GULATI ASSOCIATES Vs. KEERAT LEASE FINANCE LIMITED

JUDGEMENT

(1.) The plaintiff has filed a suit under the provisions of Order 37 of the Code of Civil Procedure, 1908 (hereinafter referred to as the said Code) for recovery of a sum of Rs.23,10,000/- along with future interest @18% per annum.

(2.) It is the case of the plaintiff that the defendant company is one of the promoters of a company M/s Domino Leathers Limited and in the year 1996 the said defendant company approached the plaintiff for promotion and marketing of the public issue of M/s Domino Leathers Limited and offered to the plaintiff to buy the shares of M/s Domino Leathers Limited, which shares were to be bought back at a price agreed between the parties. In this behalf an agreement dated 27.2.1996 is stated to have been executed. The original agreement has been titled as an Agreement of Safety Net by the defendant and two other companies in respect of the shares of M/s Domino Leathers Limited. The agreement was for the purchase of minimum of 7,50,000 lac shares and in view of the fact that the defendant was to buy back the shares, the defendant company handed over a post- dated cheque dated 1.6.1996 for Rs.25.00 lacs as security. The plaintiff claims to have performed part of its obligation by purchasing the shares of M/s Domino Leathers Limited and since the defendant company did not take delivery of the shares and remit the money, the post-dated cheque for Rs.25.00 lacs was presented, which was dishonoured.

(3.) The plaintiff claims that reconciliation of accounts took place between the parties on 8.7.1996 and again a post-dated cheque of Rs.12,16,056/- dated 31.8.1996 including the principal and interest was issued in favour of M/s Gulati Financial and Management Services Pvt. Ltd., controlled by the proprietor of the plaintiff. The problem did not get resolved and neither delivery of shares were taken nor money paid with the result that the said cheque was presented and again bounced.