Money depository rules should be Embodied in every court, authority or tribunal order

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While hearing K.L. Suneja vs Dr. (Mrs.) Manjeet Kaur Monga (D) through her LR & Anr. case, the Supreme Court stated that all the courts and judicial forums should frame guidelines in cases where amounts are deposited, mandatorily in banks or any financial institution for ensuring no loss in the future. The bench comprising Justices M.R. Shah and S. Ravindra Bhat stated that “Such guidelines should also cover situations where the concerned litigant merely files the instrument (Pay Order, Demand Draft, Banker’s Cheque, etc.) without seeking any order.” Moreover, these guidelines should be embodied in the form of appropriate rules and regulations of each court, authority, tribunal, etc. exercising adjudicatory power. 

In this case, there were two appeals preferred against a common order of the National Company Law Appellate Tribunal (NCLAT). The first was by the original home buyer’s legal representative, and the second was by the builder/developer. The developer issued a letter thereafter, canceling the allotment of the complainant’s flat on 30th April 2005. On the other side, the complainant had already deposited seven installments, ₹ 4,53,750/-. With the cancellation letter, the developer enclosed a Pay Order issued by Citibank towards a full refund of payments made by the complainant towards the flat. The notice alleged that even 40% of the construction work had not been completed till the seventh installment, though the complainant had paid a cumulative of ₹ 4,53,750/-

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The Complainant demanded possession of the flat besides claiming ₹ 25,00,000/- as compensation and returned the Pay Order along with the notice. Also, she sent a cheque of ₹1,00,000/- expressing willingness to pay the price of the flat. The case was presented before the Supreme Court bench which observed that both these issues were not considered by COMPAT because these aspects were not addressed and Citibank was not a party before the Tribunal. They further added that 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 this context, the top Court stated that “the developer’s argument that the rule embodied in Order XXI, Rule 4 CPC, is applicable, is merited.” Moreover, the developer cannot be fastened with any legal liability to pay interest on the sum of ₹ 4,53,750/- after 30th April 2005. They opined that all courts and judicial forums should frame guidelines in cases where amounts are deposited with the office/registry of the court/tribunal, that such amounts should mandatorily be deposited in a bank or some financial institution, to ensure that no loss is caused in the future. Therefore, the present appeal was allowed by the Supreme Court bench.

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