SCA/126/2003 1/21 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 126 of 2003 For Approval and Signature: HONOURABLE MR.JUSTICE JAYANT PATEL ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= KALPANA CO-OPERATIVE HOUSING SOCIETY LTD - Petitioner(s) Versus STATE OF GUJARAT & 14 - Respondent(s) ========================================================= Appearance : MR SK JHAVERI for Petitioner(s) : 1, MS JIRGA D JHAVERI for Petitioner(s) : 1, MR SHIVANG SHUKLA, AGP for Respondent(s) : 1, 15 MR PRANAV G DESAI for Respondent(s) : 2, MR SINGHI for Respondent(s) : 3 – 5 MR BB NAIK for MR BS PATEL for Respondent(s) : 6. MR SN SOPARKAR with MR PP BANAJI for Respondent(s) : 7, 11, 13, MR TRIVEDI for Respondent(s) : 12 None for Respondent(s) : 8 - 10, 14. ========================================================= CORAM : HONOURABLE MR.JUSTICE JAYANT PATEL Date : 01/04/2008 ORAL JUDGMENT The short facts of the case appear to be SCA/126/2003 2/21 JUDGMENT that the petitioner is a registered Co-operative Society which had preferred Lavad Suit No.1158 of 2002 before the Board of Nominee prohibiting the defendants therein from making any construction over the land. As per the petitioner Society, the members namely, Shri Jayesh J. Dave and Jagdishbhai Dave had, without permission of the Society, transferred, assigned and alienated two plots which were allotted by the Society to respondents no.3 and 4 and the respondent no.6, who was claiming right as the purchaser of the plot as well as the power of attorney, was to make construction over the plots. The learned Nominee, after hearing both the sides, had passed the order dated 28th October, 2002 whereby the application for interim injunction was rejected. The petitioners carried the matter in revision before the Tribunal being Revision Application No.426 of 2002 and interim injunction was also prayed in the said revision proceedings. The Tribunal, after hearing both the sides, rejected the said application and it is under these circumstances, the present petition before this court. 2. Heard Ms. Jhaveri for the petitioner, Mr. Naik in place of Mr. B.S. Patel for respondent no. 6, Mr. Singhi for respondents no.3 to 5, Mr. Shukla, learned AGP for respondents no.1 and 15, Mr. Desai for the Corporation, Mr. Soparkar with Mr. Banaji for respondents no.7, 11 and 13 and Mr. Trivedi for respondent no.12. SCA/126/2003 3/21 JUDGMENT 3. This court, in the main Special Civil Application, when the petition was admitted, had granted interim relief in terms of para 6(B) whereby the respondents no.3 to 6 were restrained from transferring, assigning, alienating or selling plot nos.1 and 2 of the petitioner Society to any other person. 4. Thereafter, it appears that the respondent no.6 made certain illegal construction of coverage of the roof etc.. Therefore, Civil Application No.6806 of 2007 was preferred in Special Civil Application No.126 of 2003 and in the said Civil Application, on 27th February, 2008, this court passed the following order:- “1. This Court on 25.02.2008 after hearing, had passed the following order: “1. Prima facie it appears that Dr.Yogesh Patel, son of Shivlal Patel, who is holding the Power of Attorney of the original members, viz. respondents Nos.3,4, & 5, has purchased the plot of the Society without their being any No Objection Certificate of the Society and ex facie in contravention to the provisions of the Gujarat Cooperative Societies Act read with the Rules. 2. It also prima facie appears that he has submitted the construction plan before the Vadodara Municipal Corporation without having been countersigned or No Objection Certificate issued by the Society for commercial purpose. Not only that, but the construction has been made for commercial complex under the alleged SCA/126/2003 4/21 JUDGMENT permission of the Vadodara Municipal Corporation. 3. The BU Permission shows that the construction at the ground floor is for parking, then first floor, second floor, third floor and at the fourth floor, construction in part. So fourth floor is not fully constructed. It further appears that this Court (Coram:D.N.Patel, J.), on 09.01.2006, admitted the petition and granted interim stay in terms of para 6(B), whereby respondents Nos. 3 to 6 were restrained from transferring, assigning, alienating, selling Plot Nos. 1 & 2 of the petitioner Society to any other person. 4. The grievance of the applicant is that in spite of the interim order, the construction of shed is extended over the fourth floor and is being used for restaurant and other purposes. 5. Mr. Patel for the aforesaid Power of Attorney holder of respondent Nos.3, 4 & 5 submitted that the same is by Ellora Park Pvt. Ltd., where Dr.Yogesh Patel is the Managing Director. Therefore, he described it as of his own use for running US Pizza Centre. 6. Prima facie, it appears that the aforesaid use by the Private Limited Company, which is a separate legal entity in the eye of law, is contrary to the injunction granted by this Court. Prima facie, it also appears from the photograph that though the space is available for parking and permission is granted for construction of parking, the vehicles are being parked on the road resulting into blockage of the entry for the members of the Society. 7. I would have considered the matter for issuing appropriate SCA/126/2003 5/21 JUDGMENT directions for prohibiting the unauthorised use in contravention to the order passed by this Court and use in a manner adversely affecting to various members of the applicant Housing Society. However, Mr. Patel, learned counsel appearing for the respondents prayed that the two days time may be given for taking instructions in response to the prima facie observations of this Hon'ble Court. 8. Hence, S.O. to 27th February, 2008. If the appropriate declaration is not made on behalf of respondents Nos. 3, 4 and 5, appropriate orders including coercive order may be passed.” 2. Today, when the matter is further taken up for hearing, Mr. Patel, learned advocate, declared before the Court that his client is not in a position to make appropriate declaration for discontinuation of the premises for commercial purpose because, as per his client, he has taken loan from State Bank of India on 22.06.2004 of Rs.64 Lakhs on the Scheme of Rent Plus Sanction of Loan and he has to pay regular EMIs to the Bank. He also submitted that the Lease Deed has been entered into between the petitioner and one Ellorapark Hospitals Pvt. Ltd., Baroda, whereby an area of 4000 sq. ft. is given on lease. Therefore, he submitted that it is not possible for his client to declare discontinuation of the use of the premises for commercial or restaurant purpose. 3. It deserves to be recorded that Ellorapark Hospitals Pvt. Ltd. as per the declaration made earlier, and recorded in the order dated 25.02.2008, is a Company where the client of Mr. Patel, viz. Dr. Yogesh Patel is the Managing Director. SCA/126/2003 6/21 JUDGMENT 4. I have also heard Ms. Jhaveri for the applicant and orig. petitioner and Mr.Shukla appears for respondent No.1, Mr. Desai for respondent No.2 and Mr. Patel for respondent Nos. 3,4 & 5 represented through respondent No.6 on the further aspects of the case including for passing further order. 5. The following aspects transpire: i) The petitioner is a registered Cooperative Housing Society for residential purposes. ii)The whole land of the Society vests to the Society and as per the bylaws and the use is to be made for residential purpose and the Society has alloted the land of each plot to all members, on lease agreement. iii)The present plot Nos. 1 & 2, were originally held by respondents Nos. 3,4 & 5 and they were members of the petitioner Society. iv)The respondents Nos. 3,4, & 5 appear to have obtained permission of Corporation for construction and the grievance of the petitioner Society is that the Society has neither permitted or issued No Objection Certificate nor has countersigned the plan for construction. v) The respondent No.6 together with his wife and son without prior permission or No Objection Certificate of the Society, has got the Sale Deed executed in their favour through respondent Nos.3, 4 & SCA/126/2003 7/21 JUDGMENT 5. vi)The aforesaid purchase of the property by respondent No.6 and others from respondents Nos. 3,4, & 5 without prior permission or No Objection Certificate of the Society is ex facie an action prohibited by law because the property vests to the Society and the respondents Nos.3,4, & 5 were holding the property as Lessee and not as owner of the property and Society was and is the owner of the property. Therefore, unless permission granted or No Objection Certificate is issued by the Society, neither members, i.e. respondents Nos.3,4 & 5 could sell the property nor respondent No.6 and others could purchase the property. The aforesaid transaction of sale and purchase is not only behind the back of the petitioner Society, but is conferring no right in the property. vii)Since the property was purchased behind the back of the Society and without prior permission or No Objection Certificate of the Society, uptil now, the respondent No.6 and others who are claiming as purchasers of the property, are neither admitted as member by the Society nor any No Objection Certificate or permission has been granted by the Society or the General Board for utilisation of the property for commercial purpose. viii) Therefore, in view of the SCA/126/2003 8/21 JUDGMENT aforesaid, it can prima facie be said that the respondent No.6 and others, i.e. his wife and son, in collusion with respondents Nos. 3,4 & 5, have openly defied the provisions of Gujarat Cooperative Societies Act read with Rules and the bylaws of the Society read with the provisions of Transfer of Properties Act. ix)As the respondent No.6 wanted to make further construction, the petitioner Society, had to file the Suit being Lavad Case No.1158/02 before the learned Nominee and the interim injunction was prayed restraining the further non- residential construction of shops, offices, etc. and also for restraining the transfer of the property and to make use in contravention to the bylaws without prior permission. The learned Nominee declined the interim injunction. The matter was carried before the Tribunal in Revision No.426/02 and below application for temporary injunction, the Tribunal rejected the Stay Application on 31.12.2002 and the petition is sworn before this Court on 08.01.2003. x) As the respondent No.6 was appearing by caveat, affidavit-in-reply was filed. In the said affidavit-in- reply, at para 12, on internal page 6 of the affidavit-in- reply, it has been inter alia stated as under: “I state that after obtaining the permission from the Corporation, the SCA/126/2003 9/21 JUDGMENT old structure had been demolished and as per the permission new construction had been also started and is about to be finished” xi)The aforesaid clearly shows that on the date when the affidavit was sworn on 13.01.2003 and the petition was pending before this Court, neither the construction was completed nor was transferred or alienated or any third party was inducted. xii)It appears that on one reason or another, the matter could not be heard further and on 09.01.2006, the petition was admitted and interim relief was granted in terms of para 6(B) restraining the respondent No.3 from transferring, assigning, alienating, selling Plot Nos. 1 & 2 of the petitioner Society to any other person. xiii)Pending the petition, as per the Society, the respondent No.6 proceeded for further extension of the shed on fourth floor and the same necessitated the applicant to file the present Civil Application No. 6806/07 with the prayer inter alia to restrain the respondents Nos. 3 to 6 from further construction and to restrain the respondents Nos. 3 to 6 acting contrary to the rules, regulations and bylaws of the applicant Society and its purpose. It is also prayed that appropriate orders to protect effectively the interests of the applicant including one to take action against them for breach of the orders of the Court under Rule 2A of order 39 of the Code, be issued. 6. The aforesaid goes to show that it SCA/126/2003 10/21 JUDGMENT is not an ordinary case of use of the premises by a member of the Society from residential to commercial or residential-cum-commercial. But it is a case where a third party who is described as a Doctor who can be said as an educated person, in open defiance to the provisions of the law, has purchased the property of the Society from a member without permission or No Objection Certificate of the Society. Therefore, prima facie, it is a case by a third party, who has no lawful right in the property, has only made construction dehors the bylaws and the residential use of the Society, but also made use of the construction for commercial purpose. The important aspect is that the completion of construction and such use are pending the petition. The degree of breach of law would defer in a case where the person is a member of the Society and is making use for residential purpose as against a person who has illegally purchased the property in open defiance to the law and further uses the property for commercial purpose in further open defiance to the law. It can hardly be disputed that when the residential Cooperative Housing Society is constructed, unless it is expressly permitted by the Society or by the competent authority, the premises cannot be used for commercial purpose or unless the bylaws are held to be inoperative. Therefore, it appears to the Court that the respondent No.6 has no respect whatsoever for law and has conducted himself in open defiance to the law and that too to the extent of buying the property of the Society without permission of the Society and of making construction and using the same for commercial purpose without prior permission of the Society at all. Therefore, it can be said that the conduct of the petitioner is such that not only he has no respect for law, but he has pocketed the law, as if he can SCA/126/2003 11/21 JUDGMENT ride on the law as per his own desire whatsoever. He has further conducted himself to Court proceedings as if a jolly ride. 7. The use from the photograph which are produced shows that it is a full fledge commercial complex constructed, where at the basement, though is meant for parking, the vehicles are parked outside the building. At the ground floor, one HSBC Bank is located and at the first floor also, as declared by Mr. Patel, the said Bank is there. At the second and third floor, there appears to be the Doctor Kalpana Patel's clinic and office of Bajaj Allianz and US Pizza at the top floor. 8. So far as the other occupants, the matter shall be considered at a later stage, however, the clinic of Doctor Kalpana Patel, who is wife of respondent No.6 and one of the person who has purchased the property with respondent No.6, cannot be said as totally ignorant of the litigation. Further, as declared and recorded on 25.02.2008, US Pizza is run by Ellorapark Hospitals Pvt. Ltd. where respondent No.6 himself is the Managing Director. 9. Therefore, it appears to the Court that it is not simply a case of causing nuisance to the other members of the Society by using the premises for commercial purpose by the Member of Society, but is a case of using the premises for commercial purpose by a person who himself has been inducted without due process of law and he has an audacity of using the premises for commercial purpose irrespective of law or irrespective of the prohibition as provided under the bylaws read with the provisions of the Cooperative Societies Act and the Rules which in any case were and are binding to his predecessor in title. Therefore, respondent No.6 and SCA/126/2003 12/21 JUDGMENT the other purchasers cannot run away from the obligation created upon the predecessor in title under any circumstances. 10. Therefore, in view of the aforesaid, with a view to enforce the law and to set an example of dealing with a litigant who has not only no respect for law, but who has openly defied the law and has attempted to ride on law as per his choice, it appears to the Court that if appropriate orders are not passed, it would be a mockery and people would loose faith and sanctity of law. A stern action is required which will be considered at the later stage after hearing the State Government or the other authorities against such persons, but before such action is ordered, at least, it is a case where by interim injunction, the commercial use of the property is required to be discontinued. As the other occupants, are uptil now not impleaded as party and even if this Court is to order discontinuation of the commercial activities in the property in question, the appropriate directions may also be required, to enable them to recover the amount for the loss if any from the respondent No.6 and therefore, they will be required to be impleaded as party. However, the property which is used by respondent No.6, either himself or in the capacity as Managing Director of Ellora Park Hospitals Pvt. Ltd. for running U.S. Pizza has got to be stopped for commercial purpose for running restaurant in a residential housing society, with immediate effect. 11. Hence the following order: 1) The petitioner-applicant shall join all remaining occupants of the premises as party respondents. Additionally, the Collector, Vadodara District, SCA/126/2003 13/21 JUDGMENT shall also be impleaded as party respondent. 2) Office shall issue Notice to all such parties, returnable on 19th March, 2008. 3) By ad interim order, it is directed as under: (a)The respondent No.6 in his capacity as the owner and Power of Attorney or Managing Director of Ellorapark Hospitals Pvt. Ltd. is restrained from using the premises at the third and fourth floor for running restaurant under the name and style of US Pizza. (b)The District Collector, Vadodara, shall ensure that the aforesaid direction is complied with immediately and he shall apply seal, if the use is not discontinued forthwith. The report shall be submitted by the District Collector on the next returnable date. (c)Vadodara Municipal Corporation, respondent No.2, shall produce the original plan and shall get the verification of the basement of the premises to see as to whether the same is used for parking purpose or not. If the basement of the premises is used for the purpose other than parking, the seal shall be applied by the respondent No.2 Corporation forthwith within 48 hours from the receipt of the order of this Court and the report shall be made to this on the next SCA/126/2003 14/21 JUDGMENT returnable date. (d)Parking of any vehicles outside the premises shall remain completely prohibited until further orders. The District Collector through Commissioner of Police, Vadodara, shall ensure that there is compliance to the present order and in case of any breach, appropriate action shall also be taken. The compliance of the aforesaid direction shall also be reported on the next date. (e)The newly added respondents who are remaining occupants of the premises shall show cause as to why the order should not be passed for complete discontinuation of the commercial use of the premises until it is so permitted or condoned by the petitioner Society. (f)The State of Gujarat through the Registrar, Cooperative Societies shall also report to this Court as to what steps he proposes to take against respondent No.6 as well as respondents Nos. 3, 4 and 5. 12. Mr. Patel, learned counsel appearing for the respondents Nos. 3 to 6 at this prayed that operation of this order may be stayed to approach before the higher forum. 13. Considering the facts and circumstances that the respondent No.6 has openly defied the law and has attempted to ride on law as per his own convenience and in view of the prima facie findings, the said request is declined. SCA/126/2003 15/21 JUDGMENT D.S. permitted.” 5. Thereafter, a Letters Patent Appeal No.276 of 2008 was preferred by respondent no.6 before the Division Bench of this court against the order passed in Civil Application No.6806 of 2007 and the Division Bench of this court (Coram: Y.R. Meena, C.J. and B.N. Mehta, J.) passed the following order:- “xxx xxx xxx Considering the submissions and the fact that the petition is still pending before the learned Single Judge, we deem it proper to continue with the directions of the learned Single Judge. Mr. Thakor, learned Senior Counsel assures that the appellant will not run the restaurant hereafter, and will use the basement only for parking. Considering the facts and assurance given by Mr. Thakor, when the petition is pending, we do not want to go into the merits of the issue raised. However, we make it clear that till a final decision is taken by the learned Single Judge on the petition, the appellant herein shall not run the restaurant or any hotel in that premises. Similarly, the basement of the premises which is meant for parking should only be used for parking of the vehicles and not for any other purpose. If the appellant violates these directions, that part of the premises should be sealed by the Corporation immediately. With the aforesaid directions, the appeal stands dismissed. xxx xxx xxx” SCA/126/2003 16/21 JUDGMENT 6. It appears that one of the party to the proceedings namely, HSBC Bank, apprehending that the Corporation may demolish the construction, preferred Civil Application No.3214 of 2008 in Civil Application No.6806 of 2007 for clarification of the order. In the said Civil Application, on 14th March, 2008, this court passed the following order:- “Notice returnable on 19.03.2008. To be heard with Civil Application No.6806 of 2007 on 19.03.2008. By ad- interim order it is clarified that this Court vide order dated 27.02.2008 has not directed for demolition of the property and therefore, no demolition shall be effected. The Corporation shall prepare the detailed sketch of the plan approved, and the actual construction available at site, so as to identify the lawful construction, and the construction made without authority. Direct service is permitted.” 7. The report has been submitted by the learned advocate for the Corporation, as directed by this court in the order dated 19th March, 2008, together with the approved plan and the same shows the unauthorised occupation over the parking area admeasuring 10.0 x 6.95 mtr. It has been further stated on behalf of the Corporation that since it has come to the notice of the Corporation that the construction or the use is in contravention to the sanctioned plan and BU permission, the notices are also issued under the Bombay Provincial Municipal SCA/126/2003 17/21 JUDGMENT Corporation Act for further action of removal of such construction or discontinuation thereof. 8. The learned counsel for the petitioner who is plaintiff in the suit as well as the learned counsel for the contesting respondents namely, respondents no.3 to 6 who are the original defendants in the suit proceedings, pray that the suit may be directed to be disposed of within some time limit and the position, as prevailing now, may be continued subject to the discontinuation of the use for office purpose by the Bank over the area which is reserved for parking on the ground floor as per the approved plan. 9. Mr. Naik, learned counsel for contesting respondent no.6 further submitted that the respondent no.6 may be permitted to move the Corporation for modification of the parking area in the