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CASE TITLE – Anish M. Rawther @ Anees Mohammed Rawther v. Hafeez Ur Rahman & Ors.

CASE NUMBER – Civil Appeal No. 4120 of 2024

DATED ON – 14.06.2024

QUORUM – Justice Vikram Nath & Justice Prashant Kumar Mishra

 

FACTS OF THE CASE

This appeal has been preferred by the appellant/defendant challenging the Order passed by the High Court of Karnataka on 21^st March, 2022 in Writ Petition No. 10975 of 2020 (GM-CPC) whereby the High Court allowed the writ petition and set aside the Order dated 07th March 2020 passed by the Trial Court in Com. OS No. 1026 of 2018 and further directed the Trial Court to accept the memo dated 14th November 2019 which was submitted by the respondents/plaintiffs. The respondents/plaintiffs preferred a suit under Order XXXVII of Code of Civil Procedure, 1908 (henceforth ‘CPC’) against the appellants/defendants for recovery of Rs. 1,04,16,576/- with interest. The appellants/defendants entered appearance and filed application seeking leave to defend which was allowed by the Trial Court on 19th June 2019 with a direction to the appellants/defendants to deposit 50% of the suit claim. The said order was challenged before the High Court in Writ Petition No. 28349 of 2019 which was dismissed on 08th August 2019 against which an SLP (C) No. 20626 of 2019 was preferred by the appellants/defendants which came to be dismissed on 06th September 2019. The appellants/defendants had argued that in view of Section 14 of the Insolvency and Bankruptcy Code, 2016 (henceforth ‘IBC’), the moratorium has become operational, therefore, the suit cannot proceed. This argument was not accepted by the High Court and under the impugned order, the Trial Court was directed to accept the memo and pass appropriate orders.

 

ISSUE

Whether the Trial Court should accept the memo filed by the plaintiffs (respondents) under Order XXXVII of the Code of Civil Procedure, 1908.

LEGAL PROVISIONS

1. Order XXXVII of the Code of Civil Procedure, 1908 (CPC), deals with suits filed under the Summary Procedure. It allows plaintiffs to obtain a decree quickly if they have a strong case and the defendant has no real defense.
2. Section 14 of the Insolvency and Bankruptcy Code, 2016 (IBC), with the moratorium period that applies when a company is undergoing insolvency resolution.

 

COURT ANALYSIS AND JUDGEMENT

The Hon’ble Supreme Court noted that they had also passed an order on 01^st December, 2023 staying the impugned order, however, much prior to the interim order of the same Court, the suit itself was decided finally by passing a decree on 20^th April, 2023. It was not brought to the Court’s notice that the said decree had been challenged any further by the defendants. Thus, the Hon’ble Supreme Court concluded that for the present, the suit is not pending, and therefore, the present appeal which arises out of an interim order passed by the Trial Court during pendency of the suit, has now been rendered infructuous. The Civil Appeal was then accordingly, dismissed as infructuous.

 

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Judgement Reviewed by – Gnaneswarran Beemarao

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