Calcutta High Court
Ajay Kumar Agarwal vs Green Concretex Global Limited on 26 November, 2020
Author: Arijit Banerjee
Bench: Arijit Banerjee
In The High Court at Calcutta
Ordinary Original Civil Jurisdiction
Original Side
Present:
The Hon'ble Justice Arijit Banerjee
G.A. No. 2439 of 2013
G.A. No. 3795 of 2013
G.A. No. 3723 of 2014
in
C.S. No. 286 of 2013
Ajay Kumar Agarwal
...... Petitioner
-Vs.-
Green Concretex Global Limited
...... Respondent
For the Petitioner : Mr. Jayjit Ganguly, Adv.
Mr. Siddhartha Chatterjee, Adv.
Mr. Abir Lal Ghosh, Adv.
For the Respondent : Mrs. Jayati Chowdhury, Adv.
Ms. Rima Das, Adv.
Ms. Ranjana Seal, Adv.
Heard On : 06.04.2015, 03.09.2015, 31.01.2017, 25.07.2017,
28.08.2017, 13.07.2018, 06.09.2018, 16.01.2019,
25.06.2019, 28.06.2019, 17.07.2019, 03.12.2019
05.10.2020, 13.10.2020 & 21.12.2020
CAV on : 13.10.2020
Date of Judgment : 26.11.2020
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Arijit Banerjee, J.:
1. In this suit filed by the petitioner for recovery of unpaid price of goods sold and delivered, the petitioner has taken out two interlocutory applications. The first application being GA No.2439 of 2013 filed on 16.08.2013 for judgment upon admission to the tune of Rs.1,11,51,507/- along with prayers to restrain the respondent from dealing with its properties pending disposal of the suit. The second application being GA No.3795 of 2013 filed on 17.12.2013 is one in the nature of an application under Order XXXVIII Rule 5 of the Code of Civil Procedure. The respondent also filed an application on 29.11.2014 being GA No.3723 of 2014 praying for leave to enter appearance in the suit and for extension of time to file its written statement and counter claim. I propose to deal with the applications in the order in which they were filed.
2. The petitioner's case in short is that between August 2010 and June 2013 he supplied cement to the defendant/respondent. From time to time, the respondent made payments of ad hoc sums. As on March 31, 2012, a sum of Rs.1,31,22,926/- was due and payable by the respondent to the petitioner.
3. In April 2012, the petitioner demanded payment of his outstanding dues from the respondent and refused to effect any further supplies until his dues were paid. The respondent persuaded the petitioner that it would cause its clients to pay directly to the petitioner. The respondent also gave 3 eleven post dated cheques presentable for payment on various dates of June 2013. An ad hoc sum of Rs.18,56,519/- was paid by the respondent to the petitioner in April, 2012.
4. Between April, 2012 and June, 2013, the petitioner supplied further quantities of cement to the respondent. By a balance confirmation statement, the accounts department of the respondent confirmed that as on 28 February, 2013 a sum of Rs.2,72,44,307/- was payable by the respondent to the petitioner.
5. After March, 2013 the petitioner supplied cement worth Rs.3,17,32,700/- to the respondent. The petitioner relies on purchase orders and bills evidencing such supply, copies whereof are annexed to the affidavit-in-reply filed by the petitioner.
6. The post dated cheques that were issued by the respondent in favour of the petitioner were dishonoured upon presentation on the ground - 'Payment Stopped by Drawer'. The petitioner contends that he was never intimated by the respondent that such instruction had been given to the bank.
7. In the aforesaid factual scenario the present suit was filed. In the suit, the petitioner filed an application on or about 16 August, 2013 praying for judgment upon admission to the tune of Rs.1,11,51,507/- and for other reliefs in the nature of attachment before judgment ('the first application'). 4 Subsequently, another application was filed by the petitioner on 17 December, 2013 being GA 3795 of 2013 praying for reliefs also in the nature of attachment before judgment.
8. On the first application, an interim order was passed on 20 August, 2013, by a Learned Single Judge. However, the same was vacated on 2 September, 2013. The petitioner appealed. The Hon'ble Appeal Court disposed of the appeal by an order dated 10 September, 2013, the operative portion whereof reads as follows:
"We have considered the rival contentions. The parties are at the stage when the respondent is yet to file their affidavit. We do not know what is the worth of the respondent. We asked Mr. Banerji, he is unable to apprise us on that score. The acknowledgement of liability pleaded in the petition is not in dispute. The correspondence annexed to the pleadings are relied upon by Mr. Banerji himself where we would find, even in July, 2013 the respondent is asking its debtors to pay Rs.44 Lakhs to the appellant. The dues are not in dispute. The quantification would be done at the appropriate stage. We would have disposed of the application at this stage even relying upon the respondent's statement being made to Court as to the amount of liability. The respondent would not help us in that regard. In such event, we are 5 constrained to hold, the stage has not come when the ad interim order passed by the learned single Judge should be vacated without calling for affidavits. We would, however, modify the same by permitting the respondent to receive payments from ITD - ITD CEM JV and Larsen & Toubro and keep a sum of Rs.87 Lakhs in Axis Bank Limited, Survey Park Branch, where they would have their own account and keep it in a fixed deposit. The respondent would be obliged to submit the fixed deposit receipt with the Registrar, Original Side, to be retained by him till the disposal of the pending application by the learned single Judge."
9. The respondent's application for review of the Hon'ble Appeal Court's order dated 10 September, 2013 was dismissed by an order dated 26 September, 2013.
10. Alleging non-compliance with the order dated 10 September, 2013 by the respondent, the petitioner filed a contempt petition before the Hon'ble Appeal Court being CC No.120 of 2013. By an order dated 13 March, 2015 the Hon'ble Appeal Court in effect held one of the Directors of the respondent to be guilty of contempt of court and ordered that he be sent to prison. Such order of imprisonment was stayed subject to the said Director depositing Rs.20 Lakhs by 16 March, 2015 and Rs.6 Lakhs in course of 13 March, 2015. The contempt application is still pending. 6
11. The petitioner's submission is that his claim is undisputed and hence an admitted one. The respondent's accounts department had continuously acknowledged amounts due to the petitioner. The last of such acknowledgment was on 28 February, 2013 when the admitted amount payable to the petitioner was shown to be Rs.2,72,44,307/-. Thereafter, between 1 March, 2013 and July, 2013 further cement worth Rs.3,17,32,200/- was supplied by the petitioner to the respondent. Since May, 2012, one ITD-ITD CEM JV, KMRCL Project, which was one of the clients of the respondent made payments to the petitioner amounting to Rs.4,78,25,000/- as per the direction of the respondent.
12. It was submitted that the claim of the petitioner being undisputed and cheques having been issued in acknowledgment of the dues, the respondent squarely admitted the petitioner's claim.
13. In respect of the prayer for orders in the nature of attachment before judgment, Learned Counsel for the petitioner submitted that the respondent acted in a mala fide manner. By giving post dated cheques in acknowledgment and admission of a debt, the respondent induced the petitioner to continue to supply cement and thereafter surreptitiously issued 'stop payment' instructions to the Bank resulting in dishonour of the cheques. Thereafter, the respondent violated the order of the Hon'ble Appeal Court dated 10 September, 2013 by opening a new account and diverting its funds through the said account. The respondent had also misled the Hon'ble Appeal Court by filing a forged Audit Certificate. The respondent has also 7 transferred its business interest to one of its associate concerns namely, one Jainco Projects (India) Ltd. In this connection, Learned Counsel relied on a letter dated 1 April, 2013 written by the said Jainco Projects (India) Ltd. to one Diamond Heritage Enterprises. It was submitted that the dishonest conduct of the respondent clearly indicates that it is likely to secrete or dispose of its assets with fraudulent intent of defeating the petitioner's legitimate claim by rendering infructuous the decree that the petitioner is likely to obtain in this suit. Hence, protective orders in the nature of attachment before judgment have been prayed for.
14. Learned Counsel for the respondent submitted that the respondent has affirmed a written statement which was annexed to the special leave petition filed by it against an order of the Division Bench of this Court. In such written statement, the respondent has rebutted the presumption of liability that arises by issuing a cheque and has made a counter claim of Rs.1,20,32,744/-. The application of the respondent for extension of time to file the written statement being GA No.3723 of 2014 is pending adjudication.
15. It was submitted that the purported admission by the respondent can at the highest be to the tune of Rs.87,46,313/- being the aggregate amount of the eleven cheques issued by the respondent in favour of the petitioner. Pursuant to the orders of the Hon'ble Division Bench, the respondent has deposited an aggregate amount of Rs.87 Lakhs with the Registrar, Original Side of this Court which has been invested in an interest bearing fixed deposit account. Further, the respondent's bank account maintained with 8 Axis Bank, Prince Anwar Shah Road Branch, being account no.913020041961785 is lying attached pursuant to an order dated 20.12.2013 passed by this Court. An amount of Rs.6,13,432.87/- is lying to the credit of the said account. Thus, the entire amount of the eleven cheques has already been secured by the respondent.
16. Insofar as the balance amount of Rs.25,20,094/- is concerned, it was submitted that there is no admission on the part of the respondent acknowledging liability with regard to such amount. Only a bald averment has been made by the petitioner in that regard, on the basis of which no decree can be passed.
17. Learned Counsel submitted that the order dated 10 September, 2013 was passed by the Hon'ble Division Bench merely as an interim arrangement pending final disposal of the present application. Neither the said order nor the order dated 26 September, 2013 whereby the review application of the respondent was dismissed, contains any adjudication on the merits of or on the finality of the alleged claim of the petitioner or in respect of any admission warranting the passing of a judgment on the basis thereof.
18. As regards the certificate dated 4 September, 2014 issued by S. Manoranjane and Associates through its associate Ranjan, it was contended that the same is merely a certificate of the books of accounts and records maintained by the respondent. A proper scrutiny of the said records and the 9 bank statements of the respondent will demonstrate that it has made excess payment to the petitioner. It was then submitted that the bills raised by the petitioner on the respondent did not always correctly indicate the quantity of cement supplied by the petitioner and the actual market price thereof. This has resulted in excess billing to the tune of Rs.9,92,870/- which is recoverable from the petitioner.
19. As regards the eleven post dated cheques issued by the respondent in favour of the petitioner for an aggregate amount of Rs.87,46,313/-, it was submitted that such cheques were issued not towards discharge of any existing liability or payment of any existing debt or in admission of any indebtedness. The cheques were issued as by way of security only and it was agreed and understood by and between the parties that the accounts would be finalized on mutual discussion and upon scrutiny of the bills. It was also agreed by and between the parties at the time of handing over of the eleven post dated cheques by the respondent to the petitioner that the respondent would thenceforth release payments to the petitioner through its customers from whom substantial amounts were due to the respondent on account of price of ready mix concrete supplied by the respondent to them. It was specifically agreed that the petitioner would not present for payment any of the post dated cheques till finalization of accounts and upon receipt of the amount covered by the said cheques from the customers of the respondent, the petitioner would return the cheques to the respondent. Between 2 May, 2012 and 3 August, 2013 the petitioner received an amount of not less than Rs.11,48,25,000/- from ITD - ITD CEM JV 46 an account of the respondent. 10 In spite of receipt of such substantial sums of money, the petitioner did not return the post dated cheques to the respondent. On the contrary, the petitioner wrongfully presented the said cheques for encashment which were dishonoured without any fault on the part of the respondent. Inasmuch as the petitioner was aware of the real purpose behind the issuance of the post dated cheques, he did not initiate any proceedings under the provisions of the Negotiable Instruments Act, 1881 against the respondent or its officers for dishonour of any of the said cheques.
20. Despite being repeatedly requested by the respondent, the petitioner refused to finalize and settle the accounts or hand over to the respondent the ledger account. Instead of resolving the entire issue, the petitioner has instituted the present mis-conceived suit claiming an amount of Rs.1,11,51,507/-.
Court's view:
Re: GA 2439 of 2013
21. The petitioner's case in short is that from time to time he supplied cement to the respondent. Payments were received by the petitioner from the respondent against the bills raised by the petitioner. Payments were also received by the petitioner from a customer of the respondent being one ITD - ITD CEM JV 46, which owed money to the respondent. The petitioner contends that after giving credit for all payments received from or on behalf of the respondent, a sum of Rs.1,11,51,507/- was due and payable to the 11 petitioner by the respondent as on the date of filing of the suit. The petitioner has filed two applications. The first application is for judgment upon admission of the amount claimed in the suit and also for reliefs in the nature of attachment before judgment. The second application is for further reliefs in the nature of attachment before judgment.
22. The petitioner bases his claim for judgment upon admission on two pillars. Firstly, the petitioner relied on balance confirmation statements issued by the respondent's accounts department. Secondly, the petitioner relies on eleven post dated cheques for an aggregate amount of Rs.87,46,313/- which had been handed over by the respondent to the petitioner on 16 April, 2012, payable on various dates between 15 July, 2013 and 29 July, 2013. These cheques were admittedly dishonoured when presented for encashment.
23. Learned Counsel drew to my attention to the balance confirmation statements issued by the respondent's accounts office. Firstly, Learned Counsel drew my attention to the copy of the respondent's ledger account maintained for the petitioner for the period 1 April, 2012 to 5 November, 2012. The same shows a credit balance of Rs.1,84,10,107/-. My attention was also drawn to a copy of the ledger account maintained by the petitioner as regards his transactions with the respondent for the period 1 April, 2013 till 31 July, 2013 (Annexure - I to the petitioner's first petition affirmed on 14 August, 2013). That shows a credit balance of Rs.1,11,51,507/-. This annexure has been pleaded in Paragraph 25 of the petitioner's first petition. 12 Paragraphs 20 to 25 of the said petition have been dealt with by the respondent at Paragraph 10 of its affidavit-in-opposition affirmed on 4 June, 2015. In that Paragraph the respondent contends that the purported balance confirmations are manipulated and have been obtained by the petitioner by illegally gratifying an ex-employee of the respondent. It is further stated that the respondent makes no admission with regard to the correctness, truth and contents of the purported ledger being Annexure - I. This does not amount to denial. Not admitting does not amount to denial. In other words, the respondent has not denied the contents of Annexure - I to the petitioner's first petition. If that be so, then it follows that the respondent admitted that as on 31 July, 2013 a sum of Rs.1,11,51,507/- was due and payable by the respondent to the petitioner.
24. Order VIII Rule 3 of the Code of Civil Procedure requires denial of a fact to be specific. It says that "it shall not be sufficient for a defendant in his written statement to deny generally the grounds alleged by the plaintiff, but the defendant must deal specifically with each allegation of fact of which he does not admit the truth, except damages." Rule 4 under Order VIII of the Code of Civil Procedure practices, inter alia, that "where a defendant denies an allegation of fact in the plaint, he must not do so evasively, but answer the point of substance." In other words, denial must be clear and not vague or evasive.
25. In this connection, let me refer to a few decisions. In M. Venkataramana Hebbar (Dead) v. M. Rajagopal Hebbar & Anr.: (2007) 6 13 SCC 401 at Paragraph 13 of the Judgment the Hon'ble Supreme Court observed that if a plea which was relevant for the purpose of maintaining a suit has not been specifically traversed, the Court is entitled to draw an inference that the same has been admitted. A fact admitted in terms of Section 58 of the Evidence Act need not be proved. The meaning of 'Traverse' as given in Black's Law Dictionary (11th Edition) is a formal denial of a factual allegation made in the opposite party's pleading.
26. Dealing with Rules 3, 4 and 5 under Order VIII of the Code of Civil Procedure, the Supreme Court, in the case of Badat & Co. Bombay v. East India Trading Co.: AIR 1964 SC 538 at Paragraph 11 of the Judgment observed as follows:
"These three rules form an integrated code dealing with the manner in which allegations of fact in the plaint should be traversed and the legal consequences flowing from its non-compliance. The written statement must deal specifically with each allegation of fact in the plaint and when a defendant denies any such fact, he must not do so evasively, but answer the point of substance. If his denial of a fact is not specific but evasive, the said fact shall be taken to be admitted. In such an event, the admission itself being proof, no other proof is necessary. The first para of Rule 5 is a reproduction of Order 19, Rule 13 of the English rules made under the Judicature Acts. But in 14 mofussil Courts in India, where pleadings were not precisely drawn, it was found in practice that if they were strictly construed in terms of the said provisions, grave injustice would be done to parties with genuine claims. To do justice between those parties, for which Courts are intended, the rigor of Rule 5 has been modified by the introduction of the proviso thereto. Under that proviso the Court may, in its discretion, require any fact so admitted to be proved otherwise than by such admission."
27. In the affidavit-in-opposition filed by the respondent in connection with the first application, it has been contended that the balance confirmations were procured by the petitioner from one Ashok Tiwari who was an employee of the respondent but who had no authority to sign or issue any balance confirmation statement. It was contended that the balance confirmations were issued by Ashok Tiwari for extraneous and illegal considerations. However, no such case has been run in the written notes of arguments filed by the respondent nor was any such submission made in the course of oral argument. Obviously, the respondent has not pressed this point. In any event, I am not prepared to accept such contention of the respondent. All acknowledgments since 2010-11 appear to have been signed by the same person, Ashok Tiwari, who happened to be the Chief Manager, Accounts Department of the respondent. The petitioner's accounts/ledger for the period November, 2012 to end February, 2013 was served on the respondent and received by its accounts department. Three 15 persons have tallied and signed the accounts. The last acknowledgment was signed by three persons including one Mr. R. Naidu who had signed all purchase orders on behalf of the respondent. No case has been run by the respondent that the other two persons were also colluding with the petitioner.
28. As regards the dishonoured cheques, the respondent argued that the same were given to the petitioner by way of security. The cheques were not meant to be presented for encashment. This contention also is not acceptable. The bald allegation in the respondent's pleading that it was the usual practice of giving security cheques, is not supported by any evidence. There is also no explanation as to why post dated cheques were suddenly handed over only in April, 2012. It is also strange that 'stop payment' instructions in respect of the alleged security cheques were issued by the respondent without any reference to the petitioner. Moreover, it is the respondent's case that it has made excess payment to the petitioner. If that be so, why would the respondent hand over the post dated cheques to the petitioner? I am not inclined to accept that the said cheques were furnished as security. The respondent is clearly trying to weave a yarn.
29. The respondent bases its claim of having made excess payment on alleged audited accounts. However, it appears from a document downloaded by the petitioner from the website of the Ministry of Corporate Affairs, Government of India (Page 37 of A/R dated 13 July, 2015) that the last Annual General Meeting of the respondent company was held on 30 16 September, 2011 and the last balance sheet was dated 31 March, 2011. In other words, respondent's accounts were not audited after that date.
30. Yet another point which indicates the shifting stand of the respondent which cannot be relied upon is that while before the Hon'ble Appeal Court and the Hon'ble Supreme Court as also in the draft written statement that the respondent annexed to the special leave petition, it is stated that the respondent has wrongly made an excess payment of approximately Rs.87 lakhs, in the affidavit-in-opposition filed by the respondent in the present proceeding it is claimed that it has made excess payment of Rs.1,20,32,744/- to the petitioner. Such inconsistent statements of the respondent also detract from its credibility.
31. Still further, the respondent relied on a purported certificate dated 4 September, 2014 allegedly issued by S. Manoranjane and Associates, Chartered Accountants certifying that the ledger of Ajay Kumar Agarwal, in the books of accounts of M/s Green Concretex Global Limited (the respondent), for the Financial Years 2011-12, 2012-13 and 2013-14 have been examined by them. This purported certificate was annexed by the respondent's Director to the affidavit-in-opposition filed in the contempt proceeding filed before the Hon'ble Appeal Court. However, it appears from annexure 'G' to the petitioner's affidavit-in-reply that such certificate is a manufactured document. Letters dated 30 April, 2015 and 8 May, 2015 written by the said S. Manoranjane & Associates to the petitioner's Advocate are included in Annexure 'G' to the petitioner's affidavit-in-reply. In such 17 letters, the proprietor of the said firm has categorically stated that his firm did not examine any account ledger of Ajay Kumar Agarwal in the books of M/s. Green Concretex Global Limited nor the said firm issued the purported certificate relied upon by the respondent in that regard.
32. The case that has been run by the respondent is not credible. There was no reason or occasion for the respondent to furnish security to the petitioner in the form of the aforesaid cheques which was subsequently dishonoured. The respondent has clearly concocted a story which cannot be accepted. This is unfortunate but nothing new. We have come across stories being churned out in a desperate attempt to raise a defence to an otherwise indefeasible claim. I have no doubt that the present case is one of them.
33. The defence sought to be raised in the present proceeding, in my opinion, is incongruous, vague, nebulous and convoluted. The defence is moon shine. In my opinion, no triable issue has been raised by the respondent to the extent of the amount covered by the cheques furnished by the respondent to the petitioner which were dishonoured. It will be a travesty of justice to relegate such claim of the petitioner to trial. The object of Order XII Rule 6 of the Code of Civil Procedure is to enable a party to obtain a speedy judgment at least to the extent of the admission made by the other party. The admission may be in the pleading or otherwise. A pre- suit admission would also suffice. In the present case, I have no reason to believe that the balance confirmations were procured by the petitioner dishonestly. The confirmation statements clearly amount to admission. The 18 cheques furnished by the respondent to the petitioner also amount to admission of liability to the extent of the aggregate amount of the cheques.
34. If frivolous defences are allowed to stand in the way of the petitioner obtaining expeditious judgment to the extent of the admission made by the respondent, the purpose of Order XII Rule 6 would be defeated. Recalcitrant and unscrupulous parties to a litigation often raise imaginary and meritless disputes and defences only with a view to protracting the litigation and delaying grant of relief to the other party. This cannot be encouraged.
35. The petitioner has prayed for a judgment upon admission to the tune of Rs.1,11,51,507/-. However, the amount covered by the eleven post dated cheques issued by the respondent in favour of the petitioner is Rs.87,46,313/-. By issuing the said cheques, the respondent has in unequivocal terms admitted its liability to the petitioner in the aforesaid sum. The explanation sought to be furnished by the respondent that the post dated cheques were meant to be security only and not meant for discharging any debt towards the petitioner is not acceptable to me for the reasons I have indicated above. However, no computation is shown in the petition as to how the figure of Rs.1,11,51,507/- has been arrived at by the petitioner. I am inclined to pass a final judgment and decree only for the sum of Rs.87,46,313/-.
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36. Accordingly, there will be a final judgment and decree in favour of the petitioner for the sum of Rs.87,46,313/-. The rest of the petitioner's claim in the suit including claim on account of interest, if any, shall stand to trial.
37. The petitioner shall be entitled to costs of this application assessed at Rs.20,000/- (Rupees Twenty thousand only).
38. G.A. No.2439 of 2013 is accordingly disposed of.
Re: GA 3795 of 2013
39. This is the second interlocutory application made by the petitioner praying for orders in the nature of attachment before Judgment to secure the petitioner's claim against the respondent.
40. The respondent has not used any affidavit-in-opposition to this application. In the written notes of arguments filed by the respondent, there is no rebuttal of the petitioner's case in the present application. The allegations made in this application are of a serious nature.
41. Learned Counsel for the petitioner drew my attention to the Hon'ble Appeal Court's order dated 10 September, 2013 which was passed in the appeal filed by the petitioner from the order of the Learned Single Judge vacating the initial interim order. The Hon'ble Appeal Court permitted the respondent to receive payments from ITD ITD-CEM JV and Larsen and Toubro and to keep a sum of Rs.87 lakhs in Axis Bank, Survey Park Branch in a fixed deposit. The application for review of the said order was dismissed 20 by the Hon'ble Appeal Court by its order dated 26 September, 2013. Learned Counsel for the petitioner submitted that to overreach the said order the respondent started using a separate bank account which it had suppressed from the Court and started diverting its funds to such bank account being Account No.913020041961785 held with Prince Anwar Shah Road Branch of the Axis Bank.
42. It was further submitted that since 20 August, 2013 till the date of filing of the second petition (i.e. 16 December, 2013) the respondent received payments amounting to at least Rs.2.52 crores and deposited it in the said bank account held with Axis Bank, Prince Anwar Shah Road Branch. However, such amount and also an amount of Rs.1,18,91,125/- which was received by the respondent from ITD ITD-CEM-JV and was deposited in the said bank account, was withdrawn soon thereafter in violation of the Learned Single Judge's order dated 20 August, 2013 passed in GA No.2439 of 2013.
43. It was further submitted that on 21 September, 2013 i.e. after the order dated 10 September, 2013 was passed by the Hon'ble Appeal Court, a sum of Rs.46,51,348/- was received by the respondent from ITD ITD-CEM JV vide cheque no.24810 which was deposited in the account maintained with the Axis Bank, Survey Park Branch but that money was withdrawn immediately. The further allegation is that on 27 September, 2013, i.e. after the review application was dismissed by the Hon'ble Appeal Court on 26 September, 2013, the respondent collected a further sum of Rs.86,98,609/- 21 from ITD ITD-CEM JV vide cheque no.24861. This cheque was deposited in the account of the respondent held with Prince Anwar Shah Road Branch of Axis Bank. Instead of creating a fixed deposit as directed by the Hon'ble Appeal Court, this money was withdrawn and siphoned off.
44. The aforesaid may not be strictly relevant any more since admittedly the respondent has deposited a sum of approximately Rs.87 lakhs with the Registrar of this Court after facing contempt proceedings. However, the aforesaid allegations, which I have to accept as true in the absence of any rebuttal thereof indicate the less than honest conduct of the respondent and the persons at the helm of its affairs.
45. Learned Counsel for the petitioner has also submitted with reference to Paragraph 17 of the petition that the two persons who are in control of the respondent company and are also its directors, are directors and share- holders in at least 44 other private limited companies. Supporting documents have been included in Annexure - 'O' to the petition. While it may not be illegal for two persons to promote 44 or more private limited companies, the same is certainly a little unusual and in the present factual context and the conduct of the respondent, the same raises reasonable doubts in my mind about the honesty and integrity of those persons who are also the person in control of the respondent company.
46. My attention has also been drawn to documents, copies whereof are included in Annexure - 'Q' to the petition, which demonstrate that the 22 respondent having supplied material to one Austin Distributors (P) Ltd. vide challan no.8 dated 16.04.2013, the bill was raised in the name of one Jainco Projects (India) Limited for such supply. Learned Counsel for the petitioner submitted that this is just one instance of the respondent diverting its business to sister/associate concerns.
47. It was further submitted that the respondent has virtually no assets. Its plant and machinery are on hire from inter alia SREI Infrastructures Limited. The land where the respondent's plant is situated is a tenanted property. The registered office of the respondent is situated in an office- space of which the respondent is not the owner. The respondent's plant is presently not in operation.
48. On the basis of the above allegations, Learned Counsel for the petitioner submitted that the conduct of the respondent is dishonest. Unless orders as prayed for are passed, the respondent shall divert/siphon off its funds and secrete whatever little asset it has with a view to rendering infructuous the decree that is likely to be passed in favour of the petitioner.
49. I have also heard Learned Counsel for the respondent. It was submitted from the Bar that the allegations made in the petition are baseless. The respondent has sufficient assets. No order should be passed on the application.
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50. I am conscious that Courts do not ordinarily secure money claims. However, Order XXXVIII Rule 5 and Order XXXIX Rule 1 of CPC make an in reach to this general principle. Order XXXVIII Rule 5 (1) in essence provides that when the court is satisfied that the respondent, with intent to obstruct or delay the execution of any decree that may be passed against him is about to dispose of the whole or any part of his property or is about to remove the whole or any part of his property from the local limits of jurisdiction of the courts, the court may direct the respondent to furnish security as may be sufficient to satisfy the decree that may be passed against him. Order XXXIX Rule 1(b) is to the effect that where it is shown that the respondent threatens or intends to remove or dispose of his property with a view to defrauding his creditors, the court may by an order of injunction restrain such act or make such other order for the purpose of staying and preventing the alienation, sale, removal or disposition of such property. These rules are exceptions to the general rule that a purely monetary claim will not be secured by a court of law.
51. In the present case, I have recorded my observations regarding the highly dissatisfactory conduct of the respondent while disposing of GA No.2439 of 2013. I do not intend to repeat such observations here. It appears that the respondent has tried to overreach orders of this Court. It was only under the threat of contempt that the respondent finally complied with the Hon'ble Appeal Court's order directing it to deposit security with the Registrar of this Court. There is at least one instance of the respondent having supplied goods to its customers and having raised the invoice in the 24 name of an associate/sister concern. This is an obvious ploy to divert funds of the respondent so that its creditors including holders of decrees against it will not have access to such funds. The respondent has not filed its balance- sheet since 2013. The respondent suppressed from the Hon'ble Appeal Court that apart from its bank account held with the Survey Park Branch of Axis Bank, it had another account with the Prince Anwar Shah Road Branch of the same Bank. The respondent also appears to have produced forged certificate of auditor before this Court. In short, the respondent's conduct lacks probity and is nothing short of dishonest. The respondent has also not filed any document whether by way of affidavit or otherwise to indicate that it possesses assets against which the petitioner may proceed for execution of any decree that the petitioner may obtain in the suit.
52. On an overall assessment of the facts and circumstances of the case as recorded above, I am of the considered view that this is a fit case where restraint orders should be passed against the respondent, as prayed for, by way of interim measure, pending disposal of the suit.
53. Approximately Rs.87 Lakhs has been deposited by the respondent with the Registrar, Original Side, of our Court. The claim of the petitioner in the suit is for a sum of Rs.1,11,51,507/-. There is a further claim for interest. The petitioner has also prayed for an enquiry into damages that he has suffered. In the petition the petitioner has mentioned only two bank accounts of the respondent both held with Axis Bank Limited, one at the Survey Park Branch and the other at Prince Anwar Shah Road Branch. 25 There will be an order of injunction restraining the respondent from withdrawing any amount from either of these two accounts without leaving at least a sum of Rs.25 lakhs in the aggregate taking the two bank accounts together. The respondent is also restrained by an order of junction from disposing of its immovable assets, if any, without giving at least one (1) months prior notice to the petitioner. These orders of injunction shall continue till the disposal of the suit.
54. The petitioner shall be entitled to costs of this application assessed at Rs.20,000/- (Rupees Twenty thousand only).
55. G.A. No.3795 of 2013 is accordingly disposed of.
Re: GA 3723 of 2014
56. This is an application filed by the respondent for leave to enter appearance in the suit and for extension of time to file the written statement and counter claim.
57. I have heard Learned Counsel for the parties. I am not however satisfied with the explanation sought to be advanced by the respondent for its failure to file written statement within the stipulated time period. However, courts are slow to shut out statements of defence even when the respondent has not acted with diligence. However, in an appropriate case, the Court puts the respondent on terms.
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58. In the premises, the present application is allowed. There will be an order in terms of prayers (a), (b) & (c) of the petition. The time for the respondent to enter appearance in the suit and file its written statement/counter claim is extended by six (6) weeks from date upon payment of costs assessed at Rs.10,000/- (Rupees Ten thousand only). Such cost is to be paid to State Legal Services Authority, West Bengal within four (4) weeks from date. The department shall accept the written statement only upon production of evidence of payment of such cost.
59. G.A. No.3723 of 2014 is accordingly disposed of.
Urgent certified photocopy of this judgment and order, if applied for, be given to the parties upon compliance of necessary formalities.
(Arijit Banerjee, J.)