Woodpeckers India Pvt Ltd vs Raj Arora
2021 Latest Caselaw 2819 Del

*     IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                        Reserved on: 6th October, 2021
                                       Pronounced on: 11th October, 2021

+     CS(COMM) 330/2021

      M/S.WOODPECKERS INDIA PVT LTD          .....Plaintiff
                  Through: Mr. Mohit Chaudhary, Mr. Kunal
                            Sachdeva and Ms. Mahima Ahuja,
                            Advocates

                           Versus

      RAJ ARORA                                           ..... Defendant
                           Through:      Mr. Kailash Chandra, Advocate

CORAM:
HON'BLE MS. JUSTICE ASHA MENON

                                 ORDER

I.A.8649/2021 (by the plaintiff under Order XXXVIII Rule 5 read with Order XXXIX Rules 1 and 2 CPC)

1. The suit [CS(COMM) 330/2021] has been filed by the plaintiff against the defendant for recovery of Rs.2,27,93,523.76/- along with interest. The case, as set up by the plaintiff, is that the parties were having business transactions in plywood, wood, laminates, etc.. The defendant had been purchasing these semi-furnished goods from the plaintiff since 2001. A running account was being maintained and the plaintiff raised invoices from time to time upon the defendant for the goods/materials delivered to the defendant, who however, made only part payments. As a

result, a sum of Rs.2,27,93,523.76/- became the outstanding principal amount. It is submitted that the plaintiff made several efforts to recover the said outstanding payment from the defendant, but the defendant was intentionally, deliberately and willfully neglecting to pay the outstanding amount. Thus, the plaintiff was compelled to file the suit.

2. While directing issuance of summons to the defendant, this court vide orders dated 20th July, 2021 had issued interim directions as follows:-

"In the interest of justice, to prevent any irreparable loss to the plaintiff in view of the alleged apprehension expressed by the plaintiff that the defendant intends to frustrate the rights of the plaintiff, till the next date of hearing, the defendant is restrained from alienating the properties mentioned in paragraphs 4 (a), 4(b) and 4(c)."

3. Vide the instant application [I.A.8649/2021], the plaintiff has prayed that since the intention of the defendant was more than apparent that he was not going to discharge his obligations, the properties of the defendant, namely, (a) M/s. Raj Furniture, situated at 16/5, Main Mathura Road, Faridabad, Haryana- 121002, India, (b) Factory, situated at 16/6, Mohan Market, Mohan Babawali Gali, Faridabad, Haryana-121002, India, and (c) House No.1464, Sec-15, Faridabad, Haryana-121007, India, be attached. Further directions are sought to restrain the defendant and his family members, attorneys, etc., from creating any third party interest in these properties till the disposal of the suit.

4. Written statement to the suit and the reply to the instant application have been filed by the defendant. Mr. Kailash Chandra, learned counsel

for the defendant, submitted that out of these three properties, the property (a) i.e., M/s. Raj Furniture, situated at 16/5, Main Mathura Road, Faridabad, Haryana- 121002, India, did not belong to the defendant and drew attention of this Court to the tax receipts placed on the record at page 24 of the "Documents" filed on behalf of the defendant, to show that the said property belonged to Kanchan Arora and the address was actually 183A Friends Colony, and that the property i.e., (a) M/s. Raj Furniture, situated at 16/5, Main Mathura Road, Faridabad, Haryana- 121002, India, was inappropriately described. It was further submitted that the property (b) i.e., Factory, situated at 16/6, Mohan Market, Mohan Babawali Gali, Faridabad, Haryana- 121002, no doubt belonged to the defendant, but as regards property (c) i.e., House No. 1464, Sec-15, Faridabad, Haryana- 121007, the defendant had only 50% share therein.

5. Learned counsel for the defendant further submitted that the properties (b) and (c) i.e., the Factory and the House, were mortgaged with Punjab National Bank (earlier known as Oriental Bank of Commerce) at Neelam Chowk, N.I.T, Faridabad (Haryana) as a collateral security, and that there was no scope for the defendant to create any third party interest in these properties. Thus, learned counsel submitted that the interim directions restraining the defendant from creating any third party interest in these properties was liable to be vacated.

6. Learned counsel for the defendant also submitted that the suit of the plaintiff was time barred as the ledger produced by the plaintiff and placed at page 5 of the "Documents" filed by the plaintiff, starts from 29th January, 2012, and the last payment is stated to have been made on 28 th

January, 2019. While disputing that the cash payments as recorded in the said ledgers had been made by the defendant, at the same time, learned counsel submitted that the appropriation of these amounts to previous pending payments prior to 2012, would show that now the plaintiff has staked claim for amounts that were time barred. Interest for the last nine years has been claimed, but the court fees has not been paid. Further, the Statement of Truth was not in accordance with the prescribed format. Thus, the very suit of the plaintiff was not maintainable.

7. Learned counsel for the defendant has further argued that the suit was based on a cheque, which the plaintiff claims, had been handed over by the defendant to the plaintiff on 12th July, 2021. On that very day, the Resolution was passed for filing of the suit, which shows that the story set up by the plaintiff of a Settlement was false. Learned counsel further submitted, referring to the bank statements of M/s. Raj Woodart Interior Limited, that the cheque bearing No.062347 dated 12th July, 2021 had been issued for 'Raj Woodart Interior Limited' in the year 2015 and in the account statement at page 10 of the "Documents" of the defendant, this cheque number was mentioned without date and without amount. Thereafter, on 24th January, 2017 itself, the defendant had informed the bank to stop payment of this cheque. Subsequently, when the bank alerted the defendant of the presentation of the cheque, the defendant had lodged a police complaint on 16th/17th July, 2021. It was submitted that, therefore, the case, as set up by the plaintiff that on 12th July, 2021 the parties had met for settlement and the parties had actually settled, was a false story. Thus, learned counsel submitted that in the totality of the facts

and circumstances of this case, the plaintiff was not entitled to any injunction nor were these three properties of the defendant liable for attachment and hence, the application be dismissed.

8. In response, Mr.Mohit Chaudhary, learned counsel for the plaintiff, submitted that the ledger account was a running account and the last payment had been made on 28th January, 2019 and therefore, the suit was well within time. Learned counsel submitted that the defendant has not disputed that the parties had business transactions and that the defendant owed the plaintiff the outstanding payments. It was submitted that the police complaint was only an attempt to meet the litigation as and when commenced by the plaintiff, as the defendant clearly understood that the dishonour of the cheque would invite both civil and criminal actions against him. It was submitted that the property tax on which reliance was placed by the learned counsel for the defendant, had a totally different address and there was nothing on record which could show that Ms.Kanchan Arora was not related to the defendant. Thus, full disclosures had not been made. Learned counsel further submitted that the very fact that the properties (b) and (c) are mortgaged with Punjab National Bank (earlier known as Oriental Bank of Commerce) at Neelam Chowk, N.I.T, Faridabad (Haryana) against a loan, would show that if the defendant defaulted in repaying the loan, the Bank would have a first lien on the said properties, leaving the plaintiff in the lurch, with no means to recover any amount decreed in its favour in the present suit. Therefore, it was prayed that the attachment on these three properties may be continued.

9. As rightly pointed out by the learned counsel for the plaintiff, the defendant has not disputed having transactions with the plaintiff and having received goods and material against the invoices. With regard to the payments, an explanation has been sought to be offered that the same had been made not by the plaintiff but by the company. Prima facie, if the payments had been made in respect of the transactions entered into between the parties, the source of the payments would not be relevant. As regards the allegations that the plaintiff has merged various ledgers as the defendant had an office at 16/5, Mathura Road, Faridabad, Haryana- 121002 and another office at Milestone 16/5, Friends Colony, Mathura Road, Faridabad (Haryana), these are matters on which evidence would have to be produced, including to determine what amount is due and payable by the defendant to the plaintiff. Similarly, the use of the cheque at a belated stage, as alleged by the defendant, is also a matter of trial, as the plaintiff would also have the right to prove its case that the cheque was handed over by the defendant pursuant to a Settlement in a meeting at Delhi on 12th July, 2021. Thus, the plaintiff has disclosed a prima facie case in its favour.

10. It is also amply clear that "irreparable loss and injury" would be caused to the plaintiff if no interim protection is granted inasmuch as the two properties of the defendant are already under lien with Punjab National Bank (earlier known as Oriental Bank of Commerce) at Neelam Chowk, N.I.T, Faridabad (Haryana). In the event of a decree being passed in favour of the plaintiff, the decree cannot be rendered nugatory only because the defendant or his family members or attorneys, agents, etc.,

succeed in transferring the immovable property or encumber them in a manner that would defeat recovery. Thus, the "balance of convenience" also lies in favour of the plaintiff. The injunction causes no inconvenience to the defendant whereas equities require that the interests of the plaintiff are secured.

11. Accordingly, the interim injunction already granted on 20 th July, 2021 is made absolute till the disposal of the suit. The defendant is restrained from alienating the properties, namely, (a) M/s. Raj Furniture, situated at 16/5, Main Mathura Road, Faridabad, Haryana- 121002, India,

(b) Factory, situated at 16/6, Mohan Market, Mohan Babawali Gali, Faridabad, Haryana-121002, India, and (c) House No.1464, Sec-15, Faridabad, Haryana-121007, India, or creating further encumbrances and third party interests in the said properties, till the final disposal of the suit.

12. The application stands disposed of.

13. It is made clear that nothing contained in this order shall be a reflection on the merits of the case at the final disposal.

14. The order be uploaded on the website forthwith.

(ASHA MENON) JUDGE OCTOBER 11, 2021 s