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The Companies Act, 1956
The Code Of Civil Procedure (Amendment) Act, 1956
The Indian Penal Code
The Negotiable Instruments Act, 1881
Section 4 in The Companies Act, 1956

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Bombay High Court
Sai Om Petro Specialities Ltd vs Shiva Industrial Estate Co-Op. ... on 22 July, 2011
Bench: Anoop V.Mohta
    ssm                                    1                                       sj383.10.sxw


            IN THE HIGH COURT OF JUDICATURE AT BOMBAY

                   ORDINARY ORIGNAL CIVIL JURISDICTION




                                                                                  
                SUMMONS FOR JUDGMENT NO. 383 OF 2010




                                                          
                                IN
                   SUMMARY SUIT NO. 2853 OF 2009




                                                         
    Sai Om Petro Specialities Ltd.,
    a company incorporated under the
    Companies Act, 1956 having its registered
    address at 404, Sunny Estate No.2,




                                              
    V.N. Purav Marg (Sion Trombay Road),
    Chembur, Mumbai-400 071.  ig                                   ...Plaintiff

          Versus
                            
    M Industries
    Through Proprietor Mr. Pinto
    a company incorporated under the
    Companies Act, 1956 having its address at
            


    Shiva Industrial Estate Co-op. Society Ltd.,
    'B' Wing, Gala No. 109, First floor,
         



    CTS No. 118/1 to 4, Village Bhandup,
    Lake Road, Bhandup (West),
    Mumbai-400 078.                                                ...Defendant





    Ms. Sunita Sonawane for the Plaintiff.
    None for the Defendant. 





                               CORAM :  ANOOP V. MOHTA, J.
                               DATE     :  22 JULY 2011.

    ORAL JUDGMENT:-


The Plaintiff is a builder/promoter, has filed this Suit for ::: Downloaded on - 09/06/2013 17:32:39 ::: ssm 2 sj383.10.sxw recovery of alleged maintenance charges based upon the bills raised from time to time on the foundation of agreement for sale dated 31 August 2004 (the agreement) between the Developer-Plaintiff and the Defendant-the Purchaser individually. The Summons for Judgment is also taken out. Though served, the Defendant has not filed any reply to the Summons for Judgment.

2 The basic case of the Plaintiff/Builder/Promoter is revolving around the agreement. As alleged, the Defendant has purchased an industrial Gala in the Industrial Estate, constructed as Shiva Estate at village Bhandup, Lake Road, Bhandup (West), Taluka Kurla, District Mumbai. The Gala/ Unit was intended to sale on ownership basis as contemplated under the Maharashtra Ownership Flats Act, 1963 (The MOFA Act).

3 The Plaintiff, who is a promoter within the meaning of Section 2(e) and as under obligation to execute an agreement for sale of Industrial Gala/Unit, as contemplated under Section 4 of the MOFA Act, has executed the duly stamped registered agreement. The relevant portion of Clause 12 of the agreement reads as follows:-

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ssm 3 sj383.10.sxw "Until the society is formed and the said land and building transferred to it, the Purchaser shall pay to the Developer such proportionate share of outgoing as may be determined. The Purchaser further agrees that till the Purchaser's share is so determined the Purchaser shall pay to the Developer provisional monthly contribution of Rs.2083/- per month towards the outgoing. The amounts so paid by the Purchaser to the Developer shall not carry any interest and remain with the Developer until a conveyance as executed in favour of the society as aforesaid. Subject to the provision of section 6 of the said Act, on such conveyance being executed the aforesaid deposit (less deduction provided for this agreement) shall be paid over by the Developer to the society as the case may be. The Purchaser undertakes to pay such provisional monthly contribution and such proportionate share of outgoing expenses regularly on the 10th day of each month in advance and shall not withhold the same for any reason."

4 There are various other clauses based upon which the Plaintiff submitted that the Defendant, along with other purchasers, has been enjoying actual possession of the Gala since 5 August 2004, even before the issuance of occupation certificate by the Mumbai Municipal Corporation. The composite bills so raised by the Plaintiff have remained unpaid and therefore, such Summary Suit and Summons for Judgment is maintainable. As per the averments, the occupation certificate was granted by the Municipal Corporation in the year 2007. The water and sewerage charges have been waived.

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    5      The   Suit   is   based   upon   the   bills   of   arrears   from   2006   only. 




                                                                                      

Those are part of the record. The claim is also made of interest @ 18% p.a. from July 2006. The bills so raised are consist of the following particulars:-

             Sr.                              Particulars




                                                 
             No.
                1
                2
                               
                      MCGM Property Tax 01-12-07 To 31-12-07

Service & Maintenance Charges @600/- p.m. (01-12-2007 to 31-12-2007) 3 Arrears upto 30-11-2007 4 Interest on arrears @ 21% p.a. On Rs.195168(01-11-07 to 30-11-07) 5 Penalty @ 10% p.a. 6 Building, Maint. Reserve @ Rs.200/- p.m. Per unit.

6 The Plaintiff, as the Defendant failed to make the payment demanded, inspite of service of those monthly bills, has issued a legal notice on 26/06/2008. The Defendant along with other purchasers/occupiers resisted the said demand by common reply dated 3 July 2008.

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    7       The Defendant through the common reply to the demand notice 

contested and raised various grievances about the breaches committed by the Plaintiff, thereby resisted the claim in all respect.

The reference was made to the criminal cases pending before the Magistrate, based upon the various provisions of the IPC, as well as, the MOFA Act. There is a counter claim raised to the extent of ` 3 lacs per Gala, alleging negligence of the Plaintiff.

8

Though there is no reply/defence raised by the Defendant. The averments made by the Plaintiff in support of the Suit, as well as, the Summons for Judgment, remained uncontroverted, still it is necessary for the Court before passing order/judgment to consider the merits of the matter.

9 The Court needs to exercise jurisdiction as contemplated under order XXXVII of the Civil Procedure Code (CPC) after taking into consideration the facts and the supporting documents, as well as, the relevant law. I have noted in Satchi Development Company Pvt. Ltd.

Vs. Karishma Mahtani & Vijayalakshmi Shyamsunder Advani 1, as under:-

1 SJ 41 OF 2010 IN SS 2778 OF 2009 dated 19 July 2011.

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ssm 6 sj383.10.sxw "15 The full bench of this Court in Jyotsna K. Valia Vs. T.S. Parekh & Co. 2 has observed as under-

"28. Before answering the issue we must note that there must be the following requirements before a summary suit would lie:-

                   (1)       There must be a concluded contract;
                   (2)       The contract must be in writing;
                   (3)       The   contract   must   contain   an   express   or  
                             implied promise to pay. 




                                                  

There is no dispute in respect of the first two predicates. The only issue is in respect of the third predicate. As we have noted earlier, we are not concerned here with an implied contract, but an implied term in a written contract. The defendants would be right to contend that an implied contract is not a written contract."

......

"The issue before us is limited to an implied promise to pay. That would necessarily depend on the facts of each case. The two issues as formulated may now be answered."

10 The relevant points for deciding such Summary Suits are as under:-

(a) A Plaintiff, if chooses to invoke the provisions of Order XXXVII for recovery of amount, the basic obligations and elements as required need to be fulfilled. The summary suit 2 2007(3) Bom.C.R. 772 ::: Downloaded on - 09/06/2013 17:32:39 ::: ssm 7 sj383.10.sxw so filed must fall within the four corner of Order XXXVII for getting judgment/decree summarily.
(b) The object of Order XXXVII is to recover the crystalised dues, liquidated, admitted, acknowledged debt/monetary claim by a summary procedure, without long trial, principally based upon a written document executed in the course of business, in accordance with law. It is a supportive measure for recovery of unpaid debt/amount covering all the negotiable instruments as contemplated under the Negotiable Instrument Act, apart from a valid, written contract/receipt/acknowledgment. It may be an express term or an implied term, based upon facts and circumstances of the case, considering the practice, trade and usage of the commerce and the trade. This also covers apart from principal amount, express or implied terms of the interest.
(c) If the Defendant fail to enter appearance inspite of the service, the Plaintiff's averments/allegation, if supported by due documents/material, shall be deemed to be admitted and entitled for a judgment/decree for the amount so prayed. The Defendant though filed appearance but failed to file reply or defence or remained absent inspite of filing of service, the Court may pass judgment/decree as prayed in accordance with law.
(d) Though basic burden lies upon the Plaintiff to prove and satisfy the Court that the claim so raised and prayed for decree falls within the ambit and scope of the summary procedure in question. Once the Court comes to a conclusion that Plaintiff has made out a case for summons for judgment or the Defendant has made out a case for unconditional or conditional leave, after considering the facts and circumstances of the case, need to exercise discretion in either way based upon the settled position of law.
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(e) The Defendant is able to demonstrate through the affidavit in defence and/or averments made in application/affidavit for leave to defend that the Plaintiff has not made out a bonafide and clear case and on the contrary the defence so raised is bonafide reasonable and good defence and raises the plausible /triable issues the Defendant is entitled to unconditional leave to defend.
(f) The summary procedure cannot be understood to mean that the Court must pass Judgment in favour of the Plaintiff merely because reply or an application for leave to defend is not filed. The Court still needs to exercise the Judicial discretion cautiously before passing summary order.
The summary reasoned order/judgment may be fast, may be brief and concise but cannot be without applying mind to the facts and the material and the law.

11 There is no clear agreement/contract between the parties on record to say and/or to accept the case of the Plaintiff that the Defendant individually and/or collectively at any point of time, acknowledged the debt or the liability as referred in bills revolving around the agreement. There was a clear denial reply to the demand notice. The Defendant has even raised counter claim for damages/compensation for the alleged negligences on the part of the Plaintiff.

12 The bills so raised by the Plaintiff, received or not, is also a matter of dispute and therefore, cannot be the foundation to accept the liability or the claims of the respective heads. The raising of bills ::: Downloaded on - 09/06/2013 17:32:39 ::: ssm 9 sj383.10.sxw based upon the agreement in question, unless proved by leading proper evidence, as the Defendant has not admitted or acknowledged the liability, and in fact, apart from the denial, raised the counter claim, cannot be the foundation for such Summary Suit/ Summons for Judgment, at this stage of the proceedings itself. Unless the claim based upon each particular, is proved, by supporting documents and/or the material on record, it is difficult to accept the case of the Plaintiff that such Summary Suit is maintainable and the Defendant is liable to make the restricted amount with an unagreed interest.

13 The agreement as relied is registered, but except signatures of the parties at the bottom on each pages, the handwritten figures are unsigned. The allegations that those figures were handwritten, added subsequently, just cannot be overlooked at this stage. There is a dispute raised about the figure/amount also.

14 It appears from the averments on record that though the agreement was executed in 2004 with the clauses yet, the occupation certificate was not obtained by the Builder/Promoter when the possession was handed over to the Defendant. Some time in the year 2007, the occupation Certificate was granted by the Municipal ::: Downloaded on - 09/06/2013 17:32:39 ::: ssm 10 sj383.10.sxw Corporation. The Defendant was in occupation since 05/08/2004 without proper electricity, water and other amenities upto 2007. The case of the Plaintiff that the possession was handed over to them only for interior work and it was never permitted them to use for commercial purpose is again a matter of trial. The Defendant as alleged, along with others, unauthorizedly used the said Gala/Unit based upon the agreement, without valid occupation certificate. The Plaintiff, therefore, after alleged regularization, in the present Suit, claiming even the share of penalty from the respective Defendant/purchaser. The Plaintiff has also claimed the service, maintenance and the property taxes paid from time to time, along with the interest on the said amount. The unauthorized occupation and any disputed monetary claim arising out of it, cannot be the subject matter of such Summary Suits and the Summons for Judgment.

15 Normally, in a Summary Suit as filed, the Defendant needs to raise proper defence to oppose such Summons for Judgment. There is no defence raised in the present case by filing reply to the Summons for Judgment. Though there is no specific denial/ affidavit filed to ::: Downloaded on - 09/06/2013 17:32:39 ::: ssm 11 sj383.10.sxw the Summons for Judgment, that itself is not sufficient to pass the judgment as prayed in view of above position of law, and the facts.

The Plaintiff has not made out a case for grant of Summons for Judgment based upon the affidavit/documents placed on record itself.

The basic points as referred above, are missing in this case. There was no concluded, express or implied contract and/or promise to pay the amount and even if any, the same is not determinable at this stage.

16

Resultantly, I am not convinced that Plaintiff has made out the case for grant of decree/judgment as prayed. On the contrary, based upon the averments itself, in my view, the Defendant is entitled to contest the matter in all respect. Therefore, an unconditional leave to defend is granted. The Defendant to file written statement within 30 days from the date of receipt of the copy of the Judgment. The Summons for Judgment is disposed of. There shall be no order as to costs.

(ANOOP V. MOHTA, J.) ::: Downloaded on - 09/06/2013 17:32:39 :::