In a suit for recovery of money based on dishonored cheques issued towards the purchase of shares, the court held that the appellants raised triable issues regarding the consideration for the share purchase agreement and the replacement of a post-dated cheque with two other cheques. The court allowed the appellants to defend the suit subject to depositing a sum of Rs. 10 lakhs in court and furnishing security of movable or immovable property for a further sum of Rs. 10 lakhs.

( 1 )

( 2 ) THESE two appeals have been preferred against the order dated 1. 9. 95, -passed by the learned Single Judge whereby learned Single Judge. dismissed the application (I. A. 5113/93) under Order 37 Rule 3 (5) of the Code of Civil Procedure, filed by the appellants in Suit No. 309/93, seeking leave to contest the suit. Learned Single Judge held that no triable issues were involved and contentions raised in defence were frivolous. As a consequence of dismissal of IA. 5113/93, the suit was decreed against the appellants for a sum of Rs. 18,97,093. 85, which included the principal amount of Rs. 16,93,867. 70 and interest amounting to Rs. 2,03,226. 15 @ 18% instead of 24%. Learned Single Judge granted future interest @ 18% on the principal amount of Rs. 16,93,867. 70 from the date of suit. Aggrieved by the rejection of their leave to contest, the appellants have preferred the above appeals.

( 3 ) FAO (OS) 292/95 is preferred by M/s. Cosmos Builders and Promoters (P) Ltd. while FAO (OS) 293/95 is preferred by Sh. Manoj Mittal, wherein M/s. Cosmos Builders and Promoters (P) Ltd. have been impleaded as a proforma respondent. Let us briefly notice the relevant facts giving rise to the present appeals :

( 4 ) THE respondent/ plaintiff, Sh. Rajesh Ahuja filed the Suit No. 309/93 against Sh. Manoj Mittal, appellant/defendant No. 1 and M/s. Cosmos Builders and Promoters (P) Ltd. ,-appellant/defendant No. 2. The suit was filed by Sh. Rajesh Ahuja, former Managing Director of M/s. Cosmos Builders and Promoters (P) Ltd. , contending that he was dealing in real estate and that he had entered into a contract with M/s. Methodist Church on behalf of M/s. Cosmons Builders and Promoters (P) Ltd. , for construction of residential flats, which came to be known as the "battery Lane Project". It is his contention that he had suffered losses in business of M/s. Cosmos Builders and Promoters (P) Ltd. , and thereupon he invited one Mr. Ashok Verma and his wife Mrs. Meenakshi Verma to be Directors in the Company and sold a large number of shares in their firm keeping about 15 percent shares with him. The appellant, Sh. Manoj Mittal, his father and other members of the family acquired the remaining 85 percent shares in the Company, from transferees of the shares. The appellants were interested in acquiring the remaining 15 percent shares held by respondent Sh. Rajesh Ahuja, who finally agreed to sell them in writing for a total consideration of Rs. 19 lakhs. Towards the payment of Rs. 19 lakhs, the following cheques were issued by the appellants Manoj Mittal and M/s. Cosmos Builders and promoters (P) Ltd. Cheque No. 012277 dated 11. 4. 92 for Rs. l,04,850. 00 of M/s. Bhatinda Chemicals Ltd. Post-dated Cheque Nos. 825453 dated 10. 10. 92 for Rs. 17,95,150. 00 of M/s. Consmos Builders and Promoters Pvt. Ltd. It was then alleged that the appellant No. 1 being unable to arrange for the funds i. e. . Rs. 17,95,150. 00 , requested Sh. Rajesh Ahuja to return the cheque and in lieu thereof agreed to issue two cheques for the said amount. The appellant, Sh. Manoj Mittal then gave cheques bearing Nos. 825455 dated 24. 4. 92 for Rs. 1,01,282. 30 and 825456 dated 10. 10. 92 for Rs. 16,93,867. 70. Cheque No. 012277 dated 11. 4. 92 for Rs. l,04,850. 00 and cheque No. 825455 dated 24. 4. 92 for Rs. 1,01,282. 30 issued by the appellants have been encashed. However, Cheque No. 825456 for Rs. 16,93,867. 70 could not be encashed for "insufficient funds". In the event, Rajesh Ahuja then filed the present suit under Provisions of Order 37, Civil Procedure Code claiming a total sum of Rs. 19,64,868. 00 comprising Rs. 16,93,867. 70 as principal plus 24% interest.

( 5 ) HAVING noticed the salient averments in the plaint, let us notice the appellants case based on the grounds set out in the application for leave to contest and in the present appeals. The first contention raised by the appellants was that the respondent had agreed to sell the 15% holding being