Bombay High Court
Dayalbhai Devjibhai Patel And Anr vs The Malad Sangata Co-Op. Hsg. Soc. Ltd. ... on 6 March, 2019
Author: S.C. Gupte
Bench: S.C. Gupte
sg arbp243-15.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION NO.243 OF 2015
Dayalbhai Devjibhai Patel And Anr. ... Petitioners
Vs.
The Malad Sangata Co-Op. Housing
Society Ltd. And Anr. ... Respondents
.....
Mr. Vijay M. Vaghela, for the Petitioners.
Ms. Vinita Bhende, for Respondent No.1.
Mr. Anil D'Souza, for Respondent No.2.
....
CORAM : S.C. GUPTE, J.
DATED : 6 MARCH, 2019 P.C. :
. Heard learned Counsel for the parties. This arbitration petition, filed under Section 9 of the Arbitration and Conciliation Act, 1996, seeks inter alia an order of appointment of Court Receiver of a building owned by Respondent No.1 Society. The Petitioners require the Court Receiver to take forcible possession of all flats in the redeveloped building of Respondent No.1 Society. In the alternative, an interim restraint order is sought preventing the society and its members from occupying the flats till the occupation certificate is issued by Municipal Corporation of Greater Mumbai ('MCGM'). It is claimed by the Respondents in reply to the motion that an occupation certificate has since been issued by MCGM and possession of the flats has even been handed over to the members of the society in the rehab component of the Pg 1 of 7 ::: Uploaded on - 11/03/2019 ::: Downloaded on - 14/03/2019 00:55:41 ::: sg arbp243-15.doc new building as also the new purchasers of the saleable component of the new building.
2. The disputes between the parties arise out of a development agreement between them. The Petitioners and Respondent No.2 were originally partners in a firm by the name of Navshakti Developers, carrying on the business of builders and developers. The Respondent society, which had 40 members at the relevant time, has been the owner of the suit plot and building. For redevelopment of its building, a development agreement was entered into by the Respondent society with Navshakti Developers. Respondent No.2 was appointed as a sole architect by the society for the redevelopment project. It is submitted that on account of various acts of fraud and breach of contract committed by Respondent No.2 in respect of his commitments towards the project, the Petitioners were compelled to dissolve the partnership of Navshakti Developers with effect from 23 December 2010. It is submitted that though the partnership firm was dissolved, the unfinished work of the partnership, concerning the redevelopment project, has been sought to be completed unauthorisedly by the Respondents in collusion with each other. It is submitted that Respondent No.2 is attempting to put dummy buyers in possession of the new flats, which form part of the sale component of the project. It is claimed in the petition that an order was sought by the Petitioners herein from this Court in their arbitration petition (Arbitration Petition (L) No.1413 of 2010) on 2 February 2011 restraining the Respondents herein from creating any further rights over the premises, forming part of the sale component. The Respondents have, however, proceeded to take forcible possession of nearly 40 flats Pg 2 of 7 ::: Uploaded on - 11/03/2019 ::: Downloaded on - 14/03/2019 00:55:41 ::: sg arbp243-15.doc and carry out unauthorised alterations/additions in the flats beyond approval, thus, making it impossible for MCGM to issue any occupation certificate (obtaining of such occupation certificate being the responsibility of Navshakti Developers and their partners). It is submitted that the disputes between the Petitioners on the one hand and Respondent No.2 on the other, concerning the business of the partnership, including the subject redevelopment project, have been the subject matter of a separate arbitration reference, where interim directions have been passed under Section 17 of the Arbitration and Conciliation Act, 1996. The main grievance in the petition, which has purportedly prompted the Petitioners to file the present petition, is that the Respondents have been in the process of introducing dummy buyers as purchasers of the new flats as part of a criminal design to cheat the genuine buyers, who had purchased flat/shop premises from the Petitioners. The Petitioners' immediate grievance is that the Respondent Society would proceed to issue share certificates and handover possession of Flat Nos. 301-A, 302-A, Shop No. 411, 412 and 413 and Office No. 101-A, 102-A and 103-A to these dummy buyers. In the premises, purportedly claiming a right to invoke an arbitration clause contained in the development agreement, the Petitioners have moved the present petition. According to them, the cause of action for filing of the present petition arose on 25 December 2014.
3. It is pertinent to note that though the petition was filed, accordingly, in early 2015, there has not been any ad-interim order in the petition as of date. What is more important is that several key developments have occurred in the meanwhile, which have an important Pg 3 of 7 ::: Uploaded on - 11/03/2019 ::: Downloaded on - 14/03/2019 00:55:41 ::: sg arbp243-15.doc bearing on the relief sought by the Petitioners in the present petition, some of which are noted below.
4. A writ petition was filed by one of the new purchasers arraigning the society as well as the Petitioners and Respondent No.2 herein, as also the other new purchasers, with whom Respondent No.2 had entered into agreements for sale. At the hearing of this petition, the writ petitioner sought to delete the Petitioners herein from the cause title of the petition and enter into consent terms between himself and all other respondents to the writ petition, including both the Respondents herein and the members of the first Respondent society as well as the new purchasers, relating to flats/shops/offices involved in this writ petition, many of which are the same flats/shops/offices, concerning which grievances have been raised in the present petition. The consent terms between the writ petitioner and the other respondents to the petition inter alia required the new purchasers (Respondent Nos. 44 to 52 and 55 to the writ petition) to pay an aggregate sum of Rs.1.88 crores by 40 separate pay orders of Rs.4.70 lakhs each in favour of each of the members of the first Respondent society upon execution of the consent terms and pay a sum of Rs.30 lakhs to the first Respondent Society. Respondent No.2 herein, for his part, undertook to complete the balance construction of the new building and obtain occupation certificate. The first Respondent Society undertook to admit the writ petitioner as well as the new flat purchasers before the Court (Respondent Nos. 44 to 52 and 55 to the writ petition) and allow them to claim all rights and privileges of members as per the rules and bye-laws of the society. The society and its members took upon themselves not to create any obstruction and Pg 4 of 7 ::: Uploaded on - 11/03/2019 ::: Downloaded on - 14/03/2019 00:55:41 ::: sg arbp243-15.doc interference in the free access and enjoyment of flats by the writ petitioner and other new purchasers (Respondent Nos. 44 to 52 and 55 to the writ petition). These consent terms were accepted by a Division Bench of our Court and an order was passed on 30 January 2015, observing inter alia that the consent terms appeared to be just and reasonable. The writ petition was disposed of in terms of the consent terms. Being aggrieved by the disposal of the writ petition, after they were dropped from the array of the parties and a consent order was obtained behind their back, the Petitioners moved the Division Bench by a chamber summons. That chamber summons (Chamber Summons (L) No.46 of 2015) was disposed of by another Division Bench of this Court on 8 April 2015. The Division Bench was of the view that the Petitioners herein not being parties to the writ petition, which was disposed of in terms of the consent terms signed by the Petitioners and the other Respondents to the writ petition, there was no order necessary on the chamber summons, besides observing that since the Petitioners herein were not parties to the writ petition and to the consent terms and, even otherwise, they were not bound by the consent terms and the consent order. There was no order passed, however, as regards the respective obligations of the parties to the writ petition and the consent order passed therein.
5. It appears that in pursuance of the consent order in the writ petition, the new purchasers have paid off each of the 40 members of the first Respondent society a sum of Rs.4.70 lakhs as also deposited monies with the Respondent Society. Respondent No.2 herein, who was appointed as a developer in terms of the consent terms (since the original Pg 5 of 7 ::: Uploaded on - 11/03/2019 ::: Downloaded on - 14/03/2019 00:55:41 ::: sg arbp243-15.doc developer was not at site as of that date, the firm of Navshakti Developers having been dissolved as noted above), has gone ahead and completed the redevelopment work; the Municipal Corporation of Greater Mumbai has issued an occupation certificate; and thereafter, Respondent No.1 claims at the hearing of the present arbitration petition, possession of flats/shops/offices, concerning which grievance has been expressed in the present petition, has been parted with in favour of the respective purchasers.
6. In this backdrop of events, no order can possibly be passed on the Petitioners' application for appointment of receiver or for an interim injunction. In the first place, primarily, disputes between the Petitioners on the one hand and Respondent No.2 herein on the other, to which the first Respondent society is made a party, are disputes between the partners of the erstwhile firm of Navshakti Developers. The first Respondent society is not really concerned with these disputes. The society and its members, by a private agreement between themselves and Respondent No.2 herein and the new purchasers, have provided for the manner, in which the balance redevelopment work would be carried out, the occupation certificate would be obtained and rights of the new purchasers would be recognised. The Petitioners herein have not been able to obtain any relief qua this arrangement and its implementation thus far. After the parties have gone ahead and more or less completed their respective obligations under the consent order passed by this Court, there is no question of this Court appointing any court receiver at the instance of the Petitioners herein or issue any restraint order concerning occupation or enjoyment of the new flats referred to in the present Pg 6 of 7 ::: Uploaded on - 11/03/2019 ::: Downloaded on - 14/03/2019 00:55:41 ::: sg arbp243-15.doc petition. It is not disputed by the Petitioners that the flats, which came to their share under the inter se arrangement between the partners of Navshakti Developers, and for which they have executed separate agreements for sale with their own purchasers, are not the subject matter of the present petition. Those flats are the subject matter of another dispute pending before another arbitral forum and we are really not concerned with that dispute in the present petition.
7. In the premises, there is no merit in the arbitration petition. The petition is dismissed.
( S.C. GUPTE, J. ) Pg 7 of 7 ::: Uploaded on - 11/03/2019 ::: Downloaded on - 14/03/2019 00:55:41 :::