The article is authored by Ms. Neha Pandey an intern with LatestLaws.com from Himachal Pradesh National Law University.
The Madras High Court held that the portion of land shown as a common area during the development of property belongs to the owners of such facility. If any error is found in the calculation of the undivided share, the same has to be rectified by the builder.
Brief Facts:
Respondent No. 3, a developer of residential complexes, received approval for a plan to build roughly 77 apartments on land next to Sir C.P. Ramaswamy Road in Alwarpet, Chennai, in 2001.
In a memorandum with M/s. SRA Systems, Respondent No.3 planned to build a software technology park with a built-up area of around 200,000 square feet on the aforementioned site.
Hence, SRA Systems paid Rs. 20,00,000/- in advance. However, SRA Systems pulled out of the deal even before the required authorization could be obtained.
However, in accordance with the planning authorization, Respondent No. 3 sold the residential apartments as well as the requisite undivided share of the property to various allottees.
While the process of execution of the sale deeds was on, a neighbour filed a Writ Petition seeking stoppage of construction. Around that time, 38 sale deeds were executed in respect of the undivided share of the land. The Court disposed of the said Writ Petitions with certain directions on the nature of the pile foundation that was to be done for the purpose of erection of the entire structure. Hence, the developer was forced to give up the plan to construct basement floors.
Thereafter, a revised plan was submitted by Respondent No. 3 and it was agreed that a Non-FSI building would come up on a property abutting Sir C.P. Ramaswamy Road. According to Respondent No.3 the Non – FSI area does not form part of the common area and it had not collected monies either for the value of the land or for the building.
Respondent No. 3 claimed ownership over the land and the Non – FSI building and sold the same to Respondent No.2. Further, Respondent No.2 let the same for the non-residential purpose to M/s. Sabari Super Markets Pvt. Ltd. Hence, a writ petition was preferred by the Petitioner claiming violation of planning permission and direction to restore the building as per the approved plan was sought.
The Division Bench directed the owner and the builder to indicate the time within which the building would be restored to its original use. Respondent No.3 requested 6 months and additionally filed an application for retention of use of the building as a commercial building, which was rejected.
The present writ petition has been preferred by the Petitioner Association seeking direction to hand over possession of the building to the Association.
Contentions of Respondents No. 2 and 3:
It was argued that the Petitioner cannot claim ownership over Non – FSI structure as it was not conveyed to the purchasers of the apartments.
Contentions of the Petitioner:
It was contended that Respondents specifically undertook to restore the Non – FSI block to its original user and conveyance of the same to Respondent No. 2 is against the sanctioned planning permission. The non-FSI block was not a salable area.
Observation of the Court:
It was noted that Respondent, a well-known builder, was not a rooki. It was observed that Respondent No.3 deceived the purchasers by using the incorrect formula to determine the undivided share of the land.
It was opined that generally the calculation for undivided share is done by dividing the land area by the total constructed area and multiplying it by the size of the apartment.
Respondent No. 3 artificially increased the built-up area and ensured that flat owners did not get the actual entitlement of the undivided share in the land. Further, the Bench expounded that no promoter charges for the land and the building separately, and therefore, the contention that the landowners did not pay for the remaining undivided share cannot be accepted.
Further, the High Court noted that the undertaking by the Respondent to restore the building was binding on them, and hence, ownership of the same cannot be claimed. It was held that the sale to Respondent No.2 was invalid and declared void.
The Court propounded that the land belongs to the owners of the common facility once the land is shown as a common area. If any error is found in the calculation of the undivided share, the same has to be rectified by the builder.
The decision of the Court:
The Court directed the builder to ensure the execution of rectification deeds for an undivided share in favor of each individual flat owner, and any stamp duty payable on such rectification should be borne by the individual flat owners. The vacant Non-FSI block was handed over to the flat owners’ association. Accordingly, the writ petition was disposed of.
Case Title: Abbotsbury Owners’ Association v. The Member Secretary, Chennai Metropolitan Development Authority
Coram: Hon’ble Justice R. Subramanian and Hon’ble Justice K. Kumaresh Babu
Case No: W.P.No.5765 of 2020
Advocate of the Petitioner: Adv. Mr. N. Muralikumaran
Advocates of the Respondent: Advs. Ms. P.Veena Suresh and Mr. S. Sundaresan
Read Order @LatestLaws.com
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