Allowed

Sushila Bhawarlal Jain and Ors. v. Brijesh Mohan Hari and Ors.

Bombay HC17 Nov 2009WP/5956/2009

Case brief

AI extract

What is this about?

This writ petition challenged the DRAT order directing return of industrial units to the debtor guarantor. The High Court allowed the petition, holding that since petitioners were in possession before the receiver, they should be restored. Possession is remanded to DRT for royalty ascertainment.

What did the court decide?

The impugned DRAT order is set aside; the DRT order restoring possession of 9 units to the petitioners is restored; matter remanded to DRT for royalty ascertainment.

Sushila Bhawarlal Jain and Ors. Vs Brijesh Mohan Hari and… — Property and Title | Bombay HC (2009)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION

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WRIT PETITION NO. 5956 OF 2009

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1.	Sushila Bhawarlal Jain	)
	of Bombay Indian Inhabitant having	)
	address at Rom No.18, 2^ndfloor,	)
	Kanbai Bhuwan, Khadilkar Road,	)
	C.P.Tank, Mumbai 400 004	)
	and a godown at Unit No.1, West Side	)
	Ground Floor, Main Building at	)
	Mahavir Industrial Premises	)
	Co-operative Society, 13, Sant Savta	)
	Marg, Mazgaon Reay Road,	)
	Mumbai 400 010.	)
2.	Bhagwatibai Poonamchand Jain	)
	of Bombay Indian Inhabitant having	)
	address at Jitekrwadi,3^rdFloor,	)
	Thakurdwar Road, Mumbai 400 002	)
	and a godown at Unit No.1 East Side	)
	at Mahavir Industrial Premises	)
	Co-operative Society, 13 Sant Savta	)
	Marg, Mazgaon Reay Road,	)
	Mumbai 400 010.	)
3.	Sunderbai Mulchand Jain	)
	of Bombay Indian Inhabitant having	)
	address at Room No.17, 2^ndFloor,	)
	Kanbai Bhuwan, Khadilkar Road,	)
	C.P. Tank, Mumbai 400 004.	)
	and a godown at Unit N.3 & 4 West	)
	Side, 1^stFloor of Main Building	)
	at Mahavir Industrial Premises	)
	Co-operative Society, 13 Sant	)
	Savta Marg, Mazgaon Reay Road,	)
	Mumbai 400 010.	)

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4.	Mulchand Navalram Jain Proprietor of Shah Mulchand	) )
	Navalram Jain having address	)
	at Shop No.2, 1^stfloor, Shri padamshi Bhuvan 22 Nath	) )
	Madhav Lane, C.P.Tank, Mumbai 400 004 and a godown at	) )
	Unit No.4 & 5 Ground Floor, Main Building, at Mahavir	) )
	Industrial Premises Co-operative Society, 13 Sant Savta Marg, Mazgaon, Reay Road, Mumbai 4000	) ) 10)
5.	Saremal Pratapchand Jain of Bombay Indian Inhabitant having address at 22/26, Dariyashan Street, 1^stFloor, jetha Dhanji Buildin Mumbai 400 003 and a godown at Unit No.2, East Side, Ground floor, Mahavir Industrial Premises Co-operative Society, 13 Sant Savta Marg, Mazgaon Reay Road, Mumbai 400 010.	) ) ) g) ) ) ) ) ) ).. Petitioners
	Versus
1.	Brijesh Mohan Hari	)
2.	Smt. Pushpalata Hari Both of Mumbai Indian Inhabitant residing at Flat nO.52, 5^thfloor, Little Gibbs Road, Mumbai 400 006.	) ) ) )
3.	Seven Star Security Services (I) Pvt.Ltd., Debts Recovery Tribunal, Cout Receiver, 56, Esplanade Mansio	) ) n)
	Near Mumbai University, 144,	)
	M.G. Road, Fort, Mumbai	)
4.	The Court Receiver,	)
	High Court of Bombay at	)

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	Mumbai Maharashtra.	)
5.	Union Bank of India,	)
	a body corporate constituted	)
	under the provisions of Banking	)
	Companies (Acquisition &	)
	Transfer of Undertakings) Act, 1970	)
	having its Head office at 239,	)
	Backbay Reclamation, Mumbai-	)
	400 021 and branch at 66/80,	)
	Bombay Samachar Marg, Fort,	)
	Mumbai 400 023.	).. Respondents

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Mr. Arif Bookwala, Senior Counsel i/b. M/s. Beri & Co., Advocates, for the petitioners.

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Mr. S.C.Naidu with Mr. Rui Rodrigues & Mr. B.S.Nagar, Advocates i/b. M/s. Global Law Offices for respondent Nos. 1 & 2.

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Mr. V.S.Masurkar with Mr. Sandeep D. Mane, Advocates, for respondent No.3.

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CORAM: F.I.REBELLO AND J.H.BHATIA, JJ. DATE : 17^th November, 2009.

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ORAL JUDGMENT: (PER J.H.BHATIA,J.)

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Rule. Rule made returnable forthwith. With consent of the learned

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Counsel for the parties, the petition is taken up for final hearing immediately.

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To state in brief, the respondent Nos. 1 and 2 are son and widow of one Sudhir Kumr Hari, who was the owner of plot of land. He had made

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construction of industrial units or galas and had undertaken to form a Cooperative Society. Accordingly, Mahavir Industriial Premises Co-operative Society Ltd. was registered. The petitioners claim to be members of the Society and owners of certain units in the said premises. Sudhir Kumar Hari was partner of M/s. Malik Meters. The respondent No.5 – Union Bank had granted credit facility to M/s. Malik Meters, a partnership firm. Respondent No.2 wife of Sudhir Kumar Hari was a guarantor. Union Ban filed Suit No.1859 of 1982 against respondent No.2 and other legal heirs of deceased Sudhir Kumar Hari for recovery of amounts. In that suit, a Court Receiver was appointed to take possession of the suit property. When the Court Receiver visited the industrial premises, petitioner No.4 had pointed out that the petitioners were purchasers and in possession of the units in the industrial estate and this fact was confirmed by respondent No.2 also. In Notice of Motion No.780 of 1983 taken out by respondent No.5 - Union Bank, an order was passed on 9.4.1987 for taking formal possession of the units without disturbing the actual occupation. However, in March, 1997, respondent Nos. 1 and 2 took out Notice of Motion No.985 of 1997 for taking forcible possession of the said units which were in possession of the petitioners. Accordingly, an order was passed on 26.3.1997. On 11.4.1997, the Court Receiver, by breaking open the locks of the said units, had taken forcible possession as per the Court order. Thereafter, the petitioners had filed Notices of Motion No.1451 of 1997 and 1559

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of 1997 to discharge the Receiver – respondent no.4 and to restore the possession

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to them. Ad-interim order was passed on 28.4.1997 directing the Court Receiver to forthwith restore possession of the respective units to the petitioners. Final order came to be passed on 18.12.1998 whereby the respondent No.4 was directed to appoint the petitioners as agents of the Court Receiver on payment of royalty at the rate of Rs.7,000/- per month per unit.

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After constitution of the Debt Recovery Tribunal, the suit No.1859 of 1982 was transferred and re-numbered as Original Application No.59 of 2002 and the Court Receiver – respondent No.4 was discharged. Thereafter the respondent No.3 was appointed as a receiver. On 11.11.2004, a settlement took place between the respondents Nos. 1 and 2 and the respondent No.5, who were the defendants and the plaintiff respectively in that suit or original application. After disposal of the Original Application, the respondent No.3 was also discharged as receiver and then respondent No.3 moved a Civil Application before the Presiding Officer, DRT-1 for direction to hand over possession of the units. The Presiding Officer, DRT passed an order dated 12.5.2005 directing the respondent No.3 to hand over possession of the units back to the persons, who were found in possession at the time when the Court Receiver was appointed. That order was challenged by the respondent Nos. 1 and 2 before the Debt Recovery Appellate Tribunal (DRAT) in

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Appeal No.126 of 2006. The learned Chairman, DRAT, by order dated 3.7.2009, allowed that petition and directed that possession of the said units as well as amount of Rs.52.92 lakh deposited as royalty by the petitioners be given to the respondent Nos. 1 and 2. The said order is challenged in the present petition. It is contended that the petitioners have always claimed to be owners and possessors of the said units and from them the possession was taken. They were not parties to the suit between the respondent No.5 on one hand and respondent Nos. 1 and 2 on the other nor their rights or title over the units were the subject matter of that dispute. The matter was settled between respondents Nos. 1 and 2 on one hand and the respondent No.5 on the other and, therefore, when the Court Receiver was discharged, the order appointing the petitioners as agents should have been revoked and the petitioners should have been allowed to continue in possession in their own right.

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4. Heard the learned Counsel for the parties.

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The facts stated above are not in dispute. It appears that there were

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in all 13 units or galas in the industrial estate. Out of them, units Nos. 2B, 3 and 4 were already taken over by the Official Liquidator in a proceeding prior to the appointment of the Court Receiver in Suit No.1859 of 1982. Record also reveals

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that the petitioners did not claim any right or title over gala No.5 when the possession of the said galas was taken over by the Court Receiver. Remaining 9 units or galas were in possession of the petitioners and they claimed to have purchased the same and also claimed to be members of the Co-operative Society. According to them, they had paid consideration for the said units. Respondent no. 2 had confirmed this fact before the Court Receiver at the time of taking possession. Therefore, there is no dispute that the said 9 galas were in possession of the petitioners, when the Court Receiver was appointed and the Court Receiver had taken possession of the said galas from them. Later on, they were appointed as agents of the Court Receiver on payment of Rs.7,000/- per month as royalty for each of the units. Naturally, they would continue to be in possession as agents of the Court Receiver as long as the Court Receiver continued. Admittedly, the Court Receiver was appointed in respect of the said galas on the application of the plaintiff/respondent no.5- Union Bank. Later on, the matter, while pending before the DRT, was amicably settled between the Bank and the respondent Nos. 1 ans 2 and therefore the respondent No.3 – the Receiver was also discharged. It is nobody’s case that the petitioners were not in possession before they were appointed as the agents of the Court Receiver. In such circumstances, when the Court Receiver was discharged, natural consequence would be to restore the possession to the persons from whom possession was taken, particularly because

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there was no dispute between the respondents Nos. 1 and 2 and the present petitioners in the recovery suit or the proceeding before the DRT. The learned DRT considering these facts directed that after discharge of the Court Receiver, the possession of the units be restored to the respective petitioners from whom the possession was taken by the Court Receiver. The learned DRAT, however, held that the petitioners were the agents of the Court Receiver and when the Court Receiver is discharged, the agency of the petitioners would come to an end and as the property belongs to the respondent Nos. 1 and 2, the property should be returned to the owners. In fact, it is nobody’s case that the petitioners were not in possession before the Court Receiver was appointed nor it is anybody's case that they were put in possession of the respective units for the first time as agents of the Court Receiver. If they would have been put in possession by the Court Receiver for the first time by appointing them as agents, the property would go back to the parties from whom the Court Receiver had taken possession. In the present matter, possession was taken from the petitioners themselves and therefore possession should have been restored to them in their original capacity, after they ceased to be agents of the Court Receiver. In our considered opinion, the learned DRAT committed an error in directing that industrial units be handed over to the respondent Nos. 1 and 2. If there is any dispute about title or right of possession between the petitioners and the respondent Nos. 1 and 2, that can be settled only

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by an appropriate forum in appropriate proceeding or suit. The rights. in which the petitioners were in possession of the said units on the date when possession was taken over by the Court Receiver, cannot be taken away in this proceeding before the DRAT while discharging the Court Receiver.

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For the aforesaid reasons, the petition is allowed and the impugned order passed by the DRAT is hereby set aside and the order passed by the DRT-1 dated 12.5.2005 is hereby restored to the extent of restoration of possession of the 9 units to the petitioners.

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The matter is remanded back to the DRT only for the limited purpose of ascertaining whether the petitioners had paid the royalty amount from the date of their appointment as agents till discharge of respondent no.3 – Receiver. If they had paid the royalty amount, possession be restored to them. The royalty amount lying in deposit with the DRT be invested with a Nationalised Bank for a period of one year. The respondents nos. 1 and 2 shall be at liberty to file suits to establish their title and/or for possession of the units from the present petitioners if they are so entitled. If such suits are filed within a period of six months from this day, the amount of royalty invested with the Nationalized Bank shall be subject to the result of suit/suits.

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The petitioners and respondents Nos. 1 and 2 shall appear before the

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DRT on 8.12.2009.

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(J.H.BHATIA,J.) (F.I.REBELLO,J.)

Sushila Bhawarlal Jain and Ors. v. Brijesh Mohan Hari and Ors.

Case brief

What is this about?

What did the court decide?

Sushila Bhawarlal Jain and Ors. v. Brijesh Mohan Hari and Ors.

Case brief

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What did the court decide?

What the court decided

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