BOMBAY HIGH COURT HOLDS ORDER OF REGISTRAR OF SOCIETY DISREGARDING CONSENT TERMS AS UNSUSTAINABLE
INTRODUCTION
A Single Judge Bench of the Bombay High Court comprising of Hon’ble Justice Milind N. Jadhav quashed and set aside an Order and Certificate dated 04.03.2022 issued by the Deputy Registrar Co-operative Societies and Competent Authority under the Maharashtra Ownership Flats Act, 1963 (‘MOFA’) in the case of Nahar Seth & Jogani Developers Pvt. Ltd. v. Dy. Registrar Co-operative Societies & Competent Authority and Anr. Writ Petition No. 1014 of 2023, vide Order dated 13.06.2024. The Hon’ble Court observed that the Impugned Order completely disregarded the Consent Letters that were previously executed between the Parties and thus, held the Impugned Order unsustainable in law. The Court also commented on the remedies available to an aggrieved person against an order passed under Section 11(3) of MOFA (‘Promoter to convey title etc., and execute documents according to agreement.‘) by the Competent Authority.
FACTS
The Petitioner, Nahar Seth & Jogani Developers Pvt Ltd, owns a piece of land measuring 11427.20 sq. mtrs. in Andheri, Mumbai (Property). In 1980, the Petitioner constructed buildings on the land on an ownership basis to the purchasers. These Purchasers entered into agreements with the Petitioner, which entitled him to build additional structures on the Property at a later date. The Purchasers formed a Society (Respondent No. 2), which was registered and thereafter, received an occupation certificate from the Municipal Corporation.
After 1985, certain disputes arose between the Petitioner and the Society over the performance of obligations under the abovementioned Agreements. This led to the filing of two cross-suits before the Learned Bombay Civil Court at Dindoshi. After a decade, the Parties decided to compromise and settle the disputes by filing two separate Consent Terms. The Civil Court took on record these Consent Terms and the Consent Decrees were drawn up in both the suit proceedings. The Consent Terms relevant to the present Petition were as follows:
i) The Petitioner agreed to pay a sum of Rs. 18 Lakhs to the Society, indicating full and final settlement of the dispute.
ii) The Petitioner would execute a Deed of Conveyance in favour of the Society.
iii) The Society would execute a perpetual Deed of Lease in respect of a certain area in the name of the Petitioner for 998 years for a nominal fee of Re 1/-.
The Petitioner was entitled to construct a building on the remaining portion of the Property by utilizing the base Floor Space Index (FSI) and additional Transfer of Development Rights (TDR) as available under the law.
The Parties did not go ahead with the Deed of Conveyance or Deed of Lease as per the Consent Decrees. On 16.02.2020, the Society filed an Application under Section 11(3) of MOFA before the Dy. Registrar Co-operative Societies and Competent Authority (Respondent No. 1) and sought deemed conveyance of the entire larger Property (11427.20 sq. m). The Society did not implead the Petitioner in this Application, and he had to file an Impleadment Application to become a party. It was the Petitioner who informed the Competent Authority about the Consent Decrees granted by the Hon’ble Civil Court (Dindoshi).
After hearing both Parties, the Competent Authority, vide Order and Certificate dated 04.03.2022 granted under Section 11 of MOFA, allowed the Application filed by the Society to the extent of 8384.57 sq. mtrs. of the entire undivided area without any sub-division or demarcation.
Aggrieved by the said Order, the Petitioner approached the Hon’ble Bombay High Court in the present matter.
ISSUES
The Hon’ble Court had the following issues in the case at hand:
I) Whether the Petitioner is entitled to a remedy under Article 226 against Section 11 of MOFA, or should he file an appeal before the Civil Court?
II) Whether the Order passed by the Competent Authority is illegal, arbitrary and unsustainable in law?
JUDGMENT AND ANALYSIS
1) Pertaining to the first issue, the Hon’ble Court observed as follows:
i) The Society cited several judgments where the Civil Court was approached for property-related disputes. The Hon’ble High Court distinguished those cases from the present case, stating that all those cases were regarding disputes over the title of a property, unlike the matter at hand, where the title is clear of any ambiguity.
ii) Further, the Court noted that the Parties had agreed to settle the dispute amicably; hence, the Consent Decrees were drawn. In light of this, the Society cannot argue that the Petitioner has to approach the Civil Court again by filing a suit proceeding.
2) Regarding the second issue, the Court observed the following:
i) The Competent Authority was grossly mistaken.
The Hon’ble Court opined that after the Competent Authority was aware of the existing Consent Terms and Consent Decrees, all it had to do was apply its mind to these documents. Instead, the Competent Authority miserably failed to consider the essence of the said documents and passed the Impugned Order. The Court stated that it was unsustainable in law to completely disregard the rights and entitlements agreed upon by the Parties in the Consent Terms, and the Order was in contradiction of the same.
ii) The Hon’ble Court held that there was no need for the Competent Authority to act as the adjudicator while deciding that Application when the Consent Decree existed, which should have been upheld.
3) The Society had malafide intentions.
i) The Hon’ble Court noted that in the Application filed by the Society before the Competent Authority seeking deemed conveyance, there was no mention of the twin cross-suits filed between the Parties and the Consent Terms and Consent Decrees drawn from them. Further, the Petitioner had also not been impleaded in the Application.
ii) The Society remained silent and accepted the Consent Terms for more than 22 years instead of bringing up any grievances before the Court during execution proceedings. Instead, the Society approached the Competent Authority without disclosing the Consent Terms and Consent Decrees. The Hon’ble Court considered these actions as suppression of material information and held the Society in contempt with a malafide intention. The Hon’ble Court further ordered the Society to pay Rs. 50,000/- as exemplary costs to the High Court Library.
iii) Therefore, the Hon’ble Court quashed and set aside the Impugned Order, deemed conveyance, Certificate of Title and all the other actions taken in pursuance of the said Order.
iv) The Hon’ble Court further instructed the Parties to abide by the Consent Terms and Consent Decrees and go ahead with the Deed of Conveyance and the Deed of Lease as agreed within eight weeks of passing the High Court judgment.
CONCLUSION
In this case, the Hon’ble Bombay High Court set aside an Order of the Deputy Registrar Co-operative Societies on the ground that the said Authority erred in ignoring the Consent Letters and Consent Decrees executed by and between the Petitioner and the Housing Society. The Court held that the Competent Authority’s actions were unsustainable in law, emphasizing that the Consent Terms ought to have been upheld. In its own words, the Bombay High Court has always supported the rights of the Co-operative Housing Society and its members. However, the Hon’ble Court was disappointed with the malicious conduct of the Society in the present case and held it in contempt.
Himangi Nagar
5th year
Symbiosis Law School, Hyderabad
Intern
The Indian Lawyer & Allied Services
Edited by
Kartik Khandekar
Senior Associate
The Indian Lawyer & Allied Services
Leave a Reply