Case Note & Summary
The plaintiff, Runwal Developers Private Limited, filed a summary suit in the Bombay High Court against defendant Yogesh Mehta for recovery of Rs. 1,60,40,822/- with interest at 18% per annum. The claim arose from a written agreement dated 18 August 2006 for sale/transfer of Transferable Development Rights (TDR), an accompanying Affidavit cum Declaration and Undertaking, and dishonoured cheques. The defendant had originally agreed to purchase 3000 sq. mtrs. of TDR from Shivshahi Punarvasan Prakalp Limited on 3 August 2006 for Rs. 7,55,63,280/- but could only pay Rs. 42,30,300/-. He then approached the plaintiff for financial help, leading to the suit agreement. Under this, the defendant agreed to sell the TDR to the plaintiff, who would pay the balance consideration of Rs. 7,13,32,980/- to the original transferor, adjusting Rs. 5,94,17,280/- against the price. The defendant additionally agreed to pay Rs. 1,19,15,700/- to the plaintiff within 30 days and issued three post-dated cheques of Rs. 70 lacs, Rs. 34 lacs, and Rs. 9 lacs. Only the Rs. 9 lacs cheque was honoured; the others were dishonoured upon deposit. The plaintiff issued statutory notices under Section 138 of the Negotiable Instruments Act and a final demand notice on 7 September 2009. After no payment, the present summary suit was filed along with a summons for judgment under Order XXXVII of the Code of Civil Procedure, 1908. Despite service, the defendant remained absent at the hearing; his affidavit in reply was on record. The defendant contended that the suit was time-barred because the agreement was dated 18 August 2006 and the suit filed on 15 September 2009, beyond three years. He also claimed that the cheques were given as advance for an oral booking of a flat in the plaintiff's project at Ghatkopar, which was later cancelled, and the plaintiff ought to return the cheques. Further, he argued that the suit agreement had been orally modified, and a summary suit on such an orally modified contract was not maintainable. The court rejected each defense. On limitation, it found that the agreement required payment within 30 days, so the cause of action arose on 17 September 2006, and the suit filed on 15 September 2009 was within three years; additionally, part payments by the dishonoured cheques extended the limitation. On the oral booking defense, the court noted that the plaintiff had no project at Ghatkopar and that it was implausible for a sum of Rs. 49 lacs to change hands on an oral booking without any writing; the defense was held to be sham, bogus, and illusory. On oral modification, the court observed that the suit was founded on the written agreement and the affidavit, and accepting a lesser sum did not require a fresh writing; the defense lacked substance. Consequently, the court held that all defenses were sham and allowed the summons for judgment, decreeing the suit in terms of prayer (a) along with interest at 18% per annum as stipulated in the agreement.
Headnote
A) Limitation - Computation of Limitation - Cause of Action under Contract - Limitation Act, 1963, Article 55 - Suit for recovery based on agreement dated 18-08-2006 requiring payment within 30 days; cause of action arose on expiry of 30 days (17-09-2006); suit filed on 15-09-2009 within three-year limitation. Part payment by dishonoured cheques extended limitation. Held that suit is within time (Paras 4). B) Civil Procedure - Summary Suit - Maintainability - Code of Civil Procedure, 1908, Order XXXVII, Rule 1 - Summary suit based on written agreement, affidavit cum declaration, and dishonoured cheques is maintainable. Oral modification of the written agreement does not bar the summary remedy; no fresh writing required for accepting a lesser amount. Held that the defense of oral modification is rejected (Paras 6). C) Evidence - Burden of Proof - Sham Defense - Defendant claimed cheques were for oral booking of a flat in a non-existent project and sought return of cheques upon cancellation. No documentary evidence offered. Held that a payment of Rs. 49 lacs without writing is improbable; defense is sham, bogus, and illusory (Paras 5).
Issue of Consideration
Whether the suit is barred by limitation; Whether the defense of oral booking and cancellation of flat is genuine; Whether summary suit is maintainable despite alleged oral modification of the written contract
Final Decision
Summons for Judgment made absolute in terms of prayer clause (a), decreeing suit with interest at 18% per annum from the date of filing the suit until realization.
Law Points
- Limitation Act
- 1963 - cause of action arises after stipulated period
- part payment extends limitation
- summary suit under Order XXXVII CPC - oral modification of written contract not a defense
- interest as per contractual rate
