2018 (1) TMI 1699 - HC - Indian Laws

Dishonor of Cheque second time - insufficiency of funds - Seeking recovery alongwith pendente lite and future interest till the date of full realisation of the entire amount - HELD THAT - Admittedly, the cheques issued under the Compromise Deed/Settlement Agreement dated 23rd December, 2016 have once again been dishonoured by the bank on the ground of funds insufficient - Though the learned counsel for defendants has tried to argue various issues like jurisdiction and the plaintiff being a money lender, yet this court is of the view that such pleas cannot be entertained as no leave to defend has been placed on record till date. In view of the Compromise Deed/Settlement Agreement which provides the consequence for default of repayment, this court is of the view that the suit has to be decreed in accordance with the prayer clause and the default clause in the Compromise Deed/Settlement Agreement - the present suit is decreed against the defendants jointly and severally for a sum of Rs.4,38,00617/- along with interest @24% per annum from 01st February, 2016 (date of filing of suit) along with pendente lite and future interest till the date of actual payment of the full amount after deducting payment of Rs.25 lacs paid by the defendants to the plaintiff on 06th January, 2018. Since the defendants have not honoured their commitment despite Compromise Agreements being executed before various judicial forums, this Court is of the view that the defendants need to be saddled with exemplary costs of Rs.5 lacs, which should be paid to the plaintiff - Application disposed off.

Summary

Issues Involved:
Recovery of loan amount under Order XXXVII CPC, dishonoured cheques, settlement agreements, default in repayment, jurisdiction, money lending, leave to defend application, decree and costs.

Analysis:

1. Recovery of Loan Amount under Order XXXVII CPC:
The plaintiff filed a summary suit under Order XXXVII of the Code of Civil Procedure, 1908, seeking recovery of Rs.4,38,00,617/- along with interest. The suit was based on a Loan Agreement where defendants borrowed Rs.2,50,00,000/- and subsequently failed to repay the amount as per the terms of the agreement. The plaintiff sought recovery through legal proceedings due to non-payment.

2. Dishonoured Cheques and Settlement Agreements:
The defendants issued cheques for repayment, but they were dishonoured by the bank due to insufficient funds. Despite entering into various settlement agreements and compromise deeds with the plaintiff, including offering to pay a certain amount and issuing post-dated cheques, the defendants failed to honor their commitments, leading to repeated dishonor of cheques.

3. Default in Repayment and Decree:
The court noted that the defendants did not pay any amount as agreed upon in the settlement agreements. Due to the default in repayment and dishonor of cheques, the court decreed the suit against the defendants jointly and severally for the total amount sought by the plaintiff, along with interest and costs. The court emphasized enforcing the terms of the settlement agreements and the consequences of default in repayment as per the agreements.

4. Jurisdiction and Money Lending:
The defendants raised issues regarding jurisdiction and the plaintiff's status as a money lender. However, the court held that such pleas could not be entertained as no leave to defend had been filed by the defendants. The court focused on the terms of the settlement agreements and the legal consequences of default, rather than entertaining jurisdictional or money lending arguments.

5. Decree and Costs:
In the final judgment, the court decreed the suit in favor of the plaintiff for the total amount claimed, along with interest. Additionally, due to the defendants' repeated failure to honor their commitments despite executing multiple settlement agreements, the court imposed exemplary costs of Rs.5 lacs on the defendants, to be paid to the plaintiff. The court directed the registry to prepare a decree sheet reflecting the judgment.

This detailed analysis of the judgment highlights the legal proceedings, settlement agreements, default in repayment, and the court's decision to decree the suit and impose costs on the defendants for their failure to honor their commitments.