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Tag: Bombay High Court

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Clove Legal has successfully obtained a landmark order from the Hon’ble Bombay High Court directing MahaRERA to implement structured guidelines governing its hearing procedures and functioning framework.

In Mayur Desai v. State of Maharashtra (Writ Petition (L) No. 11502 of 2025), the Court took cognizance of the procedural inefficiencies and lack of transparency in MahaRERA’s functioning, particularly its continued reliance on virtual-only hearings post-pandemic. Emphasizing that access to justice is a constitutional right, not a technical convenience, the Court issued binding directions to MahaRERA for:

  • Restoration of hybrid hearings (physical + virtual) within 4 (four) weeks;
  • A mechanism for urgent listings and effective execution of orders of MahaRERA;
  • Transparent cause-lists, pronouncement of orders, and grievance redressal processes;
  • Functional and accessible communication channels for litigants and lawyers.

This judgment significantly strengthens procedural equity for homebuyers and stakeholders in the real estate sector. It is a landmark decision that reaffirms the judiciary’s commitment to transparency, efficiency, and inclusive access.

We remain committed to championing transparency, access, and procedural integrity across regulatory and judicial platforms.

Click here for detailed Judgement.

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Bombay High Court reprimands MahaRERA for not holding in-person hearings – Writ Petition filed by Clove Legal on behalf of aggrieved home buyer.

Clove Legal successfully represented a home-buyer in a Writ Petition filed before the Hon’ble Bombay High Court, whereby the Hon’ble Court while considering the common grievances of the home-buyers through our client, directed the Maharashtra Real Estate Regulatory Authority (MahaRERA) to review its Standard Operating Procedures (SOPs) and its Rules and Regulations for conducting effective hearing of the cases before the Authority and speedy disposal of the same.

Prior to Covid 19 pandemic, the hearings before MahaRERA were held physically. During Covid 19, the hearings were being held online to keep the legal system still accessible to the parties. However, while all courts and tribunals resumed to physical hearings or hybrid hearings (both physical and virtual), MahaRERA continued to function virtually. This made it difficult for the advocates and parties to approach the authority for an urgent hearing in the matters. Due to such inaccessibility, our client despite of having filed his Complaint in December 2020 obtained the final order in his favour only in November 2022 (after two years). Thereafter, due to non-compliance of the order by the developer, our client then initiated execution proceedings in January 2023 which were deferred for over a period of more than one (1) year until March 2024, when MahaRERA reserved the matter for final order in execution proceedings. However, no final order issuing a recovery warrant was passed for over a year. Hence, the writ petition was filed before the Bombay High Court, whereby the Hon’ble Court was pleased to direct MahaRERA to dispose of the execution proceedings in a time bound manner and further, directed the authority to suggest guidelines to put its own house in order.

Our team comprised of Dharmesh Kotadia, Senior Partner; Chitrangada Singh, Senior Associate and Ayush Yadav, Associate.

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Bombay High Court Clarifies Interplay between Information Technology Act, 2000 and Indian Penal Code 1860, in Cybercrime Cases

The Hon’ble Bombay High Court in its latest decision dated April 15, 2024, in the case of Awadhesh Kumar Parasnath Pathak Vs State of Maharashtra and Anr. held that while the Information Technology Act, 2000 (“IT Act”) is a special Act for addressing cybercrimes and has an overriding effect, it does not preclude the application of Indian Penal Code, 1860 (“IPC”) in cases where the offences are not adequately addressed under the IT Act.  

The Court deliberated upon whether actions covered under Section 43 read with Section 66 of the IT Act (Penalty and compensation for damage to computer, computer system, etc.) constitute fraudulent or dishonest behaviour. The Court emphasized that these provisions do not encompass situations where permission to use the computer system is obtained through deception from the custodian of a computer system and further observed that while the IT Act addresses dishonest and fraudulent acts, it lacks explicit provisions regarding deceit which is a crucial element in establishing offences under the IPC.

The case in question before the Court involved an Accused, who was formerly employed as a Technical Manager at Cosmo Films Limited, company. The allegations arose regarding the unauthorized use and dissemination of sensitive business information stored on a company-issued laptop. The Accused faced charges under Sections 408 (criminal breach of trust) and 420 (cheating) of the IPC, along with Sections 43(b), 66, and 72 of the IT Act. The Accused approached the court claiming that the sections under IPC could not be invoked as those elements were covered in the sections under the IT Act and therefore, being charged under both the statutes would amount to double jeopardy.   

The court rejected the said contention of the Accused and highlighted that, certain aspects of offences such as cheating and criminal breach of trust as defined by IPC are not entirely covered by the IT Act. Therefore, the IPC provisions can still be invoked even if any element of an offence under the IPC is absent from an act that is punishable under the IT Act. Thus, the court held that the provisions of IPC would still apply if any component necessary for an offence under IPC is missing from the conduct that is an offence under the IT Act.

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Bombay High Court Rules that an Authorised Signatory of a Cheque Issued on Behalf of a “Company”, is Not a “Drawer” in terms of Section 143A of the NI Act and Cannot be Directed to Pay Interim Compensation

The Hon’ble Bombay High Court in the recent case of Lyka Labs Limited & Anr. vs. The State of Maharashtra & Anr. & connected matters was faced with common questions of law arising under the Negotiable Instruments Act, 1881 (“NI Act”), pursuant to a batch of matters listed before it. The questions of law posed before the court for decision were as follows:

i)  Whether the signatory of the cheque, authorized by the “Company”, is the “drawer” and whether such signatory could be directed to pay interim compensation in terms of section 143A of the NI Act leaving aside the company?

ii) Whether deposit of a minimum sum of 20% of the fine or compensation is necessary under Section 148 of NI Act in an appeal filed by persons other than “drawer” against the conviction and sentence under section 138 of the NI Act?

In view of the facts and circumstances discussed, and issues raised in the batch of matters before it, the Hon’ble High Court relied upon various judgements of the Hon’ble Supreme Court and thereby, held the following in its judgement pronounced on March 8, 2023:

a)  That the legislature’s purpose was to provide interim relief to the drawee by directing the “drawer” to pay temporary compensation in terms of section 143A of the NI Act. This compensation liability was specifically fastened on the cheque’s “drawer or issuer” excluding anyone else from being made liable to pay interim compensation, vicariously or severally. Therefore, the words of the enactment are clearly intended to be limited to “drawers”, be they natural persons or companies.

b) Under company law, the company’s liability is generally not transferred onto the directors. As per the Companies Act 2013, a company has a separate legal identity. The directors and members of the company act as representatives and mutually exist in a fiduciary relationship. Directors serve as an agent and hence are not liable personally for the acts and actions of the company. However, a director can be held personally responsible if he acts beyond his powers and duties. It is so done by lifting the corporate veil.

c) The relief under section 143A is an interim immediate relief which by literal interpretation of the provision has only been fastened to the drawer/issuer of the cheque. The same can be granted immediately after the stage of recording plea of the Accused by the magistrate. In case the provision is understood to include an ‘authorised signatory of the company’ being a defaulter in terms of section 141 of the NI Act, then such an enquiry as regards breach of fiduciary duty or instance of fraud would defeat the purpose of granting such immediate interim compensation to obviate delay in disposal of cheque dishonour case, which was not contemplated by the legislature while inserting section 143A. Therefore, the power to direct interim compensation cannot be traced under section 141 in addition to section 143(A) of the NI Act.

d) Every person signing a cheque on behalf of the company on whose account a cheque is drawn does not become a “drawer” of the cheque. Such a signatory is only a person duly authorized to sign the cheque on behalf of the company/drawer of the cheque.

e) Further, having held that the expression “drawer” in section 143A does not include the ‘authorized signatory of a company’, the amended section 148 also needs to be interpreted accordingly. The plain language of section 148 makes it clear that the Appellate Court is granted the power to direct deposit of a minimum sum of 20% of the fine or compensation awarded by the Trial Court “in an appeal by the drawer” only and no other person.

f) However, in an appeal filed by persons other than a “drawer”, the Appellate Court can exercise power under section 389 of Code of Criminal Procedure to direct deposit of amount in an appeal filed under section 148 of NI Act against conviction under section 138 of the NI Act, while considering the application for suspension of conviction or sentence.

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No Stamp Duty Payable Towards Permanent Alternate Accommodation Agreements between Developer and Society Members, the Same Being Agreements Incidental to Execution of Development Agreement as per Section 4(1) of the Maharashtra Stamp Act: Bombay High Court

In a recent decision of the Hon’ble Division Bench compromising of Hon’ble Justice Shri. G. S. Patel and Smt. Neela Gokhale, in the case of Adityaraj Builders v. State of Maharashtra & Ors. & Group Matters, wherein several Petitions were decided on a common question of law under the Maharashtra Stamp Act 1958, relating to Stamp Duty sought to be levied on Permanent Alternate Accommodation Agreements (“PAAA”).

  • The cause of action arose pursuant to the following impugned circulars:
  • Circular dated 4th June 2013 by the State Government stating that stamp duty would be chargeable on PAAAs, and the value would be computed on the basis of the costs of construction of the flats and the market value of the additional area, if any.
  • Circular dated 7th November 2013 issued by the Chief Controlling Revenue Authority of the Maharashtra State with guidelines for charging stamp duty on PAAAs, that would be computed on the costs of construction of the retained area. Where fungible FSI was used, stamp duty would be computed on the construction cost and the premium paid on the fungible area.
  • Circular dated 23rd June 2015 issued by the Chief Controlling Revenue Authority states that if the development agreement is executed only between the Co-operative Housing Society and Developer, the document to transfer the premises/ tenements, which is for the personal benefit of the original member of the housing society, is not to be construed as an incidental agreement pursuant to the original development agreement (“DA”) and shall be treated as an independent agreement. The impugned circular contemplates that any PAAAs between the Society members and the developer is different from the DA between the Society and the developer.
  • Circular dated 30th March 2017, issued by the Chief Controlling Revenue Authority as a clarificatory circular which purports to specify criteria that must be complied with and goes on to specify that only on such compliance PAAAs with individual society members would be treated as documents incidental to the DA, attracting the application of Section 4 of the Maharashtra Stamp Act. This ‘clarificatory’ circular purports to say that compulsorily the individual society members must join in the execution of the original DA, i.e., that every single society member must countersign the DA and that the DA is thus to be multipartite.
  • To resolve the issues arisen pursuant to the above impugned circulars, the Hon’ble Bench discussed the provisions of Maharashtra  Stamp Act (“Act”), particularly section 4(1) which provides for payment of stamp duty only on the principal instrument as prescribed in Schedule I of the Act, where in the case of any conveyance, development agreement, lease, mortgage or settlement, several instruments are employed for completing the transaction.
  • In view thereof, the Hon’ble Bench observed that for the purposes of Section 4(1), all the PAAA executed with each member of the society may be physically included in a DA. If that be done, then there is only one Agreement covering the whole of the DA and charging of stamp duty by the stamp authority simply would not arise because there is no method by which the stamp authority could levy stamp on every annexure to a DA.
  • The Hon’ble Bench set aside the impugned circular dated 30th March 2017 requiring every member to also sign the DA, for the reasons that firstly, it is entirely beyond the jurisdictional remit of the revenue authorities to dictate what form the instrument must take and that a revenue authority must take the instrument as it finds. Secondly, there is no concept in law of a society not representing the interests of all its members while entering into a DA and the requirement by the stamp office that unless a member personally signs the DA, Section 4(1) of the Act would not attract is erroneous. Further, the circular dated 23rd June 2015 that purports to exclude PAAAs from Section 4(1) was held ultra vires the Stamp Act and was quashed.
  • The Bench clarified that in situations regardless of how the redevelopment takes place, from the perspective of a society member, when she or he is getting:

(a) a home in replacement of a home;

(b) a larger home in replacement of a smaller home; and

(c) the option of purchasing additional area for the replacement home.

It is only in the third case i.e., (c) that stamp duty becomes payable and not otherwise as in the former two cases of (a) & (b).

The Bench thus, finally summarised its finding as follows:

(a) A DA between a cooperative housing society and a developer for development of the society’s property (land, building, apartments, flats, garages, godowns, galas) requires to be stamped.

(b) The DA need not be signed by individual members of the society and the same is optional. Even if individual members do not sign, the DA controls the re-development and the rights of society members.

(c) A PAAA between a developer and an individual society member does not require to be signed on behalf of the society and the same is also optional.

(d) Once the DA is stamped, the PAAA cannot be separately assessed to stamp beyond Rs. 100 requirement of Section 4(1) if it relates to and only to rebuild or reconstruct premises in lieu of the old premises used/occupied by the member, and even if the PAAA includes additional area available free to the member because it is not a purchase or a transfer but is in lieu of the member’s old premises. The stamp on the DA includes the reconstruction of every unit in the society building and the same cannot be levied twice.

(e) To the extent that the PAAA is limited to rebuilding of the premises without the actual purchase for consideration of any additional area, the PAAA is an incidental document within the meaning of Section 4(1) of the Stamp Act.

(f) A PAAA between a developer and a society member is to be additionally stamped only to the extent that it provides for the purchase by the member for actual stated consideration and a purchase price of additional area over and above any area that is made available to the member in lieu of the earlier premises.

(h) The provision or stipulation for assessing stamp duty on the PAAA on the cost of construction of the new premises in lieu of the old premises was held unsustainable.

Most importantly, the aforesaid findings were ordered as not limited to the facts of the cases before the bench but to be applicable as a rule in general.