M/S Akm Enterprises Private Ltd v. M/S Vesta Holding Private Ltd & Anr

RAJIV SAHAI ENDLAW, J. DECEMBER 03, 2019 OCTOBER 10, 2019 "gsr"..

* IN THE HIGH COURT OF DELHI AT NEW DELHI 3rd December, 2019 % Date of decision: 10th October, 2019 + CS(OS) 1020/2009 & IA No.386/2019 (u/O VIII R-1A(3) CPC) VESTA HOLDING PRIVATE LIMITED & ANR. ..... Plaintiffs Through: Mr. Suhail Dutt, Sr. Adv. with Mr. Azhar Alam, Mr. Sankalp Goswami, Advs. Versus AKM ENTERPRISES PRIVATE LIMITED & ORS. .... Defendants Through: Mr. Abhinav Vasisht, Sr. Adv. with Mr. S.K. Dubey, Mr. Rajmangal Kumar and Mrs. Akshita Sachdev, Advs. AND + CS(OS) 1016/2010 & IA No.389/2019 (u/O VII R-14 CPC) AKM ENTERPRISES PRIVATE LTD ..... Plaintiff Through: Mr. Abhinav Vasisht, Sr. Adv. with Mr. S.K. Dubey, Mr. Rajmangal Kumar and Mrs. Akshita Sachdev, Advs. Versus VESTA HOLDING PRIVATE LTD & ANR ..... Defendants Through: Mr. Suhail Dutt, Sr. Adv. with Mr. Azhar Alam, Mr. Sankalp Goswami, Advs. CORAM: HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW 1. CS(OS) No.1020/2009, as per amended plaint dated 22nd October, 2011, is filed for recovery of Rs.28,12,50,000/- along with pendente lite and future interest at 15% per annum and for permanent injunction. It is the case of the plaintiffs Vesta Holding (P) Ltd. and its promoter Charnesh Kapoor @ Bobby Kapoor (both hereafter referred to as "Vesta") therein, that (i) the defendant no.1 AKM Enterprises Pvt. Ltd. and of which defendants no.2 to 5 viz. Ashok Kumar Malhotra, Monica Malhotra Kandhari, Sonica Malhotra Kandhari and Satish Bala Malhotra are Managing Director / Directors (all of whom are hereafter together called "AKM"), represented that AKM was developing "MBD Neopolis Mall" at Ludhiana; (ii) Vesta, believing the representations of AKM in several meetings held, entered into a Memorandum of Understanding dated 3rd December, 2007 (MOU) with AKM for purchase of an area of 50,054 sq. mtrs. in the said Mall from AKM; (iii) it was inter alia represented by AKM to Vesta that anchor brands viz. (a) Home Centre, on the lower ground floor, (b) Debenhams on the ground floor, (c) Odyssey on the first floor, (d) Gigabite on the third floor, and, (e) Fame–Shringar on the third and fourth floors, would be coming in as lessees in the said Mall; (iv) Vesta, at the time of execution of the MoU paid an amount of Rs.25 crores to AKM out of the total agreed price of Rs.340.28 crores, with the balance price to be paid in various stages; (v) an addendum dated 8th December, 2007 to the MOU was signed between Vesta and AKM and whereunder the area of the Mall to be sold by AKM to Vesta was reduced by 5000 sq. mtrs. and the total sale consideration reduced to Rs.327.73 crores; (vi) in terms of the MOU, the next installment of purchase consideration of Rs.112.04 crores was to be paid by Vesta to AKM by 1st February, 2008 and was related to the progression of the construction of retail and entertainment areas, including areas leased out to the five brands viz. Home Centre, Debenhams, Odyssey, Gigabite and Fame– Shringar; at the time of the said payment a formal Agreement to Sell was also to be entered into between the parties; (vii) the obligation of Vesta to make payment of the second installment of purchase consideration was subject to completion of construction of the retail and entertainment space and execution of lease agreements with the five brands/anchor tenants and handing over of the premises to the aforesaid anchor tenants for fit outs; (viii) the said anchor tenants are high value brands and are crowd pullers in their own right; (ix) AKM, contrary to assurances and representations made to Vesta and in breach of its contractual obligations, diverted the entire payment of Rs.25 crores received from Vesta to other projects of the MBD Group and did not complete the Mall building so as to make available for fit outs the specified areas leased to the five brands aforesaid; (x) by February, 2008, it became clear to Vesta that AKM was not in a position to hand over the possession to the five brands/anchor tenants named in the MOU and as such was not in a position to handover the symbolic po