RAJESH VARMA Vs. AMINEX HOLDINGS AND INVESTMENTS

JUDGEMENT

(1.) This Suit is filed against the Defendants for recovery of sum of rs. 8,59,000/- (Rupees Eight Lakhs Fifty-nine thousand) with further interest on the principal amount of Rs. 5,00,000/- (Rupees Five Lakhs) at the rate of 24% per annum or at such other rate as the Court may deem fit and proper from the date of filing of the Suit till payment and/or realisation and cost of the Suit.

(2.) The Plaintiff claims to have extended loan to Defendant No. 1 in the sum of rs. 5,00,000/- (Rupees Five Lakhs) against Bill of Exchange for the like amount upon the defendant Nos. 3 and 4 ordering them to pay to the Plaintiff or order payable on demand said sum of Rs. 5,00,000/- (Rupees Five Lakhs) for value received by the Defendant No. 1 by way of two cheques in the sum of Rs. 2,50,000/- (Rupees Two Lakh Fifty Thousand) bearing nos. 386445 drawn in favour of Defendant No. 1 on City Bank, Sir P. M. Road, Mumbai and another cheque bearing No. 190601 dated 8th may, 1996 drawn in favour of Defendant No. 1 of Standard Chartered Bank, D. N. Road, mumbai. According to the Plaintiff, the Bill of exchange has been executed on 8th May, 1996. Further, the said Bill of Exchange was accepted by the Defendant Nos. 3 and 4 on the same day by endorsing their signatures thereon. The plaint ff asserts that the Bill of Exchange was preserved on 8th May, 1997 to Defendant Nos. 3 and 4 for payment, however, the same was dishonoured for non-payment. Consequently, the Plaintiff called. upon the Defendant No. l to make good the amount along with interest at the rate of 24% per annum as provided in the said Bill of Exchange. It is the case of the plaintiff that after repeated demands, the defendant No. 1 made over cheque No. 376545 dated 7th February, 1999 in the sum of rs. 1,20,000/- (Rupees One Lakh Twenty thousand) drawn by Defendant No. 1 in favour of the Plaintiff on Abhyudaya Co-operative bank Ltd. towards interest. The said cheque, when presented, however, was dishonoured by the Bank on 9th February, 1999 and returned with remark "refer to Drawer" which was forwarded by the Union Bank of India to the plaintiff along with Memorandum dated 10th february, 1999. The Plaintiff further asserts that on repeated demand's, Defendant No. 1 issued another cheque bearing No. 564837 dated 8th march, 1999 in. the sum of Rs. 5,00,000/- (Rupees Five Lakhs) drawn by Defendant No. 1 in favour of Plaintiff on Canara Bank. Even the said cheque when presented, was dishonoured and returned to the Plaintiff with Banker's remark 'for insufficient funds'. As both the cheques were dishonoured and the Defendants failed and neglected to pay the outstanding amount in relation to the stated Bill of Exchange to the Plaintiff, the Plaintiff has been driven to file the present Suit for the reliefs already referred to above which was filed on 5th May, 1999. The above Suit came to be filed before this Court under Order XXXVII of the Code of civil Procedure, 1908 ('c. P. C. '). The Plaintiff took out Summons for Judgment which came to be dismissed vide order dated 7th August, 2002. The hearing of the Suit has proceeded thereafter.

(3.) The Defendants filed joint written statement dated 10th February, 2005 to counter the case made out by the Plaintiff. The defendants pleaded that the Suit was not maintainable in Law. It was barred by Law of limitation. Further, the Plaintiff is engaged in money lending business without holding a valid license in that behalf. For that reason, the Suit was not maintainable in view of the provisions of the Bombay Money Lenders Act, 1946 ("act of 1946"). To support that plea, in Paragraph 1 (c) of the Written Statement, Defendants have adverted to the circumstances that would indicate that the Plaintiff has filed several criminal complaints for recovery of outstanding amount against several parties in respect of amounts lent by the Plaintiff to them on heavy rate of interest. The Defendant in Para l (d) of the Written Statement, has asserted that the plaintiff had also filed two criminal complaints being Nos. l068/s/2003 and 1069/s/2003 before the Additional Chief Metropolitan magistrate of 4th Court, Girgaum, Mumbai in relation to the cheques bearing Nos. 564827 and 376545 dated 8th March, 1999 and 7th february, 1999 for sum of Rs. 5,00,000/- (Rupees Five Lakhs) and Rs. 1,20,000/- (Rupees one Lakh Twenty Thousand) respectively, allegedly paid by the Defendants towards the principal amount of the suit Bill of Exchange and interest thereon respectively. It is then stated that the Plaintiff has already withdrawn both these complaints as Defendant No. 1 has paid the amounts of both the aforesaid cheques. It is stated that the Plaintiff has already received the entire principal amount in relation to the suit bill of Exchange and part of the interest thereof, therefore, the present Suit for interest only is not maintainable and liable to be dismissed with costs. Besides, the Defendants assert that the plaintiff has unlawfully and wrongfully claimed interest at the rate of 24% per annum and also interest on interest i. e. compound interest, for which reason, Suit requires to be dismissed with cost. According to the Defendants, amount of rs. 6,20,000/- (Rupees Six Lakhs Twenty thousand) paid by the Defendant No. 1 to the plaintiff was paid without admitting the execution of the suit Bill of Exchange and liability therein. Moreover, the Plaintiff accepted the said amount of Rs. 6,20,000/- (Rupees Six Lakhs Twenty Thousand) towards full and final settlement of the entire claim in respect of the two complaints and also withdrew the criminal cases filed against the Defendants. The Defendants have thus denied their liability to pay any amount to the Plaintiff. The defendants have also denied that Defendant nos. 3 and 4 are acceptors of the purported Bill of Exchange. The Defendants have denied that the Defendant No. 1 drew any Bill of Exchange for Rs. 5,00,000/- (Rupees Five Lakhs) upon defendant No. 3 or 4 ordering them to pay the stated amount to the Plaintiff as alleged. According to the Defendants, the two cheques issued by the Plaintiff in the sum of Rs. 2,50,000/- (Rupees Two Lakhs Fifty Thousand) each in favour of Defendant No. 1 were towards repayment of the loan granted by the Defendant no. l to the Plaintiff. The Defendants have asserted that Defendants 3 and 4 have not endorsed their signatures on the alleged Bill of exchange. In substance, the Defendants have denied their liability to pay any amount to the plaintiff and claimed that the Suit be dismissed.