Bombay High Court
Shamitha Shetty vs Akshat Hegde And 3 Ors on 27 January, 2021
Author: G. S. Patel
Bench: G.S. Patel
27-IAL1010-2021 IN SL995-2021.DOC
Atul
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INTERIM APPLICATION (L) NO. 1010 OF 2021
IN
SUIT (L) NO. 995 OF 2021
Shamitha Shetty ...Plaintif
Versus
Akshat Hegde & Ors ...Defendants
Mr Karl Tamboly, with Mr Sameer Pandit & Mr Pranay Kamdar,
i/b Wadia Ghandy & Co, for the Plaintiff
Mr Shyam Kapadia, with Mr Bhavik Mehta and Mr Sahil Hirani, i/b
Dhruve Liladhar & Co, for Defendant Nof1f
Ms Gauri Joshi, i/b Ganesh & Co, for Defendant Nof2f
CORAM: G.S. PATEL, J
DATED: 27th January 2021
PC:-
1.This Interim Application in a partition Suit between the Atul G. siblings will need an urgent ad-interim order. This is particularly Kulkarni necessary in view of the more than somewhat remarkable Digitally signed by submissions being made on behalf of the 1st Defendant.
Atul G. Kulkarni Date: 2021.01.28 11:08:58 +05302. The Plaintiff Shamithaf is the sister of Defendants Nos. 1 and 2f Akshat and Bharat. These three are the children of one Chandrashekhar Hegdef since deceased.
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3. The property in question is described at page 26. This is a structure known as Shamitha Terrace at the junction of Lamington Road and Girgaon Back Road at CS No. 1264 (part) and 3/1264 of the Girgaon Division.
4. It is not in dispute before me that under a registered Deed of Transfer dated 9th June 2005f following the dissolution of a private trust set up by the siblings' paternal unclef 50% in this property came to Shamitha and 25% each came to Akshat and Bharat. Thus in the partition suitf the shares of the partiesf i.e. the Plaintif and the two Defendants are accepted and admitted. The learned Advocate for Defendant No. 2 also accepts this.
5. There willf thereforef have to be an immediate preliminary decree declaring the shares of the Plaintif and Defendants Nos. 1 and 2 in these proportions in the Suit itself. Drawn up decree is dispensed with.
6. This preliminary decree will be in terms of Order XX Rule 18(2).
7. The reason for not making any further order in terms of that or allied provisions (for referring the matter to the Commissioner for Taking Accounts etc for determining values of the property) is because of the ad interim applicationf to the merits of which I will turn now.
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8. It seems that there are several units or tenements in Shamitha Terrace. These are in possession of third parties. The terms of occupancy may vary from unit to unit. This means that while some may be tenanciesf others may be on a leave and license basis. Two licensees are shown as Defendants Nos. 3 and 4 in the Suit and in the Interim Applicationf Precia Jewels LLP and Yes Bank Ltdf respectively
9. Mr Kapadia on behalf of the 1st Defendant says that there will be a question to be addressed about how some of these tenancies have changed hands. He maintains that any transfer or surrender of tenancy would only be for consideration becausef according to his clientf "as the Court well knows"f no tenancy in Mumbai "is ever transferred or relinquished otherwise than for consideration". I 'know' nothing of the sort. I have no doubt that the 1st Defendant willf at some point in this Suitf have to prove the correctness of this assertion. This will be a fact that will be provedf disproved or not proved as required by the Evidence Act. I decline Mr Kapadia's invitation to take 'judicial notice' of this fact (under the Evidence Actf thus dispensing with proof ). The provisions for 'judicial notice' cannot be used like thisf and this tendency to demand that courts take 'judicial notice' of anything and everything under the sun is to be deprecated. The Evidence Act is very precise about the circumstances in which courts can take judicial notice of any particular matterf thing or fact. There is no room for whimsicality here.
10. It is also undisputed that Chandrashekhar Hegdef the three siblings' fatherf died on 11th July 2012. In his lifetimef he Page 3 of 14 27th January 2021 27-IAL1010-2021 IN SL995-2021.DOC accumulated sizeable debts. In particularf there was an indebtedness to the Punjab National Bank ("PNB"). There is an averment in the plaint that Akshat was a co-borrower with Chandrashekhar for the PNB loan. In any casef Shamitha accepts that she was a guarantor of these PNB loans. It seems that PNB loans were cleared by 28th May 2018f when PNB executed a Deed of Subrogation. A copy of this is annexed. This tells us that the debt to PNB was only cleared a good six years or after Chandrashekhar Hegde passed on.
11. I may note briefyf as this is also undisputedf that Chandrashekhar Hegdef the father of the Plaintif and two Defendants No. 1 died on 11th July 2012. He had accumulated sizeable debts and there was an indebtedness in particular to Punjab National Bank ("PNB"). There is an averment in the plaint that Akshatf Defendant No. 1 was a co-borrower with Chandrashekhar Hegde for the PNB loan but I will await an Afdavit in Reply on that aspect of the matter.The Plaintif says that she was also a guarantor of these PNB loans. In any casef it seems that PNB loans were cleared by 28th May 2018f when PNB executed a Deed of Subrogation. A copy of this is annexed. This tells us that the debt to PNB was only cleared a good six years or after Chandrashekhar Hegde passed on.Mr Kapadia submits that in his lifetime Chandrashekhar Hegde held a Power of Attorney from Shamitha and possibly from Akshat and Bharat as well. The claim is that in his lifetime Chandrashekhar Hegde arranged afairs so that the income from one particular unit at leastf and possible moref came entirely to Akshat to the exclusion of the other two siblings. Chandrashekhar was obviously acting as a Constituted Attorneyf because as I have notedf ownership of Shamitha Terrace had as early as 2005 passed Page 4 of 14 27th January 2021 27-IAL1010-2021 IN SL995-2021.DOC not to Chandrashekhar Hegde but to his three childrenf Shamithaf Akshat and Bharat.
12. This takes us to the two premises in question. One of these is said to be in occupation of Defendant No. 3f Precia Jewelsf a limited liability partnership. The question in regard to the Precia Jewels occupancy is what is the arrangement that has been executedf when and with or by whom. There are two agreementsf both of the same datef 4th December 2018. In onef the premises in question are about 1f700 sq ft carpet area on the third foor of Shamitha Terrace in the South Wing of that building. In the secondf the premises are 2f175 sq ft on the third foor of the same building but in the North Wing. Copies of these two agreements are at pages 145 and 166. Both the leave and license agreements are only between Akshat and Precia Jewels. The other two siblings are not parties to these documentsf even as confrming parties.
13. The questionf thereforef immediately is what is the basis on which Akshat claims to be entitled to the premises that he gave out on leave and license to Precia Jewels and in what capacity he purported to do so. That is clearly the question that presents itself on a reading of these two documents. Both documents begin by saying something that is to my mind utterly extraordinary. In the very frst recital each document says that Akshat is "the lawful tenant" of these premises on the third foor. This is precisely the difculty. At the relevant timef in .2018 Akshat was (as he still is) a 25% owner of the entire building andf thereforef every unit in that building. It is entirely unclear at this stage how Akshat could possibly describe himself as to be 'the tenant'. The question would Page 5 of 14 27th January 2021 27-IAL1010-2021 IN SL995-2021.DOC be whose tenant? And it is difcult to conceive of a situation where a landlord is his own tenant in whole or in part. The agreements do not say that for these premises Akshat is a tenant of Shamitha and Bharatf or that he is a part-owner and part-tenant (which would have its own complications). That is not even the argument presented before me. What is suggested is only this: that because the earlier tenant or tenantss of these third foor premises surrendered the tenancies and seems to have somehow surrendered these to Akshat alonef Akshat succeeded to the tenancies and became the transferee of the tenancies of which he is himself a part-owner. The suggestion is not that there was a surrender of the tenanciesf for that can only be to a landlord. The specifc suggestion is of a transfer to Akshat of a tenancy by the erstwhile tenant. Indeedf Mr Kapadia makes bold to say that as regards these premises his client "wears two hats"f i.e. that of a 100% tenant and a 25% landlord. Prima facief this is difcult to conceive. I can understand him relinquishing a 25% interest to take up a tenancy; or evenf in a pinchf being an owner of even an undivided 25% and a tenant of his two siblings (who own the rest) for the remaining 75%f though that would have difculties of its own. That would require the two siblings to join in the documentf andf absent thatf there is simply no situation in which Akshat could be the "lawful tenant" of the whole of the third foor premises. At least not prima facie. And -- equally prima facie -- Akshat may possess many items with which he may wish to adorn his solitary headf but in all this millineryf it is only the landlord's that fts. Uneasy must lie the landlord's head that wears a tenant's turban. Also prima facie. Just because this is a partition suitf and every party to the partition is a plaintif and every party is a defendant does not mean that any landlord can also be his own tenant.
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14. The immediate question is therefore to assess howf besides this wholly untenable constructf Akshat claims exclusivity over the income generated from the licensing of these premises.
15. I note this for a limited purpose. I am not satisfed with the explanation ofered. I do believe it is necessaryf having regard to the manner in which Akshat claims to have acquired this so-called 'tenancy'f to appoint the Court Receiver to take symbolic possession of the Precia Jewels premises. I amf howeverf at present making no order in regard to Akshat bringing into Court any amount that he may have earned as license fee from Precia Jewels. I will defer that consideration to a later datef after Replies and Rejoinders have been fled. Akshatf howeverf is put to notice that there may well be an order requiring him to bring into Court the entire amount that he has received as license fees. At presentf I do not think it is wise to permit him to further transact these third foor premises.
16. The Yes Bank letting standsf apparentlyf on a diferent footing. The premises in question are on the ground foor of Shamitha Terrace. They were let out to Yes Bank as a branch ofce some time in Chandrashekhar Hegde's lifetime. That letting or license ended in 2019. Mr Kapadia does not have the exact date when it is ended but he does have instructions to state that after the original term endedf Yes Bank has continued to occupy those premisesf but strangely enoughf as between Akshat and Yes Bank there is not a scrap of writingf let alone a registered stamped Page 7 of 14 27th January 2021 27-IAL1010-2021 IN SL995-2021.DOC document by which Yes Bank can be shown to be a licenseef tenant or otherwise in possession of these premises. There is equally no doubt that since 2019 Akshat alone has received the entire fees or compensation being paid by the Yes Bank in respect of the ground foor branch ofce.
17. Mr Kapadia's answer to this is that it was Akshat alone who substantially discharged the PNB debt. An amount of Rs. 86 lakhs was Shamitha's contribution. Bharat apparently contributed nothing. This was the need for a Deed of Subrogation in the frst place. The argument is that Akshat had to raise fnances to make payment of the remaining amount of the one-time settlement with PNB. He incurred debts. The entire earning from the Yes Bank licensing fee was used to pay of these debts andf thereforef efectively can be correctly said to have been used to pay of the debts of his father Chandrashekhar Hegde. According to Mr Kapadiaf this is a sufcient answer to Akshat having exclusive rights to the Yes Bank license fee income.
18. To my direct question as to whether there is any documentation to show any assent or agreement of the co-sharers/co-owners that after 2019 Akshat would solely receive the entire consideration from Yes Bank and use this to pay of the debtsf the answer I received is that there is no such documentation.
19. This is a wholly unsatisfactory state of afairs. At the very leastf the Precia Jewels-occupied premises and Yes Bank-occupied premises must be safeguarded in the interest of the admitted co-
Page 8 of 1427th January 2021 27-IAL1010-2021 IN SL995-2021.DOC owners of the propertyf including Akshat himselff but to the extent of 25%. The remaining 75% cannot be put into jeopardy.
20. As I noted earlierf I am making no order against Akshat to bring in the license fees received from Precia Jewels pending a Reply. I cannot claim that the answers so far ofered across the Bar are satisfactory but perhaps on a Replyf this aspect of Akshat being exclusively entitled to the third foor premises occupied by Precia Jewels will need to be considered.
21. But the situation is entirely diferent as regards Yes Bank. Every single bit of the necessary documentation is missing. After 2019f when the original agreement with Yes Bank endedf I do not see how Yes Bank could have continued without a written registered and stamped documentation. There is none. I do not see how Akshat could have utilized that income (emanating from undocumented letting) exclusively for any purpose at all without something in writing from the other co-sharers/co-owners of the property.
22. I willf thereforef make an order which I believe is limitedf although Mr Kapadia says it is excessive and harsh. I think there is a more than sufcient prima facie case for grant of interim relief. The order that I propose causes Akshat no prejudice whatsoever so far as the appointment of Receiver is concerned. Nobody's possession is being disturbed. No rights are being fnally determined. To this extentf the balance of convenience is with the Plaintif. If reliefs are Page 9 of 14 27th January 2021 27-IAL1010-2021 IN SL995-2021.DOC denied there is every chance that the Plaintif's rights and those of the 2nd Defendantf Bharatf may well be in jeopardy.
23. Accordinglyf there will a Receiver appointed to take symbolic possession of the Precia Jewels premises in the South and North Wing of Shamitha Terrace at Dadasaheb Bhadkamkar Marg (Lamington Road). The Receiver will not disturb the possession of Precia Jewels. The Receiver's board is not to be placed on the premises but will be placed on an inconspicuous part inside the premises. Precia Jewels is required to enter into a nominal agency agreement with the Receiver without royalty. Any further compensation that Precia Jewels is to pay on a monthly basis willf from February 2021 onwardsf be deposited with the Court Receiverf High Courtf Bombay.
24. All contentions in regard to the entitlement of shares are expressly kept open for consideration at a later date.
25. There will also be a similar order in regard to the Yes Bank premises on the ground foor of Shamitha Terrace. Againf all future payments by Yes Bank are to deposited with the Court Receiverf High Courtf Bombay and the Receiver is to take only formal symbolic possessionf placing his board on an inconspicuous internal part of the premises. An authorized ofcial of the Yes Bank will enter into a similar nominal agency agreement with the Court Receiver without payment of royalty.
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26. The amount that Akshat has earned from Yes Bank from 2019 onwardsf howeverf stands on a diferent footing. Here againf I believef the Plaintif has made out a prima facie case. The balance of convenience argument and the prejudice argument require slightly diferent considerations. This is because Mr Kapadia argues on instructions that this amount has actually been used to discharge what is efectively an inherited family debt or at least a substantial portion of it. That does need to be shown. At presentf there is nothing to show this. But what is signifcantf as I noted earlierf is the complete absence of even minimally required documentationf both in regard to the continuance of Yes Bank in the premises and to the agreement with the siblings to use this income to discharge the loans taken to pay of the PNB debt. I can understand and would not have made this order had Mr Kapadia's instructions been to say that there is indeed such documentation and that this can be produced on an Afdavit in Reply. Akshat is present in Court and Mr Kapadia's instructions are clearly to say that there is in fact no such documentation at either level. This leaves me to believe that the considerations of balance of convenience and irretrievable prejudice both tilt towards the Plaintif and not towards Akshat. At the same timef I am not requiring Akshat to make payment of the amount that he has earned to his siblings. That is an inconceivable order at this ad-interim stage. What he must do is to securef so that it is not forever irredeemably lostf the share of the siblings. To do thisf Akshat is required to bring into the hands of the Court Receiver with a statement of account of the entire amount that he has received from Yes Bank after the original license or tenancy agreement ended in 2019. I am not dating this to any earlier period Page 11 of 14 27th January 2021 27-IAL1010-2021 IN SL995-2021.DOC but only the period after which Akshat himself says there is no documentation.
27. Akshat will take notice that there cannot be any controversy about the amount because Yes Bank will undoubtedly have paid these by online transfers or by cheque or some other mode which can be cross-verifed. Againf what is to be done with the amount deposited is at large and all rival contentions on both sides are expressly kept open. This is without prejudice to those rival rights and contentions and if Akshat is indeed able to show that he either deployed these funds towards discharge of debt and that he was entitled to do so under some sort of arrangement with his siblingsf and further that he was entitled exclusively to even allow Yes Bank to continuef he will of course be entitled to get his deposits back with all interest accrued.
28. Whether or not Shamitha and Bharat are liable for the discharge or any part of that debt is also a question left to be decided but the amount in question must nonetheless be secured.
29. At this stagef Mr Kapadia points out that any order of deposit will be confned to 75% of the compensation received from Yes Bank. This is utterly reasonable and that is amount (the maximum that Shamitha and Bharat can possibly claimf will be brought in). This is to be done within three weeks from today.
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30. At this stagef Mr Khandekar requests that the time for deposit may be extended for a period of six weeks from today. The request is reasonable and it is granted.
31. Mr Kapadia also submits that there is no urgency whatsoever since this grievance has been raised since 2019 and that an Afdavit in Reply is required. I believe this submissionf one that has become almost routinef is entirely misconceived. It is not in every case that a Court is required to hold back on an ad-interim relief pending an Afdavit in Reply. Even a delay by the Plaintif will not necessarily require a refusal of relief pending a Reply. It depends on the facts and circumstances of the case. This is why I have been at some pains to put very pointed questions to Mr Kapadia and to note the responses -- or the signifcant lack of thereof -- to each. . These questions have been on a limited aspects of the matter. I do not see what possible diference Afdavit in Reply is going to make if there is no documentation to begin with from the relevant date. Where there is a possible argument to be madef I have not made that order of deposit. I have made that order of deposit and only to the extent of 75%f only where I have received an answer that there is no written documentation in existence at all as of today. To this endf it is wholly immaterial when the Plaintif frst sought relief or made their claims against Akshat.
32. I am making it clear that the amounts deposited are only required to be deposited as received from Defendants Nos. 3 and 4. These are not allowed to be distributed in any manner without specifc orders of this Court. These are all subject to accounts being taken and will be held until further orders of the Court. The Court Page 13 of 14 27th January 2021 27-IAL1010-2021 IN SL995-2021.DOC Receiverf for his partf is directed to invest the amount deposited in accordance with the usual practice of his ofce initially for a period of three months.
33. Lastlyf there will need to be an injunction in terms of prayer clause (a)(i) in respect of any part of the property. This orderf howeverf will also run against Defendant No. 2 and must necessarily run against the Plaintiff this being a partition Suitf one in which every party to the partition is a plaintif and every party is a defendant.
34. This order will be digitally signed by the Private Secretary of this Court. All concerned will act on production of a digitally signed copy of this order.
(G. S. PATEL, J) Page 14 of 14 27th January 2021