Calcutta High Court

Mohit Bharany vs Greentech It City Private Limited ... on 27 September, 2022

                   IN THE HIGH COURT AT CALCUTTA
                ORDINARY ORIGINAL CIVIL JURISDICTION
                           ORIGINAL SIDE

BEFORE:
The Hon'ble Justice Ravi Krishan Kapur

                                 IA NO. GA/1/2021
                                 In CS/205/2021

                            MOHIT BHARANY
                                  Vs
                GREENTECH IT CITY PRIVATE LIMITED & ORS.

For the petitioner             : Mr. Jishnu Chowdhury, Adv
                                 Mr. Chayan Gupta, Adv
                                 Mr. Rittick Chowdhury, Adv
                                 Mr. Dwip Raj Basu, Adv
                                 Mr. A. Datta, Adv.

For the respondents            : Mr. Ishaan Saha, Adv
                                 Mr. A.K. Awasthi, Adv.
                                 Mr. Yubaraj Bhattacharyya, Adv.

Reserved on                    : 12.05.2022

Judgment on                    : 27.09.2022

Ravi Krishan Kapur, J.

1. This is a suit for recovery of money.

2. The disputes by and between the parties arise out of an agreement

dated 31 July, 2014, for purchase of an Aqua Golf Villa, Phase-I

situated at Vedic Village at Kolkata (the premises).

3. Pursuant to an agreement for sale dated 31 July, 2014, the petitioner

paid Rs.72,50,000/- to the respondent no.1. The respondent no.1

duly acknowledged receipt of the same. The agreement also

guaranteed return of interest @ 18% per annum compounded

annually, in case the respondent no.1 failed to deliver possession of

the premises to the petitioner within 24 months. The last date for

handing over possession of the premises expired on 31 July 2016.

The respondent no.1 was unable to deliver possession of the premises

to the petitioner. The respondent no.1 also failed to return the

money.

4. Thereafter, diverse negotiations took place by and between the

parties. Ultimately, in or about September 2020, the respondents

agreed to transfer 15 cottahs of land inside Vedic Village within three

months upon the petitioner completing the due diligence of the

proposed land. Subsequently, it transpired that the proposed land to

be transferred to the petitioner had already been sold to a third party.

5. In November 2020, after negotiations, the respondent no.3 agreed to

transfer a different piece of land measuring around 15 cottahs inside

the Vedic Village Compound to the petitioner. Accordingly, the parties

entered into an agreement dated 16 December, 2020, whereby the

respondents agreed to transfer 15 cottahs of an alternative plot to the

petitioner within three months from the date of execution of the deed

of conveyance.

6. On 27 September, 2021, the petitioner ultimately issued a letter to

the respondents through its Advocate, terminating the agreement in

view of the failure of the respondents to handover the site. Hence,

this suit.

7. It is contended on behalf of the petitioner that in view of the default

and failure of the respondents, to honour their obligations under the

agreements dated 31 July, 2014 and 16 December, 2020 respectively,

the petitioner is entitled to refund of the entirety of the said sum of

Rs.72,50,000/- alongwith interest @ 18% per annum aggregating to

Rs.2,30,94,686/-. Moreover, by the Memorandum of Understanding

dated 16 December, 2020, the respondent no.3 has acknowledged

default of the respondents, in complying with their obligations under

the agreement dated 31 July, 2014. Additionally, notwithstanding an

unequivocal obligation (Clause-III) under the MOU dated 16

December, 2020 stipulating that the respondents would hand over all

title documents including the sale deed, parchas, LR information

slips, khajna receipts and the like within 7 days from the date of

execution of the agreement, the respondents were unable to hand

over the same.

8. It is further alleged that since 2014, the respondents have been

holding on to the money advanced by the petitioner and have failed to

honour their contractual obligations. It is also contended that the

proposed land which had been shown to the petitioner is marshy

land and wholly unfit for any purpose. The petitioner relies on

Harleen Jairath Vs. Prabha Surana and Anr. reported in (2019) 4 CHN

412 paras 45-54, Prabha Surana Vs. Jaideep Halwasiya reported in

AIR 2021 Cal 212 and Rahul S. Shah Vs. Jinendra Kumar Gandhi

reported in (2021) 6 SCC 418, to contend that, the petitioner is

entitled to be adequately secured in respect of its claim.

9. On behalf of the respondents, it is contended that, the petitioner is in

breach of his contractual obligations both under the agreement dated

31 July, 2014 and under the agreement dated 16 December, 2020. It

is contended that all the title documents had been handed over to the

petitioner. It is also alleged that the respondents were ready and

willing to convey the premises to the petitioner, but it is the petitioner

who is has been unwilling to honour his obligations. In this

connection, the respondents have also filed a suit being CS 57 of

2022 inter alia seeking a decree of specific performance of the

agreement dated 16 December, 2020. The agreement dated 16

December, 2020 is not a determinable contract and that the

respondents have marketable title in respect of the same. In this

connection, reliance is placed on the decisions reported in Golden

Tobacco vs. Golden Tobby 2021 2 SCC OnLine 4506 at para 36-43 and

Shankar Lal vs. Jaithmal AIR 1961 RAJ 196 at para 16, 19 and 20. It

is further alleged that the petitioner has failed to satisfy any of the

grounds warranting an order of attachment. There is no likelihood of

the respondents dealing with any of their assets or of defrauding its

creditors. Moreover, as an unsecured creditor, the petitioner ought

not to be converted into a secured creditor. Thus, the petitioner is not

entitled to any relief.

10. I have considered the submissions of the parties.

11. Admittedly, the petitioner had paid a sum of Rs.72,50,000/- as far

back as on 31 July, 2014 to the respondents. The respondents have

duly received the said amount and have enjoyed the same. The

respondents have been unable to hand over the premises in terms of

the agreement dated 31 July, 2014 to the petitioner. By an agreement

dated 16 December, 2020, the parties had attempted to renegotiate

the terms and conditions of the original agreement. However, the

respondents have also been unable to give any alternative agreeable

site to the petitioner till date. The petitioner has been out of pocket of

Rs.72,50,000/-. Subsequently, the petitioner has been compelled to

terminate the agreement. Now, the petitioner is being made to run

from pillar to post.

12. Order 38 Rule V of the Code of Civil Procedure, 1908 deals with

attachment before judgment. The main object of an order for

attachment before judgment is to secure a plaintiff to realise the

decreetal dues in case a decree is eventually passed. In other words,

an order of attachment before judgment prevents the defendant from

defeating the fruits of a decree which may ultimately be passed in

favour of the plaintiff.

13. A very strong prima facie case is an essential first step to an order in

the nature of attachment before judgment. Unless, a near

unimpeachable claim in money is apparent, there is no requirement

to proceed with the second stage of assessing the conduct or the

financial capacity of the respondent. [Raman Tech. & Process Engg.

Co. v. Solanki Traders) (2008) 2 SCC 302 @ Paras 4 and 5, Harleen

Jairath v. Prabha Surana and Anr. (2019) 4 CHN 412 @ Paras 17 &

18, Jai Balaji Industries Ltd. vs. Hyquip Systems (P) Ltd. (2010) 4 CHN

87 (Cal).

14. The approach of Courts in such matters, where the claim of the

plaintiff is indisputable and unassailable is to protect the plaintiff

and to ensure that ultimately the decree is satisfied. (Rahul S. Shah

Vs. Jinendra Kumar Gandhi and Ors. (2021) 6 SCC 418 @ Paras 41

and 42).

15. This suit was filed in 2021. Notwithstanding repeated opportunities

granted by a Co-ordinate Bench, the parties were not able to arrive at

a settlement. There is nothing which the respondents have been able

to offer as worthwhile or solvent security. Thus, the petitioner needs

to be protected.

16. It is a commentary on the times that we live in that to a section of

society our country has become a Defaulter's Paradise.

Unfortunately, the system also encourages this attitude. Even more

worrisome is the trend of, "discount", "bargain" and to use a more

fashionable phrase "haircut". They intentionally and deliberately

choose not to repay their debts. On the other hand, the defendants in

such cases prefer to procrastinate and litigate. The security which a

Court should direct in such cases ought to be real, realisable and not

illusory.

17. In Abheya Realtors Private Limited vs. SSIPL Retail Limited & Anr.

reported in (2010) 2 CHN 203 it has been observed as follows:-

"Two aspects need to be seriously considered. At the time that the Civil Procedure Code came to be made suits would not take years or decades to be brought to trial as is usually the case these days. The strength of the principle that an apparently good claim would not justify an order for attachment to be made before final judgment is rendered, needs to be seen with reference to the time and place in which such principle was born. The second aspect is that even without a defendant attempting to defraud its creditors or the plaintiff, the

vicissitudes of the commercial market may leave the defendant with little to offer as judgment-debtor upon the decree being made. The sheer passage of time between the institution of an action and the trial thereof that has now come to be accepted as par for the course may make the claim irrelevant or even the claimant disinterested. That would result in an erosion of the confidence in the system and lead suitors to undesirable quarters for more effective results."

18. The authorities cited by the respondents are distinguishable and

inapposite to the facts of the case. There cannot be an absolute

proposition that in money claims no order of injunction, attachment

or Receiver can be made. In Premraj Mundra vs. Md. Maneck Gazi &

Ors. reported in AIR 1951 Cal 156, the Court had only enumerated

guiding principles which may be taken into consideration in

adjudicating upon the aspect of attachment upon judgment.

19. I find that the respondents have been unable to deliver possession of

the premises which formed the subject matter of the agreement dated

31 July, 2014 to the petitioner. Thereafter, it appears that, the

petitioner was shown marshy land with a water body in the middle,

land marked as K4 which did not exist, land not connected to any

approach road and land which has been earmarked for security

guards. Thus, the parties have been unable to agree on a proposed

site for close to a decade. It is obvious that insofar as the petitioner is

concerned there has been a total failure of consideration and the

respondents have been unable to either handover the premises or

any alternative site which the petitioner is agreeable to accept. The

petitioner has also terminated the agreement and now seeks refund

of the money. Accordingly, in my view the petitioner is justifiably not

interested in dealing with the respondents after a period of 8 years

and there being a total failure of consideration.

20. I also do not find any merit in the defence raised by the respondents.

The filing of a suit for specific performance being CS No. 58 of 2022

subsequent to the institution of this suit appears to be a counterblast

and simply a red herring. I do not find any merit in the plea that the

agreement dated 16 December, 2020 is not a determinable contract

or that the petitioner is not entitled to terminate the same. Similarly,

there is no question of readiness or willingness of the petitioner,

when the respondents have not been able to handover the original

premises or any alternative site. Thus, the claim of the petitioner is

unimpeachable, unassailable and bonafide. The respondents have

also chosen not offer any solvent security to secure the claim of the

petitioner.

21. Even on the aspect of interest on the said sum of Rs.72,50,000/-

paid by the petitioner, the respondents have no case. By a letter

dated 30 July 2014 the respondents represented by the respondent

no. 3, guaranteed to repay the principal amount along with interest

@18% per annum compounded annually. The petitioner is a home

buyer. The respondents are inter alia engaged in the business of real

estate development. The respondents have enjoyed the funds of the

petitioner for close to 8 years. In my view, the respondents are

contractually obliged to honour their obligation of paying interest

@18% per annum compounded annually. In fact, it would be not only

be inequitable but commercially imprudent to secure the petitioner

only to the extent of the principal amount when the parties had

consciously bargained and agreed on the interest component.