M.R. Shah, J. - (1.) As both this First Appeal and Special Civil Application are interconnected, both this First Appeal and Special Civil Application are decided and disposed of together by this common judgment and order.
(2.) By way of this petition under Article 226 of the Constitution of India the petitioner herein - original defendant has prayed for an appropriate writ, direction and order to quash and set aside the order dated 20.09.2016 passed below Exh.15 by the learned Commercial Court, Vadodara (hereinafter referred to as "learned Commercial Court") in Commercial Civil Suit No.79/2016 by which the learned Commercial Court has partly allowed the said application and has granted the conditional leave to the petitioner herein - original defendant to defend the Commercial Suit No.79/2016 on deposit of Rs.5 Crores (against a total claim in the suit of Rs.22 Crores approximately). [2.1] As the order passed by the learned Commercial Court below Exh.15 was not complied with and the original defendant failed to deposit the amount as ordered while granting conditional leave i.e. Rs.5 Crores, subsequently on noncompliance of the order passed while granting the conditional leave to defend the suit, thereafter the learned Commercial Court has decreed the suit vide judgment and decree dated 20.12.2016, which is the subject matter of First Appeal No.1438/2017.
(3.) The facts leading to the present First Appeal and Special Civil Application in nutshell are as under: [3.1] That the original plaintiff - Gujarat State Fertilizers and Chemicals Ltd. (hereinafter referred to as "original plaintiff") initially instituted Special Summary Suit No.171/2008 in the Court of learned Civil Judge (Senior Division), Vadodara for recovery of a total sum of Rs.22,47,83,286/- (Rs.12,31,49,933/- by way of principal amount and Rs.10,16,33,353/- towards running interest upto 31.10.2007). That on constitution of the Commercial Court under the provisions of the Commercial Courts Act, 2015, the said suit came to be transferred to the Commercial Court, at Vadodara which was numbered as Commercial Civil Suit No.79/2016. [3.2] That it was the case on behalf of the original plaintiff that original plaintiff Company is engaged in the business of manufacturing and selling of fertilizers and chemicals. That the defendant Company is division of Modipon Limited and engaged in the business of manufacturing of Nylon Filament Yarn. That both the companies are dealing with each other since around 25 years. That the original plaintiff Company used to enter into annual agreement for supply of Caprolactam which is main raw material which is used to produce the Nylon Filament Yarn. That every year the original plaintiff Company used to sell the contracted quantity of Caprolactam as per annual agreement. That the said sale of Caprolactam was made against suitable security of LC and/or post dated cheques. That the selling price was decided by the original plaintiff Company from time to time and communicated to the defendant. That the terms of the payment were decided between the parties from time to time and as per the invoices issued by the original plaintiff from time to time the credit days were shown as 30 days + 30 days, meaning thereby total 60 days' credit was given to the original defendants for making the payment. According to the original plaintiff so stated in the plaint, it was further agreed that if the payment is not made on due date, the penal interest shall be recoverable as per the interest clause. That the defendant was liable to pay the interest as per the rate of interest for respective financial year. That the payment for such debit notes were duly made by the original defendants within 7 days from the issuance of the debit notes. It was also the case on behalf of the original plaintiff and so averred in the plaint that the defendant used to purchase the goods and the original plaintiff used to open and maintain the current account of the defendant and used to credit the amount received from the defendant for the goods supplied. That the last payment was made by the defendant through pay order on 30.04.2017 for a sum of Rs.2 lakh and thereafter the defendant has stopped making any payment to the original plaintiff against the goods supplied / sent earlier and the invoices issued by the original plaintiff from time to time. Therefore, according to the original plaintiff the defendant is liable to pay a sum of Rs.12,31,49,933/- and as per the interest clause defendant is liable to pay total interest of Rs.10,16,33,353/- towards interest upto the period of 31.10.2007. It was further averred in the plaint that against the aforesaid amount due outstanding against the defendant, the defendant issued 90 cheques in discharge of his liabilities but all the 90 cheques were got dishonored and the original plaintiff has instituted criminal complaint under Section 138 of the Negotiable Instruments Act, 1881. It was further averred that on return of the cheques the original plaintiff has issued debit notes dated 21.10.2007 for Rs.75,000/- being the cheque return charges. Thus, according to the original plaintiff the original plaintiff has become entitled to recover from the defendant Company a sum of Rs.22,47,83,286/-. It was further averred that the original plaintiff has not claimed any other relief. Therefore, the suit falls within the ambit of Order XXXVII of the CPC. [3.3] That having been served with the summonses of the suit, the defendant put its appearance. That the original plaintiff submitted the application for issuance of summonses of judgment. The defendant filed the application Exh.15 seeking leave to defend inter alia on the grounds that (1) suit of the original plaintiff is not maintainable under Order XXXVII of the CPC; (2) that the suit has not been properly instituted and the person who signed on behalf of the original plaintiff is not authorized; (3) that the original plaintiff has not narrated the correct facts and circumstances; (4) that the defendant is not liable to pay interest claimed; (5) the principal amount is also disputed and (6) that the 90 cheques were issued by way of security and not in discharge of the liability. Therefore, it was prayed to grant the unconditional leave to defend the suit. [3.4] That by a reasoned order dated 20.09.2016 the learned Commercial Court granted the conditional leave to the defendant to defend the suit subject to deposit of Rs.5 Crores within 2 months from the date of the order. At this stage it is required to be noted that at the relevant time the defendant did not challenge the said order of conditional leave. However, thereafter the defendant moved an application Exh.49 for extension of time. The said application was partly allowed and the defendant was granted further time and permitted to deposit the said amount on or before 20.12.2016. While seeking extension it was submitted on behalf of the defendant that the amount could not be deposited but the original defendants have requested the State of U.P. seeking permission to sell the property but the State of U.P. has not given any reply to the said letter. However, after further time was granted upto 20.12.2016 passed below Exh.49, neither there was any application for extension nor the aforesaid amount of Rs.5 Crores were deposited as per the order passed below Exh.15. That thereafter by judgment and decree dated 20.12.2016 impugned in the First Appeal, the learned Commercial Court has decreed the suit partly and passed a decree against the defendant and in favour of original plaintiff to recover an amount of Rs.22,47,83,286/- alongwith running interest at 10% p.a. from the date of filing of the suit till realization of the amount. [3.5] That feeling aggrieved and dissatisfied with the impugned judgment and decree passed by the learned Commercial Court dated 20.12.2016 in Commercial Civil Suit No.79/2016, the appellant herein - original defendant has preferred the present First Appeal on 23.02.2017. That thereafter i.e. after the judgment and decree passed by the learned Commercial Court, the original defendant has preferred the Special Civil Application No.4764/2017 challenging the order passed by the learned Commercial Court below Exh.15 granting the conditional leave to the defendant to defend the suit on deposit of Rs.5 Crores i.e. granting conditional leave and not granting unconditional leave to defend the suit to the original defendants, the original defendants have preferred Special Civil Application No.4764/2017. At the cost of repetition it is to be noted that that Special Civil Application No.4764/2017 has been preferred by the petitioners after the judgment and decree passed by the learned Commercial Court and at the relevant time i.e. before passing the judgment and decree, the original defendants did not challenge the order below Exh.15 granting conditional leave and not granting unconditional leave to the original defendants to defend the suit. [3.6] Learned Counsel appearing for respective parties have made common submissions in First Appeal as well as Special Civil Application and have addressed the Court on partly allowing Exh.15 and granting conditional leave to the original defendants to defend the suit on condition to deposit Rs.5 Crores and not granting unconditional leave to the original defendants to defend the suit.;