Interim Order 1

Order Details: Copy of Judgment
Pdf Text: 1 Commercial SU—86321 in SJ12821
MHCC010036722020
Presented on : 18.07.2020
Registered on : 30.07.2020
Decided on : 16.06.2022
Duration : 01Y 10M 17D
IN THE CITY CIVIL COURT AT MUMBAI.
SUMMONS FOR JUDGMENT No.128 OF 2021
(CNR No.MHCC010082992021)
IN
COMMERCIAL SUIT No.863 OF 2021
(CNR No.MHCC010036722020)
Zaverben Gangji Gala }
(through Powers of Attorney holder }
Tokarshi Gangji Gala) }
Indian Inhabitant, Occupation: Housewife, }
residing at 101, Amartary Building No.4, }
Patel Wadi, New Nagardas Cross Road, }
Andheri(East), Mumbai400 069 }...PLAINTIFF
VERSUS
Hiten Hirji Gala }
having his address at Unit No.20, }
Shilpin Centre, Ground Floor, 40, }
G.D. Ambedkar Road, Near Wadala }
Telephone Exchange, Wadala, }
Mumbai400 031. }...DEFENDANT
Shri.Rakesh Agrawal, learned advocate for the plaintiff.
Shri.Neel Gala, learned advocate for Defendant.
CORAM : HIS HONOUR JUDGE SHRI.N.P.TRIBHUWAN (C.R.NO.32)
J U D G M E N T
(Delivered on 16/06/2022)
1. This is suit for recovery of Rs.12,93,650/.
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2. The case of the plaintiff is that she is Senior Citizen.
Defendant is an individual and carrying on business in the name and
style “Jyoti Caterers”. In December 2014, defendant approached to the
plaintiff through R. H. Associates (a partnership firm) and requested to
give financial assistance by way of loan of Rs.10 Lakh. Defendant
agreed to pay interest on principle amount of Rs.10 Lakh @ 1.05% per
month. Accordingly, on 17.12.2014 plaintiff has paid Rs.10 Lakh to
defendant through cheque. On the same day defendant has executed
promissory note in her favour, whereby defendant promised to pay the
said amount on demand with interest @ of 1.05% p.a. until payment of
the entire amount.
3. Defendant has paid interest on the principle amount upto
31.03.2018 as follows:
Period Cheque cleared
on
Interest Rupees.
17.12.2014 to 31.03.2015 30.03.2015 36,750/
01.04.2015 to 30.09.2016 30.09.2015 64,050/
01.10.2015 to 31.03.2016 29.03.2016 64,050/
01.04.2016 to 30.09.2016 30.09.2016 64,050/
01.10.2016 to 31.03.2017 30.03.2017 63,700/
01.04.2017 to 30.09.2017 04.10.2017 64,050/
01.10.2017 to 31.03.2018 16.04.2018 63,700/
4. Defendant failed to make payment of interest from
01.04.2018 till filing of this suit. In September 2019 plaintiff and her
son contacted partners of R.H. Associates and requested them to
communicate plaintiff’s request to defendant to pay interest. All
attempts of plaintiff to contact defendant are failed. Despite several
demands and reminders for payment of interest, the defendant failed
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and neglected to pay the same under the promissory note.
5. On 05.02.2020 plaintiff has sent notice to the defendant
through advocate and therein demanded principle amount of Rs.10
Lakh together with interest of Rs.2,36,600/ from 01.04.2018 to
05.02.2020. Defendant given reply to notice through advocate on
14.02.2020. In the reply notice defendant contended that i) there is no
privity of contract between plaintiff and defendant, ii) Alleged
transaction was between alleged associates and plaintiff, iii) R.H.
Associates has purportedly defaulted in payment through various
lenders, iv) defendant is entitled to recover certain amount from R. H.
Associates, v) Claim of plaintiff is time barred, vi) falsely sought
inspection of the documents, vii) defendant has purportedly offered
lumpsum settlement of all lenders of R.H. Associates, vii) R.H.
Associates is instrumental to default in the entire transaction.
6. Plaintiff further contended that defendant has raised
various false and baseless allegations in letter dtd.14/02/2020.
Defendant has not denied in its reply that he has received a sum of
Rs.10 Lakh under promissory note dtd.17.12.2014. So also he has not
denied that he made payment towards interest till 31/03/2018.
7. In pursuance of summons, defendant appeared. Hence,
plaintiff took out summons for judgment. It was also served on
defendant. Defendant filed his affidavit in reply to the summons for
judgment with a prayer of leave to defend.
8. It is a case of defendant that there is no privity of contract
with defendant because R.H. Associates is finance broker who
facilitated the transaction between plaintiff and defendant for which,
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R.H. Associates took guarantee in case of default. Defendant denied that
he took loan from plaintiff. Suit is not maintainable on the ground that
plaintiff is doing business of money lending without license. The suit is
bad for nonjoinder of necessary party because R.H. Associates is
necessary party. Plaintiff has denied to give inspection of original
documents and hence, suit liable to be dismissed. Defendant denied
that he had received a sum of Rs.10 Lakh under promissory note
dtd.17.12.2014. The liability of the defendant to pay to the plaintiff the
principle sum and interest under the promissory note continuous. In
view of above pleadings defendant denied all contents of plaint. For all
these reasons defendant prayed for unconditional leave to defend.
9. Considering the contentions in plaint and defence raised by
the defendant, following points arise for determination of this court and
recorded findings thereon for the reasons stated as under.
POINTS FINDINGS
1. Whether plaintiff is entitled to the relief of
making the summons for judgment
absolute?
….No.
2. Whether defendant is entitled for leave to
defend the suit? ...Yes.
3. What order? ...As per final
order.
REASONS
As to point Nos.1 and 2 :
10. Heard counsel of both the parties. Learned counsel of
plaintiff relied on case laws. Shobhita Rani Kaushal Vs. Ketty
Jehangir H. Dhanjibhoy and Ors.: MANU/MH/1153/2008, wherein
defendant has obtained hand loan of Rs.35,000/ from plaintiff under
promissory note. Defendant failed to pay the said amount and therefore
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plaintiff filed suit for recovery. Hon’ble High Court observed and held
that,
“ if one turns to the definition clause, it is clear that “business of
money lending” may be termed even as additional business. The
business of money lending imparts a notion or systematic,
repetition and continuity and that is the proper test to be applied.
For a person to be a moneylender, he must in the regular course
of business, advance loans. Isolated transaction is not covered
under the provisions of the act.”
11. Learned counsel of defendant relied on case law of B. L.
Kashyap and Sons Ltd. Vs. M/s. JMS Steels and Power Corporation
and Anr. : Civil Appeal arising out of SLP (C ) No.19413 of 2018,
dtd.18.01.2022 wherein Hon’ble Supreme Court held that,
“grant of leave to defend (with or without conditions) under
Order 37 of CPC is the ordinary rule and denial of leave to defend
is an exceptional. Putting in other words, generally, the prayer for
leave to defend is to be denied in such cases where the defendant
has practically no defence and is unable to give out even a
semblance of travel issues before the court.
“Para 17.1 As noticed, if the defendant satisfies the Court
that he has substantial defence, i.e., a defence which is likely to
succeed, he is entitled to unconditional leave to defend. In the
second eventuality, where the defendant raises triable issues
indicting a fair or bonafide or reasonable defence, albeit not a
positively good defence, he would be ordinarily entitled to
unconditional leave to defend. In the third eventuality, where the
defendant raises triable issues, but it remains doubtful if the
defendant is raising the same in good faith or about genuineness
of the issues, the Trial Court is expected to balance the
requirements of expeditious disposal of commercial causes on one
hand and of not shutting out triable issues by unduly severe
orders on the other. Therefore, the Trial Court may impose
conditions both as to time or mode of trial as well as payment
into the Court or furnishing security. In the fourth eventuality,
where the proposed defence appear to be plausible but
improbable, heightened conditions may be imposed as to the time
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or mode of trial as also of payment into the Court or furnishing
security or both, which may extend to the entire principal sum
together with just and requisite interest”.
12. In the present case it is the case of plaintiff that defendant
approached to the plaintiff through R.H. Associates for loans. She has
advanced him a sum of Rs.10 Lakh under promissory note. Defendant
paid interest amount at the rate of Rs.1.05% per month from 17th
December to 11th March 2018. Thereafter, defendant failed to repay the
principle amount and interest thereon. Defendant has admitted that he
has obtained the said loan and paid interest but said loan was obtained
through R.H. Associates. Therefore, there is no privity of contract
between plaintiff and defendant. R.H. Associates is instrumental to
default in the entire transaction. Plaintiff has produced copy of i)
promissory note dtd.17.12.2014, ii) Relevant page of bank passbook of
plaintiff to show the entries of payment of principle amount and interest
amount iii) demand notice dtd.05/2/2020 sent to the defendant, iv)
letter dtd.14.02.2020 sent by advocate of defendant to plaintiff.
13. Considering rival contention of both the parties, it seems
that there is some primafacie role of R.H. Associates. Plaintiff also
claiming that defendant approached her through R.H. Associates for
loan. Defendant also claimed that he obtained the said amount through
R.H. Associates therefore this is a triable issue and it needs to be
determined in the light of evidence of parties. Moreover, in such
circumstances the point of rate of interest and outstanding interest
needs to be determined. Thus, I come to the conclusion that the
defendant has placed the triable issues as above. Defendant also
contended that plaintiff is being money lending business without license
and therefore, she is not authorized to charge any interest. Therefore,
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this point also needs to be determined by giving opportunity to both the
parties. Pertinent to mention that it is a loan transaction and therefore
it is doubtful whether the present suit is within the definition of
commercial dispute under the provisions of Commercial Court’s Act
2015. Hence, this is also triable issue.
14. In view of the above facts and case laws, I come to the
conclusion that defendant is entitled for leave to defend the suit.
However, defendant is required to deposit the admitted principle
amount of Rs.10 Lakh less paid interest amount of Rs.4,20,350/
=Rs.5,79,650/within 30 days from the date of this order. Hence, I
answer point No.1 is in negative and point No.2 in the affirmative.
Hence, I pass following order.
ORDER
1. Leave to defend the suit is granted to the defendant subject
to depositing the amount of Rs.5,79,650/ in the court within 30
days from the date of this order.
2. If defendant failed to deposit amount within stipulated
period, plaintiff shall proceed with the suit, as if there is no
defence.
3. A summons for judgment No. 128 of 2021 is disposed of
accordingly.
Date :16/06/2022. (N.P.TRIBHUWAN)
Judge, C.R.No.32,
City Civil Court,
Mumbai.
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Dictated on : 16/06/2022.
Checked on : 16/06/2022.
Signed on : 16/06/2022.
CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER”
16/06/2022 at 5.30 p.m. Mrs.Rupali S. Bhor
UPLOAD DATE AND TIME NAME OF STENOGRAPHER
Name of the Judge(with CR
No.)
HHJ SHRI. N. P. TRIBHUVAN
(C.R.No.32)
Date of pronouncement of Order 16/06/2022
Order signed by P.O. on 16/06/2022
Order uploaded on 16/06/2022
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