing admission of liability by an application filed under Order XII, Rule 6 and the other side has sufficient opportunity to explain the said admission and if such explanation is not accepted by the Court, we do not think the trial Court is helpless in refusing to pass a decree. We have adverted to the basis of the claim and the manner in which the trial Court has dealt with the same. When the trial Judge states that the statement made in the proceedings of the Board of Directors meeting and the letter sent as well as the pleadings when read together, leads to unambiguous and clear admission with only the extent to which the admission is made is in dispute. And the Court had a duty to decide the same and grant a decree. We think this approach is unexceptionable.


6. The powers under Order XII rule 6 of the Code has to be exercised judicially on the facts and circumstances of each case. The admission on the basis of which the Court wishes to pass a decree has to be unambiguous, clear and unconditional. There is no doubt that in a suit there can be more than one decree passed at different stages and each decree being separate and independent is enforceable in accordance with law, was the principle stated by AIR 1971 SC 1081 Chanchal vs. Jalaluddin. Admission understood in its common parlance still must be a specific admission. There is very fine distinction between unambiguous and specific admission on the one hand and vague averments of facts which, if proved, could even tantamount to an admission on the part of a party to the suit. The Court has to consider the need for passing a decree on admission under these provisions only in the cases of first category and normally should decline in the cases of the later category.


7. The term 'Admission' in Section 70 of the Evidence Act relates only to admission of a party in the course of the trial of the suit and not to the attestation of a document by the party executing it. The essential feature of admission is that it should be 'Concise and deliberate act'. It must not be something which was not intended and was not the intention of the party. Pre- requisite to admission are unconditional, unambiguous and intend the same to be read and construed as admission. The scope of admission of a claim is also explained under Order IX Rule 8 of the Code of Civil Procedure, which contemplates that there must be a claim as laid down in the plaint which is admitted, for the ground stated therein and not simply an admission of cause of action. The legislative intent is clear from the provisions of the Code that an admission has to be unambiguous and clear. The Black's Law Dictionary explain the word 'Admission' as follows :


?admission: Any statement or assertion made by a party to a case and offered against that party; an acknowledgment that facts are true. Admission against interest. A person's statement acknowledging a fact that is harmful to the person's position as a litigant. An admission against interest must be made either by a litigant or by one in privity with or occupying the same legal position as the litigant.?


8. It is also a settled principle of civil jurisprudence that judgment on admission is not a matter of right and rather is a matter of discretion of a Court. Where the defendant has raised objection which will go to the very root of the case, it would not be appropriate to exercise this discretion. The use of the words 'May' and 'make such orders' or 'give such judgment' spells out that power under these rules are discretionary and use of discretion would have to be controlled in accordance with the known judicial cannons. The cases which involves questions to be decided upon regular trial and the alleged admissions are not clear and specific, it may not be appropriate to take recourse to these provisions. In the case of Pariwar Sewa Sansthan vs. Dr.(Mrs)Veena Kalra and Ors. AIR 2000 Delhi 349 the Court examined at length the provisions and the need for an admission to be unequivocal and positive. The admission would obviously have the consequences of arriving at that conclusion without determination of any question and evidence. The Court while relying upon the case of Balraj Taneja and Another vs. Sunil Madan and Another AIR 1999 SC 3381 and Dudh Nath Pandey vs. Suresh Chandra Bhattasali AIR 1986 SC 1509 held as under : ?In Razia Begum v. Sahebzadi Anwar Begum it was held that Order 12 Rule 6 has to be read along with the proviso to Rule 5 of Order 8. That is to say, notwithstanding the admission made by the defendant in his pleading, the Court may still require the plaintiff to prove the facts pleaded by him in the plaint. Thus, in spite of admission of a fact having been made by a party to the suit, the Court may still require the plaintiff to prove the fact which has been admitted by the defendant. At this stage it would be useful to recall some factual contentions emerging from the pleadings : In 1995 the appellant/defendant was asked to vacate and hand over possession of the suit premises, on the ground of the violation of the terms of the lease; On 25th May, 1996 a notice was alleged to have been served upon the defendant, requiring it to vacate the premises, on 12th September, 1996, tenancy is alleged to have expired by efflux of time and on 8th September, 1996, telegraphic notices were also alleged to have been served upon the defendant. The defendant had pleaded that they were the contractual tenants in respect of the basement since 12-9-90 and in respect of ground floor since 29-11-85; that the lease deeds dated 12-5-94 were never acted upon and were sham documents; two tenancies existed in respect of the ground floor and two tenancies existed in respect of the basement and plaintiff Nos. 1 and 2 used to get separate cheques in their individual names, in respect of each of these portions. In fact, the plaintiffs did not deny the fact that they had been receiving the rent separately in their respective names, with regard to the ground floor and basement tenancies. However, it was pleaded that in 1995, the defendants started issuing two separate cheques in the name of each of the plaintiffs for their convenience. On the basis of these pleadings trial Court, inter alia, framed specific issues that whether the defendant is a contractual tenant or not and whether the lease was validly terminated or was terminated by efflux of time? The question whether defendant became contractual tenant after 1995, when they were called upon to vacate the premises on the ground of alleged violation of the terms of the lase, and effect of the circumstances leading to the acceptance of the rent by the two plaintiffs individually in their respective names would require trial. These questions could not be determined without evidence and, therefore, it cannot be said to be a case of ?unequivocal? and clear positive admission, which is an essential requirement of law for a decree on admission. Learned trial Court instead of concentrating on the question that whether there was any admission on the part of the defendant or not in its pleadings or elsewhere, proceeded to adjudicate upon some of the issues on merits by observing that the pleas raised by defendant are unbelievable, which could not have been done. There being triable issues raised going to the root of the case, the trial Court ought to have proceeded to try the suits and returned findings on merits. The impugned judgment and decrees are thus liable to be set aside and the suits deserve to be remanded for trial in accordance with law.


9. In the light of the above principles of law, now we will revert back to the facts of the present case. The learned Judge has noticed that vide letter dated 23.9.2000 the defendant no.2 had stated that an amount of Rs.3.97 lacs prior to the meeting with him had come down to Rs.0.36 lacs without any payment by him. The Court also observes that they had not disputed the liability of Rs.1,54,949/- in their letter. The learned Trial Court felt that the defendants had returned the goods worth Rs. 54949/- and they admitted their liability to pay Rs.0.36 lacs in the letter dated 23.9.2000 thus decreed the suit taking it to be an admission on the part of the defendants to the extent of Rs.1,90,949/-. These findings of the Court appear to be not in consonance with the settled principles. In the letter dated 22.9.2000 the defendants had made a reference to the meeting held on 22.9.2000 wherein the company had agreed to take back old materials valued at Rs.1,54,949/- and also agreed to release the payment of Rs.66,415/- both of them were to be performed simultaneously. In this very letter, it was stated that the agreed settlement had not taken place till date and, therefore, the settlement could not conclude. The letter dated 22.9.2000 was written by the plaintiff to the defendant and had asked as to when the accounts can be settled. On 23.9.2000 the defendants had written a letter to the plaintiff referring to the meeting wherein definite allegations were made by him against the plaintiff stating that number of dealers were being harassed on filmsy grounds and debit notes were being issued to pressurise the dealers. The outstanding amount which was Rs. 3.97 lac prior to the meeting with the plaintiff had on its own come down to Rs.0.36 lacs when the defendant had not paid anything to the plaintiff. This was stated by way of an example by the defendants to show as to how properly the accounts were being managed. Thereafter, reference was made to the possibilities of settlement in due course. The decree based on admission of the Trial Court is founded on these two letters. One letter is written by the plaintiff to the defendant while the other letter is written by the defendant to the plaintiff. The letter written by

Please Login To View The Full Judgment!

the plaintiff to the defendant could in no way, by any stretch of imagination, be treated as an admission of the defendant of his liability to pay to the plaintiff the amount referred in that letter. The letter dated 23.9.2000 written by the defendant to the plaintiff was a grievance raised to indicate that the plaintiff was not even maintaining the accounts regularly and as such it would not only be unfair but even unjust to treat that letter as an admission of law. This, in fact, cannot even construe on interpretation as an admission much less a direct and unequivocal admission of the defendant of any liability towards the plaintiff. In fact, prior to these letters vide letter dated 12th July, 1999 (Ex P8) the defendant had written to the plaintiff that some money was blocked. The letter dated 12th July, 1999 again is a letter which refers to various aspects of business including that the defendant has to pay some amount to the company. In that very letter it was stated that credit notes had not been issued, returned goods values had not been adjusted and the defendant had claimed a sum of Rs.40,000/- payable to him from the plaintiff. 10. The cumulative effect of the above discussion is that there is no unambiguous, specific and clear admission by the defendant of his liability towards the plaintiff much less of any definite claim as stated in the plaint. In the written statement large factual and legal controversies have been raised which require determination by the Court of competent jurisdiction before any decree could be passed. Viewed from any angle, the facts and circumstances of the present case cannot justify passing of a decree on admission, on facts and in law. 11. In the light of the above discussion, we set aside the judgment and decree of the Trial Court dated 29th October, 2003 with direction that the Trial Court shall now proceed with the suit in accordance with law while leaving the parties to bear their own costs. 12. We make it clear that any observation made in this judgment would no way be of any consequence for the Trial Court while it proceeds to record its final judgment.
O R