IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO(S). 4266-4267 OF 2018

ATCOM TECHNOLOGIES LIMITED …..APPELLANT(S)

VERSUS

Y.A. CHUNAWALA AND CO. & ORS. …..RESPONDENT(S)

JUDGMENT
A.K. SIKRI, J.

The benefaction seductiveness is filed impugning a final visualisation and sequence antiquated Nov 21, 2016 inspected by a High Court of Judicature during Bombay in Commercial Appeal No. 33 of 2016 in Notice of Motion No. 1211 of 2015 in Suit No. 3813 of 2000 with Notice of Motion No. 1706 of 2016 in Appeal No. 420 of 2016 in Notice of Motion No. 1211 of 2015 in Suit No. 3813 of 2000, whereby a High Court has discharged a seductiveness filed by a appellant severe a sequence antiquated Mar 15, 2016 inspected by a schooled Single Judge in Notice of Motion No. 1211 of 2015 in Suit No. 3813 of 2000.

Signature Not Verified Digitally sealed by NIDHI AHUJA Date: 2018.05.08

2. The Notice of Motion filed by a respondents was for 13:44:11 IST Reason:

condonation of check in filing a created statement. Delay was of 15 years and 54 days (though according to a appellant it is 14 years and 166 days). The schooled Single Judge condoned a check vide sequence antiquated Mar 15, 2016 with a cost of Rs.5 lakhs that was systematic to be paid by a respondents to a appellant. Aggrieved by a pronounced sequence condoning such an lavish delay, a appellant elite seductiveness before a Division Bench that has endorsed a sequence inspected by a Single Judge and discharged a seductiveness of a appellant.

3. The brawl between a parties is with courtesy to a impost allegedly payable by a respondents to a appellant of about Rs.11.9 crores with additional seductiveness as per a details of explain annexed to a suit. According to a appellant and as per a arrangement between a parties, a respondents have unsuccessful and neglected deliberately with distant motives and mala fide intentions to reinstate a income or handover possession of certain flats in a building named ‘Emerald Court’ situated during Andheri (E) in Mumbai in honour of that Agreements for Sale have been executed.

4. The box set adult by a appellant is rather like this:

(a) It might be mentioned that respondent Nos. 1, 3 and 4 are a owners of a parcel of land admeasuring 30,262 sq. mtrs. situated during Village Kondivita, Ramkrishna Mandir Marg, Andheri (E), Mumbai (hereinafter referred to as a ‘Kondivita Plot’). Respondent No. 1 and respondent No. 2 (partner of M/s. Shree Siddhivinayak Developers Ltd.) entered into an agreement whereby respondent No. 2 was available to rise a Kondivita Plot by constructing buildings and sell a premises on tenure basis. Memorandum of Understanding was executed between M/s. Shree Siddhivinayak Developers Ltd. and ATCO Securities and Finance Ltd. (sister regard of a appellant – now famous as Kimaya Wellness Ltd.) (hereinafter referred to as a ‘appellant’s sister concern’) pursuant to that appellant’s sister regard was postulated growth and selling rights of 2,00,000 sq. ft. FSI in a skill to be assembled on a square and parcel of land temperament S. No. 3(P) and 4(P) CST No. 5P and 6 admeasuring 26,033 sq. mtrs. and offer S. No. 3(P) CST No. 5(P), 6(P) and 7(P) admeasuring 7,341 sq. mtrs. of a Revenue Village Kopri, Powai Road, Taluka Kurla within Greater Bombay (hereinafter referred to as a ‘Kopri Plot’) for a care of Rs.44,00,00,000/- (Rupees Forty Four Crores) only.

Earlier Kimaya Wellness Ltd. name was ATCO Securities and Finance Ltd. The name was subsequently altered to Saral Disha Investments Ltd. and again a pronounced name altered to Kimaya Wellness Ltd.

(b) Pursuant to a MOU antiquated Dec 20, 1995, appellant’s sister regard modernized a sum of Rs.14,23,50,000/- (Rupees Fourteen Crore Twenty Three Lakhs Fifty Thousand) usually to M/s. Shree Siddhivinayak Developers Ltd. All a payments are done by correct banking channels. Thereafter, a Tripartite Agreement antiquated Apr 1, 1996 was executed between a appellant, appellant’s sister regard and M/s. Shree Siddhivinayak Developers Ltd. whereby it was concluded that a growth and selling rights underneath a MOU antiquated Dec 20, 1995 would be common equally between a appellant’s sister regard and a appellant. It was offer concluded that out of a sum of Rs.14,23,50,000/- already modernized by appellant’s sister regard to M/s. Shree Siddhivinayak Developers Ltd., 50% would be treated as carrying been modernized by a appellant and a remaining 50% would be treated as carrying been modernized by a appellant’s sister concern. It was followed by MOU antiquated May 30, 1996 between a appellant and M/s. Shree Siddhivinayak Developers Ltd. per a terms of a aforesaid Tripartite Agreement antiquated Apr 1, 1996.

(c) As per a appellant, in Dec 1996, by mutual consent, parties cancelled a pronounced Tripartite Agreement antiquated Apr 1, 1996.

(d) Various offer papers were executed between a parties and it is not required to give minute exegesis thereof. Suffice is to state that as per a chronicle of a appellant, it was concluded that out of Rs.7,11,75,000/- modernized by a appellant to M/s. Shree Siddhivinayak Developers Ltd., Rs.3,77,30,000/- would be practiced towards purchased care for 11 flats that would be purchased by a appellant in a building famous as ‘Emerald Court’ during a Kondivita Plot. The change volume of Rs.3,34,45,000/- was concluded to be refunded by M/s. Shree Siddhivinayak Developers Ltd. to a appellant. This arrangement was on comment of M/s. Shree Siddhivinayak Developers Ltd. expressing their inability to repay a appellant entirely. However, even when some additional amounts were paid towards a aforesaid flats, a respondent No. 2 unsuccessful to broach a 11 flats in honour of that agreement was entered into. The appellant and respondent No. 2 has also entered into 12 apart purebred Agreements for squeeze of 12 some-more flats. According to a appellant, these flats were also not delivered.
(e) To cut a prolonged story short, it is sufficient to note that when a possession of a flats was not delivered, a appellant demanded behind a volume paid to respondent No. 2. According to a appellant, a volume paid was not refunded. It led to filing of a following 3 cases:

(i) Summary Suit No. 4870 of 1999 by a sister regard of a appellant in a High Court of Judicature during Bombay seeking direct of Rs.4,91,60,000/- along with seductiveness @18% p.a.

(ii) Suit No. 3813 of 2000 by a appellant in a High Court of Judicature during Bombay for direct in a sum of Rs.7,88,90,000/- along with seductiveness @18% p.a.

(iii) M/s. Shree Siddhivinayak Developers Ltd. (respondent No. 2) and a all partners also filed fit No. 305/2001 conflicting Saral Disha Investment Limited (sister regard of a appellant).

5. Various developments that took place in these 3 suits need not be remarkable solely that in Notice of Motion taken out by a appellant in a suit, Court Receiver was allocated to take earthy possession of 23 flats in ‘Emerald Court’. Further, umbrella leave to urge was postulated to a respondents in Suit No. 4870 of 1999 vide sequence antiquated Mar 16, 2002 and a Court also destined that all a 3 suits shall be attempted together. When these suits were listed for conference before a Single Judge on Jan 29, 2015, it was beheld that no created matter was filed in Suit Nos. 4870 of 1999 and 3813 of 2000 filed by a appellant’s sister regard and appellant respectively. The Court shelved a box to Feb 12, 2015 for ex-parte decree. These cases were again shelved and came adult for conference on May 06, 2015 on that date sequence was inspected recording that created matter in these dual suits was nonetheless to be filed. Cases were shelved to Jun 22, 2015. When a things complacent during that stage, respondent No. 2 filed Notice of Motion No. 1212 of 2015 in Suit No. 4870 of 1999 on Jul 24, 2015 seeking environment aside of sequence antiquated Jan 29, 2015 and offer sought condonation of check of 13 years and 41 days in filing a created statement. Likewise, Notice of Motion No. 1211 of 2015 was also filed in Suit No. 3813 of 2000 seeking condonation of check of 5 years and 54 days in filing a created matter (though as per a appellant, check was 14 years and 166 days).

6. Notice of Motion No. 1212 of 2015 in Suit No. 4870 of 1999 was taken adult for conference and vide sequence antiquated Oct 28, 2015, it was discharged by a schooled Single Judge who refused to acquit a check with, inter alia, following observations: “4. It is apparent from a confirmation in support of Notice of Motion that a defendants had totally and intentionally neglected a proceedings.

The contribution of a box on palm divulge obvious lavish check on a partial of a defendants and as such attracts a doctrine of prejudice. The check is to a border of totally ignoring a proceedings. Taking a magnanimous perspective of such sum contribution would volume doing misapplication to a plaintiff and permitting reward on a loosening of a defendants.”

7. Intra-Court seductiveness was filed by a respondents conflicting a pronounced sequence before a Division Bench of a High Court that was also discharged by a Division Bench on Jan 6, 2016 holding that ‘the Defendants had totally and intentionally neglected a proceedings’. It would be impending to discuss during this theatre that Special Leave Petition was filed severe a sequence of a Division Bench antiquated Jan 6, 2016 (SLP No. 28775 of 2016) has been discharged by this Court on Sep 4, 2017.

8. Insofar as Notice of Motion No. 1211 of 2015 in Suit No. 3813 of 2000 is concerned, it resulted in altogether conflicting outcome. The schooled Single Judge inspected a sequence antiquated Mar 15, 2016 permitting a same thereby condoning a check in filing a created matter with a deception of cost of 5 lakhs on a respondents. The reason given by a schooled Single Judge was that compartment a year 2009, Writ of Summons had not been served on a respondents and, therefore, a check was of 5 years and 54 days and was condoned on a belligerent that a appellant also took series of years in portion a summons on a respondent. Appeal conflicting this sequence filed by a appellant has been discharged vide impugned sequence antiquated Apr 18, 2016 affirming a sequence of a schooled Single Judge. The whole logic in support of this sequence is contained in para 5 of a visualisation of a High Court that reads as under:

“5 In a impugned order, a schooled Judge has reserved reasons. He has found from a record and a affidavits placed, that even a Appellant / Plaintiff did not take any petrify steps. In a fit filed in a year 2000, a command of summons was not prepared and served compartment 2009. In divide 6 of a impugned order, a reason that a command of summons was served soon has not been accepted. The schooled Judge has found that a command of summons was not served for a duration of 9 years after establishment or filing of a suit. In such resources an altogether perspective of a matter was taken and by balancing a rights and equities, a schooled Judge has postulated a ask of a Respondents to concede them to record a Written Statement and urge a fit / explain on merits. In a process, a schooled Judge has relied on good staid element that all procedural manners are handmaids of justice. So prolonged as there is no lost detriment or influence or a box done out of malafides usually a celebration should be authorised to urge authorised record is a sequence invoked and applied, then, we do not cruise that in a contribution and resources of a benefaction case, a focus of such sequence can be faulted. Once a rights and equities have been balanced, then, we do not cruise that in offer appellate office such an sequence deserves interference. The Appeal is abandoned of merits and is dismissed. By agree of parties, a time to take investigation of a papers and finish pretrial formalities is extended by 8 weeks.”

9. As is transparent from a above, a business that weighed with a High Court in condoning a check was that nonetheless a fit was filed in a year 2000, summons were served usually in a year 2009. Plea of a appellant that summons were indeed served in a year 2000 itself was not accepted. On this basis, a High Court came to a end that given appellant itself took time of 9 years after establishment or following of a suit, to offer a summons on a respondents herein, equities were offset by permitting a respondents to record a created statement, some-more so, when no lost detriment or influence was caused to a appellant and no box of mala fides was done out conflicting a respondents.

10. Notice in a Special Leave Petition was released on Jul 18, 2017 that was duly served on all a 5 respondents. However, nothing of a respondents have entered appearance. Accordingly, a Registry processed a matter for inventory before a Court and it was listed for conference on Mar 26, 2018. On that day also, nobody seemed on interest of a respondents. Still in sequence to give one some-more opportunity, a matter was destined to be listed after 3 weeks. It again came adult for conference on Apr 20, 2018. Since respondents unsuccessful to seem in annoy of all a aforesaid chances given to them, this Court is left with no choice yet to ensue ex-parte conflicting a respondents and listened a matter in their absence.

11. Mr. Amar Dave, schooled warn appearing for a appellant submitted that a reason given by a High Court in condoning a check was totally erring inasmuch as Writ of Summons were served on a respondents immediately after a filing of a fit and not in a year 2009 as mentioned. It was offer argued that, in any case, even if when a summons were served in a year 2009, there was no acceptable reason submitted by a respondents seeking condonation of check that was some-more than 5 years 54 days even on counting a duration from a year 2009. He also submitted that a High Court unsuccessful to notice that, on matching grounds, Notice of Motion No. 1212 of 2015 in Suit No. 4780 of 1999 for condonation of check in filing a created matter was filed by a respondents that was discharged by a schooled Single Judge and that sequence was endorsed by a Division Bench (and now even by this Court). While traffic with a benefaction matter, a High Court unsuccessful to cruise those orders inspected by a prepare Benches.

12. We find force and due consequence in a aforesaid submissions of a schooled warn for a appellant.

13. We shall ensue on a basement that summons in Suit No. 4870 of 1999 were served usually in a year 2009. In this behalf, it might be settled that in this suit, umbrella leave to urge was postulated by a schooled Single Judge on Mar 16, 2002. By a same order, all 3 suits were destined to be attempted together. Therefore, Vakalatnama in a fit was also filed and on a dates bound before a Court, respondents were appearing carrying believe about a Suit No. 4870 of 1999 as well. Obviously, this leave to urge was postulated after a respondents had put in coming and filed focus for extend of leave to defend. Thus, summons in a fit were served on a respondents, albeit, in Form 4 of Appendix B, as stipulated in Rule 2 of Order XXXVII of a Code of Civil Procedure, 1908. May be, thereafter, Writ of Summons were not served again on a respondents. However, in any case, these summons were served in a year 2009. Therefore, it was obligatory on a respondents to uncover as to in what demeanour they were prevented from filing a created statement.

14. It has to be borne in mind that as per a supplies of Order VIII Rule 1 of a Code of Civil Procedure, 1908, a suspect is thankful to benefaction a created matter of his counterclaim within thirty days from a date of use of summons. Proviso thereto enables a Court to extend a duration upto ninety days from a date of use of summons for sufficient reasons. Order VIII Rule 1 of a Code of Civil Procedure, 1908 reads as under:

“1. Written statement.- The suspect shall, within thirty days from a date of use of summons on him, benefaction a created matter of his defence: Provided that where a suspect fails to record a created matter within a pronounced duration of thirty days, he shall be authorised to record a same on such other day, as might be specified by a Court, for reasons to be available in writing, yet that shall not be after than ninety days from a date of use of summons.”
15. This sustenance has come adult for interpretation before this Court in series of cases. No doubt, a difference ‘shall not be after than ninety days’ do not take divided a energy of a Court to accept created matter over that time and it is also hold that a inlet of a sustenance is procedural and it is not a partial of concrete law. At a same time, this Court has also mandated that time can be extended usually in unusually tough cases. We would like to imitate a following contention from a box of Salem Advocate Bar Association, Tamil Nadu v. Union of India, (2005) 6 SCC 344:

“21. …There is no limitation in Order 8 Rule 10 that after expiry of ninety days, offer time can't be granted. The probity has far-reaching energy to “make such sequence in propinquity to a fit as it thinks fit”. Clearly, therefore, a sustenance of Order 8 Rule 1 providing for a top extent of 90 days to record created matter is directory. Having pronounced so, we wish to make it transparent that a sequence fluctuating time to record created matter can't be done in routine. The time can be extended usually in unusually tough cases. While fluctuating time, it has to be borne in mind that a legislature has bound a top time-limit of 90 days. The option of a probity to extend a time shall not be so frequently and customarily exercised so as to stop a duration bound by Order 8 Rule 1.”

16. In such a situation, responsibility on a suspect is of a aloft grade to beg and satisfactorily denote a current reason for not filing a created matter within thirty days. When that is a requirement, could it be a belligerent to acquit check of some-more than 5 years even when it is distributed from a year 2009, usually since of a reason that Writ of Summons were not served compartment 2009?

17. We destroy to convince ourselves with this kind of logic given by a High Court in condoning a delay, thereby except a supplies of Order VIII Rule 1 of a Code of Civil Procedure, 1908 and a suggestion behind it. This reason of a High Court that check was condoned ‘by balancing a rights and equities’ is far- fetched and, in a process, aberrant check in filing a created matter is condoned but addressing a applicable factor, viz. either a respondents had furnished correct and acceptable reason for such a delay. The ensue of a High Court is clearly erring in law and can't be countenanced. No doubt, a supplies of Order VIII Rule 1 of a Code of Civil Procedure, 1908 are procedural in inlet and, therefore, palm lassie of justice. However, that would not meant that a suspect has right to take as most time as he wants in filing a created statement, but giving convincing and reasoning reasons for check and a High Court has to acquit it mechanically. It is also to be borne in mind that when a matter was listed on Jan 29, 2015, it was privately available that no created matter was filed and a dual suits were shelved for ex-parte decree. In other fit i.e. Suit No. 3813 of 2000, identical Notice of Motion seeking condonation of check was deserted nonetheless it contained same kind of reason and that sequence has been inspected compartment this Court. On this belligerent also, there was no reason to take a discordant perspective in a benefaction matter when both a suits were taken adult together and ensue simultaneously.

18. We accordingly concede these appeals, set aside a impugned sequence and boot Notice of Motion No. 1212 of 2015.

No cost.

(A.K. SIKRI)
(ASHOK BHUSHAN) NEW DELHI;

MAY 07, 2018.