Final Order 1

Order Details: Notice of Motion
Pdf Text: IN THE BOMBAY CITY CIVIL COURT AT BOMBAY
NOTICE OF MOTION No.2320 OF 2018
(CNR No.MHCC01-007499-2018)
IN
SUMMARY SUIT NO.406 OF 2017
Rajkumar Mohansingh Bajaj
Adult, Indian Inhabitant of Bombay
Aged :53 years, carrying on
business in the name and style of
M/s. Bilss Enterprises, a Proprietary
Concern as its Sole Proprietor residing at
602F, Neelkanth , 98, Marine Drive,
Mumbai- 400 002. ... Plaintiff
V/s.
1. Milestone Interactive Private Limited,
a Company Registered under the Companies
Act, 1956
Carrying on business at Gala No. 106, Buldg.
No. 11. 1st Floor, Arihant Commercial Complex,
Village Puma Bhiwandi, Thane.
Maharashtra- 421 302.
2. Jayont R Sharma , Adult
Indian Inhabitant of Bombay
residing at Windermere Bldg No. 1B/125,
Near Oshiwara Police Station, New Link Road,
Andheri (West0, Mumbai.- 400 053.
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3. Manisha J. Sharma
Adult, Indian Inhabitant of Bombay
residing at Windermere Bldg No. 1B/125,
Near Oshiwara Police Station, New Link Road,
Andheri (West), Mumbai.- 400 053.
... Defendants
CORAM : HER HONOUR AD-HOC JUDGE
SMT. A.H. KASHIKAR
CITY CIVIL COURT, GR. BOMBAY
(C.R. NO.61).
DATE : 08/12/2021
Adv. Ms. Kavita Lalwani for the plaintiff.
Adv. Mr. Sushant Murty, for the defendant.
ORAL ORDER
1. This is a notice of motion taken out by the defendant nos. 2
and 3 for condonation of delay of 185 days in seeking leave to defend
the summary suit and recall of ex-partee orders dtd.12.7.2017 and
15.12.2017.
2. The notice of motion is replied by the plaintiff.
3. Heard respective advocates at length and perused the record.
4. It is submitted that the present suit is not maintainable and it
barred by law. Section 13 (1) of the Maharashtra Money Lending
(Regulation ) Act, 2014 categorically provides that the suit by a money
lender in Maharashtra operating without a valid licence is not
maintainable. The plaintiff has failed to discharge this onus, hence
present suit deserves to be dismissed on this count. Further, it is
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submitted that the agreement between the party is unenforceable by
law and therefore, it is void. The suit cannot be decreed as the plaintiff
has advanced money to the defendant no.1 Company for interest
thereon as loan which the defendant no.1 failed to repay. Therefore, the
suit is not maintainable. Further it is submitted that the plaintiff has
filed Company Petition No. 525/2015 for winding up against the
defendant no.1 Company for realization of the aforesaid dues in the
Hon’ble High Court of Bombay. Said Petition has been disposed off with
the direction to wind up the defendant no.1 Company on dtd.1.2.2018.
By virtue of said order in terms of section 446 of the Companies Act,
1956 the present suit ought not be proceeded with. The official
liquidator has been appointed by the Hon’ble High Court, in said matter.
5. It is specifically submitted that the defedants were caught
up with the proceedings with the Company Petition No. 525/2015 in
High Court when these proceedings were initiated. They had appointed
advocate Ramkumar Upadhyaya to represent them. The present suit is
one in a series of summary suits filed by the plaintiff and his family
members. The advocate had undertaken to do the needful in all
matters. He tendered appearance in the present suit. However, lateron
they came to know that the appearance is not tendered in the suit. The
litigant cannot be made to suffer for the inaction and lapses on the part
of the advocate. They were under bonafide impression that the
Company Petition was admitted and the defendant Company was
directed to be wound up, the present suit would automatically be
stayed. In such circumstances, if leave is not granted to the defendants
to contest the suit, grave hardship will be caused to them. They are
having good case on merit. No harm will be caused to the plaintiff if
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delay is condoned. The official liquidator is also not made party to the
present suit. Hence, delay may be condoned in filing affidavit seeking
leave to defend and the present proceeding may be stayed in view of
winding up order of Hon’ble high Court.
6. The reply has been submitted by the plaintiff stating that
the summons for judgment has been partly allowed by this court on dtd.
15.12.2017. Unconditional leave was granted to the defendants to
defend the suit in regard to past interest amount and the order was
passed that the plaintiff is entitled to recover from defendants jointly
and severally, the amount of Rs. 13,00,000/- with interest at the rate of
6% p.a from the date of the suit till its actual realization.
7. The plaintiff has further submitted that he has advanced
money to the defendants for their business and the provisions of
Bombay Money Lender’s Act , 1946 do not apply to the suit transaction
as the advance was made on the basis of a Negotiable Instrument
exceeding Rs.3,000/- and as such the plaintiff is exempted from having
licence under section 2 (9)(f) of the Bombay Money Lenders Act, 1946.
The plaintiff is not a money lender and he has advanced Rs.22,00,000/-
to the defendants on two bill of exchange. Further, it is contended that
the defendant no.2 and 3 being the acceptors of the demand bill of
exchange are liable to be prosecuted. The summons for judgment was
properly served on them. The suit cannot be stayed against defendant
nos. 2 and 3, who are the acceptors of the suit demand bills of
exchange. The summons for judgment is already disposed off, in such
circumstances the notice of motion needs to be rejected outrately.
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8. I have gone through the record and the roznama of the
case. Further, I have read the order passed by Hon’ble High Court in
Company Ptitions of dtd 1.2.2018. It reveals that the Company Petitions
were filed by the plaintiff against defendant no.1 and defendant No.1
company is wound up. Section 446 of the Company’s Act speaks of stay
of suit on winding up order. The provisions of section 446 runs as
under:
Section 446:-
“(1) When a winding up order has been made or the Official
Liquidator has been appointed as provisional liquidator, no suit or other
legal proceeding shall be commenced, or if pending at the date of the
winding up order, shall be proceeded with, against the company, except
by leave of the Tribunal and subject to such terms as the Tribunal may
impose.
(2) The Tribunal shall, notwithstanding anything contained in
any other law for the time being in force, have jurisdiction to entertain,
or dispose of (a) any suit or proceeding by or against the company; (b)
any claim made by or against the company (including claims by or
against any of its branches in India); (c) any application made under
section 391 by or respect of the company; (d) any question of priorities
or any other question whatsoever, whether of law or fact, which may
relate to or arise in course of the winding up of the company;
whether such suit or proceeding has been instituted, or is instituted or
such claim or question has arisen or arisen or such application has been
made or its made before or after the order for the winding up for
company,or before or after the commencement of the Companies
(Amendment) Act, 1960.
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(3) [******]
(4) Nothing in sub- section (I) or sub section (3)shall apply to any
proceeding pending in appeal before the Supreme Court or a High
Court”.
9. The provision says that except by leave of the Tribunal & Subject
to the terms imposed by the Tribunal, the suit or legal proceedings
against wound up company shall not be proceeded further.
10. The plaintiff has contended that present suit cannot be stayed
against defendant nos. 2 and 3 as they are the acceptors of bills of
exchange in their personal capacity. The proceeding may be stayed
against defendant no.1 Company. The plaintiff wants to take the steps
to withdraw the proceeding against defendant no.1. Here, it appears to
be the triable issue to consider whether the directors of company who
accepted bill of exchange can be issued in their personal capacity or not.
11. The defendant nos. 2 and 3 raised objection that the plaintiff is a
money lender and he lend money without holding money lending
licence. Therefore, present suit is not tenable. On said point, Advocate
for the plaintiff submitted that, the amount lend by them to defendants
do not come under the purview of Maharashtra Money Lending
(Regulation) Act, 2014. They have advanced money to the defendants
and not the loan. She draw my attention towards the authority in the
case of Fauzan Shaikh V/s. State of Maharashtra Criminal Public
Interest Litigation St. No. 41 of 2019. It is observed in said authority
that person who advances money without interest on the basis of
Negotiable Instrument as defined under the Negotiable Instrument
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Act,1881 other than promissory note or on the basis of hundi, is covered
under the exclusion clauses (j) & (k) of Section 2(13) of Maharashtra
Money Lending (Regulation) Act. He cannot be equated with an
unregistered money lenders who is advancing the money at interest on
the basis of negotiable instrument other than promissory note or on the
basis of hundi.
12. Replying upon said authority, it is contended by plaintiff
that their case comes under advances and not under loan. Hence, suit is
maintainable.
13. It appears to be that those are rival contentions in between
the parties on the point of applicability of the provisions of Maharashtra
Money Lending (Regulation )Act, and tenability of suit. Said rival
contentions cannot be decided and determined in this notice of motion,
I am of the opinion on that the defendants must get opportunity to put
forth and prove their contentions by contesting the suit.
14. To my mind, the record shows that the defendant no.1
company has already been directed to be wound up. The court has to
take into consideration, whether the suit is maintainable against the
defendant no.1. Further it has to consider whether the suit is
maintainable against defendant nos. 2 and 3 in their personal capacity
as acceptors of bills of exchange. At the threshold of submissions made
in the notice of motion, it cannot be verdicted that the suit is not
maintainable and is liable to be dismissed. Further, the order of stay if
any, is to be passed in the suit by virtue of section 446 of the Companies
Act in the suit and not in the notice of motion. Hence, considering all
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these aspects it appears necessary to allow notice of motion by granting
leave to the defendant nos.2 and 3 to move application for leave to
defend . The summons for judgment is partly allowed and unless the
suit is decided on merit, no specific orders can be passed. Further
more, it reveals that the defendant nos.2 and 3 have unfolded
satisfactory reasons as to why they could not tender their appearance in
the present suit. It is worth to note that a litigant cannot be made to
suffer for inaction and lapes on the part of the advocate. Hence,
considering these circumstances, I hold that it is necessary and in the
interest of justice to condone delay of 185 days in seeking leave to
defend the summary suit and recalling of the ex-partee orders dtd.
12.7.2017 and 15.12.2017.
15. Hence, in view of the discussion made above, I proceed to
pass following order:
ORDER
1. The Notice of Motion no.2320/2018 is partly allowed.
2. The delay of 185 days in seeking leave to defend the summary
suit is condoned and defendant nos. 2 and 3 are directed to
take necessary steps within four weeks of this order.
3. The order dtd. 12.7.2017 and 15.12.2017 are recalled and set
aside.
4. The Notice of Motion No.2320/2018 is disposed of.
Date: 8.12.2021
(A.H.KASHIKAR)
AD-HOC Judge,
City Civil Court,
Gr.Mumbai.
(Court Room No.61)
Dictated on : 8.12.2021
Typed on : .8.12.2021
Signed on : 14.12.2021
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“CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER.”
14.12.2021 05.10 p.m. ( K.M.RANA)
UPLOAD DATE AND TIME NAME OF STENOGRAPHER
Name of the Judge (With Court
room No.)
HHJ Smt. A.H.KASHIKAR (C.R.No.61)
Date of Pronouncement of
JUDGMENT/ORDER
8.12.2021
JUDGMENT/ORDER signed by
P.O.on
14.12.2021
JUDGMENT/ORDER uploaded on 14.12.2021
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