Bombay High Court
Om Joshi Apartments Flat Owners ... vs Dr. Natwarlal D. Joshi And Ors. on 3 September, 1999
Equivalent citations: (2000)102BOMLR45
Author: D.G. Deshpande
Bench: D.G. Deshpande
JUDGMENT D.G. Deshpande, J.
1. Heard Mr. Sakhardande for the petitioners and Mr. Shidore for the respondents.
2. Petitioner No. 1 is a Co-operative Housing Society and other petitioners are members of the petitioner No. 1 and purchasers of flat in the building under the control of the society. Petitioner Nos. 2 to 31 are also obstructionists in the obstructionist Notice No. 561 of 1971 and appellants in Appeal No. 64 of 1988 before the Appellate Bench of the Small Causes Court, Mumbai.
3. This petition involves a very interesting and important point of law, but for the appreciation of the same facts of the case will have to be narrated. Respondents are the landlords of a large piece of property at Ghodbunder Road (Andheri) Village, Vile Parle, admeasuring 7618 sq. yards. Bui according to the Town Planning Scheme actually 7140 sq. yards by an agreement of lease dated 21.7.1966 respondents landlords agreed to demise upon Surendra Jainarayan Kapur and Bansidhar Nathalal Jariwalla from the aforesaid land. The said Surendra Jainarayan Kapur and Bansidhar Nathalal Jariwalla were referred to in this agreement as confirming parties.
4. Thereafter, a registered lease deed dated 15.9.1967 carne to be executed between the respondents landlords and one Gurumal Desraj Talwar as a nominee of the original confirming party. The lease was for a period of 99 years and the term was renewable. The lessee was put in possession of the land and pursuant to the powers conferred under the lease deed, the lessee constructed residential flat in multistorey building. The construction was completed before 3.3.1969 and petitioner Nos. 2 to 31 purchased their respective flats in the said building from the lessee by various agreements in writing. On 3.3.1969 petitioner No. 1 was registered as a Co-operative Society under Section 9(1) of the Maharashtra Cooperative Societies Act, 1960 as a tenant Co-operative Society.
5. Under the lease agreement the lessee was required to pay monthly rent of Rs. 3,339/- for about 16 months and therefore the respondents gave notice to the lessee for payment of the said rent within three months and with a threat to reinduct the property in the event of failure. Admittedly, the lessee did not pay the rent as demanded, therefore the respondents filed a suit for ejectment from the plot of land against the lessee on the ground of non-payment of rent and for possession of the land and for decree for Rs. 53,474/-. This suit was filed before the Small Causes Court vide R. A. E. & R. Suit No. 714/4858 of 1970.
6. Lessee filed his written statement but subsequently did not remain present in the suit and as a result the ex parte decree for possession of the land or plot along with arrears of rent and cost came to be passed in favour of the respondents on 15.6.1971 and the lessee was directed to hand over vacant and peaceful possession of the land to the respondents within one month of the decree along with an order to pay arrears and costs, etc.
7. Lessee thereafter made an application to the Court for setting aside the ex parte decree, but his application was rejected. Lessee preferred appeal against that order but his appeal was also dismissed.
8. In the meantime the respondents started execution of the decree and it is in this execution that the petitioners put in their obstructionist. The respondents therefore took out obstructionist Notice No. 561 of 1971 against the petitioners. The petitioners appeared and raised different objections to the execution of the decree, those objections were negatived by the Small Causes Court. Petitioners filed appeal before the Appellate Bench of the Small Causes Court but the appeal was also came to be dismissed and hence this petition.
9. Mr. Sakhardande appearing for the petitioners raised following contentions :
Firstly, according to him the ex parte decree obtained by the respondents landlord against the lessee was a collusive decree as revealed by the conduct of the original lessee. Secondly, according to him even if the case of the respondents regarding the arrears is accepted, the lease documents will itself show that the original lessee was not in arrears of rent but taking advantage of his absence, the respondents obtained an ex parte decree and since the lease deed proves that lessee was not in arrears of rent. The ex parte decree is a nullity and without jurisdiction and therefore the same cannot be executed. Thirdly, he contended that the lease deed between the respondents and the original lessee was for a period of 99 years and it was executed by the respondents with permission to lessee to construct a multistorey building, sell the flats, form a Co-operative Society of the flat purchasers, get the society registered and since the respondents landlords were party to all those steps taken by the petitioners and the original lessee, the respondents cannot under the garb of execution of decree, get the vacant possession of the land i.e. by removing or demolishing the entire multistorey building. Further, it was urged by him that right of entry conferred upon the respondents - landlord under the lease deed did not permit the respondents to obtain vacant possession of the plot after demolition of the structure i.e. multistorey building standing thereon and if at all the decree is executable the respondents were bound to take possession of the land along with structures without affecting in any manner the rights of the petitioners in the land and in the structure. He further contended that even though the respondents knew fully well, before institution of the suit that original lessee had sold flats to 31 petitioners i.e. from petitioner Nos. 2 to 31 and even though the respondents were knowing that a Co-operative Society of the petitioners has been formed and registered, none of the petitioners were joined in the suit. He also contended that decree is for possession of leased land where structures are allowed to be created by the lessor for the purposes of selling those structures on ownership basis, are allowed to be executed in such circumstances and in such manner than a chaotic condition will arise wherein the purchasers of flats even after spending lacks of rupees for the flat, will have to vacate the flat and seeing demolition of the structure without any fault or lapses on their part. He further contended that as per the lease deed the petitioners have acquired the status of tenant or sub-tenant and hence they were entitled for protection under the Bombay Rent Act. He also pointed out that the landlord in his evidence in the obstructionist notice had admitted that possession of the land was with the petitioner No. 1 society and this admission according to Mr. Sakhardande was sufficient to frustrate the entire decree and its execution. He also contended that Small Causes Court passing orders in Obstructionist notice and the Appellate Court upholding the order, had not considered these aspects seriously and properly, and have come to the wrong conclusion and hence for all these reasons the petition was liable to be allowed with heavy costs on the respondents.
10. On the other hand it was contended by the counsel for the respondents landlord that joining the petitioners to the suit was not at all necessary because there was no privity of contract between the petitioners and the respondents. He also contended that possession of the land was never handed over to the society or to any of the petitioners and as such the respondents were entitled to execute the decree. According to him if the execution of the decree meant destruction of the multistorey building the respondents were not concerned with the same or were required to be bothered themselves about the same. He also contended that the breach of lease agreement and the right conferred upon the respondents of re-entry and forfeiture entitling the respondents to get vacant possession of the land and the plot by removal of the structure. He relied upon certain authorities in support of his contention, those authorities are as follows :
(1) Virji Nathuram and Ors. v. Krishnakumar .
(2) Jamnadas Dharamdas v. Dr. J. Joseph Farrei and Anr.
(3) Mrs. Suman Damani and Ors. v. Norman Joseph Perreira 1986 Mah. R.C.J. 376 : (1986) B.R.C. 436.
(4) Vasant Ramchandra Sharma v. Narayanibai Mulchand Agrawal . and (5) Ramkrishna Girishchandra Dode and Ors. v. Anand Gouind Kelkar and Ors. .
11. As against this Mr. Sakhardande relied upon a judgment ol Justice Agarwal in Mani Nariman Daruwala since deceased by his heirs Rusi Nariman Daruwala and Ors. v. Phiroz N. Bhatena and Ors.
12. Since all the issues in controversy center around the agreement of lease between the respondents and the original lessee, it is necessary to find out as to what is the exact nature of the rights given by the respondents - landlord to the original lessee. A perusal of the said lease agreement dated 15.9.1967 shows the following importantterms and conditions (there is no dispute about the names of the lessors and lessee and the property covered by the lease deed) :
(1) Lease authorised the lessee to erect at his own expenses dwelling-houses and buildings;
(2) That vacant possession of the leased land was given to the lessee;
(3) The building was to be constructed by the lessee in a substantial and " workman like manner in accordance with the plans sanctioned by the Bombay Municipal Corporation, in accordance with the by-laws of the Town Planning Scheme VI, Andheri, or under any other statutory provisions;
(4) Lessor agree to indemnify the lessee against all claims for fees, charges, fines, penalties etc., during the progress of the work become payable;
(5) Lessee was to complete the construction of the building i.e. dwelling-houses and buildings within three years from the date thereof of the value of Rs. 3,00,000/- and if the construction could not be completed within three years on account of shortage etc. the lessor shall give further time to the lessee if so requested. Such extension shall not exceed more than one year unless further time is necessary;
(6) Lessee was permitted to repair the construction so made or make additions thereto;
(7) Lessee was permitted and authorised to construct roads in the demised premises and carry out levelling for the purpose of gardening;
(8) Architects, Surveyors and Engineers of the lessor were to be permitted to carry out inspection of the demised premises with a view to see the state of affairs and the repairs and conditions of building;
(9) As soon as the building or dwelling-houses were completed to insure them and keep the insurance alive to the extent of Rs. 5,00,000/-;
(10) If the building is destroyed by fire or by any other natural cause to rebuild, reinstate and repair the same;
(11) Lessee was not permitted to underlet, sublet, the whole or any part of the premises comprising the lease deed without the consent of the lessor, but the lessor was under obligation that he shall not unless necessary withheld such consent in the case of respectable party;
(12) In spite of this condition lessee was entitled to sell and dispose off or let out flats, garages and shops in the proposed building as per his own terms and in his sole discretion without any notice to or consent of the lessor landlord - respondents;
(13) Lessee was entitled to assign his interest in the lease to the cooperative housing society which was to be eventually formed and registered of the flat owners etc. for such consideration as the lessee may deem fit after obtaining previous consent in writing of the lessor;
(14) Lessee was given a right to mortgage his own interest in the property and in the building; the aforesaid terms are some of the important terms of the lease and there is no dispute between the parties about these terms. The picture therefore that emerges from these terms is that after entering into the lease deed for 99 years the lessor had reserved with himself the only right of recovering monthly rent of Rs. 3,339/-. The lessors respondents entered in this agreement with the purpose of authorising the lessee to make constructions of the building, to sell flats, to form society of the flat purchasers etc. The agreement also stipulates that the lessor were under an obligation to give their consent to all these steps that would be taken by the lessee in that regard.
13. This is therefore a case where the respondents landlords have with open eyes leased their property for the purpose of making construction of multistorey building and have authorised lessee to sold those flats at the price to be determined by the lessee to a purchaser at the option of the lessee, right to mortgage is also given to the lessee and right to sublet whole or any part of the property comprising the lease is also given to the lessee and lessor has been pledged under a legal obligation not to withhold this consent unreasonably in the case of respectable party.
14. Apart from the aforesaid terms there is one more clause upon which reliance was placed by the counsel for the respondent and that is clause (k) which provides that at the determination of the lease, however, occasioned to yield up the demised premises with all buildings erected thereon during the said term and additions thereto. It was this clause which was heavily relied upon by the respondents counsel in order to show that the decree was executable under this clause and respondents were entitled to get vacant possession of the land by removal of the structure i.e. multistorey building, of which all the 31 petitioners are respective purchasers of their flats.
15. At this juncture, it is necessary to consider the various authorities relied upon by the counsel for the respondents. In Virji Nathuram's case AIR 1985 Bom. 429 decided by Justice Jahagirdar the original lease has permitted the erection of a superstructure on the land and the induction of third parties in the said superstructure. The persons so inducted "who were the petitioners" before the High Court were the tenants of the superstructure which was erected. The status of the persons who were inducted, though legally, in the superstructure vis-a-vis the land was "according to High Court" necessarily that of licensees and not any other higher status and in this background Justice Jahagirdar held that :
At present the decree is being sought to be executed in respect of the land which was the subject-matter of the original lease and upon which the status of the petitioners is nothing more than that of licensees. The correct legal position is that on the determination of the lease or other interests which are created on the land including the superstructure, the interest, if it can be so called, of the licensees has necessarily to come to an end. The decree which is being executed by the respondent (lessor of land) cannot be properly executed unless the status of the petitioners as licensees on the land also comes to an end. It is in this sense that the petitioners have got to be evicted from the suit land. This cannot be done unless naturally they are also evicted from the structure which is standing on the land in question. Therefore, in execution of the decree by the respondent inexorably the possession of the petitioners of the land as licensees must also come to an end. The petitioners, therefore, cannot resist, the execution of the decree which had been undoubtedly passed validly against the original lessee.
It was further observed that :
All the subsidiary interests which were created, even if legal, by the original lessee pursuant to the lease deed must necessarily come to an end unless otherwise they are protected under the provisions of the Bombay Rent Act.
16. In Jamnadas Dharmadas case AIR 1980 SC 1605 as stated above, the question was slightly different, i.e. jurisdiction of the Court of Small Causes Court regarding grant of certain reliefs. In that case plaintiff had given on lease two plots of land for a period of fifteen years on yearly rent of Rs. 10,200/- and the lessee - original defendant was given liberty to erect building and structure on the two plots of land on the expiration of the term of fifteen years. The defendant - lessee had agreed to deliver back the possession of two plots of land free of all buildings, erections and structures and levelled and put in good order and condition to the satisfaction of the plaintiff.
17. The defendant - lessee defaulted in the payment of rent. Suit was filed for ejectment and the decree was passed. Both the plaintiff and the defendant had preferred appeal and the Appellate Court held that it had no jurisdiction to give decree for ejectment in respect of the two buildings constructed on plot No. 12 by the defendant. The matter went to the High Court. The revision filed by the plaintiff was allowed and the appeal of the defendant was dismissed. Consequently, the defendants were directed to deliver peaceful possession of the land to the plaintiff. When the matter went to the Supreme Court, the question of whether Small Causes Court had power to grant a decree for removal of structure and Supreme Court held that when the plaintiff had asked for possession of the land, Small Causes Court had jurisdiction to grant the incidental and consequential reliefs necessary for effectively taking possession. Supreme Court therefore did not interfere with the decree passed in favour of the plaintiff.
18. Counsel for the respondents also relied upon Mrs. Suman Damani's case decided by Justice S. J. Deshpande and reported in 1986 Mah. R. C. J. 376. However, it is not necessary to separately consider this case because it is in this case the Supreme Court gave the aforesaid decision as AIR 1980 SC 1605 wherein Justice Deshpande has also therefore relied upon the Supreme Court case.
19. Other judgments relied upon by the counsel for the respondents are (1) in the case of Vasant Ramchandra Sharma v. Narayanibai Mulchand Agarwal and (2) Ramkrishna Girishchandra Dode and Ors. v. Anand Govind Kelkar and Ors. . Both these judgments are in respect of lessees creating tenancy rights in the property.
20. In my opinion none of the judgments, referred to above, are of any help to the respondents - landlord for the following reasons:
In the instant case the lease is for 99 years and there is no clause in the lease agreement which empowers the respondents or which authorised them to get the possession of the land by removal of structure and in its original position as a vacant plot of land. Clause 'k' of the lease deed reproduced above gives right of re-entry only at the determination of the lease and that too along with building erected on the land and therefore even if in some of the judgments referred to above, superstructure was required to be removed or demolished in execution of decree, those judgments will have no application because no right is conferred upon the present respondents under the lease deed of getting back the possession by removal of structures or buildings. Secondly that the right to yield up the demised premises is only granted at the determination the lease.
(underline supplied)
21. Secondly from the terms of the lease deed reproduced above, it will be clear that when the respondents had fully permitted to construct multistorey building and sell of the flats, garages, shops etc. to persons of the original lessee's choice, the respondents had agreed to consent wherever required for the purpose of making those constructions and had also agreed to give co-operation and consent in the formation of Co-operative Society.
22. In the judgments relied upon by the respondents and referred to above, none of the question that have been raised in this matter, ever arose directly or indirectly and the main difference is, it is not that the original lessee constructed the building and let it out to the petitioners, in that case the judgments relied upon by the respondents might have been put into service in favour of the respondents. In the instant case the land was leased to the original lessee with a right to construction and sell of the flats. Even right to let out or sublet was given to the original lessee but so far as the petitioner Nos. 2 to 31 are concerned, they are purchasers of flats and they have become the owners of the flat, the present case is therefore required to be distinguished from the aforesaid judgments relied upon by the counsel for the respondents on this vital and material point and therefore I hold that none of the judgments referred to above are of any help to the respondents and they cannot get a right to execute the decree by demolition of the structure i.e. multistorey building, of which petitioner Nos. 2 to 31 are the purchasers of the respective flats and of which petitioner No. 1 is a society duly registered under the provisions of the Maharashtra Co-operative Societies Act. There is therefore no legal right in the respondents to execute the decree in the manner they want now as against the petitioners i.e. by demolition of multistorey building. No doubt the respondents have obtained decree for possession but in execution thereof they can only get symbolic possession of the land and they cannot touch the land nor they can touch the rights of the petitioners in the building as well as in the land.
23. Apart from this, even on other grounds the claim of the respondents is to be outright rejected. Firstly the respondents were knowing that original lessee has constructed a multistorey building and had sold flats on the land covered by the lease deed. Respondents were also knowing that the petitioners society had been formed and registered but respondents did not join the society or the other petitioners in the original suit. This obviously was done with a mala fide intention of getting decree of possession in respect of the land by demolition of the structures standing thereon.
24. There is also strong force in the contention of Mr. Sakhardande that the decree obtained by the respondents against the original lessee was a collusive decree and the original lessee has managed to get all the benefit under the lease deed. He has made construction of atleast 31 flats and sold them as per the prices of his choice. Obviously he has gained lakhs of rupees or crores of rupees by way of profit in this transaction and in such situation there was no reason for him to remain in arrears of rent which was a paltry amount at Rs. 3,000/- and odd per month but having profited by lakhs of rupees, he has chosen to remain absent in the proceedings and allowed an * Here italicised. ex parte decree to be passed, even though in that suit time was given to him to clear the arrears and even though after passing of the decree and when he applied for setting aside ex parte decree time was given to clear the arrears, he did not clear the arrears. This is obviously and clearly with a view to let the petitioners be at the mercy of the respondents with a threat of demolition of their structure hanging on their head constantly. There is no doubt in my mind that the original lessee had colluded with the respondents in not prosecuting the suit which involve substantial right of the petitioners.
25. In this connection and in this regard it can be said after reading in between the lines, of the lease deed that it is brought into existence between the respondents and the original lessee, to suppress the real nature of the transaction between the respondents and the original lessee. The respondents who are owners of the land have leased out the premises for 99 years and the premises consisted of a vacant plot of land admeasuring 7140 sq. yards i.e. more than 70,000 sq. ft. with a right to construct a multistorey building and sell flats at a price to be fixed by the lessee at his own option and in such a transaction according to the respondents they were to get a paltry amount of Rs. 3,000/- and odd per month towards the rent apart from a deposit of Rs. 40,000/- and Rs. 10,000/-. It is obvious that having earned all the benefits under this agreement of lease from the original lessee and without reflecting those benefits in the lease the respondents enriched themselves so also original lessee enriched himself by selling the flats to 31 petitioners and now both of them i.e. respondents and the original lessee are bent upon executing the collusive ex parte decree obtained mala fide, by demolition of the structure ruining thereby all the rights of the petitioners and the crores of rupees they spent for acquiring their flats from the original-lessee.
26. Thirdly, so far as the contention of the respondent that possession of the land was never given to the societies concerned has to be outright rejected because Natwarlal Joshi - respondent No. 1 who examined himself in the obstructionist notice as P. W. 1 and who has admitted in his evidence as follows:
It is true that Ex. 12 was addressed to the society because the society was in possession of plot of land.
This admission coming from respondent No. 1 Natwarlal Joshi who has been described as a doctor in the petition, cannot be considered to be of no consequence or inadvertent admission or a admission given out of ignorance, as was tried to be submitted by the counsel for the respondents. This admission takes away from the respondents the very foundation of the claims and contentions of the respondents that they did not put the society in possession. To the contrary giving of notice Exhibit 12 to the society for the purpose of demanding rent before institution of the suit by the respondents coupled with this admission that society was placed in possession of the land, clearly shows that the respondents were aware of the right of the society not only in the building but also in the land and as such it was obligatory upon the respondents to join the society as a defendant in the suit filed against the original lessee. Obviously this had not been done and the inference cannot be, but that the suit filed by the respondents was a collusive suit with active connivance of the original lessee.
27. Apart from the aforesaid submissions, my attention was drawn by Mr. Sakhardande to the rights of the petitioner as a tenant or sub-tenant under the Bombay Rent Act and the direction which is available to them. However, considering the aforesaid facts it is not necessary to go into that aspect.
28. So far as the enforceability of the decree is concerned, it was contended by Mr. Sakhardande on the basis of the judgment of Justice Agarwal, in Mani Nariman Daruwala since deceased by his heirs Rusi Nariman Daruwala and Ors. v. Phiroz N. Bhatena and Ors. 1991 Mah. L. J 376 : AIR 1991 SC 1494 (Bom.) that if the decree is a nullity the same can be challenged by the obstructionist in execution proceedings or in proceedings under Order XXI Rule 97 of the Civil Procedure Code and to contend that the decree was not liable to be executed and this right was vested with the obstructionist even though he cannot establish his independent right to possession. According to Mr. Sakhardande the decree for eviction obtained by the respondents against the original lessee was a nullity because the decree was passed on the ground that the original lessee was in arrears of rent and was a defaulter whereas according to Mr. Sakhardande the original lessee was not at all a defaulter. The suit was filed by the respondents for recovery of Rs. 53,424/ - being the arrears of rent from 15.12.1968 to 14.4.1970 at the rate of Rs. 3,339/- per month and mesne profits at the rate of Rs. 3,339/- from 14.4.1970 till the possession is delivered. According to Mr. Sakhardande lease agreement was executed on 15.9.1967 between the respondent and the original lessee and it provided that the lessee shall not be liable to pay rent or compensation for a period of fifteen months from the date of the lease (this is as per clause IV on page 13). This period of fifteen months gets completed on 15.12.1968 and it is from 15.12.1968 that the rent becomes payable as per the lease deed Clause IV. Lessee deposited Rs. 10,017/-equivalent to three months rent with the respondents and as per the receipt signed at the end of the lease agreements, the respondents received Rs. 40,068/- by way of deposit therefore when the suit was filed for arrears of rent of Rs. 53,424/-, the respondents had with him a sum of Rs. 50,085/ - meaning thereby that rent for fifteen months stood paid from out of the aforesaid amount of deposit and as such the original lessee was not in arrears and a decree is a nullity.
28. It will be clear therefore that both the Small Causes Court as well as the Appellate Bench of the Small Causes Court committed grave error in rejecting the contention of the petitioners in obstructionist notice and that their orders cannot be sustained.
29. It appears from the record that respondents filed their suit under section 12 of the Bombay Rent Act for getting possession of the suit land on account of non-payment of rent. Evidence of Dr. Natwarlal Joshi was recorded by the Small Causes Court on 15.6.1971 and it was stated by him that the rent from 15.12.1968 onwards has not been paid by the defendant original lessee, notice was given to the defendant but inspite of the notice he is not present. On the basis of this evidence, Court passed order against the lessee directing him to hand over vacant and peaceful possession of the suit premises.
30. It will be clear therefore that even though as per the lease the respondents had with them a deposit of Rs. 50,087/- respondent No. 1 did