Delhi High Court

Deepali Designs & Exhibits ... vs Pico Deepali Overlays Consortium ... on 22 February, 2011

Author: Gita Mittal

*      IN THE HIGH COURT OF DELHI AT NEW DELHI


                                    Reserved on: 17th February, 2011
                                 Date of decision: 21st February, 2011

+ IA Nos.16915-16916/2010 & IA No.1218/2011 in CS(OS)
No.2528/2010

       DEEPALI DESIGNS & EXHIBITS PRIVATE LIMITED ..... Petitioner
                     Through, Mr. Sandeep Sethi, Sr. Adv. With Mr.
                                    Rakesh Mukhija, Adv.

                    versus

       PICO DEEPALI OVERLAYS CONSORTIUM & ORS. ... Respondents

Through Mr. V.P. Singh, Sr. Adv. with Mr. Dharmendra Rautra, Adv. & Ms. T.

Shahani, Adv.

Mr. Saumyen Das, Adv. for D-4/HSBC

CORAM:

HON'BLE MS. JUSTICE GITA MITTAL

1. Whether reporters of local papers may be allowed to see the Judgment? Yes

2. To be referred to the Reporter or not? Yes

3. Whether the judgment should be reported in the Yes Digest?

GITA MITTAL, J

1. The plaintiff has filed the above suit for recovery, declaration,

dissolution & rendition of accounts and mandatory injunction. Alongwith

the plaint, the application seeking interim reliefs being IA No.16915/2010

has been filed under Order 39 Rules 1 & 2 CPC seeking the following ad

interim ex-parte injunction orders:-

"i. Thereby directing the defendant no.5 not to release any payment in favour of defendant no.1 till the pendency of the present suit;

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.1 of 31 ii. Restraining the defendant No.1 and 2 or their agents, servants, representatives, etc. from operating the bank account bearing no.166189464001, with the Barakhamba Road Branch of H.S.B.C. Bank, till the final disposal of the accompanying suit.

iii. Restraining defendant No.3 or their agents, servants, representatives etc. from operating the bank account bearing no.051-827889-001, with the Barakhamba Road Branch of H.S.B.C. Bank, till the final disposal of the accompanying suit.

iv. Restraining Defendant No.1 from transferring any amount to the account of Defendant No.3.

v. Restraining Defendants from opening any other bank account in the name of Defendant No.1;

vi. Restraining defendants from remitting any amount overseas directly or indirectly, from any of their bank accounts in India."

2. IA no.16916/2010 has been filed under Order 38 Rule 5 CPC praying

for an order of attachment before judgment in the following terms:-

"A) Direct the defendant to furnish security as deem fit by this Hon‟ble Court to secure the suit amount with interest;

B) If the Defendants fails to furnish the security then following bank accounts of the defendants may be attached:

i. Money lying in Defendant No.1‟s bank account bearing no.166189464001, with the Barakhamba Road Branch of HSBC Bank.

ii. Money lying in Defendant No.3‟s bank account bearing no.051-827889-001, with the Barakhamba Road Branch of HSBC Bank."

3. As against this, the defendants have filed IA No.1218/2011 under

Order 39 Rule 4 of the CPC praying for vacation of the order which was

passed on 14th December, 2010.

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.2 of 31

4. These applications raise similar, almost identical, questions of law and

fact and are accordingly taken up together for disposal by this order.

5. The PICO Deepali Overlays Consortium, the first defendant

(hereinafter referred to as "PDOC" for brevity) is a compendium of the PICO

Hong Kong Limited-defendant no.2 herein (hereinafter referred to as "PHK"

for brevity) and PICO Event Marketing (India) Private Limited-defendant

no.3 herein (hereinafter referred to as "PEMI" for brevity).

6. The defendant no.2 is a company incorporated under the laws of

Hong Kong having its registered office at Hong Kong while the defendant

no.3 is a company incorporated under the provisions of the Indian

Companies Act, 1956.

7. The Pico Event Marketing (India) Pvt. Limited-defendant no.3 herein is

stated to be a subsidiary of the Pico India Exhibits Contractor Pvt. Ltd.

(PIEC), which is a Singapore based company. The defendant no.3, is stated

to have been incorporated in November, 2009 under the Indian Companies

Act, 1956.

8. So far as the relationship between the plaintiff and the defendants is

concerned, the plaintiff relies on a Consortium Agreement dated 19th

December, 2009 in terms whereof it was agreed to incorporate a joint

venture company in which the plaintiff and the defendant nos.2 & 3 would

have shareholdings percentage ratio of 20%, 60% and 20% respectively. It

is the case of the plaintiff that it was agreed that all profits and losses

would be shared by the parties in such ratio.

9. It is an admitted position that the first defendant was specifically

incorporated in terms of the said compendium for the purposes of bidding

and execution of the overlays tenders floated by the Organising

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.3 of 31 Committee, Common Wealth Games 2010 Delhi. It is the plaintiff's stand

that though the defendant no.1 has been styled as a consortium and

incorporated as a company under the Companies Act, 1956, but in terms of

operations, it is really in the nature of an unregistered partnership between

the plaintiff, defendant no.2 and the defendant no.3.

10. On the 29th December, 2009, this consortium of the plaintiff and

defendant nos.2 & 3 submitted its Expression of Interest (EOI) under the

name of PICO Deepali Overlays Consortium-defendant no.1 to the

Organising Committee Commonwealth Games arrayed as defendant no.5 in

these proceedings. This was followed with a Request of Proposal (`ROP‟

hereafter) submitted on 5th February, 2010 under the name of the

defendant no.1. In the first week of March, 2010, the defendant no.1 was

declared to be the lowest bidder in respect of cluster nos.1 to 6 in which

the EOI has been invited.

11. The consortium is maintaining an account in the name of the

defendant no.1 with the Hongkong Shanghai Banking Corporation (`HSBC‟

hereafter), Barakhamba Road, New Delhi arrayed as the defendant no.4

herein.

12. The plaintiff has pointed out that on 1st June, 2010, the Addendum to

the Consortium Agreement was executed between the parties to the suit

which provided that in case of inconsistency between the Consortium

Agreement and the Addendum, the provisions of the Addendum would

prevail. In the Consortium Agreement and the Addendum, the plaintiff is

referred to as the `Deepali ‟ whereas the defendant nos.1 to 3 are referred

to as `JV‟, „PHK‟ & „PEMI‟ respectively. Inasmuch as the instant case

relates to the claim by the plaintiff against the defendants in respect of

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.4 of 31 work undertaken by it pursuant to the said Consortium Agreement and the

Addendum, reference requires to be made to the scope of plaintiff‟s work

which was outlined in para 2.1 & 2.2 of the Addendum which reads as

follows:-

"2. Scope of Work

(1) After the assignment of the works to each member if there are any profits and assets earned and retained in the JV, Deepali shall not be entitled to any share of such profits and assets.

(2) Each party shall participate in the works tendered to the CWGOC Delhi 2010. The scope of work are assigned to members as follows:

Deepali: Works confirmed by CWGOC Delhi 2010, listed in Appendix 2 PHK & PEMI: All other works confirmed by CWGOC Delhi 2010, listed in Appendix 3.

(3) Amount received by the JV on contracts with the CWGOC Delhi 2010 in respect of work performed by Deepali, within the scope of work described in Appendix 2 (including any variations), minus 23% shall be paid to Deepali and the remainder shall belong to PHK. The net amount after deduction of the 23% is inclusive of the 10.3% service tax but excludes any tax deducted at source, Deepali shall provide PHK on demand any tax certificates reasonably required by PHK (including but not limited to anything related to the 10.3% Service Tax)."

13. So far as the payments are concerned, Clause 2(3) aforenoticed sets

out that the plaintiff would be entitled to the work performed by it within

the scope of work described in Appendix 2 (including any variations) minus

23% while the remainder would belong to defendant no.2. The net amount

after deduction of 23% was inclusive of 10.3% service tax but excluded any

tax deducted at source. The plaintiff was also required to provide the

defendant no.2 on demand any tax certificates which may be required

including but not limited to anything related to the 10.3% Service Tax. The

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.5 of 31 manner in which the consortium would work was set out in clause 2.4

wherein the full and sole authority was vested in the defendant no.2 with

regard to all several important facets of the working of the consortium.

14. The payment was to be effected on these terms with the stipulations

contained in appendix 3.3 Article 8.2 which reads as follows:-

"8.2 The invoiced amount shall be paid to the relevant JV member by the JV after each respective payment by Delhi 2010 and within ten (10) days after the aforementioned payment is effected by Delhi 2010 and deposited into the JV bank account"

The parties acted in terms of the said Addendum. It is also admitted

by all parties that these terms bind their dealings.

15. The defendants have disclosed that a contract was awarded by the

defendant no.5 to the defendant no.1 on the 2nd June, 2010 which was to

commence with effect from the same date and was required to be

completed on 10th September, 2010 with the total value of

Rs.209,052,790/- crores. The defendant no.1 is stated to have executed

works worth Rs.172,75,96,635/- (certified value of Rs.173 crores) under the

tender awarded to it by the Organising Committee-defendant no.5.

The defendants have further disclosed that this amount of

Rs.172,75,96,635/- had been based on quantities duly certified by it which

included 10.3% service tax after deduction of TDS.

16. It is the plaintiff‟s contention that the defendants have siphoned off

money owed to the plaintiff by transferring the same for their own use and

that the defendants were intending to siphon off the funds lying in the bank

account of the defendant no.1 with the HSBC Bank-defendant no.4 so as to

defeat the claims of the plaintiff. It has been suggested that the

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.6 of 31 defendants would try and remit the amount overseas as well as to the

accounts of Indian subsidiaries to defeat the plaintiff‟s claim. The plaintiff

claims entitlement to the amount of Rs.6,99,24,861/- out of moneys

already received from the defendant no.5. The plaintiff has expressed an

apprehension that if the money is remitted outside India and siphoned off,

the tax authority may recover the tax amount from the plaintiff company.

17. In the suit, the plaintiff has made the following prayers:-

"(i) Pass a decree of recovery of money of Rs.6,99,24,861/- in favour of the plaintiff company and against the defendant no.1 to 3;

(ii) Pass a decree of declaration that the defendant no.1 was formed for the specific purposes and the compendium/consortium/Partnership Concern of the plaintiff, defendant no.2 and 3 have come to an end from the date of filing of the present suit before this Hon‟ble Court;

(iii) Pass a decree of dissolution thereby dissolving the defendant no.1;

(iv) Pass a decree of mandatory injunction thereby directing the defendant no.4 to provide the entire details of the bank account having No.166189464001, with the Barakhamba Road Branch, H.S.B.C. Bank;

(v) Pass a decree of mandatory injunction thereby directing the defendant No.5 to provide the details of total payments made by the defendant no.5 in favour of the defendant no.1 along with the bills/details for respective payment;

(vi) Pass a decree of mandatory injunction thereby directing the defendant No.3 to provide the details of payments received by defendant No.3 from defendant No.1;

(vii) Pass a decree for rendition of accounts in favour of the plaintiffs and against defendant no.1;

(viii) Pass order awarding costs of the present suit in favour of the plaintiff company and against the defendants."

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.7 of 31

18. Along with the suit, the plaintiff filed the applications seeking interim

reliefs which included IA No.16915/2010 and IA No.16916/2010. The

plaintiff has also filed IA No.16917/2010 under Order 40 of the CPC seeking

appointment of a receiver. These applications were considered by the

court on 14th December, 2010 when it was urged that defendant no.2 was

not based in India and was operating accounts and receiving amounts from

the Organising Committee-defendant no.5 in India. The plaintiff had also

contended that unless the plaintiff‟s interest was secured, the defendant

no.1 to 3 would withdraw amounts given to them to satisfy its claims. In

this background, the following ex-parte order of injunction dated 14th

December, 2010 was passed:-

"xxx I.A. Nos.16915/2010 (Under Order 39 Rule 1 & 2), 16916/2010 (Under Order 38 Rule 5) & 16917/2010 (Under Order 40) Issue notice to the defendants, returnable on 10.02.2011; service through Regd. Post and e-mail as well, if the plaintiffs provide the same within two days.

The plaintiff seeks recovery of Rs. 6,99,24,861/- with interest. It is claimed that the plaintiff entered into a Consortium Agreement with the Defendant Nos. 2 and 3 on the one hand and Defendant No.5 (Organizing Committee of the Commonwealth Games referred to as the ?Organizing Committee?). Initially, the plaintiff was entitled to amounts in proportion to what was defined in the original Consortium Agreement dated 19.12.2009. It is submitted that the parties entered into a subsequent addendum which redefined the scope of the plaintiff‟s work, on 01.06.2010; a copy of the addendum has been placed on record as also the copy of the original agreement. In these, the plaintiff‟s scope of work was confined to what was outlined in paras 2.1 and 2.2. In terms of this agreement, the plaintiff was entitled to receive the entire proceeds of the consideration payable as part of its scope of work and was obliged to release 23% to the Defendant Nos. 2 and 3, inclusive of taxes. The plaintiff contends that the defendants have received about Rs. 90 crores, of which it is entitled to Rs.30,35,40,044/- to the first defendant on account of the scope of work for which the payment has to be received by it (the plaintiff). The plaintiff contends that it is entitled to,

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.8 of 31 under the said terms of 01.06.2010 Rs. 23,37,25,833/-. It is further stated that the plaintiff has till date received Rs.16,38,00,972/- and, therefore, is entitled to the amount of Rs. 6,99,24,861/-.

The plaintiff submits that unless its interests are secured, Defendant Nos. 1 to 3 would withdraw the amounts given to them which have to satisfy its claims. It, therefore, seeks appropriate injunctive relief.

The Court has considered the materials on record, which include copies of the original agreement of 19.12.2009 as well as the addendum dated 01.06.2010. Clauses 2.1 and 2.2 clarify that the plaintiff‟s scope of work as well as the share or proportion of consideration payable to it. The plaintiff has placed reliance on e-mail communication exchanged with the defendants by which clarity is sought as to the amounts received but the latter have apparently not disclosed details and particulars. Having regard to the circumstances that the Defendant No.2 is not based in India and is operating accounts and receiving amounts from the Organizing Committee in India, it would be appropriate that this Court, in order to secure the interests of justice, makes and interim order. Accordingly, the first three defendants are hereby restrained from operating the accounts, withdrawing any amount received by them to the extent of the suit claim. The defendants are also hereby restrained from operating further amount without permission of the Court in order to receive the amounts disbursed hereafter by the Organizing Committee in satisfaction of any bills which form part of the scope of work and Appendix-II dated 01.06.2010, till the next date of hearing.

Provisions of Order 39 Rule 3 shall be complied within seven days.

Order and notice dasti."

19. Aggrieved by this order of injunction, the defendants have filed IA

No.1218/2011 under Order 39 Rule 4 praying for vacation of the order of

injunction. The pleadings of the parties in this application have been

treated as their pleadings in the two other applications. The parties have

respectively pressed the applications under consideration.

20. Mr. Sandeep Sethi, learned senior counsel for the plaintiff has

strongly urged that the plaintiff has sought a decree and order for

rendition of accounts. It is submitted that the plaintiff strongly

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.9 of 31 apprehends that the defendants have not met the statutory liabilities and

that they would flee the boundaries of the country in order to avoid not

only liability to the plaintiff but also escape criminal action for failure to

meet statutory dues including income tax dues. It has been urged that the

defendants have not deposited the tax deductible at source by the

defendant no.1. The contention is that with this intent, the monies would

be remitted oversees bank accounts of the defendants or accounts of

other Indian affiliates or defendants.

21. Unfortunately, these assertions are not substantiated by any material

pleadings.

22. The percentage value of the payment and deductions in terms of

payments which the plaintiff is entitled to in terms of the Consortium

Agreement dated 19th December, 2009 and the Addendum dated 1st June,

2010 are undisputed.

23. On the issue of the receipt of payments, defendant no.1 has disclosed

receipt of Rs.943,574,429 (Rs.94.35 crores) against the said works till date.

It is also stated on affidavit that the defendant no.1 has lastly received a

payment on 18th October, 2010 of Rs.119,603,838/- including 10.3% service

tax but excluding TDS of 2% which was deducted by the defendant no.5. A

tabulation of the payments which have been received has been placed on

record. The plaintiff admits that the defendant has received payment of an

amount of Rs.943,574,429/- only and also of the fact that after 18th

October, 2010, no payment has been received.

24. The defendants have contended that therefore only 55% of the total

billed amount has been received by it from the defendant no.5 till date.

The plaintiff has also stated the same to be equivalent to 60% of the scope

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.10 of 31 of work.

25. The plaintiff has filed a reply on affidavit vaguely disputing the

assertions by the defendants . In para 6 of IA No.1218/2011 of the reply

filed by it, the plaintiff has replied as follows:-

"6. However it is submitted that to the information and knowledge of the plaintiff company the Consortium/Compendium/defendant no.1 has received approximately total of Rs.94,35,74,431/- out of total payment of about Rs.180 Crore from the Commonwealth Games Organizing Committee. That out of the said amount of Rs.94,35,74,431/- an approximate amount of Rs.30,35,40,044/- has been paid by the Organizing Committee to the defendant no.1 on account of the work falling within the scope and ambit of the plaintiff company, which was duly completed by it. After deducting 23%, the total amount payable to the Plaintiff Company would be Rs.23,37,25,833. Till date, the total payment received by the Plaintiff Company in respect of the Commonwealth Games project is Rs.16,38,00,972. Therefore, as on date, the total amount due to the plaintiff company from the defendants is to the tune of Rs.6,99,24,861/ The Defendants are jointly and severally liable to pay the aforesaid amount to the Plaintiff Company."

26. In the first year of the operation of the Pico Event Marketing (India)

Pvt. Ltd.-defendant no.3 in the financial year ending on 31st October, 2010

it had a turnover of approximately Rs.8.8 crores. The defendant no.3 has

further disclosed that it is currently executing contracts worth

approximately 1.7 crores. It is stated that the defendant no.3 is currently

working in several projects in India some of which are Aero India-2011

(Bangalore), TV Today, Siat India (Pune), Rubber Expo (Chennai), IRAI

Expo-2011, EFY Expo-2011 etc.

The defendants have disclosed that defendant no.3 had an Indian

presence for more than 15 years it had been carrying on business in India

through a franchisee. The defendant no.3 was incorporated to take over

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.11 of 31 the Indian business of the franchises under Indian laws. So far as the

shareholding of defendant no.3 till 4th December, 2010 is concerned, apart

from the 4.23% shareholding held by the franchisee, PICO Event Marketing

(India) Pvt. Ltd.-defendant no.3 owns the remaining shareholding.

27. The plaintiff has itself stated that the defendant no.3 is having its

registered office at the PICO Bhawan, A 27/15, Khanpur Extension, New

Delhi. The defendants have submitted that it is operating from a leased

factory premises in Faridabad of a total space of 35000 sq. ft. since

January, 2010.

28. The defendants have further stated that Pico Far East Holdings

Limited (hereinafter referred to as "PFE" for brevity) is the holding

company of the defendant no.3 which is a listed company in Hong Kong

with an annual turnover of HK$ 2.226 billion and profit of HK$ 124 billion

for the year 2009. The annual turnover of the Pico Far East Holdings

Limited for the current financial year ending 31st October, 2010 has been

disclosed to be of the tune of Rs.HK$3.075 billion with a profit of HK$192

million.

The Organising Committee of the Commonwealth Games-defendant

no.5 is stated to have relied on the track record and financial strength of

PEE the said holding company of the defendant no.3 in assessing the

credibility of and for award contract to defendant no.1.

29. The defendant no.2 and other subsidiaries of the Pico Far East

Holdings Limited are stated to have successfully completed overlays work

for the Commonwealth Game at Melborne; the Olympics Games in Athens,

the Olympics Games in Beijing and many other world events. An audited

financial result of the PICO Far East Holding for the year ending 31 st

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.12 of 31 October, 2010 has been placed before this court. In fact, the said Pico Far

East Holdings Limited has furnished an undertaking to the defendant no.5

to ensure completion of the project work on behalf of the consortium.

30. The defendants have also disclosed ownership of assets in India. It is

stated that the defendant no.3 has assets consisting of fixed assets, motor

vehicles, office furniture, fixtures and equipments and operating supplies

worth Rs.2,55,40,361.82 within India and an office in Mumbai as well.

31. It is important to note that the plaintiffs have not disputed these

assertions of the defendants. It has been stated that these submissions by

the defendants "need no reply being matter of records".

32. The extensive averments by the defendants with regard to their

financial status remain uncontroverted. The only basis for the plaintiff‟s

apprehensions is premised on the fact that the defendant no.2 is a foreign

company. On the other hand, the defendants have urged that a decree

passed by this court could be executed against the defendant no.2 even in

Hong Kong. Even otherwise, it has been pointed out that the defendants

are financially sound. As noticed above, the defendant no.3 has an

extensive Indian presence.

33. Coming to the allegations with regard to payments to foreign parties

are concerned, the defendants have stated that to ensure completion of

the works contracted to the defendant no.1 by the defendant no.5, within

the scheduled date of completion on 10th September, 2010, suppliers in

foreign jurisdiction were engaged which included the Asia Tent

International Sdn. Bhd (Malaysia) and Pakar Trading (Malaysia) through

the defendant no.2. It is pointed out that against the total contract value

of Rs.209 crores approximately, the total payments to these parties

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.13 of 31 minuscule. Invoices in this regard have been placed on record. Nothing

has been placed by the plaintiff on record to enable this court to arrive at

a contrary conclusion.

34. So far as the payments to defendant no.2 are concerned, details

thereof have been placed in para 14 of the IA No.1218/2011. The

defendant no.2 is stated to have issued the bonds towards the 10% bid

security money, 10% of the of the first Advance Performance Bond and

10% of the Second Advance Performance Bond on behalf of the

Consortium-defendant no.1 which was required by the defendant no.5

under the tender documents. It has been explained that an amount of

USD 6,928.81 and USD 51,732 has been reimbursed to the defendant no.2

towards bank charges/fees paid to the HSBC Hong Kong for issuance of

such bonds in favour of the Overseas Committee-defendant no.5. The

averments in respect of these payments are supported with documents

placed on record. There is no denial by the plaintiff to specific averments

in IA No.1218/2011 made by the defendants. No challenge is laid to the

annexure placed by the defendants on record.

35. It is stated by the defendants in IA No.1218/2011 that the defendant

no.2 does not have any bank account in its name in India.

36. So far as the payments of the plaintiff are concerned, the defendants

submit that under the Consortium Agreement and the practice followed by

the parties, until final accounting, the plaintiff‟s work was deemed to be

20% of the certified value while the defendant‟s work was deemed to be

80% of the certified value. On this basis, out of the total billing claim of

Rs.1,727,596,635/-, the value of the plaintiff‟s work assessed at 20% of the

certified value would be worth Rs.345,519,327/- whereas the value of the

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.14 of 31 defendant‟s work at 80% of the certified value would be equivalent to

Rs.1,382,077,308/-. Out of the amount of Rs.94,35,74,429/- received from

the defendant no.5, value of the 20% work executed by the plaintiff has

been computed by the defendants at Rs.188,714,886/-. The defendants

have contended that upon deduction of management fee of 23% of the

amount received from the defendant no.5 in terms of the agreement

between the parties, the plaintiff was entitled to payment of only

Rs.145,310,462/-.

37. It is an admitted position before this court that the plaintiff had

addressed e-mails dated 31st October, 2010; 22nd November, 2010 and 1st

December, 2010 to the defendant no.1 seeking payment. The defendant

no.1 has admittedly responded to the same by way of e-mail dated 31st

October, 2010 pointing out that the defendant no.5 had so far paid only

about 50% to 60% to it till date. This e-mail also records that there are

many suppliers and contractors whose payments are to be settled. The

plaintiff was called upon to work with the representatives of the defendants

to impress upon the defendant no.5 to make the balance payment.

38. The defendants have complained that faced with harassment and

pressure from the plaintiff by e-mails and communications demanding

more payments, even though no amounts had been released by the

defendant no.5 after 18th October, 2010, the defendants were pressurised

into releasing an additional amount of Rs.2.00 crores to the plaintiff on 26 th

December, 2010 with the understanding that the same would be adjusted

in the future payments with the plaintiff. It is the submission of the

defendants that this amount is excess payment having regard to the fact

that the defendants have not received any such payment from the

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.15 of 31 defendant no.5.

39. It is noteworthy that in an e-mail sent as late as on 22nd November,

2010, the plaintiff has nowhere suggested that the defendants were

siphoning off funds or were running away with monies to avoid making

payment to the plaintiff.

On the contrary, the plaintiff admits a second e-mail dated 1st

December, 2010 that as late as on 1st December, 2010, it has received

payment of a sum of Rs.2.00 crores from the defendant no.1. While

aknowledging the receipt of the said amount, the plaintiff makes not even a

remotest suggestion that the defendants are siphoning off funds or are

running away from this country. Merely because the plaintiff has expressed

urgency for its claimed payments would not ipso facto manifest any mala

fide on the part of the defendants.

40. Perusal of the Consortium Agreement dated 19th December, 2009 and

the Addendum dated 1st June, 2010 would show that the plaintiff and

defendant nos.2 & 3 were entitled to the stated amounts in the

shareholdings/percentage/ratio of 20%, 60% and 20% respectively. The

plaintiff has admittedly received amounts towards its share, though there

is a dispute on totals. The plaintiff does not state that defendant nos.2 & 3

would not be entitled to their percentage share out of the amount received

from defendant no.5.

41. Apart from a bald allegation that sums of money have been

transferred from the bank account of the defendant no.1 to the account of

defendant no.3, no details at all have been furnished by the plaintiff on

record. The plaintiff has nowhere stated that amounts paid to defendant

nos.2 & 3 from the account of defendant no.1 are beyond their entitlement

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.16 of 31 under the Consortium Agreement dated 19th December, 2009 and the said

Addendum.

42. In any case, the plaintiff in para 7 of IA No.16916/2010 has stated

that the amounts have been paid by the plaintiff and defendant no.1 to the

defendant no.3- a company incorporated under Indian laws.

43. It is an admitted position that the plaintiff has received the amount of

Rs.165,310,467/-. The defendants have submitted that based on the above

accounting, the plaintiff has already been overpaid to the extent of

Rs.20,000,005/- (being a sum of Rs.2.00 crores).

44. The suit claim is premised on calculations effected by the plaintiff and

a decree for recovery of the amount of Rs.6,99,24,861/- has been sought.

45. The defendants have contended that the plaintiff has no absolute

entitlement to the suit claim or to the claim of further amounts from the

defendants. The plaintiff was required to satisfactorily execute the work

which was assigned to it. It has been vehemently urged that plaintiff has

failed to complete the work successfully and that the defendant no.5 has

not made further payments to the defendants on account of complaints

with regard to the generators supplied by the plaintiff having been faulty

which it has alleged has caused loss and damage to the lighting equipment

and installations supplied by third party. It is submitted that in this

background, an amount of Rs.7,84,022,206/- has been withheld by the

defendant no.5 of which 80% would be falling within the defendant‟s scope

of work.

46. Apart from the complaint with regard to the quality of work performed

by the plaintiffs, the defendants have urged that the plaintiff is also in

breach of Section 13.3 of the Consortium Agreement which prohibits the

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.17 of 31 members of the consortium in terms that "No JV member will be permitted

to negotiate directly or indirectly with Delhi 2010 without the prior written

consent of the members of the board of the JV. Such negotiations to be

solely carried out by the Common Representatives, who shall have to

report to the Board of JV". The plaintiff is stated to have ignored this

restriction and has contracted directly with the defendant no.5 for tentage

in August & September and entered into a contract for the value of Rs.5.00

crores. The defendants have contended that as a result of the contract bid

by the plaintiff, it had undercut the defendant no.1 in its bid for obtaining

such contract.

47. A grievance has been made on behalf of the defendants that despite

the admitted non-receipt of a large trench of over Rs.78 crores from the

defendant no.5; amounts admittedly being due to third parties; complaints

against the plaintiff‟s work by the defendant no.5, the plaintiff was still paid

the sum of rupees two crores which it was not entitled to. It is urged that

on 1st of December, 2010, the present suit was filed by the plaintiff on 10 th

December, 2010 on vague and unsubstantiated pleas without any cause to

do so. The defendants have expressed strong grievance in respect of filing

of the present suit by the plaintiff on the 10th December, 2010 even though

there is no variation in position with regard to receipt of payments from the

defendant no.5.

48. As on date the plaintiff claims the amount of Rs.6,99,24,861/- while

the defendants are claiming excess payment to the plaintiff of Rs.2.00

crores and are disputing its entitlement to the suit claim. The plaintiff is

entitled to receipt of payment only upon and out of payments being made

to the defendant no.1 by the defendant no.5.

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.18 of 31

49. Mr. Sandeep Sethi, learned senior counsel for the plaintiff, however,

submits that the defendant no.1 has huge liability of tax. It is contended

that the order dated 14th December, 2010 requires to be confirmed.

50. In regard to the tax liability, the defendants have stated that they

have duly paid service tax on 10.3% on the total amount received from

the defendant no.5. It has also been stated that the TDS which was

deducted on payments made to the plaintiff by the defendants stands

deposited with the Government authorities. The tax receipt/challans,

showing payment of the service tax and deposits of TDS have been placed

on record which supports the deposits. The plaintiff has generally denied

these averments and challenged documents on the plea that they are

specious and incorrect. It is vaguely stated that tax has "not been paid in

toto" without stating as to what is the payable tax liability.

51. The plaintiff has placed a statement of what it considers to be total

liabilities of the defendant no.1. The information set out by the plaintiff

notices that tax stands deducted at source by the CWGOC-defendant no.5

herein, to the extent of Rs.2.00 crores before its payments to the plaintiff.

The plaintiff pleads that the consortium was in the nature of a partnership,

does not dispute active involvement with its business and affairs, yet all its

pleadings are eloquent by their silence on all material and essential

details. No basis or details to support the contention that amounts are

due from the defendant no.1 towards Income Tax or Advance Tax is

disclosed.

52. On the contrary, the defendant no.3 have placed before this court

documentation to support payment of Rs.1.00 crore towards advance tax

in December, 2010. It is stated that further advance tax would be payable

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.19 of 31 on 15th March, 2011 and the income tax return as per law would require to

be filed in October, 2011. It is explained that in case the balance amount

of Rs.78.00 crores is not received from the defendant no.5, the defendant

no.1 would have suffered a loss of Rs.78.00 crores. The submission is

that in such an eventuality, the defendant no.1 would be filing a loss

return. Then, instead of tax liability even the advance tax which has been

deposited, would be required to be refunded to the defendant no.1

53. So far as dues of income tax authorities are concerned, the plaintiff is

stated to have informed the Income Tax department by letter dated 16 th

November, 2010 that the plaintiff company should not be made liable for

tax liability on account of profits made by the defendant no.1 consortium.

No action by the tax authorities despite receipt of this communication is

pointed out.

54. The plaintiff has also made a bald statement that certain payments

are expected to be made towards vendors and sub-contractors. There is

not even a whisper to suggest specific dues on this count anywhere in the

plaint. The plaintiff has also not placed a single claim on record.

It is admitted that an amount of Rs.78.00 crores of the defendant no.1

is lying in the hands of defendant no.5. The defendants state that this

amount could be utilised to discharge any liability qua third parties.

55. I also find substance in the contentions of Mr. V.P. Singh, learned

senior counsel on behalf of the defendant nos.1 & 3 that their bona fide

are made out from the fact that they have made payments of Rs.14.00

crores and odd as well as the payment on 1st December, 2010 to the tune

of Rs.2.00 crores to the plaintiff from the amounts received so far from the

defendant no.5. So far as the suit claim is concerned, the same is yet to

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.20 of 31 be adjudicated upon.

56. So far as the grant of injunction is concerned, the principles thereof

are well settled. Three essential ingredients have to be satisfied for grant

of ad interim injunction under Order 39 of the CPC. The plaintiff is

required to establish a prima facie case; that grave and Irreparable loss

and damage would enure to it in case interim protection was not granted

and that balance of convenience, interests of justice and equity are in its

favour.

57. The term "prima facie case", is not statutorily defined. The same,

however, has been construed by this court in authoritative and judicial

pronouncements. In the pronouncements of H.L. Anand, J on 23rd May,

1973 reported at 1973 RLR 542 Gopal Krishan Kapoor Vs. Ramesh

Chander, the court considered several prior judicial pronouncements and

observed as follows:-

"9. The terms "prima facie" and "prima facie case" are not defined in any statute and although no attempt has been made to encase these terms within the confines of a judicially evolved definition or to evolve an inflexible formula for universal application, the terms have been judicially interpreted to mean a case which is not bound to fail on account of any technical defect and needs investigation.

xxx xxx xxx

18. On a consideration of the ordinary meaning of the term 'prima facie' and the trend of judicial pronouncement it appears to me that "prima facie case" would mean a case which is not likely to fail on account of any technical defect and is based on some material which if accepted by the tribunal would enable the plaintiff to obtain the relief prayed for by him and would, thereforee, justify an investigation.

19. The function of the Court when called upon to consider if the plaintiff has a prima facie case for the

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.21 of 31 grant of an interim protection or not is to determine the limited question if the material placed before the Court would require investigation but it is not open to the Court to either subject the material to closer judicial scrutiny for the purpose of deciding if on account of any inherent characteristics of the situation or the probabilities, the plaintiff may not succeed in his contention. Such an investigation would be clearly a transgression of the limits of the functions of the Court and would be both unreasonable and unfair because the suit being at a preliminary stage, the plaintiff has had no opportunity to support his contention by evidence and reinforce the material brought by the plaintiff to the Court by additional evidence and to do that would amount to pre-judging the case of the plaintiff."

58. The question of balance of convenience and equity were considered

by the learned Judge in a later pronouncement reported at 1976 RLR 1

Gurmukh Singh Vs. M/s Inderprasth Finance Co., in which the court

observed that:-

"11. xxx The proceedings in the court of law do not merely involve the high sounding principles and provisions of law but human element as well and such an element must be given its due weight in considering the question of balance of convenience and equities."

59. The only premise for the reliefs of injunction in the present case as

well as the order of attachment before judgment prayed for by the plaintiff

is that it has "reason to believe" and "apprehension that the defendants

would siphon off funds" without anything more.

60. The claim of the plaintiff so far as the payment already received from

the defendant no.5 is concerned, the same is determinate. The plaintiff

has prayed for a determined sum of money. In this background, it is not

possible to hold that the plaintiff shall suffer irreparable loss and damage

in case interim protection was not granted.

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.22 of 31

61. It is also trite that a suit cannot be decreed by an interim order. As

noticed above, no cause of action qua amount not received by the

defendant no.1 has arisen and obviously cannot form the subject matter of

the present suit. I, therefore, find substance in the contentions of Mr. V.P.

Singh, learned Senior Counsel for the defendants that the plaintiff has

failed to make out any of the requirements for grant of an order of interim

injunction.

62. It is now necessary to consider the prayer made by the plaintiff for

the order of attachment of the defendant‟s assets before judgment. An

order of attachment before judgment is a serious matter and is not to be

lightly made. Mr. V.P. Singh, learned senior counsel for the defendants

has in this regard, placed reliance on the pronouncement in 2005 (2)

ARBLR 404 (Delhi) Uppal Engineering Limited Pvt. Ltd. Vs. Cimmco

Birla Limited wherein the following principles have been laid down:-

"12. Now coming to the question as to whether the petitioner has been able to make out a prima facie case entitling him for relief claimed by him it may be noticed at once that the relief sought by the plaintiff is in the nature of attachment before judgment or pre-award attachment. No doubt that such a pre-award attachment in arbitration is common to many legal systems. In French law it is known as saisie conservatoire which literally means a 'conservative seizure' or 'a seizure of assets so as to conserve them for the creditor in case he should afterwards get judgment.' In UK, Lord Denning gave this procedure a fashionable name- Mareva injunction. In the parlance of arbitration law, it is usually called 'pre-award attachment.' This remedy has been available in India from the inception of the Code of Civil Procedure 1908. The order of attachment, before judgment, is passed to ensure the availability of such property at the time of execution of a decree. The procedure relating to 'attachment before judgment' is contained in Order 38, Rule 5 to 13 in the First Schedule to the Code of Civil Procedure. Before a person is entitled to an order of attachment before judgment Rule 5 requires the plaintiff to prove that the following circumstance exists:

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.23 of 31

(i) the defendant is about to dispose of the whole or any part of his property.

(ii) the defendant is about to remove the whole or any part of his property from the local limits of the jurisdiction of the Court;

(iii) the defendant is intending to do so to cause obstruction or delay in the execution of any decree that may be passed against him. Vague and general allegations that the defendant is about to dispose of the property."

13. It is well led that an order of attachment before judgment is a drastic remedy and the power has to be exercised with utmost care and caution as it may be likely to ruin the reputation of the parties against whom the power is exercised. The Court must act with utmost circumspection before issuing an order of attachment and unless it is clearly established that the defendant, with intent to obstruct or delay the execution of the decree that my be passed against him, is about to dispose of whole or any part of his property. An attachment before judgment is not a process to be adopted as a matter of course because the suit is yet to be tried and the defense of the defendant is yet to be tested. At that juncture the relief which is extraordinary, could be granted only if the conditions for its grant stands satisfied."

63. On the issue of an order of attachment before judgment under Order

38 Rule 5 of the CPC, in (2008) 2 SCC 302 Raman Technology and

Process Engineering Co. & Anr. Vs. Solanki Traders, the Supreme

Court has held as follows:-

"4. The object of supplemental proceedings (applications for arrest or attachment before judgment, grant of temporary injunctions and appointment of receivers) is to prevent the ends of justice being defeated. The object of Order 38 Rule 5 CPC in particular, is to prevent any defendant from defeating the realization of the decree that may ultimately be passed in favour of the plaintiff, either by attempting to dispose of, or remove from the jurisdiction of the court, his movables. The Scheme of Order 38 and the use of the words 'to obstruct or delay the execution of any decree that may be passed against him' in Rule 5 make it clear that before exercising the power under the said Rule, the court should be

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.24 of 31 satisfied that there is a reasonable chance of a decree being passed in the suit against the defendant. This would mean that the court should be satisfied that the plaintiff has a prima facie case. If the averments in the plaint and the documents produced in support of it, do not satisfy the court about the existence of a prima facie case, the court will not go to the next stage of examining whether the interest of the plaintiff should be protected by exercising power under Order 38 Rule 5 CPC. It is well-settled that merely having a just or valid claim or a prima facie case, will not entitle the plaintiff to an order of attachment before judgment, unless he also establishes that the defendant is attempting to remove or dispose of his assets with the intention of defeating the decree that may be passed. Equally well settled is the position that even where the defendant is removing or disposing his assets, an attachment before judgment will not be issued, if the plaintiff is not able to satisfy that he has a prima facie case.

5. The power under Order 38 Rule 5 CPC is a drastic and extraordinary power. Such power should not be exercised mechanically or merely for the asking. It should be used sparingly and strictly in accordance with the Rule. The purpose of Order 38 Rule 5 is not to convert an unsecured debt into a secured debt. Any attempt by a plaintiff to utilize the provisions of Order 38 Rule 5 as a leverage for coercing the defendant to settle the suit claim should be discouraged. Instances are not wanting where bloated and doubtful claims are realised by unscrupulous plaintiffs, by obtaining orders of attachment before judgment and forcing the defendants for out of court settlements, under threat of attachment.

6. A defendant is not debarred from dealing with his property merely because a suit is filed or about to be filed against him. Shifting of business from one premises to another premises or removal of machinery to another premises by itself is not a ground for granting attachment before judgment. A plaintiff should show, prima facie, that his claim is bonafide and valid and also satisfy the court that the defendant is about to remove or dispose of the whole or part of his property, with the intention of obstructing or delaying the execution of any decree that may be passed against him, before power is exercised under Order 38 Rule 3 CPC. Courts should also keep in view the principles relating to grant of attachment before judgment (See -- Prem Raj Mundra v. Md. Maneck Gazi MANU/WB/0033/1951 : AIR1951Cal156 , for a clear summary of the principles.)"

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.25 of 31

64. For the purposes of passing an order of attachment before judgment

under Order 38 Rule 5 of the CPC, in AIR 2008 SC 1170 Rajendran &

Ors. Vs. Shankar Sundaram & Ors., it was held that the court is

required to form a prima facie opinion at the stage of consideration of the

prayer by the plaintiff. It was observed that the court need not go into the

correctness or otherwise of all the contentions raised by the parties.

65. It is, therefore, well settled that the order for attachment for

judgment is not to be made simply because a suit is filed. The present

case is also not one in which the defendants are not raising issues which

would require adjudication. In any case, there would be no warrant for

attachment of the bank accounts of defendant nos. 2 & 3 inasmuch as the

plaintiff is seeking relief of payments from the defendant no.1.

66. The expressed apprehensions of the plaintiff are based on the solitary

plea that the defendant nos.2 & 3 are foreign companies and are

siphoning of monies abroad. In this regard, a reference can usefully be

made to the pronouncement of this court reported at 139 (2007) Delhi

Law Times 55 (DB) Rite Approach Group Ltd. Vs. Rosoboronexport

relevant paras whereof read as follows:-

"4. Learned Single Judge has noted that the number of helicopters and their models and that the supplies made to the Ministry of Home Affairs did not tally with the agreement between the appellant and M/s Russian Technologies, which was in respect of 16 helicopters to be supplied to Ministry of defense. Moreover, the Ministry of defense had in the agreement specifically stipulated that there shall be no agent for the purpose of intercession, facilitation or for in any way recommendation to the Government of India or any of the functionaries of the Government. Learned Single Judge further noticed that the respondent is a State owned undertaking of the Government of Russia and thereforee has sufficient assets to satisfy any decree in favor of the appellant. Lastly, it was observed that

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.26 of 31 provisions of Order 38 Rule 5 of the Code of Civil Procedure, 1908 (hereinafter referred to as the Code, for short) or conditions stipulated therein can be read into Section 9 of the Act but the strict preconditions specified in the said provision were not satisfied in the present case. Learned Single Judge relied upon the case of Global Co. v. National Fertilizers Ltd. reported in 76(1998) DLT 908 = AIR 1988 Delhi 397 and an unreported judgment of the Bombay High Court in the case of National Shipping Co. v. Sentrans Industries Limited, in Appeal No. 852/2003.

xxx xxx xxx

6. The appellant is based in Singapore and Austria. The respondent is a company operating and having its registered office in Russia. Without examining and going into the question whether injunction can be issued on an application under Section 9 of the Act by the Courts in India, it may be noticed that the Court of Appeal in the case of Mareva v. International Bulkcarriers (supra) had held that freezing injunction should not be granted unless a person has a legal or equitable right, it appears that a debt is due and owed and there is danger that the debtor may dispose of his assets before the judgment is passed so as to defeat the decree which may be passed. Injunction order even as per the Court of Appeal can be issued in extraordinary circumstances. Mareva or freezing injunction is passed when there is evidence or material to show that the debtor is acting in a manner or is likely to act in a manner to frustrate subsequent order/decree of the court or tribunal. The Court thereforee freezes the assets of the debtor to prevent the assets from being dissipated, to prevent irreparable harm to the creditor. It prevents a foreign defendant from removing his assets from the jurisdiction of the court. It is like and akin to "attachment before judgment" and conditions mentioned in the said provision should be satisfied before freezing junction order is passed. (See Formosa Plastic Corporation Ltd. v. Ashok Chauhan reported in 76(1998) DLT 817 and Uppal Eng. Co. (P) Ltd. v. Cimmco Birla Ltd. reported in 121(2005)DLT539. The respondent-company is owned by Russian Government and there is no such allegation that the respondent company is trying to defeat and play a fraud by moving/transferring its assets. We agree with the reasoning given by the learned single judge."

67. It is well settled that the mere fact that a party to a suit is a foreign

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.27 of 31 litigant without anything more, would ipso facto not entitle the other side

to an order of injunction or attachment before judgment. It is trite that no

order of injunction or attachment would be granted unless there is a real

danger that assets would be disposed of before the judgment is passed so

as to defeat any decree in the case.

68. The IA No.16917/2010 filed by the plaintiff seeking appointment of a

receiver with the direction to take over the custody, possession,

management and affairs of the defendant no.1 does not disclose any

substantive material other than a plea that defendant no.1 was liable to be

dissolved. On the other hand, the plaintiff itself has admitted that these

amounts are yet to be received by the defendant no.1 from the defendant

no.5.

69. In this background, it is apparent that the question of dissolution

would arise after settlement of accounts between the defendant no.1 and

defendant no.5 and clearance of liabilities claimed by the defendant no.1

from the defendant no.5. Merely because the prayer for dissolution has

been made, the same would by itself not entitle the plaintiff to any such

relief.

70. In Raman Technology and Process Engineering Co. & Anr.

(supra), the Supreme Court has held that merely having a just or valid

claim or a prima facie case would also not entitle the plaintiff to an order of

attachment before judgment unless he also establishes that the

defendants are attempting to remove or dispose of its assets with the

intention of defeating the decree that may be passed. It is equally well

settled that even where the defendants are removing or disposing its

assets, an order of attachment before judgment will not necessarily be

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.28 of 31 passed.

71. The defendants have complained that the order dated 14 th December,

2010 is being treated by their bankers as an order prohibiting them from

operating their bank accounts. Given the nature of claim of the plaintiff

and the rival contentions, coupled with the fact that payments have been

received by the plaintiff barely a week before filing of the suit and large

amounts are yet to be received by the defendant no.1 from the defendant

no.5, it has to be held that the plaintiff has also failed to make out a case

for an order of attachment before judgment.

72. At this stage, the plaintiff has quantified its claim against the

defendants at Rs.6,99,24,861/-. No cause of action has accrued in respect

of any other amount which have not been received by the defendant no.1

from the defendant no.5. No court fee on any such claim has been affixed

on the plaint.

73. Even with regard to the amount which the plaintiff is claiming and

payable from the payment already received, the defendants have pointed

out that disputes have been raised by the defendant no.5 with regard to

the nature of the work which was the responsibility of the plaintiff and

payments are blocked.

74. The Consortium Agreement and the Addendum certainly does not

permit the plaintiff to be a beneficiary of only payment without sharing any

of the liabilities.

75. The defendant nos.2 & 3 have urged at length that they have no

intention of absconding from justice or evading due process of law. These

defendants have placed material with regard to their standing and assets.

There is nothing to support the bald and vague averments in this regard

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.29 of 31 set up by the plaintiff.

76. The plaintiff has also not been able to support its allegations to the

effect that the defendants are likely to siphon off with funds or transfer

their assets with the intention of frustrating or defeating any decree which

may be passed by this court.

77. Undoubtedly, disputes have arisen and large sums of monies are

involved. A quantified amount cannot be asserted as irreparable loss and

damage justifying an interim injunction. Equities are required to be

balanced. While balancing the interest of the plaintiff, the functioning of

the defendants cannot be brought to a halt

78. It is noteworthy that so far as the suit claim is concerned, the plaintiff

does not even make a prayer for grant of interest on the amounts claimed.

79. The defendants have placed before this court statement of account of

the defendant no.1 maintained by the HSBC Bank-defendant no.4 herein

as on 31st December, 2010 which shows that the defendant no.1 had the

following holdings with the HSBC Bank:-

Deposits        Curr-     Account         Credit   Balance            INR
   &            ency      Number          Limit    (DR-Debit)         Equivalent
Investments     Unit                                                  (DR-Debit)
Current         INR       166-189464-              183,222,009.71     183,222,009.71



Fixed           INR       166-189464--               45,262,510.18     45,262,510.18



  TOTAL DEPOSITS AND INVESTMENTS                                  228,484,519.89

80. The defendant no.4-HSBC has filed communication dated 3rd January,

2010 disclosing the following amounts:

IA Nos.16915-16916/2010 & 1218/2011in CS (OS) 2528/2010 Page No.30 of 31 Account Name Account Number Available Balance (INR) M/s Pico Deepali Overlays 166-189464-001 69,924,861.00

Consortium

M/s Pico Event Marketing 051-827889-001 22,271,941.92

Ind. Pvt.Ltd.

81. The defendants have vehemently opposed grant of any interim order

in favour of the plaintiff. It has however been submitted by Mr. V.P. Singh,

learned senior counsel for the defendants on instructions that without

prejudice to their rights and contentions, the defendants are willing to

suffer an injunction to the extent that fixed deposit receipt in their account

with the defendant no.4 would not be encashed without further orders of

this court.

82. In view of the above discussion, it is directed as follows:-

(i) The defendant no.1 shall remain bound by the statement made on its

behalf and shall not withdraw the amount lying in the Fixed Deposit

Account No.166-189464--060 with the H.S.B.C. Bank-defendant no.4

herein with all accruals thereon till further orders of this court.