TaxTMI 
TaxTMI 
2023 (4) TMI 1429
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....plaza, etc. The defendant is also a registered company involved in the business of Real Estate. 3. In the plaint, it has been pleaded as under: i. Sometime in the month of July, 2012, the defendant had approached the plaintiff-company and requested the plaintiff to undertake the work of development on a parcel of land admeasuring 1.75 Acres falling in Rectangle No. 97, Kila No. 23.2 (1-7), Kila No. 18 (6-13) and Kila No. 23/1 (6-13) situated in "A" Block of the integrated residential colony called "ESSENCIA" in the revenue estate of Village Badshapur, Tehsil & District Gurgaon (part of Sector 67 of Gurgaon-Manesar Urban Complex Plan 2031). ii. The defendant had represented to the plaintiff that the said property was free from all sorts of encumbrances, charge, mortgage and/or lien, and that there would be no impediment to the development work undertaken by the plaintiff-company. iii. It was further represented to the plaintiff-company that the defendant had an agreement with one Universal Buildwell Pvt. Ltd (hereinafter referred to as "UBL"), which stood terminated vide Notice of Termination dated 20.10.2011. iv. Based on t....
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....TDS of Rs. 13,96,886/- on 30.09.2015, but has not paid any money towards the interest to the plaintiff. xii. Despite reminders, the defendant has not paid interest, and has stopped depositing any TDS to the credit of the government. xiii. Thereafter, the plaintiff, by way of a Demand Notice dated 24.08.2018, called upon the defendant to pay the balance outstanding amount along with the interest accrued thereupon. xiv. In its response dated 07.09.2018, the defendant stated that it has paid to the plaintiff a sum of Rs. 11,79,23,640/- between 18.05.2013 to 27.03.2015. The defendant, however, did not state anything on the payment of interest that was payable under the Cancellation Deed. 4. Based on the above allegations, the present suit has been filed by the plaintiff on 20.09.2018 seeking the recovery of the balance outstanding amount due from the defendant. DEFENDANT'S APPLICATION SEEKING LEAVE TO DEFEND: 5. The defendant has filed the present application seeking an unconditional leave to defend the present suit filed by the plaintiff under Order XXXVII of the CPC. 6. The plea taken by the defendant in its affidavit in support of its....
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....91 Supp (1) SCC 191; IDBI Trusteeship Services Limited v. Hubtown Limited, (2017) 1 SCC 568; Wada Arun Asbestos Private Limited v. Gujarat Water Supply and Sewerage, (2009) 2 SCC 432; and B.L. Kashyap & Sons Limited v. JMS Steels and Power Corporation & Anr, (2022) 3 SCC 294, the learned senior counsel for the defendant submits that the defendant has raised a substantial defence to be granted an unconditional leave to defend the present Suit. 10. Placing reliance on the judgement of this Court in Ge Capital Services India v. Dr. K.M. Veerappa Reddy & Ors, 2015 SCC OnLine Del 13007, he submits that suits which claims amount on the basis of balances due at the foot of the account, cannot be treated as one falling under Order XXXVII of the CPC. The entries and statements of account have to be necessarily proved as per Section 34 of the Evidence Act, 1872 for the balance at the foot of the account to be arrived at. He submits that the claim of the plaintiff is also on the basis of the alleged ledger account and, therefore, not maintainable under Order XXXVII of the CPC. 11. He submits that the present Suit is barred by limitation. He submits that it is the case of the plaintiff t....
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....avit(s) filed by Mr. Tarun Kathuria, Chief Financial Officer (in short "CFO") and Head (Finance) of Ansal Housing Limited before the learned Sole Arbitrator, showing certain amounts to be adjusted. SUBMISSIONS OF THE LEARNED SENIOR COUNSEL FOR THE PLAINTIFF 15. On the other hand, the learned senior counsel for the plaintiff submits that the present suit is not barred by limitation as the defendant had made a payment to the credit of the plaintiff on 30.09.2015 as also in March 2016 in the form of TDS. Placing reliance on Section(s) 194A and 198 of the Income Tax Act, 1961 (hereinafter referred to as "Income Tax Act"), he submits that the TDS deposited is to the credit of the plaintiff, and is, therefore, part payment of the debt due, which shall extend the period of limitation as provided in Section 19 of the Limitation Act. In support, he places reliance on the judgement of the High Court of Bombay in Mahindra Lifespace Developers Limited vs. Biecrete Project Private Limited, 2012 SCC OnLine Bom 1730; and the judgement of the Supreme Court in Baranagore Jute Factory Plc. Mazdoor Sangh (BMS) and Ors. V. Baranagore Jute Factory Plc. And Ors, (2017) 5 SCC 506. He submits that d....
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....ed, if the defendant satisfies the Court that he has substantial defence i.e., a defence which is likely to succeed, he is entitled to unconditional leave to defend. In the second eventuality, where the defendant raises triable issues indicating a fair or bona fide or reasonable defence, albeit not a positively good defence, he would be ordinarily entitled to unconditional leave to defend. In the third eventuality, where the defendant raises triable issues, but it remains doubtful if the defendant is raising the same in good faith or about genuineness of the issues, the trial court is expected to balance the requirements of expeditious disposal of commercial causes on one hand and of not shutting out triable issues by unduly severe orders on the other. Therefore, the trial court may impose conditions both as to time or mode of trial as well as payment into the court or furnishing security. In the fourth eventuality, where the proposed defence appears to be plausible but improbable, heightened conditions may be imposed as to the time or mode of trial as also of payment into the court or furnishing security or both, which may extend to the entire principal sum together with just and ....
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....nabove, the learned senior counsel for the defendant has asserted that as the present suit is based on the ledger account maintained by the plaintiff, the present suit is not maintainable under Order XXXVII of the CPC. 22. I am unable to accept this submission of the learned senior counsel for the defendant. 23. The present suit is based on the Deed of Cancellation dated 20.04.2013 executed between the parties. By the said Cancellation Deed, the defendant acknowledged its liability to refund an amount of Rs. 12 Crores with interest calculated at the rate of 24% per annum. The relevant terms of the Cancellation Deed are reproduced hereinunder: "2. That SPPL will refund the entire amount of Rs. 12 Crores with interest calculated @24% p.a. The interest will be calculated from the date of receipt of advance of Rs. 12 Crores and till the entire amount together with interest is refunded by SPPL to AHCL. 3. That the entire amount of Rs. 12 Crores together with interest thereon would be refunded by SPPL to AHCL latest by 31st December, 2013 failing which AHCL shall be at liberty to adjust amount due to SPPL in any other account." 24. The ledge....
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....ries in the ledger account. 28. It is, therefore, held that the present Suit is maintainable under Order XXXVII of the CPC. WHETHER THE SUIT IS BARRED BY LIMITATION 29. The learned senior counsel for the defendant has asserted that as the case of the plaintiff itself is that the last payment made against the Deed of Cancellation was received by the plaintiff from the defendant on 27.03.2015, the present Suit having been filed on 20.09.2018, is, therefore, barred by limitation. He has submitted that the mere fact of the deposit of TDS on 30.09.2015 by the defendant would not extend the period of limitation. 30. The above submission is disputed by the learned senior counsel for the plaintiff contending that the TDS deposited is to the account of the plaintiff and, therefore, would extend the period of limitation. 31. Section 19 of the Limitation Act, 1963 reads as under: "19. Effect of payment on account of debt or of interest on legacy.-Where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent duly authorised in this behalf, a fresh period....
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.... S.P. Brothers (supra). The said judgments would, however, have no application to the facts of the present case. Though deposit of TDS may not act as an acknowledgment of debt by the defendant, it being a payment made by the defendant on account of the plaintiff and on account of a debt, would lead to a fresh period of limitation being computed from the date when the deposit of TDS was made. 38. The Suit therefore, cannot be said to be barred by limitation. WHETHER COMPOUND INTEREST IS PAYABLE UNDER THE CANCELLATION DEED 39. The plaintiff has claimed that the defendant is liable to pay interest @24% per annum compounded annually under the Cancellation Deed. The learned senior counsel for the plaintiff has submitted that the deposit of TDS by the defendant itself would show that the interest was payable on a compounding basis. In the alternative, he submits that the plaintiff would confine its claim of interest as Simple Interest. 40. The learned senior counsel for the defendant, on the other hand, submits that the Cancellation Deed does not provide for compounding of interest and, therefore, the suit, not being based on the written Agreement, is not maintainable under O....
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.... reply to a Legal Notice cannot be considered as an admission of liability. The plaintiff would still have to prove its own case. 44. Similarly, reliance of the learned senior counsel for the plaintiff on the account conformation statement dated 01.04.2013 or the ledger account of the defendant, without adequate explanation thereof, which would occur only when only parties lead their evidence, cannot be considered as an admission of the fact that the interest was to be paid on compounding basis by the defendant. 45. In The Godhra Electricity Co. Ltd. & Anr. (Supra), relied upon by the learned senior counsel for the plaintiff, the Supreme Court held that in the process of interpretation of the terms of a Contract, the Court can get an assistance from the conduct of the parties. However, the said judgment would not have an application at the present stage, inasmuch as, the parties are yet to prove their respective conduct, which can be done only when the defendant is granted leave to defend the present suit. 46. Faced with the above, the learned senior counsel for the plaintiff, placing reliance on the judgment of the High Court of Bombay in SICOM Ltd. v. Prashant S. Tanna, ....
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....hat the claim of the defendant in the arbitration proceedings is in the nature of damages and, therefore, in any case, adjustment cannot be claimed by the defendant of the amounts that have been claimed by the defendant in such arbitration proceedings. 50. Though, the learned senior counsel for the plaintiff prima facie is correct in his assertion that it is the right of the plaintiff in terms of Clause 3 of the Cancellation Deed to adjust the amounts owed by the defendant under the Cancellation Deed against any amount that the plaintiff may owe to the defendant in other accounts, for the purposes of consideration of the present application, the defendant, by the conduct of the plaintiff, has been able to raise a substantial defence that such amounts may have been adjusted by the plaintiff but are now claimed from the defendant in the present suit. 51. For the above prima facie finding, and at least for the purposes of the present application, the following conduct of the parties is relevant:- (a) the plaintiff has filed the present suit almost at the end of the period of limitation that too based on an extension that may be available to the plaintiff only due to the....