Partly allowed

Jatin Ramesh Diwan v. F.W.Team and 4 Ors.

Bombay HC6 Sept 2023SJ/18/2022

Case brief

AI extract

What is this about?

In a civil suit for recovery based on letters of confirmation, the court decreed the suit against the fiim and passed an ex-parte decree against the legal heirs of a deceased partner who failed to deposit a required security sum within the stipulated time.

What did the court decide?

Ex-parte decree passed against Defendants No. 3 to 5 for the principal amount and additional interest.

Jatin Ramesh Diwan Vs F.W.Team and 4 Ors. — Money Laundering | Bombay HC (2023)

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9-ss-6-2021.doc

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

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 SUMMARY SUIT NO. 6 OF 2021

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WITH
SUMMONS FOR JUDGMENT NO 18 OF 2022
WITH
SUMMONS FOR JUDGMENT NO. 5 OF 2022
IN

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SUMMARY SUIT NO. 6 OF 2021

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Jatin Ramesh Diwan...Plaintiff
Vs.
F.W.Team And Ors....Defendants

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Jatin Ramesh Diwan
Vs.

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Mr. Vishal Kanade (Counsel) a/w. Mr. Monil Punjabi (Counsel) & Mr.
Gobinda C Mohanty (Advocate) i/b, M/s. Mohanty & Associates for
Plaintiff.

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 CORAM : ABHAY AHUJA, J.

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 DATE : 6th SEPTEMBER, 2023

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P.C. :

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1.The Summary Suit had been filed for recovery of an amount
of Rs. 3,56,60,000/- (principal amount) and an amount of Rs,
1,94,97,968/- as interest from 1st April, 2017 up to 21st October, 2021 on
the basis of two letters of confirmation issued by the Defendant No. 1 both
dated 31st March, 2017.

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2.The brief facts are that the Plaintiff through common friends

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and relatives came into contact with one Hetal Hakani (erstwhile partner
of Defendant No. 1 Firm). Hetal Hakani, with a view to expand the

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business of Defendant No. 1 (‘the Firm’) approached the Plaintiff for a
friendly loan. The Plaintiff in good faith and at the request of Hetal Hakani
advanced various amounts to Defendant No. 1 from time to time. The
Defendant repaid certain amounts to the Plaintiff both towards principal
and interest as more particularly set out in the Plaint. Subsequent to
certain advances made by the Plaintiffs to Defendant No. 1, a Loan
Agreement dated 23rd November, 2014 was entered into between the
Plaintiff and Defendant No. 1, inter alia, recording that the Plaintiff would
advance a loan of Rs. 2,50,00,000/- to Defendant No. 1. Under the said
Loan Agreement, Defendant No. 1 created certain securities in favour of
the Plaintiffs. The Plaint sets out the manner in which the amounts were
advanced by the Plaintiff to Defendant No. 1 and also sets out that
Defendant No. 1 had on 31st March, 2016 issued two letters of
confirmation to the Plaintiff issued by Hetal Hakani which confirmed :

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i. that an amount of Rs. 3,06,60,000/-along with interest was due and payable by the Defendant No. 1 to the Plaintiff and that the same would be paid along with interest on or before 31^st December, 2017.

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ii. that an amount of Rs. 50,00,000/- was due and payable by Hetal Hakani to the Plaintiff which amount would be paid along with the interest on or before 31^st December, 2017.

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3.Despite issuance of said letter of confirmation, no amounts
were repaid by Defendant No. 1 to the Plaintiff. Thereafter, in April, 2021
Hetal Hakani passed away. The defendants No.3 to 5 are the legal heirs of
deceased Hetal Hakani. The Plaintiff then learnt that the properties which
were given as security to the Plaintiff under the loan agreement were in
fact mortgaged with the Bank of Baroda without Plaintiff’s knowledge and
consent. These properties were subsequently sold by Bank of Baroda.

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4. The Plaintiff filed the suit against the Defendants.

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5.Mr. Kanade, Learned Counsel appearing on behalf of the
Plaintiff, would submit that the loan advanced by the Plaintiff to
Defendant No. 1 were evidenced by the various cheques/RTGS
transactions more particularly referred to in the Plaint. He relied upon the
copies of the certificates issued by Punjab National Bank (formerly known
as Oriental bank of Commerce), JVPD Branch, Mumbai and HDFC Bank,
Oshiwara Branch, Mumbai, which reflect the details of the amounts
advanced.

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6.Mr. Kanade, has also referred to the first Letter of
Confirmation dated 31st March, 2017 (the first Letter of Confirmation) and

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pointed out therefrom that Hetal Hakani, on behalf of Defendant No. 1
had admitted that an amount of Rs. 3,06,60,000/- was due and payable by
Defendant No. 1 to Plaintiff along with interest at the rate 12% per
annum. He pointed out that by the said Letter of Confirmation Defendant
No. 1 had undertaken to make the repayment of the said sum along with
interest on or before 31st December, 2017 at Mumbai. Mr. Kanade,
submitted that despite this unequivocal admission no monies were repaid
by the Defendant No. 1.

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7.In respect of the second Letter of Confirmation Mr. Kanade
submitted that the same was issued by Hetal Hakani in his personal
capacity and not as a partner of Defendant No. 1 Firm. He, therefore,
submitted that the Plaintiff would confine its claim only on the basis of the
first Letter of Confirmation. He submitted that Defendant Nos.3 to 5 would
being the legal heirs of the deceased Hetal Hakani be liable to the Plaintiff,
for all amounts due and payable by the said Hetal Hakani. That Defendant
Nos. 3 to 5 would be liable to make payment of an amount of Rs.
3,06,60,000/- in terms of the first Letter of Confirmation.

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8.Mr. Kanade, learned Counsel appearing on behalf of the
Plaintiff would submit that pursuant to an order dated 1st February, 2023

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this Court (Coram : Arif S. Doctor J.) has after considering the arguments
on behalf of the Plaintiff as well as Defendants No.3 to 5 on the basis of
the first letter of confirmation issued by the Defendant No.1 dated 31st
March, 2017 had decreed the Suit against Defendant No.2 as though
served, Defendant No.2 did not appear nor filed any affidavit in reply
contesting the Summons for Judgment.

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9.Mr. Kanade, would submit that however after considering the
affidavit in reply filed on behalf of the Defendants No.3 to 5 and the
arguments made on behalf of the said Defendants vide the same order, the
Court had despite holding that the defenses raised by the said Defendants
as highly improbable, in the interests of justice, granted conditional leave
to Defendants No.3 to 5 to defend the suit also since the Defendants No.3
to 5 were the legal heirs of the deceased partner not personally involved in
the transaction.

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10.Learned Counsel would submit that pursuant to the said order
leave to defend the suit was granted to the Defendants No.3 to 5 subject to
deposit of sum of Rs. 25,00,000/- in the Court within a period of eight
weeks from 1st February, 2023. It was also provided in the said order that if
the said deposit was made within the stipulated period, the suit would be

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transferred to the list of commercial causes and the Defendants No.3 to 5
would then file written statement within a period of 30 days from the date
of deposit. However, it was also provided that if the conditional order of
deposit was not complied with within the aforesaid period, the plaintiff
would be entitled to apply for an exparte decree against the said
Defendants No.3 to 5 after obtaining Non Deposit Certificate from the
Prothonotary and Senior Master of this Court.

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11.On 30th August, 2023 when this matter was listed, Mr. Vishal
Kanade, learned Counsel appeared for the Plaintiff and informed this
Court that the Defendants No.3 to 5 had failed to comply with the order of
deposit of Rs. 25,00,000/- and, therefore, the plaintiff would be entitled to
apply for an exparte decree against Defendants No.3 to 5 as the Plaintiff
had already obtained Non Deposit Certificate from the Prothonotary and
Senior Master of this Court. After hearing Mr. Kanade, the following order
was passed by this Court :-

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“1.When the matter is called out Mr.Kanade, learned Counsel
for the Plaintiff, would submit that pursuant to order dated 1st
February 2023, the summons for judgment was made
absolute against Defendants no.1 and 2 and conditional leave
was granted with respect to Defendants no.3 to 5, who are
the heirs of the erstwhile deceased partner of Defendant no.1
– firm, subject to deposit of a sum of Rs.25,00,000/- in the
Court, within a period of eight weeks from 1st February 2023,
and consequent orders were passed in that regard that if the

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order of deposit was not complied with, the Plaintiff would be
entitled to apply for an ex-parte decree against the
Defendants no.3 to 5 after obtaining No Deposit Certificate
from the Prothonotary and Senior Master of this Court.

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2.This order was modified pursuant to order of speaking to
the minutes of 24th April 2023 with respect to Defendants
no.1 and 2 only.

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3.Today, Mr.Kanade submits that although Advocate for
Defendants no.3 to 5 had appeared on 1st February 2023
when the conditional leave was granted, today the said
Defendants are neither present nor represented, nor have the
said Defendants deposited the sum of Rs.25,00,000/- within
the stipulated period, and therefore, decree may be passed
against them. Learned Counsel submits that the originals of
the documents relied upon in the plaint have already been
tendered before this Court on an earlier occasion.

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4.Considering that this matter has been listed without any
particular notice to the Defendants, this Court is of the view
that some time be granted, in case the Defendants no.3 to 5
want to represent their case. Accordingly, list on 6th
September 2023 under the caption ‘For decree’.

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5.Let the Registry produce the originals that were tendered
by the learned Counsel for the Plaintiff on the earlier occasion.

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6.Learned Counsel would submit that the copies of the
originals were attempted to be uploaded on the High Court
website, however, the website has raised an objection. Let the
Registry accept the said documents and the objection be
removed.”

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12.Today the matter has been listed for passing decree against
Defendants No.3 to 5. Mr. Kanade, learned Counsel would submit that

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despite notice of the matter listed today, the Defendants No.3 to 5 have
failed to appear or cause appearance and therefore this is a fit case for

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9-ss-6-2021.doc

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passing of exparte decree against the Defendants No.3 to 5. Learned
Counsel undertakes to file an affidavit of service in this regard within a
period of one week.

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13.Mr. Kanade, has also taken this Court through the originals of
the documents referred to and relied upon in the plaint. In support of the
claim, learned Counsel would submit that since some time has elapsed
from the date of the decree passed against Defendant No.2, there is a
revised particulars of claim containing additional amount of interest for
the subsequent period, which he tenders across the bar and which is taken
on record and marked as “X” for the purposes of identification.

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14.Mr. Kanade, also furnishes a certificate of non-deposit from
the learned Prothonotary and Senior Master of this Court dated 7th June,
2023.

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15.I have heard Mr. Kanade and also considered the submissions
made by the learned Counsel.

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16.On 1st February, 2023 this Court (Coram : Arif S. Doctor J.)
had passed the following order :-

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9-ss-6-2021.doc

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ORDER

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“i. Leave to defend the suit is granted to the Defendant Nos. 3
to 5 subject to deposit of a sum of Rs. 25,00,000/- in the Court
within a period of eight weeks from today.

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ii. If the aforesaid deposit is made within the stipulated
period, this Suit shall be transferred to the list of Commercial
Causes and the Defendant Nos. 3 to 5 shall file written
statement within a period of 30 days from the date of deposit.

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iii. If this conditional order of deposit is not complied with
within the aforesaid period, the Plaintiff shall be entitle to
apply for an ex-parte decree against the Defendant Nos. 3 to 5
after obtaining Non Deposit Certificate from the Prothonotary
and Senior Master of this Court.

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 iv.Summons for judgment stand disposed of accordingly.

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 v. Suit as against Defendant No. 2 stands decreed.”

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17.It would also be pertinent to refer to and quote paragraphs
No.15 to 17 of the order dated 1st February, 2023.

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“15.I have heard learned Counsel and also perused
a copy of the Plaint and the Affidavit in Reply filed by
Defendant Nos. 3 to 5. At the outset I must note that
Defendant Nos. 3 to 5 have not denied or disputed the fact
that they are the legal heirs of the deceased i.e. Hetal Hakani,
partner of Defendant No. 1 Firm. There is also no dispute
Hetal Hakani had in his capacity as partner of Defendant No.
1 Firm issued the first Letter of Confirmation. The Plaintiffs
has placed on record sufficient material to demonstrate that in
fact amounts were advanced by the Plaintiff to Defendant No.
1. The grounds on which the Defendant Nos. 3 to 5 seek to
resist the claim of the Plaintiff (a) Defendant Nos. 3 to 5 were
not aware of and/or were not liable for amounts advanced to
Defendant No. 1 Firm by the Plaintiffs. (b) Defendant Nos. 3
to 5 were not bound by the loan agreement since they were

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neither the Executor, Administrator, Assigns of Defendant
No.1. (c) that no liability would devolved upon Defendant
Nos. 3 to 5 in terms of the Partnership Deed. I find that these
defenses are largely untenable since, Defendant Nos. 3 to 5
are sued in their capacity as legal heirs of Hetal Hakani
(deceased partner of Defendant No. 1) and therefore,
Defendant Nos. 3 to 5 would be liable for any amounts which
the deceased Hetal Hakani would be liable for. In so far as the
contentions that the defendant Nos. 3 to 5 were not liable in
terms of the Partnership Deed of the said Firm. Though this
was canvassed across the bar, no copy of the Partnership
Deed was relied upon. Even if the Partnership Deed contains
such a stipulation, the same would only be available as a
defense against the other partners of the Firm and not a third
party claim.

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16.Even the defense of money lending is one
which is merely pleaded, the same has not been elaborated
nor have any details being placed on record to demonstrate
that the Plaintiffs were in the business of money lending. It is
also settled that the same is largely irrelevant, since the Plaint
is on the basis of Letters of Confirmation which have been
executed by the deceased partner i.e. Hetal Hakani and not on
the Demand Promissory Notes.

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17.Hence, even though I find that the defenses
raised by Defendant Nos. 3 to 5 are highly improbable. I find
that the interest of justice will be met, if the the Defendant
Nos.3 to 5 are granted conditional leave to defend the Suit. I
am inclined to grant this leave, also since, the Defendant Nos.3
to 5 are the legal heirs of the deceased partner, who personally
not involved in the transaction in question. However, in so far
as the Defendant No.2 is concerned, I find that Defendant
No.2 though duly served has chosen not to appear and contest
the Claim. Therefore, a decree must followed against
Defendant No.2. In the circumstances the following order :-”

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18.As noted above, the leave to defend was granted to the
Defendants No.3 to 5 subject to deposit of Rs.25,00,000/- in the Court

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within a period eight weeks and if the said order was not complied with
the Plaintiff was entitled to apply for an exparte decree after obtaining
Non Deposit Certificate from the Prothonotary and Senior Master of this
Court.

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19.A perusal of the Non Deposit Certificate date 7th June, 2023
clearly indicates that the Defendants No.3 to 5 have failed to deposit the
sum of Rs.25,00,000/- in the Court within the prescribed period i.e. on or
before 15th March, 2023 when the period of six weeks granted by this
Court ended. Mr. Kanade, has also taken this Court through the originals of
the documents referred to and relied upon by the Plaintiff in the plaint. I
have also perused the particulars of claim which has been marked as “X” as
above. The particulars of claim contains an additional amount of interest
of Rs.76,07,467/- for the period of October 21, 2021 till July 31, 2023, @
12% on the amount of Rs.3,56,60,000/- which in my view is only fair to
award.

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20.I have seen also the acknowledgment of the communication
on behalf of the Plaintiff to the advocate for Defendants No.3 to 5
containing the acknowledgment of receipt. The Defendants No.3 to 5
though notified that the decree would be passed today have neither

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chosen to remain present nor represented.

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21.In the circumstances, the Plaintiff has become entitled to an
exparte decree against the Defendants No.3 to 5.

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22.The Suit is accordingly decreed against Defendants No.3 to 5
with an additional amount of Rs.76,07,467/- from October 21, 2021 till
July 31, 2023, @12% on the amount of Rs.3,56,60,000/-.

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23.Let the affidavit of service be filed within a period of one

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week.

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 (ABHAY AHUJA, J)

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Jatin Ramesh Diwan v. F.W.Team and 4 Ors.

Case brief

What is this about?

What did the court decide?

Jatin Ramesh Diwan v. F.W.Team and 4 Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

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