| Headnote |
Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 with Amending Act 36/86; ss. 3, 4, 7(1), 7(A), 10 and 11/Maharashtra Ownership Flats (Regulation of the Promotion of Construction) Rules, 1964; Clauses 3 and 4:Rights and obligation of a promoter - Sale of flats - Agreement between promoter and buyers of flats - Construction of additional structure - Consent of flat owners - Requirement of - Held: Amendment in Section 7 made and s. 7-A introduced by amending the Act to make position explicit which according to Legislature existed implicitly before amendment - Obtaining of prior consent by flat owners not required for constructing any additional structure - However, approval of the plan by competent authority necessary - In terms of clauses 3 and 4 of Rules, it is statutory and mandatory on the part of promoter to give details of land amenities, facilities and also to make full and true disclosure of development potentiality of the plot - High Court has failed to examine the question as to whether the promoter had undertaken the project in question for construction of additional building or for construction of one building with 7 wings - Answer to the question would decide about applicability of amended provisions of the Act, as amended and also as to whether time to execute the conveyance arrived at or not - Hence, matter remitted to High Court for reconsideration - Urban Land Ceiling Act, 1976 - s. 2(1).Respondent no.1, a Co-operative Society and its members instituted a suit against the appellant-promoter for conveyance, injunction restraining the promoter from putting up further constructions and questioning the validity of the sanction given by the competent authority to the amended plan under which the competent authority sanctioned additional 2 wings applying the newly available norms. Trial Court partly decreed the suit, permitting the appellant-promoter to complete construction as per the amended plan.The trial court gave a period of three years to him for executing conveyance in favour of the Co-operative Society under the provisions of Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 (MOFA). Aggrieved, the Co-operative Society preferred an appeal before the High Court. A cross appeal was preferred by the appellant-promoter. High Court allowed the appeal filed by the Co-operative Society and dismissed the appeal filed by the appellant directing him to convey right, title and interest and execute all relevant documents in respect of Madhu Vihar Scheme in favour of the Co-operative Society and appellant was restrained permanently from making any construction over the suit plot situated at Kandivali (West), Mumbai inter alia holding that under section 7 of MOFA the appellant was prohibited from putting up additional constructions after the plan stood disclosed to the flat takers; that the promoter was not entitled to make any alteration in the structure without prior consent of the flat takers; that the promoter could not make any additions in the structure of the building without the prior consent of the society and that under Section 7 A of the amended Act, the prohibition was not to apply in respect of the construction of any other additional building or structure constructed or to be constructed under a scheme or a project of development in the lay out plan; and that the appellant-promoter was not entitled to derive any benefit from Section 7A of MOFA and, he was not entitled to construct additional building in the suit plot. Hence the present appeal. Appellant contended that Section 7 of MOFA enjoined the promoter, inter alia, not to construct any additional structure without the consent of the flat takers; that the State Legislature imposed such a restriction on the promoter contrary to the object of the Act and, consequently, the legislature stepped in to change it by· enacting the Amending Act No. 36/86 and making it effective retrospectively; that the Amending Act deleted the restriction and left the promoter free to construct any additional structure without obtaining the consent of the flat takers in the building; that the underlying purpose of the amendment is that maximum possible housing as per the prevailing by-laws should be available to enable the maximum number of members of the public to be accommodated therein and that the individual rights of flat takers should not be allowed to come in the way of achievement of this public purpose; that the object behind amending Section 7 and Section 7 A is to enable the promoter to construct an additional structure; that the object behind the amendment is to ease the problem of shortage of housing; that any other interpretation would defeat the very purpose of the amendment to Section 7 and Section 7A of the Act; that on A facts, relying on the lay out plans, that even under the initial lay out plan of 1985, 7 wings were to be constructed; that the sanction obtained by the appellant for construction of 5 + 2 wings on the suit plot was in terms of the original Plan sanctioned when 7 wings stood sanctioned; and that in the facts and circumstances of this case, the amended provisions of Sections 7 and 7A of MOFA were applicable and, consequently, the appellant was not obliged to execute a conveyance in favour of the society 1 till the appellant is in a position to fully exploit the development potentiality of the suit plot.Respondent no.1-Society submitted that under MOFA there are two c concepts, namely, developeability and conveyance; that the two concepts operate in different fields and, therefore, Section 7 and 7 A cannot override Sections 10 and 11 read with the relevant rules; that under Section 3(m)(iii) and (iv) a promoter is required to disclose the nature, extent and description of the common areas and facilities in its advertisement/ brochure; that section 4(1) requires a promoter to enter into a written agreement in the prescribed form; that the residual FSI in the plot or the lay out not consumed will be available to the promoter till the registration of the society. However, after registration of the society the remaining FSI shall be available to the society; that Section 7A stood inserted in MOFA vide Maharashtra Amending Act 36/86 and by the same Amending Act Section 4(1A) was also inserted and, therefore, Section 7 A has to be read with Section 4(1A); that Section 7 A does not give to the promoter the right of developeability in eternity; that the lay out plan as well as the NOC obtained by the promoter from the authorities was to construct a building with 7 wings; that Section 7 A was not applicable to the present case since in the present case the scheme consisted of one building with 6 to 7 wings; that Section 7 A applies when there is a project or scheme which indicates phase wise development of a large plot made known to the intending flat takers; that Section 7 A in such cases does not empower the intending flat takers to prevent construction of additional building according to such scheme; that Section 7 A does not confer any additional benefits or rights to a promoter to construct additional building which did not form part of the scheme/project in the lay out disclosed to the flat takers; that the NOC obtained by the promoter from the Urban Land Ceiling Authorities (ULC) read with the lay out plan/ block plan of 1985 as well as the agreements with the flat takers showed that the scheme/ project/ lay out was in respect of only one building with different wings; that the lay out plan does not indicate phase wise development; and that the agreement with the flat takers indicated the scheme for only one building and in the circumstances, Section 7 A is not attracted.Amicus Curiae submitted that it is not open to the builders to insert clauses in the agreement with the flat takers stating that conveyances will be executed only after the entire property is developed; that the contention of the promoter in the present case is that its obligation to form society and execute a conveyance only after completion of the scheme is misconceived because under Sections 10 and 11 when the builder enters into an agreement with the flat takers he is required to form a co-operative society as soon as the minimum number of flat takers is reached and, thereafter, the conveyance has to be executed in favour of the society within four months after the formation thereof in terms of Section 11; that MOFA has been enacted to regulate the activities of the builders and not to confer benefits on them; and that the builder could construct any additional structure without the consent of the flat purchasers. However it is pointed out that Section 7A does not have the effect of conferring any rights on builders to claim an exemption from their obligations under Sections 10 and 11 of MOFA. |
