Bombay High Court
Royal Western India Turf Club Ltd vs B. J. R. And Iqbal Singh And 2 Ors ... on 16 April, 2019
Author: G.S. Patel
Bench: G.S. Patel
5-CHSCD445-19.DOC
Shephali
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
CHAMBER SUMMONS NO. 445 OF 2019
IN
COMM EXECUTION APPLICATION NO. 63 OF 2019
Royal Western India Turf Club Ltd ...Applicant
Versus
BJR & Iqbal Singh & Ors ...Respondents
Mr Soli Cooper, Senior Advocate, with Aditya Shiralkar, Vivek Shiralkar, Yashoda Desai & Prachi Mhatre, i/b Shiralkar & Co, for the Applicant.
Mr Cherag Balsara, with Rushad Irani & Nikita Menon, i/b Purazar P Fouzdar, for the Respondents.
Mr DR Shetty, Court Receiver, present.
Mr DN Kher, OSD at Court Receiver, present.
CORAM: G.S. PATEL, J
DATED: 16th April 2019
PC:-
1. After a considerable discussion that took up the whole of this afternoon and spilled over beyond regular court hours, the two sides have arrived at an in-principle negotiated arrangement. RWITC's consent is, however, subject to approval of its General Body, a Page 1 of 8 16th April 2019 ::: Uploaded on - 18/04/2019 ::: Downloaded on - 18/04/2019 22:50:45 ::: 5-CHSCD445-19.DOC matter on which I will have a word or two to say a little later in this order.
2. The figures as discussed in Court (and adjusted several time over this afternoon) are appended in a table set out below.
Conducting Fee Arrears Total
Year 1 10,00,00,000 10,00,00,000
Year 2 2,00,00,000 1,00,00,000 3,00,00,000
Year 3 2,00,00,000 1,00,00,000 3,00,00,000
Year 4 2,00,00,000 1,00,00,000 3,00,00,000
Year 5 2,25,00,000 1,00,00,000 3,25,00,000
Year 6 2,25,00,000 1,00,00,000 3,25,00,000
Year 7 2,50,00,000 1,00,00,000 3,50,00,000
Year 8 2,50,00,000 1,00,00,000 3,50,00,000
Year 9 2,50,00,000 1,00,00,000 3,50,00,000
Year 10 3,95,00,000 --- 3,95,00,000
Year 11 3,95,00,000 --- 3,95,00,000
Year 12 4,10,00,000 --- 4,10,00,000
30,00,00,000 18,00,00,000 48,00,00,000
3. This needs a brief explanation. There are two components. The first is captioned 'arrears'. This is computed at Rs.18 crores. It is a vastly reduced figure from what RWITC was awarded in arbitration, an amount then of about Rs.55 crores. In a challenge petition, BJRs was required to deposit 50% of that amount. It did not. It went to the Supreme Court which directed BJRs to pay Rs.18 crores within six weeks of its order of 17th August 2018. In default, the executing court was to make an appropriate order. BJRs paid Page 2 of 8 16th April 2019 ::: Uploaded on - 18/04/2019 ::: Downloaded on - 18/04/2019 22:50:45 ::: 5-CHSCD445-19.DOC nothing. It continued to run its restaurant, 'Gallops', on RWITC premises, paying nothing to RWITC nor into Court. On 5th April 2019, I ordered the Court Receiver, previously appointed of its operations, to shut down the restaurant. That was done. It is in these circumstances that parties have negotiated. RWITC has in- principle and subject to General Body approval agreed to accept Rs.18 crores, the Supreme Court mandated amount, as its claim in settlement for arrears. This repayment of this amount towards the decree is spread over several years, with a significant proportion to be paid in the present year. The second component is the license fee to be paid for ongoing or continuing operations over a projected 12- year term. Obviously, this can have no bearing at all on the decretal claim and there can be no reckoning of this towards decretal satisfaction. I note this because towards the fag end of a long and debilitating afternoon, Mr Balsara attempt to suggest just this. I am having none of it.
4. Broadly speaking, I have indicated to both sides that going by this table, once the scheduled payments of arrears up to Year Nine ("Y9", etc in future references) have been made, RWITC will mark its decree fully satisfied provided there have been no defaults in the conducting fees payments until then. Any default in the conducting fee payments for the succeeding years will entitle RWITC to proceed in execution to recover the unpaid conducting fee amounts due in Y10, Y11, or Y12 until possession is resumed. This assumes there is no default in payment of the conducting fees for Y2 to Y9 or arrears repayments until Y9. Under no circumstances will the conducting fee be appropriated towards decretal satisfaction.
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5. Mr Balsara has also instructions stated that as a part of this arrangement the Respondent will irrevocably give up its past claim in regard to being a licensee or a tenant of the premises and will not make any such claim in respect of these premises or in regard to any facilities or privileges that it enjoys in any part of the RWITC premises at any time in future. The mere making of any such claim even in correspondence and even by email will constitute an event of default.
6. As part of the arrangement it is also agreed that BJRs will withdraw all pending proceedings in all Courts claiming any rights of any nature whether as a licensee or a tenant of the premises in question and this will necessarily be subject to an undertaking to this Court which I required from the active partners or their duly authorised representatives that they will under no circumstances make such a claim before any Court, authority, forum or in any proceedings.
7. These are the consequences of default, to operate as specified below:
(a) the immediate execution of the full decree with all computed interest until payment, and on the next date I will make appropriate orders of injunction, receivership, etc., to be held in abeyance until default but to operate without further reference to court in the event of that default;
(b) the immediate closure of BJRs operations at Gallops by the Court Receiver, acting with police assistance, as Page 4 of 8 16th April 2019 ::: Uploaded on - 18/04/2019 ::: Downloaded on - 18/04/2019 22:50:45 ::: 5-CHSCD445-19.DOC was recently done, and without further reference to the Court, that order being made at the next hearing but held in abeyance;
(c) the ejectment of BJRs from the premises by the Court Receiver, the Court Receiver to take actual physical and if necessary forcible possession, and the return of those premises by the Court Receiver with all movables, fitting, furniture and fixtures to RWITC.
(d) Execution against the Respondents for the unpaid amount of unpaid conducting fee until date of resumption of possession.
8. Consequences of default
(a) A single default in payment of scheduled arrears will trigger events (a), (b) and (c), giving credit for arrears payments made until the date of default.
(b) A single default in payment of conducting fee will trigger events (b), (c) and (d).
(c) If BJRs at any time makes any sort of claim in any form, fashion, forum or manner to possession or occupation of the premises in question other than as permitted by the consent terms; specifically, if it claims to be a license, lessee, tenant, in adverse possession, or any sort of possessory or other title to the premises, this will trigger events (a), (b), (c), and (d) giving credit in the decree only for the arrears amounts paid.
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9. The final order will continue the appointment of the Court Receiver symbolically of the business and the premises both. This Receivership will continue for the entire term of 12 years.
10. Obviously this settlement, still only in-principle, and therefore subject to further adjustment, will be subject to RWITC General Body approval and will begin to operate when the arrangement is finalized. I will permit both sides to suggest reasonable variations or changes. I will not permit a wholesale change of this arrangement, nor will I entertain any requests from BJRs for additional facilities under these terms. It is free to negotiate those directly with the RWITC.
11. I believe this to be an eminently reasonable arrangement in the interest of all concerned. Apart from anything else, it will put an end to at least half a dozen separate litigations, in itself in the interest of both sides.
12. The question remains as to what arrangements are to be made for the interim, i.e., between now and the next date and then until RWITC General Body approval. Under my order of 5th April 2019, the business of the Respondent has been shut down. I am mindful that there are about 100 staff. The monthly wage bill will be certainly not less than Rs. 15 to 17 lakhs, possibly slightly more. While I note this, I only note it. Those workmen's claims have no bearing at all in these execution proceedings. They cannot intervene in a civil execution proceedings -- that concept is alien to execution
-- and it certainly cannot be that their claims against BJRs come at Page 6 of 8 16th April 2019 ::: Uploaded on - 18/04/2019 ::: Downloaded on - 18/04/2019 22:50:45 ::: 5-CHSCD445-19.DOC the cost of RWITC. More importantly, those workmen's claims cannot result in, or foster, or promote a brazen defiance by BJRs of orders of this Court and the Supreme Court. The staff and workmen's claims are BJRs responsibility, and its responsibility alone.
13. The earlier proposal was to allow BJR's to conduct the restaurant as an agent of the Receiver at a monthly royalty of Rs. 25 lakhs. Mr Balsara submits that the restarting after this shut down will require an initial capital investment and requests that for two or three months the monthly conducting fees be reduced to Rs. 20 lakhs. This is reasonable, and I accept it. Mr Balsara states that that the first payment of Rs. 20 lakhs will be paid this evening itself by a cheque. The Court Receiver is present in Court. He accepts the cheque Mr Balsara tenders. It will be deposited on Thursday. I am putting BJR's on notice that if that cheque is dishonoured for any reason at all, the Court Receiver will once again shut down all operations and I will then on no account permit BJR's to restart operations. That one dishonour may very well prejudice or imperil this entire proposed arrangement. The amount of Rs. 20 lakhs per month is payable for the months from 16th April 2019 to 15th May 2019, 16th May 2019 to 15th June 2019 and from 16th June to 15th July 2019. I am allowing an extra month so as to enable RWITC sufficient time for convening its Annual General Meeting. The royalty payment for each month is to be made at or before start of each of these cycles. All payments are subject to payment by BJRs of GST as well.
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14. Both sides request for time until Tuesday, 23rd April 2019 morning for further approval, though the RWITC General Body consent will have to follow after it convenes a special or extraordinary general body meeting in accordance with its Rules.
15. List the matter for further orders on Tuesday, 23rd April 2019 first on the supplementary board.
16. The present board of the Court Receiver will remain in place till Tuesday, 23rd April 2019 and will not be removed under any circumstances.
(G. S. PATEL, J) Page 8 of 8 16th April 2019 ::: Uploaded on - 18/04/2019 ::: Downloaded on - 18/04/2019 22:50:45 :::