Thursday, March 13, 2025
Latest:
delhihighcourt

ATANU BHATTACHARJEE & ANR vs CORPORATION BANK

Information

* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of order: 4th April, 2024
+ RFA 4/2020 & CM APPL. 129/2020
ATANU BHATTACHARJEE & ANR ….. Appellants
Through: Mr. Mayank Sapra and Ms. Lalima Das, Advocates

versus

CORPORATION BANK ….. Respondent
Through: Mr.Sanjeev Sharma and Mr.Arup Srivastava, Advocates
CORAM:
HON’BLE MR. JUSTICE CHANDRA DHARI SINGH

ORDER

CHANDRA DHARI SINGH, J (Oral)

1. The instant regular first appeal under Section 13 (1-A) of the Commercial Courts Act, 2015 (hereinafter “the Act”) read with Order XLIII Rule 1-A read with Section 96 of the Code of Civil Procedure, 1908 (hereinafter “CPC”) has been filed on behalf of the appellant seeking the following reliefs:
“i) Allow the present appeal and set aside the judgment cum decree dated 14.10.2019 passed by the Ld. Trial Court in CS (Comm) 292/2019.
ii) Pass any such other order/s or direction/s as this Hon’ble Court may deem fit and proper in the facts and circumstances of the case”

2. The facts leading to filing of the instant appeal are as follows:
a. The appellant no. 1 (defendant no. 1 before the learned Trial Court) is the borrower and appellant no. 2 (defendant no. 2 before the learned Trial Court) is the co-borrower.
b. The respondent (plaintiff before the learned Trial Court) is a bank with whom the appellants entered into an Agreement dated 28th February, 2004 for a term loan of Rs.10,00,000/-. The said term loan was availed by the appellant for the purpose of purchasing a flat from M/s Supertech Constructions Pvt. Ltd.
c. Since, the appellants failed to repay the loan, the respondent filed a suit for recovery of money against the appellants vide Civil Suit bearing no. CS (Comm) 292/2019 before the ADJ-03 (East), Karkardooma Courts, Delhi. In the said suit, the appellants preferred an application under Order VII Rule 11 of the CPC, thereby, seeking rejection of the respondent’s plaint on the ground of pecuniary jurisdiction.
d. In the afore said civil suit, the learned Trial Court passed a judgment dated 14th October, 2019 vide which it dismissed the above stated application, closed the appellants’ right to file written statement and upon oral submission of the respondent, it decreed the suit by way of passing a summary judgment.
e. Being aggrieved by the impugned judgment dated 14th October, 2019, the appellant has preferred the instant appeal.
3. Learned counsel appearing on behalf of the appellant submitted that the Act does not envisage an oral application for a summary judgment, rather, the power under Order XIII-A, Rule 3 of the CPC can only be exercised upon a written application.
4. It is submitted that Order XIII-A Rule 4(1) of the CPC mandates that an application for a summary judgment to a Court shall be in accordance with the Sub-clauses (a) to (f) mentioned therein.
5. It is further submitted that Order XIII-A, Rule 4 (2) of the CPC, mandates that where a hearing for summary judgment is fixed, the defendant must be given at least thirty days’ notice regarding the date fixed for hearing of summary judgment and the claim that is proposed to be decided by the Courts at such hearing. Furthermore, the said provision enables the defendant to file a reply within the stipulated time period addressing the requirements set forth in Sub-clauses (a) to (f) of Order XIII-A Rule 4(1) of the CPC.
6. It is submitted that the learned Trial Court has not followed the mandatory procedure prescribed under the Act and thereby, has acted beyond the jurisdiction rendering the impugned judgment patently illegal and hence, liable to be set aside.
7. It is submitted that by passing the impugned judgment, the learned Trial Court in the instant case has altogether dispensed with the necessity of proof by the respondent and there is no prima facie proof of the relevant facts to constitute the cause of action.
8. It is submitted that the appellants were not provided with the thirty days’ notice period as mandated under Order XIII-A Rule 4(2) of the CPC. As a result, the appellants were never afforded the opportunity to file their reply to the application of the respondent/plaintiff. The aforesaid inaction on the part of the learned Trial Court is against the mandate of provisions of Order XIII-A of the CPC. Accordingly, the impugned judgment passed by the learned Trial Court deserves to be set aside.
9. It is submitted that the in light of the above submissions, it is evident that the learned Court below erred in appreciating the settled law and hence, there is illegality in the impugned judgment making it liable to be set aside.
10. Therefore, in view of the foregoing submissions, it is submitted that the instant appeal may be allowed and the reliefs may be granted as prayed for.
11. Per Contra, the learned counsel appearing on behalf of the respondent vehemently opposed the instant appeal submitting to the effect that the same being devoid of any merit is liable to be dismissed.
12. It is submitted that the learned Trial Court has taken into consideration the entire facts and circumstances as well as the relevant position of law and only after due consideration; it dismissed the appellants’ application under Order VII Rule 11 of the CPC, closed their right to file written statement and passed a summary judgment.
13. It is submitted that the present appeal is liable to be dismissed on the grounds that the appellants have failed to bring up any substantial question of law which needs to be addressed or any wrongful exercise of any provision of law by the learned Court below.
14. It is submitted that the appellants’ contentions are baseless due to the reason that the learned Court below has exercised its jurisdiction in accordance with the settled legal propositions and there is no infirmity in the impugned judgment passed by it.
15. Therefore, in view of the submissions made above, it is submitted that instant appeal being devoid of any merit may be dismissed.
16. Heard the learned counsel appearing on behalf of the parties and perused the record.
17. It is the case of the appellants that the learned Trial Court has not followed the mandate of Order XIII-A of the CPC while passing the summary judgment against the appellants and in favour of the respondent. The appellants submit that as per the principle enshrined in the above said provision, the learned Trial Court ought to have followed the statutory mandate of granting 30 days’ notice to the appellants/defendants before passing a summary judgment and that the learned Trial Court erred in passing the impugned summary judgment on the basis of an oral application which is impermissible as the said provision prescribes a written application to seek a summary judgment. Hence, the instant appeal may be allowed and reliefs as prayed for be granted.
18. In rival submissions, the learned counsel appearing on behalf of the respondent refuted the appellants’ contentions submitting to the effect that that there is no illegality in the impugned judgment as the same had been passed after taking into consideration the entire facts and circumstances as well as the relevant statutory provisions. Hence, the instant appeal may be dismissed.
19. After perusing the pleadings, the question that falls for consideration of this Court is whether the impugned judgment has been passed without following the statutory requirements under Order XIII-A of the CPC.
20. Now this Court will peruse the impugned judgment, relevant extracts of the same is reproduced herein below:
“…4. This is a suit under Commercial Courts Act, 2015. Both the defendants, through their counsel Sh. Amir Hussain, had appeared before this Court on 23.04.2019 and on which date Advocate Amir Husain had stated that he had received the entire set of the plaint and the annexures. He was also informed that the present suit, filed on 23.01.2019, involves a Commercial dispute within the meaning of Commercial Courts Act, 2015. However, till date despite lapse of more than 120 days the defendants have not filed their written statement. Under the Commercial Courts Act, 2015 a defendant is required to file written statement within 120 days of service of summons, failing which he forfeits his right to file the same. The right of the defendants to file their written statement hereby stands closed.

5. Plaintiffs counsel at this stage orally applies for a summary judgment. Plaintiffs case is that defendant no. 1 being the borrower and defendant no. 2 being co-borrower had availed of a house loan in February, 2004 to purchase a flat bearing no. 610, Supertech Residency, 6A, Sector – 5, Vaishali, Ghaziabad, UP. Home loan of Rs. 10 lacs for 20 years by way of equitable mortgage of the aforesaid flat was granted. Defendants did not adhere to the financial discipline. As per the statement of account dt. 19.11.2018 a sum of Rs. 10,19,302/- is due upon the defendants. Plaintiff bank in support of its case relies on the Housing Loan Application Form, Agreement for Term Loan, Memorandum of Deposit of Title Deed, Acknowledgment of Debt/Liabilities etc. duly signed by both the defendants.

6. In this case defendants’ right to file written statement having been forfeited, there is no defence to the claim of the plaintiff bank.

7. In this case, the defendants have no real prospect of successfully defending the claim of the plaintiff bank. Further, there is no other compelling reason as to why the claim of the plaintiff bank should not be disposed of before recording of oral evidence. In terms of Order XIII-A Rule 3 (a) as applicable to the Commercial Courts Act, 2015 the present suit is liable to be decreed in favour of the plaintiff and against the defendants. Further, in terms of Order VIII Rule 10, CPC too the present suit is liable to be decreed in plaintiffs favour and against the defendants. Accordingly, the present suit stands decreed in the sum of Rs. 10,19,302/- in plaintiffs favour and against the defendants. On this amount of Rs. 10,19,302/-, the plaintiff is awarded pendente lite and future interest of 15% per annum. Cost of the suit is also awarded to the plaintiff. Both the defendants are jointly and severally liable to pay the decreetal amount. Decree sheet be drawn up. File be consigned to record room…”

21. The impugned judgment states that a suit for recovery was filed against the appellants by the respondent Bank, wherein, the appellants filed an application under Order VII Rule 11 of the CPC, seeking rejection of the plaint on the ground that since the amount sought to be recovered is more than Rupees Ten Lakhs, therefore, the jurisdiction to recover the said amount lies with the Debt Recovery Tribunal and not the learned Trial Court. The learned Trial Court dismissed the above stated application on the ground that the pecuniary jurisdiction of the Debt Recovery Tribunal to entertain disputes pertaining to recovery of money has been enhanced to Rupees Twenty Lakhs, therefore, it has the jurisdiction to try the suit.
22. It is pertinent to mention herein that the appellants have neither made any submission towards the dismissal of the application filed under Order VII Rule 11 of the CPC, nor any contention has been advanced with respect to closure of right to file the written statement. Therefore, the said part of the impugned judgment is deemed to be not challenged by the appellants and in view of the same, the issue in the present appeal shall be limited to adjudicating upon the alleged illegality in passing the summary judgment.
23. Perusal of the impugned judgment also states that the learned Trial Court noted that there is no defence to the claim of the respondent bank and upon oral submission of the respondent bank/plaintiff for summary judgment; the learned Court below held that the appellants had no real prospect of successfully defending the claim. It further observed that there is no compelling reason as to why the claim of the respondent bank should not be disposed of before recording any oral evidence. Taking the said observations into its consideration, the learned Court below decreed the suit in favor of the respondent bank in terms of Order XIII–A Rule 3 (a) of the CPC as well as in terms of Order VIII Rule 10 of the CPC.
24. A bare reading of the impugned judgment states that the same was passed in terms of Order XIII–A Rule 3 (a) of the CPC as well as in terms of Order VIII Rule 10 of the CPC. Therefore, the illegality alleged by the appellants has to be adjudicated in terms of reasoning given qua both the provisions. Hence, the following issues are framed:
1. Whether the learned Trial Court has passed the impugned judgment in accordance with Order XIII-A of the CPC?

2. Whether the learned Trial Court has passed the impugned judgment in accordance with Order VIII Rule 10 of the CPC?

Issue no. 1 – Whether the learned Trial Court has passed the impugned judgment in accordance with Order XIII-A of the CPC?
25. Before delving into the facts of the matter at hand, this Court deems it imperative to discuss Order XIII-A of the CPC which prescribes the provision to seek summary judgment in a commercial suit. Summary judgment is a concept followed in civil matters where the Courts are conferred with the power to pass a judgment by conducting a trial in a summary manner where the regular process of a trial such as recording evidence etc is not held. Relevant extracts of the above said provision is as follows:
“..*[ORDER XIII-A
Summary Judgment
1. Scope of and classes of suits to which this Order applies. —(1) This Order sets out the procedure by which Courts may decide a claim pertaining to any Commercial Dispute without recording oral evidence.
(2) For the purposes of this Order, the word “claim” shall include—
(a) part of a claim;
(b) any particular question on which the claim (whether in whole or in part) depends; or
(c) a counterclaim, as the case may be.
(3) Notwithstanding anything to the contrary, an application for summary judgment under this Order shall not be made in a suit in respect of any Commercial Dispute that is originally filed as a summary suit under Order XXXVII.
2. Stage for application for summary judgment.—An applicant may apply for summary judgment at any time after summons has been served on the defendant:
Provided that, no application for summary judgment may be made by such applicant after the Court has framed the issues in respect of the suit.
3. Grounds for summary judgment.—The Court may give a summary judgment against a plaintiff or defendant on a claim if it considers that––
(a) the plaintiff has no real prospect of succeeding on the claim or the defendant has no real prospect of successfully defending the claim, as the case may be; and
(b) there is no other compelling reason why the claim should not be disposed of before recording of oral evidence.
4. Procedure.—(1) An application for summary judgment to a Court shall, in addition to any other matters the applicant may deem relevant, include the matters set forth in sub-clauses (a) to (f) mentioned hereunder:—
(a) the application must contain a statement that it is an application for summary judgment made under this Order;
(b) the application must precisely disclose all material facts and identify the point of law, if any;
(c) in the event the applicant seeks to rely upon any documentary evidence, the applicant must,––
(i) include such documentary evidence in its application, and
(ii) identify the relevant content of such documentary evidence on which the applicant relies;
(d) the application must state the reason why there are no real prospects of succeeding on the claim or defending the claim, as the case may be;
(e) the application must state what relief the applicant is seeking and briefly state the grounds for seeking such relief.
(2) Where a hearing for summary judgment is fixed, the respondent must be given at least thirty days’ notice of:—
(a) the date fixed for the hearing; and
(b) the claim that is proposed to be decided by the Court at such hearing.
(3) The respondent may, within thirty days of the receipt of notice of application of summary judgment or notice of hearing (whichever is earlier), file a reply addressing the matters set forth in clauses (a) to (f) mentioned hereunder in addition to any other matters that the respondent may deem relevant:—
(a) the reply must precisely––
(i) disclose all material facts;
(ii) identify the point of law, if any; and
(iii) state the reasons why the relief sought by the applicant should not be granted;
(b) in the event the respondent seeks to rely upon any documentary evidence in its reply, the respondent must—
(i) include such documentary evidence in its reply; and
(ii) identify the relevant content of such documentary evidence on which the respondent relies;
(c) the reply must state the reason why there are real prospects of succeeding on the claim or defending the claim, as the case may be;
(d) the reply must concisely state the issues that should be framed for trial;
(e) the reply must identify what further evidence shall be brought on record at trial that could not be brought on record at the stage of summary judgment; and
(f) the reply must state why, in light of the evidence or material on record if any, the Court should not proceed to summary judgment……”

26. Provisions relating to summary judgment are contained in Order XIII-A of the CPC and the same was introduced by the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015. Order XIII-A of the CPC sets out the procedure by which Courts can decide a claim arising in a ‘Commercial Dispute’, without recording oral evidence. Therefore, the said Order is only applicable for disputes covered under the Act. In other words, a suit has to be a commercial dispute for the Summary Judgment provisions under Order XIII-A to apply.
27. It is apparent from a plain reading of Order XIII-A of the CPC that a Court can pass an order or a judgment on claims at the threshold stage, before framing the issues. In terms of Rule 2 of the said Order, an applicant is entitled to apply for summary judgment at any time after the summons has been served on the defendant.
28. Under Order XIII-A Rule 3 of the CPC, the Courts are empowered to pass a summary judgment either in favour of the plaintiff or the defendant on the ground, inter alia, that the plaintiff or defendant has no real prospect of succeeding on the claim or in successfully defending the claim respectively. It is subject to there being no other compelling reasons as to why the claim should not be disposed of before recording of oral evidence. Further, the said provision makes it clear that (a) a summary judgment can only be decreed upon an application being made by a party, (b) such an application can only be filed after service of summons, and; (c) such an application must be filed before the issues are framed by the Court.
29. Therefore, in order to allow an application for summary judgment, the Court must consider whether the plaintiff has a realistic claim as opposed to a fanciful prospect of success and the realistic claim is of such a nature which carries some degree of conviction to it.
30. Rule 4 of Order XIII-A of the CPC prescribes the procedure to be followed while adjudicating upon an application for summary judgment. Sub-rule (1) of Rule 4 explicitly provides for ‘matters’ which are required to be included in an application for summary judgment. It is stated therein that firstly the application must state that it is for summary judgment under Order XIII-A of the CPC. Secondly, it must also disclose all material facts and identify the point of law, if any. Thirdly, the person making the application may rely on any documentary evidence, which is required to be included in the application and the relevant contents of it are also required to be identified. Lastly, the reasons that there is no real prospect of succeeding in the suit must be stated in the application along with the relief being sought. It is further stated that the respondent has thirty days to file a response to the said application for the summary judgment and the notice of hearing.
31. In Bright Enterprises Private Ltd. v. MJ Bizcraft LLP, 2017 SCC OnLine Del 6394, it was submitted before the Division Bench of this Court that the power of the Courts under Order XIII-A, Rule 3 of the CPC, cannot be curtailed or whittled down by subjecting it to the fulfillment of the condition of filing an application for summary judgment. The said submission was rejected by the Division Bench and it was held that a summary judgment is not permissible without there being an appropriate application for summary judgment. It was further held that the above said provision empowers the Court to give a summary judgment against a plaintiff or defendant on a claim in the event it is noted that the plaintiff has no prospect of succeeding in a claim or that the defendant has no case for his defence and there are compelling reasons before the Court to not dispose of the claim before recording oral evidence. The relevant paragraphs of the said judgment are as follows:
“..13. It was contended by the learned counsel for the said respondent that where the legislature intended to prohibit or put a restriction or limitation on issuance of summary judgment, it had done so by specifically prohibiting it such as in Rule 2 of Order XIIIA, where it is provided that no application for summary judgment may be made by such applicant after the Court has framed issues in the suit. It was submitted that in contradistinction to Rule 2, the legislature, in its wisdom, did not think it proper to out any limitation on the ability of the Court to issue a summary judgment in the eventualities contemplated in Rule 3 of Order XIIIA. It was, therefore, contended that the power of a court under Rule 3 could not be given a restrictive meaning as that would frustrate the very object of the provision. It was, therefore, contended that keeping in mind the Statement of Objects of enacting the Commercial Courts Act and of effecting consequential amendments to the CPC, in order to expeditiously dispose commercial matters and also having regard to the fact that there was no requirement of recording oral evidence in order to pass a judgment in proceedings where there was no real prospect of success, it was open to Court to pass a summary judgment without notice to the defendants.

14. It was also contended by the learned counsel for the said respondent that Order V Rule 1 which deals with the issuance of summons also uses the word ‘may’ as opposed to ‘shall’. This, according to the learned counsel, meant that it was not incumbent upon the Court to issue summons in every suit which has been duly instituted. It was, therefore, contended that having regard to the provisions of Order V Rule 1 read with Order XIIIA Rule 3 CPC, the Court had the power and jurisdiction in a commercial matter to dismiss a suit on merits without issuance of notice to the defendant in case the Court was of the opinion that the plaintiff had no real prospect of succeeding in the claim and that there was no other compelling reason as to why the claim should not be disposed of before recording oral evidence. It was contended that the general power of the Court under Order XIIIA Rule 3 could not be curtailed or whittled down by making it subject to the fulfilment of the condition of filing an application. It was, therefore, contended that no interference with the impugned judgment was called for and the appeal be dismissed.
***
***
21. Apart from this, we are of the view that the learned Single Judge has gone wrong in invoking the provisions of Order XIIIA CPC for rendering a summary judgment. It is true that Rule 3 of Order XIIIA CPC empowers the Court to give a summary judgment against a plaintiff or defendant on a claim if it considers that – (a) the plaintiff has no real prospect of succeeding on the claim or the defendant has no real prospect of successfully defending the claim, as the case may be; and (b) there is no other compelling reason why the claim should not be disposed of before recording of oral evidence. But, in our view, this power can only be exercised upon an application at any date only after summons have been served on the defendant and not after the Court has framed issues in the suit. In other words, Order XIIIA Rule 2 makes a clear stipulation with regard to the stage for application for summary judgment. The window for summary judgment is after the service of summons on the defendant and prior to the Court framing issues in the suit.

22. The provisions relating to summary judgment which enables courts to decide claims pertaining to commercial disputes without recording oral evidence are exceptional in nature and out of the ordinary course which a normal suit has to follow. In such an eventuality, it is essential that the stipulations are followed scrupulously otherwise it may result in gross injustice. As pointed out above, a specific period of time has been provided during which an application for summary judgment can be made. That period begins upon the service of summons on the defendant and ends upon the court framing issues in the suit. Even if we were to accept, which we do not, the argument of the respondents that the Court had suo moto powers to deliver summary judgment without there being any application, those powers also would have to be exercised during this window, that is, after service of summons on the defendant and prior to framing of issues. In addition to this, we also reiterate that, in our view, a summary judgment under Order XIIIA CPC is not permissible without there being an appropriate application for summary judgment. The contents of an application for summary judgment are also stipulated in Rule 4 of Order XIIIA. The application is required to precisely disclose all material facts and identify the point of law, if any. In the event, the applicant seeks to rely on any documentary evidence, the applicant must include such documentary evidence in its application and identify the relevant content of such documentary evidence on which the applicant relies. The application must also state the reason why there are no real prospects of succeeding or defending the claim, as the case may be.

23. Rule 4(2) of Order XIIIA also requires that where a hearing for summary judgment is fixed, the respondent must be given at least thirty days’ notice of the date fixed for the hearing and the claim that is proposed to be decided by the Court at such hearing. Rule 4(3) of Order XIIIA makes provision which enables the respondents to file a reply within the stipulated time addressing the matters set forth in clauses (a) to (f) of the said sub-rule. In particular, the reply of the respondent ought to precisely disclose all the material facts and identify the point of law, if any, and the reasons why the relief sought by the applicant for summary judgment should not be granted. Just as in the case of the applicant, the respondent is also given the opportunity to rely upon documentary evidence in its reply which must be included in the reply and the relevant content identified. The respondent’s reply is also required to give reason as to why there are real prospects of succeeding on the claim or defending the claim, as the case may be. Importantly, the reply must also concisely state the issues that should be framed for trial and that it must identify what further evidence would be brought on record at trial that could not be brought on record at the stage of summary judgment. The reply should also state as to why in the light of the evidence or material on record, if any, the Court should not proceed to summary judgment.

24. From the provisions laid out in Order XIIIA, it is evident that the proceedings before Court are adversarial in nature and not inquisitorial. It follows, therefore, that summary judgment under Order XIIIA cannot be rendered in the absence of an adversary and merely upon the inquisition by the Court. The Court is never an adversary in a dispute between parties. Unfortunately, the learned Single Judge has not considered the provisions of Order XIIIA CPC in this light.

25. In view of the discussion above, since no summons had been issued and obviously no application had been filed by the respondents for a summary judgment, the learned Single Judge could not have dismissed the suit invoking the provisions of Order XIIIA CPC.
***
29. For all these reasons, the impugned judgment cannot be sustained at all. The same is set aside. The suit is restored and the same shall be proceeded with by the learned Single Judge in accordance with law. The appeal is allowed. There shall be no order as to costs…”

32. In light of the facts of the matter at hand, the plaintiff, i.e., the respondent bank herein orally sought for a summary judgment before the learned Trial Court. By submitting that the borrowers/appellants had availed a term loan which they have failed to repay and had produced evidence in support of its submissions, such as housing loan application form, agreement for term loan, memorandum of deposit of title deed, acknowledgment of debt/liabilities etc. which were duly signed by both the defendants along with the statement of account of the appellants’ loan account.
33. This Court is of the view that that as per contents of the provision, when read as a whole, it is inferred that if an application for a summary judgment is made in accordance with Sub-rule (1) of Rule 4 of Order XIII-A of the CPC at the stage as mentioned in Rule 2 of Order XIII-A of the CPC, the Court is required to fix a date for hearing the said application.
34. The said date shall be after a period of thirty days since Sub-rule (2) of Rule 4 of Order XIII-A of the CPC mandates that the respondent shall be given a prior notice of thirty days’ before the date fixed for hearing of the application for summary judgment. The Court shall also give the notice of the claim that is proposed to be decided by the Court at such hearing to the respondent.
35. Although, the procedure of summary judgment is with the intent to expedite a claim made under the civil law, however, this Court must set it out in clear words that in no circumstance, the said provision envisages violation of the principles of natural justice. The intent of the legislature is that whatsoever may be the circumstance, the principles of natural justice cannot be ignored under the garb of a ‘summary procedure’.
36. The inference which can be drawn from the above stated observation of this Court is that the procedure, as prescribed under Order XIII-A of the CPC is mandatory and is required to be followed if a summary judgment under Order XIII-A is to be rendered.
37. In the present matter, it is not disputed that no application was filed by the respondent bank/plaintiff under Order XIII-A. The learned Trial Court, in the impugned judgment, merely states that ‘Plaintiffs counsel at this stage orally applies for a summary judgment’. The same, in the eyes of this Court, is not a proper process of making an application as per the provision as by doing so, the learned Trial Court has refused to acknowledge the established procedure.
38. Rule 4 of Order XIII-A of the CPC prescribes for a procedure which is needed to be followed in a summary procedure. It can be deduced from the said rule that it imposes a duty upon a party applying for summary judgment to state their case by disclosing material facts and the reasons behind seeking such summary judgment.
39. Admittedly, the said rule has been violated and not followed here. In this regard, this Court is of the view that although the learned Trial Court has drawn sustenance from Order XIII-A of the CPC for adjudicating the respondent bank’s dispute but the procedure as set out in the said provision has been completely disregarded. Firstly, no application was filed by the respondent bank; instead there was merely an oral submission seeking summary judgment. Secondly, even if the above is overlooked, nowhere can it be inferred that the learned Trial Court afforded the appellants notice period of thirty days’.
40. The party seeking summary judgment under the above said provision has to first file an application before the concerned Court and only after such an application is filed as per Rules and 30 days’ notice period has been given to the other party, the Court can proceed further.
41. In the instant case there was no application filed before the learned Court setting out the reasons for which the respondent bank’s claim was liable to be decreed. In absence of any such application, the recourse to a summary judgment under Order XIII-A of the CPC was illegal since the appellants had no opportunity to respond to the contentions raised by the respondent.
42. In light of the foregoing, this Court is of the view that the decision of the learned Trial Court that the respondent bank’s suit was liable to be decreed in terms of Order XIII-A of the CPC is erroneous and only to the said extent, the same is set aside being contrary to the statutory provisions as well as the settled law.
43. Accordingly, issue no. 1 is decided in favour of the appellants.
Issue no. 2 – Whether the learned Trial Court has passed the impugned judgment in accordance with Order VIII Rule 10 of the CPC?
44. Before delving into the merits of the instant issue, this Court deems it imperative to set out set out principle behind Order VIII Rule 10 of the CPC. The relevant extracts of the said provision is as under:
“…ORDER VIII
[Written statement, set-off and counter-claim]

[1. Written Statement.—The Defendant shall, within thirty days from the date of service of summons on him, present a written statement of his defence:

Provided that where the defendant fails to file the written statement within the said period of thirty days, he shall be allowed to file the same on such other day, as may be specified by the Court, for reasons to be recorded in writing, but which shall not be later than ninety days from the date of service of summons.]

*[Provided that where the defendant fails to file the written statement within the said period of thirty days, he shall be allowed to file the written statement on such other day, as may be specified by the Court, for reasons to be recorded in writing and on payment of such costs as the Court deems fit, but which shall not be later than one hundred twenty days from the date of service of summons and on expiry of one hundred twenty days from the date of service of summons, the defendant shall forfeit the right to file the written statement and the Court shall not allow the written statement to be taken on record.]
***
***

10. Procedure when party fails to present written statement called for by Court.—Where any party from whom a written statement is required under rule 1 or rule 9 fails to present the same within the time permitted or fixed by the Court, as the case may be, the Court shall pronounce judgment against him, or make such order in relation to the suit as it thinks fit and on the pronouncement of such judgment a decree shall be drawn up:]

*[Provided further that no Court shall make an order to extend the time provided under Rule 1 of this Order for filing of the written statement.]…”

45. Rule 1 of Order VIII of the CPC state that a written statement has to be filed within thirty days from the date of service of summons on the defendant. Proviso to Rule 1 also states that where the defendant has failed to file written statement within thirty days, he shall be allowed to file the same, with reasons recorded, not later than ninety days. The other proviso to the said rule further state that if the written statement is not filed even after lapse of ninety days, the defendant may be allowed to file the same, with reasons recorded and payment of costs, but not later than one hundred and twenty days. Moreover, in the event no written statement is filed beyond the period of one hundred and twenty days, the defendant shall forfeit the right to file the same and the Court shall not allow the written statement to be taken on record, if filed thereafter.
46. Order VIII Rule 10 of the CPC empowers a civil Court to pass a judgment/order in the event the defendant fails to file his written statement in accordance with Rule 1 of Order VIII. The time period prescribed for filing the written statement in Rule 1 shall not be extended by the court. 
47. This Court is of the view that the above said provision has been enshrined with the intent to conclude the civil proceedings as the same cannot linger on and it is also in the interest of justice to the other party.
48. With regard to the scope of powers of a Court to render a judgment in the event the defendant fails to file a written statement within the prescribed time, the Hon’ble Supreme Court in C.N. Ramappa Gowda v. C.C. Chandregowda, (2012) 5 SCC 265 held as under:
“…25. We find sufficient assistance from the apt observations of this Court extracted hereinabove which has held that the effect of non-filing of the written statement and proceeding to try the suit is clearly to expedite the disposal of the suit and is not penal in nature wherein the defendant has to be penalised for non-filing of the written statement by trying the suit in a mechanical manner by passing a decree. We wish to reiterate that in a case where written statement has not been filed, the court should be a little more cautious in proceeding under Order 8 Rule 10 CPC and before passing a judgment, it must ensure that even if the facts set out in the plaint are treated to have been admitted, a judgment and decree could not possibly be passed without requiring him to prove the facts pleaded in the plaint.
26. It is only when the court for recorded reasons is fully satisfied that there is no fact which needs to be proved at the instance of the plaintiff in view of the deemed admission by the defendant, the court can conveniently pass a judgment and decree against the defendant who has not filed the written statement. But, if the plaint itself indicates that there are disputed questions of fact involved in the case arising from the plaint itself giving rise to two versions, it would not be safe for the court to record an ex parte judgment without directing the plaintiff to prove the facts so as to settle the factual controversy. In that event, the ex parte judgment although may appear to have decided the suit expeditiously, it ultimately gives rise to several layers of appeal after appeal which ultimately compounds the delay in finally disposing of the suit giving rise to multiplicity of proceedings which hardly promotes the cause of speedy trial.
27. However, if the court is clearly of the view that the plaintiff’s case even without any evidence is prima facie unimpeachable and the defendant’s approach is clearly a dilatory tactic to delay the passing of a decree, it would be justified in appropriate cases to pass even an uncontested decree. What would be the nature of such a case ultimately will have to be left to the wisdom and just exercise of discretion by the trial court who is seized of the trial of the suit…”

49. The principle similar to the one laid down in the above judgment has also been reiterated by the Hon’ble Supreme Court in Asma Lateef v. Shabbir Ahmad, 2024 SCC OnLine SC 42, wherein, the following was observed:
“..13. Prior to answering the above question, we consider it appropriate to examine the scope and extent of power exercisable under Rule 10 of Order VIII, CPC.

14. Rule 10 of Order VIII, CPC, used as the primary source of power by the Trial Court in passing the order dated 5th August, 1991 against Samiullah, postulates the procedure that could be adopted when a party fails to present its written statement upon the same being called for by the court. Rule 10 reads as follows:

“10. Procedure when party fails to present written statement called for by Court.—
Where any party from whom a written statement is required under rule 1 or rule 9 fails to present the same within the time permitted or fixed by the Court, as the case may be, the Court shall pronounce judgment against him, or make such order in relation to the suit as it thinks fit and on the pronouncement of such judgment a decree shall be drawn up.”

15. We have no hesitation to hold that Rule 10 is permissive in nature, enabling the trial court to exercise, in a given case, either of the two alternatives open to it. Notwithstanding the alternative of proceeding to pronounce a judgment, the court still has an option not to pronounce judgment and to make such order in relation to the suit it considers fit. The verb ‘shall’ in Rule 10 [although substituted for the verb ‘may’ by the Amendment Act of 1976] does not elevate the first alternative to the status of a mandatory provision, so much so that in every case where a party from whom a written statement is invited fails to file it, the court must pronounce the judgment against him. If that were the purport, the second alternative to which ‘shall’ equally applies would be rendered otiose.

16. At this stage, we consider it apposite to take a quick look at Balraj Taneja (supra) to examine the scope of Rule 10 of Order VIII. Therein, this Court ruled that a court is not supposed to pass a mechanical judgment invoking Rule 10 of Order VIII, CPC merely on the basis of the plaint, upon the failure of a defendant to file a written statement. The relevant paragraphs of the judgment are reproduced below for convenience:

“29. As pointed out earlier, the court has not to act blindly upon the admission of a fact made by the defendant in his written statement nor should the court proceed to pass judgment blindly merely because a written statement has not been filed by the defendant traversing the facts set out by the plaintiff in the plaint filed in the court. In a case, specially where a written statement has not been filed by the defendant, the court should be a little cautious in proceeding under Order 8 Rule 10 CPC. Before passing the judgment against the defendant it must see to it that even if the facts set out in the plaint are treated to have been admitted, a judgment could possibly be passed in favour of the plaintiff without requiring him to prove any fact mentioned in the plaint. It is a matter of the court’s satisfaction and, therefore, only on being satisfied that there is no fact which need be proved on account of deemed admission, the court can conveniently pass a judgment against the defendant who has not filed the written statement. But if the plaint itself indicates that there are disputed questions of fact involved in the case regarding which two different versions are set out in the plaint itself, it would not be safe for the court to pass a judgment without requiring the plaintiff to prove the facts so as to settle the factual controversy. Such a case would be covered by the expression ‘the court may, in its discretion, require any such fact to be proved’ used in sub-rule (2) of Rule 5 of Order 8, or the expression ‘may make such order in relation to the suit as it thinks fit’ used in Rule 10 of Order 8.”

17. No doubt this decision was rendered considering that the verb used in the provision is ‘may’, but nothing substantial turns on it.

18. What emerges from a reading of Balraj Taneja (supra), with which we wholeheartedly concur, is that only on being satisfied that there is no fact which need to be proved on account of deemed admission, could the court pass a judgment against the defendant who has not filed the written statement; but if the plaint itself suggests involvement of disputed questions of fact, it would not be safe for the court to pass a judgment without requiring the plaintiff to prove the facts. Balraj Taneja (supra) also lays down the law that provision of Rule 10 of Order VIII, CPC is by no means mandatory in the sense that a court has no alternative but to pass a judgment in favour of the plaintiff, if the defendant fails or neglects to file his written statement.

19. If indeed, in a given case, the defendant defaults in filing written statement and the first alternative were the only course to be adopted, it would tantamount to a plaintiff being altogether relieved of its obligation to prove his case to the satisfaction of the court. Generally, in order to be entitled to a judgment in his favour, what is required of a plaintiff is to prove his pleaded case by adducing evidence. Rule 10, in fact, has to be read together with Rule 5 of Order VIII and the position seems to be clear that a trial court, at its discretion, may require any fact, treated as admitted, to be so proved otherwise than by such admission. Similar is the position with section 58 of the Indian Evidence Act, 1872. It must be remembered that a plaint in a suit is not akin to a writ petition where not only the facts are to be pleaded but also the evidence in support of the pleaded facts is to be annexed, whereafter, upon exchange of affidavits, such petition can be decided on affidavit evidence. Since facts are required to be pleaded in a plaint and not the evidence, which can be adduced in course of examination of witnesses, mere failure or neglect of a defendant to file a written statement controverting the pleaded facts in the plaint, in all cases, may not entitle him to a judgment in his favour unless by adducing evidence he proves his case/claim…”

50. In view of the aforesaid judgments, it is a settled position of law that Order VIII Rule 10 of the CPC is a permissive rule that provides the Court with two alternatives in case the defendant fails to file the written statement. It can either pronounce the judgment or direct the parties to prove their case by adducing evidence. Therefore, mere failure of the defendant to file the written statement does not relieve the plaintiff of its obligation to prove their case as the Court cannot pass a judgment in mechanical manner by invoking Rule 10 of Order VIII of the CPC.
51. In a case, especially where a written statement has not been filed by the defendant, the Court shall be cautious in a proceeding under Order VIII Rule 10 of the CPC. Before passing the judgment against the defendant, it is the duty of the Court to determine that even if the facts set out in the plaint are treated to have been admitted, a judgment could possibly be passed in favour of the plaintiff without requiring him to prove any fact mentioned in the plaint.
52. Accordingly, this Court is of the view that it is a matter of the Court’s satisfaction and, therefore, only after being satisfied that there is no fact which need be proved, the Court can pass a judgment against the defendant who has not filed the written statement, however, if the plaint itself indicates that there are disputed questions of fact involved in the case regarding which two different versions are set out in the plaint itself, it would not be prudent for the Court to pass a judgment without the plaintiff proving the facts so as to settle the factual controversy.
53. The position of law thus now has been settled that given the consequences of non-filing of written statement, the amended provisions of the CPC have been held to be mandatory to be complied with and it cannot be circumvented even by recourse to inherent power under Section 151 of the CPC as also held in SCG Contracts (India) (P) Ltd. v. K.S. Chamankar Infrastructure (P) Ltd., (2019) 12 SCC 210.
54. Now coming to the determination of the issue whether the right of filing of written statement in the above said civil suit has rightly been closed by the learned Trial Court.
55. In the impugned judgment, while rendering its decision, the learned Trial Court has categorically noted that it is passing the same in terms of Order VIII Rule 10 of the CPC. The relevant extract is as under:
“..Further, in terms of Order VIII Rule 10, CPC too the present suit is liable to be decreed in plaintiffs favour and against the defendants…”

56. Perusal of the impugned judgment states that the plaintiff, i.e., the respondent bank, during arguments, relied upon the evidence filed along with the plaint such as housing loan application form, agreement for term loan for Rs. 10 Lakhs for 20 years by way of equitable mortgage, memorandum of deposit of title deed, acknowledgment of debt/liabilities by way of correspondence dated 27th June, 2018 etc. (annexed as Annexure A-8 with the appeal) duly signed by both the defendants along with the statement of account dated 19th November, 2018 as per which a sum of Rs.10,19,302/- was due upon the appellants herein.
57. The respondent bank had averred that the borrowers/appellants availed a term loan which they failed to repay and produced the above stated documents to substantiate its averment.
58. Furthermore, in paragraph 4 of the impugned judgment, the learned Court below noted that the learned counsel for the defendants, i.e., the appellants herein had appeared on 23rd April, 2019, however, no written statement had been filed on their behalf till the date of passing of the impugned judgment despite lapse of 120 days which is beyond the statutory limit under the Act.
59. This Court is of the view that despite the fact the appellants had received the entire set of plaint and the annexures and that their counsel was also informed that the above said civil suit was filed on 23rd January, 2019, and it involves a Commercial dispute within the meaning of the Act, the appellants failed to file their written statement.
60. Taking into account the aforesaid, the learned Trial Court was satisfied with the plea raised by the respondent bank and it accordingly closed the appellants’ right to file written statement based on the documents filed with the plaint.
61. It is only when the Court is fully satisfied that there is no such fact which needs to be proved at the instance of the plaintiff, the Court can pass a judgment against the defendant who had not filed the written statement. In light of the same, this Court is satisfied that the case of the respondent bank does not indicate that there are disputed questions of fact involved which give rise to two versions. Therefore, since the right to file written statement stood forfeited in light of the provisions enshrined under the Act, this Court does not find any infirmity thereof and it is held that the learned Court below has rightly passed the judgment in terms of Order VIII Rule 10 of the CPC.
62. Accordingly, issue no. 2 is decided against the appellant.
63. Conclusively, this Court is of the view that the learned Trial Court failed to appreciate the law qua Order XIII-A of the CPC and neglected the procedure established to pronounce a summary judgment, therefore, the decision rendered to that extent is liable to be set aside. With regard to the other limb of the instant dispute, the appellants have failed to make out a case in their favour as to how the learned Trial Court erred in passing a judgment in view of Order VIII Rule 10 of the CPC.
64. While passing the impugned order, the learned Trial Court had assigned reasons which were two fold. The first reason was that the suit of the respondent bank was liable to be decreed in terms of Order XIII-A of the CPC, i.e., summary judgment. This Court holds the first reason to be inappropriate and the same is set aside in light of the foregoing discussions.
65. The second reason given by the learned Trial Court was that since the appellants’ right to file written statement has been forfeited due to which they failed to defend the respondent bank’s claim, therefore, the suit is liable to be decreed in terms of Order VIII Rule 10 of the CPC. It is held that since the appellants failed to file their written statement after the lapse of 120 days, therefore, the view taken by the learned Trial Court is correct and the same is upheld.
66. In light of the foregoing discussion of facts and law, the impugned judgment dated 14th October, 2019, passed in CS (COMM) no. 292/2019 by the learned ADJ-03 (East), Karkardooma Courts, Delhi is upheld in aforesaid terms.
67. Accordingly, the instant appeal stands dismissed along with pending applications, if any.
68. The order be uploaded on the website forthwith.

CHANDRA DHARI SINGH, J
APRIL 4, 2024
gs/ryp/db Click here to check corrigendum, if any

RFA 4/2020 Page 32 of 32