Bombay High Court
Sundaram Finance Serviced Limited vs M/S Dravya Industrial Chemicals ... on 22 January, 2020
Author: G.S. Kulkarni
Bench: G.S. Kulkarni
pvr 1 16chs731-05=ss-491-99-chs795-06-exa-260-04
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
CHAMBER SUMMONS NO.731 OF 2005
IN
EXECUTION APPLICATION NO.192 OF 2002
IN
SUMMARY SUIT NO.491 OF 1999
Jetu Jacques Taru Lalvani. ...Plaintiff
vs.
1.Solestrap Industries Pvt.Ltd. & Ors. ...Defendants
and
Naman Madhav Patel. ...Applicant
AND
CHAMBER SUMMONS NO.795 OF 2006
IN
EXECUTION APPLICATION NO.260 OF 2004
IN
AWARD DATED THE 30TH MAY 2001
IN
ARBITRATION CASE NO.11 OF 2001
Sundaram Finance Services. ...Claimant
vs.
1.M/s.Dravya Industrial Chemicals
2.Mr.B.Mukesh Patel ...Respondents
and
Mr.Naman Madhav Patel ...Applicant
----
Mr.Amit Shroff, for the Applicants.
Mr.Snehal Shah with Yatin R.Shah, for the Decree Holder.
Mr.Gaurang Mehta with Ms.Ruta Shah, for the Award Holder.
-----
CORAM : G.S. KULKARNI, J.
DATE : 22 January 2020 P.C.:
Chamber Summons no.731 of 2005 is moved by the applicant -Naman Madhav Patel under Order 21 Rule 58 of the Code of Civil Procedure whereby pvr 2 16chs731-05=ss-491-99-chs795-06-exa-260-04 the applicant is objecting to the warrant of attachment issued by the Court in execution of the decree of this Court in Summary Suit No.491 of 1999. Summary Suit no.491 of 1999 was decided in terms of the order dated 18 March 2002 passed on the Summons for Judgment No.267 of 1999. The principal amount as on the date of the decree was Rs.2.31 crores.
2. The second Chamber summons being Chamber Summons No.795 of 2006 is filed by the applicant-Naman Madhav Patel in Execution Application no.260 of 2004 wherein the award-holder-Sundaram Finance Services Ltd. is executing the arbitral award dated 30 May 2001 passed by the Arbitral Tribunal allowing the claim as made by the said claimant against the borrower-M/s.Dravya Industries Chemicals Ltd. and Mr.B.Mukesh Patel-the guarantor.
3. It is not in dispute that Mr.Naman Madhav Patel-applicant is the grandson of Mr.B.Mukesh Patel-the guarantor. The said guarantor was the owner of flat no.12C, First floor, Atlas Apartment, Harkness Road, Malabar Hill, Mumbai-400006, which is the only property subject matter of the execution proceeding. On an earlier occasion both these chamber summonses were decided and the adjudication had resulted into chamber summonses being rejected. Against the said order, the applicant had approached the Appeal Court. The Appeal Court by an order dated 6 April 2010 disposed of the said appeals by consent of the parties and by framing four issues to be decided by this Court. The following is the order passed by the appeal Court:-
" Parties agreed that, for disposing of these appeals in following terms, no reasons are necessary to be recorded:-
1. The orders impugned in the appeals are set aside. The matters are remitted back to the learned Single Judge for denovo consideration and decision in accordance with law.
2. By consent of parties, the applicant is permitted to join the Society concerned as party to the application. While deciding these applications pursuant to this order, the learned Single Judge is requested to decide the following issues:-
pvr 3 16chs731-05=ss-491-99-chs795-06-exa-260-04 (I) Whether the Gift of the share certificate by Mr.B.M.Patel to Mr.Naman M.Patel is vitiated because of fraud ?
(ii) Is the document of Gift of shares of a Tenant co-
partnership society compulsorily registerable under the Registration Act ?
(iii) If yes, what is the consequence on membership of Mr.Naman M.Patel of the concerned Co-operative Society as also transfer of shares of that society in his favour?
(iv) Whether the stamp duty on the document as per the Law has been paid ?
3. It is common ground that Mr.Naman M.Patel attained majority during the pendency of these proceedings, therefore, he should be permitted to be brought on record as applicant.
4. During the pendency of the proceedings before the learned Single Judge, the interim order which is operating during the pendency of the appeals shall continue to operate.
The appeals are disposed of."
4. Thereafter this Chamber summons remained pending for quite some time. On 12 March 2012 this Court (S.J.Kathawalla, J.) passed the following order on Chamber Summons no.795 of 2006:-
" Since Naman M.Patel, the son of the applicant has now attained majority, the parties submit that they have no objection if he is permitted to be brought on record as Applicant. It is submitted that liberty to this effect was already given by the Division Bench of this Court by an order dated 6th April 2010.
2. In view thereof, the Office is directed to allow the present applicant Nita Patel to bring her son Naman Patel on record, as Applicant.
Amendment to be carried out within one week from today."
pvr 4 16chs731-05=ss-491-99-chs795-06-exa-260-04
5. Thereafter on 4 November 2019 this Court noting the order passed by the Appeal Court, passed the following order:-
" The parties have brought to my notice the order dated
6 April 2010 passed by the Division Bench of this Court in Appeal No.472 of 2009 which is a consent order, whereby the Division Bench has framed issues, which would require determination in this chamber summons.
2. Learned Counsel for the applicant in the chamber summons would take instructions on the course of action, his client intends to adopt, so that the Court can proceed to adjudicate this chamber summons.
3. Also there is a chamber summons filed by the original award holder. Both the chamber summons would be taken up on the adjourned date of hearing.
4. Stand over to 13 November 2019 for direction."
6. Both these chamber summonses were listed for hearing on 13 November 2019 when learned Counsel for the applicant has made a statement that his client does not intend to lead evidence in regard to issue nos.1, 2 and 3 as framed by the Appeal Court and as regards issue no.4 in regard to the stamp duty on the document, if necessary, the applicant be permitted to lead evidence. The Court accordingly observed that the chamber summons would now be required to be heard in view of the position taken on behalf of the applicant. The Court accordingly passed the following order on 13 November 2019:-
"Mr.Shroff, learned Counsel for the applicant in Chamber Summons No.795 of 2006 as also applicant in companion Chamber Summons No.731 of 2005, states that his client does not intend to lead evidence in regard to issue Nos.1, 2 and 3 as framed by the Appeal Court to be decided in this chamber summons. As regards issue No.4 of stamp duty on the document, if necessary, the applicant be permitted to lead evidence.
2. If this be the situation, then the parties would now be required to be heard on this chamber summons. Pleadings are already complete. The parties shall be heard on the next pvr 5 16chs731-05=ss-491-99-chs795-06-exa-260-04 date of hearing.
3. Short list of dates and brief propositions be placed on record two days before the date of hearing by the parties.
4. Stand over to 27 November 2019.
5. The parties are at liberty to prepare convenience compilation and if necessary, exchange the same inter se and place the same on record on the adjourned date of hearing."
7. It is on the above backdrop these chamber summonses are listed for hearing today. Mr.Shroff, learned Counsel for the applicant has made submissions on these chamber summons as also Mr.Shah, learned Counsel for the decree-holders in execution application and Mr.Mehta, learned Counsel for the award-holder made their respective submissions.
8. The first issue required to be answered, as framed by the Appeal Court is whether gift of the share certificate by Mr.B.M.Patel to Mr.Naman M.Patel was vitiated because of fraud. At the outset it needs to be observed that to decide the above issues as framed by the Appeal Court what was necessary and incumbent for the applicant was to prove the document of gift dated 5 August 1993. Neither the original of the said document is placed on record nor the same has been proved in any manner known to law by the applicant. In these clear circumstances when the document of gift itself is not a part of the record as per the requirement of law much less proved, in my opinion, certainly this issue would have to be answered in the negative.
9. Issues nos.2, 3 and 4 are interconnected, the same reasons relevant for deciding the first issue would become applicable to these issues. Accordingly, these issues also cannot be decided.
10. The Court certainly in adjudicating the rights of the parties and more particularly as claimed by the applicant that he has independent rights in respect of the said flat, the burden is certainly on the applicant to establish such rights on evidence. This more particularly in these proceedings under Order 21 Rule 58 of the Code of Civil Procedure where the applicant has pvr 6 16chs731-05=ss-491-99-chs795-06-exa-260-04 sought to obstruct the execution of decree and the award which is subject matter of the execution proceeding. The endeavour of the applicant thus would be to prove his right, title and interest in the said property so as to succeed in obstructing the execution of the decree/award as initiated on behalf of the said decreeholder and the award creditor. In the absence of any basic evidence to prove and make good such a claim by leading adequate evidence to prove his right, title and interest in respect of the said property, it is difficult to imagine as to how the applicant can succeed in obstructing the execution(s) in question. This more particularly when the applicant has categorically stated and as recorded in the order dated 13 November 2019 that the applicant does not intend to lead any evidence.
11. The only consequence which can be gathered from the above circumstances is that the applicant has failed to prove his right, title and interest in respect of the property subject matter of execution. There is no evidence whatsoever on record of the present proceedings on the basis of which the Court can come to conclusion that any rights exists in favour of the applicant.
12. Learned Counsel for the Award creditor has also drawn my attention to the affidavit which is filed by the applicant. The said affidavit also shows a vague stand as taken by the applicant in respect of the said flat. The relevant paragraphs of the said affidavit reads thus:-
"4. I now proceed to demonstrate that Bhaghubhai Motibhai Patel was holding the suit shares and the suit flat only as per the interim family arrangement for its better management as then me my husband and children were residing in overseas. .. .. .. .. .. . .
It is pertinent to note that the deed does not itself gift the shares but merely records the gift made prior to the execution of declaration. I submit that shares being movable property the gift was complete on delivery itself hence, there is no question of registration of the same. Be that as it may, this document was refused by the society on the grounds of non stamping in 1994, hence, Bhaghubhai Patel got the pvr 7 16chs731-05=ss-491-99-chs795-06-exa-260-04 same stamped in 1994 by paying the necessary stamp duty and penalty, which was duly accepted by the Society. ... .. ... ..
5... .. .. .. ... ... I verily recollect that even the stamp duty was paid by my husband and not by Bhaghubahi Patel, which demonstrates that the gift was not a pure gift but a modus of executing the family arrangement at the insistence of the society ... ... ...".
13. This would also indicate that the applicant himself is not sure either about his legal status and/or about his legal rights in respect of the flat in question. Surely inconsistent pleas are taken by the applicant. This is another reason that even on pleadings, there is a failure on the part of the applicant to be certain about his rights in respect of the said flat. This can be also a reason for which the applicant has avoided to step into the witness box and lead any evidence to prove his claim.
14. In the aforesaid circumstances, the chamber summonses which are filed for setting aside the execution and warrant of attachment issued by this Court against the property in question and as described in the prayer clause, cannot be granted. Chamber summonses are accordingly dismissed. No costs.
15. In view of dismissal of the chamber summons, the decreeholders and the award creditors are free to proceed in execution and seek further appropriate orders.
16. At this stage Mr.Shroff, learned Counsel for the applicant seeks stay of this order. Both the learned Counsel for the decree-holder and the award creditor have opposed this application. However, in the interest of justice, the operation of this order is stayed for a period of six weeks.
Digitally
signed by
Prashant
Prashant V. Rane
V. Rane Date:
[G.S. KULKARNI, J.]
2020.02.06
14:52:16
+0530