SANJAY STEEL Vs. KAPIL KUMAR TAYAL

JUDGEMENT

(1.) The respondent no.1 had filed a suit against the appellants and respondent no.2 for recovery of Rs. 5,51,000/- under Order XXXVII of the Code of Civil Procedure and the same came to be decreed consequent upon the dismissal of appellants application for leave to defend which was moved under order XXXVII Rule(3) 5 CPC. The appellants, who were defendants no. 1 and 2 in the suit, have challenged the order dated 5th April, 2006 passed by the learned Additional District Judge dismissing their application for leave to defend the suit.

(2.) The respondent no.1(who shall hereinafter be referred to as the plaintiff) had filed a suit on the allegations that he had advanced a cash loan of Rs.5,00,000/-(Rupees five lacs only) to the appellants and respondent no.2(who shall be referred to as the defendants) on 1st November,2004. Appellant no. 1 is a partnership firm and appellant 2 and respondent no.2, both are brothers, were its partners and there is some relationship also between them and the plaintiff. The loan was repayable with interest @ Rs.1.20 per hundred and in order to secure the repayment of the loan amount the defendants had given to the plaintiff a post-dated cheque no. 499112 dated 8- 12-04 drawn on State Bank of Bikaner and Jaipur, Naraina Industrial Area, Phase-II, New Delhi for Rs.5,00,000/-. The defendants had executed a receipt also on 1st November, 2004 in token of their having received the loan amount and in that receipt the defendants had also agreed to re-pay the loan on demand. It was further pleaded in the plaint that the plaintiff had called upon the defendants to repay the loan amount on 1st December, 2004 along with interest accrued thereupon as he was in urgent need of money and at that time the defendants no. 2 and 3, who are now appellant no.2 and respondent no.2 herein respectively, had told the plaintiff to present the above referred post-dated cheque on its due date. However, on presentation to the defendants bank that cheque was dishonoured and returned back to the plaintiff by his bank vide memo dated 15- 12-04 with the remarks insufficient funds. The defendants having failed to make the payment of the cheque amount as also the interest on the loan amount despite their having been called upon to make the payment vide notice dated 22nd December, 2004 the plaintiff filed suit for recovery of Rs. 5,51,000/- out of which the amount of Rs. 5,00,000/- was the principal loan amount and Rs. 51,000/- was claimed as interest.

(3.) In their application for leave to defend the suit filed under Order XXXVII Rule 3(5) CPC the defendants had claimed that in January, 2002 the defendants required financial assistance as they had suffered huge losses in their business. Plaintiffs father Mr. G.S. Tayal, who was known to defendant no. 2, had approached the defendants and had told them that he could arrange loan for them for their business needs. Mr. G.S. Tayal at that point of time had take some blank signed papers from the defendants and three advance receipts of the total loan amount of Rs. 11,00,000/-. One receipt dated 16th January, 2002 was for Rs. 4,00,000/- in favour of Mr. G.S. Tayal, the second one was dated 31st January, 2002 for Rs. 2,00,000/- in favour of Mr. G.S. Tayals son Mr. Devender Kumar Tayal and the third receipt dated 16th January, 2002 was for Rs. 5,00,000/- in favour of Mr. G.S. Tayals wife Smt. Munni Tayal. It was further claimed that at the time of signing of these receipts by the defendants Mr. G.S. Tayal had represented to them that he would have the cheques for the loan amounts prepared and delivered to them and at that time it was also the understanding arrived at that the said amount of Rs. 11,00,000/- would become payable only after 31st March, 2006 and in order to secure the repayment of the loan amounts Mr. G.S. Tayal had taken blank undated cheques from the defendants to be kept only as a security and to be presented for encashment only after 31st March, 2006. Subsequently, Mr. G.S. Tayal had handed over the cheques for the afore-said loan amounts to the defendants and the same were encashed. In October,2004 the defendants required more money again Mr. G.S. Tayal told defendant no. 2 that he could arrange more money also and at that time also he had told the defendants that they will have to first execute receipts in advance and thereafter he would deliver the cheques. Since the defendants were not doubting the intentions of Mr. G.S. Tayal they executed three receipts on 1st November, 2004 out of which one was for Rs. 5,00,000/- in faovur of Mr. G.S. Tayals son Kapil Kumar Tayal, the plaintiff, second one was for Rs. 5,00,000/- in favour of Mr. Devender Kumar Tayal and the third one was for Rs. 10,00,000/- in favour of Mrs. Munni Tayal. This time, however, Mr. G.S. Tayal despite having obtained the said three receipts from the defendants did not give them the cheques on account of the loan amounts mentioned in the said three receipts dated 1st November, 2004. The defendants, in the afore-said circumstances, claimed that the cheque for Rs. 5,00,000/-, on the basis of which the suit had been filed by the plaintiff Kapil Kumar Tayal was without consideration and, therefore, no suit could be filed on the basis of that cheque. It was also pleaded that Mr. G.S.Tayal was a retired Government servant and so he could not have arranged such a huge cash loan and the source of loan required to be investigated by CBI.