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How to File Summary Suit under Order XXXVII of Code of Civil Procedure [CASE LAW]

Code of Civil Procedure - Order XXXVII - Summary Suits - if any part of amount claimed by the plaintiff in the suit is admitted by the defendant to be due from him, the leave to defend the suit shall be granted only if the amount so admitted is deposited by the defendant in the Court, notwithstanding the fact that the triable issue or a substantial defence is raised by the defendant.

Constitution of India - Articles 226 and 227 - The power of superintendence is intended to be used sparingly and only in appropriate cases for the purpose of keeping the subordinate Courts and the Tribunals within the bounds of their authorities. This power, however, is not available for correcting mere errors of law and fact. In an appropriate case where it is sufficiently demonstrated that grave injustice or failure of justice has occasioned and the Court or the Tribunal subordinate to the High Court has assumed a jurisdiction which it does not have or the jurisdiction though available has been exercised in a manner which would tantamount to overstepping the limits of jurisdiction. The High Court can step in to undo the wrong.
HIGH COURT OF JAMMU AND KASHMIR AT SRINAGAR
Coram: Hon’ble Mr Justice Sanjeev Kumar, Judge
OWP No. 2152/2018, IA No. 01/2018
Date of order: 30.11.2018
Habibullah vs Gulzar Hussain
Appearance: For Petitioner(s): Ms.Tabasum Zaffar, Advocate. For Respondent(s): Mr. M.A.Qayoom, Advocate.
1. Supervisory jurisdiction of this Court vested in terms of Section 104 of the Constitution of Jammu and Kashmir is invoked by the petitioner to assail the validity of order dated 29.10.2008, passed by the learned Principal District Judge, Kargil (hereinafter referred to as the ‘Trial Court’) whereby application of the petitioner/defendant seeking leave to defend in terms of Order XXXVII Rule 3 of Code of Civil Procedure has been rejected.
2. Briefly put, the background facts leading to the filing of the instant petition are that the respondent has filed a suit purportedly under the provisions of Order XXXVII of Code of Civil Procedure for recovery of Rs.25.00 lacs along with interest on the basis of Hundi executed by the petitioner. The learned Trial Court entertained the suit and issued summons to the petitioner in accordance with the procedures laid down in Order XXXVII. On being summoned, the petitioner caused his appearance and filed an application under Order XXXVII Rule 5 CPC seeking leave to defend. The said application was opposed by the respondent by filing objections. The respondent claimed that in view of non-disclosure of any cogent defence by the petitioner in the application, he (respondent) was entitled to judgment forthwith.
3. The Trial Court considered the application and vide its order dated 29th October,2018, impugned in this petition, granted the petitioner conditional leave to defend. The leave was granted subject to the petitioner depositing a sum of Rs.9.00 lacs by way of security in the form of cash in the Court. The conditional leave, as is apparent from the order impugned, was granted on the ground that the petitioner in the collateral criminal proceedings had admitted his liability to pay an amount of Rs.9.00 lacs to the respondent. This has been done by the trial Court apparently relying upon the second proviso to Order XXXVII Rule 3(5) of Code of Civil Procedure. The petitioner is aggrieved of the order impugned, whereby his application seeking leave to defend has been granted conditionally and is before this Court seeking exercise of power of superintendence vested in this Court by virtue of Section 104 of the Constitution of Jammu and Kashmir to quash the same.
4. Having heard learned counsel for the parties and perused the record, this Court is of the considered view that the petitioner has not been able to make out a case for exercise of power of superintendence vested in this Court by virtue of Section 104 of Constitution of Jammu and Kashmir. The power of superintendence vested in this Court, which is akin to Article 227 of the Constitution of India, is not a substitute for the revisional powers of this Court conferred by virtue of Section 115 of the Code of Civil Procedure.
5. The Hon’ble Supreme Court, in the case of Surya Dev Rai vs Ram Chander Rai and ors, reported as 2003 (6) SCC 675 has elaborately considered the impact of the amendment in Section 115 of the Code of Civil Procedure brought in by the Act 46 of 1999 w.e.f 01.07.2002, on the power and jurisdiction of the High Court to entertain the petition seeking a Writ of Certiorari under Article 226 of the Constitution of India or invoking the power of superintendence under Article 227 of the Constitution of India. It was noted that prior to the amendment in section 115 of CPC, the orders of the Civil Courts subordinate to High Courts, where the appeal was not provided were amenable to the revisional jurisdiction of the High Courts under Section 115 of Code of Civil Procedure, but with the amendment, many orders of the Civil Courts have been held to be non-revisable. It is in this context, the Hon’ble Supreme Court examined the question, as to whether an aggrieved person, in such circumstances, is completely deprived of the remedy of judicial review, if he has lost at the hands of original Court and the Appellate Court, though a case of gross failure of justice having been occasioned is made out. After threadbare discussion of the issue and the impact of amendment to Section 115 of CPC vis-à-vis the exercise of power by the High Court under Articles 226 and 227 of the Constitution of India, the Hon’ble Supreme Court summed up its conclusion in the following manner:
“(1) Amendment by Act No.46 of 1999 with effect from 01.07.2002 in Section 115 of Code of Civil Procedure cannot and does not affect in any manner the jurisdiction of the High Court under Articles 226 and 227 of the Constitution.
(2) Interlocutory orders, passed by the courts subordinate to the High Court, against which remedy of revision has been excluded by the CPC Amendment Act No. 46 of 1999 are nevertheless open to challenge in, and continue to be subject to, certiorari and supervisory jurisdiction of the High Court.
(3) Certiorari, under Article 226 of the Constitution, is issued for correcting gross errors of jurisdiction, i.e., when a subordinate court is found to have acted (i) without jurisdiction - by assuming jurisdiction where there exists none, or (ii) in excess of its jurisdiction – by overstepping or crossing the limits of jurisdiction, or (iii) acting in flagrant disregard of law or the rules of procedure or acting in violation of principles of natural justice where there is no procedure specified, and thereby occasioning failure of justice.
(4) Supervisory jurisdiction under Article 227 of the Constitution is exercised for keeping the subordinate courts within the bounds of their jurisdiction. When the subordinate Court has assumed a jurisdiction which it does not have or has failed to exercise a jurisdiction which it does have or the jurisdiction though available is being exercised by the Court in a manner not permitted by law and failure of justice or grave injustice has occasioned thereby, the High Court may step in to exercise its supervisory jurisdiction.
(5) Be it a writ of certiorari or the exercise of supervisory jurisdiction, none is available to correct mere errors of fact or of law unless the following requirements are satisfied : (i) the error is manifest and apparent on the face of the proceedings such as when it is based on clear ignorance or utter disregard of the provisions of law, and (iii) a grave injustice or gross failure of justice has occasioned thereby.
(6) A patent error is an error which is self-evident, i.e., which can be perceived or demonstrated without involving into any lengthy or complicated argument or a long-drawn process of reasoning. Where two inferences are reasonably possible and the subordinate court has chosen to take one view the error cannot be called gross or patent.
(7) The power to issue a writ of certiorari and the supervisory jurisdiction are to be exercised sparingly and only in appropriate cases where the judicial conscience of the High Court dictates it to act lest a gross failure of justice or grave injustice should occasion. Care, caution and circumspection need to be exercised, when any of the abovesaid two jurisdictions is sought to be invoked during the pendency of any suit or proceedings in a subordinate court and the error though calling for correction is yet capable of being corrected at the conclusion of the proceedings in an appeal or revision preferred there against and entertaining a petition invoking certiorari or supervisory jurisdiction of High Court would obstruct the smooth flow and/or early disposal of the suit or proceedings. The High Court may feel inclined to intervene where the error is such, as, if not corrected at that very moment, may become incapable of correction at a later stage and refusal to intervene would result in travesty of justice or where such refusal itself would result in prolonging of the lis.
(8) The High Court in exercise of certiorari or supervisory jurisdiction will not covert itself into a Court of Appeal and indulge in re-appreciation or evaluation of evidence or correct errors in drawing inferences or correct errors of mere formal or technical character.
(9) In practice, the parameters for exercising jurisdiction to issue a writ of certiorari and those calling for exercise of supervisory jurisdiction are almost similar and the width of jurisdiction exercised by the High Courts in India unlike English courts has almost obliterated the distinction between the two jurisdictions. While exercising jurisdiction to issue a writ of certiorari the High Court may annul or set aside the act, order or proceedings of the subordinate courts but cannot substitute its own decision in place thereof. In exercise of supervisory jurisdiction the High Court may not only give suitable directions so as to guide the subordinate court as to the manner in which it would act or proceed thereafter or afresh, the High Court may in appropriate cases itself make an order in supersession or substitution of the order of the subordinate court as the court should have made in the facts and circumstances of the case”.
6. While summing up the law and the parameters for the exercise of jurisdiction under Articles 226 or 227 of the Constitution of India, the Hon’ble Supreme Court noted that the broad principles and the parameters laid down were not exhausted and, therefore, cannot be put in a straightjacket formula.
7. To the similar extent are the observations made by the Hon’ble Supreme Court in the case of Shalini Shayam Shetty & anr vs Rajendra Shankar Pati, reported as (2010) 8 Supreme Court Cases 329l. In paragraph No.49 of the said judgment, the principles on the exercise of High Court’s jurisdiction under Article 227 of the Constitution of India, were reiterated, which paragraph reads thus:
“62. On an analysis of the aforesaid decisions of this Court, the following principles on the exercise of High Court's jurisdiction under Article 227 of the Constitution may be formulated:
(a) A petition under Article 226 of the Constitution is different from a petition under Article 227. The mode of exercise of power by High Court under these two Articles is also different.
(b) In any event, a petition under Article 227 cannot be called a writ petition. The history of the conferment of writ jurisdiction on High Courts is substantially different from the history of conferment of the power of Superintendence on the High Courts under Article 227 and have been discussed above.
(c) High Courts cannot, on the drop of a hat, in exercise of its power of superintendence under Article 227 of the Constitution, interfere with the orders of tribunals or Courts inferior to it. Nor can it, in exercise of this power, act as a Court of appeal over the orders of Court or tribunal subordinate to it. In cases where an alternative statutory mode of redressal has been provided, that would also operate as a restrain on the exercise of this power by the High Court.
(d) The parameters of interference by High Courts in exercise of its power of superintendence have been repeatedly laid down by this Court. In this regard the High Court must be guided by the principles laid down by the Constitution Bench of this Court in Waryam Singh (supra) and the principles in Waryam Singh (supra) have been repeatedly followed by subsequent Constitution Benches and various other decisions of this Court.
(e) According to the ratio in Waryam Singh (supra), followed in subsequent cases, the High Court in exercise of its jurisdiction of superintendence can interfere in order only to keep the tribunals and Courts subordinate to it, `within the bounds of their authority'.
(f) In order to ensure that law is followed by such tribunals and Courts by exercising jurisdiction which is vested in them and by not declining to exercise the jurisdiction which is vested in them.
(g) Apart from the situations pointed in (e) and (f), High Court can interfere in exercise of its power of superintendence when there has been a patent perversity in the orders of tribunals and Courts subordinate to it or where there has been a gross and manifest failure of justice or the basic principles of natural justice have been flouted.
(h) In exercise of its power of superintendence High Court cannot interfere to correct mere errors of law or fact or just because another view than the one taken by the tribunals or Courts subordinate to it, is a possible view. In other words the jurisdiction has to be very sparingly exercised.
(i) High Court's power of superintendence under Article 227 cannot be curtailed by any statute. It has been declared a part of the basic structure of the Constitution by the Constitution Bench of this Court in the case of L. Chandra Kumar vs. Union of India & others, reported in (1997) 3 SCC 261 and therefore abridgement by a Constitutional amendment is also very doubtful.
(j) It may be true that a statutory amendment of a rather cognate provision, like Section 115 of the Civil Procedure Code by the Civil Procedure Code (Amendment) Act, 1999 does not and cannot cut down the ambit of High Court's power under Article 227. At the same time, it must be remembered that such statutory amendment does not correspondingly expand the High Court's jurisdiction of superintendence under Article 227.
(k) The power is discretionary and has to be exercised on equitable principle. In an appropriate case, the power can be exercised suo motu.
(l) On a proper appreciation of the wide and unfettered power of the High Court under Article 227, it transpires that the main object of this Article is to keep strict administrative and judicial control by the High Court on the administration of justice within its territory.
(m) The object of superintendence, both administrative and judicial, is to maintain efficiency, smooth and orderly functioning of the entire machinery of justice in such a way as it does not bring it into any disrepute. The power of interference under this Article is to be kept to the minimum to ensure that the wheel of justice does not come to a halt and the fountain of justice remains pure and unpolluted in order to maintain public confidence in the functioning of the tribunals and Courts subordinate to High Court.
(n) This reserve and exceptional power of judicial intervention is not to be exercised just for grant of relief in individual cases but should be directed for promotion of public confidence in the administration of justice in the larger public interest whereas Article 226 is meant for protection of individual grievance. Therefore, the power under Article 227 may be unfettered but its exercise is subject to high degree of judicial discipline pointed out above.
(o) An improper and a frequent exercise of this power will be counter-productive and will divest this extraordinary power of its strength and vitality”.
8. Similar observations have been made in the case of Radhey Shyam and anr vs Chhabi Nath and ors, reported as (2015) 5 SCC 423. This was a case decided by the three Judge Bench of the Supreme Court on reference made by two Judges of the Supreme Court to consider the correctness of the law laid down in Surya Dev Rai’s case (supra) that the order of Civil Court was amenable to the Writ Jurisdiction under Article 226 of the Constitution of India. After surveying the law on the point, the Hon’ble Supreme Court, in paragraph 29 of the said judgment, concluded thus:
“Accordingly, we answer the question referred as follows:
(i) Judicial orders of civil court are not amenable to writ jurisdiction under Article 226 of the Constitution;
(ii) Jurisdiction under Article 227 is distinct from jurisdiction from jurisdiction under Article 226.
Contrary view in Surya Dev Rai is overruled."
9. From the discussion of the aforesaid three judgments, it is now established beyond the pale of any doubt that the orders of the Civil Courts are not amenable to Writ Jurisdiction under Article 226 of the Constitution, but could be interfered with under Article 227 of the Constitution, if the parameters laid down for the exercise of power in Surya Dev Rai’s case (supra) and Radhey Shyam’s case (supra) are met. The power of superintendence is intended to be used sparingly and only in appropriate cases for the purpose of keeping the subordinate Courts and the Tribunals within the bounds of their authorities. This power, however, is not available for correcting mere errors of law and fact. In an appropriate case where it is sufficiently demonstrated that grave injustice or failure of justice has occasioned and the Court or the Tribunal subordinate to the High Court has assumed a jurisdiction which it does not have or the jurisdiction though available has been exercised in a manner which would tantamount to overstepping the limits of jurisdiction. The High Court can step in to undo the wrong. It is in this backdrop of legal position that the facts of the instant case need to be examined.
10. The fact that the suit of the respondent has been entertained by the trial Court under Order XXXVII of Code of Civil Procedure is not in dispute. There is no procedural irregularity pointed out by the petitioner in following the provisions of Order XXXVII of Code of Civil Procedure. The petitioner has been validly served with the summons and application seeking leave to defend has also been accepted by the trial Court, though from the order impugned, it is not discernible as to on what basis and for what reason the leave has been granted. Since the respondent is not aggrieved of the order impugned, as such, this Court need not go into the aforesaid question. Needless to say, that grant of leave in a Summary Suit filed under Order XXXVII of Code of Civil Procedure is broadly governed by the principles as enumerated by the Hon’ble Supreme Court in the recent judgment passed in the case of IDBI Trusteeship Services Limited vs Hubtown Limited, reported as (2017) 1 Supreme Court Cases 568. Paragraph 17 of the said judgment reads as under:
“17. Accordingly, the principles stated in paragraph 8 of Mechelec’s case will now stand superseded, given the amendment of O.XXXVII R.3, and the binding decision of four judges in Milkhiram’s case, as follows:
i. If the defendant satisfies the Court that he has a substantial defence, that is, a defence that is likely to succeed, the plaintiff is not entitled to leave to sign judgment, and the defendant is entitled to unconditional leave to defend the suit;
ii. If the defendant raises triable issues indicating that he has a fair or reasonable defence, although not a positively good defence, the plaintiff is not entitled to sign judgment, and the defendant is ordinarily entitled to unconditional leave to defend;
iii. Even if the defendant raises triable issues, if a doubt is left with the trial judge about the defendant’s good faith, or the genuineness of the triable issues, the trial judge may impose conditions both as to time or mode of trial, as well as payment into court or furnishing security. Care must be taken to see that the object of the provisions to assist expeditious disposal of commercial causes is not defeated. Care must also be taken to see that such triable issues are not shut out by unduly severe orders as to deposit or security;
iv If the Defendant raises a defence which is plausible but improbable, the trial Judge may impose conditions as to time or mode of trial, as well as payment into court, or furnishing security. As such a defence does not raise triable issues, conditions as to deposit or security or both can extend to the entire principal sum together with such interest as the court feels the justice of the case requires.
v. If the Defendant has no substantial defence and/or raises no genuine triable issues, and the court finds such defence to be frivolous or vexatious, then leave to defend the suit shall be refused, and the plaintiff is entitled to judgment forthwith;
vi. If any part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit, (even if triable issues or a substantial defence is raised), shall not be granted unless the amount so admitted to be due is deposited by the defendant in court”.
11. While summing up the law on the point and laying down the principles as enumerated above, the Hon’ble Supreme Court considered the impact of amendment to Order XXXVII of Code of Civil Procedure Rule 3 made in the year 1976. It may be noted that similar amendment has been carried to Rule 3 of Order XXXVII of the State Code of Civil Procedure by Act XI of 1983 w.e.f 15.08.1983. The Hon’ble Supreme Court taking note of the amended provisions of Rule 3 of Order XXXVII of Code of Civil Procedure held that the principles laid down in paragraph 8 of Mechelec, (1976) 4 SCC 687 would stand superseded and stated the law and the principles to be followed having regard to the amended provisions of Order XXXVII Rule 7 of Code of Civil Procedure. As is apparent from the law laid down and the explicit provisions contained in second proviso, if any part of amount claimed by the plaintiff in the suit is admitted by the defendant to be due from him, the leave to defend the suit shall be granted only if the amount so admitted is deposited by the defendant in the Court, notwithstanding the fact that the triable issue or a substantial defence is raised by the defendant. It is this provision which has been invoked by the trial Court in the instant case to grant the conditional leave to defend.
12. Learned counsel for the petitioner vehemently submits that the petitioner had clearly demonstrated in his application that not only the triable issues were involved in the suit, but the petitioner had a substantial defence to offer. She, therefore, urges that the trial Court having accepted the plea of the petitioner in this regard should have granted the petitioner unconditional leave to defend. It is also contended that the admission, if any, made in the collateral criminal proceedings would not bind the petitioner in the suit. It is, thus, submitted that having regard to the averments made in the application seeking leave to defend, it cannot be said that any part of the claim of the respondent has been admitted by the petitioner.
13. Per contra, learned counsel for the respondent relying upon the judgment of the Supreme Court in the case of Southern Sales and Services and ors vs Sauermilch Design and Handels, (2008) 14 Supreme Court Cases 456 contends that in view of the amendment made to Order XXXVII of Code of Civil Procedure by virtue of Act XI of 1983 w.e.f 15.08.1983, the provision i.e, Rule 3 has been altered to provide that deposit of any admitted amount is now a condition precedent for grant of leave to defend in a suit filed under Order XXXVII of Code of Civil Procedure. He, therefore, submits that earlier concept of granting unconditional leave when a triable issue is raised on behalf of the defendant has been supplemented by the addition of a mandate imposed upon the defendant to deposit the admitted amount before he is granted leave to defend. He refers to the pleadings of his plaint to contend that the respondent has categorically referred to the admission made by the petitioner in a criminal complaint filed by him before the learned Chief Judicial Magistrate, Kargil wherein he has categorically admitted that he had borrowed a sum of Rs.12.00 lacs from the respondent, but has paid three lacs and, therefore, there is only an outstanding amount of Rs.9.00 lacs which is still payable.
14. Learned counsel appearing for the respondent, therefore, urges that in view of the petitioner having not denied the aforesaid averment in the plaint in his application seeking leave, the same should be deemed to have been admitted. It is, therefore, submitted that the trial Court committed no illegality in granting conditional leave to the petitioner as has been done in terms of the order impugned. Learned counsel, during the course of his arguments, also reminded this Court of the restrictive jurisdiction of superintendence to be exercised only in accordance with the set parameters laid down by the Hon’ble Supreme Court.
15. In the context of rival contentions and in the given facts of the case, the only question that begs determination is, whether the admission made by the petitioner in collateral criminal proceedings i.e a complaint before the learned CJM, Kargil in the instant case, could be taken as an admission of part of claim of the respondent as projected in the plaint and, therefore, attracting second proviso to Rule 3 of Order XXXVII of Code of Civil Procedure, making it mandatory for the petitioner to deposit the admitted amount for enabling him to avail of the leave to defend. Order XXXVII of Code of Civil Procedure does not define the term ‘Admission’. Admissions in civil law which are referable to many Rules of the Code of Civil Procedure can be conveniently and broadly put in following three categories:
“1. Actual admissions, oral or by documents;
2. the express or implied admissions from the pleadings or by non traverse by agreement;
3. By agreement or by notice”.
16. Order VIII Rule 5 of the Code of Civil Procedure deals with ‘specific denials’ and provides that every application of fact in the plaint if not denied specifically or by necessary implication, or stated to be not admitted in the pleadings of the defendants, shall be taken as admitted except as against a person under disability. There is, however, a proviso appended to sub rule 1 of Rule 5 of Order VIII to provide that Court may, in its discretion, require any fact so admitted to be proved otherwise than by such admission. Needless to say that all admissions made under whatever circumstances are not irreversible. The same can be withdrawn or explained by the maker. An Inference regarding admission could be drawn after considering the pleadings in entirety. The admissions could also be proved to be wrong.
17. Apart from the aforesaid provisions in the CPC, we have Order XII Rule 6 and Order XV Rule 1 which pertain to the judgment on admission. Similarly, Section 17 of the Evidence Act also deals with admission. This Court could have deliberated at some length on the form of admissions as the issue is of seminal importance, but in the given facts and circumstances, this Court has deliberately refrained from delving further in the matter. This is so as the facts of the instant case do not warrant such exercise. Even if, this Court accepts the plea of the petitioner that an admission made in the collateral proceedings, i.e. a criminal complaint filed by the petitioner in the instant case is voluntary and gratuitous and, therefore, cannot be taken to be admission of part of claim projected by the petitioner in the suit, even then the petitioner will have no case. This is for the reason that the purported admission made by the petitioner in the plaint filed by the petitioner before CJM Kargil is now a part of pleadings of the respondent. The respondent in his plaint has specifically referred to the aforesaid admission which averment made in paragraph 13 of the plaint has not been specifically denied by the petitioner.
18. There is no averment made in the application seeking leave to defend which could be construed as refuting the aforesaid claim with regard to the admission by the petitioner contained in the plaint. The total silence by the petitioner in the application on the aforesaid aspect would amount to admission (see Order VIII Rule 5). In this view of the matter, the trial Court was correct in coming to the conclusion that the petitioner had accepted the part of claim of the petitioner. In view of the aforesaid admission of fact made by the petitioner, the trial Court had no option other than granting the conditional leave, making it mandatory for the petitioner to deposit the admitted amount of Rs.9.00 lacs before he could enter his defence in the suit.
19. The other plea raised by the learned counsel on behalf of the petitioner that the petitioner was not physically and mentally fit to defend his interest in the suit and, therefore, learned trial Court should have first ascertained his physical and mental condition and appointed next friend before deciding his application for leave to appeal, is a plea too specious to be accepted. Learned Trial Court has very correctly taken note of the fact that the petitioner has filed a complaint before the learned CJM, Kargil and is appearing in two complaints filed by the respondent under Section 138 of Negotiable Instruments Act and is also pursuing his two petitions filed before this Court under Section 561 A Cr.P.C. In all these matters, the petitioner is either contesting or defending, as the case may be, without any next friend. Therefore, the plea of the petitioner has rightly not been accepted by the trial Court. That apart, this plea can be raised by the petitioner during the course of trial and the trial Court is not debarred to examine the petitioner and if it finds that he suffers from some disability which may impede his right to effectively contest the suit, it can appoint the next friend at any stage of the suit. Having said so, this Court does not find it a case of such a nature where this Court should exercise the power of its superintendence under Section 104 of the Constitution of Jammu and Kashmir. The petitioner has miserably failed to bring his case within the parameters laid down by the Hon’ble Supreme Court for the exercise of power of superintendence vested in this Court by virtue of Section 104 of Constitution of Jammu and Kashmir.
20. For all these reasons, I find no merit in this petition and the same is accordingly dismissed.

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