Delhi High Court

Sadbhawna Cooperative Group ... vs Salil Agarwal on 5 October, 2016

$~39.
*       IN THE HIGH COURT OF DELHI AT NEW DELHI
+                WRIT PETITION (CIVIL) NO. 9185/2016
                                          Date of decision: 5th October, 2016
        SADBHAWNA COOPERATIVE GROUP HOUSING SOCIETY
        LTD.                                              ..... Petitioner
                           Through Mr. Ankur Arora, Advocate.

                           versus

        SALIL AGARWAL                                    ..... Respondent

Through Nemo.

CORAM:

HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MS. JUSTICE SUNITA GUPTA

SANJIV KHANNA, J. (ORAL):

This writ petition arises from the second round of litigation between

the Sadbhawna Cooperative Group Housing Society Limited and the

respondent Salil Agarwal.

2. In the first litigation, vide the award dated 26th March, 2007 it was

held that Salil Agarwal being a valid member of the Cooperative Society

was entitled to allotment of a category-A flat. Salil Agarwal was required

to pay the dues on reconciliation of accounts with the Cooperative Society,

within a period of thirty days from the date of the award. The Cooperative

Society was also directed to pay costs of Rs.15,000/-.

3. Aggrieved, the Cooperative Society had filed an appeal before the

Delhi Cooperative Tribunal, which was dismissed vide the order dated 11th

April, 2008. Writ Petition (C) No. 5265/2008 challenging these orders was

dismissed by the Division Bench of this Court on 25th August, 2009.

Special Leave to Appeal (C) No. CC 18472/2010, filed by the Cooperative

Society, was dismissed on 10th December, 2010. Thus, the first round of

litigation ended. Salil Agarwal was successful.

4. Salil Agarwal thereafter had to initiate the second round of litigation

as the Cooperative Society raised a demand of Rs. 57,13,523/-. Further, the

Cooperative Society had offered to allot a category-C flat measuring 1700

square feet, instead of a higher category-A flat.

5. The Arbitrator, vide the impugned award dated 2nd September, 2013,

considered the vagaries of the factual matrix. The award elucidates that

initially category A, B and C flats measuring 1408, 1508 and 1166 square

feet respectively were to be constructed. However, the plans underwent

three modifications and changes in 1998, 2003 and 2010. The changes

were summarised in the award. The relevant portion of the award reads as

under:-

Type/size in A                B            C           A1           D
sq ft
1997       at 1408            1508         1166        nil          nil
booking time
1998 change 1643              1693         1579        nil          nil
plan
2003       1st 2145           1930         1700        2215         nil
Administrator



 2010-revised         2145       1930        1700         2215            1600
plan
                                                                                       "

6. The award also records that the respondent had initially applied for a

category-B flat in 1997, but was allotted category-A type flat in 1998

which he accepted. The Arbitrator‟s award dated 26th March, 2007 in the

first round, while referring to the category-A flat mentions the area as 1643

square feet, i.e. the area of category-A flats as in the drawing plan of 1998.

7. Learned counsel for the petitioner submits that Salil Agarwal was

entitled to a flat measuring 1643 square feet in accordance with the award

dated 26th March, 2007. The category-C flats, as constructed, measure

1700 square feet and the category-A flats measure 2145 square feet. Thus,

the Arbitrator and the Tribunal have erred in holding that Salil Agarwal

would be entitled to a category-A flat measuring 2145 square feet and not a

category-C flat measuring 1700 square feet.

8. We have considered the said contention, but do not agree with the

submissions made by the Cooperative Society. The award dealt with the

said submission and records as under:-

" Availability of above flats was altered by the defendants within two weeks on 31.08.2013 hearing (sic) dramatically to only two flats, one each in A1 and C category. This development negated claimant‟s allotment to category „A‟ flat. The argument posed by the defendant to go for category „C‟ flat-1700 sft in size on the ground that it is bigger than the original allotment of category „A‟ sized 1643 sft, , did not hold water. The benefit of revisions in

size of various categories of flats will apply to claimant as well as also to other members. The defendant Society having failed to abide by the various courts‟ directions, now played truant by suggesting to go in for category „C‟ type just on the ground of it‟s size was mischievous. The defendant society was legally bound to reserve a category „A‟ flat which it failed to do compromising on the interest of the claimant.

Thus now under these circumstances it is left to the claimant to exercise his choice from among the options made available. During the hearing of 31.08.2013 the claimant opted for A1 type sized 2215 sq. ft against his entitlement of „A‟ category sized 2145 sq. ft as allotted by the defendant society itself. The Claimant also committed to pay the charges that will be genuinely due from him, for Type A1 flat. The charges committed to be borne by him shall be equivalent to members of his seniority."

9. The award dated 2nd September, 2013 notices that during the course

of arbitration proceedings, on 17th August, 2013, the Cooperative Society

had stated that 2 category-A1, 3 category-A and 4 category-C flats were

available. The award further records that on 31 st August, 2013 the

Cooperative Society had stated that there were only two flats; one each in

category-A1 and category-C. In the aforesaid, a change in stance was

adversely commented. It is reiterated before us that no category-A flat is

available and one flat each in category-A1 and C are vacant and available.

10. This finding of the Arbitrator has been upheld in the appellate order

dated 3rd June, 2016 passed by the Delhi Cooperative Tribunal. The

appellate order holds that the Arbitrator was right in accepting the claim of

Salil Agarwal for the size of flats was increased between 1997 and 2010.

Salil Agarwal having applied for a category-A flat, was entitled a flat

admeasuring 2145 square feet, the revised area of a category-A flat. The

Tribunal affirmatively holds that it was not the case of the Cooperative

Society that the members of the Cooperative Society were asked to

exercise a fresh option with regard to their category of preference on the

change of area of the category-A flats. No such argument was raised.

Once the Cooperative Society was not in a position to hand over a

category-A flat, then the option had to be given to Salil Agarwal to

exercise and choose a vacant flat from those available. The reasoning

given by the Arbitrator and the Tribunal that the size of the category-A

flats was increased from 1643 square feet to 2145 square feet, and upon the

non-availability of a category-A flat, the respondent would be entitled to a

category-A1 flat, has merit and substance. We cannot reject or reverse the

said reasoning, when we examine and consider the award and the order of

the tribunal in exercise of the power of judicial review under Article 226

and 227 of the Constitution.

11. The other grievance raised by the petitioner-Cooperative Society

relates to payment of interest. The enrolment of Salil Agarwal as a

member was wrongly cancelled. Salil Agarwal had successfully

challenged this cancellation and the membership was treated as legal and

valid vide the award dated 26th March, 2007. His membership and

entitlement was upheld by the Tribunal, the High Court and then when the

SLP was dismissed. In the said situation, equities had to be balanced on

the question of payment of interest. The award dated 2 nd September, 2013

has undertaken the said balancing exercise. The finding of the Arbitrator is

that Salil Agarwal had in 1997-98 paid Rs.3,40,780/- to the Cooperative

Society. Thereafter, the Cooperative Society failed and did not raise any

further demand from 1998 till 7th May, 2012. Thus, Salil Agarwal inspite

of the payment which was not refunded, was denied allotment and

possession of the flat.

12. In these circumstances, the Arbitrator has rightly held that the

respondent would not be liable to pay any penal interest, etc. as a notified

defaulter.

13. On the question of the demand raised vide the letter dated 7th May,

2012 we have examined the basis and computation of Rs. 54,13,523/- made

by the Cooperative Society. Salil Agarwal was asked to pay interest of

Rs.23,25,656/- over and above the cost of the land and construction of

Rs.25,87,867/-. Equalisation charges of Rs.5 lacs were also demanded.

Thus, making a total sum of Rs.54,13,523/-. Referring to the said aspect,

the Arbitrator held as under:-

"Since the last/latest demand notice dated 7.5.2012 was not transparent with regard to the category/size of the flat for which the demand was raised, it is improper to seek penal interest etc. as dues between period 1998 till 31.08.2013 as put up during hearing

of 31.08.2013.

I therefore hold that the claimants liability is limited to interest payable subsequent to notice dated 7.5.2012 and that too limited to the construction costs payable by him as applicable to any other regular not having defaulted member of his seniority.

Without any prejudice to the claim of interest on the construction/any other enhanced cost as also borne by other honourable members of this CGHS, of similar seniority as that of the Claimant, the claimant is bound to pay such dues as raised by the Society but in a transparent manner."

14. Apropos, the equalisation charge and if it could be levied and

charged, the Arbitrator has held that the membership of Salil Agarwal had

continued uninterrupted in terms of the earlier award, and therefore he

would not be liable to pay equalisation charges. To this extent, the finding

has not been disputed by the petitioner-Cooperative Society. Indeed the

finding cannot be disputed and the demand made was unjustified.

15. The Arbitrator has taken a reasonable view on the question of

interest. The Arbitrator has held that Salil Aggarwal would be liable to pay

interest subsequent to the notice dated 7th May, 2012 and that would be

limited to the construction cost payable by him as was or would be

applicable to any other regular and non-defaulting member of the society.

The Tribunal in the impugned order has observed that it was a legal