A defendant raising plausible defense is normally granted leave to defend, highlighting the need for financial accountability and evidentiary support in contracts involving promissory notes.

ORDER :

V. LAKSHMINARAYANAN, J.

1. This civil revision petition arises against the order of the learned II Additional District Judge, City Civil Court, Chennai in I.A.No.4 of 2021 in O.S.No.4840 of 2021 dated 20.10.2022.

2. O.S.No.4840 of 2021 has been presented under the provisions of Order XXXVII Rule 1 & 2 of the Code of Civil Procedure.

3. The case of the plaintiff is that a sum of Rs.47,75,000/- had been paid by the plaintiff to the defendants on the foot of a promissory note executed in Kilpauk, Chennai. On 07.10.2020, the defendants executed a power of attorney for their property situated in Ambattur in favour of the plaintiff. Subsequently, the power of attorney was cancelled on 06.07.2021. The plaintiff pleading that the defendants are not paying the principle or the interest, presented the suit on 15.07.2021.

4. Being a suit under Order XXXVII Rule 1 and 2 of the Code of Civil Procedure, on summons being served on the defendants, notice of appearance was served by the learned counsel for the defendants on the plaintiff. Thereafter, summons for judgment was taken out by the plaintiff. On receiving the summons for judgment, an application was filed seeking leave to defend the suit. This application was numbered as I.A.No.4 of 2021.

5. The plea that had been taken on the leave to defend application is that the defendants out of the sum of Rs.47,75,000/- borrowed by them, had repaid a sum of Rs.13,00,000/- to the persons directed by the plaintiff. The said amount of Rs.13,00,000/- is divided into two components namely a sum of Rs.8,50,000/- by cash and a sum of Rs.4,50,000/- by way of RTGS on 19.10.2020. The payments were made to one Arun Kumar, Pawan Kumar Lodha, and Naveen Ostwal, who have been nominated by the plaintiff to receive the sums paid by the plaintiff.

6. The defendants would further state that as the sum of Rs.13,00,000/- had been returned on 19.10.2020 and a further sum of Rs.8,00,000/- had been paid on several dates, they are entitled for unconditional leave to defend. They would further plead that charging an interest at the rate of 36% per annum is usurious and excessive and all that an unsecured creditor, in terms of direction from the Reserve Bank of India, is entitled to receive only 12% per annum for the loans extended by them. They would further plead that they have given the title deed for the property situated at Ambattur which is worth about Rs.1.5 crores.

7. On receipt of this petition seeking leave to defend, the plaintiff filed a detailed counter stating that there is an admission of liability of borrowal of Rs.47,75,000/- and also an admission on signature executed on the promissory note. He would dispute the payment of Rs.13,00,000/- and would state that Arun Kumar, Pawan Kumar Lodha and Naveen Ostwal, the persons mentioned in the leave to defend application have nothing to do with the plaintiff. He would allege that the plea of return of part of the amount is an averment in air without any evidence to substantiate the same. Therefore, he sought for dismissal of the application.

8. It is pertinent to point out that in the counter filed by the plaintiff, he had admitted that a sum of Rs.4,00,000/- has been paid by the defendants to him. On consideration of the petition and counter, the learned II Additional Judge, City Civil Court, Chennai came to the conclusion that as the defendants have returned a substantial sum to the plaintiff, they are entitled to unco