| The dispute raised in this case
centres around a flat belonging to the Maharastra Housing
and Area Development Authority, Mumbai (for short, MHADA).
MHADA had granted lease to the said flat to one N.H.Krishnan
who later transferred his right, title and interest thereunder
to another person. By agreement for transfer dt.21/11/1989
the right, title and interest of the flat was purchased by
the appellant for a consideration of Rs.3,45,000/-. The appellant
also became a Member of the society of the flat-owners of
the building called Melody Cooperative Housing Society of
which the flat in question is a part. The appellant had applied
to MHADA for regularisation of allotment of the flat in his
name. In December, 1992 on a routine inspection of the premises
the Estate Manager of MHADA reported that the property was
in the occupation of the appellant and his family members
including Respondent 3, though it stood in the name of N.H.Krishnan,
and therefore, they were unauthorised occupants of the flat.
In pursuance of the order dt.23/4/1997 MHADA evicted all the
unauthorised occupants from the flat and sealed the same.
The Appellant submitted his claim in respect of the property
to MHADA. After examining the relevant documents MHADA regularised
the allotment of flat in favour of the appellant.
On 19/9/1998 Respondent 3 filed Writ Petition No.5072 of
1998 before the Bombay High Court challenging the order of
eviction passed by MHADA under Section 66(1) of the Maharashtra
Housing and Development Act, 1966 against him. It was the
case of Respondent 3 (writ petitioner) that he had also contributed
a sum of Rs.1,25,000/- for the purpose of purchase of the
flat along with his brother, the appellant herein, though
the documents stood in the name of the latter. A Division
Bench of the High Court disposed of the writ petition by order
dated 7/10/1998 directing, inter alia, that the competent
authority of MHADA would re-examine the claims of the Respondent
3 as well as the appellant herein and pass a speaking order
in accordance with the law. MHADA passed order dated 18/12/1998
rejecting the claim of the Respondent 3 and confirming the
allotment/regularisation of the flat in the name of the appellant.
Respondents 3 and 4 challenged the order dated 18/12/1998
of MHADA by filing a writ petition under Articles 226 and
227 of the Constitution and prayed for quashing the order
of the appellate authority dated 23/4/1997 and the eviction
order dated 18/12/1998 and to restore to them possession of
the flat in question. The High Court appointed a Conciliator
with regard to the dispute between the parties including the
issue of title, regularisation, possession and compensation,
if any. The Conciliator appointed by the High Court, Justice
H.Suresh (Retd.) held meetings with the parties and their
counsel. After hearing the submissions of both the parties,
the Conciliator submitted his report to the High Court and
gave his proposal for settlement of the dispute but the proposal
submitted by the Conciliator was not signed by the parties
nor were its terms disclosed to the parties by the Conciliator.
The Conciliator sent his report in a sealed cover to the High
Court directly.
The appellant filed an objection against the report of the
Conciliator setting out various grounds of challenge. A Division
Bench of the High Court summarily rejected the objections
raised against the Conciliator’s report stating that
the parties had agreed to undertake to the court that the
decision of the Conciliator would be final and binding on
them. The Division Bench was of the opinion that when the
Conciliator was appointed for taking a decision, with the
consent of the parties, no amount of objections raised in
the form of application can be entertained at all.
The Conciliation proceedings are dealt with in Part III of
the Act of 1996. Section 73(3) of the Act of 1996 states that
“when the parties sign the settlement agreement, it
shall be final and binding on the parties and persons claiming
under them respectively”. Under the Act of 1996, the
Conciliator is required to observe the procedure laid down
in Section 73 for drawing up a settlement agreement between
the parties to the dispute. He should formulate the terms
of settlement and make it over to the parties for their observations
and then draw up a settlement in the light of observations
made by the parties to the terms formulated by him. The settlement
takes shape only when the parties draw up the settlement agreement
or request the Conciliator to prepare the same and affix their
signatures to it. The Conciliation proceedings come to an
end only when the settlement agreement is signed by the parties
and such a settlement agreement has the status and effect
of legal sanctity of arbitral award under Section 74. The
Conciliator in the present case did not follow the prescribed
procedure laid down in Section 73 and sent his report to the
High Court without obtaining signatures of the parties to
the proposal for the settlement of the dispute. The Settlement
agreement filed by the Conciliator before the High Court and
the order passed by the Division Bench of the Bombay High
Court were set aside and the appeal was allowed.
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