Judgements beneficial to Societies who have not been given conveyance and increased FSI benefits to society even if conveyance is not given

NMS.2327.2000-S.3323.2000.sxw

mnm

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

NOTICE OF MOTION NO. 2327 OF 2000

IN

SUIT NO. 3323 OF 2000

Ratna Rupal Cooperative

Housing Society Ltd. …Plaintiffs

Vs.

Rupal Builders & Ors. …Defendants

Mr. Anil C. Singh a/w. Mr. Anil D. Yadav

i/b. Amit G. for the Plaintiffs

Mr. Kevic Setalvad a/w. Mr. Diren Shah

i/b. Vimla & Co., for Defendants

CORAM : SMT. ROSHAN DALVI, J.

Date of Reserving for Order: 10th June 2011

Date of Pronouncing the Order: 27th June, 2011

ORDER :

1. The Plaintiff has sued for compliance of the statutory obligations under  the MaharashtraOwnership Flats (Regulations of the Promotion of Construction,Sale, Management and Transfer) Act,

1963 (MOFA) by the Defendants. The specific statutory obligation claimed by the Plaintiff is executing the deed of conveyance in favour of the Plaintiff Society for the plot of land which came to be

developed by the Defendants and under which development the

Plaintiff’s building came to be constructed and the Plaintiff’s

members, as the flat purchasers, came to be put in possession and

occupation of the flats agreed to be purchased by them.

2. The Defendants sought to put up additional construction. They

2 NMS.2327.2000-S.3323.2000.sxw

sought to consume further FSI which came to be available on the

suit plot pursuant to amendment of the Development Control

Regulations, 1991 (DC Rules). The Defendants sought to have the

plans of the Plaintiff’s plot of land amended. The Plaintiff sought to

restrain the Defendants from doing so. So far the amended plans

have not been submitted and further construction has not been put

up.

3. This Notice of Motion is for the mandatory injunction to comply with

the statutory obligation of executing the deed of conveyance as per

Section 11 of MOFA and the prohibitory injunction against the

Defendants entering upon the suit plot and developing it by putting

up additional construction by consuming additional FSI.

4. The members of the Plaintiff as the flat purchasers entered into

agreements with the Defendants in around 1975.

Under Clause 1 of the agreement the Defendants stated that

they were constructing the building on the suit plot “in

accordance with plans approved by the “Municipal Corporation

of GreaterBombay” (MMC). The specifications were kept at

the building site for inspection. The clause stated that the flat

purchasers as the buyers had seen and approved ………. (it is

not stated what was approved).

Under Clause 5 of the said agreement the flat purchasers were

shown not to have right, title or interest over the land or

building until the conveyance was executed.

3 NMS.2327.2000-S.3323.2000.sxw

Under clause 6 of the agreement the flat purchasers would

have no claim except the premises acquired by them, other

amenities in the building such as open space, parking space,

lobbies, staircase, lifts and terrace would remain the property

of the Developers until the property was transferred, which

was subject to the rights of the Developers.

Under Clause 7 of the agreement the Developer had the right

until execution of the conveyance in favour of the Society to

make additions, raise storeys or put additional structures as

permitted by the MMC and competent authority. Such

additional structures were to be their sole properties.

5. It is settled law that agreements between the flat purchasers and the

Developers are required to be in accordance with the statutory

provisions contained in MOFA and the model agreement. The

clauses which give the rights of the parties and agreement of the

kind executed by and between the flat purchasers in the Plaintiff

Society and the Developers cannot be inconsistent with or in

derogation of the statutory provisions under MOFA. Any clause in

any agreement by any flat purchasers or the developer which is

inconsistent with or against the mandate of the statute would be, to

that extent void under Section 23 of the Indian Contract Act being

against the provisions of MOFA and against public policy reflected

therein. The reliance upon them it completely in vain.

4 NMS.2327.2000-S.3323.2000.sxw

6. The statutory provisions are, therefore, to be examined.

(a). Under Section 7 of MOFA the Developer can make no

alterations or additions in the structures in respect of which

the flats were constructed without the consent of the flat

purchasers after plans and specifications were disclosed.

Needless to say that the plans must be sanctioned plans and

not draft plans.

(b). Under Section 7A, which an exception to Section 7, it has

been clarified that the construction of additional structures in a

layout which are constructed and completed in a layout under

a scheme of development with the approval of the Municipality

could be constructed even without the consent of the flat

purchasers.

Needless to state that any additional construction of any

additional structure must be in accordance with plans and

specifications, which are initially sanctioned, shown and

offered for inspection at the time the agreements with the flat

purchasers are executed.

Needless to further mention that no further additional

structures in any further construction under further amended

plans, not already sanctioned at the time of the agreement of

the flat purchasers is executed can be included or permitted to

be constructed by the Developers without the express consent

of the flat purchasers.

5 NMS.2327.2000-S.3323.2000.sxw

(c). Under Section 10 of MOFA upon the minimum number of

persons required to form a Cooperative

Society having

executed agreements and taken flats, the developer is

mandatorily required to apply for registration and get the

Society registered. If the developer fails to do so, the flat

purchasers obtain the right to form their Society.

(d). Under Section 11 of MOFA the Developers are bound to

execute the conveyance of the land and the building in

accordance with the agreement within the statutory period

prescribed under MOFA or Rules made thereunder.

(e). Under Rule 9 of MOFA the prescribed statutory period is 4

months from the date of Registration of the Society.

7. After the execution of the agreements in 1975 the Defendants

constructed the building as per sanctioned plans. The Plaintiff’s

Society came to be registered on25th September 1978though not by

the Defendants. The Defendants were statutorily bound to execute

the conveyance of the land and the building on or before 24th

January, 1979. The Defendants failed in that statutory duty and

hence the suit.

8. The lis between the parties is within a very narrow ambit. The flat

purchasers have admittedly executed agreements for purchase of the

flats in 1975. It is not disputed that the Plaintiff Society is

registered. On the suit plot of land only one building was to be

6 NMS.2327.2000-S.3323.2000.sxw

constructed. No layout plan showing a scheme of development

approved by the MMC is produced. None was shown to the

Plaintiffs. The Plaintiff’s building with the necessary requisite

compulsory area was the only construction on the suit plot of land.

There have admittedly been two other chawls on the plot of land

which have neither been constructed by the Defendants nor were to

be used for any proposed construction under any sanctioned plans or

specifications shown to the Plaintiff. Nothing can, therefore, be

constructed. The plot of land is a simple plot of land on which one

building came to be constructed in about the entire of the plot with

two chawls remaining on either side and one recreational area in

front of the building. Therefore, there can be no mistaking that the

entire plot of land on which the Plaintiff’s building was constructed

had to be conveyed by the Defendants to the Plaintiff. That having

not been done, the suit is filed.

9. Not only that the Defendants failed in their statutory duties, they

sought to put up further construction much later in the day upon the

amendment of the DC rules consequent upon which the suit plot of

land came to have more FSI. The Defendants sought to consume

that FSI on the Plaintiff’s plot of land.

10.The Plaintiff alone had right, title and interest on the entire plot of

land. Nonperformance of the statutory duty and obligation would

not alter the legal position. The Conveyance had to be executed

within the specified period. The conveyance was not executed for a

number of years. The Plaintiff must be taken to have had full title in

the entire plot of land on which their building came to be

7 NMS.2327.2000-S.3323.2000.sxw

constructed.

11.Since the Defendants sought to trespass upon the Plaintiff’s plot of

land the Plaintiffs have sued for the aforesaid prohibitory injunction.

12.Mr. Setalvad on behalf of the Defendants flourished before the Court

what he called the sanctioned plan showing sanction of additional

structures on the suit plot of land.

13.The plan produced by Mr. Setalvad is not a sanctioned plan. It is a

plan prepared by the Architect of the Defendants one Decosta Patil

Turakhiya. It is not shown to be signed as approved by the MMC. It

shows PROPOSED ADDITIONS AND ALTERATIONS TO THE

EXISTING BUILDING…… It shows the Plaintiff’s building in red,

two chawls in purple and pink and access road in brown and the

recreational area in green. It does not even show what kind of

additional construction of any additional structures is proposed to be

put up. It does not show the number of storeys in such additional

structures proposed to be constructed.

14.Passing off such a draft plan as a sanctioned plan would insult the

intelligence of even a lay person.

15.The Defendants were called upon by this Court to produce the plan

showing the layout of the scheme of development and construction

got sanctioned by them for putting up additional construction as per

the plan referred to in paragraph 1 of the agreement between the

parties and which was shown to have been approved by the MMC

8 NMS.2327.2000-S.3323.2000.sxw

and offered for inspection for the Plaintiff’s members. No such plan

has been produced.

16.The Defendants seek to put up additional structures. The Plaintiff

contends that their written consent is required to such construction.

The Defendants dispute that position in law. Since the layout in the

sanctioned plan is not produced, it is not known which additional

structures are even sought to be sanctioned by the MMC for

construction in any layout, which the Defendants would have a right

to construct without the consent of the Plaintiff’s members who are

the flat purchasers.

17.Mr. Setalvad on behalf of the Defendants contended that the

position in law, as reflected from the various proceedings of the

Division Bench of this Court as well as the Supreme Court, is that all

additional structures can be put up at any stage by the Developers

without any written permission or consent of the flat purchasers. To

that end he has relied upon a number of judgments essentially

setting out the repeated history of MOFA, the balance struck

between the rights of the Developers and the flat purchasers and the

absolute prerogative of the Developers to put up additional

structures without any bar. It need hardly be mentioned that the

contention is wholly incorrect. This is apparent from the judgments

relied by Mr. Setalvad.

18.Mr. Setalvad contended that in the case of M/s. Jayantilal

Investments Vs. Madhuvihar Cooperative Housing Society

(2007) 9 SCC 220 the rights and obligations of the Promoter

9 NMS.2327.2000-S.3323.2000.sxw

(Developer of the property) under MOFA came to be considered. In

that case the layout plan showing one building with 7 wings was

sanctioned. This plan was amended in 1986,1987,1989,1992, 1994

and 2001 without any objection from the flat purchasers.

Agreements between the flat purchasers and the Developers were

executed from7th December 1985onwards until 1991 or so. The FSI

of the plot in that suit (as all other plots) came to be included

pursuant to the D.C. Rules, which were framed on25th March 1991.

The Cooperative

Society of flat purchasers was registered on 21st

September 1993.

19.The completed construction was as per the last amended plan dated

29th March 2001. The Court essentially considered the purport and

import of Sections 7 and 7A of MOFA to strike a balance between the

rights of the Developers to make additions and alterations in

structure of the building and the rights of the flat purchasers to form

the Society and obtain the conveyance of the right, title and interest

of the property.

In paragraph 16 of the judgment the Court considered how MOFA

regulated the activities of the Developers. It observed that under

Section 7A the Developer is allowed to construct an additional

building provided the construction forms a part of a scheme or a

project in accordance with the layout plan.

In paragraph 17 of the judgment the Court observed that every

agreement between the Promoter and flat purchasers must comply

with the prescribed Form V.

10 NMS.2327.2000-S.3323.2000.sxw

The Court had to consider whether the layout plan in that case

contemplated construction of one building with 7 wings or 7

independent buildings. It would be based upon that that the right of

the Developer to construct would be seen because the right of the

Developer to construct without further consent of the flat purchasers

would only be as per the layout in the sanctioned plan which are

shown to the flat purchasers at the time of their agreements.

Consequently the matter was remanded to the High Court for

reconsideration.

20.The High Court reconsidered the entire case as also the earlier

judgments in its order dated7th October 2010produced by Mr.

Singh. It considered inter alia that the approval of the local

authority is material to be seen, that if the building was to be put up

as a wing of existing building it could not be constructed without

prior permission of the flat purchasers, whether the plans were

altered and amended after the agreements were entered into with

the flat purchasers and whether the entire project was placed before

the flat purchasers by way of the layout plan approved by the MMC.

The Court sought to balance the rights and obligations of the

Developer and the flat purchasers. The Court saw each of the plans

of 1985, 1987, 1989, 1992, 1994 and 2001.

21.The Court saw that the sanctioned plan of 1985 showed 7 wings

interlinked to each other and thereafter the amended plans changed

the number of wings and ultimately had a proposed additional

building that was not in the initial sanctioned plan under the layout

11 NMS.2327.2000-S.3323.2000.sxw

scheme shown to the flat purchasers who purchased the flats in and

from 1985.

22.Paragraph 38 of the judgment it considered the observation of the

Supreme Court judgment in the case of White Towers Cooperative

Housing Society Ltd. Vs. S.K. Builders & Ors. (2008) 6 Bom.C.R.

371 thus:

“The promoter is not only required to make disclosure

concerning the inherent F.S.I., he is also required at the stage of

layout plan to declare whether the plot in question in future is

capable of being loaded with additional F.S.I./floating FSI/TDR.

In other words, at the time of execution of the agreement with

the flat takers, the promoter is obliged statutorily to place before

the flat takers the entire project/scheme, be it a one building

scheme or multiple number of buildings scheme.”.

23.The Court, therefore, concluded in paragraph 40 of the judgment

that it is settled position in law that the prior consent of flat

purchasers would only not be required, if the entire project is placed

before the flat purchasers at the time of the agreement and the

Developer puts additional construction in accordance with the layout

plan. It further concluded that if the Developer wants to make

additional construction which is not a part of the layout consent of

the flat purchasers would be required. The Court further held that

once the buildings shown in the approved plan are completed and

possession is handed over, the Developer cannot contend that

because he has not formed the Society and because he has not

conveyed the property he can take advantage of the additional FSI

which become subsequently available. That would go to the society

to whom the land had to be conveyed. The advantage of the FSI

would be taken only when the building is under construction and

12 NMS.2327.2000-S.3323.2000.sxw

only for the buildings forming a part of the development plan or

layout plan already approved. It further held that subsequent

amendment of layout plan without the consent of the flat

purchasers was not permissible. Therefore, once the building is

completed in terms of the plan and the flat purchasers are to be put

in occupation, permission of the flat purchasers would be required.

Therefore, if subsequently FSI becomes available under the D.C

Rules, it would be available to the Society to whom the land had to

be conveyed.

24.Further the Court considered the judgment of the Supreme Court in

Bajranglal Eriwal & Ors. Vs. Sagarmal Chunilal & Ors. (2008) 6

Bom. C.R. 887 holding that the specific consent was relatable to

the particular project or the scheme of Development which was

intended to be implemented. The scheme which could be

implemented could only be under the sanctioned plan or a plan

under the layout shown to the flat purchasers. In the absence of that

the statutory embargo to alter or add to any structures on the plot

would continue and would be lifted only upon the written consent of

the flat purchasers.

25.The judgment further held that this consent was not a general

consent made out in the agreement between the flat purchasers such

as the consent relied upon by Mr. Setalvad in this case. Such a

consent would defeat public policy. Such a consent would dilute the

purposive object and intent of the legislature and would not

eliminate the abuses and malpractices which it sought to remedy.

Hence the judgment observed that the consent must be an

13 NMS.2327.2000-S.3323.2000.sxw

affirmative acceptance of all the purchasers who had agreed to

purchase the flats and could not be even implied concent.

26.The Court in that case held that the Developer was obliged to

execute the conveyance within 4 months from28th January 1993

which was the date of the registration of the Society. It held that the

additional structure could not be constructed by the Developers

without the consent of the Society. It, therefore, injuncted the

Developers from putting up any further additional construction.

27.Consequently such additional FSI cannot be claimed by the

Developer for putting up any additional building not under the

approved plan. Further the failure and neglect to register the society

and convey the property would certainly not give any right to the

Developer to step upon the property or to claim any FSI. The FSI

belongs to the plot. The plot must be taken to be conveyed after the

statutory period. The FSI would, therefore, be available only to the

true owner of the plot. Failure to convey would not constitute the

Developer a true owner. That would be putting a premium upon his

default. It would constitute an abuse of legal process. Any FSI for

putting up any additional construction not in the initial sanctioned

plan can therefore never enure for the benefit of the Developer

except with the express written permission of all the flat purchasers

or the Society, after its formation. Such FSI would belong to and can

be exploited by none other than the Society of flat purchasers.

28.Mr. Setalvad contended that in the case of Manratna Developers

Vs. Megh Ratan Cooperative

Housing Society Ltd. 2009(2)

14 NMS.2327.2000-S.3323.2000.sxw

Mh.L.J 115 it was held that additional structures could be put up

without consent. The judgment observes that the Developers were

not constructing anything which is impermissible. The Developers

had complied with the requirement of true and full disclosure. The

amenities in the form of recreation ground were not reduced. It

referred to the case of Kalpita Enclave Cooperative

Housing

Society Vs. Kiran Builders Pvt. Ltd. 1986 Mh.L.J. 110 which

necessitated the Legislation by way of addition of Section 7A in

MOFA that the Promoter was not entitled to put up additional

structure not shown in the layout plan without the permission of the

flat purchasers. It further referred to the observation of the Supreme

Court in the case of M/s. Jayantilal Investments (supra) laying

down the object of the amendment and specifying that if the total

layout allows construction of more buildings the consent of the flat

purchasers was not required. The judgment considered the

additional FSI and the TDR which became available upon plots of

land necessitating further construction and hence observed,

reproducing the clause of the agreement, that further development

in accordance with sanctioned plans phase wise could be allowed to

be constructed without consent of the flat purchasers. Paragraph 11

of the judgment specifically observes that it was agreed in that case

that the Promoters would be developing the property in a phased

manner in accordance with the sanctioned plans or modified

sanctioned plans.

29.In this case sanctioned plans showing construction of any structure

or building other than the Plaintiff’s building is not shown or

produced. No such sanctioned plans in a layout are stated to have

15 NMS.2327.2000-S.3323.2000.sxw

been shown to the Plaintiff members at the time they agreed to

purchase flats.

30.Mr. Setalvad relied upon the judgment in the case of Shailaja

Kamalakar Limaye Vs. Nilkanth Ganesh Pethe 2010 (4) Mh.L.J.

160. In that case the plan was approved on10th June 1965 for

construction of two buildings with a 30 ft. space between them. It

was observed that the flat purchasers of the first building knew that

one more building would come up on the plot. These facts were

disclosed to the flat purchasers as per the approved plans. Hence it

was held that the purchasers’ consent was not necessary to construct

the second building.

31.What is missed by Mr. Setalvad is that in that case the approved plan

itself showed the additional building to be constructed. In this case

no approved plan is produced. It is not known whether the

approved plan showed any building which were to be constructed on

the place where the chawls are situated. The entire FSI of the plot

was utilized in construction of the Plaintiff’s building. The further

construction is sought to be put up only because further FSI/TDR is

available under the D.C .Rules of 1991 and amendments made

thereto. It could, therefore, never be that the original approved plan

could have contemplated any building to be constructed on the place

where the two chawls are situate. No such construction is shown.

The case of the Plaintiff is completely different. The Defendants

have not made out a case that the construction sought to be put up

by them was already approved in the initial approved plans when

the FSI was already consumed by them.

16 NMS.2327.2000-S.3323.2000.sxw

32.Similarly the case of Jamuna Darshan Coop.Hsng. Society Ltd.

& Ors. Vs. M/s. JMC & Meghani Builders & Ors. 2008(1) All MR

789 was a case where a separate building was to be constructed as

per sanctioned plan of the Municipal Corporation. Consequently

naturally the flat purchasers’ further consent was not required to be

obtained; it must be taken to have been obtained when their

agreement itself was entered into and when they were shown the

sanctioned plan.

33.Further in the case of Ralph D’Souza Vs. Danny D’Souza 2006 (3)

Mh. L.J. 497 also relied upon by Mr. Setalvad related to construction

of a new building to be developed as per the layout after obtaining

approval of the legal authority.

34.The Defendants defended a lost cause. The Defendants have relied

upon judgments which show how they do not apply to the facts of

their case at all. The nonproduction

of the initial approved plan

requires adverse inference to be drawn that, if produced, it would

have shown only the Plaintiff’s building to be constructed. The fact

that the Plaintiff’s plot is a small plot of land on which only one

building came to be constructed leaving only the requisite 15% open

area as recreational ground (RG), itself shows that it was only that

building which could be constructed by consuming the then

available FSI. Hence also the initial approved plan could never show

any additional building in any layout plan approved by the

Municipality. None other can be allowed by the Court except when

the written consent of the Plaintiff Society. Consequently, the

17 NMS.2327.2000-S.3323.2000.sxw

injunction as prayed for by the Plaintiff is required to be granted.

35.Notice of Motion is made absolute in terms of prayers (a)(ii), a(iii),

(b) and (c).

36.The Notice of Motion is disposed off accordingly.

37.The Division Bench of this Court has requested this Court to dispose

of the suit itself as possible. The Pleadings are complete. Hence

admissions, if any are required to be recorded, issues framed and

case management directions passed.

38.The execution of the agreement with the flat purchasers is admitted.

I S S U E S

1. Whether the Plaintiffs are entitled to seek enforcement of their

rights under the agreements for sale which are unregistered

and unstamped.

2. Whether the suit is bad for nonjoinder

of necessary parties

because the partners of the first Defendants have not been

joined as party Defendants.

3. Whether the Defendants are entitled to carry out additional

construction on the suit plot of land without the Plaintiff’s

consent.

4. Whether the Plaintiffs are entitled to object to Defendants 2 to

18 NMS.2327.2000-S.3323.2000.sxw

4 using the balance portion of the suit property for

constructing additional structures on the suit plot of land.

5. Whether the Defendants are bound to convey the entire suit

plot of land to the Plaintiff.

6. What relief, if any, are the Plaintiffs entitled to ?

39.The Plaintiffs shall file their affidavit of examinationinchief

upon

the issues of disputed facts.

40.The Plaintiffs shall also file the affidavit of documents, if any, and

offer inspection of the documents to the Defendants as required.

41.The Suit is adjourned to22nd August 2011for considering the

relevancy and admissibility of the documents of the Plaintiff and for

passing further case management directions under the provisions of

Order 18 Rule 4 of the C.P.C.

(SMT. ROSHAN DALVI, J.)

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Bombay High Court

Indian Kanoon – http://indiankanoon.org/doc/134916741/

Bombay High Court

Rachanaa-I Co-Op.Hsg.Society … vs Flr, 126, Jay Prakash Road, … on 17 December, 2011

Bench: R. M. Borde

1 357.10-ao

IN THE HIGH COURT OF JUDICATURE AT BOMBAY.

APPELLATE JURISDICTION.

APPEAL FROM ORDER NO. 357 OF 2010

Rachanaa-I Co-Op.Hsg.Society Ltd.

An Residential Co-operative Society

registered under the provisions of

MaharashtraCo-operative Society Act,

1960 and having its address at

Plot No. Bapurao Juvekar Marg,

Bhandup (East), Mumbai- 400 0 … Appellant.

V/s.

1. Rachnaa – Engineers & Developers,

A Registered Partnership firm,

2. Mr.Minesh Vakharia

An Adult Indian Inhabitant

Occu : Business

3. Mr.Hemant Vakharia

An Adult Indian Inhabitant

Occu : Business

4. Mr.Nilesh Modi

An Adult Indian Inhabitant

Occu : Business

5. Mr.Rajesh Modi

An Adult Indian Inhabitant

Occu : Business

6. Mr.Ajay Kamdar

An Adult Indian Inhabitant

Occu : Business

Snos.1 to 6 all above are having their

address at 2-Narsinh Niwas, Ground

2 357.10-ao

Flr, 126,Jay Prakash Road, Andheri (W),

Mumbai- 58.

7. M/s.Konark Builders,

A registered Partnership firm,

Having address at 14,BodkeBuilding,

N.S.Road, Mulund (W), Mumbai.

8. Mr.Atul Jayantilal Mehta,

An Adult Indian Inhabitant,

Occu: Business and having address at

Block No.13/14, Neelkanth Tirth,

Zaveri Road, Mulund (W), Mumbai.

9. Mr.Praveen Bhagwan Pitale,

An Adult Indian Inhabitant,

Occu: Business and having address at

Babu Mistry Chawl, J.N.Road,

Mulund (W), Mumbai- 400 080.

10. Mr.Narsh Rajkrishnan Agarwal,

An Adult Indian Inhabitant,

Occu: Business.

11. Mr.Kamala RajKrishnan Agarwal,

An Adult Indian Inhabitant

Occu : Business

Respondents above at snos.11 & 12

having Address at 19-A, Sgar Sangeet,

shahidBhagatsingh Road, Opp.Colaba

Post Office, Mumbai- 400 005.

12. The Municipal Corporation of the

Greater Mumbai,

A statutory body incorporated under the

Mumbai Municipal Corpo. Act, 1988 and

having its Office at B.M.C. Head Quarters,

Mahanagar Palika Marg,

umbai- 400 001.

13. The Executive Engineer,

The Municipal Corporation of Greater

3 357.10-ao

Mumbai, Building Proposal Dept.,

Easter Suburbs, Nr. Raj Lagacy,

Surya Nagar, L.B.S. Marg,

Vikroli (West), Mumbai. … Respondents.

A.A.Kumbhakoni with A.M.Kumbhakoni i/b. Ramesh Chheda for the appellant.

P.K.Dhakephalkar, Senior Advocate with Vijay Nayar i/b. P.R.Kulkarni for respondent Nos.1,2,4,5,7,8 and 9.

Ms.K.K.Soran for respondent Nos.12 and 13.

CORAM: R.M.BORDE, J.

RESERVED ON :25th November 2011.

PRONOUNCED ON :17th December 2011.

JUDGMENT. :

Heard.

Admit.

By consent of parties, appeal is taken up for final disposal.

2. The appellant/ original plaintiff is taking exception to the order passed in Notice of Motion No.2214/2009 in L.C.Suit No. 2635/2009 by the Judge,City Civil Court, Greater Bombay on 17 th March 2010. The appellant is the co-operative housing society and its membership consists of the occupiers of the flats in Rachana-1 building constructed and developed by the defendants/ respondents herein. The defendant Nos.1 to 7 are the partners of the firm and are the builders and developers. Respondent Nos.12 and 13 are the Municipal 4 357.10-ao

Corporation and the Executive Engineer of the Corporation. Defendant Nos.1 to 7 developed the plot situated at village- Bhandup, taluka- Kurla and constructed Rachana-1 building which consist of two wings “A-Wing” and “B-Wing”. The defendants secured proper permission and got the plan sanctioned and sold the flats to the prospective purchasers. The flat purchasers who are the occupants of building Rachana-1 have formed the plaintiff- Society and the said society is now controlling the affairs of the building.

3. According to the plaintiff, the defendants obtained IOD for the construction of the building on the plot of land and thereafter obtained commencement certificate on26th July 1991and they also started construction and, at the same time, opened booking of the flats and executed agreements with various flats purchasers between 1991 to 1993. It is alleged that in the year 1993 the flat purchasers executed an undertaking in favour of the defendants. In the year 1994, amended IOD and amended approved plan were sanctioned whereby earlier approved plan was cancelled. The defendants obtained occupation certificate in respect of A-Wing on11th July 1993whereas obtained full occupation certificate in respect of B-Wing on 27 th September 1996. The flat purchasers have formed the co-operative society without co-operation of respondent- defendants. It appears that the defendants received approval from the Municipal Corporation for construction of C-Wing on the remaining area of the plot in the year 2009. The co-operative society objected to the construction of C-Wing by sending letters to the defendants. However, the defendants did not pay any heed to the request of the society and are about to start construction of C-Wing. It is the contention of the plaintiff- Society that 5 357.10-ao

due to proposed construction the amenities provided to the flat owners of the building are likely to be prejudicially affected and, therefore, without seeking prior permission of the flat owners, who are members of the plaintiff- society, the builders and developers i.e. the respondents herein are not entitled to commence the construction work of C-Wing after lapse of 14 years after securing occupation certificate in respect of other wings. The plaintiff, thus, approached the Court seeking direction to defendant Nos.1 to 11 to convey the title, rights and interest in favour of the plaintiff- society in respect of suit plot and also prayed for direction to the defendants to give complete audited accounts of the moneys, which they have received from the flat purchasers from time to time with further direction against the defendants restraining them from submitting any other plan to the Corporation. A relief is also sought against the Corporation and its officers restraining them from issuing any sanction to the plan submitted by the defendants/ respondents herein. The plaintiff also prayed for interim relief restraining the defendants from making construction of C-Wing on the compulsory open space existing in the compound of the plaintiff- society. Interim relief is also sought against the defendants to direct them to demolish all construction work which has been carried out for the purpose of proposed C-Wing.

4. The defendants appeared and resisted the suit by filing their reply. According to the defendants, the construction sought to be raised in respect of C-Wing is as per the plan sanctioned by the Corporation. It is the contention of the defendants that while executing the agreement of sale in respect of flats situated in Rachana-1 building, all the flat purchasers were made aware in respect of the proposed 6 357.10-ao

construction of C-Wing and, accordingly, they had given a specific consent by executing indemnity bond. It is contended that the proposed construction of C-Wing is not in violation of the provisions of the sections 7 and 7A of the Maharashtra Ownership of Flats Act, 1963 (MOFA). The defendants contended that the interim relief as prayed for by the plaintiff is not liable to be granted. It is the contention of the defendants that the plaintiff has suppressed certain material facts. They were aware of the fact that the developer has made them known in respect of the construction of C-Wing still they approached the Court seeking restraint order which is not worthy to be granted.

5. Heard learned counsel for the respective parties.

6. It is strenuously contended by the learned counsel for the appellant that the construction of proposed C-Wing is not as per the plan sanctioned at the time of entering into agreement with the members of the society. There are amendments to the plan. Those are likely to affect the amenities availed of by the flat purchasers adversely. It is contended that the developer did not co-operate in forming the society even after completion of the construction and after securing occupation certificate in the year 1993 and 1996. The developer is not entitled to commence construction activities over the adjoining plot and erect C-Wing as part of the building already constructed, that too, after lapse of about 13 years of the registration of the society and 14 to 16 years after issuing of occupation certificate in respect of A and B wings. The appellant has placed reliance on different sanctioned plans according permission to raise construction over the suit plot. It is 7 357.10-ao

pointed out that from to time there were different permissions accorded in respect of construction of C-Wing and recent permission accorded in the year 2009 is completely different and has an effect of modifying whole plan thereby putting the occupants of A and B wings to the disadvantageous position. It is the contention of the appellant that even in respect of the amendment carried out to the plans if the construction is to be raised after lapse of about 13 years from the date of registration of the society, the permission of the occupants of the flats/ members of the society would be warranted. The builders and developers cannot be permitted to act upon alleged informed consent obtained in the year 1991 or at the time of entering into agreement during the year 1994. According to the counsel appearing for the appellant, the construction activities being carried out by the respondents/ defendants is not in consonance with the law laid down by this court in its judgment in the case of Madhuvihar Co-operative Housing Society, Mumbai v. Jayantilal Investments, Mumbai, 2011 (1) Mh.L.J. 641 and Ravindra Mutenja & others v. Bhavan Corporation & others, 2003 (5) Bom.C.R. 695.

7. The counsel appearing for the respondents- builders and developers has vehemently controverted the contentions raised by the appellant contending that while entering into agreement in respect of purchase of flats, the prospective flat purchasers were made aware of the construction of C-Wing and they had given indemnity bond. It is also contended that the plan was sanctioned in respect of building Rachana-1 in the year 1991 wherein the proposed C-Wing was shown. The flat purchasers did have knowledge in respect of the proposed construction of C-Wing and, as such, they cannot now object to the 8 357.10-ao

construction to be made by the builders and developers. It is the contention of the respondents that the proposed action of the builders in raising construction is perfectly in consonance with the law laid down by the Apex Court in the case of M/s.Jayantilal Investments v. Madhuvihar Co-operative Housing Society, AIR 2007 SC 1011 and M/s.Manratna Developers v. Megh Ratan Co-operative Housing Soc.Ltd., 2008 (6) ALL MR 550.

8. It is true that the flat purchasers, when they entered into an agreement between 1991 to 1993 for purchase of flats in A and B wings of Rachana-1 building, were made aware of the fact in respect of proposed construction of C-Wing. The brochure also did give the details in respect of C-Wing. The construction of C-Wing was proposed by the builders and developers in the year 1991 when the plan was prepared in consonance with the sanction accorded by the Municipal Corporation. The counsel appearing for the appellant referred to various sanctioned plans which are made available while arguing the appeal. The plan sanctioned and approved in 1991 indicates three wings. Construction of C-Wing consists of ground + 6 upper floors whereas B-Wing was of ground + 2 upper floors. The area of plot considered was 4,825.99 sq.meters and total tenements were only 42 and the car parking for 10 vehicles. It appears that during the intervening period, some area forming part of plot on which construction was to be raised came to be acquired. It appears that some portion of the plot and more specifically where C-Wing was to be constructed was deleted in the amended IOD of 25th August 1994 and the previous plan bearing No.CE/4921/BPES/AS dated 26th July 1991 stood cancelled. The plan as per the approved IOD amended in 1994 9 357.10-ao

does not show existence of C-Wing. As per the approved plan of 1994, the total tenements which were to be constructed were 82 and the building permission was granted for construction of B Wing is of ground + 7 floors. It is to be noted that as per the approved IOD of 1991, B-Wing was to be constructed comprising of ground + 2 floors whereas the same appears to have been amended as ground + 7 floors in the amended plan of 1994. It is to be noted that the amendment issued in the year 1994 appears to be after execution of the agreements with the prospective flat purchasers, however, before carrying out construction and securing occupation certificate. The third amendment in respect of plan is issued in the year 1996 which also does not show existence of C-Wing whereas B-Wing is shown as structure comprising of ground + 7 floors. The amended plan of 1996 shows the area of plot considered as 5,286.67 sq.meters and total tenements which were to be constructed were 96. The construction C-Wing which is proposed by the respondents/ defendants is in accordance with the amended plan issued in the year 2009. The amended plan of 2009 shows proposed additions and alterations of residential building C- Wing and the area of plot considered is 5,266.10 sq.meters and the tenements are shown as 97. Permission is granted in respect of construction of C-Wing with an area of 74.90 sq.meters. Thus, there appears that the demarcated open space of C-Wing appears to have been reduced from earlier plan of 1991 from 7.33 to 3.60 meters on eastern side. Thus, it is the contention of the appellant that the different plans got approved from time to time show lot of variances in plans which cannot be permitted without consent of the occupants of the building. It is to be noted that occupation certificate granted in respect of A-Wing is in respect of ground + 7 upper floors whereas the 10 357.10-ao

occupation certificate of B-Wing appears to have been granted on 25th September 1996 during the period when the plan as sanctioned by the Corporation stood amended and did not show existence of C-Wing. Thus, the contention of the appellant is that there was an amendment proposed to the plan which was sanctioned in view of deletion of certain area from the plot in the year 1994 where the C-Wing was supposed to be raised as per the plan of 1991. The same situation continued so far as amendment to the plan carried out in the year 1996. It appears that amendment to the original plan necessitated existed because of deletion of certain area from the plot and acquisition of the area out of the plot, abutting the area where C-Wing was proposed to be constructed, for road widening purposes. On perusal of the plan prepared in the year 2009, it appears that C-Wing is readjusted in the remaining portion of available plot after acquisition. There appears to be increase in number of tenements comprising C-Wing. Thus, the amendment to the plan in the year 2009 results in adding to congestion thereby rendering lesser area available towards the open space for the occupants of the existing flats of the building. The argument advanced by learned counsel appearing for the appellant that the amendments to the plan which are disadvantageous to the occupants at the instance of the builder are not permissible unless there is consent by the flat owners/ members of the society. The informed consent, which is stated to have been obtained in the year 1993-94 while the flat purchasers booked their flats, was on the basis of the approved plan of the year 1991. The B-Wing, which was initially proposed to be comprising ground + 2 floors, was converted into ground + 7 floors and, at the same time, the proposed C-Wing was also deleted in the plan of 1994. While the occupation certificate was 11 357.10-ao

issued the same situation continued and the deletion of C-Wing from the plan remained till the fresh plan was got approved by the builder in the year 2009. Thus there is some substance in the contention of the appellant that the changes effected by the builders and developers at the subsequent stage are disadvantageous to the occupiers of the flats and, as such, need their consent.

9. At the same time, it is to be noted that the plans on which reliance is sought to be placed while arguing the matter were not forming part of the record before the trial Court. In order to substantiate his contentions, the appellant has placed reliance on various plans approved by the Municipal Corporation in respect of the building from time to time. Since the respondents did not have an opportunity to meet the case of the appellant, in my opinion, the matter requires reconsideration at the hands of the trial Court.

10. The counsel appearing for the respondents contended that there was informed consent by the members/flat purchasers and they were made aware in respect of the proposed construction of C-Wing. It is contended that it is immaterial if the developer changes the plan at any subsequent point of time and the change which is proposed is also approved by the planning authority i.e. the Municipal Corporation. It is contended that the land where C-Wing was proposed to be constructed still remains the property of the builders and developers and, in any case, cannot be handed over to the society. It is contended that there shall be balancing of rights of promoter to make alterations or additions in the structure of the building in accordance with the layout plan on the one hand vis-a-vis his obligations to form the society and 12 357.10-ao

convey the right, title and interest in the property to the society. Reliance is placed on the judgment of the Apex Court in the case of M/s.Jayantilal Investments v. Madhuvihar Co-op. Housing Society (supra) and more specifically paragraph-17 thereof which reads thus:

“17. Reading the above provisions of MOFA, we are required to balance the rights of the promoter to make alterations or additions in the structure of the building in accordance with the lay out plan on the one hand vis-a-vis his obligations to form the society and convey the right, title and interest in the property to that society. The obligation of the promoter under MOFA to make true and full disclosure of the flat takers remains unfettered even after the inclusion of Section 7A in MOFA. That obligation remains unfettered even after the amendment made in Section 7(1)(ii) of MOFA. That obligation is strengthened by insertion of Sub-section (1A) in Section 4 of MOFA by Maharashtra Amendment Act 36/86. Therefore, every agreement

between the promoter and the flat taker shall comply with the prescribed Form V . It may be noted that, in that prescribed form, there is an explanatory note which inter alia states that clauses 3 and 4 shall be statutory and shall be retained. It shows the intention of the legislature. Note 1 clarifies that a model form of agreement has been prescribed which could be modified and adapted in each case depending upon the facts and circumstances of each case but, in any event, certain clauses including clauses 3 and 4 shall be treated as statutory and mandatory and shall be retained in each and every individual agreements between the promoter and the flat taker. Clauses 3 and 4 of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction etc.) Rules, 1964 are quoted hereinbelow:

3. The Promoter hereby agrees to observe, perform and comply with all the terms, conditions, stipulations and restrictions if any, 13 357.10-ao

which may have been imposed by the concerned local authority at the time sanctioning the said plans or thereafter and shall, before handing over possession of the Flat to the Flat Purchaser, obtain from the concerned local authority occupation and/or completion certificates in respect of the Flat.

4. The Promoter hereby declares that the Floor Space Index available in respect of the said land is square metres only and that no part of the said floor space index has been utilized by the Promoter elsewhere for any purpose whatsoever. In case the said floor space index has been utilized by the Promoter elsewhere,then the Promoter shall furnish to the Flat Purchaser all the detailed particulars in respect of such utilization of said floor space index by him. In case while developing the said land the Promoter has utilized any floor space index of any other land or property by way of floating floor, space index, then the particulars of such floor space index shall be disclosed by the Promoter to the Flat Purchaser. The residual F.A.R. (F.S.I.) in the plot or the layout not consumed will be available to the promoter till the registration of the society. Whereas after the registration of the Society the residual F.A.R. (F.S.I.), shall be available to the Society.”

Reliance is also placed on the judgment Division Bench of this Court in the case of M/s.Manratna Developers v. Megh Ratan Co-operative Housing Soc.Ltd. (supra). In paragraph-6 of the judgment, it is observed thus:

“6. Coming to the question as to whether the consent of the flat owners is required by the developer/promoter for raising the additional structure/ building, the change in position of law will 14 357.10-ao

have to be addressed to. Section 7 of Maharashtra Ownership Flats Act, 1963 (MOFA for short) was interpreted by the Bombay High Court in Kalpita Enclave Cooperative Housing Society v. Kiran Builders Pvt. Ltd. reported in holding that a promoter was not entitled to put up additional structure not shown in the original lay out plan without consent of the flat purchasers. The said interpretation of Section 7 by the High Court prompted the legislature to amend Section 7. Section 7 was amended with retrospective effect and Section 7A was newly inserted which was of a clarificatory nature. By amending Section 7, the words or construct any additional structures were deleted. Section 7A which was newly added, clarifies the position that the consent of flat holders in a building is not necessary in respect of construction in the scheme or lay out, after obtaining approval of the local authority in accordance with the building buy laws or Development Control Rules. Section 7A, thus, does not enable the flat purchasers to prevent construction of the additional structures once the plan is modified and sanctioned under the building bye laws or Development Control Rules.”

11. It is contended that the consent of the flat owners in the building is not necessary in respect of construction in the scheme and/or layout after obtaining approval of the local authority in accordance with the building bye-laws or development control rules. The flat purchasers cannot prevent the construction of the additional structures once the plan is modified and sanctioned under the building bye-laws or development control rules.

12. Here is the case where the builder proposes to construct an additional wing after 14 years of securing occupation certificate in respect of other two wings. The proposed C-Wing which is to be 15 357.10-ao

constructed forms part of the same building. The construction in respect of other two wings is completed way back in the year 1994 and 1996 and the addition to the building is as per the modified plan sanctioned in the year 2009. The question here is whether such modified plan also requires consent of the flat owners. It is not disputed that the society is formed without co-operation from the builder in the year 1997 itself and the society is looking after the affairs of the building. Peculiarity of the case is that the plan which was sanctioned in the year 1991, which indicates the existence of proposed C-Wing, was substantially amended. There was a development in respect of certain area of the disputed plot and the acquisition of the additional area for the road widening purpose is out of or adjoining the proposed C-Wing. The builders and developers, thereafter, appear to have secured amendment to the plan in the year 1994 and 1996 whereby proposed C-Wing was deleted. The construction in respect of B-Wing was also shown to be ground + 7 floors whereas it was ground + 2 floors in initial sanctioned plan. Thus, during the period during which the construction was proceeded and the occupation certificate was issued, existence of C-Wing was not at all there as per the approved plan and it was not permissible for the developers at the relevant time to raise construction of C-Wing. The revised permission appears to have been secured in the year 2009 thereby the alignment of C-Wing was changed in view of acquisition of certain area of the plot for road widening. Thus, while changing the alignment as well as the plan, there are certain changes in the building design and the facilities available for the existing flat occupiers are surely affected to their prejudice. It is, therefore, contended by the appellant that if the builders and developers want to raise construction after securing 16 357.10-ao

proposed amendment to the plan in 2009 and want to carry out construction, the consent of the existing flat occupiers would be necessary and the builders and developers cannot bank upon the consent obtained some 16 to 17 years back and, that too, in respect of different plans. In this context reliance is placed on the judgment of this Court in the case of Ravindra Mutenja & others v. Bhavan Corporation & others (supra). In paragraph-13 of the judgment, learned single Judge has observed thus:

“13. The real issue as has been noted earlier is what is the stage upto which the developer/owner can put up additional construction after the building in terms of the registered plan has been constructed and occupied. In my opinion, once the buildings shown in the approved plan submitted in terms of the regulations under an existing scheme filed before the authorities under MOFA Act, have been completed and possession handed over, the builder/owner cannot contend, that because he has not formed the society and/or not conveyed the property by sale deed under the Act he is entitled to take advantage of any additional F.S.I. that may become available because of subsequent events. That would be so at the stage the building is under construction or the building is not completed and/or purchasers are not put in occupation provided such building forms part of the development plan and/or lay out plan already approved. Subsequent amendment of the lay out plan after the building plan is registered under MOFA, without the consent, prima facie, of the flat purchasers would not be permissible. It may be possible to accept that the development plan could be modified as long as the right of the purchasers and the benefits which they are entitled to including recreational and open areas are not effected by the revised development plan. Once the building is completed and the purchasers are put in occupation in terms of plan filed and the 17 357.10-ao

time to form the society or convey the property in terms of the agreement or the rules framed under MOFA is over, the permission of such purchasers would be required.

In the instant case, the building completion certificate for the plaintiff’s building, was issued in the year 1997. The builder/owner Defendant Nos.

1, 3 and 4 had to put up the construction, based upon the permission/license granted. The defendant Nos. 1, 3 and 4 had to construct the building and to convey the title by sale deed in terms of Rule 9. If property had been conveyed, prima facie the remaining FSI or FSI which become subsequently available on the facts of the case, would be to the society to whom the land had to be conveyed. The record shows that the building was approved in December, 2001. It cannot prima facie, be said that defendant Nos. 1, 2, 4 and 5 have any rights under which they are entitled to put up an additional building contrary to Section 7A of the Act.”

Reliance is also placed on the judgment of this Court in the case of Madhuvihar Co-operative Housing Society, Mumbai v. Jayantilal Investments, Mumbai (supra). In paragraphs- 40 and 41 of the judgment, the learned single Judge observed thus:

“40. It can, thus, be seen that it is settled position of law, as laid down by the Apex Court, that a prior consent of the flat owner would not be required if the entire project is placed before the flat taker at the time of agreement and that the builder puts an additional construction in accordance with the layout plan, building rules and Development Control Regulations. It is, thus, manifest that if the promoter wants to make additional construction, which is not a part of the layout which was placed before flat taker at the time of agreement, the consent, as required under Section 7 of the MOFA, would be necessary.

18 357.10-ao

On reading of the judgment, it is, thus, clear that subsequent amendment of the layout plan, after the building plan is registered under MOFA, without the consent of the flat purchasers, prima facie; would not be permissible. Once the building is constructed and the occupation certificate is issued and the society is formed, if any further construction is to be raised in respect of the same building, the consent of the flat purchasers would, obviously, be required.

13. Since I have already observed in earlier paragraphs that the basis of the arguments advanced by the counsel appearing for the appellant is various amended approved plans of the year 1991, 1994, 1996 and 2009 and since those plans were not placed on record of the trial Court, the respondents/ original defendants did not have opportunity to meet the challenge. In order to extend opportunity to the respondents/ defendants and with a view to facilitate the appellant to place on record the material, which is being produced before this Court, on the record of the trial Court, it is necessary to remit the matter back to the trial court. The appellant shall place on record the copies of the approved plans on which reliance is placed by them and it would be open for the respondents to submit their contentions. The trial Court, after hearing the arguments and after extending opportunity to both parties to place on record material in support of their case, shall proceed to decide the notice of motion afresh on its own merits and in accordance with the provisions of law. The trial Court while deciding notice of motion shall not be influenced by the observations made by this Court in the instant judgment and shall 19 357.10-ao

proceed to decide the controversy on its own merits and in accordance with law. Thus the impugned order passed by the trial court is quashed and set aside. The trial Court is directed to decide Notice of Motion No.2214/2009 afresh after affording opportunity of hearing to both parties and to submit their contentions before the Court, in accordance with the provisions of law as expeditiously as possible, preferably, within twelve weeks from the date of receipt of writ of this order. The order of status-quo granted by this Court in the instant appeal from order shall remain operative till the trial Court decides notice of motion.

14. With the aforesaid directions, appeal from order stands allowed. In view of disposal of appeal from order, pending civil application does not survive and stands disposed of accordingly.

(R.M.BORDE, J.)

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1lgc

lgc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLAE JURISDICTION
APPEAL FROM ORDER NO.1195 OF 2009
WITH
CIVIL APPLICTION NO.1495 OF 2009
M/s.Noopur Developers ]
a registered partnership firm formed under ]
the Indian Parnership Act, 1932 having its ]
address at 4, Vishal Apt., L.T.Road, ].. Appellant/
Borivali(West), Mumbai­400 092 ]Original Defendant
versus
1. Himanshu V Ganatra ]
age 46 years ]
]
2. Parul Hinanshu Ganatra ]
age 42 years ]
both adults Indians inhabitants having ]
residing at Flat No.701 and 702, ]
“A” Wing, Megh Bldg., situate at ]
Junction of Factory Lane, S.V.Road ]
Borivali(West), Mumbai 400 092 ]
]
3. Sureshkumar Umedmal Jain ]
age 54 years ]
]
4. Nirmala Sureshkumar Jain ]
age 51 years ]
both adults Indian Inhabitants having ]
residing at Flat No.703 and 704, ]
“A” Wing, Megh Bldg., situate at ]
Junction of Factory Lane, S.V.Road ]
Borivali(West), Mumbai 400 092 ]
]
5. Manoj V Vora ]
age 45 years ]2
6. Chetna Manoj Vora ]
age 43 years ]
both adults Indians inhabitants having ]
residing at Flat No.601 and 602, ]
“A” Wing, Megh Bldg., situate at ]
Junction of Factory Lane, S.V.Road ]
Borivali(West), Mumbai 400 092 ]
]
7. Kewalchand J Jain ]
age 61 years ]
8. Nileshkumar Kewalchand Jain ]
age 35 years ]
]
9. Kalawati Kewalchand Jain ]
age 59 years ]
all adults Indians inhabitants having ]
residing at Flat No.603 and 604, ]
“A” Wing, Megh Bldg., situate at ]
Junction of Factory Lane, S.V.Road ]
Borivali(West), Mumbai 400 092 ]
]
10. Laxmichand Malshi Chheda ]
age 56 years ]
]
11. Hemlata Laxmichand Chheda ]
age 53 years ]
both adults Indians inhabitants having ]
residing at Flat No.501 and 502, ]
“A” Wing, Megh Bldg., situate at ]
Junction of Factory Lane, S.V.Road ]
Borivali(West), Mumbai 400 092 ]
]
12. Mahesh Roopchand Talsera ]
age 41 years ]
]
13 Kiran Roopchand Talsera ]
age 44 years ]
both adults Indians inhabitants having ]
residing at Flat No.503 and 504, ]
“A” Wing, Megh Bldg., situate at ]
Junction of Factory Lane, S.V.Road ]
Borivali(West), Mumbai 400 092 ]3
14 Pravin Dhanrak Khimavat ]
age 47 years ]
15 Veena Pravin Khimavat ]
age 44 years ]
both adults Indians inhabitants having ]
residing at Flat No.401 and 402 ]
“A” Wing, Megh Bldg., situate at ]
Junction of Factory Lane, S.V.Road ]
Borivali(West), Mumbai 400 092 ]
]
16 Jinnalal L Jain ]
age 61 years ]
]
17 Pinkesh J Jain ]
age 26 years ]
]
18 Manjula J Jain ]
age 58 years ]
]
19 Mitesh J Jain ]
age 30 years ]
]
both adults Indians inhabitants having ]
residing at Flat No.301 and 302 ]
“A” Wing, Megh Bldg., situate at ]
Junction of Factory Lane, S.V.Road ]
Borivali(West), Mumbai 400 092 ]
]
20 Vikas H Jain ]
age 38 years ]
]
21 Rekha Vikas Jain ]
age 37 years ]
]
22 Sheela H Jain ]
age 40 years ]
]
23 Kailash H Jain ]
age 42 years ]
]
both adults Indians inhabitants having ]
residing at Flat No.303 and 304 ]4
“A” Wing, Megh Bldg., situate at ]
Junction of Factory Lane, S.V.Road ]
Borivali(West), Mumbai 400 092 ]
]
24 Sanjay Harakchand Jain ]
age 48 years ]
]
25 Meena Sanjay Jain ]
age 35 years ]
]
both adults Indians inhabitants having ]
residing at Flat No.203 and 204 ]
“A” Wing, Megh Bldg., situate at ]
Junction of Factory Lane, S.V.Road ]
Borivali(West), Mumbai 400 092 ]
]
26 Lalit C Jain ]
age 48 years ]
]
27 Asha Lalit Jain ]
age 46 years ]
]
all adults Indians inhabitants having ]
residing at Flat No.201 and 202 ]
“B” Wing, Megh Bldg., situate at ]
Junction of Factory Lane, S.V.Road ]
Borivali(West), Mumbai 400 092 ]
]
28 Navnitbhai Manilal Shah ]
age 57 years ]
]
29 Dhanlaxmi Navnitbhai shah ]
age 55 years ]
]
both adults Indians inhabitants having ]
residing at Flat No.203 and 204 ]
“B” Wing, Megh Bldg., situate at ]
Junction of Factory Lane, S.V.Road ]
Borivali(West), Mumbai 400 092 ]
]
30 Bhartesh J Shah ]
age 50 years ]5
31 Piyush Bhartesh Shah ]
age 47 years ]
]
both adults Indians inhabitants having ]
residing at Flat No.301 and 302 ]
“B” Wing, Megh Bldg., situate at ]
Junction of Factory Lane, S.V.Road ]
Borivali(West), Mumbai 400 092 ]
]
32 Rajubhai C Jain ]
age 48 years ]
]
33 Saraswati R Jain ]
age 46 years ]
]
both adults Indians inhabitants having ]
residing at Flat No.303 and 304 ]
“B” Wing, Megh Bldg., situate at ]
Junction of Factory Lane, S.V.Road ]
Borivali(West), Mumbai 400 092 ]
]
34 Ramnik Jivraj Saiya ]
age 53 years ]
]
35 Pravina Ramnik Saiya ]
age 50 years ]
]
both adults Indians inhabitants having ]
residing at Flat No.401 and 402 ]
“B” Wing, Megh Bldg., situate at ]
Junction of Factory Lane, S.V.Road ]
Borivali(West), Mumbai 400 092 ]
]
36 Dinesh Popatlal Rathod ]
age 33 years ]
]
37 Pushpaben Popatlal Rathod ]
age 55 years ]
]
both adults Indians inhabitants having ]
residing at Flat No403 and 404 ]
“B” Wing, Megh Bldg., situate at ]6
Junction of Factory Lane, S.V.Road ]
Borivali(West), Mumbai 400 092 ]
]
38 Krishnankant V Shah ]
age 58 years ]
]
an Indians inhabitants having ]
residing at Flat No.502 ]
“B” Wing, Megh Bldg., situate at ]
Junction of Factory Lane, S.V.Road ]
Borivali(West), Mumbai 400 092 ]
]
39 Hasumati Mulraj Parmar ]
age 56 years ]
]
40 Hitesh Mulraj Parmar ]
age 38 years ]
]
both adults Indians inhabitants having ]
residing at Flat No.503 and 504 ]
“B” Wing, Megh Bldg., situate at ]
Junction of Factory Lane, S.V.Road ]
Borivali(West), Mumbai 400 092 ]
]
41 Surbhi Manmohandas Shah ]
age 67 years ]
]
both adults Indians inhabitants having ]
residing at Flat No.601 and 602 ]
“B” Wing, Megh Bldg., situate at ]
Junction of Factory Lane, S.V.Road ]
Borivali(West), Mumbai 400 092 ]
]
42 Ketan N Shah ]
age 36 years ]
]
both adults Indians inhabitants having ]
residing at Flat No.701 and 702 ]
“B” Wing, Megh Bldg., situate at ]
Junction of Factory Lane, S.V.Road ]
Borivali(West), Mumbai 400 092 ]
]7
43 Mahendra K Soneji ]
age 53 years ]
]
both adults Indians inhabitants having ]
residing at Flat No.703 and 704 ]
“B” Wing, Megh Bldg., situate at ]
Junction of Factory Lane, S.V.Road ]
Borivali(West), Mumbai 400 092 ].. Respondents
] (Original Plaintiffs)
Mr.V A Thorat, Senior Advocate,   with Mr.Jain and Mr.G S Godbole
i/by M/s. L J Law for the Appellants
Mr. Niranjan Lapashiya with Ms.Uma Jha i/by M/s.Niranjan & Co. for
Respondent Nos. 1 to 43.
CORAM : C.L.PANGARKAR, J.
DATE  :     14
th
JANUARY 2010
JUDGMENT :­
1. This Appeal has been preferred by the Original Defendant
against whom an order of injunction has been passed.
2. The facts giving rise to this Appeal are as under :­
The   Original   Defendant/Appellant   is   a   promoter.   He
constured a building known as “Megh” at Borivali­Mumbai on Original
Plot No.78, Final Plot No.120.  He constructed the building having two
wings `A’ and `B’ on the said plot.  The Plaintiffs purchased the flats in
wings `A’ and `B’.  Both the  wings consist of Ground+7 upper floors.
Besides wings `A’ and `B’, there is in existence structure of W.C., Pump8
Room Suction Tank, Underground Water Tank and old building. In the
year 1997, the Defendant/Appellant  reprsented to the Plaintiffs that
the   Defendant   is   the   owner   of   the   property   and   he   has   requisite
permission for redevelopment of the said property.  When the said flats
were offered  for  sale it  was  also  represented  that  an  area  of    335
sq.mtrs. would be left for recreation ground and there would be space
for parking of  cars etc.   The Defendant/Appellant  therefore entered
into   agreement   for   sale   for   various   flats   and   as   stated   earlier   the
Plaintiffs purchased some of the flats. The Plaintiffs were requesting
the   Defendant/Appellant   to   form   a   co­operative   society   but   the
Defendant/Appellant  avoided  to  do  so.   According  to  the  Plaintiffs
since   the   Defendant/Appellant   avoided   to   form   a   society,   the
Defendant/Appellant has lost his right to develope the property and
use   the   TDR.   The   Plaintiffs   further   contended   that   the
Defendant/Appellant is now seeking demolition of old building which
was  standing  on the said plot  and has  decided to construct  a  new
building. The Plaintiffs submit  that  the Defendant/Appellant  has no
right   to   do   so,   inasmuch   as   the   rights   of   the   Plaintiffs   would   be
affected thereby. The Defendamt/Appellant cannot take disadvantage
of   his   own   wrong.     Further   it   is   contended   by   the   Plaintiffs   that
without   consent   of   the   Plaintiffs,   the   Defendant/Appellant   cannot9
make any addition, alteration and/or change in the sanctioned plan
and   the   Defendant’s   proposed   construction   of   new   building   is   in
breach   of   provisions   of   law.   The   Plaintiffs/Respondents,   therefore,
sought an injunction.
3. The Defendant/Appellant  resisted the said Application of
the Plaintiffs by filing an affidavit. It is the contention of the Defendant
that the Defendant has every right to make construction.  The Plan was
approved by the Municipal Corporation.  Further it is the contention of
the Defendant that the old building was in occupation of the tenants
and   the   tenants   have   recently   vacated   that   building   and   due   to
vacation of  that building, an additional FSI  has become available to
the Defendant.  The Defendant has therefore  a right to use the said
FSI   and   therefore   intends   to   make   that   construction.   It   is   also
contended by the Defendant  that  major  part  of  construction is over
and  the  Plaintiffs  have  approached  the Court  deliberately after  the
major part of the construction is over.  It is contended that this is being
done by the Plaintiffs in order to pressurise the Defendant.  Further it
is contended that the injunction relief being an equitable, the Plaintiffs
should have promptly approached the Court.10
4. The   learned   Judge   of   the   trial   Court   after   hearing   the
parties found that the Plaintiffs were entitled to an injunction as they
have   made   out   a   prima   facie   case.     Holding   so,   he   has   granted
injunction  in  favour  of  the Plaintiffs.   Being  aggrieved  by the said
order, the Defendant/Appellant has preferred this Appeal.
5. I   have   heard   the   learned   senior   counsel   for   the
Appellant/Defendant   and   the   learned   counsel   for   the
Respondents/Plaintiffs.  The Defendant is a promoter/owner of a plot
admeasuring 2642 sq.mtrs. The Defendant  constructed one building
having two wings consisting of Ground+7 upper floors.  The plans of
Wings   A   and   B   were   approved   way   back   in   1993.   Certificate   of
occupation was  issued by the Municipal Corporation in 2002.   The
Plaintiffs purchased their respective flats in these two wings. It is the
contention of the Plaintiffs that the Defendant/Appellant had shown
approved plan to the Plaintiffs and in that  plan one old residential
building, W.C. etc were shown.  It is also their contention that the old
building, the WC and other small structures were in fact shown to be
retained and yet the Defendant has now demolished the old building,
the WC etc and has undertaken construction of new building which is
an additional structure.11
6. The Defendant contended that  as a promoter /developer,
the land and the FSI vests in it, it has a right to make construction.  It
was also contended that the construction sought to be made is in no
way illegal, since the Municipal Corporation has approved the plan of
the new additional building.  There is no dispute about the fact that
the old building was in occupation of the tenants and the tenants have
now vacated the said old building. There is also no dispute about the
fact  that  under  the DCR besides actual FSI, an excess FSI  becomes
available to the developer and he can make use of it.
7. The Plaintiffs mainly contended that once the building to
be constructed on a plot is occupied by the purchasers, the developer
cannot make any construction on the said plot without  consent of the
flat owners. The Appellant/Defendant also mainly contended that the
flat  owners  have  no  business  to  object  in  view of  the  insertion  of
Section   7A   of   the   Maharashtra   Ownership   Flats   Act   and   also   the
amendment whereby the words “whereas after the registration of the
society the residual FAR shall be available to society” are deleted from
Clause 4 of  the model agreement  under the rules framed under the
Act.  The Gazette Notification dated 6/3/1997 goes to show that the
said words are deleted from the clause 4.   The society is not as yet12
registered is a fact.  This model agreement has a statutory force is also
not disputed.  Clause 4 now says that untill society is registered, the
said residual FSI shall vest in the promoter.
8. The Government was required to insert Section 7A in the
act so as to over come the interpretation put by the Court in the case
of  Kalpita   Enclave   Co­operative   Housing   Society   Ltd.   v.   Kiran
Builders Private Ltd, reported in  1986 Mh.L.J. 110  and to explain
what  the legislature actually intended. Section 7 was interpreted in
Kalprita’s case to mean that the promoter is prohibited from making
any   construction   once   the   promoter   hands   over   the   flats   to   the
purchasers.  The amendment makes it clear that  consent of the flat
purchasers   was   never   applicable   to   the   construction   of   additional
building by the promoter.  By the amendment, the legislature not only
inserted Section 7A to the Act  but  deleted the words  “or  construct
additional structures” from Section 7(1)(ii).  That clause reads now as
follows :­
“Section 7 :­  After plans and specifications are
disclosed   no   alterations   or   additions   without
consent of persons who have agreed to take the
flats; and defects noticed within [three years] to
be rectified
(1) After   the   plans   and   specifications   of   the13
building,   as   approved   by   the   local   authority   as
aforesaid, are disclosed or furnished to the person
who agrees to take one or more flats, the promoter
shall not make­­­­­­
(i) ……………..
(ii) any   other   alterations   or   additions   in   the
structure   of   the   building   without   the   previous
consent of all the persons who have agreed to take
the flats in such building”
9. This Court had an occasion to interprete Sections 7 and 7A
in two following decisions.  One such decision is reported in 2003(5)
Bombay Case Reporter 695  in the case of  [Ravindera Mutenja &
others v/s. Bhavan Corporation & others.].  The Court observed as
under :­
“13.  The real issue as has been noted earlier
is   what   is   the   stage   up   to   which   the
developer/owner can put up additional construction
after the building in terms of the registered plan has
been constructed and occupied. In my opinion, once
the buildings shown in the approved plan submitted
in terms of the regulations under an existing scheme
filed before the authorities under MOFA Act, have
been   completed   and   possession   handed   over,  the14
builder/owner cannot contend, that because he has
not   formed   the   society   and/or   not   conveyed   the
property by sale deed under the Act he is entitled to
take   advantage   of   any   additional   F.S.I.   that   may
become   available   because   of   subsequent   events.
That would be so at the stage the building is under
construction   or   the   building   is   not   completed
and/or   purchasers   are   not   put   in   occupation
provided   such   building   forms   part   of   the
development   plan   and/or   lay   out   plan   already
approved.  Subsequent  amendment  of   the  lay   out
plan   after   the   building   plan   is   registered   under
MOFA, without the consent, prima facie, of the flat
purchasers   would   not   be   permissible.   It   may   be
possible to accept that the development plan could
be modified as long as the right of the purchasers
and the benefits which they are entitled to including
recreational and open areas are not effected by the
revised   development   plan.   Once   the   building   is
completed and the purchasers are put in occupation
in   terms   of   plan   filed   and   the   time   to   form   the
society   or   convey   the   property   in   terms   of   the
agreement or the Rules framed under MOFA is over,
the   permission   of   such   purchasers   would   be
required.
In   the   instant   case,   the   building   completion
certificate for the plaintiff’s building, was issued in15
the year 1997. The builder/owner defendant Nos. 1,
3 and 4 had to put up the construction, based upon
the permission/license granted. The defendant Nos.
1, 3  and  4  had  to  construct  the  building  and  to
convey the title by sale deed in terms of Rule 9. If
property   had   been   conveyed,   prima   facie   the
remaining F.S.I. or F.S.I. which become subsequently
available on the facts of the case, would be to the
society to whom the land had to be convened. The
record   shows   that   the   building   was   approved   in
December, 2001. It cannot prima facie, be said that
defendants Nos. 1, 2, 4 and 5 have any rights under
which   they   are   entitled   to   put   up   an   additional
building contrary to section 7­A of the Act.
14. We may now examine the judgments of
this Court  to find out  whether the construction of
the   provisions   would   be   contrary   to   the   law   as
interpreted by this Court. The first such judgment is
in the case of (Smt. Neena Sudershan Wadia v. M/s.
Venus   Enterprises)2,   1984(2)   Bom.C.R.   505.   The
judgment is before section 7­A was introduced. The
issue   therein   involved   the   blanket   consent   or
authority   obtained  by   a   promoter  at  the  time  of
entering into an agreement for sale or at the time of
handing   over   possession   and   whether   that
amounted   to   consent   contemplated   by   section   7.
This Court held that notwithstanding the agreement16
of  sale and non registration thereof  nor  obtaining
blanket consent of the purchasers of the flat at the
time   of   entering   into   agreement   for   sale   and
delivering possession of the flat, cannot deprive the
flat   owners  of   invoking   the   provisions   of   section
7(i), (ii) of the Act as it stood before its amendment
in 1986. The promoters/builder/owners could not,
under   the   cloak   of   the   blanket   consent   obtained
under  the proforma  agreement  for  sale, carry out
the  work  of  additional structures  and  thus  set  at
naught the provisions of section 7(i), (ii). The Court
also   held   expression   additional   means   only
extension   either   vertically   or   horizontally   to   an
existing structure.
We may now consider the judgment  in (The
Mohatta Nagar Co­operative Housing Society Ltd. v.
M/s. Vishram Khimji & Sons and others)3, 1994(1)
Bom.C.R. 444. On the facts  of  that  case the land
totally   admeasured   2351   sq.   yds.   The   builders
between   1962   to   1966   sold   certain   flats.   Out  of
admitted 21 purchasers of  flats, the agreement  in
respect   of   14,   provided   for   construction   of   one
building   subject   to   construction   of   upper   floor   if
permitted by Municipal Corporation. Six flat owners
entered into an agreement which restricted the plot
of  the building to 1104 sq. yds. The original plot
with   approval   of   the   authorities   had   been   sub­17
divided  in  the year  1967. The unconstructed  plot
admeasured   1,250   sq.   yds.   F.S.I.   for   the   plot   of
1,250 sq. yds. had not been exhausted. Possession of
the plot was held to be with the owners/developers.
The suit was filed in the year 1970. Amendment to
section  7  as  also  insertion  of  section  7­A  was  in
1986. Section 7­A was introduced to clarify that the
amendment to section 7(i), (ii) was deemed never
to  apply  in  respect  of  any  additional building  or
structure constructed or to be constructed under a
scheme  or  project  of  development  in  the  lay  out
after obtaining the approval of a local authority in
accordance with the building rules or building bye­
laws or Development Control Rules made under any
law for the time being in force. On those set of facts
and   considering   the   Statement   of   Objects   and
Reasons the learned Judge observed the intention
behind   the   amendment  becomes   apparent  that   it
was to remove the impediment of new building and
set   out   as   under   “if   total   lay   out   permits
constructing  of  more  building  in  accordance  with
the   building   Rules   or   building   bye­laws   or   the
Development   Control   Rules,   where   such   proposal
for additional construction was already approved or
was   submitted   in   future   to   the   appropriate
authority…….”   Therefore   the   learned   Judge   held
that it would include not only proposals which are
already approved but also proposals which could be18
sent for approval of the local authority. On the facts
of   that   case   consistent   with   the   project   of
development   of   the   suit   plot,   the   right   of   the
defendants  was  upheld. It  may be noted that  the
planning authority had approved the sub­division of
the   plot,   before   the   amendment.   Therefore   a
building   with   necessary   permission   could   be
constructed   in   the   said   sub­division   plot.   If   this
aspects   are   considered   the   correct   ratio   of   the
judgment can be really understood.
The law may be explained thus. An owner of
the land or developer considering the provisions of
the Maharashtra Regional and Town Planning Act,
1966   and   development   regulations   framed
thereunder, if  a  scheme or  lay out  plan has  been
approved,  whether  the  building  is  constructed  or
not then the owner developer inspite of MOFA can
carry out development of such structure or building.
It   may   be   also   possible   to   hold   that   with   a
development   permission   under   development
regulations   if   obtained,   the   owner/developer   can
develop, but as long as the permission was obtained
and   could   be   legally   obtained.   If   under   the
permission granted for construction the society had
to be registered within a time frame and the land
had to convey to the society under the agreement
within a time frame and if not, within the time set19
out   under   Rule   9,   after   that   time   frame   the
owner/developer, is legally precluded from putting
up of further construction without consent. At any
rate  if  building  is  to  be  put  up  as  a  wing  of  an
existing building considering section 7, it cannot be
constructed   without   permission   of   the   flat
purchasers. There can, therefore, be no question of
further   development   by   the   owner   of   developer.
This   is   considered   in   the   judgment   in   (Kalpita
Enclave Co­op  Housing  Society Ltd. and  others  v.
M/s. Kiran Builders Pvt. Ltd. and others)4, 1987(1)
Bom.C.R. 355  :  1986  Mh.L.J. 110, as  proposition
seven.   In   (Vrindavan   (Borivali)   Co­operative
Housing   Society   Ltd.   v.   Karmarkar   Brothers   and
others)5,   1983(2)   Bom.C.R.   267   :   1982   Mh.L.J.
607, a learned Judge noted the statutory duty cast
on   the   owner/developer   and   observed   after
considering the various sections of MOFA as under
“…..All these liabilities read with further obligation
under sections 10, 11 and 12 go to show that the
promoter   is   under   a   statutory   obligations   who
should complete the and pass a conveyance to the
organization named thereunder.”
The ratio of this decision appears to be two fold.  One that whether or
not the society is formed the FSI must vest in the society, if the time to
form the society’  statutorily fixed under Rule 9’  has expired.  Time20
fixed by Rule 4 is four months.  The second ratio is that if the building
is  to be put  up as  a  wing, the permission of  the society would be
required.
10. The Division Bench of this Court in a decision reported in
2008 (6) ALLMR 550, in the case of M/s.Manratna Developers v/s.
Megh Ratan Co­operative Housing Soc. Ltd.  has observed thus :­
“Para­6 :­  Coming   to   the   question   as   to
whether the consent of the flat owners is required
by   the   developer/promoter   for   raising   the
additional   structure/building,   the   change   in
position   of   law   will   have   to   be   addressed   to.
Section   7   of   Maharashtra   Ownership   Flats   Act,
1963 (“MOFA”   for  short) was interpreted by the
Bombay   High   Court   in  Kalpita   Enclave   Co­
operative   Housing   Society   v/s   Kiran   Builders
Pvt. Ltd. reported in 1986 MLJ 110 holding that a
promoter   was   not   entitled   to   put   up   additional
structure  not  shown  in  the  original lay out  plan
without  consent  of  the flat  purchasers.   The said
interpretation   of   Section   7   by   the   High   Court
prompted   the   legislation   to   amend   Section   7.
Section  7  was  amended  with  retrospective  effect
and Section 7­A was newly inserted which was of a
clarificatory   nature.   By   amending   section   7,   the21
words or construct any additional structures were
deleted.     Section   7­A   which   was   newly   added,
clarifies the position that the consent of flat holders
in   a   building   is   not   necessary   in   respect   of
construction   in   the   scheme   or   layout,   after
obtaining   approval   of   the   local   authority   in
accordance   with   the   building   buy­laws   or
Development   Control   Rules.     Section   7­A,   thus,
does   not   enable   the   flat   purchasers   to   prevent
construction of  the additional structures once the
plan is modified and sactioned under the building
bye­laws or Development Control Rules.
“Para­11 :­ From the agreement it is revealed
that   the   parties   had   agreed   that   the   promoters
would   be   developing   the   property   in   phased
manner   and   in   accordance   with   the   sanctioned
plan or modified sanctioned plan as approved by
the concerned authority.  The entire FSI/TDR was
to be used by the Promoter to the exclusion of the
flat purchasers or the Society that they would form.
The disclosure only in regard to TDR is not made in
the agreement, as according  to the appellant  the
very concept of TDR was non­existent in the year
1988.     Thus, on that count, it  could not  be siad
that  the  appellants  have  not  made  true  and  full
disclosure as is obliged to be made by them under
clauses 3 and 4 of the agreement.”22
11. Shri   Thorat,   the   learned   senior   counsel   for   the
Appellant/Defendant submits before me that this decision lays down
the correct  position of  law and is a decision by Division Bench. He
submits that the Court clearly lays down that the flat owners have no
right to object to any additional construction that is sought to be put
up if it is approved by the municipal corporation.  But then Para 11 of
the judgment reveals  that under an agreement the construction was to
be   made   in   a   phased   manner.   The   Court   also   observed   that   all
disclosure   was   made  except    with  regard  to  the   TDR   and  such  a
concept  of  TDR was non­existent  in the year  1988.   Obviously it  is
because the construction was to be made in a phased manner and the
disclosure of  such scheme was made, the Court  found that  the flat
owners have no right to object.
12. In the instant case the learned counsel for the Respondent
submits that the construction sought to be made  was not shown to be
done in a phased manner and there was no correct disclosure of the
entire shceme with regard to its further development.  He submits that
the new proposed construction also abutts  the building in which the
Plaintiffs have purchased the flats.  The plans as I see them do not go
to show that the new proposed construction sought to be made in any23
way touches  wing A or wing B.  Although it is vehemently argued that
the new proposed building touches wing A or B, the Plan does not
show so.  The proposed construction could be said to be touching or
abutting wing A or B only  if it could be treated as part of the same
building.  Be that as it may.  It is clear to me that the new proposed
building does not abut either wing A or wing B and can be said to be
detached one.  If it is actually abutting while making construction, that
could be in breach of  sanctioned plan and for that  purpose remedy
must lie elsewhere.  However, we need to address ourselves to the two
main contentions; (1) Whether the right of the promoter is lost after
four   months   in   the   residual     FSI,   if   the   promoter   does   not   take
necessary steps to register society within one month and; (2) Whether
this case could be said to be a case where there is no disclosure of the
entire scheme by the promoter and the effect thereof.
13. I may first reproduce here the Rules 8 and 9 framed under
the Maharashtra Ownership Flats Act.
Rule 8 : Period  for  submission  of  application
for   registration   of   co­operative   society
orcompany of Flat purchasers24
Where a co­operative society or a company of
persons   taking   the   flats   is   to   be   constituted,   the
promoter   shall   submit   an   application   to   the
Registrar for registration of the co­operative society
or  the  company  as  the  case  may  be, within  four
months   from   the   date   on   which   the   minimum
number   of   persons   required   to   form   such
organisation have taken flats
1[Where the apartment takers propose to submit the
apartments to the provisions of the Maharashtra Apartment
Ownership Act, 1970, by executing Declarations and Deeds
of  Apartments as required by that  Act, the promoter  shall
inform   the   Registrar   as   defined   in   the   Maharashtra   Co­
operative Societies Act, 1960, as soon as possible after the
date on which all the apartment owners (being not less than
five)   have   executed   such   Declaration   and   Deeds   of
Apartment.]
Rule 9 : Period   for   conveyance   of   title   of
promoter   to   orgnisation   of   Flat
purchasers.
If   no   period   for   conveying   the   title   of   the
promoter to the organisation of the flat purchasers
is agreed upon, the promoter  shall (subject  to his
right   to   dispose   of   the   remaining   flats,   if   any)
execute  the  conveyance  within  four  months  from
the   date   on   which   co­operative   society   or   the25
company is registered or, as the case may be, the
association of flat takers is duly constituted.
2[When a promoter has submitted his property to the
provisions   of   the   Maharashtra   Apartment   Ownership   Act,
1970 by executing and registering a Declaration as required
by section 2 of that Act, and no period for conveying the title
of   the   promoter   in   respect   of   an   apartment   to   each
apartment­taker is agreed upon, the promoter shall execute
the   conveyance   or   deed   of   apartment   in   favour   of   each
apartment­taker   within   four   months   from   the   date   of
apartment­taker   has   entered   into   possession   of   his
apartment]
Rule 8 casts a duty on the promoter to see that the society should be
registered within four months and, Rule 9 further casts a duty on the
promoter to convey the flats to the owners within further four months.
The Appellant/Defendant  has not  done either of  the things as such.
The further question therefore is, whether as per the agreement the
property could  still be  said  to  be  vested  in  promoter  or  not.   The
legislature certainly intended that the formality of conveying the title
and   formation   of   society   must   be   completed   within   the   time   as
stipulated   so   that   an   unscrupulous     promoter   should   not   take
disadvantage of  the same.   Although  the words  “whereas  after  the
registration of  the society, the residual FAR shall be available to the
society”   are   deleted   from   clause   4   of   the   model   agreement,   the26
question   is   whether   the   promoter   can   indefinitely   postpone   the
registration of society and thus retain alleged FAR with him.  In spite
of deletion of words as stated above, neither Rule 8 nor clause 4 can
be interpreted to give an unfettered right to the promoter to postpone
registration of society and take away the right of the flat  owners to
avail FAR after four months.  If that is to be interpreted in that way,
that would defeat the intention of  the legislature to vest the society
with residual FSI and to convey the flats to the owners within further
four months.  In Ravindra Mutenja’s case, referred to above, this Court
observed as follows :­
“13. The real issue as has been noted earlier is what
is the stage up to which the developer/owner can
put up additional construction after the building in
terms of  the registered plan has been constructed
and  occupied. In  my  opinion, once  the  buildings
shown in the approved plan submitted in terms of
the   regulations   under   an   existing   scheme   filed
before the authorities under MOFA Act, have been
completed   and   possession   handed   over,   the
builder/owner cannot contend, that because he has
not   formed   the   society   and/or   not   conveyed   the
property by sale deed under the Act he is entitled to
take   advantage   of   any   additional   F.S.I.   that   may
become   available   because   of   subsequent   events.27
That would be so at the stage the building is under
construction   or   the   building   is   not   completed
and/or   purchasers   are   not   put   in   occupation
provided   such   building   forms   part   of   the
development   plan   and/or   lay   out   plan   already
approved.  Subsequent  amendment  of   the  lay   out
plan   after   the   building   plan   is   registered   under
MOFA, without the consent, prima facie, of the flat
purchasers   would   not   be   permissible.   It   may   be
possible to accept that the development plan could
be modified as long as the right of the purchasers
and the benefits which they are entitled to including
recreational and open areas are not effected by the
revised   development   plan.   Once   the   building   is
completed and the purchasers are put in occupation
in   terms   of   plan   filed   and   the   time   to   form   the
society   or   convey   the   property   in   terms   of   the
agreement or the Rules framed under MOFA is over,
the   permission   of   such   purchasers   would   be
required.
In   the   instant   case,   the   building   completion
certificate for the plaintiff’s building, was issued in
the year 1997. The builder/owner defendant Nos. 1,
3 and 4 had to put up the construction, based upon
the permission/license granted. The defendant Nos.
1, 3  and  4  had  to  construct  the  building  and  to
convey the title by sale deed in terms of Rule 9. If28
property   had   been   conveyed,   prima   facie   the
remaining F.S.I. or F.S.I. which become subsequently
available on the facts of the case, would be to the
society to whom the land had to be convened. The
record   shows   that   the   building   was   approved   in
December, 2001. It cannot prima facie, be said that
defendants Nos. 1, 2, 4 and 5 have any rights under
which   they   are   entitled   to   put   up   an   additional
building contrary to section 7­A of the Act.
The ratio of the decision is very clear in asmuch as the Court says that
the  permission  of  flat  owners  would  be  necessary  if  time  to  form
society and convey property is over  or  expired.   Admittedly, in this
case, till this day, neither there is formation of society nor covenyance
is executed in favour of the Plaintiffs..   I respectfully agree with the
proposition as laid down in the Ravindra Mutenja’s case.  If the ratio as
laid down is to be followed the result would be,  the said  TDR or FSI
was not available to the promoter /Appellant.  Shri Thorat, the learned
Senior Counsel for the Appellant/Defendant, contended that clause 19
of   the   agreement   between   the   parties   gives   right   to   the
Appellant/Defendant   to   make   extra   construction   or   additional
construction as  such  FSI  or  TDR has  become available because the
tenants have vacated the old building. This has to be considered in the
context of requirement of disclosure of the entire scheme to be carried29
out  on the lay out.   Shri Thorat, the learned senior counsel for the
Appellant,   has   submitted   that   in   the   instant   case,   there   was   no
question  of  carrying  out  any additional construction  when  the first
plan was approved as the other old building was in occupation of the
tenants and no additional construction could be made at that time. He
submits   that   in   such   circumstances,   there   was   no   question   of
disclosure at all. We have to see in what circumstances such disclosure
would be necessary and at all necessary.  In the context, it would be
necessary to refer to the decision of the Supreme Court in the case of
M/s. Jayantilal Investments v/s. Madhuvihar Co­operative Housing
Society  & ors, reported  in  JT  2007(2)  SC 368.   Shri Thorat  the
learned senior counsel for the Appellant submits that the ratio of the
decision is to be found in para 17 of the said judgment.  Para 17 reads
as follows :­
17. The   judgment   of   the   Bombay   High
Court in Kalpita Enclave case (supra) was based
on the interpretation of unamended Section 7 of
MOFA. Consequently, it was held that a promoter
was not entitled to put up additional structures
not shown in the original  lay out plan without
the consent of the flat takers. Thus, consent was
attached to the concept of additional structure.30
Section 7 was accordingly amended. Section 7A
was   accordingly   inserted   by   Maharashtra
Amending   Act   No.   36/86.   Section   7A   was
inserted in order to make the position explicit,
which according to the legislature existed prior
to 1986, implicitly. Section 7 of MOFA came to be
amended   and   for   the   purpose   of   removal   of
doubt, additional  Section 7A came to be added
by Maharashtra Act 36/86. By this amendment,
the  words  indicated  in   the  parenthesis  in  the
unamended Section 7(ii), namely, “or construct
any   additional   structures”   came   to   be  deleted
and  consequential   amendments  were   made  in
Section   7(1)(ii).   Maharashtra   Act   No.   36/86
operated   retrospectively.   Section   7A   was
declared   as   having   been   retrospectively
substituted and it was deemed to be effective as
if  the amended clause had been in force at  all
material   times.   Further,   it   was   declared   vide
Section 7A that the above quoted expression as
it   existed   before   commencement   of   the
Amendment Act shall be deemed never to apply
in   respect   of   the   construction   of   any   other
additional   buildings/structures,   constructed   or
to be constructed, under a scheme or project of
development   in   the   lay   out   plan,
notwithstanding  anything  contained  in  the  Act
or in any agreement or in any judgment, decree31
or   order   of   the   court.   Consequently,   reading
Section  7  and  Section  7A, it  is  clear  that  the
question   of   taking   prior   consent   of   the   flat
takers  does  not  arise  after  the  amendment  in
respect   of   any   construction   of   additional
structures.   However,   the   right   to   make   any
construction of  additional  structures/ buildings
would come into existence only on the approval
of  the  plan   by  the  competent  authority.  That,
unless  and until, such  a  plan  stood  approved,
the  promoter  does  not  get  any  right  to  make
additional   construction.   This   position   is   clear
when  one  reads  the  amended  Section  7(1)(ii)
with   Section   7A   of   the   MOFA   as   amended.
Therefore,   having   regard   to   the   Statement   of
Objects and Reasons for substitution of Section
7(1)(ii) by the Amendment Act 36/86, it is clear
that the object was to make legal position clear
that  even  prior  to  the  amendment  of  1986, it
was never intended that the original provision of
Section 7(1)(ii) of MOFA would operate even in
respect  of  construction of  additional  buildings.
In other  words, the object  of  enacting Act  No.
36/86 was to change the basis of the judgment
of  the  Bombay  High   Court   in   Kalpita  Enclave
case   (supra).   By   insertion   of   Section   7A   vide
Maharashtra   Amendment   Act   36/86   the
legislature had made it clear that the consent of32
flat  takers was never  the  criteria applicable to
construction   of   additional   buildings   by   the
promoters.   The   object   behind   the   said
amendment was to give maximum weightage to
the   exploitation   of   development   rights   which
existed in the land. Thus, the intention behind
the amendment was to remove the impediment
in construction of the additional buildings, if the
total   lay   out   allows   construction   of   more
buildings, subject to compliance of the building
rules   or   building   by­laws   or   Development
Control   Regulations.   At   the   same   time,   the
legislature had retained Section 3 which imposes
statutory  obligations on the  promoter  to make
full and true disclosure of particulars mentioned
in Section 3(2) including the nature, extent and
description  of  common areas  and facilities. As
stated above, sub­section (1A) to Section 4 was
also   introduced   by   the   legislature   by
Maharashtra   Act   36/86   under   which   the
promoter is bound to enter into agreements with
the flat takers in the prescribed form. Under the
prescribed form, every promoter is required to
declare the FSI  available in respect  of  the said
land. The  promoter  is also required to declare
that   no   part   of   that   FSI   has   been   utilized
elsewhere, and if it is utilized, the promoter has
to give particulars of such utilization to the flat33
takers. Further, under the proforma agreement,
the promoter has to further declare utilization of
FSI   of   any   other   land   for   the   purposes   of
developing the land in question which is covered
by the agreement.
Shri Thorat submits that the promoter is only bound to disclose that no
part  of  FSI  is utilised elsewhere.   The Supreme Court  was not  only
considering Section 7 and 7A of the Maharashtra Ownership Flats Act
but was considering the other pvosisions such as Sections 3, 4, 10 and
11 of the said Act as well as the effect of the model agreement and the
rules.  The contention of Shri Thorat that the ratio of the judgment is
to be found only in Para 17 of the said Judgment is not correct. The
ratio is to be seen upon going through the judgment as a whole. In fact
the Supreme Court observed further as follows in Para 18 to 22 of the
Judgment.
“18. Therefore,   the   legislature   has   sought   to
regulate   the   activities   of   the   promoter   by
retaining Sections 3 and 4 in the Act. It needs to
be mentioned at  this stage the question which
needs   to   be   decided   is   whether   one   building
with  several  wings  would  fall  under  amended
Section  7(1)(ii). Section  7A  basically  allows  a
builder to construct additional building provided
the  construction  forms  part  of  a  scheme  or  a34
project.   That   construction   has   to   be   in
accordance   with   the   lay   out   plan.   That
construction   cannot   exceed   the   development
potentiality of the plot in question. Section 10 of
MOFA  casts  an  obligation  on  the  promoter  to
form a cooperative society of the flat takers as
soon as minimum number of  persons required
to   form   a   society   have   taken   flats.   It   further
provides that the promoter shall join the society
in respect of the flats which are not sold. He has
to become a member of the society. He has the
right to dispose of the flats in accordance with
the provisions of the MOFA. Section 11 inter alia
provides that a promoter shall take all necessary
steps to complete his title and convey the title to
the society. He is obliged to execute all relevant
documents   in   accordance   with   the   agreement
executed under  Section 4 and if  no period for
execution of the conveyance is agreed upon, he
shall   execute   the   conveyance   within
theprescribed period. Rule 8 inter alia provides
that   where   a   cooperative   society   is   to   be
constituted,   the   promoter   shall   submit   an
application  to  the  Registrar  for  registration  of
the society within four months from the date on
which the minimum number of persons required
to   form   such   society   (60%)   have   taken   flats.
Rule 9 provides that if no period for execution of35
a   conveyance   is   agreed   upon,   the   promoter
shall,   subject   to   his   right   to   dispose   of   the
remaining flats, execute the conveyance within
four months from the date on which the society
is registered.
19. Reading   the   above   provisions   of
MOFA, we are required to balance the rights of
the promoter to make alterations or additions in
the structure of the building in accordance with
the lay out plan on the one hand vis­`­vis his
obligations to form the society and convey the
right, title  and interest  in the property to that
society.  The  obligation   of  the   promoter  under
MOFA to make true and full disclosure of the flat
takers   remains   unfettered   even   after   the
inclusion of Section 7A in MOFA. That obligation
remains  unfettered  even  after  the  amendment
made   in   Section   7(1)(ii)   of   MOFA.   That
obligation is  strengthened by  insertion of  sub­
section   (1A)   in   Section   4   of   MOFA   by
Maharashtra Amendment Act 36/86. Therefore,
every agreement between the promoter and the
flat taker shall comply with the prescribed Form
V. It may be noted that, in that prescribed form,
there   is   an   explanatory   note   which   inter   alia
states that clauses 3 and 4 shall be statutory and
shall  be retained. It shows the intention of the36
legislature. Note 1 clarifies that a model form of
agreement has been prescribed which could be
modified and adapted in each case  depending
upon the facts and circumstances of  each case
but,   in   any   event,   certain   clauses   including
clauses 3 and 4 shall be treated as statutory and
mandatory  and  shall  be  retained  in  each  and
every   individual   agreements   between   the
promoter and the flat taker. Clauses 3 and 4 of
the Maharashtra Ownership Flats (Regulation of
the Promotion of Construction etc.) Rules, 1964
are quoted hereinbelow:
“3. The   Promoter   hereby   agrees   to   observe,
perform   and   comply   with   all   the   terms,
conditions, stipulations  and  restrictions  if  any,
which may have been imposed by the concerned
local  authority at the time sanctioning the said
plans   or   thereafter   and   shall,   before   handing
over possession of the Flat to the Flat Purchaser,
obtain   from   the   concerned   local   authority
occupation   and/or   completion   certificates   in
respect of the Flat.
4. The   Promoter   hereby   declares   that   the
Floor   Space   Index   available   in   respect   of   the
said land is square metres only and that no part
of the said floor space index has been utilized by37
the   Promoter   elsewhere   for   any   purpose
whatsoever. In case  the  said floor  space  index
has   been   utilized   by   the   Promoter   elsewhere,
then   the   Promoter   shall   furnish   to   the   Flat
Purchaser all the detailed particulars in respect
of  such utilization of  said floor space index by
him. In case while developing the said land the
Promoter has utilized any floor space index of
any  other  land or  property  by  way  of  floating
floor, space index, then the particulars of  such
floor   space   index   shall   be   disclosed   by   the
Promoter to the Flat Purchaser. The residual
F.A.R.   (F.S.I.)   in   the   plot   or   the   layout   not
consumed will be available to the promoter till
the registration of the society. Whereas after the
registration   of   the   Society   the   residual   F.A.R.
(F.S.I.),   shall   be   available   to   the   Society.”
(emphasis supplied)
20. The   above   clauses   3   and   4   are
declared to be statutory and mandatory by the
legislature   because   the   promoter   is   not   only
obliged statutorily to give the particulars of the
land, amenities, facilities etc., he is also obliged
to   make   full   and   true   disclosure   of   the
development  potentiality  of  the    plot  which is
the   subject   matter   of   the   agreement.   The
promoter   is   not   only   required   to   make38
disclosure   concerning   the   inherent   FSI,   he   is
also   required   at   the   stage   of   lay   out   plan   to
declare whether the plot in question in future is
capable   of   being   loaded   with   additional   FSI/
floating FSI/ TDR. In other words, at the time of
execution of the agreement with the flat takers
the   promoter   is   obliged   statutorily   to   place
before the flat takers the entire project/ scheme,
be it a one building scheme or multiple number
of buildings scheme. Clause 4 shows the effect of
the formation of the Society.
21. In  our  view, the  above  condition  of
true   and   full   disclosure   flows   from   the
obligation   of   the   promoter   under   MOFA   vide
Sections 3 and 4 and Form V which prescribes
the  form of  agreement  to the  extent  indicated
above.   This   obligation   remains   unfettered
because the concept of developeability has to be
harmoniously   read   with   the   concept   of
registration of  society  and conveyance  of  title.
Once the entire project is placed before the flat
takers  at  the  time  of  the  agreement, then  the
promoter is not required to obtain prior consent
of the flat takers as long as the builder put up
additional  construction in accordance  with the
lay  out  plan,  building   rules   and   Development
Control Regulations etc..39
22. In the light  of  what  is stated above,
the question which needs to be examined in the
present case is whether this case falls within the
ambit of amended Section 7(1)(ii) or whether it
falls within the ambit of Section 7A of MOFA. As
stated above, under  Section  7(1)  after  the  lay
out plans and specifications of the building, as
approved   by   the   competent   authority,   are
disclosed to the flat  takers, the promoter shall
not  make any other alterations or additions in
the structure of  the building without  the  prior
consent   of   the   flat   takers.   This   is   where   the
problem   lies.   In   the   impugned   judgment,   the
High Court has failed to examine the question as
to  whether  the  project  undertaken in 1985 by
the   appellant   herein   was   in   respect   of
construction of additional  buildings or whether
the project in the lay out plan of 1985 consisted
of one building with 7 wings. The promoter has
kept  the  requisite  percentage  of  land  open  as
recreation   ground/   open   space.   Relocation   of
the tennis court cannot be faulted. The question
which the High Court should have examined is:
whether   the   project   in   question   consists   of   7
independent   buildings   or   whether   it   is   one
building with 7 wings? The answer to the above
question   will   decide   the   applicability   or   non­40
applicability   of   Section   7(1)(ii)   of   MOFA,   as
amended. The answer to the above question will
decide   whether   the   time   to   execute   the
conveyance   has  arrived  or   not.  This  will   also
require   explanation   from   the   competent
authority, namely, Executive Engineer, “R” South
Ward,   Kandivali,   Mumbai­400067   (Respondent
No. 8 herein). In the dates and events submitted
by the appellant­promoter, there is a reference
to   the   permission   granted   by   ULC   authorities
dated   16.11.1984   which   states   that   the
owner/developer shall construct a building with
7 wings. One needs to examine the application
made  by the  promoter  when he  submitted the
lay out plan in 1985. If it is the building with 7
wings intended to be constructed in terms of the
lay out plan then the High Court is also required
to consider the effect of the judgment in the case
of     Ravindra   Mutneja   and   Ors.   v.     Bhavan
Corporation  and Ors. 2003  (5)  BomCR 695  in
which the learned single Judge has held that if
a  building  is  put  up  as  a  wing  of  an  existing
building, it  cannot  be  constructed  without  the
prior   permission   of   the   flat   takers.     In   that
connection, the  High Court  shall  also consider
Permission   dated   16.11.1984   under   section
21(1)   of   ULC   Act,   application   made   to   the
competent  authority  when  initial  lay  out  plan41
was sanctioned, applications for amendments to
lay out plans made from time to time and also
agreements between promoter and flat takers.”
The Supreme Court says in Para 18 of the Judgment that Section 7A
allows   a   builder   to   construct   additional   building   provided   the
construction forms  part  of  a  scheme or  project.   Therefore what  is
necessary is that any additional construction sought to be made must
form part of the original scheme or project.  This is made clear by the
Supreme Court in Para 20 of the Judgment. The Judgment says that
the promoter is required to make disclosure concerning the inherent
FSI  and also at  the stage of  lay out  plan he is  required to declare
whether the plot in question in future is capable of being loaded with
additional FSI/floating  FSI/TDR.   Further  in  para  21, the Supreme
Court says that if the promoter places all these things before the flat
purchasers, then the permission of  the flat  purchasers would not  be
necessary.    Necessarily, therefore, if the entire scheme including the
information about TDR/FSI is not disclosed, then the promoter looses
his right to use the residual FSI.  If we look into the original plan, it
would be clear  that  the plan dislcosed construction of  one building
only  having  A  and  B  wings. The  plan  further  shows  that  one  old
building (which is now demolished) and the W.C were the structures42
which were to be retained. Thus, what was represented was that that
old building shown to the east in plan and the W.C to the north were
to be retained. It did not disclose that as and when the tenants in old
building  would  vacate the old  building, the  same  would  be  pulled
down   and   new   construction   would   be   put   up   there.     The   Plan
therefore   did   not   show   proposed   development   of   these   area   in   a
phased  manner. Had  the original lay out  plan shown the proposed
construction in a phased manner, then the promoter did have a right to
make construction of additional building without permission of the flat
purchasers. Even if we look into the judgment of Division Bench of this
Court  in   M/s.Manratna   Developers’s   case,  the  ratio  is  that    if  the
original plan shows the construction of building in a phased manner
on single plot, then the promoter is not supposed to take consent of
the flat owners. Such is not the case here.
14. It  was  then  contended  that  the  flat  owners  had  in  fact
consented to such construction and my attention was drawn to the
Minutes.  The Minitues go to show that all flat owners have not given
such consent. Hence the consent if any is not valid.  43
15. The   next   point   that   was   urged   before   me   relates   to
acquiescence.   It was submitted that injunction is an equitable relief
and such relief  is not  available to those who sleep over  their right.
There is no doubt that the large portion of the new building has come
up and the Plaintiffs  did not  approach  the Court  promptly.   In the
instant  case the construction sought  to be made is in breach of  the
provisions of law as laid down by the Supreme Court and hecne even if
there  is  a  delay  in  approaching  Court,  the  construction  cannot  be
allowed to be carried out any further.
16. In the circumstances, I do not find that the learned Judge
of the trial Court committed any error.  There is no substance in this
Appeal.  The same is accordingly dismissed. No order as to costs.
17. In view of  dismissal of  the Appeal, Civil Application No.
1495 of 2009 for stay, does not survive and the same is disposed of as
such.
[C.L.PANGARKAR, J

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