Bombay High Court

Sajjad Ahmed Amir Sayyed And ... vs Saroj Wd/O Omprakash Boob And 4 ... on 19 April, 2022

Bench: N. J. Jamadar

                                                              SJ18-19COMSS186-17-.DOC

                                                                                  Santosh
                           IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                ORDINARY ORIGINAL CIVIL JURISDICTION
                                      IN ITS COMMERCIAL DIVISION


                                SUMMONS FOR JUDGMENT NO. 18 OF 2019
                                               IN
                                 COMM SUMMARY SUIT NO. 186 OF 2017

                      Sajjad Ahmed Amir Sayyed & anr.                   ...Applicants
                      In the matter between
                      Sajjad Ahmed Amir Sayyed & anr.                    ...Plaintiffs
                                           Versus
                      Saroj wd/o Omprakash Boob & ors.                 ...Defendants
SANTOSH
SUBHASH
KULKARNI              Mr. Vishal Kanade, a/w Kirit Hakani, Niyati Hakani, i/b Kirit
Digitally signed by
SANTOSH
SUBHASH
                            Hakani, for the Plaintiffs/Applicants.
KULKARNI
Date: 2022.04.19
14:55:39 +0530
                      Mr. P. R. Arjunwadkar, i/b Prabha Badadare, for Defendant
                            nos.1 to 5.

                                                   CORAM: N. J. JAMADAR, J.

RESERVED ON: 25th MARCH, 2022 PRONOUNCED ON: 19th APRIL, 2022 ORDER:-

1. This commercial division summary suit is instituted for

recovery of a sum of Rs.6,75,33,290/- along with interest at the

rate of 9% p.a. on the principal sum of Rs.5,33,00,000/-.

2. Plaintiff no.1 Mr. Sajjad deals in the business of building

construction and development. Plaintiff no.2 Mr. Anees is a

business partner of plaintiff no.1 and is entitled to and has

interest in the suit claim. Late Omprakash Zumbarlal Boob, the

husband of defendant no.1 and father of defendant nos.2 to 5

SJ18-19COMSS186-17-.DOC

was also dealing in the business of construction and

development of real estate at Pune. In the year 2007-2008

plaintiff no.1 and late Omprakash entered into a Memorandum

of Undertakings/Agreements in respect of the properties

situated at village Kondhava and Ambegaon, Pune. Pursuant

thereto plaintiff no.1 himself and plaintiff no.2, through plaintiff

no.1 invested a sum of Rs.9,95,00,000/-. As the agreements did

not materialize and transactions fell through, articles of

agreements were executed on 22nd September, 2011. Under the

said articles of agreements late Omprakash agreed to refund to

plaintiff no.1 a sum of Rs.6,25,00,000/- in installments. In

discharge of the said liability late Omprakash issued post-dated

cheques which were dishonored on presentment. Plaintiff no.1

was, thus, constrained to lodge a complaint under Section 138

of the Negotiable Instruments Act, 1881 ("the N.I. Act") being CC

No.1975/SS/2012 before the Metropolitan Magistrate, Dadar.

3. Late Omprakash carried the matter of issue of summons

to this Court in Criminal Writ Petition No.1725 of 2013. In the

said petition, on 15th July, 2013 Consent Terms were executed

and accordingly the petition came to be disposed. Under the

Consent Terms late Omprakash had agreed to repay the entire

amount aggregating to Rs.5,30,00,000/- on or before 16 th

SJ18-19COMSS186-17-.DOC

January, 2014, failing which simple interest was to be paid at

the rate of 9% p.a. In view of default on the part of late

Omprakash, in abiding by the Consent Terms, the complaint

before the learned Metropolitan Magistrate was revived. Fresh

Consent Terms were executed before the learned Magistrate in

CC No.1975/SS/2012 on 13th January, 2014, whereunder late

Omprakash agreed to transfer the property situated at Survey

No.39/1 Thakarwadi, Taluka Khed, District Pune and Survey

No.58 Hissa No.7 admeasuring about 400 Sq.Mtrs. in favour of

plaintiff no.1 and issued cheques dated 28th February, 2015 and

28th April, 2015 to repay the outstanding amount. All the three

cheques were dishonored on presentment.

4. Subsequently, on 18th November, 2014, fresh Consent

Terms were executed by plaintiff no.1 and late Omprakash. The

latter had agreed to obtain the signatures of his wife, defendant

no.1, and son, defendant no.2, on the said Consent Terms. Late

Omprakash had assured to keep his wife and son present before

the Court for executing the said Consent Terms dated 18 th

November, 2014. However, on 3rd December, 2014 Omprakash

passed away. Thus, those Consent Terms could not be tendered

before the learned Magistrate.

SJ18-19COMSS186-17-.DOC

5. The plaintiff asserts on the demise of Omprakash the

defendants, who represent the estate of late Omprakash, are

jointly and severally liable to discharge the liabilities and debts

of late Omprakash. Thus, a demand notice was issued to the

defendants on 24th December, 2016. The demand was not

complied with. The plaintiffs aver that there are unequivocal

admissions of liability by late Omprakash in the various

Consent Terms and the claim is based on dishonored cheques.

Hence this summary suit.

6. The defendants entered appearance in response to the

service of the writ of summons. Thereupon the plaintiffs took

out this Summons for Judgment.

7. An Affidavit-in-reply is filed on behalf of defendant nos.1 to

5 seeking an unconditional leave to defend the suit. Firstly,

according to defendant nos.1 to 5, the suit is not properly

constituted. Mr. Anees, plaintiff no.2, had no transaction of

whatsoever nature with late Omprakash. There was no privity

of contract between plaintiff no.2 and late Omprakash. If it is

the claim of the plaintiff that the plaintiffs are the partners,

then the bar under Section 69 of the Indian Partnership Act,

1872, would operate and the suit would become untenable.

Secondly, the defendants contend that the Consent Terms dated

SJ18-19COMSS186-17-.DOC

15th July, 2013, were brought about by exerting pressure and

undue influence upon late Omprakash. Moreover, on account of

the misrepresentation, late Omprakash had admitted the

liability to pay a sum of Rs.5,30,00,000/- with interest though

late Omprakash was not liable to pay any amount. According to

the defendants, late Omprakash was in the bona fide belief that

he would get back unsold 44 flats and land at village Kondhava

and Ambegaon, Pune. It was denied that late Omprakash had

executed the Consent Terms on 13th January, 2014 before the

learned Magistrate. Intrinsic evidence of the said Consent Terms

dated 13th January, 2014, not being signed by the Advocates for

the parties, was pressed into service. It was contended that late

Omprakash was not bound to honor the cheques allegedly

drawn pursuant to the Consent Terms as the said Consent

Terms and the consequent actions were all vitiated by fraud. It

was denied that late Omprakash executed the Consent Terms

dated 18th November, 2014 and had also agreed to keep

defendant nos.1 and 2 present before the Court for executing

the alleged Consent Terms. The defendants contend, at that

point of time, late Omprakash was unable to move due to

paralysis and was bedridden at Pune. The Consent Terms dated

18th November, 2014 were thus stated to be false and fabricated.

SJ18-19COMSS186-17-.DOC

8. The defendants further contend that there was breach of

the articles of agreements dated 22nd September, 2011. Under

the terms of the articles of agreements, the plaintiff nos.1 was

under an obligation to release the flats which were acquired for

sale and possession to late Omprakash. The plaintiffs had no

authority in law to sale those flats and appropriate the

consideration thereof. Thus, the very premise of the claim

becomes unsustainable.

9. The defendants thus contend that the defendants have

raised triable issues and, therefore, the defence raised by the

defendants are not moonshine or sham defences. In contrast,

since the defendants have raised strong and substantial

defences, unconditional leave to defend the suit is required to be

granted.

10. I have heard Mr. Kanade, the learned Counsel for the

plaintiffs and Mr. Arjunwadkar, the learned Counsel for the

defendants. With the assistance of the learned Counsels for the

parties, I have perused the pleadings and documents on record.

11. Mr. Kanade submitted that a peculiar feature of the

instant suit is that the Consent Terms were executed before this

Court and the learned Metropolitan Magistrate, repetitively, and

the cheques drawn by late Omprakash pursuant to the solemn

SJ18-19COMSS186-17-.DOC

undertakings before the Court were dishonored. Mr. Kanade

submitted that in the facts of the case, the defence of fraud and

exercise of undue influence is plainly untenable as the Consent

Terms were voluntarily executed by late Omprakash before the

Courts. Taking the Court through the articles of agreement

dated 22nd September, 2011, the Consent Terms executed before

this Court on 15th July, 2013, followed by the Consent Terms

dated 13th January, 2014 and 18th November, 2014, Mr. Kanade

submitted that these agreements and Consent Terms constitute

clear and unequivocal admission of the liability. Since, the

cheques drawn pursuant to the Consent Terms dated 13 th

January, 2014 were also dishonored, the defendants have no

defence to the claim. Therefore, leave to defend is not required

to be granted and the Summons for Judgment deserves to be

made absolute, submitted Mr. Kanade.

12. Mr. Arjunwadkar, in the contrast, submitted that the facts

of the case set up by the plaintiffs are not as simplistic as

projected by the plaintiffs. Mr. Arjunwadkar mounted a two-

pronged attack on the frame of the suit. First, plaintiff no.2 Mr.

Anees had no transaction of whatsoever nature with late

Omprakash. Neither any agreement was executed by and

between plaintiff no.2 and late Omprakash nor any cheque was

SJ18-19COMSS186-17-.DOC

drawn in favour of plaintiff no.2. In this backdrop, joining of Mr.

Anees as plaintiff no.2, is a clear misjoinder of parties and no

suit, much less a summary suit, at the instance of plaintiff no.2

is maintainable. Two, the defendants do not owe any liability

towards plaintiff no.1. Laying emphasis on the fact that

Consent Terms allegedly executed on 18 th November, 2014, do

not bear the signatures of defendant nos.1 and 2, who the late

Omprakash allegedly represented to have guaranteed the

repayment, it was submitted that the Consent Terms dated 18 th

November, 2014 cannot be said to have been lawfully executed to

fasten the liability on defendant nos.1 and 2.

13. Mr. Arjunwadkar further submitted that the articles of

agreement dated 22nd September, 2011 contain reciprocal

promises. Under the terms thereof, it was incumbent on plaintiff

no.1 to release the flats, the possession of which was with

plaintiff no.1, and also release the original documents in respect

of Ambegaon property. Evidently, plaintiff no.1 had not

complied with those promises. Thus, there is a serious dispute

about the entitlement of plaintiff no.1 to claim the said amount

whilst holding on to the property of late Omprakash. This gives

rise to a serious triable issue and, therefore, the defendants are

entitled to an unconditional leave to defend the suit.

SJ18-19COMSS186-17-.DOC

14. I have carefully considered the aforesaid submissions. The

summary suit is apparently instituted on the basis of the

dishonored cheques drawn for Rs.50,00,000/- payable on 28 th

February, 2014 and Rs.3,33,00,000/- and Rs.1,50,00,000/-

both payable on 25th April, 2014. The issue and dishonor of

those cheques is, however, preceded by a series of agreements

between plaintiff no.1 and late Omprakash.

15. The plaintiffs claim that liability was initially incurred by

late Omprakash under the articles of agreement dated 22 nd

September, 2011, whereby the parties agreed that late

Omprakash would pay a sum of Rs.6,25,00,000/- to plaintiff

no.1 in respect of the transaction pertaining to the properties at

Kondhava and Ambegaon, Pune. This was to compensate

plaintiff no.1 for the investment made and expenses incurred in

the development of the projects at those sites. The cheques

drawn thereunder were dishonored leading to filing of a

complaint under Section 138 of the N. I. Act being CC No.1975/

SS/2012. In the proceedings arising out of the said complaint,

multiple Consent Terms were executed between plaintiff no.1

and late Omprakash. The cheques, in question, were

purportedly drawn in pursuance of the Consent Terms executed

SJ18-19COMSS186-17-.DOC

on 13th January, 2014, before the learned Metropolitan

Magistrate.

16. Paragraph 4 of the said Consent Terms reads as under:

"4. In Continuation of the consent terms filed between the parties, it is further agreed that the amount of Rs.5,30,00,000/- alongwith calculated interest thereon at Rs.99,48,750/- thereon will be adjusted as under:-

a. The accused is owner of a property bearing Survey No.39/1, Thakarwadi, Taluka-Khed, Dist-Pune, admeasuring about 2 hector, 39 Aar (Guntha) valued at Rs.60,00,000/-. The accused has agreed to sell the aforementioned property to the Complainant and/or his assignee by making a 'Executing Sale Deed'. The said Sale Deed shall be executed on or before 16 th January, 2014 with further undertaking that accused shal make out clear and marketable title to the same in Govt. records.

b. The accused is also in possession of the property situated at Khondwa Khurd, Taluka - Haveli, Dist. Pune and property bearing Survey No.58, Hissa No.7, admeasuring about 4 Aar (Guntha) i.e. 400 sq. mt. valued at Rs.35,00,000/-. The accused hereby agrees to execute a Sale Deed in favour of complainant and/or his assignee of the said property as per the understanding between the parties. c. The accused hereby agrees to pay an amount of Rs.50,00,000/- & issued his vide cheque No.475516 dated 28/2/2014 drawn on UCO Bank, Mukund Nagar Branch, Pune.

d. For the balance amount of Rs.4,84,48,750/- (Rupees Four Crores eighty four lacs forty eight thousand seven hundred fifty only) out of which the accused paid Rs.1,48,750/- by cash & for the remaining amount of Rs.4,83,00,000/- the accused handover his post dated cheques the details of entire payment which are under:-

i. Rs.148,750/- (Rupees one lac fourty eighty eight thousand seven hundered fifty only) paid in cash on executing this Consent Terms.

ii. Rs.3,33,00,000/- (Rupees Three crore thirty three lacs only) & issued his cheque vide cheque No.475519 dated 25/04/2014 drawn on Uco Bank, Mukund Nagar Brach, Pune.

SJ18-19COMSS186-17-.DOC

iii. Rs.1,50,00,000/- (Rupees One crore fifty lacs only) & issued his cheque vide cheque No.475520 dated 25/04/2014 drawn on UCO Bank, Mukund Nagar Branch, Pune."

17. It would be contextually relevant to note that plaintiff no.1

passed receipts in acknowledgment of sum of Rs.1,48,750/- in

cash and adjustment of a sum of Rs.35,00,000/- and

Rs.60,00,000/- against the properties mentioned at Clauses (a)

and (b) of paragraph 4, extracted above.

18. The defences sought to be urged on behalf of the

defendants are required to be appreciated in the aforesaid

background. The challenge to the tenability of the suit at the

instance of plaintiff no.2 for want of privity of contract between

plaintiff no.2 and late Omprakash appears to carry some

substance. It could not be shown that plaintiff no.2 had any

role in the transactions with late Omprakash.

19. The endeavour of the plaintiffs to fasten the liability on

defendant nos.1 to 5 is premised on their character as legal

representatives of late Omprakash. It is not the case that any of

the defendants had drawn the cheques. In fact, the plaint

proceeds on the premise that the defendants are liable to repay

the amount as they represent the estate of late Omprakash.

The extent of the liability of the legal representatives to

discharge the debt, it is trite, co-relates with the estate which

SJ18-19COMSS186-17-.DOC

devolves upon the legal representatives. Sensing the difficulty

on this front, the plaintiffs assert that in the Consent Terms

executed on 18th November, 2014, it was represented by late

Omprakash that his wife and son had guaranteed the

repayment and they were also to execute the Consent Terms. In

fact, the said Consent Terms purported to be executed on 18 th

November, 2014 bear the names of defendant no.1 and

defendant no.2 as executants, sans their signatures.

Indisputably, defendant nos.1 and 2 have not executed the said

Consent Terms.

20. Though Mr. Arjunwadkar attempted to draw home the

point that the Consent Terms dated 13 th January, 2014, as well

as 18th November, 2014 are of suspect probative value as none of

them have been signed by the Advocates for the respective

parties, and, therefore, betray the element of duress and undue

influence, I am inclined to consider the prayer for grant of leave

on a more substantive ground of the nature of the initial

understanding arrived at between the parties, put-forth by Mr.

Arjunwadkar.

21. The articles of agreement dated 24 th September, 2011, as

indicated above, contain reciprocal promises. Clauses 7, 8 and

11 of the articles of agreement read as under:

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"7. The party of the second part agrees that on receipt of the aforesaid sum by way of realization of the cheques time to time the party of the second part shall release the flats which are acquired for sale and possession to the party of the first part with authority to sale and for appropriate consideration.

8. The party of the second part agrees and undertake that on receipt of the minimum 35% amount as stated above, he shall handover to the party of the first part original documents in respect of Ambegaon property with realization of Deed.

11. It is agreed by the party of the second part that, he shall release the proportionate square fts. of land/FSI in favour of the party of the first part"

22. Evidently, under the articles of agreements, after receipt of

the sum agreed to be paid thereunder. Plaintiff no.1 was to

handover the flats, which were developed in the said projects, to

the plaintiff. This nature of the understanding is further

echoed in the Consent Terms dated 13th January, 2014, Clause

(8) thereof reads as under:

"8.It is agreed between parties that upon compliance of the consent terms and discharge of entire amount liability, the complainant shall return all the documents, original cheque, MOU pertaining to the property situated at Ambegaon Budruk, Survey No.4 and property situated at Kondhwa Khurd Survey No.46/15/1, Taluka Haveli, Dist. Pune."

23. In this backdrop, in the affidavit-in-reply, the defendants

have categorically asserted that plaintiff no.1 took possession

and control of 44 unsold flats at Kondhava and Ambegaon,

Pune. Out of which, plaintiff no.1 had already sold 39 flats and

received consideration of Rs.8 Crores. If these contentions are

considered in the backdrop of the initial case set up by the

SJ18-19COMSS186-17-.DOC

plaintiffs that late Omprakash had agreed to repay a sum of

Rs.6,50,00,000/- as the agreements for development between

the parties did not work out, then a serious triable issue arises.

The stipulations in the articles of agreements, extracted above,

underscore the fact that plaintiff no.1 was to put late