Final Order 1

Order Details: Chamber summons
Pdf Text: C/S NO.194/18, C/S NO.2330/18 & C/S NO.712/18 IN SUIT NO.3485/09
IN THE BOMBAY CITY CIVIL COURT AT BOMBAY
CHAMBER SUMMONS NO. 194 OF 2018
IN
SUIT NO.3485 OF 2009
(CNR NO. MHCC010014562018)
Smt. Prafulla Jaya Shetty & Another ….Plaintiffs
Versus
Manohar Jaya Shetty & Another ….Defendants
CHAMBER SUMMONS NO. 2330 OF 2018
IN
SUIT NO.3485 OF 2009
(CNR NO. MHCC010160302018)
Smt. Prafulla Jaya Shetty & Another ….Plaintiffs
Versus
Manohar Jaya Shetty & Another ….Defendants
CHAMBER SUMMONS NO. 712 OF 2018
IN
SUIT NO.3485 OF 2009
(CNR NO. MHCC010047942018)
Smt. Prafulla Jaya Shetty & Another ….Plaintiffs
Versus
Manohar Jaya Shetty & Another ….Defendants
Appearance:
Smt. Nichani, Advocate for plaintiffs.
Shri.Dipesh Gaonkar, Advocate for defendants.
CORUM : SMT. S.S. NAGUR,
AD HOC JUDGE &
ASST. SESSIONS JUDGE,
(C.R.NO.13)
DATE : 29/03/2019
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ORAL ORDER
1) These Chamber Summons are inter related
considering the pleadings. Therefore, discussed together in order
to avoid repetition.
2) The Chamber Summons No.194/18 is filed by
defendant No.1 and has prayed for the following reliefs as under:
“(a) That this Hon'ble Court be pleased to partly recall
the order dated 19.12.2018 passed in chamber summons
No.161 of 2017 and pass directions to deduct
/adjustment the payment of cost granted in the award
amounting to Rs.25,00,000/ (Rupees Twenty Five Lakhs
only) from defendant No.1's share in the partnership of
M/s. Hotel Golden Crown from final sale/sell proceeds
and be paid from final sale/sell proceeds to the
plaintiffs;
(b) That this Hon'ble Court be pleased to pass an order
and direct/request the learned commissioner for taking
accounts to expedite the process of ascertaining the share
of the partners, the sale of asset/s of the M/s. Hotel
Golden Crown and distribution of the partners share”
3) The chamber summons 712/18 is filed by the
defendant No.1 for following reliefs:
“(a) That the defendant No.1 in the suit be directed to
give his present residential address;
(b) that the defendant No.1 be ordered and directed to
forthwith pay the sum of Rs.25,00,000/ ordered to be
paid by the Arbitral Tribunal and by this Hon'ble Court;
(c) That the court commissioner appointed for taking
accounts be ordered and directed to get the three suit
premises surveyed and obtain the market value of the
said three premises;
(d) That the court commissioner be ordered and directed
to auction the said three premises after obtaining the
valuation report of the three suit premises and fixing the
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same as a reserved price'
(e) That the court commissioner be ordered and directed
to thereafter hold a private auction of the said three
premises and secure the best price of the said three
premises;
(f) That the plaintiffs as also the defendant No.1 may be
permitted to bid at the said private auction of the three
properties”
4) The chamber summons No.2330/18 is filed by the
defendant No.1 seeking following reliefs:
“(a) That this Hon'ble Court be pleased to direct the
plaintiffs to pay their share towards the advocate fees in
the income tax appeal filed by defendant No.2;
(b) That pass an order and direct/request the learned
commissioner for taking accounts and to issue
instructions to i) submit his report on a particular date
as this Hon'ble Court may deem fit and proper, ii) issue
the copies of notes of evidence of defendant No.1's cross
examination held by the plaintiff's advocate and iii) any
other such instructions be issued as this court may deem
fit and proper;
c) That pass an order and direct/request the learned
commissioner for taking accounts and to issue
instructions to proceed ex parte”
5) All the chamber summons are supported by affidavit
stating therein the reason for grant of reliefs. The reply filed by the
plaintiff/defendant No.1 objecting the chamber summons on the
ground of its tenability.
6) Heard advocate Shri. Dipesh Gaonkar for defendant
No.1 and advocate Smt. Nichani for plaintiffs. I have also gone
through the written notes and the documents relied by both the
parties in the chamber summons.
7) The Notice of Motion No.1065/10 was filed by
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defendant seeking direction from this court to refer the dispute to
arbitration. The Hon'ble Justice Shri. S.C. Dharmadhikari by order
dated 07/10/10, the notice of motion was made absolute. It was
clarified that the defendant will take steps for appointment of the
arbitration.
8) The above parties are claiming reliefs in respect of the
award passed in Arbitration proceeding by Hon'ble Justice Shri.
V.C. Daga dated 5/10/16. In respect of reliefs prayed by the
parties which is necessary to reproduce the issues dealt by Hon'ble
Arbitrator. Issues are as under:
“1.0 Whether Hotel Golden Crown Restaurant is a
Partnership at will?
2.0 Whether the claimants prove that they, by their
advocates notice dated 12th March, 2008, have dissolved
the partnership fir, Hotel Golden Crown Restaurant?
3.0 Whether the claimants prove that opponent No.1
had fraudulently tried to remove the claimant No.2 from
the suit partnership firm, Hotel Golden Crown
Restaurant and increased his share to 50%, as alleged in
para 7 of the statement of claim?
4.0 Whether the claimants prove that the premises
situate at August Kanti Marg are assets of Hotel Golden
Crown Restaurant?
5.0 Whether the respondent No.1 proves that Hotel
Golden Crown is a product of the Family Arrangement as
alleged in the Written Statement?
6.0 If the answer to issue No.4 above, is in the
affirmative, whether the respondents prove that, in the
light of the said Family Arrangement between the family
members of Late Jaya Shetty, the claimants are not
entitled to dissolve the partnership firm Hotel Golden
Crown Restaurant?
7.0 If the answer to point No.4 is in affirmative, whether
the respondents prove that, in the light of the said
Family Arrangement between the family members of Late
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Jaya Shetty, the respondents are not liable to make any
payment to the claimants from and out of the funds of
the partnership firm Hotel Golden Restaurant?
8.0 Whether the opponent No.1 proves that there was
and is an income tax liability of more than
Rs.7,00,00,000 (Rupees Seven Crores only) standing
against Opponent No.2 as alleged in the written
statement?
9.0 Whether the opponent No.1 proves that he has paid
the dues, due and payable to the claimant No.1 up to the
end of financial year 2010 from and out of the funds of
Hotel Golden Crown Restaurant as alleged in the written
statement?
10.0 Whether the opponent No.1 is liable to render true
and proper accounts of Hotel Golden Crown Restaurant
to the claimants, if so, from which period onwards?
11.0 What order?”
9) I am reproducing the finding of Hon'ble Arbitrator to
substantiate the dispute and the entitlement of relief in chamber
summons:
“10.1.25 In the year 1998, the said firm was
reconstituted vide Partnership Deed dated 1st March,
1998 whereunder Shri Krishna Acharya retired from the
firm on 31.3.1998 and Mr. Manohar Shetty (Respondent
No.1) and Mr. Mahesh Shetty (claimant No.2) joined as
partners in the said firm on 31.1.1998. The said facts
are recorded, vide entry dated 22.4.1998, in the record
of the Registrar of Firms. The emerging scenario is that
on 31.1.1998, Mr. Acharya retired and two brothers viz.,
Mr. Manohar Shetty and Mr. Mahesh Shetty entered into
the partnership firm
10.1.26 Mr. Mahesh Shetty (claimant No.2) desired to
go to U.S.A. for higher medical education and to take up
a job. He thus executed Power of Attorney on 18.7.2002
in favour of his brothers, Manohar Shetty (respondent
No.1) and Mr. Mohan Shetty to enable the said donees to
attend to the business and the estate of Mr. Mahesh and
to manage the same. Mr. Mahesh Shetty left for U.S.A. in
the month of July 2002. It is thus clear from the
circumstances on record that till July, 2002, the
relationship amongst the family members viz., the
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claimants, Mr. Manohar Shetty and Mr. Mohan Shetty,
were cordial.
10.1.46 Claimant No.1 had addressed a letter dated
3.1.2011 to the police commissioner (Hotel branch),
BMC, in reply to show cause notice dated 15.12.2010, as
issued to claimant No.1 in respect of violation and
breaches. By the said letter, claimant No.1 had conveyed
that as the business Hotel Golden Crown Restaurant was
being conducted exclusively by Mr. Manohar Shetty
(respondent No.1), the said show cause notice should be
issued to him.
10.1.58 It cannot be said that Mr. Mahesh Shetty must
have signed the said document in U.S.A. and must have
remitted the same back because the date of purchase of
stamp paper, on which the said Deed of Dissolution was
scribed, is 26.12.2002 and on the same date it is
executed, that too, before the Notary Public at Mumbai,
who claims to have attested the purported signature on
26.12.2002. The passport of Mr. Mahesh Shetty
(claimant No.2) is on record which shows that he was in
U.S.A. on the said date.
10.1.66 Having regard to the definition of the word
“Fraudulent”, as given in Mitra's Legal and Commercial
Dictionary (6th Edition 2006) and the facts and evidence
on record, it is evident that respondent No.1 has
“fraudulently” tried to remove claimant No.2 from the
suit partnership and increase his share to 50% and was
successful in execution of his secret scheme resulting in
playing fraud and fraudulently succeeded in removing
the name of claimant No.2 from various Licences of the
said Hotel. The issue is thus answered in affirmative i.e.
in favour of the claimants and against the respondents.”
10) It has been held by Hon'ble Arbitrator at the time of
decision of issue No.4 whether the premises situated at August
Kranti Marg contends of the partnership of Golden Crown
Restaurant is answered in positive.
11) The defendant No.1 to the question put to him has
answered at the time of his evidence:
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11.9 In answer to question No.242 in the course of the
crossexamination, respondent No.1 had deposed that
that the premises (at August Kranti Marg) is tenanted
premises and that tenant of the premises is Hotel Golden
Crown Restaurant. The very same premises was attached
by the Income Tax department, vide its Order dated
22.7.2003 (Ex.C105). The said document is filed on
record by respondent No.1 with various other
documents.
11.10 In answer to question No.243 in the course of the
crossexamination, Respondent No.1 had deposed that
the new premises, which have been given in lieu of old
premises (i.e. now the new premises) is owned by the
partnership firm, M/s. Hotel Golden Crown Restaurant
11.11 In answer to questions Nos. 250 and 251,
respondent No.1 stated that the possession of the
premises given to him is 6000 sq.ft. Consisting of 3
storey i.e. basement, ground floor and first floor.”
15.2 In answer to question No.96 in the course of his
crossexamination, Respondent No.1 has deposed that in
the year 199596, the order, which was passed, showed
Income Tax liability in the sum of Rs.2 Crores to Rs.2.25
Crores. In answer to question No.98, Respondent No.1
has further deposed that the new firm Hotel Golden
Crown Restaurant (upon being reconstituted) may have
discharged the Income Tax liability to the extent of Rs.50
Lakhs to Rs.60 Lakhs.
15.3 In answer to question No.93, Respondent No.1 had
deposed that Rs.6 Crores to Rs.7 Crores is the tax
liability of Hotel Golden Crown Restaurant.
15.4 It is pertinent to note that Income Tax liability is
the liability of suit partnership and appeal is pending in
the Hon'ble Bombay High Court.
15.5 Whatever may be the outcome of the appeal and
whatever may be the ultimate Income Tax liability, the
same would have to be shared between the partners,
namely, the claimants and respondent No.1 in the ratio
in which the said parties are entitled to share the assets
and liabilities of the partnership firm.”
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12) The defendant No.1 in his arguments submitted that
chamber summons No.194/18 signed by advocate for defendant
No.1 and defendant No.1 himself in para 4 stated that the said
partnership tented premises is shut down and in view of such
tenanted premises the defendant No.2 has received one single
premise with one single room single door/entry may be termed as
estate of defendant No.2 that requires to be sold.
13) There are contradictions of the defendant No.1 before
the arbitrator he has deposed that he has received 6000 sq.ft.
Consisting of 3 storey i.e. basement, ground floor and first floor.
This itself goes to show that defendant No.1 is avoiding to part
away with the actual property of defendant No.2 firm and is
suppressing the material facts within his knowledge with the court.
14) The defendant No.1 has stated on oath that he is not
able to pay amount of Rs.25,00,000/ to the plaintiffs. On the
contrary on going through award the defendant No.1 has not given
the actual accounts of the firm even before the arbitrator. Now the
matter is before the Commissioner who is taking account as per
the award and it is in progress. The defendant No.1 wants that this
court give to directions to the commissioner how the commissioner
has to take the accounts or exhibit it and proceed Ex parte against
the plaintiffs. The said relief is not tenable. The plaintiff is
proceeding before the commissioner. The defendant No.1 has
himself filed proceeding before the commissioner. This is nothing
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but have an obstacle in the proceedings of the commissioner. The
commissioner has to be submit the report. The commissioner has
to record the evidence took the documents and has to proceed as
per rules. The interference in the proceeding of commissioner is
not warranted.
15) My predecessor has already given direction to the
commissioner and the defendant has been directed to pay amount
of Rs.25,00,000/ to the plaintiffs. The defendants by other way is
avoiding said amount to be paid to the plaintiffs.
16) The advocate or plaintiff Shri. Gaonkar filed a precipe
in respect of settlement and asked the plaintiffs to file their settle
terms in order to arrive at compromise the dispute. The plaintiff
did not answer the said precipe that does not mean that plaintiffs
are avoiding to settle the dispute. Whether the plaintiffs decided to
settle the dispute or not which is between plaintiffs and
defendants. Award is already passed by arbitrator. The parties
have agreed to the said award. There is no appeal against the said
award till date the parties are also proceeding before the
commissioner which is taking account of the partnership firm.
17) The defendant No.1 is bound to pay amount of
Rs.25,00,000/ as directed by the Hon'ble arbitrator. He cannot
dictate how the amount can be recovered. This itself shows that he
is not following directions of the court and is avoiding to pay
Rs.25,00,000/.
18) The defendant No.1 has also prayed for payment of
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the advocate who is looking after the appeal to pay the tax by the
defendant No.2 firm. The defendant in the said chamber summons
has assigned the liability of the consequences of appeal on the
plaintiffs by saying that in case plaintiffs does not pay their share
of the advocate's fee result of the said appeal will be because of the
plaintiff non payment of share. At the same time he is not telling
about his part of share to pay the advocate. There is nothing on
record whether he has consulted the plaintiffs before appointing
the advocate and or filing the appeal.
19) The defendant is not giving details of the amount to
be paid to the advocate and is asking the share of the plaintiffs for
payment to the advocate. At the same time he has tried to avoid to
pay Rs. 25,00,000/ to plaintiffs as awarded plaintiffs in the
arbitration and is stating that the same can be deducted from his
share. This dual aspect of the defendant No.1 cannot be accepted.
20) The plaintiff is seeking the direction of the court to
pay Rs.25,00,000/ from defendant No.1. The said aspect is
already decided by my Predecessor in Chamber Summons
No.161/17 Hence again same agitation of the plaintiff is not
tenable. The plaintiff can proceed against the defendant no.1 for
non compliance of the order. The same is already been granted,
therefore, cannot be decideded again.
21) Advocate Nichani for plaintiff during the arguments
stated that the commissioner is not appointed and the said post is
vacant. Considering this fact no purpose will be served by giving
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direction to the commissioner to complete the proceeding within
the time limit as the commissioner's post is vacant as per the
contention of advocate and nothing is placed on record to show
that the said commissioner is appointed and matter will be
proceed. Hence, the chamber summons filed by the plaintiff and
defendant No.1 are not tenable and pass following order :
ORDER
1. The Chamber Summons is rejected.
2. No order as to costs.
(S.S. Nagur)
Date : 29/03/2019 Judge,
City Civil Court,
Greater Mumbai.
Dictated on : 29/03/2019
Transcribed on : 08/04/2019
Signed on : 08/04/2019
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“CERTIFIED TO BE TRUE AND CORRECT, COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER”
DATE & TIME OF UPLOADING : NAME OF STENOGRAPHER
08/04/2019 & 4.52 p.m. : Mrs. S.A. Shekade (LG)
Name of the Judge (with Court no.) : HHJ Smt. S.S. Nagur
(CR no. 13)
Date of pronouncement of Judgment/ : 29/03/2019
Order
Judgment/Order signed by the P.O. on : 08/04/2019
Judgment/Order uploaded on : 08/04/2019
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