Bombay High Court
Rakhi Kamal Thakur Nee Rakhi ... vs M/S. Rebuilt, Thr.Partners ... on 31 August, 2023
Bench: N. J. Jamadar
2023:BHC-AS:25211
30-AO-534-23.DOC
Sayali Upasani
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
APPEAL FROM ORDER NO. 534 OF 2023
WITH
INTERIM APPLICATION NO. 13262 OF 2023
Rakhi Kamal Thakur nee Rakhi Hiralal ...Appellant
Rohra
Vs.
M/s. Rebuilt and Others ...Respondents
Mr. Prashant G. Karande and Mr. Sudam S. Patil i/b Mr.
Ajit S. Hodage, for Appellant.
Ms. Ishani Khanwilkar i/b Alvina Castelino, for Respondent
No. 5.
Ms. S. Saboo i/b Mr. Nikhil Kadam, for Respondent No. 4.
Mr. Vasant Dhawan, for Respondent No. 2.
CORAM:- N. J. JAMADAR, J.
DATED:- 31st AUGUST, 2023
ORDER:-
1) This Appeal is directed against an order dated 29 th April,
2023, passed by the learned Judge, City Civil Court, in Notice
of Motion No. 1063 of 2017, in Suit No.984 of 2017, whereby the
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Notice of Motion taken out by the appellant/plaintiff seeking,
inter alia, a mandatory direction to reserve one flat in a
building being developed by the respondents-defendant Nos.2,
4 and 5 came to be rejected.
2) Background facts leading to this Appeal can be
summerised in brief as under:-
(a) Nehru Nagar Shanti Bhuvan Co-operative Housing
Society Ltd., (the Society) was the owner of building No.88,
situated at Survey No.229 and 267 and CTS No. 6 (part) at
Nehru Nagar ,Kurla East, Mumbai (the Society premises). The
defendant No. 2 - Society entered into a Development
Agreement with M/s. Rebuilt, the defendant No. 1, on 9 th
December, 2010. A power of attorney was also executed in
favour of the defendant No. 1 to facilitate the re-development of
the society premises. It was, inter alia, agreed thereunder that
the defendant No. 1 would offer each of the 40 members of the
society, a flat with specified area and features, and a further
cash consideration along with transit rent etc. The defendant
No. 1 was also to construct free sale component and
appropriate the proceeds thereof.
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(b) The plaintiff asserts the defendant No. 1 agreed to convey
a flat, bearing No.905, admeasuring approximately 981 sq. ft.
on the 9th floor of the proposed building for a consideration of
Rs.39,25,000/-. The plaintiff paid the entire consideration
through the banking channels and an allotment letter came to
be issued to the plaintiff on 12th February, 2011, acknowledging
the receipt of the entire consideration of Rs.39,25,000/- and
the obligation to execute a formal agreement as envisaged by
the provisions of the Maharashtra Ownership Flats (Regulation
of the promotion of construction, sale, management and
transfer) Act, 1963 (MOFA) and the deliver possession of the
said flat.
(c) The plaintiff avers the defendant No. 1 committed default
in the construction of the building and delivery of the
possession of the said flat, as agreed. Defendant No. 2 - Society
thus cancelled the Development Agreement under a Deed of
Cancellation of Development Agreement on 12th January 2015
executed by and between defendant No. 1 and defendant No. 2-
Society. A MOU was executed between defendant No. 1 and M/s
Navkar Life Space Pvt Ltd., defendant No. 3, who took over the
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re-development of the society premises upon cancellation of the
Development Agreement between defendant No. 1 and Society.
In accordance with the terms of the said MOU, defendant No. 3
undertook to discharge all the liabilities of defendant No. 1. The
name of the plaintiff along with particulars of the flat and the
consideration parted with by the plaintiff, was included in the
list annexed to the said MOU between defendant No. 1 and
defendant No. 3.
(d) Eventually, the Development Agreement came to be
executed between defendant No. 2 - Society and Shree
Sidhhivinayak Classic Construction Pvt Ltd., the defendant No.
5 on 27th July 2016 and 15th May 2018. The plaintiff claims to
have learnt about the said Development Agreement pursuant to
an advertisement published on the website of respondent No. 4
in the year 2016.
(e) Since the defendants did not pay heed to the repeated
requests of the plaintiff to perform their part of the obligation,
the plaintiff was constrained to institute the suit for
enforcement of the statutory obligations of the defendants
under MOFA. In the said suit, the plaintiff took out a Notice of
Motion seeking, inter alia, direction to the defendants to
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reserve one flat admeasuring 981 sq. ft on the 9th floor or any
other floor of the proposed building being constructed at the
society premises, for the benefit of the plaintiff, to disclose all
necessary particulars about the current status of the
implementation of the re-development project and to deposit
with the Court a sum of Rs.6,98,100/- towards the transit
accommodation to be eventually paid over to the plaintiff upon
final adjudication of the suit.
(f) The defendants resisted the prayers in the Notice of
Motion. Defendant No. 2- Society contended that there was no
privity of contract between the plaintiff and the defendant No. 2
- Society and the latter was not liable for any obligation which
the defendant No. 1 might have incurred as the Development
Agreement with defendant No. 1 came to be lawfully
terminated. The suit against defendant No. 2 - Society was
thus stated to be misconceived. Defendant Nos. 4 and 5 also
resisted the prayers in the Notice of Motion on the ground of
absence of the privity of contract between the plaintiff and
defendant Nos. 4 and 5. At best, the plaintiff can have a claim
against defendant No. 1 or for that matter defendant No. 3.
However, in the absence of any statutory or contractual
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obligation qua defendant Nos. 4 and 5, the plaintiff is not
entitled to the reliefs of the present nature.
(g) The learned Judge, City Civil Court upon appraisal of the
pleading, documents, the material on record and the
submissions canvassed on behalf of the parties was persuaded
to reject the Notice of Motion holding, inter alia, that
parameters for grant of temporary injunction were not fulfilled.
The learned Judge was of the view that there was no privity of
contract between the plaintiff and defendant No. 2- Society and
defendant Nos. 4 and 5, who were appointed by defendant No.
2- Society to develop the society premises.
3) Being aggrieved the plaintiff is in Appeal.
4) I have heard Mr. Prashant Karande, the learned Counsel
for the appellant and Mr. Vasant Dhawan, the learned Counsel
for respondent No. 2 - Society, Ms. S. Saboo, the learned
Counsel for respondent No. 4 and Ms. Ishani Khanwilkar, the
learned Counsel for the respondent No. 5 at some length. The
learned Counsel for the parties took the Court through the
pleadings and instruments executed by and between the
parties including the Development Agreement, Deed of
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Cancellation of the Development Agreement, and the MOU
executed between defendant No. 1 and defendant No. 3.
5) Mr. Karande submits that the learned Judge, City Civil
Court approached the case from an incorrect perspective. The
learned Judge, according to Mr. Karande, committed a manifest
error in not properly appreciating the legal character of
defendant No. 2- Society. With the execution of the
Development Agreement with defendant No. 1, to re-develop the
society premises and granting rights to defendant No. 1 to sell
the free sale component in the building to be developed, the
defendant No. 2 - Society became a promoter within the
meaning of Section 2 (c) of the MOFA Act, 1963. This crucial
factor was not at all adverted to by the learned Judge, City Civil
Court. To draw home the point that a society which entrusts
the development of the premises to a developer becomes a
promoter within the meaning of Section 2 (c) of the MOFA Act,
1963. Mr. Karande placed heavy reliance a judgment of this
Court in the case of Farhat Co-op. Housing Society Ltd.,
Mumbai Vs. Malkani Enterprises, Mumbai and Others1,
6) Mr. Karande would further urge that the fact that the
plaintiff, an innocent and unsuspecting purchaser, had parted
1 2014 (6) Mh.L.J.
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with entire consideration and the allotment letter came to be
executed in favour of the plaintiff was also not adequately
considered by the City Civil Court. Laying emphasis on the
provisions contained in Section 4A of the MOFA Act, 1963 and
the legislative object with which it came to be inserted in
MOFA, 1963, Mr. Karande submitted the defence sought to be
raised on behalf of the defendants that no rights emanate from
the allotment letter as there is no registered agreement between
the promoter and the plaintiff, is wholly misconceived.
7) To buttress the submission that an obligation under
MOFA 1963 can be enforced even in the absence of a registered
agreement for sale, Mr. Karande placed reliance on a decision
of this Court in the case of Harshal Developers Pvt Ltd Pune
and Another Vs. Manohar Gopal Bavdekar and Another 2 and
another judgment of this Court in the case of Sicily Varghese
Kadamthottu Vs. Ramanlal Jayshankar Trivedi3.
8) As against this Mr. Dhawan, the learned Counsel for
defendant No. 2- Society submitted that the very premise of the
suit is flawed. The Development Agreement in pursuance of
which the defendant No. 1 allegedly agreed to convey the
2 2013 (1) Mh. L.J. 855
3 2022 (5) Mh. L.J. 570
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subject flat to the plaintiff, came to be lawfully terminated with
the clear stipulation that the defendant No. 2 - Society would
not be liable for any of the obligations incurred by the
defendant No. 1. In the face of such stipulation, according to
Mr. Dhawan, no liability can be fastened on the defendant No. 2
- Society. It was further urged that the claim of the plaintiff
that defendant No. 2 - Society became a promoter within the
meaning of Section 2(c) of MOFA 1963 is legally unsustainable.
9) Supplementing the submissions on behalf of defendant
No.2-Society, Ms. Khanwilkar, the learned Counsel for the
defendant No. 5, strenuously submitted that the learned
Judge, City Civil Court committed no error in recording a
finding that there is no privity of contract between the plaintiff
and defendant No. 5. Whatever rights the plaintiff claims to
have acquired on the basis of the alleged agreement between
the plaintiff and defendant No. 1, can no case to be enforced
against the defendant No. 2 - Society, much less against the
defendant No. 5 who has been lawfully entrusted with the re-
development of the society premises. An endeavour was made
to urge that even the allotment letter is of no assistance to the
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plaintiff as a formal registered agreement was not executed by
defendant No. 1.
10) Ms. Khanwilkar, the learned Counsel for the defendant
No. 5, would urge that the controversy sought to be raised on
behalf of the plaintiff as regards the liability of the society and
the subsequent developer, as the promoters, is no longer res
integra. A Single Judge of this Court in the case of Vaidehi
Akash Housing Pvt Ltd Vs. New D.N. Nagar Co-op Housing
Society Union Ltd and Others4 has enunciated the law in clear
and explicit terms that if the rights of a prior developer are
brought to an end upon a lawful termination of the
Development Agreement, the third party purchasers cannot lay
any independent claim against the Society or anyone claiming
through the Society.
11) Mr. Karande joined the issue by canvassing a submission
that the aforesaid decision has not adverted to the expansive
definition of the "promoter" under Section 2 (c) of the MOFA,
1963. In the facts of the case, according to Mr. Karande, in view
of the MOU between defendant No. 1 and defendant No. 3
under which the obligation in favour of the plaintiff was clearly
acknowledged, the plaintiff cannot be left in the lurch despite
4 (2015) 3 AIR Bom R 270
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having parted with the life's savings. It would, therefore, be
necessary to secure the interest of the plaintiff till the final
adjudication of the suit, urged Mr. Karande.
12) To start with, uncontroverted facts. The fact that the
defendant No. 2- Society is the owner of the society premises
and had initially entered into a Development Agreement with
the defendant No. 1 is incontestable. There is not much
controversy over the fact that defendant No. 1 could not carry
out the development within the stipulated period. Cancellation
of the said Development Agreement by executing a Deed of
Cancellation by and between the defendant No. 1 and
defendant No. 2 is also not in a contest. Likewise, there does
not seem to be much controversy over the execution of the
MOU between the defendant Nos. 1 and 3 though the parties
differ over the consequences much emanate therefrom. At this
stage, it is rather incontestable that the society premises is now
being developed by defendant No. 5.
13) Though an endeavour was made on behalf of the
defendants especially defendant No. 5, to canvass a submission
that the allotment letter cannot constitute an agreement, of
which specific performance can be sought as it is neither
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registered nor duly stand, yet it would be suffice to note that in
view of the provisions contained in Section 4A of the MOFA,
1963, the said objection does not merit acceptance. Mr.
Karande was justified in placing reliance on the decisions of
this Court in the cases of Harshal Developers (supra) and Sicily
Varghese Kadamthottu (supra), wherein it was enunciated that
the provisions contained in Section 4A override Section 4 of the
MOFA, 1963 and a suit for specific performance based on an
unregistered agreement of sale under MOFA, 1963 is
maintainable.
14) I am also persuaded to hold that there is a prima facie
material which indicates that the defendant No. 1 had agreed
to sale Flat No. 905 and accepted the entire consideration. The
payment of consideration is evidenced by receipts and the
entries in the bank accounts. Thus, the Court can legitimately
proceed on the premise that the defendant No. 1 had agreed to
convey Flat No. 905 and accepted the entire consideration for
the same.
15) The controversy between the parties revolves around the
question as to whether the aforesaid obligation incurred by the
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defendant No. 1 can be enforced against defendant No. 2 -
Society and the subsequent developer ?
16) In Clause (c) of Section 2, a 'promoter' is defined as
under:-
"(c) ["promoter" means a person and includes a
partnership firm or a body or association of
persons, whether registered or not] who constructs
or causes to be constructed a block or building of
flats, [or apartments] for the purpose of selling
some or all of them to other persons, or to a
company, co-operative society or other association
of persons, and includes his assignees; and where
the person who builds and the person who sells
are different persons, the term includes both...."
17) Evidently, the definition of a promoter is of wide import.
Juridical persons are specifically included within the definition
of, "promoter". Any person who constructs or causes to be
constructed flats or apartments for the purpose of sale,
satisfies the description of "promoter". It also subsumes in its
fold the persons who build and sell the flats within the ambit of
the promoter where two different persons build and sell the
flats.
18) A learned Single Judge of this Court had an occasion to
consider the import of the definition of 'promoter' in the case of
Ramniklal Tulsidas Kotak and Others Vs Varsha Builders And
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Others5. The observations in paragraph Nos. 16 and 17 are
material. They read as under:-
"....16. It emerges from the scheme of the said Act
read with the definition of the expression "Promoter"
contained in S. 2(c) of the said Act and Rule 5 of the
statutory form referred to hereinabove that the
Promoter must fall in either of the following
categories:
(1) The promoter may be the owner of freehold
land; or
(2) The Promoter may be the lessee of the land
intended to be developed, provided the indenture of
lease authorities the promoter to construct flats and
sell the same on ownership basis;
(3) The promoter may have entered into an
agreement to purchase the land from the lawful
owner thereof. In such a case, the Vendor of the
promoter must have a valid title to the said land and
the agreement must not be terminable by the
Vendor
(4) The Promoter is an agent of the owner or of the
authorised lessee duly entitled to construct and
dispose of flats on ownership basis. In such a case,
the promoter/developer must make the owner of
freehold or leasehold interest as Confirming Party to
the agreement of sale of flat on ownership basis so
as to bind the owner with all the terms, conditions
and covenants of third party agreement. When the
Promoter falls in 3rd or 4th category, the promoter
has no title to the land in the sense in which the
word "title" is normally under stood in the property
5 AIR 1992 (2) 492
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law. To this limited extent the expression "promoter's
title" is used in the Maharashtra Ownership Flats
Act 1963 in the special wider sense.
17. It is clear from the scheme of the Act that the
promoter need not necessarily be the absolute owner
of the land or a long term lessee thereof. At the
same time, it is imperative that the promoter must
have sufficient entitlement and right to construct on
the land and dispose of the flats on ownership basis
so as to bind the owner of the freehold and the
leasehold interest..."
(emphasis supplied)
19) In the case of Farhat Co-op. Housing Society (supra)
following the aforesaid pronouncement, another learned Single
Judge observed, inter alia, as under:-
"28. There is one more dimension to the matter. As
indicated above, it is the owners, who had obtained
the IOD and commencement certificate from the
MCGM and it is through the medium of the
Respondent No. 1 that they have commenced and
completed the construction. Therefore, in terms of
Section 2(c) of the MOFA, which takes within its
sweep the person who has caused the construction
to be the Promoter, the owners can be said to be
the Promoters, as they have admittedly caused the
construction. It is therefore their obligation to see
to it that the Society is conveyed what it is entitled
to in terms of the agreement entered into with the
flat purchasers by the Respondent No. 1, which, in
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the instant case is the right to get a lease in its
favour. In my view, since the owners having
abdicated their obligation under the MOFA of
conveying the property to the Society, the
Competent Authority has rightly intervened in the
matter by passing the impugned order. In my view,
the impugned order granting the deemed
conveyance has therefore to be construed in the
context of the rights the Developer had i.e. the
right to get a lease from the owners. Hence, the
impugned order cannot be faulted with on the
ground that the operative part of the order is vague
or ambiguous...."
(emphasis supplied)
20) Whether the aforesaid pronouncements advance the
cause of the submission on behalf of the appellant? Admittedly,
the plaintiff is not a member of defendant No. 2- Society.
Consequently, defendant No. 2 - Society does not owe any
obligation to the plaintiff arising out of the jural relationship of
the member and society. Indisputably, the plaintiff is a third-
party purchaser qua the defendant No. 2- Society. The
relationship between the plaintiff and defendant No. 2 - Society
is primarily a matter of contract. Whether under the
Development Agreement executed by a society with the
developer, the former also incurs the liability towards the
purchases from the developer is at the heart of the matter ?
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21) That would essentially turn upon the terms of the
contract between the society and the developer. If under the
Development Agreement the society is a joint developer or
retains control over the development even beyond the
rehabilitation component, different considerations may come
into play. In the facts of the case, as noted above, the
Development Agreement between defendant No. 2- Society and
defendant No. 1, the plaintiff transferor, came to be lawfully
terminated under a Deed of Cancellation of the Development
Agreement dated 12th January, 2015. The terms of the said
Deed of Cancellation would determine the rights and liabilities
of defendant No. 2- Society and the defendant No. 1 developer.
Two clauses, namely Clause 6 and Clause 10, of the said Deed
are of critical salience. They read as under:-
"6. That the party of the Second Part hereby
declares that he/she/they/it/have/has not
entered into any Agreement towards the
mortgage, lease, or took/raise/borrowed any
loan, or created any third party interest
pertaining to the said plot of land bearing
Survey No. 229 and 267 corresponding CTS
No. 6 (part), in the registration sub-district of
Kurla and district of Mumbai City
admeasuring 931.87 sq. mtrs plot area as per
lease deed and sale deed and additional it bit
land area as per the actual demarcation on
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site along with building thereon admeasuring
1392.64 sq. mtrs. In case anything happened
or claim to the title of the said plot of land due
to the act of the party of the Second part, he
himself or his Firm through its Partner/
proprietor or person through them held
responsible for the risk, cost, damages,
penalty, loss, interest and consequences of
whatsoever nature at his/her/their/its cost.
.....
10. It is agreed by and between the parties
that any matters if filed in court or already
filed by any party, individual person, company,
firm, bank, institution etc for and against the
party of the Second Part or Party of the First
made as party to the suit, petition, complaint
etc then the party of the Second party shall be
defend the same by his own expenses and cost
and consequences and the party of the First
Part shall not spend for the same. They Party
of the Second Party shall keep indemnified the
party of the First Part for any loss, damages if
occurs, due any litigation and/or Court orders
filed against them."
22) The defendant No. 1 made a declaration that it had not
entered into any transaction with regard to the society
premises and created any third party interest therein.
Defendant No. 1 further agreed that if any claim arises the
defendant No. 1 would be liable for the costs and consequences
thereof. It was further agreed that in the event any proceeding
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was instituted against the defendant No. 1 and/or defendant
No. 2, the defendant No. 1 would defend the same at its own
costs and consequences and the defendant No. 1 will keep
defendant No. 2 indemnified of any loss, damage due to any
litigation and/or the orders passed by the Court.
23) Conversely, a clause acknowledging the liability of created
by defendant No. 1, during the currency of the Development
Agreement, by defendant No. 2 - Society is conspicuous by its
absence. Defendant No. 2- Society did not acknowledge either
expressly or by implication the liability to discharge the
obligations incurred by the defendant No. 1.
24) The endeavour Mr. Karande to draw support and
sustenance to the plaintiff's claim from the MOU executed by
and between defendant Nos. 1 and 3 does not merit
acceptance. It is true defendant No. 3 agreed to complete the
re-development project and fulfill all the obligations of the
erstwhile developer including any amount which was
receivable/payable by the erstwhile developer - 2 from the
purchaser/investor whose name found mention in the list
Annexure-A appended thereto. However, defendant No. 2 -
Society was not a party to the said MOU. Consequently, the
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said MOU cannot be banked upon to fasten liability on
defendant No. 2- Society. It is a different matter that even the
Development Agreement between defendant No. 2 and
defendant No. 3 could not fructify.
25) In the backdrop of the aforesaid position, which emerges
out of the contractual obligations of the parties, a reference to
the decision of this Court in the case of Vaidehi Akash (supra)
becomes necessary. In the said case, the learned Single Judge
was confronted with the question as to whether the developer
who had been conferred with the authority to deal with the free
sale component of the project by the Society, under the Society
Development Agreement could exercise said authority for its
own sake or on its own account as an independent contractor
or as an agent of the Society. With reference to the clauses in
the Development Agreement in the said case, the learned
Single Judge enunciated that the contract between developer
and the Society was on a principal to principal basis; it neither
constitutes a partnership nor a joint venture or agency between
the two. The third party purchasers with whom the developer
might have entered into agreements for sale would have no
privity of contract with the Society and the Society would in no
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way be responsible for any claim made by such purchasers
against the developer.
26) The observations in paragraph Nos. 84 and 85 are
material and hence extracted below.
"84. The clauses quoted above, read together
and in their proper perspective to be gathered
from the whole agreement, clearly envisage the
development and sale of the free sale
component of the project by Vaidehi on their
own account and as an independent
contracting party, and not as agents of the
Society. The contract between Vaidehi and the
Society is on a principal to principal basis; it
neither constitutes a partnership nor a joint
venture or agency between the two. The third
party purchasers with whom Vaidehi might
enter into agreements for sale would have no
privity of contract with the Society and the
Society would in no way be responsible for any
claim made by such purchasers against
Vaidehi under their respective agreements for
sale.
85. There being no privity of contract between
the Society and the third party purchasers
claiming under Vaidehi, the third party
purchasers cannot claim specific performance
of their respective agreements for sale except
through Vaidehi. They stand or fall by Vaidehi.
If the rights of Vaidehi are brought to an end
upon a lawful termination of the Society
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Development Agreement, the third party
purchasers cannot lay any independent claim
against the Society or anyone claiming through
the Society. The agreements with third party
purchasers are premised upon a valid,
subsisting and enforceable agreement between
their vendors, namely, Vaidehi and the owners,
namely, the Society and in fact refer to the
Society Development Agreement in this behalf.
Admittedly, therefore, the third party
purchasers had, or at any rate, ought to have,
notice of the Society Development Agreement
and its terms and conditions, and Vaidehi's
obligations to perform the same. If Vaidehi fails
to perform these obligations, the purchasers
cannot but suffer the consequences. In other
words, the purchaser's rights are subject to
Vaidehi's rights and not higher than those.
Therefore, from a contractual standpoint, the
third party purchasers have no case against
the Society or Rustomjee, who claim through
the Society..."
(emphasis supplied)
27) The learned Judge also examined the claim of third party
purchasers in the context of the provisions of MOFA, 1963 and
answered the same in the negative by observing as under:-
86. Let us now consider if these third party
purchasers have any rights under MOFA against
the Society. It is submitted on their behalf that
the Society is very much a 'promoter' within the
meaning of MOFA as regards their respective
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agreements for sale. Learned Counsel for the
purchasers rely upon the definition of "promoter"
contained in Section 2(c) of MOFA. The definition
is in the following terms:
"promoter" means a person and includes a
partnership firm or a body or association of
persons, whether registered or not who constructs
or causes to be constructed a block or building of
flats, or apartments for the purpose of selling
some or all of them to other persons, or to a
company, cooperative society or other association
of persons, and includes his assignees; and where
the person who builds and the person who sells
are different persons, the term includes both."
87. It is submitted that the Society can at any
rate be said to have caused the building of flats to
be constructed for the purpose of selling the
same, and as a person, who causes such building
to be built, is as much a promoter as a person
who sells premises in such building.
88. The Society is the owner of the property and
has entered into an agreement with the
developers, i.e. Vaidehi, for redevelopment of its
property. The redevelopment envisages
construction of the Society's building to
accommodate its members and also construction
of building/s of flats/premises to be sold to
outsiders. The agreement authorizes or entitles
the developers to construct such building/s and
sell flats/premises therein to outsiders. Such
authority or entitlement is to the developers'
account and in their own right, and as an
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independent contractor. If in exercise of such
authority or entitlement, a building is
constructed by the developers, it cannot be said
that such building is caused to be constructed by
the Society within the meaning of Section 2(c) of
MOFA.
89. Any other interpretation would lead to
anomalous consequences, which could never have
been contemplated by MOFA. The owners of lands
entering into agreements for sale or development
agreements with promoters/developers would be
held as being subject all liabilities of a promoter,
such as liability of disclosure of plans and
specifications, outgoings etc. under Section 3 of
MOFA, entering into agreements in accordance
with Section 4, giving possession of flats and
suffering the consequences of Section 8, forming
co-operative societies of flat purchasers under
Section 10, and so on. This would be plainly
inconceivable.
90. Prima facie, thus, there is no case to treat
the Society, who is merely in the position of an
owner vis-a-vis the third party purchasers, as a
'promoter' within the meaning of MOFA and foist
the obligations of a promoter on the Society in
relation to the purchasers...."
(emphasis supplied)
28) I am in respectful agreement with the aforesaid
enunciation. Even the expansive definition of the term
'promoter' under Section 2 (c) of MOFA, 1963 cannot be so
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stretched as to fasten liability on the society which it has
neither incurred under a contract nor statutorily enjoined.
29) In the case of Goregaon Pearl CHSL Vs. Dr. Seema
Mahadev Paryekar and Others in Appeal From Order (st)
No.22143 of 2019, the same learned Judge (S.C. Gupte, J.)
again repelled the submission that in a situation of this nature
a society falls within the ambit of the definition of promoter
under Section 2 (c) of the MOFA, 1963 even after noticing the
decision in the case of Ramniklal Tulsidas Kotak (supra).
30) I, therefore, find substance in the submission on behalf of
the defendant Nos. 2 and 5 that there is prima facie no privity
of contract between the plaintiff, on the one part, and
defendant Nos. 2 and 5, on the other part, and the plaintiff
cannot enforce the obligations under MOFA, 1963 against
defendant Nos. 2 and 5.
31) The learned Judge, City Civil Court thus committed no
error in holding that the plaintiff is not entitled to the interim
relief. The elements of balance of convenience and irreparable
loss, especially qua defendant Nos. 2 and 5, also deserve to be
answered against the plaintiff. I must hasten to add that the
plaintiff prima facie has the remedies against the defendant
30-AO-534-23.DOC
No. 1 and its successors in interest. But those rights do not
sustain the prayers in the Notice of Motion. Therefore, no
interference is warranted with the impugned order in exercise
of limited appellate jurisdiction.
32) Hence, the following order.
ORDER
I) The Appeal stands dismissed.
II) In view of the dismissal of the Appeal, the Interim
Application also stands disposed.
III) Parties to bear their respective costs.
[N. J. JAMADAR, J.]
