Usha Sunder Premises CHS Ltd. v. Nilang Desai & Ors.

(vii) The Plaintiff – Society preferred an Appeal under the

(viii) During the pendency of the Appeal, the Defendant No.4 entered into discussions with Defendant Nos.[1] and 2 for assignment of their leasehold interest. The Plaintiff – Society was represented by Defendant No.3, Mr. Parthiv Sampat (a Managing Committee Member) and Mr. Arun Agarwal (the Treasurer) for confirmation and registration of the Lease Deed dated 6th September, 1980 and for making modifications thereto by removing the restrictions on the area and height of construction contained therein. It is pertinent to note that at that juncture TDR could not be used on the said leased plot as it was in CRZ. However in the expectation that TDR might be available in the future for constructing a building thereon for the residence of all the family members of Defendant No.4, the Defendant No.4 offered to pay Rs.80 lakh to the Plaintiff – Society for such modification / removal of such restriction.

(ix) The Defendant No.3 informed Defendant No.4 that the

Managing Committee of the Plaintiff – Society had on 14th February, 2010 passed a resolution which specifically authorized Defendant No.3 to initiate, negotiate, finalize the Lease Agreement and other documents and to get the same registered as required by law. Defendant No.3 also informed Defendant No.4 that the documents will be subsequently ratified at an Annual General Meeting. The Defendant No.3 showed a copy of the said Resolution (which bore the signatures of the Managing Committee Members) to the Defendant No.4.

(x) The Plaintiff – Society (acting through Defendant No.3 and

Mr. Sampat), and Defendant Nos.[1] and 2 as heirs of the Original Lessee, executed a Deed of Confirmation dated 6th April, 2010 annexing the Lease Deed dated 6th September, 1980 and the same was duly registered. Further, the Plaintiff – Society (represented by Defendant No.3 and the said Parthiv Sampat) and Defendant Nos.[1] and 2 (as legal heirs of the Original Lessee) executed a Deed of Modification of Lease dated 6th April, 2010, which inter alia deleted the height and area restrictions and permitted the Lessee to take the benefit of all areas which are free of FSI (including staircase, lifts etc.) and also provided that if in future, further FSI or TDR became available, it would be shared between the Lessor and Lessee in the ratio of the area occupied by them of the leased plot.

(xi) By an Agreement dated 7th April, 2010 executed between the Plaintiff – Society therein referred as lessors (represented by Defendant No.3 and the said Mr. Sampat) and Defendant No.4 (therein referred to as Intending Lessee), it was recorded that the Intending Lessee was intending to acquire the right, title or interest of the Lessees (Defendant Nos.[1] and 2) and had entered into negotiations with the Lessors and Lessees and pursuant thereto, it had been agreed to execute the Deed of Confirmation of Lease and Deed of Modification between the Plaintiff – Society - Lessors, and Defendant Nos.[1] and 2 – Lessees in consideration of Rs.80 lakh paid by the Intending Lessee i.e. the Defendant No.4.

(xii) A Deed of Assignment was executed between Defendant

Nos.[1] and 2 and Defendant No.4, whereby Defendant Nos. 1 and 2 assigned their right, title or interest under the Deed of Lease to Defendant No.4 for a consideration of Rs.24 Crore. The said Deed of Assignment and Conveyance was duly registered with the office of the Sub-Registrar of Assurances, Mumbai.

(xiii) On 3rd July, 2010, the Plaintiff – Society through their

Advocates addressed letters to Defendant Nos.[1] and 2 stating that the said Lease Deed dated 6th September, 1980 has been duly registered and was valid at all relevant times. Further, that the Deed of Modification had been obtained by fraud and in any event without any authority and void ab intio and is without consideration. Further it is stated that the Plaintiff – Society was cancelling and / or revoking and / or hereby avoiding the said Deed of Modification and that it was “obtained by fraud and is non-est in law”. It was further reiterated that “your rights as a lessee would be covered by the original Deed of Lease dt. 06.09.1980” and not by the said Deed of Modification.

(xiv) On 3rd July, 2010, the Plaintiff – Society also addressed a separate letter to Defendant No.3 confirming that they had granted a lease dated 6th September, 1990 but alleging that by entering into the Deed of Modification, Defendant No.3 had acted without authority and had given away valuable rights of the Society without any consideration flowing to the Society.

(xv) The Defendant No.4 vide their letter dated 23rd September, 2010 responded to the said letter dated 3rd July, 2010 of the Plaintiff – Society pointing out that the allegations made therein of lack of authority and fraud were baseless and false. Defendant No.4 referred to the resolution passed by the Plaintiff – Society at the Managing Committee Meeting held on 14th February, 2010 and that it was accordingly not open to the Plaintiff – Society to turn around and allege that Defendant No.3 / the Secretary of the Society had no authority to execute the agreements.

(xvi) The Plaintiff – Society by its Advocate letter dated 2nd November, 2010 replied to the Defendant No.4’s letter alleging that the “reliance by you on the minutes of the Managing Committee Meeting held on 14th Feb itself is misconceived” and that Defendant No.3 had no authority and the Plaintiff – Society was entitled to cancel the documents. It is pertinent to note that even by this letter the Plaintiff – Society neither returned the Rs.80 lakh received by them, nor offered to return the same to

(xvii) The Plaintiff – Society filed complaint against Defendant

No.3 with the Santacruz Police Station on 24th January, 2011. In the complaint, the Plaintiff – Society admitted that around 24th May, 2010, the Managing Committee had noticed the receipt / credit of Rs.80 lakh on 13th April, 2010 and that on inquiry from Defendant No.3, the Plaintiff – Society had learnt that Defendant No.3 and Parthiv Sampat had executed the above documents. The Plaintiff – Society stated that “Mr. Mahesh Mistry is guilty of offences of cheating, criminal breach of trust and misappropriation of funds, embezzlement and forgery”. It is pertinent to note that no reference was made in the complaint to any grievance or complaint against Defendant Nos.[1] and 2 and Defendant No.4 in this regard. (xviii)The Defendant No.3 through his Advocates letter dated 27th January, 2011 responded to the Plaintiff – Society’s letters dated 3rd July, 2010. It is stated that the Plaintiff – Society Management Committee “had full knowledge of events leading to the execution of the Deed of Modification dated 6th April, 2010” and that the Resolution dated 14th February, 2010 was not forged and a copy thereof was available in the Society’s record.

(xix) The Plaintiff filed the present Suit in June 2011 for cancellation of the Deed of Confirmation dated 6th April, 2010 confirming the lease dated 6th September, 1980; Deed of Modification, Agreement dated 7th April, 2010 and Deed of Assignment and Conveyance and claiming damages for Rs.38,54,000/- for loss of TDR benefits / rights.

(xx) After the filing of the Suit, the Plaintiff – Society took out

(xxi) In 2016 – 17, the Plaintiff – Society sought to apply for interim relief on the ground that Defendant No.4 was proceeding to commence construction. The Defendant No.4 pointed out that no building plans have been approved till then. The said Notice of Motion was disposed of by an Order dated 6th June, 2017 recording that as and when building plans were approved, 30 days notice would be given before taking any steps in the matter.

(xxii) The Defendant No.3 expired on 21st June, 2017. It is pertinent to note that although six years have elapsed the Plaintiff – Society has taken no steps to bring the legal heirs of Defendant No.3 on record.

(xxiii) In 2022, the Defendant No.4 based on the change in law regarding TDR etc. was able to get plans sanctioned for construction of a ground plus nine upper floors building for the personal use of Defendant No.4 and her family members. Accordingly, Notice dated 6th January, 2023 was given by Defendant No.4 to the Plaintiff – Society and it was only thereafter that the Defendant No.4 had commenced construction of the building.

(xxiv) The Plaintiff – Society accordingly filed the present

(xxv) Thereafter, the pleadings in the Interim Application were filed. An Affidavit was filed by the Plaintiff – Society placing on record the alleged Bye – Laws of 2009 and now for the first time seeking to rely on alleged Bye-laws of 2003 on 22nd April, 2025. This was pursuant to an Order passed by this Court on 8th April, 2025 requiring the Plaintiff – Society to place on record the Plaintiff – Society’s Bye – Laws.

(xxvi) Affidavit of Response was filed by Defendant No.4 on

26th April, 2025 in order to show that the Bye – Laws of 2009 as well as Bye – Laws of 2003 cannot be relied upon by the Plaintiff- Society as they contained a number of blanks and were lacking requisite authority. Reliance has been placed by Defendant No.4 on the 1979 bye laws.

(xxvii) During the period of February, 2023 to May 2025, the

Defendant No.4 claims to have completed the entire construction of its building upto 9th floor. It is the case of Defendant No.4 that now only a part of the brick masonry work remains incomplete.

5. Mr. Rashmin Khandekar, the learned Counsel appearing for the Plaintiff – Society has submitted that the Plaintiff – Society had never entered into or executed the impugned documents. He has submitted that Defendant No.3, who was the only Secretary of the Plaintiff had no authority whatsoever to enter into, negotiate, execute, or register any deed affecting the Plaintiff’s rights. He has submitted that the Defendant No.3 had relied upon forged and fabricated resolution dated 14th February, 2010. The meeting in which the resolution is purported to have been passed never took place.

6. Mr. Khandekar has submitted that on 3rd June, 2010, the Defendant No.3 in a meeting of the Plaintiff – Society admitted that he had never been authorized to negotiate or enter into the impugned documents. Then on 26th June, 2010, the Defendant No.3 addressed a letter admitting that he had made Mr. Parthiv Sampat sign the impugned documents without informing him about it. Thereafter, on 24th November, 2010, the Defendant No.3 addressed a letter of admission to the Plaintiff - Society acknowledging that he had committed fraud, exceeded his authority, and misused the position of Secretary. It was only a month later that Defendant No.3 on 20th February, 2011 attempted to retract this admission. He has submitted that this has no evidential value and it is clearly an afterthought since the Plaintiff had lodged criminal complaint dated 24th January, 2011.

7. Mr. Khandekar has submitted that the impugned documents purport to give away the valuable rights of the Plaintiff – Society. He has submitted that the entire transaction was rife with suspicious circumstances which would put the Defendant Nos.1, 2 and 4 to the notice. He has submitted that Defendant No.4 obviously also acted in connivance with Defendant No.3 and therefore, cannot invoke the doctrine of indoor management. He has submitted that it is the Defendant No.4’s own case that all the impugned documents were entered into based on the forged resolution provided by Defendant No.3 to Defendant No.4. He has submitted that any attempt on part of Defendant No.4 to invoke the doctrine of indoor management and claim that it was a bonafide purchaser must be rejected on account of the suspicious circumstances, since she was in active collusion with Defendant No.3.

8. Mr. Khandekar has submitted that it is clear from the above facts that the impugned documents are admittedly a product of fraud and forgery, entered into by Defendant No.3 without authority, which have never been ratified by the Plaintiff - Society in General Body Meeting, and being replete with suspicious circumstances, can never be said to create any rights in favour of Defendant Nos.1, 2 and

4.

9. Mr. Khandekar has submitted that Defendant Nos.[1] and 2 have merely adopted the submissions made by Defendant No.4 while Defendant No.3 has not appeared or made submission whatsoever, thus clearly Defendant No.3 does not dispute the Plaintiff – Society’s case.

10. Mr. Khandekar has submitted that the Defendants’ primary contention that the impugned transaction and impugned documents are protected by virtue of the doctrine of indoor management cannot be invoked in the present case on account of suspicious circumstances. He has submitted that it is well settled that the existence of suspicious circumstances is an exception to the doctrine of indoor management. He has placed reliance on the Supreme Court judgment in MRF Ltd. vs. Manohar Parrikar[1], at paragraph 111 and 113. He has further placed reliance upon the decision of this Court in Shri Kantu Shankar Dessai vs. Sociedade Agricola Dos Guancares De Cuncolim E Veroda[2] at paragraph 8 and the decision of the Delhi High Court in Shashank Bhagat vs. Shefali Varma[3], at paragraphs 21 and 23 in this context. It has been held by the Delhi High Court that a person who has either a constructive or actual notice of any irregularity cannot seek protection under the doctrine of indoor management. The judgment in MRF (Supra) has been followed in the said decision.

11. Mr. Khandekar has submitted that the purported Resolution dated 14th February, 2010 is ex facie suspicious. It purports to be a Managing Committee Resolution authorizing Defendant No.3 and Defendant No.3 alone to initiate, negotiate finalize and register a lease deed which in effect modifies the existing status quo. The purported Resolution bears the sole signature of Defendant No.3 himself. This is not disputed. Thus, in substance, Defendant No.3 purports to have authorized himself. This is obviously suspicious. Further, Defendant Nos.1, 2 and 4 were always aware that Defendant No.3 was only the Secretary of the Plaintiff – Society and that thereby there can be no plausible excuse for Defendant Nos.1, 2 and 4 to not suspect the fact that Defendant No.3 had falsely and by forgery signed as the “Chairman / Treasurer” in the impugned documents as well as the purported Resolution. The fact that Defendant Nos.1, 2 and 4 having solely dealt with Defendant No.3 itself is a suspicious and damning circumstance.

12. Mr. Khandekar has submitted that the transaction in the present case i.e. execution of Deed of Assignment, Confirmation, or Modification mandatorily requires the sanction of the General Body of the Plaintiff - Society. It is not even the Defendants’ case that any such General Body Resolution was ever passed. He has placed reliance upon Bye-Law 155 of the 2003 and 2009 Bye-Laws of the Plaintiff – Society which he submits at the relevant time expressly provided that a Deed of Conveyance can only be executed after approval by the General Body. He has submitted that in view of such ratification never having occurred, a fact well within the Defendants’ knowledge, makes the entire transaction suspicious.

13. Mr. Khandekar has submitted that the Defendants were fully aware that a prior General Body Resolution was a statutory precondition and that each of the impugned documents in fact contain a recital of such resolution being passed at a Special General Body meeting. The date of the Special General Body Meeting is left blank because no such meeting was ever held. He has submitted that the transaction was therefore, illegal and wholly without authority.

14. Mr. Khandekar has submitted that the Deed of Modification dated 6th April, 2010 neither refers to nor annexes the purported Resolution. It makes no mention of any authority vested in Defendant No.3 to execute it on behalf of the Plaintiff – Society. The Agreement dated 6th April, 2010 suffers the same infirmity. It neither refers to a date of the alleged Special General Body Resolution nor encloses the alleged Resolution. The Agreement records the receipt of Rs.80 lakh under the signature block “Chairman / Treasurer”. He has submitted that neither Defendant No.3 nor Mr. Sampat, held either office. He has submitted that Deed of Confirmation dated 6th April, 2010 repeats the same recital but again omits the date and fails to annex or prove any such Resolution. He has submitted that a collective reading of these documents reveals a clear and conscious awareness on the part of the Defendants that a Special General Body Meeting Resolution was indispensable. This circumstance alone suffices to cast a legal obligation on the Defendants to have made due enquiry. Their failure to do so, coupled with the attendant circumstances, indicates collusion and connivance to defraud the Plaintiff – Society and also excludes the applicability of the doctrine of indoor management.

15. Mr. Khandekar has submitted that while Defendant No.4 paid a consideration of Rs.24 Crore to acquire the rights from Defendant Nos.[1] and 2, the Plaintiff – Society was paid only a sum of Rs.80 lakh for giving away its rights. Such a transaction, which sells the assets of the Plaintiff – Society for a song, clearly renders the entire transaction suspicious.

16. Mr. Khandekar has submitted that the Bye-Laws 112, 113, 134, 139, 140, 141, 155 and 115(c) of the 2003 / 2009 Bye- Laws collectively demonstrate that the Secretary was not empowered to initiate, negotiate or finalize conveyance documents. He has submitted that in any event ratification of the General Body of the Plaintiff - Society at Annual General Meeting though being essential, never took place. Defendant No.4 was legally bound to verify such ratification before parting with any consideration. The conduct of the Defendants constitutes a flagrant violation of Section 70 of the MCS Act. No right, title or power can therefore be derived by any of them from the impugned documents or from any strained interpretation of the bye-laws.

17. Mr. Khandekar has submitted that it is Defendant No.4’s case that it entered into the transaction on the basis of the 1979 Bye- Laws in 2010. This itself should have made the transaction suspicious and warranted further enquiry as the bye-laws adopted 31 years ago would reasonably not have been in force in 2010.

18. Mr. Khandekar has submitted that Defendant No.4’s point on indoor management cannot be accepted. This in view of the astoundingly suspicious circumstances under which these transactions were entered into. These Defendants are not entitled to set up the defence of indoor management.

19. Mr. Khandekar has submitted that since the Defendants were aware that General Body Resolution had to be passed, the doctrine cannot be invoked. The Defendants were duty bound to make enquiries with regard to whether the General Body Resolution had been passed. He has submitted that it is not the Defendants’ pleaded case that Defendant No.3 had at any point of time entered into similar contracts or deeds on behalf of the Plaintiff, so as to create even a semblance of ostensible authority. Thus, no such claim of ostensible authority can be made in the present case. He has placed reliance upon judgment of the Delhi High Court in Shashank Bhagat vs. Shefali Varma[4], at paragraphs 14, 15, 16, 18, 21 and 24. The Delhi High Court has excluded the application of the doctrine of indoor management where a person has either constructive or actual notice of an irregularity viz. absence of resolution of the Board of Directors of the Company authorizing the person to enter into the agreement. It has been held that the doctrine would have also little application in cases of fraud and forgery.

20. Mr. Khandekar has also relied upon the judgment of this Court in Themis Medicare Ltd. vs. Timestar (P) Ltd.5, wherein it has been held that the Plaintiff in that case cannot assume ostensible authority of one Samir Shah being in the clear knowledge of the Resolution of 12th February, 1990 by relying on doctrine of indoor management. By the said Resolution dated 12th February, 1990 the Agreements had to be executed by Manjula Shah and Samir Shah under the common seal of the Company.

21. Mr. Khandekar has submitted that the fact that a housing society such as that Plaintiff – Society was intending to give up its rights in its property and forego their light, ventilation and sea view in Mumbai all for a paltry sum of Rs.80 lakh without a General Body Resolution, itself makes the nature of the transaction suspect and raises reasonable apprehension. He has submitted that such transaction is an exception to the doctrine of indoor management. He has placed reliance upon a judgment of a five Judge Bench of the High Court of Australia in Northside Developments Pty Ltd. vs. 5 2025 SCC OnLine Bom 2841., at paragraph 25.

22. Mr. Khandekar has further submitted that the impugned documents being forgeries, as they purport to bind the Plaintiff – Society and are signed on behalf of the Plaintiff – Society by Defendant No.3 without him ever being authorized to do so. In such a case, the doctrine of indoor management is entire inapplicable. He has placed reliance upon the judgment of the Madras High Court in Naguneri Peace Memorial Coop. Urban Bank Ltd. vs. Alamelu Ammal[7], which has reiterated the well settled principle that a document executed without authority amounts to a forgery. He has submitted that it is well settled and trite that in cases where the impugned transaction / documents are the product of fraud and forgery, the doctrine of indoor management can never be invoked as the document itself is a nullity. He has placed reliance upon the judgment of the Madras High Court in Naguneri Peace Memorial Coop. Urban Bank Ltd. (Supra), wherein the Division Bench of the Madras High Court arrived at a finding that the forged and fraudulent document viz. fixed deposit receipts issued by the Secretary of the bank by forging the signatures of two of the directors 6 (1990) HCA 32. 7 (1961) 31 Comp Cas 705. affixed thereupon was void and cannot be protected by the doctrine of indoor management.

23. Mr. Khandekar has submitted that the Delhi High Court in Steel Authority of India Ltd. vs. Punjab and Sind Bank[8], at paragraph 12, has reiterated the same principle viz., a forged and fabricated document is a nullity and how the document came to be a nullity should be irrelevant.

24. Mr. Khandekar has submitted that as the Plaintiff had never authorized Defendant No.3 by way of any General Body Resolution or the relevant bye-laws, the forged impugned documents can never be protected on the basis of the doctrine of indoor management. Since such forged documents are a nullity.

25. Mr. Khandekar has submitted that the execution of the impugned documents being ultra vires the Management Committee and contrary to the statute cannot be protected by indoor management. He has submitted that it is well settled and trite that the General Body of a Co-Operative Society (such as the Plaintiff – Society), is the supreme body and the Managing Committee can only exercise those powers which are conferred upon it by law and nothing more. This is a statutory principle enshrined in Section 72 and 73 of the MCS Act, and can never be parted from. He has placed reliance upon the judgment of this Court in A-1 Cooperative Housing Society Ltd. vs. Laxminarayan Goel[9], at paragraphs 5 and 6. He has also placed reliance upon the judgment of the Division Bench of this Court in Hindurao Balwant Patil vs. Krishnarao Parshuram Patil10, at paragraph 6, wherein it is held that it is clear that supreme body is the General Body and Managing Committee can exercise only those powers which are conferred upon it by law.

26. Mr. Khandekar has submitted even considering the Defendants case at its highest, they rely on the 1979 Bye-Laws to claim that Defendant No.3 had the authority to enter into the impugned documents and create rights in their favour. He has submitted that this contention is fundamentally flawed as by the time the impugned documents were entered into in 2010, the 1979 Bye- Laws had been superseded. He has submitted that the Bye-Laws 2009 were in force, which were preceded by the Bye-Laws of 2003. He has submitted that neither the 2003 Bye-Laws nor the 2009 Bye-Laws 9 1969 Bom LR 71 616.

authorize or grant any power to the Managing Committee or the Secretary to enter into transactions such as those recorded in the impugned documents. He has referred to the Bye-Law 139 (29) which itself remotely touches upon the aspect of executing any agreement relating to immovable property. He has submitted that even this bye-law is inapplicable to the present case as it only authorizes the Managing Committee to formally ‘execute’ i.e. sign a conveyance on behalf of the Plaintiff and nothing more. Infact, this power too is to be read in the context of Bye-Law 155, which relates only to the conveyance of the land and building(s) by the builder to the society and not any other situation.

27. Mr. Khandekar has submitted that on the direction passed by this Court the Plaintiff filed the additional Affidavit placing on record the 2003 and 2009 Bye-Laws of the Plaintiff – Society. He has submitted that there is no question therefore of any doubt or aspersion being cast with respect to the fact that the said bye-laws were indeed adopted by the Plaintiff in 2003 itself. Therefore, as on the date on which the impugned illegal transactions were concluded, the said Bye-Laws at the least were very much in operation and the Defendants could not have simply believed in their whim that the 1979 Bye-Laws would continue to operate. He has submitted that most importantly, the language of the 2003 and 2009 Bye-Laws are identical, particularly with reference to the relevant bye-laws and therefore, it makes no difference insofar as the Plaintiff’s case is concerned.

28. Mr. Khandekar has submitted that a reading of the 1979 Bye-Laws in fact makes it clear that no such power to enter into the impugned documents or pass the purported Resolution were infact conferred. He has referred to Bye-Law G.118(ii) (p) which provides the Managing Committee to enter into all contracts for the society and settle the terms thereof provided in case of contracts for purchase of a plot or plots, for sale of the housing’s site or sites, for construction of buildings or tenements, the Managing Committee shall not enter into any agreements without the prior approval of the General Body. He has submitted that the impugned document are obviously contracts for the construction of buildings or tenements, since admittedly even as per Defendant No.4 the transaction and impugned documents were entered into for removing the restrictions on the area and height of construction in the expectation that Defendant No.4 might in the future be able to construct a building as residence for her family members. He has accordingly submitted that the 1979 Bye-Laws are also entirely inapplicable to the present case and cannot assist the Defendants whatsoever.

29. Mr. Khandekar has submitted that the action of Defendant No.3 entering into the impugned documents is clearly ultra vires the powers of the Managing Committee and is in breach of Section 73 of the MCS Act, which provides that the Managing Committee shall exercise such powers which may be conferred by the MCS Act, the rules framed thereunder or the bye-laws. He has submitted that an ultra vires act which is contrary to the statute cannot be saved by invoking the doctrine of indoor management. He has placed reliance upon the judgment of this court in Nirad Amilal Mehta vs. Genelec Limited11, at paragraphs 12 and 13 in this context.

30. Mr. Khandekar has submitted that Defendant No.3 never had any ostensible authority by conduct to enter into the impugned documents. He has submitted that it is not even the Defendants’ case that Defendant No.3 entered into such agreements and deeds routinely or any other time previously on behalf of the Plaintiff. He has submitted that it was incorrectly sought to be argued by

Defendant No.4 that because there was a history of Defendant No.3 having acted for the Plaintiff – Society previously and therefore, Defendant No.3 could have been said to have had ostensible authority. This argument is not only incorrect but also misleading. There is nothing on record to show that Defendant No.3 was routinely entering into transactions by which valuable property vested in the Plaintiff could have been divested. He has submitted that this argument of Defendant No.4 in this regard is therefore, liable to be rejected at the threshold itself.

31. Mr. Khandekar has distinguished the judgment cited by the Defendants on indoor management and he has submitted that these are inapplicable. He has submitted that the judgments relied upon by the Plaintiff – Society were in cases where the invocation of the doctrine of indoor management was allowed as there were no unique, suspicious circumstances as in the present circumstances. He has submitted that the judgment in Maharashtra Film Stage and Cultural Development Corporation Ltd. vs. Multi Screen Media Pvt. Ltd12 is entirely inapplicable to the facts of the present case as unlike the present case, there was an express delegation to the Managing

32. Mr. Khandekar has submitted that to accept the Defendants’ case would be an over extensive application of indoor management which facilitates fraud at the expense of the innocent. He has relied upon the judgment of a five Judge Bench of the High Court of Australia in Northside Developments Pty Ltd. (Supra) at paragraph 34 in this context.

33. Mr. Khandekar has submitted that the impugned documents could never confer any rights onto the Defendants and the Plaintiff – Society has a strong prima facie case since Defendant No.3 has entered into the impugned documents without any authority from the Plaintiff – Society and has forged and fabricated several documents ultimately affecting the innocent members of the Plaintiff – Society.

34. Mr. Khandekar has submitted that this Court can and has granted interim relief in such cases where authority to enter into and execute the Agreement is challenged. He has submitted that this Court infact has upheld and granted interim relief whilst observing that it is the case of the Defendants which would have to be tested at trial. He has placed reliance upon the judgment of this Court in Shri Kantu Shankar Dessai vs. Sociedade Agricola Dos Guancares De Cuncolim E Veroda (Supra). He has submitted that in the said judgment, this Court upheld the grant of interim relief to a Society where such similar questions of authority and indoor management were raised and an identical argument was made by the Defendants. He has in particular placed reliance on paragraphs 7 – 12 of the said judgment. He has further relied upon Nirad Amilal Mehta (Supra), at paragraphs 13 and 15, wherein this Court had granted an interim injunction and held that it would instead be the Defendants’ case which would have to await trial.

35. Mr. Khandekar has submitted that delay in the hearing of the Interim Application cannot disentitle the Plaintiff from the grant of interim reliefs and the pendente lite construction by Defendant No.4 has been at its own peril. He has submitted that the Plaintiff – Society did everything possible on its part. The Interim Application was also listed on at least 36 occasions. He has submitted that the Plaintiff – Society cannot be faulted as sought to be done by the Defendants. He has submitted that it is well settled and trite that the delay in the hearing of an Interim Application can never disentitle a party from the grant of reliefs in its favour. He has placed reliance on the judgment of this Court in Lokhandwala Construction Industries Pvt. Ltd. vs. Lokhandwala Infrastructure Pvt. Ltd.14, at paragraphs 7 and 8 in this context.

36. Mr. Khandekar has submitted that the prayers sought in the Interim Application are live and can be granted despite the continuing construction. He has submitted that the Plaintiff – Society has moved with utmost dispatch and cannot be faulted on this ground. He has submitted that it is Defendant No.4’s own contention even today that, some internal works are still ongoing on the leased property. He has referred to the prayers in the Interim Application and submit that they are still alive. He has submitted that continued possession, construction and attempt to seek permissions for the construction (which are still pending) are all acts in furtherance of the impugned documents. Thus, the prayers can obviously still be granted.

37. Mr. Khandekar has submitted that balance of convenience and requirement to prevent irreparable injury overwhelmingly favour the Plaintiff. Unless restrained, the Defendants will continue to act upon the impugned documents that cannot as a matter of law bind the Plaintiff, including further development, alienation and encumbrance of the Plaintiff’s property thereby, resulting in irreparable injury to the Plaintiff. He has submitted that the Plaintiff has therefore, established a strong prima facie case, and satisfied the test of balance of convenience and irreparable injury. He has accordingly prayed for this Court be pleased to grant interim reliefs as prayed for in terms of prayer Clauses (a) to (d).

38. Mr. Aspi Chinoy, the learned Senior Counsel appearing for Defendant No.4 has submitted that Defendant No.4 is entitled to rely on the doctrine of indoor management. He has submitted that from 2002 right till 2010 the Defendant No.3 was the Plaintiff – Society’s Secretary and was according to the Plaintiff – Society “in charge of handling all the affairs of the Plaintiff – Society”.

39. Mr. Chinoy has submitted that during the negotiations, prior to entering into the documents / transaction of 2010, the Defendant No.3 had shown the Defendant Nos.1, 2 and 4, a Managing Committee Resolution dated 14th February, 2010 signed by the Managing Committee Members by which it was resolved that the Lease Deed of the leased property in the Society’s plot may be modified and / or amended and confirmed suitably to transfer to an intending lessee and that Defendant No.3 was authorized to initiate, negotiate, finalize the lease agreement and other documents and to get the same registered as required by law.

40. Mr. Chinoy has submitted that a copy of the Plaintiff – Society Bye – Laws of 1979, which bore the stamp of the Assistant Managing Committee to enter into all contracts for the Society, except for contracts for the purchase of plots, for sale of housing sites and for construction of building or tenements. He has submitted that under the Plaintiff – Society’s Bye – Laws of 1979 and in particular Bye – Law G.1.18(ii) (p), the Managing Committee was entitled to execute the said documents / enter into the said contracts / documents, without any prior General Body Resolution.

41. Mr. Chinoy has submitted that under the said Managing Committee Resolution dated 14th February, 2010, which was signed by the Managing Committee Members, the Managing Committee had resolved that the Lease Deed of the leased property in the Society’s plot may be modified and/ or amended and confirmed suitably to transfer to an intending lessee and that Defendant No 3 was authorized to initiate, negotiate and finalize the Lease Deed and other documents and register the same. He has submitted that although the Resolution provided that “all such documents and proceedings will be ratified in an Annual General Meeting”, that pertained only to a subsequent “ratification”.

42. Mr. Chinoy has submitted that in these circumstances, the Defendant Nos. 1, 2 and 4 are clearly entitled to rely on the authority of the Defendant No. 3 to enter into and execute the said documents and the Defendant No. 4 was not required to make any further inquiry into the veracity and genuineness of the signed Resolution dated 14th February, 2010 or of the Society’s Bye – Laws of 1979.

43. Mr. Chinoy has submitted that there were no “suspicious circumstances” which would require further inquiry by the Defendant Nos. 1, 2 and 4 and displace the principle of indoor management.

44. Mr. Chinoy has submitted that the Bye - Laws produced by Defendant No.3 expressly authorised the Managing Committee to execute / enter into contracts on behalf of the Society, except certain specified contracts and the Managing Committee Resolution signed by the Members authorized Defendant No. 3 to negotiate, finalize and register a document modifying and / or amending the lease deed and other documents. Accordingly the absence of a General Body Resolution / decision could in the circumstances not be considered as a “ suspicious circumstance”.

45. Mr. Chinoy has referred to the reference to a General Body Resolution in a General Meeting in the execution pages of the impugned documents. The date of which has been left blank. He has submitted that this was in the circumstances of the bye - laws authorizing the Managing Committee and not requiring a General Body Resolution. Further, the Managing Committee Resolution dated 14th February, 2010 was treated by all parties as merely a proforma. Accordingly, this was not a suspicious circumstance which should have triggered a further inquiry. He has submitted that in fact the stipulation in the Resolution dated 14th February, 2010 of subsequent ratification of the transaction / documents executed by the General Body, negated any requirement of a prior authorization by a General Body Resolution.

46. Mr. Chinoy has submitted that the Division Bench judgment of the Court in the case of Kantu Shankar Dessai (Supra) is an answer to the Plaintiff – Society’s claim for interim relief. In that case, the President of the Society had executed a lease deed of its property. The Charter of the Society provided that the President could act on behalf of the Society, the only restriction being that the President should not act on important subjects without the resolution of the Administrative body of the Society. The President’s authority to execute the lease deed on behalf of the Society was challenged by the Society in the Suit, on the ground that there was in fact no such resolution of the Society’s Administrative body authorizing the President to execute the Lease Deed. It was also contended that the consideration fixed by the President was too low. The Court had rejected this challenge to the execution of the lease deed. He has placed reliance upon paragraphs 7, 9 and 11 in this context. At paragraph 7, the Division Bench held that, “… but once it is found that there is no restriction on the authority of the person to execute the act in such constitution, there is no further duty on the person to enquire into the internal management of the society or the corporate body and assess whether or not due procedure has been followed for executing the act in accordance with the rules of management applicable to the society or corporate body, as the case may be.”

47. Mr. Chinoy has also relied upon the judgment of the Division Bench in Maharashtra Film Stage and Cultural Development Corporation Ltd. vs. Multi Screen Media Pvt. Ltd.15. He has in particular relied upon paragraphs 10, 11 and 12 of the said judgment. He has submitted that this judgment holds that the requirement of subsequent approval or ratification by the General Body did not affect the authority to enter into the transaction / execute the documents. In that case the agreement was entered into by the Managing Director was subject to approval of the competent authority and that the competent authority had not approved the Managing Directors acts. This Court had negated this claim.

48. Mr. Chinoy has submitted that Defendant No.4 was entitled to proceed on the basis that the documents / transaction would be subsequently ratified / approved. Further, Mr. Parthiv Sampat (the Managing Committee Member) who had executed the documents along with Defendant No.3 was not arrayed as a Defendant. This clearly affected the merits / bonafides of the Plaintiff – Society’s claim.

49. Mr. Chinoy has distinguished judgment relied upon by the Plaintiff – Society and submitted that judgments do not support the Plaintiff – Society’s claim for interim relief.

50. Mr. Chinoy has submitted that the Plaintiff – Society’s inaction viz. failure to apply for ad-interim reliefs from 2023 i.e. for a period of two years and the fact that the building of nine floors has been completed in this period (except for some interiors and finishing) establishes that the balance of convenience requires interim relief to be refused. He has submitted that having regard to the Plaintiff’s inaction and the fact that the construction of the building’s structure has today been completed, prayer (b) of the Interim Application which seeks an injunction restraining the Defendants from carrying out any development and / or construction activity or constructing any building or structure on the demised property has in any event become infructuous.

51. Mr. Chinoy has submitted that the judgment in Lokhandwala Infrastructure P. Ltd. (Supra) relied on by the Plaintiffs is not apposite / relevant for the present case. Firstly, that pertained to a case of delay before filing the suit. Secondly that was not a case where during the delay period the situation had changed by completion of construction of the impugned structure. Thirdly that judgment was based on the principle that if adoption of a mark was not genuine or honest / was dishonest at its inception, “mere delay in bringing an action is insufficient to defeat a claim for an injunction”.

52. Mr. Chinoy has submitted that prayer Clause (a) of the Interim Application is really not a prayer for interim reliefs as it in effect seeks final reliefs.

53. Mr Chinoy has submitted that the prayer Clause (d) of the Interim Application is ex-facie not maintainable as the Defendant Nos.[1] and 2 as lessees and Defendant No.4 as assignees of the lessees, are fully entitled to enter and remain upon the demised properties.

54. Further, instead of granting prayer Clause (c), the Plaintiff would be more than adequately protected by the doctrine of lis pendens.

55. Mr. Chinoy has submitted that the Plaintiff – Society has not made any prima facie case for the grant of interim reliefs and further that the balance of convenience is also not in favour of the grant of any interim reliefs.

56. Mr. Kunal Mehta, the learned Counsel appearing for the Defendant Nos.1(a) and 1(b) has supported the submissions of Mr. Chinoy on behalf of the Defendant No.4. He has submitted that although no reliefs have been sought against this Defendant in the Interim Application, certain aspects of the matter need to be highlighted by this Defendant in order to demonstrate that the Defendants actions have been in consonance with their contractual rights and the allegations made against them are unfounded. He has submitted that the fact that the Plaintiff – Society and Defendant Nos.[1] and 2 would execute and register a Deed of Confirmation of the Lease Deed is in the natural and ordinary course of conduct. Any bonafide lessor who has not co-operated in registration of a lease deed would subsequently enter into and register a Deed of Confirmation. There is nothing unusual about this act. He has submitted that as far as the Deed of Modification of lease; the Agreement dated 7th April, 2010 and Deed of Assignment dated 7th April, 2010 are concerned, this Defendant submits that considering the fact that the original Lease Deed itself permitted an assignment of the leasehold rights and parting with the possession of the leased property without seeking prior consent of the Plaintiff - Society, there was nothing unusual in the transaction per-se. No part of it could be stated to be unnatural and not in the ordinary course of conduct.

57. Mr. Mehta has also submitted that under the Lease Deed, the Plaintiff - Society was entitled to receive Re.1/- per year. The bargain struck between the Plaintiff - Society and Defendant No.4 was that in lieu of the Deed of Confirmation and Deed of Modification of the Lease deed, the Plaintiff - Society would receive a sum of Rs.80 lakh. He has submitted that commercially also, when one compares the earlier entitlement of the Plaintiff – Society with what it received under the Agreement dated 7th April, 2010, it becomes apparent that there is nothing unconscionable or unusual in this bargain.

58. Mr. Mehta has submitted that this Defendant had reasonably believed that Defendant No.3 had the actual and ostensible authority to execute the Suit documents. This based upon Defendant No.4’s representation that he had negotiated with the Plaintiff - Society who was agreeable to execute the documents in terms required by Defendant No.4 and this Defendant was informed by Defendant No.4 that the Plaintiff – Society had passed a resolution dated 14th February, 2010 coupled with the fact that Defendant No.3 was the Secretary of the Plaintiff – Society. He has submitted that as a lessee of the Plaintiff - Society, when confronted with such a situation, this Defendant is not expected to do anything more in relation to satisfying himself of the Plaintiff - Society’s authority to enter into the transaction. He has submitted that the doctrine of indoor management plainly applies. This Defendant has also denied the allegations of forgery and fabrication as well as collusion in paragraph 15 of the Written Statement.

59. Mr. Mehta has submitted that whilst no relief has been sought against this Defendant in the Interim Application, this court must test the Plaintiff’s case in the context of the fundamental aspect of the original Lease Deed itself permitting an assignment of the leasehold rights without requiring the Plaintiff - Society’s permission. When the transaction in its entirety is looked at from this perspective i.e. the Plaintiff - Society having accepted a sum of Rs.80 lakhs as opposed to receiving Re.1/- every year, it will become all the more apparent that the transaction which is challenged in the present Suit has been entered in the ordinary course and there is no reason at all to interfere with it. He has submitted that accordingly, the Interim Application is liable to be dismissed.

60. Having considered the submissions, the main issue which arises for determination is whether the Defendants are entitled to rely on the doctrine of “indoor management”. It is the Plaintiff’s contention that there were “suspicious circumstances”, which would have put the Defendant Nos. 1, 2 and 4 on notice of the Defendant No. 3 and the said Parthiv Sampat’s lack of authority to enter into or execute the impugned documents.

61. It is the contention of the Plaintiff – Society that Defendant No. 3 was only the Secretary of the Plaintiff – Society and had no authority whatsoever to enter into, negotiate, execute, or register any Deed affecting the Plaintiff – Society’s rights. This contention overlooks the fact that from 2002 right till 2010, the Defendant No. 3 was the Plaintiff – Society’s Secretary and was according to the Plaintiff – Society, “in charge of handling all the affairs of the Plaintiff Society” (Paragraph 44 of the Plaint). Further, during the negotiations, prior to entering into the impugned documents, the Defendant No. 3 had shown the Defendant Nos. 1, 2 and 4 a Managing Committee Resolution dated 14th February 2010, signed by the Defendant No.3 claiming to be authorized by the Managing Committee and wherein it was resolved that the Lease Deed of the leased property in the Plaintiff – Society’s plot may be modified and / or amended and confirmed suitably to transfer to the intending lessee ( Defendant No. 4 herein). Defendant No. 3 had also represented to Defendant Nos. 1, 2 and 4 that he had the authority to initiate, negotiate, finalize the Lease Agreement and other documents and to have the same registered as required by law.

62. Although it is the contention of the Plaintiff that the aforementioned Managing Committee Resolution dated 14th February 2010 was a “forged Resolution”, as it had been signed by the Defendant No. 3 alone authorising himself under “fictitious” “Chairman / Treasurer” designation which he never held, and using a fabricated rubber stamp that was never issued by the Plaintiff. Prima facie it does appear that the Defendant No. 4 prior to entering into the impugned documents, proceeded on the premise that the Defendant No. 3 had the authority to represent the Managing Committee Members in entering into and/or executing the impugned documents. Further, the said Parthiv Sampat (a Managing Committee member) had along with Defendant No.3 signed the impugned documents and this fact also appears to have weighed with the Defendant No. 4 in her belief that the Defendant No. 3 as well as the said Parthiv Sampat did have the authority to represent the Managing Committee in entering into and executing the impugned documents.

63. The Defendant No. 4 has relied upon the Plaintiff - Society’s Bye-Laws of 1979, which were the only Bye-laws which bore the stamp of Assistant Registrar on each page. The subsequent Bye-Laws of 2003 and 2009 prima facie appear on the face of it to lack the necessary authorization. Under Bye-Laws G.1.18 (ii) (p) of 1979 Bye-Laws, the Managing Committee was authorised to enter into all contracts for the Society, except for contracts for the purchase of plots, for sale of housing sites and construction of buildings or tenements. Considering that the impugned documents were executed to assign the leasehold interest of Defendant Nos. 1 and 2 in favour of Defendant No. 4 with the consent of the Managing Committee of the Plaintiff’s Society, this would not fall within the exceptions of the said Bye-law G.1.18(ii)(p).

64. Further, under the Managing Committee Resolution dated 14th February 2010, the Managing Committee resolved that the Lease Deed of the leased property in the Society’s plot may be modified and/or amended and confirmed suitably to transfer to Defendant No. 4 as intending lessee and that Defendant No. 3 was authorised to initiate, negotiate and finalise the Lease Deed and other documents and register the same.

65. Thus, the Defendant Nos. 1, 2 and 4 were in my prima facie view, entitled to rely on the authority of Defendant No. 3 to enter into and execute the impugned documents and the Defendant No. 4 was not required to make any further inquiry into the veracity and genuineness of the signed Resolution dated 14th February 2010 or of the Society’s Bye-laws of 1979. I am also of the prima facie view that there were no “suspicious circumstances” which would require a further inquiry by the Defendant Nos. 1, 2 and 4 so as to displace the principle of indoor management.

66. The Plaintiff has relied upon the fact that the impugned documents referred to a Resolution passed in the General Body Meeting of the Society, but the date of the meeting was left blank and which it submits supports its contention that there was no such General Body Meeting. Further, the terms of the Managing Committee Resolution dated 14th February 2010 stipulated a ratification of the impugned documents in a General Body Meeting, but there has in fact been, no such ratification. These according to the Plaintiff are inter alia the suspicious circumstances on account of which the Defendant Nos. 1, 2 and 4 could not rely upon the doctrine indoor management of the Plaintiff – Society.

67. Although, the date of the General Meeting at which the Resolution is alleged to have been passed authorising the Defendant No. 3 and Parthiv Sampat to execute the impugned documents is blank, this fact is not to be looked at in isolation, but is also to be considered having due regard to the said 1979 Bye-Laws authorising the Managing Committee and not requiring a General Body Resolution and that the Managing Committee Resolution dated 14th February 2010 was treated by all the parties as merely a Proforma. Accordingly, I am of the prima facie view that there are no suspicious circumstances which would have triggered a further inquiry. The further fact that the stipulation in the Resolution dated 14th February 2010, of subsequent ratification of the transaction / documents executed by the General Body, negated the requirement of a prior authorisation by a General Body.

68. It has been held by the Division Bench of this Court in Kantu Shankar Dessai Vs. Sociedade Agricola Dos Gauncares De Cuncolim E Veroda (supra) relied upon by the Defendant No. 4, that once it is held that the act of the Society in creating a lease in favour of the Defendants is not ultra vires, the question of authority of any particular office bearer of the Society to act on the Society’s behalf in that respect, is really a matter of its internal management. Further, once it is found that there is no restriction on the authority of the person to execute the act in such constitution, there is no further duty on the person to enquire into the internal management of the society or the corporate body and assess whether or not due procedure has been followed for executing the act in accordance with the rules of management applicable to the society or corporate body, as the case may be (Paragraph 7 of the said Judgment).

69. The Plaintiff has sought to distinguish this judgment on facts viz. the Court only allowed the invocation of doctrine of indoor management, since it was found that a number of similar leases had been previously created by the Society. This overlooks the principle laid down in the said judgment that the question of authority of an office bearer to act on behalf of the Society is a matter of internal management particularly once the act of the Society in creating the lease in favour of the Defendants is not ultra vires. Having arrived at the finding that the Bye-laws of 1979, which are the only Bye-Laws duly authorized and relevant in the present case, authorises the Managing Committee to enter into and / or execute the impugned documents, without any prior General Body Resolution, the ratio of the said decision is apposite.

70. Further, this view has also been taken by the Division Bench of this Court in Maharashtra Film Stage and Cultural Development Corporation Ltd. (supra), wherein it has been held that in the event of express delegation of power to the Managing Director to enter into contracts and documents, though this was subject to the approval of the Competent Authority, the delegation did not stipulate prior approval. The doctrine of indoor management must necessarily apply in such a situation. The Respondent therein was entitled to proceed on the basis that the Managing Director with whom the contract was executed, was authorized to enter into the contract. This judgment has clearly held that the requirement of subsequent approval or ratification of General Body, does not affect the authority to enter into the transaction / execute the documents.

71. In the present case, Defendant No. 4 was entitled to proceed on the basis that the documents / transaction would be subsequently ratified / approved. Further, the said Parthiv Sampat had also executed the impugned documents along with Defendant No. 3, but was not arrayed as Defendant, and this in my prima facie view, clearly affects the merits / bonafides of the Plaintiff’s claim.

72. The judgment of this Court in Themis Medicare Ltd. (supra), has been relied upon by the Plaintiff – Society to contend that the judgment in Kantu Shankar Dessai (Supra) has been distinguished and found inapplicable where the documents refer to a resolution and the parties being commercially savy cannot claim to have acted on ostensible authority. The facts in that case are distinguishable. The execution clause made a specific reference to a Resolution of 12th February 1990 and the Plaintiff – Society was aware of the said Resolution which provided that the Agreements have to be executed by one Manjula Shah and one Samir Shah under the common seal of the Company. It was accordingly, held that the Plaintiff – Society being a corporate entity manned with corporate experts including company secretary, legal advisers, etc. are not expected to enter into the contracts on presumption of ostensible authority. This in view of the Agreement for Sale having been executed by both Manjula Shah and Samir Shah, the Plaintiff – Society could not assume ostensible authority of Samir Shah being in clear knowledge of the Resolution of 12th February 1990, by relying on the doctrine of indoor management. It is the Plaintiff’s submission that there were no suspicious circumstances in that case and the Court found that the Society regularly entered into similar transactions.

73. I do not find any merit in this distinction, considering that I am of the prima facie view that in the present case also, there are no suspicious circumstances, as the Managing Committee Resolution dated 14th February 2010 had conferred the authority on Defendant No.3 which was also backed up by the Bye-laws of 1979 which authorized the Managing Committee to initiate, negotiate, and finalize the impugned documents and register the same.

74. The Plaintiff – Society has contended that to accept the Defendants’ case on indoor management would be an over extensive application of indoor management, which facilitates fraud at the expense of the innocent. I do not find any merit in this contention, considering that the issue of fraud has to be proved by the Plaintiff – Society at the trial of the Suit, and at this prima facie stage, there appears to be no fraud in the execution of the impugned documents, considering the fact that the Defendant No. 3 had been conferred authority to execute the impugned documents by the said Managing Committee Resolution dated 14th February 2010 backed by the said Bye-Laws of 1979.

75. The Defendant Nos.1(a) and 1(b) have also supported the case of the Defendant No.4. There is much merit in their submission that there was nothing unusual in the transaction per se considering that the original lease deed itself permitted an assignment of the leasehold rights without requiring the Plaintiff - Society’s permission. Further, under the impugned transaction if looked at in its entirety, the Plaintiff - Society would receive a sum of Rs.80 lakh as opposed to receiving Re.1/- every year. This makes it all the more apparent that the impugned transaction has been entered into in the ordinary course and there is no reason at all to interfere with it.

76. The judgments relied upon by the Plaintiff do not support the Plaintiff’s claim for interim relief. The Plaintiff has relied upon the judgment of the Supreme Court in MRF Ltd. Vs. Manohar Parrikar (supra). This was a final decision dealing with the case where the Court held that the facts disclosed a suspicion of irregularity / suspicious circumstances, which invited inquiry and negated the doctrine of indoor management. It was a case where a Notification had been issued by the Power Minister without complying with the provisions of the Business Rules and in such circumstances, the doctrine of indoor management did not apply.

77. This can be contrasted with the present case where Defendant No. 3, who was the Secretary of the Plaintiff – Society, had been in charge of handling all the affairs of the Plaintiff – Society for the past 8 to 9 years prior to his having entered into the impugned documents. This in my prima facie view, negates suspicious circumstances, which could have let to further inquiry.

78. The judgment relied upon by the Plaintiff, namely A-1 Co.Op. Hsg. Society Vs. Laxminarayan Goel (supra) is a judgment which is not relevant to the issue arising in the case of indoor management, as it is the case where the Court held that the General Body of a Society has overriding powers over the actions of the Managing Committee of which there can be no quarrel.

79. Further, the judgment relied upon by the Plaintiff – Society viz. Nirad A Mehta Vs Genelec Ltd. (supra) is a case where there was a clear breach of the provisions of a statute, i.e. Section 293 of the Companies Act and in this context, it was held that the doctrine of indoor management cannot apply. It is not the Plaintiff’s case here that the execution of the impugned documents were in breach of the provisions of a statute.

80. The Plaintiff – Society in Rejoinder has relied upon the interim order dated 13th January 2009 of the Single Bench of this Court in Appeal from Order No. 66 of 2008 viz. Kantu Shankar Dessai vs. Sociedade Agricole. The Suit filed in that case has finally resulted in the Division Bench judgment of the Court, which has been relied upon by Defendant No.4, and by which the Division Bench rejected Kantu Dessai’s Appeal against the interim order granted. There is nothing in the interim order, which can in any manner affect or detract the final judgment dismissing the Suit and affirming the defence of indoor management and the principles applicable to the same.

81. The judgment relied upon by the Plaintiff – Society viz. Naguneri Peace Memorial Co.Op Bank (supra) is a judgment of the Madras High Court, which deals with the law of agency and the law of master and servant and there is no consideration of the principles of the law of indoor management and hence, is not relevant to the present case.

82. The aspect of delay on the part of the Plaintiff – Society to apply for ad-interim relief from January 2023 i.e. when Defendant No. 4 had given notice that her building plans had been approved and that she intended to start construction and which resulted in the present Interim Application in February 2023, is a factor which merits consideration. Although it is the case of the Plaintiff that on several occasions the Interim Application had been listed and was not taken up by this Court on account of paucity of time, the Plaintiff – Society could have shown urgency in applying for ad-interim orders, given the fact that this Court had directed the Defendant No. 4 to give notice of intention to start construction, which as aforementioned had been duly given.

83. The Plaintiff by not applying for or obtaining adinterim relief, has resulted in the Defendant No. 4 having constructed the entire building structure i.e. a nine floor building during the 2.[5] year period i.e. February 2023 to August 2025 and what remains is the interiors and finishing of the building. Thus, Prayer clause (b) of the Interim Application which seeks an injunction restraining the Defendants from carrying out any development and/or construction activity or constructing any building or structure on the demised property has become infructuous.

84. The judgment relied upon by the Plaintiff in Lokhandwala Construction Industries (supra) is a judgment in an Intellectual Property case, which is based on the principle that where the adoption of a mark is not genuine or honest / dishonest at its inception, mere delay in bringing an action is insufficient to defeat a claim for an injunction. This case can clearly be distinguished from the present case, particularly since the delay has resulted in a situation where the Defendant No. 4 has completed construction of the building structure and it would be to the grave prejudice of Defendant No. 4, if ad-interim / interim relief is granted at this stage.

85. The other judgment relied upon by the Plaintiff, viz. Nirad A Mehta Vs. Genelec Ltd. (supra), is a case where this Court had granted an interim injunction and held that it would instead be the Defendants’ case, which would have to await trial. This case is distinguishable on facts. In that case, it was held by this Court that the fact of Defendant No. 5 having knowledge of the illegality was proven at the interim stage. Further, the issue whether the Defendant No. 5 had made appropriate inquiries before purchase of the property was held to be a question of fact which can only be determined at the stage of trial. It was in this context, that the Plaintiff was granted injunction restraining the Defendants from selling, transferring, alienating, developing or parting with the possession of the suit property. This judgment cannot be relied upon by the Plaintiff – Society to contend that this Court has always granted interim relief in cases even where indoor management is contended. Further, it cannot be contended by them based on the said judgment that in the present case it would be the defence of the Defendants which would await trial and in the meanwhile, interim relief can be granted.

86. The Plaintiff has contended that the prayers sought for in the Interim Application are alive and can be granted despite the Defendant No.4 having continued its construction. I find no merit in this contention, particularly since the entire building structure has been constructed, other than interiors and finishing. Accordingly, Prayer clause (b) of the Interim Application has become infructuous. Whereas, Prayer Clause (a) is in effect a final prayer and not an interim prayer and cannot be granted at the interim stage, particularly when the issue as to whether the impugned documents have been fraudulently entered into would require to be proved at the trial of the Suit.

87. In so far as Prayer Clause (c), in my view, the Plaintiff – Society is adequately protected by doctrine of lis pendens and thus, it is not necessary to grant this prayer.

88. Prayer Clause (d) would not be maintainable as the Defendant Nos.[1] and 2 as lessees and Defendant No.4 as assignees of the lessees, are fully entitled to enter and remain upon the demised properties and / or part thereof.

89. Accordingly, the Plaintiff – Society has not made out a prima facie case for grant of any interim reliefs and the balance of convenience is also against them.

90. The Interim Application is accordingly dismissed. There shall be no order as to costs. [ R.I. CHAGLA J. ]