1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION CHAMBER SUMMONS NO 1537 OF 2006 IN EXECUTION APPLICATION NO. 447 OF 2006 IN SUMMARY SUIT NO. 1353 OF 1984 Dharamdas Manilal Jhaveri .. Plaintiff Vs Semcon Electronics Pvt Ltd & Another .. Defendants And M. Suresh Jewellery Pvt Ltd .. Respondent No1 And Office of the Development Commissioner, SEEPS, Sez. .. Respondent No2 Mr. Atul Rajadhyaksha Sr. Counsel along with Mr. H. Toor, Mri Girish Dave, Mr. Swapan Samdani, Ms. Sheeba Agwani i/b Dave and Girish and Co for Plaintiff Mr. S.R. Rajguru for GOI CORAM : DR. D.Y. CHANDRACHUD, J DATE : 13th APRIL, 2009. P.C.: 1. The subject matter of the Chamber Summons is a factory building situated on Plot No. 18 of the Special Economic Zone (SEEPZ) at Andheri (E), Mumbai. A warrant of attachment has Rma CHS153706130409.sxw 2 been levied thereon by the Plaintiff in execution of a decree that was passed on 16.06.2004 in a Summary Suit instituted under Order 37 of the Code of Civil Procedure. The Chamber Summons has been taken out by Suresh Jewellery Private Limited seeking lifting of the warrant of attachment and for setting aside of the execution proceeding in relation to the factory building situated on Plot No. 18 and / or Plot no. 18 of SEEPZ. 2. The land on which the property in question is situated was leased out originally by the MIDC to the Development Commissioner, SEEPZ on 20.01.1975. The Development Commissioner (the 2nd Respondent) executed a sub-lease in favour of the 1st Defendant to the suit in 1984. The 1st Defendant was allotted Unit No. 18 for a period of 30 years. On 17.04.1984, the Plaintiff filed a Summary Suit under Order 37 of the Civil Procedure Code; the claim therein being in the amount of US $ 196,000. Unconditional leave to defend the suit was granted to the Defendants. The suit was pending before this Court and it is an admitted fact that there was no injunctive order of attachment Rma CHS153706130409.sxw 3 therein. 3. On 20.03.2003, the 1st Defendant applied to the Development Commissioner for closure of the unit and transferred the property to the Applicant. On 22.03.2003, the Applicant applied to the Development Commissioner for setting up of a unit in Export Processing Zone. On 31.03.2003, the Development Commissioner granted permission to the Applicant to establish a business on the said plot. On 09.04.2003, the 1st Defendant executed a Deed of Assignment in favour of the Applicant for a consideration of Rs. Two Crores. The Development Commissioner addressed a letter to the Applicant On 11.04.2003 stating that a decision had been taken to allot the plot to the Applicant. Possession of the plot was given to the Applicant on 17.04.2003. A sub-lease was executed between the Applicant and the Development Commissioner on 21.04.2003. Upon adjudication of the stamp duty, a sub-lease was executed between the Applicant and the President of India on 12.05.2003 which was registered with the Sub-Registrar on Rma CHS153706130409.sxw 4 03.06.2003. 4. In July 2003, the Plaintiff had taken out a Notice of Motion for attachment before the judgment of (i) the machineries lying at SEEPZ and (2) a flat at Maker Tower “A” with which these proceedings are not concerned. At this stage, it would be necessary to take a note of the fact that in the affidavit in support of the Notice of Motion, there was a statement that the 1st Defendant had already sold its factory premises at SEEPZ to the Applicant. In fact, it was also averred that the machinery and the flat constitute the only assets of the 1st Defendant. Another Notice of Motion was thereafter taken out in August 2003 inter alia seeking security in amount of US $ 8,85,05 and seeking attachment of certain machineries lying at SEEPZ and of the flat in Maker Tower “A”. On 07.08.2003, an ad-interim order was passed by a learned Single Judge of this Court in terms of prayer clause (c) of the Notice of Motion. Prayer Clause (c) of the Notice of Motion related to the machinery and to the property at Maker Tower “A”. Admittedly, there was no injunctive order Rma CHS153706130409.sxw 5 either in respect of plot No. 18 or the structure standing thereon. 5. The Summary Suit in which the 1st Defendant was granted unconditional leave to defend was transferred to the list of Commercial causes and was decreed on 16.06.2004 in the sum of US $ 7,69,832.22 together with interest on the principal sum of US $ 1,96,000 at 12% p.a from 01.05.2006. On 16.11.2006, a warrant of attachment was served and executed in respect of right, title and interest in the property described in clause (c) of the schedule, namely, the factory building situated on Plot No. 18 at SEEPZ, Mumbai. 6. On behalf of the Applicant, it has been submitted that the Applicant has acquired the right, title and interest of the 1st Defendant both in respect of the land as well as the super structure thereon by a registered Deed of Lease dated 12.05.2003. The learned counsel submitted that during the pendency of the suit, that was instituted by the Plaintiff against the 1st Defendant, there was absolutely no order of restraint in Rma CHS153706130409.sxw 6 respect of the land comprising of Plot No. 18 or the structure standing thereon. The two Notices of Motion that were taken out by the Plaintiff in July and August 2003 proceeded on the basis that the 1st Defendant had already alienated its interest in the land comprising of Plot No. 18 in SEEPZ and it was on that basis that an injunction was sought and granted only in respect of machinery which was lying in bonded warehouse of a flat at Maker Tower. Hence, it was submitted that much prior to the decree that was passed on 16.06.2004, the Applicant has perfected its title in respect of the land and in respect of the building situated on Plot No. 18. 7. On the other hand, it has been urged on behalf of the Judgment-Creditor that the Deed of Assignment that was executed by the 1st Defendant in favour of the Applicant on 12.04.2003 was not registered. The Counsel submitted that under the indenture of the lease executed by the President of India in favour of the Applicant, what is conveyed is the leasehold interest in the land comprising in flat no. 18 and not in respect of Rma CHS153706130409.sxw 7 the building standing thereon. The Applicant would acquire no interest in respect of the building constructed on Plot No. 18 since it was sought to be conveyed under a Deed of Assignment that was not registered. Finally, it was submitted that possession was handed over by the Development Commissioner to the Applicant much prior to the execution of the lease on 21.04.2003. The entire transaction, it is submitted proceeded with undue haste which would cast doubt on the bonafides of the SEEPZ authorities. 8. The material which has been placed on the record before the Court would show that the claim of the Applicant arises out of and is based on the sub-lease executed in its favour on 12.05.2003. The sub-lease is executed between the President of India as a sub-lessor and the Applicant as a sub-lessee. The Union of India had acquired originally a sub-lease of land from MIDC. Clause 1 of the Indenture of Lease in favour of the Applicant reads as follows : “(A) In consideration of the premises and of various Rma CHS153706130409.sxw 8 facilities and a variety of concessions made available to the Sub-Lessee and the concessional rent hereby reserved and of the convenants and agreements on the part of the Sub-Lessee hereinafter contained the Sub-Lessor doth hereby demise ALL that piece of land known as Plot No.18 in SEEPS forming part of Survey No...... within the village limits of Vyawall, Parjapur, Kondivitta Taluka Andheri District Bombay Sub-Registration No. Sub-District and Registration District Bombay City contained by admeasurememt 4000 square metres or thereabout and herein after referred to as the said premises, and more particularly described in the Second Schedule hereunder written TOGETHER with the buildings and structures now or at any time standing and being thereon Excepting and Reserving into the lessor all mines and minerals in and under the said land or any part thereof. TO HOLD the said premises hereunder expressly demised into the Sub- Lessee for the term of 30 years computed from the 1st day of ... paying therefore the yearly rental during the said term into the Sub-Lessor through.... or as any be otherwise required by the Sub-Lessor the said yearly rent of Rs.... in advance being the concessional rent by the Sub-Lessor without any deductions whatsoever;” (emphasis applied) From Clause (1) of the Indenture of lease, it is evident that Rma CHS153706130409.sxw 9 the subject matter was not merely the land comprising of Plot No. 18 but the building and the structures thereon as well. The learned counsel for the Plaintiff sought urge that the subject matter of the lease, more particularly described in Schedule (2) is only the land comprising of Plot No. 18 and not the building and the structures. Ex facie, this submission is not borne out by Clause (A) of lease deed. Clause (A) covers the land in Plot No. 18, more particularly described in the second schedule “together with the building and structures now or at any time standing and being thereon”. Much prior to the decree that was passed in the Summary Suit, on 16.06.2004, the Applicant had acquired the right, title and interest as a sub-lessee from the President of India in pursuance of a registered indenture of lease. The sub-lease that was executed in favour of the Applicant was sent for adjudication of the stamp duty on 21.04.2003. On receipt of the sub-lease on 08.05.2003, an indenture of lease was executed on 12.05.2003 which was registered with the Sub-Registrar on 03.06.2003. All these events took place much prior to the decree that was passed by this Court on 16.06.2004. There is no Rma CHS153706130409.sxw 10 material to indicate that the transaction was intended to defeat the rights if any in favour of the Plaintiff. Unconditional leave had been granted to defend the suit and during the pendency of the suit, there was no restraint on alienation. The transaction was for consideration. In the absence of an order of attachment, the embargo contained in Section 64(1) of the CPC would not come into effect. In fact, it is also material to note that after the amendment of 2002, Sub-Section 2 provides that nothing in the Section will apply to a private transfer or delivery of property or of any interest therein made in pursuance of a contract for transfer or delivery entered into and registered before the attachment. In this case, in any event, there was no order of attachment in the suit prior to the transaction with the Applicant. The circumstance that the possession was handed over to the Applicant on 17.04.2003, in anticipation of the execution of a formal indenture of sub lease is not a circumstance which by itself would invalidate the transaction. In the circumstances, the Chamber Summons would have to be allowed and is accordingly made absolute in terms of Prayer Clauses (a) and (b). Rma CHS153706130409.sxw 11 9. There shall be an order accordingly. (DR. D.Y. CHANDRACHUD, J) Rma CHS153706130409.sxw 12 Rma CHS153706130409.sxw 13 Rma CHS153706130409.sxw 14 Rma CHS153706130409.sxw 15 Rma CHS153706130409.sxw 16 Rma CHS153706130409.sxw 17 Rma CHS153706130409.sxw 18 Rma CHS153706130409.sxw 19 Rma CHS153706130409.sxw 20 Rma CHS153706130409.sxw 21 Rma CHS153706130409.sxw 22 Rma CHS153706130409.sxw 23 Rma CHS153706130409.sxw 24 Rma CHS153706130409.sxw 25 Rma CHS153706130409.sxw 26 Rma CHS153706130409.sxw 27 Rma CHS153706130409.sxw 28 Rma CHS153706130409.sxw 29 Rma CHS153706130409.sxw 30 Rma CHS153706130409.sxw 31 Rma CHS153706130409.sxw 32 Rma CHS153706130409.sxw 33 Rma CHS153706130409.sxw 34 Rma CHS153706130409.sxw 35 Rma CHS153706130409.sxw 36 Rma CHS153706130409.sxw 37 Rma CHS153706130409.sxw 38 Rma CHS153706130409.sxw 39 Rma CHS153706130409.sxw 40 Rma CHS153706130409.sxw 41 Rma CHS153706130409.sxw 42 Rma CHS153706130409.sxw 43 Rma CHS153706130409.sxw 44 Rma CHS153706130409.sxw 45 Rma CHS153706130409.sxw 46 Rma CHS153706130409.sxw 47 Rma CHS153706130409.sxw 48 Rma CHS153706130409.sxw 49 Rma CHS153706130409.sxw 50 Rma CHS153706130409.sxw 51 Rma CHS153706130409.sxw