Case Note & Summary
The appeal was filed by the First Defendant (Jayesh Nagindas Doshi) against an order of the learned Single Judge in a summary suit under Order XXXVII of the Code of Civil Procedure, 1908. The suit was filed by the Plaintiff (Ashapura Aluminium Ltd. and others) for recovery of Rs.81.33 lakhs with interest. The Appellant was appointed as CFO and later Executive Director of the Plaintiff company. The Plaintiff alleged that the Appellant misused his position to introduce the Third Defendant (Second Defendant in the suit) to arrange finance for a project, and that on 9 October 2009, the Appellant along with another employee issued an advice to Yes Bank Limited authorizing a payment of Rs.75.65 lakhs to the Third Defendant. The Appellant resigned on 11 September 2009 and was to be relieved on 30 November 2009. The Plaintiff claimed that the payment was unauthorized. The Appellant contended that he acted under the authority of the Board and that the payment was for a legitimate purpose. The learned Single Judge granted conditional leave to defend to the Appellant requiring deposit of Rs.50 lakhs, and made the summons for judgment absolute against the Second and Third Defendants who did not appear. The Appellant appealed against the condition. The Division Bench held that the Appellant had raised triable issues regarding his authority and the nature of the transaction, but the condition of deposit was not disproportionate given his senior position and involvement. The appeal was dismissed, and the Appellant was granted eight weeks to comply with the deposit condition.
Headnote
A) Civil Procedure - Summary Suit - Conditional Leave to Defend - Order XXXVII of the Code of Civil Procedure, 1908 - The appeal challenged an order granting conditional leave to defend requiring deposit of Rs.50 lakhs. The court examined whether the Appellant had raised triable issues and whether the condition was proportionate. Held that the Appellant had raised triable issues regarding the authority to issue the advice to the bank and the nature of the transaction, but the condition of deposit was upheld as the Appellant was a senior officer who participated in the transaction (Paras 1-10).
Issue of Consideration
Whether the learned Single Judge was justified in granting conditional leave to defend to the Appellant (First Defendant) in a summary suit under Order XXXVII of the Code of Civil Procedure, 1908, requiring a deposit of Rs.50 lakhs.
Final Decision
The appeal was dismissed. The order of the learned Single Judge granting conditional leave to defend to the Appellant on deposit of Rs.50 lakhs within eight weeks was upheld. The Appellant was granted eight weeks from the date of the order to comply with the deposit condition.
Law Points
- Summary suit
- Order XXXVII CPC
- conditional leave to defend
- triable issues
- deposit condition
Case Details
2013 LawText (BOM) (04) 36
Appeal No.751 of 2012 in Summons for Judgment No.485 of 2010 in Summary Suit No.1958 of 2010
Dr. D.Y. Chandrachud, A.A. Sayed
Mr. Pravin Samdani, Sr. Advocate with Mr. Mayur Khandeparkar, Mr. Vinod Kothari and Ms. Smita R. Lad i/by M/s. Apex Law Partners for Appellant; Mr. D.H. Mehta with Mr. Dahivat Mehta, Mr. Mayur Bhatt i/by Mr. Y.C. Dhebar for Respondents
Ashapura Aluminium Ltd. and others
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Nature of Litigation
Appeal against order granting conditional leave to defend in a summary suit for recovery of money.
Remedy Sought
The Appellant sought to set aside the condition of deposit of Rs.50 lakhs imposed by the learned Single Judge for granting leave to defend.
Filing Reason
The Appellant challenged the order of the learned Single Judge which granted him conditional leave to defend requiring a deposit of Rs.50 lakhs.
Previous Decisions
The learned Single Judge granted conditional leave to defend to the Appellant (First Defendant) on deposit of Rs.50 lakhs within eight weeks, and made the Summons for Judgment absolute against the Second and Third Defendants who did not appear.
Issues
Whether the Appellant had raised triable issues entitling him to unconditional leave to defend?
Whether the condition of deposit of Rs.50 lakhs was disproportionate or unjustified?
Submissions/Arguments
Appellant argued that he had raised triable issues regarding his authority to issue the advice to the bank and that the payment was for a legitimate purpose, and thus should be granted unconditional leave to defend.
Respondent argued that the Appellant misused his position and the payment was unauthorized, and the condition of deposit was reasonable given the amount involved.
Ratio Decidendi
In a summary suit under Order XXXVII CPC, the court may grant conditional leave to defend if the defendant raises triable issues but the court considers it just to impose a condition, such as a deposit, to protect the plaintiff's interest. The condition must be proportionate to the facts of the case.
Judgment Excerpts
The appeal has been preferred by the First Defendant against an order of the learned Single Judge on a Summons for Judgment taken out in a summary suit under Order XXXVII of the Code of Civil Procedure, 1908.
By the impugned judgment, the Appellant has been granted leave to defend the suit conditional on a deposit of an amount of Rs.50.00 lakhs within a period of eight weeks.
Procedural History
The Plaintiff filed Summary Suit No.1958 of 2010 for recovery of Rs.81.33 lakhs. The Plaintiff took out Summons for Judgment No.485 of 2010. The learned Single Judge granted conditional leave to defend to the First Defendant (Appellant) on deposit of Rs.50 lakhs, and made the summons absolute against the Second and Third Defendants. The First Defendant appealed against the condition.
Acts & Sections
- Code of Civil Procedure, 1908: Order XXXVII
