Karnataka High Court
M/S M S M Constructions And Developers vs Smt Vidya P K Jain on 18 April, 2023
Author: B M Shyam Prasad
Bench: B M Shyam Prasad
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WP No. 20169 of 2021
C/W WP No. 21800 of 2021
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 18TH DAY OF APRIL, 2023
BEFORE
THE HON'BLE MR JUSTICE B M SHYAM PRASAD
WRIT PETITION NO. 20169 OF 2021 (GM-CPC)
C/W
WRIT PETITION NO. 21800 OF 2021 (GM-CPC)
IN WP NO. 20169/2021:
BETWEEN:
M/S M S M CONSTRUCTIONS AND
DEVELOPERS, OFFICE AT SMS
ORCHID APARTMENT,
FLAT NO.406, BETHAL NAGAR,
3RD MAIN ROAD, AYYAPPA NAGAR TO
KODIGEHALLI MAIN ROAD,
K R PURAM, BANGALORE-560036
REP BY ITS MANAGING PARTNER,
SRI M SUBBARAYUDU,
Digitally S/O LATE SUBBANNA,
signed by AGED ABOUT 52 YEARS.
NARASIMHA
MURTHY ...PETITIONER
VANAMALA (BY SMT. SUSHEELA, SENIOR ADVOCATE FOR
Location: SRI. NARAYANA SWAMY P M.,ADVOCATE)
HIGH
COURT OF AND:
KARNATAKA
1. SMT VIDYA P K JAIN
W/O PAVAN KUMAR JAIN,
AGED ABOUT 38 YEARS,
R/AT NO.94/24, GTR VILLAI 3RD CROSS,
HENNUR MAIN ROAD, LINGARAJAPURAM,
BANGALORE-560084
REP BY HER GPA HOLDER,
MY PAVAN KUMAR JAIN.
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WP No. 20169 of 2021
C/W WP No. 21800 of 2021
2. M/S DREAMZ INFRA INDIA LTD
A COMPANY INCORPORATED
UNDER COMPANIES ACT
NO.577/B, 2ND FLOOR, OUTER RING ROAD,
TEACHERS COLONY KORAMANGALA,
NEAR SILK BOARD, BANGALORE-560034
REP BY ITS MANAGING DIRECTOR,
MR DISHA CHOUDHARY.
3. SRI ASHOK KRIPLANI
S/O LATE TEKCHAND,
MAJOR, IRP, DREAMZ INFRA INDIA LTD.,
NO.381, FLAT NO.103,
7TH BLOCK, KORAMANGALA,
BANGALORE
THE RESOLUTION PROFESSIONAL.
4. MR. DENAL CHRISTOPHER BERNARD
S/O ANTHONY D.A. BERNARD
AGED ABOUT 34 YEARS
RESIDING AT FLAT NO. 3
IVORY MANOR APARTMENT
OPP. MARUTHI VIDYALAYA
BABUSAPALYA, BANGALORE - 560 033.
REPT BY HIS GPA HOLDER
MR. ANTHONY D.A. BERNARD.
5. MRS. KOMALA MAHESH
W/O K.G. MAHESH KUMAR
AGED ABOUT 61 YEARS
RESIDING AT NO.18
2ND CROSS HENNUR MAIN ROAD
LINGARAJAPURA BANGALORE 560 084.
REPT BY HER GPA HOLDER
MR. K.G. MAHESH KUMAR.
6. MR. V.K. ASHISH KUMAR
S/O LATE RAMUNNI NAIR
AGED ABOUT 45 YEARS
RESIDING AT, SARATH HOUSE
PUMMASSERY POST, VIA NARIKUNNI (DIST)
KOZIKODE, KERALA 673 585.
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WP No. 20169 of 2021
C/W WP No. 21800 of 2021
7. MR. UDAY KUMAR ULLAL
S/O ULLAL GAJAMAN RAO
AGED ABOUT 50 YEARS
RESIDING AT PLOT NO. B/8
SANSKAR CHS, AKRULI MHADA
1ST CROSS, KADDIVALLI EAST
MUMBAI 400101.
REPT BY HIS GPA HOLDER
MS. YOGITHA PAI.
8. MS. YOGITHA PAI
D/O SINGA PRABHU
AGED ABOUT 43 YEARS
RESIDING AT NO. 373,
OPP NATIVITY CHURCH,
AMS LAYOUT VIDYARANYAPURA
BANGALORE 560 097.
...RESPONDENTS
(BY SMT.CHAITRA G., ADVOCATE FOR
SRI. T.M. VENKATA REDDY, ADVOCATE FOR R1;
SMT. NEHA SHETTY, ADVOCATE FOR
SMT. LAKSHMI MENON, ADVOCATE FOR
R2 AND R3;
SRI. P.S. RAJENDRA ADVOCATE FOR R4 TOR R8)
THIS WRIT PETITION IS FILED UNDER ARTICLE
227 OF THE CONSTITUTION OF INDIA PRAYING TO
QUASH THE IMPUGNED ORDER DATED 6.9.2021 ON IA
NO.11 UNDER ORDER 21 RULE 26 R/W SECTION 151
OF CPC IN COM.EX NO.3193/2017 AS ANNEXURE-A
PASSED BY THE LXXXIX ADDL CITY CIVIL AND
SESSIONS JUDGE BANGALORE.
IN WP NO.21800/2021:
BETWEEN:
1. SMT. VIDYA P K JAIN
W/O PAVAN KUMAR JAIN
AGED ABOUT 38 YEARS
R/AT NO. 94/24, GTR VILLAI
3RD CROSS HENNUR MAIN ROAD,
LINGARAJAPURAM
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WP No. 20169 of 2021
C/W WP No. 21800 of 2021
BANGALORE 560084
REP BY HER GPA HOLDER
MR. PAVAN KUMAR JAIN.
2. SRI. ANKIT KUMAR SINGH
S/O RAM VINAY SINGH
AGED ABOUT 31 YEARS
R/AT NO. E-36
SHIVALOK COLONY RAIPUR ROAD,
DEHRODUM 248008.
3. SRI. J, RAVI KUMAR
S/O P. KUPPAN
AGED ABOUT 59 YEARS
R/AT NO. 327, 6TH D CROSS
OMBR LAYOUT, BANGALORE 560043.
4. SRI K.K. SURESH BABU
S/O R.K. KALIDAS
AGED ABOUT 46 YEEARS
R/AT NO. 12, GROUND FLOOR
SANJEEV REDDY ROAD,
2ND CROSS, SUBBANNA PALYA
BANGALORE 560033.
5. SRI JAI PRAKASH NARAYAN PANDEY
S/O LATE SRINATH PANDEY
AGED ABOUT 75 YEARS
R/AT NO. 890/5B
PONGHAT NEAR PONGHAT POOL
DHAMAU GUNI, ALLAHABAD U.P.
REP BY HIS GPA HOLDER
SRI. SANTHOSH KUMAR PANDEY
S/O JAYAPRAKASH NARAYAN PANDEY
AGED ABOUT 37 YEARS
...PETITIONERS
(BY SMT. CHAITHRA G., ADVOCATE FOR
SRI. T M VENKATA REDDY.,ADVOCATE)
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WP No. 20169 of 2021
C/W WP No. 21800 of 2021
AND:
1. M/S DREAMZ INFRA INDIA LTD.,
A COMPANY INCORPORATED
UNDER COMPANIES ACT,
NO. 577/B, 2ND FLOOR
OUTER RING ROAD
TEACHERS COLONY, KORAMANGALA
NEAR SILK BOARD, BANGALORE 560034
REP BY ITS MANAGING DIRECTOR
MR. DISHA CHOUDHARY.
2. SRI. ASHOK KRIPLANI
S/O LATE TEKCHAND
MAJOR, IRP,
DREAMZ INFRA INDIA LTD
NO. 381, FLAT NO., 103,
7TH BLOCK, KORAMANGALA BANGALORE
THE RESOLUTION PROFESSIONAL.
...RESPONDENTS
THIS WRIT PETITION IS FILED UNDER ARTICLE
227 OF THE CONSTITUTION OF INDIA PRAYING TO
QUASH THE IMPUGNED ORDER DATED 06.09.2021 ON
IA NO.13 UNDER SECTION 151 OF CPC IN
COM.EX.NO.3193/2017 AS ANNX-A PASSED BY THE
LXXXIX ADDL. CITY CIVIL AND SESSIONS JUDGE
BANGALORE.
THESE PETITIONS, COMING ON FOR ORDERS,
THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
These writ petitions are filed by the auction purchaser and the decree holder in Com.Ex. No.3193/2017 on the file of the LXXXIX Additional City Civil and Sessions Judge, Bengaluru, a -6- WP No. 20169 of 2021 C/W WP No. 21800 of 2021 designated commercial Court [for short, 'commercial Court']. The petition in W.P. No.20169/2021 is by the purchaser, and the petition in W.P. No.21800/2021 is by the decree holder. Both the purchaser and the decree holder have called in question the commercial Court's order dated 06.09.2021 and the operative portion of this order reads as under:
"I.A. No. 11 filed under section 151 of CPC to stay the proceedings; and I.A.No:13 filed under section 151 CPC not to dispose or disburse or remit any money deposited in the Court arising of execution proceedings are hereby allowed.
I.A.No:12 filed U/O. XXI Rule 90 and 91 r.w.s.151 CPC to set aside the auction sale concluded in favor of MSM Construction vide auction court sale certificate dated:
14.11.2019 is hereby dismissed.
In view of section 14(4) IBC all further proceedings in the execution proceedings are stayed till completion of Corporate Resolution Process.
The parties are directed to bear their respective costs."
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2. This Court on 22.08.2022 has granted interim orders staying the further proceedings in Com. Ex. No.3193/2017 until conclusion of the Company Appeal [AT] [Ins]-851/2020 is decided before the National Company Law Appellate Tribunal [NCLAT] with the observation that it would be open to the petitioner to seek modification of this order if the circumstances so warrant. Admittedly, the proceedings in Com. Ex. No.3193/2017 is connected with the other execution proceedings commenced by similarly placed persons, who also have the benefit of the decree in their respective suits against the Judgment debtor, and in fact, in consideration of these circumstances, these decree holders are arrayed as additional respondents in the writ petition in W.P. No.20169/2021.
3. Smt. S Susheela, the learned Senior Counsel for the petitioner in W.P. No.20169/2021, places on record the commercial Court's subsequent -8- WP No. 20169 of 2021 C/W WP No. 21800 of 2021 order dated 13.10.2022. The commercial Court by this order dated 13.10.2022 has clarified that the order dated 04.09.2020 in C.P. [IB] No.84/BB/2019 on the file of the NCLAT, Bengaluru would not apply to the present case holding that the concerned respondent shall be entitled to the decretal amount out of the sale price deposited by the auction purchaser-petitioner with further orders calling for the amount in deposit and for transfer of the remaining amount to the Karnataka State Consumer Disputes Redressal Commission as per Resolution dated 27.07.2022. Obviously, the civil Court's order dated 13.10.2022 is notwithstanding this Court's interim order dated 22.08.2022.
4. It cannot be gainsaid that with this Court's interim order dated 22.08.2022, the commercial Court could not have proceeded with the execution proceedings much less pass the aforesaid subsequent order dated 13.10.2022. However, the -9- WP No. 20169 of 2021 C/W WP No. 21800 of 2021 commercial Court has reviewed the impugned order in the light of the NCLAT's order dated 04.09.2020, and it is seen that that NCLAT's order is not referred to in the civil Court's impugned order. Crucially, in the circumstances of the case all the concerned, including the decree holders whose execution proceedings are connected with the present execution case, should have been heard given the import of the impugned order, and they are not heard. This Court is of the considered view that the commercial Court will have to reconsider the entire question of auction and in the light of the proceedings pending against NCLAT's order after hearing all the concerned.
5. Therefore, leaving open all the contentions to be urged by the parties, the petitions stand disposed of dissolving both the impugned order dated 06.09.2021 and the subsequent order dated 13.10.2022 in Com.Ex. No.3193/2017 on the file of the LXXXIX Additional City Civil and Sessions Judge, Bengaluru, restoring the subject applications for
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WP No. 20169 of 2021C/W WP No. 21800 of 2021 reconsideration. The commercial Court in the light of this restoration shall dispose of the application after hearing all the concerned within a period of four [4] weeks.
SD/-
JUDGE AN/-