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IN THE HIGH COURT OF JUDICATURE AT MADRAS
G.CHANDRASEKHARAN, J.
The Future Management & Consultancy Pvt Ltd. – Appellant
Versus
M/s. Lancor Holdings Limited – Respondent
C.S.No.630 of 2011
Decided on : 11-11-2022
The court held that the plaintiff company was entitled to continue with the proceedings of the suit once it had been struck off from the register of companies from 26.09.2017 for non-filing of the annual returns. The court also held that the plaintiff was entitled to recover the amount claimed in the plaint from the defendants with interest.
Fact of the Case:
The plaintiff, a defunct company, filed a suit against the defendants for recovery of a sum of Rs.3,24,14,595/- along with interest @ 24% from the first defendant from the date of the plaint till realization; to direct defendant Nos.1 & 3 to jointly and severally pay to the plaintiff a sum of Rs.1,00,00,000/- along with interest @ 24% from the date of the plaint till realization; to direct defendant No.1 to pay to the plaintiff a sum of Rs.50,00,000/- as damages along with interest @ 24% from the date of the decree till realization; for costs of the suit. The defendants contended that the suit was not maintainable as the plaintiff company was struck off from the register of companies and that the plaintiff was not entitled to recover the amount claimed in the plaint.
Finding of the Court:
The court found that the plaintiff company was entitled to continue with the proceedings of the suit once it had been struck off from the register of companies from 26.09.2017 for non-filing of the annual returns. The court also found that the plaintiff was entitled to recover the amount claimed in the plaint from the defendants with interest.
Issues: 1. Whether the suit is bad for mis-joinder of parties and causes of action as put forth in the written statement? 2. Whether the plaintiff is entitled to recover the suit amount of Rs.3,24,14,595/- with interest from the first defendant as claimed in the plaint? 3. Whether the plaintiff is entitled to recover the sum of Rs.1,00,00,000/- along with interest from the defendants 1 and 3 as put forth in the plaint? 4. Whether the plaintiff is entitled to seek and recover the damages from the first defendant as claimed in the plaint?
Ratio Decidendi: The court held that the plaintiff company was entitled to continue with the proceedings of the suit once it had been struck off from the register of companies from 26.09.2017 for non-filing of the annual returns. The court also held that the plaintiff was entitled to recover the amount claimed in the plaint from the defendants with interest. The court relied on the following legal principles: * A company struck off under Section 248 (5) of the Companies Act, 2013 (hereinafter referred to as “the Act”) may be rendered -dormant- for all other purposes, the ‘certificate of incorporation’ is ‘specifically’ and ‘statutorily preserved’ for the limited purposes of realizing the amount due to the company. * 20 years time is stipulated for restoring the company’s name in the register of companies.
Final Decision: The court decreed the suit in part with proportionate costs. The plaintiff was entitled to recover a sum of Rs.3,24,14,595/- (Rupees Three Crores Twenty Four Lakhs Fourteen Thousand Five Hundred and Ninety Five only) from the first defendant with subsequent interest at 6% p.a from the date of plaint till the date of realisation of amount on Rs.2,18,35,968/- (Rupees Two Crores Eighteen Lakhs Thirty Five Thousand Nine Hundred and Sixty Eight only). The plaintiff was also entitled to claim a sum of Rs.1,00,00,000/- (Rupees One Crore Only) along with interest at 6% p.a from the date of plaint till the date or realisation from the defendants 1 and 3. The plaintiff was not entitled to claim a sum of Rs.50,00,000/- as damages with interest and therefore, the claim of damages against the defendants was dismissed. The suit against the second defendant was dismissed.
JUDGMENT :
Prayer: This Civil Suit is filed under Order IV Rule 1 of the O.S.Rules r/w Order VII of Code of Civil Procedure, for a decree and judgment directing (i) Defendant No.1 to pay to the plaintiff a sum of Rs.3,24,14,595/- along with interest @ 24% from the date of the plaint till realization; (ii) To direct defendant Nos.1 & 3 to jointly and severally pay to the plaintiff a sum of Rs.1,00,00,000/- along with interest @ 24% from the date of the plaint till realization; (iii) To direct defendant No.1 to pay to the plaintiff a sum of Rs.50,00,000/- as damages along with interest @ 24% from the date of the decree till realization; (iv) for costs of the suit.
This is a suit for recovery of a sum of Rs.3,24,14,595/- along with interest @ 24% from the first defendant from the date of the plaint till realization; to direct defendant nos.1 & 3 to jointly and severally pay the plaintiff a sum of Rs.1,00,00,000/- along with interest @ 24% from the date of the plaint till realization; to direct defendant no.1 to pay the plaintiff a sum of Rs.50,00,000/- as damages along with interest @ 24% from the date of the decree till realization and for costs of the suit.
2. The plaintiff is part of the Future group of companies with interests ranging from minerals, metals, consultancy services etc., with a footprint in almost 32 countries. The plaintiff proposed to provide IT/ITES related support including business-process-outsourcing related work to its entire group of companies using cutting edge technology to optimize resource utilization and enhance performance of the group companies and was looking for office space in Chennai for such a centre. The first defendant is in the construction business and the 2nd defendant is the Managing Director of the first defendant. The third defendant is a subsidiary of the first defendant and controlled by the first defendant. Defendants 4 to 9 are vendors, who were paid for equipment for the interior work, which the first defendant had undertaken to perform for the plaintiff.
3. Kishore Kumar Menon, Prem Kumar Menon, & Christopher Menon claimed to be the owners of the land at Door No. 165 (Old Door No. 110), St. Mary’s road, Alwarpet, Chennai - 600 018. The first defendant held out that it had entered into a Joint Development Agreement, dated 13/17th December 2004 and a Supplemental Agreement, dated 29.03.2006, with the owners of this property. The Defendants 1 & 2 and the Menons held out that a super-structure was to be put up in the property, whereby 20,678 sq.ft each of built up space would be available on the 5th & 6th floors of the said proposed structure on the said premises. It was further held by the first and second defendants that the 5th floor comprising 20,678 sq.ft was owned by defendants 1 & 2 and the Menons held out that a similar extent in the 6th Floor was owned by them. They held out and assured the plaintiff that they have necessary resources to complete the proposed super structure as per law, in time and in line with the plaintiff’s requirements. They would obtain the completion certificate and requisite power supply of 2000 KVA. They agreed to handover the possession to the plaintiff in October 2008.
4. Plaintiff paid Rs.1,00,00,000/- to the first defendant on 22.07.2008 and a similar sum of Rs. 1,00,00,000/- was paid to the Menons on 22.07.2008 and an agreement dated 11.09.2008 was executed with the first defendant for the 5th floor and another agreement dated 30.09.2008 was executed with the Menons for the 6th floor. As per clause 3 of the agreement, dated 11.09.2008, lease will commence from 01.10.2008 or upon the lessor obtaining the completion certificate from the CMDA and the required power supply from the Tamil Nadu Electricity Board (TNEB). In order to trigger the commencement of the lease, the conditions precedent in the agreement dated 11.09.2008 had to be complied with and a registered deed ought to be entered into between the parties. At the request of the Defendant Nos. 1
AI
A company struck off under Section 248 (5) of the Companies Act, 2013 may be rendered -dormant- for all other purposes, the ‘certificate of incorporation’ is ‘specifically’ and ‘statutorily preserved....
A lease deed not registered creates a month-to-month tenancy; urgent interim relief suits are exempt from mandatory pre-institution mediation.
The burden of proof in possession disputes and the validity of lease agreements.
A tenant must prove actual damages to recover claimed amounts from the landlord; failure to substantiate losses results in dismissal of claims, except for the advance refundable amount.
Specific performance claims cannot proceed outside the insolvency framework once a claim related to the transaction is filed and admitted in CIRP.
The subsequent construction contracts superseded the original memorandum of understanding, and the defendants' possession was illegal as they failed to complete the construction as per the contract.
The attornment of tenancy by the original landlord and the passage of twelve years since the attornment were crucial in establishing the entitlement and status of respondents No.1 to 5.
Point of law: Eviction – Default in payment of rent - Unless there is the tendering of the lawful rent by tenant, Section 5 (4) does not have any application.
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