IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUMMARY SUMMARY SUMMARY SUIT NO.297 OF 2008 SUIT NO.297 OF 2008 SUIT NO.297 OF 2008 WITH WITH WITH SUMMONS SUMMONS SUMMONS FOR JUDGMENT NO.157 OF 2008 FOR JUDGMENT NO.157 OF 2008 FOR JUDGMENT NO.157 OF 2008 Satish Bhuva .. Plaintiff Versus CRC Carrier Ltd & Anr. .. Defendants AND AND AND SUMMARY SUMMARY SUMMARY SUIT NO.220 OF 2008 SUIT NO.220 OF 2008 SUIT NO.220 OF 2008 WITH WITH WITH SUMMONS SUMMONS SUMMONS FOR JUDGMENT NO.158 OF 2008 FOR JUDGMENT NO.158 OF 2008 FOR JUDGMENT NO.158 OF 2008 IN IN IN SUMMARY SUMMARY SUMMARY SUIT NO.220 OF 2008 SUIT NO.220 OF 2008 SUIT NO.220 OF 2008 Trupti Bhavesh Sanghavi .. Plaintiff Versus CRC Carrier Ltd & Anr. .. Defendants --- Mr.Tushar Garodia for the plaintiff. Ms.Leena Temkar for the defendants. --- CORAM CORAM CORAM : A.S.OKA, J. : A.S.OKA, J. : A.S.OKA, J. DATE DATE DATE ON WHICH JUDGMENT IS ON WHICH JUDGMENT IS ON WHICH JUDGMENT IS RESERVED RESERVED RESERVED : 17th December 17th December 17th December 2008. 2008. 2008. DATE DATE DATE ON WHICH JUDGMENT IS ON WHICH JUDGMENT IS ON WHICH JUDGMENT IS PRONOUNCED PRONOUNCED PRONOUNCED : 21st January 2009. 21st January 2009. 21st January 2009. JUDGMENT: JUDGMENT: JUDGMENT: . In Summary Suit No.297 of 2008 the plaintiff is claiming a decree in the sum of Rs.09,91,181,15/- with 2 further interest on sum of Rs.04,77,500/- at the rate of 15% per annum from the date of institution of the suit till realisation of the amount. The case made out by the plaintiff is that on 18th November 1989 the 1st defendant for valuable consideration of a sum of Rs.5 lakhs received from the plaintiff, drew a bill of exchange directing thereby the 2nd defendant to pay to the plaintiff or order at Bombay a sum of Rs.5 lakhs on demand. According to the plaintiff the said bill of exchange was accepted by the 2nd defendant and was delivered to the plaintiff on the same day. According to the plaintiff it was agreed that the defendants would pay discounting charges at the rate of 15% per annum on the said amount of Rs.5 lakhs. 2. From time to time the 1st defendant drew new bills of exchange by way of renewal. Last of such bill of exchange was drawn on 24th May 2000 directing thereby the 2nd defendant to pay to the plaintiff or order a sum of Rs.5 lakhs on demand. The said Bill of Exchange was accepted by the 2nd defendant and was delivered to the plaintiff on the same day. According to the case of the plaintiff, the defendants paid a sum of Rs.37,825/- after deducting the TDS as and by way of discounting charges for the period from 24th May 2000 till 14th 3 December 2000. 3. On 15th December 2000 the plaintiff presented the bill of exchange dated 24th May 2000 to the 2nd defendant for payment and demanded from the 2nd defendant the amount due and payable thereunder. However, the 2nd defendant dishonoured the same by non-payment. According to the case of the plaintiff though the 1st defendant company was informed about the dishonour, the said company failed and neglected to pay the amount. It is contended that though the plaintiff is entitled to interest at the rate of 18% per annum on the amount of Rs.5 lakhs from the date of dishonour, the plaintiff was claiming interest at the rate of 15% per annum from the date of dishonour. 4. Reliance has been placed on the letter dated 07th July 2003 signed by the 1st defendants by which the 1st defendants confirmed of having received from the plaintiff the said amount of Rs.5 lakhs. Alongwith the said letter the 1st defendant forwarded a sum of Rs.2,500/- by cheque towards part payment of the said amount. By further letter dated 31st December 2004, the 1st defendants confirmed its liability and forwarded a cheque in the sum of Rs.20,000/- alongwith the said 4 letter towards part payment of the amount. By letter dated 26th November 2007 send by the advocate for plaintiff, the defendants were called upon to pay the outstanding amount with interest. The case of the plaintiff is that though the defendants received the notice, no reply was sent to the notice and the same was not complied with. Therefore, the present suit has been filed. 5. After the writ of summons was served to the defendants, the 2nd defendant did not enter appearance. However, the 1st defendant company entered the appearance within the time stipulated by law and therefore Summons for Judgment No.157 of 2008 has been taken out by the plaintiff as against the 1st defendant. 6. The 1st defendant company filed a reply to the summons for judgment. The first contention raised in the reply is that the alleged bill of exchange dated 24th May 2000 was executed by Shri.Subhash Agarwal on behalf of the 1st defendant but the said Mr.Subhash Agarwal was not authorised by a resolution of the Board to accept loan from the plaintiff. The second contention raised is that the claim for interest is time barred and in any case the plaintiff is not entitled to 5 recover interest in as much as the Bill of Exchange is silent about the payment of interest. The third contention is that the plaintiff is carrying on illegal business of money lending without possessing a valid licence as warranted under section 5 of the Bombay Money Lenders Act, 1946. Reliance has been placed on plaint in Summary Suit No.220 of 2008 filed by the plaintiff against the 1st defendant. The plaintiff filed a rejoinder. The plaintiff relied upon TDS certificates issued by the 1st defendant regarding deduction of TDS on the interest or discounting charges. It is contended that the said certificates have been signed on behalf of the 1st defendant by Mr.Subhash Agarwal. It was contended that the contention of the 1st defendant that Mr.Subhash Agarwal was not duly authorised by the Board is false and frivolous. Reliance was placed on part payments made by two cheques in the sum of Rs.2,500/- and Rs.20,000/- respectively. It was submitted that the defendants had agreed to pay discounting charges at the rate of 15% per annum and infact payments were made from time to time and even TDS deducted. It was contended that the provisions of the Bombay Money Lenders Act, 1946 will have no application to the case. As far as the 2nd defendant is concerned, the suit has been fixed for passing a decree under sub-rule 3 of Rule 2 of Order 6 XXXVII of the Code of Civil Procedure, 1908 (hereinafter referred to as the said Code). 7. The Suit No.220 of 2008 is filed for claiming a decree in the sum of Rs.02,01,518/- with further interest at the rate of 15% per annum on the sum of Rs.98,000/- from the date of suit till realisation. The defendants in both the suits are the same. The case of the plaintiff in this suit is that the 1st defendant for valuable consideration of a sum of Rs.01,00,000/- received from the plaintiff drew a Bill of Exchange directing thereby the 2nd defendant to pay to the plaintiff or order at Bombay a sum of Rs.01,00,000/- on demand. The said Bill of Exchange was accepted by the 2nd defendant and delivered to the plaintiff on the same day. According to the plaintiff it was agreed that the defendants would pay discounting charges at the rate of 15% per annum on the amount of Rs.01,00,000/-. 8. From time to time the 1st defendant drew new Bills of Exchange by way of renewal. Last of such is the Bill of Exchange dated 06th June 2000 in the sum of Rs.01,00,000/- drawn on the 2nd defendant. The case of the plaintiff is that even the said Bill of Exchange was accepted by the 2nd defendant and was delivered to the 7 plaintiff on the same day. The case of the plaintiff is that from time to time discounting charges were paid by the defendants and last of such amount of Rs.6,786/- was paid by cheque dated 24th October 2000. The said amount was paid by way of discounting charges for the period from 06th June 2000 to 06th December 2000. The said amount was paid after deducting the TDS. 9. The Bill of Exchange dated 06th June 2000 was presented by the plaintiff to the 2nd defendant on 07th December 2000 and demanded the amount due and payable thereunder. The 2nd defendant dishonoured the Bill of Exchange by non payment. Though the plaintiff called upon the 1st defendant to pay the amount, the 1st defendant failed and neglected to pay the same. The case of the plaintiff is that as per the provisions of the Negotiable Instruments Act, 1881 she is entitled to recover a sum of Rs.01,00,000/- from the defendants with interest at the rate of 18% per annum from the date of dishonour. It is contended that the plaintiff has restricted the claim towards interest at the agreed rate of 15% per annum from the date of dishonour. 10. Reliance has been placed by the plaintiff on letter dated 07th July 2003 addressed by the first 8 defendants by which they confirmed of having received a sum of Rs.01,00,000/- from the plaintiff and forwarded a sum of Rs.01,000/- by cheque towards part payment. Reliance is also placed on letter dated 31st December 2004 send by the 1st defendant confirming the liability to pay the amount to the plaintiff. The 1st defendant forwarded a cheque in the sum of Rs.01,000/- towards the repayment of the amount. 11. By advocate’s letter dated 26th November 2007 the plaintiffs called upon the defendants to pay the amount and the accrued interest thereon. It is contended that though the defendants received the said letter, they failed and neglected to pay the amount and therefore, the present suit has been filed. 12. As in the case of the other suit, the 1st defendant entered appearance and therefore the plaintiff has taken out Summons for Judgment No.158 of 2008 against the 1st defendant. The suit is placed on board for passing a decree against the 2nd defendant under the provisions of sub-rule 3 of Rule 2 of Order XXXVII of the said Code. To the summons for judgment, the 1st defendant filed a reply raising identical contentions which are raised by way of a reply to the summons for 9 judgment taken out in Summary Suit No.297 of 2008. There is a similar rejoinder filed by the plaintiff annexing the TDS certificates signed by Mr.Subhash Agarwal on behalf of the 1st defendant. 13. The learned counsel appearing for the plaintiff submitted in support of the summons for judgment taken out in both the suits that the 1st defendant has not disputed the suit Bills of Exchange. The only contention raised is that Mr.Subhash Agarwal who has signed the Bills of Exchange on behalf of the 1st defendant was not authorised by a Board Resolution to accept the loan from the plaintiff. He submitted that the said contention is frivolous as the 1st defendant has paid to the plaintiff in both the suits the discounting charges at the rate of 15% per annum after deducting the TDS, and the TDS certificates have been signed by Mr.Subhash Agarwal on behalf of the 1st defendant. He submitted that the 1st defendant has no defence and therefore the plaintiffs are entitled to a decree. The learned counsel appearing for the 1st defendant in both the suits reiterated the objections raised in the reply. Her submission is that the prayer for interest is time barred. She submitted that the 1st defendant has a sound defence and therefore a leave to 10 defend the suit deserves to be granted. She submitted that there are triable issues involved in the suit. 14. I have carefully considered the submissions. The main contention raised by the 1st defendant is that Mr.Subhash Agarwal who has admittedly signed the suit Bills of Exchange was not authorised to accept loan under any resolution passed by the Board of Directors of the 1st defendant. Perusal of the reply of the 1st defendant to the summons for judgment and in particular paragraph 1 thereof shows that the 1st defendant has not disputed the authority of Mr.Subhash Agarwal to sign, execute and draw a Bill of Exchange on behalf of the 1st defendant company. A very limited contention is raised that he had no authority to accept the loan on behalf of the defendant company. Thus, even according to the case of the 1st defendant, Mr.Subhash Agarwal has validly signed and executed the Bills of Exchange subject matter of the suits. The 1st defendants have not disputed that the said defendants received the amount mentioned in the Bills of Exchange. It is not the case of the 1st defendant company that the said amount was received by Mr.Subhash Agarwal on behalf of the 1st defendant. In fact the TDS certificates annexed to the rejoinder of the plaintiff show that TDS was deducted by the 1st 11 defendant from the discounting charges/interest payable by the 1st defendant. The TDS certificates have been signed by Mr.Subhash Agarwal. Therefore, the said defence raised by the 1st defendant is utterly frivolous. The 1st defendant has not placed any material on record to show that the provisions of the Bombay Money Lenders Act, 1946 are applicable to the transactions. Therefore, there is no merit in the said defence raised by the 1st defendant. 15. As far as the other defence is concerned, a specific case has been made out in paragraph 2 of the plaint that the defendants had agreed to pay discounting charges at the rate of 15% per annum on the amount incorporated in the Bills of Exchange. There is no denial by the 1st defendant of the said averments made in paragraph 2 of the plaint in both the suits. Even in the demand notice relied upon in the plaint the said assertion has been specifically made. The 1st defendants have not disputed the receipt of the demand notice. There is no reply admittedly issued by the 1st defendant to the demand notice. Therefore, the fact that the defendants had agreed to pay discounting charges at the rate of 15% per annum is not at all disputed by the 1st defendants. The contention of the 12 plaintiffs is that as per the provisions of the Negotiable Instruments Act, 1881, the plaintiff is entitled to 18% interest from the date of dishonour of Bills of Exchange. It is contended that the interest is however claimed at the rate of 15% per annum. 16. There is a confirmation of liability by letters dated 31st December 2004 in both the suits. In fact a part payment was made alongwith the said letter. Therefore, the defence of the 1st defendant that part of the claim of interest is barred by limitation has no merit. Therefore, this is a case where there is a no defence available to the 1st defendant and therefore summons for judgment will have to be made absolute. As far as the 2nd defendant is concerned, the plaintiff is entitled to a decree in view of sub rule 3 of Rule 2 of Order XXXVII of the said Code. 17. Now the only question which survives for determination is what should be the rate of interest for the period from the date of institution of the suit. Considering the nature of transaction, in my view interest deserves to be granted at the rate of 10% per annum. 13 18. Hence, I pass the following order: SUMMMARY SUMMMARY SUMMMARY SUIT NO.297 OF 2008 SUIT NO.297 OF 2008 SUIT NO.297 OF 2008 (a) The defendants are ordered and decreed to pay to the plaintiff a sum of Rs.09,91,181.15/- together with interest on the sum of Rs.04,77,500/- at the rate of 10% per annum from the date of institution of the suit till realisation. (b) The plaintiff will be entitled to recover costs of the suit from the defendants. (c) Summons for Judgment No.157 of 2008 is made absolute accordingly. SUMMARY SUMMARY SUMMARY SUIT NO.220 OF 2008 SUIT NO.220 OF 2008 SUIT NO.220 OF 2008 (a) The defendants are ordered and decreed to pay to the plaintiff a sum of Rs.02,01,518/- together with interest on 14 sum of Rs.98,000/- at the rate of 10% per annum from the date of institution of the suit till realisation. (b) The plaintiff will be entitled to recover costs of the suit from the defendants. (c) Summons for Judgment No.158 of 2008 is made absolute accordingly. (A.S.Oka,J)