1 ca 307-10-cp 166-10.sxw IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY APPLICATION NO.307 of 2010 IN COMPANY PETITION NO.166 OF 2002 Board for Industrial and Financial Reconstruction …Petitioner And: Admiral Radhakrishin H. Tahiliani (I.N.Retd.) & Anr. …Applicants Versus Official Liquidator High Court, Bombay of Modistone Ltd. (in Liquidation) and Ors. …Respondents Mr. F.E. DeVitre, Sr. Counsel along with Mr. J.P. Sen i/b M/s. Federal & Rashmikant for the Applicants The Official Liquidator, Respondent No.1 present. None for Respondent No.2. Mr. U.J. Makhija i/b Mulla & Mulla Craigie Blunt & Caroe for Respondent No.3 Mr. A.H. Nagi for Mr. Vali Mohammad Ruffin Saldin, on notice. CORAM: S.J. KATHAWALLA, J. DATE: 17 th September, 2010 P.C. 1. By this Application the Applicant has, inter-alia, prayed for a direction to the Official Liquidator to take forcible possession of premises which were leased in the year 1965 to Modistone Ltd.(then Fire Stone Tyre and Rubber Co. India Pvt. Ltd.) (the Company in liquidation) by one Shri Kimat 2 ca 307-10-cp 166-10.sxw Sanwalsingh Khushlani (whose estate is now represented by Applicant No.1). The leased premises consist of Godown Nos. 3, 4, 5, 6 and 7 and four bays admeasuring about 19,000 sq.ft. situate on a plot of land bearing No. 3 on the old R.R. No. 1744 admeasuring 3492.78 sq. mts. or thereabouts situate at Mazgaon Sewree Reclamation Estate, C.S. No. 380/145 of Parel –Sewree Division, Fosbery Road, Mumbai – 400 015 (“the said premises”). The Company Modistone Ltd. was ordered to be wound up by an order of this Court dated 25 th July, 2002. It is not in dispute that pursuant to orders of this Court, the Official Liquidator took physical possession of the said premises in the occupation of Modistone Ltd. (in liquidation) on or about 13 th May 2003. The said premises are part of larger premises, the rest of which were leased to one Khimji Poonja & Sons by the original lessee in or about 1952. This Application is not in respect of the premises leased to Khimji Poonja & Sons. 2. Applicant No.1 is the surviving executor and Trustee appointed under a Will dated 15 th May 1966 of the said Shri Kimat Sanwalsingh Khushlani who was the original lessee of the Mumbai Port Trust (MbPT) in respect of the plot of land on which the aforementioned godowns and bays stand under an Indenture of Lease dated 14 th January, 1952. 3 ca 307-10-cp 166-10.sxw 3. As stated above, in or about 1965, the said premises were given on Lease by the said Khushlani to Modistone Ltd., the Company in liquidation (then Fire Stone Tyre and Rubber Co. India Pvt. Ltd.). 4. The lease in favour of the said deceased in respect of the said plot of land expired in 1976 and thereafter, by their Advocate’s notice dated 23 rd January 1982, the MbPT appears to have terminated the tenancy in respect of the said plot and called upon the Trustees under the Will, (the said Khushlani having expired in the meanwhile) to hand over vacant and peaceful possession of the plot. 5. In about 1985, the MbPT filed a suit, being L.E.& C. Suit No.31/38 of 1985 before the Small Causes Court at Bombay against the said Trustees for recovery of possession of the said plot. Applicant No.1 has stated that in fact, prior to the Suit and during its pendency, he had offered to the MbPT to surrender the said premises and requested a waiver of past dues. This was not acceptable to the MbPT. The Suit was partly decreed on 6 th September 2008. The Appeal filed by Applicant No.1 against the said Judgment was dismissed on 18 th January 2010, as the Appellant’s application for condonation of delay was rejected by the Division Bench of the 4 ca 307-10-cp 166-10.sxw Small Causes Court. The MbPT has filed Execution Application No.706 of 2009 in the Small Causes Court at Mumbai for executing the decree dated 6 th September, 2008. The said Execution Application relates also to the premises which were partly leased to Khimji Poonja & Sons by the Trustees, as well as to the said premises leased to the Company in liquidation as above. 6. The Applicants have alleged in the Company Application that whilst the said Execution proceedings were pending, they learnt in about March 2010, that a “suit” was purportedly filed in the name of Applicant No.1 in the Small Causes Court at Mumbai and that a third party was claiming to be in occupation of the said premises. Applicant No.1 states that he obtained photocopies of documents purporting to be pleadings in L.D. Suit No.326 of 2008 in the Small Causes Court apparently instituted in his name againstone “Nizammuddin qAbdul Andheriwalla” (Respondent No.2 in this Company Application) as the Defendant. The Plaint was purported to have been filed by Applicant No.2, who is Applicant No.1’s son, on behalf of Applicant No.1 as his constituted Attorney. The “Plaint” is based on an alleged Leave and License Agreement dated 20 th March 2007 alleged to have been entered into between Applicant No.1 and the said Andheriwalla. It is the Applicants’ 5 ca 307-10-cp 166-10.sxw case in the Company Application that no such Agreement was ever executed, that they have never known or dealt with any person by the name of Andheriwalla and that no such suit was ever instituted by them or plaint signed by them and that the said alleged ‘Leave and Licence Agreement’ dated 20 th March 2007 as also the plaint in the said suit are fictitious documents. 7. The Applicants further state that search in the records of the Small Causes Court revealed that the Vakalatnama on behalf of the Plaintiff in the suit had been filed by one M/s. R.K. Associates and the plaint signed by Mr. Rajan V. Pillai as Advocate for the Plaintiff. The Applicants claim that neither of them have filed or signed any Vakalatnama in favour of the said R.K. Associates or Mr. Rajan V. Pillai. A perusal of the papers and proceedings in the suit also revealed, that the “suit” had been disposed off by an Order dated 11 th June 2009 in terms of Consent Terms of the same date tendered by the parties. These consent terms allegedly confirmed the purported “possession” of the said Andheriwalla in the said premises. 8. It is the Applicants’ case that the said Suit and the proceedings therein are a fraudulent attempt to interfere with the possession of the Official Liquidator in respect of the said premises and to lend a garb of legality to the purported 6 ca 307-10-cp 166-10.sxw “possession” of the said Andheriwalla over the premises. Para 9 of the affidavit in support of the application sets out facts relating to the said alleged “suit” and “consent decree”. Though notices were served on Respondent No.2, the said Andheriwalla on more than one occasion, calling upon him to appear in the present proceedings, he has not appeared. The facts stated by the Applicants are not disputed by any of the parties. MbPT was joined as party Respondent No.3 and has filed an affidavit dated 4 th September, 2010 wherein it is stated inter alia, that execution of the decree was “obstructed” on 28 th July, 2010 by Khimji Poonja & Sons and by one “Vali Mohammed Ruffin Saldin”. This Court is not dealing with the claims of Khimji Poonja & Sons which relate to another part of the said premises. However, so far as Vali Mohammed Ruffin Saldin is concerned, notice was given to him to appear in these proceedings. He entered appearance though an Advocate on 16 th September, 2010 and claimed to be a ‘tenant’ of the said premises, in occupation for the past several years. The matter was placed in the afternoon at 3 0’ clock to enable him to produce any rent receipt or other documents in support of his alleged tenancy. When the matter was called out in the afternoon the said Saldin did not remain present as directed but sought time through his Advocate on the ground that the necessary papers pertaining to the disputed premises had been 7 ca 307-10-cp 166-10.sxw given by him to someone in the Small Causes Court. His Advocate, however, had no instructions as to whether his client had filed or is intending to file any proceedings in the Small Causes Court. The matter was accordingly adjourned to the 17 th September, 2010 at 3.00 p.m. when the said Saldin was directed to remain present in Court with all the necessary papers in support of his plea of tenancy and of his claim that he is in possession of the disputed premises for the last several years. On 17 th September, 2010, when the matter was called out Mr. Nagi, Advocate who had entered appearance on behalf of the said Saldin reported that he had no instructions from his client and that despite being informed of today’s hearing, his client had not come to Court. He also expressed his inability to contact his client and sought a discharge, which was granted. The fact remains that despite being directed to remain present and being given an opportunity to produce the rent receipts, the said Saldin has failed to do either. The only inference possible from his conduct is that he is deliberately avoiding appearing before this Court. As such prima facie, there is no material at all to support the plea of alleged “tenancy”. In any event, even assuming the correctness of what is claimed by the said Saldin, it is clear that his “occupation” of the said premises is after the Official Liquidator took physical possession of the said premises in May 2003. The Minutes of the Official Liquidator dated 8 ca 307-10-cp 166-10.sxw 13-5-2003 recording possession (Exhibit ‘A’ to the Official Liquidator’s Affidavit dated 2 nd June, 2010) does not make any mention of the presence of the said Saldin on the said premises. The said Minutes show that the said premises were locked and sealed by the Official Liquidator in the presence of the Company’s Officers, after possession was taken. That being so, it appears clear that even if the Court accepts Saldin’s claim, it is a clear case of interference with the possession of the Official Liquidator which cannot be countenanced by the Court. 9. It is in these circumstances that the Applicants seek a direction from this Court to the Official Liquidator to take forcible possession of the said premises. The said Andheriwalla, who is Respondent No.2 in the Company Application has been served, but has not entered appearance or controverted the allegations in the Company Application. The MbPT , Respondent No.3 in the Company Application, has filed an Affidavit inter alia, supporting the prayer in the Company Application that forcible possession of the said premises be taken by the Official Liquidator. It appears from the uncontroverted statements in the Company Application that the Official Liquidator’s possession of the said premises has been interfered with by recourse to a fraudulent devise of filing a fictitious suit and obtaining a ‘consent decree’ therein. The facts reveal an extremely 9 ca 307-10-cp 166-10.sxw disturbing state of affairs which directly affects the administration of justice in the Small Causes Court. Pursuant to orders of this Court in this application, the papers in the said “suit” in the Small Causes Court have been deposited with the Prothonotary and Senior Master in a sealed envelope. These papers shall be retained in the sealed envelop with the Prothonotary & Senior Master, High Court Bombay subject to further directions of the Court. It is clear that the possession of the Official Liquidator in respect of the said premises has been wrongfully interfered with under the guise of legal proceedings which plainly appear to be fraudulent, in the light of the uncontroverted facts. 10. Having regard to the facts of this case, it would be necessary for this Court to ascertain the correct position relating to the filing of the said “suit”, in the Small Causes Court, independently of the present application for directing forcible possession. In paragraph 15 of the affidavit in support of the above application, the Applicants have averred as under :- “The Applicants submit that the Advocates whose names appear on the record of the Court proceedings are duty bound to explain to this Hon’ble Court, the circumstances relating to the filing of a completely fictitious suit using the name of the Applicants and entering into ‘consent terms’ therein. This Hon’ble Court be pleased to issue 10 ca 307-10-cp 166-10.sxw such notices to the said Advocates as is deemed fit and proper.” 11. This court is of the view that such notice to the Advocates is necessary in the interests of justice and to ascertain the correct factual position. 12. In these circumstances, the following order is passed disposing of the present application: (a) The Official Liquidator shall forthwith take forcible possession of the said premises, viz. Godown Nos.3, 4, 5, 6 and 7 and four bays admeasuring about 19,000 sq.ft. situate on plot of land bearing No. 3 on the old R.R. No. 1744 admeasuring 3492.78 sq. mts. or thereabouts situate at Mazgaon Sewree Reclamation Estate, C.S. No. 380/145 of Parel – Sewree Division, Fosbery Road, Mumbai – 400 015 if necessary with police assistance. (b) The Senior Inspector, Sewree Police Station is directed to provide the necessary assistance on being requested to do so by the Official Liquidator. 11 ca 307-10-cp 166-10.sxw (c) The Official Liquidator shall thereafter forthwith hand over possession of the said premises to the MbPT, notwithstanding the pendency of the Execution Application in the Small Causes Court. (d) The office shall issue Notice with a copy of the present Company Application and a copy of this order to (i) Mr. Rajan Pillai, Advocate , (ii) M/s. R.K. Associates Advocates and (iii) Mr. Ashok Goel Advocate who appeared in Suit No. 326 of 2008 in the Small Causes Court. Notice shall be returnable on 27 th October, 2010. The Advocates for the Applicants shall furnish to the office the address of the said Advocates appearing from the documents on record. (e) The papers pertaining to the “Suit” in the Small Causes Court deposited with the Prothonotary & Senior Master of this Court should be retained in a sealed envelope by the Prothonotary & Senior Master subject to further directions of the Court. (f) It is made clear that this Order does not deal with and shall not affect in any way the part of the 12 ca 307-10-cp 166-10.sxw premises leased to Khimji Poonja & Sons or any proceedings or rights or liabilities in regard to those premises. (g) The Company Application is accordingly disposed of ( S. J. KATHAWALLA, J.)