Disposed

M/S.Suresh Enterprises v. Mr Jitendra K. Shah and Anr.

Bombay HC17 Oct 2013CAF/1928/2013

Case brief

AI extract

What is this about?

The High Court appointed the plaintiff as the agent of the Court Receiver to occupy the suit flat pending appeal. The plaintiff will pay Rs. 10,000 monthly royalty and furnish security, distinguishing the precedent regarding eviction cases.

What did the court decide?

Plaintiff appointed as agent of Court Receiver; to pay Rs. 10,000 monthly royalty and furnish security; 8 weeks granted to 2nd defendant to remove movables.

M/S.Suresh Enterprises Vs Mr Jitendra K. Shah and Anr. — Specific Performance | Bombay HC (2013)

caf.1928.13.doc

SQP

IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION CIVIL APPLICATON NO.1928 OF 2013

¶5

¶6

FIRST APPEAL NO.561 OF 2013

¶7

M/s. Suresh Enterprises ...Applicant Versus Jitendra K. Shah & Anr. ...Respondents

¶8

WITH

¶9

CIVIL APPLICATON NO.1927 OF 2013 IN

¶10

FIRST APPEAL NO.559 OF 2013

¶11

Niraj Mansukhlal Ved ...Applicant Versus Jitendra K. Shah & Anr. ...Respondents

¶12

WITH CIVIL APPLICATON NO.2442 OF 2013 IN

¶13

FIRST APPEAL NO.561 OF 2013

¶14

Jitendra K. Shah & Anr. ...Applicants Versus M/s. Suresh Enterprises ...Respondent

¶15

WITH CIVIL APPLICATON NO.2443 OF 2013 IN

¶16

FIRST APPEAL NO.559 OF 2013

¶17

Jitendra K. Shah & Anr. ...Applicants Versus Niraj Mansukhlal Ved ...Respondent

1/12

SQ Pathan

caf.1928.13.doc

Mr. A. K. Chauhan for Applicant in CA/1928/13 and for Respondent in CA/2442/13

¶23

Mr. Bipin Joshi for Applicant in CA/1927/13 and for Respondent in CA/2443/13

¶24

Mr. Ashwin Ankhad with Mr. Rakesh Pande and Ms. Niyati Davawala i/b Ashwin Ankhad & Associates for Applicants in CA/2442/13 & 2443/13 and for Respondent in CA/1928/13 & CA/1927/13

¶25

Mr. S. S. Deshpande, Court Receiver is present.

¶26

CORAM:- A. S. OKA AND REVATI MOHITE DERE, JJ. DATED:- OCTOBER 17, 2013

¶27

P.C.

¶28

These are the Civil Applications filed by parties to the appeals.

¶29

The challenge in the appeals is to the Judgment and Decree dated 26^th April, 2013 passed by the learned Judge of the City Civil Court, Mumbai. Suit was filed for specific performance of Agreement dated 10^th April, 2001 for sale of the suit flat. By the impugned Judgment and Decree, the 1^st defendant has been ordered and decreed to perform the said Agreement specifically in compliance with its statutory obligations under the provisions of Maharashtra Ownership Flats (Regulation of Promotion of Construction, Sale Management and Transfer) Act, 1963. A Decree has been passed for possession of the suit flat.

2/12

SQ Pathan

caf.1928.13.doc

During the pendency of the Suit, the Court Receiver, High Court, Bombay, was appointed as the Court Receiver of the suit flat. A direction has been issued under a decree to the Court Receiver to place the plaintiff in possession of the suit flat. In the Suit for specific performance, the contention of the 1^st defendant was that the suit agreement was never intended to be acted upon. It was contended that the plaintiff is merely an investor and therefore, the suit agreement though signed, was not registered. It was alleged that in the year 2008, the plaintiff got the same registered on the basis of a false declaration. The contention in short is that the plaintiff had agreed to invest sum of Rs. 55,00,000/- and he paid sum of Rs. 40,00,000/- from the account of M/s. Gokul Construction and a sum of Rs. 6,50,000/- from the account of Gunwant Steel. Thus, in short, the contention is that the suit agreement was executed only by way of security.

¶35

As far as the 2^nd defendant is concerned, the contention is that the claim of the plaintiff is already settled. The 2^nd defendant claims that he was contractor appointed by the 1^st defendant and in all, seven flats including the suit flat were retained as a security by the 2^nd defendant till settlement of his claims. It is contended that as a security for the amount to

3/12

SQ Pathan

caf.1928.13.doc

be received by the 2^nd defendant from the 1^st defendant, the suit flat was held in joint possession by the 1^st and 2^nd defendants.

¶41

First Appeal No. 559 of 2013 has been preferred by the 2^nd defendant. In the said appeal, Civil Application No. 2443 of 2013 has been filed by the original plaintiff, in which, a prayer has been made that he should be appointed as the agent of the Receiver without any security or costs and put in possession as such. Civil Application No. 1927 of 2013 has been taken out by the 2^nd defendant praying for stay of execution of the decree with a prayer that he be appointed as the agent of the Court Receiver on such terms and conditions as this Court may deem fit.

¶42

The First Appeal No. 561/2013 has been preferred by the 1^st defendant. Civil Application no. 1928 of 2013 has been filed by the 1^st defendant praying for stay of execution of decree and praying for direction to appoint the 1^st defendant as the agent of the Court Receiver. Civil Application No. 2442 of 2013 has been filed in the said Appeal No. 561 of 2013 by the original Plaintiff seeking that he should be appointed as the agent of the Court Receiver.

4/12

SQ Pathan

caf.1928.13.doc

As all the contesting parties are seeking to occupy the suit flat as the agent of the Court Receiver, we had directed the Court Receiver to visit the suit flat for ascertaining whether the suit flat is in a habitable condition. Accordingly, the Court Receiver’s Report No. 153 of 2013 has been submitted by the learned Court Receiver. The Court Receiver has stated that the suit flat is in a habitable condition and can be occupied by the parties to the appeal. The Court Receiver made inventory of the movables in the suit flat, which is annexed to the said report. He has produced for perusal of the Court, photographs taken during the inventory. The report suggests that as possession of the suit flat was taken over from 2^nd defendant, the movables in the flat appear to be of the 2^nd defendant.

¶48

There are common submissions made by 1^st and 2^nd defendants.

¶49

The submission is that the suit agreement was never a genuine Agreement for Sale and it was executed as a security for transaction of investment. It is contended that the plaintiff is not interested in occupying the suit flat as he owns five other flats. The learned Counsel appearing for the 1^st defendant stated that the 1^st defendant is willing to deposit in this Court a sum of Rs. 40 lakhs which amount is admittedly paid by the plaintiff and he

5/12

SQ Pathan

caf.1928.13.doc

is willing to pay Rs. 40,000/- per month as royalty to Receiver per month. Submission made by 2^nd defendant is that said defendant was lawfully put in possession by the 1^st defendant. It is urged that as the possession of the flat was admittedly taken over by the Court Receiver from the 2^nd defendant, the said defendant has a better right to be appointed as the agent of the Court Receiver.

¶55

We must also note that a reliance was sought to be placed on the decision of the Apex Court in the case of Atma Ram Properties (P) Ltd. vs. Federal Motors (P) Ltd.¹ . It was submitted that if plaintiff wants the Court to appoint him as the agent of the Court Receiver, the plaintiff will have to pay royalty calculated on the basis of the market value of the said flat.

¶56

We have carefully considered the submissions. During the course of submissions, the learned Counsel appearing for the plaintiff has tendered an Undertaking affirmed on 14^th October, 2013. Apart from various undertakings which are incorporated in Clauses 1 to 6, he has offered to pay

1 (2005) 1 SCC 705

6/12

SQ Pathan

caf.1928.13.doc

a sum of Rs. 10,000/- per month towards the royalty for occupation of the suit flat. It is not in dispute that during the pendency of the suit, which was filed in the year 2009, the Court Receiver, High Court, Bombay, was appointed as the Receiver of the suit flat and that the Receiver had taken over physical possession of the suit flat. Considering the pendency of very old First Appeals in this Court, these Appeals are not likely to be heard in near future. The suit flat cannot be allowed to remain vacant till the disposal of the Appeals, which may take few years.

¶63

Now, the question is who should be appointed as the agent of the Court Receiver. Finding of the Trial Court is that the execution of suit agreement dated 10^th April, 2001 has been proved by the plaintiff and he has also established that entire aggregate consideration of Rs.45,15,000/has been paid by the plaintiff to the 1^st defendant. There does not seem to be any dispute regarding the payment of Rs. 40 lakhs by the plaintiff to the 1^st defendant. The defence of the 1^st defendant is that the suit agreement is not a genuine sale transaction and is executed only by way of security, as the plaintiff is an investor. Taking the written statement of the 2^nd defendant as it is, the said defendant is not claiming any right in the suit flat. 2^nd

7/12

SQ Pathan

caf.1928.13.doc

defendant claims that till the 1^st defendant settles his account and pays the amount due to him, the 2^nd defendant is entitled to remain in possession of the suit flat by way of security for payment of the amounts due and payable by the 1^st defendant. A stand is taken that though the Receiver may have taken possession from the 2^nd defendant, the 1^st defendant and 2^nd defendant were jointly in possession of the suit flat.

¶69

Thus, prima facie, there is no rival claimant to the plaintiff, who is claiming that he has a right, title and interest in the suit flat on the basis of the consideration paid by him to the 1^st defendant. Taking the case of the 2^nd defendant as it is, the claim of the 2^nd defendant against the 1^st defendant is at highest, a money claim. There is no document placed on record under which any right has been created in favour of the 2^nd defendant in respect of the suit flat.

¶70

As we have stated earlier, even according to the case of the 1^st defendant, he has received a sum of Rs. 40 lakhs from the Plaintiff. The consideration shown in the suit agreement is Rs.45,15,000/-. The plaintiff claims that he has become the member of the Society formed by the

8/12

SQ Pathan

caf.1928.13.doc

purchasers of the flats in the building constructed by the 1^st defendant and is paying outgoings. However, there is serious dispute on this factual aspect of payment of outgoings by the plaintiff.

¶76

Suffice it to say that amongst the three parties, the plaintiff has better equities. The plaintiff has parted with a huge amount of Rs. 40 lakhs. Moreover, there is a decree of specific performance and possession in favour of the plaintiff. The 2^nd defendant has no right as such in respect of the suit flat. The 1^st defendant has received a sum of Rs. 40 lakhs from the plaintiffs.

¶77

Therefore, in our considered view, the plaintiff deserves to be appointed as the agent of the Court Receiver, as the 1^st defendant has already received a sum of Rs. 40 lakhs from the plaintiff. This is a case where the plaintiff cannot be ordered to pay royalty on the basis of market value of the suit flat in view of payment of a sum of Rs.40 lakhs. The decision in the case of Atma Ram Properties (P) Ltd. (supra) will have no application at all. The said decision deals with the power of the Appellate Court of imposing condition on the unsuccessful defendant tenant, who has

9/12

SQ Pathan

caf.1928.13.doc

suffered a decree of eviction. Initially, the plaintiff had offered to pay royalty of Rs. 5,000/- per month. Now, in the undertaking, he has offered to pay a sum of Rs. 10,000/- per month by way of royalty. The offer given by the plaintiff deserves to be accepted. However, the plaintiff will have to furnish appropriate security as may be directed by the Court Receiver.

¶83

The other issue is regarding movables lying in the flat. We propose to grant time of eight weeks to the 2^nd defendant to remove his articles and furniture from the suit flat.

¶84

If the 2^nd defendant fails to remove the articles and movables

¶85

from the suit flat, the Court Receiver will have to seek necessary direction from this Court by submitting a report.

¶86

Hence, we dispose of the pending Civil Applications by passing the following order :

¶87

(1) Undertaking of the 1^st defendant dated 14^th October, 2013 filed on record in Civil Application No.1928/2013 in First Appeal No.561/2013 is hereby accepted;

10/12

SQ Pathan

caf.1928.13.doc

(2) The appointment of the Court Receiver, High Court, Bombay,

¶93

as the Receiver of the suit that shall continue till the disposal of the First Appeals. We direct the Court Receiver, High Court, Bombay to appoint the plaintiff as his agent to remain in occupation of the suit flat, subject to payment of royalty at the rate of Rs. 10,000/- per month and subject to furnishing such security, as may be directed by the Court Receiver;

¶94

(3) In addition to the monthly royalty, the plaintiff shall be under

¶95

an obligation to pay all outgoings and dues in respect of the suit flat including the amounts payable to the Cooperative Society formed by the purchasers of the flats;

¶96

(4) We grant time of eight weeks to the 2^nd defendant to remove his

¶97

articles and movables from the suit flat. On failure of the 2^nd defendant to remove his articles within the stipulated time, the Court Receiver shall submit a report to this Court, seeking further directions;

¶98

(5) On the goods and articles being removed by the 2^nd defendant

¶99

from the suit flat, the Court Receiver shall place the Plaintiff in

11/12

SQ Pathan

caf.1928.13.doc

possession as his agent to occupy the suit flat after completing all the formalities such as executing Agency Agreement, etc.;

¶105

(6) In the event, the plaintiff commits any breach of the undertakings incorporated in the written undertaking dated 14^th October, 2013, the Court Receiver shall submit a report to this Court to enable this Court to take appropriate action against the plaintiff;

¶106

(7) Till the disposal of the appeals, there will be interim stay of execution and operation of the Clauses 3 and 4 of the operative part of the impugned Judgment and Decree;

¶107

(8) Civil Applications are disposed of on the above terms.

¶108

(9) Court Receiver to act upon authenticated copy of this Judgment

¶109

and Order.

¶110

(REVATI MOHITE DERE, J.) (A. S. OKA, J.)

¶111

12/12

¶112

SQ Pathan

M/S.Suresh Enterprises v. Mr Jitendra K. Shah and Anr.

Case brief

What is this about?

What did the court decide?

M/S.Suresh Enterprises v. Mr Jitendra K. Shah and Anr.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Parties & counsel

Coram

Case details

Similar cases

M/S. Sharma Transport Vs Goods Transport Labour Board, Greater Mumbai and Ors.

City and Industrial Development Corporation of Maharashtra Ltd. Vs Deepa Mansukhani

Smt. Ashwini Ashok Jamnis Vs Shri Narayan Pahlajrai Chang

Smt. Mandakini Dattatray Hile Vs the State of Maharashtra and Ors.

Mr Niraj Mansukhlal Ved Vs Mr Jitendra K. Shah and Anr.

Shri. Prakash Vithoba Satpute Vs the State of Maharashtra, through Secretary, Home Dept and Ors.