1. Heard Mr. Santosh Goswami & Mr. Pawan Kumar Ray, Advocates, for the complainants and Mr. Rahul Malhotra, Advocate, for opposite party-1 and Mr. Himanshu, Advocate, for opposite party-2.
2. Maharashtra Housing & Area Development Authority (MHADA) constructed 3 individual buildings, numbered as Building Nos.3, 4 and 5 (consisting total 60 flats), on Survey No.7 and CTS No.27 at village Goregaon, Taluka Borivali at Siddharth Nagar, Goregaon (West), Mumbai. These flats were allotted to different persons, who formed Goregaon Pearl Co-operative Housing Society Limited (the society) on 25.01.1982 and get it registered under Maharashtra Cooperative Housing Societies Act, 1960. The MHADA leased the said buildings and land through lease deed dated 26.09.2006 and sold the buildings with land on the same day i.e. 26.09.2006 to the society. The society decided to redevelop above three buildings, merging it in two wings. Redevelopment plan as submitted by Sai Siddhi Developers (opposite party-1) (the developer) was approved in special meeting of general body of the society held on 18.06.2006. The society entered into Re-development Agreement dated 26.09.2007 with the developer and executed Power of Attorney in its favour. The developer get the building plan of new building sanctioned from Brihan Mumbai Municipal Corporation vide I.O.D. No.CHE/9942/BP(WS)/AP dated 16.08.2007, for ground + 15 upper floors for A-Wing and B-Wing. The developer obtained NOC from other departments for construction of the new building. As per Re-development Agreement, the developer had to allot 32 flats to the existing flat owners in A-Wing and 28 flats to existing flat owners in B-Wing and sell additional flats to prospective buyers. In the meantime, Development Control Regulation of Greater Mumbai, 1991 was amended in the year 2008, by which, permissible FSI was increased from 2.4 to 2.5 under Regulation-33(5). The developer deposited Rs.8.21 crores and applied for additional FSI, which was approved by the MHADA vide revised offer letter dated 25.08.2011. The developer submitted a revised building plan for approval, which was approved on 14.06.2012 and 28.11.2013. The developer advertised for sale of the flats falling in its share, on which, the complainants booked the flats, entered into agreement for sale and paid consideration but delivery of possession was delayed, due to which above complaints are filed.
3. Sandeep Grover and Jyoti Grover have filed CC/1710/2016, for directing Goregaon Pearl Co-operative Housing Society (opposite party-2) to handover possession of the flat, within stipulated period; and for directing SSD Escatics Pvt. Ltd. (opposite party-1) to (i) pay interest @12% per annum, on their deposit of Rs.15888175/-, from December, 2014 till its actual realization; (ii) pay Rs.6004315/-, the amount of Pre-EMI interest on their loan, as paid them to the bank; (iii) pay Rs.45000/- per month from the date of booking till the date of delivery of possession towards rent paid by them; (iv) pay Rs.23270/- per month from the date of booking till the date of possession, towards loss suffered by way Income tax rebate; (v) pay Rs.100000/-, as compensation for mental agony and harassment; (vi) pay Rs.100000/- as litigation costs; and (vii) any other relief which is deemed fit and proper in the facts and circumstance of the case. The complainants stated that Sai Siddhi Developers (opposite party-1) (the developer) was a partnership firm, registered under Partnership Act, 1932 (now the partners incorporated SSD Escatics Pvt. Ltd. under Companies Act, 2013 and amalgamated the firm in it). The developer advertised for sale of flats in “Sai Goregaon Pearl Co-operative Housing Society Limited” at Siddharth Nagar, S.V. Road, Goregaon (W), Mumbai, in the year 2013. The developer approached the complainants in December, 2013 and convinced them for purchasing a flat in above project. Believing upon the representations of the developer, the complainants booked Flat No.902, B-Wing on 01.12.2013 and deposited Rs.500000/-. As per demand, the complainants further deposited Rs.1000000/- on 07.01.2014, Rs.1000000/- on 15.01.2014 and Rs.755000/- on 15.01.2014. The developer executed an Agreement for Sale dated 19.03.2014, in favour of the complainants of Flat No.902, B-Wing, carpet area 1207 sq.ft. and one car parking for consideration of Rs.16275000/-. The complainants further deposited Rs.843800/- on 19.03.2014 and Rs.11789375/- on 31.03.2014 (total Rs.15888175/-). The complainants took loan of Rs.13431425/- from HDFC Ltd. on 31.03.2014, for payment of the consideration. Clause-10 of the agreement provides for handing over possession on or before December, 2014. But the developer failed to handover possession on due date. The complainants made several calls and also personally visited to the office of the developer and inquired about the delivery of possession, then some tentative date used to be given. The complainants then gave a legal notice dated 15.06.2015 to the developer for handing over possession till 31.05.2015. In spite of service of the notice the developer did not respond. The complainants paid total Rs.6004315/- as Pre-EMI interest to HDFC Ltd. on their loan and suffering loss of Rs.23270/- per month as Income tax rebate and Rs.45000/- per month as rent due to delay in possession.
4. The complainants in CC/1710/2016 filed IA/1676/2018, for amending the complaint, which was allowed on 17.09.2019 and IA/11087/2019, for impleading Goregaon Pearl Co-operative Housing Society Limited (the society) as opposite party-2, which was allowed on 17.07.2019. In the amended complaint, the complainants stated that the society filed CC/337/2015, before this Commission, in which, an interim order, directing to maintain status quo and restraining the developer from creating third party right over the project property, was passed on 29.07.2015 and 18.12.2015. The society also moved an application under Section-9 of Arbitration and Conciliation Act, 1996 (registered as Arbitration Petition No.160 of 2017) before Bombay High Court, for an interim relief. The dispute was compromised between the society and the developer and a Consent Terms was executed between them on 16.05.2017. In view of Consent Terms, CC/337/2015 was dismissed as withdrawn on 19.07.2017 and Arbitration Petition No.160 of 2017 was dismissed as withdrawn on 07.07.2017. However, again the dispute arose between the society and the developer and the society terminated Development Agreement and Power of Attorney dated 26.09.2007, of the developer on 09.06.2018 and filed Arbitration Petition No.665 of 2018 under Section-9 of Arbitration and Conciliation Act, 1996 before Bombay High Court, in which, Mr. Amrut Joshi, Advocate was appointed as ‘Sole Arbitrator’ vide order dated 30.07.2018. ‘Sole Arbitrator’ passed an interim award dated 17.09.2018, directing the developer to handover possession of the property to the society and restrained the developer from interfering in appointment of new developer and creating any third party interest over the project property and also appointed a receiver to get the property vacated by the developer. The developer challenged the interim award dated 17.09.2018 in Commercial Arbitration Petition No.1072 of 2018, which was dismissed by Bombay High Court, vide order dated 14.12.2018. The developer challenged these orders in SLP (C) No.1365 of 2019, which was dismissed on 21.01.2019. Some of the home buyers filed SLP (C) No.D-2014 of 2019, challenging the interim award and order of High Court, which was dismissed on 25.01.2019, giving them liberty to submit their claim before the Arbitrator. The developer vacated the project premises on 27.01.2019. The home buyers moved an application before the Arbitrator, which was rejected on 27.02.2019. Some of the home buyers filed a complaint before Maharashtra Real Estate Regulatory Authority (MRERA), in which, MRERA has directed the developer to handover a list of third party purchasers. The society in the meantime passed a resolution dated 12.05.2019, for allotting the flats in B-Wing to its members and Flat No.902 was proposed to be allotted to Jalalbhai Memonji Parsia. As directed by MRERA, the society conducted meeting dated 23.06.2019, in which, it was resolved to settle the dispute amicably. The society again passed a resolution dated 08.07.2019, for allotting the flats in B-Wing to its members.
In CC/1710/2016, the complainants filed Rejoinder Reply, Affidavit of Evidence of Sandeep Grover. Opposite party-1 filed Affidavit of Evidence and Affidavit of Admission/Denial of document of Deep Tana, in which, it has been stated that in view of Consent Term dated 07.07.2017, the developer had completed construction of B-Wing and finishing work was going on. The MHADA sanctioned additional FSI on 16.05.2017, on deposit of Rs.14.27 crores by the developer and the developer was raising construction with full swing. Opposite party-2 filed Affidavit of Evidence of Maya Sejpal. The developer filed IA/8491/2019 for additional evidence. All the parties have filed their written submissions.
5. Mahendra Bansidhar Agarwal has filed CC/875/2017, for directing Goregaon Pearl Co-operative Housing Society (opposite party-2) to handover possession of the flat, within stipulated period; and for directing SSD Escatics Pvt. Ltd. (opposite party-1) to (i) cancel the booking of the subject flat and refund Rs.15756538/- along with interest 18% from the date of payment till realization; (iii) pay Rs.5000000/- as compensation for mental agony and harassment; (iv) pay Rs.200000/- as litigation costs; and (vii) any other relief which is deemed fit and proper in the facts and circumstance of the case. The complainants stated that Sai Siddhi Developers (opposite party-1) (the developer) was a partnership firm, registered under Partnership Act, 1932 (now the partners incorporated SSD Escatics Pvt. Ltd. under Companies Act, 2013 and amalgamated the firm in it). On 26.09.2007, the opposite parties entered into redevelopment agreement dated 26.09.2007 with Goregaon Pearls CHS Ltd. (opposite party) who undertook to demolish and reconstruct the buildings of the said society and in consideration obtained right to sell some additionally constructed flats to their own customers on agreed terms, price etc. On 26.10.2012 complainant contacted the opposite party at the proposed site and enquired about the price, size and time of delivery of the flat in the project. The complainant was informed that flats measuring of 1207 sq.ft. under “down payment plan”, costing Rs.16542500/- in the project titled Sai Goregaon Pearls CHS Ltd. were available for booking. The possession of the flat was proposed to be given by June, 2015. Believing upon the representations of the developer, the complainants booked Flat No.1603, B-Wing on 01.12.2013 and deposited Rs.500000/-. As per demand, the complainant further deposited Rs.1350000/- on 07.01.2013, Rs.1458500/- on 14.01.2013 and Rs.165425/- on 15.04.2013., Rs.511163/- on 15.04.2013, Rs.10488050/- on 29.04.2013 and Rs.1283400/- on 01.06.2013. The developer executed an Agreement for Sale dated 10.04.2013, in favour of the complainant of Flat No.1603, B-Wing, carpet area 1207 sq.ft. and one car parking for consideration of Rs.16542500/-. The complainant paid Rs.15756538/-by 01.06.2013 i.e. upto 98% of the basis sale price. The construction could not be completed till the promised date of possession i.e. by June, 2015. The re-scheduled date for completion of the construction and delivery of possession was fixed as 31.07.2016. However, it was again extended to Jun, 2017. The complainant sent legal notice dated 06.03.2017 calling upon opposite party for delivery of possession of the flat but of not avail. Hence the complaint was filed.
6. The complainants in CC/875/2016 filed IA/14932/2018, for amending the complaint, which was disposed of 10.12.2018 and IA/13938/2019, for impleading Goregaon Pearl Co-operative Housing Society Limited (the society) as opposite party-2, which was allowed on 19.12.2019. In the amended complaint, the complainants stated that the society filed CC/337/2015, before this Commission, in which, an interim order, directing to maintain status quo and restraining the developer from creating third party right over the project property, was passed on 29.07.2015 and 18.12.2015. The society also moved an application under Section-9 of Arbitration and Conciliation Act, 1996 (registered as Arbitration Petition No.160 of 2017) before Bombay High Court, for an interim relief. The dispute was compromised between the society and the developer and a Consent Terms was executed between them on 16.05.2017. In view of Consent Terms, CC/337/2015 was dismissed as withdrawn on 19.07.2017 and Arbitration Petition No.160 of 2017 was dismissed as withdrawn on 07.07.2017. However, again the dispute arose between the society and the developer and the society terminated Development Agreement and Power of Attorney dated 26.09.2007, of the developer on 09.06.2018 and filed Arbitration Petition No.665 of 2018 under Section-9 of Arbitration and Conciliation Act, 1996 before Bombay High Court, in which, Mr. Amrut Joshi, Advocate was appointed as ‘Sole Arbitrator’ vide order dated 30.07.2018. ‘Sole Arbitrator’ passed an interim award dated 17.09.2018, directing the developer to handover possession of the property to the society and restrained the developer from interfering in appointment of new developer and creating any third party interest over the project property and also appointed a receiver to get the property vacated by the developer. The developer challenged the interim award dated 17.09.2018 in Commercial Arbitration Petition No.1072 of 2018, which was dismissed by Bombay High Court, vide order dated 14.12.2018. The developer challenged these orders in SLP (C) No.1365 of 2019, which was dismissed on 21.01.2019. Some of the home buyers filed SLP (C) No.D-2014 of 2019, challenging the interim award and order of High Court, which was dismissed on 25.01.2019, giving them liberty to submit their claim before the Arbitrator. The developer vacated the project premises on 27.01.2019. The home buyers moved an application before the Arbitrator, which was rejected on 27.02.2019. Some of the home buyers filed a complaint before Maharashtra Real Estate Regulatory Authority (MRERA), in which, MRERA has directed the developer to handover a list of third party purchasers. The society in the meantime passed a resolution dated 12.05.2019, for allotting the flats in B-Wing to its members and Flat No.1207 was proposed to be allotted to Jalalbhai Memonji Parsia. As directed by MRERA, the society conducted meeting dated 23.06.2019, in which, it was resolved to settle the dispute amicably. The society again passed a resolution dated 08.07.2019, for allotting the flats in B-Wing to its members.
In CC/875/2017, the complainants filed Rejoinder Reply, Affidavit of Evidence of Mahendra Bansidhar Agarwal. Opposite party-1 filed Affidavit of Evidence and Affidavit of Admission/Denial of document of Deep Tana, in which, it has been stated that in view of Consent Term dated 07.07.2017, the developer has completed construction of B-Wing and finishing work was going on. The MHADA has sanctioned additional FSI on 16.05.2017, on deposit Rs.14.27 crores by the developer and the developer was raising construction with full swing. Opposite party-2 filed Affidavit of Evidence of Maya Sejpal. The developer filed IA/11385/2019 for additional evidence. All the parties have filed their written submissions.
7. Ram Pyare Yadav and Dropati Rampyare Yadav have filed CC/1103/2017, for directing Goregaon Pearl Co-operative Housing Society (opposite party-2) to handover possession of the flat, within stipulated period; and for directing SSD Escatics Pvt. Ltd. (opposite party-1) to (i) pay interest @12% per annum, on their deposit of Rs.12217536/-, from December, 2014 till its actual realization; (ii) pay Rs.45000/- per month from the date of booking till the date of delivery of possession towards rent paid by them; (iv) pay Rs.100000/-, as compensation for mental agony and harassment; (vi) pay Rs.100000/- as litigation costs; and (vii) any other relief which is deemed fit and proper in the facts and circumstance of the case. The complainants stated that Sai Siddhi Developers (opposite party-1) (the developer) was a partnership firm, registered under Partnership Act, 1932 (now the partners incorporated SSD Escatics Pvt. Ltd. under Companies Act, 2013 and amalgamated the firm in it). The developer advertised for sale of flats in “Sai Goregaon Pearl Co-operative Housing Society Limited” at Siddharth Nagar, S.V. Road, Goregaon (W), Mumbai, in the year 2013. On 03.02.2014, the complainant booked a flat with the opposite parties bearing Flat No.902, 9th floor, B Wing Goregaon Pearl Co-operative Housing society Ltd., and made a part payment to the tune of Rs.500000/- drawn on HDFC Bank. The complainants made a part payment of Rs.150000/-. On 14.03.2014, the complainants made another payment to the tune of Rs.900000/-. On 15.03.2014, complainants made part payment of Rs.450000 drawn on Indian Bank. On 15.03.2014, the complainants made part payment of Rs.800000/- drawn on HDFC Bank , Rs.632500/- on 15.03.2014. The complainants entered into a home loan agreement with ICICI bank to the tune of Rs.9150000/- only out of which a sum of Rs.6290565/- was disbursed by the bank to the opposite parties. On 09.05.2014, complainants made part payment of Rs.1710000/- drawn on Indian Bank. On 09.05.2014, the complainants made part payment of Rs.166625/- drawn on Indian Bank. On 09.05.2014 the complainants made part payment of Rs.617846/- drawn on HDFC Bank. As per agreement, registered on 26.05.2014, possession was to be delivered by December, 2014 which opposite patties failed to do.
8. The complainants in CC/1103/2017 filed IA/19804/2018, for amending the complaint, which was allowed on 18.12.2017 and IA/11085/2019, for impleading Goregaon Pearl Co-operative Housing Society Limited (the society) as opposite party-2, which was allowed on 17.07.2019. In the amended complaint, the complainants stated that the society filed CC/337/2015, before this Commission, in which, an interim order, directing to maintain status quo and restraining the developer from creating third party right over the project property, was passed on 29.07.2015 and 18.12.2015. The society also moved an application under Section-9 of Arbitration and Conciliation Act, 1996 (registered as Arbitration Petition No.160 of 2017) before Bombay High Court, for an interim relief. The dispute was compromised between the society and the developer and a Consent Terms was executed between them on 16.05.2017. In view of Consent Terms, CC/337/2015 was dismissed as withdrawn on 19.07.2017 and Arbitration Petition No.160 of 2017 was dismissed as withdrawn on 07.07.2017. However, again the dispute arose between the society and the developer and the society terminated Development Agreement and Power of Attorney dated 26.09.2007, of the developer on 09.06.2018 and filed Arbitration Petition No.665 of 2018 under Section-9 of Arbitration and Conciliation Act, 1996 before Bombay High Court, in which, Mr. Amrut Joshi, Advocate was appointed as ‘Sole Arbitrator’ vide order dated 30.07.2018. ‘Sole Arbitrator’ passed an interim award dated 17.09.2018, directing the developer to handover possession of the property to the society and restrained the developer from interfering in appointment of new developer and creating any third party interest over the project property and also appointed a receiver to get the property vacated by the developer. The developer challenged the interim award dated 17.09.2018 in Commercial Arbitration Petition No.1072 of 2018, which was dismissed by Bombay High Court, vide order dated 14.12.2018. The developer challenged these orders in SLP (C) No.1365 of 2019, which was dismissed on 21.01.2019. Some of the home buyers filed SLP (C) No.D-2014 of 2019, challenging the interim award and order of High Court, which was dismissed on 25.01.2019, giving them liberty to submit their claim before the Arbitrator. The developer vacated the project premises on 27.01.2019. The home buyers moved an application before the Arbitrator, which was rejected on 27.02.2019. Some of the home buyers filed a complaint before Maharashtra Real Estate Regulatory Authority (MRERA), in which, MRERA has directed the developer to handover a list of third party purchasers. The society in the meantime passed a resolution dated 12.05.2019, for allotting the flats in B-Wing to its members and Flat No.902 was proposed to be allotted to Jalalbhai Memonji Parsia. As directed by MRERA, the society conducted meeting dated 23.06.2019, in which, it was resolved to settle the dispute amicably. The society again passed a resolution dated 08.07.2019, for allotting the flats in B-Wing to its members.
In CC/1103/2017, the complainants filed Rejoinder Reply, Affidavit of Evidence of Ram Pyare Yadav. Opposite party-1 filed Affidavit of Evidence and Affidavit of Admission/Denial of document of Deep Tana, in which, it has been stated that in view of Consent Term dated 07.07.2017, the developer has completed construction of B-Wing and finishing work was going on. The MHADA sanctioned additional FSI on 16.05.2017, on deposit Rs.14.27 crores by the developer and the developer was raising construction with full swing. Opposite party-2 filed Affidavit of Evidence of Maya Sejpal. The developer filed IA/8491/2019 for additional evidence. All the parties have filed their written submissions.
9. Sai Siddhi Developers/SSD Escatics Pvt. Ltd. (the developer) filed its written replies in the above complaints, in which, allotment of the flats, execution of agreement for sale in favour of the complainants and deposits made by them, have not been disputed. The developer stated that clause-10 of the agreement was subject to force majeure. There were 60 flats in Building Nos.3, 4 and 5 of Goregaon Pearl Co-operative Housing Society Limited. Under Re-development Agreement dated 26.09.2007, the developer had to give 32 flats in A-Wing and 28 flats in B-Wing of new building to the owners of the flat. The flats other than above 60 flats in new building were in the share of the developer. On the basis of Re-development Agreement and Power of Attorney dated 26.09.2007, the developer entered into Agreement for Sale with the home buyers in respect of the flats falling in its share. Development Control Regulation of Greater Mumbai, 1991 was amended in the year 2008, by which, permissible FSI was increased from 2.4 to 2.5. The developer deposited Rs.82103435/- and applied for additional FSI with the consent of the society, which was approved by the MHADA vide revised offer letter dated 25.08.2011. The developer submitted a revised building plan for approval, which was approved on 14.06.2012 and 21.11.2013. Due to introduction of Fungible FSI Rules, in 2013, it transpired that FSI of 2.5 was not sufficient to complete entire development. By that time, the developer completed construction of upper 7 floors in A-Wing (12 flats) and 21 upper floors in B-Wing (58 flats) (total 70 flats) with balcony, common area, refuge area and commercial development. Additional FSI was needed to finish construction of A-Wing and complete the project. The developer had land, adjoining to the project land and proposed to amalgamate it with the project land, in order to get additional FSI but the proposal was not accepted by the society. Due to which, the construction was halted on the spot. Development Control Regulation was again amended, under which, 3.5 FSI could be availed on deposit of Rs.10/- crores but this amendment was withdrawn. The society was not cooperating and insisting to accommodate all the 60 flat owners in B-Wing although the developer has already entered into agreement for sale with prospective buyers in respect of flats other than 28 flats, reserved for flat owners. The society filed CC/337/2015 before this Commission, in which, interim order dated 29.07.2015, directing to maintain status quo, was passed. The society, vide letter dated 16.08.2016, revoked Power of Attorney dated 26.09.2007. The society moved an application under Section-9 of Arbitration and Conciliation Act, 1996 (registered as Arbitration Petition No.160 of 2017) before Bombay High Court, for an interim relief. The dispute was compromised between the society and the developer and a Consent Terms was executed between them on 16.05.2017. In view of Consent Terms, CC/337/2015 was dismissed as withdrawn on 19.07.2017 and Arbitration Petition No.160 of 2017 was dismissed as withdrawn on 07.07.2017. However, again the dispute arose between the society and the developer and the society terminated Development Agreement and Power of Attorney dated 26.09.2007, of the developer on 09.06.2018 and filed Arbitration Petition No.665 of 2018 under Section-9 of Arbitration and Conciliation Act, 1996 before Bombay High Court, in which, Mr. Amrut Joshi, Advocate was appointed as ‘Sole Arbitrator’ vide order dated 30.07.2018. ‘Sole Arbitrator’ passed an interim award dated 17.09.2018, directing the developer to handover possession of the property to the society and restrained the developer from interfering in appointment of new developer and creating any third party interest over the project property and also appointed a receiver to get the property vacated by the developer. The developer challenged the interim award dated 17.09.2018 in Commercial Arbitration Petition No.1072 of 2018, which was dismissed by Bombay High Court, vide order dated 14.12.2018. The developer challenged these orders in SLP (C) No.1365 of 2019, which was dismissed on 21.01.2019. The developer vacated the project premises on 27.01.2019. Due to hindrance created by the society, the construction could not be completed. The developer is now waiting for the award of the ‘Sole Arbitrator’ and is entitled for extension of period, for which possession was delayed due to force majeure reasons.
10. Goregaon Pearl Co-operative Housing Society (the society) filed its written replies in the above complaints. The society stated that there was no privity of contract between the complainants and the society. The society has neither signed agreement for sale nor received any amount from the complainants and has been wrongly impleaded as opposite party-2 in the complaints. Under Development Agreement dated 26.09.2007, the developer agreed (i) to complete construction within 22 months from the date of issue of CC and in case of delay to pay Rs.100000/- per month as penalty. (ii) pay Rs.20000/- per month as rent to each flat owners for 25 months and thereafter increase the rent to the extent of 10%. (iii) pay brokerage of one month rent after every 11 months to each flat owners. (iv) to construct two building with 16 upper floor as per 2.4 FSI. Under clause-22, the developer is entitled for extension of 3 months period for completing the construction and on expiry of 3 months extended period, the society has right to terminate the agreement and appoint new developer and right of the developer to the flats falling in its share is liable to be forfeited. Clause 9 (k) of development agreement provides that the society has no liability towards prospective buyers of the flat falling in the share of the developer. The flat owners vacated their flat in the old buildings and the society gave vacant possession of the three building to the developer in September, 2007. Commencement Certificate was issued on 17.06.2008. Due date of possession expired in September, 2010. However, the developer did not pay the penalty. The society decided to en-cash the Bank Guarantee of Rs.50000000/- and wrote a letter dated 26.08.2015 to Union Bank of India. The developer filed Suit No. (L) 921 of 2015, for restraining the society and the bank to en-cash the bank guarantee but could not obtain any interim order and the bank guarantee was en-cashed in September, 2015. The developer applied for additional FSI, which was approved by MHADA vide revised offer letter dated 25.08.2011 and submitted a revised building plan for approval, which was approved on 14.06.2012 and 21.11.2013, in contravention of Development Agreement and without any information to the society. The developer was again processing to procure 3.5 FSI by misusing Power of Attorney hence Power of Attorney was revoked on 16.08.2016. For invoking the arbitration clause under Development Agreement, the society filed Arbitration Petition (L) No.1196 of 2016. Bombay High Court, vide order dated 27.10.2016, directed the developer to disclose about the approvals for development of the project and vide order dated 07.12.2016 and summoned Executive Engineer, Building and Proposal Department, to inform about the ‘commencement certificate’. The developer approached the society and proposed to amicably settle the matter. Then Consent Terms was executed and signed by the parties on 16.05.2017. In view of settlement, arbitration petition was withdrawn on 07.07.2017. But the developer did not fulfil the obligations under Consent Terms. The society, therefore, terminated Development Agreement and Power of Attorney on 03.06.2018 and gave termination notice dated 09.06.2018 to the developer. In spite of termination of development agreement, the developer did not handover possession of the project to the society, therefore Arbitration Petition (L) No.665 of 2018 was filed, in which, High Court appointed an Arbitrator vide order dated 30.07.2018. The Arbitrator, after hearing both the parties passed interim award dated 17.09.2018. The developer challenged the interim award dated 17.09.2018 in Commercial Arbitration Petition No.1072 of 2018, which was dismissed by Bombay High Court, vide order dated 14.12.2018. The developer challenged these orders in SLP (C) No.1365 of 2019, which was dismissed on 21.01.2019. The developer then vacated the project premises on 27.01.2019. In pursuance of the order of Supreme Court in SLP (C) No.2462 of 2019, dated 25.01.2019, 14 flat buyers, including the complainants approached the Arbitrator, who rejected their application, vide order dated 27.02.2019. Dr. Seema Paryekar (one of the flat buyer from the developer) filed Civil Suit No.901 of 2019, before City Civil Court and obtained an interim injunction dated 22.04.2019, against the society. The society challenged above order in Appeal Form Order (Stamp) No.22143 of 2019, which was allowed vide order dated 14.10.2019. The society, vide its resolution dated 12.05.2019, allotted the flats to its members in B-Wing building. The developer has committed breach of contract in not completing the project within agreed period due to which, 60 flat owners had suffered a lot of difficulties for a period of 12 years. In view of Clause 9 (k) of development agreement, the developer and its assignee/flat buyers have no lien over the building and the society is absolute owner of it. The flat buyers had notice of Development Agreement as well as allocation of the flats to 60 flat owners at the time of agreement for sale in their favour. They cannot be treated as bonafide purchasers without notice. The society is not a promoter under Real Estate (Regulation and Development) Act, 2016. As per sanctioned plans dated 14.05.2012 and 21.11.2013, 60 flat owners had to be accommodated in B-Wing and agreement for sale are void.
11. We have considered the arguments of the counsel for the parties and examined the record. The developer did not deny execution of agreement for sale of the flats in favour of the complainants and receiving money from them. Clause-10 of the agreement provides for handing over possession on or before December, 2014. But the developer failed to handover for possession on due date. The developer has taken plea of force majeure and claimed for extension of period under clause-10 (iii) of the agreement for sale. The developer took plea that after approval of building plan on 14.06.2012 and 21.11.2013, Fungible FSI Rules, was amended, in 2013, under which, FSI of 2.5 was not sufficient to complete entire development. By that time, the developer completed construction of 7 upper floors in A-Wing (12 flats) and 21 upper floors in B-Wing (58 flats) (total 70 flats) with balcony, common area, refuge area and commercial development. Additional FSI was needed to finish construction of A-Wing and complete the project. The developer had land, adjoining to the project land and proposed to amalgamate it with the project land, in order to get additional FSI but the proposal was not accepted by the society. Due to which, the construction was halted on the spot. But this amendment was there at the time of execution of agreement for sale dated 19.03.2014 and cannot be treated as force majeure.
12. The developer further took plea that the society filed CC/337/2015 before this Commission, in which, interim order dated 29.07.2015, directing to maintain status quo, was passed. The society, vide letter dated 16.08.2016, revoked Power of Attorney dated 26.09.2007 and moved an application under Section-9 of Arbitration and Conciliation Act, 1996 (registered as Arbitration Petition No.160 of 2017) before Bombay High Court, for an interim relief. The dispute was compromised between the society and the developer and a Consent Terms was executed between them on 16.05.2017. In view of Consent Terms, CC/337/2015 was dismissed as withdrawn on 19.07.2017 and Arbitration Petition No.160 of 2017 was dismissed as withdrawn on 07.07.2017. During this period, the construction was stopped. The developer applied for additional FSI, which was sanctioned by MHADA vide letter dated 16.05.2017, under which an amount of Rs.142827273/- had to be deposited. After deposit of this amount, the developer started construction and completed B-Wing till March, 2018 and started finishing work. However, the society again created dispute and terminated Development Agreement and Power of Attorney dated 26.09.2007, of the developer on 09.06.2018 and filed Arbitration Petition No.665 of 2018 under Section-9 of Arbitration and Conciliation Act, 1996 before Bombay High Court, in which, Mr. Amrut Joshi, Advocate was appointed as ‘Sole Arbitrator’ vide order dated 30.07.2018. ‘Sole Arbitrator’ passed an interim award dated 17.09.2018, directing the developer to handover possession of the property to the society and restrained the developer from interfering in appointment of new developer and creating any third party interest over the project property and also appointed a receiver to get the property vacated by the developer. The developer challenged the interim award dated 17.09.2018 in Commercial Arbitration Petition No.1072 of 2018, which was dismissed by Bombay High Court, vide order dated 14.12.2018. The developer challenged these orders in SLP (C) No.1365 of 2019, which was dismissed on 21.01.2019. The developer vacated the project premises on 27.01.2019. Due to hindrance created by the society, the construction could not be completed. The period from 29.07.2015 to 19.07.2017 and from 09.06.2018 can be considered as force majeure reasons.
13. The society has taken possession over entire building on 27.01.2019 and has allotted the flats of the buyers to its members. The society took plea that in view of clause 9 (k) of Re-development Agreement, the developer and its assignee/flat buyers have no lien over the building and the society is absolute owner of it. The flat buyers had notice of Re-development Agreement as well as allocation of the flats to 60 flat owners at the time of agreement for sale in their favour. They cannot be treated as bonafide purchasers without notice. The society is not a promoter under Real Estate (Regulation and Development) Act, 2016 or under MOFA. The complainants cannot claim any relief against the society as held by Bombay High Court in Suit No.262 of 2012 Vaidehi Akash Housing Pvt. Ltd. Vs. New D.N. Nagar Cooperative Housing Society (decided on 01.12.2014) and in Arbitration Petition (L) No.74 of 2020 Rajawadi Arunodaya CHSL Vs. Value Projects Pvt.Ltd. (decided on 15.03.2021).
14. The developer had to give 32 flats in A-Wing and 28 flats in B-Wing of new building to the owners of the flat under Re-development Agreement. Under clause-3 of Re-development Agreement, the developer was permitted to sell the flats falling in its share. In clause-2 of this agreement, it was agreed that if developer avails additional FSI and raises extra construction, then it would be shared in equal ratio by the society and the developer. In fact not only entire new building was being constructed from the sale proceeds of the flats falling in the share of the developer but also entire payment to the flat owners in old building was also being paid from it. This agreement was again acknowledged in clause-12 of Consent Terms dated 16.05.2017 by the society. On the basis of Re-development Agreement and Power of Attorney dated 26.09.2007, the society appointed the developer as its agent giving full authority to sell the flats falling in its share in new building. The transferees/complainants of the developer can enforce their agreement for sale under Section 226 of the Contract Act, 1872 against the society. Clause 9 (k) of Re-development Agreement contravenes the provision of Section 226 and is void under Section 24 of the Contract Act, 1872. After deriving the benefits under Re-development Agreement, the society cannot be permitted to usurp the flats falling in the share of the developer. Supreme Court in Dilawari Export Vs. Alitalia Cargo, (2010) 5 SCC 754 and Kasthuri Radhakrishnan Vs. M. Chinniyan, (2016) 3 SCC 296, held that the principal is liable for the act of the agent.
15. As the society has taken possession of the flats allotted to the complainants and has allotted it to its members, the society is liable to return entire money deposited by the complainants. So far as the dispute between the society and the developer is concerned, it is pending before the Arbitrator, which will be decided on its own merit. Right of the complainants is not affected by the arbitration proceedings as Arbitration and Conciliation Act, 1996 does not exclude jurisdiction of consumer forum as held by Supreme Court in Emaar MGF Land Limited Vs. Aftab Singh, (2019) I CPJ 5 (SC). Supreme Court in Banglore Development Authority Vs. Syndicate Bank, (2007) 6 SCC 442, Fortune Infrastructure Vs. Trevor D’Lima, (2018) 5 SCC 442 and Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra, 2019 SCC OnLine SC 438, held that a home buyer cannot be made to wait for possession of the flat for indefinite period.
ORDER
In the result, the complaints are partly allowed. Goregaon Pearl Co-operative Housing Society (opposite party-2) is directed to refund entire amount deposited by the complainants with interest @9% per annum from the date of respective deposit till the date of payment, within a period of two months from the date of this judgment.
