1 rpa IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY O.O.C.J. O.O.C.J. O.O.C.J. NOTICE OF MOTION NO. 4332 OF 2007 NOTICE OF MOTION NO. 4332 OF 2007 NOTICE OF MOTION NO. 4332 OF 2007 IN IN IN SUIT NO.2891 OF 2007 SUIT NO.2891 OF 2007 SUIT NO.2891 OF 2007 Mr.Kanayalal Kashiram Kasat & Ors. .. Plaintiffs V/s. Hemlata Madhusudan Thakur & Ors. .. Defendants Mr.D.A.Barot for the Plaintiffs. Mr.Sachin S.Punde for Defendant No.1. Ms.Seema Sarnaik for Defendant No.3. CORAM : ROSHAN S.DALVI, J. CORAM : ROSHAN S.DALVI, J. CORAM : ROSHAN S.DALVI, J. DATE : 11TH NOVEMBER, 2008. DATE : 11TH NOVEMBER, 2008. DATE : 11TH NOVEMBER, 2008. P.C. P.C. P.C. . The suit is for specific performance of a development agreement dated 25th February 1985. By an Agreement\Deed of Declaration dated 30th December, 1997, Defendant Nos. 1 and 2 were required to execute the Deed of Apartment or a Deed of Assignment of leasehold rights in the suit property in favour of the Plaintiff No.3. Instead Defendant No. 1 has transferred and conveyed the entire suit property to Defendant No.3 which transfer has been challenged by 2 the Plaintiffs. Defendant No.2 sought to develop the suit property which earlier had a construction consisting of ground floor, first floor and part 2nd floor. He was to utilise additional FSI to construct the remaining part of the 2nd floor and to put up further construction on the 3rd and 4th floors of the suit property and put up additional garage in the compound of the suit property. Defendant No.2 as the Developer was to construct to the extent of 2300 sq.ft. of built up area and sell the same on ownership basis under the development agreement dated 25th February, 1985. 2. As set out in clause 9 of the Development Agreement, the ground floor was occupied by one Indumati, the first floor was occupied by Abhijit, the son of Defendant No.2 and the 2nd floor was occupied by one Madhusudhan, the husband of Defendant No.1 at the time of the execution of the Development Agreement. 3. Defendant No.2 as the Developer was to pay a consideration of Rs.2,20,000/- to Defendant No.1 as the owner. Such consideration was to apportioned in cash and kind. Rs. 50,000/- was to be paid in cash and for the reminder of Rs.1,70,000/- the flat on the first 3 floor of the building tenanted to Abhijit, the son of Defendant No.2 was to be surrendered to Defendant No.1 and he was to be allotted a flat on the 3rd floor of the new construction. 4. Under clause 12 of the said agreement, the Defendant No.2 as the developer was entitled to sell the additional construction put up by him. The Defendant No.1 as the owner was to continue to be the owner of the existing ground floor premises subject to the right of the tenant Indumati. The premises on the first floor was to be occupied by Defendant No.1 as the owner. The premises on the 2nd floor was to be allotted to her husband, Madhusudhan. The premises on the 3rd floor were to be allotted to the son of Defendant No.2, the said Abhijit. 4. Under clause 13 of the said development agreement, Defendant No.1 as the owner and Defendant No.2 as the Developer were to sell the property under the Maharashtra Apartment Ownership Act, 1971 (MAOA). They were to make the necessary declaration and execute the necessary Deed of Assignment in respect of the entire building after the work of construction was completed. Defendant No.2 as the developer was 4 entitled to enter into the usual agreement for sale of apartments, in accordance with MAOA or Defendant No.1 as the owner was to execute the deed of assignment in respect of the said property in favour of the owners of the respective tenements as owner. 5. Under clause 16 of the agreement, the Defendant No.1 as the owner was to obtain permission of the MMC for submitting the property to the provisions of MAOA. If such permission was not granted, the Defendant No.1 as the owner was to obtain permission from the MMC for the assignment of the property in favour of the owners of the premises as co-owners and execute a deed of assignment in favour of all such owners as co-owners, as tenants-in-common having shares in proportion to the built up areas of their respective premises. 6. Under clause 24 of the said development agreement, Defendant No.1 as the owner was to obtain permission under section 27 of the Urban Land (Ceiling & Regulation) Act (ULC) for effecting a proper transfer of the property. Such permission was to be obtained before the execution of the Deed of Apartment or the Deed of Assignment. 5 7. Under clause 25 of the said development Agreement, Defendant No.1 as the owner was to execute the necessary declaration, and join all persons who would be interested in the suit property under the Deed of the Apartment or the Deed of Assignment. 8. Under clause 26 of the said development agreement, the transaction was to be completed within one month of the issue of the occupation certificate i.e. after the entire construction is completed and all the persons who would be the owners of the respective tenements would have been put in such occupation. The date of the occupation certificate is not known. 9. It can be seen from the reading of development agreement as a whole, that the old property consisted of ground floor, first floor and part 2nd floor and one garage. The new construction was to be on part 2nd floor, 3rd floor and 4th floor with one additional garage. The entire suit property was to be ultimately conveyed under the Deed of Apartment or a Deed of Assignment. Even a Deed of Declaration had to be executed. This would require the joining of all persons who would be interested in the property. In 6 the development agreement, the flats which were then in occupation of the tenants and which were to be otherwise dealt with were mentioned. The purport and intent of the parties was to develop the entire property as a whole and ultimately execute a deed of apartment or a deed of assignment. 10. A power of attorney also came to be executed on 14th August, 1985 by Defendant No.1 in favour of Defendant No. 2 as the Developer. 11. As late as 30th December, 1997 a Deed of Declaration came to be executed as contemplated under clause 25 of the Development Agreement. This Deed of Execution is Exhibit ‘C’ to the Plaint has been signed by Defendant No.1, the owner, one Vilas Saklunkhe and Dipti Saklunkhe and Abhijit Vartak who are the tenants and Defendant No.5 one Mamata Kasal who were the new flat purchasers. Under the said Deed of Declaration, an agreement to pay the proportionate share of the lease in respect of the said flat occupied by the said persons were set out. Even the lease rent in respect of the garage which was given with flat nos. 1 and 2 was set out. Each of the aforesaid parties were joined and have signed the deed of declaration in terms of 7 clause 25 of the Development agreement. 12. Defendant No.1 as the owner sought to convey the entire property to Defendant No.3 under the Deed of Assignment and Conveyance dated 11th June, 2002. Defendant No.1 failed to execute the Deed of Apartment or Deed of Assignment in favour of Defendant No.2 or ultimately the flat purchasers and the tenants who were joined to the Deed of Declaration. The execution of this document was unknown to the Plaintiffs or Defendant No.2. The Plaintiffs purchased the flats which were constructed upon development of the property as per the development agreement. They were to form a condominium under the MAOA. That condominium is Plaintiff No.3. Whereas the Deed of Apartment or the Deed of Assignment was not executed as contemplated under the Development Agreement, the Deed of Assignment and conveyance came to be executed in favour of the third party. Defendant No.3 thereafter purchased the tenanted flats on the ground floor and on part 2nd floor. 13. It is the Plaintiffs case that a Deed of Apartment or Deed of Assignment had to be executed under the MAOA as agreed between the parties under 8 clause 13 of the Development Agreement in respect of "the entire building" ,and Defendant No.1 as the owner was to execute the Deed of Apartment or the Deed of Assignment in favour of all the owners of the premises as co-owners under clause 16 of the said agreement. It is therefore, that Defendant No.1 was to obtain permission under MAOA, under clause 24 of the Development Agreement and execute the deed of Apartment /Assignment. That having not been done and instead a conveyance having been executed in favour of Defendant No.3, the suit has been filed. 14. The Plaintiffs came to know of the conveyance dated 11th June, 2002,, only when they received the letter of MMC dated 26th October, 2005 Exhibit ‘O’ to the Plaint. To that letter was annexed the letter dated 5th June, 2005 of Defendant No.2 requesting MMC to transfer the entire suit property in his name. 15. It is contended on behalf of Defendant No.3 that the only right of Defendant No.2 the developer was to construct part 2nd floor and 3rd and 4th floors and to sell them. The Defendant No.1 has remained the owner of the reminder of the property and hence, his ownership right could be conveyed by the Defendant No.1 9 to Defendant No.3. This contention is erroneous. The Development Agreement does not allow Defendant No.1 to continue to be the owner of any part of the suit property. Upon development of the suit property by putting up additional construction, she was required to execute the deed of apartment or the deed of assignment. She was also required to obtain the necessary permission under MAOA. She was also required to execute the deed of declaration. Ultimately, the entire property was to be assigned or transferred in favour of all the owners of the premises as co-owners as tenants-in-common including Defendant No.1 as an owner of the first floor flat. 16. Defendant No.1 could convey and transfer or assign only the property which she owned. When the Defendant No.1 would not continue to be the owner of the entire property she could not sell or convey such property to Defendant No.3. Consequently, the Plaintiffs’ challenge to the conveyance between Defendant Nos. 1 and 3 is proper. 17. It is contended that the suit is barred by the law of limitation since the Plaintiffs’ suit is for specific performance of the development agreement dated 10 25th February, 1985. 18. It is seen that the development agreement is infact entirely enforced and performed. Even the deed of declaration is executed. Pursuant to the deed of declaration the respective percentages of the taxes to be paid is also specified and paid. It is only after the execution of the deed of conveyance that these taxes have not been accepted by the MMC. The Plaintiffs cause of action, which is essentially against Defendant No.3, arose only when the Plaintiffs received the letter of the MMC on 25th June, 2005 including the letter of Defendant No.3 to the MMC for transferring the above property to his name. The suit is, therefore, essentially to challenge that transfer. Consequent upon such challenge the Plaintiffs have sought performance of the initial Development Agreement. The suit is, therefore, within limitation. Consequently, the Plaintiffs have made out a prima facie case for grant of the injunctions sought. 19. The Notice of Motion is made absolute in terms of prayer clauses ‘a’ and ‘b’. Defendant Nos. 1 and 3 shall not act upon the Deed of Conveyance and Assignment Deed dated 14th May, 2002. Defendant Nos. 11 1 and 3 shall also not transfer or create any further third party rights in respect of the suit property. (ROSHAN S.DALVI, J.) (ROSHAN S.DALVI, J.) (ROSHAN S.DALVI, J.)