Bombay High Court
JAHANGIR ISMAIL SHAIKHversusASSET RECONSTRUCTION COMPANY ( INDIA) LIMITED
- Decided
- Disposal
- DISPOSED OFF
Holding
Respondent No.3 Society must deposit the total corpus fund installments amounting to Rs.34,72,923.61 with 6% interest, thereby modifying the earlier DRAT order.
Summary
The petitioner challenged a Debt Recovery Appellate Tribunal (DRAT) order that limited the deposit by Respondent No.3 Society to a single installment of Rs.4,94,106 with interest. The High Court found that the DRAT had misdirected itself by treating that amount as the entire corpus fund, which actually comprised multiple installments. After the Society provided an affidavit detailing the dates of all five installments, the Court calculated interest at 6% from the respective due dates. The Court held that the DRAT order was erroneous and modified it, directing Respondent No.3 Society to deposit the total principal of Rs.24,80,530 plus interest, amounting to Rs.34,72,923.61, within four weeks. The petition was consequently disposed.
Issues considered
- Whether the DRAT order limiting the deposit to Rs.4,94,106 was erroneous in view of the entire corpus fund.
- What is the correct amount of corpus fund installments and the applicable interest payable by Respondent No.3 Society.
- Whether the High Court can modify the DRAT order and direct full payment with interest.
Subjects
- corpus fund
- Debt Recovery Appellate Tribunal
- interest calculation
- installment deposit
- writ petition
- DRAT order
- misdirection
- simple interest
Judgment
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.2701 OF 2026
Jahangir Ismail Shaikh .. Petitioner
V/S.
Asset Reconstruction .. Respondents
Company ( India) Limited
WITH
INTERIM APPLICATION (L) NO. 20662 OF 2026
Digitally
signed by
IN
VARSHA
VARSHA DEEPAK
DEEPAK GAIKWAD
GAIKWAD Date:
WRIT PETITION NO.2701 OF 2026
2026.07.10
18:31:57
+0530
Imaan Foundation through its .. Applicant/Petitioner
trustee Ali Akbar Ratansey
V/S.
Asset Reconstruction .. Respondents
Company ( India) Limited
-------------------
Mr. Yogesh K. Deshpande with Pranav P. Rane i/by YKD and Associates,
for the petitioner.
Mr. Umal Azam, for respondent No. 2.
Mr. Jamshed Ansari, for respondent No.3.
--------------------
CORAM : MANISH PITALE &
SHREERAM V. SHIRSAT, JJ.
DATE : 10TH JULY 2026.
PC:
1. In this petition on 19/06/2026, this court had passed the
following order.
"1. Heard learned counsel for the petitioner and learned
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counsel appearing for contesting respondent No. 3-Society.
2. The petitioner is aggrieved by the manner in which the
miscellaneous application for direction filed on his behalf was
disposed of by the Debt Recovery Appellate Tribunal, Mumbai
(DRAT) by the impugned order dated 21/04/2026.
3. At first blush, it appears that the DRAT granted relief to
the petitioner by disposing of the said application with a
direction to respondent No. 3-Society to deposit the amount of
Rs. 4,94,106/- along with interest @ 6% p.a. from the date of
order dated 19/05/2011 with the Registry of the DRAT.
4. But, upon hearing the learned counsel for the rival
parties and on perusal of the documents filed along with Writ
Petition, particularly the pleadings in Miscellaneous Application
No. 52 of 2023 filed by the petitioner, we find that the DRAT
misdirected itself by proceeding on the basis that the aforesaid
amount constituted the entire corpus fund, which was to be
deposited by respondent No.3-Society with the DRAT in terms of
the order dated 19/05/2011.
5. The documents on record clearly show that the said
amount pertained to the first installment of the corpus fund.
With passage of time, the development project has been
completed and the petitioner has also received possession of the
flats, but the controversy is still at large before the Debt
Recovery Tribunal in the form of an original application filed by
the respondent No.1.
6. We find that the order dated 19/05/2011, in no
uncertain terms, directed that respondent No. 3-Society shall
deposit the share of the petitioner in the corpus fund with the
Registry of the DRAT. The respondent No.3-Society is not
justified in claiming that the said direction pertained only to the
first installment of the corpus fund.
7. We find substance in the contention raised on behalf of
the petitioner that the said direction pertained to the entire
corpus fund.
8. The terms of the development agreement placed on
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record show that the corpus fund was to be deposited by the
developer in installments depending on the stage of the
development. It is not disputed that the developer indeed
deposited such amounts, and we are of the opinion that the
moment the developer deposited such installments towards the
corpus fund with respondent No.3-society, as per the order dated
19/05/2011, it was incumbent upon respondent No.3-Society to
have deposited such amounts with the DRAT.
9. The petitioner claims that the entire amount towards the
corpus fund i.e. Rs.24,80,536/- should be deposited with
interest by respondent No.3-Society in the DRAT. While we are
in agreement with the submissions made on behalf of the
petitioner that the entire corpus fund is required to be
deposited, while considering the question of interest payable on
the amount, we are of the opinion that a direction with regard
to the same can be issued only when details of the dates when
the installments of the corpus fund were deposited by the
developer with the respondent No. 3-Society are placed before
this Court.
10. In view of the above, we are inclined to allow this
petition, but a specific direction with regard to the interest
component and from the dates from which the interest would
accrue can be issued only after the aforesaid details are placed
before this Court.
11. In view of the above, respondent No.3- Society is
directed to file an additional affidavit, giving details of the dates
on which the developer deposited the installments towards
corpus fund as per the development agreement so that the Writ
Petition can be appropriately disposed of.
12. The additional affidavit be filed within one week from
today.
13. List this petition for further consideration on 3rd July
2026 in the supplementary list.
14. At this stage, we find that respondent No.3-Society has
already filed its reply affidavit. Other respondents are permitted
to file their reply affidavits before the next date of listing."
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2. Subsequently, on 03/07/2026, the following order was
passed:
. In the light of the order dated 19th June 2026,
the respondent No.3-Society has filed an additional
affidavit, giving details in paragraph 3 about the dates
on which the five installments towards corpus fund
were due and payable under the Development
Agreement dated 30th July 2010. In the table at
paragraph 3, as regards first installment, there is a
typographical error and the learned counsel for the
respondent No.3-Society submits that the date 1st July
2025 may be read as 1st July 2015
2. The petitioner does not dispute the details
given in paragraph 3 and the table contained therein.
3. The quantum of the installment pertaining to
both the flats i.e. Flat No.001 and Flat No.203, coming
to Rs.4,94,106/- is not disputed. Therefore, in the
light of the observations made in the order dated 19th
June 2026, the respondent No.3-Society will now have
to deposit the installments with 6% interest from the
dates on which the respective installments were due.
In order to obviate any further dispute between the
parties, liberty is granted to the petitioner as well as
the respondent No.3-Society to sit together and
calculate the amounts in terms of the observations
made hereinabove, so that a specific direction can be
passed for the respondent No.3-Society to deposit
amounts pertaining to all the five installments before
the Debts Recovery Appellate Tribunal (DRAT), within
a specific period of time.
4. List for further consideration/disposal on 10th
July 2026, to be included in the supplementary list.
3. Today, the learned counsel appearing for the respondents has
presented a simple interest calculation sheet in terms of the directions
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contained in Paragraph 3 of the above-quoted order dated
03/07/2026.
4. While learned counsel for the petitioner does not dispute the
numbers that are calculated in the said sheet, he submits that if the
true purport of the order dated 19/05/2011 passed by the Debt
Recovery Appellate Tribunal, Mumbai (DRAT) is taken into
consideration and if respondent No3 - society had indeed deposited the
installments pertaining to the corpus fund at the relevant time, the
amount would have been invested in fixed deposit and renewed every
13 months. On this basis, learned counsel for the petitioner submits
that the said aspect also needs to be taken into consideration and
accordingly a calculation carried out by the petitioner needs to be
accepted, which would result in a further amount of Rs. 2,30,000/-.
5. We are of the opinion that, in the facts and circumstances of the
present case, it shall be appropriate to record substantial compliance
on the part of respondent No.3 with regard to the direction contained
in Paragraph 3 of the order of this Court in the present petition dated
03/07/2026, if the calculation sheet submitted on behalf of respondent
No.3-society is accepted.
6. In the light of our observations made in the order dated
19/06/2026, we find that the DRAT erred in directing in the impugned
order dated 21/04/2026 that respondent No.3- society will deposit
only an amount of Rs.4,90,106/-along with interest @ 6% p.a.
calculated from order dated 19/05/2011.
7. To that extent, the impugned order is modified to hold that
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respondent No. 3-society is liable to deposit the amount towards the
installments as indicated in the order dated 19/06/2026 passed in this
writ petition along with 6% interest. The amounts when calculated in
terms of the said opinion of this Court, are as follows:
Simple Interest Calculation Sheet
Installment Amount Date From Up to Number of Total (Rs.)
Number (Rs.) Days
1st Installment 4,96,106.00 01/07/2015 10/07/2026 4028 3,28,490.13
2nd Installment 4,96,106.00 02/10/2017 10/07/2026 3204 2,61,291.55
3rd Installment 4,96,106.00 06/12/2019 10/07/2026 2409 1,96,457.98
4th Installment 4,96,106.00 10/10/2021 10/07/2026 1735 1,41,492.15
5th Installment 2,48,669.00 03/12/2023 10/07/2026 951 38,874.12
6th Installment 2,47,437.00 15/10/2024 10/07/2026 634 25,787.68
Total 24,80,530.00 9,92,393.61
Rate of Interest (% p.a.) - 6.00%
Days in Year (basis) - 365
Total Amount Payable (Principal + Interest) 34,72,923.61
Formulas used:
Number of Days = (Up-To Date - Date From) + 1 [both days inclusive]
Total Interest = Amount x Rate x Days / (100 x Days-in-Year)
Rate and Days-in-Year are linked to cells I3 and I4 - change them to recompute the whole sheet.
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8. In view of the above, we direct that the aforesaid amount of
Rs. 34,72,923.61/- shall be deposited by respondent No.3-society with
the DRAT, Mumbai, within four weeks from today.
9. The Writ Petition is disposed of in the above terms.
10. Pending applications, if any, also stand disposed of.
(SHREERAM V. SHIRSAT, J.) (MANISH PITALE, J.)
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