1. By this notice of motion the plaintiff seeks a mandatory injunction directing defendant no. 1 to handover peaceful possession of the suit property with vacant building forming subject matter of the suit Development Agreement dated 19th December, 2014, while directing defendant nos. 2 to 16 to vacate the suit flat and garages and hand over the same to the plaintiff for the purpose of demolition. Further injunctions are sought restraining the office bearers of the defendants from interfering with and obstructing performance of the said Development Agreement. The plaintiff also seeks appointment of Court Receiver, High Court, Bombay with all powers under Order XL Rule 1 of the Code of Civil Procedure, 1908 including power to take possession and handover the same to the plaintiff for the purpose of demolition. Lastly a direction is sought against defendant nos. 2 to 16 to execute agreements of permanent alternate accommodation in respect of flats proposed to be constructed after demolition of the old building. The reliefs are opposed only by defendant nos. 2 to 13 and 16. The defendant no. 1 – society and the remaining members do not oppose the application. In fact barring a few all other defendants support the plaintiff with the tacit approval of the society.
2. Affidavits in reply dated 24th June, 2016 and 4th April, 2017 have been filed on behalf of defendant no. 1. On behalf of defendant no. 7 also an affidavit in reply dated 29th June, 2016 has been filed. Defendant nos. 2 to 8, 10 and 11 have not filed affidavits in reply to the motion but have filed a written statement dated 23rd June, 2017. Defendant no. 9 has also filed written statement dated 5th July, 2017. Likewise defendant nos. 13 and 16 have also filed written statement dated 11th September, 2017. On behalf of defendant nos. 2 to 13 and 16 Mr. Ankhad submitted that the written statement may be treated as replies to the motion. Defendant nos. 17 to 20, 22 to 24, 26, 27, 29 to 31, 33 to 39, 41 to 42 support the plaintiff and defendant no. 1.
A few facts may be gone into by way of background :
3. The plaintiff is a proprietary concern of one Mr. Sanjay Ghanshyamdas Jumani. Defendant no. 1 is a Co-operative Housing Society comprising of 162 plots having buildings thereon with a common recreation ground along with gymkhana located at Chembur Village, Mumbai. Gurukripa Building [“Gurukripa”] is part of the defendant no. 1 society. Gurukripa consists of 42 flats and 11 garages constructed in 5 wings on plot of land bearing CTS No. 199 admeasuring 3445.9 sq.mtrs. Except for one flat ad-measuring 500 sq.ft the remaining 41 flats measure 400 sq.ft in area. These 42 flats are held by 42 shareholders of defendant no. 1. Defendant no. 1 however has 500 shareholders.
4. The building is said to be in a dilapidated condition and has been repaired a few times and it was eventually decided to go in for redevelopment. It is the plaintiffs' contention that the flat holders of Gurukripa had all conveyed their consent by executing consent letters in favour of the plaintiff. However after the consent letters were executed defendant nos. 2 to 11 purchased 10 flats in Gurukripa from the original owners, who had consented to redevelopment. Defendant nos.2 to 11, 12, 13 and 16 amongst others are now opposing redevelopment.
5. It is plaintiffs' case that these Defendants 2 to 11 are family members of persons in ownership and management of the Kukreja Group of Companies [“Kukreja Group”], who are developers of real estate. They have sought to stall the redevelopment and are interested in redeveloping Grukripa themselves. Several of the flat holders are said to have vacated their premises whereas defendant nos. 2 to 11 are claiming ownership and possession of the flats but do not reside there. It is the plaintiffs case that the flats have only been purchased to frustrate the redevelopment of the building. In the process of identifying the plaintiff as the developer the flat owners of Gurukripa formed a six member sub committee “Gurukripa Development Sub-Committee” [“Development Committee”] which invited quotations from interested developers. Six of whom are said to have submitted offers including the plaintiff. The plaintiff was selected. It is the defendants case however that the process of appointing the plaintiff is irregular since it is collusive. It is alleged by defendant nos. 2 to 11 that the agreement between plaintiff and defendant no. 1 was arrived as a result of collusion between plaintiff proprietor and one Mr. Sunder J. Vazirani who is the Secretary of defendant no. 1 society.
6. Mr. Tulzapurkar learned Senior Counsel representing the Plaintiff submitted the fact that Kukreja Group was behind the opposition to the redevelopment project and was instrumental in acquiring the 10 flats, can easily be inferred from the fact that Kukreja Group had also bid for redevelopment of the building. He invited my attention to letter dated 14th June, 2013 Exhibit PP to the plaint addressed by Kukreja Group to defendant no. 1 evincing interest in redeveloping the property. It is pertinent to mention in this behalf that the plaintiff has annexed as Exhibit 'C' to the plaint an extract of the records of the Ministry of Corporate Affairs in an attempt to establish that the Companies and Limited Liability partners(LLPs') are part of the same group particularly one in which one Sunil Tolaram Kukreja is director/ partner. It shows that there are 36 entities of which Mr. Kukreja is said to be director / partner. The names of defendant nos. 2, 5 and 7 appear at Item nos. 15, 3 and 2 respectively. From this it is evident that at least three of these defendants who have purchased flats are part of the entities in which the aforesaid Mr. Kukreja is director / partner. It is further stated that defendant nos. 2 to 11 purchased the flat at prices which were much higher then the market value only in an attempt to frustrate the redevelopment.
7. Mr. Tulzapurkar submitted that after completing the process of shortlisting developers the work of redevelopment was entrusted to the plaintiff and in this behalf my attention is invited to Exhibit D to the plaint which is a letter dated 19th May, 2008 addressed by the Development Committee of Gurukripa to the proprietor of the plaintiff which records the meetings held between the parties and which agrees to grant development rights to the plaintiff. The terms and conditions specified therein, required the plaintiff to provide to each flat owners of Gurukripa 800 sq.ft carpet area with one stilt parking. In addition Rs.3,00,000/- was to be paid to each flat owner and Rs.2,82,000/- in respect of each flat was payable to defendant no. 1 society for providing development rights. In addition Rs.60/- per sq.ft was payable to defendant no. 1 for TDR to be utilised. In respect of the garages compensation was to be paid by the plaintiff. Furthermore repairs to be undertaken for Gurukripa till the new building was constructed were also to be carried out by the plaintiff.
8. On 31st May, 2008 the plaintiff made a counter offer to provide flats of 770 sq.ft carpet area with one stilt parking, pay Rs. 2,00,000/- instead of Rs.3,00,000/- to each flat holder but agreed to pay the other sum of Rs. 2,82,000/- to the defendant no. 1 and Rs.60/- per sq.ft to defendant no. 1. for use of TDR. The plaintiff offered to pay compensation for existing garages and share Stamp duty and registration costs equally and also agreed that the plaintiff would carry out necessary repairs upto a maximum cost of Rs. 5,00,000/-.
9. On 1st June, 2008 a General Body Meeting of Gurukripa was held. Out of 42 flat owners 32/33 were present and they approved the proposal of the plaintiff vide their letter dated 31st May, 2008. They also resolved to obtain consent letters from each of the flat owners. Exhibit 'F' of the plaint is copy of the minutes of the General Body Meeting where it was resolved to take consent letters.
10. On 29th December, 2008 the Development Committee intimated the plaintiff of the resolution and the appointment of the plaintiff as developer and confirmed that the necessary development agreement would be entered into. Although it was submitted by Mr. Ankhad that the resolution is not of the Society but of the building occupants, what is material to note is Exhibit G to the plaint is copy of the communication dated 29th December, 2008 from the Development Committee to the plaintiff. It is not only signed by six members of the Development Committee, it is also affirmed on behalf of the first defendant society.
11. On 1st January, 2009 the Development Committee responded to the plaintiff seeking further confirmation as set out which was duly confirmed. This resulted in a resolution being passed on 1st March, 2009 which reads as follows :
“Further resolved the Managing Committee be authorized to sign the Deed of Agreement and Development of Land Agreement with building thereon with National Properties, Chembur, Mumbai
The extract of the register of members present and voting at the said General Body meeting held on 1st March, 2009 is annexed at Exhibit J to the plaint. Perusal thereof shows that a total of 62 persons had attended when the resolution was passed. Out of these 62 members, Mr. Tulzapurkar submitted 34 were occupants of Gurukripa. The agenda of the meeting is also seen to be annexed.
12. It was then contended that out of 62 members present and voting 34 members were of Gurukripa, thus out of 42 flat owners 34 were present and voted in favour of the resolution proposing redevelopment i.e. about 81% of the occupants of Gurukripa voted for the resolution. It is further contended that on 1st November, 2009 the defendant no. 1 society at its general body meeting resolved to approve a plan prepared by Architect B. H. Wadhwa. At this meeting also about 38 members were present. Thereafter about 40 flat owners of the total 42 had filed individual affidavits confirming that they are agreeable to the redevelopment proposal. Copies of these affidavits are filed at Exhibit 'L'. They are all identical and confirm that they are allottees in occupation of flats in Gurukripa and they have executed declarations-cum-affidavits in favour of the plaintiff dated 11th July, 2008. It transpires that on 5th April, 2010 the Development Committee had addressed a letter to the plaintiff citing delays in the development process and the plaintiff had contended that the draft agreement had not been finalised. On 25th April, 2010 the General Body confirmed the defendant no. 1's decision to let Gurukripa flat owners to appoint the plaintiff as the developer thereby signaling the society's formal approval of the proposal for redevelopment of Gurukripa.
13. On 27th June, 2013 defendant no. 1 filed a dispute in the Co-operative Court against 42 members and plaintiff calling for a declaration that the General Body decision and the Managing Committee Resolution were binding and an injunction not to create obstacles. Meanwhile the Deputy Registrar of Co-operative Society granted permission for redevelopment of Gurukripa through the plaintiff. Being satisfied with the process, the IOD was got revalidated till 30th April, 2014. In the interregnum repairs were undertaken. Pending commencement of the redevelopment process the plaintiff is stated to have incurred expenses of about Rs.20,32,702/- for repairs of the existing building alone, A list of expenses incurred is relied upon at Exhibit F to the plaint which has been disputed by same defendants. Finally on 19th December, 2014 a development agreement was executed.
14. Mr. Tulzapurkar invited my attention to the fact that the development agreement was duly stamped with duty of Rs.94,02,800/- and submitted that out of 42 members, 26 have already signed agreement of permanent alternate accommodation. A copy of the agreement for permanent alternate accommodation is seen to be annexed at Exhibit HH. Mr. Tulzapurkar submitted that apart from obtaining IOD, NOC for height clearance obtained from Airport Authority of India dated 17th December, 2014. The Structural Audit Report dated 15th January, 2015 of the Gurukripa Building A, B, C, D and E wings show that the buildings are in a highly deteriorated condition. These facts are not denied. The purchase of the said flats by defendant nos 2 to 11 was without obtaining the consent of the defendant no. 1 society as a result, the society declined to admit them as members, but defendants nos. 2 to 11 filed proceedings with Deputy Registrar of the Cooperative Societies who ordered the society to issue share certificates to them.
15. An appeal filed by the society was rejected and that is how the defendant nos. 2 to 11 became members. Mr. Tulzapurkar submitted what is pertinent to note that the vendors of defendant nos. 2 to 11 had already given their consent and consent once given could not be taken back. It is contended that defendant nos. 2 to 11 are relatives/ employees/ members of Kukreja Group who are interested in developing the suit property themselves which explains why these flats have been purchased but have never been occupied. It is submitted that since the society is party to the suit, statutory notice under section 164 of the MCS Act has also been served on the Deputy Registrar and the Society. It is submitted that draft of the permanent alternate accommodation agreement have been provided to all flat occupants including defendant 2 to 16. However the letters in that behalf addressed to defendants nos. 2 to 16 have been returned unserved with the remarks that the 'intimation posted'. Likewise letters to defendant nos. 15 and 16 as well have been returned unserved. On 21st May, 2016 the plaintiff is said to have informed defendant Mr. S Kukreja director of defendant nos. 2, 5 and 7 that the development agreement is available with the society and could be scrutinized.
16. Mr. Tulzapurkar submitted that the defendants who are now seeking to object to the redevelopment cannot object in view of the fact that the redevelopment is being carried out with the consent of the society which is binding upon the flat owners, in particular those who are seeking to contest the same. The flat owners opposed to the plaintiffs' are in a minority, more than 70% have agreed for redevelopment. He further submitted that no one has questioned the financial ability of the plaintiff to carry out the development work. The development agreement is of 2014 and is still valid and is not been revoked or cancelled. Defendant no. 7 who has taken up this contention in the affidavit in reply was not even member at the relevant time. Furthermore, the Deputy Registrar in his order while directing the defendant no. 1 society to admit the defendant nos. 2 to 11 as members has clearly stated that they will be bound by the decision of the society and that included the decision to go in for redevelopment. Contending to the contrary was of no avail.
17. In support of the submission on behalf of the plaintiff reliance was placed upon the following judgments :
(i) Girish Mulchand Mehta and Anr. vs. Mahesh S. Mehta and Anr. (2010 (2) Mh.L.J. 657).
(ii) Vasant Kheraj Bhanushali and Ors. vs. Goregaon Siddharth Nagar Sahakari Grih Nirman Sanstha Ltd and Ors. (2011(3) Mh.L.J. 433)
(iii) Harsha Co-op Housing Society Ltd. & Ors. vs. Kishandas S. Rajpal & Ors. (Writ Petition No. 10285 of 2009)
(iv) Maya Developers vs. Neelam R. Thakkar (2016 SCC Online Bom 6947)
(v) Kamgar Swa Sadan Co-operative Housing Society Ltd. vs.Co-operative Societies (2018 SCC OnLine Bom 1319)
18. The Society appears through its counsel and Mr. Nair who confirms that this proposal was now approved by the defendant no. 1 society. Mr. Nair appearing submitted that the defendant no. 1 stands by the agreement entered into with the plaintiff. Ms. Srikrishna on behalf of a large number of flat owners support the plaintiff's case. My attention was also invited to the reply filed by the defendant no. 1 society wherein society after setting out the background has submitted that it is the owner of land ad-measuring about 35 acres and subdivided into 162 plots. The society confirms that the building Gurukripa is not in good condition as it has been repaired several times and flat owners have now decided to go in for redevelopment. The deponent confirms the fact that a Development Committee was formed and the terms were agreed between the Development Committee and the plaintiff.
19. The affidavit sets out the various stages before the agreement was arrived at between the parties. The deponent, the Secretary of the society confirms that although the plaintiffs' proprietor was a managing committee member sometime in the past he was not a managing committee member at the time when the plaintiff was appointed as developer. The society has reconfirmed the various consents and permissions obtained and highlights the fact that at the Special General Body meeting of 15th March, 2009, the society resolved to support the redevelopment. In conclusion it is submitted that the erstwhile owners of the flat purchased by defendant nos. 2 to 11 had given their consent for redevelopment, likewise defendant, 12, 13 and 16 had also given their consent. It is only defendant no. 15 who has not given consent for redevelopment. It is thus contended that over 80% of the owners of Gurukripa building have given consent affidavits.
20. The Structural Audit Report records that slab and debris from the building had fallen from the building which required excessive repairs and it is better to redevelop it than repair it repeatedly and therefore it has been decided to redevelop the same. The office of the Deputy Registrar has also granted approval to the proposed redevelopment. The only condition imposed by the Deputy Registrar is that permissions for construction should be obtained from the competent authority and the society should not suffer financially. In the conclusion Mr. Nair submitted that the society is willing to perform the agreement in accordance with its terms subject to the plaintiff proceeding with the project and that the contesting defendants are merely trying to stall the redevelopment.
21. The motion is opposed by Mr. Ankhad submitted that the agenda of the meeting dated 1st March, 2009 itself shows that item no. 1 of the agenda was to seek further funds to complete the Sindhi Society Gymkhana IIIrd phase and to consider the letters of the members of Gurukripa flat owners requesting to issue NOC for forming separate society within the defendant no. 1 society and to consider and approve draft of Deed Assignment and Development of Land with Building. Mr. Ankhad submitted that this agenda itself indicates that the approval of the agreement between plaintiff and defendant no. 1 was not contemplated. According to Mr. Ankhad the remaining 438 out of the total 500 members may not have realised that the redevelopment agreement was subject matter of the agenda.
22. It is contended on behalf of defendants 2 to 13 and 16 by Mr. Ankhad that the society had filed a dispute in the Co-operative Court but no reliefs were granted. This suit is therefore a second attempt. Besides, the plaintiff lacks the expertise to carry out redevelopment work and the consent obtained from members in 2008 stand revoked. The defendant no. 1 society consists of 162 plots and 500 members whereas Gurukripa Building consist of only 42 members out of 500 members of whom only 62 members have given their consent. He submitted that there was no valid permission in favour of plaintiff from defendant no. 1 society and the permission granted does not hold good in view of the revocation of consent by some members. He therefore contended that there was no concluded contract. Furthermore he contended that if the proposal was allowed it would result in an FSI imbalance.
23. Mr. Ankhad reiterated the fact that 23 out of 42 had revoked their consent and post revocation the proposal received is a fresh proposal therefore the whole process should be undertaken once again and bids should be invited, so that the best offer can be accepted. He submitted that the plaintiff and the Secretary of defendant no.1 – society in collusion are trying to avoid such process. If bids were invited better offers will be obtained however in the guise of old consents a new proposal is being put through. The approval is of the year 2009 and is not valid today. Inviting my attention to paragraph 5 of the affidavit in reply at page 68 and 69 Mr. Ankhad submitted that this suit was collusive. No other offers were called for although amendments in the law made FSI fungible and the delay in calling for fresh proposals is against the interests of the society. According to Mr. Ankhad the resolution dated 1st March, 2009 and 25th April, 2010 was invalid they are non-est and void since Gurukripa requires 3/5th members to be present and only 62 members attended instead of 375 members. Mr. Ankhad would however contend thereafter that the decision taken at the meeting held on 1st June, 2008 was not a resolution of the society but only flat owners of one building on one plot and therefore cannot be binding on all flat owners in the society. It was submitted that the process of appointment of the plaintiff was contrary to redevelopment guidelines and Section 79-A of the MCS Act and the circular issued in that behalf by the Government of Maharashtra. It was further alleged that the plaintiffs' proprietor was a Managing Committee member himself and therefore the grant of the right in favour of the plaintiff was obviously collusive and cannot be sustained.
24. Mr. Ankhad relied upon the decisions of this court in -
(i) Mont Blanc Co-operative Housing Society Ltd. Vs. State of Maharashtra and Others (2007(4) Mh.L.J. 595);
(ii) Matru Ashish Co-op. Hsg. Soc. Ltd., Mumbai and Another Vs. State of Maharashtra and Others (2012(1) Mh.L.J. 126);
(iii) Makers Development Services Private Limited Vs. M. Visvesvaraya Industrial Research and Development Centre (2012) 1 SCC 735);
(iv) Samir Narain Bhojwani Vs. Aurora Properties and Investments (2018 SCC OnLine SC 1048); and
(v) Best Sellers Retail (India) Private Limited Vs. Aditya Birla Nuvo Limited and Others, along with connected matter (2012) 6 SCC 792).
25. I have heard the learned counsel for the parties at length. The principal submission on behalf of the contesting defendants represented by Mr. Ankhad is that the original proposal no longer exists. A new proposal has come in place. That the plaintiff was appointed in acceptance of the original proposal. Since the original proposal has undergone a change the original consent obtained and the resolution will not now be valid. The renewed proposal would require the parties to invite fresh offers and therefore the development agreement entered into is invalid. There is no justification in any relief being granted. Furthermore it is contended that the plaintiff does not have the financial wherewithal or the technical ability to carry out the proposed redevelopment. All of this in my view cannot be sustained in view of the fact that the consents were initially granted and at that time the contesting defendants were not even flat holders. The order of the Deputy Registrar of Co=operative Housing Societies in as many words enjoins upon the flat purchasers defendant nos. 2 to 11 to be bound by the decision taken by the society.
26. The Society's affidavit reaffirms the various resolutions passed on 1st March, 2009. The Society in its further affidavit has disclosed that the plots of land provided by defendant no. 1 society to individual members who had constructed buildings by themselves that in respect of these buildings municipal properties tax, upkeep were exclusive responsibility of members and buildings were individually managed by those occupants. The society only assists whenever required in affairs of maintenance. Furthermore it states that the 10 flat purchasers being defendant 2 to 11 are causing impediments.
27. The Municipal Corporation issued an Intimation of disapproval to the defendant no. 1 society. Thus the proposal of redevelopment of Gurukripa was forwarded in the name of defendant no. 1 society and that is how the IOD came to be issued in the name of defendant no.1. It therefore cannot be gainsaid by defendant nos. 2 to 11 that there was no consent of the society, or that the individual consents obtained of 42 members were of no consequence. It is in pursuance thereof on 28th July, 2010, that the defendant no. 1 society entered into Memorandum of Understanding (“MOU”) for redevelopment with the plaintiff. Perusal of the MOU reveals that it was executed pursuant to the decision of the Managing Committee of the society and with the consent of the Gurukripa flat owners. The Plaintiff has meanwhile disputed the allegation that the plaintiff's proprietor was a Managing Committee member. This allegation is also denied by the defendant society which has stated that the plaintiff was not in the managing committee at the meeting when the development agreement was agreed to be executed.
28. The MOU provides that for each flat in the building a new flat of 775 sq. ft. carpet area and one stilt parking will be provided. In addition a sum of Rs.2,82,000/- and Rs.2,00,000/- would also be paid over. So also premium for TDR payable to the society was provided for. In pursuance thereof the defendant no. 1 society has paid over a token amount of Rs.5,00,000/- towards the agreed total sum of Rs.1,18,44,000/- payable by the plaintiff to defendant no.1 in accordance with the agreement. On 9th August, 2010, 23 flat owners out of 42 wrote to the society seeking to withdraw their consent apparently because there was no unanimity amongst the flat owners, contending that some members of the committee had been coerced and intimidated by others. There was no progress over two years thereafter and members had doubts including as to whether guidelines of the Government in respect of redevelopment had been followed.
29. On 23rd August, 2010, about 25 members supported the redevelopment and they called for a General Body meeting of the flat owners. On or about 10th March, 2012 42 flat owners after its meeting resolved to forward a written confirmation that redevelopment should proceed as proposed. Only the terms were slightly modified which resulted in slight increase in the corpus amount. On 2nd May, 2012 the plaintiff accepted the proposal agreeing to provide 41 flat of 800 sq.ft each and one of 1001 sq.ft. In view of the new DCR each flat owner was to be given a corpus of Rs.3,00,000/- in addition Rs.20,000/- per month and Rs.25,000/- to one flat owner was agreed to be paid as rent for alternate accommodation. The plaintiff called upon all 42 flats owners to consent. Meanwhile requests were made to carry out repairs.
30. In the affidavit in rejoinder filed on behalf of the plaintiff on 4th August, 2016 the case of the contesting defendants has been denied. It is stated that the plaintiff has incurred substantial costs of about Rs. 20,00,000/- for repairs of the building. In addition Rs. 30,85,000/- had been paid to acquire 9 garages. The plaintiff has also paid Rs. 94,02,800/- towards stamp duty on the development agreement. All requisite permissions at the material time had been obtained. The deponent being the proprietor of the plaintiff has also stated that when he was appointed as developer he was not member of the managing committee. In other words it is an arms length agreement not entered into by collusively.
31. Exhibit 'OO' is the order of the Divisional Joint Registrar of Cooperative Societies passed in appeals filed by the society challenging the order of the Deputy Registrar of the Co-operative Societies. After dealing with all the facts the Order records that the purchasers of the flats are stepping into shoes of outgoing members and that the intending members have to abide by the bye laws and the rules under Section 72 of the MCS Act. There is no doubting the fact that any purchasers would be bound by the decision of the General Body. Thus although the society's appeal was dismissed respondents therein namely purchasers defendant nos. 2 to 11 were bound to abide by the decision of the General Body and in terms of bye laws.
32. When a query was put to Mr. Ankhad apropos the effect of Bye law 42 specifying the requisite number of member as 20, he submitted that the quorum was insufficient since 3/5th members were required to be present. Mr. Ankhad fairly admitted that although it did appear that 20 is the requisite number for quorum, in view of the fact that this was new proposal, a fresh process would have to be undertaken and the old consents and approval would be invalid. In my view this submission must be rejected in view of the fact that the society has gone ahead and reiterated the proposal and also executed the development agreement. Furthermore Bye-laws of the defendant no.1 produced before me today and in particular bye law no.42 of defendant no. 1 -society reads as follows :
“42. No business shall be transacted at any General Meeting except the declaration of a dividend or the adjournment of the meeting unless a quorum of members is present at the time when the meeting proceeds to business, and a quorum for any General Meeting shall be 3/5th of the total number of members of the Society for the time being or 20 members of Society whichever number is the lesser. No meeting shall become incompetent to transact business from the want of quorum arising after the chair has been taken” (emphasis supplied)
It is clarified that no meeting would become incompetent to transact business for want of quorum arising after the chair has been taken. Bye-Law 43 provides if within half an hour after the time appointed for the meeting quorum is not present, the meeting shall either be dissolved or stand adjourned to the same day in the next week at the same time and place. We are really concerned with bye-law 42 which requires only 20 members to be present. It is therefore not possible to accept the contention of Mr. Ankhad that the meeting and resolution(s) were bad for want of presence of 3/5th of the total number of members.
33. As regards the contention that the agenda items did not include the proposed redevelopment and the objection of Mr. Ankhad to the fact that out of 500 members only 62 members were present because they were unaware of the agenda items., I am of the view that item no. 2 to the agenda makes clear reference to the draft of Deed Assignment and Development of Land with building. That record clubbed with the fact that request dated 29th December, 2008 had been received from Gurukripa in my view clinches the issue in favour of the plaintiff, The agenda items were discussed and at Item no. 2 the full correspondence and resolution of the Managing Committee being held for around 5 years earlier and recommendation of the sub-committee dated 11th July, 2006 and the proposal from the Gurukripa dated 29th January, 2009 along with draft of Deed Assignment and Deed of Development with building which was unanimously approved by the Managing Committee and was recommended for approval of the General body which was accordingly carried out. It is therefore not possible to accept that contention in view of the explicit reference to the development agreement.
34. The contentions of Mr. Ankhad alluding to FSI imbalance overlooks of the fact that an IOD has already been issued in favour of the society. At every stage the society has confirmed the proposal and the contentions of the said defendants is not relevant since right from inception each plot was permitted to be constructed upon and the occupants were managing the affairs of each of the buildings put upon the plots.
35. The photographs of Gurukripa in these reports have also not been denied by the contesting defendants. In any event, the society has supported the plaintiff, it is only defendant nos. 2 to 11 and 13, 15 and 16 who are opposing the redevelopment for obvious reasons. An indemnity bond has also been provided by the Society to the Municipal Commissioner. On 2nd January, 2016 plaintiff obtained NOC stipulating fire protection and firefighting requirements from Mumbai Fire Brigade. Thus substantial progress was made despite the attempts at thwarting the Society's efforts to advance the project.
36. In Girish Mulchand Mehta (supra) reliance was placed on the observations of the single judge, albeit in an arbitration case, holding that the General Body of the Society is supreme and had taken a conscious decision to redevelop the suit building. The General Body had resolved to appoint a developer and this decision had not been challenged at all. The appellants were members of the society at the relevant time and were bound by the decisions. That it is well established that once a person becomes member of the co-operative society he loses his individuality with the society and has no independent rights except those given to him by the statute. Girish Mulchand Mehta (supra) also relies upon decision of the Supreme Court in Ramesh Himmatlal Shah vs. Harsukh Jadhavji Joshi [AIR 1975 SC 1470] which holds that the allotment of flat by housing society is coupled with rights to transfer right in the interest, but right enjoyed by the members is the species of the property namely right to occupy the flat. However in Girish Mulchand Mehta (supra) it was observed that the crucial question was whether members can contend that their rights in the flats were de hors the right of the society. The Deputy Registrar in that case justifiably rejected that stand.
37. One of the contentions raised by Mr. Ankhad and prima facie an attractive argument is that grant of relief in notice of motion would effectively mean grant of relief in suit. However in this connection it must be noted that the main defendant is the society and once society consents other defendants ought to follow that unless the majority is opposed to redevelopment. In the present case the majority is not opposed to redevelopment. It is the minority that is blocking progress and that situation cannot be allowed to prevail and frustrate the right of the remaining majority flat owners. In that view of the matter the argument that the suit itself would stand decreed if the motion is allowed cannot come in the way of the relief being granted. The plaint as filed seeks a declaration and mandatory orders of injunction. The motion effectively seeks similar reliefs. Defendant nos. 12, 14 and 15 have not filed any reply or written statement. Defendant nos. 2 to 11, 13 & 16 have filed their written statements and defendant nos. 1 and 7 have filed their affidavits in reply. Defendant no. 1 affirms the development agreement and states that defendant nos. 2 to 11 who are opposing the reliefs in the suit, are not staying in their respective flats but obviously have a vested interest in delaying the present redevelopment proposal. They are attempting to frustrate the plaintiff and other occupants of the building. Such a situation cannot be allowed to prevail.
38. It is pertinent to mention that the defendant no. 1- society is the confirming Party in the agreements between plaintiff and individual flat owners. Thus a majority of the flat owners have signed these agreements. Out of the remaining 16 flat owners, 10 are the defendant nos. 2 to 11 who are now attempting to derail the redevelopment. It must be noticed that maintenance bills/ notices addressed to 10 flat purchasers being defendant nos. 2 to 11 could not be served since flats were found locked. This has been confirmed by other residents of the building as well. The Society has further stated that the building is in a dilapidated condition, several damaged parts were repaired from time to time at the society's costs and at the cost of the plaintiff because of its deteriorating condition and therefore they need to shift to alternate accommodation for which plaintiff has agreed to pay rent. The society has further contended that the plaintiff has a good reputation and has redeveloped buildings in the very same society and the work is satisfactory and sans complaints. Effectively, the society confirms the case of the plaintiff and it is not that the defendant nos. 2 to 11 or contesting defendant can oppose the suit on the basis of their individual perception. Their individual perceptions of the plaintiffs' abilities and desires must be subservient to that of the majority of flat owners and that of the society. In that view of the matter, the contention that the suit itself may stand decreed is of no avail and cannot be a ground to deny relief.
39. In any event it is well established by now that the society is owner of the property viz. land and building. Members and flat owners are only share holders and are entitled to beneficial ownership. The members would have to fall in line. That must be achieved in the instant case since majority of the flat owners have consented. Read with the fact that society itself has stated that the aspects of redevelopment of the building comprised in the plots would be independent buildings, it is for Gurukripa flat owners to ensure that its redevelopment is undertaken with the blessing of the society and within the framework of law. Once the society approved the proposal by the requisite majority, it is not open for the minority individual members to obstruct the redevelopment process. I have no manner of doubt that the attempt by the members defendant nos. 2 to 11 opposing the redevelopment cannot come in the way of Gurukripa proceeding with the redevelopment agreement. Substantial efforts have been put in, consents have been obtained and Gurukripa building is poised to take further steps.
40. In Vasant Kheraj Bhanushali (supra) a Division Bench of this Court had occasion to consider the allegation that an assignment was in breach of the provisions of tripartite agreement. The earlier agreement had been cancelled because the scheme did not have support of 70% of occupants. In that behalf the finding of fact was that 70% occupants had consented. The Court observed that in law once consent is given it would be binding and in a project of that nature a shifting body of occupants may be influenced by rival builders and consent once obtained cannot be allowed to be revoked.
41. In yet another case of WP/10285/2009 the single Judge of this Court vide order dated 8th March, 2010 had considered contention of the respondent that a resolution passed was illegal because under bye-law no. 97, the Special General Body Meeting could not transact any business other than that mentioned in the notice. This aspect was considered and the notification issued under section 79-A of the Maharashtra Co-operative Societies Act was relied upon which required the registered architect on the panel of the Government to be selected and the procedure herein to be complied and if that was not done the decision of the society would be vitiated. This sought to address the concerns canvassed by Mr. Ankhad that procedure under section 79A would have to be followed as a safeguard for the members of the Society. This Court has held that reliance on the Government notification was misplaced. When the members of the society decided by a majority members that the society premises be developed in a particular fashion by a particular developer, it would be contrary to democratic principles which govern society if dissenting members decide to interfere and seeks to impose procedure not required by majority of the members. This would be counter productive and it has been held that the Government resolution issued pursuant to section 79-A is required to be followed by the society only when the members are unable to come to any decision by a resolution of their own. In the instant case there is no such impediment. There is no stumbling block.
42. In Maya Developers (supra) a single Judge of this Court has dealt at length with the case of redevelopment of the building owned by a Cooperative society. After dealing with the arguments preliminary issues such as jurisdiction to hear the suit, the Court observed that the case of the developers did not fall in any of the categories (a) to (e) of Section 91 (1). In paragraph 75 of the judgment the Court observed that opposition to the development was founded on interpretation of the 2009 directives of the State Government under section 79-A but held that the directive is merely recommendatory and does not have statutory force.
43. The Court held there is no contrary policy on these issues and that a study group had been appointed to consider complaints received at various levels which opined that it is necessary to frame regulations for redevelopment of buildings and therefore the direction was being issued under section 79-A. The Court has held that it is only the policy that has been set out and it is not mandatory. I find no reason to take a different view. In the facts at hand, even assuming that directives apply, the development agreement has been executed and much water has flowed. Merely because some members choose to take a second bite at the cherry, it is not possible to countenance such an attempt. Once the society supports the redevelopment with a healthy majority, the redevelopment must proceed and in accordance with law. In the instant case nothing has been shown to me to be in breach of the Act or rules. The very defendants who are spearheading the opposition are bound by the consents given by the erstwhile owners of the flats.
44. In Kamgar Swa Sadan Co-operative Housing Society (supra) a learned single Judge of this Court has had occasion to consider the effect of the Government directive issued under section 79-A of the MCS Act. The Court has concluded that the State Government is empowered to issue directions in public interest for the purpose of proper implementation of the Act and was required to be followed only when the members were unable to come to a decision on their own. Maya Developers (supra) has also been considered. In the process concluded that it is bound by the earlier decision.
45. I have considered the contentions of Mr. Ankhad in the light of the directives each of which deal with the following :
(i) Not taking members into confidence
(ii) Arbitrary appointment of contractors
(iii) Violation of provision of Co-operative Act, Rules, and Bye-Laws.
(iv) Lack of orderliness in the work of Architect and Project Consultant,
(v) Not planning redevelopment project report.
(vi) Not adopting procedure in finalizing tenders and
(vii) Lack of similarity in agreement with developers.
46. In Mont Blanc Co-operative Housing Society Ltd. (supra), the Division Bench of this court had occasion to consider Section 79A of the Maharashtra Co-operative Societies Act (24 of 1961) and observed that, the State Government may, in public interest and for the purposes of securing proper implementation of the provisions of the Act, issue directions to any class of societies and the societies shall be bound to comply. The section provides for penal action in the event of failure to comply. Mr. Ankhad had contended that the Apex Court had considered the effect of Section 79A and observed that the objects and bye-laws of the societies were considered to be paramount and that the power of the State Government to issue directions cannot be exercised to the prejudice of the societies’ interests.
47. In the case of Matru Ashish Co-op. Hsg. Soc. Ltd. (supra), a Division Bench of this court had followed the view taken in Mont Blanc Co-operative Housing Society Ltd. (supra) and reiterated that, power of the State Government cannot be exercised so as to be prejudicial to the interest of the society and the paramount consideration should be the interest of the society. I do not see how the judgments cited by Mr. Ankhad are of any assistance to the contesting defendants, inasmuch, as nothing has been shown to me as to how the re-development to be undertaken, pursuant to the suit Development Agreement, will prejudice the interest of the society, as a result of noncompliance with the directives issued under Section 79A of the Act.
48. We have already seen that the directives issued under Section 79A of the Act, in particular, “2009 Directives”, which have been pressed into service by Mr. Ankhad, have been held to be recommendatory and only in cases where there is no clear decision by the society on the mode of re-development and in the matter of appointment of Developers, this has been necessitated due to the large number of re-development projects having gone awry, as a result of not following guidelines and not having arms-length contracts in place. Those issues gave rise to numerous litigations. The “Directives of 2009” were thus issued in public interest to ensure a method for a broad structure to be put in place in cases where there is no clear-cut agreement or meeting of minds in the society and to prevent abuse of power by those member in the managing committee of the society.
49. In the facts of the case, the society has approved the re-development and the affidavit and written statement filed on behalf of the society clearly mentions that the society from its inception had a policy of letting each plot being developed by the members, who were entitled to set up buildings on those plots and maintenance of those plots and that the structures standing thereon also are the responsibilities of those, who construct the buildings. Accordingly, Gurukripa Building would be managed by those very members, who are holders of flats in Gurukripa Building. The society has passed a resolution in its General Body Meeting approving the re-development project. The society is satisfied that the quality of work carried on by the plaintiff was found satisfactory and there were no serious issues or allegations of collusion, but were bald allegations. Nothing has been shown to indicate differences of opinion amongst members of the society or its managing committee over the years.
50. Relying upon the Judgment in the case of Makers Development Services Private Limited (supra) , Mr. Ankhad sought to canvass the point that the plaintiff has not made out a prima facie case of balance of convenience and that the court should not interfere only because the property is very valuable one. That grant or refusal of injunction will have serious consequences and it is in that light of the matter that the court considered one of the prayers in the suit forming subject matter of the case before the Supreme Court, wherein the plaintiff had sought a decree that the defendants to permit them to continue construction on the suit land unhindered and to prevent the defendants from revoking or acting to obstruct or impede construction on the suit land.
51. On facts, it was found by a Single Judge and Division Bench of this court that the appellant before the Supreme Court, who was the plaintiff in the suit, had claimed that the High Court should have permitted them to carry out construction, since construction of about 80 ft. had been raised. That since the main suit was pending, it would not be proper for the Supreme Court to delve into the matter and arrive at a categorical finding one or the other way. The Supreme Court, therefore, considered the balance of convenience and observed that, the issue whether the defendants permitted the appellant to enter upon the suit land and carry on construction, is the matter to be decided in the main suit. That a Single Judge and Division Bench of this court had observed that, as the suit was ultimately dismissed, it would create enormous difficulties for the defendant using the land or plot freely and without any difficulty. The court found that if the construction was allowed to proceed, the defendant could not use the land in a different manner without undertaking exercise of demolition or whatever was constructed and what the plaintiff was seeking was not a prohibitory order, but was a positive mandatory injunction.
52. I do not find that this decision would be of any assistance to Mr. Ankhad in the facts of the present case. I am not concerned with value of the property in these proceedings but the valuable rights of the members to better and safe housing over a longer period of time rather than short extensions of the building's life through intermittent repairs. The balance of convenience is clearly in favour of the plaintiff and defendant no. 1. The defendants, who were obstructing performance of the Development Agreement, are, at best, the shareholders in the society but are in a minority. About more than 80% of the members are said to be in favour of the plaintiff proceeding with redevelopment. The society is the owner of the land and the building title to the entire property vests in the society. The individual members are beneficial owners and must follow the majority decision. The society having approved the re-development and having unanimously resolved to appoint the plaintiff, the balance of convenience is clearly in favour of the plaintiff. The contesting defendants cannot claim to be prejudiced in the present case, since defendant Nos.2 to 11 are not even residing in the suit flats, which fact has not been disputed by the said defendants. The factual matrix in Makers Development Services Private Limited (supra) would certainly not have justified the grant of mandatory relief sought, but, in the present case, such a relief is more than justified and is not shown to be causing any prejudice to the society.
53. In the case of Best Sellers Retail (India) Private Limited (supra) , Mr. Ankhad sought to rely upon the observations of the Supreme Court that, it is necessary to consider (i) whether there is a prima facie case in favour of the plaintiff; (ii) whether the balance of convenience is in favour of passing the order of injunction; and (iii) whether the plaintiff would suffer irreparable injury, if an order of injunction is not passed. It is a settled principle of law that, even where prima facie case is in favour of the plaintiff, the court will refuse temporary injunction, if the injury suffered by the plaintiff on account of refusal of temporary injunction would not be irreparable. By quoting the case of Dalpat Kumar Vs. Prahlad Singh (1992) 1 SCC 719), the Supreme Court held that, satisfaction that there is a prima facie case by itself is not sufficient to grant injunction and that the court must be satisfied that non-interference by the court would result in irreparable injury to the party seeking relief and that there is no other remedy available to the party, except the one to grant injunction. The injury must also be material one, which cannot be adequately compensated in terms of damages.
54. I am concerned here with the rights of the members of the society to get safe housing in lieu of a building that has been constructed in or around 1948 when the defendant no. 1 is seen to have been registered. and which is certified to require very serious repairs and re-development is preferred over such repairs. In view of the above, I am of the view that this is a fit case where mandatory order must be granted, in view of the fact that irreparable harm and injury is likely to be caused to the plaintiff and defendant No.1-Society.
55I find no reason, nothing exceptional in this case which requires me to consider taking a different view. The Society is obviously required to comply with all the requirements and although Mr. Ankhad has attempted to show the factual aspects were different in this case. I am unable to accept his submission. The absence of a fresh proposal in Girish Mulchand Mehta or the fact that in Bhanushali consents were irrevocable whereas in the instant a new proposal was made to which members had not consented are not submissions that carry Mr. Ankhad's case f orward. Furthermore Bhanushali was a case of Slum Redevelopment Authority in which it was common place for rival builders to attempt to stall the process in their own interest. Whereas in the present case the factual matrix would not invite the application of Bhanushali.
56. In the present case I find that the directive under section 79-A is of no consequence and cannot derail / alter of the society's plan to proceed with the redevelopment under the agreement already signed and executed and affirmed by majority of the members. The directive is clearly not mandatory and is not attracted in the facts of the case. This is not a case which calls for application of the State directive. There is also no challenge to the order of the Joint Dy, Registrar which clearly points to the fact that all members of the society including defendant nos. 2 to 11, 15 and 16 and all those who are opposing the redevelopment process are bound by the General Body resolution and in accordance with the bye-laws.
57. In Samir Narain Bhojwani (supra), the issue pertaining to moulding of reliefs came to be considered. In fact, the mandatory order directed the appellant to handover 8 flats and 16 parking places to the plaintiff. The order has placed reliance on the powers to mould reliefs in accordance with the changed circumstances and in trying to do complete justice. The Division Bench approved of the view, however, the Supreme Court found that the High Court had not considered that the arrangement was between the plaintiff and defendant No.1 was entered and it could not be forced upon defendant No.2, who had a separate agreement with defendant No.1. In that sense, the Supreme Court found that the Division Bench committed an apparent error in applying principle of moulding the relief, which could, at best, be resorted to, in the words of the Supreme Court, “at the time of consideration of final relief in the main suit and not at an interlocutory stage”. The nature of order passed aga
Please Login To View The Full Judgment!
inst the appellant is undeniably a mandatory order at an interlocutory stage. 58. I may mention here that the Supreme Court went on to consider the circumstances warranting grant of interlocutory mandatory injunction and recalled the decision of this court in Dorab Cawasji Warden Vs. Coomi Sorab Warden (1990) 2 SCC 117), which analyzed certain legal precedents. In that case, the court set out certain guidelines, which may be usefully quoted:- (1) The plaintiff has a strong case for trial. That is, it shall be of a higher standard than a prima facie case that is normally required for a prohibitory injunction; (2) It is necessary to prevent irreparable or serious injury, which normally cannot be compensated in terms of money; (3) The balance of convenience is in favour of the one seeking such relief. 59. The submission of Mr. Ankhad that relief if any granted in the motion could effectively mean final relief in the suit cannot entail rejection of the motion. In Deoraj vs. State of Maharashtra and Ors. (2004) 4 SCC 697) the Supreme Court observed that grant of interim relief based on discretion of the Court would be justified where withholding of interim relief would result in the main matter itself being rejected. However, the Court observed that this should be done in rare cases in compelling circumstances. Deoraj's case pertains to elections in a Co-operative Society and the Court observed that by the time the matter comes up for final hearing there may be nothing left to grant a relief and for grant of such relief there shall be a very strong prima facie case, considering the balance of convenience and irreparable injury may forcefully tilt the balance and the Court may grant relief, although it amounts to granting final relief. 60. In the present case defendant no. 1 having supported the plaintiff' case, defendant no. 1 obviously could be entitled to a decree on admission since all the flat owners are bound by the resolution of the society, including defendant nos. 2 to 11. In that view of the matter the grant of relief cannot be faulted on the ground that it could amount to granting final relief. No other issue remains to be considered because if these reliefs are to be refused on the ground that the suit will have to be heard, the occupants of Gurukripa may be exposed to grave danger. In these circumstances, it is their case that the building has considerably deteriorated and repeated repairs have been necessitated. 61. I am of the view that, in the present case, the plaintiff has a very strong case much beyond a prima facie case. The building having been found to be in a deteriorating condition, it is necessary to prevent mishaps and to abide by the will of the majority of the flat owners and failure to do that may result in irreparable or serious injury, which cannot be compensated in monetary terms; especially considering that, in realistic terms, the final disposal of the suit is not possible in the midst of the project. The balance of convenience is also clearly in favour of the society. With these facts, I am of the view that the grant of the relief in the notice of motion is justified. 62. On the other hand, if we consider the case of the defendants, the rights of the defendants are extremely limited and there is virtually no prejudice that can be caused to the defendants, who are bound by the decision of the society even from the inception of their membership by virtue of the order of the Deputy Registrar, which holds the field. The requirement of compliance with Section 72 of the Co-operative Societies Act cannot be ignored. 63. In that view of the matter, the balance of convenience justifies the grant of equitable relief albeit being mandatory in nature. In Dorab Cawasji Warden (supra), the court had also relied upon the following dictum in Halsbury’s Laws of England (4th Edition, Volume 24, Paragraph 948), which observes that, “A mandatory injunction can be granted on an interlocutory application as well as at the hearing, but, in the absence of special circumstances, it will not normally be granted. However, if the case is clear and one, which the court thinks ought to be decided at once, or if the act done is a simple and summary one, which can be easily remedied, or if the defendant attempts to steal a march on the plaintiff, a mandatory injunction can be granted on an interlocutory application.” I am of the view that, in the facts of the case, the contesting defendants have attempted to steal a march on the plaintiff and seeking to thwart performance of a valid and subsisting Development Agreement between the plaintiff and defendant No.1-Society. These special circumstances are that the majority of the members have opted for re-development of the building, which is not in a good condition, as evident from the fact that repairs are regularly being carried out by this very plaintiff. The report of the Structural Auditor is also in favour of the plaintiff and also favours re-development and certifies the building to be in a dilapidated condition and that it would be better to redevelop, rather than repair it. Thus, I do not find any impediment in permitting the relief, though mandatory in nature. 64. In that view of the matter the plaintiff must succeed. The motion is allowed in the following terms : (i) The Notice of Motion is made absolute in terms of prayer clause (a), (b) and (d). The plaintiff and defendant no. 1 shall give the other defendants at least twelve weeks to vacate their respective premises. (ii) In the event of non-compliance by the defendants or any of them, liberty to apply for appointment of the Court Receiver, High Court, Bombay is granted. (iii) No costs. At this stage Mr. Ankhad seeks stay of the operation of the order. In view of the fact that 12 weeks time is granted to vacate the premises there is no occasion to consider stay of operation of this order. The request is declined.