Case Note & Summary
The dispute arose from agreements for sale dated 07.01.2004 executed by Darshan Developers, a proprietorship of the respondent, in favour of the petitioners for two flats (Flat No. 601 admeasuring 765 sq.ft. and Flat No. 602 admeasuring 720 sq.ft.) in Mumbai. The petitioners paid Rs. 59 lakhs out of total consideration of Rs. 67 lakhs. The respondent repeatedly delayed possession, initially citing lack of permission from Civil Aviation Department, later claiming permission was granted but still failing to hand over the flats. Petitioners invoked the arbitration clause on 15.05.2014 and filed Arbitration Petition No. 1359 of 2014 on 28.08.2014. The petition was disposed of by consent terms dated 10.10.2014, wherein the respondent gave undertakings to complete construction and hand over possession within nine months. The Court Receiver was appointed to supervise construction, the respondent was made its agent, and the petitioners deposited Rs. 30 lakhs. Despite this, the respondent failed to complete the flats and obtain occupancy certificate, leading the petitioners to file Contempt Petition (L) No. 84 of 2017 alleging willful breach of consent terms and court receiver directions. During pendency, the Court Receiver reported that construction was completed but occupancy certificate remained pending due to property card issues. Petitioners then filed Notice of Motion (L) No. 2598 of 2018 seeking directions for obtaining occupancy certificate. The court found that the respondent had not even applied for a property card despite claiming compliance; prima facie contempt was made out and a contempt notice was issued under the Bombay High Court (Original Side) Rules, 1980. Later, property cards were processed and handed over to the respondent on 15.01.2020, and the respondent was to apply for occupancy certificate within three weeks, with BMC to process within six weeks. The matter remained pending with show cause notices issued in 2022. The core legal issues were whether the breach of undertakings constituted contempt, whether failure to apply for a property card amounted to willful default, and whether directions to authorities were appropriate. Petitioners argued willful breach; respondent denied and blamed the Collector for not issuing property cards; State and BMC representatives acknowledged processing. The court examined the sequence, noted the respondent's admitted failures, found no application for property card, issued prima facie contempt notice, and directed statutory compliance. Final contempt determination was not included in the available text, but the court issued notice and directions.
Headnote
A) Contempt of Court - Breach of Undertakings - Article 215, Constitution of India and Contempt of Courts Act, 1971 - Undertakings given to court in consent terms are binding and violation attracts contempt proceedings; respondent admitted failure to complete flats and obtain occupancy certificate despite release of funds and repeated directions - Held that prima facie case of contempt was made out against respondent for non-compliance, leading to issuance of contempt notice under Bombay High Court (Original Side) Rules, 1980 (Paras 1-9). B) Civil Procedure - Consent Terms and Court Receiver - Not mentioned - Consent terms in arbitration petition appointed Court Receiver as construction supervisor and respondent as agent; respondent failed to complete flats within stipulated nine months and comply with directions - Held that willful breach of consent terms and court receiver directions constituted contempt (Paras 4-6). C) Municipal Law - Occupancy Certificate and Property Card - Not mentioned - Requirement of separate property card as condition for issuance of occupancy certificate was clarified by court; respondent falsely claimed compliance but had not applied for property card - Held that failure to take necessary steps to obtain property card prima facie demonstrated contempt and justified directions to Collector and Municipal Corporation to issue property cards and process occupancy certificate (Paras 8-11).
Issue of Consideration
Whether respondent's willful breach of consent terms and failure to obtain occupancy certificate constituted contempt of court; whether failure to apply for property card despite claiming compliance justified issuance of contempt notice; whether directions could be issued to Collector and Municipal Corporation to enable compliance
Final Decision
The court recorded prima facie contempt and directed issuance of contempt notice to respondent; it directed Collector to issue property cards and Municipal Corporation to process occupancy certificate. The final decision on contempt was not included in the provided excerpt.
Law Points
- Undertakings given to court are binding and enforceable through contempt jurisdiction
- breach of consent terms and court receiver directions constitutes contempt under Article 215 and Contempt of Courts Act
- 1971
- issuance of property card is prerequisite for occupancy certificate
- failure to apply for property card prima facie amounts to contempt
- court can direct statutory authorities to facilitate compliance
