Financial Creditor cannot disprove its mala fide intention

 IN THE NATIONAL COMPANY LAW APPELLATE TRIBUNAL

COMPANY APPELLATE JURISDICTION

Company Appeal (AT) (Insolvency) No. 5 of 2017

(arising out of Order dated 17th February, 2017 passed by

National Company Law Tribunal, Mumbai Bench, in C.P. No.

12/I&B/NCLT/MAH/2017)

IN THE MATTER OF:

M/s. Starlog Enterprises Limited ... Appellant

Vs

ICICI Bank Limited ... Respondent

Present:

For Appellant Mr R.S. Majumdar, Senior Advocate

alongwith Mr Darshan Mehta, Mr

Raghav Dwivedi, Ms Nirali Sanghavi

and Mr Vaibhav Modi, Advocates

For Respondents:- Mr Ramji Srinivasan, Senior

Advocate with Mr Aslam Ahmed, Mr

Sharad Kharra, Ms Srivardhani and

Mr Babit Singh Jamwal, Advocates.

JUDGMENT

SUDHANSU JYOTI MUKHOPADHAYA, J.

This application under Section 61 of Insolvency &

Bankruptcy Code, 2016 (hereinafter referred to as I&B Code) has

been preferred by Appellant! Corporate Debtor against ex-parte

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order dated 17th February 2017 passed by 'adjudicating authority',

Mumbai Bench, under Section 7 of the I&B Code whereby the

'adjudicating authority' was pleased to admit the petition preferred

by Respondent/ Financial Creditor.

2. The Appellant has challenged the impugned order on one of

the ground that in absence of notice given to the Appellant before

admitting the case under Section 7 of the I&B Code, the impugned

order is violative of rules of natural justice.

3. The other ground taken by the Appellant is that the

application preferred by Respondent! Financial Creditor under

Section 7 is incomplete, misleading and being not bonafide was fit

to be rejected.

4. Ld. Counsel for the Appellant submitted that the Appellant

could have brought the aforesaid facts to the notice of the

'adjudicating authority' had it been given notice prior to admission.

Detailed argument has been made by Ld. Senior Counsel for the

Appellant on the question of issuance of notice prior to admission,

in adherence to principle of rules of natural justice,

5. The aforesaid issue now stands decided by decision of the

Appellate Tribunal in "M/s. Innoventive Industries Limited vs ICICI

Bank & Anr. in CA (AT) (Insolvency) No. 1 & 2 of 2017" wherein the

Appellate Tribunal observed and held :-

"43. There is no specific provision under the I&B Code, 2016 to

provide hearing to Corporate debtor in a petition under Section 7 or 9 of the

I&B Code, 2016."

"53. In view of the discussion above, we are of the view and hold that

the Adjudicating Authority is bound to issue a limited notice to the corporate

debtor before admitting a case for ascertainment of existence of default

based on material submitted by the corporate debtor and to find out whether

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the application is complete and or there is any other defect required to be

removed. Adherence to Principles of natural justice would not mean that in

every situation the adjudicating authority is required to afford reasonable

opportunity of hearing to the Corporate debtor before passing its order."

In this connection we may state that the vires of Section 7 of I&B

Code was considered by Hon'ble Calcutta High Court in " Sree

Metaliks Limited & Ann" in writ petition 7144 (W) of 2017, wherein

Hon'ble High Court by its judgment dated 7th April, 2017 held as

follows:-

However, it is to apply the principles of natural justice

in the proceedings before it. It can regulate it own

procedure, however, subject to the other provisions of the

Act of 2013 or the Insolvency and Bankruptcy Code of 2016

and any Rules made thereunder. The Code of 2016 read

with the Rules 2016 is silent on the procedure to be adopted

at the hearing of an application under section 7 presented

before the NCLT, that is to say, it is silent whether a party

respondent has a right of hearing before the adjudicating

authority or not.

Section 424 of the Companies Act, 2013 requires the NCLT

and NCLAT to adhere to the principles of the natural justice

above anything else. It also allows the NCLT and NCLAT

the power to regulate their own procedure. Fetters of the

Code of Civil Procedure, 1908 does not bind it. However, it

is required to apply its principles. Principles of natural

justice require an authority to hear the other party. In an

application under Section 7 of the Code of 2016, the

financial creditor is the applicant while the corporate debtor

is the respondent. A proceeding for declaration of

insolvency of a company has drastic consequences for a

company. Such proceeding may end up in its liquidation. A

person cannot be condemned unheard. Where a statute is

silent on the right of hearing and it does not in express

terms, oust the principles of natural justice, the same can

and should be read into in. When the NCLT receives an

application under Section 7 of the Code of 2016, therefore,

it must afford a reasonable opportunity of hearing to the

corporate debtor as Section 424 of the Companies Act, 2013

mandates it to ascertain the existence of default as claimed

by the financial creditor in the application. The NCLT is,

therefore, obliged to afford a reasonable opportunity to the

financial debtor to contest such claim of default by filing a

written objection or any other written document as the

NCLT may direct and provide a reasonable opportunity of

hearing to the corporate debtor prior to admitting the

petition filed under Section 7 of the Code of 2016. Section

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7(4) of the Code of 2016 requires the NCLT to ascertain the

default of the corporate debtor. Such ascertainment of

default must necessarily involve the consideration of the

documentary claim of the financial creditor. This statutory

requirement of ascertainment of default brings within its

wake the extension of a reasonable opportunity to the

corporate debtor to substantiate by document or otherwise,

that there does not exist a default as claimed against it. The

proceedings before the NCLT are adversarial in nature.

Both the sides are, therefore, entitled to a reasonable

opportunity of hearing.

The requirement of NCLT and NCLAT to adhere to the

principles of natural justice and the fact that, the principles

of natural justice are not ousted by the Code of 2016 can

be found from Section 7(4) of the Code of 2016 and Rule 4

of the Insolvency and Bankruptcy (Application to

Adjudicating Authority) Rules, 2016. Rule 4 deals with an

application made by a financial creditor under Section 7 of

the Code of 2016. Sub- nile (3) of Rule 4 requires such

financial creditor to despatch a copy of the application filed

with the adjudicating authority, by registered post or speed

post to the registered office of the corporate debtor. Rule 10

of the Rules of 2016 states that, till such time the Rules of

procedure for conduct of proceedings under the Code of

2016 are notified, an application made under Sub-section

(1) of Section 7 of the Code of 2017 is required to be filed

before the adjudicating authority in accordance with Rules

20, 21, 22, 23, 24 and 26 or Part-HI of the National

Company Law Tribunal Rules, 2016.

Adherence to the principles of natural justice by NCLT or

NCLAT would not mean that in every situation, NCLT or

NCLAT is required to afford a reasonable opportunity of

hearing to the respondent before passing its order.

In a given case, a situation may arise which may require

NCLT to pass an ex-parte ad interim order against a

respondent. Therefore, in such situation NCLT, it may

proceed to pass an ex-parte ad interim order, however, after

recording the reasons for grant of such an order and why it

has chosen not to adhere to the principles of natural justice

at that stage. It must, thereafter proceed to afford the party

respondent an opportunity of hearing before confirming

such ex-parte ad interim order.

In the facts of the present case, the learned senior advocate

for the petitioner submits that, orders have been passed by

the NCLT without adherence to the principles of natural

justice. The respondent was not heard by the NCLT before

passing the order.

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It would be open to the parties to agitate their respective

grievances with regard to any order of NCLT or NCLAT as

the case may be in accordance with law. It is also open to

the parties to point out that the NCLT and the NCLAT are

bound to follow the principles of natural justice while

disposing of proceedings before them.

In such circumstances, the challenge to the vires to Section

7 of the Code of 201 6 fails."

6. Therefore, it is clear that before admitting an application

under Section 9 of the MB Code it is mandatory duty of the

'adjudicating authority' to issue notice.

7. In the present case admittedly no notice was issues by the

'adjudicating authority' to the corporate debtor, before admitting the

application filed under Section 9 of the I&B Code. For the said

reason the judgement order cannot be upheld having passed in

violation of principle of natural justice.

8. Next contention of Ld. Senior Counsel for the Appellant was

that the Financial Creditor misrepresented material facts before the

'adjudicating authority' in order to obtain order of admission of the

application. He highlighted the conduct of the Financial Creditor by

highlighting the following facts.

9. On 6th February, 2017, the Financial Creditor addressed a

notice to the Appellant calling upon to pay a sum of

Rs. 10,02,28,27 1.60 (Rupees ten crore two lac twenty eight thousand

two hundred seventy one and paise sixty only) which was overdue

as on 6th February, 2017. The notice dated 6th February, 2017 was

received by the Appellant only on 8th February 2017.

10. Before the Appellant could have replied or taken any

necessary action in respect of the said notice on 8th February 2017

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the Appellant received a letter from the Counsel for the Financial

Creditor serving a copy of the present application, relevant portion

of which reads as follows:-

'We send herewith a copy of the captioned Company

Application on behalf of our client under Section 7 of the I&B

Code, as and by way of service upon you,'

without directly or indirectly specifying whether the said application

has been filed or clarifying whether the said application would be

mentioned or heard on any particular date/time, as is the prevalent

practice.

11. Ld. Senior Counsel for the Appellant also submitted that the

application filed by the Financial Creditor before the 'adjudicating

authority' they inflated the default amount to be Rs.29,81,02,395.62

(Rupees twenty nine crore eighty one lac two thousand three

hundred ninety five and paise sixty two only). Even Annexure 2 to

the said application reflected 'Principal Unmatured' arrived in the

computing the 'Default Amount'.

12. Ld. Senior Counsel for the Appellant further submits that as

per the repayment schedule under the loan agreements, the entire

aforementioned amount had not become due and payable as on 6th

February, 2017. Neither the Financial Creditor, by his own

admission, recalled the entire loan amount.

13. In view of the same, it was submitted that the computation of

the default amount of Rs.29,81,02,395.62 (Rupees twenty nine

crore eighty one lac two thousand three hundred ninety five and

paise sixty two only) is grossly incorrect and contrary to the

provisions of law.

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14. It was further submitted that for the said misstatement, the

Financial Creditor ought to be adequately penalised under the

provisions of the I&B Code,20 16 particularly under Section 75.

15. The Ld. Counsel also highlighted the conduct of the

Respondent - ICICI Bank - and pleaded as follows:

a. The Respondent herein is a part of the Joint Lenders'

Forum (hereinafter referred to as JLF) constituted by

the Appellant pursuant to the guidelines of the Reserve

Bank of India (hereinafter referred to as RBI). The JLF

for the Appellant was formed at the instance of the

Respondent vide the meeting held on 14th June, 2014.

Thereafter, from 14th June 2014till 2nd February, 2017,

the Respondent along with the other lenders of the

Appellant and the Appellant itself, have been

participating in the periodically held meetings of the

JLF, in all of which meetings the JLF had unanimously

agreed to adopt 'rectification' as the corrective action

plan (CAP) for the Appellant. It is pertinent to note that

the Respondent itself had requested the lead lender of

the Appellant (L&T Infrastructure Finance Company) to

convene the JLF meetings as the lead lender from

February 2016 onwards.

b. As per the minutes of the meeting held on 2nd February

2017 circulated by the Lead Lender, the effect of the JLF

meeting is that the JLF has decided to continue with

rectification as CAP for the Appellant and members of

JLF have been requested 'not to proceed with any

individual asset level action'. The Respondent however,

chose to dispute these minutes vide their email dated

16th February 20 l7as circulated by Respondent No. 33.

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As per the purported minutes of the meeting, the JLF

lenders had resolved that rectification as the CAP has

failed and the JLF members have decided to explore

their options for regularising the account.

c. By the time the correct minutes of the meeting dated

2.2.2017 were circulated by the Lead lender on

16.2.2017, the Respondent had already filed its

application on 8th February 2017 itself with the

'adjudicating authority' against the Appellant without

the knowledge/ consent of the other members of the

JLF. It is pertinent to note that the Respondent while

disputing the said minutes does not even mention

about the said application filed by the Respondent

against the Appellant before the 'adjudicating authority'

and their reliance on the purported minutes of meeting

in the said application.

d. Arguendo the purported minutes of the meeting are

correct, that still does not justify the filing of the said

application by the Respondent before the 'adjudicating

authority' de hors the structure of JLF. The JLF

members as per Respondent's own version had agreed

to 'explore their action for resolving....' And not to resort

to filing of application under Section 7 of the I&B Code.

Possibly the notice of demand served by the Respondent

to the Appellant on 6th February 2017 was in

furtherance of 'exploration of its action for resolving. ...'

However, the filing of the application under Section 7 of

the I&B Code independently by the Respondent, totally

disregarding the other members of the Forum was a

mischief played by the Respondent upon the Appellant

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for reasons best known to them, which mischief is

apparent from the aforesaid conduct of the Respondent.

e. The Respondent has acted contrary to the guidelines of

the RBI in relating to JLF, particularly the guideline

issued on 24.9.20 15 which at para 5.2 of the guidelines

stipulates that in case of disagreement between the

members of the JLF on deciding the CAP for borrower,

the dissenting lender shall have an option to exit their

exposure by completely selling their exposure to a new

or existing lender. Therefore, clearly the object of the

RBI is clearly that the lenders act through the JLF

structure and do not go beyond the JLF structure or in

other words lenders do not act independent of JLF

especially when an exit option exists for an individual

lender. In this regard, it is pertinent to refer to the

recent judgment of the Hon'ble Bombay High Court in

the caser of IDFC Bank Limited v M/s. Ruchi Soya

Industries Limited, inter alia, laying down two

propositions - firstly, circulars issued by the RBI

pertaining to JLF are statutory in nature and binding

upon the banks and secondly, that member of JLF

cannot independently resort to/adopt any proceedings

during the on-going process of rectification through the

JLF.

16. Similar argument was raised in M/s. Innoventive Industries

Ltd v ICICI Bank & Anr. Having noticed such argument, the

Appellate Tribunal in "M/s. Innoventive Industries Ltd v ICICI Bank

& Ann" held that:-

"82. As discussed in the previous paragraphs, for initiation of

corporate resolution process by financial creditor under sub-section

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(4) of Section 7 of the Code, 2016, the 'adjudicating authority' on

receipt of application under sub-section (2) is required to ascertain

existence of default from the records of Information Utility or on the

basis of other evidence furnished by the financial creditor under subsection

(3). Under Section 5 of Section 7, the 'adjudicating authority'

is required to satisfy -

(a) Whether a default has occurred;

(b) Whether an application is complete; and

(c) Whether any disciplinary proceeding is against the proposed

Insolvency Resolution Professional.

83. Once it is satisfied it is required to admit the case but in

case the application is incomplete application, the financial creditor

is to be granted seven days' time to complete the application.

However, in a case where there is no default or defects cannot be

rectified, or the record enclosed is misleading, the application has to

be rejected.

84. Beyond the aforesaid practice, the 'adjudicating authority'

is not required to look into any other factor, including the question

whether permission or consent has been obtained from one or other

authority, including the JLF. Therefore, the contention of the petition

that the Respondent has not obtained permission or consent of JLF

to the present proceeding which will be adversely affect loan of other

members cannot be accepted and fit to be rejected."

17. The impact of the Insolvency Resolution Professional on the

business and management of the Appellant, alleged to be as follows:

The Interim Insolvency Resolution Professional (hereinafter

referred to as IRP) has been appointed by the 'adjudicating authority'

by the impugned order. On 1st March 2017 the IRP issued a public

notice in Economic Times therein calling upon the creditors of the

company to submit their claims. From 2nd March 2017 onwards the

IRP has been attending office from the Appellant's premises and has

taken over the management of affairs of the Appellant.

18. Ld. Counsel highlighted the events that occurred pursuant to

IRP taking over the management of the affairs of the Appellant.

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18.1 M/s. G.E Industrial India Pvt Ltd (hereinafter referred to as

GE) has been a crucial and important client of the Appellant.

GE had placed several orders in October 2016 and January

2017 for commission of the Appellant's cranes at its project

sites at Lalpur, Kadapa, Jamnagar etc. The nature of

Appellant's contracts with its clients are such that the

Appellant is required to regularly and in a very prompt, timely

manner, meet the requirements raised by its clients such as

release of funds for the day to day functioning of the cranes

as well as management of the staff handling the cranes, hiring

and dispatching the necessary contractors, engineers to the

project sites as may be required etc.

18.2 M/s. G.E addressed several e-mails dated 6th march and 7th

March 2017 and so on to the Appellant in respect of the

Appellant's cranes commissioned at G.E's Kadappa site. GE,

inter-alia, required the Appellant to urgently release funds for

the crane's diesel, send a safety engineer at the project site

and take necessary action in respect of replacement of cotter

pin in one of the ancillary equipments.

18.3 The appellant's Project Manager forwarded each of these emails

to the IRP along with an explanation regarding the

nature of the service and the time lines for the same, wherever

required.

18.4 Despite the lengthy trail of correspondence and constant

service requests, IRP failed to do much as satisfactorily reply

to GE's concerns, much less release the necessary funds and

take actions. As a result of IRP's failure to release necessary

funds and act on the service requests in a timely manner, the

Appellant was unable to perform its contractual obligations

qua G.E.

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18.5 Ultimately vide an email dated 18th march 2017, G.E has

terminated the contract with the Appellant resulting in a

financial loss of at least Rs.2,70,00,000/- as well as loss of

goodwill that the Appellant has painstakingly built in this

business over the last 30 years.

18.6 It came to the knowledge of one of Appellant's Director Mr

Saket Agarwal that the IRP had contrary to the powers granted

to him under the I&B Code, instruct some of the employees of

the Respondent to disclose the bank account details of the

following companies which are subsidiaries of the Appellant -

(i) Starport Logistics Ltd; (ii) ABG Turnkey Pvt Ltd; (iii) Kandla

Container Terminal Pvt Ltd and (iv) ABG Projects & Services

Ltd., UK.

18.7 It appears that the IRP had directed employees of the

Appellant to change the mandate of authorised signatories in

the bank accounts of the aforesaid subsidiaries and had also

addressed correspondence to the banks requesting a change

in the authorised signatories.

18.8 The I&B Code does not in any manner empower an IRP to

interfere with the affairs of the subsidiaries of the corporate

debtor. In fact, the Explanation to Section 18 of the I&B Code,

2016 explicitly provides that the assets of the corporate debtor

shall not include the assets of its Indian or foreign

subsidiaries. In that view of the matter, the aforesaid act of

the IRP is ex-facie illegal and unsustainable in law.

18.9 As a result of the absolute mismanagement and dis interest

in the management of the affairs of the Appellant, the

Appellant has suffered loss of several valuable human

resources namely, Mr R.0 Swamy, Project Manager who has

been with the employment of the Appellant since 26 years,

submitted his resignation therein citing "the working

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atmosphere" at the Appellant's office as "severe stress" as the

reasons for his resignation. Mr Meet Shay, Deputy Manager

e-mailed his resignation on 28th March, 2017. Mr Arup

Kumar Ghosh, who was directed by the IRP to take charge of

the head office activities of the Appellant e-mailed his

resignation on 29th March 2017 citing inability to "bear the

stress to do so". Mr Varun Kaka, Legal Associate of the

Appellant also resigned on 29th March, 2017.

19. Sub-section (12) of Section 3 of I&B Code defined "default" to

mean "a liability or obligation in respect of claim which is due from

an person..." The principal (unmatured) amount, never having

become due and payable to the Financial Creditor could not have

been claimed as the default amount.

20. Impugned order herein suffers from the vice of nonapplication

of mind by the 'adjudicating authority' on the following

coouunnttss::--

2200..11 The ascertainment of existence of default by the 'adjudicating

authority' which under the provisions of Sub-Section (4) of

Section 7 of the I&B Code has to be based on the

application/ other evidence submitted by the financial

creditor, suffers from non-application of mind given the

apparent and conspicuous mismatch between the amount

demanded by the Respondent from the Appellant in its

demand notice dated 6th February 2017 and the amount

stated to be in default in the said application.

20.2 Secondly, the 'adjudicating authority' in paragraph 8 of the

impugned order has recorded that proof of service showing

service of notice upon the corporate debtor before filing the

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petition has been filed by the Financial Creditor, without

considering the true nature and purport of the so called notice

dated 8th February 2017 which did not even mention the

essential details which were to be mentioned, such as:-

a. Whether the application has been filed;

b. if the application is filed, what is the filing

number; and

c. date of listing, if notified.

20.3 The notice has been given without considering the provisions

of sub-rule (3) of Rule 4 of Insolvency & Bankruptcy

(Application to Adjudicating Authority) Rules, 2016 which

mandates that an application shall "dispatch forthwith", a

copy of the application "filed with the Adjudicating

Authority". Thereby meaning a post-filing notice and not

'before filing", the obvious purpose for the same being to put

the corporate debtor to adequate and informed notice. The

'adjudicating authority' ought to have realised these

deviations from the prescribed procedure and either rejected

the application or directed the Respondent to follow the

provisions of sub-Rule (3) of Rule 4 of Insolvency &

Bankruptcy (Application to Adjudicating Authority) Rules,

2016 and Rule 21 of the National Company Law Tribunal

Rules.

20.4 Lastly, the 'adjudicating authority' has reached a conclusion

at paragraph 9 of the impugned order that it is satisfied that

the Appellant has committed a default of Rs.27.77 crores,

which finding is not only perverse, but also is contrary to the

very application of the Financial Creditor itself in complete

disregard to the apparent and conspicuous mismatch

between the amount demanded by the Financial Creditor from

the Appellant-Corporate Debtor in its demand notice dated 6th

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February 2017 and the amount stated to be in default in the

said application.

21. Showing an incorrect claim, moving the application in a hasty

manner and obtaining an ex-parte order from the 'adjudicating

authority' which admitted such an incorrect claim, the Financial

Creditor cannot disprove its mala fide intention by stating that the

claim submitted is correct amount. The I&B Code does not provide

for any such mechanism where post-admission, the applicant

financial creditor can modify their claim amount.

22. In some of the cases, an insolvency resolution process can and

may have adverse consequences on the welfare of the company.

This makes it imperative for the 'adjudicating authority' to adopt a

cautious approach in admitting insolvency applications and also

ensuring adherence to the principles of natural justice.

23. Admittedly the impugned order is ex-facie illegal and ought to

be set aside by the Appellate Tribunal. For the reasons aforesaid, we

set aside the ex-parte impugned order dated 17th February 2017

passed by 'adjudicating authority', Mumbai Bench in C.P. No.

12/I&BP/NCLT/MAH/2017 and allow the appeal.

24. In effect the appointment of Interim Resolution Professional,

order declaring moratorium, freezing of account and all other order

passed by 'adjudicating authority' pursuant to impugned order and

action taken by the Interim Resolution Professional, including the

advertisement published in the newspaper calling for applications

are declared illegal. The 'adjudicating authority' is directed to close

the proceeding. The appellant company is released from the rigour

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of law and allow the appellant company to function independently

through its Board of Directors from immediate effect.

25. In the facts and circumstances, we impose a cost of Rs.

50,000/- (Rupees fifty thousand only) on Respondent - Financial

Creditor, ICICI Bank - to be paid in favour of Registrar, National

Company Law Appellate Tribunal, New Delhi by demand draft within

one month towards development of its Library. The appeal is

allowed with aforesaid observations and directions.

(Mr. Balvinder Singh) (Justice S.J.Mukhopadhaya)

Member (Technical) Chairperson

NEW DELHI

24th May, 2017

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The Consumer Protection Act is a law of torts when a tort is a civil wrong

 

District Consumer Disputes Redressal Commission

South 24 Parganas

Baruipur, Kolkata-700 144

 

Complaint Case No. CC/231/2014 ( Date of Filing : 19 May 2014 )

1. Sri Debasis Das, S/O Subal Chandra Das. Of 369, Laskarpur Purba para, P.O. Laskarpur, P.S. Sonarpur, Kolkata- 700153 at present 355, Purbapara, Laskar pur, P.O. Laskarpur, P.S.Sonarpur, Kol-153. ...........Complainant(s) Versus 1. 1. Sri Sujit Saha, S/O Amar Ch. Saha. Prop of M/S. Associates. Office at E-185, Ramgarh,P.S. Jadavpur, South 24- Pgs. Kolkata- 700047 also of Piyara Bagan, Laskarpur, Kolkata- 153. 2. 2. Smt. Sailabala Sil, Wife of Late Radhasham Sil. Residing at 355, Laskarpur Purba para, P.O. Laskarpur, P.S. Sonarpur, Kolkata- 700153, Dist. South 24- Parganas. 3. 3. Sri Surajit Das, S/O Late Srinath Das. resides at premises being no. 57, Sailo Kumar Mukherjee Road, Howrah- 1, P.S.-Golabari, Dist. Howrah. ............Opp.Party(s)

 

BEFORE:
	SHRI ASHOKE KUMAR PAL PRESIDENT
	SHRI PARTHA KUMAR BASU MEMBER

 

PRESENT:

Dated : 12 Dec 2023

Final Order / Judgement

Sri Partha Kumar Basu, Member The instant consumer case has been instituted by the complainant u/s 12 of the Consumer Protection Act, 1986 against the Opposite Party no 1 and 2 and also OP 3 (since amended as per petition dated 14.01.2019) praying for reliefs like physical possession and registration of a covered car parking space/covered garage/commercial unit/shop along with compensation and cost etc. The brief facts of the case as averred by the complainant in his complaint, amended complaint and evidence are that the complainant entered into an Agreement for sale dated 30.12.2011 with the OP1 developer to sell a covered car parking no 3 /covered garage/commercial unit/shop at holding no. 355, Purbapara, Laskarpur, Ward No. 29 (now 31), of Rajpur, Sonarpur Municipality under P.S-Sonarpur, Kol-700153, Dist-24Pgs (South) admeasuring about 111 Sq.ft. and the O.P.1 received a consideration money of Rs. 1,24,586/- and Rs. 1,00,000/- on different dates through several cheques. Originally a development agreement dated 11.10.2010 was executed between land owner OP2 and developer OP1 under certain terms and conditions embodied therein and a registered Power of Attorney was also executed by O.P.No.2 in favour of O.P.No.1. An agreement for sale dated on 30.12.2011 was executed between the complainant with the OP1 developer and the OP2 landowner through the OP1 as her POA holder with a promise to handover the scheduled property within 18 months of the sale agreement. As per instruction of the OP1, the Complainant purchased N.J. stamp paper of Rs. 5,000/- on 03.10.2013 for registration of the deed of conveyance. But the O.P.1 did not register the deed of conveyance within 18 months of the agreement i.e. by 30.06.2013. The complainant sent a lawyer’s notice on 02.09.2013 asking to handover the possession and registration of the covered car parking/covered garage/commercial unit/shop in favour of the complainant. Due to the act of the O.Ps , the complainant has been suffering from mental injury and filed the instant complaint case before this commission praying for direction upon the O.Ps to deliver the physical possession of the schedule car parking/covered garage/commercial unit/shop in complete habitable condition as per agreement dated 30.12.2011 for permanent injunction restraining the O.Ps from transferring / alienating the said car parking space to any third party, for execution and registration of the deed of conveyance in favour of the complainant in respect of schedule mentioned property along with compensation of Rs. 10,00,000/- and a cost of Rs. 5,00,000/- as per amended complaint. In their W/V and evidence, OPs contested on the ground that the delay in handing over possession happened due to the complainant filing another complaint before local municipal authorities against conversion of the suit property from car parking space towards commercial usage which was within full knowledge of the complainant. But the complainant never made full payment by paying the differential of Rs. 1,86,280/- (being paid actually Rs 1,24,520/- instead of Rs 1,24,586/-) in compliance of the sale agreement . Further, it was contended by OP1 that during the process of conversion of the suit property being garage space to commercial space (shop) with an increase of space from 111 Sq.ft to 160-170 Sq.ft, the complainant defaulted to pay the extra amount for such conversion in compliance of the contract. In the BNA, the OP1 also contended that being the suit property a commercial one and in absence of mention of such services obtained from the OPs by the complainant exclusively for the purpose of earning livelihood by means of self employment by the complainant, this complaint does not qualify as a consumer as per provisions of the Consumer Protection Act. The arguments as advanced by Ld. Advocates of both the sides were heard in full on 29.11.2023 , records and documents perused and considered. On perusal of the case record along with the copies of exhibited documents, it appears that as per Sale agreement dated 30.12.2011 executed between complainant and the OP1 and the OP2 through constituted attorney i.e. OP1, the complainant agreed to purchase one covered car parking space / covered garage admeasuring 88.89 Sq.Ft by paying Rs.30,000/- as initial payment against a full consideration money @  Rs. 1400/- per Sq.ft. for total 88.99 Sq.ft. totalling to Rs. 1,24,586/- (Cl 5, page 8 of sale agreement dated 30.12.2011) with a covenant that if the said scheduled property could be converted to Commercial space / Shop after due compliance of acts rules and systems of the local authorities, then the full consideration money working out to be @ Rs. 2800/- per Sq.ft. for a super built up area of 88.99 Sq. Ft (X) 25% of 88.89 Sq.ft = 111 Sq. Ft. totalling to Rs. 3,10,800/- which the purchaser has to additionally pay (Cl. 21). It was also agreed that in case of failure by either the intending purchaser cum complainant to make full payment or the OP1 developer to handover possession within 18 months from the date of agreement .i.e 30.06.2013, a penal interest @ 18% will get accrued to either side till compliance.   The original complaint petition dated 19.05.2014 was amended vide amended petition dated 14.01.2019 by adding OP3 as party as per Order no.26 dated 13.07.2016 of this commission. The complainant alleged that the OPs entering into a backdated sale agreement dated as 23.11.2011 unauthorisedly for transfer of possession of the suit property, challenging which the OP3 filed another complaint case no CC/37/2016 before DCDRC – Kolkata III against the OP1 and OP2 and thereafter as per final order dated 25.02.2016 from the said district commission, the OP3 got the suit property registered on 20.06.2016 at ADSR, Garia (page 8, sl 23 of amended complaint). The Schedule ‘B’ in the registered deed dated 20.06.2016 between OP1 being POA holder of OP2 and OP1 himself and the OP3 matches exactly with the instant complaint case in hand. It is an admitted fact by the OP1 that the suit property has been transferred by OP1 to OP3 as per Order dated 25.05.2016 from DCDRF, Kolkata – III and so the OP1 developer filed MA/287/16 dated 04.11.2016 expressing willingness to refund back the money taken from complainant alongwith bank interest.  Further, as per exhibited money receipts, it appears that a total amount of Rs.1,24,586/- was paid by the complainant to the OP.  No cogent document about the payment of another Rs.1,00,000/- is made available by the complainant in support of his claim in complaint petition. From the exhibits it also appears that completion certificate has been issued by the competent authority on 05.05.2014. As per advocate commissioner’s report dated 12.05.2016 the total area of the commercial unit/shop/ garage was found to be 115.02 Sq.ft in presence of both sides, which may be deemed to be more or less nearer to the quantum of the scheduled property measuring 111 Sq.ft. as per agreement dated 30.12.2011. The OP1 also raised objection of maintainability stating that the complainant intended to purchase the shop which is for commercial purpose and hence the complaint does not fall within the purview of Section 12 (1) (c) of the Consumer Protection Act, 1986 and so the complaint is not maintainable and liable to be dismissed.  As far as argument of the opposite party that the complainants are not consumers as they have booked the suit property for commercial purpose is concerned, Supreme Court in Kavita Ahuja vs. Shipra Estates I (2016) CPJ 31, observed that the onus of establishing that the Complainant was dealing in commercial activities in his normal course of business to earn profits, shifts to the Opposite Party, which the Opposite Party has failed to discharge by filing any evidence. As per covenants of the sale agreement dated 30.12.2011 between complainant and OPs, the agreement was meant for purchasing a garage space at it’s first place, when the booking money was advanced by complainant primarily on that basis. Hence the argument that the complaint does not fall as per definition of a consumer of the Consumer Protection Act, 1986 does not hold good at all.   We have considered the arguments of counsel for both the parties. Booking of the suit property, deposit of the respective amount by the complainant is not disputed by the opposite parties. The Hon’ble Supreme Court in Fortune Infrastructure & Anr. v. Trevor D’Lima & Ors., (2018) 5 SCC 442, held that a person cannot be made to wait indefinitely for possession of the property allotted to him/her, and is entitled to seek refund of the amount paid by him, along with compensation. From the sale agreement dated 30.12.2011, it appears that the OP1 developer has  entered into an agreement as developer as well as POA holder on behalf of the landlady OP2 and all the payments were taken and money receipts were issued by the OP1 developer from the complainant. So the OP1 is bound to comply with the terms and conditions of the said agreement and liable for the deficiency in services. The Consumer Protection Act is a law of torts when a tort is a civil wrong, which causes damage and results in legal liability for negligence or tortuous intent. If the claimant is able to prove that the tort occurred and that the defendant was responsible, then defendant is liable to compensate the damage. During adjudication in the case in hand, it got unfolded that the suit property has already been alienated to third party by another court order. Hence there is no other remedy available to the petitioner before this commission except to seek compensation, cost or refund. However the complainant is always at liberty to approach any alternative forum for any other civil remedy. So the complaint case succeeds in part. Hence, it is ORDERED That the instant case be and the same is hereby allowed on contest against the OP1 developer with cost of Rs. 25,000/-(Rupees twenty five thousand only). The O.P1 developer is also liable and is directed to refund Rs. 1,24,586/- (Rupees One lac Twenty Four Thousand Five Hundred and Eighty Six) only along with a simple interest @ 9% per annum with respective dates of payments till the date of final realization thereof. The OP1 developer is liable and also directed to pay the litigation cost of Rs. 25,000/-(Rupees twenty five thousand) only. The entire decreetal amount is to be paid within 60 days from the date of passing of this Order, in default a simple interest @ 12 % will accrue till realisation. Interim order, absolute or extended be any before this bench, stands vacated. The complainant is at liberty to put the order into execution after the expiry of 60 days in case the orders are not complied with by the OP1 within 60 days from the date of passing this Order.   Ld. Member Smt. Shampa Ghosh joined today on 12.12.2023 and did not take part in the hearing of argument of this case and as such,      she did not sign the Judgement.  Let a copy of the order be sent / supplied free of cost to the parties concerned. The Final Order will be available in the following website www.confonet.nic.in.    Dictated and corrected by me.                                               Member

 

[ SHRI ASHOKE KUMAR PAL]

PRESIDENT

[ SHRI PARTHA KUMAR BASU]

MEMBER

Section 122 in The Indian Evidence Act, 1872

 

Section 122 in The Indian Evidence Act, 1872

122. Communications during marriage.—No person who is or has been married, shall be compelled to disclose any communication made to him during marriage by any person to whom he is or has been married; nor shall he be permitted to disclose any such communication, unless the person who made it, or his representative in interest, consents, except in suits between married persons, or proceedings in which one married person is prosecuted for any crime committed against the other.

No maintenance by non-working husband

No maintenance by non-working husband

In a judgment which can bring relief to a number of unemployed husbands from the liability to pay maintenance to their wives, the Delhi High Court recently has declared that the law relating to maintenance to be paid to wives under Section 125 of the Code of Criminal Procedure does not apply in a situation where the husband is unemployed and isn't himself earning. Deciding in Sanjay Bhardwaj v. State, the Justice Shiv Narayan Dhingra reversed the decision of the lower court fixing maintenance in such circumstances.

 

The High Court inter alia observed;

 

4. ... Under prevalent laws i.e. Hindu Adoption & Maintenance Act, Hindu Marriage Act, Section 125 Cr.P.C - a husband is supposed to maintain his un-earning spouse out of the income which he earns. No law provides that a husband has to maintain a wife, living separately from him, irrespective of the fact whether he earns or not. Court cannot tell the husband that he should beg, borrow or steal but give maintenance to the wife, more so when the husband and wife are almost equally qualified and almost equally capable of earning and both of them claimed to be gainfully employed before marriage. If the husband was BSc. and Masters in Marketing Management from Pondicherry University, the wife was MA (English) & MBA. If the husband was working as a Manager abroad, the wife with MBA degree was also working in an MNC in India. Under these circumstances, fixing of maintenance by the Court without there being even a prima facie proof of the husband being employed in India and with clear proof of the fact that the passport of the husband was seized, he was not permitted to leave country, (the bail was given with a condition that he shall keep visiting Investigating Officer as and when called) is contrary to law and not warranted under provisions of Domestic Violence Act.

5. We are living in an era of equality of sexes. The Constitution provides equal treatment to be given irrespective of sex, caste and creed. An unemployed husband, who is holding an MBA degree, cannot be treated differently to an unemployed wife, who is also holding an MBA degree. Since both are on equal footing one cannot be asked to maintain other unless one is employed and other is not employed. As far as dependency on parents is concerned, I consider that once a person is grown up, educated he cannot be asked to beg and borrow from the parents and maintain wife. The parents had done their duty of educating them and now they cannot be burdened to maintain husband and wife as both are grown up and must take care of themselves. 

6. It must be remembered that there is no legal presumption that behind every failed marriage there is either dowry demand or domestic violence. Marriages do fail for various other reasons. The difficulty is that real causes of failure of marriage are rarely admitted in Courts. Truth and honesty is becoming a rare commodity, in marriages and in averments made before the Courts.

 

Caveat - Original Side - High Court Calcutta

 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     CAVEAT NO.                 of 2015

 

IN THE HIGH COURT AT CALCUTTA

TESTAMENTARY INTESTATE JURISDICTION

ORIGINAL SIDE

 

In the Matter of:

An application under Section 148A of the Code of Civil Procedure;

    

And

 

In the Matter of:       

Manju Bhattacharya, wife of Sri Pradip Kumar Bhattacharya of 5-E, Jubilee Park, P. S. Jadavpur, Kolkata 700 033, District South 24-Parganas

                                     …               Caveator

 

VERSUS

 

Ajeya Kumar Upadhyay, son of Late Hari Vansh Upadhyay of Flat No. 3-D/5, Aasha Co-operative Housing Society Limited, 93, Deshpran Sashmal Road, P. S. Tollygunge, Kolkata 700 033, District South 24-Parganas

 

                     ……. Opposite Parties

 

 

To

The Registrar,

High Court, Original Side,

Calcutta – 700001.

 

Dear Sir,

                                                                                                                                                                                                                                                                                                                                                                                                                        

                Let nothing be done in any application for injunction and/or Stay respect of the above suit together with particulars of which are give below without prior notice to us as the Advocate on record of the said Caveateor.

 

                 Dated this           day of March 2015.

 

 

                                                                                      Yours faithfully,

                                                         

                                                                                               Advocate.

 

 

 

PARTICULARS

 

 

1.   2.       3.                 4.       5.         6.         7.

Name of the Caveator.   Address of the Caveator.       In case of Caveators residing outside the jurisdiction of this Court address of the Caveators for service of Notice within the jurisdiction of this Court.     Name of the Applicant in respect of application against which caveator.   Address of the applicants.         Nature of suit/proceeding out of which the proceeding may be initiated   Name of the Advocate of the Caveator whom the notice to be served.

Manju Bhattacharya   5-E, Jubilee Park, P. S. Jadavpur, Kolkata 700 033, District South 24-Parganas   Sandip Roy Choudhury, Advocate, High Court, Calcutta, Bar Association, Room No. 2 (In front of Court Room No. 12) and also at C/o Chhabi Sen, Supreme Law Chamber, Ground Floor, Room No. 3, 6, K. S. Roy Road, Kolkata 700 001   Ajeya Kumar Upadhyay       Aasha Co-operative Housing Society Limited, Flat No. 3-D/5, 93, Despran Sashmal Road, P. S. Tollygunge, Kolkata 700 033, District South 24-Parganas   In connection with any PLA application in This Hon’ble Court   Sandip Roy Choudhury, Advocate, High Court, Calcutta, Bar Association, Room No. 2 (In front of Court Room No. 12) and also at C/o Chhabi Sen, Supreme Law Chamber, Ground Floor, Room No. 3, 6, K. S. Roy Road, Kolkata 700 001

 

 

Caveat No.                 of 2015

IN THE HIGH COURT AT CALCUTTA

TESTAMENTARY INTESTATE JURISDICTION

ORIGINAL SIDE

 

 

In the Matter of:

An application under Section 148A of the Code of Civil Procedure;

And

In the Matter of:

Manju Bhattacharya

…….    CAVEATOR

Versus

Ajeya Kumar Upadhyay …… OPPOSITE PARTY

 

 

 

 

 

 

C A V E A T

 

 

 

 

 

 

 

 

 

 

 

 

 

Sandip Roy Choudhury, Advocate, High Court, Calcutta, Bar Association, Room No. 2 (In front of Court Room No. 12) and also at C/o Chhabi Sen, Supreme Law Chamber, Ground Floor, Room No. 3, 6, K. S. Roy Road, Kolkata 700 001

AN APPLICATION UNDER RULE 329/330 OF THE WEST BENGAL MOTOR VEHICLES RULES, 1989

 

 

 

 

    IN THE COURT OF THE LD. 10^th ADDITIONAL DISTRICT JUDGE AT ALIPORE

                                            

                                                          MACC CASE No. 54 of 2014

                                                          Putul Mondal

                                                              …………….Applicant                                                                               

                                                                      -Vs-

                                                           1. Ranjan Bhattacharjee

                                                                                 ……………..Opp.Party No.1

                                                           2. National Insurance Co.Ltd.

                                                                                 ………………Opp.Party No.2

 

.        

 

AN APPLICATION UNDER RULE 329/330 OF THE WEST BENGAL MOTOR VEHICLES RULES, 1989 AND U/S 169(2) OF THE M .V .ACT, 1988)

 

The humble petition on behalf of the  Opposite Party No.2, i.e. National Insurance   Co. Ltd

Most respectfully sheweth: -

1.      The today is the data fixed for service return and appear.                       

2.       That your petitioner has been served with a notice of the above noted case Enclosed there with a copy of the concerned application filed by the applicant  but it appears that the copies of the documents that are required to be appended   To the said application in compliance of the relevant rules of the west Bengal motor vehicles rules, 1989 have not been enclosed with the said application that has been served upon your petitioner along with the notice as aforesaid.                                                                             

3.      The due to not serving of the copies of the documents as aforesaid your petitioner could not  get an opportunity to instruct its  Ld. advocate on the legality and propriety of the documents in order to prepare the draft written statement on behalf of your petitioner pertaining to the aforesaid claim application .                                                                                                                     

4.       That if direction upon the applicant is not given to serve copies of the documents as aforesaid upon your petitioner and an opportunity is not given aforesaid to your petitioner to instruct its LD .Advocate in connection with those documents, your petitioner find it difficult to prepare and file its  written Statement consequent whereof your petitioner will suffer irreparable loss and  injury , mare particularly, in view of the face that a considerable amount of financial obligation is likely to be involved in this context and it is government money .                   

5.      That this petitioner is a bona fide one and is made for the ends of justice.

 

Therefore, it is humbly prayed that you’re Honour may graciously be pleased to issue a direction Upon the applicant to serve upon your petitioner   the copies of the Documents that were required to be appended  To the concerned claim Application  but have Not been appended by with the copy    of the present case and your honour may further be pleased   to allow a further date to your Petitioner to file an   written Statement upon allowing an opportunity to  Instruct its Ld. Advocate on the copies of the said documents after getting it from the  application to  service as aforesaid or pass   Such order or orders as your Honour may deem It  fit and proper.

 

And for this, your petitioner as in duty bound shall ever pray.