N. Patherya, J. - (1.) This is an application for attachment before judgment. Inspite of receipt of sums, goods have not been delivered and as the assets of the respondents are beyond the reach of the court unless protected, the petitioner will suffer irreparable prejudice.
(2.) Petitioner's case 2.1 The case of the petitioner is that sums by cheque were paid to the respondent. It is entitled to such sums and the claim is for refund of Rs. 9 crores advanced for goods which were not delivered. Damages have also been claimed. Each of the payments was made by cheque to Padma Logistics (Padma). There is no dispute regarding the agreement nor are the documents disputed. From nowhere in the agreement will it appear that Padma is the Principal and the respondent No. 1 is its agent. In the correspondence exchanged the respondent No. 1 has not disclosed itself as the agent of Padma. Therefore, for an undisclosed principal, the agent is liable. The delivery dates expired and by non -delivery breach occurred in August, 2008. Therefore, the petitioner sought refund of sums or alternatively supply of goods. The proposal given was accepted by the petitioner with a counter proposal which constitutes an offer. There is no dispute with regard to the price agreed but there is no reference to Padma. Therefore the principal continued to be unknown. Assuming Padma is a nominee the paid up capital of Padma is Rs. 5 lakhs and the balance sheet of 2007 - 2008 of the respondent No. 1 shows a loan of Rs. 12.54 crores from Padma. This is not found in the balance sheet of 2006 - 2007 which shows 'NIL'. The payment made is between January and March, 2008 while incorporation is on 8th February, 2007 and although it is a sundry debtor no adjustment has been shown instead the loss has been carried over. 2.2 The respondent No. 1 has a 10% share -holding in Mid -East Integrated Steel Ltd. (MISL). As MISL was in financial difficulty the respondent No. 1 sought a direction from the Delhi High Court to sell the shares to Stemcor Singapore and on 2nd February, 2006, an order was passed by the Delhi High Court and therefore 1,37,87,500 shares of MISL held by respondent No. 1 was allegedly transferred to Stemcor Singapore (respondent No. 2). No document of transfer has been disclosed. No price paid. Therefore, no transfer has taken place and the shares of MISL are still held by the respondent No. 1. 2.3 As regards the shares of Brahmani Alloys there is no detail of transfer to Stemcor Cyprus and the details have been available from the website. Such transfer has been effected on 19th August, 2008 that is after the demand of 9th June, 2008 and 7th July, 2008. Therefore, the pleading in paragraph 14 (vi) of the affidavit filed on behalf of the respondent No. 1 is false. 2.4 As regards the respondent No. 1's share -holding in Aryan mining and Trading Corporation Pvt. Ltd. on 31 -03 -2008 was restricted to 2.5 only 66,666 shares. 2.5 The respondent No. 1 is an investment and trading company. There is no document to show that it is the agent of Padma. It exercises direct control in respect of supply from the Mines of MISL and it has a shareholding in MISL. 2.6 The falsity of the case made out in the opposition prima facie has been proved as the delivery order is to be issued by the mining officer but has, in fact, been issued by the mining company, i.e., MISL. Instruments aggregating to Rs. 40 crores on presentation was not honoured on the ground of discrepancy and therefore the suit against the banker has been filed. The control of the respondent No. 1 in MISL is evident and pursuant to order of the Delhi High Court the shares have been transferred by the respondent No. 1 to the respondent No. 2. On 28th September, 2007 the shares held by respondent No. 1 in MISL was 1,37,87, 500/ -. The shares held by the respondent No. 1 transfers made after the demand letter of Brahmani shares and the respondent No. 1 being a Trading Company entitles the petitioner to orders of attachment and injunction under order 39 Rule 1 b as held in AIR 1976 Allahabad 447. 2.7 The transaction are commercial in nature and time is the essence of the contract as held in : AIR 1961 SC 1295 and extension cannot be unilateral as held in : AIR 1946 Bombay 1. 2.8 For all the said reasons the order be continued.
(3.) Respondent's case 3.1 Counsel for the respondents submit that the claim of the petitioner is a Money claim and as an unsecured creditor the petitioner is not entitled to any order of attachment. It is for supply of Iron Ore that Rs. 9 crores was advanced. An offer was made on 24th September, 2008 by the petitioner and two proposals were suggested but no time limit was given. Such offer was not withdrawn, in fact by letter dated 27th October, 2008 the respondents have expressed its readiness and willingness to accept one of the proposals therein. To this there has been no immediate response from the petitioner and therefore the claim for money cannot lie. No breach has been committed, as the offer has been accepted therefore the termination is baseless. The letter of 11th November 2008 was sent after the reminder and from the correspondence exchanged it will appear though a request to lift the material was made, no reply was forthcoming indicating the lifting date. The contract stands concluded between the parties. In fact a lifting schedule was also sought but no schedule was forwarded, instead on 23rd December, 2008 the suit was filed and interim order passed. 3.2 On 27th October, 2008 the earlier contract was innovated and pursuant thereto the respondent No. 1 has through correspondence expressed its readiness and willingness to perform its part. The correspondence exchanged after 24th September, 2008 have not been disclosed to Court and therefore there has been suppression and on this ground alone the order passed is liable to be vacated. In view of the correspondence exchanged between the parties after 24th September, 2008 the claim of Rs. 9 crore cannot be maintained as by virtue of the second contract the earlier contract stood innovated and price adjustment was also provided. There has been no breach by the respondent No. 1 as it is willing to deliver the goods. The payments to Padma were made as the goods were booked to the account of Padma. Therefore, Padma is the principal and the respondent No. 1 is its agent. This was known to the petitioner and the pleading in paragraph 7 of the petition, therefore, is incorrect. As the principal has been disclosed the suit filed is barred under Sec. 230 of the Contract Act and the suit should have been filed against Padma and not against the agent. 3.3 Under the second innovated agreement the sum of Rs. 6 crore has been claimed whereas payment to be made was Rs. 6.20 crore. The said sum has also not been paid. Padma has sufficient funds for recovery. In the petition it has been alleged that 100% advance payment was made but till 21st February, 2008 full payment was not made. From the balance sheet it will appear that the profit of the respondent No. 1 has increased and there is sufficient bank balance. In fact Rs. 55 crores was invested for revival of MISL. Loans and advance have also been made. The shares of MISL have not been acquired by respondent No. 1 nor such shares or its acquisition find reflection in the balance sheet of 2007 - 2008. No payment has been made for purchase of the share as these purchases were of Stemcor Singapore, pursuant to order of Delhi High Court on 2nd February, 2006 and the agreement of August, 2005. 3.4 As regards the shares of Brahmani even after notices were issued the parties negotiated. Therefore, there was no question of eminent threat to sell. The FEMA Rules have to be complied as the sale was to a cyprus company and pursuant thereto the sale has been effected and consideration received on 6th August, 2008. The sale is as per the CCI guideline and Clause 51 of the FEMA Rules. Therefore, the Brahmani shares were sold prior to filing of the suit and the interim order passed be vacated. 3.5 As regards the shares of Aryan mining there has been purchase of shares worth Rs. 136 crore after the issuance of notice. Therefore, the shares of Aryan mining held by the respondent No. 1 at present is 4,72,066 shares which is eight times more than the shares held by respondent No. 1 in Aryan at the time of notice. 3.6 The claim of the petitioner is of an unsecured creditor. The fact that the respondent No. 1 is a running business has a networth of Rs. 34 crores, has purchased shares of Rs. 133 crore will prove that the apprehension of the petitioner is unjustified. Applying the test of AIR 1951 Calcutta 156 no order can be passed on this application. No case of defrauding has been made out. As an order of injunction is in aid of attachment and if the attachment is bad, no injunction can be granted. 3.7 Sec. 53 of the Transfer of Property Act is not applicable as the suit has not been filed under Sec. 53A of the Transfer of Property Act. In the unreported decision of Popular Jute it has been held that no security can be provided for damages and therefore, the decision reported in : AIR 1946 Bombay 1 is distinguishable on facts and there was no unilateral extension of the agreement as in the instant case. : AIR 1976 Allahabad 447 is distinguishable, as therein a decree had been passed. : AIR 1961 SC 1295 is distinguishable on facts and there is no dispute with the principles laid down therein. In conclusion the entire procedure adopted is harassing and the order passed be vacated. 3.8 Counsel for the petitioner, in reply, submits that from the respondent's email dated 27th October, 2008, it will be clear that a counter offer was made by the respondents and, therefore, there has been no novation of contract. The price of CLO 5 -18 is not mentioned either in the original order or in the counter offer. Therefore, the parties were not ad idem on specification, price or delivery period and there can be no novation. The alteration of terms by one party is not binding on the other party. 3.9 The plea that the respondent No. 1 is the agent of Padma, is an afterthought and an attempt to avoid liability as the respondent No. 1 at no point of time prior to filing of the instant suit mentioned it was the agent of Padma. Monies paid to Padma is reflected in the respondent No. 1's balance sheet in the form of interest free unsecured loan. It is only upon receipt of sums that the respondents agreed to supply the goods. Padma was incorporated in February 2007 with a paid up capital of Rs. 2 lakhs while the respondent No. 1 was incorporated in 2003 with paid up capital of Rs. 31 crores. Therefore, it is unbelievable that Padma is the principal of the respondent No. 1. There is no doubt that the respondent No. 1 has close relation with MISL and holds 10 percent share in MISL. Mr. Mathew Stock is a common director of the respondent No. 1 and MISL. 3.10 Huge sums have been invested in MISL by the respondent No. 1 and the delivery orders issued by MISL were forwarded to the petitioner by the respondent No. 1. In fact, delivery order has also been issued and amended or cancelled as per the directives of the respondent No. 1. No affidavit from Padma has been produced and therefore, Padma will not be bound by the respondent's contention. Padma may disown the respondent No. 1 as an agent and thereby avoid all liabilities. Therefore, not only is the respondent disowning its liability but is also leaving it open for Padma to disown such liability. Padma has not been mentioned as the principal by the respondent in any of the correspondences. No application has been filed by Padma for addition of parties. Therefore, the case of agency cannot be sustained and Sec. 230 of the Contract Act has no application. 3.11 The respondent is a part of Stemcor Holding Limited and the said group may have business in various parts of the world but the decree against the respondent cannot be executed against the holding company. 3.12 The allegations that the suit is a counterblast to stall payment to Stemcor U.K. Limited is not true as proceeding have been filed in this Court against Stemcor U.K. Limited. 3.13 With knowledge of the petitioner's claim and after receipt of notices of demand the respondent has removed its assets to Cyprus and Singapore outside the jurisdiction of this Court and this in itself shows the intent of the respondent to delay or obstruct execution of decree. 3.14 The respondent is a trading company and upon receipt of notice of demand transferred the shareholding of Brahmani in August 2008 and unless the order is continued the shares of Aryan may also be transferred. It is true that the respondents make profit but such profits cannot be attached. Profits are not assets and nowhere the respondent stated that such profits have been invested in acquiring assets. The profits may have increased but the assets have not and therefore making of profits is irrelevant. 3.15 The petitioner in view of the said facts is entitled to independently seek an order of injunction under Order 39 Rule 1(b) of the Code of Civil Procedure.;