Bombay High Court
Balkrishna Appayya Shetty vs Hemant H. Thakkar on 6 May, 2021
Bench: P. K. Chavan
COURT RECEIVER-1-2021.doc
Shailaja
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
COURT RECEIVER REPORT NO.01 OF 2021
IN
FIRST APPEAL NO.369 OF 2016
IN
SUIT NO.1186 OF 1979
A/W
CIVIL APPLICATION NO.997 OF 2016
Balkrishna Appayya Shetty ]
Of Mumbai Indian Inhabitant, ]
Carrying on business at 11/12, Chadwa ]
Apartments, Sion Trombay Marg, ]
Chembur, Mumbai - 400 071. ] Appellant
(Original Defendants)
Versus
1. Hemant H. Thakkar ]
(since deceased) ]
1a. Shaila Hemant Thakkar and others. ]
2. Rita D. Katira ]
3. Pankaj Harish Thakkar ]
4. Tushar Harish Thakkar ]
All of Mumbai Indian Inhabitants ]
Residing at La-Repose, 21, Lakhamsi ]
Nana Road, Dadar, Mumbai - 14. ] Respondents
(Original Plaintiffs)
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.....
Mr. Ashish Kamat a/w Ms. Sumantini Mohite, for Court Receiver.
Ms. Neha Bhatt i/b M/s. Bilwala & Co., for Appellant.
Mr. G.T. Mestha, for Respondents No.3 and 4.
Mr. Ram Upadhyay a/w Mr. Dharmesh Singh i/b Law Competere
Consultus, for Respondent No.4(A) in First Appeal.
Mr. D.N. Kher, Court Receiver present.
.....
CORAM : PRITHVIRAJ K. CHAVAN, J.
RESERVED ON : 25th MARCH, 2021.
PRONOUNCED ON : 6th MAY, 2021.
[THROUGH V.C.]
JUDGMENT:
1. This is an application by the Court Receiver (for short "C.R")
with a twofold prayer viz; seeking a discharge without passing
accounts subject to costs, charges and expenses to be paid by the
plaintiffs qua the suit property and the parties to prosecute their
claims before the Debt Recovery Tribunal (for short 'D.R.T"),
independently.
2. Facts material for deciding this application can be
summarized as follows;
In an appeal No.350 of 2001 in City Civil Court Suit No.6821
of 1979 (High Court Suit No.1186 of 1979), Division Bench of
this Court (Coram: D.K. Deshmukh & J.H. Bhatia, JJ) passed the
following order;
" By consent of the parties, the Appeal is
disposed of in following terms;
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(i) The judgment and order dated 30-3-2001 is set
aside. The order dated 29-11-2000 passed in
Suit No.1186 of 1979 is also set aside.
(ii) Suit No.1186 of 1979 is remitted back to the
learned Single Judge for fresh trial in
accordance with law.
(iii) The Receiver of this court is appointed as
Receiver on the suit premises. The Receiver
shall take symbolic possession of the premises
and appoint the plaintiffs as agent of the
Receiver to be in possession of the premises,
where they will be permitted to carry on
business of Restaurant.
(iv) The appointment of the Plaintiffs as agent of
the Receiver shall be on usual terms and
conditions except security and royalty. So far
as royalty is concerned, the Receiver shall, after
agency agreement is entered by the Plaintiffs,
take steps to determine the amount of royalty
in accordance with law. The amount that is to
be determined by the Receiver as royalty shall
not be required to be paid at present. The
plaintiffs shall as agents of the Receiver shall
file an undertaking before the learned single
Judge that they will deposit the amount of
royalty as may be determined by the Receiver,
if so directed by the learned single Judge and
on such terms and conditions as may be
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directed by the learned single Judge.
(v) Expenses of the Receiver shall be borne by the
plaintiffs.
(vi) Considering that the suit is of the year 1979,
the learned single Judge is requested to hear
and dispose of the suit as expeditiously as
possible".
3. Pursuant to the said order, the Court Receiver took symbolic
possession of the suit property on 8th October, 2007 and, inter alia,
appointed the plaintiffs as his agents in respect of the suit
property.
4. On 1st February, 2020, one Advocate G.T. Mestha,
representing respondents Hemant Thakkar and others forwarded a
copy of an order of appointment of Court Receiver and order
dated 7th January, 2020 passed by DRT-II informing that in
Recovery Proceedings No.506 of 2004, the D.R.T had taken
possession of the suit property on 28th January, 2020 from the
Manager of the respondents with Police help without giving any
copy of the Panchanama and locked the suit premises through one
Prabhat J. Dubey who was appointed Advocate Commissioner as
per the order dated 25th November, 2019. The Recovery Officer
namely Sunit K. Meshram of the D.R.T-II, Mumbai had issued an
order dated 7th January, 2020 appointing the said Mr. Prabhat
Dubey as an Advocate Commissioner.
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5. When the Section Officer of the Court Receiver's Office
checked the status of the suit and the orders passed on the Official
Website of the Mumbai City Civil Court, Mumbai, he came to know
for the first time that the learned City Civil Judge by a judgment
and order dated 4th December, 2015, decreed the suit. The
operative order of the said judgment reads thus;
" Suit is decreed with costs.
The defendant do deliver the possession of
the suit shops alongwith the suit business to the
plaintiffs.
The plaintiffs shall continue their possession
in the suit shops and the business of Parkway
Restaurant therein as owners thereof and not as
agents of the Receiver after Receiver is discharged.
The Receiver shall stand discharged on passing
accounts.
The defendant shall pay Rs.3000/- per month
to the plaintiffs from 25.07.1979 till they were put
in possession of the suit shops by the Court
Receiver.
The Court Receiver to refund the plaintiffs the
royalty amount, if any, paid by them after
deducting their requisite charges/fees, after the
period of appeal.
A decree be drawn accordingly".
6. According to the Court Receiver, none of the parties had
communicated to the Office of the Court Receiver about the fact of
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the said judgment dated 4th December, 2015. However, after
getting the knowledge, the Office of the Court Receiver has
prepared a final statement taking steps for filing account
statement. It is contended that due to the pandemic of Covid-19 ,
Office of the Court Receiver could not file the account in the
Office of the Commissioner.
7. On 7th February, 2020, Mr. G.T. Mestha had forwarded a copy
of an order dated 27th June, 2017 passed by this Court (Coram:
G.S. Patel, J.) in First Appeal No.369 of 2016, whereby the appeal
came to be admitted. There are no further orders passed.
According to the Court Receiver, it's office has received letters
dated 28th July, 2020, 1st August, 2020, 8th October, 2020 and 20th
October, 2020 from one Law Competere Consultus Advocate
representing respondent Rita Katira who is original plaintiff No.2
in H.C Suit No.1186 of 1979.
8. In its letter dated 28th July, 2020 and 8th October, 2020, the
said Law Competere Consultus had informed the Court Receiver's
office that since it had not rendered the account, the property is
still with the Court Receiver and the property had also been sold
through an auction by RO-II of DRT-II despite the possession
being with the Court Receiver. It was also informed on behalf of
Rita Katira that she had noticed illegality and unlawful work at
the suit premises in the nature of sale of the property and taking
over it's possession by the RO DRT-II despite the possession being
with the Court Receiver.
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9. The Office of the Court Receiver by a communication dated
30th September, 2020 informed the Law Competere Consultus
representing Mrs. Rita Katira that the plaintiffs are agents of the
Court Receiver on record and an undertaking was given by the
plaintiffs as per the directions of this Court that they shall not
dispose off, part with or assign or transfer or sell or encumber or
mortgage or exchange or offer as security or otherwise, in any
way, alienate or deal with or dispose off or any part thereof, of the
premises of the suit premises which was allowed by the Court
Receiver to use and occupy to conduct the business of restaurant
as his agents under the agreement signed on behalf of them.
10. Subsequently, Court Receiver's Office received a letter on 8 th
October, 2020 from Law Competere Consultus, for Rita Katira
intervener/co-owner in Recovery Proceeding No.506 of 2004,
stating therein that she had filed an application for setting aside
sale of the suit property under Rule-60 r/w Rule-11 of Second
Schedule of Income Tax Act and as she had been aggrieved by the
impugned action of the Court Commissioner appointed by the
Recovery Officer, DRT-II, Mumbai who took the physical
possession of the suit premises without serving any notice upon
his client under Rule-49 which is mandatory in nature. It is also
informed that the Central Bank of India had put the suit premises
for auction in June, 2019 without the knowledge and consent of
the intervener who is a co-owner of the suit premises.
11. It appears that the Recovery Officer of D.R.T, Mumbai had
already taken physical possession of the suit premises. It is the
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contention of the Court Receiver that since he was put in a
symbolic possession and the actual possession has always been
with the plaintiffs as agents and as the suit has already been
disposed of confirming the possession of the plaintiffs as owners
thereof, he requests for seeking his discharge without passing
accounts subject to costs, charges and expenses to be paid by the
plaintiffs as well as directing the parties to prosecute their claim
before the Debt Recovery Tribunal independently.
12. I heard Mr. Ashish Kamat, learned Counsel appearing for the
Court Receiver. I have perused the written submissions on behalf
of the respondents.
13. Respondent No.2 has filed a Miscellaneous Application (L)
No.397 of 2021 in the City Civil Court in a disposed of S.C Suit
No.6821 of 1979 (H.C. Suit No.1186 of 1979) seeking following
prayers under Order-XL, Rule-4 of the Code of Civil Procedure
personally against Mr. D.N. Kher, who is the present Court
Receiver, without seeking prior leave of this Court.
The Following prayers are made by respondent No.2;
"a) This Hon'ble Court be pleased direct to
attach all the movable and immovable properties
of Mr. D.N. Kher, Court Receiver (i.e the
Respondent herein) which stands in his name
(whose properties details are available in the
Court Receiver's Office) under Order 40 Rule 4
Sub-rule c of the Code of Civil Procedure 1908
and further direction be given to sell the said
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attached property of Mr. D.N. Kher for making
good the losses suffered by the Applicant on
account of wilfull grave negligence of the
Respondent in discharging its duties in slapdash
manner towards the suit premises since February
2020.
b) This Hon'ble Court be pleased to impose
heavy cost and penalty upon Mr. D.N. Kher,
Court Receiver (i.e The Respondent herein) for
maintaining stoic silence and for discharging its
duties as enumerated under Order 40 of the CPC
1908 which resulted into irreparable losses of
the Applicant's co-ownership rights upon the suit
premises due to the lackadaisical and shoddy
approach of Respondent since February 2020;
c) pending the hearing of the present
Miscellaneous application, this Hon'ble Court be
pleased to appoint other experienced person as
court receiver in place of D N Kher (i.e
Respondent herein) as this Hon'ble Court deems
fit and proper and further direct newly
appointed CR to take all possible measures in
accordance with law for protecting, preserving
and securing the suit premises namely shop
no.11 & 12, Chhadva Premises Co-operative
Housing Society Ltd., Chhadva Apartments,
Sion, Trombay Road, Near Diamond Garden,
Mumbai - 400 071;
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d) pending the hearing of the present
Miscellaneous application, this Hon'ble Court be
pleased to issue show cause notice to D N Kher
Court Receiver (ie the Respondent herein) for
explaining his conduct for not taking necessary
measures under the law for protecting the
rights, title, interest etc. of the Applicant's in the
suit premises despite having knowledge about
the e-auction sale conducted by the Ld.
Recovery Officer, DRT-II, Mumbai since February,
2020;
e) Interim reliefs in terms of prayer clause
(c) and (d) above may be granted in favour of
the Applicant herein;
14. Following points need to be considered;
(a)whether in a disposed of suit by a Judge of the
City Civil Court who has become funcuts officio,
respondent No.2, herein, could have moved an
application against the Court Receiver with
prayers as above?
(b)Whether Judge of the City Civil Court could have
entertained such an application?
(c) Whether the respondents, in order to thwart
recovery proceedings before the DRT collusively
levelled false and baseless allegations against the
Court Receiver, who had already been discharged
from his symbolic possession by the Judge of the
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City Civil Court in view of the judgment and
decree dated 4th December, 2015?
Answers to these questions are emphatically in the negative for
the following reasons.
15. As can be seen from the judgment and decree dated 4 th
December, 2015, the Receiver who was in symbolic possession had
already been discharged and the plaintiffs/respondents who were
in possession of the suit property as an agents of the Receiver
have been directed to continue with their business from the suit
property. Therefore, there is no question of the Court Receiver
remaining in possession of the suit property as the
plaintiffs/respondents have never parted physical possession of
the suit property in favour of the Court Receiver who was merely
in symbolic possession thereof. Admittedly, first appeal preferred
by the original defendant bearing No.369 of 2016 is pending
before this Court challenging the judgment and decree of the City
Civil Court. In such circumstances, there was no business for the
City Civil Court to entertain an application, that too, of such a
nature against the Court Receiver since that Court had become
functus officio. The City Civil Court has no authority in law to
entertain such an application in a disposed of suit against which
an appeal has already been pending in this Court. It is surprising
as to how the City Civil Court had entertained an application
when it is aware of the fact that an appeal has been filed in this
Court. More so, in the said application, respondent No.2 has
sought certain directions against the Court Receiver, that too, in
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his personal capacity, who is an officer of this Court under the
direct administrative control of the Hon'ble the Chief Justice.
16. At this stage, Mr. Kamat, learned Counsel for the Court
Receiver has rightly placed useful reliance upon a judgment of
this Court in case of Girish M. Joshi Vs. Jagat Manubhai Parikh
and others, in Writ Petition No.2527 of 2009 (Coram: A.S. Oka,
J.). Paragraphs 4 and 5 of the judgment reiterates the position as
regards the nature and duties of the Court Receiver as well as the
fact that no Court other than this Court can appoint the Court
Receiver, High Court of Bombay, as a Receiver.
"4. Thus, the order of Division Bench notes that the
Court Receiver, High Court, Bombay is an employee
of the High Court who is subject to administrative
control of the Hon'ble the Chief Justice. There is no
provision either in the Original Side Rules or in the
Rules framed under the City Civil Courts Act which
empowers the City Civil Court to appoint the Court
Receiver, High Court, Bombay as a Receiver in the
suits and proceedings filed in the City Civil Court at
Bombay. The Court Receiver in his report has pointed
out provisions of Chapter I of the Office Manual
issued by the office of the Court Receiver in which it
is stated that the Court Receiver may be appointed as
a Receiver of a property either by the High Court or
by the City Civil Court. The Office Manual is nothing
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but a book of departmental instructions. Prima facie
it appears to me that on the basis of the provisions of
the Office Manual, the City Civil Court does not get
jurisdiction to appoint an officer of this Court as the
Receiver in suits and proceedings pending in the said
Court. By that logic, every Court in the State of
Maharashtra will be entitled to appoint Court
Receiver, High Court, Bombay as a Receiver.
5. In the report of the Court Receiver various
orders passed by the City Civil Court have been
pointed out. The office of the Court Receiver is
already under enormous pressure as by virtue of
orders passed by this Court in various suits and
proceedings including the arbitration petitions under
section 9 of the Arbitration and Conciliation Act,
1946, the Court Receiver is required to look after
very large and valuable immovable properties in the
City of Bombay and at other places. In fact, by virtue
of appointment as of the Court Receiver in suits filed
in this Court, the Receiver has to look after
properties which are situated even outside the State
of Maharashtra. Considering the enormous pressure
on the office of the Court Receiver, High Court,
Bombay and the lack adequate infrastructure, the
said office cannot be burdened any further. There is
no provision of law under which any Court
subordinate to this Court can appoint the Court
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Receiver, High Court, Bombay as a Receiver.
Therefore, necessary directions may be required to
be issued on the administrative side. It is, therefore,
directed that a copy of this order shall be placed
before the Hon'ble the Chief Justice for considering
the matter on the administrative side".
17. Respondent No.2 has not obtained leave of this Court before
initiating any action against the Court Receiver. The Hon'ble
Supreme Court in case of Everest Coal Company (P) Ltd Vs. State
of Bihar and others, (1978) 1 Supreme Court Cases 12 held thus;
"(2)When a court puts a Receiver in possession of
property, the property comes under Court's custody,
the Receiver being merely an officer or agent of the
Court. Any obstruction or interference with the
Court's possession sounds in contempt of that court.
Any legal action in respect of that property is in a
sense such an interference and invites the contempt
penalty of likely invalidation of the suit or other
proceedings. But, if either before starting the action
or during its continuance, the party takes the leave of
the court, the sin is absolved and the proceeding may
continue to a conclusion on the merits. In the
ordinary course, no court is so prestige conscious that
it will stand in the way of a legitimate legal
proceeding for redressal or relief against its receiver
unless the action is totally meritless, frivolous or
vexatious or otherwise vitiated by any sinister factor.
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Grant of leave is the rule, refusal the exception. After
all, the court is not, in the usual run of cases, affected
by a litigation which settles the rights of parties and
the Receiver represents neither party, being an officer
of the court. For this reason, ordinarily the court
accords permission to sue, or to continue a suit
already filed. The jurisdiction to grant leave is
undoubted and inherent, but not based on black
letter, law in the sense of enacted law. Equally clearly,
prior permission of the court appointing the Receiver
is not a condition precedent to the enforcement of the
cause of action. Nor is it so grave a vice that later
leave sought and got before the decree has been
passed will not purge it. If, before the suit terminates,
the relevant court is moved and permission to sue or
to prosecute further is granted, the requirement of
law is fulfilled. Of course failure to secure such leave
till the end of the lis may prove fatal".
18. Rule 596 of the Bombay High Court Original Side
reads thus;
R.596. Certified copy of the Minutes of the decree or
order to be served on the Receiver._ In a suit or
matter where a Receiver has been appointed, a
certified copy of the minutes of the decree or order
containing provisions which directly or indirectly
concern the Receiver shall be served on the Receiver
by the party on whose application the decree or order
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is passed within one week from the date of such
decree or order;
Provided, however, that where the party is
represented by an Advocate entitled to act on the
Original Side of this Court, it shall be the duty of such
Advocate to serve a certified copy of the minutes of
the decree or order on behalf of the party within the
time herein provided."
This rule mandates that within one week from the date of the
decree, a party to the suit shall furnish certified copy of the
minutes of the decree or order containing provisions which
directly or indirectly concern the Receiver. Indubitably, none of the
parties, ever since the suit has been decreed, in the month of
December, 2015 for a period of five years complied with the said
provisions. There is nothing on record from which it can be said
that the Court Receiver was duly intimated as above. No evidence
has been placed in that regard. Even otherwise, the Court
Receiver had already been discharged from the symbolic
possession subject to passing of accounts which is an act between
the Court Receiver and Commissioner. It does not mean that the
Court Receiver is still in possession and had failed to discharge his
lawful obligations. No explanation is forthcoming from the
respondents or for that matter from the appellant as to why there
was no compliance of Rule-596.
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19. Respondents No.1, 3 and 4 are brothers. Respondent No.2 is
their sister. Respondent No.2 is the applicant before the City Civil
Court. Admittedly, DRT (II), Mumbai took possession of the suit
property in Recovery Proceeding No.506 of 2004. Respondent
No.4-Tushar Thakkar had informed the Court Receiver on 1 st
February, 2020 that the Recovery Officer had appointed the
Commissioner to take possession of the suit property. Respondent
No.4 is a party before D.R.T. He could have intimated the Court
Receiver about the judgment of the City Civil Court and also the
DRT proceedings way back in 2004 itself i.e even before the
appointment of the Court Commissioner on 23 rd August, 2007. It
is apparent that respondent No.2 in collusion with respondent
No.4 and appellant are trying to falsely implicate the Court
Receiver in his personal capacity who had already been
discharged from symbolic possession. Since the respondents have
been in continuous physical possession of the suit property when
the Court Receiver was appointed, no sane man will believe
respondent No.2 that she was unaware of the auction sale of the
suit property before D.R.T. The story put forth by the respondents
is palpably unbelievable, unacceptable and untrustworthy.
Business of restaurant is being run by the respondents in the suit
property. The record indicates that Notice of settling the sale
proclamation in the recovery proceedings was pasted upon the
suit property. Under such circumstances, office of the Court
Receiver cannot be permitted to be misused to thwart the D.R.T
proceedings which have been initiated in accordance with law.
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20. Though the appellant and respondent No.4 have spoke in
tune with respondent No.2, inter alia, objecting discharge of the
Court Receiver, they, in fact, have no locus in view of the fact that
they too failed to inform the Court Receiver regarding the
judgment and decree passed by the City Civil Court on 4 th
December, 2015.
21. Mr. Kamat has strenuously urged to take into consideration a
mala fide conduct of respondent No.2, inter alia, praying for
imposing exemplary costs so that in future such elements should
not succeed in their nefarious design to personally implicate the
Officer of this Court in such a manner. I must appreciate the
concern shown by Mr. Kamat, however, I restrain myself from
imposing any costs upon respondent No.2, for, the observations
made hereinabove, according to me are sufficient in facts and
circumstances of this case.
22. The corollary of the aforesaid discussion is that the
application taken out by respondent No.2 before the City Civil
Court is quashed and set aside.
23. The Court Receiver shall submit the accounts within eight
weeks from the date of passing of this order.
24. The parties are at liberty to pursue their remedies before the
D.R.T, in accordance with law.
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25. In view of disposal of the Court Receiver's Report No.01 of
2021, pending application, if any, stands disposed of.
[PRITHVIRAJ K. CHAVAN, J.]
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