Final Order 3

Order Details: Copy of Judgment
Pdf Text: CS No.100418 / 2020 Ram Raheja – Arun Katakia Judgment (Exh.19) 1 of 11
MHCC010010582020 Suit Filed on
: 27.01.2020
Evidence closed : 05.10.2023
Arguments Heard : 17.02.2024
Decided on : 17.02.2024
Duration : 04 Years, 21 Days
City Civil & Sessions Court, Greater Mumbai
Court Room No. 31
(Additional District Judge : Vijay S. Hingne, LL. M.)
Commercial Suit No. 100418 / 2020 Exhibit No. 19
Plaintiff : Ram B. Raheja
7 – B Vaibhav, 80 Bhulabhai Desai Road,
Mumbai 400 026.
VERSUS
Defendant : Arun Jasvantrai Katakia
E / 14 , A / 401, Dhavalgiri Housing Soc.,
S. V. Road, Ashok Van, Borivali (E),
Mumbai – 400 066.
Appearances
Plaintiff
: Adv. Shri Kasim Motorwala
Defendant
: Adv. Shri Chetan Pawar
Suit for Recovery of ₹. 3,60,000/-
************************************************************************
J U D G M E N T
(Delivered on this 6th Day of November, 2023)
Suit is preferred for recovery of . 3,60,000
₹
/- with
interest @ 24 % per annum.
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Case of Plaintiff :
2) Ram B. Raheja (hereinafter,
plaintiff) is husband of
Sumati Raheja. After death of Sumati, plaintiff is her Legal Heir.
Arun Jasvantrai Katakia (hereinafter,
defendant) had
borrowed amount from Sumati.
3) On requests of defendant, Sumati advanced loans to
parties. Details of loan and outstanding amount are as follows :
Sr. Date Name of party Loan
Amount (₹) Outstanding
Amount
1. 16.10.2007 M/s. Arun Kumar 2,00,000 40,000
2. 12.05.2008 M/s. Bharat Auto 2,50,000 2,00,000
3. 16.10.2007 M/s. N. K. Trading 2,00,000 40,000
4. 16.10.2007 M/s. Sai Pooja 2,00,000 60,000
5. 16.10.2007 M/s. S. S. Enterprises 1,00,000 20,000
Total 9,50,000/- 4,60,000/-
4) On 18.03.2019, defendant executed Undertaking and
admitted liability to repay . 3,60,000/- with interest @ 24 % to	₹
Sumati. Sarala Katakia (wife of defendant) is attesting witness to
Undertaking. Defendant also issued Cheque No. 655283 for
.3,60,000/- in favour of Sumati. However, said Cheque got	₹
dishonored. Thereafter, defendant made following part-payment :
Date Amount Cheque No. Remarks
20.01.2017 10,000 -- --
05.04.2017 10,000 -- --
01.08.2017 10,000 -- --
20.11.2017 10,000 -- --
02.01.2019 3,60,000 000085 Dishonoured
5) Hence, plaintiff issued Notice on 09.05.2019 for
outstanding . 3,60,000/- with interest @ 18 %. Said Notice was	₹
unclaimed by defendant.
Therefore, on 27.01.2020, plaintiff preferred
Commercial Suit 100418 / 2020, for it recovery.
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Defendant (Written Statement, Exh. 7, Dt. 12.03.2021) :
6) Defendant challenged the Suit and prayed for its
dismissal, on following grounds :
1. Plaintiff has not filed documents as, Probate or
Succession Certificate to show, he has right to recover
on behalf of deceased Sumati.
2. Defendant and his wife Sarala never admitted any
liability, as stated in the Undertaking Dt. 18.03.2009.
3. Memorandum of Understanding Dt. 18.03.2009 is
unregistered and insufficiently stamped document.
4. Defendant never issued any Cheque bearing No. 000085
Dt. 02.01.2019 for Rs. 3,60,000/-. Said Cheque was
issued blank and was given as security to the plaintiff.
5. In view of Sec. 3 and Article 21 of Limitation Act,
1963, Suit is barred by limitation.
6. In view of Sec. 9 (a) and Order 14 (2) and (2-B) of the
CPC, this Court lacks jurisdiction.
7. Pleading of plaintiff points that, he is unathorized
money lender. In absence of money lending license, the
transaction is invalid. Suit is barred by Sec. 2 (3) of the
Maharashtra Money Lending (Regulation) Act, 2014.
Evidence of Plaintiff :
7) Oral and documentary evidence of plaintiff :
PW1, Exh.11 : Evidence of plaintiff Ram Raheja
Exh. 17 : Original copy of Undertaking Dt. 18.03.2009.
Exh. 18 : Original copy of Cheque No. 000085 Dt. 02.01.2019
Exh. 19 : Original copy of Death Certificate of Sumati.
Exh. 20 : Office copy of Legal Notice Dt. 10.05.2019.
Exh. 21 : Unclaimed envelope of Exh. 20.
Exh. 22 : Copy of Legal Notice taken out from Exh. 21.
Exh. 23 : Evidence closure pursis Dt. 22.08.2023.
Defendant :
8) Perusal shows that, plaintiff filed evidence-affidavit of
Ram Raheja (Exh.11) on 25.08.2022. Since then, defendant never
appeared in the Suit. Hence, vide Order Dt. 01.08.2023, Suit
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proceeded without cross-examination of plaintiff witness.
Plaintiff closed his evidence on 22.08.2023 vide pursis at Exh. 23
(corrected Exhibit).
Plaintiff also filed application on 05.10.2023 at Exh. 24
(corrected Exhibit) stating that, defendant is not taking steps.
Considering age of plaintiff as 82 years, the evidence of
defendant was closed. On 06.11.2023, plaintiff filed written
arguments at Exh. 25 (corrected Exhibit).
Despite opportunities and time, defendant failed to take
steps. Hence, vide Order Dt. 15.02.2024, Suit was adjourned for
Judgment.
Points for determination :
9) Heard Adv. Shri Kasim Motorwala for plaintiff. Perused
Record. Perused written arguments (Exh. 25, 06.11.2023).
Despite opportunities and time, defendant failed to take steps.
Issues for determination, findings and reasons are as
follows :
Issues
Findings
1. Does the plaintiff prove that, he is
entitled to recover the amount of
Rs. 3,60,000/- from the defendant
by virtue of Undertaking Dt.
18.03.2009? If yes, at what rate of
interest?.......................................... In the Negative.
2 Whether Undertaking Dt.
18.03.2009 is valid, subsisting and
enforceable document against
defendant?................................. In the Negative.
3 Whether the plaintiff is entitled to
file present suit against
defendant?....................................... In the Negative.
4 Whether Suit is barred by
limitation? ...................................... In the Affirmative.
5 Whether this Court has jurisdiction
to entertain and try and
Suit?................................................ In the Negative.
6 Whether the Suit is not
maintainable as per provisions of
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the Maharashtra Money Lending
(Regulation ) Act, 2014?................. In the Negative.
7 What Order as to costs?.................. As Final Order.
8. What Order and Decree?…….…... As Final Order.
R E A S O N S
10) Plaintiff Ram Raheja (PW1, Exh.11) deposed in
accordance with pleadings from Plaint and claimed that,
defendants have deliberately avoided repayment.
Reasons as to Issues No. 5, No. 3 and No. 2 :
5 Whether this Court has jurisdiction to try and Suit?
3 Whether the plaintiff is entitled to file present suit?
11) Plaintiff has preferred present suit as Commercial Suit.
Hence, it is necessary for Plaintiff to satisfy ingredients of Sec. 2
(1) (C) of the Commercial Courts Act, 2015. For convenience,
relevant provision is re-produced :-
(c) “commercial dispute” means a dispute arising
out of--
(i) Ordinary transactions of merchants, bankers,
financiers and traders such as those relating to
mercantile documents, including enforcement
and interpretation of such documents;
(ii) Export or import of merchandise or services;
(iii) Issues relating to admiralty and maritime law;
(iv) Transactions relating to aircraft, aircraft engines
(v) Carriage of goods;
(vi) Construction and infrastructure contracts…..
(vii) Agreements relating to immovable property ….
(viii) Franchising agreements;
(ix) Distribution and licensing agreements;
(x) Management and consultancy agreements;
(xi) Joint venture agreements;
(xii) Shareholders agreements;
(xiii) Subscription and investment agreements….
(xiv) Mercantile agency and mercantile usage;
(xv) Partnership agreements;
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(xvi) Technology development agreements;
(xvii) Intellectual property rights …..
(xviii) Agreements for sale of goods or provision ...
(xix) Exploitation of oil and gas reserves ….
(xx) Insurance and re-insurance;
(xxi) Contracts of agency ...
(xxii) Such other commercial disputes as may be
notified by the Central Government.
Thus, for dispute to be called as,
commercial dispute, it is
necessary that,
Disputed transaction must be …..
1. Between merchants, bankers, financiers and traders
2. Relating to mercantile documents.
3. Relating to, bank, finance, trade.
It is in this backdrop, pleadings and evidence of plaintiff requires
discussion.
No transactions of merchants, bankers, financiers and traders :
12) Plaintiff is claiming that, she advanced loan to
defendants. In Para No. 1 and No. 2 of the Plaint, plaintiff has
pleaded as follows :
1. The Plaintiff states that, by virtue of an Undertaking
dated 18 / 3 /2009 executed in favour of Mrs. Sumati R.
Raheja, the wife of the Plaintiff, the Defendant assured
and assumed the liabilities and agreed to pay advanced
loans as detailed under :-
.
.
In backdrop of aforesaid provision and above pleading, following
facts are ascertained :
1. Throughout pleading, plaintiff came up with case that,
this is only transaction between Sumati and defendant.
2. Plaintiff did not disclosed profession / source of income
of Sumati.
3. It is not case of plaintiff that, Sumati is in business of
providing financial help to numerous persons like
defendant and that she is having license to that effect.
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4. It is not case of plaintiff that, Sumati is in business of
authorised money lending.
Thereby, it is not specific case of plaintiff that, Sumati is
merchant or
banker or
financier or
trader.
Sole loan-transaction :
13) Sumati is not merchant / businessman / banker. In
absence of valid money lending license issued by Government in
favour of Sumati, sole transaction will not be commercial
transaction under Sec. 2 (1) (C) of the Commercial Courts Act.
Utilization of loan amount :
14) It is not case of plaintiff that, said amount was utilized
by defendants for specific commercial activity. Nowhere plaintiff
has pleaded as to for what purpose defendant used said money.
So, in absence of requisite pleading, it is held that, alleged loan
amount was not of commercial nature.
When the loan was provided :
15) Plaintiff has maintained absolute silence as to when
Sumati handed over the loan to the defendants. Plaintiff has not
disclosed the date and mode of advancing loan.
Loan to third party :
16) From Undertaking, it appears that, on the assurance of
defendant, Sumati has provided loan to five entities / strangers.
However, there is no pleading as to why the loan was provided to
third party on assurance of defendant.
Occupation of Sumati :
17) As per plaintiff, Sumati has advanced Rs. 9,50,000/- to
the parties. Though the plaintiff has not disclosed the date on
which this loan was advanced, however from Undertaking it is
held that, the loan was advanced prior to 2009. In 2009, this
amount was certainly huge amount. So, it must have been
reflected in the Income Tax of Sumati. However, the plaintiff has
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not adduced any such evidence. Further, plaintiff has also not
disclosed source of Sumati, on the basis of which she provided
such huge loan amount.
No mercantile documents :
18) Plaintiff has annexed list of documents at Page No. 11
of the Plaint, which are as follows :
1. Undertaking Dt. 18.03.2009 issued by defendant.
2. Cheque No. 000085 Dt. 02.01.2019 for . 3,60,000/-
₹
allegedly issued by defendant in favour of Sumati.
When plaintiff has not established that, Sumati is merchant or
banker or financier or trader, then aforesaid documents cannot be
said to be mercantile documents.
Conclusion
19) Overall facts points that, transaction is not of
commercial nature but is sole loan transaction. Therefore, the Suit
is hit for non-compliance of Sec. 2 (1) (C) of the Commercial
Courts Act, 2015. Therefore, the Suit is not maintainable. Hence,
the issues are so answered.
Reasons as to Issue No. 4 :
4 Whether the Suit is barred by limitation?
20) In present case, the plaintiff is relying upon Undertaking
Dt. 18.03.2009 (Exh. 17) executed by defendant.
Defendant contended that, Suit filed on this Undertaking
Dt. 18.03.2009 is barred by limitation.
21) Limitation for recovery Suit, based on any instrument, is
of three years.
So, Undertaking, being Dt. 17.03.2009, then three years
limitation for the plaintiff to prefer the recovery Suit, will
conclude on 16.03.2012.
However, plaintiff has preferred the Suit on 27.01.2020.
So, Suit being timer-barred, is not maintainable.
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Plaintiff contended that, defendant has issued Cheque
No. 655283, Dt.02.01.2019 for . 3,60,000/-. Plaintiff has filed	₹
said Cheque at
Exh. 18. According to plaintiff, thereby, defendant
has renewed the limitation of 3 years, which now will
recommence from 03.01.2019 and will conclude on 02.01.2022.
Suit being filed on 27.01.2020, is within limitation.
22) Regarding Cheque at
Exh. 18, relevant Para No. 4 of the
Plaint (Exh.1) and evidence-affidavit (Exh. 11), reads as follows :
4. I state that pursuant thereto the Defendant issued a
Cheque bearing No. 655283 for Rs. 3,60,000/- drawn on
Greater Bombay Co-op. Bank in favour of Mrs. Sumati
R. Raheja, however said Cheque was returned
dishonored when presented for encashment.
It is not the case of plaintiff that, the defendant handed over said
Cheque to Plaintiff, on behalf of Sumati. So, above pleading
points that,
said Cheque was handed over or must have been
handed over by the defendant to Sumati.
23) Plaintiff has filed Death Certificate of Sumati at Exh.
19. Said Certificate mentions that, Sumati died on 09.09.2017.
Question arises as, when Sumati died on 09.09.2017,
then how come defendant issued Cheque Dt. 02.01.2019 in the
name of Sumati and how come, plaintiff accepted the cheque in
the name of deceased wife.
24) When defendant is specifically challenging that, no such
Cheque was issued for repayment of debt and when defendant is
further challenging the legal status of said Cheque, then, plaintiff
ought to have explained as to on what date the defendant handed
over the Cheque to the plaintiff and as to why the plaintiff
accepted said Cheque in the name of deceased wife.
In absence of any explanation, defense by defendant
that, Cheque do not represent legally enforceable debt, sustains.
Therefore, cheque will not have effect of bringing the
suit within limitation.
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Reasons as to Issues No. 2 :
2 Whether Undertaking Dt. 18.03.2009 is valid, subsisting
and enforceable document against the defendant?
25) Plaintiff has relied upon the Undertaking Dt.
18.03.2009. Plaintiff filed its original copy at Exh. 17.
Defendant though filed Written Statement and has
challenged the execution of said document, however the
defendant did not cross examined the plaintiff on said document.
Thereby, claim of plaintiff that, said Undertaking bears
signature of Arun Katakia and his wife Sarla Katakia, has gone
unchallenged.
As defendant has failed to cross-examine plaintiff and
as there is nothing suspicious about the Undertaking at Exh. 17, it
is held that, the plaintiff has proved its execution.
Being unchallenged, other defenses raised by defendant
that Undertaking is unregistered or insufficiently stamped, looses
its importance.
However, limitation for enforcement of any
Undertaking, relating to recovery, is of three years. In present
case, Undertaking is Dt. 18.03.2009 and it is being enforced
through Suit filed on 27.01.2020. For lapse of time, Undertaking
now has become unenforceable instrument. Therefore, Point No.
2 is answered in Negative.
Reasons as to Issue No. 6 :
6 Whether the Suit is not maintainable as per provisions
of the Maharashtra Money Lending (Regulation ) Act,
2014?
26) Plaintiff is coming with simple loan transaction. As it is
defendant, who is claiming that the suit is hit by money lenders
Act, than the burden in on defendant to prove said fact. However,
defendant did not plead or adduced any evidence which will show
that, the plaintiff is involved in repeated monetary transactions
with numerous persons. For want of evidence, it cannot be held
that, plaintiff is unauthorised money lender. Hence, issue is so
answered.
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Reasons as to Issue No. 1 :
1. Does plaintiff prove that, he is entitled to recover the
amount of ₹. 3,60,000/- from the defendant?
7 What Order as to costs?
8. What Order and Decree?
27) Above facts shows that, undertaking Dated 18.03.2009
has become unenforceable instrument. Suit is barred by
limitation. Suit is not maintainable as Commercial Suit.
Therefore, no relief can be granted to the plaintiff.
Hence, Issue No.1 is so answered.
Resultant, the Suit is disposed off, by following order.
ORDER
1. Commercial Suit No. 100418 / 2020, Ram Raheja Vs
Arun Katakia, is dismissed with cost.
2. Decree be drawn up accordingly.
3. Judgment dictated and pronounced in Open Court.
4. Plaintiff be informed about its right to challenge this
Judgment and period of limitation, for the same.
5. After compliance and period of Appeal, Shirestedar and
AS to consign Record of the Suit, to Record Room.
Mumbai
Dated : 17.02.2024 (Vijay S. Hingne)
Additional District Judge,
Court Room No.31 - Commercial Court,
City Civil & Sessions Court,
Mazgaon, Greater Mumbai
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