JUDGMENT
K.S. Gupta, J.
(1) This appeal by the plaintiffs appellants is against the order dated May 9, 1997 of learned Single Judge dismissing I.A.No.2997/97 filed by it under Order xxxviii Rule 5 and Section 151 CPC.
(2) Appellants have filed suit contending that Harinderjeet Singh Walia is the proprietor of appellants 1 to 3 and is a partner alongwith his mother Smt.Harjit Kaur of appellant No. 4. He is also managing Appellants 5, 6 & 7 firms on behalf or his mother as well as the wife Smt.Sweety Walia. Respondent No. 1 is a company incorporated under the Companies Act having its registered office at 23, Convent Road, Calcutta and Branch office at A-6, Maharani Bagh, New Delhi. It is engaged in the business of management, consultancy, leasing hire purchase financing and other related fields. Respondent No. 2 is the President while respondents 3 & 4 are the directors of respondent No. 1 Respondents 5 & 6 are the banks with whom respondent No. 1 has cash credit facility to the extent of Rs. 40 Lakhs for financing the goods supplied to the customers under hire-purchase agreements. Respondent No. 1 had account Nos. 152 and 136 with respondent No. 5 and respondent No. 6 respectively. It is, inter alia, alleged that one of the terms of cash credit facility granted to respondent No. 1 by respondent No. 5 was that respondent No. 5 would finance 75% of the cost of the goods supplied to the customers under the hire-purchase agreements while the balance 25% was to be financed by respondent No. 1. Similarly, one of the terms of the cash credit facility granted by respondent No. 6 was that 70% would be financed by it and the balance 30% by respondent No. 9.
(3) It is further alleged that respondent No. 1 did not have funds to finance its share of 25%/30%. As such to enter into an agreement with the appellants for advancing 25% or 30% of the cost of the goods supplied to the customers under the hire-purchase agreements and in return respondent No. 1 was to refer the customers to the appellants’ office from where the goods under the hire-purchase agreements were purchased. Amount of 25%/30% advanced by the appellants to respondent No. 1 was to be treated as loan carrying interest 22% per-annum and the amount was repayable as and when respondent No. 1 was to receive the instalments from the hire-purchasers. Aforesaid arrangement was also reiterated by respondent No. 2 on behalf of respondent No. 1 in his letter dated July 7, 1993.
IT is further alleged that all the payments to respondents 5 & 6 respectively of 25% or 30% towards the cost of the goods supplied to the customers under the hire-purchase agreements were made by the appellants by issuing account payee cheques and those payments are also reflected in the audited accounts of the appellants as well as respondent No. 1. It is alleged that hire-purchase agreements entered into with the customers, guarantor’s certificate and the other documents, which were required by respondents 5 & 6 to be executed used to be deposited alongwith the account payee cheques. Only thereafter respondents 5 & 6 used to release their share of 75% or 70%. In this background in the suit following decree has been prayed:-
(1)direct the defendants to render full and complete account of the amounts deposited by the plaintiffs with defendant No. 5 & 6 together with interest 22% p.a. on account of 25% or 30% of the cost of goods supplied to the customers under the hire purchase agreement till the date of realisation.
(2)direct the defendants to pay the amount alongwith the interest 22% per annum till the date of realisation.
(3)pass such an other order as this Hon’ble Court may deed fit under the facts and circumstances of the case.
(4) Alongwith the suit I.A.No.2997/96 was filed. By an interim order dated March 27, 1996, respondents 2, 3 & 4 were restrained by the single Judge from alienating, selling or parting with possession of the two flats in A-6, Maharani Bagh, standing in their names and also the farm house at Anangpur Village, Near Suraj Kund, comprising of six acres of land till further orders.
(5) Contesting respondents 1 to 4 filed written statement and reply to I.A.No.2997/96. It is alleged that Harinderjeet Singh Walia was in the employment of respondent No. 1 and whatever transactions were made on behalf of respondent No. 1 were processed through him. Shri Walia during the course of his employment committed serious offences of misappropriation of funds of respondent No. 1-company by forging valuable documents etc, and consequently proceedings under Section 406/420/468/471 read with Section 120B Indian Penal Code have been commenced by the State against him. It is denied that respondent No. 1 had no funds to finance the alleged margin money of 25% / 30% towards the cost of the goods to be supplied to the customers and for that purpose it had approached the appellants for financial assistance, as alleged. It is further denied that there was any agreement in between the appellants and respondent No. 1 in regard to the advancing of 25% / 30% of the cost of goods intended to be purchased by the customers under the hire-purchase agreements and in return respondent No. 1 was to refer the customers to the appellants’ office, as alleged. It is also denied that margin money of 25% / 30% of the cost of goods was paid by the appellants or that respondent No. 2 wrote any letter dated July 7, 1993 acknowledging the alleged agreement with the appellants. It is stated that the facility enjoyed by respondent No. 1 from respondents 5 & 6 was not subject to the condition of deposit of 25% / 30% of the cost of goods to be supplied to the hire-purchasers. It is asserted that suit for rendition of accounts is not legally maintainable against the contesting respondents.
(6) It is further alleged that out of the total amount of Rs. 87,40,889.00 in the shape of 445 cheques given to Harinderjeet Singh Walia he deposited Rs. 22,88,384.00 towards the margin money and Rs. 37,55,331.00 towards instalments including hire-purchase charges amounting to Rs. 9,16,399.00 . He, thus, defrauded respondent No. 1 to the tune of Rs. 36,13,543.00 which he is liable to reimburse.
(7) By the impugned order I.A.No.2997/96 was dismissed by the Single Judge for want of Jural relationship between the parties and because of the pendency of criminal cases against Harinderjeet Singh Walia and the observations made in criminal proceedings by various courts. Leaving aside observations made as regards criminal proceedings, learned Single Judge remarked:- “LEAVING alone all those things the frame of the suit itself would show the falsity of the claim of the plaintiff. It is divided of any particulars nor does he mention the jural relationship between him and the first defendant which would make it obligatory on the part of the first defendant to render an account to him Prima facie. I am satisfied that the plaintiff has not made out any strong case for injunction. It merely a speculative suit just to protect him from criminal proceedings. I do not find any merit in the application and the same is dismissed.”
(8) We have heard Shri K.T.S.Tulsi, learned Senior Advocate, for the appellants and Shri Rajiv Nayyar for respondents 1 to 4 and have been taken through the record.
(9) One of the pleas taken in the written statement by respondents 1 to 4 on which fate of this appeal also hinges, is as regard the maintainability of the suit in the present form. Paras 9 & 15 of the plaint which are relevant read thus:-
“9.That Shri Harinderjeet Singh Walia, who is managing the business of the plaintiffs, was well known in the business circles for his financial capabilities and therefore, defendant No. 2 as President of defendant No. 1 knowing his goodwill in the market, approached the Plaintiffs for a tie-up arrangement. The said tie-up arrangement comprised of the plaintiffs advancing 25% or 30% of the cost of goods supplied to the customers under the hire purchase agreements and in return defendant No. 1 would refer the clients to plaintiff’s office from where the goods under the hire purchase agreements were purchased. There was a clear understanding between the plaintiffs and defendant No. 1 that the above amount of 25% or 30% as the case may be, advanced by the plaintiffs, would be treated as a loan carrying an interest of 22% per annum to defendant No. 1 and would be repayable as and when defendant No. 1 received the instalments from the hire purchasers.
15.That, all the payments of 25% or 30% of the cost of goods supplied to the customers under the hire purchase agreement were made by suit just to protect him from criminal proceedings. I do not find any merit in the application and the same is dismissed.”
(10) We have heard Shri K.T.S.Tulsi, Learned Senior Advocate for the appellants and Shri Rajiv Nayyar for respondents 1 to 4 and have been taken through the record.
(11) One of the pleas taken in the written statement by respondents 1 to 4 on which fate of this appeal also hinges, is as regard the maintainability of the suit in the present form. Paras 9 & 15 of the plaint which are relevant read thus:-
“9.That Shri harinderjeet Singh Walia, who is managing the business of the plaintiffs, was well known in the business circles for his financial capabilities and therefore, defendant No. 2 as President of defendant No. 1, knowing his goodwill in the market, approached the Plaintiffs for a tie-up arrangement. The said tie-up arrangement comprised of the plaintiffs advancing 25% or 30% of the cost of goods supplied to the customers under the hire purchase agreements and in return defendant No. 1 would refer the clients to plaintiff’s office from where the goods under the hire purchase agreements were purchased. There was a clear understanding between the plaintiffs and defendant No. 1 that the above amount of 25% or 30% as the case may be, advanced by the plaintiffs, would be treated as a loan carrying an interest of 22% per annum to defendant No. 1 and would be repayable as and when defendant No. 1 received the instalments from the hire purchasers.
15.That, all the payments of 25% or 30% of the cost of goods supplied to the customers under the hire purchase agreement were made by the plaintiffs by issuing account payee cheques and the said payments are reflected in the bank statements. The said payments are also reflected in the audited accounts of plaintiffs and defendant No. 1.
(12) On a combined reading of both these paras it is evident that as per the appellants own showing the information which is sought to be elicited by filing the present suit of rendition of accounts could easily with slight effort be gathered both from the account payee cheques alleged to have been issued in favour of respondents 5 & 6 banks towards the alleged margin money of 25% / 30% and the audited books for the relevant period. As the alleged margin money of 25% / 30% was to be treated as loan, as per the appellants, prima facie, suit for rendition of accounts would not lie against contesting respondents 1 to 4. Therefore, without touching the question of the pendency of the criminal cases against Harinderjeet Singh Walia which aspect was considered as one of the grounds for vacating the ex-parte ad-interim injunction order dated March 3, 1996, we feel that when the maintainability of the suit itself is in doubt the appellants cannot be granted the extra ordinary relief or attachment before judgment as claimed in I.A.No.2997/96. There being no legal infirmity on that score in the order of learned Single Judge, we find no force in the appeal which deserves to be dismissed.
(13) For the foregoing discussion, the appeal is dismissed. No order as to costs.