Mohamed Rahamathullah vs The President (Special Officer), Cuddalore and Others

K. Kalyanasundaram, J.—These civil revision petitions arise out of the common order dated 20.07.2005 passed by the Co-op. Tribunal Principal District Judge, Cuddalore, in C.M.A. Nos. 33 and 36 of 1998 respectively.

The petitioner in CRP 1720 of 2005, viz., Mohammed Rahamathullah was allotted a plot bearing No. 27, by the Cuddalore Non - Gazetted Government Officers'' Building Society Ltd., on 10.07.1964. The sale deed was cancelled by an order dated 16.09.1992, due to violation of the purchaser in raising construction in the property as per the condition stipulated in the sale deed. The society has taken back possession of the plot on 31.12.1992 and thereafter, allotted the same in favour of Killivalavan, revision petitioner in CRP. No. 2211 of 2005. The said Mohammed Rahamathullah filed a petition before the Deputy Registrar, challenging the cancellation of the allotment order and fresh allotment in favour of Killivalavan. The Deputy Registrar, Cuddalore, confirmed the cancellation of allotment in favour of the Mohammed Rahamathulla and also cancelled the fresh allotment in favour of Killivalavan holding that he was not eligible for such allotment.

Aggrieved against the said order, both the petitioners filed the above appeals before the Tribunal. The Tribunal, concurring with the order of the Deputy Registrar, dismissed the appeals. Aggrieved by the same, the present civil revision petitions are filed.

Heard Mr. C. Prasanna Venkatesh, learned counsel for the petitioner in CRP. NPD. No. 1720 of 2005/second respondent in CRP. NPD. No. 2211 of 2005 and Mr. M.B. Gopalan, learned counsel for the petitioner in CRP. NPD. No. 2211 of 2005/second respondent in CRP. NPD. No. 1720 of 2005 and perused the records.

Mr. C. Prasanna Venkatesh, learned counsel for the petitioner in CRP. NPD. No. 1720 of 2005 submitted that the Special Officer of Cuddalore, N.G.O''s Co-operative Housing Building Society has not taken any steps to provide basic amenities to its members, despite the fact that they have collected money to provide the same, that the respondents have failed to make a prima-facie case in their favour and they have no valid documents or substantial material to substantiate their case. It is further contended that the original allottee has paid the cost of the plot as early as on 01.08.1961 and the property was in his possession for more than 22 years and the sale of the property in favour of Killivalavan on 13.01.1993 even without the knowledge of the petitioner is illegal. There was no clause in the sale deed to resume the plot even though clause (v) is not complied with.

The learned counsel has relied upon the Full Bench Judgment of this Court in W.A. Nos. 783 of 2011 and batch (The Tamil Nadu Housing Board, Rep. by its Managing Director, Anna Salai, Nandanam, Chennai - 600 035 Vs. Mary Rani Immanual and others) and also the judgment of the Full Bench of this Court reported in Latif Estate Line India Ltd. Vs. Mrs. Hadeeja Ammal, The Inspector General of Registration and The Sub Registrar Ambattur, AIR 2011 Mad 66 : (2011) 2 CTC 1 : (2011) 2 RCR(Civil) 531

On the other hand, Mr. M.B. Gopalan, learned counsel for the petitioner in CRP. NPD. No. 2211 of 2005 submitted that bye-laws of the respondent society was not placed before the Court to substantiate the contention that the plot should not be allotted to Killivalavan. The subsequent allottee being employed in a Government Company and having been accepted as a member of the respondent society, the allotment order cannot be cancelled on the only ground, he was not a Government servant. The subsequent allottee is a Non-Gazetted Official of Central Government undertaking and hence, the allotment of plot in his favour is valid and proper. The lower Court ought not to have dismissed the appeal, when the society has failed to place its bye-laws. Especially, when the subsequent allottee raised a contention that there was no restriction with regard to allotment of plots in favour Non-Gazetted Officials in the bye laws of the society.

The learned counsel further submitted that the subsequent allottee after conveyance has obtained approval from the Municipal authorities for putting up construction and having commenced construction, the order of cancellation cannot be sustained. The subsequent allottee is a bonafide purchaser for a valuable consideration and he has also taken possession and commenced construction, as such, the sale in his favour ought not to have been cancelled.

The learned counsel relied on the judgment reported in Robin Chemicals (P) Ltd. Vs. Government of Tamil Nadu and Others, (1996) 2 CTC 261 wherein the writ petition was filed in the year 1986, challenging the cancellation of allotment order in the year 1993. In the mean while, possession was taken back and allotted to a third party. In the above facts, this Court held that the writ petition was liable to be dismissed on the ground of laches.

In Latif Estate Line India Ltd. Vs. Mrs. Hadeeja Ammal, The Inspector General of Registration and The Sub Registrar Ambattur, AIR 2011 Mad 66 : (2011) 2 CTC 1 : (2011) 2 RCR(Civil) 531 wherein the full bench of this Court had an occasion to consider the unilateral cancellation of sale deed without consent of the purchaser or transferee. It has been held as follows;

"59. After giving our anxious consideration on the questions raised in the instant case, we come to the following conclusion:

(i) A Deed of Cancellation of a sale unilaterally executed by the transferor does not create, assign, limit or extinguish any right, title or interest in the property and is of no effect. Such a document does not create any encumbrance in the property already transferred. Hence, such a Deed of Cancellation cannot be accepted for registration.

(ii) Once title to the property is vested in the transferee by the sale of the property, it cannot be divested unto the transferor by execution and registration of a Deed of Cancellation even with the consent of the parties. The proper course would be to re-convey the property by a deed of conveyance by the transferee in favour of the transferor.

(iii) Where a transfer is effected by way of sale with the condition that title will pass on payment of consideration, and such intention is clear from the recital in the deed, then such instrument or sale can be cancelled by a Deed of Cancellation with the consent of both the parties on the ground of non-payment of consideration. The reason is that in such a Sale Deed, admittedly, the title remained with the transferor.

(iv) In other cases, a complete and absolute sale can be cancelled at the instance of the transferor only by taking recourse to the Civil Court by obtaining a decree of cancellation of Sale Deed on the ground inter alia of fraud or any other valid reasons."

The another Full Bench Judgment of this Court reported in Indian Kanoon W.P. No. 783 of 2011 and batch (The Tamil Nadu Housing Board, Rep. by its Managing Director, Anna Salai, Nandanam, Chennai - 600035 Vs. Mary Rani Immanual), has answered the reference as follows:

"18. Thus, after elaborately considering the facts and circumstances of the case, relevant provisions and the case laws, we answer the reference in the following manner. Reference i:

Whether the allottees of flats in a Scheme evolved and implemented by the Housing Board, after execution of sale deeds in their favour by the Housing Board would be entitled to demolish the building and construct a new apartment complex with additional dwelling units and sell such additional dwelling units to third parties without obtaining no objection certificate from the Housing Board.

Answer:

In view of the discussions made above. We hold that the allottees of the flats in a scheme implemented by the Tamil Nadu Housing Board, after execution of the sale deed in their favour by the Tamil Nadu Housing Board are entitled to demolish the existing the superstructure and put up new apartment blocks with additional dwelling units and sell the same to the third parties without obtaining No Objection Certificate from the Tamil Nadu Housing Board, as long as the construction are within the parameters of the rules and regulations of the CMDA. Reference ii:

Whether the restrictive covenants contained in the deed of sale executed by the Housing Board in favour of the allottee would bind the allottee or his successor in interest and by virtue of which whether the allottee shall be required to keep the common areas as such without claiming any exclusive right over the same.

Answer:

The restrictive covenants in the sale deed executed by the Tamil Nadu Housing Board in favour of the allottees will not prevent the allottees or the subsequent purchasers from the allottees, in utilising the common areas, so long as the Society or Association which have been formed by the allottees gives consent for the same and no doubt, that the construction are within the parameters of the rules and regulations of the CMDA Reference iii: Whether the Housing Board is justified in contending that such restrictive covenants are valid and enforceable in the light of the fact that the land on which the apartment complex had been constructed, had been acquired from the public by invoking the provisions of the Land Acquisition Act on the ground that the lands are required for a public purpose.

Answer:

Though, the land have been acquired from the public by invoking the provisions of the Land Acquisition Act, on the ground that the lands are required for public purpose, the public purpose ends with the construction of the Housing Board flats and handing over the same to the allottees after execution of the sale deed. When once the scheme is implemented, the Housing Board looses its rights and the scheme does not come into play. Reference iv:

Whether if all the allottees in an apartment complex join together and decide to pull down the existing structure and raise new construction by increasing the number of dwelling units/flats by putting to use the land area which was initially earmarked as common area and required to be retained as such in the covenants contained in the deed of sale.

Answer:

Some areas have been earmarked for the common enjoyment of the flat owners. The common areas have to be enjoyed in common by the flat owners and if a consensus is arrived at by all the flat owners, they can utilize the common land also to put up construction without No Objection Certificate from the Tamil Nadu Housing Board. The various provisions extracted from the Tamil Nadu Apartment Ownership Act, 1994 will amply establish that if all the allottees who have formed the society or association decides to pull up the existing structure and raise a new construction with additional dwelling units even in the common areas, they can do so, provided such construction is in consonance with the rules and regulations of the CMDA. Reference v:

Whether the allottees by joining together decide to demolish the apartment complex and construct a new apartment complex with larger built up area without increasing the number of dwelling units, would still be required to obtain no objection certificate from the Housing Board.

Answer:

The answer for reference No. 4 could be the answer for this reference also. If there can be an increase in the number of dwelling units/flats, equally new apartment blocks with larger built up area can also be put up, subject to the approval of all the allottees who have joined together to start a society or an association and if it is not in violative of the rules and regulations of the CMDA. Reference vi:

Whether the Housing Board has power to levy charges at the rate of 10% of the market value on the additional floor/eligible FSI and whether such power is traceable to any Act, Rule or Regulation and what is the basis of such levy/demand.

Answer:

As regards this reference, even the learned Advocate General fairly submitted that there is no rules which permit the Tamil Nadu Housing Board to collect 10% of the market value after registration of the sale deed by the Tamil Nadu Housing Board in favour of the allottees. While so, there is no rhyme or reason for the Tamil Nadu Housing Board to insist for 10% of the market value for issuance of No Objection Certificate. When the Tamil Nadu Housing Board need not be approached for obtaining No Objection Certificate for demolition of the existing flats and putting up new construction, the collection of charges at the rate of 10% of the market value on the additional floor area/eligible FSI which is not traceable to any Act or Rules cannot be levied."

In the present case, clause v of the sale deed reads as follows;

"that the member shall construct or cause to be constructed a dwelling house on the plot No. 27 within two years from the date of commencement of title in his favour or within such further time as may be allowed by the society or by the Registrar of Co-operative Societies, Madras."

The contents of the sale deed would reveal that the sale is subject to condition specified therein and if there is any violation, the society has got the right to resume possession.

The main contention of the original allottee is that the first respondent has not taken any steps to provide basic amenities for construction of the building. However, the original allottee has not produced any material to show that he has taken steps requesting the first respondent to provide basic amenities, when there is a specific clause in the sale deed, the original allottee should have raised construction within two years from the date of registration of the sale deed. The first respondent has issued notice to the original allottee and also caused publication in Daily Thanthi before resuming the plot. In view of the facts, I am of the considered view that the judgments relied on Mr. C. Prasanna Venkatesh, do not have any bearing on the facts of this case.

As rightly contended by the learned counsel for the second respondent in CRP. NPD. No. 1720 of 2005, Mr. M.B. Gopalan, the subsequent allottee is a member of the society and he is working in a United Insurance Company, a Government of India undertaking. Undisputedly, the first respondent has not produced the bye-laws of the society to show that the Non-Gazetted official of Central Government undertaking is ineligible for allotment of plot by the co-operative society. It is also not in dispute that after conveyance of the plot to the subsequent allottee, he has obtained approval from the Municipal Authorities for putting up construction and have also raised the building to the level of plinth area. The Co-operative tribunal without seeing the rules/bye laws of of the society approved the findings of the Deputy Registrar cancelling the allotment to the subsequent purchaser stating that the allotment was contrary to the rules. The Co-operative tribunal has further observed in paragraph 10 that the bye-laws of the society was not produced by the first respondent.

Considering the above facts, the order passed in CMA No. 36 of 1998 is set aside and the matter is remanded back to the Co-operative Tribunal for fresh consideration and disposal after giving an opportunity to both the parties. The order passed in C.M.A. No. 33 of 1998 is confirmed.

In the result, C.R.P. No. 1720 of 2005 is dismissed and CRP. (NPD). No. 2211 of 2005 is disposed of accordingly. No costs. Consequently, connected C.M.P. is closed.