Bombay High Court
Sarita Nagari Phase -2 Co-Op. Housing ... vs The State Of Maharashtra on 1 March, 2018
Author: Manish Pitale
Bench: A. A. Sayed, Manish Pitale
JUDGEMENT-WP. 798-05, 414-05.doc
VPH
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION No. 798 OF 2005
1. Sarita Nagari Phase - 2 Cooperative )
Housing Society Ltd., having its )
Office at 119 / 1, Parvati, )
Sinhagad Road, Pune 411 030. )
2. Vijay Madhukar Ghaisas of Pune, )
Indian Inhabitant, residing at C 10/11 )
Sarita Nagari Phase-2 Cooperative )
Hsg. Society Ltd., 119 / 1, Parvati, )
Sinhagad Road, Pune 411 030 ... Petitioners
Vs.
1. The State of Maharashtra, through the)
Minister for Cooperation, )
Mantralaya, Mumbai 400 032. )
2. The Divisional Joint Registrar, )
Cooperative Societies (Appeals) )
Pune Division, Plot No. 648-49, )
Market Yard, Gultekadi, Pune 411037)
3. The Dy. Registrar, )
Co-operative Societies, )
Pune City (i), 582, Market Yard, )
Pune - 411 037. )
4. M/s. A. V. Bhat Housing Co., )
A Registered Partnership Firm, )
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having registered Office at 1348, )
Sadashiv Peth, Pune 411 030 ... Respondents
WRIT PETITION No. 414 OF 2005
1. Sharayu Sarita Nagari II )
Cooperative HSG Society Ltd., )
at FP 544 (S. No. 119/1) - Parvati )
Sinhgad Road, Pune 30, through )
its authorised signatory Shri Mehta )
Deepak Nautamal, Adult, Occu. - )
Business, Chief Promotor, )
Sharayu Sarita Nagari II Cooperative )
HSG Ltd., at FP 544 (S. No. 119/1 )
- Parvati, Sinhgad Road, Pune 30 )
2. Mehta Deepak Nautamal, Adult,Occu.)
− Business, at Flat No. 3, Bldg. A2, )
Sharayu Sarita Nagari II Cooperative )
HSG Society Ltd. at FP 544 )
(S. No. 119/1) Parvati, )
Sinhagad Road, Pune. ... Petitioners
Vs.
1. Divisional Joint Registrar, )
Cooperative Society, )
Pune Division, Pune )
2. Dy. Registrar, )
Cooperative Societies, Pune City 1 )
582 Market Yard, Pune, )
3. A. V. Bhat HSG Co., )
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Registered Partnership Firm, )
having registered Office At 1348, )
Sadashiv Peth, Pune 30, through its )
Partner - Smt. Aruna Ashok Bhat, )
R/a. 1348 Sadashiv Peth, Pune 30. )
4. The Hon'ble Minister of State, )
(Co-operation), Maharashtra State )
Mantralaya, Mumbai 400 032. )
5. The State of Maharashtra, through )
Principal Secretary, Department of )
Co-operation, Mantralaya, )
Mumbai 400 032. ... Respondents
***
Mr. Uday Warunjikar i/b D. G. Rangras, for the Petitioners in Writ
Petition No. 798/2005.
Mr. Tejas D. Deshmukh, for the Petitioners in Writ Petition No. 414 /
2005.
Ms. K. R. Kulkarni, for Respondent Nos. 1 to 3 in Writ Petition No.
798/2005 and for Respondent Nos. 1, 2, 4 & 5 in Writ Petition No.
414/2005.
Mr. Girish S. Godbole, a/w Drupad Patil, for the Respondent No. 4 in
Writ Petition No. 798/2005 and for Respondent No. 3 in Writ Petition
No. 414/2005.
***
(Pronounced by A. A. Sayed, J. as per Rule 1(i) of Chapter XI of the
Bombay High Court Appellate Side Rules, 1960 in absence of Manish
Pitale, J., who is sitting at Nagpur Bench)
CORAM : A. A. SAYED, &
MANISH PITALE, JJ.
RESERVED ON : DECEMBER 20, 2017
PRONOUNCED ON : MARCH 1, 2018
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JUDGMENT :[PER : MANISH PITALE, J.]
1. The question that arises for consideration in these two writ petitions is, as to whether members (flat owners) of the two Petitioners - Societies had a right to form Cooperative Housing Societies under the provisions of the Maharashtra Cooperative Societies Act, 1960 (hereinafter referred to as the "MCS Act") or that formation of such societies stood prohibited by law when the Respondent - Developer, along with the owner of the land, executed and registered a declaration under Section 10(2) of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 (hereinafter referred to as the "MOFA Act") submitting the property to the provisions of the Maharashtra Apartment Ownership Act, 1970 (hereinafter referred to as the "Apartment Act").
2. The original authority i.e. the Dy. Registrar of Cooperative Societies, Pune, allowed the applications of the Petitioners and granted registration as Cooperative Societies, notwithstanding the said declaration by the Developer and Owner of land. But, on an appeal filed by the Respondent - Developer, the 4 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:50 ::: JUDGEMENT-WP. 798-05, 414-05.doc appellate authority, Divisional Jt. Registrar of Cooperative Societies, Pune Division, reversed the order of the original authority and cancelled the registration of Petitioner Societies, holding that once a declaration was executed and registered under Section 10(2) of the MOFA Act, the members (flat owners) of the Petitioner Societies were prohibited by law from forming cooperative societies. The Petitioners filed revision applications before the Revisional Authority, Minister for Cooperation, which were dismissed, essentially on the same reasoning as given by the appellate authority. These orders are subject matter of challenge in the two writ petitions before us. The facts necessary for appreciating the controversy and the contentions of the parties are as follows.
3. The land in question in the present case is Final Plot No. 544 in village Parvati, Pune. This plot includes Survey Nos. 119/1 to 119/4 and in the present case, the piece of land with which we are concerned, is old Survey No. 119/1. The owner of the land submitted an application for exemption under Section 20 of the Urban Land (Ceiling and Regulation) Act, 1976, before the competent authority in respect of surplus land in the said plot. The owner proposed scheme 5 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:50 ::: JUDGEMENT-WP. 798-05, 414-05.doc of development on the said land that would be governed by the MOFA Act and MCS Act. On 23.10.1989, the competent authority passed an exemption order in favour of the owner of the said land, recording that the scheme would be governed by provisions of the MOFA Act and Government Resolution dated 22.8.1986.
4. On 8.3.1990, the land owner entered into an agreement with the Respondent Developer (Respondent No. 3 in Writ Petition No. 414 of 2005 and Respondent No. 4 in Writ Petition No. 798 of 2005). On 2.11.1996, the land owner executed an irrevocable power of attorney in favour of the Respondent Developer for construction and sale of flats on the said land. Clauses 13 and 21 of the said document refer to formation of Society under the MCS Act. Accordingly, the Respondent Developer constructed flats on the said land, which were purchased by members of the Petitioner Societies. Each purchaser entered into an agreement of sale with the Respondent Developer, wherein the land owner was a consenting party. The Respondent Developer handed over possession of flats to respective purchasers after obtaining occupancy certificate from the Municipal Corporation.
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5. On 25.11.1999, some flat purchasers (members of Petitioner Society in Writ Petition No. 798 of 2005) held a meeting wherein it was resolved that the Respondent Developer be asked to form cooperative society of flat purchasers and necessary steps be taken within one month in that regard. In this meeting, representative of the Developer was also present, thereby showing that on this date itself, the Developer was made aware of the intention of the flat purchasers to form a Cooperative Society. On 1.1.2000, some flat purchasers in Writ Petition No. 798 of 2005 issued a notice to the Respondent Developer to form the Cooperative Society. While referring to the aforesaid meeting dated 25.11.1999, it has been recorded in the order of the Dy. Registrar that such a notice was also earlier issued on 19.12.1999.
6. In the meanwhile, on 27.12.1999 the Respondent Developer alongwith land owner executed a declaration under Section 2 of the Apartment Act for submitting the property to the provisions of the Apartment Act. The said declaration was registered on 14.2.2000. The Developer gave intimation to the Registrar of Cooperative Societies on 21.2.2000 about the execution and registration of the 7 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:50 ::: JUDGEMENT-WP. 798-05, 414-05.doc aforesaid declaration.
7. On 16.3.2000, flat purchasers concerning Writ Petition No. 798 of 2005 filed an application for registration of Petitioner No. 1 therein as a Cooperative Society under the provisions of the MCS Act. On 3.4.2000, the flat purchasers concerning Writ Petition No. 414 of 2005 filed similar application for registration of Petitioner No. 1 therein as a Cooperative Society under the provisions of the MCS Act. These applications were opposed by the Respondent Developer before the Dy. Registrar of Cooperative Societies, on the ground that registered declaration of submitting the property to the provisions of Apartment Act had been already executed and submitted to the Authority and that under Section 10(2) of the MOFA Act, now it was not lawful for formation of Cooperative Societies.
8. But, the Dy. Registrar of Cooperative Societies rejected the objection of the Respondent Builder, inter alia, on the ground that most or majority of the flat purchasers had not signed the deed of declaration. Accordingly, the said Authority passed an order dated 27.10.2000 registering Petitioner No. 1 Society in Writ Petition No. 798 of 2005 as Cooperative Society under the MCS Act. A similar 8 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:50 ::: JUDGEMENT-WP. 798-05, 414-05.doc order dated 11.1.2001 was passed by the said Authority in favour of Petitioner No. 1 Society in Writ Petition No. 414 of 2005.
9. Being aggrieved by the said orders, the Respondent Developer filed appeals under Section 152 of the MCS Act. By two separate orders dated 28.4.2004, the Divisional Joint Registrar, Cooperative Societies, Pune Division, allowed the appeals of Respondent Developer, cancelling the registration of Petitioner Societies. It was held by the said Authority that since the Petitioners themselves accepted that the deed of declaration was submitted by the Respondent Developer to the Sub-Registrar before registration of the Societies, the orders of the lower Authority were unsustainable. It was held that by operation of Section 10(2) of the MOFA Act, the Petitioner Societies could not have been registered as Cooperative Societies.
10. The said orders were challenged by the Petitioners by filing Revision Applications before the State Government. By a common order dated 24.8.2004, the Minister of State (Cooperation) has dismissed the Revision Applications of the Petitioners, essentially agreeing with the reasoning of the Divisional Jt. Registrar of 9 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:50 ::: JUDGEMENT-WP. 798-05, 414-05.doc Cooperative Societies. This common order has been challenged by filing separate writ petitions by the Petitioners. The Respondents have filed replies opposing the writ petitions.
11. Mr. Uday Warunjikar, learned counsel appearing for the Petitioners in Writ Petition No. 798 of 2005 has submitted that a perusal of the exemption order dated 23.10.1989 passed by the Competent Authority under Section 20 of the Urban Land (Ceiling & Regulation) Act, 1976, as also the power of attorney dated 2.11.1996 executed in favour of the Respondent Developer and the agreements executed in favour of the flat purchasers by the Developer, show that there are various clauses in these documents, mandating formation of a cooperative society of the flat purchasers. It is further submitted that affidavits were taken by the Respondent Developer from the flat purchasers, as required under the MCS Act and Rules stating that they do not own any other flat in the area of operation of the Cooperative Society. According to the learned counsel, it is clear from the said documents that from the very beginning when the flat purchasers agreed to purchase the flats from the Respondent Developer, a promise was given to them about formation of a Cooperative Society and not 10 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:50 ::: JUDGEMENT-WP. 798-05, 414-05.doc an apartment condominium as claimed by the Respondent Developer.
12. It is further submitted that under Section 10(1) of the MOFA Act read with Rule 8 of the MOFA Rules, it was mandatory for the Respondent Developer to take steps for formation and registration of a Cooperative Society of flat purchasers. It is submitted that the Respondent Developer failed to take such steps within the prescribed period of four months, as contemplated under the said provision. It is further submitted that when the flat purchasers made their intention clear in a joint meeting with the representative of the Developer on 25.11.1999, that they desired to form a cooperative society, the Respondent Developer along with the land owner started taking steps to scuttle the formation of such a Society. It is submitted that execution of the declaration on 27.12.1999 and its registration on 14.2.2000 under Section 2 of the Apartment Act, and its intimation by the Respondent Developer to the Registrar of the Co-operative Societies on 21.1.2000 were steps hurriedly taken by the Respondent Developer intentionally to frustrate the formation of Cooperative Society by the flat purchasers. It is submitted on behalf of the Petitioners that the flat purchasers had issued notices on 19.12.1999 11 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 ::: JUDGEMENT-WP. 798-05, 414-05.doc and 1.1.2000 to the Respondent Developer about their intention to form Cooperative Society and that the aforesaid action of the Respondent Developer seeking to frustrate formation of such society by relying on Section 10(2) of the MOFA Act ought not to be permitted and that such action of the Respondent Developer was illegal and unsustainable.
13. The learned counsel for the Petitioners submitted that the Dy. Registrar had correctly appreciated the facts of the case while granting registration to the Cooperative Society, formed by the Petitioners (flat purchasers) and that the Appellate Authority as well as the Revisional Authority committed a grave error in simply relying upon Section 10(2) of the MOFA Act to hold against the Petitioners by cancelling the registration of the Cooperative Society. It was submitted that 244 flat purchasers were members of the Cooperative Society while only 33 flat purchasers were with the Respondent Developer for forming of an apartment association / condominium and that the will of overwhelming majority of the flat purchasers could not be defeated by the Respondent Developer. Reliance was also placed on Article 19(1)(c) of the Constitution of India to support the contentions of the 12 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 ::: JUDGEMENT-WP. 798-05, 414-05.doc Petitioners, particularly when the words "cooperative society" stood added to Article 19(1)(c) of the Constitution of India under the Constitution (Ninety-seventh Amendment) Act, 2011. It was submitted that an overwhelming majority of the flat purchasers were members of the Cooperative Society and that due to the interim order passed in favour of the Petitioners, the Society was functioning now for more than 17 years and that therefore, the impugned orders deserved to be interfered with, so that cancellation of registration is set aside.
14. In support of his contentions, the learned counsel for the Petitioners relied upon following judgments of this Court:
(i) Om Sai Pratibha Co-op. Hsg. Soc., Petitioners Vs. State of Maharashtra & Ors.1;
(ii) Rahul Enterprises, Petitioner Vs. Abhineta Park Sahakari Gruha Rachana Samstha Maryadit & Ors., Respondents2;
(iii) Chitan Constructions, Aurangabad & Anr., Petitioners Vs. State of Maharashtra & Ors., Respondents3.
15. Mr. Tejas Deshmukh, learned counsel appearing for the 1 2002 (5) Bom. C.R. 177 2 2013 (3) Bom. C. R. 168 3 2017 (2) Mh.L.J. 862 13 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 ::: JUDGEMENT-WP. 798-05, 414-05.doc Petitioners in Writ Petition No. 414 of 2005, submitted that the prescribed period of four months, provided under Section 10(1) of the MOFA Act read with Rule 8 of the MOFA Rules, ought to be read into Section 10(2) also. According to him, when there was prescribed time period of four months provided for formation of Cooperative Society by the Developer, if the said time limit is not applied to execution of declaration by the Developer under Section 10(2) of the MOFA Act, it would give unbridled power to the Developer to frustrate the formation of a Cooperative Society by the flat purchasers. It was submitted that such time period ought to be held to be mandatory, particularly when failure to take steps within the said prescribed period incurs criminal liability under Section 13 of the MOFA Act.
16. It was further submitted that the declaration dated 27.12.1999, executed by the Respondent Developer and the land owner is not in terms of the provisions of the Apartment Act, because it violates second proviso to Section 2 of the Apartments Act, as it specifies that the owner will grant lease of the land to apartment owners and terms and conditions of such lease be disclosed in the declaration, which has not been done in the present case. It is further 14 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 ::: JUDGEMENT-WP. 798-05, 414-05.doc submitted that under the declaration, the Developer has kept reserved for itself several common areas and this aspect has not been disclosed in flat purchase agreements, and therefore, the declaration leaning in favour of the Developer cannot be held to have been executed in terms of the provisions of the Apartment Act. It is further submitted that such a faulty declaration, which seeks to defeat the rights of the flat purchasers, protected under Sections 4 and 11 of the MOFA Act, cannot be relied upon under Section 10(2) of the MOFA Act to prevent formation and registration of the Petitioner No. 1 Cooperative Society. On the basis of these submissions, it is submitted that the orders passed by the appellate and revisional authorities in the present case deserve to be set aside and the order of the Dy. Registrar of registering Cooperative Society deserves to be restored.
17. Mr. Girish Godbole, learned counsel appearing on behalf of the Respondent Developer in both the writ petitions opposed the contentions raised on behalf of the Petitioners and sought to demonstrate that the writ petitions deserved to be dismissed and the orders of the appellate and revisional authorities deserved to be confirmed. It is contended by the learned counsel for the Respondent 15 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 ::: JUDGEMENT-WP. 798-05, 414-05.doc Developer that under Article 227 of the Constitution of India, the jurisdiction to be exercised by this Court while deciding the present writ petitions is limited and that the scope is only to examine whether the authorities below had acted within their jurisdiction or not. It is further contended that Section 10 of the MOFA Act, as it stood at the relevant time, is required to be appreciated and that the provisos added to Section 10(1) of the MOFA Act w.e.f 25.2.2008 cannot be looked into. It is contended that a plain reading of Section 10(2) of the MOFA Act shows that if the Developer executes a declaration in terms of the provisions of the Apartments Act and informs the Registrar under the MCS Act about such execution and registration of a declaration, it would be unlawful to form any Cooperative Society or company of flat purchasers.
18. It was submitted that only chronological sequence of events in the present case was required to be looked into and that it was clear from the same that the declaration was executed by respondent Developer alongwith the land owner in terms of Section 2 of the Apartments Act and its information was given to the Registrar under the MCS Act, well before the Petitioner Societies had even 16 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 ::: JUDGEMENT-WP. 798-05, 414-05.doc applied for registration of the Cooperative Society. It was submitted that the declaration was executed on 27.12.1999, it was registered on 14.2.2000 and the intimation regarding these facts was submitted before the Registrar on 21.2.2000. It was submitted that by the time Petitioner No. 1 in Writ Petition No. 798 of 2005 had filed its application for registration as a Cooperative Society before the Deputy Registrar under the provisions of the MCS Act on 16.3.2000 and Petitioner No. 1 in Writ Petition No. 414 of 2005 had submitted such application on 13.4.2000 intending to form a Cooperative Society, operation of Section 10(2) of the MOFA Act had already come into force, and that therefore, appellate as well as the revisional authorities were justified in holding that the Deputy Registrar erred in granting registration to the two Cooperative Societies. It was submitted that in the facts of the present case, by application of Section 10(2) of the MOFA Act, formation of the Cooperative Societies was not lawful and the order of registration of said Societies was correctly directed to be cancelled.
19. The learned counsel further submitted that defects in the declaration sought to be pointed out by the Petitioners, to contend that 17 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 ::: JUDGEMENT-WP. 798-05, 414-05.doc it could not be relied upon for benefit of Section 10(2) of the MOFA Act, were of no avail because it was for the Petitioners to first establish before a competent Civil Court by filing appropriate suit or proceedings for declaration that the document dated 27.12.1999 i.e. the declaration executed by the Respondent Developer with the land owner was invalid. In this regard, reliance was placed on Section 31 of the Specific Relief Act, 1963, which provides that if an instrument is void or voidable, any person aggrieved by it may sue to have it so adjudged by the Court. As long as the said declaration has not been declared to be invalid by a competent Civil Court, in writ petitions filed under Article 227 of the Constitution of India, the Petitioners are not entitled to claim that the declaration cannot be relied upon as it is defective and invalid. It is further contended that the prescribed period of four months as per Section 10(1) of the MOFA Act and Rule 8 of the MOFA Rules has to be held as directory and not mandatory and further that the said prescribed period cannot be read into Section 10(2) of the MOFA Act. It is also contended that the Petitioners cannot claim any fundamental right under Article 19(1)(c) of the Constitution of India on the basis that the words "co-operative societies" have been 18 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 ::: JUDGEMENT-WP. 798-05, 414-05.doc added by 97th Amendment to the Constitution of India w.e.f. 15.2.2012, because benefit of such amendment cannot be claimed to be retrospective in its operation. It is also submitted that such fundamental right in Article 19(1)(c) of the Constitution was subject to law made by the legislature of the State for regulating the affairs of the Co-operative Societies under Articles 243-ZI and 243-ZJ.
20. It was further contended that the flat purchasers could not be deemed as "owners" under Section 2 of the Apartment Act, as only an agreement had been executed in their favour. The declaration contemplated under Section 2 of the Apartment Act was therefore, validly executed by the land owner alongwith the Respondent Developer in respect of the land in question. The learned counsel for the Respondent Developer submitted that the judgments relied upon by the Petitioners were distinguishable and that the writ petitions deserved to be dismissed.
21. We have heard the learned counsel for the parties. In order to deal with and pronounce upon the arguments advanced on behalf of the parties, it is necessary to refer to relevant provisions of the MOFA Act and Rules as well as the Apartment Act. 19 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 :::
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22. A perusal of the provisions of the two legislations would show that in both the Acts an endeavour has been made to protect the interest of the flat owners, so that the Cooperative Society or apartment association/condominium continues to take care of the welfare and requirements of the flat owners.
23. By the operation of the provisions of the aforesaid Acts, either a Cooperative Society or company of flat owners can be formed or an apartment association/condominium can come into being in pursuance of the provisions of the Apartment Act being applied to the flat owners, by execution and registration of a declaration in terms of the provisions of the Apartment Act. In the instant case, while an overwhelming majority of flat purchasers have opted for formation of Cooperative Society as 244 flat purchasers are members of the petitioner Society in Writ Petition No.798/2005 and 52 flat purchasers are members of the petitioner Society in Writ Petition No. 414/2005, only 33 flat purchasers are members of the apartment association. It is also contended on behalf of the petitioner Societies that even these 33 flat purchasers who are members of the apartment association, have 20 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 ::: JUDGEMENT-WP. 798-05, 414-05.doc been paying monthly charges to the Societies and that therefore, they are voluntarily part of the Societies as well. This factual position is not seriously disputed by the Respondent- Developer. Thus, it is evident that an overwhelming majority of flat purchasers are members of the Petitioner Societies, which are taking care of the welfare of the members for a long period of time of 17 years. This is a significant aspect of the present case.
24. In this context it is necessary to refer to clauses of the agreements that the flat purchasers entered into with the Respondent - Developer, wherein there are various clauses mandating formation of a Cooperative Society of the flat purchasers. The owner of the land is a consenting party to the said agreements. The relevant clauses or portions of the agreements referring to formation of Cooperative Society of flat purchasers are quoted below:-
"AND WHEREAS before making an application as aforesaid the FLAT PURCHASER has made a declaration as required by the provisions of Maharashtra Cooperative Societies Act, 1960, (Maharashtra Act No. XXIV of 1960) and the 21 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 ::: JUDGEMENT-WP. 798-05, 414-05.doc Urban Land (Ceiling and Regulation) Act, 1976, to that effect firstly that neither the FLAT PURCHASER nor the members of his/her/their family, family as defined under the Urban land (Ceiling and Regulations) Act, 1976, owns/own tenement/s, house/s, building/s, within the limits of Pune Urban Agglomeration.
The FLAT PURCHASER hereby agrees to purchase from the promoter/developer and the promoter/developer hereby agrees to sell to the FLAT PURCHASER, one residential flat (herein after referred to as the 'said flat') as stated in schedule no.2 (Schedule of the flat) hereunder written. The FLAT PURCHASER hereby agrees to pay the flat price to the promoter/developer in the manner as stated in schedule no.3 (schedule of payment) hereunder written. The FLAT PURCHASER is aware of the fact that the flat price mentioned in schedule no.3 (schedule of Payment) hereunder written does not include any stamp duty, registration charges. The cost of the common areas and facilities, limited to the appurtenant to the said flat, development cost, 22 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 ::: JUDGEMENT-WP. 798-05, 414-05.doc society formation cost etc. is included in the flat price mentioned in the Schedule No.3.
The PURCHASER/S of such premises in such additional structure shall be entitled to become members of the Co-operative Society or Apartment if any-which then might have been formed by the owners of various premises in the building/s then standing on the said property and upon such membership of such Co-operative Society so being given to such PURCHASER/S, shall become allottees of the respective premises purchased by them. The PURCHASER/S herein and/or the Co-
operative Society or the Apartment etc. hereby envisaged shall not have and claim, right title or interest of any nature whatsoever in or in respect of any such additional or increased floor space index or compensatory floor space index which may thus be sanctioned by Pune Municipal Corporation and/or other concerned authorities for utilisation on the said property at any time hereafter.
The FLAT PURCHASER along with other purchasers in the building shall join in registering the Society or Corporate Body and 23 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 ::: JUDGEMENT-WP. 798-05, 414-05.doc for that purpose also from time to time sign and execute the application for registration of the Society or Corporate Body and for becoming a member including the bye-laws of the Society or corporate Body and duly filled, sign in office of the PROMOTER/DEVELOPER to register the Society or Corporate Body under Section 10 of the Act. No objection shall be given by the FLAT PURCHASER, if any changes or modifications are made in the draft bye-laws, the memorandum and/or articles, of the said Society or Corporate Body as may be required by the Registrar or Co-operative Societies or the Registrar of Companies as the case may be or any other Competent Authority.
At the time of registration, the FLAT PURCHASER shall pay to the PROMOTER/DEVELOPER or to his nominees the FLAT PURCHASER's share of Stamp Duty payable, if any, to the said Society, or Corporate Body on the conveyance of lease or any document or instrument of transfer in respect of the said land and the building to be executed in favour of the said 24 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 ::: JUDGEMENT-WP. 798-05, 414-05.doc Society/Corporate Body."
The above quoted portions of the flat purchasers agreement show that the Respondent Developer held out to the flat purchasers that a Cooperative Society would be formed. Therefore, a flat purchaser purchasing a flat from the Respondent Developer proceeded on the basis that a Cooperative Society of flat purchasers would be formed, which would then take care of the welfare and further activities of all the flat purchasers.
25. The learned counsel appearing on behalf of the Respondent Developer is correct when he points out that although references have been made to formation of Cooperative Society at various places in the flat purchasers' agreement, at the same time reference is also made to apartments/corporate body and that clause 24 very specifically states that the agreement shall be subject to provisions of the Apartment Act and Rules framed thereunder.
26. Thus, one of the issues in these writ petitions before this Court is, as to whether the flat purchasers were given a promise by the Respondent Developer of formation of Cooperative Society or that 25 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 ::: JUDGEMENT-WP. 798-05, 414-05.doc they had acquiesced to formation of an apartment association/condominium in terms of the Apartment Act. On an analysis of the various clauses of the flat purchasers' agreement, it is evident that formation of Cooperative Society of the flat purchasers was clearly mandated under the agreement, although it was also stated that the agreement would always be subject to the provisions of the Apartment Act. This would show that the flat purchasers who have formed the Petitioner Societies are justified in claiming that they purchased flats from the Respondent Developer because they were given assurance that Cooperative Society of flat purchasers would be eventually formed and that this was one of the factors which went into their decision of purchasing flats from the Respondent Developer. As regards the agreement being subject to the Apartment Act, it would mean that the provisions of the Apartment Act would have to be applied strictly in the present case.
27. Apart from this, it is an admitted position that affidavits were taken from the flat purchasers in terms of the requirements of MCS Act and Rules wherein the flat purchasers were required to state that they or any dependent member of the family were not members of 26 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 ::: JUDGEMENT-WP. 798-05, 414-05.doc any Cooperative Housing Society in the area of operation of the proposed housing Society. The fact that such affidavits were taken from the flat purchasers by the Respondent Developer while entering into flat purchase agreements, shows that at all times the formation of Cooperative Society of flat purchasers was intended.
28. Another relevant aspect highlighted on behalf of the Petitioners is that even the order of exemption passed under the provisions of Urban Land (Ceiling and Regulation) Act, 1976, states that the persons applying for exemption had stated in their application that the exemption was sought for the land in question for construction of tenements that would be governed by the MOFA Act or the MCS Act. Therefore, right from the stage of inception of the project of construction of apartments, starting with the issuance of the exemption order under the provisions of the Urban Land (Ceiling and Regulation) Act, 1976, to the execution of flat purchase agreements, it was held out that a Cooperative Society of flat purchasers would be formed.
29. It is in this backdrop that the contentions of the parties will have to be appreciated to examine as to whether the petitioners 27 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 ::: JUDGEMENT-WP. 798-05, 414-05.doc are justified in claiming that when the flat purchasers were about to form the Cooperative Society as the Respondent Developer had failed to form such a Society mandated under Section 10(1) of the MOFA Act, the Respondent Developer rushed into execution and registration of a declaration under Section 10(2) of the MOFA Act by catching hold of five flat purchasers along with the owner and sought to scuttle formation of the Cooperative Society in a most illegal and highhanded manner.
30. Section 10 of the MOFA Act, as it stood at the relevant time, reads as follows:
"10. Promoter to take steps for formation of co-
operative society or company.-
(1) As soon as a minimum number of persons required to form a Co-operative society or a company have taken flats, the promoter shall within the prescribed period submit an application to the Registrar for registration of the organisation of persons who take the flats as a Co-operative society or, as the case may be, as a company; and the promoter shall join, in respect of the flats which have not been taken, in such application for membership of a Co-operative society or as the case may be of a company. Nothing in this section shall affect the right of the promoter to dispose of the remaining flats in accordance with the provisions of this Act.28 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 :::
JUDGEMENT-WP. 798-05, 414-05.doc (2) If any property consisting of building or buildings is constructed or to be constructed [and the promoter submits such property to the provisions of the Maharashtra Apartment Ownership Act, 1970 (Mah. XV of 1971.), by executing and registering a Declaration as provided by that Act, then the promoter shall inform the Registrar, as defined in the Maharashtra Co-operative Societies Act, 1960 (Mah. XXIV of 1961.) accordingly; and in such cases, it shall not be lawful to form any co-operative society or company."
As regards the contention of the petitioners that the time period of four months for formation of Cooperative Society by the Respondent Developer under Section 10(2) of the MOFA Act read with Rule 8 of the MOFA Rules, should also apply to execution and registration of declaration by the Respondent - Developer for submitting the property to the provisions of the Apartment Act, it is evident that such an interpretation would amount to adding words to Section 10(2) of the MOFA Act, which would be impermissible. This is particularly because this case has to be interpreted on the basis of how Section 10 of the MOFA Act stood before provisos were added to Section 10 (1) of the MOFA Act by amendment. This Court in its judgment in the case of Writ Petition No. 2034/2016 (Paul Parambi and another .vs. The Bombay Dying and Manufacturing Co.Ltd 29 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 ::: JUDGEMENT-WP. 798-05, 414-05.doc and another), while dealing with an identical contention has held as follows:-
"33. Having noted and analyzed the provisions of these two Acts(namely MOFA, 1963 and the MAO Act), we shall now turn our attention to the contentions raised before us by the respective parties. The first contention raised by Mr Dhakephalkar was that Section 10(2) of MOFA, 1963, and more particularly the embargo to form a co-operative society, should be read with and subject to Section 10(1). He submitted that Section 10(1) stipulates that as soon as a minimum number of persons required to form a co -operative society or a company have taken flats, the Promoter shall within the prescribed period, submit an application to the Registrar for registration of a co-operative society or as the case may be, a company. The prescribed period as mentioned in Section 10(1) is a period of four months as more particularly set out in Rule 8 of the said Rules. He submitted that this period of four months that has been prescribed in Section 10(1) has to also apply to a 30 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 ::: JUDGEMENT-WP. 798-05, 414-05.doc promoter when he seeks to execute and register a Declaration by submitting the property to the provisions of MAO Act. If this was not done within the prescribed period (four months), then the embargo as set out in Section 10(2) would not come into play and the flat purchasers would not be barred or precluded from seeking registration of a co-operative society.
34. As far as this contention is concerned, we are unable to agree with the submissions of Mr Dhakephalkar. In our opinion, and as rightly submitted by Mr Chinoy, such an interpretation / construction would be ex - facie contrary to the settled principles. If we are to accept the interpretation of Mr Dhakephalkar, the same would amount to rewriting / adding words to the unambiguous language of Section 10(2) and which would result in the said provision being substantially altered. If in fact the intention of the Legislature was to prescribe a definite period by which a promoter was to submit the property to the provisions of the MAO Act 31 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 ::: JUDGEMENT-WP. 798-05, 414-05.doc [before the embargo as set out in Section 10(2) came into play], it would have specifically done so. It could have simply provided for one more option in Section 10(1). We find considerable force in the argument of Mr Chinoy that Section 10(2) is an independent provision under which no time period has been prescribed for submitting the property to the MAO Act so long as the same is done prior to an application being filed for registration of a co-operative society or a company, as the case may be. We are clearly of the view that if we were to accept the interpretation of the Petitioners, the same would restrict and negate the plain and clear language of Section 10(2) by reading words into the statute that are conspicuous by their absence. Thus, to our mind, this would be contrary to the basic canons of interpretation and construction of a Statute. We, therefore, are unable to agree with the submissions of Mr Dhakephalkar that before the embargo as stipulated in Section 10(2) can kick in, the promoter has to submit the property to the provisions of the MAO Act within a period of four months after a minimum 32 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 ::: JUDGEMENT-WP. 798-05, 414-05.doc number of persons required to form a co- operative society or a company have taken the flats. This contention of Mr Dhakephalkar is, therefore, rejected."
31. In the light of the above, the said contention raised on behalf of the Petitioners stands rejected. As a result, what remains to be considered is whether the Respondent Developer had complied with the requirements of Section 10 (2) of the MOFA Act in a strict manner so as to successfully claim that upon the declaration being executed, registered and intimated to the Registrar under the MCS Act, it was no longer lawful for the flat purchasers to form a Cooperative Society. The requirements of Section 10 (2) of the MOFA Act are that a declaration as contemplated under the provisions of the Apartment Act is to be executed and registered and then this fact is to be informed to the Registrar as defined under the MCS Act so as to render formation of Cooperative Society by flat purchasers as unlawful.
32. Since the effect of the Respondent Developer along with the owner executing such declaration under Section 10(2) of the 33 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 ::: JUDGEMENT-WP. 798-05, 414-05.doc MOFA Act, is drastic for the flat purchasers, as they are prevented from forming a Cooperative Society, it is necessary that such a declaration is scrutinized closely and it is to be examined whether it strictly complies with the requirements of Section 10(2) of the MOFA Act and the provisions of the Apartment Act.
33. In the instant case, the admitted position about the chronological sequence of events shows that the declaration was executed and registered prior to the flat purchasers submitting their application for formation of Cooperative Society under the provisions of the MCS Act. The fact that execution and registration of such declaration by the Respondent Developer and the owner was intimated to the competent authority under the MCS Act has not been disputed by the petitioners and it is so recorded in the orders passed by the authorities under the MCS Act. Therefore, it is contended on behalf of the Respondent Developer that by operation of Section 10(2) of the MOFA Act, the flat purchasers could not have formed a Cooperative Society.
34. The only aspect that remains to be examined is whether the declaration executed by the Respondent Developer and the owner 34 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 ::: JUDGEMENT-WP. 798-05, 414-05.doc satisfied the requirements of the Apartment Act. It is the contention of the petitioners that the declaration hurriedly executed and registered by the Respondent Developer and the owner was not in terms of Section 2 of the Apartment Act and that it violated number of provisions of the said Act. On this basis, it was contended that when mandatory requirements of the Apartment Act were not complied with in the declaration, it could not be relied upon for preventing the petitioners from forming a Cooperative Society under Section 10(2) of the MOFA Act. It was contended that the words "the Promoter submits such property to the provisions of the Maharashtra Apartment Ownership Act, 1970 by executing and registering a declaration as provided by that Act" in Section 10(2) of the MOFA Act, have to be read strictly and applied to the declaration executed in the present case by the Respondent Developer, because a drastic consequence of preventing the Petitioners from forming a Cooperative Society ensues as a result of such declaration. It is pointed out that the second proviso to Section 2 of the Apartment Act states that terms and conditions of lease should be disclosed in the declaration when the owner or owners of the property grant a lease of such land to the 35 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 ::: JUDGEMENT-WP. 798-05, 414-05.doc apartment owners. But, no such disclosure is made in the declaration in the instant case.
35. It is also pointed out that the contents of the declaration in the present case are not in terms of Section 11 of the Apartment Act as particulars specified therein have not been stated in the declaration, particularly because the Respondent Developer has not given description of several common areas kept reserved for itself. In other words, it is stated that the declaration is one sided in favour of the Respondent Developer and it cannot be foisted on such large number of flat purchasers who have opted for formation of Cooperative Society and that such a defective declaration cannot be used to prevent the flat purchasers from forming a Cooperative Society by operation of Section 10(2) of the MOFA Act.
36. On the other hand, the learned counsel appearing for the Respondent Developer has pointed out that the Petitioners cannot claim that the declaration is defective because that would require a pronouncement upon the validity of the said document by a competent Civil Court. Reliance has been placed on Section 31 of the Specific Relief Act, 1963, to contend that the Petitioners were effectively 36 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 ::: JUDGEMENT-WP. 798-05, 414-05.doc claiming that the declaration was voidable and that therefore, they were required to sue to have it is so adjudged by a competent Civil Court. In the absence of filing any civil suit in that regard, they could not claim that the declaration was defective.
37. We have given thoughtful consideration to the said contentions raised by both parties on the question as to whether the said declaration can be relied upon for rendering formation of Cooperative Societies by the petitioners as unlawful. In the aforementioned judgment in the case of Paul Parambi .vs. The Bombay Dyeing and Manufacturing Co.Ltd. (supra), this Court, while considering the question as to the nature of the declaration and whether it was contrary to provisions of the Apartment Act, has held in the facts of the said case that a deed of declaration ex facie contrary to the provisions of the Apartment Act could not be considered as a declaration at all for the purposes of Section 10(2) of the MOFA Act. In that case, the owner of the property had unilaterally executed such a declaration despite the fact that 80% of the flats had been already sold. While deciding that case, this Court took into consideration the fact that since the flat purchasers lose their right to form a Cooperative 37 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 ::: JUDGEMENT-WP. 798-05, 414-05.doc Society, it has to be seen whether the declaration strictly complies with the provisions of the Apartment Act to prevent the flat purchasers from forming a Cooperative Society under Section 10(2) of the MOFA Act. It was held in that context by this Court as follows:-
"41. In the facts of the present case as set out earlier, the purported Deed of Declaration was registered by Respondent No.1 only on 28th September, 2011. However, much prior thereto, by the year 2009, Respondent No.1 had admittedly sold and disposed of about 80 % of the flats by executing individual sale agreements with the flat purchasers. In fact by the end of the year 2006 itself, Respondent No.1 had sold more than 10 flats in the said building. This being the factual position, looking at the provisions of Section 2 as well as the definitions as set out in Section 3 of the words "apartment", "building" and "property", we do not think that Respondent No.1 could have unilaterally executed a Deed of Declaration on 28th September, 2011 under the provisions of the MAO Act. This is for the simple reason that Section 2 clearly provides that the MAO Act applies only to a property, 38 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 ::: JUDGEMENT-WP. 798-05, 414-05.doc the sole owner or all of the owners of which submit the same to the provisions of the MAO Act. Looking to the definitions of the words "apartment", "building" and "property", as on 28th September, 2011 (the date on which the Deed of Declaration was executed) Respondent No.1 could not be said to be the sole owner of the property as it had already disposed of 80 % of the flats in the building constructed by it. This being the position, this unilateral execution and registration of the Deed of Declaration (dated 28th September, 2011) was ex-facie contrary to the provisions of the MAO Act and could not be considered as a Declaration at all for the purposes of Section 10(2) of MOFA, 1963. We have reached this conclusion because the language of Section 10(2) clearly stipulates that if the promoter submits a property to the provisions of the MAO Act, the same is to be done by executing and registering a Declaration as provided by that Act. This clearly postulates that if the Declaration is not as per the provisions of the MAO Act, the bar under Section 10(2) [making it unlawful to form a co-operative society or a 39 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 ::: JUDGEMENT-WP. 798-05, 414-05.doc company] would not be attracted.
42. The Maharashtra Apartment Ownership Act, 1970 is an Act to provide for the ownership of an individual apartment in a building and to make such apartment heritable and transferable property. The MAO Act applies only if the pre-conditions for its application set out in Section 2 thereof are fulfilled. The word "declaration", which finds repeated reference in Section 2 is defined in Section 3(j) to mean the instrument by which the property is submitted to the provisions of MAO Act, as provided by section 2, which words and figures were substituted for the words "as hereinafter provided" by Maharashtra Act 53 of 1974. The definition does not end here and says further, and such Declaration as from time to time may be lawfully amended. Once the Declaration is an instrument, then, for it to have complete legal effect, it has to be in conformity with Section 11 and by Section 13, its registration is compulsory. Therefore, when the legislature employs the words "as provided by that Act" in 40 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:51 ::: JUDGEMENT-WP. 798-05, 414-05.doc Sub-section (2) of Section 10 of MOFA, it means that the provisions of the MAO Act are duly complied with. Therefore, as provided by that Act means in conformity and in accordance with the provisions of the MAO Act. Unless there is material before the Registrar, which would establish and prove that the promoter submitted the property to the provisions of MAO Act by executing and registering a declaration as provided by that Act, then alone it shall not be lawful to form any co-operative society of persons, who have taken the flats. The legislature has employed and used these words with a specific intent and purpose.
43. The MAO Act provides for ownership of an individual apartment in a building and to make such apartment heritable and transferable property and that Act has been enacted in 1970. On the date of that enactment, the MOFA, 1963 was already in existence and in force. MOFA, 1963 seeks to regulate, in the State of Maharashtra, promotion of the construction, sale, management and transfer of 41 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:52 ::: JUDGEMENT-WP. 798-05, 414-05.doc flats on ownership basis. When the competent legislature realised that consequent on the acute shortage of houses in several areas of the State of Maharashtra, there were abuses, malpractices and difficulties relating to above matters and those are increasing, that it decided to step in and make the law. Once this is the purpose which is sought to be achieved and the MAO Act contemplating, by Section 14, removal from provisions of that Act, then, all the more we cannot place an interpretation on Sub-section (2) of Section 10 of MOFA, 1963 which would either clash with the MAO Act or render it nugatory. Equally, we cannot place such an interpretation on the provisions of the MAO Act (the later Act), which would nullify the effect of MOFA, 1963 namely, the earlier Act. That Act is specifically referred to in the Schedule to the MAO Act and Section 27 thereof."
38. As regards the reliance placed by the learned counsel for the Respondent Developer on Section 31 of the Specific Relief Act, 1963, to contend that the Petitioners would first have to successfully 42 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:52 ::: JUDGEMENT-WP. 798-05, 414-05.doc prove before a Civil Court that the declaration executed by the Respondent Developer was bad in law or voidable and then they would be entitled to claim that such a declaration could not be the basis for preventing them from formation of Cooperative Society under Section 10(2) of the MOFA Act, we find that in the said case of Paul Parambi (supra), this Court has found the declaration to be ex facie contrary to the provisions of the Apartment Act, despite the fact that in the said case the flat purchasers had instituted a suit in respect of declaration, which was pending. Thus, even when a civil suit on the said question was pending, this Court has examined the issue as to whether the declaration executed was in terms of the provisions of the Apartment Act or not. Therefore, we find that while deciding these writ petitions, this Court can certainly look into the question as to whether the declaration relied upon by the Respondent Developer, which has the drastic consequence of preventing the Petitioners from forming the Cooperative Society under Section 10(2) of the MOFA Act, is or is not in terms of the requirements of the Apartment Act. This is particularly so because Section 10(2) of the MOFA Act clearly states that such declaration ought to be in terms of the provisions of 43 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:52 ::: JUDGEMENT-WP. 798-05, 414-05.doc the Apartment Act. The failure to adhere to the provisions of the Apartment Act can certainly be examined in the instant case. It is also necessary to examine whether the hurriedly executed declaration in the present case infringes any valuable rights that accrued to the flat purchasers/members of the petitioner Cooperative Societies under the provisions of the MOFA Act.
39. The relevant provisions of the MOFA Act and the Apartment Act are as follows:
MOFA Act "4. Promoter before accepting advance payment or deposit to enter into agreement and agreement to be registered-
(1) Notwithstanding anything contained in any other law, a promoter who intends to construct or constructs a block or building of flats all or some of which are to be taken on ownership basis, shall, before he accepts any sum of money as advance payment or deposit, which shall not be more than 20 per cent, of the sale price enter into a written agreement for sale with each of such persons who are to take or have taken such flats, and the agreement shall be registered under the Registration Act, 1908 and such agreement shall be in the prescribed form. (1A) The agreement to be prescribed under sub-section (1) shall contain inter alia the particulars as specified in clause (a); and to such agreement there shall be attached the copies of the documents specified in clause (b)-
(a) particulars-44 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:52 :::
JUDGEMENT-WP. 798-05, 414-05.doc
(i) if the building is to be constructed, the liability of the promoter to construct it according to the plans and specifications approved by the local authority where such approval is required under any law for the time being in force;
(ii) the date by which the possession of the flat is to be handed over to the purchaser;
(iii) the extent of the carpet area of the flat including the area of the balconies which should be shown separately;
(iv) the price of the flat including the proportionate price of the common areas and facilities which should be shown separately, to be paid by the purchaser of flat; and the intervals at which instalments thereof may be paid;
(v)the precise nature of the organisation to be constituted of the persons who have taken or are to take the flats;
(vi)the nature, extent and description of limited common areas and facilities;
(vii)the nature, extent and descriptiion of limited common areas and facilities, if any;
(viii)percentage of undivided interest in the common areas and facilities appertaining to the flat agreed to be sold;
(ix)statement of the use for which the flat is intended and restriction on its use, if any;
(x)percentage of undivided interests in the limited 45 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:52 ::: JUDGEMENT-WP. 798-05, 414-05.doc common areas and facilities, if any, appertaining to the flat agreed to be sold;
(b) copies of documents-
(i) the certificate by an Attorney-at-law or Advocate under clause (a) of sub-section (2) of section 3;
(ii) Property card or extract of Village Forms VI or VII and XII or any other relevant revenue record showing the nature of the title of the promoter to the land on which the flats are constructed or are to be constructed;
(iii)the plans and specifications of the flat as approved by the concerned local authority.
(2) Any agreement for sale entered into under sub-section (1) shall be presented, by the promoter or by any other person competent to do so under section 32 of the Registration Act, at the proper registration office for registration, within the time allowed under sections 23 to 26 (both inclusive) of the said Act and execution thereof shall be admitted before the registering officer by the person executing the document or his representative, assigen or agent as laid down in sections 34 and 35 of the said Act also within the time aforesaid:
Provided that, where any agreement of sale is entered into, or is purported to be entered into, under sub-section (1), at any time before the commencement of the Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) (Amendment and Validating Provisions) Act, 1983, and such agreement was not presented for registration or was presented for registration but its execution was not admitted before the registration officer by the person concerned, before the commencement of the said Act, then such document may be presented at the proper registration office for registration, 46 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:52 ::: JUDGEMENT-WP. 798-05, 414-05.doc and its execution may be admitted, by any of the persons concerned referred to above in this sub-section, on or before the 31st December 1984, and the registering officer shall accept such document for registration, and register it under the Registration Act, as if it were presented, and its execution was admitted, within the time laid down in the Registration Act;
Provided further that, on presenting a document for registration as aforesaid if the person executing such document or his representative, assign or agent does not appear before the registering officer and admit the execution of the document, the registering officer shall cause a summons to be issued under section 36 of the Registration Act requiring the executant to appear at the Registration office, either in person or by duly authorised agent, at a time fixed in the summons. If the executant fails to appear in compliance with the summons, the execution of the document shall be deemed to be admitted by him and the registering officer may proceed to register the document accordingly. If the executant appears before the registering officer as required by the summons but denies execution of the document, the registering officer shall, after giving him reasonable opportunity of being heard, if satisfied that the document has been executed by him, proceed to register the document accordingly."
"11. Promoter to convey title, etc., and execute documents according to agreement.-
(1) A promoter shall take all necessary steps to complete his title and convey, to the organisation of persons, who take flats, which is registered either as a co-
operative society or as a company as aforesaid, or to an association of flat takers [or apartment owners], his right, title and interest in the land and building, and execute all relevant documents therefor in 47 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:52 ::: JUDGEMENT-WP. 798-05, 414-05.doc accordance with the agreement executed under section 4 and if no period for the execution of the conveyance is agreed upon, he shall execute the conveyance within the prescribed period and also deliver all documents of title relating to the property which may be in his possession or power.
(2) It shall be the duty of the promoter to file with the Competent Authority, within the prescribed period, a copy of the conveyance executed by him under sub- section (1).
(3) If the promoter fails to execute the conveyance in favour of the Co-operative society formed under section 10 or, as the case may be, the Company or the association of members of such co-operative society or, as the case may be, the Company or the association of apartment owners may, make an application, in writing, to the concerned Competent Authority accompanied by the true copies of the registered agreements for sale, executed with the promoter by each individual member of the society or the Company or the occupation certificate, if any, for issuing a certificate that such society, or as the case may be, company or association, is entitled to have an unilateral deemed conveyance, executed in their favour and to have it registered.
(4) The Competent Authority, on receiving such application, within reasonable time and in any case not later than six months, after making such enquiry as deemed necessary and after verifying the authenticity of the documents submitted and after giving the promoter a reasonable opportunity of being heard, on being satisfied that it is a fit case for issuing such certificate, shall issue a certificate to the Sub-Registrar or any other appropriate Registration Officer under the Registration Act, 1908 (16 of 48 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:52 ::: JUDGEMENT-WP. 798-05, 414-05.doc 1908), certifying that it is a fit case for enforcing unilateral execution of conveyance deed conveying the right, title and interest of the promoter in the land and building in favour of the applicant, as deemed conveyance.
(5) On submission by such society or as the case may be, the company or the association of apartment owners, to the Sub-Registrar or the concerned appropriate Registration Officer appointed under the Registration Act, 1908, the certificate issued by the Competent Authority alongwith the unilateral instrument of conveyance, the Sub-Registrar or the concerned appropriate registration Officer shall, notwithstanding anything contained in the Registration Act, 1908 (16 of 1908), issue summons to the promoter to show cause why, such unilateral instrument should not be registered as 'deemed conveyance' and after giving the promoter and the applicants a reasonable opportunity of being heard, may, on being satisfied that it was a fit case for unilateral conveyance, register that instrument as 'deemed conveyance'.' Apartment Act "2. Application of the Act.- This Act applies only to property, the sole owner or all of the owners of which submit the same to the provisions of this Act by duly executing and registering a Declaration as hereinafter provided:
Provided that, no property shall be submitted to the provisions of this Act, unless it is used or proposed to be used for residence, office, practice of 49 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:52 ::: JUDGEMENT-WP. 798-05, 414-05.doc any profession or for carrying on any occupation, trade or business or for any other type of independent use :
Provided further that the sole owner or all the owners of the land may submit such land to the provisions of this Act with a condition that he or they shall grant a lease of such land to the apartment owners, terms and conditions of the lease being disclosed in the Declaration either by annexing a copy of the instrument of lease to be executed to the Declaration or otherwise."
"6. Common areas and facilities (1) Each apartment owner shall be entitled to an undivided interest in the common areas and facilities in the percentage expressed in the Declaration. Such percentage shall be computed by taking as a basis the value of the apartment in relation to the value of the property and such percentage shall reflect the limited common areas and facilities.
(2) The percentage of the undivided interest of each apartment owner in the common areas and facilities as expressed in the Declaration shall have a permanent character, and shall not be altered without the consent of all of the apartment owners expressed in an amended Declaration duly executed and registered as provided in this Act. The percentage of the undivided interest in the common areas and facilities shall not be separated from the apartment to which it appertains, and shall be deemed to be conveyed or encumbered with the apartment even though such interest is not expressly mentioned in the conveyance or other instrument.
(3) The common areas and facilities shall remain 50 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:52 ::: JUDGEMENT-WP. 798-05, 414-05.doc undivided and no apartment owner or any other person shall bring any action for partition or division of any part thereof, unless the property has been removed from the provisions of this Act as provided in sections 14 and 22. Any covenant to the contrary shall be null and void.
(4) Each apartment owner may use the common areas and facilities in accordance with the purpose for which they are intended without hindering or encroaching upon the lawful rights of the other apartment owners.
(5) The necessary work of maintenance, repair and replacement of the common areas and facilities and the making of any additions or improvements thereto shall be carried out only as provided herein and in the bye-laws.
(6) The Association of Apartment Owners shall have the irrevocable right, to be exercised by the Manager or Board of Managers, to have access to each apartment from time to time during reasonable hours as may be necessary for the maintenance, repairs and replacement of any of the common areas and facilities therein or accessible therefrom, or for making emergency repairs therein necessary to prevent damage to the common areas and facilities or to another apartment or apartments."
"11. Contents of Declaration.-
(1) The Declaration shall contain the following particulars, namely :-
(a) Description of the land on which the building an improvements are or are to be located; and whether the land is freehold or leasehold and whether any 51 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:52 ::: JUDGEMENT-WP. 798-05, 414-05.doc lease of the land is to be granted in accordance with the second proviso to section 2 of this Act;
(b) Description of the building stating the number of storeys and basements, the number of apartments and the principal materials of which it is or is to be constructed;
(c) The apartment number of each apartment, and a statement of its location, approximate area, number of rooms, and immediate common area to which it has access, and any other date necessary for its proper identification;
(d) Description of the common areas and facilities;
(e) Description of the limited common areas and facilities, if any, stating to which apartments their use is reserved;
(f) Value of the property and of each apartment, and the percentage of undivided interest in the common areas and facilities, appertaining to each apartment and its owner for all purposes, including voting; and a statement that the apartment and such percentage of undivided interest are not encumbered in any manner whatsoever on the date of the Declaration;
(g) Statement of the purposes for which the building and each of the apartments are intended and restricted as to use;
(h) The name of a person to receive service of process in the cases hereinafter provided, together with the residence or place of business of such person which shall be within the city, town or village in which the building is located;52 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:52 :::
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(i) Provision as to the percentage of votes by the apartment owners which shall be determinative of whether to rebuild, repair, restore, or sell the property in the event of damage or destruction of all or part of the property;
(j) Any other details in connection with the property which the person executing the Declaration may seem desirable to set forth consistent with this Act;
(k) The method by which the Declaration may be amended, consistent with the provisions of this Act. (2) A true copy of each of the Declaration and bye-laws and all amendments to the Declaration or the bye-laws shall be filed in the office of the competent authority."
40. A perusal of the declaration in the present case shows that it is clearly a hurriedly executed document, which violates rights of the flat purchasers under the MOFA Act and the Apartment Act. Section 4(1)(v) of the MOFA Act specifically provides that the agreement between the flat purchaser and the developer shall specify the precise nature of organisation to be constituted of the persons who take the flats. While various clauses of the agreement in the present case, quoted above, show that it was specified that a Cooperative Society would be formed, but, the hurriedly executed declaration violates this specification. Section 11(1) of the MOFA Act provides that the promoter (developer in the present case) shall take all 53 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:52 ::: JUDGEMENT-WP. 798-05, 414-05.doc necessary steps and execute all relevant documents to convey title to the organisation of persons in accordance with the agreement under Section 4 of the MOFA Act. As stated above, in terms of the agreements entered into between the respondent developer and flat purchasers, such organisation of persons was to be a Cooperative Society. The hurriedly executed declaration by the respondent developer and the owner, by catching hold of five flat purchasers, violated the said mandate and hence it cannot be held to be a valid declaration in law.
41. Apart from this, the declaration does violence to Sections 6 and 11 of the Apartment Act, as it does not fully disclose the extent of common areas and facilities available to the flat purchasers, because it does not disclose the common areas retained by the respondent developer. In fact, it is a unilaterally executed document, which takes away the right of the flat purchasers to be able to determine such use of common areas and facilities by formation of Cooperative Society, which, in fact, was contemplated in the agreement that they signed with the respondent developer. There is substance in the contention of the petitioners that the declaration dated 54 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:52 ::: JUDGEMENT-WP. 798-05, 414-05.doc 27.12.1999, executed by the Respondent Developer and the land owner violates second proviso to Section 2 of the Apartment Act, as it specifies that the owner will grant lease of the land to apartment owners and terms and conditions of such lease shall be disclosed in the declaration, which has not been done in the present case. Hence, the said declaration cannot be said to be 'a declaration as provided under the Apartment Act' as contemplated under Section 10(2) of the MOFA Act. Consequently, it could not have rendered unlawful, the formation of Cooperative Societies by flat purchasers/members of the petitioner Cooperative Societies.
42. As noted hereinabove, facts in the present case show that in Writ Petition No. 798 of 2005, there are 244 flat purchasers who are members of the Cooperative Society, while in Writ Petition No. 414 of 2005, there are 52 flat purchaser members. As opposed to this, only 33 flat purchasers are members of the Apartment Association contemplated in the hurriedly executed declaration and even they are paying monthly charges to the Cooperative Societies. These Cooperative Societies have been functioning for the benefit of the flat purchasers/members for more than 17 years.
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43. Thus, an overwhelming majority of the flat purchasers have opted for and formed Cooperative Societies and this aspect cannot be overlooked. The amendment to Article 19(1)(C) by the 97 th amendment of Constitution by addition of the words "Cooperative Societies" is also an aspect that has to be taken into consideration. Even prior to the amendment, the right of the flat purchasers was protected under Article 19(1)(C) of the Constitution. The whole object of the amendment is to further fortify the cooperative movement and the fact that the cooperative spirit has to be encouraged. The Hon'ble Supreme Court in the case of Vipulbhai Vs. Gujarat Cooperative Milk Marketing Federation Ltd. (2015) 8 SCC 1, has noted that a Cooperative is an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise and that Cooperatives are based on the values of self help, self responsibility, democracy, equality, equity and solidarity. The formation of Cooperative Society by the flat purchasers is intended to ensure that they are able to take care of their own welfare and that they are not defendant on the Respondent Developer. This cannot be 56 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:52 ::: JUDGEMENT-WP. 798-05, 414-05.doc permitted to be scuttled by the hurriedly executed declaration by the developer, particularly when the agreements entered into by the developer with the flat purchasers specifically provided for formation of Cooperative Society.
44. We are not discussing the judgments relied upon by the counsel for the parties because they were decided on the facts of the respective cases.
45. As regards the apprehension expressed on behalf of the Respondent Developer that if the Cooperative Society is allowed to persist, the Respondent Developer would find it difficult to undertake construction of proposed additional constructions in the sanctioned layout, it is made clear that the rights of the Respondent Developer would not be adversely affected only because the flat purchasers have formed a Cooperative Society. The rights of the Respondent Developer would be governed by the relevant provisions of law and the agreements executed by the Respondent Developer with the flat purchasers. Therefore, the apprehension of the Respondent Developer is misplaced.
46. In the light of the above, we find that the orders passed 57 / 58 ::: Uploaded on - 08/03/2018 ::: Downloaded on - 09/03/2018 00:42:52 ::: JUDGEMENT-WP. 798-05, 414-05.doc by the appellate authority i.e. the Divisional Joint Registrar and the Revisional Authority i.e. the Minister in the instant case are not sustainable. Accordingly, both the impugned orders are set aside and the orders of the original authority granting registration of Cooperative Societies to the Petitioners are restored. Consequently, the subsequent orders of cancellation of registration of the Petitioner Societies also stand set aside.
47. Rule made absolute in the above terms in both the writ petitions. No order as to costs.
Sd/- Sd/-
[MANISH PITALE, J.] [A. A. SAYED, J.]
Vinayak Halemath
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