Dismissed

The Greater Bombay Co-Op Hsg. Soc.Ltd. v. Lavlesh Klassic Devlp. Pvt.Ltd.

Bombay HC22 Feb 2005CHS/625/2004

Case brief

AI extract

What is this about?

In an execution application regarding a consent decree arising from a dispute over land exchange and club membership forms, the petitioner sought relief against a defaulting respondent. The court held that the consent decree provided specific alternative remedies for default and declined to grant independent relief.

What did the court decide?

The appeal for execution was dismissed; no independent contract or appointment of a receiver was granted.

The Greater Bombay Co-Op Hsg. Soc.Ltd. Vs Lavlesh Klassic Devlp. Pvt.Ltd. — Bombay HC (2005) — LawSathi Research

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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O.O.C.J.

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CHAMBER SUMMONS NO.625 OF 2004

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IN
EXECUTION APPLICATION (L) NO.168 OF 2004

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IN

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SUIT NO. 4351 OF 2001

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 The Greater Bombay Cooperative
 Housing Society Ltd .... Plaintiff/
 Judg.Creditors
 versus
 Lavlesh Klassic Developers
 Anr. ..... Defedants/
 Judg. Debtors

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 Janak Dwarkadas with Ms. Snehal Paranjpe i/b. F.
 Rashmikant for the plaintiffs.
 Mr. J. Chinoy with C.S. Kapadi i/b. Shah for the
 defendants.

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 CORAM: S.U. KAMDAR, J.

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 DATE : 22ND FEBRUARY, 2005.

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P.C. :

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 1. The present chamber summons is taken out for
 diverse reliefs inter-alia for an execution of the

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 consent decree dated 10.1.2003. Some of the material

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 facts of the present case are as under.

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 2. Some time in or about 1996 a proposal for
 development of the plot of land at Juhu was mooted by
 the plaintiff society. In pursuance thereof the
 plaintiff society in its general body meeting held on
 20.7.1996 decided to enter into a Memorandum of
 understanding for development of the said plot of
 land at Juhu. The said plot of land was however
 reserved for public amenities and recreation ground.
 A proposal was therefore initiated by the plaintiff
 and the defendant builder for an exchange of the plot
 of land at Juhu with a plot of land situated at Mira
 Road of an aggregate area of 70,000 sq.ft to be
 utilised for construction of 168 residential flats
 alongwith necessary amenities.

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 3. On 30.10.96 a MOU was entered into between the
 plaintiff and the defendant.

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 4. The said MOU inter alia provided that the

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 defendant will construct on a plot of land at Mira
 Road various residential flats, community hall,
 common area and facilities. It is further provided
 that the said construction of the tenaments at Mira
 Road will be completed within the time bound
 schedule. In consideration thereof the builder was
 hand over a plot of land belonging to the plaintiff
 at Juhu. The said plot of land was to be utilised by
 the builder for construction of a club known as ‘Club
 Millenium’.

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 5. It was agreed in the said MOU that the
 defendant will be given free of cost residential
 flats and 168 residential tenements with all
 amenities and 135 membership forms will be given by
 the defendant to the plaintiff in the said proposed
 club free of cost. It was also agreed that the said
 135 membership given to the plaintiff society the
 same will be be non-transferable. In the said MOU
 the properties at Juhu stood exchanged with the Mira
 Road project of the defendant herein. On 10.4.1998 a
 resolution was passed by the plaintiff for exchange

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 of all rights in exchange of plot of land.

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 6. On 3.5.1998 a final agreement was arrived at
 between the plaintiffs and the defendants. It seems
 that there were breaches and the Mira Road project
 could not be developed within a period of twelve

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 months as contemplated therein.

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 7. Consequently on 13.12.2001 the plaintiffs

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 filed the suit being Suit no. 435 of 2001 in this
 court seeking specific performance of the said
 agreement dated 3.5.1998 in respect of the Mira Road

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 project and various other reliefs. In that suit
 ultimately consent terms were arrived at on 10.1.2003
 which is a subject matter of the present execution
 application. Present chamber summons is taken out
 for execution of the said consent decree by claiming

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 diverse reliefs.

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 8. The said consent terms dated 10.5.2001

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 inter-alia provides as under :

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 "2. Agreed and ordered that defendant no.1
 do deposit a sum of Rs.2.5 crore (Rupees Two
 Crore Fifty Lacs only) on or before 28th
 February, 2003 in the said bank account and
 further agrees to deposit a further sum of
 Rs.1.00 Crore (Rs. One Crore only) on or
 before 30th April, 2003 and further sum of
 Rs.1.00 crore (Rupees One Crore only) on or
 before 30th July, 2003 and further sum of
 Rs.50,00,000/- (Rupees Fifty Lacs only) on or
 before 30th October, 2003 in the said bank
 account to be utilised for completing the
 balance work at Mira Road on the property
 described in Annexure‘A’ hereto.

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 3. It is further agreed confirmed and
 declared that :

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 (i) Defendant no.1 shall complete
 the Mira Road Project on or before
 15th November, 2003 with a grace
 period of 9 months by utilizing the
 amounts deposited in the Bank Account
 to be opened as stated in clause 2
 above.

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 (ii) If defendant no.1 fails to
 complete the project within the period
 stipulated hereinabove, defendant no.1
 will not be entitled to operate the
 said bank account which shall be then
 operated by two of the plaintiffs
 authorized signatories only and the
 plaintiffs alone shall be entitled to
 appoint an independent team of persons
 for completion of the project.

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 7. Agreed, confirmed and declared that
 the defendant no.1 do hereby deposit
 simultaneously with the execution of these
 terms with the advocates for the plaintiffs
 M/s. Federal and Rashmikant 250 blank

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 membership forms duly approved and relevant
 blank certificates duly signed by the persons
 authorised to sign by defendant no.1 for
 enrolment of Family Membership of Club
 Millenium Juhu as per the resolution dated
 31st December, 2001 passed by the defendant
 no.1 and the said M/s. Federal and Rashmikant
 shall release upto 200 of such forms and re
 relevant certificates to defendant no.1
 through its advocate only id if defendant no.1
 deposits in the aforesaid joint account
 Rs.2.50 lacs (Rupees Two Lacs Fifty Thousand
 only) per form. On release of each forms and
 relevant certificate by M/s. Federal &
 Rashmikant as aforesaid defendant no.1 shall
 be corresponding absolutely entitled to enroll
 one member of Club Millennium Juhu against the
 release of such forms and Certificate by M/s.
 Federal & Rashmikant for such membership fee
 subscription and deposit and on such terms and
 conditions as defendant no.1 may deem fit
 without in any way accounting for the same to
 the plaintiffs. If the defendant no.1 fails
 to deposit the amount mentioned in para-2
 above on its due date the said M/s. Federal
 and Rashmikant shall be corresponding entitled
 to release the said 200 Forms and relevant
 certificates to the plaintiff no.1 less such
 form and certificates that may have been
 released to the defendant no.1 against deposit
 of Rs.2.50 lakhs as aforesaid and the
 plaintiff no.1 shall be entitled to admit new
 members of Club Millennium Juhu for such fees
 but not less than Rs.2.50 lakhs per member and
 fill in the name of the new member in such
 certificates and deposit the said fees in
 aforesaid joint account and utilize the said
 fees for completing the remaining construction
 of Mira Road Project. The defendant no.1
 shall accept such members as duly enrolled
 members of Club Millenium Juhu.

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 8. Agreed, confirmed and declared that
 any short fall between the fees collected
 arising out of enrollment of the said 200

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 members of Club Millenium Juhu and the amount
 required for completion of Mira Road project
 will be brought in by the defendants who
 agrees to deposit the full extent of the
 shortfall on or before 15th November, 2003.

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 13. Agreed confirmed and declared that the
 remaining 50 forms with relevant certificates
 shall be retained by M/s. Federal &
 Rashmikant, Advocates for the plaintiffs and
 will be released to defendant no.1 through
 their advocate on compliance of the defendants
 obligations mentioned in paragraphs 11 and 12
 hereinabove. If the defendant no.1 fails to
 comply with the obligation mentioned in
 paragraphs 11 and 12 hereinabove, the said
 M/s. Federal & Rashmikant shall be entitled
 to release the said 50 forms and relevant
 certificate to the plaintiff no.1 and the
 plaintiff no.1 shall be entitled to admit new
 members of Club Millenium Juhu for such fees
 as the plaintiffs may deem fit and deposit the
 said fees in the said joint bank account and
 utilize such fees for completion of Mira Road
 project. On compliance of the obligation
 referred to in paragraphs 11 and 12
 hereinabove by defendant no.1 M/s. Federal
 and Rashmikant shall release the said 50 forms
 and relevant certificates to the defendant
 no.1 less such forms and certificate that may
 have been released to the plaintiffs.

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 9. The scheme of the consent terms contemplates
 that the defendant has to deposit a sum of Rs.5
 crores on the different dates as provided under
 clause-2 thereof. The said amount was supposed to be
 deposited for the purpose of construction of the

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 tenaments at the Mira Road project. Under clause-3
 thereof it was provided that the defendant shall
 complete the said Mira Road project on or before
 15.11.2003 with a grace period of 9 months by
 utilising the amount deposited as provided in
 sub-clause (i) of clause-2 of the consent terms.
 Clause-3 provides that if the defendant fails to
 complete the project within the period stipulated
 herein above the defendant no.1 will be entitled to
 operate the said bank account which is specifically
 open under clause 2 of the consent terms. It is also
 provided thereunder that the plaintiff shall be
 entitled to appoint an independent team of persons
 for the purpose of completion of the said project.
 Under clause-7 it is provided that the defendant no.1
 will deposit with the advocates of plaintiffs 250
 blank membership forms of ‘Club Millenium’ duly

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 approved. It is provided that in an event of default
 on the part of defendant no.1 to deposit the said

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 amount of Rs.5.00 crores as contemplated in clause-2
 the said 200 forms out of 250 forms shall be released
 by the advocates for plaintiffs to the various
 persons to become a member of the proposed club

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 Millenium at the plot of land at Juhu. The said

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 forms will be sold by the plaintiffs for an amount of
 not less than Rs.2,50,000/- It was contemplated in
 clause-7 that the said amount of Rs.2.50 lacs for
 each form which will aggregate for the fees of 200
 members will bring in a sum of Rs.5.00 crores. It
 was provided that the said amount which is recovered
 by sale of the forms would be deposited in the joint
 account which is opened under clause-1 of the consent
 terms and the same will be used for completing the
 said construction of the Mira Road project. It has
 been provided under clause-7 that defendant no.1
 shall accept members enrolled by the plaintiff as
 duly enrolled members of ‘Club Millenium’ without any
 question or challenge. Clause-8 of the consent terms
 further provided that in an event if there is
 deficiency in the amount for completion of the
 project at Mira Road i.e. if the project required
 over and above Rs.5.00 crores arising out of
 enrollment of the said 200 members then in that event
 the defendant shall bring in the balance amount in
 the kitty for the purpose of completion of the said
 contract. Under clause-13 it is provided that

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 balance 50 forms will be retained by the plaintiffs
 advocate till and until the defendant complies with
 its obligations as contemplated under clause 11 and
 12 of the said consent terms which inter-alia
 provides for demarcation of boundaries of the said
 plot of land at Miraroad and for obtaining occupation
 certificate from the BMC. Under clause-12 it was
 provided that defendant no.1 shall make out
 marketable title and convey the property to the
 plaintiff and if there is default on the part of
 defendant no.1 as contemplated in clause11 and 12
 then in that event the plaintiff will be entitled to
 utilise the amount recovered by further disposing off
 and releasing the said remaining 50 membership forms
 of ‘Club Millenium’. The reading of clause 2, 3, 7,
 8, 11, 12 and 13 provides an integrated scheme for
 the development of the Mira Road project. Under the
 said scheme it is provided that initially the
 defendant will bring in required 5 crores and on its
 failure to do so the plaintiff will bring in the
 amount by selling the said forms ‘Club Millenium’.
 The remedy for the default is also contemplated
 therein by which the amount shall be brought in by

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 distributing the forms to the plaintiff society and
 the plaintiff society is entitled to carry out
 construction on the Mira Road project from the sale
 proceeds of the said forms. A further provisions are
 made under clauses of the consent terms that even if
 there is no final conveyance then in that event also
 the defendant no.1 will be liable and on his failure
 to grant conveyance the balance 50 forms will be
 released and the membership will be granted for the
 purpose of recovery of an additional amount of not
 less than Rs.50 lacs.

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 10. The learned counsel for the plaintiffs in
 support of the application has contended that
 admittedly there is default on the part of defendant
 no.1 to bring in the necessary funds of the sum of
 Rs.5 crores as contemplated under the consent terms.
 He further contended that it is an admitted position
 that there is a default on the part of the defendant
 no.1 to complete the project at Mira Road of
 construction of 168 residential tenements within the
 stipulated period of time as provided under clause-3
 of the said consent terms. He thus contended that in

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 view of defaults on the part of the defendant no.1

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 the plaintiffs will be entitled to execute the said

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 consent decree and also entitled to various reliefs
 as claimed in the chamber summons. In so far as
 clause-7 of the consent terms is concerned the
 learned counsel for the plaintiff has contended that
 though it is true that out of 250, 200 membership
 forms are released by the plaintiffs advocate but it
 is contended that they were unable to dispose off the
 said membership forms and gather the requisite amount
 of Rs.5.00 crore as contemplated in clause-7 thereof.
 It is contended that there are no members who are
 willing to become members of the Club Millenium
 because the defendant no.1 has failed to provides
 necessary amenities which was represented by him in
 the brochures and thus clause-7 could not be operated
 upon. It has been contended by the learned counsel
 for the plaintiffs that under the terms and
 conditions of the consent terms the obligation on the
 part of defendant no.1 to bring an amount of Rs.5.00
 crores as provided in clause 2 is an absolute and not
 dependent upon and or shifted upon the plaintiffs by
 virtue of clause-7 of the consent terms. It has been

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 contended that the provision of clause-7 of the
 consent terms is merely an additional safeguard and
 does not discharge the obligations on the part of
 defendant no.1 to bring the aforesaid amount of Rs.5
 crores as contemplated under clause-2 therein.

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 11. On the other hand learned counsel appearing

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 for defendant no.1 has contended that the consent
 terms itself provides for a consequence for default
 and or for non-compliance with clause-2 and 3. It
 has been contended that once the consent terms
 provides for consequence then the remedy of execution
 of the decree has to be in accordance with the tennor
 of the terms and conditions set out therein and not
 independent as sought to be contended by the learned
 counsel for the plaintiff. In so far as sum of
 Rs.60,000/- additionally claimed by the defendant as
 entrance fees over an above Rs.2.50 lakhs for the
 forms released by the plaintiffs is concerned the
 defendant has fairly conceeded that the said amount
 is only towards the entrance fees but the same is not
 provided in the consent terms and therefore it will
 not be insisted upon. He has further stated that the

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 amount of Rs.60,000/- is collected only in respect of
 two of the members of which the plaintiff have asked
 defendant no.1 to enroll and for which he is willing
 to give necessary credit. He further makes it clear
 that in so far as membership collected by the
 defendant themselves are concerned he will collect
 Rs.60,000/- extra but in so far as the membership
 enrolled by the plaintiffs are concerned he will not
 insist on such additonal amount and he will deposit
 entire Rs.2.50 lakhs as contemplated under clause-2
 and 7 of the consent terms.

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 12. Mr. Chinoy also made a statement that till
 and until the said project is completed under the
 terms and conditions of the consent terms he will not
 enroll any new members of the said Club Millennium.

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 13. I have considered the rival submissions of the
 parties. The contention of Mr. Dwarkadas learned
 counsel for the plaintiff that the scheme of consent
 terms under clause-2, 3,7 and 8 contemplates that the
 obligation on the part of defendant no.1 to bring a
 sum of Rs.5.00 crores is absolute cannot be accepted

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 for the simple reason because clause-7 provides as
 under :

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 ". If the defendant no.1 fails to deposit
 the amount mentioned in para 2 above on its
 due date the said M/s. Federal and Rashmikant
 shall be corresponding entitled to release the
 said 200 Forms and relevant certificates to
 the plaintiff no.1 less such form and
 certificates that may have been released to
 the defendant no.1 against deposit of Rs.2.50
 lakhs as aforesaid and the plaintiff no.1
 shall be entitled to admit new members of Club
 Millennium Juhu for such fees but not less
 than Rs.2.50 lakhs per members and fill in the
 name of the new member in such certificates
 and deposit the said fees in aforesaid joint
 account and utilize the said fees for
 completing the remaining construction of Mira
 Road Project. The defendant no.1 shall accept
 such members as duly enrolled members of Club
 Millennium Juhu."

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 14. The para reproduced in clause-7 makes it clear
 that obligations of the plaintiffs and defendants are
 reciprocal obligations. In an event of default on
 the part of defendant no.1 to bring a sum of Rs.5.00
 crores the consent terms expressly provides that the
 said deficit will be made good by distribution of
 forms and the said amount released will be utilised
 for the completion of the project at Miraroad. In
 view of the express provisions of the consent terms

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 it is not possible for me to accept the contention
 that the distribution of forms and recovery of an
 amount of Rs.2.5 lacs each form totalling to Rs.5
 crores is only an additional safeguard. In my
 opinion the scheme of the consent terms itself
 provides for an alternative. Firstly, the defendant
 no.1 is required to carry out his obligation and on
 failure to do so the consent terms provided for
 recovery of necessary funds by distribution of forms
 by the plaintiffs to put in necessary funds of a sum
 of Rs.5.00 crores. Even in respect of completion of
 the project the safeguards are provided by virtue of
 various terms and conditions of the consent terms, in
 view thereof it is not possible for the court to
 execute the said consent decree in a manner otherwise
 thus what is provided for therein. It is well
 settled that this court as executing court cannot go
 behind the terms of the said consent decree and
 therefore I am not inclined to accept the contention
 of Mr. Dwarkadas that I should ignore the express
 terms of the consent terms and grant reliefs which
 are sought in the present chamber summons including
 the appointment of court receiver and directions

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 against the defendant no.1 to take all steps to

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 complete the construction and or bring in the amount.

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 In view thereof I do not find any merits in the

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 chamber summons and dismiss the same.

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 sd/-

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 ********

The Greater Bombay Co-Op Hsg. Soc.Ltd. v. Lavlesh Klassic Devlp. Pvt.Ltd.

Case brief

What is this about?

What did the court decide?

The Greater Bombay Co-Op Hsg. Soc.Ltd. v. Lavlesh Klassic Devlp. Pvt.Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Parties & counsel

Coram

Case details

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