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High Court of Judicature at Bombay
THE HONOURABLE MR. JUSTICE S.C. DHARMADHIKARI
Acknur Constructions Pvt. Ltd.
Versus
Sweety Rajendra Agarwal & Others
NOTICE OF MOTION NO.2090 OF 2009 IN SUIT NO.1404 OF 2009
Decided on : 05-12-2009
There is one more disturbing aspect in these matters. Increasingly, it is found that the developers and builders are approaching the Court seeking eviction and dispossession of non-co-operating members of Co-operative Housing Societies. The Society does not approach the Civil Court as it is aware of the position in law. It is the developer and builder who approaches the Civil Court on the basis of the rights conferred in his favour by the Society. Very often the clauses in the Agreement between the Society and the Builders/Developer are such that all rights of the society in the land including the benefits attached to the same in the form of FSI etc are surrendered to the builder/developer. Thus the society not only loses the existing structure and building completely but is divested of its right and title in the land itself. It is also deprived of the benefits attached to the immovable property that is the land. If all such arrangements are accepted at their face value, then, the existence of the co-operative housing society itself is threatened. Although, it is assured in Court that the Society continues to exist so also the rights of the members but it is not possible to presume straight away and in the absence of anything more, that the society really exists in law. It is ultimately a Housing Society and if till the new structure has come up, there is not going to be any building or tenement or flat then, mere continuation of membership on paper is of no practical value. Further the Society itself does not remain the same. The builder/Developer may be obliged to fulfil his obligation to provide a flat/tenement of the same area as in the existing building to all the members yet the rights created in his favour to deal with and dispose off the construction made at site after fully exploiting the F.S.I and T.D.R. would naturally charge the composition of the society, if not wipe out its existence. The Society then coming into existence will not be just of the existing members but of additional flat/shop purchasers who in terms of the clauses of the Agreement would have to be enrolled as members of the society. This definitely charges the composition and constitution of the society and in the longer run may affect the rights of the existing members. Further, from the agreement it does not appear that the Society has retained any control on the plaintiffs/Developer. If the construction does not proceed or for some reason is halted or stopped, then, save and except the penalty and termination, no other protection is available to the members of the Society. In these circumstances there is no certainty of the permanent alternate accommodation All these and other aspects merits serious consideration. It appears that the State of Maharashtra has issued Directive in cases of re-development of old buildings of Co-operative Housing Societies. A perusal thereof indicates that several vital aspects are lost sight of and the Rights of the members are not given serious consideration. The Directive do not deal with the aspect of TDR/FSI and other rights, attached to the land and how they have to be dealt with. In any event, the instant redevelopment is not as per these Directives. As is apparent from the above prima facie findings the plaintiff and defendant No. 5 have not followed these Directives. Thus any such activity at site should not compromise the rights of members and must safeguard the existence of the Society. Co-operative Movement is a Socio-Economic and Moral Movement. It is to fulfil the constitutional goal (Article 43) that it is encouraged by the State. It’s not a profit making activity nor is it tool for power politics. It is true role cannot be forgotten or else commerce will displace service. For all these reasons the Notice of Motion fails and is accordingly dismissed.
Based on the provided legal document, the key points are as follows:
The suit involves a redevelopment agreement between Acknur Constructions Pvt. Ltd. (Plaintiff) and the Co-operative Housing Society (Defendant No.5), with occupants (Defendants Nos.1 to 4) resisting the redevelopment project (!) (!) .
The Society had passed resolutions supporting redevelopment, including a General Body Meeting held on 6th January 2008, where the majority authorized the Plaintiff as the developer. However, there are disputes regarding the validity of the meeting notice, which was allegedly not in compliance with Bye-laws, and whether it was an Annual General Meeting or a General Body Meeting (!) (!) .
The Development Agreement, executed on 30th January 2008, grants rights to the Plaintiff to demolish the existing structure and construct a new building, with provisions for providing existing members with flats of increased carpet area at no cost, and commercial shops for some members (!) (!) (!) .
There are serious allegations and disputes regarding the nature of the agreement—whether it constitutes a transfer of rights in the land or is merely a development contract—and whether the Society and its members have properly authorized and understood the terms (!) (!) .
The defendants, especially Defendant Nos.1 and 2, have challenged the legality of the resolutions, the notice of the meetings, and the validity of the agreement. They contend that the agreement is not binding on them and that their rights to occupy the premises are not extinguished by the Society's resolutions (!) (!) (!) .
The Court notes that there are discrepancies and ambiguities in the documentation, including the nature of the agreement, the extent of rights conferred, and the procedural validity of the meetings and resolutions (!) (!) .
The Court emphasizes the importance of safeguarding the rights of the Society members, ensuring proper adherence to procedural requirements, and verifying the true intent and legal effect of the agreements. It also highlights concerns about the potential impact on the Society’s existence and the rights of existing members if the redevelopment proceeds without clear and lawful authorization (!) (!) .
Given the serious disputes, procedural irregularities, and the doubts about the nature of the rights created, the Court concludes that the Plaintiff has not established a prima facie case sufficient for granting interim relief. The Court also considers that granting such relief could cause irreparable harm to the Defendants and might amount to a decree of possession at an interlocutory stage (!) (!) (!) .
The Court underscores the importance of following statutory directives and safeguarding the constitutional and socio-economic principles underlying cooperative housing societies. It notes that the alleged redevelopment activities have not adhered to these directives, which further diminishes the likelihood of the Plaintiff’s prima facie case (!) .
Ultimately, the Court dismisses the Notice of Motion, emphasizing that, at this stage, the balance of convenience and the substantial questions regarding procedural validity, agreement nature, and legal rights favor the Defendants. The decision reflects the need for thorough verification of the claims and adherence to legal and procedural norms before any coercive measures are taken (!) .
In summary, the Court’s findings point towards procedural irregularities, doubts about the legal nature of the agreement, and the importance of protecting the rights of the Society members, leading to the dismissal of the Plaintiff’s interim relief application.
This is a Suit by a Builder and Developer against the Co-operative Housing Society and the occupants, who are in the occupation of flats/tenaments and shops in a building known as Fardoon Apartment, Co-operative Housing Society, situate at 6th Road, Khar (West), Mumbai - 400 052.
2.The relief claimed by the Plaintiffs in the Suit proceeds on the basis that the Cooperative Housing Society has, at its General Body Meeting, passed a Resolution, pursuant to which, it is resolved that the existing structure/building would be pulled down or demolished and a new building/structure would be constructed on the plot of land belonging to the Co-operative Housing Society. In this new building all the members would be provided housing accommodation of the same area by the Plaintiffs/Developers. To enable them to construct new building and hand over the flats and tenaments to the members of the Co-operative Housing Society that it was resolved that an agreement can be executed incorporating specific clauses and details so that membership rights are not prejudicially and adversely affected. The Plaintiffs have also executed individual agreements with the members. Thus, the Society and its members are supporting the action of the Plaintiffs and therefore, in furtherance of the Agreement executed in their favour. They can proceed to demolish and pull down the existing structure/building and construct a new building on the land. To enable them to do so, it was expected that all existing members and occupants vacate the premises presently in their occupation and possession. However, although, the majority has decided to confer rights as above on the Plaintiff and have consented to the agreement, some persons claiming to have rights in the tenaments/shops/premises in their possession are resisting the execution of the agreement.
It is alleged that these persons have no right to obstruct the development work at site. They are bound by the Resolution of the majority and the decision of the Co-operative Housing Society. Even if they are having dispute with the Society, the Plaintiffs are ready and willing to earmark and keep aside shops and flats for such persons/Defendants. Thus, it is not as if they would not have any protection. As and when they succeed in their challenge to the actions of the Society, they would be allotted the flats and shops earmarked and reserved for them. These premises would remain untouched and would not be disposed off until such time as this Court deems fit and proper is the stand of the Plaintiffs. Thus, the Plaintiffs and the Society urge that they are ready and willing to protect the minority rights, if any, but at no cost should the development work be stopped or obstructed or else all would suffer.
3.In furtherance of the final relief of removal of obstructions and all impediments to the development work at site, the Plaintiffs seek a mandatory interim order and direction so as to remove or cause to remove the non-consenting parties as according to the Plaintiffs their claim is supported by the Co-operative Housing Society and a majority of the members. Thus, they have a strong prima-facie case and they have satisfied the Court that irreparable harm and injury will be caused to all occupants if development work is not permitted to be completed at site. More so, when the structure presently at site is unsafe and unsound, it is not fit for human occupation. Therefore, the balance of convenience is also in favour of the Plaintiffs and the mandatory interim orders, as prayed, be granted.
4.That is how, the Notice of Motion proceeds and afore-recorded pleas are set out in an affidavit of one Deepak Rao, Managing Director of the Plaintiffs. The Plaintiffs have stated that they are a Company registered under the Indian Companies Act having their Office at the address mentioned in the title. Defendant No.1 is the occupier of Shop No.1 and Defendant No.2 is the occupier of Shop No.2. It is alleged that they are ex
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