IMPORTANT POINT
The court affirmed that defendants are entitled to unconditional leave to defend if they raise triable issues, emphasizing the presumption in favor of granting such leave under the CPC.

ORDER :

Sujoy Paul, J.

The petitioner herein filed a summary suit vide O.S.No.131 of 2023 before XXVII Additional Chief Judge, City Civil Court at Seunderabad (for short, Court below) under Order VII Rule 1 read with Section 26 of CPC for recovery of Rs.3,80,48,150/-. The respondents herein filed an application vide I.A.No.2413 of 2023 under Order XXXVII Rule 3(5) read with Section 151 of CPC seeking permission to defend the case unconditionally. After hearing both the parties, by impugned order dated 16.02.2024, the Court below allowed the said application and permitted the defendants to defend themselves unconditionally. Challenging the said order, this petition is filed under Article 227 of the Constitution.

2. The petitioner herein is the plaintiff and the respondents herein are the defendants in the said suit. For the sake of convenience, the parties hereinafter shall be referred to as they are arrayed in the said suit.

Brief Facts:

3. Draped in brevity, the relevant facts are that the plaintiff averred before the Court below that defendant No.2 had friendship with one Mr. Allamsetty Raghunath. Defendant No.2 is Shareholder and Director of defendant No.1, Flycon Block Private Limited. Defendant No.1 approached said Allamsetty Raghunath requesting for advancing loan for his business activity. A promise was made by defendant No.2 to Allamsetty Raghunath that loan amount being advanced by him from time to time would be cleared by defendant No.2 progressively. It is also averred in the plaint that the defendants agreed and assured to repay the hand loan amounts to said Allamsetty Raghunath along with interest @ 36% per annum i.e., 3% per month. The different amounts were paid by Allamsetty Raghunath to the defendants on different dates. In total, Rs.60,63,000/- were paid by Allamsetty Raghunath to the defendants between 25.01.2007 to 13.09.2008.

4. In the plaint, it is further stated that defendant No.2 has executed a demand promissory note on a Rs.100/- stamp paper on 24.04.2011 acknowledging that an amount of Rs.1,05,84,000/- was due to be paid by the defendants to said Allamsetty Raghunath as on that date and they promised to clear the said amount on or before 24.05.2011. In addition, the defendants also issued five cheques drawn on Bank of India, Secunderabad Branch. The description of the said cheques was mentioned in para No.3 of the plaint. If interest is calculated between 13.09.2008 to 24.11.2011, the date when calculation was made, it carries an interest of Rs.1,81,880/-. It is urged that interest @ 3% per month was discussed and agreed being the contractual rate of interest which was required to be paid by the defendants to Allamsetty Raghunath.

5. It is further averred in the plaint that since the defendants allegedly did not honour their undertaking to repay the said amount on or before 24.05.2011, although Allamsetty Raghunath was unhappy, did not insist for payment due to his friendship and acquaintance with the defendants. Allamsetty Raghunath again discussed about modalities of payments with the defendants for which the defendants agreed to execute a demand promissory note dated 25.01.2018 and also agreed to pay the amount of Rs.2,53,16,550/-. The said amount is arrived at between Allamsetty Raghunath and the defendants after calculating the interest @ 3% per month. This amount was also not paid in discharge of promissory note dated 25.01.2018. Another promissory note dated 18.01.2021 was executed for an amount of Rs.3,18,63,230/- by including the interest @ 3% per month. This promissory note was also not translated into reality and hence, yet another promissory note dated 09.01.2023 to repay the amount of Rs.3,62,29,350/- with same rate of interest was executed.

6. It is further averred in the plaint that the defendants failed to pay the amounts covered under the promissory note dated 09.01.2023. By calculating the interest, it is submitted that the defendants are bound to pay interest @ 3% per month on the principa