Partly allowed

Vasant Bhagwatiprasad Anil and Anr. v. M/S Bharwani Bros and Co.

Bombay HC18 Mar 2005APP/110/2005

Case brief

AI extract

What is this about?

The High Court modified an impugned order in a Summons Suit regarding a loan recovery. While confirming the first defendant borrower's obligation to deposit an amount, the court granted unconditional leave to the second defendant, finding he was not personally liable as he was neither the borrower nor a guarantor.

What did the court decide?

Unconditional leave granted to Defendant no. 2 to file written statement. Order confirmed for Defendant no. 1 regarding deposit requirement.

Vasant Bhagwatiprasad Anil and Anr. Vs M/S… — Contract and Commercial Disputes | Bombay HC (2005)

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 IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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 ORDINARY ORIGINAL CIVIL JURISDICTION

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 Appeal No.ll0 of 2005
 in
 Summons for Judgment no.979 of 2002
 in
 Sum Suit No. l773 of 2002

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 Vasant Bhagwatiprasad Anil & ors ..Appellants
 vs
 M/s Bharwant Bros & ors...Respondents

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 Dr.V.V.Tulzapurkar i/b M.J.Devani for
 appellants

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 Mr. P.S.Gidwani with Mrs Wadia Bhatia for
 respondents

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CORAM: A.P.SHAH & S.J.VAZIFDAR JJ.

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 Dated l8.3.2005

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 P.C:

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 . Admit. Learned counsel for respondents waive

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 service. By consent, Appeal is called out for
 hearing.

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 2. This Appeal is directed against an order passed

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 by the learned single Judge in a Summary Suit
 granting conditional leave to Defendant nos.l and 2
 on their depositing a sum of Rs l7 lacs. The
 Plaintiffs have filed the present suit for recovery
 of Rs.32.38 lacs with interest on principle amount
 of Rs. l7 lacs at the rate of 24% per annum. The
 case of the Plaintiffs is that they lent and
 advanced to the Defendants l and 2 a sum of Rs. l7

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 lacs under an agreement dated 5.ll.l998 and under a
 subsequent agreement dated l4.7.2004 in para 9 of
 the said agreement the amount which was due and
 liable to the Plaintiffs was confirmed by
 Defendants l and 2. Thus both Defendants had in
 unequivocal terms agreed that they are jointly and
 severally liable to pay to the Plaintiffs.

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 3. As Summons for Judgment taken out by Plaintiffs
 to which affidavit in reply by Defendants l and 2
 was filed. The learned single Judge came to the
 conclusion that Defendants had no real defence to
 the suit and granted leave subject to deposit of
 Rs.l7 lacs.

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 4. The Plaintiffs’ suit is based on two agreements
 dated 5.ll.l998 and l4.7.2004 annexed at Exhibits A
 and B to the plaint. Under agreement dated
 5.ll.l998 it is recorded that the Plaintiffs have
 lent and advanced to Defendant no l a total sum of
 Rs.l7 lacs in the manner mentioned in clause l of
 the agreement. In Clause 2 it is stated that the
 Defendant no.l has agreed to repay without any
 default the loan of Rs. l7 lacs to Plaintiffs on
 or before 30.l2.l998. Clause 3 then recites that
 the loan of Rs.l7 lacs is secured by the flat of

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 Defendant no.l being flat no. l0l,lst floor, Shiv
 Lila, 57, Alibhai Premji Road, Grant Road, (E)
 Mumbai. Clauses 7 & and 8 of the agreement which
 are relevant for our purpose read thus:

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 "7.I further say that until such time the
 said loan amount of Rs.l7,00,000 or any part
 thereof or any costs charges and expenses
 incurred in respect thereof is due,
 outstanding and payable by me or from me to
 the said M/s Bharwani Bros. & Co. I shall
 not sell, transfer or otherwise alienate the
 said premises or let, sub-let or under-let
 the same or part with possession thereof or
 any part thereof or create any mortgage,
 charge or lien in respect of the said
 premises or create any third party right or
 interest therein or otherwise deal with the
 same in any manner whatsoever or howsoever
 so as to in any way prejudicially affect the
 security hereby created therein in favour of
 the said M/s Bharwani Bros. & Co, to ensure
 repayment of the said loan together with
 cost, interest, charges and expenses, as
 aforesaid.

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 8. I further say that I am using the said
 premises for the purpose of my partnership
 firm of M/s Aaksha Impex in addition to my
 sole proprietor concern of M/s Action
 Electronics. However, none of my partners
 in the said firm of M/s Aaksha Impex have
 any right by way of tenancy, sub-tenancy or
 leave and licence or otherwise whatsoever or
 howsoever in the said premises or any part
 thereof. I hereby agree that in the event
 of the said premises being required to be
 sold in enforcement of the above security
 then, in that event, I and my other partners
 in the said firm M/s Aaksha Impex shall
 forthwith quit, vacate and hand over quiet,
 peaceful and vacant possession of the said
 premises to the purchaser/ transferee
 thereof."

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 5. At the foot of the agreement following
 endorsement is made by Defendant no. 2 in his
 capacity as partner of M/s Aaksha Impex, which
 reads as under:

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 "We, the partners of M/s Aaksha Impex, do
 hereby jointly and severally confirm what
 is stated in the foregoing declaration, by
 our partner, Shri Vasant Bhagwati Prasad

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 Anil.

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 For Aaksha Impex
 sd/-

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 Partner"

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 6. The agreement dated 23.6.l999 is on the same
 line save and except the principal amount mentioned
 therein is Rs.l6 lacs . This agreement is also
 confirmed by Defendant no. 2 in his capacity as
 partner of M/s Aaksha Impex.

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 7. On plain reading of relevant clauses of the
 above agreements it is clear that the loan was
 taken by Defendant no.l alone and Defendant no. 2
 has not undertaken any liability to repay the same.
 It appears that the flat which is given as a
 security is in possession of M/s Aaksha Impex in
 which Defendant nos.l and 2 are partners and it is
 agreed by the said firm that in the event of flat
 being required to be sold in enforcement of the
 security in that event partners of M/s Aaksha Impex

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 shall vacate the premises and hand over quiet,
 vacant and peaceful possession of the flat to the
 purchaser/transferee thereof. Therefore it is
 clear that Defendant no.2 is not personally liable
 as he is neither a borrower nor guarantor.
 Consequently Defendant no. 2 would be entitled to
 unconditional leave . In so far as Defendant no.l
 is concerned he is the borrower and he has
 expressly undertaken to pay this amount in terms of
 the two agreements referred to above.

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 8. In the circumstances Appeal is partly allowed.
 Unconditional leave is granted to Defendant no. 2.
 Defendant no.2 to file written statement within 8
 weeks. The order of the learned single Judge
 stands confirmed so far as Defendant no.l is
 concerned. Defendant no.l is granted 4 months time
 to deposit the amount.

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 . In view of the above order no orders on Notice
 of Motion no.52l of 2005.

Vasant Bhagwatiprasad Anil and Anr. v. M/S Bharwani Bros and Co.

Case brief

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What did the court decide?

Vasant Bhagwatiprasad Anil and Anr. v. M/S Bharwani Bros and Co.

Case brief

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What did the court decide?

What the court decided

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