Bombay High Court
Mr. Sunil Rohidas Kamthe And Another vs Mr. Amogh Sawant The Sole Prop.M/S. ... on 4 November, 2025
2025:BHC-AS:46802
Ashwini ao-362-2024-J Fk.doc
IN THE HIGH Court OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
APPEAL FROM ORDER NO.362 OF 2024
1. Mr. Satish Murlidhar Inamdar ]
age 66 years, Occupation:- Retired ]
2. Mrs. Swapna Satish Inamdar ]
age 62 years, Occupation:-Housewife ]
both residing at Room No.202, 2nd Floor, ]
S.G. Barve Marg, Nehru Nagar Building, ]
No.30, Prerna Building, Kurla (East), ]
Mumbai - 400 024. ] ...Appellants
Org. Plaintiffs
V/s.
1. Mr. Amogh Sawant, ]
the Sole Proprietor of M/s. Amogh Sawant ]
& M/s. Adit Enterprises, age : 55 years, ]
Occupation:- Business, having office address ]
at 5, Suryaji Niwas, 200, Senapati Bapat ]
Marg, Dadar (West), Mumbai - 400 028. ]
2. Nehru Nagar Vidyut Vilas Co-operative ]
Housing Society Ltd., ]
having registered office at Building No.148, ]
Nehru Nagar, Kurla-III, Kurla (East), ]
Mumbai 400 024. ]
3. Mr. Ramesh E. Mehetre, ]
Chairman of Nehru Nagar Vidyut Vilas ]
Co-operative Housing Society Ltd., ]
having address at Building No.148, ]
Nehru Nagar Vidyut Vila CHSL, ]
Nehtru Nagar, Kurla East, Mumbai 400 024. ]
4. Mr. Santosh Shinde, ]
Secretary of Nehru Nagar Vidyut Vilas ]
Co-operative Housing Society Ltd., ]
Digitally
signed by presently residing at 16/702, Ganesh ]
ASHWINI
ASHWINI GAJAKOSH
H Krupa CHSL, Nehru Nagar, Kurla (East), ]
GAJAKOSH Date:
2025.11.04
19:56:46
Mumbai 400 024. ]
+0530
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5. M/s. Kabra Infrastructure and Developers ]
LLP, 10th Floor Kamla Hub, ]
JVPD Scheme, N.S. Road, Vile Parle (West), ]
Mumbai 400 049. ] ... Respondent/s
Org. Defendants
WITH
INTERIM APPLICATION (ST) NO.27614 OF 2025
WITH
INTERIM APPLICATION NO.8569 OF 2024
IN
APPEAL FROM ORDER NO.362 OF 2024
WITH
APPEAL FROM ORDER NO.364 OF 2024
WITH
INTERIM APPLICATION (ST) NO.27617 OF 2025
WITH
INTERIM APPLICATION NO.8570 OF 2024
IN
APPEAL FROM ORDER NO.364 OF 2024
WITH
APPEAL FROM ORDER NO.367 OF 2024
WITH
INTERIM APPLICATION (ST) NO.27621 OF 2025
WITH
INTERIM APPLICATION NO.8574 OF 2024
IN
APPEAL FROM ORDER NO.367 OF 2024
WITH
APPEAL FROM ORDER NO.366 OF 2024
WITH
INTERIM APPLICATION (ST) NO.27620 OF 2025
WITH
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INTERIM APPLICATION NO.8572 OF 2024
IN
APPEAL FROM ORDER NO.366 OF 2024
WITH
APPEAL FROM ORDER NO.363 OF 2024
WITH
INTERIM APPLICATION (ST) NO.27616 OF 2025
WITH
INTERIM APPLICATION NO.9299 OF 2024
IN
APPEAL FROM ORDER NO.363 OF 2024
WITH
APPEAL FROM ORDER NO.365 OF 2024
WITH
INTERIM APPLICATION (ST) NO.27619 OF 2025
WITH
INTERIM APPLICATION NO.8571 OF 2024
IN
APPEAL FROM ORDER NO.365 OF 2024
WITH
APPEAL FROM ORDER NO.368 OF 2024
WITH
INTERIM APPLICATION (ST) NO.27623 OF 2025
WITH
INTERIM APPLICATION NO.8575 OF 2024
IN
APPEAL FROM ORDER NO.368 OF 2024
WITH
APPEAL FROM ORDER NO.369 OF 2024
WITH
INTERIM APPLICATION (ST) NO.27624 OF 2025
3/24
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Ashwini ao-362-2024-J Fk.doc
WITH
INTERIM APPLICATION NO.8577 OF 2024
IN
APPEAL FROM ORDER NO.369 OF 2024
Mr. Kishor Patil, a/w Mr. Abhishek Matkar, Ms. Vaishnavi Gujarathi
and Mr. Sanket Dorugade for the Appellants.
Mr. Ankit Lohia, a/w Ms. Aditi Bhatt and Ms. Mamta Harwani, i/by
Mr. Dhiren Shah for Respondent No.2.
Ms. Jennifer Michael, a/w Ms. Riddhi Dhamecha, i/by Ms. Neha Shah
for Respondent No.5.
CORAM : KAMAL KHATA, J.
RESERVED ON : 16th October 2025.
PRONOUNCED ON : 4th November 2025.
JUDGMENT:
1. These Appeals challenge the Order dated 4th April 2024 passed
by the Trial Court in Notice of Motion No. 282 of 2024 in S.C. Suit No.
98 of 2024, Notice of Motion No.229 of 2024 in S.C. Suit No.97 of
2023, Notice of Motion No.234 of 2024 in S.C. Suit No.3145 of 2023,
Notice of Motion No.228 of 2024 in S.C. Suit No.101 of 2023, Notice of
Motion No.233 of 2024 in S.C. Suit No.3146 of 2023, Notice of Motion
No.230 of 2024 in S.C. Suit No.100 of 2023 and Notice of Motion
No.232 of 2024 in S.C. Suit No.97 of 2023 whereby the Appellants'
Notice of Motions seeking interim reliefs came to be dismissed. By the
said Notice of Motions, the Appellants had sought an interim
injunction restraining Respondent Nos. 2 to 5, from carrying out any
Ashwini ao-362-2024-J Fk.doc
demolition or construction activity on the suit property without the
express consent of the Appellants. The Appellants had further sought
an injunction restraining the Respondents from modifying the
sanctioned building plans of the under-construction building, and
from selling, transferring or otherwise encumbering any of the flats
in the new building proposed to be constructed on the suit property.
2. The Appellants are third-party flat purchasers in the
redevelopment project initiated by Respondent No.2 - the Society -
through Respondent No. 1, the erstwhile developer. The Respondent
No. 2 - Society holds leasehold rights in land bearing Survey No. 229
& 267 and CTS No. 6 (part) and Mauje Kurla 'III' at Nehru Nagar,
Kurla (East), Mumbai - 400024, within the Registration Sub-District
of Bandra and District of Bombay City, admeasuring 739.31 square
meters as per demarcation, together with a building standing thereon
admeasuring 1019.47 square meters as per the conveyance deed. The
suit land is leased by MHADA to Respondent No.2 under a registered
Indenture of Lease dated 24th June 1991.
3. These Appeals raise the question whether third-party flat
purchasers - who derive their rights through a developer whose
appointment by the Society has been eventually terminated, and
whose termination is confirmed by the Arbitrator - can assert or
enforce any right, title or interest in the Society's property or its
redevelopment project through a new developer.
4. Learned Counsel for the Appellants and Respondents submit
Ashwini ao-362-2024-J Fk.doc
that these Appeals can be disposed of by a common order. Having
heard the rival submissions of both Counsel and upon perusing the
record, I proceed to dispose of the Appeal finally.
Whether Society qualifies as a "Promoter":
5. The Appellants argue that since the Society, being the owner of
the plot, had executed a Development Agreement with the erstwhile
developer for redevelopment of its property, it therefore qualifies as a
'Promoter' within the meaning of the Maharashtra Ownership Flats
(Regulation of the Promotion of Construction, Sale, Management and
Transfer) Act, 1963 ("MOFA").
Distinguishing previous decisions:
6. It is argued that Vaidehi Akash Housing Private Limited1 is
clearly distinguishable. The learned Single Judge therein was dealing
with a Notice of Motion in a pending suit and made only prima facie
observations regarding the obligations of the Society under MOFA.
The Court held merely prima facie that there was no basis to treat
the Society as a 'Promoter' or to foist upon it promoter-level
obligations vis-a-vis the purchasers. It was also observed that, prima
facie the purchasers had no right to seek specific performance of
their individual agreements against the Society. The order, being
interim in nature, did not finally adjudicate rights of the parties and
was confined to the peculiar facts of that case. Moreover, in that
matter, the Plaintiff developer had sold premises in excess of his
2014 SCC OnLine Bom 5068
Ashwini ao-362-2024-J Fk.doc
entitlement, and the Court's prima facie conclusion that the society
was not to be covered by the definition of 'Promoter' was limited to
those excess sales.
7. It is further argued that the earlier decision in Farhat Co-op.
Hsg. Society Ltd.2 was not considered in Vaidehi Akash (supra).
Relying on State of Assam Vs. Barak Upatyaka D.U. Karmachari
Sanstha3, it is argued that an interim order which does not
conclusively decide an issue cannot serve as a precedent.
Accordingly, since that suit remains pending before the City Civil
Court, Bombay reliance on Vaidehi Akash is misplaced.
8. The Appellants further submit that Goregaon Pearl CHSL Vs Dr.
Sema Mahadev Paryekar and Others4, is distinguishable on facts. The
present Appeal arises from a Notice of Motion in a suit seeking
enforcement of MOFA obligations read with their respective MOUs
and allotment letters. Here, the Society terminated the development
rights of Respondent No.1 on 14 th September 2015 and invoked
arbitration, which culminated into the Final Award dated 7 th
November 2022. The developer's counterclaim seeking to set aside
the termination was rejected by the said Award.
9. The record further reveals that the Society failed to bring to the
learned Arbitrator's attention that there existed third-party
purchasers with agreements or allotment letters executed in their
(2014) 6 Mah LJ 358
2009 (5) SCC 694
2019 SCC OnLine Bom 3274
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favour by the erstwhile developer, despite execution of the 2011
Supplemental Agreement acknowledging such transactions.
10. Consequently, the learned Arbitrator had no opportunity to
address the issue of third-party purchasers' rights. It is also evident
that the Society was fully aware that Respondent No. 1 had created
third-party rights over the free-sale components based on the
authority conferred under the Development Agreement.
11. The present case, therefore, stands on a distinct footing. The
Plaintiffs seek construction and/or possession of the flats agreed to
be allotted to them by the Respondent No.1 under their respective
sale agreements, MOUs, or allotment letters. It is argued that the
Society and the new developer have declined to recognize the rights
created by the erstwhile developer and are reserving flats in the
proposed buildings, thereby rendering the Appellants - who have
invested their hard-earned money - remediless. The factual matrix in
Goregaon Pearl (supra) is thus materially distinguishable,
particularly in view of the Arbitrator's findings therein, and hence
inapplicable to the present case.
12. Deepak Prabhakar Thakoor Vs. MHADA & Ors .5 is also
distinguishable. Unlike that case, the Appellants herein have not
challenged the IOA issued by MHADA, nor have they sought to
restrain demolition. Their claims are founded on registered sale
agreements, MOUs and allotment letters executed by the erstwhile
2023 SCC OnLine Bom 2234
Ashwini ao-362-2024-J Fk.doc
developer. They do not oppose the redevelopment; rather, they seek
enforcement of MOFA obligations against the Respondent Nos.1, 2
and 5. Furthermore, since the present project is unregistered under
RERA, the observations made in Goregaon Pearl would not apply.
13. Relying on the below mentioned documents it is contended that
the Society was, in fact, a 'promoter' within the meaning of MOFA and
that a clear privity of contract existed between the Society and the
Appellants.
Documents that establish - (I) Society is a 'Promoter' in this
case, and (ii) there is privity of contract with Appellants:-
Sr. Particulars Pg. Nos.
No.
1] D.A. dated 28/04/2008 between Society and R.1: 14 (COD)
Clauses 11 & 12 - Developer entitled to construct
additional floors 5th floor and sell units to
purchasers of his choice and execute agreements,
etc. ; Developer shall collect amounts from new flat
purchasers towards share/entrance fees and hand
over same to Society.
2] GPA dated 26/06/2008 by Society to R.1 : 71 (COD)
* Executed through Chairman Jayant Kogekar
[Reply filed in N.M. and A.O, by same person,
taking stand contrary to POA]
86 (COD)
* Cl.39 - R.1 to appear before Sub-Registrar to
lodge deeds, agreements, Etc. in furtherance of
development. 88 (COD)
* Cl.44 - "To enter into sign, execute and deliver
Ashwini ao-362-2024-J Fk.doc
the Model Agreement for Sale of units/premises...."
and "to receive the earnest money and/or full 88 (COD)
consideration..."
* Cl.45 - "...authorised and empowered to lodge for
registration....all such Agreement/s for sale", and
"...and to admit execution thereof..." 90 (COD)
* Cl.49 - Society ratifies and confirms all acts of
Attorney.
3] Supplementary Agreement dated 17/01/2011
(Regd. On 21/04/2011) :-
* Cl. 11 - Developer shall collect share/entrance 113 (COD)
fees from flat purchasers and hand over same to
Society.
114 (COD)
* Cl. 13 - Developer shall collect and deposit
amounts from new flat purchasers towards 6
months maintenance.
4] D.A. dated 04/10/2023 between R.2 and R.5 :-
Cl. 7 - Any claim or demand in respect of Property 226 (COD)
or part thereof to be settled by Society at its own
cost.
Note: Appellants have statutory charge created
over the land and the building, as per Sec.8 of
MOFA [See G. Swaminathan Versus Shivram Co-
operative Housing Society & ors., Writ Petition
No.1869 of 1982 decided on 24/02/1983 &
25/02/1983]
5] Registered Agreements for Sale between some of
the Appellants/Plaintiffs and R.1 :-
* In these Agreements, R.2 Society has signed as 81 (A0)
Confirming Party;
Ashwini ao-362-2024-J Fk.doc
* In view of clauses of GPA (noted above) and
statement of Society Chairman recorded before
E.O.W., Society cannot claim ignorance of these
Agreements.
6] Notarized Agreements for Sale of some other
Appellants :-
* Even these Agreements make reference to the
decision of GBM of Society and to the D.A., GPA
and Supplementary Agreement.
* Title Certificate annexed to these Agreements
also refers to D.A. and GPA.
7] MOUs / Allotment Letters of some other Appellants
* It is well settled that suits for enforcement of
MOFA obligations based on allotment letters /
unregistered agreements are maintainable
[Note: Even the decision in Rakhi Kamal Thakur
relied upon by R.2 confirms this position].
14. Per Contra, it is argued - and I find merit in the submission -
that the issue is no longer res integra and stands concluded by
several judgments of this Hon'ble Court, including: --
(i) Vaidehi Akash Housing Pvt. Ltd. versus D. N. Nagar
C.H.S. Union Ltd. & Ors reported in 2014 SCC
OnLine Born 5068; [Paras 80 to 93]
(ii) Goregaon Pearl C.H.S. Ltd. vs. Dr. Seema Mahadev
Paryekar & Ors reported in 2019 SCC OnLine Bom
3724; [Paras 6 to 8]
Ashwini ao-362-2024-J Fk.doc
(iii) Deepak Prabhakar Thakoor & Ors. vs. MHADA &
Ors. reported in 2023 SCC OnLine Bom 2234; [Paras
8 to 14]
(iv) Kapilkunj C.H.S. Ltd. vs. State of Maharashtra &
Ors decided on 12/13th December 2023 in Writ
Petition No. 2157 of 2021; [Paras 23, 41, 42]
(v) Rakhi Kamal Thakur vs. Rebuilt & Ors. decided on
31st August 2023 in Appeal from Order No. 534 of
2023; [Paras 15, 20, 25 to 30]
(vi) Tuvin Constructions LLP vs. State of Maharashtra
& Ors. decided on 9th September 2025 in Writ
Petition No. 1673 of 2025; [Paras 12 to 16]
15. In Vaidehi Akash (supra), this Court expressly rejected the
very contention now urged before me - that the agreements executed
by the terminated developer during the subsistence of the
Development Agreement bind the Society, or that the Society itself,
as landowner, assumes the status of a "promoter" under MOFA, and
becomes liable to third-party purchasers.
(i) The learned Single Judge held that purchasers
under agreements with the terminated developer
have no privity of contract with the Society; their
rights are entirely derivative of, and contingent
upon, the developer's subsisting rights under the
Development Agreement. Once the Society validly
terminated that agreement, the developer's rights
and consequently those of the purchasers - stand
extinguished.
(ii) The Court further clarified that the Society, being
the landowner, could not be saddled with the
statutory obligations of a "promoter" under MOFA
Ashwini ao-362-2024-J Fk.doc
vis-à-vis third-party purchasers. Their remedies, if
any, lie only against the erstwhile developer in
damages, not against the Society or the newly
appointed developer. Importantly, the Court
emphasized that redevelopment projects exist
primarily to secure permanent housing for Society
members; any relief to third-party purchasers
jeopardising this objective would be inequitable, as
it would impede or defeat the members 'rights to
rehabilitation. [Paras 80 to 93]
16. In Goregaon Pearl (supra), this principle was reaffirmed even
after the advent of RERA. The Court, upon comparing the definitions
of "promoter" under MOFA and RERA, held that Vaidehi Akash
continues to govern the field. RERA, though enacted to promote
consumer protection and transparency, does not enlarge the
liabilities of a Society as landowner vis-a-vis purchasers claiming
through a terminated developer. [Paras 6 to 8]
17. The same ratio was applied consistently in Rakhi Kamal
Thakur (supra). [Paras 15, 20, 25 to 30]
18. In Deepak Thakoor (supra), a Division Bench of this Court
expressly upheld and confirmed the principles laid down in Vaidehi
Akash and Goregaon Pearl. [Paras 8 to 14]
19. In Kapilkunj (supra), the Division Bench reiterated that:
i. third-party sale agreements entered into by the
erstwhile developer cannot compromise or curtail
the rights of Society members;
Ashwini ao-362-2024-J Fk.doc
ii. third-party purchasers have no right, title or
interest in the Society's property;
iii. upon termination of a development agreement, any
additional FSI or buildable area accrues exclusively
to the Society, to meet the redevelopment costs; and
iv. there is no privity of contract between the Society
and such third-party purchasers. [Paras 23, 41, 42]
20. More recently, in Tuvin Constructions (supra), a Division
Bench of this Court clarified that a new developer cannot be saddled
with liabilities towards allottees of the erstwhile developer. The
insistence by RERA authorities on obtaining consent of such allottees
for change of developer or fresh project registration was held
misconceived. The Court reiterated that neither the Society nor its
new developer could be treated as co-promoters in respect of
purchasers claiming through the terminated developer. [Paras 12 to
16].
21. The present case stands squarely covered by the aforesaid
decisions. The consistent view of this Court is that purchasers
claiming through a terminated developer cannot assert or enforce
any rights against the Society or the newly appointed developer.
Their remedies, if any, are confined to claims for damages against the
erstwhile developer.
22. In ASF Buildtech Pvt. Ltd. v. Shapoorji Pallonji and Co. Pvt.
Ashwini ao-362-2024-J Fk.doc
Ltd.6 the Hon'ble Supreme Court clarified that where the Chief
Justice or his designate actually determines an issue under the
Arbitration Act, the such determination cannot be described as
merely "prima facie". Once issues are finally decided after hearing
the parties, it can no longer be prima facie, but would be a decision
binding in law. The judgment underscores that the arbitral tribunal
cannot reopen such issues, which may only be disturbed by a
competent court. These observations make clear that the use of the
expression "prima facie" in a judgment does not reduce the binding
effect of the decision--once the court reaches a determination, it
operates as a precedent.
23. Similarly, the Division Bench of this Court in Deepak
Prabhakar Thakoor (supra), which also dealt with third-party
purchasers in a redevelopment dispute, noted that in Vaidehi Akash
(supra) the learned Single Judge had observed that there was "prima
facie no case" to treat the Society as a promoter. Nevertheless, the
Division Bench held that it was in "respectful agreement with all
these findings on law" and "emphatically reaffirmed Vaidehi Akash".
By expressly endorsing the reasoning of the Single-Judge, the
Division Bench elevated those observations as binding legal
principles despite the use of "prima facie" language.
24. Thus, in my view the mere use of the words "prima facie" in a
judgement does not dilute its binding effect. Once a Court,
(2025) 9 SCC 76 : 2025 SCC OnLine SC 1016 at page 151
Ashwini ao-362-2024-J Fk.doc
after hearing the parties, renders a determination on an issue, that
decision becomes conclusive and binding and cannot be treated as
tentative. This is particularly so where a Division Bench
subsequently confirms the Single Judge's reasoning - as was done in
Deepak Prabhakar Thakoor - thereby reaffirming and crystallising
the principles laid down in Vaidehi Akash as a binding precedent.
25. The Appellants place reliance on Farhat Co-operative Housing
Society Ltd., Mumbai Vs. Malkani Enterprises, Mumbai and Others 7,
to contend that where a Society, acting as owner, undertakes and
completes construction through a developer, such an owner would
fall within the ambit of a 'Promoter' as defined in Section 2(c) of
MOFA.
26. It is contended that the Respondent No.2 - the Society -
executed the Development Agreement with the builder who had not
only commenced but also completed considerable construction on the
property thereby attracting the definition of 'Promoter'.
27. I however find merit in the Respondent's contention that,
Farhat CHS (supra) dealt with a challenge to an order of unilateral
deemed conveyance granted by the Competent Authority under
MOFA in favour of a flat purchasers' society, against the landowners
and the developer who had jointly developed a building and sold flats
under MOFA agreements. [Para 23, 26]. It was in that specific
context that the Court held both landowners and the developer to be
(2014) 6 Mah LJ 358.
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"promoters" and liable to convey the building to the society. The ratio
of Farhat thus turns on deemed conveyance under MOFA and does
not apply to the present redevelopment context.
Authority to the Developer:
28. The Appellants then place reliance on Ramniklal Tulsidas
Kotak Vs. Varsha Builders & Ors.8, particularly paragraphs 16 and
17, to contended that the irrevocable Power of Attorney executed by
the Society in favour of developer (Respondent No.1) expressly
authorized the latter to collect monies from the flat purchasers on
behalf of the Society, evidenced by the Society's signature as a
confirming party to certain sale agreements. It is further contended
that the object of the MOFA is to protect flat purchasers and to curb
malpractices. The decision interpreted the term 'promoter' to include
the owner of the land and held that if a promoter is merely a
developer under an agreement, the owner must be made a confirming
party to bind him to the transactions with flat purchasers and secure
the flat purchaser. Under the scheme of MOFA, where the promoter
develops the land as agent of the owner, such agency must be
irrevocable. On this basis, it is contended that Respondent No.2-
Society is deemed to fall within the definition of 'promoter' and is
bound by the obligations cast upon the erstwhile developer.
29. The argument is repelled by the Respondents and I find merit
in their contention that this case dealt with four questions of law
1993 (1) Mh.L.J 323 : AIR 1992 Bombay 62
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pertaining to the issuance of title certificates by solicitors. [Paras 18,
22, 23, 27]. Any general observations made regarding MOFA are
obiter dicta and do not constitute binding ratio. In fact, Ramniklal
was specifically considered and distinguished by this Court in
Goregaon Pearl (supra). [Para 7]. Even the observations in Para 17
relied upon by the Appellants are inapplicable because:
(a) The Society was not a party to the alleged sale
agreement executed between the Appellants and
Respondent No. 1. Respondent No. 1 signed the
agreement as constituted attorney of Respondent No. 2
[Pg. 84 of AO] A copy of the alleged Power of Attorney is
not even annexed to the agreement annexed to the
Plaint.
(b) The Power of Attorney to development and did not
authorise sale on behalf of the No. 1 was limited to
Respondent No. 2 [clause 12 @ Pg. 14 of DA]. The sale by
Respondent No. 1 was on his own account.
(c) The alleged sale agreement itself stipulates that in
case of disputes, responsibility would rest solely with
Respondent No. 1 [clause 24 @ Pg. 80]. This aligns with
the Development Agreement (since terminated), which
contained an indemnity clause requiring Respondent No.
1 to indemnify Respondent No. 2 against claims by
persons claiming through Respondent No. 1 [clause 18 @
Pg. 17 of DA].
(d) The power of sale given under the Power of
Attorney executed by the Respondent No. 2 in favour of
Respondent No. 1 was to facilitate the redevelopment
process. The Respondent No. 1 was not authorised to
make sales on behalf of Respondent No. 2. Respondent
No. 1 was selling free sale component flats on his own
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account. This is clear from a perusal of the DA and PoA
read together.
Interim Orders whether binding precedents:
30. The Appellants place reliance on State of Assam Vs. Barak
Upatyaka D.U. Karmachari Sanstha,9 to contend that the Hon'ble
Supreme Court held that interim orders passed in a Writ Petitions
under Article 32 do not constitute final decisions or binding
precedents. Paragraph 10 of that judgement clarifies that reasons
assigned in non-final interim orders containing prima facie findings
are only tentative and confined to peculiar facts of those cases. On
this basis, it is contended that the observations in Vaidehi Akash
Housing Private Ltd. Vs. New D.N. Nagar Co-operative Housing
Society Union Ltd. & Ors.10 cannot be treated as an authoritative
pronouncement laying down the law, since those observations were
rendered in the peculiar factual matrix of that case.
31. I agree with the Respondents contention that Barak Upatyaka
(supra) arose from a Writ Petition seeking release of grant-in-aid
sanctioned by the State of Assam. [Para 2]. The observations in
paragraphs 9 and 10, relied upon by the Appellants, were made in
the context of two Article 32 matters involving interim directions of
the Supreme Court, which themselves expressly clarified that they
did not lay down binding law. The reliance placed on this decision is
therefore misplaced. The contention that Vaidehi Akash (supra) is
2009 (5) SCC 694.
(2015) 3 AIR Bom R 270.
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not binding merely because it arose out of an interim application is
misconceived. The present proceedings too arise from an order
rejecting interim relief in a Notice of Motion. Accordingly, the ratio of
Vaidehi Akash - which directly addresses the rights of purchasers
claiming through a terminated developer - applies with equal force to
the present case.
Agent's Interest in subject matter:
32. The Appellants next rely on Amar Nath Vs. Gian Chand and
Anr.11, wherein the Hon'ble Supreme Court examined Sections 201,
202 and 208 of the Indian Contract Act,1872, and held that Section
202 carves out an exception to the general rule in Section 201 -
namely, that where an agent has an interest in the subject-matter of
the agency, the agency cannot, in the absence of an express contract,
be terminated to the prejudice of that interest, and is therefore
irrevocable. The Court further held that the termination of an agent's
authority does not take effect vis-à-vis third parties until they have
knowledge of such termination.
33. On the strength of this decision, it is contended that the
agreements, MOUs, and allotment letters in favour of the Appellants
were executed when the Development Agreement and POA were
subsisting and binding. It is submitted that these transactions were
entered into after execution of Supplemental Agreement between the
Respondent Nos.1 and 2, the recitals of which clearly indicate that
2022 INSC 106.
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Respondent No.2-Society was aware that Respondent No.1 had sold
flats in the free-sale component to third-party purchasers.
Accordingly, it is urged that Respondent No.2-Society must be held to
have ratified the acts of the developer in entering into transactions
with the Appellants, and is consequently liable as a 'Promoter' vis-à-
vis the Appellants.
34. I find merit in the Respondents submission that the facts in
Amar Nath are wholly distinct: it involved a fraudulent sale by a
power of attorney holder acting after revocation of the Power of
Attorney, to the knowledge of the buyer. [Para 2 @ Pg. 72] In
contrast, the alleged sale transaction here between the Appellants
and Respondent No. 1 was independent; Respondent No. 1 did not act
as agent of Respondent No. 2 nor was the alleged sale in favour of the
Appellant made on behalf of the Respondent No. 2. Hence, the ratio of
Amar Nath is inapplicable.
35. Furthermore, any rights of the Appellants are necessarily
subject to the contractual arrangement between Respondents No. 1
and 2, of which the Appellant had full knowledge, which has been
validly terminated by Award dated 7 th November 2022. By virtue of
Section 35 of the Arbitration and Conciliation Act, 1996, the said
Award is binding on the Appellants, who claim through Respondent
No. 1.
Enforcement of Statutory obligations on basis of unregistered
documents:
Ashwini ao-362-2024-J Fk.doc
36. The Appellants further rely upon C. Radhakrishnan Vs. Richa
Construction & Associates & Anr.12, wherein this Court held that a
Suit for enforcement of statutory obligations under Sections 4 and 4A
of the MOFA is maintainable even on the basis of unregistered
agreement for sale, it is submitted that the Respondent No.1 had not
executed the registered agreements with certain Appellants despite
having received the full or substantial part of consideration. These
Appellants, therefore, were entitled to seek enforcement of their
unregistered agreements, MOUs, or allotment letters.
37. I find merit with the Respondents' submissions that the facts of
C. Radhakrishnan bear no resemblance to the present case. In that
matter, there was no dispute between the developer and the society,
and it does not appear that the project was one of redevelopment
project. The only issue before the Court was whether a third-party
purchaser had established an agreement to sell with the developer
and could seek a mandatory injunction against the developer for
compliance with MOFA obligations. That judgment, therefore, has no
bearing on the present redevelopment dispute where the
redevelopment agreement between Respondent No. 1 and 2 has been
validly terminated, and such termination has been upheld by an
Arbitral Award.
38. The authorities cited by the Appellants arise in entirely distinct
factual and legal contexts and do not advance their case. None of
Judgment dated 16th January 2020 in First Appeal No.514 of 2014.
Ashwini ao-362-2024-J Fk.doc
these decisions dilute the settled position that third-party
purchasers claiming through a terminated developer have no
enforceable rights against the Society or its new developer.
39. In my view, the judgment in the case of Deepak Prabhakar
Thakoor (supra) conclusively determined the issue. The Division
Bench, while considering the challenges raised by third-party
purchasers asserting rights created by a terminated developer,
specifically referred to paragraphs 80 to 93 of Vaidehi Akash. The
Division Bench observed that these paragraphs "speak eloquently" to
the determination of the issue and held itself in complete and
emphatic agreement with all findings of law recorded therein.
40. It follows that Appellants who hold allotment letters, MOUs,
registered or unregistered agreements cannot assert an independent
claim against the Society or anyone claiming through it once the
rights of the prior developer have been lawfully terminated under the
Development Agreement.
41. I find that the impugned order is well-reasoned and cogently
articulated. It suffers from no perversity or legal infirmity
warranting an interference at this stage.
42. For the reasons aforesaid, the Appeals from Order stand
dismissed, with no order as to costs.
43. The accompanying interlocutory applications also stand
dismissed.
Ashwini ao-362-2024-J Fk.doc
44. The learned counsel for the Appellants requests continuation of
interim protection granted vide a order dated 7 th May 2024 for a
period of six weeks. In view of the Respondent-Society members
rights being severely affected since more than a year by the
protection granted in favour of the Appellants, the request is
rejected.
(KAMAL KHATA, J.)
Cases Referred:
1. Vaidehi Akash Housing Pvt. Ltd. versus D. N. Nagar C.H.S. Union Ltd. & Ors
2014 SCC OnLine Bom 5068
2. arhat Co-operative Housing Society Ltd., Mumbai Vs. Malkani Enterprises,
Mumbai and Others (2014) 6 Mah LJ 358
3. State of Assam Vs. Barak Upatyaka D.U. Karmachari Sanstha 2009 (5)
SCC 694
4. Goregaon Pearl CHSL Vs Dr. Sema Mahadev Paryekar and Others 2019
SCC OnLine Bom 3274
5. Deepak Prabhakar Thakoor Vs. MHADA & Ors. 2023 SCC OnLine Bom
2234.
6. Kapilkunj C.H.S. Ltd. vs. State of Maharashtra & Ors decided on 12/13th
December 2023 in Writ Petition No. 2157 of 2021
7. Rakhi Kamal Thakur vs. Rebuilt & Ors. decided on 31st August 2023 in
Appeal from Order No. 534 of 2023
8. Tuvin Constructions LLP vs. State of Maharashtra & Ors decided on 9th
September 2025 in Writ Petition No. 1673 of 2025
9. ASF Buildtech Pvt. Ltd. v. Shapoorji Pallonji and Co. Pvt. Ltd. (2025) 9
SCC 76 : 2025 SCC OnLine SC 1016
10. Ramniklal Tulsidas Kotak Vs. Varsha Builders & Ors. 1993 (1) Mh.L.J
323 : AIR 1992 Bombay 62
11. Amar Nath Vs. Gian Chand and Anr. 2022 INSC 106
12. C. RadhaKrishnan Vs. Richa Construction & Associates & Anr. Judgment
dated 16th January 2020 in First Appeal No.514 of 2014
