Karnataka High Court
Columbia Pacific Communities Private ... vs Serene Urbana Apartment Owners Welfare ... on 21 October, 2024
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
1
Reserved on : 10.09.2024
Pronounced on : 21.10.2024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 21ST DAY OF OCTOBER, 2024
BEFORE
THE HON'BLE MR. JUSTICE M. NAGAPRASANNA
WRIT PETITION No.5789 OF 2024 (GM - RES)
BETWEEN:
COLUMBIA PACIFIC COMMUNITIES PRIVATE LIMITED
A COMPANY INCORPORATED UNDER
THE PROVISIONS OF THE COMPANIES ACT, 1956
HAVING ITS CORPORATE OFFICE AT:
2999, 12TH A MAIN ROAD
HAL 2ND STAGE, INDIRANAGAR
BENGAURU - 560 008
REPRESENTED BY ITS
AUTHORISED SIGNATORY
MR.V.SIVA KUMAR.
... PETITIONER
(BY SRI MURALIDHARA C., ADVOCATE)
AND:
1. SERENE URBANA APARTMENT OWNERS
WELFARE ASSOCIATION (REGD.)
COMPANY REGISTERED UNDER
THE COMPANIES ACT, 1956
HAVING OFFICE AT: (OZONE URBANA CAMPUS)
2
KANNAMANGALA VILLAGE
KASABA HOBLI,
DEVANAHALLI TALUK
BENGALURU - 562 110.
2. M/S OZONE URBANA INFRA DEVELOPERS PVT. LTD.,
COMPANY REGISTERED UNDER
THE COMPANIES ACT, 1956
HAVING OFFICE AT: 38, ULSOOR ROAD
YELLAPPA GARDEN
YELLAPPA CHETTY LAYOUT,
SIVANCHETTI GARDENS,
BENGALURU - 560 042.
3. M/S. COVAI PROPERTY CENRE (INDIA) PVT. LTD.,
COMPANY REGISTERED UNDER
THE COMPANIES ACT, 1956
HAVING OFFICE AT: COVAI CARE TOWER
3RD FLOOR, GEM NIRMAALAYAM
V.G.RAO NAGAR,
GANAPATHY, COIMBATORE - 64100.
4. M/S. COVAI SENIOR CARE CONSTRUCTIONS PVT. LTD.,
COMPANY REGISTERED UNDER
THE COMPANIES ACT, 1956
HAVING OFFICE AT: COVAI CARE TOWER
3RD FLOOR, GEM NIRMAALAYAM
V.G.RAO NAGAR,
GANAPATHY, COIMBATORE - 64100.
5. M/S. SERENE SENIOR LIVING PRIVATE LIMITED
COMPANY REGISTERED UNDER
THE COMPANIES ACT, 1956
HAVING OFFICE AT: 485,
PANTHEON ROAD
PANTHEON PLAZA, EGMORE
CHENNAI - 600008.
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6. KARNATAKA REAL ESTATE
REGULATORY AUTHORITY
HAVING OFFICE AT:
SILVER JUBILEE BLOCK,
3RD CROSS RD, CSI COMPOUND,
MISSION ROAD,
SAMPANGI RAMA NAGARA
BENGALURU, KARNATAKA - 560 002.
... RESPONDENTS
(BY SRI G.SURIYA NARAYANAN, ADVOCATE FOR C/R-1)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO a) QUASH THE
IMPUGNED ORDER DATED 11/01/2024 (ANNEXURE-A) PASSED BY
THE R6 AUTHORITY HOLDING THAT COMPLAINT NO.
CMP/UR/211027/0008475 FILED BY R1 IS MAINTAINABLE AS
AGAINST THE PETITIONER; b) QUASH THE MEMORANDUM OF
COMPLAINT (ANNEXURE-B) UNDER SECTION 31 OF THE REAL
ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016 READ WITH
SECTION 29 OF THE KARNATAKA REAL ESTATE (REGULATION AND
DEVELOPMENT) RULES, 2017 FILED BY R1 AGAINST THE
PETITIONER PENDING BEFORE THE R6 AUTHORITY.
THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED
FOR ORDERS ON 10.09.2024, COMING ON FOR PRONOUNCEMENT
THIS DAY, THE COURT MADE THE FOLLOWING:-
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CORAM: THE HON'BLE MR JUSTICE M.NAGAPRASANNA
CAV ORDER
The petitioner/Columbia Pacific Communities Private Limited,
a company incorporated under the provisions of the Companies Act,
1956 is knocking at the doors of this Court calling in question an
interim order dated 11-01-2024 passed by the Karnataka Real
Estate Regulatory Authority ('RERA' for short) in
No.CMP/UR/211027/0008475 and seeking a declaration that the
petition filed by the 1st respondent before the RERA is not
maintainable qua the petitioner / 5th respondent.
2. Heard Sri C. Muralidhara, learned counsel appearing for the
petitioner and Sri G. Suriya Narayanan, learned counsel appearing
for respondent No.1.
3. Facts, in brief, germane are as follows:-
The petitioner is said to be a company engaged in the
business of providing specialized senior care services and is said to
be well known for development and maintenance of retirement
communities across the country. The petitioner / company was
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incorporated in the year 2009 and is said to be experienced senior
living community services provider. Serene Urbana (hereinafter
referred to as 'the Community' for convenience) is a part of Ozone
Urbana developed by the 2nd respondent as an integrated township,
which developed the subject property with a view to offer senior
citizens tranquillity and serenity in the City. The 1st respondent, a
Society registered under the Karnataka Societies Registration Act,
1960, registers a complaint before the 6th respondent/RERA. In the
said complaint there were several respondents. The 5th respondent
is the present petitioner. On registration of the complaint, the
petitioner had knocked at the doors of this Court in Writ Petition
No.8368 of 2022 contending that the petitioner has nothing to do
with the dispute between the complainant and the developer or any
other entity. The petitioner was only a service provider. Therefore,
the complaint against the petitioner was not maintainable. This
Court on the preliminary objection raised by the petitioner
regarding maintainability directed it to be decided at the threshold
and remitted the matter to the hands of the RERA. The RERA by
the impugned order holds that the complaint against the petitioner
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as well, is maintainable among others. The petitioner is back to the
doors of this Court in the subject petition.
4. The learned counsel for the petitioner would contend that
the dispute is between the developer - Ozone Urbana Infra
Developers Private Limited or any other entity with the complainant
before the RERA. The complainant before RERA is the Serene
Urbana Apartment Owners Welfare Association. They have a
working dispute with regard to several development issues. There
is no contract between the complainant before the RERA and the
petitioner. The petitioner has a contract with Ozone Urbana for
providing services. Therefore, it should not be brought within the
ambit of the RERA to contend that they are liable for
implementation of orders that are passed by the RERA.
5. Per contra, the learned counsel appearing for the
complainant/1st respondent or even the 4th respondent - M/s Covai
Senior Care Constructions Private Limited would vehemently refute
the submissions to contend that the 1st respondent has admitted in
the written submission that the confirming party, the 4th respondent
therein was the initial service provider who has transferred the
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entire corpus to the 5th respondent instead of it being transferred to
the Association of Allottees and the petitioner is collecting charges
like common area maintenance charges, month on month from the
apartment owners and the 5th respondent is said to be under
personalized services to individual apartment owners, pursuant to
service agreement entered into with individual apartment owners.
Therefore, he would contend that the dispute cannot be decided
without the petitioner/5th respondent to be a party to those
proceedings. He would seek dismissal of the petition as all the
grounds urged in the present petition can as well be urged before
the RERA and the RERA is yet to pass any final order in the matter.
6. I have given my anxious consideration to the submissions
made by the respective learned counsel and have perused the
material on record.
7. What drove the complainant to the RERA is necessary to be
noticed. The complaint is by Serene Urbana Apartment Owners
Welfare Association/1st respondent. The prayer in the complaint are
as follows:
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"WHEREFORE, the Complainants humbly pray that this
Hon'ble Authority be pleased to pass the following orders in
the interest of equity and justice to the ageing Senior
Citizens Community.
(a) Declare the Serene Urbana Project as an "On-going
project" and initiate penalty proceedings as stipulated
under Section 59(1) & 62 of RERA Act, 2016
respectively.
(b) Direct the Respondent No.1 and Respondent No.3, 4,
& 5 to immediately register under the provisions of
RERA Act, 2016 as an on-going Project.
(c) Declare the Deed of Declaration dated 21-05-2016
registered by Respondent No.1 as null and void.
(d) Declare the Rectification Deed dated 08-02-2018
registered by Respondent No.1 as null and void.
(e) Declare the 2 Sale Deeds executed and registered by
Respondent No.1 in favour of M/s. Serene Senior Care
Private Limited (now M/s. CPC the respondent No.5)
as null and void.
(f) Direct the Respondent No.1 to complete all the
incomplete works on priority as listed in Annexure-H.
(g) Direct the Respondent No.1 to reimburse the amount
of expenditure of nearly Rs.23/- lakhs incurred by the
Owners out of the Corpus Fund from 2018 to 2021
towards completion/rectification of improperly
completed safety related works prematurely taken
over by respondent No.5.
(h) Direct the respondent No.1 to obtain the legally valid
Completion Certificate/OC & 'A' Khata from Competent
Local Authority after completion of all the presently
incomplete works.
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(i) Direct the Respondent No.1 to Form an Association of
Homebuyers and get it registered under the provisions
of the relevant Act.
(j) Direct the Respondent No.1 to transfer the control of
the management and maintenance of the "Serene
Urbana Project" as stipulated under Clause No.35 of
the Registered Bye-laws of the Serene Urbana
Homebuyers Association to the legally formed
Association before the CAM charges are collected from
the owners.
(k) Direct the Respondent No.1 to transfer the title of the
Property along with all infrastructures and assets in
favour of the legally formed Association as required
under Section 17 of the Act.
(l) Direct the Respondent No.1 to transfer the Corpus
Fund of Rs.3.69 crores along with the due accrued
interest to the legally formed Association.
(m) Direct the Respondent No.1 to make the committed
Delivery Delay Compensation (DDC) payment along
with due accrued interest to all the partially-paid and
unpaid owners.
(n) Direct the Respondent No.4 and 5 to refund the
Interest Free Returnable Deposit amount collected
during end-2014 to early 2015 from the individual
Apart Owners by M/s. SSCPL presently M/s. CPC the
respondent No.5 along with due accrued interest.
(o) Direct the Respondent Nos. 1, 4 and 5 to immediately
refund the CAM charges already collected till date to
all Apartment Owners with eligible interest.
(p) Direct Respondent No.1 to carry out proper
demarcation of Serene Urbana Land area of 4 acres
and 20 guntas and provide a Physical Security fencing
on the 'southside of Serene Urbana' between the two
projects Serene Urbana and IRENE, opening of the
Entry/Exist Road from the 40 M Road of Ozona
Campus, belonging to Serene Urbana at South East
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side (near STP) for the exclusive use of the Serene
Urbana Apartment Owners as per the approved layout.
(q) Direct the Respondent No.1 to compensate the capital
cost to the Serene Urbana Apartment Owners for the
illegal sharing of the infrastructure like WTP and STP
situated in the land area of Serene Urbana, for the use
of IRENE Project Blocks - A, B & C.
(r) Direct the Respondent No.5 to compensate/share the
O & M and repair costs of WTP &STP incurred towards
servicing the requirements of the IRENE Project Blocks
- A, B & C with the Serene Urbana Apartment Owners.
(s) Restrain M/s. Columbia Pacific Communities
Private Limited, the Respondent No.5 from
mortgaging the land, infrastructure and assets
illegally bought over in terms of the sale Deeds
dated 09-02-2018 and also restrain the
Respondent from selling the assets as above to
any third party, till disposal of this complaint.
(t) In view of the items (e) and (s) above, direct
M/s. Columbia Pacific Communities Private
Limited the Respondent No.5 from showing the
'depreciation of the above assets' in their
Balance Sheet with immediate effect and also
rectify the earlier Balance Sheets since 09-02-
2018.
(u) Direct M/s. Columbia Pacific Communities
Private Limited, the Respondent No.5. from
increasing the current CAM and other Service
charges till all the issues concerning them with
respect to "Serene Urbana project" are sorted
out.
(v) Direct the Respondent to reimburse the cost of
litigation and
(w) Pass any other orders and/or directions as deemed fit
by this Hon'ble Authority in the facts and
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circumstances of the case in the interest of equity and
justice to elderly senior citizens."
(Emphasis added)
Insofar as the petitioner is concerned, three prayers that are sought
are at Sl.Nos.(s), (t) and (u) supra. The prayers are to restrain the
petitioner from mortgaging the land, infrastructure and assets;
show their balance sheet and restrain the petitioner from increasing
the current common area maintenance charges till the issue
concerning them with regard to Serene Urbana Project is sorted
out.
8. The pleadings and the prayer would clearly indicate that
the dispute is between Ozone Urbana Infra Developers Private
Limited - project developer and the Apartment Owners Welfare
Association as prayers (a) to (r) all point against other respondents.
The ancillary prayers that are sought in the case at hand are
against the petitioner. Therefore, it was a dispute purely between
the Apartment Owners Welfare Association, the Developer and the
other respondents. The petitioner approached this Court for them
being made a party to the proceedings, in Writ Petition No.8368 of
12
2022. This Court disposed of the petition on 11-09-2023 by the
following order:
"Learned counsel for the petitioner submits that the
petitioner is a service provider and therefore the petitioner could
not have been impleaded as a respondent in a proceedings
under the provisions of the Real Estate (Regulation and
Development) Act, 2016 (for short 'the RERA Act').
2. However, learned counsel for the respondents submits
that it is not the case of the respondents that the petitioner is a
service provider, sufficient grounds are made out to proceed
against the petitioner.
3. In the considered opinion of this Court, the authority is
required to consider the objections of the petitioner as
preliminary objection regarding maintainability of the
proceedings insofar as the petitioner herein is concerned and
sufficient opportunity should be available to all the parties
concerned to have their say in the matter.
4. In that view of the matter, the writ petition
stands disposed of requesting the regulatory authority to
consider the preliminary objection raised by the
petitioner regarding maintainability of the petition
against the petitioner under the provisions of the Act,
2016 and thereafter pass orders on the said issue. A issue
is also sought to be raised at the hand of the petitioner
that the authority has no power to cancel the sale deed or
to declare that the sale deed is null and void. All
contentions are kept open. The petitioner should be
permitted to raise all contentions and the question of
maintainability of the proceedings should be taken up as
a preliminary issue.
Ordered accordingly."
(Emphasis supplied)
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The petitioner sought a direction to the RERA to decide the issue of
maintainability of the complaint against it, the 5th respondent
before the RERA. This Court disposed of the petition with a
direction to decide the said issue at the threshold. The RERA after
the matter was remitted back to its hands, passes the following
order on 11th January, 2024:
"FINDINGS
23. From the materials available on record it is apparent
that the agreement of sale, construction agreement, service
agreement and the sale deeds that the confirming party in all
the 4 documents M/s Sarene Senior Living Private Limited, the
respondent No.4 is the service provider.
24. Our findings on Point No.1: From the materials
available on record, it is apparent that the Agreement for
Sale, Construction Agreement, Service Agreement and
the Registered Sale Deed makes it amply clear that the
confirming party in all the 4 documents, M/s.Serene
Senior Living Private Limited, the respondent No.4 is the
service provider authorized to do the maintenance of the
Serene Urbana complex and collect the CAM charges from
the residents and not the respondent No.5, M/s.Columbia
Pacific Communities Private Limited who has been doing
so from April 2017 even before the issue of the
Occupancy Certificate is against the law. Further, it is
established from the 2 Sale Deeds both dated 09.02.2018
that the Common Area amenities and infrastructures in
the "Serene Urbana Project" has been sold to Respondent
No.5 for a valid consideration.
25. However, the 2 sale deeds dated 09-02-2018 does
not indicate any financial transaction details for having paid the
consideration to respondent No.1. Further, the Service
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Agreement and Sale Deed clauses raises an inexplicable
conflict between the respondent No.1, 3 & 4 and 5.
Moreover, the Respondent No.1 has clearly admitted in
the written submission that the confirming party,
respondent No.4 only is the Service Provider but
transferred the corpus fund to respondent No.5 instead of
the Association of allottees. The documents filed by the
Complainant Association clearly supports the claim of the
Respondent No.5 collecting the Common Area
Maintenance charges (CAM) month after month from the
Apartment Owners whereas the respondent No.5 claims
that only personalized services are provided to the
individual apartment owners pursuant to the Service
Agreement entered with the individual apartment
owners.
26. It is pertinent to note that whether the
Respondent No.5 is a service provider or not, a number of
controversies and contractual disputes exist between the
allottees who are members in the complainant
association and all the Respondents including
Respondent No.5, hence the Respondent No.5 is not only
a necessary party but also a proper party for the proper
adjudication of the present complaint as the Respondent
No.5 is also an allottee and the owner of the Common
Area amenities and infrastructure by virtue of the 2 sale
deeds dated 09.02.2018 executed between the
Respondent No.1 and Respondent No.5 which come under
the definition of 'Common Area' as defined in Section
2(n) of Act, 2016. The allottees who are members in the
complainant association claim that they have paid the cost of
these Common Area amenities and infrastructure as per the
Marketing Brochures/communication, as such Common Area
amenities and infrastructure are required for a Retirement home
conceptualized and designed with some speciality infrastructure,
amenities and facilities to cater to the life style of a particular
category of elderly owners/residents which needs to be decided
on the merits of the case. Accordingly, the point raised above is
answered in the affirmative.
27. Our findings on Point No.2: In view of the above
discussion, we proceed to pass the following:
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ORDER
This complaint No.CMP/UR/211027/0008475 against the respondent No.5 is maintainable."
(Emphasis added) The RERA holds that the complaint against the petitioner is maintainable on the ground that notwithstanding the fact that the 4th respondent therein, the authorized service provider to maintain Serene Urbana Complex and collect CAM charges from the residents and not the petitioner, but the petitioner was the one who is doing it from April, 2017 even before issuance of occupancy certificate and has collected common area maintenance charges for providing common area amenities. This is pursuant to an agreement entered into between the parties / respondents. The agreement so entered into by the petitioner with individual flat owners becomes necessary to be noticed. It is termed as 'Services Agreement'. Except providing services, there is no other obligation on the part of the petitioner with regard to development or other activities of the apartment complex, if the amenities are not provided or the apartment complex is not complete or it was still an on-going project. In the considered view of this Court, the petitioner cannot 16 be hauled up for the liabilities of the owner. As an illustration, a deed of sale with an individual apartment owner is also appended to the petition. Even the said sale deed does not provide any obligation on the part of the petitioner. The sale deed is with Ozone Urbana Infra Developers Private Limited and M/s.Serene Senior Care Private Limited, the 4th respondent. The petitioner is nowhere in the picture. Now for the folly of others, the petitioner is sought to be dragged into these proceedings. In the considered view of the Court, the complaint qua the petitioner who is only a service provider is not maintainable.
9. The 1st respondent / complainant, the Owners Welfare Association has filed its detailed statement of objections. Even the objections nowhere make it obligatory on the part of the petitioner of any wrong doings or misgivings of the developer. The only condition in the sale deeds that are executed is with regard to common area maintenance and the said clause reads as follows:
"COMMON MAINTENANCE As this project "Serene Urbana" is being developed as Retirement Community for Senior/Aged citizens by the Developer and agreed to be maintained by the Confirming Party or its Nominee, the Common Area Maintenance shall be managed by the Confirming Party and the Allottee(s) agrees to 17 pay the pro-rata chares for Common Area Maintenance. All expenses incurred in providing common services shall be taken into account for arriving at common area maintenance expenses to be shared by all the owners/ occupants of the Residential Units in the Project and the frequency of payment of Maintenance charges shall be determined by the Confirming Party/its Nominee Company."
Except the service provider being a confirming party to the sale deed, it is not bound by any other obligation as the obligations are clearly enumerated in the construction agreement itself. The obligations of the confirming party are as follows:
"OBLIGATIONS OF THE CONFIRMING PARTY:
(a) Shall ensure maintenance of the entire project "Serene Urbana" post handover by the Developer as per the terms contained in the Services Agreement.
(b) Shall ensure all the requisite services are provided to the Occupants/Owners of Serene Urbana as per the mutually agreed terms and conditions indicated in the Services Agreement entered between the Allottee(s) and the Confirming Party, provided the Allottee(s) have made the payments as per the Services Agreement.
(c) Shall maintain proper accounts with respect to "Corpus Fund" and other expenses incurred towards Common Area Maintenance".
It restricts to maintain proper accounts with regard to corpus fund incurred towards common area maintenance. Therefore, the 18 dispute is between the respondents and others. The petitioner cannot be made to suffer as being the service provider.
10. For the aforesaid reasons, the following:
ORDER
(i) Writ Petition is allowed.
(ii) The order dated 11th January, 2024 passed by the 6th respondent/ Karnataka Real Estate Regulatory Authority in No.CMP/UR/211027/0008475 stands quashed.
(iii) It is declared that the complaint filed by the 1st respondent against the petitioner is not maintainable before the RERA.
Sd/-
(M. NAGAPRASANNA) JUDGE nvj CT:MJ