Final Order 1

Order Details: Other
Pdf Text: 1 Order in SJ 74/19 in Summary Suit 1412/18
IN THE BOMBAY CITY CIVIL COURT AT BOMBAY
SUMMONS FOR JUDGMENT NO. 74 OF 2019
IN
SUMMARY SUIT NO. 1412 OF 2018
CNR NO. : MHCC010023602019
Smt. Vijay Laxmi K. Purohit …. Plaintiff
V/s.
M/s. Ahuja Properties & Associates & Ors. …. Defendants
Appearance:
Adv. Ms. Preeti Gada for the Plaintiff.
Adv. Mr. Madhurkar Mulay for the Defendants.
CORAM : SMT. S.S. NAGUR,
JUDGE, (C.R.NO.04)
DATE : 07.01.2022
ORAL ORDER
(Dictated in open Court)
The Summons for Judgment is filed by the plaintiff to
decree the suit on the ground that the claim for recovery of the amount
is admitted. The Summons for Judgment is supported by Affidavit of
Mrs. Vijay Laxmi K. Purohit. The plaintiff has filed the suit against the
defendants for recovery of Rs.30,27,749/ along with interest at the rate
of 15% per annum.
2. The plaintiff stated that the defendant no. 1 is a
partnership firm carrying on business of construction and development.
The defendant nos. 2 and 3 are the partners and authorized signatories
of the defendant no. 1. They are responsible for daytoday affairs and
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2 Order in SJ 74/19 in Summary Suit 1412/18
management of the defendant no. 1. The defendant nos. 2 and 3
approached the plaintiff for friendly loan for their business. The plaintiff
has advanced friendly loan to defendant no. 1 Rs.17,00,000/ on
02.09.2015 and Rs.5,00,000/ on 18.11.2015. The defendants from
time to time paid interest at the rate of 15% per annum by cheque to
the plaintiff. The defendants failed to pay the interest on principal
amount of loan since 01.06.2016.
3. The plaintiff stated that she requested the defendants to
pay the interest or the principal amount. The defendant nos. 2 and 3
requested the plaintiff to bear with them since there was some liquidity
crunch. The defendants have issued cheque no. 496720 dated
30.09.2018 for the sum of Rs.22,00,000/ drawn on Saraswat Co
operative Bank. The said cheque was signed by the defendant no. 2 on
behalf of the defendant no. 1. The cheque was dishonoured on its
presentation with remark “Account Blocked”. The defendants did
assure plaintiff that they will pay the outstanding amount to the
plaintiff but failed to pay the loan and interest. Hence, the suit.
4. The defendants appeared and filed reply to the Summons
for Judgment. The defendants have objected on the ground that the suit
is not maintainable under Order XXXVII, Rule 2 of the Code of Civil
Procedure. The plaintiff is doing the business of money lending. The
defendants are not denying the issuance of cheque of
Rs.22,00,000/ The defendants in the reply stated that alleged cheque
was only issued at the plaintiff’s insistence as a collateral security to the
plaintiff in good faith and the same was not issued for payment of any
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3 Order in SJ 74/19 in Summary Suit 1412/18
legally enforceable debt. The defendants have prayed for unconditional
leave to defend, as the amount claimed by the plaintiff is disputed.
5. Heard Advocate Adv. Ms. Preeti Gada for the Plaintiff and
Advocate Mr.Madhurkar Mulay for the Defendants. Perused the
contents of the plaint, documents relied by the plaintiff and reply to the
Summons for Judgment.
6. Advocate for plaintiff has relied on authority reported in
Mahesh P. Raheja & Ors. Vs. Base Industries Group & Ors. in
Chamber Summons No. 488 of 2018 in Comm Execution
Application No. 63 of 2017 in Suit No. 119 of 2016 decided on
13th/22nd July 2018 (BHC). The Hon’ble High Court in para no. 36 has
stated the propositions for consideration of money lending business as
under :
(a) “Not every loan is axiomatically a moneylending transaction for
the purposes of the 1946 or the 2014 Acts. There is no such
presumption in law.
(b) It is doing of the 'business of moneylending' that attracts the
provisions of the statute. In interpreting the phrase, the correct
emphasis is on the word 'business', not 'moneylending'. It is the
word 'business', and not the expression 'moneylending', that is
determinative. Simply put, every instance of lending money is not
moneylending. Not every lender is a Shylock.
(c) To constitute 'business', a single isolated instance does not, and
even several isolated stray instances do not, constitute 'the business
of moneylending'. To be engaged in the 'business of money
lending', the activity must be systematic, regular, repetitive, and
continuous, and must generate an appreciable revenue. The fact
that the borrower is a stranger to the lender does not on its own
make the latter a 'moneylender'.
(d) A loan recovery action is not barred merely because there is a loan.
It has to be shown that the loan was part of 'the business of money
lending'.
(e) A plaintiff seeking a recovery of a loan is not required to show that
his suit is not barred by the Money Lenders Act. It is always for the
defendant who puts up moneylending as a defence to show that
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4 Order in SJ 74/19 in Summary Suit 1412/18
the transaction is forbidden by the Money Lenders Act.”
7. The defendants are seeking unconditional leave to defend
on the ground of money lending business of plaintiff without license,
suit not maintainable under Order XXXVII, Rule 2 of the Code of Civil
Procedure and the cheque was not issued by them for discharge of
liability, but it was issued for collateral security. The defendants didn’t
state anything about the collateral security and the purpose for which
the cheque was issued. The defendants are denying that they know the
plaintiff but they are not denying the issuance of cheque of series of
Rs.22,00,000/ to the plaintiff. The defendants have not stated the
transactions of money lending done by the plaintiff to prima facie show
that the plaintiff is doing such business without license.
8. The plaintiff has relied on the documents which shows that
plaintiff has paid the amount of Rs.22,00,000/ to the defendants. The
defendants have issued cheque of Rs.22,00,000/ on 30.09.2018. The
said cheque returned back with remark “Account Blocked”. The
defence raised by the defendants to seek unconditional leave on the
ground that it is not for discharge of any liability is not explained by the
defendants.
9. The defendants have to show the triable issue. The
defendants have to disclose the facts which will indicate the triable
issue to show that they have substantive defence to seek unconditional
leave to defend. The defence of the defendants about issuance of
cheque is not probable. The defendants have not explained for what
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collateral purpose the said cheque was issued to the plaintiff by way of
security. I have gone through the authority relied by the plaintiff. The
defendants in the defence have not stated the transactions of money
lending carried out by the plaintiff to show that she is doing money
lending business without license. The defendants are not entitled for
unconditional leave to defend the suit, but an opportunity to defend the
suit on conditional leave. The principal amount is Rs.22,00,000/. The
defendant no. 1 firm is doing the business of construction and
development. The defendant no. 1 is capable of deposit 50% of
Rs.22,00,000/ i.e. Rs.11,00,000/ (Rupees Eleven Lakh Only) to
defend the suit. The defendants are not entitled for unconditional leave
to defend. Hence, pass following order :
ORDER
1. The conditional leave is granted to the defendants to
defend the suit on deposit of Rs.11,00,000/
(Rs. Eleven Lakh Only) within one month from the
date of the order.
2. On payment of the above cost within the above period,
the defendants to file Written Statement within one
month.
3. Accordingly, the Summons for Judgment is disposed of.
(SMT.S.S.Nagur)
Date :07/01/2022 Judge
City Civil Court,
Greater Mumbai.
Pronounced on : 07.01.2022
Dictated on :07.01.2022
Transcribed on : 07.01.2022
Checked & Signed on : 07.01.2022
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CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER”
UPLOAD DATE TIME NAME OF STENOGRAPHER
10/01/2022 1.45 p.m. Prachi Y. Potdar
Stenographer – Grade I
Name of the Judge HHJ Smt. S.S. Nagur
(C.R.NO.4)
Date of Pronouncement of
Judgment/Order.
07/01/2022
Judgment/order signed by P.O on 07/01/2022
Judgment/order uploaded on 10/01/2022
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