DARASHAW & COMAPNY PRIVATE LTD Vs. KAPIL KUMAR

JUDGEMENT

(1.) BY this application the defendant seeks leave to defend the suit filed by the plaintiff under Order XXXVII CPC.

(2.) LEARNED counsel for the defendant/ applicant states that by mere issuance of a cheque it cannot be presumed that the defendant was liable to pay a debt and the cheque was issued in discharge of the liability. Since the plaintiff in the entire plaint has not shown that a concluded contract which was legally enforceable, with regard to sale and purchase of Convertible Warrants was entered between the parties and the defendant on that account was indebted to pay to the plaintiff the amount mentioned in the cheque, the plaintiff cannot be granted the permission to seek a judgment against the defendant by way of summary procedure. In the entire plaint or the documents enclosed it is nowhere stated that the possession of the 7,50,000 Convertible Warrants was handed over to the defendant. The cheque that was dishonoured was thus issued in discharge of the liability. From a perusal of the e -mails between the parties a clear inference can be drawn that the possession of the Convertible Warrants was never handed over, and thus Order XXXVII CPC has no application to the facts of the present case. Thus, leave to defend be granted to the defendant.

(3.) HEARD learned counsel for the parties. The facts pleaded in the plaint are that the defendant is a promoter/ managing director of M/s. Brushman (India) Limited a company registered under the Companies Act. Brushman (India) Limited issued 36,50,000 Convertible Warrants of Rs. 10/ - each at a premium of Rs. 115/ - to its promoters and others on preferential basis. As per the terms of issue of Convertible Warrants a sum of Rs. 12.50 per Convertible Warrant was to be paid at the time of making the application. The plaintiff applied for 7,50,000 Warrants and forwarded a cheque along with the application. The plaintiff was finally allotted 7,50,000 Convertible Warrants on 22nd June, 2007 amounting to Rs. 93,75,000/ - By his letter dated 27th October, 2007 the defendant approached the plaintiff for purchase of the Convertible Warrants of Brushman (India) Limited which were allotted to the plaintiff. The plaintiff by its letter dated 14th November, 2007 consented to sell the same to the defendant at Rs. 12.50 per Convertible Warrant. The defendant by his letter dated 2nd January, 2008 forwarded to the plaintiff two cheques dated 3rd January, 2008 and 25th January, 2008 bearing numbers 623498 and 179070 amounting to Rs. 23,43,750/ - and Rs. 70,31,250/ - respectively. Though the first cheque of the defendant for Rs. 23,43,750/ - got cleared and the plaintiff received the payment of the same, however the defendant by his e -mail dated 22nd January, 2008 stated, inter alia, that he could get the balance amount proceeds funded only after producing the proof that 25% of the payment of the Warrants has been made by him. He needed three clear weeks from the date of payment of 25%. The defendant kept on postponing the payment, when finally the plaintiff deposited the defendant's second cheque being cheque no. 179070 for Rs. 70,31,250/ - which was dishonoured due to "insufficient funds". The defendant gave another cheque to the plaintiff's representative being cheque No. 225308 dated 22nd July, 2008 amounting to Rs. 70,31,250/ - for payment of the balance amount of 7,50,000 Convertible Warrants of Brushman (India) Limited, agreed to be purchased by the defendant from the plaintiff. The defendant again requested not to deposit the cheque and when finally the plaintiff deposited the aforesaid cheque on 3rd December, 2008 the same was returned dishonoured with the remarks "funds insufficient". The plaintiff filed a criminal complaint under Section 138 of the Negotiable Instruments Act and the present suit under Order XXXVII CPC.