Acknowledgment of debt through payment can reset the limitation period, validating the claim despite disputes regarding contractual obligations.

1. This Commercial Division Summary Suit is instituted to recover a sum of Rs. 6,90,00,000/- along with further interest @ 12% p.a. from the date of the suit till payment and/or realization.

2. Shorn of unnecessary details, the plaintiff’s case can be stated as under:-

a] The plaintiff is engaged in the business of real estate development. The defendant and his family members are the absolute owners of Hotel, “Milan International Private Limited” Santacruz(w), Mumbai. (Hotel Milan).

b] In the month of February, 2021 the defendant agreed to sell the said ‘Hotel Milan’ to the plaintiff for a consideration of Rs. 40,51,00,000/-. Towards part consideration, the plaintiff paid a sum of Rs. 1,51,00,000/- to the defendant through cheques during the period 22nd March, 2011 to 24th December, 2011. The defendant, however, reneged from the said promise to sell ‘Hotel Milan’ and instead agreed to refund the said amount along with suitable compensation or transfer his right, title and interest to the extent of 232 sq.mtrs. useable carpet area of the developed property “Fulcrum” (“Alternate Property”) in which the defendant had a share.

c] A Memorandum of Understanding (MOU) dated 21st May, 2014 incorporating the terms and conditions of the agreement between the parties came to be executed. The MOU, inter alia, provided that the defendant would pay a lump sum amount of Rs. 7,80,00,000/- to the plaintiff inclusive of the sum of Rs. 1,51,00,000/- paid by the plaintiff and compensation thereon. In the event of failure of the defendant to pay the said sum on or before 30th May, 2014 the defendant would transfer the aforesaid Alternate Property. If the defendant failed to transfer the said Alternate Property in favour of the plaintiff, the defendant would sell the said Alternate Property to third party/buyer and remit the money due and payable to the plaintiff from out of the sale proceeds on or before 31st May, 2015. If such sale of Alternate Property was effected at a rate higher than Rs.24,000/- per sq.ft, saleable area, and Rs. 38,400/- per sq. ft. carpet area, the amount received over and above the aforesaid rates was to be equally shared by the plaintiff and the defendant.

d] The defendant committed default in compliance with the aforesaid obligations. In the month of June, 2015, the defendant apprised the plaintiff that he would make payment in accordance with the MOU instead of transferring the Alternate Property. On 14th August, 2015, the defendant paid a sum of Rs. 70 lakhs vide cheque bearing No.745127 drawn on DCB Bank, Bandra (w), Mumbai. Thereafter the defendant, despite numerous assurances, again committed default.

3. Thus the plaintiff called upon the defendant to execute the conveyance in accordance with the terms of MOU and forwarded the draft of the agreement for sale. The defendant again assured to make the payment and, after much persuasion, a further sum of Rs. 20 lakhs was paid by the defendant to the plaintiff again by cheque bearing No. 745198 drawn on DCB Bank, Bandra (w). Still a sum of Rs. 6,90,00,000/- remained outstanding under the terms of MOU. Eventually, the plaintiff addressed a legal notice calling upon the defendant to discharge his obligation. The defendant neither complied with the demand in the notice nor gave reply thereto. Hence, this suit for recovery of the sum of Rs. 6,90,00,000/- along with further interest based on the MOU.

4. In response to the service of Writ of Summons, the defendant entered appearance. Thereupon, the plaintiff took out the Summons for Judgment. An affidavit in reply is filed on behalf of the de