In an interim order pending appeal, the High Court fixed the royalty for a mortgaged residential flat at Rs. 1,50,000 per month effective from March 2005, deeming earlier amounts too low given market conditions.
Royalty fixed at Rs. 1,50,000 per month payable from March 2005.
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
Notice of Motion No.9l0 of 2005
in
Appeal No.543 of 2004
in
Chamber Summons No. 949 of 2003
in
Suit No. 2470 of 2002
Housing Development Finance
Corporation Ltd ..Appellant
vs
Express Industrial Services
Pvt Ltd and ors ..Respondents
Mr.P.K.Samdani with Ms Priya Dwarkadas i/b M/s
Wadia Gandhy and Co for appellant
Mr. R.A.Dada Sr Counsel i/b Mr D P Desai for
respodnents
CORAM: A.P.SHAH & S.J.VAZIFDAR JJ.
Dated 2l.3.2005
P.C:
l. We have admitted the appeal and expedited its
hearing.Having regard to the nature of the order we
proposed to pass, which will operate pending the
disposal of the appeal, we think it necessary to
set down the reasons.
2. This is a suit by the Appellant in which the
Appellant claimed from the Respondents a sum of Rs.
5,07,32,508. The Appellant had granted loan of
Rs.3.60 crores to the lst Respondent and Respondent
nos. 2 and 3 had executed deeds of guarantee in
favour of the Appellant. The Respondent nos. 2
and 3 have mortgaged residential flat admeasuring
about 3430 sq ft in Sterling Apartment situated at
Peddar Road as and by way of security for the
aforesaid loan.By order dated 7.8.2002 the Receiver
was appointed in respect of the mortgage flat. The
Receiver called for the valuation and as per the
report of the valuer, compensation in respect of
this flat was assessed to the tune of Rs 3,05,563
per month. The Receiver, however, fixed the
royalty in the sum of Rs.50,000 per month. The
appellant filed Chamber Summons to increase the
royalty payable from Rs.50,000 to Rs.3,2l,563 per
month. The Respondent No. 3 also took out Chamber
Summons to decrease the royalty payable from
Rs.50,000 per month to Rs.l5,000 per month. By
order dated 26.7.2004 the learned single Judge
increased the royalty fixed by the Receiver from Rs
50,000 to Rs. l lac per month with effect from
l.9.2004.
3. By order dated 7.8.2002 the Receiver was
directed to appoint Respondent nos 2 and 3 as
agents of the Receiver on usual terms and
conditions. This meant that the royalty had to be
fixed upon the basis of what the flat would
reasonably fetch on agency basis in the local
market. The flat in question is admeasures 3430 sq
ft and it is situated at Peddar Road and surrounded
by residential buildings. It is not disputed that
this is a very posh locality. In respect of this
very building where flats were offered on leave and
licence basis with security deposit of Rs. 2
crores and monthly compensation of Rs.50,000 in
addition to bank guarantee of Rs. 3 crores. Even
if the interest accrued on the deposit is taken at
6% p.a the interest itself comes to Rs.l2 lacs plus
licence fee of Rs.50,000 per month and thus the
amount comes to Rs.l.50 lacs per month. While
fixing royalty the court cannot be oblivious of the
conditions that exist in this city. The fixation
of royalty by the Receiver and the learned single
Judge is clearly on lower side.
4. By way of interim order in the Appeal,
therefore we fix the royalty for the flat at
Rs.l,50,000 per month payable from March 2005.
Notice of Motion is accordingly disposed of.
Housing Development Finance Corporation Ltd
Express Industrial Services Pvt Ltd
A.P. SHAH
S.J. VAZIFDAR
As recorded by the court registry
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