TaxTMI 
TaxTMI 
2024 (8) TMI 22
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....he construction thereafter and therefore, sought for refund of the advance from the first defendant. The first defendant had also not commenced the construction work on receipt of the advance amount of Rs.1,50,00,000/- from the plaintiff. The cheque issued by the first defendant towards refund of the advance amount to the plaintiff was also returned dishonoured for 'insufficiency of funds', which resulted in the plaintiff filing the suit as well as filing parallel proceedings before the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016. The National Company Law Tribunal had dismissed the application of the plaintiff and aggrieved by the same, the plaintiff had preferred an appeal before the National Company Law Appellate Tribunal. The National Company Law Appellate Tribunal, after setting aside the order of the National Company Law Tribunal, remanded the matter back to the National Company Law Tribunal for fresh consideration. The above stated facts are un-disputed facts. 3. However, before the National Company Law Tribunal (NCLT), subsequent to the order of remand passed by the National Company Law Appellate Tribunal, the plaintiff and the first....
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....ed 14.09.2019 entered into between the plaintiff and the first defendant, which was recorded by the National Company Law Tribunal, there is no probable defence available to the defendants to defend the suit claim. Being an admitted liability, the plaintiff claims that the instant application seeking for summary judgment is maintainable. The plaintiff has claimed that as on 13.07.2023, a sum of Rs.1,10,24,520.54 is due and payable by the defendants jointly and severally and the details are set out hereunder: - Principal - Rs.70,00,000/- - Rate of interest - 15% p.a. - Number of days - 1399 days (14.092019 - 13.07.2023) - Total interest as on 13.07.2023 - Rs.40,24,520.54 - Total amount due as on 13.07.2023 - Rs.1,10,24,520.54 7. On the other hand, it is the contention of the defendants that the application for summary judgment is not maintainable for the following reasons: a)There was a duty cast on the plaintiff to withdraw the suit C.S. No.46 of 2018 under the Memorandum of Compromise dated 14.09.2019. Instead of withdrawing the present suit as per the Memorandum of Compromise, the plaintiff has chosen to continue prosecuting the suit and has also chosen to file t....
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....y parties to the suit. They had earlier taken out an application under Order I Rule 10 of C.P.C. seeking for deletion of their names from the array of parties defendants in A.No.3274 of 2021 and by order dated 17.02.2022, this Court dismissed the said application and while dismissing the said application, this Court has held that burden lies on the plaintiff to prove her allegations against the defendants 2 and 3 at the time of trial. Therefore, without going for trial, the plaintiff cannot file this application seeking for summary judgment against all the defendants jointly and severally. i)There is absolutely no basis for the plaintiff to claim interest at the rate of 15% per annum. A separate Memorandum of Compromise dated 14.09.2019 was entered into between the plaintiff and the first defendant with regard to the payment of the interest component, which was crystallised under the Memorandum of Compromise at Rs.45,00,000/-. j)The first defendant has already paid the plaintiff the interest amount of Rs.45,00,000/- and therefore, the question of once again paying interest at the rate of 15% to the plaintiff will not arise, which can be demonstrated by the defendants only dur....
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....ither the Memorandum of Compromise nor the default of payment of Rs.70,00,000/- is mentioned 24.07.2023 Plaintiff files an application for amendment of plaint and for taking on record additional documents (A.Nos.3800 and 3801 of 2023) c)While the defendants have not even mentioned how the filing of the aforesaid applications have been made belatedly, even if the earliest date viz., 14.09.2019 is taken into account, the application has been filed on time since the entire period from 15.03.2020 till 28.02.2022 stands excluded in view of the order of Suo Motu extension of limitation dated 10.01.2022 passed by the Hon'ble Supreme Court. Therefore, the application has been filed within 23 months/694 days (after excluding time period between 15.03.2020-28.02.2022) which is well within 36 months/3 years contemplated under the Limitation Act. d)The defendants have erroneously pressed into service Section 5(iii) in the Suo Motu extension Order of the Hon'ble Supreme Court. However, the said direction comes to the aid of the plaintiff in as much as it clearly states that in cases where the limitation would have expired during the period between 15.03.2020 till 28.02.2020, no....
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....ise and therefore, the contention of the defendants in their counter has to be rejected. l)The initiation of proceedings under the Insolvency and Bankruptcy Code, 2016 is an independent proceeding. The proceedings under Insolvency and Bankruptcy Code is not a money recovery proceedings, but rather is pursued for the dissolution of a company, which is unable to pay its dues. Once the same is admitted into Insolvency Resolution Process, the said proceedings become a proceeding in-rem and moratorium takes effect. m)Section 7 of the Insolvency and Bankruptcy Code, 2016 does not bar the filing of an application in respect of a financial debt under that provision in spite of a pending dispute, unlike Section 9 read with Section 8(2) of the Insolvency and Bankruptcy Code, 2016 which specifically bars filing of an application by an operational creditor if there was a pre-existing dispute. n)In support of the aforesaid submission, the decision rendered by the National Company Law Tribunal in Karan Goel v. M/s Pashupathi Jewellers and another reported in 2019 SCC OnLine NCLAT 934 was relied upon. o)Clause 4 of the Memorandum of Compromise dated 14.09.2019 in respect of principal amou....
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.... a party makes their conduct far from satisfactory. Further, the parties should not blow hot and cold by taking inconsistent stands and prolong proceedings unnecessarily. e)In the application filed for summary judgment, except for making a bald assertion that the defendants have no real prospect of successfully defending the claim, the plaintiff has not specifically dealt with the defence raised by the defendants. Therefore, the present Application is not in conformity with the mandatory procedure prescribed under Order XIII-A C.P.C., 1908 (as amended by the Commercial Courts Act, 2015). f)A careful perusal of the Hon'ble Supreme Court's order would show that in cases where limitation did not expire between 15.03.2020 to 28.02.2022, it cannot be construed that the entire period would remain under suspended animation for the purpose of computation of limitation period. Such an interpretation would result in patent absurdity as it would result in enlargement of time when the order infact only provides for exclusion of the above time period for cases where limitation would have expired between 15.03.2020 to 28.02.2022. The Hon'ble Supreme Court's order can never be....
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....med by the plaintiff, there is absolutely no basis for them to claim interest at the rate of 15%. The Memorandum of Compromise pertaining to the interest claims was crystallized at Rs. 45,00,000/- and was also paid by the first defendant to the plaintiff. Therefore, the plaintiff cannot claim any further interest and the basis for claiming 15% interest is something, which has to be demonstrated and proven by the plaintiff at the time of trial. m)The decision of the Hon'ble Supreme Court in Machado Brothers reported in 2004 11 SCC 168 was also relied upon for the purpose of the defendants' contention that by exercising the powers under Section 151 of C.P.C., the suit can be disposed of as it has now become infructuous due to the subsequent development pursuant to the Memorandum of Compromise dated 14.09.2019 entered into between the plaintiff and the first defendant as there are several triable issues involved in the suit and therefore, the question of entertaining this application filed by the plaintiff seeking for summary judgment does not arise. Discussion : 12. The following are the undisputed facts: a)The first defendant has agreed to refund the advance amount to....
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....mpromise, there is no evidence produced by the defendants to prove the same. 15. On the other hand, the plaintiff has filed documents, which records the subsequent developments pursuant to the date of signing of the Memorandum of Compromise dated 14.09.2019, which will reveal that a sum of Rs.70,00,000/- is still due and payable to the plaintiff by the first defendant. Though under the Memorandum of Compromise dated 14.09.2019, the plaintiff had undertaken to withdraw the suit on receipt of the first instalment of Rs.55,00,000/- from the first defendant, there is no time frame fixed in the Memorandum of Compromise for withdrawal of the suit by the plaintiff. 16. In this application, the defendants have taken the following defences: a)Since the amendment applications filed by the plaintiff seeking to amend the claim pursuant to the Memorandum of Compromise dated 14.09.2019 were filed only on 24.07.2023 beyond the period of three years from the date of Memorandum of Compromise, this application seeking for summary judgment is not maintainable and the suit is barred by limitation. b)Under the Memorandum of Compromise dated 14.09.2019, the plaintiff has undertaken to withdraw the....
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....ndment applications have been filed beyond the period of limitation and that the order of the Hon'ble Supreme Court saving the limitation will not apply to the case on hand since the limitation period expired only after 28.02.2022. 21. The contentions of both the parties with regard to the limitation issue cannot be decided in this Interlocutory Application as there are merits and demerits in both their contentions with regard to the limitation issue and therefore that issue can be decided only after trial 22. This Court is not expressing its view in this Interlocutory Application as the issue of limitation can be decided only after trial as the plea of limitation taken by the defendants cannot be totally disregarded considering the fact that the amendment applications were filed by the plaintiff only on 24.07.2023. 23. The Hon'ble Supreme Court in the case of Life Insurance Corporation vs. Sanjeev Builders Private Limited reported in (2018) 11 SCC 722 has also framed general guidelines for Courts while adjudicating amendment applications filed under Order VI Rule 17 of C.P.C. wherein it has been held that if a time barred claim is sought to be introduced, in which case,....
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....CC 168, the suit has become infructuous on account of the non withdrawal of the same by the plaintiff as per the Memorandum of Compromise dated 14.09.2019, this Court is of the considered view that it cannot be as simple as the learned counsel for the defendants portrays. But necessarily, it is a triable issue, which cannot be decided in this Interlocutory stage and can be decided only after trial. 31. It is also noted that in Order I Rule 10 of C.P.C. application taken out by the defendants 2 and 3, this Court, in its order dated 17.02.2022 while dismissing the said application, has also observed that the burden lies on the plaintiff to prove the allegations against the defendants 2 and 3 during trial. 32. Therefore, after giving due consideration to the fact that the plea of limitation raised by the defendants is not a moonshine defence as it requires further consideration for which oral evidence of the parties is required, the plaintiff is not entitled for a summary judgment as prayed for in this application. However, considering the fact that Rs.70,00,000/- is an un-disputed amount, the first defendant must be put on terms for allowing them to defend the suit, on merits. 33.....