Calcutta High Court
Merlin Orihects Ltd vs Educo Ventures Pvt. Ltd on 23 July, 2014
Equivalent citations: AIR 2015 (NOC) 65 (CAL.)
Author: I.P. Mukerji
Bench: I.P. Mukerji
G.A. No. 846 of 2014
G.A. No. 847 of 2014
C.S. No. 96 of 2014
IN THE HIGH COURT AT CALCUTTA
Original Civil Jurisdiction
Original Side
MERLIN ORIHECTS LTD.
Vs.
EDUCO VENTURES PVT. LTD.
For petitioner : Mr. Abhrajit Mitra, Sr. Advocate
Ms. Jishnu Chowdhury, Advocate
Mr. Satadeep Bhattacharjee, Advocate
Mr. Soumabho Ghosh, Advocate
For Respondent : Mr. Pratap Chatterjee, Sr. Advocate
Mr. Jishnu Saha Sr. Advocate
Mr. Sabyasachi Chowdhury, Advocate
Mr. Anirban Roy, Advocate
Mr. V.V.V. Sastry, Advocate
Heard on : 26.06.2014
Judgment on : 23.07.2014
I.P. MUKERJI, J.
Two applications made by the plaintiff were heard together by me. The first application (G.A. 846 of 2014) contained the following prayers:
"a) A fit and proper person be appointed as Receiver/Special Officer and the Receiver/Special Officer so appointed be directed to do the following:-
(i) Make an inventory of the suit premises situated at Mouza Uttar Khazirhat, P.S. Bishnupur, District:
24- Parganas (south) more fully described in Annexure 'A' to the plaint filed in the present suit:
(ii) Submit a report before this Hon'ble Court:
(iii) Take physical possession of the suit premises situated at mouza Uttar Khazirhat, P.S. Bishnupur, District: 24-Parganas (South) and keep the same in his possession until disposal of the suit.
b) Injunction restraining the respondent from dealing with and/or disposing of and/or encumbering and/or alienating and/or creating any third party rights or interests in respect of the said premises more fully described in Annexure 'A' to the plaint filed in the present suit or from changing the nature or character of the said premises in any manner whatsoever;
c) Ad interim orders in terms of prayers above:
d) Such further and/or other order or orders be passed, direction or directions be given as Your Kordships may deem fit and proper."
The second application (GA 847 of 2014) also made by the plaintiff was for the following reliefs:
"(a) A fit and proper Hand Writing Expert be appointed and be directed to examine the original of the document being Annexure 'B' to the plaint to ascertain whether the same has been signed by the respondent's director. Aditya Kumar and contains his handwriting and file a report in respect thereof before the Hon'ble Court;
(b) In the event, the report of the Hand Writing Expert records that the agreement being Axxexure 'B' to the plaint has been signed by Aditya Kumar and contained his handwriting:-
(i) Enquiry be made into offences referred to in Section 195(1)(b) of Cr.P.C. in relation to the present proceedings by the accused persons mention in paragraph 10 hereof for giving false evidence;
(ii) Upon holding enquiry in terms of prayer(i) above, record a finding that the accused persons mentioned in paragraph 10 hereof have given false evidence and has committed offences under section 195(1)(b) of the Cr.P.C.
(iii) Make a complaint against the accused persons mentioned in paragraph 10 above in writing;
(iv) Send the complaint recorded by this Hon'ble Court in terms of prayer (b) above to the Metropolitan Magistrate, Court, Kolkata;
(v) The accused persons mentioned in paragraph 10 above be directed to furnish security of a sum of Rs. 20 crores or other security found to be sufficient by the Hon'ble Court for their appearance before the Court Metropolitan Magistrate Court, Kolkata;
(vi) Upon failure of the accused persons to furnish security in terms of prayer (v) above, the accused persons mentioned in paragraph 10 hereof be committed to prison;
(vii) Alternatively, to prayer;
(viii) Above, the accused persons mentioned in paragraph 10 hereof be committed to custody and be produced before the Learned Metropolitan Magistrate, Kolkata;
(c) Ad interim orders in terms of prayers above;
(d) Such further and/or other order or orders be passed, direction or directions be given as Your Lordships may deem, fit and proper."
I will deal with the application G.A. 846 of 2014 first. The plaintiff base their rights on an alleged agreement for sale dated 21st November, 2013 between themselves and the defendant. By this document, the defendant allegedly promised to sell to them or their nominee, 404.33 decimals of land at Mouza Uttar Khazirhat, P.S. Bishnupur, District: 24-Parganas (South). The consideration as shown in paragraph 6 of the petition was more than Rs. 6 crores. A substantial portion of the said consideration would be paid to a company Merlin Leisure Private Limited, a sister concern of the plaintiff towards which the defendant was said to have dues.
When the plaintiff called upon the defendant to finalise the draft deed of conveyance sent to them, by their email dated 29th January, 2014, the defendant replied that it had not been received by them.
The suit is for specific performance of the said agreement. The above prayers made in this application are in aid it.
Learned counsel for the defendant submits that the alleged agreement of 21st November, 2013 is a forged document. The signature of Mr. Aditya Kumar, the director of the defendant has been forged therein. He showed me the email exchange on 7th February, 2014 between the parties. They appear to suggest that the agreement was at a draft stage, undergoing negotiations and alterations, it was submitted.
The email of Ahmed for the plaintiff to Aditya of the defendant dated 27th February, 2014 stated that the conveyance would be executed on the following in the office of the plaintiff at Prince Anwar Shah Road at 5 P.M. Again Ahmed emailed to Aditya on 28th February, 2014 that the execution of the conveyance would take place on that date at 5 P.M. Therefore, according to learned counsel the alleged Memorandum of Understanding of 21st November, 2013 was at best a preliminary document and never created any rights between the parties.
According to learned counsel for the defendant a portion of mail had not been reproduced in the petition.
Arguments were also made on behalf of the defendant on the Indian Stamp Act, 1899. It was said on their behalf that the alleged agreement for sale dated 21st November, 2013 was deficiently stamped. It was on a Rs. 100/- stamp paper only. Mr. Chatterjee, learned senior advocate argued that the document could not be admitted in evidence. Section 35 of the Stamp Act, 1899 applied to all stages of the proceeding, according to Sms Tea Estates Private Limited Vs. Chandmari Tea Company Private Limited reported in (2011) 14 SCC 66.
In dealing with the rival arguments an email of 9th October, 2013 from Aditya Kumar to S. Ahmed is most important. The said email is set out below:
From : Aditya Kumar {mailto:[email protected]] Sent: 09 October, 2013 15:35 To: Sushil Mohta Cc: S. Ahmed: Saket Mohta Subject: Outstandings Dear Sushil Uncle' Am writing this emil to you post a a discussion I had with Saket.
First, I would like to apologise for not being present at the meeting last week. As Rishav would have shared with you - I had a medical emergency in my family for which I was in Delhi and was unable to leave. I was unable to hold up the commitments I had made on behalf of Oaktree, i.e. to make payments by the 30th of September which failed due to circumstances beyond my control. The funds which was I was trying to arrange from Bangalore, I was unable to release due to a family dispute.
Second, please know that we understand and respect that the services rendered to us by Ibiza are separate from the land deal which we have been discussing with Saket and yourself.
However, Saket had made us a final offer for a joint development for 20acres of land, wherein 3 acres of land was to be purchased outright by you at 3.5 lakhs/cottha, i.e. for a gross up-front consideration of 6.3 crores.
As far as the entire land is concerned, we are contemplating between opening a medical college or any other institution, and between some offers for sale which are at 4 lakhs/cottha. However, this will take it's own time and we are not sure whether we will go down the path of outright sale, joint development, or using the land for another project yet.
As you unfortunately know, we have an immediate requirement of cash in the project, a large part of which is required to clear your dues. Given your interest in pursuing a project in our area, we had made a proposal and discussed this with Saket. We would be willing to offer you 4 acres of land at the price of 2.5 lakhs/cottha, i.e. for a gross consideration of 6 crores. We would ask the following (1) that our dues with Ibiza until 30th November be adjusted against this and (2) that we receive an advance of 75 lakhs at the time of signing. From out side, the entire transaction can be completed within the month of October. There is farmer land available around out plot, which you can use to increase your holding from 4 acres if you desire to, once you have the access to the land from us, at a discounted price.
We are trying our level best to come to a solution to the problem that we have landed ourselves in. Rishav is trying to organise some funds by tomorrow, however we are not certain about whether these will come to you in time.
Sorry for all the inconvenience-I hope you know that we are trying our level best to clear all our dues as soon as possible. Regards, Aditya.
It is plain from this email that the defendant was a debtor of the plaintiff. The property would be sold to them for "Rs.6 crores gross", adjusting the debt receivable from the defendant. I looked into the alleged Memorandum of Understanding to find out what was meant by a gross consideration of Rs. 6 crores. It appears from the document that one of the components of the consideration was Rs. 1,04,00,000/- payable to the plaintiff's sister concern Merlin Leisure Pvt. Ltd. which was a creditor of the defendant.. In addition, the plaintiff would "compensate" the defendant Rs.3,50,00,000/- for some road access service. A further Rs. 50 lacs was payable by the plaintiff. The plaintiff would have to make a further payment of Rs. 46 lacs to Merlin Leisure Pvt. Ltd. and Rs. 55 lacs to a chartered accountant. Therefore, the components of consideration to be Rs. 1,04,00,000/- + Rs. 46 lacs + Rs. 55 lacs + Rs.50 lacs Rs.3,50,00,000/-. This added up to a little more than Rs. 6 crores.
Now, let us see to what extent the point recording deficiency of stamp in the document succeeds.
In Avinash Kumar Chauhan Vs. Vijay Krishna Mishra reported in 2009(2) SCC 532, the Hon'ble Supreme Court has made it absolutely clear that if a document is inadmissible in evidence for being insufficiently stamped, it cannot be used for any purpose whatsoever. The following dictum was pronounced in paragraph 25 of the judgment "25. Section 35 of the Act, however, rules out applicability of such provision as it is categorically provided therein that a document of this nature shall not be admitted for any purpose whatsoever. If all purposes for which the document is sought to be brought in evidence are excluded, we fail to see any reason as to how the document would be admissible for collateral purposes."
In Sms Tea Estates Private Limited Vs. Chandmari Tea Company Private Limited, (2011) 14 SCC 66, a difference between Section 35 of the Stamp Act and Section 49 of the Registration Act was drawn by the Hon'ble Supreme Court. The proviso to Section 49 of the Registration Act, 1908 provides that a document required to be registered, but not registered can be looked into as evidence of any collateral transaction. In this judgment, Raveendran, J. pronouncing the judgment observed that an exception like Section 49 was not provided in Section 35 of the Stamp Act. An unstamped or deficiently stamped instrument could not be acted upon at all. Even a collateral transaction referred to therein could not be looked into.
The Hon'ble Judge, however, opined that although Section 35 of the Act prevents a Court from considering an unstamped document, it can impound the document under Section 33 of the Act and follow the procedure under Sections 35 and 38 thereof. It after observance of this procedure the document is duly stamped and the penalty paid, the defect is cured. The Court may receive the document in evidence.
What follows from this judgment is that a document insufficiently stamped is not incurably defective. The defect may be cured at a later stage by impounding it and payment of proper stamp and penalty. But till it is so rectified the document cannot be looked into.
Therefore, on the ratio of these cases the alleged agreement for sale referred to by the plaintiff and annexed to this application cannot be looked into by this Court for any purpose including any underlying transaction.
In my opinion the email of Aditya Kumar dated 9th October, 2013 cannot be overlooked. It indicates a proposed transaction of sale of the subject property by the defendant in favour of the plaintiff. True the document of 21st November, 2013 cannot be termed as an agreement for sale immediately.
Mr. Chatterjee, learned senior advocate is right when he submits referring to the emails exchanged after the alleged date of the agreement, 21st November, 2013, that drafts were being exchanged between the parties and that there was no finality of the transaction.
Even then we are not altogether unfamiliar with back dated deeds of lease or sale creating rights from an anterior date.
Hence if this agreement for sale dated 21st November, 2013, is duly stamped and penalty in respect thereof paid, a contention is possible that this document is valid and was given retrospective effect. The suit for specific performance of the agreement may or may not succeed.
If in this intervening period the property is sold over the head of the plaintiff, injustice will be caused. Therefore, the Court should use its discretion to protect the subject matter of the suit property which is affected by an unstamped document, the defect of which is curable, for a reasonable time to give an opportunity to a party to cure the defects following the procedure mentioned in Sms Tea Estates Private Limited Vs. Chandmari Tea Company Private Limited reported in (2011) 14 SCC 66 .
The plaintiff may be compelled to produce the original agreement dated 21st November, 2013 at the time of hearing of this application. In that event, the Court might consider passing orders under Section 33 of the said Act.
At this stage, I pass an interim order restraining the defendant from selling otherwise transferring, encumbering, dealing with or parting with possession of the premises described in prayer (a) of the Notice of Motion and in annexure A to the plaint till 31st October, 2014 or until further orders whichever is earlier to give a chance to the plaintiff to cure the defect in stamping in accordance with the ratio in Sms Tea Estates Private Limited Vs. Chandmari Tea Company Private Limited reported in (2011) 14 SCC 66.
Affidavit in opposition in GA No. 846 of 2014 may be filed by 4th August, 2014. List this application on 18th August, 2014. Affidavit in reply may be filed in the meantime.
The other application GA No. 847 of 2014 is disposed of by giving the plaintiff liberty to engage a handwriting expert and cause the document mentioned in prayer (a) of that application examined and obtained the expert's report which may be proved at the time of trial of the suit.
Urgent certified photocopy of this judgment/order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.
(I.P. Mukerji, J.)