Final Order 1

Order Details: Copy of Judgment
Pdf Text: SJ 186/2019 IN SUM.SUIT 1321/2018 1
IN THE CITY CIVIL COURT AT MUMBAI
SUMMONS FOR JUDGMENT 186 OF 2019
IN
SUMMARY SUIT NO. 1321 of 2018
(UNDER ORDER XXXVII THE CODE OF CIVIL PROCEDURE 1908)
(CNR.NO.MHCC01-005823-2019)
Gulab Nihalchand Jain (H.U.F.)
through its Karta Gulab Nihalchand
Jain having office at Shop No.2,
Ground floor, Kaka Kunj
Co-operative Housing Society,
Nesbit Road, Mazgaon,
Mumbai- 400 010. ...Plaintiff
Versus
Silver Arch Builders &
Promoters a firm carrying on
business at Second floor, Gordhan
Building No.II, 12/14 Dr.Parekh
Street, Prathna Samaj,
Mumbai 400 004. ...Defendant
Appearances:-
Advocate Mr. S.K.Shah for the Plaintiff.
Advocate Mr. Arun Panikar for the Defendant.
CORAM : HIS HONOUR JUDGE
DEEPAK L. BHAGWAT
(C.R.NO.28)
DATE : 26th February 2020
J U D G M E N T
1. This is Summons for Judgment for recovery of Rs.17,85,564/-
(Rupees Seventeen Lakhs Eighty Five Thousand Five Hundred and Sixty
Four Only) with Pendente Lite and future interest at the rate of 12%
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p.a. on amount of Rs.13,66,155/-
2. According to the plaintiff, the plaintiff is Hindu Undivided Family
and Gulab Nihalchand Jain is Karta of the same family. The defendant is
a firm. By cheque bearing No.51140716, the plaintiff paid amount of
Rs.10,00,000/- to the defendant. The defendant agreed to repay the
same amount with interest at the rate of 12% p.a.. The defendant from
time to time paid interest by cheques on the said amount for the period
till 31st march 2013. The defendant also forwarded confirmation of
accounts dated 01.04.2012 and 01.04.2013 and thus the defendant
admitted and acknowledged the sum of Rs.10,00,000/- due and payable
by defendant to the plaintiff. Thereafter, the defendant instead of
paying interest every quarter, started capitalizing the same by giving
credit of same in the account of the plaintiff. On such capitalization
amount of Rs.11,09,500/- was due and payable on 31.03.2014. Amount
of Rs.12,30,991/- was payable on 31.03.2015. Amount of
Rs.13,66,155/- was payable on 31.03.2016. The defendant forwarded
confirmation of account dtd. 01.04.2014, 01.04.2015 and 01.04.2016
and acknowledged liability to pay the amount. However, thereafter the
defendant neither forwarded any statement of account nor paid the
interest. Despite service of legal notice dtd.05.10.2018, the defendant
failed to pay the amount. At the institution of the suit the amount due
and payable by the defendant was Rs.17,85,564/- as Rs.13,66,155/-
towards principal amount and rest of the amount towards interest at
the rate of 12% p.a.. Therefore, the plaintiff claimed recovery of the
said amount with interest.
3. On appearance of the defendant, the plaintiff taken out summons
for judgment. The defendant contested the summons for judgment by
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filing reply. The defendant submitted that the suit is not based on
written contract. Therefore, same is not maintainable as summary suit.
The plaintiff by his own admission is a money lender carrying on
business of money lending within the meaning of Maharashtra Money
Lending (Regulation) Act, 2014. However, the plaintiff has not
produced any document to establish that he is holding valid money
lending license. The defendant contended that the plaintiff is carrying
on the business of money lending without valid license and on this
ground summary suit has to be rejected. The plaintiff did not produce
any material or documents such as cashbook, ledger, statement of
debtors accounts, as required under the provisions of Money Lending
Act. The defendant denied that he agreed to repay the amount of
Rs.10,00,000/- with interest at the rate of 12% p.a.. According to the
defendant the suit has been undervalued. On these contentions the
defendant requested to reject the summons for judgment and grant
unconditional leave to defend.
4. Considering material on record and submissions made on behalf
of the parties points arise for determination alongwith my findings
thereon are as under:-
POINTS FINDINGS
1. Whether the plaintiff is entitled
to Summons for Judgment?
Negative
2. Whether the defendant is
entitled to Leave to defend?
If yes, whether conditional/
unconditional?
That the defendant is entitled to
Leave to defend to the extent of
part of the claim i.e. regarding the
charging of interest on interest i.e.
on the amount of Rs.13,66,155/-
and not on the principal amount of
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Rs.10,00,000/- on condition of
depositing amount of
Rs.13,66,155/- in the court
3. What order? As per final order.
REASONS
AS TO POINTS NO.1 to 3 :-
5. The Ld Advocate on behalf of the plaintiff argued that the
confirmation of accounts as produced on record prove the liability of
the defendant. There is no specific denial on behalf of the defendant
regarding the allegations in the plaint. Though the defendant taken the
defence under Money Lending Act, there is no material to prove that the
plaintiff carries business of money lending. Therefore, he requested to
allow the summons for judgment and decree the suit.
6. On the other hand, Ld advocate on behalf of the defendant
argued that there is no contract in writing. The amount paid was by
way of loan, interest has been charged on it. It shows that the plaintiff is
a money lender. The plaintiff also claimed interest on interest which
amounts to charging compoundable interest in absence of the
agreement. Therefore, he requested to reject the summons for judgment
and grant unconditional leave to defend.
7. The plaintiff has produced on record the confirmation of accounts
dtd.01.04.2012, 20.06.2013, 01.04.2014, 01.04.2015 and 01.04.2016.
All these confirmation of accounts reveal to have been executed by both
the parties. The confirmation of account dtd. 01.04.2012 in respect of
year 2011-12 shows that amount of Rs.10,00,000/- due and payable by
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the defendant whereas interest paid amount is shown to be
Rs.1,22,000/-. The confirmation of account dtd.20.06.2013 similarly
shows the amount of Rs.10,00,000/- due and payable by the defendant
whereas the interest paid amount is shown to be Rs.1,21,667/-. The
confirmation of account dtd.01.04.2014 shows amount of
Rs.11,09,500/- due and payable by the defendant. The confirmation of
account dtd.01.04.2015 and 01.04.2016 respectively show the amount
of Rs.12,30,991/- and Rs.13,66,155/- as due and payable by the
defendant. It is material to note that the defendant did not specifically
deny the execution of these confirmation of accounts, although there
has been specific pleading of the plaintiff regarding the same. The
defendant did not explain or whisper anything regarding these
confirmation of accounts. Resultantly, the confirmation of accounts are
acceptable. True that when the plaintiff paid the amount of
Rs.10,00,000/- to the defendant, there was no written contract
regarding repayment of same amount. However, the confirmation of
accounts as referred above show that the defendant acknowledged in
writing that the amount is payable by him. Resultantly, summary suit
will stand on it. The confirmation of accounts clearly reveal admission
of the defendant that he was liable to pay principal amount of
Rs.10,00,000/- to the plaintiff and on 31.03.2016 he was liable to pay
amount of Rs.13,66,155/- including interest.
8. As regards the contention that the plaintiff is a money lender and
therefore, leave to defend should be granted to the defendant, this court
must note that the defendant merely made a statement in reply that the
plaintiff by his own admission is a money lender carrying on the
business of money lending. It is worth to note that neither there is any
material on record nor even pleading in the reply to suggest or prima
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facie show that the plaintiff repetitively, systematically and in continuity
advances money for interest. The contention of the defendant that the
plaintiff is a money lender is merely on the basis of pleading of the
plaintiff that the defendant agreed to repay the amount with interest.
However, an isolated transaction will not be affected by the Money
Lending act. Thus, the defence of the defendant regarding money
lending transaction does not seem to be probable. On the other hand, it
is vague defence.
9. The defendant in this regard relied on 1. Kaloji Talusappa
Gangavathi V/s Khyanagouda, AIR 1970 SC 1420, 2. Khyati Realtors
Pvt Ltd V/s M/S Zenal Construction Pvt ltd., Company petition No.243
of 2012 decided by The Hon'ble Bombay High Court on 29.08.2013.
10. I have carefully gone through the decisions in the given cases. In
the case of 'Kaloji' , it seems that the fact that the plaintiff therein was
carrying on the business of money lending was not disputed. In the
same case as it was without license, the suit of the plaintiff was
dismissed. In the case of 'Khyati Realtors', the petitioner therein was in
the business of finance and investment. The bank statements on record
shown that the petitioner habitually gives loan and interest thereupon is
the main source of income. In that background, the Hon'ble Bombay
High Court in the said petition observed that the defence regarding
money lending without license cannot be brushed aside and the initial
burden in that regard had been discharged by the respondent. In the
case in hand, there is no such material before this court. Worth to note
that in the case of 'Khyati Realtors' the Hon'ble Bombay High court in
para 15 observed as 'It needs to be examined whether the petitioner in
the present case has placed on the record sufficient material to indicate
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that the respondent is engaged in the activity of money lending without
license and whether to ascertain the truthfulness of this assertion, a
detailed scrutiny of evidence is required, or that a defence raised is also
a bald assertion.' Thus, making bald assertion is not sufficient to say
that a triable issue is raised. In the case in hand no material at all
placed on record to indicate that the plaintiff is engaged in the activity
of money lending without license. Therefore, with respect the decisions
in the given cases are not beneficial to the defendant.
11. As regards the valuation of the suit, para 10 of the plaint shows
that the plaintiff has correctly valued the suit.
12. However, as regards the contention of the defendant that the
plaintiff has claimed interest on interest, there is some substance. The
principal amount as due and payable by the defendant is
Rs.10,00,000/-. However, while calculating the claim amount, in para 9
of the plaint, the plaintiff has avered that the defendant is liable to pay
further interest on the said amount of Rs.13,66,155/- at the rate of 12
% p.a.. Calculating so the plaintiff put the claim for amount of
Rs.17,85,564/-. It is glaring that though the principal amount payable
by the defendant is Rs.10,00,000/-, the interest charged by the plaintiff
while calculating the claim amount is on the amount of Rs.13,66,155/-,
which itself had included the amount towards interest. Thus, the
plaintiff has charged interest on the interest also. The same
circumstance shows that compound interest has been charged when it is
not the case of the plaintiff. To that extent leave deserves to be given to
the defendant. However, as already noted the defendant has admitted
the liability of Rs.13,66,155/- as per the confirmation of account
dtd.01.04.2016. Therefore, while granting leave to defend to the extent
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of issue as to interest, the defendant must be put on condition to
deposit the amount of Rs.13,66,155/-. Therefore, point No.1 is
answered in the Negative whereas point No.2 is answered as that the
defendant is entitled to Leave to defend to the extent of part of the
claim i.e. regarding the charging of interest on interest i.e. on the
amount of Rs.13,66,155/- and not on the principal amount of
Rs.10,00,000/- on condition of depositing amount of Rs.13,66,155/- in
the court. In answer to point No.3 order as follows is passed:
ORDER
1. The Summons for Judgment 186/2019 is rejected.
2. On condition of depositing amount of Rs.13,66,155/- in the court,
Leave to defend is granted to the defendant to the extent of part
of the claim viz. regarding the charging of interest on interest i.e.
on the amount of Rs.13,66,155/- instead of the principal amount
of Rs.10,00,000/-
3. The defendant shall deposit the amount of Rs.13,66,155/- on or
before 13.04.2020 and shall file the written statement on same
date subject to deposit of the said amount.
4. The registrar shall cause conversion of the suit to the appropriate
category and shall complete the process of assignment of the suit
to the appropriate court.
5. Summons for Judgment 186 of 2019 is disposed.
(Deepak L. Bhagwat)
Ad-Hoc Judge,
Date: 26/02/2020 City Civil Court,Gr. Mumbai
Dictated on : 26/02/2020
Signed on : 03/03/2020
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CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL SIGNED
JUDGMENT/ORDER.”
04/03/2020 at 2.00p.m. Mrs.J.V.Pawar
UPLOAD DATE AND TIME NAME OF STENOGRAPHER
Name of the Judge (With Court Room No.) HHJ Shri.D.L.Bhagwat
(C.R.NO.28)
Date of pronouncement of Judgment/Order 26/02/2020
Judgment/Order signed by P.O. on 03/03/2020
Judgment/Order uploaded on 04/03/2020
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