Commercial Appeal (L) No.438 of 2018,Notice of Motion (L) No.1015 of 2018,Commercial Chamber Summons No.488 of 2018,Commercial Execution Application No.63 of 2017,Suit No.119 of 2016

20th December, 2018.

Petitioner Counsel: Mr. MUKESH M. VASHI, Sr. Counsel a/w Ms. MANISHA DESAI I/b M. P. VASHI ASSOCIATES
Respondent Counsel: Mr. ZAIN MOOKSHI a/w Ms. PARISHA SHAH

Cases Cited:
Shailendra Bhadauria & Ors. Vs. Matrix Partners India Investment Holdings LLC & Ors., Commercial Appeal No.327/2018 in Chamber Summons No.1030/2018 in Commercial Execution Appln. No. 2113/2018, Dt.25.9.2018, (Bom.) [Para 18,24]

JUDGMENT

B. P. COLABAWALLA, J. :- By this Commercial Appeal, the Appellants take exception to the order dated 13th / 22nd July, 2018 passed by the learned Single Judge in Chamber Summons No. 488 of 2018 in Commercial Execution Application No. 63 of 2017 in Suit No. 119 of 2016. By a detailed and reasoned impugned order, the learned Single Judge dismissed the Chamber Summons filed by the Appellants. Hence, the present Appeal.

2. The Appellants before us were Defendant Nos.1 and 2 before the Trial Court and Respondent Nos.1, 2 and 3 herein were the Plaintiffs. Respondent Nos.4 & 5 herein were Defendant Nos.3 & 4 before the Trial Court. For the sake of convenience, we shall refer to the parties as they were arrayed before the Trial Court.

3. The brief factual narration is that, the Suit was originally filed by the Plaintiffs seeking a decree in favour of Plaintiff No.1 in the amount of Rs.74,10,000/-; in favour of Plaintiff No.2 in the amount of Rs.1,71,00,000/- ; and in favour of Plaintiff No.3 for an amount of Rs. 2,25,86,250/-. Apart from the money decree, a prayer was also sought for a declaration that the Plaintiffs have a lien and charge on two films "Welcome Back" and "Hera Pheri 3" produced by Defendant Nos.1 and 2.

4. After the Suit was filed, on 16th February, 2016, Consent Terms were arrived at and were filed in the Suit and a Consent Decree came to be passed. In these Consent Terms, Defendant Nos. 1 and 2 submitted to a Decree in the following manner:-

"2. Decree against Defendant Nos.1 and 2 and in favour of:

(a) Plaintiff No.1 for sum of Rs.65,00,000/- (Rupees Sixty Five Lakhs only) with interest thereon at the rate of 15% per annum from 1st June 2015 till payment and/or realization of the decretal amount;

(b) Plaintiff No.2 for sum of Rs. 1,50,00,000/- (Rupees One Crore Fifty Lakhs only) with interest thereon at the rate of 15% per annum from 1st June 2015 till payment and/or realization of the decretal amount.

(c) Plaintiff No.2 of sum of Rs. 1,98,12,500/- (Rupees One Crore Ninety Eight Lakhs Twelve Thousand Five Hundred only) with interest thereon at the rate of 15% per annum from 1st June 2015 till payment and/or realization of the decretal amount."

5. Clause (3) of the Consent Terms stipulated that Defendant Nos.1 and 2 undertake to pay the aforesaid decretal amount to the Plaintiffs within one year from the date of the Consent Terms, time being of the essence.

6. Thereafter, Clause (4) and (5) set out that Defendant Nos.1 and 2 had paid certain amounts to the Plaintiffs by specified cheques and Clause (6) stipulated that if any of these cheques were dishonoured, the Plaintiffs would be entitled to execute the Decree immediately.

7. Since the cheques issued by the Defendants were dishonoured, the Plaintiffs put the Consent Decree in execution by filing the above Commercial Execution Application. In this Execution Application, the Plaintiffs took out a Chamber Summons in the usual form. In the meanwhile, Defendant Nos.1 and 2 also filed Chamber Summons No. 218 of 2017 to raise the attachment that was levied on their Cosmos Bank, Vile Parle Branch, bank account. On this Chamber Summons (Chamber Summons No. 218 of 2017) an order came to be passed by another learned Single Judge (K. K. Tated, J.), wherein the Applicant to the said Chamber Summons was granted a week's time to enable him to file an affidavit-cum-undertaking that he will clear all the Plaintiffs' dues within a particular time and also disclose as to whether any liability is created by him on the attached property, namely the bungalow named "Barkat" situated at Plot No. 20, Gulmohar Cross Road No.5, J. V. P. D. Scheme, Mumbai 400 049.

8. The matter then reached on 13th November, 2017 when Defendant No.2 was personally present in Court. Thereafter, he filed an affidavit dated 20th November, 2017 and in paragraph 4 he solemnly stated that he would clear the decretal debt with interest by 15th January, 2018. That undertaking was accepted. The parties then filed Consent Minutes of the order. These were taken on record.

9. Accordingly, attachment was raised for an amount of Rs. 5,00,000/- from the Cosmos Bank account being paid over to Defendant Nos.1 and 2 and the balance being paid to the Plaintiffs in part satisfaction of the decree. The matter was thereafter listed on 19th January, 2018 "for compliance". On the said date, the matter came up before another Single Judge (G. S. Patel, J.) when it was noted that Defendant No.2 had given an undertaking to clear all dues by 15th January, 2018 and it was not done. Instead, the advocate for Defendant No.2 sought time. In these circumstances, the matter was adjourned to 24th January, 2018.

10. On the adjourned date of 24th January 2018, Defendant No.2 was personally present. Once again he sought a short accommodation and promised to pay the balance amount by 15th February, 2018. Despite this, time was granted to Defendant No.2 to pay Rs. 1 Crore by 15th February, 2018 and the balance amount by 15th April, 2018. The matter was therefore listed on 16th February, 2018.

11. On 16th February, 2018, the matter took a different turn. On that date, the advocate appearing for Defendant Nos.1 and 2 attempted to argue that the entire Consent Decree is fraudulent or otherwise needs to be set aside and that he proposes to file an application for that purpose. He, further stated that he had instructions to state before the Court that nothing was due and payable by Defendant Nos.1 and 2 except for an amount of Rs. 23,17,667/-. The learned Single Judge on 16th February, 2018 after noting all the facts and as reproduced in the impugned order, was of the opinion that if Defendant Nos.1 & 2 wanted to make out a case for setting aside the decree, they will have to be put to terms. This was because Defendant Nos.1 and 2 had given solemn undertakings to this Court to pay the entire decretal amount by a stipulated date. In these circumstances, it was directed that Defendant Nos.1 and 2 in the first instance have till 21st February, 2018 to deposit an amount of Rs.4.75 Crores with the Prothonotary and Senior Master. The learned Judge further directed that without such a deposit, no application by Defendant Nos.1 and 2 would be allowed to be filed in the Registry which will insist on proof of deposit before accepting any application for setting aside the Consent Decree.

12. Independently of this, the learned Judge, having regard to the statements made in the affidavit in support of the Chamber Summons and the undertakings given to the Court, issued notice under Rule 9 (1) of the Contempt of Court (Bombay High Court) Rules, 2005 against Defendant No.2 in his personal capacity and as a Sole Proprietor of Defendant No.1 to show cause why he should not be proceeded against for having committed Contempt of the Court. This notice was made returnable on 16th March, 2018. Since, time to deposit an amount of Rs. 4.75 Corres was given till 21st February, 2018, the matter was listed "for Directions and Compliance" on 22nd February, 2018.

13. On 22nd February, 2018 there was another change of guard. Now, another advocate (namely same advocate who is appearing before us) was engaged by Defendant Nos.1 and 2. This advocate submitted that he had instructions to challenge the original Consent Decree and sought time until 8th March, 2018. The Court also noted that the Plaintiffs had also filed a Chamber Summons on the execution and that also was directed be listed on Board along with Chamber Summons No. 218 of 2018.

14. Finally, on 16th March, 2018, the advocate for Defendant Nos.1 and 2 submitted a statement of a total outstanding of Rs.2,73,12,069/-. Accordingly, the learned Single Judge allowed Defendant Nos. 1 and 2 above to make either a deposit of the said amount or provide a bank guarantee or a combination of two. Ultimately, on 28th March, 2018, Defendant Nos.1 and 2 deposited an amount of Rs.2,75,00,000/-. It was then that the present Chamber Summons (Chamber Summons No.488 of 2018) came to be filed.

15. Chamber Summons No. 488 of 2018 filed by Defendant No.2 (Judgment Debtor No.2) was for the following reliefs:-

"(a) That the Defendant No. 2 be relieved of all the undertakings and may be allowed to withdraw all the statements made before this Hon'ble Court which are recorded in Exhibits - "F" to "J".

(b) That the orders dated 16th February 2018 and 22nd February 2018 may be recalled and/or modified and the Defendant Nos. 1 and 2 be heard on the present Chamber Summons without depositing of Rs.4,75,00,000/- (Rupees Four Crores and Seventy Five Lakhs only) in this Hon'ble Court.

(c) That it be declared that the Consent Decree dated 16th February 2016 passed by this Hon'ble Court is a nullity and incapable of being executed against the Defendant Nos. 1 and 2.

(d) That the Commercial Execution Application No. 63 of 2018 taken out by the Plaintiffs/Decree Holders to execute the Consent Decree dated 16th February 2016 be dismissed.

(e) That the Plaintiffs be ordered and directed to refund the said amount of Rs.2,56,77,688/- (Rupees Two Crores Fifty Six Lakhs Seventy Seven Thousand Six Hundred and Eighty Eight only) to the Defendant Nos. 1 and 2.

(f) That the Plaintiffs/Decree Holders be permanently restrained by an order and injunction of this Hon'ble Court from relying upon and/or taking any further steps pursuant to the Consent Decree dated 16th February 2016.

(g) That it be declared that the Plaintiffs do not have any right of any nature of whatsoever in the film viz. "Phir Hera Pheri-3".

16. As can be seen from these prayers, the main relief sought was for a declaration that the Consent Decree dated 16th February, 2016 is a nullity and incapable of being executed against Defendant Nos.1 and 2. All the other prayers in the Chamber Summons are consequential, meaning that they could be granted only if the Consent Decree was declared a nullity. It was in these circumstances that the sole submission made by the advocate for Defendant Nos.1 and 2 before the learned Single Judge was that the Consent Decree was a nullity because it was hit by the provisions of the Bombay Money Lenders Act, 1946. This contention was negated by the learned Single Judge by the detailed impugned order.

17. The learned Judge analyzed the provisions of the Bombay Money Lenders Act as well as several case law and thereafter came to the conclusion that the Chamber Summons fails. The learned Judge, however, recorded that since the entire decretal amount was already deposited, the Plaintiffs (Decree Holders) were allowed to withdraw the amount upon which the decree would be fully satisfied. Since the entire amount was already deposited, there was no purpose in continuing with the attachment levied on the immovable property and therefore the learned Judge raised the attachment. The Chamber Summons was therefore disposed of in the aforesaid terms. The show cause notice that was issued earlier by the Trial Court was also discharged. It is this order that is challenged before us.

18. In this factual backdrop, a preliminary objection was raised by the advocates for Respondent Nos.1 to 3 (Original Plaintiffs) regarding the maintainability of the Appeal. They placed reliance on Section 13 of the Commercial Courts Act, 2015 to contend that the present Appeal was not maintainable. In this regard, the learned advocate appearing on behalf of Respondent Nos.1 to 3 also placed reliance on a decision of a Division Bench of this Court in the case of Shailendra Bhadauria & Ors. Vs. Matrix Partners India Investment Holdings LLC & Ors. [Commercial Appeal No. 327 of 2018 in Chamber Summons No. 1030 of 2018 in Commercial Execution Application No. 2113 of 2018 decided on 25th September, 2018].

19. Faced with this argument, Mr. Vashi sought to contend that the present Appeal would be maintainable if one were to read Order 21 Rule 58 with Section 47 of the Code of Civil Procedure, 1908 (for short "the CPC"). He submitted that Section 47 deals with questions to be determined by the Court executing the decree and stipulates that all questions arising between the parties to the Suit in which the decree was passed, or their representatives, and relating to the execution, discharge or satisfaction of the decree, shall be determined by the Court executing the Decree and not by a separate suit. He submitted that Order 21 Rule 58 of the CPC deals with adjudication of claims to, or objections to attachment of, property. He submitted that this provision stipulates that where any claim is preferred to, or any objection is made to the attachment of, any property attached in execution of a decree on the ground that such property is not liable to such attachment, the Court shall proceed to adjudicate upon the claim or objection in accordance with the provisions therein contained. He submitted Order 21 Rule 58 sub-rule (4) stipulated that where any claim or objection had been adjudicated upon under this Rule, the order made thereon shall have the same force and be subject to the same conditions as to appeal or otherwise as if it were a decree. Mr. Vashi submitted therefore that this appeal would clearly be maintainable in view of the fact that the order impugned herein is to be treated as a decree.

20. We are unable to accept the submissions of Mr. Vashi. Section 13 of the Commercial Courts Act, 2015 deals with the Appeals from decrees of Commercial Courts and Commercial Divisions and reads thus:-

"13. Appeals from decrees of Commercial Courts and Commercial Divisions

(1) Any person aggrieved by the judgment or order of a Commercial Court below the level of a District Judge may appeal to the Commercial Appellate Court within a period of sixty days from the date of judgment or order.

(1A) Any person aggrieved by the judgment or order of a Commercial Court at the level of District Judge exercising original civil jurisdiction or, as the case may be, Commercial Division of a High Court may appeal to the Commercial Appellate Division of that High Court within a period of sixty days from the date of the judgment or order:

PROVIDED that an appeal shall lie from such orders passed by a Commercial Division or a Commercial Court that are specifically enumerated under Order XLIII of the Code of Civil Procedure, 1908 (5 of 1908) as amended by this Act and section 37 of the Arbitration and Conciliation Act, 1996 (26 of 1996);

(2) Notwithstanding anything contained in any other law for the time being in force or Letters Patent of a High Court, no appeal shall lie from any order or decree of a Commercial Division or Commercial Court otherwise than in accordance with the provisions of this Act."

21. What Section 13 (1A) clearly stipulates is that when any person is aggrieved by the judgment or order of a Commercial Court at the level of the District Judge exercising original civil jurisdiction or, as the case may be, the Commercial Division of a High Court, may appeal to the Commercial Appellate Division of that High Court within a period of 60 days from the date of the judgment or order. The proviso then states that an Appeal shall lie from such orders passed by a Commercial Division or a Commercial Court that are specifically enumerated under Order XLIII of the Code of Civil Procedure, 1908 as amended by the Commercial Courts Act, 2015 and Section 37 of the Arbitration and Conciliation Act, 1996. Sub-section (2) of Section 13 clearly stipulates that notwithstanding anything contained in any other law for time being in force or the Letters Patent of a High Court, no Appeal shall lie from any order or Decree of a Commercial Division or Commercial Court otherwise than in accordance with the provisions of the Commercial Courts Act, 2015.

22. When we look at the prayers that were sought for in the Chamber Summons and reproduced by us above and considering the submissions made before the learned Single Judge, it is quite clear that the only submission that was canvassed before the learned Single Judge was that the Consent Decree that was passed between the parties was a nullity by virtue of the fact that it was hit by the provisions of the Bombay Money-Lenders Act, 1946 and which has now been re-enacted (with certain modifications) as the Maharashtra Money-Lending (Regulation) Act, 2014. This contention was negated by the learned Single Judge in the impugned order. This order, to our mind, does not fall within the parameters of Order XLIII which deals with the Appeals from Orders. Order XLIII rule 1 stipulates that an Appeal shall lie from orders mentioned in sub-clauses (a) to (w) thereof under the provisions of Section 104 of the Code of Civil Procedure, 1908. The present order, does not fall within any of the orders mentioned in Order XLIII Rule 1. Clearly therefore, this Appeal is not maintainable.

23. We find that the reliance placed by Mr. Vashi on Order 21 Rule 58 read with Section 47 to try and bring the impugned order within the ambit of being an appealable order, is also wholly misplaced. Here, there has been no adjudication under Order 21 Rule 58 so that such an order would be a Decree of the Court, and hence, appealable. As narrated above, several undertakings were given by the Defendant to deposit the entire decretal debt in this Court. Pursuant thereto, the entire decretal debt has been deposited and thereafter the learned Single Judge has raised the attachment. This being the case, we do not think that this order falls within the ambit of Order 21 Rule 58 at all. In fact, it was not even the case of the Defendant before the Trial court that the Chamber Summons as filed, was under the provisions of Order 21 Rule 58. This is also clear from a bare reading of the prayers set out in the Chamber Summons and reproduced by us earlier. This being the case, we find that the reliance placed by Mr. Vashi on the provisions of Order 21 Rule 58 are wholly misplaced.

24. Before parting, we must mention that a Division Bench of this Court (S. C. Dharmadhikari and B. P. Colabawalla, J.J.) in the case of Shailendra Bhadauria & Ors. Vs. Matrix Partners India Investment Holdings LLC & Ors. (supra) has considered in detail the provisions of Section 13 of the Commercial Courts Act, 2015 as well as the provisions of the Code of Civil Procedure, 1908. The facts of the present case, to our mind, would clearly be governed on the ratio laid down by the Division Bench in the aforesaid decision rendered in that case.

25. In view of the forgoing discussion, we have no hesitation in holding that the present Appeal is not maintainable. It is therefore dismissed. However, in the facts and circumstances of the case, there shall be no order as to costs. Ad- interim orders, if any, shall stand vacated forthwith.

26. In view of disposal of Commercial Appeal (L)No. 438 of 2018, nothing survives in Notice of Motion(L)No.1015 of 2018 and the same stands disposed of accordingly.

Ordered accordingly.