1 Mgj IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION Court Receiver s Report No.114 of 2009 in Suit No.3636 of 2000 Onkar Singh Kalra ..Plaintiff vs. Hazoor Singh Kalra ..Defendant Mr.S.R.Soudagar for plaintiff Mr.N.V.Moye for defendant Mr.K.L.Vyas Court Receiver present Order reserved on 16th June 2009 Order pronounced on: 10th July 2009 CORAM: S.J.KATHAWALLA J. 10th July, 2009 P.C. 1 By this report the Court Receiver has submitted as follows: i) Plaintiff and defendant are brothers. Plaintiff and defendant are equal owners of the immovable property, namely, Belle Vue, Gladys Chamber and Gladys Chamber 2 Annexe situated at Mahim (the said property.) Under consent terms dated 20th November, 2007 plaintiff and defendant agreed to bid for the said property and further agreed that the higher bidder will become 100% owner of the suit property by paying 50% of the bid price to the co-owner whose bid is lower than the other. ii) The bid of the defendant Hazoor Singh Kalra of Rs.3,75,00,000/- (Rupees Three Crores Seventy five lacs) was higher than that of the plaintiff s bid. In view thereof the defendant deposited an amount of Rs. 1,87,50,000/- with the Court Receiver s Office being 50% of the sale price of the said property. iii) By an order of this Court dated 21st April, 2008 the sale in respect of the said property was confirmed in favour of the defendant in the sum of Rs.3,75,00,000/- 3 iv) The said amount of Rs.1,87,50,000/- was to be retained by the Court Receiver and pay the same to the plaintiff forthwith upon a conveyance being executed in favour of the defendant. The said sum of Rs.1,87,50,000/- was deposited with a Nationalised Bank by the office of the Court Receiver. v) A sum of Rs.7,09,429.47 is lying with the Court Receiver which include interest amount of Rs.6,39,700/- received on the said sum of Rs.1,87,50,000/- Excluding the Commissioner s charges and expenses the balance with the Court Receiver is of Rs. 6,05,000/- as on 13th March, 2009. vi) Since both the parties i.e. the defendant and the plaintiff called upon the Court Receiver to hand over the interest amount to them, in the meeting with the Court Receiver held on 18th March, 2009 it was decided to submit a report to this Court, seeking necessary directions. The Court 4 Receiver has, therefore, sought directions as regards the disbursement of the interest amount lying with the Court Receiver. 2. The learned Advocate for the plaintiff has submitted that under clause 5 of the consent terms dated 20th November, 2007, the parties have by consent provided that the Court Receiver shall retain with him the amount deposited by the auction purchaser till the conveyance is executed in favour of the auction purchaser and thereafter he shall pay the same to the other party forthwith. It is submitted that though there was no direction for the amount to be invested, yet, the Receiver took a wise decision of investing the said amount because of which interest has accrued thereon. It is submitted that since the plaintiff is entitled to receive the amount of Rs.1,87,000/- deposited by the defendant surely the plaintiff is also entitled to receive the interest accrued 5 thereon and the defendant cannot be heard to say that he is entitled to the interest accrued on the amount which was admittedly retained by the Court Receiver to be ultimately handed over to the plaintiff. It is submitted by the learned Advocate for the plaintiff that the plaintiff is not responsible for any delay in handing over the original documents pertaining to the property and the delay was caused because the documents were in the office of the Sub- Registrar of Assurance. It is pointed out that the plaintiff has by his Advocate s detailed letter dated 5th September, 2008 recorded the correct facts in the matter including the decision taken at various meetings held before and after the auction that the defendant will collect the documents from the office of the Sub-Registrar of Assurance for which the plaintiff had no objection. In fact, it was also decided in 6 the meeting before the Court Receiver that the Court Receiver will issue a letter authorizing the defendant to collect the documents. 3 The learned Advocate for the defendant has inter alia submitted that the defendant has admittedly deposited the sale consideration as agreed under the consent terms and the additional terms of sale. However, the plaintiff failed to hand over the original documents to the Court Receiver as agreed under Clause 6 of the Consent Terms, because of which the defendant did not get possession of the property and the conveyance which was to be executed not later than eight weeks after the auction also got delayed. Ultimately possession of the property was handed over to the defendant after a delay of 8 months, for which the defendant had deposited the huge amount within the specified time. It is submitted 7 that the plaintiff has violated Rule 520 of High Court (O.S.) Rules which provides for production of all documents relating to the property to be sold in possession or power of any of the parties with the Commissioner. It is submitted that the defendant has incurred heavy expenditure to arrange for the said amount and keep it blocked in the office of the Court Receiver for a period of more than 8 months. It is, therefore, submitted that such amount of interest be ordered to be paid to the defendant as he is entitled to it in law and as per the practice of trade and commerce. 4 I have gone through the terms/clauses of the Consent Terms and the Additional terms and conditions of the auction sale. I have also considered the arguments advanced by the learned Advocates appearing for the plaintiff as well as defendants. Clause 5 of the Consent Terms 8 specifically provides that the Court Receiver shall retain with him the amount deposited by the defendant (auction purchaser) till the conveyance is executed in favour of the auction purchaser and thereafter the Court Receiver shall pay the same to the plaintiff (other party) forthwith. The amount deposited by the defendant with the Court Receiver was Rs.1,87,50,000/- The said amount was the plaintiff s exclusive 50% share of sale consideration of the suit property which became due to the plaintiff immediately upon it being deposited by the defendant with the Court Receiver (ofcourse subject to the confirmation of sale by this Court) However, the same was to be retained by the Court Receiver only to ensure that the plaintiff ultimately executed the conveyance in favour of the defendant. If the Court Receiver in his wisdom invested the plaintiff s share in fixed deposits , the 9 plaintiff is the only person who would be entitled to receive the said amount along with the interest accrued thereon and the defendant cannot be heard to say that since the words used in clause 5 are ....the Court Receiver shall pay the same would mean only Rs.1,87,50,000/- and not the interest accrued thereon. The consequences for delay if any in handing over documents or executing conveyance is not provided in any of the terms and the claim made by the defendant inter alia on the ground of alleged delay caused by the plaintiff is in the nature of damages and cannot be decided by way of Court Receiver s report. 5 Even otherwise the allegation of the defendant that the plaintiff is solely responsible for delay in handing over the documents to the Court Receiver is lacking in merits for the following reasons. i) Under clause 6 of the Consent Terms, 10 it was agreed that the Court receiver shall take possession of all the original documents and other papers of the suit property from the other party who does not bid highest and hand over the same to the successful bidder before execution of the conveyance. Under the said clause the Court Receiver was, therefore, to take possession of the documents after the auction. It is the defendants case after the auction that the original documents are with the plaintiff and it is the plaintiff s case that the documents are to the knowledge of the defendant with the office of Sub Registrar of Assurance. The fact remains that though both the plaintiff and the defendant were aware that the original documents were not in their respective possession both of them agreed under clause (6) of the Consent Terms to give possession of the original documents to the Court Receiver upon the other party being the 11 successful bidder. The only inference that can be drawn therefrom, is that both the plaintiff and the defendant were aware at the time of signing of the Consent Terms that the original documents/title deeds pertaining to the property were with the Registrar of Assurance. Since the papers were not in possession of parties the question of violation of Rule 520 of High Court (O.S.Rules) does not arise. ii) Under clause 9 of the Consent Terms it is agreed that the Court Receiver shall hand over possession of the suit property with all documents and papers thereof to the successful bidder on completion of auction sale or on his receiving the amount referred to in clause (4) above from the successful bidder. The amount referred to in clause four (4) above was received by the Court Receiver from the defendant by 27th March, 2008. Clause (h) of the additional terms 12 provides that the conveyance should be executed in favour of the auction purchaser as soon as the preconditions of the same are fulfilled by the parties as provided in the consent terms but not later than eight weeks after the auction. The period of eight weeks after the auction expired on 23rd April, 2008. Handing over possession of the property and the title deeds before 27th March, 2008 to the defendant was, therefore, not dependent on execution of conveyance. In fact, the conveyance was executed on 1st October, 2008 and registered on 21st October, 2008 without documents being obtained from the office of the Sub Registrar of Assurances. Therefore, the defendant immediately after the sale was confirmed by this Court on 21st April, 2008 could have asked for possession of the suit property (pending receipt of documents from the office of the Sub Registrar of Assurances). However, 13 no such application was made despite Liberty to the parties to apply having been specifically provided in the Consent Terms. iii) Again in the letter dated 28th August. 2009 written by the learned Advocate for the defendant to the Court Receiver (which is the first letter in the compilation of documents relied upon by the defendant) it is the case of the defendant himself that to facilitate collection of the said documents the Advocate of the plaintiff suggested that on behalf of the plaintiff the Court Receiver should authorise the defendant to collect the said documents from the Sub Registrar s office and the defendant was ready to do so, but the plaintiff failed to give full information to the defendant as to why the said documents are not collected till date and the defendant apprehended that there might be some hitch created by the plaintiff to harass and inconvenience the defendant. 14 This shows that the defendant was also working at leisure. If he would have been genuinely interested in promptly getting the documents, he would have approached the office of the Sub Registrar of Assurance as suggested by the plaintiff and found out for himself if any problem/hitch existed in respect of the said documents. It appears from the subsequent paragraphs that the defendant wanted to get the documents from the office of the Sub Registrar of Assurance only after obtaining an affidavit from the plaintiff which further delayed the process. 5 Under the circumstances, I pass the following order: i) The Court Receiver shall hand over the interest amount to the plaintiff. ii) After disbursement of the interest amount the Court Receiver shall stand discharged without passing accounts. However, the costs, charges and expenses of the Court 15 Receiver including the cost of this report shall be paid by the plaintiff. 6) At the request of the learned Advocate for the defendant the order is stayed for a period of two weeks from today. (S.J.KATHAWALLA J.)