Full Text
HIGH COURT OF DELHI
THE UNIWORLD GARDEN APARTMENT OWNERS ASSOCIATION ..... Plaintiff
Represented by: Mr. Jatin Mongia, Mr. Rohan Sharma and Mr. Raghav Kakkar, Advocates.
1405/2017 (under Section 8 of the Arbitration and Conciliation Act, 1996)
JUDGMENT
1. Plaintiff has filed the present suit under Order XXXVII inter alia seeking a recovery of a sum of ₹17,76,64,952/- along with interest @18% per annum from the defendant on the basis of unequivocal and written admissions on part of the defendant about its liability to hand over the Interest Bearing Maintenance Security (in short ‘IBMS’) to the plaintiff association once the association is formed. The said IBMS had been collected by the defendant from the individual apartment owners and was to be handed over when the association was formed to take over the maintenance of the apartment complex. It is the case of the plaintiff that 2018:DHC:189 though the plaintiff was formed in the year 2006, the plaintiff was prevented from taking over of the complex due to failure of the defendant to complete the complex in all respects in time and thereafter as well despite repeated requests to hand over the possession after the complex was equipped with all basic and essential facilities.
2. The plaintiff inter alia relies upon the admissions of the defendant vide its email dated 24th January, 2009 enclosing the IBMS amount @8.25% as on 31st December, 2008; defendant’s letter dated 5th April, 2011 responding to the plaintiff’s letter dated 18th March, 2011 admitting the liability to hand over IBMS amount; handing over letter dated 20th August, 2013 enclosing the IBMS amount with interest @8.25% till 31st August, 2013; balance sheet of the financial year 2012-13 and 2013-2014 and affidavit of defendant dated 11th March, 2015 filed in Company Petition No.513/2004. Reliance is placed on the decisions reported as AIR 1999 Bom 340 BOI Finance Limited vs. Padma Alloy Casting Private Limited & Ors., 2001 (1) Mh.L.J. 687 R. Kumar & Co. vs. Chemicals Unlimited AIR 2003 and Bom 168 Sun N Sand Limited vs. V.V. Kumar.
3. Responding to the plea of defendant that there is an arbitration clause in the Agreement to Sell it is contended that the plea ought to have been taken as part and parcel of the leave to defend application and not by way of separate application under Section 8 of the Arbitration Act. It is claimed that the plaintiff association is a society registered under the Societies’ Registration Act, 1860 thus a separate legal entity, independent of its individual apartment owners, hence any arbitration agreement entered between the members would not be binding on the plaintiff association. Reliance is placed on the decisions reported as AIR 1946 Bom 516 Satyavart Sidhantalankar & Ors. vs. Arya Samaj, Bombay, AIR 1958 AP 773 Pamulapati Buchi Naidu College Committee vs. Govt. of A.P. & Ors. and AIR 1970 Pat 163 K.C. Thomas vs. R.L.Gadeock & Anr.
4. In the alternative it is also submitted that money was deposited by the individual members of the plaintiff association in terms of Clause 5 of the Maintenance and Service Agreement (in short ‘M & S Agreement’) which agreement did not contain an arbitration clause. As regards the contention relating to rate of interest the same can be as per the prevailing bank rate and mere non-mentioning of rate of interest will not be a triable issue requiring grant of leave to defend. No substantial defence having been raised in terms of the decision reported as 2017 (1) SCC 568 IDBI Trusteeship Services Ltd. vs. Hubtown Ltd. the applications are liable to be dismissed and the suit be decreed. Reliance is further placed on the decisions reported as AIR 2002 Bom 481 Suraj Sanghi Finance Ltd. vs. Credential Finance Ltd. & Ors., AIR 2003 Bom 92 Motorola India Limited vs. Kiklu I. Malani and AIR 2003 Bom 111 Leela Capital and Finance Ltd. vs. Modiluft Limited.
5. Responding to the summary suit filed by the plaintiff, the defendant filed two applications being I.A. No. 1404/2017 under Order XXXVII Rule 3 (5) CPC seeking leave to defend and I.A No. 1405/2017 under Section 8 of the Arbitration and Conciliation Act (in short ‘Arbitration Act’).
6. In the applications it is claimed that by virtue of Section 8 of the Arbitration Act being applicable, the suit is incompetent and not maintainable. The suit of the plaintiff is premised on Clause 3.[5] of the Agreement to Sell dated 25th August, 2004 executed by a flat owner with the defendant and as per Clause 11.[2] of the said Agreement to Sell all disputes, difference and disagreements arising out of/in connection with/or in relation to this Agreement have to be decided by arbitration. In terms of Agreement to Sell parties executed Maintenance Agreement dated 15th October, 2006 which records having been executed in terms of the requirement contained in the Agreement to Sell. The members of the plaintiff company deposited towards the ‘sinking fund’ as prescribed by Clause 3.[5] of the Agreement to Sell. Thus for all purposes the Agreement to Sell is the primary document establishing the rights and obligations of each party and subsequent Maintenance Agreement is secondary/ancillary to the Agreement to Sell merely recording the details/particulars to be completed by each party. The primary document, that is, Agreement to Sell containing the arbitration clause all disputes in relation to all subsequent agreements will have to be decided by arbitration. The formation of association is envisaged by Clauses 3.[1] and 3.[5] of the Agreement to Sell besides Clauses 5 and 6 of the Maintenance Agreement. The association is merely a culmination of various individual flat owners with commonality of interest and thus are permitted to be sued through the association. Every correspondence between the parties being in terms of the Agreement to Sell, there exists no privity of contract or relationship between the association and the defendant. The association does not enjoy any independent status dehors the Agreement to Sell and/or Maintenance Agreement. Section 8 of the Arbitration and Conciliation Act prohibits/debars the continuance of any such civil proceedings. Reliance is placed on the decisions reported as 2000 (4) SCC 539 P. Anand Gajapathi Raju & Ors. vs. P.V.G. Raju, 2007(3) SCC 685 Agri Gold Exims Ltd. vs. Sri Lakshmi Knits and Wovens and Ors., 2006 (7) SCC 275 Rashtriya Ispat Nigam Limited and Anr. vs. Verma Transport Company and 2015 (14) SCC 444 Sundaram Finance Limited and Ors. vs. T. Thankam.
7. The application under Section 8 of the Arbitration Act having been filed this Court is duty bound to first decide the said application and would go on the merits of the dispute only after dismissing the said application. Reliance is placed on 2009 (4) SCC 585 Sunder Kukreja and Ors. vs. Mohan Lal Kukreja and Anr., 194 (2012) DLT 143 Ultra Home Constructions (P) Ltd. vs. Choice Hotels International Inc. & Ors. and 199 (2013) DLT 275 M/s. Damco India Private Ltd. vs. M/s. Samtel Glass Limited & Ors. It is also contended that the present suit cannot be entertained being beyond the territorial jurisdiction of this Court.
8. Before proceeding to deal with the rival contentions of the parties it would be appropriate to note the relevant Clauses of the Agreement to Sell dated 25th August, 2004, entered into between the defendant and one of the members of the plaintiff the other Agreements to Sell also being similar: “ARTICLE 3 MAINTENANCE. 3.[1] The Purchaser hereby agrees and undertakes that it shall enter into a separate Maintenance Agreement with the maintenance agency appointed or nominated by the Developer for the maintenance of the Complex and the Common Services in the Complex. The Purchaser agrees to pay the charges as mentioned in the Maintenance Agreement. The Purchaser hereby undertakes to comply with all the terms and conditions stipulated in the Maintenance Agreement. The Purchaser undertakes to become a member of the Apartment Owners Association and shall continue to pay the maintenance charges as determined by the said association from the date the same is handed over to it. 3.[2] That the scope of maintenance and general upkeep of various common services within the building shall broadly include operation and Maintenance of lifts, operation and Maintenance of Generators including Diesel, Maintenance of fir fighting system, Garbage disposal and upkeep of common areas Water supply, Sewerage System, Common area lighting. The Services outside but within the Complex, shall broadly include Maintenance and upkeep of internal roads, pathways, boundary walls/fencing, Parks and Horticulture, External Sewerage and drainage system. Street Lighting, Water Supply, General Watch and ward of the complex. 3.[3] That the indicative Maintenance charges at the time of giving the possession of the Apartment would be approx. ₹ 1.25 per sq. ft. per month. The Purchaser shall pay the necessary charges for maintenance of common service and facilities as may be determined by the Developer and/or its nominated maintenance Agency from time to time. In case of delay/failure in making the payment of maintenance charges, interest @ 18% shall be charged on outstanding dues, for the delayed period. 3.[4] That it is understood by the Purchaser that the internal maintenance of the Apartment and also its insurance shall always remain the responsibility of the Purchaser. 3.[5] In addition to the payment of maintenance charges, the purchaser shall pay an Interest Bearing Maintenance Security (IBMS) towards creation of “Sinking Fund”. The interest accrued/earned on the security deposit shall be utilized towards cost of replacement, refurbishing, major repairs of the plants and equipments etc.. Installed in the complex or towards any unforeseen contingency in future. However, on formation of the Association of Apartment owners the balance fund available in this account shall be remitted to the Association.
ARTICLE 10 APPLICABLE LAW AND JURISDICTION 10.[1] This Agreement shall be construed and the legal relations between the Parties hereto shall be determined and governed according to the laws of India. 10.[2] That the Courts at Gurgaon and the Punjab and Haryana High Court at Chandigarh alone shall have the Jurisdiction in all matters arising out of and/or concerning this transaction.
ARTICLE 11 ARBITRATION 11.[1] All disputes, difference or disagreement arising out of, in connection with or in relation to this Agreement shall be mutually discussed and settled between the Parties. 11.[2] All disputes, difference or disagreement arising out of, in connection with or in relation to this Agreement, which cannot be amicably settled shall be finally decided by arbitration of three arbitrators one to be appointed by each party, to be held in accordance with the provisions of the Arbitration and Conciliation Act, 1996. Any arbitration pursuant hereunder shall be a domestic arbitration under the Applicable Law. 11.[3] The Venue of arbitration shall be Gurgaon or such other place as may be mutually agreed between the parties”.
9. Relevant clauses of Maintenance Agreement between members of the association and defendant are as under: “(3) That in consideration of the MAINTENANCE AGENCY carrying out the maintenance of various services had facilities, as enumerated in Clause 2 above, the Owner(s) agrees to pay the maintenance charges amounting to ₹72972.00 (Rupees SEVENTY TWO THOUSAND NINE HUNDRED SEVENTY TWO ONLY) in lump-sum calculated @ ₹1.50/- per. Sq. ft. per month of the Super Area of the Apartment from the date when the actual possession is offered by the SECOND PART i.e. the date mentioned in the Final Notice of Possession till August 31,2008. The Payment(s) shall be made by cheque/draft drawn in favour of “UNITECH REALITY PVT. LTD.
MAINTENANCE ACCOUNT”. (4) …. (5) That in addition to the payment of maintenance charges, the second part shall pay ₹101350.00 (Rupees ONE LAC ONE THOUSAND THREE HUNDRED FIFTY) calculated @ ₹50/per sq. ft. of the Super Area as Interest Bearing Maintenance Security (IBMS) towards creation of “Sinking Fund”. The interest accrued on the security deposit shall be utilized towards cost of replacement, refurbishing, major repairs of the plants and equipments etc. Installed in the complex or any unforeseen occurrence in the future. However, on formation of the Association of Residents, while handling over the operation and maintenance of the complex by Maintenance Agency, the balance fund available in this account shall be remitted to the Association. The payment(s) shall be made by cheque/draft drawn in favour of “UNITECH REALITY PVT. LTD.
SECURITY DEPOSIT ACCOUNT.”. The above said amount shall bear interest as per bank rate prevailing at that time. (6) That the Maintenance Agency shall continue to provide the services upto August 31, 2008 and the Residents shall form an Association/ Society within that period. After completion of above mentioned Maintenance period by the Maintenance Agency, the Resident Association/society, shall take over maintenance of common areas and facilities in the complex. After that, the OWNER(s) shall be responsible for payment of Maintenance charges to the Association/Society at rates as determined by the latter.”
10. Supreme Court in the decision reported as Sundaram Finance Limited (supra) delineating the jurisdiction of the civil court once it is brought to its notice that its jurisdiction has been taken away in terms of the procedure prescribed under the special statute held:
9. The position was further explained in Hindustan Petroleum Corpn. Ltd. v. Pinkcity Midway Petroleums [(2003) 6 SCC 503]. To quote: (SCC pp. 510-11, para 14)
10. …..
11. The attempt of the trial court and the approach made by the High Court in bifurcating the cause of action, is fallacious. It would only lead to delaying and complicating the process. The said issue is also no more res integra. In Sukanya Holdings (P) Ltd. v. Jayesh H. Pandya [(2003) 5 SCC 531: AIR 2003 SC 2252] at paras 16 and 17, it was held as follows: (SCC p. 536)
13. Once an application in due compliance with Section 8 of the Arbitration Act is filed, the approach of the civil court should be not to see whether the court has jurisdiction. It should be to see whether its jurisdiction has been ousted. There is a lot of difference between the two approaches. Once it is brought to the notice of the court that its jurisdiction has been taken away in terms of the procedure prescribed under a special statute, the civil court should first see whether there is ouster of jurisdiction in terms or compliance with the procedure under the special statute. The general law should yield to the special law—generalia specialibus non derogant. In such a situation, the approach shall not be to see whether there is still jurisdiction in the civil court under the general law. Such approaches would only delay the resolution of disputes and complicate the redressal of grievance and of course unnecessarily increase the pendency in the court.
11. The mother agreement in the present case is the Agreement to Sell which provides that any dispute between the parties has to be referred to arbitration. Article 3 of the Agreement to Sell provides in respect of the maintenance for which a further agreement has been entered into for maintenance of the complex (common areas) directly or through its nominated agency.
12. The case of the plaintiff is that there being no arbitration agreement between the plaintiff which is an association registered under the Societies Registration Act, an independent entity and the defendant, it will not be bound by Article 11 of the Agreement to Sell.
13. Thus the issue that arises is whether the plaintiff which is an association of apartment owners duly registered under the Societies’ Registration Act, 1980 is independent of its members and would thus be not bound by the arbitration clause in the Agreements to Sell executed between its members and defendant. It is trite law that a society registered under the Societies Registration Act is a legal persona capable of suing and being sued in the name of its President, Chairman or Principal Secretary or trustees as may be determined by the rules and regulations of the Society. [See: AIR 1962 SC 458 Board of Trustees, Ayurvedic and Unani Tibia College vs. State of Delhi]
14. In the decision reported as AIR 1946 Bom 516 Satyavart Sidhantalankar Vs. Arya Samaj, the High Court noting the distinction between a society registered and its members held:
24. Do these provisions of the Societies Registration Act XXI (21) of 1860 constitute the society as registered with the suing or being sued? Has the society as registered with the from the members constituting the same? It is significant to observe that the members of the society are a fluctuating body. A member of the society is a person who having been admitted therein according to the rules and regulations thereof has paid the subscription or signed the roll of the members thereof and has not resigned according to the rules and regulations. The governing body of the society is the governors, council, directors, committees, trustees or other body to whom by the rules and regulations of the society the management of its affairs is entrusted. The members as well as the governing body are not always the same and that is the reason why it has been necessary to provide that no suit or proceeding in any civil Court shall abate or discontinue by reason of the person by or against whom such suit or proceedings may have been brought or continued dying or ceasing to fill the character in the name whereof he shall have sued or been sued, but the same suit or proceedings shall be continued in the name of or against the successor of such person.
25. Even though the members of the society or the governing body fluctuate from time to time, the identity of the society is sought to be made continuous by reason of these provisions. The identity of the original members and their successors is one. The liability or obligation once binding on the society binds the successors even though they may not be expressly named, and in this the society savours of the character of a corporation. The resignation or the death of a member does not make any difference to the legal position of the society. The increase or decrease of the members of the society similarly does not make any difference to the position. A partnership under similar circumstances would come to an end, but not the society. The society continues to exist and to function as such until the dissolution thereof under the provisions of the Societies Registration Act. The properties of the society continue vested in the trustees or in the governing body irrespective of the fact that the members of the society for the time being are not the same as they were before nor will be the same thereafter. Could it under these circumstances be said that the society by reason of its registration with the apart from the members constituting the same? I am of opinion that by reason of the provisions of the Societies Registration Act, once the society is registered with the Registrar of Joint Stock Companies by the filing of the memorandum and certified copy of the rules and regulations thereof with the the society is registered under the Act, the society enjoys the status of a legal entity apart from the members constituting the same and is capable of suing or being sued.
15. In the decision of the Supreme Court reported as 2003 (5) SCC 531 Sukanya Holdings Pvt. Ltd. vs. Jayesh H. Pandya & Anr. the Supreme Court held that there is no provision in the Arbitration Act that when the subject matter of the suit includes subject matter of the arbitration agreement as well as other disputes, the matter is required to be referred to arbitration. Further there is also no provision in the Arbitration Act as to what is required to be done in a case where some parties to the suit are non-parties to the arbitration agreement. It was held that third parties to the arbitration agreement cannot be subjected to arbitration under Section 8 of the Arbitration Act. Though the three judges bench of the Supreme Court in the decision reported as 2013 (1) SCC 641 Chloro Controls India Private Ltd. vs. Seven Trent Water Purification Inc. referred to Sukanya Holdings (supra) however, did not overrule the same. Thus the legal position would be that a party who has not entered into an arbitration agreement cannot be subjected to arbitration.
16. In view of the discussion above since the plaintiff is an independent legal entity and not a party to the Agreements to Sell entered into between its members and the defendant, it is not amenable to arbitration under Section 8 of the Arbitration Act I.A. No. 1405/2017 under Section 8 of the Arbitration Act filed by the defendant is dismissed.
17. In respect of I.A. No. 1404/2017 under Order XXXVII Rule 3 (5) CPC seeking leave to defend the claim of the defendant inter alia is that this Court has no jurisdiction to adjudicate the present dispute as the parties had agreed Gurgaon as the venue for arbitration as per Clause 11.[3] of the Agreement to Sell, the suit is barred by the limitation as the claim made by the plaintiff is with respect to the cause of action which arose in 2004 whereas present suit has been filed only in the month of August, 2016; the plaintiff has not filed all documents thus, sufficient notice has not been given to the defendant; the present suit is an attempt to harass the defendant as a company petition has already been filed by the plaintiff before this Court and the defendant has already deposited a sum of ₹10.71 crores with the Registry of this Court in Company Petition No. 513/2014, the plaintiff is not entitled to the interest @18% as claimed; the suit is not in respect of liquidated debt and though the plaintiff has filed the suit on behalf of its members however, the procedure prescribed under Order 1 Rule 8 CPC has not been followed.
18. Rebutting the contentions of defendant in leave to defend application learned counsel for plaintiff contends that the summary suit is based on the admissions of the defendant admitting its liability to pay a sum of ₹5,49,98,100/-, that is, the principal amount along with the interest that has accrued thereon calculated on the prevailing bank rate of interest from the date of payment by the members of the plaintiff till 31st July, 2016, that is, immediately prior to the filing of the instant suit being ₹17,76,64,952/-. These admissions are incorporated in a number of documents including the defendant’s emails, letters, balance sheets, affidavit of the defendant in company petition. Since no defence has been raised by the defendant the suit is required to be decreed in favour of the plaintiff as the money usurped by the defendant is for maintenance and upkeep of Uniworld Garden which has deteriorated significantly with rampant sewage, for want of pending repairs etc. This Court has territorial jurisdiction to entertain the suit under Section 20 CPC as the defendant’s registered office is in Delhi. The suit has been instituted within the period of limitation from the date of acknowledgement of the liability. The documents necessary for the proper adjudication of the suit have already been filed. Winding up petition filed before the company court and the suit by a party are two separate legal remedies and there is no bar in law in pursuing both the remedies simultaneously. There is no concealment of material facts.
19. Overruling the decision reported as AIR 1977 SC 577 Mechelec Engineers & Manufacturers vs. Basic Equipment Corporation the Supreme Court has laid down the guidelines for grant of leave to defend in IDBI Trusteeship Services Ltd. (supra) as under: a. If the Defendant satisfies the Court that he has a substantial defence, that is, a defence that is likely to succeed, the Plaintiff is not entitled to leave to sign judgment, and the Defendant is entitled to unconditional leave to defend the suit; b. if the Defendant raises triable issues indicating that he has a fair or reasonable defence, although not a positively good defence, the Plaintiff is not entitled to sign judgment, and the Defendant is ordinarily entitled to unconditional leave to defend; c. even if the Defendant raises triable issues, if a doubt is left with the trial judge about the Defendant's good faith, or the genuineness of the triable issues, the trial judge may impose conditions both as to time or mode of trial, as well as payment into court or furnishing security. Care must be taken to see that the object of the provisions to assist expeditious disposal of commercial causes is not defeated. Care must also be taken to see that such triable issues are not shut out by unduly severe orders as to deposit or security; d. if the Defendant raises a defence which is plausible but improbable, the trial Judge may impose conditions as to time or mode of trial, as well as payment into court, or furnishing security. As such a defence does not raise triable issues, conditions as to deposit or security or both can extend to the entire principal sum together with such interest as the court feels the justice of the case requires. e. if the Defendant has no substantial defence and/or raises no genuine triable issues, and the court finds such defence to be frivolous or vexatious, then leave to defend the suit shall be refused, and the Plaintiff is entitled to judgment forthwith; f. if any part of the amount claimed by the Plaintiff is admitted by the Defendant to be due from him, leave to defend the suit, (even if triable issues or a substantial defence is raised), shall not be granted unless the amount so admitted to be due is deposited by the Defendant in court.
20. In IDBI Trusteeship Services Ltd. (supra) the Supreme Court further held:
17. It is thus clear that Order XXXVII has suffered a change in 1976, and that change has made a difference in the law laid down. First and foremost, it is important to remember that Milkhiram's case is a direct authority on the amended Order XXXVII provision, as the amended provision in Order XXXVII Rule 3 is the same as the Bombay amendment which this Court was considering in the aforesaid judgment. We must hasten to add that the two provisos to Sub-rule (3) were not, however, there in the Bombay amendment. These are new, and the effect to be given to them is something that we will have to decide. The position in law now is that the trial Judge is vested with a discretion which has to result in justice being done on the facts of each case. But Justice, like Equality, another cardinal constitutional value, on the one hand, and arbitrariness on the other, are sworn enemies. The discretion that a Judge exercises under Order XXXVII to refuse leave to defend or to grant conditional or unconditional leave to defend is a discretion akin to Joseph's multi-coloured coat-a large number of baffling alternatives present themselves. The life of the law not being logic but the experience of the trial Judge, is what comes to the rescue in these cases; but at the same time informed by guidelines or principles that we propose to lay down to obviate exercise of judicial discretion in an arbitrary manner. At one end of the spectrum is unconditional leave to defend, granted in all cases which present a substantial defence. At the other end of the spectrum are frivolous or vexatious defences, leading to refusal of leave to defend. In between these two extremes are various kinds of defences raised which yield conditional leave to defend in most cases. It is these defences that have to be guided by broad principles which are ultimately applied by the trial Judge so that justice is done on the facts of each given case.”
21. Testing the grounds taken in the leave to defend application on the touchstone of the law laid down by the Supreme Court in IDBI Trusteeship Services Ltd. (supra) this Court finds that no triable issues have been raised by the defendant. The plea of the defendant that this Court has no territorial jurisdiction to try the suit for the reason that by virtue of Clause 11.[3] of the Agreement to Sell, parties choose the venue of arbitration at Gurgaon deserves to be rejected for the reason this Court has already held that the plaintiff is not bound by the arbitration clause, that is, Article 11 of the Agreement to Sell executed between its members and defendant. Thus an agreement on the venue of arbitration to be Gurgaon or such other place as may be mutually agreed between the parties has no application to the facts of the present case. The defendant does not dispute that its registered office is in Delhi. Thus, since the defendant is working for gain in Delhi as per Section 20 of CPC, this Court has territorial jurisdiction to try the suit. The claim of the plaintiff is based on admissions of the defendant to deposit the IBMS by the defendant with the plaintiff so that the plaintiff thereafter continuous with the maintenance and upkeep of the buildings. The plaintiff relies upon the admission of the defendant vide its email dated 24th January, 2009 including the IBMS amount @8.25% as on 31st December, 2008; defendant’s letter dated 5th April, 2011 responding to the plaintiff’s letter dated 18th March, 2011 admitting the liability to hand over IBMS amount; handing over letter dated 20th August, 2013 enclosing the IBMS amount with interest @8.25% till 31st August, 2013; balance sheet of the defendant of the financial years 2012-13 and 2013-14; affidavit of the defendant dated 11th March, 2015 filed in Company Petition No. 513/2004 and the present suit having been instituted on 25th July, 2016 the same is within the period of limitation. The filing of the company petition by the plaintiff does not bar its remedy to recover the amount due by way of a civil suit and the deposit of the defendant of part payment pursuant to the order of the company court further fortifies the claim of the plaintiff.
22. In respect of the ground that the plaintiff is not entitled to seek interest @18% this Court in the decisions reported as 2015 (2) MWN (Civil) 33 A.G. Exports vs. Alftach Construction & Pvt. Ltd., Suraj Sanghi (supra), Motorola India Ltd. (supra) and Leela Capital (supra) held that leave to defend cannot be granted merely for determining the rate of interest which the Court can grant as per the prevailing practice.
23. Since the defendant has admitted the rate of interest @8.25% which can be treated as the prevailing interest rate, no leave to defend is required to be granted to the defendant. Application is accordingly dismissed.
1. Application under Section 8 of the Arbitration Act being I.A. NO. 1405/2017 and leave to defend application being I.A. No. 1404/2017 having been dismissed, suit is decreed in favour of the plaintiff and against the defendant directing the defendant to pay a sum of ₹17,76,64,952/- with interest @8.25% pendentile and future till the recovery.
2. No order as to cost.
JUDGE JANUARY 09, 2018 ‘vn’