KAMGAR SWA SADAN CO­OPERATIVE HOUSING SOCIETY LTD. vs MR. VIJAYKUMAR VITTHALRAO SARVADE

KAMGAR SWA SADAN CO­OPERATIVE  HOUSING SOCIETY LTD.  vs  MR. VIJAYKUMAR VITTHALRAO  SARVADE

NON­REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.  1222  OF 2022
[arising out of SLP (CIVIL) No. 21964 of 2017]
KAMGAR SWA SADAN CO­OPERATIVE 
HOUSING SOCIETY LTD.                   …     APPELLANT
v.
MR. VIJAYKUMAR VITTHALRAO 
SARVADE & ORS.                                   …  RESPONDENTS
J  U  D  G  M  E  N  T
ABHAY S. OKA, J.
Leave granted.
1. The respondent nos.1 to 11 are the original plaintiffs.  The
appellant­Society   is   the   original   defendant   no.1.     The
respondent nos.12 to 25 are the office bearers of the appellantSociety.   The   respondent   nos.   26   to   29   are   the
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developers/builders. The respondent nos.30 to 38 are officials
and/or the members of the High Power Committee constituted
by the Government of Maharashtra.  The last respondent is the
Project Consultant and Architect.  It is not in dispute that the
respondent nos.1 to 11 (original plaintiffs) are the members of
the appellant, a Co­operative Society duly registered under the
Maharashtra Co­operative Societies Act, 1960 (for short “the
said Act of 1960). The dispute is about the redevelopment of the
buildings occupied by the members of the appellant­Society in
accordance with Regulation 33(7) of the Development Control
Regulations   for   Greater   Mumbai,   1991   applicable   to   the
Municipal   Corporation   of   Greater   Mumbai.     In   the   Special
General  Body   Meeting   of   the   appellant­Society   held   on   12th
February   2011,   a   resolution   was   passed   resolving   that   the
tender   submitted   by   the   respondent   no.26   for   the
redevelopment of the property of the appellant­Society should
be accepted.   It is the case of the appellant­Society that the
resolution was unanimously passed.  
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2. On 2nd December 2012, a Special General Body Meeting of
the   appellant­Society   was   held   in   which   a   resolution   was
unanimously passed appointing the respondent no.27 as the
developer. The respondent no.27 is stated to be a sister concern
of the respondent no.26.  It is alleged that out of 240 members
of the appellant­Society, 165 were present in the meeting.  An
agreement for development was accordingly executed on 24th
December   2012   by   the   appellant­Society.     The   agreement
provided for allotment of premises in the redeveloped buildings
free of cost on ownership basis to all the eligible members of the
appellant­Society.  In addition, the respondent no.27 agreed to
provide   a   corpus   of   Rs.5,00,000/­   (Rupees   Five   Lakhs)   per
member to the appellant­Society.  On 27th December 2012, the
Jurisdictional   Assistant   Registrar   of   Co­operative   Societies
accorded permission to the appellant­Society to redevelop the
property.  On 7th January 2013, the Assistant Registrar granted
further  permission  to   the  appellant­Society  to  redevelop  the
property by appointing the respondent no.27 as the developer.
The   said   permission   refers   to   a   report   submitted   by   the
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Authorized Officer which recorded that all the 165 members of
the appellant­Society who were present in the meeting held on
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nd December 2012 supported the proposal for redevelopment. 
3. The respondent nos.2, 3 and 8 along with some other
members of the appellant­Society filed a revision application
under Section 154 of the said Act of 1960 for challenging the
orders/permissions   dated   27th  December   2012   and   17th
January 2013 issued by the Assistant Registrar of Co­operative
Societies.   The   revisional   authority   allowed   the   revision
application by the order dated 14th May 2013.  The order of the
revisional authority was challenged by the appellant­Society by
filing a Writ Petition in the Bombay High Court.  By the order
dated 11th December 2013, the Bombay High Court stayed the
order of the revisional authority.   The said interim order of
Bombay High Court was challenged by the respondent nos.2, 3
and 8 before this Court.   While dismissing the Special Leave
Petition,   this   Court   directed   the   Bombay   High   Court   to
expeditiously decide the Writ Petition.   In the pending Writ
Petition, the respondent no.2 filed an interlocutory application
seeking   an   interim   order   of   status   quo   as   regards   the
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redevelopment   of   the   property.   The   High   Court   declined   to
grant any interim relief on the said application. 
4. The respondent nos.1 to 11 filed the suit – subject matter
of this Civil Appeal in the City Civil Court at Mumbai.  The suit
was filed on 20th  February 2016. The respondent nos.1 to 11
contended in the suit that the resolutions passed in the Special
General   Body   Meetings   dated   12th  February   2011   and   2nd
December 2012 were illegal being contrary to provisions of law
and the Guidelines framed by the State Government vide the
Government Resolution dated 3rd January 2009.  A prayer was
made for a decree of declaration that the said resolutions were
illegal,   null   and   void.     Another   prayer   was   made   for   a
declaration that the tender process conducted by the appellantSociety for appointing a developer for redeveloping its property
was illegal.  A prayer was also made for directing the appellantSociety to conduct a fresh tender process.   Interim relief was
claimed in the suit for restraining the concerned defendants
from granting further permissions to the appellant­Society.  The
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Trial Court did not grant ad­interim relief to the respondent
nos.1 to 11.
5. The present appellant­Society and some other defendants
took out a Notice of Motion in the suit contending that the
jurisdiction of the Civil Court was barred in view of Section 91
of the said Act of 1960 and the Co­operative Court will have
exclusive jurisdiction to entertain and decide the dispute in the
suit.  It was also alleged that the suit was barred by limitation.
The said respondents invoked Section 9A of the Code of Civil
Procedure, 1908 (for short “CPC”) and prayed that both the
issues be decided as preliminary issues before deciding the
Notice of Motion for temporary injunction.   The prayer was
contested by the respondent nos.1 to 11.   Two preliminary
issues on jurisdiction and bar of limitation were framed by the
Trial Court.  The learned Trial Judge after hearing the parties,
held that the suit was not barred by Section 91 of the said Act
of 1960 and was maintainable in Civil Court.  He held that the
suit was within limitation.  It is this order which was subjected
to   a   challenge   by   filing   a   Civil   revision   application   by   the
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appellant­Society.     The   High   Court   dismissed   the   revision
application. Therefore, the present appeal has been filed for
challenging the orders of the Trial Court and High Court. 
6. We   have   heard   the   learned   counsel   appearing   for   the
parties.     Mr.   Shyam   Divan,   the   learned   Senior   Counsel
submitted that in view of the repeal of Section 9A of the CPC as
applicable to the State of Maharashtra and a recent decision of
this   Court   in   the   case   of  Nusli Neville Wadia  v.
Ivory Properties & Ors.1
, the issue of limitation could not be
decided as a preliminary issue.   The learned Senior Counsel
submitted that the finding recorded by the Trial Court on the
issue of limitation will have to be set aside. He submitted that
issue of limitation will have to be decided after the parties
adduce   evidence.     He   would   submit   that   in   any   case,   the
respondent nos.1 to 11 will not be entitled to the benefit of
Section 14 of the Limitation Act, 1963 (for short “the Limitation
Act”). He also invited our attention to additional documents
placed   on   record   along   with  I.A.No.22493   of   2021  and
1 2020 (6) SCC 557
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submitted that the buildings of the appellant­Society are in
extremely dilapidated condition and a notice to that effect has
been   served   upon   the   appellant­Society   by   the   Municipal
Corporation of Greater Mumbai.  He submitted that except for
the respondent nos.1 to 11, more than 150 members of the
appellant­Society have consented to the redevelopment of the
property by the respondent no.27­developer.  He submitted that
it is only because of the objection raised by only 11 members
who are the plaintiffs that the entire redevelopment work has
been stalled.  The learned counsel appearing for the respondent
no.27 supported the submissions of the learned Senior Counsel
appearing   for   the   appellant­Society.     The   learned   counsel
appearing   for   the   original   plaintiffs   urged   that   the   findings
recorded by the Trial Court on both the issues are fully justified
as the original plaintiffs will be entitled to benefit of Section 14
of the Limitation Act and the bar of Section 91 of the said Act of
1960 will not be attracted.
7. After  the  submissions  were  heard,  we  called  upon   the
parties   to   explore   a   possibility   of   an   amicable   solution
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considering   the   present   status   of   the   buildings.   We   also
permitted the appellant­Society and the respondent no.27 to file
affidavits/undertakings for placing on record their offer to the
respondent nos.1 to 11 and other members of the appellantSociety.   The respondent no.27 stated that initially, the offer
was to allot premises admeasuring 429.88 sq. ft. of carpet area
plus 20.12 sq. ft. of service slab to those eligible members of the
appellant­Society who were occupying residential  tenements.
The respondent no.27 in view of subsequent enhancement in
Floor Space Index (FSI), offered to allot residential premises
admeasuring 450 sq. ft. of carpet area (excluding the service
slab) to those eligible members who were occupying residential
premises.  The respondent no.27 offered premises admeasuring
350  sq.  ft. of   carpet  area  to   those  eligible  members  of  the
appellant­Society   who   were   occupying   commercial   premises.
The respondent no.27 also offered to pay shifting charges as
well   as   requisite   monthly   amounts   for   acquiring   temporary
accommodation on rental basis.  The respondent no.27 has also
offered to create a substantial corpus fund for the benefit of the
appellant­Society and its members.  The respondent no.27 has
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filed affidavits/undertakings on record containing their offer.
Even the appellant­Society has filed an affidavit/undertaking
reiterating   the   offer   made   by   the   respondent   no.27.   The
submission of the learned counsel appearing for the original
plaintiffs is that the respondent no.27 has no experience of
developing   properties   in   Mumbai.   He   submitted   that
considering the additional FSI which is now made available, the
area offered by the respondent no.27 to the members of the
Society  should  be  much   more  than  what   is set  out   in  the
affidavits filed on record.   In short, though the plaintiffs are
accepting   that   redevelopment   of   buildings   of   the   appellantSociety is necessary, they are not willing to accept the offer
made by the appellant­Society and the respondent no.27.  The
respondent no.27 filed an affidavit on 17th  January 2021 by
which the area of residential premises offered to the members
was increased to 460 sq. ft. of carpet area.
8. Firstly, we are dealing with the submissions on the merits
of the impugned orders. Section 9A was introduced by the Code
of Civil Procedure (Maharashtra Amendment) Act, 1977 which
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provided that if at the hearing of an application for grant of
interim relief in a suit, an objection is raised by a defendant to
the jurisdiction of the Court to entertain the suit, the Court
shall proceed to determine at a hearing of such application, the
issue of jurisdiction as a preliminary issue before granting or
setting aside the order granting interim relief.  Under Section 3
of   the   Code   of  Civil   Procedure   (Maharashtra   Amendment)
Ordinance, 2018, Section 9A was deleted.  But it was provided
that an issue of jurisdiction already framed by invoking Section
9A will be treated as an issue framed under Order XIV of CPC.
The said Ordinance was replaced by an Act.  The Act repealing
Section   9A   underwent   an   amendment   by   the   Code   of   Civil
Procedure  (Maharashtra Amendment) (Amendment) Act, 2018
by which Section 3 of the earlier repealing Act was substituted
with effect from 27th June 2018 which provided that if on the
date of deletion of Section 9A, an issue under Section 9A has
already been framed, the same shall be decided as if Section 9A
was   not   deleted.     The   amendments   referred   above   clearly
envisage that if the Court had ordered to decide an issue as a
preliminary issue before the date of deletion of Section 9A, the
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same shall be decided by the Court as a preliminary issue.  In
the present case, the issue was decided prior to 27th June 2018
when Section 9A was repealed.
9. In the case of  Nusli Wadia   (supra), this Court held that
the expression “jurisdiction of the Court to entertain such suit”
used in Section 9A by holding that under Section 9A, the issue
of jurisdiction to entertain the suit has to be decided without
recording evidence.   In paragraphs 49,50,54,56,88 and 89 of
the aforesaid decision, this Court held thus:
“49. Since the expression used in Section 9­
A   as   incorporated   in   Maharashtra,   is
“jurisdiction   to   entertain”   that   is   in   a
narrower   sense   and   its   purport   cannot   be
taken   to   be   comprehensive   as   laid   down
in Foreshore   Coop.   Housing   Society
Ltd. (supra).
50. When   we   consider   what   colour
expression “jurisdiction” has in Section 9­A,
it   is   clearly   in   the   context   of   power   to
entertain,   jurisdiction   takes   colour   from
accompanying word “entertain” i.e. the court
should have jurisdiction to receive a case for
consideration or to try it. In case there is no
jurisdiction, court has no competence to give
the relief, but if it has, it cannot give such
relief for the reason that claim is time­barred
by limitation or is barred by the principle of
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res   judicata   or   by   bar   created   under   any
other law for the time being in force. When a
case is barred by res judicata or limitation, it
is   not   that   the   court   has   no   power   to
entertain it, but it is not possible to grant the
relief. Due to expiry of limitation to file a suit,
extinguishment   of   right   to   property   is
provided under Section 27 of the Limitation
Act.   When   court   dismisses   a   suit   on   the
ground of limitation, right to property is lost,
to hold so the court must have jurisdiction to
entertain it. The court is enjoined with a duty
under Section 3 of the Limitation Act to take
into   consideration   the   bar   of   limitation   by
itself. The expression “bar to file a suit under
any other law for the time being in force”
includes the one created by the Limitation
Act. It cannot be said to be included in the
expression   “jurisdiction   to   entertain”   suit
used in Section 9­A. The court has to receive
a case for consideration and entertain it, to
look into the facts constituting limitation or
bar created by any other law to give relief, it
has to decide the question on merits; then it
has the power to dismiss the same on the
ground   of   limitation   or   such   other   bar
created by any other law. Thus, the meaning
to   be   given   to   jurisdiction   to   entertain   in
Section   9­A   is   a   narrow   one   as   to
maintainability, the competence of the court
to receive the suit for adjudication is only
covered   under   the   provisions.  The   word
“entertain” cannot be said to be the inability
to grant relief on merits, but the same relates
to receiving a suit to initiate the very process
for granting relief.”
(underline supplied)
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“54. What is intended by Section 9­A of the
Code of Civil Procedure, 1908 (CPC) is the
defect   of   jurisdiction.   It   may   be  inter   alia
territorial or concerning the subject­matter.
The   defect   of   jurisdiction   may   be   due   to
provisions   of   the   law.   In Raghunath
Das v. Gokal   Chand AIR   1958   SC   827,   the
execution   of   award   of   the   decree   was
dismissed by the Court on the ground that
decree   was   a   nullity.   The   Court   had   no
jurisdiction to pass a decree of the partition
of agricultural land. It held that defect of the
jurisdiction in the court that passed decree
became attached to decree itself as dismissal
of the suit was on account of the defect of
jurisdiction. Thus, in our considered opinion,
it is only the maintainability of the suit before
the court which is covered within the purview
of   Section   9­A   CPC   as   amended   in
Maharashtra.
(underline supplied)
“56. Within the ken of provisions of Section
9­A, CPC jurisdiction of the court to entertain
the suit has to be decided without recording
of   evidence.   Recording   of   evidence   is   not
contemplated  even  at   the   stage   of  framing
issue under Order 14 Rule 2 much less it can
be allowed at the stage of grant of injunction,
it   would   be   the   grossest   misuse   of   the
provisions of the law to permit the parties to
adduce   the   evidence,   to   prove   facts   with
respect to a preliminary issue of jurisdiction
to   entertain   a   suit.   In   case   it   is   purely   a
question of law, it can be decided within the
purview of Section 9­A CPC as applicable in
Maharashtra. The scope of Section 9­A is not
broader than Order 14 Rule 2(2) CPC. The
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scope is a somewhat limited one. Two fullfledged   trials   by   leading   evidence   are   not
contemplated in CPC, one of the preliminary
issue and another on other issues. Until and
unless the question is purely of law, it cannot
be   decided   as   a   preliminary   issue.   In   our
opinion,  a   mixed  question   of   law   and  fact
cannot   be   decided   as   a   preliminary   issue,
either under Section 9­A or under Order 14
Rule 2 CPC. Before or after its amendment of
CPC concerning both provisions, the position
is the same.”
“88. Given the discussion above, we are of
the considered opinion that the jurisdiction
to entertain has different connotation from
the jurisdictional error committed in exercise
thereof.   There   is   a   difference   between   the
existence of jurisdiction and the exercise of
jurisdiction. The expression “jurisdiction” has
been   used   in   CPC   at   several   places   in
different contexts and takes colour from the
context   in   which   it   has   been   used.   The
existence of jurisdiction is reflected by the
fact of amenability of the judgment to attack
in the collateral proceedings. If the court has
an inherent lack of jurisdiction, its decision
is open to attack as a nullity. While deciding
the issues of the bar created by the law of
limitation, res judicata, the court must have
jurisdiction to decide these issues. Under the
provisions of Section 9­A and Order 14 Rule
2, it is open to decide preliminary issues if it
is   purely   a   question   of   law   not   a   mixed
question   of   law   and   fact   by   recording
evidence.      The   decision   in Foreshore   Coop.
    Housing Society Ltd. (supra) cannot be said to
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be laying down the law correctly.  We have
considered the decisions referred to therein,
they are in different contexts. The decision of
the Full Bench of the High Court of Bombay
    in     Meher   Singh (supra)   holding   that   under
Section   9­A   the   issue   to   try   a
suit/jurisdiction can be decided by recording
evidence   if   required   and   by   proper
adjudication, is overruled.  We hold that the
decision   in Kamalakar   Eknath
Salunkhe (supra) has been correctly decided
and cannot be said to be per  in curiam, as
held   in Foreshore   Coop.   Housing   Society
Ltd. (supra).”
(underline supplied)
“89. Section   2   of   the   Maharashtra   Second
Amendment Act, 2018 which provides that
where   consideration   of   preliminary   issue
framed under Section 9­A is pending on the
date of commencement of the CPC, the said
issue shall be decided and disposed of by the
court under Section 9­A as if the provision
under Section 9­A has not been deleted, does
not change the legal scenario as to what can
be   decided   as   a   preliminary   issue   under
Section   9­A   CPC,   as   applicable   in
Maharashtra.   The   saving   created   by   the
provision of Section 2 where consideration of
preliminary issue framed under Section 9­A
is pending on the date of commencement of
the   Code   of   Civil   Procedure   (Maharashtra
Amendment) Act, 2018, can be decided only
if it comes within the parameters as found by
us on the interpretation of Section 9­A. We
reiterate that no issue can be decided only
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under the guise of the provision that it has
been   framed   under   Section   9­A   and   was
pending   consideration   on   the   date   of
commencement   of   the   (Maharashtra
Amendment)   Act,   2018.   The   reference   is
answered accordingly.”
10. In the facts of the case, the appellant­Society and certain
other defendants led evidence on the preliminary issue by filing
an affidavit in lieu of examination­in­chief of one Mr.  Sanjay
Rajaram Mohite. The original defendant nos.16 and 17 were
examined as witnesses.   Thus, in this case, for deciding the
issue   of   limitation   evidence   was   required   to   be   recorded.
Hence, it was not open for the Trial Court to examine and
decide the issue of the bar of limitation by invoking Section 9A
of CPC. 
11. By filing the present suit in February 2016, the original
plaintiffs have questioned the resolutions dated  12th  February
2011   and   2nd  December   2012   passed   in   Special   General
Meetings of the appellant­Society. The plaintiffs also challenged
the   tender   process   conducted   by   the   appellant­Society   way
back in the year 2011.  The plaintiffs were aware of both the
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resolutions at all relevant times as some of them were present
in   the   meetings.   Some   of   them   filed   aforesaid   revision
application in the year 2013 for challenging the permissions
granted   on   the   basis   of  the   said  resolutions.     The   revision
application preferred by the respondent nos.2, 3 and 8 was
allowed on 14th May 2013.  The said order was stayed by the
High Court on 11th December 2013.  The Special Leave Petition
preferred by the respondent nos.2, 3 and 8 against the order of
stay was dismissed by this Court on 7th March 2014.  
12. The respondent nos.1 to 11 waited till February 2016 to
file the suit. The said respondents relied upon Section 14 of the
Limitation Act to bring their suit within limitation.   From the
bare facts pleaded in the plaint, prima facie, there is a serious
doubt whether the benefit of Section 14 can be granted to the
respondent   nos.1   to   11.   However,   the   issue   can   be   finally
decided based on the evidence adduced by the parties.
13. Thus, in normal course, by setting aside findings of the
Trial Court and the High Court on the issue of limitation, this
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Court would have directed the Trial Court to decide the issue of
limitation   along   with   the   other   issues.   The   learned   Senior
Counsel appearing for the appellant­Society  has fairly stated
that this Court need not go into the question of maintainability
of the suit.
14.  Now, we will deal with the offer made by the appellantSociety as well as by the respondent no.27 and the response of
the   respondent   nos.1   to   11   to   the   said  offer.   Mr.   Shripal
Babulal Jain, the managing partner of the respondent no.27
has   filed   an   affidavit/undertaking   on  17th  January   2021.
Paragraphs 4 to 10 of the said affidavit reads thus:­  
“4.  The correct facts in this regard as under:
i) FSI as per Old policy (DCR – 1991) u/s
33(7) + 33(24): FSI.
ii) FSI as per New Policy (DCPR ­ 2034)
u/s 33(7) with 80% incentive on rehab
area: 4.31 FSI.
Here it may also be noted that:
Incentive   FSI  as   per  old   Policy  (DCR1991)   was   50%   u/s   33(7)   plus   u/s
33(24) parking FSI by providing public
parking which would be roughly 25% of
the   Rehab   built­up   area.   Thus,   total
20
incentive   on   rehab   area   would   be
around 75%.
Incentive FSI as per New Policy (DCPR
­2034)   u/s   33(7)   is   80%   however
parking FSI would not be available as it
is restricted upto 4 FSI.
A   copy   of   the   Architect   certificate   is
annexed   hereto   and   marked   as
Annexure A/1 (Page no.9 to ­). A copy of
the   relevant   portion   of   DCR   1991   is
annexed   hereto   and   marked   as
Annexure­A/2   (Page   No.10   to   13).   A
copy   of   the   relevant   portion   of   DPCR
2034 is annexed hereto and marked as
Annexure­A/3   (page   no.14   to   20).     A
copy   of   the   relevant   portion   of   policy
and circular dated 8.7.2021 is annexed
hereto   and   marked   as   Annexure­A/4
(Page No.21 to 31).
5. The size of new premises: (Residential)
Existing   Area   occupied   by   members:
115 to 180 sq. ft.
Eligible as per Old Policy (DCR 1991):
405 sq. ft. carpet area
Offered earlier: 429.88 sq.ft
Eligible as per new policy (DCPR 2034):
425.25 sq. ft. carpet area.
Revised offer by Development: 450 sq.ft.
6. I would also like to point out the following
further   facts   and   additional   burden   to   be
borne by the developer :
21
i) The   construction   cost   has   increased
upto approx. 50% as compared to in the
year   2013   when   the   development
agreement was undertaken. 
ii) Rs.10.60 crores approx. additional cost
towards   the   addl.   20.12   sq.ft.   carpet
area to 225 Residential members.  Total
4527   sq.ft.   and   construction   cost   at
Rs.23450/­   per   sq.mt.   (cost   with   all
premiums).   Additional   premium   on
additional construction is required to be
paid to Municipal Corporation ­ MCGM.
iii) Rs.15   crores   appx.   towards   GST
charges   on   construction   cost   which
cannot   be   adjusted   against   sales
revenue. (As from 1st  April 2019 Input
Tax Credit is not allowed for Developers)
GST is also addl. burden as this was
not contemplated in the year 2013.
iv) There is 450.59 sq.mts. set back on plot
and   thus   only   3142.41   sq.mts.   area
remains   resulting   into   planning
constraints and high density on plot for
rehab   and   sale   area   leading   to
increasing in height of rehab building
and thereby construction cost. 
v) It   also   requires   to   be   noted   that
Developer has also to bear the following
additional   costs   over   and   above   the
rehab unit cost: 
a) Each member is being paid Rs.5 lakh
over   and   above   the   rehabilitation
22
unit,   out   of   which   Rs.1.25   lakh   is
already paid in 2013.
(Total corpus fund Rs.12.30 crores of
which   Total   of   Rs.3.07   crores   is
already paid)
b) 2000   sq.ft.   fitness   centre   and
gymnasium   furnished   with   fitness
equipment’s is to be provided by the
developer to the Society.
c) 215   sq.ft.   carpet   area   of   Air
conditioned   Society   office,   is   to   be
provided. 
d) Security   cabin   and   common   toilets
are also to be provided.
e) 3 flats of 450 sq.ft. carpet area as
against   3   rooms   of   Society   and
godown of equivalent carpet area in
lieu of existing godown. 
f) A   deity   place   in   new   rehabilitation
building.
vi) An   amount   of   approximately   Rs.20
crores is already invested by the firm
since   2013,   resulting   into   cost   of
investment and interest costs.
vii) As against which the Society is enjoying
the   fixed   deposit   of   amounts
paid/deposited   and   interest   therein
since 2013.
viii) It is also required to be considered that
the   rehabilitation   building   is   to   be
23
constructed in the front side facing the
Mahadeo Palav Marg on North side and
the sale component building on the rear
side on south side. 
ix) The interest of the Society is also well
protected,   as   Developer   has   already
provided   a   Security   deposit   of   Rs.5
crores at the time of tender. And as per
New   DCPR   2034   vide   circular   dated
05.03.2021   of   Maharashtra
Government,  a Developer is bound to
give Security Deposit / Bank Guarantee
of 10% of Rehab Construction cost i.e.
approx.12,282   sq.   mtr.   x   30,250
construction cost as per Ready Recknor
of   Mumbai   for   2021­22   total   of
Rs.37,20,00,000/­   x   10%   i.e.
Rs.3,72,00,000/­.
7. I say that as per the revised proposal as
stated in Undertaking dated 7.1.2022,
the occupiers are already getting more
area   than   what   is   agreed   in   the
development agreement and also more
than what they are eligible as per the
new Policy of DCPR 2034.
8. I say that as per the calculations and
deliberations   undertaken   by   the
partners of the firm, if the area of the
rehab unit is increased from the revised
proposal   of   450   sq.ft.   carpet   area   to
residential   members   and   300   sq.ft.
carpet area to non­residential members,
as stated in the Undertaking dated: 7th
January 2022, the project would not be
financially feasible. 
24
9. I   say   that   as   per   Affidavit   dated
7.1.2022 filed on behalf of the Society
more than 60% members having already
given the consent for new proposal of
the   Developer.     The   objections   by
Vijaykumar   VitthalRao   Sarvade   and
other 11 members is not bonafide.
10. I   state   that   MHADA   has   also
issued   NOC   to   respondent   no.27   on
3.11.2021.  A copy of the NOC issued by
MHADA   to   Res.27   is   annexed   hereto
and marked as Annexure – A/5 (Page
No.32 to 38).”
15. Mr. Sanjay Rajaram Mohite, Chairman of the appellantSociety   on   behalf   of   appellant­Society   has   also   filed   an
affidavit/undertaking annexing thereto a copy of the revised
proposal dated 9th December 2021 submitted by the respondent
no.27.     He   has   stated   that   the   said   revised   proposal   was
forwarded to the members of the appellant­Society and 153
occupiers/members out of total 240 occupiers/members have
already consented to the said proposal in writing.  He has given
undertaking on behalf of the Society that the revised proposal
will remain binding on the appellant­Society.  He has reiterated
that   the   buildings   of   the   Society   are   in   very   dangerous
25
condition   and   may   collapse   any   time.     Undertaking   of   Mr.
Shripal   Babulal   Jain,   the   managing   partner   of   respondent
no.27 in terms of what is stated in the affidavit referred above,
is also placed on record along with IA no.4249 of 2022.
16. In the undertaking of the respondent no.27 given to this
Court, the details of the amenities and other benefits agreed to
be extended to the eligible members of the appellant­Society
have been specifically set out: 
“2.   The main points of the proposals given by
the deponent – Respondent No. 27 (Developer)
are as under:­
i) The size of new premises:­
A. Residential premises;
As per old policy of DCR 1991, Developer was
bound   to   provide   300   sq.ft.   plus   35%
fungible area i.e. 405 sq.ft. carpet area to
each residential eligible member.
Under the Development Agreement executed
with   Society,   the   Respondent   no.27
(Developer)   has   agreed   to   provide   429.88
sq.ft. carpet area plus 20.12 sq.ft as service
slab   to   each   Residential   member   of   the
Society.
In comparison to above two, as Developer, we
have   now   proposed   to   provide   450   sq.ft.
carpet   area   excluding   service   slab,   to   all
26
existing   eligible   Members/Occupants   of
residential   premises,   against   their   existing
carpet area of approx. 115 sq.ft. to 180 sq.ft.
B. Non­residential premises:
So   far   as   Non­Residential   users   are
concerned,   as   per   DCPR   2034   they   are
eligible   for   the   same   carpet   area   which   is
occupied by them.   However, we propose to
provide them 300 sq.ft. carpet area against
their existing occupation of 242.08 sq.ft. of
carpet area.
A table showing the existing area occupied by
the   Respondent   Nos.:   1   to   11   –   Original
Plaintiffs and the proposed area to be given
against   the   same   is   forming   part   of   the
proposal dated : 9.12.2021 as Annexure­V.
ii) Transit   Rent/Shifting/Brokerage   for
Temporary alternate accommodation:
A. For residential members:
 It   is   proposed   to   give   transit   rent   of
Rs.15,000/­ per month for first two years
of   alternative   accommodation   and
thereafter   Rs.16,500/­   per   month   with
increase   therein   at   10%   every   year   till
possession of permanent alternate rehab
residential premises is offered.
 It   is   proposed   to   give   one   time   shifting
charges of Rs. 10,000/­ for to and fro.
 It is proposed to give Rs. 30,000/­ towards
brokerage.
27
B. Transit   Rent/Shifting/Brokerage   for
Temporary alternate accommodation for
Non­residential   –   Commercial   use
members.
 It   is   proposed   to   give   Transit   Rent   of
Rs.25,000/­   per   month   with   increase
therein   at   10%   every   year   till   the
possession of permanent alternate rehab
shop is offered.
 It  is   proposed  to  give  one   time  shifting
charges of Rs. 10,000/­ for to and fro.
 It is proposed to give Rs.50,000/­ towards
brokerage.
iii) Period   for   completion   of
redevelopment project:
It is proposed to complete the redevelopment
project in stipulated time of five years as per
MHADA circular dated 5.11.2020.   The said
period of five years shall commence from the
date on which the vacant possession of entire
property is made available to the developer,
so   as   to   enable   starting   of   actual
redevelopment   on   site.     Further,   the   time
period   as   regards   obtaining   of   necessary
permissions,   and/or   stay   from   any   Court,
Tribunal   or   Authority   and/or   any   natural
calamity   and/or   Force   Majeure   events,
and/or   things   beyond   control   of   the
Developer shall stand excluded. 
iv) Corpus Fund :
(All members ­ Residential/Non­ residential):
28
The   society   being   owner   of   property,   we
propose to provide Rs.5,00,000 (Rupees Five
Lakhs)   for   each   member   i.e.,   total
Rs.12,30,00,000/­   (Rupees   Twelve   Crores
Thirty Lakhs) to the Society as Corpus Fund.
Against   that   we   have   already   paid
Rs.3,07,50,000   (Rupees   Three   Crore   Seven
Lakhs Fifty Thousand) to the Society, being
Rs.1,25,000/­   (One   Lakh   Twenty­Five
Thousand)   for   each   member   of   Society,   in
2013 on execution of Development agreement
and the balance we have to pay later. 
v) Performance   guarantee/Security
Deposit/Bank Guarantee:
As per New DCPR 2034 vide circular dated
05.03.2021   of   Maharashtra   Government,   a
Developer   is   bound   to   give   Security
Deposit/Bank   Guarantee   of   10%   of   Rehab
Construction cost i.e., approx. 12,282 sq.mtr.
x   30,250   construction   cost   as   per   Ready
Recknor   of   Mumbai   for   2021­22   total   of
Rs.37,20,00,000/­   x   10%   i.e.   Rs.
3,72,00,000/­.   We   have   already   paid
Rs.5,00,00,000/­ (Rupees Five Crores) as an
additional security deposit to Society in 2013
on execution of Development agreement. 
vi) Project Management Consultant
We propose to give Rs.3,00,00,000/­ (Rupees
Three   Crores)   to   society,   out   of   which
Rs.1,50,00,000/­   (Rupees   One   Crore   Fifty
Lakhs) we have already paid to the Society in
2013 and the balance we have to pay later.
29
vii) Parking and height of premises
We will fulfill all compliance of New DCPR
2034 and as per planning constraint.”
17. The learned Senior Counsel for the appellant­Society has
submitted that all the pending proceedings should be disposed
of   so   that   the   work   of   development   can   progress.     The
respondent no.27 has stated that the work of development will
be   completed   as   per   the   no­objection   certificate   issued   by
Mumbai   Building   Repairs   and   Reconstruction   Board   on   3rd
November 2021.
18. After perusing the affidavits and undertakings, this Court
suggested to the respondent no.27 whether the area of the
premises   admeasuring   450   sq.ft.   (carpet)   offered   to   the
members   occupying   residential   premises   and   the   area   of
premises   admeasuring   300   sq.ft.   (carpet)   offered   to   the
members   in   possession   of   non­residential   premises   can   be
increased.  In response to that, an affidavit has been filed by
the   respondent   no.27   stating   that   instead   of   premises
admeasuring 450 sq.ft (carpet area), premises having an area of
30
460 sq.ft. (carpet area) can be offered to those eligible members
who   are   occupying   residential   tenements.     A   copy   of   the
certificate   issued   by   the   Architect   of   the   appellant­Society
recording that now FSI has been increased from 4.00 to 4.31
has been placed on record.  Thus, respondent no.27 has given a
revised   offer   to   allot   residential   premises   admeasuring   460
sq.ft. of carpet area though as per old and new policy, the
entitlement of those who are holding residential premises was
to an area of 405 sq.ft and 425.25 sq.ft respectively.
19. The   proposal   of   the   respondent   no.27   takes   care   of
payment   of   reasonable   monthly   rent   to   the   members   for
acquiring temporary alternate accommodation.  It also provides
for payment of a reasonable amount towards brokerage which
is required to be paid for acquiring such accommodation.   A
provision has been made to pay a sum of Rs.10,000/­ as onetime shifting charges to each member.  The respondent no.27
has   agreed   to   create   a   corpus   fund   for   the   benefit   of   the
appellant­Society by contributing Rs.5,00,000/­ (Rupees Five
Lakhs)   per   member.   Out   of   the   total   corpus   fund   of
31
Rs.12,30,00,000/­ (Rupees Twelve crores thirty lakhs) agreed to
be   created,   the   respondent   no.27   has   already   paid   a   sum
Rs.3,07,50,000/­   (Rupees   Three   Crore   Seven   Lakhs   Fifty
Thousand)   to   the   appellant­Society.     Apart   from   the   above
provisions, a  performance  guarantee has  been  given  by the
respondent no.27.
20. According to us, adequate safeguards have been provided
to the members of the appellant­Society in the affidavit and
undertaking filed by the respondent no.27.   In addition, the
appellant­Society has undertaken to abide by the terms and
conditions   proposed   by   the   respondent   no.27.   Moreover,   a
direction can be issued to the appellant­Society to incorporate
the same terms and conditions as agreed by the respondent
no.27 in the event the appellant­Society is required to engage
another developer in place of the respondent no.27.
  
21. The response of the respondent nos.1 to 11 to the aforesaid
proposal is two­fold. Firstly, the stand is that considering the
recent enhancement in FSI, the area offered should be more.
Secondly, the development work should be entrusted to another
32
builder   as   the   respondent   no.27   does   not   have   adequate
experience.   In   the   plaint,   one   of   the   prayers   is   that   the
appellant­Society should be directed to conduct a fresh tender
process for appointing a developer. 
22.  As noted earlier, this Court would have normally sent back
the matter to the Trial Court to decide the issue of limitation.
However, we cannot ignore the serious situation created as a
result of the pendency of various proceedings from the year
2013.  Photographs produced along with IA no.11896 of 2018
show the very poor condition of the buildings of the Society.  As
stated in I.A. No.22493 of 2021 filed by the appellant­Society,
236 members of the appellant­Society are occupying structures
in   buildings   that   are   in   dilapidated   condition.   Apart   from
photographs of the structures annexed to the said application,
a   copy   of   the   notice   dated   12th  July   2019   issued   by   the
Municipal   Corporation   to   the   appellant­Society  has   been
annexed.  The notice refers to the structural audit carried out
by the Corporation in the year 2015­2016 which showed that
the buildings were falling in the C2­A category meaning thereby
33
that the buildings are required to be vacated for carrying out
immediate major repairs.  The notice records that there must
be further deterioration of the structures as repairs were not
carried out.  Therefore, the Municipal Corporation called upon
the appellant­Society to get a structural audit of the buildings
done within two months.  The Society was also called upon to
submit undertakings of the occupants that they will continue to
stay in the buildings at their own risk knowing fully well the
probable danger of collapse.  It is apparent that the buildings
are   in   a   dilapidated   condition   and   the   members   of   the
appellant­Society  are risking their own lives by occupying the
same.  Looking to the manner in which proceedings are being
contested,  the   suit   may  not   be   disposed  of   in   near  future.
Moreover,   there   are   bound   to   be   further   appeals.     In   the
meanwhile, if something goes wrong with the buildings, a large
number of families of the members will be on the streets.  Going
by the prayers in the plaint, even the respondent nos.1 to 11­
the plaintiffs want redevelopment of the property, but on their
own terms and through another developer. Moreover, a large
majority of members of the appellant­Society have accepted the
34
proposal to appoint the respondent no.27 as the developer.
They   have   also   accepted   the   proposal   submitted   by   the
respondent no.27 to this Court. 
23. Though a decision to redevelop the buildings was taken
way back in the year 2011 by the appellant­Society and though
an agreement was executed on 27th December 2012 appointing
a developer, no progress has been made in the development
work as a handful of members of the appellant­Society out of
236   members   are   opposing   the   project   of   development
undertaken through the respondent no.27.   The suit filed by
the respondent nos.1 to 11 of 2016 is not likely to be disposed
of in near future.  The issues in the suit including the issue of
limitation will have to be decided after parties are allowed to
adduce evidence.  The enormous delay in disposal of the suit
and appeals arising therefrom will cause prejudice and harm to
the   members   of   the   appellant­Society   as   they   will   have   to
continue to stay in tenements in the buildings which are in very
bad shape. This is not a usual dispute where the members are
not  ad   idem  on   the   issue   of   redevelopment.     In   this   case,
35
practically   all   the   members   of   the   appellant­Society   want
redevelopment by demolishing old buildings.   Here is a case
where   a   large   number   of   members   of   the   appellant­Society
continue to occupy dilapidated buildings by risking their lives.
Their families are being exposed to imminent danger. Therefore,
this Court cannot countenance a situation that will delay the
development   work   for   an   inordinately   long   time   due   to   the
objection by a handful of members. The majority of members
are supporting the redevelopment by the respondent no.27 on
the terms offered by the said respondent.   Therefore, in view of
the peculiar facts of the case and for protecting families of more
than 200 members of the appellant­Society, we are satisfied
that this is a fit case to exercise the plenary jurisdiction of this
Court   under   Article   142   of   the   Constitution   of   India   to   do
complete justice between the parties by giving quietus to the
pending disputes.  It is in the larger interests of more than 200
members   of   the   appellant­Society   including   the   respondent
nos.1 to 11 that the disputes are put to an end and the work of
redevelopment starts at the earliest.
36
24. To give finality and quietus to the controversy in the larger
interests of members of the appellant­Society, considering the
objection of the respondent nos.1 to 11 to the area offered by
the   respondent   no.27,   we   propose   to   direct   the   respondent
no.27 to provide residential tenements having a carpet area of
475 sq. ft. (exclusive of service slab) to the eligible members
occupying   residential   premises.   The   respondent   no.27   has
already agreed to increase the area from 450 sq.ft to 460 sq.ft.
In our view, this marginal increase in the area of the premises
to   be   allotted   to   members   having   residential   tenements   is
necessary as FSI has been substantially increased.
25.  The undertakings of the respondent no.27 sufficiently take
care of the apprehensions expressed by the respondent nos.1
to 11.  The respondent no.27 has agreed to complete the project
within five years from the date on which it receives possession
of the buildings proposed to be redeveloped.   To secure the
interest of the members, the respondent no.27 can be directed
to pay a transit rent for the period of five years in advance to all
37
the members at the time of entering into individual agreements
with   all   the   members.   The   requirement   of   executing   such
individual agreements with members has been noted in the
resolution   dated   2nd  December   2012   passed   in   the   Special
General Meeting of the appellant­Society.  Time of two months
can   be   granted   to   the   members   to   vacate   their   respective
tenements   and   hand   over   possession   thereof   the   appellantSociety from the date on which they receive transit rent for five
years as well as shifting and brokerage charges as provided in
the   undertaking   of   the   respondent   no.27.   Moreover,   the
appellant­Society be directed to ensure that the successor of
the respondent no.27 shall be bound by all the undertakings,
in the event, the appellant­Society is required to replace the
developers.
26. Unless  all   the   pending   cases   are   disposed   of,   quietus
cannot be given to the dispute. Hence, by exercising the powers
under Article 142 of the Constitution of India, the suit filed by
the respondent nos.1 to 11 will have to be disposed of and the
criminal complaint filed by them needs to be quashed. The
38
respondent   nos.30  to  38  are  various  authorities/officers.  In
view  of  this Order, they shall  not entertain  any complaints
made by the respondent nos.1 to 11 in connection with the
redevelopment project.  In the event, the respondent no.27 or
the appellant­Society commit any breach of the undertakings
given to this Court or any breach of directions of this Court, the
respondent   nos.1   to   11   can   always   move   the   Court   for
appropriate   relief   for   enforcement   of   the   undertakings   and
directions issued by this Court.  If the respondent nos.1 to 11
commit any breach of the directions contained in this Order,
the   appellant   and/or   the   respondent   no.27   can   adopt
appropriate proceedings for the enforcement of the directions.
27. We,   therefore,   dispose   of   this   appeal   by   passing   the
following order:
(i) We   take   on   record   the   undertakings   of   the
respondent no.27 given through Mr. Shripal Babulal
Jain, its managing partner which is of 7th  January
2021   as   well   as   the   assurances   contained   in   his
affidavit dated 17th January 2021 and Undertaking of
39
the appellant­Society in affidavit dated 7th  January
2022 of Mr. Sanjay Rajaram Mohite;
(ii) The undertakings of the appellant­Society and the
respondent no.27 are taken on record as aforesaid
with   a   modification   that   the   area   of   residential
premises to be provided to all eligible members of the
appellant­Society   occupying   residential   premises
shall be 475 sq.ft. of carpet area (exclusive of service
slab); 
(iii) In   the   event,   the   appellant­Society   is   required   to
replace the present developer, while entering into a
development agreement with  the new developer, a
clause   shall   be   added   therein   incorporating   an
undertaking of the new developer that he shall abide
by the directions contained in this Order.
(iv) The respondent no.27 shall offer transit rent for the
period of five years, shifting charges and brokerage
as   mentioned   in   paragraph   2(ii)   (A   and   B)   of   its
undertaking quoted in paragraph 16 above to all the
eligible   members   within   maximum   period   of   two
40
months from today.   At the time of payment of the
said amounts to the members, the respondent no.27
and the appellant­Society shall enter into agreements
with individual members for allotment of premises in
the new buildings free of cost. Within a maximum
period   of   two   months   from   the   receipt   of   the
aforesaid amounts, the respondent nos.1 to 11 shall
hand over the vacant possession of the premises in
their respective possession to the appellant­Society
and/or the respondent no.27;
(v) The   entire   project   shall   be   completed   by   the
respondent no.27 as expeditiously as possible. The
outer limit for completion of the project shall be five
years from the date on which the respondent no.27 is
placed   in   possession   of   all   the   tenements   in   the
buildings proposed to be demolished. The possession
of the premises in reconstructed building shall be
handed over to the eligible members within the said
outer limit of five years;
41
(vi) Long   Cause   Suit   no.575   of   2016   filed   by   the
respondent nos.1 to 11 in the City Civil Court at
Mumbai shall stand disposed of in view of this Order;
(vii) Complaint   No.1501270/Misc./2017   filed   by   the
respondent nos.1 to 11 pending before the Court of
the learned 15th  Metropolitan Magistrate, Mazgaon,
Mumbai shall stand quashed;
(viii) If the appellant­Society or the respondent no.27 or
directions issued by this Order or undertakings given
by   them,   the   respondent   nos.1   to   11   are   free   to
initiate appropriate proceedings in accordance with
law for enforcing the directions issued by this Court
including the undertakings. Similarly, on the failure
of the respondent nos.1 to 11 or any of them to abide
by the directions issued in terms of this Order, the
appellant­Society and/or the respondent no.27 are
free to initiate appropriate proceedings in accordance
with law. 
42
28.      The   Civil   Appeal   stand   disposed   of   with   the   above
directions.    All  the pending  applications,  if  any, also  stand
disposed of.            
…………..…………………J
(AJAY RASTOGI)
…………..…………………J
(ABHAY S. OKA)
New Delhi;
February 08, 2022. 

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

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