Delhi District Court
Rakesh Kumar vs Saurabh Dayal on 18 January, 2025
IN THE COURT OF Ms. NEELAM SINGH
DISTRICT JUDGE (COMM-02),
SOUTH-EAST DISTRICT, SAKET COURT, NEW DELHI
CS (COMM)-737/22
Rakesh Kumar
S/o Sh. Rajendera Prasad
Office at: D-11, Basement, Maharani Bagh,
New Delhi-110065 ..... Plaintiff
Versus
1. Saurabh Dayal
S/o Mr. Rameshwar Dayal
R/o House No.C-3/95, Vishesh Khand, Gomti Nagar,
Tehsil-Lucknow, District Lucknow-226010
Uttar Pradesh.
Also at:
Plot No. F-84, 85, 86, UPSIDC Industrial Area,
Malwan-212664, District Fatehpur
Uttar Pradesh
2. QOOZ Industries OPC Private Limited
Registered office at:
C-3/95, Vishesh Khand,
Gomti Nagar, Lucknow-226010
Uttar Predesh .....Defendants
Date of Institution: 27.07.2022
Arguments concluded on : 23.10.2024
Date of Judgment: 18.01.2025
JUDGMENT
The crux of facts stated in brief is noted below:
Case of the plaintiff;
1. (a) It is the case of the plaintiff that he is running a
proprietorship firm in the name and style of M/s Rakesh Kumar
& Associates situated at D-11, Basement, Maharani Bagh, NewCS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 1 of 24
Delhi.
(b) Defendant no.1 is the Director of defendant no.2 company
by the name and style of QOOZ Industries OPC Pvt Ltd. having
its registered office at C-3/95, Vishesh Khand, Gomti Nagar,
Lukhnow.
(c) It is the case of the plaintiff that in the month of May 2019
defendant no. 1 met the plaintiff at his office and submitted that
he is facing severe financial crises in his business and further,
submitted that he is not able to arrange the money to sort out his
financial crises and he wanted to sell his property situated at Plot
Number-85 UPSIDC Industrial Area, Malwan, District Fatehpur,
Uttar Pradesh for a sale consideration of Rs. 40,00,000/- (Rupees
Forty Lakhs Only). The property is owned by company who is
defendant No. 2.
(d) Plaintiff agreed to purchase the aforesaid property for a
consideration of Rs. 40,00,000/- (Rupees Forty Lakhs Only) and
thereafter, obtained a loan amount of Rs. 15,18,499/- (Rupees
Fifteen Lakhs Eighteen Thousand Four Hundred and Ninety-
Nine Only) from Bajaj Finance Limited @ 14.35% per annum for
a tenure of 72 months which was credited in his account and
accordingly, he made payment of Rs.14,33,000/- (Rupees
Fourteen Lakhs Thirty Three Thousand Only) to defendant No.1
after entering into an oral understanding with defendant No. 1. It
is the case of the plaintiff that oral understanding between the
plaintiff and defendant was that defendant no.1 would repay to
the plaintiff an amount of Rs.14,33,000/- @ 14.35% in case the
transaction related to the plot in question is not materialized.
CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 2 of 24
(e) It is further the case of the plaintiff that when the plaintiff
asked for the documents of the plot then the defendant no.1
handed over a copy of lease deed dated 29.05.2015 with respect
to the said plot. It is further the case of the plaintiff that plaintiff
requested the defendant to execute the agreement to sell in his
favour and to hand over the required documents to the plaintiff
but defendant no.1 on one pretext or another avoided execution
of the same and did not hand over the required documents
pertaining to the said plot to the plaintiff. Finally defendant
refused to sell the plot to the plaintiff and assured that defendant
would repay the amount of Rs. 14,33,000/- (Rupees Fourteen
Lakhs Toyty Three Thousand Only) alongwith interest @
14.35% per annum to the plaintiff. Thereafter, defendant no.1
repaid an amount of Rs. 48,424/- to the plaintiff till 02.11.2019.
(f) It is further the case of the plaintiff that plaintiff has made
payment of Rs. 6,80,605/- (Rupees Six Lakhs Eighty Thousand
Six Hundred and Five Only) to Bajaj Finance Limited at
annualized rate of return of 14.35%. Plaintiff repeatedly followed
up with the defendant No. 1 on his mobile phone and has also
written e-mail dated 10.03.2022 asking him to repay the amount
but defendant no.1 denied the fact and refused to pay the amount
to the plaintiff. It is submitted that because of allurement of
defendant no.1 to the plaintiff, plaintiff had transferred the
amount of Rs. 14,33,000/- to defendant no.1 and thereafter, he is
making payment of EMIs to Bajaj Finance Limited on behalf of
defendant no.1 on the second day of each month. It is further
submitted that the defendant has allowed the plaintiff for taking
CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 3 of 24
loan from Bajaj Finance Limited and the EMIs to be paid by
defendant no.1 but he failed to make the payment and grabbed
the money of the plaintiff. It is submitted that plaintiff made part
payment of Rs. 98,416/- till date, out of the amount of loan taken
by him from Bajaj Finance Limited. It is further submitted that
plaintiff has sent a Legal Demand Notice dated 14.04.2022 to
defendant No.1 claiming his full and final amount of Rs.
26,44.015/-, but defendant never replied to the legal notice. It is
submitted that plaintiff filed a civil suit in the court of Ld. ADJ
but later on had withdrawn the suit on 18.07.2022 with the liberty
to file a Commercial suit and instituted pre instituted mediation
against the defendant under section 12A of Commercial Courts
Act, 2015 and hence, the present suit.
Case of the defendant;
2(a) WS has been filed on behalf of defendant. It is submitted
that Mr. Shobhan Mahanti who is the advocate for the plaintiff in
the present case is also working as a company secretary with the
plaintiff and he contacted the defendant no.1 for incorporation of
defendant company near the end of 2014 and beginning of 2015.
It is submitted that Mr. Shobhan Mahanti is the key person
involved in getting all legal and compliance related work done
for the defendants including Secretarial services. It is submitted
that during the time of setting up of defendant no.2 company, Mr.
Shobhan Mahanti used to operate through a firm by the name of
S M Law Associates in which the plaintiff was an assistant to Mr.
Shobhan Mahanti and plaintiff requested Mr. Shobhan Mahanti
CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 4 of 24
to be in touch with the defendant. It is further the case of the
defendant that defendant no.1 had no foresight that the plaintiff
and Mr. Shobhan Mahanti were alluring the defendant for taking
the alleged amount from the plaintiff and even after settlement of
such amount, the plaintiff would resort to file the false suit.
(b) It is submitted that Mr. Shobhan Mahanti being the
primary person involved in the incorporation of both the
Companies of the plaintiff had an access to all the important
documents of the defendant. It is submitted that the plaintiff and
Mr. Shobhan Mahanti were very well aware of the loan and also
that certain plots in the name of the defendant company including
plot No. F-85 were mortgaged with the bank. It is further
submitted that plaintiff was well aware about the fact that none of
the properties of the defendant can be mortgaged or be
transferred or sold to anyone and all the averments made by the
plaintiff pertaining to the value of the suit plot are baseless and
unfounded.
(c) It is further submitted that the suit is not maintainable
under the provisions of Section 2(1)(c) of the Commercial Courts
Act, 2015. It is submitted that the sole ground available to the
plaintiff showing the matter as commercial suit is that the
property in question is a immovable property. It is submitted that
plaintiff has completely failed to show even a single document
pertaining to any deal between plaintiff and the defendant. The
case of the plaintiff is denied by the defendant. Defendant has
vehemently denied the case of the plaintiff and submitted that
plaintiff had paid an amount of Rs. 14,33,000/- to the defendant
CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 5 of 24
and defendant had received the amount. It is submitted that there
was never any agreement between the plaintiff and the defendant
to sell the plot in question to the plaintiff.
3. Replication has been filed on behalf of the plaintiff,
wherein he has reiterated the submissions made in the plaint and
has denied the submissions made in the Written Statement of the
defendant.
4. Upon completion of the pleadings, the following issues
were framed on 18.01.2024 and thereafter, at request of Ld.
Counsel for plaintiff another issue was also framed on
27.03.2024. All these issues are as under:
1. Whether the suit of the plaintiff is not maintainable as per law?
OPD
2. Whether the suit of the plaintiff is not maintainable as plaintiff
has suppressed material facts from the Court? OPD
3. Whether there is no cause of action in the suit of the plaintiff
and against the defendant? OP Parties
4. Whether suit of the plaintiff is entitled for a decree of sum of
Rs. 14,33,000/- in favour of the plaintiff and against the
defendant? OPP
5. Whether the plaintiff is entitled for any interest on the decretal
amount pendente lite and in future, if yes, then at what rate? OPP
6. Whether the plaintiff is also entitled to cost of the suit? OPP
7. Relief.
8. Whether the plaintiff is entitled for Annualized Rate of Return
of 14.35% per annum amounting to Rs. 12,11,015/- (Rupees
Twelve Lakhs Eleven Thousand and Fifteen Only) over advanced
CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 6 of 24
amount of Rs. 14,33,000/- (Rupees Fourteen Lakhs Thirty Three
Thousand Only)?
5. (a) The matter then was kept for evidence. In order to prove the
case plaintiff has examined himself as PW-1, who has tendered his
evidence by way of affidavit Ex. PW1/A. He has also relied upon
documents Ex.PW1/1 to Ex.PW1/13 and documents marked as
Mark A, Mark A1, Mark A2 and Mark B.
(b) The witness has been cross examined by Ld. Counsel for
defendant no.1 and 2. Relevant portion of his cross examination is
reproduced herein under:
“Q. How did you know the defendant?
A. Through reference.
Q. When did you meet the defendant?
A. In the year 2017.
Q. Who was the reference through whom you met the defendant?
A. Through a common friend.
Q. Who was the said common friend?
A. I do not remember.
Q. When did you start working with Mr. Saurabh Dayal?
A. In the same year when we met in 2017.
Q. Where did you generally met with the defendant?
A. In my office at D-11, Basement, Maharani Bagh, New Delhi-110065.
Q. When did you became aware about the deteriotating financial
condition of the defendant?
A. In the year 2017, he started sharing his financial problem with me
and requested me to provide help from the year 2018 onwards.
Q. Were you aware that the defendant had availed other loan from your
friends Mr. Shobhan Mahanti?
A. I had no knowledge.
Q. What were the other loans you were aware about?
A. I was aware about the bank loans only. Vol. Loan mortgaged against
the property.
Q. Have you ever dealt with any compliances in which a company
wants to sell a mortgaged property?
A. No I have not.
Q. Did the defendant personally ask you for financial help?
A. No.
Q. Was there any discussion to sell the subject property to you or
someone else between 2017 to 2019?
A. Yes.
Q. Did you tell him the compliances that would be required for such sale
considering the subject property was mortgaged?
A. No I did not advise the defendant.
Q. When did you talk about with the defendant about the sale of subject
property i.e. F-85, UPSIDC Industrial area Malwan-212664 District
Fatehpur, UP, to you?
A. I do not remember the exact date but it was in the month of April
2019.
Q. What was the conversation about selling just one part of the entire
property between you and the defendant?
A. The defendant took loan from me to repay the bank loan and agreed
to sell the subject property to me and he also informed me that he willCS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 7 of 24
eventually sell the entire property to others due to his financial crisis.
Vol. 1 paid the said amount as part consideration for the subject
property.
Q. Did you ask him how was when was he going to sell the other two
properties adjacent to the subject matter property?
A. No.
Q. Why did you agree to buy a property that is in the middle of two
fully utilised properties?
A. Because the defendant offered me the said plot only.
Q. How did you plan to utilise the subject property after purchasing it?
A. It was an investment for me and I would have sold it for a better
price in future.
Q. When was the agreement to sell of subject property offered?
A. In the month of April 2019.
Q. When did you accept the said agreement to sell?
A. At the same time.
Q. Did you ask him about the property documents before getting into
the agreement to sell?
A. I asked him and he gave me the copy of the lease deed.
Q. When did you enter into the agreement to sell with the defendant?
A. It was an oral agreement in the month May 2019 and the same was
never written and signed.
Q. Did the defendant ask you for advance consideration money?
A. Yes, he asked me in the month of May 2019.
Q. Why did you provide a huge consideration money without getting the
agreement to sell signed?
A. because of the professional relationship and trust.
Q. Did you ask him whether the defendant can sell the property if it is
already mortgaged?
A. Yes I did.
Q. What was the answer of defendant about the above query?
A. The defendant answered that yes I can sell.
Q. Did you have access to the property documents including the
mortgaged document of the subject property?
A. No.
Q. What was your work as a CS at defendant no. 2 company?
A. Normal company compliances like filing of annual return with the
ROC, Etc.
Q. Did your work also include dealing with bank transactions related to
the business?
A. No.
Q. How many years of experience do you have as a CS?
A. 14 years.
Q. How did you give the consideration money to the defendant?
A. Through banking channel.
Q. How did you avail the consideration money to pay the defendant?
A. Borrowed from bajaj finance ltd.
Q. What kind of loan did you took from the Bajaj Finance?
A. It was a professional loan.
Q. Why did you avail the professional loan instead of commercial loan
to purchase the subject property?
A. I do not know.
Q. Have you repaid the loan you took from Bajaj finance?
A. It is still pending in accordance with the repayment schedule.
Q. Did you take any other loan to repay the partial amount to Bajaj
Finance?
A. Yes from Mr. Shobhan Mahanti.
Q. What was the exact amount borrowed from Mr. Shobhan Mahanti?
A. I do not remember the exact amount.
Q. During the oral agreement did you talk about any interest in case the
defendant does not want to sell the subject property?
A. No. Vol. It was agreed to pay 24 percent per annum in case the
defendant does not sell the property to me. (After seeing the judicial
file) At an annualised rate of return of 14.35 percent per annum on the
loan taken from bajaj finance which would amount to Rs. 26,44,015/-
including the principal amount”.
(c) Thereafter, plaintiff has examined another witness Md.
CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 8 of 24
Shahnawaz, Deputy Manager as PW-2. He has relied upon the
Authorization letter dated 27.06.2024 Ex. PW-2/1 and the Bank
Statement along with Certificate under Sec. 65B IEA and
Certificate Under sec. 2A of the Banker’s Book of Evidence Act,
1891 are Ex. PW-2/2 (Colly.).
(d) The witness has been cross examined by Ld. Counsel for
defendant no.1 and 2. Relevant portion of his cross examination is
reproduced herein under:
Q. When was the A/c of the defendant was opened in your bank?
A. I do not know about account opening date as I have received the summons
to produce the relevant bank statement of the concerned A/c only.
Q. Do you have any idea that this Bank A/c is the only active bank account at
your bank?
A. I do not know.
Q. Do you have any documents to corroborate the status of active bank
accounts of Defendant no. 1 at your bank?
A. I do not know.
Q. Whether the concerned bank account was indulged in regular financial
transactions?
A. Yes, the transactions were done as shown in the statement I have brought
today.
Q. When did the amount of Rs. 14,33,000/- was received in the bank account
of Defendant no.1?
A. Yes, the total amount of Rs. 14,33,000/- was received in the concerned
bank account of the defendant no. 1 vide separate transactions on 14.06.2019,
18.06.2019, and 28.06.2019 respectively.
Q. Is this the first transaction undertaken between Rakesh Kumar and Saurabh
Dayal?
A. I do not know.
Q. Did the total amount of Rs. 14,33,000/- was kept in Defendant no. 1 Bank
Account unused for a long period of time?
A. I do not know.
Q. Was this amount of Rs. 14,33,000/- paid or transferred to different stake
holders/salary/bill or transferred to any other account?
A. I do not know.
Q. Do you keep a track on all transactions of your Account holder Mr.
Saurabh Dayal?
A. Yes, all records of banking transactions are kept.
Q. Have you ever inquired or asked the defendant with regard to any
suspicious activity in defendant no. I bank A/c with respect to deposit of buky
amount?
A. I do not know”.
(e) Plaintiff has further examined Sh. Manish Kumar Verma,
Manager as PW-3. He has relied upon the certified copy of the
Bank Statement for a period from 01.04.2018 to 05.07.2024 along
with Certificate under Sec. 653 IEA Ex. PW-3/1.
(f) The witness has been cross examined by Ld. Counsel for
CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 9 of 24
defendant no.1 and 2. Relevant portion of his cross examination is
reproduced herein under:
“Q. When was the A/c of the Plaintiff’s Firm was opened in your bank?
A. It was the opened on 25.07.2012.
Q. Whether the Plaintiff’s A/c was indulged in regular financial transactions?
A. Yes as per A/c statement there are regular financial transactions.
Q. Do you have idea that the current A/c is the only active A/c in your branch
of the plaintiff’s firm?
A. We only have one A/c by the name of Rakesh Kumar & Associates.
Q. When was the amount of Rs. 14,33,000/- received and from where was this
amount was credited?
A. I have no idea.
Q. Can you tell me that the present A/e is actively receiving any hefty amount
from other A/cs or individuals?
A. I do not know.
Q. Have you ever witnessed any suspicious activities in the present A/c?
A. No.
Q. Was there any transaction undertaken between Rakesh Kumar &
Associates and Saurabh Dayal/Defendant?
A. I do not know.
Q. Do you have idea that the Rakesh Kumar & Associates or the Plaintiff was
obtaining any Loans for any purposes?
A. I do not know.
Q. Was there any amount transferred from Bajaj Finance Ltd. To the
Plaintiff’s Firm A/c?
A. I do not know.
Q. How much experience do you have in this service?
A. 17 years”.
(g) Plaintiff has also examined Sh. Rishabh Khandelwal,
Manager (Legal) as PW-4. He has relied upon the Power of
Attorney dated 24.08.2021 Ex. PW-4/1(OSR) and the certified
copy of Loan Statement for a period from 12.06.2019 to
05.07.2024 Ex. PW- 4/2 and the certified copy of the Repayment
Schedule for the said Loan Agreement Ex. PW-4/3.
(h) The witness has been cross examined by Ld. Counsel for
defendant no.1 and 2. Relevant portion of his cross examination is
reproduced herein under:
“Q. Whether the Loan Agreement No. 582HFPES031233 was the first loan
taken by the Plaintiff?
A. Yes, it is his first loan in the records maintained by the company.
Q. Have you checked the plaintiff’s Cibil score before granting the loan?
A. Yes. It is generally done by the concerned business team.
Q. Has the plaintiff applied for the Loan physically or online?
A. I am not sure about the same as to what mode has been used for availing
the said loan.
Q. What kind of Loan did the Plaintiff asked for?
A. As per the statement this is a professional loan.
Q. Were you aware of the purpose for which the plaintiff was availing the
said Loan?
A. I do not know, the concerned business team would be aware about the
same.
CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 10 of 24
Q. Generally who decides as to which loan is suitable for the borrower’s
need?
A. The concerned business team decides.
Q. If any borrower wants to buy any property which type of loan is preferred?
A. As per my personal knowledge the customers generally avail the Home
Loan.
Q. If any borrower wants to avail any commercial loan then what documents
are required?
A. I do not know.
Q. What all documents were submitted by the Plaintiff for availing the said
loan?
A. I do not know.
Q. Whether in banking services if borrower wants to avail any loan those
documents are verified or not? (Objection raised by the counsel of the
plaintiff that the defendant’s counsel is asking a formal witness questions
which are general in nature and which comprise of his personal knowledge
about general subjects which have no relevance in the present matter just to
get a statement from him which can be used by him before the court.)
A. I do not know.
Q. Whether the plaintiff has ever defaulted on EMIs of the said loan?
A. It is a matter of record.
Q. Whether at any point of time had the plaintiff apprised Bajaj Finance Ltd.
that in any case of default, the Defendant no. 1 would make the repayment?
(Objection raised by the Plaintiff’s counsel is asking a formal witness about a
personal communication between the plaintiff and defendant about which he
is not supposed to have any formal knowledge).
A. No. I do not know”.
(i) Plaintiff has also examined Sh. Piyush Jha, Deputy
Manager as PW-5. He has relied upon the Authorization letter
dated 05.07.2024 Ex. PW-5/1 and the Bank Statement for a period
from 01.04.2018 to 31.03.2023 along with Certificate under Sec.
65B IEA and Certificate Under sec. 2A of the Banker’s Book of
Evidence Act, 1891 Ex. PW-5/2 (Colly.).
(j) The witness has been cross examined by Ld. Counsel for
defendant no.1 and 2. Relevant portion of his cross examination is
reproduced herein under:
“Q. Whether the plaintiff’s saving A/c No. 072101505978 was indulged in
regular financial transactions?
A. Yes.
Q. Whether any amounts were transferred from plaintiff’s current A/c SBI to
the said bank A/c at your branch? (Objection raised by the counsel for the
plaintiff, the PW is a formal witness having no personal knowledge about the
documents brought by him before the Ld. LC today and the questions being
asked by the counsel for the defendant can be answered by a mere perusal of
the documents brought by the PW)
A. I do not know.
Q. Is the plaintiff having any other savings A/c with your bank?
A. I do not know.
Q. Were there any transactions undertaken from the plaintiff’s A/c to the
defendant’s A/c? (Objection raised by the counsel for the plaintiff, the PW is a
formal witness having no personal knowledge about the documents brought
by him before the Ld. LC today and the questions being asked by the counsel
for the defendant can be answered by a mere perusal of the documents
brought by the PW)CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 11 of 24
A. I do not know”.
Thereafter, PE was closed.
6. (a) The matter was then kept for defendant’s evidence. In order
to prove the case defendant has examined himself as DW-1, who
has tendered his evidence by way of affidavit Ex.DW1/A. He has
also relied upon documents Mark A(Colly.), Mark B(Colly.), Mark
C(Colly.), and Mark D(Colly.). The Certificate under section 65B
Indian Evidence Act filed by the defendant is Ex. DW-1/8.
(b) The witness has been cross examined by Ld. Counsel for
plaintiff. Relevant portion of his cross examination is reproduced
herein under:
“Q. What are your educational and professional qualifications?
A. I have done Bsc. From St. Stephens College 2001 Batch. I used to work in
event management co. and used to manage live music events.
Q. What is the professional qualifications of your family members?
A. My father served as a IPS officer in UP Cadre and now he is retired from
service. My elder brother namely Mr. Gaurav Dayal is an IAS officer in UP
Cadre and my sister in law Mrs, Vrunda M. Desai is an IRS officer.
Q. Where are your brother and sister-in-law are currently posted?
A. My brother is posted as Divisional Commissioner Ayodhya, UP and sister-
in-law is under deputation to the Govt. of India serving as Director in ministry
of information and broadcasting.
Q. Is it correct that before you started the business of Qooz Industries (OPC)
Pvt. Ltd. you started the business of SBH World proprietorship and Web
Ocean India Pvt. Ltd.?
A. Yes
Q. Is it correct that due to your incompetence in running the business of SBH
World proprietorship and Web Ocean India Pvt. Ltd., the business failed?
A. No.
Q. Have you filed the audited financial statements of Web ocean India Pvt.
Ltd. for FY from 2021 to 2024 with the registrar of companies, Kanpur, UP?
A. I have filed.
At this stage witness is confronted with the document containing the master
data of Web Ocean India Pvt. Ltd. downloaded from the official website of
the Ministry of Corporate Affairs on 30.07.2024 at 12:15:15PM and the same
is hereby marked as Mark DX1.
Q. Is it correct that as per the Mark DX1 you have not filed the Audited
results after FY 2020?
A. It appears to be correct as per the document shown.
Q. Is it correct that you did file the copies of ITR Web Ocean India Pvt. Ltd.
for the FY from 2021 to 2024 before this Hon’ble court?
A. I do not remember.
Q. You have said that you have filed audited financial statement of Web
Ocean India Pvt. Ltd. for FY from 2021 to 2024 with the registrar of
companies, can you produce them before this Hon’ble court?
A. Yes. I can produce the same.
Q. You have mentioned in para no. 10 of your written statement that the
plaintiff and Mr. Shobhan Mahanti were looking to come close to you and
you have further mentioned in para no. 11 that Mr. Shobhan Mahanti
introduced the plaintiff to you with intention to cheat and defraud you for
their own personal gain, can you tell us that why the plaintiff and Mr.
Shobhan would want to come close to you?
CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 12 of 24
A. It initially did not look that way but after so many years and events of
financial transactions it appears to me that the intentions were not what I
thought they were.
Q. What financial transactions are you referring to?
A. The money transferred to me as a Loan.
Q. It is still not clear that as to why plaintiff and Mr. Shobhan wanted to come
close to you?
A. it is because of the nature of complaint made against me and wrongly
presented facts and figures.
Q. What is your personal net worth today?
A. I do not know.
Q. What is your own personal income since 2021 annually?
A. I do not remember.
Q. Have you filed your personal ITRs for the last four years?
A. Yes.
Q. Can you place those ITRs before this Hon’ble court?
A. Yes but I do not have them with me today.
Q. What business is the Defendant no. 2 Qooz Industries OPC Pvt. Ltd. is
involved in?
A. it is involved in manufacturing of packaged drinking water.
Q. What is the business of Web Ocean India Pvt. Ltd.?
A. It does internet and online products and services.
Q. your father Sh. Rameshwar Dayal was initially one of the directors of the
Web Ocean India Pvt. Ltd., can you tell us the reason for his resignation?
A. He resigned due to some personal reasons.
Q. You have another co. called Qooz Ltd., your father was also a director of
this co., what was the reason for his resignation?
A. He resigned due to some personal reasons.
Q. You have mentioned in your pleadings that Mr. Shobhan Mahanti had very
shrudely become a shareholder and director of Qooz Ltd., Can you tell us the
business of Qooz Ltd.?
A. as per the MOA of the Co., it was primarily it was incorporated for
restaurants, hotel, etc.
Q. What work does Qooz Ltd. actually do currently?
A. it is currently into marketing and distribution of Food & Beverages.
Q. Have you filed the audited financial statements and ITRs of Qooz Ltd.
with registrar of companies, Kanpur and IT department for the last four FYs?
A. I do not remember.
Q. Can you place the abovementioned audited financial statements and ITRs
before this court?
A. Yes, I can produce the same.
Q. Why did you appoint Mr. Shobhan Mahanti as director and shareholder of
Qooz Ltd.?
A. He became the shareholder right at the time of incorporation of co. and he
was appointed as director by me because we were at decent terms at that time
and he suggested that he can become a director at the co.
Q. Is there anybody outside your family who you have made a director in any
of your companies except Mr. Shobhan Mahanti?
A. No.
Q. Why would Mr. Shobhan Mahanti want to be a director of Qooz. Ltd.
when your own father Mr. Rameshwar Dayal resigned from the co.?
A. Mr. Shobhan Mahanti can be give a better answer to it.
It is wrong to suggest that Mr. Shobhan Mahanti never wanted to become a
director of Qooz Ltd. and he only agreed to become a director because your
father Mr. Rameshwar Dayal wanted to resign and there was no one else
whom you could appoint as a director in your father’s place.
Q. How many shares does Mr. Shobhan Mahanti owns in Qooz Ltd.?
A. He holds 1 percent shares.
It is wrong to suggest that Mr. Shobhan Mahanti had only 1 share of Qooz
Ltd. and you are intentionally deposing falsely.
Q. Is it correct that Mr. Shobhan Mahanti had repeatedly asked you to transfer
the 1 share held by him of Qooz Ltd. to another person?
A. It is not correct that Mr. Shobhan Mahanti repeatedly requested but at the
time of incorporation of the co. he became one of the seven shareholders and
told me that in future I can get it transferred. Before incorporation of the co.
as the time was running out I requested him to become the shareholder. Vol.
It was Mr. Shobhan Mahanti who was getting the Qooz Ltd. incorporated and
filing all documents and he brought to my knowledge that the time was
running out.
Q. Have you filed any documents that Mr. Shobhan Mahanti is working as a
CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 13 of 24
Company Secretary?
A. I do not remember. (The judicial file is shown to the witness to refresh his
memory). No, I have not filed any documents.
It is wrong to suggest that I have falsely mentioned in my evidence by way of
affidavit that Mr. Shobhan Mahanti is working as a Company Secretary to
cause harm in his legal career.
Q. Have you filed any documents on record that can show that plaintiff is
working as an Assistant to Mr. Shobhan Mahanti?
A. No I have not filed any documents.
It is wrong to suggest that I have pleaded in my evidence by way of affidavit
that the Plaintiff is working as an assistant to Mr. Shobhan Mahanti to hatch a
criminal conspiracy to grab the hard-earned money of the plaintiff.
Q. Have you filed any document that Mr. Shobhan mahanti and the plaintiff
are working as a money lender?
A. Yes, I have filed documents.
Q. Can you show the said document from the judicial file?
A. Yes, the Email dated 05.05.2018 which is marked as Mark-B.
It is wrong to suggest that the Emails does not show that the Mr. Shobhan
Mahanti and Plaintiff are working as money lenders.
Q. Can you tell that the plaintiff and Mr. Shobhan Mahanti have received any
amount except the amount involved in the matters, which are pending before
the several courts situated in Delhi?
A. It could be possible.
Q. Can you produce any document to show any other money transaction as
mentioned in preceding question?
A. Yes, some online transactions can be there.
Q. How did you get to know about Adv. Shobhan Mahanti?
A. I came to know about him through my friend Me. Pradyuman Dubey, 1
contacted Mr. Pradyuman Dubey to refer a professional to incorporate my
new company.
Q. How did you decide to buy the property situated at F-84/85/86 UPSIDC
Industrial Area Malwan, UP-212664 District Fatehpur?
A. I explored possible options in UP as near as possible to Lucknow and
finalized these plots.
Q. Is it a leasehold plot or freehold?
A. It is leasehold plot.
Q. How much money was paid to UPSIDC for purchase of said plots?
A. I do not remember as the transaction was done in the year 2014 and 2015.
Q. How paid the consideration for the purchase of the said plots?
A. It was paid by me and my father.
Q. What is the nature of use of the said plots?
A. It is industrial.
Q. For what purpose these plots were purchased?
A. Initially it was purchased for manufacturing facility and later we informed
UPSIDC that we will set up a plant for packaged drinking water and other
beverages.
Q. Can you tell us how much time was taken for the approval of name Qooz
Pvt. Ltd. (OPC) by the ROC, Kanpur?
A. I do not exactly remember but it was around a week.
Q. How many times did you meet with the ROC, Kanpur for name approval?
A. I do not remember.
Q. Did you meet with the ROC, Kanpur for name approval of Qooz Pvt. Ltd.
(OPC) in the year 2015?
A. I do not remember.
Q. Is it correct that the [email protected] belongs to you?
A. Yes. The witness is confronted with an email sent by him from his email
address The @saurabhdayal.com dated 23.01.2015 to Mr. Shobhan Mahanti
and The Plaintiff and the same is hereby marked as Mark DX2.
After perusing the said email Vol. I did meet with ROC, Kanpur.
Q. Is it correct that the name Qooz Industries Pvt. Ltd. (OPC) was applied
with the ROC, Kanpur and approved by him on the same day?
A. I do not remember exactly but it was done quickly maybe within next day.
It is wrong to suggest that I am very well aware that the application for name
approval was filed while I was sitting before ROC, Kanpur with my sister- in-
law Mrs. Vrunda M. Desai and the same was approved immediately.
Q. Did you have any experience in running the business of packaged drinking
water before you set up the business of Qooz Industries (OPC) Pvt. Ltd.?
A. No.
Q. Is it correct that the site map of the factory was prepared by you and you
only got it approved by the UPSIDC?
CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 14 of 24
A. Yes, I prepared a site map and submitted the same with UPSIDC but the
same was never approved.
Q. Is it correct that you approached the Bank of Baroda Fatehpur Branch for
credit limit against the mortgaged property bearing no. F-84/85/86 UPSIDC
Industrial Area Malwan, UP-212664 District Fatehpur?
A. Yes, I approached the Bank of Baroda Fatehpur branch for the term loan
and cash credit limit against the said property.
Q. What was the amount applied for with the Bank of Baroda?
A. It was 1 crore (INR).
Q. How much amount was approved by the Bank of Baroda?
A. Rs. 1 crore (INR).
Q. What the valuation of the said property assessed by the Bank for the said
loan?
A. It was more than Rs. 1 crore in the year 2016.
Q. Is it correct that you signed and submitted all documents required for
obtaining BIS license for Qooz Industries OPC Pvt Ltd?
A. Yes, I applied and submitted the documents.
Q. Is it correct that all ITR, GST returns, ROC returns of Qooz Industries
OPC Pvt Ltd since incorporation have been submitted by using your
signatures?
A. Yes.
Q. Is it correct that all employees of Qooz Industries (OPC) Pvt Ltd since
incorporation in 2015 have been appointed by you?
A. Yes. The final decision was mine.
Q. Is it correct that salaries of all employees were paid by you?
A. Yes, through the company’s A/c and in cash as the case maybe.
Q. Is it correct that their employment has been terminated by you as and when
required?
A. Yes.
Q. Is it correct that all Audited financial statements of Qooz Industries (OPC)
Pvt Ltd since its incorporation have been signed by you as a director?
A. Yes.
Q. Is it correct that purchase of all raw materials and sell of finished product
from the factory of Qooz Industries (OPC) Pvt Ltd was done by you?
A. Yes, it was done by me and my employees.
Q. Can you tell the details of the bank A/cs of the Qooz Industries (OPC) Pvt
Ltd?
A. Yes there two A/es are in Bank of Baroda Fatehpur Branch and ICICI
Bank, Vibhav Khand, gomti nagar, Lucknow.
Q. Is it correct that you are the authorized signatory to the bank A/cs of the
Qooz Industries (OPC) Pvt Ltd with Bank of Baroda and ICICI Bank?
A. Yes.
Q. Is it correct that the Plaintiff and Mr. Shobhan Mahanti were never
authorised signatories in the said bank A/cs of Qooz Industries (OPC) Pvt
Ltd?
A. Yes, Only I was the authorised signatory.
Q. Is it correct that you are managing day to day affairs of Qooz Industries
(OPC) Pvt Ltd?
A. Yes but since 2021 onwards due to medical conditions in my absence my
employees have also been involved in running the business as per my
directions.
Q. Did you share your login ID and password credentials of above-stated
bank A/cs with anyone?
A. Yes, sometimes I did share them with my CA or CS for the purpose of
ITR.
Q. Is it correct that you used to single handedly manage all affairs of Qooz
Industries (OPC) Pvt Ltd including its finances?
A. Yes, it is correct but I was advised by many people.
It is wrong to suggest that Adv Shobhan Mahanti and The Plaintiff had no
active role in the management of Qooz Industries (OPC) Pvt Ltd.
Q. Is it correct that Bank of Baroda filed a case against Qooz Industries
(OPC) Pvt Ltd before the DRT, Allahabad, UP?
A. Yes.
Q. What is the outstanding amount to be paid by Qooz Industries (OPC) Pvt
Ltd to Bank of Baroda currently?
A. I do not remember.
The witness is confronted with a screenshot of the DRT portal mentioning the
case filed by the Bank of Baroda against Qooz Industries (OPC) Pvt Ltd and
the same is hereby marked as Mark DX3.
It is wrong to suggest that I am not disclosing the outstanding amount even
CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 15 of 24
though I am aware of it. Vol. it is between Rs. 45 to 50 Lacs approximately.
Q. Is it correct that a number of times you did not have electricity at the
premises situated at F-84/85/86 UPSIDC Industrial Area Malwan, UP-
212664 District Fatehpur between the period from August 2019 to February
2020 and during this period even your parents did not provide any financial
assistance to you?
A. No, it is wrong the electricity was continuously disconnected between
August 2019 till Februrary 2020, thereafter I filed a Writ petition before the
Hon’ble Allahabad High Court and the judgment came in my favour and
subsequently my father helped me with funds which I paid to the electricity
department in accordance with the order of the High court and my electricity
connection was reconnected.
Q. How was the performance of Qooz Industries (OPC) Pvt Ltd during the
last four years?
A. Not good.
Q. When did you file the last audited financial statement of the Qooz
Industries (OPC) Pvt Ltd?
A. I do not remember.
Q. Is it correct that you have not filed the audited financial statement of Qooz
Industries (OPC) Pvt Ltd since 2020 with ROC, Kanpur?
A. I do not remember. After checking the MCA website master data on
mobile phone. Vol. It has been filed till 31.03.21.
Q. Is it correct that the audited financial statements of Qooz Industries (OPC)
Pvt Ltd was not filed because the same could not be audited by statutory
auditor?
A. No. Vol. It is completed since the last financial year i.e FY 2022-23.
I have brought the ITR of FY 2022-23 and 2023-2024 of the Qooz Industries
(OPC) Pvt Ltd and same are marked as Mark DX-4 and Mark DX-5.
Q. How many mobile numbers do you use?
A. I use two mobile numbers which are 7080078007, 9810283865.
Q. What are the false, fabricated, etc. documents which have been placed on
record by the plaintiff as mentioned in the para no 24 of your evidence by
way of affidavit?
A. I am not able recall the same. (The Witness has been shown the judicial
file to refresh his memory). I cannot tell those documents.
It is wrong to suggest that no documents have been placed on record by the
plaintiff which are false, frivolous, fabricated and manufactured documents,
that’s why I am not able to recall,
It is wrong to suggest that the plaintiff has approached this Hon’ble with clean
hands and has not supressed any material facts from this Hon’ble court.
Q. How many companies and LL.Ps have you incorporated wherein you are a
director or designated partner?
A. Four companies namely Web Ocean India Pvt. Ltd., Qooz. Industries
(OPC) Pvt Ltd, Qooz Ltd., and Hexa Bloom Pvt Ltd.
Q. Can you tell what documents did you provide to the professionals to
incorporate the above stated companies?
A. I submitted copy of my PAN, Adhaar Card. Electricity Bill for address
proof and NOC of the owner/landlord.
Q. The addresses of Defendant no. 1 and 2 as mentioned in Memo of parties
and your affidavit with written statement are correct?
A. Yes, they are correct.
It is correct that I did not reply to the Legal Notice Dated 15.04.2024 which is
Ex. PW-1/5.
It is correct that I have not placed any documents that can reflect that I have
paid amount of Rs. 14,33,000/- to the plaintiff along with annualized rate of
return of 14.35% per annum.
Q. Is it correct that you have received the Rs. 5,00,000/- on 14.06.2019, Rs.5
Lacs on 18.06.2019, and Rs. 4,33,000/- on 28.06.2019 from the bank A/c of
the plaintiff with SBI to your Bank A/c with ICICI Bank?
A. Yes, I have received the total amount of Rs. 14,33,000/- from the plaintiff.
It is correct that I have received the email dated 08.06.2019 from the plaintiff
informing me about the Loan of Rs. 15 lacs which was approved by Bajaj
Finance Ltd at annualized rate of return of 14.35% p.a. for the purpose of a
paying me. The Copy of the Email dated 08.06.2019 with certificate U/s 63.
BSA, 2023 are exhibited as Ex. DW-1/1 (Colly.).
It is correct that I and my family members have been trying to sell the
Industrial plot situated at F-84/85/86 UPSIDC Industrial Area Malwan,
Fatehpur, UP since 2019.
Q. Have you placed on record any settlement deed which can show that you
have paid the entire amount of Rs. 14,33,000/- along with annualized rate of
CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 16 of 24
return of 14.35%?
A. No.
Q. How many installments have you paid to the plaintiff?
A. I have paid at least 12 installments to the Plaintiff.
Q. Can you show any documents from the court record which reflect the
payment of abovementioned 12 installments to the plaintiff?
A. No, I have not placed any such documents on record.
It is wrong to suggest that I did not place any documents because I did not
transfer the said 12 installments to the plaintiff.
It is correct that I have made payment of only 3 installments to the plaintiff.
Q. Have you taken any loan from any bank in the past?
A. Yes, I have taken a loan from Bank of Baroda.
Q. How much amount have you repaid to the Bank of Baroda for the said
loan?
A. I have paid at least Rs. 50 lacs to the Bank of Baroda.
Q. How many years did you take to pay the said amount of Rs. 50 Lacs to the
Bank?
A. I paid the said amount in about 8 years maximum.
It is correct that initially the amount of repayment EMIs will be towards
interest.
Q. Have you ever made any cash payment of EMI to the Plaintiff?
A. Yes
Q. Have you placed on record any cash receipt for the payments made to the
plaintiff?
A. No.
It is wrong to suggest that you did not pay any amount in cash towards EMI
to the Plaintiff. That’s why you did not place any document on record.
Q. Do you know that the plaintiff is not covered under Sec. 3 of the Punjab
Registration of money lenders Act, 1938?
A. I am not aware about the legalities of Sec. 3 of the Punjab Registration of
money lenders Act, 1938.
It is wrong to suggest that the plaintiff does not fall under Sec. 3 of the Punjab
Registration of money lenders Act, 1938.
It is correct that the I put my signature at Point A and B of Ex. DW-1/A after
consultation with my counsel.
It is wrong to suggest that I have mentioned wrong facts about my transaction
with the plaintiff in my evidence by way of affidavit so as to avoid my legal
liability towards the plaintiff.
It is wrong to suggest that I deliberately did not transfer the property situated
at F-85 UPSDIC Industrial Area, Malwan, UP after taking money from the
plaintiff for my wrongful gain.
It is wrong to suggest that I lured the plaintiff into giving the amount of Rs.
14,33,000/- to me by providing him a copy of the lease deed for the
abovementioned property without having any intention of selling the said
property.
Q. Are the documents and photographs which have been emailed by your
counsel to the Ld. L.C and Adv Siddhant Katyal to seek adjournment are true
and correct documents?
A. Yes, these are the true and correct documents and photographs.
Q. Is it allowed to click photographs inside the X-ray and ECG room while
getting the test done?
A. I am not aware about the same.
Q. Have you placed on record any document which can show that the money
was transferred by the plaintiff to you’re a/c for the purpose other than the
purchase of abovementioned property (F-85)?
A. No.
Q. Have you placed on record any document which can show that Mr.
Shobhan Mahanti has acted in malicious manner by misutilizing the
documents and information related to the defendant at his disposal?
A. No.
Q. Have you placed on record any document which can show that you had
entrusted the plaintiff and Mr. Shobhan Mahanti with your finances?
A. No.
It wrong to suggest that this Hon’ble court has jurisdiction over the present
case.
It is wrong to suggest that I need to pay Rs. 14,33,000/- to the Plaintiff
alongwith annualized rate of return of 14.35% p.a.
It is wrong to suggest that I have not paid any money in cash to the plaintiff.
It is wrong to suggest that the plaintiff and Mr. Shobhan Mahanti are not
money lenders as per the applicable law.
CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 17 of 24
It is wrong to suggest that I am deposing falsely”.
7. Final arguments heard. Record perused carefully. I have
gone through the testimony of both the parties and on the basis of
documents, pleadings and testimony of witnesses, my issue wise
findings are as follows:
Issue No.1: Whether the suit of the plaintiff is not
maintainable as per law? OPD
8. The onus to prove the said issue was upon the defendant.
The main argument since the inception of this case of the
defendant is that the present dispute does not fall under the
definition of commercial dispute within the meaning of Section 2
(1)(c) of the Commercial Courts Act, 2015.
9. On the other hand, plaintiff has filed the present suit being
a commercial dispute by submitting that the present dispute is a
commercial dispute within the meaning of Section 2(1)(c)(vii) of
the Commercial Courts Act, 2015. Even otherwise, this issue
being a legal issue, it is the duty of the court to independently
adjudicate upon the fact and law whether the suit filed by the
plaintiff is one governed under the Commercial Courts Act, 2015.
10. The admitted facts between both the parties are that
defendant no.1 approached the plaintiff for the purpose of some
loan as he was under certain financial difficulties. In view of
securing the loan a property bearing no. F-85, UPSIDC Industrial
Area, Malwan-212664 was being considered by both the parties.
In order to financially help the defendant, plaintiff obtained a
loan for Rs. 15,18,499/- from Bajaj Finance Ltd @ 14.35 % per
CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 18 of 24
annum for a tenure of 72 months. Plaintiff has made a payment of
Rs. 14,33,000/- to defendant no.1. It is the case of the plaintiff
that he entered into an oral understanding with defendant no.1
that in case the transaction related to the sale of plot No. F-85,
UPSIDC Industrial Area is not consummated, defendant no.1
would repay to the plaintiff the same amount alongwith interest
@ 14.35 % per annum. Admittedly, no agreement to sell has been
executed between plaintiff and the defendant. In the background
of these facts, now this court would adjudicate upon whether the
present dispute is a commercial dispute or not?
11. During the course of consideration, I could lay my hand on
the celebrated judgment passed by Hon’ble High Court of
Calcutta in case titled “Ladymoon Towers Private Limited Vs.
Mahendra Investment Advisors Private Limited CS/99/2020 and
IA No. GA/4/2021 dated 13th August, 2021″ wherein it was held
as under:
“The statements in the plaint make it evident that the Directors of the plaintiff
and the defendant were known to each other which served as a reason for the
plain to part with Rs. 50 lakhs by way of a short-term loan. The Memorandum
of Association of the plaintiff which is annexed to the plaintiff states that the
plaintiff carries on business of acquisition by purchase, lease, etc, for
development of land and buildings. The Objects of the Plaintiff Company
provide that the plaintiff carries on real estate and construction business. It is
hence evident that the plaintiff’s regular business is not of lending money and
the plaint also does not contain any statement to that effect. The loan given by
the plaintiff to the defendant was based on a familiarity between the Directors
of the parties and can hence be assumed that the loan was in the nature of
what is occasionally referred to as a “hand-loan” and was not given in the
regular course of business or as a commercial Joan. This assumes importance
in the difference recognised under Section 34 of The Code of Civil Procedure,
1908 between the rate of interest to be adjudged on a decree for payment of
money and a liability arising out of a commercial transaction. The aforesaid
would find support from Manesh Rajkumar Kanhed vs. Ramesh Bhagwansa
Walale, AIR 2007 Bom 86, wherein it was held that taking of a “hand-loan”
for starting a business of agency cannot come within the four-corners of the
definition of a commercial transaction. Dena Bank vs. Prakash Birbhan
Katariya; AIR 1994 Bom 343 also rejected the idea of a loan advanced for the
construction of a hospital being termed as a commercial transaction.
The definition section of the 2015 Act only contemplates a “commercial
dispute” and not any other form of dispute where the basis of disagreement
between the parties has a non-commercial cause. The gradation of disputes in
Section 2(1)(c) taking into account all possible forms of agreements from
which a “commercial dispute” may arise, makes it clear that the framers of the
statute gave emphasis on the commercial flavour of the transaction as
CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 19 of 24
opposed to agreements entered into between parties without a commercial
purpose. The qualification of the person being a Merchant, Banker, Trader or
Financier imparts an unimpeachable commercial flavour to the transaction
and the resulting dispute. The Insolvency and Bankruptcy Code, 2016, for
example, defines a dispute from a broader perspective as any suit or
arbitration proceedings relating to an existing debt – Section 5(6)(a). The
commercial purpose would generally mean a transaction by which a person’s
commercial or economic interests may be advanced and would result in an
economic benefit to that person. It would not include an agreement where
profit-making is an incidental outcome of the transaction or may happen by
accident. Although, a “hand loan”, for example, is given by a person or entity
to another with the expected outcome of the principal sum being returned
with interest, the essential commercial flavour in such a loan may be lost by
reason of the informal terms under which the money is lent and advanced and
the consequent uncertainty which may result therefrom. The requirement of
fixing the transaction within the ambit of Section 2(1)(c)(i), namely, between
the named classes of persons can be construed being in aid of what the Act
intends to cut down, namely, unnecessary wastage of time on ascertaining
whether a dispute is a commercial dispute. The exhaustive categories of
agreements in 2(1)(c)(i) – (xxii) leaves no doubt that the 2015 Act seeks to
bring within its fold an inclusive range of disputes where the underlying
purpose of the transaction is a commercial interest of the parties.”
12. In this case the issue which arises before Hon’ble High
Court of Calcutta was whether the suit, filed before a
Commercial Division of this court should be tried under the
provisions of the Commercial Courts Act, 2015 or be heard as a
regular suit. It has been held in this case that the loan given by
the plaintiff to the defendant was based on a familiarity between
the Directors of the parties and can hence, be assumed that the
loan was in the nature of what is occasionally referred to as a
hand-loan and was not given in the regular course of business or
as a commercial loan. It has been further held that this assumes
importance in the difference recognised under Section 34 of the
Code of Civil Procedure, 1908 between the rate of interest to the
adjusted on a decree for payment of money and a liablity arising
out of a commercial transaction. This has been further held by
Hon’ble High Court that the aforesaid would find support from
Manesh Rajkumar Kanhed Vs. Ramesh Bhagwansa Walale; AIR
2007 Bom 86, wherein it was held that taking of a “hand-loan”
for starting a business of agency cannot come within the four-
CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 20 of 24
corners of the definition of a commercial transaction. In the case
of Dena Bank Vs. Prakash Birbhan Katariya; AIR 1994 Bom
343, court also rejected the idea of a loan advanced for the
construction of a hospital being termed as a commercial
transaction.
In another judgment passed by Hon’ble High Court of
Bombay in case titled “Manesh Rajkumar Kanhed Vs. Ramesh
Bhagwansa Walale, AIR 2007 Bom 86″ it was held as under:
“Therefore, taking of hand-loan for whatever purposes, including starting a
business of agency, cannot come within the four-corners of definition of
“commercial transaction” and therefore, I hold that the finding recorded by
both the Courts below that the transaction between the parties was a
commercial transaction, is an error apparent from the record and especially
when, it is an admitted position that it was a hand-loan between the relatives
of each other”.
13. In another judgment passed by Hon’ble High Court of
Calcutta in case titled “Santosh Kumar Bhadani Vs. Om Prakash
Agarwala, CS 28 OF 2020 and IA. No. GA3 of 2023″ it was
held as under:
“The definition section of the 2015 Act only contemplates a “commercial
dispute” and not any other form of dispute where the basis of disagreement
between the parties has a noncommercial cause. The gradation of disputes in
Section 2(1)(c) taking into account all possible forms of agreements from
which a “commercial dispute” may arise, makes it clear that the framers of the
statute gave emphasis on the commercial flavour of the transaction as opposed
to agreements entered into between parties without a commercial purpose.
The qualification of the person being a Merchant, Banker, Trader or Financier
imparts an unimpeachable commercial flavour to the transaction and the
resulting dispute. The Insolvency and Bankruptcy Code, 2016, for example,
defines a dispute from a broader perspective as any suit or arbitration
proceedings relating to an existing debt Section 5(6)(a). The commercial
purpose would generally mean a transaction by which a person’s commercial
or economic interests may be advanced and would result in an economic
benefit to that person. It would not include an agreement where profit-making
is an incidental outcome of the transaction or may happen by accident.
Although, a “hand loan”, for example, is given by a person or entity to another
with the expected outcome of the principal sum being returned with interest,
the essential commercial flavour in such a loan may be lost by reason of the
informal terms under which the money is lent and advanced and the
consequent uncertainty which may result therefrom. The requirement of fixing
the transaction within the ambit of Section 2(1)(c)(i), namely, between the
named classes of persons can be construed being in aid of what the Act
intends to cut down, namely, unnecessary wastage of time on ascertaining
whether a dispute is a commercial dispute. The exhaustive categories of
agreements in 2(1)(c)(i) – (xxii) leaves no doubt that the 2015 Act seeks to
bring within its fold an inclusive range of disputes where the underlying
purpose of the transaction is a commercial interest of the parties.”
“9. In the present case upon combined reading of the plaint and the documents
relied upon by the plaintiff it is the case of hand loan not a businessCS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 21 of 24
transaction between the parties. Simply the defendant had obtained loan from
plaintiff with an agreement that he will return the same with 15% interest,
thus taking of hand loan without any business transaction between the parties
will not fulfill the provisions of Section 2 (1) (c) of the Commercial Courts
Act, 2015″.
14. In another judgment passed by Hon’ble High Court of
Delhi in case titled “Kailash Devi Khanna & Ors. Vs. D.D,
Global Capital Ltd. & Ors. CS (COMM) 34/2016″ it was held as
under:
“29. The counsel for the plaintiffs, on being asked to show under which
Clause of Section 2(1)(c) of the Commercial Courts Act, 2015, the present
claim constitutes a commercial dispute, draws attention to clause (i) of
Section 2(1)(c) of the Commercial Courts Act but which provides for
“ordinary transactions of merchants, bankers, financiers and traders such as
those relating to mercantile documents, including enforcement and
interpretation of such documents” to constitute commercial disputes”.
30. However, all suits for recovery of monies cannot fall under Clause (i)
Supra of Section 2(1)(c) of the Commercial Courts Act. Suffice it is to state
that the suit is not based on any transaction relating to mercantile documents.
Thus, the suit is found to have been wrongly filed as a commercial suit.
15. In another judgment passed by Hon’ble High Court of
Calcutta in case titled “Prime Hitech Textiles LLP Vs. Manish
Kumar, CS/141/2021” it was held that D to D.
“After considering the above referred judgments this Court has carefully gone
through the plaint and the documents relied by the plaintiff. It reveals that in
none of the paragraph of the plaint it is mentioned that the transaction
between the plaintiff and the defendant was in connection with any business.
On plain reading of the paragraph 16 on the basis of which the plaintiff has
prayed for a decree for an amount of Rs. 1,76,74,315.07/- is a simple suit of
recovery of money. The plaintiff tried to made out a case of in commercial
nature in the paragraphs 2 and 3 of the plaint but in the said paragraphs, the
plaintiff has only explained the business of both the parties but it is nothing in
the plaint that the transaction between the parties are connected with any
business transaction.”
“It is settled law that all suit for recovery of money cannot fall under Section
2(1)(c) of the Commercials Courts Act, 2015.”
16. In the present case also plaintiff has tried to make out a
case of a commercial nature to be brought within the ambit of
Section 2(1)(c)(vii) of the Commercial Courts Act, 2015. Section
2 (1) (c) (vii) of Commercial Courts Act, 2015 is reproduced as
under:
“(vii) agreements relating to immovable property used
exclusively in trade or commerce”.
17. Section 2 (1)(c)(vii) deals with the agreements relating to
CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 22 of 24
immovable property which is exclusively used for trade and
commerce. Since the property in question is an Industrial plot,
henceforth, the relevant provisions for sale of this property is
enshrined in the Transfer of Property Act, 1881.
Section 54 of the aforesaid Act is reproduced as under:
54. “Sale” defined.-“Sale” is a transfer of ownership in exchange for a price
paid or promised or part-paid and part-promised.
Sale how made. Such transfer, in the case of tangible immovable property of
the value of one hundred rupees and upwards, or in the case of a reversion or
other intangible thing, can be made only by a registered instrument.
In the case of tangible immovable property of a value less than one hundred
rupees, such transfer may be made either by a registered instrument or by
delivery of the property.
18. Admittedly, in the present case no document has been
executed by way of agreement to sell or any other document in
order to understand the intention of both the parties. It has been
held by Hon’ble Supreme Court in case titled “Crest Hotel Ltd
Vs. Assistant Superintendent of Stamps, AIR 1994 Bom 228″.
“A contract for sale of immovable property is a contract that a sale of such
property shall take place on terms settled between the parties. It does not, of
itself create any interest in or charge on such property. Agreement for sale is
merely a document creating a right to obtain another document of sale on
fulfillment of terms and conditions specified therein. On the strength of such
an agreement a buyer does mot become the owner of the property. The
ownership remains with the seller. It will be transferred to he buyer only on
the execution of sale deed by the seller. The buyer obtains only a right to get
the sale deed executed in his favour. It has been held that the cancellation of
the agreement took place before possession could be given to the purchasers,
hence there was no sale of the flats”.
19. I could further lay my hand in case titled “Subramaniyan
(Died) vs. Venkatachalam Pillai S.A No. 819/2002″, wherein
Hon’ble High Court has held that an oral sale of a tangible
immovable property of the value of more than Rs. 100/- is invalid
in law. The relevant paragraph of the judgment is reproduced as
under:
In the given case on hand it is pertinent to note here that the plaintiff had filed
the suit for the relief of declaration of title and consequential relief of
injunction. Since the consideration of oral sale exceeds Rs. 100/- i.e. the
alleged sale consideration is Rs. 3000/-, as contemplated under Sections 9 and
54 of Transfer of Property Act, the sale must be in writing and registered.
Only on this ground it is construed that the title has not been legally passed on
to the plaintiff. As adumbrated supra, it is not the case of the defendants that
CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 23 of 24
the possession of the plaintiff is unlawful. According to the plaintiff, he has
been in possession from 1977 onwards. As on the date of filing the suit also
the plaintiff was in possession and till date he has not been evicted from the
suit property by due process of law.
20. I could further lay my hand in the celebrated judgment
passed by Hon’ble Apex Court in case titled “Suraj Lamp &
Industries (P) Ld.Tr.Dir vs State Of Haryana & Anr on 11 October,
2011″. The relevant paragraph of the judgment is reproduced as
under:
12. Any contract of sale (agreement to sell) which is not a registered deed of
conveyance (deed of sale) would fall short of the requirements of Section 54
& 55 of TP Act and will not confer any title nor transfer any interest in an
immovable property (except to the limited right granted under section 53A of
TP Act). According to TP Act, an agreement of sale, whether with possession
or without possession, is not a conveyance. Section 54 of TP Act enacts that
sale of immovable property can be made only by a registered instrument and
an agreement of sale does not create any interest or charge on its subject
matter.
21. On the basis of the above cited judgments and the
judgment, I am of the considered opinion that in the absence of a
due agreement executed between the parties for the sale of
property in question, the transaction between the parties would
only remain as a personal loan transaction and cannot in any
manner be governed under the provisions of Commercial Courts
Act, 2015. Resultantly, the suit of the plaintiff is hereby
dismissed being not maintainable before this court.
22. File be consigned to Record Room after due compliance.
Digitally signed
by NEELAM
SINGH
NEELAM Date:
Announced & dictated SINGH 2025.01.18
13:22:11
in the open Court on +0530
this 18th day of January, 2025 (NEELAM SINGH)
District Judge
(Commercial Court-02)
South-East, Saket Courts, ND
18.01.2025
CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 24 of 24
CS (COMM)-737/22
Rakesh Kumar Vs. Saurabh Dayal & Anr.
18.01.2025
Present: Sh. Sidhant Katyal, Ld. Counsel for plaintiff
(through VC).
None for defendant.
Vide separate judgment announced in the open
court, the suit of the plaintiff is dismissed.
File be consigned to record room after due
Digitally signed by
compliance. NEELAM NEELAM SINGH
SINGH Date: 2025.01.18
13:22:26 +0530
(NEELAM SINGH)
District Judge
(Commercial Court-02)
South-East, Saket Courts, ND
18.01.2025 jm
CS (COMM)-737/22 Rakesh Kumar Vs. Saurabh Dayal & Anr. Page 25 of 24
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