Case Note & Summary
The respondent/plaintiff, Pravin Hiralal Shah, filed a summary suit against the appellant/defendant, Rajesh Laxmichand Udeshi @Bhatia, for recovery of Rs.67,10,000/- with interest. The parties had entered into a Memorandum of Understanding (MOU) dated 12 May 2009 for the sale of a flat for Rs.8.46 crores. The plaintiff paid an aggregate amount of Rs.61,00,000/- by two cheques: Rs.11,00,000/- as earnest money on 6 April 2009 and Rs.50,00,000/- as part payment on 29 April 2009. However, the defendant's father and brother did not agree to the MOU and denied the defendant's authority to enter into it. Consequently, the defendant issued three cheques totalling Rs.61,00,000/- towards repayment: cheque dated 30 June 2009 for Rs.25,00,000/-, cheque dated 5 July 2009 for Rs.25,00,000/-, and cheque dated 10 July 2009 for Rs.11,00,000/-. When presented between October and December 2009, all cheques were dishonoured. In his affidavit-in-reply dated 20 October 2011, the defendant claimed that the cheques were lying with the plaintiff for security purposes only for some other transactions and were misused, but he gave no particulars of those other transactions. The learned single Judge made the summons for judgment absolute and decreed the suit for Rs.61,00,000/- with interest at 12% p.a. from 29 April 2009. The defendant appealed. The Division Bench held that the defendant's defence was vague and did not raise a triable issue. The court noted that the defendant did not deny the receipt of Rs.61,00,000/- or the issuance of the cheques, and his bare assertion of security for other transactions without particulars was insufficient to grant unconditional leave to defend. The appeal was dismissed, and the decree was upheld.
Headnote
A) Civil Procedure - Summary Suit - Order 37 CPC - Triable Issue - Unconditional Leave to Defend - The defendant in a summary suit must disclose a defence that is plausible and raises a triable issue; vague and unsubstantiated allegations without particulars do not entitle the defendant to unconditional leave to defend. (Paras 5-6) B) Contract Law - Dishonour of Cheques - Security Cheques - Burden of Proof - When the plaintiff proves that cheques were issued towards repayment of an admitted liability, the defendant's bare assertion that the cheques were given as security for other transactions, without specifying those transactions, does not constitute a valid defence. (Paras 4-6)
Issue of Consideration
Whether the defendant's defence that the cheques were given as security for some other transactions, without any particulars, raises a triable issue entitling him to unconditional leave to defend in a summary suit under Order 37 of the Code of Civil Procedure, 1908.
Final Decision
The appeal is dismissed. The judgment and order dated 20 October 2011 of the learned single Judge making the summons for judgment absolute and decreeing the suit for Rs.61,00,000/- together with interest at the rate of 12% p.a. from 29 April 2009 till payment and/or realization with costs is confirmed.
Law Points
- Summary suit
- Triable issue
- Unconditional leave to defend
- Dishonour of cheques
- Memorandum of Understanding
- Security cheques
