Bombay High Court
Jimmy Adil Batliwala And 2 Ors vs Charul N. Doshi And Anr on 20 November, 2019
Author: G. S. Patel
Bench: G.S. Patel
1-3-CARBPL582-19+.DOC
Shephali
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMM ARBITRATION PETITION (L) NO. 582 OF 2019
Kanta Mohan Shinde & Ors ...Petitioners
Versus
Charul N Doshi & Anr ...Respondents
WITH
COMM ARBITRATION PETITION (L) NO. 581 OF 2019
Maria Saldanha & Anr ...Petitioners
Versus
Charul N Doshi & Anr ...Respondents
WITH
COMM ARBITRATION PETITION (L) NO. 583 OF 2019
Jimmy Adil Batliwala & Ors ...Petitioners
Versus
Charul N Doshi & Anr ...Respondents
WITH
COMM ARBITRATION PETITION NO. 689 OF 2019
Sharifabai Kutubuddin Wakf-IL-Aulad Trust & ...Petitioners
Ors
Versus
Charul N Doshi ...Respondent
WITH
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20th November 2019
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1-3-CARBPL582-19+.DOC
COMM ARBITRATION PETITION (L) NO. 584 OF 2019
Azeem Qamar & Anr ...Petitioners
Versus
Charul N Doshi & Anr ...Respondents
WITH
COMM ARBITRATION PETITION (L) NO. 585 OF 2019
Mehrunissa Rahman Alias Nazima & Ors ...Petitioners
Versus
Charul N Doshi & Anr ...Respondents
Mr Karl Tamboly, with Ms Niyathi Karla, Ms Rutuja Patil, i/b
Negandhi Shah & Himayatullah, for the Petitioners in all
petitions.
Mr Simil Purohit, with Ms Debashree Dey, Ms Pinky Patel & Ms
Anuja Mukherjee, i/b Desai & Diwanji, for the Contractor,
Generic Engineering Construction & Projects Ltd.
Mr Kalpesh Joshi,with Ms Nisha Shah, i/b Kalpesh Joshi &
Associates, for Respondent No. 1 in all petitions.
Mr Sagar Ghogre, i/b Sandip Ghogare, for four fat purchasers in
CARBPL/582/19.
Mr Bherulal Nandlal Jain, fat purchaser, present.
Mr CN Jain (HUF), fat purchaser, present.
Mr Chandra Prakash B Jain, fat purchaser, present.
Mr Raju B Jain, fat purchaser, present.
CORAM: G.S. PATEL, J.
DATED: 20th November 2019 PC:-
1. There are six petitions under Section 9 of the Arbitration and Conciliation Act 1996. There is a tabulation placed which I will take Page 2 of 8 20th November 2019 ::: Uploaded on - 21/11/2019 ::: Downloaded on - 22/11/2019 00:15:24 ::: 1-3-CARBPL582-19+.DOC on record showing the details of the petitioners in each of the matters.
2. There are now three groups afected by the 1st respondent Adinath Developer and its sole proprietor Charul Doshi. I have also no manner of doubt that the business of the frm is being conducted by her son.
3. The petitioners are all tenants entitled to re-accommodation in a reconstructed building. They comprise what I will call Group "A". Mr Purohit appears for Generic Engineering and Construction Company Limited. This is a contractor. More accurately, it is an unpaid contractor. Mr Purohit said that his clients spent about Rs. 13 crores on construction work to bring the construction up to the plinth level. This was a higher than usual expenditure because there was a two-level basement requiring additional excavation and piling work. Generic Engineering was promised four fats in lieu of whole or part of his claim.
4. In the redevelopment agreement between the Group A petitioners and Adinath Developers, there was a provision, as is usual in such cases, that Adinath Developers would pay the tenants or occupants entitled to rehabilitation a specifed amount as transit rent. It seems that in fact the Generic Engineering has paid that transit rent up to about April 2019 since Adinath Developers defaulted.
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5. Then there is Group C. These are not parties to the present proceedings. These are persons who Charul Doshi and her son describe as "investors". On the last occasion I directed notice to them. They are now at least four persons present. They say that between them they have agreed to purchase three fats. The frst is one Bherulal Nandlal Jain, 217/7, Ambavat Bhavan, NM Joshi Marg, Mumbai 400013. He says he has an agreement of 16th May 2018 to purchase a fat No. 1502, evidently on the 15th foor. He also says that at the time of execution of this agreement he paid Rs. 3.75 crores to Adinath Developers. A balance amount of Rs. 5 lakhs was due two months after execution. That too has been paid. The agreement is registered on 14th May 2018. Full stamp duty has been paid. There is no record of it with RERA.
6. There is another agreement dated 16th May 2018 between Adinath Developers and one CN Jain, HUF through its Karta, Chatarlal Jain residing at 201-202/A, Sonal Classic CHSL, Bhardawadi Path, Andheri (W), Mumbai 400058. The agreement is in respect of fat 1602 and the amounts are the same as the previous agreement. The agreement was registered on 16th May 2018. Full stamp duty has been paid. It is not registered with RERA.
7. The third agreement is 19th October 2018. It is for fat 1401. The consideration is Rs. 5,37,61,000/- on the date of the execution and remaining Rs. 10 lakhs to be paid within two months. This is signed by one Chandraprakash Jain, A 102, God's Gift, frst foor, 112-120, NM Joshi Marg, Near Mathuradas Mill Compound, Lower Parel, Delisle Road, Mumbai 400013 and Raju Jain, D/1703, Gundecha Garden, Dattaram Khamkar Road, Lalbaug, Mumbai Page 4 of 8 20th November 2019 ::: Uploaded on - 21/11/2019 ::: Downloaded on - 22/11/2019 00:15:24 ::: 1-3-CARBPL582-19+.DOC 400012. Full stamp duty has been paid and this agreement is also registered. There is no record of it with RERA.
8. These four persons namely, Bherulal Jain, CN Jain HUF through its Karta Chatarlal Jain and Chandraprakash Jain and Raju Jain will be joined as respondents to all these petitions. They will place copies of their agreements on afdavit. I notice that their agreements do not indicate how payment was made. The purchasers (or at least some of them) are in Court and they say all payments were made by cheque or RTGS. These particulars including details of the RTGS transaction numbers or at least authenticated copies of the bank statements or transfer receipts or acknowledgements will need to be placed on afdavit. This becomes necessary because Mr Kalpesh Joshi on instructions from Charul Doshi or her son or both earlier said that the full purchase amount had not been paid by these purchasers. Now that these purchasers are in Court, and their statements are noted, Mr Joshi's instructions have done a somersault, and he is now instructed to say that Adinath Developers did indeed receive full payment. Clearly, Charul Doshi and her son had no qualms about attempting to mislead the court on the earlier occasion; and they have no qualms about causing Mr Joshi considerable and visible embarrassment.
9. But if the present instructions are correct, viz., that the Group C fat purchasers have paid Adinath Developers in full, then this actually raises more question than it answers. On previous occasions I was clearly told that there were "investors willing to bring in money". Clearly there is no question of this. There are no investors. There are only these Group C purchasers. They have paid Page 5 of 8 20th November 2019 ::: Uploaded on - 21/11/2019 ::: Downloaded on - 22/11/2019 00:15:24 ::: 1-3-CARBPL582-19+.DOC up in full. The question now is what Charul Doshi/her son/their frm have done with the money that they received and why nothing was paid by the frm to the Group A petitioners/tenants/occupants towards transit rent and why there has been no progress on this development at all.
10. Whichever way one looks at it, this much is clear: Adinath Developers is liable under its development agreement to complete the project and to fund on its own and from its own resources that completion. How it proposes to make those funds available is something that Adinath Developers will have to fgure out and instruct Mr Doshi.
11. I am however making it clear that in a matter like this where there are innocent parties left and right who have been literally victimised, I will not aford Adinath Developers any liberty of a hearing or any sort of indulgence unless there is a actual deposit in this Court of sufcient funds. What is meant by "sufcient funds" is something that I do not propose to address today for reasons that will now become apparent.
12. This construction is at Dadar. It seems from various documents that it was envisaged as a 17-foor structure. Whether or not this includes podium parking or stilts is another matter. It has only come up to the plinth. There is an IOD up to the 17th foor. The Group A occupants/tenants can be accommodated up to the 6th or 7th foor. The Group B contractor can take up four fats up to that level, leaving four more fats (as presently advised) for free sale Page 6 of 8 20th November 2019 ::: Uploaded on - 21/11/2019 ::: Downloaded on - 22/11/2019 00:15:24 ::: 1-3-CARBPL582-19+.DOC to fund the completion. The Group C purchasers all have booked fats on higher foors. Some tenants/occupants may have to be adjusted.
13. Mr Purohit, whose client Generic Engineering, is perhaps best placed to know, says that under the current development control regulations it is possible to take the construction to the 17th foor or higher. If that be so, then it may be possible to generate funds through the sale of additional fats. But this necessarily means that the third party sales and construction completion may have to be done by the tenants/occupants and the landlord. The Group third party purchasers may be permitted to join in this exercise. That will be considered after I have more particulars and details.
14. Of necessity this means that for the present and in the interim pending an arbitral resolution, Adinath Developers and its rights vis- à-vis the construction will have to be held in abeyance. It simply cannot invoke contractual rights if it is itself in default and breach of its contractual obligations. It can claim no equitable right. Any fnancial claims that Group A, B or C have against Adinath Developers will have to be taken to arbitration in one or multiple arbitrations depending upon the facts and circumstances of the case. But that is not a reason for keeping this entire development project on hold indefnitely. That would not be in the interest of any of the parties, even Adinath Developers. Hence this order.
15. By the next date I expect Mr Tamboly and Mr Purohit to present a consolidated and joint statement of the likely cost of Page 7 of 8 20th November 2019 ::: Uploaded on - 21/11/2019 ::: Downloaded on - 22/11/2019 00:15:24 ::: 1-3-CARBPL582-19+.DOC construction completion, a proposal for funding and cash infow and details of the height to which this construction can be taken.
16. The Group C parties will fle their Afdavits as indicated earlier.
17. As regards Adinath Developers and Charul Doshi, I expect them to give Mr Kalpesh Joshi written instructions by the next date with complete particulars of when and how much they are going to able to bring into Court towards this project. If the answer on instructions is that they can contribute nothing, then the inevitable result will follow. I am making it abundantly clear that the one thing that Adinath Developers does not have is the luxury of time in making a fnancial contribution to this project.
18. Afdavits to be fled and served on or before 3rd December 2019.
19. List the matter on 5th December 2019, high on board.
20. For the moment the three fat purchaser agreements from the third party Group C purchasers and retained on record and marked "X1", "X2" and "X3" for identifcation collectively.
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