1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO.4322 OF 2008 IN SUIT NO.3354 OF 2008 Subhash M. Dhanaji & Anr ..... Plaintiffs. V/s M/s Ankur Developers & Ors. ...... Defendants. Mr. Rahul Rao i/b M/s Dahibawakar & Co. for the plaintiff in support of the notice of motion. Mr. D.H. Mehta alongwith Mr. Dhawal Mehta i/b D.M. Legal for defendant No.1. Mr. R.Y. Shirsikar for defendant No.2 – BMC. Mr. R.S. Desai i/b Divya Shah Associate for defendant No.3. CORAM: V. M. KANADE, J. DATE : 28TH JULY, 2009 P.C. 1. Heard the learned Counsel appearing on behalf of the plaintiffs and the learned Counsel appearing on behalf of defendants. 2. Plaintiffs are members of 3rd defendant – Society. Plaintiffs were occupying Flat No.103 on the first floor of the said Society. Plaintiffs have filed a suit, seeking mandatory order and injunction and for direction, directing defendant No.1 to specifically perform and to forthwith comply with the 2 terms and conditions as recorded in the letter dated 22/05/2006 at Exhibit-B to the plaint and to secure necessary permission/sanction of defendant No.2 as well as defendant No.3 in favour of plaintiffs for use, occupation and possession of the suit property for commercial purpose by plaintiffs as recorded in the letter dated 22/05/2006. It is the case of plaintiffs that defendant No.1 is a real estate developer and partnership firm registered under the Indian Partnership Act, 1932. Defendant No.3 is a Housing Society registered under the Maharashtra Co-operative Societies Act. Plaintiffs are members of defendant No.3 in respect of flat admeasuring 750 + 419 (Terrace) sq.ft. (carpet area) with stilt parking of the building known as Rajdoot Khar Co-operative Housing Society Ltd. Plaintiffs normally reside at Bangalore and had treated and used the said Flat in Mumbai as a commercial establishment and had given the same on leave and license basis to various commercial establishments. Since the building was in a dilapidated condition, all members including plaintiffs decided to re-develop the property and called for quotations and bids from various builders and contractors. The Society passed a Resolution in its General 3 Body Meeting and agreed to give work of development to defendant No.1. Accordingly, plaintiffs entered into development agreement dated 21/05/2006. It is the case of plaintiffs that a copy of this agreement was not given to them. It is their case that, however, they refused to sign the development agreement as it did not contain the assurance given to plaintiffs. 3. The grievance of plaintiffs is that since both the flats on the first floor; one belonging to them and the another belonging to one Yusuf Lakdawala were being used for commercial purpose, both should be given identical terms. Plaintiffs learnt that defendant No.1 and defendant No.3 had agreed to give to Yusuf Lakdawala a flat on the first floor which could be used for commercial purpose, a reassurance was given by defendant Nos. 1 and 3 that plaintiffs would be given the flat on the first floor. However, no mention has been made in the body of the main agreement dated 21/05/2006. Plaintiffs, therefore, informed defendant No.3 that unless they were given a flat on the first floor of the new building which could be used for commercial purpose, they 4 would not be signing development agreement. Plaintiffs’ case is that, accordingly, they were given an assurance to that effect and this fact was recorded in the letter dated 22/05/2006. It is the case of plaintiffs that in view of this letter, on 23/05/2006 defendant No.1 entered into another agreement with plaintiffs dated 23/05/2006 as well as defendant No.3 – Society. Plaintiffs, thereafter, surrendered their flat. They, however, did not insist upon recording the agreement arrived at and promise made by defendant Nos. 1 and 3 in the development agreements dated 21/05/2006 and 23/05/2006. However, later on, they were informed by Mr. Jawahar Bhatia, the Secretary of the Society that he would not be provided any commercial flat on the first floor of the new building. Further, plaintiffs noticed that an amount of Rs 3,29,745/- was due and payable by defendant No.1 to plaintiffs as per terms and conditions of the contract. However, the said amount was not paid. Plaintiffs, therefore, filed the aforesaid suit. 4. Plaintiffs initially took out a notice of motion for ad- interim relief. This court, by an order dated 19/11/2008, 5 came to the conclusion that, prima facie, plaintiffs had not made out any case that the 1st defendant had agreed to allot the flat situated on the first floor of the new building. Hence, it was held that no case was made out for grant of ad-interim relief and the said prayer was rejected. It, however, observed that any transaction made by 1st defendant relating to the 1st commercial floor of the building would be subject to further orders which may be passed in notice of motion and the suit. Against this order, plaintiffs preferred an appeal being Appeal No.12 of 2009. At the hearing of the appeal, Counsel for the 1st defendant made a statement that any transaction by defendant No.1 relating to first commercial floor of the building would be subject to further orders as may be passed in the notice of motion and in the suit and the 1st defendant shall place any prospective purchaser of the flat on the first commercial floor on specific notice of the pendency of the suit before this Court. Counsel appearing on behalf of the Society submitted that he had no objection to the user of the flat by appellant for commercial purpose subject to grant of necessary permission by the Municipal Corporation. In view of the said statements, plaintiffs’ 6 Counsel did not press the appeal and the appeal was accordingly disposed of. 5. Defendant Nos. 1 and 3 filed their respective affidavit in reply and denied the claim of plaintiffs. It was specifically contended that plaintiffs were very well aware that the flat which was allotted to them was on the first floor of the building above the podium. In both the agreements dated 21/05/2006 and 23/05/2006, it was specifically laid down that plaintiffs would be entitled to get the residential flat on the first floor of the residential building. It is further contended that the letter dated 22/05/2006 did not contain any agreement or promise on the part of defendants to provide a flat for commercial user to plaintiffs as alleged. It was contended that plaintiffs, all along, have been using their old Flat No.103 for residential purpose and even the leave and license agreement was executed for residential use and not for commercial use. 6. Mr. Rao, the learned Counsel appearing on behalf of plaintiffs invited my attention to the letter dated 22/05/2006. 7 He submitted that only after this letter was given to plaintiffs, they signed the agreement dated 21/05/2006 and 23/05/2006 and also signed individual agreement on the same date. He then invited my attention to the agreement dated 21/05/2006 and more particularly clauses-A, N and O. He also invited my attention to clause-24 of the said agreement wherein it was specifically agreed that if any amendment had to be made in the sanctioned plan that could not be done without prior approval of the Society. He submitted that, however, contrary to this agreement, location of the flat was changed and it was in clear violation of this agreement. The flat which was being offered to plaintiffs was not on the first floor of the building for commercial use but what was offered was the flat on the first residential floor of the building which was effectively on the 4th floor above the podium. He submitted that Yusuf Lakdawala, on the other hand, was offered the flat on the first floor for commercial use. It was submitted that there was a clear discrimination by defendant No.1 between plaintiffs and Yusuf Lakdawalla. He submitted that there was also a clear violation of clause-31. Defendant No.1 had 8 assured to pay members certain sum of money by way of liquidated damages. He submitted that this amount has not been paid by defendant No.1. He also invited my attention to clause-47 in support of the said contention. He further invited my attention to agreement dated 23/05/2006 between defendant No.1, defendant No.3 and plaintiffs. He then invited my attention to the Second Schedule of the said agreement wherein reference was made to 1st residential floor of the proposed new building. He then invited my attention to the sanctioned plan which was annexed to the said agreement wherein the first floor of the building was shown above the stilt parking area. He then invited my attention to the memorandum of understanding executed between plaintiffs and defendant No.1 dated 27/02/2006. He invited my attention to clause-1(a) which stated that the defendant No.1 agreed to provide residential flat immediately above podium level of the new building. He then submitted that in the agreement dated 23/05/2006, it was clearly mentioned that plaintiffs would be entitled to get new flat No.103 on the first residential floor in the proposed building. He submitted that the sanctioned plan which is 9 now available clearly shows that the earlier sanctioned plan had been changed and now the first residential floor was shown above the podium which, in reality, is the 4th floor of the building and not the first floor as was agreed between the parties. He submitted that below the podium, there were two floors which were to be used for commercial purpose. He submitted that in the initial plan which was sanctioned, no commercial user was shown. He submitted that, therefore, there was a clear violation on the part of defendant No.1 by changing the sanctioned plan without permission of the members. He submitted that the said sanctioned plan was not shown to the learned Single Judge at the time when the ad-interim relief was asked for by plaintiffs. 7. Mr. D.H. Mehta, the learned Counsel appearing on behalf of defendant No.1, on the other hand, submitted that the plea of plaintiffs was dishonest plea and that plaintiffs had, all along, used their flat in the old building for residential purpose. They now wanted commercial flat in lieu of residential flat which was used by them earlier before 10 demolition of the old building. He submitted that the assessment of the old building clearly reveals that plaintiffs were using their flat for residential purpose whereas Yusuf Lakdawala was using his flat particularly for commercial purpose i.e for office and partly for residence. He submitted that, all along, plaintiffs had used their old flat on the first floor of the building for residential user. He invited my attention to the leave and license agreements executed by plaintiffs with various persons and submitted that the said flat was exclusively given for residential user and not for commercial purpose. He then invited my attention to a letter dated 22/05/2006 and submitted that the said letter could not be termed as an agreement between the parties and, at the best, could be termed as contingent contract. He submitted that no relief of specific performance could be granted on the basis of such letter even at the final hearing of the suit and, therefore, there was no question of granting any interim relief on the basis of the said letter. He submitted that plaintiffs had specifically signed the agreement dated 21/05/2006. In clause-N of this agreement it was specifically mentioned that the Society and the 11 Members have finalized the earmarking of flats and car parking spaces in the new building as set out in the Second Schedule. He invited my attention to the Second Schedule wherein it was clearly mentioned that the said flat which was allotted to plaintiffs was a residential flat on the first floor of the building. He also invited my attention to clause-O wherein it was clearly mentioned that the new building would comprise of the basement, ground floor, 1st floor and 2nd floor, podium and, thereafter, six upper residential floors. He submitted that, therefore, this fact was very much within the knowledge of plaintiffs. He invited my attention to clause-44 which clearly stated that permitted user of the premises would be residential-cum-commercial as may be sanctioned by the Corporation. He then invited my attention to agreement dated 23/05/2006 which also was signed by plaintiffs and defendants. He submitted that the said agreement did not refer to letter dated 22/05/2006. He submitted that this agreement was subsequent to the said letter and it was signed by plaintiffs and defendants. However, no reference was made about the said letter. He submitted that in the said agreement also it was clearly 12 mentioned that plaintiffs would be entitled to get the flat on the first residential floor. He submitted that, therefore, the plea of plaintiffs was a dishonest plea and plaintiffs were not entitled to get any interim relief. He, however, submitted that defendant No.1 was under an obligation to give one flat to plaintiffs on the first residential floor of the building and as soon as the occupation certificate is granted, the said flat would be handed over to plaintiffs herein. 8. Mr. Desai, the learned Counsel appearing on behalf of Society submitted that the suit itself was not maintainable since no notice under section 164 had been given by plaintiffs. He submitted that subject matter of the suit would touch the business of the Society and, as such, plaintiffs were duty bound to give notice as contemplated under section 164 and, for want of such notice, suit itself was not maintainable. He adopted other submissions made by Mr. D.H. Mehta, the learned Counsel appearing on behalf of defendant No.1. 9. I have heard the learned Counsel appearing on behalf of 13 plaintiffs and the learned Counsel appearing on behalf of defendants at length. 10. Since facts of the case already have been stated hereinabove, it is not necessary to again refer to them in detail. 11. In my view, there is much substance in the submissions made by Mr. Mehta, the learned Counsel appearing on behalf of defendant No.1. In my view, no prima facie case is made out by plaintiffs for grant of any interim relief during the pendency of suit. The suit essentially is filed for specific performance of the letter dated 22/05/2006. The letter dated 22/05/2006 reads as under:- “We have no objection for Commercial user for the said Flat No.103, 1st Floor, Rajdoot Khar Co-operative Hsg. Soc. Ltd., 57, Linking Road, Mumbai – 400 052 subject to prior permission from B.M.C. After completion of building your said flat can be used for commercial purpose. We will get necessary permission from 14 concerned department as well as society.” The principal grievance of plaintiffs is two-fold. Firstly, it is alleged that they were using their premises on the first floor of the old building for commercial purpose and so was their neighbour Yusuf Lakdawala. The grievance is that though Lakdawala has now been given commercial flat on the first floor of the newly constructed building, plaintiffs are given residential flat on the first residential floor of the building which is, in fact, the 4th floor of the building. The material which is on record indicates that plaintiffs were, all along, in occupation of a residential flat on the first floor of the old building and they were using it for residential purpose. The leave and license agreements on which reliance is placed by Counsel for defendants clearly reveal that these agreements were the leave and license agreements for residential user of the flat. The contention of plaintiffs that they were using the residential flat for commercial user, therefore, is not substantiated by any material on record. They have also not produced any document to show that the Corporation had permitted them to use the said flat for commercial purpose. 15 They, however, are now seeking the flat for commercial user on the first floor of the newly constructed building. The agreements executed by them dated 21/05/2006 and 23/05/2006 clearly reveal that defendants had agreed to give to plaintiffs one residential flat on the first residential floor of the building. Various clauses in the agreement also show that plaintiffs were very well aware that the building consisted of basement, ground floor, first and second commercial floor, podium and, thereafter, six residential floors and he was alloted a flat on the first residential floor in the new building. The contention of plaintiffs, therefore, that they were taken for a ride and there was change in location of the flat cannot be accepted. It is difficult to accept the plaintiffs’ contention. Copy of the agreement dated 21/05/2006 was given to him after one month. In fact, clauses in the agreement clearly reveal that plaintiffs were aware about the exact location of their flat in the new building. Clause-N of the said agreement reads as under:- “N. The Society and the Members have finalized the earmarking of flats and car parking spaces in the new building, inter se as set out in 16 the Second Schedule hereunder written and all the remaining shops, units, flats and car parking spaces on the north side shall be available to the Developers for sale;” In Schedule to the agreement, though the names of plaintiffs are shown at serial No.4, their existing flat has been shown as Flat No.103 and their new Flat is shown as Flat No.103 and the new floor is shown as R-1 whereas the floar of Mr. Lakdawla is shown as an office and the new floor is shown as C-1. Similarly, clause-O reads as under:- “O. The said composite new building shall have flats and premises to be occupied by the Members as well as the prospective purchasers of the Developers herein. The new building will comprise of the basement, ground floor, 1st floor and 2nd floor, podium and thereafter six upper residential floors. The ground floor, podium and the residential flat plans are annexed hereto and marked as Annexure “VI”.” 17 Both these clauses, therefore, clearly reveal that a flat which was allotted to plaintiffs was on the first residential floor in the building which consisted of ground + two floors + six upper residential floors. This agreement has been signed by plaintiffs and it is also a registered agreement. The sanctioned plan is annexed to this agreement. The second agreement is dated 23/05/2006. In this agreement also, there is a specific reference to the flat being allotted on the first residential floor to plaintiffs. The said clause reads as under:- “In terms of the said Development Agreement, the Member is entitled to new Flat No.103 admeasuring 1105 sq. ft. (carpet area) on the 1st residential floor in the proposed new building also to be known as “Rajdoot” to be constructed on the said property (hereinafter referred to as “the new flat” in the said Development Agreement);” Similarly, Second Schedule in the said agreement dated 23/05/2006 also refers to the first residential floor in the proposed new building. The contention of plaintiffs, therefore, that the location of the flat has been changed 18 without informing them is prima facie not proved. On the contrary, there is clear material on record to indicate that they were very well aware that they were offered a flat on the first floor of the residential building and the building consisted of ground + two commercial floors + six upper floors. The contention of plaintiffs that after they had received letter dated 22/05/2006, they signed the agreement dated 22/05/2006 and 23/05/2006 also appears to be doubtful and the said contention is merely an afterthought more particularly when they learnt that Yusuf Lakdawala who was their neighbour on the first floor was offered commercial premises on the first floor and they were offered residential premises on the first residential floor of the building. 12. The letter dated 22/05/2006 merely states that defendant No.1 would have no objection for commercial user of Flat No.103 on the first floor subject to prior permission from B.M.C. The letter, thus, therefore, states that subject to permission being granted by B.M.C., defendant No.1 did not have any objection for the plaintiffs using the said flat for commercial purpose. There is no substance in the 19 submission made by learned Counsel appearing on behalf of plaintiffs that the plans were subsequently altered, though a feeble attempt has been made by inviting my attention to the plan annexed to the agreement and in pointing out that the first floor is shown above the parking stilt and, in fact, above the parking stilt, there are two commercial floors. This submission cannot be accepted since in the agreement dated 21/05/2006, there is a clear reference of the structure of the building being that of basement, ground floor, two commercial floors, podium and six upper residential floors. Under these circumstances, therefore, no prima facie case is made out by plaintiffs. 13. In my view, it may not be possible to grant even any final relief even on the basis of the letter dated 22/5/2006 and, therefore, there is no question of granting any interim order in favour of the plaintiffs. However, Mr. Mehta, the learned Counsel appearing on behalf of defendant No.1 makes a statement that one flat would be offered to the plaintiffs as per agreement dated 21/05/2006 and 23/05/2006 on the first residential floor of the newly constructed building and that the amount of Rs 3,29,745/- 20 would be paid to the plaintiffs. 14. Under these circumstances, no relief can be granted in favour of the Plaintiffs. At the highest the plaintiffs may claim compensation from defendants if they succeed in establishing their case of change of location of their flat in violation of section 7A of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963. 15. Notice of Motion is accordingly dismissed. 16 The learned Counsel appearing on behalf of plaintiffs submits that the interim oder passed by this Court dated 19th November, 2008 may be continued for a period of four weeks. In my view, it would be appropriate if the said order is continued for a period of four weeks. Order accordingly. (V.M. KANADE, J.)