Gabriel Apartments Co Op Hsg Ltd vs Mary Patricia Wd Of Joseph Peter ...
2021 Latest Caselaw 3483 Bom

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                 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                     ORDINARY ORIGINAL CIVIL JURISDICTION

                  INTERIM APPLICATION (LODG.) No. 115 OF 2021
                                      IN
                             SUIT NO. 856 OF 1988

Gabriel Apartments Co-operative
Housing Society Limited                                .. Applicant

In the matter of :

1. Mary Patricia wd./o. Joseph Peter
Gonsalves & Ors.                                       ..Plaintiffs
      Vs.
1 (a) Allan S/o. Hyacinth Waiter Gonsalves
& Ors.                                                 .. Defendants
      And
Court Receiver, High Court, Bombay                     ...Respondent

Mr.Sajid Shamim a/w. Mr.M.S. Lakdawala i/b S. Shamim and Co. for
applicant.
Mr.Cleutus Gonsalves, plaintiff No.5 in-person.
Mr. N.A. Bandodkar, 2nd Assistant to Court Receiver present.

                             CORAM : N.J. JAMADAR, J.

DATE : 24th FEBRUARY 2021 ORAL ORDER :

1. This application is preferred by the applicant Gabriel Apartments Co-

operative Housing Society Limited, for the following reliefs :

"(a) This Hon'ble Court be pleased to grant permission to the Applicant to make application under section 5(A), 11(3), 11(4) of the Maharashtra Ownership Flats Act and rule framed there under before the District Deputy Registrar, (Competent Authority) to obtain Deemed Conveyance.

(b) That this Hon'ble Court be pleased to allow the applicant to join Court Receiver (respondent herein) to be joined as party in the Application for Deemed Conveyance before District Deputy Registrar."

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2. The application arises in the backdrop of the following facts :

(a) The plaintiffs have instituted the suit against the

defendants for declaration, partition and separate

possession of their shares in the suit premises described in

the schedule of property appended to the plaint. The

applicant-Society is concerned with the property described

in the first schedule i.e. Survey No. 149A, Hissa No.4, CTS

1382, Marol, Tal. Andheri (East), Mumbai (hereinafter

referred to as 'the suit premises'). In the said suit, on 12 th

November 1988, the Court Receiver came to be appointed,

as Receiver of the suit premises.

(b) The plaintiffs and the defendants entered into the

consent terms on 4th April 1991, whereby it was, inter-alia,

agreed to jointly sale the suit premises on "as is where is"

basis for a consideration not less than Rs.15 lakh. A

preliminary decree came to be passed in accordance with

the consent terms.

(c) The plaintiffs and defendants jointly sold the suit

premises to the members of the applicant-society for an

agreed consideration of Rs.15,48,000/-, by jointly entering

into the agreements of sale with all 40 members of the

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applicant-society. One of the clauses in the said agreement

provides that the Vendors shall execute a Deed of

Conveyance conveying the said property except the unsold

flats in Gabriel Building in favour of the Co-operative

Housing Society which will be formed by the Purchasers of

the flats in the said Gabriel Building.

(d) It is the claim of the applicant that the members of

the applicant society made the payment to the counsels of

the plaintiffs and the defendants. The respective counsels of

the plaintiffs and the defendants, in turn, paid the amounts

to the plaintiffs and defendants. However, an amount of

Rs.2,87,603.75 could not be paid to the plaintiffs, by their

advocate, as the plaintiffs did not comply with the terms of

the registered agreement for sale, subject to which the said

payment was to be released by the counsel for the plaintiffs.

There were proceedings between the plaintiffs and the

advocates, who then represented the plaintiffs and the

defendants, before the Disciplinary Committee of the Bar

Council.

(e) Eventually, the applicant-society took out a notice of

motion for discharge of the Court Receiver and for

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execution of conveyance in respect of the suit premises. A

learned Single Judge allowed the notice of motion, being

Notice of Motion No. 3407 of 2003, and the Court Receiver

stood discharged by order dated 2nd March 2006. Pursuant

to an order in Appeal No. 430 of 2006 in Notice of Motion

No. 3407 of 2003, the Notice of Motion No. 3407 of 2003

stood remitted back to the learned Single Judge. Ultimately,

the Notice of Motion No. 2905 of 2010 for discharge of the

Court Receiver taken out by the applicant, was dismissed by

this Court on 19th January 2011.

(f) The applicant preferred an application seeking

Deemed Conveyance before the Competent Authority under

the provisions of sections 5(A), 11(3) and 11(4) of

Maharashtra Ownership (Regulation of the Promotion of

Construction, Sale, Management and Transfer) Act, 1963

('MOFA'). The said application was dismissed by the

Competent Authority by order, dated 27 th August 2012,

principally on the ground that the Court Receiver was not

impleaded as party respondent to the said application, with

liberty to the applicant, to file a fresh application before the

said Authority, after making the Court Receiver a party

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respondent, with the permission of the Court. The

applicant-society has, thus, preferred this application

seeking permission to make an application for Deemed

Conveyance and to join the Court Receiver as a party

respondent therein.

3. The plaintiff No.5 has resisted the prayers in the application by filing

an affidavit in reply. The substance of the resistance put-forth by the

plaintiff No.5 is that the applicant-society committed default in payment of

the balance consideration within the stipulated period. The agreements in

question are not in accordance with the model agreements under MOFA.

Moreover, the members of the applicant society are guilty of unilaterally

carrying out material alterations in the terms of the said agreement for sale

and thereby the instruments stood vitiated. The applicant-society has not

acquired ownership over the suit premises. Therefore, in the various orders

passed by this court, it has been observed that the applicant-society can

enforce its remedy of obtaining conveyance in respect of the suit premises

only by instituting a separate suit. In this backdrop, the applicant-society is

not entitled to seek conveyance by resorting to the provisions contained in

MOFA. In any event, the Competent Authority has no jurisdiction to delve

into the aspect of title to the suit premises.

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4. In the light of the aforesaid pleadings, I have heard the learned

counsel for the applicant and the plaintiff No.5 in-person, at some length.

5. At the outset, it is imperative to note that the remit of this

application is to consider the justifiability of the prayer which seeks

permission of the Court to implead the Court Receiver as a party

respondent to the proceedings, which the applicant proposes to file before

the Competent Authority under MOFA. In the instant proceedings and at

this stage, the Court is neither required nor professes to embark upon an

enquiry as to whether such a proceeding before the Competent authority

would be tenable in law and sustainable on facts.

6. To begin with, it is necessary to note that the consent terms in

accordance with which the preliminary decree came to be passed, inter-

alia, provided that the suit premises was to be sold jointly by the plaintiffs

and defendants on the terms incorporated therein. The material terms are :

(i) The Sale price shall not be less than Rs.15,00,000/- (Rupees Fifteen

Lacks), (ii) The same shall be sold on "as is where is basis". Clause 5 of the

consent terms further provided that the Court Receiver, High Court,

Bombay, appointed as 'Receiver' in respect of the properties mentioned in

the Second Schedule and Third Schedule of Exhibit 'A' to the Plaint stood

discharged without passing Accounts. The Court Receiver appointed as

'Receiver' in respect of the properties mentioned in the First Schedule of

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Exhibit 'A' ('suit premises') shall, however, continue till the property is

divided/sold as per those Consent Terms.

7. It indisputable that the plaintiffs and the defendants sold the units in

the 'Gabriel Building' to the tenants, who were in occupation thereof by

executing the agreements for sale, which were duly registered. The

controversy arose as the amount which was paid to the advocates of the

plaintiffs and the defendants, was not released by the advocates for the

plaintiffs in favour of the plaintiffs. The proceedings were initiated against

the advocates who allegedly did not pay the balance amount to the

plaintiffs. The controversy, thus, revolves around the aspect of non-

payment of the entire agreed consideration to the plaintiffs, though the

members of the applicant-society claim that in accordance with the

agreements for sale, they paid the entire consideration to the advocates for

the plaintiffs and the defendants.

8. In the wake of the aforesaid controversy, reference to few of the

orders passed by this Court would assist the Court in arriving at a just

decision of the instant application. In the order dated 2 nd March 2006 in

Notice of Motion No. 3407 of 2003, taken out by the applicants, whereby,

the Court Receiver in respect of the suit premises came to be discharged,

this Court had inter-alia observed as under :

"5 However, prayer (b) cannot be granted. If the applicant seeks conveyance then it is for them to file a suit for specific performance in respect of the agreement entered into by the

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plaintiff and the defendant jointly. In that light of the matter, motion is made absolute in terms of prayer clause (a) only. Motion is dismissed in so far as the prayer clause (b) is concerned."

9. In the order dated 19th January 2011, in Notice of Motion No. 2905

of 2010, whereby the prayer of the applicant-society to discharge the Court

Receiver, post remand, came to be rejected, it was inter-alia observed as

under :-

"7. The suit would be for obtaining the conveyance of the property upon the agreed consideration amount having been paid entirely. Such a suit has not been filed. Instead a Notice of Motion came to be taken out by the Applicant-Society for conveyance as well as discharge of the Court Receiver. The Court Receiver was discharged by an order of this Court passed by Justice Kamdar, as he then was, on 2nd March 2006. In appeal that order came to be set aside and a fresh application was directed to be made because the conveyance could not be ordered in an application by way of the Notice of Motion taken out by the Applicant. They were required to file a separate suit for that purpose. They have taken out this Notice of Motion not for conveying the property but only for discharge of the Court Receiver.

8. In ordinary cases the Court Receiver would stand discharged because there is no waste of the property by the parties and there is no case for appointment of the Court Receiver once the parties have settled their disputes and the Court Receiver appointed pending suit is agreed to be discharged without passing accounts. However, the parties have further agreed in the Consent Terms dated 4th April 1991 that the Court Receiver is continued till the property is divided/sold as per those Consent Terms. The property has not yet been divided/sold. Plaintiff No.5 on behalf of the Plaintiffs states that the consideration is not received and hence there could be no sale. This aspect can be considered only in a separate suit. Only upon consideration of this aspect, can the suit for conveyance of the property to the Society be decreed or dismissed. In view of the agreement between the parties of continuation of the Court Receiver until the property is divided and sold, it would not be possible to discharge the Court Receiver pending such sale or conveyance.

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9. It is argued on behalf of the Plaintiffs that the Court Receiver has not even paid taxes and has not managed the property. That may be correct. However, the Applicant has not become the owner of the property and title has not passed to it. It may be that the Applicant has a good case for transfer of the title. Such title can pass only in the suit. For that reason and since the Applicant claims only through the Consent Terms between the parties and has sought the sale pursuant to the Consent Terms, the Applicant must abide by the Consent Terms fully, including its last term of continuation of the Court Receiver."

(emphasis supplied)

10. In the light of the aforesaid orders, it was urged by the plaintiff No.5

in-person, that the applicant-society cannot be permitted to revive the

prayer of conveyance in an indirect manner by instituting the proceedings

before the Competent Authority. It was further submitted that the entire

consideration has not been paid to the plaintiffs within the period

stipulated in the agreement. Therefore, for failure of consideration

members of the applicant-society cannot be said to have perfected their

title to the suit premises. Moreover, in view of the material alterations to

the agreements for sale the instruments are rendered void.

11. The learned counsel for the applicant, on the other hand, urged that

the prayer of the applicant in the instant application is limited to seeking

permission of the Court to implead the Court Receiver as a party

respondent. All these contentions which the plaintiff No.5 raises can be

very well taken before the Competent Authority. Laying emphasis on the

fact that there is a clear stipulation in the agreement that the vendors

would execute a conveyance of the suit premises in favour of the Co-

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operative Housing Society which would be formed, the vendors cannot

dispute the liability to execute the conveyance, especially when the alleged

failure of consideration is a matter between the vendors and their

advocates. The members of the applicant-society, who have parted with the

entire consideration, cannot be made to suffer on account of the dispute

between the vendors and their advocates, urged the learned counsel for the

applicant.

12. There is not much dispute over the fact that clause 6 of the

agreement incorporates the term of execution of Conveyance. Clause 6

reads as under :

"6 The sale shall be completed within four months from the date hereof. The Vendors shall execute a Deed of Conveyance conveying the said property except the unsold flats in Gabriel Building in favour of the Co-operative Housing Society which will be formed by the Purchasers of the flats in the said Gabriel Building before the completion of the sale. It is agreed that the Vendors or any one or more of them shall be entitled to become the member of such society and hold shares thereof as also the unsold flats as an absolute owner thereof. When the Vendors or any one or more of them sells or transfers his/her/their flats or flats or flat and the shares of the society held by them then in such an event the said society shall admit the purchaser as the member of the society and transfer the shares in the name of such transferee without any fee or charges."

13. In the backdrop of the aforesaid term in the agreements, executed by

the Vendors, the crucial question that wrenches to the fore is whether the

situation would be governed by the provisions of section 5A and 11 of the

MOFA.

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14. The plaintiff No.5 in order to lend support to the submission that the

question of title to the suit premises cannot be determined by the

Competent Authority, especially, when the suit is subjudice, placed a strong

reliance on a judgment of this Court in the case of Mazda Construction

Company & Ors. Vs. Sultanabad Darshan CHS Ltd. & Ors. 1 and another

judgment of this Court in the case of Angeline Randolph Pereira & Ors. Vs.

Suyog Industrial Estate Premises Co-operative Housing Society Ltd. &

Ors.2.

15. In the case of Mazda Construction Company & Ors. (Supra), this

Court had considered the nature and content of the provisions contained in

section 5A and 11 of the MOFA. It was, inter-alia, observed that it would

not be possible to read Section 5A in isolation, but it should be seen in the

backdrop of what the legislature desired and intended to achieve. The

legislature intended that such of the powers and duties which have to be

performed under Sections 5, 10 and 11, have not been performed and that

causes inconvenience and hardship to the flat purchasers. The observations

in paragraph 20 are material. They read as under :-

"20 To my mind, reading of Sections 10 and 11 together with Section 5A would make it amply clear that what is to be performed by the Competent Authority is a duty and obligation which the promoter is to perform in law. That is to convey the title and execute the documents according to the agreement. If that is the duty which is to be performed by the promoter, but which he fails to perform, then, the

1 2013(2) All MR 278 2 2018(6) All MR 729

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Competent Authority steps in to fulfill it. That is a duty towards the flat purchasers and which duty cannot be avoided except at the cost and pains of legal proceedings including a criminal prosecution. In these circumstances and when sections 10 and 11 are read together and harmoniously with the preceding sections including those which contain the particulars of the agreement, then, it becomes absolutely clear that what has to be conveyed even by a deemed conveyance, which is an unilateral act and which enables the flat purchasers to acquire the Promoter's right, title and interest in the land and the building. Therefore, it cannot be said that an unilateral deemed conveyance conveys something more than what belongs to the Promoter. Section 11(1) provides for conveyance of Promoter's right, title and interest in the land and building as is clear from the words 'his right, title and interest....' appearing therein.............."

(emphasis supplied)

16. It is true that in paragraph 23 of the aforesaid judgment, this Court

observed that when there is a suit pending in a court of law with regard to

the entitlement of the parties, then all the more the Competent Authority

ought not to undertake the exercise by which they overreach the

jurisdiction, authority and powers of competent courts and tribunals.

17. Laying emphasis on the latter part of the aforesaid observations in

paragraph 23, the plaintiff No.5 urged that the proposed application before

the competent authority would fall foul of the aforesaid consideration of

not overreaching the jurisdiction of the competent Court.

18. In the case of Angeline Randolph Pereira & Ors (Supra), the learned

Single Judge of this Court, after adverting to the judgments of Mazda

Construction Company & Ors. (Supra) and M/s. Shree Chintamani Builders

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Vs. State of Maharashtra and Ors. 3 observed that the latter judgment in the

case of M/s. Shree Chintamani Builders (Supra) clarified the position that

an order granting deemed conveyance will not conclude the issue of right,

title and interest in the immovable property.

19. In the case of M/s. Shree Chintamani Builders (Supra), in the context

of an apprehension that the area to which the society had no title, would

be usurped by the society on the strength of the deemed conveyance, it was

it was observed as under :

"3. We do not think that the petitioner's apprehension has any basis. This court in number of judgments and particularly in the case of Mazda Construction Company vs. Sultanabad Darshan CHS. Ltd. and Ors.1 has clarified that an order granting deemed conveyance will not conclude the issue of right, title and interest in the immovable property and to such an extent as is apprehended by the petitioner. It is not as if such an order is passed that the petitioners have no remedy to question the act of the society on the strength of such deemed conveyance. The petitioner can still bring a substantive suit on title and point out therein that as far as CTS No. 2396/2 is concerned, the reservation was shifted. .............."

(emphasis supplied)

20. There can be no duality of opinion on the nature and purport of the

proceedings before the Competent Authority. Indisputably, neither the

order passed by the Competent Authority under section 11 can be

construed to be determinative of the title to the property in respect of

which conveyance is ordered to be executed nor the party aggrieved by

3 2016 SCC OnLine Bom.9343

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said order is precluded from instituting the proceeding in the Civil Court in

order to establish or question the title to the said property. However, I find

it rather difficult to accede to the submission that the mere pendency of

this suit, bars the applicant-society from taking recourse to the remedy

provided by the provisions of MOFA. The reasons are not far to seek. One,

the suit still retains the character of a suit for declaration of shares in the

suit property and partition thereof. Two, in the instant suit, the question of

validity of the instruments executed by the vendors in favour of the

members of the applicant-society is neither raised nor required to be

determined. Three, the question as to whether the consent terms have been

fully complied with or otherwise has no bearing on the claim of the

applicant-society as the title of the vendors collectively is not in dispute.

21. In the aforesaid view of the matter, the observations of this Court, on

multiple occasions, that the proper remedy for the applicant-society was to

institute a suit for specific performance and seek conveyance of the suit

premises, are required to be construed in the context of the controversy

which was determined by the said orders. Undoubtedly, a decree for

specific performance cannot be passed in a notice of motion. However, it

does not imply that this Court was of the view that the statutory remedy

provided under MOFA was also not available to the applicant-society. That

question, in my considered view, did not arise for determination before this

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Court in any of the proceedings wherein, observations regarding the

entitlement of the applicant-society for conveyance were made.

22. I am mindful of the fact that eventually the Competent Authority

may consider the observations made by this Court. However, that is an

aspect which touches the merits of the application. At this juncture, as

indicated at the threshold, this Court is only considering the aspect of

justifiability of the prayer for impleadment of the Court Receiver as a party

respondent to the said proceeding.

23. On merits, the applicant-society may or may not be entitled to seek

the relief of Deemed Conveyance. Even the tenability of the application

may be agitated by the plaintiffs as being an inchoate exercise on the count

that the entire consideration has not been paid under the agreements for

sale on the strength of which Deemed Conveyance is sought. The

Competent Authority may decide all these issues on their own merits and

without being influenced any of the observations made in this order.

24. The submission on behalf of the plaintiffs rested in the invalidity of

the instruments on the count of the material alteration therein again, for

the aforesaid reasons, falls in the realm of the merits of the matter. The

recourse to the judgments which were sought to be relied upon on the said

point is thus not warranted.

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25. The matter can be looked at from a slightly different perspective.

Indisputably, in accordance with the consent terms dated 4th April 1991, the

Court Receiver was ordered to be continued till the suit premise is divided/

sold. Had the receiver been not appointed there would not have been any

fetter on the applicant-society from initiating the proceedings before the

Competent Authority. In fact, the applicant-society had filed the application

and it came to be dismissed on the count that it was not tenable for non-

impleadment of the Court Receiver as the property is custodia legis.

26. In the backdrop of the nature of the dispute and the attendant

circumstances, I do not find any justifiable reason not to grant the

permission to the applicant-society to implead the Court Receiver as a party

respondent to the proceeding which it desires to prosecute before the

Competent Authority under MOFA.

27. By way of abundant caution and at the cost of repetition, it is made

clear that the permission to implead the Court Receiver as a party

respondent, does not imply that this Court has considered either the

tenability of such application before the competent authority or the

justifiability of the claim of the applicant-society. The parties to the suit are

at liberty to take all objections available, in law and on facts, to both the

tenability of the application and the merits of the claim of the applicant-

society.

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28. The observations made hereinabove are only for the purpose of

determining the justifiability of the prayer seeking permission to implead

the Court Receiver, as a party respondent, and they shall not be construed

as an expression of opinion on the merits of the matter. Hence, the

application deserves to be allowed to the following extent :

ORDER

(i) The applicant-society is permitted to implead the Court

Receiver, High Court, Bombay as a party respondent to the

proceedings before the Competent Authority, if such a

proceeding is instituted by the applicant-society.

(ii) The Court Receiver is at liberty to participate in the said

proceedings, if impleaded, and engage a counsel to espouse its

cause.

(iii) The costs of the said proceedings qua the Court Receiver Digitally signed by shall be borne by the applicant-society.

Shraddha Shraddha
         K. Talekar
K.       Date:
Talekar  2021.02.26
         19:01:35

The application stands accordingly disposed of. +0530

[ N.J. JAMADAR, J. ]

Shraddha Talekar PS