SCBA Group Housing Society Dispute- Supreme Courts Asks SCBA President To Resolve Within.

The Supreme Court on Tuesday urged Senior Advocate and President, SCBA, Mr. Vikas Singh, to use his office to resolve the dispute that has broken out openly within the Bar Association in connection with the construction and repair of residential flats at NOIDA, on a cooperative model, by its members.

On Monday, the Miscellaneous Application filed by the Supreme Towers Apartment Owners Association (STAOA), through its President, to allow her to use the services of the DTU (Delhi Technical University) as Supervisory Agency to oversee the repair works in Supreme Towers, was listed before the bench of Justices D. Y. Chandrachud and M. R. Shah.

Claiming that the President of the apartment association has been removed by the majority opinion of the Board of Management (BOM) of the STAOA, an application has also been moved by the Supreme Court Bar Association Multi State Cooperative Group Housing Society to allow it to enter into agreement with IIT, Delhi for supervision of repair works. The Secretary, STAOA has also filed a reply on behalf of the Association to the President's application . The reply backs the stand of the SCBA Housing Society against the appointment of the DTU as the supervising agency, which, as claimed by the Secretary, does not have the confidence of the majority of the BOM. It is urged that the BOM had resolved to remove the President. It is prayed that the Court allow IIT, Delhi to be so appointed "in the interest of the STAOA members".

Mr. Singh represents the SCBA Multi State Co- operative Group Housing Society and the STAOA, through its Secretary, in the matter.

On Tuesday, when Mr. Singh was appearing before the bench in another case, Justice Chandrachud put to him, "Please use your good offices to sort out this matter. You are all members of the bar, you are one bar association. Yesterday, the lawyers who appeared before us seemed ready to argue! Why must this Court have to decide something like this? Please use your good offices to resolve issues amicably"

The SCBA had created a cooperative group housing society with the objective of procuring land and building houses for its members. The project, which is the subject matter of this dispute, is in sector 99, Noida. A contract had been entered into with M/S Purvanchal Constructions for the development of the residential project. In 2015, the possession was handed over, but the construction was found to be faulty and of very poor quality.

While the SCBA Multi-state Cooperative Group Housing Society initiated arbitral proceedings against the contractor, some members of the STAOA also filed consumer complaints against the contractor before the NCRC in a representative capacity.

To examine the state of construction and to advice on the methodology for repairs/retrofitting, the consultancy service of IIT Roorkee was engaged by the housing society .

The proceedings which were initiated before the Supreme Court under Article 136 of the Constitution arose from the consumer complaint instituted in the NCDRC. Aggrieved by an interim order of the Commission, the appellants had approached the Supreme Court last year. A suggestion was made before the Court that if mediation were to take place, the entire dispute would possibly be resolved and would be preferable to the members of the co-operative housing society being involved in a tardy litigation. Following the order of the Court, an attempt has been made to resolve the dispute between the contractor and the members of the STAOA.

"That has now borne fruit", noted the Supreme Court, in its order of July 27, 2020, recording that a Memorandum of Understanding (MOU) has been arrived at between the parties, under which the contractor has agreed to carry out repairs to the Supreme Tower Complex in accordance with the recommendations and specifications contained in a Survey Report dated 20 March 2020 of IIT Roorkee and that the parties have agreed that the repairs would be carried out under the supervision of IIT Roorkee or any other expert agency that may be nominated. "The MOU shall constitute a full and final settlement of the disputes between STAOA ( including its members) and the contractor...The principal dispute relates to alleged defects in the construction of the building of STAOA. This is now settled in terms of the MOU. We accept the MOU and render finality to the dispute between the Association and the contractor...In the event that IIT Roorkee is unable to carry out the work of supervision as envisaged in clause (2) of the MOU, it has been agreed that the work shall be entrusted to National Buildings Construction Corporation Limited or IIT Delhi, as may be agreed between the STAOA and the contractor", the bench headed by Justice Chandrachud had said. The bench had even directed the closure of the arbitral proceedings and the disposal of the NCDRC matter.

In the Miscellaneous Application filed by the STAOA President in the name of the Association, she states that the aforesaid MOU contains a clause to the effect that the repairs would be carried out under the supervision of IIT Roorkee or any other agency as agreed between the parties, and that it was only on the request of the parties that the court had included the names of NBCC and IIT Delhi and that the whole intent behind it was to make these agencies agree for the task if IIT Roorkee refuses. She avers that one after the other, IIT Roorkee, IIT Delhi and NBCC all refused orally and finally in writing to supervise the repairs, that both IITs told that that they only have faculties and students and no mechanism at their disposal to supervise the repairs. "IIT Delhi agreed only to be an advisory but did not want to take supervision or consultancy. Even for advisory services, IIT Delhi first asked for 42 lakhs plus GST as charges. Soon it backtracked and asked Rs.30 lakhs plus GST for it self and an unspecified amount for a private PMC. It also refused to enter into a tripartite agreement with the STAOA and insisted on its own printed pro forma which was not conducive to the STAOA. IIT Delhi in December 2020 took a turn again, specifying its advisory fee at 1.2 crores plus a private PMC for 12 towers, only before finally refusing to undertake any job", it is stated.

The President avers that IIT Roorkee, that has conducted the structural survey of Supreme Towers, had given a detailed report about the testing to be conducted and methodology of repairs to be used, and has already agreed to give all advisory on its report without any further payment. Thus, under the overall advisory by the IIT Roorkee, only site supervision was needed. "The then-President contacted many government agencies like CBRI Roorkee, TCIL and Cement Research Institute for site supervision but unfortunately none was ready to do. In the circumstances the DTO was approached for the task of supervision of repair work. And the Vice Chancellor of the DTU agreed to do it pro bono on a bare minimum expenses of total six lakhs", it is advanced.

She continues to contend that after the STAOA elections were held in October, 2020 (when she became President) and the new BOM took over, the BOM initially stopped payment of DTU cheque to re-issue it vide a new cheque, due to change in signatories of STAOA, but the same was never issued despite a written request by the President. "The new cheques were never issued and it is apparent that the whole attempt was made by the Secretary. STAOA and team on the fragile pretext that the DTU's name did not find mention in the order dated July 27, 2020. The records clearly show that in making this arrangement, then BOM complied with the orders of this court, in as much as Your Lordships directed the engagement of IIT Roorkee as the first preference. The records show that IIT Roorkee was already acting as advisory and was already engaged as such. There is also provision for verification of repair work done by IIT Roorkee at any time during or upon the completion of the repairs. Thus, for advisory and overall overseeing the project, no other agency was needed. In so far as site supervision is concerned, none of the three was ready", it is stated .

The President further submits that on a Miscellaneous Application moved by the STAOA Secretary earlier this year, the Court had asked its Registrar to call for a response from IIT, Delhi if it was ready to take up the job. "The IIT, Delhi replied in the negative, expressing its inability to take up the supervisory work, which has been recorded in Your Lordship's order of February 12, 2021", it is advanced.

It is urged that while the mandate of the Supreme Court's order of July 27, 2020 is that the repairs must go under the supervision of expert agency, the repairs have already gone with no supervision at all continuously for more than four months as the arrangement has been disturbed maliciously and DTU was virtually disengaged. Upon non-payment of two months' salaries to the field staff and stoppage of cheque of DTU, both of them stopped working on the site since November 20, 2020. "The STAOA has already received the amount of money to be disbursed to the DTO and the field staff and there was no legitimate reason for withholding the payment. The entire strength of 675 members is being held to ransom by the few who are insisting for return back of this money to the contractor. Since November 20, 2020, the repairs in the ST complex are going on without any testing of structure in materials and without any supervision benefiting", it is stated.

The President has claimed that the STAOA Secretary (who has filed the reply to the instant Application by the President, claiming the reply to be the majority opinion of the STAOA Board) has been expelled from the BOM.

"Without any authority in provision in the bylaws, the Secretary, now expelled, has issued a letter purporting to suspend the functioning of the President. The letter is ex-facie void", it is averred.

The SCBAMSCGHS has filed an IA in the M. A. , narrating that on 4.9.2020, IIT Delhi had given its consent to supervise repair works of STAOA for Rs.30 lakh plus GST, but an agreement dated 17.9.2020 was executed by few members of erstwhile Board of Management of STAOA with the Delhi Technical University for supervision of repair work of STAOA in gross violation of orders of this Court dated 27.7.2020 and without any Board resolution. "It is pertinent to mention here that this issue became a serious matter of concern amongst members of STAOA and all the candidates (including present President), except erstwhile President of STAOA, fought elections on this issue only with promise to the members that after coming into power they will revoke agreement dated 17.9.2020 and will bring IIT Delhi or NBCC for supervision of repair work", it is submitted.

The Application continues to aver that the result of election was declared by Election Committee on 10.10.2020, in which the lady advocate who has filed the present M. A. was elected as President. "Immediately after taking over charge by new Board of Management of STAOA, the Board by majority terminated agreement dated 17.9.2020 with DTU, which was informed by the President to the Contractor, however in the same letter, the President allowed the Contractor to continue repair work without any supervising agency but with the help of his own engineers", it is said.

It is stated that subsequently, an application for seeking directions from the Supreme Court to direct IIT Delhi to conduct supervision of the repair work was filed by Board of Management of STAOA on 19.1.2021 under signature of the newly-elected Secretary on the strength of majority. "Since President STAOA didn't want to get the internal election (to the remaining posts of the BOM), and didn't want to rope in IIT Delhi, she immediately reacted in annoyance and circulated a fake mail dated 21.1.2021 to all the members of STAOA calling Special Meeting (GBM) on 23.1.2021 by falsely alleging therein that she had received requisition of 50 members of STAOA to call the said Special Meeting, which is prerequisite under Bye Law. Being shocked and surprised from the above mail, several members of STAOA demanded from President to show the alleged requisition signed by 50 members, but she has never shown that requisition to any member. The alleged illegal Special meeting was conducted by President on 24.1.2021 in lawn of STAOA, in which hardly 30-32 persons including non members were present. Later, the President issued another notice dated 27.1.2021 for Special Meeting dated 31.1.2021 under her sole signatures, which was again opposed by several members of STAOA being illegal and in violation of Bye Laws. Thereafter the Board of Management in its meeting dated 28.1.2021 removed the President by majority votes and ceased her powers. The removed President filed her separate IA dated 30.1.2021 in the aforesaid application with intention to oppose appointment of IIT Delhi and to keep DTU for repair work. And the removed President again circulated minutes of Special Meeting dated 31.1.2021 under her sole signatures in which she claimed to remove 5 elected members and appointed 5 new members without any election", it is contended.

The Application states that on request of the Court, the IIT Delhi had refused to take on work of supervision of STAOA, as recorded in the order of February 12. "Since the repair work was being done unrestricted and without any supervision by the contractor in full speed, the applicant SCBAMSCGH Society, being parental body of STAOA thought its responsibility and came forward for the welfare of residents of Noida Project at Supreme Towers in Sector 99, Noida, who are also members of the applicant SCBAMSCGH Society. The applicant SCBAMSCGH Society started communication from IIT Delhi and ultimately IIT Delhi gave its consent to supervise the repair work vide letter dated 24.2.2021 for Rs.30 lakh plus GST, however on the advice of IIT Delhi the applicant SCBAMSCGH Society approached 5-6 agencies for PMC, out of which WAPCOS Ltd., which is a Public Sector enterprise principally agreed. They have inspected the site and the discussions are in final stage and very soon the applicant SCBAMSCGH Society will finalize the terms with WAPCOS also and accordingly final agreement will be done with IIT Delhi and WAPCOS Ltd", it is submitted.

The latest application filed by the Multi-state Cooperative Group Housing Society avers that due to internal clashes of egos of elected Board members of STAOA, the position has come to the stage that the President, STAOA is not ready to sign any cheque which is signed by elected treasurer because the President is adamant to get recognition for an unelected member, a lady advocate, as treasurer on the basis of illegal General Business Meetings which were conducted by the President in blatant violation of Bye Laws of STAOA. It is asserted that there are several litigations, both Civil and criminal, filed by the two groups of the Board of Management of STAOA before different Courts, authorities and police. It is claimed that the infight of the BOM of STAOA was so grave that even the Bank stopped payment even for essential services like security, sanitation, water, electricity etc. in the absence of joint signatures of the President and the Treasurer.

It is urged that it is necessary in the interest of justice that the applicant SCBAMSCGH Society be allowed to enter agreement with IIT Delhi and WAPCOS Ltd. for supervision of repair works of Supreme Towers and the contractor be directed to pay their expenses as per settlement and the removed President be stopped to interfere in any manner in the affairs of STAOA and Banks be directed to allow to operate the accounts of STAOA according to Board resolutions passed by majority and not to stop payments of essential services such as water, electricity, diesel, security and sanitation etc.

The reply filed through the Secretary, which is said to be majority opinion of the BOM, avers that the Application filed by the President is not maintainable as it is without any authority, without any board resolution. It is urged that the MA filed by the applicant has become infructuous and is liable to be dismissed in view of the application filed by the Supreme Court Multi State Cooperative Group Housing Society. "It is in the larger interest of the STAOA and its members that IIT Delhi be appointed for the supervision work of the repairs/retrofitting of the building/structure of the Supreme Towers with WAPCOS as the PMC", it is urged.

The reply continues to narrate, "In utter disregard of the order of the Supreme Court of July 27, 2020, the President of the then-BOM, without getting any resolution passed or even consulting and taking into confidence the majority of the members of the BOM, proceeded to appoint the DTU as the supervising agency…After the present BOM was constituted after the election in October 2020, the new executive committee took up the matter of repair in view of several complaints of the residents. A legal committee was constituted by the President, who is the applicant here, to look into the matter and submit the report. The committee after visiting the spot found that the repair work was not being done properly and not at all as per the recommendations suggested in the report of IIT Roorkee and approved by the Supreme Court. The committee also found that the supervision by the DTO was poor"

It is submitted that in view of the repair work not being done as per the recommendations and the lack of proper supervision by the DTU, the present executive committee stopped the payment of a cheque amount of Rs.5,90,000.

Further, it is advanced that after due deliberation and consideration, the executive committee of the present BOM decided to discontinue with the DTO as the supervision agency and, by a majority of 9:3 by a resolution in November, 2020, agreed to return the money to the contractor. "By the same resolution, it was also decided by the majority to take steps to engage IIT Delhi", it is said.

"Though the BOM by a clear majority resolution decided to discontinue the services of the DTU, the President, disregarding the majority resolution, wrote a letter to the contractor asking him to continue with the repair works under the supervision of his engineers, further mentioning in the letter that the decision taken by the BOM members need approval of the GBM", it is stated.

It is submitted that subsequently, a majority resolution was passed by the BOM for filing the application before the Supreme Court for appointing IIT Delhi as the supervisory agency. This was followed by the actual filing of the application.

"Then, the President through email on January 21, purportedly on requisition of 50 members of the STAOA, circulated a notice for a special meeting on January 24, with the agenda of review of ongoing repair work in terms of the agreement of 17.9.2020 (between the previous BOM and the DTU) and to take corrective measures for the enforcement of the agreement; and for the review the working of the members of the BOM. It is argued that the special meeting called by the President was absolutely illegal per the bye-laws, and despite this, the special meeting took the illegal decision to remove 5 BOM members, including the secretary and the treasurer",it is advanced.

The reply further avers that January 24, 2021 itself, the secretary of the BOM called an emergency meeting to deliberate on the illegal actions of the President and in the said meeting by a majority of 8 BOM members, it was resolved to seize the powers of the President with immediate effect, pending the explanation from her. "However, the President, instead of offering an explanation, called an illegal special meeting on January 31, 2021. In view of the matter, the secretary called a special meeting where it was resolved to remove the President with immediate effect. It was also decided to call a General Body Meeting in the third or fourth week of February to ratify her removal. However, in the next illegal meeting of January 31, 2021, the resolution was passed contrary to the bylaws to expel 5 BOM members, including the secretary and the treasurer", it is advanced.

"All these exercises undertaken by the President in holding the illegal special meetings and taking action against some BOM members were prompted because of the application seeking directions from the Court to allow the engagement of IIT Delhi", it is stated.

"On February 12, 2020 the court was pleased to dispose off the application in view of the IIT Delhi not expressing willingness to undertake the supervision work. While disposing of the application, the court had orally observed that in future if there is something called concrete, an application can be moved. The Supreme Court Multi-state Cooperative Group Housing Society, which is the parent body of STAOA, has now filed an application from which it transpires that the IIT Delhi has agreed to provide consultancy for supervision work of the repair of the building of supreme Towers", it is submitted, reiterating that IIT, Delhi may be allowed by the Court to be engaged in a supervisory capacity.