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2024 DIGILAW 1299 (GUJ)

RAJESH CHINUBHAI PATEL v. NIRMALKUNJ COOPERATIVE HOUSING SOCIETY LIMITED

2024-06-19

PRANAV TRIVEDI, SUNITA AGARWAL

body2024
ORDER : 1. The present Letters Patent Appeal is filed against the judgment and order dated 02.05.2024 passed by the learned single Judge allowing a writ petition filed by the Co-operative Housing Society, which has decided for re-development as contemplated under the Gujarat Ownership Flats Act, 1973 (hereinafter referred to as ‘the Act 1973’). While allowing the writ petition, the learned single Judge has directed the private respondents 6 to 9 to vacate their respective flats falling within the jurisdiction of the petitioner Co-operative Society and handover the peaceful and vacant possession thereof for re-development as per the aforesaid provisions within eight weeks from the date of receipt of the order and further to co-operate in the re-development of the petitioner No. -1 society. Out of four respondents against whom the direction has been issued by the learned single Judge, three are before us in the instant appeal. 2. Challenging this order, the learned counsel for the appellant has vehemently submitted that no mandamus can be issued against the private persons, as the private respondents before the writ court-the appellants herein, are not performing any public law functions. No public or statutory duty has been cast upon them and hence, the directions issued by the learned single Judge in the order impugned of summary eviction of non-consenting members of the society, cannot be approved of. It was further argued that in case of any grievance of the society, it ought to have invoked the provisions of Section 96 of the Gujarat Co-operative Societies Act, 1961 to bring the dispute before the Board of Nominees between the society and its members. In any case, the writ petition was not maintainable. It was further submitted that the appellants have serious objections about the resolution of the society in going ahead with the redevelopment, inasmuch as, the requirement of the statutory Rule 20 of the Act, 1973 to furnish the Books of Accounts and other necessary documents to the Members has not been complied with. 3. Reliance is placed on the decisions of the Apex Court in Mani Subrat Jain and Others vs. State of Haryana and Others, (1977) 1 SCC 486 , VST Industrices Ltd. vs. VST Industries Workers’ Union and Another, (2001) 1 SCC 298 and Binny Ltd. and Another vs. V. Sadasivan and Others, (2005) 6 SCC 657 . 3. Reliance is placed on the decisions of the Apex Court in Mani Subrat Jain and Others vs. State of Haryana and Others, (1977) 1 SCC 486 , VST Industrices Ltd. vs. VST Industries Workers’ Union and Another, (2001) 1 SCC 298 and Binny Ltd. and Another vs. V. Sadasivan and Others, (2005) 6 SCC 657 . It was further argued that the learned single judge has erred in relying on the decision of the Division Bench of this Court dated 23.01.2023 in Sarojben Kiritbhai Shah Since Deceased through Heirs vs. Ahmedabad Municipal Corporation in Letters Patent Appeal No. 1075 of 2022 to form an opinion that the society has complied with the conditions for the redevelopment and consequentially directing for eviction/dispossession of the appellants, inasmuch as, the issue raised by the appellants about the maintainability of the writ petition, has not been decided. Placing reliance on the Apex Court decision in Municipal Corporation of Delhi vs. Gurnam Kaur, (1989) 1 SCC 101 , it was submitted that the judgment of this court in the aforesaid LPA, is sub silencio and cannot be treated as a precedent. 4. Taking note of the above submissions of the learned counsel for the appellants, we may record that the learned single Judge has noted that 18 apartments in three blocks (having six flats each) on the petitioner society’s land were constructed in an around the year 1959, i.e. more than 62 years back, and were allotted to the members of the society. The construction of the apartment being very old, structures are in a highly dilapidated state and has become dangerous to the public life. They were damaged in earthquake of 2001 and repaired by the members with the help of earthquake relief fund established by the Government of Gujarat. Because of the ruinous condition of the structure, notices have been given by the AMC under Section 264 of the Gujarat Municipal Corporation, Act, 1949 asking the petitioner society to repair the structure. As repairing and restructuring of these structures was not feasible and if started, involved reconstruction right from the foundation, hence, would not be possible to undertake. The report of the Structural engineer dated 1.3.2019 has also been perused by the learned single Judge alongwith the material brought on record to indicate that the buildings are in ruinous state. As repairing and restructuring of these structures was not feasible and if started, involved reconstruction right from the foundation, hence, would not be possible to undertake. The report of the Structural engineer dated 1.3.2019 has also been perused by the learned single Judge alongwith the material brought on record to indicate that the buildings are in ruinous state. It is noted that the society had started the process of various aspects of the redevelopment in the year 2019. Total 14 out of 18 members of the society, forming 77.77% of the total population, have consented to the redevelopment. A Memorandum of Understanding came be entered by 14 out of 18 members with the developer namely the respondent No. 5 before the writ court. On 11.10.2021, only four members - the impleaded respondents Nos. 6 to 9 had refused to sign the MOU and hence, the society was constrained to approach this Court for the reliefs seeking writ of mandamus to complete the process of redevelopment. 5. On the plea of the respondents about the maintainability of the writ petition and the remedy available to the society under the Societies Registration Act, the learned single Judge has referred to the decisions of this Court including the judgment and order dated 23.01.2023 in LPA No. 1075 of 2022 to held that the issue is no longer res-integra and held that the prayers made in the writ petition by the society to be maintainable. 6. The learned single Judge further taken note that the petitioner society had followed due process of law in a transparent manner and hence, majority of the members have consented for the redevelopment as per the settled position of law. The process of redevelopment cannot be stalled for a few non-consenting members, who are in minority. It is further noted that the decision taken by the society for redevelopment is in large public interest and for the benefits of the flat owners/house holders and proper right of the occupier would not be affected, rather several occupier will get new units against their occupation. The decision for redevelopment has been taken in good faith and cannot be stalled at the instance of four members, who objected to the redevelopment for their personal grievance. The decision for redevelopment has been taken in good faith and cannot be stalled at the instance of four members, who objected to the redevelopment for their personal grievance. It is further noted that as per the statutory conditions for redevelopment, the development agreement shall contain all the conditions, which have been incorporated in Clause (i) to (x) of the development agreement-in-question. The procedure prescribed in Rule 19 to 25 of the Rules framed under Clause (e) of sub-section(2) of Section 44 read with section 41A of the Gujarat Owners Flats Act, 1973 notified by the notification dated 15.01.2019, namely the Redevelopment Rules, have been followed by the society. The conclusion was that the condition of redevelopment as followed by the society, was in strict compliance with the Gujarat Ownership Flats Rules, 1974. It is further noted that the eviction or dispossession of the private respondents is not in terms of the prevalent rent laws or eviction as contemplated under the Transfer of Properties Act. In fact the private respondents would not be dispossessed or evicted, but they are required to shift to the alternative premises, wherein they would continue to reside till the redevelopment is undertaken. In any case, the temporary shift for the purpose of redevelopment, will not amount of dispossession or eviction. 7. Considering the reasonings given by the learned single Judge to deal with the submissions of the learned counsel for the appellants about the plea of writ of mandamus having been issued against the private respondents, it would be apt to go through the provisions of the Gujarat Co-operative Societies Act, 1961, which prescribe the rights and liability of the members of the society. There is no dispute about the fact that the society, namely the original petitioner, is a co-operative society registered under the provisions of the Gujarat Co-operative Societies Act, 1961 having registration No. B/2369 of 1959 and has total 18 members. The three appellants herein are the members of the housing co-operative society, which filed a writ petition seeking writ of mandamus commanding the private respondents to vacate the flats possessed by them in a dilapidated building, for the purpose of redevelopment of the buildings owned by the society. 8. The three appellants herein are the members of the housing co-operative society, which filed a writ petition seeking writ of mandamus commanding the private respondents to vacate the flats possessed by them in a dilapidated building, for the purpose of redevelopment of the buildings owned by the society. 8. As per the definition of ‘member’ as contained in Section 2(13), a member means a person joining in an application for the registration of a co-operative society which is subsequently registered, or a person, duly admitted to the membership of a society after registration, and includes a nominal, associate or sympathizer member. Reading of Section 4 of the Act, 1961 indicates that a society, which has as its object the promotion of the economic interests or general welfare of its members or of the public, in accordance with the co-operative principles, or as society established with the object of facilitating the operations of any such society, may be registered under the Act. Chapter III aligns the provisions as to who may become the members and rights and liabilities of the members of the society. Section 30(2) provides that a member shall not transfer any share held by him or his interest in the capital or property of any society, or any part thereof unless the conditions in Clauses (a) to (c) are fulfilled. Section 33 confers right of a member to inspect, free of cost, at the society’s office during office hours or any time fixed for the purpose by the society, a copy of the Act, Rules, Bye-laws, Balancesheet, Profit and Loss Account etc.. Section 36 provides for ‘expulsion of members’. Section 39 states that every society has to keep a register of its members and shall enter into it the particulars prescribed therein. A registered society comprised of its members is governed by the Co-operative Societies Act, 1961, the rules and the byelaws of the society. Each and every member of the society is bound by the bye-laws of the society registered with the Registrar. With the formation of the society for the benefits of its members, each and every member of the society losses its individual freedom and have to obey the bye-laws of the society, which governs its affairs. 9. Each and every member of the society is bound by the bye-laws of the society registered with the Registrar. With the formation of the society for the benefits of its members, each and every member of the society losses its individual freedom and have to obey the bye-laws of the society, which governs its affairs. 9. The Gujarat Ownership Flats Act, 1973 has been framed to regulate promotion of the construction of, and the sale, management and transfer of flats on ownership basis and to provide for the ownership of an individual apartment and to make such apartment heritable and transferable. Section 20 of the Act, 1973 provides that each apartment owner shall be entitled to the exclusive ownership and possession of the apartment. Section 21 further provides for the entitlement of each apartment owner to an undivided interest in the common areas and facilities. Sub-Section(2) of Section 20 provides that each apartment owner to execute a Declaration that he submits his apartment to the provisions of Part II of the Act, 1973 and the Deed of Apartment in relation to his apartment is to be executed in the manner prescribed for the purpose. Section 21 provides for entitlement of each apartment owner to an undivided interest in the common area and facilities in the percentage expressed in the Declaration and sub-section (3) provides that the common areas and facilities shall remain undivided, and no apartment owner or any person can bring any action for partition or division of any part and any covenant to the contrary shall be null and void. Sections 22 and 23 of the Act, 1973 further reads as under: “22. Compliance with covenants, bye-laws and administrative provisions - Each apartment owner shall comply strictly with the bye-laws and with the administrative rules and regulations adopted pursuant thereto, as either of the same may be lawfully amended from time to time, and with the covenants, conditions an restrictions set forth in the Declaration or in the Deed of Apartment in respect of his apartment. Failure to comply with any of the same shall be a ground for an action to recover sums due, for damages or injunctive relief or both maintainable by the manager or Board of managers on behalf of the association of apartment owners or, in a proper case, by an aggrieved apartment owner.” “23. Failure to comply with any of the same shall be a ground for an action to recover sums due, for damages or injunctive relief or both maintainable by the manager or Board of managers on behalf of the association of apartment owners or, in a proper case, by an aggrieved apartment owner.” “23. Certain work prohibited: No apartment owner shall do any work which is likely to jeopardise the soundness or safety of the property, reduce the value thereof or impair any easement or hereditament nor shall any apartment owner add any material structure or excavate any additional basement or cellar without in every such case the unanimous consent of all the other apartment owners being first obtained.” 10. A careful reading of the aforesaid provisions indicate that every apartment owner has to comply strictly with the bye-laws and with the administrative rules and regulations attached thereto, the conditions and restrictions set forth in the Declaration and the deed of apartment in respect of his apartment. The result is that an apartment owner, who is a member of housing co-operative society occupying the apartment/building in the premises owned by the society, is bound by the bye-laws and the rules of the society framed from time to time, in furtherance of the welfare of its members. No member can claim individual right to stall the decision of the society taken by the majority of its members. Moreover, the decision for the redevelopment has been taken in the general meeting of the society, wherein the original petitioners were required to participate to put their point of view or raise objection, in case of any reservation about the re-development plan. 11. Moreso, Section 41A of the Gujarat Ownership Flats Act, 1973 enables the redevelopment of a building and reads that: “41A. Re-development of flats and apartment - Notwithstanding anything contained in this Act, any work in relation to the redevelopment of a building can be carried out on such terms and conditions as may be prescribed, after obtaining the consent of not less than 75 per cent. of the flats owners of such building: Provided that, in respect of such building: (i) a period of twenty-five years must have been completed, from the date of issuance of permission for development by the concerned Authority. of the flats owners of such building: Provided that, in respect of such building: (i) a period of twenty-five years must have been completed, from the date of issuance of permission for development by the concerned Authority. (ii) the concerned Authority has declared that such building is in ruinous condition, or likely to fall, or in any way dangerous to any person occupying, resorting to or passing by such structure or any other structure or place in the neighbourhood thereof. Explanation - For the purpose of this section, the expression “redevelopment” shall be the meaning as assigned to it in relevant Development Control Regulations.” 12. The statutory requirement in relation to the re-development of a building, requires fulfillment of the conditions prescribed in Section 41A, which are: (i) After obtaining consent of minimum 75% of the flat owners of such building. (ii) The building has completed 25 years from the date of issuance of permission for development by the competent authority. (iii) Or in a case where the concerned authority has declared the building in a ruinous condition or dangerous to any person occupying, resorting to or passing by such structures. 13. It is not the case of the appellants that the statutory requirements for the redevelopment of the society as per Section 41A has not been fulfilled. As regards the procedure prescribed under the Gujarat Ownership Flat Rules, 1973, with regard to undertaking the redevelopment of the building as per Section 41A, the Managing Committee or the Body shall have to convene a special general meeting of the society or an association, to take policy decision of redevelopment of the building, either suo motu or on an application received from 1/4th members of the flats or the apartments. The project report of the architect/project management consultant appointed by the Managing Committee as per the special general meeting decision, shall have to be submitted to the managing committee, which shall contain necessary details prescribed in Rule 20. The Secretary of the Managing Committee after receiving the offers from the contractors, builders or company or developer, shall prepare a list of offers received and display the same on the notice board of the office of the building for knowledge and information to the members. The Managing Committee shall have to select one of the developers for redevelopment after careful consideration of the offers received by each contractor/builder or developer. The Managing Committee shall have to select one of the developers for redevelopment after careful consideration of the offers received by each contractor/builder or developer. The development agreement shall have to be entered into with the developer in consultation with the architect/project management consultant, incorporating the terms and conditions, as approved by the Special General Meeting, which shall contain the details as under: “(i) the period of completing re-development project of the building. (ii) a bank guarantee, if any, for amount equal to such sum as may be agreed to by the parties. (iii) free alternative accommodation to the members till the redeveloped flat is handed over to the member, or cash in lieu of existing premises or any combination. (iv) registration of development agreement under the Registration Act, 1908. (v) conditions for admission of new members in the building. (vi) right of the Developer to sell and/or transfer and dispose of the remaining flats forming part of the re-development project. (vii) carpet area to be allotted to each member. (viii) the procedure for allotment of flats to the existing and new member. (ix) the procedure of termination of development agreement for, default or breach of any of the conditions of agreement. (x) other terms and conditions such as amenities to be provided by the Developer, corpus fund, if any, shifting charges, common infrastructure development work, penalty clause for delay in completion of the project, obtaining required approvals for redevelopment project, re-development work as per the Development Control Regulations of the concerned authorities and other matters as per the agreement by the parties.” 14. Rule 24 prohibits developer from making any change in building plan except with the written permission of the Managing Committee. After the redevelopment work is completed and the completion certificate as well as building use permission certificate is obtained, the Managing Committee shall allot the flats to the existing members as per the list annexed to the development agreement. 15. Taking note of the Statutory requirement, we may record that the grounds taken by the appellants to challenge the order passed by the learned single Judge are that the learned single Judge has ignored the fact that the MOU dated 11.10.2021 does not spell out terms agreed between the majority members of the society and the builder and the terms and conditions for the redevelopment are not clearly prescribed. Signature of 10 members were obtained by coercion. The report of the Structural Engineer was purely based on visual structural inspection to record a belief that the building is in dilapidated condition. The dispute with respect to the ownership of certain flats, which have directing bearing on the percentage of the members willing to go for redevelopment, has been ignored. There are allegations that the respondent No. 5/developer had colluded with the office bearers of the society for illegal financial gain against the welfare of the members of the society and necessary procedure for redevelopment had not been followed. There is no declaration of the competent authority, i.e. the AMC that the building is in ruinous condition. All these grounds are taken to assail the order passed by the learned single Judge to permit the society to go for redevelopment by asking the appellants to vacate the flats occupied by them in a dilapidated building. 16. Pertinent is to note that the appellants have succeeded in stalling the process by refusing to sign the MOU. The action brought to assail the decision of the society to go for redevelopment is premature, inasmuch, as no development agreement has so far been signed. As noted hereinabove, the terms and conditions to be incorporated in the development agreement are to be approved in the special general body meeting by the society as per Rule 23 in consultation with architect/project management consultant. The conditions to be incorporated in the development agreement have been aligned in Clauses (i) to (x) in Rule 23. The challenge raised by the appellants to the process undertaken by the society for redevelopment of the building under the Act, 1973, therefore, is un-sustainable. 17. For the above discussion, we do not find any error in the conclusion drawn by the learned single Judge that the private respondent Nos. 6 to 9 (three appellants herein) being the members of the society lost their individual right to challenge the decision of the society, taken by the majority of its members. There is no error in the decision that the appellants are neither being affected nor dispossessed from the flats occupied by them, rather it is a temporary arrangement for shifting to an alternative premises, wherein the appellants would be able to reside till the redevelopment is undertaken. There is no error in the decision that the appellants are neither being affected nor dispossessed from the flats occupied by them, rather it is a temporary arrangement for shifting to an alternative premises, wherein the appellants would be able to reside till the redevelopment is undertaken. It was rightly concluded by the learned single Judge that the petitioner society has met with and complied with the provisions enumerated in Section 41A of the Act, 1973. Once it was decided to go for the redevelopment, We as a Court of appeal, did not find it a fit case to invoke our extraordinary supervisory jurisdiction to interfere in the order of the learned single Judge, consequently in the redevelopment process initiated by the society. 18. The decisions relied upon by the learned counsel for the appellants in support of the challenge to the impugned order of the learned single Judge, are of no benefit in the facts and circumstances of the present case. 19. For the aforesaid, the appeal is found to be devoid of merits. Hence, it is dismissed. With the dismissal of the Letters Patent Appeal, no orders are required to be passed in the Civil Application. It stands disposed of, accordingly.