The court upheld the plaintiff's claim for recovery from the estate of the insolvent, emphasizing the validity of the memorandum of compromise and the necessity of expedient resolution for creditors.

JUDGMENT :

The suit had been filed under Order XXXVII Rule 2 of Original Side Rules, Madras High Court, seeking a judgment and decree against the defendants, International Sea Foods Private Limited, a company registered under the provisions of Companies Act, 1956 represented by Arjunlal Sunderdas and Arjunlal Sunderdas as the 2^nd defendant to pay a sum of Rs.8,20,00,000/- with interest on Rs.8,20,00,000/- with interest of Rs.7,00,00,000/- at 12% per annum from the date of plaint till the date of realization and for costs of the suit and in default to bring the property, described in the schedule to the plaint to sell and apply the proceeds towards payment of the aforementioned principle amount and interest and costs.

2.The plaintiff also seeks that if the sale proceeds are not sufficient for payment of the claim, a decree may be passed against the defendants to pay the amount together with interest at 12% p.a., till realization. The property described in the schedule was land and building at plot No.1A, New Door No.23, Anderson Road, Nungambakkam, Chennai. Pending the suit, the 2^nd defendant, Arjunlal Sunderdas had been adjudicated as insolvent and consequently by an order dated 08.09.2014 in A.No.5277 of 2014, the Official Assignee was impleaded as the 2^nd defendant as representing the estate of Arjunlal Sunderdas.

3.It is the case of the plaintiff that he had paid a sum of Rs.7,00,00,000/- to Arjunlal Sunderdas towards purchase of a flat in property bearing Old Door No.3/2A. New Door No.34, College Road, Nungambakkam, Chennai, which was proposed to be developed by the 2^nd defendant. The details of payment are as follows:

4.It had been further stated that the proposal for development of the property did not commence. The 1^st defendant had therefore deposited the original title deeds with respect to the property at New Door No.23, Anderson Road, Nungambakkam, Chennai and a memorandum in this regard had also been executed on 14.01.2011 acknowledging receipt of a sum of Rs.7,00,00,000/- from the plaintiff. The plaintiff also came to know that the property which was proposed to be developed at College Road, Nungambakkam, Chennai, had been sold to Amarnath Reddy on 27.07.2012. The plaintiff therefore lodged a complaint before the Commissioner of Police, Chennai, on 07.09.2013. The 2^nd defendant, Arjunlal Sunderdas filed an application seeking anticipatory bail in Crl.O.P.No.26317 of 2013 before this Court. A memorandum of compromise was entered into between the plaintiff and the 1^st defendant represented by Arjunlal Sunderdas as Managing Director and also in his personal capacity on 11.11.2013, whereby there was an admission of debt of Rs.7,00,00,000/- and the defendants undertook to pay a sum of Rs.8,20,00,000/- to the plaintiff on or before 31.01.2014. In view of the memorandum of compromise, the Criminal Original Petition was closed. Since the defendants did not honour their commitment to pay the aforementioned sum of Rs.8,20,00,000/- the suit had been filed on the basis of the memorandum of deposit of title deeds as a mortgage suit claiming a judgment and decree for the said sum together with interest on the principle amount of Rs.7,00,00,000/-, and on failure to bring the property at New Door No.23, Anderson Street, Nungambakkam, Chennai to sale and apply the proceeds towards the decreetal amount and if the decree amount is not satisfied for a personal decree against the defendants for the differential amount. The plaintiff also sought costs of the suit. During pendency of the suit, the 2^nd defendant had been adjudicated as an insolvent by order in I.P.No.25 of 2014 on 21.04.2014. The Official Assignee was therefore impleaded as the 2^nd defendant.

5.The learned Master had directed paper publication to be effected a