BEHRAMSHAH SHROFF BLDG NO. 1(YAZAD) CO-OPERATIVE HOUSE SOCIETY LTD.versusTHE ZOROASTRIAN RADIH SOCIETY

2026:BHC-OS:4262


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                     IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                         ORDINARY ORIGINAL CIVIL JURISDICTION

                         EXECUTION APPLICATION NO. 1801/2018
                                        WITH
                          INTERIM APPLICATION NO. 2545/2025
                                         IN
                         EXECUTION APPLICATION NO. 1801/2018
           THE ZOROASTRIAN RADIH SOCIETY AND 5 ORS ..APPLICANTS
                   VERSUS
           BEHRAMSHAH SHROFF BUILDING
           NO. 1 (YAZAD) CO-OPERATIVE
           HOUSING SOCIETY LTD.                       ..RESPONDENTS
                                        WITH
                            CHAMBER SUMMONS NO.1/2025
                                         IN
                         EXECUTION APPLICATION NO. 1801/2018

           THE ZOROASTRIAN RADIH SOCIETY              ..APPLICANT

                   VERSUS

           BEHRAMSHAH SHROFF BUILDING
           NO. 1 (YAZAD) CO-OPERATIVE
           HOUSING SOCIETY LTD.                       ..RESPONDENTS
                                        WITH
                                 NOTICE NO. 212/2018
                                         IN
                         EXECUTION APPLICATION NO. 1801/2018
           THE ZOROASTRIAN RADIH SOCIETY              ..APPLICANT

                   VERSUS

           BEHRAMSHAH SHROFF BUILDING
           NO. 1 (YAZAD) CO-OPERATIVE
           HOUSING SOCIETY LTD.                       ..RESPONDENTS
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                             WITH
               EXECUTION APPLICATION NO. 694/2019
                             WITH
                      NOTICE NO.163/2019
                               IN
               EXECUTION APPLICATION NO. 694/2019

BEHRAMSHAH SHROFF BUILDING
NO. 1 (YAZAD) CO-OPERATIVE
HOUSING SOCIETY LTD.                               ..APPLICANT

       VERSUS

THE ZOROASTRIAN RADIH SOCIETY & ORS.                  ..RESPONDENTS
                      -------------------------------
Adv. Sarosh Damania a/w. Adv. Riddhi Shah, Adv. Dharmi Patel, Adv.
Madhura Shah for the Original Claimant/Applicant in EXA/694/2019.

Adv. Cherag Balsara a/w. Adv. H.N.Vakil, Adv. Farhad Vakil i/b.
M/s.Mulla & Mulla & Craigie Blunt & Caroe for the Applicant-Original
Respondents in EXA/1801/2018.
                      -------------------------------

              CORAM                      :   RAJESH S. PATIL, J.

              RESERVED ON                :   18 DECEMBER, 2025

              PRONOUNCED ON              :   12 FEBRUARY, 2026.

JUDGMENT:-

1)     The execution applications have been filed by both the parties.

Execution Application No.694 of 2019 has been filed by the

Behramshah Shroff Bldg. No.1 (Yazad) Co-operative Housing Society

Ltd. (for short ‘society’) and Execution Application No.1801 of 2018

has been filed by the Zoroastrian Radih Society (for short ‘Trust’).
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1.1) Both the parties are seeking execution of the Lease Agreement.

However, a dispute has arisen between them with regards to the terms

of the Lease Agreement, and more particularly on the question of

whether the flat purchasers would be liable to pay a 10% differential

amount on every subsequent sale of a flat after the first sale.

1.2) In the present execution applications, by an order dated 4

December 2024, a Single Judge of this Court (Coram : Abhay Ahuja,

J.) passed direction that both parties have agreed in order to abide by

the order of the Supreme Court, that the execution of the lease deed

would be finalized within two weeks. The said order dated 4

December 2024 reads as under:-

      1. Pursuant to earlier orders of this Court, today the matter has been heard
      extensively.
      2. Both the learned Counsel have submitted that in order to abide by the order
      of the Hon'ble Supreme Court dated 27 March, 2018 directing execution of the
      Lease Deed, the Lease Deed would be finalized within a period of two weeks,
      keeping in mind, the order dated 18 May, 1999 passed by the Charity
      Commissioner of the State of Maharashtra, whereby application for according
      sanction to Development-cum-Lease-cum-Sale Agreement was allowed by the
      Charity Commissioner under Section 36 of the Bombay Public Trusts Act, 1950
      (now Maharashtra Public Trusts Act, 1950).
      3.      List for compliance on 18 December, 2024.
                                                           (Emphasis supplied)

2)     I have heard learned counsel for both sides and with their

assistance I have perused the documents on record.

3)     The Charity Commissioner of the Maharashtra State, Mumbai,

passed order dated 18 May 1999, in the application preferred under
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Section 36 of the Bombay Public Trusts Act, by the Trust. It was

observed that the trust was not disposing of the land, but was granting

the land on lease to prospective housing societies of flats meant for

poor Parsees. The trust was to take Rs.20,000/- and Rs.25,000/-

respectively as deposit from each flat owner, depending upon the

dimension of the flat, as agreed in the terms of the agreement. This

deposit was to be interest-free and the trust would deposit this

amount in bank and as noted in paragraph no.8, the interest on such

deposit would be utilised by the Trust by way of rent of the land,

yielding about Rs.2,400/- to Rs.3,000/- per year per flat. Further it

was noted in paragraph no. 10 that it was of the opinion that

agreements were not contrary to the interest of the trust and were

well-balanced.

4)     The Trust constructed fifty-six (56) flats in two buildings and

allotted the flats to needy members of the Parsee community, in the

month of March 1995, at a cost of Rs.850/- per sq. ft. The said act was

done by the Trust as they were the owner of land admeasuring

1,34,007.50 sq.yds. at Oshiwara, Jogeshwari, Mumbai. The said land

was encroached upon by slums and the MHADA sought to take over

the said land. Consequently, a writ petition was filed before this Court.

In the said Writ Petition, consent terms came to be        entered into
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between the parties, pursuant to which, out of the total land

admeasuring 1,34,007.50 sq.yds., the Trust retained 30,146 sq.yds.

upon which the subject buildings were constructed. As per the

operative part of the order, point no.10, it was mentioned that

        “10. The purchaser of the flat shall not be entitled to sell the same for
        the period of 10 years from the date of the allotment and shall also
        liable to pay 10% of the price difference in case, he sells it after 10 years,
        to the applicant-trust”.

5)     Hence, the Trust has received the entire construction cost of the

flats from the prospective purchasers of the flats. As far as the land

beneath the flats is concerned, the Trust has procured an amount of

Rs.20,000/- and Rs.25,000/- respectively from the flat purchasers,

depending upon the area of the flat, as interest free deposits. It is

recorded in the order of the Charity Commissioner that, the Trust, by

taking such interest free deposits from the flat purchasers, would earn

around Rs.2,400/- to Rs.3,000/- per flat per year.

5.1) The flats are not sold free of cost, since the construction cost has

been recovered @ Rs.850/- per sq.ft. for each flat. The restriction “not

to sell” the flat was imposed for a period of ten (10) years. There is no

dispute that the flat purchasers are ready to comply with the said

condition, and are also ready to adhere to the condition of paying

10% of the price difference to the Trust in case of first sale of their

respective flat.
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5.2) The dispute, however, is whether the Trust is entitled to recover

10% of the price difference on every subsequent sale, whenever there

is second sale or third sale or any sale thereafter ?

6)     At this stage, it will be important to note the recent amendment

to the Maharashtra Co-operative Societies Act and the issuance of

Notification in the year 2014, wherein it has been resoved that while

selling the flat, in housing society the seller being a member of the

society need not take permission of the society to sell his flat. The

Model By-Laws of the Co-operative Housing society, Clause 38 (d)

reads as under :

      “38(d) “No Objection Certificate” of the Society is not required to transfer
      the shares and interest of the transferor to transferee. However in case such
      a certificate is required by the transferor or transferee, he shall apply to the
      Society and Committee of the Society may consider such application on
      merit, within one month.”
                                                            (Emphasis supplied)

7)     Hence, by virtue of the aforesaid, recent amendment, even the

Model by-laws of the Maharashtra Co-operative Societies has

acknowledged that on every sale of the flat, the seller is not required

to take permission of the society. In the present proceedings,

admittedly the purchasers have become owners of the flats and are

governed by Maharashtra Co-operative Societies Act. There is a

restriction of ten (10) years imposed on them, during which period

the flat cannot be sold. However, after the expiry of ten (10) years, in
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case the flat is sold, a charge of 10% of the price difference is payable

to the trust.

8)     As there was dispute between the parties mainly on the issue

whether the flat owner should also be liable to pay 10% on every

subsequent sale of flat, the society invoked arbitration clause. Before

the Sole Arbitrator both the parties entered into the consent terms

dated 21 November 2015. As per the consent terms, the disputes and

differences stood settled and learned arbitrator had finalized the draft

Deed of Assignment to be executed by the Trust in favour of the

Housing Society. The said finalized draft Deed of Assignment was

annexed to the consent terms which was to be executed within a

period of two months, on the execution of the consent terms by

passing an award. Paragraph Nos.4 and 5 of the said consent terms

read as under:-

        4.    Agreed and declared that the above deed of Assignment would be
        executed on the basis of the orders so far passed by the office of the
        Hon'ble Charity Commissioner. The further deed of Rectification of the said
        deed executed shall be executed on the basis of the order that may be
        passed on. Misc. Application No. 238 of 2015 dated 22-06-2015 pending as
        on date before the office of Charity Commissioner Mumbai.
        5.     The Claimant shall be at liberty to make their representation before
        the Charity commissioner in the said Misc. Application No. 238 of 2015, at
        the discretion of the Charity Commissioner. The Claimants shall within a
        period of 30 days from execution of the aforesaid Deed of Assignment take
        all necessary steps to amend their bye laws to bring them in consensus
        with the terms of Deed of Assignment. The Claimant shall also
        subsequently amend the bye laws subject to the decision of the Charity
        Commissioner.
                                                           (Emphasis supplied)
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9)      Based on the consent terms, the sole arbitrator passed the

consent award. In paragraph no.4 of the said consent award, it was

recorded as under :-

        4.      Accordingly there shall be an Award in terms of the consent terms
        executed by the parties, which are taken on record and marked “X” for
        identification. The undertakings given in the consent terms are accepted.”

10)     Therefore, it was made clear by the Trust that the housing

society would be at liberty to make a representation before the Charity

Commissioner in the said Misc. Application No.238 of 2015. It was

also made to believe that Misc. Application No.238 of 2015 filed on 22

June 2015, was pending as on the date of the execution of the consent

terms i.e. on 21 November 2015.

11)     By way of Misc. Application No.238 of 2015, the Trust had

sought reliefs seeking inclusion of additional clauses in the lease

agreement by way of seeking modification to the order dated 18 May

1999 passed by the Charity Commissioner. The prayer clauses (a) to

(g) read as under:-

      a)         Prior approval or NOC from the Society (Trust) is mandatory before
      the sale of any Flat whether first sale or any subsequent sale thereof.

      b)         The Society (Trust) to have a prerogative for Right Preemption
      should it find that there is monetary suppression in which event the Trust will
      offer to pay 10% more than the price indicated and will be prepared to buy
      back the flat.
      c)         The Co-operative Housing Society of the respective buildings should
      not transfer the Flat in the name of the new Purchaser, no transfer the Share
      certificate in the name of the new Purchaser without prior approval of the
      Society.
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      d)         The Seller as well as the buyer all the future buyer, their successors
      and assigns shall abide by the Charity Commissioner's order and that the said
      new buyer, their successors and assigns being aware that the said land on
      which the said flat exists being leased land shall be exclusively used for
      residential and in any case the said new buyer, their successors and assigns
      shall give a Declaration cum Indemnity for the same.

      e)       Every sale transaction, either Original Allottee of the flat or any
      subsequent sale thereof the purchasers should abide by the 10% Clause as
      mentioned in the aforesaid order no.J/4158/97 dated 18.05.99 sanctioned by
      the Hon’ble Authority.

      f)        Every subsequent Sale Agreement between the Vendors and the
      Buyer will be in accordance with the Agreement for sale made by the Society
      (Trust), with the initial Buyer of the Flat.

      g)        In order to ensure that the rights and privileges of the Society
      (Trust), who has released the land for period of 60 years, the Society (Trust)
      must have say in the managing the affairs of each of the Co-operative Housing
      Society so that the interest of the Society (Trust) is protected and the
      Cooperative Societies is not run with any prejudicial interest against the
      Society (Trust), it is necessary that the Co-operative Housing Society shall
      appoint two nominee of the Society (Trust) as the members of the Managing
      Committee of each such Co-operative Housing Society till their nomination is
      cancelled by the Trust and or they resign and such case the Society (Trust),
      shall be entitled to cancel the nomination of persons nominated earlier and
      appoint/ nominate any other person in his place from time to time.
                                                              (Emphasis supplied)

12)     A plain reading of the above prayers makes it clear that the trust

sought modification of the Lease Agreement so as to incorporate

additional clause requiring payment of 10% of the price difference on

every subsequent sale transaction. Thus, what was sought by the trust

was that despite the flat purchaser having paid the full cost of

construction of the flat and had also deposited an interest free amount

of Rs.20,000/- or Rs.25,000/-, depending upon the area of the flat,

and despite, the trust earning approximately Rs.2400/- to Rs.3000/-
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per flat per year as per finding of the Charity Commissioner. The flat

purchaser though governed by the provisions of Maharashtra Co-

operative Societies Act and Rules, they would still be required to

additionally pay 10% on every subsequent transaction of sale to the

trust.

13)      It would be pertinent to note that although as per the consent

terms, the consent award was passed on 14 December 2015, which

referred to Misc. Application No.238 of 2015, when, in fact, it was

already been withdrawn by the Trust. By an order dated 4 November

2015, passed pursuant to a pursis filed by the Trust dated 3 November

2015, Misc. Application No.238 of 2015 stood withdrawn. While

withdrawing the said Misc. Application No.238 of 2015, the housing

society was not informed, and were not represented before the Charity

Commissioner. This crucial fact of withdrawal of Misc. Application

No.238 of 2015 was neither disclosed to the sole arbitrator, who

disposed of the arbitration proceedings by way of his consent award,

nor did the trustees of the Trust thought it appropriate to point out the

said fact to the members of the housing society while the consent

terms were signed on 21 November 2015. It appears from the records

that the said consent terms were signed by one Mr. H.H. Santoke, as

trustee of the trust, who is present before this Court and I have been
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informed that even today he continues to be trustee of the Trust.

14)    I have also been shown the order dated 26 October 2015 passed

by the Charity Commissioner in Misc. Application No.238 of 2015. It is

pertinent to note that the said order passed by the Charity

Commissioner which reads as under :-

      “Heard, trustees are seeking some change in the earlier order of this authority
      dated 18.05.1999. It appears that the trust has sold its properties subject to the
      conditions in the said order. If such conditions are to be modified the purchasers
      may be prejudiced. Further a question may arise whether contract between such
      purchasers and trust can be modified by this authority. In other words whether
      this authority has jurisdiction to decide this issue. Trust to demonstrate and
      answer. Accordingly fixed for hearing of this preliminary issue.”
                                               (Emphasis supplied)
15)    Therefore, even the Charity Commissioner expressed its view

that once the trust had sold the flats to the buyers, they cannot modify

the terms of the lease as an order was passed by the Charity

Commissioner on 18 May 1999 and the question was whether the

Charity Commissioner has such jurisdiction to decide the issue of

modification.

16)    The said consent award was subsequently challenged by the

housing society under Section 34 and thereafter, under Section 37 of

the Arbitration and Conciliation Act,1996. However, both the

applications of the housing society were rejected.

16.1) The housing society thereafter, preferred an Special Leave

Petition before Supreme Court. While disposing of the S.L.P. by its
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order dated 27 March 2018, the Supreme Court specifically recorded

that transfer be finalised without there be any additional conditions

contained in the Charity Commissioner application dated 28 April

2015 and also directed execution of the lease deed within a period of

three months from that date. The said order of the Supreme Court

reads as under:-

                                        ORDER
       Heard learned counsel for the parties.
       The dispute between the parties relating to terms on which the land and
       building was to be transferred was the subject matter of arbitration.
       The arbitration was decided on the basis of the consent terns dated
       21.11.2015 but approval of the Charity Commissioner was to be sought.
       It is now agreed that the parties are bound by the said terms. There will be
       no modification in the consent terms. The transfer be finalized without any
       the additional conditions contained in the Application dated 28.04.2015
       filed before the Charity Commissioner, Maharashtra State, Mumbai, which
       stands withdrawn.
       Let the Lease Deed be now executed within a period of three months from
       today.
       The special leave petition is, accordingly, disposed of.
       Pending application(s), if any, shall also stand disposed of.
                                                          (Emphasis supplied)

17)    For sake of repetition, I would like to make it clear that the

Supreme Court referred to the application dated 28 April 2015 filed

before the Charity Commissioner, Mumbai, which was Misc.

Application No. 238 of 2015. It appears that, for some reason best

known to the Trust, the Trust chose to stress the fact that                  Misc.

Application No. 238 of 2015 filed before the Charity Commissioner

was unconditionally withdrawn by them by way of pursis dated 3
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November 2015 and the same was disposed of by the Charity

Commissioner by the order dated 4 November 2015.

18)     I had pertinently put up a question to learned advocate Mr.

Balsara appearing for the Trust, as to why the fact about withdrawal

of Misc. Application No. 238 of 2015 on 3 November 2015 was not

disclosed to the arbitrator who passed the consent award, and to the

housing society. As there was no satisfactory answer from learned

advocate appearing for the Trust, I further enquired whether such

non-disclosure was a mere mistake or whether it amounted to fraud

committed by the Trustees of the trust on the housing society and on

the Court. Learned counsel replied that he would not be able to

answer to the said question offhand.

18.1)     Mr. Balsara, learned counsel appearing on behalf of the Trust,

submitted that the Supreme Court was fully aware about the

execution of the consent terms and the draft lease annexed to the

consent terms. He further submitted that, since the parties are bound

by the consent terms and the application before the Charity

Commissioner was withdrawn, the transfer ought to have been

finalized, which means condition what has been specified in the

consent terms.

19)     According to me, there is no merit in Mr. Balsara’s submission,
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as the order of Supreme Court is clear and unequivocal and there

cannot be any other interpretation of Supreme Court’s order dated 27

March 2018.

20)    Both the parties have filed execution application in the year

2018 seeking execution of the lease deed. However, there is a dispute

arisen between them about the clauses of the lease deed and in

particular whether there should be additional clauses in the lease deed

from the draft which was agreed initially.

20.1) In my view, there cannot be any additional clauses, being added

to the draft Lease Agreement, as the Trust had sought to

amend/modify the order dated 18 May 1999 passed by the Charity

Commissioner, by adding few more clauses in the lease deed

prominent of which was clause which made mandatory before sale of

any flat, prior approval or NOC from the trust to be obtained.

20.2) The said Misc. Application No. 238 of 2015 was withdrawn,

only after the Charity Commissioner had raised an objection about

maintainability of such application before it. The said fact was not

brought to the notice of the sole arbitrator who passed the consent

award neither the members of Housing Society were put to notice that

the Misc. Application preferred before the Charity Commissioner was

withdrawn.
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20.3) After Supreme Court making it clear in its order dated

27/3/2018, according to me, there cannot be any additional clauses

being entered into the said lease agreement.

20.4) From records, it also appears that even earlier Bench

(Coram :Abhay Ahuja, J.) by order dated 4 December 2024, had

already observed that the parties were supposed to enter into the lease

agreement as per direction of the Supreme Court. The Supreme Court

in its order dated 27 March 2018, had clearly mentioned that - “The

transfer be finalized without any reference to the additional conditions

contained in the Application dated 28.04.2015 filed before the Charity

Commissioner, Maharashtra State, Mumbai, which stands withdrawn.”

20.5) Hence, the facts are quite clear, therefore, the execution

application filed by the housing society needs to be allowed and the

objections raised by the trust, the application preferred by the trust

needs to be rejected. Hence, the following order:-

                                ORDER

(I)    Execution Application No.694/2019 filed by Behramshah Shroff

Building No.1 (Yazad) Co-operative Housing Society Ltd. stands

allowed.

(II)   Notice No. 163/2019, filed under Order XXI, Rule 22 in

Execution Application No. 694/2019 also stand allowed.
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                  (III) Execution Application No.1801/2018 filed by the Trust (The

                  Zoroastrian Radih Society) stands dismissed.

                  (IV) In sequel, the interim applications preferred by the Trust (The

                  Zoroastrian Radih Society) in Execution Application No.1801/2018

                  also stands disposed of, with the society being directed that in case of

                  transfer of flat for the first time, they would be required to pay 10% of

                  the difference between the sale price. This exercise can be done as

                  soon as the lease deed is executed by the trust within a period of eight

                  weeks thereafter.

                                                               [RAJESH S. PATIL, J.]




Signed by: Diksha Rane
Designation: PS To Honourable Judge
Date: 13/02/2026 19:09:11