1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO.3938 OF 2005 AND NOTICE OF MOTION NO.3817 OF 2006 IN SUIT NO.3313 OF 2005 Bhavesh Harish Gandhi & Anr. ...Plaintiffs Vs. Prithvi Vallabh Bhalchandra Rawat ...Defendants Mr.S. Shetye with Mrs. Nasim Patrawala i/b. M/s. Pravin Mehta & Mithi & Co. for Plaintiffs Mr. K.H.Kanojia with Mr. P.N.Patwardhan for Defendants 1 and 2 Mr. P.N.Patil with Mr. D.V. Sutar for Defendant No.3a Ms.P.D . Anklesaria with Mr. J. Ansari i/b. M/s. Niraanjan & Co for Defendants 4 to 6 Mr. T. Goradia for Defendant No.7 CORAM: SMT.ROSHAN DALVI, J. DATED: 17 TH JUNE, 2008 P.C. 1. The Plaintiffs are the purchasers of a flat on 8th floor of the suit property, which is a building on a plot of land 2 bearing Survey No.287 at Juhu Vileparle Development Scheme, Vileparle, Mumbai. The building is being constructed by Defendants 4, 5 and 6. The Plaintiffs have, therefore, entered into an agreement for the purchase of the suit flat with these Defendants (The Developers). Defendants 1,2 and 3a are the Lessees of a plot of land owned by a Co- operative Society (The Owners). The owners of the above property have sought to develop the property on which the building is being constructed by the Developers and in which the Plaintiffs are the purchasers of one of the flats. 2. On 31 st July, 1991, the owners entered into the agreement of development with the Developers, Exhibit- B to the plaint. At that time a building of ground plus four upper floors was to be constructed. A construction loan was to be obtained from the tenants of the building. Defendants 1,2 and 3 were to be allotted the flat on the first floor upon the construction of the building. 3. The Plaintiffs entered into their agreement for the flat to be purchased by them from the Developers on 28 th May, 1993, Exhibit- D to the plaint. They agreed to pay, and paid by the cheque a sum of Rs.6 lakhs which was termed a construction loan for obtaining the tenancy of the Society under Section 18 of the Bombay Rent Act. The amount was 3 paid directly to the Developers. At that time a building of ground plus five upper floors was to be constructed as per the plans and specifications already made out and sanctioned. Possession of the flat was to be handed over to the Plaintiffs. 4. Under clause 4 of the said agreement further TDR, if made available to the Developers, was to be used for putting up further upper floors and the agreement with the Plaintiffs was to be varied and modified such that they would be entitled to the entire floor immediately below the top floor. A building of ground plus 8 upper storeys came to be constructed. Hence, the Plaintiffs were to be entitled to the 8 th floor flat in the suit building. The owners were not to part with the possession of said flat to any party. 5. Under clause 6 of the agreement, that agreement was not to be terminated by the owners on any ground whatsoever. 6. Under clause 10 of the said agreement the Plaintiffs as the tenants agreed to pay the rents and the permitted increases and the taxes as well as the expenses for the electric meter, water pump, electric service charges and other service charges with regard to the flat purchased by 4 the Plaintiffs. 7. On 30 th June, 1993 the owners entered into an agreement titled as a Supplementary Agreement with the Plaintiffs Exhibit- E to the plaint allowing the Plaintiffs to let, sublet or give on live and license basis or any other basis, the suit flat, of which possession was given to the Plaintiffs without obtaining any prior permission of the owners. 8. It may be mentioned that a reading of the aforesaid agreement, shows that the 8th floor flat was purchased by the Plaintiffs for the consideration paid under the said agreement. These agreements, Exhibits B D & E read together, therefore, show a contract in the nature of tripartite contract under which a lessees of the Co-operative Society as the owners agreed to develop a plot of land consisting of a building through the Developers and allowed the Developers to exploit the TDR on the said building and sell the flats to outsiders for consideration, who would be tenants of the Society, but with an absolute right of possession and transfer. 9. The construction of a suit building took some time. The Plaintiffs, therefore, could not be put in physical possession of the flats agreed to be purchased by them being the flat 5 immediately below the top floor which is the 8th floor flat in the suit building. The Plaintiffs, therefore, requested for some temporary accommodation until their flats were ready for occupation by their letter dated 10 th February, 1994 to the Developers, Exhibit- F to the plaint. The Plaintiffs came to be put in possession of the flat on the first floor of the building as a temporary measure on 22 nd February, 1994 under the letter of the Developers of that date, Exhibit- G to the plaint. The Plaintiffs were to vacate that flat as soon as their flat on the upper floor was ready for occupation. 10. The owners sought to terminate their agreement dated 31 st July, 1991 with the Developers. They sued the Developers in Suit No.3387 of 1994 and applied for an injunction against further construction and further incidental reliefs. In that suit the Developers being Defendant No.5 on behalf of the Defendant No.4 partnership firm filed an affidavit, Exhibit- H to the plaint, showing the entitlement of the various persons to the specified flats constructed by them in the building. Flat No.801 on the 8th floor of the building was shown to be in the name of the Plaintiffs under the Lease Agreements entered into by the Developers with the Plaintiffs dated 28 th May, 1993. That affidavit shows that the Plaintiffs were temporarily accommodated on the first floor and would be shifted to Flat 6 No.801 on the 8th floor, when that flat was ready. 11. The application for injunction filed by the owners against the Developers in their Suit No.3387 of 1994 came to be essentially rejected by an order dated 29 th January, 2000 passed by Hon'ble Justice D.K. Deshmukh, Exhibit- I to the plaint. That agreement shows the construction of a building consisting of ground plus 8 floors by using the TDR as well as the extent of consideration of Rs.65 lakhs for termination of the agreement out of which Rs.61 lakhs remained to be paid by the owners to the Developers to terminate their agreement. The order, therefore, observes that the owners were not entitled to temporary injunction that they sought. Nevertheless and despite the aforesaid affidavit of Defendant No.5 on behalf of Defendant No.4 dated 14th September, 1994 showing the temporary accommodation of the Plaintiffs in the flat on the first floor, Court Receiver came to be appointed in respect of that flat on the premise that that area was lying unused. Since various third party interests were created, the Developers were called upon to furnish the list of the names of all the persons in favour of whom interests were created in the building constructed by them and which were subject to the result of that suit. 12. Hence, the Court Receiver came to be appointed of the 7 first floor flat which was then in the occupation of the Plaintiffs in the absence of the Plaintiffs. A Review Petition filed thereto came to be dismissed by Hon'ble Justice Deshmukh on 9 th February, 2000 on the premise that a impression came to be given to the Court that, that premises was vacant, and therefore, the owners could be put in possession as the Agent of the Court Receiver. 13. The Plaintiffs applied for being made party Defendants to that suit, since they were in possession of the premises for which the Court Receiver was appointed and could not be removed therefrom by any party to that suit. 14. In an Appeal filed against the order in the Review Petition, Exhibit- J to the plaint, the Division Bench of this Court by an order dated 23 rd March, 2000 directed the Court Receiver to take only symbolic possession without dispossessing any one in possession of the flat on the first floor. 15. The Court Receiver made his report on 25 th July, 2000, Exhibit- K to the plaint, that the Plaintiffs, who had booked a flat on the 8 th floor, were in occupation of the first floor flat for which the Court Receiver was appointed by way of an alternate arrangement. The Court Receiver took symbolic 8 possession from the Plaintiffs of the first floor flat. The Plaintiffs undertook not to part with the possession of the said flat with any party. They have since remained in possession of the first floor flat as agents of the Court Receiver in the suit of the owners. They claim to be put in possession of the precise flat purchased by them in their own right. Hence, the Plaintiffs Attorneys by letter dated 25th May, 2005 Exhibit- L to the plaint called upon the Developers to put them in possession of the flat agreed to be sold to them, which was one floor below the top floor i.e. 8th floor flat. 16. The Developers by their reply to that letter dated 15 th June, 2005, Exhibit- M to the plaint, stated that in fact the Plaintiffs had requested the Developers to cancel their agreement and their agreement stood mutually cancelled. The contents of that letter Exhibit- M to the plaint are wondrous. The Developers stated that maintenance charges of Rs.10,227.16 was payable by the Plaintiffs since March, 1994, which aggregated to Rs.12,27,259.20 for 120 months. It was alleged that the Plaintiffs stated that their own agreement, described as a Construction Loan Agreement, was not legal, unregistered and that since the 8th and 9 th floor flats were not constructed for the last 10 years and the value of the flats were much more than the consideration 9 amount of Rs.6 lakhs paid by them, the payment stood discharged towards the compensation amount claimed by the Developers and the agreements stood cancelled. It is further stated that the Plaintiffs requested the Defendant No.5 “to pay some amount ” though they were not legally entitled. Accordingly for whatever be the reasons stated in the letter dated 15 th June, 2005, which is now contended to be the letter of termination, the Plaintiffs were denied possession of the 8th floor flat by the Developers. 17. The Plaintiffs through their Attorney's letter dated 21st June, 2005, Exhibit- N to the plaint, denied the claims and contentions of the Developers. 18. It is under such circumstances that the Plaintiffs sued for a declaration, that their agreement dated 28 th May, 1993 with the Supplementary Agreement dated 30th June, 1993 were valid and subsisting and not terminated and for ancillary reliefs with regard to the suit premises. 19. After the filing of the Suit the Plaintiffs were informed that the Defendant No.7, who is the relative of the Developers, was granted rights in respect of the 8th floor flat under an unregistered Construction Loan Agreement dated 28 th September, 2005 Exhibit- U to the plaint. Consequently, 10 it was sought to be shown that certain third party rights were created by the Developers in respect of the suit premises prior to the filing of the Suit. This Suit has been filed on 28 th November, 2005. Strangely, Defendant No.7 is shown to have paid the same consideration amount which the Plaintiffs had paid under their agreement entered into with the Developers 12 years prior to the agreement with Defendant No.7. A bank entry relating to the payment of Rs.6 lakhs dated 1st July, 2005 is shown to be in the personal account of Defendant No.5 and not the partnership firm of Defendant No.4. The Defendant No.7 is stated to be the relative of the Defendant No.5 and hence, mere transaction in his personal bank account may be for any other transaction between the parties. 20. Upon a request made by the Defendant No.7 on 2nd October, 2005 by the letter dated 4th October, 2005 the possession is stated to be handed over to the Defendant No.7 for putting up tiles and doing plumbing work at the cost of Defendant No.7 under the developers' letter Exhibit- X to the plaint. 21. The Court Receiver already appointed in respect of the suit premises has reported on 25 th April, 2008 pursuant to directions passed by Hon'ble Justice S.C. Dharmadhikari on 11 7 th April, 2008 that the flat on the 8th floor is furnished. The report does not show who is in possession or that the Defendant No.7 is in possession of that flat. The Plaintiffs seriously dispute the possession and contend that the agreement as well as the correspondence between the Developers and Defendant No.7 as a camouflage and made with an intent to prejudice the rights of the Plaintiffs. 22. The actual physical possession which the Defendant No.7 claims is required to be seen. The documents which would reflect such possession are the electricity bills in The Defendant No.7 was called upon to produce her electricity bills. The flat is a three bed room flat. It has three bathrooms having three geysers and three bed rooms having three air conditioners. Electricity bills amount to a few hundred rupees. They specifically reflect total lack of physical possession, use or occupation of the flat. Hence, merely giving possession and hading over keys to put tiles and do plumbing work by the Developer or merely furnishing the flat by the prospective purchaser cannot show such at party in physical possession who would be entitled to rights under Order 40 Rule 1(2) of the Civil Procedure Code as a party in possession whom the parties to the suit would not have the present right to remove. The Plaintiffs in fact have sought appointment of the Court Receiver with specific 12 directions to take possession from the Defendant No.7 under such fraudulent contract of transfer of the Plaintiffs' flat based upon and after the alleged termination of the Plaintiffs agreement dated 28 th May, 1993 for the absurd and unacceptable reasons mentioned in the Developers letter of termination dated 15 th June, 2005. 23. It is contended on behalf of the owners that the Plaintiffs have no right to the first floor flat which was specifically agreed to be given to them. It is conceded by the Plaintiffs that as soon as they are put in possession of the 8th floor flat which was agreed to be sold to them, they would vacate the first floor flat. The Court Receiver has already been appointed in respect of the first floor flat and directed to take only symbolic possession. Consequently, the rights of the owners as well as the Plaintiffs under their respective agreements, Exhibit- B and Exhibit- D respectively are protected pending the suit of the owners. The Plaintiffs' rights under the agreement dated 28 th May, 1993 Exhibit- B, which is interminable by the owners read with the Supplementary Agreement of the Plaintiffs with the owners dated 30 th June, 1993, in which the Plaintiffs have a specific right to deal with the property without the permission of the owners require the Court to grant a specific protection to the Plaintiffs in respect of the property in this suit against the 13 onslaught of the Developers by entering into further agreements with third parties related to them whilst the rights of the Plaintiffs remains valid and subsisting under the agreement entered into by them with the Developers and for which consideration has been paid by the Plaintiffs. 24. It is argued on behalf of the Developers that the agreement with the owners has been validly terminated and that the owners were to return Rs.65 lakhs to the builders/Developers but, Rs.61 lakhs remained to be returned and hence, the Developers can claim the right to further transfer of flats in favour of third parties. 25. Whatever be the agreement between the owners and the Developers and a further agreement to terminate their agreement to develop the property, the rights of third parties as flat purchasers cannot be jeopardized so as to make profit from the venture by the Developers. The agreement with the Plaintiff is separate and distinct. That agreement is interminable. That agreement shows receipt of the entire consideration mentioned therein save and except the rents and taxes which are to be paid thereafter in the normal course. That agreement read with agreement titled as Supplementary Agreement entered into by the Plaintiffs with the owners gives the Plaintiffs a right to deal with the 14 property as a complete owner would. The Plaintiffs are, therefore, seen to be the flat purchasers of the flat immediately below the top floor flat which is admittedly a 8th floor flat. 26. The temporary accommodation given to the Plaintiffs under a letter dated 22 nd February, 1994 of the first floor flat also shows the acceptance of the right of the Plaintiffs as the flat purchasers by the Developers. The Developers have specifically shown flat No.801 on the 8th floor as a flat allotted to the Plaintiffs in the affidavit of Defendant No.5 filed in the Suit No.3387 of 1994. They as well as the owner misguided the Court into appointing Court Receiver for that flat on the premise that it was vacant and unused. Consequently, in Appeal from order of appointing such Court Receiver and rejecting the Review therefrom, the Court Receiver was directed to take only symbolic possession. 27. It is strenuously argued on behalf of the Developers that the Plaintiffs have failed to pay the maintenance charges demanded by the Developers. There is no contract between the parties to claim such charges. There is no clause shown in the agreement dated 28 th May, 1993 which entitles the Developers to claim any rent or maintenance charges. No demands have been shown to be made by the Developers 15 upon the Plaintiffs. The only charges payable other than the consideration under the agreement for the construction of the suit flat was the rent of Rs.2000/- , permitted increases under the Bombay Rent Act, taxes, and the expenses of the Society. It is inexplicable how the Developers can claim those charges. Those charges at best would be payable by the Plaintiffs to the Society as and when the Society is formed and the land below the building is conveyed to the Society so that the Plaintiffs would be the tenants of the Society. 28. It is claimed that the agreement with the Plaintiffs is terminated. Even that is isoteric. No breach on the part of the Plaintiffs aside from the aforesaid nonpayment of the taxes and maintenance amount payable to the Society is shown. For want of any breach as against the Developers, Developers cannot even terminate the agreement entered into with the Plaintiffs. Consequently, the entire letter of termination dated 15 th June, 2005 Exhibit- N to the Plaint is on an apologetic note and seeks to show how the Plaintiffs have themselves conceded to the termination, so that the agreements stood mutually cancelled. The Plaintiffs state that they are ready to register their agreement. The Plaintiffs accept that the market value of the flat on the 8th floor constructed after so long is worth much more than that they 16 entered into the agreement. The Plaintiffs deny any maintenance charges payable to the Developers. Consequently the notice of termination is denied specifically by the Plaintiffs' Attorneys' letter dated 21st June, 2005. 29. Though the agreement came to be entered into in 1993 the Plaintiffs have had a long wait. During that period, mercifully, they have been put in possession of a flat already constructed, which otherwise would belong to the owners. Their rights have been expressly admitted in the affidavit of the Developers. Only after filing of the suit by the Plaintiffs the existence of the Defendant No.7 is sought to be shown. That is only under unregistered document by and between the Developers and Defendant No.7, their relative. That contract is not substantiated by the documents of Defendant No.7 as the party in possession. 30. Defendant No.7 concedes that she is not continuously in possession, because she is in possession of another flat in the locality. Hence, the defendant No.7 at best claims juridical possession under the agreement of Tenancy dated 28 th September, 2005 and not actual possession by way of a physical presence in the suit flat. That flat is primafacie seen to belong to the Plaintiffs. Plaintiffs rights in that flat deserved to be protected. Hence, following order:- 17 ORDER I. Court Receiver is appointed Receiver in respect of Flat No.801 on the 8 th floor of Vishwagulab Building at N.S. Road No.1, Juhu, J.V.P.D . Scheme, Mumbai- 400 056. II. The Plaintiffs are appointed Agents of the Court Receiver. The Plaintiffs shall have the right to use, occupy and possess the suit premises as such Agents without payment of Royalty, but upon payment of the rent, permitted increases, taxes as well as maintenance charges towards the Society as applicable and as paid by all other occupants of the other flats in the suit building. III. The Plaintiffs shall execute the Agency Agreement with the Court Receiver as required by him. IV. The Plaintiffs shall hand over possession of the flat on the first floor in the suit building to the Court Receiver in Suit No.3387 of 1994 simultaneously when the Plaintiffs are put in possession of flat No.801 in this suit. 18 V. This order shall be subject to the orders passed in Suit No.3387 of 1994. VI. The Court Receiver shall hand over all the furniture in the suit flat No.801 to the Defendant No.7. VII. This Suit as well as Suit No.3387 of 1994 require to be tried together. Any party hereto, may apply to the Hon'ble The Chief Justice for assignment of one Court for both the Suits. VIII. This order is stayed for three weeks. (SMT. ROSHAN DALVI, J.)