Bombay High Court
Charkop Kandivali Ekta Nagar vs Vijay Kamal Properties Pvt Ltd And 5 Ors on 6 March, 2024
Author: G.S. Patel
Bench: G.S. Patel
902-OSWP-2626-2023++.DOC
Sumedh
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 2626 OF 2023
WITH
INTERIM APPLICATION (L) NO. 25024 OF 2023
IN
WRIT PETITION NO. 2626 OF 2023
Charkop Kandivali Ekta Nagar ...Petitioner
Versus
Vijay Kamal Properties Pvt Ltd & Ors ...Respondents
WITH
WRIT PETITION NO. 912 OF 2017
WITH
NOTICE OF MOTION NO. 185 OF 2017
IN
WRIT PETITION NO. 912 OF 2017
WITH
CHAMBER SUMMONS NO. 13 OF 2017
IN
WRIT PETITION NO. 912 OF 2017
WITH
NOTICE OF MOTION (L) NO. 291 OF 2017
IN
WRIT PETITION NO. 912 OF 2017
SUMEDH
NAMDEO
SONAWANE
Digitally signed by
SUMEDH NAMDEO Page 1 of 16
SONAWANE
Date: 2024.03.08 6th March 2024
15:38:02 +0530
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902-OSWP-2626-2023++.DOC
WITH
INTERIM APPLICATION (L) NO. 6114 OF 2020
IN
WRIT PETITION NO. 912 OF 2017
WITH
INTERIM APPLICATION (L) NO. 2975 OF 2021
IN
WRIT PETITION NO. 912 OF 2017
Sali Mathew & Ors ...Petitioner
Versus
State of Maharashtra & Ors ...Respondents
WITH
WRIT PETITION NO. 925 OF 2017
WITH
NOTICE OF MOTION (L) NO. 289 OF 2017
IN
WRIT PETITION NO. 925 OF 2017
WITH
NOTICE OF MOTION NO. 186 OF 2017
IN
WRIT PETITION NO. 925 OF 2017
WITH
CHAMBER SUMMONS NO. 42 OF 2017
IN
WRIT PETITION NO. 925 OF 2017
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902-OSWP-2626-2023++.DOC
WITH
CONTEMPT PETITION (L) NO. 21609 OF 2022
IN
WRIT PETITION NO. 925 OF 2017
WITH
INTERIM APPLICATION (L) NO. 13908 OF 2021
IN
WRIT PETITION NO. 925 OF 2017
WITH
SHOW CAUSE NOTICE NO. 10 OF 2022
IN
NOTICE OF MOTION (L) NO. 289 OF 2017
Dattaram Sonu Jadhav & Ors ...Petitioners
Versus
State of Maharashtra & Ors ...Respondents
WITH
WRIT PETITION NO. 2878 OF 2014
WITH
CHAMBER SUMMONS NO. 10 OF 2017
IN
WRIT PETITION NO. 2878 OF 2014
Muniraj R Kurmi & Ors ...Petitioners
Versus
State of Maharashtra through its Secretary & Ors ...Respondents
WITH
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902-OSWP-2626-2023++.DOC
WRIT PETITION NO. 2877 OF 2014
Biju Bharat ...Petitioner
Versus
State of Maharashtra through its Secretary to the
Ministry of Housing Department & Ors ...Respondents
Mr Zal Andhyarujina, Senior Advocate, with Mayur
Khandeparkar, Vikramjit Grewal, Sanjay Kadam, Sanjeel
Kadam, Karan Bhide & Soham Salvi, i/b Kadam & Co, for the
Petitioner.
Mr Gauraj Singh, with Amogh Singh, Reshma Chitnis Potdar, Mahesh
Chitnis, i/b Chitnis Vaithy & Co, for Petitioners in
WP/925/2017, WP/912/2017 & WP/2878/2014.
Mr Aseem Naphade, with Saloni Dhawale, i/b Manoj Harit & Co, for
the Petitioner in WP/925/2017, WP/917/2017, WP/2878/2019.
Mr Biju Bharat, Petitioner-in-person in WP/2877/2014 is present.
Mr Rajiv Narula, with Mehek Chowdhary, i/b Jhangiani, Narula &
Associates, for Respondent No 1 in WP/2626/2023 and for the
Applicant in IA/25024/2023.
Mr RD Soni, with Sandeep Waghmare, for Respondent No 5 in
WP/28777/2014 & WP/2878/2014 and for Respondent No 6 in
WP/912/2017 & WP/925/2017.
Mr PG Lad, with Sayli Apte & Shreya Shah, for the Respondent
MHADA in all Writ Petitions.
Mr Anoop Patil, for the Respondent-SRA in WP/2626/2023.
Mr Jagdish G Aradwad (Reddy), for Respondent-SRA in all matters
except WP/2626/2023
Mr Himanshu Takke, AGP, for the Respondent-State in
WP/2626/2023, IAL/13908/2021.
Mr Manish Upadhaya, AGP, for the Respondent-State in
WP/925/2017 & NMW/289/2017.
Ms Vrushali Kabre, AGP, for the Respondent-State in
CHSW/10/2017 in WP/2878/2014.
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902-OSWP-2626-2023++.DOC
CORAM G.S. Patel &
Kamal Khata, JJ.
DATED: 6th March 2024 PC:-
1. There are several proceedings before us. We do not propose to summarize the reliefs in each of them. Writ Petition No 2626 of 2023 is by the Charkop Kandivali Ekta Nagar.
2. The principal contestant to this Petition is Vijay Kamal Properties Pvt Ltd represented by Mr Narula. The 3rd Respondent is Maharashtra Housing and Area Development Authority ("MHADA"). The 4th Respondent is the Slum Rehabilitation Authority ("SRA"). The 6th Respondent is the Municipal Corporation of Greater Mumbai ("MCGM"). The 5th Respondent, quite unnecessarily joined, is the poor Sub-Inspector of the Kandivali Police Station. He is the one person with whom we have no concern whatsoever.
3. The property in question is a large tract of 90,294.2 sq mts at Borivali. The society, represented by Mr Andhyarujina has 393 members.
4. In the present order, we propose to summarize some of the steps that are are to be taken since we believe that it may yet be possible to put an end to all controversies and to ensure a systematic and orderly progression towards a successful completion of this much delayed project. For this reason, there is little achieved in reciting allegations made by one side against the other, typical in Page 5 of 16 6th March 2024 ::: Uploaded on - 08/03/2024 ::: Downloaded on - 27/03/2024 02:02:34 ::: 902-OSWP-2626-2023++.DOC such cases, that of delays by the developer (in this case since 2006;
Mr Narula says incorrectly, because possession was not given until 2018), non-payment of transit rent and so on. Those considerations will be of consequence if the matters are to be decided on merits. But otherwise, they have an annoying habit of interfering with a rational solution.
5. The two authorities are simultaneously involved because the plot is owned by MHADA and the development is a combined development under Development Control Regulation ("DCR") 33(5) and DCR 33(14)(D). The sanctioned plan is under DCR 33(14)(D). Peculiarly, MHADA is a developer and Vijay Kamal Properties is a co-developer, plans have been submitted to and sanctioned by SRA.
6. As we see it, there are three distinct areas of disagreement today.
(a) The first is about the area of the rebuilt premises being offered to the society members. Specifically, a Memorandum of Understanding ("MoU") of 18th January 2019 said that residential accommodation in the redeveloped building would be 410 sq ft carpet area and commercial premises would be 225 sq ft carpet area. By carpet area, we understand carpet area without exclusions. There is some controversy about whether the amended plans sanctioned by the SRA in fact cover this carpet area or not. A recent Affidavit by the Page 6 of 16 6th March 2024 ::: Uploaded on - 08/03/2024 ::: Downloaded on - 27/03/2024 02:02:34 ::: 902-OSWP-2626-2023++.DOC developer has led to a great deal of discussion because Mr Andhyarujina would have it that the plans annexed to the Affidavit do not show that what is being provided is 410 sq ft carpet area to residential tenants. There cannot be ambiguity about matters like this.
(b) There is an additional complication in this matter (and there are apparently no shortage of complications and allegations, including of illicit conduct by some society committee members and/or ex-committee members and more recently of individuals causing themselves grievous bodily harm and then filing police complaints against the other side). All this counts for idle entertainment but does not achieve the purpose. The complication, and this is the next aspect, is that some 64 persons have been put into possession -- how, by what priority listing, under what documentation and on what terms, we do not know. The developer's Affidavit has a list of these at Exhibit 'E'. It starts from page 952. Some of them have been in possession since 2021. Photographs annexed at Exhibit 'F' show that these premises are being fully utilized. This is very surprising because admittedly the building is not complete and an Occupation Certificate ("OC") has not been obtained, except for something called a part bare shell OC. This is a creature unknown to law. We had occasion to Page 7 of 16 6th March 2024 ::: Uploaded on - 08/03/2024 ::: Downloaded on - 27/03/2024 02:02:34 ::: 902-OSWP-2626-2023++.DOC consider it and stayed its issuance by an order of 11th August 2023.
(c) The third complication is that via some proceedings under Section 9 of the Arbitration and Conciliation Act, 1996 ("Arbitration Act"), the society and the developer are already in arbitration over a question of claims for unpaid arrears of transit rent and the validity of the termination. In arbitration, a Section 17 Interim Application is being argued (we are told it has been closed for orders), but amazingly this has been done without any Statement of Claim ever being filed which seems to us rather like having an interim application argued in this court without an underlying petition or a plaint. In any case, we are not concerned with those arbitration proceedings.
7. On the first aspect, the society must unequivocally indicate on written signed instructions to its Advocates whether it accepts the area of 410 sq ft carpet area residential and 225 sq ft for commercial as provided in the MoU of 18th January 2019. We say this because there are before us various Petitions and proceedings by individuals which seem prima facie to take a slightly more ambiguous, (we will not say slippery) stand, namely that the area to be provided must be "as per DCPR 33(5)", whatever that means. As Mr Narula points out, this 'entitlement' has changed at least three times in six years. We do not want this ambiguity. The society must clearly state whether it is accepting the stated areas in the MoU as being Page 8 of 16 6th March 2024 ::: Uploaded on - 08/03/2024 ::: Downloaded on - 27/03/2024 02:02:34 ::: 902-OSWP-2626-2023++.DOC applicable. Different consequences will follow depending on the answer to this question.
8. We make it clear that in keeping with settled law we will not permit a single individual member in any of the Petitions before us or even otherwise to take a stand different from that of the society. 1 The society will represent all members and the decisions of the society taken in the General Body Meeting (whether reflected in the MoU or in some other meeting) will bind every single member. This is not new law. It has been settled law in this Court for more than a decade and we see no reason to entertain individual applications by breakaway groups of occupants and tenants.
9. We are first requiring a confirmation from Mr Reddy for the SRA that the sanctioned plans as amended in January 2023 do provide for an area of 410 sq ft carpet area for residential and 225 sq ft carpet area for commercial premises. The developer will confirm through Mr Narula that this is in fact what is being constructed with no deductions.
10. We also note the statements made in regard to the admitted arrears of transit rent in paragraph 4 of the present Affidavit. Mr Narula claims that possession was obstructed and delayed until June 2017-2018. It is therefore his case that the claim for delay and arrears is wildly exaggerated. We reject the proposal for a future deferred payment and it is not for the developer to give himself financial holidays of this kind. There has been too much delay 1 Aditya Developers v Nirmal Anand Co-operative Housing Society Ltd & Ors, 2016 SCC OnLine Bom 100.
Page 9 of 166th March 2024 ::: Uploaded on - 08/03/2024 ::: Downloaded on - 27/03/2024 02:02:34 ::: 902-OSWP-2626-2023++.DOC already. The amount of Rs 9,70,54,014/-is admittedly due. We require that to be deposited in Court. Mr Narula will take instructions of when that can be done. He will also take instructions on what arrangements are to be made for future transit rent until a proper OC is obtained.
11. We have indicated to both Mr Lad and to Mr Reddy that if there is an event of default (which we will specify), an immediate order in the society's Writ Petition will follow, terminating the developer and making any rupee amounts due from him immediately executable.
12. Any amount that is deposited in Court may be adjusted or subjected to such contentions as may be available in arbitration. Contentions in arbitration for a larger amount or for an adjustment or for a reduced amount are expressly kept open for those proceedings.
13. Mr Reddy will need to nominate a nodal officer on behalf of the SRA to periodically monitor the progress and timely completion and this includes meeting financial and construction milestones which will need to be specified at least with some degree of accuracy though not 100% accuracy by Mr Narula. We will allow for some slack in this scheduling because there are always imponderable factors that come into play. At least rough estimates of the time for completion must be provided.
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14. The developer will also have to specifically instruct Mr Narula as to what is to be done in regard to any claim for property tax or maintenance or outgoings in regard to the 64 persons who are already in possession. So far, the developer has not recovered anything from these persons. But that is surely inequitable. That means that these 64 persons -- and nobody knows how they were selected -- have literally enjoyed actual possession without any obligation towards paying pro rata property tax or proportionate share of outgoing and maintenance. Conceivably, this is unfair to other members of the society. We also do not know whether the developer is in a position to recover these amounts and whether these persons have been put to notice that such amounts are in fact recoverable from them. But we do not propose to allow the developer to recover these amounts from the society or to ask the society to make payment of these amounts. The choices before the developer are therefore limited. Whatever choice the developer makes it cannot involve the society. That is between the developer and the 64 persons alone. We will not pretend that these are happy or evenly placed choices but that is the problem of the developer's making. We can do nothing except ask Mr Narula to take sufficient instructions in that regard.
15. So far as the two public authorities are concerned, given the manner in which this matter has unfolded and the amount of time it has taken, we will require them each to prepare and keep ready letters of termination to be held in abeyance, but which will be given effect to within 24 hours of the occurrence of a defined event of default. We make it clear that we do not propose to limit ourselves only to the event of a financial default. Slightly different Page 11 of 16 6th March 2024 ::: Uploaded on - 08/03/2024 ::: Downloaded on - 27/03/2024 02:02:34 ::: 902-OSWP-2626-2023++.DOC considerations will apply to financial defaults than to defaults in meeting construction deadlines. This is of necessity, because construction deadlines are often delayed for factors or reasons beyond the control of a developer.
16. We will also require on the next occasion a list from Mr Narula of any pending permissions or sanctions that are required with a list of the authorities from whom these are required so that even these can be supervised.
17. A significant question remains about what is to be done in regard to the free sale component. Specifically, should the developer be entitled to build free sale units? Should the developer be entitled to transact free sale units? On this, the two views of Mr Andhyarujina and Mr Narula are widely divergent. Mr Narula points out, and we believe with some justification, a major if not principal source of cash flow and funding is the sale of free sale components. If this cash flow is cut off, the entire project is in jeopardy. Mr Andhyarujina counters this by arguing that the right to transact the free sale component is a contingent contractual right and it depends on the fulfilment of a condition precedent, i.e., the construction of the redeveloped premises and the clearing of all arrears of transit rent. It is unknown to law, Mr Andhyarujina submits, and we believe with equal force, that a party who does not fulfil the condition precedent nonetheless gets the conditional benefit. There is of course the additional factor that the moment there are transactions with third parties then these become additional players in the game and invariably come to Court seeking to enforce what they describe as rights over the project in question.
Page 12 of 166th March 2024 ::: Uploaded on - 08/03/2024 ::: Downloaded on - 27/03/2024 02:02:34 ::: 902-OSWP-2626-2023++.DOC We believe this branch of the law at least has been emphatically settled in a series of judgments of a learned Single Judge of this Court2 and which we have in a Division Bench 3 endorsed, but that does not answer the question of whether Mr Narula should be entitled to raise funds from external sources in order to fulfil his bargain. As Mr Narula puts it, if he is not entitled to sell the free sale units then this entire Petition becomes a sort of self-fulfilling prophecy because it is doomed to failure.
18. Mr Narula will need to clarify whether any third-party rights have been created in respect of any premises and if they have what those details are.
19. We will consider these rival submissions on the next occasion because we believe that a somewhat more subtle or nuanced solution may yet be within reach. It may be, for instance, that the amount of free sale will have to be linked to the amount of redeveloped premises constructed and ready for construction. We say this because in the present Affidavit, although the MoU is of 2019 and the building was brought down in 2006, of the 393 members only 356 are to be accommodated in four Wings A, B, C and D. Some 37 members are proposed to be moved into another building on top of which there will be a permanent transit camp provision. Who those unfortunate 37 members will be we do not know. How they will be chosen nobody can tell us, but what paragraph 2.3 tells us is that of 2 Vaidehi Akash Housing Pvt Ltd v New D N Nagar Co-op Housing Society Union Ltd & Ors, 2014 SCC OnLine Bom 5068; Goregaon Pearl CHSL v Dr Seema Mahadev Paryekar & Ors, 2019 SCC OnLine Bom 3274.A 3 Deepak Prabhakar Thakoor & Ors v Maharashtra Housing and Area Development Authority (MHADA) & Ors, 2023 SCC OnLine Bom 2234.
Page 13 of 166th March 2024 ::: Uploaded on - 08/03/2024 ::: Downloaded on - 27/03/2024 02:02:34 ::: 902-OSWP-2626-2023++.DOC all these 356 units in Wings A, B, C, and D, so far only 72 have been constructed and 262 units "are being completed". This phrase "are being completed" tells us precisely nothing. When will they be completed? What is the stage of construction? It is for this reason that we believe it might be possible to link the phase-wise completion of these units in a structured manner to the right to sell free sale units rather than leaving that right entirely open-ended.
20. The last issue here is this question of 37 members being accommodated in what is called a composite Permanent Transit Camp ("PTC") building. The way in which it is worded in the Affidavit predictably resulted in expressions of outrage from Mr Andhyarujina. He complained that some members were being pushed into PTC tenements. Mr Narula's instructions are that that is not so. These 37 members are indeed proposed to be put in a separate building but their areas will be as per the MoU. On top of that building will be certain PTC tenements.
21. But this from our perspective, creates another logistical hurdle. Somebody must choose these 37 persons. It is entirely possible that persons may say that a PTC building is less desirable than a regular tower. The reasons do not matter. We will have to find a more agnostic method of selecting which member (other than the
64) goes where and therefore we have tentatively proposed, subject to further submissions by both sides, that an open lottery system will be conducted and, to avoid controversy. this will not be done by the society, the developer or even MHADA or the SRA, but will be done under directions of this Court by the Court Receiver with the entire process being videographed. A report will be made to the Page 14 of 16 6th March 2024 ::: Uploaded on - 08/03/2024 ::: Downloaded on - 27/03/2024 02:02:34 ::: 902-OSWP-2626-2023++.DOC Court. That is the only method we know of ensuring complete transparency and of further ensuring that there is complete control over the governance of these affairs by the public bodies with whom we are concerned.
22. On the question of a lottery, it may be possible that there will be more than one lottery if construction is being done in phases. This means that everybody need not wait till the entire project is completed for an allotment to take place. OCs may be obtained for buildings as they are completed one by one but how those premises are to be allotted will be decided by either a lottery or by a series of lotteries.
23. Above all, we will now be looking to the two public authorities to monitor and supervise the completion of the project according to the directions that we will issue so as to bring it to the most satisfactory conclusion in the shortest possible time.
24. Obviously, Mr Andhyarujina, Mr Narula and Mr Reddy will need some time to take instructions. We have broadly indicated the areas on which these instructions will be required. We have not addressed ourselves to the mechanics or the logistics of how the society will give Mr Kadam, who is on record for the society, adequate instructions but we believe it is necessary for all Advocates appearing before us and their Advocates for the society and the developer to have proper written instructions because it is our experience that all too often individual members then come forward and make allegations not only against society members but also Page 15 of 16 6th March 2024 ::: Uploaded on - 08/03/2024 ::: Downloaded on - 27/03/2024 02:02:34 ::: 902-OSWP-2626-2023++.DOC against the Advocates-on-Record and even Counsel. That is something that we are most anxious to avoid. It serves no purpose.
25. Our objective in this matter is only one: the concerns of the members of the Society.. We do not believe that developers can continue to delay projects like this. They cause untold suffering to residents and citizens of Mumbai. Since 2006 they have been without their redeveloped homes. Possibly an entire generation has gone. At least one generation must see the realization of that hope and of that dream of getting a redeveloped house. Our entire purpose here has been with a focus on ensuring that possession is delivered to the members of the society in the shortest possible time and at the same time that whatever arrangements can legitimately be made (leaving aside claim in arbitration) for financial relief should also be made to flow their way. We say this so that there is no misunderstanding on the part of Mr Narula or his client as to what our priorities are and forever will be.
26. By consent and for final directions, list the matter at 2.30 pm on 20th March 2024.
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