:1: :1: :1: 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. NOTICE OF MOTION NO.1890 OF 2006 IN SUIT NO.1347 OF 2006 Gandhi Bhuvan Co-operative Housing Society Ltd., .. Plaintiffs. Vs 1. Raj Doshi Exports Pvt Ltd & ors .. Defendants. Mr.Vivek Walawalkar i/b Mahesh Jani & Co for the applicants/plaintiffs. Mr P.K.Dhakephalkar i/b Yadunath Choudhari, for defendant no.1. Mr R.D.Soni i/b M/s Ram & Co., for defendant nos 2 to 10 & 12. CORAM : D.B.BHOSALE,J. CORAM : D.B.BHOSALE,J. CORAM : D.B.BHOSALE,J. DATE : 30.04.2008 DATE : 30.04.2008 DATE : 30.04.2008 ORAL ORDER : (Per D.B.Bhosale, J.) ORAL ORDER : (Per D.B.Bhosale, J.) ORAL ORDER : (Per D.B.Bhosale, J.) 1. This Notice of Motion, taken out by the plaintiff-society, makes several prayers against all defendants. Mr. Walawalkar, learned counsel for the plaintiffs, however, pressed the reliefs in terms of prayer clauses (e),(f) and (g) of the Motion, whereby the plaintiffs have prayed for an injunction against the defendants from in any manner creating any third party rights or parting with possession of the suit property and for an appointment of Court Receiver with :2: :2: :2: all powers under Order 40, Rule 1 of the Code of Civil Procedure. 2. In the suit, the plaintiffs are seeking several prayers including a decree against defendant no.1 to pay to the plaintiffs a sum of Rs.2,21,50,656/-, as per particulars of claim appended to the plaint, with further interest at the rate of 18% per annum. 3. Mr. Walawalkar, learned counsel for the plaintiffs before advancing his arguments, took me through the particulars of claim and fairly submitted that he has instructions to confine his arguments only in respect of Item nos. 2 and 6 therein. Item no.2, in the particulars of claim, is in respect of the plaintiffs claim towards the payment due and payable to the Maharashtra Housing Area Development Authority (for short "the MHADA") in the sum of Rs.22,06,126/-, whereas Item no.6 the plaintiffs have prayed for payment in the sum of Rs.101,55,215/- towards property taxes from 1999 to 2005. 4. The facts that are relevant and necessary to consider the prayers in the Motion pressed by the Plaintiffs are as follows : An Agreement for Development dated 19.10.1999 was executed between the :3: :3: :3: plaintiff-society and defendant no.1. Under the agreement, defendant no.1 had agreed to provide accommodation to all members of the society within 24 months from the date of a commencement certificate, which, in the present case, was issued on 21.1.2000. The plaintiff-society has 100 members and under the agreement defendant no.1 had agreed to provide tenements, to all its members, admeasuring 225 sq.ft and rest of the FSI, defendant no.1 was allowed to utilise for sale by constructing flats, shops and commercial galas in the building. It appears that defendant no.1-Developer, accordingly, constructed a building having ground plus 14 storeyed consisting of the commercial tenements, residential houses and office premises. Although an occupation certificate was not issued, the members of the society, according to defendant No.1, were given possession of the residential tenements some time in 2002. The society thereafter seems to have obtained part occupation certificates on 11.2.2003 and 21.11.2003. Admittedly, till this date final occupation certificate has not been issued by the Corporation. 5. Mr.Walawalkar, invited my attention to the Development Agreement and more particularly clause nos. 2(d),21 and 29 of the agreement and submitted that :4: :4: :4: defendant no.1 had agreed to pay all outgoings in respect of the suit property for a period from the date of commencement of construction till the issuance of occupation certificate as contemplated by clauses 21 and 29 of the agreement. He further submitted that defendant no.1 was obligated under the agreement to carry out and comply with all the requirements, directions and orders including the payment of any charges from time to time, fines and/or expenses, in respect to the said project of development on the suit property in terms of the agreement as contemplated by clause 29. He submitted that defendant no.1 had also agreed to obtain occupation certificate and then to hand over 100 tenements to the society to be allotted in turn to its members as stated in clause 2(d) of the agreement. He submitted that till this date, defendant no.1 has not obtained occupation certificate and, therefore, he is liable to pay arrears towards the payment due and payable to the MHADA and all property taxes from 1999 to 2005 as stated in the particulars of claim. According to Mr Walawalkar, although the partial occupation certificates were issued by the Corporation in 2003, defendant no.1 has not complied with the conditions stipulated therein and, therefore, defendant no.1 only will have to pay all the taxes even for the period after the date of issuance of the said :5: :5: :5: certificates. Next he submitted that though the amount towards the payment due and payable to MHADA is for the period prior to the execution of the Development Agreement, as per clause 29 under which, according to Mr Walawalkar, defendant no.1 had agreed to pay those dues also since payment of such dues is one of the conditions precedent for obtaining occupation certificate. He submitted that the property taxes from 1999, that is, from the date of commencement of the construction to 2005, defendant no.1 is liable to pay, since admittedly he has failed to obtain occupation certificate till this date. He, therefore, submitted that to secure the amounts either an injunction, as prayed, be granted or Court Receiver be appointed with all powers under Order 40 Rule 1 of C.P.C. 6. On the other hand, Mr Dhakephalkar, learned senior counsel for defendant no.1, at the outset, submitted that the plaintiffs are not entitled for any interim reliefs, as the suit is based on several false and frivolous statements and allegations. As a matter of fact, according to Mr Dhakephalkar, the plaintiffs have not complied with the terms of the Development Agreement and as such they are not entitled for any reliefs at this stage. He submitted that the members of the society have occupied the tenements and they are :6: :6: :6: in possession thereof since 2002 and, therefore, in any case, defendant no.1 is not liable to pay taxes from the date of possession. He then submitted that the building was complete as per the sanctioned plan and occupation certificate for the entire building, except third floor, was also issued by the Corporation way back in 2003 and on this ground also defendant no.1 is not liable to pay taxes, as prayed, after obtaining the partial occupation certificates dated 11.2.2003. He submitted that the prayer for damages, is in the nature of recovery of the amount and, therefore, no reliefs can be granted at this stage as prayed in the Motion. Next, he submitted that under any circumstances, defendant no.1 is not liable to pay dues of the MHADA since the said dues are pertaining to the period prior to the execution of the agreement by the plaintiff-society with defendant no.1. He then submitted, nonpayment of that amount is also a ground for non-issuance of occupation certificate by the Corporation and, therefore, defendant no.1 cannot be held liable for the same. He submitted that while taking possession in 2002 the society had executed irrevocable letter of consent/Indemnity bond in favour of the defendants under which they had agreed and confirmed that they did not have any claim whatsoever in the remaining area constructed by defendant no.1. :7: :7: :7: In view thereof, the plaintiff-society cannot claim any reliefs whatsoever against other defendants, who are in possession of the tenements in the said building. 7. Since, Mr Walawalkar did not press the other reliefs in the Motion and confined his arguments only for securing the amounts mentioned at Item nos 2 and 6 of the particulars of claim, it is not necessary to make reference to other factual matrix, which is not relevant and necessary for deciding this motion. Under the Agreement defendant no.1 had agreed to provide accommodation to all 100 members of the plaintiff-society within 24 months from the date of commencement certificate and, thereafter, defendant no.1 was liable to pay liquidated damages of Rs.2000/- per day. Admittedly, construction of the building was started sometime in January, 2000 and Members of the society were given possession of their respective flats some time in 2002. It appears that the society, after taking possession of the flats had applied to the Corporation for partial occupation certificate and it was issued by the Corporation issued on 11.2.2003. It appears that the Corporation has issued another certificate on 28.11.2003 allowing part occupation of the building excluding third floor, subject to certain conditions. The partial occupation certificate dated :8: :8: :8: 11.2.2003 was issued subject to the following conditions: "1. That the construction of compound wall. 2. That the tax clearance certificate shall be submitted. 3. That the work of 3rd floor shall be restored as per approval plan. 4. The requirement as mentioned in letter dated 12.3.2002 from Chief Officer, M.B.R. & R. Board shall be complied with. 5. That the list of the tenants alongwith their areas to be occupied on respective floor is enclosed herewith as Annexure "A". The occupation to the remaining portion of the building is not considered, since the work of the same is yet to be completed as per this office approved plan." The conditions imposed for issuing the partial occupation certificate dated 28.11.2003 read thus: "1) That the compound wall shall be constructed. 2) That the tax clearance certificate shall be submitted. 3) That the work of 3rd floor shall be restored as per approved plan. 4) That the requirement as mentioned in letter dated 12.6.2002 from Chief Officer, M.B.R. & R. Board shall be complied with. 5) That the collapsible gate in front of lift, without approval, shall be removed, immediately due to file safety measures. :9: :9: :9: 6) That the condition of I.O.D. dated 3.1.2000 and amended approval letter shall be complied with before full O.C. 7) That the temporary structures erected in open space shall be removed immediately due to fire safety measures." To my specific query made to Mr Dhakephalkar, learned senior counsel for defendant no.1, whether defendant no.1 has complied with all the conditions stipulated in the letters dated 11.2.2003 and 28.11.2003, he could not answer the question in affirmative. He did ask for time to file additional affidavit to justify as to why the conditions stipulated in the aforesaid partial occupation certificates could not be complied with. Since the hearing of the motion was almost complete, I refused to grant time to file additional affidavit as prayed and the time was granted only to take instructions on suggestions made in the course of arguments. One of the suggestions made in the course of arguments was whether it is possible for defendant no.1 to secure the amount as mentioned in Item no.6 of the particulars of claim. In any case, even if it is assumed that defendant No.1 has justifiable and valid grounds for not obtaining Occupation Certificate, the fact remains that it has not been issued by the Corporation till this date and that the conditions stipulated in the partial occupation certificates have :10: :10: :10: also been not complied with till this date. 8. Clause 21 of the Development Agreement read with clause 29 makes it clear that till the occupation certificate is obtained it was a responsibility of defendant no.1 to pay all outgoings from the date of commencement of construction of the building including all taxes. I have no hesitation in holding that defendant no.1 is obliged to pay all the property taxes from 1999 to 2005, as reflected at item no.6 of the particulars of claim, and not only till the partial occupation certificate was issued, as contended by Mr Dhakephalkar without prejudice to the rights and contentions of defendant no.1. Admittedly, defendant no.1 has not complied with the conditions stipulated in the partial occupation certificates including payment of taxes, which also seems to be a ground for the corporation to demand taxes from the plaintiff-society, as reflected in the particulars of claim. To secure this amount, in my opinion, appropriate order will have to be issued. 9. Insofar as the amount mentioned at Item no.2 of the particulars of claim is concerned, I am not inclined to pass any order to secure that amount in :11: :11: :11: view of the fact that the said amount is pertaining to the period much prior to the execution of the agreement by the plaintiff-society with defendant no.1. The said amount is due towards the repairs of the old building carried out by the MHADA, which was in occupation of the society before its demolition. It is not covered by clause 29 in the agreement. In the result, this Motion deserves to be partly allowed. 10. I am not, however, inclined to appoint Court Receiver as prayed in the Motion and, in my opinion, an injunction to the following effect, to secure the amount, as mentioned at Item no.6 of the particulars of claim, would meet the ends of justice. Mr. Dhakephalkar, on instructions, submitted that as of today about 20-22 flats in the building have not been disposed of by defendant no.1 and they are still vacant. Defendant no.1 is, therefore, restrained from disposing of ten flats in the building till the disposal of the suit. Defendant no.1 is directed to file an undertaking in this Court within a period of six weeks from today giving particulars of the said ten flats in the building stating that those ten flats shall not be sold till the disposal of the suit. Defendant no.1 shall also state that he shall not create third party rights in respect of those ten flats :12: :12: :12: till the disposal of the suit. It is, however, open for defendant no.1 to furnishes Bank Guarantee of any nationalised Bank or deposit an amount of Rs.1,01,55,215/- in this Court within a period of 10 weeks and if they do so, they shall stand relieved of the undertaking. If defendant no.1 fails to furnish the undertaking as aforestated, Court Receiver, High Court, Bombay shall take possession of 10 vacant flats in the building and shall have all powers under Order 40, Rule 1 of C.P.C. in respect thereof. For a period of 16 weeks from today, defendant no.1 is directed not to sell or create any third party rights in respect of the vacant flats in the said building. The Nootice of Motion is disposed of. No costs. (D.B.Bhosale, J.) :13: :13: :13: HIGH COURT HIGH COURT HIGH COURT ORIGINAL SIDE ORIGINAL SIDE ORIGINAL SIDE NOTICE OF MOTION NO.1890 OF 2006 NOTICE OF MOTION NO.1890 OF 2006 NOTICE OF MOTION NO.1890 OF 2006 IN IN IN SUIT NO.1347 OF 2006 SUIT NO.1347 OF 2006 SUIT NO.1347 OF 2006 Date of Judgment: Date of Judgment: Date of Judgment: 30th April, 2008. 30th April, 2008. 30th April, 2008. For approval and signature For approval and signature For approval and signature THE HON’BLE MR.JUSTICE D.B.BHOSALE. THE HON’BLE MR.JUSTICE D.B.BHOSALE. THE HON’BLE MR.JUSTICE D.B.BHOSALE. 1. Whether Reporters of Local Papers may be allowed to see the judgment? 2. To be referred to the Reporter or not? 3. Whether Their Lordships wish to see the fair copy of the Judgment? 4. Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any Order made thereunder? 5. Whether it is to be circulated to the Civil Judges? 6. Whether the case involves an important question of law and whether a copy of the judgment should be sent to Nagpur Aurangabad or Goa offices?