JITENDRA VIRWANI vs SANTOSH KUMAR GARG

IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 08.01.2024
+ RFA(OS) 69/2019 & CM APPL. 26035/2021
JITENDRA VIRWANI ….. Appellant
versus
SANTOSH KUMAR GARG ….. Respondent
Advocates who appeared in this case:

For the Appellant : Mr. Vikas Upadhyay, Mr. Ashwin Kumar Nair & Mr. Arjun Singh Tomar, Advs.
For the Respondent : Mr. Arvind Nigam, Sr. Adv. With Mr. Avishkar Singhvi, Mr. Vivek Kumar, Mr. Nipun Katyal & Mr. Naved Ahmed, Advs.
CORAM
HON’BLE MR JUSTICE VIBHU BAKHRU
HON’BLE MR JUSTICE AMIT MAHAJAN
JUDGMENT
VIBHU BAKHRU, J
1. The appellant (Mr. Jitendra Virwani) has filed the present intra-court appeal impugning a judgement dated 23.04.2019 (hereafter ‘the impugned judgement’), whereby the appellant’s application under Order XXXVII Rule 3(5) of the Code of Civil Procedure, 1908 (hereafter ‘the CPC’) seeking unconditional leave to defend the suit being [CS(OS) No.356/2017 captioned Santosh Kumar Garg v. Jitendra Virwani] was rejected. Consequently, the suit filed by the respondent (Mr. Santosh Kumar Garg) for recovery of a sum of ?71,86,00,000/- (Rupees Seventy-one Crores Eighty-six Lakhs Only), along with interest was decreed. The learned Single Judge found that the appellant had not raised any triable issues and the respondent (plaintiff in the suit) was entitled to the decree of the sum of ?71,86,00,000/- as claimed along with interest at the rate of 10% per annum from the date of decree till the date of realization.
2. The appellant claims that the learned Single Judge had erred in not appreciating that the respondent’s claim was beyond the period of limitation as the respondent had predicated his claim on the basis of a cheque dated 23.07.2014, which was more than three years prior to the date of institution of the suit. The appellant claims that in addition, he had raised several triable issues including that the said amount was not payable as the respondent had violated the Non-Solicitation Agreement (hereafter ‘the NSA’).
3. The appellant contends that the Trial Court had relied on certain emails for accepting that the appellant had acknowledged the debt. However, the said email was disputed. Further, the respondent had not produced any certificate under Section 65B of the Indian Evidence Act, 1872, in respect of the said evidence.
4. The only questions that are required to be addressed in this appeal are whether the suit in question [CS(OS) No.356/2017] is maintainable under Order XXXVII of the CPC and whether the respondent had raised any triable issues warranting unconditional leave to defend.
FACTUAL CONTEXT
5. The respondent and his wife Ranjana Garg severally held an aggregate 26,37,348 (Twenty-Six Lakhs, Thirty-Seven Thousand, Three Hundred Forty-Eight) shares of a company named Vikas Telecom Ltd. (hereafter ‘Vikas Telecom’). The said holding constituted approximately 40% of the share capital of Vikas Telecom.
6. On 23.04.2014, the respondent and his wife entered into two Share Purchase Agreements (hereafter referred to as ‘SPA-I’ and ‘SPA-II’) with Embassy Office Venture Pvt. Ltd. (hereafter ‘Embassy’) for sale of their shareholding in Vikas Telecom. In terms of SPA-I, the respondent agreed to sell 9,81,914 (Nine Lakhs, Eighty-one Thousand, Nine Hundred Fourteen) equity shares and his wife agreed to sell 9,30,163 (Nine Lakhs, Thirty Thousand, One Hundred Sixty-three) equity shares, which constituted approximately 29% of the share capital of Vikas Telecom, to Embassy at an aggregate consideration of ?380,62,50,000/- (Rupees Three Hundred Eighty Crores, Sixty-Two Lakhs, Fifty Thousand). In terms of SPA-II, the said shareholders (respondent and his wife) agreed to sell the remaining 11% of the equity shares to Embassy. The said parties also entered into separate Escrow Agreements (‘Escrow Agreement-I’ and ‘Escrow Agreement-II’) for consummating the said transaction. In addition, the appellant entered an NSA dated 23.04.2014. The NSA expressly recorded that it was in furtherance of SPA-I and SPA-II. In terms of the NSA, the respondent, inter alia, agreed that neither he nor his wife or children would directly or indirectly, solicit any employees of Vikas Telecom to leave his or her employment. Further, they would not induce or attempt to induce any employees to terminate or breach their employment agreement with Vikas Telecom. They also agreed that they would not directly or indirectly solicit or encourage the existing customers, clients, vendors and / or suppliers of Vikas Telecom to cease doing business with the said company. In consideration for the same, the appellant agreed to pay a sum of ?71,86,00,000/- as Non-Solicitation and Co-operation Fee to the respondent on / or before 22.07.2014 without any demur or protest. The Agreement further recorded that in order to secure the respondent of the Non-Solicitation and Co-operation Fee, the appellant had issued a cheque being Cheque No.008535 for a sum of ?71,86,00,000/- drawn on ING Vysya Bank, Infantry Road Branch, Bangalore-1, and the respondent was free to encash the same on or after 23.07.2014.
7. Thereafter, on 25.04.2014, Embassy, the respondent, his wife, and Vikas Telecom entered into an Amendment Agreement whereby, the said parties expressly agreed that the transfer of the “Sale Shares” were ‘on as is where is basis’ without representation or warranty on the part of the sellers (the respondent and his wife).
8. The respondent claims that in July, 2014, the appellant requested the respondent not to present the cheque (Cheque No.008535 dated 23.07.2014 for a sum of ?71,86,00,000/-) and issued another cheque (Cheque No.008516 dated 24.12.2014) for an amount of ?77,52,33,753/- (Rupees Seventy-Seven Crores, Fifty-two Lakhs, Thirty-Three Thousand, Seven Hundred Fifty-Three) in replacement of the earlier cheque of ?71,86,00,000/-. The respondent claims that the increased amount included interest on delayed payment.
9. The respondent claims that on 17.12.2014, the appellant through one Mr. Ramakrishnan issued a letter alleging that the respondent was obliged to settle the claims of one Mr. Satish Kumar Gaur and if the same was not done, the appellant would stop the encashment of the post-dated cheque dated 24.12.2014.
10. The respondent claims that he made repeated requests to the appellant to pay the said amount but the appellant failed to do so. On 24.03.2015, the respondent presented the cheque – Cheque No.008516 dated 24.12.2014 for an amount of ?77,52,33,753/-. However, the same was dishonoured as the appellant had issued instructions to stop the payment against the said cheque.
11. On 03.07.2017, the respondent served a legal notice to the appellant calling upon the appellant to pay an amount of ?71,86,00,000/- along with interest. Thereafter, on 03.08.2017, the respondent instituted the suit in question [CS(OS) No.356/2017].
12. The appellant filed a written statement as the Registry of this Court had erroneously issued ordinary summons. On 04.12.2017, the learned Single Judge noticed the mistake of issuing summons in the wrong format and granted an opportunity to the respondent for issuing summons for judgment in terms of Order XXXVII of the CPC.
13. The appellant filed an application seeking leave to defend the suit which was dismissed by the impugned judgment. In his application for leave to defend the suit, the appellant sought to raise four issues. First, that the suit was barred by limitation; second, that the suit was non-maintainable for non-joinder of parties; third, that the suit was not maintainable under Order XXXVII of the CPC; and fourth, that there was no admitted liability as the facts on the basis of which the respondent had sought a decree were disputed.
14. The learned Single Judge considered each of the aforesaid four issues raised by the appellant and found the same to be without any merit.
REASONS & CONCLUSION
15. As stated at the outset, the questions to be addressed are whether the suit [CS(OS) No.356/2017] under Order XXXVII of the CPC was maintainable and whether the appellant had raised any triable issues warranting grant of leave to defend either unconditionally or otherwise.
16. Before proceeding further, it would be relevant to refer to the principles that would guide the grant or refusal of an application for leave to defend the suit. In IDBI Trusteeship Services Ltd. v. Hubtown Ltd.: (2017) 1 SCC 568, the Supreme Court had explained the said principles as under:
“17.1. 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.
17.2. 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.
17.3. 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.
17.4. 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.
17.5. 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.
17.6. 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.”
(emphasis supplied)
17. Bearing the aforesaid principles in mind, the first question to be examined is whether the suit was barred by limitation. The learned counsel appearing for the appellant contended that the suit was barred by limitation as it was filed three years after the last date for receipt of consideration under the NSA. It was submitted that in terms of Clause no. 4 of the NSA, the payment of the consideration of ?71,86,00,000/- was to be made before 22.07.2014 and the suit was filed on 03.08.2017.
18. The aforesaid contention is ex facie without any merit. It was the respondent’s case that the appellant had issued a fresh cheque bearing no.008535 for a sum of ?71,86,00,000/- drawn on ING Vysya Bank, Infantry Road Branch, Bangalore-1. Admittedly, the said cheque was presented by the respondent and the same was dishonoured. If the respondent’s contention is accepted that the second cheque dated 24.12.2014 was in replacement of the earlier cheque dated 23.07.2014, there is no cavil that the suit was filed within the period of limitation. Thus, essentially, the appellant’s case that the suit was barred by limitation is premised on the assertion that the second cheque was not a replacement of an earlier cheque dated 23.07.2014 but on account of a separate unconnected transaction. It was the appellant’s case in his leave to defend that the second cheque dated 24.12.2014 was issued for extending a loan to the respondent. According to the appellant, it was understood between the parties that they would enter into “appropriate paper work for this transaction”. However, neither the respondent took any steps to execute the necessary documents nor reverted to the appellant in respect of presenting the cheque.
19. The learned Single Judge had found no substance in this contention for, essentially, two reasons. First, there was no reference to this transaction in any communication issued by the appellant; and, second, there was no communication issued for and on behalf of the appellant, supporting the appellant’s case that the said cheque was issued as a loan to the respondent.
20. Concededly, there is no communication or email by the respondent seeking any such financial accommodation from the appellant. There is also no communication by the appellant referring to extending such financial accommodation to the respondent. More importantly, the cheque was dishonored on account of instructions issued by the appellant to his bank (ING Vysya Bank, Infantry Road Branch, Bangalore-1) for stopping payment against the said cheque. The defence sought to be raised is clearly a moonshine defence. This is also apparent when one construes that there is no dispute that the parties had entered into the NSA and there was no communication issued at the material time by the appellant either cancelling or disputing his liability under the NSA. Thus, according to the appellant, the NSA, in terms of which the appellant had agreed to pay Non-Solicitation and Co-operation Fee of ?71,86,00,000/-, continued to be valid. However, the respondent did not insist on the said payment but requested the appellant to lend a sum of ?77,52,33,753/-. The appellant agreed to do so and issued a cheque for the aforesaid amount. However, subsequently, issued instructions to stop the payment as the parties had not entered into appropriate documentation. Although, the appellant issued instructions to stop the payment, he did not issue any communication seeking return of the cheque or informing the respondent of his intention to stop payment against the cheque. The appellant’s defence is, ex facie, frivolous and is impossible to accept even by the most credulous.
21. The learned Single Judge also referred to the letter dated 17.12.2014 issued on the letter head of the appellant but signed for and on his behalf by another person. In the said letter, it was acknowledged that payment of ?71,86,00,000/- was required to be made in terms of the NSA. However, it was alleged that the respondent was to extend his cooperation to settle the claims made by one Mr. Satish Kumar Gaur and to ensure that he had withdrawn the same. The said letter also, inter alia, acknowledged that the cheque of ?77,52,33,753/- had been issued on account of additional payment allegedly demanded by the respondent and paid by the appellant. The relevant extract of the said letter reads as under:
“Despite our arrangement to pay the amounts of 71,86,00,000/= on completion of your obligation and we having deposited with you a post dated cheque for the same you did not complete the same till July 2014 and in July 2014 you had informed us that there was an additional demand for completion and as such you demanded additional payments. You were fully aware that by then my companies were heavily invested and as such having no option we agreed to the additional demand of amounts such sum amount in all to Rs.77,52,33,753/- (Rupees Seventy Seven Crores, Fifty Two Lakhs Thirty three thousand Seven hundred Fifty Three only) inclusive of service tax to be paid to you. Though it was neither a debt nor we were required to pay such amounts till the compliance, in order to express our bonafides we issued a post-dated cheque for a sum of Rs.77,52,33,753/- (Rupees Seventy Seven Crores, Fifty Two Lakhs Thirty three thousand Seven hundred Fifty Three only) dated 24.12.2014 bearing No.008516 drawn on ING Vysya Bank Limited, Infantry Road Branch, Bangalore. The reason why the cheque was post dated was to provide you the time period that you required to comply with your obligations within that time. Though you were to return the earlier cheque on receipt of the post dated cheque for Rs.77,52,33,753/- you failed to return the same. Needless to say until you discharge your obligations there is no amount/debt due and liable to be paid by us to you.”
22. It is important to note that the appellant carries the designation of ‘Chairman’ of the Embassy group.
23. The appellant has not made any averment that the aforesaid letter was unauthorized. On the contrary, it is the appellant’s stand in its leave to defend that the respondent is required to establish that he had satisfied the conditions in the said letter. In effect, the appellant suggests that the said letter had novated the NSA. According to the appellant, if the respondent claimed that he was entitled to the cheque of ?77,52,33,753/-, the arrangement in respect of the said cheque was required to be performed and not the NSA. The relevant extract from the leave to defend reads as under:
“……In fact the letter dated 17.12.2014 which has also been produced by the Plaintiff only through the Reply states that the Cheque is not in discharge of any debt and is rather issued in bona-fide interest. Further, if the Plaintiff elects to claim that he is entitled to the 2nd cheque under the letter dated 17/12/2014 then the Plaintiff will have to establish/prove to the Honourable Court that he has satisfied the conditions as set forth in the letter. It appeals to reason that if the Plaintiff is claiming entitlement to the 2nd cheque under the letter dated 17/12/2014, then he would also be bound to satisfy the conditions under which the author of the letter has given him the same. The Plaintiff will then have to agree that the Non-Solicitation and Cooperation Agreement dated 23.04.2014 is amended or replaced by notation by the letter dated 17/12/2014. If that is so, then the Plaintiff cannot make his suit claim on the Non-Solicitation and Cooperation Agreement dated 23.04.2014 and he should have made his suit claim on the letter dated 17/12/2014 and has to prove that he has satisfied the conditions imposed therein. The author of the letter dated 17/12/2014 is not a party to the suit and he will have to explain the circumstances under which the letter 17/12/2014 was given. It may be noted that the Plaintiff has not responded to the letter dated 17/12/2014 and has therefore deemed to have accepted the conditions of the Author. This Defendant is yet to see the original of the letter dated 17/12/2014…”
24. The aforesaid defence raised by the appellant is entirely frivolous and vexatious.
25. It is not the respondent’s case that the cheque of ? 77,52,33,753/- was issued pursuant to separate agreement that novated the NSA. It is the appellant’s case that the second cheque of ? 77,52,33,753/- was given as a replacement for the earlier cheque of ? 71,86,00,000/-. This fact was admitted in the letter dated 17.12.2014 as noted above. Whilst it was acknowledged in the said letter that the cheque of ?77,52,33,753/- was issued in replacement of the earlier cheque, it was also stated that additional demands were made by the respondent. It was further stated that the cheque was post-dated to enable the respondent to comply with his obligations, which had not been completed. The reference to the respondent’s obligation is to the obligations in consideration of which the first cheque of Rs. 71,86,00,000/- was paid. This is clear from the plain reading of the letter dated 17.12.2014. The letter dated 17.12.2014 does not suggest that the respondent was required to discharge further obligations in addition to those specified under the NSA. There is no agreement on record, which novates the NSA.
26. Although, the appellant has asserted that the respondent did not perform its obligations under the NSA, the appellant has not set out, in the present appeal, any specific details of obligations, which the respondent had allegedly not performed. However, in his written statement, the appellant has averred as under:
“3.4 It is submitted that the Plaintiff and the Defendant had entered into an Agreement dated 23/04/2014, a copy of which is appended to the Plaint ANNEXURE-Pl, whereby the Defendant in consideration of the Plaintiffs cooperation towards sale of the share supra to the Third Party and in order to secure payment of co-operation had issued a Cheque for a sum of Rs.71,86,00,000/- (Rupees Seventy One Crores Eighty Six Lakhs Only). The Plaintiff had suppressed material facts from the Defendant to induce him to signing the agreement. However, as the Plaintiff and his wife had failed and neglected to cooperate and failed to discharge their obligations in time and therefore, there was no circumstance for the Defendant to making the payment. The Plaintiff and his wife and the Defendant had brought an end to the Agreement and as such, the Agreement dated 23/04/2014 was brought to an end mutually by the parties and the said Agreement was abandoned. The said Agreement came to be abandoned because pursuant to the same, the Plaintiff and his wife did not take any steps in cooperation or discharging their obligations with regard to settlement of claims and for completion of their obligations with regard to settlement of claims and for completion of their obligations to the third parties The said Agreement has expired and there was no claim by the Plaintiff and his wife on this account. The said Agreement was breached by the Plaintiff as stated infra.
3.5 It is submitted that the Plaintiff had failed to comply with the obligations under the Agreement at ANNEXURE-Pl. Infact, one Mr. Satish Gaur filed a Complaint on 23/12/2014 with reference to transactions which are referred to at ANNEXURE-Pl. Consequently, the Economic Offence Division of the CID, Bangalore, vide communication dated 20/06/2016 passed certain Orders. A copy of the communication dated 20/06/2016 by the Police is appended hereto at ANNEXURE-D2.”
27. It is material to note that the NSA does not refer to any obligation regarding settlement of claims of third parties. It is necessary to refer to the NSA for examining the respondent’s obligation under the NSA. The paragraph 3 of the NSA is relevant and is set out below.
“3. In consideration of the foregoing and the Non-Solicitation and Co-operation Fee (as defined in para 4 below), you have further agreed that for a period of 2 (two) years beginning from the date hereof:
(i) You, your wife or children and/or any company in which you and/or your wife has more than 50% shareholding or an ability to appoint majority of the board of directors (‘Affiliates’) shall not, either on your own account or for any other person, directly or indirectly, solicit any employees of the Company to leave his or her employment, induce or attempt to induce any such employees to terminate or breach his or her employment agreement with the Company, as the case may be, or yourself, directly or indirectly, hire or engage in any other manner, any employees.
(ii) Neither you nor your Affiliates shall, directly or indirectly, solicit, cause in any part or knowingly encourage any then existing customers, clients, vendors and/or suppliers of the Company, engaged in the business that the Company is currently engaged in, to cease doing business in whole or in part with the Company.
(iii) This above non-solicitation undertaking in (i) and (ii) above in only restricted to the city of Bangalore and this undertaking shall not apply to those employees who have already resigned from the employment of the Company and who have not been re-employed.’”
28. It is clear from the above that the respondent’s obligation was limited to non-solicitation of employees, and to refrain from encouraging any existing customers, clients, suppliers or vendors of Vikas Telecom to cease business with the said company. The respondent had agreed to refrain from committing the said acts for a period of two years from the date of the NSA. This period has since expired. There is no allegation or even a remote suggestion that the respondent had solicitated or encouraged directly or indirectly any employee of Vikas Telecom to terminate his employment with the said company. There is no allegation that the respondent had encouraged any person from refraining to do business with Vikas Telecom. There is no allegation that the respondent has breached his obligations as specified in Clause 3 of the NSA. Thus, the entire defence predicated on the alleged failure on the part of the respondent to perform the NSA, is illusory.
29. The appellant had relied heavily on a complaint made by one Mr. Satish Kumar Gaur to support the allegation that the respondent did not perform his obligations. The learned Single Judge had noted the contents of the notice dated 05.04.2016 received from the police authorities regarding the complaint of Mr. Satish Kumar Gaur. The said notice sets out the gravamen of the said complaint. The relevant extract of the said notice as referred to in the impugned judgment is reproduced below:
“13. Apparently, pursuant to this complaint, a notice dated 5.4.2016 was received from the police regarding this complaint of Mr.Gaur. Relevant part of the complaint reads as follows:-
“The Complainant Mr. Sathish Kumar Gaur has lodged a complaint against Devidas Garg, Santhosh Kumar Garg. Amitha Garg and Mithilesh Kumar Thripati and others stating that these persons have purchased more than 76 acres of agricultural land by giving false documents as they are agriculturalist and having less then Rs. 2 lack of income of per annum. Later this land was acquired by KIADB and they got compensation from KIADB, Later on they used this money and started Vikas Telecom Limited, No.117, 3rd Main, 2nd Stage, Domilur, Bangalore. & Supreme build cap Pvt. Ltd. S-918, South Block, Manipal Centre, 47, Dickenson Road, Bangalore-560042 companies. In this way they used false documents, cheated the Government etc. In this regard a case has registered at HAL Police station in Cr. No. 973/14 U/s 466, 185. 506, 341, 120(B), 406,409, 468,471, 420 IPC and 79(A), 79(B) and 80 Karnataka Land Reforms Act 1961. Now this case is under investigation at Economics offence Division, CID, Bangaluru.””

30. The learned Single Judge had noted – in our view rightly so – that the allegations contained in the said complaint do not constitute breach of any terms of the NSA. Further, the learned Single Judge had also concluded that the appellant had mischievously and falsely sought to connect the said notice with the NSA. We concur with the said view.
31. It is the appellant’s case that the NSA was in furtherance of the transaction for sale and purchase of shares of Vikas Telecom in terms of SPA-I and SPA-II. Admittedly, the consideration for sale and purchase of shares was paid and the Sale Shares of Vikas Telecom were transferred to the purchaser. The respondent and his wife have ceased to hold the shares, which were subject matter of the said transaction. Thus, Embassy has acquired the control of the Vikas Telecom.
32. On a pointed query from the Court that whether the Embassy or the appellant had initiated any action for cancelling SPA-I or SPA-II, the learned counsel for the appellant had responded in negative. Thus, even according to the appellant, SPA-I and SPA-II had been performed. In the given circumstances it is apparent that the appellant’s defence that it was not liable to pay the Non-Solicitation and Co-operation Fee on account of failure on the part of the respondent to perform his obligations, is insubstantial.
33. The next question to be addressed is whether the suit is not maintainable for non-joinder of the parties. According to the appellant, Vikas Telecom and the Embassy were necessary and proper parties to the suit as the NSA was in furtherance of SPA-I and SPA-II. This contention is also without merit as the respondent’s claim was in respect of the NSA, which was entered into between the appellant and the respondent. Neither Embassy nor Vikas Telecom are parties to the said NSA. The respondent does not seek any relief against Embassy or Vikas Telecom.
34. The contention that the suit was not maintainable under Order XXXVII CPC is also without substance. According to the appellant, the suit was based on the first cheque for a sum of ?71,86,00,000/- which was never presented. Thus, the action in respect to the said cheque was not maintainable under Order XXXVII CPC. The respondent’s claim is for liquidated sum of money under the NSA, and, therefore, it is clearly covered under Rule 1 of Order XXXVII of the CPC.
35. In view of the above, the appeal is dismissed.
36. The registry is directed to release the amount deposited by the appellant to the respondent. The same would be considered as a part discharge of decretal amount from the date when the amount is released to the respondent.
CM NO. 26035/2021 CROSS OBJECTIONS OF THE RESPONDENT
37. The respondent has also filed cross objections assailing the impugned judgment to the limited extent that the learned Single Judge has not awarded ante lite interest on the amount as decreed. It is the respondent’s case that he had also claimed interest from 22.07.2014. However, the said claim is not considered in the impugned judgment. The respondent claims that since the learned Single Judge had accepted that he was entitled to be paid a sum of ?71,86,00,000/- (Rupees Seventy-One Crore Eighty-Six Lacs) and had found no merit in the appellant’s defence, he was also entitled to interest as claimed.
38. The learned counsel appearing for the appellant had countered the aforesaid submissions. He submitted that the respondent (plaintiff) was not entitled to any pre-suit interest as no such relief was sought in the plaint. He referred to the prayers made in the plaint and submitted that no specific prayer had been made for pre-suit interest and in absence of such prayer, no interest could be granted for the said period. He also pointed out that the respondent had not paid any court fees in respect of its claim for the pre-suit interest. He also submitted that the respondent could not claim any pre-suit interest as it was partially responsible for the delay. He submitted that the respondent had waited for two and a half years after the second cheque was dishonoured and could not claim any interest for the period of his inaction. He also referred to the decision of the Supreme Court in Secretary/General Manager, Chennai, Central Cooperative Bank Limited & Anr. v. S. Kamalaveni Sundaram: (2011) 1 SCC 790 in his defence.
39. It is relevant to note that the respondent had filed an application (I.A. No. 10300/2019) before the learned Single Judge seeking clarification/modification of the impugned judgment. The learned Single Judge had rejected the said application by an order dated 24.02.2020 on, essentially, three grounds. First, the learned Single Judge had found that a bare reading of the prayer made by the respondent in its plaint indicates that there was no prayer for seeking interest on the principal sum of ?71,86,00,000/-. Second, the court noted that the respondent had valued the suit at ?71,86,00,000/- and had not included the claim of pre-suit interest in the said valuation. The respondent had also not paid any court fees on the quantum of interest as claimed. The learned Single Judge had rejected the respondent’s contention that it could make good the deficiency of court fees under Section 149 of the CPC for the reason that the deficiency was sought to be made up after the decree was passed. Lastly, the learned Single Judge held that the Court was functus officio and had no power to modify the decree.
40. The respondent had filed an appeal against the said order (being FAO(OS) 52/2020). However, on 04.02.2021, the learned senior counsel appearing for the respondent (appellant in the said appeal) made a statement that the respondent (appellant in the said appeal) would raise the issues by filing cross objections. Subsequently, the respondent had filed the present cross-objections.
41. The NSA expressly recorded that the appellant would pay consideration for a sum of ?71,86,00,000/- on or before 22.07.2014 without any demur or protest. Paragraph 4 of the NSA is set out below:
“4. In consideration of your agreeing to the abovementioned undertakings and for other good and valuable consideration, the receipt and adequacy of which has been acknowledged by me hereunder, I hereby irrevocably undertake to make payment of a fee of Rs.71,86,00,000/- (Rupees Seventy-One Crore Eighty-Six Lakhs only) (“Non-Solicitation and Co-operation Fee) to you on or before July 22, 2014, without any demur or protest.”
42. In view of the above, it is, thus, clear that the appellant had undertaken to pay a sum of ?71,86,00,000/- on a specified date. It is also clear that the transaction between the parties was in the nature of commercial transaction and was in furtherance of SPA-I and SPA-II whereby, the respondent and his wife agreed to sell their shareholding in Vikas Telecom. The NSA did not provide for payment of any interest. Thus, clearly, the court would have the discretion to allow interest on the debt claimed under Section 3(1) of the Interest Act, 1978.
43. Bearing the aforesaid in mind, the first question to be examined is whether the respondent had made a claim for pre-suit interest. It is material to note that prior to instituting the suit in question, the respondent had caused a legal notice dated 03.07.2017 to be issued. The said notice clearly asserted that the interest on the amount of ?71,86,00,000/- had accrued till 02.07.2014 (being the date preceding the date of issuance of the legal notice). The relevant extract of the said notice is set out below:
“10. In the light of the above detailed factual scenario, the undersigned calls upon you to make prompt payment of the total outstanding amount of monies which became due to my client on 23/04/2014, Rs.71,86,00,000/- being the principal amount. Interest on the said amount has accrued until 2.07.2017….”
44. It is also clear that the respondent had averred in the plaint that the appellant/defendant was liable to pay the interest from 22.07.2014. The relevant extract of paragraph 21 of the plaint reads as under:
“….the Plaintiff respectfully states that the Defendant is liable to pay to the Plaintiff an amount of ?71,86,00,000/- along with interest calculated at the rate deemed fit from 22nd July, 2014 until today.”
45. It is also relevant to set out the prayers made by the respondent in his plaint. The same are reproduced below:
“(a) Pass a decree in favour of the Plaintiff and against the Defendant for payment of a sum of ?71,86,00,000/- as per the particulars of claim under the Impugned Agreement hereto along with interest to be calculated at the commercial rate till payment and/or realisation thereof and thereby grant leave to the Plaintiff to sign judgment;
(b) Award the costs of the present Suit in favour of the Plaintiff and against the Defendant on the basis of the decree on admission; and
(c) Pass such order/orders as this Hon’ble Court may deem fit and proper in the facts and circumstances of the present case.”
46. We are of the view that prayer (a) has to be read in the context of the averment in the plaint. The respondent had clearly claimed an amount of ?71,86,00,000/- under the NSA (referred to as ‘the Impugned Agreement’). As noted above, paragraph 4 of the NSA clearly specified the date on which the said amount of ?71,86,00,000/- was payable by the appellant. The respondent had not specified ante lite, pendente lite and future interest but had prayed for interest on the said amount at the commercial rate.
47. In view of the above, there is merit in the respondent’s contention that he had, in fact, claimed interest on the amount of ?71,86,00,000/- from 22.07.2014 being the date on which the said amount was payable.
48. It is also material to note that the respondent had, in its plaint, undertaken to deposit any deficiency in the court fees in case the Court granted “additional interest on the Principal in Prayer (a) as prayed for therein.”
49. It is also relevant to note that on plain reading of Section 149 of the CPC indicates that a court, “at any stage” allow a person to make good the deficiency in court fees. In view of the above, we are not persuaded to accept that the respondent’s claim for interest is required to be rejected on the ground that he had not paid the court fees.
50. In view of the above, we consider it apposite to modify the impugned judgment and decree to also include interest for the period 22.07.2014 till the institution of the suit. Thus, the respondent would be entitled to a sum of ?71,86,00,000/- along with simple interest at the rate of 10% per annum from 22.07.2014 till the realisation of the said amount. This is subject to the respondent depositing the additional court fees with the Registry of this Court within a period of two weeks from date.
51. The appeal and cross objections are disposed of in the aforesaid terms.

VIBHU BAKHRU, J

AMIT MAHAJAN, J
JANUARY 08, 2024
‘gsr’/RK/aks

RFA(OS) 69/2019 Page 12 of 12