Calcutta HC Grants Summary Judgment In Commercial Suit After Defendants Forfeit Right To File Written Statement

The Calcutta High Court has held that in a commercial suit where defendants forfeit their right to file a written statement, they cannot set up any defence, and summary judgment can be granted where there is no real prospect of successfully defending the claim.

A Bench of Justice Aniruddha Roy decreed a commercial recovery suit in favour of De Converter India Private Limited, directing La Chemico Pvt Ltd and others to pay Rs. 34.62 lakh towards unpaid dues, along with interest at 6% per annum from April 19, 2023 till realisation.

At the outset, the Court noted that the suit stood “marked as undefended” due to the defendants' failure to file a written statement, and held that they had no opportunity to raise any defence.

“The court may give summary judgment, inter alia, against the defendant if it considers that the defendant has no real prospect of successfully defending the claim and if there is no other compelling reason why the claim should not be disposed of before recording of oral evidence," the court observed.

It emphasised that in the absence of a written statement, the defendants could not set up a defence or lead evidence beyond the pleadings.

“A defense unless proved in the trial cannot sustain in law. Therefore, in absence of any defense being taken there is no question of proving any defense,” the court said.

The dispute arose out of a commercial transaction in which De Converter India supplied goods to La Chemico, raising invoices aggregating Rs. 96.33 lakh, the last dated January 24, 2022. Out of this, part payments of Rs. 61.71 lakh were made, with the last payment on April 18, 2023, leaving a balance of ₹34.62 lakh.

The parties had also executed a jointly signed ledger and a balance confirmation dated September 3, 2022, acknowledging dues of over Rs. 35 lakh.

A legal notice issued on July 4, 2024 seeking recovery of ₹34.62 lakh was denied by the defendants in their reply dated July 25, 2024, following which the suit and an application for summary judgment under Order XIII-A of the Code of Civil Procedure were filed.

De Converter India argued that the signed ledger and balance confirmation constituted unequivocal admission of liability and that no contemporaneous objection had been raised regarding supply of goods. It contended that the defence of defective goods was vague, unsupported and an afterthought.

The defendants, on the other hand, alleged that the goods were defective, that transactions were governed by written purchase orders, and that the balance confirmation was fabricated, pointing to discrepancies in seals and alleging suppression of documents.

Rejecting these contentions, the Court held that in the absence of a written statement, the defendants could not set up any defence at this stage.

It further noted that the ledger and balance confirmation remained uncontroverted and constituted clear acknowledgment of liability. The Court held that even if earlier complaints from 2020–2021 were considered, the subsequent balance confirmation dated September 3, 2022 would prevail.

The bench reiterated that “parties cannot travel beyond its pleadings” and that no evidence can be led without a foundational defence on record.

It also underscored that the defendants, having forfeited their right to file a written statement, had no further opportunity to introduce pleadings or prove any defence, apart from limited cross-examination, which could not be used to set up a defence.

Explaining the object of the summary judgment mechanism under the Commercial Courts framework, the Court observed that it is intended to ensure speedy disposal where the plaintiff establishes a “crystal clear case” and the defence is absent or illusory.

Finding that the defendants had failed to establish any “credible” or “bona fide” defence and that their case was “moonshine and illusory,” the Court allowed the application for summary judgment.

Accordingly, the suit was decreed for Rs. 34,62,672 along with interest at 6% per annum from April 19, 2023 until payment, bringing the commercial dispute to a close.

For Petitioner (De Converter India Private Limited): Advocates Shuvasish Sengupta, Debraj Sahu, Antara Biswas, Tanushree Saha.

For Respondent (La Chemico Pvt Ltd): Advocates Sorosij Dasgupta, Sitikantha Mitra, Keshav Kumar Daruka, S. Chandrani Panigrahi.