Bombay High Court

Mr. Kiran Suresh Bhagia vs M/S. Kakade Construciton Co ... on 9 January, 2018

Bench: Dr. Shalini Phansalkar-Joshi

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vks
                IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                         CIVIL APPELLATE JURISDICTION

                      CIVIL REVISION APPLICATION NO. 483 OF 2017



Kiran Suresh Bhagiya                                                                            ]
age: adult, Occupation : Business                                                               ] Petitioner.
r/at A-30, Abhimanshree Society, Pashan                                                         ] Original
Pune 411 008                                                                                    ] Plaintiff

                        V/s.

1. M/s Kakade Construction Co.Pvt. Ltd                                                          ]
   Plot No.67-68, Sanmitra Bungalow                                                             ]
   Opp. Telephone Exchange, Abhinav Lane                                                        ]
   Erandwane, Pune - 411 004                                                                    ]
                                                                                                ]
2. Suryakant Kakade & Associates                                                                ] Respondents
  Through its Proprietor (Director)                                                             ] Original
  Suryakant Dattatraya Kakade                                                                   ] defendants.
  r/o Plot No.67-68, Sanmitra Bungalow                                                          ]
  Opp. Telephone Exchange, Abhinav Lane                                                         ]
  Erandwane, Pune - 411 004                                                                     ]


Mr. Shivam Nagalia i/by Triyama Legal, for
the Petitioner.
Mr. Purushottam G. Chavan, for the
Respondents.


                                    CORAM : DR.SHALINI PHANSALKAR-JOSHI, J.

                                    DATE              : 9 th JANUARY, 2018.

ORAL JUDGMENT :

1]                      Heard learned counsel for the petitioner and respondents.

2]                      Rule.




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3]                      Rule made returnable forthwith with the consent of the

both the learned counsels.



4]                      By this Revision Petition, filed under Section 115 of Code

of Civil Procedure, the petitioner is challenging the order dated 12 th

April, 2017, passed by the Joint Civil Judge Senior Division, Pune, in

Regular Civil Suit No.434 of 2016, below Application Exh.42, thereby

holding that the valuation of the suit made by the petitioner-plaintiff

is not proper and the suit claim should have been valued as per

Section 6(iv) (d) of the Bombay Court Fee Act.

5] The said application was filed by the respondents under

Section 9-A of Code of Civil Procedure, contending inter-alia that the

suit property is commercial premises and the plaintiff is seeking

relief of declaration of exclusive ownership and also the possession

over the suit property, therefore, he should have valued the suit on

the market value of the suit property and the requisite court fee as

per Section 6(iv) (d) the Bombay Court Fees Act, is required to be

paid.

6] Though the present petitioner brought to the notice of the

trial Court that the suit was filed under Sections 3 and 4 of the

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Maharashtra Ownerships of Flats Act, 1963 (for short called as,

"MOFA Act") for specific performance of agreement dated 20 th

November, 2006, and accordingly affixed Court fee as required under

Section 6(4) (j) of the Bombay Court Fees Act, the trial Court,

rejected the said contention and held that as the suit claim is for

declaration of exclusive ownership and possession of the suit flat, the

valuation has to be made on the market price of the said flat. The trial

Court, accordingly, also called for the report from Nazir about the

valuation, which is reported as Rs.30 lacs and hence directed the

petitioner to pay court fee stamp accordingly. It was further directed

that if pecuniary jurisdiction of the Court exceeds, appropriate order

will be passed.

7] While challenging this impugned order of the trial Court,

submission of learned counsel for the petitioner is that when the suit

is filed specifically for performance of the statutory obligation under

the MOFA Act, then the suit has to be valued in view of the provisions

of section 6(4) (j) of the Bombay Court Fees Act on notional valuation,

as held by this Court, in case of Vrindavan (Borivali) Co-operative

Housing Society Ltd -vs- Karmarkar Brothers and ors 1983 (2)

Bom CR 267, and Maria Philomina Pareira -vs- M/s Rodrigues

Construction a Partnership Firm, AIR 1991 Bom. 27.

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8] Per contra, learned counsel for respondents has drawn

attention of this Court to section 11 of the MOFA Act and has

submitted that the suit is not for the performance of the statutory

obligation on the part of the respondents, but for the declaration of

exclusive ownership and possession over the suit flat and hence, the

trial Court has, after having regard to the relevant prayer clauses,

rightly held that the suit should have been valued on the market

consideration of the suit flat.

9] Learned counsel for respondents also points out that

petitioner has already mortgaged the said flat to Jalgaon Peoples Co-

operative Bank Ltd and availed loan of some lacs of rupees which is

against the terms and conditions of the agreement. The petitioner has

also not paid the entire consideration amount of the agreement. As a

result, respondent was even constrained to terminate the agreement

and that is the reason why petitioner is not seeking the specific

performance of the agreement or for performance of the obligation

arising under the provisions of MOFA Act, but relief of declaration of

his exclusive ownership and possession and seeking possession of the

suit flat. According to learned counsel for respondent, therefore, the

trial Court has rightly considered the prayers in the suit and

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directed the petitioner to pay the Court fee on the market value as

per provisions under Section 6(iv)(d) of the Maharashtra Court Fees

Act.

10] In order to appreciate the rival submissions, advanced by

learned counsel for both the parties, it would be necessary to peruse

the plaint, which clearly bears the title that " the suit is for

permanent injunction, declaration and possession under Sections 3

and 4 of the MOFA Act". The averments made in paragraph No.2 of

the plaint also reveal that the petitioner is relying on the agreement

to sale dated 20th November, 2006 executed by respondent in his

favour for getting the relief of declaration. The perusal of the said

agreement reveals that it is executed under the provisions of MOFA

Act. Clause (R) of the said agreement reads as follows:-

"Since the present agreement would be governed by the provisions of Maharashtra Ownership Flats Act, 1963, provisions of Section 4 of the said Act imposed obligation upon the party of the first party to enter into agreement for sale of tenements in writing and also imposed obligation to register the said agreements. Accordingly, the parties to the First Part and the Party of the Second Part have agreed to reduce the terms agreed between them into writing and present the same for registration".

(emphasis supplied)

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11] Further clause No.12 of the agreement also lays down as follows :-

"12. The Party of the Second Part alongwith other purchaser of Shop/Office in the building shall join in formatting to be known by such name for the Society/ a limited Company / Association to be known by such name for this purpose also from time to time sign and execute the application for registration and /or membership and other papers and documents for the formation and the registration of the Society / Limited Company / Association and for becoming a member including the bylaws of the proposed society and duly fill in, sign and return to the Party of the First Part within 15 days of the same being forwarded by the Party of the First Part to the Second Part, so as to enable the Party of the First Part to register the organization of the Party of the Second Part under Section 10 of the said Act within the time limit prescribed by rule 8 of the Maharashtra Ownership of Flats Act. (Regulation of the Promotion, construction, Sale Management and Transfer) Rules, 1964. No objection shall be taken by the Party of the Second Part if any changes or modification are made in the draft bye-laws or the Memorandum and/Articles of Association, as may be required for Registration of Co-operative Societies or the Registration of Companies, as the case may be, or any other Competent Authority." (emphasis supplied)

12] Thus, both these clauses of the agreement dated

20.11.2006, the specific performance of which is sought by the

plaintiff, in the suit, make it clear that by this suit, the petitioner is

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seeking performance of the statutory obligation arising out of the

agreement executed under Sections 3 and 4 of the MOFA Act. Even

assuming that prayer clause in the plaint is not drafted in the proper

way, as contended by learned counsel for respondent, the reading of

the plaint in its entirety leave no room for doubt that the suit is filed

for enforcement of statutory obligation on the part of the respondent.

The law is well settled that for deciding the correct valuation of the

suit claim,this Court has to consider the real and effective relief,

which the petitioner is claiming in the suit and said relief leaves no

manner of doubt that the relief, which the petitioner is claiming, is of

the spefific performance of the obligation arising under Section 3 and

4 of the MOFA Act.

13] This Court, has in the case of Vrindavan (Borivali) Co-

opertive Housing Society Ltd -vs- Karmarkar Brothers and ors,

( supra), considered this very aspect and held that such suit is not a

suit simpliciter for specific performance, but it is a suit to enforce the

compliance with a statute.

14] In paragraph No.20 of the judgment it was further held

that, "when the suit is filed seeking to enforce the statutory

obligations which are arising under the MOFA Act, such a relief being

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incapable of monetary valuation, the valuation made by plaintiff in

the said case relying on clause No.6(iv)(j) of the Court Fees Act is

correct".

15] In paragraph No.21 of the judgment it was further held

that "the intention of the Legislature in enacting the Maharashtra

Ownership Flats Regulation of the Promotion of Construction, Sale,

Management and Transfer) Act, 1963 was not to impose any such

burden on the respective parties governed by the provisions of said

Act, if they are involved in litigation because of non-compliance with

the provisions of Act".

16] Paragraph NO. 22 of the Judgment makes position further

clear and it reads as follows:-

"22. The subject-matter of the suit being of right to compel the performance of statutory obligation and the plaintiff who is asking assistance of the Court to compel the promoter to perform his statutory obligation, such a right to compel to perform the obligations provided by the statute being incapable of monetary valuation and there being no provision in the Court Fees Act for such a suit, the provisions of section 6(j) of the Court Fees Act are attracted and they are applicable to this suit. As the Court Fees were paid relying on the provisions, the valuation of this suit is quite proper and the plaint will have to be accepted and the suit will have to be proceeded with as the

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valuation of the plaint is proper. ... ... ..."

17] This legal position was once again considered by this

Court and confirmed in the judgment of Maria Philomina Pareira

-vs- M/s Rodrigues Constructions (supra). In paragraph No.6 of

the judgment, it was held that

"when the agreement of sale was registered under the provisions of MOFA Act, and plaintiff wants the defendant to comply with the terms and conditions of the said agreement and in compliance thereto, when the suit is filed to enforce such obligation arising out of the agreement as such, such a suit would not fall within the scope of section 6 (xi) of the Bombay Court Fees Act. It is a statutory obligation, which is being enforced and a notional valuation under Section 6(iv) (j) of the Court Fees Act, would be proper"

It was further held that,

"in all such agreements, if they are enforced by the flat purchasers individually, there can be no conveyance in favour of the flat purchasers individually, as ultimately conveyance has to be in favour of the society of all flat purchasers. If the promoter does not comply with the obligations under the Act, there are serious consequences to follow. Therefore, it must necessarily be held that whenever a builder enters into an agreement with any flat purchaser, containing provisions which are to be incorporated as provided under the said Act, all such agreements must necessarily be held to be special agreements, which can be enforced by filing suits, where the valuation would be a notional valuation under Section 6(iv) (j) of the Bombay

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Court Fees Act, 1959".

18] In the present case, as stated above, the specific

performance of the agreement, which the petitioner is claiming, is

executed under the provisions of Sections 3 and 4 of the MOFA Act .

Thus, by this suit, the petitioner is seeking the compliance of the

obligation cast upon the respondent under the said Act. Therefore, it

being a suit for compliance of statutory obligation, the valuation made

by the petitioner on notional valuation under Section 6(iv) (j) of the

Bombay Court Fees Act, is required to be held as just.

19] As regards the grievance of the respondent that the

petitioner has availed some loan amount from the bank and has not