Full Judgment Text
2005:BHC-AS:21076-DB
1
IN THE HIGH COURT OF JUDICATURE AT BOMABY
CIVIL APPELLATE JURISDICTION
PUBLIC INTEREST LITIGATION NO. 43 OF 2005
Public Concern for Governance
Trust Charitable trust registered
under the Bombay Public Trusts
Act, 1950, through its Chairman
Shri. B.G. Deshmukh having
its Office at Post Box No.9925
Worli, Mumbai-400 018. ... Petitioner
Vs.
1. The State of Maharashtra
through the Secretary,
Urban Development
Department, Mantralaya,
Mumbai 400 032.
2. The City and Industrial
Development Corporation of
Maharashtra Limited
having its office at CIDCO Bhavan,
CBD, Belapur, Navi Mumbai.
3. Navi Mumbai Municipal Corporation
A Statutory authority constituted as the
Planning Authority for Navi Mumbai.
4. Vijay Associates (Wadhwa) Developers
having its office at 425-A, Vasukamal
th
14 Road, Bandra (W), Mumbai 400 050.
5. Sea Queen Co-operative Housing Society Ltd.
6. Amey Co-Operative Housing Society Ltd.
7. Sagarika Co-Operative Housing Society Ltd.
8. Sea-Link Co-Operative Housing Society Ltd.
9. Sea View Co-Operative Housing Society Ltd.
::: Downloaded on - 01/04/2024 15:49:18 :::
2
10.Vinayak Co-Operative Housing Society Ltd.
Having their addresses at
Plots Nos.24 to 29, Sector-4, Nerul Node,
on Palm Beach Marg, Navi Mumbai
and also care/of Respondent No.5
th
at 425-A, Vasukamal, 14 Road,
Bandra (West)
Mumbai 400 050. .. Respondents
-----------
Mr. C.U. Singh Senior Advocate, with Ms. Soma Singh and Mr. Mahesh
Londe instructed by M/s. Sanjay Udeshi & Co. for the Petitioner.
Mr. Ravi Kadam Advocate General with Mr. P.I. Khemani, A.G.P. for
Respondent No.1.
Mr.G.S. Hegde with Mr. Lokesh for Respondent No.2.
Mr. A.A. Garge Adv. for Respondent No.3.
Mr. Janak Dwarkadas, Senior Advocate, with Mr. P.K. Shroff with Mr.
Subodh Joshi with Ms. Hetal Savla with Ms. Radhika A. Pinzara
instructed by M/s. Parimal K. Shroff & CO. for Respondent No.4.
Mr. V.A. Thorat Sr. Adv. With Ms. Preeti Shah for Respondent No.6.
Other Respondents are served.
CORAM: H.L.GOKHALE &
SMT. ROSHAN DALVI, JJ.
JUDGMENT RESERVED ON : 28TH October 2005
JUDGMENT PRONOUNCED ON: 23RD NOVEMBER 2005
::: Downloaded on - 01/04/2024 15:49:18 :::
3
JUDGMENT: (Per H.L.GOKHALE , J.)
1.
The Petitioner is a Registered Trust which has filed this Public
Interest Litigation in respect of the allotment of residential plots in Navi
Mumbai Municipal Area by Respondent No.2 – City and Industrial
Development Corporation. CIDCO is the Authority constituted by
Respondent No.1 State of Maharashtra under the Maharashtra Regional
and Town Planning Act, 1966 (MRTP Act) for development of Navi
Mumbai amongst other townships. The Petitioner trust is created to
promote respect for law and transparancy and accountability in
governance amongst other objectives. It is founded and led by eminent
citizens which include Mr. B.G. Deshmukh, former Cabinet Secretary, Mr.
J.F. Rebeiro, former Director General of Police and Dr. R.K. Anand, an
eminent physician with Jaslok Hospital. The principal submission of the
Petitioner trust is that although the relevant scheme of CIDCO is for the
benefit of genuine housing societies, the plots thereunder are grabbed by
builders in the name of fictitious societies. Prayer (a) of this petition
st
therefore seeks to quash and set aside these allotments. The 1
Respondent to the petition is State of Maharashtra through the Urban
Development Department. Respondent No.3 is the Navi Mumbai
Municipal Corporation (NMMC). Respondent No.4 is the concerned
builder and Respondents Nos.5 to 9 are the concerned housing societies.
2. Respondent No.2 - CIDCO grants plots in Navi Mumbai for
construction and development under the MRTP Act read with the
prevalent Development Control Regulations for Navi Mumbai, and City
and Industrial Development Corporation of Maharashtra Limited (Lease of
::: Downloaded on - 01/04/2024 15:49:18 :::
4
Land To Co-operative Housing Society) Regulations, 1995 (hereinafter
called “the Regulations”) as amended in 1999. The applicability of the
MRTP Act and the Regulations to the disputed allotments are admitted.
The respective contentions of the parties are with respect to the
interpretation of the Act, the Regulations, the resolutions passed by the
Board of Directors of CIDCO and their application and implementation in
the instant case.
3. The petition points out that the allotment of plots is done by
CIDCO by either of the three methods:-
(1) Public advertisements.
(2) At a fixed price to Co-operative
Housing Societies.
(3) On individual applications.
It is their case that plots which are granted by public
advertisements are to be granted upon tenders being invited in which the
builders apply. Since the prices of those plots are regulated and governed
by Market forces, they tend to be steep. The genuine Co-operative
Housing Societies which require plots for their members cannot compete
with them. The Societies are therefore required to be granted plots at a
fixed concessional rate. This grant of plots at a fixed rate or fixed price is
therefore, meant to be given only to genuine and needy Co-operative
Housing Societies and therefore, necessarily only for residential
purposes. This construction is permitted at Floor Space Index 1 (FSI 1).
It is the case of the Petitioners that CIDCO sought to grant the concerned
::: Downloaded on - 01/04/2024 15:49:18 :::
5
plots ostensibly to such needy and genuine Co-operative Housing
Societies. It therefore, sought to grant them at a fixed rate calculated by
itself as the base price with specified enhancement thereon. However,
upon such price being computed, ascertained and fixed, instead of
granting those plots to genuine and needy Co-operative Housing
Societies, CIDCO allowed those plots to be frittered away to builders and
developers who took them not upon any tender, but at the fixed price by
floating , bogus and fake Co-operative Housing Societies consisting of
their employees, nominees and friends instead. The Petitioners submit
that thus on the one hand CIDCO deprived itself of the market rate of the
plots which would have been determined by economies in the market,
based upon the demand and supply principle, and on the other hand, the
plots were cornered by builders who would make huge profits upon the
development of the plots and consequently no genuine or needy Housing
Society could take or develop them at the price fixed mainly and only for
them. Further they contend that though those plots were to be only for
residential purposes with FSI 1, the builders who captured them took
those plots for both commercial and residential purposes (C + R) in the
Sectors reserved for C + R though ostensibly in the names of Cooperative
Societies. The Builders accordingly sought to convert those plots partly
for commercial use with FSI 1.5 on the ground of they being in Sector
C+R.
4. The Petitioner's case thus shows that there was a dual
advantage and unjust enrichment for the builders and a corresponding
disadvantage to CIDCO, the public sector undertaking and consequently
to the citizens at large. Consequently the builders got a plot at the fixed
::: Downloaded on - 01/04/2024 15:49:18 :::
6
rate meant for societies with FSI 1 and also availed the C+R development
without subjecting themselves to the requirements of a tender meant for
C+R plots to be given by public advertisements to builders.
5. The Petitioners have shown this exercise by CIDCO under the
aforesaid Regulations (which shall be referred to presently) based upon
two resolutions of its Board of Directors Nos.8848 and 8886 passed on
rd th
23 October 2003 and 25 November 2003 respectively based upon their
respective Agenda Notes which show the exercise of computing the fixed
rate upon demand stated to have been received by CIDCO from various
Societies for residential purposes. The Agenda Notes and the 2
resolutions make interesting reading.
The relevant resolutions of CIDCO governing the field
:
rd
6. The Agenda Note for resolution number 8848 dated 23 October
2003 shows that as per the Land Pricing and Disposal Policy of CIDCO
the plots for Co-operative Housing Societies were to be allotted by one of
the 3 aforesaid modes. The Agenda Note gives the justification for grant
tremendous demand”
of plots at fixed rate as “ from Promoters of Co-
operative Housing Societies for allotment of plots to them without tender
and at fixed rates in various nodes of Navi Mumbai. The Agenda Note
sets out the proposal for CIDCO to offer plots for residential use at fixed
rate to such societies. It further sets out that the market analysis done by
CIDCO shows that those Societies found it impossible to get a plot
through tender. Consequently, the Agenda Note shows that it was
proposed to determine a fixed price at which the plots will be given out to
::: Downloaded on - 01/04/2024 15:49:18 :::
7
Co-operative Housing Societies. First, a base price is arrived at on the
basis of the existing pricing policy and then there would be 40%
enhancement of the base rate in the developed nodes. (similarly there
was to be 30% increase in the base rate for determining the fixed price in
developing and new Nodes, but with which this Petition is directly not
concerned.). The Agenda therefore sets out a table showing the base
price under CIDCO's existing pricing policy and the enhanced price at the
above percentage. The table further shows the price concession that
these plots will still get, in terms of percentage when compared to, the
tender rate. This is the weighted average of such tender. Since market
forces would determine the tender price, the concession received would
therefore be lesser in the developed nodes and more in the developing or
new nodes.
7. Though the Petitioners have made a grievance about the
number of plots and claimed reliefs for all such similarly placed plots in the
Petition, they have concentrated their criticism on one prime plot by way of
an illustration. The plot specified by the Petitioner (the said plot) is not
only in a developed node but in a prime locality of Navi Mumbai
nicknamed “Marine Drive of Navi Mumbai” by CIDCO.
8. The said plot is in Nerul area of Navi Mumbai and is shown at
serial No.5 in the table which forms a part of the Agenda Note to the
Board Resolution No.8848 of CIDCO. The base price as per the existing
pricing policy of CIDCO for the said plot is shown to be Rs.7188/- per
square meter. The proposed increase in base price (enhanced by 40%
being in the developed node) is shown to be Rs.10063/-. The weighted
::: Downloaded on - 01/04/2024 15:49:18 :::
8
average of Tender rate is shown to be Rs.10743/-. Since this is a prime
plot in a developed area analogous to Marine Drive of Mumbai, the actual
tender rate would be therefore, far higher than the average of tender rate,
the average having been derived for developing as well as developed
plots together. It is the case of the Petitioners in para 14 of the Petition
that the base price fixed was far below the prevailing market rate and that
the prevailing market rate would be about Rs.20,000/- per square meter
instead. That would be near about the highest price of the plots to be
developed in Navi Mumbai. Of course this rate would be when the plot is
fully developed in that “developed node”, Nerul. The Agenda shows that
the lower rates were justified considering the fillip it would give to speedier
development in Navi Mumbai and to enable genuine Housing Societies to
instead of resorting to the practice of allotting plots to
take them
developers only. The laudable purpose of the policy, stated in the
Agenda is “ in keeping with the National Policy to increase Housing Stock of
Individuals”.
9. Based upon that Agenda, CIDCO passed its resolution No.8848
rd
of 23 October, 2003 which resolved that CIDCO approved the proposal
to fix the rates for plots to be allotted to Co-operative Housing Societies
with FSI 1 and purely for residential purposes without inviting tenders at a
fixed rate as mentioned in column No.5 of the table to the Agenda. It
further passed the resolution that this policy was to be implemented only
after verifying the genuineness of the Society.
10. Thus, four characteristic facts of the grant by CIDCO emerge
from that resolution:
::: Downloaded on - 01/04/2024 15:49:19 :::
9
(i) The grant would be only to genuine Co-operative
Housing Societies.
(ii)It would be only for residential purpose.
(iii)It would be without inviting tenders and instead at the fixed
rate.
(iv) It would be for FSI 1.
11. It must be appreciated that fixed rates were therefore meant
only for genuine Co-operative Housing Societies applying directly for the
plots. It would be only for residential purposes and would have FSI 1.
The other plots would be granted through tender. They would not be at
the fixed rate since such rates would be dependent upon the market
forces. Those plots would not be only for residential purposes – they
would be C+R. They would therefore enjoy not 1.00 but 1.5 FSI. The
advantages of constructing C+R would be that it will attract 1.5 FSI which
would therefore necessarily get higher profit. It would therefore, fall within
domain of the business of developers and would fetch CIDCO the gains of
such development. The plots under CIDCO's new policy pursuant to
resolution No.8848 would derive comparatively lesser benefit for CIDCO
in as much as the plots would be granted upon the fixed rate but they will
be available for residential purpose only and to genuine housing societies
alone.
::: Downloaded on - 01/04/2024 15:49:19 :::
10
12. The case of the Petitioner is that these plots have been
granted by CIDCO to Respondents 5 to 10 conferring the advantages of
the policy upon those Respondents and at a disadvantage to CIDCO.
However, though the price was fixed for the grant of the plots, ultimately
what is seen is that they were given away not to genuine Co-operative
Housing Societies and not only for residential purpose for FSI 1, but to
builders for C+R attracting FSI 1.5 and without the stringency of a tender.
13. Under the further Agenda Note for a subsequent Board
th
Resolution No.8886 of CIDCO passed on 25 November 2003, CIDCO
sought to regulate the actual grants made to the Co-operative Housing
rd
Societies for whom the earlier resolution was passed on 23 October
2003. That Agenda again shows the object of the resolution to be of
“enabling and assisting the needy and genuine Cooperative Housing
Societies to acquire a plot only after verifying genuineness of the
Society, in Navi Mumbai”.
14. The above referred regulations specified the norms to verify the
genuineness of such Societies. The Agenda provided the requirement of
an affidavit (a truthful statement on oath) showing the continuous
residence of 15 years of the applicant in Maharashtra State supported by
documentary evidence such as ration card, passport, Domicile Certificate
etc. of each member coupled with the certification in an affidavit that that
member has no “ other dwelling unit in Navi Mumbai” .
15. The Agenda further sets out the maximum extent of the area of
the flat, the number of members of the society, the area of the plot and
::: Downloaded on - 01/04/2024 15:49:19 :::
11
the conditions to regulate the change of members. Initially the number of
members not allowed a change was 1/3 of the total members and the
period of such restriction was 5 years as shown in the Agenda Note for
the Board Resolution. In the resolution, 1/3 has plummeted to ¼ of the
total number of members and the 5 year period in the Note has been
decreased to 3 years from the date of allotment.
16. The two resolutions read together show the Board of CIDCO
having decided to allot residential plots with 1 FSI at fixed rate to genuine
Societies whose members would be verified by a statement on oath
supported by documentary evidence to substantiate those statements,
part of whom shall not transfer their memberships for a specified period.
17. It may be mentioned that though the suit plot at Nerul found its
ultimate place as a plot with a fixed price, about a year prior thereto, it
was sought to be allotted by public advertisements which implied the
allotment by tender. Such public advertisements were given in August-
September, 2002 in 2 English and 2 Marathi News-papers. The
advertisements of CIDCO show Navi Mumbai's Marine Drive with a base
price of Rs.10,000/- per sq. mtr. The advertisements gave a “life time
opportunity to top most builders of India” . They published the names of
authorities and the contact number and address of CIDCO. We are told
that no offers were received by CIDCO consequent upon the said
advertisements. The base price shows the minimum price below which
CIDCO would not and could not have allotted the plot to any of the top-
most builders of India. That same plot (the suit plot) has however been
subsequently offered under the Board Resolution No.8848 at the flat fixed
::: Downloaded on - 01/04/2024 15:49:19 :::
12
rate of Rs.10063/- not to any of “the top most builders of India” but to
“genuine Co-operative Housing Societies”.
18. The petition contends that although ostensibly CIDCO sought
to target a separate market for allotment of interalia the suit plot, instead
of the ultimate allotment to genuine societies, there has been a volteface
as the suit plot came to be taken for development by one of the top most
builders of India, Respondent No.4 instead of any genuine Co-operative
Housing Societies.
19. The Petitioners have drawn our attention to the website print
out of Respondent No.4 showing interalia that the suit plot is its premier
residential construction annexed at Exhibit-F to the Petition.
20. On paper however 6 Societies being Respondent Nos.5 to 10
have applied for and been allotted one plot each at the fixed price from
CIDCO. According to the Petitioners, these societies are not genuine
housing societies.
The applications of the disputed societies for allotment of land :
21. To appreciate this submission, one will have to examine the
documentary evidence of the offer by Respondents 5 to 10 and the
acceptance by CIDCO constituting the contract of allotment between
them. The documents containing the particulars of the members of these
societies will also have to be seen to examine whether they fulfill the
criteria laid down. This will enable us to examine the genuineness of
::: Downloaded on - 01/04/2024 15:49:19 :::
13
these societies.
22. These documents have come to be referred and relied upon by
the Petitioners in a further Affidavit filed by the Petitioner's Trustees,
consequent upon inspection of the documents taken by the Petitioners
from CIDCO. CIDCO has produced the files containing the applications,
affidavits and documents furnished by the members of these societies.
23. When we look into these documents, what we find is that the
letters of application titled “Request for Allotment” by Respondents Nos.5
to 9 Societies are computer print-outs. All the letters are undated. All of
them are addressed to the then Chief Minister of Maharashtra Shri
Sushilkumar Shinde and not to CIDCO which as a statutory Corporation,
is a separate competent legal entity. Each of them bears the
st
endorsement of the Chief Minister “ Please p ut up” dated 21 February
2004. Each of them has been received by the Registered Office of CIDCO
th
at Nirmal Building, Nariman Point, Mumbai on 24 February 2004 and in
th
the Commercial Section of CIDCO at Navi Mumbai on 25 February 2004.
The 2 stamps of these Offices bear 5 different running inward numbers.
The inward numbers of the stamp of the CIDCO Office at Nirmal are 15
onwards marked “C.M.” . The endorsement of the then Managing Director
th
of CIDCO Shri V.M. Lal “Please process early” is made on 24 February
2004 itself, before the letters are moved to the Commercial Section at
th
Navi Mumbai. A further endorcement also dated 24 February 2004 on
the top of these letters shows them serially numbered from No.30
“VVIP”.
onwards and bearing the endorcement After these, three
identical endorcements have been made by the Commercial Section of
::: Downloaded on - 01/04/2024 15:49:19 :::
14
CIDCO at Navi Mumbai under separate inward numbers commencing
th
from No.3768 on 25 February 2004.
24. Surprisingly, the copies of letters produced by Respondent
No.6 (the lead society) on behalf of Respondent Nos.5 to 10 in Court
th
show that they were received by CIDCO on 26 February 2004 after all
such action was already taken.
25. Though the names of the Societies and their addresses are
different, none of the letters bear any telephone number of the Society as
also the date. The font of the letter-head in the printout are similar for 4
Societies. The subject of the letter is identical except for the Sub-Division
of the plot mentioned therein. All the letters show Plot No.24 in the print
th
out. (Indeed the Development Plan of CIDCO dated 9 January 2004
which is C+R shows the said plot bearing No.24!). They further show
handwritten subplots A to E. Hence at the time of the application itself
the specific sub-plot to be allotted is specified by the author of the letter
who is the Chief Promoter of that Society. The contents of each of these
letters is identical. Their addresses are from different parts of the city.
Thus, “Sealink's” address is Matunga, Mumbai-19, Sagarika's - Ambedkar
Road, Mumbai-14; Amey's – Manektala Estate, Mumbai-86 and others
from Vashi. It is seen that Co-operative Housing Societies stated to be
having different names and different addresses in far off areas have all
sought to apply for allotment by writing identical letters on the same day
not to CIDCO but to the then Chief Minister of Maharashtra. For some
unknown reason all these letters are directed to be put up and processed
“VVIP”.
early on the date they were received and marked
::: Downloaded on - 01/04/2024 15:49:19 :::
15
26. The applications show no annexures. In fact the contents of
the letters show that the annexures had been earlier or separately
submitted. Copies of any such annexures, not being with the letters, they
were not even offered for inspection by CIDCO to the Petitioner's
representatives.
27. The application of Respondent No.10 has been made
th
separately. It is also undated. It is received initially on 5 April 2004 and
th
bears endorcement of the Chief Minister dated 5 April 2004 “Please
th
Process and Pass by 12 April 2004” . It is received by the Nirmal
th
Building of CIDCO on 6 April 2004 under No.42 CM. It bears the further
th
VVIP,
stamp of No.75 against the date 8 April 2004. The endorcement of
th
then Managing Director of CIDCO was made on 12 April 2004.
th
28. The note of the Marketing Manager dated 16 March 2004 with
regard to each of these letters is identically made for each of these
applications showing that the applications were received along with
enclosures which were duly certified and that the Societies have fulfilled
all the terms and conditions with regard to the number of members and
the extent of the area of the plot and the flats. Neither the then Chief
Minister nor the Marketing Manager nor the Managing Director of CIDCO
are seen to have made any query in spite of this astonishing similarity of
approach of these six societies coming from different parts of the city.
Strangely enough, their response to these identical applications is also
astonishingly identical.
::: Downloaded on - 01/04/2024 15:49:19 :::
16
Documents in support tendered by members and total absence of
scrutiny :
29. CIDCO claims to have scrutinised and verified the applications
of these Respondents. Upon our query CIDCO has produced 6 files
containing the documents of all the members of the 6 Societies. A
cursory look at these files has revealed not only that CIDCO has not
scrutinised or verified the documents, but that when seen, those
documents go against the basic elementary requirements for application
by members as per the Regulations and shown in the Agenda to the
Board Resolution in terms of which resolution No.8886 came to be passed
th
by the CIDCO on 25 November 2003.
30. It would be essential to enumerate some of the salient features
of those documents. It may be remembered that these documents were
required as per the Agenda to the aforesaid Board Resolution in support
of the affidavits to be made by the members that they lived in Maharashtra
for 15 years and that they do not have another dwelling unit in Navi
Mumbai. In support of that statement on oath the documents of the
members are produced by them, supposedly scrutinised by CIDCO and
have been appreciated by us.
31. Most of the members have annexed photocopies of their
Ration-cards, many of which are unreadable. The ration-cards are issued
in many of the cases after the year 2000. They show the address of many
of the members to be at or near Durgamata Mandir or Shiv Mandir or at
::: Downloaded on - 01/04/2024 15:49:19 :::
17
Turbe Stores in Navi Mumbai. Incidentally several of these addresses are
in Navi Mumbai itself. The dwelling unit shown in ration-card is therefore in
Navi Mumbai itself. The affidavits of those members making a statement
on oath that they have no dwelling unit in Navi Mumbai is contradicted by
their own documents. Aside from the ration-card no other document
showing the residence at any other place in Maharashtra prior to the date
of the issue of ration-card is produced. The statement on oath relating to
continuous stay of 15 years in Maharashtra is therefore not supported by
most of the members by documentary evidence as required by the
Regulations and specified in the Agenda Note. Almost no member has
produced or annexed his Passport. Many of the applications are bearing
thumb impressions. Most of the members have annual income of their
entire family of about Rs.20,000/-. Several of the addresses are in chawls
or hutment colonies in the far suburbs of Mumbai. These are the persons
who are shown to be members of the aforesaid 6 societies who applied
through their Chief Promoter. They have applied for development of the
plot on which a building has to be constructed in the area suitably
nicknamed Navi Mumbai's Marine Drive. These members are shown
eligible to obtain a flat admeasuring about 1000 sq. ft in a sky-scraper to
be constructed on the plot allotted by CIDCO with amenities like jogging
track, golf course, terrace garden, swimming pool, complete with an
amphitheater. This is on the backdrop that the cost of each flat is not
expected to be less than Rs.25 lakhs.
32. Thus, as an illustration, if we see the file of Respondent No.5 –
Sea Queen Society, first there is an undated letter on its letterhead having
its address at 1/3 Vishwas, L.T. Road, Bombay-92. It is addressed to Shri
::: Downloaded on - 01/04/2024 15:49:19 :::
18
Sushil Kumar Shinde, Chief Minister of Maharashtra asking for allotment
of Plot No.24B, Sector 4 at Nerul. It is signed by one Mansukhlal Nagji
Gangar in Gujarati. Then there is a sketch plan from CIDCO's Planning
Department showing the residential plots in Sector 4 and 6, Nerul.
Thereafter appears on one page an extract of two resolutions supposed to
be passed by the Extraordinary General Meeting of this Society at Navi
th
Mumbai on 20 January 2004. It records that Mansukhlal Nagji is elected
as the Chief Promoter and then he is authorised to do the needful in the
matter of allotment of plot, execution of agreement, opening of bank
account, etc. The first resolution is proposed by M.R. Satra and seconded
by A.P. Bheda. The second resolution is proposed by J.V. Satra and
seconded by N.G. Gala. At the bottom appears a signature of Mansukhlal
Nagji to certify it as the true extract.
33. Then there is a list of members containing 51 names beginning
with Gangar Mansukhlal Nagji and ending with Myatha Shila Samuel.
Thereafter appears applications of each of these members with their
attested photographs. The application has 7 columns.
1. Member's full name
2. Name of the society
3. Member's residential address
4. Member's age
5. Whether he or his family member
owns any apartment/plot in Navi
::: Downloaded on - 01/04/2024 15:49:19 :::
19
Mumbai
6. If so, details of it
7. Whether staying in Maharashtra for
15 years.
This application is followed by a photocopy of an extract of his ration card
and an affidavit, amongst others showing his income. This last affidavit is
made by hardly anybody.
34. Now, from this list of 51 of Respondent No.5 – Sea Queen
Society, if we check the first 26, i.e. more than 50% of the applicants, the
picture emerges as follows:-
S.No
Name of the Member Date of issuance
Address Signe d in
Income
of ration card
which
language
p.m.
1. Gangar Mansukhlal Nagji Unreadable Sector 14, Vashi, Gujarati Rs.18,000
2. Shrimant Sakharam Gaikwad 16-8-2000 Near Turbhe
Stores, Navi
Mumbai
Thumb No particulars
3. Mahadevi Sopan Ghanate 17-1-2000 Near Durga
Mandir, Navi
Mumbai
Marathi No particulars
::: Downloaded on - 01/04/2024 15:49:19 :::
20
S.No
Name of the Member Date of issuance
Address Signe d in
Income
of ration card
which
language
p.m.
4. Aleshkumar Ramu
Madheshiya
10-4-2000 Near Turbhe
Stores
Hindi No particulars
5. Nilappa Mahadev Talekar 7-8-1987 Near Turbhe
Stores
Thumb No particulars
6. Sanju Sakharam Gaikwad 16-8-2002 Near Turbhe
Stores
Marathi No particulars
7. Vijay Baliram Satpute 6-10-1995 Near Turbhe
Stores
Marathi No particulars
8. Satra Jitendra Velji 21-1-1989 Chinchpokli English Rs.10,900 p.m.
9. Sanjay Madhukar Shinde 15-7-1999 Near Turbhe
Stores
English Not provided
10. Mahadev Dattaram Tawade 4-12-1989 Dharavi English Not provided
11. Miss Khyerunniss A. Sultan Not annexed Nerul English Not provided
12. Ashok Pirappa Shinde 29-4-2001 Near Turbhe
Stores
English Not provided
13. Namwar Hariprasad Gupta 13-7-2001 Near Turbhe
Stores
English Not provided
14. Ramesh Audut Joshi 8-10-1992 Near Turbe
Stores
English Not provided
15. Bhaleram Sunildutt Pandurang 19-8-2003 Hanuman Nagar English Not provided
::: Downloaded on - 01/04/2024 15:49:19 :::
21
S.No
Name of the Member Date of issuance
Address Signe d in
Income
of ration card
which
language
p.m.
16. Padtare Kashibai Suhadev 29-12-1989 Near Turbe
Stores
Thumb Not provided
17. Yuvaraj Dhanraj Kamble 4-3-1993 Bhiwandi English Not provided
18. Sidhiling Basappa Shinde None Solapur English Not provided
19. Gangadhar Laxman Loke 25-8-1993 Worli Marathi Not provided
20. Parshuram Narayan Bane 15-6-1983 Worli English Not provided
21. Kulkarni Baburav Nagappa 5-1-1993 Sector 18, Vashi English Rs.14,600
22. Khairnar Vishwas Dattatray None Soparole Village English None
23. Ashok Manohar Sapkal 30-10-1993 Soparole Village English None
24. Balkrushna Sahadev Hirlekar 9-7-1970 Keni Road Marathi None
25. Suresh Jagganath Tankkar 19-7-1985 Andheri Marathi Rs.11,850
26. Shivdass Lotan Fulpagar 13-1-1987 Bhiva Patil
Chawl, Dharivali
Marathi Rs.12,000
35. The application for the society is supposed to be received by
the Chief Minister in February 2004. Thus, the persons have to be
residing in Maharashtra prior to February 1989. Out of these 26 ration
cards, only 7 are prior thereto. Out of them also, only three have
disclosed some income, i.e. S.No.8 – Satra Jitendra Velji (Rs.10,900/-
::: Downloaded on - 01/04/2024 15:49:19 :::
22
p.m.), S.No.25 – Suresh Jagannath Tankkar (Rs.11,850/- p.m.) and
S.No.26 – Shivdas Lotan Fulpagar (Rs.12,000/- p.m.).
36. We have scrutinised all the six files. The Petitioners have
placed on record the photocopies of all relevant papers including the list of
members and their applications etc. The pictures emerging in all of them
is practically similar, if not identical. The Chief Promoters of all these six
societies and their income per month as per their affidavits made at the
time of their initial applications are as follows:-
Name of the
S.No
Name of the Chief Promoter Monthly Income
Society
1. Sea Queen Mansukhlal Nagji Gangar Rs.18,000/-
2. Amey D.S. Shinde Rs.12,350/-
3. Sagarika Rasiklal Nagji Satra Rs.20,000/-
4. Sea Link Mayur Rasiklal Satra Rs.14,500/-
5. Sea View Anil Shantilal Mehta Rs.12,000/-
::: Downloaded on - 01/04/2024 15:49:19 :::
23
Name of the
S.No
Name of the Chief Promoter Monthly Income
Society
6. Vinayak Damji Kunvarji Gala About Rs.20,000/-
(since it is stated to
be Rs.2,50,000 per
year)
Most of their members have not disclosed any income and from the prima
facie scrutiny of ration cards, hardly 25% of the applicants are seen to
have been issued ration cards prior to 15 years. Their dwelling houses
are situated in some hutment colony without any precise particulars since
the address given is near Shankar Mandir, Turbhe Stores or Durga
Mandir. Most of the stamp papers are purchased from the same stamp
vendor and the photographs are attested by the same notary. There are
no minutes of any of the societies signed by all the members forming the
society.
37. Ms.Preeti Shah, learned counsel appearing for Respondents
Nos.5 to 10 and instructing Mr.Thorat, learned senior counsel, filed certain
th
documents on 7 October 2005. The first five documents thereof are
photocopies of the undated applications made by the five societies for
allotment of the land made to the Chief Minister and which were already
referred to above.
38. It is esoteric how promoters of societies of such members
::: Downloaded on - 01/04/2024 15:49:19 :::
24
`initially applied not to CIDCO but to the Chief Minister whose office finds
no place in the MRTP Act or the aforesaid rules for grant of any plot of
CIDCO. On the endorsement of the Chief Minister, their applications are
marked as “VVIP” and are teated as such by the officers of CIDCO .
Though there is nothing on record to suggest that the 6 societies were
genuine Co-operative Housing Societies who needed to be allotted a plot
for their own residential purpose, the note of the then Marketing Manager
th
of CIDCO dated 16 March 2004 shows that CIDCO has come to be fully
satisfied as to their genuineness as per CIDCO's own criteria. Though
there were no annexures to the applications for allotment, yet this note
states that the documents of the Promoters were annexed thereto. We
are also amazed as to how the then Managing Director, who is an IAS
Officer, got persuaded that these are genuine housing societies satisfying
all the requirements capable of bearing the financial burden.
th
39. The note of the Marketing Manager of CIDCO dated 16
March 2004 then states that Plot No.24 has been split up into 6 plots
bearing Nos.24 to 29. This was to be for 5 societies who had until then
applied for allotment. Interestingly the request in the application for
Respondent No.10 Plot No.29,
allotment of is specifically for a number
th
given by the Marketing Manager of CIDCO in his note dated 16 March
th
2004 as a sub-divided portion of Plot No.24. It is not known how the 6
genuine and independent society of Respondent No.10 came to know that
th
precise plot number at the time of its application. On 26 March 2004
CIDCO has allotted plots to each of the 6 societies under separate though
identical letters to each of them mentioning the fixed price of Rs.10500/-
per sq. mtrs. at which the plot is allotted on “as is where is” basis and
::: Downloaded on - 01/04/2024 15:49:19 :::
25
th
calling for the earnest money deposit (EMD) to be paid on or before 16
April 2004.
Payment of requisite amounts to CIDCO on behalf of the societies
:
40. Thereafter, it is seen that each of these Societies of
Respondents 5 to 10 by their separate though identical letters sought to
forward EMD to CIDCO. The Respondents have themselves relied upon
th
the copy of letters undated but received by CIDCO on 15 April 2004.
Each of the Respondents 5 to 10 has paid Rs.70 Lakhs as per CIDCO's
th
letter dated 20 March 2004 issued on State Bank of “Patiyala” as EMD
for their respective plots. These letters are identical containing the same
typographical and spelling mistakes. They are addressed to the
Marketing Manager of CIDCO showing the addressee to be “Manger” .
All the letters show the same incorrect spelling of the State Bank of
Patiala. The Co-operative Societies have separate addresses of Mumbai
Postal District Nos.92, 86, 14, 19 & 105. It is amazing how all these
Societies could have had Bank Accounts in State Bank of Patiala at Vashi.
The Advocate of Respondent No.6 Ms. Preeti Shah, upon our query,
produced the account statements of the Respondents in the State Bank of
Patiala in a compilation tendered after arguments were over. At pages 25
to 67 are the statement of accounts from Bank of Patiala of these
th
societies including a certificate by the Manager of this branch dated 24
September 2005 which is annexed at page 67. The certificate gives the
account number and then states “This is to certify that we were
maintaining the accounts with us which has since been closed on
11/4/2005”. This includes the account of Amey Cooperative Housing
::: Downloaded on - 01/04/2024 15:49:19 :::
26
Society – Respondent No.6 which is now the amalgamated society of all
the initial six societies. Thus, it is clear that even the bank account of this
th
lead society was closed on 11 April 2005. Nothing is stated as to
whether this society has opened any bank account anywhere thereafter.
These statements show the opening of the accounts of the Co-operative
th
Societies in April 2004 and which have all been closed on 11 April 2005
soon after the Petition was filed. The accounts show the initial deposit
mainly by cash of Rs.1000/- for each of them. There are several clearing
entries of deposits of several lakhs of rupees each. Thereafter there is a
transfer by cheques for payments of the EMD such that almost the entire
account is then wiped off. Thereafter there is a further deposit by clearing
of large sums followed by immediate withdrawal by various cheques to
deplete almost the entire account. The accounts do not show how the
members of the society have collected the funds from their own resources
or how the societies have themselves made deposits or withdrawal
entries. In fact the accounts clearly support the doubt that these entries,
each of which run into lakhs of rupees, could not have been brought from
the coffeurs of the members of any of the societies. These members
having an annual income less than of Rs.20,000/- for the entire family unit
are stated to have contributed the EMD of Rs.70 lakhs per society within a
span of a month from one Bank, their separate Society addresses
notwithstanding. The Bank Accounts of the Societies bear no reference to
any inputs of any of its members.
41. Thereafter, the first, and in some cases even second,
installment of the lease premium have been paid by these Societies,
aggregating to several crores even prior to their Registration. The Chief
::: Downloaded on - 01/04/2024 15:49:19 :::
27
Promoters of the Societies are shown to have made affidavits – as bare
and bereft of substantiating documents as the affidavits of their
members- showing that they are in business or service and are tax
payers. (Copies of such affidavits are produced in a compilation tendered
by the Advocate of Respondent No.6 Ms. Preeti Shah after the
arguments were over). At pages 19 to 24 are the affidavits of the six
Chief Promoters. These affidavits clearly point out that Mansukhlal Nagji
is carrying on business of trading as a grain merchant. Rasiklal Nagji
Satra is in the business of trading as a rice broker. Mayur Satra is in the
business of trading as a rice broker. Anil Mehta is trading as a sole
proprietor of Unique Super Market. Damji Kuvarji is carrying on business
of trading as a grain merchant and commission agent. This is as per their
th
own affidavits all affirmed on 27 September 2005, that is during the
course of the hearing. The affidavit of Mr.D.S. Shinde gives his business
address as NL-1/10, Sector 10, Navi Mumbai, but not his residential
address. He states that he was in service but does not state as to where
he was serving. All of them say that they are taxpayers. All these
affidavits confirm what is stated earlier, namely that the promoters of
these societies were traders in the markets at Navi Mumbai, except
Mr.Shinde, and goes to support the inference that they have collected
their own employees, Mathadi labourers and persons from the hutment
colonies to file the applications as seen from the record. Documents at
Sr.No.27 to 32 are letters signed by the Estate Manager to CIDCO
addressed to the Secretary / Chairman of the six societies stating that the
Corporation will have no objection to mortgage the plot as a security for
loan to be borrowed from Standard Chartered Bank subject to certain
conditions which are mentioned therein.
::: Downloaded on - 01/04/2024 15:49:19 :::
28
42. Incidentally Respondent No. 4 have themselves stated that
they have “invested” over 55 crores on this project. Respondent No.4
claims equities in their favour based upon such investment made by
themselves though it was specifically provided that these plots were not
for builders and were meant for the Societies themselves.
43. It is then seen that Respondent No.4 as a developer has
th
addressed his letter dated 17 April 2004 to the Chief Promoters of all the
6 societies recording that after the payment of EMDs by all of them, the
societies found it difficult to construct a large project and contribute the
finances therefor or even to arrange for installments of the finances taken
from the Bank and so they offered to have the expertise and resources of
Respondent No.4 on a turn-key basis and required Respondent No.4 to
arrange for all the finances and in view of that they handed over the
development of all the 6 plots to Respondent No.4. This strange letter is
written by Respondent No.4 and confirmed by the Chief Promotors of
Respondent Nos.5 to 10. This was even before CIDCO issued letters of
th
allotment/letters of intent to each of the Respondents 5 to 10 on 19 April
2004.
Formation of societies
:
rd
44. It is seen that 4 days thereafter, on 23 April 2004 CIDCO, on
separate identical letters of each of Respondents 5 to 10, granted No
Objection for forming a Registered Society. CIDCO annexed the list of
members to those letters under the signature of its Marketing Manager.
::: Downloaded on - 01/04/2024 15:49:19 :::
29
The number of members of these societies in the meanwhile increased. It
is not known whether the newly added members were also of the same
genre as the earlier members in the list supposed to be given by the 6
societies to CIDCO. We have been told that 52 new members have been
added in that list then. Further new members have been added by
Respondent No.4 later.
45. The growth in the membership is referred in the following
chart:-
No. listed in firm
allotment letter &
agreement to lease
Name of Society No. of Members
No. of members
attached to
application
when cases
processed in
March 2004
Sea Queen (R-5) 51 (pg. 390) 64 64 (pg.402-409)
Amey (R-6) 51 (pg.196) 64 100 (pg.208-216)
Sagarika (R-7) 51 (pg.342) 63 81 (pg.354-362)
Sea Link (R-8) 51 (pg.147) 99 99 (pg.170-174)
Sea View 51 (pg.292) 64 82 (pg.305-311)
Vinayak (R-10) 50 (pg.245) 50 67 (pg.255-262)
::: Downloaded on - 01/04/2024 15:49:19 :::
30
No. listed in firm
allotment letter &
agreement to lease
Name of Society No. of Members
No. of members
attached to
application
when cases
processed in
March 2004
TOTAL 305 404 493
The Societies have been registered under the CO-operative Societies Act
rd th
on 23 June 2004 except Respondent No.5 which was registered on 5
May 2004.
Amalgamation of societies and plots :
46. Even prior to the Registration of these Societies, all of them,
th
are stated to have passed separate identical resolutions on 30 April
2004 proposing to amalgamate their plots with the other adjoining plots in
Sector-4 of Nerul. The original minutes of the meeting of the Societies
passing these resolutions have not been produced by these
Respondents. The xerox copies annexed to their affidavit in reply
showing the true extract thereof signed by the Chief Promoters of the
Society appear to have been executed in the same ink and show the plot
numbers written in ink in the computer printouts.. It is seen that though
the original application for allotment on behalf of Respondent No.10 was
made by one Damji Kunwarji, the extract of the proposal to amalgamate
on behalf of Respondent No.10 has been signed by one Mr. Shinde.
47. The affidavit in Reply of CIDCO shows a joint request of all the
::: Downloaded on - 01/04/2024 15:49:19 :::
31
st
Societies made by their letter dated 31 May 2005 to CIDCO requesting
amalgamation when 5 out of the 6 Societies were not even registered. To
this letter was annexed the Development Plan of Sector 4 showing all the
6 separate plots (as C+R). This application for amalgamation has
remained at that.
48. Respondents 5 to 10 through their Promoters sought to pay the
th
first installment of the lease premium to CIDCO on 11 June 2004 prior to
the registration of their Societies. The Societies came to be registered on
rd
23 June 2004.
th
49. On 12 July, 2004, five letters of allotment came to be issued
by CIDCO to Respondents 5 to 10.
th
50. On 13 July 2004 Agreements to Lease came to be executed
between CIDCO and the Societies of the Respondents 5 to 10 individually
and separately. The Societies paid the required Registration fee being
Rs.30,000/- each for registration. Though all the agreements have been
registered, stamp duty has been paid only by Respondents 5, 8 and 9.
51. Respondents 5 to 10 applied for approval of the plans of the
societies showing construction of a single building on all the 6 plots of
nd
land on 2 August 2004 even before the 6 plots were amalgamated by
the order of the Registrar of Co-operative Societies. A month thereafter
th
on 7 September 2004, the plans were sanctioned and the commence-
th
ment certificate was issued by the NMMC on 17 September 2004 before
the plots were amalgamated. Hence, construction commenced on the 6
::: Downloaded on - 01/04/2024 15:49:19 :::
32
plots as if they were amalgamated before their amalgamation.
52. All the Societies made another application for amalgamation by
a joint undated letter on behalf of all the 6 Societies signed by Chief
Promoters addressed to CIDCO to request amalgamation, which was
th
received by CIDCO on 29 August 2004. This letter has been signed by
one Mr. Shinde instead of Damji Kunwarji who had made the initial
application for allotment of plot on behalf of Respondent No.10. Besides,
it is signed also by one Navin Makhija, the deponent of the affidavits on
behalf of Respondent No.6 instead of the initial Chief Promoter one D.S.
Shinde.
53. CIDCO consented to amalgamate the plots for development
st
on 31 August 2004, two days after receipt of the request for
amalgamation. These Societies however came to be amalgamated into
Respondent No.6 Society by the Registrar of Co-operative Societies only
th
as late as on 17 January 2005. As per the resolution No.8886, maximum
area of each plot was to be 10,000 sq. m. and it was to accommodate 100
members with carpet area of each flat not exceeding 100 sq. m. Nothing
is placed on record as to how a contrary decision is taken within two days
of receiving the application for the same.
54. Thereafter, it is seen that a memorandum of understanding
(MOU) for development came to be executed by each of the 6 Societies
th
with Respondent No.4 as the Developer on 30 August 2004, a day after
which CIDCO consented for amalgamation.
::: Downloaded on - 01/04/2024 15:49:19 :::
33
55. The MOU is for development of plot Nos.24 to 29. Just as in
th
the earlier letter of all the Societies dated 17 April 2004, this MOU also
recites that the societies find it impossible to arrange for funds or had any
expertise for construction of huge projects and therefore, they discussed
with some prominent developers of Mumbai and have now selected
Respondent No.4 and have entered into this agreement for development
under the MOU. Respondent No.4 divided the amalgamated plot in to
th th
block-1 & block-II as shown in the 8 and 9 schedules thereto and as
per the plans annexed as Annexure-A thereto. Residential flats of two
types being 2 Bed-room Hall Kitchen flats (2BHK) and 3 Bed-room Hall
Kitchen (3BHK) were to be constructed for which the developers were to
charge each of the flat purchasers at the rate of Rs.2475/- per sq. ft. of
built-up area instead of the carpet area contemplated in the resolutions of
CIDCO. Arithmetically for an area of up to about 1000 sq. ft. of carpet or
builtup area the price of each flat would exceed Rs.25 Lakhs. The
members of these societies who had showed very paltry or no income
were required to make that payment for the residential flats on “Marine
Drive of Navi Mumbai” at that rate. It would truly be the fabled “Rags to
riches” journey. The then 493 members were to be increased to 756
members such that there would be induction and enrollment of 263 new
members who would be allotted flats and tenaments.
56. As per this MOU, the amenities to be provided for the flats
constructed in Block-II interalia included swimming pool, tennis court,
squash court, jogging track, gymkhana, club house, multipurpose house,
and landscaped garden, amphitheater etc.
::: Downloaded on - 01/04/2024 15:49:19 :::
34
th
57. On 9 September 2004 amalgamation charges are shown to
have been paid by Respondent No.6. The particulars of this payment
have not been reflected in the Bank Account of Respondent No.6
produced by their Counsel and it is not known how that amount came to
be collected by that “ Genuine” Society.
th
58. On 14 September 2004 Respondent No.6 submitted a
scheme for amalgamation to the Joint Registrar Co-operative Societies for
th
CIDCO which allowed the merger only on 17 January 2005.
Construction and question of the legality thereof
:
th
59. The Commencement Certificate (CC) dated 17 September
2004 issued by the Municipal Corporationen to the amalgamated society
enjoins the applicant to give notice to the Corporation on completion of
construction up to the plinth level and prior to the taking up of the
commencement of further work under clause 2 thereof. Respondent No.4
on behalf of the Societies commenced and continued construction (up to
th
the 4 floor level) without giving this notice and it led the NMMC to issue a
th
Stop Work notice on 18 December 2004. It is somehow submitted on
behalf of Respondents 4 as well as 6 that the CC was not for construction
of plinth only and hence further construction is not invalidated. A reading
of the CC annexed to the affidavit in reply of Respondent No.6 itself
shows this to be an erroneous argument. As per the CC, the notice
containing the intimation is required to be given to NMMC by Respondent
No.4 or the Architect of Respondent No.6, (on whose behalf Respondent
No.4 was carrying on construction). This notice is to be given upon
::: Downloaded on - 01/04/2024 15:49:19 :::
35
completion of construction upto plinth level. Such a notice is not shown to
have been sent to NMMC. The construction above plinth is, therefore,
contrary to the CC and invalidated thereby.
60. It is seen that this defect of not giving the notice of completion
of plinth never came to be rectified. That was the mandatory requirement
under Clause 2 of the CC. Mr. Singh, learned counsel for the Petitioners,
has argued that the purport of that requirement was for the NMMC as the
Planning Authority to check the quality and the strength of construction of
the plinth level which was of prime importance. FSI-1 was already
st
granted. The plot was shown in Sector-4 as C+R plot. As early as 31
May 2004, well before the issue of CC, the plots were sought to be
amalgamated by a request to CIDCO annexing the plan of Sector-4
showing the C+R blocks. C+R blocks allowed a FSI of 1.5. Upon
amalgamation of 6 societies and the development work being undertaken
by Respondent No.4 the FSI to the extent of 1.5 could have been utilised
and exploited. The plans were sanctioned by NMMC for construction of a
huge building on Block-II of the plan on the footing of amalgamation of the
plots. The certification of the construction of the plinth level was therefore
contemplated to be upon the basis of 1.5 FSI which was directly or
indirectly sought to be exploited. Notice was therefore, to be given to the
NMMC when construction of plinth level was completed and before further
construction was undertaken. After the completion of construction of 7
floors it would be impossible for any Architect or NMMC to certify the
strength or load bearing capacity of construction of the plinth. The
underestimation of that requirement by the Respondents is to beg the
entire issue. The construction of further floors above the plinth level is,
::: Downloaded on - 01/04/2024 15:49:19 :::
36
therefore, obviously illegal construction uncertified by the Planning
Authority.
61. It is contended on behalf of the societies that the stop work
notice had been issued because the amalgamation of the 6 societies was
not effected till then and consequently not shown to NMMC, and that was
only a technical requirement which was satisfied later when the order of
th
Amalgamation by the Registrar of Co-operative Societies dated 17
th
January 2005 was given to the NMMC on 19 January 2005. It is
contended that the construction becomes validated as soon as the
permission for amalgamation is forwarded to NMMC.
Agreement with the builder and writing off all the rights of the
societies in favour of the builder :
62. The fact remains that a blatant use of 6 plots as one
amalgamated plot is made before submission to and permission from any
lawful authority. This shows a complete control of the entire plot under but
one hand of Respondent No.4. All the acts done prior thereto are without
keeping a straight bat.
63. Respondent No.6 in whom all the other Co-operative Societies
sought to merge upon amalgamation entered into the Final Development
st
Agreement with Respondent No.4 on 31 December 2004 before
th
amalgamation. That agreement came to be registered on 4 February
2005. The market value as determined by the Government for the
property under the agreement has been shown to be 12.45 Crores. The
::: Downloaded on - 01/04/2024 15:49:19 :::
37
th
relevant stamp duty along with penalty has been paid on 4 February
2005.
64. Under that Agreement, Respondent No.6 Society (representing
all the 6 societies now merged into it) authorized Respondent No.4 to
develop the residential plot admeasuring 30712.697 sq. mtrs. to construct
a building with a FSI of 40681.01 sq. mtrs. Respondent No.6 executed an
irrevocable Power of Attorney in favour of the nominees of Respondent
No.4 contrary to the Regulations under the MRTP Act.
65. Under Clauses 9 & 10 of the said Agreement Respondent No.6
declared that certain members of the societies had resigned their
membership and that Respondent No.4 would be entitled to recommend
new members in their place for which Respondent No.6 would obtain
written permission of CIDCO and admit the new members as
recommended by the developer, Respondent No.4 without any objection
from any of the members.
66. Under Clause 14 of the said agreement it is stated that some of
the members had not resigned and that they also did not desire to
continue as members so that their membership would be transferred. In
the event any of those members desire to acquire a new flat in the new
construction, that will be upon payment of such consideration as may be
mutually agreed.
67. Consequently every single old member was to be eliminated;
some of them had already resigned and the others undertook to resign
::: Downloaded on - 01/04/2024 15:49:19 :::
38
and transfer their membership. If any of the members did not, they would
obtain the flat constructed by Respondent No.4 at a higher consideration
which was not specified. Their prices would be governed by the market
and as determined by Respondent No.4. Consequently all the members
who were supposedly scrutinized by CIDCO as genuine members of the
society would get nothing in the new construction. They are mere names
which are to be now deleted and substituted.
68. Under clauses 10,11,12,13 and 14 of the agreement the
Respondent No.4 was to appropriate all the flats to itself in favour of its
“Recommended”
new members unilaterally by Respondent No.4 who
would have made payment of costs, charges, expenses and consideration
to Respondent No.4 as mutually agreed between them. Under clause
29.6 the office bearers of the society had to admit these members. The
societies accordingly signed off all the rights which until then belonged to
them, within a few months of their existence and even before their
amalgamation. There would accordingly be a complete rejuvenation of
the society which would be the society of the new members intoduced by
Respondent No.4. We are told that from time to time new members have
been inducted by Respondent No.4 and their induction allowed by CIDCO.
Thus, on the last count, there are 756 members of Respondent No.6.
69. It is necessary to quote the text of the relevant portion of
clauses 9 to 14 and 29.6. They read as follows:-
“9) The society has informed the Developers that certain
members of the said society have resigned their membership.
::: Downloaded on - 01/04/2024 15:49:19 :::
39
The Societies have handed over the list of such members to the
Developers for their information and record.
10) The developers shall be entitled to recommend to the
Society new members in place and stead of such resigned
members as also new members according to the tenements
available and the societies shall obtain written permission of
CIDCO and if any, additional permium is required to be paid, the
same will be paid by such new members / developers / Society.
11) The society has under the aforesaid Power of Attorney
granted powers to the said office bearers of the Society to admit
new members as recommended by the developers. No
member of the society shall object to the admission of any such
members by the said Constituted Attorney/ Office bearer.
12)........ the Developers shall be entitled to construct the
building/s on the said plots and recommend new members to
the Society for the new residential premises constructed.
13) Such recommendation shall be made by the Developers
only on receipt of the payment required to be made by all
members including the costs, charge, expenses, such
consideration and other amounts which will be payable under
the agreement which may be made between the developers
and proposed members ............. The Developers shall
appropriate consideration received from such proposed
::: Downloaded on - 01/04/2024 15:49:19 :::
40
members without in any way being accountable to the society.
14) The Society has informed the Developers some of the
members who have not resigned but continue to be members of
the society ALSO DO NOT DESIRE TO CONTINUE AS THE
MEMBERS OF THE SOCIETY. The Developers will give their
consent to the above Constituted Attorney / officer to transfer
their shareholdings and/or to resign their membership.
However, if such or any member desires to acquire new flats in
the new construction he shall be liable to pay such
consideration as may be mutually agreed.
29.6) On receipt of all amounts from the proposed members
payable by them under the agreements with them the
developers shall submit the list of all such purchasers/
persons/proposed members together with the respective flats
allocated as also parking space to each of them as occupants in
the new building to the society and the office bearers of the
society will admit them as members.”
70. Such a volteface cannot be contemplated except by the initial
members who were mere namelenders and whom the Petitioners mention
as the employees, nominees or friends of Respondent No.4 alone.
Consequently it can be seen that right from the inception it was only the
Proprietor/Chairman of Respondent No.4 who called the shots. Such an
inference is inescapable.
::: Downloaded on - 01/04/2024 15:49:19 :::
41
71. This is because except one Mr.Shinde, the other Chief
Promoters of the six societies are wholesale traders / merchants in the
markets that have come up or shifted to the Navi Mumbai area. This is
accepted by the counsel for the societies. Most of the proposed members
of the six societies appear to be hutment dwellers in the Navi Mumbai
area and from their occupation appear to be Mathadi or labourers working
in these markets. Their ration cards are also of recent oigin. The six
promoters having collected such a motley crowd have signed off their
rights in favour of Respondent No.4 and his nominees by clearly accepting
that Respondent No.4 has arranged all the funds. Thus, persons were put
up who were nominees, employees and friends and entirely ineligible to
otherwise apply as members of the societies genuinely in need of and
capable of acquiring allotment of a plot for construction of a society. This
was done not for one, but for 6 adjacent, contiguous plots. Respondent
No.4 worked to have them amalgamated and even before amalgamation
was granted, sought to transfer the entire membership of all those
hundreds of members under specific written clauses in the agreement.
72. Even the residual rights of Respondent No.6 society have
come to be terminated under the agreement. As provided in the
agreement, TDR, if any, utilised on the said plot was to belong to
Respondent No.4 alone. The construction was to be put up as
Respondent No.4 deemed fit. Upon the grant of any additional FSI the
benefit was to accrue to Respondent No.4 alone. The concessions for
development of any area free of FSI was to accrue to Respondent No.4.
If the plot was ultimately found to be of more than the area mentioned in
the agreement upon survey, Respondent No.4 would be entitled to real
::: Downloaded on - 01/04/2024 15:49:19 :::
42
boundaries of the plot and the society was not to raise any objection in
the development work. In fact it was enjoined to sign all documents,
applications etc. as required by the Respondent No.4 under clauses 15 to
26 of the agreement.
73. Further under clause 29.3, Respondent No.4 was to receive
and retain all the monies from parties to whom the flats would be allotted
and appropriate them without rendering accounts to Respondent No.6. It
was then recorded in clause 29.7 of the the agreement that the society
would not even be able to correspond with any of the proposed members,
but only to sign all the papers and documents for securing the society's
land to enable Respondent No.4 to raise funds thereon. This shows a
complete assignment of their rights by the societies in favour of a builder
which is not permissible under the Regulations or the Board resolutions.
74. Under clause 34 Respondent No.4 was to put up the name
board and appoint agents for marketing the flats, and install antennae on
the roof. In short, Regulation No.4 was permitted to deal with the property
entirely at its free will as it deemed fit and proper without any fetters
whatsoever as if it belonged exclusively to it.
75. As the climax of this endevour it was agreed in clause 40
between Respondent No.4 and 6 that neither of them would be entitled to
terminate the agreement though they would be entitled to specific
performance thereof. It need hardly be mentioned that the withdrawal of
the right of termination without consideration would make the entire
agreement void. The grant of the legal right of specific performance,
::: Downloaded on - 01/04/2024 15:49:19 :::
43
which would be availed of only by Respondent No.4 in whose favour the
agreement was grossly tilted, would accrue to a developer a right contrary
to the law laid down by precedents that specific performance of
agreements for development is otherwise not available. That apart, the
object of the agreement is of such a nature that if permitted it would defeat
the provisions of the Regulations and the Board resolutions constituting
the law holding the field and would be void under section 23 of the
Contract Act.
rd st
76. On 23 March 2005 and 31 March 2005 by several letters
purportedly of the Assistant Estate Officer of CIDCO several additional
members were permitted to be enrolled in Respondent No.6 society for
which CIDCO claims to have taken transfer charges. The various
documents of the parties at various stages show varying numbers of
members and upto as many as 756 are shown as new members being
“genuine”
inducted in Respondent NO.6 Society who are perhaps the
purchasers of the flats fom Respondent No.4 for consideration at the price
mutually agreed between them and Respondent No.4. These are the
parties who never applied to be allotted any plot by CIDCO for
construction of a Housing Society. They are admittedly the members
“Recommended”
by Respondent No.4 as per various clauses of the
st
Final Development Agreement dated 31 December 2004 with
Respondent No.6.
77. What is further interesting to note is that at pages 75 to 78 of
the compilation tendered by Ms. Preeti Shah is a list of 46 names of
members who have taken loans from various banks and financial
::: Downloaded on - 01/04/2024 15:49:19 :::
44
institutions. Out of them only the person mentioned at Sr.No.16 is stated
to have taken loan from Standard Chartered Bank. Hardly anyone from
amongst these 46 persons is shown in the original list of members to form
the six societies. Thus they are all new comers. Lastly, at page 79 there
is a list of 12 persons with the caption “List of members who had resigned
but are continuing”. Thus, on their own admission out of a very large
number of original members, only 12 who had resigned are stated to be
continuing and admittedly 46 new members are sought to be included who
were not there in the original list of members.
78. After the execution of such a one-sided Development
Agreement and recording that many of the members have already
resigned and the others undertook to resign, the respondents have
chosen to show how they had an after-thought and how that act was
undone. The Chairman of Respondent No.6 filed the further affidavit as
th
late as on 26 September 2005 after the Petition was part-heard before us
and sought to show that since the members were confused and
dissatisfied about the amenities provided, they had desired to resign, but
after the amenities were clarified they had decided not to resign and that
all the initial members have continued as members till date. Just how
false that statement as can be is seen from the fact that all the luxurious
amenities that are now shown to have been granted were already
provided to the members in the MOU itself as well as in the Final
Development Agreement. In fact in the MOU the amenities included an
amphitheater which appears to be absent in the list of amenities annexed
to the Final Development Agreement to lease.
::: Downloaded on - 01/04/2024 15:49:19 :::
45
79. This affidavit mentions the names of the initial Chief Promoters
of the 6 societies. The present Chief Promoter of Respondent No.10, one
Mr. Shinde, is not shown as such in this affidavit. It is not known how he
became the Chief Promoter of the said Society which applied later than
the other societies and whose application was not only directed to be put
up by the then Chief Minister but to be put up by a specific date within a
week of the application having been made, and even before its copy was
received by the Managing Director of CIDCO.
80. It appears that thereafter the Respondent No.4 put up its Board
on the said plot and commenced development.
81. The Agreement of Lease between CIDCO and Respondent
Nos.5 to 10 specifically provided for a restriction against Transfer. Yet
the Societies transferred all their rights, interests and title to Respondent
th
No.4. Thereupon CIDCO gave a notice dated 28 February 2005 to the
Societies terminating their lease and resuming the land.
82. CIDCO received a reply from the Advocates of the Societies
th
dated 14 March 2005 that since the lease deed had not been executed
after the agreement to lease, the restrictions against transfer and
assignment do not apply and that the mere fact that Respondent No.4
displayed their Board on the Society premises does not mean that any
rights were transferred to them and that even others including IAS Officers
got their plots developed similarly. Surprisingly, Mr. Hegde, learned
counsel appearing on behalf of CIDCO, has contended before us that in
view of such a reply CIDCO cannot enforce its rights under the
::: Downloaded on - 01/04/2024 15:49:19 :::
46
Agreement to Lease to terminate the lease and to evict the societies and
resume the said plots. CIDCO has apparently accepted this reply and
thrown up its hands in despair despite being the owner of the land.
Unjustified commercial user and claiming of extra FSI
:
83. These acts and execution of documents relate to the
development of a part of the amalgamated plot No.24 for residential use
by Respondent No.4 purportedly for the society of Respondent No.6. This
part consists of what is shown as Block-II in the plan. The plots initially
allotted being plot Nos.24 to 29 and later amalgamated as plot No.24 also
consist of what is shown as Block-I in the Development plan.
84. This Block-I is the part of the plot which is now proposed to be
developed for commercial use. No commercial use is allowable in a
purely residential plot (except a 2% area to be used for shops for bare
necessities). Only a purely residential plot is to be allotted to genuine Co-
operative Societies for the residential purpose. The commercial use is
only in a plot specified as C+R in the plan. C+R use is specified in sector-
4. Such a use can be made not by purely Co-operative Housing Societies
but by development of plots for the purpose of C as well as R. This would
be developed by builders. The builders cannot get such plots for dual
use except when tenders are invited. Tenders have not been invited for
Plot No.24 on the ostensible ground that there was tremendous demand
by genuine Co-operative Societies to be allotted plots for residential use.
Such a plot has been made over to a builder, Respondent No.4
masquerading under a shroud as shown above. The exploitation for
::: Downloaded on - 01/04/2024 15:49:19 :::
47
commercial use has been similarly proposed by the same back-door
method.
85. Respondent No.4 have sought to rely upon further Resolutions
of the CIDCO Board for justification of their action for commercial
development of Block I. These are Resolutions Nos.9047 and 9048 dated
rd
3 June 2004. The additional 1.5 FSI claimed by the Societies was
sought to be granted under the Board Resolution No.9047 allowing 10%
user for commercial purpose. Further the commercial user was allowed
to be increased by “expansion of user” from 10% to 20% of the plot area
under a further board resolution No.9048. The affidavit in reply of
Respondent No.6 shows applications made by Respondent Nos.5 to 10
st
for being allotted 10% of expansion of user”
On 31 August 2004 to CIDCO “
for construction of offices, bank, show-rooms and show-windows (which is
“Commercial use”
the other expression for what is popularly known as ),
the benefit of which would accrue not to Respondent No.6 Society, but to
Respondent No.4 under the terms of the Final Development Agreement
and which is contrary to the provisions of the Maharashtra Ownership
Flats Act, 1963 (MOFA).
86. CIDCO has granted permission to each of these societies on
th th
7 September 2004 and again on 27 September 2004 for allowing such
use subject to payment of lease premium. Consequently it is seen that
CIDCO has permitted the 6 societies the expansion of user and the
consequent exploitation of Block-I of plot No.24 for Commercial use by
th
their letter dated 17 September 2004, 10 days after the plans were
approved by NMMC and the commencement certificate issued for one
::: Downloaded on - 01/04/2024 15:49:19 :::
48
single residential building.
87. Strangely, it is contended on behalf of Respondent No.4 that
Respondent No.6 Society will benefit from such change of user as the
additional FSI would be given at ½ the base price of R+C and that
CIDCO would not incur any loss since it grants additional FSI only on
payment of premium. We are not concerned with only the actual loss or
gain of any party. What is challenged is the basic grant made by CIDCO.
88. Each of these societies is shown to have made payment of
th
additional lease premium on 20 September 2004. These premiums are
made by 6 demand drafts serially numbered 1147 to 1159 to 1161 all
drawn on ICICI Bank. It may be remembered that the earlier payment for
earnest money was by demand drafts drawn by these societies on the
State Bank of Patiala. The Respondents have not shown their Bank
Account statement in ICICI Bank. The fact that they have made the
requisite payment for the application for expansion of user as commercial
use is not shown.
89. It is important to note that though the sanctioned plans are not
produced before us, the proposal for the residential building to be
constructed on plot No.24 as the only construction on the date of the
approval of the plans in August 2004 was such as to leave the entire
space of Block-1 without construction. Conveniently enough, on that
space of Block-I, 10% expansion of user has later on been sought to be
allowed by CIDCO to construct a shopping arcade. This Block-I is
admeasuring about 10000 sq. mtrs. equivalent to about 2.1/2 acres
::: Downloaded on - 01/04/2024 15:49:19 :::
49
marked S-1 and S-2 (S denoting `Shop') on the plan. This plan is stated
Vineeta Estate Pvt. Ltd.
to be put up by one The Petitioners learnt
towards the end of 2004 and beginning of 2005 that Vineeta Enterprises
Pvt. Ltd. was a sister concern of Respondent NO.4 and it sold the
commercial shops sought to be constructed by exploiting the FSI for –
commercial purpose under the name of “Palm Beach” Arcade under the
st
plan stated to be submitted on 1 March 2005, but not yet shown to be
sanctioned. It is seen that the exploitation of commercial FSI of plot
No.24, which is completely contrary to the regulations, is a denouement of
the plot conjured by Respondent No.4 with CIDCO.
90. This entire exercise has brought to light a camouflage right
from the inception masked under the facade of a contract with CIDCO.
rd
The Resolution No.8848 of 23 October 2003 was passed to give the
plots to the genuine societies at fixed price and is supposed to have been
tremendous
passed due to tremendous demand for such plots. The “
demand” of Housing Societies which purportedly drove CIDCO to enter
into this exercise is later on stated to have come to a naught. However,
th
only 2 letters dated 25 August 2003 purportedly of 2 promoters of 2
societies (which are identical in content as well as date and the list
showing their members) supposedly made the initial application to allot to
them what was then called Plot No.24. This application was made for 2
plots admeasuring 19000 sq. mtrs. each, which was approximately the
area of the suit plot No.24 upon amalgamation. CIDCO sought to allot
plot No.24 admeasuring 18500 sq. mtrs. approximately to both these
th
societies by its letter dated 7 October 2003. That letter made a reference
th
CM
to the Society's letter bearing No.GCHS/ /03/110 A dated 8 February
::: Downloaded on - 01/04/2024 15:49:19 :::
50
2003. This letter was however followed by the next letter of CIDCO dated
th
11 December 2003, cancelling the allotment to both the Societies.
Surprisingly neither of the Societies has taken exception to the unilateral
cancellation.
91. Mr. Hegde, learned counsel appearing on behalf of CIDCO,
conceded that aside from the two Societies which applied initially, not a
single other society had applied for being allotted the said plot. Thus, the
tremendous demand”
very exercise was for the “ that never was.
92. Documents 6 to 13 of the compilation without any affidavit filed
by Advocate Ms. Preeti Shah on behalf of Respondent No.6 are
applications made by some other persons and housing societies for
various purposes including for allotment of plots of land. We have already
rd
referred to the agenda note for Resolution No.8848 dated 23 October
2003 which referred to the so-called tremendous demand from the
promoters of housing societies for allotment of plots. Obviously, the
agenda note refers to the applications which must have been made prior
thereto but what we have seen is that only two such applications were
seen in the files of CIDCO. All these letters now produced are
rd
subsequent to 23 October 2003. That apart, one does not know how
Respondents Nos.5 to 10 societies got copies of these letters which were
addressed to the higher authorities such as the Chief Minister. It is not
understood how Respondent No.6 could have in its possession such
copies or what is meant to be conveyed by them. In any case, these
subsequent letters cannot explain the so-called “tremendous demand”
rd
which existed prior to the resolution dated 23 October 2003.
::: Downloaded on - 01/04/2024 15:49:19 :::
51
93. The applications for allotment of plots 24 A to 24 E and then of
Plot No.29 by letters of the Societies of Respondents 5 to 10, identical in
all particulars, complete with the typographical errors, unmistakably show
that they were got up letters. The endorsements on the letters show the
quick approval from the high authorities. The payment of EMD from a
single bank in Vashi cannot explain the payments made by the Societies
whose addresses are shown to be scattered all over Mumbai. The Bank
Account Statements, produced by the Advocate of Respondent NO.6
show large credit and debit entries, which are not shown to be traced to
the members of Respondents 5 to 10. The lack of date as well as any
telephone number on the letters show their dubious character. The
documents of the list of members of each of the Societies show that they
were indeed mere nominees of the one in control and management of the
scheme. The documents further show that these persons do not even
meet the eligibility criteria shown in the Agenda Note to the resolutions
themselves. Such members have not shown how they collected and paid
st nd
the huge EMD as well as the 1 and even the 2 installments of the lease
premium. The chronology shows that the Societies applied to
amalgamate and pay the lease premium even before they were
registered. They submitted plans for construction of one large building
and obtained sanction of the NMMC and commenced construction of a
single building on the 6 plots even before their amalgamation. The
endeavour shows that it was at first an attempt to grab one large Plot
No.24 which was initially bifurcated into 24 A to E and 29 and
subsequently consolidated once again into plot No.24, as exigencies
permitted. Despite the specific contractual restrictions against transfer as
laid down in Clause 5 of the agreement to lease executed by all the
::: Downloaded on - 01/04/2024 15:49:19 :::
52
societies with CIDCO, the MOU and the consequent Final Development
Agreement show nothing but such assignment by transfer of memberships
consequent upon resignation of the initial members and the substitution of
the new members. These documents show a complete signing off of the
rights of all the members of the society. The consideration shown in the
MOU, for the plot which was until then not constructed upon and the
facilities to be offered to the members who would be the flat purchasers
complete with a proposed amphitheater, swimming pool, etc. as recited in
MOU, clearly indicate that the initial members from poorer strata of the
society were not to be continued. The division of blocks into Block-I and
Block-2 and the submission of plans for construction on only Block-II for
residential use separately followed up by an exercise for commercial
exploitation on a distinct portion of the plot (Block-I), which until then was
not even amalgamated, shows the blue print of a deeply conceived
architectural design to put up a development not contemplated even by
the resolutions of the CIDCO Board.
94. The inescapable inference which flows from this narration is
that the entire act is a conceptualisation of an egregious plan by a
developer to obtain a plot meant for C+R with an FSI of 1.5 under a guise
of it being a plot only for residential use requiring construction of FSI-1 for
genuine housing Societies. This is undoubtedly with the approval of the
higher authorities concerned resulting in the convenient actions or
omissions.
95. It is seen that almost no procedure has been followed as
prescribed by law being the MRTP Act and the Rules made thereunder.
::: Downloaded on - 01/04/2024 15:49:19 :::
53
Even the board resolution Nos.8848 and 8886 have been breached and
allowed to be breached. The very induction of the societies is beguiled.
The fixed price for allotment of land to genuine societies is put to use by
the societies which are not genuine. The tender price which could have
been obtained by advertising the plot for sale amongst really “the top-most
builders of India” could have fetched far higher price to CIDCO. As against
that, plots have been given out only to co-operative societies which are
sham and feigned. It is the most outlandish grab by Respondent No.4 as
a recussant sleaze under the shroud of Respondents 5 to 10 societies
which existed only on paper.
96. It is, therefore, essential to consider the specific provision of
law under which these acts have been done by CIDCO as well as
Respondent Nos. 4 and 6.
Relevant regulations and rules governing lease of land to cooperative
housing societies :
97. Development of Navi Mumbai by CIDCO was to be made
under Section 118 of the MRTP Act. The CIDCO (Lease of land to Co-
operative Housing Society) Regulations 1995 were framed essentially for
the disposal of the land by CIDCO as the Developing Authority under
Section 118 of the Maharashtra Regional and Town Planning Act, 1966
(MRTP Act).
98. At the relevant time the said Regulations, as amended in
1999, governed the grant of such plots. It will be material to go through
::: Downloaded on - 01/04/2024 15:49:19 :::
54
the regulations:
(a) Under Chapter I Rule 1 (ii) the Rules were to apply to
all lands interalia in New Mumbai.
(b) Under Rule 3(1) CIDCO was required to publish a
scheme to invite the applications from persons intending to promote
Co-operative Housing Societies.
(c) Under Rule 3(3) the persons applying were to fulfill
two conditions being that they would be residing in Maharashtra for atleast
15 years, and had no residence in New Bombay.
These were conditions required in the Agenda to the Board
Resolution No.8886 also.
These are precisely the conditions which are not fulfilled in
the instant case as seen from the files of CIDCO.
(d) Under Rule 4 the Promoter was to submit an
application in the prescribed form and pay scrutiny fees as required by the
CIDCO.
The application was to be submitted to CIDCO and the Chief
Minister .
(e) Under Rule 5 after seeing the eligibility of the persons
::: Downloaded on - 01/04/2024 15:49:19 :::
55
intending to promote the society, CIDCO may issue letter of intent to lease
the land.
This contemplated actual verification and scrutinisation of all
the members applying which has been found to be woefully lacking in
the instant case.
(f) Under Rule 6 CIDCO is entitled to reject an
application not found in order.
CIDCO has not rejected a single member in the instant case
though most of them did not meet the eligibility criteria.
(g)
Under Rule 10 CIDCO is to issue a letter of allotment
specifying the particulars of the members of the Society.
(h) Under Rule 11 such letter of allotment is to be issued
only after observing that there has been no change of members.
This contemplates that only those genuine members who
sought to apply to form the Cooperative societies, would, if found
eligible, be entitled to be the members.
Thus no change in the members list is contemplated.
::: Downloaded on - 01/04/2024 15:49:19 :::
56
In the instant case, the documents on record show a
complete mechanism to substitute all the original members .
(i) Under Rule 12 CIDCO and the Society are to execute
an Agreement of Lease specifying the members of the Society therein.
(j) Under Rule 13 the agreement of lease is required to
expressly satisfy amongst other conditions that the Society must construct
a building on the leased plot of land and allot apartments for self
occupation of its members whose particulars are mentioned in the
Agreement of Lease.
This is to ensure that only those genuine societies who needed
to be allotted plots of land for the members who have come together to
form the society actually construct the building on that plot of land for
the occupation of themselves.
From what is narrated earlier, this rule is breached in its
entirety .
(k) Under Rule 14 to 17 any kind of transfer or
assignment either by the Societies or its members, of the land of the
Society or the flats respectively is prohibited for 5 years except with the
approval of the Managing Director of CIDCO for the cause of VIS
MAJORE.
::: Downloaded on - 01/04/2024 15:49:19 :::
57
Upon amendment of Rules in 1999 the restriction against
transfer has been relaxed upon obtaining prior permission of the
Managing Director of CIDCO.
This implies discretion of the Managing Director which is
required to be used judiciously and only in exceptional cases and not
arbitrarily, perversely, unreasonably or without application of mind.
Under the Agenda note to resolution No. 8886 the period of
restriction against transfer has been reduced from 5 years to 3 years.
In the instant case, transfer of membership is provided
practically in its entirety and that too at the outset
.
(l) Under Rule 18 the Society is prohibited from
admitting any new member at any time. No member is to cease to be so
by resigning or otherwise except with the prior written permission of the
Managing Director of the CIDCO.
Upon the amendments of the Rule in 1999 the restriction
against ceasure of membership is removed. Admission of new members
can be made with the written permission of the Managing Director
under prescribed conditions. In the Agenda to the Resolution No.8886
the restrictions of change on members is to the extent of ¼ of the
members, but after 3 years of membership.
::: Downloaded on - 01/04/2024 15:49:19 :::
58
The maximum number of members in the Agenda Note is to
be 100 in each Society. Though therefore, new members can be added
up to the maximum limit, the present number of members being 756
has exceeded that limit also within the initial 3 years period.
(m) Under Rule 19 the construction of the flats in the
building of the Society is required not to be in excess of the members
recorded with CIDCO. The Society is enjoined not to permit any person
other than its members to occupy any premises in the building.
Under the amended rules of 1999 the last requirement is
removed, so that new members are permitted. However, reading Rules
18 and 19 together it can be seen that transfer of membership would be
permitted, if consented by the Board, upon considering each individual
case after 3 years of membership. It does not contemplate en mass
transfers.
New members would come in only after 3 years.
Those members are also expected to be “genuine” members to
whom the present member would transfer his/her individual flat and
not those “recommended” by a builder like Respondent No.4.
(n) Under Rule 20 members are prohibited from
appointing any agents or attorneys in connection with the membership of
the Society or the flats of the members.
::: Downloaded on - 01/04/2024 15:49:19 :::
59
Respondent No.4, has admitted to have been nothing but the
agent of the Societies, his investment of Rs.55 Crore itself exposes this
fact. The execution of the Power of Attorney, which is directly
contrary to this Rule, is also admitted by Respondent No.4. It
need hardly be stated that the contract of agency is a void contract
being contrary to the Regulations under the MRTP Act.
(o) Under Rules 22 and 23 any member or the
Society itself committing breach of the Agreement to Lease or the Deed of
Lease or the conditions of the Regulations respectively are liable for
eviction.
In this case there have been breaches at each stage, difficult to
count and yet no action is initiated .
( p) Under Rule 24, the Regulations are deemed to be
incorporated in the Letter of Allotment, Letter of Intent, Agreement of
Lease and the Deed of Lease to be executed by CIDCO with the Society.
Hence, any other contract to the contrary executed by the
Society with any third party (including its agent, which is itself
prohibited under Rule 20) is void as being in contravention of the
Regulations. This, therefore, vitiates the MOU and the Final
Development Agreement which are wholly inconsistent with the
Regulations.
::: Downloaded on - 01/04/2024 15:49:19 :::
60
(q) Under Rules 26 and 27 members are bound also by
further Rules framed under Section 159 and 118 of the MRTP Act, 1966.
Hence, it is seen that the scheme of Development cannot be
implemented except under and through these Regulations, which
have the force of law.
In the present case, the entire development is against the
letter and the spirit of these regulations
.
99. In the teeth of such facts Respondent Nos. 4 & 6 contend that
there has been no breach of the Regulations which admittedly apply to
Respondent No.6.
100. It can easily be seen that there are special requirements in
respect of allotment of plots only to Co-operative Housing Societies. The
very basis of the allotment is in a published scheme to ensure
transparency. The applications are to be invited upon such publication
directly from Societies. The eligibility of the persons applying is to be
verified. Persons found ineligible are to be rejected and the list of
members is to be certified. No change in membership thereafter is
permitted. The flats to be constructed are only for “ Self Occupation”.
Further relaxation was brought about in 1999 which gives discretion to the
Managing Director of CIDCO. That discretion must be used such as not
to set as naught the scheme itself. The aforesaid resolutions of the
::: Downloaded on - 01/04/2024 15:49:19 :::
61
Directors are passed to use their discretionary powers. The Lock-in
period of 5 years has been reduced to 3 years. 1/3 of the number of
members who could not transfer has been reduced to ¼ of the number of
members under the Resolution No.8886. This resolution itself permits
larger transfers of membership. The initial regulation specifically not to
allow resignations has been whittled down. However, in the instant case,
there is an exodus of the entire membership as seen from the clause in
the Final Lease Agreement with several members having resigned and
the remaining undertaking to resign and if the same members continue
they would require to obtain their flat only at the new rate to be mutually
agreed by them and the builder. The entire scheme for a Co-operative
Society is therefore, in fact, transformed into a conspiracy for smuggling
in members by the builders, with the only exception that the tender
contemplated for the builders is replaced by a make-believe application for
direct allotment to the Society. Though the entire scheme of the
regulations shows that builders are foreign to the scheme, in reality it is
Respondent No.4 who is acting behind the scene. It has resulted in by-
passing the tender process and sanctioning the plot to a builder, and
entertaining direct applications for allotment of lands to a builder in the
name of fictitious Co-operative Housing Societies in the most coveted
corner of Navi Mumbai.
th
101. The Development Plan published by CIDCO on 9 January
2004 interalia for plot Nos.23 to 29 in Nerul, Bombay initially treated these
plots as one single plot No.24. It was first bifurcated and then
consolidated and shown as C+R. It was initially not reserved for Co-
operative Housing Societies. This showed that Plot Nos.23 to 29, shown
::: Downloaded on - 01/04/2024 15:49:19 :::
62
as one single plot No.24, were not to be allotted to Co-operative Housing
Societies and had to be sold by tender/auction with FSI of 1.5.
102. Such tender/auction, which is the best test or guide, would
fetch the price based upon economies of the market to CIDCO. Instead it
has been appropriated by Respondent No.4 at much lesser price. It is not
for this Court to compute the net loss. It is only for it to protect the public
undertaking (which has failed to protect itself) and consequently the public
from any such enterprise by extricating it in public interest. The notional
loss @ Rs.20,000/- per sq. meter has been stated by the Petitioners. The
most prime plot of Navi Mumbai would certainly fetch a market price far
above the weighted average of Rs.10743/- for the said plot. We are
informed that the State Government, Respondent No.1 has called upon
CIDCO to cancel the allotment made to the Societies, interalia in this
case. (This is based upon the report of one Mr. Shankaran, I.A.S. made
st
on 31 March, 2004 after the Petition was filed). Interestingly enough, on
the one hand CIDCO had referred these plots of Nerul in their brochure as
“Marine Drive of Navi Mumbai”. On the other hand, when the Petitioners
have pointed out that there is an under-valuation of this plot, counsel for
CIDCO and the Respondents has sought to point out that there is a Nala
on one side of the plot and there is a pumping station adjoining it. It is
material to note that in spite of so-called deficiencies the Shankaran
Committee has held that in this and such transaction, CIDCO has suffered
huge losses going into Rs.35 crores.
103. Further, it must be borne in mind that the Resolutions
No.8848 and 8886 are themselves not challenged. They are indeed in
::: Downloaded on - 01/04/2024 15:49:19 :::
63
consonance with the Regulations. It is only the action of CIDCO in terms
of the Resolution which is challenged in this Petition. It is seen that the
Resolutions of the CIDCO Board have not been complied and honoured
by both CIDCO and Respondent No.4 in the name of Respondents 5 to
10.
Defence of the Respondents, legal authorities and the legal position :
104. We are shown that though the Petitioners have made much
about Plot No.24 alone, the reliefs prayed for are in respect of all such
plots, similarly allotted, though all these Societies have not been
impleaded. We are also told that this is the largest grant by CIDCO out of
about 24 such instances and hence the Petitioners press reliefs specially
for Plot No.24.
105. It is contended on behalf of Respondents 4 and 6 that any
interference by the Court would be required only if the transaction failed to
satisfy the Wednesbury principle of fairness. It is astonishing that in the
light of such gross misdemeanour, the Respondents make bold to even
suggest fairness. We would fail the public, just as CIDCO has, if we allow
the actions which have been challenged in this case to be completed. In
fact, it would tentamount of encouragement and perpetuation of blatant
illegality.
106. It is contended on behalf of those Respondents that the
Petitioners have raised 2 issues :
(i) Undervaluation and financial loss
::: Downloaded on - 01/04/2024 15:49:19 :::
64
and
(ii) allotment to dummy Society.
They therefore, contend that any independent valuation be
made to ascertain the loss, if any, in the transaction. The argument is itself
misconceived and made to bag the issue. A wholly illegal act cannot be
accepted by the Court because it may not result in financial loss. That
would be to put money over law. That is impermissible. In any case, in
the present matter, the Government has come out with a report that
CIDCO has suffered heavy financial loss and CIDCO has not disputed the
report. That apart, the contention of the Petitioners is that the allotment is
made contrary to the Regulations and the Board resolutions, and not to a
genuine Housing Society, but to a Builder in the name of a bogus Society,
which has resulted in financial loss to the public exchequer.
107. We may, however, mention that a rough arithmetical
calculation of the transaction shows that the initial payment of EMD of
10% of the price is Rs.4.45 Crores. The further payment at the time of
firm allotment of 90% of the price is approximately Rs.42 Crores.
Respondent No.4 claims to have invested Rs.55 Crores and claims equity
in its favour for such illegal investment. But the MOU shows the prospect
of recovery of Rs.133 Crores @ the initial price of Rs.2475 per sq. ft. of
built up area for about 756 sq.ft. 2 bedroom, hall & kitchen (2 BKH) flats of
at least 715 Sq. ft. each (though there are also 3BHK flats mentioned in
the MOU). Hence, the computation of loss by the Petitioners stated to be
over Rs.35 Crores cannot be said to be erroneous. This price is derived
at the time of execution of the MOU even before the Final Development
::: Downloaded on - 01/04/2024 15:49:19 :::
65
Agreement and before execution of individual Agreements with flat
purchasers, the price of which is not even computed therein and which,
as per the terms of the Final Development Agreement is to be as agreed
between Respondent No.4 and the flat purchasers. Respondent No.4
would obtain such profits after deduction of construction cost.
108. It is contended on behalf of Respondents 4 and 6 that Plot
No.24 is an undesirable and under-developed plot requiring extensive
filling and having a channel running through it. Whatever that be,
Respondents 5 to 10 Societies applied for allotment of such a plot and
Respondent No.4 made it his privilege to develop it (as flaunted in his
website) since it was still the “Marine Drive of Navi Mumbai”.
109. Respondent NO.4 has sought to rely upon the General
Development Control Rules applicable in Navi Mumbai, under which his
plans are sanctioned by NMMC @ the New Town Disposal of Lands
Regulations 1992. This Court is not concerned with whether Respondent
NO.4 has carried on development in consonance with these Rules.
Respondent No.4, as an admitted agent of Respondent NO.6 under the
Power of Attorney executed in their favour, is alien to the Regulations and
cannot even be recognised or reckoned with. As held in the case of
President, Poornatha Vayisha Seva Sangham, Thripunithure Vs. K.
Thilakan Kevanal reported in (2005) 2 SCC 689 relied upon by Mr.
Dwarkadas, learned counsel for Respondent No.4 himself, only the issues
in question in this Petition need be considered by us. The only question is
whether the allotment is illegal as being contrary to the Regulations
framed under the MRTP Act and the Board Resolutions thereunder.
::: Downloaded on - 01/04/2024 15:49:19 :::
66
110. Consequently, though Respondent No.4 has sought to rely
upon further Board Resolutions of CIDCO, (which are not even challenged
in this Petition and with which this Court is presently not concerned), and
hence sought to show their obligations and rights under the MOU and the
Final Development Agreement, we do not see how we can consider any of
those. Suffice it to say that the very contract being void as being totally in
contravention of the Regulations, no equities or legal rights arise in favour
of Respondent No.4.
111. Mr. Dwarkadas relied upon the Judgment in the case of R.D.
Shetty Vs. International Airport Authority reported in 1979 (3) SCC 489 to
claim equities, which according to Respondent NO.4 have arisen in his
favour. That was a case which was held to be suffering from laches. The
Appellant was specifically held to be a person put up by unsuccessful
tenderers (para 35 of that judgment). It was therefore held that in such a
case the Court may refuse relief to the Petitioner if equities are in favour of
the Respondent who has in the meanwhile changed his position. We do
not see how this is the case which can be stated to be suffering from
laches. The Petitioner is a Trust consisting of eminent citizens acting in
th
public interest. The Petition has been affirmed on 16 March 2005. They
are vigilant in their own way but they are not detectives to know various
developments and to take steps accordingly. The Petitioner was aware
about the reputation of CIDCO going down and petition quotes in para 16
(F) from the report of Shri S.S. Tinaikar, I.A.S . (retired) appointed by the
High Court in W.P. (Lodging) No.115 of 2004. An extract from the website
of Respondent No.4 making declaration of development of this plot in first
week of March 2005 is annexed at Exhibit-F and their brochure at Exhibit-
::: Downloaded on - 01/04/2024 15:49:19 :::
67
E to the petition stating that the construction had began a few months ago.
It is submitted on the basis of the brochure that the plots for genuine
societies were sought to be developed admittedly by a builder. In para 16,
there is also a reference to an internal inquiry by the State Government,
which is now stated to be Mr.Sankaran, I.A.S. The records now show
th
that Commencement Certificate was issued on 17 September 2004 and
th
the stop work notice was issued on 18 December 2004 by which date
construction had come upto 4 floors out of a 23 storey arcade. As we
have recorded earlier, the stop work notice had to be given by the
Municipal Corporation because the work beyond the plinth had been
carried out without giving the requisite intimation to it, to carry out the
mandatory inspection regarding the strength of the plinth. The
construction was still continued with impunity and it was ultimately
th
stopped after 20 April 2005 when the Division Bench passed the order.
th
By that time, Respondent No.4 had moved to 7 floor. The entire work is
carried out with impunity and in breach of law. The Respondent No.4 can
not therefore be permitted to take advantage of its illegal acts and to
contend that it has changed its position to its prejudice when the entire
steps are unlawful. Nor can the petition be faulted for laches in any way
since the Petitioners have taken steps as expeditiously as possible as
narrated above. We also do not see how in this case any equity can have
arisen in favour of Respondent No.4 who has not an iota of legal right, nor
has any privity of contract with CIDCO or State Government.
112. Besides, R.D. Shetty (supra) was the case of a Government
contract in which tenders were invited mentioning certain standard of
eligibility. It was held that the Government cannot depart arbitrarily from
::: Downloaded on - 01/04/2024 15:49:19 :::
68
these standards and that such departure would amount to denial of
equality of opportunity to those who felt bound by the standard of eligibility
and therefore, do not submit their tender. In fact, that aspect of the
decision squarely hits the Respondent No.4.
113. In para 10 of this judgment, the Apex Court referred to the
dicta of Justice Frankfurter in Viteralli v. Saton (359 US 335 – Law Ed.
Second Series -1012) that an executive agency must be rigorously held to
the standards by which it professes it action to be judged. The Court held
that it is a rule that has an independent existence though supportable as
emanating from Article 14 also. It is a rule judicially evolved as a check
against exercise of arbitrary power by the executive authority. And then in
para 11, it observed -
“...... The discretion of the Government has been held to be not
unlimited in that the Government cannot give or withhold
largesse in its arbitrary discretion at its sweet will. It is insisted
that the government action is based on standards that are not
arbitrary or unauthorised.”
The propositions apply with full force in our case.
114. Strangely enough, Respondent No.4 has contended that the
Petition suffers from laches and cited Judgments in cases of laches. The
above admitted chronology shows that the illegal acts of Respondent No.4
have spanned the entire period and have continued even pending the
st
petition; the last induction of members were on 31 March 2005 even after
::: Downloaded on - 01/04/2024 15:49:19 :::
69
the filing of the Petition. The revised plan of the said plot has been
th
refused to be approved on 20 April 2005, after the fling of the Petition.
The reliance upon the case of Devidas Rama Chari Vs. BPC Ltd.
Reported in 2005 (1) All MR 423 Bombay DB is entirely misplaced. In that
matter, the Respondent had set up the petrol pump and had changed his
entire way of life whereas the Petitioner was seen to be tardy and indolent
having filed the petition after 4 years. This court rightly refused to
interfere. So is the case of Narmada Bachao Andolan Vs. Union of India
reported in Jt. 2000 (Supp 2) SC 6 of which only para 224 is relied upon,
which states that principles of laches apply to P.I.L. Also. The case of
State of M.P. Vs.Nandlal reported in AIR 1987 SC 251 at 272 was a case
of considerable delay in challenging the grant of liquor licence after the act
complained of, so that the Petitioner was observed to be tardy,
acquiescing and lethargic. Same is the position in the case of State of
Maharashtra Vs. Digambar reported in AIR 1995 SC 1991 where the
petition was filed some 20 years after to redress the alleged wrong.
115. The present petition seeks to undo the damage done to
CIDCO as the Public Authority and consequently to the public at large and
to prevent any further damage. The allotment of plots will have to be
cancelled. As a result, there could be various consequences. The entire
illegal construction put up by Respondent No.4 has therefore, to be
forfeited. That would entail further action. That would further necessitate
the regrant of the concerned plot through tender/auction to builders and
developers or at the fixed price to a genuine Co-operative Housing
Society.
::: Downloaded on - 01/04/2024 15:49:19 :::
70
116. Mr. Singh on behalf of the Petitioners has drawn our attention
to the case of Friends Colony Development Committee Vs. State of Orissa
reported in (2004) 8 SCC 733 in which it was observed that an illegal
th
construction of the 5 floor, of a building for which 4 floors were
sanctioned, was required to be demolished with a compensation fee to be
paid for rehabilitation of occupants liable to be displaced upon the action
taken by the planning authority for the illegal construction. It has further
been observed that “ the arms of law must stretch to catch hold of the
unscrupulous builders.” who “indulge in deviation”. It was also observed
that “Officers indulging in deviations should not be spared”, and that
“private interest stands subordinated to public good.” Following upon that
judgment, we have to examine appropriate corrective measures for the
blatant violations in this case resulting in unauthorised construction.
117. Mr. Dwarkadas appearing for Respondent No.4 has relied
upon the judgment in the case of Printers (Mysore) Ltd. Vs. M.A. Rasheed
reported in (2004) 4 SCC 460, in which case the Supreme Court
criticised the act of the High Court in entertaining the Writ Petition
challenging and alienating land by a public authority by way of a lease.
In that case the Authority had the power to lease, sell and transfer
properties under Section 38 of the Bangalore Development Authority Act,
1976 and the Bangalore Development Authority Rules 1982 which applied
to it. There was no specific restriction, condition or limitation on the power
of the Authority to lease the land for development. The alienation in that
case was questioned only on the ground that no tender or auction was
called and no public advertisement was issued showing any alienation to
be made as required under the allotment rules. It was held that the
::: Downloaded on - 01/04/2024 15:49:19 :::
71
Authorities had power to lease subject to certain restrictions and
conditions. The allotment rules were not applicable to the allotment in
question. The facts of that case are consequentially distinguishable. In
the present case, CIDCO has no authority to lease the land without
following the Regulations which squarely apply. The alienation made in
contravention of the Regulations is therefore challengeable.
118. In the case of Mahendra Baburao Mahadik Vs. Subhash
Krishna Kanitkar reported in (2005) 4 SCC 99, following the judgment in
Friends Colony(supra), it has been held that the direction of the High
Court to demolish unauthorised construction was correct. In that case
upon a portion of land of the Appellants being taken over for road
widening, the Bhiwandi Municipality allowed certain repairs to be carried
out to an old house on another portion of that land. Relying upon certain
wrong documents and incorrect statements, the appellants used that
permission to construct a new 6 storeyed building. The permitted
construction was only of ground + 2 storeys. To accommodate the
appellant, the Municipal Council had passed a resolution to regularise the
unauthorised construction. It was held that the Municipal Council, which
is a statutory authority, has no power to regularise the unauthorised
construction and realise development charges in respect thereof. It was
further observed that demanding such charges without prejudice to the
rights of Municipal Council would not create any legal rights in favour of
the Appellants and that such charges do not exonerate the Appellants
from the consequences of commission of offence or the Municipal
Council for regulation of unauthorised structures. Ultimately, the
Judgment of the High Court holding that unauthorised and illegal
::: Downloaded on - 01/04/2024 15:49:19 :::
72
constructions cannot be compounded and that the structures would have
to be demolished was upheld by the Apex Court.
119. Paragraph 25 from the judgment in the case of Friends
Colony (supra) was quoted with approval in para 44 in this judgment. This
para reads as follows:-
“25. Though the Municipal laws permit deviations from
sanctioned constructions being regularised by compounding but
that is by way of exception. Unfortunately, the exception, with
the lapse of time and frequent exercise of the discretionary
power conferred by such exception, has become the rule. Only
bona fide
such deviations deserve to be condoned as are or are
attributable to some misunderstanding or such deviations the
benefit gained by demolition would be far less than the
disadvantage suffered. Other than these, deliberate deviations
do not deserve to be condoned and compounded.
Compounding of deviations ought to be kept at a bare
minimum. The cases of professional builders stand on a
different footing from an individual constructing his own building.
A professional builder is supposed to understand the laws
better and deviations by such builders can safely be
assumed to be deliberate and done with the intention of earning
profits and hence deserve to be dealt with strenly so as to act
as a deterrent for future. It is common knowledge that the
builders enter into underhand dealings. Be that as it may, the
State Governments should think of levying heavy penalties on
::: Downloaded on - 01/04/2024 15:49:19 :::
73
such builders and therefrom develop a welfare fund which can
be utilised for compensating and rehabilitating such
innocent or unwary buyers who are displaced on account of
Emphasis supplied
demolition of illegal constructions.” ( )
120. Further refering to the earlier case of M.I. Builders (P) Ltd. Vs.
Radhey Shyam Sahu (1999) 6 SCC 464, para 73 thereof was quoted.
The relevant part thereof is as follows:-
“73. The High Court has directed dismantling of the whole
project and for restoration of the park to its original condition.
This Court in numerous decisions has held that no
consideration should be shown to the builder or any other
person where construction is unauthorised. This dicta is now
almost bordering the rule of law. Stress was laid by the
appellant and the prospective allottees of the shops to exercise
judicial discretion in moulding the relief. Such a discretion
cannot be exercised which encourages illegality or perpetuates
an illegality. Unauthorised construction, if it is illegal and
cannot be compounded, has to be demolished. There is no
way out. Judicial discretion cannot be guided by expediency.
Courts are not free from statutory fetters. Justice is to be
rendered in accordance with law. Judges are not entitled to
exercise discretion wearing the robes of judicial discretion and
pass orders based solely on their personal predilections and
peculiar dispositions. Judicial discretion wherever it is required
to be exercised has to be in accordance with law and set legal
::: Downloaded on - 01/04/2024 15:49:19 :::
74
principles.....” (Emphasis supplied)
121. Later, while distinguishing the case of Municipal Corporation
of Calcutta Vs. Mulchand Agarwalla reported in (1995) 2 SCR 995 the
observations in that case were referred in para 47 of Mahendra Baburao
(supra):
“The conduct of the respondent in adopting a hide-and-seek
attitude in completing the constructions in deliberate defiance
of the law calls for severe action. It would be most
unfortunate, and the interests of the public will greatly suffer, if
the notion were to be encouraged that a person might with
impunity break the building rules and put up a construction and
get away with it on payment of fine. All this would be good
justification for making an order for demolition.” ( Emphasis
supplied )
In Mahendra Baburao, ultimately after examining the case of deviance of
the law by construction of 4 storeys in a new construction, the Apex Court
dismissed the Appeal with costs of Rs.50,000/- and called upon the
Municipal Council to carry out the order of the demolition passed by the
High Court.
122. The approach and the observations in that case are true
guide to the action required to be taken in this case also. The seminal
deviation made in this case of allotting lands to fictitious Societies only to
grant it to a professional Builder, Respondent NO.4 which can be
::: Downloaded on - 01/04/2024 15:49:19 :::
75
assumed to be a deliberate act requires no consideration to be shown to
such builder for any construction which he has put up. The construction
put up on the amalgamated plot even before amalgamation cannot even
allowed to be compounded. The acts done in deliberate defiance of the
law and to outwit the law and steal a march over others by breaching the
Regulations cannot be allowed to prevail, unless there is a better way out
by use of judicial discretion guided by expediency in public interest. It will
be within these parameters that directions in this Petition would be
required to be passed taking into consideration the loss and waste which
may be caused by actual demolition of a large seven storeyed structure.
123. Upon the reversion of the land to CIDCO, CIDCO would have
to see that the land is allotted within the framework of the aforesaid
Regulations framed under the MRTP Act, 1966 and as permitted by the
Board Resolutions of CIDCO. Further, upon considering the directions
passed in the case of Friends Colony (supra), the land shall have to be
referred back to CIDCO to be allotted to those genuine Societies under
the Scheme or to be offered to Builders upon a tender.Urban land in
Mumbai as well as in Navi Mumbai is scarce and expensive and cannot
be permitted to be grabbed for profiteering.
124. We are not shown by any documentary evidence the creation
of third party rights infavour of any genuine third parties. In fact we are
shown none at all. We take it that even if certain documents would be
produced, they would be of those members “Recommended” by
Respondent No.4 and accordingly their nominees and for which the
Respondent No.4 alone would be liable.
::: Downloaded on - 01/04/2024 15:49:19 :::
76
The charts filed by the Petitioners after inspection, the direction given
th
on 28 October 2005 and the response of the Respondents :
125. There are two developments in this matter which we must
advert to at this stage. Firstly, after the Petitioners took inspection of files
of CIDCO containing the applications of Respondents Nos.5 to 10 Society,
th
they filed a chart on 6 October 2005 giving particulars of the applicants in
different columns. The first five columns thereof are relevant for our
purpose which were as follows:-
(1) Name
(2) Whether the applicant has signed or has put in his
thumb impression
(3) His address in the application or affidavit
(4) Date of issuance of ration card
(5) His monthly or annual income
Based on this chart, a submission had been made that most of the
applicants were ineligible to become members of the genuine cooperative
housing society.
126. The submission of the petitioners was that the original
members have been only name lenders who were to resign and the
societies were bogus societies. For that purpose, they had filed a chart on
th
6 October 2005 as pointed out above. All parties were permitted to take
inspection, but although the Respondents were served with that chart,
::: Downloaded on - 01/04/2024 15:49:19 :::
77
none of them had chosen to file their response. It is for this limited
th
purpose that the matter was notified for direction once again on 28
October 2005. This development was recorded in that order. In para 3 of
our order, it is specifically observed as follows:-
“The counsel for CIDCO, the builder and societies were all
served with this chart filed by the Petitioners. None of
them have chosen to file their response. It is for this
limited purpose that the matter has been notified today for
direction to bring this fact to the notice of all the parties so
that it should not be said that they did not have any
opportunity to file their response.”
Thereafter we recorded the submission of Mr.Dwarkadas that according to
him, this submission was uncalled for and that the builder was not going to
file his response. Ms.Shah for the society sought to take inspection once
again. By that order, we permitted her as well as CIDCO to take
th
inspection until 16 November 2005. We finally observed in that order as
follows:-
“We expect them to file their response if they deem it fit
only on this aspect as to whether the statements in the
first five columns are correct or otherwise.”
127. As stated above, builder had declined to file any response.
On behalf of CIDCO, one Mrs.Devika Bal, Marketing Officer, filed an
th
affidavit on 16 November 2005 and pointed out few errors and variations
::: Downloaded on - 01/04/2024 15:49:19 :::
78
in the chart submitted by the Petitioners. That however does not detract
from the non-eligibility of majority of the applicants as seen from their
original applications. Shockingly enough, even at this stage the officer
making the affidavit on behalf of the CIDCO does not have the courage to
accept that CIDCO had done hardly any scrutiny worth the name. The sad
part is that when an opportunity is given to a public body, there is neither a
satisfactory explanation forthcoming, nor a readiness to own a mistake nor
a desire to correct.
128. On behalf of Respondent No.6, Ms.Preeti Shah, Advocate
th
filed a statement on 18 November 2005 under the caption “ Response of
th
Respondent No.6 to the chart filed by the Petitioner on 6 October 2005.
It is stated in this response that the charts given by the Petitioners are
incomplete and do not project the complete and correct particulars of the
applicants. It is then stated that the addresses are incomplete. Then it is
stated that out of original 493 members, 460 have given their ration card
and out of remaining 23, 20 had given other documents. Thereafter it is
sought to be explained that many of the applicants had given their new
ration card but had surrendered the earlier one. This is completely an
afterthought. We are concerned with the information which was given by
the applicants to the CIDCO at the outset and the scrutiny or the lack
thereof. Thereafter it is stated that all 493 applicants are genuine and
bona fide members. However, to dispel any doubts, only affidavits of 104
original members are filed. To this statement a chart is annexed giving
the income of some of the original members, but nothing of the kind is in
fact seen from their original applications and this is nothing but an attempt
to improve without any supporting documents whatsoever. The affidavits
::: Downloaded on - 01/04/2024 15:49:19 :::
79
of 104 persons are identical. They state that the charts filed by the
petitioners make allegations which are beyond the scope of this petition.
It is further stated that any order passed on the petition on the basis of the
allegations after hearing of the petition was complete by preparing tables
will cause irreparable harm and injury to the concerned societies and their
members. Along with these affidavits, various supporting documents are
sought to be put in. Thus, it can be clearly seen these affidavits contain
arguments in support of a feeble cause. The files which have come on
record are of CIDCO. The files do not indicate any income worth the
name of most of the proposed members of these societies. They do not
seem to have any proper residential addresses except in some hutment
colonies. They have hardly produced any documentary evidence of 15
years residence in Maharashtra. This is a scrutiny which CIDCO was
supposed to do. CIDCO having not done that, the Petitioners have
pointed out these factors by producing the charts. All these submissions
were already made during the arguments, and the charts were placed on
record only to assist the Court. Right in the Petition it is contended that
Respondent Nos.5 to 10 – Societies are bogus Societies and it was
clearly canvassed that the employees, nominees and acquinatances of
the Chief Promoters were used as namelenders. The Counsel for the
Respondents-Socieites and the builders had defended these submissions
during the arguments, though miserably. Hence, the contention in these
affidavits is an argument in dispair. It is ony to put the Respondents to a
clear notice once again and to seek their explantion, if any, that a specific
th
order was passed on 28 October 2005. From what is narrated above,
CIDCO as well as the societies have miserably failed to explain the
eligibility of the member applicants or that their scrutiny was ever done. In
::: Downloaded on - 01/04/2024 15:49:19 :::
80
fact, the seminal case of the Petitioners that the applicants were the
employees, nominees and friends of the builders has emerged clear after
scrutiny.
Two Civil Applications moved in this petition and the orders thereon
:
th
129. We have noted that by the order passed on 20 April 2005, a
Division Bench had stopped further construction. Respondent No.6 –
Amey Cooperative Housing Society moved Civil Application No.22 of
2005, prayer (a) whereof was to put up RCC construction. Inasmuch as
the very allotment was challenged and further construction injuncted, we
could not permit further construction and hence the prayer was rejected
rd
and so also the civil application by the order passed by us on 3 August
2005.
130. The second aspect of this matter is that as recorded earlier,
prayer (a) of this petition has been that the allotments to Respondents
Nos.5 to 10 societies be quashed and set aside and prayer (b) is to stop
the construction activities. Prayer (c) is an alternative prayer to prayer
clauses (a) and (b) and which prays that in case the construction has
reached an advanced or irreversible stage, Respondents Nos.1 and 2 be
directed to recover in full from the builders / developers and the
cooperative housing societies the difference between the market value
and the price charged by Respondent No.2. As far as this alternate
prayer (c) is concerned, Civil Application No.22 of 2005 was moved
praying in prayer clause (a) thereof that an independent valuer be
appointed to make the valuation of the property so that in the event the
::: Downloaded on - 01/04/2024 15:49:19 :::
81
court is inclined to pass the order in terms of prayer (c), this valuation
could be considered. We disposed of this civil application by holding that
prayer (a) of this civil application will be decided when the main petition is
heard and along with prayer (c) thereof. Civil application was disposed of
without granting any of the other prayers.
131. Now, as can be seen, this prayer (c) was an alternative
prayer. Inasmuch as we have come to the conclusion that the allotments
to Respondents Nos.5 to 10 were unauthorised, there is no question of
our regularising the same. They have also not reached such a stage that
the construction should be permitted to be completed and in any case not
under the authority of these societies which have given it up in favour of
Respondent No.4, the builder.
132. As far as the loss suffered by CIDCO in this transaction is
concerned, the estimate of the petitioners is in the range of Rs.36.50
crores as stated in the petition, and the Sankaran Committee has placed it
at around Rs.35 crores. The learned Advocate General Mr.Kadam was
good enough to place the relevant extract of the Sankaran Committee. In
the reply filed by one Ashok Gharat, Under Secretary to Government of
th
Maharashtra dated 27 June 2005 to Civil Application No.12 of 2005, a
reference was made to the Sakaran Committee Report. In para 2, it is
stated in this affidavit that according to this Committee Report, the
prevailing market rate was not less than Rs.21,000 per sq.m. and that the
Committee was of the view that the loss suffered by CIDCO was
aggregating to Rs.35 crores. This was on the footing of the information
received with respect to the transactions in nearby area. On that footing,
::: Downloaded on - 01/04/2024 15:49:19 :::
82
on a rough basis, Mr.Sankaran had drawn his inference.
133. To this civil application, CIDCO had filed an affidavit of one
Shri V.S. Marathe and in para 8 thereof it was stated that CIDCO was a
statutory agency of the State and since the State had directed CIDCO to
cancel certain allotments, CIDCO had initiated the appropriate process of
issuing show cause notices which included Respondents Nos.5 to 10 also.
As stated above, inasmuch as we are inclined to entertain prayers (a) and
(b) of this petition, we do not think it necessary for us to go into prayer (c).
That is a matter between the State Government and CIDCO and the
concerned parties. In any case, in the direction that we are passing
hereafter, we are taking care of this aspect. We are certainly not of the
view that the construction should be regularised for the bogus housing
societies under Respondent No.4 or for that purpose the loss suffered be
recovered from the soceities or Respondent No.4.
CONCLUSIONS
:
134. Having recorded the factual and legal aspects as above, to
cut the long story into short, the entire problem came up in the following
manner. Five traders and one Mr.D.S.Shinde approached the then Chief
Minister of Maharashtra Mr.Sushilkumar Shinde with undated letters for
the six cooperative housing societies seeking allotment of plots of land
meant for genuine co-operative housing societies. The Chief Minister
endored on five of them to the Managing Director to “please put up” and
on the sixth to process and pass by the specified date. The five traders
and the said Mr.D.S.Shinde collected some friends, Mathadi labourers,
::: Downloaded on - 01/04/2024 15:49:19 :::
83
hutment dwellers, and employees and filed their applications. The officers
of CIDCO did not bother to scrutinise as to whether they were fulfilling the
requirements and allotted the plots to those societies. Inasmuch as these
societies and their members were only name lenders, they entered into
agreement with Respondent No.4, a builder who would finance the project
and signed off all their rights in his favour. Practically all the original
applicants resigned and it is left to Respondent No.4 to recommend
whosoever he wants to bring in. The original plot was for FSI 1 and now it
will be for FSI 1.5 including for commercial user. Plots meant for genuine
cooperative housing societies, given to them at a concessional rate of
about Rs.10,000/- per sq. m. as against the market rate of Rs.21,000 per
sq. m., were grabbed by the builder defeating the very purpose of the
resolutions which CIDCO had passed.
135. By a genuine co-operative housing soceity, we normally mean
an entity formed by people coming together to set up a housing complex
as per their requirmenets and as per their financial capability. In that
process first they come together, hold meetings, understand and assess
each others requirments and financial capability. Then they examine the
likely cost of land and construction and and decide on the feasible area
where such a plot would be available and which they can afford.
Thereafter they search the requisite plot of land, examine the conditions of
allotment and price fixed by the land owning authorities. If they find it
affordable, they appoint an architect, prepare an initial plan as per those
conditions and their capability, again approach the authority with
supporting documents. Simaltaneously, on a tenative indication of the
likelihood of allotment of plot, they proceed to form the society and take
::: Downloaded on - 01/04/2024 15:49:19 :::
84
follow-up steps, such as to collect the fund, pass the bye-laws, approach
the land owning authorities, pointing out that they fullfil the conditions,
approach the municipal body for sanction of the plans and also approach
the financing bodies if loans are required. Thereafter they proceed to
appoint a contractor for construction. In all this process there is a
participation of the members, their meetings, examination of their
difficulties, expections and capabilities. Basically they retain their control
on the entire process all throughout until they occupy the houses as per
their expectations and capabilities.
136. In the present matter, when did all these members of each
society meet ? Did they visualize setting up of a housing complex with a
swimming pool, gymnasium and amphitheatre ? Did they assess the cost
therefor and their own capability ? Did they get any initial stage prepared
by an architect ? Where are the minutes or the particulars of any such
efforts ? Did they ever know that in their names a C plus R complex was
sought to be put up which was far beyond their means ? Did they
examine as to how much finance would be required, how will they arrange
it and repay it and in how many installments ? These basic questions will
arise to any prudent mind.
137. The socieites have produced letters containing permission by
CIDCO to mortgage the property. Most of the members have not
disclosed any income particulars in their original applications, and those
who have disclosed it is seen that their income is mostly less than
Rs.20,000/- per month. Each of these flats will cost nearly Rs.20 to 25
Lakhs, if not more and practically all the members will require a loan of at-
::: Downloaded on - 01/04/2024 15:49:19 :::
85
least Rs.20 Lakhs, considering their financial position. The financing
bodies also examine the repaying capacities before the loans are given
and normally in the case of salaried persons they see to it that the burden
is not more than 20 % to 25 % of their monthly income, so that their loan
is ultimately returned. In the instant case, even if it is assumed that the
loan of Rs.20 Lakhs is sanctioned to each of these members, and spread
over 20 years, even at the rate of 8% interest, the monthly equated
installment will not be less than Rs.20,000/- which is far more than the
monthly income of most of the members.
138. CIDCO which is allotting the plots to genuine co-operative
societies is expected to scrutinise fulfillment of its conditions. The prima
facie examination shows that most of the applicants did not produce
documents justifying their residence in Maharashtra for 15 years prior to
th
the application. As per CIDCO's requirements, at-least 1/4 members
were expected to continue with the society for the initial period. In the
present case, there is a clause in the agreement with the builder declaring
resignations of most of the members and assuring those of the
remaining. The idea behind the relevant rule is to provide affordable good
housing to a stable section of the citizens. When CIDCO spoke of
genuine co-operative socieites a minimum inquiry of their formation and
the capability was expected. This could have been easily done even by a
cursory examination of the documents that were initally tendered. This
was particulary necessary since the plots were being allotted to genuine
societies at a lesser price as against those meant for the builders where
such conditions would not govern. It was CIDCO's own case that there
was tremendous demand from genuine societies for such plots. If that was
::: Downloaded on - 01/04/2024 15:49:19 :::
86
so, it cannot be that somebody applies on behalf of a supposedly genuine
society enclosing applications of large number of ineligible people and yet
CIDCO allots the plots to them without any scrutiny, when other societies
would be waiting.
139. It is thus obvious that the original members of the applicants-
societies were mere name lenders. It was a grand plan to take advantage
of their poverty, lack of understanding and ignorance, and it could not be
executed unless, the original chief promoters, the builders and the
officers of CIDCO at the higher level such as the Managing Directors were
party to it. Would the Managing Directors and the officers of CIDCO have
entertained these applicants who are principally slum dwellers for this
prime plot known as “Marine Drive of Navi Mumbai” , if they were to
approach them without being led by these traders and supported by a
builder and without the blessings of the Chief Minister ? It is either a case
of involvment in the design or of gross dereliction of duty. In either case, it
is unjustifable and highly objectionable and the consequences must
follow.
140. One cannot say that CIDCO had not done good work in the
past, though at times, there has been criticism of some of its allotments
even in judgments of courts. CIDCO has developed a huge township in
Navi Mumbai and also in Aurangabad. A very large section of the lower
middle class, middle class and higher middle class has settled there. Now
suddenly it appears that this device has been invented and with the
participation of the officers of CIDCO right from the Managing Director to
whosoever are the persons below, all the conditions of allotment and
::: Downloaded on - 01/04/2024 15:49:19 :::
87
scrutiny are given a go-by and a prime plot is sought to be handed over to
a builder on a platter. This would have gone ahead but for the
intervention of the Petitioners. It is not that genuine cooperative housing
societies are not available. If officers of CIDCO were to look around, they
could have searched them amongst the various sections of the society
such as the government, bank or insurance employees and teachers and
various other people who are in need of good housing and who are
prepared to pay appropriate prices. However, obviously, the idea of the
authorities was the other way round and that is why a good scheme has
been permitted to be misused with full connivance of the officers of
CIDCO. Poor hutment dwellers are used as pawns by the traders in the
market who were obviously party to the scheme along with these officers.
141. Thus, what we find is that there is a complete dereliction of
responsibility on the part of the then Managing Director of CIDCO and
whosoever were in-charge of this project. Merely because the then Chief
Minister had asked them to prosess early, they have given a complete go-
by to scrutiny. In para 16-D of the petition, the Petitioners have submitted
that the persons concerned should be held accountable. In view of what
is stated above, we expect the authorities of the State Government and
CIDCO to take appropriate actions against the persons concerned so that
this kind of deviation does not take place in future.
142. All this has become possible because of the sustained efforts
put in by the petitioner trust, its office bearers and their counsel. We
record our deep appreciation for their efforts. The petition was filed in
March 2005. Two civil applications have been moved by the respondents
::: Downloaded on - 01/04/2024 15:49:19 :::
88
therein. A number of affidavits have been filed. The matter has been
heard before different Division Benches from time to time. Inspection of
various files and record had to be taken and charts had to be prepared.
The petitioners will have to be compensated at least in some measure.
We are making a provision for that as well.
143. Before we conclude, we would like to record that the Indian
republic is committed to the goal of overall economic and social upliftment
of its citizens staying in villages as well as in cities. This is to be done
amongst others by the process of planning. The satellite township of Navi
Mumbai has been proposed and has come up to bring about
decentralisation of Mumbai, so that there is no crowding in this urban
metropolis and a better quality of life is provided. It is for this purpose that
laudable schemes such as those for genuine cooperative housing
societies are necessary. It is at the same time necessary to see to it that
they are not misused, so that the credibility of the planning process does
not suffer.
144. For the reasons stated above, the petition succeeds and we
pass the following order:-
(a) Allotments made to the six housing societies (Respondents
th th
Nos.5 to 10) by Letters of Intent of CIDCO dated 26 March 2004 and 6
May 2004 are hereby quashed and set aside. All rights of the persons
who have entered into agreements concerning development of these plots
No.24-29 including those of -
::: Downloaded on - 01/04/2024 15:49:19 :::
89
(i) the six housing societies,
(ii) the Respondent No.6 Society which is the amalgamated
society and successor to the six housing societies, and
(iii) Respondent No.4 which is claiming to be the developer for
this amalgamated society,
will stand extinguished.
(b) Respondent No.4 (along with their agents and servants) are
permanently injuncted and restrained from entering upon, remaining in
and/or putting up any construction on these plots No.24-29.
(c) The entire construction on these Plots No.24-29 stands
forfeited to and vested in CIDCO. CIDCO is permitted and expected to
enter upon this land and take over the entire construction and appoint its
security personnel to guard it forthwith.
(d) CIDCO is directed to evaluate the cost of construction which
has been put up so far. The evaluation will be done by a Committee of
three officers, viz.
(i) Chief Engineer, CIDCO,
(ii) Chief Engineer or his nominee from the Navi Mumbai
Municipal Corporation, and
(iii) Chief Engineer from the State P.W.D.
(e) Navi Mumbai Municipal Corporation will examine as to whether
the construction could be regularised, if, in its view, it is in any way
::: Downloaded on - 01/04/2024 15:49:19 :::
90
capable of being regularised. CIDCO will move the Municipal Corporation
for that purpose forthwith. If the Corporation takes the view that the
construction cannot be regularised, then CIDCO shall pull it down. CIDCO
will be entitled to recover the cost of pulling down the structure as well as
the removal of debris from Respondent No.4.
(f) Thereafter CIDCO will decide whether the plot with construction
should be allotted to the genuine housing societies or whether it would
like this plot and construction to be allotted to a builder decided by the
process of inviting tenders.
(g) In the event, CIDCO decides that the plot should go to the
genuine housing societies, it will issue an advertisement accordingly in
one English and one Marathi newspaper and, on receiving the offers
based on the construction cost with appropriate administrative charges, it
may take necessary decision of allotment. These societies will be
required to give a list of their members, their addresses, affidavits that
they are staying in Maharashtra for not less than 15 years with supporting
documents and the documents of income showing that they will be able to
subscribe to a flat which will cost around Rs.15,00,000/- at least. The
allotment will be done only after finding out as to which is the most eligible
society.
(h) In the event, Municipal Corporation approves the retention of
the structure, CIDCO will take a decision as to whether they would like to
retain the construction as it is.
::: Downloaded on - 01/04/2024 15:49:19 :::
91
(i) In the event CIDCO decides that these plots be given to the
builders, again a similar advertisement will be given and offers will be
sought fixing appropriate higher base price. The builders responding to
the tender will have to deposit the entire cost of construction and
administrative charges arrived at by the Committee to begin with as
earnest money and thereafter buy the plots at appropriate price as may be
decided by the tender process.
(j) In the event CIDCO so decides, it will reserve another plot of
equivalent size in the nearby locality for genuine housing societies.
(k) In view of what we have noted above, namely that Respondent
No.4 is responsible for the resultant situation, Respondent No.4 will not be
permitted to participate in this bid and will not be compensated for the
construction which is directed to be forfeited. It will be open for it to
recover its losses from Respondent No.6 or others including officers of
CIDCO if it deems them responsible.
(l) It is expected of CIDCO to similarly examine the development, if
any put up on other disputed 23 plots of CIDCO so far allotted in the
names of Co-operative Societies in the light of the above directions and
take necessary steps as in the present case, in accordance with law.
(m) If the Petitioners apply, CIDCO will offer inspection of all the
present as well as the future documents and correspondence in respect of
all these plots of CIDCO required to be allotted to Co-operative Housing
Societies in Navi Mumbai to the Petitioners.
::: Downloaded on - 01/04/2024 15:49:19 :::
92
(n) Rule is made absolute as above. Respondent No.4 will pay
Rs.1,00,000/- to the Petitioners as costs of this petition.
(H.L. GOKHALE, J.)
(SMT. R.S. DALVI, J.)
::: Downloaded on - 01/04/2024 15:49:19 :::
93
145. Mr.Shroff for Respondent No.4 and Ms.Shah for Respondent
No.6 seek stay of this order. Mr. Hegde makes a statement that for a
period of 8 weeks CIDCO will not take over the possession of these plots
and the construction. In the meanwhile, security of Respondent No.4 on
these plots can continue. Except as stated above, there will not be any
stay of the judgment and order that we have delivered.
(H.L. GOKHALE, J.)
(SMT. R.S. DALVI, J.)
::: Downloaded on - 01/04/2024 15:49:19 :::