IN OFFICIAL ASSIGNEE'S REPORT NO.82 OF 2010 v. Anant V. Hegde & Anr.

Mr.D.A. Athavale, for the Applicant in support of the Notice of Motion. Mr.S.G.Bhandari, for the Insolvents. Ms.Kavita Lalwani, for Supporting Creditor. Mr.Y.C.Parikh, Official Assignee, present in person. .......... CORAM : S.C.DHARMADHIKARI, J. DATE : 18th January, 2011. P.C. 1 This is a Notice of Motion moved by the Applicant praying that exparte order dated 06.04.2010 passed by this Court on the report of the Official Assignee dated 06.02.2010 be set aside and the report being No.82/2010 be reheard on merits. 2 Mr.Athavale, learned counsel appearing on behalf of the Applicant in support of this Notice of Motion, submitted that the Applicant is licencee in respect of the flat being Flat No.6-A, Palm Court, Almeida Park, Bandra West, Mumbai-400050. The Applicant had entered into a valid and binding Leave & Licence agreement dated 13.10.2006 with the Insolvent No.1 Anant Hegde and this agreement has been registered.

An *2* nmis.60.10.oar.82.10.inpt.71.06.35 amount of Rs.50 lacs was paid to the Insolvent No.1 by way of a security deposit and thereafter, the possession was handed over to the Applicant for the purpose of housing one of it's employee. 3 My attention is invited by Mr.Athavale to Clause-16 of the agreement and it is contended by him that the Insolvent No.1 agreed to refund the security deposit to the Applicant once the agreement comes to an end by efflux of time or is determined earlier and till the time the Insolvent No.1 does not refund the said security deposit with interest accrued, if any, the Applicant is entitled to use and occupy the said flat free of charges. He submits that this agreement is genuine and bonafide act of the parties. The Applicant had no knowledge of these insolvency proceedings. The Applicant has, in good faith, entered into this agreement and paid the security deposit.

Therefore, the Applicant may not be divested of rights under the agreement and that is why the Applicant is required to be heard. For the purpose of giving an opportunity of being heard to the Applicant, the order made on the Official Assignee's Report be recalled and set aside. 4 Reliance is placed on Section 57 of the Presidency Towns Insolvency Act, 1909 in this behalf. 5 After hearing Mr.Athavale and with his assistance perusing the affidavit in support, I am of the opinion that there is no substance in the Notice of Motion. Firstly the agreement is of Leave & Licence. By its very nature this agreement does not create any right, title and interest in the immovable property, therefore, Section 57 which protects the transfers and preferences is inapplicable. Secondly, if the Applicant has any right under the agreement against the Insolvent, his remedy is not to contest the report but institute appropriate proceedings.

The Applicant has no right to approach the Insolvency Court and seek any relief considering the *3* nmis.60.10.oar.82.10.inpt.71.06.35 nature of this transaction. The Applicant, therefore, could not have claimed any right to remain in the property. In any event it is stated that exclusive possession of the said flat is not with the Applicant any longer. However, it is claimed that the Applicant is in joint possession with the Official Assignee. 6 Bearing in mind the clear legal position, the Applicant cannot assert any right against the Official Assignee and the Notice of Motion is misconceived and is, accordingly, dismissed. No costs. (S.C. Dharmadhikari, J)