Bombay High Court
Padma Ashok Bhatt vs M/S. Orbit Corporation Ltd. And 14 Ors on 3 July, 2019
Author: A.K. Menon
Bench: A.K. Menon
rrpillai nms-1397-2019.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORGINAL CIVIL JURISDICTION
NOTICE OF MOTION NO. 1397 OF 2019
IN
SUIT NO. 8 OF 2017
Sanata Consultants Private Limited ... Applicant
In the matter of
Padma Ashok Bhatt ... Plaintiff
vs.
1. M/s. Orbit Corporation Ltd. ... Defendants
2. Bhadresh Vasantrai Mehta
3. Heena Bhadresh Mehta
4. Parth Bhadresh Mehta
5. Vidhi Kumar Shah
6. M. P. Aggarwal
7. Abedeali Saifee Mamaji
7a. Deewan Housing Finance Corporation Ltd.
8. Ramesh Jain
9. Tushar Parekh
10, Dilip Shah
11. Matthew Graham Stock
12. Manisha Sanjay Saraf
13. OM Project Consultants and Engineers Ltd.
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14. Niraj Dilip Jiwrajka
15. M/s. Axis Bank Limited
16. Municipal Corporation of Greater Mumbai
WITH
SUIT NO. 60 OF 2017
Manisha Saraf ... Plaintiff
vs.
M/s. Orbit Corporation Ltd. & Anr. ... Defendant
WITH
SUIT NO. 62 OF 2017
Madhav Prasad Aggarwal & Anr ...Plaintiffs
vs.
M/s. Orbit Corporation Ltd. & Anr. ... Defendant
WITH
SUIT NO. 192 OF 2017
Om Projects Consultants & Engineers Ltd. ... Plaintiffs
vs.
M/s. Orbit Corporation Ltd. & Anr. ... Defendant
WITH
SUIT NO. 450 OF 2017
Niraj D. Jiwarajka ... Plaintiff
vs.
M/s. Orbit Corporation Ltd. & Ors. ... Defendant
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Ms. Gulnar Mistry a/w. Ms. Anita Pillai & Ms. Rachana Magdum i/b. M/s.
Pillai & Co. for the applicant in NMS/1397/2019.
Mr. S. N. Vaishnava a/w. Ms. Nupur Mukherjee i/b. N. N. Vaishnava & Co. for
the plaintiff in S/8/2017, S/60/2017 and S/62/2017
Mr.Prathamesh Kamath i/b. K. N. Tripathi & Co. for the Official Liquidator -
Defendant no. 1.
Mr. Hitesh Pandya i/b. M/s. Kookada & Associates for Defendant nos. 2 to 5.
Mr. Reetesh Geete i/b. M/s. Parinam Law Associates for defendant no. 13 in
S/8/2017, for defendant no. 2 in S/60/2017 and S/450/2017 and for plaintiff
in S/192/2017.
Mr. Virag V. Tulzapurkar, Sr. Advocate a/w. Mr. Karl Tamboly a/w. Mr.
Bhalchandra Palav i/b. Cyril Amarchand Mangaldas for defendant no. 15 in
S/8/2017.
Mr. Sagar Patil for defendant no. 16 - MCGM.
Mr. Bhaskar Khasgikar,Executive Engineer MCGM present.
CORAM : A.K. MENON, J.
DATED : 3 rd JULY, 2019 P.C. :
1. By this notice of motion the applicant seeks the following reliefs :
(a) To direct that immediate steps be taken for the removal of the hazardous protective awnings, the corroded steel supports and the crane atop the building as well as the affixing new protective nets/ replacing the torn ones;
(b) for costs of the present application;
(c) for such other and further reliefs as the nature and circumstances of the case may require 3/30 ::: Uploaded on - 03/07/2019 ::: Downloaded on - 04/07/2019 05:11:18 ::: nms-1397-2019.odt
2. The suit seeks reliefs which are described below;
(i) a decree directing defendant no. 1 be ordered and directed to make out clear and marketable title in respect of flat no. 2302 and 2402 in a proposed building known as Orbit Haven situated at Darabshaw Lane, Off Napean Sea Road, Mumbai-400 036
(ii) a direction to defendant no. 1 and 15 jointly and severally to comply with obligations under the The Maharashtra Ownership of Flats (Regulation of the Promotion, Construction, Sale, Management and Transfer) Act, 1963 ("the MOFA") by executing agreement for sale under Section 4 of the MOFA, to complete the building as per sanctioned plan and deliver vacant possession of the flat and to form a society of flat owners.
(iii) the plaintiff also seeks order directing defendant no. 1 to disclose all its assets / properties, including personal properties of its directors and its sister concern, and an order of injunction restraining defendant no.1 from in any manner creating any third party rights in properties so disclosed and indemnify the plaintiff against any claims made by any third parties in relation to the said flats.
(iv) As an alternative to specific performance, the plaintiff seeks refund of Rs.9,23,50,000/-, for declaration that said amount stands validly charged on the land and the suit flats and for damages. In the interim for appointment of Court Receiver in respect of the suit building. 4/30 ::: Uploaded on - 03/07/2019 ::: Downloaded on - 04/07/2019 05:11:18 :::
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3. The applicant is not a party to the suit. Defendant no. 15 is Axis Bank Limited which claims that the project and the building under construction and all flats are mortgaged to it to secure repayment of money advanced by Axis Bank. Axis Bank has issued public notice to the effect that the property is mortgaged to the bank as far back as 13 th September, 2013. According to the plaintiff several of the flats basic construction has been completed except at floor no. 30.
4. Defendant no. 1 is the promoter developer of the project known as Orbit Haven and it is under liquidation. There are 12 flats commencing from the 16th floor and upwards. Defendant no. 2 to 14 (except 7A) are believed to be persons who are claiming flats in the building. Defendant no. 7A appears to have lent in advance funds to defendant no. 7 who also claim flat no. 1801 in the building. The construction of the building has stopped several years ago. Defendant nos. 12, 6, 13 and 14 have filed Suit nos. 60 of 2017, 62 of 2017. 192 of 2017 and 450 of 2017 respectively claiming the following reliefs :
SUIT NO. 60 OF 2017 - Plaintiff is Defendant no.12 in Suit no.8 of 2017 Plaintiff claims a money decree of Rs.22,81,19,396/- and interest thereon of Rs. 14,65,00,000/- in addition damages of Rs. 51,55,00,000/- and 5/30 ::: Uploaded on - 03/07/2019 ::: Downloaded on - 04/07/2019 05:11:18 ::: nms-1397-2019.odt declaration that he has a charge on the said premises being duplex flat on the 28th and 29th floor SUIT NO. 62 OF 2017 - Plaintiff is Defendant no. 6 in Suit no.8 of 2017 Plaintiff claims a money decree of Rs. 41,71,89,243/- consisting of principal sum of Rs. 26,94,44,041/- and interest thereon of Rs. 14,77,45,302/- in addition to damages of Rs. 37,83,00,000/- and declaration that the plaintiff has a charge on the said premises being duplex flat on the 16 th and 17th floor SUIT NO. 192 OF 2017 - Plaintiff is Defendant no. 13 in Suit no.8 of 2017 Plaintiff claims a declaration that the suit MOU is valid and subsisting and for possession of two flats. In the alternative to specific performance a decree for Rs. 29,02,79,000/- and interest thereon and damages of Rs. 44,41,21,000 and claims a first charge on the premises being duplex flat nos in 30th and 31st floor.
SUIT NO. 450 OF 2017 -Plaintiff is Defendant no. 14 in Suit no.8 of 2017 Plaintiff claims a declaration that allotment letter dated 3 rd March, 2010 is a valid and binding contract, for specific performance of the obligation under the allotment letter, a direction to defendant no. 1 and Axis Bank to 5 bank 6/30 ::: Uploaded on - 03/07/2019 ::: Downloaded on - 04/07/2019 05:11:18 ::: nms-1397-2019.odt to execute the MOFA agreement, to deliver vacant possession of the flat and make out clear and marketable title. In the alternative it seeks refund of Rs.28,60,00,000/- and damages to the tune of Rs.23,50,00,000/- and claims a charge on the premises in 32nd and for interim relief.
5. It is in this factual background that the motion has been moved by the applicant in Suit no. 8 of 2017 filed by the plaintiff. The applicant is aware the fact that the construction of the suit building has been abandoned/stalled for many years. The applicant has learnt that defendant no. 1 is presently in liquidation and represented by Official Liquidator. Defendant no. 15 Axis bank claims as a secured creditor and has initiated measures under the SARFAESI Act and taken formal possession although physical possession continues to be with the liquidator.
6. The applicant is a Private Limited Company which owns a building known as Ruby Mansion adjoining the suit building "Orbit Haven" and has approached this Court in view of the grave and immediate danger to Ruby Mansion and surrounding areas. Construction is incomplete but is said to have reached thirty (30) floors. Ruby Mansion is stated to be a heritage structure and the applicants have serious apprehension that several protective awnings, torn protective nets, the corroded steel supports and a huge crane atop the suit building may pose serious threat to the safety and security of people and surrounding buildings, apart from Ruby Mansion itself. It is 7/30 ::: Uploaded on - 03/07/2019 ::: Downloaded on - 04/07/2019 05:11:18 ::: nms-1397-2019.odt contended that there was no maintenance being undertaken at all. Protective awnings are falling off and other shuttering is stated to be swaying in the winds and are likely to fall off from substantial height. The crane atop the building also swings in the wind and there is also a materials lift which is on the outside of the building which is totally un-protected. In view thereof and onset of the monsoon and more importantly proximity to the sea as well as the corrosive salt laden air these structures a great hazard to the general public persons and property.
7. The affidavit in support of the application sets out that tin sheets covering the scaffolding dividing two properties and originally intended to protect Ruby Mansion from the falling debris and construction material have now completely corroded and are coming loose from the scaffolding and falling down. There are no site supervisors and the applicant has on occasion removed some material. Reliance is placed on certain photographs in this respect to demonstrate that the protective sheets maybe coming loose. The mild steel bars holding the protective awning have corroded. The crane and its boom have also corroded. The crane also moves in the wind and there is a danger of parts falling off including on to Ruby Mansion, the road below and the adjoining property. The protective net erected at one point of time erected is now in a torn condition. Encroachments have come up, setting up sheds and businesses. The footpath is also now unusable. The 8/30 ::: Uploaded on - 03/07/2019 ::: Downloaded on - 04/07/2019 05:11:18 ::: nms-1397-2019.odt applicant have thus sought to bring all of this to the attention of this Court and seek urgent relief.
8. Learned counsel for the applicant submitted that the court had passed orders on 4th May, 2017 and 7th November, 2017. The order dated 4 th May, 2017 records that the plaintiff and the defendant nos. 2 to 13 in this suit are allowed to make payment for maintaining the building and clarified that they would make payment without claiming any equities without prejudice to the rights and contentions of all parties. Vide order dated 7 th November, 2017 the Court observed that plaintiff and defendant nos. 2 to 13 are allowed to make payment for maintaining the building without claiming equities. The plaintiffs today admit that the crane and scaffolding are lying on the site and incomplete structures are not maintained. It was submitted then that the plaintiff and defendant nos. 2 to 13 were willing to comply with the order dated 4th May, 2017. The order reveals that apart from the plaintiff and defendant nos. 1, 8, 9, 14, 15 and the plaintiff(s) in suit nos. 60 of 2017, 62 of 2017, 450 of 2017 and 192 of 2017 were all present. None of these defendants / other plaintiff controverted the statements made at the bar. The submission made by the plaintiff for itself and on behalf of defendant nos. 2 to 13 is that they were willing to comply with the order dated 4 th May, 2017 which is reproduced for ease of reference :
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1. The Learned Advocate appearing for the Plaintiff in Suit No. 8 of 2017 tenders draft amendment and seeks to amend the plaint in terms of the draft amendment. The draft amendment is taken on record and marked "X" for identification. The plaintiff is allowed to carry out the amendment in terms of the draft amendment on or before Saturday, 6th May, 2017.
2.. The Plaintiff and Defendant Nos. 2 to 3 in Suit No. 8 of 2017 are allowed to make payments for maintaining the building Orbit Havens.* However, it is clarified that the Plaintiff and Defendant nos. 2 to 13 shall make such payments without claiming any equities and without prejudice to the rights and contentions of all the parties before the Court. All contentions of the parties are kept open. Stand over to 19 th June, 2017 for directions.
* sic The submission made on that date on behalf of the plaintiff and defendant nos. 2 to 13 was that they would deposit the amount required for maintenance in this Court so as to make payment of expenses incurred on maintaining the incomplete structure as well as the crane and scaffolding. The plaintiff had also not paid charges and fees of the Court Commissioner for visiting the site as on that date. The electricity bill and outgoing had also not been paid. It is not known whether this has subsequently been paid.
9. According to defendant no. 1 which was not then under liquidation, a contractor had been appointed who was maintaining the structure and crane and scaffolding as on that date and security guard had been appointed by 10/30 ::: Uploaded on - 03/07/2019 ::: Downloaded on - 04/07/2019 05:11:18 ::: nms-1397-2019.odt defendant no. 15. The Court recorded that it is for the plaintiff and defendant nos. 2 to 13 to decide whether to continue with the existing contractor for maintaining the crane and scaffolding or not. Time was given to confirm whether the same contractor would continue or whether they would appoint a different contractor, but it was made clear that they would maintain the premises at their own costs without claiming any equities and without prejudice to the rights and contentions of the parties and if the plaintiff and defendant nos. 2 to 13 did not maintain the building though defendant no. 1 would be at liberty to bring it to the notice of the Court. Unfortunately it appears none of the parties thought it fit to monitor the state of the building, ensure maintenance or even bring it to the attention of this Court earlier. The plaintiff and defendant nos. 2 to 13 also agreed then to pay arrears of electricity charges and deposit amount for re-connection by making payment directly. They were also at liberty to apply for getting the electricity connection restored by installing a new meter. Directions were given as to the conduct of the suit.
10. Ms. Mistry pointed out that on or about 22 nd March, 2019 the applicants wrote to official liquidator, Advocates for Axis Bank, defendant no. 1 and Advocates for the plaintiff informing them of the aforesaid fact and the state of the contractor while reiterating that the same issues had been brought to their attention vide letters dated 22 nd April, 2014 and 11th October, 2017. 11/30 ::: Uploaded on - 03/07/2019 ::: Downloaded on - 04/07/2019 05:11:18 :::
nms-1397-2019.odt It was submitted that no steps have been taken by the plaintiffs or other concerned defendants to resolve the issues. On 14 th May, 2019 the plaintiff was reminded of the imminent risk to Ruby Mansion and sought urgent action vide letter dated 24 th May,2019 this was repeated in a letter dated 24th May, 2019 to the Official Liquidator bringing to his notice that the order dated 7th November, 2017 was operating and requested the receiver to take the matter seriously since the heavy crane affixed posing danger to the applicant premises and neighbourhood. It is not known whether liquidator has brought this to the attention of the Court but in my view he ought to have done so. In any event he is directed to do so forthwith and report whatever steps that may have to be taken in this behalf by filing his report. Ms. Mistry therefore submitted that orders may be passed to deal with this imminent danger and reduce the risk by protecting the structure to the extent possible.
11. The plaintiff has filed an affidavit dated 10 th June, 2019 which discloses that plaintiff along with defendant 6 to 12 appointed M/s. Mahimtura Consultants Pvt Limited to visit the site and give a report dated 30th April 2019. The report was then provided in May along with an estimate of costs for crane maintenance for monsoon protection, passenger hoist maintenance for monsoon protection, safety net at ground floor dismantle of safety net and stacking in a sum of Rs. 11 lakhs. This excludes removal of the crane, the materials lift, GST. Water and electricity and 12/30 ::: Uploaded on - 03/07/2019 ::: Downloaded on - 04/07/2019 05:11:18 ::: nms-1397-2019.odt expenses for permissions to be obtained. The quotation of M/s. Mahimtura Consultants Pvt. Ltd. suggested remedial measures which are as below
1. All the surrounding corrugated sheets and vertical members are to be redone.
2. Lift supports are to be checked at all different level by lift company.
3. All the safety nets with supports it to be changes at the earliest.
4. Crane top to be checked by authorized crane company and strengthen the supports.
5. All the shuttering materials and fixed shuttering are to be removed from the top floor.
6. Steels are also to be removed and it is of no use as the same is badly rusted.
* sic Conclusion As the monsoon is ahead it is very important to do the repair / strengthen work immediately to avoid any accident .(Emphasis supplied) Thus the consultants appointed by the plaintiff and the concerned defendant who have opined that the work must be carried out pre-monsoon. It appears that the plaintiff have also obtained a quotation for the work to be carried out for monsoon protection. . The facts remains that despite the order of 4 th May, 2017 and 7th November, 2017 the plaintiff and defendant have not maintained the premises. It appears that some amounts may have been expended. However, practically no work has been done to secure the site and that is of prime consideration today.
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12. On 10th June, 2019 when this matter was taken up for hearing the Municipal Corporation (MCGM) was also impleaded in the motion. The MCGM was also represented on that date. and was directed to inspect the location and ensure necessary safeguards are put in place with liberty to issue notice to the consultants who are said to have been engaged by the plaintiff and defendant nos. 2 and 13 who were also represented. Axis Bank was directed to intimate its security guards of the visit of MCGM and the Consultant and to ensure that fullest co-operation is given to MCGM and its officers. MCGM was also directed to restore electricity for the purpose of their visit. This visit took place on 13 th June, 2019. The building said to be on D Ward is a framed structure without any walls and the work had stopped for many years. The report of the Executive Engineer (B & F) D Ward is reproduced below :
1. The barricades and its supporting angles are corroded and at many places have broken and displaced causing the entire barricades to risk breaking down in the monsoon.
2. The material lift is not in working condition and many of its parts have corroded. The corrosion of the upper part and its supporting pose may risk of sudden collapse resulting in a serious mishap.
3. The crane operator cabin found collapsed and in broken condition at top floor.
4. The fastening nuts, bolts and framework of the crane are corroded at many places and could topple over and fall on the neighboring properties or the roadside in strong winds. 14/30 ::: Uploaded on - 03/07/2019 ::: Downloaded on - 04/07/2019 05:11:18 :::
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5. The tin sheets for barricades have become loose / displaced from the supporting angles and were found moving and banging even in little wind which cannot be survive the wind pressure in monsoons.
6. The debris / construction material found lying at many places causing water stagnation during monsoon which may lead to mosquito breeding.
7. The out side drain pipes are seen corroded and damaged at various places.
8. The building is situated near sea and salty air on the corroded crane and other iron material can be a serious danger and the hazard to the persons and property around it.
There can be no doubt that all parties concerned namely the plaintiff and defendant nos. 2 to 14 including plaintiff in other suit nos. 60, 62, 192 and 450 of 2017 were all represented on 7 th November, 2017 and were otherwise aware of the order. All parties today agree that there is clear and present danger of the portion of the structure which have corroded being dislodged from their present location. The photographs that the Corporation has obtained are very revealing and indeed instill fear of harm if these structures fall from thirty storeys above.
13. The Corporation has also made a report dated 17 th June, 2019 which says that it has displayed caution notice boards for safety of public and nearby residents and called agencies involved in the field of securing the 15/30 ::: Uploaded on - 03/07/2019 ::: Downloaded on - 04/07/2019 05:11:18 ::: nms-1397-2019.odt premises on 15th June, 2019 and explained the nature of the work and three agencies have issued quotations namely
1. M/s. Asma Enterprises : Rs.49,00,000/- + 18% GST.
2. M/s. Ruby Rock Construction - Rs. 54,90,000/- + 18% GST.
3. M/s. Aqsa Enterprises - Rs.51,53,000/- + 18% GST.
The amount quoted by M/s. Asma Enterprises is the lowest at Rs.49,00,000/- + 18% GST thus amounting to Rs. 57,82,000/-. The Executive Engineer also submitted that the developer is responsible to take care of the building and remove the dangerous parts. In the interest of expeditious removal the quotation of the lowest better may be accepted to proceed on war footing, reason being as otherwise the suit required process of floating tender and inviting bid which cannot be done for want of time owing to the urgency.
14. On 14th June, 2019 counsel for the plaintiff and defendant no. 13 stated that they had made certain contributions pursuant to the earlier order but neither of them were in a position to state whether contribution would suffice to remove the crane and the other offending materials. They contended that since report was provided only on 14 th June, 2019 they required time to take instruction. The matter was then adjourned. On 18 th June, 2019 Axis Bank submitted that they were not in actual physical possession and therefore are unable to make any contribution towards costs especially since action taken under the SARFAESI Act had been challenged 16/30 ::: Uploaded on - 03/07/2019 ::: Downloaded on - 04/07/2019 05:11:19 ::: nms-1397-2019.odt and order had been passed in Appeal No. 360 of 2017 in their favour had been challenge in SLP filed by the plaintiff wherein a statement has been made that pending hearing of the SLP they would not seek possession of the building in question. Hence Axis bank has declined to step in to take over responsibility of removal of these items. Parties claiming to be flat purchasers were called upon to consider sharing of costs since these are already ordered as of 7th November, 2017. Plaintiff and defendant nos.2 to 13 all agreed that they were willing to share the costs. On that date one Pujit Aggarwal claiming to be an Ex-Director suggested that wire netting could be provided to prevent any structures or portion thereof that may fall of from reaching ground level but that is not a solution by itself considering the height from which large and heavy parts may fall towards the ground, the wire netting is hardly likely to prevent such heavy objects from falling to the ground. Wire netting it seems was intended to prevent normal construction debris from falling to the ground.
15. The matter was then adjourned to 20 th June, 2019 on which date it was adjourned to 26th June, 2019. None of the defendants have filed affidavit in reply other than the plaintiff themselves none of the parties present had any objection to appropriate orders being passed in view of the order dated 7th November, 2017. Ms. Mistry submitted that all the defendants (except defendant nos. 7 and 11) had been served. Defendant 17/30 ::: Uploaded on - 03/07/2019 ::: Downloaded on - 04/07/2019 05:11:19 ::: nms-1397-2019.odt nos. 7 and 11 could not be served since they were not available at their address. She has since tendered affidavit dated 13 th June, 2019 effecting service to the plaintiff and defendant no. 2, 3, 4, 5, 6, 7a, 8, 9, 10, 12, 13, 14, 16 and affidavit of service dated 17 th June, 2019 to defendant no. 1. She has also submitted a tabulated submission showing services of the notice of motion. Thus all parties except defendant nos. 7 and 11 were served. It is in this background that I may call upon to decide this notice of motion.
16. On 26th June, 2019 Mr Vaishnav on behalf of the plaintiff placed on record a quotation by M/s. Nilesh Construction a firm considered earlier for carrying out work for dismantling the tower crane, fixing safety net on the 27th floor, connecting electric supply and removing the top slab structure around the crane for Rs. 32,50,000/-. The quotation is marked "X" for identification.
17. In respect of the flats 5 suits have been filed. As far as remaining flats are concerned there have been no claims made in suits filed in this Court as presently advised. All these plaintiffs / defendants concerned were before the Court on 7th November, 2017 when the interim direction came to be passed directing the other defendants though represented on 7 th November, 2017 have not appeared in the hearing of this notice of motion, except defendant nos. 7 and 11 who had not been served with this motion. They have nevertheless been served at the time that the ad-interim order dated 7 th 18/30 ::: Uploaded on - 03/07/2019 ::: Downloaded on - 04/07/2019 05:11:19 ::: nms-1397-2019.odt November, 2017 was passed. Thus they are aware or deemed to be aware of the order and their obligation to maintain the building and shuttering and other allied equipments lying there. All parties present at the hearing in this notice of motion have also agreed that they are liable to contribute. They must therefore bear the costs to the extent necessary for securing the premises in the interest of safety of neighbouring buildings and the public at large. If any parts of the component or part of cladding were to fall of it could have disastrous results. Metal sheets would be carried for long distances in gusty winds. If any of the components of the crane were to collapse the possibility of this toppling down from atop the building cannot be ruled out. This could give lead to collateral damage as well.
18. The report of the Executive Engineer of the MCGM clearly indicates that the supporting awnings and corroded barricades supported by angles have corroded and have broken and are exposed to the monsoon. There is a risk of entire barricade coming down. The materials lift which is external is also in a corroded state and there is a risk of a collapse of the entire lift structure. One must remember that these are items from ground level which go up to 30 floors. The report indicates that cranes operator's cabin has collapsed and was lying in broken condition. Apart from debris lying around which has caused water stagnation, drain pipes are also corroded and damaged. The Corporation has clearly opined that the corrosion is as a 19/30 ::: Uploaded on - 03/07/2019 ::: Downloaded on - 04/07/2019 05:11:19 ::: nms-1397-2019.odt result of lack of maintenance and non operation and hence corporation has suggested remedial measures being the planning authority and third competent authority to oversee the construction and certify the construction to be in accordance with the sanctioned plans. The MCGM's report must be taken as final word and to that extent five remedial measures have been suggested by the Executive Engineer which are reproduced below :
1.The loose / displaced barricades and its corroded supporting angles should be removed immediately.
2.The entire crane including its lift and collapsed operator cabin lying on top floor should be removed immediately.
3.The loose / corroded metal material vertical pipes which may fall down should be removed immediately.
4.The debris should be removed from the site to avoid mosquito breeding condition on site.
5.The new barricades & protective netting should be provided around the building under the supervision of Safety Engineer and registered structural engineer for the safety of passerby and neighboring buildings.
This work would have to be undertaken on a war footing. It is not as if there are not enough agencies to carry out the work but it is question of funding these agencies. As far as funds are concerned one would have expected defendant no. 15 Axis Bank to step in and fund the removal of the hazards 20/30 ::: Uploaded on - 03/07/2019 ::: Downloaded on - 04/07/2019 05:11:19 ::: nms-1397-2019.odt and take preventive steps. However the bank has made it clear that since they have been prevented from taking possession they cannot be held responsible. There is merit in the submission on behalf of the bank. The bank's version that it is plaintiffs who are responsible for current state of affairs since they have obstructed the secured creditor from taking possession. The averment in paragraph 32 of the plaint as amended is that the defendant nos. 1 and 15 be jointly and severally ordered to comply with MOFA obligation and thus defendant no. 1 is being held responsible for building the flat, given the fact that defendant no. 1 is now in liquidation. The record does not indicate that the plaintiff has obtained leave under the Companies Act to proceed against the Company in liquidation. Notwithstanding that at the Courts request the liquidator has appeared and has submitted that liquidator is helpless since the company under liquidation had no funds and could not contribute financially. The plaintiffs and defendant nos. 2 to 14 were and are bound to, but have not honoured their obligations to maintain the premises. The present state of affairs has occasioned due to failure of the plaintiffs and those defendants who claim an interest in the property and they are responsible for the deterioration of the property and owing to their inaction and lethargy despite having expressed willingness to maintain. Even today they have reiterated their resolve to maintain the premises, that would, in my view require all of them to comply with the MCGM recommendations in the report. Photographs annexed in the affidavit in support as part of Exhibit C- 21/30 ::: Uploaded on - 03/07/2019 ::: Downloaded on - 04/07/2019 05:11:19 :::
nms-1397-2019.odt 1 pages 38 and 47, none of which have been disputed are telling evidence of the state of affairs. In particular the photograph at page 42 is suggestive of what could happen if the crane or the lift were to topple. The consequences could be loss of many lives apart from damage to adjoining buildings. In that view of the matter it is plaintiffs and the defendant nos. 2 to 14 who must be directed to forthwith make arrangement to remove the structural hazards. The photographs are indictment of the plaintiffs direct contribution to the deteriorating state of the cladding, lift and crane. The plaintiff and concerned defendants have clearly demonstrated their apathy by turning a blind eye in having failed to maintain the premises.
19. In the course of submissions on 1 st July, 2019 the counsel for the parties mentioned that the Supreme Court had granted leave and had allowed the Civil Appeals thereby restoring the order of the learned single Judge of this Court dismissing the notices of motion seeking rejection of the plaint against the Bank. This suit therefore continues as against defendant no. 15 Axis Bank. The Supreme Court in the course of deciding the Civil Appeals has observed that it is not permissible to reject any particular portion of the plaint against some of the defendants and continue the same against others. In other words in exercise of power under Order 7(d) the plaint as presented must proceed as a whole or be rejected as a whole not in any part. The Civil appeals resulted from an order of the Division Bench of this Court in Appeal 22/30 ::: Uploaded on - 03/07/2019 ::: Downloaded on - 04/07/2019 05:11:19 ::: nms-1397-2019.odt no. 360 of 2017. The Division Bench was considering an order in which the single judge had dismissed notices of motion seeking rejection of the plaint. The Division bench found the rejection to be improper and allowed the notice of motion thereby holding that the suit against defendant no. 15 - Axis Bank was barred by virtue of section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). Since the Civil Appeals have now been allowed I once again had occasion to call upon Axis Bank to consider whether Axis Bank would step in if the plaintiff and defendant nos. 2 to 14, some of whom are plaintiffs in the other suits failed to provide necessary funds, Axis Bank would step in, but counsel for Axis Bank was non committal for want of instructions.
20. In that view of the matter the plaintiff must be directed to forthwith fund the operations to engage a suitable firm approved by MCGM to remove the structures. It is for good order sake and since building was in possession of defendant no. 1 and yet to be taken physical possession of by the secured creditor. Prima facie it was expected that the liquidator could ensure that these funds are provided. However on behalf of the liquidator, Mr. Kamat reiterated that the liquidator has no funds. The plaintiffs and defendant no. 2 to 14 shall therefore have to contribute collectively / severally. Relying on the quotation produced by the plaintiff it appears that the minimum sum required Rs.32,50,00,000 excluding GST. Once GST is included the same 23/30 ::: Uploaded on - 03/07/2019 ::: Downloaded on - 04/07/2019 05:11:19 ::: nms-1397-2019.odt could be higher. In that view of the matter the plaintiffs must be put to terms if they wish to pursue their suits. The plaintiffs must therefore by themselves and/or jointly plaintiff and defendant nos. 2 to 14 must jointly and severally contribute a sum required for removing these materials. The Corporation having obtained quotation in the interregnum have suggested that given the paucity of time M/s. Asma Enterprises may be engaged because their quotation may be lowest @ Rs.49,00,000/- + 18% GST.
21. It is always open for any of the plaintiff / defendant to contribute beyond pro rata share to reserve their right to be reimbursed after containing the danger permanently. In other words process of removal of cladding should be such as to be a one time activity which need not engage parties in regular and repeated activity for preventing damage. The incomplete structure itself may deteriorate over a period of time but that is not of immediate concern. The question that arises is what if the plaintiff did not comply with their obligations. Apart from the possible action that the plaintiff and probably defendants claiming flats would invite for disobedience of the order of the Court, Order 39 Rule 11 provides that if any party is ordered to do a thing but defaults the Court may make an order of dismissal. The Bombay amendment to order 39 of the CPC included rule 11 which reads as follows :
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nms-1397-2019.odt ORDER XXXIX "11. Procedure on parties defying orders of Court, and committing breach of undertaking to the Court :-
(1) Where the Court orders any party to a suit or proceeding to do or not to do a thing during the pendency of the suit or proceeding, or where any party to a suit or proceeding gives any undertaking to the Court to do or to refrain from doing a thing during the pendency of the suit or proceeding, and such party commits any default in respect of or contravenes such order or commits a breach of such undertaking, the Court may dismiss the suit or proceeding, if the default or contravention or breach is committed by the plaintiff or the applicant, or strike out the defences, if the default or contravention or breach is committed by the defendant or the opponent.
(2) The Court may, on sufficient cause being shown and on such terms and conditions as it may deem fit to impose, restore the suit or proceeding or may hear the party in defence, as the case may be, if the party that has been responsible for the default or contravention or breach as aforesaid makes amends for the default or contravention or breach to the satisfaction of the Court :
Provided that before passing any order under this sub-rule notice shall be given to the parties likely to be affected by the order passed."
22. Thus I am clearly of the view that since the plaintiff and defendant did not comply with their obligation to maintain the structure and the direction contained in the order dated 7 th November, 2017 and the acceptance thereof constituted in effect of undertaking to the Court to maintain the premises and failure to maintain the structure amounts to committing breach of the of the order of the Court / undertaking. The plaintiff and concerned defendant had 25/30 ::: Uploaded on - 03/07/2019 ::: Downloaded on - 04/07/2019 05:11:19 ::: nms-1397-2019.odt been directed to maintain the premises during the pendency of the suit and the consent to do so resulted in the order dated 7 th November, 2017 to be passed. They have since committed a default. They have failed to maintain the structure. In my view even if such omission does not amount to breach of an undertaking it would be wilful failure to comply with the orders' of the Court. This would entail dismissal of the suit. This consequence clearly contemplated under Order 39 Rule 11 which provision I propose to invoke.
23. All th esuits were placed on board so that the plaintiffs could make submissions. Only the plaintiff in Suit No. 8 of 2017 has made her submissions. It may be contended that this is a drastic measure but I believe this is a fit case for employing Rule 11. In my view the breach of the order shows is willful inasmuch as they were well aware of the obligation to maintain the structure and they were alive to the fact that they were bound to do so ever since the orders were passed in 2017. In that view of the matter non compliance is clearly willful and which will justify resorting to Order XXXIX Rule 11. In my view this is a fit case for invoking the provisions of Order XXXIX Rule 11 since continued non compliance has frustrated the orders passed by this Court which were intended to ensure that the premises were maintained. Defendant no. 1 being in liquidation and the liquidator not having any funds, the plaintiffs and the concerned defendants are liable to maintain the building especially in view of the fact that the plaintiff has 26/30 ::: Uploaded on - 03/07/2019 ::: Downloaded on - 04/07/2019 05:11:19 ::: nms-1397-2019.odt controverted the claim of Axis Bank which claims to be mortgagee in respect of the suit building and flats.
24. Accordingly if the plaintiffs and defendant nos. 2 to 14 do not contribute a sum of Rs. 50,00,000/- immediately I am of the view that they are liable to be non suited by dismissal of the suit. All concerned parties have been heard. They have reiterated their resolve to be bound to their obligation to maintain the premises. Implied in the Courts orders is the obligation to ensure removal of all hazardous structures. Breach of the order dated 4 th May, 2017 and 7th November, 2017 is therefore evident from their failure to prevent deterioration of the installed cladding, crane, scaffolding and shuttering. It would be aggravated breach of the orders if they now did not contribute and remove the offending part of the structure and in that view of the matter if the plaintiff fail to remove the structure it would be in the fitness of things that they face dismissal of the suit without prejudice to the right of recovery of the amounts expended for restoration by those concerned. In the instant case if the suit are ultimately dismissed defendant no. 15 Axis Bank may be entitled to exercise their rights as secured creditor and if that be so given all the steps they have taken thus far they will be liable to fund the removal of all offending structures. They would be obliged to do so, since they claim possession of the property. 27/30 ::: Uploaded on - 03/07/2019 ::: Downloaded on - 04/07/2019 05:11:19 :::
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25. In conclusion I pass the following order :
(i) The Court Receiver High Court Bombay is appointed only for the purpose of ensuring that the repair work is carried out by an authorised contractor as directed by the MCGM in the report of its Executive Engineer dated 14th June 2019 filed in this court. Registry to forthwith provide a copy the report to the Court Receiver.
(ii) The Court Receiver shall forthwith appoint a suitable contractor who will carry out the work under the supervision of an Architect or Structural consultant well versed in the task at hand as the Receiver may appoint suitable for task at hand.
(iii) To facilitate the work the plaintiff the above suit and suit no. 60 of 2017, 62 of 2017, 192 of 2017 and 450 of 2017 and defendant nos 2 to 14 (except defendant no. 7A) in Suit no. 8 of 2017 shall jointly and/or severally deposit with the Court Receiver High Court Bombay a sum of Rs. 50,00,000/- (Rupees Fifty lakhs only) on or before 9 th July, 2019.
(iv) If the entire amount of Rs. 50,00,000/- is not deposited by the above said plaintiffs and defendant on or before Tuesday 9th July, 2019 before 5.00 pm, the above suits nos. 60 of 2017, 62 of 2017, 192 of 2017 and 450 of 2017 shall stand dismissed without further reference to the Court.
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(v) If the amount is so deposited the Court Receiver will ensure that the work will commence forthwith, secure the premises in the order of priority which the structural consultant may deem fit and file a report to that effect. It is clarified that all such work is carried out in consultation with the Executive Engineer, Municipal Corporation and the Fire Brigade authorities.
(vi) It will be open for the plaintiff or such defendant to deposit the shortfall if any in the aforesaid amount and ensure that the total amount of that is available with the receiver on or before 9 th July,2019. If such shortfall is contributed by any party/ they will be entitled to claim reimbursement but not any special equities.
(vii) In the meanwhile MCGM shall make sufficient arrangements to depute their officials from the Disaster Manager Cell to also survey the area and make necessary arrangements for safeguards to be taken in the event any part of the structure falling to the ground. Neighbouring buildings and those in the vicinity will be alerted of the hazards if necessary by fencing as may be advised by the MCGM. Services of the fire brigade authorities may be utilised for this purpose and all available forms of practical modes of communication may be used.
(viii) In the event of dismissal of the suits as aforesaid as of 9 th July, 2019 Axis Bank which claims to be secured by a mortgage shall 29/30 ::: Uploaded on - 03/07/2019 ::: Downloaded on - 04/07/2019 05:11:19 ::: nms-1397-2019.odt forthwith pay the entire sum of Rs.50,00,000/- on or before 11 th July, 2019 and shall also pay such other amounts that may be required to secure the building as aforesaid.
(ix) Each plaintiff shall pay to the Applicant costs of Rs.10,000/- within two weeks from today.
(x) Notice of motion disposed of as above.
(A.K. MENON,J.)
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