Bombay High Court
Vardhman Developers Ltd vs Orbit Corporation Ltd. And 4 Ors on 29 August, 2018
Author: G. S. Patel
Bench: G.S. Patel
4-CHSCD328-17+.DOC
Vardhman v Orbit & Aggarwals
Shephali
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
CHAMBER SUMMONS NO. 328 OF 2017
IN
COMM EXECUTION APPLICATION (L) NO. 123 OF 2017
IN
SUIT NO. 345 OF 2015
Vardhman Developers Ltd ...Plaintiff
Versus
Orbit Corporation Ltd & Ors ...Defendants
WITH
CONTEMPT PETITION NO. 66 OF 2016
IN
SUIT NO. 345 OF 2015
WITH
CONTEMPT PETITION NO. 70 OF 2017
IN
CHAMBER SUMMONS (L) NO. 1666 OF 2016
IN
CONTEMPT PETITION NO. 66 OF 2016
IN
SUIT NO. 345 OF 2015
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Vardhman v Orbit & Aggarwals
WITH
COMM EXECUTION APPLICATION NO. 123 OF 2017
IN
SUIT NO. 345 OF 2015
WITH
COMM CONTEMPT PETITION (L) NO. 53 OF 2018
WITH
COMM CHAMBER SUMMONS (L) NO. 495 OF 2018
IN
COMM EXECUTION APPLICATION NO. 673 OF 2018
WITH
CHAMBER SUMMONS NO. 86 OF 2018
IN
SUIT NO. 345 OF 2015
WITH
COMM CHAMBER SUMMONS (L) NO. 495 OF 2018
IN
COMM EXECUTION APPLICATION (L) NO.673 OF 2018
IN
SUIT NO. 345 OF 2015
WITH
COMM CHAMBER SUMMONS (L) NO. 763 OF 2018
IN
COMM EXECUTION APPLICATION (L) NO. 673 OF 2018
IN
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Vardhman v Orbit & Aggarwals
COMM SUIT NO. 345 NO. 2015
WITH
COMM EXECUTION APPLICATION (L) NO. 988 OF 2018
IN
SUIT NO. 345 OF 2015
WITH
COMM NOTICE OF MOTION (L) NO. 1036 OF 2018
IN
COMM EXECUTION APPLICATION (L) NO. 673 OF 2018
IN
SUIT NO. 345 OF 2015
WITH
COMM NOTICE OF MOTION (L) NO. 1158 OF 2018
IN
COMM EXECUTION APPLICATION (L) NO. 673 OF 2018
IN
COMM EXECUTION APPLICATION NO. 123 OF 2017
IN
SUIT NO. 345 OF 2015
WITH
COMM NOTICE OF MOTION (L) NO. 1160 OF 2018
IN
COMM EXECUTION APPLICATION (L) NO. 673 OF 2018
IN
SUIT NO. 345 OF 2015
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Vardhman v Orbit & Aggarwals
WITH
COMM NOTICE OF MOTION (L) NO. 1161 OF 2018
IN
COMM EXECUTION APPLICATION (L) NO. 673 OF 2018
IN
COMM CHAMBER SUMMONS NO. 495 OF 2018
IN
SUIT NO. 345 OF 2015
WITH
COMM NOTICE OF MOTION (L) NO. 1262 OF 2018
IN
COMM EXECUTION APPLICATION (L) NO. 673 OF 2018
IN
SUIT NO. 345 OF 2015
IN
COMM EXECUTION APPLICATION NO. 123 OF 2017
Mr DD Madon, Senior Advocate, with Mr Karl Tamboly & Ms
Kauser Banatwala, i/b Tushar Goradia, for the Applicant in
Commercial Chamber Summons No. 328 of 2017.
Mr Cherag Bulsara, with Mr Sushmit Phatale, for Respondent Nos. 1
to 6 in CHSCDL/763/18.
Ms Vaishali Bhilare, for Canara Bank.
Mr Kunal Dalal, I/b Rajesh Shah, for the Intervenor. Mrs Kavita Ambekar, Ist Assistant to Court Receiver, present.
CORAM: G.S. PATEL, J Page 4 of 17 29th August 2018 ::: Uploaded on - 30/08/2018 ::: Downloaded on - 30/08/2018 23:39:56 ::: 4-CHSCD328-17+.DOC Vardhman v Orbit & Aggarwals DATED: 29th August 2018 PC:- A. THIS AND FUTURE ORDERS
1. In this and future orders, I propose to deal with the Execution Application filed by the Decree Holder, Vardhman Developers Limited ("VDL") in a segmented (and possibly more orderly) manner, dealing separately with various assets, with distinct directions so that there is greater efficiency and clarity. This will also make it easier and more convenient for the Court Receiver, and will eliminate or at least reduce ambiguities and contradiction.
B. VDL'S CLAIM TODAY
2. The aggregate claim today due to VDL from the Judgment Debtors and this includes Orbit Corporation Limited ("Orbit Corp"), now in liquidation, Pujit Aggarwal ("Pujit") and Ravikiran Aggarwal ("Ravikiran") is approximately Rs.172 crores. This amount takes into account the sale proceeds received by VDL from the sale of the fractional interest of Orbit Corp's sister concern Orbit Dwelling Private Limited ("Orbit Dwelling") in the Nepean Sea Road property called Baug-E-Sara. Past orders have dealt with various properties. I will now proceed to itemize each of these and make the necessary directions.
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3. Mr Madon on instructions states that he does not wish to proceed in execution against the Toyota Fortuner vehicle. The claim of Canara Bank to whom the vehicle is hypothecated is nearly Rs. 25 lakhs. The used car value is a little under Rs. 13 lakhs. It is in the possession of a former officer, Mr Rajesh Shah.
4. Mr Shah is at liberty to negotiate with Canara Bank to take over the liability and settle the account directly.
5. There will be no further orders in this proceeding in regard to that motor car.
6. The Affidavit tendered by Mr Rajesh Shah is taken on file.
D. GAMDEVI RESIDENCE: "THE ANGEL"
7. The Aggarwal family is said to occupy the whole of the 9th floor of this building. I have on the previous occasion asked for a floor plan of the entire floor. The reason is that at different times I have been told different things as to which of the Aggarwal family members owns what portion of this floor. Prima facie it appears that the floor was divided, at least notionally if not physically, into separate units No. 901A, 901B and so on.
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8. To my quite considerable astonishment -- and amusement -- I am told that Orbit Corp and the Aggarwals do not have copies of the sanctioned building plans or the floor plans for the 9th floor, and that have applied to the MCGM for these. Given that Orbit Corp was once, by its own assertions, the golden child of this city's real estate development industry, I find this exceedingly hard to believe. What is actually being said should not be lost in translation, namely that Orbit Corporation and the Aggarwals have not the slightest intention of producing the floor plan in Court for the 9th floor. These may not be the instructions given to the Advocates, but by now I am well acquainted with what is to be made of those instructions and non-instructions, many of them elliptical and evasive. It is not insignificant that it was Orbit Corp itself and the Aggarwals who built this building. This makes the current story of not having the plans even less credible. An adverse inference now loiters with intent. It can be denied only for so long.
9. I am not constrained by this constant obstruction, obfuscation and open defiance by the Aggarwal family.
10. Therefore: the Ward Officer, D Ward, MCGM and the Assistant Engineer, Buildings and Proposal will furnish in Court directly without making available to any of the parties copies of the sanctioned plans for the property known as the Angel, 2 Krishna Sanghi Path, Gamdevi, Mumbai 400 007. The entire file relating to the development of this property is to be brought to Court on 5th September 2018. Extra copies are to be prepared of the floor plans of the 9th floor as approved and sanctioned by the MCGM. I will also need copies of all necessary permissions. The Court Associate Page 7 of 17 29th August 2018 ::: Uploaded on - 30/08/2018 ::: Downloaded on - 30/08/2018 23:39:56 ::: 4-CHSCD328-17+.DOC Vardhman v Orbit & Aggarwals will request Mr Sirsikar or Mr Sandip Patil, standing counsel for the MCGM to look this into this personally.
11. Finally, this: I do not want to hear from the MCGM that its own records and files in relation to this property are missing, not traceable, have been lost, destroyed by fire, flood, termites, white ants, or even divine intervention.
12. The order for physical possession of this property has presently been stayed by the Appeal Court and no further orders are therefore possible or appropriate.
E. KHANDALA LAND & STRUCTURE
13. This property is said to belong to Gunjan Aggarwal, against whom garnishee proceedings are filed . The Court Receiver has taken physical possession of the Khandala property. No further orders are required in this regard for the present, inter alia since there is another appeal questioning whether such garnishee proceedings will lie against her (I have held they will and do).
F. GUNJAN AGGARWAL'S JEWELLERY
14. This jewellery is sought to be attached and sold in execution. There are two Affidavits of relevance. The first is an Affidavit dated 31st July 2018 made in Chamber Summons (L) No. 763 of 2018 Page 8 of 17 29th August 2018 ::: Uploaded on - 30/08/2018 ::: Downloaded on - 30/08/2018 23:39:56 ::: 4-CHSCD328-17+.DOC Vardhman v Orbit & Aggarwals from pages 88 to 121. This has Exhibits "A", "B" and "C" from pages 92 to 96, a detailed itemisation and listing of Gunjan Aggarwal's jewellery, though without a valuation. Some generalized valuation is provided in Gunjan Aggarwal's books, separately disclosed.
15. Some of the jewellery is said to be in the family residence at The Angel and some in locker No. 115, Sardar Vaults, Opera House, Mumbai. In paragraph 11 of my order of 8th August 2018, I directed the Receiver to take physical possession of all items of jewellery from the residence and to place them in safe custody in the locker at Sardar Vaults at Opera House. That locker was to be sealed and the keys were to be retained with the Court Receiver. Although these directions were part of my order of 8th August 2018 carried in Appeal, the stay granted by the Appellate Court on that day and extended periodically thereafter is only in regard to possession of the residence at the Angel. There is no order in regard to the jewellery.
16. In any case, it is clarified that I have not at any stage made any order for sale of the jewellery or, at this stage, even for valuation. In execution, I have only made provision for that jewellery to be kept safely and for it to be sequestered for the purpose of these execution proceedings. The Court Receiver will proceed to act on those directions.
17. The agency at Sardar Vaults will act on production of an authenticated copy of this order. If the keys to locker No. 115 are not provided by Gunjan Aggarwal to the Court Receiver by Friday, 31st Page 9 of 17 29th August 2018 ::: Uploaded on - 30/08/2018 ::: Downloaded on - 30/08/2018 23:39:56 ::: 4-CHSCD328-17+.DOC Vardhman v Orbit & Aggarwals August 2018, the Court Receiver will proceed to break open the locker, inventory the contents and place the contents of that locker and the jewellery from the residence in a separate locker at Sardar Vaults until such time as Locker No. 115 is then repaired. The Decree Holder agrees and undertakes to provide the Court Receiver with such funds as are necessary for this purpose.
18. Mr Bulsara states that the question of whether Gunjan can ever be proceeded against as a garnishee is in Appeal. I am not entering that controversy at all. In fact, the direction to place all the jewellery in a vault is in Gunjan's interest so that there is no misunderstanding or the slightest risk of any adverse finding at a later stage irrespective of the circumstances. If Gunjan succeeds all of this will very simply be rolled back. It is impossible for a Court Officer to monitor and control what is being done with movable items in the Respondents' residence. Mr Bulsara's application to defer the placing of the jewellery in the locker is without adequate justification. This direction causes Gunjan Aggarwal not the slightest prejudice. Indeed, in all this, if Gunjan Aggarwal is prejudiced, it is by the acts of her husband and her father-in-law and not by any act of the Court.
19. The Court Receiver will visit the residence at The Angel within one week after prior intimation for the purpose of moving the jewellery from there to the vault. Gunjan Aggarwal or her representative and legal advisors are at liberty to (and should) accompany the Court Receiver's representative during this shifting.
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20. Also, at this stage I am making no distinction between the jewellery she claims as streedhan and other jewellery. That is undoubtedly an issue that will have to be addressed but I will turn to that at a later stage after hearing Gunjan more fully on her contentions in that behalf. All those contentions are expressly kept open. The entire execution in respect of the jewellery is also subject to the appellate orders on maintainability of the garnishee proceedings. At the cost of repetition, the jewellery is simply being secured, and this is in the interest of all concerned.
21. I expect the Court Receiver to use the list annexed to the Affidavit of 31st July 2018 as a check list to ensure that all the items of jewellery listed are accounted for. A supplementary list may be prepared, if necessary, of any additional items of jewellery. No valuation is yet to be carried out. Again the reason is that these directions will follow once I have heard and decided the objection raised by Gunjan in regard to some or all of these itemised list constituting her streedhan property.
22. The previous injunction against Gunjan Aggarwal for disposing off, selling, hypothecating, pledging, pawning or otherwise creating any third party rights or parting with possession of with the jewellery is reiterated, and, if not previously explicit, is made today. This will apply to anyone she has allowed to use her jewellery, her children and other family members included. The restraint does not apply to items of jewellery on her person, such as her mangalsutra, wedding bands or rings, etc. This is not to be construed to mean that Gunjan Aggarwal is at liberty to claim that Page 11 of 17 29th August 2018 ::: Uploaded on - 30/08/2018 ::: Downloaded on - 30/08/2018 23:39:56 ::: 4-CHSCD328-17+.DOC Vardhman v Orbit & Aggarwals the vast amount of jewellery in the list is 'on her person'. It is restricted to the jewellery for reasonable daily wear and use.
G. WORLI OFFICE, "THE VIEW"
23. The office covering the whole of the first floor at "The View", Dr Annie Besant Road, Worli belongs to Pujit. He is a Judgment Debtor. The Court Receiver has already, under previous orders, taken formal possession of the office. The Court Receiver will now proceed to take actual physical possession within one week from today and will act on an authenticated copy of this order.
24. The Court Receiver will thereafter have this property valued on a free-sale basis by a valuer from amongst those on its panel. The Court Receiver will then place a separate report in this regard for fixing the reserve price and for further directions for sale of the Worli office.
H. MATRUCHHAYA FLAT AT MARINE DRIVE
25. This flat is said to have been given by Gunjan Aggarwal on tenancy to a third party. This was the subject matter of previous orders including in contempt, since Gunjan Aggarwal purported to submit a decree of the rent court accepting the tenancy despite an injunction of this Court. That has been reversed.
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26. The Court Receiver will now write to the Matruchhaya Society and request for copies of all documents tendered by the owner or licensee/tenant of Flat No. 3, First floor, Matruchhaya, Marine Drive, Mumbai 400020. A separate report will be placed in this regard.
I. LAND AT VASIND
27. This is Survey and Hissa No. 461 + 11 + 12 (part), 464 (part), 54 (part) and 59/1 (part) in Taluka Shahapur, District Thane. The Court Receiver has the correct description. On 13th April 2018, the Court Receiver took formal possession of the entire property. In a meeting on 1st August 2018, the Court Receiver appointed M/s Amol Bora and Company to inspect and to place a valuation report. The Court Receiver states that some portions of this property were found to be occupied by the employees of one Phoenix Appliances Private Limited. This is said to be a company promoted by Dinesh Aggarwal. I am told that the property was originally bought by Ravikiran and was leased sometime in the 1980s to Phoenix Appliances. I am also told that in 2015, Ravikiran gifted this property to Dinesh Aggarwal. At present, therefore, the formal possession of the Court Receive will continue. I will make separate directions later in this order in regard to such transfers.
28. The Court Receiver will write to Phoenix Appliances, citing this order, and calling on it to submit copies of all documents by which it claims to be entitled to that property.
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29. Pujit and Ravikiran Aggarwal will file an Affidavit disclosing the Deed of Gift in respect of the Vasind property. That affidavit is to be filed by 10th September 2018.
J. INVESTMENTS
30. The investments of the Judgment Debtors fall broadly into two classes. There are shares held by them in Orbit Group of Companies. Mr Madon will take instructions as to what execution he proposes to prosecute in regard to these.
31. There are other investments in mutual funds, bonds, and marketable securities. The value of these is known, or can be ascertained. However, these are held by different persons and entitled in various combinations. An individual order will be required for each set of shareholdings. The disclosures made are spread over several Affidavits and the Decree Holders will prepare a consolidated statement of these shareholdings in such a form that an effective order can be made thereon for the appointment of a Receiver and for sale.
32. In this context, I must note that where any of these investments are in the name of Orbit Corp, whether held singly or jointly with anyone else, different considerations may well arise, that company being in liquidation.
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33. The Court Receiver has written to various entities and companies for details of shareholdings. It will place a separate report for directions when necessary. This is particularly so in regard to marketable securities.
K. FRAUDULENT TRANSFERS
34. Mr Madon states that there are a number of transfers of immovable property that are fraudulent, including the 2015 gift of the Vasind land and property. I will give him liberty to file appropriate applications in regard to these because he will have to separately identity each of these transactions and the properties to which they relate. A common order for each transfer is not possible. Those applications will have to be narrowly fashioned and specifically targeted so that orders for disclosure of the relevant documents can be made in each. An omnibus order of disclosure will only create confusion.
L. DIRECTIONS TO THE COURT RECEIVER
35. From this point on, the Court Receiver will follow the present division or separation of subjects and items, and make separate reports for each of the separate properties that are to be attached or moved against in execution. The Court Receiver will place each of these reports as and when necessary and when ready.
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36. The Court Receiver make a grievance that although the Judgment Debtors have filed several Appeals, not a single one of these has been served on the Court Receiver and the Court Receiver is not kept apprised of the Appellate Court's orders. The apprehension expressed is that the Court Receiver's office should not find itself even unwittingly in a position where it has acted on one set of orders made available to it, but contrary to the other set of appellate orders which are not communicated to it.
37. Mr Bulsara agrees that copies of all Appeals will be served on the Court Receiver and that a copy of each Appellate Court order will also be forwarded to the Court Receiver. Since there are some appellate matters listed today, and since I expect Mr Bulsara may now find himself occupied in the preparation of yet another appeal, I will request the Plaintiff to furnish the necessary documents to the Court Receiver.
N. CHECKLISTS AND SUMMARIES
38. Since this execution is moving in multiple directions simultaneously, for clarity and to avoid conflicts, mis-steps and prejudice to either side, I will require the Decree Holder to get somewhat more organized. I will need at each hearing a tabulated check list of matters in execution with their updated status. A copy will be given, without requiring an order each time, to the Court Page 16 of 17 29th August 2018 ::: Uploaded on - 30/08/2018 ::: Downloaded on - 30/08/2018 23:39:56 ::: 4-CHSCD328-17+.DOC Vardhman v Orbit & Aggarwals Receiver. The tabulation must list the item involved in execution, the date(s) of the relevant order(s), if possible a summary of those orders, and the current status. Details of appellate orders and the status of the appeals should also be included.
39. This is to be maintained and continued until further orders.
O. NEXT DATE
40. List the matter tomorrow, 30th August 2018, on the supplementary board.
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