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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 ..... the plaintiffs had paid a sum of Rs.49,28,000/-. Against the consideration of Rs.43,50,000/-, for flat No.1604, the plaintiffs had paid an amount of Rs.21,75,000/-. Thus the plaintiffs parted with consideration of Rs.71,03,000/-. The Allotment Letters dated 31st July, 2015, recorded the material terms of the contract including the receipt of consideration. (b) The plaintiffs aver that the defendant did not register the "E" wing of 'Imperial Heights' with Real Estate Regulatory Authority despite the Real Estate (Regulation and Development) Act, 2016, having been brought into force in the State of Maharashtra. The plaintiffs repeatedly requested the defendant to register the project under Section 3 of 'RERA' and commence and complete the construction in accordance with the terms of the contract. However, the defendant paid no heed. Having realized that the defendant did not intend to abide by the Regulatory law and discharge its obligations in accordance with the terms of the contract, the plaintiffs claimed to have requested for refund of the entire amount along with interest thereon. Thereupon, the defendant, acceding to the request of the plaintiffs, issued two cheques dated 15t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the assertions of the plaintiffs that the defendant was at fault and had thus agreed to refund the amount paid by the plaintiffs. On the contrary, according to the defendant, the plaintiffs backed out from the transaction as the plaintiffs intended to purchase another property. In fact, in the Petition before NCLT, the plaintiffs categorically asserted that they requested the defendant to refund the amount as they intended to utilize the fund to purchase another property. In this view of the matter, the question as to who committed breach of contract is a matter for trial. 6. It was further contended that the case set up by the plaintiffs, in the instant suit, is at a complete variance with the case set up before the NCLT. Plaintiffs approached NCLT with the case that the transaction in question was one of "works contract", and, therefore, tribunal had jurisdiction to entertain IRP. In the case at hand, the plaintiffs have asserted that the transaction was of sale of the flats in question and on account of the default in completion of the project, the plaintiffs are entitled to refund of the amount. 7. In any event, according to defendant, the alleged agreement to refund the am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... took place, Mr. Sanghrajka would urge that at best it would be a case of frustration of contract on account of default on the part of the defendant. In that event also, the liability to refund the benefit which the defendant received cannot be disputed, urged Mr. Sanghrajka. 12. A two-fold submission was canvassed by Mr. Sanghrajka to draw home the point that the liability to refund the balance consideration is undisputed. First, in the affidavits-in-reply and counter affidavits filed in the proceedings before NCLT, the defendant categorically admitted that it had agreed to refund the amount and towards part repayment of the said amount, a sum of Rs.9,50,000/- was paid. Secondly, in the audited balance-sheet of the defendant for the financial year ending 31st March, 2020, the defendant has shown the amount of Rs.5933517/- as advances received from customers against booking of flats in "E" wing. The said amount represents the very amount repayable to the plaintiffs after deduction of the sum of Rs.9,50,000/- and the amount towards the service tax. These two set of admissions squarely bring the case of the plaintiffs within the ambit of Order XXXVII, submitted Mr. Sanghrajka. 13. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... davits. i. "AFFIDAVIT IN REPLY DATED 10TH MARCH 2018: PARA 1316TH LINE:- "...The Respondent was not at all interested in any such cancellation, however just to facilitate the Petitioners in their purchasing flat at Andheri the Respondent agreed for such cancellation. However, all along this Respondent had made it very clear to the petitioner that as per the terms in allotment letter as well as terms of registered Agreement with other flat purchasers in the project and even conventional practice, if any party desirous to cancel the booking, the amount till then paid would be refunded after deducting 25% of the total consideration paid and after deducting the amount of service tax paid if any and this the balance payment only will be refunded against signing of the letter of cancellation. Thus the Petitioners cancelled the booking of the said two flat viz. Flat No. 1601 and 1604 on the condition that this Respondent will be making refund of sum of Rs.42,82,925/- out of Rs.49,28,000/- paid by the Petitioner (after deducting 25% of Rs.49,28,000 i.e. Rs.12,32,000/- and Rs.1,52,275/- towards the amount of service tax) against cancellation of flat No.1601 and sum of Rs.18,90,292/- OUT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Petitioners who have backed out from their commitment and sought refund of money and though this Respondents has offered to refund the same after deducting 25% of total consideration paid and after deducting the amount of service tax paid thereon which the Petitioners have vehemently opposed to accept the same and...." ................... Viii. FURTHER AFFIDAVIT IN REPLY DATED 17 OCTOBER 2019: PARA 4(I)-12 TH LINE: ".....I say that only with good intention and by way of bona fide approach the Respondents agreed for such cancellation and to refund the amount so invested after deducting 25% of total investment and after deducting amount of service tax, VAT if any and without any interest thereof and only subject to the Petitioners execute the necessary writing recording such cancellation of investment...." 17. On a cumulative reading of the aforesaid contentions of the defendant, in the proceedings before NCLT, the defendant seems to have taken the stand that the defendant was not at all ready to cancel the allotment. Only, on the request and persuasion of the plaintiffs, the defendant agreed for the cancellation of the transaction so as to facilitate the plaintiffs to purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per perspective, it becomes abundantly clear that the parties are at issue over two aspects as far as the claim for refund of the amount which was parted with by the plaintiffs. One, the quantum of the amount. Plaintiffs claim that the defendant agreed to refund the entire amount. In contrast, the defendant contends it was agreed that the defendant would deduct 25% of the said amount and the amount of service tax. Two, the plaintiffs claim interest on the said amount. Defendant categorically contends there was no agreement to pay interest thereon. In this view of the matter, the moot question that arises for consideration is whether the aforesaid averments in the pleadings constitute an acknowledgment of debt to the extent of the amount, the defendant agreed to refund. 21. To explore an answer, one needs to delve into the pivotal question as to whether the amount which remained with the defendant constitutes a debt. In common parlance, debt signifies an amount due from one person to another. It is an obligation to pay the amount, either in present or future. What is of salience is the existence of an obligation to pay. Time for payment assumes secondary significance. 22. A Full B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ple if under an agreement of tenancy rent is payable on the 15th of the following month, the rent for January becomes due on February 1, but is payable on February 15; and (iii) contingent debt which becomes payable on the happening of acertain event which may or may not occur; in the above instance the rent for the month of January will not be a debt in the preceding month of December for the tenant may or may not reside in the next month." 59. The expression, "acknowledgment" may now be considered. In Black's Law Dictionary, Eighth Edition, "acknowledgment" has been described as under: "Acknowledgment. 1. A recognition of something as being factual. 2. An acceptance of responsibility. 3. The act of making it known that one has received...something...acknowledgment of debt. Recognition by a debtor of the existence of a debt. 60. In P. Ramanatha Aiyar's, The Law Lexicon, Reprint, 2001, "acknowledgment" has been stated thus: "Acknowledgment, is a proceeding whereby a person who has executed an instrument 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 thin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alance sheets of a Corporate Debtor would amount to an acknowledgment under Section 18 of the Limitation Act. In Bishal Jaiswal (supra) authored by Nariman, J. this Court quoted with approval the judgments, inter alia, of Calcutta High Court in Bengal Silk Mills Co. v. Ismail Golam Hossain Ariff , and Pandem Tea Co. Ltd., the judgment of the Delhi High Court in South Asia Industries (P) Ltd. v. General Krishna Shamsher Jung Bahadur Rana and the judgment of Karnataka High Court in Hegde Golay Ltd. v. State Bank of India and held that an acknowledgement of liability that is made in a balance sheet can amount to an acknowledgement of debt." 26. Viewed through the aforesaid prism, 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. 27. Undoubtedly, the defendant has raised defences which merit trial. Entitlement of the plaintiffs to claim full refund and also interest 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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