MADALSA INTERNATIONAL LIMITED Vs. CENTRAL BANK OF INDIA

JUDGEMENT

(1.) CENTRAL Bank of India filed a suit being Suit No. 278 of 1995 against the (1) Madalsa International Ltd. a company incorporated under the Companies Act, 1956, (2) Deepak Bhandari and (3) Hotel Emerald Pvt. Ltd. a company incorporated under the Companies Act, 1956 for recovery of large amount of more than Rs. 5 crores. Ultimately the parties reached a settlement and a decree on admission was passed on 16-4-1996 for a reduced amount of Rs. 1. 34. 94. 692/ -. The decree also provided that the decree shall not be executed and shall be marked as satisfied on the defendants jointly and severally paying the decreetal amount as mentioned under Clause (2) of the said decree on admission. It provided payment of a sum of Rs. 75, lacs within two months from the date of execution of the terms and the balance was to be paid in 9 monthly instalments each for minimum amount of Rs. 50 lacs, the first of which shall be paid on or before 30th June, 1996 and each subsequent instalments on or before the last day of each succeeding month so that the entitle balance decreetal amount shall be paid on or before 31st March, 1997. Under the very consent decree Hotel Emerald Private Limited defendant No. 3, created mortgage in favour of the plaintiffs to secure the dues under the decree. It was contemplated that before the mortgage is created the plaintiffs Advocates will have to be satisfied as to the defendant No. 3s marketable title to the said property and property being free from encumbrances. The defendant No. 3 Hotel Emerald Private Limited gave an undertaking to this Court to create mortgage as agreed. The decree also mentions regarding several undertakings by defendant Nos. 1 to 3 for creating the mortgages in respect of the property mentioned therein and also make out marketable title to the properties so agreed to be mortgaged. In the event of default it was provided that the plaintiff shall be at liberty to forthwith execute the decree and claim the entire decreetal amount. The terms inter alia also contemplated sale of the properties described in Exhibits A and B by sale in execution in the event of defendants Nos. 1 to 3 committing any default in payment of any instalments as provided in clause (2) of the decree or in case of breach of any other terms and conditions of the decree. Clause 8 which is relevant is as under :

(2.) AFTER the decree was passed, absolutely no payment was made and as such terms of the decree were breached by the defendants and the plaintiff moved the Receiver to take steps as were contemplated under Clause (8) of the decree i. e. to take forcible possession of the properties of which he was appointed Receiver.

(3.) THEREAFTER the defendants took out the Chamber Summons No. 428 of 1997 praying that the execution of the aforesaid decree be stayed against all the defendants and in particular against defendants Nos. 2 and 3.