Madras High Court
M/S. Karismaa Foundations Pvt Ltd vs G. Sree Vidhya on 20 January, 2025
Author: Senthilkumar Ramamoorthy
Bench: Senthilkumar Ramamoorthy
O.S.A. (CAD) No.73 of 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 20.01.2025
CORAM :
THE HON'BLEMR.K.R.SHRIRAM, CHIEF JUSTICE
AND
THE HON'BLEMR.JUSTICE SENTHILKUMARRAMAMOORTHY
O.S.A. (CAD) No.73 of 2024
and C.M.P.No.13606 of 2024
M/s. Karismaa Foundations Pvt Ltd.,
Rep by its Managing Director,
Having its Registered office at
No.34, 4 th Main Road, Gandhi Nagar,
Adyar, Chennai 20. .. Appellant
Vs
1. G. Sree Vidhya
2. Rakesh P.Sheth
3. Roshini P.Sheth
4. Premsai Chandur .. Respondents
Prayer : Appeal filed under Section 13(1A) of the Commercial Courts Act,
2015, against the judgment and decree dated 28.03.2024 passed in
A.No.622 of 204 in C.S.No.46 of 2018 on the file of original side of this
Court.
__________
Page 1 of 9
https://www.mhc.tn.gov.in/judis
O.S.A. (CAD) No.73 of 2024
For Appellant(s): Mr.Nithyesh Nataraj
for M/s.Vaibhav R.Venkatesh
For Respondent(s): Mr.R.Parthasarathy,
Senior Counsel
for M/s.Rahul Balaji for R1
: No appearance for RR 2 to 4
*****
JUDGMENT
(Judgment of the Court was delivered by
Senthilkumar Ramamoorthy, J.)
This appeal is directed against an order dated 28.03.2024 disposing
of an application for summary judgment under Order XIII-A of the Code of
Civil Procedure, 1908, as applicable to disputes under the Commercial
Courts Act, 2015, by directing the first defendant to deposit to the credit of
the suit a sum of Rs.70 lakhs within a period of two weeks from the date of
receipt of a copy of the order. The appellant is the first defendant in the
suit.
2. The appellant and the first respondent had entered into a
construction agreement dated 10.11.2014. Since disputes arose in relation
thereto, the first respondent filed the suit seeking a decree jointly and
__________
https://www.mhc.tn.gov.in/judis
severally against the defendants for a sum of Rs.1,95,96,780.60. After the
suit was filed, proceedings were initiated against the appellant before the
National Company Law Tribunal, Chennai. While those proceedings were
pending, the appellant and the first respondent entered into a
Memorandum of Compromise dated 14.09.2019. In terms thereof, the
appellant agreed to pay the first respondent a sum of Rs.1,25,00,000/- in
full and final settlement. In case of default, the Memorandum of
Compromise provided for the payment of additional interest at 10% per
annum. It also provided for dispute resolution by arbitration.
3. In view of the payment of a sum of Rs.55 lakhs in terms of Clause
2 of the Memorandum of Compromise, the first respondent applied for
amendment of the plaint so as to correspondingly reduce the suit claim.
Such amendment was allowed and an amended plaint was filed on
24.07.2023. The challenge to the order allowing the amendment came to
be rejected by the Hon'ble Supreme Court subsequently. In the amended
plaint, the first respondent prayed for a decree in a sum of
Rs.1,10,24,520.54. The application for summary judgment was filed in
these facts and circumstances seeking a summary judgment for the entire
__________
https://www.mhc.tn.gov.in/judis
suit claim.
4. Learned counsel for the appellant challenges the order of the
learned Single Judge primarily on the ground that the Court recorded the
finding that the first defendant/appellant herein had made out a probable
case for defending the suit. Once such a finding is recorded, the learned
counsel contends that a conditional order under Rule 7 of Order XIII-A
cannot be issued. By referring to the said rule, he submits that a
conditional order may be issued only if the Court concludes that it is
possible that a defence may succeed, but it is improbable that it shall do so.
Learned counsel also contends that an additional sum of Rs.45 lakhs was
paid by the appellant pursuant to the second Memorandum of Compromise,
which is also dated 14.09.2019. He also contends that the cause of action
has been fundamentally altered by the amendment and that interference is
warranted with the impugned order.
5. Learned senior counsel for the first respondent refutes these
contentions. He points out that learned Single Judge recorded a conclusion
that the sum of Rs.70 lakhs is an undisputed amount, which is due and
__________
https://www.mhc.tn.gov.in/judis
payable to the first respondent. In those circumstances, he contends that
paragraph 36 of the impugned order cannot be read in isolation.
6. Rule 6 of Order XIII-A confers wide powers on the Court hearing
an application for summary judgment to issue not only the orders listed
therein, but any other orders. This is evident from the use of the
inclusionary word “including” in sub-rule (1) of Rule 6. The Memorandum
of Compromise has been placed on record. Clauses (2) and (3) thereof are
as under:-
" 2. The Corporate Debtor shall discharge the said debt of the
Corporate Debtor the entire debt of Rs.1,25,00,000/- in
instalments in the following manner:
a. Rs.55,00,000/- on Order of Withdrawal by The
Hon'ble NCLT, Chennai vide DD numbers
i. 102847 for INR 20,00,000/- (Rupees Twenty
Lakhs only) drawn on Axis Bank dated 13 th day
of September 2019.
ii. 000910 for INR 35,00,000/- (Rupees Thirty-
Five Lakhs only) drawn on Axis Bank dated 13 th
September 2019.
b. Rs.70,00,000/- vide Cheque No.001112 dt.
31.03.2019 drawn on ICICI Bank Ltd.
3. The Parties hereby agree that the said sum is payment
would be Full and Final Settlement of all claims arising out of
__________
https://www.mhc.tn.gov.in/judis
the Agreement for construction dated 10.11.2014 including all
interest for delayed payments, litigation costs, etc. The Parties
agree that the said sum of Rs.1,25,00,000/- is a crystallized
sum of interest including all interest for delayed payments till
the actual date of payment and thus, it is agreed that the sum
of Rs.1,25,00,000/- includes a component of "time value for
money" as defined under section 5(8) of the IBC."
The admitted position is that the first instalment of Rs.55 lakhs was paid by
the appellant, but the second instalment of Rs.70 lakhs was not paid. This
was noticed by the learned Single Judge, who recorded as under in
paragraph 32:-
"32. Therefore, after giving due consideration to the fact
that the plea of limitation raised by the defendants is not a
moonshine defence as it requires further consideration for
which oral evidence of the parties is required, the plaintiff is
not entitled for a summary judgment as prayed for in this
application. However, considering the fact that Rs.70,00,000/-
is an un-disputed amount, the first defendant must be put on
terms for allowing them to defend the suit, on merits."
Thereafter, in paragraph 36, the Court also recorded as under:-
"36.Insofar as the limitation plea is concerned, the first
defendant has made out a probable case for defending the suit
on the ground that the suit is barred by limitation since the
amendment applications seeking amendment of the claim was
filed beyond the period of three years from the date of the
Memorandum of Compromise."
7. As correctly contended by the learned senior counsel for the first
respondent, paragraph 36 cannot be read in isolation and is required to be
__________
https://www.mhc.tn.gov.in/judis
read in the context of the entire judgment. When so read, the only
reasonable conclusion is that the Court held that the first defendant has a
probable case to defend the suit on the ground of the suit not being barred
by limitation. The Court did not conclude that the first
defendant/appellant herein has a probable case to defend the entire suit
claim. The direction to the appellant herein to deposit a sum of Rs.70
lakhs, which was construed as an undisputed amount by the learned Single
Judge, cannot be faulted in the facts and circumstances. It should also be
noticed in this connection that the learned Single Judge has recorded that
no opinion is being expressed on the merits of the respective contentions.
In the circumstances, we see no reason to interfere with the
impugned order. Hence, Original Side Appeal (CAD) No.73 of 2024 is
dismissed, without any order as to costs. Consequently, connected
miscellaneous petition also stands dismissed.
(K.R.SHRIRAM., CJ.) (SENTHILKUMARRAMAMOORTHY, J.)
20.01.2025
__________
https://www.mhc.tn.gov.in/judis
Index : Yes/No
NC : Yes/No
sra
THE HON'BLE CHIEF JUSTICE
AND
SENTHILKUMAR RAMAMOORTHY,J.
(sra)
To:
1. The Section Officer,
Original Side,
Madras High Court, Chennai.
__________
https://www.mhc.tn.gov.in/judis
20.01.2025
__________
https://www.mhc.tn.gov.in/judis
