Whether Occupier Of Flat is Entitled To Transit Rent For Period Of Dispossession During Redevelopment?

The fact remains that as respondent no. 3 is in possession of the tenement in question and would now be handing over possession of such tenement to the petitioner/society. Hence considering the consistent view taken by this Court in Heritage Lifestyles and Developers Pvt. Ltd. vs. Amar-Villa Co-Operative Housing Society and others MANU/MH/0380/2011 : 2011 (3) Mh.L.J. 865 and in Saikripa Co-operative Housing Society Ltd. V/s. Osho Developers & Ors.1, the party who is dispossessed, would be entitled to the transit rent as it is such party who is put to hardship.{Para 9}

 IN THE HIGH COURT OF BOMBAY

Commercial Arbitration Petition (L.) No. 4301 of 2022

Decided On: 16.03.2022

Maniar Associates LLP  Vs. Vijay Niwas Co-op. Hsg. Soc. Ltd. and Ors.

Hon'ble Judges/Coram:

G.S. Kulkarni, J.

Citation: MANU/MH/1454/2022

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Whether housing society can terminate development contract with developer if he fails to pay transit rent?

  The defaults by the Developer have undoubtedly caused immense prejudice and harm to the members of the Society. The hardship to the members is real and immediate; the so-called hardship to the Developers is notional. When it spent in the

project, this was no altruism or charity. It was an investment toward great profit. Every investment involves risk. The Developer gambled on the project. Receiving monthly rent is not a sop, not a matter of ‘convenience’. It is a matter of survival. Therefore, the non-payment of dues, the delays in project completion, and not paying transit rent for months together speaks to an inherent, and constantly growing, social injustice. It should not be allowed to continue. Therefore, apart from the exceptionally strong prima facie case that the Society makes

out, the ‘balance of convenience’ is decidedly in its favour.

 The society’s members

agree to this upheaval, to move out altogether, to separate from each

other while their new homes are built. The promise to them is that

they will be looked after and provided for while their new homes are

being built. Days, weeks, months and years pass; the members do not

receive the promised rent. Thus begins the downward slide. The

promised homes are delayed, then delayed further, and then delayed

even further. This cuts at the root of the initial entrustment. A

development project for a society demands commitment, fidelity,

respect and honesty. When these begin to disappear, the contractual

relationship collapses. Where there was anticipation and confidence,

there is now just bitterness, disappointment and despair. There is a

breakdown of confidence, and there is only distrust. Loss of faith and

confidence on account of contractual violations and breaches by a

developer are sufficient grounds to find for the society and against the developer. Gopi Gorwani v Ideal Cooperative Housing Society Ltd & Ors, 2013 SCC OnLine Bom 1967. Indeed, I would go a step further. There is urgency for  the society. Therefore, the slightest delay in project completion, unless specifically accepted by the society, and even one single default in payment of transit rent or other dues is actually sufficient to warrant a termination. There is no such thing in these matters as ‘substantial compliance’. That is not the principle of obligations in the realm of private law.

REPORTABLE

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

IN ITS COMMERCIAL DIVISION

COMM ARBITRATION PETITION (L) NO. 74 OF 2020

Rajawadi Arunodaya Co-op Hsg Soc Ltd Vs  Value Projects Pvt Ltd.,

CORAM : G.S.Patel, J.

DATED : 15th March 2021

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