Bombay High Court
Shree Ahuja Properties Pvt. Ltd vs 1A. Sushma Puri on 3 May, 2021
Bench: A. K. Menon
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
NOTICE OF MOTION NO.1318 OF 2019
IN
SUIT NO.760 OF 2019
Shree Ahuja Properties Pvt. Ltd. ] ... Applicant
In the matter between
Shree Ahuja Properties Pvt. Ltd. ] ... Plaintiff
V/s.
1. Brij Maraj ] ... (Deleted)
1(a). Sushma Puri ]
1(b). Shakti Bala Capildeo ]
1(c). Dr. Shashi Bala Kazim ]
2. Vandana Gursahani ]
3(a). Asha Nath ]
3(b). Lala Ravindra Nath ]
4(a). Shantilal L. Parmar ]
4(b). Jitendra S. Parmar ]
5. Rajesh Mishra and Beena R. Mishra ] ... (Deleted)
5(a). Rajesh Keval Mishra ]
5(b). Manmohan Keval Mishra ]
5(c). Kavita Keval Mishra ]
6. Brij Ahuja ]
7. Dr. Bina Wadhawan ]
8. Prabhat Ruia ]
9. Poonam Prabhat Ruia ]
10. Sayeda Mausuma ]
11. The Bandra Trilok Co-op. Hsg. Soc. Ltd. ] ... Defendants
And
Municipal Corporation of Greater Mumbai ] ... Respondent
1/51
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
::: Uploaded on - 04/05/2021 ::: Downloaded on - 09/09/2021 23:50:49 :::
Mr. Virag Tulzapurkar, Sr. Advocate, with Mr. Nitesh Ranavat, Ms. Disha
Shetty and Mr. Akash Lodha, i/by Wadia Ghandy & Co., for the Applicant-
Plaintiff.
Mr. Ranjit A. Thorat, Sr. Advocate, with Mr. Pradeep J. Thorat and Mr. Aniesh
S. Jadhav, for Defendant Nos.1, 2 and 3A to 3C.
Ms. Jennifer Michael, i/by Ms. Alisha Pinto, for Defendant Nos.4(a) & 4(b).
Ms. Sunita Poddar, with Ms. Daya S. Jadhav, i/by Mr. Rohan A. Waghmare, for
Defendant Nos.5(a), 5(b) and 5(c).
Mr. Sandesh Patil, i/by Mr. Asif Y. Memon, for Defendant No.6.
Mr. Vineet Naik, Sr. Advocate, with Mr. Karl Tamboly and Ms. Gauri Joshi,
i/by Ganesh & Co., for Defendant No.11.
Mr. S.U. Kamdar, Sr. Advocate, with Mr. Sagar Patil and Ms. Yamuna Parekh,
for Defendant No.12-MCGM.
CORAM : A. K. MENON, J.
RESERVED ON : 11TH FEBRUARY, 2021.
PRONOUNCED ON : 3RD MAY, 2021.
[ THROUGH VIDEO CONFERENCE ]
P.C. :
1. Called for hearing and final disposal.
2. The Notice of Motion seeks (i) appointment of the Court Receiver, High
Court, Bombay of flats, garages and rooms described in Exhibit-K to the
plaint; (ii) the power to take possession of the said premises, if necessary with
police assistance; (iii) to deliver vacant possession of the suit premises to the
plaintiff for the purposes of carrying out work of demolition and; (iv) an
order against defendant nos.1(a), 1(b), 1(c), (2), 3(a), 3(b), 4(a), 4(b), 5(a),
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
5(b), 5(c) and 6 to 10 restraining them from creating any impediment or
otherwise interfering with or obstructing performance of obligations under
the suit Lease and Development Agreement dated 31 st August 2018. The
aforesaid defendants are believed to be obstructing redevelopment project
undertaken by the plaintiff at the request of defendant no.11, which is a co-
operative housing society which manages the suit property. The facts as
revealed from the plaint are as follows:-
3. The plaintiff is a Body Corporate engaged in the business of real estate
development and was appointed by the defendant no.11 (hereinafter referred
to as "the society") for redevelopment of a piece and parcel of land
admeasuring 3,712 sq.meters and a second piece and parcel of land
admeasuring 334 sq.meters. Upon this land, stand three buildings "Trilok-A",
"Trilok-B" and "part of Trilok-C". Defendants 1(a), 1(b), 1(c), (2), 3(a), 3(b),
4(a) and 4(b) are members of the society. The remaining defendants are
occupants of the premises in the buildings owned and managed by the
society. The defendant nos.1(a), 1(b), 1(c), (2), 3(a), 3(b), 4(a) and 4(b) are
claiming as members. Defendant nos.5 to 9, both inclusive, are not members
of the society but are occupying various premises in the society.
4. For the sake of convenience, the tabulated statement below will be of
some assistance in understanding the capacity in which the defendants are
impleaded.
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
Defendants, who are Members/Occupants of the Flats,
but had not consented for redevelopment
Members / Occupants Description of Premises Status of Possession
Defendant No.1(a)
Defendant No.1(b) Flat No.C-14 in Trilok-C Member & Owner
Defendant No.1(c)
Defendant No.2 Flat No.C-15 in Trilok-C Member & Owner
Defendant No.3(a) Members & Owners
Flat No.C-4 in Trilok-C
Defendant No.3(b) (in joint occupation)
Flat No.B-16 in Trilok-B
Defendant No.4(a) Members & Owners
+
Defendant No.4(b) (in joint occupation)
Electricity Meter Room
Defendants, who are Non-Members/Occupants using Car Parking Spaces as
Garages and had objected for redevelopment
Non-Members /
Description of Premises Status of Possession
Occupants
Defendant No.5(a)
Garage No.B-12 Non-Member /
Defendant No.5(b)
in Trilok-B Occupant
Defendant No.5(c)
Garage Nos.B-8, B-9 & Non-Member /
Defendant No.6
B-10 in Trilok-B Occupant
Garage No.A-1 Non-Member /
Defendant No.7
in Trilok-A Occupant
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
Defendants are Non-Members/Occupants of the Flats and Garages,
who do not object to redevelopment, but had not handed over vacant possession.
[ These occupants have agreed for redevelopment and have executed documents,
but have not vacated the premises ]
Non-Members /
Description of Premises Status of Possession
Occupants
Flat Nos.B-26 & B-27 &
Non-Members / Occupants
Defendant Nos.8 & 9 Garage No.B-01
(in joint possession)
in Trilok-B
Defendant No.10 Flat No.B-5 in Trilok-B Non-Members / Occupants
5. The above tables set out the particulars of the premises and the nature
of the occupancy of these premises by the concerned defendants. The
defendant no.11-society owns and manages three buildings viz. "Trilok-A",
"Trilok-B" and "Trilok-C", constructed on a plot of land admeasuring 3,712
sq.mtrs. ("Plot A") and 334 sq.mtrs. ("Plot B"). The structures have a lower
ground or basement area and ground + 3 / 4 upper floors, housing 76 flats,
20 covered garages, 3 meter rooms, 1 transformer room and 1 small area
converted to a room below the central staircase in Trilok-B. Out of 76 flats,
possession of all but 7 flats have been handed over to the plaintiff for
demolition and redevelopment and out of the 20 garages, all but 6 garages
have been so handed over.
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
6. On or about 18th March 2013, the society convened a Special General
Body meeting of its members with the intention of obtaining approval for
redevelopment of the society's buildings by demolishing them and putting up
new construction exclusively for residential purpose and exploiting the full
development potential. In pursuance of this, a special general body meeting of
the society was convened on 18 th March 2013. Due notice is said to have been
given and at-least 3/4th of the members were present. In the presence of the
Deputy Registrar of Co-operative Societies nominated for the purpose, the
special general body considered various offers received and which were
examined by the Project Management Consultant ("the Consultant"). Five bids
received were taken up for discussion and the plaintiff was unanimously
selected. The society approved and appointed the plaintiff as developer. Soon
after the meeting, five members, who were overseas residents, had
communicated their consent to the appointment of the plaintiff. In all, 67
members consented to the appointment of the plaintiff. That represented
approximately 82% of the members. The plaintiff has relied on a copy of the
resolution dated 18th March 2013, which is annexed as Exhibit-D to the
plaint. The society formally communicated the plaintiff's appointment vide a
letter of 12th June 2013. Some delay in progressing with redevelopment arose
due to certain disputes between the plaintiff and the society.
7. The society filed a suit in this court being Suit No.506 of 2017 to
expedite the process of redevelopment. Consent Terms came to be arrived at
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
and were subject matter of the order dated 29 th August 2017. Subsequently,
consent terms came to be filed, which is made an order of the court on 9 th July
2018. Supplementary Consent Terms were later filed modifying same terms.
Pursuant thereto, the plaintiff executed a Deed of Conveyance in favour of the
society on 31st August 2018, conveying the land to the society. Thus, the
society is the absolute owner of the land and the structures standing thereon.
In the capacity as the owner, the society executed a Lease-cum-Development
Agreement and Power of Attorney also on 31 st August 2018, which have been
registered with the Sub-Registrar of Assurances. The plaintiff was thus
required to perform the said agreements and sought vacant possession of the
premises in occupation of the society's members and other
non-members/occupants. It is in this background that the suit has been filed.
8. The Lease-cum-Development Agreement is now being performed.
While the lease-cum-development agreement (collectively "agreement")
details the nature of the obligations of the parties, the plaintiff-developer has
highlighted the fact that they are required to pay a sum of Rs.144/- per sq.ft.
per month as inconvenience allowance, which works out to approximately
Rs.60 lakhs per month. This will be payable in view of the delay arising from
the defendants failing to vacate and handover the possession of the suit
premises described above. In addition to such inconvenience allowance, there
are other obligations of the developer, which required to be met. The
agreement also provided that the developer can institute legal proceedings, if
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
so required and that is how the present suit has been filed. The developer is
required to demolish and put up a new construction on the aforesaid Plot-A.
After all the premises including flats, car parking spaces and garages are
vacated, water and electricity supplies are to be disconnected. 67 persons
consist of members, non-members and occupants have since vacated and
handed over premises in that reference during and after September, 2017.
They have been paid hardship allowance amounting to Rs.19,53,78,310/- till
the date of filing of the suit. Some of these members / non-members /
occupants have vacated garages in their possession and in lieu of
surrendering the garages, they have agreed to accept residential area 38%
over and above the carpet area of the garages. They have thus co-operated
with the developer and the society.
9. Defendant nos.1(a), 1(b), 1(c), 2, 3(a), 3(b), 4(a), 4(b), 5(a), 5(b), 5(c)
and 6 to 10 have not handed over vacant possession of the suit premises. Of
these defendants, defendant nos.1(a), 1(b), 1(c), 2, 3(a), 3(b), 4(a) and 4(b)
have not consented to the redevelopment and have not handed over
flats/garages in their possession to the developer. Defendant nos.8, 9 and 10
have not objected to the redevelopment, but have not yet handed over
premises in their possession and they continue to be paid hardship allowance.
Defendant nos.5 to 7, who are non-members / occupants of garages B-12, B-
8, B-9, B-10 and A-1, are obstructing the proposed redevelopment despite the
society having executed the aforesaid agreement. Thus, defendant nos.8 to 10
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
are non-members/occupants, who are said to have handed over premises in
their possession to the developer. They are being paid hardship allowance and
were expected to execute relevant documentation after the suit was filed. The
plaintiff claims to be entitled to put up a residential premises on the plot by
utilizing fungible FSI, TDR and incentive FSI such that the full development
potential of the land is achieved. According to the plaintiff, it has complied
with the obligations set out in the consent terms dated 29 th August 2017 and
9th July 2018 referred to above and is believed to have expended substantial
amounts by appointing architects and consulting engineers and preparing
building plans. Amended plans have also been submitted. The plaintiff claims
to have received a Letter of Intent for providing public car parking, as
contemplated in Regulation 33(24) of the Development Control Regulations.
Intimation of Disapproval has been issued on 30 th June 2017 in respect of the
new building to be constructed and plans have also been sanctioned. These
are annexed to the plaint. Referring to these documents, Mr. Tulzapurkar
submitted that the plaintiff has also obtained permissions from the Chief Fire
Officer, Mumbai Fire Brigade, Ministry of Environment and Forests and the
Municipal Corporation. At the time of filing the suit, he submitted that the
plaintiff is also expecting the Civil Aviation Authority to issue their
permissions. The lease-cum-development agreement and power of attorney
were stamped and registered and presently the defendants are bound to
vacate the premises. TDR has been purchased and that has now to be utilized
in the new building. Large amounts of money have already been spent apart
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
from the loss of interest on amounts invested in the project and they continue
to spend Rs.60 lakhs towards hardship allowance. The defendant nos.1(a) to
4(b) are the only members who have refused to vacate the premises in their
possession. They have been offered the same terms as all other members who
have vacated the premises. Meanwhile, defendant nos.5 to 7, who are the
non-members and occupants of garages, have reused to cooperate only with a
view to pressurize the developer. These occupants were using their garages
for commercial activities. No permission has been obtained for carrying out
commercial activity in the premises. Change of user has not been permitted
and these premises continued to be "covered motor garages". Thus, defendants
nos.8, 9 and 10, who are also non-members, have not objected to
redevelopment, but have refused to vacate and handover their respective
premises.
10. Mr. Tulzapurkar submitted that the plaintiff has offered to provide
residential area by way of permanent alternate accommodation in the new
building. 38% additional carpet area has been offered to all the occupants free
of cost. He submitted that there is no challenge whatsoever to the
development agreement or the resolution passed by the society since 2018. He
submitted that the plaintiff had followed all the requirements of law
including the guidelines issued pursuant to Section 79A of the Maharashtra
Co-operative Societies Act, 1960. The garages have been wrongly converted
to commercial shops / spaces without permission of the Municipal
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
Corporation. There are no plans sanctioned for utilizing the premises for
commercial purposes. There is no conversion of change of user permitted
either. Mr. Tulzapurkar therefore submitted that the defendants nos.1 to 10
are pressurizing the plaintiff without any justifiable reason, despite the
plaintiff having made their best offers considering all commercial aspects. On
balance of convenience, Mr. Tulzapurkar submitted that most of the members
who have vacated are senior citizens waiting to return to their new
apartments and the plaintiff is put to a burden of paying Rs.60 lakhs towards
rent for the temporary alternate accommodation. It is submitted that the
society supports this application. Mr. Tulzapurkar then relied upon the
following judgments in support of his contentions :-
(1) Girish Mulchand Mehta and Anr. Vs. Mahesh S.
Mehta and Anr.1
(2) National Properties, Through its Proprietor Mr.
Sanjay Ghansham Jumani Vs. Sindhi Immigrants Co-
operative Housing Society Ltd. and Ors.2
(3) Disha Construction Vs. Jaysen S. Mastakar and Ors.3
(4) Calvin Properties and Housing Vs. Green Fields Co-
operative Housing Society Ltd. and Ors.4
(5) Ashwin L. Shah and Anr. Vs. Calvin Properties and
Housing and Ors.5
1 2010(2) Mh.L.J. 657
2 2019 SCC OnLine Bom 762
3 2014(2) Mh.L.J. 353
4 2013 SCC OnLine Bom 1455
5 Appeal (L) No.476 of 2013 in Arbitration Petition No.638 of 2013 (Judg. dt. 11-12-2013)
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
(6) Sarthak Developers Vs. Bank of India Amrut-Tara
Staff Co-operative Housing Society Ltd. and Ors. 6
(7) Hari Om Sayaji Properties LLP Vs. Yoga Yog Co-
operative Housing Society and Ors.7
(8) Harsha Co-op. Housing Society Ltd. and Ors. Vs.
Kishandas S. Rajpal and Ors.8
(9) Maya Developers Vs. Neelam R. Thakkar and Ors.9
(10) Kankubai Harakhlal Jain and Ors. Vs. Municipal
Corporation of Greater Mumbai and Ors.10
11. During the pendency of the suit, defendant nos.1 and 5 have passed
away. Their heirs have been brought on record. The cause of action survives
against such heirs. In the circumstances, Mr. Tulzapurkar submitted that the
interim relief be granted as prayed for against defendant nos.1(a) to 10.
During the pendency of the suit, some defendants have also settled their
disputes. Accordingly, defendant nos.8 and 9 have entered into consent terms
on 8th April 2019 with the plaintiff, thereby they confirmed having executed
permanent alternate accommodation agreement on 30 th March 2019 duly
registered. Defendant no.8 had handed over possession of flat nos.26 and 27
in B Wing and garage no.GB-01 to facilitate redevelopment. Defendant no.8
has also executed the agreement of permanent alternate accommodation after
receiving all amounts due under the Lease-cum-Development Agreement
dated 31st August 2018. Defendant no.9, being wife of defendant no.8, had
6 Appeal (L) No.310 of 2012 in Arbitration Petition No.1385 of 2010 (Judg. dt. 05-12-2012)
7 2016 SCC OnLine Bom 11877
8 Civil Writ Petition No.10285 of 2009 (Order dt. 08-03-2010)
9 (2016) 6 Bom.C.R. 629
10 OOCJ Writ Petition No.2351 of 2015 (Order dt. 01-10-2015)
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
also confirmed the settlement. I may also mention that in the course of
hearing on 15th February 2021, defendant nos.4(a) and 4(b) have also arrived
at a settlement with the plaintiff by virtue of which consent terms had been
arrived at and filed in this court. The suit stands disposed in terms of the
consent terms as against defendant nos.4(a), 4(b), 8 and 9. The suit therefore
survives as against defendant nos.1(a), 1(b), 1(c), 2, 3(a), 3(b), 5(a), 5(b), 5(c),
6, 7 and 10.
12. On behalf of the contesting defendant nos.1(a) to 1(c), Mr. Thorat has
relied upon an affidavit-in-reply filed by defendant no.1 on 11 th March 2019
and contended that these defendants never participated in any of the meetings
held by the society to discuss the matter relating to redevelopment. According
to him, the society has never given any notice of the meetings to defendant
nos.1, 2, 3(a) and 3(b) of any of the meetings conducted by the society. They
were never informed of the relevant meetings and therefore they could not
raise objections. Mr. Thorat submitted that the defendant no.11 illegally
constituted a committee and started negotiations for redevelopment with the
plaintiff. The deponent of the affidavit has denied that one Mrs. Hardevi
Rajpal had conveyed the suit property on 11 th August 2005 to the plaintiff. It
is contended that two flats in the society's building are owned by United
Building Corporation, which had constructed the building. They are not
members of the society. The garage in Trilok-C used by the society is not
owned by the society, but owned by United Building Corporation. According
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
to learned counsel, the buildings are habitable since repairs were carried out
from time to time and merely because these buildings were constructed in the
year 1965 does not mean that the buildings are inhabitable. According to the
deponent, repairs were carried out from time to time. The deponent
specifically denies that he had received notice of Special General Body
meeting dated 18th March 2013. According to the learned counsel, the society
had not taken defendant nos.1, 2 and 3(a) into confidence before executing
the Lease-cum-Development Agreement and Power of Attorney on 31 st
August 2018. The deponent has denied that the plaintiff has incurred any
costs.
13. The deponent has expressed serious doubts about the rights of the
plaintiff to carry out redevelopment. Mr. Thorat further submitted that the
defendant nos.1(a) to 3(b) have expressed lack of confidence in the capacity
of the plaintiff to carry out redevelopment work. He invited my attention to
the order passed by this court in IA/1/2020 in Commercial Arbitration
Petition No.1341 of 2019, wherein Shree Ahuja Properties and Realtors and
others were respondents-judgment debtors. The said respondents were not
able to pay the dues of the revenue in respect of TDS; however the plaintiff's
counsel has since pointed out that the company against whom the order was
passed in execution proceedings was not the present plaintiff but a different
entity.
14. Mr. Thorat also relied upon an order dated 17 th December 2019 passed
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
in Insolvency Petition No.38 of 2019, which indicates that insolvency petition
had been initiated against the developer however once again in that case the
company was a different entity and not the present plaintiff. Mr. Thorat
further submitted that the plaintiff has not approached the court with clean
hands and plaint does not disclose the true state of affairs. It is submitted that
although the defendant nos.1, 2 and 3(a) were not challenging the resolution
of redevelopment, there is an undertaking not to develop wing C before wings
A and B.
15. Relying upon an additional affidavit dated 17 th February 2020 of
defendant no.1, it was contended that the plaintiff had behaved highhandedly,
cut-off electricity and water supply to the flat occupied by defendant no.1; as
a result of which defendant no.1 was forced to file a police complaint. It is
submitted that the plaintiff has obtained a report from Global Engineering
Services to demolish portion of the building without damage to the premises
occupied by some of the occupants. The plaintiff has given such an
undertaking to safeguard premises occupied by the defendants who have not
vacated. The plaintiff was misleading the Municipal Corporation and this was
pointed out by the defendant no.1 along with other defendants vide letter
dated 9th January 2020 claiming to be owner of the premises when in fact it
was society which was the owner. According to Mr. Thorat, the plaintiff's
Advocate has circulated a letter in January, 2020 confirming that the
development activity was to be carried out phase-wise and in that view of the
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
matter, he submits that there is no urgency for vacating the premises or Court
Receiver is being appointed, however the plaintiff has illegally demolished
parts of the building housing the flats occupied by defendant nos.1, 2 and 3.
They have dumped debris causing inconvenience to the defendants who are
occupying the premises. In conclusion, Mr. Thorat submitted that given the
conduct of the plaintiff and it's financial incapability, it is not possible for the
plaintiff to redevelop this property. He therefore submitted that no relief be
granted.
16. On behalf of defendant nos.5, 5(a), 5(b) and 5(c) (collectively
"defendant no.5"), Ms. Poddar vehemently opposed the application. It is
submitted that her clients were in occupation of garage no.B-12 in B Wing.
This was commercial premises and she was not opposed to redevelopment on
the condition that the plaintiff offers the said defendants commercial premises
in the new building. If commercial premises were being offered, her clients
will consent to such redevelopment. She has submitted that defendant no.5
was a member of the society. The father of defendant no.5 had purchased a
flat with the consent of the society for running business in the name of Kewal
Art Production. Ms. Poddar submitted that the defendant no.5 since deceased
was represented through the heirs - present defendant nos.5(a), 5(b) and 5(c).
The plaintiff has been harassing defendant no.5 by not allowing customers to
load and unload goods in the premises, as a result of which police complaints
have been filed. On 4 th February 2019, defendant no.5 had agreed to sell the
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
premises as the court suggested that the plaintiff could purchase the premises,
if they were unable to provide alternate commercial premises in the same
locality. The defendant no.5 had agreed to the suggestion but the plaintiff has
failed to co-operate. Defendant no.5 has filed affidavits dated 22 nd November
2018, 22nd March 2019 and 5th April 2019 and Ms. Poddar relied on the
contents thereof. Ms. Poddar's grievance is that the plaintiff had started
demolishing part of the building which may damage her client's premises;
therefore defendant no.5 was unable to carry on business. The said
defendant's customers' cars had not been allowed in the premises and the
plaintiff has engaged goondas and security agencies to threaten customers of
defendant no.5. Without obtaining any permissions from the Municipal
Corporation, plaintiff has carried out digging work and demolition work,
thereby causing losses to defendant no.5. According to Ms. Poddar, the
premises were always a commercial premises and the attempts of the plaintiff
to demonstrate otherwise have failed. She has invited my attention to her
client's affidavit dated 22 nd November 2018, which sets out that the father of
defendant no.5 was the original owner of the premises, having purchased it
from one Gajanandas Ishwardas. The father of defendant no.5 later
transferred the garage in the name of defendant no.5's mother Beena, who
had expired in August, 2012 and that is how the names of the heirs were
brought on record. According to Ms. Poddar, after the premises were
transferred to the mother's name, the society has started issuing maintenance
bills in the name of the mother. Outgoings were paid for by mother. The
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
commercial premises were purchased from one P.S. Ajwani, the resident of
building A, who had a garage in building B. The garage was transferred to the
name of Kewal Art Production, now belonging to the deponent's father.
Accordingly, Ms. Poddar claims that her clients are owners of the commercial
premises, which have been turned into a shop. The Municipal Corporation
has assessed the premises as such and therefore allowed it to be used as
commercial premises. The society was also expected to issue a No Objection
Certificate in this respect, but did not. The defendants' father, who was
member of the society, had all records in this regard and the defendants'
father was also issued a certificate under the Shops and Establishment Act.
The society had been demanding arrears, which have been paid.
17. According to Ms. Poddar, the original builder - United Building
Corporation had issued a letter to the Mumbai Municipal Corporation
offering taxes for commercial premises in B Wing. These premises were
clearly commercial premises although described as a garage. It was never
used as a garage, vehicle(s) was never parked within it and hence it was not
necessary to establish this fact any further. According to Ms. Poddar, the
plaintiff has suppressed material facts. She has invited my attention to the
exhibits annexed to the 5th defendant's affidavit and contended that her
clients have been using the premises for commercial purposes right from
1972. Receipts are said to have been issued by one United Building
Corporation for payments made to them in respect of the flat. She sought to
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
rely upon these receipts. Drawing my attention to Exhibit-5 of her affidavit, it
is sought to be demonstrated that the original builders - United Building
Corporation, from whom defendant no.5 had purchased the property, have
also confirmed that the garage is purchased on 30 th November 1970. She
submitted that these are the aspects which clearly establish that commercial
use was permitted by all concerned. Relying on Exhibit-6 to the affidavit, she
submitted that society itself has conveyed no objection to garage described
therein as gala bearing no.B/G-12 on the ground floor of Trilok-B was
purchased by the defendant no.5 in the name of Kewal Art Production. A
pass-book issued by defendant no.11-society in the name of Kewal Art
Production and in respect of garage No.B/12 has also been produced. The
pass-book records various payments made by the members. Thus, there being
no doubt that the defendant no.5 was a bonafide purchaser and the right of
commercial use is vested in them and now upon demise of the original
defendant no.5, these rights now vest in defendant nos.5(a), 5(b) and 5(c).
18. Ms. Poddar has relied upon a Rateable Value Extract issued by the
Assistant Assessor & Collector dated 29 th October 1975, annexed at Exhibit-
10 to the affidavit, from which she sought to demonstrate that the garage
mentioned therein clearly shows that it was meant to carry on work of
commercial nature. For instance, three garages shown on the ground floor
were shown as furniture workshop, one was room of the society; one garage
was used as a tailoring shop. Thus, the fact that garages are being put to
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
commercial use is known to the society and was permitted by the society. Ms.
Poddar therefore submitted that the plaintiff has dishonestly attempted to
usurp the property by offering residential space.
19. I may observe here that Exhibit-11 to the affidavit is a notice issued
under Section 53(1) of the Maharashtra Regional and Town Planning Act,
1966 for unauthorised enclosure of the stilt area with a partition wall. Upon
receipt of this notice, the mother of the present defendant no.5 and on behalf
of Kewal Art Production written to the Ward Officer of the Municipal
Corporation seeking approval of construction plans.
20. In the affidavit-in-reply dated 22 nd November 2018, Ms. Poddar
submitted that the defendant no.5 had sought relief in the City Civil Court in
Suit No.1265 of 2014, thereby recognizing the flat of defendant no.5 and
restraining the plaintiff from taking illegal action pursuant to notice. The
court had observed that the wife of defendant no.5 was in possession. All
payments due to the society have been made regularly, as evident from
Exhibit-14 to the affidavit. The receipts have been issued by the society in
respect of garage GB-12. My attention was invited to these receipts, which are
annexed to the affidavit. The defendant no.5 has been negotiating with the
plaintiff but on 13th November 2017, he was forced to file a complaint. The
defendant no.5 had no desire to oppose redevelopment, but he was only
expecting to receive commercial space in the new construction in lien of
commercial space presently occupied.
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
21. Ms. Poddar also invited my attention to a further affidavit dated 22 nd
March 2019 to deal with a valuation report prepared by AT & TS Associates
pursuant to an order passed by this court on 4 th February 2019. By consent of
parties, the court has appointed the said Valuer to value the premises in
occupation of defendant nos.5 and 6. Valuation fees were required to be paid
50% by the plaintiff and the balance 50% by defendant nos.5 and 6.
Accordingly, a report has been filed. Ms. Poddar submitted that the report is
objectionable. No notice was given to her client by the concerned applicant.
The Secretary of the society informed defendant no.5 on the phone that the
Architect may come early in the morning and that defendant no.5 required to
remain present with documents. Defendant no.5 could not then attend, but
later he attended at the valuer's but has objected to the same on the basis that
looking at the entire report, the report has been prepared only in support of
the society. It was valuation of the garage and not of the shop. There are no
buyers for the garage and the valuation is not accepted. Thus, Ms. Poddar
submitted that even the society has admitted that save and except the record
as available today, there is nothing to show that the premises continued to be
a motor garage. According to Ms. Poddar and as set out in an additional
affidavit dated 5th April 2019, the plaintiff has disconnected water supply and
damaged the 5th defendant's vehicle and vehicles of his clients coming to the
premises. The police have also not taken any action on the complaints filed by
the defendant no.5. The plaintiff and the society had prevented the defendant
no.5 from earning his livelihood and that cutting of water supplies has meant
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
that the use of bathroom is also to be discontinued, which has been in use for
last 40 years. Defendant no.5 has refused to vacate the premises from which
he was earning his livelihood. The plaintiff was bound to provide alternate
premises.
22. Ms. Poddar invited my attention to the evidence led by the plaintiff in
Long Cause Suit No.163 of 2017 filed in the City Civil Court at Mumbai,
wherein the witness has admitted that he did not know whether notice under
Section 527 of the MMC Act had been issued or whether the society had
passed a resolution before filing the suit or whether any complaint had been
filed in the Municipal Corporation before filing the suit. When the witness
was cross-examined on behalf of defendant no.5 in this suit, the secretary was
unaware of the resolution passed authorizing the society to file the suit,
except to state that in 2007 a resolution was passed empowering the then
secretary to prosecute the suit. The society has admitted that the father of
defendant no.5 was member of the society and occupying the flat. The witness
stated that the father of the defendant no.5 was carrying out commercial
activities. This Ms. Poddar submitted clearly establishes commercial use of the
premises. All other aspects, to which the witness has deposed in the cross-
examination, supports the case of the defendant no.5. No sanctioned plan had
been produced even during the hearing in that suit; a fact that was admitted
in cross-examination and the issue that the plans, which were executed in the
suit, were not the sanctioned plans mentioned in the plaint.
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
23. Referring to the further cross-examination, Ms. Poddar relied upon the
society's witnesses' statement that father of defendant no.5 had purchased the
garage independently but was unaware whether there was business being
carried out in the garage. Plaintiff has admitted that the premises was assessed
as a shop by the Municipal Corporation. It must however be noted that the
same deponent has deposed that all buildings have been constructed in 1963
and 1965 and the witness was not aware that a shop had been constructed
and given to the father of defendant no.5.
24. Inviting my attention to the affidavit of one Dev Ashish Gupta filed on
behalf of the society, Ms. Poddar submitted that the society had admitted that
the Deed of Conveyance was executed between the original owner and
plaintiff only on 11th August 2005. Certain members had sought to illegally
use the garage as commercial premises and that the society had instituted
legal proceedings in the City Civil Court. She contended that the deponent
had admitted that the buildings were constructed in the year 1962 and that
the society had decided to redevelop the property by demolishing the existing
building on the land and to construct a similar building for residential
purpose. In the aforesaid manner, Ms. Poddar sought to establish that
redevelopment and taking over possession is not justified.
25. Having heard the rival contentions at length, I am of the view that the
plaintiff is entitled to relief. The affidavit on behalf of the Society records that
due to delay in redevelopment process, the society filed a suit against the
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
plaintiff to take up the process expeditiously and that ultimately a settlement
was arrived at, to which I have already referred above. Consent terms and
supplementary consent terms have been executed and accordingly orders
passed thereon. Thereafter, the Deed of Conveyance dated 31 st August 2018
was executed by the plaintiff in favour of the society whereby the property
was conveyed in favour of the society. Thus, the plaintiff executed a
Conveyance in favour of the society, thereby the land was conveyed. The
society thereafter executed a lease-cum-development agreement in favour of
the plaintiff. Reference is made to the complaints filed by defendant nos.1 to 3
and 6 with the Deputy Registrar of Co-operative Societies. As far as defendant
nos.1 and 2 are concerned, the complaint was dismissed by the Deputy
Registrar of Co-operative Societies. A complaint by defendant no.3 is said to
be similar to the ones filed by defendant nos.1 and 2, which has already been
dismissed. As far as the complaint of defendant no.6 is concerned, the Deputy
Registrar of Co-operative Societies dismissed it since defendant no.6 was not
even a member of the society and hence could not invoke provisions of
Maharashtra Co-operative Societies Act, 1960. The society has confirmed that
out of 74 members, 67 members have accepted hardship allowance from the
plaintiff and vacated their respective premises. Defendant nos.8 and 9 have
also settled with the plaintiff and have vacated their respective premises. As
far as defendant nos.4(a) and 4(b) are concerned, they have already settled
with the plaintiff and have executed consent terms. That leaves only
defendant nos.1(a), 1(b), 1(c), 2, 3(a), 3(b), 5(a), 5(b), 5(c), 6 and 7. Defendant
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
nos.1(a), 1(b), 1(c), 2, 3(a), 3(b), 5(a), 5(b), 5(c), 6, 7 and 10 have not vacated
their respective premises. Two flats were occupied by the tenants of the
original owner - United Building Corporation, but have since vacated their
respective premises. Thus, the redevelopment is being obstructed by
defendant nos.1(a), 1(b), 1(c), 2, 3(a), 3(b), 5(a), 5(b), 5(c), 6, 7 and 10, who
are pressurizing the plaintiff and thereby pressurizing the society to agree to
their demands. I propose to deal with the garages first. The three occupants of
the garage being defendant nos.5, 6 and 7 are refusing to vacate apparently to
extract further benefits. The society has dealt with in detail with the
contentions of the replies filed by each of the defendants.
26. As far as defendant no.5 is concerned, the society has now contended
that there is no merit in the contention of defendant no.5 that there is no
sanctioned plan since the sanctioned plan is now submitted to the City Civil
Court and it is a matter of record. The deponent has reiterated that the
premises of defendant no.5 is a garage utilized for parking of vehicles and
cannot be used for any other purposes. Referring to the documents relied
upon by defendant no.5, it is contended that the NOC relied upon by the
defendant no.5 in his affidavit-in-reply is a forged and fabricated document.
The NOC does not bear any seal or rubber-stamp of the society and no such
change of user could have been permitted by a simple letter and unless the
society has passed a resolution in a general body meeting of the society and
after obtaining permission from the Municipal Corporation. The society has
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
refuted the 5th defendant's contention that the members' pass-book relied
upon by defendant no.5 indicates that the garage is a commercial premises.
The society denies knowledge that the earlier owner was carrying out
commercial activities to the knowledge of the society. The shops and
establishment certificate only bears the address of the garage used by
defendant no.5 and it does not establish that use of the garage for commercial
purposes was allowed or that defendant no.5 was entitled in law to change
the use of the premises from car parking to that of a shop. Even otherwise,
issuance of a license cannot be deemed to be regularization of illegality.
27. I am of the view that without approval of the society and any
application being made for change of user and an order being passed thereon
by the Municipal Corporation, a garage could not have been converted for
commercial use in the manner that appears to have been done. It is in this
respect that I must take note of the affidavit filed on behalf of the Municipal
Corporation by one Dushantkumar Ahirwar, Assistant Engineer (Building
Proposal), "H" Ward, in which he has stated that having gone through the
papers in the matter and pursuant to the orders passed by this court on 11 th
March 2020, defendant no.12-Corporation was impleaded and after the
Corporation was impleaded, the deponent had checked the records of the
society and the plaintiff has submitted a proposal for the subject land and it
was issued a commencement certificate on 14 th August 2008. It was
subsequently re-validated on 14 th August 2020. The latest amended plans of
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
the building have been enclosed in the affidavit. There are no commercial
premises approved in the plan. It is therefore clear that in the new building
proposed to be constructed, no commercial premises are proposed to be
included. The question is whether, as far as defendant no.5 is concerned, the
defendant no.5 has made out a prima facie case of legitimate commercial use
of the premises and in that respect, I am afraid the 5 th defendant has failed to
establish his case that he was a commercial user of a shop premises situate
within the property of the society. Firstly, nothing on record indicates that the
original builders - United Building Corporation had constructed the garages
and on structures to be used as shops. They were plain and simple motor
garages. The plaintiff has shown the plan appearing at page no.893 of the
plaint being annexure to the affidavit-in-rejoinder dated 12 th February 2020,
filed as a rejoinder to the affidavit-in-reply dated 28 th March 2019 filed on
behalf of defendant no.6, and that plan clearly shows that the structures in
occupation of defendant nos.5, 6 and 7 are garages. The other structures
alongside are also seen to be described in the plan, namely, sub-station and
meter room. The reference to the root level and basement level also seen from
the plan of Block-A. The contesting defendants have not been able to show
anything to the contrary. The best evidence they could have produced was the
permissions from the Municipal Corporation for use of the premises as shops.
That is obviously not forthcoming. On the basis of the existing record
therefore one has to consider whether the occupants of the garages had made
out any case in opposition to the plaintiff's case and secondly in support of
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
their own such as to deny the plaintiff's application. In my view, the answer is
clearly in the negative. In other words, the defendants occupying garages
have failed to show that they were occupying commercial premises from the
outset and that these premises were recognized as commercial premises from
the outset. On the other hand, the society and the plaintiff have in my view
demonstrated beyond reasonable doubt that now almost 90% of the occupants
have consented with the redevelopment and the consent terms having been
arrived at with defendant nos.4(a), 4(b), 8 and 9, these defendants have
submitted to a decree. I may observe that defendant nos.5(a), 5(b) and 5(c)
had filed a rejoinder in reply to the affidavit of defendant no.11-MCGM, once
again seeking to reiterate that the society's contention that the NOC is false
and fabricated document is incorrect and reiterating that the members' pass-
book establishes that the premises is a commercial premises. In my view,
whatever may be the members' pass-book record, it is the Municipal
Corporation who had to permit use of the premises as commercial premises.
The record produced thus far indicates that these premises were clearly motor
garages and were always meant to be used as such. Commercial use was not
legitimate. The records of the Municipal Corporation do not support the
defendants' case of commercial use. Defendant nos.5(a) to 5(c) or defendant
nos.6 and 7 in my view have not demonstrated that the garages were always
meant for commercial use.
28. Defendant nos.5(a), 5(b) and 5(c), who, as I have already stated, have
filed a suit in the City Civil Court. Their contention that the suit is pending is
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
of no consequence. The present suit arises out of a project that the society has
entrusted the plaintiff with. An individual who is not even a member of the
society cannot by any stretch of imagination seek to control the manner in
which the society conducts its affairs. Ms. Poddar had also relied upon suit
filed by defendant no.5 against the society, wherein her client has challenged
the Municipal Corporation's notice requiring restoration of the structure
from commercial premises to a garage. That also will not assist defendant
nos.5(a) to 5(c) and in any event they are not members of the society and
appear to be merely occupants, who are claiming under persons who put
them in possession. Defendant nos.5(a) to 5(c) have claimed to have acquired
garage under an agreement which is in respect of a garage and not a shop.
The society has never accepted that it was a shop. Nothing has been shown to
this court that it was shop when it was constructed. If it was used as a shop,
later nothing has been shown to establish that change of user through
appropriate application was filed for permissions. At all material times, the
structures have been used as a garages and it is the plaintiff's case that
notwithstanding that the garages are free of FSI, they are offering additional
38% area to the occupants in the free-sale components. Thus, I am unable to
find any merit in the case of defendant nos.5(a) to 5(c).
29. As far as defendant no.6 is concerned, it is their contention that the
father of defendant no.6 purchased three garages for use as commercial
premises. Defendant no.6 has relied on several documents such as licenses
under Shops and Establishment Act and NOC is said to have been issued by
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
the society. Certain notices from the Municipal Corporation, bills for taxes
and what is described as sinking fund, certificate in the name of Ahuja Dairy
Farm. The society has countered this by contending that the three structures
occupied by defendant no.6 were never shops. They were always motor
garages, which appear to have been illegally used for commercial purposes.
As far as the NOC is concerned, it is stated to be forged being signed by one
Mudkatte, who had sold his premises and prior to the date when the NOC is
seen to be issued. Thus, as on the date of issuance of the so called NOC, the
signatory was neither a member nor occupier of any premises in the society.
Moreover, it appears that in Writ Petition filed in this court being Writ
Petition No.1734 of 2008, the court observed that defendant no.6 is a garage
owner. That writ petition came to be filed pursuant to a co-operative court
dispute filed by some of the occupants challenging the society's decision to
prevent garages from being used as shops, In the writ petition, the court held
that the society could not interfere with use of the premises by defendant no.6
except by following due process of law. The court did not consider or approve
the garages being described as shops. The contention that the garages have
toilets within cannot justify the garages being treated as shops. Nothing on
record shows that the toilets existed when they were constructed or it was
intended to so exist or that it was constructed after due permission for use of
the garages as shops. In my view, these are all contentions that cannot be
accepted.
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
30. Mr. Sandesh Patil on behalf of defendant no.6 has relied upon the
contents of an affidavit dated 28 th March 2019 of defendant no.6, who is
occupying three garages bearing nos.GB-8, GB-9 and GB-10. Reliance was
placed on the affidavit and a large number of documents annexed therewith
such as;
(i) bills of water charges and municipal taxes levied on
commercial basis,
(ii) sinking fund certificate issued in respect of the shop
premises - Ahuja Dairy Farm,
(iii) a reminder from the society addressed to Ahuja Dairy
Farm to pay the arrears of dues,
(iv) letter from the society to Ahuja Dairy Farm asking the
defendant no.6 to approach the Municipal Corporation
and find out how the water charges were levied as they
had surveyed the garages and whether they have taken
into consideration garages as commercial premises and
charged on commercial basis,
(v) the NOC dated 24th June 1977 certifying that furniture
workshops in the three garages have been purchased by
Ahuja Dairy Farm,
(vi) records of Metropolitan Magistrate's court recording
presence of and acquitting the accused - M.C. Ahuja of
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
some offences under Section 52 of the MRTP Act,
(vii) letter dated 22nd April 1977 received from the BSES Ltd.
relating to electricity meter connection, bills for the same
came to be issued for commercial use,
(viii) bills issued by the successor company-Adani Electricity,
(ix) shops and establishment licenses giving postal address at
the suit garages,
(x) earlier license issued to Kat Export International and
Anmol Real Estate Consultants - Estate Agency and,
(xi) notice under Section 53(1) of the MRTP Act.
31. Besides, reliance is placed on several bills issued by the society to Ahuja
Dairy Farm. He therefore contends that this is all overwhelming evidence that
garages were in fact commercial shops. He has also relied upon the suit filed
by the society. It is therefore submitted that there is clearly a case made out of
commercial use consistent over a period of time and despite change of
ownership. The fact remains that Exhibit-1 to the affidavit of defendant no.6
by way of objection to the valuation report, which affidavit is dated 28 th
March 2019 annexes a notice issued by the Municipal Corporation under
Section 351 of the MMC Act alleging change of user. The mere fact that
capital value extracts described the premises as shops, commercial car
parking in basement and podium cannot regularize such renewal use when it
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
was not permissible in the first place.
32. Mr. Patil had in support of the contentions of defendant no.6 relied
upon the decision in Anathula Sudhakar Vs. P. Buchi Reddy (Dead) By Lrs.
and Ors.11, wherein the Supreme Court was considering appropriate remedy
in various classes of cases. In paragraph 21 of that judgment, while
summarizing the position in relation to prohibitory injunctions, the court
observed that a finding on title cannot be recorded in a suit for injunction,
unless there are necessary pleadings and appropriate issues relating to title
and absent such averment in the plaint where there is no issue relating to
title, the court will not investigate or examine or render a finding on the issue
of title. In my view, this is of no assistance to Mr. Patil's case as it stands.
33. The Municipal Corporation has also filed a subsequent affidavit of 10 th
February 2021 at the hearing of this motion and in support of which Mr.
Kamdar appears. The affidavit is of one Ramchandra Sampatrao Sawant,
Assistant Engineer, who has deposed that the original sanctioned plan as of
1961 and the relevant record pertaining thereto is presently not traceable in
the office of the Municipal Corporation. A new file has been opened which is
available online and on the basis of which the earlier affidavit has been filed.
The photocopy of the completion certificate issued by the Architect in 1964 is
annexed to that affidavit. There is also plan available along with that
certificate. There is also one plan available on the record, which is annexed as
11 (2008) 4 SCC 594
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
Exhibit-B. From that plan, it is evident that the structures shown therein are
clearly motor vehicle garages. Reference to the meter room, alignment of the
structure, basement in the scanned image at Exhibit-B, read with the building
completion certificate at Exhibit-A in respect of the building B on the said suit
plot of land, as appearing on the Municipal Corporation's record, clearly
establish that there were motor garages and not shops at the relevant time.
The affidavit goes on to state that the record of Assessment Department has
been called for and the Deputy Superintendent S.S. Thakur produced the
record, which indicated that the premises were garages and were converted
for shop use and therefore the department had assessed the same for non-
residential and commercial users. Extracts for the period 1992-96, 2004-09
and 2010, April 2010 to March, 2015 and April 2015 till date have been
annexed.
34. The deponent has affirmed that he has spoken to the License
Department and no license has been issued for carrying out business in these
shops. The license issued to indicate number of persons working and
employed in that premises and only for registration purposes. For that matter,
the license itself contains a disclaimer which reads as "This is merely a
registration certificate and not license and it does not by itself bestow any
legality on the structure or confer any right on the employer so far the date
and time of existence of the structure in which this shop/establishment is
located". In conclusion, the deponent states that as per records of the
Municipal Corporation, as it is available, the premises is sanctioned for car
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
parking space and nothing else. The documents in support filed by the
deponent contained Exhibit-C, which are records of the Assessment and
Collection Department. Initially in March 1965, it is shown as the furniture
shop, one garage is shown as tailoring shop. The building is shown as "Bandra
Trilok Co-op." The third garage is also shown under the head "house with
shops". The record of 1992-96 also refers to garages. All of these are also
shown to be assessed as shops / commercial shops under capital value based
assessment extracts filed along with the affidavit. The question is, will the
assessment for the purpose of taxation by the Municipal Corporation be a
ground of permission to run a shop as far as the society is concerned? The
society being the owner of the property is undisputed. The members will be
only beneficial owners. Occupants even less so. Mere right of occupancy and/
or beneficial ownership will not in the facts of the case entitle the defendants
to claim unilateral right to convert premises for commercial use. The society
and the Municipal Corporation must also permit that in accordance with law.
Unless the Municipal Corporation as a Planning Authority permits use of the
premises for shops and in accordance with the provisions of the MMC Act,
mere assessment of tax as a commercial unit cannot legitimate commercial
use to begin with, which was not authorized in the first place. Viewed in this
light, it is obvious that reliance placed on these documents by the defendants
cannot help them to continue to insist and demand commercial premises in
the new building to be constructed, which has been seen from the society's
resolution is intended for only residential use. Despite being non-members,
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
some of them being offered residential space in the new building and of the
enhanced area. True, they may be carrying on commercial activities from
these garages, but will that alone thwart the attempts of the society to
redevelop when an overwhelming majority have voted for redevelopment and
are awaiting fulfillment of that resolution? The answer is emphatically in the
negative.
35. Defendant no.7 is in possession of garage no.GA-1. Defendant no.7 has
not appeared at the hearing of this motion and the plaintiff has proceeded
after serving the defendant no.7. An affidavit-of-service dated 26 th November
2018 is stated to be on file. The defendant no.7, it is stated, has already been
restrained from using the garage for commercial purpose by the City Civil
Court. As far as the garages are concerned, in Writ Petition No.2351 of 2015,
this court had occasion to consider commercial use of the garages. The court
observed that once it is styled as a "garage", the user cannot determine
entitlement of the petitioners. The petitioners had failed to establish any legal
right in seeking an alternate commercial structure as their occupancy of the
garage. The term "garage" has a specific legal connotation. As reflected in the
Development Control Regulations, it is an area for repairing vehicles or
parking vehicles by enclosing the same. The petitioners in that case had no
legal right to occupy garage and use it for commercial purpose based on a
claim that being user of the commercial premises in the old building, they
were entitled to claim permanent alternate commercial space in the new
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
building. The court also observed that no such entitlement has been
established under any law.
36. In my view, garages will and must remain garages unless they are
converted within the framework of the law for other uses. Their construction,
existence was meant for a particular purpose. If it is not being put to use for
that purpose and is intended to be used for some other purpose, a change of
user has to be authorized. That authority is the Planning Authority. The
Municipal Corporation in the case at hand has not issued any conversion
order and in that behalf suffice it to say that absent an order for conversion of
the motor vehicle garage, merely on the basis of long and unauthorized use
for commercial purposes, cannot justify continuance of such use and a
demand for being provided with alternate space in a structure that does not
exist today and for commercial use which is presently unauthorized. The case
of defendant nos.5 to 7 cannot therefore succeed. They have been offered
alternate residential space to the extent of their entitlement and they cannot
insist on being allotted commercial space in the new structure in which no
provision is made for such space. Any such permanent alternate space would
necessarily have to flow from two factors; firstly, the existence of commercial
space and with the consent of the society in a new building. Both these aspects
are not to be found in the case at hand. Thus, in my view, the attempt of the
defendant nos.5 to 7 to secure commercial space in the new building to be
constructed by obstructing redevelopment through their refusal to vacate the
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
premises cannot succeed.
37. That leaves me to consider the case of the flat holders. Of these flat
holders, it is now only defendant nos.1(a), 1(b), 1(c), 2, 3(a) and 3(b) whom
we are concerned with since defendant nos.4(a) and 4(b) had already entered
into consent terms and agreed to surrender possession. There are obviously a
lot of allegations and counter-allegations as between these contesting parties;
however when we see through these allegations in correspondence and
affidavits, to my mind it is clear that the defendants' resistance is at two levels.
The first is based on suspicion that the plaintiff will not be able to complete
the redevelopment owing to its own financial difficulties. In this respect, the
plaintiff has submitted that large amounts of monies have already been spent.
Defendant nos.1(a), 1(b), 1(c), 2, 3(a) and 3(b) are the flat holders. Defendant
nos.5(a), 5(b) and 5(c) are occupying garage GB-12. Defendant nos.1(a), 1(b)
and 1(c) are occupying flat No.C-14; defendant no.2 is occupying flat no.C-
15 and; defendant no.3(a) and 3(b) are occupying flat no.C-4. These persons
are occupying the wing which is yet to be demolished and they are
concerned, as canvassed by Mr. Thorat, with the ability of the builder to
complete the work. There are some reservations also expressed by them on
the manner of appointment of the plaintiff and that, as we have seen, has
already been subjected to the procedures to the extent required pursuant to
Section 79A and hence these objections have no merit.
38. As far as defendant nos.1(a), 1(b), 1(c), 2, 3(a) and 3(b) are concerned,
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
there is no challenge to the resolution dated 18 th March 2013 and when a
party does not challenge the very basis of the plaintiff's engagement, such
party can hardly be heard to say that the plaintiff has been appointed without
following due process of law or is otherwise incapable. Defendant nos.1 and 2
had filed a complaint before the Deputy Registrar of Co-operative Societies,
who had already rejected that complaint by order dated 3 rd November 2018.
There appears to be no challenge to that. Effectively, the special body
resolution holds the field. The other contention taken up by them is that the
buildings are not to be demolished since they are still habitable. Once the
society had resolved to demolish these buildings and redevelop the property, it
is not open for minority to state that the buildings should be retained and that
the same should not be demolished. How dangerous or dilapidated buildings
are is not the aspect for this court to presently examine. It is a decision that
the society had taken considering the age of the buildings. It is obvious that
the buildings are almost 50 years old. It does not appear as if the society is
acting in haste or in an unreasonable manner. The allegation of Mr. Thorat's
client and in his affidavit that the society did not consult with members before
executing the lease deed does not appear to have any basis, as I have already
stated that the proposal was approved in a special general body meeting and
recorded in the lease-cum-development agreement. Consent terms have also
been filed in the suit filed by the society against the plaintiff-developer, which
came to be settled by filing consent terms. Supplementary consent terms have
also been filed. The other contention of Mr. Thorat's client that the lease
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
granted by the original owner of the property Mrs. Hardevi Rajpal was still
subsisting in favour of United Building Corporation also appears to be
incorrect since according to the plaintiff, the lease was terminated in 1961;
yet, there had been no claim by that lessor. Thus, the case of defendant
nos.1(a), 1(b), 1(c), 2, 3(a) and 3(b) is clearly not convincing and does not
justify denying reliefs to the plaintiff.
39. As far as the flats are concerned and as I have already observed, there is
a resistance to "go with the flow"; however, the majority have decided and
defendant nos.1, 2 and 3(a) to 3(c) cannot prevent redevelopment by refusing
to co-operate. Consent terms are signed by and between defendant nos.4(a),
4(b), 8 and 9.
40. I now deal with some aspects canvassed on behalf of the plaintiff;
firstly, that there can be no doubt that minority members cannot obstruct and
prevent redevelopment supported by the majority. In this respect, Section 72
of the Maharashtra Co-operative Societies Act, 1960 is the basis. It falls under
Chapter VII dealing with "management of societies" and reads as follows :-
"72. Management of Societies :
Subject to the provisions in this Act and the rules, the
final authority of every society shall vest in the
general body of members in general meeting,
summoned in such a manner as may be specified in
the bye-laws.
[Where the bye-laws of a society so provide, the
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
general meeting shall be attended by delegates
appointed by the members, and such meeting shall be
deemed to be the meeting of the general body, for the
purpose of exercising all the powers of the general
body]."
41. With specific reference to the applicability of Section 79A of the
Maharashtra Co-operative Societies Act, 1960 and the scope of the directives
issued thereunder, this court has already held that the directives issued are
not mandatory but more of a recommendation. In Harsha Co-op. Housing
Society Ltd. and Ors. Vs. Kishandas S. Rajpal and Ors. 12, a learned Single Judge
of this court has while deciding Writ Petition No.10285 of 2009 held that the
said co-operative society resolved to act in a particular manner to redevelop
the society's property through a particular developer and by a large majority.
It is not necessary to go by the procedure set out in Section 79A or under
directives issued under Section 79A. Section 79A directives are only required
to be followed where there is no consensus or unanimity amongst the
members. However, in a more recent decision in the case of Maya Developers
Vs. Neelam R. Thakkar and Ors. 13, after considering a large number of cases
on the subject, this court has observed that in many cases a number of
complaints were received from members against the management of co-
operative societies wherein redevelopment was taking place. This related to
certain common aspects such as not taking the members into confidence in
the process of redevelopment, lack of transparency, arbitrary appointments of
12 Civil Writ Petition No.10285 of 2009 (Order dt. 8th March 2010)
13 2016 SCC OnLine Bom 6947
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
contractors and lack of planning, not adopting procedures and lack of
similarity in agreements. There was no contrary policy in this respect and it is
in this background that the directive with which we are concerned and which
is sought to be enforced upon on the plaintiff and the defendant-society gains
relevance. In Maya Developers (supra), this court has observed that the
directives are more in the nature of a set of guidelines and the 2009 guideline
in particular is more of a recommendation and it is not mandatory. Here in
the facts of the present case, almost close to 90% of the members have opted
for redevelopment through the plaintiff. The reasons for the others to resist
are unsustainable and in a co-operative society and in the light of Section 72
of the MCS Act, it is but obvious that the will of the majority must hold.
42. This has also been recognized in National Properties Vs. Sindhi
Immigrants Co-op. Housing Society Ltd and Ors. 14. By following the decision
in Maya Developers and Harsha Co-op. Housing Society (supra) , this court
has observed that even if the directives apply in the case at hand, the
development agreement had been executed, great amount of progress had
been made towards redevelopment and once a society supports
redevelopment with the consent of the majority, redevelopment must proceed
in accordance with law. The same principle would govern the facts of the
present case.
43. The plaintiff has secured all major permissions, as has been disclosed in
14 2019 SCC OnLine Bom 762
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
the plaint. The clearance from the Civil Aviation Authorities was then
expected and at this stage with a large and more than healthy majority
supporting the redevelopment, there is no occasion to prevent the plaintiff
from doing so. Thus, non-observance of some of the recommendatory
guidelines cannot render the process of redevelopment bad. As stated earlier,
a large majority of members of the defendant no.11-society have supported
the redevelopment by the plaintiff. This majority has resulted in the general
body, which is the supreme body taking a decision to redevelop the suit
property. The resolution has not been challenged. The resolution of the
general body not having been challenged, it is not open to the minority
members to today seek to oppose carrying out of the objectives of these
resolutions.
44. In Girish Mulchand Mehta and Anr. Vs. Mahesh S. Mehta and Anr. 15,
the Division Bench was considering a situation where some members of the
society sought to block the redevelopment sans any challenge to the resolution
of the general body and the court in paragraph 16 observed thus :
"By now it is well established position that once a person
becomes a member of the Co-operative Society, he loses
his individuality with the Society and he has no
independent rights except those given to him by the
statute and Bye-laws. The member has to speak through
the Society or rather the Society alone can act and speaks
for him qua the rights and duties of the Society as a
body."
15 2010(2) Mh.L.J. 657
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
45. Reference is made to the Daman Singh and Ors. Vs. State of Punjab16 in
this respect. The Division Bench also made reference to State of U.P. Vs.
Chheoki Employees Co-op. Society Ltd. 17, in which the Apex Court observed
that a member of a society has no independent right qua the society and it is
the society that is entitled to represent as a Corporate Aggregate. Using an
appropriate phrase, the Supreme Court observed that the "stream cannot rise
higher than the source".
46. In that view of the matter, it is not open for the defendant nos.1(a) to
3(b) and defendant nos.5, 6 and 7 to obstruct the redevelopment process. That
having been said, I must observe that it is only defendants 1(a), 1(b), 1(c), 2,
3(a) and 3(b) who are members or claiming through members. The others,
namely, the occupants of garages, are purchasers. They are not members of
the society. Their attempts at gaining membership has been challenged and
they are yet non-members and merely occupants. Their rights qua the society
are also to be considered on the same platform. The question therefore arises
is whether a non-member / occupant is competent and entitled to question
the resolution passed by the society, whose property he or she occupies and in
my view the answer is clearly in the negative. The majority having willed
redevelopment, it is not possible for a non-member / occupant to obstruct it.
47. In Mont Blanc Co-operative Housing Society Ltd. Vs. State of
16 AIR 1985 SC 973
17 AIR 1997 SC 1413
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
Maharashtra18 and Matru Ashish Co-operative Housing Society Ltd., Mumbai
Vs. State of Maharashtra19, different Division Benches of this court have taken
a view that although the State Government may in public interest and for the
purpose of securing implementation of provisions of the Maharashtra Co-
operative Societies Act, 1960, issue directions to any class of societies, the
interest of the societies cannot be prejudiced by such directions. The power of
the State Government therefore cannot be exercised in a manner such as to
cause prejudice to the interest of the society, which is the paramount
consideration. In the present case, a large majority have opted for
redevelopment. Substantial progress has been made. The plaintiff has shown
its bonafides by conveying the land, upon which the building is to be
constructed to the society. Thereafter the society has executed the lease-cum-
development agreement. Substantial amounts have been expended towards
payment of rent, deposits, bank guarantees have been established to the value
of Rs.115,46,89,716/-.
48. The plaintiff has demonstrated its willingness to perform. The members
have been patiently waiting to see the commencement of redevelopment
activities and they continue to wait in the hope of securing possession of the
newly constructed permanent alternate accommodation. If the defendants'
contentions qua the applicability of the guidelines issued under Section 79A
are to be strictly enforced and that is likely to cause further prejudice to the
18 2007 (4) Mh.L.J. 595
19 2012 (1) Mh.L.J. 126
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
society and to the members, these guidelines certainly cannot be wielded as a
sword and indeed it is not intended to be. On the other hand, the guidelines
are meant to protect societies and their members against arbitrary actions of
the managements or of developers, who collude with managements to deprive
the society and its body of members - the corporate aggregate, to be deprived
of the benefits of such redevelopment. It is in such situations that strict
enforcement of the guidelines may be justified.
49. In the present case, the objections taken on behalf of defendants qua
these guidelines are unsustainable given the state of readiness of the plaintiff
to carry out redevelopment work. This aspect has also been considered in
Disha Construction Vs. Jaysen S. Mastakar and Ors. 20, in which this court has
observed that the plaintiff in that case had incurred considerable amounts for
carrying out work and 27 non-co-operative members, out of a total of 120,
were attempting to stall the redevelopment. The building was in a dilapidated
condition and the balance of convenience is found to be clearly in favour of
the plaintiff-developer and the large number of members of the society were
out of their premises and awaiting the construction of their new permanent
alternate accommodation for more than a year. In the present case, the
agreement has been entered into in the year 2018; yet, there is no progress.
The developer has apparently incurred a large sums of money towards
payment of monthly rent to those who have left the building, left their
apartments and the developer has also provided a bank guarantee in a sum of
20 2014 (2) Mh.L.J. 353
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
Rs.115,46,89,716/- to secure the interest of the society and its members.
There has been no default of any substantial nature that the members or the
defendant no.11 society have complained of, nor have the non-co-operative
members been able to demonstrate any gross illegality, negligence or neglect
on the part of the developer. The view taken by this court in Girish Mulchand
Mehta (supra) has been followed consistently and indeed that view is binding
on this court.
50. In Sarthak Developers Vs. Bank of India Amrut-Tara Staff Co-operative
Housing Society Ltd. and Ors. 21, a Division Bench of this court has considered
the effect of dissenting minorities and observed that the dissenting minority
members cannot be allowed to obstruct redevelopment when the developer
has spent large sums of money and had appointed a Court Receiver
considering the fact that the large majority were supporting redevelopment
and had vacated their flats. The court observed that if the Court Receiver was
not appointed, such majority members will be left in the lurch at the behest of
a minuscule minority. It will be useful to make reference to paragraphs 16
and 17 of the judgment in Sarthak Developers (supra), which are reproduced
below :-
"16. The material before the court is sufficient to indicate
that the appellant has a strong prima facie case for the
appointment of a receiver, having invested valuable
consideration towards and in execution of the
agreement. But most significantly, the appointment of a
21 Appeal (L) No.310 of 2012 (Order dt. 5th December 2012)
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
Receiver is warranted having due regard to the fact
that unless such an order were to be passed, 149
members of the society, who are supporting the
redevelopment and of whom 143 have vacated their
flats, would be left in the lurch at the behest of a
minuscule minority.
17. The appointment of a receiver is undoubtedly a drastic
order, but the court is empowered to do so on well-
established principles of it being just and convenient.
There are several reasons which must weigh in favour
of the appointment of a receiver. Firstly, the condition
of the property in question is a matter of importance in
the city of Mumbai which is affected by a high degree
of saline corrosion. The buildings are admittedly
dilapidated and in urgent need of repair or
redevelopment. The society was not in a position to
carry out repairs having regard to the fact that in
August 2007, the cost of repair was estimated at
Rs.1.65 crores by its structural consultant. Hence, the
option of redevelopment which has been accepted in
the resolution passed by the Society would have to be
respected. Secondly, in the present case, an
overwhelmingly large proportion of the members of
the society have consented to the scheme of
redevelopment and have in fact vacated their premises.
The interests of those 149 members who are
supporting redevelopment and of whom 143 have
vacated are of paramount concern. Thirdly, unless a
receiver was to be appointed, it will be open to a
dissenting minority of a few members to obstruct and
defeat the will of the large majority. Fourthly, each of
the dissenting members is also, like all the members of
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
the society, entitled to permanent alternate
accommodation free of cost in the redeveloped
building. An enhancement of the existing areas in
occupation is envisaged in the redeveloped building. In
the meantime, each of the members shall be entitled to
compensation for transit accommodation as agreed
with the Co-operative Society and as paid to all other
members. This is not a case where a scheme of
redevelopment is oppressive to the legitimate interests
of a minority nor has any such submission been urged."
51. Accordingly, in this case as well, I am of the view that appointment of
the Court Receiver is unavoidable and the only way for the society to comply
with its obligations achieve intention of the general body of the society.
Moreover, with specific reference to the demand of the garage owners, who
are non-members, this court has in the case of Hari Om Sayaji Properties LLP
Vs. Yoga Yog Co-op. Housing Society and Ors. 22, held that a member are
entitled to benefits of redevelopment only in respect of area which is
legitimately occupied by them. Although it is not entirely in the context of the
nature of user but rather on the extent of the area, in the present case, the
change of user has been unauthorized. It is not legal and the Municipal
Corporation's affidavits have made it clear that right from the inception, these
were motor garages, they were never shops. To that extent, the demand for
commercial space in the new building and the insistence of defendants
concerned that they would co-operate in the matter of redevelopment only if
22 2016 SCC OnLine Bom 11877
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
they are provided commercial space in the new building cannot be sustained.
These non-cooperative occupants thus appear to be holding the majority to
ransom and a demand of this nature for providing commercial space in a
building, which has been proposed to be exclusively residential, cannot be
sustained. This in the face of the fact that the occupants are not being
deprived of areas occupied by them, but on the other hand, they are being
offered 38% additional area by way of a residential apartment, it matters not
whether a residential apartment of that size is impractical. In the larger
interest of the members of a society, this is the only solution that is in sight.
The minority must make way for the majority. If they are to continue in as
part of the society, they would also be in a position to seek membership of the
society, which they presently do not enjoy. Equally, for the flat owners of
defendant nos.1(a), 1(b), 1(c), 2 and 3 garage occupants, their resistance to
support redevelopment is on the grounds that are specious and cannot be
supported.
52. In view of the above, I pass the following order :-
(i) The Notice of Motion is made absolute in terms of prayer
clauses (a) and (b).
(ii) In the event any of the defendants decline to handover
possession upon being called upon to do so by the Court
Receiver, the Receiver may seek appropriate directions
from the court prior to taking forcible possession and by
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
seeking police assistance.
(iii) No order as to costs.
(iv) Notice of Motion is disposed in the above terms.
At this stage, the learned counsel on behalf of defendant
nos.1 to 3, and 5(a), 5(b), 5(c) and 6 seeks stay of the
order. Order is stayed for four weeks.
(A. K. MENON, J.)
NMS-1318-2019-Shree Ahuja Properties(f).doc
Dixit
