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HOUSING SOCIETY CAN NOT BE FORCED TO GIVE DEVELOPMENT RIGHTS TO A DEVELOPER

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL NO.335 OF 2012 IN
NOTICE OF MOTION NO.1394 OF 2012
IN
SUIT NO.1330 OF 2012

Mr.Gopi Gorwani... Appellant
VERSUS
Jeevan Prabha CHS Ltd and ors... Respondents

Mr.Venkatesh Dhond, Senior Advocates i/b Raval Shah & Co for appellant.
Mr.Sanjay Jain i/b Mustafa Kachwala, for Respondent No.1
Mr.Simil Purohit i/b Ganesh & Co., for Respondent No.3

CORUM M: MOHIT S. SHAH, Chief Justice
&
N.M. JAMDAR Justice

Thursday, August 30, 2012.

1.     This appeal filed by the original plaintiff takes exception to the order passed by the trial Judge of this Court dated 4 April 2012 dismissing the Notice of Motion taken out by the appellant praying for an order of injunction pending the suit.

2.     The appellant is a Developer. The appellant filed the Suit bearing No.1330 of 2012 praying for a declaration that there is a subsisting and binding contract between the appellant and respondent No.1/Jeevan Prabha Co-operative Housing Society Ltd. (hereinafter 'Society' for short) for redevelopment of a building situate at plot no.104, 4th Road, T.P.S. IV, Bandra (west) Mumbai. The appellant based his claim on the resolutions dated 31 March 2011 and 26 June 2011 passed by the Society.

3.     The appellant contended that in view of the resolutions passed by the Society and the correspondence entered into between the parties, there is a concluded contract between the Society and the appellant. Appellant contended in the suit that in-spite of the concluded contract, the Society in a Special General Meeting held on 22 July 2011 unanimously passed a resolution that the appellant is not to be awarded a contract of redevelopment of the Society's property. The plaintiff took out a Notice of Motion bearing No.1394 of 2012, praying for appointment of a receiver and for a direction that the Society be ordered not to deal with any other Developer in respect of the redevelopment of the Society premises.

4.     The learned trial Judge after considering the rival contentions came to a prima facie conclusion that there is no concluded contract between the parties. The draft agreement itself showed that the contract was not finalized. The learned Judge also noted that the Society had executed a Development Agreement on 5 March 2012 with another Developer i.e. respondent No.3.

5.     The learned Judge found that for loss of profit and for the work executed, if any, at the most the appellant can have a money claim and thus no order of injunction is necessary. The learned trial Judge accordingly dismissed the Notice of Motion by his order dated 4 April 2012.

6.     The appellant thus is in appeal before us. We have heard Shri V.R. Dhond, the learned senior counsel for the appellant, Mr. Sanjay Jain learned counsel for the Society, Mr. Simil Purohit learned counsel for the respondent No.3, the new Developer.

7.     Mr. Dhond, learned senior counsel submitted that the finding of the learned trial Judge that there is no concluded contract is erroneous. The learned counsel drew our attention to the resolution dated 31 March 2011 passed in the Special General Meeting of the Society. According to learned counsel a decision was taken to appoint the appellant Developer. Learned counsel submitted that after this decision, the appellant acted on the said resolution and resolved certain pending issues with the occupants of the flats and the garage.

8.     Learned counsel submitted that the appellant invested his time, energy and money in clearing off the obstacles for the redevelopment of the property. The appellant also obtained No Objection Certificate from the Deputy Registrar of Cooperative Housing Societies and thus for all practical purposes the Society had entrusted the work of redevelopment to the appellant.

9.     It was urged by the learned counsel that in view of this contract the appellant is entitled to specific performance and interim protection during the pendency of the suit. On the other hand, Mr. Jain for the Society contended that though there was a resolution in favour of the appellant, it was only a preliminary decision and the Society had not finally decided to entrust the work of redevelopment to the appellant.

10.   The learned counsel supported the order passed by the learned trial Court. Learned counsel also drew our attention to the letter July 2011 written to the appellant in which the Society had pointed out to the appellant that there were several inconsistencies, contradictions in the draft Development Agreement submitted by the appellant. In the said letter the Society had also made a grievance that the appellant had unilaterally tried to take over the garage from a member when the appellant was only entitled to negotiate the price and the Society had lost confidence in the appellant.

11.   Having heard the rival contentions, we are of the view that the learned trial Judge was right in coming to a conclusion that the Notice of Motion deserved to be dismissed. Prima facie, the correspondence entered in to between the parties clearly indicates that the Development Agreement between the parties was not signed. Before the Development Agreement could be signed the Society decided by its resolution dated 22 July 2012 not to continue with the appellant as their Developer. Thus the Society decided not to enter into any agreement with the appellant. The initial resolution dated 31 March 2011; it appears, was merely a decision to explore the possibility of redevelopment through the appellant.

12.   This resolution and subsequent correspondence indicates that final decision of entrustment of development work to the appellant was yet to be taken. The learned trial Judge has rightly held that the contention of the appellant may at the most give rise to a money claim for damages. Ultimately the work of redevelopment of a Housing Society is such that the Society must have confidence in its Developer.

13.   Once the members of the Society had by a unanimous resolution, before executing the final agreement, decided not to get the premises developed through the appellant, the Society cannot be forced to get the redevelopment work done through appellant when prima facie there is no concluded contract. The balance of convenience is also not in favour of the appellant as work of redevelopment is now already entrusted to respondent No.3.

14.   During the appeal proceedings we had suggested the parties to amicably resolve the dispute however the talks between the parties did not fructify into a mutually accepted solution.

There is no merit in this Appeal which is dismissed.

CHIEF JUSTICE
N.M.JAMDAR

 

 

 

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