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TMI Blog2022 (9) TMI 1351X X X X Extracts X X X X X X X X Extracts X X X X ..... s a sum of Rs.59,33,517/-, payable towards the advances from customers in E wing. This, according to the plaintiffs, is the very amount which is payable by the defendant to the plaintiffs, after deducting the amount which defendant claims it is entitled to deduct. There is material to indicate that apart from the plaintiffs, the transactions of the rest of the persons, who had booked the flats in E wing, did not materialise. Prima facie, the claim of the plaintiffs that the said amount represents the consideration parted with by the plaintiffs can not be said to be without substance. The audited balance-sheet may furnish a sustainable ground for institution of a summary Suit on the premise that the statement therein constitutes an acknowledgment of liability. The plaintiffs may be termed as investors , if not allotties . Nonetheless, the facts remain that the plaintiffs had parted with a sumptuous amount towards the consideration, the project has not come up and the defendant agreed to refund the consideration after deducting a portion of the said amount on account of cancellation and also the amount of service tax, albeit, allegedly, at the instance of plaintiffs - The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intiffs, issued two cheques dated 15th July, 2017, for an amount of Rs.4,75,000/-, towards part repayment of the amount. The defendant, however, committed default in repayment of the balance amount. Thus, the plaintiffs were compelled to issue a demand notice dated 23rd November, 2017, under Section 8 of the Insolvency and Bankruptcy Code, 2016 ( IBC ). As the defendant did not comply with the demand therein, the plaintiffs were constrained to institute a Company Petition being Petition No.1726 of 2017 before National Company Law Tribunal, Mumbai Bench. (d) In the affidavits-in-reply and counter affidavits, filed in the said petition, according to plaintiffs, the defendant clearly acknowledged its liability to refund the balance amount. Even in the audited balance-sheet, as of 31st March, 2020, the defendant has shown a sum of Rs.59,33,517/-, as advance received from the customers against booking of flats in wing E . The plaintiffs assert the said amount is arrived at by deducting part of the amount already repaid to the plaintiffs and service tax. (e) Eventually, the Company Petition came to be dismissed by NCLT holding it to be not maintainable. However, NCLT observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to defendant, the alleged agreement to refund the amount is verbal one. There is no material to show as to what were the terms of the said contract to refund the amount. The liability to pay interest, as claimed by the plaintiffs, is clearly contentious. All these issues, including the primary question as to who was guilty of breach of contract, warrant trial. Therefore, the defendant is entitled to an unconditional leave to defend the suit. 8. I have heard Mr. Tejas Sanghrajka, the learned Counsel for the plaintiffs and Mr. Shyam Kapadia, the learned Counsel for the defendant at some length. With the assistance of the learned Counsels for the parties, I have perused the averments in the plaint, documents annexed thereto and affidavit-in-reply. 9. Before adverting to note the submissions canvassed on behalf of the parties, it may be apposite to note few uncontroverted facts. There is not much controversy over the fact that the plaintiffs had booked flat Nos.1601 and 1604 in the E wing of Imperial Heights , developed by the defendant. Nor the fact that the plaintiffs had collectively parted with a sum of Rs. 71,03,000/-, is in dispute. Issue of the Allotment Letters, reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin the ambit of Order XXXVII, submitted Mr. Sanghrajka. 13. In opposition to this, Mr. Kapadia, the learned Counsel for the defendant, laid emphasis on the fact that there is no document to evidence the alleged agreement to refund the balance consideration. At the highest, the case of the plaintiffs would be of a verbal agreement which can not be the basis of a Summary Suit under Order XXXVII. As a second limb, it was submitted by Mr. Kapadia that, even if the case of the plaintiffs is taken at par and maximum latitude is given to it, no agreement to pay interest on the balance consideration can be spelled out. Mr. Kapadia made an endeavor to demonstrate the inconsistency in the stand of the plaintiffs before NCLT and in this suit. To derive an undue advantage, the plaintiffs falsely alleged before NCLT that the transaction between the parties was one of work contract . In the case at hand, however, the plaintiffs are banking upon the underlying contract to purchase the flats in the building, which was to be developed by the defendant. This conduct dis-entitles the plaintiffs any relief, urged Mr. Kapadia. 14. The aforesaid submission of Mr. Kapadia that in the proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax) against cancellation of flat No.1601 and sum of Rs.18,90,292/- OUT OF Rs.21,75,000/- paid by the petitioner (after deducting 25% of Rs.21,75,000/-) i.e. Rs.5,43,750/- and Rs.67,208/- towards the amount of service tax) against cancellation of flat No.1604... .. ii. AFFIDAVIT IN REPLY DATED 10TH MARCH 2018: PARA-14 14. As the Petitioners did agreed for the aforesaid, this Respondents issued their two cheques of Rs.4,75,000/- bearing distinctive No.275469 and 275470 both dated 15th July, 2017 drawn on Bank of India. Since the Petitioners were to considered in whose name, the said two cheques were required, the same were handed over without filing the name of the drawees. Out of the aforesaid two cheques, cheque No.275470 appears to have been filled up by putting name of the Petitioner No. 2 and the said cheque was encashed accordingly in her account with Bank of India and the second cheque was filled up and encashed in the account of Ms. Indira j. Sanghrajka, the mother of the Petitioner No. 1 and mother in law of the Petitioner No. 2 who have no privity of contract of any nature whatsoever with this Respondent. iii. AFFIDAVIT IN REPLY DATE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endant agreed for the cancellation of the transaction so as to facilitate the plaintiffs to purchase another property in a different project at Andheri. The defendant categorically declined to refund the entire consideration deposited by the plaintiffs. The defendant agreed to refund the consideration, after deducting 25% of the amount which was paid by the plaintiffs and also the amount of service tax, on the condition that the plaintiffs would execute a letter of cancellation. According to defendant, it had agreed to refund a sum of Rs.35,43,725/- (against the amount of Rs.49,28,000/paid by the plaintiffs towards flat No.1601) and Rs.15,64,042/(against the amount of Rs.21,75,000/- for flat No.1604), after deducting 25% consideration and service tax. Pursuant thereto, the defendant had paid a sum of Rs.9,50,000/-. 18. On a fair reading, this appears to be the case of the defendant in the affidavit-in-reply in this case as well, as regards the refund of the amount and repayment of the sum of Rs.9,50,000/-. Whether this stand of the defendant as borne out by the pleadings, adverted to above, constitutes acknowledgement of a debt to the extent of the amount of Rs.5,107,767/-. Firs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the existence of an obligation to pay. Time for payment assumes secondary significance. 22. A Full Bench of this Court, enunciated the import of the terms debt and acknowledgment in the case of Jyotsna K. Valia Vs. T.S. Parekh Co. (2007) 4 MahLJ 517 (FB), as under.- 56. The next expression requiring consideration is the word Debt . Black's Law Dictionary (8th Ed.) defines Debt as under: A sum of money due by certain and express agreement. A specified sum of money owning to the person from another, including not only obligations of debtor to pay but right of creditor to receive and enforce payment . (State v. Ducey) 25 Dhio App. 2d 50, 266 N.E. 2d. 233, 235.... A fixed and certain obligation to pay money or some other valuable thing or things, either in the present or in the future. In a still more general sense, that which is due from one person to another, whether money, goods or services. 57. The essential requirement of a debt are: (1) an ascertained or readily calculable amount; (2) an absolute unqualified and present liability in regard to the amount with the obligation to pay forthwith or in future within a time cer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trument may, by declaring it to be his act and deed, entitle it to be received in evidence without further proof of execution, or Oath The action of acknowledging : a thing done or given in recognition of something received Acknowledgment of debt. An admission in writing that a debt is due or that some claim or liability is still in existence Acknowledgment of debt or liability means an admission in writing that a debt is due or that some claim or liability is still in existence. 23. In the light of the aforesaid exposition of the legal connotation of the terms debt and acknowledgment the pleadings extracted above, in my view, satisfy the requirement of both debt and acknowledgment to the extent of the amount, which the defendant agreed to refund. The submission on behalf of the defendant that, in the absence of a written contract to refund the amount, the tenability of the suit itself is suspect, does not merit acceptance unreservedly, if the afore-extracted pleadings are construed in the light of the aforesaid enunciation of law. In my view, the acknowledgment of liability to pay the amount to the extent agreed to by the defendant itself furnishes a foundation for in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st thereon surely raises triable issue. At the same time, the Court cannot be oblivious to the fact that to the extent of the amount of Rs.5,107,767/-, the liability to refund the same, on the own showing of the defendant, is acknowledged. 28. The relative position of the parties also deserves consideration. The plaintiffs may be termed as investors , if not allotties . Nonetheless, the facts remain that the plaintiffs had parted with a sumptuous amount towards the consideration, the project has not come up and the defendant agreed to refund the consideration after deducting a portion of the said amount on account of cancellation and also the amount of service tax, albeit, allegedly, at the instance of plaintiffs. 29. It would therefore be expedient to grant leave to the defendant to defend the suit subject to deposit of the said amount. Hence, the following order. :ORDER: (i) The defendant is granted leave to defend the suit on the condition of deposit of a sum of Rs.5,107,767/within a period of six weeks from the date of this order. (ii) If the aforesaid deposit is made within the stipulated period, this suit shall be transferred to the list of Commercial Cau ..... X X X X Extracts X X X X X X X X Extracts X X X X
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