1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J. COURT RECEIVER’S REPORT NO.254 OF 2009 IN CHAMBER SUMMONS NO.1690 OF 2007 IN EXECUTION APPLICATION NO.199 OF 1996 IN APPEAL NO.633 OF 1991 IN ARBITRATION PETITION NO.111 OF 1990 IN AWARD (LODG.) NO.80 OF 1990 IN ARBITRATION SUIT NO.2031 OF 1988 M/s. Farohar & Co. and another ..Claimants. Vs. Hemant Manohar Nabar and others ..Respondents. and Mangirish Co-op. Hsc. So. Ltd. and others ..Addl. Respondents. .... Mr. Gaurang Mehta for the Claimants. Mr. H.B. Takke i/b Mr. Milind More for Mangirish CHS Ltd. Mr. G.G. Ketkar, First Assistant to the Court Receiver present. .... CORAM : DR. D.Y. CHANDRACHUD, J. 1st October, 2009. 2 P.C. : 1. The report of the Court Receiver has been presented in pursuance of the order passed by Hon’ble Mr. Justice S.C. Dharmadhikari on 15th December, 2008 in Chamber Summons 1690 of 2007. The order of this Court records that it is an undisputed position that 14 flats are in the possession of the Court Receiver. Of these flats, seven are to be handed over to the Claimants while seven are to be retained by the co-operative society. All the 14 flats, as noted by the Court, were incomplete and unfit for occupation. Before this Court, the co-operative society had sought a further and last opportunity to make the flats ready for occupation atleast insofar as the Claimants are concerned. The society stated that it was agreeable that the seven flats which were to be handed over to the Claimants should be completed first and that this could be done through a contractor / architect appointed by the society. A statement was made by the learned advocate appearing on behalf of the co-operative society and by the contractor who was present in the Court that the contractor would complete the incomplete work by 30th May 2009 and would handover seven flats which are earmarked for the Claimants to them. An 3 amount of Rs.7.50 lacs has already been deposited by the co-operative society with the Court Receiver. This Court, however, directed that the contractor would be allowed to take up the assignment only after he submitted an undertaking of compliance on or before 5th January, 2009. This Court observed that if the contractor fails to furnish the undertaking, the Receiver shall appoint a person / agency to complete the incomplete work and handover the seven flats to the Claimants. Moreover, there was a direction to the effect that all costs, charges and expenses incurred for the same shall be paid by the society and the society shall put the Court Receiver in additional funds in case the Receiver is unable to complete the work with the funds already at his disposal. The Court also directed that the Court Receiver in the event of default by the society could seek appropriate directions from the Court for the disposal of seven flats which were made for the society. In other words, in case the society defaulted in completing the work of the flats earmarked for the Claimants or if the society did not put the Receiver in funds after the amount is found to be inadequate and insufficient, the Court Receiver was at liberty to seek appropriate directions including for the disposal of the seven flats 4 earmarked for the society. 2. Before this Court it is an admitted position that the contractor earmarked by the co-operative society failed to file an undertaking before this Court on or before 5th January, 2009 as directed and in fact filed no undertaking at all. The submission which was made by the co-operative society to the effect that the seven flats which are earmarked for the Claimants would be completed on or before 30th May, 2009 and that they would be handed over by that date has not been fulfilled. The Co- operative Society thus manifestly failed to comply with the statement which was made before this Court on 15th December, 2008. In terms of the previous order the Court Receiver is now at liberty to appoint another agency to complete the incomplete work. The society is also under an obligation under the previous order to place the Receiver in possession of additional funds should these be required for completing construction. 3. The Court Receiver has obtained an estimate of the expenses required to be incurred for completing the balance work of the seven flats 5 which are to be allotted to the Claimants. The estimate has been obtained from Build Craft Associates, a contractor empanelled by this Court. The estimate is that the balance work would entail an expenses of Rs.40,64,984/-. After giving due allowance for the fund already lying in deposit, the Court Receiver had prayed for a direction that the co- operative society should deposit a sum of Rs.33,14,984/- as expenses to be incurred for completing the seven flats to be allotted to the Claimants. 4. An affidavit in reply has been filed on behalf of the co-operative society. However, at the hearing the only point which has been urged is that the estimate of the empanelled contractor is on the higher side and the contractor has not indicated his rate separately for labour and materials. There is no basis or justification for the Court to disregard the estimate which has been furnished by the empanelled contractor. This is particularly in view of the circumstance that the estimate was forwarded by the Court Receiver to the architect and upon scrutiny, has been found to be fair and proper. By a communication dated 4th June, 2009, M/s. Nadkarni & Co., the architect, stated that its representative had visited 6 the site with a representative of the contractor, inspected the seven flats in which the balance work is to be carried out and verified the item rates in the estimate submitted by the contractor. The estimate is found to have been reasonable. The society has had more than an ample opportunity to carry out the balance work and has manifestly failed to abide by its own statements made to the Court on 15th December, 2008. 5. In these circumstances, the Court Receiver’s Report is disposed of with the following directions : i) The co-operative society – Mangirish Co-op. Housing Society Limited shall deposit an amount of Rs.33,14,984/- with the Court Receiver towards the balance amount required to be expended to complete the seven flats viz. Flat Nos.601, 602, 603, 604 in A Wing and 701, 702 and 704 in B Wing on or before 27th November, 2009; ii) In the event that the co-operative society fails to do so, the Court Receiver is permitted to realise the amount required, as aforesaid, by proceeding to sell the seven flats which belong to the co- 7 operative society by public auction and to utilise the sale proceeds, to the extent of the amount mentioned in (i) above for completing the balance of the work in the seven flats required to be allotted to the Claimants; iii)In the event of any surplus remaining in his hands, the Receiver shall submit a further report for directions. The report of the Court Receiver is accordingly disposed of. *****