1 W.P. No.5928-09 mmj IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.5928 OF 2009 Maharashtra Industrial Development Corporation ..Petitioner Vs. Union Bank of India & Ors. ..Respondents WITH WRIT PETITION NO.2781 OF 2009 WITH CIVIL APPLICATION NO.1327 OF 2009 IN WRIT PETITION NO.2781 OF 2009 M/s. Kalindi Properties Private Ltd. ..Petitioner Vs. Maharashtra Industrial Development Corporation & Ors. ..Respondents Ms Deepa Chavan, Shri Rajmani Varma, Shri Darshna Gupata and Ms Rajanie Bhoare i/b Navdeep Vora & Associates or the Petitioners Shri S. Shetye a/w Shri Raut i/b M/s. Consulta Juris for Respondent No.1 Shri P. Majumdar a/w Ms Gupte i/b M/s. M.P.Savla & Co. for Respondent No.5 Smt Manjusha Badhe i/b M/s. Suresh Kumar for Respondent No.4 Smt Deepa Ahuja for Petitioner in Writ Petition No.2781 of 2009 Coram: P.B.MAJMUDAR & R.M.SAVANT, JJ Date: 16th August 2010 P.C. 1. The above Writ Petitions have arisen out of an order passed by the Debt Recovery Appellate Tribunal, Bombay (DRAT) in the proceedings initiated by the Respondent No.1 Bank, which have had a protracted course since the year 2008 or thereabouts. The defaulting party in so far as the Bank is concerned, was one M/s. Benelon Industries who is the Respondent No.2 to the above Petition. 2 W.P. No.5928-09 The Plot in question which was held by the Respondent No.2 on lease basis from the MIDC has been a subject matter of auction pursuant to the decree in favour of the Respondent No.1 bank. The Respondent No.5 M/s. Kalindi Properties Private Limited is the successful bidder who bid Rs.14.51 crores for the said plot and the sale has been confirmed on 2-2-2009 in its favour. Accordingly, the Respondent No.5 has deposited the said amount of Rs.14.51 croes in the Debt Recovery Tribunal and the parties to the proceedings namely the Respondent No.1 Bank the MIDC and the Income Tax Department were asked to submit their claims. Each of the parties, accordingly submitted their claims to the Debt Recovery Tribunal, pursuant to which the said amount of Rs.14.51 crores was disbursed amongst the three parties in the following manner. (a) release Rs.6,35,69,906/- to the Applicant Bank towards expenses and amount as per the Decree with interest up to 28.01.2009. (b) release Rs.1,05,36,663/- towards statutory dues and claims of the MIDC filed at Exhibit 110; (c) release Rs.7,50,00,000/- to the Income Tax Department as an adhoc payment in respect of the claim against the Defendant Company out of the total claim filed by them of Rs.8,02,22,873/- as on 28.02.2009. 3 W.P. No.5928-09 It is an admitted position that today an amount of Rs.27,26,156/- is lying deposited with the Debt Recovery Tribunal. The Petitioner above named MIDC has impugned the order dated 5-2-2009 by which order, the DRAT has directed the utilisation of the sale proceeds towards the satisfaction of the claims of the parties. It is also required to be noted that the petitioner at an interim stage had approached the Apex Court by way of the SLP (Civil ) No.18184 of 2009. The Apex Court has relegated the parties to this Court and kept the question of law open. This is in so far as the above Writ Petition No.5928 of 2009 filed by MIDC is concerned. 2. In so far as Writ Petition No.2781 of 2009 is concerned, the Respondent No.5 M/s. Kalindi Properties Private Ltd. who is the Petitioner has impugned the same order dated 5-2-2009 only to the extent that the Appellate Tribunal refused to direct that the possession of the plot in question pursuant to the auction be granted to the Respondent No.5. Since the issue is common the said Writ Petition is also taken up for hearing with the consent of the parties. 3. It is required to be noted that we have adjourned these matters from time to time to allow the parties to explore the possibilities to arrive at a full and final settlement so that the proceedings before the DRAT as also in this Court would be rendered a quietus. However, the principle area of disagreement appears to be the claim of the MIDC for subletting charges which according to 4 W.P. No.5928-09 the MIDC is to the tune of Rs. 2,10,00,000/- as on 31-3-2010. In so far as such subletting charges are concerned, it is undisputed that the said charges do not find a place in the regulations, but according to the Learned Counsel appearing for the MIDC, have been provided for by way of resolutions passed by the Board of Directors of the MIDC from time to time, how an auction purchaser can be made liable for payment of the said charges begs the question. If, the said subletting charges which are on account of the plot in question, now being occupied by the Respondent No.6, were payable, the MIDC should have made it known at the time of the plot being auctioned or at least thereafter when it put its claim before the Debt Recovery Tribunal, as well as before the disbursal of the amount paid by the auction purchaser. 4. Be that as it may, in our view, since the MIDC has challenged the order of the DRAT ordering the amount which has been paid by the auction purchaser to be disbursed amongst the parties and since the Appeal is pending before the DRAT, in our view we need not go into the said question as ultimately the rights of the parties including to the amounts which have been disbursed to them by Debt Recovery Tribunal would ultimately hinge upon the outcome of the Appeal filed by the MIDC. However, it is necessary for us to observe that the MIDC is a statutory body established under the local Act known as MID Act 1961. The MIDC is vested with all the powers to take action against any encroachment / subletting or any user of the plot contrary to the agreement, why 5 W.P. No.5928-09 the Respondent No.6 was allowed to encroach upon or occupy the said plot in question, on account of which the subletting charges have arisen can only be answered by the officials of the MIDC. We are informed that a substantial portion of the said subletting charges are on account of interest which is accruing day to day. We are, therefore, of the view that at least from the date of the auction notice which is issued some time in 2008, the MIDC would not be entitled to the subletting charges from the Respondent No.1 Bank and the Respondent No.5 Kalindi Properties as the MIDC at least by that time was fully aware of the encroachment / occupation of the plot in question. However, for the interior period the rights of the MIDC to claim subletting charges, as also whose liability it is, would be adjudicated by the DRAT in the pending Appeal. 5. In so far as the Respondent No.5 is concerned, indubitably the Respondent No.5 has deposited the amount of Rs.14.51 croers. It is the case of the MIDC that if the Respondent No.5 deposits the amount of differential premium, the necessary documents which may include the Lease Deed can be executed in its favour, though the MIDC claims that the subletting charges also have to be paid. Since in respect of the subletting charges, we have left the parties to the final decision of the DRAT. In our view, in so far as the Respondent No.5 is concerned, the interest of justice would be served, if the Respondent No. 5 is directed to deposit an amount of Rs.1,71,81,300/- which amount includes the differential premium that the Respondent No.5 is liable to pay to the MIDC 6 W.P. No.5928-09 and which the Respondent No.5 is agreeable to deposit in the DRAT within a period of two weeks from date. The Respondent No.5 to also deposit other incidental charges of Rs.52,000/- as mentioned in the written submissions of the MIDC dated 29-4-2010. The said amount of Rs. 52,000/- also to be deposited in the DRAT within the time stipulated above. In the event the said amounts are deposited and a receipt to that effect is produced by the Respondent No.5 and furnished to the MIDC, the MIDC would issue sanction letter evidencing the allotment in favour of the Respondent No.5 and that it has no objection to the Respondent No.5 being made a lessee. It is made clear that the issuance of sanction letter as well as any consent letter or any other document would be subject to the final decision of the DRAT in the pending Appeal of the MIDC. This direction is also subject to any order that may be passed by any Court restraining the MIDC from executing the aforesaid documents. Since we are relegating the parties to the DRAT so that the pending Appeal can be heard and disposed of within a particular time frame the Learned counsel for the parties are agreeable that no reasons may be cited for disposing of this Petitions save and except the directions as mentioned above. 6. The DRAT is directed to hear the Appeal No.25 of 2009 expeditiously and within a period of three months from date. It is made clear that we have not expressed any opinion on the merits of the respective contentions of the parties, save and except to the extent of the observations made herein above, 7 W.P. No.5928-09 which we feel were necessary in the light of the directions that we proposed to pass in the above Petitions. It is made clear that the disbursement of the amounts which are presently retained by the respective parties as also the amounts that would be deposited by the Respondent No.5 pursuant to the instant order, would all be subject to the final decision in Appeal No.25 of 2009. In the event, the MIDC fails in the Appeal, it would have the option of withdrawing the amounts deposited by the Respondent No.5, pursuant to the directions as contained in the instant order. On the said amounts being deposited by the Respondent No.5, the DRAT is directed to deposit the same with a Nationalised Bank for a temporary period as it deems fit in the facts and circumstances of the case. Needless to state that the DRAT would decide the Appeal on its own merits and in accordance with law. With the aforesaid directions, we dispose of both the Petitions. 7. In view of the disposal of the Writ Petition No.2781 of 2009, the Civil Application No.1327 of 2009 does not survive and is accordingly disposed of. The parties to appear before the DRAT Mumbai on 6th September 2010 at 11.00 a.m. (R.M.SAVANT, J.) (P.B.MAJMUDAR,J.)