1 NMS89.09.sxw IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION kj NOTICE OF MOTION NO.89 OF 2009 IN SUIT NO.14 OF 2009 WITH CONTEMPT PETITION NO.6 OF 2010 Hema J. Mehta ..Plaintiff Vs Bharati Sharad Parab & Ors. ..Defendants ---- Farhan Dubash i/by Daru Shas & Co. for the plaintiff. Mr.Shailesh Shah along with M.C.Moholkar for defendant nos.1 to 3. ---- Coram : S.C.DHARMADHIKARI,J Date : 19TH OCTOBER, 2010. PC 1 The plaintiff and defendant no.1 are sisters. The defendant no.2 is the husband of defendant no.1 and defendant no.3 is the son of defendant nos.1 & 2. 2 NMS89.09.sxw 2 Mr. Mathuradas Vallabhdas Dhutia is the father of the plaintiff and defendant no.1. He died intestate on 16.12.2007. 3 According to the plaintiff and to the best of her knowledge the deceased had several movable and immovable properties and the same are compiled in the list at Exhibit-B to the plaint. 4 It is stated that the deceased lived in a tenanted flat. It is stated that the plaintiff and defendant no.1 resided with the deceased in the said flat and thereafter the 1st defendant got married to 2nd defendant and it is alleged that this was without the knowledge of the deceased and the family members. Ultimately, the relations are stated to have improved but marginally. The plaintiff got married in 1987 and went out of the residential flat to the matrimonial home. In paragraph nos.7, 8 & 9 of the plaint this is what is alleged :- “ 7 The said Deceased used to carry on business as a sole proprietor of M/s.Arun Industries which was started by him initially in partnership and which subsequently became his 3 NMS89.09.sxw proprietary concern since about 1994. At the time of his demise, the said Deceased was the owner of a plot of land being 123 C D situated in the Kandivali Industrial Estate, Charkop, Kandivali (W), Mumbai-400067 admeasuring approximately 1066 sq. metres with a ground floor structure standing thereon admeasuring approximately 4000 sq. feet (hereinafter, for the sake of brevity, referred as “the said Kandivali property”). Accordingly, the said Deceased was a member of the Kandivali Co-Operative Industrial Estate Limited and was the holder of 10 shares of the said Society bearing nos.2921 to 2930 (both inclusive) issued under Share Certificate No.KCIEL 306 dated 25th January 2006. The said structure was divided into 4 galas. One gala admeasuring about 1000 sq.ft.(carpet area) thereof was used by the said Deceased to carry on the business of M/s.Arun Industries and the remaining galas were given out on leave and license to other third parties on monthly compensation, as per particulars mentioned herein below : 4 NMS89.09.sxw i. Mr.Vinodbhai Shah c/o. Edmond Industries for monthly compensation of Rs.1000 ii Mr.Hashmukhbhai Desai c/o. Ganesh Plastic for monthly compensation of Rs.7000/- and iii Mr.Gyanchand Agrawal c/o Moonlight Electroplaters for monthly compensation of about Rs.6000/- 8 During the lifetime of the said Deceased, the compensation from the aforementioned 3 parties was collected by him and deposited into his bank account. A certain portion of the said compensation was also paid in cash by the said parties. After the demise of the said Deceased, the Defendants have been collecting the monthly compensation from the said third parties to the exclusion of the Plaintiff and thereafter fraudulently usurping the same. After the demise of the said Deceased, the Share Certificate of the said Kandivali property and the other property owned by the said Deceased together with all his other documents, papers, records, bank books, financial statements, etc. are in 5 NMS89.09.sxw the custody/possession of the Defendants to the exclusion of the Plaintiff. Infact, as more particularly set out herein, the Defendants have failed to disclose any details and particulars of the estate of the said Deceased despite repeated requests from the plaintiff. They have also failed to properly administer the estate of the said Deceased and deliberately neglected to render proper accounts of the same to the plaintiff. 9 The said deceased did not regularly attend to his business of M/s.Arun Industries for the last 2 years prior to his demise, mainly due to his advanced age. The Plaintiffs husband, Shri Jagdeep Mehta is a qualified Mechanical & Industrial Engineer. The initial business of M/s.Arun Industries was to manufacture automobile spare parts. However in 90’s with help of said Jagdip Mehta who was General Manager with Inor Ltd a company manufacturing orthopaedic implants, the said deceased changed the business of M/s.Arun Industries to manufacturing 6 NMS89.09.sxw orthopaedic implants and said Jagdip Mehta was instrumental in getting orders for M/s.Arun Industries. The said deceased had a loyal staff and workmen who had been working with him since a long period.” 5 It is stated that the plaintiff has now discovered that after demise of her father for last 2 years or so defendant no.3 has been carrying on business of M/s.Arun Industries from Kandivali property in the name of M/s. Medikare Enterprises. Moreover, he has continued the business of M/s. Arun Industries and it is alleged that he illegally mis-appropriated monies from the business without rendering any account. The plaintiff is an heir of deceased and entitled to equal share in the properties of the deceased. It is in such circumstances, she alleges that her sister and the husband of the sister are depriving her of a share in the property. There are allegations made with regard to mis-using of some blank papers which have the signatures of the deceased and it is stated that the estate is dealt with by the defendants. They have withdrawn some amount from Vijaya Bank. Despite personal efforts to settle the 7 NMS89.09.sxw matter, there was no favourable out come. In such circumstances, correspondence commenced and ultimately plaintiff has filed the instant suit. She has claimed a declaration with regard to her share in the property of the deceased and prayed that the estate be administered by and under the direction of this Court. For that purpose this court should pass interim order including appointment of Court Receiver, High Court, Bombay as a Receiver of the property and estate of the deceased particularly set out in Exhibit-B thereto. 6 There is an affidavit filed in reply to this Notice of Motion wherein it is alleged that the plaintiff has raised false pleas in as much as all properties were self acquired properties of the father of the plaintiff and defendant no.1. As per his will, he has distributed all his properties amongst his relatives and therefore, the properties are now held as absolute properties by the relatives including plaintiff and defendant no.1. There is no property which requires administration by this Court. It is alleged that plaintiff is not entitled to any relief. There are allegations made against the 8 NMS89.09.sxw plaintiff as well. It is stated that the deceased had already given direction with regard to the management of the properties. As far as Exhibit-B to the plaint is concerned, it is stated that the flat at Santacruz is a tenanted property. The tenancy rights are still in the name of the deceased. It is then alleged that tenancy rights are held by Laxmidas Vallabhdas Dhutia who was elder brother of late Shri Mathuradas. After setting out as to how the flat is occupied, it is stated that the property cannot be said to be property of the deceased because it is a tenanted property. Secondly, the rent receipts stand in the name of late Laxmidas. Thirdly tenancy rights will not devolve by general law of succession. Tenancy rights can never be bequeathed. Reliance is placed upon provisions of the Rent Act. Further it is stated that defendant no.3 is paying rent from 2005 by cheques. The plaintiff has not contributed anything in that behalf. Similarly the explanation is given with regard to item no.2 of the schedule and it is then alleged that income generated from the compensation received in respect of the galas in the industrial estates is very meager. The business of M/s.Arun Industries has been closed down. The defendant no.3 has not used 9 NMS89.09.sxw any goodwill and assets of M/s.Arun Industries. As far as bank account is concerned, there is an explanation given with regard to operation of the funds/amounts lying therein. It is in such circumstances, it is alleged that late Mathuradas purchased all properties in the joint name of defendant no.3 and kept in their joint D-mat account with sole intention of making Defendant no.3 the sole and absolute owner of these properties. Therefore, these properties are not liable to be partitioned or divided as claimed. At the same time, it is stated that some of the properties which were found by Defendant no.1 before the demise of Mathuradas were returned by Defendant No.1 to the plaintiff. 7 There are rejoinder affidavits and further affidavits which have been filed by the plaintiff indicating as to how the assets are liable to be partitioned as per the shares of the parties. 8 At the ad-interim stage, this Court had granted prayer clauses-(a) (i) and (c) of the Notice of Motion i.e an injunction to prevent transfer of the properties and to make disclosure on 10 NMS89.09.sxw affidavit. 9 It is in pursuance of this, that the affidavit in reply has been filed. After the matter was argued by the learned Counsel appearing for the parties, I had indicated as to why no workable solution can be found when the litigating parties are two real sisters. It was indicated to the defendants that the husband of defendant no.1 and son of defendant no.1 viz defendant nos.2 & 3 cannot argue that the plaintiff does not have any share in the estate of the deceased because plaintiff and defendants are the only daughters of the deceased. During the life time of the mother of defendant no.3, he will not get any right in the property which comes to his mother’s share equally the husband of the 1st defendant will in law be entitled to her share in the estate and during the life time of defendant no.1, can have only limited share as described therein. In such circumstances, an appropriate workable arrangement could have been made for protecting the estate. A suggestion was given if the unit/galas are fetching very meager income, then they may be disposed of so that the estate 11 NMS89.09.sxw generates funds as the investment cannot be kept idle. Considering the fact that the deceased had started some business which is now closed, it is only defendant no.3 who is carrying on business activities, but only from one gala other 3 galas could have been disposed of. At that time, plaintiff stated that she has got an offer also from interested parties who is willing to purchase even subject to the rights of occupancy of the parties there-in. The matter was adjourned till today to enable the parties to find out some solution of this dispute. However, it appears that they are not ad-idem on the mode of disposal of the galas. 10 I am in agreement with Mr. Shah learned Counsel appearing on behalf of defendant nos.1 to 3, that defendant no.3 who is the son of defendant no.1 and nephew of the plaintiff, is carrying on some business activities and he cannot be deprived of the physical use and possession so also occupation of the gala at this stage. However, the other 3 galas are not fetching much income. It is also clear that allegations are made in the further affidavit of the plaintiff that what has been done by defendant no.3 is to carry on 12 NMS89.09.sxw business of M/s.Arun Industries i.e the business of the deceased from Kandivali premises but in a different name. Thus, parties are bitterly contesting the matter. Both accused each other of bad faith and malafides. In their disputes, the estate cannot be wested and frittered away. Similarly, the version of the Defendants about their absolute title is difficult to accept at this stage. 11 It is in such circumstances, that I am of the opinion that it would be just and convenient to appoint Court Receiver, High Court, Mumbai as the receiver of the estate. This is in the light of the allegations and counter allegations and to prevent any wastage of the estate further as the assets are not being put to any profitable use. The Court Receiver can take such steps to preserve, protect and augment the income from the estate. The plaintiff is not admitting that the galas are fetching presently the market rate. It is alleged that the rate prevailing would not be less than Rs. 30,000/- per month as alleged in the affidavit dated 22.10.2009. In such circumstances, while not disturbing the physical possession of the occupants, the Court Receiver can fix a reasonable sum as 13 NMS89.09.sxw royalty/compensation to be payable by such occupants including defendant no.3 so that when ultimately shares have to be ascertained and paid over, the Court can pass appropriate order and direction. The Defendants at an earlier stage had not opposed the appointment of Court Receiver of the three galas and their disposal by him. 12 In such circumstances, while making the Motion absolute in terms of prayer clause-(c), it is also directed that the Court Receiver, High Court, Mumbai shall act as a Receiver and take charge of the properties and estate of the deceased which are more particularly set out in Exhibit-B to the plaint. On perusal of Exhibit-B it is clear that as far as the tenancy rights in flat no.2, ground floor of the building known as Gomogruha, Vithaldas Nagar, North Avenue, Santacruz (west) is concerned, it is not necessary that the Court Receiver needs to be appointed in that behalf. Tenancy rights are in the name of the brother of the deceased. Rent receipts are also in the name of brother presently. It is stated by the defendants that they are in use and occupation 14 NMS89.09.sxw of this flat and they will, in addition to abiding by the injunction in terms of prayer clause-(c), not surrender the tenancy rights to the landlord until disposal of the suit. 13 The Court Receiver cannot take any steps in so far as the list of assets at serial no.3 and 4 of Exhibit-B because the description is very vague. It is for the plaintiff to give details, only thereafter the Court Receiver can take appropriate steps. Further, even the plaintiff will have to hand over the assets in her possession such as shares, mutual funds and fixed deposits to the Court Receiver on being called upon to do so. However, the Court Receiver shall take possession of the bank accounts and shares, mutual funds and investments which are described in the schedule in addition to the galas in Kandivali Industrial Estate. These 4 galas which are described at item-2 schedule-B shall be allowed to be retained by those who are in occupation but they will have to execute an agency agreement with the Court Receiver. Three months time is granted to execute such agency agreement. The Court Receiver shall determine the royalty/compensation payable from month to 15 NMS89.09.sxw month and after the agency agreement is executed and the compensation is determined so also he takes charge of the estate, he shall make appropriate report to this Court and await further direction in that behalf. 14 Notice of Motion is made absolute in aforementioned terms without any order as to costs. 15 At this stage, learned Counsel for the defendants applies for stay of this order. He prays that the Receiver should not take charge of the estate for a period of 8 weeks from today. The matter was placed today so that the defendants respond to the offer which was brought by the plaintiff. At one stage, all parties were agreed that the galas can be disposed of and each one of them were given liberty to give bids. Today, the defendants stated that they are not agreeable to this course of action. In such circumstances and bearing in mind that the property and particularly the galas are valuable, arrangements have to be made so that they are not wasted further and they can generate more income which aspect 16 NMS89.09.sxw could not have been ignored. In such circumstances, Court Receiver has been appointed. Three months time has been given to the defendants to execute the agency agreement with the Court Receiver. Therefore, there is no immediate apprehension and particularly one expressed by the learned Counsel appearing for the defendants. Hence, stay is refused. The order of injunction to continue till the Receiver takes possession. (S.C.DHARMADHIKARI,J) 17 NMS89.09.sxw IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION CONTEMPT PETITION NO.6 OF 2010 IN NOTICE OF MOTION NO.89 OF 2009 IN SUIT NO.14 OF 2009 Hema Jagdip Mehta ..Petitioner Vs. Bharti Sharad Prabhu & Ors. ..Respondents ---- Farhan Dubash i/by Daru Shas & Co. for the petitioner. Shailesh Shah alongwith M.C.Moholkar for defendant nos.1 to 3 ---- Coram : S.C.DHARMADHIKARI,J Date : 19TH OCTOBER, 2010 PC 18 NMS89.09.sxw 1 Having heard the learned Counsel appearing for the petitioner and the respondents and perusing with their assistance the order dated 9.2.2009 and the affidavit filed in response thereto, I am of the view that no case of civil contempt is made out. Contempt Petition is accordingly dismissed. (S.C.DHARMADHIKARI,J)