TaxTMI 
TaxTMI 
2018 (9) TMI 998
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....July, 2018 passed in IA No. 21843/2014 in CS(COMM) No. 599/2017. 2. The aforesaid order dismisses the application for leave to defend filed by the appellant, M/s High Ground Enterprises Limited ('appellant-defendant', for short), under Order XXXVII, Rule 3 of the Code. 3. Learned counsel for appellant-defendant submits that the learned single Judge has erroneously observed and held that M/s Rama Krishna Electro Components Private Limited ('respondent-plaintiff' for short) had advanced loan of Rs. 2 crores to the appellant-defendant. Referring to clauses 1, 3, 5, 6 and 9 in the Memorandum of Understanding dated 27th April, 2011 ('MoU' for short) it is submitted that the respondent-plaintiff had made an investmen....
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....gs. 4. The last contention does not bother us and has to be rejected for the simple reason that mere pendency of complaints under Section 138 of the N.I. Act for dishonoured cheques cannot be a ground to grant leave to defend in a suit under Order XXXVII of the Code. The two proceedings are separate proceedings. Proceedings for recovery of money under Order XXXVII of the Code are civil proceedings, whereas proceedings under Section 138 of the N.I. Act are primarily criminal proceedings. 5. For the sake of clarity, we would reproduce the entire MoU itself, which reads as under:- "Whereas both the parties have agreed on the following terms and conditions. 1. Investor will invest total of Rs. 2,00,00,000/- (Rupees Two Crores Only) ....
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....uses of the MoU would reveal that the appellant-defendant had agreed to refund Rs. 2 crores along with 20% share in the profits earned in the movie "Bhindi Baazaar Inc." or with minimum guarantee of 18% per annum on the invested amount, whichever was higher. Thus, there was a clear stipulation that the respondent-plaintiff would be entitled to minimum guaranteed return @ 18% per annum. Clause 3 of the MoU had stated that the appellant-defendant was to refund Rs. 2 crores within four months from the date the first cheque was received. Thus, the date when Rs. 2 crores was to be refunded, with minimum guaranteed interest @ 18% per annum or profit @ 20% if higher, was clearly stipulated. Therefore, the question whether the amount paid was an in....
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....y. Moreover, in the present case, the respondent-defendant had also instituted the suit on the basis of three dishonoured cheques; cheque dated 31st December, 2011 of Rs. 25 lacs, cheque dated 15th January, 2012 of Rs. 25 lacs and cheque dated 1st February, 2012 of Rs. 75 lacs. It is accepted and admitted that these cheques were dishonoured. Suit under Order XXXVII of the Code is maintainable on the basis of dishonoured negotiable instrument in the nature of cheques. 8. Noticeably, the single Judge has passed decree for Rs. 1 crore without interest. The reason being that the respondent-plaintiff had suppressed facts and details of payment of Rs. 1.5 crores in the plaint. Therefore, the amount to be paid by the appellant-defendant in term....