In summary suits, a defendant must provide solid grounds for leave to defend; mere allegations of fraud without particulars will not suffice against a valid MOU committing to repayment.

JUDGMENT

Jayant Nath, J.(Judgment)

IA No.12605/2017 in CS(OS)424/2017

1. This application is filed by the defendant under Order 37 Rule 3(5) of The Code of Civil Procedure (hereinafter referred as `CPC') seeking leave to defend.

2. The accompanying suit/plaint is filed by the plaintiff for recovery of Rs.8,00,00,000/- from the defendants along with Rs.6,83,49,498/- being interest @ 18% compounded quarterly from the date of payment till the date of filing of the suit. Pendente lite and future interest is also accordingly sought. The case of the plaintiff is that in April 2013 defendant No.2 approached a sister concern of the plaintiff V.K.R. Constructions Private Limited on behalf of defendant No.1 and offered to sell the hotel site No.1 at International Business Bay-2 having FSI area of 1,07,640 sq.ft. along with proportionate land area situated at IBB-2, Sushant Golf City, Sultanpur Road, Lucknow. In the course of discussions and negotiations, the said V.K.R. Constructions agreed to purchase the hotel property for a total sale consideration of Rs.6,86,40,000/-. In confirmation thereof, the said V.K.R. Constructions paid to defendant No.1 a sum of Rs.1,00,00,000/- by way of advance/earnest money on 26.04.2013. Subsequently, an agreement to sell for the hotel property was executed between the defendant and V.K.R. Constructions Private Limited, the sister company of the plaintiff on 14.2.2014, and receipt of the advance/earnest money of Rs.1,00,00,000/- was duly acknowledged. The balance consideration of Rs.5,86,40,000/- was to be paid on or before 30.06.2014 at the time of execution of the sale deed.

3. It is further pleaded that later on defendant No.2 approached V.K.R. Constructions for immediate payment of balance consideration as defendants were in need of urgent funds and offered to also sell the residential FSI area Group Housing at Sushant Golf City, Sultanpur Road, Lucknow at a discounted price. Defendant No.2 on behalf of defendant No.1 offered to sell the said 1,00,000 sq.ft. at the rate of Rs.400 per sq.ft. The parties, namely, defendant No.1 and V.K.R. Constructions agreed to sell/purchase the said residential property for a total consideration of Rs.3,93,60,000/- on 3.3.2014. It was agreed that the entire consideration for the residential property shall be payable alongwith the balance consideration for the hotel property.

4. On 6.3.2014 V.K.R. Constructions paid a sum of Rs.1.80 crores to defendant No.1.Similarly, the plaintiff transferred a sum of Rs.1 crore. Rs.6.75 crores from another sister company Manvi Realtors Private Limited to defendant No.1. Rs.25 lacs was transferred from the account of Divya Vidhi Homes Private Limited to defendant No.1. Hence, a total amount of Rs.9.80 crore was paid and adjusted towards balance sale consideration of the hotel property i.e. Rs.5,86,40,000/- and entire sale consideration for the residential property being Rs.3,93,60,000/-.

5. It is the case of the plaintiff that they continued to follow up with the defendants to execute the sale deed for the hotel property and the residential property. However, execution of the sale deed was delayed on one pretext or another.

6. It is claimed that defendant No.1 expressed its willingness to execute the sale deeds subject to the plaintiff allaying its apprehension regarding payment from the sister/group companies of the plaintiff as the defendant No.1 wanted to deal only with the plaintiff and V.K.R. Constructions. To avoid accounting complications and administrative difficulty the plaintiff`s sister concern agreed to make adjustments