Order 1

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IN THE CITY CIVIL COURT FOR GR. BOMBAY AT MUMBAI
SUMMARY JUDGMENT NO. 07 OF 2021
IN
COMMERCIAL SUIT NO. 263 OF 2019
Universal Builders )
Through its proprietor )
Mr. Sultan Ahmed Qureshi )
Having address at 505, )
Sane Guruji Marg Silver Arch )
Ground Floor, Gora Gandhi )
Compound, Tardeo, )
Mumbai 400 034 )......Plaintiff
Vs.
Azad Amarchand Jain )
Age Adult, Occupation: Not Known )
Residing at Flat No.705,
Silver Arch C.H.S. Ltd., Tardeo )
Division, Bombay 400 034 ).......Defendant.
APPEARANCE:
Adv. S.P.Shinde for the plaintiff.
Adv. Ms. Asha J. Bhuta for the defendant
CORAM : RAJESH A. SASNE
ADHOC JUDGE
(C.R.No.32)
DATED : 17th February, 2022
JUDGMENT
This application for summary judgment is filed by the
plaintiff under Order XIIIA of the Code of Civil Procedure, 1908 to pass
judgment on a claim.
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In brief, the plaintiff's case is as under :
2. The plaintiff has filed suit for recovery of balance amount
of consideration on the basis of registered agreement for sale executed
between the plaintiff as a builder and the defendant as a flat purchaser.
On 30.09.2006, the plaintiff has executed said agreement for sale of flat
in favour of defendant. Total amount of consideration was
Rs.24,40,000/. The defendant has paid Rs.19,40,000/. It was agreed
between the parties that balance amount of consideration
Rs.5,00,000/ shall be paid by the defendant at the time of taking
possession of the said flat.
3. The plaintiff has completed the construction of the building
and applied for occupancy certificate in year 2012. During the pendency
of said application, the defendant insisted for possession of the said flat
for carrying out the furniture work. In spite of the fact that the balance
amount of consideration is unpaid, the plaintiff handed over the
possession of said flat to the defendant for limited purpose of carrying
out the furniture work. However, after completion of furniture work,
the defendant has not returned keys of the said flat and since then the
defendant is in occupation of the said flat. As the defendant has
received possession of the flat, he is liable to pay balance amount of
consideration of Rs.5,00,000/ to the plaintiff. By legal notice dated
19.09.2018, the plaintiff called upon the defendant to pay said amount.
In spite of receipt of demand notice, the defendant has failed to pay
said amount. Therefore, the plaintiff has filed this suit to recover said
amount.
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4. It is further case of the plaintiff that deemed conveyance
has been allowed in favour of the society and now everything is under
the control of society. Now the defendant cannot have any grievance
against the plaintiff. According to the plaintiff, the defendant has no
real prospect of successfully defending the claim. The defence raised is
sham, bogus and improbable. There is no other compelling reason as to
why the claim of the plaintiff should not be disposed of by allowing the
present application. There is no need to record evidence. With these
contentions, the plaintiff has prayed to pass the judgment on a claim.
5. The application is opposed by the defendant by filing a
reply at Exhibit10. The defendant admits the fact of purchase of flat
No.705 from the plaintiff by an agreement for sale dated 30.09.2006. It
is his contention that it was agreed to put clause in the agreement that
balance amount of Rs.5,00,000/ shall be paid at the time of giving
complete possession of the flat. It is his further contention that there
was delay in handing over the possession and to avoid legal action from
the defendant, the plaintiff offered the defendant to take fit out
possession. Without occupation certificate, the builder cannot give
complete possession to the purchasers. Due to some irregularities in the
building, the plaintiff was not able to obtain occupation certificate and
therefore, the plaintiff gave fit out possession. In the agreement to sale,
there is clause that balance amount of Rs.5,00,000/ shall be paid at the
time of giving possession of the flat. Mere applying for occupation
certificate is not sufficient. It is plaintiff's responsibility to obtain the
occupation certificate. The plaintiff is not entitled to ask balance
amount Rs.5,00,000/ from the defendant as he has not complied with
the agreed terms of the contract. With these contentions the defendant
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has prayed to dismiss the application.
6. The plaintiff by filing rejoinder at Exhibit12, resisted the
contentions made in the reply by the defendant and prayed to allow the
application for summary judgment.
7. Heard the learned advocate for the plaintiff and the learned
advocate for the defendant. Points for determination alongwith my
findings thereon with reasons are as under:
POINTS FINDINGS
1. Whether the plaintiff satisfies that the
defendant has no real prospect of successfully
defending the claim?
No
2. Whether the plaintiff's claim can be disposed of
before recording of oral evidence? No
3. Whether the plaintiff is entitled for judgment
on a claim? No
4. What order ? The Application is
dismissed
REASONS
AS TO POINT NOS.1 to 3:
8. All these points are interlinked with each other and hence
they are taken together for consideration. Following are the admitted
facts:
a) Agreement for sale dated 30.09.2006 has been executed by the
plaintiff as a builder in favour of the defendant as a purchaser in
respect of flat No.705.
b) Out of total amount of consideration, balance amount of
consideration Rs.5,00,000/ is agreed to be paid at the time of
possession.
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c) In the said agreement there is condition that before handing
over the possession of the flat, the plaintiff shall obtain
occupation certificate from local authority.
d) Possession of the flat is handed over to the defendant.
e) The plaintiff has not obtained occupation certificate of the
building.
9. The copy of agreement for sale is annexed with the plaint
at Exhibit'A'. Clause No.4 of the said agreement reads as under:
4) The promoter hereby agrees to observe, perform and
comply with all the terms, conditions, stipulations, and
restrictions if any, which may have been imposed by the
concerned local authority at the time of sanctioning the said
plans or thereafter and shall, before handing over possession
of flat to the flat purchaser, obtain from the concerned local
authority occupation and / or completion certificate in
respects of the flat.
10. In view of clause No.3(IV) of the said agreement, it was
agreed that balance of amount of consideration shall be paid at the time
of giving possession of the flat. Reading of both these clauses together
reveals that, the plaintiff has agreed to obtain occupation certificate
before handing over the possession of the flat and the defendant at the
time of taking possession of the flat shall pay balance amount of
consideration to the plaintiff. Admittedly, the plaintiff has not obtained
occupation certificate from the local authority and the defendant has
not paid the balance amount of consideration.
11. It is the contention of the plaintiff that the society had
applied for deemed conveyance and same has been allowed. It is further
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contention of the plaintiff that thereby now, everything is under the
control of society and the defendant cannot have any grievance against
the plaintiff. The plaintiff has produced and relied on copy of affidavit
of secretary of the society submitted in the proceedings of deemed
conveyance and order dated 10.08.2020 allowing said deemed
conveyance. It shows that deemed conveyance has been granted in
favour of the society. The learned advocate for the plaintiff by relying
on the observations made in paragraph No.2 of the said order, urged
that the question of occupation certificate does not survive further. In
said paragraph No.2 of the said order, it is observed that in respect of
occupation certificate, as per Government Resolution dated 18.09.2018,
society has filed affidavit and therefore, it has been complied and
objections raised by the plaintiff herein cannot be considered. Copy of
said GR is not produced. However available copy on website shows that
Government of Maharashtra by said GR dated 18.09.18 decided that
occupation certificate is not mandatory document for issuing deemed
conveyance. Said affidavit by the secretary of the society is submitted in
accordance with the said GR. Therefore, holding that the occupation
certificate is not mandatory document, deemed conveyance has been
allowed.
12. In view of Section 11 (read with Rule 9) of the
Maharashtra Ownership of Flats Act, 1963 (MOFA), the promoter is
liable to execute the conveyance within four months from the date of
registration of the cooperative society. As the plaintiff has not complied
with the said obligation to execute the conveyance in favour of the flat
purchasers, the society applied for deemed conveyance and same has
been granted. It does not mean that occupation certificate is not
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required now. It has to be obtained. Hence, issue of occupation
certificate is still pending. At the most, now society can take follow up
of the same, but what about obligation of the plaintiff? Whether he can
be exempted and can be allowed to take benefit of the changed
situation to claim his entitlement for balance amount of consideration,
which was to be paid to him on his performance of contractual and also
a legal obligation.
13. The plaintiff as a builder has agreed to obtain the
occupation certificate before handing over possession to the flat
purchasers. He failed to do so, moreover, he handed over the possession
in breach of the terms agreed in the contract. Section 3(2)i of MOFA
reads that the promoter shall not allow persons to enter into possession
until a completion certificate where such certificate is required to be
given under any law is duly given by the local authority. Therefore, the
plaintiff also in contravention of this provision has handed over the
possession to the flat purchasers. It is required to differentiate between
the fact of handing over 'possession' of the flat and fact of handing over
'complete possession' of the flat for deciding whether the plaintiff has
discharged his obligation under contract or exempted therefrom?
14. The purpose of occupation certificate is to certify the
completion of construction as per rules and regulations. It authorises
the construction and make it entitled to be occupied by the occupier. In
absence of occupation certificate use of such structure will be
unauthorised. Hence, which is not capable of being occupied and
occupancy of which is unauthorised, is incomplete and possession of
such incomplete thing is 'incomplete possession. Therefore, handing
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over bare physical possession without occupation certificate is not the
complete possession. By giving such possession there cannot be
compliance of agreed terms of contract. Same is not in accordance with
the provisions of MOFA, as Section 3 of MOFA requires handing over
possession after obtaining occupation certificate. Handing over
possession of a flat after obtaining occupation certificate is the handing
over 'complete possession' of flat to the flat purchasers. Unless the
possession coupled with occupation certificate is handed over, it cannot
be considered as discharge of obligation under the agreement for sale
and also compliance of legal obligation under MOFA. Hence, by
handing over possession of the flat without occupation certificate, the
plaintiff can not be allowed to take disadvantage of the effect of
deemed conveyance and claim performance of defendant's obligation to
pay the balance amount of consideration.
15. Copy of letter dt.14.06.2011 of Municipal Corporation
(Exh.C to reply) shows that municipal corporation has proposed to
initiate action against occupiers treating them as unauthorised
occupants. If there is no occupation certificate, necessarily such
possession will be unauthorised and thereby the occupiers are liable for
payment of higher municipal taxes. It is due to the default of the
plaintiff. Therefore, putting liability on the flat purchaser to pay higher
taxes, the plaintiff can not be excluded or exempted from his liability
nor can be allowed to take disadvantage of deemed conveyance to claim
his entitlement to balance amount of consideration. In Recent judgment
of the Hon'ble Supreme Court in Samruddhi Cooperative Housing
Society Ltd. Vs. Mumbai Mahalaxmi Construction Pvt.Ltd. (2022
SCC OnLine SC 35) it was the fact that owing to the failure of the
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builder to obtain occupation certificate, there has been a direct impact
on the flat purchasers in terms of the payment of higher taxes and water
charges to the municipal authority. It is held that the builder is
responsible for transferring the title of the flats to the society alongwith
occupation certificate. The failure to obtain the occupation certificate is
a deficiency in service and the purchasers are within their rights to
demand compensation for higher taxes and water charges arising from
lack of an occupancy certificate. Therefore, while considering the
plaintiff's entitlement, his obligations and liabilities are also required to
be considered.
16. As per the contract between the parties, the balance
amount of consideration is required to be paid at the time of handing
over possession of the flat and before handing over possession, the
plaintiff is required to obtain occupation certificate. Hence, defendant's
performance is depend on the plaintiff's performance of obtaining
occupation certificate. Without performance of his own obligation of
obtaining occupation certificate, the plaintiff is demanding performance
of defendant's obligation. What happens in cases of default as to the
promise which should be first performed in contract consisting of
reciprocal promises, is provided in Section 54 of the Contract Act,1872
as follows :
Section 54 : Effect of default as to that promise which should be
first performed, in contract consisting of reciprocal promises.
When a contract consists of reciprocal promises, such that one of
them cannot be performed, or that its performance cannot be claimed
till the other has been performed, and the promisor of the promise
last mentioned fails to perform it, such promisor cannot claim the
performance of the reciprocal promise, and must make compensation
to the other party to the contract for any loss which such other party
may sustain by the nonperformance of the contract.
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17. Therefore, the plaintiff has to perform his promise first and
then only he can claim performance of promise by the defendant
because the defendant's performance is depend on the performance of
plaintiff's promise. Therefore, by application of Section 54 of the
Contract Act, 1872 plaintiff's claim suffers from infirmity and can not be
allowed by judgment on claim. Order of deemed conveyance will not
exclude him from liability under Section 54 of the Contract Act.
18. In the plaint or in the application for summary judgment
the plaintiff has not stated any specific date on which the possession of
the flat was handed over to the defendant. Copy of letter dt.14.06.2011
of Municipal Corporation (exh.C in reply) shows that municipal
corporation has proposed to initiate action against occupiers. Copy of
letter dated 30.08.2011 (page No.18 of annexure attached with reply)
shows that the plaintiff by this letter addressed to the Municipal
Corporation has stated about handing over possession to the
purchasers. If dates of these letters are considered, it reveals that
possession has been given before 2012. If the plaintiff's claim is to be
accepted as it is, then on the date of possession he became entitle to
claim the amount. From such date he was required to claim said
amount within three years. The plaintiff has not pleaded about specific
date of handing over possession to the defendant. Hence, the plaintiff's
claim is required to be verified for limitation purpose and therefore, it is
also one of the reason for not allowing judgment on claim.
19. For the aforesaid reasons, unless the plaintiff establishes
that by handing over possession without fulfilling his obligation of
obtaining occupation certificate, he is entitled for decree, judgment on
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claim cannot be passed. Circumstances on record show that there is
good defence to the defendant. Hence, the plaintiff is not entitled for
summary judgment on claim. Accordingly, I answer point Nos.1 to 3 in
the negative.
AS TO POINT NO.4:
20. In view of my findings to point Nos.1 to 3, the application
for summary judgment is required to be dismissed. In the result, in
answer to point No.4, I pass the following order.
ORDER
1. The application for Summary Judgment No.07 of 2021
is dismissed.
2. Costs shall follow the event.
(Rajesh A.Sasne)
Judge,
City Civil & Sessions Court,
Date :17.02.2022 Mumbai.
Dictated on : 17.02.2022
Typed on : 25.02.2022
Signed by HHJ on : 25.02.2022
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“CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER”
28.02.2022 at 11.30 a.m.
UPLOAD DATE AND TIME
(Mr. S. V. AMBEKAR)
NAME OF STENOGRAPHER
Name of the Judge HHJ SHRI RAJESH A.SASNE
(COURT ROOM NO.32)
Date of pronouncement of
judgment/order
17.02.2022
Judgment/order signed by P.O. on 25.02.2022
Judgment/order uploaded on 28.02.2022
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