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2017 Supreme(Del) 3837
IN THE HIGH COURT OF DELHI AT NEW DELHI
YOGESH KHANNA, J.
Mrs. Usha Jain - Petitioner
Versus
Aditya Landcon Private Limited - Respondent
CO.PET. 301 of 2015 & CA Nos.1377-78 of 2015
Decided On : 26-09-2017
For the Petitioner:Mr. Darpan Wadhwa, Sr Advocate with Ms. Ruby Singh Ahuja, Mr. Nakul Gandhi, Ms. Aditi Gandhi, and Mr. Sharvan Sahay, Advocates.
For the Respondent:Mr. Ujjwal K Jha, Advocate.
Admission of liability in balance sheets extends the period of limitation, and advance payments cannot be forfeited without justification.
Headnote:
Admission of Liability - Company Petition - Companies Act, 1956, Section 433/434 - 73 (1998) DLT 593; 185(2011) DLT 428; 2015 SCC Online Del 12831; Civil Appeal No.7588/2012; 2013 (137) DRJ 374; 2010 (10) SCALE 151 - The court discussed the admission of liability by the respondent company in its balance sheets and the legal principle that admission of a debt in a balance sheet or in the form of a letter duly signed by the respondent would amount to an acknowledgment, extending the period of limitation. The court also highlighted that advance or an amount of installment given cannot be forfeited, especially when the respondent had not pleaded any loss allegedly suffered on account of such transaction. The judgment influenced the court's decision to admit the petition and appoint the Official Liquidator as the Provisional Liquidator.
Fact of the Case:
The petitioner, Smt. Usha Jain, filed a company petition as the sole beneficiary under the Will of her deceased husband, seeking the repayment of an advance amount paid to the respondent company for the purchase of a plot. The respondent company denied receipt of a portion of the advance and failed to repay the admitted outstanding debt, leading the petitioner to seek liquidation of the respondent company.
Finding of the Court:
The court found that the debt was not time-barred and that the advance could not be legally forfeited by the seller. The court admitted the petition and appointed the Official Liquidator as the Provisional Liquidator.
Issues: The issues involved the time-barred nature of the debt and the legality of forfeiting the advance by the seller.
Ratio Decidendi: The court held that the admission of liability by the respondent company in its balance sheets extended the period of limitation, and that the advance could not be forfeited without justification.
Final Decision: The petition was admitted, and the Official Liquidator was appointed as the Provisional Liquidator. The respondent company was given one month to pay the amount due, failing which the petitioner would be entitled to publish the citation and apply for the appointment of the Provisional Liquidator.
YOGESH KHANNA, J.
1. The petitioner Smt. Usha Jain is the wife of late Shri D. K. Jain and is the sole beneficiary under the Will dated 11.12.2004 of her deceased husband and as such has filed this company petition.
2. The respondent company had entered into an agreement to sale and purchase for total sale consideration of Rs. 16.09 Crore in respect of plot bearing No.191, Block B, NOIDA, Phase–II, admeasuring 15000 square meters with the husband of the petitioner, who paid a sum of Rs. 5.40 Crore as an advance amount vide a cheque bearing No.486586 dated 20.09.2008 of Rs. 5 crore drawn on HDFC Bank and cash of Rs. 40 lakhs. The respondent denied receipt of Rs. 40 lakh paid in cash. The deal could not be materialise as the respondent company did not give a clean title and in its letter dated 03.02.2009 rather admitted that it had no transferrable title of the property, but it wrongly alleged that the husband of the petitioner had agreed to purchase the property on ‘as is where is’ basis. The letter dated 03.02.2009 is annexure P-4 to the petition.
3. It is alleged due to close relations between the parties, the husband of the petitioner never escalated the matter as the respondent company agreed to return the advance given but could not arrange the funds. The respondent company, under the column of current liability in its balance sheets has reflected this amount as ‘advance against property sale’, thus admitting the liability towards the petitioner. The copies of the balance sheets for the financial years 2008-09, 2009-10, 2010-11, 2011-12, 2012-13, and 2014-15 along with profit and loss account statement have been filed with petition as annexure P-5 colly. After the sad demise of Sh.D.K.Jain when the said amount was demanded from the respondent company it failed to pay the amount and pleaded non-availability of funds. The petitioner then sent a notice dated 26.06.2014, but the respondent failed to reply. The petitioner also sent a statutory notice dated 17.01.2015 under Section 433/434 of the Companies Act, 1956 calling upon the respondent to repay the amount within 21 days.
4. It is alleged despite various requests made by the petitioner even through the notices, the respondents had neglected/failed to pay the admitted outstanding debt and it is just and proper to pass an order of liquidation of the respondent company.
5. The respondent in its reply has raised two issues; (a) the debt for which this petition is filed has become time barred; and (b) the respondent has forfeited the advance paid by the husband of the petitioner since her husband had allegedly failed to fulfill his part of promise as per the agreement.
6. Admittedly, none of the parties had filed the agreement to sell hence it can safely be assumed that it was an oral agreement to sell and purchase. The two documents relevant for the purpose are (a) the cheque of Rs. 5 crore and (b) the receipt dated 20.09.2008 issued by the respondent which runs as under:-
“20 Sept.
08 Received Rs.5.00 Crores from Shri D.K. Jain as advance against 15000 sq.mts. Plot No.B-91, Noida Phase-II, total consideration settled is Rs.16.09 crores balance amount shall be paid on 31st Jan.2009.
For Aditya Landcon (P)Ltd.
-sd
Sushant Aggarwal
D.K. Jain”
7. The letter dated 30.01.2009 wherein husband of the petitioner had informed the respondent company that he had paid an advance only on the assurance and representation that the respondent had a clean title to the said property and since it was found to be an encumbered property involved in controversy, being auctioned by the Debt Recovery Tribunal–I, subject to various claims and liabilities, the plaintiff demanded the refund. The relevant portion of reply dated 03.02.2009 sent by the respondent to letter dated 30.01.2009 of Sh.D.K. Jain, late husband of petitioner is as under:-
“xxx
xxx
Please note that we are and have always been ready to execute the necessary documents for transferring our rights/ title in the property. Having stated the ab
