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DCM International Limited & Anr. V. M/s Wonder Wear Pvt.

Ltd Limited
& Anr.

Subject: CODE OF CIVIL PROCEDURE 1908


Submitted to: Dr. Ruhi Paul

Submitted by: Vanya Chhabra (76/2013)


Class: III Year-V Semester

National Law University, Delhi

CASE NAME - DCM International Limited & Anr. V. M/s Wonder Wear Pvt. Ltd Limited &
Anr.
[CS (OS) 1193 -1999]

NATURE OF CASE - SUIT FOR RECOVERY


(Ex-Parte Ad-interim restraining Order (1)from Selling/Transferring/Parting with possession
of Assets, (2) from carrying business operations/ alternatively furnish details of complete
business transactions and (3) from operating its Bank accounts.)

Table of Contents
FROM PLAINTIFF SIDE...................................................................5
I. BRIEF OF PLEADINGS..................................................................5
GENERAL DETAILS:...............................................................................5
FACTS OF THE CASE:............................................................................6
LIMITATION PERIOD..............................................................................8
VALUATION OF SUIT FOR THE PURPOSE OF COURT FEES.........................9
JURISDICTION......................................................................................9
PRAYER...............................................................................................9
Claims made by the Plaintiffs...............................................................................9

II. BRIEF OF APPLICATIONS OF PLAINTIFFS....................................10


III. BRIEF OF ORDERS PASSED BY THE HONBLE COURT..................13
IV. CODE OF CIVIL PROCEDURE 1908 & LIMITATION LAW PROVISIONS
APPLICABLE IN THE INSTANT CASE...........................................17
ISSUE OF LIMITATION.........................................................................17
ISSUE OF JURISDICTION......................................................................17
COURT FEE........................................................................................18
BEFORE THE JOINT REGITRAR..............................................................18

V. CODE OF CIVIL PROCEDURE 1908 PROVISIONS...........................19


SECTIONS..........................................................................................19
ORDERS............................................................................................20
Order III: RECOGNISED AGENTS AND PLEADERS................................................20
Order IV: INSTITUTION OF SUITS........................................................................20
Order V: ISSUE AND SERVICE OF SUMMONS......................................................20
Order VI: PLEADINGS GENERALLY.......................................................................21
Order VII: PLAINT............................................................................................... 23
Order IX: APPEARANCE OF PARTIES AND CONSEQUENCES OF NON-APPEARANCE
..................................................................................................................... 24
Order XIII: PRODUCTION, IMPOUNDING AND RETURN OF DOCUMENTS.............25
Order XIV: SETTLEMENT OF ISSUES AND DETERMINATION OF SUIT ON
ISSUES OF LAW AND ON ISSUES AGREED UPON...............................25
Order XV: DISPOSAL OF THE SUIT AT THE FIRST HEARING.................................25

Order XVII: ADJOURNMENTS...............................................................................26


Order XVIII: HEARING OF THE SUIT AND EXAMINATION OF WITNESSES.............26
Order XIX: AFFIDAVITS....................................................................................... 26
Order XXIII: WITHDRAWAL AND ADJUSTMENTS OF SUITS...................................27
Order XXXIX: TEMPORARY INJUNCTIONS AND INTERLOCUTORY ORDERS...........27

VI. RESEARCHER COMMENTS........................................................29


ISSUE OF AD INTERIM INJUNCTION......................................................29
ISSUE OF DELAY IN SERVING SUMMONS:.............................................29
ISSUE OF WITHDRAWAL OF SUIT:........................................................29
ISSUE OF SUMMARY PROCEEDINGS:....................................................30
ISSUE OF ADJOURNMENTS:.................................................................30
ISSUE OF OUT OF COURT SETTLEMENT:...............................................30

FROM PLAINTIFF SIDE


I. BRIEF OF PLEADINGS
GENERAL DETAILS:

The present suit was filed for recovery of Rs. 2,65,76,439/- in the High Court at
New Delhi on the 25th of May 1999 which asked for an ad-interim order against

the defendants.
The suit prayed for an ex-party ad-interim order restraining the defendants from
selling, transferring or alienating/parting with possession of properties.
Incorporation of the Company:
Both the companies were duly incorporated under the Indian Companies Act,

1956 registered ar their respective offices.


The name of the company was changed subsequently form the name used in

incorporation.
Both the companies forming Plaintiffs combined together in filling this suit as

common questions of law and fact could be answered together.


The Plaintiffs have combined to file a suit because the Plaintiffs are connected i.e

both of them are a party to the transacation.


The companies of the Plaintiff and the defendant signed a Memorandum of
Understanding (MOU) as there was a transfer of money from one company to

another company for meeting the obligations on the date 16.03.1996.


The Memorandum of Understanding (MOU) was a consequence of the offer made

by defendants No. 2 on behalf of the defendant no. 1 via letter dated 12.02.1996.
PLAINTIFF NO. 1- The suit was filed through the Company Secretrary and
Principal Officer who had been authorised to institute a suit, verify and file the
plaint, affidavits and all other interim applications by the Board of Directors via a

resolution dated 17.03.1999.


PLAINTIFF NO. 2- The suit was filed through the Manager who had been
authorised to institute a suit, verify and file the plaint, affidavits and all other
interim applications by the Board of Directors via a resolution dated 18.03.1999.

FACTS OF THE CASE:

Plaintiffs: The second Plaintiff was engaged in the business of leasing anf
giving on hire-purchase various equipments and in extending inter-corporate
loans and finances. The first Plaintiff was engaged in International Trade and

Investments.
Defendants: The first defendant used to operate its business of export through
the second defendant. Both defendants combined together for procuring
business from abroad and for procuring finances to execute the overseas

orders.
Negotiations for financing the export commitments of the Defendant No. 1
commenced when the written proposal in the form of The financing of export
turnover to M/s Wonder Wear Private Limited, was received by the

Defendant no. 2 from the Plaintiff no. 2 via a Letter dated 12.02.1996.
They came to an arrangement that Plaintiff no. 1 would finance the export by
60% of the export value together with 12.5% of duty draw back amount as and

when the order for export was received.


Along with the letter the defendants furnished to the Plaintiff no. 2, a Letter of
Credit numbered by the Chase Manhattan Bank in favour of defendant no. 1

under advise to State Bank of India amounting to 908,654.40 US$.


The Letter of credit contained the details of the periods of shipments and it
specified the method of execution of the purchase order. The consignment was
to be executed through 21 consignments against equal number of purchase
orders, also each one of them was required to cover specifically each purchase

order. The terms were to be strictly complied with by the defendant No. 1.
The memorandum of understanding was executed between the Plaintiff no. 1
and Defendant no. 1 on 16.02.1996. The memorandum of understanding

(MOU) is to be reas as a part of the petition of the plaint.


According to the terms and conditions of the Memorandum of Understanding,
the Plaintiff was supposed to advance a sum equal to 60% of the value of
export order/Letter of Credit besides 12.5% of duty drawbacks and hence was
requested for the same amount. The Plaintiff was supposed to retain 64% of

the total value and the balance was to be passed to Defendant No.1.
According to the terms and the conditions the Plaintiff no. 1 was entitled to
receive the export proceeds to the extent of 60% of the letter credit value along

with the 4% of the Export turnover. Additionally the 4% of the 12.5% duty

drawbacks admissible to the defendant No.1.


The clause 4 (b) of the Memorandum of Undertaking, clearly stated that along
with the levy of interest the Memorandum of understanding was made current,
valid, continuing and subsisting during the completion of each transaction
between the parties commencing from the receipt of a valid Letter of Credit
and ending with their execution of the Export order/contract/refund of money

advanced by the Plaintiff no.1.


The defendant via a letter dated 16.02.1996 stated that he was undertaking
manufacturing of ladies Twill Barn Coats for shipment. It was represnted that
the total value of the order inclusive of duty draw back at the rate of 12.5%

was Rs. 3,74,00,000 (@Rs.36.50 per US $).


Hence, the defendant made a request to the Plaintiff no. 1 to extend 60% of the
amount in two installements. Additionally, he gave a timeline for negotiation
of the documents to be negotiated in response to the Letter of Credit.
Consequentially, the Plaintiff sanctioned the making over of payment to the
Defendant No. 1. A total of Rs. 2,05,00,000 was advanced to the Defendant

No. 1 over a period of 06.03.1996 to 04.05.1996.


Then the Defendant No. 1 appraoched Plaintiff No. 1 to make the Letter of
Credit in favour of Indian Parties on 6th April, 1996. The defendant informed
Plaintiff No. 1 through Defendant no. 2 vide letter dated 25.07.1996 again that
even after two extensions of the delivery period the defendant could not
comply with the same whereas the purchaser had insisted for discount and free
air-frieghting of the goods which in turn would mean more expenses to the

Defendant no.1 and recipt of reduced value of the goods.


The defendant informed Plaintiff of the cancellation of the order of the
defendant. The letter also stated that the Defendant no. 1 was making efforts
to liquidate their stocks and repay the amounts advanced by Plaintiff no. 1.
The letter dated 12.09.1996 acknowledged the liabilty of Rs.1,31,14,457.82

which was due and payable.


As per the Plaintiff the amount due was against the defendants was Rs.

1,38,21,145.
The contract as whole is evidenced by the documents exchanged between
parties.

The defendants could not repay the full amount and hence they acknowledged
the liability amount along with the interest which is Rs. 1,31,14,457.82 along

with the interest levied of 2% per month with effect from 01.09.1996.
The amount to be paid is Rs. 2,65,67,439, jointly and severally by the

defendants.
The Plaintiffs are to be paid from the defendants who are not in good financial
shape. The Plaintiff has a business of financing, leasing and commercial
companies. They deal in international Trade and Investments hence have

further ebts to repay to its creditors for discharging business obligations.


Hence, the Plaintiff has filed a suit for recovery.

LIMITATION PERIOD
Cause of action arose on these events

Firstly, on multiple occassions when the defendant no. 1 took to repay the Plaintiff the

money advanced with interest.


Secondly, the demand for refund of money was made by the Plaintiffs and was

continued for multiple days.


Thirdly, on failure to pay the advanced money the cause of action advanced every

subsequent day when the defendant failed to pay the money.


The cause of action further arose on each and every dates of respective

correspondences exchanged between the parties requesting for repayement.


The cause of action further arose when defenedants violated the terms of collaboration

agreement.
The cause of action still subsisted and is continued when was filed.
Hence, suit was within time period.

VALUATION OF SUIT FOR THE PURPOSE OF COURT FEES


-

Valuation of suit has been assessed at Rs. 2,65,67,439 (Two crore sisty five lakhs sixty
seven thousand four hundred thirty nine), so this suit is maintable before Honblre

Delhi High court.


The stamp payable for the purpose of the case is valued at Rs. 2,61,642.
The court fees for the case is Rs.200 on which court fee of Rs.20 is payable.
JURISDICTION

The Memorandum of Understanding was executed at Delhi.


The money advanced by the defendant to the Plaintiff was payable at Delhi
8

The document pertaining to export of goods was executed at Delhi


Hence, the jurisdiction of the suit lies at the Delhi High Court.
PRAYER
Claims made by the Plaintiffs
Plaintiffs asked following prayers:-

Decree of recovery for the amount with interest on the princiapal against the

defendants.
Charge an interest per month along with recovery of the decreed amount.
Permanent injunction on alientaion, selling or otherwise against the defendants.
Costs of suit is claimed.

II. BRIEF OF APPLICATIONS OF PLAINTIFFS


1. APPLICATION FILED BY PLAINTIFFS FOR INJUNCTION AGAINST
DEFENDANTS, UNDER ORDER 39 RULE 1&2 AND SECTION 94 &
SECTION
THROUGH
-

151 CIVIL PROCEDURE CODE WITH AN AFFIDAVIT


INTERLOCUTORY

APPLICATION

NO.

5689/1999,

ON

25.05.1999
The plaintiffs prayed from Honble court to pass an ad-interim injunction in favour of
the plaintiffs and against the defendants from thereby restraining the defendants from
(1)from Selling/Transferring/Parting with possession of Assets, (2) from carrying
business operations/ alternatively furnish details of complete business transactions

and (3) from operating its Bank accounts.


The plaintiffs stated that defendants are in default of payment of the dues.
The defendants agree and also recognise the rate of intrest to be paid on it.
The shipments were not honoured hence the contract was cancelled. The defendants

were endorsing products without a Letter of Credit.


The assets of the defendants are charged with the banks and other financial

institutions.
This application was followed by an affidavit as a proof of what has been stated in the
application above, under the seal of the oath commissioner, High Court of Delhi (as
per section 139, CODE OF CIVIL PROCEDURE 1908).

2. COUNTER AFFIDAVIT OF DEFENDANT NO. 2 FILED THROUGH


INTERLOCUTORY APPLICATION NO. 5689/1999 FILED ON 14.09.1999.

3. APPLICATION BY PLAINTIFFS UNDER SECTION 151 CODE OF CIVIL


PROCEDURE 1908 FOR FRESH PUBLICATION OF ORDERS FOR
-

SERVICE ON DEFENDANT NO. 1, ON 25.7.2001.


The application was pending before the court, the court was pleased to order for fresh
publication of notice in the newspaper Statesman and the court fixed the next date

as 23.02.2001. On that date, the matter was to be re-notified on 28.8.2001.


The Dasti order could not be prepared on 1.11.2000 for service of defendants because

the court had not ordered for the same on the previous hearing.
Under the inherent powers of the court the application was filed for a condonation of
delay. In fact, section 151 was invoked repeatedly.

10

4. APPLICATION BY PLAINTIFFS UNDER ORDER 5 RULE 20 READ WITH


SECTION 151 CIVIL PROCEDURE CODE FOR SERVING OF SUMMONS
-

ON DEFENDANT NO. 1 THROUGH PUBLICATION IN NEWSPAPER.


The application was filed under Order V Issue and Service of Summons where
under Rule 20, there shall be substituted service of summons on the defendant,

praying for serving summons on the defendant in a local newspaper.


The plaintiffs had taken all due steps to serve summons on the defendant.
The application was pending before the court, the court was pleased to order for fresh
publication of notice in the newspaper Statesman and the court fixed the next date

as 23.02.2001. On that date, the matter was to be re-notified on 28.8.2001.


The Dasti order could not be prepared on 1.11.2000 for service of defendants because
the court had not ordered for the same on the previous hearing, however it could not

be served.
According to the reports of the process-serving agency the defendant kept out of the

way for the purpose of avoiding service and the summons.


The summons had been sent to the last known address of the defendant.
In the interest of justice the summons were ordered to be served upon the defendant

by means of a publication in a daily newspaper.


This application was followed by an affidavit as a proof of what has been stated in the
application above, under the seal of the oath commissioner, High Court of Delhi (as
per section 139, CODE OF CIVIL PROCEDURE 1908).

5. APPLICATION UNDER SECTION 151 BY PLAINTIFFS FOR DECREEING


-

SUIT EX- PARTE AGAINST DEFENDANT NO. 1 FILED ON 16.9.2003.


The application was filed for the second defendant have appeared, filed their written

statement whereas the court had to proceed ex-parte in case of first defendant.
The defendants have not appeared even to assist the court.
The court decreed for winding up of the company and appointment of official

liquidator.
The court grants an ex parte decree of recovery of suit amount in favor of the plaintiff.
This application was followed by an affidavit as a proof of what has been stated in the
application above, under the seal of the oath commissioner, High Court of Delhi (as
per section 139, CODE OF CIVIL PROCEDURE 1908).

6. APPLICATION FOR STRIKING OUT NAME OF SECOND DEFENDANTS


FROM THE SUIT UNDER ORDER 1 RULE 10(2) READ WITH SECTION 151

11

CIVIL PROCEDURE CODE FILED BY DEFENDANT NO. 2 THROUGH


INTERLOCUTORY APPLICATION NO. 4362/ 2004 ON 16.0.2004.
7. REPLY FILED BY PLAINTIFFS TO THE APPLICATION OF DEFENDANT
NO. 2 FOR STRIKING OUT THE SAID APPLICANT FROM THE SUIT
UNDER ORDER 1 RULE 10(2) & SECTION 151 CIVIL PROCEDURE CODE
-

ON 03.08.2007.
The application was filed as a response to the application of the defendant to strike

out defendant no. 2.


The second defendant is a necessary party and cannot be deleted from arraign of the

parties in the suit as it is the proper party for the suit of recovery.
The second defendants were not only a medium or a channel of conversation. They
were in constant touch with plaintiff no. 2. It was acting as an agent to defendant no.
1. Thus the liability of the agent exists with the liability of the principal.

8. REJOINDER AFFIDAVIT FILED ON BEHALF OF THE DEFENDANTS/


APPLICANTS

TO

THE

REPLY FILED

PLAINTIFFS ON 14. 09. 2005.

12

BY THE

RESPONDENTS/

III. BRIEF OF ORDERS PASSED BY THE HONBLE COURT


ORDER: I

DATED

27.05.1999-

The court registered the plaint as a suit.

The court ordered for issue of summons in the suit to the defendants by (1) ordinary
process (2) by registered post.
ORDER: II DATED 12.07.1999

The summons to defendant remains un-served. The court ordered for issue of fresh
notice for service of summons to the defendant again by (1) ordinary process (2) by
registered post. The court asked for process fee and registration covers to be filed
within 5 days from that date.

The court also passes an order of restriction from selling, transferring or alienating
and parting with the possession of any of its assets up to the next date of hearing.

Compliance of the order to be was ordered to be within 3 days.


ORDER: III DATED 16.09.1999

The reply for defendants statement was to be filed within 8 weeks by order of the
court.

The court also gave four weeks time for moving a fresh application for substituted
service of summons to Defendant no. 1.

The court asked for continuation of Interim order.


ORDER:IV DATED 04.11.1999

The court also gave four weeks time for moving a fresh application for substituted
service of summons to Defendant no. 1.

Mentioned that the defendant no. 2 had already filed the written statement.
ORDER: V DATED 22.11.1999

The presiding order was not holding court, thus postponed.


ORDER: VI DATED 16.02.2000

13


The court shall furnish the address to the registry along with the required process fee
for issue of notice and summons to the defendant no. 1 on his last address mentioned
in the plaint.

The court gave a time of two weeks.


ORDER: VII DATED 8.05.2000

The court shall furnish the address to the registry along with the required process fee
for issue of notice and summons to the defendant no. 1 on his last address mentioned
in the plaint.
ORDER: VIII DATED 17.8.2000

The court allowed the plaintiff to serve the defendant through newspaper considering
the previous two services failed.

The court asked for a Dasti for publication named Priyavani to be given to the
counsel for Plaintiff.
ORDER: IX DATED 1.11.2000

The court said that the defendant be served summons in Statesman as Priyavani is
no newspaper.

The court allowed the plaintiff to serve the defendant through newspaper considering
the previous two services failed.

The court asked for a Dasti for publication named Statesman.


ORDER: X DATED 23.02.2001

The court is waiting for citation of publication of Defendant No. 1.


ORDER: XI DATED 27.7.2001

The interlocutory application is filed for in terms of previous order of the court. The
plaintiff could not get the publication in times hence must get it done next time.

Interlocutory application stands disposed off.

The court asked for a Dasti for publication named Statesman.


ORDER: XII DATED 28.08.2001

14


The notice on the Defendant No. 1 had been served but still there was not one that had
appeared for the Defendant.

The plaintiff hence asked for further appropriate order.


ORDER: XIII DATED 05.11.2001

The matter was adjourned as the judge was on leave.


ORDER: XIV DATED 13.12.2001

The notice on the Defendant No. 1 had been served but still there was not one that had
appeared for the Defendant.

Thus the court had decided to precede ex-parte as the defendant still did not appear.

The plaintiff was given four weeks time to file a replication.


ORDER: XV DATED 18.02.2002

The court shall frame the issues next.

The case was listed for admission and denial of documents.

The replication was to be filed within another.

No documents had been submitted for admission and denial by any of the parties.

The court mentioned that the stage for admission and denial is complete.

The court shall frame issues on the next date.


ORDER: XVI DATED 13.02.2002

The Plaintiffs seek for more time to file replication.

The court granted another four weeks for filing the documents for filling the
replication.

The court has fixed the next date for admission and denial of the documents.
ORDER: XVII DATED 18.07.2002

The replication to the written statement of the Defendant No. 2 was not filed.
ORDER: XVIII DATED 14.01.2003

The court gave last opportunity for filing a replication in the next four weeks.

The court also gave last opportunity to file original documents within four weeks.

The court instructed the parties to remain present for the purpose of admission and
denial.

15

ORDER: XIX DATED 22.07.2003

The court gave last opportunity for filing a replication in the next four weeks.

The court also gave last opportunity to file original documents within eight weeks.

The court instructed the parties to remain present for the purpose of admission and
denial.
ORDER: XX DATED 16.09.2003

The court valued the suit for the purpose of pecuniary jurisdiction at the value more
than Rs. 20 lakhs. The replication was sough to be filed within the next four weeks as
the last opportunity given by the court.

The court also gave last opportunity to file original documents within four weeks.

The court instructed the parties to remain present for the purpose of admission and
denial.

16

IV. CODE OF CIVIL PROCEDURE 1908 & LIMITATION LAW


PROVISIONS APPLICABLE IN THE INSTANT CASE

ISSUE OF LIMITATION
Section 22 of limitation act1 says that In the case of a continuing breach of contract
or in the case of a continuing tort, a fresh period of limitation begins to run at every
moment of the time during which the breach or the tort, as the case may be, continues.
As sated earlier this suit is not barred because cause of action still subsists and is
continuing. As per Entry 40 to the First Schedule of the Limitations Act of 1963,
the period of limitation to file a suit extends to three years in case a bill of exchange
by the payer in favour of the payee is dishonoured. Also as per Section 2(c) of the Act
of 1963 a bill of exchange includes a letter of credit.

ISSUE OF JURISDICTION
Valuation of suit is assessed at Rs. 2,65,76,439/- Crore, so this suit maintainable
before Honble Delhi High court, because above 20 lacks matters, are heard by
Honble High Court in Delhi. It is also according to Section 16 of CODE OF CIVIL
PROCEDURE 1908 because cause of action has arisen in Delhi only. Since as per
Section 5 of the Delhi High Court Act of 1966, matters above 5 lacks, prior to 2003
fell within the original civil jurisdiction of the High Court and the present suit was
filed in 1999. It should however be noted that because of the amendment brought to
the Delhi High Court Act of 1966 in 2015, at present the civil jurisdiction of the High
Court on the Original side stands at Rs. 2 Crore.
Also as per Section 20 (c) of the Code of Civil Procedure, 1908 suit shall be
instituted in a court within the local jurisdiction of which the cause of action, wholly

Section 22, The Limitation Act, 1963, Continuing breaches and torts: In the case of a continuing
breach of contract or in the case of a continuing tort, a fresh period of limitation begins to run at
every moment of the time during which the breach or the tort, as the case may be, continues.

17

or in part arises. In the present case the transaction had happened at New Delhi and
thus the High Court had the jurisdiction.

Also, as per Section 16 of the Code of Civil Procedure, 1908 clearly states that the
suits regarding immovable property are to be instituted in the court within whose local
jurisdiction the property is situated. The proviso to section 16, however, provides that
where a suit to obtain relief in respect of immovable property can be entirely obtained
through the personal obedience of the defendant, the suit may be instituted either
within the local limits of the court where the property is situate or in the court within
whose jurisdiction the defendant actually and voluntarily resides, or carries on
business, or personally works for gain.

COURT FEE
Section 3 of the Court Fees Act of 1870 provides for the court fees that are to be paid
when a suit is filed on the original side of the High Court. In the present case the court
fee of Rs. Rs.200 was calculated on the basis of the same.

BEFORE THE JOINT REGITRAR


The proceedings are conducted before the Joint Registrar under Rule 3 read with
Rule 6 under Chapter 2 of the Delhi High Court (Original Side) Rules of 1967. It is
under these rules that the proceedings before the Joint Registrar, as has been
mentioned above were conducted.

18

V. CODE OF CIVIL PROCEDURE 1908 PROVISIONS

SECTIONS

Section 94 Supplemental proceedings: The Honble Court has used Section 94,
which talks about Supplemental Proceedings. It says that in order to prevent the ends
of justice from being, defeated the Court has powers:- (c) To grant a temporary
injunction and in case of disobedience commit the person guilty thereof to the civil
prison and order that his property be attached and sold;
(e) To make such other interlocutory orders as may appear to the Court to be just and
convenient. So in this case while using these powers ad interim and other
interlocutory order granted.

Section 139- Oath on affidavit by whom to be administered: whenever an affidavit


under this code is submitted, the deponent has to be administered an oath. Any court
or magistrate, or any notary, or any officer or other person whom high court may
appoint may do this, or any officer appointed by any other Court, which the state
government has generally or specifically empowered. Thus in the instant case we
can see that there is a seal of the Oath Commissioner who has been appointed by
Delhi High Court, thus we can see this requirement has been fulfilled.

Section 151 - Saving of inherent powers of Court: In this case, court used Section
151 many times like in case of granting injunction etc for the ends of justice or to
prevent abuse of the process of the Court. Section 151 states that nothing in the Civil
Procedure Code will limit the inherent powers of the court from making orders
necessary for meeting the ends of justice or to prevent abuse of the process of the
court. The first application, by the defendants, has been under section 151, CODE OF
CIVIL PROCEDURE 1908, asking the court to condone the delay in filing of the
written statement. In my opinion, the court has rightly condoned the delay under
section 151 by exercising its inherent power, because otherwise it would have
affected the ends of justice and rights of parties to the suit.

19

ORDERS
Order III: RECOGNISED AGENTS AND PLEADERS

Order 3 rule 1 - Appearances, etc., may be in person, by recognized agent or by


pleader: Appearance was given by pleader which was duly authorised by plaintiffs
via the affidavits filed.

Order IV: INSTITUTION OF SUITS

Order 4 rule 1 - Suit to be commenced by plaint: This was followed by instituting


this suit by presenting a plaint in duplicate to the court. It also complied with the
rules contained in Orders VI and VII, so far as they were applicable.

Order V: ISSUE AND SERVICE OF SUMMONS

Order 5 rule 1 - Summons: After a duly institution of a suit, a summons was issued
to the defendant to appear and answer the claim and to file the written statement of

his defence. But the defendant failed to appear.


Order 5 Rule 9 - Delivery of Summons by the court: The court may deliver the
summons via a registered post or courier services etc., Just that it must be
acknowledged in the receipt so the court has a proof that the summons has been
served upon the defendant. But in the current case the court ordered thrice with

adequate time to serve upon the summons but the summons could not be delivered.
Order 5 Rule 9A - Summons given to platiff for service: The court may give
summons to the plaintiff to give the defendant a notice in person but in this case
when the defendant was to be served he could not be as he was not available at his

last mentioned or available address in the plaint.


Order 5 Rule 17 - Procedure when defendant refuses to accept service or cannot
be found: When the defendant refuses to accept the service the summons are deemed
to be served unlike when he cannot be found then the court moves to other methods
of serving a summon, like in the present case since the defendant was not available at

his house, he was served summons via publication in a newspaper.


Order 5 Rule 20 Substituted Service: In case the court is satisfied that the
defendant is keeping out of the way for the purpose of avoiding service or in case the
court has been unable to serve the defendant summons in the ordinary way the court
may order for affixing copies or may get an advertisement published in the

20

newspaper. The newspaper shall be a daily newspaper assuming which the defendant
might have access to as if in the latest scenario. The court in the current case ordered
for last resort, that is asked the parties to get an advertisement out in the newspaper.
The parties could not manage it immediately and kept delaying it. The court asked for
a Dasti to be served when the advertisement as summons had been published in the
newspaper.

Order VI: PLEADINGS GENERALLY

Order 6 rule 1 Pleading: "Pleading" shall mean plaint or written statement. So it

includes plaint.
Order 6 Rule 2- Pleading to state material facts and not evidence: Pleading
included a statement in a concise form of the material facts on which the plaintiffs
pleading relied and did not include evidence, so they have followed this rule.
Pleading was divided into paragraphs, numbered consecutively, each allegation
being, so far as is convenient, contained in a separate paragraph. Dates, sums and

numbers were expressed in a pleading in figures as well as in words.


Order 6 Rule 4 - Particulars to be given where necessary: Defendants had played
fraud with the plaintiff which was stated in pleading specifically so this rule has been

followed properly.
Order 6 rule 6 - Condition precedent: There was precedent condition on behalf of

plaintiffs that there must be no delay in the delivery. So it was not mentioned.
Order 6 Rule 9 - Effect of document to be stated: It says that wherever the
contents of any document are material, it shall be sufficient in any pleading to state
the effect thereof as briefly as possible, without setting out the whole or any part
thereof, unless the precise words of the document or any part thereof are material.

The same was done in pleadings.


Order 6 Rule 10 - Malice, knowledge, etc.: This rule states that wherever it is
material to allege malice, fraudulent intention, knowledge or other condition of the
mind of any person, it shall be sufficient to allege the same as a fact without setting
out the circumstances from which the same is to be inferred. In this case also fact has
been stated which shows fraud played by defendants like the implying of defendant

no. 2 remains an issue of contention.


Order 6 Rule 12 - Implied contract or relation: Wherever any contract or any
relation between any person is to be implied from a series of letters or conversations
or otherwise from a number of circumstances, it shall be sufficient to allege such
21

contract or relation as a fact, and to refer generally to such letters, conversations or


circumstances without setting them out in detail. So, this rule has been properly

followed in the pleading because plaintiffs have referred all correspondences.


Order 6 Rule 14 - Pleading to be signed: The pleadings was signed by the party and

his pleader.
Order 6 Rule 15- Verification of pleadings: It was verified by the party at the
footby their own knowledge and their own information received and believed to be
true. The verification was signed by the person making it and stated the date on
which and the place at which it was signed. Plaintiff also verified the pleading while
furnishing an affidavit in support of his pleadings. Also, to mention here that as per
Section 26(2) of the Code of Civil Procedure, the requirement is that in every plaint
facts shall be proved by affidavit. Thus we can see that after the plaint there is an
affidavit, wherein the plaintiff affirms and declares that he is well conversant with the
facts as stated in the plaint, that the suit has been drafted by the counsel under the
instructions of the plaintiff, and have been read over to him. Further as per Order VI
Rule 15, the person verifying the pleadings should also submit an affidavit along with
it, and thus we can see in the present case thereafter there is an affidavit. Also, as per
sub rule 3 of this order requires that the person verifying should state the date and the
place at which it was signed. In the present case we see the plaintiff mentions the date
and the place in his verification in these terms verified in Delhi on this Xth Day of
January

Order 6 Rule 17 - Amendment of pleadings: It says that the Court may at any stage
of the proceedings allow either party to alter or amend his pleadings in such manner
and on such terms as may be just, and all such amendments shall be made as may be
necessary for the purpose of determining the real questions in controversy between
the parties, Provided that no application for amendment shall be allowed after the
trial has commenced, unless the Court comes to the conclusion that is spite of due
diligence, the party could not have raised the matter before the commencement of
trial. But in this case the pleadings were not amended.

Order VII: PLAINT

Order 7 rule 1 - Particulars to be contained in plaint: It says that the plaint shall
contain the following particulars:-22

(a) the name of the Court in which the suit is brought;


(b) the name, description and place of residence of the plaintiff;
(c) the name, description and place of residence of the defendant, so far as they can
be ascertained;
(d) where the plaintiff or the defendant is a minor or a person of unsound mind, a
statement to that effect;
(e) the facts constituting the cause of action and when it arose;
(f) the facts showing that the Court has jurisdiction ;
(g) the relief which the plaintiff claims;
(h) where the plaintiff has allowed a set-off or relinquished a portion of his claim, the
amount so allowed or relinquished ; and
(i) a statement of the value of the subject-matter of the suit for the purposes of
jurisdiction and of court-fees, so far as the case admits.
In this case all points (referred from (a) to (j)) were properly followed. Another
requirement of the plaint is that it should contain the facts constituting the cause of
action and when it arose; Applying this to the present case , we can see the plaint
states that the cause of action for filing the suit has arisen to the plaintiff against the
defendant on several occasions. The plaint consists of facts constituting the cause of
action and when it arose. Now, we can see an elaborate mention of cause of action,
this is so because the plaintiff wants to show that his suit is filled within the period of
limitation.
As per section 22 of the Limitation Act, 1963:
Continuing breaches and torts. In the case of a continuing breach of
contract or in the case of a continuing tort, a fresh period of limitation begins
to run at every moment of the time during which the breach or the tort, as the
case may be, continues.2

Order 7 Rule 7 - Relief to be specifically stated: In plaint relief was specifically


mentioned in the alternative form.--

Order IX: APPEARANCE OF PARTIES AND CONSEQUENCES OF NONAPPEARANCE

Order 9 Rule 1 - Parties to appear on day fixed in summons for defendants to


appear and answer: In the present case the parties could not be present toghther
2

Section 22, Limitation Act, 1963.


23

usually as only the plaintiff was available most of the times, thus the court had to

procced eex-parte after multiple summons.


Order 9 Rule 2 Dismissal of suit where summons ot served in consequence of
plaintiffs failure to pay cost: The provision states that when there is a failure to
serve summons upon the defendants on account of failure to pay court fees or deposit
postal charges the court may dismiss the suit. But in the present case the court allowed
for the plaintiff to file a fresh application for serving summons on account of failure

to pay charges for the service of notice to the defendant.


Order 9 Rule 4 Plaintiff may bring fresh suit or court may restore suit to file:
Under the provisions of the rule the court states that the court may permit for filling of
a fresh suit if it has a sufficient cause for failure as is in Order 9 rule 2. In the present
case the court allowed for the plaintiff to file a fresh application for serving summons

on account of failure to pay charges for the service of notice to the defendant.
Order 9 Rule 5 Dismissal of suit where plaintiff, after summons returned
unserved fails for (7 days) to apply for fresh summons: The suit may be dismissed
on the discretion of the court if the plaintiff is unable to file for an application of fresh
summons after the summons are left un-served. In the currrent case, the plaintiff did
file an application for fresh summons to be issues due to failure of serving summons

on defendants multiple times.


Order 9 Rule 6 Procedure when only plaintiff appears;
- (a) When summons are duly served Court may proceed Ex-parte
- (b) When summons not duly servedWhen the plaintiff and court despite mutiple efforts and within limitation have
failed to serve summons upon the defendant and he fails to appear the court may
order the parties to proceed ex-parte that is exactly what the court did in the
present case. It ordered for the parties to proceed ex-parte as the defendant did not

appear for the case.


Order 9 Rule 11: Procedure in case of non-attendance of one or more of several
defendants: The court in case of absence of one defendant may ask the other parties
to continue the suit without that defendant. In the present case the court proceed
without a defendant.

Order XIII: PRODUCTION, IMPOUNDING AND RETURN OF


DOCUMENTS

Order 13 Rule 1: Original Documents to be produced at or before the settlement


of issues: The provision states that the parties are supposed to submit and produce
24

before the settlement of issues, all the documentary evidence in original along with its
copies along with the Written statement or Plaint. The plaintiffs in the current case
attached all the original documents with the plaint the incorporation certificate etc.

Order XIV: SETTLEMENT OF ISSUES AND DETERMINATION OF SUIT


ON ISSUES OF LAW AND ON ISSUES AGREED UPON

Order 14 Rule 1: Framing of Issues: In the present case, the courts could not frame
issues as the parties withdrew the suit before the court could reach conclusion. The
court although ordered multiple times for the parties to be present so that the court
may proceed to frame issues. Also when the defendant makes no defence, the court
does not have to frame issues.

Order XV: DISPOSAL OF THE SUIT AT THE FIRST HEARING

Order 15 Rule 2: One of the several Defendants are not at issue: When there are
more than one defendant in a case and the parties are not at issue the court may pass a
separate decree to settle the parties and finally dispose it. Although the plaintiff claim
that the defendant no. 2 is an integral party and not just an agent but also responsible,
the defendant claims that the parties are not at issue.

Order XVII: ADJOURNMENTS

Order 17 Rule 1 - Court may grant time and adjourn hearing: It provides power
to court to grant time and adjourn hearing. It says that the Court may, if sufficient
cause is shown, at any stage of the suit, grant time to the parties or to any of them, and
may from time to time adjourn the hearing of the suit for reasons to be recorded in
writing: Provided that no such adjournment shall be granted more than three times to
a party during hearing of the suit. The court granted more than just enough time to the
parties to file documents and replication which extended to much beyond multiple last

opportunities.
Order 17 Rule 2- Costs of Adjournments: But Honble court failed to apply Sub
rule (2) and did not impose any cost on party because this sub rule says that in every
such case the Court shall fix a day for the further hearing of the suit, and shall make
such order as to costs occasioned by the adjournment or such higher costs as the Court
deems fit.

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Order XVIII: HEARING OF THE SUIT AND EXAMINATION OF


WITNESSES

Order 18 Rule 1 - Right to begin: In this case plaintiff had right to begin, that is why
plaintiff began because this rule says that the plaintiff has the right to begin unless the
defendant admits the facts alleged by the plaintiff and contends that either in point of
law or on some additional facts alleged by the defendant the plaintiff is not entitled to
any part of the relief which he seeks, in which case the defendant has the right to
begin.

Order XIX: AFFIDAVITS

Order 19 Rule 3 - Matters to which affidavits shall be confined: The plaintiff had
mentioned only those facts which were in his own knowledge.

Order XXIII: WITHDRAWAL AND ADJUSTMENTS OF SUITS

Order 23 Rule 1- Withdrawal of suit or abandonment of part of claim: The matter


was finally withdrawn by the plaintiff as per this rule, which states that a suit after its
institution may be withdrawn, by the plaintiff at any time. The plaintiff may abandon
the suit or any part of its claim at any time after institution of the suit. The plaintiff
can do it with the permission of the court and shall not be liable to pay costs in that
case unlike in cases where it may do it without the permission of the court, the court
may award costs. In the current case, the plaintiff withdraws the suit with the
permission of the court and the court dismissed it. The court did not award any costs.

Order XXXIX: TEMPORARY INJUNCTIONS AND INTERLOCUTORY


ORDERS
In issuing temporary injunctions the test to be applied are
(i)
(ii)
(iii)

whether the plaintiff has a prima facie case


whether the balance of convenience is in favor of the plaintiff and
whether the plaintiff would suffer irreparable injury if prayer for temporary
injunction is disallowed.3

Radhakrishnan v. Puranand AIR 1970 Manipur 37.


26

Rule 3 under Order 39 provides that the Court shall in granting injunction direct the
notice of the application for the same to the opposite party except where the object of
granting the injunction would be defeated by delay.4 One important aspect of Rule 3
of Order 39 is that under this rule a court merely decides whether to grant injunction
ex parte or after giving notice. If it decides to give notice the power is really exercised
under Rule 1 or Rule 2 of Order 39. If the court decides to pass the injunction order
without giving notice , then too the power of granting injunction really flows from the
same.5 Therefore in effect of Rule 3 merely lays down the procedure while Rule 1 and
Rule 2 together are repository of courts power.6

Order 39 Rule 1 - Cases in which temporary injunction may be granted: It says


that injunction can be granted if any property in dispute in a suit is in danger of being
wasted, damaged or alienated by any party to the suit, or wrongfully sold in execution
of a decree, or the defendant threatens, or intends, to remove or dispose of his
property with a view to defrauding his creditors, or the defendant threatens to
dispossess, the plaintiff or otherwise cause injury to the plaintiff in relation to any
property in dispute in the suit. In this case, defendants may have sold the goods i.e.

the property to third person that is why injunction was asked from court.
Order 39 Rule 2 - Injunction to restrain repetition or continuance of breach:
Defendants were continuously committing a breach of contract that is why plaintiffs

filed application under this rule and court orders for injunction.
Order 39 Rule 2A - Consequence of disobedience or breach of injunction: Even
after granting injunction in favour of plaintiffs, defendants did not comply with the
court order that is why plaintiff filed an application under this rules because this rule
says that order in the case of disobedience of any injunction granted or other order
made under rule 1 or rule 2 or breach of any of the terms on which the injunction was
granted or the order made, the Court granting the injunction or making the order, or
any Court to which the suit or proceeding is transferred, may order the property of the
person guilty of such disobedience or breach to be attached, and may also order such
person to be detained in the civil prison for a term not exceeding three months, unless
in the meantime the Court directs his release.
4
5

Order XXXIX Rule 3 , Code of Civil Procedure,1908.


BM Prasad , MULLA THE CODE OF CIVIL PROCEDURE , 17th ed. 2008 ,
p.319.
6 Airport Authority of India v. Paradise Hotel and Restaurant AIR 2002 Gau 146.
27

Order 39 Rule 3 - before granting injunction, court to direct notice to opposite


party: This rule is about ex parte injunction. It it appears that the object of granting
the injunction would be defeated by the delay, then court may pass ex parte injunction
or in other words ad interim injunction. In this case there was necessity that is why
Honble Court used this power and granted ad interim injunction. There was extreme
delay and difficulty in finding the defendant.

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VI. RESEARCHER COMMENTS


ISSUE OF AD INTERIM INJUNCTION

The researcher thinks that Honble High court was correct in granting ad
interim injunction because delay in granting injunction would have failed

the object of injunction.


Also, the present injunction satisfies the test because the plaintiffs had a
good prima facie case and had every likelihood to succeed on the merits of

their case.
There was a balance of convenience lied in favour of the plaintiffs and
against the defendants and the defendants agreed at the amount of money

they owed.
In case the ad-interim injunction as prayed for will not be granted, the
plaintiffs would have suffered irreparable loss and injury which can not be

compensated in terms of money and cost.


These above mentioned all three tests were get fulfilled in this case, that is
why we can say that Court was right in granting ad interim injunction.

ISSUE OF DELAY IN SERVING SUMMONS:

The court ordered for issue of summons more than 6 times and in multile
modes- via plantiff, registered post, courier and eventually by publication
in a newspaper. The court wasted months to proceed ex-parte. The
researcher thinks that the Honble High Court has been very linent with the

party and this results in pending litigation and burden on courts.


The court kept giving the parties extensions as the parties kept delaying the
suit.

ISSUE OF WITHDRAWAL OF SUIT:

The parties in the current case eventually ended up withdrawing the suit
and it took the plaintiff 9 years to realise the futility of litigating and

wasting money and time of the court and the parties.


The court has allowed for withdrawal of suit at any stage by the plaintiff
after institution of a suit. It makes the court find an easy escape and parties

29

on the other hand get away with wasting the limited resources and time of

judges and courts.


The courts must make suits time barred and should strictly adhere by the
same.

ISSUE OF SUMMARY PROCEEDINGS:

The objective of summary proceedings is to ensure that in some cases, in


which there is no defence, the judgement can be pronounced expeditiously
to save the parties and courts time and effort. The court should have taken
a suit for recovery under Order 37 - Summary Proceedings as the parties
engaged in litigation for more than 9 years and still could not reach a
conclusion, but ended up withdrawing the suit. In case of a summary
proceeding the parties could have reached a solution earlier and it would
have been a more efficient alternative.

ISSUE OF ADJOURNMENTS:

It is mandatory for the court to record reasons for adjournment. In many


of its orders in the present suit, the Court has not recorded reasons for
adjournment. It is mandatory for the court to record reasons for
adjournment but the courts have not done so.

ISSUE OF OUT OF COURT SETTLEMENT:

The court has rightfully complied with the orders under the civil procedure
code, however, there are certain problems identified in the orders. The
court has granted so many adjournments and extended a suit which was
instituted in 1999 to the year 2002. The court never looked into whether
the matter could have been amicably settled or not. If it would have, then it
could have proceeded under section 89 of the CODE OF CIVIL
PROCEDURE 1908 and referred the matter for mediation, arbitration,

conciliation or judicial settlement through Lok Adalat.


According to section 89, CODE OF CIVIL PROCEDURE 1908: where it
appears to the court that there exist elements of a settlement which may be
acceptable to the parties, the court shall formulate the terms of settlement
30

and give them to the parties for their observations and after receiving the
observation of the parties, the court may reformulate the terms of a
possible settlement and refer the same for different forms of alternate
dispute resolution such as mediation, arbitration, conciliation and judicial
settlement through Lok Adalat. Keeping in mind the delay that happens in
Courts it is imperative to resort to ADR mechanisms to end litigation
between parties at an early date. However, in the present suit, the court has
overlooked this provision.

31