IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION. ORDINARY ORIGINAL CIVIL JURISDICTION. ORDINARY ORIGINAL CIVIL JURISDICTION. NOTICE OF MOTION No.4795 of 2007 NOTICE OF MOTION No.4795 of 2007 NOTICE OF MOTION No.4795 of 2007 IN IN IN SUIT No.924 of 2001. SUIT No.924 of 2001. SUIT No.924 of 2001. Mr Anil K. Bodani & Anr. .. Plaintiffs. .. Plaintiffs. .. Plaintiffs. Versus Manju Meadows Private Limited & Ors. .. Defendants. Defendants. Defendants. Mr Aspi Chinoi, Sr. Counsel with V.R. Dhond i/b Negandhi Shah & Himayatullah for the plaintiffs. Mr Cyrus Ardeshir i/b M/s Kanga & Co. for the defendant No.1. Mr D. D. Madon, Sr. Counsel i/b Desai and Desai and Carriamjee for the defendant No.10. Mr Subodh Joshi, with Mr Pankaj Vernekar and Ms Bharti Bhagwat i/b P. K. Shroff for the defendant No.3,11 and 12. Ms Deepali Khare i/b Shiralkar & Co. for the Defendant No.21. CORAM: V.C. DAGA,J. CORAM: V.C. DAGA,J. CORAM: V.C. DAGA,J. DATED: DATED: DATED: 12.03.2008. 12.03.2008. 12.03.2008. ORDER ORDER ORDER ----- ----- ----- 1. This notice of motion is taken out by the plaintiffs to seek extension of time by further period of three months (i.e. upto 21.3.2008) to comply with the order dated 21.12.2006 passed by learned Single Judge of this Court in Notice of Motion No. 1334 of 2006 so as to enable the plaintiffs to invest Rs.1 Crore in the Stud Farm. ( 2 ) THE FACTUAL MATRIX:- THE FACTUAL MATRIX:- THE FACTUAL MATRIX:- ------------------ 2. The factual matrix available on record indicate that the order dated 21st December, 2006 passed by the Learned Single Judge (Mr D.J.Chandrachud,J) relates to a controversy to the management of Stud Farm by the plaintiffs; who are appointed as Agents of the Court Receiver in pursuance of an order passed by the Learned Single Judge on 5.3.2004 which was confirmed in Appeal by the Division Bench on 15.3.2004 subject to the modification that the plaintiffs could be required to pay royalty to the Court Receiver. 3. The Court Receiver submitted his report dated 28.6.2006 and sought directions as to whether Agency of the plaintiffs could be terminated in view of the report submitted by representative of the Court Receiver. Court Receiver had also sought directions against the plaintiffs to submit accounts of the Stud Farm. The Report of the Receiver was taken up for hearing together with the Notice of Motion moved on behalf of the defendants to terminate the Agency of the plaintiffs and to increase ( 3 ) the amount of royalty with effect from 30.4.2004. The directions to render accounts and an order to remove the third parties who were inducted by the plaintiffs were passed by the Learned Single Judge. 4. The Learned Single Judge in the order dated 21.12.2006, found that no case was made out to terminate Agency of the plaintiffs. However, during the course of the proceedings, the Learned Single Judge called upon the plaintiffs to clarify as to whether or not the plaintiffs would be able to make a firm/ positive commitment with regard to the investment to be made in the Stud farm so as to prudently manage the stud farm. The statements made by the plaintiffs in this behalf were recorded in (para 14) the order dated 21.12.2006, which read as under: 1. Setting up a stud farm is a capital intensive project. The investment involves deployment of funds:- (a) in acquiring live stock; and (b) towards operating expenses viz.feeding, maintaining and looking after animals at the farm. 2. A gestation period of about five years is required for making a stud farm ( 4 ) functional. During this gestation period, quality live stock is progressively acquired; breeding is done; foals are produced; and sold (when they complete two years). 3. The plaintiffs shall, in this gestation period, invest in the stud farm a sum in the range of Rs. 5 Crores. Out of this a sum of about Rs.1 Crore will be invested in the first year itself. 4. In the gestation period, the plaintiffs will progressively acquire about 20 quality brood mares. 5. The plaintiffs do not intend to acquire a stallion. This is because several good stallions are available in stud farms close to Poona which can be used to cover the brood mares at the Farm. 6. The plaintiffs will be at liberty to stable livestock of others. These will however, be attended to, looked after and fed by the staff including a Veterinary Doctor employed by the plaintiffs at the farm. 7. The livestock acquired hereafter, and the offspring produced and other capital assets acquired from the plaintiffs’ licenses shall be the property of the plaintiffs. The plaintiffs will be at liberty to buy and/or sell livestock. The plaintiffs will also be at liberty to import livestock for the Farm. For this purpose, the plaintiffs shall be at liberty to apply to the appropriate authority for obtaining licences for the purpose of import of livestock. The plaintiffs shall also be at liberty to apply to the Ministry of Agriculture for Registration. 8. It is respectfully submitted that if any conditions are imposed, these be minimal so that the plaintiffs have the greatest operational ( 5 ) flexibility and the operations at the farm are not strait-jacketed. 9. The plaintiffs will file with the Receiver accounts for the period commencing their appointment as agents till date. The plaintiffs will hereafter periodically (such period as the Court fixes) file accounts of the business of the stud farm." 5. Consequent, upon receipt of the aforesaid statements, learned Single Judge was pleased to issue directions for effective management of the stud farm which read as under:- i) A gestation period of five years is required for making a Stud farm fully functional during which period live stock of the requisite quality is progressively acquired, breeding is done and foals are produced. During the period of gestation the plaintiffs shall invest in the Stud farm an amount of Rs.5 Crores of which an amount of Rs. 1 Crore shall be invested during the course of the first year. The rest of the amounts shall be progressively invested. During the period of gestation, the plaintiffs will progressively acquire 20 quality brood-mares; ii) The existing stallion at the Stud farm, Sizzling Melody, has been presently leased out and any monies which are realized from the transaction shall be brought into the business and shall be duly accounted in the accounts of the business; iii While the plaintiffs would be at liberty to stable the live stock of others, the live stock would be looked ( 6 ) after and fed by the staff of the plaintiffs including a veterinary doctor employed by the plaintiffs at the stud farm; iv The live stock acquired hereinafter, the off spring produced and other capital assets acquired from the plaintiffs’ finances shall be the property of the plaintiffs. The plaintiffs will be at liberty to buy and/or sell live stock or to import live stock for the purposes of the stud farm. In order to facilitate the import of live stock, the plaintiffs would be at liberty to apply to the appropriate authority concerned for obtaining licenses and/or to the relevant ministry of the Union of India for registration; v) In the event that the plaintiffs seek to sell the presently existing live stock at the Stud farm, this shall be carried out either through the RWITC or, in the alternative, through private treaty with prior notice to the Advocates appearing on behalf of the Second and Eighth defendants. vi) In stabling the live stock of others, the plaintiffs shall ensure that the main purpose of managing the property as a Stud farm is not deviated from; vii) The plaintiffs have undertaken to have all the structures at the farm duly insured at an insured value that would be determined by the Court Receiver on the basis of the valuation that would be obtained by the Receiver. 6. The perusal of the aforesaid Conditions in general and Clause No. 8 (i) in particular show that an investment of Rs. 1 Crore in the stud farm was expected to be made during the ( 7 ) period of first year and rest of the amounts were to be progressively invested further during the period of gestation the plaintiffs were supposed to acquire progressively 20 quality brood-mares. The plaintiffs have, thus, taken out this Notice of Motion to seek extension of time upto 21.3.2008 to comply with the earlier order of this Court dt. 21.12.2006. RIVAL CONTENTIONS: RIVAL CONTENTIONS: RIVAL CONTENTIONS: ----------------- ----------------- ----------------- 7. Mr Aspi Chinoy, learned Senior counsel appearing for plaintiffs in support of motion, relying on the affidavit dated 14th December 2007, urged that in order to make investment of Rs. 1 crore in the "Stud Farm", primarily the plaintiffs required to acquire quality brood mares so that breeding could take place and quality produce could then be sold for good price. According to the plaintiffs, these brood mares are required to be acquired by importing them. For import, licence has to be obtained from appropriate authority. 8. Learned Senior counsel took this Court through the affidavit filed in support of the ( 8 ) motion and tried to impress that the plaintiffs have taken number of steps to complete import, however, certain procedural requirements could not be completed well within stipulated time. As such grant of extension to import brood mares up to 21st March, 2008 would not only be in the interest of justice; but principally for compliance of the order dated 21.12.2006 passed by this Court. 9. Mr. Madon, learned Senior counsel appearing for the defendant no.10, strongly opposed grant of notice of motion. 10. Mr. Madon, while opposing the prayer made, submits that the plaintiffs were required to make an additional investment of Rs. 1 crore in the ‘Stud Farm’ as a condition for their agency with the Receiver. According to him, this investment was required to be made for setting up Stud Farm, purchase of livestock and other capital assets and to meet operating expenses. In his submissions, the plaintiffs have not invested even the portion of the required amount within the time-frame ( 9 ) prescribed by this Court. He, thus, submits that the default is deliberate and wilful and the present notice of motion is nothing but attempt to cover up such defaults. 11. Mr.Madon went on to submit that it is not necessary to import brood mares. Since the number of active brood mares at various Stud Farms in India are available for sale. He submits that the plaintiffs could have easily purchased Indian brood mares. He submits that the plaintiffs are attempting to avoid making investment in the Stud Farm on the false pretext that they need to import brood mares. He submits that the subject motion is not bona fide. Belated attempt on the part of the plaintiffs in moving this Court should result in rejection of the motion. CONSIDERATION : CONSIDERATION : CONSIDERATION : ------------- ------------- ------------- 12. Having heard the rival contentions and in the light of Condition No. 8 (i) reproduced in Paragraph 4 above clearly and unequivocally demonstrate that an investment ( 10 ) of Rs. 1 crore in the Stud Farm, was expected during the first year and rest of the amounts were to be invested progressively during the gestation period. 13. The plaintiffs have only invested Rs. 4,25,000 on the repairs and purchases of certain equipments and machineries, such as, water filtration, Syntax tanks, sprinklers etc. Looking to the investment figure of Rs. 4,25,000, the criticism made by Mr. Madon cannot be said to be unwarranted. However, rejection of this amount by no means would result in termination of the agency created in favour of the plaintiffs. The Defendant No.10 for whom Mr. Madon is appearing has not taken out any motion praying for any action for non-compliance of the order of this Court dated 21.12.2006. In the event of such motion being filed, the same can be considered on its own merits at that point of time. However, today the question before this Court is whether or not the plaintiffs are entitled for extension as prayed for. 14. The affidavit filed by the plaintiffs in ( 11 ) support of the motion and the facts stated therein, suggest that a number of steps have been taken by the plaintiffs to import brood mares. Whether the decision of the plaintiffs to import brood mares is justified or not, cannot be a subject matter of consideration by this Court. It may be a commercial decision taken by the plaintiffs. This Court can neither sit over the commercial decision of the plaintiffs nor examine the correctness thereof. Under these circumstances, no useful purpose would be served by rejecting the present motion and the reliefs claimed therein. 15. In the above premises, the notice of motion is liable to be made absolute for the reasons stated in the affidavit filed by the plaintiffs. However, it is made clear that grant of this motion shall in no way prejudice the right of any of the defendants if they decide to take out appropriate motion to canvass and substantiate their contention as sought to be canvassed by Mr. Madon to seek appropriate relief from this Court. ( 12 ) 16. In the result, the subject motion is made absolute in terms prayer Clause (a) in terms of this order with no order as to costs; JUDGE. JUDGE. JUDGE.