Final Order 1

Order Details: Other
Pdf Text: 1 SJ 70/2019 in Sum. Suit 165/2016
IN THE BOMBAY CITY CIVIL COURT AT BOMBAY
SUMMONS FOR JUDGMENT NO. 70 OF 2019
IN
SUMMARY SUIT NO. 165 OF 2016
Dr. Ram Vithoba Shanbhag ...Plaintiff
Versus
M/s. Status Wealth Management through
Rajneesh Manohar Singh Walia & Ors. ...Defendants
Appearance:
Advocate Bhushan Joshi for Plaintiff.
Advocate Sneha Panchmukh for Defendants.
CORAM :SMT. S.S. NAGUR,
JUDGE,
(C.R.NO.13)
DATE : 01/10/2020
ORAL ORDER
1. The Summons for Judgment is filed by the plaintiff to decree
the suit on the ground that the claim of the plaintiff is admitted.
The Summons for Judgment is supported by affidavit of Dr. Ram
Vithoba Shanbhag. He has reiterated the contents of the plaint.
2. The defendant no. 1 replied the Summons for Judgment
through affidavit of Rajneesh Walia and has denied the contents of
Summons for Judgment in toto. The suit is not maintainable under
Order XXXVII of the Code of Civil Procedure, 1908. The suit is not
within limitation. It is based on Memorandum of Understanding
(for short, “MOU”) between the parties. There was no legal
outstanding amount due towards any enforceable debt. The MOU
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makes it clear that there is no liability on the part of Status Wealth
Management in case there is no growth. The plaintiff has claimed
exaggerated amount without understanding the terms and
conditions of the MOU. The Court has no jurisdiction to try and
decide the suit. The MOU was signed between the parties at
Gujarat. No cause of action arose within the jurisdiction of this
Court. The plaintiff has filed the proceeding under Section 138 of
the Negotiable Instruments Act before the Hon’ble Judicial
Magistrate at Ankleshwar. Hence, prayed to grant unconditional
leave to defend the suit.
3. The case of the plaintiff is that he filled profile on
23.03.2011 on defendant nos. 1 & 2 on the account of Status
Wealth Management and paid Rs. 500/ through cheque no.
575293 of State Bank of India, Naupada Branch, Thane. The
defendant nos. 1 and 2 are jointly looking after the franchise office
of defendant no. 3 dealing with commodity market. The MOU was
finalized on 26.03.2011. The plaintiff gave two cheques each
amounting to Rs. 2,00,000/ (Rs. Two Lakh) drawn on State Bank
of India, Naupada Branch, Thane to the defendant. As per the
terms of MOU, it was incumbent on the defendant to give 5%
growth since April, 2011 but in reality 5% growth monthly i.e. Rs.
20,000/ given since May, 2011 to August 2011 amounting to Rs.
80,000/ thereafter though monthly amount of Rs. 20,000/
towards 5% growth due and payable by the defendant, the
defendant failed and neglected to pay the said amount. The
defendant no. 1 issued cheque of Rs. 4,00,000/ (Rs. Four Lakh) of
Axix Bank dated 26.11.2012 of Akota Branch, Vadodara. On
deposit of the said cheque for clearance, it was dishonoured with a
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remark, “payment stopped by drawer”. The defendant no. 1
informed the plaintiff that he is going to deposit the cheque
amount. Therefore, the said cheque was withheld. The plaintiff
issued notice by email on 19.12.2012 and requested the
defendant no. 1 to pay Rs. 7,20,000/ (Rs. Seven Lakh Twenty
Thousand). The defendant failed to pay the amount. Therefore, the
proceeding under Section 138 of Negotiable Instruments Act was
filed before Ankleshwar Criminal Court.
4. The defence of the defendant to grant leave to defend is that
in the complaint filed by the plaintiff against him at Ankleshwar,
there is a different story that the plaintiff has given friendly loan to
the defendant no. 1. It is stated by the plaintiff that hand loan was
given to the defendant in personal capacity and in complaint name
of firm of defendant is mentioned as an accused.
5. The plaintiff in para no. 4 has stated about the Criminal
complaint filed at Vadodara Court under Section 138 of Negotiable
Instruments Act.
6. The defendant has also come with a defence that the suit is
barred by limitation. It is not disputed that the amount of Rs.
4,00,000/ (Rs. Four Lakh) on the basis of MOU is received by the
defendant. The defendant is also not disputing that he has issued a
cheque of Rs. 4,00,000/ (Rs. Four Lakh) drawn on Axix Bank to
the plaintiff and the said cheque is dishonoured. In respect of
Forum Shopping as contended by the defendant in his reply to
Summons for Judgment, the plaintiff has filed the present civil suit
for recovery of money and the criminal case is filed under Section
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138 of the Negotiable Instruments Act. The plaintiff has got the
civil as well as criminal remedy for dishonour of cheque. The
amount of recovery claimed by plaintiff in the suit is Rs.
11,80,800/.
7. Advocate for plaintiff has relied on following authorities :
i) IDBI Trusteeship Services Ltd Vs. Hubtown Ltd. : 2017
(1) SCC 568. The principles stated in Mikhiram’s case
as under :
“a. 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;
b. 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;
c. 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;
d. 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.
e. 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;
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f. 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.”
ii) Union Bank of India Vs. M/s. J. Raj & Co. & Ors. :
(2009) 3 Mh.L.J. 256.
that a delay in taking out summons for Judgment
beyond period of six months prescribed by Rule 227
does not automatically entitle the defendant to
unconditional leave to defend the suit; but it is
relevant factor to be considered in conjunction with
the nature of defence while granting conditional or
unconditional leave to defend the suit or refusing the
application for leave to defend.”
iii) Minda Vast Access System Private Ltd. Vs. Rainbow
Garnishers Private Limited : Writ Petition No. 2342 of
2017 of Hon’ble Bombay High Court dated 16th April,
2018.
that in the facts the petitioner can be entitled to
conditional leave to defend the suit on deposit of
substantial amount of the claim.
8. On the other hand, Advocate for defendant has relied on
following authorities :
i) Sudin Dilip Talaulikar Vs. Polycap Wires Private
Limited & Ors.: 2019 (7) SCC 577.
that the fact that there was commercial dealings
between the parties was the ground for the institution
of the Summary Suit but could not per se be
justification for grant of conditional leave sans proper
consideration of defence from materials on record.
ii) State Bank of Hyderabad Vs. Rabo Bank : 2015 (10)
SCC 521
that leave to defend shall always be granted to the
defendant when there is a triable issue as to the
meaning or correctness of the documents on which the
claim is bases or the alleged facts are of such nature
which entitle the defendant to interrogate or cross
examine the plaintiff or his witness. In the fact of the
case, the FIR was registered against the Manager of
Bank. The chargesheet was filed and allegations were
that the officers were not authorized to issue such co
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acceptances and the motive behind their illegal and
authorized action was to enable the constituent of the
respondent to get their bills discounted by jeopardizing
the interest of the appellant bank. In these facts, the
leave to defendant was granted.
iii) V.K. Enterprises & Anr. Vs. Shiva Steels : 2010 (9)
SCC 256.
that Order 37 of CPC has been included in the Code in
order to allow a person, who has a clear and
undisputed claim in respect of monetary dues, to
recover the dues quickly by a summary procedure
instead of taking the long route of a regular suit. If the
affidavit filed by defendant discloses a triable issue
that is at least plausible, leave should be granted, but
when the defence raised appears to be moonshine and
sham, unconditional leave to defend cannot be
granted.
9. The claim of the plaintiff is on the basis of terms and
conditions of MOU. The condition no. 5 will require adjudication.
The condition no. 5 of MOU i.e. ‘the growth will be paid by “First
Party” to “Second Party” on monthly basis’ will require the
issue to be decided whether the same is achieved by first party. It
is conditional terms. The defendant has raised the issue of legal
enforceable debt. Hence to decide the amount claimed by plaintiff
adjudication is necessary. The claim of the plaintiff is not admitted.
Hence, the principle in Mikhiram’s case that “b. 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” is applicable.
10. The plaintiff has claimed Rs. 11,80,800/ as per the
statement shown in para 5 of the plaint. Considering the nature of
the suit between the parties, it is a triable issue. Hence, the
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defendant is entitled for unconditional leave to defend and pass
following order :
ORDER
1. The defendant is granted unconditional
leave to defend the suit.
2. The defendant is directed to file Written
Statement within three months from the
date of the order.
3. Accordingly, Summons for Judgment is
disposed of.
(Smt. S.S. Nagur)
Judge,
City Civil Court,
Gr. Mumbai.
Dictated on : 01/10/2020.
Transcribed on : 06/10/2020.
Sign on :07/10/2020
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CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGEMENT/ORDER”
UPLOAD DATE TIME NAME OF STENOGRAPHER
20/10/2020 1.20 p.m. Prachi Y. Potdar (H.G.)
Name of the Judge HHJ Smt. S.S. Nagur
(CR No.13)
Date of Pronouncement of
Judgment/Order.
01/10/2020
Judgment/order signed by P.O on 07/10/2020
Judgment/order uploaded on 20/10/2020
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