Bombay High Court
Mahavir Terrace Co-Operative Housing ... vs Shri.Govindram K Tibrewala on 18 October, 2024
Author: Sharmila U. Deshmukh
Bench: Sharmila U. Deshmukh
2024:BHC-AS:41548
FA-530-2018-16F.doc
IN THE HIGH Court OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
FIRST APPEAL NO.530 OF 2018.
Mahavir Terrace CHS Ltd,
A Society duly registered under
Maharashtra Co-operative Societies
Act, 1960 through its Member having
its address at CTS No.3814 and 3815
Village Kole Kalyan, Shivaji Nagar,
Santacruz (E), Mumbai 400 055. ...Appellant
Versus
1. Shri Govindram K. Tibrewala
being promoter of Shri Mahavir
Terrace C.H.S. (Proposed)
Adult, Indian Inhabitant, residing
At 22, Nutan Laxmi CHS Ltd.
J.V.P.D. Scheme, Vile Parle
(West), Mumbai 400 049.
2. Shivkumar Prahladrai Modi
being promoter of Shri Mahavir
Terrace C.H.S. (Proposed)
Adult, Indian Inhabitant, residing
at 502, Green Blaze, Juhu
Versova, Link Road, Andheri
(West), Mumbai 400 053.
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3. Shri Babulal Khimraj Jain,
being promoter of Shri Mahavir
Terrace C.H.S. (Proposed)
Adult, Indian Inhabitant, residing
at Flat No.404, 4" Floor,
Kadambari Building, Shri Mahavir Terrace CHS
(proposed), C.S. Road, Vakola
Bridge, Santacruz (East),
Mumbai 400 055. ...Respondents
------------
Mr. Atul Damle, Senior Advocate a/w. Ms. Payal Vardhan i/b Mr.
Janardhan P. Singh for the Appellant.
Mr. Sanjiv A. Sawant, Mr. Heramb Kadam, Ms. Samiksha S. Mane for
Respondent No.3.
------------
Coram : Sharmila U. Deshmukh, J.
Reserved : 22nd August, 2024.
Pronounced on: 18th October, 2024.
JUDGMENT:
1. The Appeal is at the instance of original plaintiff being aggrieved
by the Judgment dated 10th January 2018 passed by the City Civil
Court dismissing S.C. Suit No. 5573 of 2006. The suit was initially
instituted by the individual members of the present Appellant Society
and subsequently during the pendency of the proceedings, the present
Appellant Society came to be substituted as Plaintiff. For sake of
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convenience, the parties are referred to by their status before the Trial
Court.
2. The case of the original Plaintiffs is that the Defendants are
promoters of Mahavir Terrace Co-operative Housing Society Ltd. Vide
registered Deed of Conveyance dated 16th August 1989, the
Defendants, as promoters of the proposed Society purchased the suit
property from the Vendors. Subsequently the Defendants commenced
construction of building "Kadambari" on suit property, executed
agreement with the individual flat purchasers and put them in
possession of their respective premises prior to the year 1992. The
management of the proposed Society was handed over to the Plaintiffs
with an assurance to register the Society which was not done. The
Defendant No.3 is the resident of premises situated on 4 th floor of the
building. On 31st January 2005, the Defendants without informing the
Plaintiffs and without their consent obtained IOD from the office of
the Executive Engineer, Mumbai Municipal Corporation for addition
and alteration to the said building in in violation of Section 7 (1) (ii) of
the Maharashtra Ownership Flats, (Regulation of extent, the
promotion of Construction, Sale, Management and Transfer) Act, 1963,
(for short, MOFA). Hence the suit came to be filed seeking declaration
that the Defendants are not entitled to carry out or effect any addition
and/or alteration to the existing building "Kadambari" as originally
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sanctioned, for a declaration that any IOD or CC issued or sanctioned
are unlawful, illegal and null and void and for enforcement of the
obligations under MOFA by getting the Society registered and
conveying the title of the property in favour of the Society and for
permanent injunction.
3. The Suit came to be resisted by Defendant No.3 contending that
consent of the Plaintiffs under Section 7 of MOFA is required to be
obtained only if such additions or modifications adversely affect the
flats of the flat purchasers. All residual rights to the FSI in respect of
the suit property belongs to the Defendants as promoters and
developers until registration of the Society and execution of deed of
conveyance in favour of such registered Society and the construction
has been proposed is based on FSI/TDR which belongs to the
defendant. It was contended that the suit property was developed by
the Defendants by constructing a building consisting of ground plus
four upper floors and was sold to the Plaintiffs. Defendant had
purchased flat in the said building on the 4 th floor and as minimum
number of members to form Society were not available, Society could
not be formed. After construction of the said building some FSI was
still left unconsumed and Defendants decided to construct additional
4th and 5th floor by utilising the balance/unutilised FSI and obtaining
TDR which right has been reserved for the benefit of the Defendants
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under the agreement with the flat purchasers. The flat purchasers
never objected to the proposed additional construction. The original
plaintiff Nos.1 and 2 by their letter dated 27 th March 2002 gave their
written consent/no objection to the Defendants for utilising the FSI for
constructing additional floors upon the said building. Before getting
the amended plans sanctioned, the Defendants by letter dated 2 nd
December 2002 addressed to all the flat purchasers who are the
residents of "Kadambari" put on record that the defendants propose
to construct part of 4th and 5th floors. The said letter was received and
duly acknowledged by all the Plaintiffs and no objection in that behalf
was raised and thus they are deemed to have granted specific consent
to the Defendants.
4. The parties went to trial. The Trial Court framed about eight
issues and answered the issue as regards the consent of the Plaintiffs
against the Plaintiffs. Vide impugned Judgment dated 10th January
2018, the Trial Court dismissed the Suit. The findings of the Trial Court
can be broadly summarized as under:
(a) Clause 6 of the Flat Purchaser's agreement provides for the
residual FSI to be utilised by the Developers till registration of
Society and registered of Deed of Conveyance.
(b) The Society was registered on 21 st December, 2006 and
Conveyance was executed in favour of Society on 16 th August,
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1989 and the residual FSI will be available to the developer till
registration of Society or conveyance whichever is later.
(c) Two members of the Society had given their no objection for
utilising the FSI and remaining members were well aware about
the construction in view of the communication dated 2 nd
December, 2005-Exhibit 28.
(d) Consent of all flat purchasers are not required as it was
already taken in the agreement executed between the flat
purchasers and the developer.
(e) The Civil Court does not have the jurisdiction to declare that
the plans or IOD are unlawful, illegal null and void and the same
will have to be challenged under Section 51 of the MRTP.
5. Heard Mr. Atul Damle, Learned Senior Advocate for the
Appellant-Original Plaintiff and Mr. Sanjiv A. Sawant, Learned Counsel
appearing for Respondent No 3-Original Defendant No 3.
6. Mr. Damle, has taken this Court through the Deed of Conveyance
executed between the erstwhile owner and Defendant No.1 dated 16 th
August 1989 and would point out that the defendants had purchased
the property in their capacity as the promoters of Mahavir Terrace CHS
Ltd. (proposed). Drawing attention of this Court to the various Recitals
and Clauses in the flat purchaser's agreement executed on 11 th July
1998, he would point out the recital in the agreement is that the
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purchasers will hold the property as trustees of the proposed Society.
Drawing attention to Clause (6) of the Agreement, he submits that the
Society was registered on 21st December 2006 and the property card is
issued in the name of the Society and therefore residual FSI would
belong to the Society. He submits that the conveyance was executed in
favour of the Defendants as promoters of the plaintiff Society and thus
the conveyance was in favour of the plaintiff Society. and He would
further submit that as per Clause 35 of the agreement, the developer
was only permitted to construct additional structures like Society
office, station for electricity etc and no consent was given for
construction of additional floors on the existing building. He would
further point out Clause 38 of the agreement and would submit that if
any additional FSI was available before execution of the conveyance in
favour of the Society then the developer shall be entitled to use the
same. He submits that there is difference between Clause 6 and Clause
38 as clause 6 provides for the residual FSI to vest in the Society upon
the registration of the Society and deed of conveyance which ever is
later, whereas Clause 38 provides for additional FSI to be available to
the developer before execution of conveyance in favour of the Society.
He submits that the Trial Court has dismissed the suit on two grounds
that consent was not required to be obtained as consent was already
taken at the time of the agreement and secondly that consent has
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been given by virtue of the letters dated 2 nd December 2005 and 27th
March 2002 addressed by the original plaintiff Nos.1 and 2. He would
further submit that the consent of 2 nd December 2005 cannot be said
to be valid consent as the same is in the form of a letter sent for
information of the flat purchasers and the signatures are only
acknowledgment of receipt of the said letter and cannot constitute
consent of the flat purchasers. He submits that immediately thereafter
the suit came to be filed and therefore it cannot be said that the
Plaintiffs did not object to the said additional construction. In support
he relies upon the following decision:
1.Kalpita Enclave V. Kiran Builders1
2.Jayantilal Investments V. Madhuvihar Coop
Housing Society2
3.Madhuvihar Co-op Housing Society V. J. I.3
4.Vitthal V. Kores (India) Ltd.4
5.Grand Paradi Co-operative Hsg. Society Ltd. V.
Mont Blanc Properties,5
6.Noopur Developers V. Himanshu,6
7. Per contra, Mr. Sawant, learned counsel for Respondent No.3
would submit that as per Clause 6 of the flat purchaser's agreement,
the residual FSI was available to the developers till registration of
1 1986 Mh. L. J. 110
2 (2007) 9 SCC 220
3 2011 Mh. L.J. 641
4 2019 (3) Mh. L.J. 857
5 2010 SCC OnLine Bom 608
6 2010 (7) Mh. L.J. 694
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Society or registration of Conveyance whichever is later. He submits
that on 31st January 2005, IOD was issued and C.C. was issued on 28 th
March 2006. Pointing out to the consent letter of 27 th March 2002 and
the communication of 2nd February 2005, he submits that the consent
was given by the members and they had never objected. He would
further point out the cross examination of the Plaintiff and would
submit that the plaintiffs examined plaintiff No.12 who has deposed
that he is not aware whether plaintiff Nos.1 and 2 have given consent.
He submits that Plaintiff Nos.1 and 2 did not step into the witness box
to deny the consent. He would further point out the affidavit of
evidence of the plaintiff and would submit the notice dated 4 th
November 2006 issued to the defendants which was replied by the
defendants by reply dated 28th November 2006 produced by the
witness. Pointing out to the said communication he would submit that
the defendants had specifically stated that plaintiffs have given their
written consent for the construction work by the Defendants. He
would further submit that the Trial Court has rightly noted from the
cross examination of the plaintiff that he has shown ignorance whether
603 square meters were utilized or not in the construction of the
building. He would submit that the clauses in the flat purchasers
agreement has not been challenged by the Plaintiffs. He would further
point out that the Trial Court has taken into consideration the consents
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which were issued by the Plaintiffs. Pointing out clause 3 of the
Agreement, he submits that prior consent is required to be taken
where the variation adversely affects flats of the purchaser. He would
further submit that the Trial Court has followed the decision in the
case of Grand Paradi Co-operative Housing Society Limited (supra)
and that it is settled that unless the plaintiff shows that consent was
obtained by adopting illegal means, they are bound by the consent. He
submits that the Trial Court has rightly noted that the consent of the
flat purchasers is not required in view of the consent recorded in the
agreement. He submits that residual FSI is being used by the
Defendant No.3 for himself and not for any commercial exploitation.
He would submit that there is implied consent in the agreement which
has been accepted in the cross examination. He would further submit
that the Plaintiffs have not proved that the consent was fraudulent. In
support he relies upon the following decision:
1. Grand Paradi Co-operative Hsg. Society Ltd. V.
Mont Blanc Properties,7
2. Jamuna Darshann Co-op Hsg. Society Ltd. V. M/s.
JMC & Meghani Builders,8
3. Venus Vasant Valley Co-operative Housing Society
Ltd. V. Sheth Shelters Private Ltd.,9
7 2010 SCC OnLine Bom 608
8 2008 (1) All MR 789
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8. In rejoinder Mr. Damle, learned counsel would submit that in the
case of Grand Paradi Co-operative Hsg. Society Ltd. (supra)
agreement was of the year 1971 and at that time Form V was not
prescribed and in that view of the mater, the clauses in the Agreement
were held to be binding. He submits that there were total 17 Plaintiffs
and there was no requirement for Plaintiff Nos.1 and 2 to step into the
witness box and in any event consent cannot be said to be an informed
consent.
POINTS FOR DETERMINATION:
9. The following points would arise for determination:
(i). Whether the Defendants are entitled to the unconsumed
residual FSI and the additional FSI of the suit property, which
can be utilised by the Defendants for the purpose of putting
up additional construction on the 4 th and 5th floor of the
building without obtaining the consent of the Plaintiffs ?
(ii). Whether the clauses in the flat purchaser's agreement
dated 11th July, 1998 and the communications dated 27 th
March 2002 and 2nd February 2005 constitute consent of the
members of the Plaintiff Society to the proposed additional
construction?
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AS TO POINT NO (i):
10. The Defendants as promoters have executed flat purchaser's
agreement with the individual flat purchasers recording the agreement
between the parties. The Flat Purchaser's Agreement dated 11 th July,
1998 has been produced by the Plaintiffs during the evidence and has
been marked as Exhibit 9. The relevant recitals and covenants in the
indenture reads as under:
"AND WHEREAS the Promoters/Developers have informed the
Acquirer that the acquirer of the terrace flat i. e. the flat on the
4th floor of the proposed building to be constructed on the said
property shall have an exclusive right to use and enjoy the
terrace area on the 4th floor level to the exclusion of all other
acquirers of flats/units in the proposed building.
CLAUSE 3. The Developers shall construct the said building
consisting of ground floor and four upper floors on the said
property in accordance with the plans, designs and specifications
approved by the Municipal Corporation of Greater Bombay and
which have been seen and approved by the Acquirer, with only
such variations and modifications as the Developers may
consider necessary or as may be required by the concerned local
authority the Government to the made in them or any of them
Provided that the Developers shall have to obtain prior consent
in writing of the Acquirer in respect of such variation or
modifications, which may adversely affect the flat of the
Acquirer. The Developers have informed the Acquirer and the
Acquirer is aware that the Developers have already constructed
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the ground floor and the four upper floors of the said building
and that only certain internal work remains to be executed.
6.The Developers hereby declare that the floor space Index
available in respect of the said property is 662.20 square meters
only and that the same will be utilised by the Developers in the
said building to be constructed on the said property as
mentioned in the recitals hereinabove and that no part of the
said floor space Index has been utilized by the Developers
elsewhere for any purpose whatsoever. In case any part of the
said floor space index has been utilised by the Developers
elsewhere, then the Developers shall furnish to the Acquirer all
the detailed particulars in respect of such utlization of the floor
space Index by the Developers. In case while developing the said
property the Developers have utilised any floor space index of
any other land or property by way of floating floor space index
then the particulars of such floor space index shall be disclosed
by the Developers to the Acquirer. The residual F.S.I. in the said
property not consumed will be available to the Developers till
the registration of the society and the registration of a Deed of
Conveyance of the said property and the building to the
constructed thereon, whichever is later, whereas after the
registration of the society and the Deed of Conveyance, the
residual F.S.I. shall be available to the society. ( Emphasis
supplied)
35. IT IS HEREBY EXPRESSLY AGREED that so Iong as it does not
in any way affect or prejudice the rights hereunder granted in
favour of the Acquirer in respect of the said premises the
Developers shall be liberty to sell, assign, mortgage or otherwise
deal with or dispose of their right, title or interest in the said
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property or any part thereof or in the said building being
constructed by the Developers. The developers shall be free to
construct any additional structures like sub-station for
electricity, Co-operative Society's office, co-operative
departmental stores, temple or place of workshop, covered and
enclosed garages in open compound, underground and overhead
tanks, structure for watchmen's cabin, toilet units for domestic
servants, septic tank and soak pits, the location of which are not
particularly marked or shown upon the ground floor plans or lay-
out plans of the said property. The Acquirer shall not interfere
with the said rights of Developers or obstruct the Developers in
the exercise of such rights whether by way of any disputes raise
of Court Injection under Section 7 of the Maharashtra Ownership
Flats Act and/or under any other provision of law or otherwise
however. The Developers shall always be entitled to sign on
behalf of the Acquirer undertakings and indemnities required by
the Municipal Corporation or any other State or Central
Government or Competent authorities under any law concerning
construction of buildings for implementation of their scheme for
development of the said property.
38. The Acquirer shall be liable to pay all the costs, charges and
expenses for stamp duty and registration charges and for
lodging this agreement for registration and having the same
registered and shall indemnify the Developers and shall keep the
Developers indemnified at all times in respect thereof and also in
structures and storeys on the said building which shall be the
property of the Developers and the Developers will be entitled to
dispose of the same in such manner as they deem fit and the
Acquirer shall have no objection against the same. If any
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additional F.S.I. is available to the Developers before the
execution of the Conveyance in favour of the proposed
society/limited company/corporate body, the Developers shall be
entitled to utilize the same and also to sell and dispose off the
premises that may be constructed by utilising such additional
F.S.I. irrespective of the fact that the premises and/or the
management of the said building has been handed over to or
taken over by the Co-operative Society limited
company/corporate body, the developers shall be entitled to
utilise the same and also to sell and dispose off the premises
that may be constructed by utilizing such additional F.S.I.
irrespective of the fact that the premises and/or the
management of the said building has been handed over to or
taken over by the Co-operative Society/limited
Company/corporate body or ad-hoc committee or any other body
of such purchasers."
11. Clause 6 of the Agreement reproduced above indicates that the
entitlement of the parties to the unconsumed residual FSI is based on
the happening of certain event i.e. the registration of Society or
registration of Conveyance Deed whichever is later. In the instant case,
the Deed of Conveyance was already executed in favour of the
proposed Plaintiff Society in the year 1989 whereas the registration of
the Society has taken place in the year 2006. In the cross examination,
DW-1 has admitted that the Society is the owner of the suit land.
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12. The flat purchaser's agreement dated 11 th July, 1998 has been
executed under Section 4 of MOFA. Section 10 of MOFA obliges the
Promoter to form a Co-operative Society as soon as the minimum
number of members required to form the Co-operative Society had
taken flats. Rule 8 provides for the application for registration to be
submitted by Promoter within four months thereof. Admittedly in the
present case, there is non compliance by the Defendants in complying
with the obligations under Section 10 of MOFA read with Rule 8 of
Rules of 1964.
13. There is no evidence led by the Defendant No 3 that the Society
could not be registered as mandated by the statutory provisions of
MOFA. There was thus a statutory obligation on the Promoter to
register the Society and admittedly there is a default. The Promoter
cannot be permitted to take advantage of its own wrong and then
claim right to the unconsumed residual FSI on the basis that as the
Society was not registered till the year 2006 in terms of Clause 6 of the
Flat Purchasers agreement, the Promoter will be entitled to the
unconsumed residual FSI. If such contention is accepted, the same
would amount to putting a premium on illegality and the Promoter can
postpone the registration of the Society infinitely to take advantage of
the unconsumed FSI by incorporating such clauses in the Flat
Purchasers Agreement.
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14. Although the portion of Clause 4 of prescribed Form V which
provided for the residual FSI to be available to the Society after
registration was deleted vide amendment to the Rules notified on 6 th
March, 1997, Clause 6 of the Flat Purchasers Agreement in the present
case is couched in similar words. In case of Ravindra Mutneja and
others vs Bhavan Corporation and others 2003(5) Mh.L.J 23, the
learned Single Judge of this Court has held thus:
"The real issue as has been noted earlier is what is the stage up
to which the developer/owner can put up additional construction
after the building in terms of the registered plan has been
constructed and occupied. In my opinion, once the buildings
shown in the approved plan submitted in terms of the
regulations under an existing scheme filed before the authorities
under MOFA Act, have been completed and possession handed
over, the builder/owner cannot contend, that because he has not
formed the society and/or not conveyed the property by sale
deed under the Act he is entitled to take advantage of any
additional F.S.I. that may become available because of
subsequent events. That would be so at the stage the building is
under construction or the building is not completed and/or
purchasers are not put in occupation provided such building
forms part of the development plan and/or layout plan already
approved. Subsequent amendment of the layout plan after the
building plan is registered under MOFA, without the consent,
prima facie, of the flat purchasers would not be permissible. It
may be possible to accept that the development plan could be
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modified as long as the right of the purchasers and the benefits
which they are entitled to including recreational and open areas
are not effected by the revised development plan. Once the
building is completed and the purchasers are put in occupation in
terms of plan filed and the time to form the society or convey
the property in terms of the agreement or the rules framed
under MOFA is over the permission of such purchasers would be
required. (Emphasis supplied)
In the instant case, the building completion certificate for the
plaintiffs building, was issued in the year 1997. The
builder/owner defendant Nos. 1, 3 and 4 had to put up the
construction, based upon the permission/license granted. The
defendant Nos. 1, 3 and 4 had to construct the building and to
convey the title by sale deed in terms of Rule 9. If property had
been conveyed, prima facie the remaining FSI or FSI which
become subsequently available on the facts of the case, would
be to the society to whom the land had to be conveyed. The
record shows that the building was approved in December, 2001.
It cannot prima facie, be said that defendant Nos. 1, 2, 4 and 5
have any rights under which they are entitled to put up an
additional building contrary to section 7A of the Act." (Emphasis
supplied)"
15. The Learned Single has held once the building shown in the
approved plan has been completed and possession handed over, the
builder cannot contend that because he has not formed the society and
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not conveyed the property under MOFA, he is entitled to take
advantage of the additional FSI that may become available because of
subsequent events. Once the building has been completed and the
purchasers are put in possession in terms of plan filed and time to form
the society or convey the property in terms of the agreement or the
rules framed under MOFA is over, the permission of such purchasers
would be required.
16. In Noopur Developers vs Himanshu V. Ganatra (supra), this
Court, while considering the clauses in the agreements executed in
that case giving right to promoter to carry out additional construction
by reason of additional FSI being available, has held that the clauses
has to be considered in context of requirement of disclosure of the
entire scheme to be carried out in the layout. The Promoter is required
to make disclosure concerning the inherent FSI and also at the stage of
layout plan he is required to declare whether the plot in question in
future is capable of being loaded with additional FSI/floating FSI/TDR.
Necessarily therefore, if the entire scheme including the information
about TDR/FSI is not disclosed then the promoter loses the right to use
the residual FSI.
17. Considering the settled position in law the reliance by Mr.
Sawant on clause 3 of the Flat Purchaser's agreement is clearly
misplaced.
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18. Plaintiff No 12, who has been examined on behalf of the
Plaintiffs, has deposed that the Society had purchased the suit
property vide agreement dated 16th August 1989 from the vendors. He
has further deposed that the Plaintiffs are owners of the suit property
and has produced the Agreement dated 16 th August, 1989 and the
property card showing the name of the Plaintiffs as owners. In cross
examination he has admitted that on the day of conveyance i.e. 16 th
August, 1989, the Society was not registered.
19. Exhibit -32 i.e. the Agreement dated 16 th August, 1989 has been
executed between the owners and the Defendants in their capacity as
Promoters of the proposed Plaintiff Society. The relevant Recitals in
the Agreement dated 16th August, 1989 reads thus:
"AND WHEREAS the Purchasers will hold the said property for
and on behalf of and as the express trustees of the said Shri
Mahavir Terrace Co-operative Housing Society (Proposed) or a
society which may be incorporated with any other name by the
Promoters for the purpose of the said property described in the
First Schedule hereunder written.
"AND WHEREAS the Purchasers proposed to incorporate a co-
operative society comprising as its members all the
acquirers/allottees or purchasers of flats/units proposed to be
constructed on the said property by the Purchasers and have
therefore requested the Vendor and the Legatees to execute this
Deed of Conveyance in favour of the Purchasers in their capacity
as such promoters of the proposed Shri Mahavir Terrace Co-
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operative Housing Society or a society which maybe formed and
registered with any other name, which the Vendor and the
Legatees have agreed to do in the manner hereinafter
appearing:"
20. It is clear from the above Recitals that the Deed of Conveyance
was executed by the Defendants as promoters of the Plaintiff Society
and for and on behalf of and as the express trustees of the Plaintiff
Society. There was thus a Conveyance in the year 1989 itself by the
erstwhile owners in favour of the proposed Plaintiff Society through
the Defendants as trustees on behalf of the proposed Society. By the
said Indenture the suit property i.e. land ad-measuring 662.20 square
meters was thus conveyed in favour of the proposed Plaintiff Society in
the year 1989 itself. The Defendants thereafter constructed the
building and entered into flat purchaser's agreements with the
individual members under MOFA.
21. Clause 38 governs the entitlement of the parties to the
additional FSI which may be available to the Developers before the
execution of the Conveyance in favour of the proposed society/limited
company/corporate body, in which case the Developers shall be
entitled to utilise the same and to dispose off the premises
constructed. The conveyance has already been registered in favour of
the proposed Society on 16th August, 1989 and therefore there is no
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question of applicability of Clause 38 of the Indenture dated 11 th July,
1998.
22. In his evidence, the Defendant No 3 has deposed that after the
construction of the building, the entire TDR of 662.2 square meters
plus balance FSI of 57.10 square feet from the 662.2 square meters FSI
was available for construction with the Defendant. The Defendants
therefore proposed to utilise the additional FSI as well as the
unconsumed residual FSI. The additional construction is thus sought to
be carried out by utilising the additional FSI in form of TDR of 662.2
square meters available after construction. The entitlement to the TDR
of 662.2 square meters is governed by Clause 38 of the Agreement
dated 11th July, 1998 and after the conveyance is executed in the year
1989 in favour of proposed Society, the Defendants are not entitled to
the additional FSI.
23. The construction is proposed to be carried out by the
Defendants by utilising the unconsumed residual FSI and the additional
FSI available. As far as the unconsumed residual FSI is concerned, the
same will be available to the Defendant only till the registration of the
Society or the registration of conveyance whichever is later. As far as
conveyance is concerned, the Agreement dated 16th August, 1989 has
been executed by the Defendants as promoters of the proposed
Society and as trustees for and on behalf of the Society. The property
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card stands in the name of the Society. The property thus stood
conveyed in the year 1989 in favour of the Society through the
Defendants as promoters and trustees.
24. As far as registration of Society is concerned, the Defendants
having failed to comply with the mandatory statutory obligations
under Section 10 MOFA read with Rule 8 and having failed to get the
Society registered cannot take advantage of its own default and claim
entitlement to the unconsumed residual FSI without the consent of
Plaintiffs for the reason that the Society was not registered till the IOD
was obtained in the year 2005. As held in Ravindra Mutneja (supra)
once building is completed and purchasers put in occupation and time
to form Society is over, permission of such purchasers would be
required.
25. Accordingly, I answer Point No (i).
AS TO POINT NO (ii):
26. In the present case, in the year 1992, the flat purchasers were
put in possession of their individual flats and in the year 2003, the
management of the proposed Society was handed over to the
members. Clause 3 of the Flat Purchasers Agreement reads thus:
"The Developers shall construct the said building consisting of
ground floor and four upper floors on the said property in
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accordance with the plans, designs and specifications approved
by the Municipal Corporation of Greater Bombay and which have
been seen and approved by the Acquirer, with only such
variations and modifications as the Developers may consider
necessary or as may be required by the concerned local authority
the Government to the made in them or any of them Provided
that the Developers shall have to obtain prior consent of the
Acquirer in respect of such variation or modifications which may
adversely affect the flat of the Acquirer. The Developers have
informed the Acquirer and the Acquirer is aware that the
Developers have already constructed the ground floor and the
four upper floors of the said building and that only certain
internal work remains lo be executed."
27. The plans annexed to the flat purchasers agreement denotes
that the sanctioned plans which were disclosed to the flat purchasers
were for ground plus four upper floors which was disclosed to the flat
purchasers.
28. PW-1 has deposed that the Defendants had commenced
construction of the suit property without the consent of the members.
In the cross examination, the case of the Defendants was that there
was no need to take consent by reason of Clause 35 of the flat
purchaser's agreement. PW-1 has denied having knowledge as to
whether the Plaintiff No 1 and 2 had given consent by letter dated 27 th
March, 2002. PW-1 has admitted that the document dated 2 nd February,
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2005 bears his signature. DW-1 in his evidence has deposed that
Plaintiff No 1 and 2 had given their No Objection to construction of
additional floors and by letter dated 2 nd February, 2005 he had
informed all members about proposed construction, which letter was
duly received by all members. DW-1 has admitted in cross examination
that immediately after sale of the flats to Plaintiff Nos 1 and 2, their
consent was taken for additional construction on 27th March, 2002.
29. The Defendants rely on Clause 6, 35 and 38 of the Flat
Purchaser's agreement, Consent letter of the Plaintiff No 1 and 2
dated 27th March, 2002 and the letter dated 2nd February, 2005. Clause
35 of the Flat Purchasers agreement reads thus:
35. IT IS HEREBY EXPRESSLY AGREED that so Iong as it does not
in any way affect or prejudice the rights hereunder granted in
favour of the Acquirer in respect of the said premises the
Developers shall be liberty to sell, assign, mortgage or otherwise
deal with or dispose of their right, title or interest in the said
property or any part thereof or in the said building being
constructed by the Developers. The developers shall be free to
construct any additional structures like sub-station for
electricity, Co-operative Society's office, co-operative
departmental stores, temple or place of workshop, covered and
enclosed garages in open compound, underground and overhead
tanks, structure for watchmen's cabin toilet units for domestic
servants, septic tank and soak pits, the location of which are not
particularly marked or shown upon the ground floor plans or lay-
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out plans of the said property. The Acquirer shall not interfere
with the said rights of Developers or obstruct the Developers in
the exercise of such rights whether by way of any disputes raise
of Court Injection under Section 7 of the Maharashtra Ownership
Flats Act and/or under any other provision of law or otherwise
however. The Developers shall always be entitled to sign on
behalf of the Acquirer undertakings and indemnities required by
the Municipal Corporation or any other State or Central
Government or Competent authorities under any law concerning
construction of buildings for implementation of their scheme for
development of the said property.
30. Under Section 7 of MOFA, after the plans and specifications are
disclosed there can be no alteration 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 buildings. By virtue of amendment to
Section 7A, it was clarified that Clause (ii) of sub-section 1 of Section 7
will not apply in respect of construction of any other additional
building or structures constructed in the layout. The statutory
provisions mandates previous consent of all the flat purchasers before
commencing additions in the structure of the building. In the instant
case, the Defendants proposed to construct additional floors on the
same structure. One of the conditions of C.C. is submission of consent
letter of all members to the proposed addition.
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31. As far as Clause 35 of the Agreement is concerned, the same
provides that the Developer shall be free to construct any additional
structure such as sub station, Society office, departmental stores,
garages, underground tanks etc for the construction of which the flat
purchaser will not create any obstruction. The said Clause cannot
constitute a consent by the flat purchasers for construction of
additional floors on the existing structure of the building. Sufficient
guidance can be taken from the decision in Bajranglal Eriwal and
others vs Sagarmal Chunilal and orthers 2008(5) Mh.L.J. 571 where
the Court has held as under:
"The provisions of the Act, as construed now by the judgment of
the Supreme Court, would leave no manner of doubt that the
statutory bar upon the promoter altering the structure of a flat
agreed to be purchased under Clause (i) of sub-section (1) of
section 7 and of making any other alterations or additions in the
structure of the building under Clause (ii), can be lifted only
subject to a disclosure by the developer of the entire project or
scheme. The previous consent that is contemplated by sub-
section (1) of section 7 must be an informed consent. An
informed consent is one which is freely given, after a flat
purchaser is placed on notice by a complete and full disclosure of
the project or scheme which the builder intends to implement.
The consent that is contemplated by sub-section (1) of section 7
is, therefore, a specific consent which is relatable to the
particular project or scheme of the developer which is intended
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to be implemented. The observations of the Supreme Court in
Jayantilal Investments, bring about a balance between the
rights of the promoter on the one hand and a flat purchaser on
the other. There is a statutory embargo upon the making of
alterations either in an individual flat or in respect of the
structure of the building after the disclosure of the plans and
specifications of the building. This embargo was introduced by
the legislature specifically to obviate the kind of malpractices
that were taking place. The lifting of the embargo is conditional
on the grant of previous consent. The lifting of the embargo
must be confined strictly within the parameters which have been
envisaged by the legislature and it is in that context the Supreme
Court has held that the consent can be regarded as valid if there
has been a full disclosure by the developer of the entire project
which he has to implement. Thus construed, there can be no
manner of doubt that it is not open to a developer/promoter to
rely upon a general consent. To allow such generalized consents
to operate would defeat the public policy which underlies the
provisions of sub-section (1) of section 7 as interpreted by the
Supreme Court. It is a well settled principle of statutory
interpretation that the interpretation which the Court places on
a statute must be purposive, so as to achieve the object and
intent of the legislature. The Maharashtra Ownership Flats Act,
1963, is an Act to regulate the promotion of the construction of
the sale and management, and the transfer of fiats on
ownership basis. The preamble specifically provides that the
State Government was conscious of the fact that on account of
an acute shortage of housing, there were "sundry abuses,
malpractices and difficulties relating to the promotion of the
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construction of, and the sale and management and transfer of
flats taken on ownership basis." The legislature has found that
such malpractices not merely existed, but they were increasing.
It is in this background that the Court must adopt a purposive
interpretation of law and that interpretation which would
defeat the object of the legislature must be eschewed."
(Emphasis supplied)
32. In Neena Sudarshan Wadia vs Venus Enterprises 1984 (2)
Bom.C.R 505 , the Court held as under:
"Now, we have to understand the meaning of the word 'consent'
as used in Clause (ii) of sub-section (I) of section 7. After the
plans and specifications of the building as approved by the local
authority are disclosed or furnished to a person who agrees to
take a flat from the promoter, a prohibition is claimed on the
promoter not to make any alterations in the building or
constructed additional structures. This prohibition can be lifted if
before the promoter carries out the alterations in the building or
before he starts the work of additional construction, the
promoter obtains the consent of all the persons who have
agreed to take the flats. For the purpose of obtaining consent, a
promoter must ask the flat owners for their permission and
reveal to them the nature of the proposed alterations to the
building or of the additional structures to be constructed as,
without such disclosure, the flat owners cannot know for what
work the permission is sought and for what work they are
required to consent. Again in response to a request for consent,
there must be an affirmative acceptance from all the persons
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who have agreed to take the flats. The word "consent" in the
context of the section does not mean implied consent such as by
conduct or acquiescence or circumstance that might be consent.
Consent in this section is to be understood to mean as positive
consent to specific items of work or alteration to be carried out
or particular additional structure to be built by a promoter. This
seems to be the object of enacting these provisions of obtaining
previous consent of the flat owners as otherwise the
malpractices and irregularities intended to be eradicated by this
enactment would continue to flourish and the promoters would
not be deterred by the penal provision of section 13. A blanket
consent or authority obtained by a promoter at the time of
entering into an agreement for sale or at the time of handing
over possession is not the consent contemplated by section 7(I)(i)
or (ii) for such a blanket consent or authority would sew up or
nullify these provisions." (Emphasis supplied)"
33. The settled legal position is that for the consent to be an
informed consent as contemplated by Section 7(1) of MOFA, there
must be full and complete disclosure of the nature and extent of
construction proposed by the developer. There cannot be an implied
consent such as by conduct or acquiescence. Similarly the blanket
consent obtained at the time of entering into flat purchasers
agreement or at the time of handing over possession is not held to be
consent under Section 7(1)(i) of MOFA.
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34. Examining the facts of the present case in light of the settled
position in law, as discussed above, Clauses 6 and 38 of the Flat
Purchasers agreement which merely refers to the entitlement of the
parties to the residual and additional FSI without anything further does
not amount to an informed consent as to the proposed construction.
Admittedly the sanctioned plan placed before the flat purchasers at
the time of execution of the flat purchaser's agreement was for
construction of ground plus four upper floors.
35. The Consent letter dated 27th March, 2002 of the Plaintiff No 1
and 2 has been admitted by DW-1 to have been obtained at the time of
sale of the flat. The contents read as under:
This is to record that we have no objection to your utilising
TDR/FSI and constructing additional floors on the building,
KADAMBARI, at Bullsroyee Colony Road, Vakola Bridge,
Santacruz East, Mumbai 400 055 as long as the same does not
affect our rights to the ground floor Flat No 1 or to the open car
park space sold by you to us."
36. The contents of the communication dated 2 nd February, 2005
addressed by the Defendants the residents of Kadambari reads thus:
"This is to inform you that as a Constituted Attorney Owner of
Smt. Ruby Fernandes, I propose to construct part of 4 th floor and
5th floor over the existing building of Ground plus three floors
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plus part 4th floor.
Propose construction of part 4th floor and 5th floor will be
occupied by me.
This is for your information."
37. The communication is then signed by the members as token of
receipt. At the relevant time when the communication dated 27 th
March, 2002 and 2nd February, 2005 were addressed, the plans were
not sanctioned for the additional construction as IOD was issued on
31st January, 2005. The communication dated 27 th March, 2002 was
issued at the time of taking possession of the flat and a blanket
consent was taken, which does not satisfy the requirement as
contemplated by Section 7 of MOFA. The communication dated 2 nd
February, 2005 is merely an information given in common to all
residents of the building and the signature by the recipients is only
token of receipt of the communication. The communications cannot
constitute consent much less an informed consent in the absence of
full and complete disclosure of the exact nature of the proposed
construction.
38. In Grand Paradi Co-operative Housing Society Limited & Ors. vs.
Mont Blanc Properties & Industries Pvt. Ltd. & Anr. 10, on which
reliance has been placed by the City Civil Court, the Division Bench of
10 2011 (5) Bom. C. R. 249
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this Court was considering the Appeal against the Notice of Motion
seeking an order of temporary injunction. In facts of that case, the
injunction was sought against carrying out further construction on
vacant land without obtaining previous consent of the members of the
Society. The Division Bench was concerned with the position where the
Developer was seeking to put up additional structure and considering
the position which existed prior to the amendment of 1986 to Section
4 of the MOFA Act by which Form No.V came to be prescribed and in
the absence of any Form prescribed under Section 4 held that
agreement entered between the builders and flat purchasers would be
valid and binding between the parties. The Division Bench in that fact
situation held that consent was given by the members of the Society in
the year 1971 with full knowledge of the law then in force and they
cannot be permitted to resile from such express consent unless they
make out a case that their consent was obtained by illegal means and
therefore they will be bound by the consent. The Court was
considering whether prima facie case has been made for the
entitlement of the Society to the entire land and the building and the
findings of the Court are prima facie findings at the interim stage. The
facts are clearly distinguishable as the case was covered by Section 7-A
of MOFA and not Section 7 of MOFA.
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39. In case of Jamuna Darshan Co-op Hsg Society Ltd and Ors vs
M/s JMC & Meghani Builders and Ors (supra) , the Court was
considering an application seeking temporary injunction from carrying
out construction. In that case, the Learned Single Judge held that the
flat purchaser cannot be heard to obstruct the development activity in
relation to an open plot so long as their original structure and flats
remain unaltered and undisturbed. Pertinently, the Learned Single
Judge did not accept the contention about non requirement prior
consent of the flat purchaser by observing that Section 7 of MOFA
protects the rights of flat purchaser to the limited extent of any
alteration in the structure described in the agreement in respect of the
flats which are agreed to be purchased by them. The decision would
assist the case of the Plaintiff that as addition was proposed to the
existing structure of the flat purchasers, the informed prior consent
was necessary.
40. The blanket consent obtained under the Flat Purchasers
Agreement and the communications dated 27 th March, 2002 and 2nd
February, 2005 cannot constitute an informed consent as
contemplated under Section 7 of MOFA. The Defendants having failed
to obtain prior consent of the members of the Plaintiff Society were
not entitled to put up the additional construction on the existing
structure.
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41. Point No (ii) is answered accordingly.
42. In light of the above, the following order is passed:
:ORDER:
(a) First Appeal is allowed;
(b) S. C. Suit No.5573 /2006 stands decreed in terms of prayer
clauses (a) and (d);
(c) Decree to be drawn up accordingly.
[Sharmila U. Deshmukh, J.]
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Signed by: Rajeshwari S. Karve
Designation: PA To Honourable Judge
Date: 18/10/2024 18:47:55
