Jasmina Constructions Pvt. Ltd. v. Mandapeshwar Kripa Cooperative Housing Society Limited
2010-03-05
ANOOP V.MOHTA
body2010
DigiLaw.ai
Judgment 1. Leave granted. 2. 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. 3. Defendant No.1 is a Cooperative Housing Society, registered under the provisions of Maharashtra Cooperative Societies Act, 1960 (for short, “the Act”). The Society is the owner of the land situated at Village Mandapeshwar, Tq. Borivali, bearing Survey No. 23, 23A, Admeasuring 5960.46 sq. mtrs. 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. As 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 F.S.I. and by loading of Transferable Development Rights (T.D.R.) 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. 4. 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 Indent to the Plaintiffs on 11/05/2008. The Society also addressed a letter on 29/08/2008, to the Assistant Commissioner, Borivali describing the deteriorating condition of the building. Apart from other members, Defendant Nos. 2 to 7 have also executed irrevocable consent terms on 09/10/2008. 5. Some time in January, 2009, the Final Development Agreement was executed between the Plaintiffs and the Society and also executed deeds of confirmation-cum-declaration.
Apart from other members, Defendant Nos. 2 to 7 have also executed irrevocable consent terms on 09/10/2008. 5. Some time 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 pays 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 lacs only). 6. Defendant Nos. 2 to 6, on 09/11/2009, as demand could not be fulfilled, filed the dispute before the Cooperative 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. 7. TheDeputy 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. 8. 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. 9. The Plaintiffs and Society have executed a deed of Rectification on 05/08/2009. 10. Inall 77, out of 84 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. 11. 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 T.D.R., security deposit, bank guarantee and by depositing cheques towards the rent, brokerage, transportation charges etc. of 77 members. 12.
11. 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 T.D.R., security deposit, bank guarantee and by depositing cheques towards the rent, brokerage, transportation charges etc. of 77 members. 12. 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 favour 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. 13.
of 77 members. 12. 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 favour 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. 13. The Plaintiffs have acted upon the Agreement clauses in the following ways:- “(a) 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; (b) The Plaintiffs obtained NOC from the Public Housing Department and removed the reservation, which was required; (c) The Plaintiffs has paid scrutiny fees for deduction of TDR; (d) The Plaintiffs has obtained CFO concession; (e) The Plaintiffs applied for and obtained copies of the PR Card, DP remarks, conveyance in favour of the Society, copies of the original building plans, etc.; (f) 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 has obtained the IOD; (g) The Plaintiffs has appointed Architects for the redevelopment project; (h) 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; (i) 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; (j) The Plaintiffs has commenced demolition of 2 out of the 5 buildings belonging to the Society, which are to be reconstructed; (k) 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; (l) The Plaintiffs has paid transportation/ shifting charges to members who have vacated their respective flats; (m) 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/; (n) Defendant No.1 has given possession and Plaintiffs has entered upon the property and started demolition; (o) 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.
14. A Division Bench of this Court in Saraswat Cooperative Bank Ltd. Mumbai, Vs. 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. 15. The Apex Court in Rajendran & Ors. Vs. Shankar Sundaram & Ors. 2008 (2) S.C.C. 724 , has observed that prima facie opinion at the interlocutory stage is sufficient to pass an order, under Order 38 of the CPC. 16. 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. A Division Bench of this Court in Appeal No. 338 of 2009 in Arbitration Petition (L) No. 493 of 2009, dated 10th December, 2009, Girish Mulchand Mehta Vs. Mahesh S. Mehta, arising out of the same order, has clarified as under, dealing with the similar aspects of power of Court to pass appropriate order or direction in a situation where a nominal members are objecting / obstructing to complete the project. “16. 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 Cooperative 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.
The Appellants in the dispute filed before the Cooperative 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 Cooperative Society, he looses 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 (See Daman Singh & Ors. V/s. State of Punjab reported in AIR 1985 SC 973 ). This view has been followed in the subsequent decision of the Apex Court in the case of State of U.P. V/s. Chheoki Employees Cooperative Society Ltd. reported in AIR 1997 SC 1413 . In this decision the Apex Court further observed that 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.
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.” “18. 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 capacity 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.” 17. The contesting Defendants/Members 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 to appoint the Receiver under Order 38 and Order 40 of the CPC. 18. The learned counsel appearing for the Defendants has strongly relied upon the Judgment of Single Bench of this Court in Notice of Motion No. 2090 of 2009 in Suit No. 1404 of 2009, dated 5th December, 2009 M/s. Acknur Constructions Pvt. Ltd. Vs. Sweety Rajendra Agarwal & Ors.. In that case the suit was filed by the Builder-Developer against the Co-operative Society/occupants/members. That was not the case of 100% consent given by the occupants at the relevant time. That was also not the case where the person like the Defendants-Members raised dispute before the Cooperative Court after such long time. In that case, there was serious dispute about the title of the land itself, and therefore, observed that the existence of Cooperative Housing Society itself was in doubtful.
That was also not the case where the person like the Defendants-Members raised dispute before the Cooperative Court after such long time. In that case, there was serious dispute about the title of the land itself, and therefore, observed that the existence of Cooperative Housing Society itself was in doubtful. In the present case, there is no such dispute and/or objection of title or ownership of the society, as well as, the concerned majority members. 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. Therefore, the facts and circumstances of the case, so cited are totally distinct and distinguishable, and specially for the reason of above Judgments and provisions of law as explained and elaborated in various Judgments including of the Supreme Court, as referred above. 19. It is relevant to note that the Division Bench Judgment in Appeal No. 338 of 2009, Girish Mulchand Mehta, (Supra) which is final and binding, was not cited before the learned Single Judge in Notice of Motion No.348 of 2009 in Suit No.126 of 2009, dated 08/01/2010, M/s. Jaydeep Constructions Vs. Pant Nagar Rail View Cooperative Housing Society Ltd. Therefore, also the said Judgment is of no assistance for the contesting Defendants-members. 20. It is relevant to note that the Division Bench Judgment Girish Mulchand Mehta, (Supra) is of dated 10th December, 2009, confirming the earlier order as referred above. Now, that judgment, as well as, the reasoning given has attained finality. This judgment, in my view, holds the field on the subject. The judgment relied upon by the contesting Defendants in the matter of M/s. Acknur Constructions Pvt. Ltd. (Supra) is of dated 5th December, 2009. Therefore, there was no occasion for the Learned Judge to deal and/or even to consider the judgment passed by the Division Bench, as referred and quoted above. It is a relevant factor which goes in favour of the Plaintiffs. 21. As noted, it is relevant to consider all the necessary elements as contemplated under Order 38, 39 and 40 of the CPC, while granting and/or passing any order in such situation.
It is a relevant factor which goes in favour of the Plaintiffs. 21. As noted, it is relevant to consider all the necessary elements as contemplated under Order 38, 39 and 40 of the CPC, while granting and/or passing any order in such situation. As noted above, if the case is made out and in a given facts and circumstances, the Court is empowered to pass such ad-interim and/or interlocutory order including mandatory order and/or even the Court can appoint the Receiver as already observed in the Girish Mehta (supra) by the Division Bench of this Court. As noted, even the Supreme Court in Rajendran & Ors. (supra), while dealing with the aspect of Order 38 of the CPC, further clarified that if a case is made out, the Court is empowered to pass such order even at ad-interim stage. In the present case, all these elements are available for passing the order, including appointment of Receiver as prayed. 22. It is relevant to note that the following observations of the Supreme Court in such situation, which in my view also applies to the present facts and circumstances of the case. (Deoraj Vs. State of Maharashtra & Ors. (2004) 4 S.C.C. 697):- “11. The courts and tribunals seized of the proceedings within their jurisdiction take a reasonable time in disposing of the same. This is on account of fair-procedure requirement which involves delay intervening between the previous and the next procedural steps leading towards preparation of case for hearing. Then, the courts are also overburdened and their hands are full. As the conclusion of hearing on merits is likely to take some time, the parties press for interim relief being granted in the interregnum.” “12. Situations emerge where the granting of an interim relief would tantamount to granting the final relief itself. And then there may be converse cases where withholding of an interim relief would tantamount to dismissal of the main petition itself; for, by the time the main matter comes up for hearing there would be nothing left to be allowed as relief to the Petitioner though all the findings may be in his favour.
And then there may be converse cases where withholding of an interim relief would tantamount to dismissal of the main petition itself; for, by the time the main matter comes up for hearing there would be nothing left to be allowed as relief to the Petitioner though all the findings may be in his favour. In such cases the availability of a very strong prima facie case – of a standard much higher than just prima facie case, the considerations of balance of convenience and irreparable injury forcefully tilting the balance of the case totally in favour of the applicant may persuade the court to grant an interim relief though it amounts to granting the final relief itself. Of course, such would be rare and exceptional cases. The court would grant such an interim relief only if satisfied that withholding of it would prick the conscience of the court and do violence to the sense of justice, resulting in injustice being perpetuated throughout the hearing, and at the end the court would not be able to vindicate the cause of justice. Obviously such would be rare cases accompanied by compelling circumstances, where the injury complained of is immediate and pressing and would cause extreme hardship. The conduct of the parties shall also have to be seen and the court may put the parties on such terms as may be prudent.” 23. The above observations are relied in Zenit Mataplast Private Limited Vs. State of Maharashtra & Ors., (2009) 10 S.C.C., 388. Paragraph No. 34 reads thus:- “34. This Court in Manohar Lal Chopra V. Rai Bahadur Rao Raja Seth Hiralal, AIR 1962, S.C. 527, held that the civil court has a power to grant interim injunction in exercise of its inherent jurisdiction even if the case does not fall within the ambit of provisions of Order 39, Code of Civil Procedure.” 24. As noted, there are correspondences (dated 23rd April, 2009 and 19th September 2009) on record to show that the contesting Defendants in fact submitted their proposal to settle the matter. However, that was on some consideration/lump sum amount. The conduct is averred in the affidavit and not in dispute.
As noted, there are correspondences (dated 23rd April, 2009 and 19th September 2009) on record to show that the contesting Defendants in fact submitted their proposal to settle the matter. However, that was on some consideration/lump sum amount. The conduct is averred in the affidavit and not in dispute. This means, the intention was something else rather than challenging the action as agitated by filing the dispute before the Cooperative Court after such long time and in spite of the fact that initially there was no objection for such project to be continued. The resolution of the society read with the necessary compliances made at the relevant time, apart from the vacation of the premises by other consenting members and the action taken by all the parties as referred in paragraph 14 itself, in my view, an additional factor, goes against such Defendants. 25. Admittedly, the Plaintiffs, as well as, Society No.1 and all the consenting members are supporting in all respect. The averments made in the suit, as well as, in notice of motion, objection so raised by filing dispute on the allegations of fraud, 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. 26. 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. 27. 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.
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 is 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. 28. Even if, some allegations are taken note of, still that itself cannot be the reason to halt the project in such fashion, specially 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 in the present facts and circumstances, cannot be the reason to overlook the basic purpose and object of the project to complete. 29. The Plaintiffs has 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. (Chheda Housing Development Corporation Vs. Bibijan Shaikh Farid & Ors. 2007 (3), Mh. L.J. 403) 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 Cooperative Court and raising issue, even of the jurisdiction of this Court, pending the dispute before the co-operative Court. 30.
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 Cooperative Court and raising issue, even of the jurisdiction of this Court, pending the dispute before the co-operative Court. 30. 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 favour of the Plaintiffs. Therefore following order. 31. Resultantly, ad-interim relief in terms of prayer clauses (a) except Flat No. A1/13 and A2/31, and (b) except Defendant Nos. 5 and 7, as Defendant Nos. 5 and 7 have settled the matter. 32 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. 33. 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 vacates 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. 34. 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. 35. The Notice of Motion is allowed in above terms. No costs.