1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO.2952 OF 2009 IN SUIT NO.2085 OF 2009 Anandi P. Shetty ..Plaintiff Versus Laxmi Jayaram Shetty & Ors. ..Defendants Mr.Virag Tulzapurkar, Senior Advocate with M.S.Doctor and Shailesh Poria i/b. Hariani & Co. for plaintiff Mr.Sharan Jagtiani i/b.Sonal Doshi & Co. for defendant Nos. 9 to 13 Mr.S.S.Gawde for defendant Nos. 5 to 7. CORAM : S.C.DHARMADHIKARI, J. DATE : November 23, 2009. P.C.: 1] Heard the learned Counsel for parties. 2] On 18th August 2009, an ad-interim order was made on the notice of motion and, thereafter, it was listed for hearing and final disposal. The plaintiff, defendant Nos. 5 to 7 and 9 to 13 are all heirs and legal representatives of one Shama Babu Shetty and his wife Gulabi Shama Shetty. The said Shama and Gulabi also had another son Jairam, who has 2 expired and defendant Nos. 1 to 4 are his legal heirs and representatives. Defendant Nos. 5 to 7 are the heirs and legal representativves of another deceased brother of plaintiff viz., Bhaskar. Thus, the plaintiffs, defendant Nos. 8 to 13 are sons and daughters of the late Shama and Gulabi. Shama and Gulabi had two sons, Jairam and Bhaskar. The other defendants are their heirs and legal representatives. 3] It is common ground that this is a suit for partition of the properties which devolve on the heirs of Shama and Gulabi. Although, with regard to other properties, there is a dispute, ultimately, both sides agree that the ad-interim order granted on 18th August 2009 can continue insofar as these properties. 4] The only disputed property is one Restaurant premises called Ramashray Hindu Vishranti Griha (for short Restaurant) being conducted by defendant Nos. 1 to 4. 5] It is stated that this property along with others belong to the estate and more particularly, deceased Shama. He died intestate on 13th December 1983 leaving behind his wife Gulabi, plaintiffs and other 3 children. It is also common ground that the son of the deceased Bhaskar expired on 28th December 1986 and Jairam, husband of defendant No.1 and father of defendant Nos. 2 to 4 expired on 5th December 2000. 6] It is stated that the properties were being managed by the wife/ mother Gulabi for and on behalf of the heirs and legal representatives of the deceased Shama. However, after her death and even after the death of Jairam, for some time the plaintiffs did not demand their share in the properties of the deceased. In paras 2.1 to 2.6 of the plaint, these facts are narrated. 7] It is, thereafter, stated in para 2.7 that the plaintiff was shocked and surprised to learnt from defendant No.10 that defendant No.1 had filed a police complaint inter alia against defendant Nos. 8 to 10 complaining that they were seeking to take forcible possession of the restaurant. It is also stated that this complaint is a false one and refers to a suit filed by defendant No.1 in the City Civil Court. The plaintiff is not aware of the same. Plaint further states that the plaintiff came to know from reliable sources as to how defendant No.1 wrongfully and illegally got the rent receipts of the restaurant premises transferred to her name without 4 obtaining any consent from the heirs and legal representatives of the late Shama and Gulabi. The correspondence commenced from November 2006 and the fact that the rent receipt is of the tenanted premises, from where the restaurant business is conducted, was transferred by the landlady in favour of first defendant, has been stated in a letter dated 7th March 2007. Thereafter, there is series of correspondence with even Statutory Authorities with regard to the licence in respect of the said restaurant business and ultimately, setting out the details of all the properties, it is stated that save and except the property mentioned in para 3.4 all other properties were of the sole and absolute ownership of Shama. There is also a suit pending in the Court at Mangalore being O.S.Suit No. 249 of 2007. It is stated that on the death of the deceased Shama, the properties mentioned in paras 3.1 to 3.3 devolved on his wife, Gulabi sons, Bhaskar and Jairam, defendant No.8 and daughters plaintiff and defendant Nos. 9 to 13 each getting 1/10th share. Thus, each of them are the co-owners of the properties. The share having been denied by the defendant Nos. 1 to 4, the instant suit has been filed. 8] When this notice of motion was argued, on the last occasion and even today, the plaintiff and the supporting defendants prayed that the 5 Court Receiver, High Court be appointed as receiver of the properties from where the restaurant business is conducted. According to the plaintiff, these are valuable premises. Even the business of the restaurant is a flourishing business. Mr.Tulzapurkar, learned Senior Counsel while pressing for appointment of Court Receiver contended that the business generates lot of cash income. Although, the income tax returns and extracts thereof are filed on affidavits by defendant Nos. 1 to 4, they do not correctly reflect and disclose the income from this restaurant business. Once, the income is consisting of cash collection and the premises themselves being valuable so also the landlady confirming transfer of tenancy in favour of the first defendant, then, according to Mr.Tulzapurkar, it is just and convenient that the Court Receiver is appointed receiver. According to Mr.Tulzapurkar considering the reliefs claimed in the suit, this order is necessary so as to preserve and protect the subject matter of this litigation. 9] On the other hand, Mr.Damle, learned Counsel appearing for contesting defendant Nos. 1 to 4 invited my attention to the affidavit filed in reply to this notice of motion and contended that the first defendant has been running this business, after the death of her husband with the 6 assistance of her children from the year 2001. The deceased Jairam expired in tragic circumstances in December 2000. This is the only source of income for the family of Jairam. If the Receiver is appointed the business will suffer a set back and ultimately none would be benefited. When there is a suit filed by defendant Nos. 1 to 4 in the Court of competent jurisdiction in the State of Karnataka, where most of the properties are situated and located, then, this is nothing but a counter blast to the said litigation. Further, according to Mr.Damle the essential declaration that the plaintiff and the defendants supporting are her tenants have to be granted by a court of competent jurisdiction i.e. The Court of Small Causes. They are claiming to be entitled to the premises and the business as tenants jointly along with the deceased Gulabi. Such a declaration cannot be granted by this Court until and unless this declaration is granted by the court of competent jurisdiction, this Court should not pass a drastic order of appointing Court Receiver. 10] It is stated that the restaurant premises at Annexure G to the plaint consists of Shop Nos. 6, 7, 8 and 12. One Shashikala Gandhi is the owner and Shama Shetty i.e. Father of the deceased was tenant. After the death of Shama in 1983, his wife became tenant. She expired on 11th July 7 1998. Before the death of Gulabi, tenancy in respect of the said shops were transferred in her name and deceased Gulabi was the exclusive tenant. Thereafter, all legal heirs of Gulabi executed separate declaration way back in April 1995 accepting their mother as tenant and giving an liberty to her to assign and/or dispose of the said property. Copies of such declarations are annexed. Thereafter, a deed of assignment of business with goodwill and tenancy rights was executed by Gulabi in favour of Jairam (husband of defendant No.1) in June 1995. On the basis of this document, the landlady transferred the tenancy rights in respect of the premises in favour of Jairam. After the death of Jairam, present defendant Nos. 1 to 4 being the only persons entitled to tenancy rights in respect of premises, applied to the landlady and the rent receipts and other rights are transferred in the name of first defendant in March 2001. From March 2001 defendant No.1 has acquired tenancy rights in respect of the restaurant premises and since then, is conducting business of restaurant. 11] Mr.Damle submits that in the year 2009 all these disputes are raised only because plaintiff and other defendants supporting her have noticed that the restaurant business is doing well. They have noticed that the 8 defendant Nos. 1 to 4 with their efforts are continuing the business in the same fashion in which it was conducted during the life time of the mother and father of the plaintiff and defendant Nos. 5 to 7 and 8 to 13. In these circumstances, according to Mr.Damle, no order appointing Court Receiver be passed or else the business would be adversely affected. The income tax returns that are filed on record do not show that the business generates cash income as is complained by the plaintiff. Barring their oral arguments, they have not produced anything to show that the returns filed are not genuine and trustworthy. For all these reasons, Mr.Damle submits that the relief should be denied, more particularly considering the disclosure of the income. 12] Mr.Tulzapurkar, learned Senior Counsel in rejoinder has pointed out that a perusal of the income tax returns Annexure C to the affidavit in reply filed in September 2009 by defendant Nos. 1 to 4 would disclose that the Chartered Accountant and Auditors have not been able to get any explanation from the books including Sales Register, purchase register and other Expenses Register, cash Books etc. of the payments stated to have been made to Laxmi Shetty towards royalty charges of Rs.7.20 lakhs. If the state of affairs are the one now placed on record, then, such 9 payment as being made from time to time, without any complete and proper disclosure shows that the real income is being suppressed from the Court. For all these reasons, this is a fit case where the Court Receiver should be appointed. 13] Learned Counsel appearing for defendant Nos. 5 to 7 supporting Mr.Damle states that these defendants are supporting the arguments of defendant Nos. 1 to 4. Mr.Jagtiani appearing for defendant Nos. 9 to 13 urges that these defendants fully support the submissions of Mr.Tulzapurkar, learned Senior Counsel appearing for plaintiffs and even they are seeking appointment of Court Receiver to protect their 1/10th share. 14] As far as the issue of maintainability of suit is concerned, admittedly, the O.S.Suit No.249 of 2007 is pending in the Court of Civil Judge, Senior Division Mangalore. However, it is common ground and even from the affidavits filed by defendant Nos. 5 to 7, it is apparent that some of the properties are situated within the jurisdiction of this Court. Therefore, it is not as if this Court can render any final conclusion on the issue of maintainability. That apart, the rejoinder affidavit of the plaintiff 10 clarifies that the suit in Mangalore is filed only for partition of properties mentioned in Schedule to that suit i.e. Land situate at Badaga Yekkar in Karnataka. This property has been excluded from this suit as it was partitioned in 1975 during the life time of Shama. It is with regard to this that the suit is pending. Therefore, this property is out of the purview of the present suit. However, it is seriously urged by the plaintiff that defendant Nos. 1 to 4 conveniently/ mischivously did not include the other properties forming part of the property of Shama in the suit at Mangalore Court. Therefore, all the more I cannot come to a conclusion that the instant suit is not maintainable. 15] The plaintiffs have raised serious issue with regard to the declarations stated to have been executed in favour of the mother Gulabi. It is stated that the originals of these declarations were not given during the course of inspection. Further, these declarations are not even notarised much less being identified by any Advocate. It is stated that the plaintiff and defendant No.8 has not signed the declaration. Admittedly, they are heirs of Shama and Gulabi. Therefore, declaration of other defendants is not binding on plaintiff and defendant No.8 to say the least. Further, the mother was running the restaurant for the benefit of the heirs 11 and during her lifetime there was no difficulty. However, after the death of the mother, the deceased Jairam was managing the business. He could not have claimed any valid assignment of the rights of Gulabi and more particularly that of the plaintiff and defendant No.8 in his favour. Therefore, reserving rights to claim declaration of tenancy in their favour in respect of the restaurant premises, plaintiffs have disputed the execution of the documents placed on record by defendant Nos. 1 to 4. 16] Merely on the strength of the licence issued in favour of defendant No.1, it is urged that she cannot deny the rights of the other heirs and legal representatives. As far as the disclosure of income and income tax returns, in para 18 of the rejoinder, the plaintiff states that if it is the case of the defendants that tenancy and licence are in the name of defendant No.1, then, defendant No.2 could not have filed income tax returns and shown the income from the restaurant business of a firm, as the personal income of defendant No.2. In other words, the capacity in which defendant No.2 is filing the returns is not clear at all. With regard to the payment of Rs.7.20 lakhs, it is stated that the hotel business has cash business and income declared is most negligent compared to the actual income generated. In these circumstances, they have disputed 12 genuineness and correctness of the documents placed on record by defendant Nos. 1 to 4. They have also challenged the correctness of the entries and figures mentioned therein. 17] I have heard this matter on more than one occasion. The reason for adjourning it was to enable parties to sit together and find a solution to the family disputes and problems. However, despite best efforts made by the Counsel, the matter could not be settled. 18] Today, during the course of arguments, Mr.Damle appearing for defendant Nos. 1 to 4 made a statement on instructions that the defendant Nos. 1 to 4 are ready and willing to secure and protect the share and interest of plaintiff. They would deposit in this Court a monthly sum. They are ready and willing to have the sum enhanced to a figure of Rs.15 to 20,000 per month. However, beyond this figure they will not be able to offer anything more to the plaintiff at this stage. They are also not ready and willing to secure shares of defendants. More so, on account of the declarations in favour of Gulabi and considering that these parties have not filed any proceedings. The figure is not acceptable to the plaintiff. Therefore, it is stated by Mr.Damle that settlement is possible, 13 and without prejudice to the rights and contentions of defendant Nos. 1 to 4, the deposit of the aforementioned amount can be made. The reasons for the dispute is also because of the tragic circumstances in which the deceased Jairam expired in the year 2000. 19] After having perused the entire record with the assistance of the learned Counsel and more particularly the documents placed by defendant Nos. 1 to 4, I am of the opinion that insofar as properties which are listed in the schedule annexed to the plaint and mentioned as Annexures H, I and M, the ad-interim order dated 18th August 2009 can be confirmed and that shall continue till the hearing and final disposal of the suit, of course without prejudice to the rights and contentions of parties. 20] As far as the properties which are mentioned in Annexure M it is stated by defendant Nos. 1 to 4 that they are in possession of two flats at Matunga at Items 3 and 4 of this Annexure. They are ready and agreeable to maintain status quo in respect of these flats till the disposal of this suit. 14 21] The bone of contention and real dispute is with regard to restaurant premises. It is stated by defendant Nos. 1 to 4 that they are running the restaurant business since 2001 on the basis of the licence issued in their favour and the rent receipts. Their possession should not be disturbed. They are ready and willing to maintain present status quo even with regard to the business and these premises. They would not transfer, alienate, encumber or part with possession of these premises and that is enough protection, according to defendant Nos. 1 to 4. 22] To my mind, the tenanted premises themselves is not only the matter of dispute. These are shop premises from which the restaurant is being conducted. The restaurant business is stated to be located in a prime locality viz., Matunga, Mumbai. It is not the case of defendant Nos. 1 to 4, either that this restaurant is not doing well. On the basis of the materials produced I find much substance in the contentions of Mr.Tulzapurkar that true, complete and faithful disclosure of the income from this business is not made. If the affidavit filed by defendant Nos. 1 to 4 together with annexures on record is carefully perused, there is further substance in the complaint of the plaintiff that the returns are stated to be filed by defendant No.2 whereas it is the defendant No.1 who 15 claims to have inherited the business and tenancy rights. Further, there is an amount paid to her by other defendants stated to be royalty charges. However, from the date the business is being managed till date, there is no proper disclosure with regard to the income, profits/ loss, payment and receipts including statutory charges. When the landlady confirms on 7th March 2007 that she has transferred the rent receipts in favour of defendant No.1 and when there is serious dispute as to who is to be the tenant in respect of these premises after the death of the deceased, Shama, Gulabi and Jairam, then, pending determination and final adjudication of these rights, it is just and convenient that the Court Receiver is appointed as Receiver of these premises. It is not just the protection of the tenancy rights but the business that is being conducted therefrom. The business is that of a restaurant and more particularly Udipi restaurant in an area like Matunga, Mumbai. The premises as well as the business is valuable. The properties which are enlisted in the other schedule and some of them, including two flats at Matunga, are already in possession of defendant Nos. 1 to 4. Even the restaurant business is in their possession so also the premises. Once the suit is filed for partition and the law being clear that all parties who are arrayed as plaintiff and defendants have a right to claim their share and partition by metes and bounds, upon ascertainment 16 and determination thereof by the Court, then, it is just and convenient that the Court Receiver, High Court, Bombay is appointed as Receiver of the restaurant business at Matunga, Mumbai. That would enable the court to finally adjudicate the rights between the parties and to pass a complete and effective decree. Once the Court Receiver takes charge of the business and the records and documents, including vouchers, receipts, books are placed in his custody, then a disclosure of the entire state of affairs with regard to this business would be possible. There are serious allegations made by the plaintiffs against defendant Nos. 1 to 4. Further, the defendant Nos. 1 to 4 are relying upon certain deeds executed in the year 1995 in favour of the deceased Gulabi and on the strength thereof, asserting their right to manage business to the exclusion of others but these documents themselves being in dispute, then, all the more the Court Receiver should step in. The Court Receiver can take custody of all the documents and papers relating to this business, including the bank/ account books and income tax files and after making due scrutiny and verification thereof, place a complete report before the Court. That would enable the court to make a partition of this business and the property and the rights of the parties therein at the final stage. 17 23] In these circumstances, while confirming ad-interim order dated 18th August 2009 as directed above, additionally, the notice of motion is made absolute in terms of prayer clause (a-i) to the extent of the property described in Annexure G to the plaint. The Court Receiver shall take into custody all books of accounts, bills, vouchers, files pertaining to the business more particularly described in Annexure G as Ramashray Hindu Vishranti Griha. The Court Receiver to then submit a report to this Court and the same shall be done within a period of four weeks from the date he takes into custody the above documents. The Court will then issue appropriate orders with regard to appointment of Agent of Court Receiver for conducting and managing the business for the benefit of parties to this litigation. 24] The notice of motion is made absolute accordingly. However, there will be no order as to costs. 25] Mr.Damle prays that atleast till the Receiver submits his report in pursuance of this order and direction, defendant Nos. 1 to 4 be permited to carry on restaurant business. He states that they will render all 18 cooperation and assistance to the Receiver and hand over all books of accounts, papers, annexures so also the files to him so as to enable him to submit a comprehensive report to the Court. On such assurance of Mr.Damle, let the Court Receiver permit the defendant Nos. 1 to 4 to continue with the business activities for a period of four weeks which is the time stipulated for submission of his report. 26] At this stage, Mr.Damle applies for stay of the order. In the light of the permission given to the defendant Nos. 1 to 4 to temporarily continue with the activities, stay is refused. The order of 18th August 2009 directing maintainance of status quo shall continue in respect of the restaurant business and the tenanted property as well till the Receiver takes possession. All concerned to act on an authenticated copy of this order. (S.C.DHARMADHIKARI, J)