GOREGAON PEARL CHSL Vs. SEEMA MAHADEV PARYEKAR

JUDGEMENT

(1.) The appeal is admitted and taken up for hearing forthwith by consent of counsel.

(2.) This appeal from order challenges an order passed by Bombay City Civil Court at Dindoshi, Mumbai on a notice of motion. By the impugned order, the Appellant (original Defendant) was restrained from alienating, or creating any third party interest in, the suit fat. This was by way of an ad-interim protection to the Respondents (original Plaintifs). This order has since been perpetuated and obtains till date. On these bare facts, ordinarily I should have asked the parties to go for an expeditious hearing of the notice of motion instead of entertaining this appeal from an ad-interim order. Considering, however, the peculiar facts of the case and particularly, having regard to the fact that this controversy has had a long and chequered history, where the parties have already gone right upto the Supreme Court, I am of the considered view that I should hear the parties at length and consider the case threadbare at the stage of ad-interim relief itself. Learned Counsel for both sides have showed their inclination to go in for a detailed hearing. I have accordingly heard Counsel and propose to dispose of the appeal by a detailed order.

(3.) The controversy in the present matter concerns redevelopment of a property owned by the Appellant, who is a cooperative housing society of about sixty members, who have already handed over possession of their respective fats for redevelopment and are currently said to be roofess. The redevelopment was entrusted by the Appellant society to Respondent No.2 developer (original Defendant No.2) under a development agreement. Under this agreement, the developer was duty bound to complete the project within twenty-two months from the date of receipt of commencement certificate with a three months grace period. The project involved construction of two wings of the new building, Wings A and B. Both wings were to partly accommodate the members of the Appellant society and partly third party purchasers of the free sale component of the project. In pursuance of the agreement, all members of the Appellant society vacated their respective fats by handing over possession to Respondent No.2 developer. Respondent No.2 had executed a bank guarantee in favour of the society in the sum of Rs.5 crores for fulfilling his commitment under the agreement. On or about 17 June 2008, a commencement certificate for construction of the new building was issued by the Municipal Corporation of Greater Mumbai ('MCGM') to the developer. Though construction was undertaken in pursuance thereof, it was nowhere near completion even as late as by August 2016, that is to say, even after passage of eight years from issuance of the commencement certificate. In the premises, by their notice dated 16 August 2016, the Appellant revoked the Power of Attorney given by it to the developer for development of the suit property. This was followed by an arbitration petition under Section 9 of the Arbitration and Conciliation Act, 1996 ("Act") by the Appellant society seeking inter alia appointment of a court receiver for taking over the redevelopment project and completing it. Various breaches on the part of Respondent No.2 developer were alleged in the arbitration petition. These included non-completion of the project within the stipulated period of 25 months, change of plans without the society's consent and unauthorised construction of two additional foors for which stop-work notice was issued by MCGM. In the meantime, the bank guarantee of Rs.5 crores was invoked and encashed by the Appellant society. After various interim orders passed by this court on that arbitration petition, finally, on or about 7 July 2017, the parties entered into consent terms. Under these consent terms, the total liability of the developer was fixed at about Rs.7.62 crores. It was agreed that Rs.2.5 crores would be adjusted, from out of the bank guarantee amount of Rs.5 crores, towards arrears of rent and balance Rs.2.5 crores towards share of profits of the Appellant society. The consent terms provided for completion of Wing A with part OC on or before 31 December 2017 with a grace period of three months and completion of Wing B with part OC on or before 30 June 2018. The consent terms had a termination clause in the event of breach, if any, on the part of the developer. Post-dated cheques were issued by Respondent No.2 developer in pursuance of the consent terms. Respondent No.2 committed breaches of the consent terms. Not only was construction of A and B Wings not completed within the respective stipulated periods, but even the cheques issued in pursuance of the consent terms were dishonoured. This resulted into the Appellant society filing a contempt petition against Respondent No.2. This court passed an order in that contempt petition requiring Respondent No.2 to pay a sum of Rs.5.42 crores in instalments, and a bar chart, filed with the afdavit of Respondent No.2, was taken on record requiring completion of construction in accordance with it. Since even this order was breached by Respondent No.2, by their notice dated 9 June 2018, the development agreement and power of attorney were terminated by the Appellant society. Further to this termination, an arbitration petition under Section 9 of the Act was filed by the Appellant, seeking various injunctive reliefs against Respondent No.2. These included a restraint on the Respondent from interfering with appointment of a third party developer and handing over possession of the project to such developer. At the hearing of this arbitration petition, by consent, disputes between the parties were referred to a sole arbitrator, converting the petition under Section 9 into an application under Section 17 of the Act. Even after this reference, there were settlement talks between the parties but nothing came out of those. Finally, by his order dated 17 September 2018, passed under Section 17 of the Act, the arbitrator allowed the Appellant society's application inter alia allowing the Appellant to appoint a new developer or contractor for completion of the project. Respondent No.2 was restrained from interfering with the redevelopment process through such new developer or contractor. Respondent Nos.3 and 4 herein were appointed as private receivers to facilitate the balance redevelopment; and Respondent No.2 was directed to handover possession of the suit property to these private receivers. The arbitrator inter alia noted the decision taken by the General Body of the Appellant society, which required all its members to be accommodated in Wing B, which was at a much more advanced stage of completion around the time. So far as Wing A was concerned, the Appellant society was to ensure that no third party rights were created in respect thereof by sale of any fat in Wing A to any new purchaser. This was evidently to take care of the claims of Respondent No.2 developer as well as various third party purchasers claiming under him. This order was carried in appeal under Section 37 of the Act by Respondent No.2. By an order dated 14 December 2018 passed by this court, the appeal was rejected. The learned Single Judge of this court, who heard the appeal, was of the view that the arbitrator's order was well-reasoned and fully justified. Being dissatisfied, Respondent No.2 carried the matter in a Special Leave Petition ('SLP') before the Supreme Court. The Supreme Court, by its order dated 21 January 2019, rejected the SLP. At that stage, considering the fact that some of the fat purchasers under Respondent No.2 developer had also challenged the order of the arbitrator passed under Section 17 of the Act, by a separate order dated 21 January 2019, the court, whilst rejecting the SLP of these fat purchasers inter alia observed that though it found no ground to interfere as the SLP of the developer against the very same order had been dismissed, the third party purchasers were given liberty to approach the arbitral tribunal and seek appropriate remedies, if so advised. (Respondent No.1 herein is also a fat purchaser in the free sale component under Respondent No.2 developer, having the same interest as the fat purchasers, who approached the Supreme Court by their separate SLP.) The fat purchasers thereafter approached the arbitrator by an application seeking modification of his order dated 17 September 2019. The arbitrator, after hearing the parties at length, by his order dated 27 February 2019, rejected the application made by the free sale component purchasers, requiring inter alia Respondent No.2 developer to circulate the order to all third party purchasers with whom fat purchase agreements or other contracts were entered into by the developer. It is in the backdrop of these facts that on or about 30 March 2019, Respondent No.1 herein filed her own suit for specific performance of her agreement for sale with Respondent No.2 developer (agreement dated 8 June 2015) before the City Civil Court at Dindoshi. On her ad-interim application, the City Civil Court passed a temporary injunction, restraining the Appellant herein from alienating or creating third party interest in the fat allotted to Respondent No.1 by Respondent No.2 developer in B Wing of the new building. Being aggrieved, the Appellant moves this court by the present appeal from order.