2020 (1) TMI 1514 - HC - Indian Laws

Dishonor of Cheque - whether the defendants have dealt with the property in any manner whatsoever to the detriment of the plaintiff and/or have mortgaged the same or created any third party rights in the same? - Order XII Rule 6 of the CPC - HELD THAT - The counsel for the defendants states that the defendants have not done any such thing. The defendants are bound by the aforesaid statement and which if found to be erroneous shall make the defendants liable for contempt of the Court. The counsel for the defendants also states that the defendants will agree to the declaration as null and void of the Sale Deed before the Ghaziabad Court or before any other forum and shall in furtherance thereto do all other things as the defendants may be required to do and if the property has been mutated from the name of the plaintiff to the name of the defendants shall also have the mutation reversed. The suit filed by the plaintiff for recovery of Rs. 8 crores from the defendants is found to be misconceived and is dismissed.

Summary

Issues:
Recovery of Rs. 8 crores with interest under Order XXXVII of CPC, Grant of leave to defend, Counter-Claim for recovery of Rs. 2 crores, Application under Order XII Rule 6 of CPC, Interpretation of Sale Deed, Ownership transfer, Contingent contracts, Declaration of Sale Deed as null and void, Entitlement to relief, Possession of property, Contempt of Court, Mutation of property, Dismissal of suit, Success of Counter-Claim, Interest on claim, Decree issuance, Handing over of Sale Deed.

Recovery of Rs. 8 crores with interest:
The plaintiff filed a suit under Order XXXVII of CPC against defendants for recovery of Rs. 8 crores with interest, alleging non-payment despite issuance of post-dated cheques. The suit progressed with summonses for appearance issued and leave to defend granted to defendants.

Counter-Claim for recovery of Rs. 2 crores:
Defendants filed a Counter-Claim seeking recovery of Rs. 2 crores paid as part sale consideration. The Court noted completion of pleadings in both the suit and Counter-Claim.

Interpretation of Sale Deed and Ownership transfer:
The Sale Deed specified that if post-dated cheques were dishonored, the Sale Deed would be considered cancelled. The Court analyzed Section 55(4)(b) of TP Act, emphasizing ownership transfer upon encashment of cheque, not just registration of Sale Deed. The Court cited relevant case laws to support the interpretation.

Declaration of Sale Deed as null and void:
Defendants argued Sale Deed nullity in a separate suit, challenging the existence of consideration. Plaintiff's denial of the suit's nature conflicted with the filed plaint in Hindi. The Court found the plaintiff's actions contradictory, leading to dismissal of the recovery suit.

Possession of property and Contempt of Court:
Defendants expressed willingness to disclaim rights and return possession to plaintiff. Court deferred adverse orders pending further proceedings and ensured defendants' compliance to prevent contempt.

Mutation of property and Dismissal of suit:
Defendants agreed to declare Sale Deed null and void in Ghaziabad Court and reverse mutation if required. Consequently, the recovery suit was deemed misconceived and dismissed.

Success of Counter-Claim and Interest on claim:
Court ruled in favor of Counter-Claim, awarding defendants Rs. 2 crores with 10% interest after 60 days. Plaintiff's failure to claim compensation for breach affected the interest entitlement.

Decree issuance and Handing over of Sale Deed:
A decree was passed in favor of defendants for Rs. 2 crores with interest, and defendants were directed to hand over the original Sale Deed. Each party was to bear its costs as per the judgment.