Sunday 19 February 2023

What is the litigant's duty if the opposite side has given a pay order to him during the pendency of the proceeding?

  In the opinion of this court, the impugned order has not rested its findings on any principle of law, much less any statutory provision. The Tribunal appears to have been completely swayed by the complainant's plight. In doing so, it did not give due consideration to the fact that ₹ 4,53,750/- was debited from the account of the developer. The complainant, for reasons best known to her, filed the original Pay Order due to perhaps lack of proper advice or instruction. Apparently, no order contemporaneously was sought from the MRTP Commission, which would have protected the interests of the complainant with respect to the money received even while ensuring that her contentions on the merits with respect to entitlement towards the flat were preserved. Many avenues / alternatives were available. 

Firstly, the complainant could have sought for a deposit of the proceeds of the Pay Order in an account, to be maintained by the Registrar of the Commission. 

Secondly, she could have sought for a ‘without prejudice’ order enabling her to encash the amount, and at the same time ensure that her claim was not defeated on that score. 

Thirdly, equally, she could have sought for appropriate orders that the amount be maintained by the developer, who could, in the event it became necessary, be directed to pay the principal along with such interest as the Commission or the Tribunal deemed appropriate and in the interests of justice.

 Since none of these choices were opted for, and also having regard to the fact that the amount in question was undoubtedly debited from the developer's current account, there ought to have been a discussion of what was the applicable legal provision which fastened any liability upon the developer. This was more important because the Tribunal in the present case has accepted Citibank’s explanation regarding interest (or rather, its absence of liability, even though the amount was undoubtedly with the bank for about 11 years). {Para 28}

32. In the present case, the complainant was aware that the Pay Order had been tendered by the developer to her; nevertheless she filed the original Pay Order with her complaint, and did not seek any order from the MRTP Commission at the relevant time. The pleadings in the complaint did not disclose that the Pay Order was filed in the Commission, to enable the developer to respond appropriately. In these circumstances, the developer’s argument that the rule embodied in Order XXI, Rule 4 CPC, is applicable, is merited. The developer cannot be fastened with any legal liability to pay interest on the sum of ₹ 4,53,750/- after 30th April 2005.

33. This court is also of the opinion that the complainant’s argument that on account of the omission of the developer, she was wronged, and was thus entitled to receive interest, cannot prevail. The records nowhere disclose any fault on the part of the developer; on the other hand, the complainant did not take steps to protect her interests. It has been held by this court, in Sailen Krishna Majumdar v Malik Labhu Masih10 that in such cases, even if equities are equal, the court should not intervene:

“Equity is being claimed by both the parties. Under the circumstances we have no other alternative but to let the loss lie where it falls. As the maxim is, 'in aequali jure melior est conditio possidentis'. Where the equities are equal, the law should prevail. The respondent's right to purchase must, therefore, prevail.”

In the present case too, the complainant cannot claim interest from the developer, who had returned the Pay Order. As discussed, at the time of filing of the complaint, she could have chosen one among the various options to ensure that the amount presented to her was kept in an interest-bearing account, without prejudice to her rights to claim interest later. In these circumstances, no equities can be extended to her aid.



CIVIL APPEAL NO(S). 1401 & 4530 OF 2019; 




Dated: JANUARY 31, 2023.

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