Disposed

Smita Ajay Yeole v. Milind Vishwanath Chalke and 2 Ors.

Bombay HC3 Jul 2018NMT/74/2018

Case brief

AI extract

What is this about?

In a testamentary suit, the court directed the appointment of valuers to assess the immovable properties of the deceased and his interest in commercial entities, issuing specific procedural orders regarding the valuation process and timelines.

What did the court decide?

Appointment of valuers for immovable properties and engagement of Chartered Accountants for breakup values of company shares and partnership; directions on timelines and information sharing;

Smita Ajay Yeole Vs Milind Vishwanath Chalke and 2… — Succession and Inheritance | Bombay HC (2018)

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909-TS175-13.DOC

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Arun

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY TESTAMENTARY AND INTESTATE JURISDICTION TESTAMENTARY SUIT NO. 175 OF 2013

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IN

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TESTAMENTARY PETITION NO. 551 OF 2013

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Smita Ajay Yeole…Plaintiff

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versus

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Milind Vishwanath Chalke & Anr…Defendants

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WITH

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NOTICE OF MOTION NO. 8 OF 2018

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IN

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TESTAMENTARY SUIT NO. 175 OF 2013

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IN

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TESTAMENTARY PETITION NO. 551 OF 2013

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WITH

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NOTICE OF MOTION NO. 80 OF 2018

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IN

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TESTAMENTARY SUIT NO. 175 OF 2013

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IN

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TESTAMENTARY PETITION NO. 551 OF 2013

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Page 1 of 9
3rd July 2018

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909-TS175-13.DOC

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WITH

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NOTICE OF MOTION NO. 74 OF 2018

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IN

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TESTAMENTARY SUIT NO. 175 OF 2013

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IN

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TESTAMENTARY PETITION NO. 551 OF 2013

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WITH

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CONTEMPT PETITION (L) NO. 3 OF 2017 IN

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NOTICE OF MOTION NO. 153 OF 2016 IN

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TESTAMENTARY SUIT NO. 175 OF 2013

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IN

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TESTAMENTARY PETITION NO. 551 OF 2013

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WITH

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CONTEMPT PETITION (L) NO. 4 OF 2017 IN

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NOTICE OF MOTION NO. 153 OF 2016

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IN

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TESTAMENTARY SUIT NO. 175 OF 2013 IN

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TESTAMENTARY PETITION NO. 551 OF 2013

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Page 2 of 9
3rd July 2018

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909-TS175-13.DOC

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WITH

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CONTEMPT PETITION (L) NO. 5 OF 2017

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IN

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NOTICE OF MOTION NO. 153 OF 2016

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IN

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TESTAMENTARY SUIT NO. 175 OF 2013 IN

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TESTAMENTARY PETITION NO. 551 OF 2013

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WITH

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CONTEMPT PETITION (L) NO. 6 OF 2017 IN

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NOTICE OF MOTION NO. 153 OF 2016 IN

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TESTAMENTARY SUIT NO. 175 OF 2013 IN

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TESTAMENTARY PETITION NO. 551 OF 2013

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WITH

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NOTICE OF MOTION (L) NO. 123 OF 2018 IN

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TESTAMENTARY SUIT NO. 175 OF 2013 IN

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TESTAMENTARY PETITION NO. 551 OF 2013

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Page 3 of 9
3rd July 2018

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909-TS175-13.DOC

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Mr JP Sen, Senior Advocate, with Ms Spenta Havewala, i/b M/s
Federal & Rashmikant, for the Plaintiff.
Mr Durgesh Kulkarni, for Defendant No.1.
Mr AM Saraogi, with Prajot Jagi, for Defendant No.2.

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CORAM: G.S. PATEL, J DATED: 3rd July 2018

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PC:-

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1.The dispute is between the heirs of the deceased, Vishwanath
Shankar Chalke (“Vishwanath”). The Plaintiff is his daughter. The
1st Defendant is his son. The 2nd Defendant is his widow.

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2.For some time now there have been in place several orders
regarding the functioning and operations of a company known as
Oriental Weaving and Processing Mills Private Limited
(“Oriental”). A committee of administrators has been appointed.
Vishwanath had a 40.40% shareholding (2,70,413 equity shares) in
Oriental. He also had several other assets: mutual funds, insurance
policies, shares in other firms, and rights in various immovable
properties.

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3.Both sides have suggested that as the first step towards a
possible settlement of all disputes, the various items in the estate
should be valued. At this stage, this is on a without prejudice basis as
none have yet entered into any discussions regarding any division of
the assets in this estate, or any mutual adjustments inter se. I believe
that no settlement or adjustment is possible unless there is a
reasonably accurate valuation of the estate.

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3rd July 2018

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909-TS175-13.DOC

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4.Mr Sen for the Plaintiff has tendered a list of the assets
comprising the estate. I will take this on record and marked it ‘L1’
for identification with today’s date. There is a corresponding list
tendered by Mr Saraogi for 2nd Defendant. This is taken on record
and marked ‘L2’ for identification with today’s date.

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5.Not all the assets need an independent valuation; that is to
say, some assets are such that their value at any given time can be
readily determined without consulting an outside valuer. For
instance, Vishwanath’s investments in mutual funds need not be
taken to a separate valuation. Their net asset value will be reflected
in the latest account statements. Similarly, insurance policies have a
known value and should present no difficulty. Vishwanath held
shares in Arvind Mills Limited, a traded scrip. Again, the valuation
of his 1000 shares in that company can be easily ascertained.

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6.What remains are the valuations of Vishwanath’s
shareholding in Oriental, his shareholding in another company
called Spice Island Apparels Ltd (“Spice Island”) and his half
share in a partnership firm known as M/s VK Industry (“VK
Industry”). These three entities, Oriental, Spice Island and VK
Industry themselves hold some immovable properties.
Consequently, for a meaningful valuation of Vishwanath’s interest
or shareholdings or partnership share in these three entities, those
immovable properties will also need to be valued.

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7.The next segment comprises the five immovable properties at
Jogeshwari, Sanpada, Pune (two properties) and Ratnagiri. There is

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3rd July 2018

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909-TS175-13.DOC

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some controversy between the two sides as to Vishwanath’s exact
share in one or more of these immovable properties. There is,
however, no dispute that it is these five immovable properties that
required to be valued.

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8.For the purposes of the valuation, I will appoint a valuer from
the panel of valuers maintained by the Court Receiver to value the
five immovable properties listed at Sr. Nos. D1, D2, D3, D4 and D5
of the list “L1”. The valuation at this stage is not to be of any
fractional holding, but of the entire property on an as is where is
basis. Any existing occupancies are not to be taken into account in
the course of this valuation. The valuer will also value the
immovable properties held by the companies at Sr Nos C1, C3 and
C4, namely Oriental, Spice Island and VK Industry from List L1.
The Plaintiff will furnish a list of the immovable properties held by
these three entities as maintained in the books of accounts of these
three entities to the valuer.

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9.This valuation is to be conducted by M/s AT & TS
Associates, on the panel of this Court.

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10.Given the extent of the exercise and the fact that not all the
properties are in Mumbai, I will allow the valuers two months’ time
and request that a valuation report be made ready on or before 3rd
September 2018.

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11.In the meantime, I will request M/s Bansi S. Mehta and Co, a
firm of highly reputed Chartered Accountants that enjoys the

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909-TS175-13.DOC

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utmost confidence, to begin determining the breakup value of the
equity shares of Oriental and Spice Island, and of valuing the
partnership firm VK Industry, and Vishwanath’s share in that firm.
Mr Sen suggested the appointment of M/s Bansi S. Mehta & Co,
and later confirmed that it could take up the assignment. The
Defendants have no objection and support the suggestion.

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12.It seems to me self-evident that an accurate valuation of these
commercial entities (and of Vishwanath’s share in the firm) will
depend on the valuations returned for the immovable properties
held by those entities. The final valuation of the commercial entities
will therefore necessarily have to follow the completion of the
exercise regarding the property valuation. Yet, there are other
aspects of the commercial enterprises/entities that also need to be
assessed and valued and M/s Bansi S Mehta & Co may commence
that part of the work at the soonest, examining the books of account
of Oriental, Spice Island and VK Industry and looking at all other
commercial documents. Their valuation reports will, of course,
explain in brief their methodology and the valuation methods
adopted.

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13.In order to shorten the time frames, I would request M/s AT
& TS Associates to start their assignment by first valuing the
immovable properties held by Oriental, Spice Island and VK
Industry. After that is completed, they may then take up the
valuations of the five properties in which Vishwanath individually
had a share, or which he held solely (Sr Nos. D1 to D5 of List “L1”).

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909-TS175-13.DOC

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14.None of these reports are at this stage to be disclosed to
either side without a specific order of the Court. M/s AT & TS
Associates will submit their valuations of the commercial entities’
immovable properties in a sealed cover, and I will then separately
forward these reports to M/s Bansi S Mehta & Co for inclusion or
incorporation in their valuations of the commercial entities.

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15.The Advocates for the Plaintiff will forward ordinary copies
of this order to M/s Bansi S Mehta & Co and to M/s AT & TS
Associates, with a copy to the Advocates for the Defendants. Both
sides will furnish M/s Bansi S Mehta & Co and to M/s AT & TS
Associates with copies of such documents and records as are
needed. There is to be no withholding of information from either
consultant.

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16.Parties agree that the costs of both valuations will be met out
of the funds available in the estate. This is noted.

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17.For the present list the matter for directions on 25th July
2018. By that date, both consultants should indicate in
correspondence to advocates for all parties the estimate time they
will need to complete their respective assignments.

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18.In order to ensure that the process is not complicated, both
sides agree that there will be no third party rights created,
encumbrances or charges made, nor there will be any dispositions of
any of the immovable properties or any parting with possession
without prior leave of the Court obtained after sufficient notice to

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Page 8 of 9
3rd July 2018

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the other side. Mr Sen submits that there may be a requirement to
raise capital for Oriental by creating a security over some of its
immovable properties. At present, that is without particulars. Leave
to the Plaintiff to make an appropriate application for permission to
proceed with any such transaction once there are more details
known and available.

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19.As to the 2nd Defendant’s complaint that her driver’s salary
is not being paid by Oriental, Mr Sen makes a statement on
instructions that 2nd Defendant, the mother of the Plaintiff and 1st
Defendant, will have the services of a driver and his salary will be
paid by the company in question. However, the company is not
required to pay for either the driver or the fuel expenses for the car
that is being used by 1st Defendant.

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NOTICE OF MOTION NO. 74 OF 2018

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IN

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TESTAMENTARY SUIT NO. 175 OF 2013

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IN

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TESTAMENTARY PETITION NO. 551 OF 2013

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20.By consent the Motion is made absolute in terms of prayer
clause (a).

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(G. S. PATEL, J)

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Page 9 of 9
3rd July 2018

Smita Ajay Yeole v. Milind Vishwanath Chalke and 2 Ors.

Case brief

What is this about?

What did the court decide?

Smita Ajay Yeole v. Milind Vishwanath Chalke and 2 Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Parties & counsel

Coram

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