This is a suit under order XXXVII, C.P.C. seeking recovery of Rupees 8,00,000/- plust interest deposited with the defendants in connection with franchise agreement dated 09-03-1989. The amount was deposited as a security. The franchise agreement was between the plaintiff and Volga Restaurant for the purposes of enabling the plaintiff to serve South Indian dishes.
2. The franchise agreement could not be given effect to and parties agreed to rescind the agreement for supplying South Indian dishes at Volga Restaurant.
3. Accordingly, parties entered into a rescission agreement which is dated 16-08-1989.
4. In the leave to defend which has been filed by the defendant, it is pleaded that in terms of the rescission agreement between the parties dated 16-08-1989, by virtue of Clause 2 of the same, which was in the following term:—
“Volga Restaurant will make payment of Rs. 5,00,000/-(Rupees five lakhs only) as and when their account is defrozen out of the said amount of Rs. 8,00,000/-.
5. The money was repayable only in that manner and that suit is premature.
6. Clause 3 of the said rescission agreement states that the balance amount of Rupees 3,00,000/- shall carry interest at the bank lending rate at the rate of 12% per annum till the balance amount of Rupees 3,00,000/- is paid.
7. It is clear from the agreement relied upon by the defendant that if the partners of Volga Restaurant had written to the Bank of Maharashtra, bankers to Volga Restaurant, the defendant, asking the bank to freeze the account maintained by Volga Restaurant.
8. This act of partners or some of them, in my view, cannot possibly be a defence to a suit by a Third Party under Order XXXVII, C.P.C., by which liability to pay money, admittedly had been received, is sought to be evaded. The suit as filed is within the four corners of order XXXVII, C.P.C. as the same is based upon a contract.
9. The leave to defend is confined to only this alleged rescission agreement dated 16-08-1989. Once it is received, the money is required to be returned. Admittedly it was received as a security deposit, I find that the defence sought to be raised by the defendants does not raise any triable issue.
10. In the circumstances, I pass a decree for the recovery of the amount claimed in the suit.
11. As the defendant is keen that money be recovered from the account which has been got frozen by the partners, each of whom was equally liable to repay the entirety of the amount, which was to be security deposit under the franchise agreement, the amount should be paid back, in my view, with interest at the rate of 10 per cent per annum; and not only the sum of Rs. 3,00,000/- which is mentioned in the rescission agreement.
12. I, accordingly, pass a decree in the sum of Rs. 8,00,000/- in favour of the plaintiff and against the defendants. The amount will be recoverable with interest at the rate of 10 per cent per annum. The amount shall be recovered from the account of Volga Restaurant in Bank of Maharashtra.
13. Mr. Jain states that there is no other let or hinderence on payment out of the money lying to the credit of Volga Restaurant in the Bank of Maharashtra, apart from the letter which has been written by the partners.
14. In this view of the matter, the decretal amount shall be recovered from the account of Volga Restaurant in Bank of Maharashtra, and the same shall be repaid along with interest at the rate of 10 per cent per annum on the entire amount of Rs. 8,00,000/- which was security deposit.
15. If the amount is not found in the said account or not sufficient to satisfy the decree forthwith, then the balance money shall be realisable from the other assets of the defendant.
16. A decree be prepared accordingly.
Suit decreed.
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