Delhi District Court
Rakesh Kumar vs Saurabh Dayal on 18 January, 2025
IN THE COURT OF Ms. NEELAM SINGH
DISTRICT JUDGE (COMM-02),
SOUTH-EAST DISTRICT, SAKET COURT, NEW DELHI
CS (COMM)-737/22
Rakesh Kumar
S/o Sh. Rajendera Prasad
Office at: D-11, Basement, Maharani Bagh,
New Delhi-110065 ..... Plaintiff
Versus
1. Saurabh Dayal
S/o Mr. Rameshwar Dayal
R/o House No.C-3/95, Vishesh Khand, Gomti Nagar,
Tehsil-Lucknow, District Lucknow-226010
Uttar Pradesh.
Also at:
Plot No. F-84, 85, 86, UPSIDC Industrial Area,
Malwan-212664, District Fatehpur
Uttar Pradesh
2. QOOZ Industries OPC Private Limited
Registered office at:
C-3/95, Vishesh Khand,
Gomti Nagar, Lucknow-226010
Uttar Predesh .....Defendants
Date of Institution: 27.07.2022
Arguments concluded on : 23.10.2024
Date of Judgment: 18.01.2025
JUDGMENT
The crux of facts stated in brief is noted below:
Case of the plaintiff;
1. (a) It is the case of the plaintiff that he is running a proprietorship firm in the name and style of M/s Rakesh Kumar & Associates situated at D-11, Basement, Maharani Bagh, New CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 1 of 24 Delhi.
(b) Defendant no.1 is the Director of defendant no.2 company by the name and style of QOOZ Industries OPC Pvt Ltd. having its registered office at C-3/95, Vishesh Khand, Gomti Nagar, Lukhnow.
(c) It is the case of the plaintiff that in the month of May 2019 defendant no. 1 met the plaintiff at his office and submitted that he is facing severe financial crises in his business and further, submitted that he is not able to arrange the money to sort out his financial crises and he wanted to sell his property situated at Plot Number-85 UPSIDC Industrial Area, Malwan, District Fatehpur, Uttar Pradesh for a sale consideration of Rs. 40,00,000/- (Rupees Forty Lakhs Only). The property is owned by company who is defendant No. 2.
(d) Plaintiff agreed to purchase the aforesaid property for a consideration of Rs. 40,00,000/- (Rupees Forty Lakhs Only) and thereafter, obtained a loan amount of Rs. 15,18,499/- (Rupees Fifteen Lakhs Eighteen Thousand Four Hundred and Ninety- Nine Only) from Bajaj Finance Limited @ 14.35% per annum for a tenure of 72 months which was credited in his account and accordingly, he made payment of Rs.14,33,000/- (Rupees Fourteen Lakhs Thirty Three Thousand Only) to defendant No.1 after entering into an oral understanding with defendant No. 1. It is the case of the plaintiff that oral understanding between the plaintiff and defendant was that defendant no.1 would repay to the plaintiff an amount of Rs.14,33,000/- @ 14.35% in case the transaction related to the plot in question is not materialized.
CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 2 of 24(e) It is further the case of the plaintiff that when the plaintiff asked for the documents of the plot then the defendant no.1 handed over a copy of lease deed dated 29.05.2015 with respect to the said plot. It is further the case of the plaintiff that plaintiff requested the defendant to execute the agreement to sell in his favour and to hand over the required documents to the plaintiff but defendant no.1 on one pretext or another avoided execution of the same and did not hand over the required documents pertaining to the said plot to the plaintiff. Finally defendant refused to sell the plot to the plaintiff and assured that defendant would repay the amount of Rs. 14,33,000/- (Rupees Fourteen Lakhs Toyty Three Thousand Only) alongwith interest @ 14.35% per annum to the plaintiff. Thereafter, defendant no.1 repaid an amount of Rs. 48,424/- to the plaintiff till 02.11.2019.
(f) It is further the case of the plaintiff that plaintiff has made payment of Rs. 6,80,605/- (Rupees Six Lakhs Eighty Thousand Six Hundred and Five Only) to Bajaj Finance Limited at annualized rate of return of 14.35%. Plaintiff repeatedly followed up with the defendant No. 1 on his mobile phone and has also written e-mail dated 10.03.2022 asking him to repay the amount but defendant no.1 denied the fact and refused to pay the amount to the plaintiff. It is submitted that because of allurement of defendant no.1 to the plaintiff, plaintiff had transferred the amount of Rs. 14,33,000/- to defendant no.1 and thereafter, he is making payment of EMIs to Bajaj Finance Limited on behalf of defendant no.1 on the second day of each month. It is further submitted that the defendant has allowed the plaintiff for taking CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 3 of 24 loan from Bajaj Finance Limited and the EMIs to be paid by defendant no.1 but he failed to make the payment and grabbed the money of the plaintiff. It is submitted that plaintiff made part payment of Rs. 98,416/- till date, out of the amount of loan taken by him from Bajaj Finance Limited. It is further submitted that plaintiff has sent a Legal Demand Notice dated 14.04.2022 to defendant No.1 claiming his full and final amount of Rs. 26,44.015/-, but defendant never replied to the legal notice. It is submitted that plaintiff filed a civil suit in the court of Ld. ADJ but later on had withdrawn the suit on 18.07.2022 with the liberty to file a Commercial suit and instituted pre instituted mediation against the defendant under section 12A of Commercial Courts Act, 2015 and hence, the present suit.
Case of the defendant;
2(a) WS has been filed on behalf of defendant. It is submitted that Mr. Shobhan Mahanti who is the advocate for the plaintiff in the present case is also working as a company secretary with the plaintiff and he contacted the defendant no.1 for incorporation of defendant company near the end of 2014 and beginning of 2015. It is submitted that Mr. Shobhan Mahanti is the key person involved in getting all legal and compliance related work done for the defendants including Secretarial services. It is submitted that during the time of setting up of defendant no.2 company, Mr. Shobhan Mahanti used to operate through a firm by the name of S M Law Associates in which the plaintiff was an assistant to Mr. Shobhan Mahanti and plaintiff requested Mr. Shobhan Mahanti CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 4 of 24 to be in touch with the defendant. It is further the case of the defendant that defendant no.1 had no foresight that the plaintiff and Mr. Shobhan Mahanti were alluring the defendant for taking the alleged amount from the plaintiff and even after settlement of such amount, the plaintiff would resort to file the false suit.
(b) It is submitted that Mr. Shobhan Mahanti being the primary person involved in the incorporation of both the Companies of the plaintiff had an access to all the important documents of the defendant. It is submitted that the plaintiff and Mr. Shobhan Mahanti were very well aware of the loan and also that certain plots in the name of the defendant company including plot No. F-85 were mortgaged with the bank. It is further submitted that plaintiff was well aware about the fact that none of the properties of the defendant can be mortgaged or be transferred or sold to anyone and all the averments made by the plaintiff pertaining to the value of the suit plot are baseless and unfounded.
(c) It is further submitted that the suit is not maintainable under the provisions of Section 2(1)(c) of the Commercial Courts Act, 2015. It is submitted that the sole ground available to the plaintiff showing the matter as commercial suit is that the property in question is a immovable property. It is submitted that plaintiff has completely failed to show even a single document pertaining to any deal between plaintiff and the defendant. The case of the plaintiff is denied by the defendant. Defendant has vehemently denied the case of the plaintiff and submitted that plaintiff had paid an amount of Rs. 14,33,000/- to the defendant CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 5 of 24 and defendant had received the amount. It is submitted that there was never any agreement between the plaintiff and the defendant to sell the plot in question to the plaintiff.
3. Replication has been filed on behalf of the plaintiff, wherein he has reiterated the submissions made in the plaint and has denied the submissions made in the Written Statement of the defendant.
4. Upon completion of the pleadings, the following issues were framed on 18.01.2024 and thereafter, at request of Ld. Counsel for plaintiff another issue was also framed on 27.03.2024. All these issues are as under:
1. Whether the suit of the plaintiff is not maintainable as per law? OPD
2. Whether the suit of the plaintiff is not maintainable as plaintiff has suppressed material facts from the Court? OPD
3. Whether there is no cause of action in the suit of the plaintiff and against the defendant? OP Parties
4. Whether suit of the plaintiff is entitled for a decree of sum of Rs. 14,33,000/- in favour of the plaintiff and against the defendant? OPP
5. Whether the plaintiff is entitled for any interest on the decretal amount pendente lite and in future, if yes, then at what rate? OPP
6. Whether the plaintiff is also entitled to cost of the suit? OPP
7. Relief.
8. Whether the plaintiff is entitled for Annualized Rate of Return of 14.35% per annum amounting to Rs. 12,11,015/- (Rupees Twelve Lakhs Eleven Thousand and Fifteen Only) over advanced CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 6 of 24 amount of Rs. 14,33,000/- (Rupees Fourteen Lakhs Thirty Three Thousand Only)?
5. (a) The matter then was kept for evidence. In order to prove the case plaintiff has examined himself as PW-1, who has tendered his evidence by way of affidavit Ex. PW1/A. He has also relied upon documents Ex.PW1/1 to Ex.PW1/13 and documents marked as Mark A, Mark A1, Mark A2 and Mark B.
(b) The witness has been cross examined by Ld. Counsel for defendant no.1 and 2. Relevant portion of his cross examination is reproduced herein under:
"Q. How did you know the defendant?
A. Through reference.
Q. When did you meet the defendant?
A. In the year 2017.
Q. Who was the reference through whom you met the defendant? A. Through a common friend.
Q. Who was the said common friend?
A. I do not remember.
Q. When did you start working with Mr. Saurabh Dayal? A. In the same year when we met in 2017.
Q. Where did you generally met with the defendant? A. In my office at D-11, Basement, Maharani Bagh, New Delhi-110065. Q. When did you became aware about the deteriotating financial condition of the defendant?
A. In the year 2017, he started sharing his financial problem with me and requested me to provide help from the year 2018 onwards. Q. Were you aware that the defendant had availed other loan from your friends Mr. Shobhan Mahanti?
A. I had no knowledge.
Q. What were the other loans you were aware about? A. I was aware about the bank loans only. Vol. Loan mortgaged against the property.
Q. Have you ever dealt with any compliances in which a company wants to sell a mortgaged property?
A. No I have not.
Q. Did the defendant personally ask you for financial help? A. No. Q. Was there any discussion to sell the subject property to you or someone else between 2017 to 2019?
A. Yes.
Q. Did you tell him the compliances that would be required for such sale considering the subject property was mortgaged? A. No I did not advise the defendant.
Q. When did you talk about with the defendant about the sale of subject property i.e. F-85, UPSIDC Industrial area Malwan-212664 District Fatehpur, UP, to you?
A. I do not remember the exact date but it was in the month of April 2019.
Q. What was the conversation about selling just one part of the entire property between you and the defendant? A. The defendant took loan from me to repay the bank loan and agreed to sell the subject property to me and he also informed me that he will CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 7 of 24 eventually sell the entire property to others due to his financial crisis. Vol. 1 paid the said amount as part consideration for the subject property.
Q. Did you ask him how was when was he going to sell the other two properties adjacent to the subject matter property? A. No. Q. Why did you agree to buy a property that is in the middle of two fully utilised properties?
A. Because the defendant offered me the said plot only. Q. How did you plan to utilise the subject property after purchasing it? A. It was an investment for me and I would have sold it for a better price in future.
Q. When was the agreement to sell of subject property offered? A. In the month of April 2019.
Q. When did you accept the said agreement to sell? A. At the same time.
Q. Did you ask him about the property documents before getting into the agreement to sell?
A. I asked him and he gave me the copy of the lease deed. Q. When did you enter into the agreement to sell with the defendant? A. It was an oral agreement in the month May 2019 and the same was never written and signed.
Q. Did the defendant ask you for advance consideration money? A. Yes, he asked me in the month of May 2019. Q. Why did you provide a huge consideration money without getting the agreement to sell signed?
A. because of the professional relationship and trust. Q. Did you ask him whether the defendant can sell the property if it is already mortgaged?
A. Yes I did.
Q. What was the answer of defendant about the above query? A. The defendant answered that yes I can sell. Q. Did you have access to the property documents including the mortgaged document of the subject property? A. No. Q. What was your work as a CS at defendant no. 2 company? A. Normal company compliances like filing of annual return with the ROC, Etc. Q. Did your work also include dealing with bank transactions related to the business?
A. No. Q. How many years of experience do you have as a CS? A. 14 years.
Q. How did you give the consideration money to the defendant? A. Through banking channel.
Q. How did you avail the consideration money to pay the defendant? A. Borrowed from bajaj finance ltd.
Q. What kind of loan did you took from the Bajaj Finance? A. It was a professional loan.
Q. Why did you avail the professional loan instead of commercial loan to purchase the subject property?
A. I do not know.
Q. Have you repaid the loan you took from Bajaj finance? A. It is still pending in accordance with the repayment schedule. Q. Did you take any other loan to repay the partial amount to Bajaj Finance?
A. Yes from Mr. Shobhan Mahanti.
Q. What was the exact amount borrowed from Mr. Shobhan Mahanti? A. I do not remember the exact amount.
Q. During the oral agreement did you talk about any interest in case the defendant does not want to sell the subject property? A. No. Vol. It was agreed to pay 24 percent per annum in case the defendant does not sell the property to me. (After seeing the judicial file) At an annualised rate of return of 14.35 percent per annum on the loan taken from bajaj finance which would amount to Rs. 26,44,015/-
including the principal amount".
(c) Thereafter, plaintiff has examined another witness Md.
CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 8 of 24Shahnawaz, Deputy Manager as PW-2. He has relied upon the Authorization letter dated 27.06.2024 Ex. PW-2/1 and the Bank Statement along with Certificate under Sec. 65B IEA and Certificate Under sec. 2A of the Banker's Book of Evidence Act, 1891 are Ex. PW-2/2 (Colly.).
(d) The witness has been cross examined by Ld. Counsel for defendant no.1 and 2. Relevant portion of his cross examination is reproduced herein under:
Q. When was the A/c of the defendant was opened in your bank? A. I do not know about account opening date as I have received the summons to produce the relevant bank statement of the concerned A/c only. Q. Do you have any idea that this Bank A/c is the only active bank account at your bank?
A. I do not know.
Q. Do you have any documents to corroborate the status of active bank accounts of Defendant no. 1 at your bank?
A. I do not know.
Q. Whether the concerned bank account was indulged in regular financial transactions?
A. Yes, the transactions were done as shown in the statement I have brought today.
Q. When did the amount of Rs. 14,33,000/- was received in the bank account of Defendant no.1?
A. Yes, the total amount of Rs. 14,33,000/- was received in the concerned bank account of the defendant no. 1 vide separate transactions on 14.06.2019, 18.06.2019, and 28.06.2019 respectively.
Q. Is this the first transaction undertaken between Rakesh Kumar and Saurabh Dayal?
A. I do not know.
Q. Did the total amount of Rs. 14,33,000/- was kept in Defendant no. 1 Bank Account unused for a long period of time?
A. I do not know.
Q. Was this amount of Rs. 14,33,000/- paid or transferred to different stake holders/salary/bill or transferred to any other account? A. I do not know.
Q. Do you keep a track on all transactions of your Account holder Mr. Saurabh Dayal?
A. Yes, all records of banking transactions are kept. Q. Have you ever inquired or asked the defendant with regard to any suspicious activity in defendant no. I bank A/c with respect to deposit of buky amount?
A. I do not know".
(e) Plaintiff has further examined Sh. Manish Kumar Verma, Manager as PW-3. He has relied upon the certified copy of the Bank Statement for a period from 01.04.2018 to 05.07.2024 along with Certificate under Sec. 653 IEA Ex. PW-3/1.
(f) The witness has been cross examined by Ld. Counsel for CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 9 of 24 defendant no.1 and 2. Relevant portion of his cross examination is reproduced herein under:
"Q. When was the A/c of the Plaintiff's Firm was opened in your bank? A. It was the opened on 25.07.2012.
Q. Whether the Plaintiff's A/c was indulged in regular financial transactions? A. Yes as per A/c statement there are regular financial transactions. Q. Do you have idea that the current A/c is the only active A/c in your branch of the plaintiff's firm?
A. We only have one A/c by the name of Rakesh Kumar & Associates. Q. When was the amount of Rs. 14,33,000/- received and from where was this amount was credited?
A. I have no idea.
Q. Can you tell me that the present A/e is actively receiving any hefty amount from other A/cs or individuals?
A. I do not know.
Q. Have you ever witnessed any suspicious activities in the present A/c? A. No. Q. Was there any transaction undertaken between Rakesh Kumar & Associates and Saurabh Dayal/Defendant?
A. I do not know.
Q. Do you have idea that the Rakesh Kumar & Associates or the Plaintiff was obtaining any Loans for any purposes?
A. I do not know.
Q. Was there any amount transferred from Bajaj Finance Ltd. To the Plaintiff's Firm A/c?
A. I do not know.
Q. How much experience do you have in this service? A. 17 years".
(g) Plaintiff has also examined Sh. Rishabh Khandelwal, Manager (Legal) as PW-4. He has relied upon the Power of Attorney dated 24.08.2021 Ex. PW-4/1(OSR) and the certified copy of Loan Statement for a period from 12.06.2019 to 05.07.2024 Ex. PW- 4/2 and the certified copy of the Repayment Schedule for the said Loan Agreement Ex. PW-4/3.
(h) The witness has been cross examined by Ld. Counsel for defendant no.1 and 2. Relevant portion of his cross examination is reproduced herein under:
"Q. Whether the Loan Agreement No. 582HFPES031233 was the first loan taken by the Plaintiff?
A. Yes, it is his first loan in the records maintained by the company. Q. Have you checked the plaintiff's Cibil score before granting the loan? A. Yes. It is generally done by the concerned business team. Q. Has the plaintiff applied for the Loan physically or online? A. I am not sure about the same as to what mode has been used for availing the said loan.
Q. What kind of Loan did the Plaintiff asked for? A. As per the statement this is a professional loan. Q. Were you aware of the purpose for which the plaintiff was availing the said Loan?
A. I do not know, the concerned business team would be aware about the same.CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 10 of 24
Q. Generally who decides as to which loan is suitable for the borrower's need?
A. The concerned business team decides.
Q. If any borrower wants to buy any property which type of loan is preferred? A. As per my personal knowledge the customers generally avail the Home Loan.
Q. If any borrower wants to avail any commercial loan then what documents are required?
A. I do not know.
Q. What all documents were submitted by the Plaintiff for availing the said loan?
A. I do not know.
Q. Whether in banking services if borrower wants to avail any loan those documents are verified or not? (Objection raised by the counsel of the plaintiff that the defendant's counsel is asking a formal witness questions which are general in nature and which comprise of his personal knowledge about general subjects which have no relevance in the present matter just to get a statement from him which can be used by him before the court.) A. I do not know.
Q. Whether the plaintiff has ever defaulted on EMIs of the said loan? A. It is a matter of record.
Q. Whether at any point of time had the plaintiff apprised Bajaj Finance Ltd. that in any case of default, the Defendant no. 1 would make the repayment? (Objection raised by the Plaintiff's counsel is asking a formal witness about a personal communication between the plaintiff and defendant about which he is not supposed to have any formal knowledge). A. No. I do not know".
(i) Plaintiff has also examined Sh. Piyush Jha, Deputy Manager as PW-5. He has relied upon the Authorization letter dated 05.07.2024 Ex. PW-5/1 and the Bank Statement for a period from 01.04.2018 to 31.03.2023 along with Certificate under Sec.
65B IEA and Certificate Under sec. 2A of the Banker's Book of Evidence Act, 1891 Ex. PW-5/2 (Colly.).
(j) The witness has been cross examined by Ld. Counsel for defendant no.1 and 2. Relevant portion of his cross examination is reproduced herein under:
"Q. Whether the plaintiff's saving A/c No. 072101505978 was indulged in regular financial transactions?
A. Yes.
Q. Whether any amounts were transferred from plaintiff's current A/c SBI to the said bank A/c at your branch? (Objection raised by the counsel for the plaintiff, the PW is a formal witness having no personal knowledge about the documents brought by him before the Ld. LC today and the questions being asked by the counsel for the defendant can be answered by a mere perusal of the documents brought by the PW) A. I do not know.
Q. Is the plaintiff having any other savings A/c with your bank? A. I do not know.
Q. Were there any transactions undertaken from the plaintiff's A/c to the defendant's A/c? (Objection raised by the counsel for the plaintiff, the PW is a formal witness having no personal knowledge about the documents brought by him before the Ld. LC today and the questions being asked by the counsel for the defendant can be answered by a mere perusal of the documents brought by the PW) CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 11 of 24 A. I do not know".
Thereafter, PE was closed.
6. (a) The matter was then kept for defendant's evidence. In order to prove the case defendant has examined himself as DW-1, who has tendered his evidence by way of affidavit Ex.DW1/A. He has also relied upon documents Mark A(Colly.), Mark B(Colly.), Mark C(Colly.), and Mark D(Colly.). The Certificate under section 65B Indian Evidence Act filed by the defendant is Ex. DW-1/8.
(b) The witness has been cross examined by Ld. Counsel for plaintiff. Relevant portion of his cross examination is reproduced herein under:
"Q. What are your educational and professional qualifications? A. I have done Bsc. From St. Stephens College 2001 Batch. I used to work in event management co. and used to manage live music events. Q. What is the professional qualifications of your family members? A. My father served as a IPS officer in UP Cadre and now he is retired from service. My elder brother namely Mr. Gaurav Dayal is an IAS officer in UP Cadre and my sister in law Mrs, Vrunda M. Desai is an IRS officer. Q. Where are your brother and sister-in-law are currently posted? A. My brother is posted as Divisional Commissioner Ayodhya, UP and sister- in-law is under deputation to the Govt. of India serving as Director in ministry of information and broadcasting.
Q. Is it correct that before you started the business of Qooz Industries (OPC) Pvt. Ltd. you started the business of SBH World proprietorship and Web Ocean India Pvt. Ltd.?
A. Yes Q. Is it correct that due to your incompetence in running the business of SBH World proprietorship and Web Ocean India Pvt. Ltd., the business failed? A. No. Q. Have you filed the audited financial statements of Web ocean India Pvt. Ltd. for FY from 2021 to 2024 with the registrar of companies, Kanpur, UP? A. I have filed.
At this stage witness is confronted with the document containing the master data of Web Ocean India Pvt. Ltd. downloaded from the official website of the Ministry of Corporate Affairs on 30.07.2024 at 12:15:15PM and the same is hereby marked as Mark DX1.
Q. Is it correct that as per the Mark DX1 you have not filed the Audited results after FY 2020?
A. It appears to be correct as per the document shown. Q. Is it correct that you did file the copies of ITR Web Ocean India Pvt. Ltd. for the FY from 2021 to 2024 before this Hon'ble court? A. I do not remember.
Q. You have said that you have filed audited financial statement of Web Ocean India Pvt. Ltd. for FY from 2021 to 2024 with the registrar of companies, can you produce them before this Hon'ble court? A. Yes. I can produce the same.
Q. You have mentioned in para no. 10 of your written statement that the plaintiff and Mr. Shobhan Mahanti were looking to come close to you and you have further mentioned in para no. 11 that Mr. Shobhan Mahanti introduced the plaintiff to you with intention to cheat and defraud you for their own personal gain, can you tell us that why the plaintiff and Mr. Shobhan would want to come close to you?CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 12 of 24
A. It initially did not look that way but after so many years and events of financial transactions it appears to me that the intentions were not what I thought they were.
Q. What financial transactions are you referring to? A. The money transferred to me as a Loan.
Q. It is still not clear that as to why plaintiff and Mr. Shobhan wanted to come close to you?
A. it is because of the nature of complaint made against me and wrongly presented facts and figures.
Q. What is your personal net worth today?
A. I do not know.
Q. What is your own personal income since 2021 annually? A. I do not remember.
Q. Have you filed your personal ITRs for the last four years? A. Yes.
Q. Can you place those ITRs before this Hon'ble court? A. Yes but I do not have them with me today.
Q. What business is the Defendant no. 2 Qooz Industries OPC Pvt. Ltd. is involved in?
A. it is involved in manufacturing of packaged drinking water. Q. What is the business of Web Ocean India Pvt. Ltd.? A. It does internet and online products and services. Q. your father Sh. Rameshwar Dayal was initially one of the directors of the Web Ocean India Pvt. Ltd., can you tell us the reason for his resignation? A. He resigned due to some personal reasons.
Q. You have another co. called Qooz Ltd., your father was also a director of this co., what was the reason for his resignation? A. He resigned due to some personal reasons.
Q. You have mentioned in your pleadings that Mr. Shobhan Mahanti had very shrudely become a shareholder and director of Qooz Ltd., Can you tell us the business of Qooz Ltd.?
A. as per the MOA of the Co., it was primarily it was incorporated for restaurants, hotel, etc. Q. What work does Qooz Ltd. actually do currently? A. it is currently into marketing and distribution of Food & Beverages. Q. Have you filed the audited financial statements and ITRs of Qooz Ltd. with registrar of companies, Kanpur and IT department for the last four FYs? A. I do not remember.
Q. Can you place the abovementioned audited financial statements and ITRs before this court?
A. Yes, I can produce the same.
Q. Why did you appoint Mr. Shobhan Mahanti as director and shareholder of Qooz Ltd.?
A. He became the shareholder right at the time of incorporation of co. and he was appointed as director by me because we were at decent terms at that time and he suggested that he can become a director at the co. Q. Is there anybody outside your family who you have made a director in any of your companies except Mr. Shobhan Mahanti? A. No. Q. Why would Mr. Shobhan Mahanti want to be a director of Qooz. Ltd. when your own father Mr. Rameshwar Dayal resigned from the co.? A. Mr. Shobhan Mahanti can be give a better answer to it. It is wrong to suggest that Mr. Shobhan Mahanti never wanted to become a director of Qooz Ltd. and he only agreed to become a director because your father Mr. Rameshwar Dayal wanted to resign and there was no one else whom you could appoint as a director in your father's place. Q. How many shares does Mr. Shobhan Mahanti owns in Qooz Ltd.? A. He holds 1 percent shares.
It is wrong to suggest that Mr. Shobhan Mahanti had only 1 share of Qooz Ltd. and you are intentionally deposing falsely. Q. Is it correct that Mr. Shobhan Mahanti had repeatedly asked you to transfer the 1 share held by him of Qooz Ltd. to another person? A. It is not correct that Mr. Shobhan Mahanti repeatedly requested but at the time of incorporation of the co. he became one of the seven shareholders and told me that in future I can get it transferred. Before incorporation of the co. as the time was running out I requested him to become the shareholder. Vol. It was Mr. Shobhan Mahanti who was getting the Qooz Ltd. incorporated and filing all documents and he brought to my knowledge that the time was running out.
Q. Have you filed any documents that Mr. Shobhan Mahanti is working as a CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 13 of 24 Company Secretary?
A. I do not remember. (The judicial file is shown to the witness to refresh his memory). No, I have not filed any documents.
It is wrong to suggest that I have falsely mentioned in my evidence by way of affidavit that Mr. Shobhan Mahanti is working as a Company Secretary to cause harm in his legal career.
Q. Have you filed any documents on record that can show that plaintiff is working as an Assistant to Mr. Shobhan Mahanti? A. No I have not filed any documents.
It is wrong to suggest that I have pleaded in my evidence by way of affidavit that the Plaintiff is working as an assistant to Mr. Shobhan Mahanti to hatch a criminal conspiracy to grab the hard-earned money of the plaintiff. Q. Have you filed any document that Mr. Shobhan mahanti and the plaintiff are working as a money lender?
A. Yes, I have filed documents.
Q. Can you show the said document from the judicial file? A. Yes, the Email dated 05.05.2018 which is marked as Mark-B. It is wrong to suggest that the Emails does not show that the Mr. Shobhan Mahanti and Plaintiff are working as money lenders. Q. Can you tell that the plaintiff and Mr. Shobhan Mahanti have received any amount except the amount involved in the matters, which are pending before the several courts situated in Delhi?
A. It could be possible.
Q. Can you produce any document to show any other money transaction as mentioned in preceding question?
A. Yes, some online transactions can be there. Q. How did you get to know about Adv. Shobhan Mahanti? A. I came to know about him through my friend Me. Pradyuman Dubey, 1 contacted Mr. Pradyuman Dubey to refer a professional to incorporate my new company.
Q. How did you decide to buy the property situated at F-84/85/86 UPSIDC Industrial Area Malwan, UP-212664 District Fatehpur? A. I explored possible options in UP as near as possible to Lucknow and finalized these plots.
Q. Is it a leasehold plot or freehold?
A. It is leasehold plot.
Q. How much money was paid to UPSIDC for purchase of said plots? A. I do not remember as the transaction was done in the year 2014 and 2015. Q. How paid the consideration for the purchase of the said plots? A. It was paid by me and my father.
Q. What is the nature of use of the said plots?
A. It is industrial.
Q. For what purpose these plots were purchased? A. Initially it was purchased for manufacturing facility and later we informed UPSIDC that we will set up a plant for packaged drinking water and other beverages.
Q. Can you tell us how much time was taken for the approval of name Qooz Pvt. Ltd. (OPC) by the ROC, Kanpur?
A. I do not exactly remember but it was around a week. Q. How many times did you meet with the ROC, Kanpur for name approval? A. I do not remember.
Q. Did you meet with the ROC, Kanpur for name approval of Qooz Pvt. Ltd. (OPC) in the year 2015?
A. I do not remember.
Q. Is it correct that the [email protected] belongs to you? A. Yes. The witness is confronted with an email sent by him from his email address The @saurabhdayal.com dated 23.01.2015 to Mr. Shobhan Mahanti and The Plaintiff and the same is hereby marked as Mark DX2. After perusing the said email Vol. I did meet with ROC, Kanpur. Q. Is it correct that the name Qooz Industries Pvt. Ltd. (OPC) was applied with the ROC, Kanpur and approved by him on the same day? A. I do not remember exactly but it was done quickly maybe within next day. It is wrong to suggest that I am very well aware that the application for name approval was filed while I was sitting before ROC, Kanpur with my sister- in- law Mrs. Vrunda M. Desai and the same was approved immediately. Q. Did you have any experience in running the business of packaged drinking water before you set up the business of Qooz Industries (OPC) Pvt. Ltd.? A. No. Q. Is it correct that the site map of the factory was prepared by you and you only got it approved by the UPSIDC?
CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 14 of 24A. Yes, I prepared a site map and submitted the same with UPSIDC but the same was never approved.
Q. Is it correct that you approached the Bank of Baroda Fatehpur Branch for credit limit against the mortgaged property bearing no. F-84/85/86 UPSIDC Industrial Area Malwan, UP-212664 District Fatehpur? A. Yes, I approached the Bank of Baroda Fatehpur branch for the term loan and cash credit limit against the said property. Q. What was the amount applied for with the Bank of Baroda? A. It was 1 crore (INR).
Q. How much amount was approved by the Bank of Baroda? A. Rs. 1 crore (INR).
Q. What the valuation of the said property assessed by the Bank for the said loan?
A. It was more than Rs. 1 crore in the year 2016.
Q. Is it correct that you signed and submitted all documents required for obtaining BIS license for Qooz Industries OPC Pvt Ltd? A. Yes, I applied and submitted the documents. Q. Is it correct that all ITR, GST returns, ROC returns of Qooz Industries OPC Pvt Ltd since incorporation have been submitted by using your signatures?
A. Yes.
Q. Is it correct that all employees of Qooz Industries (OPC) Pvt Ltd since incorporation in 2015 have been appointed by you? A. Yes. The final decision was mine.
Q. Is it correct that salaries of all employees were paid by you? A. Yes, through the company's A/c and in cash as the case maybe. Q. Is it correct that their employment has been terminated by you as and when required?
A. Yes.
Q. Is it correct that all Audited financial statements of Qooz Industries (OPC) Pvt Ltd since its incorporation have been signed by you as a director? A. Yes.
Q. Is it correct that purchase of all raw materials and sell of finished product from the factory of Qooz Industries (OPC) Pvt Ltd was done by you? A. Yes, it was done by me and my employees.
Q. Can you tell the details of the bank A/cs of the Qooz Industries (OPC) Pvt Ltd?
A. Yes there two A/es are in Bank of Baroda Fatehpur Branch and ICICI Bank, Vibhav Khand, gomti nagar, Lucknow.
Q. Is it correct that you are the authorized signatory to the bank A/cs of the Qooz Industries (OPC) Pvt Ltd with Bank of Baroda and ICICI Bank? A. Yes.
Q. Is it correct that the Plaintiff and Mr. Shobhan Mahanti were never authorised signatories in the said bank A/cs of Qooz Industries (OPC) Pvt Ltd?
A. Yes, Only I was the authorised signatory.
Q. Is it correct that you are managing day to day affairs of Qooz Industries (OPC) Pvt Ltd?
A. Yes but since 2021 onwards due to medical conditions in my absence my employees have also been involved in running the business as per my directions.
Q. Did you share your login ID and password credentials of above-stated bank A/cs with anyone?
A. Yes, sometimes I did share them with my CA or CS for the purpose of ITR.
Q. Is it correct that you used to single handedly manage all affairs of Qooz Industries (OPC) Pvt Ltd including its finances? A. Yes, it is correct but I was advised by many people. It is wrong to suggest that Adv Shobhan Mahanti and The Plaintiff had no active role in the management of Qooz Industries (OPC) Pvt Ltd. Q. Is it correct that Bank of Baroda filed a case against Qooz Industries (OPC) Pvt Ltd before the DRT, Allahabad, UP?
A. Yes.
Q. What is the outstanding amount to be paid by Qooz Industries (OPC) Pvt Ltd to Bank of Baroda currently?
A. I do not remember.
The witness is confronted with a screenshot of the DRT portal mentioning the case filed by the Bank of Baroda against Qooz Industries (OPC) Pvt Ltd and the same is hereby marked as Mark DX3.
It is wrong to suggest that I am not disclosing the outstanding amount even CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 15 of 24 though I am aware of it. Vol. it is between Rs. 45 to 50 Lacs approximately. Q. Is it correct that a number of times you did not have electricity at the premises situated at F-84/85/86 UPSIDC Industrial Area Malwan, UP- 212664 District Fatehpur between the period from August 2019 to February 2020 and during this period even your parents did not provide any financial assistance to you?
A. No, it is wrong the electricity was continuously disconnected between August 2019 till Februrary 2020, thereafter I filed a Writ petition before the Hon'ble Allahabad High Court and the judgment came in my favour and subsequently my father helped me with funds which I paid to the electricity department in accordance with the order of the High court and my electricity connection was reconnected.
Q. How was the performance of Qooz Industries (OPC) Pvt Ltd during the last four years?
A. Not good.
Q. When did you file the last audited financial statement of the Qooz Industries (OPC) Pvt Ltd?
A. I do not remember.
Q. Is it correct that you have not filed the audited financial statement of Qooz Industries (OPC) Pvt Ltd since 2020 with ROC, Kanpur? A. I do not remember. After checking the MCA website master data on mobile phone. Vol. It has been filed till 31.03.21. Q. Is it correct that the audited financial statements of Qooz Industries (OPC) Pvt Ltd was not filed because the same could not be audited by statutory auditor?
A. No. Vol. It is completed since the last financial year i.e FY 2022-23. I have brought the ITR of FY 2022-23 and 2023-2024 of the Qooz Industries (OPC) Pvt Ltd and same are marked as Mark DX-4 and Mark DX-5. Q. How many mobile numbers do you use?
A. I use two mobile numbers which are 7080078007, 9810283865. Q. What are the false, fabricated, etc. documents which have been placed on record by the plaintiff as mentioned in the para no 24 of your evidence by way of affidavit?
A. I am not able recall the same. (The Witness has been shown the judicial file to refresh his memory). I cannot tell those documents. It is wrong to suggest that no documents have been placed on record by the plaintiff which are false, frivolous, fabricated and manufactured documents, that's why I am not able to recall, It is wrong to suggest that the plaintiff has approached this Hon'ble with clean hands and has not supressed any material facts from this Hon'ble court. Q. How many companies and LL.Ps have you incorporated wherein you are a director or designated partner?
A. Four companies namely Web Ocean India Pvt. Ltd., Qooz. Industries (OPC) Pvt Ltd, Qooz Ltd., and Hexa Bloom Pvt Ltd. Q. Can you tell what documents did you provide to the professionals to incorporate the above stated companies?
A. I submitted copy of my PAN, Adhaar Card. Electricity Bill for address proof and NOC of the owner/landlord.
Q. The addresses of Defendant no. 1 and 2 as mentioned in Memo of parties and your affidavit with written statement are correct? A. Yes, they are correct.
It is correct that I did not reply to the Legal Notice Dated 15.04.2024 which is Ex. PW-1/5.
It is correct that I have not placed any documents that can reflect that I have paid amount of Rs. 14,33,000/- to the plaintiff along with annualized rate of return of 14.35% per annum.
Q. Is it correct that you have received the Rs. 5,00,000/- on 14.06.2019, Rs.5 Lacs on 18.06.2019, and Rs. 4,33,000/- on 28.06.2019 from the bank A/c of the plaintiff with SBI to your Bank A/c with ICICI Bank? A. Yes, I have received the total amount of Rs. 14,33,000/- from the plaintiff. It is correct that I have received the email dated 08.06.2019 from the plaintiff informing me about the Loan of Rs. 15 lacs which was approved by Bajaj Finance Ltd at annualized rate of return of 14.35% p.a. for the purpose of a paying me. The Copy of the Email dated 08.06.2019 with certificate U/s 63. BSA, 2023 are exhibited as Ex. DW-1/1 (Colly.). It is correct that I and my family members have been trying to sell the Industrial plot situated at F-84/85/86 UPSIDC Industrial Area Malwan, Fatehpur, UP since 2019.
Q. Have you placed on record any settlement deed which can show that you have paid the entire amount of Rs. 14,33,000/- along with annualized rate of CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 16 of 24 return of 14.35%?
A. No. Q. How many installments have you paid to the plaintiff? A. I have paid at least 12 installments to the Plaintiff. Q. Can you show any documents from the court record which reflect the payment of abovementioned 12 installments to the plaintiff? A. No, I have not placed any such documents on record. It is wrong to suggest that I did not place any documents because I did not transfer the said 12 installments to the plaintiff. It is correct that I have made payment of only 3 installments to the plaintiff. Q. Have you taken any loan from any bank in the past? A. Yes, I have taken a loan from Bank of Baroda.
Q. How much amount have you repaid to the Bank of Baroda for the said loan?
A. I have paid at least Rs. 50 lacs to the Bank of Baroda. Q. How many years did you take to pay the said amount of Rs. 50 Lacs to the Bank?
A. I paid the said amount in about 8 years maximum. It is correct that initially the amount of repayment EMIs will be towards interest.
Q. Have you ever made any cash payment of EMI to the Plaintiff? A. Yes Q. Have you placed on record any cash receipt for the payments made to the plaintiff?
A. No. It is wrong to suggest that you did not pay any amount in cash towards EMI to the Plaintiff. That's why you did not place any document on record. Q. Do you know that the plaintiff is not covered under Sec. 3 of the Punjab Registration of money lenders Act, 1938?
A. I am not aware about the legalities of Sec. 3 of the Punjab Registration of money lenders Act, 1938.
It is wrong to suggest that the plaintiff does not fall under Sec. 3 of the Punjab Registration of money lenders Act, 1938.
It is correct that the I put my signature at Point A and B of Ex. DW-1/A after consultation with my counsel.
It is wrong to suggest that I have mentioned wrong facts about my transaction with the plaintiff in my evidence by way of affidavit so as to avoid my legal liability towards the plaintiff.
It is wrong to suggest that I deliberately did not transfer the property situated at F-85 UPSDIC Industrial Area, Malwan, UP after taking money from the plaintiff for my wrongful gain.
It is wrong to suggest that I lured the plaintiff into giving the amount of Rs. 14,33,000/- to me by providing him a copy of the lease deed for the abovementioned property without having any intention of selling the said property.
Q. Are the documents and photographs which have been emailed by your counsel to the Ld. L.C and Adv Siddhant Katyal to seek adjournment are true and correct documents?
A. Yes, these are the true and correct documents and photographs. Q. Is it allowed to click photographs inside the X-ray and ECG room while getting the test done?
A. I am not aware about the same.
Q. Have you placed on record any document which can show that the money was transferred by the plaintiff to you're a/c for the purpose other than the purchase of abovementioned property (F-85)? A. No. Q. Have you placed on record any document which can show that Mr. Shobhan Mahanti has acted in malicious manner by misutilizing the documents and information related to the defendant at his disposal? A. No. Q. Have you placed on record any document which can show that you had entrusted the plaintiff and Mr. Shobhan Mahanti with your finances? A. No. It wrong to suggest that this Hon'ble court has jurisdiction over the present case.
It is wrong to suggest that I need to pay Rs. 14,33,000/- to the Plaintiff alongwith annualized rate of return of 14.35% p.a. It is wrong to suggest that I have not paid any money in cash to the plaintiff. It is wrong to suggest that the plaintiff and Mr. Shobhan Mahanti are not money lenders as per the applicable law.
CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 17 of 24It is wrong to suggest that I am deposing falsely".
7. Final arguments heard. Record perused carefully. I have gone through the testimony of both the parties and on the basis of documents, pleadings and testimony of witnesses, my issue wise findings are as follows:
Issue No.1: Whether the suit of the plaintiff is not maintainable as per law? OPD
8. The onus to prove the said issue was upon the defendant. The main argument since the inception of this case of the defendant is that the present dispute does not fall under the definition of commercial dispute within the meaning of Section 2 (1)(c) of the Commercial Courts Act, 2015.
9. On the other hand, plaintiff has filed the present suit being a commercial dispute by submitting that the present dispute is a commercial dispute within the meaning of Section 2(1)(c)(vii) of the Commercial Courts Act, 2015. Even otherwise, this issue being a legal issue, it is the duty of the court to independently adjudicate upon the fact and law whether the suit filed by the plaintiff is one governed under the Commercial Courts Act, 2015.
10. The admitted facts between both the parties are that defendant no.1 approached the plaintiff for the purpose of some loan as he was under certain financial difficulties. In view of securing the loan a property bearing no. F-85, UPSIDC Industrial Area, Malwan-212664 was being considered by both the parties. In order to financially help the defendant, plaintiff obtained a loan for Rs. 15,18,499/- from Bajaj Finance Ltd @ 14.35 % per CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 18 of 24 annum for a tenure of 72 months. Plaintiff has made a payment of Rs. 14,33,000/- to defendant no.1. It is the case of the plaintiff that he entered into an oral understanding with defendant no.1 that in case the transaction related to the sale of plot No. F-85, UPSIDC Industrial Area is not consummated, defendant no.1 would repay to the plaintiff the same amount alongwith interest @ 14.35 % per annum. Admittedly, no agreement to sell has been executed between plaintiff and the defendant. In the background of these facts, now this court would adjudicate upon whether the present dispute is a commercial dispute or not?
11. During the course of consideration, I could lay my hand on the celebrated judgment passed by Hon'ble High Court of Calcutta in case titled "Ladymoon Towers Private Limited Vs. Mahendra Investment Advisors Private Limited CS/99/2020 and IA No. GA/4/2021 dated 13th August, 2021" wherein it was held as under:
"The statements in the plaint make it evident that the Directors of the plaintiff and the defendant were known to each other which served as a reason for the plain to part with Rs. 50 lakhs by way of a short-term loan. The Memorandum of Association of the plaintiff which is annexed to the plaintiff states that the plaintiff carries on business of acquisition by purchase, lease, etc, for development of land and buildings. The Objects of the Plaintiff Company provide that the plaintiff carries on real estate and construction business. It is hence evident that the plaintiff's regular business is not of lending money and the plaint also does not contain any statement to that effect. The loan given by the plaintiff to the defendant was based on a familiarity between the Directors of the parties and can hence be assumed that the loan was in the nature of what is occasionally referred to as a "hand-loan" and was not given in the regular course of business or as a commercial Joan. This assumes importance in the difference recognised under Section 34 of The Code of Civil Procedure, 1908 between the rate of interest to be adjudged on a decree for payment of money and a liability arising out of a commercial transaction. The aforesaid would find support from Manesh Rajkumar Kanhed vs. Ramesh Bhagwansa Walale, AIR 2007 Bom 86, wherein it was held that taking of a "hand-loan"
for starting a business of agency cannot come within the four-corners of the definition of a commercial transaction. Dena Bank vs. Prakash Birbhan Katariya; AIR 1994 Bom 343 also rejected the idea of a loan advanced for the construction of a hospital being termed as a commercial transaction. The definition section of the 2015 Act only contemplates a "commercial dispute" and not any other form of dispute where the basis of disagreement between the parties has a non-commercial cause. The gradation of disputes in Section 2(1)(c) taking into account all possible forms of agreements from which a "commercial dispute" may arise, makes it clear that the framers of the statute gave emphasis on the commercial flavour of the transaction as CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 19 of 24 opposed to agreements entered into between parties without a commercial purpose. The qualification of the person being a Merchant, Banker, Trader or Financier imparts an unimpeachable commercial flavour to the transaction and the resulting dispute. The Insolvency and Bankruptcy Code, 2016, for example, defines a dispute from a broader perspective as any suit or arbitration proceedings relating to an existing debt - Section 5(6)(a). The commercial purpose would generally mean a transaction by which a person's commercial or economic interests may be advanced and would result in an economic benefit to that person. It would not include an agreement where profit-making is an incidental outcome of the transaction or may happen by accident. Although, a "hand loan", for example, is given by a person or entity to another with the expected outcome of the principal sum being returned with interest, the essential commercial flavour in such a loan may be lost by reason of the informal terms under which the money is lent and advanced and the consequent uncertainty which may result therefrom. The requirement of fixing the transaction within the ambit of Section 2(1)(c)(i), namely, between the named classes of persons can be construed being in aid of what the Act intends to cut down, namely, unnecessary wastage of time on ascertaining whether a dispute is a commercial dispute. The exhaustive categories of agreements in 2(1)(c)(i) - (xxii) leaves no doubt that the 2015 Act seeks to bring within its fold an inclusive range of disputes where the underlying purpose of the transaction is a commercial interest of the parties."
12. In this case the issue which arises before Hon'ble High Court of Calcutta was whether the suit, filed before a Commercial Division of this court should be tried under the provisions of the Commercial Courts Act, 2015 or be heard as a regular suit. It has been held in this case that the loan given by the plaintiff to the defendant was based on a familiarity between the Directors of the parties and can hence, be assumed that the loan was in the nature of what is occasionally referred to as a hand-loan and was not given in the regular course of business or as a commercial loan. It has been further held that this assumes importance in the difference recognised under Section 34 of the Code of Civil Procedure, 1908 between the rate of interest to the adjusted on a decree for payment of money and a liablity arising out of a commercial transaction. This has been further held by Hon'ble High Court that the aforesaid would find support from Manesh Rajkumar Kanhed Vs. Ramesh Bhagwansa Walale; AIR 2007 Bom 86, wherein it was held that taking of a "hand-loan"
for starting a business of agency cannot come within the four-CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 20 of 24
corners of the definition of a commercial transaction. In the case of Dena Bank Vs. Prakash Birbhan Katariya; AIR 1994 Bom 343, court also rejected the idea of a loan advanced for the construction of a hospital being termed as a commercial transaction.
In another judgment passed by Hon'ble High Court of Bombay in case titled "Manesh Rajkumar Kanhed Vs. Ramesh Bhagwansa Walale, AIR 2007 Bom 86" it was held as under:
"Therefore, taking of hand-loan for whatever purposes, including starting a business of agency, cannot come within the four-corners of definition of "commercial transaction" and therefore, I hold that the finding recorded by both the Courts below that the transaction between the parties was a commercial transaction, is an error apparent from the record and especially when, it is an admitted position that it was a hand-loan between the relatives of each other".
13. In another judgment passed by Hon'ble High Court of Calcutta in case titled "Santosh Kumar Bhadani Vs. Om Prakash Agarwala, CS 28 OF 2020 and IA. No. GA3 of 2023" it was held as under:
"The definition section of the 2015 Act only contemplates a "commercial dispute" and not any other form of dispute where the basis of disagreement between the parties has a noncommercial cause. The gradation of disputes in Section 2(1)(c) taking into account all possible forms of agreements from which a "commercial dispute" may arise, makes it clear that the framers of the statute gave emphasis on the commercial flavour of the transaction as opposed to agreements entered into between parties without a commercial purpose. The qualification of the person being a Merchant, Banker, Trader or Financier imparts an unimpeachable commercial flavour to the transaction and the resulting dispute. The Insolvency and Bankruptcy Code, 2016, for example, defines a dispute from a broader perspective as any suit or arbitration proceedings relating to an existing debt Section 5(6)(a). The commercial purpose would generally mean a transaction by which a person's commercial or economic interests may be advanced and would result in an economic benefit to that person. It would not include an agreement where profit-making is an incidental outcome of the transaction or may happen by accident. Although, a "hand loan", for example, is given by a person or entity to another with the expected outcome of the principal sum being returned with interest, the essential commercial flavour in such a loan may be lost by reason of the informal terms under which the money is lent and advanced and the consequent uncertainty which may result therefrom. The requirement of fixing the transaction within the ambit of Section 2(1)(c)(i), namely, between the named classes of persons can be construed being in aid of what the Act intends to cut down, namely, unnecessary wastage of time on ascertaining whether a dispute is a commercial dispute. The exhaustive categories of agreements in 2(1)(c)(i) - (xxii) leaves no doubt that the 2015 Act seeks to bring within its fold an inclusive range of disputes where the underlying purpose of the transaction is a commercial interest of the parties."
"9. In the present case upon combined reading of the plaint and the documents relied upon by the plaintiff it is the case of hand loan not a business CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 21 of 24 transaction between the parties. Simply the defendant had obtained loan from plaintiff with an agreement that he will return the same with 15% interest, thus taking of hand loan without any business transaction between the parties will not fulfill the provisions of Section 2 (1) (c) of the Commercial Courts Act, 2015".
14. In another judgment passed by Hon'ble High Court of Delhi in case titled "Kailash Devi Khanna & Ors. Vs. D.D, Global Capital Ltd. & Ors. CS (COMM) 34/2016" it was held as under:
"29. The counsel for the plaintiffs, on being asked to show under which Clause of Section 2(1)(c) of the Commercial Courts Act, 2015, the present claim constitutes a commercial dispute, draws attention to clause (i) of Section 2(1)(c) of the Commercial Courts Act but which provides for "ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents" to constitute commercial disputes".
30. However, all suits for recovery of monies cannot fall under Clause (i) Supra of Section 2(1)(c) of the Commercial Courts Act. Suffice it is to state that the suit is not based on any transaction relating to mercantile documents. Thus, the suit is found to have been wrongly filed as a commercial suit.
15. In another judgment passed by Hon'ble High Court of Calcutta in case titled "Prime Hitech Textiles LLP Vs. Manish Kumar, CS/141/2021" it was held that D to D. "After considering the above referred judgments this Court has carefully gone through the plaint and the documents relied by the plaintiff. It reveals that in none of the paragraph of the plaint it is mentioned that the transaction between the plaintiff and the defendant was in connection with any business. On plain reading of the paragraph 16 on the basis of which the plaintiff has prayed for a decree for an amount of Rs. 1,76,74,315.07/- is a simple suit of recovery of money. The plaintiff tried to made out a case of in commercial nature in the paragraphs 2 and 3 of the plaint but in the said paragraphs, the plaintiff has only explained the business of both the parties but it is nothing in the plaint that the transaction between the parties are connected with any business transaction."
"It is settled law that all suit for recovery of money cannot fall under Section 2(1)(c) of the Commercials Courts Act, 2015."
16. In the present case also plaintiff has tried to make out a case of a commercial nature to be brought within the ambit of Section 2(1)(c)(vii) of the Commercial Courts Act, 2015. Section 2 (1) (c) (vii) of Commercial Courts Act, 2015 is reproduced as under:
"(vii) agreements relating to immovable property used exclusively in trade or commerce".
17. Section 2 (1)(c)(vii) deals with the agreements relating to CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 22 of 24 immovable property which is exclusively used for trade and commerce. Since the property in question is an Industrial plot, henceforth, the relevant provisions for sale of this property is enshrined in the Transfer of Property Act, 1881.
Section 54 of the aforesaid Act is reproduced as under:
54. "Sale" defined.-"Sale" is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.
Sale how made. Such transfer, in the case of tangible immovable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument. In the case of tangible immovable property of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property.
18. Admittedly, in the present case no document has been executed by way of agreement to sell or any other document in order to understand the intention of both the parties. It has been held by Hon'ble Supreme Court in case titled "Crest Hotel Ltd Vs. Assistant Superintendent of Stamps, AIR 1994 Bom 228".
"A contract for sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties. It does not, of itself create any interest in or charge on such property. Agreement for sale is merely a document creating a right to obtain another document of sale on fulfillment of terms and conditions specified therein. On the strength of such an agreement a buyer does mot become the owner of the property. The ownership remains with the seller. It will be transferred to he buyer only on the execution of sale deed by the seller. The buyer obtains only a right to get the sale deed executed in his favour. It has been held that the cancellation of the agreement took place before possession could be given to the purchasers, hence there was no sale of the flats".
19. I could further lay my hand in case titled "Subramaniyan (Died) vs. Venkatachalam Pillai S.A No. 819/2002", wherein Hon'ble High Court has held that an oral sale of a tangible immovable property of the value of more than Rs. 100/- is invalid in law. The relevant paragraph of the judgment is reproduced as under:
In the given case on hand it is pertinent to note here that the plaintiff had filed the suit for the relief of declaration of title and consequential relief of injunction. Since the consideration of oral sale exceeds Rs. 100/- i.e. the alleged sale consideration is Rs. 3000/-, as contemplated under Sections 9 and 54 of Transfer of Property Act, the sale must be in writing and registered.
Only on this ground it is construed that the title has not been legally passed on to the plaintiff. As adumbrated supra, it is not the case of the defendants that CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 23 of 24 the possession of the plaintiff is unlawful. According to the plaintiff, he has been in possession from 1977 onwards. As on the date of filing the suit also the plaintiff was in possession and till date he has not been evicted from the suit property by due process of law.
20. I could further lay my hand in the celebrated judgment passed by Hon'ble Apex Court in case titled "Suraj Lamp & Industries (P) Ld.Tr.Dir vs State Of Haryana & Anr on 11 October, 2011". The relevant paragraph of the judgment is reproduced as under:
12. Any contract of sale (agreement to sell) which is not a registered deed of conveyance (deed of sale) would fall short of the requirements of Section 54 & 55 of TP Act and will not confer any title nor transfer any interest in an immovable property (except to the limited right granted under section 53A of TP Act). According to TP Act, an agreement of sale, whether with possession or without possession, is not a conveyance. Section 54 of TP Act enacts that sale of immovable property can be made only by a registered instrument and an agreement of sale does not create any interest or charge on its subject matter.
21. On the basis of the above cited judgments and the judgment, I am of the considered opinion that in the absence of a due agreement executed between the parties for the sale of property in question, the transaction between the parties would only remain as a personal loan transaction and cannot in any manner be governed under the provisions of Commercial Courts Act, 2015. Resultantly, the suit of the plaintiff is hereby dismissed being not maintainable before this court.
22. File be consigned to Record Room after due compliance.
Digitally signed by NEELAM SINGH NEELAM Date:
Announced & dictated SINGH 2025.01.18
13:22:11
in the open Court on +0530
this 18th day of January, 2025 (NEELAM SINGH)
District Judge
(Commercial Court-02)
South-East, Saket Courts, ND
18.01.2025
CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 24 of 24
CS (COMM)-737/22
Rakesh Kumar Vs. Saurabh Dayal & Anr.
18.01.2025
Present: Sh. Sidhant Katyal, Ld. Counsel for plaintiff
(through VC).
None for defendant.
Vide separate judgment announced in the open court, the suit of the plaintiff is dismissed.
File be consigned to record room after due
Digitally signed by
compliance. NEELAM NEELAM SINGH
SINGH Date: 2025.01.18
13:22:26 +0530
(NEELAM SINGH)
District Judge
(Commercial Court-02)
South-East, Saket Courts, ND
18.01.2025 jm
CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 25 of 24