Dipakbhai Manubhai Shah vs Arnath Co-Operative Housing ...
2021 Latest Caselaw 16213 Guj

    C/SCA/12958/2021                               ORDER DATED: 14/10/2021




           IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

            R/SPECIAL CIVIL APPLICATION NO. 12958 of 2021

                                With
            R/SPECIAL CIVIL APPLICATION NO. 12959 of 2021
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                DIPAKBHAI MANUBHAI SHAH
                         Versus
   ARNATH CO-OPERATIVE HOUSING SOCIETY LIMITED THROUGH
                  CHAIRMAN/SECRETARY
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Appearance:
MR DIPEN DESAI(2481) for the Petitioner(s) No. 1,2,3,4,5,6
for the Respondent(s) No. 3,4
DS AFF.NOT FILED (N)(11) for the Respondent(s) No. 2
MR BHARAT T RAO(697) for the Respondent(s) No. 1
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 CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA

                             Date : 14/10/2021

                              ORAL ORDER

1.Heard learned advocate Mr. Dipen Desai for the petitioners and learned advocate Mr. Bharat T. Rao for respondent no.1.

2.By these petitions under Articles 226 and 227 of the Constitution of India, the petitioners of both the petitions have prayed for quashing and setting aside the common order dated 26th August, 2021 passed by the Gujarat State Co-Operative Tribunal, Ahmedabad (For short "the Tribunal") in Revision Application No. 42 of 2020 and Revision Application No. 44 of 2020.

3.Facts of both the petitions are identical and

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therefore, the same were heard together and are being disposed of by this common order.

4.The petitioners are the flat owners of Arnath Co-operative Housing Society Limited (here- in-after referred to as "respondent no.1- society") which is registered on 4th May, 1978 having registration no.7024 under the provisions of Gujarat Cooperative Societies Act, 1961 (For short "the Act, 1961").

5.Respondent no.1 society after getting the plans approved in the year 1984, constructed 96 flats by the name of "Bhavna Flats" consisting of eight blocks, each block having ground floor, first floor and second floor and each flat having measurement of 78 sq. yards.

6.Respondent no.1 society passed resolution for redevelopment on 18th April, 2018 in its Managing Committee meeting when petitioner no.1 of Special Civil Application No.12959/2021 was chairman of respondent no.1-society. Thereafter in the Annual General Meeting held on 3rd June, 2018, Redevelopment Committee was constituted wherein Indravadanbhai Choksi who is petitioner no.4 of Special Civil Application No. 12958/2021 was one of the members of the Redevelopment Committee.

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7.The joint meeting of Executive Committee and Development Committee was called on 21 st April, 2019 wherein it was decided by majority of members to go for redevelopment and work for redevelopment should be assigned to respondent no.2-Suryam Developers.

8.Meanwhile, the Ahmedabad Municipal Corporation issued notice dated 9th September, 2019 under section 264 of the Gujarat Provincial Municipal Corporation Act, 1949 upon respondent no.1-society as some of the flats of respondent no.1-society were required to be repaired/strengthened as they were in dilapidated condition.

9.It appears that when the resolution was finalised by respondent no.1 society in the Annual General Meeting, discussion took place and occupiers of 16 ground floor flats who were having additional land since 1984 -1985 requested that they should be given bigger size of flats because they have purchased additional land by paying more amount in the year 1986. Accordingly, the issue was discussed and deliberated in presence of the petitioners and by passing a resolution with 3/4th majority in Extraordinary General meeting held on 26th January, 2020, it was decided to approve redevelopment proposal of

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respondent no.2 and also to allot 4 BHK flats to the members of ground floor flats.

10. Respondent no.1- society thereafter entered into development agreement with respondent no.2-Suryam Developers on 24th February, 2020 which was signed by the Redevelopment Committee of the respondent no.1-society. The respondent no.1 society agreed for redevelopment to be executed between respondent no.1 and respondent no.2. MOU was also executed between developer society and individual members.

11. However, the petitioners did not give their consent for redevelopment agreement as per the development agreement. As per the agreement, out of 96 members, 80 members are given flats of three Bed-room, Hall, Kitchen (3 BHK) of 104 sq. yards whereas 16 members are proposed to be given 4 BHK flats of 123 sq. yards though all the members enjoy equal rights and equally subscribe to the share capital of the society.

12. The petitioners therefore, raised their objections for allotment of 4 BHK flats to 16 members. The petitioners filed Lavad Suit No.165 of 2020 before the Board of Nominees, Ahmedabad challenging the redevelopment scheme and the agreement prepared by

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respondent no.1 and 2 along with an application for interim injunction.

13. The Board of Nominees by order dated 2nd March, 2020 issued notice and granted interim order directing the respondents to maintain the status-quo.

14. Respondent nos.1 and 2 therefore being aggrieved by the order of status-quo preferred Special Civil Application No.6391/2020 before this Court which was disposed of vide order dated 21st September, 2020 by directing the Board of Nominees to decide the application below Exh.6 expeditiously within a period of four weeks from the date of receipt of order.

15. The Board of Nominees therefore, after considering the application Exh.6 along with reply filed on behalf of respondent no.1 by order dated 9th October, 2020 allowed the application of interim injunction filed by the petitioners.

16. Respondent no.1 therefore, preferred Revision Application No.42/2020, whereas respondent no.2 preferred Revision Application No. 44/2020 before the Tribunal.

17. The Tribunal by the impugned order

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dated 26th August, 2021 allowed the revision applications preferred by the respondent nos.1 and 2 and set aside the order passed by the Board of Nominees dated 9th October, 2020. The Tribunal also extended the order granted by the Board of Nominees upto 9th September, 2021.

18. This Court after issuance of notice passed the following order on 29th September, 2021 :

"1. Heard learned advocate Mr. Dipen Desai for the petitioners and learned advocate Mr. Bharat T. Rao for respondent No.1-Society.

2. Learned advocate Mr. Dipen Desai for the petitioners submitted that the petitioners are discriminated vis-a-vis the flat owners occupying ground floor flats for whom it is agreed by the majority of the flat owners of the society to allot one more bedroom than the bedrooms which are allotted to other members who are not residing on the ground floor. It was submitted that the petitioners have a very good prima facie case as the Memorandum of Understanding ['MOU' for short]for redevelopment of respondent No.1-Society with respondent No.2-developer is contrary to the provisions of the Flat Owners Act,1973 as well as the Gujarat Ownership Flats Act, 1973 as well as the basic concept of co-operation in a co-operative society where all members are holding equal proportionate share in the land of the society. It was submitted that the petitioners have therefore, raised a genuine grievance with regard to terms of

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the MOU which has been ventilated in the Lavad Suit filed by the petitioners and Board of Nominees has rightly stayed the operation of MOU which is now lifted by the impugned order passed by the Tribunal only on the ground that the Board of Nominees has no jurisdiction to consider the Lavad Suit filed by the petitioners.

3. It was also pointed out that the persons living on the first floor and above have also constructed extra space by paying amount to the society and as such, the flat owners living on the ground floor cannot claim any extra benefit of occupying more space on the ground floor so as to claim one more extra bedroom in the proposed allotment of flat.

4. It was therefore, pointed out that in such circumstances, there is strong prima facie case in favour of the petitioners as well as the balance of convenience would also lie in favour of the petitioners and if the petitioners are ousted from their own flats which they are occupying since last 30 years, they would be rendered homeless.

5. It was also submitted that in the MOU executed by the society and the builder, there is no guarantee provided by the builder with regard to completion of the project. It was pointed out that it is an experience of the petitioners that in case of such MOU, after sometime builders would stop making payment of rent and the petitioners therefore would be rendered without any remedy.

6. On the other hand, learned advocate Mr. Rao submitted that the respondent No.1-society has entered in to the MOU for re-development with respondent No.2 as out of 96, 88 members are in favour of re-development but, due to the grievances

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raised by the petitioners re-development of the society is hampered.

7. It was submitted that respondent No.1- society as well as respondent No.2 undertake to file detailed report certified by Chartered Accountant showing net worth of respondent No.2 which has entered into the MOU with the society so as to satisfy the conscious of the petitioners that respondent no.2 would abide by the terms and conditions of the MOU.

8. It was also submitted by learned advocate Mr. Rao that respondent No.1 and 2 shall also file an undertaking before this Court to abide by the terms and conditions of the MOU.

9. With regard to apprehension canvassed by the learned advocate Mr. Desai on behalf of the petitioners that the petitioners would be rendered homeless, it was submitted by learned advocate Mr. Rao that sufficient care would be taken of by the respondent Nos.1 and 2 to see that no inconvenience is caused to the members of the society and they would be accommodated in appropriate space of their choice and as per the terms of the MOU.

20. Considering the above statements, let detailed report certified by a Chartered Accountant be filed with regard to net worth of the respondent No.2-M/s. Suryam Developers who has entered into MOU with respondent No.1-society for re- development to show that respondent No.2 is capable of completing the project within stipulated time as per the terms of the MOU.

Stand over to 7th October, 2021."

19. Pursuant to the aforesaid order,

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respondent no.2 has filed the report of the Chartered Accountant along with affidavit- cum-undertaking. The total net-worth of the proprietor of respondent no.2 M/s. Ghanshyambhai M. Patel is shown to be Rs.61,91,95,106/-.

20. Respondent no.1 society has also filed affidavit-cum-undertaking through its chairman Kamleshbhai C. Shah in compliance of the order dated 29th September, 2021. Affidavit-cum-undertaking filed on behalf of respondent no.1 stipulates that respondent no.1 society has undertaken to abide by and fulfill all the terms and conditions of the agreement as well as the obligations of the society which are stated in the agreement. It was also stated in the affidavit-cum- undertaking that 88 members out of 96 members have entered into tripartite agreement (MOU) executed between respondent no.1 society, individual member and respondent no.2 M/s. Suryam Developers. Similarly, respondent no.2 has also stated in the affidavit-cum- undertaking that respondent no.2 will handover 96 newly constructed flats to the society as per the terms and conditions of the Redevelopment Agreement and MOU.

21. Learned advocate Mr. Dipen Desai submitted that the petitioners are

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discriminated against 16 flat owners occupying the ground floor flats, as such ground floor flat owners were allotted 4 BHK flats whereas rest of the members of respondent no.1 society are allotted 3 BHK flats.

21.1) It was submitted that such redevelopment agreement between respondent nos.1 and 2 is contrary to the provisions of the Gujarat Ownership Flats Act, 1973 (For short "the Act, 1973") and the basic concept of cooperation as all the members are holding equal proportionate share in the land of the society and when all the members were allotted flat admeasuring 78 sq. yards by respondent no.1 society, no discrimination could have been made in Redevelopment Agreement by allotting 4 BHK flats to 16 members occupying the ground floor flats. It was submitted that other members have also incurred expenditure by making construction of extension with the permission of respondent no.1 society and at-least those who have made extension in their flats should be considered at par with the 16 members of respondent no.1 society to whom 4 BHK flats is to be given in the proposed redevelopment. It was therefore, submitted that the Board of Nominees has rightly granted the injunction in favour of the petitioners.

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21.2) It was submitted that the Tribunal has committed an error by allowing the Revision Applications filed by respondent nos.1 and 2 only on the ground that the issue of redevelopment cannot be considered by the Board of Nominees as such issue is within the purview of the Act, 1973. It was submitted that the Tribunal has failed to consider the submission made on behalf of the petitioners to the effect that there was prima facie case in favour of the petitioners because if the redevelopment permission is granted to respondent no.1 and 2, Lavad Suit filed by the petitioners would become infructuous. It was submitted that the Board of Nominees has jurisdiction to decide the disputes between the members of the cooperative society under section 96 of the Act, 1961.

21.3) It was pointed out that 16 members of the ground floor flats have made illegal construction and therefore, they cannot be allotted bigger flats as many other members of respondent no.1-society have constructed extension of their flats without any sanction from the competent authority and therefore, the Board of Nominees has rightly granted injunction in favour of the petitioners.

21.4) It was also pointed out by learned

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advocate Mr. Desai in the rejoinder affidavit filed on behalf of the petitioners that brochure relied upon by respondent no.1 for allotment of 4 BHK flats to ground floor flat owners cannot be construed as an agreement by the society or builder in favour of the member selling or giving the right to use additional space.

21.5) It was also pointed out that agreement produced at Annexure-R3 with the affidavit-in-reply is an unsigned agreement and the documents produced along with the affidavit-in-reply by respondent no.1 to justify the allotment of 4 BHK flats to ground floor flat owners are also not relevant because 30 to 40 members of respondent no.1 society have made additional construction and are occupying larger area than what was allotted but such members are not entitled to 4 BHK flats and selecting only 16 members is discriminatory. It was therefore, submitted that balance of convenience is also in favour of the petitioners to grant injunction. Reliance was also placed on the photographs showing extension of the flats of members who are staying on first and second floor.

21.6) Learned advocate Mr. Desai therefore, submitted that till the Board of

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Nominees decides the Lavad Suit, the respondents are required to be restrained from implementing the redevelopment agreement.

21.7) Learned advocate Mr. Desai has relied upon the decision of this Court in case of New Meghdoot Cooperative Hosg Society Ltd v. Manubhai Amabalal Patel and others (judgment dated 12th November, 2013 rendered in Special Civil Application No. 6824/2002) to submit that the members of the cooperative society have undivided share in the land owned by the cooperative society which is meant for enjoyment of every member. It was therefore, submitted that respondent no.1 society could not have agreed to allot 4 BHK flats only to 16 members of ground floor flats as the petitioners have also undivided share in the land of the society.

21.8) Learned advocate Mr. Desai also relied upon the decision of this Court in case of Vrajmoti Corporation v. Ambawadi Apartments Owners Association & Ors. reported in 2012 (2) GLH 654 to submit that as per the provisions of sections 17, 18 and 21 of the Act, 1973 any agreement contrary or inconsistent to such provisions is against the public policy. It was submitted that all the members of respondent no.1 society have

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right of enjoyment of common amenities and facilities like staircase, parking, compound, etc. and other facilities and nobody can claim as a matter of right any exclusive right thereof and therefore, 16 ground floor flat owners cannot claim right of exclusive use of the additional land of the society in any manner.

22. On the other hand, learned advocate Mr. B.T Rao appearing for respondent nos. 1 and 2 submitted that the Tribunal has rightly allowed the revision applications considering the provisions of the Act, 1973 and Gujarat Ownership Flat Rules, 1974 (For short "the Rules, 1974") and more particularly, the provisions of section 41A of the Act, 1973 which pertains to redevelopment.

22.1) It was submitted that the Tribunal has considered the aspect that the majority members of respondent no.1 society are in favour of redevelopment and therefore, injunction as prayed for by the petitioners cannot be granted which would result in delaying the process of redevelopment. It was submitted that as directed by this Court, respondent nos. 1 and 2 have filed affidavit- cum-undertaking to abide by the terms and conditions of the Redevelopment Agreement and therefore, the petitioners should not have

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any grievance for redevelopment of the respondent no.1-society.

22.2) It was further submitted that as per the agreement entered into between respondent no.1 and 2, all the members of respondent no.1 society are the beneficiaries of the agreement inasmuch as all the members are being allotted newly constructed flats. It was pointed out that ground floor flat owners have paid more money at the time of allotment in the year 1986 for additional space which was allotted to them by the builder at the relevant point of time and therefore, majority decision is taken by the members of respondent no.1 society to allot 4 BHK flats to 16 members of ground floor flats in the Redevelopment Agreement. It was therefore, submitted that the petitioners cannot make any grievance on the ground of allotment of 4 BHK flats to 16 members of ground floor flats.

22.3) Learned advocate Mr. Rao pointed out that respondent no.2 is having enough net- worth as is certified by the Chartered Accountant in the certificate filed pursuant to the order passed by this Court on 29th September, 2021 and accordingly, the members of respondent no.1 society need not have any fear of delay in the redevelopment project to

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be executed by respondent no.2.

23. Having heard the learned advocates for the respective parties and having gone through the materials on record, it appears that majority members of respondent no.1 society have agreed for redevelopment as per the provisions of section 41A of the Act, 1973 which reads as under :

"41A. Redevelopment of flats and apartments - Notwithstanding anything contained in this Act, any work in relation to the re-development of a building can be carried out on such terms and conditions as may be prescribed, after obtaining the consent of not less than 75 per cent of the flat owners of such building:

Provided that, in respect of such building,-

(i) a period of twenty-five years must have been completed, from the date of issuance of permission for redevelopment by the concerned Authority;

(ii) the concerned Authority has declared that such building is in ruinous condition, or likely to fall, or in any way dangerous to any person occupying, resorting to or passing by such structure or any other structure or place in the neighbourhood thereof.

Explanation- For the purpose of this section, the expression "redevelopment " shall have the meaning as assigned to it in relevant Development Control Regulations."

24. Considering the above provisions, when

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the majority members of respondent no.1 society have agreed for the terms and conditions of the development agreement executed between respondent no.1 and 2 and when individual MOU are also executed by 88 members out of the 96 members of the respondent no.1 society, the petitioners cannot make any grievance with regard to the redevelopment of respondent no.1 society.

25. The affidavit-cum-undertaking filed on behalf of the respondent no.1 and 2 pursuant to the order passed by this Court on 29 th September, 2021 clearly stipulates that the respondent nos.1 and 2 are bound to carry out the redevelopment project as per the agreed terms and conditions of the Redevelopment Agreement. In such circumstances, the petitioners cannot have any grievance at this stage to continue with the redevelopment project.

26. The Lavad Suit filed by the petitioners before the Board of Nominees with regard to their grievance of not giving 4 BHK flats or having discriminatory treatment can be considered at the time of hearing of the suit subject to leading of oral and documentary evidence by both the sides.

27. In view of above, there is a prima facie

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case in favour of respondent no. 1 and 2 as majority members of respondent no.1 society are in favour of redevelopment project. The balance of convenience is also in favour of the members of respondent no.1 society who are waiting for allotment of newly constructed flats by respondent no.2 which has been delayed because of the proceedings initiated by the petitioners. Irreparable loss shall also be caused to the members of respondent no.1 society in view of delay caused by the litigation initiated by the petitioners inasmuch as the cost of project would increase and it is better for the members of respondent no.1 society that redevelopment project proceeds as expeditiously as possible. The reliefs claimed by the petitioners in Exh.6 application are in the nature of final reliefs which could not have been granted by the Board of Nominees at the interim stage.

28. The Tribunal therefore, has rightly allowed both the revision applications filed by respondent no.1 and 2 by setting aside the order passed by the Board of Nominees below Exh.6 in Lavad Suit No.165 of 2020.

29. Insofar as reliance placed on the decision of this Court in case of New Meghdoot Cooperative Hosg Society Ltd

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(supra), facts are different inasmuch as the issue in the said case was of the use of the common plot of the society whereas in the facts of the case, additional land used by the ground floor flat owners is allotted from the very beginning on payment of additional cost.

30. Similarly in decision in case of Vrajmoti Corporation(supra), this Court was considering the use of common facilities and amenities like compound, staircase and other facilities including terrace in common whereas in the facts of the present case, land which is used by the ground floor flat owners are exclusively in their possession, and prima facie, allotted to them which is the subject matter of further proof before the Board of Nominees. The Board of Nominees is to consider such allotment at the time of final hearing of Lavad Suit.

31. In view of the foregoing reasons, the petitions fail and are accordingly dismissed. Notice is discharged in respective petitions. No order as to costs.

(BHARGAV D. KARIA, J) RAGHUNATH R NAIR