Bangalore District Court
Agadoorappa I M vs Ravikumar D on 6 January, 2025
Digitally signed
by SUDINDRA
KABC170102332020 SUDINDRA NATH S
NATH S Date: 2025.01.08
11:03:08 +0530
IN THE COURT OF LXXXIII ADDL. CITY CIVIL & SESSIONS JUDGE,
COMMERCIAL COURT, BENGALURU (CCH-84)
Present: Sri S. Sudindranath, LL.M., M.B.L.,
LXXXIII ADDL. CITY CIVIL & SESSIONS JUDGE
BENGALURU.
COM.O.S.No.130/2018
Dated on this 6th day of January 2025
Plaintiff/s Sri.I.M.Agadoorappa,
S/o Late Morsur Muniyappa,
Aged about 76 years,
No.329, 10th Main Road,
17th 'C' Cross, 2nd Stage,
Indiranagar,
Bangalore.
(By Sri.Srinivasa.N., Advocate)
// versus //
Defendant/s 1. Sri.D.Ravikumar,
S/o Sri.Doraiswamy,
R/at No.2/10, 3rd Main road,
N.S.Palya, Bannergatta road,
Bangalore - 560076.
2. M/s.Acropetal Technological Limited
Having its registered office at
No.2/10, 3rd Floor, Ajay Plaza,
1st Main, N.S.Palya,
Bannergatta road,
Bangalore - 560076.
Represented by its Chairman and
Managing Director
Sri.D.Ravikumar
2
CT 1390_Com.OS.130-2018_Judgment.doc
KABC170102332020
(D1 By Sri.Pavan R.Javali, Advocate
D2 By Sri.Shivaji H.Mane, Advocate)
Date of Institution of suit : 03/01/2018
Nature of the suit : Transactions of
Merchants, financiers,
traders relating
mercantile documents
(enforce, interpret)
Date of commencement of : 03/02/2021
recording of the evidence
Date on which the : 06/01/2025
Judgment was pronounced.
: Year/s Month/s Day/s
Total duration
07 00 03
JUDGMENT
This is a suit filed by the plaintiff against defendant No. 1 and 2, of which defendant No. 2 is a company, and defendant No. 1 is an individual who is also the chairman and managing director of defendant No. 2 company, for recovery of a sum of Rs. 28,57,32,000/= from the Defendants.
2. At this stage itself, it is to be noted that, by orders dated 5-4-2024 of this Court, the suit has been stayed 3 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 against defendant No. 2 company in view of the winding- up order against the said company, and the suit has proceeded only against defendant No. 1. Therefore, by this judgment, it is only the suit against defendant No. 1 which is being disposed off.
3. The plaint averments in brief are that, the plaintiff was / is the absolute owner of immovable property bearing No. 255-B, measuring 5902 square meters, situated at Bommasandra Industrial Area, Bommasandra Village, Anekal Taluk, Bangalore Rural District. In order to develop the said Property into a software technological park, the plaintiff entered into an arrangement with defendant No. 1, and the terms of the said arrangement are recorded in an agreement dated 6-12-2007. As per the said arrangement, the plaintiff was expected to execute a sale deed in respect of the said property in favor of defendant No. 2 company, and the defendants together would develop the said property into a software 4 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 technological park and thereafter transfer 40% of the super built-up area in favor of the plaintiff. In case the defendants failed to perform their part of the contract, the defendants had to compensate the plaintiff to the value of the development rights as per the said arrangement.
4. Accordingly, in terms of said arrangement, the plaintiff executed sale deed dated 6-12-2007 in respect of the said immovable property in favor of defendant No. 2 company, but it was always understood between the parties that the said sale deed was only a nominal sale deed, executed for the purpose of securing development of the property by the defendants. The defendants were to develop the property and convey 40% of the developed share to the plaintiff. However, after the execution of the sale deed, the defendants failed to perform their part of the contract, failed to develop the property into a technological park, and failed to convey 40% of the 5 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 developed share to the plaintiff. When the Plaintiff called upon the Defendants to perform their part of the promise, after several negotiations, the parties again entered into an arrangement under the MOU dated 28- 10-2011.
5. Under the said MOU, defendant No. 1 undertook that defendant No. 2 would reconvey the property in favor of the plaintiff on or before 31-12-2014 in case development was not completed within the said date. In case the property was not developed or reconveyed, the plaintiff would be entitled to an amount of Rs. 28,57,32,000, and as security for the said amount, defendant No. 1 also issued two cheques of Rs. 10 crores and Rs. 18,57,32,000 respectively. The defendants did not adhere to their undertakings in the MOU, and neither was the property developed nor reconveyed to the plaintiff. Therefore, the plaintiff was constrained to deposit the two cheques issued by defendant No. 1 for 6 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 realization, but the cheques were returned dishonored for the reason of "funds insufficient" and in respect of dishonor of the said two cheques, the plaintiff has already initiated a criminal case under Section 138 of the NI Act. Anyhow, for recovery of the sum of Rs. 28,57,32,000, which was undertaken to be paid to the plaintiff by the defendants under the MOU dated 28-10- 2011, the present suit is filed.
6. In response to the suit summons, the defendants entered appearance through counsel and filed a detailed written statement denying the plaint averments. In the Written Statement of Defendants, it was contended that in respect of the same transaction, the plaintiff has already filed OS 996 of 2014 for cancellation of the sale deed dated 6-12-2007, and therefore the filing of the present suit amounts to taking a contrary stand and seeking contrary relief. Because on one hand, the plaintiff is seeking cancellation of the sale deed, and on 7 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 the other hand seeking recovery of Rs. 28.57 crores towards failure to reconvey the property. It was further contended that the suit is barred under Order 2 Rule 2 of the CPC and is liable to be dismissed on this ground alone.
7. It was contended that, having sold the property under the registered sale deed and having received valuable consideration in respect thereof, the present suit is not maintainable on the basis of unregistered and frivolous MOUs which are unenforceable and to which defendant No. 2 is not a party. Another defense taken was that the suit is barred by limitation. Furthermore, it was contended that, in view of the execution of the sale deed, any other MOUs are invalid and unenforceable. In any event, defendant No. 2, who is the absolute owner of the property, is not a party to the MOUs. The property itself does not remain in the hands of defendant No. 2 since the said property was brought for sale by Axis Bank 8 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 under the SARFAESI Act and has been sold to an auction purchaser by name Smt. Nagaratna, who is now in possession of the same. With these contentions, the defendants prayed for dismissal of the suit.
8. On the basis of the above pleadings, the following issues are framed:
1) Whether the plaintiff proves that
defendant No. 1 has entered into the
agreement dated 6-12-2007,
representing defendant No. 2, to
construct commercial complex, to
develop the property into a
technological park, and transfer 40% of the super-built area in favor of the plaintiff?
2) Whether the plaintiff proves that, as per the Memorandum of Understanding dated 28-10-2011, the 9 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 plaintiff is entitled to receive a sum of Rs. 28,57,32,000 from the defendants?
3) Whether the plaintiff proves that defendant No. 1, representing defendant No. 2, had issued two cheques for Rs. 10 crores and Rs.
18,57,32,000 drawn in the name of the plaintiff, dated 31-12-2014, on ING Vysya Bank, Jayanagar Branch, to discharge the liability as per the MOU dated 28-10-2011?
4) Whether the plaintiff proves that he is entitled to recover the sum of Rs.
28,57,32,000 from defendant No. 1 along with interest as claimed in the suit?
5) Whether the plaintiff is entitled to the reliefs as claimed in the suit?
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CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020
6) What order or decree?
Additional Issue framed on 19-03-2024:
Whether the suit is barred by limitation?
9. In the trial, the plaintiff examined himself as PW1 and got Ex. P1 to P40 marked. In addition, on behalf of the plaintiff, during the cross-examination of DW1, Ex.P P41 to P43 were marked. On behalf of the defendants, the defendant No. 1 was examined as DW1, but in his chief examination, no documents were marked. Instead, on behalf of the defendants, during the cross- examination of PW1, Ex. D1 to D5 were marked, and DW1 has also identified the same.
10. In addition, during the cross-examination of PW1, the defendants got the signature at Ex. P35 (a) marked. During the cross-examination of DW1, as already noted supra, the plaintiff got Ex. P41 to P43 marked. 11
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11. As already noted supra, in the course of the trial, it was brought to the notice of the court that winding up proceedings have been initiated against defendant No. 2 company and an official liquidator has been appointed, as per Orders of Hon'ble High Court of Karnataka. Accordingly, by orders dated 5-4-2024, this court, relied upon the ruling of the Hon'ble Apex Court in Hariharanath v. SBI, (2006) 4 SCC 457, wherein it is laid down that when winding-up orders are passed, the effect is that all affairs pertaining to the company in liquidation, including all suits and proceedings by or against the company, come within the control and supervision of the winding-up court, and all suits and proceedings pending against the company are stayed, subject to the discretion of the winding-up court to allow such suits and proceedings to proceed and accordingly, this court, by orders dated 5-4-2024, held as follows: 12
CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 "In view of the winding-up order against defendant No. 2 company, the present suit is hereby stayed against defendant No. 2, and the present suit shall continue only against defendant No. 1."
12. Accordingly, by this judgment, this suit is being disposed of only against defendant No. 1, and appropriate directions are being issued in the operative portion of the judgment in respect of the continuation of the suit against defendant No. 2 after the winding-up proceedings terminate.
13. After the conclusion of evidence on both sides, I have heard the arguments of both sides and perused the records of the case.
14. My answers to the issues are as follows:
Issue No. 1: As per finding.13
CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 Issue No. 2: In the negative.
Issue No. 3: As per finding.
Issues No. 4 and 5: In the negative.
Additional issue: In the negative.
Issue No. 6: As per the final order, for the following :-
REASONS.
Additional Issue :-
15. This issue is dealt with first since it pertains to limitation, and if answered against the plaintiff, it will not be permissible for this court to decide the suit on its merits. This issue is raised in view of the specific plea taken by the defendants in the written statement that the suit is barred by limitation.
16. In order to decide the question of whether the suit is within limitation, it is to be noted that, in the present suit, the only relief being sought is a personal decree 14 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 against the defendants, directing them to pay Rs. 28,57,32,000 to the plaintiff. The plaintiff traces his right to claim the said amount from the defendants to the MOU dated 28-10-2011, which is marked as Ex. P1.
17. Under the said MOU, it is stated in paragraph 2 that defendant No. 2 company shall reconvey the immovable property in favor of the plaintiff on or before 31-12-2014 without receiving any consideration, unless the property is developed in the meantime. In the event of delay in reconveying the property, the plaintiff shall be entitled to receive the sale price of the property as per the rates mentioned. Different rates are mentioned for different years, and for the period from 1-1-2014 to 31- 12-2014, the rate mentioned is Rs. 4,500 per square foot, which works out to Rs. 28,57,32,000, which is the same amount being claimed in the present suit. 15
CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020
18. Thus, it is clear that the Plaintiff bases his right to recover the suit claim on the said MOU (Ex. P1). As per the terms of the MOU, the defendants were required to reconvey the immovable property to the plaintiff by 31- 12-2014, failing which they were to pay Rs. 28,57,32,000 to the plaintiff. Therefore, it follows that the cause of action to recover the said claim accrued on 31-12- 2014.
19. No doubt, counted from the said date, the suit is filed beyond three years, as it was filed on 03-01-2018. However, it is to be noted that, in the same MOU, in paragraph 2, it is stated that as security for the due payment of the said amount, two cheques of Rs. 10 crores and Rs. 18,57,32,000 have been issued in favor of the plaintiff.
20. The said cheques are dated 31-12-2014. As per the plaint averments at Paragraph 9, these cheques were 16 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 presented for payment on 13-3-2015. As per the recitals of the legal notice in respect of the dishonor of these cheques, which is marked as Ex. P3, the cheques were returned dishonored on 17-3-2015.
21. In the written statement, at paragraph 35, while traversing the averments of Paragraph 8 and 9 of the Plaint, the fact of presentation of said cheques on 13-03- 2015 and dishonor thereof is not specifically denied. Instead, it is pleaded that the plaintiff misused the two cheques of defendant No. 1 and initiated a criminal complaint. Thereby, there is no serious dispute that the two cheques, which were purportedly given as security for the payment of Rs. 28,57,32,000 and are also mentioned in the MOU at Ex. P1, were dishonored on 17- 3-2015, as stated in the legal notice (Ex. P3).
22. Therefore, the cause of action for seeking recovery of the said sum would arise again on 17-3-2015 when the 17 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 cheques were dishonored. Counted from the said date, the suit filed on 03-01-2018 is within the three-year limitation period.
23. It is be noted that, as per the law laid down by the Hon'ble Apex Court, under Article 113 of Limitation Act, which is the residuary article which is applicable to the case at hand, the period of limitation has to be counted not from the date when the cause of action first accrues but whenever the cause of action arises. In this regard, reference may be made to law laid down by Hon'ble Apex Court in the case of Shakti Bhog Food Industries Ltd. v. Central Bank of India, (2020) 17 SCC 260 : (2021) 4 SCC (Civ) 286 : 2020 SCC OnLine SC 482, as follows;
18. Concededly, the expression used in Article 113 is distinct from the expressions used in other Articles in the First Division dealing with suits such as Article 58 (when the right to sue "first" accrues), Article 59 (when the facts entitling the plaintiff to have the instrument or decree cancelled or set aside or the contract rescinded "first" become 18 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 known to him) and Article 104 (when the plaintiff is "first" refused the enjoyment of the right). The view taken by the trial court, which commended to the first appellate court and the High Court in the second appeal, would inevitably entail in reading the expression in Article 113 as
-- when the right to sue (first) accrues. This would be rewriting of that provision and doing violence to the legislative intent. We must assume that Parliament was conscious of the distinction between the provisions referred to above and had advisedly used generic expression "when the right to sue accrues" in Article 113 of the 1963 Act. Inasmuch as, it would also cover cases falling under Section 22 of the 1963 Act, to wit, continuing breaches and torts.
(Emphasis Supplied)
24. Therefore, although initially the cause of action accrued for seeking recovery of the suit claim on 31-12- 2014, since two cheques were given as security for the said payment and the said two cheques were dishonoured on 17-03-2015, the cause of action again accrued to the plaintiff on 17-03-2015 and within three years from the said date the present suit is filed, and 19 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 therefore, I answer the additional issue holding that the suit is filed within the period of limitation.
25. There is no doubt that, along with the plaint, the plaintiff had filed IA No. 1 for condonation of delay. This fact of filing of IA for condonation of delay was highlighted by the Learned counsel for Defendant No. 1 that, it is an admission that, suit is barred by limitation. At the outset, it is to be noted that, application for condonation of delay is not maintainable in respect to original proceedings such as suits because IA under Section 5 of the Limitation Act is maintainable only in respect of applications or appeals. Therefore, if there is delay in filing of the suit, there is no question of condoning the delay and the suit has to be dismissed as barred by limitation. However for the reasons noted supra, I have already concluded that, suit is filed within the period of limitation. The argument that, by filing application for condonation of delay, plaintiff admits that 20 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 there is delay in filing the suit cannot be accepted for two reasons. Firstly, there can only be admission of fact and not admission of mixed question of fact and law. On the basis of the facts pleaded, it is for the court to decide whether suit is within limitation or not. Secondly, in the said IA, No. 1, the prayer is to condone the delay, "if any". By using the words, "if any", it is clear that plaintiff does not admit that suit is barred by limitation and the application is filed only by way of abundant precaution. Anyhow, for the reasons already noted supra, I hold that suit is within limitation.
26. Before parting, at this stage itself, it is appropriate to consider another technical objection raised by the defendant No. 1, in the written statement, namely that the suit is barred under Order 2 Rule 2 CPC since an earlier suit was filed before the Anekal Court in OS 996 of 2014 for cancellation of the sale deed. It is to be noted that, under order 2 rule 2 of the CPC, earlier suit will be 21 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 a bar to present suit, if the earlier suit was in respect of same cause of action and the entire relief in respect of the said cause of action was not claimed in the earlier suit.
27. This contention cannot be accepted for the simple reason that, the cause of action for filing the suit in the Anekal Court for cancellation of the sale deed was that the sale deed dated 6-12-2007 executed by the plaintiff in favor of defendant No. 2 was a nominal sale deed, whereas the cause of action for filing the present suit is that the defendants have not complied with their undertaking under the MOU dated 28-10-2011 to pay the sum of Rs. 28,57,32,000 on or before 31-12-2014. Therefore, the cause of action for the present suit accrued on 31-12-2014 and again on 17-03-2015 when the cheques were dishonoured, as noted supra, whereas the cause of action for O.S. No. 996/2014 on date of execution of the sale deed viz on 06-12-2007. Therefore, 22 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 the cause of action for the two suits being distinct, the bar of Order 2 Rule 2 CPC is inapplicable.
28. Insofar as the other contention that the plaintiff is seeking contradictory reliefs in the two suits, that is, on one hand, the plaintiff is seeking cancellation of the sale deed in OS 996 of 2014 and, on the other hand, in the present suit, the plaintiff is seeking recovery of a sum of Rs. 28,57,32,000 towards failure on the part of the defendants to reconvey the property, and the said two reliefs are mutually contradictory and destructive is concerned, the said objection does not survive because during the pendency of the suit, the plaintiff has brought on record, by filing a memo, that the plaintiff has withdrawn OS 996 of 2014. Therefore, the plaintiff is not pursuing contrary remedies, and therefore on this ground the maintainability of the present suit cannot be doubted.
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29. Accordingly, in conclusion, I hold that the suit is within the period of limitation and maintainable and, therefore, the suit has to be considered on merits. Issue No. 1 to 5:
30. These issues are considered together since they require common discussion because essentially what has to be decided by the court while answering all these issues is whether the plaintiff is entitled to recover the sum of Rs. 28,57,32,000 from defendant No. 1.
31. The case of the plaintiff in brief is that, the plaintiff was / is the absolute owner of immovable property bearing No. 255-B, measuring 5902 square meters, situated at Bommasandra Industrial Area, Bommasandra Village, Anekal Taluk, Bangalore Rural District. In order to develop the said Property into a software technological park, the plaintiff entered into an arrangement with defendant No. 1, and the terms of the said arrangement 24 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 are recorded in an agreement dated 6-12-2007. As per the said arrangement, the plaintiff was expected to execute a sale deed in respect of the said property in favor of defendant No. 2 company, and the defendants together would develop the said property into a software technological park and thereafter transfer 40% of the super built-up area in favor of the plaintiff. In case the defendants failed to perform their part of the contract, the defendants had to compensate the plaintiff to the value of the development rights as per the said arrangement. Accordingly, in terms of said arrangement, the plaintiff executed sale deed dated 6-12-2007 in respect of the said immovable property in favor of defendant No. 2 company, but it was always understood between the parties that the said sale deed was only a nominal sale deed, executed for the purpose of securing development of the property by the defendants. The defendants were to develop the property and convey 40% of the developed share to the plaintiff. However, after the 25 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 execution of the sale deed, the defendants failed to perform their part of the contract, failed to develop the property into a technological park, and failed to convey 40% of the developed share to the plaintiff. When the Plaintiff called upon the Defendants to perform their part of the promise, after several negotiations, the parties again entered into an arrangement under the MOU dated 28-10-2011. Under the said MOU, defendant No. 1 undertook that defendant No. 2 would reconvey the property in favor of the plaintiff on or before 31-12-2014 in case development was not completed within the said date. In case the property was not developed or reconveyed, the plaintiff would be entitled to an amount of Rs. 28,57,32,000, and as security for the said amount, defendant No. 1 also issued two cheques of Rs. 10 crores and Rs. 18,57,32,000 respectively. The defendants did not adhere to their undertakings in the MOU, and neither was the property developed nor reconveyed to the plaintiff. Therefore, the plaintiff was constrained to 26 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 deposit the two cheques issued by defendant No. 1 for realization, but the cheques were returned dishonored for the reason of "funds insufficient" and in respect of dishonor of the said two cheques, the plaintiff has already initiated a criminal case under Section 138 of the NI Act. Anyhow, for recovery of the sum of Rs. 28,57,32,000, which was undertaken to be paid to the plaintiff by the defendants under the MOU dated 28-10- 2011, the present suit is filed.
32. In support of his case, the plaintiff has examined himself as PW1 and got marked Ex. P1 to P40, and in addition, by confronting DW1, got marked Ex. P41 to P43.
33. Ex. P1 is the suit document, namely the MOU dated 28-10-2011, under which the plaintiff traces his right to claim the sum of Rs. 28,57,32,000 from the defendants. Ex. P2 is the certified copy of the two 27 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 cheques for Rs. 10 crores and Rs. 18,57,32,000, which are stated to have been given as security in the MOU at Ex. P1. Ex. P3 is the legal notice caused by the plaintiff to the defendants in respect of dishonour of the two cheques at Ex. P2. Ex. P4 is the bank account statement of the plaintiff to show repayments of the sale consideration amount by the plaintiff to defendants and to third parties on the instructions of defendants. Ex. P5 is an agreement between defendant No. 1, G. Raghunath and A. Shivaram, on one hand, and the plaintiff on the other hand dated 6-12-2007. Ex. P6 is the MOU dated 6.12.2007 between Defendant No. 2 and the Plaintiff. Ex. P7 is a communication by one Mr. Ankit Bansal, who is said to be the tenant of the plaintiff, to Axis Bank enclosing the orders of Hon'ble High Court of Karnataka staying action under SARFAESI Act. Ex. P8 is a letter issued by the plaintiff to Axis Bank referring to status quo Order passed by the Hon'ble High Court and requesting not to create rights during the pendency of the 28 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 WP. Ex. P9 is the certified copy of Interim Orders dated 28-07-2015 passed by Hon'ble High Court in WP 31091- 92 of 2015 in which the Hon'ble High Court directed Axis Bank to receive bids pursuant to the sale notice but not to finalize or create third-party rights, and also maintain status quo regarding possession. Ex. P10 are emails exchanged between the plaintiff and defendant No. 1. Ex. P11 to P14 are communications exchanged between the parties. Ex. P15 is the company profile of defendant No. 2 at the time of the IPO. Ex. P16 is certified copy of the Plaint in OS 996 of 2014, which was filed by the plaintiff in the Anekal Court for cancellation of the sale deed dated 6-12-2007. Ex. P17 is the certified copy of the private complaint filed by the plaintiff herein against defendants herein in PCR 7112 of 2015 in respect of dishonour of the two cheques at Ex. P2. Ex. P18 is the memorandum of criminal petition under Section 482 of CRPC filed by defendant No. 2 herein for quashing the said private complaint. Ex. P19 is the private complaint 29 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 in PCR 377 of 2016 filed by Ankit Bansal, who is said to be the tenant of the plaintiff, against the plaintiff. Ex. P20 is the MOU dated 16-11-2011 between the plaintiff and the tenant Ankit Bansal. Ex. P21 is the lease agreement between the plaintiff and Ankit Bansal. Ex. P22 is the orders of the Hon'ble High Court of Karnataka in WP 28538 of 2015, which was filed by Ankit Bansal, in which the Hon'ble High Court directed the Learned Magistrate, who was considering the petition under Section 14 of the SARFAESI Act, to consider the application of said Ankit Bansal. Ex. P23 is an extract of the minutes of meeting of board of directors of defendant No. 2 company in which defendant No. 1 is authorized on behalf of the company to enter into an agreement with the plaintiff to lease up to 40% of the built-up area in the technological park proposed to be developed on the property. Ex. P24 to P32 are again communications exchanged between the parties. Ex. P33 is the sale agreement entered into between the plaintiff and a third 30 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 party, namely Devraj and it is the case of the plaintiff that, at the instance of Defendant No. 1, he entered into said sale agreement. Ex. P-34 is the sale deed under which the plaintiff acquired the immovable property from KIADB. Ex. P-35 is the sale deed dated 06-12-2007 executed by the plaintiff in favor of Defendant No. 2 company in respect of the said immovable property for a sale consideration of Rs. 4 crores. Ex. P-36 is the sale certificate in respect of auction sale under the SARFAESI Act at the instance of Axis Bank in favor of Smt. Nagaratna. Ex. P-37 is the original MOU dated 06-12- 2007, whose certified copy is already marked as Ex. P-6. Ex. P-38 is the original agreement dated 06-12-2007 between Defendant No. 1, G. Raghunath and A. Shivaram on one hand and the plaintiff on the other hand, whose certified copy is already marked as Ex. P5. Ex. P39 is an agreement dated 06-12-2007 between Defendant No. 2 Company and the plaintiff. Ex. P40 is an 31 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 agreement dated 14-12-2007 between Defendant No. 1 and the plaintiff.
34. Ex.P P41 to P43 were marked by confronting to DW1. Ex. P41 is the bundle of documents which are marked as Ex.s D1-D46 in the cheque bounce case. Ex. P42 is an agreement between Defendant No. 2 Company and Axis Bank in respect of availing of credit facility by Defendant No. 2 Company from Axis Bank, and said document is marked since DW1 admitted that the signature thereon appears to be his signature. Ex. P43 is a letter issued by Defendant No. 2 company to the plaintiff, and this document is marked since DW1 admitted that the signature thereon is his signature.
35. Per contra, the defense raised by the defendants in the common written statement filed by them is that, it is contended that, the Plaintiff having sold the property under the registered sale deed and having received 32 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 valuable consideration in respect thereof, the present suit is not maintainable on the basis of unregistered and frivolous MOUs which are unenforceable and to which defendant No. 2 is not a party. Furthermore, it was contended that, in view of the execution of the sale deed, any other MOUs are invalid and unenforceable and in any event, defendant No. 2, who is the absolute owner of the property, is not a party to the MOUs. The property itself is not in the hands of defendant No. 2 since the said property was brought for sale by Axis Bank under the SARFAESI Act and has been sold to an auction purchaser by name Smt. Nagaratna, who is now in possession of the same. With these contentions, the defendants prayed for dismissal of the suit.
36. In support of this defense, Defendant No. 1 is examined as DW1 and got marked Ex. D1 to D5. It is to be noted that these documents are marked by confronting PW1, and DW1, in his chief examination, has 33 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 also identified the same. Ex. D1 is the certified copy of the judgment in CC 12451 of 2015 whereby the Learned Magistrate has acquitted Defendant No. 1 herein in the cheque bounce case. It is to be noted that, insofar as Defendant No. 2 is concerned, the proceedings against Defendant No. 2 were quashed in the cheque bounce case as per the orders of the Hon'ble High Court marked as Ex. D4. Ex. D2 and D3 are the evidence and cross- examination of the plaintiff in the cheque bounce case. Ex. D5 is the deposition of the plaintiff in O.S. No. 996 of 2014 before the Anekal court.
37. Having considered the rival contentions and the oral and documentary evidence on record, it is noted that, essentially the case of the plaintiff is that, the plaintiff was and is the original owner of the immovable property bearing No. 255-B measuring 5902 square meters situated at Bommasandra, Bangalore [hereinafter referred to as the immovable Property]. 34
CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 Admittedly, the plaintiff has executed the sale deed at Ex. P35 in respect of the said immovable property in favor of Defendant No. 2 company for sale consideration of Rs. 4 crores.
38. The crux of the dispute between the parties is that, according to the plaintiff, it is only a nominal sale deed which was executed for the purpose of developing the property into a technological software park and thereafter reconveying 40 percent of the developed share to the plaintiff. According to the plaintiff, the said understanding is recorded in the various agreements, which are produced and marked as Ex. P5, P6, P37 to
39. [It is to be noted that Ex. P5 and P6 are the same as the documents marked as Ex. P38 and P37, respectively. The only difference is that Ex. P37 and P38 are originals, whereas Ex. P5 and P6 are certified copies.] Since, Defendants failed to abide by said agreements and MOUs, the parties entered into another MOU dated 28- 35 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 10-2011 at Ex.P 1, under which the Defendants bound themselves to pay sum of Rs. 28,57,32,000/= to the Plaintiff in case the Defendants failed to develop or reconvey the Property within 31-12-2014 and for recovery of said sum of Rs. 28,57,32,000/=, the present suit is filed.
39. On the other hand, the case of the defendants is that the plaintiff has received valuable sale consideration of Rs. 4 crores and executed an absolute sale deed after understanding the contents thereof, and therefore, now it does not lie in the mouth of the plaintiff to turn around and contend that the sale deed is only a nominal sale deed. The defendants contend that, having executed the absolute sale date and having thereby given up all rights in the immovable property, the plaintiff cannot now seek recovery of any amount towards any subsisting interest in the immovable property. It is contended that, in view of execution of the sale deed, all other MOUs and 36 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 agreements have become invalid and unenforceable. It is highlighted that, whereas the property was conveyed to defendant No. 2 and hence defendant No. 2 had become the owner of the property, the MOU at Ex. P1 under which certain sums are promised to be paid to Plaintiff is entered into by defendant No. 1 and not by Defendant No. 2. On these contentions, the defendants deny their liability to pay any sum of money to the plaintiff.
40. At the outset it is to be noted that, the dispute between the parties as to whether the sale deed was only nominal sale deed or was absolute sale deed need not be decided in the present suit. This is because the present suit is not for cancellation of the said sale deed or for specific performance of the MOUs and agreements for development of the property and reconveying 40% of the developed share to the plaintiff. On the other hand, the present suit is filed only for recovery of a sum of Rs. 28,57,32,000 from the defendants.
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41. Therefore, the primary question to be considered by the court in the present case is whether the plaintiff has produced any document to show that defendants have bound themselves to pay the suit claim of Rs. 28,57,32,000 to the plaintiff. In this regard, the plaintiff places strong reliance upon Ex. P1 and P2.
42. Ex. P1 is MOU between defendant No. 1 and the Plaintiff and Ex. P2 are certified copies of two cheques for Rs. 10 crores and Rs. 18,57,32,000 i.e., for total sum of Rs. 28,57,32,000 and the said cheques purport to be issued by defendant No. 1 in favour of the Plaintiff.
43. It is to be noted that the stand of the defendants vis a vis Ex.P 1 is total denial of said MOU and in this regard the defendants highlight the difference in signature between the admitted signature of defendant No. 1 on the sale deed at Ex. P35 which is marked as Ex. 38
CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 P35(a) and the alleged signatures of defendant No. 1 on MOU at Ex. P1. In respect of the cheques at Ex. P2, it is the stand of defendants that the cheques have been misused by the plaintiff.
44. It is to be noted that there is a specific reference to the cheques at Ex. P2 at paragraph 2 of the MOU. Therefore, if the plaintiff can prove due execution of the MOU at Ex. P1 by Defendant No. 1, then the defense that the cheques are misused will not survive.
45. Therefore, the primary question is whether the due execution of MOU at Ex. P1 is proved by the plaintiff. In this regard, although the MOU is disputed as a got-up and created document by the defendants, in the cross- examination of PW1 in the present suit, the signature of defendant No. 1 on the said MOU is not specifically denied but instead the suggestions are put as follows:
"Paragraph 38, Question. Now Ex. P35(a) and Ex. P1 are shown to witness and asked 39 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 whether signature of Ravi Kumar as seen in Ex. P-35(a) is there in Ex. P-1? Ans : I say that signature of Ravi Kumar as signed at Ex. P-35(a) is not there in Ex. P-1. I say that fraudulently Ravi Kumar has signed in a different manner on Ex. P-1.
Paragraph 39. It is false to suggest that neither myself nor D-1 had the legal capacity to enter into and execute Ex. P-
1. It is false to suggest that as per Ex. P-1, it is only D-2 company which has the right to develop the property. Witness volunteers, everything is done by D1. The cheques as per Ex. P2 which were given under Ex. P1 are individual cheques of Ravi Kumar. The seal of the company is not there in Ex. P1."
(Emphasis Supplied)
46. Therefore, by putting these suggestions, it is clear that in the cross-examination, the signature of defendant No. 1 and execution of Ex. P1 by defendant No. 1 is not specifically denied, but the only suggested put is that defendant No. 1 had no legal capacity to enter into and execute Ex. P1.
47. The due execution of Ex. P1 by defendant No. 1 is further admitted in the cross-examination of the plaintiff 40 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 in the cheque bounce case, which is marked as Ex. D3. In the said case, the M.O.U. dated 28-10-2011 at Ex. P1 in the present suit is marked as Ex. P10 in the criminal case. In the cross-examination of the plaintiff in the criminal case at page 12 of Ex. D3, suggested is put that Ex. P10 is executed on 28-10-2011, which suggested is admitted. Therefore, even in the criminal case, the due execution of Ex. P1 MOU by Defendant No. 1 herein is not disputed.
48. Even in the pleadings in the present suit, the MOU at Ex. P1 is not specifically denied. In this regard, it is to be noted that, the said MOU dated 28-10-2011 is pleaded at paragraph 6 of the plaint as follows:-
"It is submitted that in furtherance of several talks, the plaintiff and defendants have entered into a MOU on 28-10-2011, according to which defendant 1 expressed that he failed to develop the property and second defendant would reconvey the said property in question in favour of plaintiff on or before 31-12-2014 in the event of defendant unable to develop the property on or before 31-12-2014."41
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49. In response to the said plaint averments, at paragraph 34 of the written statement, it is pleaded as follows:
"Re: Paragraph 6 and 7. The allegations made in paragraph made are specifically denied as false, baseless and vexatious, the plaintiff is put to strict proof of the same. The defendants reiterate the fact that Defendant No. 2 was neither a party nor has signed the alleged MOU, much less alleged by the plaintiff. Under the given circumstances, any obligation or condition set forth against Defendant No. 2 under the alleged MOU does not create any lawful obligation on Defendant No. 2. Moreover, the plaintiff is basing his alleged claim in the present suit on some undervalued and unregistered MOU, which is against the provisions of the Karnataka Stamp Act and Registration Act. Furthermore, the plaintiff subsequent to execution of the registered sale deed dated 6th December 2007 had relinquished all his right, title and interest in the suit schedule property. As such, the plaintiff had no right or title to enter into such void MOU / agreements with respect to the suit schedule property with Defendant No. 1. Even though the terms and conditions were set forth under the alleged MOU, however, the said MOU could not be performed and enforced, on this ground 42 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 the suit of the plaintiff is liable to be dismissed."
(Emphasis Supplied)
50. Therefore, even in the written statement, the execution of the MOU at Ex. P1 by Defendant No. 1 is not specifically denied, but it is only contended that since plaintiff had already given up all rights in the immovable property due to execution of the sale deed, the plaintiff had no right to enter into said MOU and even otherwise defendant No. 2 is not a party to the MOU and therefore the MOU cannot be enforced against Defendant No. 2.
51. On the basis of the above material on record, I reach the conclusion that, the execution of MOU at Ex.P 1 by Defendant No. 1 is not specifically denied by Defendants either in pleadings or evidence and therefore, it should be held that, the plaintiff has proved due execution of Ex. P1 MOU by defendant No. 1. Further since, the MOU at Ex.P1 specifically recites in respect of 43 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 issuance of the 2 cheques at Ex.P 2, by Defendant No. 1 in favour of Plaintiff, the contention of the defendants that the said cheques have been misused cannot be accepted. And on the other hand, as recited in Ex. P1, it has to be held that, the said two cheques at Ex. P2 were issued by defendant No. 1 for the purpose as stated in Ex. P1.
52. Now the question is whether in the said MOU at Ex.P 1, there is an undertaking by defendant No. 1 to pay the suit claim of Rs. 28,57,32,000 to the plaintiff. On perusal of the MOU, it is noted that the said MOU dated 28-10-2011 is entered into between the plaintiff on one hand and defendant No. 1 in his individual capacity on the other hand. Therefore, it is clear that defendant No. 2 is not a party to the MOU and therefore defendant No. 2 cannot be bound by any obligations undertaken under the MOU. Now let me see whether defendant No. 1 has 44 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 bound himself to pay the suit claim to the plaintiff under the said MOU.
53. The MOU begins by stating that the plaintiff is the owner of the immovable property and the plaintiff executed the sale deed dated 06-12-2007, nominally to facilitate development of the property into an IT park, and the sale deed was executed to enable Defendant No. 2 company to raise financial assistance to develop the property into an IT park. Therefore, in the MOU, there is a categorical recital that the sale deed is a nominal sale deed and was executed for the purpose of developing the immovable property into an IT park. However, the said recital is of no use to the plaintiff in the present suit because, as already noted supra, the present suit is not filed either for cancellation of the sale deed or for specific performance of the obligation of defendants to develop the property into the software park, but for recovery of specific sum of money of Rs. 28, 57,32,000. 45
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54. Then at paragraph 5 of page 2 of the MOU, there is an important recital as follows: "And whereas the first party also guaranteed the due performance by the company of the covenants contained in the said memorandum of understanding by the company by executing an agreement of guarantee."
55. It is to be noted that, the effect of the above recital is that defendant No. 1 has guaranteed the due performance of the obligation by defendant No. 2 company in respect of the MOU dated 6-12-2007 to develop the property into a software park. Therefore, even this recital will not help the plaintiff to impose obligation on defendant No. 1 to pay the specific sum of money which is claimed in the present suit.
56. Then in the MOU, there is an admission that defendant No. 2 company was unable to develop the 46 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 property as promised. Then it is stated that defendant No. 1 has assured the plaintiff that development of the property would be executed by him, i.e. defendant No. 1 and the company or return the property by executing a sale deed in favor of the plaintiff. This understanding is reduced into writing in the MOU.
57. In this background, at paragraph 1 of the MOU, it is stated that the company is entitled to proceed with development. At paragraph 2, which is the most important paragraph in the MOU, it is stated as follows:
"The said company shall reconvey the schedule property in favour of the second party on or before 31-12-2014, without receiving any consideration from the second party at its cost unless the property could be developed as per MOU dated 6-12-2007. In the event of delay occurring in reconveying the scheduled property in favour of the second party by the said company, the second party shall be entitled to receive the sale price of the schedule property as per the rate mentioned below:
a) From 1 January 2012 to 31 December 2012 during this term at Rs. 3500 per square foot.47
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b) From 1 January 2013 to 31 December 2013 during this term at Rs. 4000 per square foot.
c) From 1 January 2014 to 31 December 2014 during this term at Rs. 4,500 per square foot i.e. Rs. 28,57,32,000 and for this rate the below cheques are given as security:
i)A cheque for an amount of Rs. 10,00,00,000 bearing No. 016804 dated 31 December 2014 drawn on ING Vysya Bank.
ii)A cheque for an amount of Rs. 18,57,32,000 bearing No. 106805 dated 31-12-2014 drawn on ING Vysya Bank."
58. Therefore, from this paragraph, firstly, the obligation is spelled out that Defendant No. 2 Company shall reconvey the immovable property to the plaintiff unless the property is developed on or before 31-12- 2014. Obviously, Defendant No. 1 is a different entity under law from Defendant No. 2 Company, although he may be its Chairman and Managing Director. Therefore, defendant No. 1 cannot accept any liability or obligation in his individual capacity on behalf of defendant No. 2 company.
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59. Therefore, this obligation undertaken under the MOU that defendant No. 2 company shall reconvey immovable property on or before 31-12-2014 unless the property is developed in the interregnum is of no consequence because this MOU is not signed by defendant No. 2, but is only signed by Defendant No. 1.
60. Then, the above paragraph states that, in the event of delay occurring in reconveying the property, the plaintiff shall be entitled to receive the sale price as quantified, which is Rs. 28,57,32,000 for the period ending 31-12-2014. The MOU does not say who has to pay the said amount, that is, whether defendant No. 1 or defendant No. 2. In the absence of specification in this regard, the obvious inference is that, it is defendant No. 2 who was bound to reconvey the immovable property as per the earlier part of this paragraph, who would be bound to pay the sale price on failure to reconvey the property. Therefore, in my view under this paragraph, 49 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 there is no obligation on defendant No. 1 to pay the sale price of Rs. 28,57,32,000, but instead the obligation is imposed on defendant No. 2 under this paragraph. This obligation of defendant No. 2 cannot be enforced because defendant No. 2 is not a signatory to the MOU. Therefore, what transpires is that defendant No. 1 is a signatory of the MOU, but there is no obligation on defendant No. 1 to pay the sale price of Rs. 28,57,32,000 because the said sale price is payable on failure of defendant No. 2 to reconvey the property and therefore it is only the obligation of defendant No. 2 to pay the said amount. That obligation cannot be enforced even against defendant No. 2 because defendant No. 2 is not a signatory to this document.
61. No doubt, as security for due payment, the cheques at Ex. P2 have been issued by defendant No. 1 in his individual capacity. However, since the said cheques are issued as security for the obligation of defendant No. 2, 50 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 the said cheques are not for the legal liability of defendant No. 1.
62. It is crucial to note that defendant No. 1 has stood as a guarantor for enforcing the obligations of defendant No. 2 in respect of MOU dated 6-12-2007 as already noted supra, but he has not stood as guarantor for enforcement of obligations of Defendant No. 2 under the MOU at Ex. P1.
63. At this stage, it is relevant to refer to the recitals of paragraph 5 of the MOU which is as follows:
"In the event, the second party were to exercise the option to receive the price of the schedule property by presenting the cheques on time for encashment, subject to the first party failing to reconvey the scheduled property in favor of the second party on or before 31-12-2014, and the cheques are to be dishonored, in that event, the first party further undertakes to reimburse the price of the schedule property together with interest at 2% per month on the sale price for every month's delay in making payment of the sale price. On receipt of 51 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 the sale price, the second party shall deliver the possession of the schedule property to the said company. If the aforesaid company undertakes the project of construction on the schedule property, permission is to be granted by the second party in writing to enter the property and make construction."
(Emphasis Supplied)
64. Therefore, on reading of paragraph 2 and paragraph 5 together, it becomes clear that, under paragraph 2, the obligation to pay the sale price is on defendant No. 2 because the obligation to pay the sale price arises only if defendant No. 2 company fails to reconvey the schedule property to the plaintiff. Under paragraph 5, defendant No. 1 has undertaken personal responsibility to pay the sale price along with interest on failure of defendant No. 2 to reconvey the property. But it is crucial to note that there is a reciprocal obligation on the part of the plaintiff to deliver the possession of the schedule property to defendant No. 2. In this case, admittedly, the plaintiff is not in a position to carry out the reciprocal 52 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 obligation because, admittedly, as per the sale certificate at Ex. P36, the property has been sold by Axis Bank by recourse to the SARFAESI Act, and the auction purchaser has been put in possession of the property. Therefore, when the plaintiff is unable to perform the reciprocal obligation of giving the possession of the property to defendant No. 2 company, the plaintiff cannot enforce the obligation on defendant No. 1 to pay the sale price.
65. Therefore, I conclude by holding that, even accepting Ex. P1 and P2 at face value as having been duly executed by defendant No. 1, the plaintiff cannot enforce recovery of the suit claim from defendant No. 1 on the basis of the said two documents for two reasons. Firstly, the unconditional obligation to pay the sale price of Rs. 28,57,32,000 under paragraph 2 is not on Defendant No. 1 but on Defendant No. 2. Secondly, the obligation undertaken by Defendant No. 1 at paragraph 5 53 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 to pay the sale price along with interest at 2% per month is subject to the performance of the reciprocal obligation by the plaintiff to hand over the possession of the property, and since the plaintiff is not in a position to hand over the possession of the property and therefore not in a position to perform the reciprocal obligation, the plaintiff cannot enforce the obligation under paragraph 5 on defendant No. 1. Therefore, Ex. P1 and P2 will not help the plaintiff in any manner in obtaining the suit claim.
66. Once this conclusion is reached, the suit has to fail because all other documents produced by the plaintiff are only in respect of joint development of the property, but in none of the other documents is there an obligation undertaken by the defendants to pay the specific amount of Rs. 28,57,32,000 as claimed in this suit. The present suit is filed only for recovery of money and not for specific performance of the various MOUs for development of the 54 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 property. In fact, such a relief has become infructuous because, admittedly, the property has been sold by Axis Bank to the auction purchaser, Smt. Nagaratna. Therefore, none of the other documents, MOUs, and agreements produced by the plaintiff will help the plaintiff to recover the suit claim since the only document in which obligation to pay the suit claim of Rs. 28,57,32,000 is mentioned is the MOU at Ex. P1, and for the detailed reasons noted supra, the plaintiff cannot claim the said amount from defendant No. 1 under the MOU.
67. Another weakness in the plaintiff's case is that, the plaintiff has admittedly executed the sale deed conveying the immovable property to defendant No. 2 under the sale deed dated 6-12-2007 at Ex. P-35. Admittedly, the plaintiff has received the sale consideration of Rs. 4 crores under the said sale deed, and a portion of the sale consideration has been directly paid to Canara Bank 55 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 towards the earlier liability of the plaintiff with Canara Bank. At paragraph 17 of the plaint, the case of the plaintiff is that, he has returned part of the sale consideration of Rs. 1.84 crores to the defendants or, on their instructions, to one Devaraj. In support of this, the plaintiff has produced and got marked his account extract at Ex. P4. However, out of the said payments claimed by the plaintiff, Rs. 75 lakhs was paid to Devaraj by the plaintiff in respect of the sale agreement produced at Ex. P-33, and Rs. 56 lakhs was paid by the plaintiff to defendant No. 1 as a short-term loan under the agreement dated 14-12-2007 at Ex. P-40. Even accepting the case of the plaintiff that he has returned Rs. 1.84 crores, the fact remains that, the remaining sale consideration amount has been admittedly received by the plaintiff. Under the MOU at Ex. P37, entered into between the plaintiff and defendant No. 2 company, it is only a sum of Rs. 1 crore which is stated as non- refundable payment. Therefore, apart from the said sum 56 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 of Rs. 1 crore, the remaining sum of Rs. 3 crores has not been repaid by the plaintiff to the defendants because even as per plaint averments only Rs. 1.84 crores is returned. Therefore, essentially, having received valuable sale consideration under Ex. P35 sale deed and having withdrawn the suit filed in the Anekal court in OS 996 of 2014 challenging the said sale deed, it means that the sale deed at Ex. P35 has attained finality.
68. Once this conclusion is reached, it follows that under Ex. P35, the plaintiff has divested himself of all rights in the immovable property and therefore, the plaintiff cannot now lay claim for recovery of any money from the defendants towards his interest in the said immovable property. Therefore, viewed from any angle, the suit has to fail. Accordingly, I answer issues No. 1 to 5.
Issue No. 6:
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69. Having answered issues No. 1 to 5 as above, the present suit is liable to be dismissed as against defendant No. 1.
70. As already noted supra, by orders of this court dated 05-04-2024, the suit in respect of defendant No. 2 has been stayed due to the initiation of winding-up proceedings and appointment of an official liquidator against defendant No. 2 company.
71. There is no embargo for disposing of the suit only against defendant No. 1 because the law is settled that more than one decree can be passed in the same suit. In this regard, reference may be made to the law laid down by the Hon'ble Apex Court in the case of Rachakonda Venkat Rao v. R. Satya Bai, (2003) 7 SCC 452 : 2003 SCC OnLine SC 1001 at page 459, as follows;
8. A bare reading of the definition of the word "decree" shows that:
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(a) a decree conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit; and
(b) a decree may be preliminary or final.
9. The explanation to the sub-section makes it clear that a decree is preliminary when further proceedings have to be taken before the suit can be completely disposed of. It is final when such adjudication completely disposes of the suit. A decree may be partly preliminary and partly final.
10. It is settled law that there can be more than one preliminary decrees in a suit. Similarly, there can be more than one final decrees in a suit.
(Emphasis Supplied)
72. Therefore, in view of the embargo for proceeding with the suit against Defendant No. 2, I propose to dispose of the present suit only against defendant No. 1 by dismissing the suit against defendant No. 1.
73. On termination of the winding-up proceedings, the plaintiff is at liberty to move an application in the present disposed off suit to continue the suit against defendant No. 2. In such an event, since the present suit has been 59 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 disposed of in CIS for statistical purposes, the suit against defendant No. 2 shall be continued under new registration number. Accordingly, I proceed to pass the following :-
ORDER The suit is dismissed against defendant No. 1, with cost.
Office to draw decree accordingly.
It is clarified that as per the orders of this court dated 5-4-2024, the suit against defendant No. 2 has been stayed in view of the winding-up order against defendant No.
2. For this reason, the present suit is being disposed off only as against defendant No.
1. Upon termination of winding-up proceedings against defendant No. 2, and if the suit can proceed against defendant No. 2, it is open to the plaintiff to move an 60 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 application in the present disposed off suit to continue the suit against defendant No.
2. In such an event, the case will be registered in new commercial OS No. for statistical purposes, and the suit shall continue under the new number, only against defendant No. 2 from the stage which the suit had reached when it was stayed against defendant No. 2.
Ordered accordingly.
Office to issue soft copy of this
judgment to both sides by email if
furnished.
[Dictated using Dragon Professional Speech Recognition Software Version 15.3, transcript revised, corrected, signed and then pronounced by me in open court on this the 06th day of January, 2025] (Sri. S. Sudindranath) LXXXIII ADDL.CITY CIVIL AND SESSIONS JUDGE, COMMERCIAL COURT; BANGALORE.
61CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 ANNEXURE
1. List of witnesses examined on behalf of Plaintiff:
PW1 : I.M.Agadoorappa
2. List of witnesses examined on behalf of Defendants:
DW1: D.Ravikumar
3. List of documents marked on behalf of Plaintiff:
Ex.P1 : Certified copy of memorandum of understanding Ex.P2 : Certified copies of two cheques given by the defendants which were produced before CMM Court Ex.P3 : Certified copy of notice dated 2.4.2015 Ex.P4 : Copy of Bank Statement Ex.P5 : Certified copy of agreement dated 6.12.2007 Ex.P6 : Certified copy of memorandum of understanding Ex.P7 : Copy of letter of Ankit Bansal to Bank Ex.P8 : Copy of letter sent to Bank.
Ex.P9 : Certified copy of order of
Hon'ble High Court of Karnataka
Ex.P10 : Certified copy of email
Ex.P11 : Copy of letter written by plaintiff on
21.4.2011
Ex.P12 : Copy of letter of the defendant
Ex.P13,14 : Copy of two letters of defendant Ex.P15 : Certified copy of company profile and brochure of defendant Ex.P16 : Certified copy of plaint in O.S.996/2014 Ex.P17 : Certified copy of complaint in C.C.12451/2015 Ex.P18 : Copy of petition in Criminal Petition No.4486/2016 Ex.P19 : Certified copy of complaint filed by tenant Ex.P20 : Copy of MOU with tenant Ex.P21 : Copy of lease agreement 62 CT 1390_Com.OS.130-2018_Judgment.doc KABC170102332020 Ex.P22 : Copy of order in W.P.28538/2015 Ex.P23 : Copy of Board resolution dated 1.2.2008 Ex.P24,25 : Office copy of letter dated 21.2.2010 and postal receipt Ex.P26 : Letter dated 28.10.2011 Ex.P27 : Letter dated 15.7.2014 Ex.P28 : Letter dated 23.8.2014 Ex.P29 : Copy of letter written by plaintiff to defendant Ex.P30 : Letter dated 9.3.2015 Ex.P31,32 : Letter dated 16.11.2016 along with postal receipt Ex.P33 : Agreement of sale dated 15.12.2008 Ex.P34 : Certified copy of sale deed dated 20.7.1999 Ex.P35 : Certified copy of sale deed dated 6.12.2007 Ex.P36 : Certified copy of sale certificate dated 19.3.2016 Ex.P37 : Original MOU dated 6.12.2007 Ex.P38 : Original agreement dated 6.12.2007 Ex.P39 : Another agreement dated 6.12.2007 Ex.P40 : Another agreement dated 14.12.2007 Ex.P41 : Bundle of documents Ex.P42 : Agreement between defendant No.2 company and Axis Bank.
Ex.P43 : Letter issued by defendant No.2 company to the plaintiff.
4. List of documents marked on behalf of Defendants:
Ex.D1 : Certified copy of judgment
Ex.D2 : Certified copy of Deposition
Ex.D3 : Certified copy of Cross examination
Ex.D4 : Order of Hon'ble High Court of Karnataka
Ex.D5 : Certified copy of Deposition of plaintiff in
Anekal court
(Sri. S. Sudindranath)
LXXXIII ADDL.CITY CIVIL AND SESSIONS JUDGE, COMMERCIAL COURT; BANGALORE.