Shahveer Padam Kapadia And Anr vs Omkar Realtors And Developers ...
2022 Latest Caselaw 3585 Bom

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

          COMM. ARBITRATION PETITION (L) NO. 25612 OF 2021
Shanveer Padam Kapadia and Anr.            ...    Petitioners
     Versus
Omkar Realtors and Developers Pvt. Ltd.
and Anr.                                   ...    Respondents
                              WITH
              COMM. APPEAL (L) NO. 9850 OF 2022
                                IN
     COMM. ARBITRATION PETITION (L) NO. 25612 OF 2021
Omkar Realtors and Developers Pvt. Ltd.
and Anr.                                                     ...       Appellants
     Versus
Shanveer Padam Kapadia and Anr.                              ...       Respondents
                                  ******
Mr. Haresh Jagtiani, Senior Advocate a/w Mr. Suprabh Jain,
Mrs.Vandana Mehta Kumavat and Mr. Mohammed Shariq Shaikh i/by
Mr. Suprabh Jain & Mrs. Vandana Mehta Kumavat for the Petitioners.
Mrs. Kanchan Rane, 1st Asst. to Court Receiver.
Mr. Yogesh Patil i/by Vijay Patil for S.R.A.
Mr. Jamsheed Master a/w Aftab Diamondwala, Genevieve D'souza and
Sheetal Shrivastav i/by Diamondwala & Co. for the Respondents.
                                  ******
                                        CORAM: G. S. KULKARNI, J.

DATE : 4th APRIL, 2022

P.C. :-

. On the backdrop of the order dated 21 st March, 2022, the proceedings are listed today, to be heard on the reliefs as prayed for in prayer clause (b) of the petition, which reads thus :-

"(b) deposit default interest @ 12% p.a. on Rs.22,41,000/- (Rupees Twenty Two Crores Forty One Lacs Only) for the period of 1 st January, 2020 til the completion of the said lift shaft work in flat 6501 such that no inconvenience is caused to the petitioners while using, occupying and enjoying the said flat in this Hon'ble Court and the petitioners to withdraw the said amount on such conditions as bdp

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this Hon'ble Court may deem fit and proper, as per particulars of claim."

2. The case of the petitioner in praying for the above reliefs is on the basis of a contract between the parties created under the letter dated 15th July, 2019 of respondent no.1, which is in the context of delay on the part of the respondent no.1 to give possession of the flat in question to the petitioner. By such letter respondent no.1 acknowledged the delay in granting of possession of 'one series flat' to the petitioner and a compensation arrangement was agreed by the respondent no.1 in the event, the possession of the flat was not to be handed over to the petitioner on or before 31 st December, 2019, which is to the effect as agreed in paragraph 4.6 of the said letter of respondent no.1. Clause 4.6 and the other relevant clauses of the said letter required to be noted, which reads thus :-

"4.1 Today, on 15th July, 2019, the promoter and the confirming party have handed over to the purchasers the possession of the said flat along with the letter of possession dated 15 th July, 2019 ("Possession date") 4.2 However, the lift shaft and other related work in the said flat is still not completed and therefore, the purchasers will not be able to completely occupy, use and enjoy said flat.

4.4 The promoter and the confirming party hereby undertake to the purchasers that the promoter and the confirming party will complete the said lift shaft and other related work in the flat no later than 31 st December, 2019 such that on and from 1 st January, 2020 no inconvenience is caused to the purchasers on account of said lift shaft work and they can use, occupy and enjoy the said flat.

4.5 The promoter and the confirming party also confirm that in carrying out the lift shaft and other work in the said flat, the promoter and the confirming party will be solely responsible and liable for any loss, damage, injury or destruction that may be caused to the said flat, any person or property; and the promoter and the confirming party, jointly and severally, undertake to indemnify and keep indemnified the purchasers against any and all losses, claims, demands, actions, damages, costs, liabilities, expenses or payments of any nature whatsoever arising in any way as a direct consequence bdp

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of work carried out by the promoter and/or the conforming party. 4.6 If, for any reason whatsoever, the promoter and the confirming party are unable to complete the said lift shaft and/or the other work by 31st December, 2019, the promoter and the confirming party covenant to pay the purchasers default interest @ 12% p.a. on Rs.22,41,00,000 (Rupees Twenty Two Crores Forty One Lakhs only) paid by the purchasers with respect to the said flat, for the period commencing from 1st January, 2020 till the completion of the said lift shaft work in the said flat and they can use, occupy and enjoy the said flat."

(emphasis supplied)

2. In the context of today's hearing, it needs to be noted that in the earlier order passed by this Court dated 21st March, 2022, in paragraph 20(d), it had observed as follows :-

20(d) In so far as the contention of the petitioner that the admitted amounts as agreed to be paid by the respondents as damages to the petitioners is concerned, it is appropriate that the parties are heard on such issue on the adjourned date of hearing. For the parties to make submissions in that regard, stand over to 4 April 2022 at 2.30 p.m.

3. Accordingly the proceedings are listed today. An additional affidavit dated 4th April, 2022 is filed on behalf of the respondent no.1 by Mr. Nilesh Palande, who has described himself as the director of respondent no.1. The additional affidavit was served on the advocate for the petitioner just before the proceedings were called out at 3:30 p.m. today. It needs to be noted that when this Court passed an order dated 21st March, 2022, this Court had made serious observations on the conduct of the respondents considering inter-alia their glaringly dishonest conduct as recorded in paragraphs 17, 18 and 19 which read thus :-

17. From the reply affidavit, it appears to be absolutely clear that the intention, not to operationalize these lifts is keeping in mind the proposed construction above the 69th floor. This is more apparent from the reply affidavit as filed on 3 March 2022 by Mr. Nilesh Palande, one of the directors of respondent no.1. It is impossible to accept such plea as the same logic would then apply to the other five bdp

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lifts which are already made operational. Another aspect pointed out in such affidavit relates to the financial difficulties and inability to mobilize the cost of Rs.1.15 crores. In fact, the whole attempt is that when the lenders release the requisite funds, only then, the work would be undertaken and the lift could be made operational, is the stand of the respondents, and till that time the petitioner who has parted such huge amounts to purchase the flat needs to wait.

18. Perusal of the respondents' affidavit in fact, in my opinion, would show the glaringly dishonest stand taken by respondent no.1 in regard to the feasibility of putting up lifts for the 'O1 series' flats as also on removing of the struts. These are the issues which were confronted to the respondents from the very beginning of the present proceedings. Although the respondents initially painted a rosy picture that when the ED/SRA would revoke the stop work notice qua the internal work, such work can be immediately undertaken and completed. This Court, at that point of time had believed such stand of the respondent to be bonafide and in the interest of the petitioner, and possibly other flat purchasers similar to the petitioners, who after having paid so heavily for their respective flats, were not in a position to occupy the same. The Court hence had passed orders, as noted above in pursuance of which, the ED/ SRA granted the respondents permission to undertake the internal work. Thus, the Court enabled the respondents to undertake such internal work only to realize later, that there is no real intention on the part of the respondents to complete the internal work as well as to remove the struts. This was not only clear from the affidavits of the respondents but the vehemence of the submissions made by the learned counsel for the respondents justifying such intention. What was sought to be creeped into by subsequent affidavits of the respondents is a bogey of false pleas and now a stand of financial difficulties which was never the case of the respondents when the initial orders were passed by the Court. This apart, coupled with a plea of financial difficulties, a false, dubious and a dismal picture is sought to be created, that installing of a lift in a building which has already been granted part occupation certificate upto 69th floor, is an impossibility. All these contentions appears to be a total eye wash, which are now completely exposed as a falsity from the reports which are submitted by the other experts. For these reasons the contentions as urged on behalf of respondents in the affidavits, so as to not grant the immediate necessary reliefs to the petitioners, cannot in any manner be accepted, as it would amount to accepting an unrealistic and a dishonest stand taken by the respondents, which in fact is an attempt to mislead the Court.

19. Respondents appear to have completely abused their contractual position in dealing with the petitioners as is clear from the record.

The petitioners have been meted out an unjust, unjustifiable and unscrupulous treatment qua the possession of their flat. In fact, the bdp

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submissions as made on behalf of the respondents shocks the conscience of the Court, as the submissions are totally oblivious to the factual and realistic position. The photographs of the flat not only show the huge iron struts inside the petitioners flat, but also, debris and other scrap materials. Respondents in their dominant position against the flat purchaser also have the audacity to offer possession of the flat which is in such an inhabitable state to the petitioners. The flat purchasers who have fully parted with valuable consideration, under no circumstances can be meted out with such treatment by any developer. However, this case appears to be somewhat different as ostensibly the directors of respondents appear to have a total disconnect as to what is happening on the site and of the arbitrariness and illegalities of those who are now at the helm of affairs, whose actions are causing a serious prejudice to the flat purchasers like the petitioners. There is no justification whatsoever for the respondents not to put the petitioners in the same position as the other flat purchasers , and to make the flat ready in all respect including operationalizing the lift and also removing the struts. If the respondent and its directors and those who are currently managing the affairs of respondent no.1 are of the opinion that they can overreach law and are above law and that they can wantonly defy contractual obligations, they are completely under a false and mistaken belief/notion. The strong arms of law need to reach to such developers, who abuse their position of trust which they enjoy in the capacity as developers and who deceive the flat purchasers after receiving the full consideration for the flats they sell. The respondents in the present case have acted contrary to several laws under which they are under an obligation not only to hand over the completed flats within a time bound manner, but also, that all obligations under the contract entered into with the flat purchasers are fulfilled. Also the jugglery of words and inconsistencies of the different pleas of the respondents is required to be firmly dealt with. Such approach of the litigants who have intention to mislead the Court and cause abuse of the process of law cannot be taken lightly. The law would required to be applied firmly to those who carry the impression that they can get away committing brazen breach of their contractual obligations.

4. It is informed by Mr. Jagtiani, learned Senior Counsel for the petitioner that the order dated 21 st March, 2022 passed by this Court was carried in appeal by the respondents (Comm. Appeal (L) No. 9850 of 2022) and the same came to be dismissed by the Division Bench by its judgment and order dated 30 th March, 2022. The said judgment has been placed on record as annexed to the additional bdp

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affidavit filed on behalf of the respondent no.1. The judgment of the Division Bench has confirmed the order passed by this Court. Mr. Jagtiani, learned Senior Counsel, has drawn my attention to the observations made by the Appeal Court which according to him deprecates the conduct of the respondents. Mr. Jagtiani has drawn, my attention to paragraph nos. 22, 26, 28 and 33 of the said order, which reads thus :-

22. This is the clearest admission by Omkar Realtors that it is in total, blatant and flagrant breach of all its contractual obligations to the Kapadias - Including the subsequent 2019 supplementary agreement or covenant.

26. Omkar Realtors does not get to tell the Kapadias -- or the Court --

as it now does that "We cannot honour our commitments under our contracts with the Kapadias, but that matters not at all. We will perform our contract as and when (and possibly if) we are able without making any kind of commitment. In the meantime, no order should be made by any Court against us." That is the entirety of the argument canvassed in Appeal.

28. Is the impugned order actually in the form of a decree for specific performance as Mr Madon contends? Let us consider what is actually being said when this submission is made. Omkar Realtors has not repudiated its flat-sale contract with the Kapadias. In fact, it has reaffirmed it in the second agreement of 2019. Omkar Realtors is in breach of both contracts. The Kapadias have not condoned the breach and extended time for performance. Omkar Realtors admits its breach. It has instituted no proceedings to absolve it of its contractual obligations. It does not even claim that either of these agreements is incapable of performance. It only says that Omkar Realtors should not be held to its obligations in contract for performance because it is presently most inconvenient to Omkar Realtors. The law admits of no such reason. It is plainly absurd. On this, Omkar Realtors says (a) there should be no order in equity made against it; and (b) the Kapadias should seek specific performance -- to which there is no answer really -- so that Omkar Realtors achieves its solitary purpose of buying time.

33. Should the argument be that the impugned order is 'mandatory' in nature and, for that reason, vulnerable, we would have hesitation in repelling the submission directly. Such an order, even as an ad-

interim one, and even if described as 'mandatory', is always possible where strong circumstances indicate that the order would protect the rights and interests of both sides, and that refusing relief would bdp

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be unjust: Hammad Ahmed v Abdul Majeed, (2019) 14 SCC 1, explaining and clarifying the ratio in Samir Narain Bhojwani v Aurora Properties and Investments, (2018) 17 SCC 203.

5. On the above conspectus, attention of the Court was drawn to additional affidavit of Mr. Nilesh Palande as tendered by Mr. Master on behalf of the respondent no.1 and more particularly, the statements made in paragraphs 3 and 4. The said paragraphs of the affidavit are required to be noted, which read as follows:-

"3. I further say that the petitioner's claim for alleged compensation is based on surmises that petitioner's Flat No. 6501 is not habitable which is entirely incorrect and wrong as Part Occupation Certificate dated 28th July, 2017 is issued till 69 th floors by Slum Rehabilitation Authority and not only petitioner's Flat No. 6501 but entire 01 series of the flats in the building are certified habitable with permission to occupy by the Statutory Authority and 29 owners are occupying the 01 series flats in the Tower A building at present.

4. I further say that to support his claim of alleged compensation, petitioner also tried to canvas before this Hon'ble Court incorrect picture as if there is no lift in the building and petitioner cannot access his flat, when there are 7 lifts i.e. A1, A2, A3, A4, A5, AF1 and AF2 are operational in the building and used by the owners of the respective flats including 01 series flat owners and petitioner also can access his flat using the same lifts."

(emphasis supplied)

6. In my opinion, the above statements as made in paragraphs 3 and 4 of Mr. Nilesh Palande's affidavit would shock the conscience of the Court when he says that Flat No. 6501 is not habitable and secondly, when he says that the petitioner is canvassing an incorrect picture that there is no lift in the building and the other lifts are operational by which the petitioner can access his flat. These statements are in the teeth of the observations as made by this Court in the order dated 21 March, 2022 and further order dated 30 March, 2022 passed by the Division Bench dismissing the respondents' appeal.

In both such orders, the Court has categorically observed that the petitioner's flat is not habitable as also the concerned lift which was bdp

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agreed to be provided is not operational. By making such statement, the entire attempt of Mr. Nilesh Palande appears to overreach the observations as made by this Court in order dated 21 March, 2022 as also the order dated 30 March, 2022 passed by the Division Bench when a contrary position to what was observed is being canvassed by Mr. Nilesh Palande, This would certainly amount to assertion of a false plea and in the teeth of such orders passed by the Court when the Court in categorical terms had held that the flat of the petitioner is not habitable. In my opinion, the above statement in the affidavit of Mr. Nilesh Palande certainly are of the nature which are ex-facie false, misleading and interfering in the administration of justice, for which appropriate orders would be required to be passed.

7. At this stage, Mr. Master states that he would intend to take instructions as to whether his clients would nevertheless be inclined to maintain the said affidavit of Mr. Nilesh Palande be to part of the proceedings and/or take appropriate position in that regard. Be that as it may, such additional affidavit is already tendered on record.

8. Let Mr. Master take instructions and inform the Court of his clients stand on the adjourned date of hearing, when appropriate orders can be passed.

9. On the adjourned date, the deponent of the affidavit shall remain present in the Court.

10. Stand over to 8th April, 2022.

[G. S. KULKARNI, J.]