Unicorn Denmart Ltd v. Vatech Global Co Ltd & Ors

Order XXXVII Rule 3(4) of the CPC rendered the summons for judgement as suffering with legal infirmity. This finding has not been contested or challenged by the respondent/plaintiff. Page 9 of12 V f.

¶22In view of the above discussion, there is nothing on record to supportthe suit claim and thereforethe very issuanceof summons for judgementwas unjustified.We have noted above the judicial precedentswhichhave notedthatthe requirementsfor filingof the affidavit in the prescribedformat in support of the summons for judgmentcannot be exempted.The judgementsuphold that if an invalid and defective summons for judgment is issued, the defendant is not even obliged to file an application for leave to defend.

¶23The learned Single Judge having concluded that the summonsfor judgementsufferedwith legal infirmityandrecorded satisfaction that it was a fit case to grant leave to the defend to the defendant,couldnot have imposeda conditionupon the defendants to deposittheentiresuitamountinCourt.In this background,there is substance in the objections on behalf of the appellant that in these circumstances the defendant would be entitled to unconditional leave to defend.'

¶24We may note that while issuingnotice in the presentappeal on 31'^ July, 2017 and granting such directions to deposit the amountmade by learnedSingleJudge in the impugnedorderdated 31'^May, 2017,we had directedthe appellantto depositsecurityin the amountof Rs. 2,77,26,742/-to the satisfactionof the concerned Registrar.

¶25We find that the appellanthas furnishedsecurityin respect of following two properties: 10of12 V f

(i) Commercial property No.05, situated in LSC, MOR land, Rajendra Nagar, New Delhi-110060.

(ii)CGE222, DLF Capital Greens, 15, Shivaji Marg, New Delhi-15.

¶26It is submitted by Mr. Suhail Dutt, learned senior counsel submit that without prejudice to the rights, contentions and objections of the appellant with regard to the legality and maintainability of the claims made, the appellant is willing to furnish security of immovable property to the satisfaction of the learned Single Judge in order to ensure recovery of any amount which the appellant may be found and held liable to pay to the defendants / respondents. : ,

¶27We therefore find that there was insufficient material before the learned Single Judge to record satisfaction and conclude that the appellant holds the sum of Rs. 2,77,26,742/- and set aside this finding. Y v

¶28In view thereof, subject to the appellants/defendants furnishing security afiresh for the amount to the extent of Rs.2,77,26,742/- in CS(OS)-No.1849/2015 to the satisfaction of the Registrar of this Court, to cover any decree which may be passed, we set aside the condition imposed in para 34 of the impugnedorderdated30^''May, 2017 wherebythe defendantswere directedto depositthe saidamountwiththeRegistrarGeneral.

¶29We find that suretybondof one of the properties,whichwas, acceptedby the Registrarwas a residentialproperty.The appellant shall furnishonly securityof such propertywhich couldbe soldto FAO(OS)2I9/2017 11 of12 / enable recovery of the decretal amount. The Registrar shall ensure that the security furnished is of such property only.

¶30The appeal is allowed in the above terms.

¶31In view of the order in the main appeal, the application does not survive for adjudication and is disposed of as such.

¶32No order as to costs. MARCH 14, 2018 rk ACTING CHIEFJPUSTICE C.HARIS s" • > •'! , • . , .V • ; - a: -f-Page 12 of12

$-7 *IN THE HIGH COURT OF DELHI AT NEW DELHI + FAO(OS) 219/2017 & CM APPL.27015/2017 Date of Decision; 14^*^ March, 2018 UNICORN DENMART LTD Appellant Through Mr. Suhail Dutt, Senior Advocate with Mr. Gunjan Kumar and Mr. Azhar Alam, Advocates versus VATECH GLOBAL CO L®&;:GRS; .... Respondents Thl-bugh ,^..;j^.yinodKhurana'^d- . .r . Vig, Advs. CORAM: HON'BLE THE ACTING CTIEF JUSTICE HON'BLEMR. JUSrt^Eciiiitfti SHANKAR GITAMITTAL,ACTINGAlSF:jBin(CE 1. By way of the present appeal, challenge is made to an order dated 30th May, 2017 passed by the learned Single Judge granting conditional leave to defend to the appellant (defendant in the suit) while allowing LA. No.25396/2015 (under Order XXXVII Rule 3(4) ofthe CPQ in CS(OS) No.1849/2015 (Vatech Global Co. Ltd V. Unicorn Denmart Ltd.). 2. To the extent necessary, we will note the essential facts giving rise to the present appeal. The respondent (plaintiff in the suit) filed CS(OS) No.1849/2015 for recovery of an amount of FAO(OS)219/2017 Page1 of12 n Rs.2,77,26,742/- under the provisions of Order XXXVII Rule 3(5) of the CPC. This amount was stated to be payable by the appellant/defendant on account of goods supplied by the respondent/plaintiff based on purchase orders from the appellant/plaintiff received through e-mails issued by the defendant. Towards these supplies, the respondent raised proforma invoices dated 15th October, 2014, 31st October, 2014, 25th November, 2014 and 26th November, 2014 based whereon, it was stated that the defendant was making payments. 3. So far as the suit claim was concerned, according to the plaintiff, the defendant had paid 50 percent of the amounts of the four proforma invoices as advance.^K;--Vf 4. It is averred that despite repeated reminders, the defendants did not pay the balance amount of 50% and therefore, the suit was filed by the plaintiff under Order XXXVII of the CPC. On receipt of the summons, in the prescribed format under Order XXXVII Rule 3(5) of the CPC, the defendant entered appearance and filed its memo of appearance. Thereafter, the respondent/plaintiffin pi^ortedcomplianceofthe requirementsof Order XXXVII Rule 3(4) of the CPC filed an application for summons for judgment. In as much as the appeal rests on the primary contention that the plaintiff violated this provision, for expediency, we extract hereunder. Rules 3(4) and 3(5) of Order XXXVII which reads as follows :- FAO(OS)219/2017 Page2of12 3. Procedure for the appearance ofdefendant:- XXX XXX XXX (4) If the defendant enters an appearance, the plaintiff shall thereafter serve on the defendant a summonsfor judgment in Form No. 4A in Appendix B or such other Form as may beprescribed from time to time, returnable not less than ten daysfrom the date of service supported by an affidavit verifying the cause of action and the amount claimedand stating that in his beliefthere is no defenceto the suit. (5) The defendant may at any timewithin ten daysfrom the service of such summons for It's affidavitor otherwised suchfacts as may be deemed sufficient to entitle him to defend , apply on such summonsfor leave to defendsuch suit, and leave to defendmay begranted to him unconditionallyor upon such terms as may appear to the court or judge to be just: Provided that leave to defend shall not be refused unless the court is satisfied that the facts disclosedby the defendantdo not indicatethat he has ^ a substantialdefence to raise or that the defence intended to beput up by the defendant isfrivolous or vexatious: Provided further that, where a part of the amount claimed by the plaintiff is admitted by the defendant to be duefrom him, leave to defend the suit shall not be granted unless the amountso admitted to be due is deposited by the defendant in court. " (Emphasis supplied) 4. So far as the compliance of the above statutory requirement FA0(0s)219/2017 Page3 of12 is concerned, the plaintiff seeking issuance of summons for judgment,has to file anaffidavitinthe prescribedformat'verifying