The Motor And General Finance ... vs Durga Builders Pvt. Ltd. And Anr.
2007 Latest Caselaw 2127 Del

JUDGMENT

Sanjay Kishan Kaul, J.

IA No. 12439/2006 (O-XII, R-6 CPC) IN CS (OS) No. 612/2001

1. The plaintiff has filed a suit for recovery of Rs.3,56,82,220/- under the provisions of Order XXXIV of the Code of Civil Procedure, 1908 (for short, 'the said Code'). It is the case of the plaintiff that defendant No. 1 company approached the plaintiff company for grant of Inter Corporate Deposit (for short, 'ICD') in the year 1995 and the plaintiff granted such ICD of Rs.2 crores on 11.09.1995 bearing interest of 24% p.a. This ICD was paid off by defendant No. 1 company on 10.01.1996. At the stage when the grant of ICD of Rs.2 crores was to be given, it is alleged that defendant No. 1 company had created an equitable mortgage with the plaintiff company of land situated in Village Islampur, District Faridabad, Haryana and Plot No. 10, Ring Road, Lajpat Nagar IV, New Delhi, the details of which have been set out in the plaint. The equitable mortgage is stated to be by deposit of the original title documents. The plaintiff claims to have granted various ICD to defendant No. 1 company in the year 1995 which subsequently stood paid off. The subject matter of the suit are three ICDs - two of Rs.1 crore each and one of Rs.50 lakhs stated to be secured by the equitable mortgage. Interest is stated to have been paid from time to time on the ICDs and the statement of account has been filed along with the plaint.

2. The occasion to file the suit arose as defendant No. 1 failed to clear the outstanding. The suit was originally filed only against defendant No. 1, but subsequently defendant No. 2 was imp leaded as a party on account of the claim of having acquired interest in the mortgage property, being a subsequent purchaser.

3. The suit has been resisted by defendant No. 1 inter alia alleging that the suit is the direct result of collusion between the plaintiff company and one Shri Arun Mehra, who was the Director of defendant No. 1 and unauthorisedly passed on certain documents to the plaintiff company. The plea of time-bar has also been raised as also the absence of any written document evidencing the mortgage. Defendant No. 1 pleads that one M/s. Hindustan Commercial Investment Trust Ltd., a company of Shri Arun Mehra, as the Managing Director has purchased 50 plots of 502.32 sq. yds. in Edenburg City, Faridabad from defendant No. 1 for a consideration of Rs.2.5 crores and consideration for the same was paid under the cover of the letter dated 28.06.1996. One of the cheques received was of MGF Ltd. Defendant No. 1 admits having paid certain amounts to the plaintiff company but deny the factum of a deposit. The plea, thus, is that the monies were actually arranged by Mr. Arun Mehra for purchase of plots and some cheques had been issued by the plaintiff company towards purchase of the said plots.

4. The issues were framed on 29.09.2005 and the suit has been set down for trial. In the meantime, the present application has been filed seeking a decree on admissions from defendant No. 1 company.

5. The application is predicated on the balance-sheet filed by defendant No. 1 company itself as on 31.03.2004 for the assessment year 2004-2005 where defendant No. 1 has shown a liability of Rs.1.93 crores payable to the plaintiff for the year ending on 31.03.2004. It is, thus, stated that though the amount owed is much more, there is at least a categorical admission of the liability to pay Rs.1.93 crores as per the admission in the balance-sheet and such an admission came to the knowledge of the plaintiff only in the first week of October, 2006.

6. The application is opposed by defendant No. 1 once again reiterating the plea as raised in the written statement and denying any loan. It is, thus, stated that the monies advanced by the plaintiff were to Mr. Arun Mehra for purchase of 50 plots.

7. In view of the nature of the controversy, this Court deemed it appropriate to record the statement of Mr. Ravindra Kumar Nanda, Managing Director of defendant No. 1. A perusal of the said statement recorded on 09.10.2007 shows that Mr. Nanda is a Graduate and thereafter completed his Law Degree and was responsible for the incorporation of defendant No. 1 company in the year 1985. The only two Directors and two shareholders of the company are Mr. Nanda and his wife and the company was carrying on the business of colonization. Mr. Nanda has admitted that the balance-sheets are filed regularly and both he and his wife signed the balance-sheet. On being shown the certified copy of the balance-sheet for the year 2004-2005, Mr. Nanda admitted his signatures. The balance-sheet was exhibited as Exhibit-A. Mr. Nanda also identified the signatures of his wife. The attention of Mr. Nanda was drawn to Schedule C of the balance-sheet, which is a list of unsecured loans in which at S. No. 1, the name of the plaintiff has been shown with an amount of Rs.1.93 crores stated as unsecured loan payable to the plaintiff. Mr. Nanda, however, stated that this amount was advanced against the booking of plots in the Okhla Enclave Project and that certain documents were executed in respect of the booking including agreement to sell. The documents were stated not to have been filed, but thereafter Mr. Nanda stated, "I now state that the agreement was not with MGF Ltd. The agreement was only with Mr. Arun Mehra and MGF Ltd. did not have anything to do with the agreement. It was Mr. Arun Mehra, who brought all the documents."

8. A further statement made by Mr. Nanda is that "MGF Ltd. never applied for refund and, thus, we never repaid them back. M/s. Durga Builders Pvt. Ltd. is willing to pay the amount back to MGF Ltd.".

9. Mr. Nanda having made the aforesaid statement thereafter again changed his stand to some extent by stating that the money was received from MGF Ltd. through Mr. Arun Mehra towards booking. The initial written statement is stated to have been signed by him as also the amended written statement. Mr. Nanda has also stated that MGF Ltd. has been shown as a creditor in the balance-sheets possibly from 1996-97 and there were numerous civil and criminal cases pending against Mr. Nanda and defendant No. 1 company.

10. Learned Counsel for the plaintiff contends that not only is the amount reflected in the balance-sheet, which is an admission on the part of defendant No. 1 company, but the statement of Mr. Nanda further fortifies the same and admits to the liability of the plaintiff at least to that extent. Mr. Nanda, though initially stated that the transaction was one for booking of plots, admitted that there was no such arrangement with the plaintiff, but with some other company of Mr. Arun Mehra.

11. Learned Counsel for the plaintiff has relied upon the judgment of the Supreme Court in Uttam Singh Dugal & Co. Ltd. v. Union Bank of India and Ors. where the scope and ambit of the provisions of Order XII Rule 6 of the said Code have been discussed. It has been emphasized that the object of Order XII Rule 6 of the said Code has to be considered keeping in mind the amendments made and the object and reasons set out while amending the rule. The object of the rule is to enable the party to obtain speedy judgment at least to the extent of the relief to which according to the admission of the defendant, the plaintiff is so entitled. It is in view thereof that the Supreme Court observed that the meaning should not be undoubtedly narrowed down of this rule, but naturally the pre-requisite is that there has to be a plain admission entitling the plaintiff to succeed and the admission of facts should be so clear that it is impossible for the party making such admission to succeed. If the denial is evasive, the trial court would be justified in holding that there is unequivocal admission of the contents of the documents.

12. Learned Counsel for defendant No. 1, on the other hand, has emphasized that the suit has also been set down for trial and the only direction to be passed is for expedition of trial. Learned Counsel in the written synopsis filed has referred to the fact that an application had been filed by defendant No. 1 seeking impleadment of Mr. Arun Mehra, which was pending. However, on perusal of the record, it is found that the said application was dismissed as far back as on 07.03.2007.

13. Learned Counsel for defendant No. 1 contends that the amount, which is shown in the balance-sheet, has been tendered by Mr. Arun Mehra towards booking of the plots in his favor and in this behalf has referred to the fact that there are other suits pending inter-se defendant No. 1 and Mr. Arun Mehra as well as other parties including the plaintiff. The liability to pay the amount has been denied in the written statement filed.

14. Learned Counsel has drawn the attention of this Court to the judgment of the Supreme Court in Chandradhar Goswami and Ors. v. Gauhati Bank Ltd. to contend that entries in the books of account or mere copies thereof are not sufficient to charge a person with liability except where a person concerned accepts the correctness of the entries. Learned Counsel has also referred to the judgment of learned Single Judge of this Court in R.K. Markan v. Rajiv Kumar Markan and Anr. 2003 A I H C 632 holding that the admissions should be unambiguous and unequivocal. A similar view has been taken in Manisha Commercial Ltd. v. N.R. Dongre and Anr. .

15. On a consideration of the aforesaid matter, there is really no dispute insofar as the legal proposition is concerned that the admission should be unequivocal and clear. The present application, as already observed aforesaid, is predicated on the balance-sheet filed by defendant No. 1 itself and thereafter the statement of the Managing Director of defendant No. 1 has been recorded. What clearly emerges from the statement is that the plaintiff continues to be shown as a creditor in the balance-sheet of defendant No. 1 from 1996-1997 and the said position continued for 2004-2005, i.e., much after filing of the suit. The explanation given by learned Counsel for defendant No. 1 that the same is towards booking for the plots cannot be accepted for the reason that in the balance-sheet, the plaintiff has been shown as an unsecured creditor. If the amount was towards any booking, then it would have been shown in the balance-sheet as such.

16. The Managing Director of defendant No. 1, in fact, in part of the statement even volunteered that the amount had not been paid back to the plaintiff because the plaintiff had not demanded the said amount. Such a plea can hardly be accepted for the reason that it is not the case of defendant No. 1 that even after filing of the suit, defendant No. 1 volunteered to pay back the amount. The present case is not one which is predicated on any disputed bank statement as in Chandradhar Goswami & Ors.'s case (supra), but on the undisputed balance-sheet of defendant No. 1 and the statement of the Managing Director of defendant No. 1 has corroborated the same.

17. The object of Order XII Rule 6 of the said Code must be kept in mind as set out in Uttam Singh Dugal & Co. Ltd.'s case (supra) that to the extent there is such unambiguous admission, the plaintiff must succeed at least to that extent.

18. It is no doubt true that defendant No. 1 has shown the amount of Rs.1.93 crores as unsecured loan while the plaintiff claims that the same is secured by the mortgage of the suit properties. Whether the mortgage has so been created or not is a matter to be decided in trial. This would not amount to taking a piecemeal admission since the admission is in respect of the quantum of liability and the aspect of mortgage is only qua the aspect of security for such liability.

19. I am, thus, of the considered view that the plaintiff is entitled to a decree to the extent of Rs.1.93 crores against defendant No. 1 on the basis of the admissions contained in the balance-sheet as also corroborated by the statement of the Managing Director of defendant No. 1, Mr. Nanda.

20. Decree-sheet be drawn up accordingly.

CS (OS) No. 612/2001

List the suit before the Joint Registrar for further directions regarding trial on 23.01.2008.