Smt. Shakuntala Devi & Anr. vs Shri Pradeep Paliwal
2019 Latest Caselaw 2195 Del

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*      IN THE HIGH COURT OF DELHI AT NEW DELHI
                                          Date of Decision: 26th April, 2019
+                        CS (COMM) 1090/2018
       SMT. SHAKUNTALA DEVI & ANR.             ..... Plaintiffs
                    Through: Ms. Smita Maan, Mr. Vishal Maan,
                             Mr. R. S. Verma and Mr. Akash
                             Sehrawat,                Advocates.
                             (M:9899934315)
                    versus

       SHRI PRADEEP PALIWAL                         ..... Defendant
                     Through:         Mr. Rakesh Malhotra, Advocate.
                                      (M:9810239071)
                                      Inspector Nirbhay Kumar, EOW.
                                      (M:9818516989)
       CORAM:
       JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J. (Oral)

1. Inspector Nirbhay Kumar from Economic Offences Wing ('EOW'), Delhi Police is present in person with the original record. The parties are permitted to inspect the same. Status report has been submitted by the EOW. The same is taken on record and retained in a sealed cover with the Deputy Registrar (Original). Matter is passed over to enable inspection.

2. Inspection of the documents has been given to counsel for the Defendant. He has raised an issue only in respect of the third page of the cancellation deed where the name of the first witness along with the address was appearing at page 24, however, in the original deed produced by the Police only the signatures appeared. Otherwise both the parties agree that the contents of the said documents are identical. The original documents are

now returned to the EOW.

3. The present suit under Order XXXVII CPC has been filed seeking recovery of a sum of Rs.28,68,12,000/- along with pendente lite and future interest. The background of the suit is that the Plaintiff - Smt. Shakuntala Devi had entered into a Memorandum of Understanding ('MoU') dated 28th February, 2014 under which the Plaintiff had agreed to invest money in the business of granite mining in the lands belonging to Defendant - Shri Pradeep Paliwal. Accordingly, the Plaintiff had agreed to invest a sum of Rs.20 crores in the said business and pursuant to the said MoU being entered into, the Plaintiff had paid to the Defendant a sum of Rs.13.45 crores. The Defendant had an obligation to obtain a mining lease in respect of the said land, though for whatsoever reasons, the same did not fructify. Thereafter, a supplementary MoU was entered into between the parties on 20 th September, 2014 under which it is specifically acknowledged that Rs.13.45 crores has been paid by the Plaintiff and a sum of Rs.6.55 crores is yet to be paid. The payments were made through banking channels. The second MoU records that a mining lease has been applied for the said land in Bhilwara, Rajasthan and has been awarded and the mine would be operational within 90 days from the date of obtaining the environmental clearance. It is also represented that the said amount would earn profit of Rs.50 lakhs per month once environmental clearance was granted and accordingly, further Rs.3.15 crores was, in fact, paid by the Plaintiff vide the receipt dated 23 rd September, 2014.

4. However, the investment could not fructify, inasmuch as the environmental clearance for the said two lands was not given. Finally, in view of this position, the parties entered into a cancellation deed dated 25th

September, 2015, which is the contract on the basis of which the present suit under Order XXXVII CPC has been filed. The said contract entered into between the Plaintiff and Defendant finally recorded that the Defendant shall repay a sum of Rs.22,32,00,000/- to the Plaintiff and simultaneously the land, which was transferred in favour of Plaintiff, would be transferred back to the Defendant. The said cancellation deed also records that a sum of Rs.2 crores would be paid by the Defendant to Plaintiff on or before 31 st October, 2015.

5. The present suit under Order XXXVII CPC, accordingly, was filed on the ground that the amounts, as agreed in the cancellation deed, were not paid by the Defendant. The suit was registered as a summary suit. The Defendant entered appearance and a leave to defend application has been filed by the Defendant. On 11th February, 2019, an objection was taken in respect of non-filing of original documents. The Plaintiff had submitted that the original documents were in the custody of the EOW, which was also investigating the matter pursuant to the complaint filed by the Plaintiff, which was registered as FIR No.0144/2017. On 11th February, 2019 the following order was passed.

"The ACP concerned of the Economic Offences Wing of the Delhi Police is directed to place on record the status report of the investigation and further proceedings in FIR No. 0144/2017, P.S Economic Offences Wing, dated 2nd September, 2017 and also produce all the records containing the original documents on the next date of hearing. List on 26th April, 2019. Copy of this order be served by both the parties on the Economic Offences Wing (Office of the Jt. CP, Economic Offence Wing, Mandir Marg, Delhi). Dasti. Along with the notice a copy of

this order be attached."

6. Submissions have been heard on behalf of the parties. Ms. Smita Maan, ld. counsel appearing for the Plaintiff submits that the cancellation deed is the final document that was executed between the parties. Admittedly, the execution of the said deed is proved by three facts.

1) The issuance of two cheques of Rs.1 crore each by the Defendant in favour of the Plaintiff's husband, who is Plaintiff No.2.

2) The said two cheques bounced and an email and a hand written letter was issued in reply to the notice under Section 138 of the Negotiable Instruments Act,1881. In the said reply, the Defendant sought to replace the two cheques with one cheque as the first instalment of Rs.50 lakhs. She submitted that in the said reply, there is no challenge to the fact that the cancellation deed was executed.

3) The follow-up emails after the hand written letter dated 11 th December, 2015 written by the Defendant to the Plaintiff and the reply thereto also show that the cancellation deed has never been disputed.

7. She further submitted that the Plaintiff has always been ready and willing to transfer the land back to the Defendant and in fact, to this effect a notice was issued by the Plaintiff on 6th February, 2018 attaching therewith the draft GPA. The Defendant in his reply to the said notice did not challenge the execution of the cancellation deed but merely stated that the reason for issuance of cheque of Rs.2 crores is not bound to be disclosed. Further, it was alleged by the Defendant that the Plaintiff had failed to clear the accounts with the mining department. The Defendant, in effect, disputed

the liability under the cancellation deed.

8. In response to the submissions made by the Plaintiff, it is submitted by ld. counsel for the Defendant that the cancellation deed, which has been brought by the police official from the EOW, shows that the deed relied upon is not genuine. In fact, the copy of the cancellation deed filed on record contains the signature of Mr. Gajender Singh, with the name and address written alongside the signature, whereas the original deed does not have the name and address. It is further submitted by ld. counsel for the Defendant that the cancellation deed was executed under duress, which is evident from the fact that the admission was of receipt of Rs.16.18 crores but the Defendant has been made to agree to repay a sum of Rs.22,32,00,000/-. This itself proves the duress and coercion on the Defendant according to counsel.

9. It is further submitted by ld. counsel that the suit as framed is not maintainable as Plaintiff No.2 has no privity with the Defendant as he is not a signatory to any of the contracts between the parties. Ld. counsel also submits that the MoU and the supplementary MoU contain an arbitration clause and hence the civil suit is not maintainable. He further submits that the cancellation deed has reciprocal obligations, which are imposed on the Plaintiff. Since the Plaintiff has not complied with its obligations, she cannot seek recovery of the amount under the cancellation deed.

10. The Court has considered the submissions of the parties.

11. The first and foremost issue is about the genuineness of the cancellation deed. The original cancellation deed dated 25th September, 2015 has been brought before the Court by the police official from the EOW. The signature on the original document by the Defendant is not in dispute.

However, the issue that is being raised by the Defendant is that the copy placed on record is different from the original in the sense that the name of Shri Gajender Singh and his address appearing at page 24 of the documents do not appear in the original.

12. The Court has perused the original cancellation deed and the copy thereof, which is already placed on record. The signature of Defendant on the cancellation deed is admitted. The text of the cancellation deed as compared with the copy of the original is identical. The fact that in one of the copies the name of Plaintiff No.2 appears along with the address, does not in any way, obliterate the fact that the Defendant has signed the cancellation deed. Moreover, there are several circumstances which show that the cancellation deed and the execution thereof was, in fact, never disputed. The first being the issuance of two cheques in the name of Plaintiff No.2, who is the husband of Plaintiff No.1 - Smt. Shakuntala Devi, who is party to the cancellation deed. The said two cheques had been dishonoured due to insufficient funds and a further cheque was sought to be issued by the Defendant in favour of Plaintiff No.2 for a sum of Rs.50 lakhs. Further, in the emails exchanged between the parties dated 11th December, 2015, there is a clear reference to the cancellation deed. All these circumstances clearly point to the fact that the cancellation deed has, in fact, been executed. Further, the payment of more than Rs.16 crores has also not been disputed.

13. Coming to the issue of duress and coercion and the difference between the amount received and the amount agreed to be paid back is not a fact which supports the said argument inasmuch as the payment of Rs.16 crores was made sometime in 2014 and the deed of cancellation was

executed in 2015. The purpose of the said payments made by the Plaintiff, most of which were made through bank channels, was investment in land which had a prospect of mining. Further, there are representations by the Defendants that the Plaintiff would earn profits of more than Rs.50 lakhs per month. Thus, the repayment of Rs.22 crores cannot be said to be due to coercion and duress when admittedly, more than a sum of Rs.16 crores has been received by the Defendant. Further, even in the reply dated 2 nd March, 2018 to the notice issued by the Plaintiff, the Defendant does not challenge the execution of the MoU.

14. Insofar as the Order XXXVII CPC suit is concerned, though the cheque may have been issued in favour of Plaintiff No.2, since the cancellation deed is only between Plaintiff No.1 and Defendant, Plaintiff No.2 would not be entitled to any decree in the present suit.

15. The cancellation deed being an admitted document, ld. counsel for the Plaintiff submits that the Plaintiff is ready and willing to undertake all the reciprocal obligations, which are contained in the cancellation deed dated 25th September, 2015. In fact, even in the notice issued on behalf of Plaintiff, the Plaintiff has expressed readiness and willingness to transfer back the land to the Defendant.

16. The Defendant was also given the option by the Court to deposit the amount of Rs.22 crores for grant of conditional leave to defend, to which the ld. counsel for the Defendant submits that he has no instructions to deposit the said amount. The execution of the two MoUs is admitted. The cancellation deed is admitted. The amounts mentioned therein are admitted. There is only a feeble argument of coercion and duress which is not tenable. Under these circumstances, the suit of the Plaintiff is decreed for the sum of

Rs.22,32,00,000/- as mentioned in the cancellation deed along with simple interest @ 8% per annum from the date of first notice issued by the Plaintiff i.e. 6th February, 2018 till date. The Defendant is given time of three months to make the said payment. The Defendant, within the said period of three months, would issue notice to the Plaintiff, if he is ready with payment and the Plaintiff would make all arrangements for execution of the transfer of the land back to the Defendant. If no notice is issued by the Defendant within three months, simple interest @ 10% per annum on the decretal amount would be liable to be paid by the Defendant upon the expiry of three months, till the date of payment. Upon the notice being given by the Defendant, the Plaintiff would intimate the date of execution of documents in favour of the Defendant and the Defendant shall cooperate in the execution of the transfer of the documents. The Plaintiff is ready and willing to undertake whatsoever procedures are required for transfer of the land as per the applicable law.

17. The suit is decreed with costs. Let the cost statement be filed within four weeks. The suit and the pending I.As. are disposed of.

PRATHIBA M. SINGH JUDGE APRIL 26, 2019/dk