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Parmanand Patel (D) Th. Lrs. & Anr. Vs. Sudha A.Chowgule & Ors. on 6 March, 2009

Parmanand Patel (D) Th. Lrs. & Anr. Vs. Sudha A.Chowgule & Ors. on 6 March, 2009
Bench: D.K. Jain, R.M. Lodha

HELD : 1.1 A receiver having regard to the provisions contained in O.40 r. 1 of the Code of Civil Procedure is appointed only when it is found to be just and convenient to do so. Appointment of a receiver pending suit is a matter which is within the discretionary jurisdiction of the Court. Ordinarily the Court would not appoint a receiver save and except on a prima facie finding that the plaintiff has an excellent chance of success in the suit. It is also for the plaintiff not only to show a case of adverse and conflict claims of property but also emergency, danger or loss demanding immediate action. Element of danger is an important consideration. Ordinarily, a receiver would not be appointed unless a case has been made out which may deprive the defendant of a de facto possession. For the said purpose, conduct of the parties would also be relevant. [Para 15] [190-A-D]

1.2 1st respondent did not question that part of the order of the Division Bench whereby an Official Receiver of the High Court has been appointed as receiver in respect of the suit properties. Thus, a strong prima facie case has been found in favour of the appellants. Parties have brought out medical reports in respect of late P which gives different pictures about his mental condition at the relevant time. The relevant date for determining the mental faculty of late P would be 23rd January 2005 when the Will was executed, but for arriving at the said conclusion his mental condition, both prior thereto and later, would be relevant. Prima facie, appellant no.2 was compelled to file a suit in order to protect the interest of her husband. Suit was entertained and interim order was passed. The Division Bench in order to satisfy itself, called late P in their chamber. He was found to be totally confused and incoherent. In the said situation, a panel of doctors was constituted for examining him and the said report of the said panel of doctors is considered. [Para 16] [190-D-H; 191-A]

1.3 The property in suit is worth more than Rs.1000 crores. There are several companies. Respondent no.5-company own huge properties. There are two multi-storeyed buildings which are occupied by a large number of tenants. Each of the heirs and legal representatives of late P in the event he is found to have died intestate, would have 1/3rd share. Appellant no.2 does not claim exclusive interest in respect of the flats purported to have been gifted in her favour by her late husband. A statement has also been made on behalf of the first respondent that she would have no objection to share the entire property half and half between herself and appellant no.2. [Para 17] [191-A-C]

1.4 Several attempts were made for reconciliation between the parties. The dispute was referred to a mediator. Parties, however, for reasons best known to them and despite the fact that for all intent and purport the dispute hinges on a narrow pedestal, were not able to settle their disputes. Therefore, it appears that there is a lot of controversy between the parties. There is also a lot of bad blood. [Para 18] [191-D-E]

1.5 The High Court in its impugned judgment proceeded on the premise that prima facie late P had a desire to settle the properties in favour of his two daughters in equal shares. He made a meticulous plan therefor which would be tax efficient. To the said extent, 1st respondent’s case appears to have been supported by H, brother of appellant no. 2 herself. But, with respect, what was not taken into consideration by the Division Bench of the High Court was that admittedly two sets of papers were prepared-one on the basis that the 2nd appellant would surrender her 5% share in the company. Late P even signed the first set of papers. She, however, refused to part with her share in the company. It was then the second set of documents were executed which not only included the undated Will but also the two letters addressed to respondent no. 1 and 2 respectively. The said letters prima facie had been drafted in a manner which would ultimately be beneficial to the interest of respondent no. 1 alone. Presumably, at that point of time the 2nd appellant expressed her stray resent in relation to the whole affair. Rightly or wrongly, she was not ad idem with her husband. It gave rise to execution of a third set of document which was signed not only by late P but also the appellant no.2 conferring a power of review upon SP. It was also attested by RA. It is understood that the said SP alone was helping late P in running the business. It is in the said context that letter dated 26th August 2005 written by SP to RA assumes importance. [Para19] [191-F-H; 192-A-D]

1.6 The Will and the letters of gift as evidenced by the two letters dated 23rd January 2005 were subject to review by SP. He having opined that the arrangement being detrimental to the interest of P should be given primacy at this stage. The case of the 1st respondent may or may not be correct. It is possible that late P had a desire to divide the property in equal shares between her two daughters. However, for the purpose of passing an interlocutory order, it is proceeded on the premise that the rights of the parties would have to be considered in terms of the provisions of the Hindu Succession Act, 1956, that is, on the assumption that P died intestate in which event share of each of his heirs would be one third. Distribution of property amongst the children by the parents, however, may be found to be desirable if the mother wants to retain her share and deal with the same on her own. No exception can be taken thereto. Ordinarily, a Court shall presume the existence of a right in the property of the deceased in favour of the 2nd appellant unless a strong prima facie case is made out that she had been deprived therefrom. It is not for the court to consider as to whether her stand is fair to one of her daughters or not. Even if it be held that the Will and the letters had been executed by late P in sound disposing mind, conduct of respondent no. 1 cannot be lost sight of. She might be accompanying her father to various parts of the country as also abroad to see that P received best of the treatment, but then respondent no. 2 had also been residing in the same bungalow with her father despite her marriage in 1979. Above all, 2nd appellant had also not only been looking after her husband but also accompanying him for his treatment wherever it was found to be necessary. [Para 19] [192-E-H; 193-A-D]

1.7 Having taken into consideration all aspects of the matter, it is a fit case where the High Court should have appointed a receiver and/or an administrator with suitable directions. To the aforementioned extent, the order of the High Court is interfered with as respondent no. 1 alone had been given exclusive powers not only to execute documents but also induct tenants. The said job keeping in view the relationship between the parties should better be left with an officer of the Court who would be subject to directions as may be issued by the High Court from time to time. [Para 20] [193-E-G]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1574 of 2009

From the Judgement and Order dated 07.09.2006 of the Hon’ble High Court of Judicature at Bombay in Appeal No. 866 of 2005 in Notice of Motion No. 2626 of 2005 in Suit No. 2435 of 2005 and Notice of Motion No. 2620 of 2005 in Suit No. 2435 of 2005.


Civil Appeal No. 1575 of 2009

Mukul Rohatgi, Anil Divan, S. Ganesh, Shyam Divan, J.P. Sen, Shruti Choudhary, Swati Singh, A.M. Khatllawala, Jayashree Singh (M/s Fox Mandal & Co.) C. Rashmi Kant, Rashna Dastoor, J.P. Sen, Mahesh Agarwal, E.C. Agrawala Rishi Agrawala, Akshay Ringe, R.F. Nariman, C.A. Sundaram, Aspi Kapadia, Sameer Parekh, Ranjeeta Rohtagi, Rohini Mussa, Abhishek Gupta, Zafar Inayat, Anand Kannan (M/s Parekh & Co.) Hemant Choudhari, S.W. Haider, Sanjeev Malhotra, for the appearing parties.

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