Bombay High Court
Laxmi Venkat Bahinala And 3 Ors vs Pratham Varadvinayak Developers ... on 7 April, 2017
Bench: S.C. Dharmadhikari
APPL82.17.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL (LODG) NO. 82 OF 2017
IN
ARBITRATION PETITION NO. 141 OF 2017
1 Mrs. Laxmi Venkat Bhinala, having her ]
nd
address at Flat No.677, 2 floor, Building ]
No.37, Azad Nagar, Shivsagar CHS, Azad ]
Nagar No.2, Veera Desai Road, Andheri (W)]
Mumbai - 400 053. ]
2 Mrs. Sitabai Bhikaji Dalvi, having her ]
address at Flat No.633, Ground Floor, ]
Building No.37, Azad Nagar, Shivsagar ]
CHS, Azad Nagar No.2, Veera Desai Road, ]
Andheri (W), Mumbai - 400 053. ]
3 Mr. Shreyash Amrutlal Bhansali, having ]
his address at Flat No.677, 1st Floor, ]
Building No.37, Azad Nagar Shivsagar CHS ]
Azad Nagar No.2, Veera Desai Road, ]
Andheri (W), Mumbai - 400 053. ]
4 Mr. Devendra Gopal Singh, having his ]
address at Flat No.683, 3rd Floor, Building ]
No.37, Azad Nagar Shivsagar CHS, Azad ]
Nagar No.2, Veera Desai Road, ]
Andheri (W), Mumbai - 400 053. ] ... Appellants
Versus
1 Pratham Varadvinayak Developers LLP, ]
Limited Liability Partnership Firm, ]
incorporated under the provisions of ]
Limited Liability Partnership Act, 2008, ]
having its office at Usha Kiran, Building ]
No.33, Shop No.1, Azad Nagar No.2, Veera ]
SRP 1/14
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Desai Road, Andheri (W), Mumbai-400053 ]
2 Azad Nagar Shiv Sagar Co-operative ]
Housing Society Limited, A Society duly ]
registered under the provisions of the ]
Maharashtra Co-operative Societies Act, ]
1960, having its registered Office at - ]
Building No.37, Azad Nagar, Off. Veera ]
Desai Road, Andheri (W), Mumbai-400053 ]
3 (a) Mrs. Premlata K. Chandrashekhran, ]
(b) Mr. Vijay K.Chandrashekhran, ]
(c) Mrs. Shalini K. Chandrashekhran, ]
having his address at : Flat No.673, 2nd ]
floor, Building No.37, Azad Nagar, ]
Shivsagar CHS, Azad Nagar No.2, Veera ]
Desai Road, Andheri (W), Mumbai-400053 ]
4 (a) Mrs. Manjula Ishwar Naik, ]
(b) Mr. Suresh Ishwar Naik, ]
(c) Mr. Manohar Ishwar Naik, ]
(d) Mrs. Rahmi Ashok Desai, ]
(e) Mrs. Jyoti Raju Naik, ]
(f) Mr. Vijay Ishwar Naik, ]
All having their address at - Flat No.685, ]
Ground floor, Building No.37, Azad Nagar, ]
Shivsagar CHS, Azad Nagar No.2, Veera ]
Desai Road, Andheri (W), Mumbai-400053 ] ... Respondent
Mr. Sanjay Jain with Ms. Manjiri Parsnis for the Appellants.
Mr. Ravi Kadam, senior counsel with Mr. Rupesh Geete and
Mr.Vikramjit Garewal i/b IC Legal for the Respondent No.1.
Dr. Birendra Saraf with Mr. Rajiv Singh and Ms. Manjiri
Chitnisi/b M/s. Chitnis & Co. for the Respondent No.2.
Dr. M.S. Deshpande, Court Receiver, with Mr. M.R. Mandawgade,
OSD, present in Court.
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CORAM : S.C. DHARMADHIKARI &
B.P. COLABAWALLA, JJ.
Reserved On : 23RD MARCH, 2017
Pronounced On : 7TH APRIL, 2017
JUDGMENT : [Per S.C. Dharmadhikari, J.]
1 This Appeal challenges an order passed by the learned
single Judge in the above Arbitration Petition. By the impugned
order dated 24th February, 2017, the learned single Judge made
the Arbitration Petition absolute in terms of prayer clauses (a) to
(c).
2 Since the operative order and directions are termed as
drastic and disposing of this Arbitration Petition finally, we only
reproduce those hereinbelow :
"(a) The Court Receiver of this Court is appointed
the Receiver of the rooms/tenements occupied by
Respondents Nos. 2 to 5 (as mentioned in the cause
title of the Petition), i.e., Room Nos 677 (2nd Floor),
663 (Ground Floor), 667 (1st floor) and 683 (3rd
Floor) of Building No.37, Azad Nagar Shivsagar CHS
Ltd, Azad Nagar No.2, Veera Desai Road, Andheri
(W), Mumbai 400 053. The Court Receiver will have
all powers under Order XL Rule 1 except the power of
sale.
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(b) Respondents Nos. 2 to 5 shall deliver vacant
possession of these four rooms to the Court Receiver
by 5 pm on 10th March 2017. In default, the Court
Receiver will proceed, from 11th March 2017, to take
physical and, if necessary, forcible, possession of
these four rooms. Upon obtaining possession, he will
deliver possession of all four rooms to the Petitioner
for re-development. This will be done no later than by
5:00 pm on 14th March 2017.
(c) If taking forcible possession, the Court
Receiver will inventory the articles in these four
rooms. The Petitioner will keep the articles in safe
custody at its cost and will release them to
Respondents Nos.2 to 5 on request within one week of
a written demand but without charge. Neither the
Court Receiver nor the Petitioner will be liable or
responsible for any damage or loss caused during the
removal and subsequent storage of these articles.
(d) On or before 6th March 2017, the Petitioner
will deposit with the Court Receiver the amount of
compensation in lieu of temporary alternate
accommodation ("transit rent") computed at the rate
applicable to all other members from the date that the
Court Receiver obtains vacant possession for 12
months computed from that date (10th March 2017)
and no earlier. If possession is delivered earlier, the
Petitioner will deposit the necessary pro rata
additional amount. The Petitioners is required to
make this deposit as a precondition to the Court
Receiver taking possession from Respondent Nos. 2 to
5. This is sufficient protection to these Respondents.
(e) All future payments, if any, will also be
deposited with the Court Receiver.
(f) As regards payments towards corpus,
shifting charges and one-time brokerage, these will be
computed for each of the Respondent Nos. 2 to 5 and
will be deposited by the Petitioners with the Court
Receiver within three weeks of the Petitioners
obtaining vacant possession of those premises.
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(g) Upon possession being obtained by the Court
Receiver, Respondent Nos. 2 to 5 will be at liberty to
apply to the Court Receiver for withdrawal of the
amount of transit rent. If they do not apply within ten
days of such deposit, the Court Receiver will invest
the amount in accordance with the usual practices of
his office. Respondents Nos. 2 to 5 will also thereafter
be entitled to apply for withdrawal of the additional
amounts deposited toward corpus, shifting charges
and one-time brokerage. If no application is made
within ten days of such deposit, the Court Receiver
will invest the amount. The Respondents Nos. 2 to 5
are not entitled to any interest on the amounts
deposited.
(h) On completion of the redeveloped building,
the Petitioner shall deliver possession of the premises
allotted or re-allotted to Respondents Nos. 2 to 5 to
the Court Receiver, who is to hold these till further
orders of the Arbitral Tribunal. Respondents Nos. 2 to
5 may make an application to the Arbitral Tribunal
for an interim order in this behalf. If no application is
made, the Arbitral Tribunal shall consider whether
these premises in the re-developed building should be
handed over to MHADA or the 1st Respondent."
3 Mr. Sanjay Jain, learned counsel appearing in support
of this appeal would submit that the learned single Judge has,
without any affidavit-in-reply, or any opportunity to defend the
allegations in the Arbitration Petition, allowed the Arbitration
Petition finally. That was allowed at the ad-interim stage itself.
4 Assuming without admitting that there is a power in
law and it was open for the learned single Judge to dispose of an
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Arbitration Petition finally at an ad-interim stage, still, Mr. Jain
would submit that the learned single Judge should have noted the
various irregularities and illegalities pointed out orally by the
counsel appearing for the appellants. These were pointed out
from the documents produced by the original petitioner-first
respondent to this Appeal. Thus, from the petitioners documents
if these glaring irregularities and illegalities were pointed out,
then, at the instance of such a petitioner, equitable and
discretionary reliefs should not have been granted. That
respondent No.1 - original petitioner was disentitled from
claiming the same. Mr. Jain submits that the order of the
learned single Judge proceeds on the footing that a few people or
those in minority cannot resist the redevelopment project. Mr.
Jain submits that, with respect, that is not the law. In the present
case, the learned Judge proceeds on the footing that the
appellants are unnecessarily and without any justifiable cause or
reason, obstructing the redevelopment of the property. They are
resisting the demolition of their structures even though they are
entitled to obtain the same benefits and on par with the majority.
That is the presumption based on which the reliefs are granted.
Mr. Jain would submit that if an opportunity to file a written
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reply and produce the relevant record had been granted, the
appellants would have demonstrated as to how they are not
obstructing the redevelopment project, but are inviting the
attention of the Court to the fact that once they vacate the
premises, their existing structures are demolished, they would be
rendered homeless. There is absolutely no guarantee of a new
construction coming up expeditiously or in a reasonable time and,
therefore, so long as this apprehension is not taken care of, it was
not proper to have appointed a Court Receiver and with all
powers, including to forcibly evict the appellants.
5 In the above process, Mr. Jain has taken us through
the allegations in the Arbitration Petition and particularly
paragraph 3(x) and (xiii) thereof. Our attention is also invited to
the assignment agreement, copy of which is at page 139 of the
paper-book. Mr. Jain would submit that the first respondent had
no locus or authority to present a petition. The first respondent is
not the original developer. The first respondent has stepped in
after M/s. Milind Developers, the original developer, has allegedly
assigned its rights in the project in favour of the first respondent
to this appeal. The cooperative housing society of which the
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appellants are members may have apparently agreed to this
arrangement, but the land belongs to the Maharashtra Housing
and Area Development Authority (for short "MHADA"). There is
nothing to indicate that a No Objection Certificate was obtained
from MHADA for the deal, namely, the assignment. Further, it is
submitted that there is a serious dispute about the contents of the
development permission and whether there is any approval to
built the upper storeys or beyond the plinth level. There is no
clarity in that behalf. All the more, therefore, this Appeal should
be allowed, the impugned order be quashed and set aside and the
Arbitration Petition be dismissed.
6 On the other hand, Mr. R.M. Kadam, learned senior
counsel appearing for the contesting respondent No.1 would
submit that even if any affidavit-in-reply had been filed to the
Arbitration Petition, that would have hardly made any difference.
The appellants are just four out of the total thirty two members
who are all beneficiaries of the redevelopment project. Twenty
eight out the thirty two members have consented to this
redevelopment. They have signed the necessary documents.
They are fully cooperating with the first respondent. They are
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ready and willing to vacate their premises and have indeed done
so. Once the learned single Judge was convinced that the
appellants were not acting bona fide, but at the instance of a third
party developer, then, this was a fit case and the learned single
Judge was justified in appointing the Court Receiver so as to
remove the recalcitrant and obstructing members from the site.
All permissions and approvals are granted. Therefore, we should
not entertain any request on behalf of the appellants nor interfere
with the order under appeal. The discretion has been exercised in
accordance with law. The same is not exercised arbitrarily or
capriciously. The impugned order cannot be termed as perverse
or vitiated in law, enabling us to interfere in our appellate
jurisdiction. Consequently the appeal must be dismissed.
7 With the assistance of Mr. Jain and Mr. Kadam, we
have perused the entire Memo of Appeal. We have also perused
an affidavit-in-reply, to the Arbitration Petition, affirmed on 23 rd
February, 2017. We have carefully perused the impugned order.
We have already reproduced the operative directions. While it is
true that the learned single Judge has not considered it fit and
proper to grant any adjournment, he has assigned reasons for the
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same. We find that the learned Judge has proceeded on the
footing that every single fact is undisputed and there is no
material to controvert or falsify the contents of the written
documents. One of the reasons why he did not grant time to file
an affidavit is because the project was already delayed. In
paragraph 10 of the order under challenge, the learned single
Judge has observed that the development has not progressed at
all for the past ten years. The building is over half a century old.
It is dilapidated. The building is certified as dangerous. All its
occupants and society members, including the contesting
respondents are compelled to live in subhuman conditions. Thus,
there is a threat to the safety, life and property of the members of
the society.
8 With all this, we still find that the learned Judge could
have, instead of assigning elaborate and detailed reasons and
commenting adversely on the conduct of the appellants before us,
balanced the rights and equities. With great respect, mandatory
orders and directions can be passed and issued when there is a
strong prima facie case and the balance of convenience is in
favour of those claiming such reliefs. Further, irretrievable loss
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and injury would be caused in the event such orders and
directions are refused. However, when the development has not
progressed for ten years, a new developer has come on the scene
on 21st July, 2016, has presented an Arbitration Petition claiming
final reliefs, then, in the facts and circumstances of this case and
peculiar to it, the learned Judge should have refrained from
disposing of the Arbitration Petition itself. He should have given
an opportunity to the appellants to file an affidavit-in-reply and
place their version on record. The Arbitration Petition could have
been heard expeditiously and in a time-frame. That is routinely
done. However, when the Arbitration Petition was moved, the
learned Judge thought it fit to dispose it of finally at the first
hearing itself. While doing so, the learned Judge has rendered
some conclusive findings. From paragraph 20 he refers to the
documents, namely, the Special General Body Resolution dated
31st October, 2004. He refers to an agreement between the
second respondent - Cooperative Housing Society and one M/s.
Milind Developers. That is dated 19 th January, 2006. He refers
to a No Objection Certificate from MHADA dated 13th October,
2006. So far so good. However, M/s. Milind Developers did not
make any progress and for good ten years. Yet, no expediency or
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urgency was demonstrated, and then members of the society met
to select the new developer - the first respondent before us. That
is how he came on the scene. That was pursuant to the four
General Body Meetings between 6th March and 16th September,
2016. There is a recent development of the Deputy Registrar,
Cooperative Societies, passing an order allegedly confirming the
appointment of the new developer and allegedly granting a No
Objection Certificate. It is in these circumstances and when on
21st July, 2016, the assignment agreement was executed, all
events and developments are of 2016, that we have expressed the
above opinion.
9 We are of the view that the appellants have raised
certain contentions with regard to the legality and validity of the
assignment agreement, they have also raised an issue of want of
No Objection Certificate, they have also raised the issue about
non-sanction and non-approval of the building plans too. In the
above circumstances, but at the same time bearing in mind that it
is only the appellants who are resisting the redevelopment at the
hands of the first respondent, the equities and the rights can be
balanced. We propose to balance them by clarifying that each of
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the observations and findings of the learned single Judge's order
be termed as tentative. They will not bind the appellants or
parties at a subsequent hearing and in Arbitration proceedings
too. The impugned order shall be treated as an ad-interim order.
However, since the redevelopment is resisted by only four
persons presently, we are of the view that interest of justice
would be served if we still grant an opportunity to the appellants
to cooperate by vacating the existing premises and structures in
their occupation and possession. We grant them time to do so and
to hand over vacant and peaceful possession thereof to the first
respondent or the competent authorities so as to cause a
demolition and removal of the same from the site. However, all
this would be without prejudice to their legal rights and
contentions, particularly noted by us and equally their
statements in the affidavit-in-reply to the Arbitration Petition.
Merely because they hand over vacant and peaceful possession
that would not be construed as their having accepted the legality
and validity of the project as a whole and particularly the
documents, approvals and plans, if any, on record. They can raise
all contentions as permissible in law either in reply to the
Arbitration Petition or in substantive proceedings.
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10 In view of the above, we direct that if the appellants do
not hand over vacant and peaceful possession of the premises in
their occupation on or before 10th May, 2017, then, the Court
Receiver, High Court, Bombay, as appointed by the learned single
Judge shall step in as an ad-interim Receiver. He shall then take
such steps as are permissible in law so as to cause a removal of
the appellants and their structures. Thereafter, the directions
that the learned single Judge has issued, would follow.
11 The appeal is disposed of in the above terms. We
clarify that beyond highlighting the controversy between the
parties and the objections of the appellants, we have not
expressed any opinion on any wider and larger issues,
particularly on the merits. There would be no order as to costs.
B.P. COLABAWALLA, J. S.C. DHARMADHIKARI, J.
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