RANA INDERJIT SINGH Vs. KEMBIOTIC LABORATORIES

JUDGEMENT

(1.) THIS is an application for leave to defend the suit for recovery of Rs. 53,50,000/ - with future interest at 18% per annum from the date of institution of the suit till realization, filed under the provisions of Order 37 of the Code of Civil Procedure.

(2.) THE suit has been filed on the basis of eleven dishonoured cheques dated from 20th December, 2002 to 25th January, 2004, for varying amounts totaling Rs 53,50,000/ - issued by the defendant No. 1 firm, in which the defendant Nos 2 to 4 are partners, in the name of the plaintiff. It is the case of the plaintiff that he is a permanent resident of Canada and is engaged in export business of Bio Chemical products and used to provide raw materials to the defendants; that in the year 2001, the defendants offered the plaintiff to collaborate with the defendants' business on 50% share holding basis and requested the plaintiff to advance loan of Rs 53,50,000/ - and assured the plaintiff that after receiving the said amount from the plaintiff, requisite formalities will be carried out by the defendant firm vis -a -vis the collaboration. The plaintiff claims to have given a sum of US $ 113829.78 equivalent to Rs 53,50,000/ - to the defendants and which are stated to have been duly received by the defendant No. 2 as a partner of the defendant No. 1 firm. It is further pleaded that the defendant No. 2 assured the plaintiff that till the completion of the necessary formalities with regard to the collaboration, the said amount of Rs 53,50,000/ - shall remain as loan with the defendants and upon the failure of the defendants to complete the requisite formalities, the defendants shall refund the said sum of Rs 53,50,000/ - to the plaintiff. It is further the case of the plaintiff that the defendants failed to carry out the formalities of the collaboration in spite of repeated assurances and reminders and upon the plaintiff requesting the defendants to return the said amount, the defendants in acknowledgement of their liability issued the aforesaid cheques totaling Rs 53,50,000/ - in favour of the plaintiff. Upon dishonour of cheques, proceedings under Section 138 of Negotiable Instruments Act were initiated by the plaintiff against the defendants and thereafter the present suit was filed.

(3.) THE plaintiff has filed the reply to the application for leave to defend denying all the contents therein. Arguments in the application for leave to defend were heard in part on 5th March, 2007 when the following order was made: