Bombay High Court

DR. OMPRAKASH BANKATLAL SONIMINDE AND ANRversusLE CHATEAU CO-OP HSG. SOC. LTD. AND ORS

Decided: 24 September 2026
Disposal: Disposed Off

Holding

The Court set aside the earlier Co‑operative Court orders and held that the petitioners are entitled to the allotment of flat Nos.801 and 802, cancelling the prior allotments to the contractor’s directors, subject to payment of Rs.2.5 crore to them.

Summary

The petitioners, members of Le Chateau Co‑operative Housing Society, challenged the society’s resolution that allotted flat Nos.701 and 702 to directors of the contractor Jet Speed Developers and later also allotted flat Nos.801 and 802 to the same directors, alleging the resolutions were passed without proper notice, agenda, quorum and contrary to the 1996 agreement that additional flats be allotted only to members. The High Court examined the validity of the 1998 AGM resolution, the entitlement to the additional flats, and the effect of earlier orders of the Co‑operative Court and Co‑operative Appellate Court. It held that the earlier judgments were erroneous, set them aside, and declared that the petitioners are entitled to the allotment of flat Nos.801 and 802, cancelling the earlier allotments to the directors, subject to the petitioners paying Rs.2.5 crore to the directors as consideration. The society was directed to register the petitioners as members for those flats and to hand over possession upon payment.

Issues considered

The legality of the AGM resolution dated 24 July 1998 that allotted flat Nos.701 and 702 to the contractor’s directors.
The entitlement of the petitioners to be allotted flat Nos.801 and 802 in place of the allegedly illegal allotments.
Whether the orders of the Co‑operative Court (30 Jan 2017) and the Co‑operative Appellate Court (11 Jan 2018, 13 July 2018) should be set aside.
The power of the society to cancel the allotments and enter the petitioners in the membership register.
The requirement for the petitioners to pay Rs.2.5 crore to the directors as consideration for the flats.

Legislation cited

Maharashtra Co-operative Societies Act, 1960 — s. 73(1)

Subjects

co-operative housing society
allotment of flats
illegal resolution
unjust enrichment
TDR
construction agreement
membership rights
court set‑aside

Judgment

Neeta Sawant WP 751 of 2019

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION

WRIT PETITION NO.751 OF 2019

1. Dr. Omprakash B. Soniminde
2. Mrs. Chandrakala Omprakash Soniminde ....Petitioners

V/S

1. Le Chateau Co-operative Housing Society Limited
through the Board of Administrators
consisting of the following members:
1(a) Mr. Shivam Mahade,
Certified Auditor and Member President
Board of authorized officer,
1(b) Mr. Kumaraswami K.S. and
1(c) Smt. Sherita J. D’souza
2(a) Mr. Kanyalal Chetandas Mankani,

2(b) Mr. Ramesh Chetandas Mankani,

3. Mr. Kanyalal Chetandas Mankani,

4. Mr. Ramesh Chetandas Mankani,

5. Mrs. Renu Ramesh Mankani,
6. Jet Speed Developers Pvt. Ltd. ....Respondents

WITH
INTERIM APPLICATION NO.15802 OF 2024
IN
WRIT PETITION NO.751 OF 2019

1. Dr. Omprakash B. Soniminde
2. Mrs. Chandrakala Omprakash Soniminde ....Applicants
IN THE MATTER BETWEEN:
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Neeta Sawant WP 751 of 2019

1. Dr. Omprakash B. Soniminde
2. Mrs. Chandrakala Omprakash Soniminde ....Petitioners

V/S

1. Le Chateau Co-operative Housing Society Limited
through the Board of Administrators
consisting of the following members:
1(a) Mr. Shivam Mahade,
Certified Auditor and Member President
Board of authorized officers,
1(b) Mr. Kumaraswami K.S. and
1(c) Smt. Sherita J. D’souza
2(a) Mr. Kanyalal Chetandas Mankani,

2(b) Mr. Ramesh Chetandas Mankani,

3. Mr. Kanyalal Chetandas Mankani,

4. Mr. Ramesh Chetandas Mankani,

5. Mrs. Renu Ramesh Mankani,
6. Jet Speed Developers Pvt. Ltd. ....Respondents
_________

Dr. Veerendra Tulzapurkar, Senior Advocate with Mr. Mandar Soman,
Ms. Aditi Bhat, Mr. Munaf Virjee and Mr. Rushabh Parekh i/b AMR Law
for the Petitioners.

Mr. Vishal Kanade with Mr. Bharat Manghani, Ms. Drushti Gala and Ms.
Durren Kaskar for Respondent Nos.2(b) and 4 to 6.
__________

CORAM : SANDEEP V. MARNE, J.
RESERVED ON: 31 AUGUST 2026
PRONOUNCED ON: 24 SEPTEMBER 2026.

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JUDGMENT:

1) The case involves a bizarre situation where the chairman of
the housing society, which has constructed additional flats in the building
for allotment to members, is left with no flat, whereas the contractor
engaged to carry out the construction work has received a windfall gain in
the form of allotment of four flats. Status as a close relative of a family
holding 50% flats in the building has helped the contractor to receive from
the society not just the cost incurred for construction and TDR, but also
four large sized flats in the building. Thus, what was the legitimate right of
a member is handed over to the contractor. Petitioners are those members
who are deprived of their legitimate right to receive additional flats in the
society’s building, which are handed over free of cost by the society to
directors (Respondent Nos. 4 and 5) of the contractor (Respondent No.6)
under the pretext of society’s inability to pay its bills.

2) Petitioners have filed the present Petition challenging the
judgment and order dated 11 January 2018 passed by Cooperative
Appellate Court dismissing Appeal No.18 of 2017 filed by them and
confirming the judgment and award dated 30 January 2017 made by the
learned Judge, Cooperative Court No.1, Mumbai in Dispute No.
CC/I/179/2014 (old Dispute No.CC/II/26/1999). The Dispute was filed by
the Petitioners aggrieved by cancellation of allotment of Flat Nos.701 and
702 by Respondent No.1-Society. Petitioners had also applied for review of
the order of the Appellate Court, which is dismissed by the order dated 13
July 2018, which is also subject matter of challenge in the present Petition.

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3) Brief facts of the case are that the property bearing Plot No.
14, TPS No. IV, Santacruz, admeasuring 1164 square meters, along with
bungalow and one tenanted building known as “Shamrock”, was developed
by a developer by construction of Building known as “Le Chateau”
comprising of stilt plus six upper floors and 12 flats. The flats in the
building “Le Chateau” were sold by the developer to various flat
purchasers. Petitioners are husband and wife and purchased flat Nos. 601
and 602 from the developer. The flat purchasers of the new building
formed “Le Chateau Co-operative Housing Society Limited” (Respondent
No.1). It appears that out of the 12 flats, about six flats were owned by
Mankani family and their relatives. The entire land was conveyed by the
developer in favor of Respondent No.1 - Society, which became owner of
the land and the building “Le Chateau” together with tenanted structure
named “Shamrock”.

4) In the year 1994, the Society decided to purchase TDR/FSI and
construct additional floors on the buildings Shamrock and Le Chateau and
the additional flats were to be offered only to the existing members by
charging them the cost of construction and cost of purchase of TDR/FSI. A
decision to that effect was taken at the Extraordinary General Body
Meeting (EGM) held on 24 April 1996. Respondent No. 6 was appointed as
a contractor to carry out the work of additional construction. Petitioners
were allotted flat Nos.701 and 702 in the additional construction. The
other members were allotted additional flats to be constructed on
Shamrock building. It is Petitioners’ case that they made payment of

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Rs.5,00,000/- for purchase of the said two flats. In the year 1997, new
Managing Committee took over. It appears that the Society called upon
Petitioners to make payments of Rs.35,00,000/- by letter dated 26 August
1997. Petitioners demanded various particulars of purchase of TDR etc. as
well as demanded schedule of payment. By letter dated 21 October 1997,
the Society communicated schedule of payment and demanded amount of
Rs. 43,00,000/- from the Petitioners. By another letter dated 18 November
1997, amount of Rs.43,09,000/- was demanded by the Society for flat
Nos.701 and 702.

5) Society convened Annual General Meeting (AGM) on 19 July
1998, in which the agenda was for taking decision for allotment of flat
Nos.701 and 702 to the interested members. According to Petitioners, they
did not receive notice dated 4 July 1998. The date of the meeting was
altered to 24 July 1998, in respect of which also Petitioners apparently did
not receive any notice. In the AGM held on 24 July 1998, a resolution was
adopted for allotment of flat Nos.701 and 702 to Respondent Nos.4 and 5,
who were directors of Respondent No.6 (Contractor). Thereafter,
proceedings were initiated for expelling Petitioners from the Society, but
the proposal was rejected by the Registrar by order dated 24 January 2000.
The Appeal was also dismissed on 3 May 2001.

6) Petitioners filed Dispute No.CC/II/26 of 1999 before Co-
operative Court, Mumbai, challenging the Resolution dated 24 July 1998 as
well as seeking a declaration that the action of the Society in obstructing
Petitioner No.1 from acting as Chairman was illegal and improper.

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Petitioners also sought injunction against the Opponents from dealing
with or disposing of flat Nos.701 and 702. Petitioners also sought
possession of flat Nos.701 and 702. It is the case of the Petitioners that on
6 November 2002, Petitioners applied for deposit of amount of
Rs.62,00,000/- along with interest, which application remained to be
decided by the Co-operative Court. In the meantime, Petitioners filed a
suit challenging 8th floor construction on Shamrock building. Initially,
injunction was granted in favor of the Petitioners, which was ultimately
modified by permitting construction on 8th floor of the building Shamrock,
with restriction on its occupation. However, on 6 June 2006, the suit was
disposed of, allowing the Society to continue construction. Petitioners
amended the Dispute by incorporating a prayer for allotment of flats on 8 th
floor of Shamrock’s building at the costs of TDR and costs of construction.

7) By judgment and order dated 30 January 2017, the Co-
operative Court proceeded to dismiss the Dispute. Petitioners preferred
Appeal No.18 of 2017 before Co-operative Appellate Court challenging
Trial Court’s order dated 30 January 2017. However, the Co-operative
Appellate Court dismissed the Appeal by judgment and order dated 11
January 2018. Petitioners applied for review before the Co-operative
Appellate Court, which was also rejected by order dated 13 July 2018.
Petitioners have accordingly filed the present Petition challenging the
orders of the Co-operative Court and the Appellate Court.

8) Dr. Tulzapurkar, the learned Senior Advocate appearing for
Petitioners submits that the Cooperative Court and the Appellate Court

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have grossly erred in dismissing the Dispute and the Appeal preferred by
the Petitioners. He submits that the Cooperative Court did not decide the
main prayer of the Petitioners challenging Resolution dated 24 July 1998.
He submits that the Resolution dated 24 July 1998 is illegal, shown to have
been adopted by conducting a meeting behind the back of the Petitioners.
That the agenda of the meeting did not include subject of cancellation of
allotment of Flat Nos.701 and 702 to the Petitioners. That, Petitioners
were not served with notice of the meeting or notice of modified date of
meeting. That in absence of any agenda for cancellation of allotment of
Flat Nos.701 and 702 and without taking any decision to cancel the
allotment, the Society illegally allotted flat Nos.701 and 702 to the
directors of the contractor who are relatives of Mankani family. That
Mankani family, who holds 50% flats in the building Le Chateau, ganged
up with a view to rob the Petitioners of their due entitlement in respect of
flat Nos. 701 and 702. He submits that meeting dated 24 July 1998 did not
have the requisite quorum. That therefore holding of the meeting as well
as adoption of resolution therein for allotment of flat Nos.701 and 702 is
ex facie illegal. That the Co-operative Court has totally ignored this aspect
and has failed to adjudicate the prayer of the Petitioners for declaring
Resolution dated 24 July 1998 as illegal.

9) Dr. Tulzapurkar further submits that in the EGM held on 24
April 1996, a decision was taken to allot additional flats only to the
members. That Respondent Nos.4 to 5, to whom allotment was made, were
admittedly not members of the Society. That the case involves taking away

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allotment from members and granting it to outsiders behind the back of
the Petitioners.

10) Dr. Tulzapurkar further submits that the Co-operative Court
and the Appellate Court have erroneously held that Petitioners did not
contribute for construction of Flat Nos.701 and 702. That Petitioners
initially paid an amount of Rs.5,00,000/-. That he never expressed any
reluctance for payment of contribution. That he merely inquired about the
details of purchase of TDR and demanded payment schedule. He submits
that Petitioners offered to deposit amount of Rs.62,00,000/- along with
interest on 6 November 2002. That the construction itself started in the
year 2001. That therefore alleged non-payment of monies by the
Petitioners could not have been a reason for cancellation of allotment in
the AGM held on 24 July 1998.

11) Dr. Tulzapurkar further submits that securing allotment of flat
Nos. 701 and 702 by Respondent No. 6 is unjust. That by March 1998,
Respondent No. 6 was paid Rs. 2,69,18,660/- though he had purchased
TDR of only 450 sq.m. by that time. By July 1998, Society created dues of
Rs. 77,40,729/- against the Petitioner qua flat No. 701 and 702. Respondent
No. 6 was to construct only 1298 sq.ft. area for flat No.701 and 702, though
he demanded amount equivalent to area of 1935 sq.ft. That therefore there
was no need or occasion for cancelling Petitioners’ allotment and
transferring the same to Respondent No. 6. That even if maximum
expenses allegedly spend by Respondent No. 6 are taken into
consideration, the same would not exceed Rs. 2.47 Crores, against which
he received amount of 3.29 crores by March 1999. That therefore
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Respondent No. 6 was overpaid and in addition, he received allotment of
flat Nos. 701 and 702.

12) Dr. Tulzapurkar further submits that even if for some reasons
flat Nos. 701 and 702 could not be allotted to Petitioners, at least flat Nos.
801 and 802 ought to have been allotted to them. However, the society,
controlled by Mankanis, illegally allotted even flat Nos. 801, 802 to the
directors of Respondent No.6. He submits that as of today, Respondent No.
6 purchased TDR of 870 sq.m. for five floors over Shamrock, 130 sq.m. for
flat Nos. 701 and 702 and 130 sq.m. for flats on 8th floor of Shamrock. That
if TDR in respect of flats 701, 702, 801 and 802 is deducted, what is
consumed by Respondent No. 6 for benefit of society members is TDR of
only 870 sq.m., for which it already received amount of Rs. 4,61,68,500/-
which comes to Rs. 4930 per sq.ft. as against original agreement of Rs.
4,000 per sq.m. Thus, Respondent No. 6 is already paid Rs. 87,09,780/- in
excess and in addition, he has secured allotment of four flats in the
buildings of the society. That Respondent No. 6 has clearly and unjustly
enriched himself. That therefore at least flat Nos. 801 and 802,
construction of which is incomplete and which are unoccupied, must be
allotted to the Petitioners. He submits that Petitioners are willing to pay
the amount of Rs. 62 lakhs agreed as on 6 November 2002 with a
reasonable interest thereon for securing allotment of flat Nos. 801 and
802.

13) Dr. Tulzapurkar accordingly prays for setting aside the orders
passed by the Co-operative Court and Co-operative Appellate Court and
for making the Dispute absolute in terms of the prayers made therein.
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14) Mr. Kanade, the learned Counsel appearing for Respondent
Nos.2(b) and 4 to 6, opposes the Petition submitting that concurrent
findings are recorded against the Petitioner in three orders passed by the
Co-operative Court and the Co-operative Appellate Court. He submits that
the decision to cancel the allotment of Flat Nos.701 and 702 was on
account of flat refusal by the Petitioners to pay the contribution. He
submits that in the EGM held on 24 April 1996, a specific decision was
taken that allotment was subject to prompt payments. He submits that
Society issued several demands to the Petitioners for making the payments
for construction of the flats. That Petitioners failed to make any payment
and therefore the other members were left with no other option but to let
the directors of the Contractor accept allotment of flat Nos.701 and 702
with a view to ensure that the construction is carried out in an expeditious
manner. He submits that both the Courts have conducted factual inquiry
into claim raised by the Petitioners about payment of amount of
Rs.5,00,000/- and that it is ultimately found that the same was not paid by
the Petitioners. He submits that Petitioners were fully aware of the fact
that the Society was proceeding ahead with proposal for cancellation of
allotment. He submits that there was substantial correspondence between
the parties before passing of Resolution dated 24 July 1998. He therefore
submits that no prejudice is faced by the Petitioners on account of alleged
non-service of notice or non-inclusion of agenda in the notice in respect
of meeting held on 24 July 1998. That since Petitioners have decided not to
pay the amount required for construction of flats, they cannot now turn
around and press for allotment. That the Society was left with no

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alternative but to allot the flats to a person who was ready and willing to
contribute the cost of purchase of TDR and additional construction.

15) Mr. Kanade further submits that though specific issue relating
to Resolution dated 24 July 1998 is not formulated, the Co-operative Court
has answered the issue in the judgment by holding that challenge to the
resolution is merely auxiliary to the main relief of allotment of flats.

16) Mr. Kanade further submits that since resolution dated 24
April 1996 was not challenged, the Petitioner was bound to make
payments in pursuant thereof. That Petitioner No. 1 had issued letter
dated 7 June 1996 to Ms. Maria Srinivas calling upon her to make payment
of Rs. 35 lakh by 15 June 1996 but he himself never made payment in
respect of flat Nos. 701 and 702. That therefore, the society was justified in
cancelling allotment of flat Nos. 701 and 702. That the theory of cash
payment of Rs. 5 lakh to the society is utterly false and has been rightly
rejected concurrently by both the Courts.

17) Mr. Kanade further submits that so far as flat Nos. 801 and 802
are concerned, the Co-operative Court rightly held that the issue was
subject matter of another Dispute No. CC/I/210/2014. That this finding was
not impugned by the Petitioners in their appeal which focused only on flat
Nos. 701 and 702. Having not challenged non-allotment of flat Nos. 801
and 802 before the Appellate Court, Petitioners are precluded from
challenging the same in the present Petition. That in any case, Appellate
Court rightly held that dispute relating to flat Nos. 801 and 802 would be
decided in Dispute No. CC/I/210/2014.
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18) Mr. Kanade further submits that flat Nos. 801 and 802 are
correctly allotted to Respondent Nos. 4 and 5 by valid resolution dated 21
August 2000. The challenge to the said resolution by Petitioners has failed
on account of dismissal of Dispute No. CC/I/210/2014. That there was
escalation in cost from Rs. 4000 to Rs. 4800 per sq.ft. That the society
members also acknowledged the position that the built-up area of each
flat was 2253 per sq.ft. However, the escalation was still restricted to Rs.
4100 per sq.ft. considering the financial position of the society. That
Petitioner remained present at AGM of 2001, in which minutes of meeting
dated 21 August 2000 were confirmed. Therefore, Petitioner cannot
question allotment of flat No. 801 and 802.

19) Mr. Kanade further submits that valuable rights have accrued
in respect of Respondent Nos. 4 and 5 qua flat Nos. 801 and 802. That
Respondent Nos. 4 to 6 are kept in process of litigation continuously for 27
years. That Respondent No. 6 has already suffered substantial loss in the
transaction of construction of additional flats for the society and even
after allotment of flat Nos. 701, 702, 801 and 802, there are still dues
payable from the society. That since dispute questioning allotment of flat
Nos. 801 and 802 is dismissed by Co-operative Court, the said issue cannot
be permitted to be reagitated in the present Petition. He submits that
Petitioners never deposited the alleged amount of Rs. 62 lakh in the Co-
operative Court. That even if the said amount of Rs. 62 lakh with interest is
paid by the Petitioners, the same would not satisfy the market value of the
flat Nos. 801 and 802 comprising of area of 1400 Sq. Ft + 450 sq.ft. terrace
(totally admeasuring 1625 sq.ft. by considering 50% of terrace). By even going
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by most moderate rate of Rs. 45000 per Sq. Ft. (considering pending work in
the flats), the same are worth 7.31 crores. Mr. Kanade accordingly prays for
dismissal of the Petition.

20) Rival contentions urged on behalf of the parties now fall for
my consideration.

21) Petitioners are aggrieved by the society’s decision in allotting
flat Nos.701 and 702 in favour of Respondent Nos.4 and 5. Admittedly,
Respondent Nos.4 and 5 are not the original members of the society. They
are directors of Jet Speed Developers Pvt. Ltd. (Respondent No.6), who was
appointed by the Society for undertaking the work of construction of
additional flats. The Society had resolved to construct 6 additional flats in
the building Shamrock and one additional floor on the building Le
Chateau in the EGM held on 24 April 1996. The Society further resolved to
allot the additional flats only to the existing members (except to Mrs. Kedia
who had no interest in allotment of the additional flats). Accordingly, it was
decided that Flat Nos.701 and 702 on the 7th floor of the building Le
Chateau shall be allotted to the Petitioners and the 10 flats from 3rd to 7th
floors of the building Shamrock shall be allotted to the other members.
Since Mrs. Kedia was not interested in the additional flats, the society
decided to allot the same to another member (Maria Srinivas). The
Resolution adopted in the EGM held on 24 April 1996 reads thus:

“Resolved that the society do implement the scheme of development
through the M/s. Jeet Speed Developers Private Limited, (5 th floor over the
‘SHAMROCK’ and 1 floor over Le-Chateau), construct the six additional floors
over the building ‘SHAMROCK’ in exercise of the rights and powers reserved to
the society under the Indenture of Lease dated in favour of the said lessee in
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respect of the said building by acquiring and utilizing 10000 square feet T.D.R.,
F.S.l. through the agreed good offices of the said contractors who is being
authorised to finalise the monetary terms with the sellers of T.D.R., F.S.I. and
lines discussed with the contractor.”

“Resolved further that the 12 flats which will be available upon
construction of the additional six floors shall be and hereby allotted to the
members except Mrs. Kedia subject to prompt and regular said payments to the
contractor through the society towards T.D.R., F.S.I. acquisition costs payable
15th July 1996 or extended period and construction / developers as per progress
of construction work as follows:

NAME OF THE MEMBER FLAT NO. NEW FLOOR
th
1) Shri. O. B. Soniminde 701 7 floor over the society.
2) Smt. Chandrakala Soniminde 702 “ “
3) Smt. Maria Srinivas 504 5th floor over Shamrock
4) Smt. Maria Srinivas 503 “ “
th
5) Shri C. H. Mankani 604 5 floor over Shamrock
6) Smt. T. C. Mankani 603 “ “
th
7) Shri K. C. Mankani 704 5 floor over Shamrock
8) Shri M. C. Mankani 703 “ “
th
9) Smt. S. V. Harjani 403 5 floor over Shamrock
10) Shri. J. V. Harjani 404 “ “
11) Smt. Maria Srinivas 303 5th floor over Shamrock
12) Smt. Maria Srinivas 304 “ “

22) The contract for construction of additional floors on Le
Chateau and Shamrock buildings was awarded to Respondent No.6-Jet
Speed Developers Pvt. Ltd.

23) It appears that majority of the flats in the building Le Chateau
were owned by Mankani family and their relatives. Out of the 12 flats in
the building, 4 flats were held by Mankani Family and 2 flats were held by
Harjanis who were NRIs and relatives of Mankani. Thus, 6 out of the 12
flats were held by Mankanis and their relatives. Even the directors of
Respondent No.6, who was engaged as the contractor to construct
additional floors of the buildings-Le Chateau and Shamrock, are close

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relatives of Mankanis. Thus, Respondent No.4 and 5 who are apparently
husband and wife (and who themselves are Mankanis) were closely related
with the Mankani Family. The case thus involves Mankani Family
controlling the affairs of the building and who brought in their own
relatives to construct additional floors on the two buildings. However,
though Respondent Nos.4 and 5 were close relatives of Mankanis, their
role was restricted only to construction of additional flats upon receipt of
cost of construction and TDR. They were not to be allotted any flats in
either of the buildings and the arrangement with them envisaged
utilization of mere professional services for construction of additional
flats upon payment of cost of construction and TDR.

24) Accordingly, Agreement dated 20 June 1996 was executed
between the society and Respondent No.6 under which Respondent No.6
agreed to procure TDR from the market for construction of additional flats
and to construct the same. The society agreed to pay Respondent No.6
Rs.4,000/- per sq.ft. in respect of the cost of construction and TDR. The
relevant clause in the agreement reads thus:

In consideration of the builder undertaking obligations under these presents
including the obligation to acquire T.D.R., F.S.I. and to construct the five floors
over Shamrock, and one floor over “Le Chateau” the Society shall pay the
builders construction costs at the rate of Rs.4000/- (Rupees Four Thousand Only)
per Square foot as per progress of construction work and/or as may be mutually
agreed to between the Society and Builder keeping in mind the period within
which the builder has agreed to complete the work of construction of the six
floors and obtain Occupation Certificate. It is specifically agreed that the
construction costs payable as aforesaid are inclusive of acquisition costs of the
T.D.R., F.S.I. and also inclusive of the services to be rendered by the contractors
in connection with the procurement of T.D.R., F.S.I. and the payments to be
made who Architects/R.C.C. Consultants, Surveyors, Engineers and the
payments and deposits to be made to the Municipal Corporation of Greater

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Bombay or other Concerned Authorities in connection with the construction of
the six floors. It is however agreed and understood that the progress of the
construction work by the Builders shall entirely depend on regular and timely
payment of the construction costs at the aforesaid rate by the Society to the
Builders. To facilitate matters and to ensure prompt payment of the
construction costs, the Architects shall issue a Certificate of Construction work
on or before the first of each month for the value of the construction work
carried out by the elder for the preceding month. The estimated value of the
construction work for each successing month has been agreed to be paid by the
society to the Builders seven days prior to commencement of such month.

25) Thus, the role of Respondent No.6 (and of Respondent Nos.4
and 5) was restricted only as a professional contractor having no interest
in the land and the building of whatsoever nature.

26) Though Petitioners were allotted flats-701 and 702, it appears
that they did not pay the agreed amounts to the society or to Respondent
No.6. Several correspondence took place between the parties post passing
of EGM resolution dated 24 April 1996 and post execution of the
agreement dated 20 June 1996. It must be noted at this juncture that
Petitioner No.1 functioned as the Chairman of the society at the relevant
time and was instrumental in initiating the process for construction of
additional flats. It appears that position of Petitioner No.1 as Chairman of
the society earned the best possible flats to the couple, who were allotted
both additional flats to be constructed on the 7th floor of Le Chateau
building. The other members were allotted flats in Shamrock building.

27) It appears that some difference arose between the Petitioners
and Mankanis, who were apparently controlling the affairs of the building
though Petitioner No. 1 was a formal chairman. The Secretary of the
society issued notice to the Petitioners on 26 August 1997 informing them

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that a sum of Rs.35,00,000/- was payable towards acquisition of TDR/FSI
on or before 15 June 1996 and that subsequent payments were due in
accordance with the progress of construction. It was intimated to the
Petitioners that except them, all other members had contributed the cost
in respect of the allotments made to them. The relevant part of letter
dated 26 August 1997 reads thus:
Subsequently, an Agreement with the Developers namely, JET Deed
Developers Pvt. Ltd. was entered into for the development of willing and follow-
up of matters connected with the development, as per the terms of allotment,
each floor members were to make initial payment of sum of Rs. 35 lakhs towards
TDR/FSI acquisition last on or before 15 th June 1996, and subsequent payments
towards Development, construction and incidental expenses in accordance with
the progress of the construction.

You are fully aware that the allotment of the proposed flats was subject
to members observing and performing the obligations to make the payments on
respective dates stipulated by society with the Developers. Except you, all allotte
members of the flats in the additional floors to be constructed have made initial
payment of about Rs. 35 lacs against allotment letters in accordance with.
…
In view of above progress, Developers are ready with slab work and have
requested for further payments. I requested allottee for further payments. They
enquired as to whether all allottee members have made initial payment. On their
specific quarry. I had no option but to inform them that despite my personal
reminders, you have failed and neglected to make initial TDR/FSI requisition
payments in accordance with the Schedule agreed between the society and
allottee members and have adopted obstructive attitude. They were shocked and
expressed that this was not expected Chairman of the Society who was not only
instrument in negotiations and finalizing the Development Agreement with the
said Developers but have executed the same pursuant to the General Body
Resolutions.

In order to implement scheme, you induced and impressed upon the
member like Srinivasan and Kedia to make initial payments. On their knowing
this fact that you as a Chairman have not made any payments, they requested for
an meeting and accordingly a meeting was organized on 9 th instant at Flat No.
501 at 10.30 a.m. Members like Shri Srinivasan, Shri Harjani and Kedia (Dube)
specially came from Dubai, Singapore, Indore respectively to attain the
meetings.

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After long discussions and during course of meeting you were kind
enough to agree and undertake that you shall make payment of outstanding
together with further due amounts within 10-12 days time.

It is indeed a matter of regret and concern that time taken by you is ober
and till date no payment has come from you. If this sort of your attitude
continues, the interest of the society and its members will be prejudiced and
society will become liable to the Developers for the damages and other
consequences.

If the circumstances, as a Secretary of the society and in the interest of
the society and also in your interest, I on behalf of the society call upon you to
make payments as paid by other allottee members with 24% interest from the
due date i.e. 15th June 1996 with week from receipt of this notice.

Please note that if you fail to comply with this notice, the society will be
constrained to legally and validly cancel proposed reserved allotment in your
favour without any further notice and society shall take appropriate action at
your risk and cost for the damages.

28) Petitioner No.1 responded to society’s letter on 6 September
1997 stating as under:

Further in order to reply you to your above letter, I hereby specifically ask you to
produce all books of accounts, minutes of the meetings, details of payments
made to the builders and copy of terms of contract with builders.

Further, you say that the allotment of proposed flat is made to me but you have
not indicated as the details of Construction Cost and in what manner it is to be
paid i.e. time frame or time schedule which must match with that of the society’s
schedule.

I agree that allotment was made but no flat number or area is mentioned to me.
Further you say that allotment of the proposed flat was subject to members
observing and performing the obligations to make payments on respective dates
stipulated by the society but as far as my knowledge as Chairman of the Society,
no such schedule was decided. If at all decided you are requested to immediate
send me the copies of minutes in which the schedule of such payment is decided.

Further I reserve my right to give detailed reply to your notice after having
inspection of books of accounts, minutes books and terms of contract with
builders.

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29) The society wrote back to Petitioner No.1 on 1 October 1997
stating as under:

It is however obvious to me that you have written this letter in total disregard of:
the discussions and decisions made at the General Body Meetings of the Society
as also its Managing Committee from time to time starting from December,
1994. You not only participated in all of its discussions, meetings and decisions
as a normal Co-operative Society Member but, in fact, and in law chaired each of
these meetings as a Chairman. So, apart from your actually being a party to all
deliberations on the Scheme of Development, and participating in the decision
making process as the Chairman, you and I as is evidenced by the Resolution
passed at the Extra Ordinary General Body Meeting of the Society held on the
24th April, 1996 were appointed to co-ordinate and look after the
implementation of the Scheme through M/s. Jet Speed Developers Private
Limited who were legally and validly appointed under an agreement drawn by
our solicitors and approved by the society and signed by you and me as
Chairman and Secretary of the society.
…
This is obviously without prejudice to the right of the Society as Developers to
call upon defaulter members to make payment of the unpaid amounts forthwith.
Inconclusion. I wish to warn you that the Developers will not part with
possession of the flat until they receive all the unpaid instalments, and the
balance of the consideration monies on a timely basis. Surely, you do not expect
the Scheme to be completed with the help of payments made by other members
while defaulters delay and default and raise unnecessary controversies.

30) Instead of making payments, Petitioners served advocate’s
notice dated 11 October 1997 to the society raising various issues about
management of affairs of the society. Thereafter, several correspondence
took place between the Petitioners and the society. By letter dated 18
November 1997, the society demanded amount of Rs.43,09,000/- and
threatened to cancel the allotment of flat Nos.701 and 702 by stating as
under:

With reference to para 6, I hope that your client will not act prejudicial to the
interest of the society and honour the commitment made by him under the
agreement and the subsequence meetings held by the society. It may be recalled
that in the General Body Meeting held on 19th Oct. 1997 your client had
expressed his willingness to make payments towards the development account

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and as such further time was given to make payment till 9th November 1997 as
per the payment schedule worked out and your client was to make a sum of
Rs.43,09,000/- and failing which his allotment of Flat No. 701 and 702 was liable
to be terminated. I therefore state that the Managing Committee has given
sufficient opportunity to your client to abide by the decision taken by the
committee during his Chairmanship and if his inclined to flout his own
commitment we are left with no other alternative but to call upon him to step
down from the present position before causing further harm and injury to the
interest of the society.

31) The Respondent No.6-developer also complained about non-
payment of contribution by the Petitioners and had apparently requested
Petitioner No.1 to make the payment. Finally, the developer wrote to the
society complaining about non-payment of contributions by Petitioners.
The society brought letter of Respondent No.6-developer to the notice of
the Petitioner on 21 February 1998. However, beyond making
correspondence, Petitioners failed to pay the agreed amounts either to the
society or to Respondent No.6.

32) Tired of awaiting payments on the part of the Petitioners, the
society published notice dated 4 July 1998 proposing to hold AGM on 19
July 1998 in which agenda item for allotment of flat Nos.701 and 702 to
the interested members or to others was also included. Petitioners
complain that they did not receive notice dated 4 July 1998. By further
notice dated 13 July 1998, the date of the meeting was changed to 24 July
1998. It appears that the AGM was held on 24 July 1998, which was
apparently not attended by the Petitioners. In the meeting, Item No.6
about allotment of flat Nos.701 and 702 to ‘other members’ or to ‘some
other persons’ was taken up for discussion. It appears that no other
member showed interest for allotment of flat Nos.701 and 702. It appears

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that Respondent Nos.4 and 5 requested for allotment of flat Nos.701 and
702 for the purpose of recovery of costs incurred by them. The society
accordingly resolved to allot flat Nos.701 and 702 to Respondent Nos.4
and 5. The relevant part of resolutions dated 24 July 1998 reads thus:

Item No. 6 of Agenda.

The Hon. Secretary briefed the members about the default committed by the
past Chairman of the Society Dr. Soniminde and Smt. Chandrakala Soniminde.
The Hon. Secretary informed the members that Dr. Soniminde has committed
breaches of the Development Agreement the Society has executed with the
Developers Ms. Jet Speed Developers Pvt. Ltd., though he was instrumental in
executing the Agreement with the said Developers. After having executed the
Agreement on behalf of the Society, as Chairman in pursuance of the general
Body resolution Dr. Soniminde has failed to honour his commitment to pay his
contribution towards the cost of acquisition of T.D.R./F.S.I. etc. for the
Development of the property and one construction cost payable by him and his
wife in respect of the proposed development of Flat No. 701 and 702.

The Secret the members that on behalf of the willy called Dr. Soniminde and
make payment of the dues payable by them in respect of the proposed allotment.
However, the Chairman with ulterior motives and designs, failed and neglected
to pay his and his wife contribution with a view to defeat and delay the project
The Hon. Secretary placed before the Meeting the correspondence between the
Managing Committee and the Chairman and his Advocate in the subject matter
which would throw sufficient light on the obstruction live attitude of the past
Chairman of the Society, Secretary further refreshed the memory of members
about the misbehaviour and threats given by past Chairman Dr. at Special
General Body Meeting held on 10.10.97, which Soniminde left unconcluded in
anger and huff. It was evident from the communication received from Dr.
Soiminde and his Advocate that he has been making false and frivolous
allegations against the committee and office bearers of the Society with a view to
sabotage whole development project with ulterior motives and designs so that
he could held the Society and the Developers to reasons and rate wrongful again.
Dr. Soniminde went to the extent of making said allegations against the office
bearers of the Society and conducting that by holding threat of lodging
compliant with offence Division of the police and thereby tarnish the indulge of
the Society and its members. The Hon. Secretary of the Society the constrained
to give a fitting reply to the Advocate of Dr. Soliminde by letter dated 01.03.98
for rising frivolous basement, defamatory and derogatory statements. The Hon.
Secretary further informed the members that the past Chairman of the Society
not only failed to make payment of any farthing towards the construction cost
and other development cost but continued his defiance in a high handed and

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objectionable manner causing impediment to the smooth functioning of the
Society and the development activities as against decision of the General Body
Meeting in which he was a party. In view of the non-co-operative obstructive
attitude of Dr. Soniminde ultimately the Managing Committee was constrained
to requisition a Special Meeting under Section 73(1) ID of the M.C.S.Act to
consider a no-confidence motion against him. The notice of requisition
alongwith annexures were submitted to the Dr. Registrar as required U/s. 73 (1)
ID for appropriate action. Thereafter, on account of default and failure to gttend
the Managing Committee Meeting resulted in ceasenian of the Membership of
the Managing Committee. Members are also aware that at the instruct of Dr.
Soniminde the Dy. Registrar has taken drastic action against the Managing
Committee without reasonable ground and has appointed administrator in
violation of the established accounts of law. The said decision of appointment of
Administrator was subsequently stayed by the Revisional Authority.

The Hon. Secretary further informed that the Developers M/s. Jet Speed
Developers Pvt. Ltd., who has been entrusted with the construction work of the
additional building for the Society has intimated vide letter dated 28.02.98 that
due to the default on the part of the past Chairman of the Society to pay any
single farthing to the construction cost they are unable to proceed with the
work. In the circumstances they shall be left with no other alternative but to
dispose of the said flat and realize the proceed towards the cost of construction
and to cover shortfall if any from Society.

The Hon. Secretary informed further that in view of default committed by Dr.
Soniminde and Smt. Chandrakala Soniminde their right of allotment in respect
of the above Flat No. 701 and 702 stands terminated as_ per Society’s letter
dated 21.10.97 addressed to them, to which till date there is no reply. Members
discussed the matter in detail and after deliberations it was unanimously agreed
that the allotment of flat under question should be given to any other interested
members or outsiders as the case may be. As the members present in the
meeting were not interested in lying additional allotment of flats it Was decided
to offer the Said flat to M/s. Jet Speed Developers Pvt. Ltd. in reimbursement in
their outstanding Payments. At this point Director of M/s. Jet Speed Developers
Pvt. Ltd. who was Specially invited in the supporting to sort out their
outstanding payments entered. The members present explained to the
developers that in view of the fact that no Payment has came forth from the
defaulter members. Society is not imposition to clear their outstandings and that
clear has no means to offer the flats to outsiders. Members therefrom offered the
Developers to take allotment of that NOC 701 & 702 in reimbursement of their
outstanding Payments of the same Price at which other members have been
given allotment. Further lengthy discussions, Director of M/s. Jeet Speed
Developers Pvt. Ltd., was persuaded to accept the Society’s Offer and Complete
the Construction work. There being no other alterative available with the
Society, Developers accepted the offer and informed the members present to
issue allotment in favour of their following Directors:

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1) Flat No. 701 – Shri Ramesh C. Mankani
2) Flat No. 702 – Smt. Renu R. Mankani

Members present unanimously approved allotment in favour of Shri Ramesh C.
Mankani and Mrs. Renu R. Mankani and authorised the Hon. Secretary and Hon.
Treasurer to issue letters of allotment to them. Accordingly the following
resolution was passed.

IT IS UNANIMOUSLY RESOLVED BY THE GENERAL BODY OF THE SOCIETY
that having regard to the last bill dated 15.05.1998 for sum of Rs.77,40,729/-
submitted by our contractors M/s. Jet Speed Developer Pvt. Ltd. and duly
certified by the Architect and with a view to protect and Safeguard the interést of
the members of the Society who have already paid huge amounts for their
respective flats which are being constructed by said contractors M/s. Jet Speed
Developers Pvt. Ltd., and to avoid claim of damages from M/s. Jet Speed
Developers Pvt. Ltd., and on account of the non-payment of the dues and to
avoid the situation which has been created by non-payment by Dr. Oprakash
Soniminde and his wife, Chandrakala Lokiminde in respect of their proposed
allotment of Flats NO. 701, 702 in the new building which is being constructed
by the said contractors, M/s. Jet Speed Developers Pvt. Ltd. who have thréatened
to initiate proceedings for sale of the flats which are being constructed to realise
their dues, the Society hereby allots the Said Flats No. 701 and 702 to Shri
Ramesh C. Mankani and Smt. Renu R. Mankani respectively, Directors of M/s. Jet
Speed Developers Pvt. Ltd., with Ownership rights and for sale of the flats for a
consideration of Rs.62 lacs with amount shall be adjusted from the amount
Payable by the society to the said Contractors M/s. Jet Speed Developers Pvt.
Ltd.

IT IS FURTHER RESOLVED THAT the allotment the said flats to Mr. Ramesh C.
Mankani and Smt. Renu R. Mankani is firm and shall not be revoked by the
Society and allottee shall Code by the Bye-Laws and Regulations of the Society
as may be applicable from time to time. The said allottee shall be eligible the
membership of the Society in respect of the above flats on planning of the
requirements under the Act. Rule and Bye-Laws of the Society.

33) Petitioners have questioned correctness of Resolution
adopted in AGM held on 24 July 1998 by raising multiple objections.
According to them, there was no agenda for cancellation of allotment of
flat Nos.701 and 702 included in the notice for the SGM. They have also
complained about non-receipt of notice of the said meeting. However,

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what really is objectionable is the decision shown to have been taken in
the AGM of 24 July 1998 to directly allot flat Nos.701 and 702 to the
directors of the Developer, who are close relatives of Mankanis. No doubt,
Petitioners are to be blamed for not making payments in respect of flat
Nos.701 and 702 despite grant of repeated opportunities. However, such
act on the part of the Petitioners could not have been a reason to make
arbitrary allotment of flats to the relatives of Mankani Family. If
Petitioners did not show interest in making payments in respect of flat
Nos.701 and 702, the society ought to have auctioned those flats. On
conduct of auction, both the flats could have received much higher price
as compared to the alleged dues of Respondent No.6. As per the minutes
of the AGM dated 24 July 1998, the dues of Respondent No.6 as per last bill
dated 15 May 1998 were to the tune of Rs.77,40,729/-. However, whether
the entire amount of Rs.77,40,729/- was payable only in respect of Flat
Nos.701 and 702 is not discernible. What was shown as due and payable
vide bill dated 15 May 1998 were the total dues in respect of all additional
flats constructed by Respondent No.6. It is also sought to be suggested
that there was escalation in the cost of construction. If indeed there was
escalation, whether other members contributed the additional cost is
unclear. It thus appears that the additional cost was also sought to be
recovered through the flats allotted to Petitioners. The society ought to
have auctioned flat Nos.701 and 702 and from consideration so received,
the bills of Respondent No.6 could have been paid. Be that as it may.
Respondent Nos.4 and 5, who are Directors of Respondent No.6 were
directly allotted flat Nos.701 and 702 by the society to satisfy the

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outstanding bills for construction of additional flats in the buildings Le
Chateau and Shamrock.

34) The matter, however, does not end here. As per the original
decision adopted in the EGM held on 24 April 1996, construction only
upto 7th floor on building Shamrock was to be carried out. Flat Nos.703
and 704 in Shamrock building were allotted to Mankanis. However, it
appears that two more flats on 8th floor of the buildings were taken up for
construction by Respondent No.6. Mr. Kanade justifies the action by
submitting that the dues payable to Respondent No.6 were not satisfied
only on account of allotment of Flat No.701 and 702 and that therefore it
became necessary to construct and allot two additional flats bearing
Nos.801 and 802 in building-Shamrock. This decision of the society was
like adding premium to the illegalities already committed by it. The
decision is arbitrary particularly because construction of additional flats
was taken up only for allotment to Respondent Nos.4 and 5. Thus,
Mankanis, who held 50% flats and membership in the society, were not
satisfied by assignment of construction work to their close relatives and by
allotment of Flat Nos.701 and 702 to them. The society decided to offer on
a platter another set of flats to Respondent Nos. 4 and 5. Mankanis flouted
the decision of the society to allot additional flats only to members and
ensured that the same went to their relatives. They were not satisfied with
the irregularities already committed and decided to allot two more flats to
their own relatives (Respondent Nos.4 and 5) by constructing flat Nos. 801
and 802 in Shamrock building.

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35) Petitioners amended the Dispute by inclusion of a prayer for
allotment of atleast Flat Nos. 801 and 802 constructed on 8th floor of the
building Shamrock at the cost of TDR and construction by adding prayer-
CC (iii) in the dispute. It appears that Petitioners also independently
challenged Society’s Resolution dated 21 August 2000 to construct two
additional flats on 8th floor of building, Shamrock by filing independent
Dispute No. CC/I/210/2014, which was apparently dismissed for non-
prosecution by order dated 18 August 2018. In my view, however,
dismissal of Dispute No. CC/I/210/2014 cannot come in the way of Co-
operative Court granting prayer clause-CC (iii) in Dispute No.CC/I/179 of
2014 in favour of the Petitioners. This is discussed in detail in latter part
of the judgment.

36) In my view, allotment of Flat Nos.701 and 702 to Respondent
Nos. 4 and 5 was itself an illegal act and the same cannot be permitted to
be compounded by allotment of 2 additional flats i.e. Flat Nos.801 and 802
in their favour. The entitlement of Respondent No.6 to receive monies for
construction of additional flats flow out of agreement dated 20 June 1996
and if any amount remained unpaid for construction of additional flats,
the remedy for Respondent No.6 was to file a suit against the society for
recovery of that amount. It appears that the suit has indeed been filed by
Respondent No.6 against the society though none of the parties have
placed before this Court the plaint in any such suit. There was no right in
favour of directors of Respondent No.6 (who are close relatives of Mankanis)
to secure allotment of any flats in the building. In that sense, allotment of
flat Nos.701 and 702 in favour of Respondent Nos.4 and 5 was itself an

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illegal act on behalf of the society. The said illegality is compounded by
the society by allotting flat Nos. 801 and 802 to them. In my view, this
position ought to have been appreciated by the Cooperative Court and by
the Cooperative Appellate Court, who have erroneously dismissed the
Dispute of the Petitioners.

37) If both the Courts found that the flat Nos.701 and 702 were
not possible to be allotted to the Petitioners on account of occupation
thereof by Respondent Nos. 4 and 5, they ought to have considered the
alternate prayer of Petitioners for allotment of atleast Flat Nos.801 and
802 to the Petitioners. Petitioners had shown willingness to pay the cost
of TDR and cost of construction of 2 flats to the society and the said
amount would have satisfied the alleged additional claim of Respondent
No.6 towards costs incurred in purchase of TDR and construction of
additional flats. As observed above, against outstanding amount of
Rs.77,40,729/-, Respondent No.6 (through its directors) had already secured
flat Nos.701 and 702 from the society. What exactly was the cost of those
two flats as in the year 1998 is unknown as this juncture. But to have some
idea about the cost of the flats, I proceed to rely upon the calculations
presented by Mr. Kanade, according to whom, the approximate market
cost of flat Nos. 801 and 802 is now 7.31 crores. This would mean that flat
Nos. 701 and 702 may have satisfied almost the entire dues of Respondent
No. 6 of Rs.77,40,729/- in 1997-98. In such circumstances, allotment of
further two flats to the directors of Respondent No. 6 (who are relatives of
Mankanis) was clearly an arbitrary act.

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38) Thus allotment of 2 additional flats ( 801 and 802) free of cost
to Respondent Nos.4 and 5 was clearly an arbitrary act on the part of the
society. In such situation, the Cooperative Court ought to have granted
prayer CC(iii) by directing allotment of Flat Nos.801 and 802 to the
Petitioners upon payment of cost of TDR and cost of construction. This
would have enabled the society to satisfy any balance payment to
Respondent No.6, if any. Instead of doing so, the Cooperative Court
erroneously proceeded to reject even prayer clause CC(iii) only because
another Dispute filed by the Petitioners was pending. The Cooperative
Court ought to have appreciated that the separate Dispute filed by the
Petitioners was qua the management of affairs of the society and there
was no prayer for allotment of those 2 flats to the Petitioners in that
dispute. Only the resolution of the society to construct additional flats
and allot the same to Respondent Nos.4 to 6 was under challenge in
Dispute No. CC/I/210/2014. The entitlement of Petitioners to receive
allotment of flat Nos. 801 and 802 was required to be decided in the
present proceedings. Dismissal of Dispute No. CC/I/210/2014 would only
mean that the decision of the society to construct flat Nos. 801 and 802 is
validated. Whether Petitioners are entitled to secure allotment of those
two flats was not the subject matter of controversy in Dispute No.
CC/I/210/2014. Therefore, dismissal of Dispute No. CC/I/210/2014 cannot
be a ground ipso facto for denial of relief of allotment of flat Nos. 801 and
802 to the Petitioners.

39) As observed above, Dispute No. CC/I/210/2014 did not contain
a prayer for allotment of flat Nos. 801 and 802 to the Petitioners. The
prayers in Dispute No. CC/I/210/2014 read thus:
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a) This Hon'ble Court be pleased to declare that the resolution dated 21.8.2000
allegedly passed by the Opponent No. 1 under Item No. 5 concerning the alleged
settlement with the Opponent No. 4, allowing the Opponent No. 4 to use 100
sq.mt. T.D.R. / F.S.I. to construct 8th floor flat and to retain the flat unto itself, is
illegal, unauthorized and unlawful and same is liable to be quashed and set aside
and accordingly this Hon'ble Court be please to quash and set aside the said
Resolution No. 5 of the meeting dated 21.8.2000.

(b) This Hon'ble Court be pleased to restrain the Opponents by a permanent
order and injunction from in any manner acting upon and/or giving effect and/or
making representations, except proceeding with construction of 8th floor flat as
per order dated 22.11.2004 passed by the Hon'ble High Court, in any manner
whatsoever to any person/authority on the basis of said alleged resolution
allegedly recorded under Item No. 5 in the minutes of meeting dated 21.8.2000;

(c) This Hon'ble Court be pleased to declare that the said flat on 8th floor on
'Shamrock Building' belong to the Opponent no. 1 and be pleased to further
declare that the Opponent Nos. 4, 5 and 3 and/or any other person claiming
through them have no right, title and interest therein.

(d) The Hon'ble Court be pleased to declare that the Opponent Nos. 3, 4and 5 are
bound and liable to handover vacant and peaceful possession of said flat on 8th
floor in 'Shamrock Building' to the Opponent No. 1 and accordingly the
Opponent Nos. 3, 4 and 5 be ordered and directed to handover vacant and
peaceful possession of said flat on 8th floor in 'Shamrock Building' to the
Opponent No. 1;

(e) This Hon'ble Court be pleased to declare that towards cost of construction
and other expenses for constructing 8th floor flat on Shamrock. Building the
Opponent no. 4 is entitled at the rate of Rs. 500/- per sq.ft. and accordingly the
Opponent No.1 be ordered to pay construction costs to the Opponent no.4.

(f) Pending the hearing and final disposal of dispute the Opponent Nos. 3, 4 and
5 be restrained from in any manner dealing with, disposing of, alienating,
encumbering and/or occupying, parting with possession of said flat,

(g) Ad-interim relief interms of prayer (f) hereinabove;

(h) The cost of dispute be provided for;

(i) Such further and other reliefs be granted as this Hon’ble Court may deem fit
and proper.

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40) Thus, Dispute No. CC/I/210/2014 essentially challenged
decision of the society in entering into settlement with Respondent No. 6
qua construction to be carried out on the 8th floor. Petitioners sought a
declaration that flats on the 8th floor belong to the society and that
Respondent Nos. 4 to 6 cannot claim any rights therein. They also sought a
declaration that the cost of construction of flats on 8 th floor cannot exceed
Rs. 500 per sq.ft. and sought a direction to the society to pay the said cost
at the rate of 500 sq.ft. instead of entering into illegal settlement with
Respondent No. 6. Thus, Dispute No. CC/I/210/2014 neither challenged
allotment of flat Nos. 801 and 802 in favour of Respondent Nos. 4 and 5
nor sought relief of allotment of these flats to the Petitioners. Therefore,
dismissal of Dispute No. CC/I/210/2014 on account of non-prosecution
cannot come in the way of Petitioners prosecuting the prayer for allotment
of flat Nos. 801 and 802 in the present proceedings.

41) Respondent Nos. 4 to 6 themselves desired that the prayer for
allotment of flat Nos. 801 and 802 ought to have been decided in Dispute
No. CC/I/179/2014. It appears that Respondent Nos. 4 to 6, in addition to
Mr. K. C. Mankani, had filed their own Appeal No. 26 of 2017 challenging
the judgment and award dated 30 January 2017 passed in Dispute No.
CC/I/179/2014 (old Dispute No.CC/II/26/1999). They were aggrieved by the
finding recorded by the Co-operative Court about decision of prayer for
allotment of flat Nos. 801 and 802 in Dispute No. CC/I/210/2014. The Co-
operative Court had recorded following findings in paragraph 59:

59. Furthermore, the relief in respect of possession of Flat Nos. 801 and 802 is
based upon Occupation Certificate obtained against the payment of costs as per
the decision taken by the General Body on 21 August, 2000. That means in the

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event of obtaining Occupation Certificate the Disputants claiming the said relief.
The Disputants already have filed the dispute with regard to the said Flat Nos.
801-802 before the Court which is pending. In view of the contentions of
obtaining Occupation Certificate it needs the adjudication of the facts pleaded in
this respect by the respect parties. Moreso there is no specific evidence in
respect of the claim of 801 and 802. Therefore, unless the facts related to the
said flat and the possession as claimed are determined based on the Occupation
Certificate, it cannot be decided at once. In the present dispute and when already
the dispute with respect to the said subject matter need not be taken into
consideration in the present dispute, being the subject matter subjudice.

42) The findings in paragraph 59 were sought to be challenged
before the Co-operative Appellate Court by Respondent Nos. 4 to 6 in
Appeal No. 26 of 2017. Having challenged the findings in paragraph 59 of
the judgment of the Co-operative Court, Respondent Nos. 4 to 6 clearly
took a position that the prayer for allotment of flat Nos. 801 and 802 ought
to have been decided in Dispute No. CC/I/179/2014 and the same could not
be decided separately in Dispute No. CC/I/210/2014. Respondent Nos. 4 to
6 cannot now turn around and contend that dismissal of Dispute No.
CC/I/210/2014 extinguishes the right of Petitioners to seek allotment of
flat Nos. 801 and 802 in the present proceedings.

43) I am also not impressed by the submissions on behalf of
Respondent Nos. 4 to 6 that there was no challenge by the Petitioners to
rejection of their prayer for allotment of flat Nos. 801 and 802 before the
Appellate Court. In paragraph 80 of its judgment, the Appellate Court has
specifically dealt with non-grant of prayer clause CC(iii) and it is held as
under:

80) The appellant is also aggrieved with the observation of the Ld Co-operative
Court in Para 13 of the order that "the prayer of declaration and injunction does
not survive as the possession was handed over to the opponents and the
disputant has not taken any further steps for the violation of the order of the
court passed below Ex.5 that the parties were directed to maintain status-quo."
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The appellant contended that the said finding is bad in law as the order of the Ld
Court dated 10/1/2003 20-00hat all the opponents were directed to maintain
status-quo. Despite the said order the opponents No.4 to 6 have taken
possession from the 5 opponent No.1, so there is violation of court order.
According to the disputants, though the possession is given, still the reliefs in
terms of prayer clauses (a), c, cc(ii) still survive. In prayer clauses b, cc, cc(i) do
not survive. So far as prayer clause cc(iii) is concerned, the issue of 8th floor in
"Shamrock" building is subject matter of appeal filed by the opponents No.2 to 6
and therefore the main relief still survives despite the opponents violating
injunction order.

44) Thus, Appellate Court was specifically concerned with the
validity of findings recorded by the Co-operative Court qua prayer CC (iii)
relating to flat Nos. 801 and 802.

45) In view of the above discussion, I am of the view that
allotment of both set of flats (Nos. 701 and 702, as well as Flat Nos.801 and
802) made in favour of directors of Respondent No.6 is clearly arbitrary.
However, it is too late in the day to take away flat Nos.701 and 702 from
Respondent Nos.4 and 5. They have been occupying those flats for a
considerable period of time. It is also an admitted position that
Petitioners did not pay their contributions qua flat Nos.701 and 702.
Though ordinarily flats ought to have been auctioned instead of allotting
them to Respondent Nos.4 and 5, it is now too late in the day to take away
those two flats from Respondent Nos.4 and 5. I am therefore not
disturbing allotment of flat Nos.701 and 702 in favour of Respondent
Nos.4 and 5.

46) So far as allotment of Flat Nos.801 and 802 in building
Shamrock is concerned, Mr. Kanade has submitted that those two flats are
partly constructed but Respondent could not complete finishing work of
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the said two flats due to lack of funds. It thus appears that construction of
Flat No.801 and 802 is not complete in all respects, on account of which
both the flats remain unoccupied. However, Respondent Nos.4 and 5
continue to be the allottees in respect of those two flats (801 and 802) and
apparently hold membership of the society in respect of those two flats.
Flat Nos.801 and 802 are thus unoccupied. In these circumstances, flat
Nos.801 and 802 can be allotted to the Petitioners as per prayer clause-CC
(iii). In that prayer, they have shown willingness to pay cost of TDR and
cost of construction in respect of flat Nos. 801 and 802.

47) Dr. Tulzapurkar submits that on 6 November 2002,
Petitioners had filed an application for permitting them to deposit an
amount of Rs.62,00,000/- and interest thereon in the Dispute as their
contribution towards flat Nos.701 and 702. After applying simple rate of
interest of 8% p.a. on the amount of Rs. 62 lakhs, the amount payable
today would be approximately Rs.1.8 crores. However, Dr. Tulzapurkar has
fairly submitted that, considering interest payable on offered amount of
Rs. 62 lakhs since 2002, Petitioners are willing to pay an amount of Rs. 2.5
crores if flat Nos.801 and 802 are allotted to them. The offer of Rs.2.5
crores is made despite the fact that the flats are unfinished. Petitioner will
have to either spend a substantial amount for completing the finishing
work or will have to wait for redevelopment of the building by blocking the
amount of Rs.2.5 crores for indefinite period. This indicates that the
Petitioners will get penalised for this non-cooperation in making timely
payments to the society for flat Nos. 701 and 702.

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48) Respondent Nos.4 and 5, who are directors of Respondent
No.6 are allotted flat Nos.801 and 802 for the purpose of enabling them to
recoup the alleged additional cost of construction. The Society has
allotted those two flats to Respondent Nos.4 and 5 in view of its inability
to pay pending dues of Respondent No.6. In that sense, the amount of
Rs.2.50 crores, which Petitioners are willing to pay, must go to
Respondent Nos.4 and 5 and not to the society. In my view therefore, the
amount of Rs.2.50 crores can be directed to be paid by Petitioners to
Respondent Nos.4 and 5, against which they must surrender their
allotment in respect of those two flats and Petitioners shall become
allottees thereof. This is the best possible way to resolve the conundrum
involved in the unique facts and circumstances of the present case. This
would also be an equitable arrangement between the parties. Today, the
cost of flat Nos.801 and 802 may be much higher than Rs.2.50 crores,
which amount Petitioners are willing to pay. However, the case involves
entitlement of members of the society to secure additional flats by paying
only cost of construction and cost of TDR. The TDR became loadable on
the plot owned by the society. The members of the society are the
beneficiaries of permissibility to construct additional flats and decided to
share the same amongst each other except Mrs. Kedia who showed no
interest in allotment of additional flats. All other members of the society
have benefited by receiving additional flats at nominal costs of
construction and cost of TDR. Petitioners must also receive the same
benefit, and in that sense, they need not pay the market rate of flat
Nos.801 and 802. The case involves stealing of benefits meant for
members of the society by directors of the contractor, who had no

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semblance of interest in the property of the society. What should have
been enjoyed only by society members is stolen by Respondent Nos. 4 and
5, possibly on account of their relations with majority shareholders in the
society. As a matter of law and fact, Respondent Nos. 4 and 5 are not
entitled to any flat in the building. Even today, this Court could have
directed the society to auction all the four flats and to satisfy the dues of
Respondent No. 6 from sale consideration. However this Court is showing
indulgence in favour of Respondent Nos. 4 and 5 by not disturbing
allotment made to them in respect of flat Nos 701 and 702. This does not
mean that they would demand market rate of flat Nos. 801 and 802 from
Petitioners.

49) Therefore Respondent Nos.4 and 5 cannot expect market
price of flat Nos.801 and 802 since allotment of all the four flats to them
itself is found to be arbitrary. They are not the original members of the
society. They arrived at the scene in their capacity as directors of
Respondent No.6, who was a mere professional contractor entitled to
receive cost of TDR and cost of construction from members. Respondent
No.6 or its directors did not have any right in the land or the building.
Despite this position, directors of Respondent No.6, who happen to be the
relatives of Mankanis, have already secured a windfall gain in terms of
allotment of flat Nos.701 and 702. This Court is ensuring that they receive
additional amount of Rs. 2.50 crores, which Petitioners are willing to pay
for flat Nos.801 and 802. In my view therefore, the arrangement suggested
by this Court balances the equities amongst the parties. Petitioners will
have to spend considerable amount in completing finishing work in

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respect of flat Nos.801 and 802. This would mean that the flat Nos. 801
and 802 would cost them much higher than Rs. 2.50 crores.

50) The unjust enrichment by Respondent Nos. 4 to 6 in the
present case is more than apparent. There is no dispute to the position
that all other members of the society had paid their agreed contribution as
per the agreement executed with Respondent No. 6. The members were
required to contribute Rs. 4000 per sq.ft. for construction of additional
flats which included cost of construction and cost of acquisition of TDR.
Apart from flat Nos. 701, 702, 801 and 802 (secured by Respondent Nos. 4
and 5), the society members apparently paid them an amount of Rs.
4,61,68,500/-. Additionally, it has secured allotment of four flats of
substantially large size. The total area of flat Nos. 701 and 702 is
apparently 1300 sq.ft.. According to Mr. Kanade, the total area of flat Nos.
801 and 802 together with terrace is 1400+450=1850 sq.ft. Thus, in a
prominent location like Santacruz in Mumbai, Respondent Nos. 4 to 6 have
received allotment of substantially large 4 flats, which themselves would
be worth a couple of crores when resolution was adopted in the year 2000.
According to Mr. Kanade flat Nos. 801 and 802 are today worth 7.31 crores
even going by unfurnished work in the flats. Thus, the market value of all
the 4 flats today may be in the range of approximately Rs. 15 Crores.
Respondent Nos. 4 to 6 have thus secured a windfall gain possibly due to
their family relations with Mankanis, who controlled 50% of decision
making power in the society.

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51) Both the sides have submitted complex computations of exact
quantum of TDR purchased by Respondent No.6. The calculations
submitted on behalf of the Petitioners are based on quantum of TDR of
450 sq.m. Mr. Kanade has placed on record computations on behalf of
Respondent Nos. 4 to 6, in which a claim is raised that TDR of 1000 sq.m.
(approximately 10000 sq.ft.) is purchased. Additionally, 3000 sq.ft. area
was obtained by payment of premium to MCGM. This is how it is
contended on behalf of Respondent Nos. 4 to 6 that additional area of
13000 sq.ft. is purchased, cost of which @ Rs.4000/sq.ft. payable by
members was Rs.5.2 crores. Even if the computations by Mr. Kanade are
taken into consideration and alleged escalated rate of Rs.4800/sq.ft. is

applied, the amount payable to Respondent No.6 would be Rs.6.24 crores.

It appears that the members of the society already paid about Rs.4.62
crores to Respondent No.6. This would leave deficit of only about
Rs.1.62 crores. For alleged deficit of Rs.1.62 crores, Respondent Nos. 4
to 6 are already rewarded with allotment of flat Nos. 701 and 702.
Therefore, further allotment of flat Nos. 801 and 802 is clearly
unwarranted in the present case. This Court is ensuring that
Respondent Nos.4 and 5 receive additional amount of Rs.2.5 crores
from the Petitioners. Thus, for non-payment of alleged amount of
Rs.1.62 crores, Respondent Nos. 4 to 6 would receive / have received
Rs.4.62 crores + Rs.2.5 crores + two large sized flats (701 and 702) in the
building. This should ideally quench the thirst of Respondent Nos.4 to
6. However, if Respondent No.6 believes that after adjusting price of flat
Nos. 701 and 702 there was still some deficit amount payable by the
society, it is free to recover the said amount from the society. Its
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Neeta Sawant WP 751 of 2019

directors have no right to retain flat Nos. 801 and 802, which are
unfinished and unoccupied and must go to the real beneficiaries i.e.,
Petitioners.

52) In view of the above discussion, the Petition succeeds in part
and I proceed to pass the following order:
(i) Judgment and order dated 30 January 2017 passed by the Co-
operative Court in Dispute No.CC/I/179/2014, as well as
judgment and order dated 11 January 2018 passed by the Co-
operative Appellate Court in Appeal No. 18/2017 and order
dated 13 July 2018 passed by the Co-operative Appellate Court
in Review Application No.3/2018 are set aside.
(ii) Dispute No.CC/I/179/2014 is partly decreed by declaring that
Petitioners are entitled to allotment of Flat Nos. 801 and 802
in the building Shamrock and they have become owners and
occupiers as well was members qua flat Nos. 801 and 802.
(iii) The Respondent-Society is accordingly directed to formally
cancel the allotment of flat Nos.801 and 802 made in favour of
Respondent Nos.4 and 5 and enter the names of Petitioners in
its membership register in respect of flat Nos. 801 and 802.
(iv) Petitioners shall pay to Respondent Nos. 4 and 5 an amount of
Rs. 2,50,00,000/- within 6 weeks.
(v) Respondent No. 4 and 5 shall hand over possession of flat Nos.
801 and 802 to the Petitioners upon receipt of amount of
Rs.2,50,00,000/- from Petitioners.

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(vi) If Respondent Nos. 4 and 5 refuse to accept the offered
amount of Rs.2.5 crores from the Petitioners, the amount shall
be deposited by the Petitioners with the society, which shall
invest the same in interest-bearing deposits. Upon deposit of
the amount with the society, Petitioner shall be entitled to
take over possession of flat Nos. 801 and 802 by assistance of
local police.
(vii) Petitioners shall be made liable to pay maintenance dues to
the society only from the date of handing over possession of
flat Nos.801 and 802 in their favour. Neither the society, nor
Respondent Nos. 4 and 5 shall demand any amounts from the
Petitioners towards maintenance in respect of the past period.
(viii) In the event of failure on the part of the Petitioners to pay
amount of Rs.2.50 crores to Respondent Nos.4 and 5 within the
stipulated time, the allotment of flat Nos.801 and 802 shall
revive in the name of Respondent Nos.4 and 5.

53) With the above directions, the Writ Petition is partly
allowed. Rule is made partly absolute. There shall be no order as to costs.

54) Pending Interim Applications if any, are also disposed of.

[SANDEEP V. MARNE, J.]

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