Case Note & Summary
The appellant, M/s. Atishay Realtors Pvt. Ltd., a developer, filed an appeal against an order of the City Civil Court, Mumbai, which granted ad-interim relief in favor of the respondents, a proposed cooperative society and its promoters (flat purchasers). The respondents had filed a suit for declaration that they are the owners of the suit property and for permanent injunction restraining the appellant from creating third-party rights or interfering with their possession. The trial court, by order dated 30th October 2018, granted ad-interim relief in terms of prayer clause (a) of the Notice of Motion, which restrained the appellant from creating any third-party rights or interfering with the respondents' possession. The appellant challenged this order on the ground that the suit was not maintainable due to the bar under Section 164 of the Maharashtra Cooperative Societies Act, 1960, and that the respondents had no prima facie case. The High Court, after hearing both sides, dismissed the appeal. It held that the suit was maintainable as the dispute did not relate to the management or business of a registered society but concerned the rights of flat purchasers under the Maharashtra Ownership Flats Act, 1963. The court noted that the respondents had paid consideration and were in possession of the flats, and thus had a right to seek specific performance and injunction. The court found that the trial court had correctly exercised its discretion in granting ad-interim relief, as the respondents had made out a strong prima facie case and the balance of convenience was in their favor. The appeal was dismissed, and the interim relief was confirmed.
Headnote
A) Civil Procedure - Maintainability of Suit - Bar under Section 164 of Maharashtra Cooperative Societies Act, 1960 - The court held that a suit by a proposed cooperative society against a developer for declaration and injunction relating to land and development rights is not barred under Section 164 as the dispute does not relate to the management or business of a registered society but concerns rights of flat purchasers under the Maharashtra Ownership Flats Act, 1963. (Paras 6-8) B) Property Law - Agreement for Development - Rights of Flat Purchasers - The court held that flat purchasers who have paid consideration and are in possession have a right to seek specific performance and injunction against the developer, and the proposed society can maintain a suit for protection of their rights. (Paras 9-10) C) Injunction - Prima Facie Case - Balance of Convenience - The court upheld the trial court's ad-interim injunction restraining the developer from creating third-party rights or interfering with possession, finding that the flat purchasers had made out a strong prima facie case and balance of convenience was in their favor. (Paras 11-12)
Issue of Consideration
Whether the suit filed by a proposed cooperative society and its promoters for declaration and permanent injunction against a developer is maintainable in civil court despite the bar under Section 164 of the Maharashtra Cooperative Societies Act, 1960, and whether the trial court's grant of ad-interim injunction was justified.
Final Decision
The High Court dismissed the appeal and confirmed the ad-interim relief granted by the trial court.
Law Points
- Suit for declaration and permanent injunction
- maintainability of suit by proposed cooperative society
- jurisdiction of civil court
- bar under Section 164 of Maharashtra Cooperative Societies Act
- 1960
- interpretation of agreement for development
- rights of flat purchasers
- prima facie case
- balance of convenience
- irreparable loss
