Hotel Queen Road Private Limited v. Mahashian Dihatti Limited

1. The present appeal, FAO(OS) 452/2013 - by Hotel Queen 2013:DHC:7274-DB Road Private Limited, was directed against the impugned judgment and order of the learned Single Judge dated 30.08.2013, granting leave - to the appellant/defendant - to contest a summary suit under Order XXXVII CPC. The suit was premised upon a loan alleged to have been advanced by Mahashian Di Hatti Limited (hereafter called "the MDHL") to the tune of^4.[5] crores to the appellant sometime in between 06.05.2008 and 05.11.2008.

2. In the impugned order, the learned Single Judge was of the opinion, having considered to the appellant's contention, that the advances were really sham transactions and the underlying purpose was to siphon offtheamounts from the company's coffers atthe time when the rival shareholding group, i.e. R.P. Mittal, was in control. This contention was denied by the respondent/plaintiff which relied upon certain circumstances including the fact that the TDS in respect of the payments made after the present appellants gained control upheld such a contention.

3. This Court has considered the rival submissions and is conscious of the fact that the impugned judgment has granted leave. Clearly, this is a case where the defence set-up is in line with the Supreme Court judgment in Shah Babulal Khimji v. Jayaben. D. Kania and Anr., AIR 1981 SC 1786. Having considered the overall circumstances and in the peculiar facts of the case, this Court is disinclined to disturb the impugned judgment. However, in the circumstances, the appellant would be at liberty to pay or deposit into the Court ?60 lakhs in compliance with the impugned order and also ftimish a guarantee and the personal guarantee of its MD, Sh. Ashok b Mittal. These conditions shall be complied within four weeks from today for the purpose of which parties are directed to appear before the Registrar on 08.01.2014.

4. Learned senior counsel urgedthat the condition imposed by the learned Single Judge with respect to the utilization of interest on the amount of^10 crores deposited bythe appellant on 23.01.2012 ought to be varied since the Company Court had granted liberty to utilize such amounts. It is pointed out that this condition or restriction was made in the suit filed by Ms. Prema Singh where the learned Single Judge granted unconditional relief. The Court is of the opinion that the argument that such a restriction is unwarranted is without merit. The learned Single Judge made this observation apparently having regard to the overall circumstances of the case and especially in the case of Company Court expressly leaving the subject matter - with respect to utilization of interest - to the discretion of the learned Single Judge trying the suits as is evident from the reading of the order of the Company Court dated 23.01.2012 which is part of the record of this case. In the circumstances, this Court is disinclined to issue a clarification or grant liberty as is sought. FAO(OS) 472/2013. C.M. APPL.16571/2013. 16572/2013 & 17923/2013

5. After some hearing, learned counsel sought liberty to withdraw the appeal. The appeal along with pending applications are accordingly dismissed as withdrawn inview ofthe orders made today inFAO(OS) 452/2013. Furthermore, the Court is ofthe opinion that even otherwise, the learned Single Judge consciously imposed the condition of deposit of ?1.15 crores, dealt with FAO(OS) 452/2013, having regard to the overall circumstances.

S. RAVINDRA BHAT, J

NAJMIWAZIRI,J DECEMBER 09,2013 'ajk'