Vishal Metal And Mining Ltd. vs Rakesh Pirogiwal And Ors.

This is a claim for money paid by the plaintiff / petitioner to the defendant no.3 at the instance of the defendant nos.1 and 2 for purchase of a sawmill

located in Arunachal Pradesh of which the defendant no.4 is a substantial share-holder. The claim of the plaintiff/petitioner proceeds on the basis of

an amount of Rs.14.14 crores being given for the sawmill in 2019 after which the plaintiff/petitioner would be in possession of the said mill.

The document which forms a basis of the claim is a reply given by the defendant no. 4 which is a Consortium and also speaks for defendant nos.7 and

The document is a reply to a letter of demand issued by the plaintiff to the defendant no.4 on 7th January 2021 for the sum of money paid to the

defendant no.3 for handing over the property to the plaintiff. The letter of demand mentions that the defendant no.4 is the majority partner of the

defendant no.3. The reply to this letter which is contained in an e-mail of 1st February, 2021, according to learned counsel appearing for the petitioner,

contains a clear admission of the money being received by the defendant nos.1 and 2 from the petitioner. The letter also states that the money

received has been rotated through the defendant no.3, which is an NBFC controlled by the defendant nos.1 and 2. The partnership pattern of the

defendant no.4, as tabulated in the letter, indicates that the defendant nos.7 and 8 hold substantial shares in the defendant no.4.

Learned counsel for the petitioner submits that since the concerned transaction for purchase of the project failed, the petitioner is no longer interested

in purchasing the saw-mill and the only relief sought at this stage is refund of the money given to the defendant no.3 for purchase of the saw-mill.

The defendants speak in different voices in their defence to the claim. The case of the defendant nos.4,7 and 8 is that the defendant nos.1 and 2

control defendant nos.5 and 6 and that the agreement which forms the basis of the claim was between the plaintiff and the defendant nos.1 and 2. It is

submitted that there is admittedly no agreement for the transaction in question between the plaintiff and the defendant nos. 5, 6, 7 and 8.

Learned counsel appearing for the defendant nos.1, 2 and 4 (although defendant no.4 is also represented by another counsel) submits that the money

was paid to the defendant no.3 for a property which was partially owned by the defendant no.4 and that interim relief should not be given to the

plaintiff since there is substantial delay from the time the money was paid to the time the plaintiff approached this Court. Counsel submits that the

plaintiff is an unsecured creditor and further that there is no document to support the facts pleaded in the plaint or the application.

The stand of the defendant no.3 is that the petition suffers from suppression of facts. Counsel submits that the petitioner has already received Rs.3.90

crores as refund which has been mentioned in the petition. It is also submitted that there is no reference to the defendant no.4 in the relevant

paragraphs of the petition even though the transaction was for purchase of a property which is substantially owned by the defendant no.4. It is also

submitted that the money was given in 2019 before the petitioner company was incorporated in 2020 and further that the subject matter of the suit

may not fall under the definition of commercial dispute under Section 2(1)(c) of The Commercial Courts Act, 2015.

Upon hearing learned counsel appearing for the parties, this appears to be a case where money was admittedly paid by the petitioner for purchase of a

property which did not fructify and the petitioner now intends to get the money back. From the submissions made on behalf of the defendants, there

appears to be an attempt to fudge the primary issue of money being paid to the defendant no.3 and routing it through some of other defendants by

referring to complicated shareholding patterns of the defendants and controlling interests of some of the defendants over the other defendant

companies. This cannot divert the focus from the document dated 1st February, 2021 from the defendant no.4 on behalf of the defendant nos.1 and 2

which clearly records that the defendant nos.1 and 2 received money from the petitioner which was “rotatedâ€​ through the defendant no.3 which is

in the control of defendant nos.1 and 2. There is no response to this letter on record and none of the defendants have shown any document disputing

the statements made in this letter. The refund which the petitioner apparently received towards the money paid amounting to Rs.3.90 crores,

according to the defendant no.3, is disputed matter and can only be ascertained at the time of affidavits. However, there is no answer to the balance

amount which was admittedly received by the defendant nos.1 and 2 and in turn by the defendant no.3. The relevant paragraph in the application also

supports the aforesaid facts.

Harleen Jairath vs. Prabha Surana and Another : (2019) 4 CHN 412, a Division Bench decision of this Court, held that an order of injunction or

attachment can be passed at the ad interim stage in a money claim if circumstances so warrant. Raman Tech. & Process Engg. Co. vs. Solanki

Traders : (2008) 2 Supreme Court Cases 302, was a case on Order 38 Rule 5 of The Code of Civil Procedure, 1908. The petitioner in the present

case is not seeking any order of attachment of the defendants’ property akin to the drastic nature of relief which is contemplated under Order 38

Rule 5, which in any event cannot be decided without affidavits. Having gone through the relevant facts and submissions, this Court is of the view that

until the matter is heard out on affidavits, the petitioner is entitled to a measure of interim protection. There shall accordingly be an order restraining

the defendant nos. 1, 2 and 3 from dealing with or disposing of or in any manner encumbering the fixed and other assets detailed in paragraph 6 of the

application without leave of the Court.

Since the cause of action pleaded in the plaint arises from a commercial transaction relating to immovable property, the dispute would fall under a

‘commercial dispute’ under the provisions of the 2015 Act and this Court would hence have jurisdiction to hear the matter.

Let affidavit-in-opposition be filed within two weeks from date, reply within a week thereafter. List this matter after three weeks.

Supplementary affidavit of the petitioner has been taken on record.