Nbcc India Limited vs Gnc Infra Llp & Anr.

* IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment Reserved on: 11.05.2026
% Judgment Delivered on: 15.06.2026
+ CM(M) 1181/2022 & CM Nos. 47354/2022, 47355/2022,
42813/2025 & 60377/2025
NBCC INDIA LIMITED .....Petitioner
versus
GNC INFRA LLP & ANR. .....Respondents
Advocates who appeared in this case
For the Petitioner : Mr. Mohit Arora, Advocate
For the Respondents : Mr. Alok Bhachawat, Mr. Ishan Jain
& Mr. Vishnu Dhangal, Advocates.
CORAM:
HON'BLE MR. JUSTICE TEJAS KARIA
JUDGMENT
TEJAS KARIA, J
INTRODUCTION
1. The present Petition assails the Order dated 27.09.2022 (“ Impugned
Order ”) passed by the Court of Ms. Nirja Bhatia, District Judge
(Commercial Court-06), South-East District, Saket District Courts (“ Trial
Court ”), in CS (Comm) No. 350/2020 (“ Suit ”), instituted by Respondent
No. 1 against Respondent No. 2 and the Petitioner, who were arrayed as
Defendant Nos. 1 and 2, respectively.
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:15.06.2026
19:02:09
CM(M) 1181/2022 Page 1 of 19

FACTUAL MATRIX
2. In the Suit, it is the case of Respondent No. 1 / the Plaintiff that:
2.1. On 02.09.2015, the Petitioner awarded a contract to Respondent
No. 2, vide a Letter of Award, for the construction of the National
Investigation Agency (“ NIA ”) Branch Office, Residential
Building, and allied works at HI-Tech City, Hyderabad, Telangana
(“ Project ”). Pursuant thereto, an agreement was executed between
the Petitioner and Respondent No. 2 on 26.10.2015.
2.2. After the award of the work to Respondent No. 2, Respondent No.
2 further sub-contracted the same to Respondent No. 1. Owing to
payment disputes, the sub-contract was mutually terminated.
Thereafter, on 10.11.2018, Respondent No. 1 and Respondent No.
2 arrived at an understanding that the payment disputes would be
evaluated on the basis of the work executed by Respondent No. 1
from October 2017 to April 2018, along with the evaluation and
reconciliation of RA Bill Nos. 14 to 17.
2.3. Thereafter, the work executed by Respondent No. 1 was evaluated
and, on the basis of such evaluation, a Settlement Agreement dated
20.11.2018 was executed between Respondent No. 1 and
Respondent No. 2. In terms of the said Settlement Agreement,
Respondent No. 2 agreed to pay Respondent No. 1 a sum of Rs.
1,00,00,000/- towards full and final settlement of all dues payable
to Respondent No. 1 up to 20.11.2018.
2.4. In discharge of the aforesaid liability, Respondent No. 2 issued two
cheques in favour of Respondent No. 1 aggregating to Rs.
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:15.06.2026
19:02:09
CM(M) 1181/2022 Page 2 of 19

60,00,000/- and further assured that the balance amount of Rs.
40,00,000/- would be paid on or before 30.11.2019. Subsequently,
both the cheques issued by Respondent No. 2 in favour of
Respondent No. 1 were allegedly dishonoured on the grounds of
“ Funds Insufficient ” and “ Payment Stopped by Drawer ”.
2.5. In respect of the aforesaid dishonour of cheques, Respondent No. 1
instituted two complaints against Respondent No. 2, which are
stated to be pending adjudication before the Court of the
Metropolitan Magistrate, Saket Courts, Delhi.
2.6. Respondent No. 1 further issued a legal notice to the Petitioner,
requesting that any outstanding amount payable to Respondent No.
2 in relation to the Project not be released in favour of Respondent
No. 2 from the bank guarantee furnished by Respondent No. 2.
2.7. Thereafter, another notice was issued to the Petitioner, whereby
Respondent No. 1 claimed release of an amount of Rs.
1,00,00,000/- in its favour.
3. As Respondent No. 2 allegedly failed to make the payment of the
settlement amount in terms of the Settlement Agreement dated 20.11.2018,
Respondent No. 1 filed the Suit against both Respondent No. 2 and the
Petitioner, inter alia , praying for the following relief:
“ It is therefore, most respectfully prayed that this Court may be
pleased to pass a decree:
a) In favor of the Plaintiff firm and against the defendant No.1 for
a sum of Rs.1,48,73,337/- (Rupees One Crore Forty-Eight Lakh
Seventy-Three Thousand Three Hundred Thirty Seven Only)
along with future and pendente lite interest@ 24% p.a. on the
above said sum till realization of the same ;
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:15.06.2026
19:02:09
CM(M) 1181/2022 Page 3 of 19

b) In favor of the Plaintiff against the defendant No. 2 for a
permanent injunction restraining defendant No. 2 from realizing
to the defendant No. 1 a sum of Rs. 114873,337/- (Rupees One
Crore Forty-Eight Lakh Seventy-Three Thousand Three
Hundred Thirty Seven Only) or any part thereof, till the amount
of Rs. 1,48,73,337/- (Rupees One Crore Forty-Eight Lakh
Seventy Three Thousand Three Hundred Thirty Seven Only) is
paid by defendant No. 1 to the Plaintiff.
In favor of Plaintiff against defendant No. 2 for mandatory
c)
injunction directing the defendant No. 2 to deposit before this
Court a sum of Rs. Rs. 1,48,73,337/- (Rupees One Crore Forty-
Eight Lakh Seventy Three Thousand Three Hundred Thirty
Seven Only) or any other sum, if any, payable by the defendant
No. 2 to defendant No. 1 including the bank guarantee of the
defendant No. 1 which was given by the defendant No. 1 to the
defendant No. 2 at the time of entering into the contract dated
2.09.2015.”
4. The Trial Court vide order dated 04.01.2021 directed the Parties to
maintain status quo in respect of the payment to be made.
5. The Trial Court vide the Impugned Order modified the order dated
04.01.2021 thereby directing the Petitioner to deposit by way of Fixed
Deposit Receipt (“ FDR ”) an amount equivalent to the suit claim i.e., Rs.
1,48,73,337/- (“ Suit Amount ”) within 1 week of passing of the Impugned
Order.
6. Aggrieved by the Impugned Order, the Petitioner has approached this
Court by way of the present Petition.
SUBMISSIONS ON BEHALF OF THE PETITIONER
7. The learned Counsel for the Petitioner made the following
submissions:
7.1. The Impugned Order has been passed despite the Petitioner neither
being a proper nor a necessary party to the Suit. The Petitioner was
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:15.06.2026
19:02:09
CM(M) 1181/2022 Page 4 of 19

impleaded in the Suit only as a pro forma party, and Respondent
No. 1 has neither sought any substantive relief against the
Petitioner nor asserted any independent cause of action against it.
The principal grievance of Respondent No. 1 is directed solely
against Respondent No. 2.
7.2. The learned Trial Court failed to appreciate that there exists no
privity of contract between the Petitioner and Respondent No. 1. It
further failed to appreciate that neither has Respondent No. 1
claimed any amount from the Petitioner, nor has Respondent No. 2
asserted any claim against the Petitioner.
7.3. In the absence of any claim or application against the Petitioner,
and without any adjudication as to whether the Suit Amount was
payable by Respondent No. 2 to Respondent No. 1, the direction
requiring the Petitioner to deposit the Suit Amount is wholly
misconceived, unsustainable in law, and liable to be set aside.
7.4. In the Suit, the Petitioner had entered appearance upon advance
notice. However, without affording the Petitioner an opportunity of
being heard, the learned Trial Court passed an order dated
04.01.2021 directing the parties to maintain status quo with respect
to the payment in question.
7.5. On the date on which the aforesaid status quo order was passed,
i.e., 04.01.2021, Respondent No. 1 had not even deposited the
requisite ad valorem court fees in respect of the Suit; the said court
fees came to be filed only in September 2022.
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:15.06.2026
19:02:09
CM(M) 1181/2022 Page 5 of 19

7.6. Subsequently, the Petitioner filed its written statement as well as
its reply to the application under Order XXXIX Rules 1 and 2 of
the Code of Civil Procedure, 1908 (“ CPC ”), both of which were
taken on record. The principal stand taken by the Petitioner in its
written statement and reply was that there exists no privity of
contract between Respondent No. 1 and the Petitioner; that the
Petitioner does not recognise Respondent No. 1; that the dispute is
solely between Respondent Nos. 1 and 2; and, accordingly, that the
Suit was liable to be dismissed qua the Petitioner.
7.7. On 05.09.2022, Respondent No. 2 filed an application under Order
XXXIX Rule 4 read with Section 151 CPC seeking vacation of the
stay granted vide order dated 04.01.2021, as well as an application
under Order VIII Rule 1 CPC praying that Respondent No. 1 be
directed to furnish a copy of the plaint along with its annexures.
The application under Order XXXIX Rule 4 read with Section 151
CPC was taken up on 12.09.2022 and was, thereafter, adjourned to
15.09.2022.
7.8. On 15.09.2022, the learned Trial Court directed Respondent No. 1
to file a reply to the said application and further directed it to
furnish a copy of the plaint to Respondent No. 2.
7.9. Although Respondent No. 2 eventually filed its written statement,
the same has not, to date, been taken on record, as Respondent No.
1 has moved an application under Order VIII Rule 10 CPC seeking
that the defence of Respondent No. 2 be struck off.
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:15.06.2026
19:02:09
CM(M) 1181/2022 Page 6 of 19

7.10. On 26.09.2022, all parties appeared before the learned Trial Court.
Arguments were addressed by Respondent No. 2 on its application
under Order XXXIX Rule 4 CPC, and by Respondent No. 2 and
the Petitioner on the application under Order XXXIX Rules 1 and
2 CPC filed by Respondent No. 1. Respondent No. 2 contended
that the agreement between Respondent Nos. 1 and 2 contained an
arbitration clause governing dispute resolution and that, therefore,
the learned Trial Court lacked jurisdiction to entertain the matter.
However, since the main counsel for Respondent No. 1 was
unavailable on 26.09.2022, the matter was adjourned to
27.09.2022.
7.11. After hearing the parties, the learned Trial Court adjourned the
matter to 01.10.2022 for orders on the applications moved by
Respondent No. 1. However, without properly appreciating the
material on record, the learned Trial Court proceeded to pass the
Impugned Order.
7.12. A statement was recorded by Respondent No. 2, in person and in
the presence of counsel, to the effect that it had no objection if the
Suit Amount were withheld by the Petitioner until the learned Trial
Court rendered a decision on the merits.
7.13. In the meantime, the learned Trial Court passed a further order
dated 15.10.2022 whereby the right of Respondent No. 2 to file its
written statement was closed. The learned Trial Court incorrectly
recorded that no reply to the application under Order XXXIX
Rules 1 and 2 CPC had been filed by the Petitioner, and it failed to
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:15.06.2026
19:02:09
CM(M) 1181/2022 Page 7 of 19

notice or record the submissions contained therein in the Impugned
Order.
7.14. In fact, the Petitioner had already filed its reply to the application
under Order XXXIX Rules 1 and 2 CPC along with its written
statement, and the Impugned Order was passed without due
consideration of the said reply on record.
7.15. The learned Trial Court further erred in recording that the
Authorised Representative (“ AR ”) of the Petitioner had made a
statement to the effect that the Suit Amount be released while
simultaneously seeking deletion of the Petitioner from the array of
parties. No such statement was ever made by the AR of the
Petitioner before the learned Trial Court, and the said observation
is wholly misconceived. There is no such statement on record upon
which the learned Trial Court could have legitimately relied. From
the inception of the Suit, the consistent stand of the Petitioner has
been that it has no concern with the disputes between Respondent
Nos. 1 and 2 and that, there being no privity of contract
whatsoever between the Petitioner and Respondent No. 1, the
Petitioner is not a necessary party to the Suit.
7.16. The learned Trial Court failed to appreciate that the Petitioner is
not privy to the alleged Settlement Agreement dated 20.11.2018
entered into between Respondent Nos. 1 and 2 and, therefore,
cannot be directed to deposit any amount purportedly agreed
between those parties thereunder.
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:15.06.2026
19:02:09
CM(M) 1181/2022 Page 8 of 19

7.17. In the absence of any claim whatsoever against the Petitioner, and
without any adjudication of the disputes between Respondent Nos.
1 and 2, the learned Trial Court could not have directed the
Petitioner to deposit the Suit Amount in a fixed deposit before the
Court.
7.18. The learned Trial Court further failed to appreciate that, under the
contract between the Petitioner and Respondent No. 2, the latter
becomes eligible to receive payment only upon corresponding
payments being received by the Petitioner from the client / owner
of the Project, namely the NIA. At this stage, in the absence of
release of the final bill by the NIA, it is premature and not possible
to ascertain the exact amount, if any, payable by the Petitioner to
Respondent No. 2. Consequently, the direction requiring the
Petitioner to deposit the Suit Amount without any liability having
been fastened upon it is baseless and liable to be set aside.
7.19. The learned Trial Court, merely on the basis of a statement made
by Respondent No. 2, directed the Petitioner to deposit the Suit
Amount along with interest before the learned Trial Court, despite
there being no claim by Respondent No. 2 against the Petitioner in
the Suit.
7.20. By passing the Impugned Order, the learned Trial Court has, in
effect, decreed the Suit in favour of Respondent No. 1 and against
the Petitioner without completion of pleadings and without
appreciating or recording any evidence whatsoever, despite the
fact that the application under Order VIII Rule 10 CPC filed on
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:15.06.2026
19:02:09
CM(M) 1181/2022 Page 9 of 19

behalf of Respondent No. 1 and the application under Order VIII
Rule 1 CPC filed on behalf of Respondent No. 2 were still pending
adjudication before the Court.
7.21. Without first deciding whether the written statement filed by
Respondent No. 2 was to be taken on record, the learned Trial
Court ought not to have passed the Impugned Order directing the
Petitioner to deposit the Suit Amount.
7.22. It is well settled that every judicial order must disclose the reasons
which led to the conclusions recorded therein as the absence of
reasons renders such order vulnerable to challenge. The learned
Trial Court was required to exercise its discretion judiciously and
could not have permitted itself to be guided merely by the
changing positions adopted by the parties to the lis .
7.23. While directing the Petitioner to deposit the Suit Amount, the
learned Trial Court recorded no reasons whatsoever, nor does the
Impugned Order contain any findings explaining how such
conclusion was arrived at. The Impugned Order is thus an
unreasoned and non-speaking order and is liable to be set aside.
7.24. The Petitioner has, in any event, been deleted from the array of
parties by order dated 01.08.2024. Consequent upon such deletion,
neither the status quo order dated 04.01.2021 nor the Impugned
Order dated 27.09.2022 could continue to operate against the
Petitioner.
7.25. The reliance placed by Respondent No. 1 on Value Advisory
Services v. ZTE Corporation , 2009 SCC OnLine Del 1961, is
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:15.06.2026
19:02:09
CM(M) 1181/2022 Page 10 of 19

misconceived, as the petition in the said case was dismissed by this
Court.
7.26. Accordingly, the Impugned Order suffers from manifest errors of
law and fact apparent on the face of the record and is, therefore,
liable to be set aside.
SUBMISSIONS ON BEHALF OF THE RESPONDENTS
8. The learned Counsel for Respondent No. 1 made the following
submissions:
8.1. The Suit was instituted against Respondent No. 2 for recovery of
the Suit Amount. The Petitioner was impleaded as Defendant No.
2 before the learned Trial Court on the ground that it was liable to
make payments to Respondent No. 2 in respect of the same
Project.
8.2. On the first date of hearing, vide order dated 04.01.2021, the
learned Trial Court directed maintenance of status quo in respect
of the payments to be made by the Petitioner to Respondent No. 2.
Subsequently, while disposing of the application under Order
XXXIX Rules 1 and 2 CPC, the learned Trial Court vide
Impugned Order modified the earlier status quo order dated
04.01.2021 and directed the Petitioner to deposit the Suit Amount
in the form of an FDR before the learned Trial Court.
8.3. Respondent No. 1 had no objection, provided the Suit Amount
remained withheld by the Petitioner and was not released to
Respondent No. 2. The learned counsel for Respondent No. 2 had
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:15.06.2026
19:02:09
CM(M) 1181/2022 Page 11 of 19

also consented to the said course of action before the learned Trial
Court.
8.4. Reliance was placed on the Impugned Order, wherein the learned
Trial Court recorded that Respondent No. 2 had stated that it had
no objection to the Petitioner withholding the Suit Amount
pending a decision on the merits of the Suit. It was further
recorded that the Petitioner had, on an earlier occasion, expressed
no objection to withholding the Suit Amount while seeking
deletion from the array of parties.
8.5. Respondent No. 1 is not insisting upon deposit of the Suit Amount
in the form of an FDR. Respondent No. 1 has no objection to the
deletion of the Petitioner from the array of parties and does not
assert any direct claim against the Petitioner. The limited
grievance of Respondent No. 1 is that the Suit Amount ought not
to be released to Respondent No. 2 pending adjudication of the
Suit.
8.6. Even if the Petitioner were not a necessary party to the Suit, the
learned Trial Court was justified in directing the Petitioner to
withhold the Suit Amount. Reliance was placed on Value
Advisory Services ( supra ) to contend that there is no absolute bar
against the issuance of interim directions affecting third parties
where such directions are necessary to secure the amount in
dispute.
8.7. Reliance was further placed on VR Wonder Electricals and
Electronics v. C-Quest Capital Green Ventures Pvt. Ltd. , 2012
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:15.06.2026
19:02:09
CM(M) 1181/2022 Page 12 of 19

SCC OnLine Del 3708, to submit that a garnishee ordinarily
comes into the picture only after a decree has been passed against
the debtor, or, if at all during the pendency of the suit, only in the
context of interim proceedings under Order XXXVIII or Order
XXXIX of CPC. Such a garnishee has no part in the cause of
action in the suit; that a party to interim proceedings cannot, on
that basis alone, be regarded as a necessary party to the suit; that
such garnishee need not even be impleaded as a party to the suit;
and that all that is required is that it be heard on the question of
interim directions qua it.
8.8. In view of the above submissions, the preset Petition be dismissed
as there is no infirmity with the Impugned Order.
ANALYSIS AND FINDINGS
9. In the present Petition, the principal question that arises for
consideration is whether, in the absence of any crystallised liability and in
the absence of any direct claim against the Petitioner, whether the learned
Trial Court was justified in directing the Petitioner to deposit the Suit
Amount in the form of an FDR before the learned Trial Court.
10. Vide order dated 04.01.2021, the Trial Court directed the Parties to
maintain status quo in respect of the payments to be made. The said order
was subsequently modified by the Impugned Order. The relevant portion of
the Impugned Order is extracted below:
“ It is reported that settlement could not be reached, despite efforts.
In view of which Ld. Counsels appearing for parties have made
submissions to support their respective applications. However,
during the process of argument Ld. Sh. Yogesh Sharma for D1 has
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:15.06.2026
19:02:09
CM(M) 1181/2022 Page 13 of 19

stated no objection to NBCC (D2) withholding an amount of INR Rs.
1,48,73,337 of D1 till the decision on merits.
xxxxx
The AR of the defendant no. 2 has already expressed no objection
qua release of suit amount during earlier proceedings with request
of their deletion, qua which the rebuttal have been addressed by Ld.
councel for plaintiff who has fairly conceaded that D2 cannot be
directed to withhold the amounts beyond the claim made in the
plaint and has stated no objection to release of remaining amounts
of BG beyond the claim amount to D1.
In view of the statement recorded seperately, applications of plaintiff
under order 39 rule 1 and 2 and under 38 Rule 5 and application of
D1 under order 39 Rule 4 are all disposed of. Parties are directed to
remain bound by their statements. In terms of the statement of D1
the amount shall be kept in FDR in the name of the Court which
shall be deposited within one week before this court. The previous
status quo order dated 04.01.2021 is accordingly modified. The D2
may release remaining any payments to D1.
Now at this stage, counsel for D2 submits that defendant no 2 may
be given the direction to retain the suit amount by withholding in
place of the directions for FDR and they may release the remaining
amount. Now, he again states that the defendant no. 1 may not be
entitled to the suit amount which is being claimed by plaintiff. It
appears that the defendant no. 2 is moving ‘back and forth’.
While it is now averred that defendant no. 1 may not even be entitled
to the suit quantum in terms of inter se liabilities to be determined
between defendant no. 2 and defendant no. 1, however no such
objection till date of this nature has been raised. In previous
proceedings no such claim is furthered and no application of
whatsoever nature is filed or moved by D2 who has even failed to
reply application u/o 39 Rule l and 2 of the plaintiff the reply of
which is tendered by D 1 along with applicaiton u/0 39 Rule 4.
The above statements at this stage is contrary and in juxtaposition /
to its own intent, as on one side the defendant no. 2 is offering to
withhold the amounts in its own account and release the remaining,
without explaining that if the defendant no. 1 is not entitled even to
the suit amount, then how, the suit amount qua which the statement
is made in presence of D2, which at all stages up till now has been
also strengthened with the voice of defendant no. 2, will be paid to
the plaintiff. Furthermore inter-se dispute between defendant no. 2
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:15.06.2026
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CM(M) 1181/2022 Page 14 of 19

and defendant no. 1 are not suggested subject matters of the present
suit and hence are beyond the scope of any orders. Having regard to
the above the objection does not stand on merit.
11. Accordingly, the order dated 04.01.2021 cannot be considered in
isolation, as the said order stood merged with the Impugned Order
subsequently passed by the learned Trial Court on the application under
Order XXXIX Rules 1 and 2 CPC.
12. It was submitted on behalf of Respondent No. 1 that Respondent No.
1 is not insisting upon deposit of the Suit Amount in the form of an FDR and
that its limited case is that the Suit Amount ought to remain protected
pending adjudication of the Suit.
13. It was further submitted on behalf of Respondent No. 1 that the order
dated 26.09.2022 records that the Petitioner had expressed its willingness to
make a garnishee statement, coupled with an undertaking to withhold the
Suit Amount and release the remaining amount to Respondent No. 2. The
relevant extract of the order dated 26.09.2022 is reproduced below:
“ As per previous report, settlement failed, due to non-appearance of
D2. Ld counsel for D2 states that dispute is inter-se D1 and Plaintiff
and — D2 has no role. He states that D2 is willing to make a
“garnishi” statement with undertaking to withhold suit amount and
release remaining to D1 who only they recognise in terms of
contract and that D-2 is an un-necessary party and if they are
permitted to deposit the suit amount nothing stands upon which D-2
may also be deleted from array of defendants. However as now all
the counsels have participated in the discussion in presence of
parties to bring about some amicability towards resolution and an
element of settlement through negotiation is suggested, request of
referral is renewed. At request, put up before judge incharge
mediation cell for today at 12:00 PM. ”
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:15.06.2026
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CM(M) 1181/2022 Page 15 of 19

14. A garnishee is, in law, a debtor of the judgment-debtor. A decree-
holder may proceed against a garnishee only where the judgment-debtor has
a presently enforceable right to recover the debt from such garnishee. It is
well settled that, while considering an order against a garnishee, the Court
must first ascertain whether the debt is in fact due and payable by the
garnishee to the judgment-debtor. Where the garnishee has not admitted the
debt, the Court cannot compel the garnishee to deposit any amount on
account of the judgment-debtor.
15. Thus, a garnishee order, which enables a judgment-creditor to obtain
satisfaction of its claim, may be invoked by a decree-holder only where the
debt is either undisputed or where the dispute appears to the Court to be
frivolous and devoid of substance. Such a remedy is unavailable where there
exists a substantial and bona fide dispute in respect of the debt sought to be
attached.
16. Therefore, a garnishee order can be passed only once the Suit is
decreed and once the Court is satisfied that a garnishee has a crystalised
liability towards the judgment-debtor.
17. In the present case, the Suit is yet to be adjudicated and there is no
adjudication or determination of liability by Respondent No. 2. Further, the
Impugned Order does not record the crystalized liability of the Petitioner to
make payment of the Suit Amount to Respondent No. 2. In absence of both
the conditions having been satisfied, the Impugned Order directing the
Petitioner to deposit the Suit Amount with the learned Trial Court could not
have been passed.
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:15.06.2026
19:02:09
CM(M) 1181/2022 Page 16 of 19

18. The statement made by the Petitioner before the learned Trial Court as
recorded in order dated 26.09.2022 regarding withholding of the Suit
Amount cannot be construed as an admission of liability by the Petitioner. A
willingness to preserve an amount pending adjudication cannot be equated
with an acknowledgment that the amount is due and payable.
19. Consequently, the liability, if any, of the Petitioner towards
Respondent No. 2 is not admitted or crystallised. The present Suit has also
not been framed as a garnishee action. Therefoe, there is no legal basis for
asserting any enforceable right against the Petitioner.
20. In any event, the learned Trial Court, vide order dated 01.08.2024, has
deleted the Petitioner from the array of parties of the Suit. The relevant
portion of the said order is extracted below:
“ 4. From the submissions made by the plaintiff, it is clear that there
was no privity of contract between the plaintiff and defendant no. 2.
Mr. Gaurav Chopra submits that under the GCC, there is provision
that defendant no. 2 would safeguard the amounts payable to the sub
contractors. The GCC is not part of the documents filed by the
plaintiff. The reliance on any such clause of GCC is not valid in
view of the submission made by Mr. Gaurav that there could not be
a sub contract and due to which power of attorney was given to him
by defendant no. 1.
5. Ld. Counsel for the plaintiff has been asked the basis on which the
plaintiff seeks an injunction against defendant no. 2. Ld. Counsel
submits that this issue is also under consideration before Hon’ble
High court in CM(M)1181/2022 which has been filed by defendant
no. 2 to challenge the order dt. 27.09.2022 passed by my Ld.
Predecessor under Order XXXIX Rule 1 & 2 CPC 1/w Order
XXXVHI Rule 5 CPC directing defendant no. 2 to deposit the suit
amount in the court. Ld. Counsel for defendant no. 2 submits that
the issue whether defendant no. 2 is a necessary or proper party is
not under consideration before Hon’ble High Court.
6. In view of the submissions of Mr. Gaurav Chopra recorded above,
it is clear that the plaintiff cannot seek a decree of injunction against
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:15.06.2026
19:02:09
CM(M) 1181/2022 Page 17 of 19

defendant no. 2. At the most, direction under Order XXI Rule 46 and
46A CPC could be given to defendant no. 2 and for this the principal
order has to be against defendant no. 1. Defendant no. 2 does not
need to the party to the suit to secure any amount payable to the
plaintiff by defendant no. 1. The plaintiff can seek the garnishee
order not only against defendant no. 2 but against any other debtor
of defendant no. 1 and for this such debtor does not need to be a
party to the suit.
7. Plaintiff has come to this court on the basis of an alleged
settlement agreement dt. 20.11.2018 between him and defendant no.
1 whereby the defendant no. 1 agreed to pay %1 crore to the
plaintiff. This agreement is disputed and claimed to be forged by
defendant no. 1.
8. The dispute is between the plaintiff and the defendant no. 1.
Clearly defendant no. 2 is not a necessary party. Need may arise for
production of documents by defendant no. 2 and this can be done by
them as witness. Therefore, defendant no. 2 is also not a proper
party.
9. In view of the above discussion, it is held that the objection of
defendant no. 2 that they have been improperly impleaded as
defendant, is valid. The court can delete defendant no. 2 under
Order I Rule 10 (2) CPC. Defendant no. 2 is deleted from the array
of defendants. ”
21. The order dated 01.08.2024 has not been assailed by Respondent No.
1 and has, therefore, attained finality. Consequently, by virtue of the said
order, the Petitioner no longer remains a party to the Suit.
22. There is no cavil that a garnishee need not necessarily be impleaded
as a party to the Suit. However, such legal position cannot be construed to
mean that a garnishee order may be passed even in the absence of a
crystallised or admitted liability to pay by garnishee to the judgment-debtor.
In the present case, the Suit is still pending and the liability of Respondent
No. 2 towards Respondent No. 1 is yet to be adjudicated. Further, there is no
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:15.06.2026
19:02:09
CM(M) 1181/2022 Page 18 of 19

admitted or crystallised liability of the Petitioner to make payment of the
Suit Amount to Respondent No. 2.
23. The reliance placed by Respondent No. 1 on Value Advisory Services
( supra ) and VR Wonder Electricals ( supra ) is misplaced. In Value Advisory
Services ( supra ), where there was no decree in favour of the petitioner
therein and the alleged debt was disputed by the garnishee, this Court did
not consider it appropriate to direct the garnishee to deposit the amount
before the Court. Likewise, in VR Wonder Electricals ( supra ), this Court
held that the garnishee was not a necessary party to the suit and that the suit
was not maintainable against garnishee.
24. In the facts of the present case, there is no decree in favour of
Respondent No. 1, and the claim of Respondent No. 1 remains disputed and
unadjudicated. In the absence of any finding that the Suit Amount is due and
payable by the Petitioner to Respondent No. 2, the Impugned Order
directing the Petitioner to deposit the Suit Amount in the form of an FDR
before the learned Trial Court cannot be sustained as there is no crystallised
liability based on which such direction could have been passed. Further, the
Petitioner having since been deleted from the array of parties in the Suit, the
direction requiring the Petitioner to deposit the entire Suit Amount before
the learned Trial Court cannot survive.
25. In view of the above analysis, the present Petition is allowed, and the
Impugned Order is, accordingly, set aside. Pending application(s), if any,
stand disposed of. There shall be no order as to costs.
TEJAS KARIA, J
JUNE 15, 2026/ hk
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:15.06.2026
19:02:09
CM(M) 1181/2022 Page 19 of 19