Application For Summary Judgment Under CPC Maintainable Even After Conversion Of Summary Suit To Commercial Suit: Bombay High Court

Justice Sandeep V. Marne held that such conversion would not cause the petitioner to lose both right to seek summary judgment under Order 13-A and pronouncement of judgment under Order 37 Rule 3.

“The provisions of sub-rule 3 of Rule 1 of Order XIII A cannot be interpreted to mean that Plaintiff in a summary suit which is converted into commercial suit would loose both rights of pronouncement of judgment under Order XXXVII Rule 3 of the Code as well as seeking summary judgment under Order XIII A of the Code”, the court held.

Order 13-A Rule 1(3) CPC provides that application for summary judgment cannot be made in a commercial dispute originally filed as a summary suit under Order 37.

The court observed that the purpose of Order 13-A Rule 1(3) is "to prevent Plaintiff who once attempts pronouncement of judgment under Order XXXVII Rule 3 of the Code and upon conversion of his summary suit into commercial one, seeks to have another bite at the cherry by seeking pronouncement of judgment under Order XIII-A of the Code." 

The court was dealing with writ petition against Civil Court’s refusal to grant summary judgment in a commercial suit.

The petitioners are the plaintiffs in the suit for recovery of money with interest against the respondent/defendant. The petitioner-firm claimed that in 2015, it gave the respondent a loan of Rs. 50 lakhs. Respondent executed a bill of exchange in favour of the petitioners. He also issued two post-dated cheques for principal amount as well as the interest of Rs. 2,33,333/- respectively. Later the same year, he executed another bill of exchange for Rs. 50 lakhs. The cheques were dishonoured due to “insufficient funds”.

The petitioners issued a notice demanding the dues with interest. The respondent objected and claimed that the petitioners did not possess licence under the Maharashtra Money Lending (Regulations) Act, 2014.

The petitioners presented a summary suit under Order 37 of the CPC before the Civil Court. However, it was registered as a Commercial Suit. The Civil Court rejected the application for summary judgment holding that there are triable issues in the suit hence the present petition.

Advocate Darshit Jain for the petitioners submitted that non-possession of money lenders licence is not a requirement for suit based on bills of exchange. Since the petitioners’ claim is admitted by the respondent, civil court should have pronounced judgement or at least passed a conditional order, he said.

Advocate Anoshak Davar for the respondent submitted that the suit was barred by limitation. Reliance on petitioners’ own books of accounts cannot be construed as an admission by the respondent who never confirmed it. Further, he objected to the maintainability of the application for summary judgment and said that since the suit was initially filed as a summary suit, Order 13-A of the CPC will not apply.

The court noted that though the suit was presented as a summary suit, it was originally registered as a commercial suit by the civil court on its own.

Order 13-A Rule 1(3), cannot be interpreted to entail the loss of both rights as that would put plaintiff in a disadvantageous position, the court said.

Thus, the court held that petitioners application for summary judgment before the Civil Court is maintainable.

As per Order 13-A Rule 3(a), if there is no reasonable prospect of the defendant’s success, Civil Court may allow the claim by pronouncing a summary judgment without recording oral evidence.

The respondent conceded that since the suit is based on bills of exchange, it would not be hit by section 13(1) of the Money Lending Act which provides for dismissal of a suit by a money-lender without licence.

The court noted most of the relevant events took place in 2015. The cheques were also dishonoured in 2015. After a gap of 4 years the repayment claim was a raised by the petitioners in 2019. Therefore, a triable issue exists on the point of limitation, the court held.

Hence, no case is made out for summary judgment and the present case would not be covered by Order 13A Rule 3(a), the court held.

The court noted the Civil Court is required to conclude that there is a possibility of the claim succeeding in order to pass conditional order under Order 13-A Rule 7.

“The defence of defendant inter alia on the point of limitation is substantial one considering the fact that plaintiffs demanded the amount by depositing cheques in November 2015. Plaintiffs contend that the defendant requested for deferring the demand, which is required to be proved by adducing evidence as the alleged request is not in the form of a written communication. Thus, it is not possible to record a finding at this juncture that there is certain possibility of success of claim of plaintiffs”, the court held.

Therefore, no case is made out for passing a conditional order, the court concluded and dismissed the petition.

Case no. – Writ Petition No. 10573 of 2022

Case Title – M/s. Ashok Commercial Enterprises and Anr. v. Rajesh Jugraj Madhani

Citation: 2023 LiveLaw (Bom) 89