Full Judgment Text
*IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(OS) 2140/1998
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% Date of decision: 28 May, 2009
GURU RAM DAS BHAWAN & Ors. ….… Plaintiffs
Through: Mr. Suryakant Singhla and
Mr. Shanto Mukerjee, Advocates
Versus
M/S DOON APARTMENTS PVT. LTD. ....... Defendant
Through: Ex-parte
CORAM :-
HON’BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. Whether reporters of Local papers may
be allowed to see the judgment? Yes
2. To be referred to the reporter or not? Yes
3. Whether the judgment should be reported
in the Digest? Yes
RAJIV SAHAI ENDLAW, J.
1. The plaintiff No. 1 claims to be an Association of the occupants
of Guru Ram Das Bhawan constructed by the defendant at Plots No.
A3 & A4, Community Centre, Ranjit Nagar, New Delhi. The plaintiffs
No. 2 & 3 are the President and the Secretary of the plaintiff No. 1
Association. The record reveals that the Delhi Municipal Corporation
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on 11 March, 1979 held a public auction in respect of perpetual
lease hold rights of the aforesaid plots of land and the bid of the
defendant was highest and was accepted and the defendant was put
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into possession of the said land on 19 July, 1979. The defendant
constructed on the aforesaid plots of land a Multi Storeyed Building
with a number of offices, flats, shops and godowns. The said building
was named ‘Guru Ram Das Bhawan’. The defendant entered into
separate agreements with different persons regarding the
offices/flats/shops/godowns in the said building and agreed to sell
CS(OS) 2140/1998 Page 1 of 14
the offices/flats/shops/godowns in the said building to the said
purchasers on the terms and conditions contained therein.
2. As per the documents on record, it was inter alia agreed
between the defendant and the purchasers of the different
offices/flats/shops/godowns in the said building that possession will
be delivered after full payment; that upon receipt of requisite
permission from the DDA/MCD for the sale of the flat to the buyer,
the defendant shall complete the sale and effect the conveyance of
the flat to the buyer in such manner as may be permissible; that the
buyer upon sale and delivery of possession will be entitled to use and
occupation of the flat without any interference or hindrance but
subject to the terms and conditions of the agreement: that the buyer
shall however have no right of the plots of land or to any portion of
the building other than the office/flat/shop/godown be sold to
it/him/her; that at an appropriate time of which the defendant was to
be the judge, the defendant shall promote a Limited Company,
Cooperative Society or some other Body Corporate of the buyers, to
take over from the defendant the ownership right in the land and the
structure thereon and to take the responsibility for the preservation
and maintenance of the building and for the operation of common
services thereon; that the buyers had agreed and undertaken to be a
member of such Limited Company or Cooperative Society or Body
Corporate to be so formed; that till the transfer to such Body
Corporate or Cooperative Society, the defendant shall have the right
to make additions, raise additional structure as may be permitted,
over the building; the buyer agreed and bound itself to pay to the
defendant or to the proposed Limited Company or Body Corporate or
Cooperative Society his proportionate share of all taxes, Ground
rent, insurance premium, water charges, salaries of persons
CS(OS) 2140/1998 Page 2 of 14
appointed by the defendant or by such Body Corporate/Cooperative
Society for the purposes of preservation and maintenance of the
property and for the provision of common services in the property;
that the buyer also agreed to deposit an amount by way of security
and which on the formation of the Body Corporate/Cooperative
Society was to be transferred thereto; the buyer also agreed to
contribute to a fund called the Sinking Fund for replacement of
capital equipment like elevator, pumping sets, electrical cables in the
building form time to time. The agreement also provides for
insurance of the building, maintenance, restrictions on use, etc. but
all of which are not relevant herein. Clause 32 (b) however provides
if the Cooperative Society or Body Corporate is not formed for any
reason whatsoever, then the defendant may transfer and assign the
building to the purchasers of flats/shops/godowns in the said
building with each of them having a share therein in proportion to
the price paid by him/her to the total price of all the
flats/shops/godowns etc.
3. The plaintiffs instituted this suit averring that the
buyers/allottees as well as the occupants had been requesting the
defendant to form the Body Corporate/Cooperative Society aforesaid
and which the defendant had been postponing; accordingly, the
plaintiff no. 1/Association was formed and got registered under the
Societies Registration Act; that the buyers of different
flats/shops/godowns as well as the occupants thereof have a common
interest of safeguarding their rights and interests in respect of
common area and facilities and which are required to be handed
over by the defendant to the plaintiffs. Reliance is also placed on the
provisions of the Delhi Apartments Ownership Act, 1986 to contend
that the defendant was required to transfer the legal title of the
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respective flats/shops/godowns in favour of the purchasers thereof. It
is further pleaded that the defendant in spite of being called upon to
do so had failed to hand over the amounts collected by way of
security deposit and in Sinking Fund and by way of insurance and
was required to hand over the same together with the sanctioned
building plans and other documents of the property to the plaintiff
No. 1 Association. It is further averred that the defendant is required
to hand over the maintenance of the building to the plaintiffs.
Though various grievances have been made in the plaint but in the
prayer paragraph of the plaint the reliefs claimed are of (i)
declaration that the plaintiff No. 1 is a body incorporated in terms of
the provisions of the Flat Buyers Agreement aforesaid and is legally
entitled to enforce the same on behalf of its members and (ii) a
decree for accounts and recovery of amounts found due thereon is
claimed against the defendant and (iii) a decree for mandatory
injunction is claimed directing the defendant to perform its
obligations as set out in paragraphs No. 6 to 11 of the plaint and (iv)
a decree for permanent injunction is claimed restraining the
defendant from demanding any money from the members of the
plaintiff on any account whatsoever.
4. On an application of the plaintiff for interim relief vide ex parte
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order dated 7 October, 1998 the defendant was restrained from
resuming possession over the flats of the members of the plaintiff
No. 1 Association. The said order appears to be in force till now.
5. The defendant appeared and contested the suit. However, it is
not necessary to go into the details of the defence of the defendant,
the defendant having since been proceeded ex parte. The plaintiffs
filed a replication to the written statement of the defendant and on
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the pleadings of the parties, on 22 May, 2000 the following issues
CS(OS) 2140/1998 Page 4 of 14
were framed and which would also give inkling of the defence of the
defendant.
(i) Whether the plaintiff No. 1 is not a legally constituted
Association as alleged by the defendant in the
preliminary objections? OPD
(ii) Whether the suit has been signed, verified and instituted
by duly authorized persons? OPP
(iii) Whether the common areas and facilities etc. of the
property in question can be transferred in favour of
plaintiff No. 1 in terms of Flat Buyers Agreement? OPP
(iv) Whether the claim in suit is premature as alleged in
paragraph No. 8 of the written statement? OPP
(v) Whether the plaintiff No. 1 is entitled to Insurance
Policies, approved plans and completion certificate
alongwith other records in respect of the building in
question? OPP
(vi) Whether the defendant No. 1 is liable to hand over the
amounts due in Sinking Fund Account alongwith all
necessary documents and records pertaining to the
same? OPP
(vii) Whether the defendant has been maintaining the
property in question as required of it by maintaining the
required staff etc? OPP
(viii) Whether the lifts in the property in question are working
properly and whether there has been proper
arrangement for the upkeep of Electrical, Water and
sanitary lines and equipments? OPD
(ix) Whether the plaintiffs are entitled to the various reliefs
claimed in the suit?"
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6. The defendant was proceeded ex parte on 8 November, 2001.
The plaintiffs filed affidavits by way of examination in chief of their
witnesses. The defendant thereafter applied for setting aside of the
ex parte and the said application of the defendant was allowed on
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30 July, 2003 and the defendant was permitted to cross-examine the
witnesses of the plaintiff. The defendant however again failed to
CS(OS) 2140/1998 Page 5 of 14
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appear and was proceeded against ex parte on 30 September, 2008.
The counsel for the plaintiffs has been heard.
7. It is the pleading of the plaintiffs in the plaint itself that the
plaintiff No. 1 is an Association of the occupants. In response to the
written statement of the defendant, in the replication it is pleaded
that all occupants of the building are members of the plaintiff No. 1
and more than 50% of them are also the owners of the portion of the
building occupied by them. With respect to the plaintiffs No. 2 & 3 it
is clarified that though the plaintiff No. 2 was the President of the
plaintiff No. 1 but it was his wife who was buyer of the flat and in
which the plaintiff No. 2 was carrying on business. Similarly with
respect to the plaintiff No. 3, secretary of the plaintiff No. 1 it was
clarified that he is the Managing Director of the company in
occupation of the flats. The said company was not pleaded to be the
owner/buyer of the flats.
8. The legislature promulgated Delhi Apartment Ownership Act,
1986 to provide for the ownership of an individual apartment in a
Multi-Storeyed Building and of an undivided interest in the common
areas and facilities appurtenant to such apartment and to make such
apartment and interest heritable and transferable and for matters
connected therewith or incidental thereto. Though there was some
controversy as to the applicability/enforcement of the said but this
Court in Sagar Apartments Flat Owners Society (Regd.) vs.
Sequoia Construction Pvt. Ltd. 1993 Rajadhani Law Reporter 446
has held that the said law is in force and rights of the parties created
under the said law have to be taken into consideration and the court
has to ensure that the legislative intent in the said law is fulfilled
rather than allow it to flouted.
CS(OS) 2140/1998 Page 6 of 14
9. Section 2 of the Apartment Act provides that the provisions
thereof shall apply to every apartment in a multi-storeyed building
constructed for residential or commercial purposes by any group
housing society or any other person and whether before or after the
commencement of said Act, and on a free hold land or a lease hold
land, if the lease for such land is for a period of thirty years or more.
The Act applies to all buildings which have four or more apartments.
As per the plaintiffs themselves Guru Ram Das Bhawan has more
than four apartments and the documents show the lease of land
underneath the same to be perpetual. Thus the Apartment Act
applies to the said building. The flats/shops/godowns in the said
building in occupation of the members of the plaintiff No. 1 are
covered by the definition of Apartment in Section 3(c) of the said
act. Section 3(e) defines an apartment owner as meaning a person
owing an apartment and an undivided interest in the common areas
and facilities appurtenant to such apartment. Section 3 (f) defines an
Association of apartment owners as meaning of the owners of the
apartments therein. Section 3 (w) defines a promoter as meaning any
authority, person or cooperative society, by which or by whom any
multi-storeyed building has been constructed.
10. Section 4 of the Apartment Act provides that every person to
whom any apartment is allotted, sold or otherwise transferred by the
promoter shall be entitled to the exclusive ownership and possession
of the apartment so allotted, sold or otherwise transferred to him. In
the present case, the defendant having constructed the multi-
storeyed building named Guru Ram Das Bhawan is the promoter and
the persons to whom the defendant had allotted, sold or transferred
the flats/shops/godowns are the owners thereof. Section 4(3)
provides that every person who becomes entitled to ownership and
CS(OS) 2140/1998 Page 7 of 14
possession of an apartment shall also be entitled to such percentage
of undivided interest in the common areas and facilities as may be
specified in the Deed of Apartment and such percentage shall be
computed by taking, as a basis, the value of the apartment in relation
to the value of the land underneath the multi-storeyed building and
the structure of the multi-storeyed building and all the fixtures,
fittings, appurtenances thereto. Under Section 4(5) common areas
and facilities which have been defined in Section 3(j) are to vest
collectively in the apparent owners and to remain indivisible.
11. Section 9 of the Act provides for the provisions of the Act to
become applicable inter alia to a lessee of a period of 30 years or
more of any apartment. Section 13 imposes obligation on the
promoter, as the defendant herein is, to execute a deed of apartment
in favour of the apartment owners. Section 15 provides for an
Association of apartment owners for the administration of all the
affairs in relation to the apartments and the property appertaining
thereto and for the management of the common areas and facilities.
Section 24 makes the provisions of the Act effective notwithstanding
anything inconsistent therewith contained in any other law for the
time being in force or any contract, undertaking or other instrument
and all the apartment owners or tenants or any person in use of the
property or any part thereof to which the Act applies shall be subject
to the provisions of the Act.
12. Thus, notwithstanding anything to the contrary contained in
any agreement executed by the defendant at the time of
allotment/sale of any of the offices/flats/shops/godowns, the
provisions of the Act are to remain prevalent.
CS(OS) 2140/1998 Page 8 of 14
13. It would thus be seen that the law contemplates an association
of owners of the apartments and not an association of occupants of
the apartments as the plaintiff No. 1 is. The body
corporate/cooperative society contemplated under the agreement
executed by the defendant at the time of agreeing to sell different
offices/flats/shops/godowns to different persons also provides for
owners thereof being members of the same and not for the
occupants being the members. The Division Bench of this Court in
Star Estate Management Pvt. Ltd. vs. Neo Securities Ltd. FAO
st
(OS) No. 390/1996 decided on 31 October, 1996 has also held, only
association of apartment owners has the right to maintain the
common areas and amenities and facilities in the multi-storeyed
building.
14. Seen in this light, the plaintiffs are not entitled to the
declaration that the plaintiff No. 1 is the body corporate in terms of
the provisions of the agreements aforesaid or is legally entitled to
enforce the same on behalf of its members. Such right under the
agreement as well as under the Apartment Act is of the Association
of apartment owners only. Only some of the members of the plaintiff
No. 1 are the owners. Others are the occupants/lessees. It is not the
case that the said occupants/lessees are lessees for a period of over
30 years so as to be covered by the Act under Section 9 of the Act.
The plaintiff cannot thus be entitled to the first relief claimed.
15. As far as the relief of rendition of accounts and recovery is
concerned, the right to the said relief is again either of an
association of apartment owners or collectively of all the owners of
the apartments. The plaintiffs do not meet the said parameter also.
Consequently, the plaintiffs are not entitled to that relief also.
CS(OS) 2140/1998 Page 9 of 14
16. The plaintiffs have also claimed enforcement of obligations
pleaded in paras 6 to 11 of the plaint. In para 6 of the plaint
grievance is made of the defendant having not transferred legal title
to the respective flats in favour of the various owners of the flats.
The right to have the deed of apartment executed in terms of the
Apartment Act or to have a sale deed executed/registered is of the
individual owners. The Deed of Apartment or the Sale Deed of an
individual flat is not to be executed in favour of the plaintiff No. 1
Association/Society. Thus the plaintiffs are not found entitled to be
having a locus to sue for the same relief.
17. Para 7 of the plaint deals with the obligation of the defendant
to transfer the common areas and facilities. The agreement was for
transfer thereof to a body corporate/cooperative society of all the
apartment owners. The plaintiff No. 1 is not such a body or society.
Even though the agreement provides for the defendant to constitute
such a body corporate/cooperative society but had all the apartment
owners themselves constituted such body corporate or society, they
would still have been entitled to the relief. However, the relief
cannot be granted to an association of the occupants and of which
only some of the members are the owners. In fact, under the Act,
upon such association of apartment owners being constituted, no
formal transfer of common areas and facilities by the defendant to
such association is required inasmuch as under the law the common
areas and facilities vest in such association.
18. The grievance in para 8 of the plaint is that after the formation
of the plaintiff No. 1 the defendant is not entitled to receive any
payment on account of common service charges. It is further pleaded
that the defendant is required to hand over the amount received by
way of security deposit to the plaintiff No. 1. Para 9 deals with the
CS(OS) 2140/1998 Page 10 of 14
amount collected towards insurance and para 10 deals with the
sanctioned plans and other documents pertaining to the property. As
far as the entitlement of the defendant to recover the charges is
concerned, I find that the defendant has no right to claim such
payments or to enforce the same from the apartment owners. This
court in Dhawan Deep Residents Welfare Asso. (Regd.) vs. M/s.
Star Estate Management Ltd. IA No. 8319/2006 in CS(OS) No.
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1474/2006 decided on 20 September, 2007 has inter alia held that
the owners/residents of a multi-storeyed building have a right of
maintenance of common areas and amenities and the
builder/promoter or its agency cannot forcibly recover maintenance
charges. Thus even though all the owners are not before this Court
and the plaintiff No. 1 is not an association of all the owners but the
plaintiffs are found entitled to the relief of restraining the defendant
form recovering any monies on account of common charges or
maintenance charges or any other charges with respect to the
building from any apartment owner/occupant/lessee of any
apartment not willing to pay the same to the defendant. However the
association of occupants having no right to the amounts collected by
way of security deposit, insurance monies or the sanctioned plans of
the building and the right thereto being of an association of
apartment owners only the plaintiffs are not found entitled to that
relief.
19. Para 11 of the plaint deals with the obligation of the defendant
to hand over the maintenance of the building to the plaintiff No. 1.
However as aforesaid under the agreement as well as under the law
the right of the maintenance is of the association of apartment
owners and which is not before the Court. The plaintiffs thus are not
entitled to the said relief also.
CS(OS) 2140/1998 Page 11 of 14
20. Having held so, I may express that though this court in the
judgments aforesaid as well as in several other judgments viz.
Ganesh Prasad Seth vs. Karam Chand Thapar 1998 (IV) AD
Delhi 657, Om prakash Charaya vs. Ashok Kamal Capital
Builders Pvt. Ltd . 2000 (VII) AD Delhi 67, Municipal Corporation
of Delhi vs. A.M. Khanwilkar 2002 (65) DRJ 38 and R.L.
Bhardwaj vs. Shivalik Cooperative Group Housing Society Ltd.
56 (1994) DLT 600 has been attempting, while faced with
applications for interim relief, to give effect to the provisions of the
Apartments Act but in practice, the Apartment Act has failed to fulfill
the purpose for which it was enacted. Though changes/amendments
to the said Act have been heard to be under consideration for long
but nothing has happened in the last over 22 years. Though the
Government takes a stand that there is no impediment to the
registration of Deeds of Apartments but in practice it is found that
the Registrar of Assurances refuses to register documents of transfer
of individual flats constructed over the leasehold lands. There
appears to be no clear directions by the perpetual lessors of the land
viz. DDA, MCD for registration of deeds of individual
flats/apartments with proportionate rights in the land. All this has
reduced the apartments which are valuable immovable property to
be not having any mortgageable title and has encouraged the
Builders/Promoters to illegally collect transfer charges whenever an
apartment is bought and sold and at the loss of stamp duty payable
to the Government.
21. In most of the buildings, the owners are not the occupants. As
per normal terms of letting of the apartments, it is the tenant who is
responsible for payments of maintenance charges. The owner being
not in use/occupation of the apartments is not concerned with the
CS(OS) 2140/1998 Page 12 of 14
standard/quality of maintenance provided. He is only concerned with
his rent. The tenant thus though paying the maintenance charges on
behalf of the owners under agreement from the owners is left at the
vagaries of the builder and as found in this case, not entitled to
enforce rights against the builders, owing to the association
contemplated under the Act being of the owners. The builders of
multi-storeyed building are found to continue managing the common
areas and services and earning profits therefrom and which under
the agreement and under the law they are not entitled to. All this is
to the prejudice of the occupants of the apartments. The legislature
needs to consider providing for the association of the occupants to
carry on the maintenance of common areas and amenities in the
building since it is they who are vitally concerned therewith.
However, till the legislature makes such provision, it is essential for
the tenants of such apartments to at the time of entering into lease
also obtain authorization in their favour from the owners of the
apartment to deal with the builder in relation to the rights of the
owners of maintenance of common areas and amenities and/or to
represent the owner in the association of the apartment owners
during the term of their lease/occupation of the flats.
22. Thus though while disallowing most of the reliefs claimed in
the suit, I do the same with a heavy heart being fully aware of the
difficulties being faced of the members of the plaintiff No. 1.
However there being no remedy in law, my hands are constrained.
23. The suit of the plaintiffs is thus decreed only for the relief of
injuncting the defendant from recovering the charges towards
maintenance of any common areas or amenities/facilities in the
building known as Guru Ram Das Bhawan at Plots No. A3 & A4,
Community Centre, Ranjit Nagar, New Delhi from any of the
CS(OS) 2140/1998 Page 13 of 14
occupants thereof who are not willing to pay the same. The suit for
the remaining reliefs is dismissed.
24. In the facts of the case, the parties are left to bear their own
costs. Decree sheet be drawn up.
RAJIV SAHAI ENDLAW
(JUDGE)
May 28, 2009
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CS(OS) 2140/1998 Page 14 of 14