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1983 Supreme(Bom) 66

IN THE HIGH COURT OF BOMBAY
Mrs. Sujata Manohar, J.
G. Swaminathan.... Petitioner.
Versus
Shivram Co-operative Housing Society others.... Respondents.
Writ Petition No. 1869 of 1982, decided on 24/25-2-1983.
Advocates appeared :
C.J. Sawant with Pramod N. Joshi, for petitioner.
P.J. Vaidya, for respondent No. 1.

A person who is interested in the payment of an amount which another is bound to pay and, therefore, pays it, is entitled to be reimbursed by the other person under Section 69 of the Contract Act.

Headnote:

CONTRACT - SECTION 69 - MAHARASHTRA OWNERSHIP FLATS (REGULATION OF THE PROMOTION OF CONSTRUCTION, SALE, MANAGEMENT AND TRANSFER) ACT, 1963 - SECTIONS 4, 5, 8 - CO-OPERATIVE SOCIETY - LIABILITY TO REPAY AMOUNT TO PURCHASER OF FLAT - INTERESTED PERSON - REIMBURSEMENT.

Fact of the Case:

The petitioner, a former Chairman of a Co-operative Housing Society, filed a dispute before the Co-operative Court seeking reimbursement of Rs. 20,000/- paid by him to a flat purchaser, Mrs. Chellamma, on behalf of the society. The society denied liability, claiming the petitioner was not authorized to make the payment and that they had no obligation to repay Mrs. Chellamma. The Co-operative Court ruled in favor of the petitioner, but the Appellate Court set aside the award.

Finding of the Court:

The High Court held that the petitioner was entitled to be reimbursed under Section 69 of the Contract Act as he had an interest in making the payment to Mrs. Chellamma. The Court found that the society was liable to repay the amount to Mrs. Chellamma under Section 8 of the Maharashtra Ownership Flats Act, 1963, as the land and building owned by the society were charged with the repayment of the amounts paid by Mrs. Chellamma for the purchase of a flat, together with interest.

Issues: 1. Whether the petitioner was entitled to be reimbursed under Section 69 of the Contract Act for the payment made to Mrs. Chellamma? 2. Whether the society was liable to repay the amount to Mrs. Chellamma under Section 8 of the Maharashtra Ownership Flats Act, 1963?

Ratio Decidendi: 1. The Court held that the petitioner had an interest in making the payment to Mrs. Chellamma as he was facing criminal prosecution due to the non-payment of the amount. The Court observed that Section 69 of the Contract Act is not confined to cases where the other party is personally liable for the debt, but also applies to cases where the liability attaches to the immovable property belonging to that other party. 2. The Court found that the society was liable to repay the amount to Mrs. Chellamma under Section 8 of the Maharashtra Ownership Flats Act, 1963. The Court noted that the promoter had failed to give possession of the flat to Mrs. Chellamma and was liable to refund the amount received by him, with interest. The Court held that the amounts and interest were a charge on the land and building of the society, and therefore, the society was liable to repay the amount.

Final Decision: The High Court set aside the judgment and award of the Appellate Court and confirmed the judgment and award of the Co-operative Court, ordering the society to repay the amount to the petitioner.

JUDGMENT - Mrs. SUJATA MANOHAR, J.:---The petitioner is a former Chairman of the 1st respondent. Co-operative Housing Society. The petitioner has filed the present petition challenging the judgment and award of the Maharashtra Co-operative Appellate Court, Bombay, dated 31st December 1981 in Appeal No. 517 of 1980. The petitioner had filed an Arbitration Suit No. ABN/760 of 1972 before the Co-operative Court at Bombay to recover from the 1st respondent Society and others a sum of Rs. 20,000/- together with interest as stated therein. The said arbitration suit of the petitioner was decided by the Co-operative Court in favour of the petitioner and the 1st respondent Society was directed to pay the said amount to the petitioner. In appeal, however, the judgment and award of the Co-operative Court was set aside and the claim of the petitioner was dismissed with costs. The present writ petition challenges the decision of the Co-operative Appellate Court.

2. The 1st respondent Co-operative Housing Society owns a building now known as Shivram Sadan and originally known as "Prerana", situate at Antop Hill, Wadala (East), Bombay. Originally one Pareshkumar S. Jain had entered into an agreement for the purchase of the land on which the said building now stands, with the then owner of the land, and had proceeded to construct the said building thereon for the purpose of selling flats on ownership basis to various parties. He had collected various amounts from third parties to whom he had agreed to allot flats in the building. Thereafter the 1st respondent-society entered into an agreement with Pareshkumar Jain dated 26th December, 1966 whereunder the 1st respondent-society agreed to purchase the said land and the building under construction from Pareshkumar Jain on the terms and conditions mentioned in that agreement. Under the agreement Pareshkumar Jain was required to hand over possession of the building to the 1st respondent in the manner provided therein. A certain period was set out within which possession of the building floor wise was to be given to the 1st respondent. A list of flat-owners who had paid various amounts to Pareshkumar Jain for the purchase of flats in the said building was annexed to the said agreement showing the names of such purchasers and the amounts paid by each of them to Pareshkumar Jain. It was provided in the said agreement between the 1st respondent and Pareshkumar Jain that on or before 28th February 1967 the 1st respondent would pay a sum of Rs. 2 lacs to Pareshkumar Jain for the purpose of enabling Pareshkumar Jain to refund to the said purchasers the amounts paid by them to Jain. One such purchaser listed at Serial No. 9 in the said list annexed as Exhibit `C' to the said agreement was Mrs. A. Chellamma, respondent No. 3 herein who was shown as having paid a sum of Rs. 15,500/- to Jain for the purchase of a flat. It seems that Jain did not refund the sum of Rs. 15,500/- to Mrs. Chellamma, and to some other persons with whom we are not concerned. No flat in the building was allotted to Mrs. Chellamma nor was the amount paid by her refunded to her. Ultimately she filed a complaint in the Court of the Chief Presidency Magistrate, Esplande, Bombay being Case No. 108/S of 1968 against Pareshkumar Jain, the petitioner and two other persons who were office bearers of the 1st respondent society. The accused No. 1 Pareshkumar Jain was charged under section 13 read with section 4 of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 as also under section 13 read with section 10 of the Act, and under section 406 of the Indian Penal Code. Accused Nos. 2, 3, and 4 were charged under section 13 of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 as also under section 406 of the Indian Penal Code read with section 109 of the Indian Penal Code. The 1st accused Pareshkumar Jain was co




























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