Background
1. The Society had concluded a contract with M / S Chand Construction Co. on 26 Jun 1998 for ‘External Electrification & Sub Station Works’ at the Society premises. Having executed the work, M / S Chand Construction Co. submitted the pre-final bill of Rs 11, 12, 886/- to the Society on 10 Oct 1999 for payment. The Society issued an Account Payee Cheque No 484239 dated 30 Mar 2000 for Rs 11, 12, 886/- to M / S Chand Construction Co. which bounced when the Company presented it to their bankers due to insufficient balance in Society’s account.
1. The Society had concluded a contract with M / S Chand Construction Co. on 26 Jun 1998 for ‘External Electrification & Sub Station Works’ at the Society premises. Having executed the work, M / S Chand Construction Co. submitted the pre-final bill of Rs 11, 12, 886/- to the Society on 10 Oct 1999 for payment. The Society issued an Account Payee Cheque No 484239 dated 30 Mar 2000 for Rs 11, 12, 886/- to M / S Chand Construction Co. which bounced when the Company presented it to their bankers due to insufficient balance in Society’s account.
2. M / S Chand Construction Co. continued to remind the Society of the pending dues and finally, on 31 Jan 2001, pointed out that another amount of Rs 3, 58, 140/- being security deposit, was also refundable by the Society to M / S Chand Construction Co. The Society was, therefore, requested to make the payment of Rs 14, 71, 020/- to M / S Chand Constructions Co. This amount was also checked and verified to be correct by the Society’s architect.
Facts of the Case
Facts of the Case
3. On 01 Nov 2001, the Society admitted before Shri BD Arora, Sole Arbitrator hearing the case that the claim of M / S Chand Construction Co. was correct. The hearing by the Sole Arbitrator was adjourned 19 times on request of the Society. On 18 Aug 2003, the Sole Arbitrator directed the Society to pay Rs 14, 71, 026/-, the principal amount plus Rs 65, 000/- as costs alongwith interest @ 12 % per annum from 01 Nov 2000 till the date of payment to M / S Chand Construction Co.
4. Inexplicably, the Society appealed against the award of Sole Arbitrator in the court of Addl District & Session Judge Shri Vimal Kumar Yadav and the award was set aside on technical grounds on 07 Sep 2005. M / S Chand Construction Co. filed an appeal in the High Court of Delhi against the order of Addl District & Sessions Judge Shri Vimal Kumar Yadav. The High Court, on 17 Dec 2007, upheld the award of Sole Arbitrator and directed the Society to make the payments as directed by the Sole Arbitrator and additional Rs 10,000/- for legal costs paid by M / S Chand Construction Co. The then MC, deliberately concealed the High Court order from members in the GBM held on 25 Dec 2007. In fact, the High Court order was never notified to the members.
5. When M / S Chand Construction Co. did not see any reaction from the Society to the orders of the Hon’ble High Court, it applied to the Court of District Judge, Delhi for execution of the High Court judgment and decree dated 17 Dec 2007 and the request included attachment of the Society’s Office and movable properties like furniture, computers, vehicles for recovery of a sum of Rs 29, 64, 656.13 with post decretal interest @ 12 % p.a. from 01 Mar 2008 on the sum of Rs 29, 64, 656.13 till the date of payment.
6. The Court of Shri BS Chumbak, ADS Judge, Tis Hazari Court, Delhi issued a ‘Show Cause Notice’ dated 19 Jul 2008 to the MC and fixed the hearing for18 Aug 2008. On 18 Aug 2008, neither any member of the MC nor the Society’s counselor was present in the Court to present the Society’s stand. The Judge ordered the court bailiff to visit the Society on 01 Oct 2008 to prepare an inventory of the items, including the Society office that can be attached to recover the dues owed to M/S Chand Construction Co. The Court has set 31 Oct 2008 as the date for passing the final order for attachment of the Society’s effects.
Change of Management
6. The elections of Management Committee were held on 23 Aug 2008 and the new MC assumed charge with effect from 15 Sep 2008. Having inherited the Chand construction case in above detailed form, the MC set about establishing contact with the Company on its own to negotiate a settlement and reduce the actual amount to be paid to as low as was possible.
Negotiations
7. A ‘negotiating team’ was formed from amongst the new MC members, who met Mr Sumeet Chand and his lawyer on 21 Sep 2008 and again on 05 Oct 2008 to negotiate a better deal for the Society and save the members’ hard earned money. The high lights of the negotiations are enumerated below:
(a) Total amount to be paid to Chand Construction Co was brought down from over Rs 32 lakhs to Rs 20 lakhs.
(b) Rs one lakh was paid through HDFC Cheque No 728922 dated 05 Oct 2008 as a mark of the Society’s sincerity in negotiating a settlement.
(c) Rs four lakh is to be paid on 06 Oct 2008 on signing the ‘Agreement’ with Mr Chand.
(d) Complete principal amount of Rs 14, 71, 026/- plus legal costs amounting to Rs 75, 000/- is to be paid to Chand Construction Co. by 31 Oct 2008.
(e) The ‘negotiating team’ was informed by Mr Chand that the previous MC had thwarted all attempts by him and his lawyer to negotiate and settle for payment of just the principal amount of Rs 14, 71, 026/-.
(f) The ‘negotiating team’ was also informed that Mr Sanjeev Gupta, the lawyer handling the case on behalf of the Society had contacted the Company and advised them not to lower the payment to be made by the Society below 35 to 40 lakhs as the Society had flats that could be sold to raise that amount.
The Agreement on 06 Oct 2008
8. Mr Sumeet Chand, son of late Shri SP Chand and the legal heir of decree holder, was invited to the Society office at 2000 hrs on 20 Oct 2008 to conclude the final Agreement on payments to be made. All MC members less Brig Rakesh Goel and Mr LC Tomar were present to participate in the discussions. Shri Suresh Srivastava was in attendance as an independent witness. Highlights of the Agreement signed between the MC and Chand Construction Co. are as follows:-
(a) Rs 20 lakhs will be the total amount to be paid to Chand Construction Co.
(b) Rs five lakhs to be paid by 06 Oct 2008. Accordingly, HDFC Cheque No 728923 dated 05 Oct 2008 for Rs four lakhs payable to Chand Construction Co was handed over to Mr Sumeet Chand. ( HDFC Cheque No 728922 dated 05 Oct 2008 had already been handed over on 05 Oct 2008).
(c) Rs 11 lakhs is to be paid by the Society by 31 Oct 2008 i.e. before the date set by Court of Shri BS Chumbak, ADS Judge, Tis Hazari Court for passing the final order.
(d) Balance of Rs four lakhs is to be paid by the Society on or before 15 Nov 2008.
(e) If the Society defaults in keeping the above schedule, for any reason whatsoever, then the Agreement would stand abrogated and the Society will have to pay the entire amount of over Rs 32 Lakhs as ordered by the High Court.
Change of Management
6. The elections of Management Committee were held on 23 Aug 2008 and the new MC assumed charge with effect from 15 Sep 2008. Having inherited the Chand construction case in above detailed form, the MC set about establishing contact with the Company on its own to negotiate a settlement and reduce the actual amount to be paid to as low as was possible.
Negotiations
7. A ‘negotiating team’ was formed from amongst the new MC members, who met Mr Sumeet Chand and his lawyer on 21 Sep 2008 and again on 05 Oct 2008 to negotiate a better deal for the Society and save the members’ hard earned money. The high lights of the negotiations are enumerated below:
(a) Total amount to be paid to Chand Construction Co was brought down from over Rs 32 lakhs to Rs 20 lakhs.
(b) Rs one lakh was paid through HDFC Cheque No 728922 dated 05 Oct 2008 as a mark of the Society’s sincerity in negotiating a settlement.
(c) Rs four lakh is to be paid on 06 Oct 2008 on signing the ‘Agreement’ with Mr Chand.
(d) Complete principal amount of Rs 14, 71, 026/- plus legal costs amounting to Rs 75, 000/- is to be paid to Chand Construction Co. by 31 Oct 2008.
(e) The ‘negotiating team’ was informed by Mr Chand that the previous MC had thwarted all attempts by him and his lawyer to negotiate and settle for payment of just the principal amount of Rs 14, 71, 026/-.
(f) The ‘negotiating team’ was also informed that Mr Sanjeev Gupta, the lawyer handling the case on behalf of the Society had contacted the Company and advised them not to lower the payment to be made by the Society below 35 to 40 lakhs as the Society had flats that could be sold to raise that amount.
The Agreement on 06 Oct 2008
8. Mr Sumeet Chand, son of late Shri SP Chand and the legal heir of decree holder, was invited to the Society office at 2000 hrs on 20 Oct 2008 to conclude the final Agreement on payments to be made. All MC members less Brig Rakesh Goel and Mr LC Tomar were present to participate in the discussions. Shri Suresh Srivastava was in attendance as an independent witness. Highlights of the Agreement signed between the MC and Chand Construction Co. are as follows:-
(a) Rs 20 lakhs will be the total amount to be paid to Chand Construction Co.
(b) Rs five lakhs to be paid by 06 Oct 2008. Accordingly, HDFC Cheque No 728923 dated 05 Oct 2008 for Rs four lakhs payable to Chand Construction Co was handed over to Mr Sumeet Chand. ( HDFC Cheque No 728922 dated 05 Oct 2008 had already been handed over on 05 Oct 2008).
(c) Rs 11 lakhs is to be paid by the Society by 31 Oct 2008 i.e. before the date set by Court of Shri BS Chumbak, ADS Judge, Tis Hazari Court for passing the final order.
(d) Balance of Rs four lakhs is to be paid by the Society on or before 15 Nov 2008.
(e) If the Society defaults in keeping the above schedule, for any reason whatsoever, then the Agreement would stand abrogated and the Society will have to pay the entire amount of over Rs 32 Lakhs as ordered by the High Court.
9. The Agreement signed between DIN CGHS Ltd and Chand Construction Co will be presented in the Court of Shri BS Chumbak, ADS Judge, Tis Hazari Court on 31 Oct 2008 to conclude the case.
Conclusion
10. The ‘negotiating team’ initially faced an uphill task in dealing with Mr Chand and his lawyer as the proprietors of Chand Construction Co. were earlier maltreated by the previous MC members.
11. We had to face a humiliating situation while attempting to establish the sincerity of the new MC to resolve the issue amicably. Subsequently though, a rapport was established with Mr Chand and it became possible to have the due amount reduced from Rs 32 lakhs to Rs 20 Lakhs.
Conclusion
10. The ‘negotiating team’ initially faced an uphill task in dealing with Mr Chand and his lawyer as the proprietors of Chand Construction Co. were earlier maltreated by the previous MC members.
11. We had to face a humiliating situation while attempting to establish the sincerity of the new MC to resolve the issue amicably. Subsequently though, a rapport was established with Mr Chand and it became possible to have the due amount reduced from Rs 32 lakhs to Rs 20 Lakhs.
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