1 IN THE HIGH COURT OF JDICATURE AT BOMBAY ORDINARY ORIGINA CIVIL JURISDICTION NOTICE OF MOTION NO. 888 OF 2006 IN SUIT NO. 3498 OF 2005 M/s Laxmi Avenue Co-operative HSG Ltd. ......Plaintiff V. M/s Laxmi Builders & Developers and others ......Defendants Mr. D.S. Chandani for the plaintiff Mr. Piyush Shah for the defendant Nos.1 and defendant Nos. 1(a) to 1(d) CORAM : A.A. SAYED, J. DATE : 8TH JULY, 2009. P.C. 1 This Notice of Motion has been taken out by the plaintiff-society to direct the defendant No.1 to deposit and/or to pay to the plaintiff an amount of Rs. 6,62,820/- as shown in Exhibits K & M to the plaint and further directions to the defendant No.1 to continue to pay the amount of quarterly maintenance of plaintiff-society. The plaintiffs have also prayed for appointment of Court Receiver and for other reliefs more particularly set out in the Notice of Motion. 2 The case of the plaintiff-society is that the defendant No.1 is a partnership firm of which defendant Nos. 1(a) to 1(d) are partners. The defendant No.1(a) owned and possessed a plot of land and he entered 2 into a development agreement with defendant No.1 and in pursuance whereof a building of seven storeys was constructed and styled as "Laxmi Apartment" consisting of 23 flats. Out of the said 23 flats, 21 flats were sold by the defendant No.1 to various purchasers. According to the plaintiff-society, the defendant No.1 retained flat Nos. 001 and 002 ('the said flats' for short) in the building. A society was formed and registered by the flat purchasers as defendant No.1 failed to form and apply for registration of the society of the flat purchasers. The defendant No.1 also failed and neglected to pay any amount in respect of occupation of the said flats to the plaintiff-society. The plaintiff-society has filed additional affidavits. They have annexed statements showing the amount due and payable in respect of occupation of the said flats including certain amounts payable in respect of flat Nos. 203 and 703. The amounts claimed in the statements are from October, 1998 onwards. The Society was formed on 17th February, 1999. The plaintiff- society has also filed another suit in this Court being Suit No. 2000/2002 against the defendant No.1, wherein a Notice of Motion is taken out interalia in respect of execution of conveyance by defendant No. 1 in favour of the plaintiff- society. 3 The learned Counsel for the plaintiff invited my attention to the provisions of Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management of Transfer) Act, 1963 ( MOFA for short) and submitted that the defendant No.1, as promoter, has committed several violations of MOFA which constitutes offences, and that the plaintiff- society has filed criminal complaint against the defendant No.1, 1(a) to 1(d), which is pending in the Magistrate's Court. He urged that the defendant 3 No.1 be directed to pay the amounts as set out in the statements in the additional affidavit dated 23-01-2009 of the plaintiff-society and also be directed to pay the entire arrears of demands upto date alongwith interest @ 18% per annum and to continue to pay the outgoings as demanded by the defendant-society in future, pending the suit. The learned counsel for the plaintiff relied upon the following rulings:- (1) M/s. Bengal Waterproof Limited V. M/s. Bombay Waterproof Manufacturing Company and another, reported in AIR 1997 SC 1398 (2) Smt. Maya Rani Punj V. Commissioner of Income tax, Delhi, reported in AIR 1986 S.C. 293 (3) Bhagirath Kanoria and others V. State of M.P. with Bahadur Singh V. Provident Fund Inspector and others and Raja Bahadur Singh V. Provident Fund Inspector and others, reported in AIR 1984 SC 1688 (4) Alok Shankar Pandey V. Union of India and others, reported in AIR 2007 SC 1198 (5) Ram Nath Sao Alias Ram Nath Sahu and others V. Gobardhan Sao and others, reported in AIR 2002 SC 1201 (6) Myurdhwaj Co-operative Group Housing Society Ltd. V. Presiding Officer, Delhi Cooperative Tribunal and others, reported in AIR 1998 SC 2410 (7) M/s Swarup Builders and others V. Sheikh Mohd Sanghi and others, reported in AIR 1987 SC 1651 (8) Satyadhyan Ghosal and others V. Smt. Deorgin Debi and another, reported in AIR 1960 S.C. 941 (9) S. Irani (Sorkhab) V. Dinshaw & Dinshaw and others, reported in 1999 (supp.) Bom. C.R. 320 (10) Commissioner of Wealth-tax, Amritsar V. Suresh Seth, reported in AIR 1981 SC 1106 (11) Deccan Merchants Co-operative Bank Ltd. V. M/s Dalichand Jugraj Jain and others, reported in AIR 1969 SC 1320, interalia in support of his contention that the defendant No.1 and its partners have committed violation of the mandatory provisions of the MOFA which 4 constitute offences and that since the offences are continuing offences, the bar of limitation would not apply in respect of the demand of maintenance by the plaintiff-society. 4 The learned Counsel for the defendant No.1 at the outset pointed out that the suit is filed sometime on 10th October, 2005 and the demand is made from October, 1998. The learned Counsel submitted that the demand made by the Society prior to three years of the filing of the suit would be time barred. He pointed out that the Society itself was formed sometime on 17th February, 1999. The learned Counsel for the defendant No.1 further submitted that the similar Notice of Motion being Notice of Motion No. 4171/2005 was filed by the plaintiff-society for the same reliefs and the said Notice of Motion was dismissed for non-prosecution by order dated 2nd March, 2006 and therefore, the present Notice of Motion taken out by the plaintiff-society is not maintainable. The learned Counsel further submitted that the defendant No.1 is paying the B.M.C. taxes directly and therefore, the defendant No.1 is not liable to pay the BMC taxes as shown in the Statements. The learned Counsel for the defendant No.1 submitted that though the defendant No.1 has already made an application to the plaintiff- society for admitting him as a member in respect of the said flat Nos 001 and 002 in his occupation, the plaintiff- society has refused to admit him as a member. Therefore, he has approached the Registrar of Co-operative Housing Society in that regard. It may be stated here that according to the learned Counsel for plaintiff-society those proceedings are already disposed of, however, this is disputed by the learned Counsel for the defendant No.1. The learned Counsel for the defendant No. 1 then contended that the defendant No.1 is not liable to pay the Society dues unless and until they 5 are made a member of the Society. The learned Counsel further submitted that the present suit and Notice of Motion are barred by the provisions of Resjudicata under section 11 of CPC. It is further argued the the plaintiffs have failed and neglected to take leave of the Court under order 2 rule 2 CPC to file the present suit. He also contended that this Court would have no jurisdiction to adjudicate the dispute and the Co-operative Court alone would have jurisdiction in the matter. 5 I have heard the Ld. Counsel for the parties and perused the material on record. The contention of the Ld. Counsel for the defendant No. 1 that the Notice of Motion is hit by the provisions of resjudicata cannot be accepted inasmuch as the earlier Notice of Motion being Notice of Motion No. 4171 of 2006 was dismissed on account of non-prosecution and was not decided on merits. Order 2 Rule 2 of CPC also would not be attracted inasmuch as the cause of action in the previous suit being Suit No. 2000 of 2002 is for directions to the defendant No. 1 to execute deed of conveyance, which cause of action is different than the cause of action in the present suit. 6 Insofar as the plea of jurisdiction raised by the defendant No. 1 is concerned, i.e. only Co-operative Court would have jurisdiction in the matter, a plain reading of section 91 of the Maharashtra Cooperative Societies Act, 1960 would reveal that the said section would not be attracted in the facts of the present case. The defendant No. 1 admittedly not being a member of the plaintiff-Society, does not fall in any of the categories of persons covered under section 91. Hence Co-operative Courts would have no jurisdiction to adjudicate the issues raised in the present suit and the plea of jurisdiction raised by the defendant No. 1 has no merit and would stand 6 rejected. 7 Sections 10 & 11 of MOFA clearly lay down that the promoter of the Society is required to take steps for the formation of Co-operative Society and is required to execute all relevant documents and convey title to the Society. Rule 9 provides that unless otherwise agreed, this exercise is to be done by the promoter within 4 months. Infact section 10 of MOFA specifically states that the promoter shall join himself in the application to be submitted to the Registrar for registration of the Cooperative Society, if any flats are not sold out by him. The defendant No. 1 has failed and neglected to take necessary steps to form and register the Society. There is no explanation why this exercise was not carried out by the defendant No. 1. Ultimately, the flat purchasers on their own had to form a Society. In my view, the defendant No. 1 cannot take advantage of his own wrong to avoid the liability of payment of outgoings of the plaintiff-Society particularly in teeth of the mandatory provision of section 10 whereby the defendant No. 1, being the promoter and having retained the said flats, was required to join themselves as member of the Society in the application as contemplated under section 10 for registration of the Society. Undisputedly, the defendant No. 1 is occupying the said flats and enjoying all benefits of the Society. To my mind, the defendant cannot continue to occupy the said flats without making any payment to the Society, which the defendant No. 1 has avoided to pay till date. 8 It may be mentioned here that the defendant No. 1 also did not execute the conveyance deed in favour of the Society, which they were obliged to do under MOFA, and by my order of even date in Notice of 7 Motion No. 1410 of 2007 in Suit No. 2000 of 2002 between the same parties, I have directed the defendant No. 1 to execute the conveyance deed in favour of the plaintiff-Society. 9 The Ld. Counsel for the plaintiff-Society, argued that since the defendant No. 1 has committed offences under the MOFA and the offences being continuing offences, the bar of limitation in respect of the demands by the plaintiff-society would not apply. He submitted that the defendant no. 1 should be directed to deposit the entire amount of arrears alongwith interest @ 18% p.a. on delayed payments. I am, however, not inclined give any findings on this aspect at this stage and these contentions can be raised by the parties and considered at the time of final hearing of the suit. 10 At this juncture, it may be mentioned that since the plaintiff is a Society and the defendant No. 1 is occupying the said flats in the same building as that of other flat purchasers who are members of the Society, this Court made an endeavour to have the matter settled amicably and also adjourned the matter on more occasions than one so that the parties could sit together and work out a solution; however that exercise did not bear fruit. 11 Taking an overall view of the matter, in my opinion, the following order would meet the ends of justice: (i) The defendant No. 1 is directed to deposit the amount of demand raised by the plaintiff-Society as per the Statement annexed at Ex. 1 to the Affidavit dated 23-01-2009 of the plaintiff-Society from 17th February, 1999 (i.e. the date of formation of the Society) minus the interest component and also after deducting therefrom 8 the amounts, if any, already paid by the defendant No. 1 towards the BMC Taxes, within a period of 12 weeks from today. The defendant shall also deposit further amounts of the interregnum (i.e. the period from December, 2008 till date) as demanded by the Society after making the aforesaid deductions i.e interest and BMC taxes paid by defendant No.1; (ii) The defendant No. 1 shall forward a Statement showing how the above figure of deposit was arrived at and also furnish photocopies of the receipts of payments made by them to the BMC, to the plaintiff-Society not later than one week from having made the aforesaid deposit; (iii) From the aforesaid deposit the plaintiff-society are permitted to withdraw the Society dues ( minus the BMC Taxes and interest component) for the period after 10-10-2002 ( i.e. the date preceding 3 years of the filing of the suit) with due intimation to the defendant No.1. The balance amount shall be invested by the Ld. Prothonotary and Senior Master in a term deposit with a Nationalised Bank; (iv) The defendant No. 1 shall pending the suit, continue to deposit the future demands of outgoings towards maintenance made by the plaintiff- Society within 21 days of having received the demand in respect of the said flats and the plaintiff-Society shall be entitled to withdraw these amounts. The defendant No. 1 would be at liberty to pay these amounts to the plaintiff-Society directly. 12 It is made clear that this order is passed without prejudice to the rights and contentions of the parties in the suit and would be subject to 9 adjustment at the time of final hearing and disposal of the suit. It is further clarified that the criminal proceedings pending in the Magistrate’s Court as well as the proceedings, if any, pending before the Registrar in respect of admission of the defendant No. 1 as member of the plaintiff-Society, would be decided independently and on its own merits without being influenced by the observations made in this order. The other prayers, including the demands in respect of flat Nos. 203 and 703 stand rejected. 13 The Notice of Motion to stand disposed of in the aforestated terms. A.A. SAYED J.