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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Raj Mohan Singh, J.
Mgf Developments Ltd. – Appellant
Versus
State Of Haryana & Ors. – Respondents
CWP No.25534 of 2021 (O&M)
Decided On : 19-04-2022
Lok Adalat Award - Company Dispute - Companies Act, 1956 - National Company Law Tribunal - Scheme of Arrangement - Change of Land Use - Mutation - Exchange Deeds
Fact of the Case:
The petitioner sought to quash an award passed by the Daily Lok Adalat and to stay the operation of the award. The petitioner, a company, claimed exclusive rights to certain land parcels due to a demerger order. The respondents, subsidiary companies of another holding company, were alleged to have obtained mutations of the land parcels and fraudulently managed to get the ownership entered in the revenue record. The petitioner also sought mandamus to inquire into mutations and the conduct of contesting respondents while entertaining a license application. The petitioner expressed interest in exchanging the land parcels with the respondents, but alleged that the respondents fraudulently obtained mutations and did not fulfill the exchange agreement. The petitioner also alleged that the respondents took undue advantage of a dispute with their joint venture partner and obtained partition of the land parcels without the petitioner's knowledge. The petitioner sought to assail the award on the ground that the exchange deeds were without consideration and that the respondents exerted influence to preponed the date of hearing without notice to the petitioner.
Finding of the Court:
The court found that the petitioner's action was belated and that the petitioner acquiesced to the civil suit, exchange deeds, and compromise, making it debatable whether the petitioner could espouse the cause at such a late stage. The court also noted that the petitioner was a necessary party in the proceedings before the National Company Law Tribunal and that the pending application under Section 231 of the Companies Act would be decided by the NCLT. The court deprecated the unilateral preponement of the date of hearing by respondent No.2 and directed respondent No.1 to allocate the pending application to another competent officer or to take up the issue itself.
Issues: Belated action by the petitioner, acquiescence to the civil suit, exchange deeds, and compromise, necessity of the petitioner as a party in NCLT proceedings, and unilateral preponement of the date of hearing by respondent No.2.
Ratio Decidendi: The petitioner's belated action and acquiescence to the civil suit, exchange deeds, and compromise debatable whether the petitioner could espouse the cause at such a late stage. The petitioner was a necessary party in the NCLT proceedings, and the unilateral preponement of the date of hearing by respondent No.2 was deprecated.
Final Decision: The writ petition was disposed of, and respondent No.1 was directed to allocate the pending application to another competent officer or to take up the issue itself.
JUDGMENT
Raj Mohan Singh, J. - Prayer made in this application is for placing on record the reply filed by the petitioner dated 31.03.2022 to the application for placing on record affidavit dated 28.03.2022 filed by respondents No.5 to 11.
For the reasons mentioned in the application, the same is allowed. The reply is taken on record, subject to all just exceptions.
CM-4895-CWP-2022 Prayer made in this application is for placing on record Annexure P-25 to Annexure P-29.
For the reasons mentioned in the application, the same is allowed. Annexure P-25 to Annexure P-29 are taken on record, subject to all just exceptions.
Main case
1. Petitioner has preferred this writ petition for the issuance of an appropriate writ, order or direction especially in the nature of certiorari for quashing the award dated 09.12.2016 passed by the Daily Lok Adalat in Civil Suit No.160 of 2016/CS No.2536 of 2016 titled 'Sparash Promoters Pvt. Ltd. And others vs. Cosmo Propbuild Pvt. Ltd. And others' along with all subsequent proceedings arising therefrom. Further a writ, order or direction in the nature of prohibition has also been sought seeking to stay the operation of Award dated 09.12.2016 passed by the Daily Lok Adalat and also directing the respondent No.2 to defer the proceedings pending before the Authority in the context of change of land use. Petitioner has also prayed for issuance of mandamus directing respondent No.1 to submit an inquiry report with regard to entry of mutations and the conduct of contesting respondents while entertaining the licence application.
2. Petitioner is a Company duly incorporated in terms of Companies Act, 1956. M3M India Limited (respondent No.5) is a holding company. Subsidiary group of companies are Nourish Developers Pvt. Ltd. (respondent No.6), Cosmo Propbuild Pvt. Ltd. (respondent No.7), Surya Propcon Pvt. Ltd. (respondent No.8), Neer Builders Pvt. Ltd. (respondent No.9), Vibrant Infratech Pvt. Ltd. (respondent No.10) and Starcity Realtech Pvt. Ltd. (respondent No.11). EMAAR India Ltd. is the holding company. Subsidiary group of companies are Sparsh Promoters Private Limited (respondent No.13), Sandesh Buildcon Private Ltd. (respondent No.14) and Sidhant Building Private Ltd.(respondent No.15). Similarly the petitioner i.e. MGF Developments Ltd., is also the holding company.
3. The dispute of the petitioner/MGF Developments Ltd., is with M3M India Ltd. (respondent No.5) and its subsidiary companies i.e. respondents No.6 to 11, who are trying to obtain licence qua the land parcels for which the petitioner claims to have exclusive right of usage and development as per the demerger order dated 08.01.2018 corrected on 16.07.2018 passed by the National Company Law Tribunal, Principal Bench, New Delhi (hereinafter to be referred as 'the NCLT'). Petitioner claims that there is no dispute with respondents No.13 to 15 or their holding company EMAAR India Ltd. However, since the award dated 09.12.2016 has been obtained in their names, therefore, they are being impleaded as proforma respondents.
4. The impugned award passed by the Daily Lok Adalat, Gurugram is between proforma respondents No.13 to 15 on the one hand and respondents No.7 to 11 on the other hand. Names of respondents No.13 to 15 are incorporated in the column of ownership in the revenue record. Under the demerger order dated 08.01.2018 corrected on 16.07.2018, respondents No.13 to 15 were under legal obligation to act as per instructions of the petitioner. Petitioner being the beneficiary has an exclusive right to use and develop the land parcels and the petitioner has direct and substantial interest in the litigation. Petitioner further claims that writ is maintainable in view of law laid down by the Hon'ble Apex Court in State of Punjab vs. Jalour Singh, (2008) 2 SCC 660 and Bhargavi Construction & Anr. vs. Kothakapu Muthyam Reddy & Ors., 2017 SCC Online SC 1053.
5. It has been pleaded that during statutory demerger, the petitioner received usage and developmen
AI
The court emphasized the necessity of the petitioner as a party in the NCLT proceedings and deprecated the unilateral preponement of the date of hearing by respondent No.2.
An application under Order 23 Proviso to Rule 3 read with Section 151 CPC is not maintainable if there is a pending suit between the parties, which raises identical issues as the application.
Point of Law : Challenge to the award of Lok Adalat can be done only by filing a writ petition under Article 226 and/or Article 227 of the Constitution of India in the High Court and that too on very....
Challenges to compromise decrees based on fraud must be made in the court that issued the decree, and such allegations require substantial proof.
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The absence of the complainant's consent in a Lok Adalat compromise invalidates the award, as statutory requirements for notice and participation are fundamental to upholding justice and preventing f....
Lok Adalat compromise decrees, though final under Section 21, can be set aside in writ jurisdiction if vitiated by fraud like non-service of summons and misrepresentation to illiterate disabled party....
The Lok-Adalat can settle disputes not included in pending suits, and non-registration of an award does not invalidate it.
(1) Agreement to sell does not confer any title or ownership qua immovable property in favour of a person.(2) Agreement to sell does not confer any title or ownership qua immovable property in favour....
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