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2014 Supreme(Bom) 1352
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
S.C. GUPTE, J.
K and M Sheltors Private Ltd. - Plaintiff
vs
Mrs. Poonam V. Punjabi And 3 Ors. - Defendants.
NOTICE OF MOTION NO.1631 OF 2013 IN SUIT NO.910 OF 2013
Decided on: JULY 9, 2014
Advocate Appeared
Senior Counsel Mr. Ravi Kadam, Counsel Mr. Chetan Kapadia along with Mr. Vikram Trivedi, Mr. Sunil Tilokchandani, Mr. Bharatkumar Jain, i/b. Manilal Kher Ambalal & Co., for the Plaintiff.
Ms. F. Contractor for Defendant No.1.
Mr. Rajendra S. Desai, i/b. Mr. Kunal Bhanage for Respondent Nos. 2 and 3.
Senior Counsel Mr. D.D. Madon along with Dr. Birendra Saraf, Mr. Manish Doshi and Ms. Dhruvi Shah, i/b. Vimadalal & Co. for Defendant No.4.
Parties to a contract can modify or vary its terms, and dispensation with performance or acceptance of other satisfaction is permissible under Sections 62 and 63 of the Contract Act.
Headnote:
Specific Performance - Development Agreement - T.P.S. IV, Linking Road, Santacruz (West), Mumbai 400 054 - Sections 62, 63 of the Contract Act - Order XL Rule 1 of Civil Procedure Code, 1908
Fact of the Case:
Plaintiff seeks specific performance of a development agreement with Defendant No.4, a Cooperative Housing Society, for redevelopment of a building. Plaintiff seeks appointment of Court Receiver to take over possession of two flats owned by Defendant No.4.
Finding of the Court:
Defendant No.4 and its members substantially acted upon the development agreement. Plaintiff complied with the agreement, incurring substantial costs. Defendant Nos.1 to 3 raised issues regarding loading of TDR/FSI, area calculations, and alleged illegal gratification. Court found clear dispensation with the promise as regards loading of TDR/FSI and sharing of the fungible area. Plaintiff made out a prima facie case and balance of convenience favored Plaintiff and Defendant No.4 Society.
Issues: Dispute over performance of the development agreement, loading of TDR/FSI, area calculations, and alleged illegal gratification.
Ratio Decidendi: Parties to a contract can modify or vary its terms. Dispensation with performance or acceptance of other satisfaction is permissible. Society's managing committee can act on behalf of its members. Waiver or remission of performance does not require a general body resolution.
Final Decision: Court appointed Receiver of the suit flats, directed Defendant Nos.1 to 3 to hand over possession to Plaintiff, and ordered payment of compensation. Plaintiff undertook to obtain further TDR/FSI within 12 months. Application for stay was rejected.
The Notice of Motion is taken out by the Plaintiff in a suit for specific performance of a development agreement. The development agreement is entered into by a CoOperative Housing Society – Defendant No.4 – with the Plaintiff, who is a developer. The Notice of Motion seeks appointment of Court Receiver with power to take over physical possession of two flats in the building owned by Defendant No.4 Cooperative Society.
2. The short facts of the case, as alleged by the Plaintiff, may be stated thus :
(i) Defendant No.4, which is a Cooperative Housing Society of flat owners, owns a plot being Plot No. 94B, T.P.S. IV, Linking Road, Santacruz (West), Mumbai 400 054. A building consisting of 11 flats exists on the suit plot. There are 10 members of Defendant No.4, who owns these 11 flats. Defendant No.1 and Defendant Nos.2 and 3, who are members of Defendant No.4 Society, respectively, own Flat Nos.9 and 10 in the suit building (which are referred to as “suit flat/s”).
(ii) By a resolution dated 15 July 2009, Defendant No.4 decided to redevelop the suit building. Project Management Consultants (“PMC”) were appointed for the redevelopment project. By a resolution dated 22 November 2009, passed in a Special General Body Meeting of Defendant No.4, development rights in respect of the redevelopment work were granted to the Plaintiff. In pursuance of this resolution, a development agreement dated 21 December 2010 was executed by Defendant No.4 in favour of the Plaintiff. All members of Defendant No.4, including Defendant Nos.1 to 3 herein, were parties to this agreement. There were separate declarations and undertakings executed by all members of Defendant No.4, including Defendant Nos.1 to 3 herein in this behalf.
(iii) In pursuance of the development agreement, the Plaintiff submitted plans/amended plans for redevelopment of the suit property. Amended plans submitted by the Plaintiff were accepted by the Special General Body of Defendant No.4. A letter was accordingly issued on 29 Augury 2011 by Defendant No.4 to the Plaintiff, inter alia communicating its acceptance of the plans and seeking inter alia a parking layout plan. The parking layout plan was submitted by the Plaintiff to Defendant No.4.
(iv) Subsequently, the D.C. Regulations were amended by Municipal Corporation for Greater Mumbai to include what is known as Fungible FSI which encompassed the entire built up area of construction, including flower beds, terraces, voids and niches in the FSI of the property.
(v) Subsequent to the amendment of DCR, a Special General Body Meeting of Defendant No.4 was convened to discuss the aspect of Fungible FSI with the PMC appointed by Defendant No.4. Meetings were also held by Defendant No.4 and its members with the PMC and the advocate of Defendant No.4. In pursuance of these meetings and the decisions taken therein, the issue of Fungible FSI was satisfactorily resolved between the parties. A letter dated 27 August 2012 was accordingly issued by Defendant No.4 to the Plaintiff recording inter alia about satisfactory resolution of the issue of Fungible FSI.
(vi) The Plaintiff thereafter proceeded to acquire 33% of the total TDR which could be loaded on the suit property. The Plaintiff also obtained an IOD from the Municipal Corporation of Greater Mumbai for construction upto FSI one of the net plot area plus 33% TDR and 20% Fungible FSI. After obtaining the IOD, the Plaintiff gave a notice to vacate the flats in the suit building to Defendant No.4 and its members. A bank guarantee for a sum of Rs.4.8 crores in compliance of the relevant Clause in the development agreement was also furnished by the Plaintiff to Defendant No.4. The Plaintiff also obtained a declaration from M/s. Aum Shiv Enterprises, the erstwhile builders concerned with the project of redevelopment, recording the latter's no objection to the redevelopment work entrusted by Defendant No.4 to the Plaintiff. Eight out of ten members of the Society holding 9 flats from
