Bombay High Court
Gammon Realty Limited vs Bandra Abhijat Co-Op. Hsg. Society Ltd. ... on 23 June, 2022
Author: G.S. Kulkarni
Bench: G.S. Kulkarni
Digitally
signed by
VIDYA
VIDYA SURESH
SURESH AMIN
AMIN Date:
2022.06.28
19:03:01
+0530 1 24.CARBPL12973_2022.doc
Vidya Amin
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL ARBITRATION PETITION (L) NO. 12973 OF 2022
Bandra Abhijat Cooperative Housing Society .. Petitioner
Vs.
Gammon Realty Ltd. & Ors. .. Respondents
WITH
COMMERCIAL ARBITRATION PETITION (L) NO. 13125 OF 2022
Gammon Realty Ltd. .. Petitioner
Vs.
Bandra Abhijat Cooperative Housing Society & Ors. .. Respondents
Mr. J.S. Kini a/w. Ms. Sapna Krishnappa for the petitioner in
CARBPL/12973/2022 and for respondent no. 1 in
CARBPL/13125/2022.
Mr. Deepak Thakare for the petitioner in CARBPL/13125/2022 and for
respondent no. 1 in CARBPL/12973/2022.
Mr. H.T. Pawar i/b/ Yandesh Aher for respondent nos. 2 and 3 in
CARBPL/12973/2022 and CARBPL/13125/2022.
Mr. Rajesh M. Yadav for respondent no. 4 in CARBPL/12973/2022 and
CARBPL/13125/2022.
Ms. Swati Sawant for respondent no. 5 in both the matters.
CORAM : G.S. KULKARNI, J.
DATE : JUNE 23, 2022.
P.C.:
1. Both the petitions are filed under section 9 of the Arbitration and Conciliation Act, 1996 (for short "the Act"). Commercial Arbitration Petition (L) No. 12973 of 2022 is filed by a Cooperative Housing Society and Commercial Arbitration Petition (L) No. 13125 of 2022 is filed by the developer. The concern and prayers as made in both the petitions are for similar reliefs.
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2. The primary grievance of the petitioners in the present proceeding is in regard to respondent nos. 2 and 3 so also respondent nos. 4 and 5 (who are brother and sister) not vacating their respective premises/tenements and handing over the same to the petitioner/Society for the purpose of redevelopment.
3. The present proceedings were heard by the learned Vacation Judge (Coram : Milind N. Jadhav, J.) on 17 May, 2022 when the following order came to be passed:
"1. Heard.
2. The additional affidavit has been filed on behalf of the Petitioner - society. Mr. Thakare, learned counsel is representing the developer. Mr. Kini, learned counsel for the society submits that Respondent Nos. 2 to 5 shall be treated at par with other members of the society who have vacated the premises. He submits that the corpus fund and transit rent which has been paid to the other members shall be paid to Respondent Nos. 2 to 5 subject to their entitlement. Mr. Kini has brought the cheques to be handed over to the Respondents in Court.
3. Ms. Musale, learned counsel appearing for Respondent Nos. 2 and 3 submits that she has filed affidavit but she will consider filing additional affidavit specifically indicating her claims.
4. Ms. Sawant, learned counsel appearing for Respondent No. 5 submits that she shall file affidavit by 20.05.2022 indicating her claim and entitlement in respect of Flat No. 197. She is directed to serve a copy of her affidavit on her brother i.e. Respondent No. 4.
5. Respondent No. 4 - Mr. Anil Madhukar Naik is present in Court. His sister Respondent No. 5 - Ms. Shaila Madhukar Naik is represented by Advocate Ms. Sawant. Respondent No. 4 submits that he has received corpus of Rs. 6,40,000/- and 3 24.CARBPL12973_2022.doc has no objection if the amount of Rs. 4,80,000/- towards transit rent is given to the Respondent No. 5 who is his real sister so that she can make alternate arrangement for herself and vacate the flat, subject to and without prejudice to his rights and contentions in the subject flat.
6. Respondent Nos. 2 to 5 are directed to inform the Court on affidavit the date on which they shall vacate their respective flats to be handed over to the developer for redevelopment.
7. Stand over to 20th May, 2022 for compliance."
4. Thereafter the proceedings were again listed before the learned Vacation Judge on 20 May, 2022, when the following order was passed:
1. Heard. Perused the order dated 17.05.2022.
2. As against The Respondent Nos. 2 & 3 :-
2.1. Respondent Nos. 2 and 3 have refused to vacate their flats and hand it over to the society for redevelopment. Out of 50 members the Respondent Nos. 2 and 3 are two such members whereas Respondent Nos. 4 and 5 are concerned with one such another flat.
Case of Respondent Nos. 4 and 5 is dealt with separately as they have complied with the order dated 17.05.2022 and filed the necessary undertaking for handing over the flat to the society. 2.2. Mr. Kini appearing for the society submits that the Respondent No. 3 has already received the corpus amount in respect of redevelopment for his flat. He submits that as per the direction contained in the order dated 17.05.2022 he has got the cheques to be handed over the Respondent Nos. 2 and 3 on the one hand and the Respondent No. 5 on the other hand so as to comply with the order. He submits that these payments are at par with the payments made to all other members of the society who have vacated their flats.
2.3. The Respondent Nos. 2 and 3 are present in the court today. Their Advocate is absent. They have tendered an affidavit wherein the undertaking to vacate as directed by this Court in the order dated 17.05.2022 is not filed. They have also orally refused to state the date on which they shall vacate their flats to be handed over to the society for redevelopment. They are the only parties now who are stalling redevelopment. The demeanor of the Respondent Nos. 2 and 3 who are present in court is clearly to the effect that they do not wish to abide by the order passed by this Court. Hence, understandably their Advocate is absent today. The reason given by the Respondent Nos. 2 and 3 is that the Advocate who appeared on 4 24.CARBPL12973_2022.doc the last occasion is unable to attend the Court and their appointed counsel is unwell. It is not unusual for such parties to make this grievance especially when they are faced with an order of the Court to submit undertaking. This Court had made it very clear to Respondent Nos. 2 and 3 that all questions and claims of Respondent Nos. 2 and 3, inter alia, pertaining to claim of interest against the society / developer shall be kept open and to be agitated before the appropriate forum and that they shall not hold the society to ransom in so far as redevelopment is concerned. The Respondent Nos. 2 and 3 who are present in Court today have reiterated their stand and have showed utter disregard and disrespect to the order of the Court. Considering their unusual request of their counsel being unwell, I have no option than to consider their request.
2.4. Respondent Nos. 2 and 3 are occupant of flats and they are the only party who have refused to vacate the same for redevelopment. Their only grouse before me today is that they should have been given the corpus amount in the year 2011 and they are ready and willing to accept the same only if interest is given to them. This stand adopted by Respondent Nos. 2 and 3 is unfortunately illegal. Despite clearly informing the Advocate appearing for them on the last occasion that their claim for interest will be kept alive to be agitated in an appropriate forum, they have defied the order of the court and not filed the undertaking indicating the date on which they shall vacate their flats. However in view of the personal difficulty of their counsel and their Advocate not being available today I am not issuing any notice to them. Liberty is given to the parties to apply during the vacation and / or before the regular Court as deemed appropriate.
3. As against The Respondent Nos. 4 & 5 :
3.1. The Respondent No. 4 and 5 are concerned with one flat (Flat No. 197). The Respondent No. 4 is the brother whereas the Respondent No. 5 is the sister. As directed in the order dated 17.05.2022, Mr. Kini has handed over a cheque of Rs. 4,80,000/-
(transit rent cheque) to the Respondent No. 5 today in court. The Respondent No. 4 does not object to the same. The Respondent No. 5 who is in occupation of the flat has filed an undertaking that she shall abide by the direction given by this Court and vacate the said flat within the period of eight weeks from today. Her undertaking is contained in paragraph 9 of her affidavit dated 18.05.2022. The said undertaking reads thus:-
" 9. ............ I say that after the payment of Rs. 4,80,000/- I undertake to vacate the said flat within the period of 8 weeks from that date."
3.2. Respondent No. 5 submits that the future payment with respect to transit rent will also be given to her. Respondent No. 4 is represented by Advocate and opposes the same. Liberty is given to 5 24.CARBPL12973_2022.doc the Respondent No. 4 as well as 5 to agitate their right for entitlement to the future transit rent amount in respect of the said flat in the appropriate forum. The said dispute is not before this Court and cannot be agitated or adjudicated in this proceedings. 3.3. Mr. Kini and Mr. Thakare, learned Advocates appearing for the society and the developer strongly oppose grant of eight weeks time. They submit that it is a long time and should be curtailed. After much deliberation and taking instructions, learned Advocate appearing for the Respondent No. 5 submits that she will handover vacant possession of the said flat to the society within a period of six weeks from today. The said statement is accepted as an undertaking given to the Court as Respondent No. 5 is present before the Court. 3.4. Respondent No. 4, the brother of Respondent No.5 submits that in so far as this tranche of payment of Rs. 4,80,000/- is concerned, he has no objection if the same is handed over to Respondent No. 5 so that she can look for some accommodation and vacate the subject flat and hand it over to the society for redevelopment. He however submits that the future transit rent should be given to him. The contentions of both the Respondent Nos. 4 and 5 are therefore kept open and both are directed to approach the appropriate forum to decide their entitlement in respect of the subject flat. Mr. Kini submits that Respondent No. 4 is the member of the society which position Respondent No. 5 seriously disputes. Hence, both the Respondents are directed to approach the appropriate forum and seek resolution before the date for payment of the next tranche of transit rent becomes viable and / or the date for signing of the permanent alternate accommodation agreement with the developer arises.
4. As seen now, save and except Respondent Nos. 2 and 3 who are brothers, all other members of the society have vacated their subject flats and Respondent No. 5 has also agreed to vacate the flat occupied by her. Now therefore it is only Respondent Nos. 2 and 3 who are holding up redevelopment of the society. As recorded in the order dated 17.05.2022, the developer and the society are committed to pay to the Respondent Nos. 2 and 3 all such amounts as those that have been paid to the other members of the society.
5. Respondent Nos. 2 and 3 have filed affidavit dated 19.05.2022 wherein they have taken an objection on the financial weakness of the Respondent No.1 developer to complete the redevelopment project. They have also alleged that the present petition is a collusive petition between the developer and the society. In compliance of the order dated 17.05.2022 the reply affidavit of the Respondent Nos. 2 and 3 is completely inadequate. They submit that the orders of this Court to evict non-cooperating members apply only to builders and do not apply to the present case. In paragraph 6 of their affidavit, the answering Respondents seek to have a fishing and roving inquiry which is not germane to the matter in hand. All that they say is the Respondent No. 1 is 6 24.CARBPL12973_2022.doc financially weak to complete the project. However this is not the submission which they had made on 17.05.2022 through their Advocate. On that date the Respondent Nos. 2 and 3 categorically submitted that they are ready and willing to vacate provided they are paid interest on the corpus amounts paid by the developer. That submission is nowhere found in the affidavit filed by the answering Respondents on 19.05.2022. However considering that their Advocates are in personal difficulty, I deem it fit to grant one last opportunity to the Respondent Nos. 2 and 3.
6. Liberty to apply before the vacation court / regular court is granted to the parties."
5. Thereafter on 25 May, 2022, the learned Vacation Judge (Madhav J. Jamdar, J.) passed the following order:
1. Defendant No.2 - Pradeep Anant Dabholkar and Defendant No.3
- Jagdish Haribhau Shingote are present in the Court. They state that their advocate is out of town and, therefore, requested to keep the matter after vacation. Hence stand over to 8th June 2022.
2. However at this stage Mrs. Swati Sawant, learned counsel appearing for Respondent No.5 in Petition No.12973 of 2022 states that her client is hcs 2/2 8.carbp12973.22.doc paid rent only for 12 months and she wants to argue certain points and for transit rent for further period. She states that she has not even deposited the first cheque as some arrangement is required to be made for further transit rent.
3. In view of this stand over to 30th May 2022 as far as Respondent Nos.4 and 5 are concerned."
6. Thereafter, on 30 May, 2022 when the proceedings were listed before the learned Vacation Judge, it was submitted on behalf of respondent nos. 4 and 5 that they are ready to sit together and work out the matter so that the redevelopment process can commence. On such backdrop, the proceedings are listed before the Court today.
7. Today, Mr. Pawar, learned counsel for respondent nos. 2 and 3 has 7 24.CARBPL12973_2022.doc taken a fair stand, although his primary contention is in regard to apprehension of his clients on the financial capability of respondent no. 1 to undertake the project. He has submitted that in the original Development Agreement dated 31 December, 2012, there was a clause, being Clause no. 41, which provided for respondent no. 1- developer to furnish a Bank Guarantee of Rupees Five Crores qua the redevelopment project of the petitioner, in the manner as set out in the said clause. It is his contention that in the Addendum Agreement as executed between the petitioner-society and respondent no. 1-developer, such a clause has been deleted, which is prejudicial to the interest of the members of the Society. It is hence his submission that it would be appropriate if the provision of Bank Guarantee is restored and a Bank Guarantee is furnished by respondent no. 1-developer. In support of his contention, Mr. Pawar has placed reliance on the State Government Resolution (GR) dated 4 July, 2019 issued by the Cooperative Department, wherein directions have been issued by the State Government under section 79A of the Maharashtra Cooperative Societies Act (MCS Act). The Court's attention has been drawn to paragraph 18.2 of the GR which provides that in respect of redevelopment project, Bank Guarantee of 20% of the project cost should be furnished to the developer.
8. The contention of Mr. Pawar on the applicability of provisions of 8 24.CARBPL12973_2022.doc the Government Resolution can be first discussed. At the outset, it needs to be stated that the Development Agreement dated 31 December, 2012 is much prior to the said Government Resolution. This part, perusal of the provisions of Section 79A and more particularly, sub-section (3), it is clear that there is discretion with the Registrar of the Cooperative Societies to consider issues in regard to non-compliance of the directions and pass appropriate orders, which may also be to exempt compliance of such directions in a given case. This itself would provide that Clause 18(2) is not sacrosanct and can be modified and/or varied in a situation if so permitted by the Registrar. If that be so, in my opinion, such contention of any mandatory application of the GR in the facts of this case ought not be raised by respondent nos. 2 and 3 in the present proceedings. In any event, all these are issues of disputes between the Society and its members, namely, respondent nos. 2 and 3 and if they intend to raise any such contention, clause 18(10) of the said GRmakes a provision that the members of a Society can invoke the jurisdiction of the Cooperative Court under section 91 of the Act. Hence, such contention cannot be raised by respondent nos. 2 and 3 to stall the redevelopment.
9. In regard to the apprehension urged by Mr. Pawar that respondent no. 1-developer has financial difficulties, hence the petitioner may not 9 24.CARBPL12973_2022.doc be in a position to complete the project, Mr. Deepak Thakare, learned counsel for respondent no. 1, on instructions, makes a statement that his clients have the requisite financial wherewithal to complete the project and respondent no. 1 shall accordingly complete the project without financial difficulties. Such statement as made by Mr. Thakare is accepted as respondent no.1's undertaking to the Court. Mr. Thakare has also stated that the redevelopment work shall be completed within the time period as agreed between the parties under the Development Agreement. Such statement of Mr. Thakare is accepted as respondent no.1's undertaking to the Court. Thus, the said stand of responden tno. 1 takes care of the anxiety of respondent nos. 2 and 3 on such issues. This apart, Mr. Thakare, learned counsel for respondent no. 1 has also stated that two flats in the project shall be kept vacant and no third party rights shall be created on such flats, which shall operate as security to the petitioner-society for compliance of the project work. Such statement of Mr. Thakare also stands accepted as an undertaking to the Court.
10. On such backdrop, Mr. Pawar, learned counsel for respondent nos. 2 and 3 fairly state that his clients shall vacate their respective tenements within a period of four weeks from today. Statement of Mr. Pawar, on instructions of respondent no. 2 and 3, is accepted as undertaking to the Court.
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11. Mr. Kini, learned counsel for the petitioners states that the corpus amount in regard to respondent nos. 2 and 3 has already been received by the Society and a cheque of Rs.6,40,000/- in favour of respondent no. 2 as also in favour of respondent no. 3 has been handed over to Mr. Pawar, learned counsel for respondent nos. 2 and 3 today in the Court, during the course of the hearing. Mr. Pawar has accepted the cheque on behalf of his clients.,
12. Insofar as the payment of rent for temporary alternate accommodation is concerned, advance rent of 12 months shall be handed over to respondent nos. 2 and 3 by respondent no. 1/Society on the day their tenement is being vacated and handed over to respondent no. 1/Society. Such arrangement between the parties is also accepted.
13. Insofar as respondent nos. 4 and 5 are concerned, as noted above, respondent no. 4 is the brother of respondent no. 5. They were jointly occupying tenement/Flat no. 197 in Building no. 4. There is already an agreement in regard to payment of transit rent, which is being shared in equal proportion by respondent nos. 4 and 5. Respondent no. 5 has grievance of corpus fund of Rs.6,40,000/- being already paid by respondent no. 1 to respondent no. 4. If respondent no. 5 has any 11 24.CARBPL12973_2022.doc grievance in that regard, such grievance can be agitated by her in appropriate proceedings so that the rights in that regard can be adjudicated and decided in such proceedings.
14. Today it is an agreed position that respondent no. 5 is occupying tenement no. 197, as earlier it was jointly occupied by respondent nos. 4 and 5. Respondent no. 4 has already vacated. Respondent no. 5 is directed to vacate the tenement within four weeks from today. This shall be subject to all her rights and contentions on regard to the tenement, corpus amount and any other claim she wishes to assert, to be agitated against respondent no. 4 in appropriate proceedings. All such contentions of respondent no. 5 as also of respondent no. 4 are expressly kept open.
15. Needless to observe that admittedly respondent nos. 4 and 5 were jointly occupying tenement no. 197, thus, after completion of the redevelopment project, considering the consistent view taken by the Court in (See : Sai Krupa Cooperative Housing Society Ltd. vs. M/s. Osho Developer & Ors. in Commercial Arbitration Petition (L) No. 1097 of 2022) it would be an obligation of the Society as also the developer to hand over the possession of the redeveloped tenement to respondent nos. 4 and 5 jointly, except, in the event any contrary judgment is 12 24.CARBPL12973_2022.doc delivered by any Competent Court adjudicating the rights inter se between respondent nos. 4 and 5.
16. In view of the above discussion, both the petitions would not require any further adjudication.
17. It needs to be observed that till the completion of redevelopment project, respondent no. 1 shall, without any default, be meticulous in payment of transit rent well in advance to all the members of the Society.
18. Both the petitions accordingly stands disposed of in the above terms. No costs.
[G.S. KULKARNI, J.]