Pravin D. Shetty And Anr vs Paras Sunderji Dedhia And Anr
2021 Latest Caselaw 14438 Bom

                   IN THE HIGH Court OF JUDICATURE AT BOMBAY

                       ORDINARY ORIGINAL CIVIL JURISDICTION

                       INTERIM APPLICATION NO. 1230 OF 2020

                                             IN

                    EXECUTION APPLICATION (L) NO. 428 OF 2020

                                             IN

                                    SUIT NO. 1240 OF 2018


Pravin D. Shetty and Anr.                      ...            Applicant/Plaintiffs
         vs.
Paras Sunderji Dedhia and Anr.                 ...            Respondents/Defendants


Mr. Mayur Khandeparkar a/w. Mr. Malcolm Siganporia, Mr. Sandeep
Dhangar and Mr. Paras S. Gosar i/b. Mr. Jayesh R. Vyas for the
Applicants/Plaintiffs.
Mr. Prashant Chande a/w. Mr. J. K. Shah and Mr. Archit G. Manurkar i/b. R.
J. Law for the Respondents/Defendants.
Ms. Rekha Rane, 2nd Assistant to the Court Receiver.


                                               CORAM : A. K. MENON, J.

DATED : 5th OCTOBER, 2021.

P.C. :

1. By this interim application the applicants-judgment creditors seek:

(a) disclosure on oath of all particulars of assets and properties movable

and immovable including those mentioned in Exhibit C to the interim

application

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(b) particulars of the interest of the respondents in such properties.

(c) for disclosure on oath of all debts and amounts due and payable by

third parties whether recoverable now or thereafter along with names of the

debtors and particulars of due dates and other orders, award or decrees in

favour of the respondents under which any monies are to be received.

The applicants who are the original plaintiffs and decree holders seek these

reliefs in the course of execution of the decree that has admittedly been

passed.

2. The decree has occasioned pursuant to consent terms dated

19th September, 2018 which were made an order of the Court. The interim

application also seeks an injunction restraining respondents from disposing

any of the properties described in Exhibit C and for appointment of Court

Receiver in respect of those properties in Exhibit C. The applicants also seek

attachment of properties in Exhibit C to secure an amount of Rs.

1,19,09,497/- and other amounts said to be decreed and attachment of debts

and other receivables from third parties to the extent of sum of

Rs.1,19,09,497/-. Garnishee Notices are also sought against all such

debtors.

3. At the hearing today Mr. Khandeparkar has restricted the relief to

prayer clause (a) and (b) and seeks liberty to apply for further relief, if the

relief in terms of prayer (a) and (b) are granted. In support Mr.

20-IA-1230-2020-EXAL-428-2020.odt rrpillai Khandeparkar has relied upon the consent terms dated 19 th September, 2018.

He relies upon undertakings of the defendants in Clause 5, 7 and 9 of the

consent terms. He submits that cheques issued in discharge of obligations

under Clause 9 have all been dishonoured. This fact has not been disputed

by the respondents. In fact clause 9 contained an undertaking to ensure that

the cheques would be honoured. He therefore submits that a disclosure is

required in order to give effect to the consent terms and the order passed

thereon in execution proceedings. He submits that the plaintiffs are unable

to proceed to attach further assets unless such disclosure is made.

4. The application is opposed by Mr. Chande on behalf of the respondents

who has submitted that the reading of the consent terms by the applicants is

incorrect, that upon considering the provisions of clause 16 of the consent

terms all that the plaintiffs- judgment creditors are entitled to is to proceed

in execution of a decree in terms of the prayers in the plaint. He submits that

obligations under clause nos. 5 to 11 are covered and the other obligations, if

any, are subject to clause 16. Admittedly his client is in default of clauses 5

to 11 of the consent terms. Upon default, Mr.Chande submits, the only

consequence that follows is a decree in terms of prayes in the plaint. He has

invited my attention to the prayers of the plaint and he submits that as far as

prayer clause (a) is concerned he is willing to hand over sanctioned plans of

the two flats being Flat No. 1701 and 1702 , 17 th Floor, Yash Signature, Sion

Trombay Road, Mumbai. He submits that the Receiver is now already

20-IA-1230-2020-EXAL-428-2020.odt rrpillai appointed of the two flats and Receiver has taken possession of the same

pursuant to earlier order and therefore there is no occasion to make any

grievance on that count.

5. As far as the other prayers are concerned, Mr.Chande submits that

perusal of the prayer in the plaint reveal that the two agreements for sale in

respect of the suit flats are now been decreed to be valid, subsisting and

binding. As far as possession of the flats is concerned, Mr. Chande submits

that the Court Receiver has already taken possession of the same and it is up

to the parties to seek possession upon occupation certificate being issued. He

has already submitted that the occupation certificate is not yet been issued

but has being pursued by the respondents.

6. Mr. Chande further submits that prayer clause (d) and (e) cannot now

be enforced since what effectively the plaintiffs seeks are payment of Equated

Monthly Installments (EMI) payable by the plaintiffs to the bank / financial

institution they have borrowed from as stated in Exhibit J and K. Exhibit J

and K pertain to the EMI payable for the period May, 2016 to August, 2018

and further EMI's. The fact remains that the computation of EMI is on the

basis that loan has been obtained from HDFC Bank and there is monthly

liability of Rs. 1,37,885/- in respect of each of these flats. It is in recognition

of that fact that the consent terms were arrived at. Since the flat is now in

possession of the Court Receiver, Mr. Chande submits that there is no

20-IA-1230-2020-EXAL-428-2020.odt rrpillai occasion to direct payment of these amounts since that would amount to

rewarding the applicant without payment of part of the cost of the flat, after

Receiver has taken physical possession of the flat. He submits that effectively

this would be rewarding the plaintiffs despite the agreements under MOFA

requiring the plaintiffs to pay the entire purchase price of the flat. This he

submits could never have been the intention of the defendants and indeed

cannot be basis of the prayer for disclosure.

7. He has invited my attention to the various other provisions of the

consent terms all of which he states are otiose since clause 16 overrides all

the other provisions. According to him since the defendants are already in

default and the decree in terms of prayer in the plaint is liable to be put into

execution and that he submits cannot include the prayers (d) and (e).

Effectively what Mr. Chande submits is that apart from getting declaration

that the two agreements for sale are valid and binding and the decree for

specific performance all these including handing over of the said two flats

and parking spaces no other relief can now be sought. He submits that the

plaintiffs having secured such a declaration and having obtained an order

appointing Court Receiver as Receiver of the two flats and the Court Receiver

having taken possession, the decree in practical terms is satisfied with the

only rider being that plaintiffs can be put in possession only upon occupation

certificate being issued and that occupation certificate is expected to be issued

soon.

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8. He submits that the decree in terms of prayer clause (d) and (e) is not

today executable since the amounts sought therein on the purchase price of

the flats and it is impossible for the plaintiffs to execute such a decree on the

basis that he must get flats and yet not pay consideration to the extent of the

EMIs sought and as more particularly Exhibit J and K. He therefore submits

that there is no occasion to grant relief particularly in the present interim

application and that the interim application is liable to be dismissed.

9. Mr. Chande also invited my attention to the Execution Application and

Column G which sets out the amounts of debt and interest sought to be

recovered. He submits that Column G does not set out any amount that is

actually due since decree in terms of prayer clause (d) and (e) would result in

absurdity for reasons set out above and it is these very amounts that are

sought to be recovered as debts that is claimed to be due and payable along

with interest thereon. As far as handing over possession of the properties are

concerned he submits Receiver having taken possession only of the flats, the

respondents are yet to identify the two parking spaces attached to each flat as

per suit agreement.

10. Having noticed that the plaintiffs have given credit for a sum of Rs. 5

lakhs received as set out in claim of the Execution application, I queried Mr.

Chande as to whether the sum of Rs. 5 lakhs has in fact been paid, and if so

for what reason, since that payment in my view militates against the

20-IA-1230-2020-EXAL-428-2020.odt rrpillai contention that no amount whatsoever is payable in monetary terms and

answer to this is not forthcoming for want of instructions.

11. In this respect my attention has been invited to the affidavit in reply

filed to the present interim application of defendant no. 1 dated 20 th

September, 2021. The affidavit however sets out a different picture. It is

affirmed after the ad-interim order dated 1 st September, 2021 was passed

and in paragraphs 5 and 6 the deponent states as under :

5. I further submit that as pre* the provisions of the Code of

Civil Procedure, 1908, in a decree for payment for money, the

value of the property attached should as merely as may be,

correspond with the amount due under the decree. In the present

case, the value of the amount due under the decree is Rs.

1,05,15,115/-. However, the value of the property attached is

much more than the decretal amount.

6. I further say that the present Application is taken out by the

Applicant and Decree Holders, for enforcing of their entitlement

under Consent Terms dated 25 th October, 2018. I say that the

alleged entitlement of the Applicants under the aforesaid Consent

Terms is approximately Rs. 1,05,15,115/-. Hereto Annexed and

Marked Exhibit-I is a photo copy of the estimated entitlement of

the Applicants.

* sic

20-IA-1230-2020-EXAL-428-2020.odt rrpillai The deposition in paragraph 5 runs contrary to the submissions made across

the bar today inasmuch as the defendant admits the existence of decree in

monetary terms but seeks to contend the value of property attached is much

more that even under the consent terms a sum of Rs. 1,05,15,115/-. is

payable as per break up provided in Exhibit I. Exhibit I details the

computation of the aforesaid amounts. It admits of liability to the extent of Rs.

62 lakhs payable under clause (5) of the consent terms. Obviously it admits

of liability to pay compensation in a sum of Rs. 45,69,115/- as per clause 9

and Rs. 2,50,000/- per Clause 11. The amount of compensation is

computed after accounting for balance purchase price payable towards the

flat as specified in clause 10 of the consent terms. It is against this total of Rs.

Rs. 1,10,15,115/- the sum of Rs. 5 lakhs is shown to be paid by the defendant.

Thus on its own showing the defendant is liable to pay at least Rs.

1,05,15,115/-.

12. I have also considered Mr. Chande's contention that once the decree is

passed pursuant to clause 16 the amount of EMIs cannot be claimed. That

appears to be a reasonable interpretation in the facts of the case as it would be

difficult to imagine how a purchaser could force the developer to pay EMIs

of funds borrowed by him to purchase the very flat of which he seeks title

and in respect of which he has obtained a decree. The Receiver is now in

possession and all that is now remaining is for the defendants to obtain

occupation certificate upon which the plaintiffs would be entitled to seek

20-IA-1230-2020-EXAL-428-2020.odt rrpillai possession and use the flat. However on a consideration of the contents of the

consent terms it is seen that clause 17 provides that the suit is to stand

disposed in terms of the consent terms. This is part of agreement between the

parties. An order came to be passed on 19 th September, 2018 when this Court

accepted the consent terms, took it on record and disposed the suit in terms of

the consent terms. Thus there is no decree in terms of these consent terms.

The decree is in terms of the suit which is subject to the provisions of the

consent terms and that is the only reasonable way of interpreting the effect of

the decree. Thus while Mr. Chande may be right in submitting that EMIs

form part of the purchase price cannot be claimed back by the plaintiffs. If the

plaintiffs wish the agreement to be specifically performed, that would

necessarily entail the obligation of the plaintiffs to pay purchase price but

there is no escaping the fact that the defendants agreed to compensate the

plaintiffs in all other ways provided in the consent terms. That is how

defendants have understood the consent terms and acted upon the consent

terms. The submission made across the bar now that there is no obligation to

pay the sum computed at Rs. 1,05,15,115/- by the defendants lacks merits.

The obligation of the defendants is now crystallised and is absolute. It is in

these circumstances one must view the prayers that are now sought. In my

view, these prayers are required to be granted at least to the extent that the

plaintiffs are entitled to recover the sum of Rs. Rs. 1,05,15,115/-.

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13. In view of the several attempts made at settlement Mr. Chande has

repeatedly submitted that the defendants have no intention whatsoever of

committing breach of orders of the Court nor has it any intention of

depriving the plaintiffs or other flat purchasers. While the intentions may be

honorable, the obligation to pay has not been performed. This would require

the executing Court to ensure that the orders of this Court are given effect to

and that the decree satisfied. This matter was first moved on 18 th February,

2020 and the matter stood adjourned by consent to 24 th February, 2020.

Thereafter on 2nd March, 2020 it was once again adjourned to 9 th March,

2020 and on 9th March, 2020 it was adjourned to 12 th March, 2020.

Thereafter additional affidavit(s) were filed. The matter was adjourned to 31 st

March, 2020. On account of the ensuing lock down, the matter came to rest

till it was taken up on 1 st September, 2021. Thus for more than a year and

half the defendants had several opportunities to come clean and pay the

decretal amount but that has not been done.

14. In these circumstances it is but obvious that either the defendants are

unable to pay or is deliberately avoiding compliance with the decree and the

plaintiffs are left with no option but to proceed in execution and for these

reasons and for the plaintiffs to recover the amount that are due to them

including from book debt and debtors of the defendant, it is necessary that

the relief be granted. In view of the Supreme Court in the decision of Rahul

S Shah vs Jinendrakumar Gandhi (2021 SCC OnLine SC 341) setting out

20-IA-1230-2020-EXAL-428-2020.odt rrpillai basic guidelines for executing Court there is a mandate for every executing

Court to follow those guidelines. The directions of the Supreme Court include

an order for disclosure of assets. In that view of the matter I pass the

following order :

(i) Interim application allowed in terms of prayer clause (a) and (b).

(ii) Liberty to apply for prayer clause (g). Disclosure affidavit to be filed by

the defendants personally after verifying all assets that they hold individually

and jointly with others specifying the share of the defendants within a period

of one week from date of uploading of this order.

(iii) Disclosure shall include particulars of all bank accounts held by the

defendants, all investments in shares, bonds, mutual funds. Defendants shall

provide Income tax returns with all annexures for the last three years.

Defendants shall also provide soft copies of all bank statement and statement

issued by the NSDL and CSDL for the period from March, 2020 to date and

in the meantime shall not dispose any of these without leave of the Court.

Withdrawal, if any, shall be only in the usual course of business till further

orders. Disclosure of the above shall pertain to assets in individual name and

that of the proprietary concern.

(iv) Defendants shall meanwhile intimate the plaintiffs and the Court

Receiver of the car parking spaces attached to flat nos. 1701 and 1702 and

hand over possession of the same to the Receiver after demarcating this on the

true copy of the sanctioned plan.

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(v) Meanwhile the Receiver who is present in Court has placed on record

Report no. 391 of 2021. The Report records compliance with the order dated

1st September, 2021. Compliance is noted.

(iv) List on 20th October, 2021 for noting compliance.

(A. K. MENON, J.)

Digitally signed by RAJESHWARI RAJESHWARI RAMESH RAMESH PILLAI PILLAI Date:

2021.10.08 17:46:42 +0530

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