Full Judgement
Calcutta High Court
Babita Khemka vs City Life Retail Private Limited on 27 January, 2021
OC 32 & 33
ORDER SHEET
IA GA 2 of 2020
IA GA 1 of 2020
CS 95 of 2020
IN THE HIGH COURT AT CALCUTTA
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL DIVISION
BABITA KHEMKA
VS
CITY LIFE RETAIL PRIVATE LIMITED
BEFORE:
The Hon'ble JUSTICE DEBANGSU BASAK
Date: 27th January, 2021.
(Via Video Conference) Mr. Moinak Bose, Adv.
...for the plaintiff Mr. Prabhat Kumar Srivastava, Mrs. Debarati Das, Advs.
...for the defendant
The Court: Two applications are taken up for consideration analogously as they in
the same suit.
IA GA 1 of 2020 is an application of the plaintiff for judgment upon admission as
also for other interim reliefs. IA GA 2 of 2020 is an application by the defendant seeking
revocation of leave granted under Section 12A of the Commercial Courts Act, 2015.
Since the application of the defendant, if allowed, will go to the root of the
jurisdiction of the Court, it would be appropriate to consider the application of the
defendant first.
Learned advocate appearing for the defendant submits that leave under Section
12A of the Act of 2015 was obtained without an application being made for such
purpose. He submits that, initially, the plaintiff filed a suit being CS 87 of 2020 before
the regular Court. The same was withdrawn on September 17, 2020. He submits that,
there is no pleading in the plaint with regard to the jurisdiction of this Hon'ble Court.
Therefore, he submits that, the Court should not exercise any jurisdiction. 2
Learned advocate appearing for the plaintiff submits that, leave under Section
12A of the Act of 2015 was sought for and obtained while presenting the plaint. He
submits that, the parties to the suit are within the territorial jurisdiction of this Hon'ble
Court. Therefore, the question of lack of jurisdiction of the Court does not arise.
Section 12A of the Act of 2015 is as follows :
"12A. Pre-Institution Mediation and Settlement - (1) A suit, which does not
contemplate any urgent interim relief under this Act, shall not be instituted unless the
plaintiff exhausts the remedy of pre-institution mediation in accordance with such
manner and procedure as may be prescribed by rules made by the Central Government.
(2) The Central Government may, by notification, authorise the Authorities
constituted under the Legal Services Authorities Act, 1987 (39 of 1987) for the purposes
of pre-institution mediation.
(3) Notwithstanding anything contained in the Legal Services Authorities Act,
1987 (39 of 1987), the Authority authorised by the Central Government under sub-
section (2) shall complete the process of mediation within a period of three months from
the date of application made by the plaintiff under sub-section (1) :
Provided that the period of mediation may be extended for a further period of two
months with the consent of the parties :
Provided further that, the period during which the parties remained occupied with
the pre-institution mediation, such period shall not be computed for the purpose of
limitation under the Limitation Act, 1963 (36 of 1996).
(4) If the parties to the commercial dispute arrived at a settlement, the same shall
be reduced into writing and shall be signed by the parties to the dispute and the
mediator.
(5) The settlement arrived at under this section shall have the same status and
effect as if it is an arbitral award on agreed terms under sub-section (4) of section 30 of
the Arbitration and Conciliation Act, 1996 (26 of 1996)." 3
Section 12A of 2015 mandates that the plaintiffs to the lis undertakes a pre-
institution mediation unless, the plaintiff seeks urgent interim relief. In the facts of the
present case, simultaneously with the presentation of the plaint, the plaintiff applied for
urgent interim relief. The plaint was presented on September 25, 2020. The interim
application was affirmed before the Notary Public on September 29, 2020. Since the suit
contemplates an urgent interim relief, the plaintiff need not exhaust the remedy of pre-
institution mediation. Section 12A permits institution of a suit which contemplates
urgent interim relief without requiring the plaintiff to exhaust the remedy of pre-
institution mediation. The plaintiff having satisfied such pre-condition it was not
required to undertake a pre-institution mediation. Therefore, there is no infirmity in the
Court allowing the plaintiff to exhaust the remedy of pre-institution mediation.
The parties to the suit are within the within the Ordinary Original Civil
Jurisdiction of this Hon'ble Court. The parties to the suit are located within the
territorial jurisdiction of this Hon'ble Court. Therefore, it cannot be said that this Court
do not have territorial jurisdiction over the parties to the suit.
In such circumstances, the objections raised by the defendant in the application
being IA GA 2 of 2020 are of no substance.
In the petition being IA GA 1 of 2020 the plaintiff seeks judgment on admission
amongst other reliefs.
Although, directions for affidavits were given, the defendant chose to not file any
affidavit contesting such petition.
The claim of the plaintiff in the suit is on account of price of goods sold and
delivered.
It appears that by a writing dated February 17, 2020 the defendant acknowledged
that a sum of Rs. 70,61,603/-was due and payable by the defendant to the plaintiff as
on February 17, 2020. Such letter goes on to state the defendant settled the claim of the
plaintiff at Rs. 52,96,202/-. The defendant promised to pay the same by instalments.
The defendant prescribed the payment schedule.
4
The records made available to Court establishes that the defendant did not make
payment in terms of the writing dated February 17, 2020. The plaintiff issued a demand
notice through its advocate on July 27, 2020 to the defendant. In response thereto, the
defendant through its advocate acknowledged that settlement at Rs. 52,96,202/- was
arrived at. By such reply, the defendant assured the plaintiff that, once Covid-19
situation is stable and the defendant resumes its regular business, the defendant would
repay the entire amount.
In view of the discussions above, the only inference possible is that, the defendant
acknowledged and admitted a sum of Rs. 52,96,202/- to be due and payable by the
defendant to the plaintiff. In the application for judgment on admission the plaintiff
seeks a decree on admission for the sum of Rs. 70,61,603/- together with interest at the
rate of 18 % from February 17, 2020. According to the learned advocate for the plaintiff,
the admission in the letter dated September 1, 2020 of the advocate of the defendant
that the defendant shall repay the entire amount upon the Covid-19 situation becoming
stable and the defendant resuming regular business should be construed to mean that
the defendant admitted the claim of Rs. 70,61,603/- is concerned. In my view, such as
inference should not be drawn on affidavit evidence. It would be appropriate to permit
the plaintiff to establish the same at the trial.
In view of the admission of the sum of Rs. 52,96,202/- as contained in the letters
dated February 17, 2020 and September 1, 2020, it would be appropriate to pass a
decree for judgment on admission for such amount in favour of the plaintiff.
Learned advocate appearing for the plaintiff submits that, the invoices raised by
the plaintiff on the defendant, prescribes the rate of interest. Therefore, such rate of
interest should be awarded.
At this stage, I am not minded to award such rate of interest as prescribed in the
invoices. However, since the parties entered into a commercial transaction it would be
appropriate that the plaintiff should be paid some interest on the amount outstanding.
In such circumstances, it would be appropriate to direct that the decree to carry interest 5 at the rate of 12 % per annum considering that the transactions between the parties
were commercial.
In view of the discussion above, there will be a decree for a sum of Rs.
52,96,202/- payable by the defendant to the plaintiff. The plaintiff is also entitled to
interest at the rate of 12% per annum on and from today till realisation of the sum of Rs.
52,96,202/-. The balance claims of the plaintiff on account of principal and interest are
relegated to the suit.
IA GA 1 of 2020 and IA GA 2 of 2020 in CS 95 of 2020 are disposed of
accordingly.
(DEBANGSU BASAK, J.)
TR/
