Dismissed

Ajit Waman Satam and Anr. v. Sai Service Agency (Bombay) Pvt. Ltd.

Bombay HC22 Feb 2016APP/216/2016

Case brief

AI extract

What is this about?

The High Court of Bombay dismissed the appeal against a Single Judge's order granting conditional leave to defend a suit based on dishonoured cheques. The court rejected the submission that unconditional leave was mandatory and ordered an additional four-week extension for depositing the required security.

What did the court decide?

Appeal dismissed; time to deposit amount extended by four weeks.

Ajit Waman Satam and Anr. Vs Sai Service… — Contract and Commercial Disputes | Bombay HC (2016)

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1/6 Sr.No.29/Appl 922 of 2015

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vat

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

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APPEAL (L) No. 922 OF 2015 IN SUMMONS FOR JUDGMENT No.100 OF 2014 IN SUMMARY SUIT No. 581 OF 2014

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Ajit Waman Satam and Anr. ...Appellants Vs.

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Sai Service Agency (Bombay) Pvt. Ltd. ...Respondent

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Mr.Sachin Pawar for Appellants Mr.Sharad Ghadge for Respondent ******

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CORAM : V. M. KANADE & REVATI MOHITE DERE, JJ. DATE : FEBRUARY 22, 2016

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P.C. :

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1. Heard the learned counsel appearing on behalf of the

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Appellants and the learned counsel for the Respondent.

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The Appellants are the Original Defendants and the

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Respondent is the Original Plaintiff (for the sake of convenience hereinafter referred to as “Plaintiff” and

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2/6 Sr.No.29/Appl 922 of 2015

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“Defendant Nos.1 and 2”). The Appellants are aggrieved by an order passed by the Learned Single Judge, granting conditional leave to defend the suit. The Learned Single Judge has directed the Appellants to pay an amount of Rs.3,00,00,000/- in the Court within a period of eight weeks from the date of the order and upon such deposit being made, the Appellants /Defendants were granted leave to defend.

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The learned counsel appearing on behalf of the Appellants has submitted that he had raised rival contention that an unconditional leave ought to have been granted by the Learned Single Judge. He has relied on the judgment of the Apex Court in the case of M/s. Mechelec Engineers & Manufacturers Vs. M/s. Basic Equipment Corporation [(1976) 4 Supreme Court Cases 687] .

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Brief facts which are relevant for the purpose of deciding the appeal are as under:

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The Plaintiff is a company and is an authorized dealer of Bajaj Auto Ltd. and has its showroom and workshop at various

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3/6 Sr.No.29/Appl 922 of 2015

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places in Mumbai. Defendant No.1, who is the brother of Defendant No.2 was employed with the Plaintiff as Sales Manager since 1996. It is the case of the Plaintiff that in the year 2011, it was realized by the Plaintiff that Defendant No.1 has misappropriated a sum of Rs.4,85,87,002/-, which he had collected from the Dealer Sales Associates.

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According to the Plaintiff, Defendant No.1 confessed to the misappropriation and agreed to repay the amount. He also informed the Plaintiff that he had shared a part of the amount with Defendant No.2. An indemnity bond was executed by Defendant No.1 wherein he admitted misappropriation of the said amount by giving details of said misappropriation. Defendant No.2 who is the brother of Defendant No.1, also executed a declaration and in the said document, he agreed to compensate the Plaintiff and issued five cheques drawn on Karnataka Bank Ltd., Nerul, Navi Mumbai. He also offered to transfer the land owned by the Defendants within two months. However, Defendant No.2 failed to transfer the land and as per the undertaking, the cheques were deposited by the Plaintiff,

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4/6 Sr.No.29/Appl 922 of 2015

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which were dishonoured on 20^th March, 2013. The Plaintiff, therefore, filed the present suit on the basis of the cheques which were dishonoured.

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It is submitted by the learned counsel for the Appellants

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that the Appellants had denied issuance of the cheques, misappropriation of the amount and execution of the ideminity bond. It is further submitted that the account on which the cheques were drawn, did not belong to Defendant No.2. It is submitted that, therefore, the cheques were forged and fabricated and did not bear the signature of Defendant No.2. The learned counsel for the Appellants submits that in paragraph 6 of the order, the Learned Single Judge has stated that she compared the signature on the cheques with the signature of Defendant No.2 on the Vakalatnama. It is submitted that however, no notice was given to the Appellants and the Learned Single Judge on her own had made comparison after the judgment was reserved. It is submitted that, therefore, the direction to deposit a sum of Rs.3,00,00,000/- was uncalled for.

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5/6 Sr.No.29/Appl 922 of 2015

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In our view, there is no substance in the submissions made by the learned counsel appearing on behalf of the Appellants. It is well settled position in law that only if the defendant establishes that there are triable issue, he is entitled to file his written statement. In our view, the Learned Single Judge has examined each and every submission made by the learned counsel for the Appellants and has found that it is without any substance. Firstly, Defendant No.2 has issued five cheques and prima facie, the Learned Single Judge after examining the signature of the Defendant No.2 on the Vakalatnama, has come to the conclusion that it is his signature. The Defendant No.2 also has executed one indemnity bond and has also executed a declaration. In spite of having agreed to transfer the land within two months, the Defendants have failed to do so and, therefore, the Plaintiff was constrained to file the suit. The total amount which is given by the Plaintiff is Rs.7,46,57,534/- . The Learned Single Judge has directed the Appellants to pay a sum of Rs.3,00,00,000/-, which is less than 50% of the claim made by

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6/6 Sr.No.29/Appl 922 of 2015

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the Plaintiff. In the case of M/s. Mechelec Engineers (supra.), the Apex Court has observed that only if a triable issue is made out, then in such cases, the Trial Court is duty bound to grant unconditional leave to defend. The ratio of the judgment does not apply to the facts of the present case. Hence, appeal is dismissed. Time to deposit the amount is extended by four weeks.

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REVATI MOHITE DERE, J. V.M. KANADE, J.

Ajit Waman Satam and Anr. v. Sai Service Agency (Bombay) Pvt. Ltd.

Case brief

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What did the court decide?

Ajit Waman Satam and Anr. v. Sai Service Agency (Bombay) Pvt. Ltd.

Case brief

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What did the court decide?

What the court decided

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