Final Order 1

Order Details: Notice of Motion
Pdf Text: NM No.414/2020 .. 1 .. L.C. Suit No.4418/2011
CNR NO.MHCC01-001019-2020
IN THE BOMBAY CITY CIVIL COURT AT BOMBAY
NOTICE OF MOTION NO. 414 OF 2020
IN
L.C. SUIT NO. 4418 OF 2011
(HIGH COURT SUIT NO.2384 OF 2011)
Emgee Green Co-Operative Housing )
Society Ltd., )
A Housing Society registered under the )
Maharashtra Co-Operative Societies Act, )
1960, having its address at MTV Road, )
Antop Hill, Wadala (East), )
Mumbai – 400 037. )…Plaintiff
Versus
1. Municipal Corporation of Greater Mumbai)
having its office at Mahanagarpalika Marg, )
C.S.T., Mumbai – 400 001. )
2. Mudhit Gupta, Sole Proprietor of Emgee )
Developers and Consultants, Having his )
address at 17/17A, Babubali Building, )
Cawasji Patel Road, Mumbai – 400 001. )
3. Hareraj Family Trust )
represented by Mr. Ashwin Gupta, having )
its place of business at India Steels No.1, )
India Bulls, Centre Tower B-2, 10th Floor, )
Elphinstone Road (West), Mumbai )
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4. SPV Family Trust )
represented by Mr. Ashwin Gupta, having )
its place of business at Inia Steels No.1, )
India Bulls, Centre Tower B-2, 10th Floor, )
Elphinstone Road, (West) Mumbai )
5. Ashiana Family Trust )
represented by Mr. Ashwin Gupta, )
having its place of India Bulls, Centre )
Tower B-2, 10th Floor, Elphinstone Road )
(West), Mumbai ).
..Defendants
APPEARANCE:-
Ld. Adv. Brijesh Upadhyay I/b Jash Vyas and Company for plaintiff.
Ld. Adv. Nita Jadhav for defendant No.1/MCGM.
Ld. Adv. Jayram Chandani a/w Adv. Vinod Talreja for defendant No.2.
Ld. Adv. Ashwini Landge for the defendant No.3 to 5.
CORAM : HER HONOUR AD-HOC JUDGE
SMT. C.P. JAIN (C.R. NO.06)
DATED : 1st DECEMBER, 2020.
O R D E R
This notice of motion is moved by plaintiff praying to set
aside consent terms decree and order dated 18.07.2017 passed by this
court being unlawful, bad in law, illegal and void-ab-initio so also
praying for restraining defendant No.2 from acting upon the consent
terms and irrevocable power of attorney both dated 17.07.2017 and for
directions to defendant No.2 to deposit/surrender the irrevocable power
of attorney dated 17.07.2017 being annexure “C” to consent terms and
alternatively for declaration that the consent terms dated 17.07.2017
stands revoked in pursuance of clause-1(a) of consent terms.
2. Read Notice of Motion. Perused reply filed by defendant
No.2. Heard both the learned advocates.
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The Background of the case is as follows -
3. Plaintiff society has filed this suit for perpetual injunction
directing defendants to demolish the dilapidated structure shown in
annexure-B1 and hand over portion of land after demolition to plaintiff
for use of the same as garden so also directions to pay sum of
Rs.75,000/-to plaintiff society by way of costs of replacement of
damaged floor styles. After the suit was filed, on 02nd August, 2015
new managing committee was formed which consisted of Anup Lalwani
as Chairman, Ashwin Fernandes as Secretary, Ms. Roshni Udyavar as
Member and other ten Managing Committee members. Mr. Ashwin
Fernandes who was secretary resigned by his resignation letter dated
20.03.2017. The resignation of Ashwin Fernandes was accepted by
plaintiff society on 27.03.2017. Thereafter, Roshni Udyavar was Co-
opted as Secretary of the aforesaid Managing Committee. This
Managing Committee with Anup Lalwani as Chairman, Ms. Roshni
Udyavar as Secretary and other Managing Committee members is
(hereinafter referred as “former managing committee” of plaintiff
society in short). When suit was posted for evidence of defendant No.2,
former managing committee of plaintiff society had settled the dispute
by way of consent terms dated 17.07.2017 with defendant No.2.
Accordingly, decree in terms of consent terms was passed on 18.07.2017
(hereinafter referred as “impugned decree” in short). The suit
proceeded ahead against other defendants and was disposed of against
defendant No.2. Thereafter, defendant Nos.3 to 5 had moved Notice of
Motion No.2828/2017 challenging the aforesaid compromise decree.
The aforesaid Notice of Motion was dismissed by my predecessor in
office on 20.06.2018. Defendant Nos.3 to 5 had challenged the order in
Notice of Motion No.2828/2017 before Hon’ble High Court in writ
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petition No.13683/2018. This writ petition is disposed of on 03.10.2019
by consent terms dated 30.09.2019 between defendant No.2 and
defendant Nos.3 to 5. The new Managing Committee of plaintiff which
constituted Pedru Rodrigues as Chairman, Ashwin Fernandes as
Secretary and Girish Nair as Treasurer and other committee members
(hereinafter referred as “New Managing Committee” in short) took
charge on 01.04.2019. This New Managing Committee has moved
present notice of motion alleging that the former managing committee
has committed fraud upon court. The former managing committee did
not bring to notice of the court some facts which if were disclosed, the
consent terms dated 17.07.2017 would not have been taken on record
by court and the compromise decree dated 18.07.2017 would not have
been passed.
ARGUMENTS OF BOTH THE SIDES
4. Learned advocate for plaintiff has vehemently argued on
following points to substantiate that the impugned decree is null and
void.
1) Roshni Udyavar was not the elected secretary of former
managing committee. The former managing committee had co-opted
Roshni Udyavar after resignation of Ashwin Fernandes who was then
secretary of the former managing committee. As per section-73 AC of
Maharashtra Co-operative Societies Act (hereinafter referred as “The
Act” in short), after the resignation of Ashwin Fernandes, the former
managing committee was supposed to inform the registrar who in turn
will conduct the fresh election for the secretary of plaintiff society.
However, the former managing committee did not follow procedure laid
down in Section-73 of The Act. Despite rejection of the applications of
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the former managing committee to co-opt Roshni Udyavar as Secretary
vide letters dated 16.12.2016, 29.12.2016 and 10.02.2017 of Co-
operative department of State Government of Maharashtra, the former
managing committee went ahead with the illegal act of co-opting
Roshni Udyavar as Secretary of the society. Therefore, the authority
letter given by Roshni Udyavar authorising Mr. Anup Lalwani to sign &
present consent terms in court is illegal, null & void.
2) The former managing committee did not have adequate
strength and quorum to conduct the special general body meeting. The
plaintiff society consisted of 133 members. Therefore, former managing
committee required the strength of 13 managing committee members.
However, 7 committee members had resigned. Therefore, there were
only 6 managing committee members remaining. Therefore, the
plaintiff society did not have adequate quorum for convening the special
general body meeting on 02.07.2017.
3) The so called secretary Roshni Udyavar of former managing
committee was not present in the special general body meeting dated
02.07.2017. Even then she had prepared the minutes of special general
body meeting dated 02.07.2017 on 10.07.2017. As per the rules of The
Act, the secretary of the society must remain present for all meetings.
The member remaining absent cannot prepare the minutes of the
meeting. Further the draft of the minutes of the meeting have to be
circulated to all members of the society within 15 days for inviting any
objections if any, from members. The objections raised needs to be
considered and thereafter the final minutes are prepared. But this
procedure is not followed by the former managing committee.
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4) The notice of the special general body meeting was not
given to all members of the society. Further, the consent terms prepared
were also not circulated to all the members of the society. In short, the
former managing committee did not follow the rules, provisions,
byelaws of The Act.
5) The former managing committee in collusion and hand in
gloves with defendant No.2 has sold property worth 35 crores only by
taking meager signing amount of Rs.10 lakhs so also without taking
consent of each member of the society sold the FSI of which the society
is owner indirectly owned by all the members of society to defendant
No.2.
6) As per Section-7 and Section-7A of Maharashtra Ownership
Flats (Regulation of the promotion of construction, sale, management
and transfer) Act, 1963, written consent of all the members of the
society is necessary if the defendant No.2 wants to make any changes,
additions, deletion or alteration in the original plan. However, former
managing committee without taking such consent, in collusion and in
hand in gloves with the defendant No.2, has entered into consent terms
dated 17.07.2017. Defendant No.2 in his reply has not dealt with this
provision and not denied the averments in notice of motion. Therefore,
this fact is admitted by defendant No.2.
7) The former managing committee is expelled. Administrator
was appointed. As the earlier audit report dated 19.05.2018 of M/s.
H.G. Karnani and associates, statutory auditor appointed by former
managing committee was incomplete, on 02.06.2018, members of the
society applied for re-audit to Assistant Registrar Co-operative Society
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under Section-81 (1) of The Act. Upon order being passed on
18.06.2018, the District Deputy Registrar of Co-operative Society
nominated Shri. Anirudha P. Sengaonkar 3rd Additional Special Auditor
Co-operative Society on 16.07.2018 as auditor for plaintiff society. The
report of Shri Anirudha P. Sengaonkar dated 29.12.2018 has also
pinpointed that the former managing committee had not conducted the
special general body meeting dated 02.07.2017 by following due
process of law. The report dated 29.12.2018 is supporting the notice of
motion of plaintiff. Inquiry is initiated under Section-88 of The Act, on
basis of re-audit report dated 29.12.2018.
8) Upon taking charge by the New managing committee on
01.04.2019 and getting the papers from advocate Sapna Raichure on
19.11.2019, the New managing committee has understood the true
nature of illegality committed by the former managing committee. The
New managing committee with view to safeguard financial and
economic interest of 133 members of the society appointed M/s. Thite
Valuers and Engineers, Corporate valuer and Surveyer after intimating
general body meeting dated 13.10.2019. From the report of valuer
dated 31.10.2019, the plaintiff society has learnt for first time that the
total FSI generated by plot was 54,509 sq.feet. FSI at the rate of
Rs.6,254/- amounting to Rs.34 crore 9 lakhs was sold out under
consent terms at the rate of 3,000 per sq.feet by taking nominal sum of
Rs.10 lakhs. Former managing committee had sold out the FSI of 133
members to detriment and great prejudice of society with hand in
gloves and in collusion with defendant No.2. No valuation report to
justify the rates of FSI sold at the rate of Rs.3,000 per sq.feet was
circulated either prior to, during course or after special general body
meeting dated 02.07.2017.
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9) Learned advocate for plaintiff alternatively argued that
under clause-1 (a) of consent terms, the developer defendant Nos.2 was
supposed to get the no objection of owners i.e. defendant No.3 to 5 for
demolition of the office block within one year or grace period failing
which the plaintiff society had option to revoke the consent terms.
Defendant No.2 failed to get the NOC from defendants No.3 to 5 within
one year. Therefore, the new managing committee had passed
resolution dated 14.04.2019 wherein plaintiff society revoked the
consent terms dated 17.07.2017. Copy to that effect is sent vide letter
dated 25.07.2019. Therefore, the consent terms stands revoked. On this
ground also the consent terms stands revoked.
10) Learned Advocate for plaintiff relied upon Section-
73, byelaws No.108, 114, 126, 131(a), (c), (e), 136, 137, 153 (a) and
(b) of The Act. He relied upon the observations in the case of
S.P.
Chengalvaraya Naidu (dead) By LRS. V/s. Jagannath (Dead) by LRS
and others.
5. Relying upon the aforesaid points, learned advocate for
plaintiff vehemently submitted that if all the aforesaid points are taken
into account, it is crystal clear that the former managing committee has
committed fraud upon the court and has obtained the consent decree in
violation of rules, provisions, byelaws, circulars, notifications of The
Act, in collusion and in hand in gloves with defendant No.2. The
consent decree therefore passed on 18.07.2017 needs to be set aside.
6. Per contra, Learned Advocate for defendant No.2 has
strenuously made following submissions -
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1) The consent terms dated 17.07.2017 were executed
in between plaintiff society and defendant No.2 after prolonged
deliberation, discussion and negotiation for valuable consideration and
after following due process of law. The person who has verified present
notice of motion i.e. Mr. Girish Nair had actively participated in
finalising the consent terms. He was very well present in all the
meetings which finalised the consent terms. The consent terms dated
17.07.2017 were voluntarily entered into by plaintiff and defendant
No.2. The court had recorded the satisfaction of same. Therefore, the
decree passed in terms of consent terms is valid in the eyes of law.
Plaintiff society is estopped from contending contrary. He relied upon
observations in
Kiran Narottamdas Merchant V/s. Ravindra
Narottamdas Merchant and Ors on this point.
2) Plaintiff society though is challenging the consent decree,
there is no challenge to the resolution dated 02.06.2017. Plaintiff is
challenging the business done by the former managing committee, the
election of the officers of the managing committee, conduct of the
special general body meeting which is all covering the dispute under
Section-91 of The Act. Without challenging under The Act, plaintiff has
moved this court. Therefore, this court will not have jurisdiction to
decide this notice of motion. The Act confers exclusive jurisdiction upon
the co-operative court under Section-91 of The Act, and byelaw No.174
(B) to decide all issues between society and its members touching the
business of the society.
3) Girish Nair, the applicant is not authorized to represent the
society. He is neither secretary nor chairman of plaintiff society.
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4) The applicant has not challenged the fact that special
general body meeting was convened by chairman and was conducted on
02.07.2017. The purpose of said special general body meeting was to
spell out the stance of members on each point of the draft consent terms
and reach an acceptance of the same by the society in such a way that
essence of the terms of settlement result in maximum benefits to the
society and members and minimize the impact of any loss/development
of liability. Mr. Girish nair was present during the said special general
body meeting.
5) Defendant No.2 was not concerned with the internal
disputes of plaintiff society. Roshani Udyavar was elected member of the
then managing committee and as per byelaw No.125, the managing
committee is entitled to elect chairman, secretary, treasurer from
amongst the members of the committee and hence fresh election as
construed by applicant is not required.
6) There is no explanation as to how defendant No.2 has
played fraud upon the court and plaintiff society.
7) The complaint of Mr. Girish Nair against the members of
the former managing committee for causing loss to society by executing
consent terms and for recovery of said loss is pending before the
registrar.
8) The consent terms challenged by defendant No.3 to 5 in
Notice of Motion No.2828/2017 was dismissed.
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9) The plaintiff society failed to produce any document to
show that the society had acted upon or intimated about alleged
termination of consent terms to defendant No.2. On the contrary, in the
special general body meeting convened by the new managing
committee on 13.10.2019 had specifically decided not to challenge the
said consent terms. It was also decided in this meeting to constitute a
special committee of 13 members to look into the clauses of consent
terms and to suggest points for negotiations to plaintiff society.
10) The plaintiff society never exercised its option of
termination even though it is alleged that plaintiff society resolved to
revoke the consent terms in minutes of special general body meeting
dated 14.04.2019. He relied upon Section-4 of Indian Contract Act,
1872 on this point. There was no communication in this behalf to him
by plaintiff society.
11) In compliance with clause-1(a) of consent terms, defendant
No.2 obtained written consent from owners for demolition of office
block. Defendant No.2 intimated this fact by letter dated 22.07.2019 to
plaintiff society. In response to this letter, plaintiff society has intimated
about alleged cancellation of consent terms illogically claiming that
adoption of audit report by special general body meeting dated
14.04.2019 has led to automatic cancellation of the consent terms.
12) After informing by letter dated 22.07.2019, the defendant
No.2 has executed consent terms with owners i.e defendant Nos.3 to 5
in Writ Petition No.13683/2018 before Hon’ble Bombay High Court.
This writ petition is disposed of in terms of consent terms dated
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30.09.2019. The owners have agreed to demolish the office block as per
consent terms dated 30.09.2019 in furtherance of letter dated
22.07.2019. Therefore, the intimation of alleged automatic cancellation
of consent terms is illegal, illogical, and bad in law. Defendant No.2 has
performed its obligation under consent terms during the grace period
and before communication of alleged cancellation of consent terms by
applicant society.
13) Section-7(1) of MOFA Act, is not applicable as plaintiff
society has agreed to allow the unused FSI with respect to undivided
portion of land conveyed to plaintiff society under deemed conveyance
order dated 20.04.2015 read with conveyance deed. Therefore,
individual consent is not required as society is now owner of the
undivided portion of land and unconsumed development rights are sold
to defendant No.2.
14) The auditors report dated 29.12.2018 is reproduction of
details provided by submissions of the society made with regard to
complaint with Assistant Registrar and matter pending inquiry. They are
not findings of the auditor. The observations of the auditor do not
amount to order nor conclusive evidence. The inquiry before Registrar is
pending.
7. In support of his submissions learned advocate for
defendant relied upon Section-72, 91 of The Act, Sec.7- of MOFA Act,
Byelaws-96, 110, 131 (e), 172 to 174, 174 (B) of The Act. He also
relied upon the observations in
Jayantilal Investments V/s. Madhuvir
Co-operative Housing Society and Ors., Vardhman Developers Limited
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V/s. Andheri Krupa Prasad Co-operative Housing Society Limited.
8. Learned advocate for plaintiff relied upon observations in
case of
R. Rajanna V/s. S.R. Venkataswamy and others reported in
(2014) 15 SCC 471 to counter the arguments on the point of
jurisdiction raised by learned Advocate for defendant.
REASONING & DISCUSSION
Maintainability of this notice of motion in this suit.
9. The argument of learned advocate for plaintiff on the point
of maintainability of this notice of motion in this suit has substance.
Under Order 23 Rule 3A of CPC, there is bar to file seperate suit
challenging lawfulness of consent decree. Similarly, appeal is not
maintainable challenging consent decree u/sec.96(3) of Code of Civil
Procedure. The observations in the case of
R. Rajanna cited
supra relied
upon by learned advocate for plaintiff are squarely applicable. It is
observed that-
“It follows that in every case where the question arises
whether or not there has been a lawful agreement or compromise in
writing and signed by the parties, the question whether the
agreement or compromise is lawful has to be determined by the
court concerned. What is lawful will in turn depend upon whether
the allegations suggest any infirmity in the compromise and the
decree that would make the same void or voidable under the
Contract Act. More importantly, Order 23 Rule 3-A clearly bars a suit
to set aside a decree on the ground that the compromise on which
the decree is based was not lawful. This implies that no sooner a
question relating to lawfulness of the agreement or compromise is
raised before the court that passed the decree on the basis of any
such agreement or compromise, it is that court and that court alone
who can examine and determine that question. The court cannot
direct the parties to file a separate suit on the subject for no such
suit will lie in view of the provisions of Order 23 Rule 3-A CPC.”
10. The decree dated 18.07.2017 against defendant No.2 is
passed in terms of consent terms. Therefore, in light of aforesaid
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provisions and the observations in the aforesaid citation, no doubt can
be taken with respect to maintainability of this notice of motion in
present suit. The observations in the case of
R. Rajanna relied upon by
learned advocate for plaintiff are squarely applicable in present case.
The arguments of learned advocate for plaintiff therefore, on this point
has substance and therefore, acceptable.
Whether decree passed on consent terms is null & void
11. The main crux in present notice of motion is whether the
decree passed on consent terms dated 18.07.2017 between plaintiff and
defendant No.2 is obtained by committing fraud and in violation of the
rules, laws, byelaws and notifications of the Act, and is therefore, null
and void.
12. The consent terms dated 17.07.2017 is the contract
between plaintiff and defendant No.2. Any contract which is without
free consent of parties is void. What is free consent is defined in Sec.14
of Indian Contract Act, 1872. If the consent is obtained by playing
fraud, misrepresentation, coercion, undue influence, mistake, same is
not free consent. Therefore, if any of the parties to the consent terms
plays fraud upon the other party or upon court, the consent terms
would be void. Fraud is defined in Sec.17 of the Indian Contract Act. It
reads as follows -
“17. Fraud” defined - “Fraud means and includes any of
the following acts committed by a party to a contract, or
with his connivance, or by his agent, with intent to deceive
another party thereto or his agent, or to induce him to
enter into the contract -
1) the suggestion, as a fact, of that which is not true, by
one who does not believe it to be true ;
2) the active concealment of a fact by one having
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knowledge or belief of the fact;
3) a promise made without any intention of performing it;
4) any other act fitted to deceive;
5) any such act or omission as the law specially declares to
be fraudulent.”
13. Therefore, applicant has to point out that either defendant
No.2 or the former managing committee has played fraud upon each
other or upon court in order to get success in this notice of motion.
14. As stated in the arguments of learned advocate for plaintiff,
following are the interalia grounds for consent decree being obtained by
fraud. According to plaintiff, Roshani Udyavar was not the elected
secretary of former managing committee. The former managing
committee did not follow the procedure as laid down in Sec.73 CB of
Maharashtra Societies Co-operative Act for election of alleged secretary
i.e. Roshni Udyavar. Further, according to plaintiff, there was no
adequate strength, quorum to conduct the special general body
meeting. The plaintiff society consisted of 133 members. Therefore,
plaintiff committee required the strength of 13 managing committee
members. However, as 7 committee members had resigned, there were
only 6 managing committee members remaining. Therefore, the
plaintiff society did not have adequate quorum for convening the special
general body meeting on 02.07.2017. Further according to plaintiff, the
so called secretary Roshni Udyavar of former managing committee was
not present in the special general body meeting. The notice of the
special general body meeting was not given to all members of the
society. Further, the consent terms prepared were also not circulated to
all the members of the society. In short, the former managing committee
did not follow the rules, provisions, byelaws of The Act more specifically
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Section-73, byelaws No.108, 114, 126, 131(a), (c), (e), 136, 137, 153
(a) and (b) of The Act. The alleged secretary Roshni Uyavar therefore,
cannot authorize chairman Mr. Anup Lalwani to present and sign the
consent terms in court. Therefore, the authority letter issued by Roshni
Udyavar authorising Mr. Anup Lalwani to present and sign the consent
terms in court is illegal, null and void.
15. All the aforesaid provisions reads as follows -
Section 73 CB – State Co-operative Election Authority –
(1) The superintendence, direction and control of the
preparation of the electoral rolls for, and the conduct of,
all elections to a society shall vest in the authority called
‘the State Co-operative Election Authority’ as may be
constituted by the State Government in that behalf, Every
general election of the members of the committee and
election of the officer-bearers of a society including any
casual vacancy to the extent applicable shall be held as per
the procedure prescribed.
(2)………...
(emphasis supplied.)
Byelaw No.108 - “108. The Committee shall finalise the
draft minutes of every General Body Meeting of the
Society within 3 months of the date of the meeting and
circulate the draft minutes amongst all members of the
society within 15 days of the meeting of the Committee at
which the draft minutes, were finalised. The Members of
the society may communicate to the Secretary of the
Society, their observations, if any, on the draft minutes
within 15 days of the date of their circulation. The
Committee, at its subsequent meeting shall prepare the
final minutes of the General Body Meeting after taking
into consideration the observations, if any, made by the
members on the draft minutes and cause them to be
recorded in the minutes book, by the Secretary of the
society or any other person authorised in that behalf.”
Byelaw No.114 - “114. The Committee shall consist of
11/13/15/17/19 members of the Society. This strength
includes the reservation of seats as provided under section
73 B and 73C of the Act.”
The Strength of the Managing Committee and Strength of
the quorum for conducting the meeting would be as under.
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No. of
Members of
the Society
Strength of the Managing Committee
General
Reserved
Total
Quorum
for
Meeting
Woman SC/ST OBC VJ/NT/
101 to 200 8 2 1 1 1 13 7
“Quorum for the meeting will be simple majority of the
existing Committee Members”
(Emphasis supplied)
Byelaw No.126 - “126. It shall not be competent for the
committee to transact any business unless there is the
quorum at the time of consideration of every item on the
agenda of the meeting of the committee”
Byelaw No.131(a) - “131.(a) The Chairman of the Society
may resign his office as Chairman by a letter addressed to
the Secretary of the Society.”
(b) The secretary or Treasurer of the Society may resign his
office as Secretary or Treasurer by a letter addressed to the
Chairman of the Society.
(c) Chairman/Secretary/Treasurer’s resignation will be
effective only after its acceptance and handing over the
charge of the newly elected Chairman/Secretary/Treasurer,
as the case may be”
(d) The committee may accept the resignation,of the office
of the Chairman/Secretary/Treasurer only after it is
satisfied that the Chairman or as the case may be the
Secretary or Treasurer of the society has brought upto date
the work entrusted to him and has produced the entire
papers and property of the society in his possession before
the committee.
“(e) This fact of acceptance of resignations of the entire
committee by the General Body, shall be communicated to
the Registrar by the out-going officers and registrar may
take necessary action as provided under Section 77 A of
the Act. However, the existing Committee shall continue to
carry on with only routine functioning of the Society till
alternate arrangement is made by the Registrar.”
Byelaw No.136 - “136. The Secretary of the Society shall
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attend every meeting of the Committee and record its
minutes and place same for confirmation before the next
meeting of he Committee, after the minutes are signed by
the Secretary of the Society and the Chairman of the
meeting. In the absence of the Secretary, the Chairman of
the society shall make alternate arrangements for
recording minutes of the meeting”
Byelaw No.137- “137. The members of the Committee
shall be jointly and severally responsible for all the
decisions taken by the committee during its term relating
to the business of the Society. The members of the
Committee shall be jointly and severally responsible for
all the acts and omissions detrimental to the interest of
the Society”
Byelaw No.153 (a) and (b) - 153(a) On receipt of the
audit reports from the Statutory and internal Auditors,
the Secretary of the Society shall prepare draft audit
rectification reports of the objections raised and
suggestions made, in the form ‘O’ prescribed under Rule
73 of the MCS Rules 1961 and place the same before the
meeting of the Committee, held next after the date of the
receipt of the audit reports, for its approval. The
Committee shall submit Audit Rectification Report to the
Registrar and the Annual General Body Meeting of the
Society.
(b) If the Committee of the Society fails to submit Audit
Rectification Report to the Registrar and the Annual
General Body Meeting, all the members of the Committee
shall be deemed to have committed an offence under
Section 146 of the Act shall be liable for penalty under
Section 147 of the Act.”
16. In counter learned advocate for defendant No.2 relied
upon following byelaws -
“96. When a Special General Body Meeting should be
convened-A Special General Body Meeting of the society
may be called at any time at the instance of the Chairman
or by the decision of the majority of the Committee and
shall be called within one month of the date of the receipt
or requisition in writing signed by at least 1/5th of the
members of the society or from the Registering Authority
or from the Housing Federation, to which the society is
affiliated.”
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“110. General body meeting to be the supreme authority
– Subjects to the provisions of the Act, the Rules and the
bye-laws of the society, the final authority of the Society
shall vest in its General Body Meeting summoned in such
manner as is specified in these bye-laws.”
131. (e) In case entire committee intends to resign, the
resignation of the committee shall be placed before the
General Body and such resignations be effective from the
date of acceptance of such resignations by the Body. This
fact of acceptance of resignations of the entire committee
by General Body, shall be communicated to the Registrar
by the outgoing officers and Registrars may take
necessary action as provided under Section77 A of the
Act. However, the existing committee shall continue to
carry on with only functioning of the society, till alternate
arrangement is made by the Registrar”
172. Complaint application - Member/Members shall
submit their complaint application to any of the office
bearers of the society, in writing, giving thereby the
details of the complaint.
173. After receipt of such complaint application, the
committee shall take decision thereof in the coming
managing committee meeting . Such decision shall be
communicated to the concerned member, within 15 days
thereafter.
174. If the member/members are not satisfied by the
decision of the committee or does not receive any
communication from the committee within 15 days, the
complainant member may approach below mentioned
competent authority.”
174 (B). Co-operative Court-
Matters for Co-operative court
Disputes between the Members and/or the members and
society, falls under Section91 of the MCS Act, 1960 such
as :-
Disputes pertaining to :-
(i) Resolutions of the Managing Committee and General
Body.
(ii)……..
(iii)…….
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(iv)…….
(v)……..
(vi)…….
(vii)…….
(Emphasis supplied)
17. The aforesaid grounds upon which plaintiff is relying are all
relating to the election of committee members, conduct of the special
general body meeting, management or business of the plaintiff society.
Therefore, the grievance of plaintiff is with respect to the aforesaid facts
of the election of committee members, conduct of the special general
body meeting, management or business of the plaintiff society. It is well
settled law that if there is a dispute of society, its committee, any past
committee, any past or present member of the society touching the
constitution, election of committee members, conduct of general
meetings, management or business of society, the same has to be dealt
under Sec.91 of the Act. There is bar u/sec.163 r/w Sec.91 of the Act to
deal with such dispute by Civil Court.
18. Section 91 of the Act reads as follows -
Section 91, Disputes-
“(1) Notwithstanding (anything contained) in any other
law for the time being in force any dispute touching the
constitution (elections of the committee or its officers
conduct of general meetings, management or business of a
society shall be referred by any of the parties to the
dispute, or by a federal society to which the society is
affiliated or by a creditor of the society (to the co-
operative Court) if both the parties thereto are one and
other of the following -
(a) a society its committee, any past committee, any
past or present officer any past or present agent, any past
or present servant or nominee, heir or representative of
any deceased officer, deceased agent or deceased servant
of society, or the liquidator of the society (or the official
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assignee of a de-register society)
(b) a member, past member of a person claiming
through a member, past member of a deceased member of
society, or a society which is a member of an society (or a
person who claims to be a member of the society)
(c) a person other than a member of the society with
whom the society any transactions in respect of which any
restrictions or regulations have been imposed made or
prescribed under sections 43, 44 or 45 and any person
claiming through such person.
(d) a surety of a member, past member or deceased
member, or surety or person other than a member with
whom the society has any transactions in respect of which
restrictions have been prescribed under sections 45,
whether such surety person is or is not a member of the
society.
(e) Any other society, or the liquidator of such a society
(or-de-register society or the official assignee of such a
de-registered society)”
19. Section 163 reads as follows -
(1) Save as expressly provided in this Act, no Civil or
Revenue Court shall have any jurisdiction in respect of -
(a) The registration of a society or its by-laws, or the
amendments of its by-laws, or the dissolution of the
committee of a society, or the management of the society
on dissolution thereof; or
(b) any dispute required to be referred to (the co-
operative court) for decision;
(c) any manner concerned with the winding up and
dissolution of a society.
(Emphasis supplied)
20. Therefore, if plaintiff has any grievance with respect to the
election of committee members, conduct of the special general body
meeting, management or business of the plaintiff society, plaintiff has to
raise before appropriate forum. No doubt, in present notice of motion
plaintiff is not challenging directly the resolution passed in the special
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general body meeting dated 02.07.2017, but as discussed above,
plaintiff in this notice of motion is indirectly raising all grievances with
respect to the resolution passed in special general body meeting dated
02.07.2017. All the aforesaid grievances of plaintiff are with respect to
the election of committee members, conduct of the special general body
meeting, management or business of the plaintiff society. Indirectly in
this notice of motion, plaintiff is trying to get orders by not moving
before appropriate forum.
21. When this court had raised query with respect to this point
& Sec.91 and Sec.163 Of MCS Act, learned advocate for plaintiff relied
upon case of
R. Rajanna cited
supra.
22. No doubt as discussed above,
R. Rajanna’s case speaks
about agitating the question whether agreement or compromise is
lawful or not by the court which passed the decree but it no where
states to encroach upon jurisdiction of another forum when the court
passing consent decree is not vested with such jurisdiction & when there
is express bar provided in MCS Act. As discussed above, the grievance of
applicant is between members & former managing committee of
plaintiff society touching the conduct of election of managing
committee members of society, business & administration of society.
There is no dispute between former managing committee & defendant
No.2 who had entered into consent terms. Nor any act of parties to
consent terms i.e. either former managing committee of plaintiff society
or defendant No.2 while filing consent terms in court is pointed out to
be deceiving or amounting to playing fraud upon court as is embraced
in Sec.17 of definition of fraud in contract Act. All the terms in consent
terms were discussed, negotiated prior in special general body meeting
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dated 02.07.2017 & prior to that as discussed in detail in subsequent
part of this order. Therefore, I am unable to digest arguments of learned
advocate for plaintiff on this point.
23. It is important to note that the former managing committee
had filed the consent terms in court. Therefore, the act of former
managing committee is binding upon the subsequent managing
committee i.e. new managing committee. Unless and until the
resolution passed in special general body meeting dated 02.07.2017,
the election of the Roshni Udyavar, the conduct of the special general
body meeting, the business of the society which is alleged to be in
violation of the byelaws is challenged and set aside, same will be
binding upon the subsequent managing committee i.e. the new
managing committee. Concluding that the provisions of the Act, rules,
byelaws, notifications and circulars are followed or not followed by the
earlier managing committee of plaintiff society will directly affect the
passing of resolution dated 02.07.2017 which is business of society.
Therefore, indirectly it touches the resolution dated 02.07.2017 passed
by the former managing committee of plaintiff society. Present new
managing committee will be estopped from contending contrary to the
act of former managing committee unless and until the act of former
managing committee is got declared as illegal and set aside. As
discussed above, this is the arena of Co-operative Court as provided in
Sec.91 of Act. If plaintiff fails to challenge the acts of earlier managing
committee, the resolution passed in the special general body meeting
will not be set aside; it will be then binding upon plaintiff and therefore,
same will operate as estoppel against new managing committee.
Nothing is on record that plaintiff has challenged the Acts of former
managing committee with respect to appointment of Roshni Udyavar,
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the conduct of special general body meeting, the business of the former
managing committee before appropriate forum to get it set aside. In
such scenario, the observations in the case of
Vardhman Developers
Limited V/s. Andheri Krupa Prasad Co-operative Housing Society
Limited 2015(4) ALLMR 651 and Kiran Narottamdas Merchant V/s.
Ravindra Narottamdas Merchant and Ors. 2013 (7) ALLMR 143 will
squarely apply.
24. In case of
Vardhaman Developers Limited, members of the
defendant No.1 society filed suit against the plaintiffs and defendant
No.1 society under section 91 of the Maharashtra Co-operative Societies
Act 1960, interalia praying for a declaration that the managing
committee of the society functioned illegally and in violation of the
Maharashtra Co-operative Societies Act, rules and bye-laws for the
period 2003 to 2013 and for a declaration that all the decisions taken
by the managing committee of the society are illegal, in-operative,
without authority of law and are not binding on the members of the
society. The applicants could not point out any order staying the effect
of the resolutions passed by the society.
25. Even in present case, plaintiff did not file any such suit for
declaration to set aside the acts of former managing committee about
which plaintiff has raised grievances with respect to election of
managing committee members, conduct of special general body
meeting, business of former managing committee.
26. Further it is observed in case of
Kiran merchant that
-
“14. The principle of law is, hence, well settled. Where the Court
delivers or pronounces a judgment by consent, what the Court
does not effect is to place its imprimatur on a contractual
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arrangement between the parties. The agreement between the
parties which forms the foundation of the judgment is a contract
nonetheless like any other contract. A judgment by consent,
therefore, binds the parties as effectively as a judgment delivered
upon adjudication and hence, it has been held to constitute an
estoppel as between the parties.”
27. Moving ahead, for sake of orders, even if we keep apart
the aforesaid discussion, let us see whether the argument of learned
advocate for plaintiff applicant on point of fraud is digestible upon
considering the conduct of plaintiff society.
28. The conduct of the plaintiff society, the managing
committee members of plaintiff society, the members of the plaintiff
society in the span from 19.03.2017 till the allegations of fraud were
raised against the former managing committee of plaintiff society i.e.
08.03.2018 will be important to assess as to whether there was element
of fraud.
29. From the documents tendered on record, it appears that till
08.03.2018 there were no allegations of alleged fraud against the
former managing committee. From the documents tendered on record,
it appears that for first time the allegations of fraud by the former
managing committee against the members of the society was alleged in
the letter issued by the plaintiff society to Assistant Registrar of Co-
operative societies dated 08.03.2018. From the documents on record, it
appears that there is no whisper about the alleged fraud as is alleged in
present notice of motion in the next Annual General Meeting dated
20.08.2017 in which there was approval and confirmation of the earlier
minutes of Annual General Meeting dated 07.08.2016 and Special
General Body Meeting dated 02.07.2017.
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30. Further, from the documents on record, it reflects that the
talk of settlement between plaintiff society and defendant No.2 were in
process since the Special General Body Meeting dated 19.03.2017. As
per the notice for Special General Body Meeting dated 05.06.2017,
tendered by defendant No.2 on record, it appears that the notice of
Special General Body Meeting to be scheduled on 10.06.2017 was
displayed along with the agenda which includes all the terms which
were incorporated in consent terms dated 17.07.2017. Thereafter, from
the documents tendered on record by defendant No.2, it appears that
the applicant Mr. Girish Nair had raised objection for scheduling the
Special General Body Meeting on 10.06.2017. Therefore, on his request
the Special General Body Meeting scheduled on 10.06.2017 was
postponed to 02.07.2017. It further appears from the copy of email of
applicant Girish Nair dated 15.06.2017 that he had shown his gratitude
for considering his request for meeting with other friends in the society
for getting clarification on the settlement matter with defendant No.2.
From the copy of this email it appears that all the doubts of applicant
Girish Nair were tried to be satisfied from Mr. Rafiq. There was
discussion and deliberation on the various aspects with respect to the
consent terms with the defendant No.2. Further, the copy of email dated
17.06.2017 of applicant Girish Nair reflects that he was satisfied with
the clarification given, the discussion and deliberation so also the
negotiations and the terms of settlement with defendant No.2. Vide this
email he has expressed his gratitude and also vented his satisfaction to
enter the consent terms. The various aspects with respect to availability
of FSI with society, the rates of FSI, the consequences of not entering
into consent terms, the benefits of entering into the consent terms etc.
were understood by applicant Mr. Girish Nair and then concluding to
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the decision of entering into the consent terms with defendant No.2 by
plaintiff society as need of hour. These emotions and feelings are
expressed by applicant Mr. Girish Nair in aforesaid emails.
31. The fact of payment of 10 lakhs as signing amount, selling
of FSI and all other allegations upon which learned advocate for
plaintiff is harping in this notice of motion were the subjects of agenda
of the Special General Body Meeting convened on 02.07.2017. It is not
disputed that the notice of this Special General Body Meeting dated
02.07.2017 was displayed. There is no counter on the aforesaid facts of
displaying the notice, applicant Girish Nair participating in the
negotiations, deliberation, discussion and getting clarified on his doubts
with respect to entering into settlement with defendant No.2.
32. Though all the aforesaid documents which defendant No.2
tried to rely upon during arguments, were disputed by plaintiff, this
court while rejecting the chamber summons of intervenor Anup Lalwani
to put their defence to present notice of motion had reserved the
discretion to accept the arguments or submissions on behalf of the
applicant if felt necessary to decide present notice of motion. As
defendant No.2 is not member of the plaintiff society, in order to rebut
the allegations of the new Managing Committee in this notice of motion
which are with respect to fraud, the documents are necessary on record
and therefore, the filing of the aforesaid documents by defendant No.2
was permitted. The documents were necessary to decide present notice
of motion smoothly and effectively. Therefore, they are permitted to be
taken on record by overruling the objection of plaintiff.
33. Further, the minutes of Managing Committee meeting
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dated 26.03.2017 reflect that the resignation of Mr. Ashwin Fernandes
the then Secretary of the plaintiff society was accepted. It further
appears that there was subject of appointment of temporary caretaker
secretary on account of resignation of Mr. Ashwin on the agenda of the
Managing Committee meeting held on 15.01.2017 and 19.02.2017. The
agenda No.5 of this meeting further reflects that Ms. Roshni Udyavar
was appointed as acting secretary and all the members had accepted the
said fact. From this minutes, it is also appearing that present applicant
Mr. Girish Nair was present in this meeting as member. Upon the
confirmation and approval of the minutes of the Managing Committee
meeting, Ms. Roshni Udyavar who was earlier member of the former
managing committee started acting as acting secretary since this
confirmation and approval.
34. The three letters dated 16.12.2016, 29.12.2016 and
10.02.2017 of Assistant Registrar Co-operative Society addressed to
plaintiff society upon which learned advocate for applicant has
vehemently argued that the request of former managing committee to
co-opt the Roshni Udyavar as secretary of the society was rejected do
not appear to support the arguments advanced by the learned advocate
for plaintiff. The aforesaid three letters are relied upon by plaintiff. On
perusal of these letters, it nowhere reflects that there was request from
the former managing committee of plaintiff society for co-opting Roshni
Udyavar as the secretary of the society. There is no reference or whisper
about the co-opting Roshni Udyavar as secretary of society in these
letters. On the contrary, as discussed above, Mr. Ashwin Fernandes has
submitted his resignation on 20.03.2017 and which is accepted by the
society on 27.03.2017. Therefore, prior to tendering of resignation by
Ashwin Fernandes how society can request for co-opting Roshni
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Udyavar as secretary through these letters, on 25.11.2016, 20.12.2016
and 23.01.2017. Further byelaw No.115(b)is with respect to co-opting
two expert directors and not for the purpose of co-opting secretary of
society. For this reason also, these letters do not appear to be with
respect to rejecting request of co-opting Roshni Udyavar as secretary of
society. Plaintiff failed to file their letters dated 25.11.2016, 20.12.2016
and 23.01.2017 to show that the former managing committee had
made request to co-opt Ms. Roshni Udyavar as secretary of society vide
these letters. In absence of clear picture as is tried to be depicted by
learned advocate for plaintiff , the arguments of learned advocate for
plaintiff cannot be digested on this point.
35. It is further important to note that the authority letter
authorising Mr. Anup Lalwani to present and sign the consent terms in
court is issued by Roshni Udyavar as acting secretary and not as
secretary of the plaintiff society. This fact is clear from the aforesaid
authority letter tendered on record. As discussed above, the minutes of
managing committee meeting dated 26.03.2017 of which there is no
dispute by the new managing committee has confirmed and approved
the appointment of Ms. Roshni Udyavar as acting secretary of the
plaintiff society which was unanimously accepted by the members in
this meeting. There is nothing on record that even these minutes are
challenged by the New Managing Committee or they are set aside.
Therefore, they do bind present New Managing Committee. If Roshni
Udyavar is acting as acting secretary of plaintiff society on approval of
the members of the Managing Committee meeting dated 26.03.2017,
how the authority letter issued by Ms. Roshni Udyavar can be faulted
with.
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36. It is further pertinent to note that the minutes of Special
General Body meeting dated 02.07.2017 clearly have resolution of
authorising any committee member of the former managing committee
to present and sign the consent terms representing the society and to
execute any document or take any other action on the lines indicated in
the minutes of the Special General Body Meeting dated 02.07.2017.
37. On basis of the minutes of meeting dated 02.07.2017, the
then chairman of plaintiff society Shri. Anup Lalwani, on basis of
authority letter had filed and signed the consent terms in court on
17.07.2017. My predecessor in office had verified the authority letter,
the minutes of meeting, the power of attorney and after finding the
compromise as voluntarily entered into between parties, recorded the
same and posted for orders on 18.07.2017. My predecessor in office
found the consent terms as lawful and no hurdle in passing decree in
terms of compromise and therefore, passed the consent terms decree
against defendant No.2 on 18.07.2017.
38. If all the aforesaid facts are taken into account it is clear
that in special general body meeting dated 02.07.2017 all points of
consent terms were discussed as same was agenda of the meeting. Even
prior thereto whoever including applicant Girish Nair have got clarified
all their doubts with respect to consent terms. The applicant had full
knowledge of the consent terms. Since 19.03.2017 the talks, the
negotiations and deliberations were going on. Applicant also clarified
all his doubts and also shown his gratitude for same by email as
discussed above. As there was nothing sort of element of fraud, same
was not averred in next annual general meeting dated 20.08.2017. If all
this conduct is taken into account can any prudent person say that there
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was any element of concealment, deceit or fraud. Appointment of Ms.
Roshani Udyavar and everything related to and in consent terms was
discussed earlier, members knew, and then resolution was passed on
02.07.2017. Then how one can conclude that there was fraud practised.
The attack on the procedural aspects of convening the special general
meeting, the requisite of adequate strength, quorum for passing the
resolution, special general meeting, circulation of the draft of special
general body meeting, the absenty of Roshni Udyavar in special general
body meeting and she further preparing the minutes etc. are all
procedural aspects which is within the arena of Sec.91 of the Act and
not with respect to playing fraud upon the court or the other party as
required in definition of fraud under Sec.17 of the Contract Act.
39. It is not the case of applicant that Anup Lalwani was not
the chairman, Roshni Udyavar was not the acting secretary, that no
resolution was passed on 02.07.2017, that no minutes were prepared
on 10.07.2017, that no authority letter was issued, that no power of
attorney was executed. It is neither case of applicant that the former
managing committee or Anup Lalwani concealed any facts from this
court. Neither there is any representation of facts which were not true.
Nothing is pointed out on record that former managing committee
knowingly represented something which is not true though believing it
to be not true, or concealed something from court having knowledge or
belief of the fact. The allegations of the plaintiff which are enumerated
above are all allegations by the new managing committee against the
irregularities or fraud by the former managing committee upon the
members of the plaintiff society. As discussed above, this is all relating
to the dispute between the society, managing committee and members
touching the constitution, business and conduct of the society squarely
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coming within the arena of Sec.91 of the Act. There has to be element
of intention of deceiving or concealing the facts from the other party or
from court. There are no pleadings or evidence that the former
managing committee had intention to defraud, had knowledge about
getting more amount from the FSI sold, had intention to defraud by
appointing Roshni Udyavar as acting secretary, in violation of the
provisions of the Act, the byelaws the rules, notifications and circulars.
There is difference in the fraud committed by party upon other party or
upon court to get the consent terms executed on one hand and the
fraud committed by the managing committee against the members of
the society. The former act would squarely come within the arena of this
court to set aside the consent terms. However, the later act would not
fall within the arena of this court. As discussed above, giving findings
on any of the aforesaid allegations reproduced above would be
indirectly deciding the fact that the resolution dated 02.07.2017 is not
as per law which clearly falls under the ambit of Sec.91 of the Act.
40. If plaintiff would have succeeded in showing that though
Anup Lalwani was not chairman but he represented so and got executed
consent terms or any other fact as discussed above, then it would come
within the definition of fraud. As discussed above, in foregoing
paragraph No.31, nothing of such sort is pleaded or is made out.
Whatever allegations are made, are touching the business, affairs of
society, its managing committee and its members.
41. In the cited case of
S.P. Chengalvaraya Naidu the facts are
totally different. In this cited case Jagannath was working as a clerk
with Chunilal Sowcar. He had, on his own volition, executed the
registered release deed (Exh.B-15) in favour of Chunilal Sowcar
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regarding the property in dispute. He knew that the appellants had paid
the total decretal amount to his master Chunilal Sowcar. Without
disclosing all these facts, he filed the suit for the partition of the
property on the ground that he had purchased the property on his own
behalf and not on behalf of Chunilal Sowcar. Therefore, it was observed
that Non-production and even non-mentioning of the release deed at
the trial is tantamount to playing fraud on the court. A fraud is an act of
deliberate deception with the design of securing something by taking
unfair advantage of another. It is a deception in order to gain by
another’s loss. It is a cheating intended to get an advantage.
42. In present case, applicant could not show that the former
managing committee concealed any fact from this court knowingly and
intentionally. Therefore, the observations in aforesaid cited case will not
help plaintiff in present case.
43. The fact of former managing committee being expelled,
administrator being appointed, the re-audit report of Shri. Anirudh
Sengaonkar dated 29.12.2018, the pending enquiry u/sec.88 of the Act,
the factum of appointment of M/s. Thite Valuers and Engineers and its
report dated 31.10.2019 are all facts subsequent to the filing of consent
terms which are not important and not relevant to decide this notice of
motion. Whatever may be the observations made by the auditor Shri.
Anirudh Sengaonkar, they are made from the angle of administration
and functioning of society. The arena of the department of Co-operative
Societies is totally different then the fraud which can be entertained by
this court. Furthermore, the report of Anirudha Sengaonkar dated
29.12.2018 are not depicting any conclusions of him on the allegations
of fraud as is averred by applicant in present case. The observations of
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the Shri. Anirudha Sengaonkar are in the form of raising doubts on the
functioning of the plaintiff society but are not any clear findings on any
of the alleged allegations in present notice of motion. For aforesaid
discussion, these facts are not helpful to applicant in this notice of
motion.
44. If aforesaid discussion, is taken into account, what can be
concluded is that, if conduct of plaintiff society, members of plaintiff
society is taken into account, it cannot be concluded that there was
element of fraud committed upon either of parties or upon court.
45. Learned advocate for plaintiff has further invoked Sec.7
and 7A of the MOFA Act. According to him, consent of all the members
of the society is not taken and without taking such consent, the consent
terms dated 17.07.2017 are entered thereby changing, adding, deleting,
altering the original plan.
46. Learned advocate for defendant No.2 relied upon the
observations in
Jayantilal Investments V/s. Madhuvir Co-operative
Housing Society and Ors in AIR 2007 SC1011 decided on 10.01.2007
on this point. It is observed in this citation that -
“After the amendment question of taking prior consent of flat
takers before constructing any additional structure does not
arise- However, right to construct additional structures/builders
accrue only after approval of plan by competent authority-
Intention of amendment was to remove impediment in
construction, if total lay out allows construction of more
buildings-Obligation of promoter under MOFA to make true and
full disclosure of flat takers remains unfettered even after
amendment – Every agreement between promoter and flat
taker shall comply with prescribed Form V”
47. Sec.7 of the MOFA Act reads as follows -
7. After plans and specifications are disclosed no alterations or
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additions without consent of persons who have agreed to take
the flats; and defects noticed within (three years) to be rectified
---(1) after the plans and specifications of the buildings as
approved by the local authority as aforesaid, are disclosed or
furnished to the person who agree to take one or more flats, the
promoter shall not make
(i) any alterations in the structures described therein in respect
of the flat or flats which are agreed to be taken, without the
previous consent of that person; or
(ii) any other alterations or additions in the structure of the
building without the previous consent of all the persons who
have agreed to take the flats in such building.
(2).....…
(Emphasis supplied)
48. According to this section, once the plan and specifications
of the building is approved by the local authority and is disclosed or
furnished to the person who agrees to take flat, the promoter cannot
make any alteration in the structure described in the plan in respect of
the flat which is agreed to be taken without prior consent of that person
or make any alteration or addition in structure of the building without
prior consent of all the persons who have agreed to take the flats in
such building.
49. It is pertinent to note that in present case, applicant has
pointed out no specific clauses in the consent terms which are affecting
or changing, altering, adding in the structure rather building which is
pertaining to the members of the society i.e. A,B and C wing. Nothing is
pointed out that the defendant No.2 is making any alteration, addition
in the flats which are pertaining to the members of the society i.e. A,B
and C wing. Whatever is reflecting from the consent terms is in respect
to D wing which is not pertaining to the flats, structures of the members
of the society i.e. A,B and C wing. D wing is yet to be constructed.
Therefore, Sec.7 or 7A of MOFA Act will not come in the way of consent
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terms as is argued by learned advocate for plaintiff. The arguments of
learned advocate for defendant No.2 on this point carries merits. Vague
and emotional arguments will not tilt the case in favour of plaintiff
applicant. Unless and until the resolution is set aside, it remains binding
on the applicant and principle of estoppel will come in way of plaintiff.
50. The observations in the cited case of
Jayantilal Investments
are salutary. However, for discussion above, they are not relevant in
present case.
51. Coming to the alternative argument of learned advocate for
plaintiff with respect to plaintiff society invoking clause-1(a) of consent
terms and alleging cancellation of the consent terms.
52. No doubt discretion of revoking the consent terms was
given to plaintiff society vide clause-1(a) of consent terms that if the
defendant No.2 fails to get no objection from the owners i.e. defendant
No.3 to 5 for demolition of office block within 1 year or grace period,
plaintiff society could revoke the consent terms. It is pertinent to note
that though in Special General Body Meeting dated 14.04.2019 it was
resolved that defendant No.2 failed to bring no objection of the owners
within 12 months and therefore, the consent terms should be cancelled,
the further conduct of plaintiff society which is discussed below do not
show that the said resolution of plaintiff society was acted upon. It was
specifically mentioned in this resolution that the defendant No.2 be
informed of this resolution.
53. Though applicant is claiming that the plaintiff society has
informed defendant No.2, vide letter dated 25.07.2019, it is subsequent
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to the letter of defendant no.2 informing plaintiff society that he has
obtained consent from the owners. The letter of defendant No.2 is dated
22.07.2019. Plaintiff society claims to have informed defendant No.2
about their act of revoking consent terms by letter dated 25.07.2019
which is letter issued in response/reply to the aforesaid letter of
defendant No.2 dated 22.07.2019.
54. If plaintiff society had acted upon the resolution passed in
Special General Body Meeting dated 14.04.2019, they would not go for
modification and accepting the consent terms in Special General Body
Meeting dated 13.10.2019. The agenda of minutes of Special General
Body Meeting dated 13.10.2019 is to discuss and deliberate item-wise
the points of the consent terms dated 17.07.2017, to identify and
suggest modifications to the consent terms either part or whole, the
operating part of the clauses thereto, which is giving additional benefits
to the society. It appears that this Special General Body Meeting dated
13.10.2019, was convened by the new managing committee. It is
further reflecting that resolution was passed that present applicant and
Mr. Anup Lalwani who were conversant with the issues shall obtain
current market valuation report/feasibility report on the valuation of
FSI @ Rs.3,000/- per sq.ft. Further it was discussed that if the
difference was considerable viz. more than 20%, then the Managing
Committee would try to renegotiate the FSI rates with the Developer.
These minutes further reflect that all the clauses of the consent terms
were given review and whether any modification is required or not was
discussed and accordingly the resolution was passed and no
modifications were suggested with respect to clause-1(a) of the consent
terms. Similarly, the comment of requiring modification or not was dealt
with for every clause in the consent terms and accordingly the
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resolution was passed.
55. If there is substance in the argument of learned advocate
for plaintiff that the consent terms were revoked by plaintiff society
invoking clause-1(a) of the consent terms then how in special general
body meeting dated 13.10.2019, the agenda was to discuss and
deliberate item-wise the points of the consent terms dated 17.07.2017,
to identify and suggest modifications to the consent terms either part or
whole, the operating part of the clauses thereto, which is giving
additional benefits to the society.
56. Furthermore, if the resolution dated 14.04.2019 was acted
upon, then there was no hurdle for plaintiff society to inform the same
to defendant No.2. There is no explanation as to why plaintiff society
did not inform defendant No.2 till 25.07.2019 till they received the
letter from defendant No.2 dated 22.07.2019. Plaintiff society not
informing defendant No.2 and further the conduct of the plaintiff
society in the Special General Body Meeting dated 13.10.2019 clearly
reveal the conduct of plaintiff to have given the grace period to
defendant No.2 to obtain no objection from the owners after the expiry
of one year as was agreed in clause-1(a) of the consent terms dated
17.07.2019.
57. It was also argued that no prudent person can say that
defendant No.2 has obtained no objection from owners if the averments
in the letter dated 22.07.2019 of defendant No.2 is gone through.
58. On perusal of this letter dated 22.07.2019 issued by
defendant No.2 to plaintiff society, it is clearly revealing that defendant
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No.2 has informed plaintiff society that he has been successful in
arriving composite settlement with owners. It is further pertinent to
note that in pursuance of this letter the defendant No.2 and owners i.e.
defendant No.3 to 5 have entered into the consent terms before the
Hon’ble High Court in Writ Petition No.13683/2018 and this writ
petition is disposed of in terms of consent terms on 03.10.2019.
59. If all the aforesaid conduct of plaintiff society is taken into
account, the arguments of learned advocate for plaintiff that, plaintiff
society had revoked the consent terms cannot be accepted. Per contra,
the arguments of learned advocate for defendant No.2 is acceptable.
60. It was argued by learned advocate for defendant No.2 that
applicant Girish Nair is not authorised to move this notice of motion.
This argument has no force. The plaintiff applicant has tendered on
record the copy of resolution dated 08.07.2019 whereby the chairman,
secretary and the treasurer i.e. the present applicant were authorized to
look into the ongoing cases before this court and all other courts. They
are authorized to file any application on behalf of the plaintiff society in
the pending lis before various forums. In light of this resolution, the
locus of applicant to file present notice of motion cannot be doubted. As
regards the technical point of not filing the same despite objection taken
by defendant No.2 in his reply, same being technical and procedural
part, I do not give any weightage to this aspect. It is settled legal
position as on today that procedural technicalities should not be given
that importance which will become hurdle in the dispensation of justice.
Keeping in mind this legal position, I had allowed the application of
plaintiff to tender the copy of resolution authorizedly to file this notice
of motion even at the stage of arguments.
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61. For all aforesaid discussion, the arguments of learned
advocate for plaintiff do not appeal to my mind. The consent terms
which are recorded by my predecessor in office were after due
verification of confirming the voluntariness of them. I have already
concluded that whatever fraud is alleged by plaintiff is not upon court
or either party in present suit. The case of plaintiff in present notice of
motion is not covered in definition of fraud as defined in Sec.17 of the
Contract Act. Even the alternative argument of plaintiff is not carrying
merits. Therefore, the notice of motion of plaintiff deserves to be
dismissed. Resultantly, I proceed with following order -
ORDER
1. Notice of Motion No. 414/2020 is hereby dismissed.
2. Costs in cause.
3. Notice of Motion No.414/2020 is accordingly disposed of.
(C.P. Jain)
Ad-hoc Judge, (C.R.No.06)
Date : 01.12.2020 City Civil Court, Gr. Bombay
Directly dictated on Computer : 25.11.2020, 26.11.2020, 27.11.2020 & 01.12.2020
Checked on : 02.12.2020 & 03.12.2020, 04.12.2020 05.12.2020 & 07.12.2020
Signed on :10.12.2020.
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“CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER.”
UPLOAD DATE AND TIME : 10.12.2020, 04.41 pm.
NAME OF STENOGRAPHER : Mr. Harshal D. Jagtap
Name of the Judge (With Court
Room No.)
HHJ Smt. C.P. Jain
C.R. No.06
Date of Pronouncement of
JUDGMENT/ORDER
01.12.2020
JUDGMENT/ORDER signed by P.O.
on
10.12.2020
JUDGMENT/ORDER uploaded on 10.12.2020
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