Advance Commercial Co. Ltd vs Pravin Jain
2022 Latest Caselaw 2530 Bom

                                                                              13crr.38.22..doc




                                        IN THE HIGH COURT OF JUDICATURE AT BOMBAY

                                          ORDINARY ORIGINAL CIVIL JURISDICTION
         Digitally signed by
ANJALI   ANJALI TUSHAR
TUSHAR   ASWALE

ASWALE
         Date: 2022.03.16
         18:44:00 +0530
                                   COURT RECEIVER'S REPORT NO. 38 OF 2022
                                                     IN
                                      CHAMBER SUMMONS NO. 471 OF 2018
                                                     IN
                               COMMERCIAL EXECUTION APPLICATION NO. 1022 OF 2018
                                                     IN
                                        WRIT PETITION NO. 922 OF 2015



                               Advance Commercial Co Ltd                 ..Petitioner
                                       Vs.
                               Pravin Jain                               ..Respondent


                               Ms.Mamta Sadh a/w Kainaz Irani, Abhishek Bhaduri, for the Applicant
                               in COMEX.1022.10
                               Mr.Karl Tamboly a/w Kausar Banatwala i/b Tushar Goradia, for the
                               Respondent.
                               Mr. Akshay Vani i/b MLS Vani & Associates, for the bidder.
                               Mr. S. K. Dhekale, OSD, Court Receiver is present.


                                                              CORAM:- B. P. COLABAWALLA,J.

DATE :- MARCH 15, 2022.

P. C.:

The Respondent is the owner of immovable property being

land situated at C.S. No. 767 at Dr. D.N. Road, Fort, Mumbai 400 001.

Originally, there was a ground plus 4 storey structure standing on that

land known as "Sarosh Building". Various premises of Sarosh Building

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were occupied by tenants as well as the Respondent. The Applicant in

the present execution proceedings was one such tenant/. Sarosh

Building has since been demolished by the MCGM since the structure

was in a dilapidated condition.

2 The Applicant had filed Writ Petition No. 922 of 2015

seeking various reliefs qua Sarosh Building. Pursuant to the mediation

hearings, the matter was settled between the parties, and the Applicant

and the Respondent entered into a Memorandum of Understanding-

cum Consent Terms dated 28th August 2017, as per which the Applicant

was required to surrender its tenanted premises to the Respondent for a

total consideration of Rs. 5,75,00,000/-(Rupees Five Crores and

Seventy five lakhs only).

3 By an order dated 28th September 2017 passed in the

aforesaid Writ Petition, the Memorandum of Understanding-cum-

Consent Terms dated 28th August 2017 was taken on record by a

Division Bench of this Hon'ble Court and the said Writ Petition was

disposed of in terms thereof. It was noted in that order that a sum of Rs.

5,75,00,000/- (Rupees Five Crores and Seventy-five lakhs only) was to

be paid by the Respondent to the Applicant by 31st December 2017.

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4            Since the Respondent did not make payment as per the

aforesaid order read with the Memorandum of Understanding-cum-

Consent Terms, the Applicant has taken out the present execution

proceedings. Initially, the Court Receiver, High Court, Bombay was

appointed as Receiver in respect of the first floor premises previously

occupied by the Applicant, by an order dated 6 th June 2018. However,

since sale of those premises did not materialize, the Court Receiver,

High Court, Bombay was appointed as Receiver in respect of the entire

property being the aforesaid land and Sarosh Building standing thereon

by orders dated 6th and 9th September 2019. The Receiver was directed

to sell the property.

5 Sarosh Building has during the pendency of these execution

proceedings, being demolished by MCGM under the orders of this

Court.

6 After the demolition of Sarosh Building, the Court Receiver

has filed the present Receiver's Report pointing out the steps taken by

him for sale of the property i.e. the land, by public auction. The auction

for the plot was held by the Receiver on 18 th January 2022. As per the

Court Receiver's Report, one M/s. Velma Industries has offered Rs.

10,50,00,000/- (Rupees Ten Crores and Fifty Lakh Only) crores and is

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the highest bidder. The Court Receiver has accordingly moved his

Report seeking further directions from this Court for acceptance of the

bid of the highest bidder, M/s. Velma Industries and to conclude the

sale.

7 The present Report was on board before this Court on 16th

February 2022. At that stage, the learned Counsel appearing on behalf

of the Respondent /Judgment Debtor sought time to enable him to

attempt to find a purchaser who may be willing to pay more than the

amount bid by M/s. Velma Industries. The matter was accordingly stood

over.

8 Today, Mr. Tamboly, the learned Counsel for the

Respondent /Judgment Debtor has instructions to state that if the

Judgment Debtor is given time upto 4th April 2022, as a last chance, he

will be in a position to pay the entire decretal amount of Rs.

5,75,00,000/- (Rupees Five Crores and Seventy-five lakhs only) to the

Applicant, in which case, the Decree dated 28th September 2017 shall

stand fully satisfied and there will be no requirement for further

proceedings in execution Application No. 1022 of 2018 or confirmation

of the sale in favour of M/s. Velma Industries. He accordingly requests

the Court to stand the matter over to 4th April 2022 to enable the

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Respondent /Judgment Debtor to make payment to satisfy the Decretal

amount of Rs. 5,75,00,000/- (Rupees Five Crores and Seventy-five

lakhs only).

9 Ms. Sadh, learned Counsel for the Applicant submitted that

the Judgment Debtor has made such promises in the past only to renege

on the same and has even breached the undertaking given to this Court.

She also submitted that the Applicant has filed Commercial Suit in this

Court being Commercial Suit No. 175 of 2021 titled as 'Advance

Commercial Co. Ltd. V. Pravin Jain' claiming interest on the amount of

Rs. 5,75,00,000/- (Rupees Five Crores and Seventy-five lakhs only) and

that the present order, if any, be passed without prejudice to the rights

and contentions of the parties herein and the said suit be tried on its

own merits. She therefore requested that the sale be confirmed in favour

of M/s. Velma Industries, who is represented in court by Mr. Vani.

10 Mr. Vani for Velma Industries has submitted that his client

has deposited two demand drafts viz. Demand Draft dated 14 th January

2022 bearing No. 384201 drawn on State Bank of India for a sum of Rs.

1,00,00,000/- (One Crore Only) and Demand Draft dated 2 nd February

2022 bearing No. 384087 drawn on State Bank of India for a sum of Rs.

1,62,50,000/- (One Crore Sixty-two Lakhs and Fifty Thousand Only),

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totaling to an amount of Rs.2,62,50,000/- (Two Crore Sixty-Two Lakhs

and Fifty Thousand Only) with the Court Receiver, and would be in a

position to deposit the balance amount of its bid with the Court Receiver

within 15 days of the confirmation of the sale in his client's favour,

should this Court be inclined to confirm the sale.

11 Mr. Tamboly does not admit to the submissions made by

the Ld. Counsel for the Applicant. Mr. Tamboly on behalf of the

Respondent /Judgment Debtor has assured the Court that his client is

serious and has every intention of making payment of the decretal sum

of Rs. 5,75,00,000/- (Rupees Five Crores and Seventy-five lakhs only)

to the Applicant on or before 4 th April 2022. He also submitted that as

the present Order is being passed, at the behest of the Judgment Debtor,

there will be no occasion to seek any extension beyond 4 th April 2022.

He therefore requested the Court not to confirm the sale in favour of M/

s. Velma Industries today but to defer the same. In addition to the

decretal amount, Mr. Tamboly stated that his client would

simultaneously pay a sum of Rs. 5,33,200/- (Rupees Five Lakh Thirty-

Three Thousand and Two Hundred Only) towards the Court Receiver's

charges in this matter, as well as a sum of Rs. 4,75,000/- (Rupees Four

Lakh Seventy-Five Thousand Only) to Velma Industries as and by way

of ad hoc compensation agreed to between the parties.

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12             The Court expressed its view that it is inclined to pass a self-

operative order which would in the first instance enable the Respondent

/Judgment Debtor time to make the payment as stated by Mr. Tamboly,

failing which the sale would stand finally confirmed in favour of M/s.

Velma Industries without further reference to the Court. The Applicant,

the Respondent /Judgment Debtor as well as Velma Industries have

agreed to the same. Hence the following order is passed with the

consent of all three of them:-

(i) The statement of the Respondent /Judgment Debtor that

he shall make payment of the decretal sum of

Rs. 5,75,00,000/- (Rupees Five Crore Seventy-Five Lakhs

Only) by way of a Demand draft drawn on any Nationalised

Bank in favour of the Applicant on or before 4 th April 2022

is accepted The statement of the Respondent / Judgment

Debtor that he shall simultaneously make the following

payments, is also accepted, viz:

a. A sum of Rs.3,73,200/- (Rupees Three Lakh and

Seventy-Three Thousand and Two Hundred Only) to the

Applicant by way of a Demand draft drawn on any

Nationalised Bank in favour of the Applicant as and by

way of refund of amounts paid by the Applicant towards

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Court Receiver's charges;

b. A sum of Rs.1,60,000/- (One Lakh and Sixty Thousand

Only) to the Court Receiver, towards the balance charges

of the Receiver in this matter;

c. A sum of Rs. 4,75,000/- (Rupees Four Lakh and

Seventy-Five Thousand Only) as and by way of ad hoc

compensation agreed to be received by M/s. Velma

Industries.

(ii) The highest bid of M/s. Velma Industries of Rs.

10,50,00,000/- (Rupees Ten Crore and Fifty-Lakhs Only)

for the Respondent's plot of land situated at Dr. D.N. Road,

Fort, Mumbai 400 001 is accepted and the sale thereof in

its favour stands provisionally confirmed. In the event that

the Respondent /Judgment Debtor fails to make payment

of the sum of Rs. 5,75,00,000/- (Rupees Five Crores and

Seventy-five lakhs only) in its entirety to the Applicant on

or before 4th April 2022, as well as the amounts payable to

the Applicant, the Court Receiver and M/s. Velma

Industries as set out in paragraph 12 (i) (a), (b) and (c)

above, the sale in favour of M/s. Velma Industries shall

stand finally confirmed without further reference to the

Court on and from that date i. e. 4 th April 2022. In that

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event, M/s. Velma Industries shall deposit the balance bid

amount with the Court Receiver within a period of 15 days

from 4th April 2022, and the necessary formalities for

completing the sale shall be effected by the Receiver in

terms of his public notice. In the event M/s Velma

Industries does not deposit the balance sale consideration

of Rs.7,87,50,000/- within 15 days from 4 th April 2020,

then the amount of Rs. 2,62,50,000/- shall be forfeited by

the Court Receiver and the Suit land shall be put up for sale

once again by the Receiver.

(iii) In the event the Respondent /Judgment Debtor pays the

entire sum of Rs. 5,75,00,000/- (Rupees Five Crores and

Seventy-five lakhs only) to the Applicant on or before 4 th

April 2022, as well as the amounts payable to the Applicant,

the Court Receiver and M/s. Velma Industries as set out in

paragraph 10 (i) (a), (b) and (c) above, the decree dated 28 th

September 2017 shall stand fully satisfied. The proceedings

for sale of the Respondent's property shall be suspended

and the two demand drafts viz. Demand Draft dated 14 th

January 2022 bearing No. 384201 drawn on State Bank of

India for a sum of Rs. 1,00,00,000/- (Rupees One Crore

Only) and Demand Draft dated 2 nd February 2022 bearing

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No. 384087 drawn on State Bank of India for a sum of Rs.

1,62,50,000/- (Rupees One Crore Sixty-Two Lakh and Fifty

Thousand Only) shall be returned to M/s. Velma Industries

by the Court Receiver forthwith. In the event if amounts as

contemplated herein are paid by the Respondent to the

Applicant i.e. Rs. 5,75,00,000/- (Rupees Five Crores and

seventy-five lakhs only) and if there is Goods and Services

Taxes (GST) applicable with interests and penalties, if any,

on account of the amounts being received by the Applicant

in lieu of surrendering its Tenancy rights in favour of the

Respondent, the Respondent shall be liable in connection

therewith and shall pay the same subject to the entitlement

of the Respondent to take steps and/or challenge the

demand made in accordance with law. The Respondent

indemnifies the Applicant in connection therewith. It is

further made clear that the applicant is not liable under any

circumstances for any payment on account of Goods and

Services Tax (GST), Interests and penalties thereon.

(iv) It is made clear that in the event the Respondent /

Judgment Debtor fails to make any of the payments, set out

above, leading to the sale being finally confirmed in favour

of M/s. Velma Industries, the Court shall on the next date

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i.e. 5th April 2022 consider passing directions for

apportionment of the sale proceeds in accordance with law.

(v) It is made clear that this Order is passed without prejudice

to all the rights and contentions of the parties herein in

Commercial Suit No.175 of 2021 which is filed by the

Applicant for claiming interest on the said amount of

Rs.5,75,00,000/- (Rupees Five Crore and Seventy-Five

Lakh Only). All rights and contentions of parties herein in

the Suit are kept open. The parties can agitate the same in

accordance with law.

13 Accordingly, stand over to 5 th April 2022 at 10.30 am for

reporting compliance and / or passing further directions, if so required.

14 This order will be digitally signed by the Private

Secretary/Personal Assistant of this Court. All concerned will act on

production by fax or email of a digitally signed copy of this order.

                                         ( B. P. COLABAWALLA, J. )




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