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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

APPEAL NO. 628 OF 2007

IN

SUMMONS FOR JUDGMENT NO. 127 OF 2007

IN

SUMMARY SUIT NO. 3316 OF 2006

ALONG WITH

NOTICE OF MOTION NO. 3952 OF 2007

M/s. S.P. Brothers, a partnership firm,

)

carrying on business at 133, Narayan Dhru Street, )

Mumbai-400 003

)..Appellants

(Orig.Defendants)

versus

Biren Ramesh Kadakia

)

an adult, Indian Inhabitant, Age

)

having his Mumbai address at 604, Cornelain,

)

104, August Kranti Marg, Mumbai-400 036

)..Respondent

Mr. H. Toor, instructed by M/s. M. Hiralal & Company, for the

appellants.

Ms. Snehal Modi for the respondent.

CORAM: SWATANTER KUMAR, C.J. &

J.P. DEVADHAR

, J.

Judgment reserved on : March 11, 2008

Judgment delivered on: March 27,2008

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JUDGMENT (Per Swatanter Kumar, C.J.):

The plaintiff filed a suit under the provisions of Order 37 of

the Code of Civil Procedure, 1908 (hereinafter “the Code”) against the

defendant praying for a decree of Rs. 8,28,605.95 with future interest

on the principal amount of Rs. 5,00,000/- at the rate of 15 per cent per

annum from the date of institution of the suit till realisation. This

decree was prayed by the plaintiff on the facts that the defendant is a

partnership firm , carrying on the business at Narayan Dhru Street,

Mumbai. The plaintiff being a non-resident Indian filed the suit

through his father and power of attorney holder. According to the

plaintiff, his father and the family of the defendant had good relations.

Shri Sharad P. Kadakia, a partner of the defendant firm approached

the plaintiff and took a loan of Rs. 5,00,000/-. This loan was paid by a

cheque drawn on the Ahmedabad Mercantile Co-operative Bank

Limited. There was an oral agreement between the parties that they

would pay interest at the rate of 18 per cent per annum on the amount

advanced. The defendant actually paid 18 per cent interest upto 31^st

March, 2001 and thereafter at the rate of 15 per cent per annum on

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the total sum of Rs. 5,00,000/-. The defendant also deducted Tax at

Source and issued Form 16-A for such deductions. The interest was

paid upto 26^th September, 2003, whereafter only TDS certificates

were issued, copies of which have been annexed to the plaint at

Exhibits-A, A-1 to A-3. Thereafter, no amount was paid to the plaintiff

as per the agreed terms,despite his repeated requests. The plaintiff

had averred in the plaint that the defendants are liable to pay the

principal sum of Rs. 5,00,000/- and interest at the rate of 15 per cent

per annum from 1^st April, 2002 upto 31^st March, 2003, after reducing

the TDS amount and thereafter 15 per cent interest upto the date of

filing of the suit and even thereafter. The plaintiff, through his

advocate, issued a notice to the defendant on 28^th August, 2006 for

payment of the amount in question which was duly served upon the

defendant. Despite such notice, the defendant has failed to pay the

amount resulting in institution of the present suit. In paragraph 13 of

the plaint, the plaintiff had claimed that the suit had been filed under

the provisions of Order 37, Rule 2 of the Code on the basis of the

debt due to the plaintiff and no relief had been claimed beyond the

ambit of the said rule.

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2.

Upon service of the plaint, appearance was filed by the

defendant. The plaintiff took out Summons for Judgment to which an

application for leave to defend was filed by the defendant supported

by an affidavit. In the affidavit, a preliminary objection was taken that

the suit of the plaintiff is barred by law of limitation. It was stated that

family members of the defendant and the plaintiff are partners of the

firm known as M/s. S.R. N. Engineering Industries and the claim of

the plaintiff was false. Other detailed facts have been given in the

reply denying the liability to pay any amount to the plaintiff. It is

averred that the plai