Delhi District Court
Ado India Pvt. Ltd vs Ashiana Homes Pvt. Ltd on 30 April, 2025
IN THE COURT OF MS. ANU GROVER BALIGA, DISTRICT
JUDGE (COMMERCIAL COURT-04),
SOUTH-EAST DISTRICT
SAKET COURTS, NEW DELHI
CS DJ 37/23
ADO PVT. LTD. VS. ASHIANA HOMES PVT. LTD.
In the matter of:
ADO (INDIA) PVT. LTD.
Office at 580, Agarwal Millennium,
Tower-2, Netaji Shubhash Place,
Pitampura, Delhi-110034.
Email IDs : - [email protected] &
[email protected] ......Plaintiff
Versus
ASHIANA HOMES PVT. LTD.
Section 3-H Plaza
M-6, District Centre
Jasola, New Delhi-110025.
Email ID : [email protected] ......Defendant
Date of institution : 07.01.2023
Date of reserving judgment : 19.04.2025
Date of pronouncement of Judgment : 30.04.2025
SUMMARY JUDGMENT
30.04.2025
1.Vide the present order, I shall decide two applications - one filed by the Plaintiff under Order XIII-A CPC (as amended by the Schedule to the Commercial Courts Act) and the second filed by the Defendant under Order VII Rule 11 CPC.
2. Briefly stated, facts necessary to decide both the aforementioned applications are as follows :-
CS DJ No. 37/23 ADO Pvt. Ltd. Vs. Ashiana Homes Pvt. Ltd. Page 1 of 23(a) The present suit has been filed by the Plaintiff U/s 39 of the Indian Contract Act, 1872, for rescinding of Memorandum of Understanding dated 15.12.2020 executed between it and the Defendant and for seeking recovery of principal amount of Rs. 45,08,000/- from the Defendant. It has been interalia asserted by the Plaintiff that being in the business of manufacturing of UPVC windows and doors, it had provided its services for installation of its products to the Defendant and its sister concerns and that the Defendant has failed to clear the outstanding against the said services / supply of goods.
(b) According to the Plaintiff, the Defendant Company in order to clear its outstanding payments due to the Plaintiff had entered into a Memorandum of Understanding (hereinafter referred to as 'MOU') with the Plaintiff on 15.12.2020 whereby it undertook to execute a Conveyance Deed in respect of the Unit No. 512 comprising super built-up area admeasuring 805 Sq. Ft. on the 5th Floor in project 'Royale Arcade' situated at main Nandan Kanan Road, Raghunathpur, Bhubaneswar, Odisha-751024 (hereinafter referred to as 'the Unit'), in favour of the Plaintiff or the Plaintiff's nominee. The Defendant also agreed that it will render all possible cooperation to the Plaintiff for transfer of the allotment of the said unit in favour a Third Party named by the Plaintiff or a nominee of the Plaintiff as and when requested by the Plaintiff, without any charges being payable by the Plaintiff. The intent behind including the aforesaid term was to enable the Plaintiff to sell/transfer the said property to third parties without incurring any further costs or expense, for the Plaintiff itself was never interested in the allotment of the unit in its favour and had made it clear to the Defendant that it is accepting the said allotment so that it could sell the unit and recover its outstanding due from the Defendant.
(c) The grievance of the Plaintiff is that the Defendant did not honour CS DJ No. 37/23 ADO Pvt. Ltd. Vs. Ashiana Homes Pvt. Ltd. Page 2 of 23 the undertaking given in the said MOU and refused to execute a conveyance deed with respect to the unit in favour of a third party identified by the Plaintiff and that therefore this Court must now declare that the MOU dated 15.12.2020 stands rightly rescinded by the Plaintiff and pass a decree in favour of the Plaintiff for the suit amount.
(d) In its written statement, the Defendant Company has sought to interalia contend that the Plaintiff has concealed the execution of another MOU dated 10.08.2019 between the Plaintiff and a sister concern of the Defendant Company which made it clear that the Plaintiff will not be entitled to any amount from the Defendant Company till conditions in the said MOU dated 10.08.2019 are complied with by the Plaintiff. It has also been asserted that since the Plaintiff has not completed the works in the project 'Ashiana Mulberry' of its sister concern, it cannot demand the Defendant to clear its outstanding. In the application filed under Order VII Rule 11 CPC, the Defendant has also taken an objection that the present suit is not maintainable before a Civil Court in view of the bar imposed by Section 79 of the Real Estate (Regulation and Development) Act, 2016.
(e) In the replication filed, the Plaintiff has sought to aver that the MOU dated 10.08.2019 was between the Plaintiff and the sister concern of the Defendant Company and it has nothing to do with the MOU dated 15.12.2020 executed between the Plaintiff and the Defendant and that even otherwise MOU dated 15.12.2020 made it clear that it superseded all previous agreements between the parties. Further in reply to the application filed by the Defendant under Order VII Rule 11 CPC, it has been contended that the present suit cannot be stated to be barred by the provisions of Section 79 of the Real Estate (Regulation and Development) Act, 2016.
CS DJ No. 37/23 ADO Pvt. Ltd. Vs. Ashiana Homes Pvt. Ltd. Page 3 of 23(f) The Plaintiff after filing the aforementioned replication also preferred to file the present application under Order XIII-A CPC as amended by schedule of the Commercial Courts Act. It has been asserted in the said application that since the Defendant has nowhere specifically denied that it owed an amount of Rs. 45,08,000/- to the Plaintiff against the services and goods supplied by the Plaintiff to it, the present suit should be summarily decreed in favour of the Plaintiff at this stage itself.
(g) In reply to the said application, in addition to reiterating the contents made in the written statement, the Defendant Company has also sought to assert that it has always been ready to perform its obligation under the MOU dated 15.12.2020 and that it is the Plaintiff who has failed to comply with the formalities stipulated in the allotment letter. According to the Defendant Company it has already offered the possession of the unit to the Plaintiff, subject to procedural compliance on part of the Plaintiff.
Contentions of Ld. Counsels:-
3. Ld. Counsel Ms. Ritu Singh Man on behalf of the Plaintiff and Ld. Counsel Sh. S.M. Ansari, on behalf of the Defendant have advanced oral arguments on both the aforementioned applications and have also filed detailed written submissions alongwith judicial dicta.
4. Ld. Counsel for Plaintiff has sought to make the following main contentions :-
(i) The stipulations in MoU dated 10.08.2019 with respect to the Defendant (as a sister concern of ALRPL) stood superseded by virtue of clause 13 of the MOU dated 15.12.2020 signed between the Plaintiff and CS DJ No. 37/23 ADO Pvt. Ltd. Vs. Ashiana Homes Pvt. Ltd. Page 4 of 23 the Defendant.
(ii) The MoU dated 10.08.2019, executed between the Plaintiff and Ashiana Landcraft Realty Private Limited (ALRPL), an entity separate and distinct from the Defendant, no longer holds good, as ALRPL was under insolvency before the Ld. NCLT Kolkata in C.P. (IB) No. 666/KB/2020 filed by IDBI Trusteeship Services Limited for being in default to the tune of Rs. 139,99,00,000/-, as on 15.02.2020. A moratorium order was passed in respect of ALRPL on 11.01.2022 and the resolution plan in respect of ALRPL was accepted by the Ld. NCLT on
11.08.2023. Upon the acceptance of the resolution plan submitted by IV County Pvt. Ltd., ALRPL ceased to be a sister concern of the Defendant.
(iii) The Defendant has chosen to rely on the MoU dated 10.08.2019, without disclosing to this Hon'ble Court that ALRPL was under
insolvency and that the resolution plan had already been accepted by the Ld. NCLT on 11.08.2023, pursuant to which the management of ALRPL passed into the hands of IV County Pvt. Ltd., who is in no way connected with the Defendant.
(iv) If at all, any objection is to be raised as to Plaintiff's right to have filed the present suit on the basis of MoU dated 10.08.2019, the said objection can only now be raised by ALRPL's new management.
(v) Without prejudice to the above contentions, with the acceptance of the Resolution Plan of ALRPL, its obligation under the surety bond, being a pre CIRP due, has, in any case, come to an end, and under clause 4 of the MoU dated 10.08.2019, its sister concerns, including the Defendant are liable to release the payment of the Plaintiff.
(vi) The MOU dated 15.12.2020 executed between the Plaintiff and the Defendant neither bore any reference to the MoU dated 10.08.2019 nor did it mandate completion of work in the Project Ashiana Mulberry (in CS DJ No. 37/23 ADO Pvt. Ltd. Vs. Ashiana Homes Pvt. Ltd. Page 5 of 23 respect of which a separate MoU had been executed between the Plaintiff and the Defendant's sister concern).
(vii) Ashiana Dwelling Private Limited, which had engaged the services of the Plaintiff for the Project Ashiana Mulberry, is not a party to the present proceedings and has initiated a separate legal proceeding against the Plaintiff in respect of its claims. The alleged non-completion of work by the Plaintiff in the Project Ashiana Mulberry cannot be made an issue in the present proceedings as the said Project is not that of the Defendant but of an independent legal entity, who had issued a separate work order to the Plaintiff and who has entered into a separate MoU with the Plaintiff for settlement of Plaintiff's dues payable for the work done in the said project.
(viii) The plea taken by the Defendant that the Defendant is ready and willing to perform its obligation under the MoU and has offered possession vide the said letter dated 16.06.2022 is in contradiction to the stand taken by the Defendant in the written statement in paragraph 9 whereof, the Defendant has pleaded that the Defendant and its sister concerns have an unbridled right to withhold the money that are due and payable to the Plaintiff on account of the work being incomplete in another project under the name and style Ashiana Mulberry and on account of non-discharge of a surety bond provided by the Defendant's sister Concern, Ashiana Landcraft Realty Pvt. Ltd., to the Government of Haryana.
(ix) Possession letter dated 16.06.2022, filed for the first time with the reply to the Application under Order XIII-A CPC, was not filed with the written statement of the Defendant, nor does it find any mention in the written statement. Thus, it cannot be considered for any purpose whatsoever. The said document is patently a fabricated document, as is CS DJ No. 37/23 ADO Pvt. Ltd. Vs. Ashiana Homes Pvt. Ltd. Page 6 of 23 evident from the fact that despite bearing a date of 16.06.2022, leading to the presumption that the Defendant has been in possession of the document since that date, the same was neither entered in the list of documents nor a copy of the same was filed along with the written statement.
5. In support of her contentions, Ld. Counsel for Plaintiff has relied upon the following judgments:
(i) Imperia Structure Limited v. Brigadier Harit Pant [(2022) 7 Supreme Court Cases 703].
(ii) Imperia Structures Limited v. Anil Patni and Another [(2020) 10 Supreme Court Cases 783].
(iii) Tejas Shoor v. Godrej Vestamark LLP [(2023) SCC Online Dis Crt (Del) 14].
(iv) Priyanka Taksh Sood and Others v. Sunworld Residency Pvt. Ltd. and Another [(2022) SCC Online Del 4717].
(v) Neeru Jain v. Jasmine Buildmart Pvt. Ltd. [(2019) SCC Online Del 10731].
(vi) Everyday Industries India Limited v. KKR India Financial Services Limited and Anr. (2022 SCC Online Del 395).
(vii) Su-Kam Power Systems Ltd. Vs. Kunwer Sachdev and Another, 2019 SCC Online Del 10764.
6. In reply, Ld. Counsel for Defendant has made the following main contentions :-
(i) Section 39 of the Indian Contract Act, 1872 grants a right to the promisee to end the contract upon refusal of the promisor to perform its CS DJ No. 37/23 ADO Pvt. Ltd. Vs. Ashiana Homes Pvt. Ltd. Page 7 of 23 contractual obligations. In the present case, the Defendant has on no occasion refused to perform its obligations under the MOU dated 15.12.2020. In fact, on the contrary, the Defendant has always been ready and willing to perform its obligations under the MOU dated 15.12.2020 and has infact already allotted a unit in the project named 'Royale Arcade' situated in Bhubaneswar, Odisha in favour of the Plaintiff. The possession of the said unit has also been offered to the Plaintiff vide letter dated 16.06.2022. Therefore, there is no refusal on part of Defendant and therefore the provisions of Section 39 of the Indian Contract Act, 1872 are not attracted to the facts of the present case. The project in which the unit has been allotted to the plaintiff is complete and there is no reason why the Defendant would not perform its obligation in term of the MOU.
(ii) Even otherwise the MOU dated 15.12.2020 executed between the parties records that in lieu of the amount of Rs. 45,08,000/- owed by the Defendant to the Plaintiff a unit has been allotted by the Defendant to the Plaintiff and that money receipts in this respect have also been issued in favour of the Plaintiff and that therefore the relationship between the parties is that of a builder and a buyer and the Plaintiff can only seek 02 reliefs namely either the possession of the unit allotted or the refund of the consideration amount paid for purchasing the said unit. For the said reliefs, the appropriate forum is Odisha Real Estate Regulatory Authority, Bhubaneshwar ("OREAT"), as they pertain to issues that are squarely covered under the Real Estate Regulatory Authority Act, 2016 ("RERA").
(iii) The issue in the present suit therefore essentially pertains to the allotment and conveyance of the unit allotted by the Defendant in favour of the plaintiff. Therefore, this Court has no jurisdiction to try the present suit in view of Section 79 of the Real CS DJ No. 37/23 ADO Pvt. Ltd. Vs. Ashiana Homes Pvt. Ltd. Page 8 of 23 Estate (Regulation and Development) Act, 2016 (RERA Act). The provisions of the said Section make it clear that no Civil Court has jurisdiction to entertain disputes between allottees and builders.
7. In support of his contentions, Ld. Counsel for Defendant has relied upon the judgments passed by the Real Estate Regulatory Authority, Haryana in the following cases:-
(a) Ashrita Singh and Ors. v. Landmark Apartments Pvt. Ltd., MANU/RR/0148/2020.
(b) Arun Kumar Singh and Ors. v. Raheja Developers Limited, MANU/RR/0709/2023.
(c) Vinod Bedi and Ors. v. Raheja Developers Limited,
MANU/RR/0410/2023.
Findings:-
8. This Court has carefully considered the submissions made by the Ld. Counsels and has perused the entire record as well as the judicial dicta relied upon by Ld. Counsels for the parties.
9. This Court will first consider the application filed by the Defendant under Order VII Rule 11 CPC. As narrated hereinabove, the submission of the Defendant is that the present suit is barred by the provisions of Section 79 of the Real Estate (Regulation and Development) Act, 2016. To understand the said contention it will be relevant herein to reproduce the provisions of the said Section and the same are as follows :-
Section 79: Bar of jurisdiction: No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Authority or the adjudicating officer or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action CS DJ No. 37/23 ADO Pvt. Ltd. Vs. Ashiana Homes Pvt. Ltd. Page 9 of 23 taken or to be taken in pursuance of any power conferred by or under this Act.
The aforementioned provision makes it clear that the jurisdiction of a Civil Court is barred only with respect to matters which the authorities constituted under the RERA Act are empowered to decide. Now, as per the provisions of the RERA Act, authorities constituted therein have been interalia empowered to decide disputes arising between an allottee and a promoter / builder of a apartment, plot or building and to protect the interest of consumers in the Real Estate Sector.
10. It is also well settled law that while considering an application under Order VII Rule 11 CPC, it is only the averments in the plaint that are to be considered. Now, in the present case, as narrated hereinabove, the case put forward by the Plaintiff interalia is that it had supplied goods / services to the Defendant Company for its project located at Bhubaneshwar, Odisha and that the Defendant Company failed to clear its outstanding. It is also the averment of the Plaintiff that in order to clear its outstanding, the Defendant reached a settlement with the Plaintiff which was recorded in the MOU dated 15.12.2020.
The grievance of the Plaintiff is that despite the said understanding reached between the parties, the Defendant failed to honour the terms of the MOU and therefore the Plaintiff should be granted the right to rescind the said MOU and the Defendant be directed to pay its outstanding of Rs. 45,08,000/-. The said facts make it clear that the relationship between the Plaintiff and the Defendant Company is that of a vendor / service provider and purchaser. It is not that of an allottee and a builder. It is only that the Defendant in order to clear its outstanding had offered to allot a unit in its building project 'Royal Arcade' in favour of the Plaintiff. It is the case of the Plaintiff that the Plaintiff itself was never interested in the allotment of a unit in its favour and had made it clear to CS DJ No. 37/23 ADO Pvt. Ltd. Vs. Ashiana Homes Pvt. Ltd. Page 10 of 23 the Defendant that it is accepting the said allotment so that it could sell the unit and recover its outstanding and that therefore for the said purpose it was categorically agreed between the parties, vide the executed MOU, that the Defendant will render all possible cooperation in the transfer of the allotted unit in favour of a third party identified by the Plaintiff. It is further the assertion of the Plaintiff that when it called upon the Defendant to render the said cooperation, the Defendant refused to get the unit allotted in favour of the third party identified by the Plaintiff and that therefore now the Court should allow the Plaintiff to rescind the MOU and direct the Defendant to pay the amount of Rs. 45,08,000/- to the Plaintiff, the outstanding of the Defendant in consideration of the goods / services provided by the Plaintiff to it.
11. In the considered opinion of this Court, the aforementioned assertions / disputes raised by the Plaintiff cannot at all be decided by the authorities constituted under the RERA Act. They are clearly not empowered to decide the disputes raised by the Plaintiff u/s 39 of the Indian Contract Act. In view of the discussion hereinabove, this Court finds no merit whatsoever in the application filed by the Defendant under Order VII Rule 11 CPC. The said application therefore stands dismissed.
12. Coming now to the application filed by the Plaintiff under Order XIII-A CPC, it will be relevant to reproduce relevant provisions of Order XIIIA CPC, which provide for the Court to pass a summary judgment in certain cases of commercial disputes. Rule 2 of the said Order lays down as under :-
"3. Grounds for summary judgment - The Court may give a summary judgment against a plaintiff or defendant on a claim if it considers that -
(a) the plaintiff has no real prospect of succeeding on the claim or the defendant has no real prospect of successfully defending the claim, as the case may be; and
(b) there is no other compelling reason why the claim should not be disposed of before recording of oral evidence."CS DJ No. 37/23 ADO Pvt. Ltd. Vs. Ashiana Homes Pvt. Ltd. Page 11 of 23
In paras 49 and 52 of its recent judgment pronounced in the case titled Su-kam Power Systems Limited vs. Kunwer Sachdev & Anr. (2019) SCC Online, Delhi 10764, the Hon'ble Delhi High Court has dealt with the aforementioned provisions of Order XIII-A CPC and has observed as follows:-
"49. Consequently, this Court is of the view that when a summary judgment application allows the Court to find the necessary facts and resolve the dispute, proceeding to trial would generally not be proportionate, timely or cost effective. It bears reiteration that the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the Court the confidence that it can find the necessary facts and apply the relevant legal principles so as to resolve the dispute as held in Robert Hryniak (supra)....
52. Consequently, this Court is of the opinion that there will be 'no real prospect of successfully defending the claim' when the Court is able to reach a fair and just determination on the merits of the application for summary judgment. This will be the case when the process allows the court to make the necessary finding of fact, apply the law to the facts, and the same is proportionate, more expeditious and less expensive means to achieve a fair and just result."
The aforementioned succinct enunciation of law by the Hon'ble Court, makes it clear that in case this Court is able to determine the necessary facts in dispute between the parties and is able to apply the relevant legal principles to the said facts so as to resolve the disputes between the parties, this Court will be justified in exercising its powers under Order XIIIA CPC.
13. Now in the present case, the Plaintiff has claimed that in view of the Defendant refusing to honour its undertaking given in the MOU dated 15.12.2020, the Plaintiff, in terms of Section 39 of the Indian Contract Act, is entitled to put an end to the said MOU and to seek the recovery of an amount of Rs. 45,08,000/- from the Defendant. The said section provides as under:
'When a party to a contract has refused to perform, or disabled himself from performing, his promise in its entirely, the promisee may put an end to the contract, unless he has signified, by words or conduct, his acquiescence in its continuance' CS DJ No. 37/23 ADO Pvt. Ltd. Vs. Ashiana Homes Pvt. Ltd. Page 12 of 23 Now, therefore this Court is required to examine whether or not on the basis of the following admitted facts between the parties, the Plaintiff is entitled to invoke the provisions of Section 39 of the Indian Contract Act;
(a) The services of the Plaintiff for supply and installation of UPVC windows and doors were engaged by the Defendant and 03 of its sister concerns namely Ashiana Landcraft Realty Pvt. Ltd, Ashiana Dwelling Pvt. Ltd and Green Triveni Developers for the purposes of their projects namely Royal Lagoon, The Centre Court, Ashiana Mulberry and Ashiana Greens respectively.
(b) That in July - August 2019, the Plaintiff in order to file an appeal against an erroneous order of the Assessing Officer, Sales Tax Department, Haryana, was required to furnish surety bonds for an amount of Rs. 178 Lakhs to the Department. During the said period, the Defendant and its sister concerns were already liable to pay certain amounts to the Plaintiff for works and material provided by it and therefore when the Plaintiff requested the Defendant to clear its dues, the Defendant instead offered to provide a surety bond for Rs. 70 Lakhs as required by the Plaintiff to furnish to the Sales Tax Department. The said surety bond was however provided not by the Defendant but by its sister concern, Ashiana Landcraft Realty Pvt. Ltd. and a MOU dated 10.08.2019 was executed between the Plaintiff and the said sister concern of the Defendant in this respect. It was agreed vide the said MOU that till the surety bond provided by Ashiana Landcraft Realty Pvt. Ltd. is discharged, the Plaintiff will not be entitled to its dues from the Defendant and its other sister concerns.
(c) In the year 2020 Insolvency Proceedings were initiated against the sister concern of the Defendant namely Ashiana Landcraft Realty Pvt. Ltd. with whom the MOU dated 10.08.2019 was executed. After the initiation of the said CS DJ No. 37/23 ADO Pvt. Ltd. Vs. Ashiana Homes Pvt. Ltd. Page 13 of 23 insolvency proceedings 03 separate MOUs were executed - one between the Plaintiff and the Defendant and the remaining 02 between the Plaintiff and 02 other sister concerns of the Defendant namely Ashiana Dwelling Pvt. Ltd and Green Triveni Developers.
(d) In the MOU dated 15.12.2020 entered into between the Defendant and the Plaintiff, the Defendant admitted that it owed an amount of Rs.
45,08,000/- to the Plaintiff in consideration of the services provided by the Plaintiff for supply and installation of PVC doors and windows in the project 'Royal Lagoon' of the Defendant and that no work whatsoever is pending of the Plaintiff in the said project. The MOU further recorded that in order to clear its outstanding payment of Rs. 45,08,000/-, the Defendant Company undertakes to execute a conveyance deed in respect of one unit in its project 'Royale Arcade' situated at main Nandan Kanan Road, Raghunathpur, Bhubaneswar, Odisha-751024, in favour of the Plaintiff or the Plaintiff's nominee.
(e) The Defendant also agreed that it will render all possible cooperation to the Plaintiff for transfer of the allotment of the said unit in favour a Third Party named by the Plaintiff or a nominee of the Plaintiff as and when requested by the Plaintiff, without any charges being payable by the Plaintiff.
(f) The Plaintiff in September 2021 sought to transfer the allotted unit in its favour to one Ashutosh Kumar Aggarwal. Accordingly, a request was made to the Defendant to execute the sale deed / conveyance deed in favour of Ashutosh Kumar Aggarwal. The Defendant however failed to do so, for the project 'Royal Arcade' remained incomplete.
(g) The Plaintiff issued legal notice dated 04.08.2022 to the Defendant CS DJ No. 37/23 ADO Pvt. Ltd. Vs. Ashiana Homes Pvt. Ltd. Page 14 of 23 seeking compliance or in alternative cancellation of MOU dated 15.12.2020. In reply to the said notice the Defendant refused to execute the sale deed and intimated to the Plaintiff that it will not pay the dues of the Plaintiff till it completes the project 'Ashiana Mulberry' of its sister concern.
14. Now despite the aforementioned admitted facts, Ld. Counsel for Defendant is seeking to contend that the present suit should be put up for trial and that the suit of the Plaintiff is not liable to be summarily decreed. He has pointed out in the written statement it has been categorically averred by the Defendant the Plaintiff cannot be allowed to rely upon the MOU dated 15.12.2020 in view of the earlier MOU executed between the Plaintiff and one of the sister concerns of the Defendants on 10.08.2019 and further since the Plaintiff has not completed the works in the project under the name and style of 'Ashiana Mulberry', of its sister concern, it cannot demand that the Defendant to clear its outstanding.
15. In the considered opinion of this Court, none of the defences taken by the Defendant requires this Court to be put this case to trial, for both the defences can be dealt with by looking into the terms and conditions of the MOU dated 15.12.2020.
16. At this stage, it will be relevant herein to produce some of the terms of the said MOU for the purposes of convenience and clarity.
A. The First Party had engaged the services of the Second Party for supply and installation of PVC doors and windows ('services') in its residential project named ROYAL LAGOON located at Plot No. 2124, Main Nandan Kanan RD, Raghunathpur, Bhubaneshwar, Odisha-751024.
B. The Second Party, as per the requirement of the First Party, supplied and installed the windows and doors in the Royal lagoon CS DJ No. 37/23 ADO Pvt. Ltd. Vs. Ashiana Homes Pvt. Ltd. Page 15 of 23 Project and has completed all the requirements of the First Party, including handing over the site, complete in all respects, to the First Party. The First Party acknowledges that no work is pending on the part of the Second Party in the Royal Lagoon Project.
C. That, a total amount of INR 45,08,000/- is due and payable by the First Party to the Second Party against the services as on date (details have already been shared, agreed and accepted by the parties).
D. That it has been agreed between First Party and Second Party, that the First Party, in lieu of the payment of the aforesaid outstanding amount, has offered to settle its aforesaid dues by allotting to the Second Party, Unit No. 512, admeasuring 805 Sq. Ft., situated on the 5th Floor ('Unit') more particularly described in Schedule hereto in the project named as 'Royal Arcade' developed by the First Party and situated at Main Nandan Kanan RD, Raghunathpur, Bhubaneshwar, Odisha-751024 ('Project').
E. The parties are accordingly executing this MOU to record the terms and conditions agreed between the parties for the payment of the outstanding amount payable by First Party to the Second Party in the manner and on such terms as recorded below :
NOW THIS MEMORANDUM OF UNDERSTANDING WITNESSTH AS FOLLOW :
1. The First Party acknowledges that it owes the total outstanding amount i.e. an amount of INR 45,08,000/- as on date to the Second Party and the Second Party acknowledges that, as on the date of execution of this MOU hereof, no further amounts are payable by the First Party to the Second Party. It is further clarified that the outstanding amount is total amount due to be paid by the First Party to the Second Party towards the services performed by the Second Party.
2. Pursuant to the discussions between the parties, it is agreed that towards settlement of outstanding amount of INR 45,08,000/-
owed to the Second Party, the First Party had agreed to allot in favour of the Second Party, the said Unit in the Project. The Floor Plan of the said Unit attached as Annexure-A hereto.
3. ...................
4. Simultaneously with the execution of this MOU, the First Party has issued Agreed To Sell ('Allotment Documents') in respect of the said Unit in favour of the Second Party. The Second Party hereby assures that it shall comply with the terms and conditions of the Allotment Documents in the manner recorded therein. Further, CS DJ No. 37/23 ADO Pvt. Ltd. Vs. Ashiana Homes Pvt. Ltd. Page 16 of 23 to the extent required, the terms of this MOU shall be recorded in the Allotment Documents. Upon the execution of the Allotment Documents, the outstanding amount of INR 45,08,000/- shall be deemed to have been paid and settled.
5. The First Party further undertakes to execute a conveyance deed in respect of the suit Unit in favour of the Second Party or its nominee.
6. In the event the Second Party wishes to assign / transfer its allotment rights in the said Units to a third party, the First Party shall render all possible co-operation in such first transfer of allotment of the said Unit in favour of the third party / nominee of the Second Party, as and when so requested by the Second Party, without any charges being payable to the First Party for such first transfer. Any second / subsequent transfer of allotment would be liable to administrative charges as may be prescribed by the First Party as Developer of the Project.
17. It is clear from the terms contained in Clause A, B and C of the aforementioned MOU that the Defendant had engaged the services of the Plaintiff for supply and installation of PVC doors and windows for its project 'Royal Lagoon' and that the Defendant admitted that it is required to pay Rs. 45,08,000/- to the Plaintiff and that no work whatsoever is pending on the part of the Plaintiff in the said project. The said MOU nowhere mentions that the Plaintiff will not be entitled to the amount of Rs. 45,08,000/- till it also completes the 'Ashiana Mulberry' project of Ashiana Dwelling Pvt. Ltd., the sister concern of the Defendant. Infact with respect to the said project, admittedly a separate MOU was executed between the Plaintiff and the said sister concern containing therein the terms and conditions agreed between the Plaintiff and the said sister concern regarding the completion of the said project. In the considered opinion of this Court, the Defendant cannot under the garb of concept of 'Group Companies' seek to deny its liability to the Plaintiff, when admittedly the Defendant and its sister concerns had executed separate MOUs with the Plaintiff and were maintaining separate business transactions and accounts in the said respect.
CS DJ No. 37/23 ADO Pvt. Ltd. Vs. Ashiana Homes Pvt. Ltd. Page 17 of 2318. As regards the contention of the Defendant that the MOU dated 15.12.2020 cannot be relied upon by the Plaintiff in view of its undertaking given in the MOU dated 10.08.2019 executed between the Plaintiff and the sister concern of the Defendant, 'Ashiana Landcraft Realty Pvt. Ltd.', it will be relevant herein to reproduce Clause 13 of the MOU dated 15.12.2020 and the same reads as under;
13. The MOU contains the entire understanding between the parties with regard to the matters set forth herein and supersedes all prior communications, negotiations and representations either oral or written, between the parties in relation hereto as well as any prior agreement or understanding between the parties. The parties acknowledge that they shall keep the terms hereof, including the existence of this MOU, as confidential and shall not without the prior written consent of the other party, disclose or divulge the contents of this MOU to a third party, except in compliance of an order of any government statutory authority or a Court order, or in order to give effect to the terms of this MOU.
In view of such a specific clause superseding all prior agreements or understanding between the parties, the Defendant cannot be heard at all to contend that the MOU dated 10.08.2019 executed between the Plaintiff and the sister concern of the Defendant ALRPL still governed the disputes between the parties. Even otherwise, the Defendant is not disputing that in view of the resolution plan accepted by the Ld. NCLT on 11.08.2023, ALRPL now has ceased to exist and that its management has now passed into the hands of the another company and that in view of the proceedings of the Ld. NCLT, the surety bond tendered by ALRPL stands discharged.
CS DJ No. 37/23 ADO Pvt. Ltd. Vs. Ashiana Homes Pvt. Ltd. Page 18 of 2319. In view of the discussion hereinabove, this Court finds no merit in the defences taken by the Defendant in its written statement. It is further to be noted that apart from the aforementioned two defences, the Defendant for the first time in its reply to the application of the plaintiff under Order XIII-A CPC, has taken a stand it was always willing to perform its obligation under the MOU dated 15.12.2020. It has been asserted in the said reply that the Defendant called upon the Plaintiff vide its letter dated 16.06.2022 to take the possession of the allotted flat.
20. In the considered opinion of this court, it has been rightly contended by the Ld. Counsel for Plaintiff that the aforementioned assertion taken by the Defendant for the first time in its reply to the application of the Plaintiff U/O XIII-A CPC is to be held as a mere afterthought. There is no reason forthcoming from the Defendant as to why this plea was not taken in the Written Statement. It is also to be noted that though the said letter is purportedly dated 16.06.2022, it finds no mention whatsoever in the reply sent by the Defendant to Plaintiff's legal notice dated 04.08.2022. In the said legal notice, the Plaintiff had specifically asserted that despite its undertaking in the MOU dated 15.12.2020, the Defendant had failed to complete its project 'Royal Arcade' and to execute the conveyance deed with respect to the unit in favour of the nominee of the Plaintiff. The Plaintiff vide the said notice thus called upon the Defendant to either comply with the terms of the MOU and execute the requisite conveyance deed within two weeks thereof or in the alternative pay its outstanding of Rs. 45,08,000/- to the Plaintiff. The Defendant admittedly replied to the said notice and in its reply dated 27.09.2022, categorically refused to execute any such conveyance deed till the Plaintiff completes the work of its sister concern in the project 'Ashiana Mulberry'. There is not a whisper in the said reply dated 27.09.2022 that the Defendant is willing to honour the terms of CS DJ No. 37/23 ADO Pvt. Ltd. Vs. Ashiana Homes Pvt. Ltd. Page 19 of 23 the MOU dated 15.12.2022 and has infact issued a letter to the Plaintiff to take possession of the flat allotted to it. Ld. Counsel for the Defendant was at pains to explain the said omission. Even otherwise, it is unacceptable that on the one hand the Defendant is contending that the plaintiff is not entitled to any amount/transfer of unit in terms of the MOU dated 15.10.2020 for it had not completed the works in the project of its sister concern, while on the other hand it has chosen to contend in its reply to the application under Order XIII-A CPC that it was always willing to handover the unit allotted to the Plaintiff vide its letter dated 16.06.2022. In the considered opinion of this Court, the Defendant cannot be allowed to take such inconsistent pleas, to defeat the claim of the Plaintiff.
21. In view of the discussion hereinabove, in the considered opinion of this Court, the Defendant has no real prospect of successfully defending the claim of the Plaintiff, on the basis of the grounds taken in the written statement or otherwise. This Court thus finds no reason whatsoever to put the present case on trial, for in the opinion of this Court, there is no genuine issue raised by the Defendant which requires a trial. In 'Su-Kam's case (supra), the Hon'ble Delhi High Court has held that the intent behind incorporating the summary judgment procedure in the Commercial Court Act, 2015 is to ensure disposal of commercial disputes in a time-bound manner and that in fact, the applicability of Order XIIIA, CPC to commercial disputes, demonstrates that the trial is no longer the default procedure/norm. It has further observed that where the Court comes to the conclusion that the defendant has no real prospects of successfully defending the claim and there is no other compelling reason why the claim should not be disposed of before recording of oral evidence, the Court must pronounce judgment. It has been further held that the expression "real" directs the Court to examine whether there is a "realistic" as opposed to "fanciful"
CS DJ No. 37/23 ADO Pvt. Ltd. Vs. Ashiana Homes Pvt. Ltd. Page 20 of 23prospects of success.
22. It is also relevant to note that though the Defendant has not disputed that it owed the amount of Rs. 45,08,000/- to the Plaintiff, during the course of arguments, this Court to be satisfied that present is not a collusive suit to dupe the allottees in the building project of the Defendant, had asked the counsel for Plaintiff to place on record, the audited statement of account maintained by the Plaintiff company for the relevant years, in which it had assertedly provided goods and services to the Defendant. In this respect, the Plaintiff has filed on record the complete set of invoices raised by it, statement of account maintained by it and the record of the GST deposited by it. The same has satisfied this Court that the present is not a collusive suit.
23. In view of the aforementioned discussion, this Court hereby holds that the Plaintiff is entitled to rescind the MOU dated 15.12.2020 and recover from the Defendant, a principal amount of Rs. 45,08,800/-. As regards the interest payable on the said principal amount, Ld. counsel Ms. Ritu Man had submitted that the Plaintiff is entitled to an amount of Rs. 16,22,880/- towards interest for the period from 15.12.2020 to 15.12.2022. She has submitted that the said amount has been calculated by taking the rate of interest at 18% per annum. It is her contention that the Defendant is liable to pay interest to the Plaintiff from the date of MOU executed between the parties, which is 15.12.2020.
24. In the considered opinion of this court, the aforementioned submission cannot be accepted. It is the own case of the Plaintiff that pursuant to the MOU dated 15.12.2020, it is for the first time in September 2021 that Plaintiff had sought the cooperation of the Defendant to transfer the allotted unit CS DJ No. 37/23 ADO Pvt. Ltd. Vs. Ashiana Homes Pvt. Ltd. Page 21 of 23 in favour of its nominee and that prior to this date no demand in this respect had been made. It is also the case of the Plaintiff itself that the legal notice calling upon the Defendant to honour the terms of the MOU executed between the parties or in the alternative to pay the due amount, was sent only on 04.08.2022. A perusal of the said notice reflects that even in the said notice, the Plaintiff gave two weeks to the Defendant to honour the terms of the MOU and execute the conveyance deed in respect to the unit allotted in favour of their nominee. In such view, in the considered opinion of this court, the Plaintiff became entitled to seek the amount of Rs. 45,08,000/- only when the Defendant refused to execute the conveyance deed in favour of the Plaintiff and this refusal was made by the Defendant in its reply dated 27.09.2022, to the legal notice of the Plaintiff. It is on this date that the Plaintiff became entitled to rescind the MOU dated 15.12.2020. As such in the considered opinion of this court, the Plaintiff is entitled to claim interest on the principal amount due from the Defendant, only with effect from this date. Further since, there was no agreement between the parties with respect to the interest that the Defendant would be liable to pay on delayed payment, the Plaintiff cannot insist that the court must award interest @ 18% per annum. It is well settled law that in the absence of any agreement between the parties with respect to the payment of interest on delayed payment, the court is entitled to award interest at a reasonable rate. Particular reference in this regard is made to the judicial dicta laid done by the Hon'ble Delhi High Court in the cases CS (OS) 209 / 2016 titled as Gopesh Mehta Vs Swift Initia Pvt. Ltd. and RSA No. 195 / 2004 titled as Sh. Zile Singh Vs. Sh. Mangloo Ram Bansal.
25. In view of the discussion herein above, the Plaintiff is therefore held entitled to interest on the principal amount of Rs. 45,08,000/- at the rate of 10 % per annum from 27.09.2022 till the date of filing of the suit i.e. CS DJ No. 37/23 ADO Pvt. Ltd. Vs. Ashiana Homes Pvt. Ltd. Page 22 of 23 05.01.2023.
26. As regards the pendente lite and future interest, learned counsel for the Plaintiff has submitted that in terms of Section 34 of CPC, since the liability in relation to the sum adjudged has arisen out of a commercial transaction, this Court must award interest at the rate of 10% per annum for the same is the rate on which moneys are lent and advanced by nationalised banks in relation to commercial transactions. Taking into consideration that many suits are pending in this Court wherein nationalized banks are claiming recovery of unpaid loan amounts along with interest at the rate of 10% per annum, the aforesaid contention of the learned counsel is accepted.
27. In view of the discussion herein above, the application filed by the Defendant under Order VII Rule 11 CPC stands dismissed and the application filed by the Plaintiff under Order XIII-A CPC stands allowed. In view thereof, the suit of the Plaintiff stands summarily decreed in favour of the Plaintiff and against the Defendant for an amount of Rs. 45,08,000/- alongwith interest @ 10% p.a. w.e.f. 27.09.2022 till realization. Decree sheet be prepared accordingly.
This file be consigned to Record Room. Digitally signed by
ANU ANU GROVER
GROVER BALIGA
Date: 2025.05.03
BALIGA 15:34:09 +0530
Announced in the open court (Anu Grover Baliga)
on 30th April, 2025 District Judge (Commercial Court-04)
South-East/Saket Courts
New Delhi
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