Writ Petition No. 9120 of 2012

19th December, 2012

Petitioner Counsel: G.S. Godbole,Drupad Patil
Respondent Counsel: Dhananjay B. Lonkar,Ms. P.S. Cardozo

Cases Cited:
M/s.Padmavati Construction Co. Vs. State of Maharashtra, 2007(1) ALL MR 530 [Para 8,13]
Shakuntala Bharat Kachare Vs. Subhash Prataprao Chavan, 2010(4) ALL MR 681 [Para 8,13]
M/s.Noopur Developers Vs. Himanshu V. Ganatra, 2010(2) ALL MR 791 [Para 8,13]
Om Sai Pratibha Co-op. Hsg.Soc. Vs. State of Maharashtra, 2002 (5) Bom.C.R. 177 [Para 8,13]

JUDGMENT

-By this petition, filed under Articles 226 and 227 of the Constitution of India, the petitioner- a proprietary concern engaged in business of development and construction has questioned the order dated 19th July 2012 passed by the Competent Authority and District Deputy Registrar, Co-operative Societies, Pune allowing "deemed conveyance" to respondent No.1- society under the provisions of section 11(3) of the Maharashtra Ownership of Flats Act, 1963. The said Act hereinafter is referred to as "1963 Act". The petitioner has also challenged registration granted to respondent No.1 as Tenants Co-ownership Co-operative Housing Society on 19th July 2009 by Deputy Registrar, Co-operative Societies, Pune City (4), Pune under section 12(1) of the Maharashtra Co-operative Societies Act, 1960 (hereinafter referred to as "1960 Act" for short). The third Act with which this Court is concerned in the present matter is Maharashtra Apartment Ownership Act, 1970 which is referred to as "Apartment Act or 1970 Act" hereinafter.

2. The contention of the petitioner is that as in the agreement for development entered into between the parties the petitioner has reserved a right to either subject the apartments built to Apartment Act or then to form a co-operative housing society, the registration of respondent No.1 as co-operative housing society at the instance of flat takers is unsustainable. It is further contended that said registration is done on 10th July 2009 while the apartments have been subjected to Apartment Act on 12th June 2009 and, therefore, in view of section 10 of the 1963 Act, the registration of co-operative society is illegal.

3. The facts are not much in dispute. The land bearing plot Nos.202 and 203 out of Survey Nos.96/2 and 97 of village- Kothrud, Pune admeasuring 1,046.12 sq.meters originally owned by respondent Nos.3 and 4 has been subjected to development agreement on 29th December 1999 which has been registered at Sr.No.8391 of 1999 with competent authority. On 31st August 2000, in furtherance of the said agreement, the petitioner obtained NA permission, got layout building plan duly approved from Pune Municipal Corporation and also obtained commencement certificate as per revised plan of 8th May 2006. On 7th June 2006 he claimed to have completed construction of multi-storied building known as Abhineha Park consisting of residential units, parking, ground + three floors. He obtained completion certificate on the said date. There are 18 units in it. In 2009, he entered into an agreement with prospective purchasers of respective residential units and, accordingly, he was given right either to form a co-operative housing society or condominium of apartments. Though all flat takers had consented to it, on 19th February 2009 they submitted a proposal to register Abhineha Park Co-operative Housing Society Limited and, accordingly, made a demand by issuing notice to the petitioner. On 26th February 2009 petitioner replied to it and expressed his readiness and willingness to execute a deed of apartment in favour of each unit holder. On 31st March 2009, one Shekhar Dattatraya Kulkarni, a unit holder in his capacity as Chairman of the proposed housing society submitted an application to the District Registrar, Co-operative Societies, Pune City (4) for reservation of name of the society and for permission to open bank account. The said authority without extending any opportunity to the petitioner and in violation of section 10 of 1963 Act issued a registration certificate to respondent No.1 on 10th July 2009. Thereafter respondent No.1 applied under section 11 of 1963 Act for deemed conveyance and that application came to be registered as Application No.10/2012. The petitioner appeared in those proceedings and filed reply on 24th April 2012. On 19th July 2012 respondent No.2 authority then issued a certificate holding respondent No.1- society entitled to deemed conveyance to the extent of land admeasuring 815.787 sq.meters out of total plot area of 951.32 sq.meters.

4. In this background, I have heard Advocate Godbole for the petitioner, Advocate Lonkar for respondent No.1 and learned A.G.P. for respondent No.2 authority. On 22nd October 2012, Advocate Patil for the petitioner has stated that respondent Nos.3 and 4 - land owners need not be served as they are only formal parties against whom no relief is claimed. Looking to the nature of controversy, petition has been heard finally by making rule returnable forthwith.

5. Advocate Godbole submits that the right available to the petitioner to subject the units to provisions of Apartment Act has been exercised by him before registration of co-operative society. The deed of declaration has been registered on 12th June 2009 and the individual deeds with five unit holders (flat takers) were also registered. In this situation, registration of co-operative society on 10th July 2009 i.e. subsequent to 12th June 2009 is without jurisdiction and contrary to the provisions of section 10 of 1963 Act. He submits that once the scheme is subjected to provisions of Apartment Act, registration of co-operative housing society in relation to part of very same scheme is not permitted by law. He, therefore, contends that registration certificate issued on 10th July 2009 is without jurisdiction and void. As such, there could not have been any deemed conveyance in an application under section 11 of 1963 Act moved by such co-operative housing society. He, therefore urges that the certificate of registration is liable to be quashed and set aside.

6. In the alternative and without prejudice, he invites attention to the registration of the apartment deeds in favour of five unit holders/flat takes to demonstrate that those five persons could not have been subjected to provisions of 1960 Act and hence the impugned order is also liable to be quashed and set aside to that extent. The treatment to these five deeds of apartment executed and registered between 12th June 2009 to 11th April 2012 by splitting the property into two parts is also claimed to be illegal and unsustainable. He contends that out of these five flat takers, two have become members of the society. The respondent No.2 authority, therefore, has calculated separately extent of joint ownership of other three apartment takers and found them entitled to 135.533 sq.meter share. Therefore, balance 815.787 sq.meters is found available to respondent No.1- co-operative society. Accordingly, a direction for deemed conveyance of land to that extent in terms of section 11(3) has been issued. He argued that this treatment and division are void and unsustainable and, therefore, prayed for quashing and setting aside of the impugned order.

7. Shri Lonkar, learned counsel for respondent No.1- society has pointed out that the order of registration of society dated 10th July 2009 is sought to be assailed after more than three years in the present petition, without offering any explanation for condonation of delay or latches. He further submits that the petitioner's reply before the competent authority filed on 24th April 2012 reveals that four apartment deeds were registered between 12th June 2009 to 3rd July 2009 and last 5th is registered on 11th April 2012 i.e. after the proceedings for deemed conveyance began before the competent authority. For said purpose, he has invited attention to the impugned order to show that from 20th March 2012 the petitioner had taken adjournments, and ultimately filed reply after registration of last deed of declaration. Attention is also invited to provisions of section 10 of 1963 Act in this background to submit that as per its sub-section (2), if the deed of apartment and declaration is executed and registered before registration of society and the petitioner informs it to Registrar, then only registration of co-operative society is not possible. In this background, he invited attention to the provisions of rule 8 of the Rules framed under 1963 Act and argued that the said period for formation of a co-operative society or for subjecting apartments to Apartment Act is four months from the date on which minimum number of persons required to form such organization have taken flats. According to learned counsel, date of taking possession in this matter is not in dispute and all 18 flat takers had taken possession in 2004. Thus, within four months thereof, the society ought to have been constituted or then steps to form apartment should have been taken. He submits that even after registration of co-operative society in 2009, petitioner did not take any such steps. Attention is invited to proviso to rule 8 (supra) to submit that the decision whether to submit to the provisions of the Apartment Act of 1970 is to be taken by the apartment takers. The petitioner has to inform the same as early as possible after the date on which all apartment owners (being not less than five) have executed such declaration and deed of apartment. Here, the apartment takers i.e. flat takers have not proposed to submit apartments to Apartment Act and in 2009 itself a co-operative housing society has been registered. At the time of its registration, only four flat takers had executed declaration and deed of apartment as required by the Apartment Act and hence, there was no bar to the registration of the said society. Learned counsel submits that efforts made by the petitioner are with oblique motive to retain control over the scheme as long as possible and hence petition should be dismissed.

8. He is relying upon the judgment of this Court in M/s.Padmavati Construction Co. v. State of Maharashtra, 2007 (1) ALL MR 530; Shakuntala Bharat Kachare v. Subhash Prataprao Chavan, 2010 (4) ALL MR 681; M/s.Noopur Developers v. Himanshu V. Ganatra, 2010 (2) ALL MR 791; and Om Sai Pratibha Co-op. Hsg.Soc. v. State of Maharashtra, 2002 (5) Bom.C.R. 177.

9. Learned A.G.P., appearing for respondent No.2 has supported the arguments of Advocate Shri Lonkar.

10. This petition has been filed on 30th August 2012 and one of the prayers therein is to set aside the registration of respondent No.1- co-operative housing society granted to it on 10th June 2009. In petition, there are no reasons given as to why said order could not be questioned within reasonable time. Even after respondent No.1 raised objection to belated challenge, no explanation for latches has been offered. It is, therefore, obvious that only because of latter order dated 19th July 2012 granting deemed conveyance to respondent No.1- co-operative housing society and after realizing that challenge to order dated 19th July 2012 could not have been otherwise even attempted, petitioner has presented this belated petition to assail the order dated 10th July 2009. Looking to the scheme of 1963 Act and present facts, it is apparent that such belated challenge at the instance of the petitioner cannot be entertained. The claim of members to form a Co-operative Society & its registration in July,2009 are all overt acts in derogation and denial of alleged right reserved to itself by petitioner & still petitioner did not assert that right for over three years. Petitioner thus acquiesced in formation of Co-operative Society and can not be permitted to assail it at this juncture.

11. The petitioner has challenged the order dated 19th July 2012 by which deemed conveyance has been issued to respondent No.1- society and the said order is consequential in view of registration of co-operative housing society in July 2009. The impugned order has come almost three years after grant of registration to respondent 1 Co-operative Society. The stance of the petitioner itself reveals that petitioner is/was not ready and willing to execute necessary documents of conveyance in favour of flattakers or their society, and has been avoiding to discharge his obligations for all these years. The respondent No.2 authority has, therefore, correctly appreciated this position.

12. Even on merits, the only contention of the petitioner is that it had absolute discretion to subject the scheme to provisions of Apartment Act. The said discretion was not exercised by him till after society moved respondent No.2 on 29th February 2012 for grant of deemed conveyance. Hearing of said request was scheduled on 20th March 2012 and then matter was adjourned to various dates i.e. 10th April 2012; 24th April 2012; 15th May 2012; and lastly on 26th June 2012. It is just prior to filing of reply on 24th April and precisely on 11th April 2012 that petitioner registered last or required 5th deed of declaration.

13. Perusal of provisions of section 10 of 1963 Act shows that as soon as the minimum number of persons required to form co-operative society or an apartment "have taken flats", the promoter has to submit an application to the Registrar within prescribed period. As per sub-section (2) of section 10, if the building is submitted to provisions of Apartment Act by executing and registering declarations as provided in that Act, obligation is cast upon the promoter to inform the Registrar accordingly and only in that event it is not lawful to form any co-operative society or company. The procedure in this respect as contained in rule 8 is to be adhered to. It obliges the petitioner to submit an application to respondent No.2 for registration of a co-operative society within four months from the date on which minimum number of persons required to form the society "have taken flats". Next part of said rule 8 permits the apartment takers to submit apartments to provisions of Apartment Act. In that event, the petitioner has to inform respondent No.2, as soon as possible after the date on which not less than 5 apartment owners executed such declarations and deeds of apartment. It is necessary that all apartment owners should execute these declarations. Here, possession of 18 flats is handed over in 2004 itself and hence, the period mandated to take necessary steps started running thereafter as all flats are then "taken". Here the flat takers did not decide & have not decided to form any apartment and their action of approaching Registrar reveals that they wanted the co-operative housing society to be registered. The same has been registered on 10th July 2009 and the petitioner never objected to it. He never challenged that registration before the competent court or authority in accordance with the provisions of the 1960 Act and has chosen to approach this Court in the matter for the first time in that respect, that too, after more than three years. This Court in Om Sai Pratibha Co-op. Hsg.Soc. v. State of Maharashtra (supra) has held that in the matter of registration of the society, it is the members who are aggrieved parties and builders have no locus nor any right to file appeal under section 152 or revision under section 154 of 1960 Act. However, here the builder wanted to establish his right to subject the scheme to the provisions of Apartment Act on the strength of agreements and, therefore, it/he ought to have made that effort within a reasonable time. Such an effort being made almost after expiry of three years is, therefore, unsustainable. Moreover, as already noted above, rule 8 through its second part contemplates a decision by the apartment takers to submit the apartments to the provisions of the Apartment Act, that too, by executing declaration and deed of apartment as required by that Act. The promoter in that event has to inform the Registrar as soon as possible about it after the date on which all the apartment owners have executed such declaration and deeds of apartment. This scheme, therefore, shows that builder cannot impose his choice over the flat takers or apartment takers in the matter. In M/s.Noopur Developers v. Himanshu V. Ganatra (supra), this Court has held that promoter cannot indefinitely postpone the registration of society and retain his right over the property. The Division Bench of this Court in Shakuntala Bharat Kachare v. Subhash Prataprao Chavan (supra) has held that when registration of a society under 1960 Act is not challenged by the developer or the owners, the declaration made under the Apartment Act of 1970 cannot survive. It has been held that otherwise it would lead to anomalous situation where the property in question would be subjected to two local laws. The Division Bench, therefore, proceeded to set aside the declaration under 1970 Act. In M/s.Padmavati Construction Co. v. State of Maharashtra (supra), this Court has held that if the promoter has to submit the property to the provisions of the Apartment Act, the agreement entered into under section 4 of 1963 Act must specifically spell it out so as to place every individual flat purchaser on notice about the nature of organization by which his relationship would be governed. The discussion above shows that as per rule 8 of the Rules framed under 1963 Act read with section 10 thereof, the formation of apartment can also not be indefinitely delayed. Here, the possession has been handed over to flat takers, admittedly, in 2004 and completion certificate/ occupancy certificate has been issued on 7th June 2006. Thus, for three years thereafter the petitioner did not take any effective steps to have an apartment formed in accordance with scheme of the Apartment Act. Petitioner's first steps in that direction are only after majority of flat takes moved respondent No.2 for registration of society. Developments show that petitioner could procure the minimum number of five flat takers to constitute apartment only in April 2012 and hence, on the date of registration of co-operative society, no apartment could have been formed. Out of these 5 flat takers, two flat takers have become members of respondent No.1- co-operative housing society, thus, they have given up their membership or claim to have apartment and have refused to subject themselves to the Apartment Act.

14. The present petition is by developer/ promoter and not by any member of the co-operative society or any person who has executed a deed of declaration to submit his apartment to the provisions of Apartment Act. Even those flat takers who had agreed to submit their apartments to the Apartment Act have not challenged the registration given to respondent No.1 as co-operative housing society.

15. In this situation, I find that all relevant facts and provisions of law are looked into by respondent No.2 and a proper finding has been reached. Exercise of powers by him under section 11 of 1963 Act and grant of relief to respondent No.1, therefore, cannot be said to be either perverse or without jurisdiction. No case is made out warranting interference in exercise of writ jurisdiction. Petition is, therefore, dismissed. Rule discharged. No costs.

Petition dismissed.