Bombay High Court
Shahed Kamal And 97 Ors vs Pagarani Universal ... on 17 March, 2022
Bench: S.J. Kathawalla, Milind N. Jadhav
Digitally signed by
SWAROOP SWAROOP SHARAD
SHARAD PHADKE
Date: 2022.03.18
PHADKE
appl 8104 of 2020.doc
14:06:05 +0530
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL (L) NO.8104 OF 2020
IN
INTERIM APPLICATION (L) NO.3986 OF 2020
WITH
NOTICE OF MOTION NO.1358 OF 2019
IN
SUIT NO.610 OF 2019
1. Shahed Kamal, age about 51 years,
R/a Flat No. 1503;
2. Amanullah Ishak Ghojaria, age about
42 years, R/a Flat No. 2001;
3. Abdul Razik Siddique, age about
42 Years, R/a Flat No. 1104;
4. Mohammed Azam Noor Mohammed
Shaikh, age about 50 Years, R/a Flat No.
1902, 2103, & 2104;
5. Mansoor Mohammed Ali Mulla, age about
45 Years, R/a Flat No. 2201;
6. Raees Ahmad Ishtiyaq Ahmad Khan, age
about 43 Years, R/a Flat No. 101;
7. Mohammed Haneef Tagala, age about
57 Years, R/a Flat No. 102;
8. Memon Mohd. Hanif Ahmed, age about
57 Years, R/a Flat No. 103;
9. Asif Salim Memon, age about
35 years, R/a Flat No. 105;
10. Hafija A. Rajjak Musani, age about
72 Years, R/a Flat No. 106;
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11. Salman Idris Dukka, age about
27 Years, R/a Flat No. 201;
12. Ayaz Moinuddin Shaikh, age about
46 Years, R/a Flat No. 303;
13. Pervez Alam, age about 34 Years,
R/a Flat No. 304;
14. Nasreen Hisamuddin Rajpurkar, age
about 40 Years, R/a Flat No. 305;
15. Mohd. Naseem Shaikh, age about
58 Years, R/a Flat No. 306;
16. Asif Ali Ansari, age about 44 years,
R/a Flat No. 401;
17. Simran Ravi Rohra, age about
42 Years, R/a Flat No. 403;
18. Mohd. Jawed Sajid, age about
54 Years, R/a Flat No. 405;
19. Fawziya Raees Parkar, age about
40 Years, R/a Flat No. 406;
20. Mohd. Islam Khan, age about
42 Years, R/a Flat No. 501;
21. Asifa Zaffar Khan, age about
56 Years, R/a Flat No. 502;
22. Hameeda Abubakar Siddiqui,
age about 56 Years, R/a Flat No. 503;
23. Sajida Banoo Ishak Ali Siddiqui,
age about 50 Years, R/a Flat No. 504;
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24. Yousuf Fakhruddin Ziya, age about
57 Years, R/a Flat No. 505;
25. Yasmeen Khalid Mansuri, age about
45 Years, R/a Flat No. 601;
26. Khalid Ibrahim Mansuri, age about
47 Years, R/a Flat No. 602;
27. Shokatali Subhanali Chopdar, age about
65 Years, R/a Flat No. 603;
28. Sayed Gazala Tabassum, age about
44 Years, R/a Flat No. 604;
29. Mohd. Ali Mohd. Hussain Mulla,
age about 71 Years, R/a Flat No. 605;
30. Nazia Danish Khan, age about
35 Years, R/a Flat No. 606;
31. Mirza faiz A. Beig, age about
50 Years R/a Flat No. 701;
32. Zohra Irshad Siddiqui, age about
43 Years, R/a Flat No. 702;
33. Shaikh Shakil Abdullah, age about
41 Years, R/a Flat No. 705;
34. Abdul Kadir Umer, age about
66 Years, R/a Flat No. 706;
35. Mehrunisa Shafi Surti, age about
59 years, R/a Flat No. 801;
36. Akhter Nooruddin Arkate, age about
42 years, R/a Flat No. 802;
37. Ajaz Abubaker Siddique, age about
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38 Years, R/a Flat No. 804;
38. Mohd. Suleman Quadri, age about
46 years, R/a Flat No. 901;
39. Nizar Nuruddin Machiwala, age about
62 Years, R/a Flat No. 902;
40. Riyaz Ahmed Subedar, age about
67 Years, R/a Flat No. 903;
41. Sarfaraz Ali Khan, age about
66 years, R/a Flat No. 904;
42. Siddiqui Roshan Jahan Mohd. Sultan,
age about 48 years, R/a Flat No. 905;
43. Shah Nawaaz Khan, age about
49 years, R/a Flat No. 1001;
44. Mohd. Aftab Alam, age about
46 years, R/a Flat No. 1002;
45. Suleman Ibrahim Memon, age about
68 years, R/a Flat No. 1003;
46. Naim Fakir Mohd. Shaikh, age about
40 years, R/a Flat No. 1004;
47. Abdul Ahad Abdul Razzak Saeed,
age about 68 years, R/a Flat No. 1005;
48. Mohammad Vasim Abdul Rahim Shaikh,
age about 33 years, R/a Flat No. 1006;
49. Shaikh Tanvir Mohd. Yasin,
age about 49 years, R/a Flat No. 1102;
50. Tajmahamad Nadkar,
age about 52 years, R/a Flat No. 1103;
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51. Mustak Shaikh, age about 54 years,
R/a Flat No. 1201;
52. Mohammed Arif Shaikh, age about
46 years, R/a Flat No. 1202;
53. Mohd. Dilawar Ishaque Khan,
age about 50 years, R/a Flat No. 1203;
54. Mohd. Farouk A. Khatri,
age about 49 years, R/a Flat No. 1205;
55. Akbar Ibrahim khan Deshmukh,
age about 60 years, R/a Flat No. 1206;
56. Rahil Iqbal Memon, age about
30 years, R/a Flat No. 1303;
57. Abdul Rab Abdul Kalam Khan,
age about 50 years, R/a Flat No. 1304;
58. Naimuddin I. Siddiqui, age about 54
Years, R/a Flat No. 1305;
59. Wasiullah Azimullah Khan,
age about 50 years, R/a Flat No. 1306;
60. Abdul Halim Khan, age about
65 years, R/a Flat No. 1401;
61. Jafarulla Ali Parkar, age about
48 years, R/a Flat No. 1402;
62. Iffat Yasmeen Abdul Samad, age about
56 years, R/a Flat No. 1403;
63. Sadika Arif Parkar, age about
46 years, R/a Flat No. 1404;
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64. Samir Amin Parkar, age about
48 years, R/a Flat No. 1405;
65. Asif Afsarruddin Saleem, age about
50 years, R/a Flat No. 1406;
66. Hanif Dawood Parkar, age about
43 years, R/a Flat No. 1502;
67. Arif Abdul Majid Parkar, age about
48 years, R/a Flat No. 1504;
68. Parkar Shakeel Hasan, age about
46 years, R/a Flat No. 1602;
69. Dr. Saifullah Dhukka, age about
44 years, R/a Flat No. 1603;
70. Aslam Mohamed Yusuf Quraishi,
age about 71 years, R/a Flat No. 1604;
71. Mohammad Moosa Siddiqui,
age about 54 years, R/a Flat No. 1606;
72. Rahat Mohd. Riyazuddin Shaikh,
age about 48 years, R/a Flat No. 1701;
73. Arshiya Muzamil Hayat,
age about 32 years, R/a Flat No. 1703;
74. Murtuza Mohd. Hussain Chalalawala
Lokhandwala, age about 56 years,
R/a Flat No. 1704;
75. Shabana Furqane Alam Shaikh,
age about 44 years, R/a Flat No. 1705;
76. M/s. Gouhar Aiyaz Kazi, age about
34 Years, R/a Flat No. 1706;
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77. Dr. Abida Y Agboatwala,
age about 64 years, R/a Flat No. 1801;
78. Mohammad Rizwan, age about
42 years, R/a Flat No. 1802;
79. Abdul Wahab Ramzan Solanki,
age about 65 Years, R/a Flat No. 1803, & 1804,
80. Fahim Nisar Shaikh, age about
40 years, R/a Flat No. 1805;
81. Mohamed Usman Dada, age about
73 years, R/a Flat No. 1806;
82. Shabana Naushad Khan, age about
50 years, R/a Flat No. 1901;
83 Zeenat Hamid Chougle, age about
56 years, R/a Flat No. 1903;
84. Ashfaq Abdul Kasam Kasu,
age about 40 years, R/a Flat No. 1905;
85. Mohammed Pervez , age about
54 years, R/a Flat No. 1906;
86. Hasibunnisa Khan, age about
59 Years, R/a Flat No. 2002;
87. Mohammad Naz Rahmani, age about
30 years, R/a Flat No. 2003;
88. Sohail Raihan, s/o. Dr. M. Raihan,
age about 48 years, R/a Flat No. 2004;
89. Munna Noor Mohammad Solanki,
age about 48 years, R/a Flat No. 2005;
90. Ramzan Ali Solanki, age about
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47 years, R/a Flat No. 2006;
91. Mohammed Mateen Mojawala,
age about 34 years, R/a Flat No. 2101;
92. Moizali Kausarali Bhilli,
age about 37 years, R/a Flat No. 2102;
93. Dr. Khalaqullah Mohammed Munir Khan,
age 93 about 63 years, R/a Flat No. 2105;
94. Asif Khan, age about 34 years,
R/a Flat No. 2106;
95. Shakil Ahmed Khan, age about 52 years,
R/a Flat No. 2203;
96. Shahenaz Umer Zaveri, age about 60
years, R/a Flat No. 2204;
97. Mahendra Prabhashankar Bhatt,
age about 74 years, R/a Flat No. 2205, & 2206;
Plaintiff Nos. 1 to 97 all adults, Indian
Inhabitants, all having their address at
Universal Garden Building, at
Plot No. 288/B, Amrut Nagar,
Bandivali Village, Jogeshwari (West),
Mumbai - 400 102.
98. Universal Garden - I Flat Owners Welfare
Association, a society registered under
Societies Registration Act, 1860, having its
registered office at Universal Garden
Building, at Plot No. 288/B, Amrut Nagar,
Bandivali Village, Jogeshwari (West),
Mumbai - 400 102. .. Appellants /
(Org. Plaintiffs/
Applicants)
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Versus
1. PAGARANI UNIVERSAL
INFRASTRUCTURE PRIVATE LIMITED,
formerly known as A. SURTI DEVELOPERS
PVT. LTD., a company registered under
the Companies Act, 1956 having its
registered office at Universal Paradise,
1st Floor, Nanda Patkar Road, 75-off,
Nehru Road, Vile Parle (West),
Mumbai-400 057.
2. NARAYAN JETHANAND PAGRANI,
age not known, Director and Share holder
of M/s Pagarani Universal Infrastructure
Pvt. Ltd., residing at 802, Golden Peak,
Dr. Ambedkar Road,
Opp. Kotak Mahindra Bank, Khar (West),
Mumbai 400052, and having office at
Universal Paradise, 1st Floor, Nanda
Patkar Road, 75-off, Nehru Road,
Vile Parle (West), Mumbai-400 057.
3. NARENDRA NARAYAN PAGRANI,
age not known, Director and Share holder
of M/s Pagarani Universal Infrastructure
Pvt. Ltd., residing at 802, Golden Peak,
Dr. Ambedkar Road, Opp. Kotak Mahindra
Bank, Khar (West), Mumbai 400052,
and having office at Universal
Paradise, 1st Floor, Nanda Patkar
Road, 75-off, Nehru Road,
Vile Parle (West), Mumbai-400 057.
4. MEENA NARAYAN PAGRANI,
age not known, Director and Share holder
of M/s Pagarani Universal Infrastructure
Pvt. Ltd., residing at 802, Golden Peak,
Dr. Ambedkar Road, Opp. Kotak Mahindra
Bank, Khar (West), Mumbai 400052, and
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having office at Universal Paradise, 1st Floor,
Nanda Patkar Road, 75-off, Nehru Road,
Vile Parle (West), Mumbai-400 057.
5. RAJESH NARAYAN PAGRANI,
age not known, Director and Share holder
of M/s Pagarani Universal Infrastructure
Pvt. Ltd., residing at 802, Golden Peak,
Dr. Ambedkar Road, Opp. Kotak
Mahindra Bank, Khar (West),
Mumbai 400052, and having office at
Universal Paradise, 1st Floor,
Nanda Patkar Road, 75-off, Nehru Road,
Vile Parle (West), Mumbai-400 057.
6. ARVINDBHAI CHHAGANBHAI
SURTI, age not known, Director and
Share holder of M/s Pagarani Universal
Infrastructure Pvt. Ltd., residing at 301,
Krishna Heritage, New Link Road,
Near Don Bosco High School,
Borivali West, Mumbai-400 092.
7. YOGESH ARVINDBHAI SURTI,
age not known, Director and Share holder
of M/s Pagarani Universal Infrastructure
Pvt. Ltd., residing at 301, Krishna
Heritage, New Link Road, Near Don
Bosco High School, Borivali West,
Mumbai-400 092.
8. Mumbai Metropolitan Region Development
Authority, an authority constituted under the
Maharashtra, Mumbai Metropolitan
Development Act, 1974 Having office
at MMRDA Building, Bandra Kurla
Complex, C-14 & C-15, E Block,
Bandra East, Mumbai - 400 051. .. Respondents
(Org. Defendants)
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Mr. Karl Tamboly with Mr. Aseem Naphade, Mr. Ajay Panicker, Mr. Akshay Patil i/by
Ajay Law Associates, for Appellants.
Mr. J.P.Sen, Senior Advocate with Mr. Firoz Bharucha i/by Mr. Yatin Nagin Shah, Mr.
Sampat Chhawchharia, for Respondent No.1.
Mr. Sharan Jagtiani, Senior Advocate with Mr. Udayan Shah, Mr. Priyank Kapadia,
Ms. Shradha Achliya, Mr. Akshay Shinde i/by Mr. Akshay Shinde, for Respondent
No.8 - MMRDA.
Mr. Rohaan Cama, Amicus Curiae with Mr. Shanay Shah.
CORAM: S.J. KATHAWALLA &
MILIND N. JADHAV, JJ.
RESERVED ON : 27th OCTOBER, 2021
PRONOUNCED ON : 17th MARCH, 2022
JUDGMENT : ( PER S.J.KATHAWALLA & MILIND N. JADHAV, JJ. )
1. The challenge in the present Appeal is based on the interplay between
two statutes viz. the Maharashtra Ownership Flats (Regulation of Promotion of
Construction, Sale, Management and Transfer) Act, 1963 ('MOFA') and the Mumbai
Metropolitan Region Development Authority Act, 1974 ("MMRDA Act").
2. The reliefs sought by the Appellants/Original Plaintiffs are based on
enforcement of statutory rights that they claim by application of MOFA on Plot No.
288/B, at Amrut Nagar, Bandivali Village, Jogeshwari (West), Mumbai - 400 102
("the Suit Plot"). The Respondent No.1/Original Defendant No.1, being the
Developer, and Respondent No.8/Original Defendant No.8 i.e. Mumbai Metropolitan
Region Development Authority ("MMRDA"), dispute these rights inter alia on the
basis that the provisions of MOFA are expressly excluded in respect of any land or
building belonging to or vesting in MMRDA.
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3. The Appellants are the Original Plaintiffs in Suit No. 610 of 2020 ("the
Suit") and are 98 in number, 97 of whom are purchasers of flats in a building known
as 'Universal Garden - I' ("the said Building") constructed on the Suit Plot.
Appellant No. 98 is Universal Garden - I Flat Owners' Welfare Association, a society
registered under the Societies Registration Act, 1860.
4. Respondent No. 1, Pagarani Universal Infrastructure Pvt. Ltd. (formerly
known as A. Surti Developers Pvt. Ltd.) ("the Developer") is the Original Defendant
No. 1 in the Suit. Respondent No. 1 is a private limited company who is developing the
Suit Plot and has constructed the said Building thereon. Respondent Nos. 2 to 7 are
the Directors of Respondent No. 1. The Appellant flat purchasers have purchased flats
in the said Building under separate Agreements for Sale from the Developer.
5. Respondent No. 8 i.e. MMRDA is the Original Defendant No.8 in Suit
and is an authority constituted under the MMRDA Act inter alia for regulating the
development of the Mumbai Metropolitan Region ("MMR"). In the present case,
MMRDA is the owner of the Suit Plot and has leased the same to the Developer.
MMRDA is also the Special Planning Authority for the area in which the Suit Plot is
located.
6. By the present Appeal, the Appellants have challenged a common Order
dated 25th November 2020 ("the Impugned Order") passed by the Learned Single
Judge dismissing Notice of Motion No.1358 of 2019 ("the Notice of Motion") and
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Interim Application (L) No.3986 of 2020 ("the Interim Application") filed by the
Appellants in the Suit.
7. The Appellants had sought the following reliefs in the Notice of
Motion :
"a) Pending the hearing and final disposal of the suit, Defendant No.1 to 7
and all other persons claiming through them be restrained by an order of
injunction from putting up additional buildings/construction on the Suit Plot
No.288/B, nearing Survey No. 36, Hissa No.7 and Corresponding C.T.S. No.
288/B admeasuring 6912.25 Meters, laying and being at Village Bandivali,
Taluka Andheri, Amrut Nagar, Jogeshwari (West), Mumbai and from creating
any encumbrances on the suit property by way of gift, sale, mortgage, lien, lease,
tenancy, license, or by transfer of FSI of the suit plot, or in any other manner
whatsoever nature on the said Plot and/or any structure constructed thereon;
b) Pending the hearing and final disposal of the suit, Defendant Nos. 1 to 7
their agents, servants and all persons claiming through the defendant no.1 be
restrained by an order of injunction from obstructing use and enjoyment of the
suit plot, the ingress and egress of the Plaintiffs and their family members to the
suit plot and from creating any obstructions and hindrances from the usage of the
said plot;
c) Pending the hearing and final disposal of the suit, Defendant Nos. 1 to 7
their agents, servants and all persons claiming through the defendant no.1 be
restrained by an order of injunction from putting up any further building plans to
the Defendant No. 8 and the defendant no.8 be restrained from issuing any
further permissions to the Defendant no.1 to 7;
d) Pending the hearing and final disposal of the suit, the Defendant No.8 /
MMRDA be ordered and directed to submit their No objection to the Competent
Authority of Mumbai Municipal Corporation for granting erection of borewell
permission to the Plaintiffs in their building as per Clause no.16 in the IOD
issued for construction of Plaintiff's building;
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e) Pending the hearing and final disposal of the present suit, this Hon'ble
Court be pleased to appoint the Court Receiver, High Court, Bombay as Receiver
of the building wing-B under construction on the suit plot with all the powers
except the power of sale;
f) for ad-interim and interim reliefs in terms of prayer (a) to (d) above;
g) That costs of this Notice of Motion be provided for;
h) That such other and further reliefs as the nature and circumstance of
the case may require be granted;"
8. The Appellants had also filed the Interim Application during the
pendency of the Notice of Motion seeking the following reliefs :
"a) pending the hearing and final disposal of the suit, Defendant No.1 to
7 and all other persons claiming through them be restrained by an order of
injunction from putting up additional buildings/construction on the Suit land as
described in the Plaint and from creating any encumbrances on the suit land and
also in the additional building / flats being constructed on the said suit land by
way of gift, sale, mortgage, lien, lease, tenancy, license, or by transfer of FSI of the
suit land, or in any other manner whatsoever nature;
b) pending the hearing and final disposal of the present suit, Defendant No.8 /
MMRDA be ordered and directed not to grant any further construction permission
to the defendant no.1 and be pleased to stay the operation of the permissions
already granted by the Defendant No. 8 to the Defendant No.1 for construction of
proposed residential building Wing-B on the suit plot;
c) Pending the hearing and final disposal of the present suit, this Hon'ble Court
be pleased to appoint the Court Receiver, High Court, Bombay as Receiver of the
building wing-B under construction on the suit plot with all the powers except the
power of sale;
d) for ad-interim reliefs in terms of prayer clause (a), (b) and (c) above;
e) for costs of this Application be provided for;
f ) for such further and other reliefs as the nature and circumstance of the case
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may require;"
DISPUTES BETWEEN THE PARTIES
9. The Suit Plot is a part of the Oshiware District Centre ("ODC"), as
notified by MMRDA. The development of the ODC is governed by the 'Oshiware
District Centre Planning Proposal', as sanctioned by the State Government vide
Government Notification U.D.D. No. TPB-4391/2885/UD 11 dated 16 th January 1992.
The Planning Proposal envisages guided development of land in ODC by landowners'
participation.
9.1 In terms of the aforesaid Planning Proposal, in 1994, MMRDA acquired
the Suit Plot from the original owner, Late Shri Nanji Arjun Rathod, with a right to the
original owner to develop the Suit Plot. The Original Owner assigned the development
rights of the Suit Plot in favour of the Developer. MMRDA then executed a lease in
favour of the Original Owner through the Developer who has acted as its Constituted
Attorney, for development of the Suit Plot by utilizing FSI of 1.5 thereon, upon
payment of premium by the Developer. Accordingly, in 2008, the Developer upon
payment of premium to MMRDA began construction of the said Building on the Suit
Plot by utilizing the permissible FSI of 1.5.
9.2 The Developer entered into separate Agreements for Sale with various
flat purchasers, including the Appellants herein. The Agreement for Sale under
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Recital (hh) specifically provided that the Agreement for Sale was subject to the terms
of the said Lease Deed. The said Lease Deed was in turn subject to the MMRDA Act.
Further, Clause 28 of the Agreement for Sale provided that the obligations of the
Developer shall always be subject to the provisions of MOFA.
9.3 The said Building was then constructed by the Developer and flats were
handed over to the flat purchasers, including the Appellants herein, after obtaining, in
2014, an Occupation Certificate for the said Building. The Appellants claim that
despite expiry of the period to form a society as required under Section 10 of MOFA,
the Developer failed in its obligation to form a society of the flat purchasers or convey
the Suit Plot in favour of the flat purchasers as required under Section 11 of MOFA.
9.4 On 18th November 2015, a Notification was issued by the State
Government through Urban Development Department, under Section 37(2) of the
Maharashtra Regional Town Planning Act, 1966 ("MRTP Act") thereby increasing
the permissible FSI in the ODC from 1.5 to 3 for residential construction and 1.5 to 4
for commercial construction. In view thereof, the Developer made an application to
MMRDA for consuming the additional 1.5 FSI which had become available on the
Suit Plot.
9.5 The Appellants objected to the said application made by the Developer
inter alia on the ground that the Developer had already exhausted the FSI under the
terms of its Lease Deed, in construction of the said Building and that once the time for
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formation of society had expired, the Developer had no right in the additional FSI of
the Suit Plot and that the same belonged to the flat purchasers of the said Building.
Further, it was stated that the Developer had no right to utilize the additional FSI of
the Suit Plot, without the informed consent of the flat purchasers. The said objection
of the flat purchasers was founded on Section 7 of MOFA.
9.6 MMRDA vide its letter dated 20th February 2018, rejected the aforesaid
objection raised by the flat purchasers stating that the provisions of MOFA were not
applicable to MMRDA. MMRDA allowed the application made by the Developer for
consuming the additional 1.5 FSI on the Suit Plot. Accordingly, the Developer got the
building plans approved for construction of another building on the Suit Plot, known
as 'Universal Garden - II' ("the Additional Building"), which was on the east side of
the said Building.
9.7 This resulted in the Appellants filing the present Suit inter alia seeking
enforcement of the provisions of MOFA against the Developer and also seeking a
declaration that all FSI beyond the FSI utilized and available when the building plan
for the said Building were sanctioned, vests in all the flat purchasers of the said
Building, including the Appellants herein, along with the right to put up further
construction on the Suit Plot.
9.8 The Appellants also filed the Notice of Motion inter alia seeking an
injunction restraining the Developer from putting up the Additional Building on the
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Suit Plot and for an injunction restraining MMRDA from granting any construction
permissions to the Developer for construction of the Additional Building, pending the
hearing and final disposal of the Suit. As noted above, during the pendency of the
Notice of Motion, the Appellants also filed the Interim Application seeking urgent
hearing of the Notice of Motion and the reliefs sought therein, as further
Commencement Certificate had been granted to the Developer by MMRDA for
construction of the said Additional Building.
9.9 The Notice of Motion and Interim Application were opposed by the
Developer and MMRDA inter alia on the ground that as the Suit Plot was owned by
MMRDA, the provisions of MOFA were not applicable in the present case. The
Developer and MMRDA relied upon Section 31 read with Schedule II, Clause II of
MMRDA Act which expressly excludes the application of MOFA to MMRDA or any
land or building belonging to or vesting in MMRDA.
9.10 Upon hearing the parties, the Learned Single Judge vide the Impugned
Order rejected the Notice of Motion and Interim Application filed by the Appellants
and inter alia held that since MMRDA was undisputedly the owner of the Suit Plot,
Section 7 of MOFA, as sought to be applied by the Appellants in the present case,
cannot be applied as MOFA has been excluded by the MMRDA Act and any such
application of the provisions of MOFA in the present case would prejudice the rights
of MMRDA. Further, the Learned Single Judge also held that the Appellants will be at
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liberty to seek enforcements of other terms of the Agreements for Sale and MOFA
obligations against the Developer, which do not affect the rights of MMRDA.
9.11 It is in these circumstances, that the Appellants have approached this
Court under Clause 15 of the Letters Patent Act challenging the Impugned Order
passed by the Learned Single Judge.
10. In deciding this Appeal and considering the specific reliefs sought by the
Appellants we have thought it necessary to decide the fundamental issue of whether
the MMRDA Act excludes the applicability of MOFA. A decision on this issue will
have a bearing on any narrower issue such as whether any specific provision or rights
claimed under MOFA would be available to flat purchasers against a developer.
11. Further, considering the aforesaid question of law involved, by an Order
dated 18th January 2021, we appointed Shri Rohaan Cama, Advocate as Amicus Curiae
to assist the Court in deciding the present Appeal.
FACTUAL BACKGROUND
12. The facts necessary for deciding the present Appeal are briefly set out
hereunder :
12.1 On 12th December 1963, MOFA was enacted.
12.2 On 2nd June 1973, the Bombay Metropolitan Regional Plan prepared by
the Bombay Metropolitan Regional Board (constituted by the State Government under
the Maharashtra Regional and Town Planning Act, 1966) was approved by the State
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Government and the said Plan came into force on 16th August 1973. The Regional
Planning Board was not the authority for implementing the proposals in the approved
regional plan and the same were to be implemented by several different executing
agencies such as the Bombay Municipal Corporation, Bombay Electric Supply and
Transport Undertaking, The City and Industrial Development Corporation, the
Buildings and Communications Department, the Central and Western Railways, the
Bombay Port Trust and the Department of Civil Aviation. In view thereof, certain
areas were being progressively developed and populated and the necessity was
increasingly felt for setting up an authority for the purpose of planning, coordinating
and supervising the proper, orderly and rapid development of these areas, in which
several local authorities were separately dealing with such matters within their own
jurisdictions.
12.3 It was with the aforesaid object in mind, that on 19 th January 1975, the
MMRDA Act was enacted. As per the Preamble of the MMRDA Act, it is an act for
forming Brihan Mumbai and certain areas round-about into a MMR, to provide for the
establishment of an authority for the purpose of planning, coordinating and
supervising the proper, orderly and rapid development of the areas in that region and
of executing plans, projects and schemes for such development and to provide for
matters connected therewith.
12.4 On 26th January 1975, MMRDA was established under Section 3 of the
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MMRDA Act inter alia to secure the development of the MMR according to the
regional plan and for carrying out the other purposes of the MMRDA Act.
12.5 In December 1977, MMRDA after evaluation of two scenarios based on
alternative development strategies for the MMR, identified the most desirable pattern
of growth called the Optimal Regional Structures and recommended policies that, in
course of time, would achieve such a structure. The key feature of this Policy was to
restructure the existing pattern of development by planned decentralization of
economic activities through measures which prevent growth of offices and wholesale
establishments in South Mumbai and for shifting wholesale markets from the
congested parts of the city and developing new growth centers in the MMR. Some of
the growth centers identified in the above policy were Bandra Kurla Complex, New
Bombay, Kalyan Complex. The said Policy also recommended creation of two District
Centers - one each in eastern and western suburbs.
12.6 Based on the aforesaid recommendations, in 1992, a site for the growth
centre was identified in the western suburbs, known as the 'Oshiware District Centre'
("ODC"), being a 102 ha. piece of land situated near the Western Railway Line,
midway between Jogeshwari and Goregaon railway stations. It covered revenue
villages of Oshiwara, Bandivali, Pahadi Goregaon and Goregaon, and forms part of
Ward 'K' and 'P' of the Greater Bombay.
12.7 Pursuant thereto, MMRDA prepared development proposals under
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Section 40(3)(d) of the MRTP Act titled 'OSHIWARE DISTRICT CENTRE
PLANNING PROPOSALS' ("Planning Proposal") to structure the planning of the
ODC.
12.8 The Planning Proposal was sanctioned by the State Government to take
effect from 1st March 1992 by Government Notification U.D.D. No. TPB-
4391/2885/UD-11 dated 16th January 1992. As per the Planning Proposal, the
predominant activity in the ODC was to have private and public offices, offices of
professionals and other commercial establishments, business services, high order retail
trade and semi-wholesale markets which would generate employment. ODC was to
include some residential area to accommodate about 50,000 population.
12.9 Further, as per the Planning Proposal, the development of ODC
envisaged guided development of land by landowners' participation. According to the
ODC Scheme, the lands were to be acquired by MMRDA from the landowners for a
nominal acquisition price of Re. 1/-. The acquired lands were to be re-released to the
same owners on a 60-year lease for undertaking development as per MMRDA's
planning proposals, on payment of lease premium as stipulated Para 6.5.3 of the
Planning Proposal. The landowners were to be responsible for carrying out all on site
infrastructure developments at their cost and are free to sell the buildings/flats in the
open market.
12.10 On 28th January 1993, the Government of Maharashtra issued a
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notification inter alia for acquisition and vesting of lands with the MMRDA and
reserving the said lands/Notified Areas for the purposes of the ODC. The Notified
Area including the Suit Plot. Late Shri Nanji Arjun Rathod was the owner of the Suit
Plot.
12.11 In terms of the Planning Proposal, on 28 th December 1994, MMRDA
under an Award passed under Section 11 of the Land Acquisition Act, 1894 acquired
the Suit Plot from Late Shri Nanji Arjun Rathod for a nominal compensation of Re.1/-
with a right to Late Shri Nanji Arjun Rathod, to develop the Suit Plot. Accordingly,
MMRDA became absolutely seized and possessed of and otherwise well and
sufficiently entitled to dispose of the Suit Plot.
12.12 Thereafter, the legal heirs of Late Shri Nanji Arjun Rathod, under a
Development Agreement dated 18th March 2005, assigned the development rights of
the Suit Plot in favour of the Developer. Simultaneous with execution of the
Development Agreement, an Irrevocable Power of Attorney dated 18 th March 2005
was also executed in favour of the Developer thereby giving them all necessary powers
required to carry out and complete the construction and development of the Suit Plot
in all respects. Further, the Developer was also entitled to execute a lease deed with
MMRDA in respect of the Suit Plot and also entitled to pay the lease premium as
stipulated by MMRDA.
12.13 Thereafter a Lease Deed dated 15th July 2008 ("the said Lease Deed")
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was executed by MMRDA, as the Lessor, in favour of Mr. Bhupendra Nanji Rathod (as
legal heirs of Late Shri Nanji Arjun Rathod) through his Constituted Attorney Mr.
Narayan Pagrani, Director of the Developer, as the Lessee, for a period of sixty (60)
years in respect of an area admeasuring 6912.75 sq. mtrs. out of the Suit Plot and on
the terms and conditions mentioned therein. A lease premium of Rs. 80,73,450/- was
paid by the Developer to MMRDA, for grant of the said lease, as recorded in the said
Lease Deed. As per the said Lease Deed, the total permissible built-up area was
10,400 sq. mtrs. Some of the relevant clauses of the said Lease Deed are reproduced
hereunder :
"1. Description of the Land :
In consideration of the premises and of the sum of Rs.80,73,450/-
(Eight Lacs Seventy Three Thousand Four Hundred and Fifty Only) as
premium Rs.20,18, 400/- (Rupees Twenty Lacs Eighteen Thousand and
Four Hundred Only) vide Receipt No. 44754 dated 10/4/2008 and
Rs.60,55,050/- (Rupees Sixty Lacs Fity Five Thousand and Fifty Only)
vide a Receipt No. 45366 dated 06/05/2008 paid by the Lessee to the
Lessor as premium and of Covenants and Agreements on the part of the
Lessee hereinafter contained, the Lessor doth hereby demise unto the
Lessee all that part of a piece of land situated and lying at City Survey
No. 288, Survey No. 36, Hissa No. 2 of Village Bandivali, Taluka
Andheri - Mumbai Suburban District containing by admeasurements,
6912.75 sq.mtrs. (containing maximum permissible build up area of
10,400/- sq.mtrs.) bounded as follows, that is to say :
...
3. Covenants by the Lessee: The Lessee with intent to bind all persons
into whosoever hand the demise premises may come doth hereby covenant
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with the Lessor as follows :
...
(f ) Plan to be submitted before building: That no building or erection
to be erected or additions to be made hereafter shall be commenced unless
and until specifications, plans, elevations, sections and details thereof shall
have been previously submitted by the lessee in triplicate for scrutiny of and
be approved in writing by the Chief Town and Country Planning Division of
the Bombay Mumbai Metropolitan Region Development Authority or the
said officer.
...
(o) Delivery of possession after expiration: At the expiration or
sooner determination of the said terms, quietly to deliver on to the
Lessor the demised premises and all erections and buildings then
standing or being thereon. PROVIDED always that the Lessee shall be
at liberty if he shall have paid the rent and all Municipal and other
taxes, rates and assessments then due and have performed and observed
the covenants and conditions herein contained prior to the expiration of
the said term, to remove an appropriate to himself all buildings, erection
and structures and materials from the said plot of land, but so
nevertheless that the Lessee shall deliver up as aforesaid to the Lessor
levelled and put in and order and condition to the satisfaction of the
Lessor all land from which the buildings, erection or structures may
have been removed. Provided further that after the possession of the
demised premises has been delivered to or obtained by the Lessor, such
building, erection or structure shall stand forfeited to the Lessor.
(p) Not to assign: Not to sell, mortgage, assign, and let or sublet or
part with the possession of the demised premises or any part thereof, or
any interest therein without the previous written consent of the
Metropolitan Commissioner. Consent may be granted by the
Metropolitan Commissioner, subject to payment by the Lessee of a sum
equal to 10 per cent of the stamp duty chargeable on the instrument of
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intended transfer under the Bombay Stamp Act, 1958 and further
subject to such conditions as he may impose in public interest. Provided
that nothing shall be payable in case of the first transfer of the demised
premises or a part thereof.
...
5. Re-entry:- .... PROVIDED ALWAYS that except for payment of
rent as aforesaid, the power of re-entry herein above contained shall not be
exercised unless and until the Lessor or the Metropolitan Commissioner on
behalf of the Lessor, shall have given to the Lessee a notice in writing of his
intention to enter and of the specific breaches of covenants in respect of
which the re-entry is intended to be made and default shall have been made
by the Lessee remedying such breach or breaches within three months after
giving such notice.
6. Summary eviction of persons unauthorisedly occupying the
demised land on determination of the Lease:- If on determination of lease,
any person is found unauthorised occupying or wrongfully in possession of
the demised premises, it shall be lawful for the Metropolitan Commissioner
to secure summary eviction of such person in accordance with the
provisions of the Bombay Metropolitan Region Development Authority Act
1974 or any modification thereof for the time being in force."
(Emphasis Supplied)
12.14 On 11th November 2008, MMRDA vide its Letter No.
LC/ODC/NAR/854/2008 granted permission to Bhupendra Nanji Rathod to sub-
lease and assign the Suit Plot to the Developer.
12.15 On 24th December 2008, MMRDA granted permission to the Developer
to construct the said Building comprising of upto 22 floors by exploiting 1.5 FSI on the
Suit Plot.
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12.16 On 24th December 2008, Commencement Certificate ("CC") was
issued by MMRDA for construction of the said Building. As per the CC issued, the
permissible built-up area was 9210.13 sq. mtrs.
12.17 On 15th January 2009, full Intimation of Disapproval ("IOD") was
issued by the MCGM.
12.18 On 16th February 2009, CC was also issued under the MRTP Act 1966
by the MCGM. This CC re-endorsed the CC already granted by MMRDA.
12.19 Thereafter, the Developer executed Agreements for Sale with various
flat purchasers, including the Appellants herein, for sale of flats in the said Building.
As the term of all the Agreements for Sale are the same, the Appellants have relied
upon one such Flat Purchase Agreement dated 27 January 2011 ("the said Agreement
for Sale"). Some of the relevant clauses of the said Agreement for Sale are
reproduced hereunder :
"WHEREAS :
...
(f) In the circumstances aforesaid, the said land vested in M.M.R.D.A
and M.M.R.D.A became absolutely seized and possessed of and otherwise
well and sufficiently entitled to dispose of the said property as per the Scheme
forming part of the sanctioned proposals.
...
(m) By and under a Lease Deed dated 15th July 2008 registered with the office
of the Sub-Registrar of Assurances... under serial No. BDR-1-6983 of 2008
executed between Mumbai Metropolitan Regional Development Authority
(M.M.R.D.A. for brevity) (therein referred to as the Lessor of the One part and
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Bhupendra Nanji Rathod through his Constituted Attorney, Mr. Narayan
Pagarani, Director of A. Surti Developers Private Limited) (therein referred to as
the Lessee) of the Other Part and the said M.M.R.D.A. granted leasehold rights in
respect of the said Property in favour of the legal heirs of the said Nanji Rathod for
a period of Sixty years with the renewal clause and for other terms and conditions
therein contained.
...
(w) The M.M.R.D.A. has further issued the Commencement Certificate
bearing No. TCP(P-2)/ODC/CC/3.106/59/2010 dated 16 th February 2010
granting approval for construction beyond plinth level up to 22 floors in respect of
the said Proposed Building containing the Built-up area of 9207.04 sq.mtrs.
Therein.
(x) In Pursuance of the sanctions granted by MCGM and M.M.R.D.A.
respectively, and the concerned Authorities, the Developer have commenced
construction of the said Residential Tower building, which shall have still
plus upper 22 floors and one or more wings of the same on the said property
for residential purpose in accordance with the plans and specifications
sanctioned and approved by the said authorities.
...
(bb) The Flat purchaser/s has/have demanded from the Developers and
the Developers have given inspection to the Flat Purchasers of all the
documents of title relating to the said property. Development Agreement,
Lease Deed, Plans, designs and the Agreement between the Developers and
the Architects and all such other Agreements specified in the Maharashtra
Ownership Flats (Regulation of the Promotion, Construction Sale
Management and Transfer Act 1963 and the rules framed thereunder;
...
(hh) The Flat Purchaser has agreed to purchase from the Developers on
what is popularly known as "Ownership Basis", a flat in the said Tower
Building more particularly described hereunder with full notice of the
several terms and conditions, provisions, and covenants contained in the
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documents referred to hereinabove subject to the terms and conditions
hereinafter contained;
NOW THIS AGREEMENT WITNESSTH AND IT IS HEREBY
AGREED BY AND BETWEEN THE PARTIES HERETO AS
FOLLOWS :
...
2. The Flat Purchaser/s has/have made inquiries and is satisfied that the
leasehold property vests in the Developers and Developers herein are entitled to
develop the said premises. The Flat Purchaser/s undertake not to raise any objection
to the development rights of the Developers and to the lease hold title of the lessees
to the said property.
2.1 The Developers are entitled to develop and shall construct a Tower
Building consisting of stilt and upper floors and having one or more wings on
the said property more particularly described in the First Schedule
hereunder written and in accordance with layout plans, designs,
specifications and approvals by the concerned local authority i.e. Municipal
Corporation of Greater Mumbai hereinafter referred to MCGM for brevity,
M.M.R.D.A. (which have been seen and approved by the Flat Purchaser/s)
with liberty to carry out only such verifications and modifications as the
Developers should consider necessary or as may be required by the concerned
local authority, th..... in them or any of them which the Purchaser/s hereby
irrevocably, expressly authorise the Developers to undertake such changes/
modifications.
2.2. The Developers intend to commence in due course further
development of the said Property in accordance with the sanctioned plans
phasewise by constructing additional commercial/residential structures or
any variation of modification or any amendment thereof, as may be
approved by the concerned authorities from time to time.
...
5.1 The Flat Purchaser/s agree/s and undertake/s to permit and give the
Developers all facilities for making any additions, alterations or to put up
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any additional commercial/residential structure on the said Property as per
their entitlement and the Lease Agreement entered into in respect of the said
Property. The Flat Purchaser/s agree and undertake not to object to such
constructions on the ground of nuisance, annoyance and/or otherwise for
any other reason.
...
8. The Flat Purchaser/s shall not have any right in respect of Floor
Space Index sanctioned by the M.C.G.M./M.M.R.D.A or any authority in
respect of the said property and any other floor space index that may be
sanctioned in future and the Developers shall be entitled to utilise the same
for the development of the said property till completion of the project of
development as contemplated herein.
...
13. The Flat Purchaser/s agree/s to sign and execute all the necessary
applications, forms, documents or Deeds and oblique and/or papers and pay the
membership fees as may be required for the purpose of becoming member of the
proposed Co-operative Society.
13.1 It is agreed that the Flat Purchaser/s shall be bound by the terms of
the Lease Deed, the rules and bye-laws of the proposed Society. It is, however,
expressly agreed that the right, title and interest of the Developers in the said
Premises shall be transferred, assigned in favour of the Flat Purchaser/s
Proposed Society only on condition that the Flat Purchaser/s and the other
Flat Purchasers of different Premises strictly performed the terms and
conditions of this Agreement and pay to the Developers all the amount due
and payable under this Agreement.
13.2 It is agreed and understood between the parties herein that till the
completion of the project by construction of new buildings and even after
possession of the premises hereby agreed to be sold, is given to the Flat
Purchasers, the Developers shall be absolutely entitled to and shall be having
authority and control as regards the unsold premises and balance F.S.I. and
the right to further develop the said Property by use of T.D.R. and its
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disposal thereof.
13.3 Even after the Developers developing the entire said property, the
Developer shall continue to have a right to dispose of the remaining unsold
Premises in such manner as they think fit and the sale proceeds thereof shall belong
absolutely to the Developers and the Flat Purchasers of such remaining Premises
shall be accepted as members of such Society. The Developers in that case shall not
be required to pay any transfer fees, charges, premium and/or donation and/or
compensation and/or cost in any form whatsoever to the Society, save and except
the membership fee, share money and entrance fee per member for such remaining
unsold Premises.
13.4 The Flat Purchaser/s agree/s and undertake/s to permit and give the
Developers all facilities for making any additions, alterations or to put up
any additional structure or floors on the said building /s and/or on the said
Property till such time the said Property is fully developed by the Developers.
The Flat Purchaser/s agree/s and undertake/s not to object to such
construction on the ground of nuisance, annoyance, inconvenience and or
otherwise for any other reasons whatsoever.
14. The Developers have informed the Flat Purchaser/s that the said
Property described in the First Schedule hereunder written is owned by
M.M.R.D.A. on lease for a period of 60 years and the Developers herein have
right to get assigned with the permission of the M.M.R.D.A. to the body of
Flat Purchaser/s, after completion of the said Tower Building and after the
receipt of the entire consideration from the Flat Purchaser/s herein and all
other Flat Purchaser/s of the flats of units that the Developer desires to
undertake on the said Property.
14.1 It is also agreed that in view of the aforesaid arrangement, the
Developers shall execute the Deed of Assignment/sub-lease in respect of
building constructed by them on the said property and the aliquot area that
is land beneath the building in favour of the Co-operative Society of the Flat
Purchaser/s on behalf of the Lessees. Such sub-lease shall provide for,
utilization of the common areas, for common use of the residential occupants
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of the said building as may be decided by the Developer.
...
15. The Purchaser/s shall not have any right in respect of floor space
index sanctioned by the M.C.G.M., M.M.R.D.A. OR any local authority in
respect of the said property and any other floor space index that may be
sanctioned in future and the Developers shall be entitled to utilize the same
for the development of the said property. Furthermore, the Developers shall
also be entitled to develop the said property by utilizing T.D.R of other
properties on the said property if and to the extent permitted by law and the
Flat Purchaser/s shall have no objection thereto.
15.1 The Developers shall also be entitled to use any additional FSI or
additional constructions that may be permitted by the local body or
concerned authority for any reasons whatsoever including FSI in respect of
any adjoining or neighboring Plots/Blocks or FSI by way of Transferable
Development Rights (TDR). Such additional structures and storeys will be
the sole property of the Developers, who will be entitled to dispose of the same
in any manner whatsoever as the Developers may deem fit and proper and
the Premises Flat Purchaser/s shall not be entitled to raise any objection or
claim any reduction in price of the premises agreed to be acquired by
her/them and claim any compensation or damage on the ground of mis
conveniences or any other ground whatsoever. The Developers will be
entitled to all the present and or future F.S.I. and/or T.D.R. on the said
larger property and the Flat Purchasers shall have no rights in respect
thereof and the rights of the Flat Purchasers shall be restricted only to the
said Premises and parking spaces, if any, agreed to be purchased by the Flat
Purchaser/s and shall not extend to rights to use of any additional F.S.I or
TDS that may be allowed to be used on the said properties on proportional
basis or otherwise and the Flat Purchasers shall not claim any such rights
against the Developers. It is agreed by and between the parties that, if the
permitted Floor Space Index of density or ratio though not sanctioned at the
time the condominium is formed and the said property and the said building
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are submitted under the Maharashtra Ownership of Flats Act/ Maharashtra
Apartment Ownership Act, 1970, even then Developers will have the
absolute rights to put up additional construction and/or consume any
balance and/or available floor space index or T.D.R. on the said property by
constructing further structure/s on the said property even after the
formation of the Condominium and transfer of the property.
15.2 The Flat Purchaser/s shall not have any right in respect of
floor space index of T.D.R. sanctioned by the local authority in respect of the
same Block/s and any other floor space index that may be sanctioned in
future and the Developers shall be entitled to utilize the same for the
development of the said larger property. Furthermore, the Developers shall
also be entitled to develop the said property by utilizing TDR of other
property on the said property if and to the extent permitted by law and the
Flat Purchaser/s shall have no objection thereto. The Flat Purchaser/s shall
be entitled to only the Premises together with common amenities agreed to be
sold by the Developers. All other rights with regard to FSI, TDR, transfer
and sale of additional FSI etc. shall be the right of the Developers.
....
20. Nothing contained in this agreement is intended to be nor shall be
construed as a grant assignment, demise of the said Premises or any part
thereof or the said Property of the Tower Building or any part thereof in law.
The Flat Purchaser is aware that the Property described in the First
Schedule is owned by M.M.R.D.A. and the Developers has acquired
development rights in respect of the same and the Flat Purchaser shall have
no claim save and except the Premises that is agreed to be sold to
him/her/them under this Agreement.
...
28. This Agreement as regards the obligations of Developer are
concerned shall always be subject to the provisions of the MOFA and rules
made thereunder."
(Emphasis Supplied)
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12.20 On 21st February 2014, Occupation Certificate ("OC") was issued
by MMRDA for the said Building.
12.21 On 21st February 2014, Indemnity Bonds were executed by flat
purchasers, inter alia acknowledging potential construction of the Additional Building.
We must mention here that the Appellants have in the Plaint alleged that their
signatures were obtained by misrepresentation on the said Indemnity Bonds.
12.22 On 27th May 2015, a Completion Certificate was issued by the
Architect appointed by the Developer certifying that 100% work was complete on the
Suit Plot.
12.23 On 18th November 2015, a Notification was issued by the Urban
Development Department of the State Government under Section 37(2) of the MRTP
Act thereby increasing the permissible FSI from 1.5 to 3 for residential premises
construction and 1.5 to 4 for commercial premises construction for the ODC.
12.24 On 7th January 2016, an application was made by the Developer
through its Architect to MMRDA requesting for permission to consume the aforesaid
additional FSI, which had become available as per the Notification of the UDD.
12.25 From 8th July 2016 to 27th September 2016, several letters were
addressed by the Developer through its Architect to MMRDA requesting for
permission to consume the additional FSI.
12.26 On 15th December 2016, an Order was passed by the District Deputy
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Registrar Co-operative Societies rejecting the Application filed by Appellants for
deemed conveyance, on the ground that as per Section 31 and Schedule II of the
MMRDA Act, MOFA is not applicable to MMRDA and therefore the application
does not come within the power of MMRDA.
12.27 On 2nd February 2017, a letter was addressed by MMRDA to the
Developer demanding a sum of Rs.3,58,51,200/- towards premium for exploiting
additional FSI of 1.5 as per the Notification dated 18th November 2015 issued by UDD.
12.28 On 5th July 2017, an Order was passed by the Deputy Registrar,
Co-operative Societies rejecting the Appellant No.1's application for registration of a
society. The Appellants have stated that they had preferred an Appeal before the
Divisional Joint Registrar against the said Order and the same is still pending.
12.29 On 17th July 2017, a Supplementary Lease Deed ("the said
Supplementary Lease Deed") was executed between MMRDA (as the Lessor) and
Bhupendra Nanji Rathod (as the Lessee) through the Developer as its Constituted
Attorney. Under this Deed, in view of the Developer having paid Rs.3,58,51,200/-
towards additional premium, MMRDA granted the Developer additional built-up area
of 1,358 sq. meters having a total maximum permissible built-up area of 11,758 sq.
meters to be consumed by the Developer. Some of the relevant terms of the said
Supplementary Lease Deed are reproduced hereunder :
"WHEREAS:
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3. The Govt. in Urban Development Department vide its Notification
No.CMS/TPB4313/658/CR-116/2014/UD-11 dated 18 th November 2015 has
increased the FSI from 1.5 to. 3.00 for Residential use in Oshiware District Centre,
a copy whereof is annexed hereto as "ANNEXURE-II". The Authority is therefore
entitled to allow permissible additional FSI of 1.5.
4. The Lessee vide its letter dated 10 th October 2016 requested the Lessor
to allow permissible additional FSI of 1.5 on the said land leased to them as
stated hereinabove and the Lessor vide letter No.
TCP(P-2)/ODC/CC/3.136/II/2043/2016 dated 15 December 2016, have
th
allowed permissible additional built up area 10368.23 sq. mtrs. in lieu of
additional FSI of 1.5 (hereinafter called as "the said permissible additional
built up area") for a premium of Rs.27,37,21,272/- (Rupees Twenty Seven
Crores Thirty Seven Lac Twenty One Thousand Two Hundred Seventy Two
Only). However, Lessee vide its letter dated 4 th January 2017, requested the
Lessor to allow to pay premium on additional built up area of 1358 sq.mtrs.
out of the said permissible additional built up area of 10368.23 sq.mtrs. &
the Lessor vide its letter No. TCP(P-2)/ODC/CC/3.136/II/234/2017 dated
15 December 2016 have allowed to utilise the additional built up area of 1358
sq.mtrs. out of the said permissible additional built up area of 10368.23
sq.mtrs. (hereinafter called as "the said additional built up area") for a
premium of Rs.3,58,51,200/- (Three Crores Fifty Eight Lac Fifty One
Thousand Two Hundred Only), a copy whereof is annexed hereto as
"ANNEXURE-IV/A, IV/B, IV/C & IV/D".
5. Accordingly, the Lessee has paid the premium of Rs.3,58,51,200/-
(Three Crores Fifty Eight Lac Fifty One Thousand Two Hundred Only) vide
Receipt e-Receipt No.DU62337840 dated 18/02/2017 before execution of
this Supplementary Lease Deed.
NOW, THIS SUPPLEMENTARY LEASE WITNESSTH AS
FOLLOWS :
1. In consideration of the premises and the additional premium of the
sum of Rs.3,58,51,200/- (Three Crores Fifty Eight Lac Fifty One Thousand
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Two Hundred Only) for additional built up area of 1358 sq.mtrs. paid by the
Lessee to the Lessor as Premium, the Lessor doth hereby permits the Lessee,
the said additional built up area of 1358 sq.mtrs. on the said land measuring
to 6912.15 sq.mtrs. having total maximum permissible built up area of 11,758
sq.mtrs. (i.e. 10,400 sq.mtrs. +1358 sq.mtrs) situated and lying in City
Survey No. 288, Survey No.36, Hissa No.2 of Village Bandivali, Tal.
Andheri, Mumbai Suburban District, on the terms and conditions as
contained in the Deed of Lease executed between the parties hereto on 15 th
July 2008 and registered with Sub-Registrar of Assurances, Andheri,
Mumbai Suburban District at Sr. No. BDR-1-6983- 2008 on 16 th July 2008,
annexed hereto as "ANNEXURE-1".
2. It is hereby agreed and declared by and between the parties hereto that.
(a) The Lessee shall use the said additional built up area on the
said land leased to them and shall be at liberty to assign the said constructed
built up area subject to the terms and conditions and covenants as set out in
the said Lease Deed.
(b) The rest of the terms and conditions and covenants including
the terms of the said Deed of Lease shall continue to govern the relation of the
Lessor and Lessee and shall be binding on the Lessee. It is further agreed and
declared by the parties herein that the incremental premises hereby permitted to be
constructed and to be leased by the Lessor to the Lessee shall be deemed to be the
integral part of the demised premises as defined in the said Deed of Lease dated 15th
July 2008, annexed hereto as ANNEXURE-I."
(Emphasis Supplied)
12.30 On 24th July 2017, the Developer submitted revised plans to
MMRDA for development on the Suit Plot.
12.31 On 3rd August 2017, a Legal Notice was addressed by the Advocates
for the Appellants to MMRDA seeking disclosure of all permissions granted to the
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Developer and demanding revocation of all permissions granted to the Developer for
construction beyond 1.5 FSI.
12.32 On 6th September 2017, in response to the aforesaid Legal Notice,
MMRDA vide its letter stated that Section 7A of MOFA was not applicable to
MMRDA and that the said provision was only applicable to a promoter. MMRDA
clarified that it was a planning authority and not a promoter.
12.33 On 20th September 2017, in response to MMRDA's aforesaid letter,
the Advocates for the Appellants addressed another letter to MMRDA inter alia
stating that no application from the Developer ought to be entertained by MMRDA
for further construction on the Suit Plot.
12.34 On 22nd January 2018, a letter was addressed by the Architect
appointed by the Developer to MMRDA stating that plans for the Additional Building
were submitted for approval for consuming additional FSI of 1.5.
12.35 On 20th February 2018, a letter was addressed by MMRDA to the
Advocates for the Appellants stating that the flat purchasers' request to not entertain
the Developer's application for consuming additional FSI, was contrary to the
participatory scheme of ODC and the Notification dated 18 th November 2015 issued
by UDD. Further, by this letter, MMRDA informed the flat purchasers that the
application made by the Developer for consuming additional FSI will be proceeded
with by MMRDA.
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12.36 On 23rd February 2018, Commencement Certificate was issued by
MMRDA to the Developer for 1,658.26 sq. mtrs. as per sanctioned plan.
12.37 On 24th February 2018, a letter was addressed by the Advocates for
the Appellants to MMRDA requesting for certain documents from the legal cell as
well as a copy of Planning Proposal. In the meantime, MMRDA was requested not to
grant any permission to the Developer.
12.38 On 8th March 2018, in response to the above letter, MMRDA
informed the Advocates for the Appellants that they have already issued the
Commencement Certificate dated 23rd February 2018 for the Additional Building and
also forwarded the documents requested by the Advocates for the Appellants vide
their letter dated 24th February 2018.
12.39 On 22nd March 2018, a proposed plan for the Additional Building
was submitted by the Developer.
12.40 In April 2018, a Short Cause Suit No. 999 of 2018 was filed by the
Developer before the Bombay City Civil Court at Dindoshi against certain flat
purchasers seeking an injunction restraining them from obstructing the work of
additional construction/Additional Building.
12.41 On 7th April 2018, an Order was passed by the City Civil Court in
Developer's Suit directing parties to maintain status quo.
12.42 On 17th April 2018, an Order was passed by the City Civil Court
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granting ad-interim reliefs in terms of prayer clauses (a) and (b) of the Notice of
Motion filed in the Developer, in effect restraining the flat purchasers from disturbing,
interfering, preventing parking or obstructing or doing any act which may affect the
development progress of the sanctioned layout and/or obstruct the egress and ingress
of the directors, workers etc.
12.43 On 29th August 2018, the Appellants filed the Suit seeking the
following reliefs :
a) That it be declared that by selling all the flats in the Plaintiffs' building
known as Universal Garden- I constructed on Plot No. 288/B, bearing
Survey No.36, HissaNo.7 and Corresponding C.T.S. No.288/B,
admeasuring 6912.25 Meters, laying and being at Village Bandivali, Taluka
Andheri, Amrut Nagar, Jogeshwari (West), Mumbai-400 102 using the entire
FSI then available as sanctioned in Building Plan dated 24-12-2008 and
Occupation Plan dated 21-02-2014, to all the flat purchasers including
Plaintiffs, all the entitlement, right, title and interest in the said Building and
Plot including the future FSI after the date of possession and after expiry of
the period for formation of society, stood vested in the said flat purchasers
including Plaintiffs jointly and defendant no.1 has no right to avail any FSI
balance including future FSI and put up any additional construction on the
suit plot.
b) This Hon'ble Court be pleased to quash and set aside the
supplementary lease Deed dated 17th July, 2017, (Exhibit-W hereto) granting
additional FSI and construction permission to the Defendant no.1 on the suit
plot, subject to such terms and conditions as this Hon'ble Court may deem
fit and proper.
c) This Hon'ble Court be pleased to hold and declare that Defendant
No.1 has no right and authority to amend the existing lay out plan as
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approved in the original lay out plan dated 24-12-2008 and put up additional
construction on the suit Plot No. 288/B, bearing Survey No.36, Hissa No.7
and Corresponding C.T.S. No.288/B, admeasuring 6912.25 2 Meters, laying
and being at Village Bandivali, Taluka Andheri, Amrut Nagar, Jogeshwari
(West), Mumbai-400 102, without the specific and informed consent of each
of the Plaintiffs hereto.
d) This Hon'ble Court be pleased to permanently restraint Defendant
No. 1 to 7 and all other persons claiming through them from putting up
additional buildings on the suit Plot No. 288/B, bearing Survey No.36, Hissa
No.7 and Corresponding C.T.S. No.288/B, admeasuring 6912.25 2 Meters,
laying and being at Village Bandivali, Taluka Andheri, Amrut Nagar,
Jogeshwari (West), Mumbai-400 102 and from creating any encumbrances
on the said property by way of gift, sale, mortgage, lien, lease, tenancy,
license, or by transfer of FSI of the suit plot, or in any other manner
whatsoever nature on the said Plot and/or any structure constructed thereon.
e) This Hon'ble Court be pleased to hold and declare that the
proposed construction by amending the original building plan dated 24-12-
2008 and Occupation Plan dated 21-02-2014 without the consent of the
Plaintiffs, is illegal and this Hon'ble Court may be further pleased to quash
and set aside all the amended plans approved by the Defendant no.8 after 21-
02-2014 and further order and direct the 1 st defendant to demolish all the
constructions carried out pursuant to the said amended plans as approved by
the 8th defendant hereto.
f) This Hon'ble Court be pleased permanently restraint Defendant
No. 1 to 7 their agents, servants and all persons claiming through the
defendant no.1 from obstructing use and enjoyment of the suit plot, the
ingress and engress of the Plaintiffs and their family members to the said suit
plot and from creating any obstructions and hindrances for the usage on the
said plot;
g) This Hon'ble Court be pleased to order and decree the Defendant
no.1 developer and all its directors including Defendant no.2 to 7 hereto, to
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account for all the monies collected from the Plaintiffs towards share money,
society formation charges, legal charges, development charges, charges for
health club and garden, electricity & water meter deposits, advance property
taxes & maintenance charges, etc as mentioned in the Statement annexed at
Exhibit - QQ hereto, and after furnishing the audited accounts with every
supporting documents, they be ordered and decreed to refund all the monies
for which no supporting proof of expenditure is furnished along with interest
at the rate of 18% p.a., from the date of collection of such amounts, till date of
refund or realization, to the respective Plaintiffs as detailed in the Particulars
of Claim at Exhibit-QQ hereto;
h) In the event the Defendant no.1 to 7 failing to provide audited
accounts with supporting proof of expenditure of each items of amounts
collected by them, as mentioned in the Statement annexed at Exhibit-QQ
hereto, they be ordered and decreed to pay a total sum of Rs.3,51,61,644.70
consisting of Rs.1,95,88,660/- towards principal and Rs.1,55,72,984.70
towards till date of this suit, along with further interest thereon @ 18% on
annual rest on total amount of Rs.3,51,61,644.70 from the date of this suit till
date of payment or realisation thereof to the respective Plaintiffs as detailed
in the Particulars of Claim at Exhibit-QQ hereto,
i) This Hon'ble Court be pleased to order and decree the Defendant
no.1 developer and all its directors including Defendant no.2 to 7 hereto, to
pay compensation to the Plaintiffs for non-formation of the co-operative
society for their building since 2014, for non-obtaining of Building
Completion certificate and for obstructing the formation of the said society
by the Plaintiffs themselves, at the rate of Rs.10,000/- per annum to each of
the Plaintiff no.1 to 101 for every year from 2014 till date of the formation of
the Society and obtaining of Building Completion Certificate along with
interest at the rate of 18% p.a., from the date of this suit till date of payment
or realization thereof, as per Particular of Claim given in Exhibit-RR hereto ;
j) This Hon'ble Court be pleased to order and decree the Defendant
no.1 developer and all its directors including Defendant no.2 to 7 hereto, to
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reimburse to the Plaintiffs collectively a total sum of Rs 36,53,583/- as per
Particulars of Claim at Exhibit-SS9 hereto for the amounts incurred by the
Plaintiffs for completing the incomplete and inferior work done by the
Defendant no.1, along with interest at the rate of 18% p.a., from the date of
spending of the said amount till date of payment or realization thereof.
k) This Hon'ble Court be pleased to order and decree the Defendant
no.1 developer and all its directors including Defendant no.2 to 7 hereto, the
Plaintiffs collectively a total sum of Rs.25,19,088/- (Rupees Twenty Five
Lakh Nineteen Thousand Eighty Eight Only) as per Particulars of Claim at
Exhibit-TT6 hereto for the amounts to be incurred by the Plaintiffs for
completing various incomplete and inferior work done by the Defendant
no.1, along with interst at the rate of 18% p.a., from the date of this Suit till
date of payment or realization thereof.
l) That this Hon'ble Court be pleased to lift the corporate veil of the
defendant no.1 company and be further pleased to hold and declare that the
Defendant No. 2 to 7 are personally liable satisfying all the debts of the
defendant no.1 company."
12.44 On 29th August 2018, the Appellants also filed the Notice of Motion
inter alia seeking an injunction restraining the Developer from carrying out
construction of the Additional Building.
12.45 On 27th September 2018, the Developer filed its Affidavit in Reply
stating that under Clause 3 of the Indemnity Bonds executed by the flat purchasers,
including the Appellants herein, the flat purchasers were aware that an Additional
Building was to be developed by the Developer on the undeveloped part of the Suit
Plot situated on the east side of the said Building. Both Buildings were to be connected
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to each other by podium and that the flat purchasers had agreed that they shall not
restrain the construction of the Additional Building.
12.46 On 28th September 2020, the Appellants filed an Interim Application
seeking reliefs set out in paragraph 8 hereinabove on the grounds that during the
pendency of the Notice of Motion, the Developer had obtained a further CC for the
Additional Building.
12.47 On 1st October 2018, an Order was passed by the Learned Single
Judge observing that the piling work for the Additional Building was being carried out
by the Developer and all further work shall be subject to further orders of the Court.
12.48 On 25th November 2020, the Learned Single Judge, passed the
Impugned Order.
12.49 On 5th December 2020, being aggrieved by the Impugned Order, the
Appellants preferred the present Appeal.
IMPUGNED ORDER
13. By the Impugned Order, the Learned Single Judge dismissed the Notice
of Motion and the Interim Application and has held that the provisions of MOFA are
expressly excluded against MMRDA and any provision of MOFA which affects the
rights of MMRDA cannot be enforced. Further, by the Impugned Order, the Learned
Single Judge has held that the Appellants were at liberty to seek enforcement of
obligations of Developer under MOFA but none of these obligations can cause
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detriment to the rights of MMRDA.
13.1 The relevant findings from the Impugned Order are reproduced
hereunder :
"38. [...] In the present case it is evident that defendant no. 1 has
agreed that the MOFA model will be followed and that is what is seen
from the contents of the model will be followed and that is what is seen
from the contents of the agreement and the various clauses. To that
extent the plaintiff may be right in contending that defendant no. 1 is
bound by MOFA. However a distinction needs to be made due to the
involvement of MMRDA. MMRDA is owner of the land. The lands
are now leased for a limited period of time. The plaintiffs have made
an incorrect statement that they are absolute owners of the land.
MMRDA is also entitled to some constructed area. In these
circumstances the plaintiffs attempt to enforce provisions of section 7
upon defendant nos 1 to 7 will necessarily prejudice MMRDA as well,
because consequent upon the express exclusion of the MOFA in
respect of the lands vested in the MMRDA none of the sections of
MOFA can be enforced against MMRDA. For that reason also no
relief can be granted to the plaintiff.
39. I make it clear that the plaintiffs will always be at liberty to
seek enforcement of other terms of the agreement including the
obligations defendant no.1 has undertaken as provided in MOFA but
none of these obligations could entail any prejudice to MMRDA.
Enforcement of clause 7 would detrimentally affect MMRDA rights
and MMRDA would also be required to negotiate with the plaintiffs
who may seek further benefits. Considering the fact that the plaintiffs
have all executed indemnity bonds referred to above and had complete
knowledge of the possibility of Wing B coming up. The balance of
convenience does not favour the plaintiff. Delay in approaching the Court
as dealt with elsewhere in this order must also be held against the
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plaintiff. No case is made out for grant of relief and in that view of the
matter, the plaintiffs' cannot restrict the rights of the 1st defendant to
exploit further FSI as granted by the MMRDA."
(Emphasis Supplied)
ISSUES FOR CONSIDERATION
14. In order to decide the present Appeal, the following issues will have to be
considered :
ISSUE NO.1 - Whether Section 31 read with Schedule II, Clause II of
the MMRDA Act exclude the applicability of MOFA as a whole?; or, Whether Section
31 read with Schedule II, Clause II of the MMRDA Act excludes applicability of
MOFA only to the extent that it affects the rights of MMRDA but that MOFA applies
as between the developer and the flat purchasers inter se in respect of a building
constructed on MMRDA leased lands?
ISSUE NO.2 - Would the enforcement of Section 7 of MOFA, as sought
to be invoked by the Appellants in the present case affect the rights of MMRDA?
ISSUE NO.3 - If the applicability of MOFA has been excluded by the
MMRDA Act in respect of a project, can the Developer and flat purchasers contract to
incorporate the provisions of MOFA and would those provisions of MOFA bind the
parties inter se?
SUBMISSIONS OF THE PARTIES :
ISSUE NO.1 - Whether Section 31 read with Schedule II, Clause II of the
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MMRDA Act exclude the applicability of MOFA as a whole?; or, Whether Section 31
read with Schedule II, Clause II of the MMRDA Act excludes applicability of MOFA
only to the extent that it affects the rights of MMRDA but that MOFA applies as
between the developer and the flat purchasers inter se in respect of a building
constructed on MMRDA leased lands?
15. Shri Karl Tamboly, Learned Advocate representing the Appellants has
made the following submissions :
15.1 That a conjoint reading of (i) the heading to Chapter VII of the
MMRDA Act (i.e. "Application Of With Or Without Modifications Or Exemption From
Certain Enactment To The Metropolitan Authority"), (ii) the marginal note to Section
31 of the MMRDA Act (i.e. "The enactments mentioned in Schedule II shall apply with or
without modifications, or shall not apply to the Metropolitan Authority, or shall be
amended, to the extent and in the manner mentioned in that Schedule") and (iii) Section
31 itself, indicate that the application/non application of the enactments mentioned in
Schedule II of the MMRDA Act is meant to operate only in respect of MMRDA, and
to no one else.
15.2 That a plain reading of these provisions would indicate that the exclusion
of MOFA is only confined to MMRDA and not to a private developer which is
implementing a project on MMRDA land as obviously, MMRDA as the owner of land
cannot be made liable for the obligations of a promoter under MOFA. However,
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significantly, neither Section 31 nor Schedule II, Clause II of the MMRDA Act exclude
the application of MOFA to MMRDA's lessees or developers appointed by
MMRDA's lessees.
15.3 In fact, this is also MMRDA's understanding as reflected from their
letter dated 6th September 2017 where they have stated that Section 7 of MOFA
cannot be applied to MMRDA as it is not the Promoter. MMRDA has reiterated the
aforesaid stand even in their Affidavit in Reply dated 26th November 2018 to the
Notice of Motion wherein it was stated that MOFA can apply to the Developer upon
taking permission of MMRDA. This shows there is no complete exclusion.
15.4 That the word "or" occurring between "land" and "building" in
Schedule II, Clause II of the MMRD Act ought to be read as "and". This is inter alia
because reading it as "or" leads to incongruous consequences, whereas, reading it as
"and" is consistent with the interpretation of Section 31 read with Schedule II,
Clause II that the exclusion of MOFA is confined only to MMRDA. If the word "or"
is read as it is, it leads to an anomalous situation where a land may belong to MMRDA
and the building may not, in which case, MOFA will apply to the building and not to
the land. Whereas, if the word "or" is read as "and" then the exclusion of MOFA is
attracted only when both the land and building belong to or vest in MMRDA, which is
consistent with (i) the heading to Chapter VII, (ii) the marginal note to Section 31 and
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(iii) Section 31 itself. In Fakir Mohd. V/s. Sita Ram1 the Supreme Court has held that
it is permissible to read "or" as "and" and vice-versa if some other part of the same
statute or the legislative intent clearly spells out such a requirement.
15.5 That in the present case, the courts must apply the purposive rule of
interpretation and not the literal rule of interpretation to interpret Section 31 read with
Schedule II, Clause II of MMRDA Act, as the application of the rule of literal
interpretation would lead to absurdity. The absurdity would mean that the beneficial
provisions of MOFA are denied to flat purchasers even as against the Developer.
15.6 MOFA is a beneficial legislation. It is settled law that a beneficial
legislation has to be interpreted in a manner so as to further the beneficial object
envisaged by the said legislation.
15.7 If the MOFA exclusion is extended to the lessee of MMRDA land or to a
private developer appointed by such lessee, who comes within the definition of
promoter under Section 2(c) of MOFA, the same would lead to manifest absurdity.
There is no rational whatsoever for excluding the protective provisions of MOFA,
which are meant to secure and safeguard the rights of flat purchasers while balancing
the rights and interest of the promoter. Further, if the protective provisions
contemplated in MOFA qua a developer are excluded, the same will lead to the
following absurdities :
1 (2002) 1 SCC 741
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(i) the developer will be able to make every promise to a flat
purchaser thereby making the flat purchaser alter their position by parting with large
sums of money for purchasing a flat, and then the developer will simply renege from
every such obligation based on Section 31 of MMRDA Act, thereby leaving the flat
purchasers completely helpless.
(ii) The developer need not disclose the plans and specifications on
the basis of which he intends to carry out construction, which disclosure is otherwise
mandatory under MOFA.
(iii) the developer will not be bound by the general obligations
imposed on it such as disclosure of plans specifications, etc.
(iv) the developer need not enter into an agreement with the flat
purchaser while accepting advance payment or deposit towards consideration for the
flat beyond a certain threshold.
(v) the developer can go on carrying out construction indefinitely as
and when FSI/TDR becomes available due to change in policy, without any freezing
point contrary to the representations made to the flat purchasers at the time of selling
the flats.
(vi) the developer need not take steps for formation of a cooperative
society or company or association of flat purchasers or for conveyance of land to the
organization of flat purchasers.
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(vii) In the recent enactment of Real Estate (Regulation and
Development) Act, 2016 ("RERA Act"), MMRDA is covered under the definition of
'Promoter'. Section 17 of the said RERA Act casts a duty on the said Promoter land
owner to execute the conveyance in favour of the body of the flat purchasers of the
"project" registered under the said RERA. If MOFA is held to be inapplicable to the
said Building of the Appellants, then the end result would be the flat purchasers in the
said Additional Building which is registered under RERA Act, once their society is
registered, would get the conveyance of the entire land including the land upon which
the building of the Appellants is constructed and the Appellants would not have any
right in the land.
(viii) That the future society of the new purchasers in the said
Additional Building can possibly assert property rights against the Appellants. The
garden, recreation area, club house etc. which are part of the Appellants building
presently will not only be used by the flat purchasers in the new building, but they can
claim conveyance thereof, as per RERA.
15.8 Therefore, all the safeguards inserted in MOFA which are to enure to
the benefit of flat purchasers, will be deprived to a flat purchaser merely because he
has chosen to purchase a flat on a plot of land belonging to MMRDA. As such, there is
no conceivable difference and/or distinction between a flat purchaser on MMRDA
land and a flat purchaser elsewhere, say on land belonging to Maharashtra Housing
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and Area Development Authority ("MHADA") or to the MCGM or the State of
Maharashtra.
15.9 Therefore, the exclusion of MOFA qua a private developer would lead to
disastrous consequences and flat purchasers would be rendered completely helpless
and be entirely at the mercy of promoters who would leave no stone unturned to
maximize their profit even if it be at the expense and /or to the prejudice of the flat
purchasers and their rights. The legislature could have never intended for such
disastrous consequences and therefore, this is fit and proper case to depart from the
literal rule of interpretation of statues in order to balance the rights and obligations of
the promoters, flat purchasers and MMRDA by holding that private developers are
bound by MOFA obligations
15.10 The Maharashtra Housing and Area Development Act, 1976
("MHADA Act") was introduced in 1976. The Authority constituted under the
MHADA Act i.e. MHADA, is also a Planning and Development Authority. The
functions, objects and purpose of constituting MHADA are identical as that of
MMRDA under the MMRDA Act. Both MHADA Act and MMRDA Act contain
exclusion clauses for non-application of MOFA to both the Authorities and to the land
and buildings belonging to both the Authorities. Since the language used in Section
190 of the MHADA Act, 1976 and Clause II under Schedule II of Section 31 of the
MMRDA Act is the same, so far as the exclusion of MOFA is concerned, the
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interpretation and effect of such exclusion has to be same. Judicial notice must be
taken of the fact that the application of MOFA has not been excluded qua land owned
by MHADA or qua developers constructing real estate projects on MHADA land.
The same interpretation and yardstick would have to be applied in respect of land
owned by MMRDA.
15.11 MOFA Act itself was amended vide MAH No.12 of 1986 wherein
Section 18 was substituted which provided that nothing in MOFA shall apply to
MHADA and the boards established under the MHADA Act. Significantly, there was
no amendment introduced in MOFA to provide a similar exclusion to the MMRDA.
This clearly demonstrates that the legislative intent is not to exclude MOFA so far as
the flat purchasers are concerned who purchased flats on land belonging to MMRDA.
15.12 The Appellants have relied on the following judgments for the following
propositions :
(i) CWS (India) Ltd V/s. CIT2 and Tirath Singh V/s. Bachittar
Singh3 - courts must depart from the literal rule of interpretation when the same leads
to an absurdity.
(ii) State of MP V/s. Azad Bharat Finance4 - If a statute leads to
absurdity, hardship or injustice presumably not intended, a construction may be put
2 1994 Supp (2) SCC 296
3 AIR 1955 SC830
4 AIR 1967 SC 267
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which modifies the meaning of the words.
(iii) Baburao Shantaram More V/s. Bombay Housing Board5 and
Dwarkadas Marfatia V/s. Board of Trustees6 - When the operation of a
protective/beneficial legislation is suspended qua the state or an instrumentality of the
state it is on the basis that the state will not commit the mischief for which the
protective/beneficial legislation was introduced.
(iv) H. S. Vankani V/s. State of Gujarat7 - courts must presume that
Parliament did not intend a statute to have consequences which are objectionable,
undesirable, absurd, unworkable, impracticable, inconvenient, or anomalous, illogical,
futile or pointless.
(v) Kehar Singh V/s. State (Delhi Administration)8 - If the words of
a statute give rise to doubt, there is a duty to put upon the language of the legislature a
rational meaning.
(vi) Rattan Chand Hira Chand V/s. Askar Nawaz9 and Vasant
Ganpat Padave V/s. Anant Mahadev Sawant10 - The legislature often fails to keep
pace with the changing needs and values and it is obligatory on the courts to step in to
fill the lacuna. When courts perform this function, undoubtedly, they legislate
5 AIR 1954 SC 153 - Paragraph 6
6 (1989) 3 SCC 293 - Paragraph 15
7 2010 4 SCC 301
8 1988 3 SCC 609
9 (1991) 3 SCC 67
10 (2019) 19 SCC 577 - Paragraphs 25 to 28
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judicially. But that is a kind of legislation which stands implicitly delegated to them to
further the object of the legislation and to promote the goals of the society.
(vii) Eternia Co-operative Housing Society Ltd. Vs Lakeview
Developers BOM H.C. (S.B)11 - In a suit filed by flat purchasers of a building on
MMRDA land for protection of their rights to additional FSI, MMRDA has impliedly
conceded the fact that MOFA is applicable to the MMRDA land and the Developer.
15.13 Therefore, the exclusion of MOFA is confined only to MMRDA and the said
exclusion would not extend to a private developer who is promoter within the meaning
of Section 2(c) of MOFA.
16. Shri J P Sen, Learned Senior Advocate representing the Developer has
made the following submissions :
16.1 That Schedule II to the MMRDA Act does not exclude the applicability
of MOFA only to MMRDA but makes MOFA inapplicable to "any land or building
belonging to or vesting in" MMRDA. It is an admitted position that the suit land
belongs to MMRDA. As such, on a plain reading of Section 31 read with the relevant
entry in Schedule II, MOFA has no application to the Suit Plot at all. As such, no
question can possibly arise of any provision in MOFA being enforced in respect of the
Suit Plot against either MMRDA or against the Developer, who is merely its agent.
16.2 What MOFA does is to modify by statute the incidents of ownership and
11 2015 SCC OnLine Bom 723
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to impose limitations on the freedom of an owner in the matter of developing his
property and contracting in respect of it. It is clearly the legislative intent that these
modifications and limitations will have no application to any land that is owned by
MMRDA.
17. Shri Sharan Jagtiani, Learned Senior Advocate representing MMRDA
(Respondent No. 8) has made the following submissions :
17.1 As per the Preamble of the MMRDA Act, it is an act inter alia for the
establishment of an authority for the purpose of planning, coordinating and
supervising the proper, orderly and rapid development of the areas in that region and
of executing plans, projects and schemes for such development and to provide for
matters connected therewith.
17.2 From a perusal of the scheme of the MMRDA Act, it is clear that the
MMRDA Act is a complete and a self-contained code to achieve the aforesaid
intended object and purpose of the Act.
17.3 That the plain meaning of Section 31 read with Schedule II, Clause II of
the MMRDA Act expresses the clear intention of the legislature to exclude the
operation of MOFA as against MMRDA or to any land or building belonging to or
vesting in MMRDA.
17.4 That as per Section 31 read with Schedule II, Clause II of the MMRDA
Act, excludes MOFA not only against MMRDA but also to any land or building
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belonging to or vesting in MMRDA. The conscious exclusion of MOFA not only
against the MMRDA but also to the land or building belonging to or vesting in
MMRDA makes it abundantly clear that the intention of the legislature was to exclude
MOFA completely.
17.5 That the use of the word "or" in the exclusion or ouster provision is
clearly intended to widen the scope of the exclusion. That the width of the exclusion
under the aforesaid provisions is also apparent from the use of word "land" because
land includes benefits to arise out of land. Therefore, land must be understood as per
its wider meaning and applicability of MOFA is excluded as to land as also the benefits
arising out of land, belonging to or vesting in MMRDA namely, in this case, FSI.
17.6 Another reason to widely construe the exclusion of MOFA is in the
choice of expressions '...or to any land or building belonging to or vesting in the
Authority'. Belonging to has a wider meaning than even vesting. This shows that the
width of the exclusion is very wide and not confined to only MMRDA, as suggested by
the Appellants.
17.7 That just as much as enacting laws by a competent legislature is within
the plenary legislative function so also the repeal of legislature or restrictions on the
operation of legislature is equally a primary legislative function. The intention of the
legislature in exercising that function has been expressed in no uncertain terms by
Section 31 read with Schedule II.
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17.8 That in the present case, given that the plain meaning of the aforesaid
provision is clear and unambiguous, there is absolutely no reason to depart from it.
17.9 That the rule of purposive interpretation states that when the material
words are capable of two interpretations, the courts must adopt that interpretation
which "shall suppress the mischief and advance the remedy". In the present case even if
purposive interpretation of Section 31 read with Schedule II Clause II is considered, it
would yield the same result as that obtained by applying literal rule of interpretation of
statutes.
17.10 The object of the MMRDA Act is inter alia to establish an authority
which would provide for planning, coordinating and supervising the proper, orderly
and rapid development of the areas in that region and of executing plans, projects and
schemes for such development. The object of the authority i.e. MMRDA, so set up, is
to secure the development of the MMR. MMRDA in furtherance of this object
supervises projects and even takes part in its execution. It acquires, holds and disposes
(by lease) land (which includes benefits arising out of land) for the purposes of
carrying out the development. In order to achieve the aforesaid objective, the
legislature has consciously excluded various acts other than MOFA or provided for the
manner in which they will be applied. This has been done with a view to ensure that
the provisions of the MMRDA Act are implemented effectively. Thus, considering the
aforesaid object, if MOFA is applied, it would create impediments in the
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implementation of the scheme of the MMRDA Act.
17.11 For example, if Section 7 and 7A of MOFA are applied to MMRDA or to
land or building belonging to or vesting in MMRDA, the consent of the purchasers
would be required before utilizing additional FSI, which FSI does not even belong to
them. Further, if MOFA is applied, the consent of the purchasers would be required
before amending plans, etc. which power exclusively vests in MMRDA. It is inter alia
for these reasons, that MOFA has not been made applicable to MMRDA or to any
land or building belonging to or vesting in MMRDA. This is keeping in mind the
objects sought to be achieved and the purpose intended to be served by the Act and to
advance the cause for which the enactment is brought into force.
17.12 Therefore, even if the purposive rule of interpretation is applied, it still
leads to the same result that MOFA would not be applicable to MMRDA or land or
building belonging to or vesting in MMRDA.
17.13 The exclusion of MOFA by the MMRDA Act is not unusual. After
MHADA Act was enacted in 1976, an amendment was carried out to MOFA and
Section 18 was added. Section 18 provides that MOFA shall not apply to MHADA
Act. Thus, the exclusion of MOFA under the MMRDA Act is nothing new. This
could have been done even by amending MOFA again, like it was done after
enactment of MHADA Act. However, since MMRDA act excludes a lot of other
legislations or applies the same with modifications, it is a matter of legislative
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convenience that instead of amending the Maharashtra Government Premises
(Eviction) Act 1956, Land Acquisition Act 1894, etc. what the legislature has deemed
it fit to do is that by adding this provision i.e. Section 31, indicated how the various acts
would or would not apply. Therefore, non-applicability of MOFA to lands or buildings
owned by statutory authorities (in the present case MMRDA) is not new, it is in
MOFA itself and is therefore consistent.
17.14 That the argument of the Appellants that if literal rule of interpretation
is applied to Section 31 read with Schedule II, Clause II, it would lead to absurdity is a
complete misconception of what constitutes an 'absurdity'. An absurdity must be one,
which influences the process of statutory interpretation and is usually one in which the
provisions of an act, if interpreted in a particular manner 'literally or otherwise' create
an irreconcilable contradiction within the Act or defeat the scheme and purpose of
that Act itself. In the case of Vasant Ganpat Padave (supra), relied upon by the
Appellants, the Court held that a particular reading of the provisions of that act makes
that Act itself unworkable. The argument of absurdity can have no application when
the provisions including the protection of an Act such as MOFA is made inapplicable
by a subsequent legislation.
17.15 In this context, the argument of absurdity, allegedly brought about by
Section 31 read with Schedule II, could only be made if a plain meaning of those
provisions is inherently inconsistent with the provisions of the same act i.e. the
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MMRDA Act. That is not even the submission of the Appellant.
17.16 That regardless, of the approach of interpretation one adopts, the choice
of language employed by the legislature in Section 31 read with Schedule II Clause II
makes it clear that MOFA cannot be made applicable to MMRDA or land or building
belonging to or vesting in MMRDA. To permit such application of MOFA would do
substantial violence to the plain or purposive meaning of Section 31 and the statutory
scheme of the MMRDA Act and the objectives it seeks to achieve. This would also
significantly affect the development of ODC as contemplated under the sanctioned
planning proposals which seek to decentralize commercial spaces in Mumbai and
generate employment in the ODC. This would also have a cascading impact on the
development of various other notified areas where the Authority has been appointed
as the Special Planning Authority.
17.17 That the argument of the Appellants that the expression "or" must be
read as "and" in Schedule II, Clause II is again misconceived and against the settled
principles of law. The normal rule is that "and" must be read as conjunctive and "or"
must be read as disjunctive. There must be compelling reasons to read "or" as "and"
as explained above and vice versa. "OR" is a conscious choice.
17.18 That during the course of oral arguments, Appellants' had argued that
the rule of ejusdem generis must be applied in the present case which is once again
misconceived. This rule can be applied when general words in a statutory text are
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flanked by restricted words, the meaning of the general words are taken to be restricted
by implication with the meaning of restricted words. As from a reading of Section 31
read with Schedule II, Clause II of the MMRDA Act, no contrary intention appear,
the rule cannot be applied in the present case to read the words "any land or building
vesting in".
17.19 That during the course of oral arguments, Appellants had also argued
that this is a case of casus ommisus and the courts must read into Section 31 and must
supply additional words to Section 31 read with Schedule II, Clause II of the MMRDA
Act to mean that MOFA does not apply to MMRDA but would still apply to the
Developer (even if the project is on a land belonging to MMRDA). This is not a case
of casus ommisus and no words can be added to a statute when the plain meaning is
clear and unless clear reasons for it are found within the four corners of the Act itself.
17.20 In response to the Appellants' submission that the exclusion of MOFA,
especially after RERA Act, leads to an irreconcilable situation or 'absurdity' it is
important to note that the Appellants have not challenged the vires of either RERA or
the MMRDA Act in this regard.
17.21 Every legislation is based on experimentation or what one may call trial
and error method. While enacting a law the legislature cannot anticipate all possible
effects of how the legislation would operate.
17.22 That no prejudice will be caused to the flat purchasers if MOFA is
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excluded as a whole. In the present case, the Appellants have not alleged that there
have been unauthorized amendments in plans or that the construction is carried out in
contravention of amended plans. Further, nor have the Appellants claimed that the
developer has refused to execute a registered agreement for the flat purchased by
them. Insofar as formation of society is concerned, there is no prohibition in law for a
society of flat purchasers to be formed with respect to a building constructed on
MMRDA owned land. However, the formation of a society at the behest of the
promoter under MOFA is not the correct approach which has to be adopted for
registration of a society. A proposed society may, with the permission of MMRDA,
form a society under the Maharashtra Cooperative Societies Act, 1960 ("MCS Act").
However, the Appellants insistence that the owner / Respondent No.1 is duty bound
to form this society and convey its title to the society of flat purchasers as per MOFA
is misconceived and unsustainable given that MOFA is not applicable to such lands. In
fact, one such Society viz. Fountain Square Co-operative Society Limited has been
formed by flat purchasers on a land vesting in MMRDA.
17.23 What the Appellants seek is virtually an application of RERA to the said
Building although the OC for this Wing was granted in 2014, long before the
enactment of RERA. The Appellants cannot, by analogy, seek the applicability of
legislation which does not, by the very language of that legislation, apply.
17.24 The Appellants have relied on certain averments made in the Affidavit in
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Reply dated 26th November 2018 filed in the Notice of Motion to contend that even as
per MMRDA, the provisions of MOFA were applicable to the Developer. Assuming
whilst denying that the Affidavit purports to state that MOFA does not apply to
MMRDA but has limited application even as regards lands or buildings belonging to or
vesting in MMRDA, such a statement can never operate as an estoppel against the
application of primary legislation, the plain and purposive meaning of which is clear
and unambiguous.
17.25 In support of its submissions, Shri Jagtiani has relied upon the following
judgments for the following propositions :
(i) State of U.P. v. Hindustan Aluminium Corpn. 12 - the power to
legislate is both positive in the sense of making a law, and negative in the sense of
repealing a law or making it inoperative. But the judge of the change should be the
Legislature, and courts are not expected to undertake that duty unless that becomes
unavoidable and the circumstances are so apparent as to lead to one and only one
conclusion.
(ii) Janhit Manch through its President Bhagvanji Raiyani and Anr.
v State of Maharashtra & Ors.13 - Policies formulated and legislations made cannot be
interfered with, unless they fall foul of the Constitution of India.
(iii) B. Premanand v Mohan Koikal14 - When the plain meaning of
12 (1979) 3 SCC 229
13 2019 2 SCC 505
14 (2011 4 SCC 266)
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words of a statute are clear and unambiguous it is not necessary to depart from the
foremost principle of interpretation i.e., the literal rule of interpretation and there is no
scope for importing any rule of interpretation. The Court further held that it is not
proper for the court to depart from the literal rule as that would really be amending the
law in the garb of interpretation, which is not permissible.
(iv) Ragunath Rai Bareja and Ors. v. Punjab National Bank and
Ors.15 - The first and foremost principle of interpretation of a statute in every system
of interpretation is the literal rule of interpretation. The other rules of interpretation
e.g. the mischief rule, purposive interpretation etc. can only be resorted to when the
plain words of a statute are ambiguous or lead to no intelligible results or if read
literally would nullify the very object of the statute.
(v) Mathews J Nedumpara and Ors. v Shri Fali S Nariman and
Ors.16 - When the words of a statute are clear, plain or unambiguous and can have only
one meaning, the Courts are bound to give effect to that meaning irrespective of the
consequence. It is a cardinal principle of interpretation of statute that the law is to be
interpreted in a manner as laid down in the statute book in furtherance to the
legislative intent and not to interpret or give it a meaning which runs contrary to the
legislative intent.
(vi) Bharat Bhogilal Patel v Leitz Tooling Systems India Pvt. Ltd. 17 -
15 2007 2 SCC 230 - Paras 20 to 30
16 Writ Petition (C) No. 2199 of 2019
17 2019 SCC OnLine Bom 890 - Para 27
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If the words used are capable of one construction only then it would not be open to the
courts to adopt any other hypothetical construction on the ground that such
construction is more inconsistent with the alleged object and policy of the subject Act.
(vii) In Shri Ram Saha v State of W.B. & Ors.18 - While applying the
rule of purposive construction, has held that a word of caution is necessary that the
text of the statute is not to be sacrificed and the court cannot rewrite the statute.
(viii) Manmohan Das Shah v Bishun Das 19- While refusing to read
"or" as "and", the Supreme Court held that the ordinary rule of construction is that a
provision of a statute must be construed in accordance with the language used therein
unless there are compelling reasons, such as, where a literal construction would
reduce the provision to absurdity or prevent the manifest intention of the legislature
from being carried out. There is no reason why the word "or" should be construed
otherwise than in its ordinary meaning.
(ix) Maharashtra University of Health Sciences & Ors. v Satchikitsa
Prasarak Mandal & Ors.20 - The rule of ejusdem generis can be applied when general
words in a statutory text are flanked by restricted words, the meaning of the general
words are taken to be restricted by implication with the meaning of restricted words.
(x) Commissioner of Income Tax, Central Calcutta v National Taj
18 AIR 2004 SC 5080
19 AIR 1967 SCC 643
20 2010 3 SCC 786
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Traders21 - Under the first principle a casus omissus cannot be supplied by the Court
except in the case of clear necessity and when reason for it is found in the four corners
of the statute itself but at the same time a casus omissus should not be readily inferred
and for that purpose all the parts of a statute or section must be construed together
and every clause of a section should be construed with reference to the context and
other clauses thereof so that the construction to be put on a particular provision makes
a consistent enactment of the whole statute.
(xi) Supriya Rajesh Nair v MCGM & Ors.22 - While considering
whether a letter addressed by the UDD, Government of Maharashtra to the
Additional Government Pleader could have any bearing on the interpretation and
application to a GR held that "a correspondence between the UDD and its advocate cannot
be read as an aid to interpretation of a Government Resolution, especially when its plain
meaning is clear."
(xii) Bank of Baroda, Mumbai & Anr. v MMRDA & Ors. 23 - That
doctrine of promissory estoppel cannot be invoked to compel the public bodies or the
Government to carry out a promise which is contrary to law.
17.26 Thus, the MMRDA Act, more particularly Section 31 read with
Schedule II, Clause II thereof, exclude the applicability of MOFA not only qua
MMRDA or to any land or building belonging to or vesting in MMRDA but also
21 1980 1 SCC 370
22 2021 SCC OnLine Bom 1540
23 2010 (3) Mh.L.J. 823
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against the Developer and flat purchasers inter se.
18. Shri Rohaan Cama, Learned Amicus Curiae has made the following
submissions :
18.1 A perusal of Section 2(c), 2(d), 31 read with Schedule II, would show
that under Section 31 the legislature intended to exclude certain enactments from
applying to MMRDA and/or provided that the same would apply in amended form to
the extent and in the manner set out in the schedule. Accordingly, Schedule II then
provides that MOFA would not apply to (i) MMRDA or (ii) any land belonging to or
vesting in MMRDA; or (iii) a building belonging to or vesting in MMRDA.
18.2 Thus, what falls within the exclusion i.e. to which MOFA shall not apply,
is to MMRDA itself or to any 'land' or 'building' belonging to or vesting in MMRDA.
The definition of 'land' includes benefits to arise out of the land, which ex facie
includes the FSI potential of the land. It is nobody's case that MMRDA is not the
owner of the land. If that be so, then ipso facto MMRDA is the owner of the benefits
arising out of the subject land i.e. the FSI. The FSI in the present case arising on
MMRDA owned/leased land, vests in MMRDA. It follows on a plain and literal
reading of Schedule II read with the definition of 'land', that MOFA will not apply to
FSI arising out of the subject land owned / leased by MMRDA. Thus, the Appellants
contention that MOFA would apply in full even to lands leased to the owner (or
Developer claiming under him) from MMRDA, as all the FSI purportedly vests in the
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Society, since the Developer was required to execute a sub-lease in favour of the
society. However, this formulation entirely ignores Section 31 read with Schedule II
and the definition of 'land' referred to above. There is a clear statutory exclusion of
'land', which as aforesaid includes the FSI arising out of the land. This statutory
exclusion cannot simply be ignored, which is effectively what the Appellants seek to
do.
18.3 In paragraphs 37 to 39 and 66 to 67 of the Plaint, the Appellants have
specifically come with a case that the Flat Purchasers acquire rights in the subject land
and the additional FSI or any FSI whatsoever in respect of such lands, which may
become available in future, vest in the Flat Purchasers. These averments and prayers
sought clearly show that the Appellants, purportedly exercising rights under Section 7
of MOFA, are seeking to lay claim to FSI arising out of land owned and leased by
MMRDA. This is clearly ex facie in the teeth of the exclusion of MOFA to 'land' i.e.
FSI belonging to / vesting in MMRDA. For the above reasons, it is respectfully
submitted that Section 7 of MOFA upon which the Appellants place reliance to claim
rights to the FSI on the subject MMRDA owned / leased land, is excluded from
applying in the present case by virtue of the statutory provisions of Section 31 read
with Schedule II.
18.4 However, there is a distinction to be drawn between 'land' and
'development', which is defined under Section 2(c) above. 'Development' inter alia
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includes the carrying out of any building in, over or under any land and it includes the
use of any building or land including for any redevelopment. Admittedly, the flats
constructed in the subject present case have been sold to individual Flat Purchasers.
MMRDA is not a party to the sale agreements. It is nobody's case that MMRDA has
any right to the individual flats. It was the submission of MMRDA, that there is a
concept of duality of ownership of the flats/buildings and the underlying land.
Therefore, while the land may be owned by one person, the ownership of the flat may
well lie with another person, as in the present case.
18.5 Admittedly, MMRDA does not claim to own the flats. MMRDA's claim
is restricted to the land and the FSI arising in respect thereof. Thus, a distinction
ought to be drawn between the 'development' i.e. the flats constructed on the subject
land, and the 'land' itself. Schedule II ex facie on a literal and bare reading, excludes
the applicability of MOFA only to the 'land' itself which vests in MMRDA. However,
it is nobody's case that the subject building vests in MMRDA. Even if it were to be so,
admittedly the flats constructed therein do not vest in MMRDA. Thus, the
applicability of MOFA is not excluded under Section 31 read with Schedule II so far as
it relates to the development i.e. the flats constructed on the subject land.
18.6 It stands to reason, both from a literal reading of Schedule II, as also a
logical, harmonious and balanced assessment of the purpose of the two legislations i.e.
MOFA and MMRDA Act, that the provisions of MOFA were never intended to be
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excluded insofar as they apply to the individual flats / flat purchasers. The reason for
saying so is as under :
(i) MMRDA has no rights in the individual flats, and the flats do not
vest in or belong to MMRDA. On a plain reading of Schedule II, the flats themselves
were never meant to be excluded from the operation of MOFA, merely because they
happen to have been constructed on land leased from MMRDA;
(ii) The legislature was conscious of separate terms of 'land' under
Section 2(d) and 'development' under Section 2(c) of the MMRDA Act.
Notwithstanding the separate defined terms, the legislature consciously chose not to
include 'development' in the exclusion provided in Schedule II. MOFA was only
intended to be excluded so far as it applied to lands or buildings owned by or vesting in
MMRDA, and not to flats which are admittedly owned by the flat purchasers and have
nothing to do with MMRDA.
(iii) To contend, as MMRDA did that the term 'land' is so wide as to
even include development on the land, would be doing violence to the statutory
provision.
(iv) Strictly without prejudice to the fact that on a bare and literal
reading of the above statutory provisions, the exclusion of MOFA in Schedule II does
not apply to flats on MMRDA owned / leased lands, but only to the 'land' / 'FSI'
itself, it is relevant to consider the purpose of the exclusion in Section 31. The object
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of the MMRDA Act is to regulate planning and orderly development in the
metropolitan region. The object is to protect and regulate the rights of MMRDA and
to ensure that MMRDA is in no manner threatened in exploiting its assets. These
assets include the lands owned by MMRDA and any benefits such as FSI arising
therefrom. The object of the MMRDA Act was never to affect flats or flat purchasers
with which MMRDA has no connection or interest.
(v) The object of the MMRDA Act is not to allow a developer to
default or renege on his obligations to a flat purchaser which has nothing to do with
MMRDA whatsoever. There is no conceivable reason as to why those provisions of
MOFA which do not relate to MMRDA and which in no manner affect or prejudice
MMRDA and which only relate to the rights in the flat / development, and not in the
land itself, should not apply. This is to say that the exclusion of MOFA is only qua
MMRDA lands and not qua flats constructed thereon with which MMRDA has no
connection or interest.
18.7 There are various provisions of MOFA which would have not the
slightest impact on the land or the rights of MMRDA therein and are purely governing
inter se relations between the flat purchasers and the builders which can be applied.
For instance :
(i) Section 4 of MOFA requires the builder / promoter to enter into a
written agreement for sale and register the same with the Flat Purchaser. There is no
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warrant, either from a reading of the statute, or even logically as to why Section 4
should not be enforced by a flat purchaser against an errant builder, merely because
the flat is constructed on MMRDA owned / leased land. MMRDA is in no manner
concerned with this.
(ii) Section 4, second proviso contains certain statutory provisions
entitling a registering officer to cause a summons to be issued to a person to appear
before the registration office to admit execution of the document. This statutory
benefit available to a party only exists by virtue of its conferment under MOFA and
there is no reason why either the flat purchaser or the builder should be denuded of
this statutory benefit merely because the flat is on MMRDA owned / leased land.
(iii) Section 5 of MOFA requires the promoter to maintain separate
accounts of any sums taken by him and provides that the Competent Authority under
the statute may demand in writing a disclosure of transactions done in respect of that
account. Yet again this beneficial provisions is only available due to applicability of
MOFA, and there is no conceivable reason why a builder should not be bound by this
project merely because the project is on MMRDA / leased lands.
(iv) Section 6 casts an obligation on the promoter to make payments
of outgoings until he transfers the property to the flat purchaser organisation. This
provision protects flat purchasers and in no manner affects MMRDA. There is no
warrant for contending, statutorily or logically, that this provisions of MOFA has been
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excluded merely because the flats are on MMRDA owned / leased land.
(v) Section 7 as stated above has been relied upon by the Appellants
to claim rights to FSI on the subject lands. This clearly relates to the 'land' owned by
or vesting in MMRDA and therefore must correctly be treated as being excluded by
Schedule II of the MMRDA Act.
(vi) The other provisions of MOFA such as Section 8 which provide
for a refund by the builder for delayed construction, or the obligation under Section 10
for a promoter to take steps to form a co-operative housing society, have nothing to do
with any claim on the 'land' / 'FSI' of MMRDA, and therefore not covered by the
exclusion under Schedule II, MOFA ought to apply to enable flat purchasers to
exercise their rights to refund or for formation of a society.
(vii) Most pertinently, under Sections 12 and 13 of MOFA, there are
certain penal provisions for non-compliance by the flat purchasers or the promoters.
Such penal provisions act as statutory checks and balances to ensure compliance with
the provisions of MOFA. These beneficent provisions are available under MOFA to
inter alia ensure that flat purchasers are not kept out of their homes and on the street
while errant builders take advantage of them.
18.8 In the present case, Section 31 read with Schedule II seeks to exclude the
beneficent legislation of MOFA and therefore must be strictly construed as applying
the exclusion only to the extent specifically and narrowly set out in Schedule II. That is
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to say the exclusion should be restricted to what is stated therein i.e. land or building
owned by or vesting in MMRDA and ought not to be made applicable to flats with
which MMRDA has no right or interest. If this interpretation is adopted, it will sub-
serve the interest of MMRDA without depriving flat purchasers of statutory rights
under MOFA, which have nothing to do with MMRDA's land, buildings or rights
therein.
18.9 The aforesaid interpretation given above attempts to strike just such a
balance between the various competing interests of MMRDA and the flat purchasers,
while having regard to the object and subject of the two legislations i.e. MOFA and the
MMRDA Act.
18.10 The Amicus Curiae has relied upon the following judgments in support
of his submissions and on the following propositions :
(i) Nahalchand Laloochand Private Limited v. Panchali Co-
operative Housing Society Limited24 - A flat is a self-contained unit, which is
structurally divided and separately owned within a larger building. The flats in
question are separately owned by the flat purchasers and MMRDA has no connection
therewith.
(ii) State of Madhya Pradesh v. Narmada Bachao Andolan & Anr.25 -
Statutory provisions must be read in a manner so as to do justice to all the parties. The
24 (2010) 9 SCC 536 (Paragraphs 34 to 36)
25 (2011) 7 SCC 639 (Paragraphs 78 to 85)
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court must find that the legislature must intend and must consider the practical
aspects of the matter to make the law meaningful. The court must have regard to the
subject matter of the statute as also the object thereof and the policy underlying the
same. The underlying idea is balanced and to give a construction which is agreeable to
reason and justice to all the parties concerned, avoiding injustice, irrationality,
mischievous consequences, unnecessary hardship, serious inconvenience or anomaly.
(iii) M. Nizamudeen v. Chemplast Sanmar Limited & Ors. 26 - If an
exception has been added it should be construed in a manner that it remedies the
mischief. Construction should be given which is in harmony with the purpose of the
statute.
(iv) Sheikh Gulfan & Ors. v. Sanat Kumar Ganguli 27 - When
interpreting a statute it is often necessary to have regard to the subject matter of the
statute and the object which it is intended to achieve, and not merely place exclusive
reliance on the bare dictionary meaning of the words. It was further held that a
provision of a statute which creates an exception or an exclusion (akin to Section 31
read with Schedule II in the present case) must be strictly construed especially if it
creates an exception to the applicability of a beneficent legislation.
19. Shri Sharan Jagtiani, Learned Senior Advocate representing MMRDA
(Respondent No. 8) in Rejoinder to the Arguments advanced by the Amicus Curiae,
26 (2010) 4 SCC 240 (Paragraph 38)
27 AIR 1965 SC 1835 (Paragraphs 9, 10, 18, 23 and 28)
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made the following submissions :
19.1 The application of MOFA to lands or buildings (or flats constructed in
buildings) belonging to or vesting in MMRDA, even in the limited manner suggested
by the Amicus Curiae, will do considerable violence to the plain meaning of the
language used in Section 31 of the MMRDA Act. A plain reading of Section 31 read
with Schedule II to the MMRDA Act shows that the exclusion of MOFA as against
MMRDA or to any land or building belonging to or vesting in MMRDA is absolute.
Therefore, if the land or building in question belongs to or vests in MMRDA, the
application of MOFA stands excluded.
19.2 Clause II of Schedule II to the MMRDA Act reads "The said Act
[MOFA] shall not apply..." without any reservation or qualification. This is in contrast
with the Bombay Government Premises (Eviction) Act, 1955, the provisions of which
are modified in their application to MMRDA as mentioned in Schedule II to the
MMRDA Act. To read down Section 31 and Schedule II to the MMRDA Act to mean
that only 'some' provisions of MOFA shall not apply to MMRDA or to lands or
buildings belonging to or vesting in MMRDA whereas other provisions of MOFA
would apply, does violence to the plain meaning of Section 31 read with Clause II of
Schedule II of the MMRDA Act.
19.3 If the intention of the legislature was to make certain provisions of
MOFA applicable to land or buildings belonging to or vesting in MMRDA or to flats
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constructed in such buildings, the legislature could easily have modified the provisions
of MOFA in its application to MMRDA lands as is done for the Bombay Government
Premises (Eviction) Act, 1955. That the legislature has not done so is an important
indicator of the legislative intent of making the exclusion of MOFA absolute.
19.4 MOFA is not the sole repository of flat purchasers' rights. These rights
exist in various forms under different legislations, such as the Transfer of Property
Act, 1882, the Contract Act, 1872, the Consumer Protection Act, 1986 (now
Consumer Protection Act, 2019), Specific Relief Act, 1963 to name a few. There is
evidently no vacuum in the law as other common law and statutory remedies available
to flat purchasers remain available.
19.5 The Amicus Curiae's submission that the exclusion of MOFA is only
with respect to lands or buildings belonging to or vesting in MMRDA and that MOFA
will continue to apply to 'development' (as defined in MMRDA Act) OR 'flats' (as
defined in MOFA) owned by flat purchasers is untenable. The definition of
'development' draws colour from Section 12 of the MMRDA Act.
19.6 The definition of 'development' in Section 2(c) of the Act covers various
activities including the carrying out of building or making of any material change in
the land or building or in the use of any building or land. It is therefore an activity in
relation to a land or building.
19.7 The submission of the Amicus that MOFA is excluded against lands or
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buildings belonging to or vesting in MOFA but nevertheless applies to 'development'
carried out or undertaken on such lands or buildings is contrary to the definition of
'development' and also the definition of 'land' which includes 'benefits to arise out of
land and things attached to the earth or permanently fastened to anything attached to the
earth'. Thus the building also may be included as a part of land itself. The exclusion in
Section 31 of the MMRDA Act would therefore exclude development on the land and
the building standing on the land where such land is owned by MMRDA.
19.8 The Amicus Curiae does not explain how the applicability of Sections 4,
8 and 10 even as between the flat purchasers and the developers is not an application
of MOFA to land or building belonging to or vesting in MMRDA, an application
which is expressly prohibited by the MMRDA Act. This submission also contradicts
the submission that exclusion of MOFA does not apply to 'development' or 'flats'. If
the Amicus Curiae is correct in his submission that MOFA continues to apply to
'development' and 'flats', there is no explanation offered as to why such application is
nevertheless truncated and only Sections 4, 8 and 10 of MOFA should apply.
19.9 The effect of the Amicus' submissions is that selective provisions of
MOFA will continue to operate on MMRDA lands, a circumstance expressly excluded
by statute. Even otherwise, this exercise would necessarily require identifying why
other provisions would not apply and the rationale for such non-application.
19.10 The Appellants and Amicus Curiae have argued that the non-
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applicability of MOFA will lead to yet another absurdity namely the inability to
register a society of purchasers as required under Section 10 of MOFA. Section 10(1)
of MOFA is essentially an obligation on the promoter to submit an application to the
registrar for registration of the persons who take the flats as a cooperative society or as
a company. The proviso to Section 10(1) provides for a remedy for a situation where it
does apply by empowering the competent authority to direct the office of the registrar
to register a society. Section 10(2) of MOFA contemplates a condominium under the
Maharashtra Apartment Ownership Act as an alternative to a society under Section
10(1) of MOFA. The provisions of Section 10 of MOFA do not govern the formation
of a society or an association of persons generally but are directed towards the
promoter of a project under MOFA taking on this obligation.
19.11 The application for registration of Society has to be made to the
Registrar of Societies under Section 8 and Section 9 of the MCS Act read with Rule
10(5) of the Maharashtra Co-operative Housing Societies Rules, 1961. The flat
purchasers are at liberty to make such application for formation of Society.
19.12 There is nothing in the MCS Act or the MMRDA Act which precludes
the formation of a society from amongst purchasers / allottees of flats even if there is
no sub-lease or direct interest in the land existing in favor of the proposed society.
19.13 This equity based and 'no prejudice' based application of MOFA would
then extend to all cases of projects being developed on MMRDA land. The danger in
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this interpretation is that it is difficult to foresee how in different fact situations this
understanding will be applied. That is precisely why, and to avoid this uncertainty, the
provisions of the MMRDA Act are excluded altogether.
19.14 As held by the Supreme Court in various judgments, the effect of
repealing or restricting the application of a statute is to obliterate it completely from
the records of the legislature as if it had never been passed; and it must be considered
as a law that never existed except for the purpose of those actions which were
commenced, prosecuted and concluded whilst it was an existing law. MOFA, insofar
as it concerns land or building belonging to or vesting in MMRDA, stands completely
excluded.
19.15 In so far as the Amicus Curiae's argument that this submission has
found favour with the Learned Single Judge, MMRDA submits that it is not aggrieved
by the final and operative Order of the Learned Single Judge in dismissing the interim
applications filed by the Appellants. Hence, no appeal was filed by MMRDA.
However, since this Appeal Court is considering all aspects of the matter even beyond
the FSI related issues canvassed by the Appellant, it is open to MMRDA to contend
that the observations of Learned Single Judge in Paragraphs 38-39 of the Impugned
Order are incorrect as a matter of law while at the same time supporting the final order
of dismissal of the interim application filed by the Plaintiffs / Appellants.
19.16 Shri Jagtiani has relied upon the following judgments in support of his
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aforesaid submissions and the following propositions :
(i) Raghunath Rai Bareja v Punjab National Bank & Ors. 28 - When
there is a conflict between the law and equity, it is the law that has to prevail.
(ii) D C Bhatia & Ors. v Union of India & Anr. 29 - It is for the
Legislature to decide which particular section of people require protection at any given
point of time.
(iii) Martin Burn Ltd. v Corporation of Calcutta 30 - A result flowing
from a statutory provision is never an evil. A court has no power to ignore that
provision to relieve what it considers a distress resulting from its operation. A statute
must of course be given effect to whether a court likes the result or not. When the
High Court found that Section 131(2)(b) had been attracted to the case, it had no
power to set that provision at nought.
(iv) Basawaraj & Anr. v Special Land Acquisition Officer 31 - Law of
limitation may harshly affect a particular party but it has to be applied with all its
rigour when the statute so prescribes. The court has no power to extend the period of
limitation on equitable grounds. The statutory provision may cause hardship or
inconvenience to a particular party but the court has no choice but to enforce it giving
full effect to the same. The legal maxim 'dura lex sed lex' which means 'the law is hard
28 2007 2 SCC 230
29 1995 1 SCC 104
30 1966 1 SCR 543
31 2013 14 SCC 81
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but it is the law', stands attracted in such a situation. It has consistently been held that,
"inconvenience is not" a decisive factor to be considered while interpreting a statute.
20. Shri Rohaan Cama, in Sur-Rejoinder has made the following
submissions:
20.1 It is sought to be contended by the Developer and MMRDA that the
Amicus was asking this Court to minutely analyse which provisions of MOFA would
apply and which would not. This is not at all correct. The above provisions of MOFA
have been analysed only illustratively to demonstrate that there are various provisions
of MOFA (i) which have no co-relation to MMRDA 'land' as defined and are thus not
excluded from a bare / literal reading of Section 31 read with Schedule II, (ii) which
ought to and must be treated as enforceable by flat purchasers against Developer,
failing which a large body of flat purchasers on MMRDA owned /leased lands would
be left at the mercy of errant builders; and (iii) for which there is absolutely no
statutory or logical reason for excluding the applicability of MOFA, as the said
provisions have absolutely nothing to do with MMRDA but only govern inter se
relations between the flat purchasers and the Developers.
20.2 This Court may, should it so choose, simply declare that the provisions
of MOFA so far as they relate to 'land' of MMRDA as defined under Section 2(d) will
not apply, but the provisions of MOFA will continue to apply to all other aspects of a
development project which do not affect the 'land' / FSI of MMRDA. This
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declaration alone would suffice and it would thereafter be open to subsequent courts, if
and when an occasion arose, on the facts of each case, to analyse whether a particular
provision of MOFA affected 'land' of MMRDA or not. This Court is not being called
upon to carry out any such exercise in the present case.
20.3 Merely because a society may be registered under the Maharashtra Co-
operative Societies Act, 1960, is no answer for excluding section 10 of MOFA. Section
10 carries with it the attendant benefit of penal consequences under Section 13 if the
promoter fails to comply. Merely because the society may otherwise be registered is no
reason to exclude MOFA.
20.4 It is not the submission that a literal reading of Schedule II excludes
MOFA entirely. On the contrary, it is the stand of the Amicus that upon a bare reading
of Schedule II, it only excludes the applicability of MOFA to MMRDA 'land' and does
not exclude the applicability of MOFA to the flats constructed on the 'land' and the
inter se obligations between the flat purchasers and the builders. This stand is based on
only a literal reading of Schedule II.
20.5 The judgments relied upon by him (the Amicus Curiae), referred to
above, do not suggest that a purposive interpretation be taken as much as they clarify
that a statute must be read in the context of the object and purport of the legislation
and what mischief was sought to be remedied. It is in that context that the Supreme
Court has repeatedly stated while interpreting or reading a statutory provision, that a
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balanced approach must be adopted, which will sub-serve the object of the legislation
in question. The Supreme Court has further held that when two legislations are been
looked at every attempt must be made to strike a balance between the object of both
the legislations. The stand taken by him ( the Amicus Curiae) referred to above seeks
to balance the interest of MMRDA so that it is not fettered in its exploitation of its
land / FSI, while simultaneously avoiding Flat Purchasers being deprived of statutory
benefits of MOFA, which in no manner, shape or form relate to MMRDA land or
affect MMRDA in any manner whatsoever. This is in consonance with the object of
MOFA to avoid exploitation of Flat Purchasers as held by the Supreme Court in
Nahalchand (supra).
20.6 Furthermore, there are various provisions of MOFA, some of which are
referred to above (such as Section 4 vesting power in the registering officer, Section 5
requiring the promoter to maintain accounts, Section 13 relating to penal provisions
etc.), which can only apply by virtue of their statutory conferment. Such provisions
which vest powers in statutory authorities and provide for penalties could never form
the subject matter of a contract between the Flat Purchasers and the builder. Thus,
absent MOFA, these beneficial provisions would not and could not be available to a
flat purchaser. There are also various statutory provisions in MOFA such as penalty
which cannot and do not find place in the lease deed. These statutory benefits would
not be available to the Flat Purchasers and therefore the Lease Deed cannot be said to
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be sufficient protection as would justify excluding the applicability of MOFA.
20.7 Even otherwise, the flat purchasers are not parties to the lease deed and
they would in no manner be able to or entitle to enforce the same. Thus, there would
be no ability on the part of the Flat Purchasers to approach a court and enforce the
terms of the lease Deed as they would ex facie lack any privity of contract to do so.
ISSUE NO.2 - Would the enforcement of Section 7 of MOFA, as sought
to be invoked by the Appellants in the present case affect the rights of MMRDA?
21. Shri Karl Tamboly, Learned Advocate representing the Appellants has
made the following submissions :
21.1 Clauses 6.5.2 and 7.2.6 of the Planning Proposal provides that the lands
acquired by MMRDA have to be leased in favour of the original owners for 60 years
for undertaking development against payment of prescribed lease premium. The
original land owner/lessee would be free to sell the constructed buildings in the open
market. This makes it ex facie clear that it is only the original land owner/lessee who is
permitted to exploit the FSI of the land as permitted by MMRDA who is also the
planning authority. Why such original land owner/lessee should be excluded from the
applicability of MOFA is the question before this Court and one for which no credible
answer is given by MMRDA.
21.2 It is also clear that there is nothing in the ODC as to why the relationship
between the lessee / Developer of such leased land and the flat purchasers should not
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be regulated by the provisions of MOFA and the said application of MOFA is in no way
prejudicial to the rights and interest of MMRDA, as all that MMRDA is entitled to is
to receive the premium as provided in Para-6.5.3 of the said ODC Scheme.
21.3 The Transfer of Property Act, 1882 is not mentioned under Schedule II
of Section 31 of the MMRD Act, 1974 so as to exclude its applicability to the land
leased by MMRDA in favour of its lessees which in the facts of this case qua the suit
property is Mr. Bhupendra Nanji Rathod under the said Lease Deed. By virtue of the
provisions contained in Transfer of Property Act, the Lessee is entitled to transfer his
lease hold rights in the underlaying land by way of mortgage, sub-lease, assignment
etc, to any third party. The same is in fact provided under clause 3(p) of the said Lease
Deed.
21.4 A reading of Sections 105, 107 and 108 of TOPA Act makes it clear that a
lessee of the land can sub lease its rights therein. The argument by the Respondents
that MMRDA land cannot be conveyed in terms of section 11 of MOFA is belied by
the provisions of the TOPA read with the said Lease Deed. Applying the test of
MOFA to the present case, all that it would require is for the Developer as the
Constituted Attorney of the lessee to either assign or sublease (with MMRDA
permission against payment of premium as contemplated by Clause 3(p) of the lease
deed) the lessees rights in the suit land in favour of the society / association of flat
purchasers in the project for the unexpired period of the lease. The rights of MMRDA
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as the owner of the land would remain intact.
21.5 Clause 2(p) of the said Lease Deed in respect of the Suit Plot, permits the
Lessee to assign his right and interest in the said Suit Plot, subject to the terms and
conditions stated therein.
21.6 In Clause 14 of the Agreement for Sale of flats executed by the
Developer with the Appellants, it is promised that after completion of their residential
building, the Developer will transfer the lease hold rights to co-operative society
formed for the building.
21.7 In one particular case which the Appellants have been able to find out,
MMRDA has consented for formation of a society of flat purchasers on land which is
owned by it, even before the buildings could be constructed in the case of Fountain
Square Residents and Welfare Association, Mumbai, Sonata Realty against
Developer Sonata Realty Pvt Ltd. and against another developer Shri Subh Builders
Pvt Ltd. In this case the MMRDA had transferred the lease hold rights in the land
bearing Survey No.41/1A, and CTS No.1 C/3A part situated at Village-Oshiwara,
Mumbai, under a registered Lease Deeds dated 01 st April, 2008, 25th June, 2009 and
22nd March, 2010 in favour of the Developer M/s Sonata Realty Pvt. Ltd. For non-
construction of the said building, around 480 flat purchasers had filed Suit No.2294 of
2010, Suit no.753 of 2016, Suit no.189 of 2017 in this Court wherein MMRDA is also a
party and all these suits are specifically filed under the provisions of MOFA for
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enforcement of the rights in the land and building. MMRDA after fully knowing that
these suits are filed under the provisions of MOFA, has issued NOC for formation of
the society as contemplated under the provisions of MOFA, and the said NOC letter
dated 15-07202020 is produced on record.
22. Shri J P Sen, Learned Advocate representing the Developer has made
the following submissions :
22.1 Section 7 of MOFA has the effect, inter alia, that an owner will not be
entitled, in the absence of consent from the flat purchasers, to carry out any further
construction on the land owned by him. If the Appellants were entitled to enforce
their purported rights under Section 7, it would enable them to prevent any further
construction on the Suit Plot. This would clearly prejudice the right of MMRDA as
the owner to carry out such construction, by themselves or through their Agent,
namely, the Developer. This is particularly so since they benefit both in terms of
premium and constructed area in the on-going construction which the Appellants seek
to injunct.
22.2 On the other hand, if the argument is that Section 7 would prevent only
this Developer from constructing on the Suit Plot while MMRDA would be free to
carry out the construction through some other Developer, it would amount to a
reductio ad absurdum. There is no conceivable reason why MMRDA who is admittedly
free from the constraints of MOFA and entitled to consume any remaining FSI on the
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suit land ought not to be entitled to do so through any Agency of its choice including
the Developer herein. As such, the proposition that the injunction sought by the
Appellants against Developer would not prejudice MMRDA appears to be clearly
insupportable.
23. Shri Sharan Jagtiani, Learned Advocate representing MMRDA has
made the following submissions :
23.1 The protection under Section 7 of FSI for the benefit of a Society is
premised on the legislative intent for the society to eventually obtain a conveyance of
the land. The sequitur is that if a society is not entitled to a conveyance of the land, it
cannot claim any right to exploitation of FSI, which is a benefit attached to rights held
in the land by virtue of a conveyance.
23.2 In the present case, the provisions of the MMRDA Act, do not entitle
the Appellants to a conveyance of the land and therefore Section 7 of MOFA is wholly
inapplicable.
23.3 On the contrary, Clause 15 of the Agreement for Sale recognizes that the
flat purchasers will not have any right in the FSI available with respect to the Suit Plot
as at the end of the leased period the leasehold rights revert back to MMRDA unless
further extended. Therefore, as per the scheme of the MMRDA Act, MMRDA
retains ownership of the Suit Plot and all benefits arising from the Suit Plot, including
FSI.
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23.4 The Appellants or association of flat purchasers are not, as a matter of
law, entitled to any FSI arising out of the Suit Plot as they are not entitled to a
conveyance/assignment of leasehold rights in the Suit Plot. To make MOFA
applicable in this scenario would do considerable violence to the legislative provisions
contained in the MMRDA Act and the provisions of the said Lease Deed which are
known to the Appellants.
23.5 Any restraint or fetter on MMRDA on how MMRDA may permit the
utilization of FSI based on MOFA is effectively a fetter on MMRDA's rights as a
planning authority and landowner.
23.6 If Section 7 and Section 7A or other provisions are made applicable to
lands or buildings belonging to or vesting in MMRDA (albeit not against MMRDA
directly), the same would affect the various rights of MMRDA and also impede the
ability of the MMRDA to exercise the various powers granted to it under the
MMRDA Act which includes the right to permit the exploitation of its FSI in the
manner it deems fit. If Section 7 is made applicable, MMRDA would be required to
obtain consent of the flat purchasers before granting such permissions, which is not
what has been contemplated under the MMRDA Act. The powers of the MMRDA
are absolute and cannot be subjected to the mercy of the flat purchasers.
23.7 To hold otherwise would run contrary to the established principle of
dual ownership and will otherwise do considerable violence to the plain meaning of
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Section 31 the MMRDA Act. Further, granting an injunction to the Appellants on the
strength of Clause 28 of the Agreement for Sale (which makes MOFA applicable to
Respondent No.1's obligations) would also defeat and render otiose the provisions of
the Lease Deed dated 15 July 2008.
23.8 MMRDA, as a special planning authority, has the power and prerogative
to determine the manner in which the ODC is to be developed. It is for this reason that
the MMRDA Act contains provisions such as Section 14 of the MMRDA Act. To hold
that MOFA is applicable to lands or buildings belonging to or vesting in the MMRDA
will affect and restrict the powers of MMRDA to determine the manner in which
notified areas within its jurisdiction are developed. Further, every change required by
MMRDA in layouts and plans (which it is otherwise free to direct as per Section 14 of
the MMRDA Act and as per the provisions of the lease deed) would then become
subject to purchaser consents, which will undoubtedly impede MMRDA's mandate to
expeditiously and effectively regulate the development of lands within its jurisdiction.
23.9 Any apprehension that protections available under MOFA will no longer
be available to flat purchasers is also not a valid concern. There is no prohibition in the
MMRDA Act which restricts the purchasers to contractually determine the timelines
for delivery of flats, the consequences of default, and other commercial terms which
concerns are raised by the Appellants. The Lease deed in fact empowers the MMRDA
to terminate the lease if the owner fails to construct the building within the prescribed
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timelines.
24. Shri Rohaan Cama, Learned Amicus Curiae has made the following
submissions :
24.1 Section 7 of MOFA upon which the Appellants place reliance to claim
rights to the FSI on the subject MMRDA owned/leased land, is excluded from
applying in the present case by virtue of the statutory provisions of Section 31 read
with Schedule II. Under the MMRDA Act, the definition of 'land' includes benefits to
arise out of the land, which ex facie includes the FSI potential of the land. It is
nobody's case that MMRDA is not the owner of the land. If that be so, then ipso facto
MMRDA is the owner of the benefits arising out of the subject land i.e. the FSI. Thus,
the FSI in the present case arising on MMRDA owned / leased land, vests in
MMRDA. It follows on a plain and literal reading of Schedule II and the definition of
'land', that MOFA will not apply to FSI arising out of the subject land owned / leased
by MMRDA.
24.2 These averments and prayers in the Suit, clearly show that the
Appellants are purportedly exercising rights under Section 7 of MOFA and are seeking
to lay claim to FSI arising out of land owned and leased by MMRDA. This is clearly ex
facie in the teeth of the exclusion of MOFA to 'land', i.e. FSI, belonging to/vesting in
MMRDA, and ought not to be permitted as the same would prejudice MMRDA.
ISSUE NO.3 - If the applicability of MOFA has been excluded by
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the MMRDA Act in respect of a project, can the Developer and flat purchasers
contract to incorporate the provisions of MOFA and would those provisions of
MOFA bind the parties inter se?
25. Shri Karl Tamboly, Learned Advocate representing the Appellants has
made the following submissions :
25.1 A bare perusal of Clause 28 clearly indicates, that, the Developer has
agreed to be bound by obligations under the provisions of MOFA and the rules framed
thereunder. Having agreed to the said stipulation it is not open to the Developer to
renege from the said obligation which is both contractual and statutory in nature.
25.2 Unlike the MOFA which specifically has a provision (Section 16) which
provides that the Act will prevail over any contract, the MMRDA Act has no such
provision. Hence, Clause 28 of the flat purchase agreement where the Developer has
agreed that the agreement as regards the Developer's obligations shall be subject to
the provisions of MOFA, is not void and/or invalidated by any provision of MMRDA
Act and the same would continue to bind the Developer and would represent a binding
contract between the flat purchaser and the developer.
25.3 Clause 14.1 of Agreement for sale states that after completion of the
Tower, Developer will transfer the lease hold rights to co-operative society formed for
the building.
25.4 Assuming without admitting, that, MOFA does not apply to land vested
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in MMRDA, the Developer had an option to not subject himself to obligations under
MOFA; despite that, he has voluntarily chosen to be bound by MOFA obligations.
Therefore, the Developer has elected to be bound by MOFA and the rules framed
thereunder. Having so elected, the Developer cannot approbate/reprobate qua the
same contract, especially after having obtained benefits thereunder.
25.5 The Developer has dealt with the Appellants contention of Clause 28 in
a bare cryptic manner in Paragraph 16 of the Affidavit in Reply to Notice of Motion by
stating that the flat purchaser agreements are "specimen Agreements for Sale". This
contention is misconceived since there are several features in the agreement for sale
which are not part of a standard flat purchaser agreement, and this belies the
developer's said contention.
25.6 The Developer despite agreeing to be bound by MOFA obligations in the
flat purchase agreements is seeking to renege from the same. The Developer is thus
approbating/reprobating qua the same document. The Developer cannot blow hot and
cold at the same time. The Developer having agreed to be bound by MOFA obligations
is estopped from contending otherwise.
25.7 Shri Tamboly relies upon the following judgments in support of his
submissions and on the following propositions :
(i) Nutan Kumar V/s. Additional District Judge 32 - Unless a statute
32 (2002) 8 SCC 31
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specifically provides that a contract is contrary to the provisions of the statute and is
void, the contract would remain binding between the parties.
(ii) C. Beepathumma V/s. Velasari33 - A party who accepts a benefit
under a deed must adopt the whole contents of that instrument and conform to all its
provisions.
(iii) Nagubai Ammal V/s. B. Shama Rao34 and Ambu Nair V/s. Kelu
Nair35 - A party cannot approbate and reprobate and that no party can accept and
reject the same instrument.
(iv) New Bihari Leaves V/s. State of Bihar 36 - It is a fundamental
principle of general application that if a party accepts a contract on certain terms such
party cannot be allowed to accept the terms which are advantageous and at the same
time repudiate other terms which are disadvantageous.
(v) Shyam Telelink V/s. Union of India37 - A party taking advantage
under an instrument which grants a benefit and imposes an obligation cannot take the
former without complying with the latter.
26. Shri J P Sen, Learned Advocate representing the Developer has made
the following submissions :
26.1 The reliance placed by the Appellants on Clause 28 of the Agreements
33 AIR 1965 SC 241
34 AIR 1956 SC 593
35 (1981) 1 SCC 537
36 (1981) 1 SCC 537
37 (2010) 10 SC 165
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for Sale, in respect of flats in Wing A is misconceived. The said clause, which is part of
the standard format agreement executed by the Developer, does refer to the
obligations of the Developer being subject to the provisions of MOFA and the rules
made there under.
26.2 In any event, neither the Appellants nor the Developer are entitled in law
to contract out of Section 31 read with Schedule II of MMRDA Act which is enacted
for the benefit of the development authority nor are they entitled to make the
provisions of MOFA applicable to the Suit Plot when the provisions of that Act have
been expressly excluded by the MMRDA Act. MMRDA has certainly not consented
to the applicability of the provisions of MOFA to the plot in question. Indeed, it could
not have done so.
27. Shri Sharan Jagtiani, Learned Senior Advocate representing MMRDA
(Respondent No. 8) has made the following submissions :
27.1 Applicability of MOFA inter se between the Developer and flat
purchasers would undermine the statute i.e. the MMRDA Act.
27.2 Once the applicability of MOFA has been excluded by a statute, the
parties cannot incorporate the same by a private agreement.
27.3 Under the Agreements for Sale, the Appellants were always aware that
the terms of the Agreement for Sale were subject to the said Lease Deed and therefore
to the MMRDA Act. Having entered into the said Agreements for Sale with the said
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knowledge, the flat purchasers cannot now seek to enforce the provisions of MOFA
inter se to which MMRDA is not a party and the application of which will affect
MMRDA. If this Court allows such enforcement it would defeat the terms of the said
Lease Deed and in turn the provisions and the MMRDA Act.
FINDINGS AND CONCLUSIONS :
28. ISSUE NO. 1: Whether Section 31 read with Schedule II, Clause II
of the MMRDA Act excludes the applicability of MOFA as a whole?; or, Whether
Section 31 read with Schedule II, Clause II of the MMRDA Act excludes applicability
of MOFA only to the extent that it affects the rights of MMRDA but that MOFA
applies as between the Developer and the flat purchasers inter se in respect of a
building constructed on MMRDA leased lands?
28.1 MMRDA Act was enacted much after MOFA was already in force.
Therefore, the legislature would deemed to have been conscious of the provisions of
MOFA.
28.2 The determination of the aforesaid issue revolves around the
interpretation of Section 31 read with Schedule II, Clause II of MMRDA Act.
However, before we consider the interpretation of the aforesaid provisions, it is
necessary to consider the circumstances in which the MMRDA Act was enacted, its
object and certain relevant provisions thereof.
28.3 The Statement of Objects and Reasons of the MMRDA Act states
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that on 2nd June 1973, the Bombay Metropolitan Regional Plan prepared by the
Bombay Metropolitan Regional Board (constituted by the State Government under the
Maharashtra Regional and Town Planning Act, 1966) was approved by the State
Government and the said Plan came into force on 16th August 1973. The Regional
Planning Board was not the authority for implementing the proposals in the approved
regional plan and the same were to be implemented by several different executing
agencies such as the Bombay Municipal Corporation, Bombay Electric Supply and
Transport Undertaking, The City and Industrial Development Corporation, the
Buildings and Communications Department, the Central and Western Railways, the
Bombay Port Trust and the Department of Civil Aviation.
28.4 In view thereof, certain areas were being progressively developed
and populated and the necessity was increasingly felt for setting up an authority for the
purpose of planning, coordinating and supervising the proper, orderly and rapid
development of these areas, in which several local authorities were separately dealing
with such matters within their own jurisdictions.
28.5 It was with the aforesaid object in mind that the MMRDA Act was
enacted.
28.6 As per the Preamble of the MMRDA Act, it is an act for forming
Brihan Mumbai and certain areas round-about into a Mumbai Metropolitan Region, to
provide for the establishment of an authority for the purpose of planning, coordinating
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and supervising the proper, orderly and rapid development of the areas in that region
and of executing plans, projects and schemes for such development and to provide for
matters connected therewith.
28.7 After commencement of the MMRDA Act, the State Government
by notification published in the Official Gazette, established the Authority i.e.
MMRDA under Section 3 of the MMRDA Act inter alia to secure the development of
the Mumbai Metropolitan Region according to the regional plan and for carrying out
the other purposes of the MMRDA Act. In addition to the aforesaid, the Authority is
also deemed to be a 'local authority' within the meaning of the term 'local authority'
as defined in the Maharashtra General Clauses Act.
28.8 MMRDA is a body corporate, having perpetual succession and a
common seal, with power, subject to the provisions of this Act, to acquire, hold and
dispose of property, both movable and immovable, and to contract. For disposal of
land (which include benefits to arise out of land and things attached to the earth, or
permanently fastened to anything attached to the earth) held by MMRDA, MMRDA
is required to follow the procedure prescribed under the Mumbai Metropolitan Region
Development Authority (Disposal of Land) Regulations, 1977 ("Disposal of Land
Regulations"). As per Regulation 3 of the Disposal of Land Regulations, "the
Authority may dispose of any land by lease to be granted in consideration of premium or rent
or both for a term not exceeding 80 years and in accordance with these Regulations".
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MMRDA is also a Special Planning Authority under Section 40 of the MRTP Act.
28.9 The mandate of the MMRDA under the MMRDA Act is manifold:
(i) it is a Planning Authority for the areas under its jurisdiction and, in that capacity, it
regulates and supervises development; (ii) it also acts to execute by itself, projects and
schemes, for orderly and rapid development of the areas within its jurisdiction; (iii) it
is the owner of lands and in that capacity has the power to lease the land with the
objective of development being carried out on such lands. This, in turn may be in
consideration for rent or premium and undoubtedly, the monetization of land by way
of rents and premium generates revenue for implementing the mandate and objective
of the MMRDA Act by MMRDA; and (iv) it grants loans and also finances projects
under its jurisdiction. As held by a Division Bench of this Court in Bank of Baroda,
Mumbai & Anr. v MMRDA & Ors.38, MMRDA acts in a dual capacity - one as a
landlord or lessor and another as a local authority. We respectively agree with this
view.
28.10 Before considering the specific language of Section 31 read with
Schedule II, Clause II, we shall now consider some of the relevant provisions of the
MMRDA Act.
(i) Chapter I (Sections 1 and 2) deal with the short title,
commencement and important definitions under the MMRDA Act.
38 2010 (3) Mh.L.J. 823
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Section 2(c) - Development
""development" with its grammatical variations, means the carrying out of
building, engineering, mining or other operations in, or over, or under any
land (including land under sea, creek, river, lake or any other water) or the
making of any material change in any building or land, or in the use of any
building or land and includes re-development and lay-out and sub-
divisions of any land and also the provisions of amenities and projects and
schemes for development of agriculture, horticulture, floriculture, forestry,
dairy development, poultry farming, piggery, cattle breeding, fisheries and
other similar activities; and "to develop" shall be construed accordingly";
(Emphasis Supplied)
(a) Section 2(d) - Land
""Land" includes benefits to arise out of land, and things attached
to the earth, or permanently fastened to anything attached to the
earth." (Emphasis Supplied)
(ii) Chapter II (Sections 3 to 10A) provides for the
Establishment and Composition of the Authority i.e. MMRDA.
(a) Section 3(2) - MMRDA is a body corporate, having
perpetual succession and a common seal, with power, subject to
the provisions of this Act, to acquire, hold and dispose of property,
both movable and immovable, and to contract. MMRDA can
dispose of land by granting lease in consideration of premium or
rent.
(b) Section 3(3) - MMRDA is deemed to be a local
authority.
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(iii) Chapter IV (Sections 12 to 17) set out the powers and
functions of MMRDA.
(a) Section 12(1) - Sets out the Functions of MMRDA
some of which are as under :
(i) formulate and sanction schemes for the development of the
Metropolitan Region or any part thereof;
(ii) execute projects and schemes [* * * *]
(iii) co-ordinate execution of the projects or schemes for the
development of the Metropolitan Region;
(iv) supervise or otherwise ensure adequate supervision over the
planning and execution of any project or scheme, the
expenses of which, in whole or in part, are to be met from
the [Mumbai Metropolitan Region Development Fund];
(v) do all such other acts and things as may be necessary for, or
incidental or conducive to, any matters which arise on account of
its activity and which are necessary for, furtherance of the
objects for which MMRDA is established.
(b) Section 12(2) - Provides that, notwithstanding anything contained in the
MRTP Act or any other law for the time being in force, MMRDA has
powers to revise the Regional Plan for the MMR or any part thereof
prepared under the MRTP Act.
(c) Section 12(3) - Provides that for the purpose of integrated development
of the MMR, MMRDA has power to undertake modification or revision
of the Development Plans.
(d) Section 13(1) - Provides that, notwithstanding anything contained in any
law for the time being in force, except with the previous permission of
MMRDA, no authority or person shall be permitted to undertake any
development within the Metropolitan Region which is likely to adversely
affect the overall development of the Metropolitan Region.
(e) Section 13(3) - Sets out the procedure to be followed while granting or
refusing such application seeking permission for development by
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MMRDA.
(f ) Section 13(4) - Grants a right to any authority or person to challenge the
decision of the Authority by filing an Appeal against such decision before
the State Government within 30 days.
(g) Section 13(5) - Empowers MMRDA to demolish development which has
been done in contravention of the conditions imposed in the permission
granted under Section 13(3) or the decision given by the State
Government under Section 13(4), and also to recover cost of demolition
from the authority or person concerned.
(h) Section 14(1) - Empowers MMRDA, notwithstanding anything
contained in any other law for the time being in force, to give directions
to any local authority or any authority or person inter alia with regard to
the implementation of any development project or scheme financed
under section 12 and such authority or person shall be bound to comply
with such directions.
(i) Section 16(1) - Provides that where MMRDA is satisfied that any
direction given by it under section 14(1) with regard to development
project or scheme has not been carried out by MMRDA referred to
therein, within the time specified in the direction or that any such
authority is unable to fully implement any project or scheme undertaken
by it for the development of any part of the Region, MMRDA may, with
the sanction of the State Government, itself undertake any works.
(j) Section 17(1) - Empowers MMRDA, notwithstanding anything
contained in the Act or the Mumbai Municipal Corporation Act or any
other law for the time being in force, to prepare any project or scheme
with a view to provide infrastructure (which includes "streets, roads,
bridges and other means of transport and communications, and activities
related or incidental for the execution of such infrastructure project or
scheme..."), in consultation with the Municipal Commissioner of Brihan
Mumbai Municipal Corporation.
(iv) Chapter V (Sections 18 to 24A) deal with Finance, Budget and Section 21A -
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Allows MMRDA to finance projects and schemes and impose conditions therefor.
(v) Chapter VI (Sections 25 to 30) deal with the power of MMRDA to levy taxes
and charges.
(a) Section 25 - Empowers MMRDA to levy a cess on buildings on its
lands.
(b) Section 26 - Empowers MMRDA to levy betterment charges.
(vi) Chapter VII - Section 31 - Provides that the enactments mentioned
under Schedule II shall apply, with or without modifications, or shall not apply to
MMRDA or shall be amended to the extent and in the manner mentioned in the
Schedule.
(vii) Chapter VIII (Sections 32 to 43) - deals with the State Government's power to
acquire land for MMRDA.
(a) Section 32(1) - Provides that where on the representation of
MMRDA it appears that to enable MMRDA to discharge any of its functions or to
exercise any of its powers or to carry out any of its projects or schemes or development
programmes, it is necessary that any land in any part of the Metropolitan Region should
be acquired, the State Government may acquire such land by publishing in the Official
Gazette, a notification to that effect that the State Government has decided to acquire
such land.
(b) Section 33(3) - Provides that after taking possession of the land, the
State Government is required to make available the said land to MMRDA for discharging
its functions and powers under the MMRDA Act.
(viii) Chapter IX (Sections 44 to 52) deal with Miscellaneous provisions.
(a) Section 51 - Provides that:
"The provisions of this Act shall have effect notwithstanding anything
inconsistent therewith contained in any law governing any local or other
authority, in the Metropolitan Regional Town Planning Act, 1966, or in any
other law for the time being in force."
(ix) Schedule II, Clause I - Provides that the Maharashtra Government Premises
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(Eviction) Act, 1956 shall apply to premises belonging to or taken on lease by
MMRDA subject to certain modifications as provided therein.
(x) Schedule II, Clause II - Provides that :
"II. The Maharashtra Ownership Flats (Regulation of the
promotion of construction, sale, management and transfer) Act, 1963
(Mah XLV of 1963).
The said Act shall not apply to the Metropolitan Authority or to any
land or building belonging to or vesting in that Authority."
(Emphasis Supplied)
(xi) Schedule II, Clause III - Provides that MMRDA shall be a Special Planning
Authority under Section 40 of the Maharashtra Regional and Town Planning Act 1966.
28.11 Amongst the sections referred to hereinabove, it is Sections 12 and
14(1), which describe the purpose and the role to be discharged by MMRDA in
execution and/or development and/or implementation of projects and schemes
undertaken by MMRDA and also explains the power of MMRDA to give directions
with regard to the implementation of any development project or scheme financed by
MMMRDA. It is not in dispute that the ODC in which the Suit Plot is located, is a
project which is being implemented by MMRDA.
29. We shall now consider the issue with respect to the interpretation of
Section 31 read with Schedule II, Clause II of the MMRDA Act in terms and keeping
in mind the object and purpose of the MMRDA Act.
29.1 Plain Meaning of Section 31 read with Schedule II, Clause II of the
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MMRDA Act :
"Section 31 read with Schedule II, Clause II of the MMRDA Act, reads as
follows:
"31 - The enactments mentioned in Schedule II shall apply, with or without
modifications, or shall not apply to the Metropolitan Authority, or shall be
amended, to the extent and in the manner mentioned in that Schedule."
" Schedule II [See Section 31]
[...]
II. The Maharashtra Ownership Flats (Regulation of the promotion of
construction, sale, management and transfer) Act, 1963 (Mah XLV of 1963).
The said Act shall not apply to the Metropolitan Authority or to any land
or building belonging to or vesting in that Authority."
29.2 From a plain reading of the aforesaid language contained in Section 31
read with Schedule II, Clause II of the MMRDA Act, it is evident that the exclusion of
MOFA by MMRDA Act applies in two ways :
(i) MOFA does not apply to MMRDA;
(ii) MOFA does not apply to any land or building belonging to or
vesting in MMRDA.
29.3 From the aforesaid plain meaning it is clear that the width of the
exclusion of MOFA to MMRDA Act is wide and not restrictive.
29.4 The non-applicability of MOFA is relatable to two distinct events,
namely (i) that it will not apply against MMRDA as a statutory authority meaning that
rights or obligations under MOFA will not be enforceable as against MMRDA; (ii) it
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will also not apply to lands or buildings owned by or vesting in MMRDA. The
exclusion, therefore, is disjunctive because of the word "or". The choice of "or" in
the exclusion or ouster provision is clearly intended to widen the scope of the
exclusion and not to restrict it only to MMRDA.
29.5 The width of the exclusion under the aforesaid provisions is also
apparent from the use of word "land" because land itself has a wide meaning. Section
2(d) of the MMRDA Act defines "land" to "includes benefits to arise out of land, and
things attached to the earth, or permanently fastened to anything attached to the earth". It is
now well settled that "benefits to arise out of land" also include FSI39. A structure
permanently fastened to the earth is also 'land'. Therefore, the word "land" in the
aforesaid provision will have to be understood as per its wider statutory definition and
applicability of MOFA is excluded not only as to land as also the benefits arising out of
land, belonging to or vesting in MMRDA namely, in this case, even FSI.
29.6 Yet another indication as to the width of the exclusion is in the choice of
expressions "...or to any land or building belonging to or vesting in the Authority". It
may be useful to refer to the meaning explained to the terms 'vest', 'belong to' or
'belonging' as defined in Black's Law Dictionary relied upon by MMRDA :
"vest" as "to give an immediate, fixed right of present or future
enjoyment"
39 Chedda Housing Development Corporation v Bibijan Shaikh Farid & Ors. - 2007(3) Mh.L.J 402 - Para 15
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"belong" as "to appertain to; to be the property of. Property
"belonging" to a person has two general meanings (1) ownership; ...
(2) less than ownership, i.e. less than an unqualified and absolute
title, such as the absolute right of user."
"belonging" as "that which is connected with a principal or
greater thing; an appendage, an appurtenance; also ownership."
29.7 From the aforesaid definitions, it is evident that the words "belonging to"
is of wider significance and less technical in its meaning. The significance in the choice
of words is that the word "vesting" has a defined legal connotation but to ensure that
the ouster of MOFA is not defeated by only using the expression "vesting in the
Authority" the provision also says "belonging to... the Authority". The conscious
exclusion of MOFA not only against MMRDA but also to the land or building
belonging to or vesting in MMRDA makes it abundantly clear that the intention of the
legislature was to exclude MOFA completely. To read the definition in the manner
suggested by Shri Tamboly for the Appellants would be to ignore the meaning and
import of all the words and phrases used in Clause 2 of Schedule II that excludes the
applicability of MOFA.
29.8 From the aforesaid analysis, we are of the view that from a plain meaning
of the language contained in Section 31 read with Schedule II, Clause II, application of
MOFA to MMRDA Act has been excluded as a whole i.e. not only against MMRDA
but also against any land or building belonging to or vesting in MMRDA. Further, as
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land includes FSI, provisions of MOFA cannot be applied while dealing with any
dispute in respect of FSI arising out of the land, which belongs to or vests in the
MMRDA.
30. According to Shri Tamboly, Learned Advocate appearing for the
Appellants, we must apply the purposive rule of interpretation and not the literal rule
of interpretation as the literal rule, if applied, would lead to an absurdity.
30.1 Whereas, according to Shri. Sen and Shri. Jagtiani, Learned Senior
Advocates appearing for the Developer and MMRDA, respectively, the Court must
apply the literal rule of interpretation as the plain meaning of the aforesaid provision is
clear and unambiguous and there is absolutely no reason to depart from it.
30.2 We have carefully considered the submissions advanced by all the parties
on the rules of interpretation that must be applied while construing the true meaning
of the aforesaid provisions. Whilst the respective parties including the Learned
Amicus have cited a large number of judgments, many of them for the same or similar
propositions, we do not propose to examine each of them. Suffice it to say that there is
not much dispute in the propositions of law laid down in many of those judgments but
it is really their applicability to answering the questions before the Court that is
relevant. We have therefore proceeded to consider those judgments that we thought
were of more significance.
30.3 The Supreme Court in Ragunath Rai Bareja (supra) has held that the
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first and foremost principle of interpretation of a statute in every system of
interpretation is the literal rule of interpretation. The other rules of interpretation e.g.
the mischief rule, purposive interpretation etc. can only be resorted to when the plain
words of a statute are ambiguous or lead to no intelligible results or if read literally
would nullify the very object of the statute. Some of the relevant findings of the Court
are reproduced hereunder :
"38. Learned Counsel for the respondent Bank then submitted that a
purposive interpretation should be put on Section 31 of the RDB Act so
that the bank can recover its dues. He relied on the decisions of this Court
in Hindustan Lever Ltd. v. Ashok Vishnu Kate and Ors., Administrator,
Municipal Corporation, Bilaspur v. Dattatraya Dahankar (vide SCC para
4), Directorate of Enforcement v. Deepak Mahajan (vide SCC para 31),
etc. We are afraid we cannot accept this contention. In fact, in Allahabad
Bank v. Canara Bank, the argument that a purposive interpretation should
be put on the provisions of the RDB Act has been specifically rejected
(vide para 34).
...
39. In Hiralal Ratanlal v. STO, this Court observed :
"In construing a statutory provision the first and foremost rule of
construction is the literary construction. All that the Court has to see at the very
outset is what does the provision say. If the provision is unambiguous and if from
the provision the legislative intent is clear, the Court need not call into aid the
other rules of construction of statutes. The other rules of construction are called
into aid only when the legislative intent is not clear."
40. It may be mentioned in this connection that the first and
foremost principle of interpretation of a statute in every system of
interpretation is the literal rule of interpretation. The other rules of
interpretation e.g. the mischief rule, purposive interpretation etc. can
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only be resorted to when the plain words of a statute are ambiguous or
lead to no intelligible results or if read literally would nullify the very
object of the statute. Where the words of a statute are absolutely clear
and unambiguous, recourse cannot be had to the principles of
interpretation other than the literal rule, vide Swedish Match AB v.
Securities and Exchange Board, India. As held in Prakash Nath Khanna v.
C.I.T., the language employed in a statute is the determinative factor of
the legislative intent. The legislature is presumed to have made no
mistake. The presumption is that it intended to say what it has
said.Assuming there is a defect or an omission in the words used by the
legislature, the Court cannot correct or make up the deficiency, especially
when a literal reading thereof produces an intelligible result, vide Delhi
Financial Corporation v. Rajiv Anand. Where the legislative intent is clear
from the language, the Court should give effect to it, vide Government of
Andhra Pradesh v. Road Rollers Owners Welfare Association, and the
Court should not seek to amend the law in the grab of interpretation."
(Emphasis supplied)
30.4 The Supreme Court in Alka Chandewar v Shamshul Ishrar Khan40
while interpreting the words "any other default" under Section 27(5) of the Arbitration
and Conciliation Act 1996 applied the literal rule of interpretation and held that the
section was not confined to a person being guilty of contempt only when failing to
attend in accordance with any process and would apply to "any" contempt of the
Arbitral Tribunal during the conduct of arbitral proceedings. The Court held as
under :
"6. If Section 27(5) is read literally, there is no difficulty in accepting
the plea of learned Senior Advocate for the appellant, because persons
40 2017 16 SCC 119 - Para 6
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failing to attend in accordance with the court process fall under a separate
category from "any other default". Further, the section is not confined to a
person being guilty of contempt only when failing to attend in accordance
with such process. The section specifically states that persons guilty of
any contempt to the Arbitral Tribunal during the conduct of the Arbitral
proceedings is within its ken. The aforesaid language is, in fact, in
consonance with the Chapter heading of Chapter V, "Conduct of arbitral
proceedings". Further, it is well settled that a marginal note can be used as
an internal aid to interpretation of statutes only in order to show what is
the general drift of the section. It may also be resorted to when the plain
meaning of the section is not clear. In the present case we must go by the
plain meaning of sub-section (5). This being the case, we find it difficult to
appreciate the reasoning of the High Court. Also, in consonance with the
modern rule of interpretation of statutes, the entire object of providing that
a party may approach the Arbitral Tribunal instead of the Court for
interim reliefs would be stultified if interim orders passed by such Tribunal
are toothless. It is to give teeth to such orders that an express provision is
made in Section 27(5) of the Act."
30.5 The Delhi High Court in Mathews J Nedumpara (supra) while
interpreting the meaning of the word "court" under Rule 6 of the Bar Council of India
Rules, 1975 has explained the plain meaning rule as under :
"4. Chapter - II (Standards of Professional Conduct and Etiquette) has been
formulated in the Bar Council of India Rules, 1975 and Rule 6 thereof along
with its explanation reads as under :
"6. An Advocate shall not enter appearance, act, plead or practise in any way
before a Court, Tribunal or Authority mentioned in Section 30 of the Act, if
the sole or any member thereof is related to the Advocate as father,
grandfather, son, grand -son, uncle, brother, nephew, first cousin, husband,
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wife, mother, daughter, sister, aunt, niece, father-in-law, mother-in-law, son-
in-law, brother-in-law, daughter-in-law or sister-in-law.
For the purposes of this rule, Court shall mean a Court, Bench or
Tribunal in which above mentioned relation of the Advocate is a Judge,
Member or the Presiding Officer."
5. The explanation and the meaning of the word "Court" clearly
stipulate that it does not mean the entire Court but only refers to a
particular Court where relative of a lawyer is a Presiding Judge.
6. According to the petitioner, this explanation indicates the absolute
concept of nemo debet esse judex in propria causa and therefore the
declaration should be given to bring within the ambit of the word "Court" the
entire Court where the relative of a lawyer is a Judge.
7. In our considered view, the law does not permit us to do so. The Rule
has been formulated by the legislative authorities and we cannot interpret
the Rule based on the concept canvassed before us in the manner as
submitted by the learned petitioner present before us. It is a cardinal
principle of interpretation of statute that the law is to be interpreted in a
manner as laid down in the statute book in furtherance to the legislative
intent and not to interpret or give it a meaning which runs contrary to the
legislative intent. If the provisions of Rule 6 and the explanation
contained thereto as appearing in the statutory rules are taken note of, it
clearly explains the ambit and import of the word "Court" used therein
and if the contention of the petitioner is to be accepted, we would be re-
writing the statute in a manner which would run contrary to the
legislative intent and this, in our considered view, is not permissible in
law. That being the legal position, we see no reason to make any
indulgence into the matter.
8. Justice G.P. Singh in Principles of Statutory Interpretation 14 Edition
revised by Justice A.K. Patnaik in the Chapter "Intention of the
Legislature" has clearly laid down the principle by saying that a statute is
an edict of the legislature and the conventional way of interpreting or
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construing a statute is to seek the intention of its maker. The author
propounds that a statute is to be construed according to the intent of
those who make it and the duty in judicial review is to act upon the true
intention of the legislature. The author further clarifies that if meanings
of a word used or the provisions are plain, effect must be given to it
irrespective of their consequence. It is stressed by the learned author that
when the words of a statute are clear, plain or unambiguous and can have
only one meaning, the Courts are bound to give effect to that meaning
irrespective of the consequence. It is emphasized by the author that if the
words of a statute are clear, precise and unambiguous, then the natural
meaning in the ordinary sense have to be given to the meaning and the
provisions of the statute.
9. These principles have been reiterated in a judgment rendered by the
Hon'ble Supreme Court in the case of Raghunath Rai Bareja v. Punjab
National Bank, (2007) 2SCC 230 and for the sake of convenience we
reproduce hereinunder the principles in detail laid down by the Hon'ble
Supreme Court :
"40. It may be mentioned in this connection that the first and the
foremost principle of interpretation of a statute in every system of interpretation is
the literal rule of interpretation. The other rules of interpretation e.g. the mischief
rule, purposive interpretation, etc. can only be resorted to when the plain words of a
statute are ambiguous or lead to no intelligible results or if read literally would
nullify the very object of the statute. Where the words of a statute are absolutely
clear and unambiguous, recourse cannot be had to the principles of interpretation
other than the literal rule, vide Swedish Match AB v. Securities and Exchange
Board of India (2004) 11 SCC 641]. As held in Prakash Nath Khanna v. CIT
(2004) 9 SCC 686 the language employed in a statute is the determinative factor of
the legislative intent. The legislature is presumed to have made no mistake. The
presumption is that it intended to say what it has said. Assuming there is a
defect or an omission in the words used by the legislature, the court cannot
correct or make up the deficiency, especially when a literal reading thereof
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produces an intelligible result, vide Delhi Financial Corpn. v. Rajiv Anand
(2004) 11 SCC 625. Where the legislative intent is clear from the language,
the court should give effect to it, vide Govt. of A.P. v. Road Rollers Owners
Welfare Assn. (2004) 6 SCC 210 and the court should not seek to amend the law in
the garb of interpretation.
41. As stated by Justice Frankfurter of the US Supreme Court (see
"Of Law & Men: Papers and Addresses of Felix Frankfurter"):
"Even within their area of choice the courts are not at large. They are
confined by the nature and scope of the judicial function in its particular exercise in
the field of interpretation. They are under the constraints imposed by the
judicial function in our democratic society. As a matter of verbal recognition
certainly, no one will gainsay that the function in construing a statute is to
ascertain the meaning of words used by the legislature. To go beyond it is to
usurp a power which our democracy has lodged in its elected legislature. The
great judges have constantly admonished their brethren of the need for
discipline in observing the limitations. A judge must not rewrite a statute,
neither to enlarge nor to contract it. Whatever temptations the statesmanship
of policy-making might wisely suggest, construction must eschew
interpolation and evisceration. He must not read in by way of creation. He
must not read out except to avoid patent nonsense or internal contradiction."
...
45. As observed by this Court in CIT v. Keshab Chandra Mandal AIR 1950 SC
265 :
"Hardship or inconvenience cannot alter the meaning of the language
employed by the legislature if such meaning is clear on the face of the
statute...."
46. The rules of interpretation other than the literal rule would come into play only
if there is any doubt with regard to the express language used or if the plain meaning
would lead to an absurdity. Where the words are unequivocal, there is no scope for
importing any rule of interpretation vide Pandian Chemicals Ltd. v. CIT (2003) 5
SCC 590.
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10. Once meaning of the word "Court" used in the rule has been
explained by the rule maker in a particular manner, its explanation in a
manner to give it a totally different meaning would be inconsistent to and
contrary to the principles of law and the principles governing
interpretation of statutes."
(Emphasis supplied)
30.6 The Supreme Court in B. Premanand (supra) held that when the plain
meaning of words of a statute are clear and unambiguous it is not necessary to depart
from the foremost principle of interpretation i.e., the literal rule of interpretation and
there is no scope for importing any rule of interpretation :
"9. It may be mentioned in this connection that the first and
foremost principle of interpretation of a statute in every system of
interpretation is the literal rule of interpretation. The other rules of
interpretation eg. The mischief rule, purposive interpretation, etc. can
only be resorted to when the plain words of a statue are ambiguous or
lead to no intelligible results or if read literally would nullify the very
object of the statute. Where the words of a statute are absolutely clear
and unambiguous, recourse cannot be had to the principle of
interpretation other than the literal rule, vide Swedish Match AB v.
SEBI [(2004) 11 SCC 641: AIR 2004 SC 4219].
16. Where the words are unequivocal, there is no scope for
importing any rule of interpretation (vide Pandian Chemicals Ltd. v. CIT
[(2003) 5 SCC 590]). It is only where the provisions of a statute are
ambiguous that the court can depart from a literal or strict construction
(vide Nasiruddin v. Sita Ram Agarwal [(2003) 2 SCC 577: AIR 2003 SC
1543]). Where the words of a statute are plain and unambiguous effect
must be given to them (vide Bhaiji v. SDO [(2003) 1 SCC 692]).
17. No doubt in some exceptional cases departure can be made from
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the literal rule of the interpretation, eg. by adopting a purposive
construction, Heydon [Heydon case, (1584) 3 Co Rep 7a: 76 ER 637]
mischief rule, etc. but that should only be done in very exceptional cases.
Ordinarily, it is not proper for the court to depart from the literal rule
as that would really be amending the law in the garb of interpretation,
which is not permissible... It is for the legislature to amend the law and
not the court (vide State of Jharkhand v. Govind Singh [(2005) 10 SCC 43:
2005 SCC (Cri) 1570: JT (2004) 10 SC 349]).
18. In Jinia Keotin v. Kumar Sitaram Manjhi [(2003) 1 SCC 730] (SCC
p. 733, para 5) this Court observed [Ed.: As observed in Raghunath Rai
Bareja v. Punjab National Bank, (2007) 2 SCC 230, p. 245, para 48.]:
"48. ... The court cannot legislate under the garb of
interpretation."
Hence, there should be judicial restraint in this connection, and
the temptation to do judicial legislation should be eschewed by the
Courts. In fact, judicial legislation is an oxymoron.
19. In Shiv Shakti Coop. Housing Society v. Swaraj Developers
[(2003) 6 SCC 659: AIR 2003 SC 2434] this Court observed: (SCC p. 669,
para 19)
"19. It is a well-settled principle in law that the court cannot read
anything into a statutory provision which is plain and unambiguous. A
statute is an edict of the legislature. The language employed in a statute is
the determinative factor of legislative intent."
...
22. The function of the court is only to expound the law and not
to legislate (vide District Mining Officer v. TISCO [(2001) 7 SCC 358]). If
we accept the interpretation canvassed by the learned counsel for the
private respondents, we will really be legislating because in the guise of
interpretation we will be really amending Rule 27(c) of the Rules.
24. The literal rule of interpretation really means that there
should be no interpretation. In other words, we should read the statute
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as it is, without distorting or twisting its language. We may mention
here that the literal rule of interpretation is not only followed by
Judges and lawyers, but it is also followed by the layman in his
ordinary life. To give an illustration, if a person says "this is a pencil",
then he means that it is a pencil; and it is not that when he says that the
object is a pencil, he means that it is a horse, donkey or an elephant. In
other words, the literal rule of interpretation simply means that we
mean what we say and we say what we mean. If we do not follow the
literal rule of interpretation, social life will become impossible, and we
will not understand each other. If we say that a certain object is a book,
then we mean it is a book. If we say it is a book, but we mean it is a
horse, table or an elephant, then we will not be able to communicate
with each other. Life will become impossible. Hence, the meaning of
the literal rule of interpretation is simply that we mean what we say
and we say what we mean." (Emphasis Supplied)
30.7 This Court in Bharat Bhogilal Patel (supra) applying the literal rule of
interpretation held that "...if the words used are capable of one construction only then
it would not be open to the courts to adopt any other hypothetical construction on the
ground that such construction is more inconsistent with the alleged object and policy
of the subject Act."
30.8 All of these judgments and many others reiterate the principle that when
the words in a statute are clear, then effect must be given to them on the basis of their
plain meaning. This meaning is the best and safest indication of the intention of the
legislature. The other rules of interpretation such as the mischief rule, purposive
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interpretation upon which the Appellants in particular have relied upon are usually
resorted to when the plain words of a statute are ambiguous or lead to no intelligible
results or if read literally would nullify the very object of the statute. The resulting
interpretation of Section 31 read with Clause 2 of Schedule II on the basis of the plain
meaning of the words used would be the same even if we ascertained the meaning of
the words used by looking to the relevant context and not just by looking to the text of
the provisions that we have interpreted.
30.9 As noted above, we are of the considered view that from the plain
meaning of Section 31 read with Schedule II, Clause II it is clear that the legislature
intended to exclude the applicability of MOFA, as a whole.
Purposive interpretation of Section 31 read with Schedule II, Clause of
MMRDA Act would yield the same result as literal interpretation:
31. Since extensive arguments have been made by all the parties we shall
consider the applicability of the said rule of purposive interpretation.
31.1 The rule of purposive interpretation states that when the material words
are capable of two interpretations, the courts must adopt that interpretation which
"shall suppress the mischief and advance the remedy". This rule which is also known as
the mischief rule was first laid down in Heydon's case41.
41 76 ER 637
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31.2 As stated in New India Assurance Co. Ltd. v Nusli Neville Wadia42, "...
to interpret a statute in a reasonable manner the court must place itself in the chair of a
reasonable legislator/author. So done the rules of purposive construction have to be resorted to
which would require the construction of the Act in such a manner as to see that the object of
the Act is fulfilled."
31.3 As noted above, the object of the MMRDA Act is inter alia to establish
an authority which would provide for planning, coordinating and supervising the
proper, orderly and rapid development of the areas in that region and of executing
plans, projects and schemes for such development. The object of the MMRDA, so set
up, is to secure the development of the Metropolitan Region. MMRDA in furtherance
of this object supervises projects and even takes part in its execution. It acquires, holds
and disposes (by lease) land (which includes benefits arising out of land) for the
purposes of carrying out the development.
31.4 In order to achieve the aforesaid objective, the legislature has
consciously excluded various acts other than MOFA or provided for the manner in
which they will be applied. This has been done with a view to ensure that the
provisions of the MMRDA Act are implemented effectively and without the
impediments that may otherwise occur if the activity of MMRDA or on MMRDA
lands and buildings is governed by different legislations. It is relevant to mention here
42 2008 3 SCC 279
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that there are as many as 11 non-obstante clauses in the MMRDA Act.
31.5 Considering the aforesaid object, if MOFA is applied, it would create
impediments in the implementation of the scheme of the MMRDA Act. For example,
if Section 7 and 7A of MOFA are applied to MMRDA or to land or building belonging
to or vesting in MMRDA, the consent of the flat purchasers would be required before
utilizing additional FSI, which FSI does not even belong to them. If Section 7 is
applied, the consent of the flat purchasers would be required before amending plans,
etc. Such application would clearly restrict or affect MMRDA's right / power to
direct amendment of development plans, which power exclusively vests with
MMRDA under the MMRDA Act, as also under the said Lease deed. So also, if
Section 11 of MOFA is applied to MMRDA lands it may require the lessee who is
developing upon MMRDA lands to convey or assign its leasehold interest on the
entire plot thus compelling MMRDA to accept the society as being the lessee or sub-
lessee. This in turn is contrary to the right that MMDRA as a statutory authority and
land owner would have to ensure that there is no assignment of the lease or the sub-
lease except with its consent. MMRDA may have different reasons for not wanting a
society of flat purchasers as a lessee of the land such as to ensure that the lessee is an
entity that has the experience or financial means to develop any unexploited FSI on
payment of premiums, which would be revenue for MMRDA to further its activities;
to ensure that reservations are duly developed amongst others.
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31.6 These are just some examples that would explain why MOFA has not
been made applicable to MMRDA or to any land or building belonging to or vesting in
MMRDA. This is keeping in mind the objects sought to be achieved and the purpose
intended to be served by the Act and to advance the cause for which the enactment is
brought into force.
31.7 It is not open for the Court to scrutinise the provisions of MOFA and
analyse which of those provisions, when applied to a building constructed on
MMDRA land, would or would not affect or impact upon the activities carried out by
MMRDA. It may be that in some cases the provisions of MOFA if applied between a
developer and flat purchasers may not have any significant impact on the activities and
objects of the MMRDA Act. That, however, is a decision for the legislature to take and
for the courts to implement. Such types of decisions taken by the legislature are
essentially policy decisions that have expression in legislations. In the field of urban
planning and development these decisions are often arrived at by a process of trial and
error. It is as part of that process that the legislature has after having enacted MOFA
chosen to exclude its applicability only in a limited class of cases in relation to
statutory authorities like MHADA and MMRDA as explained above. We have
therefore chosen not to undertake that exercise of looking at specific provisions of
MOFA to see if they can be applied as between the developer and the flat purchasers
as in our view that would be contrary to the literal and purposive interpretation of
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Clause II of Schedule II read with Section 31 of the MMRDA Act.
31.8 Therefore, in our considered view even if the purposive rule of
interpretation is applied, it still leads to the same result that MOFA would not be
applicable to MMRDA or land or building belonging to or vesting in MMRDA and
thus has been excluded as a whole.
31.9 In any event, in our view any departure by us from the aforesaid
interpretation would end in re-writing the said provision, which exercise is not
permissible in law as the said power only lies with the legislature. Judgments of the
Supreme Court have time and again struck a note of caution that courts must not
legislate under the garb of interpretation. Courts must exercise judicial restraint in
interpretation of statutes and the temptation to undertake an exercise of judicial
legislation should be eschewed by the courts.
31.10 In State of U.P. v. Hindustan Aluminium Corpn. (supra) wherein the
Supreme Court held as under :
"66. It has to be appreciated that the power to legislate is both positive
in the sense of making a law, and negative in the sense of repealing a law or
making it inoperative. In either case, it is a power of the Legislature, and
should lie where it belongs. Any other view will be hazardous and may well be
said to be an encroachment on the legislative field. In an extreme and a clear
case, no doubt, an antiquated law may be said to have become obsolete- the
more so if it is a penal law and has become incapable of user buy a drastic
change in the circumstances. But the judge of the change should be the
Legislature, and courts are not expected to undertake that duty unless
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that becomes unavoidable and the circumstances are so apparent as to
lead to one and only one conclusion. This is equally so in regard to the
delegated or subordinate legislation."
31.11 We are also supported by the decision in Janhit Manch (supra) where
the Apex Court while considering a challenge to the Development Control
Regulations for Greater Bombay, 1991 has held that policies formulated and
legislations made cannot be interfered with, unless they fall foul of the Constitution of
India. The Court held as under :
"13. We have to keep in mind the principles of separation of
powers. The elected government of the day, which has the mandate of the
people, is to take care of policy matters. There is a democratic structure of
different levels, starting from the level of Village Panchayats, Nagar Palika,
Municipal Authorities, Legislative Assemblies and the elected Parliament
each of them has a role to perform. In aspects, as presented in the instant
case, a consultative process is always helpful and is one which has already
been undertaken. The philosophy of Appellant 2 cannot be transmitted as a
mandatory policy of the Government which is what would happen were a
mandamus to be issued on the prayers made. Perspective of individuals
may vary, but if the elected bodies which have policy formulation
powers, is to be superseded by the ideals of each individual, the situation
would be chaotic. The policies formulated and legislations made, unless
they fall foul of the Constitution of India cannot be interfered with, at the
behest of the Appellants. The Appellants have completely missed this
point."
31.12 Even in Shri Ram Saha (supra) while applying the rule of purposive
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construction, the Supreme Court has held that a word of caution is necessary that the
text of the statute is not to be sacrificed and the court cannot rewrite the statute. The
relevant findings of the Court are as under :
"19. It is well-settled principle of interpretation that a statute is to be
interpreted on its plain reading; in the absence of any doubt or difficulty
arising out of such reading of a statute defeating or frustrating the object and
purpose of an enactment, it must be read and understood by its plain reading.
However, in case of any difficulty or doubt arising in interpreting a provision
of an enactment, courts will interpret such a provision keeping in mind the
objects sought to be achieved and the purpose intended to be served by such
a provision so as to advance the cause for which the enactment is brought
into force. If two interpretations are possible, the one which promotes or
favors the object of the Act and purpose it serves, is to be preferred. At any
rate, in the guise of purposive interpretation, the courts cannot re-write a
statute. A purposive interpretation may permit a reading of the provision
consistent with the purpose and object of the Act but the courts cannot
legislate and enact the provision either creating or taking away substantial
rights by stretching or straining a piece of legislation."
(Emphasis supplied)
Literal Interpretation of Section 31 read with Schedule II, Clause II does not lead
to 'absurdity':
32. Shri. Tamboly, Learned Advocate appearing on behalf of the Appellants
has canvassed that the applicability of literal rule of interpretation of Section 31 read
with Schedule II, Clause II would lead to 'absurdity'. His submissions in this regard
have already been noted above.
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32.1 He has submitted that if the protective provisions contemplated in
MOFA qua a developer are excluded the same will lead to various absurdities like (i)
the purchasers will not be able to seek disclosure of the plans and specifications of the
building built or to be built or seek plans and specifications approved by the local
authority from the developer (ii) the purchasers will not be able to compel the
developer to enter into a registered agreement, even if the purchasers have advanced
more than 20 per cent of the sale price, (iii) the purchasers will not be able to compel
the formation of a Society, even once the minimum number of persons required to
form a co-operative society are available, etc. Thus, Shri Tamboly has submitted that if
the literal interpretation leads to an 'absurdity', the court must depart from it and a
construction may be put which modifies the meaning of the words. According to him
the Court must read the provision to read as to mean that MOFA is not applicable to
MMRDA but is applicable inter se between the Developer and the flat purchasers.
32.2 In response, Shri. Jagtiani appearing on behalf of MMRDA has
submitted that the argument of the Appellants that if literal rule of interpretation is
applied to Section 31 read with Schedule II, Clause II, it would lead to absurdity is a
complete misconception of what constitutes an 'absurdity'. According to Shri Jagtiani,
the argument of 'absurdity', allegedly brought about by Section 31 read with Schedule
II, could only be made by the Appellants if a plain meaning of those provisions was
inherently inconsistent with the provisions of the same act i.e. the MMRDA Act.
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However that is not even the submission of the Appellant.
32.3 Shri. Sen, appearing for the Developer and Shri. Jagtiani have also
submitted that the protections given to the flat purchasers under MOFA can still be
enforced by the flat purchasers by adopting the common law remedies and per se there
is no vacuum created by the complete exclusion of MOFA by MMRDA Act.
32.4 We are in agreement with Shri Jagtiani and Shri Sen. An 'absurdity'
resulting from a particular interpretation so as to lead to rejecting that interpretation
must occur within the provisions of an act itself. That argument would be available to
a party if the provisions of a statute are interpreted in a particular manner, literally or
otherwise, such that it creates an irreconcilable contradiction within the Act or defeats
the scheme and purpose of that Act itself.
32.5 In the present case, the plain meaning of Section 31 read with Schedule
II, Clause II does not create any irreconcilable contradiction within the MMRDA Act
or defeats the scheme and purpose of that Act itself. Infact, it seeks to further the
object of the MMRDA Act. There is no merit in the argument that an absurdity in the
interpretation of the MMRDA Act results by it negating the beneficial provisions of
MOFA when that is exactly the clear and stated intendment of the MMRDA Act so as
to ensure that the objects and purposes of the MMRDA Act are achieved.
32.6 As rightly pointed out by Shri. Sen and Shri. Jagtiani, MOFA is not the
sole repository of flat purchasers' rights. These rights exist in various forms under
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different legislations, such as the Transfer of Property Act, 1882, the Contract Act,
1872, the Consumer Protection Act, 1986 (now Consumer Protection Act, 2019),
Specific Relief Act, 1963 to name a few. Thus, even if the application of MOFA is
excluded, there would evidently not be a vacuum in the law and the flat purchasers
can exercise their other common law and statutory remedies available. Infact, before
the enactment of RERA some states in India had not even enacted a legislation akin to
MOFA, and flat purchaser rights in such states are governed by the aforesaid
legislations. If the flat purchasers are aggrieved that their contracts were negotiated
and concluded based on false or mistaken representations or that there was a need to
enforce those contract or claim damages for breach, the said statutes provide for clear
remedies in this regard.
32.7 In any event, no class of citizens (in this case flat purchasers) have a
vested right in the continued application of statutory protection if the legislature
deems it unfit to apply that statute in a given situation. This is not a vires challenge to
the exclusion of MOFA by the MMDRA Act and therefore the question before the
Court is not whether such flat purchasers are at a disadvantage as compared to others
to whom MOFA is available without there being any intelligible differentia.
32.8 The second submission of the Shri Tamboly on 'absurdity' is that an
irreconcilable and absurd situation is caused due to exclusion of MOFA, especially
after RERA Act. It has been submitted that if MOFA is excluded wholly by MMRDA
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Act, it will lead to an absurd situation where all similar protections available under
MOFA would be available to the flat purchasers of the Additional Building (which is
registered under RERA) but would not be available to the flat purchasers of the said
Building which is situated on the same Suit Plot.
32.9 We have given our careful consideration to the aforesaid submission
canvassed by the Appellants. Although the said submission appeared to be appealing
in equity, however, we are afraid that the same cannot be accepted in law especially
considering the fact that the Appellants have not challenged the vires of the MMRDA
Act in this regard, as noted above.
32.10 RERA is a central legislation whereas MOFA and MMRDA Act are state
legislations. The legislature has the plenary power and prerogative to legislate within
its legislative competence. Every legislation (particularly in economic matters) is
essentially empiric and based on experimentation or what one may call trial and error
method. It cannot provide for all possible situations or anticipate all possible effects of
how such legislation operates qua persons and / or property prior to the legislation
being introduced or amended. The legislature in some instances draws a line in the
sand to determine when and in what circumstances a legislation will have or cease to
have effect. That is precisely what has been done with RERA inasmuch as its
applicability is restricted to those real estate projects that have obtained a completion
certificate after a particular date. There is no dispute that the building in which the
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Appellants have their flats has obtained an Occupation Certificate in 2014 much before
the enactment of RERA.
32.11 Even if an anomalous situation arises where the plot required to be
conveyed under RERA is conveyed to the society of flat purchasers to the exclusion of
the Appellants, that in itself is not a ground for departing from the plain meaning of
the MMRDA Act which contains a blanket exclusion of MOFA as against land or
buildings belonging to or vesting in MMRDA. We do not see an anomaly in such a
situation especially as the Appellants have received what they had contracted for
under the legal provisions that govern their development.
32.12 It is not the Appellants case that in the facts of this matter, there have
been unauthorized amendments in plans or that the construction is carried out in
contravention of amended plans. It is also not their case that the developer refused to
execute a registered agreement for the flat purchased by them. Insofar as formation of
society is concerned, there is no prohibition in law for a society of flat purchasers to be
formed with respect to a building constructed on MMRDA owned land. However, the
formation of a society at the behest of the promoter under MOFA is not the correct
approach which has to be adopted for registration of a society. A proposed society
may, with the permission of MMRDA, form a society under the MCS Act. As pointed
out by MMRDA, this appears to have been done in respect of another society
(Fountain Square CHSL) such that the cooperative society is of flat purchasers of a
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building without making any claim to assignment of lease of the land by applying the
provisions of MOFA. However, the Appellants insistence that the owner /
Respondent No.1 is duty bound to form this society and convey its title to the society
of flat purchasers as per MOFA is misconceived and unsustainable given that MOFA
is not applicable to such lands.
32.13 In rejecting the Appellants submissions based on 'absurdity' or
anomalies, we are supported by our aforesaid view by the following judgments relied
upon by MMRDA.
32.14 The Supreme Court in Raghunath Rai Bareja (supra)43 has held that
when there is a conflict between the law and equity, it is the law that has to prevail.
The relevant finding is reproduced hereunder for ready reference :
"Learned counsel for the respondent Bank submitted that it will be very
unfair if the appellant who is a guarantor of the loan and Director of the
Company which took the loan, avoids paying the debt. While we fully agree
with the learned counsel that equity is wholly in favour of the
respondent Bank, since obviously a bank should be allowed to recover its
debts, we must, however, state that it is well settled that when there is
conflict between law and equity, it is the law which has to prevail, in
accordance with the Latin maxim "dura lex sed lex", which means "the
law is hard, but it is the law". Equity can only supplement the law, but it
cannot supplant or override it." (Emphasis Supplied)
43 2007 2 SCC 230
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32.15 The Supreme Court in D C Bhatia (supra)44 has held, in the context of
rent control legislation, that :
"28. In order to strike a balance between the interests of the landlords and
also the tenants and for giving a boost to house building activity, the
Legislature in its wisdom has decided to restrict the protection of the Rent
Act only to those premises for which rent is payable upto the sum of Rs.
3,500/- per month and has decided not to extend this statutory protection
to the premises constructed on or after the date of coming into operation
of the Amending Act for a period of ten years. This is a matter of
legislative policy. The Legislature could have repealed the Rent
Act altogether. It can also repeal it step by step. It has decided to confine
the statutory protection to the existing tenancies whose monthly rent did not
exceed Rs. 3,500/-.
29. In our view, it is for the Legislature to decide what should be the cut-
off point for the purpose of classification and the Legislature of necessity
must have a lot of latitude in this regard. It is well settled that the
safeguard provided by Article 14 of the Constitution can only be invoked,
if the classification is made on the grounds which are totally irrelevant to
the object of the statute. But, if there is some nexus between the objects
sought to be achieved and the classification, the Legislature is presumed
to have acted in proper exercise of its constitutional power. The
classification in practice may result in some hardship. But, a statutory
discrimination cannot be set aside, if there are facts on the basis of which
this statutory discrimination can be justified.
...
40. So far the ceiling limit of Rs. 3,500/- is concerned, it is well settled that a
provision initially valid can in the long run turn out to have become
discriminatory. An exemption with the passage of time may not have any
nexus with the objects sought to be achieved by the statute. But, as of now,
44 1995 1 SCC 104
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it cannot be said that the persons, who are paying more than Rs. 42,000/- per
year as rent, belong to the weaker section of the community. It is for the
Legislature to decide which particular section of people require
protection of any given point of time. This is a matter of legislative
policy/The argument that unless an escalating figure of ceiling limit of
rent is fixed the classification will become meaningless, pre-supposes that
there will be continuous high price rise in future. It also pre-supposes that
in such a situation the Legislature will not take any corrective step.
41. In the case of Motor General Traders v State of Andhra Pradesh, Section
32(b) of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control
Act, 1960 was held invalid by this Court, because it was per se discriminatory.
It was pointed out that there were some justification for exempting new
buildings which were 5, 7 or 10 years old when the Act came into force, in
order to provide incentive to builders to build buildings. But there could not
be any justification for continuing with this exemption indefinitely. A long
period had elapsed after passing of the Act and this was a crucial factor in
deciding the question whether the impugned law had become discriminatory
or not. This case was decided on October 26, 1983. It was pointed out that the
exemption had continued to remain in force for more than 25 years.
45. It was observed in that judgment that "the Legislature in its wisdom is
presumed to understand and appreciate correctly the problems of the
State and the needs of the people made manifest by experience....
legislative innovation by social and economic experimentation must be
permitted to continue without judicial interference." It was ultimately
held :
"The legislative object is, therefore, to protect tenants who are
economically weaker in comparison to those affluent tenants falling outside
the specified limit of income, and at the same time to encourage construction
of new buildings which will result in better availability of accommodation,
employment opportunity and economic prosperity. This is reasonable
classification which does not suffer from the vice of being too vague or broad.
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Classification based on income is well known to law. Such classification has a
reasonable relation to the twin legislative objects mentioned above. We see
nothing unreasonable or irrational or unworkable or vague or unfair or
unjust in the classification adopted by the impugned provision."
...
48. However, we need not go too deeply into this aspect of the
controversy, as in our opinion, it is for the Legislature to decide whether
or not any section of the people should be protected in any way by law.
For this purpose, the Legislature can identify the section of the people
who needs protection and decide how the classification will be done or
what will be the cut-off point for the purpose of making such
classification. The classification may be done on income basis or rental
basis or some other basis. The Court can only consider whether the
classification has been done on an understandable basis having regard to
the object of the statute. The Court will not question its validity on the
ground of lake of legislative wisdom.
49. Moreover, the classification cannot be done with mathematical
precision. The Legislature must have considerable latitude for making the
classification having regard to the surrounding circumstances and facts.
The Court cannot act as a super-legislature and decide whether cut-off point
for the classification on the basis of monthly rent should be Rs. 3,500/- or Rs.
4,000/- or Rs. 5,000/-. If the classification is totally irrational and has no
nexus with the object sought to be achieved by the statute, then only will
the Court strike down such classification.
...
51. The next point relates to interpretation of Section 3(c) of the Delhi Rent
Control Act. It was urged that the Delhi Rent Control (Amendment) Act came
into force on 1.12.1988. The effect of Section 3(c) which was introduced by
the Amendment Act was to remove those premises whose monthly rent
exceeded Rs. 3,500/- from the ambit of the Delhi Rent Control Act. This
amendment of the Rent Control Act would not apply to those tenancies which
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were created prior to 1.12.1988. It was argued that the Amendment Act has
not been specifically made retrospective. Therefore, it could not affect the
rights acquired by the tenants under the Rent Control Act before its
amendment in 1988. Under the existing law, the tenants had acquired valuable
property rights. The landlord could neither evict the tenant nor enhance the
rent at will. A suit could not be brought against a tenant on the ground of
expiry of the lease, whether a lease was for a fixed term, year to year or month
to month, on the ground of expiration of period of lease. Filing of such suit
was barred by virtue of Section 14 of the Rent Act. Some of the tenants who
could afford to build did not build houses of their own because of the
protection provided by the provisions of the Rent Act. Had these provisions
not been there, these tenants or lessees might have built houses of their own
or purchased properties elsewhere. These vested rights could not be
disturbed unless the Amendment Act contained specific provisions to that
effect.
52. We are unable to uphold this contention for a number of reasons. Prior to
the enactment of the Rent Control Act by the various State Legislatures, the
legal relationship between the landlord and tenant was governed by the
provisions of the Transfer of Property Act. Delhi Rent Control Act provided
protection to the tenants from drastic enhancement of rent by the landlord as
well as eviction, except on certain specific grounds. The Legislature by the
Amendment Act No. 57 of 1988 has partially repealed the Delhi Rent Control
Act. This is a case of express repeal. By Amending Act the Legislature has
withdrawn the protection hitherto enjoyed by the tenants who were paying Rs.
3,500/- or above as monthly rent. If the tenants were sought to be evicted
prior to the amendment of the Act, they could have taken advantage of the
provisions of the Act to resist such eviction by the landlord. But this was
nothing more than a right to take advantage of the enactment The tenant
enjoyed statutory protection as long as the statute remained in force and was
applicable to him. If the statute ceases to be operative, the tenant cannot
claim to continue to have the old statutory protection. It was observed by
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Tindal, C.J., in the case of Kay v. Goodwin (1830) 6 Bing. 576, 582 :
"The effect of repealing a statute is to obliterate it as completely from the
records of the Parliament as if it had never been passed; and it must be
considered as a law that never existed except for the purpose of those actions
which were commenced, prosecuted and concluded whilst it was an existing
law."
53. The provisions of a repealed statute cannot be relied upon after it has been
repealed. But, what has been acquired under the Repealed Act cannot be
disturbed. But, if any new or further step is needed to be taken under the Act,
that cannot be taken even after the Act is repealed.
(Emphasis Supplied)
31.16 In Martin Burn Ltd. (supra)45, the Supreme Court held that :
"14. We can now deal with the reasoning on which the High Court in the
present case justified its order of remand. It realised that by making the order
it was depriving the appellant of one of its chances to object to the valuation,
namely, the chance under Section 139, but it felt that by upholding that right
of the appellant it would be depriving the Corporation of its rates wholly as
the time-limit prescribed by Section 131(2)(b) had expired. It thought that it
was faced with two evils and that it would be choosing the lesser of the two if
it allowed the Corporation a chance to collect its rates. With great respect, we
find this line of reasoning altogether unsupportable. A result flowing from a
statutory provision is never an evil. A court has no power to ignore that
provision to relieve what it considers a distress resulting from its
operation. A statute must of course be given effect to whether a court
likes the result or not. When the High Court found that Section 131(2)(b)
had been attracted to the case, it had no power to set that provision at
nought."
(Emphasis Supplied)
45 1966 1 SCR 543
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32.17 The Supreme Court in Basawaraj (supra)46 held that :
"12. It is a settled legal proposition that law of limitation may harshly
affect a particular party but it has to be applied with all its rigour when the
statute so prescribes. The Court has no power to extend the period of
limitation on equitable grounds. "A result flowing from a statutory
provision is never an evil. A Court has no power to ignore that provision to
relieve what it considers a distress resulting from its operation." The
statutory provision may cause hardship or inconvenience to a particular
party but the Court has no choice but to enforce it giving full effect to the
same. The legal maxim "dura lex sed lex" which means "the law is hard
but it is the law", stands attracted in such a situation. It has consistently
been held that, "inconvenience is not" a decisive factor to be considered
while interpreting a statute."
(Emphasis Supplied)
32.18 The judgment in the case of Vasant Ganpat Padave (supra), relied upon
by the Appellant, is of no assistance to the Appellants as the Court in that case has
held that a particular reading of the provisions of that Act makes that Act itself
unworkable. The argument of absurdity can have no application when the provisions
including the protection of an Act such as MOFA is made inapplicable by a subsequent
legislation i.e. MMRDA Act.
32.19 Thus, we conclude by saying that as the legal maxim "dura lex sed lex"
states - The law is hard, but it is the law.
32.20 Accordingly, the second submission of the Appellants on 'absurdity' is
rejected.
46 2013 14 SCC 81
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32.21 The Appellants then contended that the expression "or" in Schedule II,
Clause II must be read as "and" in order to avoid the 'absurdity' in the said provision.
According to the Appellants the exclusion of MOFA is attracted only when both the
land and building belong to or vest in MMRDA, which is consistent with (i) the
heading to Chapter VII, (ii) the marginal note to Section 31 and (iii) Section 31 itself.
In support of this submission, the Appellants have relied upon the judgment in Fakir
Mohd. (supra) which states that it is permissible to read "or" as "and" and vice-versa
if some other part of the same statute or the legislative intent clearly spells out such a
requirement.
32.22 As rightly pointed out on behalf of MMRDA, that the normal rule is that
"and" must be read as conjunctive and "or" must be read as disjunctive. There must
be compelling reasons to read "or" as "and" as explained above and vice versa. "Or"
is a conscious choice. In the present case, we hold that the Appellants have failed to
make out such a compelling case as required to read "or" as "and".
32.23 We are supported in our aforesaid view by the judgment of the Supreme
Court in Manmohan Das Shah v Bishun Das 47, where while refusing to read "or" as
"and", the Court held as under :
"The ordinary rule of construction is that a provision of a Statute must
be construed in accordance with the language used therein unless there
47 AIR 1967 SCC 643
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are compelling reasons. Such as, where a literal construction would
reduce the provision to absurdity or prevent the manifest intention of
the legislature from being carried out. There is no reason why the word
"or" should be construed otherwise than in its ordinary meaning. If the
construction suggested by Mr. Desai were to be accepted and the word
"or" were to be construed as meaning "and", it would mean that the
construction should not only be such as materially alters the
accommodation but is also such that it would substantially diminish its
value. ..........." (Emphasis Supplied)
32.24 The Appellants had relied upon the judgments in CWS (India) Ltd.
(supra), State of MP V/s. Azad Bharat Finance (supra), Baburao Shantaram More
(supra), Dwarkadas Marfatia (supra), H. S. Vankani (supra) which state that if the
literal construction of a provision leads to an absurdity, the court must apply rule of
purposive interpretation to cure such absurdity or mischief. However, since we have
already held that the literal construction of the provision does not lead to an absurdity
or cause any hardship, these judgments relied upon by the Appellants have no
application.
32.25 For the reasons aforesaid, we reject the third submission of the
Appellants made on the ground of 'absurdity'.
33. In addition to the submission on absurdity, Shri. Tamboly also relied
upon certain averments in the letter dated 6 September 2017 addressed by MMRDA
to the flat purchasers and in the Affidavit in Reply dated 26 November 2018 to the
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Notice of Motion wherein MMRDA has stated that MOFA can apply to the
Developer upon taking permission of MMRDA. He relies on this, to show that MOFA
can be applied between the Developer and flat purchasers inter se and that there is no
complete exclusion. He seeks to rely on the said statements as an aid to interpretation.
33.1 Shri. Jagtiani has stated that the aforesaid stand had been taken by
MMRDA on an incorrect understanding of the law. However, such a statement even if
made cannot operate as an estoppel against the application of a primary legislation.
33.2 The question whether a statement by an authority can operate as an
estoppel against the application of primary legislation or not, is no longer res integra.
33.3 A Division Bench of this Court in Supriya Rajesh Nair (supra), of
which one of us (S J Kathawalla J.) was a member, while considering whether a letter
addressed by the UDD, Government of Maharashtra to the Additional Government
Pleader could have any bearing on the interpretation and application to a GR held that
"a correspondence between the UDD and its advocate cannot be read as an aid to
interpretation of a Government Resolution, especially when its plain meaning is clear."
33.4 Further, in Bank of Baroda (supra), this Court held that :
"11. The learned Counsel for the respondent No.1 contended that the
doctrine of promissory estoppel cannot be invoked to compel the public
bodies or the Government to carry out a promise which is contrary to law
and he is supported by Shabi Construction Company v City & Industrial
Developmemt Corporation and another (1995) 4 SCC 301 as well as Pune
Municipal Corporation and another vs. Promoters and Builders
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Association and another... The Learned Counsel for the petitioners fairly
conceded to this legal position." (Emphasis Supplied)
33.5 In view of the aforesaid, we hold that the statements by MMRDA in the
aforesaid letter and Affidavit in Reply to Notice of Motion cannot be used as an
estoppel against MMRDA to argue that MOFA can be applied between the Developer
and flat purchasers inter se.
Partial application of MOFA as between the Developer and flat purchasers that
does not prejudice MMRDA is not the correct approach:
34. Shri Rohaan Cama, the Learned Amicus Curiae, has stated that the plain
meaning of Section 31, Schedule II, Clause II indicates that MOFA is not applicable to
MMRDA or to any land belonging to or vesting in MMRDA, and as such any
provisions that prejudices the rights of MMRDA against these lands are specifically
excluded. However, it is the Amicus's submission that there are various provisions of
MOFA, more particularly, Sections 4, 5, 6, 8, 10, 12 and 13 which would have not the
slightest impact on the land or the rights of MMRDA therein and are purely governing
inter se relations between the flat purchasers and the developers, can be applied.
According to him there is no reason why this must not be applied.
34.1 This submission of the Learned Amicus Curiae, is based on the
distinction to be drawn between the definitions of 'land' and 'development' under the
MMRDA Act. His submissions in this regard have been noted above.
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34.2 According to the Learned Amicus Curiae, the object of the MMRDA
Act is not to allow a developer to default or renege on his obligations to a flat purchaser
which has nothing to do with MMRDA whatsoever. There is no conceivable reason as
to why those provisions of MOFA which do not relate to MMRDA and which in no
manner affect or prejudice MMRDA and which only relate to the rights in the flat /
development, and not in the land itself, should not apply. This is to say that the
exclusion of MOFA is only qua MMRDA lands and not qua flats constructed thereon
with which MMRDA has no connection or interest.
34.3 It was submitted that if this interpretation is adopted, it will sub-serve
the interest of MMRDA without depriving Flat Purchasers of statutory rights under
MOFA, which have nothing to do with MMRDA's land, buildings or rights therein.
The aforesaid interpretation given above attempts to strike a balance between the
various competing interests of MMRDA and the flat purchasers, while having regard
to the object and subject of the two legislations i.e. MOFA and the MMRDA Act.
34.4 We have given our careful consideration to the aforesaid submissions
made by the Learned Amicus Curiae and the rival submission of Shri. Sen and Shri.
Jagtiani. Although, we appreciate the balanced approach being sought to be given by
the Learned Amicus Curiae, we are afraid that we cannot accept the same. In addition
to our reasons and findings on the correct interpretation of the relevant provisions as
noted above, which would not allow for this approach, set out below are further
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reasons for not accepting this approach.
34.5 A plain reading of Section 31 read with Schedule II, Clause II of the
MMRDA Act shows that the exclusion of MOFA as against MMRDA or to any land
or building belonging to or vesting in MMRDA is absolute. Therefore, if the land or
building in question belongs to or vests in MMRDA, the application of MOFA stands
excluded as a whole.
34.6 Section 31 of the MMRDA Act provides that "the enactments mentioned
under Schedule II shall apply, with or without modifications, or shall not apply to the
Authority or shall be amended to the extent and in the manner mentioned in the
Schedule".
34.7 Thus, Section 31 seeks to either modify or restrict or exclude the
application of certain legislations to the MMRDA Act.
34.8 Clause II of Schedule II to the MMRDA Act which reads as "The said
Act [MOFA] shall not apply..." clearly shows that application of MOFA has been
excluded without any reservation or qualification.
34.9 This is in contrast with the Bombay Government Premises (Eviction)
Act, 1955, the provisions of which are modified in their application to MMRDA as
mentioned in Schedule II to the MMRDA Act.
34.10 Thus to read down Section 31 and Schedule II to the MMRDA Act, as
suggested by the Learned Amicus Curiae, to mean that only 'some' provisions of
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MOFA shall not apply to MMRDA or to lands or buildings belonging to or vesting in
MMRDA whereas other provisions of MOFA would apply, is contrary to the plain
meaning of Section 31 read with Clause II of Schedule II of the MMRDA Act.
34.11 If the intention of the legislature was to make certain provisions of
MOFA applicable to land or buildings belonging to or vesting in MMRDA or to flats
constructed in such buildings, the legislature could very well have modified the
provisions of MOFA in its application to MMRDA lands as is done for the Bombay
Government Premises (Eviction) Act, 1955 rather than exclude it entirely. That the
legislature has not done so is an important indicator of the legislative intent of making
the exclusion of MOFA absolute.
34.12 Thus, if we accept the submission of the Learned Amicus Curiae, we
would be stepping into the shoes of the legislature and carrying out an exercise which
the legislature itself never intended to do. This is a conscious legislative choice and
cannot be interfered with by the courts.
34.13 Further, the submission of the Learned Amicus Curiae that the exclusion
of MOFA is only with respect to lands or buildings belonging to or vesting in
MMRDA and that MOFA will continue to apply to 'development' (as defined in
MMRDA Act) or 'flats' (as defined in MOFA) owned by flat purchasers, cannot be
accepted for the following reasons.
34.14 The intendment of the exclusion of MOFA by MMRDA Act is wider
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than what is suggested by the Learned Amicus Curiae. The intendment is not limited
to preventing prejudice to MMRDA but extends to advance the object of the
MMRDA Act read as a whole i.e. to secure the development of the Mumbai Metropolitan
Region. The exclusion qua land or building belonging to or vesting in MMRDA is
intended to aid the expedited development of such lands within a notified area for
which MMRDA is not only the landowner, but also, in many cases, the Planning
Authority.
34.15 The definition of 'development' draws colour from Section 12 of the
MMRDA Act which provides at sub-section (1) that the :
'The main object of the Authority shall be to secure the development of the
Mumbai Metropolitan Region according to the Regional Plan, and for that
purpose the functions of the Authority shall be- ...'
34.16 The definition of 'development' in Section 2(c) together with Section 12
of the Act form an important part of the purpose to be fulfilled by the MMRDA Act.
The development (such as the ODC or BKC etc.) is contemplated to achieve socio-
economic improvement in housing, urban infrastructure and amenities within the
MMR. The exclusion of MOFA is a conscious policy decision by the legislature to aid
the realization of this object of the MMRDA Act and not merely to avoid any
inconvenience or hardship to MMRDA. This is perhaps best articulated in the
Statement of Objects and Reasons (set out in detail in the earlier Written Submissions
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filed by MMRDA) which acknowledges that it is :
'... absolutely essential to ensure that the implementation of the various proposals
[in the approved regional plans] is done in a co-ordinated manner so that it leads
to rapid and orderly development of the region. It is therefore expedient to set up a
statutory authority for the purpose of planning, coordinating, executing and
supervising the proper, orderly and rapid development of the areas within greater
Bombay as well as certain parts of the Thana and Kolaba Districts surrounding
it...'.
34.17 As one of the main functions of the MMRDA is to secure the
'development' of the MMR as per the Regional Plan, in order to avoid any
impediments to the MMRDA in achieving the aforesaid objects, Section 31 of the
MMRDA Act provides the application of certain other legislatures either in a
modified, restricted or excluded manner. Thus, to say that the exclusion contained in
Section 31 read with Schedule II, Clause II is only restricted to 'land' but the
restriction does not apply to the 'development' carried out on such land would, in our
view, not be correct. Such 'development' is carried out on land which may or may not
be vested in or belonging to MMRDA. If such land is vested in or belonging to
MMRDA, such as the Suit Plot, then it would not be possible to bifurcate the land
from the building 'developed' on that land and apply the provisions to the latter but
not to the former.
34.18 Our views as noted above are supported by the width of the phrase 'land
or building belonging to or vesting in' MMRDA as discussed by us in the former part of
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our findings to this Issue. This is further made clear by the definition of 'land' itself as
we have observed above. A 'development' on the land such as the construction of a
building or the utilisation of FSI for carrying out such development are within the
definition of 'land'. This being so, we are not inclined to accept the submission that
given the dual ownership of land and building, there is room to apply MOFA to the
flats owned by the flat purchasers and the developer. That would inevitably result in
MOFA being also applied to 'land' that is owned or belonging to the MMRDA.
34.19 Further, the exercise of reading the definition of 'flat' from MOFA and
its import into the scheme of the MMRDA Act is an impermissible reading-in of
concepts under MOFA when MOFA is plainly excluded by MMRDA Act. In view
thereof, the judgment in the case of Nahalchand (supra) is not applicable.
34.20 The Learned Amicus Curiae also drew our attention to the Impugned
Order, where the Learned Single Judge whilst rejecting the reliefs sought has
nevertheless made a brief observation that the provisions of MOFA which do not
prejudice the rights of MMRDA can be applied inter se between the developer and the
flat purchasers. We are of the opinion that since we have considered all aspects of the
matter and parties have argued the fundamental legal question of applicability of
MOFA per se, even beyond the FSI related issues canvassed by the Appellants, we are
entitled to express our views on the legal issues that arise before us. Under Order 41
Rule 22, which would apply to Appeals from Orders by virtue of Order 43 Rule 2, the
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Respondent, though he may not have filed an appeal from any part of the Order may
not only support the Order but may also state that the finding against him in the Court
below in respect of any issue ought to have been in his favour. MMRDA is thus
entitled to do this qua the observation of the Ld. Single Judge that MOFA applies on
MMRDA land as between the flat purchasers and the developer even without filing a
cross objection as MMRDA is still supporting the final Order rejecting interim reliefs.
We accordingly set aside these observations of Learned Single Judge in Para 38-39 of
the Impugned Order as incorrect as a matter of law while at the same time uphold the
final order of dismissal of the interim application filed by the Plaintiffs / Appellants.
34.21 In view of our reasons, findings and conclusions as noted above, we
answer the first part of the first issue framed by us in paragraph 14.1 in the affirmative;
and the second part of the first issue framed by us in paragraph 14.1 in the negative.
ISSUE NO. 2: Would the enforcement of Section 7 of MOFA, as sought to be
invoked by the Appellants in the present case affect the rights of MMRDA?
35. The claim of the Appellants as seen from paragraph 37 to 39 and 66 to 67
of the Plaint is that they have acquired rights in the Suit Plot, and the additional FSI or
any FSI whatsoever in respect of Suit Plot, which may become available in future, vest
in the flat purchasers. The Appellants have specifically prayed, in prayer clause (a) for
a declaration that "...the entire FSI...including the future FSI ... stood vested in the said
flat purchasers including Plaintiffs...". Thus, the Appellants have sought to enforce
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their rights under MOFA in respect of the FSI arising out of the Suit Plot, being a land
which undisputedly vests in the MMRDA. The said claim of the Appellants is
founded on Section 7 of MOFA.
35.1 As we have in answer to Issue 1 already held that the applicability of
MOFA (and therefore all the provisions of MOFA) stands excluded as a whole and any
application of the provisions of MOFA would prejudice the rights of MMRDA, we are
not required to consider this Issue separately. However, as the parties have made
various submissions on this Issue we are considering the same. We note here that the
findings hereinbelow are only in addition to the findings for Issue No.1.
35.2 Section 7 of MOFA reads as under :
"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 [1] [three years] to be rectified :
(1) After the plans and specifications of the 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) any alteration in the structures described therein in
respect of the flat or flats which are agreed to be taken,without the
previous consent of that person;
(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.
(2) Subject to sub-section (1), the building shall be constructed and
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completed in accordance with the plans and specifications aforesaid; and if
any defect in the building or material used, or if any unauthorized change in
the construction is brought to the notice of the promoter within a period of
[3] [three years] from the date of handing over possession, it shall wherever
possible be rectified by the promoter without further charge to the persons
who have agreed to take the flats, and in other cases such persons shall be
entitled to receive reasonable compensation for such defect or change. Where
there is a dispute as regards any defect in the building or material used, or any
unauthorized change in the construction, or as to whether it is reasonably
possible for the promoter to rectify any such defect or change, or as regards
the amount of reasonable compensation payable in respect of any such defect
or change which cannot be, or is not, rectified by the promoter,] the matter
shall, on payment of such fee as may be prescribed, and within a period of
three years from the date of handing over possession, be referred for decision-
(i) in an urban agglomeration as defined in clause (n) of
section 2 of the Urban Land (Ceiling and Regulation) Act, 1976, to such
competent authority authorized by the State Government under clause (d) of
section 2 of that Act, and
(ii) in any other area, to such Deputy Chief Engineer, or to
such other officer of the rank equivalent to that of Superintending Engineer in
the Maharashtra Service of Engineers, of a Board established under section
18 of the Maharashtra Housing and Area Development Act, 1976 as the State
Government may, by general or special order, specify in this behalf. Such
competent authority, Deputy Chief Engineer or, as the case may be, the other
officer of a Board shall, after inquiry, record his decision, which shall be
final."
(Emphasis Supplied)
35.3 From a perusal of Section 7 of MOFA, we understand that the
protection of FSI for the benefit of a Society is premised on the legislative intent for
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the society to eventually obtain a conveyance of the land. Under the scheme of
MOFA, since the society of flat purchasers would be entitled to a conveyance of the
plot on which their building stands it follows that any entitlements arising out of such
lands which are conveyed or are required to be conveyed to the society should belong
to the society. Under ordinary circumstances where MOFA is applicable, it is now a
settled position of law that general language in an agreement for sale reserving unto
the developer the right to exploit such future FSI does not affect the society's rights
under Section 7 and 7A of MOFA. There has to be full and informed consent.
However, if a society is not entitled to a conveyance of the land or is not entitled as a
matter of right to any assignment of the Lease Deed or a sub-lease from the developer,
both of which would require MMRDA's consent, it cannot claim any right to
exploitation of FSI, which is a benefit attached to rights held in the land by virtue of a
conveyance.
35.4 As rightly argued by the Learned Amicus Curiae and Shri Jagtiani and
Shri Sen, these provisions of MOFA cannot be made applicable to MMRDA or lands
and buildings owned by or vesting in MMRDA under Section 31 read with Schedule
II, Clause II simply because there is no other provision in law or in any contract to
which MMRDA is a party which entitles the Appellants to a conveyance of the Suit
Plot (either of ownership, or as a sub-lease). On the contrary, Clause 15 of the
Agreement for Sale recognizes that the flat purchasers will not have any right in the
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FSI available with respect to the Suit Plot.
35.5 A combined reading of the MMRDA Act and Clauses 3(o) of the said
Lease Deed makes it clear that MOFA does not apply to the Suit Plot. That MMRDA
retains ownership of the Suit Plot; that the Suit Plot and buildings standing thereon
shall be delivered to MMRDA at the end of the leased period and that the leasehold
rights granted to the owner cannot be assigned or further sub-leased without
MMRDA's permission. Thus, the MMRDA Act does not envisage the grant of
conveyance or assignment of lease as a matter of right to the flat purchasers for them
to be able to stake a claim to the further FSI being exploited in the remainder of the
Suit Plot.
35.6 As noted, Section 2(d) of the MMRDA Act defines 'land' to include
benefits arising therefrom. Section 3(2) of the MMRDA Act recognizes that MMRDA
can acquire, hold and dispose of property, both moveable and immovable. Section 20
of the MMRDA Act provides that property vesting in MMRDA shall be held and
applied by it for the purposes and subject to the provisions of the MMRDA Act.
Therefore, as per the scheme of the MMRDA Act, MMRDA retains ownership of the
Suit Plot and all benefits arising from the Suit Plot, including FSI. The Appellants or
association of flat purchasers are not, as a matter of law, entitled to any FSI arising out
of the Suit Plot as they are not entitled to a conveyance of the erstwhile owner's
leasehold rights in the Suit Plot. To make MOFA applicable in this scenario would do
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considerable violence to the legislative provisions contained in the MMRDA Act and
the provisions of the said Lease Deed which are known to the Appellants.
35.7 The fact that persons have purchased flats in buildings constructed on
MMRDA lands does not ipso facto entitle them to a conveyance of the underlying land
in the ownership sense or in the form of a sub-lease from the lessee of MMRDA.
MMRDA has the right to consider and permit whether any sub-lease, if any, is to be
granted and on what terms.
35.8 Further it is the Appellants submission that nothing contained in Section
7 or 7A of MOFA will impinge upon MMRDA's right to exploit FSI in the Suit Plot in
the manner of their choosing. MMRDA cannot be compelled to exploit its FSI, but
only through a society of flat purchasers. That would be contrary to MMRDA Act and
the said Lease Deed.
35.9 Further, If MMRDA wants to permit a particular developer to develop
MMRDA lands, for practical considerations such as credibility or convenience of
proceeding with a particular development through one developer as he is constructing
on a particular layout, MMRDA cannot be deprived of the benefit of permitting that
developer to allow for economy of scale on the ground that the developer in question
will require flat purchasers' informed consent for proceeding with that development.
35.10 If Section 7 and 7A of MOFA are made applicable to MMRDA land,
MMRDA's right to issue directions to any local authority, other authority or to any
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person with regard to implementation of any development project (which may
potentially require amendment of the layout and sanctioned plans) under Section 14 of
the MMRDA Act would be altogether as it would now be subject to the informed
consent of the society or association of flat purchasers under Section 7 and 7A of
MOFA.
35.11 The conveyance demanded as a matter of right under Section 11 of
MOFA, which as noted above is the rationale for Section 7 and 7A entitlement to
exploitation of FSI, extinguishes MMRDA's prerogative under Clause 3(p) of the
Lease Deed to consider and permit, on an application made in this regard, the sale,
mortgage, assignment, underletting or sub-letting of the demised plot. We hasten to
add that we are not required to and do not express any view on the status of the
buildings constructed on MMRDA land after the lease period is over. A conveyance or
even sub-lease of the plot would dilute or perhaps even extinguish the MMRDA's
right to determine the lease under Clause 2 of the said Lease Deed. The conveyance or
sub-lease ignores and seeks to frustrate the obligation cast upon the lessee under
Clause 3(o) of the Lease Deed to deliver possession of the demised plot to MMRDA
after expiry of the lease. If the Appellants are entitled to a conveyance of the Suit Plot
as against MMRDA, MMRDA would lose the right to extract mines and minerals, if
any, underlying the Suit Plot as per the rights carved out in Clause 1 of the Lease
Deed.
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35.12 For the above reasons, we hold that enforcement of Section 7 of MOFA,
as sought to be invoked by the Appellants in the present case, will cause prejudice to or
affect the rights of MMRDA and therefore such enforcement cannot be allowed. We
accordingly answer Issue No. (ii) framed in paragraph 14.2 in the negative.
ISSUE NO. 3: If applicability of MOFA has been excluded by the MMRDA Act
in respect of a project, can the Developer and flat purchasers contract to
incorporate the provisions of MOFA and would those provisions of MOFA bind
the parties inter se ?
36. Shri. Tamboly on behalf of the Appellants has submitted that under
Clause 28 of the said Agreement for Sale, the Developer has specifically agreed to be
subject to the provisions of MOFA and therefore cannot now seek to renege from the
same.
36.1 In response, Shri. Sen and Shri. Jagtiani, have both submitted that once
the applicability of MOFA has been excluded, the developer and flat purchasers under
a private arrangement cannot apply the provisions of the MOFA inter se, as the same
would affect the rights of MMRDA.
36.2 We agree with the submissions of Shri Sen and Shri Jagtiani. Since we
have already held that the applicability of MOFA as a whole is excluded against
MMRDA as well as land or building belonging to or vesting in MMRDA, it cannot be
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made applicable by the sidewind of a contract (especially one in which MMRDA is not
a party). This would undermine the statute i.e. the MMRDA Act and therefore is
impermissible. The statutory provisions that exclude the applicability of MOFA, as
discussed above, are not derogable provisions that can be derogated from in the
Agreements for Sale.
36.3 In addition, the Agreement for Sale executed between the Appellants
and the Developer itself provides that the contract will be subject to the said Lease
Deed executed between MMRDA and the Developer (acting as the Constituted
Attorney of the owner). The said Lease Deed in turn provides that the terms thereof
shall be subject to the MMRDA Act. Thus, the parties were at all times aware that the
terms of the said Agreement for Sale are subject to the MMRDA Act and therefore
excluded. Hence, even for this reason the Developer and the Appellants cannot agree
to incorporate or enforce the provisions of MOFA inter se.
36.4 Even the Agreement for Sale does not give a clear indication as to
whether MOFA will apply since on the one hand Clause 28 of the Agreement for Sale
provides that MOFA will be applicable to the obligations of the Developer whereas, on
the other hand, Clause 13.1 of the Agreement for Sale states that the terms thereof are
subject to the Lease Deed. There is, therefore, a fundamental contradiction in the
terms of the Agreement for Sale itself which indirectly acknowledges the applicability
of MMRDA Act but also provides for the application of MOFA which is inconsistent
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with Section 31 read with Schedule II to the MMRDA Act.
36.5 Our aforesaid view is also supported by the judgment of this Court in
Bank of Baroda (supra) wherein it was held at paragraph 11 that even though the
parties are bound by the terms of the agreement, still the terms of the agreement
which are contrary to the provisions of law or any statutory requirements, cannot be
complied with.
36.6 For the reasons aforesaid we hold that the since the applicability of
MOFA has been excluded by the MMRDA Act, the Developer and flat purchasers
contract to incorporate the provisions of MOFA and even if done the same cannot
bind the parties inter se.
37. We must note here that the Appellants have also made various
submissions and relied on various judgments to contend that the Developer is
constructing the said Additional Building without obtaining the informed consent of
the flat purchasers. Since we have already held that the applicability of MOFA as a
whole has been excluded by Section 31 read with Schedule II, Clause II of the
MMRDA Act, we hold that there was no requirement for the Developer to obtain the
consent of the flat purchasers before commencing the construction of Additional
Building. What was necessary for the Developer was to obtain the permission from the
MMRDA, which is the owner of the Suit Plot as well as the Planning Authority and
the same has been done. Additional premium for exploiting the further FSI has been
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paid. The Developer has also developed the reservation on the Suit Plot and handed
over the same to MMRDA as required as a condition for developing the Suit Plot.
38. We therefore find no infirmity in the Impugned Order except to the
extent of the observation specified in para 34.20 hereinabove.
39. The Appeal is accordingly dismissed with no order as to costs.
40. We would like to conclude by expressing our appreciation to Shri Rohaan
Cama, the Learned Amicus Curiae and Shri Shanay Shah, who assisted him in this
matter.
( MILIND N. JADHAV, J. ) ( S.J.KATHAWALLA, J. )
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