Sh. Uma Shankar Sharma Prop Of Groom Studio vs. M/S High Line Apparels Private Limited

Facts

The appellant, Sh. Uma Shankar Sharma, is appealing a judgment passed by the Commercial Court in a summary suit filed by the respondent, M/s High Line Apparels Private Limited. The respondent sought recovery of ₹6,03,565/- for goods supplied between May 11, 2017, and March 15, 2021, against which the appellant had paid ₹11,44,608/- out of a total of ₹17,62,195/-. The appellant had issued two post-dated cheques for ₹3,53,580/- and ₹2,46,985/-, which were dishonoured. The appellant sought leave to defend, raising defenses including payment, cheques being security, fabricated invoices, and non-production of GST returns. The Commercial Court granted conditional leave to defend, requiring a deposit of ₹6,03,565/-. The appellant challenged this order via a Civil Revision Petition, which was withdrawn. Subsequently, the appellant failed to comply with the deposit condition, leading the Commercial Court to pass a judgment in favour of the respondent.

Held

The Court held that the order dated September 20, 2022, passed by the learned Commercial Court, which granted conditional leave to defend to the appellant upon deposit of ₹6,03,565/-, had attained finality. The appellant's withdrawal of the Civil Revision Petition challenging this order meant it became binding. The Court found no merit in the appellant's submission that non-compliance was due to medical issues, nor in his offer to deposit only 50% of the amount. The Court reiterated that in terms of Order XXXVII, Rule 3, Sub-rule 6(b) of the CPC, failure to provide the specified security entitled the plaintiff to a judgment forthwith. The defenses sought to be raised by the appellant were not available as he had not complied with the condition precedent for their consideration. Consequently, the Court found no fault with the impugned judgment and decree passed by the Commercial Court in favour of the respondent.

Key Issues

1. Whether the appellant is entitled to raise defenses against the summary suit when he failed to comply with the conditional leave to defend order, specifically the deposit of ₹6,03,565/-. 2. Whether the impugned judgment and decree passed by the Commercial Court in favour of the respondent is sustainable in light of the appellant's non-compliance with the deposit order. Contentions of the Appellant: The appellant argued that his non-compliance with the deposit order was due to medical issues faced by him and his brother. He also offered to deposit 50% of the disputed amount and requested permission to defend the suit. The appellant had previously raised defenses such as having paid the entire amount due, the post-dated cheques being for security, fabricated invoices, and the respondent's failure to produce GST returns. Contentions of the Respondent: The respondent's case was based on the outstanding amount due for goods supplied and the dishonour of post-dated cheques. The respondent relied on the Commercial Court's order granting conditional leave to defend and the subsequent judgment passed due to the appellant's failure to comply with the deposit condition.