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2022 Supreme(Telangana) 550
IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
P. NAVEEN RAO, J. SREENIVAS RAO, JJ.
B. Ravinder Reddy - Petitioner
Versus
M/s. IJM India Infrastructure Limited - Respondent
COM. CA. No. 48 of 2019
Decided On : 20-09-2022
For the Petitioner: Chandrasen, Law Offices.
For the Respondent: A. Sanjay Kishore.
The main legal point established in the judgment is that the plaintiff was entitled to recover the amount based on the terms of the MoU and the promissory note, and that the suit was maintainable within the jurisdiction of the court.
Headnote:
loan - recovery of amount - MoU - Negotiable Instruments Act, 1881
Fact of the Case:
The plaintiff company entered into a Memorandum of Understanding (MoU) with the defendants and paid Rs. 2.5 crores as a loan with the prerequisite that the defendants comply with the conditions stipulated in the MoU. The defendants failed to obtain necessary permissions and approvals within the stipulated time, leading the plaintiff to file a suit for recovery of the amount. The defendants contended that the amount was paid as advance sale consideration, not a loan, and that the promissory note was inadmissible in evidence as it was not registered. The trial court decreed the suit in favor of the plaintiff, holding that the plaintiff was entitled to recover the amount along with interest at 18% per annum from the date of filing of the suit till realization.
Finding of the Court:
The trial court found that the plaintiff had given a hand loan of Rs. 2.5 crores with the understanding that the defendants would obtain necessary permissions and approvals within 60 days. The defendants failed to comply with the terms of the MoU and did not obtain the required permissions. The court also found that the promissory note was not issued as security and that the plaintiff was entitled to recover the amount based on the terms of the MoU.
Issues: The main issues were whether the suit for recovery of the amount was maintainable, whether the court had jurisdiction to entertain the suit, and whether the promissory note was admissible in evidence.
Ratio Decidendi: The court held that the suit was maintainable as the promissory note was executed within the jurisdiction of the court. The court also found that the promissory note was admissible in evidence and that the plaintiff was entitled to recover the amount based on the terms of the MoU.
Final Decision: The appeal was dismissed, and the judgment and decree passed by the trial court in favor of the plaintiff were upheld.
JUDGMENT :
J. Sreenivas Rao, J.
The appellants are the defendants in the suit. The respondent/plaintiff filed a suit in O.S.No.48 of 2014 on the file of the Court of XXIV-Additional Chief Judge, City Civil Court, Hyderabad, seeking the following reliefs :
(i) decree be passed ordering the defendants to pay the amount due for an total amount of Rs.3,74,62,500=00 (Rs.Three Crores Seventy Four Lakhs, Sixty-two Thousand and Five Hundred only) being aggregate of principal amount of Rs.2,50,00,000=00 (Rs.Two Crores and Fifty Lakhs only) and Rs.1,24,62,500=00 (Rs. One Crore Twenty Four Lakhs Sixty Two Thousand Five Hundred only) being the interest @ 18% per annum for the period from 11/04/2011 till 18/01/2014.
(ii) Interest @ 18% on the total amount of Rs.3,74,62,500=00 (Rs.Three Crores Seventy four Lakhs Sixty two thousand and Five Hundred only) from the date of decree till the date of payment.
(iii) cost of the suit be awarded.
2. The said suit, O.S.No.48 of 2014 was transferred to the Commercial Court-cum-XXIV-Additional Chief Judge, City Civil Court, Hyderabad for trial and disposal of commercial disputes at Hyderabad and the same was renumbered as COS.No.14 of 2016.
3. Plaint averments:
3.1 The plaintiff averred in the suit that the plaintiff Company is a reputed construction company having expertise in developing residential and commercial units and has also undertaken various infrastructure development projects in India and further averred that the defendants approached the plaintiff by representing that Defendant No.1, his son and daughter i.e., defendants 2 and 3 respectively were the absolute owners of suit schedule property; i.e., the land admeasuring Ac: 33-00 gts., in survey No.696 situated at Janwada village, Shankerpally Mandal, Ranga Reddy district (schedule land) and further averred that the defendants expressed their intention to sell the above schedule land to the plaintiff for a total sale consideration of Rs.25,00,000=00 ( Rs. Twenty Five Crores only) and requested to enter into an agreement of sale. The defendants represented that the schedule land is not a protected land for catchment nor was same covered within the ambit of G.O.Ms.No.111, M.A. dated 08-03-1996. The defendants further informed that except for obtaining certain necessary permits/approvals/licenses for covering the schedule land for residential purpose in the form of high rise apartments, villas, golf club, I.T. park etcetra (approvals) from the concerned authorities the above schedule land was un-encumbered and same can be conveyed and further averred that the plaintiff informed the defendants that unless all the approvals and consents were obtained no agreement of sale could be executed. At that stage the defendants requested the plaintiff to give him an amount of Rs.2,50,00,000=00 (Rs. Two Crores and Fifty Lakhs only) as loan, so as to enable the defendants to obtain all the approvals required for the construction of high rise apartments, residential units etc., that would facilitate the sale of the schedule land and the plaintiff agreed to give the above said amount, accordingly the plaintiff and defendants have entered into Memorandum of Understanding, dated 10-02-2011 (hereinafter called as "MoU")
3.2 It is stated that as per the MOU the defendants were required to obtain all the approvals and consent within a period of 60 days from the date of MOU and in the event the defendants fails to obtain the approvals, the defendant shall repay the loan within a period of 15 days from the expiry of the said 60th day, failure of which, the defendants shall be jointly and severally liable to pay an interest on the loan amount @ 18% per annum, from the 61st day.
3.3 It is further stated that the plaintiff as per MOU the plaintiff had given a loan of Rs.2,50,00,000=00 through a issuing a cheque bearing No.631065, dated 10-2-2011 of HSBC Bank. The said cheque issued in favour of defendant No.1 was presented and the same was cleared on 12-2-2011. As per clause 1 of
