*1* wp.4037.11.caw.1137.11.1167.11.911.sxw kps IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.4037 OF 2011 WITH CIVIL APPLICATION NOS.1137/2011, 1167/2011, 1127/2011 & 1237/2011. D.V.Shah and others. ..Petitioners -Versus- Prerana The Bank of Baroda Mumbai Employees’ CHSL and another. ..Respondents .......... Mr.Niranjan Lapashiya i/b Niranjan & Company, for the Petitioners. Mr.H.S.Shreepad Murthy, for the Respondent No.1. Mr.Sanjay Jain with Mr.Kalpesh Mehta i/b Pravin Mehta & Mithi & Company, for the Respondent No.2. .......... CORAM : S.C.DHARMADHIKARI, J. Date : 21st June, 2011. P.C.: 1 This Writ Petition is directed against the order passed by the Maharashtra State Co-operative Appellate Court, Mumbai in Appeal No. 45/2011 dated 26.04.2011. That appeal was filed challenging an order below Exhibit-5 dated 17.03.2011 in Dispute No.CC/IV/329/2010 passed by the Co-operative Court-IV, Mumbai. The Petitioners are the original Opponent Nos.1 to 9 whereas the Respondent No.1 is the original Disputant and the Respondent No.2 is the original Opponent No.10 in the said dispute. 2 The case of the Respondent No.1-Society in the dispute is that the Petitioners are opposing the redevelopment project. That redevelopment of the first Respondent Society’s property is being carried *2* wp.4037.11.caw.1137.11.1167.11.911.sxw out by the Respondent No.2-Developer. The entire redevelopment is pursuant to the resolution of the General Body of the Co-operative Society in question i.e. Respondent No.1. The meetings were held from 18.01.2003 to 20.06.2010. Pursuant thereto, the development agreements dated 11.10.2008 and 02.08.2010 have been executed. It is stated in the dispute application itself by the Respondent No.1-Society that there are 52 members having 52 flats in the Society. The building of the Respondent No.1-Society is three decades and more old and it requires some major repairs. The decision was taken because the process of repairs has commenced from 2001 and it would be ideal to demolish the old building and redevelop the property. For that purpose, negotiations were held with the Respondent No.2-Developer. There were certain disputes and differences which led to filing of civil suit. Ultimately, there was compromise between the Respondent Nos.1 and 2 in the City Civil Court in Suit No.2384/2004. Pursuant to the consent terms, a memorandum of understanding was arrived at and that is how the induction of the Developer was done. 3 It is common ground that the Developer chosen by the Respondent No.1-Society is the same who has developed the adjoining plot. It is also common ground that the Petitioners had made certain allegations against the Managing Committee members and those incharge of the affairs of the Society which led to filing of Dispute No.CC/IV/281/2010. It is further common ground that the Petitioners were not successful in obtaining any interim orders in the said dispute. That dispute is pending. However, it is also common ground that the litigation between the Society and the Developer in the City Civil Court has come to an end. 4 It was expected that everybody will co-operate in the *3* wp.4037.11.caw.1137.11.1167.11.911.sxw redevelopment as they were bound by the decisions taken by the General Body of the Society. It appears from the record that out of 52 members, 43 have no grievance against the redevelopment project. 40 persons have vacated their respective flats and are residing in the temporary accommodations and/or have made their arrangement otherwise. It is stated that three persons are yet to move out, but, they have no grievance. It is only the Petitioners, who are 09 in number, objected to the entire redevelopment and since they were non cooperating members, a dispute had to be filed in the Co-operative Court against them. That is the dispute which has been filed by the Respondent No.1-Society against the present Petitioners and the principal relief therein is of declaration that the General Body resolutions passed by the Respondent No.1-Society from time to time and the development agreements are binding on the Petitioners and that they should hand over vacant and peaceful possession of the respective flats. In such dispute, an application for interim relief has been made (Exhibit-5). That application is praying for relief of appointment of the Court Receiver for taking possession of the requisite flats from the Petitioners and handing over them to the Respondent No.2- Developer, so that the old building can be demolished and redevelopment work can commence. 5 The Petitioners opposed this application by filing their affidavit and ultimately, that application was placed before the Co- operative Court which allowed it and appointed a private receiver, namely, an Advocate to take possession of flat Nos.25, 33, 45, 47, 48, 17, 4, 12 and 29 which are stated to be in possession of each of the Petitioners and such possession can be taken forcibly by the receiver with the help of Police. 6 It was this order which was passed on 17.03.2011 and which *4* wp.4037.11.caw.1137.11.1167.11.911.sxw led to filing of the appeal by the Petitioners. That appeal has also been dismissed by the impugned order 26.04.2011 leading to filing of the instant Writ Petition. 7 Mr.Lapashiya, learned counsel appearing for the Petitioners, has firstly urged that the Courts below have passed mandatory orders and directions. By these mandatory orders and directions, the entire dispute has been allowed at interlocutory stage. Now, nothing remains to be done and adjudicated in the dispute. If the Petitioners have raised serious objections to the manner in which the resolutions were passed and the decision of redevelopment was taken by the office bearers of the Society and the track record of the Developer showing his lack of bonafides, then, because of the impugned orders the Petitioners will have no opportunity to substantiate any of these allegations. Once they are out of the premises, the building is demolished, then, nothing would remain in the dispute and it would be rendered academic. 8 His other argument is that the Petitioners have pointed out serious lacunas and defects in the redevelopment project. The Petitioners have pointed out with reference to the old plans and area statement that the Respondent No.1-Society had right, title and interest in open spaces known as Recreation Grounds. These are being shared with the existing and adjoining plot holders. There was open area which was being used by persons who had some structures closely. This huge area was a play ground and recreation ground for all occupants. That has now been sacrificed by the Respondent No.1 Society. In these circumstances, the Courts below erred in not taking any cognizance of the submissions in that behalf, but passed the directions on the basis that the Petitioners are bound by the resolutions and decisions of the Society. For all these reasons, he submits that the petition be allowed. *5* wp.4037.11.caw.1137.11.1167.11.911.sxw 9 On the other hand, Mr.Murthy, learned counsel appearing for the Respondent No.1-Society and Mr.Jain, learned counsel appearing for the Respondent No.2-Developer, have pointed out that now the affidavits are filed clarifying the position with regard to the recreation ground. The recreation ground was a huge area, but that was the position in the year 1971. Subsequently, there was implementation of the Town Planning Scheme. The Petitioners are relying on the factual position emerging from the record, but prior to the implementation of this Town Planning Scheme. The Petitioners are pointing out the existence of the recreation ground on the basis of the plan of the year 1971. However, after the scheme was implemented, the plots were divided. The Respondent No.1- Society got Plot No.2 in lieu of larger area whereas Plot No.3 came to the share of the Respondent No.2. On plot No.3, a building of ground plus 14 upper floors has already been constructed and that building is complete. The flat purchasers have been put in possession. Therefore, the area statement which shows a larger recreation ground can never be said to be existing at site. Both plot holders have got their respective recreation grounds. These grounds are maintained in terms of the statutory provisions, namely, the Development Control Regulation and the Development Plan. Therefore, it is erroneous to suggest that the Respondent No.1-Society has sacrificed the recreation ground or any benefit accruing therefrom. The plot area of the property belonging to the Respondent No.1-Society is 2557 sq.mtrs.. Floor Space Index (FSI) of about 5000 sq.mtrs. has been generated permitting development by constructing a building of ground plus 18 upper floors on the Society’s plot. After housing and providing for accommodation for the members of the Respondent No.1-Society, the Developer will sell the flats in upper floors and that is how he will recover the construction costs and other *6* wp.4037.11.caw.1137.11.1167.11.911.sxw expenses including making provision for temporary alternate accommodation. In these circumstances, it is erroneous to suggest that the Developer has been allowed to use the property or any benefit accruing therefrom or that the Society and the Developer have manipulated the record so as to deprive the Society of its recreation ground. It is stated that the Petitioners have not been able to point out anything in their dispute application on these aspects. It is only on filing of the Application of interim injunction by the Society, that they raised these aspects and that too in the Society’s dispute. This is nothing but obstruction placed by few disgruntled members who are also going to be accommodated permanently and with the same benefits on par with those who are cooperating with the Developer and therefore, the petition should be dismissed. 10 On the earlier occasion, after hearing parties at some length, I had directed that affidavits be filed so that the apprehension, even at this prima facie stage, of the Petitioners is taken care of, so also, judicial conscience is satisfied. 11 The Respondent No.1 Society’s Secretary has filed an affidavit which has been affirmed on 18.06.2011, copy of the same has been given to the Petitioners’ Advocate. In the affidavit, it has been pointed out from the records of the Society that the Society owned a plot of land being Final Plot No.2 of the Town Planning Scheme, Borivali No.1 which admeasures 2557 sq.mtrs.. The Society was the original owner of a larger plot of land. Some time in the year 1971, under a registered Deed of Conveyance dated 27.09.1971, the Society conveyed the portion of the said plot to one M/s V.K. Builders consisting of three plots of land, namely, (i) an area of 820 sq.mtrs., (ii) an area of 1318 sq.mtrs. and (iii) an area of 415 sq.mtrs.. The area of 415 sq.mtrs. was the recreation ground area *7* wp.4037.11.caw.1137.11.1167.11.911.sxw conveyed along with two plots of land to the said M/s V.K. Builders. A copy of the plan is annexed as Exhibit-1 to this affidavit. Further, it is pointed out that the Town Planning Scheme, Borivali-1 came into effect and the final scheme was implemented from 28.09.1976. On reorganization of the plots, a plot of land admeasuring 2557 sq.mtrs. was allotted to the Respondent No.1 Society. The necessary area statements of the authorities are annexed as Exhibits-2A and 2B to this affidavit. In these circumstances, it is pointed out that reference to the earlier documents is of no use and assistance. In paragraph No.5 of this affidavit, this is what is stated:- “5. I respectfully submit that the plot of land No.2 is the only plot exclusively owned by the Respondent No.1. The area of the plot is 2557 sq.mtrs. as mentioned in the final TPS scheme. The requirement of 15% as recreation ground has been duly provided in the proposed plan submitted to the Municipal Corporation sanctioned by the Municipal Corporation. The copies of the IOD and the sanctioned plan are already annexed; however, I am enclosing herewith once again the copy of the said plan showing the specific recreation ground which shall be kept open to sky except a small sub-station for electric supply which is a condition put up by the Municipal Corporation for sanctioning of the plan. Save and except the aforesaid sub-station no construction is proposed or would be done on the said area. The same is hereto marked and annexed as Exhibit-3.” 12 In such circumstances, it is pointed out that at the instance of some of disgruntled members like the Petitioners, entire redevelopment scheme cannot be obstructed or stopped midway. Now, the Developer has taken steps and has obtained an IOD. If the building is allowed to be demolished after removal of all members, then, he will obtain the commencement certificate. 13 The Respondent No.2-Developer has filed an affidavit through *8* wp.4037.11.caw.1137.11.1167.11.911.sxw its partner Mr.Pradip Chopra and while confirming the statements in the affidavit of the Respondent No.1-Society, what has been stated in paragraph No.5 of the Developer’s affidavit is that the area of plot of the Society is 2557 sq.mtrs. and the requirement of 15% recreation ground has been duly provided in the proposed plan submitted to the Municipal Corporation for Greater Mumbai. All documents including the copies of IOD and sanctioned plan were placed before the Courts below. It is categorically stated that a space earmarked as Recreation Ground will be kept open to sky except putting up of a small sub-station for electric supply, which is a condition imposed by the Municipal Corporation for sanctioning of the plan and a Security Cabin. In paragraph Nos.7 and 8 of this affidavit, it has been pointed out as under:- “7. On the Final Plot No.3 there was an existing building called Sahyadri Building and there was a chawl on the rear side of Final Plot No.3. After obtaining all necessary approvals, this Respondent commenced construction of a commercial building consisting of 14 floors on Final Plot No.3 in accordance with plans approved by the MCGM on 25th February, 2009. This Respondent has completed the construction of the said commercial building and the building is called “Gold Crest”. Hereto annexed and marked Exhibit 3 is a copy of the sanctioned plan of Gold Crest as also showing the Sahyadri building constructed on Final Plot No.3. 8. I say that the RG approved for Final Plot No.3 is 565.80 sq.mtrs. as against the mandatory 15% RG of 557.25 sq.mtrs. It may be noted that the aggregate recreation area of Final Plot Nos.2 and 3 is 949.91 sq.mtrs. i.e. 10,224.83 sq.ft.. It is further pertinent to note that there is an always has been a compound wall between Final Plot No.2 and Final Plot No.3, except a gate to access area. Occupants of the Final Plot No.2 did not have any access to the RG on Final Plot No.3.” *9* wp.4037.11.caw.1137.11.1167.11.911.sxw 14 It is on this material that the submissions have been heard. After perusing the petition and annexures thereto including the impugned orders and further affidavits that have been duly filed and noting that the Petitioners do not wish to place any rejoinder; I am of the opinion that there is no substance in this Writ Petition. The Courts below have, prima facie, concluded that the Petitioners are bound by the resolutions and decisions of the Respondent No.1-Society. The Petitioners have also filed a substantive dispute, but they have failed to obtain any interim order therein. In such circumstances, they cannot be heard to say that they have absolute right to oppose the redevelopment scheme at this stage. Ultimately, they will have to succeed in their dispute and also prove the case as set out in the Written Statement which has been filed in the dispute of the Respondent No.1-Society, from which the impugned orders arise. The Courts below have concurrently found, on the basis of the material produced on record, that the meetings were held from time to time which have been attended by the Petitioners. The Courts below have found that the Respondent No.1-Society has made out a prima facie case and the balance of convenience is also in its favour, so also, other members. They will suffer irreparable loss, hardship and injury, if the interim relief as prayed is not granted. 15 The argument that the Society’s dispute stands allowed by virtue of mandatory orders and directions has no substance. In the peculiar facts of this case, the mandatory orders and directions were called for. It is well settled by catena of decisions that a civil court, so also, co-operative court can make interim orders in the mandatory form. These mandatory orders and injunctions and the interim orders of mandatory nature or in the mandatory form, can be granted, but for that a strong prima facie case should be made out. The test laid down in the case of *10* wp.4037.11.caw.1137.11.1167.11.911.sxw Dorab Cawasji Warden v/s Coomi Sorab Warden reported in AIR 1990 SC 867, has been applied by the Courts below. Further, the argument that the Petitioners would be dispossessed at interlocutory stage, has also been noted. This is not a civil suit by the Developer filed in the Civil Court where the Society through the Developer is seeking to oust non- cooperating members or those who are not parties to the development agreement directly by taking recourse to filing of civil suit. This is not a case where the Society has put up the Developer to file such civil suit and has been watching the show as a proforma Defendant. This is a case where the Society has moved against its own members and that to in the competent court. When it moved under Section 91 of the Maharashtra Co- operative Societies Act, 1960 before the Co-operative Court and seeks relief of permanent injunction, so also, a order and direction to abide by the resolutions and decisions, then, it is permissible for it to file an application for interim relief. The interim relief is in furtherance of the final relief. The final relief is of declaration that each of the resolutions and development agreements are binding because they are valid and subsisting. The members of the Society must abide by the same. 16 The Courts below have proceeded by applying the doctrine that the Society has an existence of its own in law and the members speak through the Society. Further, on facts it has been found, at this prima facie stage itself, that the conduct of the Petitioners shows that they are objecting to almost everything including the process adopted by the Managing Committee for undertaking repairs. They have also objected on the earlier occasion when the decision was taken regarding the construction of new building. They have also objected for redevelopment of the Society’s property and appointment of the Respondent No.2- Developer. Thus, they have subsisting grievance against the Managing *11* wp.4037.11.caw.1137.11.1167.11.911.sxw Committee. Yet, it has been found, as a matter of fact, that they attended the meetings and they had opportunity to inspect all documents and speak at the meetings. They had also opportunity to object to the redevelopment project and have their objections noted. However, when the decision was taken by the General Body to go ahead with the redevelopment and that decision has been supported by majority, then, prima facie the acts of the Society bind the members. If the Society had no backing of the resolutions and decisions of the competent bodies and authorities, possibly something could have been said in the Petitioners’ favour. However, when the resolutions are on record and that they are being questioned by the Petitioners in independent proceedings of their own, however, they failing to get any interim order in their favour, then, the conclusion that a prima facie case has been made out by the Respondent No.1 Society, concurrently recorded, cannot be interfered. 17 On the question of balance of convenience, it has been noted that the development agreement is of the year 2008. The Respondent No. 2 has acted in furtherance thereof and got the plan sanctioned and obtained an IOD. He has paid 18 months rent in advance and one month brokerage charge. Thus, the Developer has incurred the expenses of about Rs.82,29,375/- towards rent and brokerage and total expenses incurred are of Rs.1.16 Crores. One need not take cognizance of these steps and alleged expenses incurred by the Developer, but one must take note of the fact that when 40 members out of 52 members/occupants have, in furtherance of the decisions of the Society, vacated the premises and handed over the same for redevelopment, then, the conclusion that the balance of convenience in favour of the Respondent No.1 also needs to be upheld at the prima facie stage. 18 On the question of irreparable loss as well, the above aspects *12* wp.4037.11.caw.1137.11.1167.11.911.sxw are relevant. It cannot be forgotten that ultimately the Respondent No.1- Society finds it difficult to go on incurring expenses for undertaking repairs of the structure which is 30 years old. The structure may be strong in the opinion of the Petitioners, but now when other members at the meetings decided to go for redevelopment at which meetings the Petitioners had opportunities to place their grievances, then, there is no question of irreparable loss or injury being caused to the Petitioners. The Petitioners will get all benefits on par with other members. Despite opposing the redevelopment scheme, the Petitioners are going to get permanent alternate accommodation in the same area with the same advantage. They are going to get flats in the same building which is going to be constructed on the Society’s plot. They will also enjoy benefits of payment of compensation for temporary alternate accommodation on the same lines that of others. 19 Additionally, Mr.Jain, on instructions, makes a statement that the Respondent No.2-Developer will construct the building and hand it over to the Respondent No.1-Society within a period of two years from the date of obtaining the commencement certificate. The Respondent No.2- Developer will not discriminate between the members who are cooperating and non-cooperating. The Respondent No.2 will put all persons in possession simultaneously. On a query from the Court as to whether, even if all flats are not sold, still the Developer will put 52 members of the Society in possession. Once again, on instructions, Mr.Jain makes a statement that in that event on the occupation certificate being obtained, the Respondent No.2-Developer will put 52 members of the Respondent No.1-Society in possession of the respective flats allotted to them, even if other flats are not sold. Mr.Jain submits that financial strength, competence and credentials of the Respondent No.2-Developer *13* wp.4037.11.caw.1137.11.1167.11.911.sxw have never been questioned nor any allegations are made to that effect. Therefore, the Respondent No.2, who has several ongoing projects and the requisite financial support in the market, is in position to withstand all market fluctuations and can complete the project in time. 20 In these circumstances, all the more, irreparable loss and injury will be caused to all concerned with the redevelopment project, if its implementation is interfered with, obstructed or halted all together. In my view, while not interfering with the orders under challenge, but by providing safeguards in the form of the statements which have been made by Mr.Jain and accepting them as undertakings to this Court, the present Writ Petition can be disposed of. Additionally, it is clarified that the statements made by the Respondent No.2-Developer would equally bind the Respondent No.1-Society and they will also have to ensure that every single member out of 52 is provided with a permanent accommodation in the reconstructed building. Equally, the Respondent Nos.1 and 2 will abide by the final orders in both disputes. The Petitioners will have opportunity to substantiate and prove their case as set out in the Written Statement and if they succeed or prove that the Society has deprived the members of any land or benefits attached thereto or the area of recreation ground with accruing benefits, then, nothing prevents the Co-operative Court from making such orders as are permissible in law and ensuring that such benefits, concessions and ancillary advantages are made available to the Respondent No.1-Society and its members. Neither the observations made in the order of the Co-operative Court at the prima facie stage nor by the Appellate Court or by this Court, prevent the Petitioners from raising appropriate contentions and bringing on record such material as is permissible in law. All