TaxTMI 
TaxTMI 
2017 (11) TMI 1969
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....ation at the appellant's case not being accepted by the interlocutory court. But as the more complex facts pertaining to the matter unfolded, even before the respondents had a say in the matter, it was evident that the action was instituted with sinister motive and oblique purpose. 3. The simple case of the plaintiff-appellant that was initially presented was that the appellant had invested a sum of Rs. 21 crore in a real estate project undertaken by the third defendant (also the third respondent here) through the instrumentalities of the first and second defendant companies (again the first and second respondents, respectively, in this appeal) which were owned and controlled by the third defendant and his men and agents. It is best that some of the key averments in the plaint are noticed at this stage as they form the fulcrum of the plaintiff's claim: "2. In or around January 2014, the defendant Nos. 1 and 2, through the defendant No. 3, their authorized person and Director represented to the plaintiff followings amongst others: a) Defendant No. 2 (previously named as "DLF Hilton Hotels Ltd." and thereafter "DLF Hotels & Hospitality Ltd.") is a long te....
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....into at the plaintiff's registered office at "Jasmine Tower", 31, Shakespeare Sarani, Room No. 611, 6th floor, Kolkata - 700 017, within the jurisdiction aforesaid." 4. The remainder of the story sought to be told to the court by the plaintiff is evident from paragraphs 6 and 7 of the plaint: "6. The defendant No. 1 did not commence the work of construction even by the end of August, 2014 and started pressurizing the plaintiff for termination of the allotment. "7. In or about October, 2014 (by that time also construction had not commenced) negotiations started. The defendant companies through the defendant No. 3 proposed and assured that the defendant Nos. 1 and 2 would refund the received amount of Rs. 21 crores paid by the plaintiff with interest thereon at the rate of 18% per annum till date of repayment as also pre-estimated damage of Rs. 8 crores by way of compensation and the plaintiff would agree upon termination of allotment of 21000 sq.ft. of super built up areas in the service apartment of the said project. The plaintiff being pressurized and assured by the defendants of payments as aforesaid, ultimately agreed to the said proposal." 5. The rep....
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....uld be arranged. It must be noticed that the last two paragraphs in the letter said to be dated February 8, 2017 issued by the third defendant as a director and authorised signatory of the first defendant represented as follows: "We will not intimate our bankers to stop the payment of the Post Dated Cheques given to you. "We will not request you for not presenting the cheques on its due date." 8. The case run in the plaint is that upon the third defendant's request to not immediately present the said cheques, "the plaintiff waited till May 4, 2017 but when even by that date the defendants did not give any further response and the 3 months period of validity was going to expire on or about 15th May, 2017, the plaintiff on May 5, 2017 presented all those cheques ... (which) ... were dishonoured ... on the ground of insufficiency of funds." Thus, a case was made out in the plaint of a certain sum of money being invested in a project and money being promised to be returned within months of the payment being made on the ground of the delay in undertaking the project and the cheques issued by way of repayment being dishonoured upon presentation. 9. For the res....
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....her prayers were for the defendants to furnish security in the sum of Rs. 45 crore and for the right title and interest of the defendants in the Avani Grand project to "be attached before judgment" in default of the security being furnished. To boot, an injunction was also sought to restrain the defendants from dealing with or disposing of or transferring or creating any encumbrance in respect of the property pertaining to the Avani Grand project. 13. Such petition earned the plaintiff an ex parte ad interim order in terms of prayers (c) thereof, that called on the defendants to show cause why they should not be directed to furnish security for Rs. 45 crore. In addition, a special officer was appointed to inspect the premises and report on the status of the Avani Grand project. An injunction was also issued in the following terms: "The respondent shall not create any further encumbrance in respect of premises No. 8, JBS, Haldane Avenue, Kolkata - 700 105 till the returnable date." 14. May 17, 2017 was one of the last working days before this court closed for a fortnight on May 19, 2017 for its annual summer vacation. The plaintiff's interlocutory petition was nex....
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....velopment agreement records that the defendant No. 2 had obtained sanction of a building plan and in terms thereof a hotel is to be constructed at a part of the bypass property and two buildings consisting of service apartments are to be constructed elsewhere in such property. The agreement records that defendant No. 1 would incur all development costs for construction of the service apartments and the profit from the transfer of the service apartments would be shared in the ratio of 60:40 between the defendant No. 1 and the defendant No. 2. The agreement contemplated finance being obtained from Reliance Capital Limited. 19. According to the second defendant, the first defendant was to carry out the construction of the service apartments at the bypass property at its cost and expenditure and, for such purpose, the first defendant was entitled to obtain project finance and loans. In September, 2012 the second defendant created a mortgage in respect of the bypass property by deposit of title deeds to R-Com and a registered deed of mortgage was subsequently executed on October 10, 2012. Several other documents were simultaneously executed by the second defendant and R-Com, includin....
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....endant and R-Com contend that in terms of the documents executed by the defendant Nos. 1 and 2 with R-Com, the first defendant could not have entered into any agreement for sale of any proposed unit at the bypass property without the express permission of R-Com. They claim that the plaintiff was aware of such condition and of the mortgage and the embargo as a result thereof. They assert that the entire action is mischievous and there was no scope for the plaintiff to seek any order against the second defendant or any property of the second defendant or the said bypass property in any manner or form. 24. The second defendant and R-Com question the veracity of the letters relied upon by the plaintiff and suggest that the same have been tailor-made for the purpose of the present proceedings and with the malicious design of causing prejudice the second defendant and R-Com to try and defeat the rights of R-Com pertaining to the bypass property, its pledge in respect of the shares in the second defendant and the money it has pumped into the project. 25. In course of the judgment impugned herein, the interlocutory court was constrained to insinuate that it had been misled into passi....
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....first defendant. The story attempted to be sold by the plaintiff to the court is that after payment of a total amount of Rs. 21 crore between March, 2014 and August 1, 2014, by November 15, 2014 the first defendant agreed to refund the payment at a high rate of interest of 18 per cent per annum and also unilaterally offered to pay Rs. 8 crore by way of compensation. The purported letter of November 15, 2014, doubtless, would not appear in the records of the second defendant though the third defendant as a director of the second defendant purported to sign the same on behalf of the second defendant. The second defendant has squarely disowned such letter and the authority of Daga to issue the same on its behalf. 30. Again, there is no explanation why the refund was not immediately made and why cheques were issued only in February, 2017 and which cheques were presented a few days before the suit was lodged. In fact, there is nothing to dispel the suspicion that the documents relied upon by the plaintiff in support of its claim may have been brought into existence after the plaint was prepared. The only set of relevant documents that may not have emanated from the plaintiff and the ....
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.... that the first defendant started pressurising the plaintiff in August, 2014 for termination of the allotment and, certainly, no factual foundation for the plaintiff's allegation that between the plaintiff completing the payment in beginning August, 2014 and end of August, 2014 "the market of immovable properties in Kolkata, particularly in that area, started soaring and price of apartments went up." It is baffling that there was no written demand from the plaintiff to any of the defendants between November, 2014 and February, 2017 before cheques were allegedly issued for the balance payment to the plaintiff. There is no explanation why the cheques allegedly issued in February, 2017 were sought to be presented for encashment only few days before the instant suit was instituted. After all, the first defendant's letter of February 8, 2017 promised that the first defendant would not intimate its bankers to stop payment of the post-dated cheques or request the plaintiff to not present the cheques. There was no reason for the plaintiff to timidly accept the alleged oral request made on behalf of the defendants to not immediately present the post-dated cheques, despite the writte....
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....ee Properties Private Limited v. Sri Pawan Kumar Budhia) which may be apposite in the present context: "27. Court time is a valuable national resource. It has to be judiciously spent, both by the judge and the lawyer. A system made for the public cannot be permitted to be hijacked to become a lawyer-centric process, where the judge has to silently suffer however much time is taken to flog a dead horse. With increasing number of legal journals churning out judgments and orders - whether or not they lay down any new law or any new angle to an aspect of law - one is spoilt for choice in citing judgments on the peripheries of the legal issue that arises in a matter. It is both for the judge and the lawyer to stem this rot, if only to ensure that the back-breaking numbers of pending cases are tackled. In particular, costs must be used as a deterrent in commercial matters that are needlessly dragged on." 38. The extent of the complicity between the plaintiff or the Bagri in control thereof and third defendant Daga is stark in the plaintiff disowning the order passed by the interlocutory court by which the residual rights of the first defendant in respect of a particular prope....
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.... responsibility to prevent unjust causes being espoused in court cannot be shrugged off at the Bar. The judiciary cannot stand, far less remain upright, if either pillar of the Bench or the Bar falters. 41. Though the ad interim order that the appellant herein obtained on May 17, 2017 was vacated by the order impugned in the appeal, such aspect of the matter deserves a word in passing. An ex parte order is an exception and not the rule. Such is also the statutory command in Order XXXIX Rule 3 of the Code. Merely because there is no caveat is no excuse for an ex parte order to be made. Again, an ex parte order has to be of limited import and fitted to deal with the mischief that it seeks to immediately arrest. The appointment of a receiver or special officer can scarcely be made by way of an ex parte ad interim order on an interlocutory petition of an unsecured creditor. Courts must be alive to the extent of prejudice that such an order may cause to a defendant. Even the best arguable case of the plaintiff in this matter, without the deception that has been subsequently discovered, could not have earned this plaintiff an order so overwhelmingly disproportionate to the limited cla....