Suit Against Raymond Ltd & Gautam Singhania : Bombay HC Allows Flatbuyers To Raise Plea That Building Constructed By Raymond Has No Occupancy Certificate

The amendments to the plaint pertain to Raymond's alleged failure to obtain an occupation certificate (OC) even after 50-years, non-execution of a conveyance or lease deed in favour of the plaintiff society, access to the common terrace, restrictions on using the garden.

Justice Anuja Prabhudessai held that the amendments were not malafide or irrelevant and did not cause any prejudice to Singhania. In fact, they were "relevant to decide the controversy between the parties."

The court passed the order on a civil appeal filed by Raymond assailing a City Civil court's order that allowed a host of amendments in a 12-year-old suit by flat purchasers of New Sarnath Co-op. Housing Society Ltd which is situated adjacent to JK House, Singhania's official residence in south Mumbai.

According to the order, Raymond owns 5000 sq yards at Breach Candy. In 1960 the plot was divided into three parts A, B and C. While Plot A was exclusively for Raymond, the plot on which JK house now stands, two buildings were constructed on plot B in 1961 and 1972.

The flat purchasers alleged that the Singhania had constructed certain structures, blocked access and converted the recreational area for their own use. And with "malafide intention" a clause was incorporated in the agreement that the common terrace on Plot B will belong to the company and purchasers will not have any right to it.

Upholding certain amendments, Justice Prabhudessai observed, "It may be mentioned that providing the occupancy certificate to the society and executing deed of conveyance is a statutory duty of the builder under Section 6 and 11 of the MOFA. The breach of statutory obligation creates a continuing wrong which gives continuing cause of action to the society against the builder.Hence, the relief for enforcement of statutory obligation under MOFA can neither be barred by the law of limitation nor capable of monetary evaluation," the court said.

The bench, however, rejected amendments over the calculation and utilisation of FSI and TDR regarding JK House in 2006, as it "introduces a new cause of action and expands the scope of the plaint. "It is well settled that the amendment, which is totally different and changes the fundamental nature and character of the suit cannot be allowed."

Raymond's counsel Shyam Devani instructed by AZB & Partners argued that flat purchasers were claiming that certain clauses in their agreements were void, however, these agreements were in their possession since 1976. The amendments were barred by limitation as 12 years had lapsed since the filing, and in November 2014 the trial had also begun.

On the other hand, advocate AN Narula counsel for flat purchasers submitted that by the proposed amendment, they only wanted "to elaborate the suffering or inconvenience of the members." Moreover, he argued that Raymond's petition was not maintainable.

At the outset, the court dismissed Raymond's arguments regarding limitation on amendments, observing that order VI Rule 17 of CPC, which deals with amendment of pleadings and empowers the court to direct amendments at any stage provided that the amendments are imperative to determine the real question in controversy between the parties. Justice Prabhudessai said that the court wouldn't be barred by the proviso to the section as the trial hadn't begun.

Regarding allegations of conveyance, the original defendants claimed that the flat purchasers refused to become members of the third building's society. The HC said this matter would have to be adjudicated on merits and allowed the amendment.

Also allowing amendments regarding common terrace, they said, "The questions whether the terrace is a common area and the members of the petitioner Society have statutory right to use the same viz-a-viz the issue of validity of the said clauses need adjudication on merits."

Case Title : Raymond Ltd. & Anr v New Sarnath Co-op. Hsg. Soc. Ltd. & Ors.

Citation: 2022 LiveLaw (Bom) 225

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