Bangalore District Court
Srinivas N vs M/S Cmm Hindustan Gold Pvt Ltd on 13 June, 2025
IN THE COURT OF LXXXIX ADDL.CITY CIVIL &
SESSIONS JUDGE, BENGALURU. (CCH-90)
Present: Sri.K.M.Rajendra Kumar, LLM, M.Phil,
LXXXIX Addl.City Civil &
Sessions Judge, Bengaluru.
DATED THIS THE 13th DAY OF JUNE 2025
Com.O.S.No.1143/2024
PLAINTIFF : Sri Srinivas.N,
S/o Narayanaswamy,
aged about 52 Years,
Residing at No.83/B,
Muneshwaranagara,
Mallathahalli,
Bengaluru-560 056.
(By Sri.K.M.Puttaraju, Advocate)
VS/
DEFENDANTS : 01. M/s.CMM Hindustan Gold Pvt., Ltd.,
(Registered No.U51909KA
2017PTC108276),
Having its registered office,
At No.24, 3rd Floor,
R.K.Terminus, Bellary Main Road,
Bengaluru-560 032,
Rep.by its Managing Director-
Mohamud Sabi.
02. Sri.Mohamud Sabi,
Managing Director of
/2/
Com.O.S.No.1143/2024
M/s.CMM Hindustan Gold Pvt., Ltd.,
No.24, 3rd Floor,
R.K.Terminus, Bellary Main Road,
Bengaluru-560 032.
(Exparte)
Date of Institution of suit : 24.08.2024
Nature of suit : Money Suit
(suit on pronote, suit for
declaration and
possession suit for
injunction, etc.,)
Date of commencement : 19.02.2025
of recording of evidence
Date of judgment : 13.06.2025
Total duration : Year/s Month/s Day/s
00 09 19
(K.M.RAJENDRA KUMAR)
LXXXIX ADDL.CITY CIVIL &
SESSIONS JUDGE,
BENGALURU. (CCH-90)
JUDGMENT
The plaintiff has filed this suit against the defendants praying the Court to pass a judgment and decree directing the defendants to repay the refundable security deposit amount of ₹.6,50,000/- and monthly profit amount for a sum of ₹.6,20,000/- totally to a sum of ₹.12,70,000/- to the plaintiff together with interest at 24% p.a. from date of /3/ Com.O.S.No.1143/2024 suit till the date of realization and for other reliefs in the interest of justice and equity.
The brief facts of the plaintiff's case are as under:
02. That, the 2nd defendant is a Managing Director of the 1st defendant company viz., M/s.CMM Hindustan Gold Pvt., Ltd., Company running the business of buying the gold from the customers and selling the same for prospective purchasers and also promoting its business under its trade name and trade mark by setting up chain or master franchisees in all over the country of India.
03. That, the plaintiff after came to know about the business of defendants, he has approached the 2nd defendant to set up one of such retail outlet in the city of Bengaluru, in the circumstances, the 2 nd defendant has accepted the offer of the plaintiff and informed him that to invest necessary capital and also to possess suitable premises to set up and carry on the Master Franchises.
04. That, as per the instructions of the 2nd defendant the plaintiff has established shop premises for running the master franchisees business on 01.07.2019, at No.847/83, Srikanteshwara Complex, Mysore Road, Kengeri, /4/ Com.O.S.No.1143/2024 Bengaluru-560 060 for running Master Franchises business in the name and style of Hindustan Gold Pvt., Ltd., Company and same was running till today. That, as agreed by the plaintiff has paid a sum of ₹.18,50,000/- by way of cheque in favor of the company as refundable security deposit amount. Thereafter, in terms of the said Memorandum of Understanding on behalf of the Company, the 2nd defendant has appointed employees in the said Master Franchises Branch at Kengeri and from July 2019 to till November 2021 the business was running smoothly without any problems and as agreed by the 2 nd defendant himself has paid salary to the employee of the said branch.
05. That, as per the terms and conditions of the said Memorandum of Understanding both parties have shared the branch expenses from the profit earned by the said Master Franchisee branch and also in terms the said Memorandum of Understanding, the 2nd defendant has to pay commission to the plaintiff @ ₹.25/- per gram out of the profit or if RTGS is more than ₹.40,00,000/- to ₹.50,00,000/- then 15% of the said profit. That, as agreed by the 2nd defendant as per the profit earned by the said Master Franchises, Kengeri Branch, Bengaluru has /5/ Com.O.S.No.1143/2024 regularly paid profit amount to the plaintiff till November 2021.
06. That, from December 2021 till today the 2 nd defendant has not paid any profit amount to the plaintiff, in the circumstances, several time the plaintiff has approached the 2nd defendant and demanded to pay the profit amount from December 2021, but the 2 nd defendant on one or other reasons has postponed for payment of profit amount to the plaintiff. That, even though the Master Franchises, has running the business in profit manner, the 2nd defendant has not paid till today. That, from December 2021 till today the 2nd defendant has to pay approximately monthly profit amount of ₹.20,000/- each month, totally for a sum of ₹.6,20,000/- to the plaintiff.
07. That, in terms of the said Memorandum of Understanding, the 2nd defendant out of the refundable security deposit amount of ₹.18,50,000/- he has paid a sum of ₹.12,00,000/- to the plaintiff, through receipt issued as monthly installments till November 2021. Even though the plaintiff requested and demanded several times to refund the remaining balance refundable security deposit /6/ Com.O.S.No.1143/2024 amount, the 2nd defendant has not paid the remaining amount of ₹.6,50,000/- till today.
08. That, the plaintiff having shown sufficient indulgence in the matter and when the 2 nd defendant refused to pay the profit amount as well as refundable security deposit amount, got issued a legal demand notice on 18.06.2024 to the defendants through registered post calling upon the defendants to refund the balance refundable security amount of ₹.6,50,000/- and also to pay the monthly profit amount earned by the Master Franchises till today approximately monthly profit of ₹.20,000/- totally a sum of ₹.6,20,000/- but the said notice returned unserved with an endorsement 'not claimed'.
09. That, after issuance of notice, the plaintiff initiated proceedings before the DLSA in PIM 1621/2024 against the defendants. Upon service of summons the defendants have not appeared before the DLSA and the DLSA has issued Non-Starter Report.
10. The defendants are liable to pay the outstanding amount of ₹.6,50,000/- towards security deposit amount /7/ Com.O.S.No.1143/2024 and ₹.6,20,000/- towards monthly profit totaling to ₹.12,70,000/- with interest. By contending so the plaintiff prays to decree the suit.
11. In spite of service of summons the defendants remained absent and were placed exparte.
12. To substantiate the case of the plaintiff, Sri.Srinivas.N., the plaintiff has been examined as PW.1 and got marked the documents as per Ex.P1 to Ex P.7 and closed his side evidence.
13. I have heard the arguments addressed by the learned Advocate for the plaintiff.
14. Now the points that arise for my consideration are as under:
(1). Whether the Plaintiff proves that the defendants are liable to pay a refundable security deposit amount of ₹.6,50,000/- and monthly profit amount of ₹.6,20,000/-
totally sum of ₹.12,70,000/-, together with interest at 24% p.a., from date of suit till the date of realization?
(2) What Order/decree?
/8/ Com.O.S.No.1143/2024
15. My findings on the above points are as follows:-
Point No. 1 : - In the NEGATIVE
Point No. 2 : - As per final orders
for the following
REASONS
16. Point No.2: It is pertinent here to mention that as I have already narrated the facts of the case in detail at the inception, I will not repeat the facts once again at length, but I will confine myself to the material facts.
17. It is the specific case of the plaintiff that the 2nd defendant is a Managing Director of the 1 st defendant company viz., M/s.CMM Hindustan Gold Pvt., Ltd., Company running the business of buying the gold from the customers and selling the same for prospective purchasers and also promoting its business under its trade name and trade mark by setting up chain or master franchisees in all over the country of India.
18. That, the plaintiff after came to know about the business of defendants, he has approached the 2nd defendant to set up one of such retail outlet in the city of Bengaluru, in the circumstances, the 2 nd defendant has /9/ Com.O.S.No.1143/2024 accepted the offer of the plaintiff and informed him that to invest necessary capital and also to possess suitable premises to set up and carry on the Master Franchises.
19. That, as per the instructions of the 2nd defendant the plaintiff has established shop premises for running the master franchisees business on 01.07.2019 at Kengeri, Bengaluru for running Master Franchises business in the name and style of Hindustan Gold Pvt., Ltd., Company and same was running till today. That, as agreed by the plaintiff has paid a sum of ₹.18,50,000/- by way of cheque in favor of the company as refundable security deposit amount.
20. That, as per the terms and conditions of the Memorandum of Understanding dated 21.11.2019 both parties have shared the branch expenses from the profit earned by the said Master Franchisee branch and also in terms the said Memorandum of Understanding, the 2 nd defendant has to pay commission to the plaintiff @ ₹.25/- per gram out of the profit or if RTGS is more than ₹.40,00,000/- to ₹.50,00,000/- then 15% of the said profit.
21. That, from December 2021 till today the 2 nd defendant has not paid any profit amount to the plaintiff, in /10/ Com.O.S.No.1143/2024 the circumstances, several time the plaintiff has approached the 2nd defendant and demanded to pay the profit amount from December 2021, but the 2 nd defendant on one or other reasons has postponed for payment of profit amount to the plaintiff.
22. That, from December 2021 till today the 2 nd defendant has to pay approximately monthly profit amount for a sum of ₹.20,000/- each month, totally for a sum of ₹.6,20,000/- to the plaintiff.
23. That, in terms of the said Memorandum of Understanding, the 2nd defendant out of the refundable security deposit amount of ₹.18,50,000/- he has paid a sum of ₹.12,00,000/- to the plaintiff, through receipt issued as monthly installments till November 2021. Even though the plaintiff requested and demanded several times to refund the remaining balance refundable security deposit amount, the 2nd defendant has not paid remaining amount of ₹.6,50,000/- till today.
24. The defendants are liable to pay the outstanding amount of ₹.6,50,000/- towards security deposit amount and ₹.6,20,000/- towards monthly profit totaling to /11/ Com.O.S.No.1143/2024 ₹.12,70,000/- with interest. All the efforts made by the plaintiffs did not yield any result. Hence, the plaintiffs were constrained to file the present suit.
25. In order to support the case of the plaintiff, the plaintiff himself has filed affidavit in lieu of his examination in chief as PW.1 reiterating almost all the contents of plaint averments. Apart from PW.1 produced Original MOU dated 21.11.2019 and marked at Ex.P.1. The Ex.P.2 is the Account ledger extract wherein on 04.05.2019 the present plaintiff has paid ₹.18,50,059/- to the defendant No.2 by way of RTGS as security deposit amount. Admittedly, the said account ledger extract is only for a period from 03.03.2019 to 31.12.2019. As per the case of the plaintiff the defendant No.2 has repaid the part payment of ₹.12,00,000/- by cheque to the plaintiff towards security deposit amount. However, the account ledger extract is not forthcoming regarding the said amount received by the plaintiff. Had the plaintiff has furnished the his full accounts statement upto the date of the filing of the suit it would be helpful to this court to look into the document and to come to the conclusion that the defendant No.2 has paid only ₹.12,00,000/- towards refundable security deposit amount. The non-production of complete account /12/ Com.O.S.No.1143/2024 statement is fatal to the case of the plaintiff. The plaintiff has not produced sufficient documentary proof to show that the defendant has paid only part payment towards security deposit amount.
26. The Ex.P.3 is the Office copy of legal notice dated 18.06.2024 wherein it appears the defendants were called upon to refund the balance refundable security amount of ₹.6,50,000/- and also to pay the monthly profit amount earned by the Master Franchises to till today approximately monthly profit of ₹.20,000/- per month totally a sum of ₹.6,20,000/- but the said notice returned unserved with an endorsement 'not claimed'.
27. The Ex.P.4 is the 2 postal receipts. The Ex.P.5, Ex.P.5(a), Ex.P.6 and Ex.P.6(a) are the 2 notices and postal covers.
28. The Ex.P.7 is the Certified copy of PIM report wherein it appears even though the DLSA issued notice to the defendants, the defendants have not appeared before DLSA. Hence, the DLSA has issued Non-Starter Report on 15.06.2024.
/13/ Com.O.S.No.1143/2024
29. In this admittedly, the defendants are placed exparte. The absence of defendants itself will not strengthen or fortify the case of the plaintiff. It is well settled law that the initial burden of proof to prove his case is upon the plaintiff himself. As per the case of the plaintiff, the defendants have paid ₹.12,00,000/- towards security deposit amount, atleast in order to prove the said statement he should have furnished the complete account ledger extract. If the plaintiff had furnished the complete ledger extract, it would be helpful to this Court to know whether the defendants have paid only ₹.12,00,00/- or entire ₹.18,50,000/- towards security deposit amount.
30. The incomplete Ex.P.2/account ledger account reveals that the present plaintiff has received amounts from the defendants No.2 as a part of profit in the business. Admittedly, the account statement in incomplete. Therefore, I am of the opinion that the plaintiff should have furnished the complete account ledger extract in order to come to the conclusion that the defendants are still liable to pay ₹.6,20,000/- as a profit to the plaintiff. Had the plaintiff has furnished account statement up to the filing of the date of the suit it would assist the Court to decide whether the /14/ Com.O.S.No.1143/2024 defendants are still liable to pay ₹.6,50,000/- towards security deposit amount and ₹.6,20,000/- towards profit to the plaintiff.
31. Admittedly, the Ex.P.1/Memorandum of Understanding dated 21.11.2019 contains a dispute resolution mode through which both the parties need to approach before a Sole Arbitrator in order to resolve their dispute. The non-compliance of said Arbitration Clause by the plaintiff also disentitle him to claim any relief before this Court.
32. In my opinion the plaintiff has failed to prove that the defendants are liable to pay a refundable security deposit amount of ₹.6,50,000/- and monthly profit amount of ₹.6,20,000/- totally sum of ₹.12,70,000/-, together with interest at 24% p.a., from date of suit till the date of realization. Accordingly, I answer Point No.1 in the AFFIRMATIVE.
/15/ Com.O.S.No.1143/2024
33. Point No.2: In view of the discussions on point No.2, I proceed to pass the following:
ORDER In view of the Arbitration Clause in Memorandum of Understanding dated 21.11.2019 the suit filed by plaintiff is hereby dismissed.
No order as to cost.
The office is hereby directed to send a copy of the judgment to the plaintiff through e- mail as per Order XX Rule 1 CPC as amended by Section 16 of Commercial Courts Act, 2015. (Dictated to the Stenographer directly on computer, corrected and then pronounced by me in the open court on this the 13th day of June 2025).
(K.M.RAJENDRA KUMAR) LXXXIX ADDL.CITY CIVIL & SESSIONS JUDGE, BENGALURU. (CCH-90) /16/ Com.O.S.No.1143/2024 ANNEXURES List of witnesses examined for the plaintiff:
P.W.1 Sri.Srinivas.N List of documents exhibited on behalf of the plaintiff:
Sl.No. Particulars of documents Ex.P.
1. Original MOU dated 21.11.2019 Ex.P.1 (Page No.12-16)
2. Account ledger extract (Page No.17-22) Ex.P.2
3. Office copy of legal notice dated Ex.P.3 18.06.2024 (Page No.45-47)
4. 2 postal receipts (Page No.48) Ex.P.4
5. 2 postal covers (opened in the Court) Ex.P.5, Notice, cover 5(a) & Ex.P.6, 6(a)
6. Certified copy of PIM report Ex.P.7 List of witnesses examined for the defendant/s:
NIL List of documents marked for the defendant/s:
NIL (K.M.RAJENDRA KUMAR) LXXXIX ADDL.CITY CIVIL & SESSIONS JUDGE, BENGALURU. (CCH-90) ****