Suresh Lachhmandas Raheja v. Ferani Hotels Pvt. Ltd. & Ors.

.... Mr. Iqbal Chagla, Senior Advocate with Mr. Lyan Perera i/b. M/s. Kanga & Co. for the Appellant. Mr. Aspi Chinoy, Senior Advocate with Mr. P. K. Dhakephalkar, Senior Advocate with Mr. Zubin Behramkamdin, Mr. Vivek Vashi, Ms. Sushma Magarajand Mr. Anush Jegadesh i/b. M/s. Bharucha & Co. for Respondent No.1. Mr. Aney Nabor with Ms. Smitha Iyer i/b. Hariani & Co. for Respondent No.3 and 4. .... CORAM : D. K. DESHMUKH AND SMT. R. P. SONDURBALDOTA, JJ. DATE : JULY 29, 2010. P.C. This Appeal takes exception to the order dated 1st July, 2010 passed by the learned Single Judge of this Court. The relevant facts are that the Notice of Motion No. 3899 of 2006 in Suit No. 2 app592-10 3190 of 2006 was taken out by the present appellant who is plaintiff in that suit. On that Notice of Motion, ad-interim order was granted by learned Single Judge of this Court dated 26th March, 2007. By that order the plaintiff was directed to deposit certain amount in Court. Two appeals were filed against that order before the Division Bench of this Court which are Appeal Nos. 270 of 2007 and 284 of 2007. Both the appeals were decided by the Division Bench of this Court by an order dated 30th November, 2007. It is paragraph No. 5 of the said order which is relevant for our purpose. It reads as under : The plaintiff shall furnish an undertaking by “ way of an affidavit and also furnish security bond to the extent of 21.42 % of the valuation clause of the plaint to the satisfaction of Prothonotary and Senior Master of this Court within four weeks from today, to compensate the defendants in the event the Notice of Motion and/or the suit is dismissed.”

2. Thus, by this order the Division Bench of this Court directed the plaintiff to furnish an undertaking by way of an affidavit and also directed the appellant to furnish security bond to the extent of 21.42 % of the valuation clause of the plaint to the satisfaction of the Prothonotary and Senior Master. Thereafter, a praecipe was taken out by the Defendants before the Division Bench for speaking to the minutes of the order of 3 app592-10 the Division Bench. On that praecipe order was passed on 17th January, 2008. In paragraph 2(iii) of that order the Court mentioned the clarification that was sought in relation to the security bond. It read as under : “ That the security bond directed to be furnished in terms of the operative part of the judgment should not be to the extent of 21.42 % of the total valuation stated in the valuation clause. But the order is really intended to protect the applicant to the extent of 21.42 % of the total value of the property jointly owned by the parties in which the plaintiff-respondents claim 21.42.”

3. The Division Bench has dealt with that aspect of the matter in paragraph No. 5. Paragraph No. 5 reads as under : “ As far as the last prayer is concerned, we heard the counsel appearing for the parties. The plaintiff-respondent herein, in paragraph 42 of the plaint had stated that for the purposes of the court fees and jurisdiction, the claim in the suit was valued at Rs. 7,831,773,809/- and maximum court fee was paid. It obviously means that the entire suit property on which the defendants were carrying out the development was much in excess and commanded a much more higher value and the claim in the suit was restricted to the right (claim) of the plaintiff i.e. his share of 21.42 percent in the entire property. To say that the respondent herein should furnish a security bond for the valuation of the entire property would be unfair and unjust. Further, we may notice that even the land forming part of the share of the 4 app592-10 respondent (21.42 per cent), the possession would remain with the appellants and the intent of the order is to protect their interest in the event of the respondent in the appeal failing in the suit. If the respondent was to be in possession of the land in question, then the contention raised on behalf of the appellant that he should furnish security for the entire indicated amount of the share would be justified. But, in the present case, the loss or prejudice that is likely to result to the appellant in the event the respondent fails in the suit would only be restricted to the loss suffered by them as a result of non-development on the land of 21.42 per cent including the lands which are to be kept statutorily vacant for free areas, common facilities and land on which construction is not permissible. Keeping in view the totality of the facts and circumstances of the case, 21.42 per cent of the stated valuation would come to approximately Rs. 167,75,65,940/-. In order to place the case of the appellant still at a higher footing and to protect their interest equally during the pendency of the final disposal of the Motion, we direct the respondent herein to furnish security to the extent of Rs. 200 crores to the satisfaction of the Prothonotary and Senior Master in terms of the order.” (Emphasis supplied)

4. It appears that thereafter the defendants approached the Supreme Court. The order of the Supreme Court is dated 28th July, 2008. The Supreme Court did not interfere in the matter. The plaintiff filed the undertaking and submitted the security bond.

5. According to the defendants, furnishing of the security 5 app592-10 bond was not in terms of the order of the Division Bench. Therefore, an application under Section 133 of the Original Sides Rules was filed by the defendant. That application has been decided by the learned Single Judge of this Court by an order dated 1st July, 2010. The learned Single Judge has held that when the Division Bench directed furnishing of the security bond what is actually directed was that the plaintiff should furnish security of Tangible asset of the valuation of Rs. 200/- crores to the satisfaction of the Prothonotary and Senior Master of this Court. It is this order which is challenged in the Appeal.

6. We have heard the learned counsel for both the sides. In our opinion, the order does not call for any interference at our hand, mainly because the Division Bench of this Court by its order dated 30th November, 2007 had directed the plaintiff to furnish an undertaking by way of an affidavit and also directed the plaintiff to furnish security bond. In our opinion, therefore, the security bond cannot be in the shape of merely an assurance to pay an amount of Rs. 200/- crores, if so directed by the Court. The undertaking which is directed to be given, also is to the same effect. In our opinion, the whole purpose of directing the plaintiff to give security bond was to secure the interest of the 6 app592-10 defendant. Merely an assurance given by the plaintiff without disclosing that he has tangible property to support that assurances, in our opinion, has no meaning.

7. It is, however, to be seen that the order of the Division Bench passed on a praceipe submitted by the defendant was for furnishing of the security and not merely for submission of security bond. But, in the SLP which was filed in the Supreme Court by the defendant, grounds were taken that the Division Bench has directed submission of security bond by the plaintiff. We find substance in the submission made on behalf of the appellant that non-disclosure of this aspect by the defendants in this application filed under Rule 133 of the Original Side Rules amounts to suppression of one of the relevant aspect of the matter. However, in our opinion, though the matter was relevant, it was not crucial for deciding the controversy before the learned Single Judge. In our opinion, as the intention of the Court was to secure the interest of the defendants against any loss that the defendants may suffer because of the operation of the ad-interim order, the plaintiff had to put forth some tangible property against which the defendants can proceed, in the event he become entitled to recover the amount of loss from the 7 app592-10 Plaintiff. Taking over all view of the matter, therefore, in our opinion, the learned Single Judge, has taken a reasonable view of the matter, it will not be proper to interfere with the order. The Appeal is, therefore, dismissed.

8. In view of dismissal of the Appeal, Notice of Motion No. 1928 of 2010 is also disposed of.

9. The time allowed by the learned Single Judge is extended for further period of four weeks from today. SMT. R. P. SONDURBALDOTA, J. D. K. DESHMUKH, J.