1 nms3292-10 vai IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO.3292 OF 2010 IN SUIT NO.2972 OF 2010 WITH NOTICE OF MOTION NO.259 OF 2011 IN SUIT NO.2972 OF 2010 AND NOTICE OF MOTION NO.503 OF 2011 IN SUIT NO.2972 OF 2010 Rajnikant R. Shah & Ors. ....Plaintiffs V/s. Sahara India Financial Corporation Ltd. & Os. ....Defendants Mr.Nitin Thakkar, Senior Counsel with Mr.Rajesh Shah i/b Mr.Y.M. Kanchan for the Plaintiffs. Mr.Gaurav Joshi with Mr.Chirag Mody i/b DSK Legal for Defendant No.1. Mr.Pravin Samdani, Senior Counsel with Mr.Snehal Shah i/b Narayanan & Narayanan for Defendant No.2. Mr.Kishore Jain i/b Mr.Tusar Goradia and Ms.Nisha Parmar for Defendant Nos.3 to 11. Ms.K.R. Davierwala i/b Mulla & Mulla & C. B. & C. for Defendant Nos. 12 to 26 and 28 to 40. CORAM : S.J. VAZIFDAR, J. DATE : 6TH SEPTEMBER, 2011. P.C. :- 2 nms3292-10 1. The suit is filed for a decree directing defendant No.1 to re- convey the suit property in terms of the deed of mortgage dated 28.6.1997, a deed of further charge dated 4.6.1998 and a deed of settlement dated 10.5.2007 and to execute the lease deeds in respect of the open car parking places. The plaintiffs have also sought a declaration that defendant Nos.1 and 2 have no right, title or interest in the suit property and unsold flats in the building constructed thereon and that the plaintiffs alone are entitled to deal with the same. The plaintiffs have also sought an order directing defendant Nos.1 and 2 to hand over certain flats to defendant Nos.12 to 41. 2. Notice of Motion No.259 of 2011 is taken out by defendant No.2 raising a preliminary objection as to the maintainability of the suit. I rejected the preliminary objection. It is agreed that the reasons for the same may be furnished by the common order in the above notices of motion. 3. It is contended that the plaintiffs have no cause of action against defendant No.2 as there is no re-conveyance of the property by defendant No.1 to defendant No.2. 4. Whether the plaintiffs have made out a case on facts is a different matter altogether. It is not relevant to the question as to whether the plaint discloses a cause of action against defendant No.2 and whether the suit is maintainable against defendant No.2. 5. Reliance was placed on the following sentence in paragraph 3 nms3292-10 19 of the plaint :- “As on today in the absence of Reconveyance of the said property by Defendant No.1 in favour of Plaintiffs it will be difficult for Plaintiffs to prevent Defendant No.2 from proceedings with the further construction.” Reliance upon a solitary sentence is not well founded. Firstly all that is said is that “it will be difficult” for the plaintiffs to prevent defendant No.2 from proceeding with further construction. The plaintiff does not state that it will not be possible altogether to do so. Further the plaint must be read as a whole. So read, it cannot by any stretch of imagination be said that there is no cause of action against defendant No.2 or even defendant No.1 on any ground including on the ground that there is no re-conveyance by defendant No.1 to defendant No.2. The plaintiffs have in fact contended that defendant No.1 is bound and liable to re-convey the property to them inter-alia on the ground that the entire mortgage debt has been paid. The repayment is not denied by defendant No.1. Defendant No.1 has not re-conveyed the property alleging that the occupation certificate for the commercial premises to be handed over to it has not been obtained. Whether the plaintiffs are entitled to the reliefs is another matter. The plaint certainly discloses a cause of action. 6. It is sufficient for the purpose of dealing with the preliminary objection to refer to paragraphs 17 to 20 of the plaint, which read as under :- 4 nms3292-10 “17. Accordingly the Plaintiffs by their letter dated 16.2.2008, inter alia, informed Defendant No. 1 that the debt owned by the Plaintiffs to Defendant No.1 has been paid off as provided in the said Deed of Settlement and requested Defendant No. 1 to treat the payment received and /or receivable by Defendant No. 1 over and above the amount settled between the Plaintiff and Defendant No. 1 as money received on behalf of Plaintiffs and to pay over the same to Plaintiffs until such time as the Agreement for Sale of premises is amended and finalized to bring the Plaintiffs as necessary party to receive consideration of sale of such premises. The said letter has been duly received by Defendant No. 1. There is no response by Defendant No.1 to the said letter. The Plaintiffs therefore submit that Defendant No.1 has accepted what is stated in the said letter. As stated hereinabove in fact Defendant No. 1 return to Plaintiffs the sum of Rs.98,40,000 on 20th December, 2007. In fact in agreements for sale of premises which are executed subsequent to 30th September, 2007, the Defendant No.1 have in terms provided that Defendant No.1 have received all their dues from the Plaintiffs and that Defendant No.1 do not have any monetary or any other interest and that Plaintiffs alone are entitled to the remaining unsold flats and the consideration arising out of the said flats. The copy of the said letter dated 16th February, 2008 is hereto annexed and marked EXHIBIT “L” . A copy of one such agreement executed by Defendant No.2, Defendant No.1 and Plaintiffs on 15.10.2008 in favour of one Pradeep Shivdas Khandare Defendant No.41 is hereto annexed and marked EXHIBIT “M” . 18. The Plaintiffs say that purchasers of premises sold by Defendant No.1 have made payment of more than 90% of consideration payable by them to Defendant No. 1. The Occupation Certificate in respect of the buildings have already been obtained on 10.6.2010. However, Defendant No. 1 did not receive the payment of balance amount on behalf of Plaintiffs from such purchasers. In view of the said Mortgage and the said Deed of First Charge unless and until the said property is reconveyed by Defendant No.1 to Plaintiff, the Plaintiffs cannot put the Purchasers of premises in possession. In view thereof until reconveyance the Defendant No.1 are bound and liable to hand over 5 nms3292-10 possession of the respective premises in the said building to the purchasers after receiving from them balance payment for and on behalf of the Plaintiffs. The Defendant No.1 inspite of repeated requests have failed to do so. On account of the said fact, the said flat purchasers are suffering a great loss. In fact some of the flat purchasers sold their existing flats in anticipation of getting possession. The Plaintiffs therefore by their letter dated 7.9.2010 requested Defendant No. 1 to immediately see that the balance payment is received by Defendant No. 1 for and on behalf of the Plaintiff and flat purchasers are hand over possession of their respective flats. Despite the said request, Defendant No. 1 has not chosen to receive balance of consideration amount from the flat purchasers for and on behalf of the Plaintiffs and handed over possession of the flats to them. By another letter dated 16th September, 2010 the Plaintiffs once again requested Defendant No.1 to do the needful in the matter. The copy of the letter dated 7.9.2010 and the said letter dated 16.9.2010 are annexed and marked as Exhibit “N” and Exhibit “N-1” . Several flat purchasers have also written a letter to Defendant No.1 asking for possession of his flat. The Defendant No.1 has however for the reasons best known done nothing in that behalf. Copy of one such letter dated 18.06.2010 from the flat purchaser to Defendant No.1 is hereto annexed and marked as EXHIBIT “O”. The Plaintiffs crave leave to refer to and rely upon the other letters of flat purchasers, when produced. 19. The Plaintiffs say that under the Development Agreement dated 30.6.2005 entered into between Defendant No. 1 and Defendant No. 2 in terms of provisions of the said Mortgage Deed, Defendant No. 2 is entitled to construct only two buildings as provided in the said Development Agreement, by consuming FSI of 4000 sq.mtrs. (43,056 sq.ft.) each. The Defendant No. 2 has already completed construction of the said two buildings. The Plaintiffs apprehends that Defendant No.2 is about to start further construction on the said property by consuming further FSI beyond the said Development Agreement. As on today in the absence of Reconveyance of the said property by Defendant No.1 in favour of Plaintiffs it will be difficult for Plaintiffs to prevent Defendant No. 2 from proceedings with the 6 nms3292-10 further construction. However if Defendant No.2 starts with further construction irreparable harm, loss and injury will be caused to Plaintiffs. The Plaintiffs therefore by their letter dated 25.8.2010 addressed to Dy. Chief Engineer, Dhavravi Redevelopment project informed them that they are the owners of the said property and that the Plaintiffs have not submitted any plans for approval nor have they authorized anybody else to do so. By the said letter, the said Dy. Chief Engineer was also requested not to take into consideration for approval any plans unless the same are authorized by Plaintiff No. 3 by putting his signature as per the rules of authority. Copy of the said letter dated 25.8.2010 is hereto annexed and marked as Exhibit “P” . 20. In the circumstances mentioned hereinabove, the Plaintiffs have duly redeemed the said Mortgage the said Further Charge and repaid the amounts of Mortgage debt under the said Deed of Mortgage dated 20.6.1997 and the said Deed of Further Charge as provided in the said Deed of settlement to Defendant No. 1. The Plaintiffs say that Defendant No. 1 despite repeated requests and reminders has failed and neglected to reconvey the said property in favour of the Plaintiffs and/or their nominees as per the said Deed of Mortgage and the said Deed of Further Charge. In view thereof, the Plaintiffs by their letter dated 12.10.2010 called upon Defendant No. 1 to reconvey the said property in favour of the Plaintiffs and/or the nominee of Plaintiffs, to handover possession of flats to the flat purchasers and the possession of unsold flats to Plaintiffs. The Defendant No.1 duly received the said letter however the Defendant No.1 has failed to comply with the requisitions contained in the said letter. The copy of the said letter dated 12.10.2010 is hereto annexed and marked as Exhibit “Q” . “ 7. The preliminary objection is therefore rejected. 8. Pursuant to an order dated 3.5.2011, the flats have been handed over to defendant Nos.12 to 41 on the terms and conditions mentioned in the said order. The order is confirmed pending the hearing and final disposal of the suit. 7 nms3292-10 9. Pursuant to the transactions entered into between the parties, defendant No.2 constructed “B” and “C” Wings of Building No. 2. Defendant No.2 was entitled to retain 50% of the flats and the plaintiffs/defendant No.1 were entitled to the balance flats. 10. For the purpose of this notice of motion, there is no dispute between the plaintiffs and defendant No.1. i.e. the mortgagee. Defendant No.2 had entered into a development agreement with defendant No.1 for the purpose of the said construction. 11. Admittedly defendant No.2 has dealt with some of the flats coming to its share. Defendant No.2 in any event is in possession of the remaining flats coming to its share. Defendant No.2 fairly does not dispute that the balance flats ought to be handed over to the plaintiffs/defendant No.1, as the case may be. Their only contention is that the amounts required to be deposited under the MOFA agreements entered into and to be entered into ought to be deposited with defendant No.2. Subject to the same, they have no objection to the twenty six flats being handed over to the plaintiffs/defendant No.2 Nor do have they any objection to 50% of the stilt parking spaces being allotted to the plaintiffs or defendant No.1, as the case may be. Defendant No.2 undertakes to hand over on or before 20.9.2011 the flats and stilt parking spaces to the plaintiffs or defendant No.1 or their nominees, as stated hereunder. 12. The following part of this order is passed with the consent 8 nms3292-10 of all the parties. i). Defendant No.2 shall within four weeks hand over the flats and the parking spaces to the plaintiffs and defendant No.1 or their nominee(s) as provided hereunder :- LIST OF THE FLATS IN WING “B” AND WING “C” OF BUILDING NO. 2 ON THE SUIT BUILDINGS TO BE HANDED OVER TO THE PLAINTIFFS ALONGWITH 1 STILT CAR PARKING SPACE FLAT NOS. WING 102 B 204 C 205 C 206 C 302 B 303 B 404 C 405 C 503 B 605 C 606 C 703 B 805 C 903 B 1006 C 1205 C 1206 C 1404 C 1405 C 1406 C 1604 C 1606 C 1804 C 1806 C 2004 C 2006 C TOTAL NOS. OF FLATS = 26 FLATS PLUS 1 STILT CAR PARKING. TOTAL NO OF FLATS IN WING “B” OF BUILDING NO. 2 ON THE SUIT BUILDINGS TO BE HANDED OVER TO THE DEFENDANT NO. 1 AND / OR THEIR NOMINEES ALONG WITH 7 STILT CAR 9 nms3292-10 PARKING SPACES. FLAT NOS STILT NOS. 901 115 (Originally B-12) 1101 94 1102 120 – Wing C 1103 93 1301 90 1302 89 1303 121 – Wing C TOTAL NOS OF FLATS = 7 FLATS PLUS 7 STILT CAR PARKING. Upon possession of the flats being handed over, defendant No.2 shall stand discharged of their obligations to hand over possession of the flats. ii). Defendant No.2 will not claim from defendant No.1 maintenance in respect of the above flats upto the date of their being handed over. Upon the flats being handed over by defendant No.2 to defendant No.1 as provided above, neither of them shall have any claim against the other. However, defendant No.2 shall in respect of the claim of about Rs.1.30 crores proceed only against the amounts deposited by defendant Nos.12 to 41 pursuant to the order dated 3.5.2011 or the security furnished by the plaintiffs as stated in this order on account of their being permitted to withdraw the same also as per this order. The question of payment of maintenance upto the date of the flats being handed over to the plaintiffs / their nominees and / or 10 nms3292-10 other defendants is kept open to be decided in this suit or in any appropriate proceedings. iii). The order dated 3.5.2011 is confirmed and shall operate pending this suit subject to anything to the contrary contained in this order. iv). The deposits made or to be made by the flat purchasers other than defendant Nos.12 to 41 under the MOFA agreements shall be handed over to defendant No.2, who shall account for the same to the society to be formed of the flat purchasers of the “B” and “C” wings of Building No.2. v). From the amount deposited by defendant Nos.12 to 41 in this Court pursuant to the order dated 3.5.2011, a sum of Rs. 1,46,19,880/- shall be handed over to the plaintiffs and a sum of Rs. 11,38,300/- shall be handed over to defendant No.2. The plaintiffs and defendant No.2 shall also be entitled to any interest that may have accrued on the amounts deposited proportionately. Defendant No.2 shall account for this amount in the manner directed in clause (iv). The plaintiffs shall not dispose of, alienate, encumber or create any third party rights in respect of flat No.1205 Wing “C”, Building No.2 except by giving the same out on leave and licence basis. The plaintiffs shall be entitled to appropriate the compensation. vi). None of the parties shall be entitled to deal with the 11 nms3292-10 balance FSI available for development of 1457.38 mtrs. in wings “B” and “C” of Building No.2 (the said balance FSI) in any manner. 13. There is however one aspect which was not agreed upon by the parties. 14. The only outstanding issue for the purpose of this notice of motion relates to open car parking spaces. Defendant No.2 claims to be entitled to allot all the open car parking spaces. Clause 4(e) of the development agreement dated 30.6.2005 entered into between defendant No.1, reads as under :- “4(e). Of the total construction laid out in the said two Wings, the Developers/Contractor shall construct and complete in all respects at their (i.e. the Developers/Contractor) costs the flats as shown in details in statement annexed as ANNEXURE “K” hereto which the said Sahara will be entitled to sell and dispose of the same to persons of its choice and the Developers/Contractor shall be entitled to deal with the portion equal to half the total constructed portion in the said two Wings. The areas under the stilt in the said two wings shall not be computed as constructed area. The said Sahara shall retain 50% of the designated car parking for each Wings including 50% of parking under the stilt to be allotted by it to the acquirers of flats from it. The Developers/Contractor shall be entitled to deal with the 50% car parking space. The said designated car parking spaces are shown on the plan annexed hereto and marked ANNEXURE “L”. “ 15. The clause therefore, clearly entitled defendant No.2 to 50% of the open parking spaces. This of course is assuming that either of the parties is entitled to the open car parking spaces. It is possible that only the society to be formed is entitled to allot the same to the members. None of the parties hereto can benefit merely from an order 12 nms3292-10 in respect of the open car parking spaces in these proceedings against third parties. 16. In the circumstances, none of the parties shall hereafter dispose of any open car parking spaces in relation to Wings “B” and “C” of Building No.2. Defendant No.2 shall latest by 8.9.2011 furnish an affidavit details, including documents of the manner in which they may have dealt with the open car parking spaces. Liberty to apply. 17. The above Notices of Motion are accordingly disposed of with no order as to costs.