Gujarat High Court
Ratnamani Co-Operative Housing ... vs State Of Gujarat on 9 November, 2023
Author: Vaibhavi D. Nanavati
Bench: Vaibhavi D. Nanavati
NEUTRAL CITATION
C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 11314 of 2022
With
CIVIL APPLICATION (FOR AMENDMENT) NO. 3 of 2023
In R/SPECIAL CIVIL APPLICATION NO. 11314 of 2022
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
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1 Whether Reporters of Local Papers may be NO
allowed to see the judgment ?
2 To be referred to the Reporter or not ? NO
3 Whether their Lordships wish to see the fair NO
copy of the judgment ?
4 Whether this case involves a substantial question NO
of law as to the interpretation of the
Constitution of India or any order made
thereunder ?
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RATNAMANI CO-OPERATIVE HOUSING SOCIETY LTD.
THROUGH CHAIRMAN PRAKASHKUMAR GATTTUBHAI SOLANKI
Versus
STATE OF GUJARAT
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Appearance:
MR. YATIN OZA, LEARNED SENIOR COUNSEL with MR. JIT P
PATEL(6994) for the Petitioner(s) No. 1,2
DS AFF.NOT FILED (R) for the Respondent(s) No. 12
MS. JYOTI BHATT, AGP for the Respondent(s) No. 1
MR RUTVIJ R PATEL(10615) for the Respondent(s) No. 10,11,
Page 1 of 42
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NEUTRAL CITATION
C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023
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12.1, 12.3, 13,14,15,16,17,18,4,5,6,7,8,9
MR SATYAM Y CHHAYA(3242) for the Respondent(s) No. 2
MS. NIYATI K JUTHANI(7014) for the Respondent(s) No. 3
NOTICE UNSERVED for the Respondent(s) No. 12.2
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CORAM:HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
Date : 09/11/2023
CAV JUDGMENT
1. With the consent of the learned advocates appearing for the respective parties, the present petition is taken up for final hearing.
2. Issue RULE, returnable forthwith. Learned advocates waive service of Rule for and on behalf of the respective parties.
3. By way of the present Petition under Article-226 of the Constitution of India, the petitioners herein have prayed for the following reliefs:
"(A) Your Lordships may be pleased to allow and admit this petition.
(B) Your lordships may be pleased to issue a writ of mandamus or a writ of certiorari or any other appropriate writ, order or direction directing the respondent no. 2 corporation to take action and initiate proceedings U/s 268 of Gujarat Provincial Municipal Corporation Act, in implementation of Notices dated 19.05.2022 U/s 264 of Gujarat Provincial Municipal Corporation Act, for petitioner society situated at land bearing Survey no.
82, Final Plot No. 198 paiki Admeasuring 4550 Sq. Mrs situated Page 2 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined in TP Scheme No.1 at Mouje Ghatlodia, District Ahmedabad as it being dilapidated, unsafe and dangerous and further be pleased to direct the respondent no.2 corporation to aid assist and ensure handover of peaceful and vacant possession of the subject premises for Redevelopment and reconstruction purpose to petitioner society as per registered MOU dated 20.12.2021. (BB) Your Lordships be pleased to issue a writ of mandamus or any other appropriate writ commanding Respondent no.4 to 18 to hand over vacant and peaceful possession of their flats for the purpose of redevelopment as per Section 41A of the Gujarat Ownerships Flats Act, 1973.
(C) Pending admission hearing and final disposal of the petition your lordships be pleased to restrain the respondent no.4 to 18 from creating any third party rights and further be pleased to issue notice to respondent no.4 to 18 to terminate any leave and license agreements and conveyances for occupancy of their respective residential apartments and further be pleased to restrain the respondent no. 4 to 18 from creating any third party rights and such other acts which may jeopardize the life and safety of the residents as well as cause delay in the subject redevelopment procedure of petitioner society. (D) This Hon'ble court be pleased to pass appropriate orders imposing exemplary costs on the Private respondents in the interest of justice.
(E) Be pleased to pass such other and further orders as may be deemed just and proper looking to the facts and circumstances of the case and in the interest of justice."
4. Heard Mr. Yatin Y. Oza, learned senior counsel assisted by Mr. Jit P. Patel, learned advocate appearing for the petitioners, Ms. Jyoti Bhatt, learned Assistant Government Pleader appearing for the respondent No.1 - State, Mr. Satyam Y. Chhaya, learned advocate appearing for the respondent no.2, Ms. Niyati K. Juthani, learned advocate appearing for the respondent Page 3 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined no.3, Mr. Rutvij R. Patel, learned advocate appearing for the respondent nos. 4 to 18.
5. The petitioner is a cooperative housing society, which has total 96 members. The petitioner society is owner and occupier of land bearing Survey No. 82, Final Plot No. 198 Paiki admeasuring 4550 sq.mtrs. situated in TP Scheme No. 1 at Mouje: Ghatlodia, Dist.: Ahmedabad. The petitioner society is a legal entity having purchased ready constructed 96 residential apartments in the year 1981 - 83 for its members.
6. The petitioner herein is seeking indulgence in directing the respondent Corporation to carry-on its duties as provided under Section 268 of Gujarat Provincial Municipal Corporation Act, 1949 r/w. Gujarat Ownership of Flats Act, 1973 which provides that the respondent Corporation is the concerned authority for the purpose of redevelopment of the societies. The petitioner had further prayed for vacation of non-consenting and objecting members i.e. the private respondents herein from dilapidated flats and getting possession of residential apartments which are due for redevelopment and reconstruction. The Page 4 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined respondent no.3 - Developer upon consent from more than 75% of the members, applied for passing of building plan before the respondent Corporation, wherein, upon survey and scrutiny, the respondent Corporation was pleased to issue Notice on 19.05.2022 u/s. 264 of the Gujarat Provincial Municipal Corporation Act, 1949 (hereinafter referred to as 'the GPMC Act' for the sake of brevity). The petitioner society has been constructed, as per the building plan dated 21.05.1981.
7. Heard Mr. Yatin Oza, learned senior counsel assisted by Mr. Jit Patel, learned advocate appearing for the petitioners. 7.1. Mr. Yatin Oza, learned senior counsel assisted by Mr. Jit Patel, learned advocate appearing for the petitioners submitted that the development permission for existing superstructure i.e. 96 residential units to the society came to be granted on 21.05.1981. Mr. Oza, learned senior counsel submitted that the society passed a resolution on 25.02.2019 and the members were put to notice to get offers from their known and recognized developers for redevelopment of society. Reliance was placed on the newspaper advertisement published on 05.05.2019 and the Page 5 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined developers were invited to give their offers for redevelopment of the society.
7.2. Mr. Oza, learned senior counsel submitted that the resolution came to be passed by the society on 15.03.2019 for publishing advertisement in daily vernacular newspaper for redevelopment of society. On 30.08.2019, pursuant to the newspaper advertisement and out of offers received, offer of Suryam Developers was finalized and for redevelopment 79 members remained present and signed the resolution. 7.3. Mr. Oza, learned senior counsel submitted that the resolution was passed on 14.12.2020 in the meeting with the respondent no.3 - Developer who showed willingness to give a better offer. On 31.12.2020, resolution was passed by the society, wherein, final offer from the respondent no.3 - Developer was called for after making changes as per the discussion. 7.4. Mr. Oza, learned senior counsel submitted that the resolution came to be passed by the society on 30.03.2021, wherein, the final offer of the respondent no.3 came to be accepted. The resolution was passed by the society in its Annual Page 6 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined General Meeting on 19.10.2021 and it was decided by majority of members to enter into MoU with the respondent no.3 and to give consent for redevelopment, whereby, 76 members attended the meeting and signed the resolution.
7.5. Mr. Oza, learned senior counsel submitted that on 20.12.2021, upon finalization of developer, 72 members i.e. 75% of members entered into MoU with the Developer i.e. respondent no.3. The affidavit to the said effect was also relied upon, which are duly produced at Page-190. It was submitted that, additional 9 members who did not remain present on 21.12.2021 also entered into the very same MoU with the Developer and submitted the MoU to the society. In view thereof, total 81 members out of 96 members i.e. 84.37% majority of the members, gave consent and were ready for redevelopment of the society.
7.6. Mr. Oza, learned senior counsel submitted that, after obtaining consent of more than 84% of the members, the respondent no.3 has undertaken necessary procedures and formalities, pursuant to which, on 19.04.2022, the Airport Page 7 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined Authority has granted NOC. The necessary building plans has also been submitted to the Ahmedabad Municipal Corporation (AMC) and the Scheme Opinion has also been given by the AMC on 25.05.2022. The AMC has also granted preliminary Fire NOC to the building plan submitted on 07.06.2022. 7.7. Placing reliance on the aforesaid submissions, Mr. Oza, learned senior counsel submitted that the respondent nos. 4 to 18 be directed to handover vacant and peaceful possession of their plots for the purpose of redevelopment, as per Section 41-A of the Gujarat Flats Ownership Act, 1973.
8. The aforesaid submissions were controverted and were opposed by Mr. Rutvij R. Patel, learned advocate appearing for the private respondent nos. 4 to 18.
8.1. It was submitted by Mr. Patel, learned advocate that the Notice issued by the respondent Corporation under Section 264 of the GPMC Act was for the purpose of repairing of the building. It was submitted that the respondent no.2 itself does not deem it fit that the proceedings under Section 268 of the Act Page 8 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined are required to be put into action. It was submitted that the construction of the building took place in the year 1990 and not in the year 1981.
8.2. It was submitted that the consent which has been obtained by the petitioner society is misleading and insufficient and cannot be said to be free consent. It was also submitted that there are irregularities committed by the petitioners and reliance was placed on few examples with respect to the signature of the members of flats and placing reliance on the same, it was submitted by the petitioner that there were consent of 72 members in the MoU being 75% of the total members, which is so far from truth.
8.3. It was also submitted that, as per the Gujarat Ownership of Flats Act, 1973 (hereinafter referred to as 'the GOF Act, 1973' for the sake of brevity), the Rules have been violated and as per the Rules- 19 to 23, the redevelopment procedure commences only after satisfying the conditions specified under Section 41A of the Act. In the facts of the present case, notice was received on 19.05.2022 and the procedure for redevelopment Page 9 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined commenced 3.25 years earlier.
8.4. Reliance was placed on the procedure defined under the Act and it was submitted that the same has been given a go- by and the petitioners have acted in high handed manner and as per their own will, there was complete disregard with respect to the Rules framed under the GOF Act. It was also submitted that the provisions of the RERA Act are not completely enough in order to satisfy the financial security of the members of the society.
8.5. It was submitted that the builder has entered into MoU for redevelopment with the petitioner society, even when the per-requisite conditions, as mentioned under Section 41A of the GOF Act, had not been satisfied. It was further submitted that the builder himself has put him in a illegal position and thus cannot demand the legalization of the same by abusing the process of law.
8.6. Placing reliance on the aforesaid submissions, it was submitted that the petition deserves to be dismissed, the same being devoid of merits.
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9. Heard Mr. Satyam Chhaya, learned advocate appearing for the respondent no. 2- Ahmedabad Municipal Corporation.
9.1. Mr. Chhaya, learned advocate submitted that the respondent authority has no objection, if the Court were to consider granting of the prayers, commanding the respondent nos. 4 to 18 to handover the vacant and peaceful possession of their flats for the purpose of redevelopment under Section 41 of the GOF Act, 1973, however, the aforesaid may not be directed to the respondent no.2.
10. Heard Ms. Niyati K. Juthani, learned advocate appearing for the respondent No.3 - Developer. 10.1. Ms. Niyati Juthani, learned advocate submitted that the respondent no.3 is a registered and licensed developer engaged in the business of building construction and development work and such license has been issued by the respondent Corporation. The respondent are also in the work of redevelopment of projects, whereby, the desiring society or Page 11 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined members of the society, who seek to reconstruct or redevelop their old or dilapidated buildings, can pursue the redevelopment work, after seeking consent from the members. 10.2. Ms. Juthani, learned advocate submitted that the petitioner society convened a meeting on 25.09.2019 for considering the redevelopment of their housing society, constructed in the year 1981. The petitioner in consensus of the residents had resolved to publish an advertisement to seek bidding from builders / developers for the redevelopment of the petitioner society. The respondent no.3 - the Developer had also placed an offer among other developers. Upon fair comparison and proper scrutiny, the petitioner herein had come to a conclusion that the bid offered by the respondent no.3 is best suited for all the majority of members and accordingly, a resolution dated 21.08.2021 came to be passed, wherein, the developer's bid was considered to be the best and the developer decided to enter in the Memorandum of Understanding (MoU). 10.3. The MoU with the consenting members was more than 75% of the members of the petitioner society, which showed Page 12 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined their readiness and willingness for redevelopment and also to comply with newly enacted and amended laws with regards to redevelopment, which provides that for redevelopment of housing society, when the consenting members are more than 75% than the developer would be ready to invest time and money in the said redevelopment project.
10.4. It was submitted that the respondent no.3 for proposed building plan, obtained development permission and other necessary permissions, such as Fire NOC, No Objection Certificate from Airport Authority and etc. So far as expenses are concerned, the developer would spend approximately Rs.7 to 8 crores towards FSI, plan passing of the building, development permission and registration charges to various authorities including the respondent corporation.
10.5. It was submitted that the petitioner society, in terms of the MoU, which provides for transit accommodation, would be getting additional carpet area and the members of the society will be getting other benefits from the redevelopment project, gift money and etc., and it shall comply with the conditions which Page 13 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined are in consonance with the statutory provisions of the GOF Act, 1973 and amendments made, with regard to the redevelopment therein.
10.6. It was further submitted that for ease of accounting and classification, a special purpose separate partnership firms are floated for each project, and therefore, getting bank guarantee is though not impossible but difficult for a new partnership firm. That the developer has, already as per the MoU, undertaken not to obtain any project finance and that the necessary registration under the RERA Act and Rules will be complied with and further the net worth certificate of the developer would also suffice the concern of the objecting member that the developer is capable to redevelop the project, and therefore, requirement of bank guarantee pales into insignificance and even otherwise, providing the bank guarantee is not mandatory in nature and therefore, objections of the objecting members with regards to the bank guarantee are only based on assumption, apprehension and are hyper technical in nature which are already being taken care of by not obtaining project Page 14 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined finance and by getting the project registered before the Real Estate Regulatory Authority (RERA).
10.7. It was submitted that, the only difficulty being faced by the developer is that the objecting members are extorting the lacunae in the statute by refusing to handover the possession of their flats for redevelopment and such is being done for want of extraneous considerations and the developer is being pursued to satisfy illegal and unreasonable demand of objecting members - respondent nos. 4 to 18 herein in this petition. 10.8. Placing reliance on the aforesaid submissions, it was submitted that the prayers as prayed for by the petitioners herein be allowed and the objecting members be directed to handover the possession of the flats to the respondent no.3 - developer for the purpose of redevelopment.
11. POSITION OF LAW:
11.1. In the case of the Bengal Secretariat Cooperative Land Mortgage Bank and Housing Society Limited v/s. Sri Aloke Kumar & Anr. in Civil Appeal No. 7261 of 2022, wherein the Page 15 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined Hon'ble Apex Court in Para-52 to 58 held as under:
"52. It is not in dispute that the General Body of the Appellant Society, which is supreme, has taken up a conscious decision to redevelop the administrative building. The General Body of the Appellant Society has also resolved to appoint the Hi-Rise as the developer. Those decisions having not been challenged at all, the Respondent No. 1 being a member of the Appellant Society is bound by the said decisions. The General Body of the Appellant Society has approved the terms and conditions of the development agreement by overwhelming majority. Merely because the terms and conditions of the development agreement are not acceptable to the Respondent No. 1, who could be said to be in minuscule minority cannot be the basis of not to abide by the decision of the overwhelming majority of the General Body of the Appellant Society. The redevelopment of the property is necessitated in view of the fact that the building is in a dilapidated condition with passage of time. The redevelopment thus, in our view, would be a requirement and a necessity and cannot be termed as business. The Appellant Society in such circumstances did not even require to carry out any amendment to the bye-laws or to include the "redevelopment of the buildings" as one of the objects of the Society before taking any decision to redevelop its property.
53. By now it is well established position that once a person becomes a member of the Co-operative Society, he loses his individuality with the Society and he has no independent rights except those given to him by the statute and bye-laws. The member has to speak through the Society or rather the Society alone can act and speaks for him qua the rights and duties of the Society as a body (see : Daman Singh v. State of Punjab, reported in (1985) 2 SCC 670 : AIR 1985 SC 973). This view has been followed in the subsequent decision of this Court in the case of State of U.P v. Chheoki Employees Co-operative Society Ltd., reported in (1997) 3 SCC 681 : AIR 1997 SC 1413. In this decision, this Court further observed that the member of a Society has no independent right qua the Society and it is the Society that is entitled to represent as the corporate aggregate. This Court also observed that the stream cannot rise higher than the source. Suffice it to observe that so long as the Resolutions passed by the General Body of the Appellant Society are in force and not overturned by a forum of competent jurisdiction, the said decisions would bind the Respondent No. 1. He cannot be Page 16 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined permitted to take a stand alone position but is bound by the majority decision of the General Body. Notably, the Respondent No. 1 has not challenged the Resolutions passed by the General Body of the Appellant Society to redevelop the property and more so, to appoint the Hi-Rise as the Developer to give him all the redevelopment rights.
54. It was also argued on behalf of the Respondent No. 1 that the property is in a good condition and there is no need to redevelop the existing building. In the first place, as noted earlier, the decision of the General Body of the Society to redevelop the subject property has not been challenged at all. Besides, no provision in the Co-operative Societies Actor the rules or any other legal provision has been brought to our notice which would curtail the right of the Society to redevelop the property when the General Body of the Society intends to do so. Essentially, that is the commercial wisdom of the General Body of the Society. It is not open to the Court to sit over the said wisdom of the General Body as an Appellate Authority. Merely because one single member in minority disapproves of the decision, that cannot be the basis to negate the decision of the General Body, unless it is shown that the decision was the product of fraud or misrepresentation or was opposed to some statutory prohibition. That is not the grievance made before us. In the present case, the General Body took a conscious decision after due deliberations for many years to redevelop its property. Even with regard to the appointment of the "Hi-Rise" as the Developer, the record shows that it was decided by the General Body of the Society after examining the relative merits of the proposals received from the developers.
55. The object of the provision has to be borne in mind. The entire legislative scheme goes to show that the Co-operative Society is to function democratically and the internal democracy of a society, including resolutions passed in accordance with the Act, the Rules, and the bye-laws have to be respected and implemented. The Co-operative Movement is both a theory of life and a system of business. It is a form of voluntary association where individuals unite for mutual aid in the production and distribution of wealth upon principles of equity, reason and common good. It stands for distributive justice and asserts the principle of equality and equity ensuring to all those engaged in the production of wealth a share proportionately commensurate with the degree of their contribution. It provides as a substitute for material assets, honesty and a sense of moral obligation and Page 17 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined keeps in view the moral rather than the material sanction. The movement is thus a great Co-operative movement.
56. The basic principles of co-operation are that the members join as human beings and not as capitalists. The Co-operative Society is a form of organization wherein persons associate together as human beings on the basis of equality for promotion of economic interest of its members. This movement is a method of doing the business or other activities with ethical base. "Each for all and all for each" is the motto of the co-operative movement. This movement not only develops latent business capacities of its members but produces leaders; encourages economic and social virtues, honesty and loyalty, becomes imperative, prospects of better life, obtainable by concerted effort is opened up; the individual realises that there is something more to be sought than mere material gains for himself. So, in fact, it being a business cum moral movement, and the success of the Co-operative Society depends upon the reality with which one of the members work for the achievement of its objects and purpose. The Committee on Co-operation in India emphasized the moral aspect of co- operation, to quote the words:-
"The theory of co-operation is very briefly that an isolated and powerless individual can, by association, with others and by moral development support, obtain in his own degree the material advantages available to wealthy or powerful persons and thereby develop himself to the fullest extent of his natural abilities. By the Union of forces, material advancement is secured and by united action self reliance is fostered and it from the inter-action of these influences that it is hoped to attain the effective realisation of the higher and more prosperous standard of life which has been characterised as better business, better arming and better living; we have found that there is a tendency not only among the outside public but also among supporters of the movement to be little its moral aspect and to regard this as superfluous idealism. Cooperation in actual practice must often fall short of the standard aimed at and details inconsistent with co- operative ideals have often to be accepted in the hope that they may lead to better things. We wish clearly to express that it is the true co-operation alone, that is, to a co-operation which recognises the moral accept of the question that Government must look for the amelioration of the masses and not to a psudo co- operative edifice, however imposing, which is built in ignorance of co- operative principles. The movement is essentially a moral one and it is individualistic rather than socialistic. It provides as Page 18 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined a substitute for material assets honesty and a sense of moral obligation and keeps in view the moral rather than the material sanction. Pages 5 and 6 of Theory and Practice of Co-operation in India and Abroad by Kulkarni, Volume 1. Co-operation is a mode of doing business, is at present applied as the solution of many economic problems. Co-operation is harnessed to almost all forms of economic activity. Though co-operation was introduced in this country as a remedy for rural indebtedness, it has been applied successfully in a wide range of activities such as production, distribution, banking, supply, marketing, housing and insurance. See Theory and Practice of Co-operation in India and Abroad by Kulkarni Volume 1 Page 2."
57. In the overall view of the matter, we are convinced that the impugned judgment and order passed by the High Court is not sustainable in law and deserves to be set aside. At one point of time, we were inclined to allow this appeal by imposing an exemplary costs on the Respondent No. 1 for unnecessarily dragging the Appellant Society into a frivolous litigation & not allowing the Appellant Society to go ahead with the project for the past almost two decades. However, we refrain from passing such order of costs in the hope that the Respondent No. 1 realises that the development of the administrative building will be for the betterment of the society. No individual member is going to gain anything from the redevelopment. It is the society as an autonomous body which will gain something.
58. For the foregoing reasons, this appeal succeeds and is hereby allowed. The impugned judgment and order passed by the High Court is hereby set aside and it shall now be open to the Appellant Society to proceed further with its project of redevelopment in accordance with the resolutions passed by the General Body from time to time. It is needless to clarify that the first priority should be given to demolish the entire building as the same is in a dilapidated condition."
11.2. In the aforesaid facts which are undisputed, it is apposite to refer to the ratio as laid down in the case of Swami Vivekanandnagar Cooperative Housing Society Limited v/s. Page 19 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023
NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined Ahmedabad Municipal Corporation in Special Civil Application No. 8530 of 2019 vide CAV judgment dated 21.06.2022, wherein, this Court observed the following, in Para-49 to 55 which reads thus:
"49. The contention that no mandamus can be issued to the private respondents, as there is no provision for eviction; notably, the petition and prayer in the petition is not against the private respondents in exclusivity, but also seeking direction against the Corporation, which is undoubtedly a statutory body. Now, in view of the development permission granted, this Court in exercise of its powers under Article 226 of the Constitution of India, can very well require the private respondents to handover the possession in furtherance of the development permission more particularly, considering the conditions of the buildings. Moreover, the petition has been filed by the Society, which is registered under the provisions of the Co-operative Societies Act, majority of the members have taken a decision according redevelopment. Perceptibly, the decision of the Society or the body going in redevelopment, has not been assailed by the private respondents before the appropriate forum or has taken any restraint order against the Society. Apt would be the judgment, in the case of Aditya Developers (supra) wherein it has been observed that -
"By now it is well established position that once a person becomes a member of the Cooperative Society, he loses his individuality with the Society and he has no independent rights except those given to him by the statute and Bye-laws. The member has to speak through the Society or rather the Society alone can act and speaks for him qua the rights and duties of the Society as a body".
It has also been observed and held that the members cannot take stand alone position but are bound by the majority decision of the General Body. The learned counsel is right therefore, in contending that the objection raised by the private respondents that there is no privity of contract between the private respondents on one hand and the petitioner-society on the other, is not maintainable. In the present case, it is not disputed that the private respondents are the members of the Society and the Page 20 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined General Body/ Executive Committee of the petitioner - society, if has taken a decision, consisting majority of the members, which is in conformity with the provisions of Section 41A of the Act of 1973, the objection of the private respondents, can hardly be maintained and therefore, it is rejected.
50. In the present case, though no notice has been issued, requiring the demolition of the property, however, the fact remains that there is a notice under Section 264 issued to the Society for carrying out necessary repairs and restrengthening of the building. Additionally, there are reports by the Structural Engineer, so also the soil testing laboratory that the condition of the building is dilapidated and requires urgent and is not fit for its safe use. Advise is also given that considering the damages and the condition of the building, it is desirable to demolish the building and reconstruct the same. Therefore, when there is a opinion by the expert that the building is not safe for its use and it should be reconstructed, there is no reason available to the private respondents to oppose the redevelopment only on the ground that the procedure adopted by the Society, is unjust and improper.
51. So far as the condition of the building is concerned, perceptibly, it is in dilapidated condition and likely to fall, which is supported by the opinions of the experts. It is thereafter that the issue will arise as to whether the procedure has been followed by the petitioner - society going for redevelopment. Some steps were taken by the petitioner - society for the period from February, 2018 to December, 2019 and after the enactment of Section 41A of the Act of 1983, the General Body/Executive Committee has taken a decision with majority of members for redevelopment. Therefore, so far as the requirement as contained in the provisions of Section 41A, stands fulfilled. Once the requirement under Section 41A is fulfilled, the issue then will arise as to whether the procedure as provided under the Rules has been observed by the petitioner - society.
52. So far as the judgments relied upon by the learned counsel appearing for the private respondents and more particularly, the respondent no.9.1, it is required to be noted that there is no quarrel to the proposition that if the manner of doing a particular act is prescribed under any statute, the act must be done in that manner or not at all. Pertinently, the Rules of 1974 are framed in exercise of the powers conferred by clause (e) of Page 21 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined sub-section (2) of Section 44 read with Section 41A of the Act of 1973 and therefore, the rules are statutory in nature and to be adhered to. In the facts of the present case, it can be safely stated that there is substantial compliance of the rules; however, the minor aberrations cannot be fatal to the procedure adopted by the petitioner - society.
53. At this stage, apt would be the judgment in the case of Commissioner of Central Excise, New Delhi (supra). It has been held in paragraph 24, which reads thus:-
"24. The doctrine of substantial compliance is a judicial invention, equitable in nature, designed to avoid hardship in cases where a party does all that can reasonably expected of it, but failed or faulted in some minor or inconsequent aspects which cannot be described as the "essence" or the "substance" of the requirements. Like the concept of "reasonableness", the acceptance or otherwise of a plea of "substantial compliance"
depends upon the facts and circumstances of each case and the purpose and object to be achieved and the context of the prerequisites which are essential to achieve the object and purpose of the rule or the regulation. Such a defence cannot be pleaded if a clear statutory prerequisite which effectuates the object and the purpose of the statute has not been met. Certainly, it means that the Court should determine whether the statute has been followed sufficiently so as to carry out the intent for which the statute was enacted and not a mirror image type of strict compliance. Substantial compliance means "actual compliance in respect to the substance essential to every reasonable objective of the statute" and the court should determine whether the statute has been followed sufficiently so as to carry out the intent of the statute and accomplish the reasonable objectives for which it was passed. Fiscal statute generally seeks to preserve the need to comply strictly with regulatory requirements that are important, especially when a party seeks the benefits of an exemption clause that are important. Substantial compliance of an enactment is insisted, where mandatory and directory requirements are lumped together, for in such a case, if mandatory requirements are complied with, it will be proper to say that the enactment has been substantially complied with notwithstanding the noncompliance of directory requirements. In cases where substantial compliance has been found, there has been actual compliance with the statute, albeit procedurally faulty. The Page 22 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined doctrine of substantial compliance seeks to preserve the need to comply strictly with the conditions or requirements that are important to invoke a tax or duty exemption and to forgive non- compliance for either unimportant and tangential requirements or requirements that are so confusingly or incorrectly written that an earnest effort at compliance should be accepted. The test for determining the applicability of the substantial compliance doctrine has been the subject of a myriad of cases and quite often, the critical question to be examined is whether the requirements relate to the "substance" or "essence" of the statute, if so, strict adherence to those requirements is a precondition to give effect to that doctrine. On the other hand, if the requirements are procedural or directory in that they are not of the "essence" of the thing to be done but are given with a view to the orderly conduct of business, they may be fulfilled by substantial, if not strict compliance. In other words, a mere attempted compliance may not be sufficient, but actual compliance of those factors which are considered as essential."
54. At the cost of repetition, so far as the observance of the provisions of the Act and of the Rules are concerned, pertinently the procedure was adopted by the petitioner - society seeking consent and has got consent of more than 75% of the members and after the enactment/introduction of the provisions of Section 41A of the Act of 1973, the petitioner - society has it its general body meeting dated 16.6.2020 and 12.7.2020, ratified the earlier procedure and therefore, it will not dis-entitle the petitioner - society seeking development. If at all there is some aberration in the procedure, it will be for the appropriate authority to take action. In absence of any challenge to the decision of the general body, so also the development permission, the contention of the private respondents, would be misplaced.
55. In view of the aforementioned discussion, the petition, deserves to be allowed and is accordingly allowed. The petitioner society is permitted to act as per the development permission dated 5.3.2022 and the private respondents are directed to handover the possession of the respective flats for the purpose of redevelopment within a period of eight weeks from the date of the receipt of copy of this CAV judgment. Rule is made absolute to the aforesaid extent. No order as to costs." 11.3. The aforesaid ratio laid down in Special Civil Page 23 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined Application No. 8530 of 2019 vide order dated 21.06.2022 came to be confirmed in Letters Patent Appeal No. 1075 of 2022 in case of Sarojben Kiritbhai Shah since deceased through heirs v/s. Ahmedabad Municipal Corporation vide CAV Judgment dated 23.01.2023. It is apposite to refer to Para-37, 42 to 45, 52 to 54, which reads thus:
"37. In the light of Section 41A of the Gujarat Ownership Flats Act, 1973 having been amended with effect from 21.5.2019, the society convened a general body meeting of its members. After deliberations, the society forwarded consent letters of its members confirming MoU dated 2.4.2019; consenting to give powers to the main committee of the society to undertake the redevelopment activity and also consenting for said amendment being applied to the project in question. On account of concrete slabs of certain houses having fallen down, the society resolved to secure one more report from the structural engineer and as such forwarded a letter on 15.10.2019 to the structural engineer refuting him to forward his report and accordingly, a second report was forwarded on 7.11.2019 whereunder Structural Engineer opined that buildings are in dilapidated condition and stated that immediate attention is required to be given. Respondent No.4 forwarded a communication to the society on 18.12.2019 as to how the rent would be paid to the residential buildings that would be occupied by the members of the society, who would be vacating the existing building and taking on rent different premises for enabling the commencement of redevelopment project by specifying the mode, method and period for which the rent would be paid by the developer. On account of there being a serious threat to the life of the occupants of the building, the society passed a resolution on 1.1.2020 resolving to hand over possession of the flat, occupants' right by signing redevelopment agreement and to hand over to the society, their respective flats for commencement of the rent payable to each member from 1.2.2020.
42. On perusal of entire records and on bestowing our careful Page 24 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined and anxious consideration to the rival contentions raised at the bar, it would emerge therefrom that undisputedly 78 flats were constructed in the year 1971 over the subject property pursuant to the permission granted in the year 1969. It is on account of the physical condition of the building having deteriorated, the society resolved to re-develop the property namely to put up residential building along with commercial building for the benefits of its members. It is in this process, as already noticed hereinabove, meetings came to be held by the society namely by the re-development committee constituted for the said specific purpose, general body meetings of the members were held, the proposed course of action for undertaking re-development was also circulated amongst all the members and as already noticed hereinabove, all the members except four had objected to the same. Even during pendency of the proceedings, three persons have consented for the same except 9th respondent.
43. As on today, 9th respondent who is the member of the Cooperative society, has not raised any dispute before the competent authority raising any grievance with regard to the resolution passed by the committee whereunder the society has resolved to redevelop the property. In fact during the pendency of the petition before the learned Single Judge, re-development permission came to be accorded on 05.03.2021 which has not been challenged by 9th respondent till date. On this short ground itself, present appeal is liable to be dismissed. However, we desist from doing so, inasmuch as learned Senior Counsel appearing for 9th respondent having canvassed several issues as noticed in the arguments addressed on behalf of 9th respondent. It would also be apt to notice at this juncture that society sought for writ of Mandamus to the Corporation to issue license and permission which came to be granted by the learned Single Judge. Hence, further prayer was sought for and said amendment was allowed vide order dated 18.02.2021. This was challenged by 9th respondent in Letters Patent Appeal No. 465 of 2021 and it was withdrawn on 17.06.2021. During the interregnum period, re-development permission (raja-chitthi) came to be issued by AMC and said order dated 05.03.2021 has not been challenged by the appellant namely 9th respondent till date.
44. Thus, except 9th respondent, no other persons are in occupation of the building in the subject property and/or objecting for redevelopment. Even arguments was canvassed that 9th respondent had already shifted from the premises and only for the purposes of litigating the matter before this Court, respondent No.9 claims to have continued to be in possession of Page 25 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined the property. In fact, photographs made available to us during the course of hearing would also persuade us to disbelieve the statement made by the learned Senior Advocate Mr. Yatin Oza, which was to the effect that legal heirs of the appellant are still in physical possession of the flat.
45. Section 41-A of the Gujarat Ownership Flats Act, 1973 enables the re-development of a building. For the purposes of convenience and immediate reference, we extract the said provision and it reads:
"41A. Re-development of flats and apartment. - Notwithstanding anything contained in this Act, any work in relation to the re-development of a building can be carried out on such terms and conditions as may be prescribed, after obtaining the consent of not less than 75 per cent. of the flats owners of such building :
Provided that, in respect of such building, -
(i) a period of twenty - five years must have been completed, from the date of issuance of permission for development by the concerned Authority; or
(ii) the concerned Authority has declared that such building is in ruinous condition, or likely to fall, or in any way dangerous to any person occupying, resorting to or passing by such structure or any other structure or place in the neighbourhood thereof.
Explanation. - For the purpose of this section, the expression "redevelopment" shall be the meaning as assigned to it in relevant Development Control Regulations."
52. At the outset, it requires to be noticed that by calling upon the occupant (respondent No.9) to vacate the premises by issuance of writ of mandamus, there is no order of eviction is passed. The resolution of the general body of members passed by the majority (now all the members having consented for redevelopment except respondent No.9) would indicate that during the period of redevelopment taking place, all the occupants of the existing property who are in occupation of their respective flats would be provided alternate accommodation in a rented premises and rent of the such premises would also be paid by the developer himself. Thus, there is no eviction or dispossession. Eviction in terms of the prevalent rent laws or ejectment of an occupant from the suit property as contemplated under the Transfer of Property Act would mean to dispossess a person in occupation of a premises under the authority of law by putting an end to such right. In other words, eviction means Page 26 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined right to reside or occupy ceasing or such right getting terminated by operation of law. In the instant case, respondent No.9 is neither dispossessed nor evicted but has only been directed to be shifted to an alternate premises which she/they would continue to reside till redevelopment takes place. Temporary shifting of residents of a premises in redevelopment project would not amount to dispossession or eviction as sought to be contended. In fact, appellant is not deprived of the property viz. residential accommodation at all.
53. It would not be out of context also to refer to the fact that appellant has not challenged the development permission dated 5.3.2021 (Raja Chitthi). In fact, she has given her consent for redevelopment and has affixed her signature also to the resolution of the general body of the members dated 16.6.2019 (Annexure-C at Sr.No.18). In the special general meeting held on 7.10.2018 which was specifically convened for the purpose of discussing the redevelopment project, appellant herein participated in the said meeting and has affixed her signature to the minutes of the meeting at Sr.No.23, wehreunder the issues relating to appointment of legal adviser for the redevelopment project, finalising the builder from the offers received for redevelopment and other incidental works came to be discussed and resolution passed thereon. In fact, in the affidavit dated 15.9.2019 filed before the learned Single Judge, she has deposed to the following effect:
"9. I further say and submits that we are neither dissenting from the project of Re-development nor we are opposing the said project, but our only point for disagreeing is related to the allotment of common space of society. In this current re- development scheme, the allotment of common space of society is not being done equally amongst the members of the society and instead it is being done in an irrational way which is the main ground for the respondents to disagree with the allotment of common space of the society. The members who hold 94 sq. var built-up area land would be assigned higher rate of common plot of the society while rest of the members who holds less built-up area of land would be assigned lower rate of common plot of the society which is very irrational and discrimination in nature." (vide pages 431 and 432 of compilation) (emphasis supplied)
54. Having affixed their signatures to the resolutions and having Page 27 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined not questioned the resolutions so passed by taking appropriate steps, respondent Nos.5 to 8 herein as well as the appellant are estopped from contending contrary to the same, inasmuch as they are bound by resolutions for which they have affixed their signatures. Hence, we are of the considered view that no prejudice is caused to the appellant or similarly placed persons as discussed in detail by the learned Single Judge vide paragraph
37. In that view of the matter, we are unable to accept the contentions raised by learned Senior Advocate appearing for the appellant.
For the reasons aforestated, we proceed to pass following:
J U D G M E N T
(i) Letters Patent Appeal No. 1075 of 2022 is hereby dismissed;
(ii) The judgment dated 21.6.2022 passed by the learned Single Judge in Special Civil Application No.8530 of 2019 is affirmed;
(iii) No order as to costs.
(iv) All pending application stands consigned to records."
11.4. In the identical facts, the dispute was with respect to the residence of Anandvihar Society situated at Vastrapur, Ahmedabad and the land belonged to the Gujarat Housing Board, wherein, the original construction was more than 40 years old and in the meeting held by the society, more than 60% members / occupiers have consented to the redevelopment, reconstruction of the society and in continuation of the same, other meetings were held. Out of 132 members, 101 members accepted and signed consent letter including some of the respondents seeking redevelopment of the society and communication dated 29.11.2018 was sent to the Gujarat Housing Board to consider Page 28 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined redevelopment of the society and also for further process of inviting tender. The Gujarat Housing Board has accepted the decision and took the decision to redevelop the society. In the aforesaid set of facts, the said petition came to be allowed by the Court holding that small number of members, holding up redevelopment which has consent of large majority of members, and relied on the ratio as laid down by the Hon'ble Apex Court in Margaret Almedida and others. In view thereof, the aforesaid subject matter was appeal before the Hon'ble Division Bench, wherein, the order passed in Special Civil Application No. 12887 of 2020 dated 14.09.2022 came to be confirmed. It is apposite to refer to Para-8 of the said order passed by the Hon'ble Division Bench in Letters Patent Appeal No. 336 of 2023, which reads thus:
"8. We may note that at the inception of the argument in the present appeal, barring appellant No.3 namely, Chandrakantbhai Shriram Gupta, all other appellants herein have withdrawn the instant appeal and the appeal with respect to them has been dismissed as such on 13.9.2023, The lone appellant who is agitating the land for redevelopment on various grounds raised in the appeal, could not dispute that majority of the members of the society, 82% or more, have consented for redevelopment of the building in question. No dispute could be raised by the learned counsel for the said appellant that the building is more than four decades old and has outlived its life. It has become inhabitable and is posing risk to the residents of the society. In the light of Page 29 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined the above admitted fact, only contention of the learned counsel for the appellant that during the pendency of the civil suit the learned Single Judge could not have directed to carry out redevelopment process, is found misconceived. Moreover, from the above, it is clear that out of 50 plaintiffs, who have filed the civil suit on 28.11.2019, only few remain who seek to press the said suit. The lone appellant herein cannot be permitted to stall the redevelopment process which has already been prolonged for a period of more than 5 years."
ANALYSIS:
12. Considering the submissions advanced by the learned advocates appearing for the respective parties and considering the facts germane for adjudication of the dispute in question, following emerge for the consideration of this Court:
a. The petitioner society comprises of total 96 residential units, for which development permission came to be granted on 21.05.1981 (Pg.30-33).
b. The petitioner society in order to execute and undertake the redevelopment task, held meeting on 25.02.2019, wherein, it was resolved that considering the structure and modern requirements, redevelopment of the society was proposed and it was informed to all the members to get bid offers from their known and recognized developers for redevelopment of the Page 30 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined society (Pg.39).
c. On 15.03.2019, the resolution came to be passed by society for publishing advertisement in daily vernacular newspaper for redevelopment of society (Pg.41). d. On 05.05.2019, the newspaper advertisement was published and developers at large were invited to give their offers for redevelopment of the society (Pg.46). e. On 30.08.2019, Pursuant to newspaper advertisement and out of offers received, offer of Suryam Developers was finalized and for redevelopment 79 members remained present and signed the resolution (pg.353A).
f. On 14.12.2020, resolution was passed in the meeting with the respondent no.3 - developer, for giving a better offer (Pg.37).
g. On 31.12.2020, resolution was passed by the society, wherein, final offer from respondent no.3 - Developer was called for after making changes as per the discussion (Pg.37). Page 31 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023
NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined h. On 30.03.2021, resolution came to be passed by the society, wherein, the final offer of the respondent no.3 came to be accepted (Pg. 44).
i. On 19.10.2021, resolution was passed by the society in its Annual General Meeting and it was decided by majority of members to enter into MoU with the respondent no.3 and to give consent for redevelopment. 76 members attended the meeting and signed the resolution (pg.360A).
j. On 20.12.2021, upon finalizing of developer, 72 members i.e. 75% of members entered into MoU with the Developer i.e. respondent no.3 (pg. 47-90). k. That pending the present petition, additional 9 members who were not able to remain present on 21.12.2021 entered into the very same MoU with the developer and submitted the MoU to the society (page-382). l. Total 81 members out of 96 members i.e. 84.37% majority of the members are consenting and are ready for redevelopment of the society. The offer and understanding in the Page 32 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined MoU is as under:
"1. Against existing carpet area of approx. 57 Sq. yards 106 Sq. yards carpet area will be given which is approx 85% additional carpet area in newly redeveloped project. Therefore, the members having 1 BHK flat would get 3 BHK Flats.
2. Gift Money of Rs. 4,00,000 will be given to each members at the time of possession of new flat which members can use as per their wish for furniture and appliances etc.
3. Transit rent allowance of Rs 15000 Per month till the time of possession of newly constructed flats to each flat.
4. That the project will be completed in approx. 30 Months after getting possession of construction and post getting the project registered under RERA.
5. Rs. 1,00,000/- (One Lakh Rupees) Maintenance Deposit per flat will be given by the Developer which would ease the burden of maintenance of new flat on the existing members.
6. That the Developer will not obtain any kind of Project Finance for the redevelopment project.
7. Stamp Duty and GST and other taxes for the newly constructed flat for the existing members would be paid by the Developer.
8. Newly constructed flats will have all modern amenities like Elevators, Club house, Gym, Earthquake resistant RCC Structure, CCTV Security Coverage, Gas Line Connection and Etc."
13. This Court has also considered the Report by the Civil Engineer dated 28.08.2019 duly produced at Annexure-G alongwith the photographs of the structure of the petitioner society, wherein, it is stated that the said premises are fragmented and dilapidated. The aforesaid is controverted by the advocate appearing for the private respondents and has produced on record the stability certificate (pg. 265) which states that the building is safe and sound. The aforesaid is controverted by the Page 33 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined petitioners herein in Para-6 of the Affidavit in Rejoinder (pg.281). It is reiterated by the respondent no.3 that the aforesaid exercise of redevelopment is undertaken by the respondent no.3, considering the stability with respect to the premises in question. Further, the aforesaid dispute with respect to the structural stability is required to be considered in accordance with the provision of Section 41-A of the GOF Act, 1973 and the ratio as laid down by the Hon'ble Apex Court in Bengal Secretariat Co. (supra), wherein, it has been held that the decision of the general body is based on a report by structural engineers, which remains un-challenged and this Court would not sit in appeal over the report and the decision was taken by the committee based on the said report.
14. Considering the dispute in question, it is apposite to refer Section 41A of the GOF Act, 1973 which reads thus:
"41A. Re-development of flats and apartment. - Notwithstanding anything contained in this Act, any work in relation to the re-development of a building can be carried out on such terms and conditions as may be prescribed, after obtaining the consent of not less than 75 per cent. of the flats owners of such building :
Provided that, in respect of such building, -
(i) a period of twenty - five years must have been completed, Page 34 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined from the date of issuance of permission for development by the concerned Authority; or
(ii) the concerned Authority has declared that such building is in ruinous condition, or likely to fall, or in any way dangerous to any person occupying, resorting to or passing by such structure or any other structure or place in the neighbourhood thereof.
Explanation. - For the purpose of this section, the expression "redevelopment" shall be the meaning as assigned to it in relevant Development Control Regulations."
15. Considering the aforesaid provision, facts and position of law, notwithstanding anything contained in this Act, any work in relation to the redevelopment of a building can be carried-out on such terms and conditions prescribed, after obtaining the consent of not less than 75% of the flat owners of such building, however, provided that in respect of such building. Such building should have completed a period of 25 years from the issuance of the development permission by the concerned authority. In the facts of the present case, the development permission came to be issued by the competent authority in the year 1981 and in view thereof, the said superstructure having completed a period of 25 years i.e. at least 38 years and in view thereof, for the building which is 38 years old and for which, the resolution which has been passed by more than 84% majority, it would be profitable, Page 35 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined if such redevelopment is undertaken. The petitioners herein having complied with the requirement of Section 41A of the Act, the objections raised by the minority members cannot be considered in view of 84% majority having consented for the redevelopment and having entered into MoU. The aforesaid MoU is also not under challenge before any forum. The proceedings inter-se are pending before the the Registrar, Cooperative Societies, however, the same cannot be a reason for stalling the development process. Also, the respondent no.2 - AMC has also issued Notice under Section 264 of the GPMC Act, which is also self-explanatory that the building requires repairing, the same being in dilapidated condition.
16. In the line with the ratio as referred above, in the opinion of this Court, while various disputed questions of fact are raised by the respondent nos. 4 to 18 herein with respect to the MoU signed by the consenting members, the said members have never approached this Court or any Court or any competent authority raising their grievances/ objections. Further, in line with the ratio as referred above, it is not in dispute that the Page 36 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined general body of the petitioner society has taken a conscious decision for redevelopment of the society. The majority of the members have consented to the said redevelopment. Once a person becomes a member of the cooperative society, he loses his individuality with the society and he has no independent rights except those given to the said person by the statue and bye-laws. The members are required to speak through the society or rather the society alone can act and speaks qua the rights and duties of the society as a body. In view of the aforesaid ratio as referred above, even otherwise the private respondent nos. 4 to 18 lose their status to object individually.
17. Even if the building is in a good condition, once the general body of the society comes to a consensus with respect to the redevelopment and the said resolution having not been subject the matter of challenge and no fraud less mala-fide having been alleged, no interference is called for. Merely, because few members disapproved the decision, the same cannot be the basis to negate the decision of the general body of the society, unless it is shown that the decision was the product of Page 37 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined fraud or misrepresentation or was opposed to some statutory prohibition. Admittedly, in the facts of the present case, there are no mala-fides alleged against the general body of the society. In the opinion of this Court, the decision for redevelopment requires no interference, 85% of the members having been part of the said decision, the decision also falls under the ambit of Section 41 of the GOF Act, 1973.
18. The contention raised by the learned advocate appearing for the private respondents that no mandamus can be issued to the private respondents, as there is no provision for eviction, the declaration is sought against the respondent Corporation, which is a statutory body. It is well settled position of law as referred above that in view of the development permission granted, this Court in exercise of the powers under Article-226 of the Constitution of India is empowered to direct the private respondents to handover the possession, pursuant to the development permission, considering the conditions of the building. The present petition is also filed by the Society, which is also registered under the provisions of the Gujarat Cooperative Page 38 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined Societies Act. Further, there is no eviction in terms of the prevalent law or eviction of an occupant from suit property under the provision of the Transfer of Property Act. In the facts of the present case, the shifting is to reside at alternate accommodation till redevelopment takes place.
19. The reliance placed by Mr. Patel, learned advocate appearing for the respondent nos. 4 to 12 on the ratio laid down by the Hon'ble Division Bench in Letters Patent Appeal No. 634 of 2022 is not applicable to the facts of the present case. In the facts of that case, co-owners were not joined and further that in respect of Flat no.2 which was originally owned by father of the petitioner no.1, the names were mutated and pedigree was produced giving rise to the dispute about the ownership. There was a dispute with respect to the ownership and in view thereof, learned Single Judge in Special Civil Application No. 7197 of 2021 and the Hon'ble Division Bench while deciding the Letters Patent Appeal arising out of the said SCA, declined to consider the prayer seeking redevelopment. The said facts raised disputed question of facts. In the facts of the present case, there is no Page 39 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined such dispute raised by any of the consenting members, pending the proceedings before this Court also. For the said reasons and facts, in the opinion of this Court, the facts are undisputed and in view thereof, the ratio as laid down by the Hon'ble Division Bench in Letters Patent Appeal No. 1075 of 2022 reigns the field. The aforesaid was also considered in an identical issue before the Hon'ble Division Bench, wherein, identical prayers were allowed.
20. For the foregoing reasons, considering the facilities that would be provided by the respondent no.3 - Developer as stated in the affidavit in reply dated 03.08.2022, wherein, the MoU also states that the respondent no.3 would obtain necessary registration under RERA Act. The MoU also provides transit accommodation, additional carpet area that members will be getting in the redeveloped project, gift money and etc., conditions which are in consonance with the statutory provisions of the Gujarat Ownership of Flats Act and amendments with regards to redevelopment made therein. Further for the ease of accounting and classification, a special purpose separate partnership firms are floated for each project, and therefore, Page 40 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined getting bank guarantee is though not impossible but difficult for a new partnership firm. The respondent no.3 - Developer has already as per the MoU undertaken not to obtain any project finance and that the necessary registration under the Act and Rules will be complied with and further the net worth certificate of the Developer would also suffice the concern of the objecting members that the Developer is capable to redevelop the project, and therefore, requirement of bank guarantee pales into insignificance and even otherwise providing bank guarantee is not mandatory in nature, and therefore, objections of the objecting members with regards to bank guarantee are only based on assumption and apprehension, which would be taken care by obtaining project finance and by getting the project registered before the RERA Authority. The respondent no.3 has filed further affidavit and stated that the society is visually dilapidated and photographs to that effect were produced at Page-299.
21. In view of the above discussion, the petitioner held to have followed due procedure for the purpose of redevelopment of the petitioner society and have fulfilled the conditions, to fall Page 41 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023 NEUTRAL CITATION C/SCA/11314/2022 CAV JUDGMENT DATED: 09/11/2023 undefined within the ambit of Section 41A of the GOF Act, 1973.
22. In view of the aforementioned discussion, exercising extraordinary jurisdiction under Article 226 of the Constitution of India, the Petition deserves to be allowed and is accordingly allowed in Para-8(BB). Rule is made absolute to the aforesaid extent. No order as to costs. Direct service is permitted.
(VAIBHAVI D. NANAVATI,J) Further order:
Considering the request made by Mr. Rutvij R. Patel, learned advocate appearing for the private respondents, the operation of the present order is directed to be stayed for a period of four weeks from today.
(VAIBHAVI D. NANAVATI,J) Pradhyuman Page 42 of 42 Downloaded on : Thu Nov 09 20:53:29 IST 2023