Order 1

Order Details: Notice of Motion
Pdf Text: :1: N.M. No. 2270/2018 in Sum. Suit No.602/2017
IN THE BOMBAY CITY CIVIL COURT AT MUMBAI
NOTICE OF MOTION NO. 2270 OF 2018
CNR NO.: MHCC010073302018
IN
SUMMARY SUIT NO. 602 OF 2017
Ashok Mohansingh Bajaj ]...Plaintiff
Versus
Milestone Interactive Private Limited ]
and others. ]...Defendants.
Appearances:
Advocate Ms. Kavita S. Lalwani for the Plaintiff.
Advocate Mr. Sushant Murti for defendant Nos. 2 and 3.
CORAM : HER HONOUR JUDGE
S.P. AGARWAL
(C.R.NO.9)
DATED : 29th JANUARY, 2019.
ORAL ORDER
1. Defendant No.2 and 3 have prayed for condonation of delay in
filing reply to Summons for Judgment. They have stated that they were
caught up with the proceedings of Company Petition No.525/2015 in
High Court when these proceedings were initiated and they appointed
Advocate Ramkumar Upadhyay to represent them in this Summary Suit
as he was also appearing in the winding up proceedings in the High
Court. They have further stated that Advocate Ramkumar Upadhyay
undertook to do the needful in all the matters and he even tendered
appearance in Summary Suit No.718 of 2017. However, to defendants
shock and surprise their Advocate neither tendered appearance nor
informed them of the same. They have further stated that a litigant
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cannot be made to suffer for the inaction and lapse on the part of the
Advocate. They have further stated that they were under the bona fide
impression that as the Company Petition No.525 of 2018 was admitted
and the defendants Company was directed to be wound up, the present
suit will be stayed. They have further stated that grave hardship and
injustice will be caused to them if leave is not granted and they have an
excellent case on merits.
2. Plaintiff has contended that Advocate for the defendants has
filed the Vakalatnama representing defendants and accepted the
Summons for Judgment served upon him. Plaintiff has further stated
that the Advocate was instructed not to file reply to Summons for
Judgment and similarly as he was instructed in the Company Petitions
filed in the High Court. Plaintiff has further stated that the litigant has
himself avoided to proceed in the case and there was no lapse and
inaction on the part of the Advocate. It appears that there is delay of 77
days to seek leave to defend in the present suit. Defendants are
contending that as they were under impression that their Advocate will
file application and take steps in this case. From such reasons stated by
defendants, the delay does not appears to be intentional. According to
defendants, they have good case on merits. Hence, considering the
contention of defendants that they have good case and they will suffer
hardship if not allowed to defend the suit it will be proper to allow
them to file application for leave to defend by compensating plaintiff for
the delay caused by defendant in proceeding with the suit.
3. Defendants have contended that as per Section 13(1) of the
Maharashtra MoneyLending (Regulation) Act, 2014, a suit by a money
lender in Maharashtra operating without a valid licence is not
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maintainable. Plaintiff has replied and contended that he has advanced
money to the defendants for their business and as the advance was
made on the basis of a Negotiable Instrument exceeding Rs.3,000/ and
such transaction is exempted U/s. 2(9)(f) of the Bombay Money
Lenders Act, 1946. Supporting such contention plaintiff has cited
judgment in case of Bhanushankar Jatashankar Bhatt v. Kamal Tara
Builders Pvt. Ltd. And another reported in 1989 (2) Bom. C.R.526 in
which it is held that, “provisions of section 2(9)(f) are valid”. It appears
that in the entire plaint plaintiff has nowhere contended that he is
doing business of a moneylending. Defendant has not produced
supporting documents to show that plaintiff is doing business of money
lending. Therefore, it is a matter of trial whether plaintiff is the money
lender or not and doing such business without licence. Therefore, at this
stage, there are no sufficient circumstances and proof to conclude that
plaintiff is doing business of money lending without licence. Hence, on
this ground, suit cannot be dismissed at this stage.
4. Ld. Advocate for the plaintiff further cited judgment in case of
M/s. Wolstenholme International Ltd., v. Twin Stars Industrial
Corporation and others reported in AIR 2001 BOMBAY 409 in which
it is held that, 'when the suit is filed on the basis of bills of exchange
plaintiff would be entitled to interest at the rate of 18% p.a. in view of
Section 80”. It appears the stage to decide interest on principal amount
has not reached in this case yet. The present application is for
considering whether delay in filing application for leave to defend can
be allowed, stay and maintainability of suit. Therefore, this case law is
not applicable to the case in hand at this stage.
5. Defendant Nos. 2 and 3 have prayed that the present Summary
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suit be stayed as the Company Petition is filed against defendant No.1
Company for winding up the Company. They have further stated that
the said Petition is disposed of by the Hon'ble High Court with
directions to the plaintiff to lodge his claims with the office of the
Official Liquidator given that a Company Petition No.525 of 2015 has
already been admitted whereunder the Company has been directed to
be wound up.
6. Plaintiff has stated that the Admission of the Company Petition
does not stay the recovery proceeding against the defendant Nos. 2 and
3. Ld. Counsel for the plaintiff cited judgment in case of Ashok
Mohansing Bajaj H.U.F. vs. Elegant Pharmaceuticals Ltd. and others
reported in 2000 (2) Mh.L.J. in which it is held that, “when acceptor
being independently liable as principal debtor, section 22 of Sick Industrial
Companies (Special Provisions ) Act, 1985 would not act as bar for
proceeding against acceptor”. Plaintiff has stated that Company petition
was filed against the defendant No.1 only for winding up of the
Company and present suit is filed against defendant Nos. 2 and 3 as the
acceptor of Bill of Exchange dated 04.09.2014. It appears plaintiff has
produced copy of Bill of Exchange on record. It appears that on the Bill
of Exchange defendant Nos. 2 and 3 have signed as acceptor in their
individual capacity and not as any person connected with defendant
No.1 Company. Therefore, it appears that the order of winding up is
against defendant No.1 but defendant No.2 have accepted Bill of
Exchange in their individual capacity. Therefore, there are no sufficient
grounds to stay proceeding against defendant Nos. 2 and 3.
7. As discussed above, it will be proper to allow defendant Nos. 2
and 3 to file application seeking leave to defend subject to cost. Hence,
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following order :
ORDER
1. Notice of Motion No.2270/2018 is partly allowed.
2. Delay on the part of defendant Nos. 2 and 3 to seek leave to defend
is condoned, subject to cost of Rs.2,500/ to be given by defendant
Nos. 2 and 3 jointly to plaintiff.
3. Prayer to stay this proceeding against defendant Nos. 2 and 3 stands
rejected.
4. Notice of Motion 2270/2018 stands disposed of.
(S.P. AGARWAL)
Judge,
Date: 29.01.2019. City Civil Court,
Gr. Bombay.
Dictated on : 29.01.2019
Transcribed on : 29.01.2019
Signed on : 29.01.2019
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CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER.”
02.02.2019 At 5:52 p.m. Mr. Subhash Sukhdeo Poul
UPLOAD DATE AND TIME NAME OF STENOGRAPHER
Name of the Judge (With Court
Room No.)
HHJ Ms. S.P. Agarwal
(C.R.NO.09)
Date of pronouncement of
Judgment/Order
29.01.2019
Judgment/Order signed by P.O. on 29.01.2019
Judgment/Order uploaded on 02.02.2019
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