IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C) No. 12224 of 2004(E)
1. T.V.R.FUND, KARAMANA,
... Petitioner
Vs
1. MANIKANTAN S/O. KANAKA SUBHAPATHI,
... Respondent
2. PRABHAKARAN NAIR, THE ASSIGNEE
3. BABU K.MATHEW, T.C.12/187, PALATHINGAL,
For Petitioner :SRI.V.N.ACHUTHA KURUP
For Respondent :SRI.S.GOPAKUMARAN NAIR, SC, CALICUT UTY
The Hon'ble MR. Justice PIUS C.KURIAKOSE
Dated :18/06/2007
O R D E R
PIUS C. KURIAKOSE, J.
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W.P.(C) No. 12224 OF 2004
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Dated this the 18th day of June, 2007
JUDGMENT
The Official Receiver of the Thiruvananthapuram District Court
who was appointed by the Insolvency Court, Thiruvananthapuram for
administering the assets of a partnership firm by name TVR Funds is
the petitioner in this Writ Petition under article 227 of the Constitution.
The order impugned is Ext.P2 passed by the Principal Sub Court,
Thiruvananthapuram, a common order in EA No.137 of 2002 and EA
No.138 of 2002 filed by the 1st respondent. The prayer in EA No.137 of
2002 was to stay all further proceedings pursuant to a notice dt.02.09.02
affixed by the Official Receiver on the decree schedule property and
prayer in EA No.138 of 2002 is that the Official Receiver be directed to
obey the order in EA N.263/02 and if he fails to obey the orders, pass
orders attaching the receiver’s property. There was an earlier order by
the Sub Court in EA No.263 of 2002 which was to the following effect.
“The Official Receiver is permitted to let out the shop room to the
petitioner(1st respondent) provided the petitioner agrees with the rent
fixed by the Official Receiver. The Official Receiver will take necessary
records for handing over the schedule premises to the petitioner and
she will maintain proper accounts. The possession of the petitioner will
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be subject to the result of the EP.” Pursuant to that order the Receiver
published notice inviting tenders from persons who are desirous of
taking the shop room on rent quoting the monthly rent which is offered.
14 individuals including the 1st respondent submitted sealed tenders.
The tenders were opened and it was seen that the 1st respondent
quoted only Rs.500/- while the highest offer was made by one
M.S.Ajithkumar, which was for Rs.3,200/-. As against the offer of
Rs.500, there was offers of Rs.2,501 from one Ayyappa Pillai,
Rs.2,000/- from R.Subrahmanian, Rs.2,000/- from one S.P.Ajithkumar
and Rs.2,000/- from Devarajan. The tenders received by the Receiver
were opened by her in the presence of most of the tenderers including
the 1st respondent and noticing that the highest tender was Rs.3,200/- ,
what the Receiver did was to fix the rent of the shop room as Rs.3,205/-.
The 1st respondent was not ready either to accept the rent fixed by the
Receiver. He was not prepared to offer anything more than what was
already offered by him i.e. Rs.500/- per mensum. The Receiver under
the above circumstances decided to let out the shop room to
Sri.Ajithkumar M.S., who offered Rs.3,200/- and filed Ext.P1 report
seeking ratification of the Court. Under the impugned order Ext.P2, the
learned Subordinate Judge has taken the view that the Receiver has to
hand over the possession of the schedule premises to the 1st
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respondent and also held that the Receiver was not justified in handing
over the schedule property to Sri.Ajithkumar and accordingly declined to
ratify the Receiver’s act in handing over the building to Sri.Ajithkumar.
Rejecting Ext.P1 report submitted by the Receiver, the court below
accepted the offer made on behalf of the 1st respondent at the Bar that
he is ready to pay Rs.1,000/- by way of monthly rent and directed the
Receiver under the impugned order to hand over the building to the 1st
respondent on monthly payment of Rs.1,000/-.
2. Smt.Bindu Sreekumar, learned counsel for the petitioner and
the learned counsel for the 1st respondent addressed me extensively.
Smt.Bindu Sreekumar would submit that the impugned order has been
made in dereliction of the earlier order in EA 263/02 which has attained
finality. Under EA No.263 of 2002 the Receiver was permitted to let out
the shop room to the 1st respondent on condition that the 1st respondent
shall pay the rent which is fixed by the Receiver. In the instant case the
Receiver fixed rent not in any arbitrary manner. Publication of notice
inviting offers showing the agreeable rent by the Receiver was an
earnest endeavour to realise the best rent in the market. The building is
situated in the heart of the Chalai market in Thiruvanathapuram city and
going by the prevailing rent rates the building should fetch at least
Rs.3,500/-. As Receiver is appointed by the Insolvency Court for
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administering the estate for the benefit of all the creditors of the firm in
question, it is petitioner’s duty to ensure that the estate generates
maximum profit so that the creditors at whose instance the Insolvency
Court appointed her as Receiver will be benefited. Though the highest
offer was made by Sri.Ajithkumar, the petitioner was willing to let out the
building to the 1st respondent who offered only Rs.500/- provided the 1st
respondent pays at least Rs.5 more than the higher offer. Smt.Bindu
Sreekumar, learned counsel for the respondent would place before me
copy of the common order in CRP Nos.273 and 178 of 2000 pursuant
to which only the Receiver was able to take possession of the building.
She also placed before me the full text of the order in EA No.263 of
2002.
3. Even though all the submissions of Smt.Bindu Sreekumar were
resisted by the learned counsel for the 1st respondent, who submitted
that the 1st respondent was a statutory tenant already in possession of
the building, at the time when he was dispossessed by the Receiver is
entitled to be put back in possession of the building on paying the
agreed rent which is only Rs.500/-. The Receiver has to be directed to
hand over possession of the building to the 1st respondent from whom
the Receiver had taken possession on the original rent of Rs.500/- and
thereafter the Receiver can move the appropriate court for fixation of fair
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rent. Once fair rent is fixed, the 1st respondent will be prepared to pay
fair rent.
4. Having regard to the rival submissions made at the Bar and the
materials which have been placed before me by the learned counsel for
the petitioner and also those produced along with the Writ Petition, I am
of the view that the learned Subordinate Judge was bound by her own
order in EA No.263 of 2002 which was issued taking note of the order in
CRPs. It is true that the 1st respondent is entitled to get back
possession of the building. For such entitlement, the 1st respondent has
liability to pay the rent fixed by the Receiver. Here the Receiver has
fixed Rs.3,205/- as the rent. The 1st respondent is not ready to pay that
rent. If the 1st respondent is prepared to pay the rent fixed by the
Receiver, he will become entitled to be put in possession of the building.
The fixation of Rs.1,000/-as the rent payable by the 1st respondent, by
the court below, was not proper. Pursuant to an order passed by me on
14.06.07, it was reported by the counsel for the petitioner that on
16.09.02 when the tenders were opened by the Receiver and
Sri.Ajithkumar M.S, the highest offerer was also physically present. This
means that his offer was a genuine offer. Even otherwise I do not find
any reason to disbelieve what has been reported by the Receiver in
Ext.P1. The building, it should be remembered is in Chalai Bazar and
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many of the offers received were around Rs.2,000/- per mensum as
against the sum of Rs.500/- offered by the 1st respondent.
5. The result of the above discussion is that the Writ Petition will
stand allowed. Ext.P2 is set aside. It is held that the 1st respondent will
become entitled for the building only if he is willing to pay a sum of
Rs.3,201/- as rent. (i.e., Rs.1/- higher than the highest offer received by
the Receiver). The court below is directed to facilitate handing over of
the building to the 1st respondent subject to his right to have a fair rent
in accordance with law provided he expresses his willingness to pay
Rs.3,201/- as monthly rent in writing before the court below within 30
days from today. If the court below finds any technical difficulty in the
matter of issuing directions to the Receiver, it is open to the 1st
respondent to seek appropriate remedies from the Insolvency Court in
the light of the findings contained herein.
The Writ Petition is allowed as above. No costs.
PIUS C. KURIAKOSE, JUDGE
btt
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