ssp 1 NMS 48 of 2007 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO.48 OF 2007 IN SUIT NO.2470 OF 1994 Divyakant Ranjitsinh Khatau .....Plaintiff versus Smt.Krishnabai Abhay Khatau and Ors. ..... Defendants Mr. Kevic Setalwad i/by M/s. Hiralal Thakar & Co., for the plaintiff in support. Mr.D.D.Madon, Senior Advocate with Mr.Cyrus Ardeshir i/by Desai Desai and Carrimjee and Mulla and Mulla & Craigie Blunt and Caroe, for defendant Nos.1A to 1C and 9. Ms.Sumedha Sawant i/by N.N.Amin & Co., for defendant No.1(D). Ms.Najma Shaikh i.by M/s.Vigil Juris, for defendant Nos.2 to 5. Mr.Ankush Vithlani i/by M/s.Bilawala & Co., for defendant Nos.10 to 12. CORAM: R.M.SAVANT, J. DATE: 28TH APRIL, 2011 P.C. : 1. The above Notice of Motion filed by the plaintiff is one more proceeding in the long list of proceedings filed in the above suit. Most of the proceedings which are by way of interlocutory applications have been filed by the plaintiff abovenamed. 2. The suit as originally filed by the plaintiff, claims 1/80th share in the Walkeshwar property, which was one of the properties which is settled by the settler Mulraj Khatau in favour of his five sons by creating ssp 2 NMS 48 of 2007 a Trust by Deeds of Settlements dated 27-04-1987 and 27-02-1990. The plaintiff and the defendants are the heirs of the said five sons of the original settler, the common ancestor being one Mulraj Khatau. 3. In so far as the above Notice of Motion is concerned and the reliefs claimed therein, the genesis of it lies in the order dated 30-01-1999 passed by Nijjar, J. (as His Lordship then was) in a group of Motions, one of which was filed by the defendant Nos.1 and 9 to 12 herein, seeking permission to give the flats on the 1st, 2nd and 3rd floors on leave and licence basis. The said motion being Notice of Motion No.2391 of 1997, was heard along with Notice of Motion No.3294 of 1995 and 1804 of 1996. The cause for filing the said Motion arose in view of the fact that the plaintiff had filed Notice of Motion No.1804 of 1996, interalia for restraining the defendants herein from giving flats on the 1st, 2nd and the 3rd floors in the building constructed in the said Walkeshwar Property on leave and licence and had obtained ad-interim reliefs on 23-04-1996, in respect of the said flats, which was operating till the same merged with the final order dated 30-01-1999. 4. In the context of the reliefs sought in the above Motion, the order dated 17-01-1995 is also material. The said order was passed in Appeal No.858 of 1994 by a Division Bench of this Court. By the said order, ad-interim reliefs in terms of prayer clause 1(a) and 1(b) of the ssp 3 NMS 48 of 2007 Notice of Motion were granted pending the hearing and final disposal of the said Notice of Motion No.2394 of 1994. The said ad-interim relief was granted by deleting the words “or in any manner dealing with” from the said prayer clauses. 5. Now, coming to Notice of Motion 2391 of 1997, the said Notice of Motion was filed by the defendants herein interaila for the reliefs that : (a) that pending the hearing and final disposal of the suit, on the Understanding of Defendant Nos.1 and 9 to 12 to this Hon’ble Court to set apart 1/16th of the Floor Space Index (FSI) available on the Walkeshwar property, described in Ex.B to the Plaint to secure the claim of Morarji Mulraj Khatau branch as claimed in the suit herein as well as in High Court Suit No.1733 of 1984, (1) the order dated 23rd April, 1996 passed in Notice of Motion No. 1804 of 1996 and the order dated 27th August, 1996 in Appeal No.820 of 1996 be modified and the Bank Guarantee for Rs.1 Crore given by the defendants Nos.1 and 9 to 12 in favour of the Prothonotary and Senior Master, High Court, Mumbai, be ordered to be cancelled, and (2) the order dated 11th December 1984 passed on Consent Terms in Notice of Motion No.1780 of 1984 in Suit No.1733 of 1984 arrived at between the plaintiff in the said suit and defendants Nos.12 to 14 and defendants Nos.1 to 3 and 7 in the said suit be modified and the Bank guarantee of Rs.40 lakhs given by defendants Nos.2, 3 and 7 to be said suit which subsequently has been renewed by defendants Nos.2, 3 and 7 to the said Suit No.1733 of 1984 and after death of defendant No.2 in the said suit No.1733 of 1984, renewed by defendant Nos.10 and 12 as heirs and legal representatives of the said defendant Nos.2 in the said Suit No.1733 of 1984 along with defendant Nos.1 and 9 herein who were defendant Nos.3 and 7 in the said Suit No. 1733 of 1984 in favour of the Prothonotary and Senior ssp 4 NMS 48 of 2007 Master, High Court, Mumbai, be ordered to be cancelled and (3) the defendant Nos.1 and 9 to 12 be permitted to give the three flats on the 1st, 2nd and 3rd Floors in the new construction on leave and licence basis or such other basis on the terms and conditions viz. (i) that 1/16th share of the net income on the interest free deposit received/that may be received from the prospective licences calculated on the basis of the return at the rate of 10% per annum received or to be received from the Licences of the said flats, shall be deposited by defendant Nos.1 and 9 to 12 in this Hon’ble Court during the subsistence of the Licence Agreements with the respective Licencees. (ii) that the member of the Morarji Mulraj Khatau Branch shall on furnishing Bank Guarantees of Nationalized Banks in favour of the Prothonotary & Senior Master, High Court, Mumbai and subject to final outcome of the said Suit No.1733 of 1984 and the present suit, be permitted to withdraw the proportionate amount deposited pursuant to clause (i) above; (b) that the plaintiff be directed to the refund to the defendant Nos.1 and 9 to 12 a sum of Rs.10 Lakhs paid by the defendant Nos.1 and 9 to 12 to the plaintiff pursuant to the said order dated 27th August, 1996 upon such undertaking as stated in prayer (a) above being furnished by defendant Nos.1 and 9 to 12; (c) that the Injunction order dated 17th January, 1995 passed in Appeal No.858 of 1994 in Notice of Motion No. 2394 of 1994 in the present suit as modified by the Order dated 21st March, 1996 be suitably modified; (d) for ad-interim and interim reliefs in terms of prayer clauses (a), (b) and (c) above may be granted; (e) For the costs of this Notice of Motion; (f) For such further and other reliefs as the nature and circumstances of the case may requires; 6. As mentioned hereinabove, the said Motion was heard along with the other two Motions filed by the Plaintiff and disposed of by a common order dated 30-01-99. The relevant extract of the order being ssp 5 NMS 48 of 2007 para 18 is reproduced hereunder. “18. In view of the above, Notice of Motion No. 23391 of 1997 is made absolute in terms of prayer clauses (a) except the bracketed portion and (b). Prayer clauses (a) and (b) read as under: (a) That pending the hearing and final disposal of the suit, on the undertaking of Defendant Nos. 1 and 9 to 12 to this Hon’ble Court to set apart 1/16th of the Floor Space Index (FSI) available on the Walkeshwar property, described in Ex. B to the plaint to secure the claim of Morarji Mulraj Khatau branch as claimed in the suit herein as well as in High Court Suit No. 1733 of 1984, (i) the order dated 23rd April, 1996 passed in Notice of Motion No. 1804 of 1996 and the order dated 27th August 1996 in Appeal No. 820 of 1996 be modified and the Bank Guarantee for Rs. 1 crore given by the Defendants Nos. 1 and 9 to 12 in favour of the Prothonotary and Senior Master, High Court, Mumbai be ordered to be cancelled, and (2) the order dated 11th December, 1984 passed on consent terms in Notice of Motion No. 1780 of 1984 in Suit No. 1733 of 1984 arrived at between the Plaintiff in the said suit sand defendant Nos. 12 to 14 and defendant Nos. 1 to 3 and 7 in the said suit be modified and the Bank Guarantee of Rs. 40 lakhs given by defendants Nos. 2, 3 and 7 to the said suit which subsequently has been renewed by defendant Nos. 2, 3 and 7 to the said Suit No. 1733 of 1984 and after death of Defendant No. 2 in the said Suit No. 1733 of 1984, renewed by defendants Nos. 10 to 12 as heirs and legal representatives of the said Defendant No.2 in the said Suit No. 1733 of 1984 along with Defendant Nos. 1 and 9 herein who are defendants Nos. 3 and 7 in the said Suit No. 1733 of 1984 in favour of the Prothonotary and Sr. Master, High Court, Mumbai be ordered to be cancelled and (3) the Defendant Nos. 1 and 9 to 12 be permitted to give the three flats on the 1st, 2nd and 3rd floors in new construction on leave and licence basis (or such other basis) and on the terms and conditions viz. ssp 6 NMS 48 of 2007 (i) that 1/16th share of the net income on the interest free deposit received/that may be received from the prospective licensees calculated on the basis of return at the rate of 10% per annum received or to be received from the Licensees of the said flats, shall be deposited by Defendant Nos. 1 and 9 to 12 in the Hon’ble Court during the subsistence of the Licence Agreements with the respective Licensees: (ii) that the members of the Morarji Mulraj Khatau Branch shall on furnishing Bank Guarantees of Nationalised Banks in favour of the Prothonotary and Sr. Master, High Court, Mumbai and subject to final outcome of the said Suit No. 1733 of 1984 and the present suit, be permitted to withdraw the proportionate amount deposited pursuant to clause (i) above. (b) that the plaintiff be directed to refund to the Defendant Nos. 1 and 9 to 12 a sum of Rs. 10 lakhs paid by the Defendant Nos. 1 and 9 to 12 to the plaintiff pursuant to the said order dated 27th August, 1996 upon such undertaking as stated in prayer (a) above being furnished by defendant Nos. 1 and 9 to 12.” 7. Against the said order dated 30-01-1999, the matter was carried in Appeal by the plaintiff by way of Appeal No.285 of 1999, which Appeal was heard along with the other Appeals filed by some of the other parties. By an order dated 29-06-1999, a Division Bench of this Court headed by the then learned Chief Justice Y.K.Sabharawal (as His Lordship then was), dismissed the appeal. However, in so far as the order of injunction granted vide order dated 17-01-1995 is concerned, the Bench clarified that the said order of injunction would continue pending the suit. The above Notice of Motion No. 48 of 2007 has been filed by the plaintiff ssp 7 NMS 48 of 2007 interalia claiming the following reliefs : - a) This Hon’ble Court be pleased to withdraw the permission granted to defendant Nos.1 (a) to 1(d) and 9 to 12 to give flats on the 1st, 2nd and 3rd floors of the new building in the suit property on lease/leave and licence basis or in any other manner by the order dated 30th January, 1999 passed by His Lordship the Hon’ble Mr.Justice Nijjar; b) that pending the hearing and final disposal of the suit, the defendant Nos.1(a) to 1(d) and 9 to 12 and their servants and agents be restrained by an order and injunction of this Hon’ble Court from giving on lease/leave and licence basis or in any manner the flats in the new building in the suit property; c) that pending the hearing and final disposal of the suit, the defendant Nos.1(a) to 1(d) and 9 to 12 be directed to forthwith deposit in this Hon’ble Court the amount of deposit/advance rent/compensation received and/or receivable by the defendant Nos.1(a) to 1(d) and 9 to 12 or anyone or more of them in respect of flats on the 5th and 6th floors of the new building of the suit property given by them on lease/leave and licence basis or on any other basis in contravention of the order dated 30th January, 1999 passed by His Lordship, the Hon’ble Mr.Justice Nijjar and the second time committing contempt of this Hon’ble Court by fluting order of injunction dated 17th January, 1995 passed by the Hon’ble Appeal Court of this Hon’ble Court. d) that the defendant Nos.1(a) to 1(d) and 9 to 12 be ordered and directed to forthwith have the flats on the 1st, 2nd and 3rd, 5th and 6th floors of the new building of the suit property vacated from the respective occupants of the said flats; e) that the defendant Nos.1(a) to 1(d) and 9 to 12 be directed to forthwith render true and faithful accounts with documents/vouchers supporting the same, in respect of the flats on the 1st, 2nd, and 3rd floors of the new building of suit property given by them on lease/leave and licence basis pursuant to the order dated 30th January, 1999 passed by His Lordship the Hon’ble Mr.Justice Nijjar; f) that the defendant Nos.1(a) to 1(d) and 9 to 12 be ssp 8 NMS 48 of 2007 directed to forthwith render true and faithful accounts with documents/vouchers supporting the same, in respect of the flats on the 5th and 6th floors of the new building of suit property given by them on lease/leave and licence basis in contravention of the order dated 17th January, 1995 passed by the Hon’ble Appeal Court consisting of Their Lordships the Hon’ble the Chief Justice Bhattacharya and Mr.Justice Rane. 8. The gravamen of the allegations on the basis of which the plaintiff claims modification of the order dated 30-01-1999 and the withdrawal of the permission to the defendants to give the flats on leave and licence basis is that the defendants are not depositing 1/16th of the net income of interest free deposit received/that may be received from the prospective licencees calculated on the basis of return at 10% p.a. The second allegation is that though it was not permissible for the defendants to give the flats on the 5th and 6th floors on the leave and licence basis in view of the injunction i.e. operating against them, they have done so in flagrant breach and violation of the said injunction order. 9. Learned counsel appearing on behalf of the plaintiff in support of the Notice of Motion Shri Setalwad, took me through the charts which have been annexed to the affidavits, interalia showing the various amounts received, i.e. the licence fees, towards other charges, and the interest free deposit from the year 1999 to the year 2008. Learned counsel ssp 9 NMS 48 of 2007 drew my attention to the column of the interest free deposit in the charts, so as to demonstrate as to how the said interest free deposit has progressively reduced from the year 1999 to a stage where at present the flats have been given on leave and licence basis without there being any interest free deposit being accepted by the licensors i.e. the defendants. Learned counsel Shri Setalwad would contend that the same has been done to defeat the rights of the plaintiff. Learned counsel would further contend that curiously licence fees have increased as also the charges for the use of furniture etc. from the year 2003. This according to him, has been deliberately done by the defendants as the defendants in terms of the order dated 30-01-1999 were only liable to deposit on the basis of the interest free deposit that was to be received. It is the submission of the learned counsel Shri Setalwad that the defendants are acting fast and loose with the Court in as much as defendants have innovated a novel method of accepting increased licence fee and charges for the use of furniture etc. and not accepting substantial interest free deposit as was the case earlier, at the time of giving flats in question on leave and licence basis. Learned counsel would contend that it is on the representation of the defendants as spelt out in the affidavit in support of the said Notice of Motion No.2391 of 1997, wherein they had shown their difficulty in giving bank guarantee and keeping in deposit an amount of Rupees One Crore ssp 10 NMS 48 of 2007 that their prayer that they would deposit 1/16th of the net income, was accepted by this Court on the ground that the condition to which the defendants were subjected to earlier was onerous. The learned counsel Mr.Setalwad sought to buttress the said submission by relying upon the pleadings in the affidavit in support of Notice of Motion No.2391 of 1997 filed by the defendants. 10. In so far as the letting out of the flats on 5th and 6th Floors are concerned, learned counsel submitted that the defendants have brazenly, and in flagrant breach and violation of the order passed by the Division Bench dated 17-01-1995 had let out the said flats without even seeking permission of this Court for doing the same. Learned counsel also made submissions as also regarding the right of the plaintiff under the Trust Deed and the corresponding applications of the defendants as trustees of the property in question. 11. Per contra, it was submitted by Mr. Madon, the learned senior Counsel appearing for defendant Nos. Nos.1A to 1C and 9 that though the learned counsel for the plaintiff has endeavoured to enlarge the scope of inquiry under the present Notice of Motion, this Court would have to confine itself within the parameters of the reliefs claimed in the above Notice of Motion. Learned senior counsel at the outset, submitted that at the highest the right of the plaintiff qua interest free deposit is ssp 11 NMS 48 of 2007 0.625% of the net income calculated at the rate of 10%, the learned counsel would therefore, contend that it is impossible that the defendants would jeopardise their 99.4% of their share for the said paltry amount. The learned senior counsel demonstrated the fact by stating that on a sum of rupees one crore, plaintiff would ultimately be entitled to an amount of Rs.62,500/- per year. Learned senior counsel submitted that the reasons why the interest free deposit has gone down over the years has been mentioned in the affidavit-in-reply. Learned senior counsel further submitted that the submissions of the learned counsel for the plaintiff in respect of the plaintiff’s right if any, qua the licence fees, cannot be entertained by this Court as Nijjar, J. was alive to the fact that flats in question are liable to fetch high licence fees and in spite of the same, the learned Judge had restricted the plaintiff’s right if any, qua the interest free deposit that was received or receivable. 12. In so far as the right of the plaintiff to the licence fees is concerned, the same does not find place in the order dated 30-01-1999, which has been confirmed by the Division Bench in Appeal by the order dated 29-06-1999. Learned senior counsel submitted that the plaintiff in the guise of the present Notice of Motion cannot reopen issues which had been settled by the order dated 30-01-1999 and confirmed by the Division Bench in Appeal. As regards the flats on the 5th and 6th floors are ssp 12 NMS 48 of 2007 concerned, learned Senior Counsel would contend that the plaintiff had filed Contempt Petition No.72 of 2007 wherein specific allegations as regards breach and violation of the order dated 17-01-1995, as also the order dated 30-01-1999 were made. This Court, (Coram V.M.Kanade, J.) by an order dated 31-08-09 dismissed the Contempt Petition on the ground that there was no willful violation of the orders of which the breach was alleged by the plaintiff. Whilst dismissing the said Contempt Petition, the learned Judge relying upon the judgments of the Apex Court has held that giving the premises on leave and licence basis, does not amount to creation of third party rights. According to the learned Senior Counsel, in the light of the order passed in the said Contempt Petition, it is now no more open to the plaintiff to contend that there is a violation of the order dated 17-01-1995 on the ground that the defendants have given the flats on 5th and 6th floors on leave and licence basis. 13. I have heard the learned counsel for the parties and bestowed my anxious consideration to the rival consideration. As indicated above, basis for filing of the above Notice of Motion is the alleged violation of the order dated 17-01-1995 passed by the Division Bench of this Court as well as the order dated 30-01-1999 passed by Nijjar, J. in a group of Notices of Motions, which included Notice of Motion No. 2391 of 1997 filed by the defendants. The relevant extract which has been ssp 13 NMS 48 of 2007 reproduced in the earlier part of this order, interalia discloses that the defendants were obliged to deposit 1/16th share of the net income on the interest free deposit received/that may be received from the prospective licences calculated on the basis of return @ 10% p.a., received or to be received from the licences of the said flats. By the said order therefore, both the situations namely the interest free deposit that would be received in future, as also a situation where no interest free security deposit is received were covered, hence if no such security deposit is received then the defendants would not be liable to deposit any amount by way of 1/16th of the net income, as directed by clause (i) of para No.18(a) of the said order dated 30-01-1999. 14. It is an admitted position that 1/16th amount has been deposited by the defendants till the year 2003, though belatedly at times which has been fairly accepted by the learned Senior counsel appearing for the defendants. In so far as the aspect of why there has been a reduction in the interest free deposit from the year 2003 is concerned, the explanation for the same has been given by the defendants in the affidavit in reply, which can be gainfully reproduced as under : - “I say and submit that the terms and conditions of the licence are governed by market forces and even at present it is impossible to get Licensees who are prepared to pay huge deposits to cover the market value of the flat given on Leave and Licence. I submit that this is because the earlier ssp 14 NMS 48 of 2007 situation in which the Licensees used to claim tenancy, no more exists. With the amendments in the provisions of The Maharashtra Rent Control Act, 1999, as also under the amended provisions of Bombay Rent Act, 1947 providing for stiff conditions and expeditious procedure for vacating licenced premises by the Competent Authority appointed under the said Act, it is no more possible for the Licensees to claim tenancy of the licensed premises and hence, the licensees are no more prepared to give huge interest free deposit to cover the value of the flat. 15. The said explanation given by the defendants, in my view, can be a plausible reason for the interest free deposit going down from the year 2003, and now is