Bombay High Court
Vikram Delite Co-Operative ... vs Meenakshi Chandrakant Shah And 6 ... on 28 July, 2017
Bench: S.J. Kathawalla
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
NOTICE OF MOTION (L) NO. 1341 OF 2016
IN
SUIT (L) NO. 413 OF 2016
Vikram Delite Co-operative Housing Society Ltd. ... Plaintiff
vs.
Mrs. Meenakshi Chandrakant Shah and others ... Defendants
Mr. D.D. Madon, Senior Advocate, along with Mr. Aditya Shiralkar,
instructed by Mr. R.R. Mishra, for the Plaintiff.
Ms. Indrayani M. Koparkar, for Defendant No.4.
Mr. G. Shah, instructed by M/s. Kanga & Co., for Defendant Nos. 5 and 6.
Mr. Prantik Majumdar, instructed by Mr. A.C.Sarkate, for Defendant No.
7.
Ms. Meenakshi C. Shah, Defendant No.1 present.
Ms. Bijal Shah, Defendant No. 2 present.
Mr. Mehul Shah, Defendant No.3 present.
CORAM: S.J. KATHAWALLA, J.
DATE: 28th July, 2017
ORAL JUDGMENT:
1. The Plaintiff, Vikram Delite Co-operative Housing Society
Limited, is a co-operative housing society registered under the Maharashtra
Co-operative Societies Act, 1960. The Plaintiff has 66 Members. By a
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Resolution passed at the Special General Body Meeting of the Society held
on 27th February, 2014, the Plaintiff decided to redevelop its existing
building consisting of Wings A, B, C and D at Ghatkopar. As of date, 62 of
the 66 Members are co-operating with the Plaintiff in its redevelopment
process. These co-operating members have either vacated their respective
flats or agreed to vacate them for demolition. Defendant Nos. 1 to 4 are the
non-co-operative members, who, according to the Plaintiff, are creating
hindrances in the redevelopment project by refusing to hand over
possession of their flats, viz. Flats A/002, A/102, A/101 and A/302
respectively to the Plaintiff. This is holding up the entire redevelopment
process. Under these circumstances, the Plaintiff has filed the present Suit
and has also taken out the above Notice of Motion seeking interim reliefs.
At the time of filing of the Suit, six Members were opposing the
redevelopment. However, after filing of the Suit, Defendant Nos. 5 and 6
arrived at a settlement with the Plaintiff and Defendant No.7 and filed
Consent Terms dated 6th /8th June 2016.
2. By the above Notice of Motion, the Plaintiff is seeking
mandatory orders only against Defendant Nos. 1 to 4, directing Defendant
Nos. 1 to 4 to vacate and remove themselves from their respective Flats in
the Plaintiff's Building and to make the Building available for the purpose
of demolition and redevelopment.
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3. The facts, which according to the Plaintiff Society have led them
to file the present Suit, in brief, are set out hereunder:
3.1 The Plaintiff Society was part of Delite Cooperative Housing
Society Limited which was registered under the provisions of the
Maharashtra Co-operative Societies Act 1960 under Registration No.
BOM/HSG/1956 of 1969 consisting of 170 Members residing in 8 Wings
of two Buildings, being Wings A, B, C, D (one building) and E, F, G and
(second building), in all having 142 flats and 28 shops therein (herein after
referred to as the 'Original Society').
3.2 Since the said Original Society was a huge Society, it was very
difficult to manage and administer the same under one Managing
Committee. The Members of the said Delite Cooperative Housing Society
Limited therefore decided to bifurcate and divide the said Society into two
Societies. Accordingly, at a Special General Body Meeting of the Original
Society, held on 28th July 2013, the Members unanimously passed a
Resolution to divide the said Original Society into two separate and distinct
Societies.
3.3 Pursuant to the said Resolution dated 28 th July 2013, the
Original Society made an application to the Deputy Registrar, Cooperative
Societies, 'N' Ward, Konkan Bhavan, Belapur, Navi Mumbai, seeking
division of the Original Society into two Societies viz., (i) Delite
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Cooperative Housing Society Limited ('Delite CHS') consisting of Wings
E, F, G and H of one building having 104 Members; and (ii) Vikram Delite
Co-operative Housing Society Limited i.e. the Plaintiff herein, consisting of
Wings A, B, C and D of another building having 66 Members. The Deputy
Registrar, Cooperative Societies, 'N' Ward, Konkan Bhavan, Belapur, Navi
Mumbai, passed an Order on 28th January 2014 bearing No.MUM/NV/B-
2/Delite Housing/Vibhajan/158/2014 sanctioning the division of the said
Original Society into two.
3.4 Sometime in or around 2014, the majority of the Members of the
Plaintiff-Society, including Defendants Nos. 1 to 4, gave a requisition to the
Society to call for a Special General Body Meeting at the earliest with the
agenda to take up the matter of redevelopment of the various Wings in its
Building.
3.5 Thereafter, on 27th February 2014, the Plaintiff in its Special
General Body Meeting unanimously passed a resolution to proceed with the
redevelopment of the existing Building of the Plaintiffs, i.e. Wings A, B,
and D, comprising of 66 flats, and also appointed Mr. Kiran Rokadia of
M/s. Vistar Architects as the Project Management Consultant. Defendant
Nos. 1 to 4 were present at this Meeting and in fact supported the
Resolution dated 27th February, 2014, as can be seen from the Minutes of
the Meeting at page 51 of the Plaint.
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3.6 The Plaintiff's Members in the Special General Body Meeting
held on 16th March 2014 (54 members - present and voting) unanimously
resolved to not opt for issuing tenders and instead decided to invite offers
for redevelopment from reputed and known developers. Defendants Nos. 1
to 3 were present at the said Meeting and supported the said Resolution
dated 16th March 2014. The Minutes of the Meeting are at pages 169-174
of the compilation submitted by the Plaintiff with its Affidavit-in-Rejoinder
dated 12th July, 2016 (hereinafter referred to as Part-I of the Compilation).
3.7 Pursuant to the offers received from developers known to and
suggested by the Members, the Plaintiff convened its Special General Body
Meeting on 13th April 2014 to select and appoint the Developer for the
redevelopment of the Plaintiff. In the said meeting an Officer Mr. P.S.
Savant, deputed by the Deputy Registrar of Co-operative Societies, was
present during the entire business of the meeting and such business was
duly video recorded. Since the offer submitted by Defendant No. 7 was
most beneficial for the Members, Defendant No. 7 was selected as the
Developer of the Plaintiff Society. At the said Meeting, out of 66 Members
of the Plaintiff Society, 63 Members remained present. The absentee
Members had given in writing to the Officer deputed by the Deputy
Registrar of Co-operative Societies that the decision taken by the majority
shall be binding upon them. Since Defendant Nos.1 and 2 had refused to
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sign in the attendance-sheet of the register maintained by the Society, even
if the Society proceeded on the basis that they had not voted in favour of
the Resolution, the said Resolution for appointment of Defendant No. 7 as
the Developer was passed by an overwhelming majority of the Plaintiff's
Members without any opposition from any Members. The Minutes of the
Meeting held on 13th April, 2014 are at pages 57 to 70 of the Plaint.
3.8 The Plaintiff subsequently submitted an application to the
Deputy Registrar, Cooperative Societies, N Ward Belapur seeking his NOC
for the selection of Defendant No. 7 as the Developer. After considering
the said application the Deputy Registrar (CS) "N" Ward was pleased to
issue an NOC vide his letter dated 16 th April 2014, a copy of which is at
page 72 of the Plaint.
3.9 The Plaintiff issued a formal Letter of Intent dated 25 th April
2014 to Defendant No.7 confirming the Plaintiff's decision to appoint
Defendant No. 7 as the Developer and recording the following benefits and
amenities to be provided by Defendant No. 7 to the Members of the
Plaintiff in the redevelopment project:
i. 45% additional Carpet Area free of cost.
ii. Hardship compensation at Rs. 1600 per sq. ft of existing
carpet area of which 25% was to be paid at the time of signing the
Development Agreement, 25% on receiving IOD and balance 50%
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on the Members vacating their respective flats.
iii. Monthly compensation at Rs. 65 per sq. ft on existing
carpet area.
iv. Six months monthly compensation as refundable security
deposit, plus 1 month compensation as brokerage and Rs. 10,000
transportation charges to each and every member.
v. Bank Guarantee of Rs. 7.5 Crores, was to be provided to the
Plaintiff at the time of the Plaintiff handing over vacant possession
of the existing building to Defendant No. 7 for demolition.
vi. Stamp duty, registration charges and all incidental expenses in
respect of the Development Agreement and in respect of agreements
for allotment of new flats in the proposed new building to be borne
by the Defendant No. 7 developer.
vii. Completion of the entire construction within 24 months plus 6
months grace period from handing over possession of the existing
building for demolition. A copy of the said Letter of Intent is at
pages 73 to 79 of the Plaint.
3.10 On 15th May 2015, pursuant to the said Bifurcation Order dated
28/01/2014 issued by the Deputy Registrar Cooperative Societies, Konkan
Bhavan, the Plaintiff and the adjoining Delite CHS applied to the Collector,
Mumbai Suburban District for the sub-division of the Plot of the erstwhile
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Delite Society (which was the parent society constituting the Plaintiff and
Delite CHS) between the Plaintiff and the Delite CHS, which were by then
separate societies.
3.11 While considering the said Application for sub-division, the
Collector, Mumbai Suburban District vide letter dated 6th June 2014
directed the said Societies to obtain Non-Agricultural (NA) permission for
the entire plot, as also the Layout Plan sanctioned by the Municipal
Corporation of Greater Mumbai ('MCGM'), the office translation of which
is at page 80 of the Plaint.
3.12 The Plaintiff's existing Building had been in a dilapidated
condition for some time. Between July - September 2014, 28 of the
Plaintiff's Members occupying 28 flats vacated their respective flats and
moved to transit accommodation with a view to avoid any mishap or threat
to their lives and property. At the request of these 28 Members, Defendant
No. 7 has been paying them transit accommodation / compensation on
humanitarian grounds. Thereafter, from time to time, several other
Members adopted the same course, and as on the date of filing of the Suit in
April 2016, around 53 Members had vacated their flats in the Plaintiff's
existing Building and were staying outside in transit accommodation.
3.13 On 29th September 2014, Defendant No. 7 sent the draft
Development Agreement to the Plaintiff's Advocate in pursuance of the
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Plaintiff's Letter of Intent dated 25 th April 2014, to seek the views of the
Plaintiff's Members and its Advocate thereon.
3.14 In the meanwhile, the Plaintiff applied for NA permission as
directed by the Collector Suburban Mumbai vide letter dated 6th June 2014.
On 5th February 2015, such NA permission was granted to the Plaintiff
upon payment of necessary fees and charges for the same. The said NA
permission was obtained with the active logistical and financial assistance
and help of Defendant No. 7 (Developer).
3.15 Upon receipt of the Draft of the Development Agreement from
Defendant No.7, the Plaintiff addressed a letter to its Members on 19 th May
2015 intimating to them that the copies of the said draft Development
Agreement were available at the Plaintiff's Society Office for their
inspection, and invited suggestions from them. The Members of the
Plaintiff held several meetings to discuss the said Draft. In the course of
these meetings, many Members of the Plaintiff, including Defendants Nos.
1 to 3, objected to the execution of the Development Agreement till the
Plaintiff's name was brought on the sub-divided Property Register Card.
3.16 On 22nd May 2015, the Managing Committee of the Plaintiff e-
mailed copies of the said Draft Development Agreement along with its
Annexures to Defendants Nos. 1 and 2 at their request (Page 100 of Part-I
of the Compilation).
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3.17 On 30th May 2015, Defendants Nos. 1 to 3 addressed a letter to
the Plaintiff stating inter alia that "Society to enter into DA only on
obtaining separate Property Card." (Pages 101 to 105 of Part-I of the
Compilation)
3.18 At this juncture, the Project Management Consultant of the
Plaintiff advised the Plaintiff to ensure the speedy processing of the
application for grant of the Layout Plan, which was necessary for the sub-
division of the property, as per the Collector's letter dated 6 th June 2014.
Heeding this advice, on 19th July 2015, the Plaintiff convened its Special
General Body Meeting seeking approval from its Members for the
submission of the building plans before the Municipal Corporation of
Greater Mumbai for the redevelopment of the suit building. At this
meeting, various important resolutions were passed in order to speed up the
Layout Plan processing. These resolutions included the decision to apply
for an IOD in the Plaintiff's name and the decision to approve the proposed
building plans, which Resolutions were passed by an overwhelming
majority of the Members of the Plaintiff Society. Defendants Nos. 1 to 3
attended the said Meeting on 19th July, 2015, signed the attendance sheet
for the said meeting and put a remark above their signatures on the said
attendance sheet The Minutes of the meeting held on 19th July, 2015 are at
Pages 81 to 90 of the Plaint.
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3.19 On 23rd December 2015, MCGM approved the Layout Plan and
permitted the sub-division of the plot of the Original Society. On receipt of
the approved Layout Plan, the Collector, Mumbai Suburban District on 2 nd
January 2016 granted the Order of sub-division of the entire plot, which
was divided into the suit property belonging to the Plaintiff, and the
adjoining portion belonging to the Delite CHS Ltd. The name of the
Plaintiff was brought on the Sub-Divided Property Register Card on 31 st
March 2016.
3.20 On 4th January 2016, MCGM issued Intimation of Disapproval
('IOD') to the Plaintiff, requiring the Plaintiff to obtain vacant possession
of all the flats in the suit building and to demolish the Building for
redevelopment as per Condition No. 53 of the IOD (Page 93 of the Plaint).
3.21 On 24th January 2016, the Plaintiff's Members in its Special
General Body Meeting finalized and approved the said Draft Development
Agreement with an overwhelming majority of over 94%, i.e. all the
Members except Defendants Nos. 1 to 4. Pertinently, Defendants Nos. 1 to
4 participated in the said Meeting. They merely sought time to study the
Draft Development Agreement, as seen from the said Minutes at pg. 187 of
the Plaint. They did not raise any objection or question as to the
appointment of the Developer or any of the major steps taken thus far by
the Plaintiff in the redevelopment process.
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3.22 Defendant No. 7- the Developer - invested significant time,
energy and efforts in achieving the following major milestones in the
redevelopment of the Plaintiff's property till date:
(i) Securing the Non-Agricultural (NA) use Order on 5th February
2015. Defendant No. 7 on behalf of the Plaintiff paid the unpaid arrears of
Non-Agricultural Tax (unpaid for more than 33 years) along with 100%
penalty.
(ii) Securing the approval of the Layout of the suit property on 23rd
December 2015. In order to obtain this Layout approval, Defendant No. 7,
acting on behalf of the Plaintiff, purchased and loaded TDR to the extent of
347 sq. mtrs. on the suit property on 16th June 2014 to offset the FSI
imbalance resulting from the sub-division, which was procured at a
consideration of Rs. 28.00 Lakhs;
(iii) Securing the Sub-Division Order whereby the suit property
belonging to the Plaintiff was sub-divided on 2nd January 2016;
(iv) Obtaining the basic IOD for construction on 4th January 2016;
(v) Bringing the name of the Plaintiff onto the Property Register
Card for the sub-divided property on 31st March 2016, and the same was
issued on 11th April 2016.
3.23 On 6th March 2016, a Special General Body Meeting of the
Plaintiff's Members was held to discuss the progress of the re-development
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process. At this meeting, the Plaintiff's Members passed a resolution by an
overwhelming majority (48 out of 50 Members) to initiate appropriate legal
action against the non-co-operative members of the Plaintiff who were
refusing to vacate their respective flats on or before 31 st March 2016.
Defendant No. 4 attended this Meeting, as can be seen from the Minutes at
p.199 of the Plaint.
3.24 In the aforesaid circumstances, the entire process of
redevelopment of the Plaintiff came to a standstill on account of non-
cooperation of Defendants Nos.1 to 4 who refused to vacate and handover
their flats to the Plaintiff by 31st March 2016.
3.25 The Plaintiff apprehended that the condition of the Plaintiff's
existing Building would further deteriorate and that Defendant No.7, who
has so far co-operated and assisted the Plaintiff in its redevelopment, may
abandon the redevelopment process on account of the failure of the Plaintiff
Society to handover vacant possession of the existing Building to the
Defendant No.7.
3.26 In these circumstances, on 20th April 2016, the Plaintiff filed the
present Suit (being Suit (L) No. 413 of 2016) against Defendants Nos. 1 to
4 seeking the relief of mandatory injunction to vacate and remove the said
Defendants from their respective flats to enable the Plaintiff to demolish
and redevelop the suit property. As mentioned earlier, Defendant Nos. 5
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and 6, who are also party-Defendants, are now co-operating with the
Plaintiff and hence the reliefs are directed only against Defendants Nos. 1
to 4.
4. After filing of the above Suit, the Plaintiff also filed the above
Notice of Motion for the following reliefs:
"(a) that pending the hearing and final disposal of the suit,
Defendant Nos.1 to 6 be directed by a mandatory order and
injunction of this Hon`ble Court to vacate and remove
themselves from their respective flats in Plaintiff Society
building and make the said flats available to the Plaintiff
Society for the purpose of demolition of the Plaintiff Society
building having Wings A, B, C and D in compliance with
Condition No.53 of IOD dated 4th January 2016 issued by
Municipal Corporation of Greater Mumbai;
(b) that pending the hearing and final disposal of the suit, that
Court Receiver High Court Bombay, be appointed Receiver
with all powers under Order XL, Rule 1 of the Code of Civil
Procedure, 1908, with direction of this Court to take vacant
possession of Flat Nos. A/002, A/101, A/102, A/302, B/204,
B/205, respectively occupied by Defendant Nos.1 to 6 and hand
over the same to the Plaintiff Society for the purpose of
carrying out redevelopment work of the Plaintiff Society
building consisting of Wings A, B, C and D."
5. When the present Notice of Motion was awaiting final hearing in this
Court, the following events transpired:
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(i) As per the directions of this Court, the Plaintiff forwarded the
Drafts of the Individual Permanent Alternate Accommodation Agreements
to Defendants Nos.1 to 6.
(ii) During the course of the hearing of the present Notice of
Motion, Defendants Nos. 5 and 6 agreed to vacate their respective flats as
and when required, vide Consent Terms dated 8th June 2016.
(iii) Defendant No. 7 obtained Sanction Letters for the Bank
Guarantee of Rs. 7.5 Crores/-, which is to be handed over to the Plaintiff,
when Defendant No. 7 obtains vacant possession of the suit building.
(iv) Defendant No. 7 (Developer) has submitted his Affidavit-cum-
Undertaking dated 15th June 2016, wherein he has inter alia committed and
undertaken to this Court to fulfil all its obligations as per the Offer Letter
dated 7/3/2014 and the draft Development Agreement approved by the
Plaintiff vide its Resolution dated 24/1/2016 passed in its Special General
Body Meeting, and complete the project.
6. The Learned Senior Advocate appearing for the Plaintiff, after
pointing out the aforestated facts submitted that each and every decision
with regard to the redevelopment process was taken unanimously or by an
overwhelming majority of the Members of the Plaintiff, after due
discussions/deliberations. The Society has maintained complete
transparency qua the redevelopment process and there is no suppression or
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fraud involved. He further submitted that the Plaintiff and Defendant No.7
have worked together and successfully met the various challenges faced in
the redevelopment process. It is only with the expertise, able assistance and
efforts of Defendant No.7 that the Plaintiff has reached a position to
redevelop its property so far. Defendant No.7 thus has continuously
enjoyed the trust and confidence of the overwhelming majority of the
Plaintiff's Members. He further submitted that the Building in which 66
flats of the Members are housed/located, is in a dilapidated condition. 62
of the 66 Members have extended all the co-operation to the Plaintiff
Society to carry out the process of redevelopment. As on the date of filing
of the Suit, 53 Members, in order to avoid any mishap or threat to their
lives and property, have vacated their respective flats and are residing in the
temporary alternate accommodation. Upon redevelopment of the Society
building, every Member will get several benefits as set out in the Draft
Development Agreement, which is approved by an overwhelming majority
of Members, including 45% additional carpet area free of cost. However,
the entire redevelopment project has been incorrectly and unfairly stalled
due to the adamant/obstinate conduct of a miniscule minority i.e. only four
Members i.e. Defendant Nos. 1 to 4, who are refusing to hand over
possession of their respective flats to Respondent No. 7 Developer, to
enable him to commence the redevelopment project. In fact, two of the
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four non-co-operative members are very closely related i.e. Defendant Nos.
1 and 2 are mother and daughter respectively. It is submitted that in view
of this non-co-operative approach of Defendant Nos. 1 to 4, the remaining
62 Members along with their respective families are put to grave
inconvenience. The balance of convenience is also overwhelmingly in
favour of the Plaintiff and its Members and against Defendant Nos. 1 to 4.
It is therefore submitted that the above Notice of Motion deserves to be
allowed with costs.
7. Defendant Nos. 1 to 3 filed their Affidavit dated 29th April,
2016, written arguments dated 5th May, 2016, detailed Affidavit in Reply
dated 6th June, 2016 and written arguments dated 15th June, 2016 and
22nd June, 2016. However, during the course of the hearing, Defendants
Nos. 1 to 3 submitted that they would be relying exclusively on their
Written Arguments dated 20th and 22nd June 2016 in their defence/response
to the present Notice of Motion, since these Written Arguments
encompassed their contentions contained in all their previous Affidavits
and Written Submissions/Arguments. In response to the said written
arguments of Defendants Nos. 1 to 3, the Plaintiff filed its Written
Arguments annexed to its Affidavit-in-Rejoinder dated 12th July 2016 and
also filed two Compilation of Documents.
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8. Defendant Nos. 1 to 3 who appeared in person submitted that
the Plaintiff is not entitled to the reliefs sought in the Notice of Motion on
the following grounds:
8.1 The redevelopment process initiated by the Plaintiff Society
violates the guidelines issued by the Maharashtra Government vide its
Directive under Section 79A of the Maharashtra Co-operative Societies
Act, 1960 dated 3rd January, 2009. In support of its submission, Defendant
Nos. 1 to 3 have contended that the Society has not received quotation
from the PMC as well as the advocate for their services; tenders are not
invited by public notice; IOD has been applied for before execution of the
development agreement; members are asked to vacate before the execution
of the development agreement.
8.2 That the vacating of the present accommodation/flats by 53
Members is in breach of the Letter of Intent (Conditions 5 and 12) and the
Members ought not to have vacated their flats prior to the execution of the
development agreement and the Developer ought not to have paid transit
compensation. The Developer is making monthly payments to 53 Members
only to buy out their votes in his favour.
8.3 That the Plaintiff has made out a false claim in paragraph 17 at
page 12 of the Plaint to the effect that all the Members of the Plaintiff (66
members) with the exception of Defendant Nos. 1 to 6 are accepting the
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transit compensation from Defendant No.7.
8.4 That the suit building is not in dilapidated condition as alleged
by the Plaintiff. In support of their contention, the Defendant Nos. 1 to 3
have relied on 27 photographs which according to them are taken on 10th
June, 2016.
8.5 That the Structural Report of M/s. Epicons Consultants dated
18th May, 2015 on the condition of the suit building is unreliable since the
said Consultants have been associated with Defendant No. 7 in its previous
projects.
8.6 That Wings E,F,G and H of the adjoining Delite CHS (which
was together with the Plaintiff Society) were constructed in the same
period and since they are in perfectly good condition and standing strong
and not claiming to be dilapidated, the Plaintiff's case that the suit building
is dilapidated is false.
8.7 That the Plaintiff had fraudulently attempted to enforce IOD
condition contained in clauses 53, 55 and 56.
8.8 That the Plaintiff is seeking enforcement of Clause 53 of the
IOD (vacating the Members) despite having committed a breach of Clauses
3, 5, 7, 12, 17 and 18 of the Letter of Intent.
8.9 That the non-vacating of the flat is not the only reason behind
the Plaintiff not being able to start demolition. The demolition work has
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been stalled due to the issuance of a letter dated 30th March, 2016 by the
MCGM whereby the issuance of Plinth C.C. has been halted.
8.10 That the carpet area of their flat is much higher than what is
stated in the Plaint which is clear from the report of their Licensed
Surveyor annexed by them at Exhibit-N at page 359 to their detailed
Affidavit.
8.11 That one Mr. Tulsi called their Licensed Surveyor Mr. Jatin
Bhuta and forced him to prepare another report as per the Occupation
Certificate of MCGM.
8.12 That the MCGM File containing the Occupation Certificate is
missing in MCGM as per the information given to them in reply to their
RTI by MCGM.
8.13 That the Plaintiff has allotted flats arbitrarily and not from top to
bottom.
8.14 That the selection of the Developer itself, and the entire process
of appointing Defendant No. 7 was stage-managed on 14th April, 2014 by
giving other bids which were non-existent, or which were decoys so that
the Members are made to believe that Defendant No. 7 had allegedly given
the "best offer".
8.15 That the IOD was obtained prematurely and without the
development agreement being executed, and while applying for IOD, the
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Plaintiff did not disclose to MCGM that there was a developer appointed by
the Society i.e. Defendant No.7 but instead obtained an IOD in the name of
the Society showing the redevelopment as a self development.
8.16 That the Defendant No. 7 has wrongly contended that it has
incurred an expense of Rs. 8 crores on the project.
8.17 That Defendant No. 7 was not appointed by following the
tender process; no certification of registration of Defendant No. 7
Partnership Firm has been provided; Defendant No. 7 has zero experience
in redevelopment.
8.18 That Defendant No. 7 has failed to disclose the name and
address of the Structural Engineer, Civil Engineer, Supervisors, License
Plumber, Painter, Hardware Suppliers, etc.
8.19 Defendant No. 7 has not disclosed its Income Tax Returns till
date for verification.
8.20 That the draft development agreement is lopsided on account of
the Plaintiff appointed PMC and the Advocate being biased towards
Defendant No.7. The development agreement does not have a termination
clause and did not include amenities list as finalized in the Special General
Body Meeting of 4th February, 2016.
8.21 That Advocate Mr. Rajendra Mishra had no authority to file the
present Suit.
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8.22 That Defendant No. 7 is not a necessary party to the present
Suit.
8.23 That the decision of Defendant No. 7 to execute individual
permanent alternate accommodation agreement with the Plaintiff's
Members after the CC, is in violation of Clause 56 of the IOD and the
Plaintiff ought not to support it.
8.24 That Defendant Nos. 1 to 3 have not received the share
certificates in respect of the flats and that an attempt was made by some
persons to issue fabricated share certificates. In view thereof, there is an
ambiguity in respect of their status as Members of the Plaintiff.
8.25 That M/s. Vistaar Architects was appointed by original Delite
Society and there is no Special General Body meeting resolution passed
by the Plaintiff to appoint M/s. Vistaar Architects as PMC for the present
project.
8.26 That no structural stability certificate is submitted to the MCGM
under Section 353B of the MMC Act, 1888 and no notice has been issued
under Section 354 or 475-A of the MMC Act, 1888.
8.27 That the Plaintiff Society has not taken steps to obtain NOC
from banks in whose favour some flats have been mortgaged. This has
been done to defraud the banks.
8.28 That apart from Defendant Nos. 1 to 6, 9 other Members are
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still residing in the Society premises. Further 85 per cent of Members who
have allegedly vacated their flats are still using their flats despite the
Plaintiff alleging that these flats are vacant.
8.29 That the suggestions of Defendant Nos. 1 to 3 were not taken
into consideration by the Plaintiff and the Notices dated 12th March, 2016
and 16th March, 2016, under Section 164 of the Maharashtra Co-operative
Societies Act have not been replied to.
8.30 That the Notice and Minutes of Special General Body
Meetings of the Plaintiff dated 27th February, 2014 and 16th March, 2014,
have been manipulated.
9. The objections raised on behalf of Defendant No. 4 in his
Affidavit in Reply dated 29th April, 2014, to the present Notice of Motion
pertaining to the non-execution of the development agreement and
individual agreements, the non-compliance with the condition No. 56 of the
IOD, non-loading of TDR are identical to the submissions advanced by
Defendant Nos. 1 to 3.
10. After the matter was reserved for orders, Defendants Nos. 1 to 3
submitted an Affidavit-in-Rejoinder dated 26th July 2016 by way of
response to the Plaintiff's Affidavit-in-Rejoinder dated 12 th July 2016. In
the said Affidavit in Rejoinder, Defendant Nos. 1 to 3 raised the following
objections:
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10.1 That it is not mandatory to comply with Clause 53 of the IOD,
which mandates the demolition of the existing building. In support of this
submission Defendant Nos. 1 to 3 have relied upon a document dated 8th
March, 2016 submitted by the Plaintiff's Architect to MCGM.
10.2 That 53 Members have vacated the building for oblique motives;
that since the Plaintiff's building does not feature in the list of buildings
categorized as 'C-1' Category by MCGM, it cannot be said that the building
of the Society is in a dilapidated condition.
10.3 That 53 Members were receiving transit rents since July, 2014.
They are therefore on the 'payroll' of Defendant No.7. Further majority
of the Members being from the Patel Community and/or belong to the
civil construction line were expecting business from this redevelopment
project and selective Members were also given additional area over and
above the PMC certified area as can be seen from Annexure-K of the draft
development agreement under the column head 'Additional Area'. Hence
the majority of the Members are obligated to Defendant No. 7 and therefore
it cannot be said that the redevelopment project is supported by an
overwhelming majority of the Plaintiff's Members.
10.4 That in the Special General Body Meeting dated 24th January,
2016, approval of the draft development agreement was a sham. The
Secretary was absent without any explanation. The comments of the
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Advocate for the Plaintiff Society were not given to the Members and the
draft was approved without finalizing the amenities.
10.5 That in the Special General Body Meeting held on 19th July,
2015, the Advocate for the Plaintiff misled the Members by saying that the
sub-division of the plot was not possible without demolition of the building
and hence getting IOD is a must for the Society. The statement made by the
Advocate is false, given that the sub-divided property card was received on
11th April, 2016 i.e. prior to the demolition of the building.
10.6 That an aggregate of extra area admeasuring 1188 sq.ft. is
allotted to few of the Members.
10.7 The Notice of Motion therefore deserves to be dismissed with
costs.
10.8 The Plaintiff replied to the said Affidavit-in-Rejoinder dated
26th July, 2016 vide its response dated 8th August, 2016.
11. After the matter was heard and closed for orders on 2nd August,
2016, the Plaintiff moved this Court on 24th October, 2016, in the light of
subsequent deterioration of the suit building, endangering the lives of the
handful minority Members continuing to reside in the suit building. The
Plaintiff Society filed a further Affidavit dated 22nd October, 2016, placing
the following facts on record:
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11.1 In the 1st week of October 2016, a major portion of the ceiling of
Flat No. B/103 collapsed leading to further serious structural and
irreparable damage to the building which was already in a deteriorated
condition.
11.2 In view of this, in October 2016, the Plaintiff Society addressed
letters to BMC and Police Authorities, intimating to them that the building
is in a dilapidated condition and that neither the Managing Committee nor
any of the Society Members ought to be held liable or responsible for any
mishap or injury in case the building collapses.
11.3 The overwhelming majority of more than 53 Members and their
families having already vacated their flats since July 2014 and 9 Members
and their families are willing to vacate. It is only on account of Defendant
Nos.1 to 4 that the entire redevelopment project has been stalled.
11.4 The said Affidavit dated 22.10.2016 filed by the Plaintiff
Society contains recent photographs to support their stand.
12. Defendants Nos. 1 to 3 and 4 filed their Affidavits-in-Reply
dated 27th October 2016 inter-alia denying that the building is in a
dilapidated condition.
13. After hearing the parties, the above Notice of Motion was again
closed for orders by this Court. However, it was clarified that the Society
as well as the Builder has put the Members/tenants to notice that if they
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continue to occupy the suit building, it shall be at their own risk.
14. Thereafter, Defendants Nos. 1 to 3 filed a limited Affidavit
dated 10th November 2016 pointing out that MCGM in its reply dated 26th
October 2016 to their RTI Application dated 1st October 2016, informed
Defendant Nos.1 to 3 that the suit building has not yet been declared to be
in a dilapidated condition i.e. C-1 category. In response to the Affidavit
dated 10th November 2016 filed by Defendant Nos.1 to 3, the Plaintiff filed
their Additional Affidavit dated 17th November 2016 pointing out that the
said contention raised by Defendants Nos. 1 to 3 is thoroughly
misconceived and irrelevant for the reasons set out therein.
15. Thereafter, once again on 19th December, 2016, Defendants No.
1 to 3 moved this Court by way of a praecipe, stating that on 16 th
December, 2016 the Plaintiff Society stuck on building walls, the notice
u/s. 354 of Municipal Corporation Act which is signed and dated 10 th
December, 2016, declaring that the suit building is in a dilapidated
condition. It was also stated in the said praecipe that one team of Capstone
Consultants Pvt. Ltd., acting upon the instructions of one Mr. Tulsi K Patel,
Plaintiff and Defendant No. 7, have drilled big and multiple holes about 6-8
inches deep in almost every wall and pillar of the society building as well
as through and through holes are also drilled in the walls of certain flats.
16. In response thereto, the Plaintiff filed an Additional Affidavit
dated 20th December, 2016, explaining the circumstances under which
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notice under Section 354 of the MMC Act, 1888 was issued as well as the
holes drilled by Capstone Consultants Pvt. Ltd., the agent/representative of
Victoria Jubilee Technical Institute (VJTI), which is a part of the standard
procedure during structural audit.
17. Again, on 23rd December, 2016, Defendants Nos. 1 to 3
submitted a Rejoinder containing submissions which were repetitive and
already dealt with by the Plaintiff in their written submissions.
18. The Learned Senior Advocate appearing for the Plaintiff has in
response to the aforestated objections raised by Defendant Nos. 1 to 4
taken me through the Affidavits and the written submissions and also the
two compilations filed by the Plaintiff with its Affidavit in Rejoinder dated
12th July, 2016 and has submitted that the objections raised by Defendant
Nos. 1 to 3 are untenable, baseless and false and are raised only with a
view to inconvenience the 62 Members of the Society and their family
members who are co-operating in the redevelopment process. It is also
submitted that the approach of Defendant No. 4 is mala fide and driven by
selfish motives and personal interest, besides being devoid of merit. It is
submitted that Defendant No. 4 is fully aware of the entire redevelopment
process of the Plaintiff Society since he has attended all the meetings of the
Plaintiff Society, as admitted by him in paragraph 2 of his Affidavit in
Reply dated 29th April, 2016. The true reason behind Defendant No. 4's
obstruction is his failed attempt to claim interest in and/or purchase the
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Dhobi Ghat area i.e. the encroached area of the land of the Plaintiff
Society. In all the meetings of the Plaintiff, Defendant No. 4 has been
raising only this issue of the Dhobi Ghat area, which is clear from the
Minutes of the Special General Body Meeting dated 6th March, 2016 at
page 199 of the plaint and letters dated 20th February, 2015, 28th March,
2015 and 21st May, 2015 at pages 287- 299 of Compilation Part-II
tendered by the Plaintiff. It is also pointed out that Defendant No. 4
himself had proposed the name of Defendant No. 7 as a Developer for the
reconstruction of the Plaintiff's building in the Meeting of the Plaintiff
Society held on 13th April, 2014. In fact, Defendant No. 4 has admitted
that he has received all the necessary documents requested from the
Plaintiff, save and except registered development agreement, registered
permanent alternate accommodation agreements/individual agreements
and TDR documents (i.e. proof of purchase of TDR), which grievance
is clearly misconceived, since these documents have not yet been
executed and are not in existence. It is therefore once again submitted on
behalf of the Plaintiff that the above Notice of Motion be made absolute
with costs.
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19. The order in the above Notice of Motion was kept for
pronouncement on 20th July, 2017. However, before the pronouncement of the
order, this Court enquired from the Senior Advocate appearing for the Plaintiff
Society and the Advocate appearing for Defendant No. 7 whether they were
agreeable to give an undertaking to the effect that the tripartite agreement for
permanent alternate accommodation would be executed prior to the demolition
of the existing building and that they will abide by the terms of the Intimation of
Disapproval (IOD) as well as the development agreement. The Advocates for the
Plaintiff and Defendant No. 7 sought time to take instructions and the matter was
adjourned to 28th July, 2017 i.e. today.
20. Today, the Plaintiff Society as well as Defendant No. 7 developer
through their Advocates undertake as follows:
(i) That the development agreement between the Plaintiff Society and
the Defendant No. 7 developer shall be executed within 25 days from the date of
this order;
(ii) A provisional tripartite agreement for permanent alternate
accommodation shall be executed between the individual members of the Society,
the Society and the developer before the members vacate their respective
premises and before carrying out any demolition.
(iii) That a final tripartite agreement in identical terms of the provisional
agreement shall be executed on receipt of the full commencement certificate.
KPPNair -31- NMSL 1341/2016
(iv) The Plaintiff Society and Defendant No. 7 developer shall abide by
the terms of the IOD.
The above undertakings are accepted.
21. However, Defendant Nos. 1 to 3 have submitted that Defendant No.
7 has authorised Mr. Tulsi Patel, who is almost insolvent, to take certain steps on
their behalf. It is submitted that Mr. Tulsi Patel has business relations with the
partners of Defendant No.7; there are several legal/recovery proceedings inter
alia against the partners of Defendant No. 7 and therefore their major concern is
whether Defendant No. 7 will be able to complete the work of redevelopment.
The learned Advocate for Defendant No. 4 submitted that Defendant No. 4 too is
not against redevelopment but his only concern is whether Defendant No. 7
would be able to complete the project as promised.
22. Mr. Parikshit Niglani, Partner of Defendant No. 1 in response to the
queries put to him by the Court stated that though they have very good relations
with Mr. Tulsi Patel, there exists no business relations between their
Companies/firms and Mr. Tulsi Patel. The financial status of Mr. Tulsi Patel is
irrelevant since they have only authorised him to take some steps on their behalf
and have not assigned any work involving any financial responsibility to Mr. Tulsi
Patel. Mr. Niglani has submitted that, in any event, they shall henceforth not
assign any work to Mr. Tulsi Patel qua the redevelopment project. Mr. Niglani
has submitted that none of their Partnership firms or Companies are facing any
KPPNair -32- NMSL 1341/2016
financial problems and are doing extremely good business. All their Companies
have very high credit ratings. He has submitted that even otherwise since their
Companies are involved in business dealings worth several crores, existence of
certain legal proceedings by or against their Companies/firms does not mean that
they are in financial trouble or are insolvent.
23. Defendant Nos. 1 to 3 and the Advocate for Defendant No. 4 thereupon
submitted that in that event Defendant No. 7 should deposit the value of their
respective flats in Court. When this Court enquired as to what according to them
is the value of their respective flats, surprisingly the answer was that they are not
aware. It was therefore submitted on behalf of Defendant No. 7 that in that event
they should sell their present flats to Defendant No. 7 at the ready reckoner rate
and buy flats elsewhere. Defendant No. 4 thereupon submitted that Defendant
No. 7 will be selling the free sale flats for Rs. 21,000/- per sq.ft. and is offering
only the ready reckoner rate of Rs. 9,000/- for their existing flats. To this,
Defendant No. 7 gave a with prejudice offer to buy the existing flats of the non-
co-operative members at Rs. 21,000/- per sq.ft. However, the non-co-operative
members who till now were insisting that Defendant No. 7 has no funds to
redevelop the property have now refused to accept the offer.
24. I have gone through the Plaint, the Notice of Motion, the
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Affidavit in Support thereto, Affidavits in Reply and Rejoinder and the
written submissions filed by the parties from time to time and have
considered the same.
25. The Original Society- Delite Co-operative Housing Society
Limited - consisted of 170 Members residing in 8 wings of 2 buildings
being Wings A, B, C, D (one building) and E, F, G and H (another
building), in all having 142 flats and 28 shops. The Managing Committee
of the Original Society therefore decided to bifurcate and divide the said
Society into two Societies and passed a Resolution to this effect at the
Special General Body Meeting held on 28th July, 2013. The Deputy
Registrar, Cooperative Societies, N Ward, Konkan Bhavan, Belapur, Navi
Mumbai, passed an Order on 28th January, 2014, sanctioning the division
of the said Original Society into two Societies viz., (i) Delite Cooperative
Housing Society Limited consisting of Wings E, F, G and H of one
building of the Society having 104 Members; and (ii) Vikram Delite Co-
operative Housing Society Limited i.e. the Plaintiff herein, consisting of
Wings A, B, C and D of the second building of the Society having 66
Members. All the Members of the Society including Defendant Nos. 1 to 4
gave individual letters to the Society to call for a Special General Body
Meeting to take up the matter of redevelopment of the Society at the
earliest, since the structural condition of the Society's buildings had
KPPNair -34- NMSL 1341/2016
deteriorated beyond repair. The contents of all the letters including the
letters addressed to the Plaintiff by Defendant Nos. 1 to 4 are identical and
reproduced hereunder:
"As our Society's Building structural condition has
deteriorated beyond repairs, I would request you to
arrange general body meeting to take up matter for
Redevelopment of our Society at the earliest."
25.1 Thereafter, on 27th February 2014, the Plaintiff in its Special
General Body Meeting unanimously passed a Resolution to proceed with
the redevelopment of the existing building of the Plaintiffs, i.e. Wings A, B,
C and D, comprising of 66 flats, and also appointed Mr. Kiran Rokadia of
M/s. Vistar Architects as Project Management Consultant. Defendant Nos.
1 to 4 were present at this Meeting and in fact supported the Resolution
dated 27th February, 2014. In the Special General Body Meeting held on
16th March 2014, 54 Members of the Plaintiff Society unanimously
resolved not to opt for issuing tenders and instead decided to invite offers
for redevelopment from reputed and known developers. Again Defendant
Nos. 1 to 3 were present at the said Meeting and supported the said
Resolution dated 16th March 2014. Pursuant to the offers received from
developers known to and suggested by the Members, a Special General
Body Meeting was convened by the Plaintiff Society on 13 th April 2014 to
KPPNair -35- NMSL 1341/2016
select and appoint the Developer for the redevelopment of the Plaintiff
which Meeting was attended by Mr. P.S. Savant, Officer deputed by the
Deputy Registrar of Co-operative Societies. At this Meeting, the offer
submitted by Defendant No. 7 was found to be the most beneficial for the
Members and Defendant No. 7 was therefore selected as the Developer of
the Plaintiff to carry out the redevelopment work of the Plaintiff Society. 63
Members out of 66 Members of the Plaintiff Society were present at the
said Meeting and the said Resolution appointing Defendant No. 7 as the
Developer was passed by a overwhelming majority. The said Meeting was
attended by Defendant Nos. 1 to 4 and though Defendant Nos. 1 and 2
refused to sign the Attendance Sheet, the objections raised by them at the
said Meeting were duly considered by the Plaintiff's Members. Pursuant
thereto, the Plaintiff subsequently submitted an application to the Deputy
Registrar, Cooperative Societies, N Ward, Navi Mumbai, seeking his NOC
for the selection of Defendant No. 7 as the Developer which he issued vide
his letter dated 16th April 2014.
25.2 The Plaintiff thereafter issued a formal Letter of Intent dated 25 th
April 2014 to Defendant No.7 confirming the Plaintiff's decision to appoint
Defendant No. 7 as the Developer and inter alia recorded that the
Developer shall provide to the Members of the Society 45% additional
Carpet Area free of cost; hardship compensation at Rs. 1600 per sq. ft of
existing carpet area, of which 25% shall be paid at time of signing the
KPPNair -36- NMSL 1341/2016
Development Agreement, 25% on receiving IOD and the balance 50% on
the Members vacating their respective flats; monthly compensation at Rs.
65 per sq. ft on existing carpet area; six months monthly compensation as
refundable security deposit, plus 1 month compensation as brokerage and
Rs. 10,000 transportation charges to each and every Member; Bank
Guarantee of Rs. 7.5 Crores, will be provided to the Plaintiff Society at the
time of handing over vacant possession of the existing building to
Defendant No. 7 for demolition; and stamp duty, registration charges and
all incidental expenses in respect of the Development Agreement and in
respect of agreements for allotment of new flats in the proposed new
building shall be borne by the Developer. It was also provided in the Letter
of Intent that the entire new construction shall be completed within 24
months plus 6 months grace period from the date of handing over
possession of the existing building to the developer, for demolition.
25.3. Pursuant to the said bifurcation Order dated 28/01/2014 issued
by the Deputy Registrar Cooperative Societies, Konkan Bhavan, on 15th
May, 2015 the Plaintiff and the adjoining Delite CHS applied to the
Collector, Mumbai Suburban District for the sub-division of the plot
between Delite Society and the Plaintiff Society. While considering the
said Application for sub-division, the Collector, Mumbai Suburban District
vide letter dated 6th June 2014 directed the said Societies to obtain Non-
KPPNair -37- NMSL 1341/2016
Agricultural (NA) permission for the entire plot as also the Layout Plan
sanctioned by the Municipal Corporation of Greater Mumbai (MCGM).
25.4 On 29th September 2014, Defendant No. 7 sent the draft
Development Agreement to the Plaintiff's Advocate in pursuance of the
Plaintiff's Letter of Intent dated 25 th April 2014, to seek the views of the
Plaintiff's Members and its Advocate thereon. In the meanwhile, the
Plaintiff applied for NA permission as directed by the Collector Suburban
Mumbai vide his letter dated 6th June 2014, and on 5th February 2015, such
NA permission was granted to the Plaintiff upon payment of necessary fees
and charges for the same.
25.5 At the request of the Plaintiff Society, to gauge the condition of
the Plaintiff's building at the relevant time, M/s. Epicons Consultants Pvt.
Ltd., independent Structural Auditors and Engineers, empanelled with the
MCGM were appointed as Structural Consultants by Defendant No.7. M/s.
Epicons Consultants submitted their Report dated 18th May, 2015, wherein
they have submitted their conclusions as reproduced hereunder:
"1. The distress in the RCC members is on account of
corrosion of reinforcement bars and is very critical and
alarming. Corrosion process is aggressive and spreading
fast.
2. RCC columns at all levels have severe corrosion cracks
which are serious in nature and endanger the structural
KPPNair -38- NMSL 1341/2016
safety of the building.
3. Also, the slabs & beams are affected due to
reinforcement corrosion, which will affect the safety of the
occupants due to the hazard of ceiling giving way.
4. The structure is dilapidated condition and not fit for
occupation. Considering the present condition and age of the
building option of reconstruction may be considered as
repairs are not feasible. Newly constructed building can
comply with latest Earthquake resistant design requirement
and durability aspects."
25.6 Upon receipt of the Draft of the Development Agreement from
Defendant No.7, the Plaintiff addressed a letter to its Members on 19 th May
2015 intimating to them that the copies of the said draft Development
Agreement were available at the Plaintiff's Society Office for their
inspection, and invited suggestions from them. The Members of the
Plaintiff held meetings to discuss the said draft. In the course of these
meetings, many Members of the Plaintiff, including Defendants Nos. 1 to 3,
objected to the execution of the Development Agreement till the Plaintiff's
name was brought on the sub-divided Property Register Card. On 22 nd May
2015, the Managing Committee of the Plaintiff at the request of Defendant
Nos. 1 and 2 also e-mailed copies of the said Draft Development
Agreement along with its Annexures to Defendants Nos. 1 and 2. On 30 th
May 2015, Defendants Nos. 1 to 3 addressed a letter to the Plaintiff stating
KPPNair -39- NMSL 1341/2016
inter alia that the Society should enter into a development agreement with
the Developer only on obtaining a separate Property Card.
25.7 As submitted by the Plaintiff, at this juncture, the Project
Management Consultant of the Plaintiff advised the Plaintiff to ensure the
speedy processing of the application for grant of the Layout Plan, which
was necessary for the sub-division of the property, as per the Collector's
letter dated 6th June 2014. Heeding this advice, on 19th July 2015, the
Plaintiff convened its Special General Body Meeting seeking approval for
the submission of building plans before the Municipal Corporation of
Greater Mumbai for the redevelopment of the suit building. At this meeting,
various important resolutions were passed in order to speed up the Layout
Plan processing. These resolutions included the decision to apply for an
IOD in the Plaintiff's name and the decision to approve the proposed
building plans, which were taken by an overwhelming majority of the
Members of the Plaintiff Society. In fact, Defendants Nos. 1 to 3 attended
the said Meeting, signed the attendance sheet for the said meeting and put a
remark 'I protest' above their signatures on the said attendance sheet as
can be seen from the Minutes, annexed and marked as Exhibit-H to the
Plaint.
25.8 On 23rd December 2015, MCGM approved the Layout Plan and
permitted the sub-division of the plot of the Original Society. On receipt of
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the approved Layout Plan, the Collector, Mumbai Suburban District on 2 nd
January 2016 granted the Order of Sub-division of the entire plot, which
was divided into the suit property belonging to the Plaintiff, and the
adjoining portion belonging to the Delite CHS Ltd. The name of the
Plaintiff was brought on the Sub-Divided Property Register Card on 31 st
March 2016.
25.9 On 4th January 2016, MCGM issued Intimation of Disapproval
(IOD) to the Plaintiff, requiring the Plaintiff to get vacant possession of all
the flats in the suit building and to demolish the building for redevelopment
as per Condition No. 53 of the IOD. Thereafter on 24th January 2016, the
Plaintiff's Members in its Special General Body Meeting finalized and
approved the said Draft Development Agreement with an overwhelming
majority of over 94%, i.e. all the Members except Defendants Nos. 1 to 4.
It is pertinent to note that Defendant Nos. 1 to 4 participated in the said
Meeting and merely sought time to study the Draft Development
Agreement, as seen from the said Minutes at pg. 187 of the Plaint.
Defendant Nos. 1 to 4 did not raise any objection or question as to the
appointment of the Developer or any of the major steps in the
redevelopment process.
25.10 The Defendant No. 7 Developer has invested significant time,
energy and efforts in achieving the major milestones in the redevelopment
KPPNair -41- NMSL 1341/2016
of the Plaintiff's property till date such as securing the Non-Agricultural
(NA) use Order on 5th February 2015, by making payment of the unpaid
arrears of Non-Agricultural tax (unpaid for more than 33 years) along with
100% penalty; securing the approval of the Layout of the suit property on
23rd December 2015; after purchasing and loading TDR to the extent of
347 sq. mtrs. on the suit property on 16th June 2014 to offset the FSI
imbalance resulting from the sub-division, which was procured at a
consideration of Rs. 28.00 Lakhs; securing the Sub-Division Order
whereby the suit property belonging to the Plaintiff was sub-divided on 2nd
January 2016; obtaining the basic IOD for construction on 4th January
2016; bringing the name of the Plaintiff onto the Property Register Card of
the Sub-Divided Property on 31st March 2016, and the same was issued on
11th April 2016.
25.11 Since 28 of the 66 Members of the Society were of the view that
it was not safe to continue their stay along with their family members in the
suit building, they vacated their respective flats and moved to transit
accommodation with a view to avoid any mishap or threat to their lives and
property. At the request of the said 28 Members, Defendant No. 7 has been
paying them transit accommodation/compensation on humanitarian
grounds. Thereafter from time to time several other Members adopted the
same course.
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25.12 In the Special General Body Meeting held on 6th March 2016,
to discuss the progress of the re-development process, the Members of the
Plaintiff passed a resolution by an overwhelming majority (of 48 out of 50
members) to initiate appropriate legal action against the non-co-operative
members of the Plaintiff who were refusing to vacate their respective flats
on or before 31st March 2016. By the time the above Suit was filed in
April, 2016, around 53 Members apprehending a threat to their life and
property, and the lives of their family members vacated their flats and
started residing outside in temporary alternate accommodation.
25.13 As late as on 11th July, 2016, 62 of the 66 Members of the
Plaintiff have signed Declarations-cum-Undertaking giving consent to the
redevelopment process and for the appointment of Defendant No.7.
25.14 From the aforesaid facts it is clear that every step/action taken
by the Society towards redevelopment process is after seeking approval of
the General Body of the Members who have given overwhelming support
to all the actions/proposals/resolutions passed at the various Meetings of
the Society held for the purpose of redevelopment of its property. Thus the
Society's conduct has throughout been transparent, and no decisions/actions
have been taken by the Society without taking its Members into confidence.
The non-co-operative Members have till date not challenged any of the
resolutions passed at the Special General Body Meetings of the Plaintiff,
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or the writing executed by them, in any court of law. 62 out of 66 Members
of the Society are supporting the redevelopment process and as late as on
11th July, 2016, all the 62 Members of the Plaintiff have signed a
Declaration-cum-Undertaking giving consent to the redevelopment process
and appointment of Defendant No.7. 53 Members of the Society fearing a
threat to their lives and property have already vacated their flats and started
residing outside in transit accommodation. During the pendency of the
present Notice of Motion as per the directions of this Court, the Plaintiff
has forwarded the drafts of the individual Permanent Alternate
Accommodation Agreements to the Defendant Nos. 1 to 6; Defendant No.
7 obtained sanction letters for the Bank Guarantee of Rs. 7.5 Crores, which
is to be handed over to the Plaintiff when Defendant No. 7 obtains vacant
possession of the suit building; and Defendant No. 7 (Developer) has
submitted his Affidavit-cum-Undertaking dated 15 th June 2016, wherein he
has inter alia committed and undertaken to this Court to fulfil all its
obligations as per the Offer Letter dated 7/3/2014 and the draft
Development Agreement approved by the Plaintiff vide its Resolution dated
24/1/2016 passed in its Special General Body Meeting, and complete the
project within the prescribed time.
26. As set out hereinabove, Defendant Nos. 1 to 4 have made
several submissions and tried to justify their conduct i.e. opposing the
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redevelopment of the suit building. Each of the submissions raised by the
Defendant Nos. 1 to 4 are set out and dealt with hereunder:
26.1 According to the Defendant Nos. 1 to 3, the Plaintiff Society has
violated the guidelines issued by the Maharashtra Government vide its
Directive under Section 79A of the MCS Act dated 3rd January, 2009 by
not calling for quotations from Project Management Consultants and the
Advocate; not calling for tenders by public notice; applying for IOD before
the execution of the development agreement and asking the Members to
vacate before execution of the development agreement. In the case of
Harsha Co-op. Housing Society Limited and others vs. Kishandas S. Rajpal
and others1 a single Judge of this Court has held that the guidelines
contained in the said Directive dated 3rd January, 2009 are not required to
be followed in cases where the steps in the redevelopment process are
approved by a majority of members of a society in its special general body
meetings. It is further held in the said Judgment that non-compliance of
these guidelines is not available as a defense to the minority non-co-
operative members, when these non-co-operative members are acting
against the wishes of the majority members of the society. Paragraphs 10
and 11 of the said Judgment are relevant and reproduced hereunder:
"10. It is argued on his behalf that by Government
Notification issued under section 79-A of the Maharashtra
1 Unreported judgment dated 8.3.2010 in Civil WP No. 10285 of 2009
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Cooperative Societies Act(the Act), a registered architect
on the panel of the Government was to be selected and the
procedure as shown there-in required to be complied which
is not done and which vitiated decision of the society.
11. The reliance upon the Government
notification is itself misplaced. When the members of the
co-operative housing society which, under law of
cooperation, decides by majority of 11:1 members that the
society premises be developed in a particular fashion by a
particular developer, it would be contrary to principals of
democracy by which the society is governed by the sole
dissenting member to interfere and require a procedure, not
required by the majority of members to be followed which
would only consume time and be counter-productive. The
Government resolution would be required to be followed by
the Society where the members are unable to come to any
decision by resolution of their own."
As submitted on behalf of the Plaintiff, all the decisions pertaining to the
redevelopment of the building of the Plaintiff Society have been approved
by an overwhelming majority of the Members of the Plaintiff in various
Special General Body Meetings since the majority of the Plaintiff's
Members believed that it was neither viable nor technically feasible to
adhere to the various terms and/or sequence stipulated in the said guidelines
KPPNair -46- NMSL 1341/2016
in a strict or rigid manner, which would have delayed and perhaps derailed
the redevelopment process.
The Members of the Plaintiff Society have in the Special General Body
Meeting held on 27th February, 2014, passed a Resolution appointing Mr.
Kiran Rokadiya of M/s. Vistar Architects as PMC and Mr. Dinesh Kumar
Mishra as its Advocate, since the Society had earlier availed the services
of both these professionals and both were well known to all the Members of
the Society. The Plaintiff Society therefore did not call for quotations from
the PMC and/or Advocates.
By a Special General Body Meeting held on 16th March, 2014, the
Members of the Society agreed to invite offer letters from the developers
who are well known to the Society and its Members and passed a
resolution authorising the Office Bearers to invite offer letters from known
and reputed developers who have a good profile and sound financial
position to redevelop the Society building; and therefore did not call for
tenders by public notice.
As regards the submission of Defendant Nos. 1 to 3 that the IOD ought to
have been applied for by the Society only after the execution of the
development agreement, as set out hereinabove, on 15 th May 2015,
pursuant to the said bifurcation Order dated 28 th January, 2014 issued by
the Deputy Registrar Cooperative Societies, Konkan Bhavan, the Plaintiff
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and the adjoining Delite CHS applied to the Collector, Mumbai Suburban
District (MSD) for the sub-division of the plot of the erstwhile Delite
Society (which was the parent society constituting the Plaintiff and Delite
CHS) for the Plaintiff and the Delite CHS, which were by then two separate
Societies. While considering the said Application for sub-division, the
Collector, Mumbai Suburban District (MSD) directed by his letter dated 6 th
June 2014 to the said Societies to obtain inter alia the Layout Plan
sanctioned by the MCGM. The Members of the Plaintiff held several
meetings between October, 2014 and April, 2015 to discuss the draft
development agreement forwarded by Defendant No.7. In the course of
these meetings, many Members of the Plaintiff, including Defendants Nos.
1 to 3, objected to the execution of the Development Agreement till the
Plaintiff's name was brought on the sub-divided Property Register Card. In
order to obtain a separate Property Register Card in the name of the
Plaintiff, it was absolutely essential to first obtain an Order for Sub-division
of the plots of the Plaintiff and the adjacent Delite CHS from the Collector,
MSD. Since the Plaintiff was required to obtain , inter alia, the sanctioned
Layout Plan for sub-division from the MCGM, the Plaintiff approached
MCGM for their approval of the Layout Plan for sub- division. At this
stage, MCGM noticed an FSI imbalance of 377 sq. mts. that would arise on
account of the proposed sub-division and informed the Plaintiff that the
KPPNair -48- NMSL 1341/2016
same would be required to be offset by loading of additional equivalent
TDR on the plot. Defendant No. 7 purchased the required TDR and loaded
the same on the said plot. Thereupon the Project Management Consultant
(PMC) of the Plaintiff advised the Plaintiff, that the Plaintiff should apply
for an IOD for the proposed building in order to ensure the speedy
processing of the Plaintiff's application for the approval of the layout plan
for sub-division by the MCGM, which the Plaintiff did. Heeding this advice
of the PMC, on 19th July 2015, the Plaintiff convened its Special General
Body Meeting seeking approval for the submission of building plans before
the Municipal Corporation of Greater Mumbai for the redevelopment of the
suit building. At this meeting, various important resolutions were passed in
order to speed up the Layout Plan processing. These resolutions included
the decision to apply for an IOD in the Plaintiff's name and the decision to
approve the proposed building plans, which Resolutions were passed by an
overwhelming majority of the Members of the Plaintiff Society. Defendant
Nos. 1 to 3 too attended the said Meeting but did not raise any specific
objection regarding the process for application of IOD. They merely
recorded a vague remark in the Attendance Sheet as "I protest". After
applying for the IOD, in pursuance of the said Resolution dated 19th July,
2015 on the PMC's advice, the Layout Plan for sub-division was approved
by the MCGM on 23rd December 2015. Within 9 days of the said approval,
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i.e. on 2nd January, 2016, the Office of Collector, Mumbai Suburban District
granted the Plaintiff's application for sub-division, which was pending
prior to June 2014. The IOD permission was received on 4 th January 2016.
The separate PR Card for the Plaintiff was received from the said Collector,
MSD on 11th April 2016. This clearly vindicates the advice of the said
PMC. It will not be out of place to mention here that the permission for
redevelopment is always applied for in the name of the owner of the
property, in this case, the Plaintiff. Even if Defendant No. 7 had applied for
sanction of plans, it would have done so in the name of the Plaintiff, under
a Power of Attorney. There is no necessity or requirement to apply for an
IOD only after entering into a Development Agreement. Again, neither the
Plaintiff nor the Defendant No. 7 had derived any additional benefit by
applying for the IOD prior to entering into the Development Agreement.
The application for IOD in the Plaintiff's name prior to execution of the
Development Agreement has not resulted in any sort of violation of legal
norms nor any injury or prejudice to the Plaintiff or its Members. The
decision necessitating the application for IOD for the proposed buildings
prior to the execution of the Development Agreement was taken by an
overwhelming majority of the Plaintiff's Members by the Resolution
passed in their Special General Body Meeting dated 19 th July 2015. It is
therefore also established that there is no misrepresentation on the part of
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the Plaintiff or Defendant No. 7 as alleged by Defendant Nos. 1 to 3.
With regard to the submission of Defendant Nos. 1 to 4, that the Members
ought to have been asked to vacate their respective flats after the execution
of the development agreement, as correctly explained by the Plaintiff
Society, the draft development agreement was already finalized and
approved by the Plaintiff in the Special General Body Meeting of the
Plaintiff's Members held on 24th January 2016. Therefore, in the Special
General Body Meeting of the Plaintiff's Members held on 6th March 2016,
it was resolved to seek and obtain vacant possession of the flats from all its
Members by 31st March 2016 and to initiate legal proceedings in case of
non-co-operative Members, to speed up the redevelopment process.
Therefore, in my view, the decisions taken by the Plaintiff Society, which
according to Defendant Nos. 1 to 4, constitutes deviations from the
guidelines, have been taken in the interest of the progress of the
redevelopment project, with full support of an overwhelming majority of
the Plaintiff's Members, as expressly permitted in the said Judgment in the
case of Harsha CHS Ltd v. Kishandas S Rajpal & ors (supra). None of the
resolutions passed by an overwhelming majority of the Plaintiff's Members
have till date been challenged by any of the four non-co-operative
Members. Therefore, in my view, Defendants Nos. 1 to 3 and/or 4, being a
minuscule minority, cannot stall the redevelopment process citing these
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guidelines, as held in the said Judgement of Harsha CHS .
26.2. Defendant Nos. 1 to 3 have submitted that the suit building is
not in dilapidated condition and have relied on 27 photographs
purportedly taken on 10th June 2016 to support their contention. The
Plaintiff Society has submitted that the photographs taken by Defendant
Nos. 1 to 3 are selective and do not represent the true and complete picture
qua the stability of the building and ought not to be relied upon. In my
view, the submission made by the Plaintiff that the suit building is indeed
in a dilapidated condition, and that only in view of certain photographs of
the building produced by Defendant Nos. 1 to 3, it cannot be held
otherwise, is established from the following:
(i) By a letter dated 11th November, 2011 addressed to the
Plaintiff, Defendant No. 1 herself had recorded that, "there has been a big
crack in my bed room overhead beams. I am seriously concerned as it may
soon fall down, if not restored immediately. I sincerely request you to take
immediate steps to fill the crack and ease my anxiety."
(ii) On or about 25th December 2013, a part of the slab in the Flat on
the 1st floor of B-Wing of the suit building collapsed and seriously injured
one minor child --Master Harsh Bhanushali, son of Mr. Hemraj Bhanushali,
a Member of the Plaintiff Society. This was communicated by the said
Member to the Managing Committee of the Plaintiff vide his letter dated
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26th December 2013. Copies of the photographs showing the injury were
also forwarded by the Member to the Society under cover of his said letter
( Annexures "E and F" to the compilation submitted by the Plaintiff at
pages 95-96).
(iii) All 66 Members, including Defendant Nos. 1 to 4 have written
individual letters to the Society dated 15th and 20th February, 2014 stating
that, "As our Society's building structural condition has deteriorated
beyond repairs, I would request you to arrange general body meeting to
take up matter for redevelopment of our Society at the earliest." (Pages 91-
94 of the Compilation).
(iv) M/s. Epicons Consultants after carrying out several tests,
including the core test, rebound hammer test, ultra sonic pulse velocity
test, half cell potentiometer test and carbonation test have in their Report
dated 18th May,2015 , inter alia concluded as follows:
"1. The distress in the RCC members is on account of
corrosion of reinforcement bars and is very critical and
alarming. Corrosion process is aggressive and spreading
fast.
2. RCC columns at all levels have severe corrosion cracks
which are serious in nature and endanger the structural
safety of the building.
3. Also, the slabs & beams are affected due to
reinforcement corrosion, which will affect the safety of the
KPPNair -53- NMSL 1341/2016
occupants due to the hazard of ceiling giving way.
4. The structure is dilapidated condition and not fit for
occupation. Considering the present condition and age of
the building option of reconstruction may be considered as
repairs are not feasible. Newly constructed building can
comply with latest Earthquake resistant design requirement
and durability aspects."
The detailed Structural Audit Report of the suit building dated 18th May,
2015 is at pages 15-87 of Part-I of the compilation submitted by the
Plaintiff. The photographs showing the dilapidated state of the building are
at pages 1 to 14 of the compilation submitted by the Plaintiff.
The allegation therefore of the Defendant Nos. 1 to 3 that the suit building
is not in a dilapidated condition cannot be accepted and is rejected. In fact
it is for this reason that 53 Members have vacated their respective flats in
the suit building even before execution of the development agreement since
they do not want themselves and/or their family members to suffer in the
event of some mishap occurring on account of the dilapidated condition of
the suit building. Therefore even the allegations made by Defendant Nos. 1
to 4 that 53 Members have vacated their respective flats for ulterior motives
and the Defendant No. 7 Developer is making ex-gratia payments towards
transit rent to them only to secure their support and votes, cannot be
accepted and is rejected.
26.3 According to Defendant Nos. 1 to 3, the Plaintiff has made a
KPPNair -54- NMSL 1341/2016
false claim in paragraph 17 at page 12 of the Plaint to the effect that, "All
members of the Plaintiff (66 members) with the exception of Defendant
Nos. 1 to 6(6 members) are accepting transit compensation from Defendant
No.7." The true position is that 13 Members of the Plaintiff have not
accepted such compensation at any time.
The above submission of Defendant Nos. 1 to 3 is incorrect. In Paragraph
16 at page 12 of the Plaint, the Plaintiff has stated that fifty-three (53) of the
Plaintiff's Members are accepting the afore-mentioned ex-gratia payments
towards transit rent and that seven (7) other Members have agreed to vacate
their respective flats. In paragraph 17 it is stated that, "The Plaintiff states
that save and except the flats occupied by Defendant Nos. 1 to 6 herein all
other flats are either vacated or agreed to be vacated by the members of the
Plaintiff Society voluntarily of their own free volition as aforesaid to
facilitate the demolition and redevelopment work of the Plaintiff Society."
Thus, Defendants Nos. 1 to 3's interpretation of the said paragraph is
erroneous, as is borne out from a bare reading of the Plaint.
26.4 According to Defendant Nos. 1 to 3, since the Structural
Engineer M/S Epicons Consultants Pvt. Ltd had been associated with
Defendant No.7 in their previous projects, the Structural Audit Report dated
18th May 2015 is unreliable.
KPPNair -55- NMSL 1341/2016
As correctly submitted by the Plaintiff, M/s. Epicons Consultants Pvt. Ltd.,
are independent structural auditors and engineers who are empaneled with
the MCGM and were appointed as structural consultant for the suit project,
by Defendant No. 7 at the request of the Plaintiff to gauge the condition of
the Plaintiff's building at the relevant time. Merely because M/s. Epicons
Consultants Pvt. Ltd. have in the past worked with Defendant No. 7 on a
different project it cannot be alleged that the Report submitted by them is
unreliable. Again, the insinuations and allegations in respect of the
unreliability of the said Report are vague and baseless and cannot be
accepted.
26.5 According to Defendant Nos. 1 to 3, the adjoining Delite
building constructed around the same time is sound and therefore this fact
disproves that the suit building is dilapidated:
Since the Plaintiff Society's building consisting of Wings A, B,
C and D and the other building of the neighbouring Delite Society are two
separate structures/buildings standing apart from each other, the
neighbouring building of Delite CHS Ltd. can have no bearing or relevance
on the condition of the suit building. The fact that the suit building was
earlier a part of the larger society which included the Delite Society's
building is equally irrelevant. In fact the Plaintiff has produced the
Minutes of the Annual General Body Meeting held on 23rd August, 2015
KPPNair -56- NMSL 1341/2016
of the Delite CHS Ltd. and the requisition letter addressed by 67 out of 102
members of the said Society dated 24th June, 2014 to show that Delite
CHS Ltd. is also undertaking redevelopment of its buildings comprising of
Wings E to H on account of its dilapidated condition. The above grievance
of Defendant Nos. 1 to 3 therefore cannot be accepted and is rejected.
26.6 According to Defendant Nos. 1 to 3, the Plaintiff has
fraudulently attempted to enforce the IOD condition in Clause 53
(demolition of the building after vacating the members) and breach of the
IOD conditions 55 and 56 (submitting consent letters/individual permanent
alternate accommodation agreements).
26.7 The Plaintiff Society has submitted that there is no violation of
the IOD conditions as alleged since 62 out of 66 Members (all except
Defendants Nos. 1 to 4 herein) have already agreed to vacate their
respective premises and given their consent to the Plaintiff in this regard.
The Plaintiff Society has further submitted that since the proposal for
redevelopment has been submitted by the Plaintiff and the IOD has been
issued in the name of the Plaintiff, there is no need to execute Consent
Letters or Individual Agreements as envisaged in condition nos. 55 and 56
of the IOD between the said Members and Defendant Nos. 7 at this stage
for the purposes of demolition. It is submitted that the Plaintiff's advocate
has already forwarded individual permanent alternate accommodation
KPPNair -57- NMSL 1341/2016
agreement to Defendant Nos. 1 to 4. In any event, the Plaintiff Society and
the developer has now given the following undertakings which are
accepted by the Court:
(i) That the development agreement between the Plaintiff Society and
the Defendant No. 7 developer shall be executed within 25 days from the date of
this order;
(ii) A provisional tripartite agreement for permanent alternate
accommodation shall be executed between the individual members of the Society,
the Society and the developer, before the members vacate their respective
premises and before carrying out any demolition.
(iii) That a final tripartite agreement in identical terms of the provisional
agreement shall be executed on receipt of the full commencement certificate.
(iv) The Plaintiff Society and Defendant No. 7 developer shall abide by
the terms of the IOD.
26.8 According to Defendant Nos. 1 to 3, the Plaintiff has breached
Clauses 3, 5, 7, 12, 17 and 18 of the Letter of Intent ('LoI').
As regards Clause 3 of the LoI, dealing with the payment of hardship
compensation, the Plaintiff has correctly pointed out that there is no
difference in the commercial terms of payment towards hardship
compensation in the LOI and the Development Agreement. The
KPPNair -58- NMSL 1341/2016
modification in the timeline for making payments was necessitated on
account of the change in circumstances (i.e., the exigent vacating of 53 flats
and the non-execution of the Development Agreement before the issuance
of the IOD caused on account of the Property Register Card issue) and the
same has been duly approved by an overwhelming majority of the
Plaintiff's Members in the Special General Body Meeting held on 24 th
January 2016, in which Meeting, Defendants Nos. 1 to 4 also participated
and merely sought time to study the Draft Development Agreement .
With respect to the allegation regarding violation of Clauses 5 and 12 of the
LOI dealing with loading of TDR, Defendant No. 7 has committed that they
shall purchase TDR in the name of the Plaintiff after the issuance of the
commencement certificate for the plinth of the proposed building and
before obtaining the full commencement certificate, in one stroke, and load
the same on the suit property when the entire 2.4975 FSI will be utilized.
As correctly submitted by the Plaintiff, it is in fact in the interest of
Defendant No. 7 to ensure that TDR is loaded for the redevelopment since
Defendant No. 7 would not be in a position to construct the free-sale
component without the same. In fact, Defendant No. 7 has undertaken
before this Court in the Consent Terms dated 8th June, 2016 executed
between the Plaintiff and Defendant Nos. 5 and 6 to load the full TDR at
one stroke immediately after obtaining the commencement certificate from
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MCGM upto Plinth level.
With regard to Clause 7 of the LOI dealing with the Bank Guarantee of Rs.
7.5 crores to be given by Defendant No.7, the said Bank Guarantee has
already been sanctioned by Kotak Mahindra Bank on 29th April, 2016, a
copy of which is annexed at pages 117 to 125 of the Compilation
submitted by the Plaintiff. Defendant No. 7 has committed to the Plaintiff
that they shall handover the Bank Guarantee to the Plaintiff at the time of
handing over of vacant possession of all the flats in the Plaintiff's building,
in accordance with Clause 6(n) of the approved Draft Development
Agreement .
With regard to Clauses 17 and 18 of the LOI dealing with the non-
execution of the development agreement, as pointed out hereinabove,
several of the Plaintiff's Members including Defendant No. 1 insisted that
the Plaintiff's name must be brought on the Property Register Card of the
sub-divided suit property prior to the execution of the Development
Agreement with Defendant No.7. The name of the Plaintiff was brought on
the said Property Register Card on 31st March 2016. The decisions taken
by the overwhelming majority of the Plaintiff's Members in the various
Special General Body Meetings of the Plaintiff are binding on all the
Members, including Defendant Nos. 1 to 4. Defendant No. 7 has assured
the Plaintiff that it would bear the necessary expenses such as stamp duty
KPPNair -60- NMSL 1341/2016
and registration charges at the time of execution of the Development
Agreement.
In view thereof, the above submission qua non-compliance of the above
LOI by the Plaintiff raised by Defendant Nos. 1 to 3 are in my view
untenable and cannot be accepted. It is pertinent to note that the Letter of
Intent only provided guidelines for the implementation of the
redevelopment process and was not intended to be anything more, as is
apparent from Clause 17 of the LOI which states that nothing shall be
binding on the parties till such time the detailed development agreement is
executed between the parties. Again, there has been no change in the
commercial terms of redevelopment and the only adjustments and
alterations have been in respect of timelines, the same being necessitated by
the exigent and unavoidable circumstances of the redevelopment.
26.9 According to Defendant Nos. 1 to 3 the non-vacating of the flats
is not the only reason behind the Plaintiff not being able to start demolition.
It is submitted that the demolition work has been stalled due to the issuance
of a letter dated 30th March, 2016 by MCGM whereby the issuance of
plinth CC has been halted.
According to the Plaintiff, there has been no "halting'' or stoppage of plinth
CC. In fact there is no question of issuing plinth CC at this stage when the
suit building is yet to be demolished. As regards the letter dated 30 th March,
KPPNair -61- NMSL 1341/2016
2016, relied upon by Defendant Nos. 1 to 3, the Plaintiff has submitted as
follows:
(i) On 3rd February 2016, MCGM addressed a letter to the Plaintiff
calling upon the Plaintiff to submit its response to the various complaints
received from Defendant Nos. 1 to 3.
(ii) The Plaintiff duly responded to the said letter vide its letter
dated 6th March 2016.
(iii) MCGM by its letter dated 16th March 2016 addressed to
Defendant No.3 expressed its satisfaction that the necessary documents
enquired about by Defendant No. 3 have been provided by the Plaintiff
Society and that MCGM would issue the Commencement Certificate on the
usual terms upon compliance of the conditions of the IOD by the Plaintiff.
(iv) MCGM addressed a second letter dated 30th March 2016 to the
Plaintiff seeking clarifications regarding few alleged issues raised by
Defendant No. 1.
(v) The Plaintiff, by their letter dated 16 th April 2016 (wrongly
typed as 16th "March" 2016) which has been received by MCGM on 18 th
April 2016, duly responded to the said queries. MCGM has thereafter not
raised any further query in this regard.
In view of the above, the submission by Defendant Nos. 1 to 3 that non
vacating of the flats is not the only reason behind the Plaintiff not being
KPPNair -62- NMSL 1341/2016
able to start demolition and that MCGM by its letter dated 30th March,
2016 has halted the issuance of the plinth CC cannot be accepted and is
rejected.
26.10 According to Defendant Nos. 1 to 3, the carpet area of their
flats is much higher than what is stated by the Plaintiff Society in the Plaint,
as per their Licensed Surveyor Report annexed and marked as Exhibit N at
page 359 to their detailed Affidavit dated 6th June 2016.
It is submitted on behalf of the Plaintiff that the carpet area of the flat of
Defendants Nos. 1 to 3 and all other Members have been correctly
measured by the Plaintiff. The same is established by the following:
(i) The source of data regarding the carpet area of the existing flats
in the Plaintiff building is the duly certified copy of the Occupation
Certificate (OC) Plan No. CE/3895/BPES/AN dated 15 February 1983 of
the Plaintiff's building duly sanctioned by MCGM. This information and
the copies of the said sanctioned OC plan were provided to Defendant No.1
by the Plaintiff vide its letter dated 18th February 2016. The aggregate area
of all the existing flats in the Plaintiff's building is calculated exactly as per
the said sanctioned and approved OC Plan dated 15 February 1983, and
there is no misrepresentation, as alleged by Defendant Nos. 1 to 3.
(ii) The dispute in respect of area discrepancy has been raised by
Defendant Nos. 1 and 3 in respect of their respective flats, viz.A-102 and
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A-101, both of which are located on the 1 st floor of Wing A of the suit
building. The sanctioned OC plan clearly demonstrates that all the flats in
Wing A (except Ground floor) are equal and identical in terms of their
carpet area and they admeasure 428 sq. ft. Enlarged versions of the extract
of the sanctioned OC drawing showing typical first floor plan and flats
bearing A-102 and A-101 are annexed at Annexure "O-1 and O-2"
(respectively) to the Compilation tendered along with the Affidavit in
Rejoinder dated 12th July 2016. The photograph showing flat bearing no. A-
102 is annexed at Annexure "O-3 and O-4" to the Compilation tendered
along with the Affidavit in Rejoinder dated 12th July 2016. A comparative
reading of the said OC plan and the said photographs of the said flat
bearing no. A-102 clearly shows that Defendant No.1 has extended the
balcony in the living area and kitchen area beyond the sanctioned OC plan.
This is apparent when these flats are compared with the flats on the 2nd floor
of Wing A.
(iii) The registered Flat Purchase Agreement dated 23rd May 1995 in
respect of Flat bearing no. A-101 belonging to Defendant No.3, shows that
the carpet area of the said Flat bearing no. A-101 as 410 sq.ft. only.
(iv) The Plaintiff has produced a superimposed drawing of the
sanctioned OC plans on the plan in respect of Flats Nos. A-101 and A-102
based on the dimensions as certified by Defendants Nos. 1 to 3's Licensed
KPPNair -64- NMSL 1341/2016
Surveyor Mr. Jatin Bhuta to demonstrate the encroachment on the plan.
(v) The respective carpet areas of the flats of the Plaintiff's
Members are shown in Annexure K to the approved draft development
agreement. From the said annexure it is clear that all the flats in Wing A of
the Plaintiff's building (except the flats on the Ground Floor) admeasured
428 sq. feet at the time when the building was constructed and the
occupation certificate was issued in 1983. This is apparent from the
certified copy of the sanctioned OC plan. However, at the time of selling
the flats, the promoters sold certain rooms in the flats in A-wing to the
buyers of the adjoining flats in A-wing with the consent of both the buyers
and as a result one flat became larger and the other one smaller. For
example, Flat No. A/203 and A/204 should both admeasure 428 sq.ft.
However, Flat No. A/203 admeasures 553 sq. ft. and Flat No. A/204
admeasures 303 sq. ft. The aggregate of these two flats is 856 sq. ft., which
corresponds to 428 x 2. This explains the differences in the areas of
certain flats in A Wing at present when compared with the areas shown in
the sanctioned OC plan. However, the average of the aggregate areas of
such pairs of neighbouring flats is the area as per the sanctioned OC plan,
viz. 428 sq. ft. The additional areas given to the Plaintiff's Members in the
redevelopment are calculated on the present area occupied by these
Members and a tabular representation of these areas is annexed as
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Annexure "S" to the Compilation tendered along with the Affidavit in
Rejoinder dated 12th July 2016.
(vi) The Reports submitted by the Project Management Consultant
(PMC) dated 16th March 2014 and by M/s. Ashishkumar Vishwakarma, an
independent architect also certify the areas as per the said sanctioned OC
plan. Copies of these Reports are annexed at Annexure "T-1" and "T-2" to
the Compilation tendered along with the Affidavit in Rejoinder dated 12 th
July 2016.
(vii) The overwhelming majority of 63 out of 66 Members (including
Defendant No.4) have confirmed that the existing area of their respective
flats is exactly as per the said sanctioned OC plan. It is submitted by the
Plaintiff that according to Defendant Nos 1 to 3, 90% of the Plaintiff's
Members are in the real-estate business and are deemed to have a better
understanding of such matters. Thus, there is no reason to doubt the
authenticity of the said plan. Copy of the said letter by Defendant No. 4
confirming the area of his respective flat is annexed at Annexure "U" to the
Compilation tendered along with the Affidavit in Rejoinder dated 12 th July
2016.
(viii) In so far as Flat No. 002 in the A-Wing is concerned, Defendant
No. 1 has raised the dispute regarding the correctness of the carpet area for
the first time in Paragraph 11(xv.) at pg. 43 of her Rejoinder in response to
KPPNair -66- NMSL 1341/2016
the Written Argument of the Plaintiff dated 26 th July 2016. She contends
that her Flat No. A-002 admeasures 356.60 sq. ft. She has arrived at this
area by assuming that Flat No. A/102 which is directly above her flat
admeasures 475.39 sq. ft., and she deducts an area equivalent to 118.39 sq.
ft., being the area of one bedroom as per her surveyor's calculations, from
the said 475.39 sq. ft. and arrives at the said figure of 356.60 sq. ft. The
Plaintiff has correctly calculated the area of the said Flat No. A/002 as 264
sq. feet exactly as per the sanctioned OC Plan. The Plaintiff has added 23
sq. feet extra area, being 60% of the 'Otla' area (of 37sq. ft.) to this area,
resulting in the total area of 287 sq. feet. The said method of calculation,
i.e. calculating the carpet area as per the sanctioned OC Plan and adding
60% of the Otla area, has been consistently applied to all the ground floor
flats of the Plaintiff -Society.
(ix) The areas of all the flats were approved by the Plaintiff in its
Special General Body Meeting dated 24th January 2016, wherein the Draft
Development Agreement with the annexed area calculations at Annexure
"K" was approved by an overwhelming majority of the Plaintiff's
Members.
In view of the above explanation/submission of the Plaintiff and further in
view of the fact that none of the Defendants have challenged the said
Resolution passed in the Special General Body Meeting dated 24 th January
KPPNair -67- NMSL 1341/2016
2016 till date, the dispute raised by Defendants Nos. 1 to 3 qua the alleged
discrepancies in the carpet area of the flats occupied by them is baseless
and untenable and cannot be accepted.
26.11 Defendants Nos. 1 to 3 have submitted that an aggregate of
1,188 sq. feet of additional area is provided to few select Members
in the manner set out hereinbelow:
Sr. Additional No. Of members Reason
No. Area (in sq ft.)
1. 399 19 Otla /passage area
2. 390 1 [owner of Flat No. Terrace
D/305]
3. 399 1 [Defendant No. 6 as Terrace
owner of Flat No.
B/205]
Total: 1188 sq.ft. 21 members
KPPNair -68- NMSL 1341/2016
It is submitted on behalf of the Plaintiff that the column of 'additional area'
as per Annexure "K" of the draft Development Agreement (approved by the
Plaintiff-Society vide its Resolution passed in the Special General Body
Meeting dated 24th January 2016) is based on the following:
(a) All the ground floor Members of A, B and C Wings are entitled to
receive 60% of the 37 square foot area of Otla, that is 23 square feet which
has not been marked on the original OC plan. It is pertinent to note that
Defendant No. 1, having Flat No. 002 in the A Wing, has also been given
this benefit of 23 sq. ft.
(b) Members of the B wing having flat Nos. 003/103/203/303 and 403; and
D Wing having flats nos. 103/203/303 are entitled to receive an additional
10 square feet area, being 60% of the 16 sq. ft. area of the portion of the
passage which actually forms part of these flats. This area has been agreed
by all the Members of the Plaintiff Society. In fact, the area of each
Member is mentioned in the draft development agreement and is not
objected to by a single member save and except Defendant Nos.1 to 3.
In my view, the Plaintiff has therefore correctly justified as to why an
additional area of 399 sq.ft. (in aggregate) is given to various Members of
the Plaintiff, including Defendant No. 1 herein.
Again, the additional area of 399 square feet given to Defendant No. 6 (as
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owner of Flat No. B/205) and 390 sq.ft. to the Owner of Flat D/305 is due
to the adjoining terraces owned by them. It is submitted on behalf of the
Plaintiff Society that Defendant No. 1 is well aware of this fact and had
raised a query in the Special General Body Meeting held on 24 th January,
2016 viz. "on what basis and rules the 3 new tenements having adjoining
terrace are being allotted to 3 members." The Chairman of the Society
had in the said Meeting itself given an explanation that 'since, the terrace
areas were sold to three members by the original builder as reflected in
their original agreements and they are in possession of the same, the
Plaintiff Society with the consent of the majority of the members had
decided to create and allot the terraces of the same size for the 3 members.'
No member in the said Meeting or thereafter has raised an objection with
regard to the same.
Again, a set out hereinabove the areas of all the flats were approved by the
Plaintiff in its Special General Body Meeting dated 24 th January, 2016,
wherein the draft development agreement with the annexed area
calculations at Annexure-K (at page 189 of the Plaint) was approved by an
overwhelming majority of the Plaintiff's Members and none of the
Defendants have challenged the said Resolution passed in the Special
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General Body Meeting dated 24th January, 2016 till date.
In view of the above facts placed and explanation given by the Plaintiff
Society, the allegation of Defendant Nos. 1 to 3 that few select Members
are given extra area therefore cannot be accepted and is rejected.
26.12 It is also alleged by Defendant Nos. 1 to 3 that the allotment of
flats by the Plaintiff has been done arbitrarily and is contrary to the general
policy laid down in the Resolution dated 19 th July, 2015. It is submitted
that as per the said Resolution, the allotment of flats in the new building
would be done floor-wise, that is from the upper to the lower floors ['Top
to bottom' policy]. It is submitted by them that as per this Policy, they
should have been allotted flats on the 5th and 6th floors. However, they have
been allotted flats on the 1st and 2nd floor. It is submitted that this
discrimination is meted out to them because they are opposing the
redevelopment process.
It is submitted by the Plaintiff that the allotment of new flats in the
proposed building has been done by the Plaintiff and shown in Annexure
"O" to the draft development agreement which has been approved by an
overwhelming majority of the Plaintiff's Members in the Resolution passed
in their Special General Body Meeting held on 24 th January 2016. The
Plaintiff has pointed out that in fact several other Members of the Society
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having flats on the ground and first floor have been allotted new flats on
the lower floors in the proposed building (as opposed to the higher 5 th, 6th
and 7th floors) since the flats on the upper floors were allotted to other
Members of the Plaintiff as per the said Policy ['Top to bottom' policy].
Some of these cases are tabulated as under:
Sr. No Name of the member Current Flat No. Proposed
Flat No.
1 Santosh Singh A/001 A/101
2 Vijay Kokre A/204 B/302
3 Mehul Shah (Defendant No.3) A/102 C/201
4. Lalji K. Patel B/105 B/201
5. Narendra Patel B/202 B/301
6. Meghji Ramjiyani D/103 B/102
The Plaintiff has also correctly pointed out that the allegation that the
Plaintiff has discriminated against Defendants Nos. 1 to 3 because they
have been obstructing the redevelopment process is false and untenable,
since Defendant No. 4, who has also been a non-co-operative member, has
been allotted a new Flat being No. C/701 in lieu of his existing Flat No.
A/302, which shows that there is no discrimination practiced against the
non-co-operative members by virtue of the present litigation.
The Plaintiff has further explained that Defendant Nos. 1 and 2 have been
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allotted flats on the 1st and 2nd floor on account of the factors mentioned
hereinbelow:
(a) Defendants Nos.1 and 2 had orally submitted in various
meetings that they would not purchase or let go even 1 square foot area and
wanted their flats to be exactly having 45% additional area. Keeping their
request in mind, the Plaintiff requested its Architect to design their flats to
be exact with the plan in order to avoid variation to the extent of even 1
square foot in area.
(b) This is evident from Annexure K-1 annexed to the plaint at page
190 which inter-alia shows that Defendant No.1 is getting 4 square feet
less and Defendant No.2 being from the same family is getting 4 square feet
extra, thereby causing no variation. As seen from Column No.8 of the same
table, Defendant No.1 is the only Member whose flat size is 412 square feet
and is different from all other flats which are identical to each other in their
respective wings.
(c) Due to the aforesaid constraint of having to design a flat for
Defendant No.1 admeasuring 412 square feet, the Plaintiff, on the direction
of MCGM, had to take a special concession for the same and had to design
the said flat on the 1st floor of the wing with cross beams in the duct which
is created so as to ensure that there will be no encroachment in future.
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Hence, on request of Defendant No. 1 and adhering to the aforesaid
technical constraint, the said flat could only be made on the 1 st floor and
correspondingly, Defendant No. 2, being part of the same family as
Defendant No. 1, was allotted the 2nd floor flat above Defendant No.1. It is
submitted that these facts were made abundantly clear to Defendants Nos. 1
and 2, which have been conveniently suppressed by them from this Court.
In view of the above explanation of the Plaintiff, in my view, it cannot be
said that the flats allotted by the Plaintiff to Defendant Nos. 1 to 3 are
'arbitrary' and/or that they have been discriminated against because they
have been obstructing the redevelopment process.
26.13 Defendant Nos. 1 to 3 have alleged that the selection of Defendant
No. 7 Developer was stage managed; its appointment was suppressed; the
tendering process was not followed; there is no Certificate showing that
Defendant No. 7 is a registered partnership firm; Defendant No. 7 has no
experience in redevelopment; it has not disclosed any information qua the
professionals appointed by it, Defendant No. 7 has not produced its Income
Tax Returns; Defendant No. 7 is only an investor and actually one of the
Members Shri Tulsibhai Patel is carrying on all the redevelopment process;
and that the Defendant No. 7 is not a necessary party to the Suit.
Defendants Nos. 1 to 3 have alleged that two other offers received, apart
from the offer of Defendant No.7, are the offers from: (i) Vinayak
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Constructions and (ii) Sai Ram Developers. Both these Firms belong to the
sons of the current Chairman of the Plaintiff Society. It is submitted that
therefore the entire process of appointing the Defendant No. 7 was stage
managed by giving other bids which were non- existent or which were mere
decoy so that the Members are made to believe that the Defendant No. 7
had allegedly given the "best offer".
The above allegation made by Defendant Nos. 1 to 3 is refuted by the
Plaintiff Society. As set out hereinabove, at the Special General Body
Meeting of the Plaintiff's Members held on 16 th March, 2014, all the 54
Members present and voting, unanimously resolved not to opt for issuing
tenders and instead decided to invite offers for redevelopment from reputed
and known developers. Defendant Nos. 1 to 3 who were present at the said
Meeting did not object to this procedure. Again as submitted by the
Plaintiff Society, at the Special General Body Meeting of the Plaintiff
Society held on 13th April 2014, from a comparative analysis of the offers
received by the Plaintiff from the three bidders, the Members passed a
Resolution by an overwhelming majority selecting Defendant No. 7 as the
Developer since his offer was the best offer according to a majority of the
Members. The Defendant Nos. 1 to 4 were present at the said Special
General Body Meeting. The queries raised by Defendant Nos. 1 and 2 at
the said Meeting were also responded to. The Defendant Nos. 1 to 4 or
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any Member of the Plaintiff Society have till date not challenged the said
Resolution. In fact, the said Resolution dated 13 th April, 2014 has been
substantially acted upon, and both the Plaintiff and the Defendant No. 7
have taken substantial steps for the redevelopment project based on the
said Resolution dated 13th April 2014 and have spent approximately eight
crores on the project. In fact, several Resolutions have been passed
subsequently in furtherance of the said Resolution dated 13th April 2014
pertaining to the redevelopment process, in successive Special General
Body Meetings in which Defendant Nos. 1 to 3 were present and have been
a party to the discussions and deliberations regarding the redevelopment
process. Thus, the challenge to the selection of Defendant No. 7 and the
Resolution dated 13th April 2014 is purely in the nature of an afterthought,
which ought not to be countenanced at this stage.
Defendant Nos.1 to 3 have disputed that Defendant No.7 has already
incurred an expense of Rs. 8 Crores/- on the project. According to them,
Defendant No. 7 and the Plaintiff Society have failed to spend any amount
towards ensuring transparency by video recording the General Body
Meeting, building a proper wall, recruiting a watchman, installing a
CCTV camera, etc. all of which is required to ensure the safety and security
of the Members. I see no substance in this submission since Defendant No.
7 have not only set out in paragraph 3 (d) (9) of its Affidavit-in-Reply dated
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29th April 2016 the expenditure of Rs. 7.34 crores incurred upto 16 th April,
2016, but have also produced the Certificate of its Chartered Accountant
certifying the total expenditure of Rs. 7.34 crores incurred by it on the
redevelopment process. As correctly submitted by the Plaintiff, since the
Members of the Society have already decided to redevelop the Plaintiff
Society building, it was not deemed prudent to incur expenses such as
installation of CCTV cameras, etc. to enhance safety and security or for
transparency. Defendant No.7 in fact has already committed to provide
CCTV Cameras, Intercom System and other facilities in the new building
for enhanced safety and security of all Members, as set out in the List of
Amenities annexed at Annexure "X-3" at page No. 178 of the Compilation
tendered along with the Affidavit in Rejoinder dated 12th July 2016.
I also see no substance in the contentions raised by Defendant Nos. 1 to 3
that Defendant No. 7 has not provided the Partnership Registration
Certificate as it is not an experienced Developer and has also not provided
the requisite information to the Members of the Plaintiff Society.
Defendant No. 7 has produced the Certificate of Registration issued by the
Registrar of Firms, and the same is annexed at Annexure-Y-2 (page 182) to
the compilation tendered along with the Affidavit in Rejoinder dated 12th
July 2016. Defendant No. 7 has also pointed out that it has vast experience
in real estate development and has single-handedly developed a huge
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residential complex of two buildings with 19 stories known as "Lords" in
Bhandup (West), Mumbai. It is submitted that Defendant No.7 was able to
accomplish this project within 731 days, a feat which has been commended
and noted in the Limca Book of Records, a copy whereof is annexed at
Annexure "Y-3"(Page 183) to the Compilation tendered along with the
Affidavit in Rejoinder dated 12th July 2016.
As regards the allegation that Defendant No. 7 has failed to disclose the
name and address of the professionals appointed by Defendant No. 7, and
has also not disclosed its Income Tax Returns, the Plaintiff has correctly
pointed out that the Structural Engineer being M/S Epicons Consultants is
known to all the Plaintiff's Members, including Defendants Nos. 1 to 3. As
far as the civil engineer, supervisors, licensed plumber, painter, hardware
suppliers etc. are concerned, they are yet to be appointed, since the
construction work in the project is yet to commence. Defendant No. 1 had
made enquiries vide her e-mail dated 7 th February, 2016 qua the Income
Tax Returns of Defendant No.3. The Plaintiff vide its letter dated 18 th
February, 2016 had already clarified that the Income Tax papers were
provided by the Defendant No.7 and kept in the Plaintiff's Society Office
for inspection. (Annexure "N" at pg. 131 to 137 of the Compilation
tendered along with the Affidavit in Rejoinder dated 12th July 2016).
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Defendants Nos. 1 to 3 have also alleged that one Tulsibhai Patel, one of
the Members of the Plaintiff is the one carrying out the redevelopment
process and Defendant No.7 is only an investor. It is further alleged that
Shri Tulsibhai Patel has incurred severe losses and is attempting to profit
from the Plaintiff Society's redevelopment in order to cover his business
losses. The Plaintiff has denied and disputed the said allegations and has
correctly submitted that the allegations made by Defendant Nos. 1 to 3 are
vague and devoid of any particulars. As stated earlier, it is the General
Body of the Plaintiff Society which has at its Meeting held on 13 th April,
2014, by a Resolution passed in presence of the representative of the
Deputy Registrar of Societies appointed Defendant No. 7 as the Developer,
which Meeting was attended by Defendant Nos. 1 to 4 and though
Defendant Nos. 1 and 2 have not signed the Attendance Sheet, they have
at the said Meeting raised queries regarding the redevelopment process,
which queries were answered by the office-bearers of the Plaintiff. It is also
relevant to note that the Defendant No.4 himself had proposed the name of
the Defendant No.7 as the developer for redevelopment of building of the
Plaintiff Society. As repeatedly stated herein, the Resolution dated 13 th
April, 2014 appointing Defendant No. 7 as the Developer, is in the last 3
years not challenged by any Member including Defendant Nos. 1 to 3.
26.14 As set out in paragraph 20 above, Defendant Nos. 1 to 4 have
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submitted that the partners of Defendant No. 7 are having close dealings
with Mr. Tulsi Patel and their Companies and partnership firms are
financially not sound and therefore they will not be able to complete the
project. The submissions of Defendant Nos. 1 to 4 have been responded to
by Mr. Parikshit Niglani, as set out in paragraph 20 above. I am not in
agreement with the submissions advanced by Defendant Nos. 1 to 4.
Defendant No. 1 has till date spent about Rs. 8 crores on the project. In
addition to that, Defendant No. 7 has paid several crores to the members
who have vacated their dilapidated tenements/flats towards compensation
for temporary alternate accommodation. Defendant No. 7 has produced a
letter dated 29th April, 2016, from Kotak Mahindra Bank sanctioning a
Bank Guarantee of Rs. 7.5 crores which Bank Guarantee, as undertaken by
Defendant No. 7 in the consent terms dated 15th June, 2016, shall be
handed over to the Plaintiff when Defendant No. 7 obtains vacant
possession of the suit building. In fact, 62 out of 66 members have, as
recently as on 11th July, 2016, signed a declaration-cum-undertaking
giving consent to the redevelopment process and for the appointment of
Defendant No. 7 as the developer which shows that each and every member
of the Society except the four non-co-operative members have full faith
and trust in the Defendant No. 7 and the promises made by him. As set out
hereinabove, Defendant Nos. 1 to 4 have submitted that they are not against
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redevelopment in principle. However, their main concern is that Defendant
No. 7 is not financially equipped to carry out the redevelopment as agreed
and therefore he should be asked to secure them by depositing the value of
their flats in Court. If such a condition i.e. to deposit the value of the flats
of all the members/tenants in Court is imposed on the developers who
undertake the redevelopment projects, not a single developer would come
forward to undertake any redevelopment project and the redevelopment
work which is required to be carried out with regard to the buildings which
are in dilapidated condition will completely come to a stand-still.
However, the developer gave an offer to purchase the flats of the non-co-
operative members at the ready reckoner rate to enable them to buy flats
elsewhere. Defendant No. 4 submitted that the developer will be selling
their free sale flats at Rs. 21,000/- per sq.ft. in the present project but is
offering only the ready reckoner rate i.e. Rs. 9,000/- per sq.ft. to the non-
co-operative members. The developer therefore made a with prejudice offer
to purchase the existing flats of the non-co-operative members at the rate of
Rs. 21,000/- per sq.ft. However, the non-co-operative members who insist
that Defendant No. 7 is not financially sound to complete the project have
refused to accept the offer of Defendant No. 7 thereby making it clear that
their so-called concern that the developer will not complete the project due
to want of funds, completely lacks bona fides.
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As regards the allegation that Defendant No. 7 is not a necessary
party to the present Suit, the Plaintiff has again correctly submitted that
Defendant No. 7 has been made a party to the present Suit as the Plaintiff
Society has appointed Defendant No. 7 as the Developer and ultimately it is
the Plaintiff's prerogative to implead parties being dominus litus.
26.15 Defendant Nos. 1 to 3 have alleged that one Mr. Tulsi called
their licensed surveyor, Mr. Jatin Bhutta, and forced him to prepare another
report as per the Occupation Certificate of MCGM.
It is explained on behalf of the Plaintiff that it was the Plaintiff who had in
an effort to arrive at an amicable solution requested Mr. Bhutta to calculate
and certify the area of the flats in A Wing in accordance with the
sanctioned OC Plan. However, Mr. Bhutta recused himself on account of
the objections raised by Defendant No. 1 and did not prepare another plan.
26.16 Defendant Nos. 1 to 3 have alleged that as per the information
received by them in reply to their RTI by MCGM, MCGM File containing
the Occupation Certificate is missing in the MCGM records. The Plaintiff
has submitted that the Plaintiff is not aware about the MCGM File
containing the Occupation Certificate being missing and in any event the
Plaintiff is not in any manner liable or responsible for the same.
26.17 Defendant Nos. 1 to 3 have submitted that Defendant No. 7's
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decision to execute individual permanent alternate accommodation
agreements after CC is in violation of clause 56 of IOD and the Plaintiff
ought not to support it.
In the Special General Body Meeting of the Society held on 24th January,
2016, it was resolved as under:
"It is discussed, decided and resolved to comply with the terms
and conditions of the Intimation of Disapproval dated 14th
January, 2016, after execution and registration of the
Development Agreement as early as possible".
As set out hereinabove, the Plaintiff Society and the Defendant No.7 have
inter alia given the following undertakings to this Court:
(i) That the development agreement between the Plaintiff Society and the
Defendant No. 7 developer shall be executed within 25 days from the date of this
order;
(ii) A provisional tripartite agreement for permanent alternate
accommodation shall be executed between the individual members of the Society,
the Society and the developer before the members vacate their respective
premises and before carrying out any demolition.
(iii) That a final tripartite agreement in identical terms of the provisional
agreement shall be executed on receipt of the full commencement certificate.
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(iv) The Plaintiff Society and Defendant No. 7 developer shall abide by
the terms of the IOD.
The above undertakings are accepted by the Court and the same takes care
of the concerns expressed by Defendant Nos. 1 to 4.
26.18 Defendant Nos. 1 to 3 have submitted that the Draft
Development Agreement is lopsided on account of the Plaintiff being
awarded the PMC and the Advocate for the Plaintiff Society being biased
towards Defendant No. 7. In support of this contention, Defendant Nos. 1 to
3 have contended that the Draft Development Agreement does not have a
termination clause and did not include the list of amenities finalized in the
Special General Body Meeting of 4th February,2016, for which the Minutes
have also not been provided. Defendant Nos. 1 to 3 have also contended
that no relief be granted to the Plaintiff with regard to the execution of the
Draft Development Agreement annexed to the Plaint since suggestions of
Defendant Nos. 1 to 3 have not been taken into consideration.
The allegations and insinuations against the Plaintiff, Defendant No.7 and
the professionals involved in the redevelopment project are, as correctly
submitted by the Plaintiff, unsubstantiated and unfair. The appointment of
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the PMC was pursuant to a unanimous Resolution passed by the Plaintiff
Society in their Special General Body Meeting dated 27 th February, 2014.
The allegation that the development agreement is lop sided also cannot be
accepted, since as submitted by the Defendant Nos. 1 to 3 themselves, a
vast majority of the Plaintiff's Members are engaged in the business of real
estate development and allied activities. From the Minutes of the Meetings,
it is clear that the Members have discussed and considered the various
issues involved in the present redevelopment project before approving the
various steps involved in the process, including finalization of the terms of
the Draft Development Agreement. It is thus inconceivable that the
Plaintiff's Members would have approved the terms of the development
agreement if the same were lop sided.
As regards the reference made to the Meeting dated 4 th February, 2016 by
Defendant Nos. 1 to 3, according to the Plaintiff, the same was an
informal meeting between some of the Members of the Plaintiff and the
representatives of Defendant No. 7 to discuss certain issues in respect of the
amenities committed to be provided by Defendant No.7. The amenities
provided by Defendant No. 7 are in accordance with its Offer Letter dated
22nd March, 2014 (Annexure X-3 at pages 179-179 of the compilation filed
and tendered along with the Affidavit in Rejoinder dated 12 th July, 2016).
This List of Amenities has been duly approved by an overwhelming
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majority of the Plaintiff's Members in the Special General Body Meeting
dated 24th January, 2016 at the time of approving the Draft Development
Agreement. It is also stated on behalf of Defendant No.7 that the amenities
provided to the Plaintiff's Members shall be identical with those provided
to purchasers of the premises in the free sale area.
26.19 According to Defendant Nos. 1 to 3, Advocate Mr. Rajendra
Mishra has no authority to file the present Suit since there is no Resolution
passed authorizing him to file the present Suit, nor has the Plaintiff Society
passed any resolution to file any case against Defendant No.7, and hence
the Suit against Defendant No.7 cannot be entertained.
The Plaintiff has correctly submitted that the objection taken by Defendant
Nos. 1 to 3 regarding the want of authority to institute the present Suit is
completely misconceived and unsustainable, since a significant majority
of the Members of the Plaintiff vide their Special General Body Meeting
Resolution dated 6th March 2016 have decided to initiate the present action
against the non-cooperating members, including Defendant Nos.1 to 3, and
have authorised the Managing Committee to take necessary steps for the
said purpose. The Managing Committee of the Plaintiff has engaged the
services of Advocate Mr. Rajendra Mishra to represent the Plaintiff in the
present proceedings. Thus, the present Suit has been instituted in
accordance with the mandate of the majority of the Plaintiff's Members.
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26.20 Defendant Nos. 1 to 3 have stated that they have not received
the share certificates in respect of their respective flats and that an attempt
was made by some persons to issue fabricated share certificates, and in this
regard there is some police complaint which is pending. It is also alleged
that therefore there is an ambiguity in respect of the status of Defendant
Nos. 1 to 3 as Members of the Plaintiff.
The Plaintiff has explained that there was no fraud or fabrication in printing
the share certificates as alleged or otherwise. In fact, the Plaintiff had
printed new share certificates to be issued to its Members [in pursuance of
the bifurcation of the Delite CHS Ltd.] in October 2015. However, the same
were not issued on account of certain typographical mistakes which had
crept in during their preparation and printing process. The Members of the
Plaintiff therefore decided sometime in November 2015 and again in
January 2016 that the share certificates would be issued only after the
Plaintiff's name is brought on the sub-divided Property Register Card of the
said property so as to incorporate the new CTS Number. Since the sub-
divided Property Register Card was received only on 11 th April 2016, the
share certificates could not be issued earlier. The Plaintiff is in the process
of printing the share certificates and the same will be issued to all its
Members. The Plaintiff has submitted that the status of the Defendants
Nos.1 to 4 as Members of the Plaintiff has not been and is not a subject-
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matter of dispute and issues pertaining to the membership of the Society
between the Society and its Members is within the exclusive jurisdiction of
the Co-operative Court under Section 91 read with Section 163 of the
Maharashtra Co-operative Societies Act, 1960, and the same cannot be
agitated before or decided by this Court. In my view, since the Plaintiff has
never raised the slightest doubt qua the membership of Defendant Nos. 1 to
4, the issue qua the alleged ambiguity in respect of the status of Defendant
Nos. 1 to 3 as Members of the Plaintiff is raised by the Defendant Nos. 1 to
3 only because they are conscious of the fact that till date they have not
challenged any of the steps/action taken by the Plaintiff Society including
the resolutions pertaining to redevelopment passed at its Special General
Body Meetings, before any Court of law.
26.21 It is contended by the Defendant Nos. 1 to 3 that the
appointment of the Project Management Consultant (PMC) M/s. Vistaar
Architects is fraudulent as there is no Special General Body Meeting
Resolution passed by the Plaintiff to appoint M/s. Vistaar Architects as
PMC.
The Plaintiff Society has explained that the erstwhile Delite CHS Ltd. had
appointed M/s. Vistar Architects as the Architects for the said Society vide
its letter dated 15 April 2010 and continued with its services to carry out the
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sub-division of their property vide the Resolution dated 28 th July 2013
passed by the erstwhile Delite CHS Ltd., a copy whereof is annexed and
marked as Annexure "Aa" to the Compilation Part II tendered along with
the Affidavit in Rejoinder dated 12th July 2016. Thus the Plaintiff
submitted this appointment letter dated 15 th April 2010 to the MCGM on
11th April 2014, since the Application dated 11 th April 2014 was submitted
by the erstwhile Delite CHS Ltd. in respect of the proposed sub-division of
its property. Thereafter M/s. Vistar Architects were appointed as the Project
Management Consultants for the present redevelopment vide the Plaintiff's
Special General Body Meeting Resolution dated 27 th February 2014, a copy
whereof is annexed as Exhibit C at pgs. 49 to 56 of the Plaint. The
Managing Committee of the Plaintiff also gave a formal appointment letter
dated 5th March 2014 to M/s. Vistar Architects appointing them as the
Architects for the redevelopment project, a copy whereof is annexed and
marked as Annexure "Ab" to the Compilation Part II tendered along with
the Affidavit in Rejoinder dated 12 th July 2016. The Plaintiff has also
submitted the said appointment letter dated 5th March 2014 to the MCGM
along with its redevelopment proposal seeking IOD for the proposed
building in the year 2015. The allegation therefore that the appointment of
M/s. Vistar Architects is fraudulent, is untenable and baseless and is
rejected.
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26.22 Defendant Nos. 1 to 3 have submitted that no Structural Stability
Certificate is submitted to MCGM under Section 353-B of the Act and no
Notice has been given under Section 354 or 475 of the MCCM Act, 1888.
In response, the Plaintiff has correctly submitted that the redevelopment is
approved by an overwhelming majority of the Plaintiff's members and the
reliance on section 353B of the MMC Act, 1888 is completely misplaced.
Such Structural Stability Certificate is only necessary if the Society wants
to retain the building, which is clearly not the case here. Again, no Notice
under Section 354 of the MCGM Act is required for redevelopment. The
allegations made by Defendant Nos. 1 to 3 are therefore once again
baseless and untenable and are rejected.
26.23 Defendant Nos. 1 to 3 have submitted that the Plaintiff Society
has not taken steps to obtain NOCs from the Banks in whose favour certain
flat purchasers have created a mortgage.
The Plaintiff Society has correctly submitted that if a flat purchaser has
mortgaged his flat to the Bank, the Plaintiff Society is not required to seek
any No Objection Certificates (NOC's ) from the mortgagee-bank/s. The
same is a matter entirely between the individual flat member and the
concerned bank .
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26.24 Defendant Nos. 1 to 3 have submitted that apart from Defendant
Nos. 1 to 6, 9 other Members are still residing in the Society premises.
Further 85 per cent of the Members who have allegedly vacated their flats
are still using their flats despite the Plaintiff alleging that these flats are
vacant.
As correctly submitted by the Plaintiff, sixty-two out of the total sixty-six
Members of the Plaintiff (i.e., everyone except Defendants Nos. 1 to 4
herein) have either vacated or given their consent to vacate their respective
flats. These Members are bound and liable to vacate their flats as and when
called upon to do so at the time of demolition of the suit building. The
allegations regarding the continuing use of the flats by a minority of the
Plaintiff's Members is totally irrelevant and do not lend any support to the
case of Defendants Nos. 1 to 3.
26.25 According to Defendant Nos. 1 to 3, their suggestions were not
taken into consideration by the Plaintiff and therefore Notices dated 4 th
September, 2016 and 16th March, 2016 under Section 164 of the MCS Act
have not been replied to.
It is submitted on behalf of the Plaintiff Society that the suggestions of
Defendant Nos. 1 to 3 have always been considered and discussed by the
Plaintiff. However, the final decisions were taken in accordance with the
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wishes of the overwhelming majority of the Plaintiff's Members in the
various General Body Meetings of the Plaintiff. It is correctly submitted on
behalf of the Plaintiff that the Plaintiff Society is not bound to respond to
the allegations contained in the Notice under Section 164 of the Act. In any
event the Plaintiff Society has in the present proceedings responded to the
allegations in these Notices. The above submissions of Defendant Nos. 1 to
3 therefore cannot be accepted.
26.26 Defendant Nos. 1 to 3 have alleged that the Minutes of the
Special General Body Meeting of the Plaintiff dated 27th February , 2014
and 16th March, 2014 have been manipulated.
It is submitted on behalf of the Plaintiff that the said allegation is a result
of the discrepancy between the draft Minutes (sent to the Plaintiff's
Members for their approval) and the finalized versions of the said Minutes
dated 27th February 2014 and 16th March 2014, in which the names of the
proposers and the seconders at these Meetings are different. However the
allegations of manipulation are false and completely baseless. The
discrepancy occurred as a result of the incorrect recording of the said names
in the draft minutes. The said mistakes were noted by some of the
Plaintiff's Members and they reported the same to the Managing
Committee of the Plaintiff, which rectified the said mistakes while
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preparing the final Minutes. The Draft Version of the Minutes dated 27 th
February 2014 and 16th March 2014 tendered by Defendants Nos. 1 to 3,
being Annexures "Au" and "Av" are at pages 272 - 274 and 275 - 277
respectively of Compilation Part II tendered along with the Affidavit in
Rejoinder dated 12th July 2016. The Final Version of the said Minutes dated
16th March 2014 and Minutes dated 27 th February 2014 being Annexures
"Ao" and "Aq" are at pages 254 - 258 and 261 - 268 respectively of
Compilation Part II tendered along with the Affidavit in Rejoinder dated
12th July 2016. The allegations made by Defendant Nos. 1 to 3 qua
manipulation of the Minutes is therefore rejected.
26.27 It is submitted by Defendants Nos. 1 to 3 that it is not
mandatory to comply with Clause 53 of the IOD which pertains to
demolition of the existing building. Defendant Nos. 1 to 3 have also relied
upon a document dated 8th March 2016 submitted by the Plaintiff's
Architect to MCGM which states that the compliance to Clause 53 of the
IOD is 'NA', (i.e. Not Applicable). On the basis of this document and
contention, it is submitted by Defendant Nos. 1 to 3 that big fraud is being
committed on this Court.
The Plaintiff has explained that as per the technical requirement for
redevelopment of a building it is mandatory for the building to be vacated
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and demolished. The demolition of the structure can take place in its
entirety or in a phase-wise manner. In the present case, since there is only
one building having four wings (A, B, C, D), the same will be demolished
in its entirety in one stroke. In view thereof, the said Architect in his letter
dated 8/03/2016 annexed in the Defendant's Compilation at page No. 357
pertaining to compliance status of IOD has mentioned "NA" (i.e. Not
Applicable) to Clause 53 of the IOD, as there will be no phase-wise
program of demolition, but demolition of the structure is a necessity. In
any event, in my view it cannot be argued by the Defendant Nos. 1 to 3 or
by any one that the redevelopment process i.e. construction of a new
building in place of the old can be done/carried out without demolishing the
existing buildings.
26.28 Defendant Nos. 1 to 3 have alleged that the redevelopment
project is not supported by an overwhelming majority of the Plaintiff's
Members. According to the Defendant Nos. 1 to 3 the Plaintiff in the letter
dated 16th April, 2016, addressed to MCGM has stated that Consent Letters
from 62 Members are enclosed but as per their inspection of the relevant
file, they observed only one incomplete and unstamped consent letter.
The said allegation is belied by the minutes of the meetings and the facts
mentioned/set out hereinabove. In any event, as pointed out by the
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Plaintiff, the interpretation sought to be given by the Defendants Nos. 1 to 3
to the said letter dated 16th April 2016 is erroneous. The letter is annexed
and marked as Annexure "L-4" at page 129 of the Compilation to the
Plaintiff's Written Arguments dated 12th July 2016 stating that 60 Members
have given their consent and nowhere does it state that the same has been
submitted to MCGM. The original consent letters are with the Plaintiff
Society and the Plaintiff Society has craved leave to produce the same if
required. In fact the said 62 Members have as recently as on 11 th July 2016
signed a Declaration cum Undertaking giving consent to the redevelopment
process and for the appointment of Defendant No.7 as the Developer. The
said Declaration-cum-Undertaking dated 11th July 2016 is annexed and
marked as Annexure "Az" at page No. 300-304 to Compilation II tendered
with the Plaintiff's Rejoinder dated 12.07.2016.
26.29 Defendant Nos. 1 to 3 have alleged that the Special General
Body Meeting dated 24th January, 2016 was a sham. The Secretary of the
Plaintiff was absent without explanation, the comments of the Advocate of
the Plaintiff Society were not given to the Members and the draft was
approved without finalizing the amenities. The Draft Development
Agreement does not include their suggestions and they had protested
against these facts.
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The said allegations are refuted by the Plaintiff stating that the Draft
Development Agreement was approved by a vote of majority in the Special
General Body Meeting dated 24th January 2016. The show of hands can be
clearly seen in the video. Defendants Nos. 1 to 4 have in the Attendance
Sheet only written ''I Protest". The Plaintiff has denied and disputed that
any protest was raised/registered pertaining to the appointment of the
Developer, process of redevelopment undertaken or any comments or
statements made by the professionals appointed by the Plaintiff Society.
Therefore, the above allegations made by Defendant Nos. 1 to 3 appear to
be baseless and are not accepted.
26.30 Defendant Nos. 1 to 3 contended that the decision to apply for IOD
was merely to speed up the process and as such there was no requirement in
law to do so. They contended that in the Special General Body Meeting
dated 19th July 2015, in which the Members of the Plaintiff resolved to
allow the Plaintiff to apply for IOD in its own name, the Advocate for the
Plaintiff misled the Members by saying that the sub-division of the plot was
not possible without demolition of the building and hence getting IOD is a
must for the Society. They state that this statement made by the said
Advocate is false, given that the sub-divided property card was received on
11th April 2016 i.e. prior to the demolition of the building. For all the
aforesaid reasons, Defendants Nos. 1 to 3 contend that the said Resolution
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dated 19th July 2015 was based on fraudulent and malafide explanations and
is therefore not valid.
The Plaintiff refuted the contentions and stated that in the said Meeting held
on 19th July 2015, the Plaintiff's Advocate informed the Members that mere
loading of the TDR would not be sufficient for obtaining sub-division of
the Plaintiff's plot. He also informed them that the area of the existing
buildings of the Plaintiff and the plot area can also be balanced after
demolishing the existing building. The Plaintiff's Advocate did not state
that 'demolition of the existing building is essential for obtaining sub-
division of the plot', as suggested by Defendants Nos. 1 to 3. The Plaintiff's
Advocate also informed the Members that the Plaintiff's Architect (Mr.
Kiran Rokadiya) and the Defendant No. 7 have submitted the proposal for
sanctioning of building plans for the new proposed building to restart the
redevelopment process that had been stalled by the rejection of the proposal
for sub-division of the Plaintiff's plot. (Minutes of the Meeting dated
19/07/2015 annexed and marked as Annexure 'An' to the Compilation II to
the Written Arguments of Plaintiff dated 11th July, 2016 at page nos. 244 -
254 at page 249, line 6). The Plaintiff's Architect advised the Plaintiff that
the issue of FSI imbalance can be best addressed by getting the layout and
IOD (Building Plans) sanctioned and the Plaintiff acted on this advice in
good faith. There was absolutely no dishonest motive behind the Plaintiff's
KPPNair -97- NMSL 1341/2016
action, as alleged, or at all. The layout was approved by 23 rd December
2015 and within 9 days, i.e. by 2nd January, 2016, the sub-division order
was received from the Office of the Collector (MSD) and the IOD was
received on 4th January 2016. This is perfectly in line with the advice of the
PMC.It is pertinent to note that neither the Plaintiff nor the Defendant No. 7
had derived any additional benefit by applying for the IOD prior to entering
into the Development Agreement. The application for IOD in the Plaintiff's
name prior to execution of the Development Agreement has not resulted in
any sort of violation of legal norms nor any injury or prejudice to the
Plaintiff Society and/or its members. Therefore, the above allegations made
by the non-co-operative members are without any substance and are
rejected.
26.31 The Defendant Nos. 1 to 3 have alleged that the Plaintiff has not
considered their suggestions/observations, protests and objections
pertaining to the redevelopment process raised in the Plaintiff's meetings
and the letters addressed by them to the Plaintiff and the various statutory
and police authorities in this regard.
As correctly submitted by the Plaintiff, the allegations cannot be
countenanced because none of the Resolutions of the Plaintiff Society have
been challenged by the Defendants Nos. 1 to 3 in any competent court.
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27. As set out earlier, the Plaintiff Society filed a further Affidavit
dated 22nd October, 2016, placing on record that the major portion of the
ceiling of flat B/103 collapsed leading to further serious structural and
irreparable damage to the building which was already in a deteriorated
condition. Defendants Nos. 1 to 3 filed their Affidavit dated 10 th November
2016 in response thereto stating that the building has not yet been declared
to be in a dilapidated condition i.e. C-1 category'. In response, the
Plaintiff's by their additional Affidavit dated 17th November 2016 pointed
out that the list of dilapidated/C-1 category buildings published by the
MCGM is by no means an exhaustive one. There are several dilapidated
and dangerous structures in and around Greater Mumbai, including the
present suit building, which do not feature in the said list. The Plaintiff-
Society being privately owned, need not approach the MCGM to audit the
structure and seek assistance of the MCGM. The Plaintiff has decided to
redevelop the Society by appointing a Developer. Therefore, the allegation
that the building of the Plaintiff Society is not in a dilapidated condition
and/or that the same requires no redevelopment is not only false and
misconceived but also a dilatory tactic adopted by the Defendant Nos.1 to
3. I am in agreement with the above submission of the Plaintiff.
28. On 19th December, 2016, Defendants No. 1 to 3 moved this
Court by way of a praecipe stating that on 16 th December, 2016 the
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Plaintiff Society, stuck on building walls, the notice u/s. 354 of Municipal
Corporation Act, which is signed and dated 10 th December, 2016 declaring
that the suit building is in a dilapidated condition and that M/s. Capstone
Consultants Pvt. Ltd., acting upon the instructions of one Mr. Tulsi K Patel,
Plaintiff and Defendant No. 7, have drilled multiple big holes about 6-8
inches deep in almost every wall and pillar of the society building as well
as through and through holes in the walls of certain flats. In response, the
Plaintiff has filed an additional Affidavit dated 20 th December, 2016, inter
alia, setting out that Defendant Nos. 1 to 3 have questioned the
independence and/or competence of M/s. Epicons Consultants Pvt. Ltd.
and recommended structural audit/report to be obtained from M/s.
Veermata Jijabai Technological Institute (VJTI). Accordingly, on 28 th
November 2016, the Managing Committee of the Plaintiff-Society
addressed a letter to M/s. VJTI requesting the latter to conduct the
Structural Audit of the suit building alongwith the related tests. This step
was taken by the Plaintiff partly with a view to allay the apprehension of
Defendants Nos. 1 to 3 regarding the Structural Audit of the suit building.
In the meanwhile, on 3rd December 2016, the MCGM conducted a site visit
and inspection of the suit building to ascertain the dilapidated status of the
same. After the said site inspection was carried out by MCGM on 3 rd
December 2016, the Plaintiff-Society received a Notice dated 10th
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December 2016 issued by the MCGM under Section 354 of the Mumbai
Municipal Corporation Act, 1888, inter alia, calling upon the Plaintiff to
pull down and demolish the suit building within 30 days of the date of
notice or receipt of notice, under the supervision of a registered structural
engineer. In the said notice it was further stated that if the Plaintiff does not
comply with the aforesaid directions of the MCGM, the Members of the
Plaintiff would be liable for prosecution under Section 475-A of the MMC
Act, 1888 and the MCGM would take necessary steps to enforce its
directions as per law. In fact, the Managing Committee of the Plaintiff has
also addressed a Notice dated 17th December 2016 to all the Members of the
Plaintiff, calling for a Special General Body Meeting on 25 th December
2016 for the purpose of discussing the course of action and steps to be
taken for compliance of this Notice dated 10th December 2016. On 17th
December 2016, VJTI conducted a site inspection and undertook various
tests through its authorized agent M/s. Capstone Consultants Pvt. Ltd.,
such as Non-Destructive Testing (NDT), Rebound hammer, Carbonation
test etc. on the suit building as a part of the structural audit process. As a
part of the routine NDT testing involved in the structural audit, the said
agency conducted the exercise of controlled and systematic drilling of
minor holes in certain parts of the suit building in order to ascertain the
structural condition of the building. The same method was also employed
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by M/s. Epicons Consultants as a part of their audit process in May 2015.
At that time, Defendants Nos. 1 to 3 did not raise any objection, even
though holes were drilled in a similar manner as has been done now by the
VJTI-appointed agency, viz. having a diameter of approximately 5-8 inches
each. This is the standard method involved in all the usual structural audits.
The question therefore of taking cognizance of the grievance raised by
Defendant Nos. 1 to 3 by way of a praecipe dated 19 th December, 2016,
does not arise.
29. In the circumstances it is clear that 62 out of 66 members have
supported the redevelopment of the suit building. In fact, 53 members
fearing a threat to their lives and property have already vacated their flats
and have started residing elsewhere for which the Defendant No. 7
Developer has been paying huge sums of money every month towards
compensation for alternate accommodation. In addition as set out in
paragraph 26.13 above, the Defendant No. 7 has incurred an approximate
sum of Rs. 8 crores for carrying out the work set out in the said paragraph.
The buildings are in a dilapidated condition and because of the 4 non-co-
operative members, the entire redevelopment project has come to a halt.
The majority of the members have no quarrel in having the redevelopment
project executed through Defendant No. 7 as per the terms contained in the
Letter of Intent and the draft Development Agreement. The majority of the
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members also have no grievance qua the conduct of the meetings and the
resolutions passed thereat. The non-co-operative 4 members being an
admitted minority cannot stall or obstruct the redevelopment project as held
by this Court in several of its decisions. The resolutions passed by the
majority of the members at the General meetings of the Society are binding
on the non-co-operative members. As set out in paragraph 20 above, the
concern expressed by Defendant Nos. 1 to 4 that Defendant No. 7 will not
be able to complete the project as agreed due to lack of funds, completely
lacks bona fides. The Plaintiff Society and the Partners of Defendant No. 7
have till date conducted themselves in a fair and honest manner. The
undertakings given by the Plaintiff Society and Defendant No.7 developer
completely protects the interest of all the members of the Society including
the non-co-operative members who have left no stone unturned in
obstructing the redevelopment process by their unfair and obstinate
conduct. The Plaintiff is therefore entitled to the reliefs prayed for in the
Notice of Motion. The balance of convenience is completely in favour of
the Plaintiff Society and the large number of members who along with their
family members are out of their flats since more than a year and waiting to
get new ownership flats of larger area upon redevelopment. In the
circumstances, I pass the following order:
(i) The Court Receiver, High Court, Bombay, is appointed Receiver in
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respect of Flat Nos. A/002, A/102, A/101 and A/302 respectively
presently occupied by Defendant Nos. 1 to 4;
(ii) The non-co-operative members who have retained possession of
their flats shall on or before 31st August, 2017, hand over possession
of the respective flats to the Court Receiver and the Court Receiver
shall in turn hand over possession of the same to the Defendant No.
7 Developer for the purpose of commencing the redevelopment
project;
(iii) In the event of Defendant Nos. 1 to 4 not handing over possession of
their respective flats to the Court Receiver, as directed in clause (ii)
above, the Court Receiver shall take forcible possession of their flats,
if necessary with police help and hand over the same to Defendant
No. 7 developer for the purpose of commencing the redevelopment
project.
(iv) Within 25 days from the date of this order, the Plaintiff Society and
the Defendant No. 7 Developer shall execute the Development
Agreement in terms of the draft Development Agreement approved
by the members of the Society in the General Body Meeting held on
24th January 2016;
(v) All the payments agreed to be paid by Defendant No. 7 to the
Society and/or its members including the non-co-operative members
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shall be paid by Defendant No. 7 developer on or before 31st August,
2017;
(vi) The following statements made/undertakings given by the Defendant
No. 7 are accepted:
(a) That the Defendant No.7 shall construct the new building and
hand over flats to the members of the Society as provided in
the draft Development Agreement;
(b) That Defendant No.7 shall provide the Bank Guarantee for the
sum of Rs. 7,50,00,000/- (Rupees Seven Crores Fifty Lakhs
only) as undertaken in the Consent Terms dated 6th/8th June,
2016.
(c) A provisional tripartite agreement for permanent alternate
accommodation shall be executed between the individual
members of the Society, the Society and the developer before
the members vacate their respective premises.
(d) That a final tripartite agreement in identical terms of the
provisional agreement shall be executed on receipt of the full
commencement certificate.
(e) That Defendant No.7 developer shall load the required TDR
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within 10 days from the receipt of Commencement Certificate
upto plinth level from the Municipal Corporation of Greater
Mumbai.
(f) That the Defendant No.7 shall provide amenities to the members
of the Society which will be identical to the amenities provided
to the flat purchasers under the free sale category.
(vii) It is clarified that all the requirements prescribed under the Real
Estate (Regulation and Development) Act, 2016 and the Goods and
Service Tax regime, shall be incorporated in the agreements
executed between the parties or to be executed and shall be binding
on them.
30. The Notice of Motion is accordingly disposed of with costs.
(S.J. KATHAWALLA, J.)
