Guru Ram Das Bhawan & Ors. vs M/S Doon Apartments Pvt. Ltd.
2009 Latest Caselaw 2297 Del

     *IN THE HIGH COURT OF DELHI AT NEW DELHI

+                  CS(OS) 2140/1998

%                        Date of decision:     28th May, 2009

GURU RAM DAS BHAWAN & Ors.                             ....... Plaintiffs

                         Through: Mr. Suryakant Singhla and
                                 Mr. Shanto Mukerjee, Advocates

                     Versus
M/S DOON APARTMENTS PVT. LTD.                          ....... Defendant
               Through: Ex-parte


CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1.  Whether reporters of Local papers may
    be allowed to see the judgment?   Yes

2.    To be referred to the reporter or not? Yes

3.    Whether the judgment should be reported
      in the Digest? Yes

RAJIV SAHAI ENDLAW, J.

1. The plaintiff No. 1 claims to be an Association of the occupants

of Guru Ram Das Bhawan constructed by the defendant at Plots No.

A3 & A4, Community Centre, Ranjit Nagar, New Delhi. The plaintiffs

No. 2 & 3 are the President and the Secretary of the plaintiff No. 1

Association. The record reveals that the Delhi Municipal Corporation

on 11th March, 1979 held a public auction in respect of perpetual

lease hold rights of the aforesaid plots of land and the bid of the

defendant was highest and was accepted and the defendant was put

into possession of the said land on 19th July, 1979. The defendant

constructed on the aforesaid plots of land a Multi Storeyed Building

with a number of offices, flats, shops and godowns. The said building

was named 'Guru Ram Das Bhawan'. The defendant entered into

separate agreements with different persons regarding the

offices/flats/shops/godowns in the said building and agreed to sell

the offices/flats/shops/godowns in the said building to the said

purchasers on the terms and conditions contained therein.

2. As per the documents on record, it was inter alia agreed

between the defendant and the purchasers of the different

offices/flats/shops/godowns in the said building that possession will

be delivered after full payment; that upon receipt of requisite

permission from the DDA/MCD for the sale of the flat to the buyer,

the defendant shall complete the sale and effect the conveyance of

the flat to the buyer in such manner as may be permissible; that the

buyer upon sale and delivery of possession will be entitled to use and

occupation of the flat without any interference or hindrance but

subject to the terms and conditions of the agreement: that the buyer

shall however have no right of the plots of land or to any portion of

the building other than the office/flat/shop/godown be sold to

it/him/her; that at an appropriate time of which the defendant was to

be the judge, the defendant shall promote a Limited Company,

Cooperative Society or some other Body Corporate of the buyers, to

take over from the defendant the ownership right in the land and the

structure thereon and to take the responsibility for the preservation

and maintenance of the building and for the operation of common

services thereon; that the buyers had agreed and undertaken to be a

member of such Limited Company or Cooperative Society or Body

Corporate to be so formed; that till the transfer to such Body

Corporate or Cooperative Society, the defendant shall have the right

to make additions, raise additional structure as may be permitted,

over the building; the buyer agreed and bound itself to pay to the

defendant or to the proposed Limited Company or Body Corporate or

Cooperative Society his proportionate share of all taxes, Ground

rent, insurance premium, water charges, salaries of persons

appointed by the defendant or by such Body Corporate/Cooperative

Society for the purposes of preservation and maintenance of the

property and for the provision of common services in the property;

that the buyer also agreed to deposit an amount by way of security

and which on the formation of the Body Corporate/Cooperative

Society was to be transferred thereto; the buyer also agreed to

contribute to a fund called the Sinking Fund for replacement of

capital equipment like elevator, pumping sets, electrical cables in the

building form time to time. The agreement also provides for

insurance of the building, maintenance, restrictions on use, etc. but

all of which are not relevant herein. Clause 32 (b) however provides

if the Cooperative Society or Body Corporate is not formed for any

reason whatsoever, then the defendant may transfer and assign the

building to the purchasers of flats/shops/godowns in the said

building with each of them having a share therein in proportion to

the price paid by him/her to the total price of all the

flats/shops/godowns etc.

3. The plaintiffs instituted this suit averring that the

buyers/allottees as well as the occupants had been requesting the

defendant to form the Body Corporate/Cooperative Society aforesaid

and which the defendant had been postponing; accordingly, the

plaintiff no. 1/Association was formed and got registered under the

Societies Registration Act; that the buyers of different

flats/shops/godowns as well as the occupants thereof have a common

interest of safeguarding their rights and interests in respect of

common area and facilities and which are required to be handed

over by the defendant to the plaintiffs. Reliance is also placed on the

provisions of the Delhi Apartments Ownership Act, 1986 to contend

that the defendant was required to transfer the legal title of the

respective flats/shops/godowns in favour of the purchasers thereof. It

is further pleaded that the defendant in spite of being called upon to

do so had failed to hand over the amounts collected by way of

security deposit and in Sinking Fund and by way of insurance and

was required to hand over the same together with the sanctioned

building plans and other documents of the property to the plaintiff

No. 1 Association. It is further averred that the defendant is required

to hand over the maintenance of the building to the plaintiffs.

Though various grievances have been made in the plaint but in the

prayer paragraph of the plaint the reliefs claimed are of (i)

declaration that the plaintiff No. 1 is a body incorporated in terms of

the provisions of the Flat Buyers Agreement aforesaid and is legally

entitled to enforce the same on behalf of its members and (ii) a

decree for accounts and recovery of amounts found due thereon is

claimed against the defendant and (iii) a decree for mandatory

injunction is claimed directing the defendant to perform its

obligations as set out in paragraphs No. 6 to 11 of the plaint and (iv)

a decree for permanent injunction is claimed restraining the

defendant from demanding any money from the members of the

plaintiff on any account whatsoever.

4. On an application of the plaintiff for interim relief vide ex parte

order dated 7th October, 1998 the defendant was restrained from

resuming possession over the flats of the members of the plaintiff

No. 1 Association. The said order appears to be in force till now.

5. The defendant appeared and contested the suit. However, it is

not necessary to go into the details of the defence of the defendant,

the defendant having since been proceeded ex parte. The plaintiffs

filed a replication to the written statement of the defendant and on

the pleadings of the parties, on 22nd May, 2000 the following issues

were framed and which would also give inkling of the defence of the

defendant.

      (i)     Whether the plaintiff No. 1 is not a legally constituted
              Association   as    alleged    by    the   defendant      in    the
              preliminary objections? OPD
      (ii)    Whether the suit has been signed, verified and instituted
              by duly authorized persons? OPP

(iii) Whether the common areas and facilities etc. of the property in question can be transferred in favour of plaintiff No. 1 in terms of Flat Buyers Agreement? OPP

(iv) Whether the claim in suit is premature as alleged in paragraph No. 8 of the written statement? OPP

(v) Whether the plaintiff No. 1 is entitled to Insurance Policies, approved plans and completion certificate alongwith other records in respect of the building in question? OPP

(vi) Whether the defendant No. 1 is liable to hand over the amounts due in Sinking Fund Account alongwith all necessary documents and records pertaining to the same? OPP

(vii) Whether the defendant has been maintaining the property in question as required of it by maintaining the required staff etc? OPP

(viii) Whether the lifts in the property in question are working properly and whether there has been proper arrangement for the upkeep of Electrical, Water and sanitary lines and equipments? OPD

(ix) Whether the plaintiffs are entitled to the various reliefs claimed in the suit?"

6. The defendant was proceeded ex parte on 8th November, 2001.

The plaintiffs filed affidavits by way of examination in chief of their

witnesses. The defendant thereafter applied for setting aside of the

ex parte and the said application of the defendant was allowed on

30th July, 2003 and the defendant was permitted to cross-examine the

witnesses of the plaintiff. The defendant however again failed to

appear and was proceeded against ex parte on 30th September, 2008.

The counsel for the plaintiffs has been heard.

7. It is the pleading of the plaintiffs in the plaint itself that the

plaintiff No. 1 is an Association of the occupants. In response to the

written statement of the defendant, in the replication it is pleaded

that all occupants of the building are members of the plaintiff No. 1

and more than 50% of them are also the owners of the portion of the

building occupied by them. With respect to the plaintiffs No. 2 & 3 it

is clarified that though the plaintiff No. 2 was the President of the

plaintiff No. 1 but it was his wife who was buyer of the flat and in

which the plaintiff No. 2 was carrying on business. Similarly with

respect to the plaintiff No. 3, secretary of the plaintiff No. 1 it was

clarified that he is the Managing Director of the company in

occupation of the flats. The said company was not pleaded to be the

owner/buyer of the flats.

8. The legislature promulgated Delhi Apartment Ownership Act,

1986 to provide for the ownership of an individual apartment in a

Multi-Storeyed Building and of an undivided interest in the common

areas and facilities appurtenant to such apartment and to make such

apartment and interest heritable and transferable and for matters

connected therewith or incidental thereto. Though there was some

controversy as to the applicability/enforcement of the said but this

Court in Sagar Apartments Flat Owners Society (Regd.) vs.

Sequoia Construction Pvt. Ltd. 1993 Rajadhani Law Reporter 446

has held that the said law is in force and rights of the parties created

under the said law have to be taken into consideration and the court

has to ensure that the legislative intent in the said law is fulfilled

rather than allow it to flouted.

9. Section 2 of the Apartment Act provides that the provisions

thereof shall apply to every apartment in a multi-storeyed building

constructed for residential or commercial purposes by any group

housing society or any other person and whether before or after the

commencement of said Act, and on a free hold land or a lease hold

land, if the lease for such land is for a period of thirty years or more.

The Act applies to all buildings which have four or more apartments.

As per the plaintiffs themselves Guru Ram Das Bhawan has more

than four apartments and the documents show the lease of land

underneath the same to be perpetual. Thus the Apartment Act

applies to the said building. The flats/shops/godowns in the said

building in occupation of the members of the plaintiff No. 1 are

covered by the definition of Apartment in Section 3(c) of the said

act. Section 3(e) defines an apartment owner as meaning a person

owing an apartment and an undivided interest in the common areas

and facilities appurtenant to such apartment. Section 3 (f) defines an

Association of apartment owners as meaning of the owners of the

apartments therein. Section 3 (w) defines a promoter as meaning any

authority, person or cooperative society, by which or by whom any

multi-storeyed building has been constructed.

10. Section 4 of the Apartment Act provides that every person to

whom any apartment is allotted, sold or otherwise transferred by the

promoter shall be entitled to the exclusive ownership and possession

of the apartment so allotted, sold or otherwise transferred to him. In

the present case, the defendant having constructed the multi-

storeyed building named Guru Ram Das Bhawan is the promoter and

the persons to whom the defendant had allotted, sold or transferred

the flats/shops/godowns are the owners thereof. Section 4(3)

provides that every person who becomes entitled to ownership and

possession of an apartment shall also be entitled to such percentage

of undivided interest in the common areas and facilities as may be

specified in the Deed of Apartment and such percentage shall be

computed by taking, as a basis, the value of the apartment in relation

to the value of the land underneath the multi-storeyed building and

the structure of the multi-storeyed building and all the fixtures,

fittings, appurtenances thereto. Under Section 4(5) common areas

and facilities which have been defined in Section 3(j) are to vest

collectively in the apparent owners and to remain indivisible.

11. Section 9 of the Act provides for the provisions of the Act to

become applicable inter alia to a lessee of a period of 30 years or

more of any apartment. Section 13 imposes obligation on the

promoter, as the defendant herein is, to execute a deed of apartment

in favour of the apartment owners. Section 15 provides for an

Association of apartment owners for the administration of all the

affairs in relation to the apartments and the property appertaining

thereto and for the management of the common areas and facilities.

Section 24 makes the provisions of the Act effective notwithstanding

anything inconsistent therewith contained in any other law for the

time being in force or any contract, undertaking or other instrument

and all the apartment owners or tenants or any person in use of the

property or any part thereof to which the Act applies shall be subject

to the provisions of the Act.

12. Thus, notwithstanding anything to the contrary contained in

any agreement executed by the defendant at the time of

allotment/sale of any of the offices/flats/shops/godowns, the

provisions of the Act are to remain prevalent.

13. It would thus be seen that the law contemplates an association

of owners of the apartments and not an association of occupants of

the apartments as the plaintiff No. 1 is. The body

corporate/cooperative society contemplated under the agreement

executed by the defendant at the time of agreeing to sell different

offices/flats/shops/godowns to different persons also provides for

owners thereof being members of the same and not for the

occupants being the members. The Division Bench of this Court in

Star Estate Management Pvt. Ltd. vs. Neo Securities Ltd. FAO

(OS) No. 390/1996 decided on 31st October, 1996 has also held, only

association of apartment owners has the right to maintain the

common areas and amenities and facilities in the multi-storeyed

building.

14. Seen in this light, the plaintiffs are not entitled to the

declaration that the plaintiff No. 1 is the body corporate in terms of

the provisions of the agreements aforesaid or is legally entitled to

enforce the same on behalf of its members. Such right under the

agreement as well as under the Apartment Act is of the Association

of apartment owners only. Only some of the members of the plaintiff

No. 1 are the owners. Others are the occupants/lessees. It is not the

case that the said occupants/lessees are lessees for a period of over

30 years so as to be covered by the Act under Section 9 of the Act.

The plaintiff cannot thus be entitled to the first relief claimed.

15. As far as the relief of rendition of accounts and recovery is

concerned, the right to the said relief is again either of an

association of apartment owners or collectively of all the owners of

the apartments. The plaintiffs do not meet the said parameter also.

Consequently, the plaintiffs are not entitled to that relief also.

16. The plaintiffs have also claimed enforcement of obligations

pleaded in paras 6 to 11 of the plaint. In para 6 of the plaint

grievance is made of the defendant having not transferred legal title

to the respective flats in favour of the various owners of the flats.

The right to have the deed of apartment executed in terms of the

Apartment Act or to have a sale deed executed/registered is of the

individual owners. The Deed of Apartment or the Sale Deed of an

individual flat is not to be executed in favour of the plaintiff No. 1

Association/Society. Thus the plaintiffs are not found entitled to be

having a locus to sue for the same relief.

17. Para 7 of the plaint deals with the obligation of the defendant

to transfer the common areas and facilities. The agreement was for

transfer thereof to a body corporate/cooperative society of all the

apartment owners. The plaintiff No. 1 is not such a body or society.

Even though the agreement provides for the defendant to constitute

such a body corporate/cooperative society but had all the apartment

owners themselves constituted such body corporate or society, they

would still have been entitled to the relief. However, the relief

cannot be granted to an association of the occupants and of which

only some of the members are the owners. In fact, under the Act,

upon such association of apartment owners being constituted, no

formal transfer of common areas and facilities by the defendant to

such association is required inasmuch as under the law the common

areas and facilities vest in such association.

18. The grievance in para 8 of the plaint is that after the formation

of the plaintiff No. 1 the defendant is not entitled to receive any

payment on account of common service charges. It is further pleaded

that the defendant is required to hand over the amount received by

way of security deposit to the plaintiff No. 1. Para 9 deals with the

amount collected towards insurance and para 10 deals with the

sanctioned plans and other documents pertaining to the property. As

far as the entitlement of the defendant to recover the charges is

concerned, I find that the defendant has no right to claim such

payments or to enforce the same from the apartment owners. This

court in Dhawan Deep Residents Welfare Asso. (Regd.) vs. M/s.

Star Estate Management Ltd. IA No. 8319/2006 in CS(OS) No.

1474/2006 decided on 20th September, 2007 has inter alia held that

the owners/residents of a multi-storeyed building have a right of

maintenance of common areas and amenities and the

builder/promoter or its agency cannot forcibly recover maintenance

charges. Thus even though all the owners are not before this Court

and the plaintiff No. 1 is not an association of all the owners but the

plaintiffs are found entitled to the relief of restraining the defendant

form recovering any monies on account of common charges or

maintenance charges or any other charges with respect to the

building from any apartment owner/occupant/lessee of any

apartment not willing to pay the same to the defendant. However the

association of occupants having no right to the amounts collected by

way of security deposit, insurance monies or the sanctioned plans of

the building and the right thereto being of an association of

apartment owners only the plaintiffs are not found entitled to that

relief.

19. Para 11 of the plaint deals with the obligation of the defendant

to hand over the maintenance of the building to the plaintiff No. 1.

However as aforesaid under the agreement as well as under the law

the right of the maintenance is of the association of apartment

owners and which is not before the Court. The plaintiffs thus are not

entitled to the said relief also.

20. Having held so, I may express that though this court in the

judgments aforesaid as well as in several other judgments viz.

Ganesh Prasad Seth vs. Karam Chand Thapar 1998 (IV) AD

Delhi 657, Om prakash Charaya vs. Ashok Kamal Capital

Builders Pvt. Ltd. 2000 (VII) AD Delhi 67, Municipal Corporation

of Delhi vs. A.M. Khanwilkar 2002 (65) DRJ 38 and R.L.

Bhardwaj vs. Shivalik Cooperative Group Housing Society Ltd.

56 (1994) DLT 600 has been attempting, while faced with

applications for interim relief, to give effect to the provisions of the

Apartments Act but in practice, the Apartment Act has failed to fulfill

the purpose for which it was enacted. Though changes/amendments

to the said Act have been heard to be under consideration for long

but nothing has happened in the last over 22 years. Though the

Government takes a stand that there is no impediment to the

registration of Deeds of Apartments but in practice it is found that

the Registrar of Assurances refuses to register documents of transfer

of individual flats constructed over the leasehold lands. There

appears to be no clear directions by the perpetual lessors of the land

viz. DDA, MCD for registration of deeds of individual

flats/apartments with proportionate rights in the land. All this has

reduced the apartments which are valuable immovable property to

be not having any mortgageable title and has encouraged the

Builders/Promoters to illegally collect transfer charges whenever an

apartment is bought and sold and at the loss of stamp duty payable

to the Government.

21. In most of the buildings, the owners are not the occupants. As

per normal terms of letting of the apartments, it is the tenant who is

responsible for payments of maintenance charges. The owner being

not in use/occupation of the apartments is not concerned with the

standard/quality of maintenance provided. He is only concerned with

his rent. The tenant thus though paying the maintenance charges on

behalf of the owners under agreement from the owners is left at the

vagaries of the builder and as found in this case, not entitled to

enforce rights against the builders, owing to the association

contemplated under the Act being of the owners. The builders of

multi-storeyed building are found to continue managing the common

areas and services and earning profits therefrom and which under

the agreement and under the law they are not entitled to. All this is

to the prejudice of the occupants of the apartments. The legislature

needs to consider providing for the association of the occupants to

carry on the maintenance of common areas and amenities in the

building since it is they who are vitally concerned therewith.

However, till the legislature makes such provision, it is essential for

the tenants of such apartments to at the time of entering into lease

also obtain authorization in their favour from the owners of the

apartment to deal with the builder in relation to the rights of the

owners of maintenance of common areas and amenities and/or to

represent the owner in the association of the apartment owners

during the term of their lease/occupation of the flats.

22. Thus though while disallowing most of the reliefs claimed in

the suit, I do the same with a heavy heart being fully aware of the

difficulties being faced of the members of the plaintiff No. 1.

However there being no remedy in law, my hands are constrained.

23. The suit of the plaintiffs is thus decreed only for the relief of

injuncting the defendant from recovering the charges towards

maintenance of any common areas or amenities/facilities in the

building known as Guru Ram Das Bhawan at Plots No. A3 & A4,

Community Centre, Ranjit Nagar, New Delhi from any of the

occupants thereof who are not willing to pay the same. The suit for

the remaining reliefs is dismissed.

24. In the facts of the case, the parties are left to bear their own

costs. Decree sheet be drawn up.

RAJIV SAHAI ENDLAW (JUDGE) May 28, 2009 rb