The statutory presumption under the Negotiable Instruments Act, 1881, places a higher burden on the defendant to elucidate the defense in cases of dishonored cheques. The court also emphasized the entitlement to reasonable compensation in case of breach of contract under the Indian Contract Act, 1872.

JUDGMENT

N.J.JAMADAR,J. - This commercial division summary suit is instituted to recover a sum of Rs.39,12,43,595.00 along with further interest at the rate of 18% p.a. from the date of dishonour of the cheques which form the basis of the suit.

2. The material averments in the plaint can be stated in brief as under:-

The plaintiff is a limited liability partnership incorporated under the provisions of Limited Liability Partnership Act, 2008. The plaintiff is engaged in the business, inter alia, of development of immovable properties. M/s. Primeland Constructions, the defendant (Primeland) is a partnership firm registered under the Partnership Act, 1932. To the knowledge of the plaintiff, Jayesh Shah, Geeta Shah, Ketan Shah, Sayed Mustafa Javed, Mohammad Afzal Shaikh Faird and Bharat Vijan are the partners of defendant firm. They are engaged in the real estate business.

3. Pursuant to the representation made by the defendant that it had acquired certain rights in respect of immovable property situated at Survey No. 42-A (Part), CTS No. 874-B (Part) and CTS No. 875-D (Part), Borivali, Mumbai (subject land), the plaintiff and the defendant entered into a Joint Development Agreement on 31/8/2019 (JDA) whereby the parties agreed to jointly develop a portion of the subject land admeasuring 2500 sq. mtrs. which would generate a minimum FSI of 14000 sq. mtrs. approximately. Under the terms of the agreement, in addition to payment of a sum of Rs.25.00 Crores towards security deposit, the plaintiff was required to incur expenditure for the development of the subject land.

4. In performance of its obligations under JDA, the plaintiff spent considerable amount towards development of the subject land. However, the defendant could not perform its promises under JDA. Expressing inability to discharge its obligations under JDA, the defendant undertook to repay to the plaintiff a sum of Rs.39,12,43,595.00 on or before 30/10/2021 which came to be recorded in a Memorandum of Understanding dtd. 2/8/2021 (MOU) executed by and between the parties. The said amount of Rs.39,12,43,595.00 was agreed to be paid in accordance with the schedule agreed thereunder. Simultaneously, with the execution of MOU, the defendant issued two cheques drawn for Rs.10.00 Crores and the third cheque drawn for Rs.19,12,43,595.00 payable on 15/9/2021, 30/9/2021 and 30/10/2021 respectively, as per the agreed schedule in the MOU.

5. Upon presentment, the cheques drawn for Rs.10.00 Crores and Rs.19,12,43,595.00 were returned unencashed on 17/9/2021 and 8/11/2021, respectively, for insufficiency of funds. Whereas the second cheque drawn for Rs.10.00 Crores was returned unpaid with the remarks "payment stopped by drawer". On the instruction of a partner of the defendant, the second cheque was again presented for encashment, but returned unpaid for an identical reason on 12/10/2021. Statutory notices were addressed to the defendant on 19/10/2021 and 13/11/2021 calling upon the defendant to pay the amount covered by the dishonored cheques.

6. In response to the notice dtd. 13/11/2021 the defendant, vide letter dtd. 3/12/2021, acknowledged the liability to pay the amount mentioned in the MOU. But, expressed its inability to pay the same on account of the then prevailing market conditions. Hence, this suit to recover the amount of Rs.39,12,43,595.00 covered by the dishonoured cheques along with interest @ 18% p.a. from the respective dates of dishonour.

7. Along with the suit, the plaintiff filed an Application for interim reliefs inclusive of an order for attachment before judgment of the property of the defendant firm and its partners.

8. In response to the service of writ of summons, the defendant appeared. Thereupon, the plaintiff took out a Summons for Judgment. The defendant filed an affidavit in reply seeking an unconditional leave to defend the suit.

9. The defendant also filed an affidavit in reply in opposition to the interim relief. To which an affidavit in rejoinder came