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2024 DIGILAW 150 (BOM)

Munna R. Puthalappa v. Ramesh Harilal Mehta

2024-01-16

ARIF S.DOCTOR, DEVENDRA KUMAR UPADHYAYA

body2024
JUDGMENT : The challenge in the present Appeal is limited to only certain directions contained in the Order dated 22nd December 2023 passed by the Learned Judge while disposing off the captioned Suit pursuant to Consent Terms entered into between the Appellant (the Plaintiff in the Suit) and Respondent Nos.1 and 2 (Defendants in the Suit). The directions by which the Appellant is aggrieved came to be passed at the instance of Respondent No.3 - Society who is admittedly not a party to the captioned Suit. 2. Before adverting to the rival contentions, it is useful to set out the facts, leading to the Impugned Order, which lie within a very narrow compass and are as follows: - i. The Appellant, being the owner of a certain plot of land had entered into an Agreement dated 18th March 2005 with Respondent Nos.1 and 2 (being Developers) inter alia for development/redevelopment of the said plot of land. Under the said Agreement, on completion of the development/redevelopment the Appellant was to get two flats and eight shops in the building constructed on the said plot. It appears that thereafter the redevelopment was completed, and a building called 'Paras the Golden Touch' was constructed on the said plot. It is not in dispute that subsequently Respondent No.3 - Society was formed under the provisions of the Maharashtra Co-operative Societies Act, 1960 as a Co-operative housing society. ii. It appears that thereafter disputes and differences arose between the Appellant and Respondent Nos.1 and 2 qua the Appellant's entitlement under the said Agreement. It was thus that the Appellant filed the captioned Suit inter alia for specific performance of the said Agreement claiming to be entitled to two flats and eight shops and basement thereunder. Thereafter, the Court Receiver came to be appointed in respect of two flats, eight shops and basements vide order dated 6th October 2009. iii. During the course of the Suit, Respondent No.3 - Society filed a Chamber Summons (being Chamber Summons No.998 of 2017), seeking to be impleaded as a Party Defendant to the Suit since it was the contention of Respondent No.3-Society that there were large outstandings of maintenance and other dues in respect of the said two flats, eight shops and basements which were claimed by the Appellant. It appears that thereafter the Court Receiver filed a report seeking various directions from this Court including as to whether the Court Receiver should pay the dues of Respondent No.3 from the amounts that were lying deposited with the Court Receiver. It is not in dispute that thereafter Respondent No.3 withdrew the Chamber Summons and was granted liberty by an order dated 5th December 2019 to be heard by the Court Receiver in addition to the Appellant and Respondent Nos.1 and 2 qua the issue of maintenance charges due to Respondent No.3-Society in respect of the said flats and shops. iv. The Appellant and Respondent Nos.1 and 2 thereafter entered into consent terms dated 21st December 2023 by which all disputes and differences between them in the Suit were resolved. The Consent Terms, inter alia provided as follows, viz. "4.5 Plaintiff and Defendants hereby agree, confirm and declare that they have mutually agreed that society maintenance charges till 31st December, 2023 in respect of Shop No.1 to 8 would be payable by the Plaintiff and society maintenance charges in respect of Flat No. A-203 and A-204 would be payable by the Defendants. Plaintiff and Defendants have also agreed that approximately an amount of Rs. 73, 00, 000/- (Rupees Seventy-Three Lakhs Only) is lying with the Court Receiver - Bombay High Court in the Suit account and the same be first utilised towards the payment of Court Receiver Fees/charges and balance amount would be utilised towards payment of society maintenance charges." "4.10 Plaintiff and Defendants agree and undertake to this Hon'ble Court that the bills issued by the "Paras the Golden Touch Co-Op. Hsg. Soc. Ltd." in the name of "A & M Combines" requires checking and reconciliation and they will extend their full co-operation and assistance to each other in arranging and attending the meetings with the society, verification and checking of the maintenance bills with and to arrive at a final amount payable to the society as per the provisions of Maharashtra Co-op. Societies Act, 1960 and rules made thereunder. 4.11 Plaintiff and Defendants agree that only after verification and reconciliation of the society bills and accounts, the amount lying with the Court Receiver, Bombay High Court be utilised for the payment of society maintenance charges. However, the parties have agreed that pending verification and reconciliation, the Court Receiver, Bombay High Court can pay an on-account sum of Rs. 4.11 Plaintiff and Defendants agree that only after verification and reconciliation of the society bills and accounts, the amount lying with the Court Receiver, Bombay High Court be utilised for the payment of society maintenance charges. However, the parties have agreed that pending verification and reconciliation, the Court Receiver, Bombay High Court can pay an on-account sum of Rs. 40, 00, 000/- (Rupees Forty Lakhs Only) to "Paras the Golden Touch Co-Op. Hsg. Soc. Ltd." out of the balance money lying in Suit account, after deducting cost/charges/expenses payable to Court Receiver, Bombay High Court. 4.12 Plaintiff and Defendants are aware that as per the order of the Hon'ble Court the Plaintiff is liable to pay Royalty to the Court Receiver, Bombay High Court and as per the statement of account provided by the Court Receiver, Bombay High Court approximately a sum of Rs. 1, 59, 00, 500/- is payable towards Royalty (including penalty). In lieu of the present settlement, the Defendants hereby give their absolute and unconditional consent for waiver/forfeiture of the said Royalty amount payable by the Plaintiff to the Court Receiver, Bombay High Court and hereby agree and confirm that they have No Objection of any nature whatsoever for such relief. 4.13 Plaintiff and Defendants hereby agree, declare and confirm and undertake to this Hon'ble Court that they will address all required communications, sign all necessary forms/undertakings/affidavits to "Paras the Golden Touch Co-Op. Hsg. Soc. Ltd.", for admitting Plaintiff and Defendants as the member of the society and issue Share Certificates of the society in the name of Plaintiff and Defendants. 4.14 It is agreed between the parties that the Court Receiver, Bombay High Court stands discharged without passing of accounts and subject to cost, charges, expenses to be adjusted from the Suit account. Soc. Ltd.", for admitting Plaintiff and Defendants as the member of the society and issue Share Certificates of the society in the name of Plaintiff and Defendants. 4.14 It is agreed between the parties that the Court Receiver, Bombay High Court stands discharged without passing of accounts and subject to cost, charges, expenses to be adjusted from the Suit account. As agreed herein, the Court Receiver has to handover the possession of the suit properties within 10 (Ten) days of filing of these Consent Terms, the details of which are as follows; Property To whom to handover Remarks Flat No.A-203 and A-204 Plaintiff, Munna R.Purthalppa Presently in possession of Defendants as agent of Court Receiver Shop No.1 to 6 with Basement Plaintiff, Munna R.Purthalppa Presently in possession of Court Receiver, Bombay High Court Shop No.7 Defendants' representative, Prakash Chandrakant Sheth Presently in possession of Court Receiver, Bombay High Court Shop No.8 Defendants' representative, Avinash Bhogilal Parekh Presently in possession of Court Receiver, Bombay High Court 4.15 It is agreed between the parties that Plaintiff is hereby authorised to settle the final accounts with Court Receiver, Bombay High Court and Defendants shall extend their full co-operation for the same." However, while taking the Consent Terms on record and disposing of the Suit, the Learned Judge inter alia ordered and directed as follows, viz. "23. Both Plaintiff and Defendants are directed to ensure that from 01.01.2024, all society maintenance charges shall be paid by the respective parties in respect of their holdings without delay and without depending upon any directions contained in this order or the Consent Terms arrived at between the parties on a month to month and regular basis. In so far as the balance maintenance charges towards principal amount of outstanding maintenance charges is concerned (Rs. 75, 92, 237/- - Rs. 73, 43, 000/- = Rs. 2, 49, 237/- plus maintenance for the period for July 2023 to December 2023), Plaintiff is directed to clear the same within a period of four months form the date of uploading of this order. It is also directed that Plaintiff shall approach the society and the society is directed to handover the detailed computation and calculation of the interest amount to the Plaintiff and as agreed upon by Mr. It is also directed that Plaintiff shall approach the society and the society is directed to handover the detailed computation and calculation of the interest amount to the Plaintiff and as agreed upon by Mr. Anja during the course of oral submissions made before this Court, the society shall compute interest @ 9% per annum simple interest instead of 21% per annum as computed in the outstanding arrears statement and the Plaintiff is directed to pay the said amount of interest @ 9% per annum on the entire outstanding amount as computed and calculated within a period of six months from the date of uploading of this order. Needless to state that payment of the outstanding maintenance charges upto 31.12.2023 shall be paid by the Plaintiff within a period of three months from today. The amount of outstanding interest on the outstanding principal amount due and payable shall be paid by the Plaintiff within a period of six months from the date of uploading of this order. It is clarified that only after the above payments are fully made to the society by the Plaintiff, the society shall issue the share certificates to the Plaintiff and Defendant Nos. 1 and 2. Both payments as above shall be independent of the maintenance charges which shall be paid by the Plaintiff in respect of the two residential flats and six shops and by the Defendants in respect of two remaining shops on a month to month and regular basis from 01.01.2024 to the Society. Plaintiff and Defendants are directed to file their respective undertaking with respect to the above directions given by this Court on affidavit within a period of two weeks from the date of uploading of this order. Only if the Plaintiff and Defendants file the undertaking, the Society shall engage the Plaintiff and Defendants in any talks, inter alia, pertaining to payment of the outstanding maintenance amount and / or interest. 24. In view of the above directions, the Consent Terms are taken on record and order is passed in terms of the Consent Terms. 25. Only if the undertakings are filed as directed above, the decree in the Suit be drawn up in terms of the Consent Terms, and as modified by the above order. Court Receiver stands discharged. 24. In view of the above directions, the Consent Terms are taken on record and order is passed in terms of the Consent Terms. 25. Only if the undertakings are filed as directed above, the decree in the Suit be drawn up in terms of the Consent Terms, and as modified by the above order. Court Receiver stands discharged. The eight shops shall be handed over to the society and only after the entire outstanding payment of arrears is made, society shall handover possession of the shops to the Plaintiff and Defendants." v. The Appellant being aggrieved by the fact (a) that the shops, which were to be handed over to the Appellant, Respondent Nos.1 & 2 under the Consent Terms, were directed to be handed over to Respondent No.3 (b) that despite there being serious disputes, in respect of the amounts claimed as maintenance, the entire amount was to be paid over to Respondent No.3 and (c) that the Appellant was required to file an undertaking to the effect that the maintenance charges would be paid, the Suit would be decreed as prayed for in the Consent Terms. It is thus that the Appellant has filed the present Appeal. 3. Mr. Vipul Shah, Learned Counsel appearing on behalf of the Appellant at the outset submitted that the Learned Judge could not have unilaterally varied the Consent Terms which were arrived at between the Appellant and Respondent Nos.1 and 2 and that too at the instance of a third party passed directions against the Appellant, without so much as affording the Appellant to be heard on the same. 4. He then pointed out that the effect of the Impugned Order was not only to effectively grant a decree in favour of a third party but also to handover possession to a third party of the shops which under the consent terms were to be handed over to the Appellant, Respondent Nos.1 & 2. Mr. Vipul Shah took pains to point out that Respondent No.3 - Society was not even a party to the Suit nor had Respondent No.3 - Society instituted any Suit and/or proceeding for recovery of the alleged dues from the Appellant. 5. Mr. Vipul Shah took pains to point out that Respondent No.3 - Society was not even a party to the Suit nor had Respondent No.3 - Society instituted any Suit and/or proceeding for recovery of the alleged dues from the Appellant. 5. He then pointed out that the claim made by Respondent No.3 was strongly disputed by the Appellant and it was thus that Respondent No.3 was permitted to file an Affidavit before the Court Receiver setting out the claims of the Society and that both the Appellant and Respondent Nos.1 and 2 were permitted to file an Affidavit to oppose the Claim of Respondent No.3 - Society. To illustrate that the claims were inter alia inflated and untenable, he invited our attention to the Order dated 13th June 2018 and pointed out that the same clearly directed the Court Receiver to inter alia ascertain the balance maintenance charges payable in respect of all the premises in possession of the Court Receiver and that no further interest was to be charged by Respondent No.3 on the maintenance amounts stated to be due to Respondent No. 3. He submitted that despite this, Respondent No.3 had computed and levied further interest on the said amount as was evident from the Affidavit filed by Respondent No.3. He thus submitted that the claim of Respondent No.3 was not only entirely untenable but also plainly contrary to the orders of the Court. 6. Mr. Vipul Shah thus submitted that the Impugned Order was entirely unsustainable since Respondent No.3 had without taking recourse to any legal proceeding effectively obtained not only a money decree but also possession of the shops to which the Appellant, Respondent Nos.1 & 2 were entitled to under the consent terms. He submitted that all of this was done in a proceeding where Respondent No.3 was not even a party and without so much affording the Appellant an opportunity to contest the claim of Respondent No.3. Basis this he submitted that the Learned Judge had completely erred in law in passing the Impugned Order. 7. Per contra, Mr. Piyush Shah, Learned Counsel appearing on behalf of Respondent No.3 submitted that the Impugned Order was perfectly sustainable. He pointed out that on account of the disputes and differences between the Appellant and Respondent Nos.1 and 2, it was Respondent No.3 who had suffered gravely. 7. Per contra, Mr. Piyush Shah, Learned Counsel appearing on behalf of Respondent No.3 submitted that the Impugned Order was perfectly sustainable. He pointed out that on account of the disputes and differences between the Appellant and Respondent Nos.1 and 2, it was Respondent No.3 who had suffered gravely. He pointed out that Respondent No.3 had not received any maintenance or other charges in respect of the said flats and shops since the year 2009. He submitted that Respondent No.3 and its members were put to grave hardship on account thereof. He pointed out that the Municipal Corporation had infact once served an attachment notice and levied a heavy penalty for payment of deficient property tax, which was due solely on account of the amounts outstanding from two flats and eight shops. He submitted that these amounts were infact paid by the members of Respondent No.3. Mr. Piyush Shah submitted it was thus that Respondent No.3 had approached this Court and had vide the order dated 5th December 2019 been permitted to file an Affidavit before the Court Receiver setting out the amounts due as maintenance and other charges qua the said flats and shops. He submitted that Respondent No.3 had infact done so and were thus entitled to the amounts stated therein. 8. Mr. Piyush Shah then placed reliance upon the Consent Terms and stated that as per Clause 4.11 thereof, the parties had agreed that an amount of Rs. 40, 00, 000/-, which was lying deposited with the Court Receiver, was to be paid to Respondent No.3. He submitted that the amount due to Respondent No.3 as set out in the Affidavit was Rs. 1, 56, 58, 101/- and thus given that the parties had in the Consent Terms agreed to pay the maintenance and other charges to Respondent No.3, the order was perfectly justified since the same only ensured that Respondent No.3 would be paid its outstanding dues. 9. After having heard Learned Counsel and considering their rival contentions we find merit in the submissions made by Learned Counsel for the Appellant. 9. After having heard Learned Counsel and considering their rival contentions we find merit in the submissions made by Learned Counsel for the Appellant. We find that the Impugned Order to the extent that the same (a) directs the Court Receiver to handover possession of the said shops to Respondent No.3 (b) directs payments as set out in Paragraph 23 of the Impugned Order to Respondent No.3 and (c) directs the Appellant to file an undertaking as set out in Paragraph 23 of the Impugned Order, is entirely unsustainable for the following reasons, viz. A. First, what was before the Learned Judge were Consent Terms entered into between the Appellant and Respondent Nos.1 and 2 i.e., the only parties to the Suit. The Learned Judge therefore ought to have after examining the Consent Terms, either accepted them if they were in order or rejected them if they were not. It was not open to the Learned Judge to, on the one hand, accept the Consent Terms and then unilaterally completely modify them and then proceed to dispose of the Suit on that basis. B. Second, what is even more surprising is that the Learned Judge has proceeded to do so at the instance of a third party to the Suit. Infact, as the record bears out, Respondent No.3 did not even oppose the Consent Terms, but infact only sought for payment of the claims made by it for maintenance charges etc. The Learned Judge has also ignored/overlooked the previous orders passed in the Suit which required that the claims of Respondent No.3 filed before the Court Receiver and the Appellant and Respondent Nos.1 and 2 were granted an opportunity to contest the same. Despite the fact that the claim made by Respondent No.3 had admittedly not been verified, the Appellant has been directed to pay the same but also pay any future maintenance charges as may be raised by Respondent No.3 for the premises which would be handed over to the Appellant under the Consent Terms as also to give an undertaking to that effect. C. Third, we must note that Respondent No.3 has admittedly not taken any steps for recovery of maintenance charges as per the provisions of the Maharashtra Co-operative Societies Act, 1960 despite the fact that as per the contention of Respondent No.3 the outstandings have not been paid since 2009. C. Third, we must note that Respondent No.3 has admittedly not taken any steps for recovery of maintenance charges as per the provisions of the Maharashtra Co-operative Societies Act, 1960 despite the fact that as per the contention of Respondent No.3 the outstandings have not been paid since 2009. Additionally, the amounts claimed have been seriously disputed by the Appellant, despite all this, the Learned Judge has not only directed payment of the maintenance amount as claimed by Respondent No.3 but has also permitted interest and directed (i) the Appellant to give an undertaking that such amount would be paid (ii) directed that the shops which were to go to the Appellant & Respondent Nos.1 and 2 under the Consent Terms be handed over to Respondent No.3 until the entire outstanding amount of maintenance was paid and (iii) directed that future amounts due towards maintenance would also be paid. We fail to understand how such directions could ever be passed in the present Suit absent consent of the parties. D. Fourth, we find that the Learned Judge has in fact proceeded on an entirely erroneous basis by completely misreading the Consent Terms as is evident from a plain reading of Paragraph 22 of the Impugned Order which records viz. "22. .......However since parties have decided to the contrary as agreed upon in Clause 4.15, hence it shall be the Plaintiff who is directed to pay the entire amount of outstanding amounts towards principal charges of maintenance of the society for the suit property upto 31.12.2023." There is infact no such concession in the Consent Terms at all. The misreading of the Consent Terms is ex facie apparent from the fact that while the Learned Judge has referred to Paragraph 4.15 to conclude that the Appellant had agreed to pay the entire amount of outstanding maintenance charges upto 31st December 2023, there is infact no such concession in the said Paragraph. The only mention of payment of maintenance charges is to be found in Paragraphs 4.5, 4.10 and 4.11 of the Consent Terms as extracted above. The only mention of payment of maintenance charges is to be found in Paragraphs 4.5, 4.10 and 4.11 of the Consent Terms as extracted above. However even assuming such a concession existed, even then the directions passed in the Impugned Order are entirely unsustainable and can in no manner in the facts of the present case justify (a) directing the Appellant to make payment of the amounts claimed by Respondent No.3 without so much as an opportunity to contest the same (b) directing the Court Receiver to hand over possession of the shops to which the Appellant, Respondent Nos.1 & 2 are entitled to under the Consent Terms to Respondent No.3 and (c) directing the Appellant to file an undertaking to the effect that the Appellant shall not only pay the entire pending maintenance charges upto 31st December 2023 but also pay any future maintenance charges as may be raised by Respondent No.3. 10. For the aforesaid reasons, we find that the Learned Judge has erred both in fact and in law. We find that the directions set out in Paragraphs 23 to 25 of the Impugned Order are entirely unsustainable and are accordingly set aside, we allow the Appeal to only to this extent. 11. We however make it clear that rest of the Impugned Order shall remain unaffected. Parties will be required to act in terms of the Consent Terms and all undertakings given therein are accepted as undertakings to the Court. Needless to state that Respondent No.3 not being a party to the Consent Terms, shall not in any manner be bound by the Consent Terms. 12. The Appeal is disposed of accordingly. 13. In view of disposal of the Appeal, the Interim Application does not survive and the same is also disposed of.