Edgecliffe Developers Llp vs M/S Neelamber Associates Private ...
2017 Latest Caselaw 4689 Del

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*      IN THE HIGH COURT OF DELHI AT NEW DELHI

+      CS(OS) 2858/2015

       EDGECLIFFE DEVELOPERS LLP                ..... Plaintiff
                    Through: Ms. Padma Priya, Advocate.

                          versus

       M/S NEELAMBER ASSOCIATES
       PRIVATE LIMITED                             ..... Defendant
                     Through: Ms. Gurkamal Hora Arora, Advocate for
                              applicant-defendant.

%                                  Date of Decision: 01st September, 2017

       CORAM:
       HON'BLE MR. JUSTICE MANMOHAN

                  JUDGMENT

MANMOHAN, J (Oral):

I.As. 9961-9963/2017

1. Present application being I.A. 9961/2017 has been filed by the applicant-defendant under Order XXXVII Rule 4 read with Order IX Rule 13 and Section 151 CPC for setting aside judgment and decree dated 24 th February, 2016 and 02nd June, 2016.

2. Learned counsel for applicant-defendant states that the entire transaction of subscription of equity shares and issuing of cheques by plaintiff was a sham transaction carried out by Mr. D.K. Gupta, one of the present Directors of the defendant, in collusion and in connivance with

partners of plaintiff.

3. It is contended that the plaintiff and Mr. D.K. Gupta taking advantage of the position of Mr. D.K. Gupta as the Director and being in effective and complete control and management of the defendant company, colluded with each other and played a fraud upon the defendant company and its shareholders to usurp the properties of the defendant company under the garb of the said judgment and decree passed by this Court. She states that the said 'modus operandi' has been adopted by the plaintiff and Mr. D.K. Gupta in a number of cases.

4. The present application is accompanied by an application being I.A.9963/2017 seeking condonation of delay of 524 days.

5. This Court is of the opinion that as no appearance was entered by the defendant within a period of ten days of summons being served, this Court had no other option under Order XXXVII Rule 2(3) CPC to decree the suit. After all, once a company has been served, it cannot argue that each and every Director of the company or its shareholder should be separately served. 'Internal management or mismanagement' as it were to be appropriately called cannot be a ground to revoke a decree under Order 37 Rule 4 CPC.

6. Further, in response to a pointed question by this Court, learned counsel for applicant-defendant admitted that neither any criminal nor any civil proceeding or any case under the Companies Act had been filed by the defendant company against Mr. D.K. Gupta till date.

7. In the opinion of this Court, if Mr. D.K. Gupta has played a fraud upon the defendant company and its shareholders, the defendant is not remediless. It must file appropriate proceedings against its Director Mr.

D.K. Gupta. Since that has not been done till date and Mr. D.K. Gupta continues to be the Director, the 'version/story' put up by the applicant- defendant inspires no confidence. Consequently, the present applications are dismissed both on merits as well as on the ground of delay.

MANMOHAN, J SEPTEMBER 01, 2017 js