B B PATEL Vs. NEXIM EXPORTS PRIVATE LIMITED

JUDGEMENT

(1.) . This suit under Order 37 of the Code of Civil Procedure was instituted by the plaintiff against the defendants for recovery of Rs.24,20,000/- with costs and interest. Vide orders dated 3.5.1993, the defendant's application for leave to defend was granted subject to certain conditions.

(2.) The plaintiff's case as set out in the plaint, briefly stated, is that the plaintiff is the sole proprietor of M/s Nikoleon Brothers. The defendant No.1 is a private limited company and defendant No.2 is its Managing Director and a party to the contract. The plaintiff alleged that the plaintiff and defendants were having good business relations and had joined hands in many business deals helping one another. In the month of September, 1988, the defendant No.2 approached the plaintiff for financial assistance. He asked for a short term temporary loan of Rs.20 lacs which was to carry interest at the rate of 21% per annum. The defendant No.2 assured the plaintiff that the loan would be returned on or before 31.12.1988 as his payments from a foreign party were expected before 30.12.1988. The plaintiff agreed to the suggestion and as such, gave two cheques of Rs.10 lacs each to the defendants which were drawn on Union Bank of India. The cheques were received by defendant No.2 in terms of the conditions laid in the vouchers. The defendants encashed the said cheques but the amount was not paid back on 31.12.1988 as agreed. The plaintiff raised demands but the defendants kept on giving him false assurances. The plaintiff sent a registered AD letter dated 7.1.1989 calling upon the defendants to pay the amount. A legal notice dated 20.1.1989 was also sent by the plaintiff to the defendants calling upon them to liquidate the loan amount but no payment was made. The plaintiff as such, claimed a sum of Rs.20 lacs as principal amount and a sum of Rs.4,20,000/- as interest thereon from September, 1988 to September, 1989. The plaintiff also claimed costs of the suit and pendente lite and future interest at the rate of 21% per annum from the date of filing of the suit till realisation.

(3.) The defendants filed a written statement raising preliminary objections that the suit filed by the plaintiff was without any cause of action and based on false, fabricated, tempered with and interpolated documents. It was submitted that the plaintiff had tried to push a "general voucher" as a "receipt voucher" before the Court with an intention to mislead the Court. It was stated that at the time when the defendant No.2 signed the vouchers only the name of the defendant Company, defendant No.1, was mentioned. Everything else was added on the vouchers later on. It was stated that defendant No.2 had signed these general vouchers in good faith when these were not having revenue stamps even. On merits, it was pleaded that the plaintiff may be put to strict proof that he was the sole proprietor of M/s Nikoleon Brothers. It was denied that the defendants had ever faced any financial crisis or approached the plaintiff for a temporary loan as alleged. It was stated that a cock and bull story had been set up by the plaintiff to show that the payment of Rs.20 lacs was a loan. It was pleaded that the plaintiff had approached the defendants for helping him in the execution of an export order and in exchange of defendants' expertise and know-how, had proposed to give them a sum of Rs.20 lacs as fee. It was submitted that the defendant No.2 had been doing business in USSR for several years. It was reiterated that the payment of Rs.20 lacs was made by M/s. Nikoleon Brothers to defendant No.l towards consultancy fee for rendering export know-how and as such, the case as set up in regard to the loan transaction, was false. The plaintiff filed a replication to the written statement of the defendants controverting the pleas raised by the defendants and re-asserting the averments made in the plaint.