Bombay High Court
Vikram Delite Co-Operative Housing ... vs Meenakshi Chandrakant Shah And 6 Ors on 28 July, 2017
Author: S.J. Kathawalla
Bench: S.J. Kathawalla
KPPNair -1- NMSL 1341/2016
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
NOTICE OF MOTION (L) NO. 1341 OF 2016
IN
SUIT (L) NO. 413 OF 2016
Vikram Delite Co-operative Housing Society Ltd. ... Plaintiff
vs.
Mrs. Meenakshi Chandrakant Shah and others ... Defendants
Mr. D.D. Madon, Senior Advocate, along with Mr. Aditya Shiralkar,
instructed by Mr. R.R. Mishra, for the Plaintiff.
Ms. Indrayani M. Koparkar, for Defendant No.4.
Mr. G. Shah, instructed by M/s. Kanga & Co., for Defendant Nos. 5 and 6.
Mr. Prantik Majumdar, instructed by Mr. A.C.Sarkate, for Defendant No.
7.
Ms. Meenakshi C. Shah, Defendant No.1 present.
Ms. Bijal Shah, Defendant No. 2 present.
Mr. Mehul Shah, Defendant No.3 present.
CORAM: S.J. KATHAWALLA, J.
DATE: 28th July, 2017
ORAL JUDGMENT:
1. The Plaintiff, Vikram Delite Co-operative Housing Society Limited, is a co-operative housing society registered under the Maharashtra Co-operative Societies Act, 1960. The Plaintiff has 66 Members. By a ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:34 ::: KPPNair -2- NMSL 1341/2016 Resolution passed at the Special General Body Meeting of the Society held on 27th February, 2014, the Plaintiff decided to redevelop its existing building consisting of Wings A, B, C and D at Ghatkopar. As of date, 62 of the 66 Members are co-operating with the Plaintiff in its redevelopment process. These co-operating members have either vacated their respective flats or agreed to vacate them for demolition. Defendant Nos. 1 to 4 are the non-co-operative members, who, according to the Plaintiff, are creating hindrances in the redevelopment project by refusing to hand over possession of their flats, viz. Flats A/002, A/102, A/101 and A/302 respectively to the Plaintiff. This is holding up the entire redevelopment process. Under these circumstances, the Plaintiff has filed the present Suit and has also taken out the above Notice of Motion seeking interim reliefs. At the time of filing of the Suit, six Members were opposing the redevelopment. However, after filing of the Suit, Defendant Nos. 5 and 6 arrived at a settlement with the Plaintiff and Defendant No.7 and filed Consent Terms dated 6th /8th June 2016.
2. By the above Notice of Motion, the Plaintiff is seeking mandatory orders only against Defendant Nos. 1 to 4, directing Defendant Nos. 1 to 4 to vacate and remove themselves from their respective Flats in the Plaintiff's Building and to make the Building available for the purpose of demolition and redevelopment.
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3. The facts, which according to the Plaintiff Society have led them to file the present Suit, in brief, are set out hereunder:
3.1 The Plaintiff Society was part of Delite Cooperative Housing Society Limited which was registered under the provisions of the Maharashtra Co-operative Societies Act 1960 under Registration No. BOM/HSG/1956 of 1969 consisting of 170 Members residing in 8 Wings of two Buildings, being Wings A, B, C, D (one building) and E, F, G and (second building), in all having 142 flats and 28 shops therein (herein after referred to as the 'Original Society').
3.2 Since the said Original Society was a huge Society, it was very difficult to manage and administer the same under one Managing Committee. The Members of the said Delite Cooperative Housing Society Limited therefore decided to bifurcate and divide the said Society into two Societies. Accordingly, at a Special General Body Meeting of the Original Society, held on 28th July 2013, the Members unanimously passed a Resolution to divide the said Original Society into two separate and distinct Societies.
3.3 Pursuant to the said Resolution dated 28 th July 2013, the Original Society made an application to the Deputy Registrar, Cooperative Societies, 'N' Ward, Konkan Bhavan, Belapur, Navi Mumbai, seeking division of the Original Society into two Societies viz., (i) Delite ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:34 ::: KPPNair -4- NMSL 1341/2016 Cooperative Housing Society Limited ('Delite CHS') consisting of Wings E, F, G and H of one building having 104 Members; and (ii) Vikram Delite Co-operative Housing Society Limited i.e. the Plaintiff herein, consisting of Wings A, B, C and D of another building having 66 Members. The Deputy Registrar, Cooperative Societies, 'N' Ward, Konkan Bhavan, Belapur, Navi Mumbai, passed an Order on 28th January 2014 bearing No.MUM/NV/B-
2/Delite Housing/Vibhajan/158/2014 sanctioning the division of the said Original Society into two.
3.4 Sometime in or around 2014, the majority of the Members of the Plaintiff-Society, including Defendants Nos. 1 to 4, gave a requisition to the Society to call for a Special General Body Meeting at the earliest with the agenda to take up the matter of redevelopment of the various Wings in its Building.
3.5 Thereafter, on 27th February 2014, the Plaintiff in its Special General Body Meeting unanimously passed a resolution to proceed with the redevelopment of the existing Building of the Plaintiffs, i.e. Wings A, B, and D, comprising of 66 flats, and also appointed Mr. Kiran Rokadia of M/s. Vistar Architects as the Project Management Consultant. Defendant Nos. 1 to 4 were present at this Meeting and in fact supported the Resolution dated 27th February, 2014, as can be seen from the Minutes of the Meeting at page 51 of the Plaint.
::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:34 ::: KPPNair -5- NMSL 1341/2016 3.6 The Plaintiff's Members in the Special General Body Meeting held on 16th March 2014 (54 members - present and voting) unanimously resolved to not opt for issuing tenders and instead decided to invite offers for redevelopment from reputed and known developers. Defendants Nos. 1 to 3 were present at the said Meeting and supported the said Resolution dated 16th March 2014. The Minutes of the Meeting are at pages 169-174 of the compilation submitted by the Plaintiff with its Affidavit-in-Rejoinder dated 12th July, 2016 (hereinafter referred to as Part-I of the Compilation). 3.7 Pursuant to the offers received from developers known to and suggested by the Members, the Plaintiff convened its Special General Body Meeting on 13th April 2014 to select and appoint the Developer for the redevelopment of the Plaintiff. In the said meeting an Officer Mr. P.S. Savant, deputed by the Deputy Registrar of Co-operative Societies, was present during the entire business of the meeting and such business was duly video recorded. Since the offer submitted by Defendant No. 7 was most beneficial for the Members, Defendant No. 7 was selected as the Developer of the Plaintiff Society. At the said Meeting, out of 66 Members of the Plaintiff Society, 63 Members remained present. The absentee Members had given in writing to the Officer deputed by the Deputy Registrar of Co-operative Societies that the decision taken by the majority shall be binding upon them. Since Defendant Nos.1 and 2 had refused to ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:34 ::: KPPNair -6- NMSL 1341/2016 sign in the attendance-sheet of the register maintained by the Society, even if the Society proceeded on the basis that they had not voted in favour of the Resolution, the said Resolution for appointment of Defendant No. 7 as the Developer was passed by an overwhelming majority of the Plaintiff's Members without any opposition from any Members. The Minutes of the Meeting held on 13th April, 2014 are at pages 57 to 70 of the Plaint. 3.8 The Plaintiff subsequently submitted an application to the Deputy Registrar, Cooperative Societies, N Ward Belapur seeking his NOC for the selection of Defendant No. 7 as the Developer. After considering the said application the Deputy Registrar (CS) "N" Ward was pleased to issue an NOC vide his letter dated 16 th April 2014, a copy of which is at page 72 of the Plaint.
3.9 The Plaintiff issued a formal Letter of Intent dated 25 th April 2014 to Defendant No.7 confirming the Plaintiff's decision to appoint Defendant No. 7 as the Developer and recording the following benefits and amenities to be provided by Defendant No. 7 to the Members of the Plaintiff in the redevelopment project:
i. 45% additional Carpet Area free of cost.
ii. Hardship compensation at Rs. 1600 per sq. ft of existing
carpet area of which 25% was to be paid at the time of signing the Development Agreement, 25% on receiving IOD and balance 50% ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:34 ::: KPPNair -7- NMSL 1341/2016 on the Members vacating their respective flats.
iii. Monthly compensation at Rs. 65 per sq. ft on existing carpet area.
iv. Six months monthly compensation as refundable security deposit, plus 1 month compensation as brokerage and Rs. 10,000 transportation charges to each and every member.
v. Bank Guarantee of Rs. 7.5 Crores, was to be provided to the Plaintiff at the time of the Plaintiff handing over vacant possession of the existing building to Defendant No. 7 for demolition. vi. Stamp duty, registration charges and all incidental expenses in respect of the Development Agreement and in respect of agreements for allotment of new flats in the proposed new building to be borne by the Defendant No. 7 developer.
vii. Completion of the entire construction within 24 months plus 6 months grace period from handing over possession of the existing building for demolition. A copy of the said Letter of Intent is at pages 73 to 79 of the Plaint.
3.10 On 15th May 2015, pursuant to the said Bifurcation Order dated 28/01/2014 issued by the Deputy Registrar Cooperative Societies, Konkan Bhavan, the Plaintiff and the adjoining Delite CHS applied to the Collector, Mumbai Suburban District for the sub-division of the Plot of the erstwhile ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:34 ::: KPPNair -8- NMSL 1341/2016 Delite Society (which was the parent society constituting the Plaintiff and Delite CHS) between the Plaintiff and the Delite CHS, which were by then separate societies.
3.11 While considering the said Application for sub-division, the Collector, Mumbai Suburban District vide letter dated 6th June 2014 directed the said Societies to obtain Non-Agricultural (NA) permission for the entire plot, as also the Layout Plan sanctioned by the Municipal Corporation of Greater Mumbai ('MCGM'), the office translation of which is at page 80 of the Plaint.
3.12 The Plaintiff's existing Building had been in a dilapidated condition for some time. Between July - September 2014, 28 of the Plaintiff's Members occupying 28 flats vacated their respective flats and moved to transit accommodation with a view to avoid any mishap or threat to their lives and property. At the request of these 28 Members, Defendant No. 7 has been paying them transit accommodation / compensation on humanitarian grounds. Thereafter, from time to time, several other Members adopted the same course, and as on the date of filing of the Suit in April 2016, around 53 Members had vacated their flats in the Plaintiff's existing Building and were staying outside in transit accommodation. 3.13 On 29th September 2014, Defendant No. 7 sent the draft Development Agreement to the Plaintiff's Advocate in pursuance of the ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:34 ::: KPPNair -9- NMSL 1341/2016 Plaintiff's Letter of Intent dated 25 th April 2014, to seek the views of the Plaintiff's Members and its Advocate thereon.
3.14 In the meanwhile, the Plaintiff applied for NA permission as directed by the Collector Suburban Mumbai vide letter dated 6th June 2014. On 5th February 2015, such NA permission was granted to the Plaintiff upon payment of necessary fees and charges for the same. The said NA permission was obtained with the active logistical and financial assistance and help of Defendant No. 7 (Developer).
3.15 Upon receipt of the Draft of the Development Agreement from Defendant No.7, the Plaintiff addressed a letter to its Members on 19 th May 2015 intimating to them that the copies of the said draft Development Agreement were available at the Plaintiff's Society Office for their inspection, and invited suggestions from them. The Members of the Plaintiff held several meetings to discuss the said Draft. In the course of these meetings, many Members of the Plaintiff, including Defendants Nos. 1 to 3, objected to the execution of the Development Agreement till the Plaintiff's name was brought on the sub-divided Property Register Card. 3.16 On 22nd May 2015, the Managing Committee of the Plaintiff e- mailed copies of the said Draft Development Agreement along with its Annexures to Defendants Nos. 1 and 2 at their request (Page 100 of Part-I of the Compilation).
::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:34 ::: KPPNair -10- NMSL 1341/2016 3.17 On 30th May 2015, Defendants Nos. 1 to 3 addressed a letter to the Plaintiff stating inter alia that "Society to enter into DA only on obtaining separate Property Card." (Pages 101 to 105 of Part-I of the Compilation) 3.18 At this juncture, the Project Management Consultant of the Plaintiff advised the Plaintiff to ensure the speedy processing of the application for grant of the Layout Plan, which was necessary for the sub- division of the property, as per the Collector's letter dated 6 th June 2014. Heeding this advice, on 19th July 2015, the Plaintiff convened its Special General Body Meeting seeking approval from its Members for the submission of the building plans before the Municipal Corporation of Greater Mumbai for the redevelopment of the suit building. At this meeting, various important resolutions were passed in order to speed up the Layout Plan processing. These resolutions included the decision to apply for an IOD in the Plaintiff's name and the decision to approve the proposed building plans, which Resolutions were passed by an overwhelming majority of the Members of the Plaintiff Society. Defendants Nos. 1 to 3 attended the said Meeting on 19th July, 2015, signed the attendance sheet for the said meeting and put a remark above their signatures on the said attendance sheet The Minutes of the meeting held on 19th July, 2015 are at Pages 81 to 90 of the Plaint.
::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:34 ::: KPPNair -11- NMSL 1341/2016 3.19 On 23rd December 2015, MCGM approved the Layout Plan and permitted the sub-division of the plot of the Original Society. On receipt of the approved Layout Plan, the Collector, Mumbai Suburban District on 2 nd January 2016 granted the Order of sub-division of the entire plot, which was divided into the suit property belonging to the Plaintiff, and the adjoining portion belonging to the Delite CHS Ltd. The name of the Plaintiff was brought on the Sub-Divided Property Register Card on 31 st March 2016.
3.20 On 4th January 2016, MCGM issued Intimation of Disapproval ('IOD') to the Plaintiff, requiring the Plaintiff to obtain vacant possession of all the flats in the suit building and to demolish the Building for redevelopment as per Condition No. 53 of the IOD (Page 93 of the Plaint). 3.21 On 24th January 2016, the Plaintiff's Members in its Special General Body Meeting finalized and approved the said Draft Development Agreement with an overwhelming majority of over 94%, i.e. all the Members except Defendants Nos. 1 to 4. Pertinently, Defendants Nos. 1 to 4 participated in the said Meeting. They merely sought time to study the Draft Development Agreement, as seen from the said Minutes at pg. 187 of the Plaint. They did not raise any objection or question as to the appointment of the Developer or any of the major steps taken thus far by the Plaintiff in the redevelopment process.
::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:34 ::: KPPNair -12- NMSL 1341/2016 3.22 Defendant No. 7- the Developer - invested significant time, energy and efforts in achieving the following major milestones in the redevelopment of the Plaintiff's property till date:
(i) Securing the Non-Agricultural (NA) use Order on 5th February 2015. Defendant No. 7 on behalf of the Plaintiff paid the unpaid arrears of Non-Agricultural Tax (unpaid for more than 33 years) along with 100% penalty.
(ii) Securing the approval of the Layout of the suit property on 23rd December 2015. In order to obtain this Layout approval, Defendant No. 7, acting on behalf of the Plaintiff, purchased and loaded TDR to the extent of 347 sq. mtrs. on the suit property on 16th June 2014 to offset the FSI imbalance resulting from the sub-division, which was procured at a consideration of Rs. 28.00 Lakhs;
(iii) Securing the Sub-Division Order whereby the suit property belonging to the Plaintiff was sub-divided on 2nd January 2016;
(iv) Obtaining the basic IOD for construction on 4th January 2016;
(v) Bringing the name of the Plaintiff onto the Property Register Card for the sub-divided property on 31st March 2016, and the same was issued on 11th April 2016.
3.23 On 6th March 2016, a Special General Body Meeting of the Plaintiff's Members was held to discuss the progress of the re-development ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:34 ::: KPPNair -13- NMSL 1341/2016 process. At this meeting, the Plaintiff's Members passed a resolution by an overwhelming majority (48 out of 50 Members) to initiate appropriate legal action against the non-co-operative members of the Plaintiff who were refusing to vacate their respective flats on or before 31 st March 2016. Defendant No. 4 attended this Meeting, as can be seen from the Minutes at p.199 of the Plaint.
3.24 In the aforesaid circumstances, the entire process of redevelopment of the Plaintiff came to a standstill on account of non- cooperation of Defendants Nos.1 to 4 who refused to vacate and handover their flats to the Plaintiff by 31st March 2016.
3.25 The Plaintiff apprehended that the condition of the Plaintiff's existing Building would further deteriorate and that Defendant No.7, who has so far co-operated and assisted the Plaintiff in its redevelopment, may abandon the redevelopment process on account of the failure of the Plaintiff Society to handover vacant possession of the existing Building to the Defendant No.7.
3.26 In these circumstances, on 20th April 2016, the Plaintiff filed the present Suit (being Suit (L) No. 413 of 2016) against Defendants Nos. 1 to 4 seeking the relief of mandatory injunction to vacate and remove the said Defendants from their respective flats to enable the Plaintiff to demolish and redevelop the suit property. As mentioned earlier, Defendant Nos. 5 ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:34 ::: KPPNair -14- NMSL 1341/2016 and 6, who are also party-Defendants, are now co-operating with the Plaintiff and hence the reliefs are directed only against Defendants Nos. 1 to 4.
4. After filing of the above Suit, the Plaintiff also filed the above Notice of Motion for the following reliefs:
"(a) that pending the hearing and final disposal of the suit, Defendant Nos.1 to 6 be directed by a mandatory order and injunction of this Hon`ble Court to vacate and remove themselves from their respective flats in Plaintiff Society building and make the said flats available to the Plaintiff Society for the purpose of demolition of the Plaintiff Society building having Wings A, B, C and D in compliance with Condition No.53 of IOD dated 4th January 2016 issued by Municipal Corporation of Greater Mumbai;
(b) that pending the hearing and final disposal of the suit, that Court Receiver High Court Bombay, be appointed Receiver with all powers under Order XL, Rule 1 of the Code of Civil Procedure, 1908, with direction of this Court to take vacant possession of Flat Nos. A/002, A/101, A/102, A/302, B/204, B/205, respectively occupied by Defendant Nos.1 to 6 and hand over the same to the Plaintiff Society for the purpose of carrying out redevelopment work of the Plaintiff Society building consisting of Wings A, B, C and D."
5. When the present Notice of Motion was awaiting final hearing in this Court, the following events transpired:
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(i) As per the directions of this Court, the Plaintiff forwarded the Drafts of the Individual Permanent Alternate Accommodation Agreements to Defendants Nos.1 to 6.
(ii) During the course of the hearing of the present Notice of Motion, Defendants Nos. 5 and 6 agreed to vacate their respective flats as and when required, vide Consent Terms dated 8th June 2016.
(iii) Defendant No. 7 obtained Sanction Letters for the Bank Guarantee of Rs. 7.5 Crores/-, which is to be handed over to the Plaintiff, when Defendant No. 7 obtains vacant possession of the suit building.
(iv) Defendant No. 7 (Developer) has submitted his Affidavit-cum-
Undertaking dated 15th June 2016, wherein he has inter alia committed and undertaken to this Court to fulfil all its obligations as per the Offer Letter dated 7/3/2014 and the draft Development Agreement approved by the Plaintiff vide its Resolution dated 24/1/2016 passed in its Special General Body Meeting, and complete the project.
6. The Learned Senior Advocate appearing for the Plaintiff, after pointing out the aforestated facts submitted that each and every decision with regard to the redevelopment process was taken unanimously or by an overwhelming majority of the Members of the Plaintiff, after due discussions/deliberations. The Society has maintained complete transparency qua the redevelopment process and there is no suppression or ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -16- NMSL 1341/2016 fraud involved. He further submitted that the Plaintiff and Defendant No.7 have worked together and successfully met the various challenges faced in the redevelopment process. It is only with the expertise, able assistance and efforts of Defendant No.7 that the Plaintiff has reached a position to redevelop its property so far. Defendant No.7 thus has continuously enjoyed the trust and confidence of the overwhelming majority of the Plaintiff's Members. He further submitted that the Building in which 66 flats of the Members are housed/located, is in a dilapidated condition. 62 of the 66 Members have extended all the co-operation to the Plaintiff Society to carry out the process of redevelopment. As on the date of filing of the Suit, 53 Members, in order to avoid any mishap or threat to their lives and property, have vacated their respective flats and are residing in the temporary alternate accommodation. Upon redevelopment of the Society building, every Member will get several benefits as set out in the Draft Development Agreement, which is approved by an overwhelming majority of Members, including 45% additional carpet area free of cost. However, the entire redevelopment project has been incorrectly and unfairly stalled due to the adamant/obstinate conduct of a miniscule minority i.e. only four Members i.e. Defendant Nos. 1 to 4, who are refusing to hand over possession of their respective flats to Respondent No. 7 Developer, to enable him to commence the redevelopment project. In fact, two of the ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -17- NMSL 1341/2016 four non-co-operative members are very closely related i.e. Defendant Nos. 1 and 2 are mother and daughter respectively. It is submitted that in view of this non-co-operative approach of Defendant Nos. 1 to 4, the remaining 62 Members along with their respective families are put to grave inconvenience. The balance of convenience is also overwhelmingly in favour of the Plaintiff and its Members and against Defendant Nos. 1 to 4. It is therefore submitted that the above Notice of Motion deserves to be allowed with costs.
7. Defendant Nos. 1 to 3 filed their Affidavit dated 29th April, 2016, written arguments dated 5th May, 2016, detailed Affidavit in Reply dated 6th June, 2016 and written arguments dated 15th June, 2016 and 22nd June, 2016. However, during the course of the hearing, Defendants Nos. 1 to 3 submitted that they would be relying exclusively on their Written Arguments dated 20th and 22nd June 2016 in their defence/response to the present Notice of Motion, since these Written Arguments encompassed their contentions contained in all their previous Affidavits and Written Submissions/Arguments. In response to the said written arguments of Defendants Nos. 1 to 3, the Plaintiff filed its Written Arguments annexed to its Affidavit-in-Rejoinder dated 12th July 2016 and also filed two Compilation of Documents.
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8. Defendant Nos. 1 to 3 who appeared in person submitted that the Plaintiff is not entitled to the reliefs sought in the Notice of Motion on the following grounds:
8.1 The redevelopment process initiated by the Plaintiff Society violates the guidelines issued by the Maharashtra Government vide its Directive under Section 79A of the Maharashtra Co-operative Societies Act, 1960 dated 3rd January, 2009. In support of its submission, Defendant Nos. 1 to 3 have contended that the Society has not received quotation from the PMC as well as the advocate for their services; tenders are not invited by public notice; IOD has been applied for before execution of the development agreement; members are asked to vacate before the execution of the development agreement.
8.2 That the vacating of the present accommodation/flats by 53 Members is in breach of the Letter of Intent (Conditions 5 and 12) and the Members ought not to have vacated their flats prior to the execution of the development agreement and the Developer ought not to have paid transit compensation. The Developer is making monthly payments to 53 Members only to buy out their votes in his favour.
8.3 That the Plaintiff has made out a false claim in paragraph 17 at page 12 of the Plaint to the effect that all the Members of the Plaintiff (66 members) with the exception of Defendant Nos. 1 to 6 are accepting the ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -19- NMSL 1341/2016 transit compensation from Defendant No.7.
8.4 That the suit building is not in dilapidated condition as alleged by the Plaintiff. In support of their contention, the Defendant Nos. 1 to 3 have relied on 27 photographs which according to them are taken on 10th June, 2016.
8.5 That the Structural Report of M/s. Epicons Consultants dated 18th May, 2015 on the condition of the suit building is unreliable since the said Consultants have been associated with Defendant No. 7 in its previous projects.
8.6 That Wings E,F,G and H of the adjoining Delite CHS (which was together with the Plaintiff Society) were constructed in the same period and since they are in perfectly good condition and standing strong and not claiming to be dilapidated, the Plaintiff's case that the suit building is dilapidated is false.
8.7 That the Plaintiff had fraudulently attempted to enforce IOD condition contained in clauses 53, 55 and 56.
8.8 That the Plaintiff is seeking enforcement of Clause 53 of the IOD (vacating the Members) despite having committed a breach of Clauses 3, 5, 7, 12, 17 and 18 of the Letter of Intent.
8.9 That the non-vacating of the flat is not the only reason behind the Plaintiff not being able to start demolition. The demolition work has ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -20- NMSL 1341/2016 been stalled due to the issuance of a letter dated 30th March, 2016 by the MCGM whereby the issuance of Plinth C.C. has been halted. 8.10 That the carpet area of their flat is much higher than what is stated in the Plaint which is clear from the report of their Licensed Surveyor annexed by them at Exhibit-N at page 359 to their detailed Affidavit.
8.11 That one Mr. Tulsi called their Licensed Surveyor Mr. Jatin Bhuta and forced him to prepare another report as per the Occupation Certificate of MCGM.
8.12 That the MCGM File containing the Occupation Certificate is missing in MCGM as per the information given to them in reply to their RTI by MCGM.
8.13 That the Plaintiff has allotted flats arbitrarily and not from top to bottom.
8.14 That the selection of the Developer itself, and the entire process of appointing Defendant No. 7 was stage-managed on 14th April, 2014 by giving other bids which were non-existent, or which were decoys so that the Members are made to believe that Defendant No. 7 had allegedly given the "best offer".
8.15 That the IOD was obtained prematurely and without the development agreement being executed, and while applying for IOD, the ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -21- NMSL 1341/2016 Plaintiff did not disclose to MCGM that there was a developer appointed by the Society i.e. Defendant No.7 but instead obtained an IOD in the name of the Society showing the redevelopment as a self development. 8.16 That the Defendant No. 7 has wrongly contended that it has incurred an expense of Rs. 8 crores on the project. 8.17 That Defendant No. 7 was not appointed by following the tender process; no certification of registration of Defendant No. 7 Partnership Firm has been provided; Defendant No. 7 has zero experience in redevelopment.
8.18 That Defendant No. 7 has failed to disclose the name and address of the Structural Engineer, Civil Engineer, Supervisors, License Plumber, Painter, Hardware Suppliers, etc. 8.19 Defendant No. 7 has not disclosed its Income Tax Returns till date for verification.
8.20 That the draft development agreement is lopsided on account of the Plaintiff appointed PMC and the Advocate being biased towards Defendant No.7. The development agreement does not have a termination clause and did not include amenities list as finalized in the Special General Body Meeting of 4th February, 2016.
8.21 That Advocate Mr. Rajendra Mishra had no authority to file the present Suit.
::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -22- NMSL 1341/2016 8.22 That Defendant No. 7 is not a necessary party to the present Suit.
8.23 That the decision of Defendant No. 7 to execute individual permanent alternate accommodation agreement with the Plaintiff's Members after the CC, is in violation of Clause 56 of the IOD and the Plaintiff ought not to support it.
8.24 That Defendant Nos. 1 to 3 have not received the share certificates in respect of the flats and that an attempt was made by some persons to issue fabricated share certificates. In view thereof, there is an ambiguity in respect of their status as Members of the Plaintiff. 8.25 That M/s. Vistaar Architects was appointed by original Delite Society and there is no Special General Body meeting resolution passed by the Plaintiff to appoint M/s. Vistaar Architects as PMC for the present project.
8.26 That no structural stability certificate is submitted to the MCGM under Section 353B of the MMC Act, 1888 and no notice has been issued under Section 354 or 475-A of the MMC Act, 1888.
8.27 That the Plaintiff Society has not taken steps to obtain NOC from banks in whose favour some flats have been mortgaged. This has been done to defraud the banks.
8.28 That apart from Defendant Nos. 1 to 6, 9 other Members are ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -23- NMSL 1341/2016 still residing in the Society premises. Further 85 per cent of Members who have allegedly vacated their flats are still using their flats despite the Plaintiff alleging that these flats are vacant.
8.29 That the suggestions of Defendant Nos. 1 to 3 were not taken into consideration by the Plaintiff and the Notices dated 12th March, 2016 and 16th March, 2016, under Section 164 of the Maharashtra Co-operative Societies Act have not been replied to.
8.30 That the Notice and Minutes of Special General Body Meetings of the Plaintiff dated 27th February, 2014 and 16th March, 2014, have been manipulated.
9. The objections raised on behalf of Defendant No. 4 in his Affidavit in Reply dated 29th April, 2014, to the present Notice of Motion pertaining to the non-execution of the development agreement and individual agreements, the non-compliance with the condition No. 56 of the IOD, non-loading of TDR are identical to the submissions advanced by Defendant Nos. 1 to 3.
10. After the matter was reserved for orders, Defendants Nos. 1 to 3 submitted an Affidavit-in-Rejoinder dated 26th July 2016 by way of response to the Plaintiff's Affidavit-in-Rejoinder dated 12 th July 2016. In the said Affidavit in Rejoinder, Defendant Nos. 1 to 3 raised the following objections:
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10.1 That it is not mandatory to comply with Clause 53 of the IOD, which mandates the demolition of the existing building. In support of this submission Defendant Nos. 1 to 3 have relied upon a document dated 8th March, 2016 submitted by the Plaintiff's Architect to MCGM. 10.2 That 53 Members have vacated the building for oblique motives;
that since the Plaintiff's building does not feature in the list of buildings categorized as 'C-1' Category by MCGM, it cannot be said that the building of the Society is in a dilapidated condition.
10.3 That 53 Members were receiving transit rents since July, 2014. They are therefore on the 'payroll' of Defendant No.7. Further majority of the Members being from the Patel Community and/or belong to the civil construction line were expecting business from this redevelopment project and selective Members were also given additional area over and above the PMC certified area as can be seen from Annexure-K of the draft development agreement under the column head 'Additional Area'. Hence the majority of the Members are obligated to Defendant No. 7 and therefore it cannot be said that the redevelopment project is supported by an overwhelming majority of the Plaintiff's Members.
10.4 That in the Special General Body Meeting dated 24th January, 2016, approval of the draft development agreement was a sham. The Secretary was absent without any explanation. The comments of the ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -25- NMSL 1341/2016 Advocate for the Plaintiff Society were not given to the Members and the draft was approved without finalizing the amenities. 10.5 That in the Special General Body Meeting held on 19th July, 2015, the Advocate for the Plaintiff misled the Members by saying that the sub-division of the plot was not possible without demolition of the building and hence getting IOD is a must for the Society. The statement made by the Advocate is false, given that the sub-divided property card was received on 11th April, 2016 i.e. prior to the demolition of the building. 10.6 That an aggregate of extra area admeasuring 1188 sq.ft. is allotted to few of the Members.
10.7 The Notice of Motion therefore deserves to be dismissed with costs.
10.8 The Plaintiff replied to the said Affidavit-in-Rejoinder dated 26th July, 2016 vide its response dated 8th August, 2016.
11. After the matter was heard and closed for orders on 2nd August, 2016, the Plaintiff moved this Court on 24th October, 2016, in the light of subsequent deterioration of the suit building, endangering the lives of the handful minority Members continuing to reside in the suit building. The Plaintiff Society filed a further Affidavit dated 22nd October, 2016, placing the following facts on record:
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11.1 In the 1st week of October 2016, a major portion of the ceiling of Flat No. B/103 collapsed leading to further serious structural and irreparable damage to the building which was already in a deteriorated condition.
11.2 In view of this, in October 2016, the Plaintiff Society addressed letters to BMC and Police Authorities, intimating to them that the building is in a dilapidated condition and that neither the Managing Committee nor any of the Society Members ought to be held liable or responsible for any mishap or injury in case the building collapses.
11.3 The overwhelming majority of more than 53 Members and their families having already vacated their flats since July 2014 and 9 Members and their families are willing to vacate. It is only on account of Defendant Nos.1 to 4 that the entire redevelopment project has been stalled. 11.4 The said Affidavit dated 22.10.2016 filed by the Plaintiff Society contains recent photographs to support their stand.
12. Defendants Nos. 1 to 3 and 4 filed their Affidavits-in-Reply dated 27th October 2016 inter-alia denying that the building is in a dilapidated condition.
13. After hearing the parties, the above Notice of Motion was again closed for orders by this Court. However, it was clarified that the Society as well as the Builder has put the Members/tenants to notice that if they ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -27- NMSL 1341/2016 continue to occupy the suit building, it shall be at their own risk.
14. Thereafter, Defendants Nos. 1 to 3 filed a limited Affidavit dated 10th November 2016 pointing out that MCGM in its reply dated 26th October 2016 to their RTI Application dated 1st October 2016, informed Defendant Nos.1 to 3 that the suit building has not yet been declared to be in a dilapidated condition i.e. C-1 category. In response to the Affidavit dated 10th November 2016 filed by Defendant Nos.1 to 3, the Plaintiff filed their Additional Affidavit dated 17th November 2016 pointing out that the said contention raised by Defendants Nos. 1 to 3 is thoroughly misconceived and irrelevant for the reasons set out therein.
15. Thereafter, once again on 19th December, 2016, Defendants No. 1 to 3 moved this Court by way of a praecipe, stating that on 16 th December, 2016 the Plaintiff Society stuck on building walls, the notice u/s. 354 of Municipal Corporation Act which is signed and dated 10 th December, 2016, declaring that the suit building is in a dilapidated condition. It was also stated in the said praecipe that one team of Capstone Consultants Pvt. Ltd., acting upon the instructions of one Mr. Tulsi K Patel, Plaintiff and Defendant No. 7, have drilled big and multiple holes about 6-8 inches deep in almost every wall and pillar of the society building as well as through and through holes are also drilled in the walls of certain flats.
16. In response thereto, the Plaintiff filed an Additional Affidavit dated 20th December, 2016, explaining the circumstances under which ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -28- NMSL 1341/2016 notice under Section 354 of the MMC Act, 1888 was issued as well as the holes drilled by Capstone Consultants Pvt. Ltd., the agent/representative of Victoria Jubilee Technical Institute (VJTI), which is a part of the standard procedure during structural audit.
17. Again, on 23rd December, 2016, Defendants Nos. 1 to 3 submitted a Rejoinder containing submissions which were repetitive and already dealt with by the Plaintiff in their written submissions.
18. The Learned Senior Advocate appearing for the Plaintiff has in response to the aforestated objections raised by Defendant Nos. 1 to 4 taken me through the Affidavits and the written submissions and also the two compilations filed by the Plaintiff with its Affidavit in Rejoinder dated 12th July, 2016 and has submitted that the objections raised by Defendant Nos. 1 to 3 are untenable, baseless and false and are raised only with a view to inconvenience the 62 Members of the Society and their family members who are co-operating in the redevelopment process. It is also submitted that the approach of Defendant No. 4 is mala fide and driven by selfish motives and personal interest, besides being devoid of merit. It is submitted that Defendant No. 4 is fully aware of the entire redevelopment process of the Plaintiff Society since he has attended all the meetings of the Plaintiff Society, as admitted by him in paragraph 2 of his Affidavit in Reply dated 29th April, 2016. The true reason behind Defendant No. 4's obstruction is his failed attempt to claim interest in and/or purchase the ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -29- NMSL 1341/2016 Dhobi Ghat area i.e. the encroached area of the land of the Plaintiff Society. In all the meetings of the Plaintiff, Defendant No. 4 has been raising only this issue of the Dhobi Ghat area, which is clear from the Minutes of the Special General Body Meeting dated 6th March, 2016 at page 199 of the plaint and letters dated 20th February, 2015, 28th March, 2015 and 21st May, 2015 at pages 287- 299 of Compilation Part-II tendered by the Plaintiff. It is also pointed out that Defendant No. 4 himself had proposed the name of Defendant No. 7 as a Developer for the reconstruction of the Plaintiff's building in the Meeting of the Plaintiff Society held on 13th April, 2014. In fact, Defendant No. 4 has admitted that he has received all the necessary documents requested from the Plaintiff, save and except registered development agreement, registered permanent alternate accommodation agreements/individual agreements and TDR documents (i.e. proof of purchase of TDR), which grievance is clearly misconceived, since these documents have not yet been executed and are not in existence. It is therefore once again submitted on behalf of the Plaintiff that the above Notice of Motion be made absolute with costs.
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19. The order in the above Notice of Motion was kept for pronouncement on 20th July, 2017. However, before the pronouncement of the order, this Court enquired from the Senior Advocate appearing for the Plaintiff Society and the Advocate appearing for Defendant No. 7 whether they were agreeable to give an undertaking to the effect that the tripartite agreement for permanent alternate accommodation would be executed prior to the demolition of the existing building and that they will abide by the terms of the Intimation of Disapproval (IOD) as well as the development agreement. The Advocates for the Plaintiff and Defendant No. 7 sought time to take instructions and the matter was adjourned to 28th July, 2017 i.e. today.
20. Today, the Plaintiff Society as well as Defendant No. 7 developer through their Advocates undertake as follows:
(i) That the development agreement between the Plaintiff Society and the Defendant No. 7 developer shall be executed within 25 days from the date of this order;
(ii) A provisional tripartite agreement for permanent alternate accommodation shall be executed between the individual members of the Society, the Society and the developer before the members vacate their respective premises and before carrying out any demolition.
(iii) That a final tripartite agreement in identical terms of the provisional agreement shall be executed on receipt of the full commencement certificate. ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -31- NMSL 1341/2016
(iv) The Plaintiff Society and Defendant No. 7 developer shall abide by the terms of the IOD.
The above undertakings are accepted.
21. However, Defendant Nos. 1 to 3 have submitted that Defendant No. 7 has authorised Mr. Tulsi Patel, who is almost insolvent, to take certain steps on their behalf. It is submitted that Mr. Tulsi Patel has business relations with the partners of Defendant No.7; there are several legal/recovery proceedings inter alia against the partners of Defendant No. 7 and therefore their major concern is whether Defendant No. 7 will be able to complete the work of redevelopment. The learned Advocate for Defendant No. 4 submitted that Defendant No. 4 too is not against redevelopment but his only concern is whether Defendant No. 7 would be able to complete the project as promised.
22. Mr. Parikshit Niglani, Partner of Defendant No. 1 in response to the queries put to him by the Court stated that though they have very good relations with Mr. Tulsi Patel, there exists no business relations between their Companies/firms and Mr. Tulsi Patel. The financial status of Mr. Tulsi Patel is irrelevant since they have only authorised him to take some steps on their behalf and have not assigned any work involving any financial responsibility to Mr. Tulsi Patel. Mr. Niglani has submitted that, in any event, they shall henceforth not assign any work to Mr. Tulsi Patel qua the redevelopment project. Mr. Niglani has submitted that none of their Partnership firms or Companies are facing any ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -32- NMSL 1341/2016 financial problems and are doing extremely good business. All their Companies have very high credit ratings. He has submitted that even otherwise since their Companies are involved in business dealings worth several crores, existence of certain legal proceedings by or against their Companies/firms does not mean that they are in financial trouble or are insolvent.
23. Defendant Nos. 1 to 3 and the Advocate for Defendant No. 4 thereupon submitted that in that event Defendant No. 7 should deposit the value of their respective flats in Court. When this Court enquired as to what according to them is the value of their respective flats, surprisingly the answer was that they are not aware. It was therefore submitted on behalf of Defendant No. 7 that in that event they should sell their present flats to Defendant No. 7 at the ready reckoner rate and buy flats elsewhere. Defendant No. 4 thereupon submitted that Defendant No. 7 will be selling the free sale flats for Rs. 21,000/- per sq.ft. and is offering only the ready reckoner rate of Rs. 9,000/- for their existing flats. To this, Defendant No. 7 gave a with prejudice offer to buy the existing flats of the non- co-operative members at Rs. 21,000/- per sq.ft. However, the non-co-operative members who till now were insisting that Defendant No. 7 has no funds to redevelop the property have now refused to accept the offer.
24. I have gone through the Plaint, the Notice of Motion, the ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -33- NMSL 1341/2016 Affidavit in Support thereto, Affidavits in Reply and Rejoinder and the written submissions filed by the parties from time to time and have considered the same.
25. The Original Society- Delite Co-operative Housing Society Limited - consisted of 170 Members residing in 8 wings of 2 buildings being Wings A, B, C, D (one building) and E, F, G and H (another building), in all having 142 flats and 28 shops. The Managing Committee of the Original Society therefore decided to bifurcate and divide the said Society into two Societies and passed a Resolution to this effect at the Special General Body Meeting held on 28th July, 2013. The Deputy Registrar, Cooperative Societies, N Ward, Konkan Bhavan, Belapur, Navi Mumbai, passed an Order on 28th January, 2014, sanctioning the division of the said Original Society into two Societies viz., (i) Delite Cooperative Housing Society Limited consisting of Wings E, F, G and H of one building of the Society having 104 Members; and (ii) Vikram Delite Co- operative Housing Society Limited i.e. the Plaintiff herein, consisting of Wings A, B, C and D of the second building of the Society having 66 Members. All the Members of the Society including Defendant Nos. 1 to 4 gave individual letters to the Society to call for a Special General Body Meeting to take up the matter of redevelopment of the Society at the earliest, since the structural condition of the Society's buildings had ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -34- NMSL 1341/2016 deteriorated beyond repair. The contents of all the letters including the letters addressed to the Plaintiff by Defendant Nos. 1 to 4 are identical and reproduced hereunder:
"As our Society's Building structural condition has deteriorated beyond repairs, I would request you to arrange general body meeting to take up matter for Redevelopment of our Society at the earliest."
25.1 Thereafter, on 27th February 2014, the Plaintiff in its Special General Body Meeting unanimously passed a Resolution to proceed with the redevelopment of the existing building of the Plaintiffs, i.e. Wings A, B, C and D, comprising of 66 flats, and also appointed Mr. Kiran Rokadia of M/s. Vistar Architects as Project Management Consultant. Defendant Nos. 1 to 4 were present at this Meeting and in fact supported the Resolution dated 27th February, 2014. In the Special General Body Meeting held on 16th March 2014, 54 Members of the Plaintiff Society unanimously resolved not to opt for issuing tenders and instead decided to invite offers for redevelopment from reputed and known developers. Again Defendant Nos. 1 to 3 were present at the said Meeting and supported the said Resolution dated 16th March 2014. Pursuant to the offers received from developers known to and suggested by the Members, a Special General Body Meeting was convened by the Plaintiff Society on 13 th April 2014 to ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -35- NMSL 1341/2016 select and appoint the Developer for the redevelopment of the Plaintiff which Meeting was attended by Mr. P.S. Savant, Officer deputed by the Deputy Registrar of Co-operative Societies. At this Meeting, the offer submitted by Defendant No. 7 was found to be the most beneficial for the Members and Defendant No. 7 was therefore selected as the Developer of the Plaintiff to carry out the redevelopment work of the Plaintiff Society. 63 Members out of 66 Members of the Plaintiff Society were present at the said Meeting and the said Resolution appointing Defendant No. 7 as the Developer was passed by a overwhelming majority. The said Meeting was attended by Defendant Nos. 1 to 4 and though Defendant Nos. 1 and 2 refused to sign the Attendance Sheet, the objections raised by them at the said Meeting were duly considered by the Plaintiff's Members. Pursuant thereto, the Plaintiff subsequently submitted an application to the Deputy Registrar, Cooperative Societies, N Ward, Navi Mumbai, seeking his NOC for the selection of Defendant No. 7 as the Developer which he issued vide his letter dated 16th April 2014.
25.2 The Plaintiff thereafter issued a formal Letter of Intent dated 25 th April 2014 to Defendant No.7 confirming the Plaintiff's decision to appoint Defendant No. 7 as the Developer and inter alia recorded that the Developer shall provide to the Members of the Society 45% additional Carpet Area free of cost; hardship compensation at Rs. 1600 per sq. ft of existing carpet area, of which 25% shall be paid at time of signing the ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -36- NMSL 1341/2016 Development Agreement, 25% on receiving IOD and the balance 50% on the Members vacating their respective flats; monthly compensation at Rs. 65 per sq. ft on existing carpet area; six months monthly compensation as refundable security deposit, plus 1 month compensation as brokerage and Rs. 10,000 transportation charges to each and every Member; Bank Guarantee of Rs. 7.5 Crores, will be provided to the Plaintiff Society at the time of handing over vacant possession of the existing building to Defendant No. 7 for demolition; and stamp duty, registration charges and all incidental expenses in respect of the Development Agreement and in respect of agreements for allotment of new flats in the proposed new building shall be borne by the Developer. It was also provided in the Letter of Intent that the entire new construction shall be completed within 24 months plus 6 months grace period from the date of handing over possession of the existing building to the developer, for demolition. 25.3. Pursuant to the said bifurcation Order dated 28/01/2014 issued by the Deputy Registrar Cooperative Societies, Konkan Bhavan, on 15th May, 2015 the Plaintiff and the adjoining Delite CHS applied to the Collector, Mumbai Suburban District for the sub-division of the plot between Delite Society and the Plaintiff Society. While considering the said Application for sub-division, the Collector, Mumbai Suburban District vide letter dated 6th June 2014 directed the said Societies to obtain Non- ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -37- NMSL 1341/2016 Agricultural (NA) permission for the entire plot as also the Layout Plan sanctioned by the Municipal Corporation of Greater Mumbai (MCGM). 25.4 On 29th September 2014, Defendant No. 7 sent the draft Development Agreement to the Plaintiff's Advocate in pursuance of the Plaintiff's Letter of Intent dated 25 th April 2014, to seek the views of the Plaintiff's Members and its Advocate thereon. In the meanwhile, the Plaintiff applied for NA permission as directed by the Collector Suburban Mumbai vide his letter dated 6th June 2014, and on 5th February 2015, such NA permission was granted to the Plaintiff upon payment of necessary fees and charges for the same.
25.5 At the request of the Plaintiff Society, to gauge the condition of the Plaintiff's building at the relevant time, M/s. Epicons Consultants Pvt. Ltd., independent Structural Auditors and Engineers, empanelled with the MCGM were appointed as Structural Consultants by Defendant No.7. M/s. Epicons Consultants submitted their Report dated 18th May, 2015, wherein they have submitted their conclusions as reproduced hereunder:
"1. The distress in the RCC members is on account of corrosion of reinforcement bars and is very critical and alarming. Corrosion process is aggressive and spreading fast.
2. RCC columns at all levels have severe corrosion cracks which are serious in nature and endanger the structural ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -38- NMSL 1341/2016 safety of the building.
3. Also, the slabs & beams are affected due to reinforcement corrosion, which will affect the safety of the occupants due to the hazard of ceiling giving way.
4. The structure is dilapidated condition and not fit for occupation. Considering the present condition and age of the building option of reconstruction may be considered as repairs are not feasible. Newly constructed building can comply with latest Earthquake resistant design requirement and durability aspects."
25.6 Upon receipt of the Draft of the Development Agreement from Defendant No.7, the Plaintiff addressed a letter to its Members on 19 th May 2015 intimating to them that the copies of the said draft Development Agreement were available at the Plaintiff's Society Office for their inspection, and invited suggestions from them. The Members of the Plaintiff held meetings to discuss the said draft. In the course of these meetings, many Members of the Plaintiff, including Defendants Nos. 1 to 3, objected to the execution of the Development Agreement till the Plaintiff's name was brought on the sub-divided Property Register Card. On 22 nd May 2015, the Managing Committee of the Plaintiff at the request of Defendant Nos. 1 and 2 also e-mailed copies of the said Draft Development Agreement along with its Annexures to Defendants Nos. 1 and 2. On 30 th May 2015, Defendants Nos. 1 to 3 addressed a letter to the Plaintiff stating ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -39- NMSL 1341/2016 inter alia that the Society should enter into a development agreement with the Developer only on obtaining a separate Property Card. 25.7 As submitted by the Plaintiff, at this juncture, the Project Management Consultant of the Plaintiff advised the Plaintiff to ensure the speedy processing of the application for grant of the Layout Plan, which was necessary for the sub-division of the property, as per the Collector's letter dated 6th June 2014. Heeding this advice, on 19th July 2015, the Plaintiff convened its Special General Body Meeting seeking approval for the submission of building plans before the Municipal Corporation of Greater Mumbai for the redevelopment of the suit building. At this meeting, various important resolutions were passed in order to speed up the Layout Plan processing. These resolutions included the decision to apply for an IOD in the Plaintiff's name and the decision to approve the proposed building plans, which were taken by an overwhelming majority of the Members of the Plaintiff Society. In fact, Defendants Nos. 1 to 3 attended the said Meeting, signed the attendance sheet for the said meeting and put a remark 'I protest' above their signatures on the said attendance sheet as can be seen from the Minutes, annexed and marked as Exhibit-H to the Plaint.
25.8 On 23rd December 2015, MCGM approved the Layout Plan and permitted the sub-division of the plot of the Original Society. On receipt of ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -40- NMSL 1341/2016 the approved Layout Plan, the Collector, Mumbai Suburban District on 2 nd January 2016 granted the Order of Sub-division of the entire plot, which was divided into the suit property belonging to the Plaintiff, and the adjoining portion belonging to the Delite CHS Ltd. The name of the Plaintiff was brought on the Sub-Divided Property Register Card on 31 st March 2016.
25.9 On 4th January 2016, MCGM issued Intimation of Disapproval (IOD) to the Plaintiff, requiring the Plaintiff to get vacant possession of all the flats in the suit building and to demolish the building for redevelopment as per Condition No. 53 of the IOD. Thereafter on 24th January 2016, the Plaintiff's Members in its Special General Body Meeting finalized and approved the said Draft Development Agreement with an overwhelming majority of over 94%, i.e. all the Members except Defendants Nos. 1 to 4. It is pertinent to note that Defendant Nos. 1 to 4 participated in the said Meeting and merely sought time to study the Draft Development Agreement, as seen from the said Minutes at pg. 187 of the Plaint. Defendant Nos. 1 to 4 did not raise any objection or question as to the appointment of the Developer or any of the major steps in the redevelopment process.
25.10 The Defendant No. 7 Developer has invested significant time, energy and efforts in achieving the major milestones in the redevelopment ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -41- NMSL 1341/2016 of the Plaintiff's property till date such as securing the Non-Agricultural (NA) use Order on 5th February 2015, by making payment of the unpaid arrears of Non-Agricultural tax (unpaid for more than 33 years) along with 100% penalty; securing the approval of the Layout of the suit property on 23rd December 2015; after purchasing and loading TDR to the extent of 347 sq. mtrs. on the suit property on 16th June 2014 to offset the FSI imbalance resulting from the sub-division, which was procured at a consideration of Rs. 28.00 Lakhs; securing the Sub-Division Order whereby the suit property belonging to the Plaintiff was sub-divided on 2nd January 2016; obtaining the basic IOD for construction on 4th January 2016; bringing the name of the Plaintiff onto the Property Register Card of the Sub-Divided Property on 31st March 2016, and the same was issued on 11th April 2016.
25.11 Since 28 of the 66 Members of the Society were of the view that it was not safe to continue their stay along with their family members in the suit building, they vacated their respective flats and moved to transit accommodation with a view to avoid any mishap or threat to their lives and property. At the request of the said 28 Members, Defendant No. 7 has been paying them transit accommodation/compensation on humanitarian grounds. Thereafter from time to time several other Members adopted the same course.
::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -42- NMSL 1341/2016 25.12 In the Special General Body Meeting held on 6th March 2016, to discuss the progress of the re-development process, the Members of the Plaintiff passed a resolution by an overwhelming majority (of 48 out of 50 members) to initiate appropriate legal action against the non-co-operative members of the Plaintiff who were refusing to vacate their respective flats on or before 31st March 2016. By the time the above Suit was filed in April, 2016, around 53 Members apprehending a threat to their life and property, and the lives of their family members vacated their flats and started residing outside in temporary alternate accommodation. 25.13 As late as on 11th July, 2016, 62 of the 66 Members of the Plaintiff have signed Declarations-cum-Undertaking giving consent to the redevelopment process and for the appointment of Defendant No.7. 25.14 From the aforesaid facts it is clear that every step/action taken by the Society towards redevelopment process is after seeking approval of the General Body of the Members who have given overwhelming support to all the actions/proposals/resolutions passed at the various Meetings of the Society held for the purpose of redevelopment of its property. Thus the Society's conduct has throughout been transparent, and no decisions/actions have been taken by the Society without taking its Members into confidence. The non-co-operative Members have till date not challenged any of the resolutions passed at the Special General Body Meetings of the Plaintiff, ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -43- NMSL 1341/2016 or the writing executed by them, in any court of law. 62 out of 66 Members of the Society are supporting the redevelopment process and as late as on 11th July, 2016, all the 62 Members of the Plaintiff have signed a Declaration-cum-Undertaking giving consent to the redevelopment process and appointment of Defendant No.7. 53 Members of the Society fearing a threat to their lives and property have already vacated their flats and started residing outside in transit accommodation. During the pendency of the present Notice of Motion as per the directions of this Court, the Plaintiff has forwarded the drafts of the individual Permanent Alternate Accommodation Agreements to the Defendant Nos. 1 to 6; Defendant No. 7 obtained sanction letters for the Bank Guarantee of Rs. 7.5 Crores, which is to be handed over to the Plaintiff when Defendant No. 7 obtains vacant possession of the suit building; and Defendant No. 7 (Developer) has submitted his Affidavit-cum-Undertaking dated 15 th June 2016, wherein he has inter alia committed and undertaken to this Court to fulfil all its obligations as per the Offer Letter dated 7/3/2014 and the draft Development Agreement approved by the Plaintiff vide its Resolution dated 24/1/2016 passed in its Special General Body Meeting, and complete the project within the prescribed time.
26. As set out hereinabove, Defendant Nos. 1 to 4 have made several submissions and tried to justify their conduct i.e. opposing the ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -44- NMSL 1341/2016 redevelopment of the suit building. Each of the submissions raised by the Defendant Nos. 1 to 4 are set out and dealt with hereunder:
26.1 According to the Defendant Nos. 1 to 3, the Plaintiff Society has violated the guidelines issued by the Maharashtra Government vide its Directive under Section 79A of the MCS Act dated 3rd January, 2009 by not calling for quotations from Project Management Consultants and the Advocate; not calling for tenders by public notice; applying for IOD before the execution of the development agreement and asking the Members to vacate before execution of the development agreement. In the case of Harsha Co-op. Housing Society Limited and others vs. Kishandas S. Rajpal and others1 a single Judge of this Court has held that the guidelines contained in the said Directive dated 3rd January, 2009 are not required to be followed in cases where the steps in the redevelopment process are approved by a majority of members of a society in its special general body meetings. It is further held in the said Judgment that non-compliance of these guidelines is not available as a defense to the minority non-co-
operative members, when these non-co-operative members are acting against the wishes of the majority members of the society. Paragraphs 10 and 11 of the said Judgment are relevant and reproduced hereunder:
"10. It is argued on his behalf that by Government Notification issued under section 79-A of the Maharashtra 1 Unreported judgment dated 8.3.2010 in Civil WP No. 10285 of 2009 ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -45- NMSL 1341/2016 Cooperative Societies Act(the Act), a registered architect on the panel of the Government was to be selected and the procedure as shown there-in required to be complied which is not done and which vitiated decision of the society.
11. The reliance upon the Government notification is itself misplaced. When the members of the co-operative housing society which, under law of cooperation, decides by majority of 11:1 members that the society premises be developed in a particular fashion by a particular developer, it would be contrary to principals of democracy by which the society is governed by the sole dissenting member to interfere and require a procedure, not required by the majority of members to be followed which would only consume time and be counter-productive. The Government resolution would be required to be followed by the Society where the members are unable to come to any decision by resolution of their own."
As submitted on behalf of the Plaintiff, all the decisions pertaining to the redevelopment of the building of the Plaintiff Society have been approved by an overwhelming majority of the Members of the Plaintiff in various Special General Body Meetings since the majority of the Plaintiff's Members believed that it was neither viable nor technically feasible to adhere to the various terms and/or sequence stipulated in the said guidelines ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -46- NMSL 1341/2016 in a strict or rigid manner, which would have delayed and perhaps derailed the redevelopment process.
The Members of the Plaintiff Society have in the Special General Body Meeting held on 27th February, 2014, passed a Resolution appointing Mr. Kiran Rokadiya of M/s. Vistar Architects as PMC and Mr. Dinesh Kumar Mishra as its Advocate, since the Society had earlier availed the services of both these professionals and both were well known to all the Members of the Society. The Plaintiff Society therefore did not call for quotations from the PMC and/or Advocates.
By a Special General Body Meeting held on 16th March, 2014, the Members of the Society agreed to invite offer letters from the developers who are well known to the Society and its Members and passed a resolution authorising the Office Bearers to invite offer letters from known and reputed developers who have a good profile and sound financial position to redevelop the Society building; and therefore did not call for tenders by public notice.
As regards the submission of Defendant Nos. 1 to 3 that the IOD ought to have been applied for by the Society only after the execution of the development agreement, as set out hereinabove, on 15 th May 2015, pursuant to the said bifurcation Order dated 28 th January, 2014 issued by the Deputy Registrar Cooperative Societies, Konkan Bhavan, the Plaintiff ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -47- NMSL 1341/2016 and the adjoining Delite CHS applied to the Collector, Mumbai Suburban District (MSD) for the sub-division of the plot of the erstwhile Delite Society (which was the parent society constituting the Plaintiff and Delite CHS) for the Plaintiff and the Delite CHS, which were by then two separate Societies. While considering the said Application for sub-division, the Collector, Mumbai Suburban District (MSD) directed by his letter dated 6 th June 2014 to the said Societies to obtain inter alia the Layout Plan sanctioned by the MCGM. The Members of the Plaintiff held several meetings between October, 2014 and April, 2015 to discuss the draft development agreement forwarded by Defendant No.7. In the course of these meetings, many Members of the Plaintiff, including Defendants Nos. 1 to 3, objected to the execution of the Development Agreement till the Plaintiff's name was brought on the sub-divided Property Register Card. In order to obtain a separate Property Register Card in the name of the Plaintiff, it was absolutely essential to first obtain an Order for Sub-division of the plots of the Plaintiff and the adjacent Delite CHS from the Collector, MSD. Since the Plaintiff was required to obtain , inter alia, the sanctioned Layout Plan for sub-division from the MCGM, the Plaintiff approached MCGM for their approval of the Layout Plan for sub- division. At this stage, MCGM noticed an FSI imbalance of 377 sq. mts. that would arise on account of the proposed sub-division and informed the Plaintiff that the ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -48- NMSL 1341/2016 same would be required to be offset by loading of additional equivalent TDR on the plot. Defendant No. 7 purchased the required TDR and loaded the same on the said plot. Thereupon the Project Management Consultant (PMC) of the Plaintiff advised the Plaintiff, that the Plaintiff should apply for an IOD for the proposed building in order to ensure the speedy processing of the Plaintiff's application for the approval of the layout plan for sub-division by the MCGM, which the Plaintiff did. Heeding this advice of the PMC, on 19th July 2015, the Plaintiff convened its Special General Body Meeting seeking approval for the submission of building plans before the Municipal Corporation of Greater Mumbai for the redevelopment of the suit building. At this meeting, various important resolutions were passed in order to speed up the Layout Plan processing. These resolutions included the decision to apply for an IOD in the Plaintiff's name and the decision to approve the proposed building plans, which Resolutions were passed by an overwhelming majority of the Members of the Plaintiff Society. Defendant Nos. 1 to 3 too attended the said Meeting but did not raise any specific objection regarding the process for application of IOD. They merely recorded a vague remark in the Attendance Sheet as "I protest". After applying for the IOD, in pursuance of the said Resolution dated 19th July, 2015 on the PMC's advice, the Layout Plan for sub-division was approved by the MCGM on 23rd December 2015. Within 9 days of the said approval, ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -49- NMSL 1341/2016 i.e. on 2nd January, 2016, the Office of Collector, Mumbai Suburban District granted the Plaintiff's application for sub-division, which was pending prior to June 2014. The IOD permission was received on 4 th January 2016. The separate PR Card for the Plaintiff was received from the said Collector, MSD on 11th April 2016. This clearly vindicates the advice of the said PMC. It will not be out of place to mention here that the permission for redevelopment is always applied for in the name of the owner of the property, in this case, the Plaintiff. Even if Defendant No. 7 had applied for sanction of plans, it would have done so in the name of the Plaintiff, under a Power of Attorney. There is no necessity or requirement to apply for an IOD only after entering into a Development Agreement. Again, neither the Plaintiff nor the Defendant No. 7 had derived any additional benefit by applying for the IOD prior to entering into the Development Agreement. The application for IOD in the Plaintiff's name prior to execution of the Development Agreement has not resulted in any sort of violation of legal norms nor any injury or prejudice to the Plaintiff or its Members. The decision necessitating the application for IOD for the proposed buildings prior to the execution of the Development Agreement was taken by an overwhelming majority of the Plaintiff's Members by the Resolution passed in their Special General Body Meeting dated 19 th July 2015. It is therefore also established that there is no misrepresentation on the part of ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -50- NMSL 1341/2016 the Plaintiff or Defendant No. 7 as alleged by Defendant Nos. 1 to 3. With regard to the submission of Defendant Nos. 1 to 4, that the Members ought to have been asked to vacate their respective flats after the execution of the development agreement, as correctly explained by the Plaintiff Society, the draft development agreement was already finalized and approved by the Plaintiff in the Special General Body Meeting of the Plaintiff's Members held on 24th January 2016. Therefore, in the Special General Body Meeting of the Plaintiff's Members held on 6th March 2016, it was resolved to seek and obtain vacant possession of the flats from all its Members by 31st March 2016 and to initiate legal proceedings in case of non-co-operative Members, to speed up the redevelopment process. Therefore, in my view, the decisions taken by the Plaintiff Society, which according to Defendant Nos. 1 to 4, constitutes deviations from the guidelines, have been taken in the interest of the progress of the redevelopment project, with full support of an overwhelming majority of the Plaintiff's Members, as expressly permitted in the said Judgment in the case of Harsha CHS Ltd v. Kishandas S Rajpal & ors (supra). None of the resolutions passed by an overwhelming majority of the Plaintiff's Members have till date been challenged by any of the four non-co-operative Members. Therefore, in my view, Defendants Nos. 1 to 3 and/or 4, being a minuscule minority, cannot stall the redevelopment process citing these ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:35 ::: KPPNair -51- NMSL 1341/2016 guidelines, as held in the said Judgement of Harsha CHS . 26.2. Defendant Nos. 1 to 3 have submitted that the suit building is not in dilapidated condition and have relied on 27 photographs purportedly taken on 10th June 2016 to support their contention. The Plaintiff Society has submitted that the photographs taken by Defendant Nos. 1 to 3 are selective and do not represent the true and complete picture qua the stability of the building and ought not to be relied upon. In my view, the submission made by the Plaintiff that the suit building is indeed in a dilapidated condition, and that only in view of certain photographs of the building produced by Defendant Nos. 1 to 3, it cannot be held otherwise, is established from the following:
(i) By a letter dated 11th November, 2011 addressed to the Plaintiff, Defendant No. 1 herself had recorded that, "there has been a big crack in my bed room overhead beams. I am seriously concerned as it may soon fall down, if not restored immediately. I sincerely request you to take immediate steps to fill the crack and ease my anxiety."
(ii) On or about 25th December 2013, a part of the slab in the Flat on the 1st floor of B-Wing of the suit building collapsed and seriously injured one minor child --Master Harsh Bhanushali, son of Mr. Hemraj Bhanushali, a Member of the Plaintiff Society. This was communicated by the said Member to the Managing Committee of the Plaintiff vide his letter dated ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -52- NMSL 1341/2016 26th December 2013. Copies of the photographs showing the injury were also forwarded by the Member to the Society under cover of his said letter ( Annexures "E and F" to the compilation submitted by the Plaintiff at pages 95-96).
(iii) All 66 Members, including Defendant Nos. 1 to 4 have written individual letters to the Society dated 15th and 20th February, 2014 stating that, "As our Society's building structural condition has deteriorated beyond repairs, I would request you to arrange general body meeting to take up matter for redevelopment of our Society at the earliest." (Pages 91-
94 of the Compilation).
(iv) M/s. Epicons Consultants after carrying out several tests, including the core test, rebound hammer test, ultra sonic pulse velocity test, half cell potentiometer test and carbonation test have in their Report dated 18th May,2015 , inter alia concluded as follows:
"1. The distress in the RCC members is on account of corrosion of reinforcement bars and is very critical and alarming. Corrosion process is aggressive and spreading fast.
2. RCC columns at all levels have severe corrosion cracks which are serious in nature and endanger the structural safety of the building.
3. Also, the slabs & beams are affected due to reinforcement corrosion, which will affect the safety of the ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -53- NMSL 1341/2016 occupants due to the hazard of ceiling giving way.
4. The structure is dilapidated condition and not fit for occupation. Considering the present condition and age of the building option of reconstruction may be considered as repairs are not feasible. Newly constructed building can comply with latest Earthquake resistant design requirement and durability aspects."
The detailed Structural Audit Report of the suit building dated 18th May, 2015 is at pages 15-87 of Part-I of the compilation submitted by the Plaintiff. The photographs showing the dilapidated state of the building are at pages 1 to 14 of the compilation submitted by the Plaintiff. The allegation therefore of the Defendant Nos. 1 to 3 that the suit building is not in a dilapidated condition cannot be accepted and is rejected. In fact it is for this reason that 53 Members have vacated their respective flats in the suit building even before execution of the development agreement since they do not want themselves and/or their family members to suffer in the event of some mishap occurring on account of the dilapidated condition of the suit building. Therefore even the allegations made by Defendant Nos. 1 to 4 that 53 Members have vacated their respective flats for ulterior motives and the Defendant No. 7 Developer is making ex-gratia payments towards transit rent to them only to secure their support and votes, cannot be accepted and is rejected.
26.3 According to Defendant Nos. 1 to 3, the Plaintiff has made a ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -54- NMSL 1341/2016 false claim in paragraph 17 at page 12 of the Plaint to the effect that, "All members of the Plaintiff (66 members) with the exception of Defendant Nos. 1 to 6(6 members) are accepting transit compensation from Defendant No.7." The true position is that 13 Members of the Plaintiff have not accepted such compensation at any time.
The above submission of Defendant Nos. 1 to 3 is incorrect. In Paragraph 16 at page 12 of the Plaint, the Plaintiff has stated that fifty-three (53) of the Plaintiff's Members are accepting the afore-mentioned ex-gratia payments towards transit rent and that seven (7) other Members have agreed to vacate their respective flats. In paragraph 17 it is stated that, "The Plaintiff states that save and except the flats occupied by Defendant Nos. 1 to 6 herein all other flats are either vacated or agreed to be vacated by the members of the Plaintiff Society voluntarily of their own free volition as aforesaid to facilitate the demolition and redevelopment work of the Plaintiff Society." Thus, Defendants Nos. 1 to 3's interpretation of the said paragraph is erroneous, as is borne out from a bare reading of the Plaint. 26.4 According to Defendant Nos. 1 to 3, since the Structural Engineer M/S Epicons Consultants Pvt. Ltd had been associated with Defendant No.7 in their previous projects, the Structural Audit Report dated 18th May 2015 is unreliable.
::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -55- NMSL 1341/2016 As correctly submitted by the Plaintiff, M/s. Epicons Consultants Pvt. Ltd., are independent structural auditors and engineers who are empaneled with the MCGM and were appointed as structural consultant for the suit project, by Defendant No. 7 at the request of the Plaintiff to gauge the condition of the Plaintiff's building at the relevant time. Merely because M/s. Epicons Consultants Pvt. Ltd. have in the past worked with Defendant No. 7 on a different project it cannot be alleged that the Report submitted by them is unreliable. Again, the insinuations and allegations in respect of the unreliability of the said Report are vague and baseless and cannot be accepted.
26.5 According to Defendant Nos. 1 to 3, the adjoining Delite building constructed around the same time is sound and therefore this fact disproves that the suit building is dilapidated:
Since the Plaintiff Society's building consisting of Wings A, B, C and D and the other building of the neighbouring Delite Society are two separate structures/buildings standing apart from each other, the neighbouring building of Delite CHS Ltd. can have no bearing or relevance on the condition of the suit building. The fact that the suit building was earlier a part of the larger society which included the Delite Society's building is equally irrelevant. In fact the Plaintiff has produced the Minutes of the Annual General Body Meeting held on 23rd August, 2015 ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -56- NMSL 1341/2016 of the Delite CHS Ltd. and the requisition letter addressed by 67 out of 102 members of the said Society dated 24th June, 2014 to show that Delite CHS Ltd. is also undertaking redevelopment of its buildings comprising of Wings E to H on account of its dilapidated condition. The above grievance of Defendant Nos. 1 to 3 therefore cannot be accepted and is rejected. 26.6 According to Defendant Nos. 1 to 3, the Plaintiff has fraudulently attempted to enforce the IOD condition in Clause 53 (demolition of the building after vacating the members) and breach of the IOD conditions 55 and 56 (submitting consent letters/individual permanent alternate accommodation agreements).
26.7 The Plaintiff Society has submitted that there is no violation of the IOD conditions as alleged since 62 out of 66 Members (all except Defendants Nos. 1 to 4 herein) have already agreed to vacate their respective premises and given their consent to the Plaintiff in this regard.
The Plaintiff Society has further submitted that since the proposal for redevelopment has been submitted by the Plaintiff and the IOD has been issued in the name of the Plaintiff, there is no need to execute Consent Letters or Individual Agreements as envisaged in condition nos. 55 and 56 of the IOD between the said Members and Defendant Nos. 7 at this stage for the purposes of demolition. It is submitted that the Plaintiff's advocate has already forwarded individual permanent alternate accommodation ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -57- NMSL 1341/2016 agreement to Defendant Nos. 1 to 4. In any event, the Plaintiff Society and the developer has now given the following undertakings which are accepted by the Court:
(i) That the development agreement between the Plaintiff Society and the Defendant No. 7 developer shall be executed within 25 days from the date of this order;
(ii) A provisional tripartite agreement for permanent alternate accommodation shall be executed between the individual members of the Society, the Society and the developer, before the members vacate their respective premises and before carrying out any demolition.
(iii) That a final tripartite agreement in identical terms of the provisional agreement shall be executed on receipt of the full commencement certificate.
(iv) The Plaintiff Society and Defendant No. 7 developer shall abide by the terms of the IOD.
26.8 According to Defendant Nos. 1 to 3, the Plaintiff has breached Clauses 3, 5, 7, 12, 17 and 18 of the Letter of Intent ('LoI'). As regards Clause 3 of the LoI, dealing with the payment of hardship compensation, the Plaintiff has correctly pointed out that there is no difference in the commercial terms of payment towards hardship compensation in the LOI and the Development Agreement. The ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -58- NMSL 1341/2016 modification in the timeline for making payments was necessitated on account of the change in circumstances (i.e., the exigent vacating of 53 flats and the non-execution of the Development Agreement before the issuance of the IOD caused on account of the Property Register Card issue) and the same has been duly approved by an overwhelming majority of the Plaintiff's Members in the Special General Body Meeting held on 24 th January 2016, in which Meeting, Defendants Nos. 1 to 4 also participated and merely sought time to study the Draft Development Agreement . With respect to the allegation regarding violation of Clauses 5 and 12 of the LOI dealing with loading of TDR, Defendant No. 7 has committed that they shall purchase TDR in the name of the Plaintiff after the issuance of the commencement certificate for the plinth of the proposed building and before obtaining the full commencement certificate, in one stroke, and load the same on the suit property when the entire 2.4975 FSI will be utilized. As correctly submitted by the Plaintiff, it is in fact in the interest of Defendant No. 7 to ensure that TDR is loaded for the redevelopment since Defendant No. 7 would not be in a position to construct the free-sale component without the same. In fact, Defendant No. 7 has undertaken before this Court in the Consent Terms dated 8th June, 2016 executed between the Plaintiff and Defendant Nos. 5 and 6 to load the full TDR at one stroke immediately after obtaining the commencement certificate from ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -59- NMSL 1341/2016 MCGM upto Plinth level.
With regard to Clause 7 of the LOI dealing with the Bank Guarantee of Rs. 7.5 crores to be given by Defendant No.7, the said Bank Guarantee has already been sanctioned by Kotak Mahindra Bank on 29th April, 2016, a copy of which is annexed at pages 117 to 125 of the Compilation submitted by the Plaintiff. Defendant No. 7 has committed to the Plaintiff that they shall handover the Bank Guarantee to the Plaintiff at the time of handing over of vacant possession of all the flats in the Plaintiff's building, in accordance with Clause 6(n) of the approved Draft Development Agreement .
With regard to Clauses 17 and 18 of the LOI dealing with the non- execution of the development agreement, as pointed out hereinabove, several of the Plaintiff's Members including Defendant No. 1 insisted that the Plaintiff's name must be brought on the Property Register Card of the sub-divided suit property prior to the execution of the Development Agreement with Defendant No.7. The name of the Plaintiff was brought on the said Property Register Card on 31st March 2016. The decisions taken by the overwhelming majority of the Plaintiff's Members in the various Special General Body Meetings of the Plaintiff are binding on all the Members, including Defendant Nos. 1 to 4. Defendant No. 7 has assured the Plaintiff that it would bear the necessary expenses such as stamp duty ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -60- NMSL 1341/2016 and registration charges at the time of execution of the Development Agreement.
In view thereof, the above submission qua non-compliance of the above LOI by the Plaintiff raised by Defendant Nos. 1 to 3 are in my view untenable and cannot be accepted. It is pertinent to note that the Letter of Intent only provided guidelines for the implementation of the redevelopment process and was not intended to be anything more, as is apparent from Clause 17 of the LOI which states that nothing shall be binding on the parties till such time the detailed development agreement is executed between the parties. Again, there has been no change in the commercial terms of redevelopment and the only adjustments and alterations have been in respect of timelines, the same being necessitated by the exigent and unavoidable circumstances of the redevelopment. 26.9 According to Defendant Nos. 1 to 3 the non-vacating of the flats is not the only reason behind the Plaintiff not being able to start demolition. It is submitted that the demolition work has been stalled due to the issuance of a letter dated 30th March, 2016 by MCGM whereby the issuance of plinth CC has been halted.
According to the Plaintiff, there has been no "halting'' or stoppage of plinth CC. In fact there is no question of issuing plinth CC at this stage when the suit building is yet to be demolished. As regards the letter dated 30 th March, ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -61- NMSL 1341/2016 2016, relied upon by Defendant Nos. 1 to 3, the Plaintiff has submitted as follows:
(i) On 3rd February 2016, MCGM addressed a letter to the Plaintiff calling upon the Plaintiff to submit its response to the various complaints received from Defendant Nos. 1 to 3.
(ii) The Plaintiff duly responded to the said letter vide its letter dated 6th March 2016.
(iii) MCGM by its letter dated 16th March 2016 addressed to Defendant No.3 expressed its satisfaction that the necessary documents enquired about by Defendant No. 3 have been provided by the Plaintiff Society and that MCGM would issue the Commencement Certificate on the usual terms upon compliance of the conditions of the IOD by the Plaintiff.
(iv) MCGM addressed a second letter dated 30th March 2016 to the Plaintiff seeking clarifications regarding few alleged issues raised by Defendant No. 1.
(v) The Plaintiff, by their letter dated 16 th April 2016 (wrongly typed as 16th "March" 2016) which has been received by MCGM on 18 th April 2016, duly responded to the said queries. MCGM has thereafter not raised any further query in this regard.
In view of the above, the submission by Defendant Nos. 1 to 3 that non vacating of the flats is not the only reason behind the Plaintiff not being ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -62- NMSL 1341/2016 able to start demolition and that MCGM by its letter dated 30th March, 2016 has halted the issuance of the plinth CC cannot be accepted and is rejected.
26.10 According to Defendant Nos. 1 to 3, the carpet area of their flats is much higher than what is stated by the Plaintiff Society in the Plaint, as per their Licensed Surveyor Report annexed and marked as Exhibit N at page 359 to their detailed Affidavit dated 6th June 2016. It is submitted on behalf of the Plaintiff that the carpet area of the flat of Defendants Nos. 1 to 3 and all other Members have been correctly measured by the Plaintiff. The same is established by the following:
(i) The source of data regarding the carpet area of the existing flats in the Plaintiff building is the duly certified copy of the Occupation Certificate (OC) Plan No. CE/3895/BPES/AN dated 15 February 1983 of the Plaintiff's building duly sanctioned by MCGM. This information and the copies of the said sanctioned OC plan were provided to Defendant No.1 by the Plaintiff vide its letter dated 18th February 2016. The aggregate area of all the existing flats in the Plaintiff's building is calculated exactly as per the said sanctioned and approved OC Plan dated 15 February 1983, and there is no misrepresentation, as alleged by Defendant Nos. 1 to 3.
(ii) The dispute in respect of area discrepancy has been raised by Defendant Nos. 1 and 3 in respect of their respective flats, viz.A-102 and ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -63- NMSL 1341/2016 A-101, both of which are located on the 1 st floor of Wing A of the suit building. The sanctioned OC plan clearly demonstrates that all the flats in Wing A (except Ground floor) are equal and identical in terms of their carpet area and they admeasure 428 sq. ft. Enlarged versions of the extract of the sanctioned OC drawing showing typical first floor plan and flats bearing A-102 and A-101 are annexed at Annexure "O-1 and O-2"
(respectively) to the Compilation tendered along with the Affidavit in Rejoinder dated 12th July 2016. The photograph showing flat bearing no. A- 102 is annexed at Annexure "O-3 and O-4" to the Compilation tendered along with the Affidavit in Rejoinder dated 12th July 2016. A comparative reading of the said OC plan and the said photographs of the said flat bearing no. A-102 clearly shows that Defendant No.1 has extended the balcony in the living area and kitchen area beyond the sanctioned OC plan. This is apparent when these flats are compared with the flats on the 2nd floor of Wing A.
(iii) The registered Flat Purchase Agreement dated 23rd May 1995 in respect of Flat bearing no. A-101 belonging to Defendant No.3, shows that the carpet area of the said Flat bearing no. A-101 as 410 sq.ft. only.
(iv) The Plaintiff has produced a superimposed drawing of the sanctioned OC plans on the plan in respect of Flats Nos. A-101 and A-102 based on the dimensions as certified by Defendants Nos. 1 to 3's Licensed ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -64- NMSL 1341/2016 Surveyor Mr. Jatin Bhuta to demonstrate the encroachment on the plan.
(v) The respective carpet areas of the flats of the Plaintiff's Members are shown in Annexure K to the approved draft development agreement. From the said annexure it is clear that all the flats in Wing A of the Plaintiff's building (except the flats on the Ground Floor) admeasured 428 sq. feet at the time when the building was constructed and the occupation certificate was issued in 1983. This is apparent from the certified copy of the sanctioned OC plan. However, at the time of selling the flats, the promoters sold certain rooms in the flats in A-wing to the buyers of the adjoining flats in A-wing with the consent of both the buyers and as a result one flat became larger and the other one smaller. For example, Flat No. A/203 and A/204 should both admeasure 428 sq.ft.
However, Flat No. A/203 admeasures 553 sq. ft. and Flat No. A/204 admeasures 303 sq. ft. The aggregate of these two flats is 856 sq. ft., which corresponds to 428 x 2. This explains the differences in the areas of certain flats in A Wing at present when compared with the areas shown in the sanctioned OC plan. However, the average of the aggregate areas of such pairs of neighbouring flats is the area as per the sanctioned OC plan, viz. 428 sq. ft. The additional areas given to the Plaintiff's Members in the redevelopment are calculated on the present area occupied by these Members and a tabular representation of these areas is annexed as ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -65- NMSL 1341/2016 Annexure "S" to the Compilation tendered along with the Affidavit in Rejoinder dated 12th July 2016.
(vi) The Reports submitted by the Project Management Consultant (PMC) dated 16th March 2014 and by M/s. Ashishkumar Vishwakarma, an independent architect also certify the areas as per the said sanctioned OC plan. Copies of these Reports are annexed at Annexure "T-1" and "T-2" to the Compilation tendered along with the Affidavit in Rejoinder dated 12 th July 2016.
(vii) The overwhelming majority of 63 out of 66 Members (including Defendant No.4) have confirmed that the existing area of their respective flats is exactly as per the said sanctioned OC plan. It is submitted by the Plaintiff that according to Defendant Nos 1 to 3, 90% of the Plaintiff's Members are in the real-estate business and are deemed to have a better understanding of such matters. Thus, there is no reason to doubt the authenticity of the said plan. Copy of the said letter by Defendant No. 4 confirming the area of his respective flat is annexed at Annexure "U" to the Compilation tendered along with the Affidavit in Rejoinder dated 12 th July 2016.
(viii) In so far as Flat No. 002 in the A-Wing is concerned, Defendant No. 1 has raised the dispute regarding the correctness of the carpet area for the first time in Paragraph 11(xv.) at pg. 43 of her Rejoinder in response to ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -66- NMSL 1341/2016 the Written Argument of the Plaintiff dated 26 th July 2016. She contends that her Flat No. A-002 admeasures 356.60 sq. ft. She has arrived at this area by assuming that Flat No. A/102 which is directly above her flat admeasures 475.39 sq. ft., and she deducts an area equivalent to 118.39 sq. ft., being the area of one bedroom as per her surveyor's calculations, from the said 475.39 sq. ft. and arrives at the said figure of 356.60 sq. ft. The Plaintiff has correctly calculated the area of the said Flat No. A/002 as 264 sq. feet exactly as per the sanctioned OC Plan. The Plaintiff has added 23 sq. feet extra area, being 60% of the 'Otla' area (of 37sq. ft.) to this area, resulting in the total area of 287 sq. feet. The said method of calculation, i.e. calculating the carpet area as per the sanctioned OC Plan and adding 60% of the Otla area, has been consistently applied to all the ground floor flats of the Plaintiff -Society.
(ix) The areas of all the flats were approved by the Plaintiff in its Special General Body Meeting dated 24th January 2016, wherein the Draft Development Agreement with the annexed area calculations at Annexure "K" was approved by an overwhelming majority of the Plaintiff's Members.
In view of the above explanation/submission of the Plaintiff and further in view of the fact that none of the Defendants have challenged the said Resolution passed in the Special General Body Meeting dated 24 th January ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -67- NMSL 1341/2016 2016 till date, the dispute raised by Defendants Nos. 1 to 3 qua the alleged discrepancies in the carpet area of the flats occupied by them is baseless and untenable and cannot be accepted.
26.11 Defendants Nos. 1 to 3 have submitted that an aggregate of 1,188 sq. feet of additional area is provided to few select Members in the manner set out hereinbelow:
Sr. Additional No. Of members Reason
No. Area (in sq ft.)
1. 399 19 Otla /passage area
2. 390 1 [owner of Flat No. Terrace
D/305]
3. 399 1 [Defendant No. 6 as Terrace
owner of Flat No.
B/205]
Total: 1188 sq.ft. 21 members
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It is submitted on behalf of the Plaintiff that the column of 'additional area' as per Annexure "K" of the draft Development Agreement (approved by the Plaintiff-Society vide its Resolution passed in the Special General Body Meeting dated 24th January 2016) is based on the following:
(a) All the ground floor Members of A, B and C Wings are entitled to receive 60% of the 37 square foot area of Otla, that is 23 square feet which has not been marked on the original OC plan. It is pertinent to note that Defendant No. 1, having Flat No. 002 in the A Wing, has also been given this benefit of 23 sq. ft.
(b) Members of the B wing having flat Nos. 003/103/203/303 and 403; and D Wing having flats nos. 103/203/303 are entitled to receive an additional 10 square feet area, being 60% of the 16 sq. ft. area of the portion of the passage which actually forms part of these flats. This area has been agreed by all the Members of the Plaintiff Society. In fact, the area of each Member is mentioned in the draft development agreement and is not objected to by a single member save and except Defendant Nos.1 to 3.
In my view, the Plaintiff has therefore correctly justified as to why an additional area of 399 sq.ft. (in aggregate) is given to various Members of the Plaintiff, including Defendant No. 1 herein.
Again, the additional area of 399 square feet given to Defendant No. 6 (as ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -69- NMSL 1341/2016 owner of Flat No. B/205) and 390 sq.ft. to the Owner of Flat D/305 is due to the adjoining terraces owned by them. It is submitted on behalf of the Plaintiff Society that Defendant No. 1 is well aware of this fact and had raised a query in the Special General Body Meeting held on 24 th January, 2016 viz. "on what basis and rules the 3 new tenements having adjoining terrace are being allotted to 3 members." The Chairman of the Society had in the said Meeting itself given an explanation that 'since, the terrace areas were sold to three members by the original builder as reflected in their original agreements and they are in possession of the same, the Plaintiff Society with the consent of the majority of the members had decided to create and allot the terraces of the same size for the 3 members.' No member in the said Meeting or thereafter has raised an objection with regard to the same.
Again, a set out hereinabove the areas of all the flats were approved by the Plaintiff in its Special General Body Meeting dated 24 th January, 2016, wherein the draft development agreement with the annexed area calculations at Annexure-K (at page 189 of the Plaint) was approved by an overwhelming majority of the Plaintiff's Members and none of the Defendants have challenged the said Resolution passed in the Special ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -70- NMSL 1341/2016 General Body Meeting dated 24th January, 2016 till date. In view of the above facts placed and explanation given by the Plaintiff Society, the allegation of Defendant Nos. 1 to 3 that few select Members are given extra area therefore cannot be accepted and is rejected. 26.12 It is also alleged by Defendant Nos. 1 to 3 that the allotment of flats by the Plaintiff has been done arbitrarily and is contrary to the general policy laid down in the Resolution dated 19 th July, 2015. It is submitted that as per the said Resolution, the allotment of flats in the new building would be done floor-wise, that is from the upper to the lower floors ['Top to bottom' policy]. It is submitted by them that as per this Policy, they should have been allotted flats on the 5th and 6th floors. However, they have been allotted flats on the 1st and 2nd floor. It is submitted that this discrimination is meted out to them because they are opposing the redevelopment process.
It is submitted by the Plaintiff that the allotment of new flats in the proposed building has been done by the Plaintiff and shown in Annexure "O" to the draft development agreement which has been approved by an overwhelming majority of the Plaintiff's Members in the Resolution passed in their Special General Body Meeting held on 24 th January 2016. The Plaintiff has pointed out that in fact several other Members of the Society ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -71- NMSL 1341/2016 having flats on the ground and first floor have been allotted new flats on the lower floors in the proposed building (as opposed to the higher 5 th, 6th and 7th floors) since the flats on the upper floors were allotted to other Members of the Plaintiff as per the said Policy ['Top to bottom' policy]. Some of these cases are tabulated as under:
Sr. No Name of the member Current Flat No. Proposed
Flat No.
1 Santosh Singh A/001 A/101
2 Vijay Kokre A/204 B/302
3 Mehul Shah (Defendant No.3) A/102 C/201
4. Lalji K. Patel B/105 B/201
5. Narendra Patel B/202 B/301
6. Meghji Ramjiyani D/103 B/102
The Plaintiff has also correctly pointed out that the allegation that the Plaintiff has discriminated against Defendants Nos. 1 to 3 because they have been obstructing the redevelopment process is false and untenable, since Defendant No. 4, who has also been a non-co-operative member, has been allotted a new Flat being No. C/701 in lieu of his existing Flat No. A/302, which shows that there is no discrimination practiced against the non-co-operative members by virtue of the present litigation. The Plaintiff has further explained that Defendant Nos. 1 and 2 have been ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -72- NMSL 1341/2016 allotted flats on the 1st and 2nd floor on account of the factors mentioned hereinbelow:
(a) Defendants Nos.1 and 2 had orally submitted in various meetings that they would not purchase or let go even 1 square foot area and wanted their flats to be exactly having 45% additional area. Keeping their request in mind, the Plaintiff requested its Architect to design their flats to be exact with the plan in order to avoid variation to the extent of even 1 square foot in area.
(b) This is evident from Annexure K-1 annexed to the plaint at page 190 which inter-alia shows that Defendant No.1 is getting 4 square feet less and Defendant No.2 being from the same family is getting 4 square feet extra, thereby causing no variation. As seen from Column No.8 of the same table, Defendant No.1 is the only Member whose flat size is 412 square feet and is different from all other flats which are identical to each other in their respective wings.
(c) Due to the aforesaid constraint of having to design a flat for Defendant No.1 admeasuring 412 square feet, the Plaintiff, on the direction of MCGM, had to take a special concession for the same and had to design the said flat on the 1st floor of the wing with cross beams in the duct which is created so as to ensure that there will be no encroachment in future. ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -73- NMSL 1341/2016 Hence, on request of Defendant No. 1 and adhering to the aforesaid technical constraint, the said flat could only be made on the 1 st floor and correspondingly, Defendant No. 2, being part of the same family as Defendant No. 1, was allotted the 2nd floor flat above Defendant No.1. It is submitted that these facts were made abundantly clear to Defendants Nos. 1 and 2, which have been conveniently suppressed by them from this Court. In view of the above explanation of the Plaintiff, in my view, it cannot be said that the flats allotted by the Plaintiff to Defendant Nos. 1 to 3 are 'arbitrary' and/or that they have been discriminated against because they have been obstructing the redevelopment process.
26.13 Defendant Nos. 1 to 3 have alleged that the selection of Defendant No. 7 Developer was stage managed; its appointment was suppressed; the tendering process was not followed; there is no Certificate showing that Defendant No. 7 is a registered partnership firm; Defendant No. 7 has no experience in redevelopment; it has not disclosed any information qua the professionals appointed by it, Defendant No. 7 has not produced its Income Tax Returns; Defendant No. 7 is only an investor and actually one of the Members Shri Tulsibhai Patel is carrying on all the redevelopment process; and that the Defendant No. 7 is not a necessary party to the Suit. Defendants Nos. 1 to 3 have alleged that two other offers received, apart from the offer of Defendant No.7, are the offers from: (i) Vinayak ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -74- NMSL 1341/2016 Constructions and (ii) Sai Ram Developers. Both these Firms belong to the sons of the current Chairman of the Plaintiff Society. It is submitted that therefore the entire process of appointing the Defendant No. 7 was stage managed by giving other bids which were non- existent or which were mere decoy so that the Members are made to believe that the Defendant No. 7 had allegedly given the "best offer".
The above allegation made by Defendant Nos. 1 to 3 is refuted by the Plaintiff Society. As set out hereinabove, at the Special General Body Meeting of the Plaintiff's Members held on 16 th March, 2014, all the 54 Members present and voting, unanimously resolved not to opt for issuing tenders and instead decided to invite offers for redevelopment from reputed and known developers. Defendant Nos. 1 to 3 who were present at the said Meeting did not object to this procedure. Again as submitted by the Plaintiff Society, at the Special General Body Meeting of the Plaintiff Society held on 13th April 2014, from a comparative analysis of the offers received by the Plaintiff from the three bidders, the Members passed a Resolution by an overwhelming majority selecting Defendant No. 7 as the Developer since his offer was the best offer according to a majority of the Members. The Defendant Nos. 1 to 4 were present at the said Special General Body Meeting. The queries raised by Defendant Nos. 1 and 2 at the said Meeting were also responded to. The Defendant Nos. 1 to 4 or ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -75- NMSL 1341/2016 any Member of the Plaintiff Society have till date not challenged the said Resolution. In fact, the said Resolution dated 13 th April, 2014 has been substantially acted upon, and both the Plaintiff and the Defendant No. 7 have taken substantial steps for the redevelopment project based on the said Resolution dated 13th April 2014 and have spent approximately eight crores on the project. In fact, several Resolutions have been passed subsequently in furtherance of the said Resolution dated 13th April 2014 pertaining to the redevelopment process, in successive Special General Body Meetings in which Defendant Nos. 1 to 3 were present and have been a party to the discussions and deliberations regarding the redevelopment process. Thus, the challenge to the selection of Defendant No. 7 and the Resolution dated 13th April 2014 is purely in the nature of an afterthought, which ought not to be countenanced at this stage.
Defendant Nos.1 to 3 have disputed that Defendant No.7 has already incurred an expense of Rs. 8 Crores/- on the project. According to them, Defendant No. 7 and the Plaintiff Society have failed to spend any amount towards ensuring transparency by video recording the General Body Meeting, building a proper wall, recruiting a watchman, installing a CCTV camera, etc. all of which is required to ensure the safety and security of the Members. I see no substance in this submission since Defendant No. 7 have not only set out in paragraph 3 (d) (9) of its Affidavit-in-Reply dated ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -76- NMSL 1341/2016 29th April 2016 the expenditure of Rs. 7.34 crores incurred upto 16 th April, 2016, but have also produced the Certificate of its Chartered Accountant certifying the total expenditure of Rs. 7.34 crores incurred by it on the redevelopment process. As correctly submitted by the Plaintiff, since the Members of the Society have already decided to redevelop the Plaintiff Society building, it was not deemed prudent to incur expenses such as installation of CCTV cameras, etc. to enhance safety and security or for transparency. Defendant No.7 in fact has already committed to provide CCTV Cameras, Intercom System and other facilities in the new building for enhanced safety and security of all Members, as set out in the List of Amenities annexed at Annexure "X-3" at page No. 178 of the Compilation tendered along with the Affidavit in Rejoinder dated 12th July 2016. I also see no substance in the contentions raised by Defendant Nos. 1 to 3 that Defendant No. 7 has not provided the Partnership Registration Certificate as it is not an experienced Developer and has also not provided the requisite information to the Members of the Plaintiff Society. Defendant No. 7 has produced the Certificate of Registration issued by the Registrar of Firms, and the same is annexed at Annexure-Y-2 (page 182) to the compilation tendered along with the Affidavit in Rejoinder dated 12th July 2016. Defendant No. 7 has also pointed out that it has vast experience in real estate development and has single-handedly developed a huge ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -77- NMSL 1341/2016 residential complex of two buildings with 19 stories known as "Lords" in Bhandup (West), Mumbai. It is submitted that Defendant No.7 was able to accomplish this project within 731 days, a feat which has been commended and noted in the Limca Book of Records, a copy whereof is annexed at Annexure "Y-3"(Page 183) to the Compilation tendered along with the Affidavit in Rejoinder dated 12th July 2016.
As regards the allegation that Defendant No. 7 has failed to disclose the name and address of the professionals appointed by Defendant No. 7, and has also not disclosed its Income Tax Returns, the Plaintiff has correctly pointed out that the Structural Engineer being M/S Epicons Consultants is known to all the Plaintiff's Members, including Defendants Nos. 1 to 3. As far as the civil engineer, supervisors, licensed plumber, painter, hardware suppliers etc. are concerned, they are yet to be appointed, since the construction work in the project is yet to commence. Defendant No. 1 had made enquiries vide her e-mail dated 7 th February, 2016 qua the Income Tax Returns of Defendant No.3. The Plaintiff vide its letter dated 18 th February, 2016 had already clarified that the Income Tax papers were provided by the Defendant No.7 and kept in the Plaintiff's Society Office for inspection. (Annexure "N" at pg. 131 to 137 of the Compilation tendered along with the Affidavit in Rejoinder dated 12th July 2016). ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -78- NMSL 1341/2016 Defendants Nos. 1 to 3 have also alleged that one Tulsibhai Patel, one of the Members of the Plaintiff is the one carrying out the redevelopment process and Defendant No.7 is only an investor. It is further alleged that Shri Tulsibhai Patel has incurred severe losses and is attempting to profit from the Plaintiff Society's redevelopment in order to cover his business losses. The Plaintiff has denied and disputed the said allegations and has correctly submitted that the allegations made by Defendant Nos. 1 to 3 are vague and devoid of any particulars. As stated earlier, it is the General Body of the Plaintiff Society which has at its Meeting held on 13 th April, 2014, by a Resolution passed in presence of the representative of the Deputy Registrar of Societies appointed Defendant No. 7 as the Developer, which Meeting was attended by Defendant Nos. 1 to 4 and though Defendant Nos. 1 and 2 have not signed the Attendance Sheet, they have at the said Meeting raised queries regarding the redevelopment process, which queries were answered by the office-bearers of the Plaintiff. It is also relevant to note that the Defendant No.4 himself had proposed the name of the Defendant No.7 as the developer for redevelopment of building of the Plaintiff Society. As repeatedly stated herein, the Resolution dated 13 th April, 2014 appointing Defendant No. 7 as the Developer, is in the last 3 years not challenged by any Member including Defendant Nos. 1 to 3. 26.14 As set out in paragraph 20 above, Defendant Nos. 1 to 4 have ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -79- NMSL 1341/2016 submitted that the partners of Defendant No. 7 are having close dealings with Mr. Tulsi Patel and their Companies and partnership firms are financially not sound and therefore they will not be able to complete the project. The submissions of Defendant Nos. 1 to 4 have been responded to by Mr. Parikshit Niglani, as set out in paragraph 20 above. I am not in agreement with the submissions advanced by Defendant Nos. 1 to 4. Defendant No. 1 has till date spent about Rs. 8 crores on the project. In addition to that, Defendant No. 7 has paid several crores to the members who have vacated their dilapidated tenements/flats towards compensation for temporary alternate accommodation. Defendant No. 7 has produced a letter dated 29th April, 2016, from Kotak Mahindra Bank sanctioning a Bank Guarantee of Rs. 7.5 crores which Bank Guarantee, as undertaken by Defendant No. 7 in the consent terms dated 15th June, 2016, shall be handed over to the Plaintiff when Defendant No. 7 obtains vacant possession of the suit building. In fact, 62 out of 66 members have, as recently as on 11th July, 2016, signed a declaration-cum-undertaking giving consent to the redevelopment process and for the appointment of Defendant No. 7 as the developer which shows that each and every member of the Society except the four non-co-operative members have full faith and trust in the Defendant No. 7 and the promises made by him. As set out hereinabove, Defendant Nos. 1 to 4 have submitted that they are not against ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -80- NMSL 1341/2016 redevelopment in principle. However, their main concern is that Defendant No. 7 is not financially equipped to carry out the redevelopment as agreed and therefore he should be asked to secure them by depositing the value of their flats in Court. If such a condition i.e. to deposit the value of the flats of all the members/tenants in Court is imposed on the developers who undertake the redevelopment projects, not a single developer would come forward to undertake any redevelopment project and the redevelopment work which is required to be carried out with regard to the buildings which are in dilapidated condition will completely come to a stand-still. However, the developer gave an offer to purchase the flats of the non-co- operative members at the ready reckoner rate to enable them to buy flats elsewhere. Defendant No. 4 submitted that the developer will be selling their free sale flats at Rs. 21,000/- per sq.ft. in the present project but is offering only the ready reckoner rate i.e. Rs. 9,000/- per sq.ft. to the non- co-operative members. The developer therefore made a with prejudice offer to purchase the existing flats of the non-co-operative members at the rate of Rs. 21,000/- per sq.ft. However, the non-co-operative members who insist that Defendant No. 7 is not financially sound to complete the project have refused to accept the offer of Defendant No. 7 thereby making it clear that their so-called concern that the developer will not complete the project due to want of funds, completely lacks bona fides.
::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -81- NMSL 1341/2016
As regards the allegation that Defendant No. 7 is not a necessary party to the present Suit, the Plaintiff has again correctly submitted that Defendant No. 7 has been made a party to the present Suit as the Plaintiff Society has appointed Defendant No. 7 as the Developer and ultimately it is the Plaintiff's prerogative to implead parties being dominus litus. 26.15 Defendant Nos. 1 to 3 have alleged that one Mr. Tulsi called their licensed surveyor, Mr. Jatin Bhutta, and forced him to prepare another report as per the Occupation Certificate of MCGM.
It is explained on behalf of the Plaintiff that it was the Plaintiff who had in an effort to arrive at an amicable solution requested Mr. Bhutta to calculate and certify the area of the flats in A Wing in accordance with the sanctioned OC Plan. However, Mr. Bhutta recused himself on account of the objections raised by Defendant No. 1 and did not prepare another plan. 26.16 Defendant Nos. 1 to 3 have alleged that as per the information received by them in reply to their RTI by MCGM, MCGM File containing the Occupation Certificate is missing in the MCGM records. The Plaintiff has submitted that the Plaintiff is not aware about the MCGM File containing the Occupation Certificate being missing and in any event the Plaintiff is not in any manner liable or responsible for the same. 26.17 Defendant Nos. 1 to 3 have submitted that Defendant No. 7's ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -82- NMSL 1341/2016 decision to execute individual permanent alternate accommodation agreements after CC is in violation of clause 56 of IOD and the Plaintiff ought not to support it.
In the Special General Body Meeting of the Society held on 24th January, 2016, it was resolved as under:
"It is discussed, decided and resolved to comply with the terms and conditions of the Intimation of Disapproval dated 14th January, 2016, after execution and registration of the Development Agreement as early as possible".
As set out hereinabove, the Plaintiff Society and the Defendant No.7 have inter alia given the following undertakings to this Court:
(i) That the development agreement between the Plaintiff Society and the Defendant No. 7 developer shall be executed within 25 days from the date of this order;
(ii) A provisional tripartite agreement for permanent alternate accommodation shall be executed between the individual members of the Society, the Society and the developer before the members vacate their respective premises and before carrying out any demolition.
(iii) That a final tripartite agreement in identical terms of the provisional agreement shall be executed on receipt of the full commencement certificate. ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -83- NMSL 1341/2016
(iv) The Plaintiff Society and Defendant No. 7 developer shall abide by the terms of the IOD.
The above undertakings are accepted by the Court and the same takes care of the concerns expressed by Defendant Nos. 1 to 4.
26.18 Defendant Nos. 1 to 3 have submitted that the Draft Development Agreement is lopsided on account of the Plaintiff being awarded the PMC and the Advocate for the Plaintiff Society being biased towards Defendant No. 7. In support of this contention, Defendant Nos. 1 to 3 have contended that the Draft Development Agreement does not have a termination clause and did not include the list of amenities finalized in the Special General Body Meeting of 4th February,2016, for which the Minutes have also not been provided. Defendant Nos. 1 to 3 have also contended that no relief be granted to the Plaintiff with regard to the execution of the Draft Development Agreement annexed to the Plaint since suggestions of Defendant Nos. 1 to 3 have not been taken into consideration. The allegations and insinuations against the Plaintiff, Defendant No.7 and the professionals involved in the redevelopment project are, as correctly submitted by the Plaintiff, unsubstantiated and unfair. The appointment of ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -84- NMSL 1341/2016 the PMC was pursuant to a unanimous Resolution passed by the Plaintiff Society in their Special General Body Meeting dated 27 th February, 2014. The allegation that the development agreement is lop sided also cannot be accepted, since as submitted by the Defendant Nos. 1 to 3 themselves, a vast majority of the Plaintiff's Members are engaged in the business of real estate development and allied activities. From the Minutes of the Meetings, it is clear that the Members have discussed and considered the various issues involved in the present redevelopment project before approving the various steps involved in the process, including finalization of the terms of the Draft Development Agreement. It is thus inconceivable that the Plaintiff's Members would have approved the terms of the development agreement if the same were lop sided.
As regards the reference made to the Meeting dated 4 th February, 2016 by Defendant Nos. 1 to 3, according to the Plaintiff, the same was an informal meeting between some of the Members of the Plaintiff and the representatives of Defendant No. 7 to discuss certain issues in respect of the amenities committed to be provided by Defendant No.7. The amenities provided by Defendant No. 7 are in accordance with its Offer Letter dated 22nd March, 2014 (Annexure X-3 at pages 179-179 of the compilation filed and tendered along with the Affidavit in Rejoinder dated 12 th July, 2016). This List of Amenities has been duly approved by an overwhelming ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -85- NMSL 1341/2016 majority of the Plaintiff's Members in the Special General Body Meeting dated 24th January, 2016 at the time of approving the Draft Development Agreement. It is also stated on behalf of Defendant No.7 that the amenities provided to the Plaintiff's Members shall be identical with those provided to purchasers of the premises in the free sale area.
26.19 According to Defendant Nos. 1 to 3, Advocate Mr. Rajendra Mishra has no authority to file the present Suit since there is no Resolution passed authorizing him to file the present Suit, nor has the Plaintiff Society passed any resolution to file any case against Defendant No.7, and hence the Suit against Defendant No.7 cannot be entertained. The Plaintiff has correctly submitted that the objection taken by Defendant Nos. 1 to 3 regarding the want of authority to institute the present Suit is completely misconceived and unsustainable, since a significant majority of the Members of the Plaintiff vide their Special General Body Meeting Resolution dated 6th March 2016 have decided to initiate the present action against the non-cooperating members, including Defendant Nos.1 to 3, and have authorised the Managing Committee to take necessary steps for the said purpose. The Managing Committee of the Plaintiff has engaged the services of Advocate Mr. Rajendra Mishra to represent the Plaintiff in the present proceedings. Thus, the present Suit has been instituted in accordance with the mandate of the majority of the Plaintiff's Members. ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -86- NMSL 1341/2016 26.20 Defendant Nos. 1 to 3 have stated that they have not received the share certificates in respect of their respective flats and that an attempt was made by some persons to issue fabricated share certificates, and in this regard there is some police complaint which is pending. It is also alleged that therefore there is an ambiguity in respect of the status of Defendant Nos. 1 to 3 as Members of the Plaintiff.
The Plaintiff has explained that there was no fraud or fabrication in printing the share certificates as alleged or otherwise. In fact, the Plaintiff had printed new share certificates to be issued to its Members [in pursuance of the bifurcation of the Delite CHS Ltd.] in October 2015. However, the same were not issued on account of certain typographical mistakes which had crept in during their preparation and printing process. The Members of the Plaintiff therefore decided sometime in November 2015 and again in January 2016 that the share certificates would be issued only after the Plaintiff's name is brought on the sub-divided Property Register Card of the said property so as to incorporate the new CTS Number. Since the sub- divided Property Register Card was received only on 11 th April 2016, the share certificates could not be issued earlier. The Plaintiff is in the process of printing the share certificates and the same will be issued to all its Members. The Plaintiff has submitted that the status of the Defendants Nos.1 to 4 as Members of the Plaintiff has not been and is not a subject- ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:36 ::: KPPNair -87- NMSL 1341/2016 matter of dispute and issues pertaining to the membership of the Society between the Society and its Members is within the exclusive jurisdiction of the Co-operative Court under Section 91 read with Section 163 of the Maharashtra Co-operative Societies Act, 1960, and the same cannot be agitated before or decided by this Court. In my view, since the Plaintiff has never raised the slightest doubt qua the membership of Defendant Nos. 1 to 4, the issue qua the alleged ambiguity in respect of the status of Defendant Nos. 1 to 3 as Members of the Plaintiff is raised by the Defendant Nos. 1 to 3 only because they are conscious of the fact that till date they have not challenged any of the steps/action taken by the Plaintiff Society including the resolutions pertaining to redevelopment passed at its Special General Body Meetings, before any Court of law.
26.21 It is contended by the Defendant Nos. 1 to 3 that the appointment of the Project Management Consultant (PMC) M/s. Vistaar Architects is fraudulent as there is no Special General Body Meeting Resolution passed by the Plaintiff to appoint M/s. Vistaar Architects as PMC.
The Plaintiff Society has explained that the erstwhile Delite CHS Ltd. had appointed M/s. Vistar Architects as the Architects for the said Society vide its letter dated 15 April 2010 and continued with its services to carry out the ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:37 ::: KPPNair -88- NMSL 1341/2016 sub-division of their property vide the Resolution dated 28 th July 2013 passed by the erstwhile Delite CHS Ltd., a copy whereof is annexed and marked as Annexure "Aa" to the Compilation Part II tendered along with the Affidavit in Rejoinder dated 12th July 2016. Thus the Plaintiff submitted this appointment letter dated 15 th April 2010 to the MCGM on 11th April 2014, since the Application dated 11 th April 2014 was submitted by the erstwhile Delite CHS Ltd. in respect of the proposed sub-division of its property. Thereafter M/s. Vistar Architects were appointed as the Project Management Consultants for the present redevelopment vide the Plaintiff's Special General Body Meeting Resolution dated 27 th February 2014, a copy whereof is annexed as Exhibit C at pgs. 49 to 56 of the Plaint. The Managing Committee of the Plaintiff also gave a formal appointment letter dated 5th March 2014 to M/s. Vistar Architects appointing them as the Architects for the redevelopment project, a copy whereof is annexed and marked as Annexure "Ab" to the Compilation Part II tendered along with the Affidavit in Rejoinder dated 12 th July 2016. The Plaintiff has also submitted the said appointment letter dated 5th March 2014 to the MCGM along with its redevelopment proposal seeking IOD for the proposed building in the year 2015. The allegation therefore that the appointment of M/s. Vistar Architects is fraudulent, is untenable and baseless and is rejected.
::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:37 ::: KPPNair -89- NMSL 1341/2016 26.22 Defendant Nos. 1 to 3 have submitted that no Structural Stability Certificate is submitted to MCGM under Section 353-B of the Act and no Notice has been given under Section 354 or 475 of the MCCM Act, 1888. In response, the Plaintiff has correctly submitted that the redevelopment is approved by an overwhelming majority of the Plaintiff's members and the reliance on section 353B of the MMC Act, 1888 is completely misplaced. Such Structural Stability Certificate is only necessary if the Society wants to retain the building, which is clearly not the case here. Again, no Notice under Section 354 of the MCGM Act is required for redevelopment. The allegations made by Defendant Nos. 1 to 3 are therefore once again baseless and untenable and are rejected.
26.23 Defendant Nos. 1 to 3 have submitted that the Plaintiff Society has not taken steps to obtain NOCs from the Banks in whose favour certain flat purchasers have created a mortgage.
The Plaintiff Society has correctly submitted that if a flat purchaser has mortgaged his flat to the Bank, the Plaintiff Society is not required to seek any No Objection Certificates (NOC's ) from the mortgagee-bank/s. The same is a matter entirely between the individual flat member and the concerned bank .
::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:37 ::: KPPNair -90- NMSL 1341/2016 26.24 Defendant Nos. 1 to 3 have submitted that apart from Defendant Nos. 1 to 6, 9 other Members are still residing in the Society premises. Further 85 per cent of the Members who have allegedly vacated their flats are still using their flats despite the Plaintiff alleging that these flats are vacant.
As correctly submitted by the Plaintiff, sixty-two out of the total sixty-six Members of the Plaintiff (i.e., everyone except Defendants Nos. 1 to 4 herein) have either vacated or given their consent to vacate their respective flats. These Members are bound and liable to vacate their flats as and when called upon to do so at the time of demolition of the suit building. The allegations regarding the continuing use of the flats by a minority of the Plaintiff's Members is totally irrelevant and do not lend any support to the case of Defendants Nos. 1 to 3.
26.25 According to Defendant Nos. 1 to 3, their suggestions were not taken into consideration by the Plaintiff and therefore Notices dated 4 th September, 2016 and 16th March, 2016 under Section 164 of the MCS Act have not been replied to.
It is submitted on behalf of the Plaintiff Society that the suggestions of Defendant Nos. 1 to 3 have always been considered and discussed by the Plaintiff. However, the final decisions were taken in accordance with the ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:37 ::: KPPNair -91- NMSL 1341/2016 wishes of the overwhelming majority of the Plaintiff's Members in the various General Body Meetings of the Plaintiff. It is correctly submitted on behalf of the Plaintiff that the Plaintiff Society is not bound to respond to the allegations contained in the Notice under Section 164 of the Act. In any event the Plaintiff Society has in the present proceedings responded to the allegations in these Notices. The above submissions of Defendant Nos. 1 to 3 therefore cannot be accepted.
26.26 Defendant Nos. 1 to 3 have alleged that the Minutes of the Special General Body Meeting of the Plaintiff dated 27th February , 2014 and 16th March, 2014 have been manipulated.
It is submitted on behalf of the Plaintiff that the said allegation is a result of the discrepancy between the draft Minutes (sent to the Plaintiff's Members for their approval) and the finalized versions of the said Minutes dated 27th February 2014 and 16th March 2014, in which the names of the proposers and the seconders at these Meetings are different. However the allegations of manipulation are false and completely baseless. The discrepancy occurred as a result of the incorrect recording of the said names in the draft minutes. The said mistakes were noted by some of the Plaintiff's Members and they reported the same to the Managing Committee of the Plaintiff, which rectified the said mistakes while ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:37 ::: KPPNair -92- NMSL 1341/2016 preparing the final Minutes. The Draft Version of the Minutes dated 27 th February 2014 and 16th March 2014 tendered by Defendants Nos. 1 to 3, being Annexures "Au" and "Av" are at pages 272 - 274 and 275 - 277 respectively of Compilation Part II tendered along with the Affidavit in Rejoinder dated 12th July 2016. The Final Version of the said Minutes dated 16th March 2014 and Minutes dated 27 th February 2014 being Annexures "Ao" and "Aq" are at pages 254 - 258 and 261 - 268 respectively of Compilation Part II tendered along with the Affidavit in Rejoinder dated 12th July 2016. The allegations made by Defendant Nos. 1 to 3 qua manipulation of the Minutes is therefore rejected.
26.27 It is submitted by Defendants Nos. 1 to 3 that it is not mandatory to comply with Clause 53 of the IOD which pertains to demolition of the existing building. Defendant Nos. 1 to 3 have also relied upon a document dated 8th March 2016 submitted by the Plaintiff's Architect to MCGM which states that the compliance to Clause 53 of the IOD is 'NA', (i.e. Not Applicable). On the basis of this document and contention, it is submitted by Defendant Nos. 1 to 3 that big fraud is being committed on this Court.
The Plaintiff has explained that as per the technical requirement for redevelopment of a building it is mandatory for the building to be vacated ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:37 ::: KPPNair -93- NMSL 1341/2016 and demolished. The demolition of the structure can take place in its entirety or in a phase-wise manner. In the present case, since there is only one building having four wings (A, B, C, D), the same will be demolished in its entirety in one stroke. In view thereof, the said Architect in his letter dated 8/03/2016 annexed in the Defendant's Compilation at page No. 357 pertaining to compliance status of IOD has mentioned "NA" (i.e. Not Applicable) to Clause 53 of the IOD, as there will be no phase-wise program of demolition, but demolition of the structure is a necessity. In any event, in my view it cannot be argued by the Defendant Nos. 1 to 3 or by any one that the redevelopment process i.e. construction of a new building in place of the old can be done/carried out without demolishing the existing buildings.
26.28 Defendant Nos. 1 to 3 have alleged that the redevelopment project is not supported by an overwhelming majority of the Plaintiff's Members. According to the Defendant Nos. 1 to 3 the Plaintiff in the letter dated 16th April, 2016, addressed to MCGM has stated that Consent Letters from 62 Members are enclosed but as per their inspection of the relevant file, they observed only one incomplete and unstamped consent letter. The said allegation is belied by the minutes of the meetings and the facts mentioned/set out hereinabove. In any event, as pointed out by the ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:37 ::: KPPNair -94- NMSL 1341/2016 Plaintiff, the interpretation sought to be given by the Defendants Nos. 1 to 3 to the said letter dated 16th April 2016 is erroneous. The letter is annexed and marked as Annexure "L-4" at page 129 of the Compilation to the Plaintiff's Written Arguments dated 12th July 2016 stating that 60 Members have given their consent and nowhere does it state that the same has been submitted to MCGM. The original consent letters are with the Plaintiff Society and the Plaintiff Society has craved leave to produce the same if required. In fact the said 62 Members have as recently as on 11 th July 2016 signed a Declaration cum Undertaking giving consent to the redevelopment process and for the appointment of Defendant No.7 as the Developer. The said Declaration-cum-Undertaking dated 11th July 2016 is annexed and marked as Annexure "Az" at page No. 300-304 to Compilation II tendered with the Plaintiff's Rejoinder dated 12.07.2016.
26.29 Defendant Nos. 1 to 3 have alleged that the Special General Body Meeting dated 24th January, 2016 was a sham. The Secretary of the Plaintiff was absent without explanation, the comments of the Advocate of the Plaintiff Society were not given to the Members and the draft was approved without finalizing the amenities. The Draft Development Agreement does not include their suggestions and they had protested against these facts.
::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:37 ::: KPPNair -95- NMSL 1341/2016 The said allegations are refuted by the Plaintiff stating that the Draft Development Agreement was approved by a vote of majority in the Special General Body Meeting dated 24th January 2016. The show of hands can be clearly seen in the video. Defendants Nos. 1 to 4 have in the Attendance Sheet only written ''I Protest". The Plaintiff has denied and disputed that any protest was raised/registered pertaining to the appointment of the Developer, process of redevelopment undertaken or any comments or statements made by the professionals appointed by the Plaintiff Society. Therefore, the above allegations made by Defendant Nos. 1 to 3 appear to be baseless and are not accepted.
26.30 Defendant Nos. 1 to 3 contended that the decision to apply for IOD was merely to speed up the process and as such there was no requirement in law to do so. They contended that in the Special General Body Meeting dated 19th July 2015, in which the Members of the Plaintiff resolved to allow the Plaintiff to apply for IOD in its own name, the Advocate for the Plaintiff misled the Members by saying that the sub-division of the plot was not possible without demolition of the building and hence getting IOD is a must for the Society. They state that this statement made by the said Advocate is false, given that the sub-divided property card was received on 11th April 2016 i.e. prior to the demolition of the building. For all the aforesaid reasons, Defendants Nos. 1 to 3 contend that the said Resolution ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:37 ::: KPPNair -96- NMSL 1341/2016 dated 19th July 2015 was based on fraudulent and malafide explanations and is therefore not valid.
The Plaintiff refuted the contentions and stated that in the said Meeting held on 19th July 2015, the Plaintiff's Advocate informed the Members that mere loading of the TDR would not be sufficient for obtaining sub-division of the Plaintiff's plot. He also informed them that the area of the existing buildings of the Plaintiff and the plot area can also be balanced after demolishing the existing building. The Plaintiff's Advocate did not state that 'demolition of the existing building is essential for obtaining sub- division of the plot', as suggested by Defendants Nos. 1 to 3. The Plaintiff's Advocate also informed the Members that the Plaintiff's Architect (Mr. Kiran Rokadiya) and the Defendant No. 7 have submitted the proposal for sanctioning of building plans for the new proposed building to restart the redevelopment process that had been stalled by the rejection of the proposal for sub-division of the Plaintiff's plot. (Minutes of the Meeting dated 19/07/2015 annexed and marked as Annexure 'An' to the Compilation II to the Written Arguments of Plaintiff dated 11th July, 2016 at page nos. 244 - 254 at page 249, line 6). The Plaintiff's Architect advised the Plaintiff that the issue of FSI imbalance can be best addressed by getting the layout and IOD (Building Plans) sanctioned and the Plaintiff acted on this advice in good faith. There was absolutely no dishonest motive behind the Plaintiff's ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:37 ::: KPPNair -97- NMSL 1341/2016 action, as alleged, or at all. The layout was approved by 23 rd December 2015 and within 9 days, i.e. by 2nd January, 2016, the sub-division order was received from the Office of the Collector (MSD) and the IOD was received on 4th January 2016. This is perfectly in line with the advice of the PMC.It is pertinent to note that neither the Plaintiff nor the Defendant No. 7 had derived any additional benefit by applying for the IOD prior to entering into the Development Agreement. The application for IOD in the Plaintiff's name prior to execution of the Development Agreement has not resulted in any sort of violation of legal norms nor any injury or prejudice to the Plaintiff Society and/or its members. Therefore, the above allegations made by the non-co-operative members are without any substance and are rejected.
26.31 The Defendant Nos. 1 to 3 have alleged that the Plaintiff has not considered their suggestions/observations, protests and objections pertaining to the redevelopment process raised in the Plaintiff's meetings and the letters addressed by them to the Plaintiff and the various statutory and police authorities in this regard.
As correctly submitted by the Plaintiff, the allegations cannot be countenanced because none of the Resolutions of the Plaintiff Society have been challenged by the Defendants Nos. 1 to 3 in any competent court. ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:37 ::: KPPNair -98- NMSL 1341/2016
27. As set out earlier, the Plaintiff Society filed a further Affidavit dated 22nd October, 2016, placing on record that the major portion of the ceiling of flat B/103 collapsed leading to further serious structural and irreparable damage to the building which was already in a deteriorated condition. Defendants Nos. 1 to 3 filed their Affidavit dated 10 th November 2016 in response thereto stating that the building has not yet been declared to be in a dilapidated condition i.e. C-1 category'. In response, the Plaintiff's by their additional Affidavit dated 17th November 2016 pointed out that the list of dilapidated/C-1 category buildings published by the MCGM is by no means an exhaustive one. There are several dilapidated and dangerous structures in and around Greater Mumbai, including the present suit building, which do not feature in the said list. The Plaintiff- Society being privately owned, need not approach the MCGM to audit the structure and seek assistance of the MCGM. The Plaintiff has decided to redevelop the Society by appointing a Developer. Therefore, the allegation that the building of the Plaintiff Society is not in a dilapidated condition and/or that the same requires no redevelopment is not only false and misconceived but also a dilatory tactic adopted by the Defendant Nos.1 to
3. I am in agreement with the above submission of the Plaintiff.
28. On 19th December, 2016, Defendants No. 1 to 3 moved this Court by way of a praecipe stating that on 16 th December, 2016 the ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:37 ::: KPPNair -99- NMSL 1341/2016 Plaintiff Society, stuck on building walls, the notice u/s. 354 of Municipal Corporation Act, which is signed and dated 10 th December, 2016 declaring that the suit building is in a dilapidated condition and that M/s. Capstone Consultants Pvt. Ltd., acting upon the instructions of one Mr. Tulsi K Patel, Plaintiff and Defendant No. 7, have drilled multiple big holes about 6-8 inches deep in almost every wall and pillar of the society building as well as through and through holes in the walls of certain flats. In response, the Plaintiff has filed an additional Affidavit dated 20 th December, 2016, inter alia, setting out that Defendant Nos. 1 to 3 have questioned the independence and/or competence of M/s. Epicons Consultants Pvt. Ltd. and recommended structural audit/report to be obtained from M/s. Veermata Jijabai Technological Institute (VJTI). Accordingly, on 28 th November 2016, the Managing Committee of the Plaintiff-Society addressed a letter to M/s. VJTI requesting the latter to conduct the Structural Audit of the suit building alongwith the related tests. This step was taken by the Plaintiff partly with a view to allay the apprehension of Defendants Nos. 1 to 3 regarding the Structural Audit of the suit building. In the meanwhile, on 3rd December 2016, the MCGM conducted a site visit and inspection of the suit building to ascertain the dilapidated status of the same. After the said site inspection was carried out by MCGM on 3 rd December 2016, the Plaintiff-Society received a Notice dated 10th ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:37 ::: KPPNair -100- NMSL 1341/2016 December 2016 issued by the MCGM under Section 354 of the Mumbai Municipal Corporation Act, 1888, inter alia, calling upon the Plaintiff to pull down and demolish the suit building within 30 days of the date of notice or receipt of notice, under the supervision of a registered structural engineer. In the said notice it was further stated that if the Plaintiff does not comply with the aforesaid directions of the MCGM, the Members of the Plaintiff would be liable for prosecution under Section 475-A of the MMC Act, 1888 and the MCGM would take necessary steps to enforce its directions as per law. In fact, the Managing Committee of the Plaintiff has also addressed a Notice dated 17th December 2016 to all the Members of the Plaintiff, calling for a Special General Body Meeting on 25 th December 2016 for the purpose of discussing the course of action and steps to be taken for compliance of this Notice dated 10th December 2016. On 17th December 2016, VJTI conducted a site inspection and undertook various tests through its authorized agent M/s. Capstone Consultants Pvt. Ltd., such as Non-Destructive Testing (NDT), Rebound hammer, Carbonation test etc. on the suit building as a part of the structural audit process. As a part of the routine NDT testing involved in the structural audit, the said agency conducted the exercise of controlled and systematic drilling of minor holes in certain parts of the suit building in order to ascertain the structural condition of the building. The same method was also employed ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:37 ::: KPPNair -101- NMSL 1341/2016 by M/s. Epicons Consultants as a part of their audit process in May 2015. At that time, Defendants Nos. 1 to 3 did not raise any objection, even though holes were drilled in a similar manner as has been done now by the VJTI-appointed agency, viz. having a diameter of approximately 5-8 inches each. This is the standard method involved in all the usual structural audits. The question therefore of taking cognizance of the grievance raised by Defendant Nos. 1 to 3 by way of a praecipe dated 19 th December, 2016, does not arise.
29. In the circumstances it is clear that 62 out of 66 members have supported the redevelopment of the suit building. In fact, 53 members fearing a threat to their lives and property have already vacated their flats and have started residing elsewhere for which the Defendant No. 7 Developer has been paying huge sums of money every month towards compensation for alternate accommodation. In addition as set out in paragraph 26.13 above, the Defendant No. 7 has incurred an approximate sum of Rs. 8 crores for carrying out the work set out in the said paragraph. The buildings are in a dilapidated condition and because of the 4 non-co- operative members, the entire redevelopment project has come to a halt. The majority of the members have no quarrel in having the redevelopment project executed through Defendant No. 7 as per the terms contained in the Letter of Intent and the draft Development Agreement. The majority of the ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:37 ::: KPPNair -102- NMSL 1341/2016 members also have no grievance qua the conduct of the meetings and the resolutions passed thereat. The non-co-operative 4 members being an admitted minority cannot stall or obstruct the redevelopment project as held by this Court in several of its decisions. The resolutions passed by the majority of the members at the General meetings of the Society are binding on the non-co-operative members. As set out in paragraph 20 above, the concern expressed by Defendant Nos. 1 to 4 that Defendant No. 7 will not be able to complete the project as agreed due to lack of funds, completely lacks bona fides. The Plaintiff Society and the Partners of Defendant No. 7 have till date conducted themselves in a fair and honest manner. The undertakings given by the Plaintiff Society and Defendant No.7 developer completely protects the interest of all the members of the Society including the non-co-operative members who have left no stone unturned in obstructing the redevelopment process by their unfair and obstinate conduct. The Plaintiff is therefore entitled to the reliefs prayed for in the Notice of Motion. The balance of convenience is completely in favour of the Plaintiff Society and the large number of members who along with their family members are out of their flats since more than a year and waiting to get new ownership flats of larger area upon redevelopment. In the circumstances, I pass the following order:
(i) The Court Receiver, High Court, Bombay, is appointed Receiver in ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:37 ::: KPPNair -103- NMSL 1341/2016 respect of Flat Nos. A/002, A/102, A/101 and A/302 respectively presently occupied by Defendant Nos. 1 to 4;
(ii) The non-co-operative members who have retained possession of their flats shall on or before 31st August, 2017, hand over possession of the respective flats to the Court Receiver and the Court Receiver shall in turn hand over possession of the same to the Defendant No. 7 Developer for the purpose of commencing the redevelopment project;
(iii) In the event of Defendant Nos. 1 to 4 not handing over possession of their respective flats to the Court Receiver, as directed in clause (ii) above, the Court Receiver shall take forcible possession of their flats, if necessary with police help and hand over the same to Defendant No. 7 developer for the purpose of commencing the redevelopment project.
(iv) Within 25 days from the date of this order, the Plaintiff Society and the Defendant No. 7 Developer shall execute the Development Agreement in terms of the draft Development Agreement approved by the members of the Society in the General Body Meeting held on 24th January 2016;
(v) All the payments agreed to be paid by Defendant No. 7 to the Society and/or its members including the non-co-operative members ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:37 ::: KPPNair -104- NMSL 1341/2016 shall be paid by Defendant No. 7 developer on or before 31st August, 2017;
(vi) The following statements made/undertakings given by the Defendant No. 7 are accepted:
(a) That the Defendant No.7 shall construct the new building and hand over flats to the members of the Society as provided in the draft Development Agreement;
(b) That Defendant No.7 shall provide the Bank Guarantee for the sum of Rs. 7,50,00,000/- (Rupees Seven Crores Fifty Lakhs only) as undertaken in the Consent Terms dated 6th/8th June, 2016.
(c) A provisional tripartite agreement for permanent alternate accommodation shall be executed between the individual members of the Society, the Society and the developer before the members vacate their respective premises.
(d) That a final tripartite agreement in identical terms of the provisional agreement shall be executed on receipt of the full commencement certificate.
(e) That Defendant No.7 developer shall load the required TDR ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:37 ::: KPPNair -105- NMSL 1341/2016 within 10 days from the receipt of Commencement Certificate upto plinth level from the Municipal Corporation of Greater Mumbai.
(f) That the Defendant No.7 shall provide amenities to the members of the Society which will be identical to the amenities provided to the flat purchasers under the free sale category.
(vii) It is clarified that all the requirements prescribed under the Real Estate (Regulation and Development) Act, 2016 and the Goods and Service Tax regime, shall be incorporated in the agreements executed between the parties or to be executed and shall be binding on them.
30. The Notice of Motion is accordingly disposed of with costs.
(S.J. KATHAWALLA, J.) ::: Uploaded on - 02/08/2017 ::: Downloaded on - 08/08/2017 01:54:37 :::