nms3527.02 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO.3527 OF 2002 IN SUIT NO. 4007 OF 2002 ALONG WITH COURT RECEIVER’S REPORT NO. 267 OF 2009 IN SUIT NO. 4007 OF 2002 ALONG WITH COURT RECEIVER’S REPORT NO. 73 OF 2010 IN SUIT NO. 4007 OF 2002 Chaudhary Abdul Majid Shahadat & Ors. ...Plaintiff. Vs. Smt. Shenaz Abdulla Shahadat & Ors. ...Defendants. Ms. Manjiri Shah with Mr. Z.A. Jariwala and Ms. P. Mhatre i/by M/s. Thakore Jariwala & Associates for Plaintiff Nos. 1 and 2. Mr. Holambe along with Mr. G.P. Khan for Defendant Nos. 1(a) and 1(b). Mr. G.G. Ketkar, 1st Assistant to the Court Receiver, present. Mr. Virag Tulzapurkar, Sr. Counsel with Ms. Jasmin Sheth with Swapnil Khatri i/by M/s. Wadia Ghandy & Co. for Defendant No. 6. Ms. Punita Soni i/by M/s. Bilawala & Co. for Defendant Nos. 7,11 to 14,16, 17, 27, 28 and 31. Mr. Jayesh Bhatt for Defendant No.15. nms3527.02 2 Mr. K.K. Shroff along with Ms. Snehali Karkera i/by M/s. Dhruva & Co. for Defendant No.8. Mr. V.Y. Sanglikar for Defendant No.236 and Flat Purchasers of Flat Nos. G-42, 44,11,21 & 23. Mr. Nainesh Amin for Defendant Nos. 25 and 26. Mr. M.V. Hakrogi for Defendant Nos. 11 and 13. Ms. Deepa Kamath for the Flat Purchaser. 235. CORAM :- ANOOP V. MOHTA, J. DATED :- 5TH MAY, 2010. P.C.- 1 As the basic facts, parties and properties are common, interlinked and interconnected and therefore, for proper understanding of the matter, for clarity and to avoid repetition; the submissions and the arguments are made only in these two Motions and the Court Receiver’s Report, and therefore, this common order, though heard separately one after other. The facts of both suits are also dealt with separately. 2 (As Per Suit No. 1961 of 2003) The Plaintiff is one of the daughters of Chaudhary Shaukat Hasmullah (“Shaukat”) who died intestate on 5th March, 1995 leaving behind 11 heirs. Defendant Nos. 1 to 3 are the sons, Defendant No.4 is widow and Defendant Nos. 5 to 10 are 6 daughters. 3 The basic prayers in the suit, as well as, in the notice of motion are for administration of the estate of her father Shaukat and for setting aside nms3527.02 3 (a) relinquishment deed dated 1st July, 1995, signed/ executed by the Plaintiff for release of her share; (b) consent terms dated 15th April, 1998; (c) development agreement dated 22nd January, 2002 in favour of Defendant No.32; (d) power of Attorney dated 26th March, 1998 in favour of Defendant No.1. The Plaintiff along with other heirs of Shaukat executed a general power of attorney dated 26th March, 1998 in favour of Defendant No.1 to deal with the suit property. Clause 7 of the Power of Attorney empowers Defendant No.1 to sign the consent terms. Clause 21 entitles Defendant No.1 to deal with the property for and on behalf of the Plaintiff. Clause 25 empowers Defendant No.1 to sign, execute and deliver all contracts, conveyances and assignments and another documents for and on behalf of the Plaintiff. 4 The Plaintiff has claimed 6.73% interest in the estate of Defendant Nos. 1 to 3 who are entitled to 13.46% interest in the suit property. However, in the arguments, restricted as 2.97% of the suit property. 5 The sons of Shaukat (Defendant No.1-3), widow of Shaukat (Defendant No. 4) and other daughters of Shaukat (Defendant No. 5-11) have opposed the claims of the Plaintiffs and have affirmed the Deed of Relinquishment and the Power of Attorney granted in favour of Defendant No.1 herein. Defendant No.5 and 10 have subsequently filed a contrary nms3527.02 4 affidavit however, no independent proceedings challenging the relinquishment deed have been filed by Defendant No.5 or Defendant No. 10 or any other heir of Shaukat. 6 The Supplementary Deed of Partnership dated 23rd September, 1995 of Haji Shaukat & Co also records that the female members of Shaukat Branch i.e. Defendant No. 4 (widow), and Plaintiff No.1, Defendant No. 5-11 (daughters of Shaukat) have released their respective undivided shares in the estate of late Shaukat in favour of Defendant No. 1-3 (sons of Shaukat). The same release by all the female heirs of Shaukat is also recorded in the Deed of Partnership dated 11th July, 1995 of Shaukat Shahadat & Co.. 7 As submitted, in written notes also without prejudice that even in the event prayer (d) of the Plaint is granted i.e. the Consent Decrees are set aside and the three original suits being Suit No. 1350 of 1980, Suit No. 843 of 1985 and Suit No. 3170 of 1985 are restored, the following shall be the share of the Plaintiff; 8 M/s. Haji Shaukat & Co. shall have 1/6th or 16.66% share in the Suit Property to be divided between the then existing partners in their profit nms3527.02 5 sharing ratio of 20% each as follows - Shaukat Defendant No. 1 Defendant No. 2 Defendant No. 3 Defendant No. 23 Defendant No. 24 Shaukat shall as a partner shall be entitled to 16.66% of 1/6th in the Suit Property being 2.97% in the Suit Property. 9 M/s. Shaukat Shahadat & Co. shall have 1/3 share or 33.3% share in the Suit Property to be divided between the partners then in their profit sharing ratio as follows. Shaukat (25%) Chaudhary Shahadat Hasmullah (25%) Abdul Basalat (25%) Rahimtulla Rubali (12.5%) Defendant No. 23 (12.5%) Shaukat as a partner shall be entitled to 25% of 1/3 share in the Suit Property being 8.3% in the Suit Property. Therefore, Shaukat had in the nms3527.02 6 aggregate entitled to 2.7% + 8.3% in the Suit Property aggregating to approximately 11% in the Suit Property. 10 The Plaintiff in Suit No. 1961 of 2003, as an heir of Shaukat may be entitled to a certain share in this 11% which as per Muslim Law shall devolve as follows: Widow (1/8) = 1.38% = 1.38% Sons (7/52 each) = 2.14% each x 3 = 6.42% Daughter (7/104 each) = 0.45% each x 7 = 3.21% ------------------ = 11% Therefore, the Plaintiff as per her case will be entitled to 0.45% share in the Suit Property, in the event prayers as set out in the Plaint are granted. 11 An amount of Rs.2,05,72,318/- (Rupees Two crores five lakh seventy two thousand three hundred eighteen only) has been paid by Defendant No.32 to sons of Shaukat (Defendant No.1,2 and 3) towards their share of gross sale proceeds under the Development Agreement (which may include the share of Plaintiff relinquished to Defendant No.1, 2, 3). By and under order dated 12th August, 2003, in Notice of Motion No. 1922 of 2003 in Suit No. 1961 of 2003, Defendant Nos. 1 to 4 deposited the sum of Rs. nms3527.02 7 5,45,000/- (Rupees five lakhs forty five thousand only) towards their share of gross sale proceeds under the Development Agreement. Further, by and under order dated 3rd December, 2008 in Notice of Motion No. 2782 of 2006 in Suit No. 1961 of 2003 refused injunction against the Suit Property and directed status quo in respect of Flat of Defendant No.1 towards claim of the plaintiff. 12 The suit property is an immovable property admeasuring 1596.53 sq. meters situated at Chakala, Andheri (East) Mumbai, (Notice of Motion 3527 of 2002), in Suit No. 4007 of 2002, owned by - M/s. Haji Shaukat & Co. M/s. Shaukat Shahadat M/s. Premier Iron & Co. & Metal Industries (50% share) !-------------------------------------------------------------! ! ! ! ! Partners Partners 1 Choudhary Shaukat Hasmullah 1 Shaukat (“Shaukat”) 2 Choudhary Shahadat Hasmullah (“Shahadat”) 2 Chaudhary Mohd. Rafiq Shaukat 3 Abdul Basalat Rubali (D8) 3 Chaudhary Mohd. Zubair 4 Rahimtulla Rubali Shaukat Ali (D9) nms3527.02 8 4 Chaudhary Abdul Gani Shaukat 5 Sharif Hassan Rubali (D 10) (D 27) 5 Sharif Hassan Rubali (D 27) 6 Ahmed Rubali (D 28) 13 Disputes arose between the partners of M/s. Haji Shaukat & Co. and M/s. Shaukat Shahadat & Co. resulting in the following proceedings. (i) Suit No. 1350 of 1980 was filed by Shahadat against Shaukat and other partners for dissolution and accounts of Shaukat Shahadat & Co. and declaration that Deed of Retirement of Shahadat was not valid and binding on him. (ii) Suit No. 3170 of 1985 was filed by M/s. Shaukat Shahadat & Co. against Shahadat for declaration that the firm was the co-owner of the Suit Property and Shahadat had no individual right in the Suit Property. (iii) Suit No. 843 of 1985 was filed by Shahadat against Shaukat, Defendant No. 24-26 for declaration that Shahadat was entitled to 1/6th share in the Suit Property. 14 Shahadat intestate died on 15th March, 1994 and Shaukat died intestate on 5th March, 1995 leaving behind the following heirs: (a) Shahadat branch nms3527.02 9 -------------------------------------------------------------------- ! ! ! Widow Sons Daughters (P4) ! ! ! ! --------------------------- ------------------------------ ! ! ! ! ! ! ! ! P1 P2 P3 D1 D2 D3 D4 D5 ! ---------- ! ! D1(a) D1(b) Widow Daughter (Plaintiffs in Suit No. 1717 of 2009) (Separate from these two suits) (b) Shaukat branch -------------------------------------------------------------------- ! ! ! Widow Sons Daughters (D7) ! ! ! ! ----------------------- ----------------------------------------------------- ! ! ! ! ! ! ! ! ! ! D8 D9 D10 D11 D12 D13 D14 D15 D16 D17 (Plaintiffs in Suit No. 1961 of 2003) 15 The female members of Shaukat branch i.e. widow and 7 daughters had vide Deed of Relinquishment dated 1st July, 1995 relinquished all their nms3527.02 10 right, title and interest in the estate of Shaukat in favour of the sons of Shaukat i.e. D8, D9 and D10. 16 By recording above, the Consent Terms dated 15th April, 1998 filed in Suit No. 1350 of 1980, the aforesaid three suits came to be disposed off and the shares of each branch of Shaukat and Shahadat family came to be determined to the extent of 8.50% to the Shahadat branch and to extent of 41.50% to the Shaukat branch. (As per Suit No. 4007 of 2002) 17 Pursuant to the aforesaid Consent Terms, by and under a Development Agreement dated 22nd January, 2002 executed between Defendant No. 24-25 (Qureshis), Defendant No. 6,7, 8 (Shaukat heirs), Defendant No. 27 (Sheirf Hasan Rubali), Defendant No.1, Defendant No. 2-5, Plaintiff 1-4 (Shahadat heirs), Boman Irani, Percy Chowdhary, Saifuddin Patel ( as confirming parties) and Defendant No.6, all the aforesaid parties granted development rights in respect of the Suit Property in favour of Defendant No.6. Defendant No.1 executed the Development Agreement on behalf of Plaintiff Nos. 1 to 4 and Defendant Nos. 2 to 5 by and under Power of Attorney dated 25th April, 1995. 18 Under the Development Agreement the gross sale proceeds to nms3527.02 11 generate upon sale of the premises to be constructed in the new building on the suit land is bifurcated in the manner as set out under the Development Agreement executed between: i) Defendant No.6. ii) First Owners (Premier Iron & Metal Industries):- (Mohmd. Jamil Mohmd. Ismail Qureshi (Defendant No.24), Mohd. Aquil Mohmd. Ismail Qureshi (Defendant No.25), Mohmd. Kafil Mohmd. Ismail Qureshi (Defendant No.26), iii) Second Owners (Shaukat Branch):- Mohd. Rafique Shaukat Chaudhary, Mohd. Zubair Shaukat Chaudhary, Abdul Gani Shaukat Chaudhary, Sharif Hasan Rubakli, iv) Third Owners (Shahadat Branch):- Chaudhary Abdul Majid Shahadat (Plaintiff No.1), Mohd. Farooque Shahadat Chaudhary (Plaintiff No.2), Mrs. Gafurunnisa Shahadat Chaudhary (Plaintiff No.4), Abdulla Shahadat (Defendant No.1), Mrs. Kulsum Manzoor Khan (Defendant No. 2), Mrs. Saira Afzal Khan (Defendant No.3), Mrs. Shahida Saifullah Chaudhary (Defendant No.4), Mohd. Llyas Shahadat (Plaintiff No.3), Mrs. Shabira Ayub Khan (Defendant No.5) v) Boman Irani (First Confirming Party), Sharfuddin A. Patel (Second Confirming Party), Mr. Percy Choudhary (Third Confirming Party). nms3527.02 12 19 Defendant No.6 commenced construction and development on the suit property as far back as in January, 2002. In spite of being aware of the redevelopment undertaken by Defendant No.6 the suit came to be filed on December, 2002. 20 The plans sanctioned by the authorities envisaged construction of 8 residential buildings and 1 commercial complex. Till the date of filing of the present suit, Defendant No. 6 has completed construction of 5 buildings (Wing A to E) and building G and H were under construction. The Commercial Complex and one Residential Building i.e. Wing F are not yet completed. 21 By and under and order dated 6th May, 2004 passed by the Court disposed of Notice of Motion No. 3527 of 2002 along with Notice of Motion No. 1922 of 2003 in Suit No. 1961 of 2003, where the Court permitted Defendant No. 6 to continue construction of G and H Buildings. The Court restrained Defendant No.6 from creating third party rights in respect of the unsold flats of Buildings G and H. 22 The aforesaid order was carried in appeal by Defendant No.6 being Appeal No. 558 of 2004 in Notice of Motion No. 3527 of 2002 in Suit No. nms3527.02 13 4007 of 2002,l whereby the Division Bench of this Hon’ble Court by its order dated 21st October, 2004 directed the Court Receiver to act as Court Commissioner and report to the Court about the status of the suit property. The Court permitted Defendant No. 6 to complete construction of G and H buildings but restrained creation of third party rights in respect thereof. 23 In the meantime following settlement took place in Suit No. 4007 of 2002:- Date Agreement Consideration 20th April, 2007 Registered Conveyance between Defendant No. 235 and Plaintiff No.1 Rs.4,00,00,000/- (Rupees Four Crores Only) 1st August, 2007 Registered Conveyance between Defendant No. 235 and Plaintiff No.2 Rs.1,10,00,000/- (Rupees One Crore Ten Lakhs Only) 28th September, 2007 However, in the meanwhile, Plaintiff No.4 (Widow) expired 7th November, 2008 Consent Terms with Plaintiff No.3 and Defendant No.6 (includes share derived from Shahadat and his mother, Plaintiff No.4) taken on record by the Hon’ble Court on 17th January, 2009 Rs.2,00,00,000/- (Rupees Two Crores only) + Flat admeasuring 975 sq.ft. 28th December, 2007 Registered Conveyance between Defendant Nos. 2-5 in favour of Defendant No.235 (includes share derived from Shahadat and their mother, Plaintiff No.4) Rs.35,00,000/- (Rupees Thirty Five Lakhs) each. nms3527.02 14 24 In view of death of Plaintiff No.4, in Suit No. 4007 of 2002, her share in the Suit Property devolved as follows:- 1.06% (As per shares in Consent Terms) 2.08% (As claimed by the Plaintiffs) As per Muslim Law of Inheritance, the estate of widow will devolve upon the sons and daughters in the ratio of 2:1 as follows: (As per shares in Consent Terms) (As claimed by the Plaintiffs) 3 sons 0.21% each 0.41% 4 daughters 0.10% each 0.20% Since one of the son (i.e. Defendant No.1) pre-deceased his mother (Plaintiff No.4), he will not get any share in his mother’s estate as per Muslim Law. 25 As explained above, by the contesting party, only rights of Plaintiff No.1 and Plaintiff No.2 accruing to them through Plaintiff No.4 (Widow) is outstanding. Share of Plaintiff No.1 and Plaintiff No.2 shall be 0.41% each and therefore aggregating to 0.82%. Therefore, there is force in the contention raised that, the present suit only survives to the extent of 0.82% share accruing to Plaintiff No.1 and Plaintiff No.2 through their mother. nms3527.02 15 26 Appeal No. 558 of 2004 and Appeal No. 572 of 2004, filed by Defendant No.6 came up for final hearing before the Division Bench of this Hon’ble Court. The Division Bench vide its order dated 17th January, 2009, in view of the “subsequent developments” in the form of settlement between the parties which were significant and was pleased to set aside the interim order dated 6th May, 2004 and remitted the Notice of Motion No. 3527 of 2004 in Suit No. 4007 of 2002 and Notice of Motion No. 1922 of 2003 in Suit No. 1961 of 2003 for fresh consideration. The interim order of Court Receiver was continued till the disposal of the Notice of Motion as a protection measure. Defendant No. 6 was permitted to grant possession to the 40 flat purchasers in Wing G and H on satisfying the Receiver that they have bona fide agreements to sell the flats, substantial consideration has been paid and that MCGM has granted occupation certificates for the same flats. 27 All the Flats in Wing A, B, C, D and E are sold to flat purchasers and the possession of the flats are handed over to such flat purchasers. Wing A,B, C, D and E are residential buildings, Wing G & H are also residential buildings and the construction thereof is completed and the occupation certificate is also given. Wing G and H totally comprises of 56 flats, out of which 40 flats are sold and letter of allotment were issued accordingly by Defendant No.6 to various flat purchasers and Defendant No. 6 has nms3527.02 16 received substantial consideration thereof. However, possession to the flat purchasers of these 40 flats as not yet permitted by the Court Receiver in spite Defendant No.6 having satisfied the Court Receiver in respect of the requirements as stated above of the Hon’ble Court vide its order dated 17th January, 2009, the Court Receiver submitted its Report No. 267 of 2009, dated 8th September, 2009 to the Court for directions. Wing F is a residential building, the construction whereof is yet to commence and one more commercial building thereof is proposed to be constructed. In addition to the buildings to be constructed on the suit land, there are uncompleted amenities and infrastructure also. 28 Defendant No.1 is entitled to sale proceeds as consideration under the Development Agreement. Till date Defendant No.6 has paid an aggregate sum of Rs.67,79,763/- (Rupees Sixty Seven Lakhs Seventy Nine Thousand Seven Sixty Three only) towards consideration to the Shahadat branch. Out of the aforesaid sum, a sum of Rs.15,59,421/- (Rupees Fifteen Lakhs Fifty Nine Thousand Four Hundred and Twenty One only) was paid by Defendant No. 6 to Defendant No.1 which has been deposited by him in this Court and a further sum of Rs.52,20,342/- (Rupees Fifty Two Lakhs Twenty Thousand Three Hundred and Forty Two only) has been deposited by Defendant No. 6 in this Court on behalf of Shahadat branch. nms3527.02 17 29 On 9th April, 2010, as there was no report submitted by the Court Receiver pursuance to the order passed by the Division Bench, this Court has directed as follows:- “1 In view of the order passed by the Division Bench in the matter, specifically in paragraph No. (2) (ii)(a) read with Paragraph No.5 of the Court Receiver's report dated 12th September, 2009, it is desirable that the Court Receiver to give detailed report, within 10 days, from today. 2 The liberty is granted to the parties to appear before the Court Receiver, on 12.04.2010 at 3.00 p.m. 3 The matter be placed on board with additional report of the Court Receiver, on 22nd April, 2010, as the additional report is necessary for passing the final order in Notice of Motions.” 30 The Court Receiver accordingly submitted the Additional Report No. 73 of 2010, dated 20th April, 2010, and prayed that:- “(a) As B.M.C. Has issued Occupation Certificate in respect of “G” and “H” wings of the building and the 19 Flat Purchasers have paid full consideration to the Defendant No.6 as per list being Exhibit “C”, the Court Receiver may be permitted to put the said Flat Purchasers in possession of their respective flats as agent of the Court Receiver upon executing the necessary Agency Agreement and undertaking, without royalty and security as per order dated 17th January, 2009.” 31 It is relevant to note the following order of the Division Bench in Notice of Motion No. 2708 of 2004 in Appeal No. 558 of 2004 in Notice of Motion No. 3527 of 2002 in Suit No. 4007 of 2002 dated 21/10/2004:- nms3527.02 18 “Heard. 2 The notice of motion is returnable on 14th December, 2004. 3 The learned motion Judge observed that construction has proceeded considerably and it would not be proper now to stop the construction activity. He also observed that two buildings consisting of five wings are complete and flats therein have been sold. The work now remains is in respect of G and H wings and the commercial complex and in G and H wings also it is said that some agreements have been entered into. 4 Taking overall facts and circumstances into consideration and the aforesaid observations made by the learned motion Judge, we are satisfied that the operation of the impugned order deserves to be stayed and the following ad-interim order shall remain operative until further orders:- (i) The Court Receiver is appointed to act as Court Commissioner for reporting to this Court the present status of the property in dispute. If necessary, the Court Commissioner may take the assistance and services of the structural Engineer and Architect to assist him. The report shall be submitted by the Court Commissioner as early as possible and in no case later than four weeks from the date of deposit of tentative expenses by the appellant. (ii) The appellant (defendant No.6) is permitted to complete the construction of G and H wings as per the sanctioned plans only without any alteration or modification. However, the appellant shall not create any third party right or interest henceforth in the G and H wings. nms3527.02 19 (iii) The appellant (defendant No.6) is restrained from proceeding with any further construction in respect of the commercial complex. (iv) The appellant (defendant No.6) shall furnish to the Court Commissioner the true and correct copy of the sanctioned plants, copies of agreements, if any, so far entered into in respect of flats in G and H wings, the copies of other necessary documents necessary for completion of G and H wings and all other documents that may be required by the Court Commissioner. (v) Liberty to the appellant (defendant No.6) to apply the court for appropriate direction after the completion of construction of G and H wings. (vi) The appellant (defendant No.6) is directed to deposit a sum of Rs.25,000/- with the Court Receiver towards tentative expenses within ten days from today.” 32 It is necessary to note first of all in above back-ground basic prayers in these two suits which are as under:- As per Suit No. 1961 of 2003- “a) that this Hon’ble Court be pleased to declare that purported Power of Attorney dated 26th March, 1998 (Exhibit “C” hereto) and purported writing dated 1st July, 1995 (Exhibit “D” hereto) are illegal, null and void. b) that Defendant Nos. 1 to 3 and 23 or any of them or any other Defendant who may be in the possession of nms3527.02 20 the alleged Power of Attorney dated 26th March, 1998 Exhibit “C” hereto and the writing dated 1st July, 1995 Exhibit “D” hereto be ordered by this Hon’ble Court to deliver up the same to this Hon’ble Court for cancellation and the same be ordered and decreed to be cancelled by this Hon’ble Court; c) in the alternative it be declared that the said purported writing (Exhibit “D”) hereto has not been acted upon and was never intended to be acted upon. d) that this Hon’ble Court be pleased to set aside the consent decree passed on 15th April, 1998 in Suit No. 1350 of 1980, 843 of 1985 and 3170 of 1985 and restore the said suits to file. e) This Hon’ble Court be pleased to declare that Agreement dated 22nd January, 2002 purporting to be entered into between 1st Defendants and other Defendants being Exhibit “E” hereto is a sham and bogus document and the same be delivered up and cancelled. g) That it be declared that Plaintiff has 6.73 share or such other percentage share as may be found in the entire estate of late Shaukat Hasmulla including property at Chakala and the same be delivered up to her by partitioning the same by metres and bounds and for that purpose the