Judgment:
Bhosale D.B., J.
1. Chamber Summons No. 200 of 2008 is taken out by the applicants/purchaser of Lot No. 1 (part of suit property) for the following reliefs:
(a) that the learned Court Receiver be directed to execute Conveyance of the property mentioned in Lot No. 1 in favour of M/s. The Ruby Mills Ltd., purchaser of Lot No. 1;
(b) that the learned Court Receiver, High Court, Bombay be directed to hand over all the original title deeds of the property mentioned in Lot No. 1 to the purchaser M/s. The Ruby Mills Ltd.;
(c) that pending the hearing and final disposal of this Chamber Summons, the learned Court Receiver be directed not to deal with the purchase price of Rs. 5,40,00,000/- (Rupees Five Crores Forty Lacs only) to the detriment of M/s. The Ruby Mills Ltd., (Purchaser);
(d) that pending the hearing and final disposal of this Chamber Summons, the learned Court Receiver be directed to resolve the labour issues and resolve any claims and/or disputes of the employees of defendant No. 1 including any disputes relating to the past dues or for re-instatement or re-employment, for the period upto the confirmation of sale by the Hon'ble Court within three weeks or within such time as this Hon'ble Court may deem fit;
(e) that pending the hearing and final disposal of this Chamber Summons, the learned Court Receiver be directed to clear out all outstanding claims that MSEB may have (approximately Rs. 24,12,180) (Rupees Twenty Four Lacs Twelve Thousand One Hundred and Eighty only), for the period upto the confirmation of sale by the Hon'ble Court within three weeks or within such time as this Hon'ble Court may deem fit;
(f) that pending the hearing and final disposal of this Chamber Summons, the learned Court Receiver be directed to clear out all outstanding claims that the irrigation department may have (approximately Rs. 1,28,70,886/- (rupees one crore twenty Eight Lacs Seventy Thousand Eight Hundred and Eighty Six only), for the period upto the confirmation of sale by the Hon'ble Court within three weeks or within such time as this Hon'ble Court may deem fit;
Counsel for the purchaser of Lot No. 1, however, submitted that he has instructions to press prayer Clauses (a), (b) and (f) only.
2. Chamber Summons No. 589 of 2008 is taken out by the applicant- purchaser in respect of Lot No. 4 (part of suit property) for the following reliefs:
(a) That this Hon'ble Court be pleased to direct the respondents abovenamed to restore the electric supply at the suit property covered by Lot No. 4 within a period of time as may be fixed by this Hon'ble Court without insisting on the payment of arrears of the electrical charges payable by defendant No. 1;
(b) That the Court Receiver, High Court, Bombay be directed to execute a Deed of Transfer/Conveyance expeditiously by incorporating correct description of the suit property covered by Lot No. 4 as per the certificate issued by the Tahasildar, Khalapur;
In both these Chamber Summons, the purchasers have mainly prayed for directions to the Court Receiver to execute Deed of Conveyance of the suit property covered by Lot Nos. 1 and 4. Admittedly, vide order dated 23.3.2007, sale of these two Lots have been confirmed and the purchasers have paid the total price and they are put in possession of these Lots by the Court Receiver in May, 2007.
3. The plaintiffs have filed the suit for recovery of outstanding amounts of loan advanced by them to defendant No. 1. As a security, several properties were mortgaged including the properties covered by Lot Nos. 1 and 4. Pending hearing and final disposal of the suit, the Court Receiver came to be appointed in these proceedings vide order dated 5.7.1999.
4. The Court Receiver has also filed a Report No. 1 of 2008 seeking following directions:
(a) What steps the Court Receiver should now take in respect of Demand of dues Rs. 59, 79, 536.17 (including interest) By Maharashtra Electricity Distribution Company Ltd. in respect of Lot No. 4 as mentioned in Exhibit 'B' (Colly) being the copies of the office note and the said letters annexed herewith;
(b) What steps the Court Receiver taken in respect of arrears of payment of Maharashtra Pollution Control Board, Regional Office-Raigad in respect of Lot Nos. 1 and 4 viz. immovable property situated at Plot Nos. 73, 74, 75, 76, 77, 93 and 95 at village Kharsundi, Taluka Khalapur, Dist. Raigad, Maharashtra and Village Versoe and Katrang of Taluka Khalapur, Khopoli, Dist. Raigad, Maharashtra, respectively.
(c) What steps the Court Receiver should take in respect of arrears of water charges of the sub-Divisional Engineer's Office, Irrigation Sub-Division, Karjat-Raigad, in relation of Lot Nos. 1 and 4, viz. immovable property situated at Plot Nos. 73, 74, 75, 76, 77, 93 and 95 at village Kharsundi, Taluka Khalapur, Dist. Raigad, Maharashtra and village Versoe and Katrang of Taluka Khalapur, Khopoli, Dist. Raigad, Maharashtra, respectively.
(d) That Tahsildar, Khalapur be directed to produce before the Court Receiver any order passed by the Collector or his nominee, fixing the penalty.
Though in prayer Clause (a), the Court Receiver has made reference to Lot No. 4 only, Counsel appearing for the purchaser of Lot No. 1, with clear understanding, addressed the Court in respect of the similar demand of dues by Maharashtra Electricity Distribution Company Ltd. (for short, 'MEDC') made in respect of Lot No. 1 also. In other words, though the prayer in the report does not seek any relief about the demand of dues by the MEDC in respect of Lot No. 1, the said prayer is treated as prayer in respect of the dues against Lot No. 1 also.
5. I have heard learned Counsel for the parties at considerable length and with their assistance gone through the entire record placed before the Court. Mr. Shroff, learned Senior Counsel for the purchaser of Lot No. 1, at the outset, invited my attention to Clause 29 of the General Terms and Conditions of the Auction sale (for short, 'the Terms and Conditions'), and strenuously submitted that the dues of MEDC and Irrigation Department are not covered by this clause, and, therefore, the purchasers are not liable to pay the outstanding electricity and water charges in respect of this lot. He submitted that the purchaser of Lot No. 1, even if it is assumed, is liable to pay the outstanding electricity charges, in view of Regulation 10.5 of the Maharashtra Electricity Regulatory Commission (Electricity Supply Code and Other Conditions of Supply) Regulations, 2005 (for short, 'the Regulations'), legally they are not liable to pay anything more than the outstanding dues for a maximum period of six months. He then submitted, insofar as the water charges are concerned, under Clause 29 of the terms and conditions, the Receiver is liable to pay the said charges for the period prior to the date of confirmation of the sale. He submitted that last part of Clause No. 29 does not entitled the Court Receiver to seek reimbursement of the payment of dues towards water charges. Mr. Dhakephalkar, learned Senior Counsel for the purchaser of Lot No. 4, in addition to the submissions advanced by Mr. Shroff, invited my attention to the provisions of Section 55 of the Transfer of Property Act, 1882 and Clause (g) thereof in particular, to contend that under any circumstances, the purchaser cannot be stated to have any liability to pay the outstanding electricity charges in the present case. He submitted, for exclusion of vendor's liability under Section 55(1)(g) of the Transfer of Properties Act, there must be clear and unambiguous terms in the contract. In the instant case, there are no such clear and unambiguous terms of the contract insofar as the electricity charges are concerned. He then submitted, that while interpreting the term in the contract, which is not clear and unambiguous, the interpretation in favour of the purchaser should be preferred. Next he submitted that the MEDC did not take any steps till 2007 to recover the outstanding dues which they could have recovered from defendant No. 1, failing which now they are not entitled to claim electricity charges from the purchaser in auction sale. Learned Counsel for the MEDC and learned Counsel for the Irrigation Department submitted that considering Clause No. 29 read with Clause 9 of the said terms and conditions, it is only the purchasers who are liable to pay all the outgoings including electricity and water charges. It was submitted that insofar as water charges are concerned, the Court Receiver shall have to bear payment towards water charges in the first instance, which he will be entitled to seek reimbursement under the very same clause. Counsel for the plaintiffs and defendant Nos. 3,4 and 5 also submitted that since the sale is subject to encumbrances, the purchasers are liable to pay all outgoings including water and electricity charges. Counsel for the plaintiffs specifically invited my attention to Clause (g) of Section 55 to contend that this provision also makes it clear that where the property is sold subject to encumbrances, all public charges are liable to be paid by the purchaser.
6. Arguments of learned Senior Counsel for the purchasers were centred around Clause 29 and Clause 9 of the Terms and Conditions and, therefore, it would be advantageous to re-produce these clauses for better appreciation of their submissions and to address the arguments advanced by the learned Counsel for the parties. Clause (9) of the Terms and Conditions reads thus:
9. The Court Receiver is selling the properties and assets in accordance with the orders of the Court and the same will be sold free from the encumbrances of the plaintiffs and bankers of defendant No. 1. The purchaser will have to satisfy himself if there are any other encumbrances, charges and liens on or affecting the properties described in the Schedules. The purchasers shall not be entitled to claim any compensation or deduction in price on any account whatsoever and shall be deemed to have purchased the property subject to all encumbrances, liens and claims including those under the existing legislation affecting labour, staff etc, if any, save and to the extent set out herein.
(emphasis supplied)
Insofar as Clause 29 of the Terms and Conditions is concerned, it will have to be divided into eight parts for the sake of convenience, which would read thus:
(a). The property (subject to what is stated hereunder) is sold subject to all the existing rents, rates, taxes, dues, duties, and other outgoings and also subject to existing tenancies (if any) encroachments, charges if any, subsisting thereon.
(b) The Court Receiver shall not be liable to pay the property tax, land revenue, water charges, processing charges, ground or lease rent or other outgoings and in respect of the period from the date of confirmation of sale by the Court, the Purchaser alone shall bear, pay same and discharge the same.
(c) In respect of the period prior to the date of such confirmation by the Court, the Receiver shall bear in the first instance payments, if any, in respect of property tax, land revenue, water charges, ground or lease rent but no other amount including the workmen dues and in the event of there being any other amount payable, for such period the Receiver shall not be responsible for the same.
(d) By the said order dated 23rd August, 2002 passed in Notice of Motion No. 879 of 2002 Khopoli Municipal Council were given liberty to take steps for quantifying their dues under Section 162 of Maharashtra Municipal Councils Nagar Panchayats and Industrial Townships Act, 1965 so that same can be disbursed to Khopli Municipal Council on priority.
(e) The Purchaser would not be entitled to require the Court Receiver to pay any amounts except as aforesaid nor will the Purchaser be entitled to deduct the same or claim any set off or adjustment thereof from the purchase price.
(f) The Purchaser shall also bear all insurance charges, security expenses and all costs or preservation of the properties from the date of sanction of the sale by the Court and neither the Court Receiver nor the plaintiffs shall be required to make any expense on that account.
(g) The outgoing lease rent in respect of the period prior to the date of the sanction of the sale shall be borne and paid out of the sale proceeds in priority to distribution to the parties.
(h) In case however the plaintiffs or the Court Receiver do incur any aforesaid such expense then the purchaser will, as a first charge, be required to reimburse the same with interest thereon till the date of such reimbursement.
(emphasis supplied)
7. Part (a) of Clause 29 provides that the property, subject to what is stated in this clause, is sold subject to all the 'existing dues and other outgoings' apart from rents, rates, taxes, dues, duties etc., if any, subsisting thereon. All 'the other outgoings and dues' subsisting on the property are clearly covered by Part (a) of the clause, subject to what is stated therein. Part (c) of Clause 29 puts burden on the Court Receiver to bear payments, if any, in respect of the property tax, land revenue, water charges, ground or lease rents, 'in the first instance' and the last Part (h) of the clause provides that in case the plaintiffs or the Court Receiver incur any 'aforesaid such expenses' then the purchaser will, as a first charge, be required to reimburse the same with interest thereon till the date of such reimbursement. The expression 'aforesaid such expenses used in this Part (h), in my opinion, covers all the expenses other than the expenses, which the purchaser is liable to pay from the date of confirmation of sale as provided for in Parts (b) and (f). The payments/expenses under Parts (b) and (f) in respect of the period from the date of confirmation of sale, it is only the purchaser who alone shall bear, pay and discharge the same and, therefore, it would not be correct to say the expression 'expenses' occurred in Part (h) covers only the expenses referred to in Part (f). The language used in Part (a), (c) and (h), in my opinion, is clear, plain and unambiguous and it admits only one meaning. These parts of Clause 29 cover all outgoings, specifically mentioned in Part (a) and (c). Other Parts of Clause 29 also make it clear as to what would be the responsibility of the purchasers insofar as payments/ expenses to be paid by them.
8. That apart the expressions 'the existing dues' and 'other outgoings', apart from rents, rates, taxes, dues, and duties etc., in Part (a) of Clause 29, in my opinion, mean and relate to the property sold in auction or attached to the property. Mr. Shroff, learned Senior Counsel could not and did not dispute that the electricity and water charges are attached to the property. Clause (g) of Section 55 of the Transfer of Property Act, 1882 do indicate that the seller/vendor has to pay all public charges and rent accrued due in respect of the property upto the date of the sale, the interest on all encumbrances on such property due on such date. However, it further says, except where the property is sold subject to encumbrances, to discharge all encumbrances on the property then existing. That apart, Section 55 starts with the clause 'in the absence of a contract to the contrary' thereby clearly indicating that where there is a contract to the contrary or where the property is sold subject to encumbrances on the property then existing, it is purchaser who has to discharge all encumbrances attached to the property. In the present case, admittedly, there is a concluded contract and the terms of the contract and more particularly Clauses (29) and (9) clearly provide that the purchasers to purchase the property subject to all encumbrances which, in my opinion, include not only electricity charges and water charges but even the dues covered by Parts (a) and (c) of Clause (29) of the Terms and Conditions. Insofar as the water charges are concerned, undoubtedly, Part (c) of Clause 29 provides that in the first instance the Court Receiver shall bear the payment, but Part (h) of the clause empowers the Court Receiver to seek reimbursement of the expenses incurred by him towards the payment reflected in Part (c) of Clause (29). Moreover, Clause (29) will have to be read with Clause (9) of the Terms and Conditions.
9. Clause (9) of the Terms and Conditions specifically states that the purchaser will have to satisfy himself that if there are any other encumbrances, charges and liens on or affecting the properties described in the schedules and shall not be entitled to claim any compensation or deduction in price on any account whatsoever and shall be deemed to have purchased the property subject to all encumbrances, liens and claims including those under the existing legislation affecting labour, staff etc, if any, save and to the extent set out therein. From bare perusal of these two Clause (Clauses 29 and 9) it is clear, the purchasers have purchased Lot Nos. 1 and 4 subject to all encumbrances.
10. The Judgment relied upon by Mr. Dhakephalkar, learned Senior Counsel in (M. Mahamood .) : AIR1944Mad572 , in my opinion, has no application to the facts of the present case for the reasons recorded hereinabove. Clause 29 read with Clause (9) of the Terms and Conditions is absolutely clear and the purchasers with open eyes made their offers after having understood the terms and conditions therein and, therefore, they are bound by the terms and conditions of the contract.
11. Insofar as the submission of Mr. Shroff, learned Senior Counsel, in respect of the liability of the purchaser and the right of the MEDC to recover the outstanding dues in relation to Clause 10.5 of the Regulations is concerned, I would not like to enter into the controversy as to how much is the due amount and how much they are liable to pay and it will be appropriate to keep the right of the purchasers open to contest the demand made by the MEDC by adopting appropriate remedy, as may be available in law. In the circumstances I issue the following directions:
(a) The purchasers of Lot Nos. 1 and 4 shall either deposit or furnish a security to the satisfaction of the Court Receiver of the amount due towards electricity, water charges and the other dues, if any, under Clause 29 within a period of eight weeks from today, with liberty to the purchasers to challenge such demands within six weeks from today, if they so desire, by adopting appropriate proceedings, if any, available or provided in law. It is open to the Court Receiver to insist for bank guarantee if he is not satisfied with the security furnished by the purchasers of the Lots. It is made clear that proceedings challenging the demand, shall not be maintainable against the Court Receiver. It is further made clear that the payments which the purchasers are liable to make, as provided by Clauses 29 and 9 of the Terms and Conditions, shall not be made out of the sale proceeds. If the purchasers choose to contest any demand, the deposit/security furnished, as aforestated, would be subject to outcome of those proceedings. If the purchasers fail to or do not challenge the demands, they shall deposit the monies as demanded by the Court Receiver under the different heads, which they are liable to pay as provided for under Clause (29) of the Terms and conditions, before expiry of the period of eight weeks from today.
(b) The Court Receiver shall execute Conveyance upon compliance of all the aforementioned directions issued without further delay.
(c) It is open for the MEDC, the Irrigation Department or any other agency to demand the monies due directly from the purchasers within a period of two weeks from today. If they do not do so it is open for the purchasers to challenge/contest the demand on the basis of the demand made by the Court Receiver on their behalf or on the basis of the claim made by them. In any event the purchasers shall comply with all the aforementioned directions within the time stipulated.
(d) The MEDC is directed to restore electricity supply at the suit property covered by Lot Nos. 1 and 4 within a period of six weeks from today subject to the purchasers complying with all formalities, except the payment of dues demanded by them for the period prior to the confirmation of sales. (e) In the result, both the Chamber Summons and prayer Clauses (a), (b) and (c) in the Court Receiver's Report stand disposed of in terms of this order. Insofar as prayer Clause (d) in the Court Receiver's Report is concerned, the Court Receiver to comply with the order issued by this Court dated 19.10.2007 in the Court Receiver's Report No. 324 of 2007 within a period of six weeks from today.
Before I part, I deem it appropriate to issue the following directions to the Court Receiver:
(i) The Court Receiver, while conducting auction sale of similar nature, shall, as far as possible, ensure that he collects all figures of the dues or other outgoings contemplated under Clause (29) read with Clause (9) of the Terms and Conditions, attached to the property to be auctioned, and more particularly the dues above twenty-five thousand, from all agencies, such as MEDC, Irrigation Department, Revenue Department etc. and see that the bidders are informed about it before the last date of submitting tenders. This Court is informed that similar auctions are often conducted by the Office of the Official Liquidator and in view thereof, the office is directed to forward copies of this order to the Office of the Court Receiver and the Official Liquidator.