1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 2017 OF 2003 WITH WRIT PETITION NO. 2528 OF 2004 WITH WRIT PETITION NO. 2906 OF 2006 WRIT PETITION NO. 2017 OF 2003 Powai Panchsheel CHS & Ors. .... Petitioners. vs. MHADA & Ors. .... Respondents. Mr. Sanjeev Punalekar i/by PRS Legal for Petitioners. Mr. R.V. Kamath, Managing Committee member of Petitioner present. Mr. Vaibhav Joglekar with R.J. Mane, AGP., for Respondent No. 1 MHADA. Ms. Bhavana Shah for Respondent Nos. 10, 12 & 16. Ms. Anita Bhaktwani for Respondent No. 5. Mr. Eknath Nawale, Director (Marketing) MHADA present. WITH 2 WRIT PETITION NO. 2528 OF 2004 Pradeep Kumar Das & Ors. .... Petitioners. vs. MHADA & Ors. .... Respondents. Ms. Bhavana Shah for Petitioner. Mr. Vaibhav Joglekar with R.J. Mane, AGP., for Respondent No. 1 MHADA. Mrs. Asha Kapoor, Chief Promoter of Amey Co-op. Hsg. Soc. Present. Mr. Eknath Nawale, Director (Marketing) MHADA present. WITH WRIT PETITION NO. 2906 OF 2006 Ram Kumar Dhawan .... Petitioner. vs. MHADA & Ors. .... Respondents. Mr. Sanjay Udeshi with Manesh Londhe i/by S. Udeshi & Co. for Petitioner. Mr. R.K. Dhawan Petitioner present. Mr. Vaibhav Joglekar with R.J. Mane, AGP., for Respondent No. 1 MHADA. Ms. Anita Bhaktwani for Respondent No. 8. Mr. Eknath Nawale, Director (Marketing) MHADA present. CORAM : J. N. PATEL & SMT. NISHITA MHATRE, JJ. 3 JUDGMENT RESERVED ON 22ND FEBRUARY, 2008. JUDGMENT PRONOUNCED ON 26th MARCH, 2008. ORAL JUDGMENT (Per J.N. Patel, J. ) : Heard the learned counsel for the parties. 2. We propose to dispose of all these three writ petitions by common judgment and order as in all these petitions the petitioners are claiming right of allotment of flats in building no. 8 consisting of 47 flats which were constructed by Maharashtra Housing and Area Development Board (for short “the Board”) constituted under the Maharashtra Housing and Area Development Act, 1976 (for short “MHAD Act”) under Powai Mass Housing Scheme. 3. During the years 1990-1995 the Board constructed a total of 1,924 flats (comprising of 1,673 non- deluxe flats and 251 deluxe flats) in various buildings forming part of the said project. By the time the project got completed there was a 4 steep slump in the real estate market during the period 1994- 95 which resulted in crushes in prices of real estate. In order to dispose of the flats the Board issued an advertisement of sale of flats in the said project at the rate of Rs. 2,995/- per sq. ft., but they could hardly sell only 123 flats at the said rate in accordance with the terms of the advertisement and by following the procedure prescribed under the Maharashtra Housing and Area Development (Estate Management, Sale, Transfer and Exchange of Tenements) Regulations, 1981 (for short “the 1981 Regulations”) and the Maharashtra Housing and Area Development (Disposal of Land) Rules, 1981 (for short “the 1981 Rules”) which have been framed under the MHAD Act, 1976. The 1981 Rules were framed by the State Government whereas the 1981 Regulations have been made by the MHADA with the previous sanction of the State. If necessary, we will quote the Rules and Regulations at appropriate places in our judgment. 4. During the period June 1995 to May 2002, the 5 Board tried to dispose of the remaining flats by issuing at least 8 advertisements in various newspapers and even appointed real estate agents for the said purpose. But they could succeed only in selling additional 1,597 flats and 327 flats remained unsold. As required under the Rules and Regulations of 1981, the State Government has a right to give directions in respect of the allotment of 2% of the flats of all the 251 deluxe flats in the Scheme which were kept out of the scope of the advertisement. But it so happened, due to inadvertence, all the 251 deluxe flats were advertised. The error was rectified after it was realised by the Board and, therefore, they allotted two flats out of the said 251 flats as per the directions issued by the State Government and are required to reserve three flats from out of the balance 47 flats in Building No. 8 in Code No. 162 which relates to 251 deluxe flats for allotment as per the directions of the State Government and, therefore, the actual number of flats available for disposal were 47 – 3 = 44 in Building No. 8 in Code No. 162. 6 5. On 26.2.2002, MHADA took a decision under its statutory powers to reduce the price per sq. ft. of the unsold flats and published a fresh advertisement for sale of flats at various other locations including 251 deluxe flats in the Powai project at the rate of Rs. 2,200/- per sq. ft. on the terms and conditions given in the booklet which was on the basis of “First come, first served”. The Scheme published under the booklet clearly provided :- (i) the provisions of the 1981 Rules and the 1981 Regulations as also the terms as may be decided by MHADA depending on the prevalent position would be applicable to the sale of the said flats; (ii) the contents of the booklet were only indicative and not exhaustive and would be subject to provisions of the 1981 Rules and the 1981 Regulations. 7 Inspite of the advertisement dated 26.2.2002, MHADA did not get any substantial response. 6. On 11.8.2002, Mr. A.K. Nandi, (the original Petitioner No. 2 in W.P. No. 2017 of 2003) applied to MHADA for allotment of 1 flat, but did not pursue the application and joined The Powai Panchasheel CHS (Proposed) i.e. The Petitioner No. 1 in W.P. No. 2017 of 2003. During the pendency of the petition Mr. Nandi has withdrawn himself as he does not want to continue to pursue the petition and sought deletion of his name as Petitioner No. 2. On 10.2.2003, 11.2.2003 and 12.2.2003, 3 proposed Housing Societies who are Respondent Nos. 4, 5 and 6 in W.P. No. 2017 of 2003, made an application for allotment of 500 flats in the said project. On 25.2.2003, MHADA considered the offers of these three proposed co-operative housing societies i.e. Respondent nos. 4, 5 and 6 and found that if the offers are accepted it will enable MHADA to sell the remaining stock of unsold flats in the said project at Powai which were lying unsold for eight 8 years from the year 1995 at one go and that such decision will be commercially expedient and, therefore, the Board passed resolution No. 16 / 2402 wherein it was decided to offer the flats demanded by respondent nos. 4, 5 and 6 in bulk booking. It was placed before MHADA for approval. On 3.3.2003, the Petitioner No. 1 i.e. Powai Panchasheel CHS (proposed) in Writ Petition No. 2017 of 2003 (for short “PPCHS”) appears to have approached Kamath Construction & Estate Agents (for short “Kamath”) for purchase of the flats in Building No. 8 having 51 flats and requested the Director Marketing, MHADA, to inform it about the lowest quotation for the said flats and to send the letter of intent. On 10.5.2003, MHADA in its meeting resolved and confirmed the resolution of the Board dated 25.2.2003 with certain modification and making the terms and conditions more stringent by incorporating them in the resolution including the condition of forfeiture of 10% of sale price in the event of default in payment of the purchase price within the stipulated time by respondent nos. 4, 5 and 6 and confirmed the decision to sell the flats to respondent nos. 9 4, 5 and 6 vide its Resolution No. 5913 dated 10.5.2003 pursuant to which the Board on 1.7.2003, issued letters of intent to respondent nos. 4, 5 and 6. On 2.7.2003, respondent nos. 4, 5 and 6 accepted the letters of intent pursuant to which on 9.7.2003 the Board issued offer letters to respondent nos. 4, 5 and 6 incorporating the terms and conditions of allotment which were accepted by respondent nos. 4, 5 and 6 by their letter dated 10.7.2003. Acting upon the said offer which was accepted by the Society, Pradeep Kumar Das & Ors (Petitioners in W.P. No. 2528 of 2004) tendered a sum of Rs.25,000/- to Shree Amey CHS (for short “Shree Amey”) (Respondent no. 5 in W.P. No. 2017 of 2003) on 31.7.2003. It appears that on coming to know of the said transaction between MHADA and Shree Amey, the Petitioner No. 1 PPCHS, filed Writ Petition no. 2017 of 2003 challenging the said allotment in favour of respondent nos. 4, 5 and 6. Somewhere between July and September, 2003, Shree Amey paid E.M.D of Rs. 25,000/- for each flat along with the application for 21 members. Thereafter, on completion of the 10 pleadings at pre- admission stage on 24.11.2003, this Court issued rule in Writ Petition No. 2017 of 2003 and passed an interim order against Respondent No. 5 Shree Amey and Respondent Nos. 4 and 6 came to be deleted from the said petition. It was the case of the petitioners that in the event of their succeeding in the petition, all 47 flats will be purchased by them. At that stage, the interim order did not preclude MHADA from re-advertising the flats. On 25.3.2004, 12 individual members of Shree Amey sought to be joined as party respondents and for vacating interim order dated 24.11.2003. On 16.4.2004, when the said matter was taken up for consideration, a statement was made by the learned counsel for MHADA as well as for the Board that they would cancel the allotment in favour of Shree Amey and accordingly on 19.3.2004 MHADA cancelled the allotment of 47 flats in favour of Shree Amey and released a fresh advertisement for sale of the said 47 flats on 21.4.2004 subject to out- come of Writ Petition No. 2017 of 2003, particularly relating to the said 47 flats in Building No. 8 having Code No. 162 which was the 11 subject matter of the aforesaid writ petition. On 22.4.2004, this Court passed an order in Chamber Summons No. 92 of 2004 allowing it in terms of prayer clause (a) thereof and directing that in case MHADA received any offer pursuant to the advertisement, the offer shall not be accepted without prior permission of the Court. Pursuant to the said order, PPCHS carried out the amendment to Writ Petition No. 2017 of 2003 and joined the applicants as party respondents. Aggrieved by the cancellation of the allotment order in their favour, Pradeep Kumar Das and 7 other members of Shree Amey filed Writ Petition No. 2528 of 2004 on 19.7.2004. In the meantime, in August, 2004, Mr. Raman Kumar Dhawan (Petitioner in W.P. No. 2906 of 2006) and 10 others applied in response to the advertisement. Out of them Mr. Raman Kumar Dhawan only filed Writ Petition No. 2906 of 2006 challenging MHADA's action of not allotting him flat despite making payment of E.M.D. in the year 2006. 7. Mr. Sanjeev Punalekar appearing for PPCHS, 12 (Petitioner No. 1 in W.P. No. 2017 of 2003) submitted that the Respondent MHADA ignored the offer of Petitioner Nos. 1 to 3 who fulfilled the eligibility criteria set out by the Respondent No. 1 and had applied for allotment of specific flats after taking inspection of the said flats through real estate agent appointed by MHADA i.e. M/s. Kamath Construction & Estate Agents whereas respondent nos. 3 and 4 had applied directly to the Director, Marketing of Respondent No. 1. It is submitted that the Respondent No. 2 in order to ensure that all necessary formalities were completed as per the requirements of the respondent Board, even addressed a letter dated 3.3.2003 (which is annexed as Exhibit “F” to the petition) to the Director, Marketing, MHADA, Mumbai relating to their booking of flats in Building No. 8 at Powai wherein it has been clearly stated by the Chief Promoter of the petitioner society that they have approached M/s. Kamath Constructions & Estate Consultants, who are official property agents of MHADA for booking flats and that they have taken inspection of the property and proposed to book the flats and, therefore, 13 they should be informed of their lowest quotation for the said property and arrange to let them have their letter of intent along with their terms and conditions so as to enable them to proceed further in the matter. Similarly, M/s. Kamat Constructions and Estate Consultants also by their letter dated 3.3.2003, addressed to the Vice President of MHADA requested to consider their application on behalf of PPCHS to process the application so that they will make necessary arrangement to make E.M.D. payment at an early date. This, according to the learned counsel for the petitioner, creates a right in the petitioner to be preferred allottee as per the scheme of allotment advertised by MHADA i.e., on the basis of advertisement dated 26.2.2002 which clearly stated that the sale of certain vacant tenements by respondent will be made on “First come, First served” basis and which consisted the 250 deluxe tenements of 893 sq.ft., having Project Code No. 162. It is the contention of the learned counsel for the petitioner that inspite of approaching MHADA through their said agent and also by addressing a letter to them, MHADA 14 ignored their claim and proceeded to allot the flats in favour of respondents nos. 4, 5 and 6. It is submitted that the said allotment of flats in favour of respondent nos. 4, 5 and 6 was contrary to the rules and regulations and the resolution was passed for extraneous consideration in favour of respondent nos. 4, 5 and 6 to the extent that the flats were offered at concessional rate than the rate quoted in the advertisement. 8. It is submitted by the learned counsel for the petitioners that MHADA having cancelled the allotment of flats in favour of Shree Amey, they have to consider the claim of the Petitioner in preference to that of Shree Amey as they were the first to approach MHADA as per the advertisement and the scheme of “First come, first served” basis. 9. On the other hand, it is the contention of the learned counsel appearing for these respondents in Writ Petition no. 2017 of 2003 i.e. Shree Amey and petitioners in Writ Petition No. 2528 of 2004 that there is a valid and 15 subsisting contract between Shree Amey and MHADA and its Board as Shree Amey was ever willing to perform their part of the contract and have been always ready and willing to perform their part of the obligation under the said contract as laid down in the provisional offer letter by respondent MHADA and its Board and that as MHADA has accepted EMD from them, they created substantial right in favour of Shree Amey in respect of the flats in Building No. 8 and for that reason no other person including the PPCHS have any right in law to defeat and deprive members of Shree Amey Co- operative Housing Society from being allotted the flats in question in terms of the agreement. The learned counsel appearing for Shree Amey does not dispute the terms and conditions of the scheme which was floated but submitted that it is Shree Amey whose offer was first received and accepted by MHADA and its Board. Having acted upon their offer, the decision of MHADA to cancel the allotment of flats in their favour which is impugned in the petition filed by them i.e. W.P. No. 2528 of 2004 deserves to be quashed and set 16 aside. It is further submitted that it is only after MHADA/Board issued letters of intent to them on 1.7.2003 which were accepted by them on 2.7.2003 itself pursuant to which the Board issued offer letters to Shree Amey on 9.7.2003 which was accepted by them by their letter dated 10.7.2003. The petitioners came to this Court challenging the said allotment in favour of Pradeep Kumar Das & others, (the petitioners in W.P. No. 2528 of 2004) who have not joined Shree Amey, respondent no. 5 in Writ Petition No. 2017 of 2003, as respondent. It is contended that when PPCHS filed the petition in August, 2003 i.e. Writ Petition No. 2017 of 2003, they did not disclose to the Court the true and correct copy of MHADA resolution No. 5913 dated 10.5.2002 which was under challenge in the said petition and it was only brought on record by the Board by their additional affidavit filed in December, 2007. This rather shows malafides on the part of the PPCHS. It is submitted that it is due to the observations made by the Court while granting interim relief that MHADA and the Board took a decision to cancel the allotment in 17 favour of Shree Amey and proceeded to release fresh advertisement which as per the directions issued by the Court was subject to the decision of the petition. It is, therefore, contended that the impugned decision dated 19.4.2004 in the petition filed by Pradeep Kumar Das and others including Shri Amey in W.P. 2528 of 2004 deserves to be quashed and set aside. 10. It is submitted by the learned counsel for Shree Amey, i.e. the petitioners in Writ Petition No. 2528 of 2004, that if the Court finds that any concession was given to them by MHADA, which, according to them, was in consonance with the Rules and Regulations of 1981, the petitioners i.e. Shree Amey and others, are ready to accept the offer in terms of the advertisement in so far as it relates to the price quoted in the advertisement is concerned. It is submitted that Shree Amey CHS and the lone claimant, who has entered the arena after MHADA cancelled the allotment in favour of Shri Pradeep Kumar Das and Shree Amey i.e. Mr. Raman Kumar Dhawan 18 (the petitioner in Writ Petition No. 2906 of 2006) have entered into a compromise which they have tendered as consent terms as Shree Amey has agreed to accommodate Mr. Raman Kumar Dhawan in their society and, therefore, as there is no merit in the petition filed by PPCHS, the petition deserves to be allowed and the respondent MHADA and the Board be directed to accept their proposal, even on the revised terms and conditions. Shree Amey has tendered an undertaking accordingly to this Court and has also agreed to pay interest so as to compensate MHADA from the period this Court granted an order of stay of allotment in their favour so as to safeguard the interest of MHADA. 11. It is submitted by the learned counsel Shri Joglekar, appearing for respondent MHADA and Board that in so far as they are concerned, they would abide by the decision of this Court in the matter and on taking instructions they have no objection to accept the offer made by Shree Amey. 19 12. The key issue which arises for our determination is whether the petitioner PPCHS (petitioner no. 1 in Writ Petition No. 2017 of 2003) have entered into a concluded contract on the date of filing of the petition so as to entitle them for preferential allotment of flats in the scheme. 13. We find that the petitioners i.e. PPCHS are more aggrieved by the resolution no. 5913 dated 10.5.2003 than their right to claim flats in the scheme as according to them they were not even considered for being allotted the flats for which they were first to apply through Kamath who is the approved real estate agent representing the Board. On the other hand, what we find is that in the alternative they have sought that the scheme should be re-notified and advertised by quashing the impugned resolution no. 5913 dated 10.5.2003 in the manner provided by Regulations 7 and 8 of the Regulations of 1981 to enable the individuals / group of individuals / co-operative housing societies, as the case may be, to apply for fresh allotment in open, transparent and equivalent manner. 20 14. Part III of the Rules of 1981 deals with disposal of tenements and Rules 11 and 12 provide as under :- 11. Manner of disposal of tenements in buildings constructed by the Authority.-- [(1) The Authority may dispose of - (a) residential tenements in the building constructed by it on any of the following basis namely:- (i) out- right sale, (ii) hire- purchase, (iii) rental; and (b) ............ (2) The Authority shall lay down the manner in which the sale price, the hire- purchase instalment of the rent is to be determined. 12. All disposal to be by public notice.- - (1) As soon as any residential tenements in a scheme are ready for disposal, either on account of new construction, completed or proposed; or an account of vacancies caused in the existing tenements, the Authority shall invite applications 21 by a notice to be published in a manner laid down by the Authority; [Provided that such a notice may not be published if there is in force a waiting list of applicants for that scheme in respect of the same group of tenements prepared in pursuance of the provisions in the regulations made in that behalf. (2) ............................. A plain reading of the Rules clearly provides that MHADA as well as the Board are authorised to dispose of residential tenements in the building constructed by it on any of the following basis:- (i) out- right sale; (ii) hire- purchase and rental. As we are not concerned with the commercial tenements, we have not referred to the said provision applicable to commercial tenements. Rule 12 provides that all disposal is to be made by public 22 notice and sub- section (1) of Section 12 clearly provides that residential tenements in a scheme are ready for disposal, they are to be disposed of by inviting applications by a notice to be published in the manner provided by the Authority. It is only when there is in force a waiting list of applicants for that scheme in respect of the same group of tenements prepared in pursuance of the provisions in the regulations made in that behalf that such a notice is not to be published. 15. In the present case, it is not disputed by the parties that MHADA and the Board have made repeated efforts to dispose of the flats in the scheme but due to recession there was no response to the scheme and, therefore, they came up with a proposal to dispose of the residential tenements on “First come, First served” basis. 16. Regulations of 1981 Part III consisting of Regulations 6 to 21-A deals with allotment of residential tenements. Rules 6 to 13 make provisions for procedure for 23 allotment, notice inviting applications for allotment of tenements, receipt of application, application for tenement, verification of application, drawal of lots, determination of eligibility, procedure in cases of previous assessment and allotment of tenements, etc. Regulation 14 deals with re- notification of vacancies. Regulations 14A, 15 and 16 read as under :- “14A. Special provision for disposal of tenements in certain circumstances. If even after renotification of vacancies as provided in Regulation 14 there is no adequate response and demand for tenements in any particular scheme such of the tenements as can not be so disposed of must be disposed of on the 'first served' basis or in any other manner determined by the Authority from time to time. 15. The variation of the price of tenements. The price at which the tenements are offered under a scheme could vary amongst the allottees as in certain cases considerable time may have elapsed from the time of advertisement till the actual allotment.” 16. Allotment of tenements by Board on direction of State Government. (1) Notwithstanding anything contained in these 24 Regulations but subject to the provisions of clauses (2) and (3), the Board may allot may tenements in any building