1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J. SUMMONS FOR JUDGMENT NO.296 OF 2007 IN SUIT NO.1203 OF 2007 Neela Sudhish Talpade & anr. .. Plaintiffs. Vs. Gemini Aamod Gupte & anr. ..Defendants. ..... Mr. Anuj Narula i/b M/s. Jhangiani Narula & Associates for the Plaintiffs. Mr. S.V. Rajeshwar for the Defendants. .... CORAM: DR. D.Y. CHANDRACHUD, J. 19th March, 2008. P.C. : 1. The suit has been instituted under Order 37 of the Code of Civil Procedure for the recovery of the principal sum of Rs.17,50,000/- together with interest at 18% per annum. During the course of hearing, Counsel appearing for the Plaintiffs has stated that since the institution of the suit, a further sum of Rs.2 lacs has been paid by the Defendants to the Plaintiffs in pursuance of an order passed by the Metropolitan Magistrate on 2 24th August, 2007 in proceedings initiated under Section 138 of the Negotiable Instruments Act, 1888 (C.C. No.249/SS/06). In the circumstances, the claim in the suit has been restricted to an amount of Rs.15.50 lacs with interest. 2. The case of the Plaintiffs is that on the request of the Defendants the Plaintiffs advanced an amount of Rs.10 lacs by three cheques on 9th and 10th August, 2001. A further sum of Rs. 1 lac was advanced on 20th June, 2002. At Exhibit C to the Plaint is a statement of the monies lent and advanced by the Plaintiffs to the Defendants between 10th August, 2001 and 10th March, 2005. The total amount thus lent and advanced was Rs.29.50 lacs. In paragraph 3(h) of the Plaint it has been stated that the Defendants issued a cheque of Rs.50,000/- dated 5th August, 2003 and further cheques in the amounts respectively of Rs.2 lacs on 5th October, 2003, Rs.1 lac on 11th November, 2003, Rs.1 lac dated 11th December, 2003 and Rs.4.50 lacs on 29th June, 2005. Thus, a total amount of Rs.9 lacs was repaid between 5th August, 2003 and 29th June, 2005. 3 3. On 5th May, 2004 and 18th August, 2004 the Defendants issued two cheques in amounts of Rs.1 lac and Rs.2.50 lacs respectively. According to the Plaintiffs the Defendants requested them not to deposit the cheques since they were facing insufficiency of funds. The cheques are stated to have expired. Two cheques in the amount of Rs.5 lacs respectively dated 5th December, 2005 and 23rd December, 2005 were thereupon forwarded by the Defendants to the Plaintiffs. Both the aforesaid cheques were dishonoured upon presentation on 6th December, 2005 and 12th January, 2006. Several notices were issued by the Plaintiffs to the Defendants respectively on 17th January, 2006, 24th March, 2006, 20th May, 2006, 16th June, 2006 and 14th July, 2006. Despite the aforesaid notices, it is the case of the Plaintiffs that there was neither any repayment nor any reply thereto. 4. The Plaintiffs had instituted a complaint under Section 138 of the Negotiable Instruments Act, 1888. During the course of those proceedings, an amount of Rs.3 lacs was paid by the 4 Defendants to the Plaintiffs by demand drafts dated 3rd October, 2006 each in the amount of Rs.1 lac. The Defendants came to be convicted by an order dated 25th August, 2007 and were inter alia called upon to pay compensation of Rs.2 lacs. The aforesaid amount has been paid. 5. The sum and substance of the claim of the Plaintiffs therefore is that loans of Rs.29.50 lacs were advanced to the Defendants. An amount of Rs.9 lacs was repaid between 5th August, 2003 and 29th June, 2005, while a further amount of Rs.5 lacs has been realized in pursuance of the proceedings under Section 138 of the Negotiable Instruments Act, 1888. The balance of the claim is Rs.15.50 lacs, to which during the course of the submissions the Summons for Judgment has been confined. 6. An affidavit in reply has been filed by the Defendants. The Defendants have not disputed the receipt of the loans either in the affidavit or in the course of the submissions before the Court. The case of the Defendants, however, is that the amounts due and 5 payable were paid partly by cash and partly by cheque. The contention of the Defendants is that on 1st December, 2005 the accounts between the parties were settled and that the Second Defendant furnished two cheques of Rs.5 lacs each dated 5th December, 2005 and 23rd December, 2005 towards final settlement with specific instructions not to deposit the cheques, stating that cash would be paid in lieu of the cheques. It has been stated that despite this, the Plaintiffs deposited the two cheques which came to be dishonoured. An advocate' s notice dated 17th January, 2006 was thereupon received from the Plaintiffs under Section 138 of the Negotiable Instruments Act, 1888. According to the Defendants, the Second Plaintiff thereupon called upon the Second Defendant to pay an amount of Rs.5 lacs atleast in cash with interest in respect of the cheque dated 5th December, 2005. Accordingly, it has been submitted that an amount of Rs.5 lacs was paid in cash to the Second Plaintiff on 20th January, 2006 with a request to return the cheque. It has been stated that thereafter criminal proceedings came to be initiated under Section 138. The Defendants stated that thereafter an amount of Rs.3 lacs has been 6 paid during the course of the criminal proceedings and Rs.2 lacs was liable to be paid in pursuance of the order of the Metropolitan Magistrate recording conviction. 7. The theory of the Defendants that an amount of Rs.5 lacs was paid in cash has been denied in the rejoinder filed on behalf of the Plaintiffs. The defence to the effect that an amount of Rs.5 lacs was paid in cash cannot be accepted for more than one reason. Firstly, it is evident that a notice had been issued by the Plaintiffs on 17th January, 2006 under Section 138 of the Negotiable Instructions Act. It is inconceivable that upon receipt of a formal notice under Section 138, that the Defendants would pay an amount of Rs.5 lacs in cash and, even if the aforesaid amount was paid, not seek the return of the cheque. That apart, the narration of facts would show that there were as many as five notices of demand each of which has admittedly been received by the Defendants. None of those notices was replied to. If it was the case of the Defendants that an amount of Rs.5 lacs was paid in cash, that in the ordinary course of business should have been the 7 first thing which any prudent debtor would have pointed out in the form of a reply. 8. In these circumstances, it is evident that the defence to the suit is purely an after thought and that the Defendants have no valid or tenable defence. However, with a view to furnish an opportunity to the Defendants to defend the suit it would in my view be appropriate to grant conditional leave to defend the suit subject to the Defendants depositing an amount of Rs.15.50 lacs in Court within a period of four weeks from today. Leave to defend the suit is accordingly granted subject to the deposit of an amount of Rs.15.50 lacs within a period of four weeks. The Summons for Judgment is accordingly disposed of. *****