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1980 Supreme(Bom) 167
IN THE HIGH COURT OF BOMBAY
B.J. Rele, J.
Sadruddin Hussainbhai Somji.... Appellant.
Versus
Jhangiani J.D. others.... Respondents.
Criminal Appeal No. 1200 of 1976 with Criminal Appeal No. 144 of 1978, decided on 22-7-1980.
Advocates appeared :
V.G. Mehta S.R. Chitnis, for appellant.
G.A. Merchant, for respondents Nos. 1 3.
T.P. Shahani, for respondent Nos. 1 3.
T.C. Motwani, for respondent No. 1.
J.A. Bardey, P.P., for State.
The court clarified the interpretation of various provisions of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sales, Management and Transfer) Act, 1963, in the context of a dispute over the sale of a flat.
Headnote:
OWNERSHIP FLATS ACT - SECTIONS 3, 4, 5, 8, 13, 14 - SUMMARY: The court analyzed the provisions of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sales, Management and Transfer) Act, 1963, in the context of a dispute over the sale of a flat. The court interpreted the provisions related to disclosure requirements, advance payments, possession, and registration of agreements. The court held that the prosecution failed to establish the necessary elements of the offenses under sections 3, 4, 5, and 8 of the Act, and upheld the acquittal of the accused.
Fact of the Case:
The complainant alleged that the accused, who were Promoters and Builders, failed to make full disclosure about an adverse claim on the flat, concealed facts, and induced him to pay Rs. 21,000 for the flat, which he neither received nor was refunded. The accused claimed that the amount paid was not a deposit but part payment for the flat, and that they had given possession of the flat to the complainant.
Finding of the Court:
The court found that the complainant failed to prove that the amount paid was a deposit or advance payment, as required under section 4 of the Act. The court also found that the accused had provided possession of the flat to the complainant, and that the agreement for sale was not required to be registered under the Indian Registration Act. The court further held that the prosecution failed to prove which of the accused was responsible for the conduct of the business of the firm, as required under section 14 of the Act.
Issues: 1. Whether the accused made full and true disclosures about the adverse claim on the flat, as required under section 3(2)(a) and (b) of the Act. 2. Whether the accused charged more than 20% of the sale price as advance money or deposit, in violation of section 4 of the Act. 3. Whether the accused failed to deliver possession of the flat free from all encumbrances, as required under section 8 of the Act. 4. Whether the accused failed to refund the amount paid by the complainant on demand, as required under section 8(b) of the Act.
Ratio Decidendi: 1. The court held that the provisions of section 3(2)(a) and (b) of the Act were not applicable to the facts of the case, as the complainant failed to establish that the accused had not made full and true disclosures about the title to the land or any encumbrances on the land. 2. The court held that the provisions of section 4 of the Act were not applicable, as the amount paid by the complainant was not an advance payment or deposit, but part payment for the flat. The court also held that the prosecution failed to prove which of the accused was responsible for the conduct of the business of the firm, as required under section 14 of the Act. 3. The court held that the provisions of section 8 of the Act were not applicable, as the accused had provided possession of the flat to the complainant, and that the agreement for sale was not required to be registered under the Indian Registration Act. 4. The court held that the prosecution failed to establish that the accused had failed to refund the amount paid by the complainant on demand, as required under section 8(b) of the Act.
Final Decision: The court dismissed both appeals filed by the complainant and upheld the acquittal of the accused.
2. These two appeals came to be filed for the reason that the learned Magistrate acquitted the accused of the offences under sections 3, 5 and 8 read with sections 13 and 14 of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sales, Management and Transfer) Act, 1963, (hereinafter referred to as "The ownership Flats Act"). However, the learned Magistrate convicted the accused under section 4 of the Ownership Flats Act and sentenced him to pay a fine of Rs. 500/-, in default simple imprisonment for one month. Against the order of acquittal under the said sections, the original complainant has preferred the above first mentioned Criminal Appeal.
3. Against their conviction, the accused preferred appeal in the Court of Sessions for Greater Bombay and the learned Additional Sessions Judge acquitted the accused. Against the said order of acquittal the original complainant has preferred the second mentioned Criminal Appeal.
4. The facts giving rise to the two appeals are that the accused are the Promoters and Builders carrying on business of building construction under the name and style of Messrs Jhangiani Gurubaxani Construction Company. As the complainant was in need of accommodation, he approached, in the month of June 1968, one Gulamalli Mulla Kadharbhai Kadri, an Estate Broker. Gulamalli took the complainant to the accused as the accused had constructed a building known as Prakash Building at Besant Road, Santacruz (west) and a flat bearing flat No. 5 was vacant in that building. The complainant and his father accompanied by Gulamalli then saw the flat some time prior to 25th June, 1968. The complainant and his father found the flat suitable and approved it. At that time Tarachand, accused No. 2, was present in the flat. Tarachand quoted the price of Rs. 22,000/- while the complainant quoted the price of Rs. 21,000/-. On 25-6-1978 Gulamalli told the complainant that the deal was settled for Rs. 21,000/-. On 26-6-1968, the complainants wife, his father and Gulamalli went to the house of accused No. 3 and gave him a cheque for Rs. 2,000/-. Accused No. 3 passed a receipt for the said amount. After two-three days, the complainant went to the house of accused No. 2 Tarachand, he told Tarachand and accused No. 2, to take the balance amount and hand over possession of the flat. Accused No. 2 asked the complainant to meet accused No. 1. After two-three days the complainant went to the office of accused No. 1 at Marine Lines and the complainant was referred by accused No. 1 to accused No. 3. After about couple of days, the complainant met accused No. 3, who, in turn, asked the complainant to meet accused No. 2.
5. On 3-7-1968, the complainant Gulamalli went to the house of accused No. 2, who asked them to come to the flat at Prakash Building on 4-7-1968. Accordingly, on 4-7-1968, the complainant, his father and Gulamalli went to the flat at Prakash Building and gave a cheque for Rs. 16,000/- to accused No. 2. On the next day, i.e. on 5-7-1968, the complainant gave one cheque for Rs. 251/- to accused No. 2 for painting and fixture work. The complainant has alleged that on 10th July, 1968 the brother of accused No. 2 went to his flat and gave him the sale agreement which, according to the complainant, was ante dated to 1st July, 1968, as also the key of the said flat No. 5 in Prakash Building. The complainant has further stated that on 10-7-1968 the brother and some family members of accused No. 2 were occupying the said flat No. 5 and he was told by the brother of accused No. 2 that he would remove the goods and luggage from the flat and would hand over the duplicate key of the flat on 14th July, 1968 in the evening at his shop. On 14th July, 1968, the complainant got the duplicate key and vacant possession of the said flat which he occupied from that day.
6. It is further alleged by the c
