The main legal point established is the liability of the Defendants under the Negotiable Instruments Act, 1881, and the enforceability of the deed of personal guarantee to secure the outstanding debt.

JUDGMENT

V. Kameswar Rao, (Oral) J. - This is a Summary Suit filed under Order XXXVII of the Code of Civil Procedure, 1908 (CPC) by the Plaintiff for recovery of debt and liquidated demand in money payable by the Defendants, jointly and severally, to the Plaintiff on a written contract and on a guarantee as embodied in the Deed of Personal Guarantee dated December 19, 2016 and Deed of Settlement dated March 26, 2016 executed between the parties and cheques dated December 31, 2016 issued by the Defendant No. 1 to the Plaintiff.

2. At the outset, I shall narrate a brief factual background of the case. The Plaintiff is a Society registered under the Societies Registration Act, 1860. The Defendant No. 1 is a company closely held, family-owned, managed and controlled by the Defendant No. 2 and his family. The Plaintiff, in order to provide low cost housing to its members on a no-profit no-loss basis, was in the process of purchasing land in L-Zone territory of Delhi so as to develop a group housing complex for its members under the Master Plan, Delhi 2021. The Defendant No. 1 represented to the Plaintiff that it has the expertise and experience to arrange purchase of land required by the Plaintiff. Relying upon the assurance and representation of the Defendant No.1, the Plaintiff entered into a Memorandum of Understanding dated January 22, 2014 with the Defendant No.1 and appointed the Defendant No.1 for the purposes of acquiring land for and on behalf of the Plaintiff in villages of Pandwalan Kalan, Pandwalan Khurd, Daulatpur and Hasanpur in the territory of Delhi. The Defendant No.1 was to act as facilitator for the transactions and identify the lands and negotiate the price with the landowners. After negotiating the price with the landowners, the Defendant No.1 was to take the approval of the Plaintiff before finalising the transaction. Upon the Plaintiff approving the transaction, the Plaintiff would advance part sale consideration to the Defendant No.1 which was to be strictly utilised for making payment to the landowners as advance or part payment. The balance sale consideration was to be paid by the Plaintiff to the said landowners at the time of registration of the title. In accordance with the aforesaid arrangement, the Defendant No.1 identified and with the approval of the Plaintiff finalised sale transaction in respect of six plots of land. Detailsof the said six plots for which sale transactions were finalised is as under:-

3. In accordance with the arrangement, the plaintiff, in good faith advanced part of the sale consideration to the Defendant No.1 for payment to the land owners and with the instructions that the same was to be utilised to pay part sale consideration to the landowners. At the time of registration of the Sale Deed in respect of the plots of land, the Plaintiff paid the balance sale consideration to the landowners. The registration of the sale deeds was effected in the name of the Plaintiff in respect of the plots of land. At the time of registration of the sale deeds, the Defendant No.1 had issued its own cheques in the name of the landowners in respect of two plots namely SI. No. 5 and 6 of the table above, purporting to be out of the advances received by Defendant No.1 from the Plaintiff.

4. It is averred that the Defendant No. 1 appropriated part of the said advances by the Plaintiff for its own use and instead issued cheques in favour of the landowners from its own account without ensuring sufficient funds in its account to honour them. The cheques issued by the Defendant No.1 to two of the landowners were dishonoured. The said landowners