Housing Development Corporation Ltd. v. Paranjape Construction Co. and Ors. and Vijay v Kalsekar Nd 82 Ors.

Bombay HC7 Oct 2013CHS/127/2010

Case brief

AI extract

What is this about?

This judgment rejects a chamber summons filed by 83 applicants seeking to be impleaded as defendants in a mortgage recovery suit. The applicants repeatedly failed to produce original agreements or receipts upon multiple directions from the court. The bench held that this conduct warrants an adverse inference and dismissed the application.

What did the court decide?

Chamber summons rejected and costs of Rs. 5000/- awarded to the plaintiff.

Housing Development Corporation Ltd. Vs… — Civil Procedure and Limitation | Bombay HC (2013)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

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CHAMBER SUMMONS NO. 127 OF 2010 IN

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SUIT NO. 2259 OF 2005

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Housing Development Corporation Ltd.,

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… Plaintiff.

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V/s.

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Paranjape Construction Co. & Ors.

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... Defendants.

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And

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The Court Receiver, High Court Bombay … Respondent No.1.

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And

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Vijay Vishwanath Kalsekar & 82 Ors. ... Applicants.

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Ms. Sneh Mehta i/by M/s. Wadia Ghandy for the Plaintiff. Mr. S. D. Paithane for the Applicants.

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CORAM : N. M. JAMDAR, J. DATE : 07 OCTOBER, 2013

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P.C. :

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1 By this chamber summons the applicants, who are 83 in number, pray that they may be joined as party defendants in the suit.

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2 The plaintiff – Housing Development Finance Corporation has filed the suit against the defendant nos. 1,2 and 3 for an amount of Rs. 5,34,70, 800/- . A declaration is sought as regards a valid and subsisting mortgage created by the defendants in favour of the plaintiffs and a direction is sought for redemption of

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the mortgage. It is the case of the plaintiff that the defendant no.1 -Firm carries on business of construction of buildings and development. It had approached the plaintiff for securing financial assistance from the plaintiff for a project at village Kofrad, Virar, Dist.Thane. According to the plaintiff that defendant no.1 created a mortgage of part of the property at village Kofrad in favour of the plaintiff. It is plaintiff's case that financial assistance to defendant no. 1 to the tune of Rs. Three crores was sought. The plaintiff granted the same, upon defendant no. 2 executing irrevocable and continuing letter of the guarantee in favour of the plaintiff, guaranteeing repayment of all the amounts due and payable. The amount was not paid and the plaintiffs have filed the suit for recovery of the same. The suit was transfered to the category of undefended suit by order dated 23 October 2007 passed by the Prothonotory and Senior Master in notice of motion no. 1565 of 2009, which was taken out by the plaintiff. In the said notice of motion, some defendants were represented through the Advocate. However, since last few occasions none had appeared on behalf of the defendants.

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3 The chamber summons, as afore-stated, has been taken out by 83 persons, claiming that the applicants and many others are purchasers of flats / row houses from defendant no.1. It stated in paragraph 2 in the affidavit in support that many of the agreements were registered before the Sub-Registrars, Thane and Mumbai and the booking details of the applicants has been annexed at Exh. 'A'. Exh. 'A' to the application does not annexe any agreement though

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list of certain members have been given. Thus on the basis of these details, it is contended that the defendants gave to the applicants initially preferential right numbers and subsequently the flat/ bunglow /row house with numbers allotted to them. It is stated that in every agreement, the defendant has given concrete and specific details of lands. It is also averred that the defendant has stipulated in the agreements that he will form and register a co-operative society. Claim is also made on the basis of section 10 of the Maharashtra Ownership of Flats Act, 1963, read with Rule 8 of the Maharashtra Ownership Flat (Regulation of the Promotion of Construction, Sale, Management and Transfer) Rules, 1964. It is on the basis of these averments and the exhibits, that the applicants have sought to be impleaded themselves as defendants.

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4 An affidavit in reply has been filed to the chambers summons by the Manager (Legal) of the plaintiff. It is stated in the affidavit that no details of any agreements have been given in the affidavit in support of the chambers summons. It is stated that the in-spite of specific directions dated 9 March, 2010, directing the applicants to provide details of the agreements, inspection of the documents has not been given. It is stated that assuming without admitting that the documents were executed, the flats/ bungalows will have to be identified in the agreements. It is stated that the the plaintiffs are unaware whether the applicants are bonafide purchasers of flats/bungalows/ row houses from the defendant no.1. On these and other grounds, the chambers summons is contested.

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5 The learned counsel of the applicants submitted that the applicants have receipts in their favour to show that certain allotments were made in favour of the applicants. The learned counsel submits that there is a decree passed by the consumer commission which clearly held that the right is created in favour of the applicants. The learned counsel for the plaintiff on the other hand submitted that in spite of the orders passed since year 2010, no inspection of any of the documents is given.

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6 The learned counsel for the applicants seeks further time to produce the receipts on record. He states no documents are available with him. In view of the orders passed since 2010 and the conduct of the applicants, it is difficult to grant any further indulgence to the applicants. On 26 August 2013 when the chambers summons was called out, none had appeared on behalf of the applicants. At that time, the learned counsel for the plaintiffs had made a grievance that the chambers summons is pending since year 2010 and in-spite of specific directions inspection of none of the documents is given. Accordingly, the chambers summons was placed for dismissal on 2 September 2013.

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7 On 2 September, 2013 the following order came to be passed.

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“The learned counsel for the applicants in support of chambers summons states that the inspection of the agreement executed in favour of the applicants in question will be given to the learned counsel for the plaintiff during the course of the week. S.O. to 16 September 2013.”

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Inspection was not given. Frivolous excuses were made. Thereafter, the matter was adjourned to 16 September, 2013. On 16 September 2013 the following order came to be passed :

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“. Stand over to 23 September 2013.

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2 The learned counsel for the applicants in support of chambers summons states that inspection of documents will be given on 19 September 2013 at 3.00 p.m. in the High Court premises.”

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8 The learned counsel for the plaintiffs states that in spite of the above statement of the applicants, inspection of documents was not given on 19 September, 2013 in the High Court premises. Thereafter, the matter was taken on 23 September, 2013. On 23 September, 2013, a detailed order came to be passed. It was specifically observed in the order that the learned counsel for the plaintiff was right in insisting upon inspection of the original documents upon which the right is claimed by the applicants. It was also clarified that if the applicants wanted to intervene in the present suit it must at least show basic documents in their favour by which they are seeking to assert their rights. It was also observed that if they have any of these documents in their possession, the plaintiff will be entitled to have inspection of the originals. Accordingly the matter was adjourned to today.

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9 The applicant was directed to give inspection of whatsoever original documents in their possession against each of

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the applicants to the plaintiffs. It was stated that if such original documents are not shown, the court will draw such inference as may be required in law. It was further directed that the inspection of original power of attorney/ authorization on behalf of the 82 applicants will also be given to the learned counsel for the plaintiff.

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10 When the matter is called out today, the learned counsel does not have a single document in his possession. A serious grievance made by the learned counsel for the plaintiff is that since the day of institution of the chamber summons, no inspection is given and it is difficult to believe that if the applicant had original documents, they would not show such documents at least to the court. If the applicants are seeking to assert their rights on the basis of certain receipts / agreements, they must produce the same on record. All that is done in the chamber summons is that they gave only a list of the applicants with certain details.

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11 The suit has been filed by the financial institution, seeking to recover it money lent to the developer. The developer is no longer appearing in the proceedings. This chamber summons is filed bereft of any particulars. In spite of several opportunities are given, inspection of the documents is not given. The manner in which the chambers summons is being prosecuted, I find credence in the grievance made by the plaintiff that the chambers summons is filed only for protracting the hearing of the suit for the benefit of the developers. The manner in which the adjournments are sought exhibits a complete refusal to produce original of the documents in

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spite of giving several opportunity, I find that no case is made out by the applicants for grant of a relief as prayed for in the chamber summons. This court had granted several opportunities to give inspection of the original documents or at least produce the same in the court. In spite of this indulgence, no documents are coming forthwith.

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12 By order dated 23 September, 2013, it is already recorded that in case the documents are not produced, the court will proceed to draw such inference as may be required in law. In the circumstances of the case this is a fit case where an adverse inference be drawn against the applicants.

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13 Chamber summons is accordingly rejected with cost of

Rs. 5000/-.

(N.M.JAMDAR,J.)

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Housing Development Corporation Ltd. v. Paranjape Construction Co. and Ors. and Vijay v Kalsekar Nd 82 Ors.

Case brief

What is this about?

What did the court decide?

Housing Development Corporation Ltd. v. Paranjape Construction Co. and Ors. and Vijay v Kalsekar Nd 82 Ors.

Case brief

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What did the court decide?

What the court decided

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