Bombay High Court
Cfm Asset Reconstruction Pvt Ltd vs Prasan Kapoor And 20 Ors on 12 July, 2022
Author: Abhay Ahuja
Bench: G.S. Patel, Abhay Ahuja
55-OSAPP-421-2019 IN NMS-1796-2018 WITH APP-422-2019 IN NMS-547-
2018.DOC
Shephali
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL NO. 421 OF 2019
IN
NOTICE OF MOTION NO. 1796 OF 2018
WITH
APPEAL NO. 422 OF 2019
IN
NOTICE OF MOTION NO. 547 OF 2018
IN
SUIT NO. 1082 OF 2018
CFM Asset Reconstruction Pvt Ltd ...Appellant
Versus
Rup Krishen Baqaya & Ors ...Respondents
SHEPHALI
SANJAY
MORMARE
Dr Birendra Saraf, Senior Advocate, with Rohit Gupta, Ayush
Agarwal, Arushi Kaulaskar & Suvaaankoor Das, i/b
Digitally signed by
SHEPHALI
SANJAY
MORMARE
Date: 2022.07.13
17:42:16 +0530 Krishnamurthy & Co, for the Appellant in both Appeals.
Mr Anoshak Davar, with Sushant Arora, Ankita Karmokar, Krishna
Patel & Vaishnavi Adhav, i/b LR and Associates for Respondents
Nos. 1 to 15 in APP/422/2019.
Ms Chaitrika Patki, with Shruti Dasondi, i/b Khimani & Associates,
for Respondents Nos. 1 to 36 in APP/421/2019.
Mr Sahil Mahajan, for Respondent No. 38 in APP/421/2022 and for
Respondent Nos. 16 to 20 in APP/422/2022.
Mr Karl Tamboly, with Tanishka Desai, i/b Vashi & Vashi, for
Respondent No. 21 in APP/422/2019.
Page 1 of 4
12th July 2022
55-OSAPP-421-2019 IN NMS-1796-2018 WITH APP-422-2019 IN NMS-547-
2018.DOC
CORAM G.S. Patel &
Abhay Ahuja, JJ.
DATED: 12th July 2022 PC:-
1. The Appeal is directed against an order of 18th April 2019. This was a common order in three Suits. Suit No. 329 of 2018 was filed by certain flat purchasers of flats in Wings A & B of a development at Powai called Bhagtani Krishaang. It was filed in a representative capacity. Suit No. 1082 of 2018 was by flat purchasers in Wing B of the same project. The third Suit No. 403 of 2018 was by yet another flat purchaser. The Plaintiffs all filed Motions seeking interim relief. The developer in all these matters is one Jaycee Homes Private Limited ("Jaycee Homes") The land owner is one AD Sheth HUF through its Karta. He is a party Respondent to Appeal No. 422 of 2019.
2. By the impugned order, the learned single Judge granted relief only in Notice of Motion No. 547 of 2018 in Suit No. 329 of 2018 and in Notice of Motion No. 1796 of 2018 in Suit No. 1082 of 2018.
3. Notice of Motion No. 1666 of 2018 in Suit No. 403 of 2018 was dismissed. There is no Appeal in that matter.
4. The Appellant in these cases is one CFM Asset Reconstruction Private Limited ("CFM Asset Reconstruction") the assignee of the original mortgagee, one Xander Finance Private Limited ("Xander Finance"). Xander Finance gave a loan to the Page 2 of 4 12th July 2022 55-OSAPP-421-2019 IN NMS-1796-2018 WITH APP-422-2019 IN NMS-547- 2018.DOC developer, Jaycee Homes Private Limited. There was a development agreement between the land owner, the AD Sheth HUF, and Jaycee Homes. For the purpose of the mortgage, Jaycee Homes was the mortgagor and Xander Finance was the mortgagee.
5. The flat owners who filed suits sought protection because Xander Finance (now CFM Asset Reconstruction Private Limited) sought to enforce the mortgage inter alia by invoking entitlements under the SARFAESI Act. Evidently, this action was directed against Jaycee Homes, but equally inevitably, extended to the various flats in the project. By this time, many individuals had purchased or agreed to purchase flats in both A and B Wings.
6. In parallel actions, the AD Sheth HUF terminated the development agreement with Jaycee Homes. We are informed that B Wing is entirely occupied although without an Occupation Certificate. Wing A is only partly constructed. There is nobody in occupation. Construction stopped sometime in 2016.
7. The submission by Dr Saraf by the Appellant CFM Asset Reconstruction is not only that there is a statutory bar against a such a Suit that seeks to stall a SARFAESI action but that the recovery of an amount legitimately to CFM Asset Reconstruction cannot be thwarted by third party flat purchasers in this fashion.
8. There may be very many issues to be considered. We will endeavour as a first step to see if it is at all possible, without an assessment on merits, to arrive at some sort of an amicable Page 3 of 4 12th July 2022 55-OSAPP-421-2019 IN NMS-1796-2018 WITH APP-422-2019 IN NMS-547- 2018.DOC resolution so that the interest of all sides are adequately protected. Periodic directions will undoubtedly be required.
9. We are told that there are two flats in B Wing, B-603 and B- 1204, that are possibly available for sale and realization. Details are yet to be obtained. We direct the office bearers of the B Wing society or ad hoc/proposed society to communicate to the Advocates for the Appellants such details in regards to these two flats as are available on society records. The Appellants will also find out from public records what the status is in regard to the registered documents in respect of these flats.
10. To ensure that there is no ambiguity, the original Plaintiffs in the two Suits are also directed to file by next week a list of the flats as per their available records showing which flats have been sold to whom, whether there are registered agreements of sale or not, and how much, if any, balance consideration is to be received. The dates of the agreements of sale will be important for the simple reason that if any sales have taken place after the Appellants initiated their SARFAESI proceedings, a very different result may obtain in respect of those apartments.
11. List the matter high on board on 19th July 2022.
(Abhay Ahuja, J) (G. S. Patel, J)
Page 4 of 4
12th July 2022