Raju, J. -
(1.)THE above appeal has been filed against the judgment and decree dated 15-7-1987 of a Division Bench of the Bombay High Court in Appeal No. 204 of 1981, whereunder the judgment and decree dated 23-3-1981 passed by a learned single Judge in Suit No. 744 of 1969 came to be confirmed. THE fourth plaintiff in the Suit, who was the first appellant in the appeal before the High Court, is the appellant in this appeal. THE Suit came to be filed jointly by more than one agreement-holders praying for a declaration that the scheme and the flat purchase agreement entered into between parties are valid and subsisting and the plaintiffs are entitled to specific performance of the same; that defendants 1 to 7 are promoters within the meaning of the Maharashtra Ownership Flats Act, 1963 and thereby they are trustees or occupy a fiduciary position qua the plaintiffs; that the defendants 1 to 8 and all other purchasers of flats are participants in the scheme; that defendants 1 to 8 and, in particular, defendants 1 and/ or 2, may be ordered and decreed to forthwith specifically perform their respective obligations under the said agreements for sale by resuming or allowing to be resumed the construction of the building, by completing the same, by handing over possession thereof to the respective flat purchasers and by conveying or agreeing to convey the land in suit and the two buildings to an entity representing all the purchasers of flats in both the buildings; that defendants 1 to 8 be ordered to give the plaintiffs vacant possession of the incomplete flats agreed to be sold to them and in the alternative and without prejudice to the other prayers and in the event of the Court not decreeing specific performance, direct the payment of damages for breach of the scheme and the agreements, repayment of the purchase price paid by each of them and a charge on the properties specified to secure the same, etc.
(2.)THE sum and substance of the claim of the plaintiffs was that the Municipal Corporation of Greater Bombay is the owner of a large plot of land situated at Foreshore Road, admeasuring about 4444 4/9 square yards and bearing new Survey No. 9/8426, which came to be leased out on 21-12-1899 in favour of the predecessors of defendants 4 to 7 for a period of 50 years, which, in due course of time, came to be renewed on 21-12-1949 for a further duration of 49 years, subject to payment of the ground rent and complying with other conditions more fully stipulated therein; that subsequently on 23-10-1959 defendants 4 to 7 entered into an agreement with the original defendant No.1, a Company registered under the Companies Act, and carrying on business of constructing building and selling flats to members of the public on ownership basis, to develop the land by construction of two buildings and that under the said agreement the first defendant company, of which defendant No. 2 was a Promoter and Director, sought permission from the Corporation to develop the property by construction of buildings and the said permission was also granted on 28-3-1961 on condition that the ground rent payable would be Rs. 30,185.00 per annum. It is further stated that the defendant No.1 completed the construction of one building named as "Advent" in October, 1962, which came to be occupied by about 30 members forming themselves into a Co-operative Housing Society known as "Foreshore Co-operative Housing Society Limited" shown as 8th defendant. It is also stated that in February 1962, the first defendant made an advertisement in the Newspaper in respect of the proposed construction of the second building to be named as "Divya Prabha", inviting applications for residential flats to be constructed in accordance with the advertisement, pursuant to which the plaintiffs, eight in number, and defendants 9 to 25 were said to have approached the first defendant and entered into various agreements for purchase of such plots to be constructed. So far as the appellant (plaintiff No.4) is concerned, the agreement so entered into was said to have been on 8-9-1966 for purchase of flat bearing No. 71 on the seventh floor of the building with the area of the flat approximately at 1250 sq.ft. THE price agreed to be paid by the appellant was said to be Rs. 60,000.00 and the first defendant also seems to have secured the commencement certificate from the Corporation in the month of July, 1966, since the terms of agreement entered into envisaged the completion of the building and possession thereof to be handed over by 30/06/1969. While so, the Municipal Corporation seems to have called upon the lessees from time to time to pay the arrears of lease rent as well as the taxes payable in respect of the building already constructed, but neither the lessees nor the Society seems to have paid the same, resulting in accumulation of such arrears by the end of May, 1969 to Rs. 1,75,004.00, resulting, in turn, in the service of a Notice dated 27-6-1969 upon the lessees terminating the lease in accordance with the provisions contained in Section 527 of the Bombay Municipal Corporation Act on account of the default committed by the lessees in the payment rent and the violation of other terms of the lease. Notional possession of the entire plot was also said to have been secured by the Corporation on 4-8-1969 and as a matter of fact, it appears that from June, 1969 onwards, the construction activities in respect of building "Divya Prabha" ceased and the building permission granted by the Corporation also not having been renewed thereafter. THE appellant was said to have paid altogether a sum of Rs. 35,000.00 till June, 1969/-. It may be incidentally noticed, among other things, that one of the grounds of dispute raised by the Municipal Corporation is with reference to the construction of 9th floor in contravention of the approved plan. Several proceedings seem to have resulted, also between more than one or other parties concerned, in the Bombay City Civil Court as a result of which also the completion of the building could not be made as originally planned. THE present Suit culminating in the above appeal came to be instituted on 30-7-1969 by eight prospective purchasers, impleading the Advent Corporation (P) Ltd. and its Director as defendants 1 and 2, the Municipal Corporation being joined as defendant No.3, and the lessees of the plot being defendants 4 to 7 with Foreshore Co-operative Housing Society as defendant No. 8 and defendants 9 to 25, the prospective purchasers, other than the plaintiffs, of flats in the building "Divya Prabha".
The defendants 1 and 2 resisted the Suit claiming that the building could not be completed for circumstances beyond their control; that the occupants of building "Advent" started using the premises for commercial purpose in violation of the lease agreement, resulting in the termination of the lease by the Corporation and that in the absence of renewal/revival of the lease agreement and renewal of the building permission, it was impossible for completing the construction or the performance of the contract with the plaintiffs. After issues were framed, the suit was taken up for trial and plaintiff No.4, the appellant herein, and plaintiff No. 7 were said to have entered into the witness box to depose in support of their claims. The defendants did not seem to have let in any oral evidence, but on both sides, various documents, which were not in dispute, seem to have been marked. After conclusion of recording of the evidence, the third defendant-Corporation was said to have been deleted from the array of the defendants on the application of the plaintiffs Advocate. The Suit was said to have been not pressed as against defendant No. 8 also and before the arguments commenced, all the plaintiff's, except plaintiffs 4 and 7 and defendants 9 to 25, had settled the dispute with defendant No.1, resulting in the prosecution of the suit claim only by plaintiffs 4 and 7.
On an appreciation of the materials on record, the learned Trial Judge came to the conclusion that plaintiff No. 7 had also committed breach of the agreement and, therefore, was not entitled to specific performance of the agreement or for damages in lieu thereof, but only to get return of the purchase price with interest and for a charge upon flat agreed to be sold to him. So far as the appellant is concerned, the learned Trial Judge held that she was always ready and willing to perform her part of the contract and it was the first defendant who committed breach in not carrying out the terms of the agreement. In spite of recording such a finding, the learned single Judge, while considering the question as to whether the appellant was entitled to a decree for specific performance, was of the view that granting of specific performance being a discretionary remedy in equity, the Court may take into account, in exercise of such discretion, even factors other than the plaintiff's conduct and taking into account the several and serious imponderabilities as they were, in his opinion, and that further huge sums may be required to complete the proposed building, which cannot properly be assessed, arrived at the conclusion that the case on hand cannot be said to be one, wherein the grant of compensation in lieu of specific performance cannot be said to give the plaintiff an adequate relief. Consequently, while denying the relief of specific performance, the first defendant was ordered to pay to the appellant damages as assessed by the Commissioner for taking accounts with interest at 6% p.a. from the date of the decree till the date of payment/realization, in addition to ordering the repayment of Rupees 35,000/- with interest thereon at 9% p.a. from 4-10-1967 till the date of decree and for the subsequent period, at 6% p.a. till the date of payment/realization. A charge has also been created in favour of the appellant on Flat bearing No. 71 on the seventh floor in the incomplete building, for payment of the said sum, with further liberty to execute the charge only on and after 1-11-1981.
(3.)AGGRIEVED, the appellant herein as well as the seventh plaintiff, whose claim for specific performance was also similarly rejected by granting different reliefs, filed an appeal in Appeal No. 204 of 1981. Defendants 1, 2, 4, 6 and 7 alone were impleaded as respondents and even respondents 3 to 5 (defendants) 6 and 7) were not got served with notice, resulting in the appeal against them being dismissed for non-prosecution. The appeal was pursued only against respondents 1 and 2 (defendants 1 and 2). The cross-objections said to have been filed by respondents 1 and 2, came to be also dismissed for non-prosecution on account of failure on their part in removing the objections of the Registry. The learned Appellate Judges concurred with the nature of disposal given and the judgment and decree passed by the learned single Judge while rejecting the appeal, resulting in the above appeal before this Court.
While granting special leave on 10-2-1988, this Court restrained the respondents from transferring, alienating or parting with possession of Flat No. 71 on the seventh floor of the building known as "Divya Prabha". When the respondent brought to the notice of this Court that the building in question with all the other rights and interest in the leasehold land has been subsequently sold, the respondent was directed to place on record the document showing the sale/assignment. Notice was also directed to be issued to the Bombay Municipal Corporation. Subsequently, the Deed of Assignment dated 14-10-1994 was filed in this Court and the applications filed for impleading the State of Maharashtra as also the subsequent purchaser of the building and other rights and interest M/s. Gaurav Overseas (P) Ltd. under said Deed of Assignment, were allowed on 25-10-1999 and notice was directed to be served on the newly added parties, who were also granted time subsequently for filing the Counter. On 13-3-2001, the Counsel appearing for the State of Maharashtra stated that the Government had already taken a decision for renewal of lease, but in individual cases lease has not yet been renewed. In the light of promulgation of an Ordinance No. 32 of 2001, it appears that the respondent had applied for renewal of the lease to the Municipal Corporation of Greater Mumbai.