Full Judgment Text
NONREPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 9865 OF 2018
[Arising out of SLP (C) No.23737 of 2018]
M/s Empee Distilleries Limited & Ors. .. Appellant(s)
Versus
M/s Gimpex Private Ltd. & Anr. .. Respondent(s)
J U D G M E N T
[
Abhay Manohar Sapre, J.
1. Leave granted.
2. This appeal is filed against the judgment and
order dated 04.06.2018 passed by the High Court of
Judicature at Madras in Original Side Appeal
(Commercial Division) No.155 of 2018 whereby the
Division Bench of the High Court dismissed the
Signature Not Verified
appeal filed by the appellants herein and confirmed
Digitally signed by
ANITA MALHOTRA
Date: 2018.09.24
17:03:18 IST
Reason:
the order dated 28.03.2018 passed by the Single
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Judge of the High Court in Application No.2527 of
2018 in Application No.2215 of 2018 in C.S.
(Comm.Div.) No.161 of 2018.
3.
Few facts need mention infra for the disposal of
this appeal, which involves a short point.
4. The appellants are defendant Nos. 1 and 2
whereas respondent No.1 is the plaintiff in the civil
suit out of which this appeal arises.
5. On 06.03.2018, respondent No. 1 filed a civil
suit being C.S. (Comm.Div.) No. 161/2018 against
appellant Nos. 1, 2 and one more defendant on the
original civil jurisdiction side before the High Court at
Madras. The suit is inter alia founded on certain
commercial transactions executed between the
plaintiff and defendant Nos. 1 and 2 in relation to
supply of coal. It is filed for the recovery of
Rs.19,54,29,693/.
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6. Respondent No.1 (plaintiff), on 06.03.2018, filed
an application (A.No.2215/2018) along with the
plaint seeking prohibitory order against the Tamil
Nadu State Marketing Corporation (TASMAC)
(respondent No. 2 herein). In that application, it was
alleged that a sum of Rs.24,00,00,000/ (Rs. Twenty
four crores) is payable by respondent No. 2 to the
appellants (defendant Nos.1 and 2) and, therefore,
prohibitory order be passed against respondent No.2
herein restraining them from paying money to the
appellants (defendant Nos. 1 and 2) to the extent of
Rs.19,54,29,693/,i.e., the amount claimed in the
suit by the plaintiff.
7. On 13.03.2018, the Single Judge of the High
Court passed ex parte prohibitory interim order
against the appellants (defendant Nos. 1 and 2). The
appellants then filed an application on 20.03.2018
and sought vacation of the prohibitory
ex parte
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interim order dated 13.03.2018. By order dated
28.03.2018, the Single Judge, in substance, affirmed
the order dated 13.03.2018 and directed that it is
made applicable on TASMAC qua appellant Nos. 1
and 2 in relation to the supplies made up to
19.03.2018. In this way, both applications, i.e., one
filed by the plaintiff and the other filed by defendant
Nos. 1 and 2 were disposed of.
8. Defendant Nos. 1 and 2 (appellants herein) felt
aggrieved by the order dated 28.03.2018 filed appeal
(O.S.A. No. 155/2018) before the Division Bench. By
impugned order, the appeal was dismissed resulting
in upholding of the order dated 13.03.2018 and
28.03.2018, which gives rise to filing of this appeal
by way of special leave by defendant Nos. 1 and 2 in
this Court against the order of the Division Bench
dated 04.06.2018.
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9. Heard Mr. Mukul Rohtagi, learned senior
counsel appearing for the appellants and Mr. V. Giri,
learned senior counsel for the respondents.
10. Mr. Mukul Rohtagi, learned senior counsel
appearing for the appellants (defendant Nos. 1 and 2)
while assailing the legality and correctness of the
impugned order contended that it is not legally
sustainable inasmuch as it does not satisfy the
requirements of Order 37 Rule 5 of the Code of Civil
Procedure, 1908 (hereinafter referred to as “the
Code”) under which it was passed.
11. In the alternative and without prejudice to the
appellants’ rights to prosecute the suit on merits,
learned counsel also urged that in order to balance
the equities and to safeguard their rights, which are
subject matter of the suit and are not yet decided on
their merits, the Courts below at best could direct the
appellants to furnish adequate security to the extent
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of the claim in the suit and such order would have
been in conformity with the requirements of Order 37
Rule 5 of the Code.
12. In reply, Mr. V. Giri, learned senior counsel
supported the impugned order.
13. Having heard the learned counsel for the parties
and on perusal of the record of the case, we are
inclined to accept the alternative submission of the
learned senior counsel for the appellants as, in our
opinion, it has force and, if accepted, it would be in
the interest of both the parties and would be in
conformity with the requirements of Order 37 Rule 5
of the Code.
14. We, therefore, do not consider it necessary to go
into the merits of the first submission of the learned
senior counsel for the appellants and nor consider it
proper to comment upon the merits and demerits of
the case at this stage.
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15. It is for the reasons that firstly, the suit is
pending; secondly, contesting defendant Nos. 1 and 2
(appellants herein) have not yet filed their written
statements disclosing their defense; and thirdly, the
trial in the suit on merits is yet to commence.
16. In such circumstances, any observations made
by this Court on facts would cause prejudice to the
rights of the parties while prosecuting the suit on
merits.
17. We also heard the learned counsel on the
alternative submission.
18. Having heard learned counsel for the parties, we
are inclined to dispose of the appeal by issuing the
following directions for ensuring its compliance by
the parties:
1. The appellants (defendant nos. 1
and 2) shall furnish Bank Guarantee
for a sum of Rs.10 crores(Ten crores)
of any Nationalized Bank.
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2. The appellants shall also furnish
solvent security for balance suit
amount to the satisfaction of the
concerned Court.
3. On ensuring compliance of
condition Nos. 1 and 2 by the
appellants, the impugned order stands
set aside.
4. Let the compliance be done
within a period of 3 months by the
appellants as an outer limit.
19. The Court, which is seized of the suit, is
requested to dispose of the civil suit on merits in
accordance with law as expeditiously as possible
preferably within a period of one year without being
influenced by any of our observations made in this
order.
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20. In the light of the foregoing discussion and
directions, the appeal stands disposed of.
….….………………………………..J
(ABHAY MANOHAR SAPRE)
………..………………………………J.
(MOHAN M. SHANTANAGOUDAR)
New Delhi,
September 24, 2018
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