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2021 DIGILAW 1101 (MAD)

Raj Yamaha, A registered Partnership Firm, Rep. by its Partners, A. Jagadish v. Rajkumar, Proprietor, Raj Yamaha

2021-03-25

R.PONGIAPPAN

body2021
JUDGMENT : (Prayer: Application filed under Order XIV Rule 12 of Original Side Rules read with Section 151 of C.P.C., to set aside the order passed by the learned Master dated 10.03.2020 made in Application No.8907 of 2019 in C.S.No.491 of 2019.) 1. Aggrieved over the order dated 10.03.2020 in Application No.8907 of 2019, passed by the learned Master, the present application has been preferred before this Court. 2. The defendants 1 and 2 in Civil Suit No.491 of 2019, are the applicants herein. Initially, the respondent / plaintiff in this application has filed this suit against the applicants / defendants in C.S.No.491 of 2019, for a recovery of Rs.4,59,50,225/- together with interest at 24% per annum, on the principal sum of Rs.4,18,00,000/- from the date of plaint to till the date of realisation, alleging that the cheques pertaining to the suit, issued by the applicants/defendants in his favour, was return unpaid. Further, it was alleged on behalf of the respondent/plaintiff that the said cheques issued in his favour, were only to discharge their liability, which had arisen due to the purchase of showroom. 3. The said suit has been filed under Order XIV Rule 1 of Original Side Rules read with Order XXXVII Rule 1 of Civil Procedure Code. After filing the suit, in order to comply with the provisions narrated in the Order XXXVII Rule 1 of Civil Procedure Code, the applicants herein filed an application before the learned Master in A.No.8907 of 2019, seeking the relief to grant leave for defend the suit in C.S.No.491 of 2019. 4. After an elaborate enquiry, the learned Master, by order dated 10.03.2020, allowed the application filed by the applicants, with the condition that the applicants have to furnish security for a sum of Rs.4.50 Crores, on or before 24.03.2020. Aggrieved over the said order, the applicants / defendants, are before this Court with the present application. 5. Heard Mr.K.Bijai Sundar, learned counsel appearing for the applicants / defendants and Mr.K.V.Babu, learned counsel appearing for the respondent / plaintiff. 6. The learned counsel appearing for the applicants / defendants would challenge the impugned order by mentioning the following reasons. (i) The cheque pertains to this case, is not issued in the name of the respondent. 5. Heard Mr.K.Bijai Sundar, learned counsel appearing for the applicants / defendants and Mr.K.V.Babu, learned counsel appearing for the respondent / plaintiff. 6. The learned counsel appearing for the applicants / defendants would challenge the impugned order by mentioning the following reasons. (i) The cheque pertains to this case, is not issued in the name of the respondent. (ii) In the notice dated 13.02.2019 sent by the respondent it was mentioned as the respondent Company is a partnership firm, but actually the respondent Company, is a proprietary concern. (iii) The cheque numbers pertains to this case, are different from the cheque numbers, which have been mentioned in the Sale Agreement entered into between the applicants and the respondent. (iv) The averments found in the plaint in respect to sending of Rs.1.20 Crores, to the applicants/defendants, no documentary proof is enclosed along with plaint. Apart from that, the suit has been filed after suppressing the factum of cancellation of dealership already stands in the name of the respondent. 7. The specific contention raised by the learned counsel appearing for the applicants is that, they have to file a counter claim against the respondent and therefore, it is necessary to grant leave for defending the suit. The learned Master, after considering those aspects, granted leave in favour of the applicants with the conditions. 8. Now, on considering the said submission with relevant records, here, it is a case that in respect to grant of leave, the submissions made by the learned counsel appearing for the applicants had already been accorded by the learned Master, therefore, it is not necessary to find out whether triable issues have arisen or not. In fact, in respect to grant of leave to defend the suit, the applicants, are not aggrieved parties. 9. According to the applicants, the only grievance having by them is, while at the time of allowing the leave to defend application, the learned Master allowed the same, with a condition to furnish security of Rs.4.50 Crores. 10. In this regard, the learned counsel appearing for the respondent / plaintiff made submission before this Court that under Order VII Rule 6 of the Original Side Rules, the learned Master, is having every power to impose a condition and therefore, granting conditional leave, is well within the law prevailed. 11. 10. In this regard, the learned counsel appearing for the respondent / plaintiff made submission before this Court that under Order VII Rule 6 of the Original Side Rules, the learned Master, is having every power to impose a condition and therefore, granting conditional leave, is well within the law prevailed. 11. Further, the learned counsel relied on the judgment of this Court in K.R.KESAVAN vs. THE SOUTH INDIAN BANK LTD. reported in MANU/TN/0102/1950, wherein also, this Court affirmed the contention raised by the learned counsel appearing for the respondent, which reads as follows; defendant contention that unconditional leave should have been granted - no issue raised by defendant in affidavit as to entitle him to unconditional leave to defend - decision of Judge granted leave to defend with condition upheld. 12. On the other hand, the learned counsel appearing for the applicants/defendants would contend that only in the circumstances, if a doubt is left with the trial Judge about the defendant’s good faith, or the genuineness of the triable issues, the trial Judge may impose conditions. In this regard, he relied on the judgment of our Hon’ble Apex Court in IDBI TRUSTEESHIP SERVICES LTD. vs. HUBTOWN LTD. reported in (2017) 1 SCC 568 wherein it has observed as follows; 18. Accordingly, the principles stated in paragraph 8 of Mechelec’s case will now stand superseded, given the amendment of O.XXXVII R.3, and the binding decision of four judges in Milkhiram’s case, as follows: If the defendant satisfies the Court that he has a substantial defence, that is, a defence that is likely to succeed, the plaintiff is not entitled to leave to sign judgment, and the defendant is entitled to unconditional leave to defend the suit; if the defendant raises triable issues indicating that he has a fair or reasonable defence, although not a positively good defence, the plaintiff is not entitled to sign judgment, and the defendant is ordinarily entitled to unconditional leave to defend; even if the defendant raises triable issues, if a doubt is left with the trial judge about the defendant’s good faith, or the genuineness of the triable issues, the trial judge may impose conditions both as to time or mode of trial, as well as payment into court or furnishing security. Care must be taken to see that the object of the provisions to assist expeditious disposal of commercial causes is not defeated. Care must be taken to see that the object of the provisions to assist expeditious disposal of commercial causes is not defeated. Care must also be taken to see that such triable issues are not shut out by unduly severe orders as to deposit or security; if the Defendant raises a defence which is plausible but improbable, the trial Judge may impose conditions as to time or mode of trial, as well as payment into court, or furnishing security. As such a defence does not raise triable issues, conditions as to deposit or security or both can extend to the entire principal sum together with such interest as the court feels the justice of the case requires.” 13. Now, by considering the relevancy of those judgments with the case in our hand, while at the time of granting leave, the learned Master, concluded the same, which reads as follows; It is observed that the defence raised by the applicants/defendants are doubtful and not supported by any documentary evidence. But at the same time, our Hon’ble Apex Court has also held that leave to defend should not be rejected merely due to inherent implausibility of defences putforth or its inconsistency. Considering the above and the facts and circumstances of this case, this Court is of the view that leave to defend can be granted to the applicants/defendants on furnishing security. Accordingly, the applicants/defendants are directed to furnish security for sum of Rs.4.50 crore on or before 24.03.2020. For compliance, call on 09.04.2020. 14. Therefore, in the said circumstances, it is necessary to see whether the defence raised by the learned counsel appearing for the applicants / defendants, are plausible but improbable. 15. In this regard, the first submission made by the learned counsel for the applicants/defendants is that, the cheque pertains to the case has not been issued in favour of the respondent/plaintiff. According to them, the cheque has been issued in favour of one Raj Yamaha. 16. Further, the said ‘Raj Yamaha’ is a Proprietary concern for which the said Rajkumar is the Proprietor. But it was mentioned in the notice dated 13.02.2018, addressed to the respondents as Mr.Rajkumar, who is the Partner in ‘Raj Yamaha’. Therefore, it is necessary to find out whether the cheque has been issued in favour of the Partnership firm or in the name of the Proprietary concern. 17. But it was mentioned in the notice dated 13.02.2018, addressed to the respondents as Mr.Rajkumar, who is the Partner in ‘Raj Yamaha’. Therefore, it is necessary to find out whether the cheque has been issued in favour of the Partnership firm or in the name of the Proprietary concern. 17. Secondly, the cheque numbers narrated in the sale agreement dated 17.08.2018 are entirely different in respect to the cheques now presented by the respondent/plaintiff for collection. Further, from the plaint it was alleged that after entering into the sale agreement, through RTGS, a sum of Rs.1.20 Crores was sent by the respondent/plaintiff, to applicants/defendants. But, for the same, no supporting documents were produced along with the plaint. 18. Further, vide O.S.No.1332 of 2019, the Federal Bank of India has filed a suit before the VI Assistant City Civil Court, Chennai, against the applicant/plaintiff herein for the relief of permanent injunction restraining them, their men, agents, servants or any other person claiming through them from selling the primary security namely the entire stock being vehicles, spare parts and accessories, receivables and all the furniture and fixtures situated at the properties morefully described in the schedule mentioned hereunder including stock in transit. 19. The learned VI Assistant City Civil Judge, Chennai, in the above referred suit on 06.03.2019, granted an order of interim injunction in I.A.No.2 of 2019. In the said circumstances, the plaintiff herein after suppressing the details of filing the case against him, has entered into the sale agreement. 20. The last submission made by the learned counsel appearing for the applicants/defendants is that they are having a counter claim against the respondent/plaintiff and therefore, those factors now narrated above, have created a triable issues, which is not plausible but probable. Therefore, granting a conditional leave is unnecessary and accordingly, the impugned order passed by the learned Master is liable to be modified. 21. In response to the submission made by the learned counsel appearing for the applicants/defendants, the learned counsel appearing for the respondent/plaintiff would contend that the entire suit filed by the respondent/plaintiff is based upon cheques issued by the applicants/defendants. The signature found in the cheques, is not at all disputed and therefore, under Section 139 of the Negotiable Instruments Act, it is presumed that those cheques are issued only for the purpose of discharging the legally enforceable debts. The signature found in the cheques, is not at all disputed and therefore, under Section 139 of the Negotiable Instruments Act, it is presumed that those cheques are issued only for the purpose of discharging the legally enforceable debts. Being the reason that on the date of issuing the notice, a partnership deed was executed between the plaintiff and the defendants, it was mentioned in the notice that the plaintiff is a partner. In otherwise, in respect to the filing of suit by the Federal Bank, is a subsequent event happened after the execution of the sale agreement. Therefore, the question of suppression does not arise. 22. More than that in respect to the suit filed by the Federal Bank, the applicants/defendants herein did not raise any issue before the learned Master. Apart from that, till now, the applicants/defendants are continuing the business as per the agreement entered into with respondent/plaintiff. Thus, all the issues raised by the applicant is nothing but plausible and improbable and thereby granting conditional leave is absolutely found correct and interference of this Court is not necessary in the order passed by the learned Master. 23. The submissions made by the learned counsels appearing on either side are considered. 24. It is an admitted fact that previously, before entering into the sale agreement dated 17.07.2018, the respondent/plaintiff is the authorised dealer for sales and service of Yamaha Bikes in Madras. Further case of the respondent/plaintiff is that when at the time he desired to retire from the business activities as his son is settled at USA, the applicants/defendants Mr.A.Jagadish and Mrs.J.Loga approached him with an intention to takeover the entire business activities and for the purpose of deed of partnership, whereby the said Mr.A.Jagadish and Mrs.J.Loga along with the respondent/plaintiff would constitute a partnership firm, so that the business activities is carried on further without any issues with the manufacturing company. 25. Accordingly, a deed of partnership dated 17.07.2018 was entered into between the respondent/plaintiff Mr.H.Raj Kumar, Mr.A.Jagadish and Mrs.J.Loga, both partners of the defendant partnership firm. Thus, after 17.07.2018 both the defendants are also the partners in the defendant’s company. 26. Secondly, in the sale agreement, it was agreed that the defendants has to settle a sum of Rs.4.25 crores, as a purchase value. Thus, after 17.07.2018 both the defendants are also the partners in the defendant’s company. 26. Secondly, in the sale agreement, it was agreed that the defendants has to settle a sum of Rs.4.25 crores, as a purchase value. So on receipt of the purchase value, it is the duty vested upon the respondent/plaintiff that he has to hand over the entire business activities with five different show rooms with free of encumbrance. 27. It is the case of the applicants/defendants that only in order to pay the purchase value, the petition mentioned eight cheques were issued to the respondent/plaintiff. Further, the said cheques have been issued on various dates in the month of August and October 2018, in fact after two months from the date of sale agreement. Therefore, as per the agreement, if the entire business was handed over in favour of the applicants/defendants, then only the respondent/plaintiff herein is entitled to receive the cheque amounts. 28. But here it is a case within six months from the date of sale agreement, the Federal Bank, filed the suit against the respondent/plaintiff and obtained an order of injunction, restraining the respondent/plaintiff, their men, etc., from selling the entire primary security namely the entire stock being vehicles, spare parts and accessories, receivables and all furniture and fixtures situated in the showroom. 29. More than that, the manufacturing company i.e. ‘YAMAHA’, who authorised the respondent/plaintiff as a dealer, sent the notice dated 27.04.2019 for the termination of dealership. Therefore, being the reasons stated above, the respondent/plaintiff is not in a position to handover the entire business to the applicants/defendants and if so, the respondent/plaintiff is not entitled to receive the cheque amount. Therefore, it is necessary to find out whether the cheque has been issued for discharging the legally enforceable debt and accordingly, though, the signature found in the cheque alleged to be issued by the applicants/defendants, is not disputed, the initial burden is only upon the respondent/plaintiff to show that the cheques pertaining to the suit have been issued only during the business transaction, particularly, towards the purchase of dealership from the respondent/plaintiff. Therefore, the said ground may be a probable issue to find out whether the cheques have been issued for discharging the legally enforceable debt or not. 30. Therefore, the said ground may be a probable issue to find out whether the cheques have been issued for discharging the legally enforceable debt or not. 30. On the other hand, the findings arrived at by the learned Master that the applicants/defendants have not produced relevant records to show their bonafides, is absolutely not correct. Though the defense raised by the applicants/defendants may be plausible in respect to the name and other things, the subsequent event took place in the respondent/plaintiff’s company shows a probable defense and therefore, it cannot be said that the defense raised by the applicants/defendant is plausible but improbable. 31. In view of the above, this Court is of the considered opinion that the applicants/defendants have shown a probable defence and therefore, imposing condition for granting leave, is unnecessary. Accordingly, the application in A.No.640 of 2021, is allowed. In respect to the direction given to the applicants/defendants in A.No.8907 of 2019 vide order dated 10.03.2020, for furnishing security by the learned Master, the same is set aside. On the other hand, unconditional leave is granted to the applicants/defendants to defend the suit and A.No.8907 of 2019, is allowed accordingly. The defendants has to file the written statement within four weeks from today.