Bombay High Court
Maria Saldanha And Anr vs Charul N. Doshi And Anr on 20 December, 2019
Author: G. S. Patel
Bench: G.S. Patel
901-CARBPL582-19+.DOC
Arun
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMM ARBITRATION PETITION (L) NO. 582 OF 2019
Kanta Mohan Shinde & Ors ...Petitioners
Versus
Charul N Doshi & Anr ...Respondents
WITH
COMM ARBITRATION PETITION (L) NO. 581 OF 2019
Naria Saldanha & Anr ...Petitioners
Versus
Charul N Doshi & Anr ...Respondents
WITH
COMM ARBITRATION PETITION (L) NO. 583 OF 2019
Jimmy Adil Batliwala & Anr ...Petitioners
Versus
Charul N Doshi & Anr ...Respondents
WITH
COMM ARBITRATION PETITION NO. 689 OF 2019
Sharifabai Kutubuddin Wakf-Il-Aulad Trust & ...Petitioners
Ors
Versus
Charul N Doshi & Anr ...Respondents
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WITH
COMM ARBITRATION PETITION (L) NO. 584 OF 2019
Azeem Qamar & Anr ...Petitioners
Versus
Charul N Doshi & Anr ...Respondents
WITH
COMM ARBITRATION PETITION (L) NO. 585 OF 2019
Mehrunissa Rahman Alias Nazima & Ors ...Petitioners
Versus
Charul N Doshi & Anr ...Respondents
Mr Karl Tamboly, with Ms Niyathi Kalra, Ms Rujuta Patil, Ms S
Bhasi and Ms Maira Patel, i/b Negandhi Shah & Himayatullah,
for the Petitioners in all matters.
Mr Kalpesh Joshi, with Ms Nisha Shah, i/b Kalpesh Joshi &
Associates, for Respondent No.1 in all matters.
Mr Sanjay Jain, with Mr Anil D'Souza for Respondents Nos. 3 to 6 in
CARBPL/582/2019.
Mr Simil Purohit, with Ms Ketaki G Mehta and Ms Debashree Dey,
i/b Desai & Diwanji, for the Contractor, Generic Engineering
Constructions & Projects Ltd.
Mrs Charul Doshi and Mr Amit Doshi, present in Court.
CORAM: G.S. PATEL, J.
DATED: 20th December 2019 PC:-
1. I do not propose in today's order to recap all the previous orders. I will only note the dates of the orders so that these can be read as necessary. The previous orders from the time that the matter Page 2 of 11 20th December 2019 ::: Uploaded on - 21/12/2019 ::: Downloaded on - 22/12/2019 00:55:25 ::: 901-CARBPL582-19+.DOC was before me are of 8th November 2019, 20th November 2019, 5th December 2019, 12th December 2019, 13th December 2019, 16th December 2019 and 19th December 2019.
2. The property as I have previously noted is at Plot No. 10, Dadar Matunga Estate, CS No. 1/1203 & CS No. 31/10 of the Matunga Division.
3. The owner of the plot is Sharifabai Kutubuddin Wakf-ul- Aulad Trust and others, the Petitioners in Commercial Arbitration Petition No. 689 of 2019. One of the trustees is Mehrunissa A Rahman the Petitioner in Commercial Arbitration Petition (L) No. 585 of 2019. The owners had commercial premises in the old structure which they had let out to third parties. All the other Petitioners in Commercial Arbitration Petitions (L) Nos. 582, 581, 583 and 584 of 2019 are occupants/tenants of the residential premises in the building that once stood on the plot. It has been demolished. What stands there now is a partial construction only up to the plinth. There would ordinary be a context between the owners and the occupants on the one hand and the Aadinath Developers ("Aadinath") on the other. The issue gets complicated because there is an unpaid contractor, ("Generic") represented by Mr Purohit. It get further complicated because there are what I will call the free sale fat purchasers, three of whom are represented by Mr Jain and one of whom is represented yesterday by Mr Kini. Mr Jain's clients have between them apparently agree to purchase three fats in the proposed building, being fat Nos. 1402, 1502 and 1602. These are the contesting groups.
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4. The lowest common denominator and I use all three words advisedly in all this is Aadinath. Generic is its unpaid contractor. Its claim is disputed.
5. The owners and the occupant/tenants have a development agreement with Aadinath. Aadinath has not performed its obligations. There are huge arrears of transit rent. Aadinath has taken money from the third party fat purchasers. There is an allegation, partly true, of some round-tripping or at least return of an alleged advance. The nomenclature is irrelevant.
6. Since yesterday, Mr Jain who appears for some of the third party fat purchasers, has attempted to bring some sort of order to end this chaos and present at least a rational solution so that the original owners/occupants and the third party fat purchasers achieve their objectives.
7. Unfortunately all of this is predicated on Aadinath being able to meet certain fnancial milestones. Currently that is not possible.
8. The essence that emerges today is that Aadinath received some amounts including from Mr Jain's clients, the third party fat purchasers, and proceeded to give loans to yet others in various tranches. These debtors are in three groups. One is Tandel who or whose entity Mobile Plus received large tranches. The others are M/s Rane and Arakkan and the third is one Kiran Manasingh. These amounts received as advances for fat sales from Mr Jain's clients were never used to pay transit rent to any of the afected Page 4 of 11 20th December 2019 ::: Uploaded on - 21/12/2019 ::: Downloaded on - 22/12/2019 00:55:25 ::: 901-CARBPL582-19+.DOC original owners/occupants nor to clear the debts of Generic, the contractor. These funds were simply parked with these three debtors.
9. This is after all a Petition under Section 9. It is true that for the purposes of protective relief, parties who are not signatories to an agreement with the arbitration clause may be brought before the Court in a Section 9 Petition, but they obviously cannot be part of an arbitration. Mr Jain's clients are hereby on invitation and at suferance, since I found that Aadinath was persistently changing versions and accounts of Mr Jain's clients' role and their involvement, moving from an initial description of them as investors to a later description of them as purchasers who had made only part payment and then to a description of purchasers who had made full payment, and fnally to a description of purchasers who made part payment but got part of their part payment back.
10. In all this, Aadinath's conduct has been less than stellar and that is putting it extremely mildly. It is almost impossible to get any accurate information from it. Every time a disclosure is ordered, some new problem is exposed and some new trouble comes to light. In fact, from what is being told to me in Court, it seems that Aadinath has taken money from everyone, given large chunks of it to some people but has not paid anybody to whom it was contractually bound and has also not fulflled its contractual promises.
11. Aadinath believes that no matter what it does and no matter what it says, and certainly no matter how it chooses conduct itself in Page 5 of 11 20th December 2019 ::: Uploaded on - 21/12/2019 ::: Downloaded on - 22/12/2019 00:55:25 ::: 901-CARBPL582-19+.DOC Court, it has some inalienable right to present its case and argue indefnitely. Aadinath is wrong. There is no such right of audience available to a party who does not come to Court with clean hands. That law is at least 700 years old. It will not changed for Aadinath. It has had repeated opportunities to make a clean breast of things, and present a clear and complete disclosure. It is not unreasonable for a court to demand or expect truthfulness or honesty. Instead, Aadinath has only systematically muddied the waters with every successive afdavit. It has made partial disclosures. It has deliberately misled the Court. This is quite apart from its failure to abide by solemn undertakings given to my learned predecessors and which is the subject matter of record in previous orders as well. Whether one views it from the perspective of contempt or of an equitable right makes little diference at this stage. Aadinath must be put to terms and unless it fulfls those terms, serious consequences must now follow. It simply cannot be that Aadinath gets rewarded with more and more hearings and more and more consumption of Court's time without consequences. In fact its conduct up to now is sufcient for me to make an order of costs against it which would run upwards of at least Rs 1 crore if not more. If Aadinath believes that the Court's time is worthless, it has another think coming. If I am not making an order of costs today it is only because I believe it will further complicate the matter, but this message Aadinath will get clearly: it will not be permitted to argue unless it is able to satisfy the conditions and requirements that I will now proceed to specify.
12. Aadinath and its lawyers have understood the gravity of the situation. I have unconditional apologies from both. I will accept the apology from Mr Joshi as presented. The apology from Aadinath, its Page 6 of 11 20th December 2019 ::: Uploaded on - 21/12/2019 ::: Downloaded on - 22/12/2019 00:55:25 ::: 901-CARBPL582-19+.DOC proprietor Charul Doshi, and her son Amit who has been conducting the proceeding and instructing Mr Joshi receives only a qualifed acceptance, conditional upon compliance with the following directions. Aadinath and Doshi mother and son are both in court and have explicitly in court from the witness box consented to the rest of this order.
13. Before I come to that there is a concerned regarding Mr Jain's clients. I should not be misunderstood to have adjudicated their claim against Aadinath and their claims are only against Aadinath as has transactions with Aadinath. I note this because in the hearing earlier this afternoon Mr Tamboly for the Petitioners did make a suggestion to Mr Jain that these third party fat purchasers should recoup their alleged investment and exit. On instructions, Mr Jain was compelled to say that his clients then did want to pursue their rights to take fats. Much later, after matters had considerably moved along, when Mr Jain took instructions again and attempted to revive the earlier suggestion and sought to exit, Mr Tamboly by then had instructions to say that that ofer of an exit was no longer open. There is certainly no privity of contract between the third party fat purchasers and the owners/ occupants. Whatever may be the remedies between the third party fat purchasers and Aadinath, these will remain untouched by the present order except to the extent that those rights may be afected by the consequences of a potential default by Aadinath of the directions that now follow.
14. Thus: Between the third party fat purchasers represented by Mr Jain and the owners/occupants represented by Mr Tamboly, there is admittedly no contract at all. But this only speaks to a Page 7 of 11 20th December 2019 ::: Uploaded on - 21/12/2019 ::: Downloaded on - 22/12/2019 00:55:25 ::: 901-CARBPL582-19+.DOC question of arbitrability and the existence of an arbitration agreement. As between them and in regard to the Dadar property, they may yet be rival contentions on both sides. Whether those contentions and rights are claimed through Aadinath or separately from Aadinath is not something I am called upon to decide. All contentions between the third party fat purchasers and the original owners and occupants on the other are expressly kept open for appropriate proceedings. Mr Jain's clients' claims are disputed by Mr Tamboly.
15. Mr Joshi on behalf of Aadinath Developers says that there is an amount of Rs. 8,47,50,000/- is due from these three debtors mentioned above. He seeks time until 31st January 2020 to bring this amount into Court.
16. This cannot be granted unconditionally and Mr Joshi has instructions from Amit Doshi, the son of the proprietor of Aadinath to agree. Mr Joshi also states on instructions that the entire arrears of transit rent due to the owners and occupants will be cleared by 31st December 2019. I am not in fact accepting the request for time until 31st January 2020 at all. That itself will be conditional upon fulflment of the promise frst in time, i.e. of payment by 31st December 2019 of all arrears of transit rent.
17. There is another complication: one of the tenants Mr Jimmy Batliwala is currently in transit accommodation on leave and license basis in Khar. The arrangement was that Aadinath was to pay the licensor, one Lalwani, a person who lives in Barbados, but Aadinath Page 8 of 11 20th December 2019 ::: Uploaded on - 21/12/2019 ::: Downloaded on - 22/12/2019 00:55:25 ::: 901-CARBPL582-19+.DOC has not paid either Batliwala or Lalwani. Lalwani has thrreatned Mr Batliwala with immediate eviction from the licensed premises at Khar unless an amount of Rs. 10 lakhs is paid by Monday, 23rd December 2019. Mr Joshi on instructions from Amit Doshi states that the amount will be paid to Mr Lalwani or into an account that he nominates by Monday, 23rd December 2019 or that he will persuade Mr Lalwani to confrm by email or message including to Mr Batliwala that Mr Batliwala and his family will be entitled to continue in occupation until 15th February 2020. It will not be fair to expect Mr Lalwani to extend this period indefnitely and Mr Batliwala may have to start making alternative arrangements since, going by the past record, nobody can have any great confdence in Aadinath to begin with.
18. I will accept Mr Joshi's statement that all arrears of transit rent including the amount due to Mr Batliwala's licensor will be paid in full by 31st December 2019. Since the Court ofces are closed that amount is to be remitted in the name of the Advocates for the Petitioner, M/s. Negandhi, Shah & Himayatullah. If that payment is made in full in accordance with the statement tendered by Mr Tamboly and which I am taking on record and marking "T1" for identifcation with today's date, then time will be extended till 31st January 2020 for Aadinath to bring in the amount of Rs. 8,47,50,000/- from its debtors (Tandel, M/S Rane and Arakkan and Kiran Manasingh).
19. Upon that amount being deposited with M/s. Negandhi, Shah & Himayatullah, those attorneys will arrange to make a Page 9 of 11 20th December 2019 ::: Uploaded on - 21/12/2019 ::: Downloaded on - 22/12/2019 00:55:25 ::: 901-CARBPL582-19+.DOC prorated distribution in accordance with the table at the earliest possible. Consequently, Mr Batliwala may communicate the substance of this order to his licensor Mr Lalwani as well.
20. In the event Aadinath fails to adhere to this commitment to bring in the amount of arrears of transit rent by 31st December 2019, then, on instructions from Amit Doshi Mr Joshi agrees accepts and acknowledges that Aadinath Developers will accept without protest the termination of the Development Agreement dated 24th November 2010 by the occupants/owners and will not claim any rights under or in respect of it. It will not make any application for a restraint against the owners or the occupants from appointing another developer or proceeding in such manner as they deem ft with a development of the project. It is made clear that this is a conditional consequence that will occur only upon an event of default.
21. In order to ensure that there is absolutely no misunderstanding about this I have had Amit Doshi afrm a handwritten Afdavit. This is also jointly afrmed by Charul Doshi, the proprietor of Aadinath Developers. The Afdavit is translated into Gujarati for Ms Charul Doshi. The Ofcial Translator is present in Court. This is necessary to protect Mr Joshi, their Advocate, lest he be accused later by Aadinath/Doshis of having said something without instructions or contrary to instructions.
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22. Again this is a consequence only upon occurrence of the foregoing event of default. The Afdavit is taken on fle. The statements in Afdavit are accepted as undertakings to the Court.
23. List the matter for compliance and directions as between the Petitioners and Aadinath Developers on 6th January 2020.
24. Both Amit Doshi and Charul Doshi are present in Court while the order is dictated. Charul Doshi had briefy left Court but was summoned back to Court.
25. All Afdavits to be fled in the Registry.
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