D.K. Deshmukh, J.@mdashThis appeal is not on board for final hearing, however, with consent of both the sides, the appeal is heard finally.
2. The original Plaintiffs, by this appeal, challenge the order dated 9th July 2009 passed by the learned Single Judge of this Court in notice of
motion No. 1490 of 2009 in suit No. 970 of 2009. That notice of motion was taken out by the Plaintiffs for certain interim order. The learned
Single Judge has dismissed that notice of motion. The present Appellants have filed the civil suit challenging the conveyances dated 9th May 2007
and 29th August 2007executed by the Defendant No. 1 Co-operative Housing Society in favour of Defendant No. 2 in respect of land which is
described in the plaint. It appears that in the year 1961, the Defendant No. 1 Co-operative Housing Society had purchased that land for a scheme
which is known as Orlem Scheme. The Plaintiffs were members of the Co-operative Housing Society and were also members of the Orlem
Scheme. The Society, it appears, had appointed a builder M/s Conwood Developers Pvt. Ltd. to develop the property. Admittedly, there were
61members of the Orlem Scheme. The original plan was to develop the land, carve out 61 plots of land for members of Orlem Scheme and rest of
the land was to be utilised by that Developer for construction for his own benefit. It appears that there was change of terms in the agreement with
the developer and now the agreement was that the Developer was to give two flats to each member of the Orlem Scheme i.e. total number of 122
flats were to be given. Some of the members of the Orlem Scheme found that the Society, instead of having the Orlem Scheme implemented by the
Developer, is trying to abandon that Scheme, therefore they filed a dispute in the Co-operative Court, joined the Society as a party as also the
Developer and basically sought an injunction against the Society restraining the Society from dropping the Orlem Scheme and also sought an
injunction that the Society would not permit the Developer to carry on development without first constructing 122 flats to be given to the members
of the Orlem Scheme. In that dispute, an interim order was passed on 20th August 1996. It appears that the Society filed a civil suit in this Court
being civil suit No. 1776 of 1997 against M/s Conwood Developers Pvt. Ltd. for carrying out development of the land in terms of the agreement
that was entered into with the Society. In that civil suit, notice of motion No. 1734 of 1997 was taken out for temporary injunction against the
Developer and in favour of the Society. By order dated 17th July 1998, the learned Single Judge of this Court granted temporary injunction in
favour of the Society and against the Developer. In appeal that was filed against the interim order of the Cooperative Court, the Appellate Court
by order dated 1st April 2002 modified the interim order of the Cooperative Court by substituting in place of the order passed by the Co-
operative Court, the order passed by the learned Single Judge of this Court in notice of motion No. 1734 of 1997. It appears that in the year
2005, the Society terminated the agreement with the original Developer M/s Conwood Developers Pvt. Ltd. and thereafter, Managing Committee
of the Society entered into an agreement with the present Defendant No. 2. It was decided by the Managing Committee to sell the land on as is
where is basis to the Defendant No. 2. The decision of the Managing Committee was put up before the General Body meeting dated 15th July
2006. The General Body of the Society accepted the proposal of the Managing Committee to sell the land on as is where is basis to the Defendant
No. 2. It appears that a dispute was filed by the present Plaintiffs before the Co-operative Court challenging the resolution of the General Body.
The Co-operative Court passed an interim order in favour of the Plaintiffs and against the Society, the conveyance in favour of the Defendant No.
2 was however executed it appears, before the interim order was passed. The present civil suit was filed in the month of March 2009 basically
challenging the conveyance. In that suit, a notice of motion was taken out for appointment of Receiver on the land as also for an order of injunction
restraining the Society and the Defendant No. 2 from carrying out any construction activity on the land. That notice of motion has been dismissed
by the learned Single Judge by the order impugned in the appeal basically on two grounds 1] the Plaintiffs are guilty of latches in instituting the suit
inasmuch as the suit has been instituted in the year 2009 when the conveyance was made in the year 2007 and 2] 41 out of 61 members of the
Orlem Scheme have accepted the money that is to be paid according to the General Body resolution. The learned Single Judge has also found that
the contention of the Plaintiffs that the conveyance is contrary to the order of the Co-operative Appellate Court has no substance.
3. We have heard learned Counsel appearing for both the sides. The principal submission of the learned Counsel appearing for Appellants is that
the execution of conveyance by the Society in favour of the new developer was contrary to the interim order passed by the Co-operative
Appellate Court which was in force at the relevant time. The order of the Cooperative Appellate Court on which reliance is placed is dated 1st
April 2002. That appeal was against the order dated 20th August 1996 passed by the Co-operative Court. The order dated 20th August 1996
reads as under:
1. Ad-interim injunction order dated 16th September 1991 is modified as follows:
The opponent society restrained from canceling Orlem Scheme and refunding money to the members of the Orlem Scheme and creating third party
interesting the land under the Orlem Scheme at south side of the Marve Road and handing over possession of the flats to be constructed on the
land of south side of the Marve Road to any purchaser, unless two flats each of about600 esq. Are reserved for the disputants.
2. Application dated 28th July 1994 filed by the disputants for joining the opponent No. 5(a), 5(b) and 5(c) as necessary partyis rejected and ad-
interim injunction granted in the said application is hereby vacated .
3. Application for appointment of Court Receiver is made by the disputants is hereby rejected.
4. Application dated 4th March 1996 filed by the disputants for joining party as 5(d)and 5(e) is hereby rejected.
5. No order as to costs.
The Appellate Court by its order dated 1st April 2002 substituted Clause (1) of the order dated 20th August 1996 by order dated 7th July 1998
passed by this Court in notice of motion No. 1734 of 1997 in suit No. 1776 of 1997. By order dated 17th July1998, the learned Single Judge of
this Court had granted interim order in terms of prayer Clauses (a)and (b) of notice of motion No. 1734 of 1997 against Defendant Nos. 1 to 4.
The Defendant Nos. 1 to 4in suit No. 1776 of 1997 were (1) Conwood Developers. Ltd.; (2) M/s Shriram Constructions Pvt. Ltd.; (3) Evergreen
Homemakers Pvt. Ltd. and (4) Vora Estate Developers. The Respondent No. 1 Society was not one of the Defendants in that suit, it was in fact
Plaintiff in that suit. Thus, the interim order dated 17th July 1998 passed by this Court in notice of motion No. 1734 of 1997 did not operate
against the Respondent No. 1 Society. Prayer clauses (a) and (b) of notice of motion No. 1734 of1997 read as under:
(a) that pending the hearing and final disposal of the suit, the Defendant Nos. 1 to 4 their servants and agents be restrained by an order and
injunction of this Hon'' ble Court from proceeding with any further construction upon any portion of the suit property, viz. the property more
particularly described in Exh. A hereto, save and except constructing 122 flats of600 esq. built-up area each to be provided by the Defendants to
the Plaintiffs;
(b) that pending the hearing and final disposal of the suit, the Defendant Nos. 1to 4, their servants and agents be restrained by an order and
injunction of this Hon'' ble Court from parting with possession of any of the flats in the building shown in red wash to the plan annexed at Exh. C
hereto comprising of C.T.S. No. 207 (part), C.T.S. No. 204(part)and C.T.S. No. 149 and/or permitting any person or persons from taking
possession of any of the said flats;
Thus, by order dated 17th July 1998, the High Court, at the instance of the Respondent No. 1 Society had restrained the erstwhile developer
Conwood Developers Pvt. Ltd. and other parties from carrying on any construction on the land without first constructing 122 flats for the members
of theorem Scheme and also from handing over possession of any flats on the land to any other person. Obviously, this order does not prevent the
Respondent No. 1 Society from transferring the land if it so decides. Clauses (2) and (4) of the order dated 20th August 1996 was set aside by
the Appellate Court and Clause (3) was confirmed, but that part is not relevant for the present purpose. It is thus clear that the learned Single
Judge was obviously right in concluding that the order of the Co-operative Appellate Court dated 1st April 2002does not operate to prevent the
Society from transferring the land. Therefore, the contention that the decision of the Society to transfer the land is contrary to the order passed by
the Cooperative Appellate Court referred to above has no substance.
4. It was contended before us that because number of members in the General Body who are not members of the Orlem Scheme is more than
persons who are members of the Orlem Scheme, decision in the General Body for transferring the land which was meant for construction of flats
for the Orlem Scheme members has been taken. However, it is to be seen that an affidavit has been filed in this suit on th behalf of the Respondent
No. 1 Society dated 9June 2009 wherein in paragraph 18 it is stated thus:
In the said meeting total 111 members were present. Out of 111 members, 84 members voted in favour of resolution, 13 members voted against
the resolution and the 14members abstained. It is pertinent to mention herein that of the members present 33 members were members of Orlem
Scheme of whom 22 members voted in favour and 11voted against the resolution.
There are total 61 members of the Orlem Scheme, out of 61 members, thus only 33 chose to remain present absent for the meeting of the General
Body and from out of 33 members of the Orlem Scheme present, 22 members voted in favour of the resolution which decided that the land is to
be sold on as is where is basis and members of Orlem Scheme are to be paid. This position has not been disputed by the Petitioners. In paragraph
24 of the same affidavit, the Society has stated thus:
I say that subsequent to the execution of the conveyance in favour of Defendant No. 2,the Defendant No. 3 being the Escrow Agent has released
the entire sum of Rs. 12 croresto this Defendant No. 1 Society. Defendant No. 1 Society has already paid 40 members an aggregate sum of Rs.
6,56,00,000/-. There are several other members also willing to take their share of money, however in view of the interim order passed by the
Cooperative Court this Defendant No. 1 Society is not in a position to pay the same.
Thus, out of 61 members, 40 members have actually accepted the payment to which they became entitled because of the resolution of the General
Body and execution of the conveyance. What is further to be noted here is that before the civil suit was filed, the Plaintiffs were made aware that
many of the members of the Orlem Scheme have accepted the payment to which they became entitled as a result of the resolution of the Society.
In this suit, a prayer has been made for setting aside the conveyance. If the conveyance is to be seta side, the Respondent Developer will have to
be paid back the money which has been paid by him to the Society and which in its turn has been paid by the Society to the members of the Orlem
Scheme. Thus, one of the consequences of granting decree in this suit would be that the members of the Orlem Scheme who have taken money
from the Society will have to bring back the money. Such an order would be adverse to the interest of those members who have taken money from
the Society and therefore, those members of the Orlem Scheme who have accepted the money would really be necessary parties to the suit. The
Plaintiffs despite knowing these facts before institution of the suit did not join those members as parties to the suit. Even after the affidavit was filed
which contains the above quoted statement that 40 members have accepted the payment, no attempt has been made to join those persons as
parties to the suit. Really speaking, therefore, the suit as framed and filed does not have all the necessary parties and therefore no interim relief can
be granted in favour of the Plaintiffs in such a suit. What is further to be seen is that the present suit has been instituted only by three members of
the Orlem Scheme. 22 members of theorem Scheme have in fact voted in favour of the resolution. The Plaintiffs had attended that meeting,
therefore it was within their knowledge that 22 members of the Orlem Scheme have voted in favour of the resolution of the General Body. Those
persons have also not been joined as parties to the suit. In our opinion, in this situation, the learned Single Judge was perfectly justified in not
granting any interim order which will jeopardize the interest of those members of the Orlem Scheme who had accepted the money paid pursuant to
the conveyance executed by the Society.
5. It was argued before us that the execution of the conveyance is contrary to the escrow agreement between the Society and the purchaser.
Perusal of the escrow agreement shows that it has been executed for the protection of the purchaser and therefore, it was open to the purchaser to
give up the protection that was given to him by the escrow agreement and release money in favour of the Society. The Plaintiffs cannot say that the
action taken contrary to the terms of the escrow agreement which was for the benefit of the purchaser only would be illegal. It was submitted
before us that the Society as such was not entitled to take a decision about the disposal of the amount for theorem Scheme because it is the
members of the Orlem Scheme who have contributed for the purchase of land. But it appears from the record that even that claim has no
substance. In the order of the Cooperative Appellate Court dated 16th September 2008,it has been noted that the land was purchased for an
amount of Rs. 3,64,000/- in 1961. Out of this amount of Rs. 3,64,000/-, only an amount of Rs. 1,77,700/- was contributed by 61 Orlem Scheme
members and rest of the amount came from 249 members of the Society. Thus, the contribution from other members of the Society is larger than
the contribution by the members of the Orlem Scheme. Thus, the fact that emerges is that the land was purchased by the Society, initially the
decision of the Society was to allot plots to 61 members who were called members of the Orlem Scheme. That decision was changed by the
Society and it was decided that instead of allotment of plots to 61 members of the Orlem Scheme, each member is to be allotted two flats in the
buildings to be constructed by the Builder. Finally it was decided by the Society to sell the entire land on as is where is basis and pay the amount to
the members of the Orlem Scheme. The present Plaintiffs oppose the third decision of the Society and instead want the Society to implement
second decision viz. to allot two flats to each member of the Orlem Scheme. In our opinion, as the land belongs to the Society, the Society was
fully competent to take any decision by majority of its members in relation to the land and the right of the Plaintiffs was to oppose that decision in
the meeting of the Society and if there was any illegality involved in the decision, then only the Plaintiffs who are members of the Society will be
entitled to challenge that decision. In so far as the present case is concerned, except saying that the decision of the Society is contrary to the interim
order passed by the Co-operative Appellate Court no other illegality was even urged in the Society taking the third decision. In our opinion,
therefore, it would not be appropriate to grant any interim order in favour of the Plaintiffs, who are only three members of the Society, which would
operate adverse to the interest of overwhelming majority of the members of the Orlem Scheme. In the result therefore, appeal fails and is
dismissed.
Parties to act on the copy of this order duly authenticated by the Associate / Private Secretary of this Court.
Certified copy expedited.