Utkarsh 1.crr.162.2021.

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Digitally
signed by IN THE HIGH COURT OF JUDICATURE AT BOMBAY
UTKARSH
UTKARSH KAKASAHEB
KAKASAHEB BHALERAO
BHALERAO Date:
2023.03.18
ORDINARY ORIGINAL CIVIL JURISDICTION
13:21:51
+0530

COURT RECEIVER REPORT NO.162 OF 2021

IN
SUIT NO.695 OF 2012

Labh Singh Daya Singh .. Plaintiff

Versus
Kurian Thomas & Ors. .. Defendants

Mr.Mayur Khandeparkar a/w Vikramjit Garewal, Umesh Tawari,

Rhythem Rathod & Vrushali Shirdhankar i/b S. Ashwinkumar & Co.
LLP, for the Plaintiff.

Mr. E. A. Sasi for Defendant No.2.

Mr. Anil Anturkar, Sr. Counsel i/b Pramod Tambe, for Defendant
No.3.

Mr. E. B. Sivakumar, 1st Assistant to Court Receiver is present.

CORAM:- B.P.COLABAWALLA, J.
DATE -: MARCH 16, 2023.

P. C.

1. The above Court Receiver Report is filed seeking a following

reliefs:-

"(a) What steps the Court Receiver should take as Defendant No.2
and 3 are not willing to bid on the ground that the license fee
suggested by the Valuer is not acceptable by them.

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(b) Cost of this report be fixed at Rs.3,000/- and be directed to come

out of the funds lying in the hands of the Court Receiver.

(c) Any other directions as the Hon'ble Court may deem fit in the
matter."

2. Before I give any reasons, it would only be fair to set out

some brief facts. Suit No.695 of 2012 was filed by the Plaintiff – Labh

Singh Daya Singh against Defendant No.1 – Kurian Thomas, Defendant

No.2 – Puthenveedu Joseph Mathew and Defendant No.3 – Zainab R

Shaikh inter alia seeking a declaration that they are trespassers in respect

an area admeasuring 1,130 sq ft. (carpet area) situated on the 2nd floor of

the Building called “Singh House”, Ambalal Doshi Marg, Fort, Mumbai –

400 023 (for short the “suit premises”). A decree for possession of the

suit premises was also sought.

3. In the said suit (Suit No.695 of 2012), the Plaintiff – Owner

filed Notice of Motion No.302 of 2013 seeking a direction that pending

the hearing and final disposal of the suit, Defendant Nos. 1 to 3 be

directed to pay to the Plaintiff, monthly compensation/royalty @

Rs.3,39,000/- per month. A prayer for appointment of a Court Receiver

and injunction was also sought in respect of the suit premises.

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4. There was also another Suit, namely Suit No.717 of 2013 filed

by Defendant No.2 – Puthenveedu Joseph Mathew [being the Plaintiff

therein], against Defendant No.1 – Kurian Thomas, the Plaintiff in Suit

No.695 of 2012 – Labh Singh Daya Singh, and Defendant No.3 – Zainab

R Shaikh. In this Suit also, Notice of Motion No.987 of 2014 was filed by

Defendant No.2 – Puthenveedu Joseph Mathew seeking the appointment

of the Court Receiver in relation to the suit premises and for direction

that Defendant No.2 – Puthenveedu Joseph Mathew [the Plaintiff in Suit

717 of 2013] be put in possession of the suit premises as an agent of the

Court Receiver without the payment of royalty or on such other terms and

conditions as this Court may deem fit and proper.

5. When Notice of Motion No.302 of 2013 [in Suit No.695 of

2012] came up before this Court at the ad-interim stage, this Court, by

order dated 19th December 2011, prima facie came to the conclusion that

considering the averments in both the above Suits, it was necessary to

protect the rights of all the parties. In these circumstances, this Court

appointed the Court Receiver, High Court, Bombay, as the Receiver of the

suit premises. However, since this was only at the ad-interim stage, this

Court ordered that the Court Receiver shall appoint Defendant No.3 [in

Suit No. 695 of 2012] as his agent without the payment of any royalty or

security. The further direction passed was that till the Court Receiver

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takes possession of the suit premises, all the parties shall maintain status-

quo in respect thereof. This order further recorded that both these Notice

of Motions, namely Notice of Motion No.302 of 2013 [in Suit No.695 of

2012] as well as Notice of Motion No.987 of 2014 [in Suit No.717 of 2013]

would be heard together.

6. Thereafter, the said two Notice of Motions came up for

hearing and final disposal before this Court in the year 2019. After

hearing the parties, this Court passed a detailed order dated 4th and 5th

July 2019, the operative part of which reads as under:-

"28. ....... In view of the foregoing discussion and considering the

totality and the facts and circumstances of the case, the following
order is passed:-

(i) The ad-interim order dated 19th December,

2011 passed by this court appointing the Court
Receiver, High Court Bombay as Receiver of the
Suit Premises is confirmed;

(ii) The Court Receiver, on a date fixed by him, shall

fix an appointment calling upon defendant No.2
and 3 in Suit No. 695 of 2012 to attend his office
for the purposes of bidding. Whoever is the
highest bidder shall be appointed as the Agent
of the Court Receiver on the payment of royalty
which will form the subject-matter of the bid,
but without the payment of any security. The
successful bidder shall then execute the Agency
Agreement with the Court Receiver;

(iii) The royalty collected by the Court Receiver shall

be kept by the Court Receiver and be subject to

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further orders that may be passed in the Suit;

(iv) In the event the successful bidder (namely

defendant No.2 or defendant No.3, as the case
may be) commits two defaults [not
consecutive] in the payment of the royalty, or in
executing the Agency Agreement, the Receiver
shall then dispossess the said Agent and file a
report in this Court for further action to be
taken with reference to the suit premises;

(v) In addition to the appointment of the Court

Receiver, defendant Nos. 1 to 3 are restrained
by an order of injunction of this Court, either
through themselves and/or their agents,
servants and/or any other person claiming
through or under them from disposing of,
alienating and/or creating any third party rights
and/or interest in respect of the suit premises
or any part thereof and more particularly
described in Exhibit-A to the plaint;

(vi) It is clarified that any maintenance charges etc.,

with reference to the suit premises shall be
expended by the Court Receiver from the
royalty received either from defendant No. 2 or
defendant No.3 as the case may be. It is further
clarified that the payment of royalty shall
commence from the date of the execution of
the Agency Agreement by the Receiver with the
successful bidder;

(vii) Needless to clarify that before calling the

parties for bidding, the Court Receiver shall fix a
reserve price taking into consideration the
market-value of the property and other
relevant factors and for this purpose, if
necessary, the Court Receiver shall call for a
valuation report. The charges for this valuation
report at the first instance shall be borne by the
plaintiff;

(viii) If any licenses are required by the successful

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bidder for carrying out the business from the

suit premises and of which the Court Receiver
has already been appointed, the Receiver shall
co-operate with the successful bidder. It is
clarified that merely obtaining the licenses, if
any, shall not in any way alter the status of
successful bidder or the nature of the suit
premises and no party shall be entitled to claim
any equities on the basis of the aforesaid
licenses.

29. Both the aforesaid Notice of Motions are disposed of in the

aforesaid terms. However, in the facts and circumstances of the
case, there shall be no order as to costs.

30. Considering that the subject-matter of both the suits is the same
and the parties are also common, it would be in the interest of all
the parties that both the suits are tagged together and heard
finally."

7. As can be seen from the operative part of the said order, the

ad-interim order appointing the Court Receiver in relation to the suit

premises was confirmed and the Court Receiver was to fix an

appointment calling upon Defendant No. 2 and 3 [in Suit No. 695 of 2012]

to attend his office for the purposes of bidding. Whoever was the highest

bidder, was to be appointed as the agent of the Court Receiver on the

payment of royalty but without the payment of any security. Directions

were also passed regarding what was to be done with the royalty received

by the Court Receiver and what would be the consequences if there was

any default.

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8. In the present case, since neither Defendant No.2 nor

Defendant No.3 are willing bid to be appointed as the agent of the Court

Receiver, the above Court Receiver’s Report is filed seeking directions as

to what steps the Court Receiver should take in respect of the suit

premises. I must mention that Defendant Nos.2 & 3 are not willing to bid

because the license fee suggested in the valuation report obtained by the

Court Receiver was not acceptable by them.

9. In the present case, as per the order dated 4th & 5th July 2019,

the Court Receiver obtained a valuation dated 26th December 2019,

wherein the fair market value for giving out the suit premises on a leave

and license basis was quantified at approximately Rs.1,75,000/- per

month. As far as Defendant No.2 is concerned, Mr. E. A. Sasi, the learned

advocate appearing on behalf of Defendant No.2, submitted that even

though on 27th February 2020 and 15th June 2022, a statement was made

on behalf of Defendant No.2 that they are willing to bid for the suit

premises as per the valuation obtained by the Receiver, they are not in

position to make payment of the royalty as per the said valuation. In other

words, Defendant No.2 stated that he is not in position to pay the royalty

amount of Rs.1,75,000/- per month. In view of the statement of

Defendant No.2 that he is unwilling to bid as per the valuation obtained

by the Receiver, there is no question of him now being appointed as the

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agent of the Court Receiver.

10. This now leaves me to deal with Defendant No.3. Mr.

Anturkar, the learned senior counsel appearing on behalf of Defendant

No.3, firstly submitted that paragraph 28(vi) of the order dated 4th and

5th July 2019 [reproduced above], stipulates that any maintenance

charges etc. with reference to the suit premises shall be expended by the

Court Receiver from the royalty received either from Defendant No.2 or

Defendant No.3, as the case may be. He submitted that it was further

clarified that the payment of royalty shall commence from the date of the

execution of the Agency Agreement by the Receiver with the successful

bidder. He submitted that till date no Agency Agreement has been

entered into because the parties have still not bid before the Court

Receiver. If this be the case, Defendant No.3 cannot be asked to pay

royalty from the date of the order dated 4th and 5th July 2019, but only

from the date of execution of the Agency Agreement.

11. Without prejudice to the aforesaid argument, Mr. Anturkar

submitted that Defendant No.3 has challenged the valuation of the suit

premises which is obtained by the Court Receiver. Mr. Anturkar

submitted that for this purpose, Defendant No.3, has today, lodged

Interim Application (L) No.7542 of 2023. He submitted that before any

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order is passed on this Court Receiver’s Report, the aforesaid Interim

Application ought to be heard. To prima facie satisfy the Court that the

valuation carried out for the suit premises is excessive, Mr. Anturkar

submitted that to arrive at the fair market value for giving out the suit

premises on a leave and license basis, the valuer first determined the sale

value of the suit premises and then applied a formula to come to the

conclusion that the suit premises would fetch approx. Rs.1,75,000/- per

month, if it were given out on a leave and license basis. Mr. Anturkar

submitted that the sale value of the suit premises was determined by the

valuer at Rs.2.76 Crores. Mr. Anturkar submitted that the total area of the

building [in which the suit premises are situated] is 13,160 sq.ft., and the

suit premises are only 1130 sq.ft., which means that it comprises of

approximately 10% of the total area of the building. This being the case,

Mr. Anturkar submitted that if one were to come up with a rough and

ready method of valuing the entire building, the same would come to

approximately 27.60 Crores. He submitted that despite this, the entire

building has been sold by the Original Plaintiff only for Rs.6.50 Crores.

He, therefore, submitted that at least prima facie, the valuation obtained

by the Court Receiver seems to be inflated. This is why Defendant No.3

has filed Interim Application (L) No.7542 of 2023 [which has been lodged

today] seeking to challenge the valuation. He therefore submitted that the

Court Receiver be asked to carry out a fresh valuation before determining

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the amount of royalty.

12. The last argument canvassed by Mr. Anturkar was that since

Defendant No.3 is an intermittent user of the suit premises, the Court

Receiver ought to charge only standard rent as per the provisions of the

Maharashtra Rent Control Act, 1999, and not the market value.

13. I have heard the parties at length and perused the papers and

proceedings in the above suit [Suit No.695 of 2012] as well as the above

Court Receiver’s Report. By order dated 4th and 5th July 2019, this Court

confirmed the appointment of the Court Receiver and directed Defendant

Nos. 2 and 3 to bid before the Receiver for the purpose of determining

who should be appointed as the agent of the Court Receiver. The Court

Receiver's Report clearly shows, and which fact is undisputed, that

neither of the parties have chosen to bid before the Court Receiver.

Despite the order being passed as far back as in the year 2019, Defendant

No.3 has been occupying the suit premises without paying a single

farthing. She has done so right from the year 2011 when the Receiver first

came to be appointed. Initially she was permitted to occupy the suit

premises without the payment of any royalty and security. However, after

5th July 2019, Defendant No.3 has been successful in ensuring that she is

allowed to occupy the suit premises without making any payment for the

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same. It is only when she has realised that her game is up that the

valuation obtained by the Receiver [as far back as on 26th December 2019]

is sought to be challenged by filing Interim Application (L) No.7542 of

2023. This Interim Application is lodged only today and is not even before

the Court. This is being the case, I am today unable to agree with Mr.

Anturkar’s submission that the valuation obtained by the Court Receiver

is an inflated valuation. Even otherwise, according to me, the argument

canvassed by Mr. Anturkar proceeds on a completely wrong premise.

According to him, because the sale value of suit premises is 2.76 crores,

and the suit premises are approximately 10% of the area of the entire

building in which they are situated, the market value of the entire

building would come to Rs.27.60 Crores. This argument, according to me,

is wholly fallacious. What would be the market value of the whole

building does not necessarily depend on what is the market value of a

particular tenement in that building. There are several factors that would

have to be taken into consideration before the valuation of the entire

building is taken into consideration. For example, a particular tenement

could be wholly unencumbered whereas the rest of the tenements in the

building could be encumbered by creation of tenancies etc. In such a

situation, to value the entire building on a rough and ready basis, and that

too taking into consideration only the unencumbered part of the building,

would not only be incorrect, but highly dangerous. In these

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circumstances, even prima facie, the arguments canvassed by Mr.

Anturkar on the merits of the valuation, are not well founded.

14. I have also gone through the valuation report and at least

prima facie, I find nothing objectionable in it. Despite this, I put it to Mr.

Anturkar that without prejudice to their Interim Application (L) No.7542

of 2023 (which is to challenge the valuation), whether Defendant No.3 is

willing to pay the royalty of Rs.1,75,000/- per month and it would be

subject to adjustment, if for any reason a fresh valuation is ordered and

the same is below the valuation currently given. Mr. Anturkar, on taking

instructions, fairly stated that his client is not in financial position to

make payment of the royalty of Rs.1,75,000/- per month. Once this is the

case before me, then I am clearly of the view that Defendant No.3 cannot

be allowed to occupy the suit premises any longer free of costs.

15. The last argument that was canvassed by Mr. Anturkar was

that Defendant No.3, being an intermittent user of the suit premises,

would be liable to pay only standard rent under the provisions of the

Maharashtra Rent Control Act, 1999. I find that this argument is stated

only to be rejected. As mentioned earlier, Suit No.695 of 2012 is filed by

the Plaintiff against the Defendants for trespass and for seeking

possession of the suit premises from the Defendants. This Court prima

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facie found that there was merit in this case and therefore appointed the

Court Receiver [at the ad-interim stage], and subsequently, whilst

disposing of Notice of Motion Nos.302 of 2013 & 987 of 2014, even

ordered the party who wanted to continue in possession (as the agent of

the Court Receiver) to pay royalty. This being the case, I fail to understand

how the concept of standard rent would come into the picture. This is

more so when it is not even the case of Defendant No.3 [in its written

statement] that they are tenants of the suit premises. In fact, it is their

case that they are purchasers of the suit premises from a person, who

according to the Plaintiff, had no title whatsoever in the suit premises. In

such a scenario, if I was to accept the argument of Mr. Anturkar, every

trespasser, taking advantage of the delays of litigation, would continue to

enjoy the property by paying absolutely nothing and frustrate the

Plaintiffs’ cause. I therefore find absolutely no merit in this contention.

16. In view of the foregoing discussion, the following order is

passed:-

(a) the Court Receiver, High Court, Bombay is directed to

take physical possession of the suit premises from

Defendant No.3 and/or any other person found in

occupation thereof, on 21st March 2023 at 12:00 pm.

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On taking physical possession, he shall put his lock

and seal thereon as well as put up the board of the

Court Receiver signifying to the public that the suit

premises are custodia legis.

(b) If Defendant No.3 refuses to hand over physical

possession of the suit premises to the Court Receiver,

the Court Receiver shall have the power to break open

the locks, if necessary, to take physical possession

thereof and vacate whosoever is found therein. The

Senior Police Inspector of the Local Police Station

shall give all the necessary assistance (including

deputing adequate number of police personnel) to the

Court Receiver to ensure compliance of this order,

failing which, the said Police Inspector shall be held

liable for contempt.

(c) Once the Court Receiver takes physical possession of

the suit premises, he shall then give out the same on a

leave and license to any third party by inviting bids

from the public. If the Court Receiver requires any

further directions in that regard, he is at liberty to file

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a fresh Court Receiver's Report seeking necessary

directions. It is made clear that even Defendant No.2

as well as Defendant No.3 herein are free to bid for the

suit premises pursuant to the advertisement given by

the Court Receiver.

(d) When the Court Receiver takes physical possession of

the suit premises, if he finds any articles therein, he

shall hand over the same to Defendant No.3. If for any

reason Defendant No.3 refuses to take away her

articles, then the Court Receiver shall make an

inventory of the articles and thereafter take physical

possession of the suit premises with the articles lying

therein. The Receiver can thereafter file a Report

seeking directions as to what is to be done with those

articles.

17. The costs of the Court Receiver's Report of Rs.5,000/- shall

be paid by the Plaintiff within a period of 1 week from today.

18. The Court Receiver's Report is disposed of in the aforesaid

terms.

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19. After the order was dictated in open court, the learned

advocate appearing on behalf of Defendant No.3 asked for a stay of the

operation of this order for the period of 4 weeks. This was vehemently

opposed by Mr. Khandeparkar, the learned counsel appearing on behalf

of the Plaintiff. Having heard the respective parties on this aspect and

looking at the conduct of Defendant No.3, I am not inclined to grant any

stay. The Application for stay is therefore rejected.

20. This order will be digitally signed by the Private

Secretary/Personal Assistant of this Court. All concerned, including the

police authorities, will act on production by fax or e-mail of a digitally

signed copy of this order.

B. P. COLABAWALLA, J.

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