Case Note & Summary
The plaintiff, Goculdas Dossa & Company, a registered partnership firm, filed a summary suit against the defendant, Kirtikumar Mulji Thakkar, sole proprietor of Viram Ladha & Co., seeking recovery of Rs. 8,53,757/- with interest at 14% per annum. The suit was based on a Conducting Agreement dated 15th October 2009, under which the defendant agreed to run the plaintiff's factory at Yavatmal from 1st November 2009 to 31st May 2010. The defendant agreed to provide a bank guarantee of Rs. 10 lacs as security and to pay royalty of Rs. 6,50,500/- via seven postdated cheques. The plaintiff alleged that a cheque of Rs. 10 lacs towards security deposit was dishonoured, and that a cheque of Rs. 1 lac dated 31st December 2009 was returned with 'No Balance'. Despite letters dated 27th January 2010, 15th February 2010, and 29th March 2010, and a legal notice dated 17th June 2010, the defendant failed to pay. The defendant contended that the cheques were given as security and not towards payment, that the plaintiff failed to provide raw materials and electricity, causing losses, and that the plaintiff committed breach of contract by terminating the agreement prematurely. The court found that the defendant raised triable issues, including whether the cheques were towards security or payment, and whether the plaintiff committed breach. Consequently, the court granted unconditional leave to defend the suit, setting aside the earlier order of conditional leave. The summons for judgment was disposed of accordingly.
Headnote
A) Civil Procedure - Summary Suit - Leave to Defend - Order 37 of Code of Civil Procedure, 1908 - Triable Issues - Plaintiff filed summary suit for recovery of Rs. 8,53,757/- based on a Conducting Agreement dated 15th October 2009 - Defendant alleged that cheques were given as security and not towards payment, and that plaintiff failed to provide raw materials and caused losses - Court held that defendant raised triable issues including whether cheques were towards security or payment, and whether plaintiff committed breach of contract - Defendant granted unconditional leave to defend (Paras 1-8).
Issue of Consideration
Whether the defendant should be granted unconditional leave to defend the summary suit on the ground that triable issues exist.
Final Decision
The court granted unconditional leave to the defendant to defend the suit. The earlier order granting conditional leave was set aside. The summons for judgment was disposed of.
Law Points
- Summary suit
- leave to defend
- triable issues
- Order 37 CPC
- Conducting Agreement
- dishonour of cheques
- security deposit
- royalty
