The importance of producing credible evidence to substantiate claims made in a suit.

S.P. GARG, J.

1. The present suit has been filed by Welldone Estate projects Private Limited (hereinafter the plaintiff) against Today Homes and Infrastructure Private Limited (hereinafter defendant No. 1), G.K. Gambhir (hereinafter defendant No. 2), Rajesh Arora (hereinafter defendant No. 3) and Ludhiana Improvement Trust (hereinafter defendant No. 4) for recovery of Rs. 7,95,69,000/-.

2. Briefly stated the facts as reflected in the plaint are that the plaintiff is a company, incorporated and registered under the Companies Act, 1956. Bharat Halwasiya, authorized representative of the plaintiff is authorized to institute the present suit. Defendant No. 1 is a company duly incorporated and registered under the provisions of a Companies Act and is holding power of attorney in their favour executed by defendant No. 4 to take decisions on its behalf in respect of the purported project, namely, Ludhiana City Centre (hereinafter project). Defendant No. 2, Director and authorized representative of defendant No. 1 company induced the plaintiff to invest Rs. 5,19,00,000/- into the said project; personally assured and guaranteed repayment of the said amount along with interest and as such is a necessary and proper party in his individual capacity and also being the director of defendant No. 1. Defendant No. 3 is the authorized representative and recognized broker of defendant No. 1 by virtue of a pre-existing understanding between them. Defendant No. 3 along with defendant No. 2 had also induced the plaintiff to part with money Rs. 5,19,00,000/- for investing into the said project and had personally guaranteed its repayment. Defendant No. 4, is a government entity, claiming to have entered into a Joint Venture Agreement dated 24.05.2005 with defendant No. 1 for development and construction of 25-26 acres multi-purpose development at Shaheed Bhagat Singh Nagar, Ludhiana (Punjab) being Ludhana City Centre.

3. It is averred that the plaintiff made payment of Rs. 5,19,00,000/- in the joint escrow account/designated bank account, namely, Today Homes Infrastructure Pvt. Ltd. Citi Centre-LIT. The amount has been duly received and utilized by defendants No. 1 to 4. Defendant No. 4 too is jointly and severally liable to pay the suit amount.

4. It is further averred that in November, 2005, the defendant No. 1 through its director and authorized representatives (defendant No. 2 and 3) approached the plaintiff and induced him to make investment in their project being developed at Shaheed Bhagat Singh Nagar, Ludhiana, Punjab. It was represented by defendants No. 1 to 3 that the Joint Venture Agreement dated 24.05.2005 had already been entered into with defendant No. 4 for the purpose of development of the integrated 25-26 acres of land situated at Shaheed Bhagat Singh Nagar, Ludhiana, Punjab. Defendants No. 1 to 3 assured the plaintiff that the amount so invested in the project will be fully secured against the execution of appropriate legal documents and in the event of failure of execution of documents for any reason or failure of project, the amount paid shall be returned by them along with interest @18% per annum. Being persuaded and influenced by the aforesaid representations and assurances, the plaintiff agreed to buy Rs. 1,50,000/- square feet area in the said project @ Rs. 3,800/- per square feet. The amount was to be deposited in the joint escrow account and it was to be utilized for the development of the said project. In terms of the said understanding, the plaintiff had issued a cheque for the sum of Rs. 1,50,00,000/- bearing No. 005956 dated 9.12.2005 in favour of Today Homes Infrastructure Pvt. Ltd. Citi Centre-LIT duly received by defendants No. 1 to 3; receipt dated 10.11.2005 recording the personal guarantee of repayment by defendant Nos. 2 and 3 was also issued.

5. Further, case of the plaintiff is that pursuant to the said agreement he handed over two more cheques bearing No. 005958 dated 12.12.2005 for the sum of Rs. 1,50,00