“The Petitioners have been able to make out a strong prima facie Case”, said the Court; or, “the Respondents have been able to show reasonable defense or the existence of a dispute”. We do find such observations of Courts at the stage of Admissions of matters, like in Writ jurisdiction, or during applications for urgent interim reliefs in Suit proceedings, hearings in Summons for Judgment in Summary Suits, and qua “existence of dispute”, u/s 8(2)(a) of the Insolvency and Bankruptcy Code, 2016.
These expressions assumes critical significance, because, based on the legal import of these expressions, the Courts ventures to grant decisive interim reliefs at interim stage of the litigation; and in fact, also finally decide the lis, under various jurisdictions.
The Courts in such jurisdictions, endeavour to strike a delicate balance between two rival and elementary legal principles: (a) a party must have full opportunity to defend the allegation made against it, before subjecting it to the injurious Orders of the Court; and (b) the adversary must be disallowed from raising frivolous pleas and resorting to delaying strategies when the case is otherwise clear and conclusive.
Our Constitutional Courts have in their various rulings, dwelled upon the practical and meaningful import of these expressions, for the guidance of our Courts, in effective exercise of their jurisdiction. The present write up sought to illuminate on some of these rulings and try to further dissect the principles, for objective employment of these very principles.
What is a Prima facie Case. The Hon’ble Apex Court in a Case (AIR 1958 SC 79) before it, said, “A prima facie case does not mean a case proved to the hilt but a case which can be said to be established if the evidence which is led in support of the same were believed.”
In another Case (AIR 1993 SC 276), the Hon’ble Apex Court further improved upon the expression and said, “..on the facts before the court, there is probability of his being entitled to the relief asked for by the plaintiff/defendant.”
In Cases of plea of Mandatory Injunctions at Interim stage, or where almost final reliefs would be granted in Summary proceedings, the Law requires satisfaction of a higher standard than a prima facie case. In this backdrop, the principle inhere in the latin maxim, “Res Ipsa Loquitur” can safely be invoked. It says, the things speaks for itself. That is to say, the Case and the material / evidence placed on record, in support of it, are so revealing to the naked eyes, that satisfy the judicial conscience of the Court, warranting grant of reliefs prayed for.
The impugned Administrative acts and Orders may be tested at the touchtone of Wednesbury principle. It says, where the impugned act or Order defies logic, and is such which no person / decision-maker, on the material before him and within the framework of the law, would ever pass such Order / decision; as such the Impugned Order / action would shock the conscience of the Court.
However, notwithstanding the “revealing and prima facie Case” of the Plaintiffs, the said prima facie case also has to be tested to at the touchstone of “prima facie Case / defense” of the Defendant.
The Hon’ble Apex Court whilst dealing with (AIR 1971 SC 2600), Winding up jurisdiction of High Courts, have laid down certain parameters to test the defense of the Company. That is, (1) that the defense of the company is in good faith and one of substance; (2) the defense is likely to succeed in point of law; (3) the company adduces prima facie proof of the facts on which the defense depends.
The Hon’ble Apex Court, whilst dealing with dispute under Insolvency and Bankruptcy Code of 2016 (IBC), in the Case of Mobilox Innovations (AIR 2017 SC 4532), had the occasion to decode the meaning of “existence of dispute” contained in Sections 8(2)(a) and 9(5)(d) of said IBC. The Court said, “Therefore, all that the adjudicating authority is to see at this stage is whether there is a plausible contention which requires further investigation and that the "dispute" is not a patently feeble legal argument or an assertion of fact unsupported by evidence.”
Whilst decoding the above cherished principles, the Courts may adopt the following objective parameters, to arrive at finding, as to prima facie Case, or, the existence of a dispute. They are.
At the outset the Court must satisfy itself that it has jurisdiction to enter upon the lis presented to it.
Next. The Case advanced by the Plaintiff must be legally sustainable. The pleas advanced alleging the violation of right must not be confusing and ambiguous; and satisfy the ingredients of the rights, claimed. Similarly, the defense also must be rooted in law, that is, the defense so raised must be legally sustainable. This is because, the right or a litigation which is sought to be prosecuted, or a defense which is advanced, must be legally sustainable, before the pleas are to be tested at the touchstone of evidence.
And, even if the plea or the defense raised are contested, is such that may be determined from the Pleadings of the Parties, the Courts must determine it in summary proceeding, instead of denying relief on the grounds that the plea raises mixed question of law and fact. [2008 (154) DLT 80].
In fact, in view of the Author, the expression, “mixed question of law and fact” is misconceived. Every plea which is advanced, either raises a pure question of fact or pure question of Law, but not both. This is because, whence the Court ventures to decide the pure question of fact, the legal sanctity of the fact asserted, is presumed; and thence the Court proceeds to decide its truthfulness. And whence the Court ventures to decide the pure question of Law, the legal sanctity of the assertion of fact or plea, is itself under challenge, and the issue of its truthfulness or falsehood doesn’t arises. Therefore, it is a fallacy to term any issue as a mixed question of law and fact.
Further, the documents tendered in support of plea, inspire genuinity and leads to logical inference as to establishment of the right claimed and liability alleged.
Coming to testing the defense, or the existence of dispute, one of the means to ascertain the genuineness of the contentions of the adversary is to examine their conduct at the time of the concerned transaction and the period thereafter. The defense or the plea should not be in the nature of afterthought, i.e. a contention which has suddenly emerged after the filing of the litigation; and he never took, which he should have taken at the accrued point of time; or if delay is reasonably explained. There is a legal recognition of this test u/s 114 of Evidence Act, 1872. Section 114 of the Evidence Act mandates that a Court must be cognizant of the common course of natural things, human conduct and public and private business in their relationship to the facts of the particular case. Similarly, the hint contained u/s 16 of the Evidence Act may also be tested, which recognizes sanctity of customs and practices prevalent in business sphere.
Further, the test “Whether defense / plea raises a triable issue” may also be employed. The triable Issue arises when the Court frames an Issue based on plea and the supporting evidence placed on record by the adversary. Therefore, if a plea is raised and evidences are placed on record, which inspires credibility, the defense may be considered as genuine. However, if bare plea is raised without supporting evidence, the defense may be considered as frivolous, because if that were so then anyone could merely say it did not owe a debt. In a case before it (AIR 2009 Raj 7), the Hon’ble Rajasthan High Court have held that bare defense that Defendant did not executed subject negotiable instrument, is no defense.
By way of illustration, some indications, as to whether an issue answers the description of being a "triable issue", were given by the Supreme Court in the Raj Duggal case (AIR 1990 SC 2218), which come to this: existence of a fair dispute as to the meaning of a relevant document; dispute as to the amount actually due; or where the alleged facts are of such a nature as to entitle the defendant to interrogate the plaintiff; or to cross-examine his witnesses.
Further, there must be inherent consistency in the case put up by the adversary; and defense must not be adhoc. The Courts to examine the defense as if lacking in precision, inconsistent with undisputed contemporary documents or other statements by the same deponent.
Further, whilst evaluating the defense, the Courts may also take into consideration the statutory presumption, if any, is attached in favour of the Plaintiff, like we have u/ss 118 and 139 of Negotiable Instruments Act, 1881, which says that the law will presume that the subject Negotiable instrument / Cheque was made or drawn for consideration, or that, the subject Cheque was received in the discharge, in whole or in part, or any debt or other liability. [AIR 2010 SC 2885]
And the most important of all, the nature of defense must have an objective existence, the genuineness of which is capable of being assessed, and not that the defense is merely a cloud of objections.
Sandeep Jalan
Advocate
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