Hyderabad: The Telangana High Court has said that the civil court concerned had “looked into the background facts and conduct” of former president of Jubilee Hills Cooperative House Building Society and NTV founder T. Narendra Chowdary “in incorporating certain clauses (in a development agreement) prejudicial to the interest of the society.”
The division bench comprising Justice P. Naveen Rao and Justice J. Sreenivas Rao was dealing with an appeal filed by Landman Ventures challenging the civil court order which upheld the termination of the company’s development agreement by the present managing committee of the society. The High Court dismissed the appeal filed by the infra company.
Former society president Chowdary and former secretary T. Hanumantha Rao had entered into an agreement with Landman Ventures (previously known as Manthena Infra) for developing prime land adjacent to Chiranjeevi Blood Bank. Claiming that the agreement was in favour of the infra company and detrimental to the interests of the society, the incumbent committee terminated the agreement.
The lower court gave a ruling that the irrevocable clause incorporated in the agreement was in violation of the Indian Contract Act, 1872 and the previous committee erred in entering into the agreement without the statutory permission of the Registrar of Coooperative Societies. It also pointed out that the former secretary Hanumantha Rao went on to become a representative of the company.
As per the development agreement, the copy of which is available with Deccan Chronicle, the society agreed for a 40 per cent share in the project. While the developer was at liberty to sell his 60 per cent share any time, the land owner (society) must offer its share to the developer under the first right of refusal clause. The society could sell land to a third party only if the developer refused to buy it.
Similarly, there was no sale price restriction on the developer, but the society was enjoined to offer its share to the developer at a price not higher than the market value. In written agreements the market value usually refers to the one fixed by the state government for determining the registration fee.
