Birmala Projects Pvt. Ltd. Vs Ashwani Ahluwalia (Bombay High Court)
Bombay High Court held that mere receipt of cash in violation of Section 269ST does not, by itself, render the underlying agreement void or unenforceable in a Civil Court. Statutory penalty prescribed for contravention of Section 269ST is imposed upon the recipient and not the payer, and the imposition of such a penalty does not automatically nullify the underlying transaction.
Facts- The plaintiff entity is a company engaged in the business of constructing and redeveloping immovable properties, either on a contractual or collaborative basis, and subsequently selling such properties. The Defendant No. 1 is the absolute owner of the suit property.
In late November 2019, the plaintiff, through its Directors, learnt that the suit property was available for collaboration. Acting on this information, the plaintiff initiated negotiations with the defendants. The plaintiffs sought to re-develop the property, consisting of a Basement, Stilt, and Ground to Third Floors. The defendants shared the title documents and proposed terms of consideration and sharing of the redeveloped property.
The parties entered into a Collaboration Agreement for redevelopment, agreeing that in exchange for constructing the property and paying ₹4.75 crore.
On 05.12.2019, the defendants requested ₹50,00,000/- in cash, purportedly citing the marriage of the daughter of defendant No.1 on 07.12.2019. The plaintiff arranged the payment, which was handed over in cash. Defendant No.1 signed a Memorandum of Understanding (MoU)-cum-Receipt, confirming the receipt and agreed to execute the Collaboration Agreement post-marriage. On 09.12.2019, the defendants executed the Collaboration Agreement, acknowledged balance payments, and handed over the possession of the Basement and Ground Floor to the plaintiff, on execution of a possession letter.
