SINHAR ESTATE BUILDERS P LTD Vs. B NATARAJ

JUDGEMENT

(1.) THIS appeal has been directed against the decree and Judgment in O.S.No.14562 of 1996 on the file of VII Additional Judge, City Civil Court, Chennai. The unsuccessful defendants have preferred this appeal.

(2.) THE averments in the plaint sans irrelevant particulars run as follows: THE first defendant is a Private Limited Company registered under the Indian Companies Act. THE second defendant is the Managing Director of the first defendant Company. THE plaintiff is the sole proprietor of Adhaye Finance And Investment. For the specific purpose of acquiring an immovable property, the first defendant had borrowed a loan of Rs.6,00,000/- from the plaintiff between the period 23.6.1987 and 20.11.1987 as detailed below. Date Borrowed Amount 23.6.1987 Rs. 50,000 07.8.1987 Rs.2,75,000 22.8.1987 Rs. 25,000 13.11.1987 Rs. 20,000 18.11.1987 Rs. 50,000 20.11.1987 Rs.1,80,000 Out of the said amount of Rs.6,00,000/- borrowed from the plaintiff, the first defendant had repaid a sum of Rs.2,25,000/- i.e., a sum of Rs.50,000/- on 5.4.1988 and Rs.1,75,000/- on 15.11.1988. A sum of Rs.3,75,000/- remains to be paid by the first defendant against the said loan. THE plaintiff had 1250 equity shares each to the value of Rs.100/- in the first defendant. THE first defendant had diverted the funds of the company to other companies controlled by the second defendant and the second defendant had resorted to falsification of the accounts and under statement of income to promote the other companies at the cost of the first defendant. THEre arose a dispute between the plaintiff and his wife Mrs.Shantha Natraj and the second defendant, the Managing Director of the first defendant. Mrs. Shantha Natraj, wife of the plaintiff is one of the Directors of the first defendant, filed a company petition before this Court for certain relief. Subsequently, the said disputes were settled by entering into a memorandum of understanding dated 25.9.1989 between the plaintiff, defendants and Mrs. Shantha Natraj, the wife of the plaintiff. In terms of the said memorandum of understanding dated 25.9.1989, the second defendant issued five cheques as detailed hereunder. Cheque No. Date Amount 104201 31.10.1989 Rs.2,00,000 104202 31.10.1989 Rs.1,75,000 104203 31.10.1989 Rs.1,20,000 104204 31.10.1989 Rs.1,30,000 104205 31.10.1989 Rs.1,25,000 Total amount Rs.7,50,000 THE above said cheques were deposited with one R.Srinivasan, the Mediator and the transfer forms signed by the plaintiff regarding the transfer of the said 1250 equity shares were also handed over to the said R.Srinivasan. In terms of the said memorandum of understanding, Mrs.Shantha Natraj was given a cheque dated 31.10.1989 for Rs.1,000/- as the consideration for 100 equity shares held by her. She has also handed over the resignation letter to the mediator R.Srinivasan. On 31.10.1989, the plaintiff presented the said cheques for encashment, the said five cheques were dishonoured by the bank on 2.11.1989. After the presentation of five cheques, the plaintiff received a letter dated 30.10.1989 from the first defendant in the evening of 31.10.1989 admitting the insufficiency of funds in his account. THE plaintiff had also received another letter dated 1.11.1989 from the first defendant contained untenable allegations. On 7.11.1989, the plaintiff wrote a letter demanding the payment of Rs.7,50,000/- with interest at the rate of 18% per annum on the said amount. THE reply received from the defendant is containing false and frivolous contentions. In respect of the transfer of 1250 equity shares, the plaintiff has done everything to the effect to transfer the same in the name of the second defendant. THE plaintiff is entitled to the value of the said shares being Rs.1,25,000/- and also Rs.6,25,000/- as per the memorandum of understanding. Apart from that the first defendant has borrowed on various dates a total sum of Rs.25,000/- which liability he has acknowledged and issued a cheque dated 31.10.1989 for Rs.25,000/-. This cheque was also dishonoured on presentation with the bank. Defendants 1 and 2 are jointly and severally liable for the suit amount. Hence the suit.

(3.) AFTER meticulously scanning the evidence, both oral and documentary evidence and giving due deliberations to the submissions made by both sides, the learned trial Judge finding no material to reject the claim of the plaintiff has decreed the suit as prayed for with cots which necessitated the defendants to approach this Court by way of this appeal.