WALAITI LAL KOHLI Vs. EARL CHAWLA P LTD

JUDGEMENT

(1.) THIS is a suit for recovery of Rs. 22,36,149/-. The case of the plaintiff is that defendant No.1 entered into a Memorandum of Under (MoU) with M/s Evita Foods Private Limited for purchase of its restaurant. Payment of Rs.11,00,000/- to defendant No.1 was made vide three cheques one cheque dated 18.3.1994 for Rs. 2,48,000/- and two cheques dated 23.3.1994 one for Rs.8,52,000/- and other for Rs.3,000/- all drawn in favour of M/s Evita Foods Private Limited. THIS is also the case of the plaintiff that the defendants agreed to secure repayment of aforesaid amount advanced by him along with interest, by executing two lease agreements in respect of purchase of the entire equipment of the restaurant of M/s Evita Foods Private Limited. In terms of the aforesaid arrangements, the defendants obtained delivery of the equipment from M/s Evita Foods Private Limited as also of the equipment worth Rs.2,50,000/- which they purchased from the market in the name of the plaintiff. It is alleged that the aforesaid amount of Rs.11,02,000/- along with interest amounting to Rs.3,10,954/- was agreed to be paid in 34 installments. The first installment of Rs.40,000/- was payable by 1.4.1994, second installment of Rs.1,20,000/- was payable by 1.6.1994, the third installment of Rs.21,455/- was payable on 1.8.1994, installments of Rs.37,183/- each were payable between 1.9.1994 and 1.2.1997 whereas the last installment of Rs.1,11,549/- was payable on 1.3.1997. The defendants, according to plaintiff, also agreed to pay interest @ 36% p.a. on the installments falling in arrears. The defendants made total payment of Rs.6,40,414/- to the plaintiff but did not pay the remaining installments and overdue interest. It is also alleged that the defendants involved the plaintiff as a nominee in their agreement with M/s Evita Foods Private Limited and showed purchase of entire equipment worth Rs.22,00,000/- in his name, showing payment of Rs.11,00,000/- by the plaintiff and rest by the defendants. The defendants obtained a cheque of Rs.1,00,000/- and a pay order of Rs.1,35,040/- in the name of M/s Evita Foods Private Limited and also informed the plaintiff that they had paid Rs.8,64,960/- in his account. The plaintiff has now claimed a sum of Rs.22,36,149/- being the balance amount due to him as principal sum and interest.

(2.) THE defendants have contested the suit and taken preliminary objection that the suit is barred by limitation, barred under the provisions of interest Act, this Court has no territorial jurisdiction to try the present suit and suit claiming interest on interest is barred by law. THEy have further alleged that MoU dated 18.3.1994 was executed between defendant No.1, M/s Evita Foods Private Limited and Shri Vishwant Kumar for purchase of restaurant equipment and premises bearing No. 51 Basant Lok, Vasant Vihar, New Delhi for a total consideration of Rs.35,00,000/-. As per the MoU, defendant No.1 and its nominee was to pay a sum of Rs.29,20,400/- and return equipment worth Rs.5,79,600/-. Defendant No.1 appointed the plaintiff as its nominee under the MoU for purchase of restaurant equipment of Rs.22,00,000/- from M/s Evita Foods Private Limited and the plaintiff, as nominee of defendant No.1, made payment of Rs.2,45,000/- vide cheque No. 634217 dated 18.3.1994 towards purchase of the equipment. It is further alleged that the plaintiff besides making aforesaid payment of Rs.2,45,000/- also made payment of Rs.8,52,000/- vide cheque No. 634221 dated 23.3.1994, Rs.3,000/-vide cheque No. 634222 dated 23.3,1994, Rs.1,00,000/- vide cheque No.032380 dated 22.4.1994 and Rs.1,35,040/- by pay order No. 090821 dated 1.6.1994 towards purchase of restaurant equipment from M/s Evita Foods Private Limited. THE balance amount was paid by defendant No.1 on behalf of the plaintiff. Defendant No.1 paid Rs.7,00,000/- in cash on 10.5.1994 and Rs.1,64,960/- in cash on 16.5.1994. Regarding the equipment valued at Rs.2,50,000/- from market, the case of the defendants is that this purchase was also made by the plaintiff. THE execution of the lease agreements dated 30.3.1994 has been admitted by the defendants but they have claimed that they were entered into in order to avail tax benefits. THE defendants have admitted payment of Rs.6,40,424/- to the plaintiff.

(3.) IT has been alleged in para 14 of the plaint that the defendants made payment of Rs.30,000/- on 22.3.1997, Rs.25,000/- on 5.5.1997, Rs.10,000/- on 22.7.1997, Rs.10,000/- on 2.8.1997, Rs.10,000/- on 1.9.1997, Rs.10,000/- on 8.9.1997, Rs.10,000/- on 25.11.1997 and Rs.10,000/- on 26.3.1997 along with the covering letters dated 22.3.1997, 5.5.1997, 22.7.1997, 2.8.1997 and 1.9.1997. These payments have not been disputed in the Written Statement and otherwise stand proved during trial. In view of the provisions contained in Section 19 of the Limitation Act, 1963, a fresh period of limitation started from each of the dates, on which payments were made. Computed from the dates of these payments, the suit having been filed on 2.8.1999 is well within limitation. The issue is decided against the defendants and in favour of the plaintiff.