1 APP974/05 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION APPEAL NO.974 OF 2005 IN NOTICE OF MOTION NO.1887 OF 2095 IN SUIT NO.2391 OF 1997 Shubh Shanti Services Ltd. ...Appellants v/s Smt Manjula Agerwalla and others ...Respondents Mr J.P. Sen with Mr L.A. Ruben and Mr S.S. Suryawanshi i/b M/s Vigil Juris for Appellants. None for Respondents. CORAM : D.K. DESHMUKH AND N.D. DESHPANDE JJ. DATE : 10TH JANUARY 2011. 2 APP974/05 P.C. :- 1] This appeal is directed against the order dated 5th August 2008 passed by the learned Single Judge of this Court in notice of motion No.1887 of 2005 in suit No.2391 of 1997. That civil suit was filed by the present appellant. The present appellant is a Company registered under the Companies Act. According to the averments in the plaint, one Shri Suresh C. Agerwalla, husband of respondent No.1 and father of respondent No.2 was employed with the appellant Company since 1971 till his death on 2nd November 1992. He was appointed as Managing Director of the appellant Company for a period of five years with effect from 8th November 1988. Flat No.25, Sonmarg, 67-B, Napean Sea Road, Mumbai 400 006, owned and possessed by the appellant Company, was alloted to late Shri Suresh C. Agerwalla on 10th March 1975, to be used for residential purpose for himself and family members during the period of his service. The Board of Directors had extended the term of Shri S.C. 3 APP974/05 Agerwalla upto 14th June 1993. However, Shri S.C. Agerwalla expired on 2nd November 1992 when he was full time Managing Director of the appellant Company. The respondent Nos.1 and 2 were residing with him in Sonmarg building as members of his family. Even after the death of Shri Agerwalla, they continued to occupy the said flat. According to the appellants, after the death of Shri Agerwalla, the respondents did not have any right to continue to occupy that flat. They were called upon to vacate that flat, they did not vacate it, therefore suit No.2391 of 1997 was filed, claiming a declaration that the respondents are not entitled to continue to occupy the flat (hereinafter referred to as Sonmarg flat) and also for a decree of possession directing them to handover vacant possession of the flat to the appellant Company. It appears that in the year 1995, suit No.7 of 1995 was filed by the respondents in this Court claiming that the appellant Company had entered into an agreement to transfer flat No.33, Third Floor, Blue Heaven, Mount Pleasant Road, Bombay 400 006. It was also 4 APP974/05 claimed in the suit that the Chairman of the appellant Company had given an assurance to the respondents that they can continue to occupy the Sonmarg flat till flat No.33, Third Floor, Blue Heaven, Mount Pleasant Road, Bombay 400 006 (hereinafter referred to as the Blue Heaven flat) is transferred in favour of the respondents. In that civil suit, they had taken out a notice of motion and in that notice of motion, a statement was made on behalf of the appellant Company that during the pendency of that suit, possession of Sonmarg flat of the respondents shall not be disturbed except in accordance with law. In civil suit No.2391 of 1997, which was the suit filed by the appellant Company, notice of motion No.2082 of 1997 was taken out by the appellant Company for suitable interim orders. That notice of motion was disposed off by order dated 16th November 1998. By that order, Court Receiver of this Court was appointed as receive on Sonmarg flat and the Receiver was to appoint respondent No.1 as his agent to be in actual possession of the flat on payment of royalty. 5 APP974/05 2] The appellant Company filed complaint under section 630 of the Companies Act for appropriate orders before the Additional Chief Metropolitan Magistrate. That complaint was registered as case No.4/S/1995. The learned Additional Chief Metropolitan Magistrate disposed off that complaint on 30th October 1999. The learned Additional Chief Metropolitan Magistrate acquitted respondent Nos.1 and 2 of the offences punishable under section 630 of the Companies Act. Criminal appeal No.48 of 2000 was filed by the appellant Company and the same was dismissed by the learned Single Judge of this Court by order dated 8th April 2004. This Court confirmed the order passed by the learned Additional Chief Metropolitan Magistrate. Criminal appeal No.712 of 2005, challenging both the orders, one of the Additional Chief Metropolitan Magistrate and another of learned Single Judge of this Court, was filed before the Supreme Court. The same was disposed off by the Supreme Court by order dated 11th May 2005. Following portion from that order is relevant for 6 APP974/05 our purpose, it reads as under :- After the death of Shri Agerwalla on 2.11.1992, the respondents 1 and 2 in possession of the company s Sonmarg flat. Admittedly they were not in employment of the company nor company has authorised them to remain in possession of the same particularly after notice dated 9.11.1994 to vacate the premises and handover the possession to the company. The possession of the company s flat by the Respondents, after the service of notice to vacate the premises by the company, is wrongful withholding of the property of the company. The respondents by having wrongfully withheld the possession of the company s flat and not delivering the property to the company, have committed an offence. The interim order of the High Court dated 16.11.1998 in the civil suit filed by the appellant  Company does not wipe out the 7 APP974/05 offence committed already for which criminal complaint was filed. Subsequent to that order, the possession may not be wrongful, but on the date of complaint and till the date of that order, the Respondents did wrongfully withhold that property, attracting the offence under section 630(1). Having regard to the factual position of the case, we think that imposition of fine of Rupees One thousand each would be a proper punishment for wrongful withholding the Sonmarg flat. Accordingly, respondents 1 and 2 are sentenced to pay fine of Rupees One thousand each. We would like to make it clear that so long as order of the High Court dated 16.11.1998 in Civil Suit No. 2391 of 1997  M/s Herdillia Chemicals Ltd. v/s Smt Manjula Agarwala and others, appointing the Court Receiver and delivering him symbolic possession and actual possession as agent of Receiver to 8 APP974/05 Respondent No.1 stands, no direction can be given under section 630(2) for delivery of actual possession of Sonmarg flat to appellant. It is of course open to the petitioner to approach the Civil Court for suitable orders. The High Court may dispose of both the suits viz. Suit No.7/95 and 2391/97 expeditiously, as far as possible within one year. For the aforesaid reasons, the appeal is partly allowed. The judgment and order of the High Court and that of the Additional Chief Metropolitan Magistrate, 40th Court at Girgaum, Bombay are set aside. However, in the facts and circumstances of the case, we direct the parties to bear their own costs. The Supreme Court thus recorded a categorical finding that the respondents have no authority to continue to occupy the Sonmarg flat. 9 APP974/05 The Supreme Court however did not pass an order under sub-section (2) of section 630 because of the interim order passed by this Court i.e. Appointment of Court Receiver and appointment of respondents as agents of the Court Receiver to be in possession of the flat passed in this suit and the statement made on behalf of the appellants in suit No.7 of 1995. In this situation, the appellant Company moved notice of motion No.1887 of 2005 before the learned Single Judge of this Court in their suit seeking an order discharging the Court Receiver and also an order restraining the respondents from transferring or alienating the flat during the pendency of the suit. The learned Single Judge of this Court disposed off the notice of motion No.1887 of 2005 by order dated 5th August 2005. The learned Single Judge dismissed the notice of motion. The learned Single Judge has observed the only reason why the present notice of motion has been moved is that a finding is recorded by the Supreme Court in proceedings under section 630 of the Companies Act, that occupation of the flat by respondents is 10 APP974/05 unauthorised after the death of Shri S.C. Agerwalla. The learned Single Judge has held that that cannot be the reason for moving the notice of motion for discharging the Court Receiver. 3] We have head the learned counsel appearing for appellant Company. None appears for the respondents though notice was waived on behalf of the respondents when the appeal was admitted for final hearing. The respondents have not bothered even to file their Vakalatnama in the appeal. 4] It is clear from the record that so far as civil suit No.7 of 1995 is concerned, Sonmarg flat is not subject matter of that suit. The only claim made in relation to Sonmarg flat in that suit is that there is an assurance given by the Chairman of the appellant Company that till Blue Heaven flat is given in possession of the respondents, their possession of Sonmarg flat would not be disturbed. In so far as the present suit is concerned, relief is claimed only in relation to Sonmarg flat. So far 11 APP974/05 as the Sonmarg flat is concerned, admittedly it is owned by the appellant Company and except for the assurance which is alleged to have been given by the Chairman of the appellant Company referred to above, there is no authority pleaded by the respondents in them to continue to occupy that flat. The Supreme Court in its order quoted above has recorded a clear finding that on the death of Shri S.C. Agerwalla, the respondents ceased to have any right to continue to occupy the Sonmarg flat. In our opinion, therefore, there can be no justification to continue the appointment of Court Receiver on the flat because continuance of the appointment of Court Receiver on the flat comes in the way of the appellant Company for moving for appropriate orders in relation to Sonmarg flat on the basis of clear finding recorded by the Supreme Court that the respondents have no authority to continue to occupy the flat. By discharging the Court Receiver appointed on the Sonmarg flat, the respondents are also not likely to suffer adversely immediately because their possession of that flat is protected 12 APP974/05 by the statement made on behalf of the appellants in suit No.7 of 1995. So far as the Sonmarg flat is concerned, no order to protect the interest of the respondents can be made in this suit in view of the clear finding recorded by the Supreme Court that the respondents have no authority or right to continue to occupy the Sonmarg flat. Their case that there is an assurance given by the Chairman of the appellant Company that they can continue to occupy Sonmarg flat till possession of Blue Heaven flat is given to them is to be examined in their suit i.e. Suit No.7 of 1995 and there is no question of that contention being examined in this suit. In our opinion, therefore, following order would meet the ends of justice. 5] The appeal is allowed. The order impugned in the appeal is set aside. The Court Receiver appointed by order dated 16th November 1998 is discharged without passing accounts. The Court Receiver shall handover possession of Sonmarg flat to the respondents from whom he had taken 13 APP974/05 possession. 6] The respondents are restrained from alienating, transferring, handing over possession of the Sonmarg flat during the pendency of the suit. Appeal is disposed off. Parties to act on the copy of this order duly authenticated by the Associate / Private Secretary of this Court. Certified copy expedited. ( JUSTICE D.K. DESHMUKH ) ( JUSTICE N.D. DESHPANDE )