ANAND KUMAR Vs. ANIL ARORA

JUDGEMENT

(1.) The Plaintiff filed a Suit against the Defendants for recovery of Rs. 1,20,48,788/- with pendentelite and future interest @ 18% per annum under Order 37 of the Code of Civil Procedure. The Plaintiff filed an application being IA NO. 1468/2003 for amendment of the Plaint which was allowed vide order dated 5th February, 2003. By way of amendment they made certain additional averments and also claimed interest prior to the institution of the Suit. It is the case of the Plaintiff that he is engaged in the business of investments. Defendant No.2 which is a Company incorporated under the provisions of the Companies Act, 1956 with its registered office at 8/28 Abdul Aziz Road, WEA Karol Bagh, New Delhi. The Defendants are stated to be stock and share brokers having membership of the National Stock Exchange of India Limited. Defendant No.1 is the Director of the Defendant No.2. Plaintiff had friendly and cordial relations with Defendant No.1 and his brother Narender Kumar Arora for last more than a decade and the Defendant used to borrow money from the Plaintiff from time to time with utmost fair and frank dealings and therefore have attained a climate of mutual trust and confidence. During the dealings the defendant No.1 borrowed on behalf of Defendant No.2 loans of the following description :- <FRM>JUDGEMENT_836_ILRDLH14_2005Html1.htm</FRM>

(2.) Out of the said amount which was given to the Defendants by cheques the Defendants had executed promissory notes and had also paid a sum of Rs. 8 lacs on 24th March, 2000 as against the amount borrowed of Rs. 23 lacs on 10th January, 2000. This amount was paid by cheque. The Defendants paid part of the interest by different cheques during the period of 5.9.2000 to 28.6.2001 but in June 2001 they stopped making the payment of interest as well as the principal amount. Despite persuasions by the Plaintiff the Defendants had not cleared the liability. Defendant No.1 also issued cheques duly signed by him on behalf of the Defendant No.2 for an amount aggregating to Rs. 91 lacs on various dates, the details of which have been given in para 13 of the Plaint but later on the cheques were returned unpaid with the reason payment stopped by drawer . According to the Plaintiff the Defendants are liable to pay a sum of Rs. 1,20,48,788/- which includes Rs. 95,02,400/- on account of principal plus Rs. 25,46,388/- on account of interest. The Plaintiff also served a notice upon the Defendants on 5th January, 2002 annexed as Annexure E to the Plaint calling upon them to make the payment of the said amount with interest. Despite service of notice no response was received by the Defendants compelling the Petitioner to file the present Suit on the basis of the cheques. This is the pleaded case of the Plaintiff in the Plaint.

(3.) The Suit being under the provisions of Order 37 of the Code of Civil Procedure summons were issued to the Defendants who filed appearance and thereafter the Plaintiff filed an application being IA NO. 403/2004 praying for leave to judgment while IA 2810/2004 was filed by the Defendants under Order 37 Rule 3 of the CPC seeking leave to defend unconditionally. Thus, by this order I would dispose of both these applications. The case of the Defendants in the application for leave to defend is that the transaction between the Plaintiff and the Defendants were relating to sale and purchase of shares. From time to time the amount which was due to either party as indicated in the settlement was recorded in the books maintained and in order to recover the debt balance as a consequence of some of these transactions for which the cheques in question were given by the Plaintiff on various dates to reduce the debt balance standing to his account. Eventually, when the dealing between the parties ceased on 27th June, 2001 there was left a debt balance of Rs. 35,238.92 in the account of the Plaintiff. Therefore, the so called loan was not actually a loan but payment in adjustment of debt balance as a consequence of sale and purchase of shares on behalf of the Plaintiff.