LALIT KUMAR BAGLA Vs. RAKESH GUPTA

JUDGEMENT

(1.) By this application I propose to dispose of the present application filed by the Defendant under Order XXXVII Rule 3 of the Code of Civil Procedure, seeking leave to defend the suit. The Suit, is for the recovery of RS. 43,92,000.00 (Rs. Forty three lakhs and ninety two thousand only). Briefly stated, the case in the plaint is that the Defendant had signed a cheque for a sum of Rs. 36,00,000.00 (Rs. Thirty six lakhs only) which upon presentation was dishonoured with the endorsement "insufficient funds". Mr. S.K. Kaul, Learned Senior Counsel appearing for the Defendant has

(2.) contended that the cheque was undoubtedly given towards the settlement of dues by the Defendant. However, the terms of agreement in this respect were contained in an Agreement dated 26th August, 1996, a photo copy of which is available on the Court records. This document is not in dispute. Mr. Kaul has drawn attention to Clause 4 of this Agreement which reads as under:-

(3.) The contention is that while there is no dispute that the Cheque for Rs. 36,00,000.00 was not honoured, the consequences were clearly envisaged between the parties-and were mainly that the shareholding of the Defendant would stand transferred to the plaintiff. The content of Mr. Kaul is that since the value of the shares has hit rock-bottom, the plaintiff has filed the Present suit for the recovery of money. Had the shares retained the value that they commanded in August 1996, or had subsequently increased, the plaintiff would have accepted the shareholding of the Defendant with alacrity. The Agreement between them spelt out that on the dishonour of the cheque the remedy would be by way of transfer of shareholding. It is his submission that in view of the Agreement between the parties, the present suit for recovery of the value of the cheque, together with interest thereon, is not maintainable. He has relied on the judgments of the Hon'ble. Supreme Court to the effect that a legitimate defence has been raised and that the Defendant is entitled to leave to defend. Since the Agreement dated 26.8.1996 is not in dispute, prima facie it appears to me that the argument is well-founded.