[Cites 11, Cited by 0]
Bombay High Court
High Court On Its Own Motion vs Pragnesh Shah Hon Chairman And Ors. on 17 March, 2026
Author: Amit Borkar
Bench: Amit Borkar
2026:BHC-AS:12851
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Shabnoor
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 17541 OF 2024
SHABNOOR Raghunath Bandekar Pal,
AYUB
PATHAN Proprietor - M/s. D.S. Electronics,
Digitally signed
by SHABNOOR
AYUB PATHAN
S-2/3. Jyoti Deep Mahal, Nanda Patkar
Date: 2026.03.17
12:30:21 +0530 Road, Vile Parle (East), Mumbai - 400 057. ... Petitioner
V/s.
1. Pragnesh Shah,
Hon. Chairman, Amardeep Mahal
CHS Ltd., Plot No. 209, Nanda
Patkar Road, Vile Parle
(E), Mumbai - 400 057.
2. Vinod Solanki,
Hon. Secretary, Amardeep Mahal CHS
Ltd., Plot No. 209, Nanda Patkar Road,
Vile Parle (E), Mumbai - 400 057.
3. Deepak Shah,
Hon. Treasurer, Amardeep Mahal CHS
Ltd., Plot No. 209, Nanda Patkar Road,
Vile Parle (E), Mumbai - 400 057.
4. Harsh Seth,
Managing Committee Member,
Flat No. 302/303
5. Sagar Bhaskar Kotian,
Managing Committee Member,
Flat No. 45/46,
Nos. 4 & 5, all having address at :
Amardeep Mahal CHS Ltd., Plot No.
209, Nanda Patkar Road, Vile Parle (E),
Mumbai - 400 057.
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6. Amar Deep Mahal Co-Op. Hsg. Soc.
Ltd., Plot No. 209, Nanda Patkar Road,
Vile Parle (E), Mumbai - 400 057.
7. Sharad Jayantilal Mehta,
Managing Director of M/s. Sun Shine
Realtors Pvt. Ltd., Builder & Developer
Ground Floor, Chandra Villa, Nehru
Road, Vile Parle (East), Mumbai - 400
057.
8. M/s. Sun Shine Realtors Pvt. Ltd.,
Builder & Developer Ground Floor,
Chandra Villa, Nehru Road, Vile Partle
(East), Mumbai - 400 057.
9. Nitin Maniar,
Maniar Associates, A/5, Tagore Park,
Opp. Axix Bank S.V. Road, Malad (W),
Mumbai 400064. ... Respondents
WITH
CIVIL SUO MOTU CONTEMPT PETITION NO. 18 OF 2025
High Court On Its Own Motion ... Petitioner
V/s.
Pragnesh Shah,
Hon. Chairman and Ors. ... Respondents
Ms. Neeta Jain with Ms.Srushti Patil, & Mr. Dev Pola
i/by Alochan Naik for the Petitioner.
Adv. E.A. Sasi with Ms. Bhagyashree Mangle and Mr.
Bijoy Chacho for Respondent Nos. 3 & 9.
Adv. Ishani Khanvilkar for Respondent No. 6.
2
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CORAM : AMIT BORKAR, J.
RESERVED ON : FEBRUARY 23, 2026
PRONOUNCED ON : MARCH 17, 2026
JUDGMENT:
1. By the present Petition instituted under Article 227 of the
Constitution of India, the Petitioner has questioned the legality and
propriety of the impugned order dated 1 July 2024 passed by the
Co-operative Court No.4 at Mumbai. By the said order, the Co-
operative Court rejected the Contempt Application preferred by the
Petitioner against the Respondents. This court by order dated 17.
12. 2025 issued suo motu contempt notice.
2. The facts according to petitioner are as under. Respondent
Nos.1 to 5 are stated to be the office bearers and members of the
Managing Committee of Respondent No.6 Co-operative Housing
Society. Respondent Nos.7 and 8 are the erstwhile developers of
the property in question, while Respondent No.9 has been
subsequently appointed by Respondent No.6 Society as the new
developer for undertaking redevelopment of the property. The
record indicates that the Petitioner had earlier instituted Dispute
No. CC/IV/183 of 2009 before the Co-operative Court at Mumbai
against Respondent No.6 Society and Respondent No.8, who was
then the developer. The said dispute came to be amicably resolved
through Consent Terms dated 26 November 2010 executed
between the parties. The Consent Terms were signed on behalf of
Respondent No.6 Society by its Secretary and were also executed
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by Respondent Nos.7 and 8. Under the said Consent Terms, the
Respondents jointly and severally acknowledged that the Petitioner
is the bona fide member and owner of premises bearing No. B-03
admeasuring 360 sq. ft. carpet area, situated on the ground floor
of the B/C Wing of Amardeep Mahal Building. The said premises
were described as having essential amenities including electricity,
water and toilet facilities. It was further acknowledged that the
Petitioner had been using the said premises for commercial
purposes since the year 1984. The Consent Terms further
stipulated that upon redevelopment of the building and after
issuance of the Occupation Certificate, the Petitioner would be
allotted two newly constructed closed premises admeasuring 180
sq. ft. each, aggregating to 360 sq. ft., on the ground floor of the
redeveloped building. It was also agreed that the said premises
would be provided along with essential amenities such as water
supply, electricity and toilet facilities. The parties had also agreed
that the Respondents would pay transit rent to the Petitioner in
advance for a period of eighteen months and thereafter continue
to pay the same until the Occupation Certificate for the
redeveloped building was obtained. The transit rent was agreed to
be calculated at the rate of ₹65 per sq. ft. per month.
3. In partial compliance with the aforesaid Consent Terms,
Respondent No.8, through Respondent No.6 Society, paid an
amount of ₹11,85,600/- towards transit rent for the period
commencing from 1 September 2010 until 30 November 2014.
However, according to the Petitioner, the Respondents thereafter
failed to continue payment of transit rent as agreed. In the
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meanwhile, Respondent No.6 Society terminated the development
agreement executed with Respondent No.8 and subsequently
appointed Respondent No.9 as the new developer.
Notwithstanding the redevelopment process undertaken thereafter,
neither the erstwhile developer nor the newly appointed developer
provided the Petitioner with the agreed premises admeasuring 360
sq. ft., nor was the transit rent continued in accordance with the
Consent Terms.
4. In the aforesaid circumstances, the Petitioner instituted Civil
Suit No.2479 of 2019 before the City Civil Court at Dindoshi
seeking enforcement of the Consent Terms. In the said suit, the
Petitioner sought reliefs including allotment of the premises
admeasuring 360 sq. ft. in the redeveloped building as well as
payment of transit rent in terms of the Consent Terms. During the
hearing of the Petitioner's Notice of Motion in the said suit on 16
November 2019, Respondent No.9 made a statement before the
Court that it would retain an amount of ₹1,00,00,000/-, being the
corpus amount payable to the Society, and would not disburse the
said amount until the hearing of the Notice of Motion. The
statement was made after Respondent No.9 had been informed of
the Consent Terms executed between the Petitioner and the
Society. It is stated that the Society has not challenged the said
statement till date.
5. Respondent No.6 Society had also filed a Counter-Claim in
the aforesaid civil suit. However, the said Counter-Claim came to
be dismissed on 14 February 2024. Though the Society thereafter
filed a Notice of Motion seeking restoration of the Counter-Claim,
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the Petitioner contends that such attempt is not legally sustainable
inasmuch as the Society seeks, through the said proceedings, to
question the validity of the Consent Terms executed in the year
2010.
6. During the pendency of the suo motu contempt proceedings,
an undertaking dated 6 January 2026 came to be filed before this
Court by one Deepak Nemchand Shah in his capacity as the
Managing Committee member of Amardeep Mahal Co-operative
Housing Society Ltd. In the said undertaking, the deponent stated
that the Society would pay an amount of ₹10,06,800/- to the
Petitioner towards the balance outstanding transit rent. The said
undertaking further records that the payment is proposed to be
made in view of the Tripartite Agreement and in compliance with
the directions issued by this Court in its order dated 23 December
2025. The deponent also undertook on behalf of the Society to
furnish a Bank Guarantee securing the said amount of transit rent
as well as the compensation agreed to be paid by the Society,
subject to the final outcome of the proceedings pending before the
City Civil Court at Dindoshi, Mumbai.
7. During the pendency of the same proceedings, another
undertaking dated 24 January 2026 was filed by Deepak
Nemchand Shah, as a member of the Managing Committee and
authorised signatory of Amardeep Mahal Co-operative Housing
Society. In the said undertaking, it was stated that the Society,
acting through the deponent and with the authority of the General
Body, would provide a Bank Guarantee in favour of the Petitioner
in respect of the amount calculated on the basis of the Ready
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Reckoner Rate for an area admeasuring 360 square feet. The said
amount was stated to be ₹19,85,948/- as reflected in Annexure-B
to the undertaking. It was further undertaken that the said Bank
Guarantee would be furnished in compliance with the directions
contained in paragraph 5 of the order dated 23 December 2025
passed by this Court in the present proceedings, or alternatively
the said amount would be deposited before this Court if so
directed.
8. The Petitioner has filed a reply opposing the aforesaid
undertakings. In the reply, the Petitioner has first dealt with the
undertaking dated 6 January 2026 concerning the payment of
transit rent. According to the Petitioner, the Respondents have
calculated the rent at the rate of ₹45 per sq. ft. for a period of
sixty-six months, which is contrary to the Consent Terms executed
between the parties. The Petitioner has pointed out that the
Consent Terms specifically stipulate payment of rent at the rate of
₹65 per sq. ft. per month. The Petitioner has further relied upon
paragraph 7 of the Consent Terms, which records that in the event
the premises are not handed over within the stipulated period, the
Petitioner would be entitled to claim rent or compensation in
advance for the extended period at a monthly rate which shall not
be less than ₹65 per sq. ft. for the transit accommodation. On this
basis, the Petitioner contends that the Respondents are attempting
to depart from the express terms of the Consent Terms by
calculating the transit rent at a lower rate. It has been further
stated by the Petitioner that as per the Consent Terms the transit
rent payable at the rate of ₹65 per sq. ft. has continued to accrue
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since the date of displacement of the Petitioner from the premises.
According to the Petitioner, the total amount of transit rent payable
as on date is ₹57,56,400/-. Out of the said amount, a sum of
₹11,85,600/- has already been paid for the period from 10
October 2010 to 30 November 2014. The Petitioner therefore
contends that the balance amount of ₹45,70,800/- remains
outstanding and payable to him. In these circumstances, the
Petitioner has disputed the correctness of the amount of
₹10,06,800/- mentioned in the undertaking dated 6 January 2026
and has asserted that the said undertaking does not reflect the
liability arising under the Consent Terms.
9. Ms. Neeta Jain, learned Advocate appearing on behalf of the
Petitioner submitted that the Respondents have deliberately failed
to comply with the Consent Terms dated 26 November 2010. It
was contended that the Respondents have neither paid the agreed
transit rent nor provided the Petitioner with the commercial
premises admeasuring 360 sq. ft. as specifically stipulated under
the said Consent Terms. It was further submitted that the premises
agreed to be allotted to the Petitioner under the Consent Terms
were commercial in nature. According to the Petitioner, the
original premises had been used for commercial purposes since the
year 1984, and the Consent Terms clearly record that the newly
constructed premises to be provided in the redeveloped building
would also be equipped with essential facilities such as water
supply, electricity and toilet amenities. Learned Advocate further
contended that the Respondent Society has sought to undervalue
the premises in question by treating the same as a parking space
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and by applying only 25% of the residential rate. It was submitted
that such an approach is inconsistent with the terms of the Consent
Terms. The valuation certificates relied upon by the Society itself
indicate that the rate for residential premises in the said locality is
₹2,37,440/- per sq. meter, whereas the rate applicable to
commercial or shop premises is ₹3,15,900/- per sq. meter. On that
basis, it was submitted that the value of the commercial premises
admeasuring 360 sq. ft., which is required to be provided to the
Petitioner, would approximately be ₹1,26,83,385/-.
10. Learned Advocate further submitted that under the Consent
Terms the Petitioner was entitled to receive transit rent at the rate
of ₹65 per sq. ft. per month. However, according to the Petitioner,
the Society has wrongly calculated the transit rent at the rate of
₹45 per sq. ft. and has failed to disclose, on affidavit, the amount
received from the erstwhile developer towards transit rent
attributable to the Petitioner. It was contended that the total transit
rent payable to the Petitioner as on date amounts to ₹57,56,400/-,
out of which an amount of ₹11,85,600/- has already been paid,
leaving a balance amount of ₹45,70,800/- payable to the
Petitioner. On the basis of the aforesaid submissions, learned
Advocate for the Petitioner contended that despite several
opportunities the Respondents have intentionally failed to comply
with the Consent Terms and have thereby committed wilful
disobedience, which would attract the provisions of civil contempt
as defined under Section 2(b) of the Contempt of Courts Act,
1971. Learned Advocate for the Petitioner therefore submitted that
the impugned order passed by the Co-operative Court deserves to
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be set aside and that the Respondents ought to be held guilty of
contempt for failure to comply with the Consent Terms.
11. Per contra, Ms. Ishani Khanwilkar, learned Advocate
appearing on behalf of Respondent No. 6 and Mr. E A Sasi for
managing committee members submitted that no case of contempt
is made out against the said Respondents either before this Court
or before the Co-operative Court. It was contended that contempt
proceedings do not recognise the principle of vicarious liability,
and therefore the alleged acts of Respondent No.2 cannot
automatically be attributed to Respondent Nos.3, 5 and 6. Learned
Advocates further submitted that the pleadings contained in the
Contempt Application do not disclose any act of wilful
disobedience of any order of the Court, which is a necessary
ingredient for establishing civil contempt. It was contended that
the Petitioner has not attributed any specific role or allegation
against managing committee members. According to the
Respondents, the Consent Terms relied upon by the Petitioner were
executed only by Respondent No.2 and therefore the present
Respondents cannot be held responsible for any alleged breach
thereof. It was further submitted that the only undertaking
allegedly given on behalf of the Society through its Secretary was
that in the event of the death of the Petitioner, his son would be
admitted as a member of the Society. According to the
Respondents, Clause 11 of the Consent Terms indicates that the
said clause can at best be construed as an agreement between the
parties and not as an undertaking given to the Court. In any case,
the contingency contemplated under the said clause has never
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arisen.
12. Learned Advocates further submitted that paragraph 6 of the
Contempt Application itself indicates that the alleged cause of
action arose in January 2014. Under Section 20 of the Contempt of
Courts Act, 1971, contempt proceedings are required to be
initiated within one year from the date on which the alleged
contempt is said to have been committed. Since the proceedings
were not initiated within the prescribed period, the same are
barred by limitation. It was further contended that mere failure to
perform obligations arising out of Consent Terms or an agreement
between the parties cannot attract the provisions of the Contempt
of Courts Act, having regard to the definitions of civil contempt
and criminal contempt contained in Sections 2(b) and 2(c) of the
said Act.
13. Learned Advocates further submitted that in the Affidavit
dated 22 December 2025 the Respondents have specifically stated
that no agenda relating to the alleged Consent Terms was
circulated amongst the members of the Society, no General Body
Meeting was convened and no resolution was passed authorising
Respondent No.2 or any other person to execute the said Consent
Terms. According to the Respondents, these averments have not
been effectively rebutted by the Petitioner. It was further
contended that even assuming the Consent Terms to be valid,
Clause 11 thereof expressly records that the said Consent Terms
were to operate only as an additional agreement concerning
alternate accommodation, and therefore any alleged breach
thereof would amount merely to breach of agreement and not
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contempt of Court. Learned Advocates further submitted that the
Petitioner has not approached the Court with clean hands.
According to the Respondents, the Petitioner had allegedly
purchased only an open stilt car parking space from the builder,
though he was not occupying any residential or commercial
premises in the Society. It was also contended that the Petitioner
carried out unauthorised additions and alterations by constructing
walls on three sides of the said space and installing a shutter
without obtaining permission from the Municipal Corporation.
According to the Respondents, the said unauthorised construction
was demolished by the Municipal Corporation and was
subsequently reconstructed by the Petitioner. It was submitted that
these material facts have been suppressed from the Court.
14. Learned Advocates further placed reliance upon the decision
in Vinod K. Chawla vs. Shiv Bhakti Films 2014(1) Bom C R 736 ,
wherein it has been held that parties cannot, by way of a consent
agreement, achieve something which is contrary to law and that a
decree based upon such agreement cannot override statutory
provisions. It was submitted that in the present case the alleged
arrangement violates the provisions of the Maharashtra Regional
and Town Planning Act, 1966, particularly Sections 52 and 53
thereof, as well as the provisions of the Mumbai Municipal
Corporation Act. Reliance was also placed on the judgment of the
Supreme Court in State of Punjab vs. Amar Singh 1974(2) SCC 70 ,
wherein it has been held that if a compromise decree is found to
be unlawful, the Court ought not to enforce such decree. Learned
Advocates further relied upon the judgment of the Madras High
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Court in Tmt. G. Saroja vs. Government of Tamil Nadu
MANU/TN/3400/2010, wherein it has been held that a judgment
or decree obtained by fraud or by suppression of material facts is a
nullity in the eyes of law and can be challenged at any stage.
15. On the basis of the aforesaid decisions, it was submitted that
the Petitioner has obtained the decree from the Co-operative Court
by suppressing material facts, particularly the fact that he allegedly
had no pre-existing right to a closed commercial premises and had
only purchased an open stilt parking space under an unstamped
and unregistered agreement. Learned Advocates further contended
that the Petitioner has suppressed material facts and has attempted
to enforce the Consent Terms while simultaneously claiming transit
rent at a rate higher than that being paid to other bona fide
members of the Society.
16. It was further submitted that the jurisdiction under the
Contempt of Courts Act is not intended to be utilised as a
mechanism for execution of decrees. In this regard reliance was
placed on the judgment of the Supreme Court in R.N. Dey vs.
Bhagyabati Pramanik, 2000(4) SCC 400, wherein it has been held
that contempt jurisdiction should ordinarily not be invoked where
alternative remedies are available to the parties. Learned Advocate
submitted that in the present case the Petitioner has himself
resorted to an alternate remedy by filing a civil suit seeking
enforcement of the Consent Terms and the alleged Tripartite
Agreement. In such circumstances, it was contended that contempt
proceedings are not maintainable. It was also submitted that the
standard of proof required in contempt proceedings is akin to that
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applicable in criminal proceedings, namely proof beyond
reasonable doubt.
17. Lastly, it was submitted that where two views are possible,
the view favourable to the alleged contemnor ought to be adopted.
According to the Respondents, Respondent Nos.3, 5 and 6 had no
knowledge of the alleged Consent Terms and the said fact remains
unrebutted on record. It was therefore submitted that no case of
wilful disobedience is made out against the said Respondents. On
these grounds, learned Advocate appearing for Respondent Nos.3,
5 and 6 prayed that the present Petition be dismissed.
REASONS AND ANALYSIS:
18. This Court has carefully gone through the entire record and
has also heard the learned advocates appearing for the respective
parties at considerable length. It is not in dispute that Consent
Terms dated 26 November 2010 were executed between the
parties in earlier proceedings. According to the Petitioner, those
Consent Terms created binding obligations upon the Respondents,
particularly regarding payment of transit rent and provision of
alternate premises after redevelopment. The grievance of the
Petitioner is that those obligations have not been honoured by the
Respondents. On that basis the present controversy has arisen.
19. The record further shows that in view of the alleged non-
compliance with the Consent Terms, proceedings in the nature of
contempt came to be initiated before this Court. During the
pendency of those proceedings, two separate undertakings came to
be filed before this Court on behalf of the Respondent Society. The
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first undertaking is dated 6 January 2026 and has been filed by Mr.
Deepak Nemchand Shah, who claims to be a member of the
Managing Committee and an authorised signatory of the Society.
The second undertaking is dated 24 January 2026 and has been
filed Mr. Deepak Shah. The Petitioner has strongly opposed the
acceptance of these undertakings. According to him, the
undertakings do not correctly reflect the full liability arising under
the Consent Terms and therefore cannot be treated as adequate
compliance. On the other hand, the Respondents have supported
the undertakings and have submitted that they demonstrate the
bona fide intention of the Society to secure the claim of the
Petitioner. In view of these rival positions, it becomes necessary for
the Court to examine whether the undertakings deserve to be
accepted and what would be their proper legal effect.
20. At the outset, it is necessary to understand the nature of
these undertakings. An undertaking given to the Court is a solemn
assurance made to the Court by a person who assumes
responsibility for its performance. In the present case both
undertakings have been filed by person who claim to represent the
Society in their official capacity. He is the Managing Committee
member who also states that he is authorised by the General Body.
The undertaking dated 6 January 2026 records that the Society
would pay an amount of ₹10,06,800 to the Petitioner towards
outstanding transit rent. In addition, the Secretary has undertaken
that a Bank Guarantee would be furnished in order to secure the
said amount of transit rent as well as the compensation agreed to
be paid by the Society, subject to the final outcome of the
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proceedings pending before the City Civil Court at Dindoshi. The
second undertaking dated 24 January 2026 provides that the
Society would furnish a Bank Guarantee for an amount of
₹19,85,948 calculated on the basis of the Ready Reckoner rate for
an area admeasuring 360 square feet. It is further stated that the
said amount may alternatively be deposited in Court if so directed.
These undertakings specify concrete financial commitments and
provide a mechanism for securing the same. For that reason they
possess legal importance and are capable of being acted upon by
the Court.
21. However, before accepting such undertakings the Court must
also consider whether doing so would cause prejudice to the
Petitioner or would in any manner defeat the operation of law. The
Respondents have raised several legal objections. They have
argued that the contempt proceedings themselves may not be
maintainable. They have relied upon the principle that contempt
jurisdiction should not ordinarily be used as a substitute for
execution of a decree or agreement. They have also argued that
there is no concept of vicarious liability in contempt proceedings
and that certain material facts were allegedly suppressed by the
Petitioner. Further contentions have been raised regarding the
legality of the arrangement under municipal laws and under the
Maharashtra Regional and Town Planning Act.
22. On the other hand, the Petitioner has focused upon the
question of monetary liability. According to him, the Consent
Terms clearly stipulate that transit rent is payable at the rate of
₹65 per square foot per month until possession of the new
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premises is handed over. Based on this calculation, the Petitioner
asserts that the total amount of transit rent payable has reached
₹57,56,400. Out of this amount ₹11,85,600 has already been paid
earlier, leaving a balance of ₹45,70,800. The Petitioner therefore
contends that the figure of ₹10,06,800 mentioned in the
undertaking is far lower than what is actually due. He further
points out that the undertaking appears to have been calculated at
the rate of ₹45 per square foot for a limited period of sixty six
months, which according to him is inconsistent with the express
language of the Consent Terms.
23. The Court has carefully considered these rival submissions. It
becomes clear that the disputes between the parties are not
confined to a single issue. In fact, they operate at several different
levels. Some disputes concern the interpretation and enforceability
of the Consent Terms themselves. Other disputes relate to the
correct calculation of transit rent and the valuation of the
premises. Certain issues raised by the Respondents also involve
allegations regarding legality of the structure, municipal
permissions and other statutory provisions. These questions are
partly factual and partly legal. They require examination of
evidence and detailed consideration of documents. Such matters
ordinarily fall within the domain of a regular civil trial.
24. The jurisdiction exercised in contempt proceedings is of a
different character. The purpose of contempt jurisdiction is to
ensure respect for the authority of the Court and to secure
compliance with orders or undertakings given to the Court. The
Court always retains discretion in deciding how such jurisdiction
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should be exercised. In appropriate cases the Court may accept an
undertaking or security offered by a party instead of immediately
proceeding towards punitive action. If such undertaking effectively
safeguards the interest of the aggrieved party, the Court may
consider that course as more appropriate.
25. In the present matter the undertakings filed by the Society
contain a clear commitment to secure substantial amounts by way
of Bank Guarantee or deposit. Such financial security ensures that
the Petitioner's claim is not rendered illusory during the pendency
of the dispute. Once a Bank Guarantee is furnished, the Petitioner's
monetary interest remains protected to that extent. At the same
time the Respondents retain their right to contest the exact liability
in the pending civil proceedings. In other words, the undertakings
create an arrangement without finally deciding the disputed issues.
26. Viewed from this angle, the Court finds that the
undertakings serve a useful purpose. They provide a measure of
financial security to the Petitioner. At the same time they do not
prevent the parties from fully litigating their respective claims
before the competent civil court. It would therefore not be
appropriate for this Court, while exercising contempt jurisdiction,
to undertake a detailed examination of the entire accounting
dispute relating to transit rent or valuation of the premises. Those
matters are already the subject of Civil Suit No.2479 of 2019
pending before the City Civil Court at Dindoshi. That court is
better placed to examine evidence, interpret the Consent Terms in
detail and determine the precise monetary liability.
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27. For these reasons this Court considers it appropriate to
accept both undertakings for a limited purpose. The acceptance of
the undertakings is intended only to secure the financial interests
of the Petitioner during the pendency of the civil proceedings and
to ensure compliance with the directions already issued by this
Court. It must be clearly understood that acceptance of the
undertakings does not amount to a final determination of the
rights and liabilities of the parties. All issues relating to the exact
amount of transit rent, the interpretation of the Consent Terms and
the legality of the underlying arrangements remain open for
determination by the competent civil court.
28. The Court must also address the argument relating to
authority of the persons who filed the undertakings. The
undertakings have been filed by office bearer of the Society who
claim to act on behalf of the Society. There is no material placed
before the Court to conclusively demonstrate that he lacked
authority to bind the Society. In fact one of the undertakings
expressly states that the deponent has been authorised by the
General Body of the Society. In the absence of clear proof to the
contrary, the Court has no reason to doubt the representation
made by this office bearer. Once an undertaking is given to the
Court by an authorised officer of a co-operative society, the society
itself becomes bound by that undertaking.
29. Another aspect which requires clarification is the clause in
the undertakings stating that the payment or security is subject to
the final outcome of the civil proceedings. Such a clause indicates
that the security is being provided without prejudice to the final
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adjudication of rights. The Bank Guarantee, once furnished,
remains enforceable according to its terms and continues to
operate until the dispute is resolved. Therefore, the Petitioner's
interests are adequately protected.
30. The Court is also mindful of the Petitioner's apprehension
that acceptance of the undertakings may allow the Respondents to
avoid their full liability. That apprehension is addressed by
clarifying that the undertakings are being accepted only as a form
of interim security. The Petitioner remains free to pursue the entire
claim for transit rent and other reliefs in the civil suit. If the civil
court ultimately determines that a larger amount is payable, the
Respondents would remain bound by such determination. The
undertakings cannot be used as a shield to escape liability
established in accordance with law.
31. Finally, the allegations regarding suppression of facts,
unauthorised construction and possible violation of municipal or
planning laws also involve complicated factual inquiries. Such
questions cannot be conclusively resolved within the limited
jurisdiction of contempt proceedings. Those issues may
appropriately be examined in the civil suit or in other competent
proceedings if necessary. Accepting the undertakings therefore
allows the Court to preserve the Petitioner's financial security
while leaving the substantive disputes to be adjudicated.
32. For all these reasons, this Court finds it appropriate to accept
the undertakings dated 6 January 2026 and 24 January 2026 filed
on behalf of the Respondent Society. The acceptance is made with
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the understanding that the undertakings operate as binding
assurances to the Court and as security for the Petitioner's claim,
while all substantive disputes between the parties remain open for
determination in the pending civil proceedings.
33. For these reasons the Court accepts both undertakings and
frames the conditions for acceptance as follows.
(i) The Respondent no. 6 society shall furnish, within four
weeks from today, an unconditional, irrevocable and on-
demand Bank Guarantee in favour of the Petitioner for the
combined amount of ₹29,92,748 which is the aggregate of
₹10,06,800 and ₹19,85,948 as offered in the two
undertakings. The Bank Guarantee shall be issued by a
scheduled bank. Alternatively, the Respondents may deposit
the amount of ₹19,85,948 in Civil Court in Civil Suit
No.2479 of 2019 and furnish a Bank Guarantee for
₹10,06,800 as given per undertaking by the Mr. Deepak
Shah;
(ii) The Bank Guarantee shall be payable on demand and
shall remain valid for a period of six months from the date of
its issuance. The Respondents shall also undertake to renew
or extend the guarantee as may be necessary until final
disposal of the civil suit, failing which the Petitioner is
entitled to invoke the guarantee;
(iii) If the Bank Guarantee is not furnished or the deposit is
not made within the time directed, the contempt petition
shall be restored on the petitioner's motion. In that event this
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Court will proceed to consider the contempt petition on
merits including question of wilful disobedience and any
consequential relief;
(iv) The Civil Court shall decide Civil Suit No.2479 of 2019
on its own merits and in accordance with law, uninfluenced
by any observations made in this order.
34. In view of the acceptance of the undertakings and the
security directed to be furnished, the suo motu contempt
proceedings and Writ Petition No. 17541 of 2024 stand disposed
of.
35. There shall be no order as to costs.
(AMIT BORKAR, J.)
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