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HIGH COURT OF BOMBAY
N.J. JAMADAR, J
Kavita G. Rajani – Appellant
Versus
Samir N. Bhojwani – Respondent
Commercial Summary Suit No.205 of 2020 | Commercial Summary Suit No.211 of 2020
For the Appellants/Petitioners: Mr. Karl Tamboly, Ms. Shaheda Madraswala, Ms. Zahra Padamsee, Vashi and Vashi
For the Respondents: Mr. Cherag Balsara, Mr. D.U. Deokar, Mr. D. Parikh, Parimal K. Shroff & Co.
Summary suits allow recovery of undisputed principal loan amounts while permitting the defendant conditional leave to contest the interest claims.
Headnote:(A) Code of Civil Procedure, 1908 - Order XXXVII - Summary suit - Recovery of principal amounts of loans advanced against bills of exchange - The plaintiffs instituted summary suits for recovery against the defendant who defaulted on repayment - Legal notices were sent prior to institution of the suits - Defendant raised a defense claiming that transactions constituted a running account and the loans were to be adjusted against an agreement for property purchase which was disputed by plaintiffs - Court found that the principal amounts were indisputable and ruled for recovery of these amounts while allowing the defendant conditional leave to defend the interest component issue. (Paras 31-33)
(B) Defenses in Summary Suits - The absence of pleading a running account in the affidavit of reply undermined the defendant's assertions - Court emphasized that the alleged verbal agreement lacked credibility due to absence of supporting evidence. (Paras 19-30)
Facts of the case:
The plaintiffs claim that the defendant received loans of Rs. 1,11,00,000 and Rs. 1,80,00,000, defaulting on repayments despite interest being paid previously; legal notices were sent leading to the suits in question.
Findings of Court:
The law supports summary recovery of indisputable loan amounts while allowing for defense on interest components.
Issues: The core issues involved the nature of the loan agreements and if sufficient grounds existed to permit the defendant to contest the repayment of interest.
Ratio Decidendi: The court established that claims of a running account lacked the necessary evidentiary support and reaffirmed the conditions under which summary suits could be maintained - allowing the recovery of undisputed principal amounts while leaving the interest claim as a triable issue.
Result: Summons for Judgment partly allowed, decreeing amounts in favor of the plaintiffs.
| Table of Content |
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| 1. plaintiffs advanced loans and issued legal notice before suit. (Para 2 , 4) |
| 2. defendant claims a running account defense. (Para 9 , 10 , 27) |
| 3. court supports recovery of principal while allowing interest contest. (Para 31 , 32) |
1. These Commercial Division Summary Suits are instituted by a mother-son duo against a common defendant. Since identical factual and legal issues arise for consideration in both the suits, the Summons for Judgments and Interim Applications in both the suits are decided by this common order. Suit No. 205 of 2020 :-
2. The material averments in the plaint can be summarized as under:-
The defendant is a developer and builder. In the month of January, 2017 the defendant had approached the plaintiff for a loan of Rs. 62 lakhs. Pursuant to the representation of the defendant, the plaintiff had advanced an amount of Rs. 62 lakhs vide cheque 18th January 2017 drawn on HDFC Bank, Worli Branch against a bill of exchange dated 18th January, 2017 drawn for the said amount by the defendant. Initially the defendant paid interest on the said amount at varied rate ranging from 14.40% p.a. to 12 % p.a. for the varying periods commencing from 18th January, 2017 to 7th May, 2018. Eventually, the defendant repaid a sum of Rs. 60 lakhs and only an amount of Rs. 2 lakhs remained outstanding towards the principal amount.
3. In the month of October, 2017 the defendant had again availed a second tranche of loan of Rs. 4,09,000/- against a bill of exchange. Interest was paid on the second tranche of loan @ 12% p.a.
4. As the defendant failed and neglected to pay the outstanding principal amount of Rs. 2 lakhs of the first tranche of loan and the entire principal amount of Rs. 1,09,00,000/- of the second tranche and interest thereon, the plaintiff addressed legal notice on 13th December, 2019 calling upon the defendant to pay the due amount along with accrued interest thereon. Despite service of the notice, the defendant failed and neglected to pay the outstanding amount. Hence, the suit for recovery of the principal amount of Rs. 1,11,00,000/- along with interest thereon @ 12% p.a. till the date of the suit and future interest at the said rate.
Suit No. 211 of 2020 :-
5. Gautam, who is the son of Kavita (the plaintiff in Suit No. 205 of 2011) claimed to have advanced money to the defendant in three tranches. First, a sum of Rs. 50 lakhs was advanced in the month of November, 2015 against a bill of exchange drawn by the defendant. Second, a sum of Rs. 60 lakhs in the month of February, 2017 again against a bill of exchange dated 9th February, 2017 drawn by the defendant. And the third, a sum of Rs. 70 lakhs in the month of February, 2017 itself against a bill of exchange dated 10th February, 2017 drawn by the defendant. The plaintiff claims that against each of the aforesaid tranches of loan, the defendant paid interest for various periods in the range of 14% p.a. to 12% p.a. Eventually, when the defendant committed default in repayment of the principal amount and interest accrued thereon, the plaintiff claimed to have addressed a legal notice on 13th December, 2019 calling upon the defendant to repay the principal loan amount of all three tranches along with interest accrued thereon @ 12% p.a. The defendant paid no heed despite service of the legal notices. Hence, the suit for recovery of principal loan amount of Rs. 1,80,00,000/- along with interest @ 12% p.a.
6. It would be contextually relevant to note that the suits were decreed by an order dated 15th January, 2021. On 3rd February, 2021 the defendant took out Interim Applications (Interim Application (L) Nos. 3301 of 2021 and 3302 of 2021) seeking setting aside of the decrees. By orders dated 18th February, 2021 the decrees were set aside subject to the defendant depositing of Rs. 1.11 Crore and Rs. 1.80 Crore, respectively, with the Prothonotary and Senior Master of this Court. The defendant has made the said deposit.
7. The plaintiffs have thereupon ta
