IN THE HIGH COURT OF JUDICATURE AT CALCUTTA
I.P. Mukerji, Amrita Sinha, JJ.
Frostees Export (India) Private Limited – Appellant
Versus
Sabri Properties Private Limited and Others – Respondents
APO No. 44 of 2017, GA No. 2844 of 2016, CS No. 276 of 2015
Decided On : 21-06-2018
Mortgage - Property Dispute - West Bengal Land Reforms Act, 1955 - Order 12 Rule 6 - Attachment before Judgment - Judgment on Admission - [Mortgage] - [Property Dispute] - [West Bengal Land Reforms Act, 1955, Order 12 Rule 6] - The court discussed the failure of consideration for the agreement, admission of the amount paid, and the denial of liability by the defendants. The court analyzed the legal provisions of Order 12 Rule 6 and attachment before judgment, and emphasized the need for clear, unambiguous, and unconditional admission for judgment on admission. The court also highlighted the requirement to establish a prima facie case for obtaining an order of attachment before judgment. The court refused to interfere with the discretion used by the appellate court and upheld the interim order restraining the defendants from alienating their property.
Fact of the Case:
The plaintiff, a dealer of Hyundai motor cars, entered into an agreement with the defendants for the purchase and development of property for setting up a dealership. The defendants failed to fulfill the agreement, leading to a dispute over the repayment of the amount advanced by the plaintiff. The plaintiff sought a decree, interest, damages, and injunction against the defendants.
Finding of the Court:
The court found that the defendants had received the amount from the plaintiff, but there was a dispute over the nature of the payment and the failure of consideration for the agreement. The court refused to grant judgment on admission or an order of attachment before judgment, emphasizing the lack of clear admission and the need to establish a prima facie case. The court upheld the interim order restraining the defendants from alienating their property.
Issues: The issues involved the nature of the payment made by the plaintiff, the failure of consideration for the agreement, the denial of liability by the defendants, and the jurisdiction of the court.
Ratio Decidendi: The court emphasized the need for clear, unambiguous, and unconditional admission for judgment on admission. It also highlighted the requirement to establish a prima facie case for obtaining an order of attachment before judgment. The court refused to interfere with the discretion used by the appellate court and upheld the interim order restraining the defendants from alienating their property.
Final Decision: The court refused to grant judgment on admission or an order of attachment before judgment, upheld the interim order restraining the defendants from alienating their property, and refused to interfere with the discretion used by the appellate court.
I.P. Mukerji, J.
1. I have had the privilege to go through the draft judgment prepared by my sister Justice Amrita Sinha. I wholeheartedly agree with it. I would like to add a few observations of my own.
2. The plaintiff/appellant are the dealers of Hyundai motor cars. The business of their principal is said to be in the name and style of Mukesh Hyundai. The third and fourth defendants/respondents are husband and wife and 100% shareholders in the first and second defendants/respondents, the business of which is building and development of property. The fifth defendant/respondent is a partnership firm. The third and fourth defendants/respondents are also partners in this partnership firm.
3. The plaintiff/appellant states the following the plaint. On 1st October, 2012 they received a letter from Hyundai Motor India Ltd. They enquired of the plaintiff/appellant if they could set up a dealership for passenger cars in the Howrah district of West Bengal. Hyundai required 6000 square feet area for a showroom and 12000 square feet for a work shop and sale of spare parts.
4. On 4th October, 2012 an agreement described as a memorandum of understanding was executed between the plaintiff/appellant and the first defendant/respondent. The aggregate consideration was Rs. 2.44 crores. According to the agreement, Rs. 2 crores have to be lent and advanced by the plaintiff/appellant to this defendant/respondent. It was secured by mortgage made on 12th October, 2012 of a property at Mouza-Nibra, P.S. Domjur, District Howrah, measuring about 14 cottahs belonging to the second defendant/respondent. On 18th October, 2012 the first defendant/respondent purchased only 14.5 cottahs of another parcel of land in Howrah of a total 29 cottahs that they were supposed to purchase and develop through the third defendant/respondent according to this agreement, by constructing the showroom and workshop. On 21st November, 2012 at the request of the third defendant/respondent the plaintiff/appellant released their mortgage over the Nibra property. The newly acquired land was allegedly mortgaged by the first defendant/ respondent in favour of the appellant/plaintiff.
5. According to the averments made in the plaint the whole consideration for the agreement had failed. The first defendant/respondent had neither purchased the balance part of the property nor had commenced any development work in it in terms of the agreement.
6. The owner of the adjoining property had started proceedings under the West Bengal Land Reforms Act, 1955 claiming pre-emption rights. There is absolutely no doubt whatsoever that nothing happened after execution of the said memorandum.
7. The plaintiff/appellant claims the said principal sum of Rs. 2 crores against the defendants/respondents together with interest of Rs. 71,21,096/- calculated at the rate of 12% per annum from 12th October, 2012 to 30th September, 2015 together with Rs. 300 crores as damages.
8. The case in the plaint was regurgitated in the interlocutory petition where a decree for Rs. 2,71,21,096/- was claimed on admission. An injunction was sought against the defendants/respondents directing them not to alienate or encumber the said 14 cottahs of land at Mouza-Nibra, P.S. Domjur, District-Howrah.
9. An affidavit-in-opposition was affirmed was filed by Dev Anand Gupta the third defendant/respondent on behalf of the first, second and fifth defendant/respondents and partner of the fifth defendant/respondent which included the fourth defendant/respondent. At the outset he said that the suit concerned mortgage of a property in Howrah and that this court had no territorial jurisdiction to entertain it. The plaintiff/appellant needed a showroom and work shop for its business of car dealership. The defendant/respondent agreed to sell the 6,000 square feet area for a showroom and lease 12,000 square feet on the ground floor t
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