[Cites 30, Cited by 0]
Bombay High Court
Cable Corporation Of India Limited vs The Western Edge Ii Premises ... on 17 March, 2026
2026:BHC-AS:13204
902-asao-14-2024+doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
APPEAL FROM ORDER NO. 14 OF 2024
WITH
INTERIM APPLICATION NO.241 OF 2024
Cable Corporation of India Limited ]
A Company incorporated under the ]
provisions of the Companies Act, 1956, ]
having its registered office at 6, Vallabhdas Marg, ]
Ballard Estate, Mumbai - 400 001. ]... Appellant
Versus
1. The Western Edge II Premises ]
Co-operative Society Limited ]
having its address at Off Western Express Highway, ]
Borivali (East), Mumbai - 400 066, ]
2. Kanakia Spaces Realty Private Limited ]
A Company incorporated under the ]
Companies Act, 1956, having its registered office ]
at 215, Atreum, 10th Floor, CTS No. 215, ]
Andheri Kurla Road, Andheri (East), ]
Mumbai - 400 093. ]
3. Prithvi Consultancy Private Limited ]
A Company incorporated under the ]
Companies Act, 1956, having its registered office ]
at 6, Nagin Mahal, 2nd Floor, 82, Veer Nariman ]
Road, Fort, Mumbai - 400 023. ]
4. Samarpan Exotica CHS Limited ]
having its address at Kanakia Spaces, ]
Off Western Express Highway, Borivali (East), ]
Mumbai - 400 066. ]
5. The Western Edge I Premises ]
Co-operative Society Limited ]
A Society registered under the Maharashtra ]
Digitally
signed by
1
SUMEDH
SUMEDH NAMDEO
NAMDEO SONAWANE
SONAWANE Date:
2026.03.18
09:56:23
+0530
::: Uploaded on - 18/03/2026 ::: Downloaded on - 18/03/2026 20:36:55 :::
902-asao-14-2024+doc
Co-operative Societies Act, 1960, ]
having its address at Kanakia Spaces, ]
Off Western Express Highway, ]
Borivali (East), Mumbai - 400 066. ]...Respondents
______________________________________
Mr. Aspi Chinoy, Sr. Adv. a/w. Mr. Nikhil Sakhardande, Sr. Adv.,
Mr. Yash Momaya, Mr. Munaf Virjee, Mr. Rushabh Parekh i/b. AMR
Law for Appellant;
Mr. Mehul Shah a/w Mr. Yatin Kochar, Ms. Nishita Joshi and Ms.
Chaitali Jadhav for Respondent No.1;
Ms. Bhakti Mehta, Ms. Shubadha Khandekar, Ms. Letishiya
Chaturvedi i/b. Wadia Ghandy & Co. for Respondent No.2.
________________________________________
CORAM : KAMAL KHATA, J.
RESERVED ON : 10th February 2026.
PRONOUNCED ON : 17th March, 2026.
JUDGEMENT:
1. This Appeal has been preferred by the Appellant/Original
Defendant No.1 ("the Owner") under Order XLIII Rule 1(r)
challenging the Order dated 30th October 2023 passed by the
Learned Additional Principal Judge, City Civil Court at Dindoshi, in
Notice of Motion No. 2989 of 2022 in S.C. Suit No. 2103 of 2022
("Impugned Order").
2. By the Impugned Order, the Learned Trial Court allowed the
Notice of Motion filed by Respondent No. 1 ("the Society") and has
granted injunction restraining the Appellant-Owner from utilising
any FSI/TDR, creating third-party rights, and or commencing any
construction on the land bearing CTS Nos. 165 and 163A
902-asao-14-2024+doc
admeasuring approximately 31,123 sq. mtrs. at Village Magathane,
Borivali, Mumbai ("Suit Land").
3. The Owner's grievance against the impugned Order is
threefold.
i. The Trial Court has granted sweeping and drastic interim
reliefs which effectively freeze the entire development
potential of the Suit Land, even though the Society has
failed to establish any prima facie case entitling it to the
Owner's reserved and contractually demarcated FSI/TDR
rights.
ii. Second, that the Trial Court has completely overlooked the
express terms of the Development Agreements of 2005 and
2008, as well as the Agreements for Sale executed with the
flat purchasers, which clearly record that development
rights of Respondent No. 2 were restricted to 59,157 sq.
mtrs. FSI/TDR, while the balance FSI/TDR was expressly
reserved to the Owner.
iii. Third, that the Trial Court has failed to consider that the
present suit has been instituted by the Society as a means
to pressurize the Owner to part with additional FSI/TDR,
allegedly required for regularisation of unauthorised
additions and alterations in the Society's own building.
902-asao-14-2024+doc
4. In these circumstances, the principal question that arises in
this Appeal is:
Whether, pending final adjudication of the Suit, an Owner who
has expressly reserved its balance FSI/TDR rights under
Development Agreements - which are incorporated and
acknowledged by the flat purchasers' in their own Agreements for
Sale - can nevertheless be injuncted from dealing with those
reserved rights solely on the basis of the Society's claim that it is
entitled to such balance FSI/TDR under the provisions of the
Maharashtra Ownership Flats Act, 1963 ("MOFA").
FACTS OF THE CASE
5. It is an undisputed fact that the Appellant is an owner of the
land parcels bearing CTS No.165 and 163A totally admeasuring
151,328 sq.mtrs. situated at Village Magathana, Borivali, Mumbai
("Larger Property").
6. By a Development Agreement dated 10th February 2005
between the Owner and the Respondent No.2 ("the Developer"),
read with Supplemental Agreement dated 8th May 2008, Deed of
Rectification dated 5th June 2008, Agreement dated 19th April
2008 executed between the Owner, EIPL (now CCI Projects Pvt.
Ltd.) and Respondent No. 3 ( "Prithvi") and the Agreement dated
30th April 2008 executed between the Developer and Prithvi (the
aforesaid agreements are collectively referred to as "the
902-asao-14-2024+doc
Development Agreement/(s)"), development rights in respect of the
Suit Land were granted to the Developer. Under the said
Development Agreements, the aggregate and final FSI available for
development was fixed and capped at 59,157 sq. mtrs.
7. Pursuant to the development rights so granted, the Developer
constructed three buildings on the relevant portion of the Larger
Property namely Western Edge I, Western Edge II (the building of
the Plaintiff Society), and Samarpan Exotica. It is admitted by all
parties that the entire permissible FSI/TDR of 59,157 sq. mtrs. was
fully consumed in the construction of the said three buildings.
8. Subsequently, Occupation Certificates were issued by the
Mumbai Municipal Corporation (MMC) in respect of the buildings of
Respondents Nos. 4 and 5 on 22nd June 2010, and in respect of the
building of Respondent No. 1 Society on 3rd July 2012. Possession
was thereafter handed over to the flat purchasers, who have been in
occupation and enjoyment of their respective flats since then. The
Respondent No.1 Society was formed on 20th November 2014, and
the flat purchasers thereafter became its members.
9. The Agreements for Sale executed by the Developer with the
flat purchasers expressly recorded that the Developer's
development entitlement was strictly restricted to 59,157 sq. mtrs.
of FSI/TDR under the Development Agreement. They further
clarified that any balance or additional FSI/TDR in respect of the
902-asao-14-2024+doc
land would remain the exclusive property of the Owner, who
retained the unfettered right to utilise the same for development of
other parts of the Larger Property.
10. Matters remained undisputed until 2019-2020, when the
MMC issued notices to the Society and the Developer alleging illegal
additions and alterations in the Western Edge II building, resulting
in excess FSI usage of approximately 4,226 sq. mtrs. beyond the
permissible limit. This excess FSI was attributed to unauthorised
additions and alterations carried out in the building.
11. Following the MMC notices, discussions took place between
the Owner, the Society and the Developer regarding the purchase of
additional FSI/TDR from the Owner to regularise the excess FSI
usage. However, these negotiations failed as the Owner declined to
provide additional FSI/TDR for such regularisation.
12. In September 2021, Society filed a Deemed Conveyance
Application before the Competent Authority under the provisions of
MOFA. The Society also alleged that prior to this, on 9th November
2020, the Owner had subdivided the Suit Land in breach of Section
7 of MOFA.
13. On 22nd March 2022, a Deemed Conveyance Order was
passed in favour of the Society in respect of 8,953.46 sq. mtrs.
However, the order did not attain finality and was subsequently
challenged, resulting in the matter being remanded for
902-asao-14-2024+doc
reconsideration. Thereafter, on 7th June 2022, Society's
application for Deemed Conveyance was rejected by the Competent
Authority.
14. Shortly thereafter, in September 2022, Society instituted S.C.
Suit No. 2103 of 2022 along with Notice of Motion No. 2989 of 2022
seeking interim reliefs.
15. In the meantime, on 31st March 2023, the Owner obtained
permission from the MMC to undertake construction of additional
towers on the Suit Land. The learned Trial Court thereafter passed
the impugned order dated 30th October 2023 allowing the Notice of
Motion.
16. Subsequently, by an order dated 14th November 2025 in
Writ Petition No. 6972 of 2023, this Court set aside the rejection of
Society's Deemed Conveyance Application and remanded the
matter to the Competent Authority for fresh consideration.
17. During the pendency of this Appeal, Society filed SLP (C) Nos.
7401-7402 of 2025 before the Hon'ble Supreme Court challenging
an order of this Court dated 4th February 2025. By order dated
21st March 2025, the Supreme Court directed the parties to
maintain status quo. The SLP was disposed of on 7th May 2025,
with the Supreme Court declining to interfere and observing that
any action taken by the parties would remain subject to further
order of this Court.
902-asao-14-2024+doc
RIVAL SUBMISSIONS
18. Mr. Aspi Chinoy, learned Senior Counsel, appearing for the
Owner, submits that the impugned order, insofar as it restrains the
Owner and its associate company, Respondent No.3, from utilising
the balance FSI /TDR available on the Suit Land of 31,323 sq mtrs.,
is not only contrary to the Society's own pleaded case, but is also
contrary to the settled legal position under MOFA
19. He submits that under the MOFA, the flat purchasers can
assert rights only against the promoter, and not against the
landowner, and in any event cannot claim rights greater than those
held by the promoter.
20. It is further submitted that the Society itself has specific
pleaded that the Developer alone acted as the Promoter, and it is an
admitted position that the Developer was granted rights by the
Owner to utilise only 59,157 sq. mtrs. of FSI / TDR on the Suit land.
Despite this the Trial Court has proceeded on the footing that the
Owner, the Developer, and Respondent No. 3 together constituted
the promoter and developer, and has held that after possession of
the buildings was handed over to Respondent Nos. 1, 4 and 5, the
balance FSI on the Suit land belonged to the Society. According to
the learned Senior Counsel, this finding is wholly contrary to both
the pleadings and the contractual arrangement between the parties.
902-asao-14-2024+doc
21. Learned Senior Counsel submitted that the Trial Court has
granted interim relief without examining the express terms of the
Development Agreements between the Owner and Developer. These
agreements clearly restrict the Developer's rights to 59,157 sq.
mts. of FSI/TDR on the suit land. The Agreements for sale executed
with the Flat Purchasers also record this limitation.
22. Despite these clear contractual provisions, the Trial Court
has granted interim relief in terms of prayers (a) to (c) of the
Notice of Motion, restraining the Owner, the Developer, and
Respondent No. 3 from utilising any FSI/ TDR on the suit land,
creating third party rights, or commencing construction thereon.
23. Learned Senior Counsel further submits that the findings
recorded in the impugned order are beyond the pleadings and the
case made in the Plaint. The Society has never claimed any right
over the entire larger property admeasuring 1,51,328 sq. mtrs., nor
has it challenged the Development Agreements, which expressly
reserve the balance FSI and development rights to the Owner.
24. Even the documents relied upon by the Society show that its
rights are confined only to the specific portion of the land
admeasuring 31,323 sq. mtrs., which was given to the
Developer/Promoter for development. In the absence of any
pleading that the reservation of balance land or FSI is illegal or
contrary to MOFA, the Trial Court could not have assumed that the
902-asao-14-2024+doc
Owners are prohibited from developing the remaining property. The
findings are therefore not supported by the pleadings and are
unrelated to the reliefs sought in the Notice of Motion.
25. Learned Senior Counsel submitted that the legal position
governing the present issue is well settled by the judgments of this
Court in Vaidehi Akash Housing Pvt. Ltd. v. New D.N. Nagar Co-op.
Housing Society Union Ltd.1 and the Division Bench judgment in
Deepak Prabhakar Thakoor v. MHADA2. These judgements hold
that a landowner who merely grants development rights to an
independent developer does not become a "promoter" under MOFA.
26. Where the developer undertakes construction and sale of
flats in its own right and on its own account, the development
cannot be said to have been "caused" by the owner so as to impose
upon the owner the statutory obligations of a promoter. Any
contrary interpretation would blur the distinction between an
owner and a promoter and would impermissibly impose upon
landowners the entire statutory burden under MOFA, which was
never contemplated by the Act.
27. Learned Senior Counsel submits that the Division Bench has
expressly approved and reaffirmed this legal position, and the issue
is no longer open to debate. The principle emerging from these
authorities is that third-party purchasers cannot enlarge their
2014 SCC Online Born 5068
2023 SCC Online Born 2234
902-asao-14-2024+doc
rights by describing a landowner as a promoter, when the
contractual arrangement clearly vests the role of promoter in
another entity. The statutory obligations under MOFA attach only
to the person who undertakes the development and sale in his own
right, and not to a landowner who has merely granted development
rights.
28. Learned Senior Counsel further submits that the
Development Agreements expressly provide that the Developer
would construct and market the premises in its own name and at its
own responsibility, that it would sell the units on a principal-to-
principal basis, and that the sale consideration would belong
absolutely to the Developer. The Agreement thus clearly allocate
the development activity and commercial benefit to the Developer,
while the Owner retained proprietary rights to any balance
FSI/TDR.
29. Learned Senior Counsel also submits that both in the present
Suit and in the deemed conveyance proceedings, the Owner has
specifically disputed and denied Society's claims under the MOFA
Agreements. The Society's application for deemed conveyance was
in fact rejected by the Competent Authority.
30. In these circumstances, there exists a serious dispute
regarding the Society's alleged rights, yet the Society has filed the
present Suit seeking only injunctive relief without any declaratory
902-asao-14-2024+doc
reliefs. It is submitted that, as held by the Supreme Court, in T.V.
Ramakrishna Reddy v. M. Mallappa 3 and K.M. Krishna Reddy v.
Vinod Reddy4 such a Suit for bare injunction in the face of a
disputed title is not maintainable.
31. It is therefore submitted that the Appeal deserves to be
allowed, the Impugned Order be set aside, and the Notice of Motion
be dismissed.
32. Per Contra, Mr. Mehul Shah, learned Advocate appearing for
Society, opposed the Appeal at the outset. According to him, the
core issue is whether a Landowner/Promoter, after disclosure of the
plans in terms of Section 4 of MOFA at the time of sale of units, (ii)
obtaining Occupation Certificate, (iii) handing over possession, and
(iv) allowing statutory period for conveyance to expire, can
subsequently claim rights over additional FSI arising from a change
in law without the informed consent of the flat purchasers ?
33. In his view the answer is emphatically No. According to him,
such a claim is contrary to Sections 4, 7, 10 and 11 of the MOFA
read with rule 9 of the MOFA Rules. In support, he relied upon the
judgment in the case of Ravindra Munteja Vs Bhavan Corporation
and Ors.5, Vithal Patil Vs Kores Ltd.6 And Madhuvihar Co-operative
Housing Society Vs M/s. Jayantilal Investments7. He submitted that
(2021) 13 SCC 135
(2023) 10 SCC 248
2003 (5) Mh. L.J 23
2019 (3) MH. L.J. 857
2010 SCC Online Bom 1519
902-asao-14-2024+doc
the promoter is under a statutory obligation to make full and true
disclosure of the development potential of the plot, at the stage of
layout plan, including whether the plot is capable of being loaded
with additional FSI/TDR, to what extent, and in what manner it is
proposed to be utilised.
34. Learned Counsel submitted that the Appeal proceeds on a
fundamentally erroneous premise that the Owner is merely a
'landowner' and not a 'promoter' under the MOFA. He submitted
that the statutory definition of promoter under Section 2(c) clearly
includes a person who constructs or causes to be constructed a
building for sale. According to him, the Owner executed the
Development Agreement and comprehensive Powers of Attorney,
authorised the Developer to construct and sell flats, obtained all
development permissions in its own name, and received
consideration for the grant of development rights. In these
circumstances, the Owner cannot now disassociate itself from the
project so as to evade the statutory obligations under MOFA.
35. Learned Counsel submitted that the distinction sought to be
drawn between "allowing" and "causing" construction is artificial
and contrary to the scheme of the Act. By granting development
rights, conferring agency powers, and retaining economic interest
in the FSI/TDR, the Owner actively facilitated and enabled the
construction and sale of flats. Reliance was placed on the judgment
902-asao-14-2024+doc
in ALJ Residency Coop. Housing Society Ltd. Vs. State of
Maharashtra8 and the subsequent decision in Laxman Narayan
Zagade & Ors. V. Competent Authority 9, where it was held that an
owner who causes construction and retains rights in the property
falls within the definition of promoter and is bound by statutory
obligations under MOFA, including the obligation to convey the
land.
36. Learned Counsel further submitted that the Owner's
contention that Developer alone is the promoter is contrary to the
Plaint and the record. According to him, the Plaint does not state
that Developer is the only promoter, and in any event the statutory
definition of promoter cannot be limited by the pleadings. Once the
Act includes a person who causes construction within the definition
of promoter, the Owner cannot avoid liability by relying on selective
pleadings.
37. It was also submitted that the judgements relied upon by the
Owner in Vaidehi Akash (supra) and Deepak Prabhakar Thakoor
(supra) is misplaced and distinguishable on facts. According to the
learned Counsel, those cases involved situations where the
landowner had only a passive role or where redevelopment
arrangements were materially different. In the present case,
however, the Owner actively participated in the development,
2024 SCC OnLine Bom 3638
2025 SCC OnLine Bom 768
902-asao-14-2024+doc
retained commercial interest in the balance FSI, and authorised
sale of flats on ownership basis. The Owner therefore falls within the
statutory definition of promoter.
38. Learned Counsel further relied upon subsequent decisions
including Wadhwa Group Holding Pvt. Ltd. Vs Vijay Choksi 10,
Sandeep Grover Vs Sai Siddhi Developers11 and Goregaon Pearl
CHS Ltd. Vs Sandeep Grover12 to submit that absence of privity of
contract does not absolve a person from liability as a promoter.
Where development is undertaken through a power of attorney,
principles of agency apply and the owner acting through such agent
cannot deny responsibility under MOFA.
39. Learned Counsel also relied upon the judgment of this Court
in Jai Jalaram Co-operative Housing Society Ltd. Vs Nanji Khimji
and Co.13 and submitted that the Developer, under clause 6(iv), 6(v)
and 11(a)(xxi) of the Development Agreement, had undertaken to
convey 31,323 sq. mtrs. of land to the Society. Having made such a
representation, the Developer is estopped from denying the
absolute rights under MOFA.
40. It was further submitted that Section 7 of MOFA prohibits
alteration or additional construction after disclosure of plans
without prior consent of flat purchasers. According to the learned
2024 SCC Online BOM 660
2023 SCC Online NCDRC 197
2023 SCC Online SC 1687
2024 SCC Online BOM 491
902-asao-14-2024+doc
Counsel, the layout plan annexed to the Occupation Certificate did
not disclose any further towers or buildings on the open portion of
the land. Any attempt by the Owner to utilise additional FSI for new
construction is therefore contrary to the statutory requirement of
prior informed consent of the flat purchasers.
41. In this context, reliance was placed on the judgment in Neena
Sudarshan Wadia Vs. Venus Enterprises14 (1984) and Dosti
Corporation Vs Sea Flama CHS Ltd.15 where it was held that blanket
or general consent or authority obtained by the promoter is not
valid consent under Section 7 of the MOFA. It was submitted that
clause 7, 8, 27 and 30 for the Agreement for Sale are standard
clauses which amount to blanket consent and therefore cannot be
relied upon by the promoter. According to the learned Counsel, the
Trial Court has aptly recorded that neither the Developer nor the
Owner had shown any additional buildings or towers in the
approved layout plan, and therefore further construction cannot be
undertaken without the Society's consent.
42. Learned Counsel relied upon the principle laid down in Dosti
Corporation (supra) where it was held that post-completion of
construction and once conveyance becomes due, the promoter
cannot appropriate further FSI. According to him, once the project
is completed and possession handed over, any additional FSI arising
1983 SCC OnLine Bom 31
2016 SCC OnLine Bom 1836
902-asao-14-2024+doc
from a change in law or increase in permissible FSI enures to the
benefit of the Society. In the present case, since the promoter has
failed to convey its right, title and interest in the land to the Society
despite completion of project and handing over of possession, the
Society is entitled to any additional FSI arising under DCPR 2034. It
was also contended that clauses 7 to 9, 25 to 27, 30(b) and 34 of the
Agreement for sale are contrary to the scheme of MOFA and
therefore unenforceable.
43. Learned Counsel submitted that the present Suit is
maintainable as it seeks enforcement of statutory obligations and
prevention of breach. Where rights arise under statute and are
supported by registered agreements and occupation certificates, a
suit for simpliciter injunction is maintainable to restrain their
violation. The decisions relied upon by the Owner relating to cloud
over title are therefore inapplicable. It is submitted that the deemed
conveyance proceedings initiated by the Society demonstrate that it
has consistently asserted its statutory rights, and the rejection of
the application is presently under reconsideration pursuant to
orders of this Court. It is contended that pendency of such
proceedings does not create any cloud over title but rather
reinforces the Society's entitlement to statutory protection.
44. It was further submitted that Section 11 of MOFA casts a
mandatory obligation upon the promoter to complete title and
902-asao-14-2024+doc
convey right, title and interest in the land to the society of flat
purchasers. The provision must be interpreted purposively and
harmoniously, to ensure effective transfer of the land and
appurtenant rights forming part of the project, and cannot be
restricted only to such rights as the promoter chooses to
acknowledge.
45. Learned Counsel submitted that Section 16 of MOFA gives
the Act overriding effect over any contract to the contrary.
Therefore, any clause in the Development Agreement or Agreement
for Sale purporting to reserve future or additional FSI without full
and informed disclosure to purchasers is unenforceable as being
contrary to the statutory scheme. Mere recital reserving future FSI
cannot be treated as informed consent under Section 7 of MOFA.
46. It was further submitted that the Owner failed to execute
conveyance within the statutory period and instead sought to
obtain fresh permissions for construction of additional towers. Such
conduct, according to the learned Counsel, defeats the very object of
MOFA and justifies the grant of protective relief. He submitted that
the balance of convenience lies entirely in favour of the Society,
since further construction would permanently affect the Society's
land, open spaces, and FSI entitlement, whereas the Owner owns a
much larger parcel of land and would suffer no irreparable
prejudice if status quo is maintained.
902-asao-14-2024+doc
47. Learned Counsel therefore submitted that the Impugned
Order merely preserves the subject matter of the Suit and prevents
creation of third-party rights during its pendency. According to
him, the Trial Court has correctly exercised its discretion in
accordance with the statutory scheme and judicial precedents and
has correctly restrained the Owner from proceeding with additional
construction without complying with MOFA.
48. It was accordingly submitted that the impugned order is well-
reasoned and calls for no interference, and that the Appeal
deserves to be dismissed with costs.
REJOINDER SUBMISSIONS BY APPELLANT - OWNER
49. Learned Senior Counsel countered that the Respondent
No.1's attempt to describe the Owner as a co-promoter is contrary
to the express terms of the Development Agreements and the
admitted position on record. Under the Agreements, the Developer
was granted a limited right to construct by consuming FSI/TDR up
to 59,157 sq. mtrs. on a defined portion of 31,123 sq. mtrs. The
agreements also expressly provide that the balance and any
additional FSI or TDR would remain with the Owner, with a clear
stipulation that such additional FSI would not be utilised on the said
portion of land but could be used on other parts of the larger
property .
902-asao-14-2024+doc
50. It is submitted that the Development Agreement
unequivocally provided that the Developer would construct and
market the buildings in its own name and at its own responsibility,
sell flats on a principal-to-principal basis, and retain the entire sale
consideration. These provisions, according to the Senior Counsel
negate any suggestion of an agency relationship and demonstrate
that the Developer acted in its own right and not as an agent of the
Owner.
51. Learned Senior Counsel further submitted that the
Respondent's reliance on the Power of Attorney to suggest an
agency relationship is misplaced. The Power of Attorney was
executed only to facilitate approval of plans in the Owner's name,
since the land had not been subdivided. Such procedural
arrangement does not alter the substantive allocation of rights
under the Development Agreements. The MOFA Agreements with
flat purchasers were executed solely by the Developer as
"Promoter" and they expressly record the Developer's limited
entitlement to 59,157 sq. mtrs. of FSI/TDR, while reserving all
additional FSI/TDR in favour of the Owner.
52. It is further submitted that under Section 11 of MOFA, the
promoter is obliged to convey only his right, title and interest in the
land and building. Consequently, the Society cannot claim rights
greater than those held by its promoter. According to the learned
902-asao-14-2024+doc
Senior Counsel, the present case is not one where the promoter
seeks to retain rights contrary to statute, but one where the Society
seeks to enlarge its rights beyond the entitlement of its own
promoter.
53. Learned Senior Counsel also submitted that the Plaint itself
contains a categorical admission that the Developer alone acted as
the Developer and Promoter under MOFA. Such an admission is
binding and conclusive unless withdrawn. Reliance is placed on the
decision of the Supreme Court in Nagindas Ramdas v. Dalpatram
Ichharam16 and the judgement of this Court in Schenker India Pvt.
Ltd. v. SK APS Industries Pvt. Ltd.17, which hold that a party cannot
be permitted to take a stand contrary to its pleadings .
54. It is further submitted that the reliance placed by the
Respondent on Wadhwa Group Holding Pvt. Ltd. (supra) is wholly
misplaced. The case concerned joint promoters who were both
recognised as promoters in statutory documents and were jointly
responsible for the project. In the present case, however, the
contractual framework and statutory documents unequivocally
identify only the Developer as promoter, while the Owner neither
marketed nor sold flats nor received sale consideration.
55. Learned Senior Counsel also contended that the Society's
reliance upon Sandeep Grover to argue that earlier judgments
(1974) 1 SCC 242
2025 SCC Online Bom 2801
902-asao-14-2024+doc
stand impliedly overruled is legally untenable. A decision of the
NCDRC cannot override binding precedents of this Court. In any
event, the factual matrix in that case concerned redevelopment and
appropriation of developer's share, which is entirely distinct from
the present case involving limited development rights with express
reservation of balance FSI.
56. Learned Senior Counsel submitted that the Respondent's
invocation of Section 7 of MOFA is without foundation. The Society
never claimed any right over the entire larger property
admeasuring 1,51,328 sq. mtrs., nor has it challenged the
reservation of balance FSI in favour of the Owner. Section 7 applies
to alterations or additional constructions in respect of the property
disclosed for development, and cannot be extended to independent
development on other parts of the Owner's larger holding.
57. It is further submitted that the observations in the impugned
order regarding alleged non-disclosure of development on the entire
plot and prohibition against additional construction are beyond the
pleadings and unrelated to the reliefs claimed, since the Suit seeks
only injunction and not any declaration that the reservation of FSI
is illegal .
58. Learned Senior Counsel submitted that once the Society's
alleged entitlement to balance or future FSI is expressly denied and
disputed by the Owner, a clear cloud over such alleged right arises.
902-asao-14-2024+doc
In such circumstances, a suit for bare injunction without seeking
declaratory relief is not maintainable. Reliance is placed on the
judgements of the Supreme Court in T.V. Ramakrishna Reddy
(supra) and Ananthula Sudhakar vs P Buchi Reddy 18, which hold
that where title or entitlement is disputed, a declaration must first
be sought.
59. Learned Senior Counsel submitted that the Society's alleged
claim to the additional FSI and TDR is inconsistent with its own
pleadings and categorical admission which acknowledge that the
Appellant is the owner of the larger property and that Developer
alone undertook the development of the Society's building under
MOFA. The claim is also contrary to the express covenants
contained in the Development Agreements and MOFA Agreements,
which unequivocally restrict the Developer's entitlement and
reserve the balance FSI/TDR in favour of Owner. Without seeking
any declaration or adjudication to set aside those binding
contractual clauses, the Society has attempted to circumvent them
by seeking a bare injunction. Such a claim, it is submitted, is ex
facie untenable and amounts to a mala fide attempt to claim
additional FSI/TDR belonging exclusively to Owner. Reliance is
placed on the judgement of the Supreme Court in Kashi Math
Samsthan v. Shrimad Sudhindra Thirtha Swamy 19, wherein it held
(2008) 4 SCC 594
(2010) 1 SCC 689
902-asao-14-2024+doc
that in the absence of a prima facie case, the Court cannot proceed
to examine the balance of convenience or irreparable injury, and
grant injunction.
60. Learned Senior Counsel finally submitted that the Society has
failed to establish irreparable injury or balance of convenience.
Even if the Society were ultimately to succeed, appropriate relief by
way of specific relief, damages or compensation could be granted.
On the other hand, an injunction at this stage would seriously
prejudice the Owner by stalling ongoing construction undertaken
pursuant to duly sanctioned plans, which are based on the balance
FSI/TDR and in respect of which third-party rights have already
been created. The balance of convenience therefore lies decisively
against the grant of any interim relief.
ANALYSIS AND FINDINGS
61. I have carefully considered the submissions advanced by
learned Senior Counsel Mr. Aspi Chinoy appearing for the
Appellant-Owner and learned Advocate Mr. Mehul Shah appearing
for Respondent No.1. I have also perused the pleadings, documents
on record, and the impugned order dated 30th October 2023.
62. The central issue is whether a landowner, despite having
granted only limited development rights to a developer and having
expressly reserved the balance FSI/TDR to itself, can be treated as a
"promoter" within the meaning of Section 2(c) of the MOFA, and
902-asao-14-2024+doc
thereby restrained from utilising the balance FSI/TDR expressly
reserved in its favour.
63. In the present case, it is not in dispute that the Developer,
was granted development rights limited to utilisation of 59,157 sq.
mtrs. of FSI/TDR, which has been fully consumed in constructing
the three buildings namely Western Edge I, Western Edge II and
Samarpan Exotica. The Society now seeks to claim rights in
additional FSI/TDR available on the suit land, particularly in view of
DCPR 2034 introduced in 2018, despite the fact that such
additional FSI/TDR was never part of the development rights
granted to Developer and was expressly reserved to the Owner
under the Development Agreement and the Agreements between
the Developer and the flat purchasers.
64. The following issues therefore arise for consideration:
i. whether the Development Agreements merely granted
limited development rights to Developer or created a
relationship of agency or joint venture making the
Owner a co-promoter;
ii. whether flat purchasers who executed Agreements for
Sale acknowledging the Developer's limited entitlement
can subsequently claim rights in the balance FSI/TDR
reserved to the Owner;
902-asao-14-2024+doc
iii. whether Section 7 of MOFA can restrain the Owner from
undertaking independent development using FSI/TDR
that never formed part of the Developer's entitlement;
iv. whether a suit seeking bare injunction without seeking
declaratory relief regarding the alleged entitlement is
maintainable; and
v. whether the Society has established the ingredients
necessary for grant of interim injunction.
vi. whether the present suit is, in substance, an abuse of
process and a misuse of beneficial legislation.
63. It is first necessary to examine the contractual framework
governing the parties. The Development Agreements clearly
allocate rights and obligations. Developer was granted development
rights in respect of a specific portion of the larger property
admeasuring 31,323 square metres out of the Owner's total
landholding of 151,328 square metres. The FSI/TDR available to
Developer for construction was expressly fixed and capped at
59,157 square metres. This is clearly recorded in Clause 3 of the
Development Agreement and in the recitals of the subsequent
agreements.
64. Under Clauses 11(a)(xviii), 11(a)(xx), 11(a)(xxi), and 13(e)
of the Development Agreement, Developer was authorised to sell
the constructed flats or units on ownership basis under MOFA and
902-asao-14-2024+doc
to undertake all incidental acts necessary for that purpose. Clause
23(f) of the Development Agreement dated 10th February 2005
expressly states that Developer would develop, market, and sell the
units at its own risk and responsibility, and that the agreement
would not be construed as a partnership or joint venture. The sale
consideration received from flat purchasers was to belong
absolutely to Developer and constitute its remuneration and profit.
These clauses make it clear that Developer acted in its own right
and for its own account as an independent developer, and not as an
agent or partner of the Owner.
65. Further, Clause 4(c) of the Development Agreement read
with the supplemental agreement expressly provided that any
FSI/TDR available on the suit land in excess of 59,157 square
metres would remain the exclusive property of the Owner. It was
also specifically provided that such balance FSI/TDR would not be
consumed on the portion of the suit land on which Developer was to
construct its buildings, but could be utilised elsewhere on the larger
property. This reservation was neither vague nor uncertain. It was
specific and quantified.
66. The Society relied heavily on the fact that Powers of Attorney
were executed by the Owner in favour of Developer, contending that
this established an agency relationship and thereby made the
Owner a co-promoter. I am unable to accept this submission. The
902-asao-14-2024+doc
Powers of Attorney were executed only as a procedural necessity to
enable Developer to obtain statutory approvals in the name of the
Owner, since the suit land had not been subdivided from the larger
property and permissions therefore had to be obtained in the name
of the owner.
67. The execution of such Powers of Attorney for a limited
purpose does not, by itself, convert Developer into the Owner's
agent for all purposes, nor does it alter the substantive allocation of
rights, risks, costs, and profits under the Development Agreement.
68. It is well settled that the nature of the relationship between
parties must be determined from the substance of the arrangement
and not merely from its form. In deciding whether the relationship
is one of agency or that of an independent contractor, the Court
must examine who bears the risk and cost of the activity, who is
entitled to the profits, who controls day-to-day operations, and who
is liable to third parties. Tested on these parameters, Developer was
plainly an independent developer. It bore the entire cost and risk of
construction, received the entire sale consideration, controlled the
construction and marketing activities, and undertook liability to flat
purchasers under the Agreements for Sale. The Owner did not
participate in any of these activities and exercised no control over
them.
902-asao-14-2024+doc
69. The Agreements for Sale executed by Developer with the flat
purchasers of Respondent Nos.1, 4 and 5, copies of which are on
record, expressly set out the Developer's right, title and interest in
the suit land as flowing from the Development Agreement. They
specifically record that Developer's development entitlement was
limited to 59,157 square metres and that any balance or additional
FSI/TDR on the suit land remained the exclusive property of the
Owner. These are substantive terms defining the extent of what was
being sold to the purchasers. Clauses 7, 8, 9, 25, 26, 27, 30(b), and
34 of the Agreements for Sale shall be referred.
70. More importantly, the Agreements for Sale record that the
purchasers had inspected the layout plans, the Development
Agreement, the Supplementary Development Agreement, and the
other relevant documents, and had satisfied themselves regarding
the Developer's entitlement and the rights reserved to the Owner.
The purchasers thus accepted the arrangement with full knowledge.
This is not a case where material facts were concealed or where
vague standard clauses were inserted without disclosure. The
purchasers were specifically informed that Developer's entitlement
was limited to 59,157 square metres of FSI/TDR, that such
entitlement stood exhausted in the three buildings, and that any
additional FSI/TDR remained with the Owner.
902-asao-14-2024+doc
71. Read as a whole, these documents establish a clear factual
position: the Owner granted limited development rights to
Developer; Developer was entitled to use only 59,157 square metres
of FSI/TDR for constructing buildings on a part of the suit land;
Developer acted in its own right and not as agent of the Owner; the
balance FSI/TDR was expressly reserved to the Owner; and the flat
purchasers were aware of and accepted this arrangement at the
time of purchase.
72. The Society's principal contention is that the Owner falls
within the definition of "promoter" under Section 2(c) of MOFA
because it "caused to be constructed" the buildings by granting
development rights to Developer. According to the Society, the
grant of development rights, execution of Powers of Attorney,
obtaining permissions in the Owner's name, and receipt of
consideration together establish that the Owner "caused" the
construction. It is then argued that, once so held, the Owner
becomes subject to all obligations of a promoter, including the
obligation to convey the land and building to the Society under
Section 11, together with the balance FSI/TDR.
73. Section 2(c) of MOFA defines "promoter" as follows:
"a person and includes a partnership firm or a body or
association of persons whether registered or not, who
constructs or causes to be constructed a block or building
of flats or apartments for the purpose of selling some or all
of them to other persons, or to a company, co-operative
902-asao-14-2024+doc
society or other association of persons, and includes his
assignees; and where the person who builds and the person
who sells are different persons, the term includes both."
The expression "causes to be constructed" cannot be read so
broadly as to include every landowner who grants development
rights to an independent developer. Such an interpretation would
obliterate the distinction between an 'owner' and a 'promoter'. The
definition indicates that the person must either undertake the
construction activity or undertake the sale or transfer of flats.
74. The question, therefore, is what amounts to "causing
construction" within the meaning of Section 2(c). Every act that
facilitates construction cannot amount to causing construction.
Otherwise, financiers, suppliers, landowners, and statutory
authorities granting approvals would all become promoters. That
would lead to absurd consequences. The expression must therefore
mean something more, namely, active participation, control, or
entrepreneurial involvement in the construction activity.
75. In the present case, the Development Agreements show that
Developer alone undertook the construction and sale of flats. It
obtained approvals, carried out construction at its own cost and
risk, marketed the flats, executed the Agreements for Sale, and
received the sale proceeds. The Owner did not undertake any of
these acts since the Owner had received consideration for granting
development rights to the Developer. Its role was confined to
902-asao-14-2024+doc
granting limited development rights over a part of its land, subject
to the condition that only a specified quantum of FSI/TDR would be
consumed and that the balance would remain reserved to it. This
does not amount to "causing construction" within the meaning of
Section 2(c).
76. Learned Senior Counsel for the Owner relied upon the
judgment of this Court in Vaidehi Akash Housing Pvt. Ltd. and the
later decision in Deepak Thakoor, which followed it, in support of
the submission that a landowner who grants limited development
rights to an independent developer does not become a promoter
under MOFA.
77. In Vaidehi Akash Housing Pvt. Ltd., a co-operative housing
society had entered into a redevelopment agreement with a
developer. The developer was to reconstruct the society's building,
rehabilitate existing members, and sell additional flats to outsiders.
The free-sale purchasers sought to hold the society liable as a
promoter under MOFA. The society contended that it was only the
landowner and that the developer alone was the promoter. This
Court accepted that contention and held that the society was not a
promoter.
78. The Court held that the society had neither undertaken any
construction activity nor sold any flats to purchasers. Its role was
confined to granting development rights and receiving
902-asao-14-2024+doc
consideration in the form of rehabilitation for its members. The
Court observed:
"88. The Society is the owner of the property and has
entered into an agreement with the developers... Such
authority or entitlement is to the developers' account and in
their own right and as an independent contractor. If in
exercise of such authority or entitlement, a building is
constructed by the developers, it cannot be said that such
building is caused to be constructed by the Society within
the meaning of Section 2(c) of the MOFA.
89. Any other interpretation would lead to anomalous
consequences... The owners of lands entering into
agreements for sale or development agreements with
promoters/developers would be held as being subject to all
liabilities of a promoter... This would be plainly
inconceivable.
90. Prima facie thus, there is no case to treat the Society,
who is merely in the position of an owner vis-a-vis the third
party purchasers, as a 'promoter' within the meaning of
MOFA..."
79. The Society attempted to distinguish Vaidehi Akash on the
ground that the landowner there was a housing society acting only
to rehabilitate its members, whereas the Owner is a commercial
entity retaining an economic interest in the balance FSI/TDR. I do
not find this distinction material. Whether a person is a promoter
under Section 2(c) depends on whether that person undertook or
caused construction and sold flats, not on whether the person is a
society or a commercial entity, nor on whether the person reserved
rights for future use. In the present case, as in Vaidehi Akash, the
Owner neither carried out construction nor sold flats. Those acts
902-asao-14-2024+doc
were undertaken by Developer in its own right. The Owner's
commercial character and reservation of balance FSI/TDR do not
alter that position.
80. The Society also submitted that Vaidehi Akash and Deepak
Thakoor were only interim observations and therefore not binding.
This submission cannot be accepted. Vaidehi Akash contains a
detailed analysis of Section 2(c) and the facts before the Court. It
has been consistently followed by coordinate Benches. In the
absence of any contrary judgment of a coordinate or larger Bench, it
cannot be brushed aside in the manner suggested.
81. The Society placed reliance on the decision of the National
Consumer Disputes Redressal Commission in Sandeep Grover and
on the dismissal of the Special Leave Petition in Goregaon Pearl CHS
Ltd., contending that the Supreme Court's order affirms the
NCDRC's reasoning and overrides Vaidehi Akash and Deepak
Thakoor. This contention is misconceived.
82. First, Sandeep Grover is a decision of the NCDRC in
proceedings under the Consumer Protection Act. The NCDRC is a
statutory tribunal. Its decisions may have persuasive value, but
they are not binding precedents for this Court under Article 141.
83. Second, the factual matrix in Sandeep Grover was materially
different. That case arose out of a redevelopment arrangement
involving a landowner society and a developer, and the
902-asao-14-2024+doc
observations were made in that specific context. It does not lay
down any general principle that every landowner who grants
development rights becomes a promoter under MOFA.
84. Third, the NCDRC itself referred to Vaidehi Akash and did not
hold it to be wrongly decided. At the highest, it distinguished that
case on facts.
85. Fourth, the Society's reliance on the doctrine of merger based
on dismissal of the Special Leave Petition is contrary to settled law.
In Kunhayammed v. State of Kerala20, the Supreme Court has
clearly held that dismissal of a Special Leave Petition without
granting leave does not attract the doctrine of merger and does not
amount to affirmation of the reasoning in the impugned order.
Unless leave is granted and the appeal is heard, there is no merger.
86. The Society also relied on recent decisions in ALJ Residency
Co-operative Housing Society Ltd. and Laxman Narayan Zagade.
Those judgments arose in specific contexts such as deemed
conveyance or regularisation of unauthorised construction. Their
observations must be read in that factual setting. They cannot be
construed as overruling or diluting the principles laid down in
Vaidehi Akash and Deepak Thakoor.
87. Reliance on Wadhwa Group Holding Pvt. Ltd. is equally
misplaced. That case arose under RERA and involved parties
admittedly registered as promoters. The issue there was whether
(2000) 6 SCC 359
902-asao-14-2024+doc
one such promoter could avoid liability merely for want of privity
with the flat purchaser. Here, the Owner neither participated in the
development or sale activity nor stood identified as a promoter in
any statutory document. It merely granted limited rights while
reserving the balance to itself. The ratio of Wadhwa Group therefore
does not assist the Society.
88. Similarly, Jai Jalaram Co-operative Housing Society Ltd.
turned on its own facts, where the developer had expressly
undertaken to convey the entire land and was then estopped from
resiling. In the present case, there is no such undertaking by the
Owner. On the contrary, the Development Agreement and the
Agreements for Sale expressly limit Developer's rights to 59,157
square metres and reserve the balance FSI/TDR to the Owner. No
case of estoppel arises.
89. In view of the definition of "promoter" under Section 2(c), the
contractual documents, and the authorities discussed above, the
Owner cannot be characterised as a promoter under MOFA. The
statutory obligations under MOFA, including the obligation to
execute conveyance under Section 11, attach to Developer and not
to the Owner. The Society's primary contention that the Owner is a
co-promoter must therefore fail.
90. The reliance of the Society on Ravindra Munteja (supra),
Vithal Patil (supra) and Madhuvihar Co-operative Housing Society
902-asao-14-2024+doc
(supra) is also misplaced. It is not the Society's case that it is
entitled to rights over the entire larger property admeasuring
151,328 square meters. In view of the Development Agreements
and the Agreements for Sale, it is an admitted fact that the
Developer was entitled to develop only 31,323 square meters out of
the Appellant's total landholding and to consume FSI/TDR of only
59,157 square meters, with the balance FSI/TDR being expressly
reserved to the Appellant. The Developer, in accordance with
Section 4 of the Maharashtra Ownership Flats Act, had duly
disclosed the layout plans pertaining to the land admeasuring
31,323 square meters on which the three buildings were to be
constructed. The provisions of the Act do not obligate the promoter
or landowner to disclose layout plans for land or FSI/TDR over
which the promoter has no right, title or interest and which was
expressly reserved to the landowner. The disclosure obligation
extends only to the project that the promoter is undertaking and
not to any future development that the landowner may undertake
using reserved development rights. It is also not the Society's case
that the development proposed by the Appellant using the reserved
FSI/TDR in any manner encroaches upon or affects the Society's
rights or entitlement to conveyance of its building and
proportionate land area.
902-asao-14-2024+doc
91. The Society then argued, in the alternative, that even if the
Owner is not a promoter, the clauses reserving balance FSI/TDR to
the Owner are invalid as they amount to "blanket consent" contrary
to Section 7 of MOFA. Reliance was placed on Neena Sudarshan
Wadia and Dosti Corporation.
92. Section 7 of MOFA provides:
"After the plans and specifications of the building as approved
by the local authority... are disclosed or furnished to the
persons who agree 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... without the previous consent of that
persons;
(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."
The object of this provision is to protect flat purchasers from
unilateral changes by a promoter to the disclosed plan.
93. In Neena Sudarshan Wadia, the Court held that a general
clause in an agreement for sale could not amount to valid consent
for future additional construction unless the purchasers were
specifically informed of what was proposed. In Dosti Corporation,
the Court held that after completion of the disclosed project and
handing over of possession, the promoter could not rely on broad
contractual clauses to exploit additional FSI that had become
available later.
902-asao-14-2024+doc
94. Those decisions do not assist the Society. In both those cases,
the promoter sought to retain or exploit future or additional FSI
without clear and specific disclosure to the purchasers. Here, the
position is altogether different.
95. In the present case, the reservation of balance FSI/TDR was
not by the promoter, Developer, but by the landowner, namely the
Owner, who is not a promoter. More importantly, the reservation
was clearly, specifically, and quantifiably disclosed to the
purchasers at the time of sale. The Agreements for Sale record that
Developer's entitlement was limited to 59,157 square metres, that
the same stood exhausted in the three buildings, and that any
balance or additional FSI/TDR remained the exclusive property of
the Owner. These are specific disclosures and not vague blanket
clauses. The relevant clauses from the Development Agreement and
the Sale Agreements are reproduced hereunder for ready reference:
i. Clause 4(c) of the Development Agreement dated 10th
February 2005, executed between the Appellant Owner
and the Developer:
"(c) Subject to sub-clause (b) above, all additional Floor
Space or TDR that may become available in respect of
the property to be Developed shall belong to and vest
with the Owner who alone shall be entitled to deal with
the same, as it may so desire but, in any event, the
Owner shall not be allowed to use the same on the
Property to be Developed or any part thereof."
902-asao-14-2024+doc
ii. Clause 30 from Agreement For Sale dated 11th May
2012, executed between the Developer and a Unit/office
Purchaser:
"Kanakia has further represented to the Purchaser that
in the Supplemental DA and the Prithvi Kanakia
Agreement, Kanakia has covenanted with CCI/Prithvi
that the following covenants ("the Fundamental
Covenants") shall run with the Property to be Developed
and be binding on the Kanakia, its successors and
assigns and all those owning the Property to be
Developed:
a) Kanakia shall not be entitled to develop and/or
construct on the Property to be Developed beyond
59,157 sq. meters equivalent to 6,36,767 sq. feet
(inclusive of outside TDR to be purchased by
Kanakia and TDR permitted to be load under the
Prithvi-Kanakia Agreement)
b) All Floor Space Index or TDR that may become
available in respect of the Property to be Developed
on account of change in law or regulations or
otherwise shall belong to and vest with Prithvi or its
successors or assigns who shall be entitled to deal
with the same, as it may so desire but in any event.
Prithvi shall not be allowed to use the same on the
Property to be developed or any part thereof.
c) There shall be no sub division of the Property to be
developed from the Larger Property.
d) .....
e) ....."
96. The Agreements for Sale also record that the purchasers
inspected the relevant documents and accepted the arrangement.
This is therefore not a case where the purchasers were kept in the
dark.
97. The principle against blanket consent is aimed at preventing
a promoter from defeating the purchasers' legitimate expectation of
902-asao-14-2024+doc
receiving conveyance of the land and building forming part of the
disclosed project. In the present case, the Society is not being
denied what it bargained for. Developer remains obliged to convey
the building and the proportionate land pertaining to it. What the
Society seeks is something more, namely rights in FSI/TDR that
never formed part of the Developer's entitlement and which its
members knew were reserved to the Owner.
98. The Society also invoked Section 16 of MOFA, which gives
overriding effect to the Act. That provision prevents promoters
from contracting out of their statutory obligations. It does not
prevent a landowner from limiting the rights granted to a developer
or from reserving rights never granted. There is no contracting out
of MOFA here. Developer remains bound by all obligations cast upon
a promoter. Section 16 does not assist the Society in enlarging its
rights beyond the Developer's entitlement.
99. The principle of nemo dat quod non habet squarely applies.
No one can transfer a better title than he possesses. Developer was
granted rights only to use 59,157 square metres of FSI/TDR. It
never had any right in the balance FSI/TDR. It could not, therefore,
pass any such right to the flat purchasers or the Society.
100. I therefore hold that the contractual provisions limiting
Developer's rights to 59,157 square metres and reserving the
balance FSI/TDR to the Owner are valid and enforceable and are not
902-asao-14-2024+doc
contrary to MOFA. The flat purchasers entered into the Agreements
for Sale with full knowledge of these terms and cannot now contend
otherwise.
101. The Society next invoked Section 7 of MOFA to contend that
the Owner cannot undertake additional construction on the suit
land without prior consent of the flat purchasers. According to the
Society, since the layout plan annexed to the Occupation Certificate
dated 3rd July 2012 did not show additional buildings on the open
portion of the suit land, any subsequent construction amounts to an
alteration or addition to the approved plan.
102. This submission cannot be accepted. Section 7 imposes
obligations upon a "promoter". Since the Owner is not a promoter,
Section 7 cannot be invoked against it.
103. Even otherwise, Section 7 applies only to additions or
alterations in the approved plan disclosed by the promoter to the
flat purchasers under Section 4. It does not apply to every future
development on the larger property or even on the suit land, if such
development never formed part of the promoter's project.
104. In the present case, the approved plan disclosed by Developer
related to the three buildings to be constructed using the allocated
59,157 square metres of FSI/TDR. Those buildings have been
constructed accordingly. Developer has not sought to alter them or
the plan relating to them.
902-asao-14-2024+doc
105. What the Owner now proposes is independent development
by using the balance FSI/TDR always reserved to it. This is not an
addition or alteration to Developer's project. It was never part of
the plan disclosed by Developer to the purchasers.
106. The Society's interpretation would lead to untenable
consequences. It would mean that once a landowner permits one
phase of development on a part of its land, it is forever barred from
undertaking any future development on the adjoining land, even
using FSI/TDR that was never granted to the developer and always
remained reserved to the owner. Section 7 cannot be read so
broadly.
107. MOFA is a protective statute meant to safeguard flat
purchasers against promoters who suppress material facts, alter
disclosed plans, or fail to convey title. It is not meant to confer upon
flat purchasers rights over land and FSI/TDR that never formed
part of their bargain. The Act entitles them to what they agreed to
purchase, not to more.
108. Significantly, the Society has never pleaded that it is entitled
to the entire larger property of 151,328 square metres, or even to
the entire suit land of 31,323 square metres. Its rights, on its own
case, are confined to its building and the proportionate land
corresponding thereto. It cannot, by invoking Section 7, claim a
902-asao-14-2024+doc
veto over development on land that never formed part of its
entitlement.
109. The learned Trial Judge appears to have been influenced by
the fact that the layout plan annexed to the Occupation Certificate
of 3rd July 2012 did not show any future towers. That approach
confuses the layout relating to Developer's completed project with
future development by the Owner. Developer was under no
obligation to disclose in its layout plan development that did not
form part of its own project and which related to FSI/TDR reserved
to the Owner.
110. I therefore hold that Section 7 of MOFA has no application to
the Owner's proposed development.
111. The reliance on Dosti Corporation is also misplaced. That
decision restrains a promoter from exploiting additional FSI
accruing to the land forming part of its own project after
completion. Here, the Owner is not a promoter, and the FSI/TDR
sought to be utilised by it was never part of Developer's entitlement.
It was always reserved to the Owner. To apply Dosti Corporation to
these facts would be to extend its ratio far beyond its proper limits.
112. The Society further argued that failure to execute
conveyance within the statutory period should disentitle the Owner
from exercising its reserved development rights. This contention is
wholly misconceived. The obligation under Section 11 is upon the
902-asao-14-2024+doc
promoter. In the present case, that promoter is Developer. If the
Society is aggrieved by failure to execute conveyance, its remedy
lies against Developer, including by resort to deemed conveyance
proceedings, which it has in fact invoked. The Owner cannot be
deprived of its proprietary rights on account of any default by
Developer.
113. Having dealt with the merits, it is now necessary to consider
the Owner's objection to the maintainability of the suit itself. The
Owner has contended that the Society, despite claiming rights in the
balance FSI/TDR which are expressly denied by the Owner and
contradicted by the contractual documents, has not sought any
declaratory relief and has filed only a suit for injunction. Reliance is
placed on the judgments of the Supreme Court in T.V. Ramakrishna
Reddy and K.M. Krishna Reddy.
114. In T.V. Ramakrishna Reddy, the Supreme Court held that
when there is a serious dispute as to title or right, a suit for bare
injunction without seeking declaration is not maintainable. The
same principle was reiterated in K.M. Krishna Reddy. Injunction is
a remedy to protect an established right. Where the right itself is
under a cloud, the plaintiff must first seek and obtain a declaration.
115. This principle applies squarely here. The Society claims
entitlement to the balance FSI/TDR on the footing that the Owner is
a promoter, that the contractual reservations are invalid, and that
902-asao-14-2024+doc
MOFA requires such rights to be conveyed to the Society. The
Owner categorically denies all of this. The dispute is fundamental
and goes to the existence and extent of the Society's alleged rights.
116. Yet the Society has consciously chosen not to seek any
declaration. There is no prayer that the clauses reserving balance
FSI/TDR to the Owner are invalid. There is no prayer that the
Society is entitled to such FSI/TDR. There is no prayer that the
Owner is a promoter. There is no prayer that the Owner must
convey such rights to the Society. The suit only seeks injunctions
restraining the Owner from using the FSI/TDR or developing the
land.
117. This omission is plainly deliberate. If declaratory relief had
been sought, the Society would have had to directly confront the
express contractual terms, the purchasers' acknowledgments, and
the authorities binding this Court. By filing only a suit for
injunction, the Society seeks to avoid adjudication of the core issue
while securing interim orders to stall the Owner's development.
118. Such a course is impermissible. Where the plaintiff's right is
itself disputed and clouded, a bare suit for injunction is not
maintainable. The Society's alleged entitlement is expressly
contradicted by the very documents placed on record. In such
circumstances, the suit as framed is ex facie not maintainable.
902-asao-14-2024+doc
119. Even assuming, for the sake of argument, that the suit were
maintainable, the Society has still failed to make out a case for
interim relief. It is settled that a plaintiff seeking interim injunction
must establish a prima facie case, balance of convenience, and
irreparable injury.
120. As held by the Supreme Court in Kashi Math Samsthan v.
Shrimad Sudhindra Thirtha Swamy , unless a prima facie case is
shown, the Court need not examine the other two ingredients.
121. In the present case, the Society has failed to establish even an
arguable case. Its claim to the balance FSI/TDR is directly
contradicted by the contractual documents, the purchasers'
acknowledgments, and the legal position discussed above.
122. The balance of convenience lies entirely in favour of the
Owner. The Owner owns the larger property, has reserved the
relevant FSI/TDR, and has obtained the necessary approvals for
development. Restraining it from proceeding would seriously
prejudice its proprietary and development rights.
123. On the other hand, the Society suffers no corresponding
prejudice if injunction is refused. Its rights, if any, relate only to its
own building and the proportionate land appurtenant thereto.
Those rights are not affected by the Owner's independent
development on the basis of its reserved FSI/TDR.
902-asao-14-2024+doc
124. As to irreparable injury, the greater prejudice is clearly to
the Owner. If restrained for years and it ultimately succeeds, the
lost opportunity to develop and exploit its property cannot be
adequately compensated. By contrast, if the Society ultimately
establishes any entitlement, appropriate relief, including monetary
compensation or equivalent adjustment, can always be fashioned.
125. Thus, even on the hypothesis that the suit were maintainable,
no ground for interim injunction was made out. The Society has
failed on all three tests.
126. The Society attempted to distinguish the Supreme Court
decisions by contending that it seeks enforcement of statutory
rights under MOFA and that therefore no declaration is necessary. I
am unable to agree. Merely labelling a claimed right as statutory
does not eliminate the need for a declaration where that right is
disputed. Here, the very existence, nature, and scope of the alleged
statutory right are in dispute. Declaratory relief was therefore
essential.
127. Nor does the pendency of deemed conveyance proceedings
cure this defect. Those proceedings concern conveyance of the land
and building pertaining to the Society's project from the promoter,
Developer. They do not determine whether the Society is entitled to
balance FSI/TDR reserved to the Owner, nor whether the Owner is a
promoter.
902-asao-14-2024+doc
128. I therefore hold that the suit, as framed, is not maintainable
in law. Without seeking a declaration regarding the invalidity of the
contractual provisions or regarding its alleged entitlement to the
balance FSI/TDR, the Society cannot directly seek an injunction
restraining the Owner from exercising rights expressly reserved to
it.
129. Order VII Rule 11(d) CPC provides that a plaint shall be
rejected where the suit appears from the statements in the plaint to
be barred by law. A suit for bare injunction, where the plaintiff's
title or right is under a cloud and no declaration is sought, is barred
by the principles laid down in T.V. Ramakrishna Reddy and K.M.
Krishna Reddy.
130. In Patil Automation Private Limited v. Rakheja Engineers
Private Limited21, the Supreme Court held that the Court may reject
a plaint under Order VII Rule 11 even in the absence of a formal
application, if on a meaningful reading of the plaint the suit is found
to be barred or manifestly meritless.
131. In Shri Mukund Bhavan Trust v. Shrimant Chhatrapati
Udayanraje Pratapsinh Maharaj Bhonsle22, the Hon'ble Supreme
Court emphasised that the purpose of Order VII Rule 11(d) of the
Code of Civil Procedure is to enable the Court to nip in the bud any
litigation which, on the face of it, amounts to an abuse of the process
(2022) 10 SCC 1
(2024) 15 SCC 675
902-asao-14-2024+doc
of law. If the Court fails to exercise this power at the threshold, it
would unnecessarily compel the defendants to undergo the ordeal of
a full trial and lead evidence in proceedings which are ex facie not
maintainable.
132. In the present case, it is apparent from the plaint itself that
the Society claims rights in the balance FSI/TDR contrary to the
contractual documents, yet seeks no declaration. The suit directly
seeks to restrain the Owner from exercising its reserved rights. In
my view, this is a fit case to exercise suo motu powers under Order
VII Rule 11(d) read with Section 151 CPC.
133. It is also necessary to note the real genesis of the suit. The
project was completed in 2012. Occupation Certificates were issued,
possession was handed over, and the societies were formed between
2014 and 2015. For nearly seven years, no issue was raised
regarding the Owner's reserved development rights.
134. It was only after notices were issued by the MCGM in 2019-
2020 regarding unauthorised additions and excess consumption of
approximately 4,226 square metres of FSI in the Society's building
that matters changed. Thereafter, negotiations took place between
the Owner, the Society, and Developer for purchase of additional
FSI/TDR from the Owner so as to regularise these violations. Those
negotiations failed.
902-asao-14-2024+doc
135. It was only thereafter that the Society filed an application for
deemed conveyance in September 2021 and then instituted the
present suit in September 2022 seeking to restrain the Owner from
using the balance FSI/TDR. The sequence is revealing.
136. It strongly indicates that the suit was not filed out of any
genuine concern to protect statutory rights under MOFA, but as a
pressure tactic to compel the Owner to part with its reserved
FSI/TDR for regularisation of the Society's own unauthorised
construction.
137. This is an abuse of the process of the Court and a misuse of
beneficial legislation. MOFA, enacted to protect flat purchasers from
unscrupulous promoters, cannot be turned into a weapon to
appropriate the landowner's reserved rights.
138. In that backdrop, rejection of the plaint is not merely a
technical consequence of defective framing. It is necessary to
prevent the continuation of vexatious litigation designed to
frustrate the legitimate exercise of the Owner's proprietary rights.
139. For all the reasons discussed above, the impugned order
dated 30th October 2023 passed by the learned Additional Principal
Judge, City Civil Court, Dindoshi in Notice of Motion No. 2989 of
2022 in S.C. Suit No. 2103 of 2022 cannot be sustained and
deserves to be set aside.
902-asao-14-2024+doc
140. In the circumstances, it is necessary to exercise suo motu
powers under Order VII Rule 11(d) read with Section 151 CPC to
reject the plaint.
ORDER
i. The suit, as framed, is not maintainable and is barred by
law.
ii. The Appeal accordingly succeeds and is allowed.
iii. The impugned order dated 30th October 2023 passed by
the learned Additional Principal Judge, City Civil Court,
Dindoshi in Notice of Motion No. 2989 of 2022 in S.C.
Suit No. 2103 of 2022 is quashed and set aside.
iv. In exercise of powers under Order VII Rule 11(d) read
with Section 151 CPC, the plaint in S.C. Suit No. 2103 of
2022 is rejected.
v. The suit stands dismissed.
vi. The Respondent No.1 shall pay the Owner - Appellant
costs of ₹ 10,00,000/- within a period of four weeks
from the date of this Order.
vii. In view of the above order, the Interim Application
stands disposed off.
(Kamal Khata, J)
902-asao-14-2024+doc
LIST OF JUDGMENTS RELIED UPON:
(i) Vaidehi Akash Housing Pvt. Ltd. Vs New D.N. Nagar Co-op. Housing Society
Union Ltd. [2014 SCC Online Born 5068]
(ii) Deepak Prabhakar Thakoor Vs MHADA [2023 SCC Online Born 2234]
(iii) T.V. Ramakrishna Reddy Vs M. Mallappa [(2021) 13 SCC 135]
(iv) K.M. Krishna Reddy Vs Vinod Reddy [(2023) 10 SCC 248]
(v) Ravindra Munteja Vs Bhavan Corporation and Ors. [2003 (5) Mh. L.J 23]
(vi) Vithal Patil Vs Kores Ltd. [2019 (3) MH. L.J. 857]
(vii) Madhuvihar Co-operative Housing Sociey Vs M/s. Jayantilal Investments
[2010 SCC Online Bom 1519]
(viii) ALJ Residency Co-operative Housing Society Ltd. Vs State of Maharashtra
[2024 SCC OnLine Bom 3638]
(ix) Laxman Narayan Zagade & Ors. Vs Competent Authority [2025 SCC OnLine
Bom 768]
(x) Wadhwa Group Holding Pvt. Ltd. Vs Vijay Choksi [2024 SCC Online BOM
660]
(xi) Sandeep Grover Vs Sai Siddhi Developers [2023 SCC Online NCDRC 197]
(xii) Goregaon Pearl CHS Ltd. Vs Sandeep Grover [2023 SCC Online SC 1687]
(xiii) Jai Jalaram Co-operative Housing Society Ltd. Vs Nanji Khimji and Co.
(xiv) Neena Sudarshan Wadia Vs Venus Enterprises [1983 SCC OnLine Bom 31]
(xv) Dosti Corporation Vs Sea Flama CHS Ltd. [2016 SCC OnLine Bom 1836]
(xvi) Nagindas Ramdas Vs Dalpatram Ichharam [(1974) 1 SCC 242]
(xvii) Schenker India Pvt. Ltd. Vs SK APS Industries Pvt. Ltd. [2025 SCC Online
Bom 2801]
(xviii) Ananthula Sudhakar vs P Buchi Reddy (2008) 4 SCC 594
(xix) Kashi Math Samsthan Vs Shrimad Sudhindra Thirtha Swamy [(2010) 1 SCC
689]
(xx) Kunhayammed & Ors. Vs State of Kerala [(2000) 6 SCC 359]
(xxi) Patil Automation Private Limited Vs Rakheja Engineers Private Limited
[(2022) 10 SCC 1]
(xxii) Shri Mukund Bhavan Trust v. Shrimant Chhatrapati Udayanraje Pratapsinh
Maharaj Bhonsle [(2024) 15 SCC 675].
