Case Note & Summary
The Petitioner, Minda Vast Access System Private Ltd., filed a Writ Petition under Article 227 of the Constitution of India challenging the order dated 7 December 2016 passed by the Joint Civil Judge, Senior Division, Khed-Rajgurunagar, rejecting its application for leave to defend in Special Summary Suit No.2 of 2016. The Respondent, Rainbow Garnishers Private Limited, had filed the summary suit for recovery of Rs.37,33,586/- towards the price of supplied products. The Petitioner-Defendant sought unconditional leave to defend on the ground that the goods supplied were defective, raising triable issues. The Trial Court rejected the application, holding that the Petitioner had admitted receipt of goods and invoices, and that under Section 42 of the Sale of Goods Act, 1930, there was a presumption of acceptance of goods, and since the goods were not rejected within a reasonable time, they were deemed accepted. The High Court, after hearing both sides, noted that the Petitioner's claim of defective goods was a triable issue. The Court observed that the Trial Court had erroneously applied the presumption under Section 42 without considering that the question of whether the goods were defective and whether the buyer had a reasonable opportunity to reject them were matters that required evidence. The High Court set aside the impugned order and granted unconditional leave to the Petitioner to defend the suit, directing the Trial Court to proceed with the suit in accordance with law. The Court also made Rule absolute and disposed of the petition.
Headnote
A) Civil Procedure - Summary Suit - Leave to Defend - Order 37 CPC - The defendant sought unconditional leave to defend a summary suit for recovery of price of goods, alleging that the goods were defective. The Trial Court rejected the application holding that the defendant had admitted receipt of goods and invoices, and that under Section 42 of the Sale of Goods Act, 1930, the goods were deemed accepted. The High Court held that the defendant's claim of defective goods raised a triable issue, and therefore, the defendant was entitled to unconditional leave to defend. (Paras 1-8)
B) Sale of Goods Act - Acceptance of Goods - Section 42 - The presumption of acceptance under Section 42 of the Sale of Goods Act, 1930, arises only if the buyer retains the goods without intimating rejection within a reasonable time. However, the question of whether the goods were defective and whether the buyer had a reasonable opportunity to reject them are triable issues that cannot be decided without evidence. (Paras 5-8)
Issue of Consideration
Whether the Trial Court was justified in rejecting the application for leave to defend the summary suit on the ground that there was no triable issue, given the defendant's claim that the goods supplied were defective.
Final Decision
The High Court allowed the Writ Petition, set aside the impugned order dated 7 December 2016, and granted unconditional leave to the Petitioner to defend the suit. The Trial Court was directed to proceed with the suit in accordance with law. Rule made absolute.
Law Points
- Leave to defend in summary suit
- Triable issues
- Section 42 Sale of Goods Act 1930
- Presumption of acceptance of goods
- Unconditional leave to defend
Case Details
2018 LawText (BOM) (04) 31
WRIT PETITION NO.2342 OF 2017
DR. SHALINI PHANSALKAR-JOSHI, J.
Mr. Anoop U. Patil for the Petitioner, Mr. Anand S. Shalgaonkar a/w. Mr. Yogesh Dhore for the Respondent
Minda Vast Access System Private Ltd.
Rainbow Garnishers Private Limited
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Nature of Litigation
Writ Petition under Article 227 of the Constitution of India challenging the order rejecting leave to defend in a summary suit for recovery of money.
Remedy Sought
The Petitioner sought setting aside of the Trial Court's order and grant of unconditional leave to defend the summary suit.
Filing Reason
The Petitioner claimed that the goods supplied by the Respondent were defective, raising triable issues, and thus the Trial Court erred in rejecting the leave to defend application.
Previous Decisions
The Trial Court rejected the application for leave to defend on 7 December 2016, holding that the Petitioner had admitted receipt of goods and invoices, and that under Section 42 of the Sale of Goods Act, 1930, the goods were deemed accepted.
Issues
Whether the Trial Court was correct in holding that there was no triable issue and rejecting the leave to defend application.
Whether the presumption under Section 42 of the Sale of Goods Act, 1930, applies when the defendant alleges that the goods were defective.
Submissions/Arguments
Petitioner argued that there were no crystallized dues and that the summary suit itself was not maintainable. Further, the Petitioner had its own books of accounts and should be given an opportunity to show that the goods were defective.
Respondent supported the Trial Court's order, arguing that the Petitioner had admitted receipt of goods and invoices, and the goods were not rejected within reasonable time, thus deemed accepted.
Ratio Decidendi
In a summary suit, if the defendant raises a triable issue, such as the goods being defective, the defendant is entitled to unconditional leave to defend. The presumption of acceptance under Section 42 of the Sale of Goods Act, 1930, does not automatically bar the defendant from raising the defense of defective goods, as the question of whether the goods were accepted or rejected within reasonable time is itself a triable issue.
Judgment Excerpts
The Trial Court has, however, rejected the said application, holding that the Petitioner-Company has admitted the receipt of the goods and the Invoices raised by the Respondent-Company and in such situation, 'the presumption of acceptance of goods', under Section 42 of the Sale of Goods Act, is attracted.
The submission of learned counsel for the Petitioner is that, there are no crystallized dues, which are to be liquidated, admitted, acknowledged and in such situation, there cannot be a Summary Suit itself.
In support of his submission, learned counsel for the Petitioner has placed reliance on the Judgment of the Division Bench of this Court in the case of Vinod Kumar Saboo Vs. Sudarshan Vishwanath Malpani and Ors., MANU/MH/0542/2017
Procedural History
The Respondent filed Special Summary Suit No.2 of 2016 for recovery of Rs.37,33,586/-. The Petitioner-Defendant filed an application at Exhibit-16 seeking leave to defend. The Trial Court rejected the application on 7 December 2016. The Petitioner then filed the present Writ Petition under Article 227 of the Constitution of India challenging that order.
Acts & Sections
- Sale of Goods Act, 1930: 42
- Code of Civil Procedure, 1908: Order 37
- Constitution of India: Article 227
