CLEMENT RAVICHANDRAN Vs. OM SINDHOORI CAPITAL INVESTMENT LIMITED

JUDGEMENT

(1.) THIS revision is preferred against the order of VI Additional Judge, City Civil Court, Chennai, made in I. A. No. 3512 of 1999 in O. S. No. 2405 of 1998, dated 28-11-2001, dismissing the petition filed under Or. 37 R. 4 C. P. C. declining permission to defend the suit. The Defendants are the Revision Petitioners.

(2.) THE case of the Plaintiff is that the Defendants had entered into an agreement with the Plaintiff on 10-11-1994. Under the terms of the agreement, the Plaintiff agreed to arrange a loan of Rs. 4,85,000/- for the Defendants. The loan was for a period of 12 months and 10 days at the rate of interest of 22% per annum payable quarterly. The loan was repayable on 19-11-1995. The Defendants and the Plaintiff had executed the agreement on 10-11-1994. Thereafter, the Plaintiff had advanced a sum of Rs. 4,85,000/-, deducting service and documentation charges by two cheques of Rs. 2,04,250/- and Rs. 2,68,125/- dated 10-11-1994 and 21-11-1994 respectively. The Defendants had also executed a demand promissory note in favour of the Plaintiff promising to repay the loan amount jointly and severally together with interest at 22% per annum. The loan fell due on 19-11-1995. Even then, the Defendants have not paid the loan amount and the arrears of interest. Hence,the Plaintiff was constrained to pay the amounts to the lenders as per the terms of the agreement and therefore, the Plaintiff is entitled to recover the amount from the Defendants. Hence, the Plaintiff has filed the suit to direct the Defendants to pay a sum of Rs. 6,51,500/- jointly and severally and also service charges at 2. 5 % per quarter on the principal amount of Rs. 4,85,000/ -.

(3.) THE Defendants have filed I. A. No. 3512 of 1999 in O. S. No. 2405 of 1998 seeking the permission of the Court to defend the suit. In the affidavit, the Defendants have briefly stated the circumstances under which they signed in the agreement and the promissory notes. According to the Defendants, they approached the Plaintiff on 10-11-1994 for a loan of Rs. 2,10,000/ -. The Plaintiff agreed to arrange for the loan on condition that the first Defendant is to sign an agreement and also Power of Attorney in favour of the Plaintiff and also to give shares worth Rs. 5 to 6 lakhs and giving power to the Plaintiff to deal with the same. Accordingly, the first Defendant is alleged to have signed in the blank and unfilled Agreement Form and also the Power of Attorney on 10-11-1994. Further, the Defendants have also pleaded that the real beneficiary is one Sundar and that the Defendants have executed the promissory notes as additional security for the loan amount mentioned in the agreements dated 10-11-1994 and 21-11-1994. The Defendants have set forth the plea that the suit promissory note is not supported by consideration. Stating that they have substantial defence to offer, the Defendants have filed I. A. No. 3512 of 1999 seeking the permission of the Court to defend the suit.