2018 (4) TMI 1950

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....s : The Plaintiff claims to have advanced a loan on interest to the Defendants. The loan was advanced in several tranches. It is the case of the Plaintiff that the account between the parties was verified on 14 February 2016 when a sum of Rs.1,86,78,313/was found to be due and payable by the Defendants to the Plaintiff. It is the Plaintiff case that to clear this outstanding, the Defendants issued a cheque for a sum of Rs.1,86,78,313/. The cheque was dishonoured by the drawee bank upon presentation for payment. The dishonour memo contains the remark "exceeds arrangement". The Plaintiff has filed a criminal complaint under Section 138 of the Negotiable Instruments Act before the Metropolitan Magistrate's court at Borivali, Mumbai. Simultane....

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....rther on the cases of Khyati Realtors Pvt. Ltd. vs. Zenal Construction Pvt. Ltd. Company Petition No.243/2012 decided on 29-8-2013, Popular Entertainment Network Ltd. vs. Mehul Kumar SJ 54-2013 in SS 3303-2008 decided on 14-7-2015, Yallava Nagappa Kunchikorve vs. Kantabai Malli 2012(3) Mh.L.J. 856 and Motilal Prabhulalji Vyas vs. Jayantilal Tulsidas Thanawala 2008(6) Bom.C.R. 765, learned Counsel submits that this position is unassailable and no decree can be passed in favour of a money lender even if the Plaintiff's claim is backed by a cheque or a negotiable instrument, which is dishonoured upon presentation for payment. 4 There is no quarrel as such with the propositions of law canvassed by learned Counsel for the Defendants. The real q....

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....Plaintiff, in the event of its admitted dishonour by the drawee bank. 5 Merely because while narrating the facts of the case the grant of loan by the Plaintiff to the Defendants finds a mention, merely as a historical narration, it cannot be said that the suit is for recovery of loan. The moment payment is made by a cheque or another negotiable instrument of a loan, the liability under the loan is substituted by the liability to honour the cheque or the negotiable instrument, as the case may be. In fact, in a sense, the original liability to pay the loan is discharged by means of execution of the negotiable instrument. If this negotiable instrument is not honoured upon presentation for payment, a distinct and new liability arises under the....

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....rial of the suit, this court is of the view that the Defendants may be allowed to defend the suit but on a condition of deposit of the entire principal amount of the dishonoured cheque into this court. 8 In the premises, the following order is passed : (i) Defendant No. 1 is granted leave to defend the suit on and subject to the condition of deposit in this court of a sum of Rs. 1,86,78,313/within a period of eight weeks from today; (ii) The amount, if any, deposited by the Defendants may be invested by the Prothonotary & Senior Master of this court in Fixed Deposit/s of Nationalised Bank/s initially for a period of thirteen months and renewable thereafter from time to time and to abide by further orders that may be passed in the suit ....