Legal Battle Over Recovery Suit: Supreme Court Dismisses Appeal as Infructuous

The case of Anish M Rawther @ Anees Mohammed Rawther vs. Hafeez Ur Rahman & Ors. presented a complex legal battle regarding the recovery of a significant financial sum. The Supreme Court of India ultimately ruled the appeal as infructuous, putting an end to the dispute.

The dispute began when the respondents, the plaintiffs in the original suit, filed a recovery suit under Order XXXVII of the Code of Civil Procedure, 1908, seeking a sum of Rs. 1,04,16,576/- with interest. The appellant, who was the defendant in the trial court, entered appearance and filed an application for leave to defend. The trial court granted the leave to defend but imposed a condition that the defendant must deposit 50% of the suit claim. The appellant challenged this order before the Karnataka High Court, which dismissed the writ petition. Subsequently, the matter was taken to the Supreme Court through a Special Leave Petition (SLP), which was also dismissed.

Petitioner’s Arguments

The appellant primarily contended that the suit could not proceed due to the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 (IBC). Additionally, it was argued that the High Court had erred in directing the trial court to accept the memo submitted by the respondents for a decree under Order XXXVII Rule 3(6)(b) of the CPC.

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Respondent’s Arguments

The respondents argued that the appellant had failed to comply with the trial court’s direction to deposit 50% of the claim amount. Consequently, they submitted a memo requesting a summary judgment under Order XXXVII Rule 3(6)(b) of the CPC, which was initially rejected by the trial court. However, the High Court set aside this order and directed the trial court to accept the memo and proceed accordingly.

Supreme Court’s Observations

The Supreme Court noted that the appellant had not approached the High Court within the stipulated period for any variation in the order regarding security. The Court observed:

“We are not inclined to interfere with the impugned order passed by the High Court. The special leave petition is accordingly dismissed. However, it is open for the petitioners to approach the High Court within four weeks from today for variation of the order satisfying the High Court that he can provide adequate security in terms of the orders of the High Court.”

Despite this observation, the appellant did not take any action, leading to further proceedings in the trial court.

Final Verdict

The Supreme Court, while reviewing the case, found that the suit had already been decreed by the trial court on April 20, 2023, much before any interim stay was granted by the apex court. Since the suit had reached a finality and there was no indication that the decree had been challenged, the present appeal, which stemmed from an interim order, was rendered infructuous.

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Accordingly, the Supreme Court ruled:

“The Civil Appeal is, accordingly, dismissed as infructuous.”

Conclusion

This case highlights the procedural complexities of summary suits under Order XXXVII CPC and the implications of non-compliance with court orders. The Supreme Court’s ruling underscores the importance of adhering to procedural directives to avoid losing the opportunity for further legal recourse.

Petitioner Name: Anish M Rawther @ Anees Mohammed Rawther.
Respondent Name: Hafeez Ur Rahman & Ors..
Judgment By: Justice Vikram Nath, Justice Prashant Kumar Mishra.
Place Of Incident: Karnataka.
Judgment Date: 14-06-2024.

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