IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
NOTICE OF MOTION NO: 707 OF 2010 IN
SUIT (LODGING) NO. 229 OF 2010
M/s. Jasmina Constructions Pvt. Ltd. ...Plaintiffs.
Vs.
Mandapeshwar Kripa Co-operative Housing Society Limited & Ors: Defendants
Mandapeshwar Kripa Co-operative Housing Society Limited & Ors: Defendants
Mr. Rajiv Narula with Mr. Basant
Trilokani i/by M/s. Jhangiani Narula & Associates for the Plaintiffs
Mr. S. U. Kamdar, Sr. Counsel with
Mr. Vinay Deshpande with Ms. Meenakshi Mhapeukar i/by M/s. Shamim & Co. for
Defendant No.
1. Mr. Ajay M. Talreja for Defendant
No. 8
Mr. Deepak S. Jadhav for Defendant
Nos. 2, 3, 4 & 6
CORAM: ANOOP V. MOHTA, J.
Dated: 5th March, 2010
P.C
Leave granted.
The Plaintiffs, who are Builders
and Developers, claiming binding and enforceable rights against the
Defendants, in view of a Development
Agreement dated 3rd January, 2009 and a Supplementary Agreement dated 4th January,
2009 and also praying for specific performance of the same against Defendant
No.1 Society and all necessary orders to complete the construction and to
perform their obligation
even against Defendant Nos. 2, 3, 4, 6 and 8, for the reliefs of injunction and
also for appointment
of Receiver to take possession of the flats from them for the agreed
development.
Defendant No.1 is a Co-operative
Housing Society, registered under the provisions of Maharashtra Co-operative Societies Act, 1960
(for short, "the Act"). The Society is the owner of the land situated
at Village Mandapeshwar, Tq. Borivli, bearing Survey No. 23, 23A, admeasuring
5960.46 sq. meters. On the said land there exists “A” type and “B” type
buildings having 5 wings consisting of total 84 flats, which were in use, occupation and possession of the members of
the Society comprising of 84 members, out of which some of the Defendants are
now objecting for redevelopment.
All the members in the General
Body Meeting have unanimously resolved to redevelop the dilapidated
buildings/ flats by demolishing the same and by utilizing the FSI and by loading of Transferable Development Rights (TDR) by constructing the
new buildings for the members of the Society. This resolution of 20/05/2007 was
objected by only one person at the relevant time.
Based upon the same, the Society invited tenders
for the proposed demolition of the existing buildings and the development, on
14/02/2008. The Plaintiffs got the technical commercial bid from the Society on
05/03/2008. After considering the proposals/ offers given by the Plaintiffs on
01/05/2008, the members of the General Body of Defendant No.1 Society,
unanimously resolved appointment
of Plaintiffs and thereby, also authorized executive committee to
execute the Redevelopment Agreement with the Plaintiffs. Accordingly, the
Society issued Letter of Intent to the Plaintiffs on 11/05/2008. The Society
also addressed a letter on 29/08/2008 to the Assistant Commissioner, Borivli
describing the deteriorating condition of the building. Apart from other
members, Defendant Nos. 2 to 7 has also executed irrevocable consent terms on 09/10/2008.
Sometime in January, 2009, the Final Development Agreement was executed
between the Plaintiffs
and the Society and also executed deeds of confirmation cum declaration. It has
been duly registered. Defendant Nos. 4, 5 and 6 by letter dated 23/04/2009
informed to the Society their willingness to surrender
their respective rights in the flat, if the Plaintiffs pay the current market
price and a lump sum amounts for the settlement of the objection/dispute. The
Plaintiffs by letter dated 28/10/2009, pointed out to Defendant No.1 Society
the demand of lump sum consideration of Defendant Nos. 2 to 6 of Rs.25,00,000/
(Rupees twenty five lakh only).
Defendant Nos. 2 to 6, on 09/11/2009, as demand could not be fulfilled,
filed the dispute before the Co-operative
Court against the Society and the Plaintiffs and thereby challenged
to the Development
Agreement and further that the meeting so held and the resolution/
decision so taken are not binding upon them. There was no application for
interim relief as taken out by the Defendants immediately.
The Deputy
Registrar, Co-operative Societies, Mumbai by letter dated
31/12/2009, observed that the work of development was in accordance with the
procedure prescribed and there is no irregularity.
On 04/01/2009, a supplementary agreement executed between the Society
and the Plaintiffs regarding the further terms and
conditions pursuance to the basic Development Agreement. The
Plaintiffs got the plan approved in July, 2009 and subsequently amended the
plans on 01/01/2010. The Plaintiffs and Society have executed a deed of Rectification on 05/08/2009.
Out of 84 members, 77 members of the Society have vacated their
respective premises for the redevelopment. The Plaintiffs have already entered
upon the property and demolished the two wings comprising of the members who
have vacated their respective flats. The work is in progress. Defendant Nos. 5
and 7 have settled the matter on 15/02/2010 and agreed to vacate their
respective flats.
There is no dispute that the Plaintiffs have incurred and invested huge amount approximately Rs. 8.5
Crores till the date, for the purpose of purchasing TDR, security deposit, Bank Guarantee and by
depositing cheques towards the rent, brokerage, transportation charges etc. of
77 members.
The Plaintiffs, pursuance to the basic requirements of the consent terms
of all the members at the relevant time, and the unanimous resolution in their
favor and duly signed
and registered documents, proceeded and acted in full swing without
any obstruction and objection of anybody except Defendant Nos. 2, 3, 4, 6 and
8.
· The Plaintiffs procured licenses from the State Archeology Department, which were
required for the reconstruction of the buildings within 45 days which was a condition precedent
in appointing Plaintiffs as developers
· The Plaintiffs obtained NOC
from the Public
Housing Department and removed the reservation, which was required
·
The Plaintiffs has paid scrutiny fees for deduction of TDR;
·
The Plaintiffs has obtained CFO
concession;
· The Plaintiffs applied for and obtained copies of the PR Card, DP
remarks, conveyance in favor of the Society, copies of the original building
plans, etc.;
· The building plans were prepared and submitted to the Defendant No.1
Society for its approval; Defendant No.1 Society has approved the building
plans submitted by the Plaintiffs and the Municipal
Corporation of Greater Mumbai has sanctioned the building plans; the
Plaintiffs have obtained the IOD;
·
The Plaintiffs has appointed Architects for the redevelopment project;
· The Plaintiffs has paid a sum of Rs.11,00,000/ to Defendant No.1 Society
towards corpus
fund, a sum of Rs. 2,64,00,000/ to members of Defendant No.1 Society
and a sum of Rs.25,00,000/ towards security deposit;
· Out of Rs.5,60,00,000/, a sum of Rs.2,64,00,000/ has been distributed
amongst 75 members who have vacated their respective flats and handed over
possession of the same to the Plaintiffs;
· The Plaintiffs has commenced demolition of 2 out of the 5 buildings
belonging to the Society, which are to be reconstructed;
·
The Plaintiffs has purchased total TDR
required for the entire project from the open market, obtained development rights certificate and has loaded
TDR of 1,350 square meters required for the Defendant No.1;
· The Plaintiffs has paid transportation/ shifting charges to members who
have vacated their respective flats;
· The Plaintiffs has paid to each of the members who have vacated their
respective flats, monthly compensation for 11
months to enable them to secure temporary alternate accommodation
and balance postdated
cheques aggregating to 1,47,51,000/;
· Defendant No.1 has given possession and Plaintiffs has entered upon the
property and started demolition;
· The Plaintiffs has paid 2 months brokerage charges to the members who
have vacated their respective flats for the purpose of acquiring temporary
alternate accommodation.
A Division Bench of this Court in Saraswat
Co-operative Bank Ltd. Mumbai, V/s. Chandrakant Maganlal Shah & Ors., 2002
(Supp.) Bom.C.R.539= 2001 (1) Mh. L.J. 581, has observed that if a case is
made out, the Court can appoint Court
Receiver under Order 40
of the Civil
Procedure Code (for short, CPC) or pass the order of attachment
before judgment as envisaged under Order 38
of the CPC or such other interlocutory stage itself.
The Apex Court in Rajendran & Ors V/s. Shankar Sundaram
& Ors 2008 (2) SCC 724 has observed that prima facie opinion at the
interlocutory stage is sufficient to pass an order, under Order 38 of the CPC.
In similarly situated matter, though the proceedings were not under Arbitration Act, I have passed the order and
appointed the Receiver with a view to complete the project by taking possession
for the time being from the tenants with further directions to provide them all
facilities as agreed by the Developer. That was also a case of temporary
dispossession to complete the project.
In the present case, it is not in dispute that the General Body of the Society which is supreme
has taken a conscious decision to redevelop the suit building. The General Body
of the Society has also resolved to appoint the Respondent No.1 as the Developer. Those
decisions have not been challenged at all. The Appellants, who were members of
the Society at the relevant time, are bound by the said decisions.
The Appellants in the dispute filed before the Co-operative Court have only challenged the
Resolution dated 27/4/2008, which challenge would merely revolve around the
terms and conditions of the Development
Agreement. As a matter of fact, the General
Body of the Society has approved the terms and conditions of the
Development Agreement by overwhelming
majority.
Merely because the terms and conditions of the Development Agreement are
not acceptable to the Appellants,
who are in minuscule minority (only two out of twelve members), cannot be the
basis not to abide by the decision of the overwhelming majority of the General body of the Society. By now it is well
established position that once a person becomes a member of the Co-operative
Society, he loses his individuality with the Society and he has no independent
rights except those given to him by the statute and Byelaws.
The member has to speak through the Society or rather the Society alone
can act and speaks for him qua the rights
and duties of the Society as a body. The member of Society has no
independent right qua the Society and it is the Society that is entitled to
represent as the corporate
aggregate.
The Court also observed that the stream cannot rise higher than the
source. Suffice it to observe that so long as the Resolutions passed by the
General Body of the Respondent
No.2 Society are in force and not overturned by a forum of competent
jurisdiction, the said decisions would bind the Appellants. They cannot take a
stand alone position but are bound by the majority
decision of the General Body.
Notably, the Appellants have not challenged the Resolutions passed by the General Body of the
Society to redevelop the property and more so, to appoint the Respondent No.1 as the Developer to give him
all the redevelopment rights. The property rights of the Appellants herein in
the portion (in respective flats) of the property of the Society cannot defeat
the rights accrued to the Developer and/or absolve the Society of its
obligations in relation to the subject matter of the Arbitration Agreement.
We have no hesitation in taking the view that since the Appellants were
members of the Society and were allotted flats in question in that capacities
at the relevant
time are bound by the decision of the General Body of the Society as
long as the decision of the General Body is in force. As observed earlier, the
Appellants have not challenged the decisions of the General Body of the Society
which is supreme, in so far as redevelopment of the property in question or of
appointment of the Respondent No.1 conferring on him the development rights.
The contesting Defendants/Members are unable to make statement and/or
not ready to provide security in case the suit is dismissed but the project is
halted at this stage at their instance. Therefore, in view of above facts, as
well as, law so referred, the Court
is empowered to pass appropriate order, even at the interlocutory stage
including appointing the Receiver
under Order 38 and Order 40 of the CPC.
In the present case, based upon the majority members, the consent terms as
well as the resolution, the parties have already acted upon and proceeded
further in view of the valid permission and sanction and registered documents
as referred above.
The averments made in the suit as well as in notice of motion, objection
so raised by filing dispute on the allegations
of fraud and misrepresentation now at this stage is again a matter of trial and
details. Those aspects just cannot be gone into at this stage in such fashion merely on the basis of the averments
so raised as noted, the conduct of the parties, therefore, also place important
role while assessing the necessary elements as contemplated under the CPC
before passing any such order.
There is no dispute with regard to the stages/steps taken by the parties
read with the investment already made and the fact that the everybody is
waiting for the project to complete within a
stipulated time and as early as possible so that the members can
take and reoccupy the newly premises and/or they can occupy, as early as
possible, with all the facilities.
The basic consents and the unanimous resolution as passed and duly registered documents as executed, now just
cannot be restored back at the instance of such 4 or 5 Defendants/members. It
is not the case that they will be deprived of their rights and the possession permanently. The whole object and
purpose of this project is always to get the new premises on the same plot
subject to the terms and conditions. Once the premises/ project are completed,
all the members will reoccupy
the same with the facilities. Therefore, this temporary dispossession to
complete the project, in my view, cannot be treated as permanent dispossession
as sought to be contended and basically on the ground of fraud and
misrepresentation as alleged.
Even if, some allegations are taken note of, still that itself cannot be
the reason to halt the project
in such fashion, especially when majority of the members and the society till
today and even otherwise willing to proceed and continue with the project as
already agreed. Therefore, merely disputes have been raised by the some of the Defendants and the same is pending, that
itself is the present facts and circumstances cannot be the reason to overlook
the basic purpose and object of the project to complete.
The Plaintiffs
have filed this suit based upon the agreed and unanimous resolution and
registered documents and specially when both the parties proceeded and acted
accordingly since so many months. The agreement
itself shows that it is not a simple agreement of development. The Plaintiffs
has right in the property also, in view of the agreement itself, subject to the
conditions so agreed.
Such right just cannot be overlooked at the instance of 5 contesting
Defendants. In my view, the Plaintiffs has a right, and basically when it is
supported by the Society
as well as the majority of the members, to file such suit and for such reliefs
as claimed in notice
of motion. The challenge to the right and/or entitlement of the
Plaintiffs to file such suit and/or to take for such motion for the above
reason is unsustainable. There is a legal
right to file such suit for appropriate reliefs, so claimed. The
suit cannot be dismissed and ad-interim relief just cannot be refused, merely
because of objections by 5 members by filing the dispute in the Co-operative Court and raising issue even of
the jurisdiction of this Court, pending the dispute before the cooperative
Court.
Therefore, considering the above judgments including the Supreme Court to pass appropriate order even
at interlocutory stage if the case is made out and in the situation like this
where whole object and purpose to complete the project within the prescribed
period specially when majority of the members have consented and already
vacated the premises and the Plaintiffs
have already invested huge amount as recorded above, and provided all necessary
alternate accommodation
and the facilities and as this dispossession is only for the temporary period
till the construction and/or completion of the project, therefore, it is just
and convenient and it is in the interest of justice and as this Court is empowered to pass such order and the balance
of convenience and equity also lies in favor of the Plaintiffs. Therefore
following order:
However, it is made clear that 8 weeks time is granted to vacate the
premises voluntarily
to these 5 contesting Defendants. No coercive steps should be taken by the
Plaintiffs and/or the receiver till this date. It is also made clear that the
Plaintiffs and the Society, subject to agreement, will provide all the
facilities including payment of rent/ occupation charges as given and provided
to the other members. If these members vacate the premises voluntarily, the Plaintiffs to
provide/ pay them the necessary amount as agreed. If they do not, then Receiver
to take steps in accordance with law and the Plaintiffs to deposit the
requisite amount with the Court Receiver towards the compensation/occupation
charges.
It is made clear that the Plaintiffs
will pay the amount regularly and provide all the facilities as agreed, till
the permanent alternate accommodation is handed
over to these Defendants
in the new building, in question, as agreed.
The Notice of Motion is allowed in
above terms. No costs.
(ANOOP V. MOHTA)
Published
in interest of Public
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