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2010 Supreme(Bom) 252

ROSHAN DALVI
Bharatiya Bhavan Cooperative Housing Society Limited – Appellant
Versus
Krishna H. Bajaj – Respondent


Advocates appeared:
For the Petitioners:A.Y. Sakhare, Sr. Counsel i/b. M.N.Bhadrashete, Advocate.
For the Respondents:R1, Zal Andhyarujina with Duhita Lewis i/b. Goenka Law. Asso., Advocates.

Judgement Key Points

Certainly. Based on the provided legal document, here are the key points:

  1. The transaction involved a transfer of shares and premises in a cooperative housing society, with the respondent paying a significant amount as a contribution to the society’s repair and maintenance fund, which was later challenged as an illegal transfer fee (!) (!) .

  2. The respondent claimed that she paid the amount under coercion and that the demand for transfer fees exceeding the permissible limit was illegal. She alleged that she was pressured into making the payment, which she later discovered was unlawful (!) (!) .

  3. The evidence indicated that the respondent was represented by legal counsel during the transaction, attended meetings with society officials, and did not ask for written confirmation of coercion. This suggested that her consent was free and informed (!) (!) .

  4. The legal framework governing the transaction includes the relevant cooperative society laws, which specify that the premium or transfer fee should not exceed a certain maximum amount (Rs. 25,000), and any amount exceeding this is illegal. Payments made in excess are considered unlawful contributions (!) (!) .

  5. The contract for transfer was entered into with full knowledge of the legal restrictions, and the respondent was aware or had legal advice indicating the illegality of the excess amount paid. Therefore, the payment was made with knowledge of the law, rendering the contract void from inception under the relevant legal principles (!) (!) .

  6. The respondent’s claim for repayment under the grounds of mistake or coercion was rejected because the evidence did not support the existence of coercion, and the payment was made with awareness of its illegality or under legal advice. The contract was not merely voidable but void ab initio due to its unlawful nature (!) (!) .

  7. The legal principles clarify that amounts paid under a contract that is void from the outset cannot be recovered because such contracts are considered illegal and against public policy. The respondent’s assertion that she paid under coercion was not substantiated by sufficient independent evidence (!) (!) .

  8. The court emphasized that the respondent’s knowledge of the illegality and her participation with legal advice meant she could not claim protection under laws that allow for restitution in cases of mistake or coercion. The payments made were not recoverable because they stemmed from an unlawful agreement (!) (!) .

  9. The judgments of the lower courts were found to have erred in their understanding of the law relating to void contracts and the restitution of benefits under such agreements. The court set aside the impugned orders, clarifying that the transaction was void from the beginning and that the respondent could not claim a refund (!) .

  10. The legal reasoning underscores that when a party knowingly enters into an illegal contract, especially with full legal advice, the contract is void, and no restitution can be claimed for payments made under it. The court’s role is to uphold the law and prevent enforcement of unlawful agreements (!) .

These points collectively reflect the legal reasoning and conclusions of the case, emphasizing the importance of lawful consideration, informed consent, and the consequences of engaging in illegal contractual arrangements.


Judgment

1. The Petitioner is the Cooperative Housing Society (Society) in which the Respondent No.1 (Respondent) is a member upon transfer of the membership of one Mrs. Preeti Umesh Khimji (Khimji) who held the shares of the Society in respect of flat Nos.24 and 25 in the Society building being Bhatia Bhawan at Marine Drive, Mumbai 400 020 (the premises).

2. The Respondent No.1 entered into an agreement with Khimji on 30th March 1992 for sale and transfer of the shares and the premises of Khimji to her for a consideration of Rs.3.21 Crores. It was agreed in the agreement dated 30th March 1992 by the parties that they would contribute equal to 3% of the consideration amount towards transfer fees. The parties had certain meetings with the office bearers of the Society being the Chairman (Petitioner No.2) and the Secretary. The parties have entered into correspondence with the Society as well as certain other authorities concerned with the transfer of the shares and the premises. Khimji contributed his share to the Respondent. The Respondent has paid the amount to the Society. This payment was made as a contribution to the Repair & Maintenance Fund of the Society. The Respondent was












































































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