1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J. SUMMARY SUIT NO.1467 OF 2007 Mukta Arts Ltd. ..Plaintiff. Vs. Neelmudra Entertainment Ltd. and another ..Defendants .... Ms. Sandhya Tolat i/b M/s. Vimadalal & Co. for the Plaintiff. None for the Defendants. .... CORAM: DR. D.Y. CHANDRACHUD, J. 14th March, 2008. P.C. : 1. The suit has been instituted for the recovery of an amount of Rs.1,23,52,328/- under Order 37 of the Code of Civil Procedure 1908. The Plaintiff, in pursuance of a request of the Defendants and subject to the Second Defendant agreeing to personally guarantee repayment, agreed to advance to the First Defendant a short term corporate loan of Rs.1 Crore for 90 days with interest at the rate of 21% per annum renewable for a further period of 90 days against post dated cheques of the First Defendant. The agreement is recorded by a letter dated 17th 2 September, 2002 addressed by the Plaintiff to the First Defendant and confirmed by the Second Defendant. By a cheque dated 17th September, 2002 the Plaintiff advanced to the First Defendant an amount of Rs.50 lacs against a postdated cheque. The First Defendant paid interest of Rs.2,07,375/-less TDS. The First Defendant also delivered a promissory note dated 17th September, 2002. The Second Defendant by a letter dated 21st September, 2002 recorded having guaranteed the repayment of the account in his personal capacity as well as in his capacity as Chairman/ Managing Director of the First Defendant. 2. On 28th September, 2002 the Plaintiff advanced to the First Defendant a further sum of Rs.50 lacs by a cheque of the same date drawn on the Punjab National Bank. The First Defendant paid interest at the rate of 21% per annum on the total sum of Rs.2,07,375/- less TDS. A promissory note was executed by the First Defendant while the Second Defendant executed a letter of guarantee. The cheques issued by the First Defendant were not presented by the Plaintiff on the request of the 3 Defendants. By a letter dated 17th February, 2003 the First Defendant requested a moratorium for the repayment of the amount due on 28th December, 2002 by six months and remitted interest for a period of 90 days. On 28th October, 2003 the First Defendant stated that it would commence production in November 2003 after which disbursement of the loan would be made. In response to a letter addressed by the Plaintiff on 7th January, 2004 the Defendants by a letter dated 24th January, 2004 forwarded three cheques towards interest and two undated cheques each for Rs.50 lacs towards repayment of the principal. On 17th June, 2004 the First Defendant while confirming the liability agreed to clear the principal during January- February 2005 and the outstanding interest with installments by postdated cheques. The Defendants, however, sought reduction in the rate of interest. 3. Two cheques furnished by the Defendants to the Plaintiff in the amount of Rs.50 lacs each being undated, the Plaintiff as holders in due course dated them as of 12th January, 2006 and presented them for payment. Both the cheques were dishonoured 4 upon presentation. Thereafter on 10th July, 2006 the Defendants once again assured repayment of the amount. The amount has remained to be paid despite an advocate's notice dated 1st November, 2006. 4. The Defendants have been served with the writ of summons and failed to enter appearance. The suit has accordingly been listed for an ex-parte decree. The claim of the Plaintiff falls within the purview of Order 37 of the Code of Civil Procedure, 1908 and is within limitation. Since the Defendants have failed to enter appearance, the Plaintiff would be entitled to a decree under Order 37 Rule 2(3). The Plaintiff has relied upon a compilation of the original documents on the basis of which the claim is proved. The suit shall accordingly stand decreed in the principal sum of Rs.One Crore on which the Plaintiff would be entitled to interest at the rate of 9% per annum from 12th January, 2006 until the date of the suit and at the same rate from the date of the suit until payment or realization. There shall be a refund of Court fees, if any, as per the 5 rules. *****