MOHD ASHQIN Vs. RANBIR SINGH SIWAN

JUDGEMENT

(1.) This appeal arises out of a judgment and decree passed by the Additional District Judge, Delhi whereby an application seeking leave to defend filed by the appellants under Order XXXVII Rule 3 has been dismissed and the suit for recovery of Rs. 5 lakhs with interest at 10% decreed with costs.

(2.) The plaintiff"s case as set out in the plaint was that the defendant had approached him for financial assistance to the tune of Rs. 5 lakhs which amount was advanced to the defendants in terms of an agreement executed between the parties on 17th May, 2002. The agreement, inter alia, provided that the amount borrowed by the defendant would be utilized in the partnership business carried on by them and that out of the profits earned by the said partnership, the plaintiff would receive 40% while the remaining 60% would be shared by the two defendants. Clause 4 of the agreement executed between the parties admitted the receipt of Rs. 3 lakhs by the defendants out of the total amount of Rs. 5 lakhs and provided for payment of the remaining 2 lakhs within a period of two months thereof. In the event of failure of the plaintiff to make the payment of the balance amount of Rs. 2 lakhs, his share in the profit of partnership was to stand reduced by 7% which would then go to defendant Mohd. Ashqin taking his share from 35% to 42%.

(3.) Apart from the agreement aforementioned, a partnership deed also, it appears, was executed on the very same date between the parties in which again, the receipt of Rs. 3 lakhs was acknowledged by the defendants while the balance of Rs. 2 lakhs was agreed to be paid to them within 2 months. What is significant is that although the document executed between the parties described the same to be a partnership, the plaintiff had taken no responsibility to share the loss, if any, suffered by the firm. The so-called partnership could be terminated by giving a notice of two months to the defendant whereupon the defendants were obliged to repay the entire amount of Rs. 5 lakhs borrowed by them from the plaintiff.