HARIHAR DAVEY Vs. KAMLESH STEEL ENTERPRISES

JUDGEMENT

(1.) THE plaintiff has filed the suit claiming a sum of Rs. 17,70,000/= from the defendants with interest at the rate of 12% per annum from the date of plaint and till date of realisation and for costs.

(2.) THE gist of the plaintiff's case is as follows:-The plaintiff is the uncle of defendants 2 and 4 who are carrying on business in the name and style of M/s. Kamlesh Steel Enterprises. To tie over the financial difficulties, they approached the plaintiff in the year 1995 and from time to time, the plaintiff has been paying amounts to the defendants on the understanding that the amounts should be repaid at a nominal interest of 12% per annum. By statement of accounts, the defendants acknowledged receipt of payment of Rs. 20 lakhs as on 31. 3. 1996. Subsequently, the defendants paid a sum of Rs. 5 lakhs on 15. 11. 1998 and thus as on 1. 12. 1998 a sum of Rs. 15 lakhs was due towards principal account. The defendants were regularly paying interest upto September, 1999 and also sued to send TDS forms. However, from October 1999, they have not deposited the TDS amount for the period April 199 to September 1999 even though it was paid. The cheque for Rs. 5 lakhs dated 4. 12. 2000 was dishonoured on presentation. Considering the close relationship, the plaintiff did not take legal action. Thereafter, the defendants refused to pay even interest, besides the principal amount of Rs. 15 lakhs. Then the plaintiff initiated criminal proceedings under Section 138 of the Negotiable Instruments Act for dishonour of cheques. The plaintiff also issued a lawyer's notice on 28. 3. 2001 calling upon them to pay the principal amount with 12% interest, for which the defendants 3 and 4 sent reply notice containing false and unsustainable allegations and denying the liability. Hence the plaintiff has filed the suit for recovery of the suit claim.

(3.) THE defendants 3 and 4 have filed a common written statement, gist of which is as follows:-The plaintiff is the paternal uncle of the defendants 2 and 4. The third defendant is the mother-in-law of the second and 4th defendant. Though the defendants 2 to 4 were Partners of the first defendant firm, the business was virtually conducted by the husband of the second defendant. The defendants 3 and 4 were not aware of any of the transactions took place with the plaintiff. On account of differences between the Partners, the firm was dissolved and the defendants 3 and 4 retired from the firm on 1. 4. 1998 and hence they have nothing to do with the affairs of the first defendant firm. There were no financial difficulties. These defendants never approached the plaintiff for financial help. These defendants had not confirmed the statement of accounts as on 31. 3. 1996 or thereafter they owe any amount to the plaintiff till they retired from partnership firm. These defendants had not paid any amount, much less, Rs. 5 lakhs on 15. 11. 1998 to the plaintiff.