IIFL Finance Ltd. v. IIFL Home Finance Ltd.

Judgment

1. Paramvir Developers Pvt. Ltd. A Company incorporated under the provisions of the Companies Act, 2013, (CIN No. U70100MH2021PTC364702, Having registered address at 105, Balkrishna Nivas, 2nd and 4th Road, Ammore Comm Premises CHS, Khar West, Mumbai 400 052

2. Paramvir Real Estate Pvt. Ltd. A Company incorporated under the provisions of the Companies Act, 2013, (CIN No. U45201MH202PTC364710, Having registered address at 105, Balkrishna Nivas, 2nd and 4th Road, Ammore Comm Premises CHS, Khar West, Mumbai 400 052

3. K Mordani Constructions Pvt. Ltd. A Company incorporated under the provisions of the Companies Act, 2013, (CIN No. U70109MH2021PTC364239, Having registered address at 105, Balkrishna Nivas, 2nd and 4th Road, Ammore Comm Premises CHS, Khar West, Mumbai 400 052.

4. Koel Developers Pvt. Ltd. A Company incorporated under the provisions of the Companies Act, 2013, (CIN No. U74900MH2021PTC367663, Having registered address at 105, Balkrishna Nivas, 2nd and 4th Road, Ammore Comm Premises CHS, Khar West, Mumbai 400 052.

5. Kumar Mordani Adult, Indian inhabitant, Age :45 Occupation : Business, having office address at 105, Balkrishna Nivas, 2nd and 4th Road, Ammore Comm Premises CHS, Khar West, Mumbai 400 052.

6. K Mordani Realty A proprietary concern of plaintiff No. 5, having its registered office at 105, Balkrishna Nivas, 2nd and 4th Road, Ammore Comm Premises CHS, Khar West, Mumbai 400 052.

7. Paramvir Builders LLP A limited liability partnership incorporated under the Limited Liability Partnership Act, 2008, having registered office at 105, Balkrishna Nivas, 2nd and 4th road, Ammore Comm Premises CHS, Khar West, Mumbai 400 052.

8. Gayatri Mordani Adult, Indian inhabitant, Age:42, Occupation : Business, having office address at 105, Balkrishna Nivas, 2nd and 4th Road, Ammore Comm Premises CHS, Khar West, Mumbai 400 052.

9. Mahek Mordani Adult, Indian inhabitant, Age : 43, Occupation : Business having office address at 105, Balkrishna Nivas, 2nd and 4th Road, Ammore Comm Premises CHS, Khar West, Mumbai 400 052.

10. Kishore Mordani Adult, Indian inhabitant, Age : 46, Occupation : Business having office address at 105, Balkrishna Nivas, 2nd and 4th Road, Ammore Comm Premises CHS, Khar West, Mumbai 400 052.

11. Kanayalal Mordani Adult, Indian inhabitant, Age : 75, Occupation : Business having office address at 105, Balkrishna Nivas, 2nd and 4th Road, Ammore Comm Premises CHS, Khar West, Mumbai 400 052.

12. K Mordani Real Estate Pvt. Ltd. A Company incorporated under the provisions of the Companies Act, 2013, (CIN No. U70200MI-12019PTC321124, Having registered address at 105, Balkrishna Nivas, 2nd and 4th Road, Ammore Comm Premises CHS, Khar West, Mumbai 400 052.

13. MNK Builders LLP A limited liability partnership incorporated under the Limited Liability Partnership, Act, 2008 having its registered address at 105, balkrishna Nivas, 2nd and 4th Road, Ammore Comm Premises CHS, Khar West, Mumbai 400 052.

14. Reshma Mordani Adult, Indian inhabitant, Age : 73, Occupation : Business having office address at 105, Balkrishna Nivas, 2nd and 4th Road, Ammore Comm Premises CHS, Khar West, Mumbai 400 052.

...Plaintiffs VERSUS

1. IIFL Finance Ltd. A company incorporated under the Provisions of the Companies Act, 2013, (CIN No.) L67100MH1995PLC093797 having its registered office at IIFL House, Sun Infotech Park, Road No. 16V, Plot No. B-223, Thane Industrial Area, Wagle Estate, Thane 400 064.

2. IIFL Home Finance Ltd. A company incorporated under the 2013, (CIN No.) U65993MH2006PLC166475 having its registered office at IIFL House, Sun Infotech Park, Road No. 16V, Plot No. B-223, Thane Industrial Area, Wagle Estate, Thane 400 064.

3. Vensco Developers LLP A Limited Liability partnership incorporated under the provisions of the Limited Liability Partnership Act, 2008, having its registered office at 72, Tower A, Kalapataru Sunrise Kolshet Road, Thane, Chitalsar Manpada, Thane 400 607. …. Defendants CORAM : GAURI GODSE, J. RESERVED ON: 23rd DECEMBER 2025 PRONOUNCED ON: 4th APRIL 2026 JUDGMENT:

1. These applications are filed by the Defendants for rejection of the plaint under Order VII Rule 11 of the Civil Procedure Code, 1908 (“CPC”), on the grounds of non- compliance with Section 12-A of the Commercial Courts Act, 2015 (“said Act”), bar under Section 41 of the Specific Relief Act, 1963 and Section 34 of the The Securitisation And Reconstruction Of Financial Assets and Enforcement Of Security Interest Act, 2002 (SARFAESI Act).

2. The suit is filed for specific performance of the Framework Agreement dated 20th December 2024 by discharging the plaintiffs and the entire Mordani Group from all liabilities in relation to the loan facilities availed from defendant nos. 1 and 2, including all security interests created by them, by accepting the premises in compliance with the Framework Agreement. The plaintiffs have also prayed for a declaration that, in view of the Framework Agreement, no amount is due and payable by the plaintiffs. The plaintiffs have therefore prayed for directions to release the securities on the ground of the execution of the Framework Agreement.

3. In view of the apprehension that defendant nos. 1 and 2 shall take steps in furtherance of the terms and conditions of the loan documents and take precipitative steps in respect of the secured assets, the plaintiffs filed the suit without complying with the mandatory requirement under Section 12-A of the said Act. Hence, by way of interim relief, the plaintiffs prayed for an injunction restraining defendant nos. 1 and 2 from dealing with, transferring, or creating third-party rights in respect of the plaintiffs’ three projects referred to in the Framework Agreement, and from not enforcing the security under the loan agreements. SUBMISSIONS ON BEHALF OF DEFENDANT NO.1:

4. The plaintiffs are all part of the Mordani Group and are engaged in developing real estate projects. Defendant nos.1 and 2 are non-banking financial companies engaged in the business of providing loans/finance. Defendant no.3 is a real estate developer and was the nominee developer of defendant no.1 for the purpose of the transfer of projects under the Framework Agreement entered into by Mordani Group and defendant nos. 1 and 2. The agreements were executed by the Mordani Group to avail loan facilities from defendant nos. 1 and 2 for the development of their real estate projects, including the projects known as La Maison, Signature Suits, and Celyn Project.

5. The plaint alleges that defendant nos. 1 and 2 are signatories to a so-called “Framework Agreement” dated 20th December 2024, which purportedly recorded a composite resolution of all loan facilities. The Framework Agreement forms part of the plaint and records that the Mordani Group was required to perform its obligations by 31st December 2024, and if the Mordani Group failed to perform its obligations by the end of business hours on 31st December 2024, the composite settlement and the Framework Agreement will automatically and forthwith come to an end and stand revoked, cancelled and terminated without any act of the parties. In the event of failure, the parties will be relegated to the same position they held prior to the Execution Date, as if the composite settlement had never been reached or agreed upon, and as if the agreement had never been executed. Admittedly, Mordani Group did not comply with its obligations under the Framework Agreement; hence, the Framework Agreement stood terminated.

6. The suit is allegedly moved with great urgency since defendant no.2 has allegedly begun taking precipitative steps and taken possession of the secured asset, and there is a purported failure on the part of the defendants in complying with the obligations under the Framework Agreement, and that the defendants will purportedly misuse the development rights assigned/transferred/novated in favour of defendant nos. 3 without complying with the terms of the Framework Agreement/MOU/Profit Sharing Agreement.

7. Admittedly, the plaintiffs have not complied with the procedure prescribed under Section 12-A of the said Act. It is well-settled that while examining an objection under Order VII Rule 11 of the CPC, a meaningful, not a formal, reading of the plaint must be done to determine whether it warrants the exercise of powers of rejection. If the Court finds that the plaint does not disclose any cause of action or that the suit is barred by any law, the court has no option but to reject the plaint. To support his submissions, learned senior counsel for defendant no. 1 relied upon the Apex Court’s decision in Dahiben v. Arvindbhai Kalyanji Bhanusali1.

8. To support the objection on the ground of non-compliance with the mandatory provision under Section 12-A of the said Act, he relied upon the Apex Court’s decisions in Patil Automation Private Limited & Ors. v. Rakheja Engineers Private Limited2, Yamini Manohar v. T.K.D. Keerthi3 and Dhanbad Fuels Private Limited v. Union of India4. He submitted that it is observed by the Apex Court that the plaintiffs have no right to paralyse Section 12-A by making a camouflage prayer for urgent interim relief under the guise of bypassing the statutory mandate of pre- litigation mediation. When deception and falsity are apparent or established, the plaint deserves to be rejected.

9. Learned senior counsel for defendant no. 1, therefore, 1 2 3 4