The court affirmed that a decree can be issued based on admissions where debts owed are settled through an approved resolution plan, allowing the security deposit to be recovered unconditionally.

JUDGMENT :

ABHAY AHUJA, J.

1. This Interim Application seeks a decree on admission under Order XII Rule 6 of the Code of Civil Procedure, 1908 (the “CPC”) as under:-

“a. This Hon’ble Court be pleased to pass a judgment and decree on admission in terms of prayer clause (a) of the suit, ordering and directing the Defendant to pay to the Plaintiff, the sum of Rs. 19,55,00,000/- (Rupees Nineteen Crore Fifty Five Lac Only) together with interest @ 24% per annum from the due date till the realization of the same by the Plaintiff forthwith.”

2. The Plaintiff is a company previously known as Essar Steel India Limited and now as Arcelormittal Nippon Steel India Limited carrying on business inter alia of manufacturing steel products and is a fully integrated steel producer having steel mill in Hazira, Surat, Gujarat. The Defendant is a company (previously known as “Stemcor India Private Limited”) engaged in the business of trading in steel and other materials. Moorgate Industries UK Limited (formerly known as “Stemcor UK”) and Moorgate Industries DMCC (Formerly known as “Stemcor Mesa DMCC”) are sister concerns / group companies of the Defendant.

3. On or about 7^th April, 2012, the Defendant agreed to procure certain raw materials / consumables (Coke /coke pellets) for and on behalf of the Plaintiff worth Rs. 150 Crores on the terms and conditions to be agreed between the parties. The Defendant had requested the Plaintiff to provide for a security deposit of Rs. 10 Crores to enable it to procure the materials. On 7^th April, 2012, itself the Plaintiff paid Rs. 10 crores by RTGS to the Defendant as an accountable advance being the security deposit.

4. On 23^rd April, 2012, the Defendant acknowledged receipt of Rs. 10 crores towards the security deposit and further requested for Rs. 15 crores as security deposit as it expected an increase in the cost of procuring goods. The Plaintiff paid the further Rs. 15 crores to the Defendant by RTGS. It was agreed that the security deposit will be refunded to the Plaintiff immediately upon payment against goods delivered.

5. On 21^st December, 2012, Moorgate UK and the Plaintiff entered into a sales contract-RIS0331 for supply of goods. Moorgate UK later agreed to two addenda to the sales contract being addendum dated 7^th January, 2013 and 31^st January, 2013.

6. On 15^th April, 2013, the Defendant refunded Rs. 5.45 crores out of the total security deposit of Rs. 25 crores. It is the case of the Plaintiff that the Defendant, therefore, remains liable to refund the balance sum of Rs. 19.55 crores.

7. On 9^th July, 2013, the Defendant addressed an email to the Plaintiff stating that the Plaintiff has outstanding payment obligations towards Moorgate UK (then referred to as “Stemcor UK”) and that the deposit held by the Defendant in INR would be remitted back to the Plaintiff once all invoices / interest payment is made to Moortage UK (then referred to as “Stemcor UK”)

8. On 12^th July, 2013, the Defendant addressed an email stating the manner in which the payments between various entities should be made and that the Plaintiff had to clear its outstanding dues towards Moorgate UK and that the said deposit held by the Defendant would be remitted back to the Plaintiff once all invoices / interest payment is made to Moorgate UK.

9. On 23^rd May, 2014, the Defendant addressed an email stating that the Plaintiff will have to pay the full invoice value to the Defendant’s group entities before release of deposit. It has been submitted that the alleged outstanding of the Plaintiff is USD 3.6 million.

10. On 15^th June, 2016, the Plaintiff through its advocate called upon the Defendant to repay the balance security deposit of Rs. 19.55 crores, however, the Defendant failed to pay the same. On 15^th July, 2016, the Plaintiff therefore, filed the Commercial Summary Suit.

11. On 27^th December, 2016, the summons for judgment came to be filed and on 14^th January, 2017, the Defendant filed reply inter alia seeking leave to defend the Suit on