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Wednesday, August 12, 2015

The appellant is a notified party under Section 3(2) of the Special Courts (Trial of Offences relating to Transactions in Securities) Act, 1992 (hereinafter referred to as ‘the Act’). Its tenancy rights over the premises bearing Flat No.2, situated on the ground floor of a building known as Krishna Mahal at 36, Marine Drive, D-Road, Mumbai belonging to respondent no.2, the owner and landlord also came to be attached under the provisions of the Act. The respondent no.1 filed an application before the Special Court which was numbered as Miscellaneous Petition No.17 of 2004. He claimed that the flat which stood attached for the tenancy rights of the notified party be also dealt with and disposed of for the best available price for satisfying the liabilities of the appellant under Section 11 of the Act= In the facts of the case while dismissing the appeal of the appellant, in the larger interest of justice we modify the impugned order and direct respondent no.2 to deposit within eight weeks from today the earlier balance amount of Rs.65 Lacs along with additional amount of Rs.13,92,000/- . In other words respondent no.2 in order to get the benefit of the impugned order shall now make in total a deposit of Rs.78,92,000/- (Rupees Seventy Eight Lac Ninety Two Thousand) within eight weeks and shall not claim interest accrued on the amount of Rs.10 Lac already deposited by him. On such deposit being made within eight weeks, the Custodian shall deliver the possession of the flat to the respondent no.2 the landlord without any delay and in any case within one week of such deposit.

                                                              NON-REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO.5471 OF 2005

Fairgrowth Financial Services Ltd.                  …..Appellant

      Versus

Custodian & Anr.                               …..Respondents

                                   W I T H


                          C.A.Nos.5788-5789 of 2005



                               J U D G M E N T



SHIVA KIRTI SINGH, J.


Civil Appeal No.5471 of 2005

Heard the parties.  The appellant is a notified party under Section 3(2)  of
the  Special  Courts  (Trial  of  Offences  relating  to   Transactions   in
Securities) Act, 1992 (hereinafter referred to as ‘the Act’).   Its  tenancy
rights over the premises bearing Flat No.2, situated on the ground floor  of
a building known as Krishna  Mahal  at  36,  Marine  Drive,  D-Road,  Mumbai
belonging to respondent no.2,  the  owner  and  landlord  also  came  to  be
attached under the provisions of the Act.   The  respondent  no.1  filed  an
application before the Special Court which  was  numbered  as  Miscellaneous
Petition No.17 of 2004.  He claimed that the flat which stood  attached  for
the tenancy rights of the notified party be also dealt with and disposed  of
for  the  best  available  price  for  satisfying  the  liabilities  of  the
appellant under Section 11 of the  Act.   That  Miscellaneous  Petition  was
entertained and it ultimately resulted in acceptance  of  highest  offer  of
Rs.75 Lacs made by the landlord as it was the highest offer which  could  be
obtained for surrender of the tenancy rights of the  appellant.   Under  the
orders of the Special Court respondent no.2 has deposited Rs.10 Lacs with  a
stipulation that he will not claim any interest over the  said  deposit  and
shall deposit the balance amount of Rs.65 Lacs whenever required to do so.
By the impugned order dated 21.07.2005 the Special Court noted that  despite
public advertisement there was no matching offer and hence it  accepted  the
offer of respondent no.2 the landlord and directed the appellant to file  an
undertaking within one week to  hand  over  the  vacant  possession  of  the
premises within four weeks.
The main contention advanced on behalf of the appellant that  there  are  no
liabilities outstanding for the statutory period and therefore there  is  no
requirement to dispose of its tenancy rights is ex-facie found  to  have  no
merits.  As a result we find no illegality  or  infirmity  in  the  impugned
order and this appeal deserves to be dismissed.
On account of our concern for the proper value for surrender of the  tenancy
by the appellant on account of long pendency of  this  appeal  for  about  a
decade, learned  counsel  for  respondent  no.2  disclosed  that  for  valid
reasons, the tenancy  is not protected  under  the  relevant  rent  law  and
hence no person was likely to offer a  better  price.   But  as  a  goodwill
gesture, on instructions of Mr. Ajit Jhaveri, Director of  respondent  no.2-
Reshma Estates Pvt. Ltd. (the landlord) who is present in  Court  today,  he
has submitted in writing that the respondent no.2  shall  not  only  deposit
the balance Rs.65 Lacs as directed by the  impugned  order  of  the  Special
Court but also undertakes to deposit a further  sum  of  Rs.10  Lacs  as  an
additional consideration and also  a  sum  of  Rs.3,92,000/-  which  is  the
rental amount received by the landlord  from  2006  till  date.   Respondent
no.2 has also agreed that the interest accrued on the amount of  Rs.10  Lacs
already deposited by the landlord as per the  impugned  order  in  the  year
2005 could also go to the Custodian.   However,  he  has  prayed  for  eight
weeks’ time to make the deposit of the balance amounts,  i.e.,  Rs.65  Lacs,
Rs.10 Lacs and Rs.3.92 Lacs.  There is no opposition to this offer.
In the facts of the case while dismissing the appeal of  the  appellant,  in
the larger interest of justice we  modify  the  impugned  order  and  direct
respondent no.2 to  deposit  within  eight  weeks  from  today  the  earlier
balance amount of Rs.65 Lacs along with additional amount of  Rs.13,92,000/-
.  In other words respondent no.2  in  order  to  get  the  benefit  of  the
impugned order shall now make in total a deposit of  Rs.78,92,000/-  (Rupees
Seventy Eight Lac Ninety Two Thousand) within  eight  weeks  and  shall  not
claim interest accrued on the amount of Rs.10 Lac already deposited by  him.
 On such deposit being made within eight weeks, the Custodian shall  deliver
the possession of the flat to the respondent no.2 the landlord  without  any
delay and in any case within one week of such deposit.
Civil Appeal Nos.5788-5789 of 2005

The connected Civil Appeal Nos.5788-5789 of 2005 preferred  against  earlier
orders passed by the Special Court  in  connection  with  the  same  subject
matter shall also stand dismissed.

In the facts of the case there shall be no order as to costs.


                       …………………………………….J.
                       [VIKRAMAJIT SEN]


                       ……………………………………..J.
                             [SHIVA KIRTI SINGH]
New Delhi.
August 10, 2015.









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