1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUMMONS FOR JUDGMENT NO.196 OF 2008 IN SUMMARY SUIT NO.613 OF 2008 Jitendra Mithalalji Rawal .... Plaintiff V/s. M/s.Vora Enterprises .... Defendant Mr.V.R.Tripathi, for the plaintiff. Mr.Rajiv Narula with Mr.Basant Trilokani i/by M/s.Jhangiani Narula & Associates, for the defendant. CORAM : D.G.KARNIK, J. DATED : 31ST MARCH, 2009. P.C. 1. Heard the learned counsel for the parties. 2. This Summons for Judgment is taken out by the plaintiff in a suit for recovery of principal sum of Rs.4,88,000/- and interest thereon at the agreed rate. The defendant has filed affidavit-in-reply denying its liability and has prayed for an unconditional leave to defend the suit. 3. The case of the plaintiff is that the defendant is a developer/promotor/builder. The defendant had promoted ownership flat scheme known as “Vora High Land Park”, at Dahanukar Wadi, Kandivali (W), Mumbai. Plaintiff wanted to book a flat of 980 sq.feet in E wing of the said building and the rate was mutually fixed at Rs.2,200/- per sq.feet. 2 Pending the execution of the written agreement for sale, as required by the Maharashtra Ownership Flat Act, 1963, plaintiff paid to the defendant a sum of Rs.4,88,000/- in cash and the balance amount was agreed to be paid in installments as per the progress of the construction. The execution of the written agreement was delayed because the defendant wanted certain money in cash and show less consideration in the final agreement. It was also agreed that till the execution of the written agreement, an amount of Rs.4,88,000/- which the plaintiff had paid to the defendant, would be treated as loan with interest 21% p.a. Accordingly, the defendant executed a Promissory Note on 13-02-2005 and agreed to pay on demand to the plaintiff a sum of Rs.4,88,000/- together with the interest @ 21% p.a. For some reasons final agreement for sale and purchase of the flat, did not materalize. The plaintiff therefore, demanded back the money paid by him to the defendant. But the defendant declined to pay and hence the suit. 4. In the affidavit-in-reply, the defendant has admitted that the plaintiff had agreed to book a flat admeasuring 980 sq.feet in E Wing of his Scheme. He has further stated that the rate agreed was Rs.2,500/- sq.feet and not Rs.2,200/- sq.feet, as alleged by the plaintiff. He has also admitted that the plaintiff has paid to him a sum of Rs.4,88,000/- . According to him, balance amount of Rs.19,62,500/- was to be paid by the plaintiff within six 3 months, and it was agreed that in the event plaintiff did not make the payment of the balance amount, the defendant would be entitled to forfeit the amount of Rs.4,88,000/- paid by the plaintiff. The defendant has unequivocally also admitted the receipt of a sum of Rs.4,88,000/- and execution of the promissory note in favour of the plaintiff. However, according to him, promissory note was not to be acted upon and the defendant had never agreed to pay interest at the rate of 21% p.a. 5. In view of the provisions of Section 4 of the Maharashtra Ownership Flat Act, the defendant was required to enter into a written agreement before he accepted any money as advance from the plaintiff. Admittedly, in the present case, no written agreement was entered into between the parties regarding the sale of the flat. Furthermore, there is no evidence on record to show that the plaintiff had agreed that the amount of Rs.4,88,000/- would be forfeited in the event he failed to purchase the flat. The fact that the defendant himself has executed a promissory note agreeing to pay to the plaintiff a sum of Rs.4,88,000/- together with interest @ 21% p.a., runs counter to the defence of the defendant that a sum of Rs.4,88,000/- was to be forfeited and that the defendant had forfeited the said sum of money. The defence of the defendant regarding the forfeiture is therefore, nothing but futile defence. It is admitted position that the plaintiff had paid to the defendant a sum of Rs.4,88,000/-. It is also 4 admitted position that defendant has executed promissory note agreeing to pay a sum of Rs.4,88,000/- to the plaintiff. The execution of the promissory note and signature is not disputed. In the circumstances, in my view, the defendant has no defence for repayment of a sum of Rs.4,88,000/-. 6. As regards the interest, the defendant does have some defence, though not a complete one. That would require trial. Admittedly, the money was not paid by the plaintiff as a loan, but as a deposit till the written agreement for sale regarding the flat was entered into in future. The plaintiff himself appears to be unable to enter into a contract for purchase of the flat perhaps because of financial reasons. In the circumstances, in my view, the defence of the defendant regarding interest and in any event rate of interest, is required to be considered at the stage of the hearing. Hence, conditional leave to defend the suit can be granted to the defendant. 7. The defendant is granted conditional leave to defend the suit subject to his depositing in the Court a sum of Rs.4,88,000/- within four weeks from today. On such deposit, defendant shall file written statement within 10 weeks. The plaintiff shall be at liberty to withdraw the amount deposited by furnishing security to the satisfaction of the Prothonotary and Senior Master. In case the plaintiff does not apply for withdrawal of the said money within 8 weeks of the notice of the deposit, the amount shall be 5 invested in any Nationalized Bank initially for a period of one year, to be renewed till the plaintiff applies for withdrawal. ( D.G.KARNIK, J. )