Bombay High Court
The Wallace Flour Mill Company ... vs Smt. Nirmala Dhansukhlal Thakkar ... on 5 August, 2016
Bench: R.M. Savant
ao-272-16-(reserved)
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
APPEAL FROM ORDER NO.272 OF 2016
WITH
CIVIL APPLICATION NO. 816 OF 2016
1 M/s. Shree Parshwa Heights )
A partnership firm registered under )
Partnership Act, 1932, having its )
address at 201-A, Vertex Vikas )
Sir M. V. Road, Andheri (East) )
Mumbai 400 069 )
2 Mrs. Rashmika N. Shah ig )
3 Mrs. Pooja Chirag Shah )
4 Mr. Madanraj S. Kothari )
5 Mr. Suresh H. Kothari )
6 Mr. Mahesh H. Doshi )
7 Mr. Dhanji Ganesha Patel )
Appellant Nos.2 to 7 all are adults )
the partners of Appellant No.1 having )
their office at 201-A, Vertex Vikas )
Sir M.V. Road, Andheri (East) )
Mumbai 400 069 ) ..Appellants
Versus
1 Smt. Nirmala Dhandukhlal Thakkar )
Aged 68 years Occupation Nil )
of Mumbai Indian Inhabitant residing )
at 8/83, 84, Amita Mandir Co-op Hsg )
Society Ltd., behind Chinai College )
Varma Nagar, Azad Road, Andheri (East) )
Mumbai 400 069 ) (original Plaintiff)
2 The Wallace Floor Mill Company Ltd )
a Company incorporated and registered )
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under the Indian Companies Act and )
having its registered offie at 9, Wallace )
street, Fort, Mumbai 400 001 )
3 Mumbai Municipal Corporation of )
Greater Mumbai a Municipal )
Corporation formed under Municipal )
Corporation Act having their office )
at Mumbai Mahanagar Palika Building )
Fort Mumbai )
4 Amita Mandir Co-op Hsg Society Ltd. )
A society duly registered under Co-op )
Society Act having their address at )
8, Amita Mandir Building, behind )
Chinai College, Varma Nagar, ig )
Azad Road, Andheri (East) )
Mumbai 400 069. )
5 Amit Mandir (seven) Co-op Hsg. )
Society Ltd., )
A society duly registered under Co-op )
Society Act having their address at )
7, Amita Mandir Building, behind )
Chinai College, Varma Nagar, )
Azad Road, Andheri (East) )
Mumbai 400 069. ) ..Respondents
(Nos. 2to 5 are original
Defendant Nos.1 & 9 to 11
Mr. Pravin Samdhani Senior Advocate a/w Mr. Sanjay Jain a/w Mr.
Hemant Mehta i/b Mehta & Co. for the Appellants
Mr. D.D. Madon, Senior Advocate a/w Mr. Sandeep Dadwal i/b Mr.
Prakash Mahadik for the Respondent No.2
Mr. G. S. Godbole a/w Mr. A. R. Mishra for the Respondent No.1
Mrs. M. R. Bhoir for the Respondent No.3
Mr. Sandesh Patil for the Respondent Nos.4 and 5
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WITH
APPEAL FROM ORDER ST. NO.35261 OF 2015
WITH
CIVIL APPLICATION NO.803 OF 2016
1 The Wallace Floor Mill Company Ltd )
a Company incorporated and registered )
under the Indian Companies Act and )
having its registered offie at 9, Wallace )
street, Fort, Mumbai 400 001 ) ..Appellant
(original Defendant No.1)
Versus
1 Smt. Nirmala Dhandukhlal Thakkar )
Aged 68 years Occupation Nil )
of Mumbai Indian Inhabitant residing
ig )
at 8/83, 84, Amita Mandir Co-op Hsg )
Society Ltd., behind Chinai College )
Varma Nagar, Azad Road, Andheri (East) )
Mumbai 400 069 ) (original Plaintiff)
2 M/s. Shree Parshwa Heights )
A partnership firm registered under )
Partnership Act, 1932, having its )
address at 201-A, Vertex Vikas )
Sir M. V. Road, Andheri (East) )
Mumbai 400 069 )
3 Mrs. Rashmika N. Shah )
4 Mrs. Pooja Chirag Shah )
5 Mr. Madanraj S. Kothari )
6 Mr. Suresh H. Kothari )
7 Mr. Mahesh H. Doshi )
8 Mr. Dhanji Ganesha Patel )
Appellant Nos.2 to 7 all are adults )
the partners of Appellant No.1 having )
their office at 201-A, Vertex Vikas )
Sir M.V. Road, Andheri (East) )
Mumbai 400 069 )
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9 Mumbai Municipal Corporation of )
Greater Mumbai a Municipal )
Corporation formed under Municipal )
Corporation Act having their office )
at Mumbai Mahanagar Palika Building )
Fort Mumbai )
10 Amita Mandir Co-op Hsg Society Ltd. )
A society duly registered under Co-op )
Society Act having their address at )
8, Amita Mandir Building, behind )
Chinai College, Varma Nagar, )
Azad Road, Andheri (East) )
Mumbai 400 069. )
11 Amit Mandir (seven) Co-op Hsg.
Society Ltd.,
ig )
)
A society duly registered under Co-op )
Society Act having their address at )
7, Amita Mandir Building, behind )
Chinai College, Varma Nagar, )
Azad Road, Andheri (East) )
Mumbai 400 069. ) ..Respondents
Mr. D. D. Madon Senior Advocate a/w Mr. Sandeep Dadwal i/b Mr.
Prakash Mahadik for the Appellant
Mr. Pravin Samdhani Senior Advocate a/w Mr. Sanjay Jain a/w Mr.
Hemant Mehta i/b Mehta & Co. for the Respondent Nos.2 to 8
Mrs. M. R. Bhoir for the Respondent No.9
Mr. G. S. Godbole a/w Mr. A. R. Mishra for the Respondent No.1
Mr. S. D. Patil for the Respondent Nos.10 and 11
CORAM : R. M. SAVANT, J.
RESERVED ON: 15th JULY, 2016
PRONOUNCED ON: 5th AUGUST, 2016
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JUDGMENT
1 Admit. With the consent of the Learned Counsel for the parties
taken up for hearing forthwith.
2 The grant of injunction to the Plaintiffs by the impugned order
dated 31-10-2015 passed by the Learned Judge of the City Civil Court, Borivali
Division, Dindoshi Mumbai, has given rise to the filing of the above Appeals
From Order.
3 The Respondent No.1 herein is the original Plaintiff. The
Respondent Nos.2 to 5 are the original Defendant Nos.1 and 9 to 11. The
Appellants in Appeal From Order No.272 of 2016 are the original Defendant
Nos.2 to 7. Appellant No.1 is a partnership firm and the Appellant Nos.2 to 7
are its partners. By the impugned order the Appellants have been restrained
from carrying out construction work on the plot of land identified as C-6 till
final disposal of the Suit. The Appellant in Appeal From Order St No.35261 of
2015 is the original Defendant No.1. Since both the Appeals From Order
involve a challenge to the same order, they are heard together.
4 The facts involved in the above Appeals can in brief be stated
thus:
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The Defendant No.1 herein is the owner of lands totally
admeasuring 43621.40 sq.yds equivalent to 36472 sq.mt. The said lands bore
various survey numbers, however it seems that since the said lands are of the
ownership of the Defendant No.1, the said survey numbers have been given a
common CTS No.104 of Village Gundavli, Taluka Andheri, Mumbai Suburban
District. It seems that the Defendant No.1 got a lay out sanctioned in respect of
the said CTS No.104 and the said CTS No.104 was on account of the same
divided into CTS Nos.104/1 to 104/5 as per the lay out sanctioned in the year
1968. The Defendant No.1 it seems divided the entire lands i.e. 43621.40
equivalent to 36472 sq.mt into three distinct plots identified by alphabets A, B
and C. The Defendant No.1 sold and conveyed the entire land to one Keshavlal
K. Verma (for short K.K.Verma) vide agreement dated 23-11-1971. The
Defendant No.1 put the said K.K.Verma in possession of the plots including
possession of plot C-1, C-3 and C-6. The said K.K.Verma who was a developer
entered into agreements with the promoters of the proposed societies. In the
instant case the societies being the Defendant Nos.10 and 11, the sanctioned
lay out plan and the proposed building plans for the entire plot C were
disclosed to the said Chief Promoters. In the sanctioned lay out plan, plot C is
shown as consisting of plot C-1 to C-6 and plot No.C-6 is shown to be for
parking. In so far as the plot C is concerned, building Nos.7 and 8 are
constructed on plot C-1 and C-3. The construction of the said building Nos.7
and 8 is over which are the buildings of the Defendant Nos.10 and 11 societies
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which are situated on the said plots. It seems that the Defendant No.1
terminated the agreement dated 23-11-1971 entered into with the said
K.K.Verma by issuing a public notice in that regard. It seems that after the
sanctioned lay out of 18-8-1972, the said K.K.Verma had got sanctioned
revised lay out on 17-9-1974 showing the said plot C-6 which was earlier
shown for parking as open land. Thereafter there was a further revision of this
plan on 12-1-1975 wherein also plot C-6 was shown as open land. A further
revision took place on 16-5-1975 in which plan for the first time plot C-6 was
shown as open land for construction of a building. The promoters of the
societies after entering into an agreement dated 29-1-1972 with the said
K.K.Verma which is the package deal agreement in respect of sale of 82 flats,
issued allotment letters to the flat purchasers on 11-10-1976. The Defendant
Nos.10 and 11 which as indicated above are the societies registered in respect
of plot C-1 and C-3, on 12-10-1987 and 8-8-1988 under the Maharashtra Co-
operative Societies Act. It seems that on 13-11-2002 the Defendant No.1
executed a registered agreement for perpetual lease together with sale of
development rights in favour of the ICICI Bank Ltd, in respect of plot C-6
admeasuring 950 sq.mtrs with development rights to use road FSI of 1473.74
sq.mt and Transferable Development Rights (TDR). The Defendant No.1
handed over possession of the said plot to the said ICICI Bank Ltd. The ICICI
Bank Ltd in turn executed registered Deed of Assignment and Sale in favour of
the Defendant No.2 i.e. the Appellant No.1 herein on 4-9-2006 and handed
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over possession. The Defendant No.2 thereafter applied for amendment of the
lay out which was sanctioned by the Municipal Corporation of Greater
Mumbai (for short MCGM) on 20-9-2013. The MCGM also sanctioned the
amended plan for construction of a building on the suit plot as also issued the
IOD to the Defendant No.1 which was in respect of the road FSI of 1473.74
sq.mts., TDR FSI of 950 sq.mt and FSI for staircase. The MCGM issued a
commencement certificate to the Defendant No.1 on 7-3-2014. It seems that
the Defendant Nos.10 and 11 had applied for their amalgamation before the
Deputy Registrar of Co-operative Societies. The said amalgamation was
allowed by the Deputy Registrar by order dated 15-12-2014.
5 In so far as the agreement dated 23-11-1971 is concerned, entered
into between the Defendant No.1 and the said K.K.Verma, the said agreement
finds reference in the Deed of Assignment dated 26-03-1993 for Sale of a flat
in respect of a society situated in the same layout wherein the Defendant No.1
is the confirming party. The same is the case in respect of a Deed of
Confirmation dated 7-5-2004 between the Defendant No.1 and one Sharad
Shah for Sale of flat on ownership basis to which Deed also the Defendant
No.1 is a confirming party and wherein also there is a reference to the
agreement dated 23-11-1971 in the recitals.
6 The commencement of construction by the Defendant No.1 in the
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matter of digging up trenches for the purposes of putting up a building on plot
C-.6 has triggered of the filing of the instant suit being LC Suit No.2978 of
2014. The principal relief sought in the Suit is a declaration that the original
lay out plan dated 10-8-1972 sanctioned by the MCGM being Exhibit B to the
Plaint cannot be amended without the written consent of the Plaintiff being
the society member and the societies being Defendant Nos.10 and 11. A
declaration that amendment if any to the original sanctioned lay out plan
dated 10-8-1972 is without the written consent of the Plaintiff being the
society member and the societies being Defendant Nos.10 and 11, the same is
not binding upon the Plaintiff and their respective members. A further
declaration that plot C-6 is part of plot -C and the act of showing it as an
independent plot without written consent of the Plaintiff and the societies, is
illegal, unlawful and contrary to the Maharashtra Ownership of Flats Act (for
short MOFA). For a declaration that the plan dated 20-9-2013 being Exhibit I
to the plaint is contrary to the MOFA and not binding upon the Plaintiff. The
aforesaid reliefs are founded on the facts which have been stated hereinabove.
It is the case of the Plaintiff in the Suit that plot C-6 which is shown as parking
is liable to be conveyed to the Defendant Nos.10 and 11 and that the
Defendant No.2 cannot utilise the said plot for the purposes of putting up
construction by way of a building. It is the case of the Plaintiff that the
Defendant Nos.10 and 11 societies are entitled to the said plot C-6 and that
the Defendant No.2 is not entitled to enter upon, remain and put up any
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construction on the suit plot contrary to the wishes of the Plaintiff and the
societies. It is the case of the Plaintiff that the Defendant No.2 has by
misguiding the MCGM by not disclosing the right of the Plaintiff and the
societies has got the plan sanctioned in respect of the said proposed
construction. It is further the case of the Plaintiff that none of the society
members have ever consented to the Defendant Nos.1 and 2 for amending the
original sanctioned plan of the year 1972 and that the act of the Defendant
Nos.1 and 2 to get the plan sanctioned without the consent of the Plaintiff and
the other society members, is in violation and contrary to MOFA. In the plaint,
the Plaintiff has referred to the agreement dated 23-11-1971 entered into
between the Defendant No.1 and the said K.K.Verma pursuant to which
agreement the said K.K.Verma had undertaken development of the lands which
were of the ownership of the Defendant No.1. In the said Suit, the Plaintiff
filed the instant Notice of Motion for temporary injunction for restraining the
Defendant No.1 from proceeding with the construction on plot No.C-6.
In so far as the Defendants are concerned, the Defendant No.1
filed an affidavit in reply to the Notice of Motion. It was the case of the
Defendant No.1 in the said Affidavit in reply that there is no duly stamped and
registered agreement executed in terms of MOFA in favour of the Plaintiff. It
was the case of the Defendant No.1 that it is not a promoter within the
meaning of the said term in the MOFA. The Plaintiff is also not a party to the
agreement dated 23-11-1971 executed between the Defendant No.1 and
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K.K.Verma and that there is no privity of contract between the Plaintiff and the
Defendant No.1. It is the case of the Defendant No.1 that the Plaintiff has
though relied upon the sanctioned plan dated 10-8-1972 to show that plot C-6
is shown as meant for parking, the Plaintiff has suppressed the subsequent
revised sanctioned plan wherein Plot C-6 has been shown as open land for
construction of the building. The Defendant No.1 has further contended that
the agreement dated 23-11-1971 entered into between the said K.K.Verma
and the Defendant No.1 has been terminated and hence the Defendant Nos.10
and 11 could not lay a claim to any rights under the said agreement. It is
further stated in the said reply that on account of surrender of land required
for road to the MCGM the Defendant No.1 has become entitled to FSI of
1936.20 sq.mt. out of which an area of 1163.27 sq.mtrs is proposed to be
loaded on plot C-6 as per approved plan. It is further stated that the Defendant
No.1 has executed a registered Indenture of Lease in perpetuity in respect of
said FSI and plot C-6 in favour of the ICICI Bank Ltd., on 13-11-2002 and the
ICICI Bank in turn has executed the Indenture of Assignment and Sale of those
rights in favour of the Defendant No.2 on 4-9-2006.
7 The Defendant No.2 to 8 have also filed their reply to the said
Notice of Motion. It was the case of the said Defendants that the agreement
dated 23-11-1971 executed between the Defendant No.1 and K.K.Verma is not
in respect of the subject matter of the suit property i.e. plot C-6 in the lay out
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of CTS No.104/5A. It was contended that the Defendant No.1 or the
Defendant Nos.2 to 8 are not promoters in respect of the two buildings of the
Defendant Nos.10 and 11 societies. It is contended that the Defendant No.1
being the sole and absolute owner of the entire property including the suit plot
C-6, the Defendant No.1 has executed Deed of Indenture in perpetuity in
favour of the ICICI Bank on 13-11-2002 and the ICICI Bank has transferred
those rights in favour of the Defendant No.2 on 4-9-2006. It is therefore
contended that the Defendant No.2 is a bonafide lessee and transferee of
interest of the Defendant No.1 in respect of plot C-6. It was contended that the
MCGM has sanctioned and issued IOD on 20-6-2000 and it was amended on
24-7-2002. It is further contended that revised plan was sanctioned by the
MCGM on 26-11-2013 with IOD and the MCGM has issued commencement
certificate dated 7-3-2014 for construction of the building on plot C-6. It is
contended that the Defendant No.2 commenced the construction on the said
suit plot C-6 in the month of April 2014 but had to stop the construction on
account of the ad-interim order dated 16-12-2014. The Defendant Nos.2 to 8
have denied all the contentions of the Plaintiff and have sought the dismissal
of the Notice of Motion.
8 In so far as the Defendant Nos.10 to 11 are concerned, they have
supported the Plaintiff's case and have referred to the agreement executed by
the said K.K.Verma in favour of the Chief Promoters. It was contended that
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since the agreement dated 23-11-1971 has been acted upon by the said
K.K.Verma by constructing the buildings and entering into an agreement with
the Chief Promoters of the Societies, the said agreement could not have been
cancelled after the said development has taken place. The Defendant Nos.10
and 11 contended that since the development is complete, they are now
entitled to the conveyance of the said plot C-6. The Defendant Nos.10 and 11
have adverted to the application for deemed conveyance filed by them under
Section 11 of the MOFA. It was stated that the societies have never given
consent or permission in respect of the development on plot C-6 and that the
entire attempt of the Defendant No.1 is to grab Plot C-6. The said Defendant
Nos.10 and 11 are societies of which the Plaintiff is a member have therefore
unequivocally supported the case of the Plaintiff.
9 The Trial Court considered the said Notice of Motion and by the
impugned order dated 31-10-2015 has partly allowed the same to the extent
of restraining the Defendant Nos.1 and 2 or their servants, agents and persons
claiming through them from carrying out any construction on the plot of land
C-6 till the final disposal of the Suit. The Trial Court however rejected the
relief sought vide prayer clause (b) of the Notice of Motion. The gist of the
reasoning of the Trial Court was that in view of the agreement dated 23-11-
1971 executed between the Defendant No.1 and K.K.Verma, the Defendant
No.1 who is the owner of the property in question can be said to have caused
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the construction of the buildings through the said K.K.Verma and therefore
having regard to the definition of "promoter" as postulated in Section 2(c) of
the MOFA, the Defendant No.1 qualifies as promoter within the meaning of the
said term in the MOFA. The Trial Court has further observed that under the
agreement dated 23-11-1971 the Defendant No.1 was obligated to execute a
Conveyance in favour of the societies having regard to Section 4 of the MOFA.
The Trial Court also observed that prima facie the agreement dated 23-11-
1971 cannot be terminated legally as the said agreement can be said to be an
irrevocable agreement considering the object and intent of the said agreement.
The Trial Court in respect of the termination of the said agreement has
observed that since K.K.Verma had already constructed the buildings and sold
them to the Chief Promoters of the co-operative societies, it was not necessary
for the said K.K.Verma to file a Suit challenging the said termination. The Trial
Court has also observed that the said K.K.Verma had utilised the entire FSI of
the said plot-C. In so far as whether the consent of the Plaintiff and the
Defendant Nos.10 and 11 societies are concerned, the Trial Court referred to
the agreement entered into by the said K.K.Verma with the promoters of the
Defendant Nos.10 and 11 in which agreement number of buildings with floors
and number of flats to be constructed as per the plan were mentioned. The
Trial Court further observed that in the said agreement it was mentioned that
the said K.K.Verma will construct separate additional floors to the buildings
and not a separate building if additional FSI became available. The Trial Court
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on the said basis concluded that the said development carried out by the said
K.K.Verma could not be termed as a phase wise development.
10 The Trial Court thereafter adverted to the approved plan dated
10-8-1972 and the amended plan dated 16-5-1974 in which plan for the first
time plot C-6 earlier shown for car parking was shown for building. The Trial
Court observed that there was nothing on record to show that the said plan
was amended after the consent of the flat purchasers i.e. the Plaintiff and the
Defendant Nos.10 and 11. The Trial Court having regard to the approved plan
dated 10-8-1972 as well as the approved plan dated 8-10-1972 wherein the
plot C-6 is not shown for the purposes of construction of additional building
held that the consent of the Plaintiff and the Defendant Nos.10 and 11 was
necessary for carrying out construction on plot C-6. The Trial Court found fault
with the Defendant No.1 in not conveying the property to the Defendant
Nos.10 and 11. The Trial Court observed that if the Defendant No.1 had
conveyed the said plot C-6 and the two buildings thereon in time, the
Defendant No.1 could not have any right or interest therein. The Trial Court
lastly observed that K.K.Verma had already utilised the full FSI while
constructing the two buildings on plot C-1 and C-3 and that as per the
agreement dated 23-11-1971 the entitlement of the Defendant No.1 was only
to the price on the basis of the built up area as per FSI and that the said
agreement does not in any manner show that the Defendant No.1 had right to
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use the FSI of the plot or even to claim the same save and except to claim
interest on the due consideration amount from the said K.K.Verma if he failed
to pay the price as agreed upon. The Trial Court therefore concluded that at
the prima facie stage there is no document/agreement to show that K.K.Verma
had kept the right to construct the building on plot C. The Trial Court
therefore held that the Plaintiff had proved prima facie case that without the
consent of the Plaintiff and the Defendant Nos.10 and 11 the additional
building could not be constructed on plot-C including plot C-6. In so far as the
grant of interim reliefs is concerned, the Trial Court was of the view that the
interim injunction was required to be granted to see to it that the situation
does not turn irreversible and that the Plaintiff's rights are protected pending
the Suit. The Trial Court has accordingly as indicated above partly allowed the
Notice of Motion.
Submissions on behalf of the Defendant No.2 by the Learned Senior
Counsel Mr. P. K. Samdhani
(i) That in the instant case there is only an allotment letter in favour
of the Plaintiff and there is no agreement entered into between the K.K.Verma
and the Plaintiff which can be referable to the provisions of MOFA
(ii) That the allotment letter issued to the Plaintiff is in the year 1976
and since at the said time, the amended sanctioned plan dated 16-5-1975 was
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on record. The case of the Plaintiff would have to be considered in the context
of the said amended sanctioned plan and not as per the plan which was
prevailing in the year 1972. In the amended sanctioned plan plot C-6 is shown
for the purposes of a building and therefore the consent of the Plaintiff or the
Defendant Nos.10 and 11 was not required to be taken. Reliance is placed on
the Judgment of this court in Zircon Venture Co-operative Housing Society
Ltd. Vs M/s. Zircon Ventures reported in 2014(4) Mh.L.J. 481.
(iii) That there is no privity of contract between the Plaintiff and the
Defendant No.2 so as to create a right in the Plaintiff qua the Defendant No.2
(iv) Since the agreement dated 23-11-1971 entered into between the
Defendant Nos.1 and 2 has been terminated by the Defendant No.2, the
Plaintiff cannot claim any right on the basis of the said agreement dated 23-
11-1971.
(v) That the Defendant No.2 is seeking to avail of the TDR which has
been generated on account of the development plan reservations which were
in the layout and not seeking to bring any TDR from outside for the purposes
of putting up construction on plot C-6 and therefore the Plaintiff cannot have
any objection to the utilisation of the TDR by putting up a building on the said
Plot C-6.
Submissions on behalf of the Appellant in A. O. St. No.35261 of 2015 by
the Learned Senior Counsel Mr. D. D. Madon
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Since the Appellant in the above Appeal has filed the same
challenging the findings recorded in the impugned order in so for as the
Defendant No.1 are concerned, the Learned Senior Counsel made the
following submissions :
(i) That the findings recorded by the Trial Court that the full FSI of
plot C has been utilised is erroneous.
(ii) That the Trial Court has erred in recording the finding that the
agreement dated 23-11-1971 has not been terminated properly.
(iii) That the finding of the Trial Court in respect of the possession of
plot C-6 is erroneous having regard to the fact that the Defendant No.2 had
commenced construction on the said plot, which had given rise to the filing of
the suit.
(iv) That the Trial Court had erred in holding that the Defendant No.1
is a promoter within the meaning of Section 2(c) of the MOFA.
Submissions made on behalf of the Respondent No.1 i.e. the original
Plaintiff by the Learned Counsel Mr. G. S. Godbole :-
(i) That it is in terms of the agreement dated 23-11-1971 that the
development was carried out and since in the plan annexed to the said
agreement plot C-6 was shown for parking and thereafter even in the
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sanctioned plan of the year 1972, the purposes of plot C-6 was shown for
parking, the Defendant No.1 cannot be permitted to construct a building on
plot C-6 without the consent of the Plaintiff and the Defendant Nos.10 and 11.
(ii) That the package deal agreement dated 10-7-1972 under which
the Chief Promoter of the Defendant Nos.10 and 11 had agreed to purchase 82
flats governs the relationship between the parties and the said agreement is
therefore referable to Section 4 of the MOFA. Since as per the said agreement
additional FSI could only be used by putting up additional floors on the
existing building, the Defendant No.2 cannot be permitted to construct an
independent building on plot C-6.
(iii) That the utilisation of plot C-6 for the construction of building
amounts to breach and violation of the package deal agreement dated 10-7-
1972 as the Defendant No.2 has not obtained the consent of the Plaintiff and
the Defendant Nos.10 and 11.
(iv) That the Deed of Assignment dated 1993 and thereafter the Deed
of Confirmation executed in the year 2004, refer to the agreement dated 23-
11-1971 entered into between the Defendant No.1 and the said K.K.Verma
and hence there is an acceptance of the fact by the Defendant No.1 that the
development including the construction of the buildings on plot C-1 and C-3
was as a result of the said agreement dated 23-11-1971 and therefore the
contention raised on behalf of the Defendant No.1 that the said agreement
dated 23-11-1971 was terminated is of no avail in so far as the obligations
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under MOFA are concerned.
Submissions on behalf of the Defendant Nos.10 and 11 by the Learned
Counsel Mr. S.D. Patil.
The Learned Counsel appearing for the Respondent Nos.10 and 11
i.e. the Defendant Nos.10 and 11 supported the contentions raised by Mr. G. S.
Godbole, however in addition the Learned Counsel submitted as under:
(i)
That the plan annexed as Exhibit B to the Suit in question i.e. the
sanctioned plan dated 10-8-1972 shows that the entire FSI of plot C has been
utilised for construction of the building on plot C-1 and C-3 and therefore no
FSI was remaining to be utilised in so far as plot No.C is concerned. The
package deal agreement dated 10-8-1972 entered into between the said
K.K.Verma and the Defendant Nos.10 and 11 contains covenants governing the
construction of the buildings on plot C-1 and C-3, the utilisation of the
additional FSI if becomes available, and the conveyance to be executed in
favour of the Defendant Nos.10 and 11 societies. The Defendant No.2 is
therefore not entitled to put up a building on plot C-6.
CONSIDERATION:
11 Having heard the Learned Counsel for the parties, I have
considered the rival contentions. The substratum of the case of the Plaintiff in
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the above proceedings is that the Defendant No.2 cannot put up construction
on plot C-6 without the consent of the Plaintiff and the Defendant Nos.10 and
11. In the aforesaid background the two agreements which are in contention
i.e. the agreement dated 23-11-1971 entered into between the Defendant No.1
and the said K.K.Verma and the package deal agreement dated 10-7-1972
entered into between the said K.K.Verma and the promoters of the Defendant
Nos.10 and 11 societies would have to be looked into. In so far as the
agreement dated 23-11-1971 is concerned, clauses 1, 2, 6, 11, 12, 17(a),
17(b) and 17(c) are relevant and are reproduced hereinunder for the sake of
ready reference :
1) The vendors shall sell to the purchaser and
the purchaser shall purchase from the Vendor
ALL THOSE pieces or parcels of land or ground
together with the buildings and structures
standing thereon situate lying and being at
Andheri in the Registration Sub-District Bandra
District, Bombay Suburban (within Greater
Bombay) containing by admeasurement
43621.40 square yards equivalent to 36472
square meters or thereabouts and more
particularly described in the schedule hereunder
written delineated on the plan hereto annexed
and thereon surrounded by a red coloured
boundary line free from all encumbrances.
(2) The purchase price payable by the
purchaser to the Vendor shall be determined at
the rate of Rs.18,000/- (Rupees Eighteen) per
square foot of the built up area as may be
available to the Purchaser (on the basis of the
FSI (floor space index) applicable to the said
land hereditaments and premises described in
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the schedule hereunder written) for the purpose
of additional construction or constructions to be
made thereon as or the Rules of the Municipal
Corporation for Greater Bombay including the
floor space index, if any available in respect of
the area covered by the internal roads.
(6) The Vendor had submitted to the
Municipal Corporation of Greater Bombay for
sanction in the year 1967, a layout of the
Vendor's entire property described in the
schedule hereunder written and much layout has
been duly approved by the Municipal
Corporation of Greater Bombay. The said layout
is as appearing on the said plan hereto annexed.
The area of the said land described in the
schedule hereunder written shall be ascertained
by survey to be made jointly by the Architects or
Surveyors of the Vendor and the Architects of
Surveyors of the Purchaser. If the area
determined on such joint survey shall be less
than the area of the said land on the basis
aforesaid approved layout the purchaser shall
accept the area of the said land on the basis of
the aforesaid approved lay to be correct. If the
area of the said land ascertained on such joint
survey is more than the area thereof on the bassi
of the aforesaid approved layout, the purchaser
shall get the correct area sanctioned by the
Municipal Corporation so as to get the said
approved layout property modified and shall
thereupon be bound by the area to determined
by the joint survey. Soon after the execution of
this Agreement the purchaser shall submit to the
Municipal Corporation Greater Bombay for
sanction plans for the construction of building as
per the requirements of the purchaser. However,
since the property stands in the name of the
Vendor, such plans will be submitted in the name
of the Vendor but all costs, charges and expenses
for the preparation of such plans and for
obtaining the sanction (including payment of any
deposit) shall be borne and paid by the Purchaser
alone. The Vendor shall be entitled to have such
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plans scrutinised by their own Architects. The
purchase price will be calculated at the rate
mentioned in clause 2 above on the built up area
that may be sanctioned by the Municipal
Corporation of Greater Bombay on the basis of
such plans.
(11) The Vendor and all other necessary parties
shall make and execute a proper Conveyance and
all other necessary documents to complete the
title agreed to be given in respect of the said
property and such conveyance shall be in favour
of the purchaser or his nominees including a Co-
operative Housing Society.
(12) The Purchaser shall be entitled to the
proper Conveyance and all the muniments of title
relating to the property in possession of the
Vendor.
(17)(a) On completion of the sale, the Vendor
shall put the purchaser in vacant possession of
the following portions of the property agreed to
be sold namely :-
i) Plot A sub division Nos.9, 10, 11, 12 and
13 and sub division Nos.14 and 15 (shown as
gardens);
ii) Plot B sub division Nos.4m 7 and 9 and
sub division No.10 (shown as garden)
(b) Simultaneously with the completion of the
sale, the person or persons in whose favour two
Conveyance of the said land, hereditaments and
premises described in the schedule hereunder
written is granted shall execute in favour of the
Vendor separate Leases for a period of 98 years
in respect of the existing buildings forming part
of the said property hereby agreed to be sold and
the land appurtenant to each of such buildings as
shown on the said plan hereto annexed by yellow
colour boundary lines. Such issues shall be at a
nominal rent of Rs.1/00 per year, with an
obligation on the Lessee to pay all Municipal
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taxes and other outgoings, cesses etc. in respect
of the aforesaid buildings and the respective and
appurtenant thereto. Such Lease shall contain an
option to the Lessee to renew the same for one
further period of 98 years at the same rent and
on the same terms and conditions.
(c) The Vendor as Lessee of the said existing
buildings and the land appurtenant hereto shall
have the option to negotiate with the tenants and
occupants of the said buildings and to sell to
them on what is known as ownership basis, with
the ultimate aim and object that if any of the said
building is so sold on ownership basis the
purchaser thereof shall be taken in as member by
the Cooperative Society or other Corporate body
that is to be formed in respect of rest of the
property described in the schedule hereunder
written. The Vendor shall be entitled to the full
purchase price of all such premises.
12 A reading of the aforesaid clauses of the agreement dated 23-11-
1971 discloses that the Defendant No.1 had agreed to sell to the said
K.K.Verma the entire land admeasuring 43621.40 sq.yards equivalent to 36472
sq.mtrs. with the right to construct upon the said land. The entire land was
carved out into three parts and the said three parts were identified by the
alphabets A, B, and C in the said agreement. In so far as the present case is
concerned, we are concerned with part "C". The price to be paid by the said
K.K.Verma was to be calculated on the basis of Rs.18 per sq.foot of built up
area that would be considered on the basis of the available FSI. It was
mentioned in the said agreement that the Defendant No.1 submitted a layout
plan of the entire plot of land to the MCGM which was duly approved. The
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agreement provided that the Defendant No.1 was to execute a proper
conveyance in favour of the said K.K.Verma or his nominee, including a Co-
operative Society / Societies, who would purchase the flats from the said
K.K.Verma.
13 In so far as the package deal agreement dated 10-7-1972 is
concerned, the relevant clauses of the said agreement are the recital clauses
(a), (b), (f) and (h) then clauses 1, 3, 5, 7, 9, 12 and 14 of the main
agreement are relevant and are reproduced hereinunder :
(a) The Wallace Four Mills Company Limited
(hereinafter called "the said Company) are the
absolute owners of a large property consisting of
land admeasuring approximately 36,470 square
meters (equivalent to 43,600 square yards)
together with the bungalows and other structures
standing thereon situate at Old Nagardas Road,
Andheri (East) Bombay-69 more particularly
described in the First Schedule hereinunder
written.
(b) By and under an Agreement for sale dated
23rd November 1971 made between the said
company as the Vendors and Keshavlal K. Verma
(one of the partners of the Builders) as the
purchaser, the said company agreed to sell and
the said Mr. Verma agreed to purchase the said
land, hereditaments and premises described in
the first schedule hereunder written at the price
and on the terms and conditions therein
contained.
(f) The builders have already started the
development and construction of four buildings in
Block A out of the aforesaid large property and
the said four buildings together with the land of
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Block A is sold by the builders by package deal
dated 29th January 1972, to the promoters of the
proposed co-operative society tentatively named
as Laxmi Estate Co-operative Housing Society at
the terms and conditions mentioned in the said
agreement dated 29th January 1972. The builders
have further started the development of three
buildings in Block B and the said three buildings
in Block B are also sold by the builders by a
package deal dated 10th day of July 1972 to the
promoters of the proposed Co-operative Society
tentatively named as Varma Nagar Co-operative
Housing Society, at the terms and conditions
mentioned in the said Agreement dated 10 th July
1972. The builders have also started the
development of two buildings in Block "C" out of
the abovesaid large property (the property
comprised in the said Block "C" consisting of land
admeasuring approximately about 6683.82
square meters equivalent to about 7995 square
yards including the Bungalows and structures
standing thereon) being more particularly
described in the Second schedule hereunder
written which is shown on the plan hereto
annexed thereon surrounded by brown colour
lines.
(h) The promoters desire to get registered a
Amita Mandir Co-operative Housing Society and
the promoters have requested the builders to sell
and convey to such society, by way of package
deal, the said property known as Block "C"
together with the aforesaid two new buildings to
be constructed thereon (but subject to the
obligations to give a lease in perpetuity at a
nominal rent of Rs.1/- per year in respect of the
existing bungalows in favour of the said company
and the land appurtenant thereto as also the
obligations to admit as members the occupants of
the existing bungalows if they desire to become
members of the co-operative housing society) and
subject to the other terms and conditions
hereinafter set out.
mmj 26 of 44
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1) The builders have agreed to sell and the
promoters have agreed to purchase the said land,
hereditaments and premises referred to as Block
"C" more particularly described in the Second
schedule hereunder written (but subject to the
reservations and conditions contained in the
aforesaid Agreement for Sale dated 23 rd
November 1971 and the conditions terms and
provisions hereinafter contained) together with
the two new buildings to be constructed by the
builders on the existing vacant portion of the said
Block "C" at or for the lumpsum price of
Rs.25,82,000/- (Rupees Twentyfive lacs and
eighty two thousand only). The sale of the said
property, being Block "C" together with the two
new buildings to be constructed thereon, is by
way of package deal and consequently the
promoters shall not be entitled to require or
obtain a conveyance of the said land without
being bound and liable to take the aforesaid two
new buildings to be constructed by the builders as
aforesaid. If for any reason the promoters or their
successors, fail or neglect to pay the builders the
full consideration money therein mentioned in
respect of the aforesaid package deal, the builders
shall be entitled to refuse to perform the other
obligations of the builders hereunder unless and
until the promoters or their successors pay to the
builders the full consideration money of
Rs.25,82,000/- in the manner provided for in the
agreement.
3) The builders have got prepared, through
their Architects Messrs. N.N.Parikh and Company
of Medows Street, Fort, Bombay-1, plans for the
construction of the aforesaid two new buildings.
A set of such plans, which have been seen and
approved by the promoters are hereto annexed
for the sake of identification. The location of the
proposed two new buildings is also shown on the
layout plan hereto annexed. The specifications of
the said two new buildings and the amenities to
be provided therein are set out in the Fourth
Schedule hereunder written.
mmj 27 of 44
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5) Messrs. Kanga and Co., attorneys for the
said Company who have investigated the title to
the said property, have issued their certificate of
Title dated 10th December 1971. A copy of the
said certificate of Title is set out in Fifth Schedule
hereunder written. The promoters and their
successors viz., the society to be got registered by
the promoters, shall accept the certificate of Title
issued by Messrs. Kanga and Co. and will not
require the builders to make out a marketable
title to the said property.
7) It is contemplated that a Co-operative
Housing Society is to be got registered by the
promoters and in whose favour the conveyance of
the said property described in the Second
Schedule hereunder written is to be obtained.
9) It is clearly understood and agreed that
subject to the First Legal Mortgage in favour of
the financial institution referred to in clause 8
above, the builders shall have a paramount
charge and lien over the entire property described
in the Second Schedule hereunder written
including the two new buildings to be constructed
thereon (subject of course to the Lease to be
granted as aforesaid) and until the time the
promoters or the society, as the case may be pay
to the builders in full the consideration money
referred to in clauses 1 and 2 above. The builders
shall be entitled to retain possession of the two
new buildings and all the flats and other portions
thereof as also the garage and the car parking
spaces in the compound. Neither the promoters
nor the Co-operative Housing Society nor the
members of such society shall be entitled to
claim, demand or take possession of such two
new buildings or any portions thereof or of any
garage or car parking spaces in the compound,
until the time the aforesaid consideration money
referred to in clause 1 and 2 above is paid to the
builders in full.
mmj 28 of 44
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12) The package deal contemplated by this
Agreement is in respect of a total of 82 flats of
different sizes, in the aforesaid proposed two new
buildings of the type shown in the aforesaid plan
hereto annexed. No dispute shall be raised nor
objection raised as regards the exact dimensions
or the area of the flats.
14 It is possible that the builders may be able
to plan and construct additional flats in the
proposed two new buildings, over and above the
82 flats contemplated by the annexed plans.
Similarly it may be possible that the builders may
be able to plan and construct garage and or car
parking spaces in the compound. The builders
shall be entitled to charge and the promoters and
the successors - Society, as the case may be, shall
pay to the builders price in respect of such
additional flats and garage and or car parking
spaces at the rates mentioned in the sixth
schedule hereunder written.
14 In the said agreement as can be seen a reference to the said plot
"C" wherein two buildings are to be constructed, one building being ground +
6 floors and other building being ground + 8 floors on the said plot of land.
The plot of land mentioned in block -C is admeasuring 6683.82 sq. ft.
equivalent to about 7995 sq.yards. The said agreement provides for
registration of the societies of the Chief Promoters and conveyance of the said
plot of land to be granted to the societies. The said agreement is a package
deal agreement in respect of 82 flats. It is provided in the said agreement that
it may be possible for the builders to put up additional flats in the proposed
new buildings or to plan and construct garages and car parking for which the
promoters / society shall pay for such additional flats and garages and or car
mmj 29 of 44
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parking spaces. To the said agreement the plan which has been seen and
approved by the promoters was annexed. It was also stated in the said
agreement that the location of the proposed two buildings is also shown on the
layout plan annexed to the said agreement. It was also provided in the said
agreement that a Co-operative Housing Society is to be got registered by the
promoters in whose favour the conveyance of the property described in
Schedule - II, was to be executed. Schedule- II is the property admeasuring
6683.82 sq.ft. i.e. plot notified as block -C. The said agreement is the package
deal agreement entered into between the promoters of the Defendant Nos.10
and 11 with the said K.K.Verma in respect of the purchase of 82 flats. The said
agreement identifies the plot on which the new buildings were to be
constructed wherein 82 flats were to be provided. The said agreement
mentions the consideration to be paid by the promoters for the said 82 flats,
the amenities that would be provided in the said buildings / flats. The said
agreement refers to the sanctioned plan, the location of the proposed
buildings, the location of the car parking, the formation of the societies and
the execution of the conveyance in favour of the said societies. If the
agreement dated 10-7-1972 is read as a whole, the said agreement is referable
to an agreement under Section 4 of the MOFA and the Plaintiff and the
Defendant Nos.10 and 11 are therefore entitled to seek its enforcement. Hence
the issuance of the letter of allotment to the Plaintiff in the year 1976 would
not have any significance in so far as the obligations under MOFA that are
mmj 30 of 44
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required to be fulfilled are concerned. In so far as the putting up of the
construction on the plot of land in question is concerned, there can be no
dispute about the fact that the said K.K. Verma had constructed the building
pursuant to the agreement dated 23-11-1971 entered into by him with the
Defendant No.1 who was the owner of the said property. Once that be so, the
Defendant No.1 can be said to have caused the construction of the buildings
put up on plot C and therefore can be said to be a promoter as postulated in
Section 2(c) of the MOFA. The said finding of the Trial Court at the prima facie
stage therefore cannot be found fault with.
15 Now coming to the contentious issue as to whether the Defendant
No.2 i.e. the Appellant herein is entitled to put up a building on plot C-6. In the
said context the judgments of the Apex Court and this Court would have to be
seen. In Jayantilal Investments Vs. Madhuvihar Co-op Housing Society &
Ors. reported in (2007) 9 SCC 220, the Apex Court was seized with the issue
as to whether prior consent of the flat takers was required to be taken to put
up additional construction. The Apex Court in the said judgment held that 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 puts up additional construction in accordance with the lay
out plan, Building Rules and Development Control Regulations etc., The
relevant paragraphs of the said judgment are paragraphs 15, 16, 17, 18 and 19
mmj 31 of 44
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which for the sake of ready reference are reproduced hereinunder.
"15. 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 Section 7, was
accordingly amended. Section 7A was accordingly
inserted by Maharashtra Amending Act 36 of
1986. 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 7-A came to be added by Maharashtra Act
36/86. By this amendment, the words indicated in
the parenthesis in the unamended Section 7(1)
(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 of 1986 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,
decree 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
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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 of 1986, 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 of
1986 was to change the basis of the judgment of
the Bombay High Court in Kalpita Enclave case.
By insertion of Section 7A vide Maharashtra
Amendment Act 36 of 1986 the legislature had
made it clear that the consent of 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 by-laws 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, sub-section (1-A) to Section 4 was
also introduced by the legislature by Maharashtra
Act 36 of 1986 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 FSI available in respect of the said land.
mmj 33 of 44
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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 flat 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.
16. 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 a 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 the prescribed 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
mmj 34 of 44
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9 provides that if no period for execution of 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.
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 to 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 of 1986.
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 Form V 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
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comply with all the terms,
conditions, stipulations and
restrictions, if any, which may
have been imposed by the
local authority concerned at
the time of sanctioning the
said plans or thereafter and
shall, before handing over
possession of the Flat to the
Flat Purchaser, obtain from the
local authority concerned
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
mmj 36 of 44
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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)
18. 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 make 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.
19. 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
developability 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
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and Development Control Regulations etc."
16 The judgment in Jayantilal Investments (Supra) has been referred
to in a catena of decisions of this Court. A few of the said decisions can be
gainfully referred to as under:
(i) Malad Kokil Co-operative Housing Society Ltd. Vs. The Modern
Construction Co. Ltd. reported in N.M. No.1359 in Suit No.1005 of 2011
dated 07.09.2012.
(ii) Zircon Venture Co-operative Housing Society Ltd. Vs M/s. Zircon
Ventures reported in 2014(4) Mh.L.J. 481.
(iii) Lakeview Developers & Ors. Vs. Eternia Co-operative Housing Society
Ltd & Ors. reported in 2015(5) BCR 680.
(iv) White Towers Co-op Hsg. Society Ltd. Vs. S. K. Builders & Ors.
reported in MANU/MH/0713/2008.
This Court in Zircon Ventures Co-operative Housing Society Ltd.
(Supra) had crystalised the proposition laid down in the said decisions as
under :-
"The 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
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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."
17 Hence the test laid down is that the prior consent of the flat taker
is not required if the entire project is placed before the flat taker at the time of
the agreement and that the promoters/developer puts up additional
construction in accordance with the lay out plan Building Rules and
Development Control Regulations. The converse of it would be if the builder/
developer wants to put up additional construction which is not part of the lay
out which was placed before the flat taker at the time of agreement then the
consent as required under Section 7 of the MOFA would be necessary.
18 It is in the light of the test as aforesaid that the facts of the present
case would have to be seen. As indicated above the package deal agreement
dated 10-7-1972 entered into between the said K.K.Verma and the promoters
of the Defendant Nos.10 and 11 is an agreement which is referable to Section 4
of the MOFA. Under the said agreement the promoters had agreed to purchase
82 flats in two buildings which were to be put up on plot C-1 and C-3. The
agreement vide clause (3) refers to a lay out plan. The said lay out plan was
thereafter sanctioned and is the plan which is at Exhibit B to the above paper
book wherein buildings are shown on plot C-1 and C-3 and plot C-6 is shown
for parking. The sanctioned lay out plan was revised from time to time and
ultimately by the revision which was sanctioned on 10-6-1975 plot C-6 was
mmj 39 of 44
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shown for building. In so far as the rights of the parties are concerned, the
crucial plan for the purposes of Section 7 would be the sanctioned plan of the
year 1972 wherein plot C-6 is shown for parking. The representation or the
disclosure made to the promoters of the Defendant Nos.10 and 11 societies
would therefore stand frozen in terms of the said sanctioned plan of the year
1972 and the promoters/developer would be bound by the said representation
or disclosure made in the said lay out in so far as the development to be
carried out is concerned. The contention of the Learned Senior Counsel
appearing on behalf of the Appellant that since the allotment letter is issued to
the Plaintiff in the year 1976, the situation of the year 1976 would prevail and
thereby the revised sanctioned plan dated 16-6-1975 would be applicable, in
my view, cannot be accepted. The acceptance of such a contention would
militate against the safeguards provided by Section 7 of the MOFA resulting in
there being an unfettered right in the promoter/developer to put up additional
construction as per the revised plans which is not the intent/object of the
MOFA. The judgment in Zircon Venture (supra) would therefore not aid the
Defendant No.2 to support the contention that it is entitled to put up
construction on plot C-6 in terms of the revised plan of the year 1975. To
extricate the Defendant No.2 from the situation of it being unable to utilise
plot C-6 for the purposes of putting up a building it was sought to be
contended on behalf of the Appellants that since the agreement in the instant
case is of the year 1972 which is pre the amendment to the MOFA by which
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Section 7(1)(ii) was amended and Section 7A was introduced which
amendment took place in the year 1986, there can be no such fetter by way of
seeking consent of the flat purchasers which can be applied to the Defendant
No.2. In the light of the judgments of the Apex Court in Jayantilal Investment
(Supra) as also the judgments of this Court which have been referred to
hereinabove, the said submission would have to be rejected outright.
19 A contention was raised on behalf of the Appellant that since the
agreement dated 23-11-1971 has been terminated the Plaintiff is not entitled
to any reliefs on the basis of the said agreement or the package deal agreement
dated 10-7-1972 entered into between the said K.K.Verma and the promoters
of the Defendant Nos.10 and 11. In so far as the agreement dated 23-11-1971
is concerned, there can be no dispute about the fact that the construction of the
two buildings on plot C-1 and C-3 which are the buildings of the Defendant
Nos.10 and 11, is pursuant to the said agreement dated 23-11-1971. By the
agreement dated 10-7-1972 which is the package deal agreement, 82 flats to
be constructed in the proposed buildings were agreed to be sold to the
promoters of the Defendant Nos.10 and 11. Hence in so far as the flat
purchasers are concerned, the said agreement dated 23-11-1971 has already
been acted upon by the construction of flats, which flats have been sold by the
package deal agreement dated 10-7-1972 to the promoters of the Defendant
Nos.10 and 11. Hence in so far as the flat purchasers are concerned, the
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position has became irreversible and therefore assuming that the agreement
dated 23-11-1971 has been terminated, the same would not make any
difference to the flat purchasers, so far as the their rights under MOFA are
concerned. They would be entitled to seek the enforcement of the statutory
obligations which the promoter/developer owes to them under the MOFA.
Significantly in the Deed of Assignment of a flat dated 26-03-1993, as also the
Deed of Confirmation dated 07-05-2004 in respect of the Agreement dated 10-
12-1993 to which the Defendant No.1 is a confirming party, in the recital
thereof there is a mention of the agreement dated 23-11-1971 which is
evidence of the flats covered by the said documents having been constructed
pursuant to the said agreement dated 23-11-1971. Hence the Defendant No.1
also accepts the position that it is under the said agreement dated 23-11-1971
that the buildings have been constructed in the lands owned by it. The Trial
Court having regard to the covenants of the agreement can be said to have
taken a prima facie view that the said agreement dated 23-11-1971 has not
been properly terminated.
20 In so far as the aspect of utilization of FSI is concerned, in view of
the fact that it is the case of the Defendant No.1 that the FSI became available
on account of reservations on the plot of land owned by the Defendant No.1
that is now sought to be utilised for the construction of the building on plot
C-6 the finding of the Trial court at the prima facie stage that the entire FSI of
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plot C-6 has been utilised cannot be faulted with.
21 In so far as possession of plot C-6 is concerned, the Competent
Authority i.e. the District Deputy Registrar Co-operative Societies (3), Mumbai
by order dated 27.11.2015 in the proceedings initiated by the Defendant
Nos.10 and 11 has granted deemed conveyance of the land in block 'C" by
keeping the rights of the Respondent No.5 to the land admeasuring 950 sq.ft.
with rights of development of the carpet area of 15863.32 sq.ft. under the
Deed of Assignment unaffected. Hence in so far as the plot C-6 is concerned,
the Defendant Nos.10 and 11 may have to file appropriate proceedings to seek
conveyance of plot C-6.
22 In so far as the contentions raised on behalf of the Appellant in
Appeal From Order St.No. 35261 of 2015 are concerned, in my view since the
findings rendered by the Trial Court in the impugned order can be said to be
the prima facie view of the Trial Court and since this court is in agreement with
the said prima facie view, it is not necessary to set aside the said findings.
However, it would be open for the Defendant No.1 to urge the said contentions
at the hearing of the Suit.
23 For the reasons aforestated, the exercise of discretion by the Trial
Court in the matter of grant of injunction cannot be faulted with. There is
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therefore no merit in the above Appeals from Order. The same are accordingly
dismissed.
24 Needless to state that the findings recorded and the observations
made in the instant order are only for the purposes of considering the reliefs
sought by way of the instant Notice of Motion. The suit in question would
undoubtedly be tried on its own merits and in accordance with law. In the facts
and circumstances of the case, the hearing of the suit is expedited.
[R.M.SAVANT, J]
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