Case: Neelkanth Devansh Developers Private Limited Vs. Urban Infrastructure Venture Capital Limited

loan simpliciter which was given by the Respondents/original Petitioners to the Appellants and there was no other written material/agreement/contract to show that it was supposed to be part of the arrangement which was specifically averred by the Appellants in their affidavit-in-reply. It is well settled that if there is a written contract, reliance will have to be placed on the written contract and no oral evidence could be led which is in variance of the written contract.30. At no point of time, the contention of the Appellants that this was a part of the larger transaction was accepted by the Respondents/original Petitioners and was promptly denied after reply to the show cause notice was given by the Appellants, alleging the said fact. The fact, that supplemental agreement which contained all these clauses of there being a web of transactions which was delivered by the Appellants to the Respondents was, in fact, not signed, which fact indicates that from the beginning understanding between the parties was that the ICDs were to be treated as separate and distinct transaction. Moreover, if the contention of the Appellants was to be accepted then there was no need to enter into new ICDs. The flow chart and the correspondence between the parties does not establish the case of the Appellants.31. We therefore confirm the finding of the learned Single Judge and are of the view that defence of the Appellants is neither bonafide nor substantial defence. We are of the view that finding given by the learned Single Judge on this issue is neither perverse nor unreasonable and, therefore, we do not propose to interfere with the said finding while exercising our appellate jurisdiction under Clause 15 of the Letters Patent Act. In our view, there was no suppression of fact by the Respondents/original Petitioners since the ICDs were separate and independent agreements. There was no occasion the Respondents/original Petitioners to mention the facts which, according to the Appellants, were allegedly suppressed. The question No.(ii) is therefore answered in the negative.32. The third question which falls for consideration before this Court is as under:-(iii) Whether the impugned order directing the Company to pay a sum of Rs 23,04,59,942/- amounts to a decree when the Company Court was not justified in passing the said Order33. The said submission of the Appellants is without any substance. The learned Single Judge in his order has clearly observed that he is not deciding the case on merits but having held that the defence of the Company is sham and bogus has given an opportunity to the Company to pay the amount, failing which the Company Petition would stand admitted. The learned Single Judge therefore has not passed any decree in favour of the Respondents/original Petitioners. It is now well settled that such an order could be passed by the Company Court directing the Company to make payment of money to the petitioning creditor. This Court in Enarai Finance Ltd. (2002(1) ALL MR 443)and also in Videocon Industries Ltd. vs. Itesa Sanpaolo S.P.A in Appeal (L) No.29 of 2014 in Company Petition No.528 of 2012 has also upheld the similar order passed by the Company Judge. The question No.(iii) is therefore answered in the negative.34. The last question which falls for consideration before this Court is as under:-(iv) Whether any interference is called for with the order passed by the learned Single Judge in an appeal filed under Clause 15 of the Letters Patent Act35. The Apex Court in Wander Ltd and Another vs. Antox India P. Ltd. (1990(Supp) SCC 727) has observed in para 14 as under:-14. The appeals before the Division Bench were against the exercise of discretion by the Single Judge. In such appeals, the appellate court will not interfere with the exercise of discretion of the court of first instance and substitute its own discretion except where the discretion has been shown to have been exercised arbitrarily, or capriciously or perversely or where the court had ignored the settled principles of law regulating grant or refusal of interlocutory injunctions. An appeal against exercise of discretion is said to be an appeal on principle. Appellate court will not reassess the material and seek to reach a conclusion different from the one reached by the court below if the one reached by that court was reasonably possible on the material. The appellate court would normally not be justified in interfering with the exercise of discretion under appeal solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion. If the discretion has been exercised by the trial court reasonably and in a judicial manner the fact that the appellate court would have taken a different view may not justify interference with the trial courts exercise of discretion. After referring to these principles Gajendragadkar, J. in Printers (Mysore) Private Ltd vs. Pothan Joseph (1960) 3 SCR 713 : AIR 1960 SC 1156 : (SCR 721)....... These principles are well established, but as has been observed by Viscount Simon in Charles Osenton & Co. v. Jhanaton [1942 AC 130) .the law as to the reversal by a court of appeal of an order made by a judge below in the exercise of his discretion is well established, and any difficulty that arises is due only to the application of well settled principles in an individual case.The appellate judgment does not seem to defer to this principle.36. This Court therefore while exercising its appellate jurisdiction under Clause 15 of the Letters Patent Act is not expected to interfere with the order passed by the learned Single Judge, unless it comes to the conclusion that the finding is perverse or is based on material which is not part of the record. As mentioned hereinabove we are of the view that finding of the learned Single Judge is neither perverse nor is based on the material which is not there on record. The question No.(iv) is therefore answered in the negative.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]15. In our view, the contention of the Appellants that in view of the order of the Apex Court dated 25/08/2015 and the procedural order passed by the learned Single Arbitrator, ICD is a subject matter of arbitration is without any substance for the following reasons.In view of the said chronology of events in respect of arbitration application file under Section 11, it can be seen that the Respondents herein were not impleaded as party to the arbitration application and had not accepted that there was arbitration agreement between the Appellants herein and the Respondents and further had not accepted that the claim of the original Petitioners that the winding up Petition was required to be adjudicated upon by the Arbitrator. No decision was given by the Apex Court in the said application since it was withdrawn and, therefore, it cannot be said that the Apex Court had given any ruling on the basis of the judgment in Chloro Controls (India) Pvt. Ltd. vs. Severn Trent Water Purification Incorporated and Others (2013) 1 SCC 641  ). The contention of Mr. Dwarkadas, the learned Senior Counsel appearing on behalf of the Appellants therefore cannot be accepted. The question No.(i) is therefore answered in the negative.Taking into consideration the documents on which reliance was placed by both sides, we are of the view that the learned Single Judge has correctly held that ICDs do not form part of the larger transaction of investment or that ICD are payable only out of profits earned by the joint venture business. ICDs, in our view, are independent transactions, not governed by the supplemental agreement.In our view, the learned Single Judge has rightly not accepted the contention of the Appellants that ICDs form an integral part of web of transactions between the two groups. The Inter Corporate Deposits by the Respondents/original Petitioners are independent transactions unrelated to five Subscription/Share Holders Agreements and one Shareholder Agreement which were executed on 24/08/2007 and 18/10/2008 though in these Shareholders Agreements there is a reference to parties, which, in turn, includes the definition of the term Affiliate. It is obvious that the term Affiliate is a defined term in relevant Shareholders Agreement and it cannot be read in isolation and, secondly, it has to be noted that Shareholders Agreement is not signed by the original Petitioners. In our view, therefore, there is no material on record to indicate that the ICDs were part of the larger web of transactions between the parties. Thirdly, the supplemental agreement is admittedly not executed. The agreement itself shows that it is only a draft for approval. There is no material on record to show that Respondents/original Petitioners were accepted as part of the Urban Group or as part of dispute resolution process. No reliance therefore can ever be placed on the supplemental agreement since it was not executed and signed by the Respondents/original Petitioners. The mediation proceedings before the Mediator do not make any reference to theboth these cases, the learned Single Judges of this Court came to the conclusion that the contention of the Company that they were part of the complex web of interconnected transactions could not be accepted and defence could not be set up that would have an effect of allowing them to lead evidence in variance of the terms of the written contract.29. In the present case also, ICDs were distinct written agreements which indicated that it was a loan simpliciter which was given by the Respondents/original Petitioners to the Appellants and there was no other written material/agreement/contract to show that it was supposed to be part of the arrangement which was specifically averred by the Appellants in theirIt is well settled that if there is a written contract, reliance will have to be placed on the written contract and no oral evidence could be led which is in variance of the written contract.30. At no point of time, the contention of the Appellants that this was a part of the larger transaction was accepted by the Respondents/original Petitioners and was promptly denied after reply to the show cause notice was given by the Appellants, alleging the said fact. The fact, that supplemental agreement which contained all these clauses of there being a web of transactions which was delivered by the Appellants to the Respondents was, in fact, not signed, which fact indicates that from the beginning understanding between the parties was that the ICDs were to be treated as separate and distinct transaction. Moreover, if the contention of the Appellants was to be accepted then there was no need to enter into new ICDs. The flow chart and the correspondence between the parties does not establish the case of the Appellants.31. We therefore confirm the finding of the learned Single Judge and are of the view that defence of the Appellants is neither bonafide nor substantial defence. We are of the view that finding given by the learned Single Judge on this issue is neither perverse nor unreasonable and, therefore, we do not propose to interfere with the said finding while exercising our appellate jurisdiction under Clause 15 of the Letters Patent Act. In our view, there was no suppression of fact by the Respondents/original Petitioners since the ICDs were separate and independent agreements. There was no occasion the Respondents/original Petitioners to mention the facts which, according to the Appellants, were allegedly suppressed. The question No.(ii) is therefore answered in the negative.The said submission of the Appellants is without any substance. The learned Single Judge in his order has clearly observed that he is not deciding the case on merits but having held that the defence of the Company is sham and bogus has given an opportunity to the Company to pay the amount, failing which the Company Petition would stand admitted. The learned Single Judge therefore has not passed any decree in favour of the Respondents/original Petitioners. It is now well settled that such an order could be passed by the Company Court directing the Company to make payment of money to the petitioning creditor. This Court in Enarai Finance Ltd. (2002(1) ALL MR 443)and also in Videocon Industries Ltd. vs. Itesa Sanpaolo S.P.A in Appeal (L) No.29 of 2014 in Company Petition No.528 of 2012 has also upheld the similar order passed by the Company Judge. The question No.(iii) is therefore answered in the negative.This Court therefore while exercising its appellate jurisdiction under Clause 15 of the Letters Patent Act is not expected to interfere with the order passed by the learned Single Judge, unless it comes to the conclusion that the finding is perverse or is based on material which is not part of the record. As mentioned hereinabove we are of the view that finding of the learned Single Judge is neither perverse nor is based on the material which is not there on record. The question No.(iv) is therefore answered in the negative.