The Bombay High Court quashed a trial court's judgment that had granted the respondent unconditional leave to defend a summary suit. The petitioner, Mobile Arts S.A.L., sought recovery of outstanding dues for digital advertising services rendered to the respondent. The court held that the defense raised by the respondent was not substantial and that the emails exchanged between the parties acknowledged the debt. As such, the petitioner was entitled to a summary judgment.

1. Parties Involved:

• Petitioner: M/s. Mobile Arts S.A.L., a company registered in Lebanon, engaged in digital advertising services.
• Respondent: M/s. Mauj Mobile Pvt. Ltd., an Indian company involved in media and content marketing.

2. Agreement and Services:

• The parties entered into a Media Sales Insertion Order dated 15.01.2019, under which the petitioner provided digital advertising services for the respondent’s brands, "Gamesbond" and "Video Vogue."
• The petitioner raised three invoices totaling USD $115,550.69 for services rendered, which were acknowledged by the respondent.

3. Failure to Pay and Settlement Discussions:

• The respondent made part payment of USD $10,001.60 but failed to clear the remaining dues.
• Multiple email exchanges took place where the respondent acknowledged the debt but cited financial difficulties and proposed installment payments. The petitioner did not agree to the proposed settlement.

4. Legal Proceedings:

• After failed attempts at mediation, the petitioner filed a summary suit for recovery of dues. The trial court, however, granted the respondent unconditional leave to defend the suit.
• The petitioner challenged this ruling in the Bombay High Court.

5. High Court Ruling:

• The High Court ruled that the trial court erred in granting unconditional leave to defend, as the respondent’s defense was based on its financial inability rather than disputing the validity of the agreement or the services provided.
• The emails clearly established the respondent's liability, and the petitioner was entitled to a summary judgment.

Acts and Sections Discussed:

• Order XXXVII Rule 3 of the Code of Civil Procedure, 1908: Pertaining to summary suits and the conditions for granting leave to defend.
• Section 65B of the Indian Evidence Act, 1872: Related to the admissibility of electronic records (emails in this case).
• Section 12A of the Commercial Courts Act, 2015: Mandates pre-institution mediation before filing commercial disputes.

Ratio Decidendi:

The court held that the respondent's defense was insufficient as it did not raise any substantial issue of fact but merely cited financial inability. The petitioner had adequately established the validity of the agreement, the services rendered, and the debt due through documentary evidence, including emails exchanged between the parties. Thus, the respondent was not entitled to unconditional leave to defend the suit.

Subject:

#CommercialLaw #SummarySuit #BreachOfContract #HighCourtJudgment #DigitalAdvertising #DebtRecovery #IndianEvidenceAct #CPC