Important Point – Leave to defend can be granted to defendant on deposit of principal amount.

YOGESH KHANNA, J.

IA No.13491/2015

1. This application is under Order 37 Rule 3 (5) of the CPC moved by the defendant for leave to defend in a suit filed against the defendant for recovery of Rs.2.25 Crore with interest @ 18% pa from 03.12.2011 till the date of realization on the basis of a written agreement dated 15.11.2008.

2. Before coming to the application it would be appropriate to briefly state the facts.

3. The plaintiff alleges the defendant has taken from him friendly loan from time to time and duly acknowledged it in the agreement dated 15.11.2008. The loan amount was used by the defendant for purchase of a land admeasuring 7 bigha comprising in Khasra Nos.252(1-09) and 253(5-13), situated in the revenue estate of Village Satbari, Mehruali, New Delhi. Five post dated cheques (PDCs) for an amount of Rs.45 Lac each were given and clause 4 of the agreement says in event of not honouring of the aforesaid cheques on presentation, the plaintiff shall be entitle to initiate legal proceedings. Post dated cheques were dishonoured for reason ‘insufficiency of funds’ and ‘drawer’s signatures differ’. The demand notice dated 07.12.2011 was sent but was not replied. The plaintiff filed complaint under Section 138 of the Negotiable Instruments Act, 1881 and also this suit for recovery under Order 37 of the CPC.

4. The defendant in its application for leave to defend alleges:

(a) the plaintiff; Ms. Sangeeta – wife of defendant; Mr. Sandeep Kohli, and Ms. Poonam Virk; being close friends wish to exploit the real estate market and decided to incorporate a company namely ‘M/s Saj Properties Limited’ (hereafter referred as M/s SPL), incorporated and registered on 01.11.2004 wherein all the above four person have equity of 25% shares. The defendant being a local person was instrumental in procuring the land for SPL after negotiating with the owners. It is alleged that all the above four person contributed equal amount and were allotted 25000 equity shares of Rs.10/- each. The share holders were to contribute their personal resources to purchase various immovable properties and to develop them for earning profits. From time to time, share holders advanced loan to the SPL for purchase of land. Various properties as mentioned in para No.5 of the application were purchased. As on 31.12.2007 the investment made by the plaintiff was Rs.5,43,25,000/-; by Mr. Sandeep Kohli was Rs.93,32,000/-; by Ms.Poonam Virk was Rs.8,00,000/-; and by the wife of defendant was Rs.6,75,000/-. The plaintiff proposed the share holders to either equalize their investments for the lands held by M/s SPL or the land be sold and the proceeds be apportioned as per the ratio of their individual investments. The wife of the defendant agreed to pay further an amount of Rs.1.56 Crore to the plaintiff to equalize her investment and hence some agreement dated 04.01.2008 was prepared and signed by all the share holders of the company in good faith. An oral understanding was allegedly effected between the plaintiff and the defendant that the wife of the defendant would retain the land of her share by paying Rs.1.56 Crore in the company.

(b) the plaintiff and defendant were to purchase the land admeasuring 7 bigha comprising in Khasra Nos.252(1-09) and 253(5-13), situated in the revenue estate of Village Satbari, Mehruali, New Delhi for a consideration of Rs.3.00 Crore and advance of Rs.1.38 Crore was paid. However, this deal did not materialize as the said land was acquired by the Government and even the advance money was forfeited. This land was to be purchased for the benefit of the plaintiff and the defendant and both were to share equally the profits/losses. An oral agreement was entered into between the two where the defendant was to pay to the plaintiff a sum of Rs.1.56 Crore against the liability of investment in M/s SPL to equalize the investment of his wife and a sum Rs.69.00 Lac towards contributing the loss suffered on account of purchase of the land of village