Kalpataru Co-Operative Housing ... vs State Of Maharashtra Through The ...
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                                                                   WP 9538 OF 2015.doc




                                                                                   
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                   IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                     CIVIL APPELLATE JURISDICTION




                                                           
                                   WRIT PETITION NO.9538 OF 2015




                                                          
          Kalpataru Co-operative Housing
          Society Limited,
          Sector 8B, CBD Belapur,
          Navi Mumbai 400 614                                     .... Petitioner




                                                
                    V/s.            
          1. The State of Maharashtra
             through the Secretary,
             Urban Development Department,
                                   
             Mantralaya, Mumbai 400 032.

          2. City and Industrial Development Corporation
             of Maharashtra Limited, a company registered
            

             under Companies Act, 1956,
             having its office at:
         



             CIDCO Bhavan, C.B.D. Belapur,
             Navi Mumbai 400 614.

          3. Industrial Development Bank of India,





             now known as IDBI Bank,
             IDBI Twoer,World Trade Centre Complex
             Cuffe Parade Mumbai 400 005.                                .... Respondents





          Mr. C.G. Gavnekar, for the petitioner.
          Mrs. M. P. Thakur, A.G.P., for the Respondent-State.
          Mr. Ajay Khaire I/by The Law Point for Respondent No.2.

                                  CORAM : RANJIT MORE &
                                          DR. SHALINI PHANSALKAR-JOSHI, JJ.

                                  DATE      : 12th APRIL, 2016.







                                                                WP 9538 OF 2015.doc




                                                                               

JUDGMENT: [PER: DR. SHALINI-PHANSALKAR-JOSHI, J.]

1. Rule.

2. Rule made returnable forthwith.

3. With consent of the parties, heard finally at the stage of

admission.

4. This petition is preferred under Article 226 of the Constitution

of India, for quashing and setting aside the action of respondent No.2 of

withholding of grant of no objection certificate to the members of the

petitioner society, to transfer their shares, rights and interest to use and

occupy the Flats in the building erected by the petitioner society on the

plot bearing No.1AB admeasuring 12240 sq. meters, situate in Section

8B, at CBD Belapur, Navi Mumbai.

5. By this petition, the petitioner society is also seeking relief of

quashing and setting aside the impugned show cause notice dated

3.9.2015, issued by respondent No.2 annexed as Exhibit "M", to the

petition and further direction to respondent No.2 for grant of "No Objection

Certificate".

6. Brief facts of the petition are to the effect that, Plot No.1

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admeasuring 2.25 hectors i.e. 22500 sq. meters in Sector No.8, CBD

Belapur, Navi Mumbai was allotted by respondent No.2 CIDCO to

respondent No.3 IDBI Bank for residential purpose on lease premium of

Rs.350 per sq. meter, for total premium of Rs.78,75,000/- for 99 years

lease, from the date of lease agreement dated 29.4.1985. As respondent

No.3 IDBI Bank did not construct on the said plot, on their request,

respondent No.2 CIDCO, agreed to transfer an area admeasuring 10260

sq. meters out of the said plot in favour of the Co-operative Society

formed by the employees of IDBI Bank, known as Vikasini Co-operative

Housing Society. A tripartite agreement came to be executed accordingly

between IDBI Bank, Vikasini Co-operative Housing Society and CIDCO,

in respect of an area admeasuring 10260 Sq. meter after obtaining

Board's approval.

7. Subsequent thereto, pursuant to request made by the

employees of IDBI, through its Association, balance land of the said plot

also came to be allotted by the CIDCO to the petitioner for construction of

residential premises, on the condition that proposed society would have to

pay transfer charges at the rate of Rs.490/- per sq. meter i.e. total

Rs.59,97,600/- with Rs.1,58,50.800/- for the area of 12240 sq. meter. The

period of construction was also extended upto 29.4.1999 and additional

premium was also paid accordingly. The period of construction on the

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said plot was further extended upto 28.2.2000 on the payment of

additional lease premium of Rs.1,37,08,800/- and transfer charges

Rs.64,26,000/-.

8. A tripartite agreement came to be executed accordingly

between petitioner, respondent No.2 CIDCO and respondent No.3. IDBI

Bank on 18.1.2000. The transfer of the said plot was also confirmed in

the name of petitioner society by CIDCO on 20.6.2000. Subsequent

thereto, respondent No.2 CIDCO, approved commercial use of part of

said plot by accepting additional premium of Rs.14,72,289/- on 30.3.2001.

Accordingly the construction on the said plot was carried out by the

petitioner society, after complying with all the formalities. After obtaining

occupancy certificate on 24.5.2004, the flats came to be allotted to

respective members of the petitioner society. The list of members of

occupying the flats was sent to respondent No.2 CIDCO, for approval.

Respondent No.2 accordingly granted approval. A registered Lease Deed

was executed was executed by respondent no.2 CIDCO in favour of

petitioner society on 31.12.2002.

9. According to petitioners, thereafter several members of the

petitioner society applied for "No Object Certificate" from respondent No.2

WP 9538 OF 2015.doc

for transferring their interests in the flats allotted to them, and such

permission was granted till 5.6.2010. However, thereafter by

communication dated 30.9.2010, the petitioner was informed that the

request for permission to transfer shares, interest in the flat of existing

members to new members cannot be processed as the permission of the

competent authority of CIDCO for the transfer of the plot from respondent

No.3 IDBI to the petitioner society was not taken and the matter was

pending with the higher authorities. The petitioner, after waiting for

substantial time, issued legal notice on 28.7.2015, to respondent No.2

pointing out that there was valid and legal lease deed executed in favour

of petitioner society, hence respondent No.2 cannot refuse to consider the

applications for transfer of its members.

10. In reply thereto, a show cause notice dated 3.9.2015, was

issued to the petitioner by respondent No.2 CIDCO, as to why agreement

of lease and tripartite agreement executed in favour of the petitioner

society should not be terminated.

11. The submission of the learned counsel for the petitioner is

that this action on the part of respondent No.2 is arbitrary, illegal and

without any authority. It is submitted that the transfer of the remainder plot

WP 9538 OF 2015.doc

of land in favour of petitioner society was effected after following

prescribed procedure and only after execution of the tripartite agreement.

The petitioner society has invested substantial amount for construction of

the building and the flat purchasers have also, on payment of requisite

charges of purchase price, became the owners of the flats purchased by

them. In view of the terms and conditions of the lease deed executed in

favour of the petitioner on 31.12.2002, they are entitled to transfer their

shares, right and interest in the flat. Respondent No.2 had earlier granted

such permission. Now all of sudden has respondent No.2 stopped

granting permission. The impugned action of respondent No.2

withholding of grant of no objection certificate, is thus, according to

learned counsel for petitioner liable to be quashed and set aside.

12. Respondent No.2 CIDCO has resisted this petition, by filing

affidavit-in-reply of the Estate Officer Mr. Abhay Vedpathak, contending

inter alia that certain irregularities were noticed in the execution of

tripartite agreement dated 18.1.2000 and subsequent lease deed. These

irregularities prima facie go to the root of the issue and thus render the

said agreement and the lease deed bad in law and void-ab-initio.

Therefore, pending enquiry into those irregularities, in the interregnum

period, respondent No.2 has decided not to grant permission for transfer

WP 9538 OF 2015.doc

of share to new members. It is stated that this action is taken with

bonafide intention of protecting the interest of the prospective purchasers.

13. According to learned counsel for respondent No.2, the

approval for transfer of the balance land admeasuring 12240 sq. meter to

the petitioner society, was granted in clear diversion of the procedure

followed by the Corporation of obtaining approval from the Board of

Directors. The competent authority for grant of such approval was the

Board of Directors and as in the absence of approval from the Board of

Directors, the transfer was allowed, the entire allotment process has

become illegal and void. It is submitted that as per agreement of lease

dated 29.4.1985, under which the plot was allotted to IDBI Bank, the

transfer of the plot was not permitted. IDBI should have surrendered the

plot to CIDCO, for fresh allotment. Instead of doing that, such transfer of

plot was allowed in favour of the petitioner. As a result, respondent No.2

CIDCO has suffered financial loss to the tune of Rs.6,36,23,520 /-. Hence

according to learned counsel for respondent No.2, the action of not

issuing "No objection certificate", taken by respondent No.2 is perfectly

justified. The petition is devoid of any merit and hence deserves to be

dismissed.

WP 9538 OF 2015.doc

14. Having heard, learned counsel for the petitioner and

respondent No.2 and after going through the entire record and proceeding

of this case, we are, however, of the opinion that this petition needs to be

allowed.

15. It is undisputed that initially plot admeasuring 22500 Sq.

meter was allotted to IDBI bank, after following due procedure of law and

by executing lease deed dated 29.4.1985. As respondent No.3 IDBI Bank

could not construct on the said plot, out of the same, land admeasuring

10260 Sq. Meters was allowed to be transferred in the name of Vikasini

Co-operative Housing Society, by virtue of tripartite agreement dated

30.7.1985. Subsequent thereto, remaining area admeasuring 12240 sq.

meter also came to be transferred in favour of the petitioner society by

virtue of tripartite agreement dated 18.1.2000 and on payment of transfer

charges of Rs.64,20,00/- and additional lease premium of

Rs.1,37,08,800/-. It is pertinent to note that commercial use of the part of

plot was also permitted by accepting additional payment of

Rs.14,72,289/-. Subsequent thereto, even the permission for construction

was granted and extended from time to time. The occupancy certificate

was also allotted on 19.7.2002. Respondent No.2 CIDCO even executed

the lease deed in favour of petitioner society on 31.12.2002. No objection

WP 9538 OF 2015.doc

certificates were also granted by CIDCO to the existing members of the

society to transfer their share, right and interest in their respective flats.

Now at this belated stage in the year 2015, for the first time, respondent

No.2 is raising objections on account of some alleged irregularities in the

transfer of plot in the name of the petitioner society by virtue of tripartite

agreement and lease.

16.

In our considered opinion, hardly any substance can be found

in the objections raised by respondent No.2 for issuance of "No Objection

Certificate", for even assuming that the enquiry in respect of the alleged

irregularities is in progress, it may take its own course. But when

respondent No.2 itself who had executed lease deed and tripartite

agreement in favour of the petitioner, now at this stage respondent No.2

cannot refuse to issue no objection certificate for transfer of the said flats

by its members to prospective purchasers. Needless to state that, the

prospective purchasers are bound to take care of their own interest and

respondent No.2 need not, on the pretext of protecting their interests,

refuse issuance of no objection certificate. Hence the petition needs to be

allowed and allowed accordingly.

Rule is made absolute in terms of prayer clause (a), (b) and

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(c) as follows :-

a) The impugned action of respondent No.2 of withholding

grant of "No Objection Certificate" to the members of the petitioner society to transfer their shares in the society or to transfer, assign their rights and interest to use and occupy the

flat in the building erected by the petitioner society in plot No.1/A/B admeasuring 12240 sq. meters situate in Sector No.8B, CBD Belap0ur, New Mumbai is quashed and set

aside.

(b) Respondent No.2 is accordingly directed to grant and continue to grant the applications of members of petitioner

society for "No objection Certificate".

(c) The impugned show cause notice No.CIDCO/M(TS-

1)/SF/2015/944 dated 03.09.2015 issued by respondent No.2

and annexed at Exhibit "M" to the petition is quashed and set aside.

[DR. SHALINI PHANSALKAR-JOSHI, J.] [RANJIT MORE, J.]