Bombay High Court
Generic Engineering Construction And ... vs Sharifabai Kutubuddin Waff-Ul-Aulad ... on 11 April, 2022
Author: G.S. Patel
Bench: G.S. Patel
4-IA-744-2022 IN COMS-198-2021.DOC
Arun
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
INTERIM APPLICATION NO. 744 OF 2022
IN
COMMERCIAL SUIT NO. 198 OF 2021
Generic Engineering Construction and Projects ...Applicants
Ltd
In the matter between
Generic Engineering Construction and Projects ...Plaintiffs
Ltd
Versus
Sharifabai Kutubuddin Waff-ul-aulad Trust & Ors ...Defendants
Mr Zal Andhyarujina, Senior Advocate, with Jahaan Dastur, Ajay
Vazirani, Anuja Abhyankar & Sharanya Mahimtura i/b Lexicon
Law Partners, for the Plaintiffs/Applicants.
Mr Archit Jayakar, with Pooja Yadav & Dhwani Parekh, for
Defendants Nos. 1, 2, 3, 5, 22, 23, 24, 26, 27 and 28.
Mr Amin Arsiwala, with Nidhi Shah, for Garuda Construction &
Engineering Pvt Ltd (Proposed Respondent).
Mr Sagar Patil, for the MCGM.
ARUN RAMCHNDRA Mr Anil Salgaonkar, Deputy Supdt, F/N Ward Assessment present. SANKPAL Mr SJ Bhogle, Ward Inspector Assessment F/N Ward present.
Digitally signed by ARUN RAMCHNDRA SANKPAL Date: 2022.04.12 10:51:12 +0530CORAM: G.S. PATEL, J DATED: 11th April 2022 PC:-
Page 1 of 511th April 2022 4-IA-744-2022 IN COMS-198-2021.DOC
1. Mr Sagar Patil has obtained instructions from the MCGM.
He tenders a file which is retained on record. His officers are present in Court. They point out that an amount of Rs.1,65,23,919/- is due as per the last assessment towards the property tax. For repair cess the amount payable is written in handwritten endorsement on the second sheet and is computed at Rs.1,73,37,990/-.
2. The MCGM file is taken on record and will be retained with the papers.
3. This last figure is especially alarming. It is three times the amount that was estimated at the time of the Consent Terms.
4. Both payments are important. The property tax demand must be met; else the property itself is liable to be proceeded against for recovery. Without the repair cess being paid the necessary MHADA no objection certificates will not be forthcoming, nor will be the final no objection certificate. Both dues, if unpaid, imperil the project.
5. Mr Andhyarujina for Generic Engineering Construction & Projects Ltd ("Generic Engineering") confirms on instructions that despite these figures, Generic Engineering (either on its own or with its associate Garuda Engineering) will make the payment. As regards the property tax, it will make the payment to the MCGM immediately. As to repair cess, it will work out an instalment plan with MHADA. Liberty to Generic Engineering to apply for this or any other related purpose.
Page 2 of 511th April 2022 4-IA-744-2022 IN COMS-198-2021.DOC
6. It goes without saying that these payments by Generic Engineering will have to be deducted from the amounts payable to owner-landlord and, where pro-rated, from the amounts due to the tenants as well.
7. I accept Mr Jayakar's submission on behalf of the landlord that the landlords will be at liberty to proceed against the earlier developer, Aadinath Developers, both in respect of the unpaid property tax and the unpaid repair cess for the period from about 2012 to January 2020. The remedies of the 1st Defendant against the previous developer are expressly kept open for appropriate proceedings to be initiated by the 1st Defendant.
8. Mr Jayakar expressly accepts that the repair cess prior to 2012 is entirely to the account of the 1st Defendant Trust-owner.
9. Any payments made by the Generic-Garuda to the MCGM towards property tax or repair cess are without prejudice to the rights of the 1st Defendant Trust including against the MCGM to seek a reduction or waiver of both these assessments.
10. This brings us to the proposed Joint Development Agreement ("JDA") between Generic Engineering and Garuda Construction Engineering represented by Mr Arsiwala. I have been through the clauses of this document and I see no real objections. Mr Jayakar expresses an apprehension regarding Clause 5.1.27 which is the right of the developers to put up hoardings, advertisement boards, signage and so on including for the free sale Page 3 of 5 11th April 2022 4-IA-744-2022 IN COMS-198-2021.DOC and the rehab components. Obviously the signage for the project will be required for compliance with the MCGM information norms. As regards any income generating hoardings, billboards or advertising spaces, it goes without saying that these facilities will generate income to the developers until such time as a society or condominium is formed, after which these constructions or civil works, being part of the building, will also be transferred to the society or condominium. That should allay any apprehensions on the part of the owner.
11. The other concern that Mr Jayakar expresses is in relation to the rights given under the JDA to Garuda Engineering to create security on the free sale component in Clause 5.1.30 of the draft JDA. I see no substance in this concern. Under the Consent Terms, the owner has divested its rights in the free sale component as part of the consideration. Obviously, the developer is investing money in the project. If the developer was not to do this, it would be the owner which would have to put up, infuse or front the money for the entire project. It is in that scenario that the developer gains rights over the free-sale component. This right over the free-sale component is necessarily subject to the developer performing its obligations vis-à-vis the owner and the tenants, as that is also part of the consideration. Merely expressing an apprehension at the use of the word 'mortgage' is without substance.
12. On a careful consideration none of the rights of the owners or the tenants are in any way compromised or harmed by the execution of the JDA. If anything, because Generic Engineering approached the Court with the draft JDA, there is now a far more clarity Page 4 of 5 11th April 2022 4-IA-744-2022 IN COMS-198-2021.DOC especially on the questions of property tax and repair cess then there was earlier.
13. I now leave it to Generic Engineering and Garuda Construction to execute the JDA in the appropriate form. This will undoubtedly need to be stamped and registered in accordance with law.
14. I grant all parties liberty to apply should the need arise.
15. Mr Andhyarujina points out that although the 8th October 2021 order said that the Consent Terms would be uploaded (paragraph 21) that has not been done. He request this not be done on grounds of commercial confidentiality in the interest of the project.
16. The Consent Terms are not to be uploaded until further orders by the Court.
17. The IA is disposed of in these terms.
18. The previous Affidavits filed by the Generic Engineering and Garuda Construction are part of the record of the IA.
19. Liberty to the parties to apply.
(G. S. PATEL, J) Page 5 of 5 11th April 2022