Bombay High Court
Vardhaman Developers Limited vs Orbit Corp. Ltd. And Rajit Ravi Kiran ... on 24 June, 2019
Author: R.I. Chagla
Bench: R.I. Chagla
1-CHSCDL-767-19+.doc
Sharayu Khot.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
CHAMBER SUMMONS (L) NO. 767 OF 2019
WITH
CHAMBER SUMMONS (L) NO. 518 OF 2019
WITH
CHAMBER SUMMONS (L) NO. 632 OF 2019
IN
EXECUTION APPLICATION NO. 123 OF 2017
Pujit Ravi Kiran Aggarwal & Ors. ...Applicants/
Org. Defendants
In the matter between
Vardhman Developers Limited ...Plaintiff
Versus
Orbit Corporation Limited ...Orig. Defendant
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Mr. Cherag Balsara, Mr. Dikshat Mehra, Mr. Ashish Parwani, Mr.
Vibhor Kapoor, i/by Rajani Associates, for the Applicants.
Mr. Dinyar Madon, Senior Counsel, a/w Mr. Karl Tamboly, Ms.
Kausar Banatwala, Ms. Gauri Sakhardande, Mr. Viraj Bansode,
i/by Tushar Goradia, for the Plaintiff.
Ms. Kavita Ambekar, Ist Asstt. Court Receiver present.
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CORAM : R.I. CHAGLA J.
DATE : 24 June 2019
ORDER :
1. The Applicants in the present Chamber Summons (L) No. 767 of 2019 are seeking a declaration/direction from this Court that the Plaintiff by accepting Rs. 13 Crores against sale of shares of Indus Biotech Private Limited has clearly waived the event of default clause under the Consent Minutes of order. The Applicants are further seeking direction to set aside the order dated 12th June 2019 passed by the Court Receiver, pursuant to the application made by the Decree-Holder for execution of the decree. It is further prayed in the alternative that in the event of this Court coming to the conclusion that the timelines have not been waived, this Court grant an extension of time as prayed for in Chamber Summons (L) No. 518 of 2019 and Chamber Summons (L) No. 632 of 2019. Further, it is prayed for a direction to be issued to the Court Receiver to take possession of the immovable assets other than dwelling house 2/29 June 24, 2019 ::: Uploaded on - 06/07/2019 ::: Downloaded on - 14/07/2019 23:50:25 ::: 1-CHSCDL-767-19+.doc and streedhan of the Applicants as well as injunction against the Court Receiver from taking possession or any steps in furtherance execution of the decree.
2. It would be necessary to set out the facts in brief:
3. By an order dated 30th October 2018 passed by the learned Single Judge of this Court, the Consent Minutes of the order was taken on record and undertakings in the Consent Terms were accepted as undertakings to this Court. Accordingly, by the said order, the Court Receiver was appointed for various properties. It was stated in the said order that the appointment of Court Receiver in execution will continue. However, the Court Receiver except as provided in the Consent Terms is not to proceed further without specific orders of this Court in respect of any of the properties, movable or immovable of which the Court Receiver has been appointed. All injunctions except as noted in the order were to continue until further orders. 3/29
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4. Thereafter, orders have been passed by this Court from time to time pursuant to the applications made by the Applicants/Judgment-Debtors for extension of time to pay the second and third tranches under the Consent Terms. This Court has by these orders accommodated the Applicants by extending the time to pay these tranches, including by imposition of costs. The first of these orders was passed on 27th December 2018 by the Vacation Court pursuant to an Application which concerned extension of time for payment of the second tranche. By the said order an extension of two weeks was granted for making payment, although a period of four weeks was applied for by the Applicants. Inspite of this order, the amounts of Rs. 12 Crores due under this tranche remained to be paid. By a further order dated 15th January 2019, the learned Judge of this Court had taken on record the additional Consent Minutes of the order signed by the respective parties under which the sum of Rs. 12 Crores was to be paid alongwith an additional sum of Rs. 10 Crores which was agreed to be paid in installments. The additional sum of Rs. 10 Crores was payable in installments as 4/29 June 24, 2019 ::: Uploaded on - 06/07/2019 ::: Downloaded on - 14/07/2019 23:50:25 ::: 1-CHSCDL-767-19+.doc provided for in the additional Consent Minutes of the order, the first of these payments of Rs. 2 Crores was payable alongwith the third tranche. The payment of Rs. 12 Crores was ultimately made by the Applicant and recorded in order dated 31st January 2019 passed by the learned Single Judge of this Court.
5. Regarding the third tranche with which this present Chamber Summonses are concerned, it was provided in the Minutes of the order that an amount of Rs. 20 Crores out of the total amount of Rs. 55 Crores payable thereunder was to be paid on or before 5th April 2019. Since the Applicants found some difficulty in making payment of the said sum by 5th April 2019, they applied to this Court vide Chamber Summons (L) No. 518 of 2019 on 4th April 2019. They sought necessary orders for extension of time for making payment of Rs. 12 Crores towards the third tranche by four weeks from 6th April 2019 and for making payment of the balance sum of Rs. 8 Crores on or before 4th August 2019 together with part payment of Rs. 35 Crores, which were due and payable on or before 3rd August 2019. 5/29
June 24, 2019 ::: Uploaded on - 06/07/2019 ::: Downloaded on - 14/07/2019 23:50:25 ::: 1-CHSCDL-767-19+.doc They also applied to this Court for permission to sell the individual flats or a certain block of flats in Orbit Terraces Properties to purchasers as and when they are available for purchase of the flats and the net sale consideration from each flat sold would be paid to the Plaintiff/Decree-Holder till the Plaintiff received the sum of Rs. 55 Crores alongwith applicable interest/penalty as per Consent Minutes of order read with the additional Consent Minutes of order. They further sought interim injunction restraining the Plaintiff and/or its servants from valuation or sale of the properties of the Applicants which are in the possession of the Court Receiver and in turn restrain the Court Receiver from taking physical possession of the flat where the Applicant No. 1 and his family resided.
6. By an order dated 5th April 2019, the learned Judge of this Court considered the Chamber Summons (L) No. 518 of 2019 and observed that the application for extension of time for payment of Rs. 20 Crores would push back the first part of the dual scheduling of the third tranche i.e. 5th April 2019, 6/29 June 24, 2019 ::: Uploaded on - 06/07/2019 ::: Downloaded on - 14/07/2019 23:50:25 ::: 1-CHSCDL-767-19+.doc deadline. The learned Judge was initially unwilling to grant such extension. The learned Judge ultimately held that if the Applicant wanted an extension of time of four weeks for making payment, this would come at a cost of Rs. 2 Crores which would apply to the entire amount of Rs. 20 Crores. It was made clear that any further extension sought would thus come at an additional cost following the Fibonacci sequence. The learned Judge also imposed interest of 24% on the sum of Rs. 20 Crores which was payable together with the sum of Rs. 22 Crores (Rs. 20 Crores originally payable plus Rs. 2 Crores cost imposed) by 2nd May 2019. It was further observed in the order that the amount of Rs. 2 Crores payable by virtue of the additional Consent Minutes of the order recorded by the learned Judge vide order dated 15th January 2019 would be paid in addition to the sum now ordered to be paid and this to shall be paid on or before 2nd May 2019.
7. The Applicants thereafter took out another Chamber Summons being Chamber Summons (L) No. 632 of 2019, 7/29 June 24, 2019 ::: Uploaded on - 06/07/2019 ::: Downloaded on - 14/07/2019 23:50:25 ::: 1-CHSCDL-767-19+.doc wherein they sought certain directions including the direction to allow the proposed Respondent No. 1 viz. the Court Receiver, proposed Respondent No. 2 viz. Indus Biotech Private Limited and proposed Respondent No. 3 viz. Neelkamal V Siraj to intervene in the Chamber Summons and for a direction directing the original Plaintiff, immediately upon receipt of Rs. 13 Crores, to release the original share certificate, share transfer forms and Power of Attorney dated 7th December 2018 relating to the shares of Indus Biotech Private Limited in favour of Neelkamal V. Siraj alongwith its pledgee rights, title and interest over the shares owned by the Applicant No. 1 in favour of Neelkamal V. Siraj. Further consequential relief have also been sought. A further permission was sought from this Court for the payment of balance sum of Rs. 7 Crores alongwith penalty and further interest which was due and payable on or before 2nd May 2019 towards the third tranche in accordance with the order dated 5th April 2019 to be paid on or before 3rd August 2019 alongwith the part payment of Rs. 35 Crores due and payable on or before the said date. Further permission was sought in the 8/29 June 24, 2019 ::: Uploaded on - 06/07/2019 ::: Downloaded on - 14/07/2019 23:50:25 ::: 1-CHSCDL-767-19+.doc Chamber Summons as previously sought for the sale of the flats in Orbit Terraces Properties to various purchasers and to deposit the net sale consideration with the original Plaintiff till the original Plaintiff receives the entire payment as per the said Consent Minutes of the order. Similar interim orders were also sought in the Chamber Summons as had been previously sought with regard to injunctions restraining the Plaintiff as well as the Court Receiver from taking possession of the assets and/or sale of these assets of the Applicants.
8. The Chamber Summons (L) No. 632 of 2019 came up before this Court on 3rd May 2019, on which date the learned Judge of this Court thought it fit to record 'no order'. It is thereafter that the original Plaintiff/Decree-Holder filed a praecipe to the Prothonotary & Senior Master of this Court stating that one Mr. Chetan D. Mehra by his letter dated 18th May 2019, expressed his interest to purchase the equity shares of Indus Biotech Private Limited, for a sum of Rs. 13 Crores and called upon the original Plaintiff to confirm whether they were 9/29 June 24, 2019 ::: Uploaded on - 06/07/2019 ::: Downloaded on - 14/07/2019 23:50:25 ::: 1-CHSCDL-767-19+.doc interested in selling the same within seven days, failing which the expression of interest shall stand withdrawn. The matter, accordingly, came up before the Vacation Court on 27th May 2019 on which date, the Vacation Court granted permission to the original Plaintiff to sell the shares to Mr. Chetan D. Mehra and it is observed in the said order that Mr. Chetan D. Mehra i.e. the proposed purchaser was ready with the pay orders and had tendered the same to the original Plaintiff. The particulars of the pay orders have been set out in the said order. In paragraph 5 of the said order, it is recorded thus:-
"5. Since the equity shares of Indus Biotech Private Limited was part of the consent terms, it is appropriate to sell the same in terms of the expression of interest letter dated 18/05/2019. It is, therefore, directed that the said shares be sold to the purchasers as set out in the letter dated 18/05/2019. The decree holder shall hand over the shares with the signed transfer forms to the purchasers simultaneously and Mr.Kapadia undertakes that it would be done during the course of the day, against the receipt of the 10/29 June 24, 2019 ::: Uploaded on - 06/07/2019 ::: Downloaded on - 14/07/2019 23:50:25 ::: 1-CHSCDL-767-19+.doc consideration. Indus Biotech Private Limited would then transfer the shares in the name of the purchasers and once this transaction is completed the decree to be marked partly satisfied to the extent of Rs.13,00,00,000/(Rupees Thirteen Crores only). The parties also submits that once the transaction of transfer of shares is completed the power of attorney which is executed in favour of Vardhman Developers for the limited purpose of effecting the shares would stand recalled.
Order accordingly."
9. Accordingly, the sum of Rs. 13 Crores was paid over to the original Plaintiff and the decree came to be marked partly satisfied to that extent.
10. An Application was made to the Court Receiver by an order dated 13th May 2019 for acting upon the Consent Minutes of the order, particularly clause 8 thereof, and taking possession of the movable as well as immovable assets for sale of the same. The Court Receiver thereafter held a hearing 11/29 June 24, 2019 ::: Uploaded on - 06/07/2019 ::: Downloaded on - 14/07/2019 23:50:25 ::: 1-CHSCDL-767-19+.doc and by an order dated 12th June 2019 the Court Receiver held that as there was no extension of time to the Applicant herein for making payment under the said Consent Minutes of order, granted by this Court, the office had no objection to proceed as per the default clause of the Consent Terms and take further steps for sale of the assets and for possession. The hearing was thereafter adjourned and is on-going.
11. Mr. Cherag Balsara, the learned Counsel for the Applicants has submitted that the original Plaintiff by making Application to this Court for sale of the shares of Indus Biotech Private Limited and for receipt of the consideration of Rs. 13 Crores had waived the event of default clause in the Consent Minutes of the order. He has submitted that this act on the part of the original Plaintiff, disentitles him from now contending that the default clause operates and the entire decretal amount has become due and payable to the original Plaintiff. He has relied upon the orders passed by this Court from time to time which had extended the timeline for payment 12/29 June 24, 2019 ::: Uploaded on - 06/07/2019 ::: Downloaded on - 14/07/2019 23:50:25 ::: 1-CHSCDL-767-19+.doc by the Applicants of the amounts with respect to both the second tranche as well as the third tranche. He has submitted that this Court had at all times recognized that the timeline which was set for payment of these tranches was not sacrosanct and could be extended and have in fact been extended. He has also submitted that the Applicants were making all possible attempts to pay the original Plaintiff under the Consent Minutes of the order. The Applicants in pursuance thereof had taken out the above three Chamber Summons applying for additional time to pay the tranches under the Consent Minutes of the order. He has also submitted that the learned Judge in order dated 5th April 2019 granted extension for payment of Rs. 20 Crores which was payable towards the third tranche on payment of costs. He submits that it would be necessary for this Court to grant permission to the Applicants to sell the flats of Orbit Terraces Properties and deposit the sale proceeds towards payments of the tranches to the original Plaintiff under the Consent Minutes of the order. He has submitted that the value of these flats have greatly appreciated and the value at present 13/29 June 24, 2019 ::: Uploaded on - 06/07/2019 ::: Downloaded on - 14/07/2019 23:50:25 ::: 1-CHSCDL-767-19+.doc is Rs. 113 Crores as compared to the value of the flats when the Consent Minutes of the order was executed which was towards payment of the sum of Rs. 35 Crores. Accordingly, he has sought necessary directions from this Court to allow the Applicants to sell these flats and pay over the purchase consideration to the original Plaintiff in satisfaction of the Consent Minutes of the order.
12. Mr. Dinyar Madon, the learned Counsel for the original Plaintiff has submitted that the original Plaintiff by applying to this Court for sale of shares of Indus Biotech Private Limited at a purchase consideration of Rs. 13 Crores could not be held to have waived the event of default clause under Consent Minutes of the order. In fact he draws this Court's attention to Clause 11 of the Consent Minutes of the order and submits that the shares of Indus Biotech Private Limited which were deposited with the original Plaintiff could be sold by the original Plaintiff to any third party and the amounts received from the sale of the shares could be appropriated towards part 14/29 June 24, 2019 ::: Uploaded on - 06/07/2019 ::: Downloaded on - 14/07/2019 23:50:25 ::: 1-CHSCDL-767-19+.doc satisfaction of the decretal amount. The Power of Attorney has been given to the original Plaintiff by Mr. Pujit Agarwal, Applicant No. 1 for the purpose of sale, execution and registration of the shares of Indus Biotech Private Limited. He has submitted that on the default committed by the Applicants in the payment of Rs. 20 Crores together with costs of Rs. 2 Crores and the additional Rs. 2 Crores which was payable under the Consent Minutes of order and additional Consent Minutes of the order. The original Plaintiff was entitled to invoke Clause 11 of the Consent Minutes of the order. He has also drawn reference to the Application by way of praecipe made to this Court and which had not been annexed to the Chamber Summons. He has further drawn attention of this Court to the letter of Mr. Chetan D. Mehra dated 18th May 2019 whereby he had called upon the original Plaintiff to confirm whether it was interested in selling the shares of Indus Biotech Private Limited for purchase consideration of Rs. 13 Crores and it was pursuant to this letter that the Application was made to this Court. He has submitted that the purchaser Mr. Chetan D. Mehra had also 15/29 June 24, 2019 ::: Uploaded on - 06/07/2019 ::: Downloaded on - 14/07/2019 23:50:25 ::: 1-CHSCDL-767-19+.doc acknowledged the fact that it was the original Plaintiff who had the right to sell these shares under the Consent Minutes of the order. He has further relied upon the order dated 27th May 2019 passed by the Vacation Court whereby the original Plaintiff was permitted to sell the shares to Mr. Chetan D. Mehra and the transaction being completed resulted in the decree being marked partly satisfied to the extent of Rs. 13 Crores. He has thus, submitted that the Court Receiver has correctly passed the order dated 12th June 2019 pursuant to the Application of the original Plaintiff for execution of the decree in full on account of the default committed by the Applicants and by virtue of which Clauses 8 and 10 became operable. He submits that Clause 7 of the Consent Minutes of the order makes it clear that the original Plaintiff is only concerned with the amounts to be received in tranches in a timely manner irrespective of the sale. He has accordingly submitted that it was not open for the Applicants to seek permission to sell flats in Orbit Terrace Properties for making payment to the original Plaintiff under the Consent Minutes of the order.
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13. I have considered the rival submissions. It would be necessary to extract some of the clauses in the Consent Minutes of the order, which was taken on record and marked "C1" in order dated 30th October 2018 by the learned Judge of this Court. Clause 6(d) deals with the third tranche with which this Court is concerned. Clauses 7, 8, 10, 11 and 21 of the Consent Minutes of the order are set out hereunder:-
"7 VDL is only concerned with the amounts to be received in the tranches in the timely manner as mentioned hereinabove, irrespective of any transfer or sale happening as contemplated above. Any short fall or excess amount (as the case may be) to be received upon sale of aforesaid Properties as set out in clause 6 hereinabove shall be in account of Pujit and Ravi.
8. In the event, there is default in payment of any of the tranches in timely manner, Pujit and Ravi will be liable to forthwith repay the entire decretal amount alongwith interest then remaining unpaid. The Court Receiver has been appointed as Receiver of the movable/immovable properties of Pujit, Ravi and Gunjan. The Court Receiver shall 17/29 June 24, 2019 ::: Uploaded on - 06/07/2019 ::: Downloaded on - 14/07/2019 23:50:25 ::: 1-CHSCDL-767-19+.doc forthwith sell the properties of Pujit, Ravi and Gunjan (To the extent as mentioned in this Consent Term). The amounts realized from the sale thereof shall be deposited in this Hon'ble Court with liberty to VDL to withdraw the same.
The order of sale is being kept in abeyance and will only trigger on a default being committed of any of the tranches. It is expressly agreed by Pujit and Ravi that even the assets movables, immovable legally belonging to them which have not been attached by the Court Receiver the same shall be attached and sold by the Court Receiver. 9 ...
10 In the event of default of any of the tranches including the amounts payable under the grace period, Gunjan further agrees, confirms, declares and undertakes to this Hon'ble Court that her claim towards a portion of the Gamdevi flat shall stand rejected and the entire flat on the 9th Floor of the building known as "Angel" situated at Krishna Sangli Path, Gamdevi, Mumbai shall belong to and vest in Pujit and Ravi. The entire flat on the 9th floor shall be sold by the Court Receiver and the suit proceeds shall be deposited in this Hon'ble Court and VDL shall be entitled to 18/29 June 24, 2019 ::: Uploaded on - 06/07/2019 ::: Downloaded on - 14/07/2019 23:50:25 ::: 1-CHSCDL-767-19+.doc withdraw the same forthwith. The amounts so received shall be towards part payment of the Decree which is passed against Pujit and Ravi, Pujit, Ravi and Gunjan agree and undertake to this Hon'ble Court to handover quiet, vacant and peaceful possession of the said flat to the Court Receiver in order to give effect to the same and shall remove their family members, servants, pets, representatives and / or agents from the 9th floor flat. No part of these sale proceeds will be construed as being a payment by or on behalf of Gunjan. The order of sale is being kept in abeyance and will only on a default being committed.
11. In respect to sale of Shares of Indus Biotech as set out in Clauses (d) of the Consent Terms, Pujit and Tanager agree confirm and undertake to this Hon'ble Court to deposit with VDL, original share certificate of shares of Indus Biotech within 7 (seven) days from execution hereof along with up- to-date and duly signed transfer forms by Pujit, Tanger hereby confirms that it has no objection and hereby relinquishes its charge over the said shares. The charge is connection with the said shares is created in favour of VDL. VDL shall be 19/29 June 24, 2019 ::: Uploaded on - 06/07/2019 ::: Downloaded on - 14/07/2019 23:50:25 ::: 1-CHSCDL-767-19+.doc entitled to receive amounts from the sale of the Shares of Indus Biotech for the payment of third tranches in the manner as set out in clause 6(d), Pujit and Tanger agree, confirm and undertake to this Hon'ble Court that on default of payment of the amounts as mentioned hereinabove, VDL shall be entitled to transfer the shares to any third party and appropriate the sale proceeds towards part satisfaction of decretal amount. Pujit undertakes to this Hon'ble Court to give a registered Power of Attorney, within 15(fifteen) days from the execution of this Consent Terms in favour of VDL sale, execution and registration of the said shares as mentioned hereinabove, provided however, VDL will exercise its Power of Attorney upon occurrence of event of default. 12 to 20 ......
21. Pujit and Ravi agree and undertake to this Hon'ble Court to abide by the time period for payment of the tranches as mentioned hereinabove. The time for making payment is the essence of this order. Under no circumstances, Pujit and Ravi shall be entitled to any extension of the time period. Unless and until there is any 20/29 June 24, 2019 ::: Uploaded on - 06/07/2019 ::: Downloaded on - 14/07/2019 23:50:25 ::: 1-CHSCDL-767-19+.doc event of default or breach of any terms of this Consent Term, VDL will not proceed further or file any new legal proceedings in any Court / Forum / Tribunal, or register any complaint with any law enforcement authority during the terms of settlement. All the cases already filed by VDL and its representatives shall be kept in abeyance till the term of the settlement or till the event of default has occurred, as the case may be."
14. Under Clause 6(d) of the Consent Minutes of the order which provided for the third tranche payment of Rs. 55 Crores, a sum of Rs. 20 Crores was payable on or before 5th April 2019. This clause further provided that a grace period of 120 days commencing from 6th April 2019 shall be given to the Applicants No. 1 and 2 to pay the sum of Rs. 35 Crores alongwith grace period amounts specified therein subject to the Applicants paying a sum of Rs. 20 Crores on or before 5th April 2019. In the event, the amount of Rs. 20 Crores was not paid on or before 5th April 2019, the Applicants would not be entitled for the grace period of 120 days for making payment of Rs. 35 Crores and this shall be treated as a default in making payment. 21/29
June 24, 2019 ::: Uploaded on - 06/07/2019 ::: Downloaded on - 14/07/2019 23:50:25 ::: 1-CHSCDL-767-19+.doc It was further provided in the third tranche that upon payment of Rs. 20 Crores, the original Plaintiff shall forthwith release all its right, title and interest in the said shares of Indus Biotech Private Limited as described in Annexure B of the Consent Terms alongwith the original share certificates/share transfer form and Power of Attorney relating to the said shares. It is further provided that upon payment of Rs. 35 Crores alongwith grace period amounts (if applicable) the original Plaintiff shall immediately release all its right, title and interest in 19 flats as well as 30 car parks situated in building Orbit Terraces free from all encumbrances, right, title and interest under Indenture of Conveyance dated 10th September 2007 and documents entered in relation thereto. There was a further direction that in the event of the amount of Rs. 20 Crores is not received by the Plaintiff within the time mentioned, no rights in connection with the shares of the Indus Biotech Private Limited would be created or considered to have been created in favour of any prospective purchaser and any term sheet entered into by Applicant No. 1 for shares of Indus Biotech Private Limited shall stand cancelled. 22/29
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15. Clause 7 of the Consent Terms extracted above makes it clear that the original Plaintiff was only concerned with the amounts to be received in the tranche in the timely manner as mentioned in each of the tranches irrespective of any transfer or sale happening. It was further provided in Clause 8 that in the event, there is default in payment of any of the tranches, the entire decretal amount shall be repayable by the Applicants to the original Plaintiff. The Court Receiver had been appointed as Receiver of the movable/immovable properties of the Applicants and shall in the event of the default sell these properties and the amounts realized from the sale thereof shall be deposited in this Court with liberty to the original Plaintiff to withdraw the same. Further, under Clause 10 it was provided that in the event of default, the concerned property viz. Flat on 9th floor, Angel, situated at Krishna Sangli Path, Gamdevi, Mumbai be sold by the Court Receiver and the Suit proceeds shall be deposited in this Court and the original Plaintiff will be entitled to withdraw the same forthwith. Clause 11 which is the material clause for consideration expressly provides that the original share 23/29 June 24, 2019 ::: Uploaded on - 06/07/2019 ::: Downloaded on - 14/07/2019 23:50:25 ::: 1-CHSCDL-767-19+.doc certificates of Indus Biotech Private Limited alongwith duly signed transfer forms would be deposited by Applicant No.1 and one Tanager with the original Plaintiff within seven days from extension of the Consent Minutes of order. Further the original Plaintiff shall be entitled to receive the amounts from the sale of shares of Indus Biotech Private Limited for payment of the third tranche in the manner set out in Clause 6(d). In fact, an undertaking has been given by the Applicant No. 1 and Tanager that on default of payment of the amounts as mentioned in Clause 6(d), the original Plaintiff shall be entitled to transfer the shares to any third party and appropriate the sale proceeds towards part satisfaction of the decretal amount. The Applicant No. 1 further undertook to give a registered Power of Attorney in favour of the original Plaintiff for sale, execution and registration of the said shares, provided that the original Plaintiff exercise this Power of Attorney upon occurrences of event of default.
16. It is thus clear from the Consent Minutes of the 24/29 June 24, 2019 ::: Uploaded on - 06/07/2019 ::: Downloaded on - 14/07/2019 23:50:25 ::: 1-CHSCDL-767-19+.doc order that the original Plaintiff had the right to sell the said shares of Indus Biotech Private Limited to any third party towards part satisfaction of the decretal amount. It is in this context that the original Plaintiff made an Application by way of praecipe to this Court upon interest shown by Mr. Chetan D. Mehra to purchase the shares of Indus Biotech Private Limited for the sum of Rs. 13 Crores and sought direction of this Court to sell the said shares. It is also pertinent to note at this stage, that the Chamber Summons taken out by the Applicants for sale of the shares of Indus Biotech Private Limited was not entertained by the learned Judge of this Court. When the said Chamber Summons (L) No. 632 of 2019 came up, on 3rd May 2019, the learned Judge recorded "No Order". The original Plaintiff in my view has correctly invoked Clause 11 of the Consent Minutes of the order and sought permission of this Court to sell the shares and appropriate the purchase consideration in part satisfaction of the decree. The Court by order dated 27th May 2019 has expressly granted permission to the original Plaintiff to sell the shares and held that the 25/29 June 24, 2019 ::: Uploaded on - 06/07/2019 ::: Downloaded on - 14/07/2019 23:50:25 ::: 1-CHSCDL-767-19+.doc purchase consideration of Rs. 13 Crores would be in part satisfaction of the decree.
17. I find that there has been no waiver of the event of default Clause under the Consent Minutes of the order. In fact, the original Plaintiff has only proceeded in conformity with the default Clause under the Consent Minutes of the order by sale of the said shares of Indus Biotech Private Limited and appropriation of the sale proceeds in part satisfaction of the decree. Further, the Applicants have not paid the sum of Rs. 7 Crores as well as the costs imposed by this Court vide order dated 4th April 2019 of Rs. 2 Crores. In addition, a sum of Rs. 2 Crores which was payable under the additional Consent Minutes of the order recorded by this Court vide or dated 15th January 2019 has not been paid. There is thus, a clear default on the part of the Applicants to pay the third tranche. Thus, the default Clause viz. Clause 8 of the Consent Minutes of the order has come into operation and the Court Receiver appointed as Receiver of the movable/immovable properties of the Applicants 26/29 June 24, 2019 ::: Uploaded on - 06/07/2019 ::: Downloaded on - 14/07/2019 23:50:25 ::: 1-CHSCDL-767-19+.doc is entitled to forthwith sell the properties and the amounts realized from the sale shall be deposited in this Court with liberty to the original Plaintiff to withdraw the same. Thus, the decretal sum amount of Rs. 175,01,39,845/- is due and payable together with interest as decreed in the Suit.
18. The Chamber Summons which seeks declaration of setting aside the order dated 12th June 2019 passed by the Court Receiver cannot be granted as the Court Receiver has only acted in conformity with his appointment under the Consent Minutes of the order and the Clauses 8 and 10 of the Consent Minutes of the order. Having held that the receipt of Rs. 13 Crores against sale of shares of Indus Biotech Private Limited by the original Plaintiff is under Clause 11 of the Consent Minutes of the order, there can be no waiver of the event of default clause under the said consent terms. Further, I have observed that the learned Judge by order dated 5th April 2019 had granted an extension for payment of Rs. 20 Crores under the Fibonacci sequence and which was payable on 2nd 27/29 June 24, 2019 ::: Uploaded on - 06/07/2019 ::: Downloaded on - 14/07/2019 23:50:25 ::: 1-CHSCDL-767-19+.doc May 2019. However, I am not inclined to grant further extension of time for payment of the balance sum of Rs. 7 Crores towards the third tranche with cost of Rs. 2 Crores and additional sum of Rs. 2 Crores payable with the third tranche pursuant to the additional Consent Minutes of the order by imposition of additional costs. In my view, the timeline prescribed under the Consent Minutes of the order can only be further extended by consent of parties as had been recorded by the learned Single Judge of this Court in order dated 15th January 2019 who had extended time upon additional Consent Minutes of order being executed between the parties. Further, the learned Judge of this Court who passed order dated 5th April 2019 has by order dated 3rd May 2019 not entertained the Application for further extension of time by the Applicants for payment of Rs. 24 Crores, including by selling the shares of Indus Biotech Private Limited to pay a portion of the sums due under the third tranche. The said shares have in fact been sold by the original Plaintiff and the sale proceeds appropriated in part satisfaction of the decree. The original Plaintiff as 28/29 June 24, 2019 ::: Uploaded on - 06/07/2019 ::: Downloaded on - 14/07/2019 23:50:25 ::: 1-CHSCDL-767-19+.doc mentioned above has invoked the event of default Clause and applied to the Court Receiver for execution of the decree.
19. I thus find no merit in the Chamber Summons (L) No. 767 of 2019 taken out by the Applicants and accordingly, the Chamber Summons is dismissed with no order as to costs.
20. In view of the said Chamber Summons being dismissed, the remaining two Chamber Summonses being Chamber Summons (L) No. 518 of 2019 and Chamber Summons (L) No. 632 of 2019 do not survive and also stand dismissed.
[R.I. CHAGLA J.] 29/29 June 24, 2019 ::: Uploaded on - 06/07/2019 ::: Downloaded on - 14/07/2019 23:50:25 :::