Bombay High Court
M/S. Asha Developers Thr. Mr. Gobind … vs M/S. Pyramid Land Developers Thr. Its … on 18 December, 2024
2024:BHC-AS:50532
Digitally AO.713.2024-J.doc
signed by
ANANT
ANANT KRISHNA
KRISHNA NAIK
NAIK Date: IN THE HIGH COURT OF JUDICATURE AT BOMBAY
2024.12.21
18:26:43
+0530
CIVIL APPELLATE JURISDICTION
APPEAL FROM ORDER NO. 713 OF 2024
WITH
INTERIM APPLICATION NO. 13827 OF 2024
M/s. Pyramid Land Developers )
A partnership firm, registered under )
The Indian Partnership Act, 1932, )
Through its Partner Mr. Abdul Hamid )
Mapkhan Shah, aged 59 years, Occ. )
Business, having address at 102, B-3, )
Mapkhan Nagar, Marol, Andheri (E), )
Mumbai - 400059 ) ...Appellant/Applicant
VERSUS
1. Mr. Shivnarayan Acchaibar Singh. )
Age: 63 years, Retired Indian Inhabitant )
r/a: Building No. 43, Room No. 630, )
Transits Camp, Cuffe Parade, Colaba, )
Mumbai - 400005 )
2. Mr. Brijnarayan Acchaibar Singh )
Age: 60 years, Occ: Agriculturist, )
Indian Inhabitant, through his C.A. )
Mr. Shivnarayan Acchaibar Singh, )
Age: 63 years, Retired Indian Inhabitant, )
r/a. Building No. 43, Room No. 630, )
Transit Camp, Cuffe Parade, Colaba, )
Mumbai - 400005 ) ...Respondents
WITH
INTERIM APPLICATION NO. 15378 OF 2024
IN
APPEAL FROM ORDER NO. 713 OF 2024
M/s. Asha Developers )
Through Authorized Representation )
Mr. Gobind Surinder Mittal, Age 29 )
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Krishna Regency, Plot No. 40 )
Sector 30, Near Sanpada Rly. Stn )
Vashi, Navi Mumbai - 400705 )...Applicant/Intervener
IN THE MATTER BETWEEN
M/s. Pyramid Land Developers )
A partnership firm, registered under )
The Indian Partnership Act, 1932, )
Through its Partner Mr. Abdul Hamid )
Mapkhan Shah, aged 59 years, Occ. )
Business, having address at 102, B-3, )
Mapkhan Nagar, Marol, Andheri (E), )
Mumbai - 400059 ) ...Appellant/Applicant
VERSUS
1. Mr. Shivnarayan Acchaibar Singh. )
Age: 63 years, Retired Indian Inhabitant )
r/a: Building No. 43, Room No. 630, )
Transits Camp, Cuffe Parade, Colaba, )
Mumbai - 400005 )
2. Mr. Brijnarayan Acchaibar Singh )
Age: 60 years, Occ: Agriculturist, )
Indian Inhabitant, through his C.A. )
Mr. Shivnarayan Acchaibar Singh, )
Age: 63 years, Retired Indian Inhabitant, )
r/a. Building No. 43, Room No. 630, )
Transit Camp, Cuffe Parade, Colaba, )
Mumbai - 400005 ...Respondents
****
Mr. Aliabbas Delhiwala a/w Mr. Pratik Shah, Adv. Trishala Sailish i/b L R &
Associates for the Appellant.
Mr. A. N. Narula (through VC) a/w Adv. Sushil Chaurasia, Adv. U. M. Shukla
i/b SKC Legal for Respondents.
Mr. Mohit H. Sant for the Intervenor in IA/15378/2024.
****
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CORAM : M. M. SATHAYE, J.
DATED : 18th DECEMBER 2024
JUDGMENT:
1. Learned Counsel for the parties where heard finally on 04/12/2024
and the matter is placed today for passing order.
2. The Appeal from Order is filed challenging the order dated
22/07/2024 passed by City Civil Court, Borivali Division, Dindoshi in Notice
of Motion No. 1623 of 2024 in S.C. Suit No. 2606 of 2023. By the said
impugned order, the Motion taken out by the Respondents/Plaintiffs is
allowed, thereby restraining the present Appellant or anybody claiming
through it from using the Conveyance Deed dated 26/05/2023 as title
document and the Appellant is further restrained from alienating the suit
property.
BACKGROUND
3. Few facts necessary for disposal of this Appeal from Order are as
under.
4. The Respondents/Plaintiffs are owners of the suit property. The suit
property was declared as slum in April 2007. The Respondents entered into
Registered Development Agreement (DA) and Power of Attorney (POA)
dated 12/07/2007 with the Appellant for monetary consideration and flats
totally admeasuring 1000 sq.ft. carpet area in the proposed building to be
constructed. The amount of Rs.20.00 Lakhs was paid. Around the same time,
the Appellant came to be appointed as developer by Laxmi Krupa (SRA) Co-
operative Housing Society, which was the slum society on the subject matter
property. Since the Appellant did not implement the slum scheme and which
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resulted into loss of trust, faith and confidence in the Appellant, the said
slum society filed an application before the Competent Authority u/s. 13 (2)
of the Maharashtra Slum Areas (Improvement, Clearance and
Redevelopment) Act, 1971 (for short “the Slum Act“) for
termination/removal of the Appellant as developer. On 04/04/2015, the
Respondents/Owners terminated the Development agreement and Power of
Attorney (POA), which was executed in favour of the Appellant for the same
reason of not taking serious steps towards development of the property.
5. On 20/04/2015, the Appellant acknowledged the receipt of the said
letter of cancellation/termination/revocation of the agreement as well as
POA of the year 2007. Admittedly, this cancellation/termination by the
owners is not challenged by the Appellant till date. On 29/10/2015,
pursuant to the Application by slum society, the Chief Executive Officer
(CEO), Slum Rehabilitation Authority (‘SRA’ for short), terminated the
appointment of Appellant as developer and granted liberty to the slum
society to appoint new developer. It was directed that the costs incurred by
the Appellant shall be reimbursed by the new developer appointed by slum
society.
6. The slum society thereafter appointed M/s. Asha Developers
(Intervener in IA/15378/2024) as new developer for the implementation of
the SRA scheme. The new developer thereafter issued letter to the Appellant
and requested to supply details of the legal expenses incurred by the
Appellant, however, the Appellant did not respond. In June 2016, the
Appellant filed Appeal No. 148/2016 before the Apex Grievance Redressal
Committee (AGRC) against termination order dated 29/10/2015 passed by
the CEO, SRA after a long delay and without filing any delay condonation
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Application. During the pendency of this Appeal, the Slum Authority issued
Letter of Intent (LOI), Intimation of Approval (IOA) and revised LOI in
favour of the new developer. This took place from July 2018 to January
2021. In April, 2021 amended plans came to be issued in favour of the new
developer. At this stage, after a period of 6 years, the Appellant again moved
to AGRC for the stay on the SRA scheme. The AGRC rejected the prayer of
stay, observing that the Appeal as well as stay is being pressed at belated
stage and when the new developer is already appointed and significant
further development has already taken place with the new developer.
7. On 27/06/2022, the Respondents issued a letter to the Appellant
which was without prejudice communication invoking arbitration and
calling upon the Appellant to nominate arbitrator, clearly indicating that the
Respondents will be raising a claim of damages for loss of promised
residential flats, which the Respondent lost due to non-performance on the
part of the Appellant. In response to this letter, the Appellant issued a letter
dated 19/12/2022 expressing hope that the Respondents will still approve
and execute the Conveyance Deed. On 26/05/2023, the Appellant got
executed a Conveyance Deed in its own favour using the POA of
12/07/2007.
8. In these circumstances, the Respondents have filed the present suit
challenging the said conveyance dated 26/05/2023.
9. The Respondents have already transferred and sold suit property in
favour of the new developer through registered conveyance and have further
executed registered POA in favour of the new developer on 17/01/2024. In
the meantime, all slum dwellers have shifted to the transit accommodation
for which new developer have been paying transit rent. Since the Appellant
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was creating obstruction and hindrance in the development work, claiming
to be owner under the impugned conveyance dated 26/05/2023, the present
notice of motion was filed and pressed.
10. On 04/07/2024, the Trial Court allowed the deletion of prayer clauses
(a) and (b) of the Plaint at the instance of the Respondents for abandoning
part of the claim. The impugned order is passed on 22/07/2024 and
thereafter when the Appeal before the AGRC was listed in October 2024, the
Appellant simply sought adjournment. As on today, the Slum Authority has
granted conveyance certificate in favour of the new developer and they have
already commenced construction activities on the suit property in
accordance with law and the process of implementation of the slum scheme,
is in progress.
SUBMISSIONS
11. Learned Counsel for the Appellant, Mr. Delhiwala submitted that the
impugned order amounts to granting final relief at the stage of motion in as
much as the Appellant is restrained from using the impugned Conveyance
Deed as title document. He submitted that as late as in December, 2022 the
parties were negotiating for completion of the transaction and draft of
convenance deed was exchanged. He submitted that registered POA of 2007
in favour of the Appellant cannot be cancelled by issuance of notice or letter
and unless the registered document is executed for cancellation/revocation,
the POA of 2007 is valid and it stands and therefore, conveyance executed in
favour of the Appellant using such legal and valid POA of 2007 cannot be
considered as illegal and injunction cannot be granted restraining use of
such Conveyance Deed as title document. He submitted that the impugned
order is perverse and is passed in ignorance of legal and valid power of
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attorney in its favour. He submitted that since the Appellant is having
interest in the suit property, the alleged termination / revocation /
cancellation at the hands of the Respondents/Owners is illegal in view of
Section 202 of the Indian Contract Act, 1872.
12. He relied upon the following judgments in support of his claim.
(a) State of H. P. and Others vs. Anant Ram Negi and Others1
(b) S. R. Tewari vs Union of India & Anr2
(c) H. B. Gandhi, Excise and Taxation Officer-cum-Assessing
Authority, Karnal & Ors. vs. M/s. Gopi Nath & Sons and Others3
(d) Seth Loon Karan Sethiya vs. Ivan E. John & Ors.4
(e) Shanti Budhiya Vesta Patel & Ors. vs. Nirmala Jayprakash
Tiwari & Ors.5
(f) P. Venkata Ravi Kishore & Anr. vs. JMR Developers Pvt. Ltd.6
(g) Chandrama Singh and Ors. vs. Mirza Anis Ahmad7
(h) Supreme Court Bar Association & Ors. vs. B. D. Kaushik8
(i) Raja Khan vs. Uttar Pradesh Sunni Central Waqf Board & Anr.9
13. On the other hand, learned Counsel for the Respondents, Mr. Narula
submitted that final relief is not granted under the impugned order, in as
much as final relief prayed in the suit is for setting aside the impugned
Conveyance Deed dated 26/05/2023. He submitted that the impugned
Conveyance Deed is challenged on the ground that POA of 2007 used in
executing that conveyance of 2023 is already cancelled/terminated. He
submitted that the termination of POA of 2007 under letter/notice dated
04/05/2015 is not challenged by the Appellant and therefore, on the date of
1 2018 SCC OnLine HP 1237
2 (2013) 6 SCC 602
3 1992 Supp (2) SCC 312
4 1968 SCC OnLine SC 252
5 (2010) 5 SCC 104
6 2022 SCC OnLine TS 3387
7 2011 SCC OnLine All 528
8 (2011) 13 SCC 774
9 (2011) 2 SCC 741
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impugned convenance deed, the POA of 2007 could not have been used. He
submitted that necessary proceedings u/s 13(2) of the Slum Act has been
already adopted and the authority of the Appellant as old developer has
been terminated by following due process of law and thereafter with the
permission of the concerned authority, the new developer / intervener has
been appointed, who has taken work forward including issuance of LOI,
IOA, revised LOI and even amended plans are issued in favour of the new
developer. He submitted that if the clauses of the POA of 2007 are
considered, there is no interest created in favour of the Appellant and as
such, the termination is legal and valid. He submitted that there are as many
as 31 slum dwellers who are occupying transit accommodation and it is
necessary that the rehabilitation work and SRA scheme is not stalled.
14. Learned Counsel for the Respondents further submitted that the old
developer has not developed the property and when the slum dwellers as
well as owners have lost faith and confidence in him, and when the new
developer is appointed by terminating the authority of the old developer by
following due process of law, the old developer cannot be allowed to foist
itself either on the owners or slum dwellers.
15. Learned Counsel for the intervener/new developer submitted that
order of removal of the Appellant (old developer) was challenged by the
Appellant belatedly. He submitted that the intervenor has been appointed as
new developer with the permission of the Statutory Authority, who has
invested considerable amount in taking the scheme forward. He submitted
that new developer is paying transit rent to all the slum dwellers, who are
shifted in the transit accommodations and as such, it is necessary to
continue the restraint upon the Appellant, who is creating hindrance and
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obstacles in the development work, claiming to be the owner on the basis of
impugned Conveyance Deed.
16. He submitted that the balance of convenience and irreparable loss is
not at all in favour of the Appellant. He pointed out that commencement
certificate in favour of the intervener (new developer) has already been
granted on 12/11/2024 and the development work should not be stalled.
17. Learned Counsel for the Respondents and Intervener, both have relied
upon the judgment of Wander Ltd. And Another vs. Antox India P. Ltd. 10 and
Ramakant Ambalal Choksi Vs. Harish Ambalal Choksi 11 and submitted that
the discretion which is exercised by the Trial Court while passing the
impugned order, should not be substituted by the discretion of this Court.
18. Learned counsel for the Respondents / Owners have also relied upon
judgments in Swashray Co-Op. Housing Society Ltd Vs. Shanti Enterprises 12
and Prithvi Infra Projects Vs. Apex Grievace Redressal Committee and Hrub
Construction LLP Vs. Apex Grievace Redressal Committee13 in support of his
case that a developer can not foist itself upon the owner / slum dwellers
after prolonged inaction and termination of its authority.
REASONS AND CONCLUSIONS
19. At the outset, it is important to keep in mind that this Court is
exercising the Appellate jurisdiction under Order 43 of the Civil Procedure
Code, 1908 at the interim stage of the suit.
20. In Wander Ltd. And Another vs. Antox India P. Ltd (supra), the Hon’ble
10 1990 (Supp) SCC 737
11 2024 SCC OnLine SC 3538
12 Neutral Citation – 2023 : BHC-OS:3075
13 2024(5) Bom.C.R. 860
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Supreme Court has laid down the law in respect of substitution of discretion
by the Appellate Court in place of discretion already exercised by the Trial
Court. Paragraph no. 14 of the said judgment reads thus:
“14. The appeals before the Division Bench were against the
exercise of discretion by the Single Judge. In such appeals, the
appellate court will not interfere with the exercise of discretion of the
court of first instance and substitute its own discretion except where
the discretion has been shown to have been exercised arbitrarily, or
capriciously or perversely or where the court had ignored the settled
principles of law regulating grant or refusal of interlocutory
injunctions. An appeal against exercise of discretion is said to be an
appeal on principle. Appellate court will not reassess the material
and seek to reach a conclusion different from the one reached by the
court below if the one reached by that court was reasonably possible
on the material. The appellate court would normally not be justified
in interfering with the exercise of discretion under appeal solely on
the ground that if it had considered the matter at the trial stage it
would have come to a contrary conclusion. If the discretion has been
exercised by the trial court reasonably and in a judicial manner the
fact that the appellate court would have taken a different view may
not justify interference with the trial court’s exercise of discretion.
After referring to these principles Gajendragadkar, J. in Printers
(Mysore) Private Ltd. v. Pothan Joseph (SCR 721)
“… These principles are well established, but as has been observed by
Viscount Simon in Charles Osenton & Co. v. Jhanaton [1942 AC 130]
‘…the law as to the reversal by a court of appeal of an order made by
a judge below in the exercise of his discretion is well established, and
any difficulty that arises is due only to the application of well settled
principles in an individual case’.”
The appellate judgment does not seem to defer to this principle.”
(Emphasis Supplied)
21. This position has been followed thereafter consistently by this Court,
which is reiterated recently by the Hon’ble Supreme Court in Ramakant
Ambalal Choksi Vs. Harish Ambalal Choksi (supra).
22. It is therefore clear that this Court will be required to consider
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whether the discretion exercised by the Trial Court is arbitrary or capricious
or perverse and whether the Trial Court has ignored settled principle of law
regulating grant or refusal of interlocutory injunction.
23. The chronology of events in this case is really important. In the year
2007 the owners had executed the DA and POA with the present Appellant.
It is material to note that the consideration under the said DA has not been
fully received by the Respondents-Owners. Since the Appellant did not take
timely steps to develop the property, the Respondents-Owners did not get
flats totally admeasuring 1000 sq.ft carpet area, as promised. This position
continues even today and therefore admittedly the DA executed in favour of
the Appellant is not performed completely even today. The relevant clause in
the development agreement dated 12/07/2007 reads thus:
“6. The parties of the Second Part agreed that upon the execution of
these presents, the parties of the Second Part shall deliver and
handover unto the party of the First Part, quit vacant and peaceful
possession of the aforesaid property. It is thereby agreed between the
parties hereto that upon payment of the entire consideration as stated
hereinabove the Party of the First Part to the Party of the Second Part,
the Party of the Second Part, shall not have any right, title and interest
in the aforesaid properties and that the Party of the Second Part shall
confer the Power of Attorney as also a possession letter in favour of the
Party of the First Part herein so as to enable the party of the First Part
take all steps for construction and/or development work in the
aforesaid property.”
(Emphasis Supplied)
24. It is therefore clear that upon receipt of the entire consideration, the
right, title and interest of the owners was supposed to come to an end and
the owners were to execute POA as well as possession letter in favour of the
Appellant. From this clause, it is prima facie clear that the
Respondents/Owners have not parted with the title or even possession, in
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favour of the Appellant as owner. Perusal of the POA dated 12/07/2007 in
favour of the Appellant shows that its first clause reads thus-
“1. To sale or develop said property as may be permissible under the
Law”
[Emphasis supplied]
Other clauses indicate the necessary powers for the purpose of
development and sell of developed flats etc.
25. There is no dispute that till March 2013, the Appellant did not take
any concrete steps and therefore the slum society applied to the Competent
Authority under the Slum Act for termination and removal of the Appellant
as a developer. It is apparent from the record that by order dated
29/10/2015, the CEO (SRA) (competent authority under the Slum Act) has
terminated the appointment of Appellant as a developer. This order was
challenged by the Appellant belatedly, but it admittedly stands even today.
The order dated 29/10/2015 is neither set aside nor stayed. Record shows
that the Appellant’s efforts in challenging the said order, has failed so far.
26. Prima facie in the teeth of the order dated 29/10/2015, clause (1) of
the POA dated 12/07/2007 would not apply and the power given to the
Appellant to sell the suit property is obviously not available because the
power was given to sell ‘as permissible under law’. Appellant’s appointment
to develop the suit property is terminated by following due process of law.
27. It is not disputed and is also clear from the recitals of the DA and POA
dated 12/07/2007 that underlying purpose and intention of the parties was
to develop the property and the Respondents/Owners were to receive
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certain monetary and other consideration in the form of flats. The role of the
developer in such cases, apart from paying consideration to owners, is to
rehabilitate occupants (slum dwellers in the present case) and then earn
profit out of free-sale component. In such circumstances, prima facie, the
documents of DA and POA dated 12/07/2007 cannot be treated as mere
power to sell the suit property in favour of any person or in favour of the
developer himself, sans development.
28. In the present case, the Appellant – Developer through its partner Mr.
Abdul Hamid Mapkhan Shah has executed the impugned Conveyance Deed
dated 26/05/2023 in favour of himself and from Index II produced on
record, it is apparent that the executing parties on both the sides, are one
and the same. The said person has also given a declaration before the
registering authority that the POA dated 12/07/2007 is not canceled. This
declaration is without challenging the termination of 2015.
29. In light of the facts and circumstances narrated above, and in light of
the clauses of DA and POA discussed above, prima facie the Appellant was
not legally entitled to execute Conveyance Deed in its own favour.
Therefore, there is strong prima facie case in favour of the Respondents –
Owners in the subject matter suit, which is filed challenging the impugned
Conveyance Deed dated 26/05/2023 and seeking to set aside the same.
30. So far as the argument of the Appellant that this amounts to grant of
final relief during the pendency of the suit, I find it devoid of merits. I say so
because the only effect of the impugned order is that the Appellant will not
be able to use the impugned Conveyance Deed as title document and will
not be able to alienate or sell the suit property during the pendency of the
suit. It is not yet set aside.
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31. The Appellant has not challenged the termination dated 04/04/2015
by the Respondents/Owners. The argument about the said termination being
illegal or invalid would arise obviously when the termination is challenged,
which is not the case here. The Appellant is presently only defending the
subject matter suit.
32. Therefore, the judgments relied upon by the Appellants in case of Seth
Loon Karan Sethiya vs. Ivan E. John & Ors, Shanti Budhiya Vesta Patel &
Ors. vs. Nirmala Jayprakash Tiwari & Ors., Venkata Ravi Kishore & Anr. vs.
JMR Developers Pvt. Ltd. (supra) need not be considered at this stage, since
they are related to argument about termination being valid or invalid in light
of the Section 202 of the Indian Contract Act.
33. So far as the judgment of Supreme Court Bar Association & Ors. vs. B.
D. Kaushik and Raja Khan vs. Uttar Pradesh Sunni Central Waqf Board & Anr
(supra) are concerned, it is relied upon by the Appellant in support of the
case that final relief should not be granted at interim stage. I have already
held in the peculiar facts of this case, that the Respondents/Owners have a
strong prima facie case. I have already indicated above that final relief of
setting aside the Conveyance Deed is not granted. Hence, the said judgments
also do not advance the case of the Appellant, considering the peculiar facts
of this case.
34. When the impugned order is perused, it is seen that the Trial Court
has considered the nature of the impugned Conveyance Deed in which both
the transferor and transferee are the same. It is further considered by the
Trial Court that the competent authority has terminated the Appellant as
developer of the suit property. The view taken by the Trial Court that in such
circumstances that the Appellant cannot act upon the Conveyance Deed in
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its own favour, is correct. The view taken by the Trial Court that the
Appellant was not authorized to execute the Conveyance Deed and claim
ownership of the suit property, is also correct. Trial Court has considered the
material on record.
35. Considering the undisputed position that from 2007 till 2013, when
the slum society applied for termination of the Appellant as developer and
then till April 2015 when the Respondents-Owners terminated the POA, the
Appellant had not taken any steps to develop the property and further
considering that the Appellant’s appointment as a developer has been
canceled by the competent authority under the Slum Act and further
considering that newly appointed developer/intervener has been working on
the project since 2016, when necessary LOI and IOA have been granted and
amended plans are issued in favour of the new developer, in my view, the
aspects of balance of conveyance as well as irreparable loss, tilt in favour of
the Respondents/Owners and the new developer.
36. Therefore the remaining judgments relied upon by the Appellant i.e
State of H. P. and Others vs. Anant Ram Negi and Others, S. R. Tewari vs
Union of India & Anr and H. B. Gandhi, Excise and Taxation Officer-cum-
Assessing Authority, Karnal & Ors. vs. M/s. Gopi Nath & Sons and Others
(supra) for the purpose of argument that the impugned order is perverse
also do not advance the case of the Appellant. The impugned Order is not
perverse.
37. So far as the argument of the Appellant that as late as in December,
2022, the parties were negotiating and talk of executing Conveyance Deed
was going on, I have perused both the letters issued by Respondents/Owners
dated 22/06/2022 and the letter dated 19/12/2022 issued in response
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thereto. Letter dated 19/12/2022 is a dry and late assertion in year 2022
that the Appellant was ready and willing to perform its obligation under
development agreement of July 2007. In the concluding paragraph, only a
hope is expressed about Conveyance Deed. The said letter by no stretch of
imagination, indicates that the parties were negotiating the matter
meaningfully for continuing the Appellant as a developer. In fact under letter
dated 22/06/2022, the Respondents/Owners had asserted that the
Appellant/developer has not taken any steps for implementation of the slum
rehabilitation scheme. It is further asserted that the authority of the
Appellant is terminated by the slum society and necessary agreements are
executed in favour of the new developer. Ultimately, the arbitration clause
was invoked calling upon the Appellant to nominate the arbitrator.
38. In the aforesaid facts and circumstances, the impugned order is
neither perverse nor there is any error apparent on the face of the record.
The reasons given and the conclusion drawn by the Trial Court is based on
the material available before it. Therefore, no interference is called for. This
is not a fit case to substitute the discretion exercised by the Trial Court.
39. The Appeal from Order and the Interim Application No. 13827 of
2024 is dismissed. No costs.
40. The Interim Application of the new developer Interim Application No.
15378 of 2024 is also disposed of in above terms.
41. All concerned to act on duly authenticated or digitally signed copy of
this order.
(M. M. SATHAYE, J.)
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