SUMANLATHA MEHTA Vs. N V SUNDARAM

JUDGEMENT

(1.) CHALLENGE in this appeal is the judgment and decree in O.S.No.4134 of 2000 whereby the VI Additional Judge, City Civil Court, Chennai has decreed the suit holding that Defendants 1 to 3 are jointly and severally liable to pay a sum of Rs.6,72,500/- together with subsequent interest at the contracted rate of 36% per annum from the date of suit till the date of realisation. Unsuccessful Defendants are the Appellants.

(2.) CASE of Plaintiff is as follows:- 1st Defendant is the Proprietrix of the Company M/s.S.B.A. Traders dealing with the trading of shares. At the invitation of Defendants, Plaintiff invested a sum of Rs.5,00,000/- in 3rd Defendant's Company for which Ex.A1-agreement [30.06.1996] was entered into. As per Ex.A1-agreement, Defendants agreed to repay the said amount by investing the same for a period of 90 days, subject to a maximum period of 120 days which shall carry an interest of 36% per annum. In order to discharge the said liability of the Defendants, 1st Defendant issued Ex.A2-cheque [30.05.1997] for Rs.6,60,000/-. When Ex.A2-cheque was presented into the State Bank of India, Salem Branch on 02.06.1997, the said cheque was dishonoured for "insufficient funds". Plaintiff issued Ex.A13-legal notice [19.06.1997] under Negotiable Instruments Act. Thereafter, the 2nd Defendant approached the Plaintiff and paid Rs.1,25,000/- and agreed to pay the balance amount in seven instalments, six of which at Rs.90,000/- each and the last one at Rs.22,000/- as final instalment. On that basis, 2nd Defendant issued seven cheques [Exs.A3 to A9] which also when presented were dishonoured by the Defendants' bankers. Plaintiff informed the Defendants about the dishonour of cheques and called upon them to make payment. Defendants have totally paid a sum of Rs.3,80,000/- on various dates towards principal and interest. According to Plaintiff, still there was an outstanding of Rs.7,77,745/- due as on October 1999 and Ex.A15-notice was issued on 16.11.1999 calling upon the Defendants to pay a sum of Rs.7,77,745/-. The agreed rate of interest was at 36% per annum. Restricting the claim to Rs.6,72,500/-, Plaintiff has filed the suit for recovery of a sum of Rs.6,72,500/- payable at the contracted rate of interest at 36% per annum from the date of suit till the date of realisation.

(3.) UPON consideration of oral and documentary evidence, trial Court held that it was not disputed that the amount was invested by the Plaintiff with the 3rd Defendant Company. Pointing out the return of the cheques and referring to the recitals in Ex.A1- agreement, trial Court held that as per Ex.A1-agreement, 1st Defendant has agreed to repay the amount with interest at the rate of 36% per annum and hence, he cannot evade payment of suit amount to the Plaintiff. Pointing out that the payments made by the 1st Defendant has been deducted, trial Court decreed the suit as prayed for. Challenging the impugned judgment, Defendants have preferred this appeal.