Case Note & Summary
The appeals arose from a judgment of the Learned Single Judge dated 16 September 2013 in a motion taken out by the first respondent (developer) in a suit seeking enforcement of a redevelopment agreement. The suit property was a co-operative society where an overwhelming majority of members had consented to the redevelopment, vacated their premises, and executed tripartite agreements. However, 14 appellants in the first appeal and 11 in the second appeal (non-consenting members) refused to vacate or execute the agreements. The developer sought directions to facilitate redevelopment. The Learned Single Judge appointed the Court Receiver, High Court, Bombay, as Receiver of the suit property, directed the developer to furnish a bank guarantee and make payments to non-co-operating members, directed the society to hand over flats in its possession to the Receiver, and directed non-co-operating members to execute tripartite agreements and hand over possession of their flats to the Receiver, with forcible possession if necessary. The appellants challenged these directions. The Division Bench upheld the Single Judge's order, finding that the overwhelming majority having acted in fulfillment of the agreement, the non-consenting members could not obstruct the process. The court noted that the developer had complied with the condition of furnishing a bank guarantee and making payments. The appeals were dismissed, and the impugned directions were confirmed.
Headnote
A) Civil Procedure - Appointment of Court Receiver - Order XL Rule 1 CPC - Court Receiver appointed to take possession of suit property to facilitate redevelopment where overwhelming majority of society members had consented and vacated - Non-consenting members directed to hand over possession to Receiver who would then hand over to developer - Held that appointment of Receiver was proper to prevent obstruction and ensure implementation of redevelopment agreement (Paras 1-6).
B) Property Law - Redevelopment Agreement - Co-operative Society - Non-Consenting Members - Where majority of members of a co-operative society have consented to a redevelopment agreement and vacated their premises, non-consenting members cannot obstruct the redevelopment process - Court can direct possession to be handed over through Court Receiver to developer - Held that the interests of non-consenting members are protected by requiring developer to furnish bank guarantee and make payments as per agreement (Paras 2-6).
Issue of Consideration
Whether the Learned Single Judge was justified in appointing a Court Receiver and directing non-consenting members of a co-operative society to hand over possession of their flats to facilitate redevelopment, despite their opposition.
Final Decision
The appeals were dismissed. The impugned directions of the Learned Single Judge were confirmed. The Court Receiver was to continue as Receiver, and the developer was to comply with the conditions regarding bank guarantee and payments.
Law Points
- Redevelopment agreement
- Court Receiver
- possession
- non-consenting members
- co-operative society
- developer
- obstruction
- bank guarantee
- tripartite agreement
Case Details
Appeal (Lodg.) No.390 of 2013 with Notice of Motion (Lodg.) No.1904 of 2013 and Appeal (Lodg.) No.391 of 2013 with Notice of Motion (Lodg.) No.1905 of 2013
Dr. D.Y. Chandrachud, M.S. Sonak
Mr. Girish Godbole with Mr. Drupad Patil and Mr. Sumeet Kothari, Mr. Parag Tilak and Ms. Neha Valsangkar for the Appellants; Mr. Aspi Chinoy, Senior Advocate with Mr. Sanjay Jain, Mr. Nishant Sasidharan, Mr. Kalpesh Mehta, Mr. Vasim Shaikh i/b Pravin Mehta and Mithi & Co. for Respondent No.1; Mr. D.D. Madon, Senior Advocate with Mr. Chetan Kapadia and Mr. Farhan Dubash i/b Mr. Tushar Goradia and Ms. Kausar Banatwala for Respondent No.15 in Appeal (Lodg.) 390 of 2013 and for Respondent No.22 in Appeal (Lodg.) 391 of 2013
Shailaja S. Godbole and others (in Appeal 390/2013); Jaysen S. Mastakar and others (in Appeal 391/2013)
Disha Constructions and others
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Nature of Litigation
Appeals against a judgment of the Learned Single Judge in a motion seeking enforcement of a redevelopment agreement.
Remedy Sought
The developer (first respondent) sought directions to facilitate redevelopment, including appointment of a Court Receiver and orders for non-consenting members to vacate.
Filing Reason
Non-consenting members of a co-operative society refused to vacate their flats or execute tripartite agreements, obstructing the redevelopment process despite overwhelming majority consent.
Previous Decisions
The Learned Single Judge appointed a Court Receiver and directed non-consenting members to hand over possession, which was challenged in these appeals.
Issues
Whether the appointment of a Court Receiver and directions for possession were justified in a redevelopment dispute where majority members consented.
Whether non-consenting members can be compelled to vacate and execute agreements to facilitate redevelopment.
Submissions/Arguments
Appellants argued that the directions were excessive and violated their rights as members of the society.
Respondent developer argued that the overwhelming majority had consented and the non-consenting members could not obstruct the redevelopment.
Ratio Decidendi
Where an overwhelming majority of members of a co-operative society have consented to a redevelopment agreement and vacated their premises, non-consenting members cannot obstruct the redevelopment process. The court can appoint a Court Receiver to take possession and hand it over to the developer, subject to compliance with conditions such as furnishing a bank guarantee and making payments to non-consenting members.
Judgment Excerpts
An overwhelming majority of the existing members of the co-operative society having acted in fulfillment of the agreement between the society and the developer and having vacated their premises to facilitate redevelopment, the Learned Single Judge issued the impugned directions in the suit of the developer.
These directions are intended to ensure that the non-consenting members of the society (14 Appellants in the first appeal and 11 in the second ) do not obstruct the process of redevelopment.
Procedural History
The developer filed Suit No.397 of 2013 seeking enforcement of a redevelopment agreement. A Notice of Motion No.859 of 2013 was taken out by the developer. The Learned Single Judge passed an order on 16 September 2013 appointing a Court Receiver and directing non-consenting members to vacate. The appellants filed Appeals (Lodg.) No.390 of 2013 and 391 of 2013 against that order. The Division Bench heard the appeals and delivered judgment on 3 October 2013.
Acts & Sections
- Code of Civil Procedure, 1908 (CPC): Order XL Rule 1
