The Delhi High Court on Wednesday held that no relief could be claimed against persons who were not privy to the settlement deed, on the basis of which summary proceedings under Order XXXVII of CPC were instituted, and that such persons could not be made a party to the proceedings.
In this regard, Justice Rajeev Endlaw said,
"A suit under Order XXXVII of the CPC is maintainable only if a claim within the ambit of Order XXXVII is made thereunder.
The plaintiffs having claimed reliefs in the suit against persons other than those privy to documents on the basis of which suit under Order XXXVII of the CPC has been filed, notwithstanding the suit having been entertained without noticing the said aspect by the learned Joint Registrar, the suit cannot be permitted to be treated as under Order XXXVII of the CPC."
The summary suit had been filed by Satya Prakash & Bros (P) Ltd., on the basis of a Settlement of Deal document which was allegedly signed by Piyoosh Goel on behalf of Qutab Realcon Pvt. Ltd., against dishonoured cheques issued by Qutab Realcon Pvt. Ltd.
Besides Qutab Realcon Pvt. Ltd. and Piyoosh Goel however, the Plaintiff had impleaded Abhishek Saraf, Hanuman Singh and Ravi Kumar, all Directors of Qutab Realcon Pvt. Ltd., as Defendants.
Stating that the aforesaid Defendants were unconnected to the matter and that summary proceedings were only maintainable if a claim within the ambit of Order XXXVII was made, the court said,
"I have straightaway enquired from the senior counsel for the plaintiffs, how the suit against other than those privy to the documents i.e. Receipt/Settlement of Deal and cheque(s), has been instituted under Order XXXVII of the CPC. Even if the defendants no.3 to 5, as Directors of defendant no.1 company, have signed any of the cheques, the same would not make them personally liable for the amount of the cheque."
Further holding that dropping the name of three directors from the proceedings at this stage will be of no avail, the court explained,
"The maintainability of the suit under Order XXXVII of the CPC has to be decided at the threshold. In fact, Order XXXVII Rule 2(b) requires the plaintiffs to expressly state that no relief, other than that falling within the ambit of Order XXXVII of the CPC, has been claimed.
The fact that a plea is required to be made, shows that the plaintiffs cannot make a claim besides that within the ambit of Order XXXVII of the CPC and the moment the plaintiffs make such a claim, the plaintiffs ought to have been ousted on the very first day from proceeding under Order XXXVII of the CPC and the mere fact that the learned Joint Registrar entertained the suit will not come in the way of this Court now correcting the mistake."
Rule 2(1)(b) of Order XXXVII states that a summary suit shall be instituted by presenting a plaint which shall contain "that no relief, which does not fall within the ambit of this rule, has been claimed in the plaint".
Accordingly, the application for holding summary proceedings was dismissed by the court with directions to list the case for framing of issues, if any.
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