An interim direction for a third party to deposit funds is legally unsustainable in the absence of a decree or a crystallized, undisputed liability, particularly when the party is not privy to the underlying contract in dispute.

JUDGMENT :

TEJAS KARIA, J.

INTRODUCTION

1. The present Petition assails the Order dated 27.09.2022 (“Impugned Order”) passed by the Court of Ms. Nirja Bhatia, District Judge (Commercial Court-06), South-East District, Saket District Courts (“Trial Court”), in CS (Comm) No. 350/2020 (“Suit”), instituted by Respondent No. 1 against Respondent No. 2 and the Petitioner, who were arrayed as Defendant Nos. 1 and 2, respectively.

FACTUAL MATRIX

2. In the Suit, it is the case of Respondent No. 1 / the Plaintiff that:

2.1. On 02.09.2015, the Petitioner awarded a contract to Respondent No. 2, vide a Letter of Award, for the construction of the National Investigation Agency (“NIA”) Branch Office, Residential Building, and allied works at HI-Tech City, Hyderabad, Telangana (“Project”). Pursuant thereto, an agreement was executed between the Petitioner and Respondent No. 2 on 26.10.2015.

2.2. After the award of the work to Respondent No. 2, Respondent No. 2 further sub-contracted the same to Respondent No. 1. Owing to payment disputes, the sub-contract was mutually terminated. Thereafter, on 10.11.2018, Respondent No. 1 and Respondent No. 2 arrived at an understanding that the payment disputes would be evaluated on the basis of the work executed by Respondent No. 1 from October 2017 to April 2018, along with the evaluation and reconciliation of RA Bill Nos. 14 to 17.

2.3. Thereafter, the work executed by Respondent No. 1 was evaluated and, on the basis of such evaluation, a Settlement Agreement dated 20.11.2018 was executed between Respondent No. 1 and Respondent No. 2. In terms of the said Settlement Agreement, Respondent No. 2 agreed to pay Respondent No. 1 a sum of Rs. 1,00,00,000/- towards full and final settlement of all dues payable to Respondent No. 1 up to 20.11.2018.

2.4. In discharge of the aforesaid liability, Respondent No. 2 issued two cheques in favour of Respondent No. 1 aggregating to Rs. 60,00,000/- and further assured that the balance amount of Rs. 40,00,000/- would be paid on or before 30.11.2019. Subsequently, both the cheques issued by Respondent No. 2 in favour of Respondent No. 1 were allegedly dishonoured on the grounds of “Funds Insufficient” and “Payment Stopped by Drawer”.

2.5. In respect of the aforesaid dishonour of cheques, Respondent No. 1 instituted two complaints against Respondent No. 2, which are stated to be pending adjudication before the Court of the Metropolitan Magistrate, Saket Courts, Delhi.

2.6. Respondent No. 1 further issued a legal notice to the Petitioner, requesting that any outstanding amount payable to Respondent No. 2 in relation to the Project not be released in favour of Respondent No. 2 from the bank guarantee furnished by Respondent No. 2.

2.7. Thereafter, another notice was issued to the Petitioner, whereby Respondent No. 1 claimed release of an amount of Rs. 1,00,00,000/- in its favour.

3. As Respondent No. 2 allegedly failed to make the payment of the settlement amount in terms of the Settlement Agreement dated 20.11.2018, Respondent No. 1 filed the Suit against both Respondent No. 2 and the Petitioner, inter alia, praying for the following relief:

“It is therefore, most respectfully prayed that this Court may be pleased to pass a decree:

a) In favor of the Plaintiff firm and against the defe