Full Judgment Text
1
NONREPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 1222 OF 2022
[arising out of SLP (CIVIL) No. 21964 of 2017]
KAMGAR SWA SADAN COOPERATIVE
HOUSING SOCIETY LTD. … APPELLANT
v.
MR. VIJAYKUMAR VITTHALRAO
SARVADE & ORS. … RESPONDENTS
J U D G M E N T
ABHAY S. OKA, J.
Leave granted.
1. The respondent nos.1 to 11 are the original plaintiffs. The
appellantSociety is the original defendant no.1. The
respondent nos.12 to 25 are the office bearers of the appellant
Signature Not Verified
Digitally signed by
Anita Malhotra
Date: 2022.02.08
18:39:52 IST
Reason:
Society. The respondent nos. 26 to 29 are the
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developers/builders. The respondent nos.30 to 38 are officials
and/or the members of the High Power Committee constituted
by the Government of Maharashtra. The last respondent is the
Project Consultant and Architect. It is not in dispute that the
respondent nos.1 to 11 (original plaintiffs) are the members of
the appellant, a Cooperative Society duly registered under the
Maharashtra Cooperative Societies Act, 1960 (for short “the
said Act of 1960). The dispute is about the redevelopment of the
buildings occupied by the members of the appellantSociety in
accordance with Regulation 33(7) of the Development Control
Regulations for Greater Mumbai, 1991 applicable to the
Municipal Corporation of Greater Mumbai. In the Special
th
General Body Meeting of the appellantSociety held on 12
February 2011, a resolution was passed resolving that the
tender submitted by the respondent no.26 for the
redevelopment of the property of the appellantSociety should
be accepted. It is the case of the appellantSociety that the
resolution was unanimously passed.
3
nd
2. On 2 December 2012, a Special General Body Meeting of
the appellantSociety was held in which a resolution was
unanimously passed appointing the respondent no.27 as the
developer. The respondent no.27 is stated to be a sister concern
of the respondent no.26. It is alleged that out of 240 members
of the appellantSociety, 165 were present in the meeting. An
th
agreement for development was accordingly executed on 24
December 2012 by the appellantSociety. The agreement
provided for allotment of premises in the redeveloped buildings
free of cost on ownership basis to all the eligible members of the
appellantSociety. In addition, the respondent no.27 agreed to
provide a corpus of Rs.5,00,000/ (Rupees Five Lakhs) per
th
member to the appellantSociety. On 27 December 2012, the
Jurisdictional Assistant Registrar of Cooperative Societies
accorded permission to the appellantSociety to redevelop the
th
property. On 7 January 2013, the Assistant Registrar granted
further permission to the appellantSociety to redevelop the
property by appointing the respondent no.27 as the developer.
The said permission refers to a report submitted by the
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Authorized Officer which recorded that all the 165 members of
the appellantSociety who were present in the meeting held on
nd
2 December 2012 supported the proposal for redevelopment.
The respondent nos.2, 3 and 8 along with some other
3.
members of the appellantSociety filed a revision application
under Section 154 of the said Act of 1960 for challenging the
th th
orders/permissions dated 27 December 2012 and 17
January 2013 issued by the Assistant Registrar of Cooperative
Societies. The revisional authority allowed the revision
th
application by the order dated 14 May 2013. The order of the
revisional authority was challenged by the appellantSociety by
filing a Writ Petition in the Bombay High Court. By the order
th
dated 11 December 2013, the Bombay High Court stayed the
order of the revisional authority. The said interim order of
Bombay High Court was challenged by the respondent nos.2, 3
and 8 before this Court. While dismissing the Special Leave
Petition, this Court directed the Bombay High Court to
expeditiously decide the Writ Petition. In the pending Writ
Petition, the respondent no.2 filed an interlocutory application
seeking an interim order of status quo as regards the
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redevelopment of the property. The High Court declined to
grant any interim relief on the said application.
4. The respondent nos.1 to 11 filed the suit – subject matter
of this Civil Appeal in the City Civil Court at Mumbai. The suit
th
was filed on 20 February 2016. The respondent nos.1 to 11
contended in the suit that the resolutions passed in the Special
th nd
General Body Meetings dated 12 February 2011 and 2
December 2012 were illegal being contrary to provisions of law
and the Guidelines framed by the State Government vide the
rd
Government Resolution dated 3 January 2009. A prayer was
made for a decree of declaration that the said resolutions were
illegal, null and void. Another prayer was made for a
declaration that the tender process conducted by the appellant
Society for appointing a developer for redeveloping its property
was illegal. A prayer was also made for directing the appellant
Society to conduct a fresh tender process. Interim relief was
claimed in the suit for restraining the concerned defendants
from granting further permissions to the appellantSociety. The
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Trial Court did not grant adinterim relief to the respondent
nos.1 to 11.
5. The present appellantSociety and some other defendants
took out a Notice of Motion in the suit contending that the
jurisdiction of the Civil Court was barred in view of Section 91
of the said Act of 1960 and the Cooperative Court will have
exclusive jurisdiction to entertain and decide the dispute in the
suit. It was also alleged that the suit was barred by limitation.
The said respondents invoked Section 9A of the Code of Civil
Procedure, 1908 (for short “CPC”) and prayed that both the
issues be decided as preliminary issues before deciding the
Notice of Motion for temporary injunction. The prayer was
contested by the respondent nos.1 to 11. Two preliminary
issues on jurisdiction and bar of limitation were framed by the
Trial Court. The learned Trial Judge after hearing the parties,
held that the suit was not barred by Section 91 of the said Act
of 1960 and was maintainable in Civil Court. He held that the
suit was within limitation. It is this order which was subjected
to a challenge by filing a Civil revision application by the
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appellantSociety. The High Court dismissed the revision
application. Therefore, the present appeal has been filed for
challenging the orders of the Trial Court and High Court.
6. We have heard the learned counsel appearing for the
parties. Mr. Shyam Divan, the learned Senior Counsel
submitted that in view of the repeal of Section 9A of the CPC as
applicable to the State of Maharashtra and a recent decision of
this Court in the case of Nusli Neville Wadia v.
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Ivory Properties & Ors. , the issue of limitation could not be
decided as a preliminary issue. The learned Senior Counsel
submitted that the finding recorded by the Trial Court on the
issue of limitation will have to be set aside. He submitted that
issue of limitation will have to be decided after the parties
adduce evidence. He would submit that in any case, the
respondent nos.1 to 11 will not be entitled to the benefit of
Section 14 of the Limitation Act, 1963 (for short “the Limitation
Act”). He also invited our attention to additional documents
placed on record along with I.A.No.22493 of 2021 and
1
2020 (6) SCC 557
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submitted that the buildings of the appellantSociety are in
extremely dilapidated condition and a notice to that effect has
been served upon the appellantSociety by the Municipal
Corporation of Greater Mumbai. He submitted that except for
the respondent nos.1 to 11, more than 150 members of the
appellantSociety have consented to the redevelopment of the
property by the respondent no.27developer. He submitted that
it is only because of the objection raised by only 11 members
who are the plaintiffs that the entire redevelopment work has
been stalled. The learned counsel appearing for the respondent
no.27 supported the submissions of the learned Senior Counsel
appearing for the appellantSociety. The learned counsel
appearing for the original plaintiffs urged that the findings
recorded by the Trial Court on both the issues are fully justified
as the original plaintiffs will be entitled to benefit of Section 14
of the Limitation Act and the bar of Section 91 of the said Act of
1960 will not be attracted.
After the submissions were heard, we called upon the
7.
parties to explore a possibility of an amicable solution
9
considering the present status of the buildings. We also
permitted the appellantSociety and the respondent no.27 to file
affidavits/undertakings for placing on record their offer to the
respondent nos.1 to 11 and other members of the appellant
Society. The respondent no.27 stated that initially, the offer
was to allot premises admeasuring 429.88 sq. ft. of carpet area
plus 20.12 sq. ft. of service slab to those eligible members of the
appellantSociety who were occupying residential tenements.
The respondent no.27 in view of subsequent enhancement in
Floor Space Index (FSI), offered to allot residential premises
admeasuring 450 sq. ft. of carpet area (excluding the service
slab) to those eligible members who were occupying residential
premises. The respondent no.27 offered premises admeasuring
350 sq. ft. of carpet area to those eligible members of the
appellantSociety who were occupying commercial premises.
The respondent no.27 also offered to pay shifting charges as
well as requisite monthly amounts for acquiring temporary
accommodation on rental basis. The respondent no.27 has also
offered to create a substantial corpus fund for the benefit of the
appellantSociety and its members. The respondent no.27 has
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filed affidavits/undertakings on record containing their offer.
Even the appellantSociety has filed an affidavit/undertaking
reiterating the offer made by the respondent no.27. The
submission of the learned counsel appearing for the original
plaintiffs is that the respondent no.27 has no experience of
developing properties in Mumbai. He submitted that
considering the additional FSI which is now made available, the
area offered by the respondent no.27 to the members of the
Society should be much more than what is set out in the
affidavits filed on record. In short, though the plaintiffs are
accepting that redevelopment of buildings of the appellant
Society is necessary, they are not willing to accept the offer
made by the appellantSociety and the respondent no.27. The
th
respondent no.27 filed an affidavit on 17 January 2021 by
which the area of residential premises offered to the members
was increased to 460 sq. ft. of carpet area.
8. Firstly, we are dealing with the submissions on the merits
of the impugned orders. Section 9A was introduced by the Code
of Civil Procedure (Maharashtra Amendment) Act, 1977 which
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provided that if at the hearing of an application for grant of
interim relief in a suit, an objection is raised by a defendant to
the jurisdiction of the Court to entertain the suit, the Court
shall proceed to determine at a hearing of such application, the
issue of jurisdiction as a preliminary issue before granting or
setting aside the order granting interim relief. Under Section 3
of the Code of Civil Procedure (Maharashtra Amendment)
Ordinance, 2018, Section 9A was deleted. But it was provided
that an issue of jurisdiction already framed by invoking Section
9A will be treated as an issue framed under Order XIV of CPC.
The said Ordinance was replaced by an Act. The Act repealing
Section 9A underwent an amendment by the Code of Civil
Procedure (Maharashtra Amendment) (Amendment) Act, 2018
by which Section 3 of the earlier repealing Act was substituted
th
with effect from 27 June 2018 which provided that if on the
date of deletion of Section 9A, an issue under Section 9A has
already been framed, the same shall be decided as if Section 9A
was not deleted. The amendments referred above clearly
envisage that if the Court had ordered to decide an issue as a
preliminary issue before the date of deletion of Section 9A, the
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same shall be decided by the Court as a preliminary issue. In
th
the present case, the issue was decided prior to 27 June 2018
when Section 9A was repealed.
9. In the case of Nusli Wadia ( supra), this Court held that
the expression “jurisdiction of the Court to entertain such suit”
used in Section 9A by holding that under Section 9A, the issue
of jurisdiction to entertain the suit has to be decided without
recording evidence. In paragraphs 49,50,54,56,88 and 89 of
the aforesaid decision, this Court held thus:
Since the expression used in Section 9
“49.
A as incorporated in Maharashtra, is
“jurisdiction to entertain” that is in a
narrower sense and its purport cannot be
taken to be comprehensive as laid down
in Foreshore Coop. Housing Society
Ltd. (supra).
50. When we consider what colour
expression “jurisdiction” has in Section 9A,
it is clearly in the context of power to
entertain, jurisdiction takes colour from
accompanying word “entertain” i.e. the court
should have jurisdiction to receive a case for
consideration or to try it. In case there is no
jurisdiction, court has no competence to give
the relief, but if it has, it cannot give such
relief for the reason that claim is timebarred
by limitation or is barred by the principle of
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res judicata or by bar created under any
other law for the time being in force. When a
case is barred by res judicata or limitation, it
is not that the court has no power to
entertain it, but it is not possible to grant the
relief. Due to expiry of limitation to file a suit,
extinguishment of right to property is
provided under Section 27 of the Limitation
Act. When court dismisses a suit on the
ground of limitation, right to property is lost,
to hold so the court must have jurisdiction to
entertain it. The court is enjoined with a duty
under Section 3 of the Limitation Act to take
into consideration the bar of limitation by
itself. The expression “bar to file a suit under
any other law for the time being in force”
includes the one created by the Limitation
Act. It cannot be said to be included in the
expression “jurisdiction to entertain” suit
used in Section 9A. The court has to receive
a case for consideration and entertain it, to
look into the facts constituting limitation or
bar created by any other law to give relief, it
has to decide the question on merits; then it
has the power to dismiss the same on the
ground of limitation or such other bar
created by any other law. Thus, the meaning
to be given to jurisdiction to entertain in
Section 9A is a narrow one as to
maintainability, the competence of the court
to receive the suit for adjudication is only
covered under the provisions. The word
“entertain” cannot be said to be the inability
to grant relief on merits, but the same relates
to receiving a suit to initiate the very process
for granting relief.”
(underline supplied)
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“54. What is intended by Section 9A of the
Code of Civil Procedure, 1908 (CPC) is the
defect of jurisdiction. It may be inter alia
territorial or concerning the subjectmatter.
The defect of jurisdiction may be due to
provisions of the law. In Raghunath
v. AIR 1958 SC 827, the
Das Gokal Chand
execution of award of the decree was
dismissed by the Court on the ground that
decree was a nullity. The Court had no
jurisdiction to pass a decree of the partition
of agricultural land. It held that defect of the
jurisdiction in the court that passed decree
became attached to decree itself as dismissal
of the suit was on account of the defect of
jurisdiction. Thus, in our considered opinion,
it is only the maintainability of the suit before
the court which is covered within the purview
of Section 9A CPC as amended in
Maharashtra.
(underline supplied)
“56. Within the ken of provisions of Section
9A, CPC jurisdiction of the court to entertain
the suit has to be decided without recording
of evidence. Recording of evidence is not
contemplated even at the stage of framing
issue under Order 14 Rule 2 much less it can
be allowed at the stage of grant of injunction,
it would be the grossest misuse of the
provisions of the law to permit the parties to
adduce the evidence, to prove facts with
respect to a preliminary issue of jurisdiction
to entertain a suit. In case it is purely a
question of law, it can be decided within the
purview of Section 9A CPC as applicable in
Maharashtra. The scope of Section 9A is not
broader than Order 14 Rule 2(2) CPC. The
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scope is a somewhat limited one. Two full
fledged trials by leading evidence are not
contemplated in CPC, one of the preliminary
issue and another on other issues. Until and
unless the question is purely of law, it cannot
be decided as a preliminary issue. In our
opinion, a mixed question of law and fact
cannot be decided as a preliminary issue,
either under Section 9A or under Order 14
Rule 2 CPC. Before or after its amendment of
CPC concerning both provisions, the position
is the same.”
“88. Given the discussion above, we are of
the considered opinion that the jurisdiction
to entertain has different connotation from
the jurisdictional error committed in exercise
thereof. There is a difference between the
existence of jurisdiction and the exercise of
jurisdiction. The expression “jurisdiction” has
been used in CPC at several places in
different contexts and takes colour from the
context in which it has been used. The
existence of jurisdiction is reflected by the
fact of amenability of the judgment to attack
in the collateral proceedings. If the court has
an inherent lack of jurisdiction, its decision
is open to attack as a nullity. While deciding
the issues of the bar created by the law of
limitation, res judicata, the court must have
jurisdiction to decide these issues. Under the
provisions of Section 9A and Order 14 Rule
2, it is open to decide preliminary issues if it
is purely a question of law not a mixed
question of law and fact by recording
evidence. The decision in
Foreshore Coop.
(supra) cannot be said to
Housing Society Ltd.
16
be laying down the law correctly. We have
considered the decisions referred to therein,
they are in different contexts. The decision of
the Full Bench of the High Court of Bombay
in Meher Singh (supra) holding that under
Section 9A the issue to try a
suit/jurisdiction can be decided by recording
evidence if required and by proper
adjudication, is overruled. We hold that the
decision in Kamalakar Eknath
Salunkhe (supra) has been correctly decided
and cannot be said to be per in curiam , as
held in Foreshore Coop. Housing Society
Ltd. (supra).”
(underline supplied)
“89. Section 2 of the Maharashtra Second
Amendment Act, 2018 which provides that
where consideration of preliminary issue
framed under Section 9A is pending on the
date of commencement of the CPC, the said
issue shall be decided and disposed of by the
court under Section 9A as if the provision
under Section 9A has not been deleted, does
not change the legal scenario as to what can
be decided as a preliminary issue under
Section 9A CPC, as applicable in
Maharashtra. The saving created by the
provision of Section 2 where consideration of
preliminary issue framed under Section 9A
is pending on the date of commencement of
the Code of Civil Procedure (Maharashtra
Amendment) Act, 2018, can be decided only
if it comes within the parameters as found by
us on the interpretation of Section 9A. We
reiterate that no issue can be decided only
17
under the guise of the provision that it has
been framed under Section 9A and was
pending consideration on the date of
commencement of the (Maharashtra
Amendment) Act, 2018. The reference is
answered accordingly.”
In the facts of the case, the appellantSociety and certain
10.
other defendants led evidence on the preliminary issue by filing
an affidavit in lieu of examinationinchief of one Mr. Sanjay
Rajaram Mohite. The original defendant nos.16 and 17 were
examined as witnesses. Thus, in this case, for deciding the
issue of limitation evidence was required to be recorded.
Hence, it was not open for the Trial Court to examine and
decide the issue of the bar of limitation by invoking Section 9A
of CPC.
By filing the present suit in February 2016, the original
11.
th
plaintiffs have questioned the resolutions dated 12 February
nd
2011 and 2 December 2012 passed in Special General
Meetings of the appellantSociety. The plaintiffs also challenged
the tender process conducted by the appellantSociety way
back in the year 2011. The plaintiffs were aware of both the
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resolutions at all relevant times as some of them were present
in the meetings. Some of them filed aforesaid revision
application in the year 2013 for challenging the permissions
granted on the basis of the said resolutions. The revision
application preferred by the respondent nos.2, 3 and 8 was
th
allowed on 14 May 2013. The said order was stayed by the
th
High Court on 11 December 2013. The Special Leave Petition
preferred by the respondent nos.2, 3 and 8 against the order of
th
stay was dismissed by this Court on 7 March 2014.
12. The respondent nos.1 to 11 waited till February 2016 to
file the suit. The said respondents relied upon Section 14 of the
Limitation Act to bring their suit within limitation. From the
bare facts pleaded in the plaint, prima facie, there is a serious
doubt whether the benefit of Section 14 can be granted to the
respondent nos.1 to 11. However, the issue can be finally
decided based on the evidence adduced by the parties.
13. Thus, in normal course, by setting aside findings of the
Trial Court and the High Court on the issue of limitation, this
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Court would have directed the Trial Court to decide the issue of
limitation along with the other issues. The learned Senior
Counsel appearing for the appellantSociety has fairly stated
that this Court need not go into the question of maintainability
of the suit.
14. Now, we will deal with the offer made by the appellant
Society as well as by the respondent no.27 and the response of
the respondent nos.1 to 11 to the said offer. Mr. Shripal
Babulal Jain, the managing partner of the respondent no.27
th
has filed an affidavit/undertaking on 17 January 2021.
Paragraphs 4 to 10 of the said affidavit reads thus:
“4. The correct facts in this regard as under:
i) FSI as per Old policy (DCR – 1991) u/s
33(7) + 33(24): FSI.
ii) FSI as per New Policy (DCPR 2034)
u/s 33(7) with 80% incentive on rehab
area: 4.31 FSI.
Here it may also be noted that:
Incentive FSI as per old Policy (DCR
1991) was 50% u/s 33(7) plus u/s
33(24) parking FSI by providing public
parking which would be roughly 25% of
the Rehab builtup area. Thus, total
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incentive on rehab area would be
around 75%.
Incentive FSI as per New Policy (DCPR
2034) u/s 33(7) is 80% however
parking FSI would not be available as it
is restricted upto 4 FSI.
A copy of the Architect certificate is
annexed hereto and marked as
Annexure A/1 (Page no.9 to ). A copy of
the relevant portion of DCR 1991 is
annexed hereto and marked as
AnnexureA/2 (Page No.10 to 13). A
copy of the relevant portion of DPCR
2034 is annexed hereto and marked as
AnnexureA/3 (page no.14 to 20). A
copy of the relevant portion of policy
and circular dated 8.7.2021 is annexed
hereto and marked as AnnexureA/4
(Page No.21 to 31)
.
5. The size of new premises: (Residential)
Existing Area occupied by members:
115 to 180 sq. ft.
Eligible as per Old Policy (DCR 1991):
405 sq. ft. carpet area
Offered earlier: 429.88 sq.ft
Eligible as per new policy (DCPR 2034):
425.25 sq. ft. carpet area.
Revised offer by Development: 450 sq.ft.
6 . I would also like to point out the following
further facts and additional burden to be
borne by the developer :
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i) The construction cost has increased
upto approx. 50% as compared to in the
year 2013 when the development
agreement was undertaken.
ii) Rs.10.60 crores approx. additional cost
towards the addl. 20.12 sq.ft. carpet
area to 225 Residential members. Total
4527 sq.ft. and construction cost at
Rs.23450/ per sq.mt. (cost with all
premiums). Additional premium on
additional construction is required to be
paid to Municipal Corporation MCGM.
iii) Rs.15 crores appx. towards GST
charges on construction cost which
cannot be adjusted against sales
st
revenue. (As from 1 April 2019 Input
Tax Credit is not allowed for Developers)
GST is also addl. burden as this was
not contemplated in the year 2013.
iv) There is 450.59 sq.mts. set back on plot
and thus only 3142.41 sq.mts. area
remains resulting into planning
constraints and high density on plot for
rehab and sale area leading to
increasing in height of rehab building
and thereby construction cost.
v) It also requires to be noted that
Developer has also to bear the following
additional costs over and above the
rehab unit cost:
a) Each member is being paid Rs.5 lakh
over and above the rehabilitation
22
unit, out of which Rs.1.25 lakh is
already paid in 2013.
(Total corpus fund Rs.12.30 crores of
which Total of Rs.3.07 crores is
already paid)
b) 2000 sq.ft. fitness centre and
gymnasium furnished with fitness
equipment’s is to be provided by the
developer to the Society.
c) 215 sq.ft. carpet area of Air
conditioned Society office, is to be
provided.
d) Security cabin and common toilets
are also to be provided.
e) 3 flats of 450 sq.ft. carpet area as
against 3 rooms of Society and
godown of equivalent carpet area in
lieu of existing godown.
f) A deity place in new rehabilitation
building.
vi) An amount of approximately Rs.20
crores is already invested by the firm
since 2013, resulting into cost of
investment and interest costs.
vii) As against which the Society is enjoying
the fixed deposit of amounts
paid/deposited and interest therein
since 2013.
viii) It is also required to be considered that
the rehabilitation building is to be
23
constructed in the front side facing the
Mahadeo Palav Marg on North side and
the sale component building on the rear
side on south side.
ix) The interest of the Society is also well
protected, as Developer has already
provided a Security deposit of Rs.5
crores at the time of tender. And as per
New DCPR 2034 vide circular dated
05.03.2021 of Maharashtra
Government, a Developer is bound to
give Security Deposit / Bank Guarantee
of 10% of Rehab Construction cost i.e.
approx.12,282 sq. mtr. x 30,250
construction cost as per Ready Recknor
of Mumbai for 202122 total of
Rs.37,20,00,000/ x 10% i.e.
Rs.3,72,00,000/.
I say that as per the revised proposal as
7.
stated in Undertaking dated 7.1.2022,
the occupiers are already getting more
area than what is agreed in the
development agreement and also more
than what they are eligible as per the
new Policy of DCPR 2034.
I say that as per the calculations and
8.
deliberations undertaken by the
partners of the firm, if the area of the
rehab unit is increased from the revised
proposal of 450 sq.ft. carpet area to
residential members and 300 sq.ft.
carpet area to nonresidential members,
th
as stated in the Undertaking dated: 7
January 2022, the project would not be
financially feasible.
24
I say that as per Affidavit dated
9.
7.1.2022 filed on behalf of the Society
more than 60% members having already
given the consent for new proposal of
the Developer. The objections by
Vijaykumar VitthalRao Sarvade and
other 11 members is not bonafide.
I state that MHADA has also
10.
issued NOC to respondent no.27 on
3.11.2021. A copy of the NOC issued by
MHADA to Res.27 is annexed hereto
and marked as Annexure – A/5 (Page
No.32 to 38).”
15. Mr. Sanjay Rajaram Mohite, Chairman of the appellant
Society on behalf of appellantSociety has also filed an
affidavit/undertaking annexing thereto a copy of the revised
th
proposal dated 9 December 2021 submitted by the respondent
no.27. He has stated that the said revised proposal was
forwarded to the members of the appellantSociety and 153
occupiers/members out of total 240 occupiers/members have
already consented to the said proposal in writing. He has given
undertaking on behalf of the Society that the revised proposal
will remain binding on the appellantSociety. He has reiterated
that the buildings of the Society are in very dangerous
25
condition and may collapse any time. Undertaking of Mr.
Shripal Babulal Jain, the managing partner of respondent
no.27 in terms of what is stated in the affidavit referred above,
is also placed on record along with IA no.4249 of 2022.
16. In the undertaking of the respondent no.27 given to this
Court, the details of the amenities and other benefits agreed to
be extended to the eligible members of the appellantSociety
have been specifically set out:
“ 2. The main points of the proposals given by
the deponent – Respondent No. 27 (Developer)
are as under:
i) The size of new premises:
A. Residential premises;
As per old policy of DCR 1991, Developer was
bound to provide 300 sq.ft. plus 35%
fungible area i.e. 405 sq.ft. carpet area to
each residential eligible member.
Under the Development Agreement executed
with Society, the Respondent no.27
(Developer) has agreed to provide 429.88
sq.ft. carpet area plus 20.12 sq.ft as service
slab to each Residential member of the
Society.
In comparison to above two, as Developer, we
have now proposed to provide 450 sq.ft.
carpet area excluding service slab, to all
26
existing eligible Members/Occupants of
residential premises, against their existing
carpet area of approx. 115 sq.ft. to 180 sq.ft.
B. Nonresidential premises:
So far as NonResidential users are
concerned, as per DCPR 2034 they are
eligible for the same carpet area which is
occupied by them. However, we propose to
provide them 300 sq.ft. carpet area against
their existing occupation of 242.08 sq.ft. of
carpet area.
A table showing the existing area occupied by
the Respondent Nos.: 1 to 11 – Original
Plaintiffs and the proposed area to be given
against the same is forming part of the
proposal dated : 9.12.2021 as AnnexureV.
ii) Transit Rent/Shifting/Brokerage for
Temporary alternate accommodation:
A. For residential members:
It is proposed to give transit rent of
Rs.15,000/ per month for first two years
of alternative accommodation and
thereafter Rs.16,500/ per month with
increase therein at 10% every year till
possession of permanent alternate rehab
residential premises is offered.
It is proposed to give one time shifting
charges of Rs. 10,000/ for to and fro.
It is proposed to give Rs. 30,000/ towards
brokerage.
27
B. Transit Rent/Shifting/Brokerage for
Temporary alternate accommodation for
Nonresidential – Commercial use
members.
It is proposed to give Transit Rent of
Rs.25,000/ per month with increase
therein at 10% every year till the
possession of permanent alternate rehab
shop is offered.
It is proposed to give one time shifting
charges of Rs. 10,000/ for to and fro.
It is proposed to give Rs.50,000/ towards
brokerage.
iii) Period for completion of
redevelopment project:
It is proposed to complete the redevelopment
project in stipulated time of five years as per
MHADA circular dated 5.11.2020. The said
period of five years shall commence from the
date on which the vacant possession of entire
property is made available to the developer,
so as to enable starting of actual
redevelopment on site. Further, the time
period as regards obtaining of necessary
permissions, and/or stay from any Court,
Tribunal or Authority and/or any natural
calamity and/or Force Majeure events,
and/or things beyond control of the
Developer shall stand excluded.
iv) Corpus Fund :
(All members Residential/Non residential):
28
The society being owner of property, we
propose to provide Rs.5,00,000 (Rupees Five
Lakhs) for each member i.e., total
Rs.12,30,00,000/ (Rupees Twelve Crores
Thirty Lakhs) to the Society as Corpus Fund.
Against that we have already paid
Rs.3,07,50,000 (Rupees Three Crore Seven
Lakhs Fifty Thousand) to the Society, being
Rs.1,25,000/ (One Lakh TwentyFive
Thousand) for each member of Society, in
2013 on execution of Development agreement
and the balance we have to pay later.
v) Performance guarantee/Security
Deposit/Bank Guarantee:
As per New DCPR 2034 vide circular dated
05.03.2021 of Maharashtra Government, a
Developer is bound to give Security
Deposit/Bank Guarantee of 10% of Rehab
Construction cost i.e., approx. 12,282 sq.mtr.
x 30,250 construction cost as per Ready
Recknor of Mumbai for 202122 total of
Rs.37,20,00,000/ x 10% i.e. Rs.
3,72,00,000/. We have already paid
Rs.5,00,00,000/ (Rupees Five Crores) as an
additional security deposit to Society in 2013
on execution of Development agreement.
vi) Project Management Consultant
We propose to give Rs.3,00,00,000/ (Rupees
Three Crores) to society, out of which
Rs.1,50,00,000/ (Rupees One Crore Fifty
Lakhs) we have already paid to the Society in
2013 and the balance we have to pay later.
29
vii) Parking and height of premises
We will fulfill all compliance of New DCPR
2034 and as per planning constraint.”
17 . The learned Senior Counsel for the appellantSociety has
submitted that all the pending proceedings should be disposed
of so that the work of development can progress. The
respondent no.27 has stated that the work of development will
be completed as per the noobjection certificate issued by
rd
Mumbai Building Repairs and Reconstruction Board on 3
November 2021.
18. After perusing the affidavits and undertakings, this Court
suggested to the respondent no.27 whether the area of the
premises admeasuring 450 sq.ft. (carpet) offered to the
members occupying residential premises and the area of
premises admeasuring 300 sq.ft. (carpet) offered to the
members in possession of nonresidential premises can be
increased. In response to that, an affidavit has been filed by
the respondent no.27 stating that instead of premises
admeasuring 450 sq.ft (carpet area), premises having an area of
30
460 sq.ft. (carpet area) can be offered to those eligible members
who are occupying residential tenements. A copy of the
certificate issued by the Architect of the appellantSociety
recording that now FSI has been increased from 4.00 to 4.31
has been placed on record. Thus, respondent no.27 has given a
revised offer to allot residential premises admeasuring 460
sq.ft. of carpet area though as per old and new policy, the
entitlement of those who are holding residential premises was
to an area of 405 sq.ft and 425.25 sq.ft respectively.
19. The proposal of the respondent no.27 takes care of
payment of reasonable monthly rent to the members for
acquiring temporary alternate accommodation. It also provides
for payment of a reasonable amount towards brokerage which
is required to be paid for acquiring such accommodation. A
provision has been made to pay a sum of Rs.10,000/ as one
time shifting charges to each member. The respondent no.27
has agreed to create a corpus fund for the benefit of the
appellantSociety by contributing Rs.5,00,000/ (Rupees Five
Lakhs) per member. Out of the total corpus fund of
31
Rs.12,30,00,000/ (Rupees Twelve crores thirty lakhs) agreed to
be created, the respondent no.27 has already paid a sum
Rs.3,07,50,000/ (Rupees Three Crore Seven Lakhs Fifty
Thousand) to the appellantSociety. Apart from the above
provisions, a performance guarantee has been given by the
respondent no.27.
According to us, adequate safeguards have been provided
20.
to the members of the appellantSociety in the affidavit and
undertaking filed by the respondent no.27. In addition, the
appellantSociety has undertaken to abide by the terms and
conditions proposed by the respondent no.27. Moreover, a
direction can be issued to the appellantSociety to incorporate
the same terms and conditions as agreed by the respondent
no.27 in the event the appellantSociety is required to engage
another developer in place of the respondent no.27.
21 . The response of the respondent nos.1 to 11 to the aforesaid
proposal is twofold. Firstly, the stand is that considering the
recent enhancement in FSI, the area offered should be more.
Secondly, the development work should be entrusted to another
32
builder as the respondent no.27 does not have adequate
experience. In the plaint, one of the prayers is that the
appellantSociety should be directed to conduct a fresh tender
process for appointing a developer.
22. As noted earlier, this Court would have normally sent back
the matter to the Trial Court to decide the issue of limitation.
However, we cannot ignore the serious situation created as a
result of the pendency of various proceedings from the year
2013. Photographs produced along with IA no.11896 of 2018
show the very poor condition of the buildings of the Society. As
stated in I.A. No.22493 of 2021 filed by the appellantSociety,
236 members of the appellantSociety are occupying structures
in buildings that are in dilapidated condition. Apart from
photographs of the structures annexed to the said application,
th
a copy of the notice dated 12 July 2019 issued by the
Municipal Corporation to the appellantSociety has been
annexed. The notice refers to the structural audit carried out
by the Corporation in the year 20152016 which showed that
the buildings were falling in the C2A category meaning thereby
33
that the buildings are required to be vacated for carrying out
immediate major repairs. The notice records that there must
be further deterioration of the structures as repairs were not
carried out. Therefore, the Municipal Corporation called upon
the appellantSociety to get a structural audit of the buildings
done within two months. The Society was also called upon to
submit undertakings of the occupants that they will continue to
stay in the buildings at their own risk knowing fully well the
probable danger of collapse. It is apparent that the buildings
are in a dilapidated condition and the members of the
appellantSociety are risking their own lives by occupying the
same. Looking to the manner in which proceedings are being
contested, the suit may not be disposed of in near future.
Moreover, there are bound to be further appeals. In the
meanwhile, if something goes wrong with the buildings, a large
number of families of the members will be on the streets. Going
by the prayers in the plaint, even the respondent nos.1 to 11
the plaintiffs want redevelopment of the property, but on their
own terms and through another developer. Moreover, a large
majority of members of the appellantSociety have accepted the
34
proposal to appoint the respondent no.27 as the developer.
They have also accepted the proposal submitted by the
respondent no.27 to this Court.
23. Though a decision to redevelop the buildings was taken
way back in the year 2011 by the appellantSociety and though
th
an agreement was executed on 27 December 2012 appointing
a developer, no progress has been made in the development
work as a handful of members of the appellantSociety out of
236 members are opposing the project of development
undertaken through the respondent no.27. The suit filed by
the respondent nos.1 to 11 of 2016 is not likely to be disposed
of in near future. The issues in the suit including the issue of
limitation will have to be decided after parties are allowed to
adduce evidence. The enormous delay in disposal of the suit
and appeals arising therefrom will cause prejudice and harm to
the members of the appellantSociety as they will have to
continue to stay in tenements in the buildings which are in very
bad shape. This is not a usual dispute where the members are
not ad idem on the issue of redevelopment. In this case,
35
practically all the members of the appellantSociety want
redevelopment by demolishing old buildings. Here is a case
where a large number of members of the appellantSociety
continue to occupy dilapidated buildings by risking their lives.
Their families are being exposed to imminent danger. Therefore,
this Court cannot countenance a situation that will delay the
development work for an inordinately long time due to the
objection by a handful of members. The majority of members
are supporting the redevelopment by the respondent no.27 on
the terms offered by the said respondent. Therefore, in view of
the peculiar facts of the case and for protecting families of more
than 200 members of the appellantSociety, we are satisfied
that this is a fit case to exercise the plenary jurisdiction of this
Court under Article 142 of the Constitution of India to do
complete justice between the parties by giving quietus to the
pending disputes. It is in the larger interests of more than 200
members of the appellantSociety including the respondent
nos.1 to 11 that the disputes are put to an end and the work of
redevelopment starts at the earliest.
36
24. To give finality and quietus to the controversy in the larger
interests of members of the appellantSociety, considering the
objection of the respondent nos.1 to 11 to the area offered by
the respondent no.27, we propose to direct the respondent
no.27 to provide residential tenements having a carpet area of
475 sq. ft. (exclusive of service slab) to the eligible members
occupying residential premises. The respondent no.27 has
already agreed to increase the area from 450 sq.ft to 460 sq.ft.
In our view, this marginal increase in the area of the premises
to be allotted to members having residential tenements is
necessary as FSI has been substantially increased.
25 . The undertakings of the respondent no.27 sufficiently take
care of the apprehensions expressed by the respondent nos.1
to 11. The respondent no.27 has agreed to complete the project
within five years from the date on which it receives possession
of the buildings proposed to be redeveloped. To secure the
interest of the members, the respondent no.27 can be directed
to pay a transit rent for the period of five years in advance to all
37
the members at the time of entering into individual agreements
with all the members. The requirement of executing such
individual agreements with members has been noted in the
nd
resolution dated 2 December 2012 passed in the Special
General Meeting of the appellantSociety. Time of two months
can be granted to the members to vacate their respective
tenements and hand over possession thereof the appellant
Society from the date on which they receive transit rent for five
years as well as shifting and brokerage charges as provided in
the undertaking of the respondent no.27. Moreover, the
appellantSociety be directed to ensure that the successor of
the respondent no.27 shall be bound by all the undertakings,
in the event, the appellantSociety is required to replace the
developers.
26. Unless all the pending cases are disposed of, quietus
cannot be given to the dispute. Hence, by exercising the powers
under Article 142 of the Constitution of India, the suit filed by
the respondent nos.1 to 11 will have to be disposed of and the
criminal complaint filed by them needs to be quashed. The
38
respondent nos.30 to 38 are various authorities/officers. In
view of this Order, they shall not entertain any complaints
made by the respondent nos.1 to 11 in connection with the
redevelopment project. In the event, the respondent no.27 or
the appellantSociety commit any breach of the undertakings
given to this Court or any breach of directions of this Court, the
respondent nos.1 to 11 can always move the Court for
appropriate relief for enforcement of the undertakings and
directions issued by this Court. If the respondent nos.1 to 11
commit any breach of the directions contained in this Order,
the appellant and/or the respondent no.27 can adopt
appropriate proceedings for the enforcement of the directions.
We, therefore, dispose of this appeal by passing the
27.
following order:
(i) We take on record the undertakings of the
respondent no.27 given through Mr. Shripal Babulal
th
Jain, its managing partner which is of 7 January
2021 as well as the assurances contained in his
th
affidavit dated 17 January 2021 and Undertaking of
39
th
the appellantSociety in affidavit dated 7 January
2022 of Mr. Sanjay Rajaram Mohite;
(ii)
The undertakings of the appellantSociety and the
respondent no.27 are taken on record as aforesaid
with a modification that the area of residential
premises to be provided to all eligible members of the
appellantSociety occupying residential premises
shall be 475 sq.ft. of carpet area (exclusive of service
slab);
(iii)
In the event, the appellantSociety is required to
replace the present developer, while entering into a
development agreement with the new developer, a
clause shall be added therein incorporating an
undertaking of the new developer that he shall abide
by the directions contained in this Order.
(iv)
The respondent no.27 shall offer transit rent for the
period of five years, shifting charges and brokerage
as mentioned in paragraph 2(ii) (A and B) of its
undertaking quoted in paragraph 16 above to all the
eligible members within maximum period of two
40
months from today. At the time of payment of the
said amounts to the members, the respondent no.27
and the appellantSociety shall enter into agreements
with individual members for allotment of premises in
the new buildings free of cost. Within a maximum
period of two months from the receipt of the
aforesaid amounts, the respondent nos.1 to 11 shall
hand over the vacant possession of the premises in
their respective possession to the appellantSociety
and/or the respondent no.27;
(v) The entire project shall be completed by the
respondent no.27 as expeditiously as possible. The
outer limit for completion of the project shall be five
years from the date on which the respondent no.27 is
placed in possession of all the tenements in the
buildings proposed to be demolished. The possession
of the premises in reconstructed building shall be
handed over to the eligible members within the said
outer limit of five years;
41
(vi) Long Cause Suit no.575 of 2016 filed by the
respondent nos.1 to 11 in the City Civil Court at
Mumbai shall stand disposed of in view of this Order;
(vii)
Complaint No.1501270/Misc./2017 filed by the
respondent nos.1 to 11 pending before the Court of
th
the learned 15 Metropolitan Magistrate, Mazgaon,
Mumbai shall stand quashed;
(viii) If the appellantSociety or the respondent no.27 or
directions issued by this Order or undertakings given
by them, the respondent nos.1 to 11 are free to
initiate appropriate proceedings in accordance with
law for enforcing the directions issued by this Court
including the undertakings. Similarly, on the failure
of the respondent nos.1 to 11 or any of them to abide
by the directions issued in terms of this Order, the
appellantSociety and/or the respondent no.27 are
free to initiate appropriate proceedings in accordance
with law.
42
28. The Civil Appeal stand disposed of with the above
directions. All the pending applications, if any, also stand
disposed of.
…………..…………………J
(AJAY RASTOGI)
…………..…………………J
(ABHAY S. OKA)
New Delhi;
February 08, 2022.