Bombay High Court
Rajaram Chavan Real Estate Pvt Ltd vs Mohammed Anwar Kutubuddin Siddiqui on 12 September, 2023
Digitally signed
LAXMIKANT by LAXMIKANT
2023:BHC-OS:9815-DB
GOPAL
GOPAL CHANDAN
CHANDAN Date: 2023.09.12
17:39:22 +0530
1 (905) COMAPL-20428.23-aw-IAL-20470.23.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL APPEAL (L) No.20428 OF 2023
IN
INTERIM APPLICATION (L) NO.9107 OF 2023
IN
COMMERCIAL SUIT (L) No.8458 OF 2023
Rajaram Chavan Real Estate Pvt. Ltd. ]
having its registered office at 1st floor,]
R.C. House, the Grand Residency ]
Near Sheetal Chinema, LBS Marg ]
Kurla (W), Mumbai 400070 ]
And also another office at 225, ]
Sheetal Cinema Building, LBS Marg ]..... Appellant.
Kurla (W), Mumbai 400070 ] (Orig.Defendant No.7)
Vs.
1] Mohammed Anwar Kutubuddin ]
Siddiqui ]
Age : 56 years, Occ : Business ]
Presently R/at. A/404, Sagar ]
Apartment, Father Peter Pereira ]
Road, Sonapur Lane, Kurla (W) ]
Mumbai 400070 ]
]
2] M/s.Myco Construction Company]
Sole proprietary concern of ]
Mohammed Ali Mohammed Sali ]
having its office at 2nd floor, 228 ]
Daruwala Building Bazar Ward, ]
Kurla (W), Mumbai 400070 ]
]
3] Fatima Nalakath Sahusintavide ]
Wd/o. Mohammed Ali ]
LGC 1 of 23
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Mohammed Sali ]
]
4] Shahida Nalakath Sahusintavide ]
D/o. Mohammed Ali ]
Mohammed Sali ]
]
5] Shaziya Nalakath Sahusintavide ]
D/o. Mohammed Ali ]
Mohammed Sali ]
]
6] Saliha Nalakath Sahusintavide ]
D/o. Mohammed Ali ]
Mohammed Sali ]
]
All legal heirs of Mohammed Ali ]
Mohammed Sali, sole proprietor ]
of M/s. Myco Construction ]
nd
Company, 2 floor, 228, ]..... Respondents.
Daruwala Building, Bazar Ward ] (Orig.Plaintiff &
Kurla (W), Mumbai 400070 ] Org.Def.Nos.1 to 6)
WITH
INTERIM APPLICATION (L) NO.20470 OF 2023
IN
COMMERCIAL APPEAL (L) No.20428 OF 2023
IN
INTERIM APPLICATION (L) NO.9107 OF 2023
IN
COMMERCIAL SUIT (L) No.8458 OF 2023
Rajaram Chavan Real Estate
Pvt. Ltd. : Applicant
In the matter between
M/s. Rajaram Chavan Real : Appellant/Applicant
Estate Pvt. Ltd. (Org.Defendant No.7)
LGC 2 of 23
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Vs.
Mohammed Anwar Kutubuddin : Respondents.
Siddiqui and ors. (Org.Respondent No.1
& Org.Deft.Nos.1 to 6)
Mr. Simil Purohit a/w Mr. Rishikesh Soni i/by Ashok Purohit & Co.
for the Appellant/Applicant.
Mr. Sharique Nachan a/w Mr. Amaan Khan and Mr. Khurram
Aagboatwala i/by Judicare Law Associates for Respondent No.1.
Mr. E. A. Sasi a/w Ms. Meghna Khatri for Respondent Nos.2 to 6.
Mr. S. K. Dhekale, Court Receiver, present.
CORAM : DEVENDRA KUMAR UPADHYAYA, CJ. &
ARIF S. DOCTOR, J.
Reserved on : 02nd August 2023
Pronounced on : 12th September 2023
JUDGMENT :(PER ARIF S. DOCTOR) The present Appeal impugns an order dated 20 th July 2023 by which the Learned Single Judge was pleased to grant the following reliefs in the captioned Interim Application taken out by Respondent No.1 viz.
"c) Pending the hearing and final disposal of the above Suit, this Hon'ble Court be pleased to appoint the Court Receiver, High Court, Bombay, or any other fit and proper person as Receiver of the suit flat more LGC 3 of 23 ::: Uploaded on - 12/09/2023 ::: Downloaded on - 13/09/2023 04:38:10 ::: 4 (905) COMAPL-20428.23-aw-IAL-20470.23.doc particularly described in the Schedule annexed at Exhibit-"A" to the Plaint with all powers under Order 40 Rule 1 of the Civil Procedure Code with further directions to take physical possession of the suit flat;
d) Pending the hearing and final disposal of the above Suit, this Hon'ble Court be pleased to appoint the Court Receiver, High Court, Bombay, or any other fit and proper person as Receiver of the suit flat more particularly described in the Schedule annexed at Exhibit - "A" to the Plaint with all powers under Order 40 Rule 1 of the Civil Procedure Code with further directions to take physical possession of the suit flat and put the Plaintiff in possession thereof as Agent of the Court Receiver without payment of royalty."
2. Before dealing with the rival contentions, it is useful to give a brief background of the relevant facts so as to give context to the challenge in the present Appeal.
i. The Appellant is a Developer of land ("Developer").
The predecessor of Respondent Nos. 3 to 6 one Mohammed Ali Mohammed Sali ("Owner") claimed to be the Owner of a piece and parcel of land LGC 4 of 23 ::: Uploaded on - 12/09/2023 ::: Downloaded on - 13/09/2023 04:38:10 ::: 5 (905) COMAPL-20428.23-aw-IAL-20470.23.doc admeasuring about 3000 sq. mtrs. together with the structure standing thereon and known as Daruwala Chawl ("the said property").
ii. The Owner and Developer had entered into a Joint Development Agreement ("JDA") dated 20th August 2009 for redevelopment of the said property by constructing buildings thereon. The JDA inter alia contemplated that the Developer and the Owner would each be entitled to 50% of the built-up area of the newly constructed buildings. It is not in dispute that thereafter the redevelopment infact took place. iii. Respondent No. 1 vide a registered Agreement for Sale dated 5th May 2016 purchased Flat No.104 on the 1st floor, admeasuring 49.24 square meters (equivalent to roughly around 530 square feet) carpet area in "A" Wing of the building known as "Orchid Springs ("the suit flat") from the Owner.
LGC 5 of 23 ::: Uploaded on - 12/09/2023 ::: Downloaded on - 13/09/2023 04:38:10 ::: 6 (905) COMAPL-20428.23-aw-IAL-20470.23.doc iv. Thereafter, disputes and differences arose between the Owner and Developer inter alia in respect of sixteen flats to which the Owner claimed to be entitled as being the Owner's share. The Owner therefore filed a Petition under Section 9 of the Arbitration Act seeking various interim measures of protection inter alia in respect of the said sixteen flats. This Court, by an order dated 26 th May 2017 passed by consent inter alia directed that the parties would maintain status quo as regards the said sixteen flats and referred the disputes and differences between the Developer and the Owner to arbitration. The orders of status quo in respect of the said sixteen flats were thereafter continued by the Arbitral Tribunal.
v. Respondent No.1 along with several other flat purchasers thereafter filed an Interim Application LGC 6 of 23 ::: Uploaded on - 12/09/2023 ::: Downloaded on - 13/09/2023 04:38:10 ::: 7 (905) COMAPL-20428.23-aw-IAL-20470.23.doc (being Interim Application No.159 of 2021 with Interim Application No.386 of 2021) seeking review of the order dated 26th May 2017 to the extent that the same would not come in the way of the flat purchasers seeking reliefs qua their flats in independent proceedings against both Owner and Developer. This Court by an order dated 17 th March 2022 clarified as follows viz.
"3. .........It is self-evident that the order of 26th May 2017 cannot possibly come in the way of the Review Petitioners independently establishing their rights in any proceedings that they may institute or may have instituted to any flats. Since the Review Petitioners were not party to the Section 9 proceeding in the 26 th May 2017 order, they cannot possibly be bound by any part of it.' vi Respondent No.1, who had also filed a Petition under Section 9 of the Arbitration and Conciliation Act, inter alia seeking possession of the suit flat, then withdrew LGC 7 of 23 ::: Uploaded on - 12/09/2023 ::: Downloaded on - 13/09/2023 04:38:10 :::
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vii. It was thus that Respondent No. 1 filed the captioned Suit and took out the Interim Application seeking various interim reliefs in respect of the suit flat. The Impugned Order was passed in the said Interim Application. The Developer being aggrieved by the Impugned Order, has filed the present Appeal.
3. Mr. Purohit, the learned counsel appearing on behalf of the Developer submitted that the suit flat was one of the sixteen flats in respect of which the orders of status quo had been passed and hence the Impugned Order effectively defeated the orders of status quo. He submitted that the Developer was in possession of the suit flat and the effect of the Impugned Order would be to dispossess the Developer from its possession and that too at the interim stage. He submitted that such an order therefore could not and ought not to have been passed in the fact of the present case.
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4. Mr. Purohit then invited our attention to the JDA and pointed out with particular reference to Clauses (II)(b), (f), (g),
(i) and (o) that in the event of the Owner failing and/or neglecting to comply with his obligations under the JDA, then the Developer would be entitled to proportionate area from the Owner's share so as to compensate the Developer for discharging the obligations which the Owner was required to discharge. Mr. Purohit submitted that since the Owner had failed and neglected to discharge certain obligations under the JDA, the Developer thus became entitled to appropriate certain area from the Owner's share. He, therefore, submitted that the suit flat being one of the 16 flats forming part of the Owner's share would also be one in respect of which the Developer would be entitled. He thus submitted that if the Impugned Order was not set aside, the Developer would be gravely prejudiced since the area from which the Developer could claim an adjustment would have dissipated. He thus submitted that the balance of convenience was overwhelmingly in favour of the Developer.
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5. Mr. Purohit then submitted that the case of Respondent No. 1 in the Plaint was contrary to what was stated in the letter dated 20th October 2016. He pointed out that while the letter dated 20th October 2016 recorded that, Respondent No. 1 had been put in possession of the suit flat, in the Plaint Respondent No. 1 had specifically pleaded that possession of the suit flat was infact never handed over. Basis this, he submitted that the contention of Respondent No.1 that possession of the suit flat had been handed over to Respondent No. 1 was ex facie false. He therefore submitted that possession of the suit flat ought not to be handed over to Respondent No. 1, and that too at the interim stage.
6. For all of the aforesaid reasons, he submitted that the Impugned Order was required to be set aside.
7. Per contra, Mr. Nachan, the learned counsel appearing on behalf of Respondent No.1, submitted that Respondent No.1 was an innocent third-party purchaser who purchased the suit LGC 10 of 23 ::: Uploaded on - 12/09/2023 ::: Downloaded on - 13/09/2023 04:38:10 ::: 11 (905) COMAPL-20428.23-aw-IAL-20470.23.doc flat from the Owner under a duly registered Agreement for Sale. He submitted that Respondent No. 1 had nothing to do with the inter se disputes and differences between the Developer and the Owner. He submitted that Respondent No.1, despite having purchased the suit flat under a registered Agreement for Sale and having taken a home loan, was kept out from use and occupation of the suit flat to which he was lawfully entitled.
8. Mr. Nachan then submitted that the Developer's claim to the suit flat was infact a dishonest one for two reasons (i) that the Developer had expressly given up its claim in respect of the suit flat and (ii) that the suit flat had been sold by the Owner to Respondent No. 1 with not only the knowledge but also the consent of the Developer. He thus submitted that the Developer infact had no right and could not claim any right of adjustment/appropriation of area in respect of the suit flat. In support of his contention that the Developer could not claim any right and/or adjustment in respect of the Suit flat, he invited our attention to the letter dated 4th September 2013 LGC 11 of 23 ::: Uploaded on - 12/09/2023 ::: Downloaded on - 13/09/2023 04:38:10 ::: 12 (905) COMAPL-20428.23-aw-IAL-20470.23.doc addressed by the Developer to the Owner and pointed out therefrom that the JDA had specifically been amended by the said letter. He pointed out from the said letter that the same provided that (a) the restriction on the Owner as per Clause (ii)
(o) of the JDA was only in respect of 3 flats, and (b) the suit flat was not one of the three flats and was specifically allotted to the Owner. Basis this, he submitted that there was no question of the Developer now claiming that the Developer would be entitled to the suit flat for an adjustment/appropriation of area under the JDA.
9. He then invited our attention to the letters dated 23 rd September 2016 and 20th October 2016 respectively to submit that the Developer was not only aware of the sale of the suit flat to Respondent No.1 but had infact specifically acquiesced thereto. He pointed out that by the letter dated 23 rd September 2016, the Developer had specifically noted the bank's lien in respect of the suit flat, which recorded that the suit flat was acquired by Respondent No. 1 from the Owner. Similarly, he LGC 12 of 23 ::: Uploaded on - 12/09/2023 ::: Downloaded on - 13/09/2023 04:38:10 ::: 13 (905) COMAPL-20428.23-aw-IAL-20470.23.doc pointed from the letter dated 20th October 2016, that the Developer had specifically acknowledged that Respondent No. 1 had been put in quiet, vacant and peaceful possession of the suit flat, and was granted liberty to own, use, occupy, and possess the suit flat without interference or disturbance in any manner. Basis this he submitted that the Developer could not now seek to resile from either the amendment to the JDA or the consent to the sale of the Suit flat to Respondent No. 1.
10. Mr. Nachan submitted that the orders of status-quo relied upon by the Developer were wholly immaterial since they were passed (a) after the date of the Agreement for Sale and (b) in the proceedings to which Respondent No. 1 was not a party. Mr. Nachan then invited our attention to the order dated 17 th March 2022 and pointed out that the same specifically recorded that the order dated 26th May 2017 did not bind third party flat purchasers since they were not parties to the Section 9 proceedings. Given this, he submitted that there was no question of Respondent No.1 being bound by the orders of LGC 13 of 23 ::: Uploaded on - 12/09/2023 ::: Downloaded on - 13/09/2023 04:38:10 ::: 14 (905) COMAPL-20428.23-aw-IAL-20470.23.doc status-quo.
11. Mr. Nachan then submitted that in the facts of the present case, the balance of convenience was entirely in favour of Respondent No.1 and against the Developer. He submitted that the Developer at the highest could have a money claim against the Owner and/or the legal heirs of the Owner viz. Respondent Nos. 2 to 6 which would be decided in the pending arbitration. He submitted that this Court had in the orders dated 7th March 2019 and 20th July 2023 ("Impugned Order) specifically observed that the Developers claim was infact a money claim, which was not challenged by the Developer.
12. Mr. Nachan then placed reliance upon a judgment of this Court in the case of Mulji Umershi Shah Vs. Paradisia Builders Pvt. Ltd. and others1 to submit that there was no impediment put by the Code of Civil Procedure for passing any order to prevent the ends of justice from being defeated which included putting a party in possession of a property even at the 1 1997(3) Mh. L.J.532 LGC 14 of 23 ::: Uploaded on - 12/09/2023 ::: Downloaded on - 13/09/2023 04:38:10 ::: 15 (905) COMAPL-20428.23-aw-IAL-20470.23.doc interlocutory stage. Mr.Nachan also placed reliance upon a judgment of the Madras High Court in the case of T. Krishnaswamy Chetty Vs. Thangavelu Chetty and others 2 to submit that the Court would be well entitled to appoint a receiver when a person in possession has obtained it through fraud or force or when the property in question is shown to be "in medio". In this case he submitted that given the fact that Respondent No.1's entitlement to the suit flat was based on a registered Agreement for Sale and the property was lying "in medio", the appointment of the court receiver was wholly justified. He also placed reliance upon the Judgment of the Division Bench of this Court in the case of Mahendra Mangruram Gupta and anr. Vs. Rajdai Nandlal Shaw and ors3 in which the Division Bench of this Court has relied upon the judgment of the Madras High Court in the case of T Krishnaswamy Chetty.
13. Basis the above, the learned counsel submitted that the Impugned Order had been correctly passed and thus the 2 1954 SCC OnLine Mad 374 3 Judgment dt.15/06/2022 in Appeal No.83 of 2020.
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14. We then heard Mr. Sasi, the learned counsel appearing on behalf of Respondent Nos. 2 to 6 even though it was pointed out to us that Respondent Nos. 2 to 6 had remained unrepresented before the Learned Single Judge. Mr. Sasi tendered compilation of documents upon which he placed reliance and essentially supported the submissions made by Mr. Nachan.
15. We have heard the learned counsel for the parties, considered the rival submissions as also the documents relied upon by them. After a careful consideration of the same, we find that the Appeal is entirely devoid of any merit and must necessarily be dismissed for the following reasons:-
At the outset, the parameters for grant of interim reliefs are well settled. The Hon'ble Supreme Court has in the case of Seema Arshad Zaheer and others Vs. Municipal LGC 16 of 23 ::: Uploaded on - 12/09/2023 ::: Downloaded on - 13/09/2023 04:38:10 ::: 17 (905) COMAPL-20428.23-aw-IAL-20470.23.doc Corporation of Greater Mumbai and others4 had occasioned to reiterate the essential requirements to be satisfied by a Plaintiff who seeks interim reliefs as follows viz.:-
"(i) Existence of a prima facie case as pleaded, necessitating protection of plaintiff's rights by issue of a temporary injunction;
(ii) When the need for protection of plaintiff's rights is compared with or weighed against the need for protection of defendant's right or likely infringement of defendant's right, the balance of convenience tilting in favour of plaintiff; and
(iii) Clear possibility of irreparable injury being caused to plaintiff if the temporary injunction is not granted. In addition, temporary injunction being an equitable relief, the discretion to grant such relief will be exercised only when the plaintiff's conduct is free from blame and he approached the court with clean hands."
We find that in the present case Respondent No.1 has more than adequately satisfied the above requirements and thus the Learned Single Judge has correctly granted the interim reliefs that have been sought for by Respondent No. 1. Respondent No.1 has asserted his claim to the ownership of the suit flat based on a registered Agreement for Sale entered into with the 4 (2006) 5 SCC 282 LGC 17 of 23 ::: Uploaded on - 12/09/2023 ::: Downloaded on - 13/09/2023 04:38:10 ::: 18 (905) COMAPL-20428.23-aw-IAL-20470.23.doc Owner. The Agreement for Sale was admittedly executed before the orders of status quo were passed, which we must note were passed by consent. Crucially, Respondent No. 1 has relied upon the letter dated 4th September, 2013 which makes clear that the Owner is entitled to the suit flat and the JDA was ammended inter-alia to that extent. Additionally, Respondent No. 1 has relied upon letters dated 23rd September 2016 and 20th October 2016 which expressly make clear and bring to the notice of the Developer that the Owner was dealing with the suit flat. There is no denial to these letters nor did the Developer take any steps to restrain the Owner from dealing with and/or selling the suit flat. On the contrary, the Developer has expressly acquiesced to the same. The Developer's claim, though stated to be one of an adjustment of area, is really a money claim as already observed by this Court in the Order dated 7th March 2019 and 20th July 2023 ("Impugned Order) with which we are in agreement. Even assuming the claim of the Developer is one for area, we must note that the Developer has not taken any steps for adjudication of its claim, and it was the Owner who had initiated arbitration.
LGC 18 of 23 ::: Uploaded on - 12/09/2023 ::: Downloaded on - 13/09/2023 04:38:10 ::: 19 (905) COMAPL-20428.23-aw-IAL-20470.23.doc Therefore Respondent No. 1 has made out an overwhelmingly strong prima facie case for the grant of interim reliefs as prayed for in respect of the suit flat.
16. Additionally, and crucially, the Impugned order is purely a limited interim order and does not and cannot create any final right, title, and interest in the suit flat in favour of Respondent No. 1. The Learned Single Judge has in the said order made clear and explicit as follows, viz.
"27. It is made clear that the plaintiff shall enjoy possession of the suit flat only as an agent of the court receiver without payment of royalty and subject to further orders in the present proceedings. By way of abundant caution, it is further directed that the plaintiff shall not in any manner deal with the suit flat or seek to create any third- party rights on the strength of agreement to sale dated 5/5/2016, during the pendency of the suit.
Thus, all that has been done by the Impugned Order is to permit Respondent No. 1 to occupy the suit flat pending the hearing and final disposal of the Suit. The Learned Single Judge has after LGC 19 of 23 ::: Uploaded on - 12/09/2023 ::: Downloaded on - 13/09/2023 04:38:10 ::: 20 (905) COMAPL-20428.23-aw-IAL-20470.23.doc considering the facts of the case and weighing the balance of convenience, passed the Impugned Order. We are in agreement with the reasons set out by the Learned Judge in concluding that the balance of convenience in the present case is entirely in favour of Respondent No. 1.
17. Also, we find the contention of the Developer that the Developer was in possession of the suit flat and thus ought not to be dispossessed at the interim stage to be a contention which is entirely devoid of merit. The Developer could never be in lawful possession of the suit flat since it is the Developer's own case that the Developer would be entitled to an adjustment of an area from the Owner's share on the Owner's failing and/or neglecting to perform its obligations under the JDA. Thus, it is incumbent upon the Developer to first establish the defaults on the part of the Owner before claiming entitlement to the suit flat or any area forming part of the Owner's share. In the present case, the Developer has admittedly not established the default on the part of the Owner which would entitle the Developer to LGC 20 of 23 ::: Uploaded on - 12/09/2023 ::: Downloaded on - 13/09/2023 04:38:10 ::: 21 (905) COMAPL-20428.23-aw-IAL-20470.23.doc proportionate area from the Owner's share. Given this, we find that what the Developer is effectively attempting to do is to deprive the Owner of his entire entitlement and claim possession of inter alia the suit flat based solely upon the Developers contention that the Owner is in default. We find that this being the basis of the Developer's claim of possession the same is ex- facie untenable in law. Even if the possession was infact with the Developer, such possession is clearly not lawful and therefore would necessitate appointment of a Court Receiver as has been held by the Madras High Court in the T. Krishnaswamy Chetty (supra).
18. We also find no merit in the contention that the possession of the suit flat cannot at the interim stage be granted to Respondent No.1. As noted above, the possession or claim of possession of the suit flat by the Developer is prima facie unlawful and therefore as held by this Court in the case of Mulji Umershi Shah (supra) there is no impediment put by the Code of Civil Procedure for passing any order so as to prevent the LGC 21 of 23 ::: Uploaded on - 12/09/2023 ::: Downloaded on - 13/09/2023 04:38:10 ::: 22 (905) COMAPL-20428.23-aw-IAL-20470.23.doc ends of justice from being defeated which includes putting a party in possession of a property where sufficient cause is shown even at the interim stage.
19. Given the above, we find that the learned Single Judge has correctly exercised his discretion in granting the limited interim relief in favour Respondent No.1. There is no merit in the Appeal. The same is accordingly dismissed.
20. In view of dismissal of Appeal, Interim Application (L) No.20470 of 2023 does not survive and the same is also accordingly disposed of.
(ARIF S. DOCTOR, J.) (CHIEF JUSTICE) AFTER PRONOUNCEMENT
At this stage, Mr. Soni, the Learned Counsel appearing on behalf of the Appellant made a request for stay of the effect of this Order. Mr. Nachan, the Learned Counsel appearing on LGC 22 of 23 ::: Uploaded on - 12/09/2023 ::: Downloaded on - 13/09/2023 04:38:10 ::: 23 (905) COMAPL-20428.23-aw-IAL-20470.23.doc behalf of Respondent No.1 submitted that he did not have any objection to the stay being granted, if the same was for a short period and subject to condition that the Appellant would hand over possession of the suit flat at the expiration of the stay in the event the same was not continued either in Appeal or any other proceedings which the Appellant may file from this Order.
2. In view of the aforesaid, we grant a stay of the operation of this Order for a period of four weeks from today. On expiry of four weeks' time, if there is no order by which the stay is continued, the keys of the suit flat shall be handed over by the Appellant to the Court Receiver, who shall in turn hand over the same to Respondent No.1, in terms of the undertaking given to this Court by the learned counsel for the Appellant.
(ARIF S. DOCTOR, J.) (CHIEF JUSTICE)
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