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C.A.No.5471/05 etc.    

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

1. 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

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C.A.No.5471/05 etc.    

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.

2. 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.

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C.A.No.5471/05 etc.    

3. 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.

4. 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

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C.A.No.5471/05 etc.    

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.

5. 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

6. 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.

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C.A.No.5471/05 etc.    

7. 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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