The main legal point established in the judgment is the requirement for full disclosure of facts in summary proceedings and the allowance of a reasonable and plausible defense.

MANMOHAN SINGH, J.

1. By this order I shall dispose of the present application filed by the defendants under Order XXXVII, Rule 3(5) CPC praying for unconditional leave to defend the instant suit of the plaintiff.

2. The plaintiff has filed the present suit for recovery of Rs.50,00,000/- (Rs. Fifty Lac).

Plaintiff’s Case

3. As per the plaint the facts are that one of the business acquaintances of the plaintiff introduced him to defendant Nos. 2 to 4 who represented themselves to be reputed estate agents carrying on business under the name and style of defendant No.1, company and they were its directors and were carrying on their business of estate agents in the locality of Loni, Tronica City and all adjoining areas of Ghaziabad, Baghpat, Baraut, Meerut, etc.. On further inquiry, the plaintiff found out that defendant No.1 is a duly registered company under the provisions of the Companies Act, 1956, having its registered office at B-2/426, Yamuna Vihar, New Delhi.

4. As the defendants learnt about the plaintiff?s desires of purchasing industrial lands, the defendant Nos. 2 to 4 represented to the plaintiff that they could help the plaintiff acquire industrial plots in the state of Uttar Pradesh and stated that in order to secure a reasonably priced and hassle-free land he should be prepared to invest money being “advance consideration/earnest money” to the tune of atleast Rs.50,00,000/- thereafter, they induced the plaintiff to invest money through them by drawing crossed cheques in favour of the defendant No.1 company. The plaintiff also agreed to give certain advances i.e. “finance” in the name of defendant No.1 company to enable the defendant Nos. 2 to 4 to clinch the deals by making spot payments of earnest money/advance consideration ot the prospective sellers.

5. The plaintiff initially paid a sum of Rs.15,00,000/- to the defendant No.1 by a cheque dated 02.04.2008, bearing No.717624 drawn on the Union Bank of India, and further, paid a sum of Rs.35,00,000/- by a cheque dated 28.05.2008 bearing No.717641 drawn on the Union Bank of India. The said two cheques were encashed by the defendants on 04.04.2008 and 31.05.2008 respectively and thus, total sum of Rs.50,00,000/- was received by the defendants from the plaintiff. It is stated by the plaintiff that after receiving Rs.50,00,000/- the defendants failed to procure the land for the plaintiff as promised by them. Further, it is stated that when the plaintiff insisted the defendants ought to keep their promise that the defendants while expressing their inability and issued five post-dated crossed cheques payable to plaintiff drawn on HDFC Bank Ltd.. The details of the said five cheques is given is as follows:

Cheque No. Dated Amount (in Rupees)

507609 12.07.2008 2,50,000/-

507610 12.08.2008 2,50,000/-

507611 12.09.2008 2,50,000/-

507612 12.10.2008 2,50,000/-

507613 12.11.2008 40,00,000/-

TOTAL 50,00,000/-

6. When he presented the first cheque bearing No.507609 for encashment on 12.07.2008 the bankers of the defendants returned the said cheque “unpaid” with their endorsement “Insufficient Account Balance/Funds Insufficient”. Thereafter, the remaining four cheques issued by the defendants also when presented for encashment were returned “unpaid” with their endorsement “Funds Insufficient”. It is stated that these four cheques were dishonored by the defendant?s bankers on different dates during the month of February, 2009. Therefore, the plaintiff served a legal notice dated 09.03.2009 upon the defendants in terms of Sections 138 to 142 of the Negotiable Instruments Act, 1881 asking the defendants to pay their acknowledged dues of Rs.50,00,000/-. On 21.03.2010 the advocate of the defendants herein sent a reply, acknowledging the issuance of the above mentioned five cheques and contending that the aforesaid five cheques ought not to have been