Motorola India Limited vs Kiklu I. Malani
2002 Latest Caselaw 542 Bom

JUDGMENT

F.I. Rebello, J.

1. Plaintiffs have filed the present Summary Suit for reliefs as prayed for. It is the case of the plaintiffs that they had taken premises on leave and license from the defendant. One of the terms was that the plaintiffs would deposit and keep deposited a sum of Rs. 45.00 lakhs as security. This amount was to be refunded on the expiry or sooner determination of the license after deducting therefrom all the amounts due and payable by the licensee to the licensor and on the licensee handing over to the licensor quite, vacant and peaceful possession of the licensed premises. If the licensor failed to refund the security deposit on the expiry or soon after determination of the license in that event the licensor was liable to pay to the licensee interest on the said amount at the rate of 30% per annum from the date of expiry or soon after determination thereof. The plaintiffs have pleaded and relied on various documents in support of their case. Letter dated 20th November, 1995 has been relied upon to prove the payment of the sum of Rs. 45.00 lakhs. That letter shows that drafts in an amount of Rs. 39,06,600/- were forwarded by that letter and also a sum of Rs. 8,90,400/-has already been paid and the difference of the amount is being paid by the said drafts. The agreement has come to an end by efflux of time. The plaintiffs have handed over possession. It is, however, the case of the plaintiffs that the defendants have failed to return the security deposit of Rs. 45.00 lakhs which they are entitled to receive along with interest thereon at 30% per annum. Reliance is placed on correspondence, including letter dated January 7, 1998. On behalf of the defendant her son addressed a letter in reply to the plaintiffs earlier letter to terminate the agreement before the due date that the security deposit of Rs. 45.00 lakhs would be refunded in the month of September, 1998. By letter of October 6, 1998 defendant informed the plaintiffs that the defendant would be in a position to pay the lease deposit which was refundable in the manner provided and by one of the options set out in the letter. By letter of December 23, 1998 the defendant informed the plaintiffs that she would pay the sum of Rs. 45.00 lakhs in the manner set out thereunder. It was also intimated that the plaintiff should pay all the outstandings to the society and other charges payable upto 30th September, 1998. In spite of that the security deposit has not been paid back.

2. Hence the summary suit. On summons being served defendant has put in appearance. Thereupon the plaintiffs have taken out Summons for Judgment to which the defendant has filed reply. Affidavit of Anil Malani, son of the defendant has also being filed in support. Various contentions have been raised therein. They may be briefly summarized considering the arguments advanced before this Court. They are as under:--

(1) The suit as filed is not maintainable as a Summary Suit as there are interpolations in the produced agreement. The original document which is the basis for maintaining the suit is not available and as the question of interest is not

admitted, considering the judgments of the Division Bench of this Court, the suit cannot be maintained as a Summary Suit and the defendants would be entitled to unconditional leave to defend; (2) The amount claimed is not a liquidated amount as various amounts which were due and payable by the plaintiffs under the agreement have not been paid. It is set out that the defendants for the period the premises were occupied by the plaintiffs, had to pay and had paid an amount of Rs. 1,25,299/- which they are entitled to claim along with interest thereon at the rate of 21%; (3) It is also contended that the sum of Rs. 45.00 lakhs was not advanced by the plaintiffs to the defendant. On the contrary it would be seen that an amount of Rs. 4,36,800/- had been advanced by the plaintiffs to AIMS Exim and Trading Services Private Ltd. and not to the defendant. The defendant, it is contended, has no legal say insofar as AIMS Exim and Trading Services Private Ltd. is concerned and in these circumstances serious triable issues arise as to whether the defendant is liable to pay the said amount to the plaintiffs and, (4) It is lastly contended that the plaintiffs have been unable to show considering the various changes in their constitution at the time when the suit was filed that it is they who are entitled to claim money. It is, therefore, contended that the defences as raised are not sham or bogus and considering the judgment of the Apex Court in Mechalec Engineers and Manufacturers v. Basic Equipments Corporation, , atleast proposition 3, the defendants are entitled to unconditional leave to defend, without deposit or furnishing security.

3. In answer to those contentions on behalf of the plaintiffs their learned Counsel points out the provisions of Order 37 and Rules framed by this Court on the Original Side. Original Side Rule 222 reads as under:--

"222. If it appears that the defence set up by the defendant applied only to a part of the plaintiff's claim, or that any part of the claim is admitted, the plaintiff shall have judgment forthwith for such part of his claim as the defence does not apply to or as is admitted, subject to such terms, if any, as to suspending execution, taxation of costs, or otherwise, as the Judge may think fit; and the defendant may be allowed to defend as to the remaining claim of the plaintiff."

Relying on this Rule, it is pointed out that considering the correspondence exchanged, it is clear that the defendant has admitted that a sum of Rs. 45.00 lakhs had been received as security deposit and the same was to be refunded in terms of the agreement. It is also pointed out that even though part of the security deposit has been paid to another company, once the defendant accepted and admitted that she was liable to pay the amount, the mere fact that part of the amount had been paid to some other company would be no ground for granting unconditional leave to defend considering Original Side Rule 222. Insofar as the amounts to be adjusted the agreement itself provides for adjustment of any outstanding amount towards dues before refund and if that be the case the defendant could have deducted the amount paid by them and paid the balance amount. Bearing this in mind, this Court can in terms of O. S. Rule 222 direct deposit of the balance amount. On the contention that the interest has not been agreed upon it is pointed out that it is not the case of the defendant that interest atleast at 17% was not payable. The dispute is that the figure 30% has been interpolated after striking of "17" and the same will have to be proved and in

these circumstances even if that be the case the dispute is whether interest is payable at 30% or 17%. At no stage prior to the suit was the agreement disputed or the contents thereof. The judgment of the Division Bench of this Court, therefore, it is contended will be of no assistance.

4. In answer to the order dated April 8, 2002 allowing amendment, wherein submissions on behalf of the plaintiffs that the consequences of the averment sought to be introduced by the amendment is a matter of evidence and can be gone into at the time of trial have been set out. It is contended that at the highest, it would be limited to that amount which had been paid as security deposit to AIMS Exim and Trading Services Private Limited. It is, therefore, contended that this is not a case where the defendant has raised serious triable issues as to the reliefs sought for in the suit. At the highest the defences as raised are to a part of the reliefs. The defendant has not denied acceptance of the security amount. This will have to be considered on the touch stone of Rule 222 of the O. S. Rules.

5. We may now deal with the submissions. Can it be said that the suit as filed is not based on an agreement in writing or that the interest claimed is not in terms of the agreement and as such the suit is not maintainable as a Summary Suit which would warrant grant of unconditional leave to defend the defendant. That there is an agreement in writing is not disputed. There is also no dispute that the interest, even according to the defendant in terms of the agreement is atleast 17% if not 30%. The main contention is that 30% was interpolation and/or insertion without the consent of the defendant. Though the original document is not available, the defendant has not denied the contents of the document produced in the form of secondary evidence as the original is not available, except for the issues of interest. As the signature of the defendant is not there on the said interpolation. It is contended, that dictum of the Division Bench of this Court in the case of Randerian Sing Pvt. Ltd. v. Indian Overseas Bank and Ors., in Appeal No. 1060 of 1986 dated 24th February, 1987 as approved in Hydraulic and General Engineering Ltd. and Anr. v. UCO Bank 1998 I LJ 793 would be applicable. It is no doubt true that the ratio of the judgments referred to, recognize that all the reliefs prayed for must fall under the summary procedure and further that the summary procedure is a harsh procedure and therefore, calling on the defendant to deposit the amount when there are triable issues would result in foreclosing the defence or denying an opportunity to prove the case. Rule 222 was not under consideration by the learned Division Benches which decided those matters. In the first judgment the Rule as introduced was not under consideration and the said rule was also not pointed out to the Division Bench which decided the subsequent case of Hydraulic and General Engineering Ltd. (supra). Even otherwise the Division Bench in Randerian Singh and Ors. (supra) has observed as under:--

"However, even as regards the claim for interest at 12% per annum there is no averment in the plaint whether the same represents the agreed rate of interest or interest as claimed is under the Interest Act or interest under the Sale of Goods Act."

Even otherwise those judgments basically proceed on the footing that the reliefs prayed for must be reliefs available under the Summary Procedure i.e. based on a

written agreement or a negotiable instrument or as otherwise provided under Order XXXVII of Civil Procedure Code.

To my mind in the instant case admittedly the defendant has not denied that interest atleast was payable at 17% per annum. The denial is that 30% was interpolated. Considering Original Side Rule 222 the argument that the suit is not maintainable as a Summary Suit must be rejected. Further the suit is based on the document which sets out the interest at the rate of 30%. The relief claimed is on that basis. That relief would fall under the summary procedure.

6. The next submission is that the amount is not a liquidated amount. That again is based on the contention raised in the defence of the defendant, that the defendant has paid a sum of Rs. 1,25,299/- on account of the user of the premises by the plaintiffs. Even if the defendant has paid that amount, in terms of Clause 6 of the agreement the defendant ought to have refunded the amount after deducting therefrom all the amounts due and payable by the licensee to the licensor. The sum, therefore, due and payable will be the sum after deduction in terms of Clause 6 of the Agreement. This again is not a defence in respect of the reliefs or the maintenance of the suit as a Summary Suit. The sum of Rs. 45.00 lakhs is a liquidated amount. The contention was advanced based the claim of the defendant against the defendant including claim of interest on that amount. Considering Clause 6 that contention prima facie must also be rejected. Because the defendant raises a claim which according to the defendant is an unliquidated amount cannot result in the plaintiffs suit which otherwise can be entertained under the summary procedure, ceasing to be trial or falling under the summary procedure.

7. We then come to the third submission or issue which according to the defendant will arise namely that the plaintiffs had not paid Rs. 45.00 lakhs to the defendant and part of the amount had been paid to M/s AIMS Exim and Trading Services Private Ltd. The correspondence exchanged between the parties is on record. The letter dated December, 23, 1998 shows that the defendant has agreed to refund to the plaintiff a sum of Rs. 45.00 lakhs in the manner set out therein. At the highest even if the defence is considered considering the Original Side Rule 222 it would be a defence to a part of the amount due. There is no challenge or dispute in respect of the other amount of security deposit which had been received. On that count also that contention must be rejected.

7-A. We then come to the last contention namely that the plaintiffs in view of the various changes in its name or constitution could not have maintained the suit. The plaintiffs have filed a rejoinder by Manish Doshi, Operations Controller of the plaintiffs wherein in paragraph three have been set out the various changes in the company's name. The suit was filed on 10th January, 2000 by Motorla India Limited. The name of the company had been changed to Motorola India Limited as on 16th January, 1996 and continued to be so till 7th February, 2001. The suit as filed and the plaint as declared therefore was by the company as incorporated. If there are subsequent changes that can always be amended to bring the suit in terms of the name as amended or changes that have undergone. That at any rate cannot be said to be a serious triable issue warranting grant of unconditional leave to defend to the defendant.

8. Considering the above discussion, will the defendant considering what the Apex Court has set out in the case of Mechalec Engineers and Manufacturers v. Basic Equipments Corporation, (supra) be entitled to unconditional leave to defend, To my mind even if defences have been raised at the highest they are to a part of the claim and not to the entire claim. The defences raised must be that all the reliefs prayed in the suit or a substantial part of the relief do not fall within the summary procedure. That is not the case here. Apart from that a large part of the claim is not disputed and considering Original Side Rule 222, plaintiff will be entitled to judgment for that amount. Under these circumstances leave to defend cannot be in respect of the entire claim, but would be conditional subject to the defendant securing the plaintiff in respect of the amount which is not disputed. It would be too late in the day even considering the summary procedure to allow the defendant to run away from non-disputed part of the liability and avoid payment which in terms of the agreement the defendant was bound to refund or pay. A defendant having no substantial defence as set out earlier cannot be allowed to take advantage of laws delay. Considering the work load of this Court suits do not come for trial ordinarily atleast for a decade.

9. The dispute if and at all is insofar as the question of interest is concerned, and the adjustment of a sum of Rs. 1,26,299/-, and an amount of Rs. 4,36,800/- out of the security deposit of Rs. 45.00 lakhs. In Suraj Sanghi Finance Limited v. Credential Finance Ltd. and Ors., Summons for Judgment No. 164 of 2000 in Summary Suit No. 5502 of 1999 decided on June 3, 2002 (since reported in 2002(4) Mh.L.J. 770) after considering the case law including the judgment of this Court dated 14th February, 1994 in Classic Strips Pvt. Ltd. v. Arrow Convenors Pvt. Ltd. in Appeal No. 109 of 1994 in Summary Suit No. 1618 of 1991 and further the judgment of the Apex Court in Raj Duggal v. Ramesh Kumar Bansal, 1991 Supp. (1) SCC 191, a view has been taken that the defendant who is being allowed leave to defend purely as an act of mercy, it is open to the Court while granting leave as condition to defend the suit to permit the plaintiffs to withdraw the amount against security or otherwise. At that time Rule 222 had not been taken into consideration which has now been considered. To my mind Rule 222 of the Original Side Rules would be an added power in the Court in respect of the claim not disputed again as a condition for granting leave to defend, to permit the plaintiffs to withdraw the amount against security or otherwise as the court deems fit and proper on the facts of the case. A party who comes to this Court and whose claim for part of the amount is not disputed and who otherwise would be entitled to judgment in terms of the Original Side Rule 222 or for that matter under Order XXXVII of Civil Procedure Code cannot be told that the amount should not be paid to him but must be kept deposited until such time as the dispute is resolved. To my mind this would be contrary to justice and the very aim and object of Order XXXVII as amended and Rule 222 of the Original Side Rules as framed by this Court. Considering that to my mind as a condition for granting leave this Court can permit the plaintiffs to withdraw the amount against bank guarantee or other security or such other conditions. In case where leave is granted purely as an act of mercy as per proposition No. 5 in Mechalec Engineers and Manufacturers v. Basic Equipments Corporation, (supra) and considering the judgment of the Apex Court in Raj Duggal (supra) the plaintiffs

can be allowed to withdraw the amount by furnishing bank guarantee or security or such other direction pending the hearing and final disposal of the suit. Where part of the claim is not disputed considering the Original Side Rule 222 the Court as a condition for leave to defend can also permit withdrawal of the money against guarantee or security or such other conditions on the facts of each case. The purpose in directing bank guarantee or security or other conditions is to protect the interest of the defendant so that the amount is brought back and is available to the Court for being refunded or make other deductions or adjustment to the extent for whatever reason in terms of the decree in the suit. The question what interest is to be paid on the amount to be refunded is best left to the discretion of the Court at the time of disposal of the suit. Considering the above to my mind on the facts of the present case and considering the non-disputed amount and interest on that amount at the rate of 17%, conditional leave can be granted to the defendants to defend the suit on the following conditions:--

1. Defendant to deposit in this Court a sum of Rs. 40.00 lakhs within twelve weeks from today. On deposit the defendant to communicate the same to the plaintiff or their Counsel.

2. On such amount being deposited liberty to the plaintiffs to withdraw the amount on furnishing bank guarantee to the satisfaction of the Prothonotary and Senior Master.

3. If the amount is deposited liberty to the defendant to file written statement within 8 weeks from the date of intimating to the plaintiff or their Counsel about the deposit. Discovery and inspection within 8 weeks thereafter.

4. On failure to deposit the above amount, liberty to the plaintiffs to apply to this Court in terms of the Original Side Rules. Summons for Judgment disposed of accordingly.