Allowed

Irene Power and Steel Company v. Nirani Sugars Ltd.

Karnataka HC11 Sept 2023COMAP/100014/2023

Case brief

AI extract

What is this about?

The High Court of Karnataka Commercial Appeals Bench allowed the appeal against a default judgment. It distinguished a prior precedent, relied on Section 151 CPC, and remitted the suit to the Commercial Court for reconsideration after permitting the appellants to file a written statement.

What did the court decide?

Set aside the impugned order dated 16.11.2022 and the judgment/decree; IA No.2 allowed; matter remitted for reconsideration to receive written statement; fees refunded.

Irene Power and Steel Company Vs Nirani… — Contract and Commercial Disputes | Karnataka HC (2023)

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1 - NC: 2023:KHC-D:10323-DB COMAP No. 100014 of 2023

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IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH

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DATED THIS THE 11^TH DAY OF SEPTEMBER, 2023

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PRESENT

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THE HON'BLE MR JUSTICE S.R. KRISHNA KUMAR

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AND

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THE HON'BLE MR JUSTICE G BASAVARAJA COMMERCIAL APPEALS NO. 100014 OF 2023

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BETWEEN:

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IRENE POWER AND STEEL COMPANY, F-13, FIRST FLOOR, SACRED WORLD TOWERS, PUNE, MAHARASHTRA-411040. REPRESENTED BY AUTHORIZED SIGNATORY, VAMAN KUMAR S/O. SATPAL KUMAR AGE: 46 YEARS, OCC: BUSINESS, R/O: 901,BLUE LOTUS, SOPAN BAUG, PUNE, MAHARASHTRA-411040.

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ROHAN HADIMANI T

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Digitally signed by ROHAN HADIMANI T Date: 2023.09.14 10:32:36 +0530

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VAMAN KUMAR S/O. SATPAL KUMAR, AGE: 46 YEARS, OCC: BUSINESS, R/O: 901,BLUE LOTUS, SOPAN BAUG, PUNE, MAHARASHTRA-411040.

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SONIA KUMAR W/O. VAMAN KUMAR, AGE: 44 YEARS, OCC: BUSINESS, R/O: 901,BLUE LOTUS, SOPAN BAUG, PUNE, MAHARASHTRA-411040.

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…APPELLANTS

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(BY SRI SHRIPRASAD J. JOSHI AND SRI RAVIRAJ C. PATIL, ADVOCATES)

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AND:

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NIRANI SUGARS LTD., #166, KULALI CROSS, JAMAKHANDI ROAD,

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2 - NC: 2023:KHC-D:10323-DB COMAP No. 100014 of 2023

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MUDHOL-587313, CORPORATE OFFICE AT: 9TH FLOOR, WORLD TRADE CENTER, YESHWANTHPUR, BENGALURU. REPRESENTED BY ITS SALES ASSISTANT, NINGARAJ A. NIRANI, AGE: 32 YEARS, OCC: SALES ASSISTANT, R/O: MUDHOL, DIST: BAGALKOT.

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…RESPONDENT (BY SRI V.M. SHEELVANT, ADVOCATE)

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THIS COMMERCIAL APPEAL IS FILED UNDER SECTION 13(1) OF THE COMMERCIAL COURTS, 2015, PRAYING TO SET ASIDE THE IMPUGNED JUDGMENT AND DECREE DATED 16.11.2022 PASSED BY I ADDITIONAL DISTRICT AND SESSIONS JUDGE, BAGALKOT SITTING AT JAMAKHANDI IN COM.O.S.NO.5009/2022.

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THIS APPEAL, COMING ON FOR ORDERS, THIS DAY, S.R. KRISHNA KUMAR, J., DELIVERED THE FOLLOWING:

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JUDGMENT

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This commercial appeal by the defendants in Commercial O.S.No.5009/2022 is directed against the impugned judgment and decree dated 16.11.2022 passed by I Additional District & Sessions Judge, Bagalkot sitting at Jamkhandi (hereinafter referred to as the ‘Commercial Court’), whereby the said suit filed by respondent/plaintiff for recovery of a sum of Rs.2,72,88,525/- together with interest at 18% per annum from the date of the suit till realization was decreed by the Commercial Court in favour

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3 - NC: 2023:KHC-D:10323-DB COMAP No. 100014 of 2023

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of the respondent/plaintiff against the

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appellants/defendants.

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2. Heard learned counsel for the appellants and

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learned counsel for the respondent and perused the material on record.

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3. The material on record discloses that subsequent to the dispute between the parties being referred to the mediation, the matter stood posted before the Commercial Court on 19.10.2022. On that date, while the respondent/plaintiff was present along with his counsel, appellant/defendants remained absent and the Commercial Court took note of the fact that no written statement was filed and proceeded to post the matter for judgment. Subsequently, the appellants/defendants filed an application I.A.No.II seeking permission to file the written statement. The said application having been opposed by the respondent/plaintiff, the Commercial Court passed an order dated 16.11.2022 rejecting the application IA No.2 on the ground that once the matter is

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posted for pronouncement of judgment, it is impermissible for him to reopen the same for any purpose whatsoever by placing reliance upon the judgment of this Court in the case of Rabiya Bi Kassim Vs. The Country Wide Consumer Financial Service Ltd. , reported in ILR 2004 KAR 2215 . Pursuant to rejecting I.A.No.II, the Commercial Court proceeded to pass the impugned exparte judgment and decree decreeing the suit in favour of the respondent/plaintiff against the appellant/defendants, who are before this Court by way of present appeal.

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4. A perusal of the material on record including the impugned order dated 16.11.2022 will indicate that the Commercial Court has committed an error in placing reliance upon the judgment of this Court in Rabiya’s case supra without appreciating that in the light of judgment of the Hon’ble Apex Court in K.K. Velusamy Vs. N. Palanisamy¹ , it was permissible to invoke the provisions contained in Section 151 of CPC and reopen the case by

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1 (2011) 11 SCC 275

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5 - NC: 2023:KHC-D:10323-DB COMAP No. 100014 of 2023

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permitting the appellants/defendants to file their written statement even after the matter was posted for judgment. It is also relevant to state that a perusal of the application filed by the appellants/defendants along with written statement will indicate that the inability and omission on the part of the appellants to appear before the Commercial Court after the matter was sent back from the Mediation Centre, was due to bonafide reasons, unavoidable circumstances and sufficient cause. Under these circumstances, by adopting justice oriented approach and in order to provide one more opportunity to the appellants to contest the suit by filing written statement, we deem it just and appropriate to set-aside the impugned order passed on IA No.II dated 16.11.2022 and allow the said application by directing the Commercial Court that written statement of the appellant be received on record.

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5. The next question that would arise for consideration would be as to the procedure to be followed by this Court upon directing that the written statement of

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the appellants/defendants be received on record. In this context, it is relevant to state that it is an undisputed fact that the appellants/defendants neither filed written statement nor cross-examined the respondent/plaintiff and his witness nor did they adduce oral and documentary evidence in support of their defence.

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6. In view of the findings recorded above that liberty is to be provided to the appellants/defendants to file written statement and contest the suit on merits, it would also necessary to set-aside the impugned judgment and decree passed by the Commercial Court and remit the matter back to the Commercial Court for reconsideration afresh in accordance with law within a stipulated time frame.

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7. In the result, we proceed to pass the following:

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ORDER

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a) Commercial Appeal stands allowed .

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b) The impugned order dated 16.11.2022 passed on IA No.2 in Commercial OS

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NC: 2023:KHC-D:10323-DB COMAP No. 100014 of 2023

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No.5009/2022 is hereby set-aside and IA No.2 is allowed;

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c) So also, the impugned judgment and decree dated 16.11.2022 passed in Commercial OS No.5009/2022 is set-aside.

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d) The matter is remitted back to the Commercial Court for reconsideration afresh in accordance with law.

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e) The parties undertake to appear before the Commercial Court on 09.10.2023 without awaiting further notice from the Commercial Court under any circumstances whatsoever.

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f) The Commercial Court is hereby directed to receive the written statement filed by the appellants/defendants along with IA No.2 on record and proceed further in the matter.

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g) The Commercial Court is directed to dispose off the suit as expeditiously as possible and at any rate within a period of three months from 09.10.2023.

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h) All rival contentions on all aspects of the matter are kept open and no opinion is expressed on the same.

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In view of the matter having been remitted back to the Commercial Court, the entire Court Fee (100%) shall be refunded to the appellants/defendants as contemplated under Section 64 of the Karnataka Court Fees and Suits Valuation Act, 1958.

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Sd/JUDGE

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Sd/JUDGE

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RH/JTR LIST NO.: 1 SL NO.: 9

Irene Power and Steel Company v. Nirani Sugars Ltd.

Case brief

What is this about?

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Irene Power and Steel Company v. Nirani Sugars Ltd.

Case brief

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