Vipin Malik & Anr. vs. Pacl INDIA LTD. & Ors.

Facts

The Decree Holders, Vipin Malik and Vipin Malik HUF, filed an execution petition seeking to enforce a judgment and decree dated September 5, 2019, as modified on November 15, 2019. The decree directed PACL India Ltd. (Judgment Debtor No. 1) to pay a total sum of Rs. 2,14,36,537/- along with interest and costs of Rs. 10,16,057/-. The original suit arose from lease deeds for two flats entered into between the parties. The Judgment Debtor ceased rental payments from November 23, 2014, and failed to pay house tax and maintenance charges. The Judgment Debtor's bank accounts were frozen by the CBI. A Supreme Court order dated February 2, 2016, constituted the Lodha Committee to sell PACL India Ltd.'s land to repay investors. The Decree Holders approached the Lodha Committee for payment, but it was clarified that the committee's mandate was limited to selling properties and refunding investors, not settling rental dues. The Decree Holders then filed the present execution petition.

Held

The Court held that the Lodha Committee's mandate, as established by the Supreme Court's order dated February 2, 2016, was strictly limited to the sale of PACL India Ltd.'s properties and the disbursement of sale proceeds to the investors. The Committee explicitly stated in its communication dated January 1, 2020, that it was not concerned with matters outside of property sales and investor refunds. Therefore, the Committee could not satisfy the decree for rental arrears and GST owed to the Decree Holders. The Court noted that the Judgment Debtor was not appearing, and there were no means to secure payment as the known assets were under the control of the Lodha Committee. Consequently, the execution petition was disposed of, granting liberty to the Decree Holders to pursue their remedies in accordance with law, including filing an application before the Supreme Court by placing the copy of the judgment and decree.

Key Issues

1. Whether the Lodha Committee, constituted by the Supreme Court to sell PACL India Ltd.'s properties for investor refunds, has the mandate to satisfy the decree for rental arrears and GST owed to the Decree Holders? (Question of law) Petitioner's arguments: The Decree Holders argued that the Lodha Committee's function was to dispose of PACL India Ltd.'s assets, and the decretal amount was due from these assets. They sought payment from the funds controlled by the Committee. They also relied on the modified judgment and decree which quantified the total amount due, including service tax/GST. Revenue/State's arguments: The judgment records no specific arguments from the Revenue or State. However, the Lodha Committee, through its letter dated January 1, 2020, clarified that it was only concerned with the sale of properties of PACL Limited and effecting refunds to investors, and not with matters not connected to these functions. This indicates the Committee's stance that the Decree Holders' claim fell outside its purview.