REVIEW PET.225/2019 and IA No.7573/2019
1. The applicants/defendants No.1, 2 & 3 move IA No.7573/2019 under Section 5 of the Limitation Act seeking condonation of 401 days in moving the Review Petition No.225/2019 against the order dated 03.04.2018 whereby conditional leave to defend on deposit of Rs.3.00 Crores was granted to the defendants to contest the suit filed by respondent/plaintiff under Order XXXVII CPC.
2. Reverting to Review Petition No.225/2019, the learned counsel for defendants/applicants urge the order dated 03.04.2018 suffers from infirmity as the said order is based on the Memorandum of Understanding dated 14.06.2010 (hereinafter referred as ‘MoU’) which runs into 11 pages and whereas the plaintiffs have filed only four pages thereof and deliberately did not file Annexures I and II attached to MoU, which fact could not be pleaded earlier.
3. The case of petitioner is as per the MoU, the plaintiff paid a sum of Rs.3.00 crore to defendant no.1 viz Rs.1.00 crore on 14.06.2010 and Rs.2.00 crore on 01.07.2010 by cheque. However, the payment of cheque bearing No.495845 dated 01.07.2010 for Rs.2.00 crore was stopped as the cheque was allegedly lost by the defendants and was replaced by another cheque No.497454 dated 24.06.2010 for Rs.2.00 crore. Further on 24.06.2010, an additional sum was given to the defendant No.1 company as loan vide cheque No.497455 dated 24.06.2010 to the tune of Rs.1.00 Crore which was encashed on 25.06.2010. However, loan of Rs.1.00 Crore which was taken on 24.06.2010 was returned to the plaintiff by defendants vide two cheques bearing Nos.21459 and 21469, dated 01.09.2010 and 20.09.2010 for Rs.65.00 Lac and Rs.35.00 Lac respectively. However, the amount of Rs.3.00 Crore is still outstanding against the defendants. This amount was only to be used by the defendants for the development of a project in Sector – 79, Gurugram, Haryana and the defendants would offer 500-700 dwelling units in said project to the plaintiff.
4. Admittedly, as per MoU, the proposed dates for obtaining the LOI/License from HUDA and other amenities like building, electricity, water, home loan approval, start of construction work etc were given, but the application for grant of license was rejected by the concerned authority – which fact was concealed by the defendants – the project could not be proceeded with and the defendants developed the intention to usurp the hard earned money of the plaintiffs; hence this suit was filed under Order XXXVII CPC.
5. In October, 2010 the plaintiffs demanded the money and the defendants on 05.10.2010 issued six Post Dated Cheques of Rs.50.00 Lacs each which were also dishonoured for reasons of ‘payment stopped’. Admittedly, in the complaint cases under Section 138 Negotiable Instruments Act, 1881 a settlement agreement was executed wherein it was revealed that an amount of Rs.3.00 Lacs was deposited by the defendants in Fixed Deposit Receipts but they did not pay a single penny to the farmers for acquisition of their lands.
6. However, the learned counsel for the defendants urge this review is necessitated as the MoU with annexures was never placed on record in original, hence suit under Order XXXVII CPC would never lie; and secondly, the complaint cases under Section 138 NI Act qua dishonour of cheques were later dismissed by the learned Metropolitan Magistrate solely on the ground Annexures I & II of MoU were never produced before the Court of learned Magistrate and the plaintiffs have failed to prove the MoU, hence it is argued the impugned order dated 03.04.2018 be reviewed.
7. There is a serious question qua the maintainability of this review petition. Admittedly, the order dated 03.04.2018 was challenged before the Division Bench in FAO(OS) No.94/2018, but the said appeal was dismissed being not maintainable under Order 43 Rule 1 CPC. However, the defendants were granted permission to withdraw the appeal with liberty to take recourse to remedies for impugning the order dated 03.04.2018.
8. Immediately thereafter, the defendants filed the LPA No.634/2018 challenging the order dated 03.04.2018 which was also dismissed, rather on merits by the Division Bench of this Court, per order dated 20.11.2018 noting interalia:-
“In our considered view, the discretion exercised by the Single Bench in the matter is based on the material which shows that the defence of defendants No.1 to 3 is illusory in nature in view of the contrary stand taken by them with regard to the same issue in a proceeding under Section 138-A, exercised discretion in granting the leave subject to the condition as stipulated hereinabove. The discretion exercised by the Single Bench being in accordance with the requirement of law, we are not inclined to interfere into the matter.”
9. In the meanwhile, final decree was passed on 10.12.2018 in this suit. The defendants challenged the decree dated 10.12.2018 by filing LPA No.272/2019 but it was also dismissed on 29.08.2019. The Division Bench rather noted:-
"4. The order granting conditional leave to defend in the civil suit, dated 3rd April, 2018, was challenged by the appellants in LPA 634/2018. The said appeal was not entertained by this Court vide order dated 20th November, 2018 (Annexure A-1 to the memo of this appeal). Thus, the order passed in CS(OS) 82/2014 dated 3rd April, 2018 granting conditional leave to defend under Order XXXVII Rule 3 (5) CPC has attained finality.
5. It further appears from the facts of the case that the amount to be deposited by the appellant company has not been deposited at all. As the conditional leave to defend, allowed by order dated 3rd April, 2018, was not followed by the appellants, the suit was decreed vide judgment and decree dated 10th December, 2018. Being aggrieved and dissatisfied with the said judgment and decree, this appeal has been preferred by the original defendants.
6. Having heard the appellant No.2, in person and the counsel for the respondent and looking into the facts of the case, it appears that no error has been committed by the learned Single Judge in deciding CS(OS) 82/2014 vide judgment and decree dated 10th December, 2018 because the appellant company has not deposited the amount of Rs.3.00 crore, for which conditional leave was granted in CS(OS) 82/2014 under Order XXXVII Rule 3 (5) CPC, especially when LPA 634/2018 was also dismissed by this Court vide order dated 20th November, 2018.
7. Moreover, it is submitted by Col. Rajnish Soni that a review application has been preferred, bearing Review Application No.225/2015, for the review of the judgment and decree passed in CS(OS) 82/2014, dated 10th December, 2018, and the said review application is still pending. Hence, we find no reason to entertain this appeal and the same is hereby dismissed."
10. The order dated 03.04.2018 thus had attained finality and is so noted in para No.4 of the order dated 29.08.2019 in LPA No.272/2019. Even otherwise, final decree has since been passed on 10.12.2018, which order has also attained finality in the said LPA hence, order dated 03.04.2018 merged in order dated 29.08.2019 of LPA No.272/2019.
11. The impugned order dated 03.04.2018 has since been examined and upheld by the Division Bench on two occasions and stood merged in such orders, thus seeking liberty to challenge interim / conditional order has no meaning.
12. Even otherwise, much has been urged about Annexure I & II to the MoU dated 14.06.2010, being very relevant to the controversy; if were not placed on record by the plaintiff, then what stopped the defendants to place it along with its application for leave to defend. It cannot be believed, the defendant No.1 being a company, having received Rs.3.00 Crores and expected to act under the MoU for seeking various licenses and permissions did not retain its copy. The logical conclusion thus would be the defendants never wanted to file it on record to seek benefit by creating a suspense over its non production, as otherwise they must have filed the same. Nevertheless, if one peruses the MoU, one may easily find a reference to such annexures. The MoU notes:-
“3. That both companies have now decided to come together and joint development as equal partners, of a Group Housing project in Sector 79, Gurgaon, as per layout of the land acquired by Konark as per layout placed at Annaxure I. Both partners have entered into an understanding as per the terms and conditions mentioned below for the Group Housing Project in Sector 79
4. & 5. Xxxx
6. The commitments of Kenarks Intra Developere Pvt. Ltd
(a) Konark has already done agreements for 13 Acres of land and applied for LOI placed at Annexure II.
(b) Konark will acquire further land from farmers.
(c) Konark will get the LOI processed form HUDA.
(d) Konark will get the licence & al approvals from HUDA.
(e)Konark will get bank loan approved for home loans.
(f) Konark will be solely responsible for all legalities arising from Konark will acquire further land from farmers. this project towards title of land, LOI licence Home loan etc.
thus, a bare perusal above would show Annexures I and II even if, were filed, would have hardly helped the defendants since it contained LOIs and/or lay out plans.
13. I may add here a settlement was also arrived at between the parties on 29.01.2015 in the complaint cases which read as under:-
“The accused No. 2 Rajnish Soni has agreed to pay first himself and on behalf of accused No. 1 KONARK INFRA DEVELOPERS PVT LTD Rs.Three crores to the complainant INDIA AFFORDABLE HOUSING SOLUTIONS, which also includes the claims if any of GoWO towards accused No. 1 & 2 in the following manner:
1. Accused No. 2 shall pay first installment of Rs. Fifty Lakhs to the complainant on 31.07.2015;
2. Accused No. 2 shall pay second installment of Rs. Fifty Lakhs to the complainant on 30.11.2015;
3. Accused No. 2 shall pay third installment of Rs. One Crore to the complainant on 01.01.2016;
4. Accused No. 2 shall pay final installment of Rs. One Crore to the complainant on 31.03.2016;
Since the amount to be paid is huge, a period of 10 days grace shall be given to accused No. 2 to make the payment in installments as agreed. However, it is further clarified that default in making the payment on any of the installment would attract a penalty of Rs. Five lakhs per installment.
If two installments are not paid by the accused No.2, the aforesaid settlement shall stands cancelled, the amount paid if any, shall forfeited and the matter shall be tried on early basis.
On the full and final payment, the entire liabilities including previous losses if any occurred by any party to the settlement qua the other party shall be settled completely without any further claims.”
14. Further order dated 29.03.2015 of this Court notes:-
“Learned counsel for plaintiffs and defendants No.1 to 3 state that the disputes between the parties have been settled. They both have handed over a copy of the order dated 29th January, 2015 passed by the Metropolitan Magistrate (South), Negotiable Instruments Act. The same is taken on record.
Defendant No.4, who appears in person, states that no settlement has been executed by him.
Both the learned counsel pray for an adjournment to await payments of
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installments in accordance with the order dated 29th January, 2015. At request, adjourned to 26th August, 2015.” 15. Thus, it was not only upon the MoU, but the suit was also based upon the dishonoured cheques. Moreso, the admissions of defendants made in CC Nos.671/1/2011 and 672/1/2011 and before this Court on 29.03.2015, all goes to belie the claim for review. I find no error apparent on face of record. Rather the conduct of the defendants needs to be condemned. 16. The dismissal of cases under Section 138 NI Act by the learned Magistrate on the basis of non-filing of Annexures I & II without examining the MoU and import of dishonoured cheques, would even otherwise be not binding upon this Court. Oral submissions of any alleged loss without an iota of written record allegedly placed by defendants, cannot be entertained, the impugned order having being merged in orders of LPAs’. 17. Even otherwise, there is much delay in filing of review application. 18. The review application and delay condonation application are bereft of any merit and are rejected with costs of Rs.10,000/- to be deposited with Lawyers Welfare Fund, Delhi High Court, New Delhi. The cost receipt be furnished on record within a period of four weeks from today.<