1 Sj275-09 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUMMONS FOR JUDGMENT NO.275 OF 2009 IN SUMMARY SUIT NO.36 OF 2009 Liza Hiten Shah .. Plaintiff Vs. M/s.Nital Trading Co. and Anr. .. Defendants Mr.D.H.Mehta i/b Mr.Paras Vira for the plaintiff Mr.Sajan Ooma for the defendants CORAM : S.C.Dharmadhikari, J. DATE : November 30, 2010 P.C. : 1. The plaintiff has filed this suit for recovery of a sum of Rs.34,14,300/- with interest. 2. The plaintiff was partner of M/s.Valkal, a registered firm which was carrying on business at the address mentioned in para 1 of the plaint. Plaintiff and defendants are well known and defendant no.2 is a partner of defendant no. 1 firm. 3. It is stated that the firm was in need of funds and since the defendant no.2 was also a partner with the plaintiff in the firm M/s.Valkal that the plaintiff 2 Sj275-09 was requested to assist the defendant no.1 by defendant no.2 and that is how the sum of Rs.15,60,000/- was advanced by cheques. Cheques have been encashed by defendant no.1 and defendant no.2 assured that the amount will be repaid with interest. Defendant no.1 issued a receipt and executed a promissory note dt.24.2.03 and thereafter, also confirmed the liability vide the confirmation letters marked as Exhibits C1, C2 and C3 respectively. 4. Reliance is also placed upon the books of accounts of defendant no.1 and it is stated that since the amount was not repaid with interest as assured, advocates notice was sent which was duly received and there is a reply thereto. In reply, the defendant no.1 raised issues which are unconnected with the suit claim. It is stated that there were disputes and differences between the plaintiff and defendant and their family members, in respect of business of partnership firm M/s.Nital Trading Co. and other firms, which have been duly settled in arbitration and two arbitrators who have given written Award/M.O.U.dt.21.05.2004. However, it is stated that at the same time, it is not disputed that there were transactions and if the case is that the loans have been repaid in full, then, reference to M.O.U./Award was unnecessary. It is in such circumstances that the plaintiff denied this version of defendant no.1 and called upon the defendant no.1 to repay the sum advanced by cheques since payment is not forthcoming, the present suit is filed. 3 Sj275-09 5. I have heard Mr.Mehta, the learned counsel appearing for the plaintiff who has invited my attention to the Annexures to the plaint and the subsequent statements therein. On the other hand, Mr.Sajan Oomen, the learned counsel appearing on behalf of the defendants submitted that in the affidavit in reply, it has been stated by the defendants that each of the Annexures to the plaint are signed by father in law of the plaintiff. Father in law of the plaintiff has signed to oblige her and nothing more. Though father in law, who is the partner of defendant no.1 has not been impleaded as party defendant to the suit and for obvious reasons, he submits that M.O.U. is in respect of all firms and all disputes arising in respect of the businesses with which the plaintiff and defendants were associated. There is nothing due and payable and once such a specific stand is taken, so also, it is urged that the promissory note is forged and fabricated, therefore, unconditional leave to defend must follow. 6. Mr.Mehta, learned counsel appearing for the plaintiff, in rejoinder has submitted that the attempt of the defendants is to confuse the issue with some other dispute. It is stated in the rejoinder and it has never been a subject matter of dispute as well, that the amounts had been advanced by cheques, even the books of accounts and passbook entries have been relied upon by the plaintiff. Further, the firm is liable under the promissory note in question. If the firm is liable then non-joinder of the father-in-law of the plaintiff who is the signatory on behalf of the firm as partner thereof is no ground to hold that triable issues arise and therefore, unconditional leave 4 Sj275-09 needs to be granted. For all these reasons, it is submitted that Summons for Judgment be made absolute. 7. With the consent of the learned counsel appearing for the parties, I have perused the plaint and the annexures, so also, the affidavits filed on record. To my mind, at this stage, it is difficult to ignore the statements in the plaint and the contents of the documents annexed thereto. 8. Assuming that the documents are all signed by the said Mr.Hirji Lalji who is father in law of the plaintiff, it is clear that the plaintiff herself came to the court with a case that she and defendant no.2 are partners in the business of M/s.Valkal. That is how the plaint reads. However, liability in this case is that of a distinct firm, Nital Trading Company. If M/s.Nital Trading Company had not been advanced a sum of Rs.15,60,000/- by cheques which have been encashed by the said firm and its partners and there is an execution of pronote, so also, the reply to the advocates notice raises the issue of full and final payment by defendant no.1, Nital Trading Co., then, it is clear that the defendant no.1 firm and its liability to pay to the plaintiff has been understood as a distinct obligation. If that was not to be the case then copy of the reply to the notice by the defendants (copy of this is at Annexure E to the plaint) would not have read in this manner. 9. The fact remains that today the defendant no.1 has taken up the plea that all amounts due and payable by defendant no.1 were repaid in full and 5 Sj275-09 MOU is conclusive. 10. It is the case of the defendants that the plaintiff, Hirji Lalji Gada alias Shah, his wife Mrs. Vimlaben Hirji Shah, Son Mr.Hiten Hirji Shah and daughter in law Mrs.Liza Hiten Shah on one side and defendant no.3 Mr.Laxmixchand Pasoobhai Gosar, his wife Mrs.Zaverben Laxmichand Gosar, Son Mr.Chetan Laxmichand Gosar on the other side were running four partnership firms, details of which are set out in para 7 (a) of the affidavit in reply. It is stated that there were differences and disputes between partners of all firms and that is how they were referred to two respectable persons in the community namely Mr.Mohanlal M. Shah and Mr.Nemchand L. Chheda A MOU was executed on 21.05.04 settling all the disputes and according to the defendant, assets and liabilities of M/s.Nital Trading Company are taken over by defendant no.2, his wife and son. It is stated that M/s.Nital Trading Company has virtually closed down all business activities since 21.05.04 and only the bank account is operated for the purpose of the payment of money to the creditors and clearing of dues. If it is the stand of the defendants that the MOU dt.21.05.04 and the recitals thereof specifically cover the claim of the plaintiff in the instant suit and that in pursuance thereto the amount was paid or received and that is duly reflected in the books of account, then, certainly something more, other than some denials and reference to the MOU should have been produced. More so, when the cheques are of 2001 and 2002 and two of the acknowledgements are in 2005 and 2006, that is much after the aforereferred M.O.U. If the entire claim is settled, then, it 6 Sj275-09 goes without saying that the defendants admit that the defendant no.1 firm owed some amount to the plaintiff. If one places reliance upon the deed allegedly reciting full and final settlement of all claims, then prima facie, existence of the claim is admitted. Further, if this was the case, there was no occasion to plead that the confirmation letter at Exhibit C-1 to C-3 are ‘ ’ forged and fabricated and cannot be relied upon. That was the stand taken in reply to the Summons for Judgment. However, while admitting that each of the documents relied upon by the plaintiff has been duly signed by the partner Hirji Lalji Gada alias Shah, the defendants in their letter dt.10.6.08 do not state that the pronote was not executed or the cheques and receipts were not in existence or they were forged and fabricated. Merely because one of the partners happens to be a father in law of the plaintiff does not mean that the entire version of the plaintiff is false. 11. It is in such circumstances, I am of the opinion that if the defendants desire an opportunity to prove their case and the version set out in affidavit in reply then they deserve to be put on terms. The terms cannot be only some assurance of the defendants. Once there is admission of the liability to the extent of receipt of cheques and if the claim is that it is repaid in full and there is nothing due and payable, then, without producing any proof thereof, leave to defend cannot be granted unless the defendant deposits a reasonable sum in court. In these circumstances, I am of the opinion that defendants are entitled to conditional leave to defend. Hence, the following order: 7 Sj275-09 12. On the defendants depositing in this court, a sum of Rs.20.0 lacs within a period of 12 weeks from today, there will be conditional leave to defend and the suit will have to be transferred to the list of commercial causes. Usual directions to file written statement, discovery and inspection. In default, the consequences in law shall follow. Summons for Judgment is made absolute in these terms. ( S.C.Dharmadhikari, J. )