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July, 26th 2013

%                                      Date of decision: 1st July, 2013

+                              CS(OS) 2031/2011
       M/S GE CAPITAL SERVICES INDIA            ..... Plaintiff
                    Through: Mr. Gaurav Gaur, Adv.

    JHAMVAR & ORS.                           ..... Defendants
                  Through: Mr. Surender Chauhan, Mr.
                           Sanjeeda Khurana & Mr. Anand
                           Sharma, Advs. for D-1&2.


IA No.3346/2012 (of the defendants No.1&2 for leave to defend)

1.     The plaintiff has instituted this suit under Order 37 of the CPC on the
basis of written Agreement, Personal Guarantees, Corporate Guarantees and
Promissory Note, for recovery of Rs.1,36,48,930/- ,pleading:

       (i)     that the defendant no.1 approached the plaintiff in the year 2007
               for grant of loan for purchase of medical equipment being
               Bausch & Lomb Excimer Laser ­ 217Z;

       (ii)    that the plaintiff examined the said request of the defendant
               no.1 and informed the defendant no.1 of the terms and
               conditions on which loan could be sanctioned;

CS(OS) No.2031/2011                                               Page 1 of 10
       (iii)   that the defendant no.1 informed that the said equipment was to
               be installed at the premises of the defendant no.4 M/s
               Varundavan Hospital & Research Centre Pvt. Ltd. and offered
               personal guarantees of defendant no.2 Mrs. Kiran Mohan
               Jhamvar and defendant no.3 Dr. Digambar Naik for securing
               the said loan; a Corporate Guarantee of the defendant no.4 was
               also offered;

       (iv)    that however since the equipment to be so purchased was of a
               very high depreciation value and the same alone could not
               securitize the loan amount as collateral, the plaintiff asked for
               additional security and which was offered by the defendant no.2
               by way of mortgage of her property bearing No.104, Doctor
               House, Dr. G. Deshmukh Marg, Peddar Road, Mumbai;

       (v)     that the plaintiff agreed to sanction the loan and a Master
               Security and Loan Agreement dated 31.01.2007 was executed
               by the plaintiff and the defendant no.1, and the defendants no.2
               to     4   also   executed   Personal /   Corporate    Guarantees
               guaranteeing to the plaintiff repayment of the loan amount; the
               defendant no.2 as an additional collateral also executed a
               Mortgage Deed dated 26.12.2006 of the property aforesaid in
               favour of the plaintiff to secure the said loan amount;

       (vi)    that under the Agreement aforesaid, the loan amount of
               Rs.1,20,00,000/- with interest due thereon was repayable in 60
               monthly installments of Rs.2,57,000/- commencing from

CS(OS) No.2031/2011                                                Page 2 of 10
               February, 2007 with the last installment of Rs.2,13,594/- falling
               due on 27.01.2012; and,

       (vii) that the defendant no.1 failed to adhere to the agreed payment
               schedule and defaulted and on the date of institution of the suit,
               the sum of Rs.1,36,48,930/- was due from the defendants
               jointly and severally to the plaintiff under the documents

2.     Summons for appearance were issued to the defendants which were
duly served. Only the defendants no.1 and 2 entered appearance and to
whom summons for judgment were issued and who have filed this
application for leave to defend to which reply has been filed by the plaintiff.
No rejoinder has been filed by the defendants no.1 and 2 inspite of
opportunity. The defendants no.3 and 4 having failed to enter appearance,
the suit in so far as against defendants no.3 and 4 was decreed on

3.     The defendants no.1&2 have sought leave to defend on the grounds:

       (i)     that this Court does not have territorial jurisdiction since neither
               the plaintiff nor the defendants are within the jurisdiction of this
               Court and no cause of action also has arisen within the
               jurisdiction of this Court;

        (ii)   that the suit is not triable under Order 37 of the CPC;

       (iii)   that the suit instituted on 12.08.2011 on the basis of documents
               dated 31.01.2007 is barred by limitation;

CS(OS) No.2031/2011                                                 Page 3 of 10
       (iv)   that the plaintiff and its officials in collusion with M/s Bausch
              & Lomb Eye Care (India) Pvt. Ltd. (M/s Bausch & Lomb) have
              hatched a conspiracy and sold an obsolete model of Bausch and
              Lomb Excimer Laser -217Z machine for laser treatment of eyes
              to the defendant no.1, a renowned ophthalmologist practicing in
              Pune, Maharashtra;

       (v)    that the officials of the plaintiff and M/s Bausch & Lomb
              persuaded the defendant no.1 to take the machine financed by
              the plaintiff to start a new laser treatment clinic at Goa; the
              defendant no.1 was assured that the machine would be installed
              directly at the hospital premises of the defendant no. 4 and the
              defendant no.1 believing the representation had signed
              documents having blank columns of loan of Rs.1.20 crores to
              be repaid in 60 equated monthly installments of Rs.2,57,000/-;

       (vi)   that in terms of the Agreement between the parties, M/s Bausch
              & Lomb was to give technical maintenance support but
              miserably failed to provide any such assistance and the machine
              started creating problems within six months from the date of
              installation in the month of January, 2007;

       (vii) that the defendant no.1 informed the plaintiff as well as M/s
              Bausch & Lomb of the machine being an obsolete model and
              the entire exercise of installing the machine and realizing the
              loan being to cheat the defendant no.1 and threatened to lodge
              an FIR of the same;

CS(OS) No.2031/2011                                              Page 4 of 10
       (viii) that at that stage, the officials of the plaintiff and M/s Bausch &
              Lomb offered to buy back the machine at the cost of Rs.60 lacs
              in full and final settlement of the accounts if the defendant no.1
              paid Rs.20,47,563.50p;

       (ix)   that the defendant no.1 agreed to the same and sent a letter
              dated 08.06.2009 to the plaintiff in this regard but the plaintiff
              failed to respond; a copy of the said letter is annexed to the

       (x)    that the defendant no.1 has already filed a criminal complaint
              before the Judicial Magistrate, First Class, Pune and in which
              investigation under Section 156(3) read with Section 202 of the
              Cr.P.C. was ordered and FIR No.898/2011 of Police Station
              Bandgarden, Pune has been registered and the police is
              investigating the matter;

       (xi)   that the suit is bad for non-joinder of M/s Bausch & Lomb;

       (xii) that the plaintiff has already re-possessed the Bausch & Lomb
              Excimer Laser ­ 217Z machine; and,

       (xiii) that the claim of Rs.1,36,48,930/- is exaggerated.

4.     The plaintiff in its reply, besides controverting the aforesaid grounds
has pleaded; (i) that the Agreement between the parties was executed within
the territorial jurisdiction of this Court and the parties had agreed to confine
themselves to the territorial jurisdiction of this court; (ii) that the plaintiff is
located within the territorial jurisdiction of this court and this Court also has
jurisdiction on the principle of debtor must find the creditor; (iii) that the last

CS(OS) No.2031/2011                                                  Page 5 of 10
installment successfully paid by the defendant no.1 was on 26.12.2008 and
the plaintiff after failing in all its attempts to recover its money from
defendant no.1 ultimately terminated the Agreement on 11.05.2011 and
therefore the present suit is within limitation; (iv) that there was no
Agreement between the plaintiff and the defendants for technical
maintenance support of the machine to be given by M/s Bausch & Lomb and
the Agreement if any in this regard must be between the defendants and M/s
Bausch & Lomb; (v) that the plaintiff never offered to buy back the machine
for Rs.60 lacs only and no such letter, as annexed to the application for leave
to defend, was received from the defendant no.1; (vi) that the complaint filed
by the defendant no.1 is false and frivolous; (vii) that the plaintiff has not
repossessed the machine; and, (viii) that the computation of the sum of
Rs.1,36,48,930/- is given in the foreclosure statement supplied to the

5.     The counsels have been heard. The counsel for the defendants no.1
and 2 besides reiterating the grounds hereinabove noted has contended that
opportunity ought to be given to the defendants to prove the Agreement by
the plaintiff to buy back the machine and that the plaintiff cannot seek to
recover the amounts without first repossessing the machine.

6.     The Agreement dated 31.01.2007 between the plaintiff and the
defendant no.1, execution whereof is not denied, nowhere in the recitals
thereof records the defendant no.1 having agreed to buy the machine on
finance from the plaintiff on account of any representation by the plaintiff as
to the quality or performance of the machine; rather the said Agreement
nowhere refers to M/s Bausch & Lomb and only describes the machine

CS(OS) No.2031/2011                                             Page 6 of 10
which is financed thereunder; similarly the same does not require the
plaintiff to, upon default, first attempt to recover the monies due by
repossession or sale of the machine and rather empowers the plaintiff to
immediately recover the monies due without being required to repossess or
sell the machine.      In the face of such Agreement in writing between
educated commercial persons (as discussed in Satyendra Jain Vs. M/s
Omway Buildestate Pvt. Ltd. 199 (2013) DLT 710 and in judgment dated 1st
February, 2013 in CS(OS) No.1480/2009 titled Chemical Systems
Technologies (India) Pvt. Ltd. Vs. Simbhaoli Sugar Mills Ltd.) leave
cannot be granted on grounds urged in contravention thereof.

7.       As far as the objection to the territorial jurisdiction is concerned,
Clause 10(g) of the Agreement admittedly executed by the defendants
records the execution thereof by the authorized representative of the plaintiff
at Delhi; there is no contravention of the said fact in the application for leave
to defend; it thus cannot be said that no part of cause of action has accrued at
Delhi for the agreement of the parties also contained in the Agreement dated
31.01.2007 as to the exclusive jurisdiction of the Courts at Delhi to be of no
avail. Not only so, the address of the plaintiff in the Agreement is of Delhi
only and the plaintiff is correct in relying on the principle of debtor must
seek the creditor for vesting the Courts at Delhi with territorial jurisdiction
over the matter.      Similarly, the defendant no.2 also has addressed the
personal guarantee to the plaintiff at Delhi and thus undertaken to make the
payments thereunder to the plaintiff at Delhi. Thus the grounds urged by
both the defendants of this Court lacking territorial jurisdiction have no

CS(OS) No.2031/2011                                               Page 7 of 10
8.      Mere ordering, by the Court of the Judicial Magistrate at Pune,
Maharashtra, of investigation on the complaint being presented by the
defendant no.1 also does not persuade this Court to grant leave to defend. It
is not as if any findings have been returned by Court in favour of the
defendant no.1.

9.      The ground urged by the defendants no.1 and 2 of the claim being
barred by limitation also has no substance. The date of signing of the
Agreement is of no relevance. The defendants in the application for leave to
defend have expressly admitted the loan of Rs.1.20 crores being repayable in
60 installments commencing from February, 2007 and to run till January,
2012; it is further not disputed that installments were paid till December,
2008.     The suit has been instituted within three years therefrom, on

10.     As far as the plea of Agreement by the plaintiff to re-purchase the
machine for Rs.60 lacs is concerned, again there is no writing from the
plaintiff in this regard. The defendants along with the application for leave
to defend have filed photocopy of a letter dated 08.06.2009 purportedly
written by the defendant no.1 to the plaintiff in this regard. However there is
no proof even of dispatch thereof; the same is not even shown to have been
sent by Registered AD post least under Postal Certificate. Even otherwise, it
does not sound logical that the plaintiff would agree to settle dues of more
than Rs.1 crore on receipt of Rs.20,47,563.50p only. Further the said letter
does not refer to any oral Agreement or settlement but rather refers to a
statement of account on the basis whereof balance of Rs.20,47,563.50p was

CS(OS) No.2031/2011                                             Page 8 of 10
offered. The said statement of account even if any forwarded by the plaintiff
to the defendant has not been enclosed to the application for leave to defend.

11.    As far as the plea of the plaintiff having not given the computation of
the amount of Rs.1,36,48,930/- is concerned, the plaintiff has in the
documents filed along with the plaint and which under Order 37 Rule 3 of
the CPC are dispatched along with the copy of the plaint to the defendants,
has given the said break up and the defendants no.1&2 have nowhere
controverted the same.

12.    I, therefore, find the application for leave to defend not disclosing any
defence, least substantial defence to the claim of the plaintiff in terms of the
written Agreement between the parties. The pleas taken in the application
for leave to defend do not disclose any facts indicating any substantial
defence to the claim. Rather the grounds urged are frivolous and vexatious.

13.    The application for leave to defend is accordingly dismissed.

14.    Axiomatically, the suit has to be decreed. A decree is accordingly
passed in favour of the plaintiff and against the defendants no.1 and 2 jointly
and severally for recovery of Rs.1,36,48,930/-. In the decree dated
23.08.2012 against defendants no.3&4, interest @20% per annum from the
date of filing of the suit till realization was also decreed against the
defendants no.3&4.       I do not see any reason to differ therefrom.
Accordingly, it is directed that the plaintiff shall also be entitled to interest
@20% per annum from the date of filing of the suit till realization from the
defendants no.1 and 2 also.

CS(OS) No.2031/2011                                               Page 9 of 10
15.    The plaintiff shall also be entitled to costs of the suit.

       Decree sheet be prepared.

                                                  RAJIV SAHAI ENDLAW, J
JULY 1, 2013

CS(OS) No.2031/2011                                                 Page 10 of 10
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