The Bombay High Court has clarified that the doctrine relating to covenants running with the land does not rest solely on privity of contract between the present parties, and enforceability of such covenant is examined on the basis of the intention of the original parties, the nature of the covenant, and the manner in which the covenant has been preserved and transmitted through the chain of title.
At the same time, in view of the doctrine of election, the Court asserted that a party who accepts a benefit under a deed must adopt the whole contents of that instrument. It is settled principle of law that a person cannot say at one time that the transaction is valid and then turn around and say it is void for the purpose of securing some other advantage.
The Court went on to explain that the initial denial and subsequent acceptance of the restrictive covenant goes to the root of the matter. A party which approaches the Court on an incorrect factual basis and corrects its stand only after being confronted with its own documentary material cannot seek interim relief in equity.
The High Court, therefore, ruled that the mere fact that other buildings in the vicinity have increased their height or have undergone redevelopment cannot, by itself, be a determinative factor for granting interim relief to Plaintiff-Society. Change in neighbourhood or surrounding development does not automatically render a restrictive covenant obsolete or unenforceable.
Whether the doctrine of obsolescence applies and whether the covenant has lost its purpose or materially affects the rights and enjoyment of the Defendant – Society’s land, are issues requiring evidence and detailed examination and can only be adjudicated at trial on issues, added the Court.
A Single Judge Bench of Justice Milind N. Jadhav observed that an express reiteration of the covenant in every subsequent deed is not a sine qua non for its prima facie continuance, particularly when the deeds incorporate earlier documents by specific reference to them.
The Single Judge explained that where the conveyances in favour of both the Plaintiff and the Defendant Cooperative Societies expressly refer to the earlier Indentures and convey the property together with all rights, liberties, easements, advantages and appurtenances, a prima facie inference arises that the stipulations and restrictions contained in the earlier Indentures were intended to bind and benefit all successors-intitle.
The Bench pointed out that once the Indenture of 1972 expressly acknowledges and adopts the binding effect and benefits of the earlier Indenture, it is not open to the Plaintiff – Society to contend that the restrictive covenant did not enure for the benefit of the Defendant – Society merely because the covenant is not in verbatim reproduced in the 1972 Indenture.
Prima facie, the covenant stands preserved and transmitted through the chain of title and continues to bind and benefit the successors-in-title, including the Defendant – Society, added the Bench.
The Bench also opined that the issue of enforceability and identification of the beneficiary is a matter requiring trial. Once the Plaintiff – Society admits that the restrictive covenant runs with its own land, the question as to who is entitled to enforce it cannot be conclusively determined at the interlocutory stage in the Interim Application.
Essentially, a party cannot be permitted, at least at the interim stage, to approbate and reprobate by accepting title under a document while simultaneously disputing a binding condition contained therein, added the Bench.
Thus, the Bench concluded that at this stage, the Plaintiff – Society cannot be permitted to accept the benefit of title while seeking to avoid the conditions attached thereto. The balance of convenience does not lie in permitting construction or redevelopment beyond the height restriction at this stage, as the same would cause irreversible consequences.
Briefly, the Plaintiff, a Co-operative Housing Society, has a case that prior to 1950, Govindram Brothers Private Limited was the owner of certain land, which was sold by them to Seksaria Industries Private Limited. Later, by a registered Agreement / Indenture, Seksaria Industries sold, conveyed and transferred some land to the Plaintiff, upon which a building comprising ground plus three storey was constructed, and since then, Plaintiff is in lawful possession and occupation thereof of the building for more than 60 years and it has deteriorated over a period of time.
In view thereof, Plaintiff resolved to undertake redevelopment of the suit property. As part of redevelopment process, Plaintiff conducted a title search by its Advocate to ascertain and confirm its title to the suit property, pursuant to which it issued Public Notices in three newspapers, inviting claims, demands and objections.
The Defendant Society in response to the Public Notices issued by Plaintiff, on the ground of being a beneficiary of certain stipulations, agreements and restrictive covenants qua the suit property. Upon receipt of legal notice, the Plaintiff called upon the Defendant to provide the restrictive covenant. In the interregnum, Plaintiff issued advertisement inviting tenders for redevelopment of the suit property, and received offers from reputed Developers, however all such proposals were based on utilization of the maximum permissible development potential of the suit property which involved construction exceeding height of 30 feet.
According to Plaintiff, Defendant by issuing the Public Notice, created a roadblock in its redevelopment plan and Developers who had expressed interest in redevelopment refrained from proceeding unless a No-Objection Certificate was obtained from Defendant, permitting redevelopment of the suit property exceeding height of 30 feet.
Appearances:
Senior Advocate Virag Tulzapurkar, along with Advocates Amit Mehta, Vedant Rane, and Amit Mehta, for the Applicant / Plaintiff
Senior Advocates Navroz Seervai and Naushad Engineer, along with Advocates Pranav Narsaria and Abha Gokhale, for the Defendant
