Laxmi Madhukar Athawale vs Ssd Escatics Pvt Ltd

CNR No : HCBM020339152026

2026:BHC-OS:23211
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AGK
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN IT’S COMMERCIAL DIVISION
INTERIM APPLICATION (L) NO.33914 OF 2026
IN
COMM ARBITRATION PETITION NO.682 OF 2025
Laxmi Madhukar Athawale
… Applicant
ATUL
GANESH
KULKARNI
In the matter between
Digitally signed by
ATUL GANESH
KULKARNI
Date: 2026.10.27
12:11:16 +0530
Laxmi Madhukar Athawale
… Petitioner
Vs.
1. SSD Escatics Private Limited
2. Vivek Tanna
3. Jayesh Tanna
4. Deep Tanna
5. Jeki Jitendra Mehta
6. Shweta Patel
7. Prashant Eshi
8. DBS Bank India Limited
… Respondents
Mr. Baharaiz Irani with Ms. Afrin Dalal, Mr. Anosh
Irani, Mr. Amit Padwal, and Ms. Saniya Ahmed for the
Petitioner/Applicant.
Mr. Rajiv Narula with Mr. Devansh Shah, Mr. Shrey
Shah, and Mr. Aksha Huddar i/by Huddar & Associates
for Respondent Nos.1 to 3.
CORAM : AMIT BORKAR, J.
RESERVED ON : OCTOBER 21, 2026.
PRONOUNCED ON : OCTOBER 27, 2026
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JUDGMENT:
1. The present Interim Application (L) No. 33914 of 2026 has
been filed by the Petitioner asking that she should be allowed to
withdraw INR 1,25,00,000/-, which was deposited on behalf of
Respondent No. 1 as per the order dated 24 July 2024, as modified
on 8 August 2024, together with the interest earned on it. The
main question to be considered is whether, looking at the facts of
this case, the Petitioner can be permitted to take this amount
before the disputes between the parties are finally decided in
arbitration.
2. I have heard the learned Advocates appearing for both sides.
I have considered their arguments, the documents placed on
record and the earlier orders passed by this Court. The facts of this
case need to be looked at carefully. The Petitioner is a 75-year-old
widow who is taking dialysis treatment. She says that she spent all
her life savings for purchasing Flat No. 301, situated on the 3rd
Floor of Kapil Vastu CHS Ltd., Goregaon (West), Mumbai.
According to her, Respondent No. 1 accepted her money even
though the flat had been sold to Respondent Nos. 5 and 6 in
December 2017 and was mortgaged with DBS Bank. After this, the
Bank auctioned the flat for INR 1,15,00,000/-, and the Petitioner
was dispossessed from the flat on 1 April 2025.
3. The Petitioner says that she was not told about the earlier
sale and mortgage of the flat. According to her, Respondent Nos. 1
to 4 told her that Respondent No. 1 had a clear title and was
entitled to sell the flat. Believing what they told her, she paid INR
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85,10,000/- through cheques and RTGS and gave gold worth INR
40,00,000/-. Receipts mentioning Flat No. 301 were issued and
signed by Respondent No. 2. The Petitioner relies on these receipts,
the Memorandum of Understanding dated 13 January 2020, the
correspondence with the Bank and the statements made by the
Respondents themselves in different proceedings.
4. These facts have been considered by this Court earlier. The
dispute was considered when this Court decided the interim reliefs
in Commercial Arbitration Petition (L) No. 18631 of 2023 by order
dated 24 July 2024. In that order, this Court considered the
objections raised by Respondent Nos. 1 to 4 about the existence
and genuineness of the Memorandum of Understanding. In
paragraph 14, this Court observed that the preliminary objection
was “entirely devoid of merit” and “downright dishonest”.
5. The Court had given reasons for making these observations.
The receipts issued by Respondent No. 1 and signed by
Respondent No. 2 were not denied. The payments mentioned in
those receipts were not disputed. The receipts mentioned Flat No.
301, and the company seal appearing on the Memorandum of
Understanding was not denied. Further, Respondent No. 2 had not
said in his affidavit that the signature appearing on the
Memorandum of Understanding was not his signature. Paragraph
15 of the same order this Court observed that Respondent Nos. 1
to 4 had not explained the fraud which, according to them, was
committed by the Petitioner. On the other side, when all the facts
were considered together, they prima facie showed that the fraud
had been committed by Respondent Nos. 1 to 4. This Court further
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observed that allowing them to use fraud as a defence in these
circumstances “would amount to putting a premium on
dishonesty”. Their preliminary objection was therefore rejected.
These observations were made while deciding the interim reliefs.
This does not mean that all disputes between the parties have been
finally decided. But now, when this Court is considering whether
the amount deposited under its order should be released to the
Petitioner, these earlier findings cannot be left out of
consideration. The documents and other material on which those
findings were made are still relevant for deciding the present
application.
6. Paragraph 16 of the order dated 24 July 2024 records other
circumstances considered by this Court. In paragraph 16(I), the
Court noted that the learned Advocate appearing for Respondent
Nos. 1 to 4 had not made any submission on the merits explaining
why the reliefs sought by the Petitioner should not be granted. In
paragraph 16(II), the Court noted that Respondent No. 1 had
stated on oath that it was paying the loan instalments relating to
the flat. In paragraph 16(III), the Court recorded that Respondent
No. 1 had undertaken through its correspondence to repay the
loan to DBS Bank. In paragraph 16(IV), the Court noted that
Respondent No. 5 had stated in an affidavit that Respondent Nos.
1 to 4 had committed fraud in connection with the sale of the flat.
In paragraph 16(V), the Court found the defence raised by
Respondent Nos. 1 to 4 to be patently dishonest. After looking at
these circumstances, this Court recorded in paragraph 17 of the
earlier order that the Petitioner had made out a strong prima facie
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case, that the balance of convenience was entirely in her favour
and that irreparable harm would be caused to her if interim
protection was not given. Respondent Nos. 1 to 4 were therefore
directed to deposit INR 1,25,00,000/- with the Prothonotary and
Senior Master within two weeks.
7. The present application has to be considered keeping these
earlier findings in mind. Respondent Nos. 1 to 4 did not deposit
the amount as a normal payment which they voluntarily made to
the Petitioner. They deposited it because this Court had directed
them to deposit it. The earlier order was passed after considering
the material then available and finding that the Petitioner's claim
required protection. The question now is whether the earlier
circumstances, along with what has happened afterwards, justify
allowing the Petitioner to withdraw the amount.
8. Mr. Narula, learned Advocate appearing for the Respondents,
has opposed the request for withdrawal. He submitted that the
communications relied upon by the Petitioner do not show that the
Respondents admitted the entire amount of INR 1,25,00,000/-.
According to him, the Respondents have admitted receiving about
INR 85,00,000/-, but they have not admitted that they are liable to
pay the higher amount claimed by the Petitioner. He further
submitted that the communication dated 9 May 2023, sent by the
Advocate for the Respondents to the police authority, was only a
proposal for settling the dispute.
9. Mr. Narula pointed out that this communication states that
settlement for withdrawing the FIR was going on and that the
Respondents had handed over a pay order and cheques amounting
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to INR 1,25,00,000/-. It says that the detailed terms of settlement
would be finalised at the earliest. According to Mr. Narula, since
these detailed terms were never finalised, the communication
cannot be treated as an admission that the Respondents are
required to pay INR 1,25,00,000/- to the Petitioner.
10. Mr. Narula further submitted that if the Petitioner is allowed
to withdraw the amount, she would get the final relief at an
interim stage. The disputes between the parties have not yet been
finally decided in arbitration. The Section 11 Application has been
filed. According to him, the proper course is to appoint an
Arbitrator and allow both sides to prove their respective claims
before the Arbitrator. He therefore submitted that the present
application for withdrawal should be rejected. These submissions
have to be considered. The Court cannot treat a disputed claim as
finally proved only because an amount has been deposited in
Court. At the same time, the Court must consider why the deposit
was ordered, what has happened after that order and whether
keeping the amount in Court any longer will serve the purpose for
which interim protection was given earlier.
11. The first submission of Mr. Narula is that the Respondents
have admitted only INR 85,00,000/- and have disputed the
remaining amount. It is true that the final amount payable by the
Respondents will have to be decided after considering the relevant
agreements, payments, admissions and other evidence. The exact
liability cannot be finally decided while considering the present
application for withdrawal. The question of the gold allegedly
given by the Petitioner, the amounts paid through cheques and
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RTGS and the legal effect of the different communications may
have to be considered in the arbitration proceedings. However, the
present application cannot be decided by looking only at the
alleged admission of INR 85,00,000/-. In the earlier order dated
24 July 2024, this Court considered the receipts, payments,
signatures, company seal and correspondence between the parties.
The Court considered the statements made by the Respondents
about payment of the loan instalments and their undertaking to
repay DBS Bank. After considering all these circumstances, this
Court directed the deposit of INR 1,25,00,000/-. It has not been
shown that this order was set aside. Therefore, the submission of
the Respondents that this Court should now ignore the earlier
findings and proceed as if the Petitioner's claim is supported only
by an admission of INR 85,00,000/- cannot be accepted.
12. The communication dated 9 May 2023 must be considered in
its proper background. The relevant portion states:
“a settlement to that effect is ongoing for which we have
handed over Pay order/cheques amounting to a sum of Rs.
1,25,00,000/-”.
13. The communication further says that the detailed terms of
settlement would be finalised at the earliest.
14. It is not possible to read this communication as if the
Respondents had never offered to make any payment. The
communication records that a pay order and cheques totalling INR
1,25,00,000/- had been handed over in connection with the
proposed settlement. The record contains the statement made by
Respondent No. 3 before the Sessions Court on 3 October 2023. In
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that statement, he referred to the pay order dated 6 May 2023 and
five cheques towards INR 1,25,00,000/-. In paragraph 8 of the
earlier order, this Court recorded that this conduct amounted to
“an offer to repay an amount of Rs. 1,25,00,000/- to the
Petitioner”. Therefore, the settlement did not become final merely
because the payment instruments were handed over. But the offer
made by the Respondents remains an important circumstance. The
amount of INR 1,25,00,000/- was proposed by the Respondents
themselves when the dispute was going on. They cannot ask this
Court to ignore this fact only because the proposed settlement was
not completed.
15. There is other material which shows why the Petitioner's
claim requires protection. The registered Agreement for Sale in
favour of Respondent Nos. 5 and 6 was executed on 20 December
2017. A home loan was taken from DBS Bank against the same
flat. Respondent No. 1 informed the Bank about the sale and
undertook not to cancel the sale without the Bank's consent. In
June 2020, Respondent No. 1 asked Respondent No. 5 to seek a
moratorium and assured him that the loan instalments would be
paid regularly. The letter dated 20 March 2023 records the
commitment of Respondent No. 1 to clear the outstanding loan
amount. Respondent No. 1 stated in its affidavit that it was paying
the loan instalments and was in physical possession of the flat.
These circumstances were considered by this Court in the earlier
order. They are important because the Petitioner's case is not based
only on her present statement that the Respondents owe her
money. There are documents and statements made by the
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Respondents themselves which this Court had found sufficient, at
the interim stage, to give protection to her claim.
16. Another important fact is that the full amount directed to be
deposited has now been deposited. By order dated 24 July 2024,
the Respondents were directed to deposit the amount within two
weeks. However, INR 60,00,000/- was deposited only on 4 August
2026 and the remaining INR 65,00,000/- was deposited on 11
September 2026. Thus, the full amount was deposited almost two
years after the direction and only after contempt proceedings and
further directions of this Court. The Petitioner was not responsible
for this delay. She had to start contempt proceedings to get
compliance with an order which had been passed in her favour.
During this period, she lost possession of the flat. The amount was
deposited only after the flat had been auctioned and the Petitioner
had been dispossessed.
17. This later development is important. When the earlier order
was passed, interim protection was given keeping in view the loan,
the charge over the flat and the need to protect the Petitioner's
interest until arbitration. However, DBS Bank has since auctioned
the flat, and the Petitioner has lost possession. The situation has
therefore changed in an important way. This Court must now
consider whether the amount lying with the Court can be used to
protect the Petitioner in the situation which exists today.
18. The present application must be considered on its own facts
and in the light of the earlier order passed by this Court. The
Petitioner is not relying on a final arbitral award. She is asking for
release of money deposited under an interim order in a dispute
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where this Court has found a strong prima facie case in her favour.
Further, the circumstances have changed after the earlier order.
The flat has been auctioned, the Petitioner has lost possession and
the Respondents deposited the money only after a long delay and
after contempt proceedings were started.
19. The submission that withdrawal would amount to final relief
must be considered along with the earlier order. By order dated 24
July 2024, this Court found that the Petitioner had a strong prima
facie case and directed the Respondents to deposit a particular
amount. The Court did not finally decide the Petitioner's claim for
damages or decide every amount payable to her. The deposit was
ordered to give protection. It did not become a final award of
compensation. The present application asks for permission to
change the way the amount is kept and used. If withdrawal is
allowed, the Petitioner will get immediate access to the money.
Therefore, it cannot be said that such an order will have no
practical effect on the parties. But this fact alone cannot decide the
application. The Court must consider the hardship which may be
caused to both sides and whether conditions can be imposed to
protect the Respondents if the final decision goes in their favour.
20. The Respondents will still have the right to dispute the
Petitioner's claims before the Arbitrator. The present order need
not be treated as a final finding that INR 1,25,00,000/- is
definitely payable to the Petitioner. On the other hand, the
Petitioner is an aged widow who is undergoing dialysis. She has
lost possession of the flat and has to arrange for her
accommodation and medical treatment. The money lying in Court
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comes from the very transaction relating to her purchase of the
flat. Keeping the entire amount in Court for an unlimited period,
even after the circumstances have changed, would cause
continuing hardship to her.
21. The conduct of the Respondents needs to be considered. The
amount was directed to be deposited within two weeks, but the
deposit was completed only in August and September 2026. The
Petitioner had to pursue contempt proceedings to get compliance.
By the time the full amount was deposited, the flat had been
auctioned and the Petitioner had lost possession. The Respondents
cannot take advantage of their delay in complying with the order
of this Court, particularly when because of the delay the Petitioner
remained without the protection which the Court had directed.
22. The Respondents knew about the order, and the amount has
now been deposited. The Petitioner had to wait until the order was
complied with before asking to withdraw the money. She filed the
present Interim Application within about two weeks after the
deposit was completed. Her request must therefore be considered
along with the steps taken by her to get compliance and the loss
which she has suffered.
23. In the facts of this case, such a condition is proper. The
Petitioner should not be kept without access to the amount merely
because the final decision may take time, particularly when this
Court had directed the deposit after finding a strong prima facie
case and the Petitioner has lost the flat. At the same time, the
Respondents must retain their right to dispute the claim and seek
proper relief at the final stage.
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24. In the circumstances, the following order is passed.
(a) Interim Application (L) No. 33914 of 2026 is allowed;
(b) The Petitioner is permitted to withdraw INR
1,25,00,000/-, together with the interest accrued thereon,
from the amount deposited with the Prothonotary and
Senior Master pursuant to the order dated 24 July 2024, as
modified on 8 August 2024;
(c) Before withdrawal, the Petitioner shall file an
undertaking before this Court that the amount withdrawn
shall remain subject to the final decision in the arbitration
proceedings and that she shall comply with any direction for
repayment or restitution passed by a competent court;
(d) The withdrawal permitted by this order shall not
prevent the Respondents from raising their defences before
the Arbitrator;
(e) The Prothonotary and Senior Master shall permit
withdrawal of the amount, together with accrued interest,
upon compliance with the above condition;
25. There shall be no order as to costs.
(AMIT BORKAR, J.)
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