Case Note & Summary
The appeal arises from an order of the learned Single Judge granting the appellant (original defendant) leave to defend the summary suit conditional upon depositing the principal sum of Rs.67 crores. The respondents (original plaintiffs) had lent and advanced an aggregate sum of Rs.67 crores to the appellant between 20th January 2012 and 31st July 2012 via RTGS transfers. The appellant issued several cheques and bills of exchange in favour of the respondents, drawn on various dates between 30th November 2012 and 31st December 2012, and executed writings admitting receipt of the amount and assuring honour of the cheques. The appellant admitted receipt of the amount and failure to repay but contended that the claim was barred under the Bombay Money Lenders Act, 1946, arguing that the suit was based solely on the loan and not on the cheques or bills of exchange. The respondents countered that the suit was based on the negotiable instruments. The court held that the appellant's contention was misconceived, as the summary suit was clearly based on the cheques and bills of exchange issued by the appellant, which constitute a separate cause of action under Order 37 of the Code of Civil Procedure, 1908. The court noted that the appellant had no defence on merits and that the Bombay Money Lenders Act did not apply to suits based on negotiable instruments. Consequently, the court dismissed the appeal, upholding the conditional leave to defend granted by the Single Judge.
Headnote
A) Summary Suit - Leave to Defend - Conditional Deposit - Suit based on cheques and bills of exchange, not merely on loan - Appellant admitted receipt of Rs.67 crores and issuance of cheques - No triable defence on merits - Leave to defend granted conditional upon deposit of principal amount - Held that the suit is not barred under Bombay Money Lenders Act, 1946 as the cause of action arises from negotiable instruments (Paras 1-3, 5-6).
Issue of Consideration
Whether the suit is barred under the Bombay Money Lenders Act, 1946, and whether the appellant is entitled to unconditional leave to defend
Final Decision
Appeal dismissed. The order of the learned Single Judge granting conditional leave to defend upon deposit of Rs.67 crores is upheld.
Law Points
- Summary suit under Order 37 CPC
- Bombay Money Lenders Act
- 1946
- Negotiable Instruments Act
- 1881
- Leave to defend conditional upon deposit
Case Details
2014 LawText (BOM) (11) 46
Appeal (Lodging) No. 252 of 2014 in Summons for Judgment No. 21 of 2013 in Summary Suit No. 203 of 2013
S.J. Vazifdar, Revati Mohite Dere
Mr. Aspi Chinoy, Senior Counsel with Mr. Z. T. Andhyarujina and Mr. Ajay Fernandes i/b Kanga & Co. for the Appellant; Mr. J. P. Sen with Mr. Sandip Parikh, Mr. Abhishek Sawant and Mr. Amit Pradhan i/b Subhash Pradhan & Co. for the Respondents
M/s. Ashok Commercial Enterprises & Anr.
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Nature of Litigation
Appeal against order granting conditional leave to defend in summary suit for recovery of loan
Remedy Sought
Appellant sought unconditional leave to defend or setting aside of condition to deposit Rs.67 crores
Filing Reason
Appellant contended that the suit was barred under Bombay Money Lenders Act, 1946
Previous Decisions
Learned Single Judge granted leave to defend conditional upon deposit of principal sum of Rs.67 crores
Issues
Whether the suit is barred under the Bombay Money Lenders Act, 1946
Whether the appellant is entitled to unconditional leave to defend
Submissions/Arguments
Appellant argued that the suit is based solely on loan and thus barred under BML Act
Respondents argued that the suit is based on cheques and bills of exchange, not merely loan
Ratio Decidendi
A summary suit based on cheques and bills of exchange is not barred under the Bombay Money Lenders Act, 1946, as the cause of action arises from negotiable instruments, not merely from a loan. The appellant having admitted receipt of the amount and issuance of cheques, there is no triable defence on merits, and conditional leave to defend is justified.
Judgment Excerpts
On merits, there is no defence whatsoever. The appellant admits the receipt of the amount claimed in the suit.
The contention that the cause of action in the summary suit is based on the loan and not on the cheques, bills of exchange and agreements in writing to pay is totally misconceived.
Procedural History
Respondents filed Summary Suit No. 203 of 2013 for recovery of Rs.67 crores. Appellant filed Summons for Judgment No. 21 of 2013 seeking leave to defend. Learned Single Judge granted conditional leave to defend upon deposit of principal amount. Appellant filed Appeal (Lodging) No. 252 of 2014 against that order.
Acts & Sections
- Bombay Money Lenders Act, 1946:
- Code of Civil Procedure, 1908: Order 37
- Negotiable Instruments Act, 1881:
