1 wp-4597-11.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION srk WRIT PETITION NO.4597 OF 2011 Kanakia Spaces Pvt. Ltd. .. Petitioner V/s. Eternity Co-operative Housing Society Ltd. & Ors. .. Respondents. Mr. Virag Tuljapurkr, senior advocate, Mr. Sunil Purohit & Mr. Gaurav Gopal i/b Wadia Gandhi & Co. for the Petitioner. Mr. R.S.Datar for Respondent nos.1 to 3. Mr. Mandar Limaye for Respondent no.5. CORAM : K.K.TATED, J. RESERVED ON : 28TH JULY, 2011. PRONOUNCED ON:12TH AUGUST, 2011. P.C. 1 Heard the learned counsel for the parties. 2 Rule. 3 By consent, rule made returnable forthwith. 4 Matter is taken on board for final hearing at the stage of admission. 2 wp-4597-11.doc 5 By this Petition under Articles 226 and 227 of the Constitution of India, Petitioner – original Defendant no.1 challenges the order dated 10th May, 2011 passed by the learned District Judge-5, Thane, rejecting Petitioner’s Miscellaneous Civil Appeal no. 23 of 2011 arising out of the order dated 31st January, 2011 passed by the learned 8th Joint Civil Judge Senior Division, Thane, allowing interim Application (Exhibit 5) of Respondent nos.1 to 3 for injunction restraining Petitioner from constructing the building over the suit property as building no.“B”. 6 A few facts of the matter are as under: In this Petition, the Petitioner is original Defendant no.1, Respondent nos. 1 to 3 are original Plaintiff no.1, 2 and 3 respectively, Respondent no.4 is original Defendant no.2 and Respondent no.3 is original Defendant no.3. The Respondent no.4 by the agreement dated 8th August, 2002 agreed to grant to the Petitioner and one Cineline Entertainment (India) Pvt. Ltd. the development rights in respect of the property situated at Thane ad- measuring 50,581.68 square meters or thereabout comprising of Survey Nos. 83/1(pt), 49(pt), 47/2(pt), 47/1, 46/12, 46/8, 48/1, 146(pt), 46/1, 46/9, 46/10 and 46 situate in village Naupada, save and except a portion of the said property ad-measuring 3,539 square meters which the Respondent 3 wp-4597-11.doc no.4 retained for his own use and occupation and possession. Thereafter, the Petitioner made an Application to the Municipal Corporation for development of the said property and submitted plans to that effect. The Municipal Corporation by and under its sanction for Development/Permission Certificate bearing Vikas Prastav No. 86148/TMC/TDD 3720 dated 27th February, 2003 permitted use of the entire said property for residential/commercial purpose and granted approval for construction of the following structures on the said property in the manner and on the terms and conditions stated therein: a) Multiplex Theatre (cum shopping mall); b) Commercial Building; c) Residential Buildings No. B,C,D,E,F, G and H; and d) Row Houses 1-19. 7 As per the layout plan duly sanctioned by the Municipal Corporation bearing Vikas Prastav No.86148/TMC/TDD dated 27th February, 2003 the available/ permissible floor place in respect of the said property is 35,112.30 square meters. On the basis of the said sanction plans the Petitioner started development of the said property. The Petitioner undertook the development of the said property in a phase manner and has constructed number of buildings in the said property from time to time in 4 wp-4597-11.doc accordance with the plans and permission sanctioned by the Thane Municipal Corporation. 8 Initially, the Petitioner constructed building nos. D, E and F and obtained occupation certificate dated 11th October, 2005 for those buildings. Thereafter, the Petitioner carried out construction in respect of Buildings nos.C and D and obtained occupancy certificate dated 7th June, 2006. In similar way the Petitioner obtained occupancy certificate in respect of Building H dated 23rd October, 2009. In the meanwhile, the Petitioner entered into agreement for sale with the various purchasers including Respondent nos. 2 and 3. 9 Respondent nos. 1 to 3 filed Regular Civil Suit No.575 of 2010 in the court of Civil Judge Junior Division, Thane for declaration that residual FSI as was in existence after last disclosed layout i.e. Occupancy certificate plan dated 23rd October, 2009 and particularly of an area of 952.189 square meters and or such other area vest with them under the Maharashtra Ownership of Flats (Regulation of the Permission of Construction, Sale Managerment and Transfer) Act, 1963 (herein after referred to as “MOFA”). In the said suit they prayed following reliefs: “a) It be held, declared and decreed that residual FSI as was in existence after lastly disclosed layout i.e. occupation 5 wp-4597-11.doc Certificate plan dated 23.10.2009 and particularly of an area of 952.189 sq. meters and/or of such other area, vest with the Plaintiff No.1 society under MOFA. b) It be held, declared and decreed that Plaintiff No.1 is entitled to have conveyance of proportionate land/area which would commensurate the FSI consumed in construction of all the buildings erected on suit property; c) The Defendant No.1 and 2 be ordered and decreed to execute a Deed of Conveyance in favour of Plaintiff No.1 society of suit property ad-measuring 36735.37 sq. meters or of additional ground area out of said larger property so as to commensurate the ground area of land to the potentiality of consumed FSI together with building i.e. C, D, E, F, G, H, club house and/or such other structures, recreational areas, common areas and facilities, internal open spaces, pathways, access roads etc. alongwith all other amenities and facilities. d) It be held, declared and decreed that the approval to the suit approved plan vide V.P. no.86/148/TMC/TDD 3720 dated 19.11.2009 be declared as contrary to MOFA/Circular issued by Government regarding no objection of society, illegal and in violation and breach of the Development Control Rules and Regulations of the Municipal Corporation for the City of Thane. 6 wp-4597-11.doc e) The Defendant No.3 and/or their respective officers, representatives, assignees and/or anybody in-charge of them be directed as and by way of mandatory injunction of this Hon’ble Court to revoke and/or cancel the suit approved plan vide V.P. no. 86/148/TMC/TDD 3720 dated 19.11.2009. f) The Defendant No.1 and or their agents, representatives, assignees and or anybody claiming through or under them be restrained as and by way of perpetual injunction of this Hon’ble Court from carrying out the work of construction of the suit building upon the suit property and from selling, transferring, alienating in any manner the premises situate therein and/or parting with possession thereof to any third party and/or creating any third party interest in any manner whatsoever in respect thereof. g) The Defendant No.3 and/or their respective officers representatives, assignees and/or anybody in-charge of them be directed to as and by way of mandatory injunction of this Hon’ble Court to stop the work of construction carried out by the Defendant No.1 upon suit property pursuant to suit approved plan. h) The Defendant No.3 and/or their respective officers representatives, assignees and/or anybody in-charge of them be directed to as and by way of mandatory injunction of this Hon’ble Court to demolish the work of 7 wp-4597-11.doc construction of suit building carried out by the Defendant No.1 upon the suit property; i) that interim and ad-interim ex-parte reliefs in terms of prayer (f) and (g) be granted; j) that the cost of this suit be provided for; and k) for such other and further reliefs as in the nature and circumstances of the case, this Hon’ble Court may deem fit to grant in favour of the Plaintiffs.” 10 In the said suit, Respondent nos. 1 to 3 preferred Application for temporary injunction under Order 39 Rule 1 and 2 read with section 151 of the Civil Procedure Code, 1908, on 1st September, 2010 restraining the Petitioner from carrying out the work of construction of the building “B” till the hearing and final disposal of the Regular Civil Suit No. 575 of 2010 and other reliefs against Respondent nos. 4 and 5. In the said interim application they prayed following reliefs: “a) Pending the hearing and final disposal of suit the Defendant No.1 and or their agents, representatives, assignees and or anybody claiming through or under them be restrained as and by way of temporary injunction of this Hon’ble Court from carrying out the work of construction of the suit building upon the suit 8 wp-4597-11.doc property and from selling, transferring, alienating in any manner the premises situate therein and/or parting with possession thereof to any third party and/or creating any third party interest in any manner whatsoever in respect thereof. b) Pending the hearing and final disposal of suit the Defendant No.3 and/or their respective officers representatives, assignees and/or anybody in-charge of them be directed to as and by way of interim injunction of this Hon’ble Court to stop the work of construction carried out by the Defendant No.1 upon suit property pursuant to the suit property. c) that interim and ad-interim ex-parte reliefs in terms of prayer (a) and (b) be granted; d) that the cost of this application be provided for; and e) for such other and further reliefs as in the nature and circumstances of the case, this Hon’ble Court may deem fit to grant in favour of the Plaintiffs.” 11 In the said Application below Exhibit 5, the Petitioner filed their reply and opposed the same. They also filed their written statement dated 14th October, 2010. The Respondent no.5 also filed their written statement and opposed the injunction application preferred by Respondent nos. 1 to 3. The learned 8th Joint Civil Judge Senior Division, Thane by order dated 31st 9 wp-4597-11.doc January, 2011 allowed Respondent nos. 1 to 3’s interim application (Exhibit-5) restraining the Petitioner from carrying out construction of building “B” as per map dated 19th November, 2009 or any other construction over the suit property till the decision of the suit. The operative part of the said order dated 31st January, 2011 reads thus: “The operation to the order passed below Exh.5 passed on dated 31/01/2011 is stayed for the period of two weeks only from today. Lateron Ld. Counsel for defendant No.1 submitted that yet certified copy of the order is not received by him. The order is already dictated and it is under typing. On tomorrow, the parties would get its certified copy, if they apply as per rule.” 12 Being aggrieved by the said order dated 31st January, 2011 the Petitioner - original Defendant no.1 preferred Miscellaneous Civil Appeal No.23 of 2011 in the court of District Judge-5 at Thane. The said Miscellaneous Civil Appeal was dismissed by the District Judge-5, Thane on 10th May, 2011 and therefore, the present petition. 13 The learned senior counsel appearing on behalf of Petitioner – original Defendant no.1 submits that the impugned orders passed by both the courts below are against justice, equity and good conscience and same are liable to be set aside. He submits that the lower Appellate Court failed 10 wp-4597-11.doc to exercise jurisdiction vested in it by examining the facts at prima facie stage and applying the provisions of MOFA thereto ascertain whether there was any breach by the Petitioner of the provisions of MOFA or agreement for sale of Flat with Respondent nos. 2 and 3. He submits that as per sanction plan dated 23rd May, 2003 being Vikas Prastav No. 86148, they started development of the said property in a phase manner and has constructed number of buildings in the said property from time to time in accordance with the plans and permissions sanctioned by the Thane Municipal Corporation. He submits that as and when the construction of buildings were completed and ready for occupation, they applied for occupancy certificate and obtained the same in respect of the building nos. D, E and F. They obtained occupancy certificate dated 11th October, 2005, in respect of buildings nos. C and G occupancy certificate dated 7th June, 2006 and in respect of Building No. H occupancy certificate dated 23rd October, 2009. He submits that at the time of applying for occupation certificate, they have to annexe a copy of plan showing in respect of which building they are applying for occupation certificate. Whenever, they applied for occupation certificate, they annexed the plan of those buildings for which they wanted occupation certificate. 14 He further submits that in their agreement for sale of flats with Respondent nos. 2 and 3, they disclosed all the material facts in that 11 wp-4597-11.doc agreement. He submits that they specifically disclosed in the agreement for sale with Respondent nos. 2 and 3 and other purchasers that the Petitioner is going to develop the entire property as per sanction plan and the commencement certificate bearing Vikas Prastav No.86148/TMC/TDD/613 dated 23rd May, 2003, the approved plans from Thane Municipal Corporation. He further submits that in the agreement for sale, they specifically made it clear to the purchasers that the entire project on the said property, when developer will execute the conveyance in favour of society and other details. The learned senior counsel particularly relies on following clauses of the agreement for sale to show that they disclosed to the purchasers about the entire development of the said property and that also as per sanctioned plans from Thane Municipal Corporation. He relies on following clauses of the said agreement: (ix) Subsequent to the said Agreement dated 8th August, 2002, the layout plan in respect of the said Land submitted jointly by the Original Owner and the Developers has been duly approved by the Thane Municipal Corporation. (xiii) Subsequent to the said Agreement dated 8th August, 2002, the following sanctions/approvals in respect of the said Land have been obtained:- 12 wp-4597-11.doc a) By and under its letter dated 24th October, 2002, the Directorate of Industries has conveyed its no objection for change of user of the said Land from industrial to residential/commercial user, subject to the approval of the Thane Municipal Corporation. b) By and under the Letter of Intent bearing No.ULC/TA/Sec.22/S.R.-312 dated 8th November, 2002 issued by the Office of the Additional Collector and Competent Authority, Thane under the provisions of the ULC Act, permission has been granted by the ULC authorities for redevelopment of the said Land, subject to the terms and conditions as provided therein. c) By and under its sanction for development/Permission Certificate bearing V.P. No.86/148 TMC/TDD 3720 dated 27th February, 2003, the Thane Municipal Corporation has permitted use of the entire said Land for residential/commercial purpose and has granted its approval for construction of the following buildings/structures on the said Land. (1) Multiplex Theatre (cum Shopping Mall) – Ground + 3 floors. (2) Building Nos. B,D, E, F and H – Stilt + 7 floors. (3) Building Nos. C and G – Stilt + 14 floors. (4) Row Houses – Ground + 2 floors (5) Commercial Building to be constructed by Kanakia for and on behalf of the Original Owner – Ground+ 4 floors. 13 wp-4597-11.doc (xxiv) By and under the Commencement Certificate bearing no.86/148/TMC/TDD/613 dated 23/5/03, the Thane Municipal Corporation has granted its approval for commencement of construction of 7 buildings bearing nos. B – H and Row Houses on the said Land. (xxviii)Kanakia has given inspection of the following documents to the Purchaser which the Purchaser has perused and the Purchaser has express notice of the contents thereof including the terms and conditions and the covenants contained therein: (a) Copies of the Indentures of Conveyance dated August 11, 1969 and February 25, 1970 respectively; (b) A copy of the Order dated January 10, 1986 passed by the Joint Director of Industries and Competent Authority under section 20(1) (a) of the ULC Act. (c) A copy of the Letter of Intent bearing No.ULC/TA/Sec. 22/S.R.-312 dated 8th November, 2002 issued by the Office of the Assistant Collector and Competent Authority, Thane under the provisions of the ULC Act; (d) The lay-out plans sanctioned by the Thane Municipal Corporation is in respect of the said Land; e) The building plans duly sanctioned by the Thane Municipal Corporation. 14 wp-4597-11.doc f) A copy of the sanction for development/Permission Certificate bearing V.P. No.86/148 TMC/TDD/3720 dated 27th February, 2003 obtained from the Thane Municipal Corporation. g) A copy of the Commencement Certificate bearing No.VP No.86/148 TMC/TDD/613 dated 23rd May, 2003 obtained from the Thane Municipal Corporation. h) A copy of the Agreement dated 8th August, 2002 entered into between the Original Owners and the Developers; i) A copy of the Development Agreement dated 28th March, 2003 entered into between the Original Owner and the Developers; j) A copy of the Power of Attorney dated 28th March, 2003 granted by the Original Owner to the Developers. k) A copy of the Inter se Agreement dated 27th May, 2003 entered into between Kanakia and Cineline; l) Copies of Property Register Cards in respect of the said Land, which continue to stand in the name of the Original Owner; m) Certificate of Title dated 24th June, 2003 issued by Wadia Ghandy & Co., Advocates & Solicitors, certifying the title of the Original Owner to the said Land as clear, 15 wp-4597-11.doc marketable and free from encumbrances except as specifically provided therein. (xxix) Kanakia has also supplied to the Purchaser such documents as are mentioned in the MOFA and the Rules made thereunder and as demanded by the Purchaser. 1 Kankia will construct a residential complex known as “ETERNITY” comprising of Nine buildings/Wings and Row houses on a portion of the said Land situate at Village Navpada, Thane and more particularly described in the Third Schedule hereunder written, being the area to be developed by Kanakia. 2 Kanakia shall construct the proposed buildings/Wings on the area to be developed by Kanakia in accordance with: (i) The Order dated January 10, 1986 passed by the Joint Director of Industries and Competent Authority under section 20 (1)(a) of the ULC Act. (ii) The Letter of Intent bearing No. ULC/TA/Sec.22/S.R.-312 dated 8th November, 2002 issued by the Office of the Assistant Collector and Competent Authority, Thane under the provisions of the ULC Act; (iii) The lay-out plans sanctioned by the Thane Municipal Corporation in respect of the said Land; (iv) The building plans duly sanctioned by the Thane Municipal Corporation; 16 wp-4597-11.doc (v) The sanction for development/Permission Certificate bearing V.P. No.86/148 dated 27th February, 2003 obtained from the Thane Municipal Corporation (hereto annexed and marked as Annexure “B”) (vi) The Commencement Certificate bearing V.P. No.86/148/TMC/TDD/613 dated 23/5/03, obtained from the Thane Municipal Corporation (hereto annexed and marked as Annexure “C”) (vii) The Agreement dated 8th August, 2002 entered into between the Original Owners and the Developers. (viii) The Development Agreement dated 28th March, 2003. (ix) The inter se Agreement dated 25th May, 2003 entered into between Kanakia and Cineline; 6 Kanakia has informed the Purchaser and the Purchaser is aware that Kanakia proposes to develop the area by carrying out construction thereon of Nine residential buildings and Row Houses as shown in the layout plan. The development work will be carried out by Kanakia in a phased manner as per the phased development programme to be determined by Kanakia in its absolute discretion from time to time. Pursuant to the said layout plan and the approved plan in respect thereof, Kanakia has commenced construction of the 7 buildings and the Row Houses on the said Land. Kanakia may as required by the concerned authorities and/or in its (i.e. Kanakia’s) absolute discretion from 17 wp-4597-11.doc time to time vary, amend and/or alter the lay out plan in respect of the said Land or a portion or portions thereof as also the Building plans in respect of one or more such Buildings/Row Houses to be constructed/being constructed on the said Land. As part of such variation amendment and/or alteration in the lay-out plan and/or in the Building Plans Kanakia may also construct additional wings, additional floors and/or any other additional construction in respect of the said building/s now under construction or the buildings to be constructed hereinafter and Kanakia may also construct additional structures on the said Land as may be permitted by the concerned authorities. The Purchaser hereby irrevocably agrees and gives his/her/their consent to Kanakia for carrying out amendments, alterations, modifications, and/or variations to the layout plan in respect of the said Land or the building plans and for constructing independent additional structures, additional floors or buildings on the said Land as aforesaid. It is however, agreed by Kanakia that Kanakia shall inform the Purchaser in respect of any variation of modification in the Building plans which may adversely affect the said Premises agreed to be purchased by the Purchaser as specified hereinabove. The Purchaser hereby also gives his irrevocable consent to Kanakia developing the said Land in such phased manner as Kanakia may determine even after Kanakia has given to the Purchaser possession of 18 wp-4597-11.doc the said Premises agreed to be sold to the Purchaser. The Purchaser hereby agrees to give all the facilities and assistance that Kanakia may require from time to time after Kanakia shall have delivered possession of the said Premises to be sold to the Purchaser but at the costs and expenses of Kanakia so as to enable Kanakia to complete the development of the said Land in the manner as may be determined by Kanakia. 20 Nothing contained in this Agreement shall be construed so as to confer upon the Purchaser any right whatsoever into over or upon the said Land or the Building in which the said Premises are situate. The Purchaser shall have no claim save and except in respect of the said Premises agreed to be sold to him/her/them. All open spaces, parking spaces, lobbies, terraces and other premises forming a part of the area to be developed by Kanakia will remain the property of Kanakia until the Conveyance/Lease in favour of a Co-operative Society is executed in the manner provided hereinafter. 23 The area to be developed by Kanakia together with all the nine buildings/Wings and the Row Houses to be constructed thereon shall be finally conveyed to a Co- operative Housing Society. The said Society shall be registered after the area to be developed by Kanakia shall have been fully developed and all the premises in the said buildings and the Row Houses shall have been sold and disposed of. The Purchaser shall become a member of the said Society (which is to be formed solely 19 wp-4597-11.doc for the purpose of the said Buildings and the Row Houses) and the Original Owner and Kanakia shall jointly execute the Conveyance in respect of the area to be developed by Kanakia with the said Buildings/Row Houses in favour of the said Co- operative Society. 24 Even after the Co-operative Society for the said Buildings/Wings Row Houses has been formed as aforesaid, the Kanakia shall have full right and authority to develop the said Land and the entire FS available on the said Land as also Additional FS that may be obtained by way of TDR and/or under the other provisions of the Development Control Regulations as aforesaid, which shall continue to be under the ownership and control of the Kanakia who shall be entitled to utilize the same for their benefit in development of the said Land and the Purchaser and/or the said Society to be formed for the said Buildings/Row Houses as aforesaid shall have no right of any nature whatsoever in respect thereof. 26 In case the Conveyance is executed in favour of the Co- operative Society before the disposal by the Kanakia of all the premises in the Buildings/Row Houses, then in such case, the Kanakia shall join in the Society as members holding such unsold Premises and as and when such premises are sold to third party at the discretion of the Kanakia, the Co-operative Society shall admit as members the Purchasers of such premises without charging any premium or any other extra payment.” 20 wp-4597-11.doc 15 He submits that both the courts below erred in coming to the conclusion that the Petitioner is constructing the building no.B which is not shown in the sanctioned plan and/or disclosed to the Respondent no.2 and 3. He submits that both the courts failed to consider that the Petitioner started construction of the entire project on the said property in