((-1-)) IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION APPEAL NO.1145 OF 1996 IN NOTICE OF MOTION NO.5 OF 1998 IN SUIT NO.4476 OF 1995 1. Lokhandwala Estates and Development Company Limited, 48, Indra Narayan Road, Santacruz (W), Bombay 400 054. 2. Mr.Siraj Taherali Lokhandwala, 48, Indra Narayan Road, Santacruz (W), Bombay 400 054. Appellants versus Goregaon Siddharth Nagar Sahakari Griha Nirman Sanstha Limited, 81/648 Siddharth Nagar No.1, Road No.II, Goregaon (W), Bombay 400 104 through the Administrator Mr.S.M.Mhadgut Respondent Mr.Virag Tulzapurkar with Mr.Percy Mody with Ms.Maya Sarkar i/by M/s.B.Munim & Co. for appellants. Mr.S.H.Doctor, Sr.Counsel with Dr.Y.R.Naik, Sr.Advocate for respondent. CORAM : DR.S.RADHAKRISHNAN AND S.C.DHARMADHIKARI, JJ. DATE OF DECISION : 28th October 2005 DATE OF GIVING REASONS : 8th December 2005 JUDGEMENT : (S.C.DHARMADHIKARI, J.) :- JUDGEMENT : (S.C.DHARMADHIKARI, J.) :- JUDGEMENT : (S.C.DHARMADHIKARI, J.) :- 1. This appeal is directed against an order ((-2-)) dated 27th September 1996 in Notice of Motion No.5 of 1996 in the aforesaid suit. 2. By the order under appeal, the learned Single Judge (S.N.Variava, J. as His Lordship was then) dismissed the Notice of Motion. 3. The appellants are original plaintiffs whereas respondent is the original defendant. 4. The appellants instituted abovementioned suit in this Court claiming a declaration that the agreement dated 23rd November 1992 (Annexure-I to the plaint) is valid, subsisting and binding on the defendant and that they be ordered and decreed to specifically perform the same. Alternate prayer in the suit was for a decree in the sum of Rs.3,68,841/- along with interest as per the particulars of claim marked Annexure-J to the suit with a further prayer that it should be declared that repayment of the aforesaid amount is secured by a valid and subsisting statutory charge on the right, title and interest of the defendant in the land allotted to them. Further, it was prayed that the charge may be allowed to be enforced by the Court in the manner more particularly set out in prayer (d)(iii). ((-3-)) 5. After institution of the suit, an application by way of Notice of Motion No.5 of 1996 was made for interlocutory reliefs. The said reliefs were sought in the following terms:- (a) That pending the hearing and final disposal of the suit the Court Receiver, High Court, Bombay or such other person as this Honourable Court may deem fit be appointed Receiver of the allotted land including the right, title and interest of the Defendants therein with all powers under Order 40 Rule 1 of the Code of Civil Procedure, 1908; (b) that pending the hearing and final disposal of the suit, the Defendants by themselves, their servants, agents and nominees be restrained by an order and injunction of this Honourable Court from in any manner - (i) obstructing or interfering with the construction and development work being carried out and to be carried out by the Plaintiffs on the allotted land. (ii) alienating, disposing of, encumbering or parting with possession of the said allotted land described in Exhibit ‘E’ to the plaint or the structure or structures standing or constructed thereon or any part thereof or creating any third party rights or interest therein or any part thereof and/or inducting any one in the buildings already constructed on the said allotted land and/or which may be hereafter constructed on the said allotted land by the Plaintiffs; (iii) appointing any contractors or developers for carrying out the construction on the said allotted land; (iv) disposing of, alienating, ((-4-)) encumbering or putting up any construction or allowing any third party to put up any construction on the part of the land shown as Part B on the Plan annexed as "Exhibit ‘F’ to the Plaint or any part thereof; (v) surrendering or handing over possession of the premises in the old structures presently occupied by the members/tenants of the Defendants on the remaining part of the Defendants land save and except in accordance with the said Agreement dated 23rd November, 1992; (c) for ad interim reliefs in terms of prayers (a) and (b) above; (d) cost of the Notice of Motion be provided and (e) for such further and other reliefs as the nature and circumstances of the case may require." This Notice of Motion was taken out on 1st January 1996. The application for interlocutory reliefs as above was supported by an affidavit of the second plaintiff. 6. It is the case of the plaintiffs that Bombay Housing Board was seized and possessed of pieces and/or parcels of land situate lying and being at Goregaon (West) Taluka Andheri, bearing City Survey No.261 (part) and 264 of City Survey Goregaon. Bombay Housing Board constructed several single storeyed structures consisting of 808 single room tenements for allotment to eligible persons falling under low income group ((-5-)) as per the rules of the said Board. The said land and premises are known as "Siddharth Nagar, Vibhag I", and the tenements therein were allotted to the tenants by the Board. Maharashtra Housing and Area Development Authority became the successor in the interest of the said Board. Out of the original 808 tenements, 136 tenements were demolished and the remaining 672 structures became unfit for habitation due to the passage of time. MHADA considered it advisable to demolish the remaining 672 tenements and to construct multi-storeyed buildings in their place and provide the present occupants of 672 tenements with accommodation therein of suitable area. The occupants of 672 tenements requested MHADA that 12 acres of the said land be allotted to them at a nominal rent construction and allow them to construct either by themselves or through a builder and/or developer. The said occupants formed a co-operative Society viz. Goregaon Siddharth Nagar Sahakari Griha Nirman Sanstha Limited being the respondents herein. 7. It is the case of the appellants that the said land which is more particularly described as annexures A and B was purported to be handed over ((-6-)) to the respondent society. By letter dated 16th June 1996 addressed by appellant no.2 to the respondents, an offer was made to develop the said land to be alltted by MHADA on the terms and conditions recorded in the letter. 8. The further case is that by a Resolution dated 9th September 1986 passed by the respondent it was resolved that appellant no.2 would be appointed as developer for development of the land which is proposed to be allotted to the respondent. After this followed a letter dated 11th September 1986 from the respondents to appellant no.2 agreeing to execute an agreement provided, appellant no.2 accepts modifications suggested by the respondent. It is further contended that the appellant no.2 by his letter dated 13th September 1986, inter alia, agreed to the terms and conditions mentioned in the respondents letter subject to the modifications/amendment/clarification set out in this letter. It is further contended that respondents by their letter dated 15th September 1986 addressed to appellant no.2 clarified some of the points raised by appellant no.2 in his letter dated 13th September 1986. ((-7-)) 9. It is then contended that appellants and respondents filled in and filed a statement in Form No.37-EE with the Appropriate Authority under the provisions of Section 269-B(1) of Income Tax Act. This form was filed on or about 30th September 1986. It is contended that notice under section 269-D(1) of the Income Tax Act, 1961 was issued on 21st January 1988 proposing to acquire the said land. It is contended by an order passed dated 20th August 1990 passed under section 269 D(7) of the Income Tax Act, 1961, the proceedings initiated by the earlier notice were dropped and parties were informed that the land will not be acquired. 10. However, the Income Tax Act, 1961 was amended and Chapter XX-C came into force from 1st October 1986. Hence appellants and respondents filled in and filed with the Appropriate Authority a statement in Form No.37-I without prejudice and under protest. It is contended that in pursuance of this step, the Appropriate Authority issued a certificate under provisions of Section 269-UL(3) of the Income Tax Act on 9th February 1987. It was certified that the Department has no objection to the transfer of land which was the subject matter of an agreement ((-8-)) between the parties. 11. It is then contended that the matter was placed for discussion in General Body Meeting of respondents held on 5th April 1987 wherein the resolution of the Managing Committee dated 9th September 1986 was approved and confirmed. On 8th February 1988 the MHADA allotted to the respondents the area more particularly set out in the letter of allotment. 12. The matter was again discussed on 14th February 1988 before the General Body of respondent and the decision of the Managing Committee was approved. Thereafter, terms and conditions of allotment were communicated by MHADA vide letter dated 14th February 1990. The respondents approached the MHADA with a request to modify certain terms and conditions. The request for modification was accepted and some of the terms and conditions were modified by MHADA by communication to that effect dated 3rd September 1990. 13. It is then contended that the respondents submitted to MHADA for its approval the lay out plan in respect of said land which included a lay ((-9-)) out of the allotted land. 14. It is the case of the appellants that pursuant to the said allotment, MHADA agree to give free of cost to respondents net 8 Acres land out of total 10 acres and further give remaining 2 acres at current market rate to be determined by the Town Planning Department. MHADA permitted the development of the portion (2.63 acres gross area equivalent to 2 acres net area) in accordance with Development Control Regulations. 15. It is then contended that pursuant to negotiations and discussions an agreement was arrived at between the appellants and respondents (Annexure-I) on 23rd November 1992. It was agreed that the respondents would permit the appellants to construct 672 tenements each having an area of 325 sq.ft. carpet. These would be the self contained tenements/flats. In lieu of the same, the respondents, after execution of lease in their favour by MHADA, executed in favour of appellant no.1 and/or their nominees, one or more deeds of sub-lease on the same terms and conditions which are contained in the lease-deed executed by the MHADA in its favour. The terms and conditions recorded by the ((-10-)) appellants and respondents need not be referred to in detail at this stage. 16. It is the case of the appellants that this agreement is registered in the office of Sub Registrar of Assurances, at Bandra on 25th November 1992 under serial No.1196/1992. 17. The appellants referred to certain developments inasmuch as after the agreement was executed the Executive/Managing Committee of the respondent was dissolved. An Administrator was appointed by the authorities exercising powers under the Maharashtra Co-operative Societies Act, 1960. 18. It is the case of the appellants that they learnt that the respondents are trying to rescind agreement. This was the apprehension because a communication was received by the appellants from the Administrator of the respondents that some difference and dispute had arisen amongst the members, inter se. The appellants state further that they took up the matter with the Administrator and had in fact visited the development site with the Administrator from time to time. ((-11-)) 19. The case of the appellants if that on account of the internal differences and dispute the members of respondents are trying to oust them from the project. They point out that the complete spade work with regard to the sanctioned lay out and the building plan and construction of three out of total 13 buildings, at huge costs and efforts have been completed, and they cannot be ousted from this project of development. Three buildings consisting of 60 tenements having been constructed. The obligations of the appellants are being carried out. Similarly, the agreement postulates members of the respondents shifting from their old tenements to enable the appellants to demolish them and commence construction of further buildings. It was pointed out by the appellants that they have moved the Municipal Corporation of Greater Bombay (MCGB) for grant of occupation certificate. However, despite demonstrating their readiness and willingness to carry out their obligations, some members of the respondents are adamant and would try to put an end to the suit agreement. 20. It is in these facts and circumstances that the aforesaid suit was instituted by the ((-12-)) appellants and the Notice of Motion was taken out therein. 21. After receipt of the notice, the respondents appeared and filed an affidavit in reply. 22. In the reply which is filed by the Administrator of the respondent society, it was pointed out that he took charge on 28th December 1993. The basic facts are not disputed. However, it was pointed out that the Managing Committee of the society passed Resolutions in it’s meeting held on 16th August 1986 and 9th September 1986 and gave the contract of development to the appellants - original plaintiffs. The Managing Committee Resolution had been approved by the General Body in its meeting held on 5th April 1987. It was subsequently discussed in a meeting held on 14th February 1988 and thereafter the subject/suit agreement was executed. It is pointed out that the agreement dated 23rd November 1992 has been registered. The other facts about construction of three buildings, is not disputed in this affidavit which is affirmed on 7th December 1995. 23. However, in a subsequent affidavit filed it ((-13-)) was pointed out by the Chairman of the society that the Managing Committee has not taken into evidence majority of the members of the society while entering into the agreement. It was pointed out that the Managing Committee in power earlier deliberately did not hold the elections and continued to function even after 6th April 1990 which is the last date of their term. All actions of the Managing Committee, therefore, were not in the interest of the members of respondent society, were in violation of the bye-laws and the Maharashtra Co-operative Societies Act and Rules, and were thus contrary to the MHADA Act as well. The agreement was, therefore, termed as patently illegal and contrary to law. 24. In paragraphs 6 and 7 of this affidavit this is what is stated :- "6. I say that any agreement between the Defendant Society and the Plaintiffs could only have been made after it was approved by the general body of Defendant Society. The Defendant Society has not approved the agreement dated 23.11.92. This agreement was never placed before the general body before its approval. On 17.2.93 the Assistant Registrar, C.S. (Housing Cell), MHADA, appointed an administrator under section 77A of the M.C.S.Act, 1960 on Defendant Society because of the failure of its managing ((-14-)) committee to hold general body meetings and as their term had expired in the year 1990. Under section 77A of the Maharashtra Cooperative Societies Act, the Administrator could have been in charge of the office of Defendants only till 16.8.93. However, plaintiffs saw to it that the Administrator was continued beyond this period without holding elections. One S..Mhadgut, Advocate was the Administrator on Defendants from December 1993 or thereabouts. I am informed that S.M.Mhadgut was working in the Co-operation Department but had to resign prematurely before superannuating on account of corruption charges. The said S.M.Mhadgut, from the date of his appointment as Administrator on Defendants, was entirely in the pocket of the Plaintiffs. On 16th January 1994 a general body meeting of the Defendant Society was called, which was attended by about 298 members. One of the items on the Agenda was consideration of the Agreement dated 23.11.92 between the Plaintiffs and Defendants. The said agreement was placed before the general body of Defendants for the first time. The said meeting was held under the Chairmanship of S.M.Mhadgut. The general body on 16th January 1994 by 242 against 56 members resolved to reject the agreement dated 23.11.92. An English translation of the proceedings of the meeting held on 16.1.94 of the general body of Defendant Society is annexed hereto and marked Exhibit "1". 7. Immediately thereafter Plaintiffs set up Six members of Defendant Society, three of whom were members of the superseded managing committee to file a dispute being case No.CC-IV/51 of 1994 under S.91 of the Maharashtra Cooperative Societies Act, 1960 inter alia for a declaration that the agreement dated 23.11.92 between Plaintiffs and Defendant Society was valid and subsisting and the same could not be avoided by them. Injunctions pending the dispute were also sought viz from implementing resolution dated 16.1.94 of the general body of Defendants; interfering with the development work of Plaintiffs; ((-15-)) appointing any other contractor etc. In the said dispute only the administrator S.M.Mhadgut was made a party as has been done in the present suit. The Administrator S.M.Mhadgut colluded with the Disputant members in that case and the ex-parte injunction restraining the implementation of resolution dated 16.1.94; restraining cancellation of the agreement dated 23.11.92 etc. was confirmed. Thereafter twenty four members of the Society including myself have filed Appeal No.443 of 1994 before the Maharashtra State Co-op. Appellate Court, Bombay, to challenge the exparte injunction granted by the Cooperative Court No.IV, Greater Bombay in case No.CC-IV/51 of 1994. The said appeal is at yet pending and the same is being defended by the original Disputants therein who are stooges of the Plaintiffs. Copies of the dispute application and the exparte injunction in the said dispute No.CC-IV/51 of 1994 are annexed hereto and marked Exhibits "2 and 3". A copy of the collusive reply filed by S.M.Mhadgut for Defendant Society is annexed hereto and marked Exhibit "4". A copy of the confirmation of injunction dated 8.7.1994 in Case No.CC-IV/51 of 1994 is annexed hereto and marked Exhibit "5". A copy of the memo in Appeal No.443 of 1994 is annexed hereto and marked Exhibit "6". 25. It is in these circumstances that the respondents pointed out that the appellants are not entitled to any interlocutory reliefs. Pertinently, it was stated that none of the original letters which the appellants have referred to in paragraph 7 of the plaint are on the file of respondent society. Similarly, a serious grievance was raised about the meeting of 5th April 1987 inasmuch as on the agenda of this ((-16-)) meeting there is no item for placing the Resolution dated 9th September 1986 allegedly passed by the Managing Committee, for approval of or confirmation. The deponent of this affidavit states that he was personally present at the General Body Meeting held on 5th April 1987. He has affirmed on oath that there was no discussion at this General Body Meeting in regard to a decision of the Managing Committee dated 9th September 1986. Thus, he alleges manipulation, fabrication of records by earlier Managing Committee in collusion with the appellants. With regard to the so called minutes of this meeting, in paragraph no.17, this is what is stated :- "... ... In 1992 some of the members had applied to the Assistant Registrar, Co-operative Societies (Co-op. Cell) Bombay Housing and Area Development Board, for copy of the proceeding dated 5.4.1987. A certified copy of the proceedings of the meeting dated 5.4.1987 which have been supplied by the aforesaid Assistant Registrar do not show that any discussion took place in regard to approval to the resolution dated 9.9.1986 of the managing committee of the Defendants. A xerox copy of the Marathi resolution dated 5.4.1987 which was furnish by the Assistant Registrar, Co-op. Society and which is signed by one S.S.Deshpande on 7.4.1987 along with English translation is annexed hereto and marked Exhibit "9". The resolution regarding approval of the agreement with Plaintiffs is shown as having been proposed by one K.G.Shinde and seconded by Arjun Palshetkar and Vithal G. ((-17-)) Shinde. Whilst K.G.Shinde was present at the General Body Meeting of Defendants held on 5.4.1987, the seconders Arjun Palshetkar and Vithal G. Shinde were not present at this meeting. Xerox copy of the original attendance sheet which is signed by members is annexed and marked Exhibit "10". A xerox copy of this attendance sheet was sent on 13.4.1987 to the Authorised Officer A.S.Gholkar of the Housing Board. An English translation of the letter dated 13.4.1987 is annexed hereto and marked Exhibit "11". In regard to the meeting which was held on 14.2.1988 the notice does not refer to the agreement between Plaintiff and Defendants." 26. It was also seriously pointed out that there is no representation as far as making use of remaining land or FSI.. The lay out plan has not been submitted to the MHADA.. The MHADA has not permitted allotment of land of two acres to any developer or builder/contractor. Therefore, the terms and conditions which are alleged to have been agreed between earlier Managing Committee of the respondents and the appellants and the agreement dated 23rd November 1982, are at variance. The agreement is totally a one sided document. The same is not binding on the respondents and their members. As far as completion of the work allegedly at site in paragraph no.24 of the said reply, a serious grievance was made that assuming without admitting that the agreement is valid, the ((-18-)) appellants were to complete 13 buildings within 5 years from the agreement, date of issuance of commencement certificate time being essence of the contract. The work has not been carried out as per this time schedule. The appellants were never ready and willing to perform their part of contract. They are only interested in developing the additional FSI for personal gains. The last contention that was raised was that the agreement cannot be specifically performed. Compensation in terms of money for any loss which is allegedly suffered, can always be granted. The suit itself is not maintainable and therefore, the Notice of Motion deserves to be dismissed. A further affidavit in reply is filed on 10th September 1996. 27. A rejoinder affidavit was filed by the appellants on 6th September 1996 and same response was given thereto. 28. This Notice of Motion was placed before a Learned Single Judge of this Court and by the impugned order he was pleased to dismiss the same. The ad-interim order was vacated. However, the learned Single Judge noted that the advocate appearing for the respondents were ((-19-)) willing to have an independent Architect appointed by the Court to determine what amounts actually have spent on this project by the appellants. The members were willing to pay back these amounts to the appellants. However, learned counsel for the appellants pleaded no instructions. 29. The learned Judge has refused interim relief in favour of the appellants by observing that :- (a) the suit agreement is a development agreement; no special performance of said agreement can be granted by virtue of Section 14 of the Specific Relief Act, 1963; (b) that the agreement is absolutely one sided. 30. Shri Tulzapurkar - learned counsel appearing for the appellants in support of this appeal contends that the aforesaid conclusions of the learned Single Judge are wholly erroneous. He submits that the learned Judge failed to notice some undisputed factual aspects of the matter. According to him, the learned Single Judge should ((-20-)) have perused the plaint averments. The plaint averments on the basis of which the matter ought to be considered set out that the certificate was granted by the authorities under the Income Tax Act, 1961 on 9th February 1987 certifying that it had no objection to transfer of the land which was the subject matter of the agreement. He further submits that the averments in the plaint and the documents supporting them clearly stipulate that interest in the immovable property i.e. the land is being transferred and thus this is not a development agreement. The agreement itself postulates sub-lease in favour of the appellants. They have right to enter upon the land not