ANIL ARORA Vs. ANAND KUMAR

JUDGEMENT

(1.) THE question which is to be considered in this appeal under Clause x of the Letters Patent is whether the learned single Judge was right in granting leave to the appellants to defend the summary suit filed by the respondent on the condition that the appellants shall furnish security of an immovable property to the extent of the suit amount. The respondent has filed the suit under Order XXXVII of the Code of Civil Procedure for recovery of Rs. 1,20,48,788/- with pendent lite and future interest @ 18% p. a. Later the respondent filed an application for amendment of the plaint which was allowed by the Court. By way of amendment the respondent made certain additional averments and also claimed interest prior to the institution of the suit. The respondent's case as pleaded in the plaint is that he is engaged in the business of investment. The appellant No. 2 is a company incorporated under the provisions of Companies Act, 1956 dealing in stocks and share broking and is having membership of the National Stock Exchange of India limited. The appellant No. 1 is the Director of the appellant No. 2 company. The respondent had friendly and cordial relations with the appellant No. 1 and his brother for more than a decade and the appellants used to borrow money from the respondent from time to time. During the dealings the appellants borrowed loans of the following description: <FRM>JUDGEMENT_571_DRJ104_2008Html1.htm</FRM>

(2.) OUT of the said amounts which were given to the appellants by cheques, the appellants had executed promissory notes and also repaid a sum of Rs. 8 lacs on 24th March 2000 by cheque as against the amount borrowed of Rs. 23 lacs taken on 10th January, 2000. The appellants paid part of the interest by different cheques during the period of 5th September, 2000 to 28th June, 2001 but in June; 2001 the appellants stopped making the payment of interest as well as the principal amount. Despite persuasion by the respondent, the appellants had not cleared the liability. The appellant no. 1 also issued cheques duly signed by the appellant No. 1 on behalf of appellant 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 respondent the appellants are liable to pay a sum of Rs. 1,20,48,799/- which includes Rs. 95,02,400/- on account of principal plus Rs. 25,46,388/- on account of interest.

(3.) THE suit being under the provisions Order XXXVII of the Code of Civil procedure summons was issued to the appellants who filed appearance and thereafter the respondent filed an application being IA No. 403/2004 praying for leave to judgment while IA No. 2810/2004 was filed by the appellants under Order XXXVII Rule 3 CPC seeking leaving to defend unconditionally.