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ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS INHERENT AND EXTRA ORDINARY JURISDICTION
WRIT PETITION NO. 2749 OF 2022
Garodia Co-operative Housing Society Ltd. )
Through its Hon. Secretary )
Vicky Narendra Pal Joshi, Age 45 years )
Having address at Plot No. 149/156, )
Garodia Nagar, Ghatkopar (East), )
Mumbai – 400 077 ) ….. Petitioner
Vs.
1. District Deputy Registrar Co-operative Society )
(2), Eastern Suburbs, Mumbai )
Room No. 201, 2nd Floor, )
Konkan Bhavan, CBD Belapur, )
Navi Mumbai – 400 614. )
2. Parmeshwaridevi Garodia Trust )
Plot No. 149/156, )
Garodia Nagar, Ghatkopar (East) )
Mumbai – 400 077 )
3. Maheshkumar Gordhandas Garodia, )
Trustee and Beneficiary of Parameshwaridevi )
Garodia Trust, )
Plot no. 149/156, Garodia Nagar, )
Ghatkopar (East), Mumbai – 400 077. ) ….. Respondents
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Mr. Vipul J. Shah for the Petitioner.
Mr. Hemant Haryan, AGP for State-Respondent No.1.
PRAVINRAO
Nankani and Associates for Respondent No.3.
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JUDGMENT
1. The present Writ Petition impugns an order dated 15th June, 2019, by which, Respondent No.1 being the Competent Authority under the provisions of the Maharashtra Ownership Flats (Regulation of the promotion of Construction, Sale Management and Transfer) Act, 1963 (MOFA) has dismissed the Application filed by the Petitioner under Section 11 of MOFA seeking a deemed conveyance in respect of land more particularly set out in the said Application.
2. The relevant facts are as follows, viz. i. The Petitioner is a Co-operative Housing Society comprising of about 50 members. Respondent No.2 is a Family Trust and the owner of two plots of land bearing plot No.149 admeasuring 1600 sq. yards and plot No.156 admeasuring 1800 sq. yards. ii. In or about the year 1970-1971, Respondent No.2 being desirous of developing the said plots, amalgamated the same. Respondent No.2 thereafter constructed and built a building having basement + ground floor (part stilt + part shops) + four upper floors after obtaining various approvals from the Municipal Corporation of Greater Mumbai (MCGM). iii. Respondent No.2 thereafter sold shops and flats to various purchasers under various Agreements for Sale. One such Agreement is annexed to the Petition. Clause 3 of the said Agreement inter alia specifically provides that Respondent No.2 would convey the said land to a Co-operative Society of the premises-acquirers which were to be registered in pursuance of the said Agreement. However, despite the passage of about 40 years, Respondent No.2 failed and neglected to convey the said land and building to the Petitioner. iv. In the year 2014, approximately 39 years after construction of the said building and shops, Respondent No.3, who was also director and promoter of one M/s. Shri Sati Builders and Developers Private Limited approached the office bearers of Petitioner-Society with a proposal for redevelopment of Society’s building. The redevelopment contemplated demolishing the old building and constructing a new one in place and stead thereof. Respondent No.3 also agreed to convey the said plot in favour of the Petitioner. It is thus that a development agreement came to be executed between the Petitioner-Society and M/s. Shri Sati Builders and Developers Private Limited. v. Consequent to the above, on 30th December, 2014, a Deed of Conveyance came to be executed between Respondent No.3 on the one hand and the Petitioner on the other. Under the Deed of Conveyance, Respondent No.3 reserved an area of 13,755 sq. ft. (built up) for himself. It appears that thereafter the said Deed of Conveyance was submitted to the Collector of Stamps, Mumbai Suburban for adjudication of proper stamp duty. The Collector of Stamps thereafter adjudicated the stamp duty at Rs.11,61,300/including the interest and penalty. It is an undisputed position that the said Deed of Conveyance is not registered. vi. Thereafter there was a change in the Managing Committee of the Petitioner-Society, at which time, the new Committee members realized that the Conveyance Deed dated 30th December, 2014 executed by Respondent No.3 was bad in law. The objections of the new Managing Committee were pointed out to Respondent No.3, who did not accept the same. vii. The Petitioner was thereafter advised to file an Application under Section 11 of MOFA for deemed conveyance of the said land and building and it was thus that the said Application came to be filed. Respondent No. 2 and 3 filed a Miscellaneous Application raising a preliminary ground of objection seeking dismissal of the Application filed by the Petitioner on the ground that a Deed of Conveyance had already been executed in favour of the Petitioner- Society. The Application filed by Respondent No. 3 came to be allowed by the impugned order in which Respondent No.1 has held as follows, viz.
It is thus that the present Petition came to be filed.
SUBMISSIONS OF MR.
SHAH ON BEHALF OF THE PETITIONERS
3. Mr. Shah, learned Counsel appearing on behalf of the Petitioner at the outset, submitted that Respondent No.1 had grossly failed in discharging his statutory duty as required under MOFA by acting with total non-application of mind and in a mechanical and ministerial manner. He submitted that Respondent No. 1 had failed and neglected in applying his mind to the fact that the Deed of Conveyance relied upon by Respondent No. 3 was of no legal force and effect. He submitted that Respondent No. 1 had completely ignored that the fact that the Application of the Petitioner was based upon an Agreement entered into between the individual members of the Petitioner and Respondent No.2, to which, there was no dispute. He submitted that it was basis this Agreement that the Application for Deemed Conveyance had been filed. He submitted that Respondent No. 1 without so much as even considering this Agreement had dismissed the Petitioners application for deemed conveyance based upon the Deed of Conveyance dated 30th December, 2014. He pointed out that the said Deed of Conveyance was an ex facie of no legal force and effect since the same was (a) unregistered and (b) was not executed by Respondent No. 2 who was the promoter and (c) was executed by only Respondent No. 3 and not the other trustees/co-owners. He then submitted that the said Deed of Conveyance was infact entered into in collusion and/or connivence with the previous managing committee of the Petitioner society. He submitted that due intimation of this fact had been given to the Deputy Registrar of Co-operative Societies on 18th February, 2016. Learned Counsel therefore submitted that the term of the previous managing committee having expired prior to the date of execution of the Deed of Conveyance it was plain that the same was had been fraudulently entered into and was thus legally untenable. Learned Counsel then submitted that a complaint for serious irregularities and non-compliance by office bearers against the previous managing committee had been filed by one of the members of the new managing committee on 20th February, 2016 and pursuant to which elections for a new managing committee had been held.
4. Mr. Shah then invited my attention to the Agreement based on which the Application for deemed conveyance was made and pointed out that Respondent No. 2 was clearly the Promoter as defined under MOFA. He then invited my attention to Section 11(1) of MOFA and pointed out that it was the statutory obligation of a promoter i.e., Respondent No. 2 in the present case was to take all the necessary steps to complete its title and convey all its right, title and interest in the land and building in question and execute all the relevant documents in favour of, in this case, the Petitioner. He submitted that as per Section 11(2) of MOFA it was also the duty of a promoter to file with the competent authority within a prescribed period, a copy of the conveyance deed executed under Section 11(1) of MOFA. He submitted that in the present case Respondent No. 2 had admittedly not filed any conveyance deed with the competent authority and thus had failed and neglected to discharge its statutory duty despite the passage of over forty years. He therefore submitted that it was thus that the Petitioner had no option but to file the said application for deemed conveyance under Section 11 of MOFA.
5. Learned Counsel then submitted that Respondent No.1 when considering an application for deemed conveyance was required to verify the documents which were placed before him and apply his mind to the legality and effect of those documents. In support of his contention, he invited my attention to Section 11(4) MOFA read with Rule 3(5) of the MOFA Rules. Learned Counsel in support of his contention placed reliance upon a judgment of this Court in the case of Rusabh Shah vs. Avarsekar & Sons Pvt Ltd.[1] to submit that it was the statutory duty of Respondent No. 1 to have ascertained the legality of the Deed of Conveyance relied upon and to test if the same was in conformity with MOFA. Learned Counsel therefore, submitted that in the present case Respondent No.1 in failing to properly construe the authenticity and validity of the Deed of Conveyance relied upon by Respondent No.3 and had thus failed to discharge its duty as contemplated under MOFA and the Rules framed thereunder.
6. Learned Counsel then candidly accepted that though the Petitioner had not taken the contention that Respondent No. 2 was in breach Section 11(2) of MOFA before Respondent No. 1, the said contention could be raised for the first time in the present Writ Petition since the same was a question of law which went to the root of the matter. In support of his contention that a question of law can be raised at any stage of the proceedings, he placed reliance upon the judgment of the Hon’ble Supreme Court in the case of the National Textile Corporation Ltd. Vs. Nareshkumar Badrikumar Jagad and Ors[2]. Learned Counsel therefore, submitted that Respondent No.1 erred in passing the impugned order by which a Deemed Conveyance was rejected in favour of Petitioner. Respondent
1 Unreported order dated 23rd December, 2022 passed in WP/6258/2019 2 (2011) 12 SCC page 695 had failed to effectively exercise the jurisdiction vested in Respondent No.1 under the provisions of the MOFA. In support of his contention, he placed reliance upon a judgment of the Hon’ble Supreme Court in the case of Vikram Chatterji and Ors. Vs. Union of India[3] in which judgment the Hon’ble Supreme Court was pleased to hold as follows: - “Power vested by the State in a Public Authority should be viewed as a trust coupled with duty to be exercised in larger public and social interest. Power is to be exercised strictly adhering to the statutory provisions and fact-situation of a case. Public Authorities cannot play fast and loose with the powers vested in them. A decision taken in an arbitrary manner contracts the principle of legitimate expectation. An Authority is under a legal obligation to exercise the power reasonably and in good faith to effectuate the purpose for which power stood conferred. In this context, in good faith means for legitimate reasons.”
7. Learned Counsel submitted that there was no registered power of attorney of the other co-owners annexed to the Deed of Conveyance and the other co-owners were also not defined as vendors in the Deed of Conveyance. He that Respondent No. 2 had failed for a prolonged period of more than 40 years to convey the said land to the Petitioner.
8. In so far as the development agreement was concerned, learned Counsel submitted that the developer was a separate legal entity and was not a party to this Writ Petition as the developer was not concerned with the grant of
3 Writ Petition No. 940 of 2017 the conveyance. Learned Counsel submitted that any aspect pertaining to the development agreement was not germane to the present Writ Petition. Learned Counsel therefore, submitted that the fact that the development agreement executed on a plain paper and was not stamped, did not have any evidentiary value. Learned Counsel submitted that no action of re-development was taken by the developer from the year 2014 till 2019. Thus, the developer despite having sufficient time to perform its obligations under the development agreement had failed and neglected.
9. Learned Counsel then without prejudice submitted that even the deed of dissolution of the said trust did not appear to be registered as no reference to the same was to be found in the Deed of Conveyance. Learned Counsel submitted that the names of Respondent No.3 and others had not been mutated in the property register card after the supposed dissolution of the trust in the year, 1999, and the said lands still stood in the name of the said trust in the property records. Learned Counsel then submitted that the transfer of any property in law is effective only when the document transferring the right, title and interest in the said property has been duly registered. He pointed out that in the facts of the present case none of the documents had been registered.
10. Learned Counsel then submitted that the contention of Respondent No.3 that the Petitioner never came forward for registration of the deed of conveyance was baseless and untenable as even if the parties had attempted registration thereof, the same would have proved futile since the said lands were in the name of Respondent No. 2 and not Respondent No. 3 in the property register card. Learned Counsel then submitted that the developer had always been insisting on simultaneous registration of Deed of Conveyance and development agreement which clearly made evident the malafide intention and sole motive of Respondent No.3 which was to deprive the Petitioner to that which the Petitioner was legally entitled under MOFA.
11. Learned Counsel then submitted that the submission of Respondent No.3 that eight members did not pay stamp duty and the stamp duty was paid by the developer was factually incorrect. He pointed out that the stamp duty of only two members was paid by the developers which was to be then recovered by the developer from the two members. He however reiterated that any transaction with developer was not germane to the issue at hand in the present Writ Petition.
SUBMISSIONS OF MR.
JAIN ON BEHALF OF RESPONDENT NO. 3.
12. Per contra Mr. Jain learned Counsel appearing on behalf of Respondent No.3 submitted that the Petitioner had suppressed from Respondent No.1 the factum of execution of the Deed of Conveyance dated 30th December
2014. He submitted that the Application for Deemed Conveyance was dismissed, since this fact had been suppressed in the Application for Deemed Conveyance by the Petitioner. Learned Counsel then submitted that the Petitioner was now taking a totally different stand as to the one taken in the Application for Deemed Conveyance.
13. Learned Counsel pointed out that in the present Writ Petition the factum of execution of the Deed of Conveyance dated 30th December, 2014 was admitted by the Petitioner in paragraph 8.[8] of the Petition. Learned Counsel submitted that the Petitioner though having admitted execution of the Deed of Conveyance now sought to contend that the same though executed was not registered and thus was void.
14. Learned Counsel then without prejudice submitted that the registration of the Application for Deemed Conveyance was delayed on account of acts of omission and commission on the part of the Petitioner. He pointed out that the Deed of Conveyance itself made clear that Stamp Duty and Registration Charges were both payable by the Petitioner. Learned Counsel pointed out that the Petitioner despite being called upon did not take any steps for registration of the Deemed Conveyance. Learned counsel therefore pointed out that the Petitioner could not be permitted to take advantage of its own wrong. Learned Counsel submitted that all these aspects had been duly considered in the impugned order and that the impugned order was a well-reasoned order.
15. Learned Counsel then submitted that Respondent No.1 had after adverting to all the facts of the case and ascertaining the veracity of the documents before it had passed the impugned order. Learned counsel submitted that the Petitioner’s contention that Respondent No.1 ought to have entered into an inquiry as to the title of Respondent No. 3 and the authority of Respondent NO. 3 to execute a Deed of Conveyance was infact a non-issue, since the Petitioner had itself accepted the authority of Respondent No. 3. Learned counsel pointed out that Respondent No. 3 was the only person joined in the Application for Deemed Conveyance as the owner of the said property. He submitted that in light of this, there was no occasion for Respondent No.1 to have entered into the question of authority of Respondent No.3. He submitted that the authority of the Respondent No.3 was also evident from the Development Agreement entered into with the Petitioner. Learned counsel submitted that basis these contentions Respondent No.1 had not in any manner failed to perform its duties. He submitted that if the case of the Petitioner is that Respondent No.3 was not the only owner of the land and that there were other owners also, then the Petitioner ought to have joined the other owners as co-opponents before the Competent Authority in the Application for Deemed Conveyance. Learned counsel submitted that the Petitioner not having done so clearly was aware of and have accepted the fact that no other person other than Respondent No.3 was required to be joined.
16. Without prejudice to the above, learned counsel then submitted that there was grave delay and latches on the part of the Petitioner in filing the present Writ Petition. He submitted that the Deed of Conveyance was executed in the year 2014. The Stamp duty was paid thereof year 2015. The Application for Deemed Conveyance before the Respondent No.1 was filed on 26th November 2018 and the Application was dismissed by the impugned order dated 15th June,
2019. He pointed out that the present Writ Petition was filed only on 23rd April, 2022 after a delay of almost 3 years in filing from the date of the impugned order. He submitted that the Writ Petition did not contain any cogent reason for this delay.
17. Learned Counsel submitted that while the Petitioner had contended that the Deed of Conveyance was bad in law as the same inter alia contained certain conditions which were prejudicial to the interest of the members of the Petitioner-society. The Petitioner-society had not taken any steps to set aside the Deed of Conveyance dated 30th December 2014.
18. Learned Counsel then in dealing with the judgment in the case of Rusabh Shah Vs. Avarsekar & Sons Private Limited & Anr. relied upon by the Petitioner submitted that the same was not applicable to the facts of the present case in as much as the same was in relation to formation of a new entity i.e. a Co-operative society on the one hand vis-a-vis a declaration submitted by a developer as per the provisions of Maharashtra Apartment Ownership Act,
1970. He submitted that the consequences arising from failure to issue intimation to the Registrar about the registration of declaration in terms of Section 10(2) of the MOFA were provided for in the section itself. He took pains to point out that Section 11(2) of the MOFA did not contain any such consequences as per provided for in Section 10(2) of the MOFA. He therefore submitted that the intimation require under Section 11(2) of the MOFA was directory and not mandatory.
19. Learned Counsel then submitted that the scope of adjudication before the Competent Authority under Section 11 of the MOFA was extremely narrow. He submitted that Section 11 of the MOFA would apply only in cases where there was no Deed of Conveyance executed and not otherwise. He submitted that once a Deed of Conveyance had been executed by a promoter/developer the question of entertaining an Application under Section 11 of the MOFA would not arise. Learned counsel then submitted that the Petitioner had suppressed the aforesaid facts from this Court and therefore was not entitled to any equitable relief.
20. Learned counsel then took pains to point out that the Deed of Conveyance was approved by the members of Extra Ordinary General Meeting (“EOGM”) held on 14th December 2013. He pointed out that the signatories to the Deed of Conveyance were authorized to sign pursuant to a resolution passed in EOGM and that they had not signed the same in their capacity as managing committee members. He submitted that the fact that the Deed of Conveyance had been approved by the General Body of the Petitioner-society, therefore the contentions that the term of managing committee had come to end would be of no avail to the Petitioner. He submitted that a decision/resolution passed in EOGM had not been reversed and the Petitioner-Society had not terminated the Deed of Conveyance.
21. He pointed out that the present managing committee had also acted upon the Deed of Conveyance by paying the Stamp Duty thereon. Insofar as the letters dated 20th February, 2016 and 19th August 2015 were concerned, learned counsel submitted that the Petitioner though having said letters available with them chose not to annex them to the Writ Petition. The Petitioner was therefore estopped from in any manner relying upon the said letters.
22. Insofar as the Judgments relied upon by the Petitioner are concerned, Mr. Jain submitted that the judgment in the case of National Textile Corporation Limited was not applicable to the facts of the present case inasmuch as the case of the Petitioner before Respondent No.1 was that there was no conveyance deed executed in favour of the Petitioner whereas in the facts of the present case admittedly the conveyance deed was executed which fact was suppressed by the Petitioner before Respondent No.1. He, therefore, submitted that the said judgment would be of no assistance to the Petitioner. In so far as the judgment in the case of Vikram Chatterji & ors, he submitted that the same was also not applicable as Respondent No.1 had exercised its power reasonably, judiciously and in good faith and as also statutory provision by which Respondent No.1 was bound. He then submitted that the said judgments were of no assistance to the case of the Petitioner.
23. I have heard the Learned Counsel, considered the rival contentions as also the case law cited, perused the Impugned Order and I have no hesitation in holding that the present Writ Petition deserves to be allowed for the following reasons, viz. A) It is well settled that the jurisdiction of the competent authority under MOFA albeit summary, is not ministerial. The competent authority has to therefore apply its mind to several aspects when deciding an Application for deemed conveyance including the Applicant’s eligibility and whether or not the promoter/developer has duly discharged its obligations in terms of Section 11 of MOFA. The jurisdiction of the competent authority and the exercise that it is required to undertake has been reiterated and succinctly set out in the case of Rusabh Shah (supra) in which a learned Single Judge of this Court following a Division Bench judgment in the case of Cipla Limited v. Competent Authority and the District Dy. Registrar Cooperative Society (1), Mumbai 4 reiterated as
4 Writ Petition (L) No. 3706 of 2019: 19th December, 2019: Bombay High Court follows;
The aforesaid findings are apposite to the facts of the present case, since Respondent No.1 has dismissed the Petitioner’s Application for deemed conveyance without so much as attempting to ascertain whether the Deed of Conveyance relied upon by Respondent No.3 was in fact executed in accordance with the provisions of MOFA. B) In this case Respondent No.1 instead of considering the legality and validity of the Deed of Conveyance relied upon by Respondent No.3 has instead looked the other way and proceeded to dismiss the application solely on the factum of its execution. Respondent No.1 has neither considered much less dealt with the objections raised by the Petitioner in respect of the said deed of conveyance. As also observed by this Court in the case of Rusabh Shah (supra) this appears to be another unfortunate instance of the Competent Authority not following the law laid down by this Court and acting in a mechanical manner. C) Further, prima facie the Conveyance relied upon by Respondent NO. 3 could never be a document which was executed in compliance with the obligations of Respondent No. 2 as Promoter under MOFA since, (i) the Conveyance is not between Respondent No. 2 and the Petitioner but has been executed only by Respondent No. 3, (ii) it is admittedly not a registered document
(iii) the document itself makes reference to the dissolution of Respondent No. 2 and records that the beneficiaries all became owners of the said lands and (v) none of the other beneficiaries are signatories to the said document. D) Additionally, the Application for Deemed Conveyance filed by the Petitioner was based upon the Agreement dated 5th December 1973. It is not in dispute that under this Agreement, Respondent No. 2 is the Promoter who was to execute the conveyance in favour of the Petitioner under MOFA. This has admittedly not been done despite the passage of over 40 years. Thus, the Petitioner was well entitled to file the Application for Deemed Conveyance based upon this Agreement alone. This fact has also been completely ignored by
24. I find that the present case is infact a classic example of why MOFA was enacted. Not only has the promoter has failed and neglected to convey the said property to the Petitioner-Society but has subsequently also attempted to diddle out the society from what in law should have vested with the society. Therefore I have no hesitation in allowing the present Writ Petition in terms of prayer clauses (b) and (c) which read thus:- (b) This Hon’ble Court be pleased to call for the entire records from the custody of Respondent No.1 in respect of the application for Deemed Conveyance No.32 of 2018 dated 26th Novembe4r, 2018 and after going through the legality and validity thereof issue a Writ of Certiorari of any other appreciate writ Order or directions and quash and set aside the Order dated 15th June 2019, being “Exhibit-A” to this writ petition.
(c) After passing the order in terms of prayer clause (b) the Hon’ble
Court be please to direct the Respondent No.1 by a writ of mandamus or any other appreciate writ order or directions to dispose of the Application for Deemed Conveyance No.32 of 2018 filed by the Petitioner, after hearing the parties and submissions made by the Petitioner, by passing appropriate order without any specific reference to Deed of Conveyance dated 30th December 2014.”
25. The impugned order is thus set aside.
26. Respondent No.1 is directed to hear the Petitioner’s Application i.e. Application No.32 of 2018 for deemed conveyance on merit keeping open all rights and contentions of the parties as to the eligibility and entitlement of the Petitioner within a period of three months from the date of this order being uploaded.
27. Writ Petition is accordingly disposed off. (ARIF S. DOCTOR, J.)