Gujarat High Court
Sunvalley Cooperative Housing Society ... vs Ahmedabad Municipal Corporation on 15 February, 2024
Author: Vaibhavi D. Nanavati
Bench: Vaibhavi D. Nanavati
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 7709 of 2022
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy
of the judgment ?
4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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SUNVALLEY COOPERATIVE HOUSING SOCIETY LTD. THROUGH
CHAIRMAN AMRISHBHAI KANUBHAI PATEL
Versus
AHMEDABAD MUNICIPAL CORPORATION
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Appearance:
MS AMRITA M THAKORE(3208) for the Petitioner(s) No. 1,2,3
DHRUVIK K PATEL(7769) for the Respondent(s) No. 5
MR DEEP D VYAS(3869) for the Respondent(s) No. 1,2,3
MR P A MEHD(3489) for the Respondent(s) No. 4
MR RUTVIJ S OZA(5594) for the Respondent(s) No. 6
MR UMANG R VYAS(5595) for the Respondent(s) No. 6
SERVED BY RPAD (R) for the Respondent(s) No. 7,8
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CORAM:HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
Date : 15/02/2024
ORAL JUDGMENT
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1. By way of present petition under Article 226 of the
Constitution of India, the petitioners herein have prayed for the
following reliefs:
"7. In the aforesaid premises, the petitioners pray as under:
A. This Hon'ble Court may be pleased to issue a writ of mandamus or a
writ in the nature of mandamus or any other appropriate writ, order or
direction:
7A(1). This Hon'ble Court be pleased to issue a writ of or in the nature
of mandamus or any other appropriate writ, order or direction directing
the respondent nos. 5 to 8 to vacate their respective flats in the
petitioner no. 1 society and hand over the peaceful and vacant
possession thereof for the purpose of redevelopment as per Section
41A of the Gujarat Ownership Flats Act, 1973 and to cooperate in the
redevelopment of the petitioner no. 1 society and to not create
hindrances or obstructions to the same whatsoever.
7A(2). Pending the admission, hearing and final disposal of the present
petition, this Hon'ble Court be pleased to direct the respondent nos. 5
to 8 to vacate their respective flats in the petitioner no. 1 society and
hand over the peaceful and vacant possession thereof for the purpose
of redevelopment as per Section 41A of the Gujarat Ownership Flats
Act, 1973 and to cooperate in the redevelopment of the petitioner no.
1 society and to not create hindrances or obstructions to the same
whatsoever.
(i) Holding and declaring that the action of the respondent authorities
of directing the petitioner no. 1 society and its members to repair and
secure the dilapidated, dangerous and ruinous structures of the
petitioner no. 1 society instead of taking appropriate steps to have
these dangerous structures vacated/evicted and demolished, is
without any application of mind, unconstitutional, unreasonable,
irrational, unjustified, and amounts to a refusal to perform their duty
under the provisions of the Gujarat Provisional Municipal Corporations
Act, 1949 and is in clear disregard and contravention of the provisions
of the Gujarat Ownership Flats Act, 1973.
(ii) Quashing and setting aside the notice dated 30.9.2021 issued by
the respondent authorities to the extent that it seeks to direct the
petitioner no. 1 society and its members to repair and secure the
dilapidated, dangerous and ruinous structures of the petitioner no. 1
society instead of taking appropriate steps to have these dangerous
structures vacated/evicted and demolished.
(iii) Directing the respondent authorities to take appropriate steps for
vacating/evicting and demolishing the dangerous and dilapidated
structures of the petitioner no. 1 society in terms of and in exercise of
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powers and duties under the provisions of the Gujarat Provisional
Municipal Corporations Act, 1949.
B. Pending the admission, hearing and final disposal of the present
petition, this Hon'ble Court may be pleased to stay and suspend the
operation and implementation of the respondent authorities' direction,
as contained in the notice dated 30.9.2021, directing the petitioner no.
1 society and its members to repair and secure the dilapidated,
dangerous and ruinous structures of the petitioner no. 1 society and be
further pleased to direct the respondent authorities to take appropriate
steps for getting the dangerous and dilapidated structures of the
petitioner no. 1 society vacated/evicted and demolished in in exercise
of powers and duties under the provisions of the Gujarat Provisional
Municipal Corporations Act, 1949.
C. Ex parte ad interim relief in terms of prayer B hereinabove be
granted.
D. Such other and further reliefs as may be deemed fit in the facts of
the present case may be granted.
2. The petitioner No. 1 is a co-operative housing society
registered under the provisions of the Gujarat Co-operative
Societies Act, 1961 vide registration no. D/14010 dated
29.11.1989. The petitioner No. 1 society is the owner of land
admeasuring 3260 sq. mt. at Revenue Survey No. 1118, Final
Plot No. 186/2 and 186/3 paiki of Vejalpur Town Planning
Scheme No. 6 in Village Jodhpur, Taluka : Vejalpur, District :
Ahmedabad. The aforesaid is situated behind Satellite Police
Station, Near Ramdevnagar Bus Station, Satellite, Ahmedabad.
In 1989-90, a total of 5 blocks (Block A to E) comprising of total
66 residential apartments (flats in Blocks A, B, C having built-
up area of about 69 sq. mt. each, flats in Block E having built-
up area of about 67 sq. mt. each and flats in Block D having
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having built-up area of about 52.76 sq. mt. each) were
constructed and these flats were allotted to 66 persons who
became the members of the petitioner society. These flats are
known as "Sunvalley Apartments". The petitioner No. 2 is the
Chairman and the petitioner No. 3 is the Secretary of the
petitioner No. 1 society.
2.1 The construction of the flats is more than 31 years old
and the structures are in a highly dilapidated and dangerous
state. The blocks are structurally unsafe and not repairable any
more. There are corrosion in many of the RCC slabs, beams,
columns and foundation due to long term seepage of rain
water and water leakages in service lines can be seen. The
structures are so ruinous that they cannot withstand the
weight of the walls and slabs of upper floors for long. A copy of
the report of the structural engineer in regard to the state of
the structures and best course of action along with
photographs of the structures is duly produced at Annexure -
A.
2.2 The respondent - Corporation in its impugned notice
dated 30.09.2021 declared the structures to be dangerous and
ruinous but asked the petitioner society to repair the same. A
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copy of the said notice is duly produced at Annexure - B. The
said notice is also pasted by the respondent Corporation on the
structures and one of the photographs is duly produced at
Annexure - C. Thus, the structures pose great danger to the
lives of persons occupying and visiting the same and are also
likely to cause damage to the surrounding properties when
they fall.
2.3 The repairing and restrengthening of these structures is
not feasible and even if feasible, would involve reconstruction
right from the foundation which, even if possible, would be an
impractical and herculean task requiring enormous amounts of
money which the society and its members would not be in a
position to afford. Moreover, embarking on a project of
repairing such structures would mean that the members of the
society would have to vacate their respective apartments and
find alternate accommodation at their own cost during the
course of such work, which would also be very expensive for
the members and most of the members may not be in a
position to afford it. The practical solution to the aforesaid
problem was for the society to be redeveloped as
contemplated under the Gujarat Ownership Flats Act, 1973, a
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copy of which is duly produced at Annexure - D.
2.4 In line of the aforesaid, the members of the society
decided to go for redevelopment by Resolution dated
01.11.2020 which is duly produced at Annexure - E.
Memorandum of Understanding (MOU) came to be entered into
by the 64 out of 66 members with regard to the
redevelopment with the respondent No.4 on 14.02.2021. Ms.
Khushbu Hardik Shah who is the joint owner of the Flat No.E/3
in Block E along with the respondent No.5, were also
signatories to the said MOU. The respondent No.6 has also
consented for redevelopment by signing an agreement to
redevelopment with the respondent No.4 herein in the Annual
General Meeting (AGM) held on 23.02.2020 as well as vide
letter dated 20.01.2021, a copies of which are duly produced
at Annexure - G colly. Thus, more than 97% members have
consented for redevelopment which is far more than the
prescribed minimum 75% under Section 41A of the Gujarat
Ownership Flats Act, 1973. Therefore, the proposed
redevelopment is in-consonance with the provisions of the
Gujarat Ownership Flats Act, 1973.
2.5 As on date, all the members, except the respondent
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Nos.5 and 6 have executed MOU for redevelopment with the
respondent No. 4 and are ready to vacate their respective flats
and hand over possession thereof to the respondent No. 4
upon which the respondent No. 4 would pay rent to them as
per the terms of the agreement. In pursuance of the MOU
signed by about 97% of the members, the required NOC for
height clearance for the project has been issued by the Airport
Authority of India and the Fire Department of the respondent
corporation has also given its opinion for the project. Copies of
the said NOC and opinion are duly produced at Annexure - H
colly. The petitioner society has thus taken steps in
furtherance of the decision to go for redevelopment and has
expended monies.
2.6 The respondent Nos. 5 and 6 have not signed MOU for
redevelopment despite repeated requests by the petitioner
society. In fact, several months after the execution of the
aforesaid MOU, the respondent No. 6, has been addressing
letters alleging false and baseless allegations and seeking
frivolous information even though all relevant information with
regard to redevelopment has been provided to all members
including the respondent No. 6 after which 97% members have
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signed the MOU draft which was also circulated to all members
including respondent No. 6 so as to enable the members to
understand the terms before signing and no objection had
been raised by respondent No. 6 to the same. The MOU
provides all information of the proposed redevelopment. The
respondent No. 6 was also provided with all available
information and was also requested to come and peruse all
available documents and information with regard to
redevelopment which are with the society's managing
committee but the respondent No.6 never did so. Moreover the
so-called information with respect to the project cost,
construction cost, etc. to the respondent No. 4 is not at all
within the purview of the society or its members and is not
their lookout nor is it required to be provided. Once 97%
members have agreed for redevelopment and signed MOU, the
respondent No. 6 is not entitled to raise frivolous objections or
to stall redevelopment based on such queries.
2.7 All the efforts to convince the respondent Nos.5 and 6 to
co-operate in the redevelopment process are in vain. The law
provides for redevelopment on the basis of the consent of 75%
of the members for redevelopment and hence, the respondent
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Nos.5 and 6 have no legal right to create any hindrances to
redevelopment. The petitioner society has no other alternative
but to address letter dated 23.11.2021 to the respondent
authorities inter-alia pointing out that the petitioner society
has decided to go for redevelopment by 97% majority and has
requested the respondent authorities to exercise their powers
under the provisions of the Gujarat Provincial Municipal
Corporations Act, 1949 to get the dangerous structures of the
society vacated and demolished, so as to enable the society
and the respondent No.4 to take forward the redevelopment of
the society. Copy of the said letter dated 23.11.2021 is duly
produced at Annexure - J. However, no action as contemplated
under the aforesaid laws is undertaken by the respondents.
2.8 In the aforesaid set of facts, the petitioners herein are
constrained to approach this Court seeking the reliefs as
referred above.
3. Heard Ms. Amrita M. Thakore, learned advocate
appearing for the petitioners, Mr. Deep D. Vyas, learned
advocate appearing for the respondent Nos.1 to 3, Mr. P.A.
Medh, learned advocate appearing for the respondent No.4,
Mr. Dhruvik K. Patel, learned advocate appearing for the
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respondent No.5 and Mr. Rutvij S. Oza, learned advocate
appearing for the respondent No.6.
4. Ms. Amrita M. Thakore, learned advocate appearing for
the petitioners, submitted that the petitioner society which was
constructed in 1989-90 with 5 Blocks (A to E) with total of 66
flats of different areas, the said apartments have been allotted
to 66 persons who became members of the society. Thus, in all
there are total 66 members. It was submitted that the
buildings are more than 25 years old and the building are
extremely dilapidated and dangerous condition. Reliance was
placed on the report of the Structural Engineer dated
18.01.2021 along with the photographs duly produced at
Annexure - A and it was substantiated that, the photographs
itself shows that the buildings are in dilapidated condition.
Reliance was also placed on the Notice dated 30.09.2021
issued by the respondent - AMC under Section 264 of the
Gujarat Provisional Municipal Corporation Act, 1949 wherein, it
is stated that the building-in-question is requires repairment. It
was submitted that considering the interest of the flat owners,
it was resolved to go for redevelopment by Resolution dated
01.11.2020. It was submitted that 64 out of 66 members
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consented to the redevelopment.
4.1 Ms. Thakore, learned advocate, submitted that it is
settled position of law that once the petitioner society has
decided to avail the remedy of redevelopment under Section
41A of the Gujarat Ownership Flats Act, 1973, the objections
raised by the respondent Nos.5 and 6 fell into insignificance. It
was submitted that majority of the members have opined,
chosen and signed the MOU for redevelopment. It was
submitted that after obtaining consent from the 64 members,
on 08.09.2021, the Airport Authority of India has given NOC for
height clearance as also on 02.12.2021, the respondent - AMC
has also given fire safety opinion.
4.2 Ms. Thakore, learned advocate, submitted that
undisputedly, the structures are more than 31 years old and
there is consent of more than 75% members as prescribed
under Section 41A of the Gujarat Ownership Flats Act, 1973 as
well as the petitioner herein full fill the conditions provided for
redevelopment. In line of the aforesaid submissions, it was
submitted that the present petition be allowed and the
respondent Nos.5 and 6 be directed to handover the vacant
and peaceful possession of their flats for the purpose of
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redevelopment as per Section 41A of the Gujarat Ownership
Flats Act, 1973.
5. Mr. Dhruvik K. Patel, learned advocate appearing for the
respondent No.5, placed reliance on the affidavit-in-reply filed
by the respondent No.5 duly produced at page 257 and
submitted that the present petition is not maintainable as the
matter is that of a private subject matter concerning the
members of the society. The matter relates to individual rights
available to the respondent No.5 to make her choices and
attain satisfactory response to the quarries forwarded by her
for the redevelopment. It was submitted that the respondent
No.5 is the owner of Flat No.E/3, Sunvalley Apartments and is
under joint ownership of Khushboo H. Shahand. The consent of
other joint owner does not ipso-facto suggest that the
respondent No.5 shall also be bound by the agreement.
However, the respondent No.5 has an independent right over
the flat and separate from the joint ownership. It was
submitted that the petitioner has not produced any
documentary evidence which would suggest that the
redevelopment was accepted by all the members of the
society.
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5.1 It was mainly contended by Mr. Patel, learned advocate
appearing for the respondent No.5 that the respondent No.5 is
desirous that the respondent No.5 be allotted flat on the first
floor however, the same does not appear from the agreement.
The respondent No.5 believes that auspiciously it is the first
floor on which the respondent No.5 should be allotted flat. The
respondent No.5 is concerned with respect to the financial
guarantee in terms of the bank guarantee or a fixed deposit
equivalent to the amount being offered for the house/flat not
being provided by the developers. It was submitted that the
concern is that the builders have failed to assure the financial
remedies available to the respondent No.5 if they are unable to
finish the project as anticipated, in that case, the respondent
No.5 shall be at a grave loss not only physically and financially
but, emotionally as well. The bank guarantee being provided
by the developers is that of Rs.3,00,00,000/- on reducing
terms. It was submitted that the respondent No.5 is concerned
that the bank guarantee furnished seems insufficient for a
project of such a large scale.
5.2 Mr. Patel, learned advocate, submitted that the changes
in the value of the land and the houses from the date of
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agreement have changed drastically and the agreement has
no provisions to include the revised rates. The respondent No.5
is conscious that the property is almost 31 years old and is not
against the redevelopment. It was submitted that the
respondent No.5 has never opposed to the redevelopment
however, the procedure adopted by the petitioner society is
not transparent.
6. Mr. Rutvij S. Oza, learned advocate appearing for the
respondent No.6, submitted that the MOU is against the
interest of the society as the condition mentioned in the said
agreement, more particularly, clause 7 of the MOU that, except
66 flats which are presently owned by the society will be with
the society and the remaining 46 flats are of the ownership of
the developer and all the rights to transfer the said 46 flats are
with the developer and not with the society. The said recital is
against the interest of the society. It was submitted that the
respondent No.6 sought several details from the office bearers
of the petitioner society and raised various loopholes in the
MOU which are against the interest of the members of the
society however, the office bearers failed to resolve the issues
and are inclined to proceed for the development of the land of
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the society against the interest of the members of the society.
6.1 Mr. Oza, learned advocate, submitted that the present
disputes between the members of the society and the society
would fall within the realm of the provisions of the Gujarat
Cooperative Societies Act, 1961 (for short 'the Act, 1961'),
while the persent petition is nothing but arm-twisting attitude
of the office bearers of the society and at the behest of the
developer which is against the interest of the members of the
society. It was submitted that the respondent No.6 herein has
approached the Board of Nominees at Ahmedabad under
Section 96 of the Act, 1961 questioning the resolutions passed
by the petitioner society and the same is numbered as Suit
No.257 of 2022. It was submitted that it emerges from the
reply of the respondent - Corporation that the technical
experts have opined that if the notice dated 30.09.2021 is
complied with then there is not need for seeking direction as
prayed for by the petitioners in the memo of present petition.
7. Having heard the learned advocates appearing for the
respective parties, following emerge:
7.1 The petitioner society was constructed in the year 1989-
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90 in 5 Blocks (A to E) having 66 flats of different areas for 66
members. The building are undisputedly more than 25 years
old and are in dilapidated and dangerous condition. This Court
has perused the report of the Structural Engineer dated
18.01.2021 duly produced at Annexure - A along with the
photographs duly produced at page 32 to 42 and the Notice
issued by the respondent - AMC dated 30.09.2021 duly
produced at page 43.
7.2 The society appointed a firm of architects namely Ignitus
Architectural Studio for providing a technical opinion on
redevelopment. The said firm prepared a project report dated
05.07.2019 which is duly produced at page 240. The society
invited offers from builders through news paper advertisement
dated 17.07.2019 duly produced at page 246 wherein, three
builders have submitted their offers. The society gave details
of requirements of the society to the builders vide 21.07.2019
duly produced at page 243-244. In January, 2020, Block wise
meetings were held where offers received were discussed and
majority members approved the offer of the respondent No.4.
The respondent No.6 also approved the said offer. The minutes
of the meetings are duly produced at page 252. The General
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Body meeting was held on 23.02.2020 where attending
members reaffirmed approval of respondent No.4's offer. The
respondent No.6 approved the offer and the other co-owner of
Flat E/3 also approved the offer duly produced at page 147. On
01.11.2020, a General Body meeting was held during which
the respondent No.4 explained in detail the redevelopment
proposal duly produced at page 91. On 14.02.2021, 64
members out of 66 members (i.e. 96.97% members) executed
MOU with the respondent No.4 for redevelopment of society.
One co-owner of Flat E/3 also signed the MOU. A list of
consenting members is duly produced at page 214. Only 2
members i.e. the respondent No.5; co-owner of Flat E/3 and
the respondent Nos.6 to 9; owners of Flat E/6 refused to
cooperate in the redevelopment plan and chose not to signed
the MOU. On 08.09.2021, the Airport Authority of India has
given NOC for height clearance for the redevelopment project
duly produced at page 152. On 02.12.2021, the respondent -
AMC has also given fire safety opinion for the project duly
produced at page 155.
7.3 The MOU dated 14.02.2021 also provides for the
following amenities:
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a. Larger size of flats
b. Lift, parking, bore, water tank etc.
c. Rent clause
d. Administrative expenses
e. Payment for furniture, fixture etc.
f. Respondent No.4's offer letter dated 07.12.2020 to
be part of MOU
g. Bank guarantee
7.4 At this stage, it is apposite to refer to Section 41A of the
Gujarat Ownership Flats Act, 1973, which reads thus:
"41A. Re-development of flats and apartment. - 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 flats 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 development by the concerned
Authority; or
(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 be the meaning as assigned to it in relevant
Development Control Regulations."
8. The objections raised by the respondent No.5 with
respect to the maintainability of the present petition is no
longer res-integra in light of the judgment dated 21.06.2022
passed in Special Civil Application No.8530 of 2019 and the
judgment dated 09.11.2023 passed in Special Civil Application
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No.11314 of 2022 wherein, the prayers as prayed for by the
petitioners are held to be maintainable. The redevelopment is
accepted and consented by more than 75% members.
8.1 In the facts of the present case, in light of Section 41A of
the Act, 1973, (i) 64 out of 66 members i.e. 96.97% members,
have consented and signed the MOU which is entered into by
the petitioner with the respondent No.4 (ii) the report of the
Structural Engineer dated 18.01.2021 duly produced at
Annexure - A, stating that the buildings are in extremely
dilapidated and dangerous condition and (iii) the building are
more than 31 years old.
8.2 The queries of the respondent No.6 have been dealt with
and replied to by the petitioner herein. Each and every
communication by the respondent No.6 has been answered
and replied to by the petitioner herein as reflected from the
following:
a. Project report dated 30.06.2021
b. Reply of the petitioner dated 05.08.2021 to the
communication of the respondent No.6 dated
06.07.2021
c. Communication by the petitioner dated 28.06.2021 to
the respondent No.6 to consent for redevelopment
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d. On 09.08.2021, the objections raised by the
respondent No.6 with respect to one Shri Sukhdev
Raval, acting as Deputy Secretary is without any
evidence. This Court has perused the record however,
the objections are without any base.
e. On 20.09.2021, the objections raised by the
respondent No.6 came to be replied by the petitioner
on 23.09.2021.
f. On 01.10.2021, again the objections raised by the
respondent No.6 which was replied to by the petitioner
on 23.10.2021.
8.3 This Court has perused the aforesaid communications
between the petitioners and the respondent No.6 wherein, in
each and every communication, the petitioner society has
asked the respondent No.6 to visit the office of the petitioner
and perused the documents/record.
9. At this stage, it is apposite to refer to the ratio as laid
down by the Hon'ble Supreme Court in Civil Appeal No.7261 of
2022 dated 13.10.2022 in case of Bengal Secretariat Co.op.
Land Mortgage Bank and Housing Society Ltd. vs. Sri Aloke
Kumar & Anr. Paragraphs 52 to 58 of the said decision read
thus:
"52. It is not in dispute that the General Body of the Appellant
Society, which is supreme, has taken up a conscious decision to
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redevelop the administrative building. The General Body of the
Appellant Society has also resolved to appoint the Hi-Rise as the
developer. Those decisions having not been challenged at all, the
Respondent No. 1 being a member of the Appellant Society is bound
by the said decisions. The General Body of the Appellant Society has
approved the terms and conditions of the development agreement by
overwhelming majority. Merely because the terms and conditions of
the development agreement are not acceptable to the Respondent No.
1, who could be said to be in minuscule minority cannot be the basis of
not to abide by the decision of the overwhelming majority of the
General Body of the Appellant Society. The redevelopment of the
property is necessitated in view of the fact that the building is in a
dilapidated condition with passage of time. The redevelopment thus, in
our view, would be a requirement and a necessity and cannot be
termed as business. The Appellant Society in such circumstances did
not even require to carry out any amendment to the bye-laws or to
include the "redevelopment of the buildings" as one of the objects of
the Society before taking any decision to redevelop its property.
53. By now it is well established position that once a person becomes a
member of the Co-operative Society, he loses his individuality with the
Society and he has no independent rights except those given to him by
the statute and bye-laws. The member has to speak through the
Society or rather the Society alone can act and speaks for him qua the
rights and duties of the Society as a body (see : Daman Singh v. State
of Punjab, reported in (1985) 2 SCC 670 : AIR 1985 SC 973). This view
has been followed in the subsequent decision of this Court in the case
of State of U.P v. Chheoki Employees Co-operative Society Ltd.,
reported in (1997) 3 SCC 681 : AIR 1997 SC 1413. In this decision, this
Court further observed that the member of a Society has no
independent right qua the Society and it is the Society that is entitled
to represent as the corporate aggregate. This Court also observed that
the stream cannot rise higher than the source. Suffice it to observe
that so long as the Resolutions passed by the General Body of the
Appellant Society are in force and not overturned by a forum of
competent jurisdiction, the said decisions would bind the Respondent
No. 1. He cannot be permitted to take a stand alone position but is
bound by the majority decision of the General Body. Notably, the
Respondent No. 1 has not challenged the Resolutions passed by the
General Body of the Appellant Society to redevelop the property and
more so, to appoint the Hi-Rise as the Developer to give him all the
redevelopment rights.
54. It was also argued on behalf of the Respondent No. 1 that the
property is in a good condition and there is no need to redevelop the
existing building. In the first place, as noted earlier, the decision of the
General Body of the Society to redevelop the subject property has not
been challenged at all. Besides, no provision in the Co-operative
Societies Act or the rules or any other legal provision has been brought
to our notice which would curtail the right of the Society to redevelop
the property when the General Body of the Society intends to do so.
Essentially, that is the commercial wisdom of the General Body of the
Society. It is not open to the Court to sit over the said wisdom of the
General Body as an Appellate Authority. Merely because one single
member in minority disapproves of the decision, that cannot be the
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basis to negate the decision of the General Body, unless it is shown
that the decision was the product of fraud or misrepresentation or was
opposed to some statutory prohibition. That is not the grievance made
before us. In the present case, the General Body took a conscious
decision after due deliberations for many years to redevelop its
property. Even with regard to the appointment of the "Hi-Rise" as the
Developer, the record shows that it was decided by the General Body
of the Society after examining the relative merits of the proposals
received from the developers.
55. The object of the provision has to be borne in mind. The entire
legislative scheme goes to show that the Co-operative Society is to
function democratically and the internal democracy of a society,
including resolutions passed in accordance with the Act, the Rules, and
the bye-laws have to be respected and implemented. The Co-operative
Movement is both a theory of life and a system of business. It is a form
of voluntary association where individuals unite for mutual aid in the
production and distribution of wealth upon principles of equity, reason
and common good. It stands for distributive justice and asserts the
principle of equality and equity ensuring to all those engaged in the
production of wealth a share proportionately commensurate with the
degree of their contribution. It provides as a substitute for material
assets, honesty and a sense of moral obligation and keeps in view the
moral rather than the material sanction. The movement is thus a great
Co-operative movement.
56. The basic principles of co-operation are that the members join as
human beings and not as capitalists. The Co-operative Society is a
form of organization wherein persons associate together as human
beings on the basis of equality for promotion of economic interest of its
members. This movement is a method of doing the business or other
activities with ethical base. "Each for all and all for each" is the motto
of the co-operative movement. This movement not only develops
latent business capacities of its members but produces leaders;
encourages economic and social virtues, honesty and loyalty, becomes
imperative, prospects of better life, obtainable by concerted effort is
opened up; the individual realises that there is something more to be
sought than mere material gains for himself. So, in fact, it being a
business cum moral movement, and the success of the Co-operative
Society depends upon the reality with which one of the members work
for the achievement of its objects and purpose. The Committee on Co-
operation in India emphasized the moral aspect of co-operation, to
quote the words:-
"The theory of co-operation is very briefly that an isolated and
powerless individual can, by association, with others and by moral
development support, obtain in his own degree the material
advantages available to wealthy or powerful persons and thereby
develop himself to the fullest extent of his natural abilities. By the
Union of forces, material advancement is secured and by united
action self reliance is fostered and it from the inter-action of these
influences that it is hoped to attain the effective realisation of the
higher and more prosperous standard of life which has been
characterised as better business, better arming and better living;
we have found that there is a tendency not only among the outside
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public but also among supporters of the movement to be little its
moral aspect and to regard this as superfluous idealism.
Cooperation in actual practice must often fall short of the standard
aimed at and details inconsistent with co- operative ideals have
often to be accepted in the hope that they may lead to better
things. We wish clearly to express that it is the true co-operation
alone, that is, to a co-operation which recognises the moral accept
of the question that Government must look for the amelioration of
the masses and not to a psudo co-operative edifice, however
imposing, which is built in ignorance of co- operative principles.
The movement is essentially a moral one and it is individualistic
rather than socialistic. It provides as a substitute for material
assets honesty and a sense of moral obligation and keeps in view
the moral rather than the material sanction. Pages 5 and 6 of
Theory and Practice of Co-operation in India and Abroad by
Kulkarni, Volume 1. Co-operation is a mode of doing business, is at
present applied as the solution of many economic problems. Co-
operation is harnessed to almost all forms of economic activity.
Though co-operation was introduced in this country as a remedy
for rural indebtedness, it has been applied successfully in a wide
range of activities such as production, distribution, banking,
supply, marketing, housing and insurance. See Theory and Practice
of Co-operation in India and Abroad by Kulkarni Volume 1 Page 2."
57. In the overall view of the matter, we are convinced that the
impugned judgment and order passed by the High Court is not
sustainable in law and deserves to be set aside. At one point of time,
we were inclined to allow this appeal by imposing an exemplary costs
on the Respondent No. 1 for unnecessarily dragging the Appellant
Society into a frivolous litigation & not allowing the Appellant Society
to go ahead with the project for the past almost two decades.
However, we refrain from passing such order of costs in the hope that
the Respondent No. 1 realises that the development of the
administrative building will be for the betterment of the society. No
individual member is going to gain anything from the redevelopment.
It is the society as an autonomous body which will gain something.
58. For the foregoing reasons, this appeal succeeds and is hereby
allowed. The impugned judgment and order passed by the High Court
is hereby set aside and it shall now be open to the Appellant Society to
proceed further with its project of redevelopment in accordance with
the resolutions passed by the General Body from time to time. It is
needless to clarify that the first priority should be given to demolish
the entire building as the same is in a dilapidated condition.
10. It is also apposite to refer to the decision dated
08.12.2023 passed by this Court in Letters Patent Appeal
No.1427 of 2023. Paragraphs 8 to 12 of the said decision read
thus:
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"8. Having extensively gone through the provisions of Section 41-A
read with the Rules 18 to 25 made thereunder, we record that the
society for carrying out redevelopment work of the building has to
follow the terms and conditions as laid down in Section 41-A which
are :-
(i) The building shall have completed the period of twenty-five years
from the date of issuance of the development permission by the
concerned authority;
(ii) The concerned authority has declared the building being in ruinous
condition, i.e. declared it dilapidated and dangerous to any person
occupying, resorting to or passing by such structure or any other
structure or place in the neighborhood thereof;
(iii) Consent of not less than 75% of the members of the building for
redevelopment of the building has been obtained. 9. There is no
dispute about the fact that the above noted three conditions for
redevelopment project/work of the building in question has been
fulfilled in the instant case. No such dispute has been raised that the
concerned authority has not declared the building being in ruinous
condition. The only dispute raised by the appellants (fifteen numbers
of the society) is that the building is not in dilapidated condition, based
on an alternative report of Structural Engineer. The said issue, as
rightly held by the learned Single Judge, cannot be examined by us as
a Court of appeal. The fact remains that the concerned authority,
namely the Ahmedabad Municipal Corporation had issued a notice
dated 19.05.2022, about three and a half years back, directing for
carrying out major repairs of the building in question noticing that the
building is in ruinous condition. More than 75% of the members have
agreed for redevelopment and there is no dispute about the said fact.
There is also no dispute about the date of development permission
having been granted for the building as disclosed in the writ petition.
10. The only dispute which is being raised before us is about the
procedure for redevelopment having not been followed by the
concerned body of the society. In this regard we may note that a detail
procedure under Rules 19 to 25 has been prescribed wherein it is
provided that for making decision to undertake the redevelopment of
the building, the Managing Committee or the body shall convene the
special general meeting of the cooperative society or association. The
Rules and the by-laws of the society with respect to convening of such
meetings, such as notice, circulation of agenda items, quorum at the
meetings, taking policy decisions, entering into an agreement,
supplying the minutes of meeting of the members, etc. shall be
applicable in the matters relating to redevelopment project. Sub-rule
(3) of Rule 19 provides that the Managing Committee shall place
before the general body the agenda items for taking policy decision
relating to redevelopment of building; and for appointment of the
Architect/ Project Management Consultant to prepare the
redevelopment project. The special general body meeting shall take a
decision with the consent of not less than 75% of the total members of
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the body for redevelopment of the building and select an
Architect/Project Management Consultant to prepare the
redevelopment project. The general body may authorize the Managing
Committee to take all further necessary actions/steps for
redevelopment project. To the above procedure, no illegality can be
pointed out by the learned counsel appearing for the appellants. Rule
20 further provides that the Architect / Project Management Consultant
appointed by the Committee as per the decision taken at the special
general meeting, shall prepare the project report within two months
from the date of appointment and submit the same to the Managing
Committee. The project report contains the details as mentioned
therein. It is further provided that the Architect/Project Management
Consultant after preparation of the project report shall invite offers
from the eligible contractors/builders/company or developer. Rules 21
and 22 provide the manner in which the selection of developer is to
take place. In this regard, relevant is to note that the offer given by the
respondent No.3 Developer for redevelopment of the society has been
considered in the meeting dated 31.12.2020 of the society and the
changes were suggested in the discussion. After incorporating those
changes, the final offer of respondent No.3 has been accepted on
30.03.2021. Till date, only a Memorandum of Understanding has been
arrived with the respondent No.3 Developer and no Development
Agreement has so far been signed. Rule 23 provides the terms and
conditions to be approved in the special general body meeting of the
society to enter into a Development Agreement with the developer in
consultation with Architect/Project Management Consultant. The
conditions to be incorporated in the Development Agreement, amongst
others, shall contain the conditions laid down in Clauses (i) to (x). Rule
24 provides that the developer will not be able to make any changes in
the building plan except with the written permission of the Managing
Committee. The procedure for allotment of new flats has been
provided in Rule 25.
11. Taking note of the above provisions of the Rules made under the
Gujarat Ownership Flats Act, 1973, we are of the considered opinion
that due care has been taken by the Legislature to address the
concern of the appellants herein. The appellants can dispute the
conditions of the Development Agreement, if not properly incorporated
and shall have a right to participate in the process of development in a
constructive way. However, 15 members out of total 96 members of
the society cannot be permitted to stall the process of redevelopment
only on their own suspicions and notions. There are no allegations of
fraud or violation of any of the procedures prescribed in the Rules as
noted hereinabove.
12. For the above reasoning in addition to the reasoning given by the
learned Single Judge, we do not find it a fit case to interfere. The
appeal is found devoid of merits and hence, dismissed. The appellants
are directed to cooperate in the process of redevelopment of the
society by giving constructive suggestions in the matter of entering of
Development Agreement with the selected developer."
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11. It is also apposite to refer to the decision dated
23.01.2023 of the Division Bench of this Court in Letters Patent
Appeal No.1075 of 2022. Paragraphs 48, 52 and 54 of the said
decision read thus:
"48. The contention of Mr. Oza, learned Senior Advocate that there is
no provision under the Gujarat Ownership Flats Act for providing
summary eviction of a nonconsenting member unlike the provision
under the Maharashtra Housing and Area Development Act, 1976 or
The Maharashtra Slum Areas (Improvement, Clearance and
Redevelopment) Act, 1971, providing for such eviction and as such
Writ Court could not have issued a Writ of Mandamus to the contesting
respondents to quit and handover vacant possession of their flats, is
no doubt an attractive argument which requires to be brushed aside,
inasmuch as the Hon'ble Apex Court in the case of Binny Ltd. and Anr.
versus V. Sadasivan and Others reported in (2005) 6 SCC 657, has held
that the High Court under Article 226 of the Constitution of India is
empowered to issue Writ on the principles that it is a public law
remedy and available against a body or persons performing public law
function. In fact, the learned Single Judge had taken note of
observations made by the Hon'ble Apex Court in the case of Dwarka
Nath versus Income Tax Officer, reported in 1965 3 SCR 536,
whereunder it has been held to the following effect:
"6. This article is couched in comprehensive phraseology and it ex
facie confers a wide power on the high court to reach injustice
wherever it is found. The constitution designedly used a wide language
in describing the nature of the power, the purposes for which and the
person or authority against whom it can be exercised. It can issue writs
in the nature of prerogative writs as understood in England; but the
scope of those writs also is widened by the use of the expression
"nature", for the said expression does not equate the writs that can be
issued in India with the those in England, but only draws in analogy
from them. That apart, High Courts can also issue directions, orders or
writs other than the prerogative writs. It enables the High Courts to
mould the reliefs to meet the peculiar and complicated requirements
of this country. Any attempt to equate the scope of the power of the
High Court under Article 226 of the Constitution with that of the
English courts to issue prerogative writs is to introduce the
unnecessary procedural restrictions grown over the years in a
comparatively small country like England with a unitary from of
Government to a vast country like India functioning under a federal
structure. Such a construction defeats the purpose of the article itself."
52. At the outset, it requires to be noticed that by calling upon the
occupant (respondent No.9) to vacate the premises by issuance of writ
of mandamus, there is no order of eviction is passed. The resolution of
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the general body of members passed by the majority (now all the
members having consented for redevelopment except respondent
No.9) would indicate that during the period of redevelopment taking
place, all the occupants of the existing property who are in occupation
of their respective flats would be provided alternate accommodation in
a rented premises and rent of the such premises would also be paid by
the developer himself. Thus, there is no eviction or dispossession.
Eviction in terms of the prevalent rent laws or ejectment of an
occupant from the suit property as contemplated under the Transfer of
Property Act would mean to dispossess a person in occupation of a
premises under the authority of law by putting an end to such right. In
other words, eviction means right to reside or occupy ceasing or such
right getting terminated by operation of law. In the instant case,
respondent No.9 is neither dispossessed nor evicted but has only been
directed to be shifted to an alternate premises which she/they would
continue to reside till redevelopment takes place. Temporary shifting
of residents of a premises in redevelopment project would not amount
to dispossession or eviction as sought to be contended. In fact,
appellant is not deprived of the property viz. residential
accommodation at all.
54. . Having affixed their signatures to the resolutions and having
not questioned the resolutions so passed by taking appropriate steps,
respondent Nos.5 to 8 herein as well as the appellant are estopped
from contending contrary to the same, inasmuch as they are bound by
resolutions for which they have affixed their signatures. Hence, we are
of the considered view that no prejudice is caused to the appellant or
similarly placed persons as discussed in detail by the learned Single
Judge vide paragraph 37. In that view of the matter, we are unable to
accept the contentions raised by learned Senior Advocate appearing
for the appellant."
12. Considering the aforesaid position of law and the facts of
the present case, once the project of redevelopment is
undertaken by the society and there is consent of more than
75% members as also the flats-in-question are more than 31
years old, the objections raised by the individual members are
not maintainable. The project of redevelopment undertaken by
the petitioner society is required to be proceeded further. This
Court deems it fit to exercise powers under Article 226 of the
Constitution of India as the decision taken for the
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redevelopment is in larger public interest and provides for the
benefits to the house holders/flat owners and the property
right of any occupier would not be affected and every occupier
will get a new unit against their occupation and in the opinion
of this Court, in the redevelopment process when almost all
the members, except 2 members, have given consent for
redevelopment, at the instance of the 2 members, the consent
of the majority members should not suffer.
13. At the cost of repetition, it is required to be observed that
the construction of the building is old and damaged and the
report of the Structural Engineer also states that the building is
in dilapidated condition, under such circumstances, in the
interest of the residents of the building/flats, the decision of
redevelopment appears to be taken in good faith and such
process cannot be stalled at the instance of the 2 members
who objected to such redevelopment for their personal
grievances. The respondent No.5, in fact, has also stated that
the respondent No.5 is not adverse to the redevelopment.
13.1 Even otherwise, the Hon'ble Division Bench in Letters
Patent Appeal No.1427 of 2023 by order dated 08.12.2023, has
extensively explained the procedure of redevelopment under
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Rules 19 to 25 in paragraph 10 of the said order wherein, the
Hon'ble Division Bench has held that it is only at the stage of
MOU between the petitioner and the respondent No.3 and no
development agreement has so far been signed. Rule 23
provides the terms and conditions to be approved in the
special general body meeting of the society to enter into a
development agreement with the developer in consultation
with Architect/Project Management Consultant. The conditions
to be incorporated in the Development Agreement, amongst
others, shall contain the conditions laid down in Clauses (i) to
(x). Rule 24 provides that the developer will not be able to
make any changes in the building plan except with the written
permission of the Managing Committee. The procedure for
allotment of new flats has been provided in Rule 25. Taking
note of the aforesaid provisions, the Hon'ble Division Bench
held that due care has been taken by the Legislature to
address the concern of the appellants therein. The appellants
can dispute the conditions of the Development Agreement, if
not properly incorporated and shall have a right to participate
in the process of development in a constructive way.
14. In light of the aforesaid discussion and the ratio as as
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referred above, the respondent Nos.5 and 6 are the members
of the society and loses their individual rights to challenge the
decision of the society for and except, through the society. The
Lavad suit, which is instituted by the respondent No.6 and
which is pending before the competent Court, is independent
proceeding initated by the respondent No.6 against the society
for which the redevelopment, in the opinion of this Court,
cannot be stalled. The aforesaid cannot be a reason to stall the
process of redevelopment. The petitioner society is compliant
of the conditions under Section 41A of the Act, 1973, in the
facts of the present case, (i) the building is more than 25 years
old i.e. 31 years; (ii) the Structural Engineer Report states that
the building is in dilapidated condition and (iii) there is consent
of more than 75% members i.e. 96.97%. members.
15. For the said reasons, the prayers as prayed for in the
present petition, are required to be allowed and the same are
allowed. The respondent Nos.5 and 6 are directed to vacate
their respective flats in the petitioner No.1 society and
handover the peaceful and vacant possession thereof for the
redevelopment as per Section 41A of the Gujarat Ownership
Flats Act, 1973 within a period of eight weeks from the date of
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receipt of the order and cooperate in the redevelopment of the
petitioner No.1 Society. In view of the same, the prayer 7(B) is
held to be infructuous.
15. With the aforesaid, the present petition stands allowed.
Rule made absolute.
(VAIBHAVI D. NANAVATI,J)
NEHA
