Bombay High Court

Eksar Laxmi Narayan (Building No. ... vs M/.S Laxmi Narayan Constructions ... on 11 April, 2016

Bench: Mridula Bhatkar

                                                                                         FA1145_2015.doc

Vidya Amin                IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                  CIVIL APPELLATE JURISDICTION




                                                                                                 
                                         FIRST APPEAL NO. 1145 OF 2015

             Eksar Laxmi Narayan (Building No. 1)




                                                                         
             Cooperative Housing Society Ltd.                               ...   Appellant
                   Vs.
             M/s. Laxmi Narayan Constructions & Ors.                        ...    Respondents




                                                                        
             Mr. S.A. Abhyankar a/w. Ms. Jyoti Pande i/b. Anjali N. Helekar, Advocate
             for the appellant.
             Mr. K.K. Jadhav, Advocate for respondent nos. 2 and 3.

                               CORAM                       :      MRS.MRIDULA BHATKAR, J.




                                                              
                               RESERVED ON                 :      5th February, 2016.
                               PRONOUNCED ON ig            :      11th April, 2016

             JUDGMENT:

Notices were served to respondent nos. 1, 2 and 3, however, none

appeared for respondent no. 1. The respondent no. 1 did not appear

before the trial Court also and suit proceeded ex-parte against him. The

learned counsel Mr. Jadhav appeared for respondent nos. 2 and 3.

2. Admit. The learned counsel for the respondent waives service. By

consent of the parties, the matter is heard finally and decided at the stage

of admission, as short issue is involved.

3. This First Appeal is directed against the judgment and order dated

29th August, 2015 passed by the learned Judge of the City Civil Court,

Dindoshi, Mumbai by which Suit No. 163 of 2011 is dismissed for want of

jurisdiction under Rule 2(2) of Order XIV of Code of Civil Procedure. The

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appellant, who is the original plaintiff, have filed a suit for mandatory

injunction that the defendants are to be directed to execute conveyance in

favour of the plaintiffs in respect of Survey No. 96 Hissa No. 1A bearing

CTS No. 2262 admeasuring about 2510 sq. mtrs. with a building consisting

of ground plus 4 storied with land appurtenant thereto, out of total land of

7600 sq. mtrs. Alternatively, it is also prayed that if the defendants fail to

execute the conveyance within one month from the date of passing of the

judgment and order, then he be directed to execute the same and lodge the

same for registration with the Sub-Registrar of Assurance in whose

jurisdiction the property situates. Defendant No. 1 Laxmi Narayan

Construction is having a business of development and construction.

Plaintiffs and defendant nos. 2 and 3 are the Cooperative Housing Societies

duly registered under the provisions of Maharashtra Cooperative Societies

Act of 1960. The residential plot of defendant nos. 2 and 3 were

constructed by defendant no. 1. The structures of defendant nos. 2 and 3

are standing on a common plot of land, i.e., Survey No. 96, Hissa No. 1A

bearing CTS No. 2262 jointly occupied area situated at Village Eksar Taluka

Borivili admeasuring 6081.74 sq. mtrs. of the land. However, the area

occupied by each Society is not earmarked by defendant no. 1/developer

while carrying out the development. However, defendant no. 1 has entered

into registered agreement of sale with each flat owners of all the Societies

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separately. Though the possession of the flats are handed over by

defendant no. 1 to the respective flat owners and other purchasers have

occupied the flats in all these three Societies, defendant no. 1 did not take

steps to execute conveyance in favour of the Societies. Many requests were

made by the plaintiff/Society to the builder/defendant no. 1 and the

original landlord Mr. Mhatre, however, both the parties did not respond

and defendant no. 1 completely ignored his duty of registering conveyance

of the land in favour of the Societies. Hence, the plaintiff/Society has filed

the suit thereby praying the order of mandatory injunction that

approximately 1/3rd portion of the total land where the plaintiff's building

is standing is to be conveyed by registered conveyance in favour of the

plaintiff/society. Defendant no. 1 did not appear though the notice was

served and on 30th March, 2011 the Court proceeded ex-parte against

defendant no. 1. However, defendant nos. 2 and 3 filed their written

statement. They did not object for granting relief of registered conveyance

but it was stated in the written statement by defendant nos. 2 and 3 that

the area occupied by each Society is not earmarked while carrying out the

developments. They did not dispute that Tukaram Dattu Mhatre and his

legal heirs are the owners of the plot. It is also not disputed by them that

the total plot is admeasuring 6081.74 sq. mts. It was stated that the entire

plot is taken as a unit while constructing total 5 buildings and no separate

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area was earmarked to any particular building. It was contended in the

written statement that a common recreation ground and a common open

roads are shown for all the 5 buildings of these three Societies and it is

used commonly for all the members as a playground and parking.

Defendant nos. 2 and 3 also raised an objection that the Court has no

jurisdiction to try the suit in view of Section 5A of MOFA where the

government has created a Competent Authority to deal with the issues

under sections 5, 10 and 11 of MOFA which pertains to conveyance of the

land to the Societies. In the written statement, defendant nos. 2 and 3 are

not objecting the unilateral deed of conveyance. Defendant no. 1 did not

respond at all. All the Societies want a conveyance as it is their right under

MOFA.

4. After considering the averments made in the plaint and the

contentions raised by defendant nos. 2 and 3, the learned trial Judge

framed issues under Order XIV and also framed issue no. 1(c) on the point

of jurisdiction under section 11 of the MOFA which the Court answers that

it has no jurisdiction to try this matter and dismissed the suit under Rule

2(2) of Order XIV of Code of Civil Procedure.

5. The learned counsel for the appellant has submitted that the learned

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Judge has committed error in dismissing the suit on the point of

jurisdiction. He submitted that the learned trial Judge has erroneously

interpreted the ratio laid down by the High Court in the case of Mazda

Construction Co. & Ors. vs. Sultanabad Darshan CHS Ltd. & Ors.,

reported in (2013) 2 ALL. Mh. 278. He submitted that the appellant

wants a division of open plot to the extent of 1/3 rd share of the Society for

which it is entitled to and this issue cannot be decided by the Competent

Authority under section 11 of MOFA. In support of his submissions, he

relied on the judgment of the Single Bench in the case of Marathon Next

Gen Reality Ltd., Mumbai & Anr. vs. Competent Authority, District

Deputy Registrar of Cooperative Societies, Mumbai & Ors., reported in

(2015) 5 Mh. L.J. 318. He further relied on the judgment of Supreme

Court in the case of Mahalchand Laluchand Pvt. Ltd. vs. Pancholi

Cooperative Housing Society, reported in 2010 9 SCC 539.

6. The learned counsel for the respondents submitted that the

Competent authority has specifically created under section 5A of the MOFA

to decide the issue of conveyance. It is a special statutory body created

which can certify execution of unilateral deed of conveyance. The

appellant/Society should have filed the Application/Petition before the

Competent Authority. The respondents/societies have no objection for

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deemed conveyance when defendant no.1/builder is not paying any heed

to the request made by the appellant and the respondents/societies.

However, this cannot be decided by the Civil Court. Before the competent

authority, the matter can be decided expeditiously and that is a proper

forum. It is further submitted that it is a open plot which is jointly owned

by all the societies. Thus, the order passed by the learned trial Court is

legal and is to be upheld.

I have gone through the plaint so also the written statements filed by

respondent nos. 2 and 3/societies. The appellant and respondents/

societies unanimously agreed that the deed of conveyance is to be executed

by respondent no. 1/developer, however, he is admant or has some other

interest in not taking requisite steps under the provisions of MOFA. Not

handing over this land by conveyance by respondent no. 1/developer is

undoubtedly illegal act and all the societies have right to have conveyance

in their favour. However, the issue involved is when on a common plot the

buildings are constructed by the builder and the residents or

developer/builder form different societies of the flat purchasers in different

buildings with earmarking the area of each society independently then how

the Deeds of Conveyance can be entered by each society. Thus, further

issue is that who will decide the issue, what is the entitlement of each

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society in respect of the land. Under Section 5A of MOFA, the competent

authority is created so that the issues in respect of conveyance between the

builder/developer and flat purchasers and societies can be clear

expeditiously. Section 11(4) of MOFA reads as follows:

"11(4) The Competent Authority, on receiving such application, within reasonable time and in any case not later

than six months, after making such enquiry as deemed necessary and after verifying the authenticity of the documents submitted and after giving the promotor a reasonable opportunity of being heard, on being satisfied that it is a fit

case for issuing such certificate, shall issue a certificate to the Sub-Registrar or any other appropriate Registration officer

under the Registration Act, 1908, certifying that it is a fit case for enforcing unilateral execution of conveyance deed conveying the right, title and interest of the promoter in the

land and building in favour of the applicant, as deemed conveyance."

8. Under section 11(4) the powers of the Competent Authority are

defined so the competent authority has power to certify for unilateral

execution of conveyance in favour of the Society as deemed conveyance.

The said section gives power to the competent authority to make enquiry

about the title and entitlement of the appellant/Society after giving

audience to the promoter/builder.

9. In the present case, as submitted by the parties before the Court, i.e.

original plaintiff and defendant nos. 2 and 3, the promoter/defendant no. 1

did not earmark the land of each society but he has left open plot

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which is utilized as a common parking area and playground by all the

societies. Thus, in the present case, the dispute is to what extent the area

of joint plot is to be given to each society as per its entitlement and share.

Whether the entire plot is to be divided into different portions and it is to

be separately alloted to each society, so that each society may avail of

further benefit of FSI if excess land is available to them or whether it's a

common open place as a playground for all the societies is to be decided.

Admittedly, the builder is not coming forward. Inspite of the service of

notice in the suit, defendant no. 1/builder did not appear before the Civil

Court and did not file written statement. This shows that he is not

interested in handing over the land to these three societies which is against

the provisions of MOFA.

10. The learned Judge of the Civil Court has taken a view that the Civil

Court has no jurisdiction in view of Sections 5A and 11 of MOFA. However,

while relying on the judgments of the Bombay High Court, the view taken

by the learned Judge appears erroneous.

11. In the case of Mazda Construction Co. (supra), a Writ Petition is

filed under Article 226 and 227 of the Constitution of India wherein the

petitioner/developer has challenged the order passed by the competent

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authority under section 5A of MOFA issuing the certificate of entitlement of

land and of unilateral Conveyance Deed in favour of the

respondent/Society. In the said case, though a Civil suit was pending in

respect of dispute of land of the Society, the Competent authority has

passed the order and it was held that what is to be performed by the

Competent authority is a duty and obligation which the promoter is to

perform in law. It was held that the competent authority cannot permit the

parties to claim something which is beyond their agreement with the

promoters or other relevant documents. What should guide the competent

authority in each case is the entitlement in terms of the documents which

are referred to in Sections 10 and 11 and equally in the preceding

provisions including the particulars and details of the agreements with the

flat purchasers. In the case of Mazda Construction, there was a serious

dispute in respect of area of garden and access and the Competent

Authority without taking into account the pendency of the dispute before

the Civil Court, has passed the order of unilateral conveyance and

therefore, the Writ Petition was partially allowed. Thus, in the said case,

the learned Single Judge has outlined the scope of the enquiry conducted

by the competent authority and so also defined the limitations of the

enquiry.

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12. In the case of Marathon Next Gen Reality Ltd. (supra), similar issue

cropped up before the learned Single Judge and the learned Single Judge

has observed thus:

"The question of interpretation, if any, of the clauses between the parties and considering the scope and purpose, the Competent Authority has no jurisdiction to adjudicate disputed facts and law and so also no power to decide the

disputed interpretation of the clauses, so entered into referring to the provisions of MOFA Act and/or any other Act."

13.

Thus, though the competent authority has power to enquire into the

issue of pending Deed of Conveyance also to give audience to both the

parties and decide the same and issue certificate when the builder has not

specified the areas to either of the Societies or has not specifically

mentioned that the remaining residuary open plot is joint property of all

the Societies and accordingly the conveyance is to be executed, then this

issue of entitlement, title and interest itself cannot be decided by the

Competent Authority but it is subject matter within the jurisdiction of the

Civil Court, as the Civil Court will have to look into the language used in

the agreements so also the obligation of the builder under MOFA, rights of

the flat purchasers and legality approach in said issues. Though the