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2022 DIGILAW 2304 (BOM)

Nitin Ambavi Gami v. State of Maharashtra

2022-10-18

M.S.KARNIK

body2022
JUDGMENT M.S.KARNIK, J. - Heard learned counsel for the parties. The issue involved in these writ petitions is common, hence decided by a common judgment. 2. The challenge in this writ petition filed under Article 226 of the Constitution of India is to an order dated September 21, 2022 passed by the Respondent no.3 on an application made under Sec. 95A of the Maharashtra Housing and Area Development Authority Act, 1976 (hereafter "the said Act", for short). The occupants-petitioners of two rooms in respect of a ground floor structure having 8 units are before this Court. The majority of the members agreed for redevelopment and consequently a development agreement dated December 24, 2021 was entered into between the developer and the Society. These two petitioners are the two occupants who are opposing the redevelopment. The redevelopment is under Regulation 33(5) of the DC Regulations. 3. Assailing the impugned order passed by the competent authority i.e. Respondent no.3 under Sec. 95A of the said Act, learned counsel for the petitioners vehemently submitted that the said order does not take into consideration the interest of the members of the Society. Placing reliance on a Circular dated January 3, 2009, it is submitted that in terms of such circular issued by the State of Maharashtra, the development agreement should include the clause as regards the developer giving bank guarantee of 20% price of redevelopment project. Learned counsel submits that such circular is mandatory in nature and the order passed under Sec. 95A is in breach of such a mandatory condition in the circular. It is next submitted that even the circular dated July 4, 2019 which provides for furnishing bank guarantee of 20% price of the project cost of redevelopment is breached. 4. Mr. Kini then relied upon the Government Resolution dated March 5, 2021 which provides that the NOC granted to a project should be cancelled if 10% of the bank guarantee in respect of the price of redevelopment cost is not furnished. Learned counsel submitted that even the circular dated July 4, 2019 is breached as the agreement with the petitioners has not been signed and the draft was given for the first time vide letter dated September 21, 2022 after this writ was filed. Mr. Learned counsel submitted that even the circular dated July 4, 2019 is breached as the agreement with the petitioners has not been signed and the draft was given for the first time vide letter dated September 21, 2022 after this writ was filed. Mr. Kini submitted that the entire action of the Managing Committee in entering into such a development agreement with the developer is malafide and to the detriment of the petitioners. 5. To demonstrate the prejudice caused, Mr. Kini submitted that in respect of adjoining plot no.27 in which redevelopment is in progress, the area offered to all members is 1200 square feet, whereas lesser area is offered to the petitioner viz. 935 square feet. Even so far as corpus is concerned, the corpus provided in respect of adjoining plot no.27 is Rs.25, 00, 000.00 whereas in respect of the present redevelopment, the corpus is Rs.10, 00, 000.00. It is further submitted that rent payable in respect of the adjoining plot is Rs.40, 000.00, whereas the rent payable to the members of the present Society is Rs.30, 000.00 per month which is on a much lesser side. Learned counsel expressed an apprehension that the developer will leave the project midway and petitioners will not be treated on par with other members. It is then submitted that purposely the Society has not enrolled the petitioners as the members of the Society despite the fact that they have validly purchased the said residential units. 6. Mr. Kini, learned counsel relied upon the decision of the Supreme Court in the case of Kamgar Swa Sadan Co-operative Housing Society Ltd. vs. Mr. Vijaykumar Vitthalrao Sarvade and others Civil Appeal No.1222 of 2022 to contend that as per New DCPR 2034 vide circular dtd. 5/3/2021 of Maharashtra Government, a Developer is bound to give Security Deposit/Bank Guarantee of 10% as Rehab Construction cost. A reference is also made to the decision of this Court in the case of Vishwanath Shahaji Awaghade vs. The Chief Officer, MHADA and others Writ Petition (L) No.3328 of 2022. in support of his submission that even this Court had insisted that the bank guarantee be given and the developer therein had complied with the order. 7. Learned counsel for the Respondent on the other hand supported the order passed by the competent authority under Sec. 95A of the said Act. in support of his submission that even this Court had insisted that the bank guarantee be given and the developer therein had complied with the order. 7. Learned counsel for the Respondent on the other hand supported the order passed by the competent authority under Sec. 95A of the said Act. Learned counsel relied upon the decision of this Court in the case of Radhika George and others vs. Maharashtra Housing and Area Development Authority and others 2012(5) Mh.L.J. 229 to point out that the Division Bench of this Court considered the scope of Sec. 95A of the said Act. Learned counsel then relied upon the decision of this Court in the case of Maya Developers vs. Neelam R. Thakkar 2016 SCC OnLine Bom 6947 to submit that the Government Resolutions relied upon by the learned counsel for the petitioner are mere guidelines issued under Sec. 79A of the Maharashtra Cooperative Societies Act, 1960 which are in the nature of a broad policy and not mandatory. It is further submitted that the development agreement itself provides that 7 flats of the area of 500 square feet will be provided for as and by way of security to the Society. It is further submitted that the developer has been issued with a 100% IOD for construction of the building. Learned counsel for the developer assured that the petitioners would be treated on par with the other occupants. It is submitted that a large majority of the occupants have accepted the redevelopment and thereupon the Managing Committee has the development agreement. 8. I have gone through the impugned order. At the outset, it would be pertinent to seek guidance from the decision of this Court in Radhika George and others (supra) regarding the scope of an application made under Sec. 95A of the said Act to appreciate the rival contentions. Paragraph 22 to 25 deals with the scope and object of Sec. 95A of the said Act needs to be reproduced and which read thus :- "22. The object of the legislature by introducing the amendments was to give an opportunity to the occupants of old structures who were unable to develop them for lack of resources to move to better accommodation at the same time create additional housing for general consumption. The object of the legislature by introducing the amendments was to give an opportunity to the occupants of old structures who were unable to develop them for lack of resources to move to better accommodation at the same time create additional housing for general consumption. The State Government revised the FSI and encouraged housing development schemes by MHADA either by itself or by the housing societies. Sec. 95-A was enacted to enable speedy implementation of such redevelopment schemes. The provision is to ensure seamless implementation of the project. When the housing societies decide to get their premises redeveloped, care should be taken that its members should have premises to stay when the original building is demolished and is being reconstructred. The members should not be left in lurch being out of shelter while the redevelopment goes at its own pace. Thus, what the authority needs to examine is whether its a collective decision i.e. whether 70% of members have consented, whether permissions like the NOC are in order and whether the developer has provided adequate transit accommodation. Once the authority under sec. 95-A finds that these requirements are fulfilled, all that it does is to direct the members to shift to the transit accommodation awaiting reconstruction. 23. Action under sec. 95A does not result in determining rights of the parties per se. The authority under sec. 95-A does not finally determine or terminate any ownership rights of the members of such societies. The provision is not intended to provide a forum to adjudicate the dispute inter se between the Society, members and the developers. Those disputes will have to be adjudicated in competent Courts of law. The proceedings under sec. 95-A of the Act, cannot be converted into a full fledged judicial proceedings as if the authority is trying a civil suit. It also needs to be noticed that the authority i.e. executive engineer which passes the order under sec. 95-A is not a judicial officer equipped to decide complicated question of law relating to dispute as to title etc. 24. The proceedings under sec. 95-A cannot be converted into a civil trial as is sought to be done by the petitioners. If the members of the Society obtain any judicial orders restraining the Society or the developer from acting in furtherance of their intention to redevelop, then obviously the authority under sec. 24. The proceedings under sec. 95-A cannot be converted into a civil trial as is sought to be done by the petitioners. If the members of the Society obtain any judicial orders restraining the Society or the developer from acting in furtherance of their intention to redevelop, then obviously the authority under sec. 95-A will be bound by such judicial orders. In the present case, even though the Appellants approached the Civil Court as well as the Co-operative Court in the year 2006 challenging the decisions of the Society to redevelop the property, they did not secure any interim orders for last six years. The Executive Engineer under 95-A thus is not expected to arrogate himself the jurisdiction vested in Civil Court and Co-operative Court and decide the issue raised by the Appellants in those proceedings. Once the jurisdictional facts before the Executive Engineer were satisfied and that there was no restraint order, the authority under sec. 95-A had no other option, rather was under obligation to direct the Appellants to move to transit accommodation to facilitate the redevelopment. 25. The scope of sec. 95 being thus understood, it needs to be emphasized that legislature has not provided any appeal from the order passed under sec. 95-A. The petitioners approached the learned Single Judge invoking Article 226 of the Constitution of India. The scope of the exercise of the writ jurisdiction is now well settled. The Court may decline to exercise writ jurisdiction if it finds that the substantial justice has been done by the order impugned before it. It is not necessary for each and every infraction of law that a writ must issue. The Court is required to keep in mind whether principles of natural justice were followed and whether the authority acted within its jurisdiction, and whether any failure of justice has occasioned. In the appeal, what we are required to examine is whether the exercise of the writ jurisdiction by the learned Single Judge is perverse and whether the action of the authority in requiring the Appellants to move to transit accommodation can be termed as failure of justice. This being the scope of the Writ appeal before us, though the learned counsel for the Appellants has argued numerous points in detail before us, which could be urged only if there was a statutory appeal from sec. This being the scope of the Writ appeal before us, though the learned counsel for the Appellants has argued numerous points in detail before us, which could be urged only if there was a statutory appeal from sec. 95-A we granted full opportunity to the Appellants in order to satisfy ourselves whether any failure of justice has occasioned by the impugned orders." 9. It is then necessary to make a reference to the decision of this Court in Maya Developers (supra). In paragraph 79, His Lordship discussed the nature of the circulars whether mandatory, directory or otherwise issued under Sec. 79A of the said Act. Paragraph 79 and 80 read thus :- "79. This itself makes it clear that, notwithstanding the use of words like 'regulation', what the 2009 Directive seeks to set in place are a set of guidelines. This is also apparent from the fact that the Government chose to issue these under Sec. 79A rather than some other sec. of the Act. What is set out is a broad policy; and this stands to reason, for not every single provision of this Directive lends itself to strict compliance. Clauses 1, 2, 5, 7, 8 and 10 all use the word 'should', not 'must' or 'shall'. Clause 11 in terms says that the Development Agreement 'should' contain some conditions and provisions but these are specifically subject to the terms and conditions approved by the General Body Meeting of the Society. This Directive must be read as a whole, and not in the manner Mr. Pai suggests by plucking out one clause here and another there. Read thus, it is clear that the whole of the 2009 Directive is recommendatory, not obligatory. If it were otherwise, and to be read as Mr. Pai would have me do, it would undermine the authority of the society in general meeting, and the fundamental democratic underpinnings of cooperative societies. When Mr. Pai asks that is it possible that a majority can decide the fate of all, the answer must be an unequivocal yes; that is the basis of the entire edifice of the MCSA, subject to specific statutory exceptions. It is impossible to accept his submission that the 2009 Directive in mandatory. It is, as Mr. Kapadia says, a broad road map, and was brought into existence to provide guidance when there were far too many problems in re-development of societies. It is impossible to accept his submission that the 2009 Directive in mandatory. It is, as Mr. Kapadia says, a broad road map, and was brought into existence to provide guidance when there were far too many problems in re-development of societies. Material compliance is more than sufficient; and it in no way undermines or detracts from the overall authority of the general body of a society's members. It is sufficient if participation, notice and disclosure are ensured. Where majority decisions are consistent with material compliance with the provisions of the Directive, that is surely enough. 80. Further, Mr. Pai submits, relying on the Supreme Court decision in Tata Chemicals Ltd. v Commissioner of Customs, 94 there is no question of subjective satisfaction; the power to be exercised must be exercised in accordance with law or not at all. Therefore, any 'consent' does not regularise an illegal use of power. This argument is, I am afraid, wholly misconceived. There is no question of 'use' of power in any manner. The 2009 Directive confers no power. It only provides guidance." 10. It is pertinent to note that so far as the NOC issued by MHADA for the said project is concerned, the petitioners have already filed writ petitions challenging the NOC which learned counsel submits would be moved for appropriate reliefs before the Division Bench. It is not for me to express any opinion on the NOC which has been issued. 11. Suffice it to observe that, in the light of the law laid down by this Court as regards the scope of Sec. 95A, what has to be considered by the authority under Sec. 95A is whether the decision taken by the Managing Committee is a collective decision i.e. whether 70% of members have consented; whether permissions like the NOC are in order; and whether the developer has provided adequate transit accommodation. Thus, Their Lordships in Radhika George and others (supra) have laid down that once the authority under Sec. 95A finds that these requirements are fulfilled, all that it does is to direct the members to shift to the transit accommodation awaiting reconstruction. Having gone through the order passed by the competent authority under Sec. 95A, I find that all these requirements are fulfilled. 12. Learned counsel for the developer has assured that the petitioners would be treated on par with the other occupants of the project under redevelopment. Having gone through the order passed by the competent authority under Sec. 95A, I find that all these requirements are fulfilled. 12. Learned counsel for the developer has assured that the petitioners would be treated on par with the other occupants of the project under redevelopment. The statement is accepted. It is further submitted that within the radius of 1 k.m. of existing building that is to be redeveloped, the developer would provide for transit accommodation and/or in the alternative is ready to offer rent of Rs.30, 000.00 per month to each of the petitioners. 13. So far as the condition regarding deposit of 20% bank guarantee is concerned, in my opinion, the same has to be held as recommendatory in view of the decision of this Court in Maya Developers (supra) and as in the facts of the present case, in any event an adequate security is provided by the developer. The developer in the development agreement has agreed to provide 7 flats as and by way of security to the Society. The directives/circulars relied upon by the learned counsel for the petitioners only provide for guidelines and a broad road map in respect of which material compliance is more than sufficient; and it in no way undermines or detracts from the overall authority of the general body of a society's members. 14. In the present case, the Society comprises of 8 members. Except for the petitioners who are two in number, all other members have agreed for the redevelopment and supported the Managing Committee resolution. It is the contention of learned counsel for the developer that the petitioners are carrying on commercial activities from their units and therefore opposing the redevelopment. I do not wish to enter into this aspect. 15. So far as the decision relied upon by the learned counsel for the petitioners in the case of Kamgar Swa Sadan Co-operative Housing Society Ltd. (supra) is concerned, the same is in respect of redevelopment under DCR 33(7), whereas present is a case governed by DCR 33(5). Moreover, Their Lordships have not expressly held that providing for such bank guarantee is mandatory. In any case, the decision in Kamgar Swa Sadan Co-operative Housing Society Ltd. (supra) is in a different factual context. 16. Moreover, Their Lordships have not expressly held that providing for such bank guarantee is mandatory. In any case, the decision in Kamgar Swa Sadan Co-operative Housing Society Ltd. (supra) is in a different factual context. 16. As regards the adjacent plots where the occupants have been offered more area, learned counsel for the petitioners submitted that once the Managing Committee and majority of the members of the Society have accepted the redevelopment proposal, at the instance of two of the members, such contention cannot be raised as considerations would vary from Society to Society. I find force in this submission. 17. Learned counsel for the petitioners vehemently urged that the redevelopment is nothing but a malafide action on the part of the Managing Committee depriving the petitioners from their rightful dues and that they are even being deprived of membership rights. In light of what has been observed by Their Lordships in Radhika George and others (supra), the proceedings under Sec. 95A of the said Act cannot be converted into the Civil proceedings as is sought to be done by the petitioners. This contention raised by the learned counsel for the petitioners cannot be examined in proceedings under Sec. 95A of the said Act. It is open for the petitioners to agitate their rights before appropriate forum but not in proceedings under Sec. 95A of the said Act. 18. In this view of the matter, I do not find any merit in the submission of learned counsel for the petitioners. 19. Learned counsel for the petitioners requested for stay of this order and restrain the Respondents from taking any action pursuant to Sec. 95A order for a period of two weeks from today. The request is rejected. 20. Writ Petitions stand dismissed. No costs.