Telangana High Court
M/S. Ncc Limited, Formerly Nagarjuna ... vs National Institute Of Technology Nit on 29 April, 2025
THE HON'BLE JUSTICE MOUSHUMI BHATTACHARYA
AND
THE HON'BLE JUSTICE B.R.MADHUSUDHAN RAO
C.R.P.Nos.2714, 2715 and 2716 of 2024
Mr. Avinash Desai, learned Senior Counsel representing Mr. Mohammed Omer
Farooq, learned counsel for the petitioner.
Sri T. Mahender Rao, the learned Standing Counsel for NIT, appearing for the
respondent.
COMMON ORDER:
(Per Hon'ble. Justice Moushumi Bhattacharya)
1. The three Civil Revision Petitions arise out of a common
order dated 05.08.2024 passed by the Special Judge for Trial
and Disposal of Commercial Disputes, Rangareddy District at
L.B. Nagar, in three Execution Applications - E.A.No.7 of 2024
in C.E.P.No.16 of 2023, E.A.No.8 of 2024 in C.E.P.No.17 of 2023
and E.A.No.9 of 2024 in C.E.P.No.18 of 2023 respectively.
2. The petitioner is the plaintiff/decree-holder and the
respondent is the defendant/judgment-debtor.
3. The three E.As were filed by the petitioner under Rule 232
of the Civil Rules of Practice for withdrawing an amount of
Rs.21,91,53,174/- deposited by the respondent/Judgment
Debtor subject to the petitioner furnishing acceptable security
in the Trial Court.
4. The brief facts leading to the filing of the present CRPs are
as follows:
5. The petitioner filed three Commercial Original Suits - COS
Nos.25, 26 and 27 of 2021 - against the respondent for payment
for work done by the petitioner. The Suits were decreed by the
Commercial Court in favour of the petitioner on 01.06.2023.
The Commercial Court directed the respondent to pay
Rs.3,58,61,671/-, Rs.1,18,51,315/- and Rs.13,60,97,344/-
along with interest @ 12% per annum pendente lite and @ 6%
per annum post-judgments till the date of realization in COS
Nos.25, 26 and 27 of 2021 respectively.
6. The petitioner filed three Execution Petitions -
C.E.P.No.17 of 2023 in C.O.S.No.25 of 2021, C.E.P.No.18 of
2023 in C.O.S.No.26 of 2021 and CEP No.16 of 2023 in
C.O.S.No.27 of 2021 on 20.09.2023 for enforcement of the
judgments passed in the three Suits.
7. The respondent filed First Appeals (Commercial Court
Appeals) on 30.10.2023 i.e., COMCA Nos.47, 48 and 49 of 2023,
challenging the judgments and decrees in C.O.S.Nos.25, 26 and
27 of 2021.
8. By orders dated 22.11.2023, the High Court granted stay
of execution of the judgments and decrees subject to the
condition of depositing of 50% of the decretal amounts.
9. The respondent filed a Memo dated 08.01.2024 in the
Commercial Court in CEP Nos.16, 17 and 18 of 2023 stating
that it has deposited the total amount as directed by the High
Court, i.e., 50% of the decretal amount of Rs.21,91,53,174/-
which included an amount of Rs.16,22,46,474/- in CEP No.16
of 2023, Rs.4,27,85,592 in CEP No.17 of 2023 and
Rs.1,41,21,108/- in CEP No.18 of 2023.
10. The High Court by its order dated 22.02.2024 permitted
the petitioner to withdraw the amounts deposited by the
petitioner subject to furnishing of security to the satisfaction of
the Commercial Court.
11. The petitioner filed E.A.No.7 of 2024 in CEP No.16 of
2023, E.A.No.8 of 2024 in CEP No.17 of 2023 and E.A.No.9 of
2024 in CEP No.18 of 2023 under Rule 232 of the Civil Rules of
Practice to issue cheques for the amounts and furnish security
in the form of land admeasuring Acs.3.29 guntas and Ac.1.06
guntas totaling Acs.4.35 guntas in Survey No.160 of Janwada
Village, Shankarpally Mandal at Ranga Reddy District, valued at
Rs.39 Crores. The petitioner filed additional affidavits on
04.06.2024 offering some securities and also filed Unconditional
Undertakings dated 08.07.2024 given by the Managing Director
of the petitioner to return the amount in the event the
respondent's COMCAs being allowed. The Valuation Report
reflecting the value of the land at Rs.39 Crores is also part of
the Records. The property offered by the petitioner as security
was purchased by M/s. Vaidehi Avenues Limited which is a
wholly owned subsidiary of the petitioner vide Registered Sale
Deed dated 10.06.2011. M/s. Vaidehi Avenues Limited was
amalgamated with the petitioner pursuant to a Scheme of
Amalgamation approved by the NCLT by an order dated
26.08.2021.
12. The Commercial Court by the impugned Common Order
dated 05.08.2024 disposed of E.A.Nos.7, 8 and 9 of 2024 filed
by the petitioner by holding that the security offered by the
petitioner in the form of land can be accepted for an amount of
Rs.5,13,00,000/- as opposed to Rs.21.91 Crores being 50% of
the decretal amount. The present CRPs arise out of the said
impugned common order dated 05.08.2024.
13. Learned Senior Counsel appearing for the petitioner
submits that the Commercial Court failed to notice that the
amount mentioned in the Annual Statement of the petitioner
reflects the cost of the property at the time of purchase which
was more than 12 years ago, as opposed to the present
valuation of the property. Counsel submits that there have
been multi-level developments on the land and the land offered
is now a prosperous part of the city, with auctions of adjacent
lands fetching amounts of up to Rs.100 Crores per acre in some
cases. Counsel submits that the cost of acquisition of the land
in 2011, as per the Indian Accounting Standards, does not
reflect the current value of the land. Counsel also points to
findings in the impugned order which are contrary to the
documents on record and that the Commercial Court
misconstrued the statements in the Annual Report regarding
the fair value of the land held in the name of the petitioner.
14. Learned counsel appearing for the respondent raises a
preliminary point of the CRPs not being maintainable in view of
section 8 of The Commercial Courts Act, 2015, which prohibits
filing of a CRP against an interim order passed by a Commercial
Court. Counsel also addresses on the merits of the CRPs in the
context of the petitioner's Valuation Report, which contradicts
the official market values and the findings of the Commercial
Court, which state that the land remains an agricultural land.
Counsel submits that the petitioner should have offered Bank
Guarantees equivalent to the amount claimed by the petitioner
i.e., Rs.21.91 Crores, instead of offering land, the valuation of
which is significantly lower than the claimed amount.
15. The issue of maintainability of the present Civil Revision
Petitions (CRPs) should be answered first.
16. The bar contained in section 8 of The Commercial Courts
Act, 2015 ('the 2015 Act') pertains to entertaining Civil Revision
Petitions from an interlocutory order of a Commercial Court
including any order on the issue of jurisdiction of the
Commercial Court. Section 8 of the 2015 Act mandates that a
challenge to an interlocutory order passed by a Commercial
Court shall be filed in accordance with the statutory framework
of section 13 of the 2015 Act. In other words, the correct route
would be to file an appeal under section 13(1) or (1A) of the Act.
17. The Supreme Court in Shalini Shyam Shetty Vs. Rajendra
Shankar Patil 1 delineated the principles on the exercise of the
High Court's jurisdiction under Article 227 of the Constitution
of India and limited the scope of such power in matters of
interference in orders of Courts inferior to the High Courts. The
1 (2010) 8 SCC 329
power to interfere was circumscribed within the boundaries of
patent perversity, gross or manifest failure of justice or violation
of the principles of natural justice. In other words, the Supreme
Court held that the power of superintendence should be
sparingly exercised only in fit cases i.e., to keep strict
administrative control of the Courts within the territory of the
High Court.
18. A Division Bench of this High Court in M.V.Ramana Rao
Vs. N.Subash 2 considered the issue of maintainability of a CRP
against the embargo contained in the 2015 Act and diluted the
stricture contained therein by drawing a distinction between the
power of revision under section 115 of The Code of Civil
Procedure, 1908 ('CPC') and under Article 227 of the
Constitution of India. The High Court held that the power of
judicial review under Article 227 cannot be taken away by
section 8 of the 2015 Act but cautioned against misuse of the
power in undeserving cases. A Division Bench of the High
Court of Andhra Pradesh expressed the same opinion i.e.,
section 8 of the 2015 Act is confined to a CRP filed under
section 115 of the CPC and does not operate as a bar to the
2 MANU/TL/0153/2019
jurisdiction of a High Court under Article 227 of the
Constitution of India.
19. In Blue Cube Germany Assets Gmbh And Co. KG Vs.
Vivimed Labs Limited 3, a Division Bench of the erstwhile High
Court of Judicature at Hyderabad for the State of Telangana
and Andhra Pradesh clarified that although the nomenclature
given by the Court under Article 227 of the Constitution of India
is 'Civil Revision Petition' it is not equivalent to a Revision
Petition under section 115 of the CPC. It was further clarified
that the power of judicial superintendence vested in a High
Court under Article 227 of the Constitution cannot be equated
to ordinary revisional jurisdiction. The Court also clarified that
the petitions filed under Article 227 in several High Courts are
not referred to as 'Civil Revisions' but as 'Writ Petitions (Civil)'.
In other words, the Division Bench held that the nomenclature
of 'Civil Revision Petition' to petitions filed under Article 227
would not fall within the statutory bar in section 8 of the 2015
Act.
20. The discussion becomes somewhat academic in view of
the Supreme Court's decision in Col. Anil Kak (Retd.) Vs.
3 2019(2)ALD 671
Municipal Corporation, Indore 4 where it was held that a High
Court is authorized to convert a petition filed under section 115
of the CPC to a proceeding under Article 227 of the Constitution
on its own even without a motion in that behalf by the petitioner
before it.
21. Therefore, the argument of the respondent that the CRPs
are not maintainable in view of the bar in section 8 of the 2015
Act cannot be accepted. We accordingly hold that the CRPs are
maintainable.
22. The respondent has relied on State of Telangana Vs.
M/s.Siddartha Constructions Private Limited 5. However, in that
case, the Court noted that the petitioners did not have an
answer as to why they have not filed any appeal under section
13(1) or (1A) of the 2015 Act and instead chose to file a CRP
against the impugned order. Therefore, the Court also found
that the bar contained in section 8 of the 2015 Act would fully
apply to the facts before it and the petitioner cannot take refuge
under Article 227 of the Constitution of India for maintaining
the CRP.
23. We now propose to deal with the three CRPs on merits.
4 (2005) 12 SCC 734
5 2024 (6) ALT 164 (DB) (TS)
24. The Commercial Court in the impugned order was of the
view that the security offered by the petitioner could only be
accepted for a sum of Rs.5,13,00,000/-. In coming to this
decision, the Commercial Court relied on the figures at
paragraphs 3.4 and 3.5 of the Annual Report of the petitioner
Company for the F.Y. 2022-2023. The petitioner was hence
given liberty to withdraw only an amount of Rs.4,27,85,592/- or
Rs.1,41,21,108/- by furnishing the movable properties offered
by the petitioner as security as opposed to the petitioner's
prayer for withdrawing Rs.21,91,53,174/-.
25. We have head learned Senior Counsel appearing for the
petitioner and learned counsel appearing for the respondents on
the issue of whether the security/land offered by the petitioner
was sufficient for withdrawing Rs.21,91,53,174/-.
26. The petitioner has filed its Annual Report for the F.Y.
2022-2023 before this Court along with a Memo dated
30.08.2024.
27. To briefly recall the facts, the petitioner as the decree-
holder, was permitted by the High Court by the order dated
22.02.2024 to withdraw the 50% of the decretal amount i.e., the
sum of Rs.21,91,53,174/- which had been deposited by the
respondent/judgment-debtor on furnishing of security to the
satisfaction of the Commercial Court. The petitioner offered
Acs.4-35 guntas of land in Sy.No.160 of Janwada Village,
Shankerpalli Mandal claiming a valuation of Rs.39,00,00,000/-
for the offered land along with an unconditional undertaking by
the Managing Director of the petitioner Company to return the
amount in the event respondent succeed in the Appeals.
28. The issue is whether the Commercial Court erred in
holding that the security offered by the petitioner was
unsatisfactory and was not equivalent to Rs.21,91,53,174/-.
29. Upon considering the relevant pages of the Annual Report
of the petitioner Company for the F.Y. 2022-2023 it is clear that
the Commercial Court fell into error on several counts.
30. First, the amount mentioned in the Annual Report which
was relied upon by the Commercial Court is the cost of
purchase of the property as purchased more than 12 years ago
in 2011 and not the valuation of the property as on 2024. This
would be clear from the Annual Report itself. Further, the
amount mentioned in the Annual Report is for the entire extent
of Acs.55-00 guntas of land as opposed to Acs.4-35 guntas
which was the extent of land offered by the petitioner as
security for withdrawing the amount.
31. The fact that value of the property has increased since the
date of purchase would also be evident from Government
auctions in the vicinity which have fetched as much as Rs.100
Crores per acre in some cases. Government land on which such
auctions have been held is situated within a radius of about 8-9
Kms from the land which was offered by the petitioner as
security.
32. Moreover, it appears from paragraph 2.10 of the Annual
Report that the value of Rs.5.13 Crores refers to the cost of
acquisition of land including sale consideration, cost of stamp
duty and registration charges of the property which were
incurred by the petitioner at the time of purchase of the
property as opposed to the market value of the property in 2024
when Acs.4-35 guntas of land was offered by the petitioner as
security. The Commercial Court also failed to consider the
Chartered Accountant's Certificate and particulars of the same
transactions filed by the petitioner which reflect that the
amount mentioned in the Annual Report is sale consideration
and registration charges for purchase of land of Acs.55-00
guntas across 20 registered Sale Deeds.
33. Senior Counsel appearing for the petitioner Company has
placed a list of accredited Registered Valuers of the Insolvency
and Bankruptcy Board of India ('IBBI') and has invited the
Court to appoint any Registered Valuer from IBBI panel for the
purpose of valuing the land offered by the petitioner at the
petitioner's cost. The objections raised by the respondent on the
correct valuation of the property offered by the petitioner
become irrelevant in the express bona fides shown by the
petitioner Company with respect to such issue.
34. The fairness of the stand is sufficient to demolish all
opposition to the valuation done on 17.03.2024 for Acs.04-35
guntas of land in Sy.No.160 of Janwada Village, Shankerpalli
Mandal, Ranga Reddy District. The very fact that the petitioner
is willing to undertake a fresh valuation of the security
notwithstanding the valuation already been done on 17.03.2024
is sufficient to tilt the balance in favour of the petitioner and
against the respondent. The respondent cannot have any
plausible objection to a fresh valuation being done by a
Registered Valuer from Insolvency and Bankruptcy Board of
India Panel.
35. In any event, the petitioner as the decree-holder is entitled
to enjoy the fruits of the decree which presently is only 50%
thereof. Petitioners in similar situations are permitted to
withdraw amounts even without furnishing security in fit cases.
36. We are accordingly of the view that all three CRPs should
be allowed and the impugned Common Order dated 05.08.2024
set aside by appointing one of the enlisted Registered Valuers
under the category "Land and Building" for carrying out a fresh
valuation of the land offered by the petitioner as security for
withdrawing Rs.21,91,53,174/- deposited by the respondent/
Judgment-debtor.
37. We accordingly appoint Mr.Pothuganti Venkatram Rajesh,
Registered Valuer, to value the land offered by the petitioner as
security, within a period of 4 weeks from the date of this order.
The Registered Valuer shall be permitted to take the assistance
of the office bearers of the petitioner Company and the
respondent and all other necessary support, if required. Costs
of the valuation including the Registered Valuer's fees shall be
borne by the petitioner.
38. The scale of fees to be paid to the Registered Valuer shall
be in accordance with the usual rates or the IBBI accepted
rates, if any, or Rs.2,00,000/- whichever is higher. The
Registered Valuer shall also be provided with all required
assistance. The Registered Valuer's Report shall be filed before
the Trial Court for a fresh consideration of the security offered
by the petitioner/decree holder.
39. It is made clear that the fresh valuation is being directed
not by reason of any suspicion with regard to the figures
furnished by the petitioner but on account of the conflicting
interpretations of the petitioner's Annual Report for the F.Y.
2022-2023. We deem it fit to order a fresh valuation as it is
necessary that the security furnished should be to the
satisfaction of the Commercial Court.
40. C.R.P.Nos.2714, 2715 and 2716 of 2024 are accordingly
allowed in terms of the above.
41. Miscellaneous applications pending, if any, shall stand
closed. Interim orders, if any, shall stand vacated.
_________________________________
MOUSHUMI BHATTACHARYA, J
__________________________________
B.R.MADHUSUDHAN RAO,J
Date: 29.04.2025
va/bms
