Delhi High Court
M/S Hbr Chemicals Pvt Ltd. vs Kailash Nath & Associates & Ors. on 10 October, 2018
$~9
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 10th October, 2018
+ CS (OS) 276/2014
M/S HBR CHEMICALS PVT LTD. ..... Plaintiff
Through: Mr. Sunil Verma and Mr. K. R.
Chawla, Advocates. (M:9811105226)
versus
KAILASH NATH & ASSOCIATES & ORS. ..... Defendants
Through: Mr. Sandeep Kumar, Advocate for D-
2 & 3. (M:9999684531)
CORAM:
JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J. (Oral)
1. The present suit for recovery has been filed by the Plaintiff seeking
recovery of a sum of Rs.2,09,13,750/-.
2. The brief background of the dispute is that the Defendant No.2 was
the owner of land measuring about 66.53 acres situated at Bara Hindu
Rao/Kishan Ganj, Delhi. Various agreements were entered into by
Defendant No.2 (DCM Ltd.) in respect of the said land. A tripartite
agreement dated 24th November, 1988 was entered into between Defendants
No.1 and 2 and Ansal Properties and Industries. As per this agreement,
DCM Ltd. appointed Defendant No.1 - Kailash Nath & Associates to jointly
undertake and execute the construction of flattened factories and residential
flats in the said project. None of the said agreements are subject matter of
the present suit.
3. The Plaintiff booked five flats measuring about 400 sq. ft. each in the
DCM Techno Plaza. The full consideration was paid for the said booking.
Five provisional booking agreements dated 20th December, 1995, 21st
December, 1995, 22nd December, 1995, 23rd December, 1995 and 26th
December, 1995 were entered into. The payments of the following sums
were made by the Plaintiff.
CHEQUE DATE OF AMOUNT DRAWN RECEIPT
NO. ISSUE PAID (Rs.) ON NO.
233685 20.12.1995 9,90,000/- State Bank of 1567
Saurashtra,
CP, New
Delhi
233686 21.12.1995 9,90,000/- State Bank of 1568
Saurashtra,
CP, New
Delhi
233687 22.12.1995 9,90,000/- State Bank of 1569
Saurashtra,
CP, New
Delhi
23688 23.12.1995 9,90,000/- State Bank of 1570
Saurashtra,
CP, New
Delhi
233689 26.12.1995 9,90,000/- State Bank of 1571
Saurashtra,
CP, New
Delhi
A total of Rs.49,50,000/- was paid by means of five cheques issued by the
Plaintiff. Pursuant to the payments being made, five agreements to sell dated
2nd April, 1997 were entered into and the flats were to be handed over to the
Plaintiff within a period of 66 months, which period ended in June, 2001.
4. Admittedly, the project did not take off and no construction was made
as there were disputes between Defendants No.1/2 and M/s Ansals Ltd. The
Plaintiff was informed of the said disputes, and the factum of the settlement
having taken place only vide letter dated 27th July, 2001. The Defendant
No.1 had collected a large sum of money from various persons including the
Plaintiff. The Plaintiff addressed letter dated 12th January, 2002 to
Defendant No.2 enquiring the status of its booking. While the Plaintiff
continued to follow up, it was informed that Defendant No.2 had entered
into an arrangement with Defendant No.3 wherein the entire land has been
transferred to DEIL Limited. The Plaintiff submits that the agreements to
sell dated 2nd April, 1997 were not honoured and accordingly since the
project may not even commence in the near future, it decided to file a
complaint under the Consumer Protection Act.
5. In the said complaint filed before the State Consumer Disputes
Redressal Commission, order dated 30th August, 2013 was passed
dismissing the complaint as the same was hit by Sections 21(1)(d)(ii) of the
Consumer Protection Act. In view of this order, the present suit has been
filed seeking recovery of the sums paid, along with interest.
6. In the written statement filed on behalf of Defendants No.2 and 3, the
main ground that is taken is of limitation. Apart from the same, various
justifications have been given to justify the delay in construction in the
construction of DCM Techno Plaza which was re-christened as Central
Square. Insofar as the factum of payment is concerned, the same is not
denied but it is submitted that there are other formalities etc. which have to
be completed Plaintiff. The execution of the agreements to sell dated 2nd
April, 1997 is not denied.
7. The suit was instituted on 18th January, 2014. Vide order dated 19th
April, 2017, a Learned Single Judge of this Court, while considering the
application filed under Section 14 read with Section 5 of the Limitation Act
and an application under Order VII Rule 11 filed by the Defendant observed
as under:
"Record shows that this suit has been filed on
20.11.2013. The cause of action in favour of the
plaintiff had accrued after 66 months of the agreements
entered into between the plaintiff and the defendants.
These agreements are of the year 1995 but defendant
No.1 having assured the plaintiff that the flats would
be constructed within the timeline of 66 months, this
period expired in June, 2001. On 12.01.2004, the
plaintiff preferred his remedy before the State
Consumer Commission. He filed a claim for the return
of his money which he had paid to defendant No.1 i.e. a
sum of Rs.49.50 lacs along with interest. Admittedly,
these proceedings remained pending before the State
Consumer Commission up to 01.10.2013 when they
were finally disposed of. The present suit has been
filed, at the cost of repetition, on 20.11.2013 i.e. within
less than two months from the date of the dismissal of
the proceedings before the State Consumer
Commission.
Under Section 14 of the Limitation Act, proceedings
which have been conducted bonafide in a Court which
does not have the jurisdiction may be excluded for the
purpose of limitation. The emphasis is on the
prosecution in good faith in a wrong jurisdiction. This
is essentially what has to be established and shown by
the plaintiff who seeks the benefit of Section 14. The
expression 'good faith‟ qualifies prosecuting of a
proceeding in a Court which is ultimately found to
have no jurisdiction; it is pursuance of a wrong remedy
in a wrong Court.
In Jugal Kishore (supra) where a suit for recovery was
bonafidely being prosecuted in a wrong forum i.e. the
Consumer Forum and the plaintiff had not approached
the Civil Court, the Bench of this Court was of the view
that the plaintiff should not be thrown out unheard;
benefit of Section 14 should have been awarded to such
a litigant who had filed his complaint before the
Consumer Forum but because of inherent lack of
jurisdiction, the Consumer Forum could not have
entertained his plaint. Learned counsel for the plaintiff
rightly points out that this judgment would be wholly
applicable to the scenario of the instant case.
This Court is of the view that the benefit of Section 14
of the Limitation Act i.e. the period spent by the
plaintiff in prosecuting the case in a wrong form which
exercise was bonafide and in good faith i.e. in wrong
Court should be excluded; if the said period is
excluded the suit of the plaintiff would be within time.
This Court notes that the judgments relied upon by the
defendant would not be applicable to the factual
scenario of the instant case. In both the aforenoted
judgments, the Court of the view that the proceedings
being preferred by the plaintiff were neither bonafide
and nor in good faith; there was a total absence of
good faith which was the reason why the benefit of
Section 14 of the Limitation Act had not been accorded
in favour of that litigant. In the instant case, the
version is otherwise. The plaintiff had filed
proceedings in the Consumer Forum within the period
of limitation i.e. on 12.01.2004 which period had to be
counted from June, 2001 (after the expiry of the period
of 66 months). There is nothing on record which could
suggest that the action of the plaintiff in filing his
complaint before the State Consumer Commission was
with no other intention but for the intent of making an
effort to recover his money which he had paid to
defendant No.1. This Court is of the considered view
that such a party cannot go unheard.
Accordingly, I.A. No.1843/2014 filed by the plaintiff
for condonation of delay is allowed.
As a necessary consequence, the application under
Order VII Rule 11 of the Code is dismissed."
8. As per the above order, the Plaintiff was given benefit of Section 14
of the Limitation Act during the period when it was pursuing proceedings
before the State Consumer Dispute Redressal Commission. Thereafter,
parties attempted settlement which did not work out.
9. The matter is listed for framing of issues. However, a perusal of the
pleadings shows that the fact that the Plaintiff had deposited the amounts for
booking of five flats is not disputed as per the pleadings. A perusal of the
response to paras 5 to 9 of the reply on merits shows that -
the payments have not been denied.
The execution of the booking agreements is not denied and the
agreement to sell is not denied.
However, the Defendant merely states as under:
"5-9 Contents of paras under reply are denied as
wrong and incorrect. Plaintiff be put to strict proof in
respect of averment regarding booking of five
units/flats in DCM Tecno Plaza and payment of full
consideration to defendant no.1. It is stated that a
bare perusal of copy of the alleged agreements to sell
dated 02.04.1997 reveal that consideration was not
paid in full and any averment to payment of full
consideration is false and mischievous. The averment
that defendant no.1 represented to the plaintiff that
there are no dues outstanding as against the
authorities concerned and that all formalities with
regard to the approvals, sanctioning of the plans etc.
have been completed is denied as wrong and
incorrect."
10. During the course of the arguments, learned counsel for the Defendant
submitted that though the tower in which the Plaintiff had booked the flats is
not available, there is another tower in which the Defendants are willing to
allot space to the Plaintiff.
11. The present being a commercial dispute, it is not necessary that every
suit has to go to trial. The stands of the respective parties clearly show that
the payments are being admitted, the factum of non-allotment of the flats
being admitted, the agreement to sell and other documents are being
admitted, no useful purpose is served in sending the matter to trial.
12. In the written statement, the Defendant has tried to justify the delay in
the allotment by giving the entire chronology of events leading to the project
DCM Techno Plaza becoming Central Square. The Defendants admit that
the completion certificate for Plaza-2 has been applied for but is still
pending. Thus, the Defendant seeks to justify the non-allotment for such a
long period.
13. The learned counsel for the Plaintiff submits that his client is no
longer interested in taking space in the alternate tower being offered by the
Defendants inasmuch as the Plaintiff had made the booking for the purpose
of office premises and the Plaintiff has already taken alternate premise. The
Defendants have enjoyed the sum of Rs.49,50,000/- paid by the Plaintiff
since the year 1995 i.e. for 23 years. Admittedly, the Defendants ought to
have given an offer to the Plaintiff to take refund of the amount which they
have enjoyed for 23 years. But the Defendants chose to continue to litigate
with the Plaintiff without any basis. The Defendants' conduct is mala fide
and dishonest to say the least.
14. There being no issue requiring oral evidence, in the present case,
parties were heard finally in the matter. The facts set out above demonstrate
that the payment of the Plaintiff is liable to be refunded by the Defendants.
However, the Defendants are also liable to pay interest on the sum paid by
the Plaintiff. The suit is decreed in the sum of Rs.49.5 Lakhs along with
interest @ 8.5 % per annum from 2005 to 2015 and with interest @ 7.5 %
per annum from 2015 to 2018. The said payment shall be made within a
period of eight weeks failing which an interest @ 12% per annum on the
decretal amount till realisation shall be liable to be paid.
15. In the facts and circumstances of the present case, costs of Rs.50,000/-
are also imposed on the Defendants, to be paid to the Plaintiff within eight
weeks.
16. The suit is disposed of.
PRATHIBA M. SINGH
JUDGE
OCTOBER 10, 2018/dk/Rahul
