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Vrindavan (Borivali) Co-operative Housing Society Limited Vs. Karmarkar Brothers and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMumbai High Court
Decided On
Case NumberAppeal from Order No. 442 of 1978
Judge
Reported in1983(2)BomCR267; 1982MhLJ607
ActsMaharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale Management and Transfer) Act, 1963 - Sections 4 and 11; Bombay Court Fees Act, 1959 - Sections 6
AppellantVrindavan (Borivali) Co-operative Housing Society Limited
RespondentKarmarkar Brothers and ors.
Appellant AdvocateV.T. Walawalkar and ;B.B. Sawant, Advs.
Respondent AdvocateV.A. Gangal (absent) and ;Ramanlal Varjivandas, Advs. for respondent No. 1, ;P.N. Karlekar, Adv. for respondent No. 8, ;V.A. Gangal, Adv. for respondent No. 9 (absent), ;A.R. Kubal, Adv. for responden
Excerpt:
.....- plaint returned for lack of pecuniary jurisdiction - ordered to be presented to proper court - suit agreements not like ordinary contracts and obligations are imposed by the statute and for performance of such obligations there is no provision in the court fees act and so relief claimed by plaintiff not susceptible to any monetary valuation - so value of rs. 3000 was put - no provision in court fees act for such suit so section 6 (j) attracted - valuation of suit proper - plaint ordered to be accepted. - - 1 failed to perform the obligations under the agreement as well as under the maharashtra ownership flats (regulation of the promotion of construction, sale, management and transfer) act, 1963 (herein referred to as the said act) and failed to pay the water charges though the..........extend to two thousand rupees.'13. the learned advocate for the appellant contended that as the suit agreements are not like ordinary contracts and these obligations are imposed by the statute and for such performance of obligations there is no provision in the court fees act and the relief which the plaintiff is claiming in this suit is to compel the performance of the obligations cast in the statute and to enforce his statutory right. the relief is incapable of monetary valuation. therefore, under section 6(j) of the bombay court fees act the suit is properly valued and court fees paid is proper. section 6(j) of the bombay court fees act states as follows:section '6(j) in suit when declaration is sought, with or without injunction or other consequential relief and the subject-matter.....
Judgment:

Deshpande, J.

1. This is an appeal against an order returning the plaint to the plaintiff for presentation to the proper Court on the ground that the suit is valued beyond the jurisdiction of the Court. The order returning the plaint was passed on March 16, 1978.

2. The plaintiff-appellant has filed this appeal against the aforesaid order. This appeal was heard by my learned brother but hearing could not be completed and during the hearing my learned brother orally expressed that the amendment of plaint would be necessary to decide the controversy in the suit and thereafter a draft plaint was allowed to be submitted which draft plaint in record. It is on the basis of this amendment plaint that I propose to decide this appeal.

3. The appellant is a registered co-operative society by name Vrindavan (Borivali) Co-operative Housing Society Limited, which was formed on March 4, 1978. Defendant No. 1 are M/s. Karmarkar Brothers, a firm carrying on business at Odhavaji Wadi, Kasturba 1st Cross Road, Borivali (E), Bombay 400 066. Respondents 2 to 10 are the flat owners who have taken flats under an agreement from respondent No. 1.

4. The appellant-plaintiff filed a suit bearing No. 565 of 1974 in the City Civil Court at Bombay of declaration that plaintiffs-society is a co-operative society and for mandatory in junction against defendant Nos. 2 to 10 to become members of the plaintiff society and for further declaration that the members of the plaintiff society had paid the entire amount of their purchase price to defendant No. 1 pursuant to the agreement of sale and defendant No. 1 are liable to execute the deed of conveyance in favour of plaintiff. It was further prayed that the plaintiffs society through its members is in possession of the said building known as 'Umanagar' situated at Kasturba 1st Cross Road, Borivali (E), Bombay-66 and also prayed for injunction against defendant No. 1 restraining of disturbing the possession of the plaintiff-society or its members.

5. It was further alleged that defendant No. 1 had entered into an agreement for sale with the members of the plaintiffs-society and defendant Nos. 2 to 10 under which the defendant No. 1 agreed to transfer and assign and convey all the rights, title and interest in the suit building to the co-operative society. The plaintiff further alleged that in Clause 22 of the agreement it was provided that the party of the 1st part shall transfer and assign all rights, title and interest in the said plot described in Schedule 'B' hereunder written in the building to be constructed thereon to the said co-operative society. The necessary documents of the transfer of the said property shall be prepared by the attorney-Advocate of the party of the 1st part. The party of the second part along with rest of the acquires of the said flat in the said building will form and join the co-operative society and on completion of the building and on receipt of the party of the 1st part of full price of all tenants which the party of the first part shall be entitled to receive in terms of the said agreement and similar agreement with the flat owners the party of the 1st part shall transfer and assign all the right, title and interest to the said co-operative society.

6. Then in para 7 the plaintiff further stated that defendant No. 1 failed to perform the obligations under the agreement as well as under the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 (herein referred to as the said Act) and failed to pay the water charges though the payments were overdue. Therefore, the members of the plaintiffs-society started depositing the out goings after forming an association with the plaintiffs-society and registration of the society paid the charge of the entire building and property taxes of their flats.

7. Then it was stated that the plaintiff called upon defendant No. 1 to form the co-operatives society and comply with all obligations such as to form the co-operative society but the defendant No. 1 did not perform his obligations under the said Act. Then it was further alleged that defendant No. 1 was called upon to attend the first constituted general meeting of the co-operative society and he also addressed a letter to defendant Nos. 2 to 7 calling upon them to become the members of the society. But defendant Nos. 2 to 7 refused to join. Then it was further alleged by the plaintiff that respondents Nos. 2 to 7 are liable to become members of the society and as provided by the provisions of the said Act defendants Nos. 2 to 7 having been refused to join as members of the society are liable for an answer.

8. In paragraph 17 plaintiffs specifically prayed that defendant Nos. 2 to 7 are liable to join the plaintiff-society as per the provisions of the said Act. The plaintiffs are further entitled for mandatory injunction directing the defendants to fulfil their obligations by submitting application forms agreeing to abide by the bye-laws of the society and join the society as members.

9. Then in paragraph 18 of plain plaintiff, alleged that defendants is denying that entire price has been paid and he is liable to execute the conveyance in terms of Clause 22 of the agreement read with the provisions of the said Act.

10. Then plaintiffs valued their claim in suit as being not capable of monitory valuation and they valued their claim at Rs. 300/- and paid the Court fees accordingly claiming the following reliefs :

'(a) That this Hon'ble Court be pleased to declare that the Vrindavan (Borivali) Co-operative Housing Society Ltd. is a Co-operative Housing society of the acquirers of flats in the building known as Umanagar situate at 1st Kasturba Cross Road, Borivali (East), Bombay;

(b) In the event this Hon'ble Court granting Prayer (a) above as and by way of consequential relief the defendants by an order and mandatory injunction of this Hon'ble Court be directed to become members of the plaintiffs-society in compliance with the bye-laws of the plaintiff society;

(c) In the event of granting Prayer (a) above as and the way of consequential relief, it may be declared that the defendant No. 1 is entitled to payment in accordance with the agreement of sale and defendant No. 1 are liable to execute the deed of conveyance in favour of the plaintiff in accordance with section 11 of the Maharashtra Ownership Flats Act of 1963;

(d) It may be declared that the plaintiff through its members are in possession of the said building known as Umanagar situate at 1st Kasturba Cross Road, Borivali (East), Bombay .'

This plaint was filed on 30-3-1976. I have recited the contents of the amended draft plaint which is on record. The learned trial Judge framed an issue as to whether the Court has jurisdiction to entertained try this suit, as a preliminary issue and by this order dated March 16, 1978 construing the plaint which was before him and relying on statement of the Advocate to plaintiff recorded in Roznama dated March 15, 1978. He held that the suit is beyond pecuniary valuation of the Court for the purposes of Court fees as the consideration amount of the conveyance is more than two lacs, and therefore, he returned the plaint for presentation to the proper Court. It is this order which is challenged before me. If the matter would have rested on the original plaint the order of the learned Judge would have been justified and it appears that the Advocate for the plaintiff also consented to the order proposed to be passed by the Judge. The question involved in this appeal relates to the jurisdiction of the Court and the jurisdiction will have be ascertained from the averments in the plaint. Having regard to the relief claimed in the plaint, as I have stated earlier the draft plaint was amended and it is signed by the Advocate and I am told that it will be sworn in the lower Court. A copy of this draft is given to the other side also. At the time of the hearing of the appeal both the Advocates urged their case on the basis of the amended plaint which is now a part of the record. As that draft is now taken into account for consideration, I need not go into the merits of the order passed by the lower Court.

11. Now looking to the draft of the plaint it is found that the plaintiffs are alleging that the suit is governed not only by the agreement by the provisions of section 4 read with sections 11 and 12 of the said Act. The allegations of plaintiff do contain a reference to the execution of conveyance but this execution of conveyance is to be understood not in a general sense as executed by the parties. Because, the plaintiff have further alleged specifically that in view of the provisions contained in the said Act the obligations of the parties are flowing from the provisions of the said Act. The defendant is a builder who is the owner of the plot and also a person who has agreed to sell those flats to the different flat owners. The defendant is required to pass a conveyance in complete title as provided by section 11 of the said Act. So the plaintiff in substance is relying mainly on the provisions of sections 4, 11 and 12 of the said Act, to enforce his claim both for declaration and for injunction against respondents Nos. 2 to 7.

12. The reliefs prayed in Clauses (a), (b), (c) and (d) will show that the plaintiff is seeking to enforce the obligation cast by the statute. It is the principal reliefs which are claimed in the plaint for which a value is to be ascertained. Now the relief which the plaintiff is claiming is his right to enforce the mutual obligations of the defendant inter se and the parties as provided by sections 10, 11, 12 and 4 of the said Act. Sections 4,10,11 and 12 of the said Act read as follows :---

'Section 4. Notwithstanding anything contained in any other law, a promoter who intends to construct or construct a block or building of flats, all or some of which are to be taken on ownership basis, shall, before he accepts any sum of money as advance payment or deposit, which shall not be more than 20 percent, of the sale price enter into a written agreement for sale with each of such persons who are to take or have taken such flats, and the agreement shall be registered under the Indian Registration Act, 1908 and such agreement shall contain the prescribed particulars; and to such agreement there shall be attached, such documents or copies thereof, in respect of such matters as may be prescribed.

Section 10(1) As soon as a minimum number of persons required to form a co-operative society or a company have taken flats, the promoter shall within the prescribed period submit an application to the Registrar for registration of the organisation of persons who take the flats as a co-operative society or, as the case may be, as a company; and the promoter who join, in respect of the flats which have not been taken in such application for membership of a co-operative society or as the case may be of a company. Nothing in this section shall affect the right of the promoter to dispose of the remaining flats in accordance with the provisions of this Act.

(2) If any property consisting of building or buildings, is constructed or to be constructed and the promoter submits such property to the provisions of the Maharashtra Apartment Ownership Act, 1970, by executing and registering a declaration as provided by that Act, then the promoter shall inform the Registrar as defined in the Maharashtra Co-operative Societies Act, 1960, accordingly and in such cases, it shall not be lawful to form any co-operative society or company.

Section 11. A promoter shall take an necessary steps to complete his title and convey, to the organisation of persons who take flats, which is registered either as co-operative society or as a company as aforesaid, or to an association of flat-takers or apartment owners his right, title and interest in the land and building, and execute all relevant documents therefore in accordance with the agreement executed under section 4 and if no period for the execution of the conveyance is agreed upon he shall execute the conveyance within the prescribed period and also deliver all documents of title relating to the property which may be in his possession or power.

Section 12(1) Every person who has executed an agreement to take a flat shall pay at the proper time and place the price, his proportionate share of the Municipal taxes, water and electricity charges, ground rent (if any) and other public charges in accordance with his agreement with the promoter; and where a co-operative society or a company of persons taking the flats is to be constituted, co-operate in the formation of such society or company, as the case may be.

(2) Any person who has executed an agreement to take a flat and who, without reasonable excuse, fails to comply with or contravenes sub-section (1) shall, on conviction, be punished with fine which may extend to two thousand rupees.'

13. The learned Advocate for the appellant contended that as the suit agreements are not like ordinary contracts and these obligations are imposed by the statute and for such performance of obligations there is no provision in the Court Fees Act and the relief which the plaintiff is claiming in this suit is to compel the performance of the obligations cast in the statute and to enforce his statutory right. The relief is incapable of monetary valuation. Therefore, under section 6(j) of the Bombay Court Fees Act the suit is properly valued and Court Fees paid is proper. Section 6(j) of the Bombay Court Fees Act states as follows:

Section '6(j) In suit when declaration is sought, with or without injunction or other consequential relief and the subject-matter in dispute is not susceptible of monetary evaluation and which are not otherwise provided for by this Act; (ad valorem fee payable, as if the amount or value of the subject matter was three hundred rupees;)

In reply to the said contention the Government Pleader as well as the Advocate for defendant No. 1 had submitted that it is a suit for performance of the contract, and therefore, is governed by the provisions of the Bombay Court Fees Act as it is in section 6(xi) of the Bombay Court Fees Act which states as follows:

Section '6(xi). In suits for specific performance---

(a) of a contract of sale, according to the amount of the consideration.

(b) ................................

(c) ................................

(d) ...............................

In view of the rival contentions, I purpose to deal with the point as it is not covered by any authority.

14. If we look to the scheme of the said Act the Preamble shows that consequent to the actuate shortage of housing in several areas in the State of Maharashtra, sundry abuses, mal practices and difficulties relating to the promotion of the construction, sale, management and transfer of flats taken on ownership basis exist. As this Act has been passed to check and control those practices so the promotions of construction, sale, management and transfer of flats on the ownership basis is to be regulated by the provisions of this Act. This Act defines several expression such as 'flat' 'promoter' and other relevant terms. Section 4 of the said Act deals with the agreements which are executed. It is an agreement contained in section, is a written agreement and it is required to be registered. It has to contain some particulars inasmuch as monies and advance payments of deposit which shall not be more than 20% of the sale price. Under section 5 the promoter has to maintain a separate account in any bank of the sums taken by him. The promoter has responsibilities for payment of outgoings under section 6. Under section 7 specification of plans of the building and approval is to be taken. The promoter has to give possession in accordance with terms of the agreement as provided by section 8. Under section 9 without the previous consent of the persons who take or agree to take flats, the promoter cannot create any interest. Then section 10 provides that as soon as minimum number of person required to form the co-operative society or company have taken flats, the promoter shall within the prescribed period submit an application. Under section 11, he has to complete his title and convey to the organisation of persons who take flats, which is registered as co-operative society or as a company as aforesaid or to an association of flat-takers his right, title or interest in the land and building and execute all relevant documents in accordance with the agreement under section 4. Then section 12 provides the general liability of the flat takers who have to co-operate with society or a company taking the flats is to be constituted and co-operate in the formation of the said society or company as the case may be. The provisions contained in the above sections clearly impose a specific obligation on the flat taker as well as the promoter and the plaintiff in this case is seeking relief for enforcement of the statutory provisions as contained in sections 10, 11 and 12 of the said Act. It is true, that section 11 refers to an agreement but this agreement is not an ordinary agreement like a contract of sale, because this agreement is to be executed in conformity with section 4. It is to be registered. The prescribed percentage is provided by the statute itself, and this agreement involves statutory compulsion to provide certain terms. Therefore, the ordinary contract of sale cannot be equated with this sort of agreement.

15. The wording of section 11 compelling the promoter to take steps is emphasized by the use of word 'shall'. The same word is used in sections 10, 11 and 12 and in may opinion, this is a mandatory obligation cast on the respective parties. The transfer of title contemplated by section 11 is not an individual transfer based on an ordinary contract giving rise to individual rights and liabilities. The transfer is to be made in favour of the co-operative society or an association or a company. So the obligations provided by the agreement referred to in section 4 read with section 11 are statutory and the performance of which can be claimed by the plaintiff.

16. The other obligation is that the defendants-flat owners are required to join as members of the co-operative society. Therefore, if the plaintiff is seeking relief in regard to enforcement of these obligations, in my opinion, the suit cannot be said to be an ordinary suit for specific performance of a contract of sale. The relief which the plaintiff is now claiming for enforcement of these obligations, is not susceptible of monetary valuation and it is not otherwise provided by the Court Fees Act also. Because the only provision in the Court Fees Act as provided in section 6(xi), as I have said earlier the Court Fees Act could not provide in any suit to compel the obligations of such sort as are given in the said Act. Therefore, the suit valued by the plaintiff is properly valued under section 6(j) of the Bombay Court Fees Act.

17. The argument of the Counsel for the respondent and the learned Government Pleader who adopted the same arguments that under section 6(xi) of the Bombay Court Fees Act the suit should be valued according to amount of consideration for conveyance, does not seem to be justified. Because, under section 6(xi) of the Bombay Court Fees Act the contact of sale ordinarily would mean a contract entered into by parties voluntarily and according to their will and pleasure without any reference to any statute. It is a contract settled by the parties inasmuch as such a contract is fully dependent on the volition of the parties. The words used in the provisions of section 6 providing the contract of sale will apply only to such a contract and the present suit is also not a suit in the sense that specific performances of only a contract is sought. The provisions of section 6(xi) of the Bombay Court Fees Act clearly show that the contract of sale as known to it, has nothing to do with statutory obligations. Therefore, the suit governed by section 6(xi) of the Bombay Court Fee Act is a different suit than the present one which is filed by the plaintiff. The obligations flowing from the contract of sale mentioned in section 6(xi) of the Bombay Court Fees Act are obligations, in my opinion, restricted to a contract wherein there is no question of any compliance with any statute. Mere statutory right is not a subject-matter of such contract. There the provisions of section 6(xi) are not attracted for the payment of Court-fees in the present suit.

18. The present suit filed by the plaintiff is not a suit simpliciter for specific performance. It is a suit to enforce the compliance with a statute. The provisions of section 12 providing a penalty for non-compliance with the statute also re relevant. Section 12 of the said Act provided that the flat owners who contravene sub-section (1) of the section 12 are liable to criminal action. Section 13 also provides that a promote who fails to comply with the provisions of this Act is liable to criminal actions. The reason for referring this penal provision is that the intention of the Legislature seems to be that the parties governed by this Act must comply with the provisions and non-compliance with the provisions has been made an offence. From this it can be reasonably inferred that the agreement which is the basis as provided by section 4 for conveyance to be executed cannot be said to be similar to one which can be the subject-matter of an ordinary contract of sale. Because, if an ordinary contract of sale is violated there will be only a remedy of damages or for specific performance and no such penal consequence could follow.

19. Then section 16 provides that the provisions of the said Act are in addition to the provisions of Transfer of Property Act and shall take effect notwithstanding anything to the contrary contained in any contract. The object of the section 16 seems to be that the provisions of this Act shall have an over-riding effect and they are in addition to the provisions already existing. Section 3 of the said Act provides the liabilities of the promoter. It is specifically mentioned that the promoter has to make full and true disclosure from the nature of the title. It is to be duly certified by an Advocate of not less than 3 years standing . He has to disclose encumbrances. In Clause (f) of section 3 he has to specify the date by which possession of the flat is to be handed over. By Clause (g) of section 3 he has to prepare a list of flats and by Clause (h) he has to state in writing the precise nature of the organisation of persons to be constituted. All these liabilities read with further obligations under sections 10, 11 and 12 go to show that the promoter is under a statutory obligation who should complete the title and pass a conveyance to the organisation named therein.

20. The position which emerges from the reading of this provision is seeking to enforce only the statutory obligations. Therefore, principal relief which plaintiff is claiming relates to the performance of the obligation under the statute and such a relief being incapable of monetary valuation the valuation made by the plaintiff in this case relying on Clause 6(j) of the Court Fees Act is correct.

21. There is another aspect which cannot be lost sight of. It is well known that the co-operative ownership is new phenomenon born in 20th Century on account of acute shortage of space. The Co-operative Societies are formed with a view to assist and help the people of moderate means to have their own flats, which they cannot individually afford on high costs. It is also notorious that the Co-operative Societies are helped by offering loans from the housing financial society and these loans are repayable by the Co-operative Societies. They are given for building purposes. Therefore, I do not think that such societies when they are involved in litigation, should be subjected to a burden of heavy Court fees. I also do not think that the intention of the Legislature in enacting the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale. Management and Transfer) Act, 1963 was to impose any such burden on the respective parties governed by the provisions of the said Act, if they are involved in litigation because of non-compliance with the provisions of the said Act.

22. The subject-matter of the suit being of right to compel the performance of statutory obligation and the plaintiff who is asking assistance of the Court to compel the promoter to perform his statutory obligation, such a right to compel to perform the obligations provided by the statute being incapable of monetary valuation and there being no provision in the Court Fees Act for such a suit the provisions of section 6(j) of the Court Fees Act are attracted and they are applicable to this suit. As the Court Fees were paid relying on the provisions, the valuation of this suit is quite proper and the plaint will have to be accepted and the suit will have to be proceeded with as the valuation of the plaint is proper. Therefore, the appeal is allowed. The order of the learned trial Judge is set aside. It is directed that the plaintiff will swear the plaint within 15 days from the time when the writ of this Court reaches the City Civil Court, Bombay.

23. I hope the lower Court will dispose of the suit as expeditiously as possible. The defendant will be entitled to file the reply to the amended plaint except raising the grounds of peculiar valuation touching the jurisdiction of the Court. The trial Court will specifically bear in mind that, it required 7 years for the decision of a preliminary point and the suit will be disposed of at least within the period of six months from the time when the writ of this Court reaches to the lower Court. No order as to costs.


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