Writ Petition No. 8270 of 2004

10th February, 2017.

Petitioner Counsel: Mr. BIPIN JOSHI
Respondent Counsel: Ms. PANTHI DESAI i/b M/s. M.P. VASHI & ASSOCIATES

Cases Cited:
Harsharansingh Pratapsingh Gujral Vs. Lokhadwala Builders Ltd, 1998(1) ALL MR 560 [Para 14,23]
Jamuna Darshan Co-op. Hsg Society Ltd Vs. J.M.C. & Meghani Builders, 2011(4) BCR 185 [Para 14,24]

JUDGMENT

JUDGMENT :- Heard Mr.Bipin Joshi, learned counsel for the petitioners and Ms.Panthi Desai, learned counsel for the respondent at length.

2. By this Petition under Article 227 of the Constitution of India, the petitioners have challenged the Judgment and order dated 3.7.2004 passed by the learned President, Maharashtra State Co-operative Appellate Court, Mumbai (for short, 'Appellate Court') in Appeal No. 130 of 2002. By that order, the Appellate Court partly allowed the Appeal preferred by the respondent, hereinafter referred to as 'disputant', and modified Award dated 2.7.2002 passed by the learned Judge, Co-operative Court No. 5 , Mumbai in Case No.CCV/230 of 1997. The Appellate Court issued injunction restraining the petitioners, hereinafter referred to as 'opponents', from causing any obstruction or interference in the common use of the terraces on 6th and 7th floors by all members of the disputant- society. The opponents are also directed to remove all flower pots etc so that terrace may be kept open for common use of all members of the disputant society including themselves. The claim of the disputant to open space in the rear and front of the building has dismissed. The relevant and material facts giving rise to filing of the present petition, briefly stated, are as under.

3. Disputant is a tenant Co-partnership Housing Society duly registered under the Maharashtra Cooperative Societies Act, 1960 (for short, 'Act') having Registration No. BOM/WN/HSG/TC/957 of 1986. It was registered on 8.5.1986. The opponents herein are joint members of the disputant society. Disputant instituted the dispute, inter-alia, for recovery of possession of the terraces on 6th and 7th floors and open space illegally encroached by the opponents. It is the case of the disputant that the dispute touches the business or management of the disputant-society.

4. It is the case of the disputant that opponent no.1 and Mr Arvind Chunilal Hansoti, Ms Bhanuben Chunilal Hansoti are the holders of a piece and parcel of land bearing Survey No.59, Hissa No.1, City Survey No. 752 admeasuring 398 sq.yards, situate lying and being at Cama Lane, Kirol Village, Ghatkopar (W), Mumbai 400086, (for short, 'suit land'). By an agreement dated 1.3.1974 entered between opponent no.1 and two others as owners on one part and Mahendra A. Dadia, Dr. Pannalal A Dadia, Dhirendra A Dadia and Rohit A Dadia , carrying on business in partnership in the name and style of M/s Dadia Brothers (for short, 'Builders') on the other part. The owners permitted the Builders to develop the property by demolishing the existing bungalow and by constructing a new building its place for better and separate residential accommodation for themselves with more modern amenities. It is the case of the opponents that as the owners of the said land, the developers agreed to sell the terraces in the building. As against this, it is the case of the disputant that the agreement between the developers and owners is under the provisions of the Maharashtra Ownerships Flats (Regulation of the promotion of construction, sale, management and transfer) Act, 1963 (for short, 'MOFA'). Under the provisions of MOFA, the builder or promoter is expected to sell only a constructed portion which could be used as residence, office, godown, garage or industrial premises. Consequently, the terraces into which entrances were made from outside the flats are excluded from sale, terraces where common entrance is there, are not saleable under the MOFA.

5. The controversy between the parties is in respect of the two terraces in the building Honsoti Apartments, one on the left Wing of the 6th floor of the building and another independent terraces on the 7th floor. The entry into terrace on the 6th floor is from common corridor. Terrace on the 6th floor is admeasuring 1025 sq.ft while the terrace on the 7th floor is admeasuring 1460.66 sq.ft. The case of the disputant is that none of the terraces is saleable under the MOFA and consequently the claim made by the opponents in respect of terraces on 6th and 7th floors is without any legal basis. The opponents are trespassers in the said terraces. The disputant further contended that the entire 13394.40 sq.ft front and rear open space exclusive of the area to the extent of 20' wide passage from the building to Hansoti Road is illegally claimed by the opponents without any basis. The opponents are trespassers of the open space. The disputant further contented that the opponents claimed to have purchased the flats on 6th floor and are retaining with them adjacent terrace of the 6th floor illegally carving out a door from the flat to the terrace after the building completion certificate is obtained. The disputant contended that the Builders have obtained occupation certificate on 24.12.1977 on the basis of plans approved by the Municipal Corporation.

6. Disputant further came with the case that in the agreement executed by the developers with other flat purchasers, it is not mentioned that the two terraces and the ground open spaces are going to be sold by the developers under the MOFA to the opponents. Consequently, no right is accrued to the opponents either in respect of terraces on the 6th floor and 7th floor nor do they derive any right to the rear and front side of the building.

7. The disputant referred to correspondence exchanged between the parties. It was also contended that occupation of the terraces and front and rear open space on the ground floor is clear trespass and each day's occupation is starting point of limitation. The disputant, therefore, prayed for issuing direction to the opponents to quit, vacate and hand over quiet, vacant and peaceful possession of the terrace on the 6th floor and the terrace on the 7th floor and front and rear open space on the ground floor of the society removing all their belongings on such spaces.

8. Opponents filed Written Statement dated 27.8.2001 resisting the dispute, The opponents, inter-alia, contended that the dispute is not filed by proper person. Dispute is also not maintainable as the same is not properly affirmed. The dispute which is filed is without proper authority in the eyes of law. Dispute is also barred by law of limitation and that co-operative court has no jurisdiction to entertain and try the dispute. Opponents further contended that the dispute suffers from nonjoinder of parties as opponent no.2 is wrongly joined as opponent. The dispute also is bad for non joinder of necessary party, namely, M/s Dadia Brothers through whom the disputants are claiming their rights.

9. On merits, the opponents contended that prior to 1.3.1977 the opponents along with one Shri Arvind Chunilal Hansoti and Ms. Bhanuben Chunilal Hansoti were the owners of property known as Hansoti Villa, the plot bearing Survey no.59, Hissa No.1, City Survey Nos 752 to 768, situate at Kirol village, Taluka- Kurla along with structures standing thereon. On 1.3.1974 opponents no.1-Dr.Ramesh Chunilal Hansoti, opponent no.3 Arvind Chunilal Hansoti and Smt Bhanuben Chunilal Hansolti on one part and said Arvind and Smt Bhanuben granted development rights of the said property to M/s Dadia Brothers. The opponents referred to clauses of the Agreement dated 1.3.1974 to contend that as per that agreement, the opponents are in lawful and exclusive use, occupation and possession of their respective premises together with the terrace on the 6th floor as well as the half terrace on the 7th floor of the said building and much prior to incorporation of the disputant society. It was also contended that agreements executed between M/s Dadia Brothers (Builders) with the prospective flat purchasers also provided that the conditions incorporated in the agreement dated 1.3.1974 will be binding upon each member of the disputant society and/or their respective nominees including the transferees. The opponents, therefore, contended that the disputants are estopped from objecting to the lawful use, occupation and possession of the terrace on the 6th floor as well as half terrace on the 7th floor being the property of opponents. They also contended that there is a specific clause and/or covenant incorporated in the agreement executed between the opponents and the Builders on one hand as well as agreement for sale executed between the flat purchasers and the Builders on the other.

10. On the basis of pleadings of the parties, the learned trial Judge framed necessary issues. Parties led evidence. After considering the evidence on record, by order dated 2.7.2002 the learned trial Judge dismissed the dispute. Aggrieved by that decision, the disputant preferred Appeal before the Appellate Court. By the impugned order dated 3.7.2002, the Appellate Court partly allowed the Appeal, as indicated earlier. It is against this order, the opponents have instituted the present petition.

11. In support of this petition, Mr. Joshi submitted that the Appellate Court committed serious error in allowing the appeal. He submitted that the Appellate Court has not properly considered the agreement dated 1.3.1974 between the owners and Builders as also the agreement executed by the Builders in favour of individual flat purchasers. He submitted that the dispute is barred by limitation as also Cooperative court has no jurisdiction to entertain and try the dispute under section 91 of the Act. The learned trial Judge while dismissing the dispute held that the dispute is not maintainable under Section 91 of the Act. The Appellate Court, however, reversed that finding and held in paragraph 8 that the dispute under Section 91 is maintainable. The learned trial Judge was of the view that the disputants were not claiming the terrace as members of the society and, therefore, the dispute under section 91 is not maintainable. The Appellate Court held that the disputant did not claim that they were owners of the terrace since construction of the building but they claimed under the agreement only flats were allotted to the opponents while terraces could be assigned by Builders to anybody including themselves.

12. Mr. Joshi submitted that the learned trial Judge also held that the dispute is barred by limitation. As the opponents are in uninterrupted possession and occupation of the terraces and open space for more than 18 years and that the disputant for the first time objected their use and occupation in 1996. As against this, the Appellate Court dealt with issue of limitation in paragraph 12 and observed that the disptue is within limitation.

13. Mr. Joshi invited my attention to various clauses in the agreement dated 1.3.1974 entered into by and between the owners on one hand and Builders on the other. In particular, clause 18(f) recited that the developers will be entitled to reserve terrace or portion thereof not required for common use, for the exclusive use and occupation of themselves and/or their assigns and to transfer on ownership basis such reserved terrace or reserved portions of the terraces to such persons on such terms as they deem fit. The Builders and/or their assigns in respect of such reserved terraces or terrace portion will be entitled to be enclosed and use the same including for hoardings, terrace gardens, further construction as permitted by law form time to time. He submitted that the Builders were agents of the opponents, being the principal. He submitted that in view of clause 17(f) the opponents have been allowed to retain terraces on the 6th and 7th floors.

14. Mr. Joshi submitted that even till date no conveyance is executed in favour of the disputant society. As the conveyance is not executed in favour of the disputant-society, members of the disputant society have no right, title and interest in open space. The ownership continues to vest in Builders who are agents of the opponents and consequently the ownership continues to vest in the owners, i.e. Opponents. In support of this proposition, Mr Joshi relied upon the decision of this Court in Harsharansingh Pratapsingh Gujral Vs. Lokhadwala Builders Ltd, 1998(1) ALL MR 560 and in particular paragraph 7 thereof. He further submitted that the opponents executed the development agreement in favour of the Builders on 1.3.1974. Builders in turn sold flats to the respective flat purchasers on 5.2.1976. All the agreement with the flat purchasers were entered into prior to amendment of MOFA. Mr. Joshi relied upon Rule 5 of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Rules, 1964 (for short, 'Rules') and form no. V containing the particulars specified in clause (a) of sub-section (1A) of Section 4. He submitted that Rule 5 was substituted by Notification dated 10.4.1987. Form V prescribes model form of agreement entered into between promoter and purchaser of flat. Clause 20 thereof specifically recites that nothing contained in the agreement is intended to be nor shall be construed as a grant, demise or assignment in law of the said flats or of the said plot and building or any part thereof. The flat purchaser shall have no claim, save and except in respect of flat agreed to be sold to him and all open spaces, parking spaces, lobbies, staircases, terraces, recreation spaces etc will remain the property of the promoter until the said land and building is transferred to the society/Limited Company. Mr. Joshi relied upon the decision of this Court Jamuna Darshan Co-op. Hsg Society Ltd Vs. J.M.C. & Meghani Builders, 2011 (4) BCR 185 and in particular paragraph 3 thereof. In the present case, land and building is not transferred in favour of the disputant society and till such time it will be the property of the promoter. Promoter being agent of the opponents, it will be the property of the opponents. He, therefore, submitted that the impugned order deserves to be set aside.

15. On the other hand, Ms Desai has supported the impugned order. She has taken me through the dispute filed by the disputant. It is the case of the disputant that the opponents have illegally encroached the terraces and open space. There are two terraces, one in the left wing of the 6th floor and another on the 7th floor of the said building. Entry into floors is from the common corridor. None of the terraces is saleable under MOFA. The transaction between the flat purchasers and the Builders is governed by the provisions of MOFA. Under MOFA, the terraces into which entry is to be made outside the flat was excluded from sale. Terraces were common entries. They are also not saleable under the provisions of MOFA. She submitted that there is no material produced by the opponents to the effect that the Builders have assigned terraces on 6th and 7th floors in favour of opponents. She submitted that the opponents have committed trespass and every day's occupation is a starting point of limitation and, therefore, it cannot be said that the dispute is time barred. She has taken me through the various clauses of the agreements dated 1.3.1974 and 5.12.1976. She further submitted that in the present case, Builder is promoter and not the opponents. As developer/promoter has not assigned terraces to the opponents, the Appellate Court was fully justified in allowing the dispute. She, therefore submitted that no case is made out for interfering with the impugned order.

16. I have considered the rival submissions advanced by the learned counsel appearing for the parties. I have also perused the material on record. It is not in dispute that the opponents along with others were owners of land, bearing Survey no.59, Hissa no.1, City Survey nos 752 to 768, situate at Kurla village, Taluka-Kurla together with structures standing thereon. They entered into the development agreement with M/s Dadia Brothers. Perusal of this agreement shows that Dr. Ramesh Hansoti and two others were interested in developing the property by demolishing the existing bungalows by constructing a new building in its place for better and separate accommodation for themselves with modern amenities. Accordingly, they entered into agreement with M/s Dadia Brothers for developing the property. Clause 18 (f) reads thus:

"18. The following terms shall be included in and form part of the agreement between the proposed occupants and builders of the building as the case may be,

(f) The builders will be entitled to reserve terrace or portions thereof not required for common use, for the exclusive use and occupation of themselves and/or their assigns and to transfer on ownership basis such reserved terrace or reserved portions of the terraces to such persons and on such terms as they deem fit. The builders and/or their assigns in respect of such reserved terraces or terrace portions, shall be entitled to be enclosed and use the same including for any hoardings, terrace garden, further construction as permitted by law from time to time and the owners shall not object to such use, provided that the holders of the terrace shall become members of the society and shall be liable to pay all the rates, taxes, cesses etc chargeable or recoverable in respect of such reserved terrace and the particular use being made thereof, in addition to any reasonable proportionate contribution payable to the society towards the maintenance charges."

17. On 5.2.1976, M/s Dadia Brothers entered into agreement with Smt.Chandanben Dadichand Shah, flat purchaser. Clauses 8 and 9 read thus :

"8. The purchaser shall have no claim save and except in respect of the flat agreed to be purchased by him/her. All open spaces, lobbies, terrace, flats etc will remain the property of the vendor until the whole building is transferred to the proposed cooperative society as hereafter mentioned but subject to the right of the vendors as hereinafter stated.

9. It is hereby expressly agreed that the terrace in the said building shall always belong to the vendors and/or their assigns and they shall be entitled to deal with and dispose off the same after vendors obtaining permission from the Municipal Corporation for constructing the flat/tenement/pent house and/or any other premises on the terrace together with the terrace to such person at such rate and on such terms as the vendors may deem fit. The vendors shall be entitled to that event to allot the entire terrace to purchasers of such flat/tenement/pent house and/or other premises constructed on the terrace and the terrace shall being exclusive possession of the purchaser of such flat/tenement/pent house and/or other structure constructed thereon. The society that may be formed by the purchaser of flats shall admit the purchaser of flat/tenement/pent house and/or other premises that may be constructed on the terrace as its member and shall allot to such purchasers of flat/tenement/pent house and/or other structure as may have been constructed on the terrace along with terrace. In the event of any common water storage tank for the building being constructed on the terrace, then the society as the case may be, will be entitled to depute its representative to go to the terrace for repairing tank during such time as may be mutually agreed upon by the purchaser of flat on the terrace and the society, as the case may be."

18. Perusal of this Agreement shows that vendor is none other than M/s Dadia Brothers. Perusal of clause 8 shows that flat purchaser shall have no claim save and except in respect of flat agreed to be purchased by him/her. All open spaces, lobbies, terrace,flats etc. will remain the property of the vendor until the whole building is transferred to the proposed co-operative society as hereinafter mentioned but subject to the right of vendors, as hereinafter stated. Clause 9 thereof provided that the terrace in the building will always belong to the vendors and/or their assigns and they shall be entitled to deal with and dispose of the vendors obtaining permission form the Municipal Corporation for constructing the flat/tenement/pent house and/or any other premises on the terrace together with the terrace to such person at such rate and on such terms as the vendors may deem fit. Vendors shall be entitled to that event to allot the entire terrace to purchasers of such flat/tenement/pent house and/or other premises constructed on the terrace and the terrace shall be in exclusive possession of the purchaser of such flat/tenement/pent house and/or other structure constructed thereon.

19. While allowing the appeal, the Appellate Court observed in paragraph 10 that the opponents have not produced any documents about assigning terraces by developers/builders on the 6th and 7th floors in their favour. They did not examine anybody from M/s Dadia Brothers to prove their contention that the terraces on 6th and 7th floors were assigned to them. The Appellate Court held that the findings recorded by the learned trial Judge were directly inconsistent with the terms of the agreement dated 1.3.1974 which specifically provided that terraces would be with the developers and they could assign the same to anybody as per their choice. It is not the case of the opponents that they or other owners of the plot had constructed building and while constructing they retained certain flats and terraces with them. During the course of hearing, Mr Joshi was also not in a position to demonstrate that the developers had assigned terraces on the 6th and 7th floor in favour of the opponents.

20. I have already reproduced clause 18(f) of Agreement dated 1.3.1974 entered into by and between owners on one hand and developers on the other. Perusal of clause 18(f) clearly shows that the builders were entitled to reserve terrace or portions thereof not required for common use, for the exclusive use and occupation of themselves and/or their assigns and to transfer on ownership basis such reserved terrace or reserved portions of the terraces to such persons and on such terms as they deem fit. The opponents herein have not brought on record any material to substantiate their claim that the builders have assigned terraces on the 6th and 7th floors to them.

21. Perusal of Clause (9) of the Agreement entered into by and between developers on one hand and the flat purchasers on the other shows that it was expressly agreed that the terraces in the said building shall always belong to vendors and/or their assigns and they shall be entitled to deal with and dispose off the same after vendors obtaining permission from Municipal Corporation. No material is produced by the opponents on record to indicate that in terms of clause (9) of the agreement the vendors have assigned their rights in favour of the opponents herein.

22. Mr. Joshi submitted that the developer was agent of the opponents, being principal, and therefore in terms of clause 18(f) of the agreement dated 1.3.1974 and Clauses (8) and (9) of the agreement dated 15.12.1976, principal, namely the opponents herein are owners of the terraces on the 6th and 7th floors. It is not possible to accept this submission. On the other hand, these clauses show that the developers will have rights to deal with the terraces. The expression "developer" is defined in agreement dated 1.3.1974 to mean and include the partners or partners for the time being of M/s. Dadia Brothers and their respective heirs, executors, administrators and assigns. The Appellate Court has further observed that the opponents did not examine the developers in respect of their case that the terraces were assigned by the developers in their favour. The Appellate Court has observed that except bare words about assignment about these two terraces, opponents have not produced any document about the same. They have not examined anybody from M/s.Dadia brothers to establish their case that the terraces on the 6th and 7th floors were assigned to them.

23. Mr. joshi submitted that as of today, no conveyance is executed in favour of the disputant society. As the Conveyance is not executed in faovur of the disputant society, members of the disputant society have no right, title and interest in the open space. He relied upon the decision of this Court in the case of Harsharansingh Pratpsingh Gujral (supra) and in particular paragraph 7 thereof. In that case, the learned Single Judge of this Court observed that unless and until the conveyance is executed in favour of the plaintiffs, they have no right, title or interest in any open space. In accordance with the agreement, ownership continues to vest with the developers. In my opinion, the said decision does not advance the case of the opponents that the developers have assigned terraces on the 6th and 7th floors in their favour.

24. Mr.Joshi also relied upon the provisions of MOFA and Rule 5 of the Rules and Form V. He submitted that Rule 5 was substituted by Notification dated 10.4.1987. Clause 20 of Form No.V lays down that flat purchasers shall have no claim, save and except in respect of flat agreed to be sold to him and all open spaces, parking space, lobbies, staircases, terraces, recreation spaces etc will remain property of the promoter until the land building is transferred to disputant society. Mr Joshi relied upon the decision of this Court in Jamuna Darshan Co-op. Housing Society Ltd (supra) and in particular paragraph 3 thereof. In my opinion, this decision also does not advance the case of the opponents as basically nothing is produced by them to show that developers/promoters have assigned terraces in favour of the opponents.

25. In view thereof, I do not find that the Appellate Court has committed any error in allowing the Appeal. Hence, Petition fails and the same is dismissed. Rule is discharged. In the circumstances, there shall be no order as to costs.

26. At this stage, Mr. Joshi prays for continuation of the interim order dated 26.10.2004 for a period of eight weeks from today. He submitted that by order dated 26.10.2004, this Court after hearing both sides, admitted Petition by issuing Rule and directed both the parties to maintain status-quo. The opponents were also directed to deposit the entire arrears of maintenance. Mr. Joshi states that the opponents are not in arrears of any maintenance and that they will go on regularly paying maintenance charges. Statements made by Mr. Joshi are accepted.

27. In view thereof, status-quo order granted by this Court on 26.10.2004, shall remain operative for a period of eight weeks from today with express understanding that no application for further extension of time shall be entertained.

Petition dismissed.