Final Order 1

Order Details: Notice of Motion
Pdf Text: 1
IN THE BOMBAY CITY CIVIL COURT AT MUMBAI
NOTICE OF MOTION NO.1308 OF 2020
IN
STAMP NO. 4094 of 2020
Mrs. Shilpa Anil Bhingarde ]
Age 45 years, R/a 25/A, Soman Nagar, ]
Bal Mukund Marg, Chinchpokli (East), ]
Mumbai – 400 012. ].. Plaintiffs
V/s
1. Deraiya Realtors Pvt. Ltd., ]
F-97, Kohinoor City Mall, Off. L.B.S. Marg, ]
Kurla (West), Mumbai 400 070 ]
2. Mr. Amogh Sawant, ]
Sole proprietor of M/s. Adit Enterprises ]
having office address at 5, Suryaji Niwas, ]
200, Senapati Bapat Marg, Dadar (West), ]
Mumbai – 400 028 ]
Also residing at 1302, “Dhara”, “E” Moses ]
Road, Worli, Mumbai – 400 018. ]
3. Nehru Nagar Guruprasad Co-operative ]
Housing Society Ltd., ]
having address at Ground Floor, building ]
No.40, Mauje Kurla “3” Nehru Nagar, ]
Kurla (East), Mumbai 400 024. ]
4. Maharashtra Housing and Area ]
Development Authority, ]
Griha Nirman Bhavan, Kalanagar, ]
Bandra (East), Mumbai 400 051. ]..Defendants.
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Appearance:
Advocate Mr. Rajesh Dharap for the plaintiff.
Advocate Mr. Pradeep Gandhy for defendant Nos.1 and 2.
Advocate Mr. Hardik Desai for defendant No.3.
CORAM : HIS HONOUR JUDGE
S.R. SALUNKHE.
(C.R. No. 12)
DATE : 3rd OCTOBER, 2020
ORAL ORDER
Whether a third party purchaser of a Flat in a building
proposed to be constructed would have a charge over the land and
building for refund of the amount paid by him in case of failure of the
Developer to develop the property? This question is involved in this
Notice of Motion and the question arose in the way thus.
2. The defendant No.4/MHADA was the owner of the
building No.4 comprising of 40 tenements on a land bearing S.No.229
and 267 and CTS No.12 (part), Mauje, Kurla–3 at Nehur Nagar, Kurla
(East), Mumbai – 400024. It was a ground plus four upper floors
building constructed in 1967 for the persons belonging to low income
group and all the 40 tenements were allotted to such 40 persons called
allottees.
3. Those 40 allottees formed a co-operative housing society
called as “Nehur Nagar, Guruprasad Housing Society Limited” (the
defendant No.3) and it was duly registered on 16.11.1986. The
allotment of the land beneath the tenements was on leasehold basis for
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99 years commencing from 01.01.1967 and the Indenture of Lease was
executed to that effect in favour of the Society in respect of the land on
which the building was constructed. The defendant No.4/MHADA also
sold out those tenements to 40 allottees by deed of sale on 01.01.1997.
Thus, the members of the Society were having ownership right over
their respective tenements situated on the leasehold land owned by
MHADA.
4. The Society took decision to reconstruct the building as it
was in dilapidated condition. The Society entered into an Agreement
for Development on 02.11.2009 with the Defendant No.2 M/s. Amogh
Sawant, a propriety concern of which, Mr. Amogh Sawant was the
Proprietor. The old structure was to be demolished and a multi storied
building was to be constructed by utilizing the admissible F.S.I. The
Society also executed the Power of Attorney in favour of Amogh
Sawant. The Society also executed the Supplementary Agreement dated
03.12.2010 in his favour. The Developer Mr. Amogh Sawant was to
obtain necessary permissions, IOD, CC etc. to start demolition and
reconstruction. The Developer Mr. Amogh Sawant however, could not
obtain such permissions and start the construction work for about six
years. The Society therefore, terminated the development agreement
and supplementary agreement with the Developer Mr. Amogh Sawant
by notice dated 16.03.2015.
5. The Developer Mr. Amogh Sawant had entered into
transactions to sell the additional flats of his free sale component and
several persons had booked the flats and had paid certain amount to the
Developer under the Memorandum of understanding (MOU). They
started insisting the Developer Mr. Amogh Sawant to perform his part of
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the agreement to complete the construction and sell the flats by virtue
of MOU. The plaintiff along with her husband, by the Memorandum of
Understanding dated 31.12.2010 had agreed to purchase a Flat No.905,
admeasuring 484 sq. feet on 9th floor for consideration of
Rs.50,00,000/-. The full consideration amount was paid by them to
Developer Mr. Amogh Sawant on the date of MOU itself.
6. After realizing the fact that the building is not going to be
reconstructed by the Developer Mr. Amogh Sawant in near future, the
plaintiff requested him to cancel the booking of the Flat and refund the
amount of Rs.50,00,000/- paid by her as full consideration of the Flat
proposed to be purchased. The Developer Mr. Amogh Sawant acceded
to her request and a Settlement Agreement was executed between them
on 06.04.2016 whereby, the Developer Mr. Amogh Sawant agreed to
refund entire consideration amount to the plaintiff with interest at the
rate of Rs.12% per annum. The Developer Mr. Amogh Sawant
accordingly, issued two postdated cheques, one of Rs.35,00,000/- and
another of Rs.50,00,000/-, total amount of Rs.85,76,329/- towards the
principal and the accrued interest.
7. The cheques issued by the Developer Mr. Amogh Sawant
were dishonored when presented for encasement. The plaintiff
therefore, with statutory notice to the Developer Mr. Amogh Sawant,
filed criminal complaint bearing S.C.C. No.2000690/SS/2017 against
him under Section 138 of the Negotiable Instruments Act. He was tried
for the said offence and was ultimately convicted on 10.05.2018 and
was sentenced to suffer simple imprisonment of six months and to pay
fine of Rs.85,76,329/-. The fine amount, if recovered, was ordered to be
paid to the plaintiff as compensation under section 357(1) of Cr.P.C.
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According to the plaintiff, the said amount is not recovered and the
Developer Mr. Amogh Sawant is now in jail.
8. The defendant No.3/Society, after terminating the
development agreement, supplementary agreement and revoking the
power of attorney executed in favour of the developer Mr. Amogh
Sawant by notice dated 16.03.2015, executed a new development
agreement with the defendant No.1/Deraiya Realtors on 14.03.2017 to
redevelop the said property. The new Developer was put in place of the
old one. The defendant No.1/Deraiya Realtors obtained necessary
permissions, IOD, C.C. etc. and started demolition of old building and
construction of a new building thereon.
9. The flat purchasers aggrieved by the termination of
development agreement with the old Developer Mr. Amogh Sawant
filed civil suits in this Court and obtained ad-interim injunction
restraining the new Developer/Deraiya Realtors from selling,
transferring or otherwise creating encumbrance in respect of the flats in
the new building to be constructed. The defendant Nos.1 and 3, the
new Developer/Deraiya Realtors and the Society ultimately arrived at
amicable settlement and by this way, nine suits have been disposed of as
settled on 21.08.2020. The suit of the plaintiff was not settled as the
Developer/Deraiya Realtors and the plaintiff did not agree to any
acceptable terms of the settlement.
10. The plaintiff has therefore, filed this suit for declaration of
charge on the land and construction to be undertaken and has prayed
by this Notice of Motion that pending the hearing and final disposal of
the suit, the defendant Nos.1 to 3 or their agents/servants etc. be
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temporarily restrained from selling, transferring or otherwise creating
any encumbrance or creating any further charge on the flat No.905
admeasuring 484 sq. feet on 9th floor of the proposed building, till such
time the plaintiff’s claim as per the terms of settlement agreement dated
06.04.2016 is fully complied by the defendants and to further restrain
them from selling or transferring any other flats in the said building till
the claim of the plaintiff is fully satisfied.
11. The defendant No.1/Deraiya Realtors and the defendant
No.3/Society are unanimous and identical in their reply. They have
challenged the maintainability of the suit itself on the ground that no
cause of action has arisen against them, the suit is barred by law of
limitation and this Court has no jurisdiction to try and entertain the
claim of the plaintiff as the Competent Authority under the Real Estate
(Regulation and Development) Act, 2017 (for short ‘RERA’) would have
jurisdiction. The suit is also bad for mis-joinder and non-joinder of
necessary parties as the husband of the plaintiff, who was the party to
the MOU to purchase the flat and the settlement agreement is not
joined and MHADA is joined though no relief is asked against it. In
particular, the defence of the defendant Nos.1 and 3 is as under:-
12.1. The development agreement with the defendant No.2 Mr.
Amogh Sawant was validly terminated by the defendant No.3/Society
by notice dated 16.03.2015. Since such termination has not been
challenged by the defendant No.2, neither the defendant No.1 nor the
defendant No.3 is bound by the subsequent settlement agreement dated
06.04.2016
per-se executed between the plaintiff and the defendant
No.2. In fact, the defendant No.2 had no authority to agree with any
term affecting the rights of the defendant No.1 and 3 to redevelop the
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disputed property and sell the flats in the new building. Therefore, the
plaintiff cannot base her claim on such unilateral settlement agreement
against these defendants.
12.2. There is no privity of contract between the plaintiff and the
defendant No.1 and 3 and therefore, these defendants are not liable for
any amount as per agreement by and between the plaintiff and the old
Developer Mr. Amogh Sawant.
12.3. The terms of settlement agreement dated 06.04.2016
themselves disclose that the plaintiff has surrendered all her rights over
the booked Flat and has agreed to just have a monetary claim against
the old Developer Mr. Amogh Sawant. Such monetary claim of the
plaintiff is the personal liability of the old developer Mr. Amogh Sawant
and the defendant Nos.1 and 3 are no way liable to discharge the
liability of the old developer Mr. Amogh Sawant.
12.4. The plaintiff has taken action under the law to prosecute
the old developer Mr. Amogh Sawant and he is ultimately convicted and
the compensation of an amount which was agreed to be repaid has been
granted by the Criminal Court. The order of compensation can be
enforced as civil decree and it is the proper remedy for the plaintiff to
invoke against the old developer Mr. Amogh Sawant. The plaintiff
cannot invoke remedies before two forums for the same claim at a time.
Therefore, the suit claim of the plaintiff is not maintainable.
13. In view of rival contentions of the parties and the
submissions made on their behalf, the following points arise for my
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determination with my findings thereon for the reasons recorded
thereunder;
S.No. POINTS FINDINGS
1 Do the plaintiff prove the
prima-facie case ? Partly yes.
2 Whether balance of convenience lies in their
favour ? Partly yes.
3 Whether irreparable loss would be caused to
the plaintiff, if this Notice of Motion is
rejected ?
Yes.
4 What Order? As per Final Order.
R E A S O N S
Point No.1:
14. At the outset, it shall be noted that this is not the stage or
proceeding where the issues of jurisdiction, limitation, maintainability
of the suit, mis-joinder or non- joinder of necessary parties can be
conclusively decided. They would be beyond the scope of this Notice of
Motion.
Prima facie, it appears that this Court has jurisdiction to
entertain and try this suit as it is for declaration of a charge on the
disputed property and no provision in RERA is brought to the notice of
the Court which bars jurisdiction of this Court to entertain such suit.
The bar contained under Sec.79 of RERA speaks about the matters to be
determined by the Authority, Adjudicating Officer and Appellate
Tribunal appointed and established under RERA. It is not shown that
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the subject matter in this suit falls exclusively within the jurisdiction of
those Authorities. The issue of limitation, mis-joinder or non- joinder of
parties can be decided in due course.
15. Mr. Hardik Desai, the learned advocate for the defendant
No.3/Society has relied upon the judgment of the Hon’ble Supreme
Court of India in
Cotton Corporation of India V/s. United Industrial
Bank [AIR 1983 SC 1272], wherein, the maintainability of the suit
viz-
a-viz grant of temporary injunction has been discussed. It is observed
that;
“It is indisputable that temporary injunction is granted
during the pendency of the proceedings, so that while
granting final relief, the Court is not faced with a
situation that the relief become infructous or that during
the pendency of the proceeding an unfair advantage is
taken by the party in default or against whom temporary
injunction is sought. But power to grant temporary
injunction was conferred in aid of or as auxiliary to the
final relief that may be granted. If the final relief cannot
be granted in term as prayed for, temporary relief in the
same term can hardly, if ever be granted”.
16. The learned advocate however is not able to satisfy this
Court, even
prima facie, that as to where there exists express bar for
filing or entertaining the suit for declaration of a charge on the suit
property. Whether the plaintiff succeeds to prove her charge on the suit
property or not is a subject matter of the suit. At this stage, I do not find
any express bar to entertain this suit or grant the relief as prayed for.
Therefore, this judgment does not come in aid to the defendant No.3.
17. The learned advocate has further relief upon the judgment
in
Smr. Maria Tecla Goes Pereria V/s. Denzyl Lobo and Anr. [1993 (1)
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BOM.CR.619] wherein, the suit was sought to be dismissed on the
ground of non-joinder of necessary party. It was held that “
necessary
party is a party without which no effective order or decree could be
made. The Courts have no jurisdiction to take cognizance of such suit
unless such party is joined”. In that matter, the husband was found to be
necessary party and therefore, it was held that the suit filed without his
implement is liable to be dismissed. According to the learned advocate,
in the present case, the settlement agreement was between the plaintiff
and her husband on one part and the defendant No.2 was on the other.
Therefore, the husband of the plaintiff is a necessary party to the suit.
18. In contrast, Mr. Rajesh Dharap, the learned advocate for the
plaintiff has relied upon the Judgment in
Dhannalal V/s. Kalavatibai
[(2002)6 SCC 16] wherein, it is held that;
“The proceeding filed by the co-owner landlords were at
least one comes under one of the categories of section
23-J and were pleadings show cause of action common
to all of them. It was held that the suit would be
maintainable before the Rent Controller. One of the co-
owners alone and in his own right filed a suit for
ejectment of the tenant and it is no defence open to the
tenant to question the maintainability of the suit on the
ground that the other co-owners were not joint as parties
to the suit”.
19. In my view, the above ruling cited by the learned advocate
for the plaintiff would not be applicable to the present case as it relates
to the suit by a landlord against the tenant filed under the provisions of
the Rent Act in which the definition of landlord is given.
20. Admittedly, the husband of the plaintiff was a party to the
settlement agreement with the defendant No.2 Mr. Amogh Sawant. But,
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the fact remains as to whether an effective decree can be passed in this
suit in absence of the husband of the plaintiff, particularly when, the
husband of the plaintiff does not claim any independent right under
that settlement agreement. The answer would obviously be in the
affirmative. In the result, the ruling cited by the learned advocate for
the defendant no.3 Society, which is based on different facts will not
come in aid of the defendant No.3.
21. This propels me to come to the main dispute between the
parties. Mr. Rajesh Dharap, the learned advocate for the plaintiff
submits that the plaintiff does not claim any right over any flat in the
newly constructed building. She just claims a charge over the land and
the building to be constructed thereon for repayment of the dues from
the defendant No.2. The suit falls within the provisions of Section 8 of
the Maharashtra Ownership Flats (Regulation of the Promotion of the
Construction, Sale, Management and Transfer) Act 1963 (for short
‘MOFA’).
22. Suitable reference can be made to Section 8 of the MOFA
which reads as under;
“Section-8: Refund of amount paid with interest for failure
to give possession within specified time or further time
allowed-
If -
(a) the promoter fails to give possession in accordance
with the terms of his agreement of a flat duly completed by
the date specified or any further date or dates agreed to by
the parties, or
(b) the promoter, for reasons beyond his control and of his
agents, is unable to give possession of the flat by the date
specified, or the further agreed date and a period of three
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months thereafter, or a further period of three months if
those reasons still exist,
then, in any such case, the promoter shall be liable on demand (but
without prejudice to any other remedies to which he may be liable) to
refund the amount already received by him in respect of the flat (with
simple interest at nine per cent per annum from the date he received
the sums till the date the amounts and interest thereon is refunded),
and the amount and the interest shall be a charge on the land and the
construction, if any, thereon in which the flat is or was to be
constructed, to the extent of the amount due, but subject to any prior
encumbrances”.
23. Mr. Pradeep Gandhy, the learned advocate for the
defendant No.1 new Developer relies on the Judgment of the Hon’ble
Bombay High Court in
Goregaon Pearl CHSL V/s. Seema Mahadeo
Paryekar and others reported in MANU/MH-2972/2019 wherein, the
definition of the promoter under section 2(c) of the MOFA was referred
which reads as under;-
“promoter” means a person and includes a
partnership firm or a body or association of persons,
whether registered or not who constructs or causes to
be constructed a block or building of flats, or
apartments for the purpose of selling some or all of
them to other persons, or to a company, co-operative
society or other association of persons , and includes
his assignees; and where the person who builds and
the person who sells are different persons, the term
includes both”.
24. According to the learned advocate, the plaintiff being third
party purchaser of flat, the defendant No.2 would be her Promoter and
not the defendant No.1 or 3. Whether the Society can be the promoter
within the meaning of Sec.2(c) of MOFA as regards the rights of third
party purchasers is not a question
res-integra and the same is answered
in this judgment itself. In this judgment, the reference was made to the
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earlier judgment in
Vaidehi Akash Housing Pvt.Ltd. v/s New D.N. Nagar
Co-operative Housing Society Union Ltd. [2015(3) ABR 270] wherein,
the definition of ‘promoter’ in RERA was also considered. It was
observed in Vaidehi’s case thus,
“In this case, the society was the owner of the property
and had entered into an agreement with the developers,
i.e. Vaidehi, for redevelopment of its property. The
redevelopment envisages construction of the Society’s
building to accommodate its members and also
construction of building/s of flats/premises to be sold to
outsiders. The agreement authorizes or entitles the
developers to construct such building/s and
sell/flats/premises therein to outsiders. Such authority
or entitlement is to the developers’ account and in their
own right, and as an independent contractor. If in
exercise of such authority or entitlement, a building is
constructed by the developers, it cannot be said that such
building is caused to be constructed by the Society
within the meaning of Section 2(c) of MOFA”.
25. According to the learned advocate, the defendant
No.3/Society thus, does not come under the definition of the term
‘promoter’. The provisions of Sec.8 of MOFA speaks about the liability of
the promoter. The promoter in case of the plaintiff is the defendant
No.2 and not the defendant No.1 and 3. Thus, whatever liability
incurred under the Settlement Agreement dated 06.04.2016, it is
incurred by the defendant No.2 Mr. Amogh Sawant. The defendant No.1
and 3 were not parties to that agreement nor Mr. Amogh Sawant was
competent to create charge on the property under redevelopment as his
development agreement was already terminated. Thus, according to the
learned advocate, the defendant No.1 and 3 are not liable for the
amount of the plaintiff due from the defendant No.2 Mr. Amogh
Sawant.
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26. In furtherance of his submissions, the learned advocate
gives much stress on the judgment in
Vaidehi (supra) wherein, it held in
para No.16 that;
“That brings us to sum up the result of the above
discussion on the prima-facie case on merits of individual
stakeholders. Prima-facie, it is clear that Vaidehi has
committed breaches of the Society Development
Agreement and that the termination of the Agreement by
the Society was legal and proper. Vaidehi has not made
out any case of its readiness and willingness to perform
its obligation under the Society Development Agreement
or restrain the development of the suit property by the
Society or Rustomjee. The Rustomjee Agreement and its
confirmation by the Society by the Confirmation and
Supplementary Agreement as well as further Agreement
dated 29th January 2011, between the Society and
Rustomjee are valid and proper. Members of the Society
opposing the development through Rustomjee are not
entitled to any interim relief either on the basis of the
aforesaid agreement being in breach of the Society
Development Agreement or on the basis of breach of bye-
laws or contravention of the State Government circular
dated 03.01.2009 or on account of the alleged non-
performance of the offer letter by MHADA or the booklet
or directives of MHADA or indeed on account of any
alleged FSI violation or usurpation. The decision of the
Society in connection with the present dispute are prima
facie taken bonafide and none of the challenges of the
members opposing redevelopment are prima facie
sustainable. None of the third party purchasers, who
claim through Vaidehi under their respective agreements
for sale/allotment letters, have any case for specific
performance of their respective agreements against the
society or Rustomjee. None of these purchasers has any
enforceable right under MOFA against the Society or
Rustomjee.”
27. Thus, according to the learned advocate, the plaintiff being
a third party purchaser claiming through the defendant No.2 Mr. Amogh
Sawant under MOU to purchase a particular flat has no case of specific
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performance of that MOU against the defendant No.1 the subsequent
Developer or against the defendant No.3 Society. According to the
learned advocate, this ruling is apt to the facts in this suit and the ratio
is squarely applicable.
28. Mr. Hardik Desai, the learned advocate for the defendant
No.3/Society by supporting the above argument has further relied upon
the
Haryana Financial Corporation V/s. Gurucharan Singh which was
decided on 13.12.2013, wherein the definition of charge, as given
under section 100 of the Transfer of the Property Act is referred, which
inter alia read as follows:-
“Charge:- Where immovable property of one person
is, by act of parties or operation of law made security
for the payment of money to another, and the
transaction does not amount to a mortgage, the latter
person is said to have a charge on the property; and
all the provisions herein before contained which apply
to simple mortgage shall, so far as may be, apply to
such charge………...”
29. By relying on this judgment, the learned advocate submits
that the charge is a compulsory registerable document and the plaintiff
has no document to show that it was so registered. Therefore, the suit
claim cannot be based on such inadmissible documents. He further
submits that a charge cannot be created, if the immovable property is
not owned by the person to whom the payment is made. Since the
development agreement of the old Developer was terminated, he had
no authority to create a charge on the property owned by the Society.
30. In support of his submissions, the learned advocate relies
upon the judgment of the Hon’ble Madras High Court in
Vasantha V/s.
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Chandran [AIR 2003, MAD 214]. He further submits that no one except
the parties to a contract can be bound by or entitled under that
contract. He has relied upon the judgment of the Hon’ble Himachal
Pradesh High Court in
Harman Singh and others V/s. Smt. Purbi Devi
and others [AIR 2000 HP 108] wherein, it is held in para No.17 as
follows;
“The doctrine of privity of contract Implies a mutuality at
will and is interaction of parties and their successors. It
creates a legal bond or tie or
vinculum juris personal to
the parties. The rule, thus, is that no one except the
parties to a contract can be bound by or entitled under a
contract. This doctrine which debars third party to
enforce a contract forbids the parties to the contract from
enforcing any obligation thereunder against a stranger.
A person cannot be subject to the obligation of a contract
to which he is not a party and the logical consequences is
that a stranger cannot acquire rights under a contract.
This general rule, no doubt, is subject to certain
exceptions.”
31. The anxious consideration of the rival submissions made at
the Bar gives an impression that the matter is argued finally in a suit
for specific performance whereby, the plaintiff seeks to enforce a
contract with the defendant No.2 to purchase a Flat or to refund the
paid amount against the defendant No.1 and 3. The nature and the
scope of the suit claim and the pursuant claim of interim relief shall be
the center point for discussion.
32. As is evident from the prayer clause of the plaint, the suit
is for declaration that the plaintiff has charge in respect of his booked
Flat No. 905 admeasuring 484 sq.ft. on the 9th Floor of the building
proposed to be constructed on the suit land and consequential relief of
injunction to restrain the defendant No. 1 to 3 from selling or
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transferring by any mode whatsoever the said Flat or the similar area as
per the new Plan of the building to be constructed till such time the
plaintiff’s claim as per the terms of the Settlement Agreement dated
06.04.2016 is complied by the defendants. The similar relief is asked in
this Notice of motion as the temporary relief. Such relief is based firstly,
on the terms of the Settlement Agreement dated 06.04.2016 and
secondly, on the provisions of Sec.8 of MOFA.
33. Mr. Rajesh Dharap, the learned advocate for the plaintiff
submits that the defendant No.1 and 3 have settled nine other suits of
similarly placed third party purchasers and the consent decrees have
been passed. As such, there is no scope for the defendant no. 1 and 3 to
treat the plaintiff differently. Rather, the plaintiff is placed at better
pedestal as she has proved the liability of the old Developer Mr. Amogh
Sawant in Criminal Court and he is convicted for such liability.
34. Secondly, according to the learned advocate, the plaintiffs
in nine suits have got temporary injunction in their favour as is asked by
the present plaintiff even though the similar contentions were raised by
the defendant No.1 and 3 and same rulings were cited by them. The
defendants had not raised issues of jurisdiction, limitation, non-joinder
or mis-joinder of necessary parties etc. in those suits. So, there is no
scope to treat the claim of the plaintiff at different footing.
35. Per contra, the learned advocates for the defendant No. 1
and 3 submit that the order of interim injunction passed in nine suit
does not operate as the precedent to this Notice of Motion. Secondly,
those suit were settled in different circumstances and they were arising
on different facts. Therefore, they stand on different footing. Thirdly,
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there is no rule that merely because those nine suits have been settled
by the defendant No.1 and 3, this suit is bound to be settled by the
same manner. Fourthly, unlike the present plaintiff, the plaintiffs in
those none suits had not secured conviction of the old Developer Mr.
Amogh Sawant and got order of compensation which can be executed
as civil decree. Fifthly, the settlement in those nine suit was arrived at
without admitting the suit claim of the plaintiffs and any statement
made in the plaints. The settlement was purely with a view to avoid
unwanted delay in completing the construction which is halted for more
than 11 years. So, the settlement of nine suits cannot be a ground
available for the plaintiff to claim the similar treatment.
36. I find merit in the submissions of the learned advocates for
the defendant No. 1 and 3. The plaintiff cannot claim similar treatment
as in the nine suits as her case is different. Secondly, it is admitted fact
that an attempt was made to settle the dispute in this suit but it was not
arrived at for the reasons best known to the plaintiff and the defendant
No.1 and 3. It is also true that the interim order passed in those nine
suits cannot operate as precedent for deciding this Notice of Motion.
The plaintiff’s case must stand on its own footing. The plaintiff may
succeed or fail as per the merit of her own case.
37. In my view, the suit claim cannot be taken as the claim for
specific performance of contract or as the recovery proceeding in the
form of money suit. It is explicitly clear from the recital of the
Settlement Agreement dated 06.04.2016 that the plaintiff has given up
her claim on the Flat No. 905, which was agreed to be purchased and
she has accepted and acknowledged that her claim against the old
Developer Mr. Amogh Sawant was only monetary claim. Knowing fully
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well this position, the plaintiff has not asked for any Flat in the building
to be constructed by the defendant No.1 new Developer. She has just
asked for a charge on the land and building in respect of booking and
purchase of Flat No.905 or equivalent area as per new approved plan
till the terms in the Settlement Agreement dated 06.04.2016 are
complied with. The plaintiff has neither asked for equivalent Flat in the
new building nor sought to recover the amount as per the Settlement
Agreement dated 06.04.2016 from the defendant No.1 and 3.
38. Under this backdrop, the discussion whether the defendant
no.1 and 3 are liable to refund the amount of the plaintiff as per the
Settlement Agreement dated 06.04.2016 is beyond the scope of the suit
and thus unwarranted. The plaintiff may initiate appropriate proceeding
to recover that amount from the defendant No.2 or if law permits, from
the defendant No. 1 and 3 as well by invoking remedy under RERA or
MOFA or any other law. The question for
prima facie determination is as
to whether there shall be a charge of the claim of the plaintiff on the
land and building under development?
39. To my mind, the answer to this question lies in the
provisions of Sec.8 of MOFA which are already referred. The underlined
portion that
“and the amount and the interest shall be a charge on the
land and the construction, if any, thereon in which the flat is or was to
be constructed, to the extent of the amount due, but subject to any
prior encumbrances” has great importance. This provision is irrespective
as to who is the promoter. Admittedly, the plaintiff had booked the Flat
No.905 when the defendant No.2 was the Promoter. The defendant
No.2 was competent to sell the free sale component as per the
development agreement dated 06.11.2009 which was valid and
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subsisting when the plaintiff booked the Flat on 31.12.2010. His
development agreement was subsequently terminated by the defendant
No.3 Society on 15.06.2015. What would be the effect of such
termination is laid down in the above provision of Sec.8 of MOFA.
40. In absence of such provision, there could be an anomalous
situation where unscrupulous members of the Societies and the
Developers may enter into a development agreement introducing free
sale component. They may collect money from third party purchasers
under such development agreement and then they may suitably
terminate that development agreement and complete the construction
by utilizing those funds through another Developer. The old Developer
may conveniently raise his hands saying that since his development
agreement is terminated, he cannot perform his part of contract and the
Society may claim absence privity of contract to perform and discharge
the obligation of the old Developer qua third party purchasers. The
Legislature was conscious of such situation and therefore, in my view,
the interest of such third party purchasers is protected by creating
charge of their claim to the extent of their dues on both the land and
the construction thereon, whether completed or not and whether it is
undertaken by old or new Developer.
41. The objection of the defendant No.1 and 3 regarding non-
registration of Settlement Agreement 06.04.2016 containing covenant
of charge is not impressive inasmuch as the definition of charge itself
makes it clear that a valid charge can be created either by the act of the
parties or by the operation of law. In the instant case, the charge is
created by the operation of law and therefore, the covenant of charge in
the Settlement Agreement dated 06.04.2016 is notwithstanding. There
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can be valid charge on the suit land and building in absence of such
covenant by virtue of Sec.8 of MOFA.
42. The non-availability of Flat No.905 with same area and
specifications in the new Plan or for that matter, the earlier sale of Flat
No.905 on the 9th Floor as per new Plan cannot be the impediment in
creating valid charge on the suit land and building to be constructed
thereon. While termination of the development agreement of the old
Developer Mr. Amogh Sawant, the defendant No.1 and 3 i.e. the new
Developer and the Society shall have legal notice of the provisions of
Sec.8 of MOFA that the third party purchasers would have charge on the
land and construction to be carried thereon to the extent of their dues.
Had there not been the development agreement with the old Developer
by the defendant No.3 Society, there could be no occasion for third
party purchasers to book their flats in the building to be constructed.
When the new Developer comes in, it is his duty to see what are the
rights and liabilities accrued or incurred by virtue of old development
agreement. Despite being conscious of the said fact, the defendant No.1
the new Developer stood in place of old Developer.
43. So, the suit land and the construction to be carried thereon
shall be subject to a charge on them irrespective of the fact that the Flat
No.905 with certain specification is not available or it was already sold.
The buyers and sellers shall discharge their duties under the law and
any breach therein shall incur their liability accordingly. In view of these
reasons, I find the
prima facie case in favour of the plaintiff and thus,
the point No.1 is answered accordingly.
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Point No.2:
44. Insofar as the balance of convenience is concerned, the first
prayer (a) of the plaintiff is that the defendant No.1 to 3 be restrained
by an order of temporary injunction from selling transferring or
otherwise encumbering or from creating any further charge or from
dealing with the suit Flat No.905 admeasuring 484 sq.ft. on the 9th
Floor or the area as per the new plan. Here, the Flat No.905 as per the
old plan is not going to be constructed. Therefore, such flat is not
available for creating the charge. However, the alternate prayer of the
plaintiff that the area as per the new plan, which would sufficiently
indemnify the claim of recovery of the dues of the plaintiff be charged
can be justified.
45. However, the plaintiff cannot claim anything more than to
secure the repayment of her dues arising out of the Settlement
Agreement dated 06.04.2016. Therefore, the prayer (b) in which, the
plaintiff seeks to restrain the defendant No.1 to 3 from selling,
transferring or otherwise encumbering any of the flats in the new
building to be constructed cannot be granted. Thus, the balance of
convenience lies with the plaintiff to the extent of alternative prayer in
Clause (a) viz. temporary injunction in respect of the suitable area in
the new building as per the new plan which can sufficiently indemnify
the dues of the plaintiff. In the result, the point No.2 is answered
accordingly.
Point No.3:
46. Insofar as the question of irreparable loss is concerned,
having
prima facie proved that the plaintiff is entitled to create valid
charge on the land and construction of new building, refusal of the
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temporary relief to the extent as mentioned in forgoing paragraph
would result in causing irreparable loss to her as it would be highly
difficult for her to recover her dues. Secondly, the law creates such
charge and therefore, there is no reason to deny such relief to the extent
she is entitled. The relief in Clause (b) is required to be denied as it
exceed her entitlement. Granting injunction to prevent sale or transfer
of the flats in new building to be constructed would ultimately stall the
construction itself. The plaintiff having no right or interest in those flats,
is not entitled get such temporary injunction against the defendants.
47. Granting temporary injunction against the defendant No.2
Mr. Amogh Sawant is of no avail to the plaintiff as he has nothing to do
with the land and the new construction to be carried thereon as his
development agreement is already terminated. The plaintiff has not
prima facie proved that the defendant No.2 still has any right or lien
over the land or construction to be undertaken thereon. Therefore, I
hold that the plaintiff is entitled to get temporary injunction only
against the defendant No. 1 and 3 who are the owner and Developer of
the new building.
48. Insofar as the defendant No.1 and 3 are concerned,
granting temporary injunction against them as indicated above will not
cause any hardship or irreparable loss to them. Neither their
construction or sale of the flats in free sale component are going to be
stalled or halted because of such injunction. All that is required to be
done by them is to specify and retain the area in the new building
which would sufficiently indemnify the dues of the plaintiff as per the
Settlement Agreement dated 06.04.2016. Needless to say what is due to
the plaintiff.
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49. In view of these reasons, point No.3 is answered
accordingly and as a result of this, the following order.
O R D E R
1. The Notice of Motion No.1308 of 2020 is hereby partly made
absolute.
2. The prayer made in Clause (b) is rejected and alternative
part of Clause (a) is allowed.
3. The defendant No.1 and 3 are temporarily restrained from
selling, transferring, encumbering or otherwise dealing with, by
the manner whatsoever, an area to be specified by them in the
new building to be constructed as per the new plan, which would
sufficiently indemnify the dues of the plaintiff arising out of the
Settlement Agreement dated 06.04.2016, till the time such dues
are fully satisfied or till the the date of the decision of the suit,
whichever is earlier.
4. The prayers against the defendant No.2 are rejected.
5. The Notice of Motion No. 1308 of 2020 stands disposed of
accordingly.
(SHIVAJI. R. SALUNKHE)
Judge
City Civil Court,
Date: 03/10/2020. Gr. Bombay.
Dictated on : 03/10/2020
Transcribed on : 03/10/2020
Signed on : 03/10/2020.
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CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER.”
03/10/2020 At 12.30 p.m. MRS. SUPRIYA S. PAWAR
UPLOAD DATE AND TIME NAME OF STENOGRAPHER
Name of the Judge (With Court
Room No.)
HHJ MR. S. R. SALUNKHE
(C.R.NO.12)
Date of pronouncement of
Judgment/Order
03/10/2020
Judgment/Order signed by P.O. on 03/10/2020
Judgment/Order uploaded on 03/10/2020
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