1 WP No.2682/10 mpt IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE WRIT PETITION NO.2682 of 2010 Prathamesh Galaxy CHS and ors. ... Petitioners versus Sai Lee Developers and ors. ... Respondents ... Mr. M.M.Vashi i/b M/s.M.P.Vashi & Associates for the petitioners. Mr.Rohit N. Shetty for respondent nos.1 to 4. CORAM : D.G. KARNIK, J. DATED : 30th July 2010 P.C. 1. Rule, returnable forthwith. Mr.Shetty waives service for the respondent. By consent, taken up for hearing forthwith. 2. By this petition, petitioner challenges the order dated 26 February 2010 passed by the learned Judge, City Civil Court, Mumbai rejecting the petitioner’s application for withdrawal of the suit with liberty to file fresh suit regarding the same subject matter. By various agreements, respondent no.1, as a developer and promoter agreed to sell to various persons shops and/or flats in his proposed scheme at Powai. According to the petitioners, despite they had paid substantial money, the respondent no.1 committed a breach of the agreement and did not hand 2 WP No.2682/10 over the possession. The flat purchasers therefore came together and formed an association. A suit was filed in the name of the association for relief of specific performance of the agreement (performance of statutory obligation under Maharashtra Ownership Flats Act) and various other reliefs. According to the petitioners, the association which was unregistered when the suit was filed has since been registered as a society under Societies Registration Act as well as Public Trust. Noticing the formal defect that a suit by an unregistered association having about 150 members being not maintainable an application was made for withdrawal of the suit with liberty to file fresh suit on the subject matter. Application was resisted by the respondents and was dismissed by the trial court. Aggrieved petitioners are before this Court. 3. It may be noted that the suit was filed in the name of the association which was an unregistered association. The suit was not filed under Order 1 Rule 8 of the Code of Civil Procedure and prima facie the suit was not maintainable. In fact, respondent had made an application in the trial court for rejection of the plaint inter alia on the ground that suit was not maintainable. Though the learned Judge in paragraph no.7 of the order has noted that the respondents had stated that the respondents had not pressed the application under Order 7 Rule 11 of the Code of Civil Procedure, at the hearing of the petition, Mr.Shetty learned counsel for the respondents submitted that the suit was not maintainable inasmuch as the association was not registered on the date of the filing of the suit. This shows that the contention about non maintainability of the suit has not been given up. 3 WP No.2682/10 4. Since prima facie the suit is not maintainable, on a technical ground of the suit having been filed in the name of an association which was not registered, the trial Judge ought to have granted the permission for withdrawal of the suit with liberty as prayed. 5. In my view, there are also other grounds for allowing the withdrawal. It appears that subsequent to the filing of the suit by various agreements, development rights appear to have been transferred by the respondents to M/s.Great Deal Developers Pvt.Ltd and M/s.Zoom Trade & Realty Limited. These facts have been mentioned in Ground Nos.(c) and (f) in the application for permission for withdrawal. In paragraph nos.9 and 10 of the affidavit in reply filed in the trial court, respondents have admitted transfer of development rights. In paragraph no.13 of the affidavit in reply they have also admitted that a suit has been filed by M/s.Great Deal Developers Pvt.Ltd in which an injunction has been granted by this court relating to the said property. In paragraph no.14 of the affidavit in reply before the trial court, they have admitted that M/s.Zoom Trade & Realty Limited have initiated proceedings u/s.9 of the Arbitration Act. Thus, it appears that by a maze of transactions, either before the suit or during the pendency of the suit, some third party rights have been created. The petitioner has prayed that it would be necessary for the petitioner to file separate suit by joining all these persons as parties because otherwise even if he obtains any relief that may be infructuous. Taking this into consideration, in my view, the trial court ought to have allowed the application for withdrawal of the suit with liberty as prayed. For these reasons, the petition is allowed. Impugned order is set aside and petitioner’s application for withdrawal of the suit with liberty to file 4 WP No.2682/10 fresh suit on the same subject matter is granted subject to the payment of costs of Rs.5,000/- as condition precedent. Petitioner shall deposit costs of Rs.5,000/- in the trial court before filing of the fresh suit. 6. Rule made absolute to the extent indicated above. Request of the respondent to stay the operation of the order is rejected. (D.G. KARNIK,J.)