2017 (2) TMI 810 - HC - Indian Laws

Court dismisses appeal due to lack of merit and upholds trial court decision on refund obligation

Mukesh Kumar Singh Versus Satish Chnadra Mishra

Mukesh Kumar Singh Versus Satish Chnadra Mishra - TMI Issues Involved:1. Dismissal of leave to defend application.2. Execution and terms of Agreement to Sell.3. Execution and terms of Memorandum of Understanding (MOU).4. Issuance and dishonor of post-dated cheques.5. Legal principles governing leave to defend in summary suits.6. Conviction under Section 138 of the Negotiable Instruments Act.Detailed Analysis:1. Dismissal of Leave to Defend Application:The appellant/defendant challenged the trial court's order dated 01.10.2016, which dismissed his leave to defend application in a suit for recovery of Rs. 1,40,00,000/- filed by the respondent/plaintiff. The trial court held that the appellant did not present any defense to the suit and concocted a false story to avoid payment, thus raising no triable issue.2. Execution and Terms of Agreement to Sell:The respondent/plaintiff claimed that the appellant/defendant approached him to purchase a plot of land for Rs. 1,10,00,000/-. An Agreement to Sell dated 05.11.2010 was executed, recording an initial payment of Rs. 4,00,000/- and subsequent payments totaling Rs. 1,06,50,000/-. The balance of Rs. 3,50,000/- was to be paid at the time of executing the Sale/Conveyance Deed. The appellant/defendant later expressed his inability to sell the land, leading to the cancellation of the Agreement to Sell.3. Execution and Terms of Memorandum of Understanding (MOU):A Memorandum of Understanding (MOU) dated 06.06.2013 was executed after the cancellation of the Agreement to Sell. The MOU acknowledged the receipt of Rs. 1,06,50,000/- by the appellant/defendant and agreed to refund Rs. 1,40,00,000/- to the respondent/plaintiff, including profit and interest. The appellant/defendant committed to paying this amount in three installments but failed to do so.4. Issuance and Dishonor of Post-Dated Cheques:Despite the commitment in the MOU, the appellant/defendant issued four post-dated cheques totaling Rs. 1,40,00,000/-, which were dishonored due to insufficient funds. The respondent/plaintiff issued legal notices and subsequently filed four criminal complaints under Section 138 of the Negotiable Instruments Act.5. Legal Principles Governing Leave to Defend in Summary Suits:The court referenced several judicial precedents, including Santosh Kumar vs. Bhai Mool Singh and M/s Mechalec Engineers & Mfr. vs. M/s Basic Equipment Corporation, to outline the principles for granting or refusing leave to defend. These principles include assessing whether the defense is bona fide, raises triable issues, or is illusory or sham.6. Conviction under Section 138 of the Negotiable Instruments Act:The appellant/defendant was convicted by the learned MM in the criminal complaints filed under Section 138 of the NI Act due to the dishonor of the cheques.Conclusion:The court found no merit in the appellant's defense. The documents, including the Agreement to Sell, MOU, and Letter of Commitment, clearly indicated the appellant's obligation to refund the amount. The appellant's claim of a different agreement regarding the construction and sale of flats was unsupported by any documents. The court upheld the trial court's decision, concluding that the appellant's defense was baseless and did not raise any triable issues. The appeal was dismissed in limine, along with the pending application, for being devoid of merits.