Active involvement in inducing investment and liability for cheating under Section 406/409/420/120B IPC.

P.S. TEJI, J.

1. The present appeal has been filed by the appellant against the judgment and decree dated 02.08.2008 passed by the learned Additional District Judge, Delhi whereby the suit filed by the plaintiff/respondent for recovery of Rs 4,00,000/- as principal amount with interest of Rs.50,000/- @ 18 % per month, total amounting to Rs. 5,50,000/- had been decreed in favour of the plaintiff /respondent and against the defendants/appellant.

2. The facts enumerating from the plaint filed before the Court below are that the plaintiff/respondent no.1 had filed a summary suit under Order 37 CPC alleging therein that defendant no.1 was a finance company and defendant no.2 to 4 were its directors whereas defendant no.5 to 8 were its active members who were managing all the affairs of defendant no. 1 firm. They induced the plaintiff/respondent no. 1 to invest money in their company in order to earn interest @18% per month. The plaintiff/respondent No.1 invested his hard earned money Rs. 4,83,000/- on 26.12.2003 with defendant no.1 by making a cash payment against which defendant no.1 issued cash certificate No. 001862 having maturity dated 26.06.2004 and was assured that he will get full amount with interest on its maturity. In May 2004, the plaintiff/respondent no. 1 reminded the defendants for payment of full amount but the defendants/respondent no.2 expressed their inability to pay the entire amount on maturity but agreed to pay only a part of the matured amount and forced the plaintiff/respondent no. 1 to accept Rs. 83,000/- with promise to repay the amount of Rs.4 lacs with 18% per month interest within a short span of time. However the defendants/respondent no.2 failed to make the payment of outstanding amount and the case FIR No.93/05 under Section 406/409/420/120B IPC was registered and the case is still pending before the Ld. ACMM at Rohini Court, Delhi.

3. Summons for appearance were issued to the defendants including the appellant-herein. No appearance was filed on behalf of defendant no.1, 3, 4, 6 & 7 despite service of summons. Defendant no.2 & 5 had refused summons. An application seeking leave to defend was filed on behalf of defendant no.8/appellant in which it was alleged that he was not the active member of the defendant no.1 company and the suit was barred by limitation. There was no cause of action against him nor was he liable to pay any money to the plaintiff. He denied all allegations of the plaintiff/respondent.

4. The Court below dismissed the leave to defend application of the appellant/defendant no.8 and decreed the suit in favour of the plaintiff/respondent no.1 against all the defendants for Rs.4,00,000/- with cost and interest @ 18% per annum from 26.04.2004, pendent lite as well as future till realization. All the defendants have been directed to pay the amount severally and jointly. Feeling aggrieved by the judgment and decree in the present suit, the present appeal has been filed.

5. The main contention of the appellant is that the trial court has failed to appreciate the fact that there is no document on record against the appellant which gives a cause of action the plaintiff/Respondent no.1 to file a suit under Order 37 CPC against the appellant. Further, the learned Trial Court has erred in law while holding that the appellant was actively involved in the inducement of plaintiff on account of which the plaintiff invested the money with defendant no.1-company. It is submitted that mere summoning to face trial u/s 420 read with section 120B cannot be treated as a document under Order 31 Rule 1. Further, the Ld. Trial Court has failed to appreciate that several triable issues arise so far as the present appellant is concerned. It is also submitted that there was no cause of action available to Respondent No.1 to file the suit against the appellant. Moreover, there is nothing on record which shows that the appellant has ever induced respondent no.1 to enter into the alleged transaction with Res