1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUMMONS FOR JUDGMENT NO.06 OF 2009 IN SUMMARY SUIT NO.3425 OF 2007 M/s. Veejoy Homes Private Limited ..Plaintiff V/s. Vasant Hemchand Shah ..Defendant ---- Mr.S.V. Parmar for the plaintiff. Mr.Balasaheb Deshmukh for the defendant. ---- Coram : R.S.MOHITE,J Date : 2nd July, 2009. PC 1. This is a summons for judgment taken out by the original plaintiffs for recovery of an amount of Rs.56,00,000/- with further interest. On perusal of the statement of claim, it is seen that the amount of Rs.42,11,000/- is claimed to be the principal amount due under a dis-honoured cheque and an amount of Rs.13,89,000/- is the interest component @ 18 % on Rs.42,11,000/- from 4.5.2004 to 28.2.2007. 2. Perusal of the complaint indicates that according to the plaintiffs, they were desirous of developing certain properties belonging to Voltas limited. The present defendant was appointed as a developer to develop the said property. A Memorandum of Understanding was entered into between the plaintiffs and defendant on 8.8.2004 2 whereby the defendant agreed to get his development rights cancelled and to secure a written allotment agreement of the land from Voltas Ltd., within 20 days from the date of the Memorandum of Understanding, time being the essence of the contract. The consideration of the said transaction was mentioned in paragraph-1 of the Memorandum of Understanding and included an amount of Rs.50,00,000/- payable to the defendant for the cancellation of the development agreement in their favour. In clause-2 of the said Memorandum of Understanding it was recorded that the plaintiffs had paid to the defendant sum of Rs.41,00,000/- as earnest money out of the sum of Rs.50,00,000/-. There was a receipt clause at the end of the said Memorandum of Understanding which admittedly has been signed by the defendant no.1. 3. Memorandum of Understanding provided that the amount of Rs.41,00,000/- was to be refunded to the plaintiffs in the event of the society and the said firm failing to produce a written allotment agreement of the land from Voltas within 20 days from the date of the Memorandum of Understanding. It is not in dispute that no such written allotment agreement was produced by the defendant. In such circumstances, the plaintiffs asked for refund of their money. It is the plaintiffs’ case that further amount of Rs.1,11,000/- was given by different cheque as earnest money and the amount of Rs.41,00,000/- was really not the earnest money but was part payment from the amount of Rs.50,00,000/- payable to the defendant under the Memorandum of Understanding dated 8.8.2004. It is their case that as repayment of the monies was due, defendant issued a cheque dated 18.11.2004. The said cheque was presented but came to be dis-honoured on 4.5.2005. It is the plaintiffs’ case that thereafter by a notice dated 13.5.2005 the defendant was called 3 upon to pay Rs.42,11,000/-. The said notice was issued under Section 138 of the Negotiable Instruments Act. The payment however, was not made in spite of demand. In such circumstances, criminal proceedings under Section 138 of Negotiable Instruments Act was initiated. Though the trial Court acquitted the defendant, an appeal against acquittal has been filed in this Court and the same has been admitted by this Court. 4. On perusing the reply, I find that various defences have been raised by the defendant. He contended that there is no averment as regards the existence of the debt. It is also contended that there was a duty cast upon the society as well as Voltas and this duty was not performed by the society. It is his contention that workers society as well as Voltas are necessary parties and this summary suit was not maintainable without they being made as a party to the suit. It is also his contention that Memorandum of Understanding is not a concluded contract. It is his last contention that the cheque had not been issued for discharging a debt but only to reassure the plaintiffs that the defendant was ready and willing to perform his obligation under the Memorandum of Understanding dated 8.8.2004. 5. In my view, none of these defences can prima facie be accepted. It is seen that the present plaintiffs have paid amount of Rs.41,00,000/- by cheque. It is an admitted position that the said cheque was encashed. Memorandum of Understanding provided that this amount was being given as earnest money out of the total consideration of Rs.50,00,000/- payable to the defendant for obtaining an agreement of allotment in favour of the plaintiffs. Admittedly, no such agreement has been procured by the defendant. The Memorandum of Understanding clearly provided that amount was to be refunded to the plaintiffs in case this obligation to 4 procure an agreement for allotment from Voltas could not be made within 20 days. The amount therefore, became repayable to the plaintiffs 20 days from the date of the Memorandum of Understanding. Not only this, the record indicates that the defendant actually issued a cheque for Rs.42,11,000/- on 18.11.2004 but this cheque was dis-honoured. The defence that the cheque was given by way of an assurance so that plaintiffs should feel assured that they will perform their part of the bargain, is not acceptable because there is no covering letter informing that the cheque should not be encashed. In my view, society of workers and Voltas are not necessary party to the summary suit since the money has been received only by the defendant as against obligation cast upon him under the Memorandum of Understanding dated 8.8.2004. There is however, some doubt as to whether claim of 18% interest is covered under any written agreement. There is also some doubt as to whether an amount of Rs.1,11,000/- was the earnest money or part of any separate transaction because there is no reference in the Memorandum of Understanding regarding the amount. In the aforesaid background, following order is passed :- O R D E R 1) Defendant is granted leave to defend the suit on his depositing amount of Rs. 41,00,000/- in this Court within a period of eight weeks from today. If the amount is deposited, defendant will file his written statement within a further period of eight weeks. Advocate for the defendant seeks leave to pay the money in installments. He will be at liberty to apply in that regard but it has been made clear to him that grant of installments 5 may be considered only if his client undertakes to this Court to pay the money in time. If the defendant is willing to give such undertaking, he will be at liberty to move the matter relating to grant of installments. Summons for Judgment disposed off accordingly. ( R.S.MOHITE, J. )