TMI Blog1997 (2) TMI 579X X X X Extracts X X X X X X X X Extracts X X X X ..... the society to take all necessary permissions for the purpose of development. By clause 2 it was provided that in order to carry out the scheme envisaged under the agreement and in order to enable the plaintiffs to put up the Construction the society puts the plaintiffs into possession of the suit plot. It is also recorded that the society has handed over the possession of the said vacant plot of land to the plaintiffs with a view to enabling them to put up construction. It is however agreed by the parties that the possession thereby granted to the firm does not amount to creating any right, title and interest in the plot of land in favour of the firm. Clause 3 provides that the plaintiff shall get the plans for construction of the building prepared by utilising the FSI of 51000 sq. ft. approximately and to submit the same to the Municipal Corporation of Greater Bombay for its approval and sanction. The firm was to bear and pay the expenses involved in getting the said plan prepared, the Architect's fees, scrutiny fees, deposits with the Municipal Corporation as well as any other expenses that may have to be incurred in this behalf. Clause 4 provides that the firm is to get th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the price as the said firm may in its absolute discretion deem fit and proper. It was also agreed that the sale proceeds shall be appropriated by the plaintiffs. The society shall have no right, title or interest or claim in respect of such sales effected by the firm nor shall the society be entitled to ask for and demand any account from the firm in respect of the construction cost. It is further agreed that the plaintiffs shall not sell the aforesaid shops, garages etc. to certain traders viz. liquor bars, manufacturing activities, workshops/garages, transport operators, tourist operators, mutton shops. Clause 12 provides that the construction work shall commence within one month from the date of the sanction and shall be completed within two years from the date of commencement. Clause 14 provides that the workers, contractors, RCC Specialists, Architects, Engineers and other personnel that may be engaged in the construction of the building shall be the employees and/or agents of the firm. It shall be the responsibility of the firm to pay them salaries, wages etc. Clause 16 provides that except the 50 flats the possession of all the flats, shops and offices shall remain with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id letter, the society was required to pay to the Board a sum of ₹ 4,24,410/- towards land filling and development charges. It was stated that the society had no funds. Therefore, they had requested the plaintiff to arrange for the payment of the said amount on a clear agreement and understanding that the said amount shall be treated as a loan by the plaintiff to the society. The society 'agreed to repay the said amount within 6 months without interest. It was further agreed that the society shall repay the said amount before taking possession of the flats in terms of the agreement dated 18th January, 1985. Consequent upon this, the possession was delivered to the plaintiff on 2nd May, 1988. Thereafter further problems were created by the defendants in that they had insisted for the change of architects. The plaintiffs did not agree to the change in the Architects as the same would cause further delay in completion of the project. Ultimately the society appointed Mr. Dilip Chitnis as its Architect in place of the earlier firm. The new Architect did not fully co-operate with the plaintiffs in the matter of submission of drawings, designs and other material required for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our society. We want to write them real facts because of which reason work is going slow. On 21st January, 1992 a letter is written by the Advocate of the society giving one month's notice in terms of clause 22 of the agreement. It is stated that this notice was not justifiably given by the society. Therefore, the plaintiffs advocate by letter dated 7th February, 1992 denied the allegations made in the notice. The plaintiffs, therefore, claimed that they are in possession of the suit plot. It is further stated that the agreement, Annexure-A, creates an interest in favour of the plaintiffs in respect of immovable property inasmuch as under the said agreement a right has been conferred upon the plaintiff to retain possession of the various shops and flats and to dispose of the same to the third parties. It is further pleaded that the agreement is in fact an agreement of agency coupled with interest and defendants are not entitled to terminate the same. The notice is clearly illegal. The society has not performed its obligations under the Agreement. It is also pleaded that they are entitled to receive ₹ 3 lakhs from the society since 21st May, 1991. By amendment made in p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g on these averments has submitted that they have performed all the obligations which they were enjoined to perform in the agreement. It is in fact the defendants who have been placing hurdles in the execution of the work. It was the defendants who did not hand over the possession of the correct plot. It was the defendants who did not get the FSI divided as required. It was the defendants who have not paid ₹ 3 lakhs which are due to the plaintiffs. It was the defendants who have changed the Architect. It is this architect who is playing in the hands of the defendants and has not co-operated with the plaintiff. The agreement as such has been specifically performed by the plaintiffs. The defendants cannot be permitted to take advantage of their own wrong. Therefore, the Notice of termination is illegal and void. The plaintiffs have made out a very strong prima facie case for the appointment of a Receiver as also injunction as prayed for. 5. Counsel for the defendant has on the other hand raised a number of preliminary objections. It is first argued that the suit itself is not maintainable as there has been a change in the constitution of the partnership. The change in the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osts on this ground alone. That being so, the case put forward by the defendant is squarely covered by the dicta of the Supreme Court in the aforequoted extract. The Counsel for the defendant has further argued that in fact the suit is also not maintainable on account of the fact that no notice has been given as required under section 164 of the Maharashtra Co-operative Societies Act. This plea has been specifically taken in the affidavit in reply of the defendant dated 28th February, 1992 in para 9. There is no dispute that notice as alleged has not been given. Counsel for the defendant has referred to AIR 1937 Bom 231, Dharwar Urban Co-operative Bank Ltd. vs. Ramchandra G. Alnavar and Ors. On page 235 the impact of not giving the notice as required under section 70 of the Bombay Co-operative Societies Act is concerned. Section 70 of the Bombay Co-operative Societies Act corresponds to section 164 of the Maharashtra Co-operative Societies Act. Section 70 has provided that no suit shall be instituted against a society or any of its officers in respect of any act touching the business of the society until the expiration of two months next after notice in writing has been delivere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oresaid case, the Division Bench has held as follows : It was urged by Shri Dalvi that this agreement may indirectly be concerned with the business of the society and that in terms of the Supreme Court decision that agreement may affect the business of the society. He further contended that the rights or claims under the agreement do not touch the business of the society. We are not able to accept the submission that this agreement affects the business of the society. In fact the very business of the society is to purchase and sell the lands, to construct buildings thereon and to allot flats to its members. In the background of this business of the society it would be idle to contend that the agreement which enables the society to get possession of a part of the land for reconstructing a new building thereon for the benefit of the members would not be a transaction touching the business of the society. Under these circumstances, in our opinion, the learned trial Judge was right in holding that the suit claim arises from an act touching the business of the society. The Counsel has further relied on 1982 Mh.L.J. page 484, O. N. Bhatnagar vs. Rukibai N. Bhavnani and others. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plaintiff in the suit as the agreement dated 18th Jan. 1985 is merely a development agreement and the same cannot be specifically performed. Learned Counsel has relied on a judgment given in Notice of Motion No. 2716 of 1987 in Suit No. 2673 of 1987, A. Nihalani vs. Mr. Wilfred D 'Souza and others. In that Notice of Motion this Court had the occasion to consider the nature of the agreement as to whether the same was simply a development agreement or an agreement for sale. Therein the agreement contemplated a payment of ₹ 2,85,000/- to the owners i.e. defendant Nos. 1 and 2. It permitted the plaintiff to develop the property and construct the building in which flats were to be sold on ownership basis as per the requirements and guidelines of the lessors of the land viz. Salset Catholic Cooperative Housing Society Ltd. The agreement envisages that within a period of 18 months the developer should provide to the owners and tenants a temporary alternative accommodation and that the owners should also remove the person who is occupying the garage. When disputes had arisen the agreement was cancelled and the reserved rights in favour of the plaintiff to develop the property ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tract still remains a building contract entered into with the aim of making profits by the expedient of constructing the building and selling the flats at a profit. We agree with the learned Single Judge that damages for breach of such a contract would be the adequate remedy. Appeal dismissed. The Division Bench judgment has been followed by a Single Judge Bench in Notice of Motion No. 763 of 1989 in Suit No 844 of 1989 on February 8, 1991. Therein also the parties were entered into an agreement which was very similar to the agreement in the present suit. The learned Judge after considering the characteristics of the agreement has held : The plaintiffs are professional builders/contractors and their aim in entering into the suit agreement was to make profit by completing building and selling the flats therein. Breach of such an agreement can be compensated by way of damages. No interest in land has been created by the defendants in favour of the plaintiffs under the said agreement. Argument of the Counsel that an interest in the land had been created by the defendants in favour of the plaintiffs, because the defendants had under the agreement agreed to sell to the plain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e plaintiff. The agreement says that the authority and the arrangement as arrived at between the plaintiff and defendant is irrevocable. It was, therefore, observed that the defendant therein had entered into an agreement with the plaintiff who had taken various steps in accordance with and in pursuance of the said agreement. The plaintiffs were always ready and willing to perform their part of the contract. As a consequence of this, nothing was pointed out on behalf of the first defendant which would disentitle the plaintiffs from the relief on equitable considerations. Thus it was held that the plaintiff had a prima facie case. The defendant therein was held singularly responsible for not complying with his part of the contract. A perusal of the said authority, however, shows that none of the authorities mentioned above which have been pointed out by the learned Counsel for the defendant in this case were pointed out to the learned Single Judge. This Court is bound by the decision given by the aforesaid Division Bench. 8. Counsel for the defendants has further argued that a perusal of the agreement would show that all permissions and sanctions were to be obtained by the plaint ..... X X X X Extracts X X X X X X X X Extracts X X X X
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