Bombay High Court
Shahed Kamal And 97 Ors vs Pagarani Universal Infrastructure Pvt ... on 25 November, 2020
Author: A. K. Menon
Bench: A. K. Menon
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INTERIM APPLICATION (LODGING) NO.3986 OF 2020
ALONG WITH
NOTICE OF MOTION NO.1358 OF 2019
IN
SUIT NO.610 OF 2019
Shahed Kamal & Ors. .. Applicants-Plaintiffs
Vs.
Pagarani Universal Infrastructure Pvt. Ltd. & Ors. .. Defendants
Dr. Abhinav Chandrachud, with Mr. Ajay Panicker, i/by Ajay Law Associates,
for the Applicants-Original Plaintiffs.
Mr. J.P. Sen, Sr. Advocate a/w Mr. Y.K.Tiwari i/b for Defendant Nos.1 to 7.
Mr. Abhijit Kulkarni a/w Mr.Askhay Shinde for Defendant No.8.
CORAM : A. K. MENON, J.
DATED : 25TH NOVEMBER, 2020.
(THROUGH VIDEO CONFERENCE) P.C. :
1. By this common order, the above Notice of Motion and Interim Application are being disposed. The plaintiffs are 98 in number, 97 of whom are purchasers of flats in a building known as "Universal Garden-1". Plaintiff no.98 is Universal Garden-1 Flat Owners' Welfare Association, a society registered under the Societies Registration Act, 1860. Defendant no.1 is a 1/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit private limited company, which has developed the suit plot, upon which the aforesaid building has been put up. Defendants 2 to 7 are Directors and Shareholders of the 1st defendant. Defendant no.8 is the Mumbai Metropolitan Region Development Authority (MMRDA), which is the Planning Authority in the area.
2. The suit seeks the following reliefs :-
(i) A declaration that all FSI beyond FSI utilized and available when the building plan was sanctioned on 24th December, 2008 on the suit plot, vests in all the flat purchasers, including the plaintiffs, after the expiry of the period for formation of the society along with the right to put up further construction on the suit plot;
(ii) An order quashing a Supplementary Lease Deed dated 17th July, 2017 granting additional FSI to the 1st defendant;
(iii) A declaration that defendant no.1 has no right to amend the existing lay-out and put up a further construction on the suit plot without the consent of each plaintiff;
(iv) A permanent injunction restraining the defendants 1 to 2/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit 7 from putting up any buildings on the suit plot or creating any encumbrance thereon;
(v) A declaration that the construction proposed to be put up without the consent of the plaintiffs is illegal;
(vi) Injunction orders restraining defendants 1 to 7 from putting up further construction on the suit plot and from obstructing the use of the suit plot by the plaintiffs; and
(vii) Lastly, for an account of monies that have been collected by the defendant nos.1 / 1 to 7.
3. In the Notice of Motion, the plaintiffs seek an injunction restraining the defendants 1 to 7 from putting up additional construction on the suit plot or creating any encumbrances or from transferring the FSI. It also seeks a restraint against any obstruction by the defendants of the plaintiffs' members using the suit plot and restraint against putting up further building plans. A direction is also sought against defendant no.8-MMRDA to issue a no objection certificate to the Mumbai Municipal Corporation for digging a bore-well in the building. I may mention here that this prayer was not seriously urged during the hearing of this Notice of Motion. In fact, the entire focus was on restraint as far as the further construction proposed by the 3/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit defendants is concerned. During the pendency of the Notice of Motion, a fresh Interim Application has been filed claiming urgency on the basis that at the hearing of the ad-interim application in the notice of motion, the court had observed that piling work was underway. Further work by defendants 1 to 7 would be subject to orders passed by the court. The Motion was directed to be placed for final hearing and disposal on 16th October 2018.
4. It is the grievance of the plaintiffs that the matter has not thereafter reached hearing. The plaintiffs have relied upon a recent communication dated 29th November 2019 addressed by the MMRDA, which reveals that the MMRDA has issued commencement certificate upto plinth on 22 nd November 2019 for the proposed residential-cum-commercial building on plot bearing CTS No.288B of Bandivali village. On 9th September 2020, a further communication has been received by the plaintiff no.1, whereby MMRDA has confirmed having issued a commencement certificate above the plinth level for ground + 8 upper stories on 8th September 2020. The plaintiffs had therefore moved an urgent ad-interim application in this new interim application. A commencement certificate has been issued in the interregnum, whereby the defendants are now permitted to put up an additional wing (Wing B) touching the existing building Universal Garden-1 and utilizing FSI allegedly becoming available after constructing the existing building Wing A. It is contended that after filing the suit in August 2018, the plaintiffs had been 4/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit informed by the defendant no.8 that no further permissions had been given to defendant no.1 to put up construction. However, now it has come to the knowledge of the plaintiffs that Wing B is proposed to be put up and that FSI has been doubled as a result of which additional FSI approved was about 10,368.23 sq.mtrs. The plaintiffs are aggrieved by the proposal to put up such additional construction without their consent.
5. It is their case that the defendant no.1-Developer has no right, title or interest for constructing Wing-B on the suit plot or sell any flats in the aforesaid new building without their consent. It is further contended that the permission granted by MMRDA is illegal having been granted without the consent of the plaintiffs. It is contended that MMRDA had admitted in a letter dated 6th September 2017, Exhibit-BB to the plaint, that the 1st defendant as promoter and lessee of MMRDA, would be bound by the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963.
6. At the hearing of the ad-interim application in the IA, the defendants pointed out that a "second round" is being attempted by the plaintiffs especially since the earlier notice of motion is already pending and had been directed to be heard finally. By the present IA, the plaintiffs were seeking the very same ad-interim protection, which they had failed to obtain in October, 5/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit 2018. The plaintiffs, on the other hand contend that the circumstances now obtained are different, inasmuch as in 2018, it is only piling work which had commenced; more recently, the CC for ground + 8 upper stories above plinth level had been issued and that has given rise to this urgency.
7. By consent of parties, the Motion and the IA are now being disposed finally at this stage. Due to paucity of time and owing to the delays encountered during the hearings on video conference, all learned counsel for the parties agreed that they would file brief written submissions, on the basis of which the court would decide the motion and the IA. Brief oral submissions were also permitted. These have since concluded and all three parties, namely, plaintiffs, defendants 1 to 7 and defendant no.8 have separately filed short written submissions.
8. I have therefore proceeded to consider these submissions. It is in my view appropriate that before we go into the factual aspects, it would be appropriate to consider briefly the provisions of law that would be applicable in the case at hand.
9. The fate of the present Motion and IA would depend on the applicability of provisions of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 6/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit ('MOFA') and the applicability of the Mumbai Metropolitan Region Development Authority Act, 1974 ('MMRDA'). MOFA was enacted in 1963 in view of the acute shortage of housing in several areas of the State of Maharashtra and to ameliorate such shortage after taking into consideration recommendations and suggestions and making provisions for regulation of promotion of the construction, sale and management and transfer of flats on ownership basis. MOFA sets out the general liabilities of a promoter intending to construct a building or block of buildings consisting of flats and requires the promoter to make several disclosures and comply with the requirements of Section 3 of the said Act. It requires the promoter to enter into an agreement in writing and requires such agreement to be registered, as contemplated under the Registration Act, 1908.
10. Section 7 of the MOFA deals with the restrictions on the promoter from altering the structures described in plans approved by the local authority. The intention being to ensure that any alteration in the structures in respect of the flat or flats cannot take place without the previous consent of the flat purchaser, to ensure that a building is constructed in accordance with plans and specifications that have been shared with the intending purchaser. Section 7(A), which was added by Maharashtra Amendment 36 of 1986, is intended to remove doubts pertaining to applicability of the expression or construct any additional structures in clause (ii) of sub-section (1) of Section 7/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit 7 inasmuch as the aforesaid words are deemed never to apply or to have applied in respect of any construction of any additional building or structures in a project of development in the lay-out after obtaining the approval of the local authority. For the purposes of the present motion and interim application, these are the relevant provisions of the MOFA. The rest of the provisions pertain to the management of the general liabilities of the promoter and the flat taker.
11. Let us now consider the provisions of the MMRDA Act and how that Act would if at all affect the operation of MOFA in relation to the flats that are forming subject matter of the present suit. The MMRDA Act of 1974 was enacted to provide for long term planning and promotion of infrastructure development in the Mumbai Metropolitan area and to secure development rights to the authority. It is intended to promote housing, transport and generally regional development of the areas within its control. MMRDA is to provide for establishment of an authority for planning orderly rapid development of areas of the Mumbai Metropolitan region. Section 2(c) of the Act defines "Development", which is intended to encompass "use of any land". Section 2(d) defines "Land" and the definition is said to include "benefits arising of the land and of things attached to the earth". The MMRDA is a local authority and hence is entitled to deal with planning of various areas within its jurisdiction. It is apposite to mention that the Oshiware District Centre 8/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit (ODC) is a specific area of concern in the present applications, since it concerns development of land in that district by participation of land owners. The concept is one of "sale and lease back" inasmuch as land owners would sell properties to the authority / State and that would be leased back for a period of 60 years. In course of time, it is believed that about 22.39 hectares of land have been sold and leased back in accordance with the scheme of development of land by participation of land owners and in particular under the auspices of the ODC.
12. Chapter VII of the MMRDA Act provides that certain enactments would not apply to the authority. These are listed in Schedule-II. Section 31 provides that enactments mentioned Schedule-II shall apply with or without modifications or shall not apply to the Metropolitan Authority or shall be amended to the extent and in the manner mentioned in that schedule. This would require examination of the contents of Schedule-II. Clause (II) of Schedule-II provides that the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 shall not apply to the Metropolitan Authority or to any land or building belonging to or vesting in that authority. The exclusion of MOFA is therefore crystal clear from inclusion of the said Act within Schedule-II of the MMRDA Act. None of the provisions of MOFA will therefore apply to the MMRDA or to land or building belonging to or vesting in MMRDA. This assumes 9/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit significance in view of the fact that under the ODC Scheme, lands have been acquired from land owners by common participation, compensation paid therefor and thereafter the lands are leased back. Thus, the fact that these lands vest in the MMRDA is not in dispute. Considered in this light, the MOFA has no application to the lands that are currently forming subject matter of the dispute in the suit. The issue canvassed on behalf of the plaintiffs however is that defendants 1 to 7 as promoters have contracted out of the statute and agreed to be bound by the provisions of MOFA, notwithstanding exclusion of MOFA, from the MMRDA Act. That having been said, the MMRDA Act also provides vide Section 51 that the provisions of the Act will have effect notwithstanding anything inconsistent therewith contained in any law governing any local or other authority in the Maharashtra Regional and Town Planning Act, 1966 or in any other law for the time being in force. Thus, the provisions of the MMRDA Act shall prevail and not the provisions of the MOFA. This is one aspect that will need to be borne in mind. Simply put, it is the case of the plaintiffs that the defendants as promoters have agreed to submit themselves to the provisions of MOFA. MOFA contains stringent restrictions on the right of the promoters to alter premises or to consume FSI after the period of conveying the property and/or forming the society is over and therefore in the present case, the consent of the plaintiffs is ought to have been taken prior to any further exploitation of the land notwithstanding the provisions of the MMRDA Act. On the other hand, the defendants submit that 10/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit mere mention of MOFA in the agreements for sale with flat purchasers would not attract to stringent provisions, since MMRDA Act itself provides that MOFA as an enactment will not apply to lands vesting in it. Undoubtedly, the lands in question, including the suit plot, are vesting in the Metropolitan Authority and the question therefore that falls for consideration is whether the provisions of Section 7 of MOFA are attracted by virtue of the mention of MOFA in the agreement for sale. It is in this background that I have proceeded to consider the submissions of the parties.
13. On behalf of the plaintiffs, it is stated that the flat purchasers are seeking to protect their rights under MOFA. Whereas, the defendant no.1 is seeking to circumvent its obligations by firstly refusing to register the society of flat purchasers, refusing to convey the land upon which the construction has been put up and, thirdly, by proceeding to construct upon the land by utilizing additional FSI and TDR. According to the plaintiffs, once the development potential of the land had been exhausted, as initially contemplated, no further rights could be exercised by the defendant no.1 and the provisions of Section 7 of MOFA would operate and as a result, without the consent of the plaintiffs, the construction now proposed cannot be put up.
14. The submissions on behalf of the plaintiffs can be briefly put thus; 11/39
IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit (A) The defendant no.1 has exhausted the development potential of the land, as disclosed to the plaintiffs. (B) The defendant no.1 proposes to construct a new wing to the plaintiffs' existing building. The proposed building is not independent and therefore the defendant no.1 is obliged to take the consent of the plaintiffs prior to commencing construction.
(C) It is contended that the MOFA applies to the 1 st defendant-
Developer despite the provisions of Section 31 of the MMRDA Act.
(D) The defendant no.1 is taking undue advantage of the order dated 1st October 2018 passed by this court on the notice of motion at the ad-interim stage.
(E) A suit filed in the City Civil Court by the plaintiffs 1 to 5, which seeks to prevent the defendants from physically entering and exiting the property, does not in any manner affect the reliefs sought in the present suit.
15. These are the basic contentions upon which the plaintiffs' case is founded. I may mention here that the suit filed in the City Civil Court appears to was filed by the defendants to prevent the plaintiffs from obstructing the defendants 12/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit
16. On behalf of the defendants 1 to 7, it is contended that MOFA is not applicable to the suit plot. Secondly, it is contended that the proposed development had been disclosed to the plaintiffs' right at the outset. Thirdly, the defendant no.1 accuses the plaintiffs' of suppression of material facts. It is also contended that there has been gross delay and laches on the part of the plaintiffs and therefore that alone disentitles the plaintiffs' from any reliefs.
17. MMRDA has contended that it is Special Planning Authority under Section 40 of the Maharashtra Regional and Town Planning Act, 1966, notified for the development of the Oshiware District Centre and provisions of the MOFA do not apply to the authority. In view of the specific provisions of clause (5) of the Schedule referred to in Section 31 and Section 40 of the Act. Apart from clause (5) of Section 40, making the MOFA inapplicable, exclusion of MOFA from its applicability is made clear by the IInd Schedule and to which clear reference is made in Section 31. MMRDA also contends that the plaintiffs have signed Indemnity Bonds, wherein future development of the property is clearly contemplated and the purchasers of flats do not have any right in the FSI sanctioned by the MMRDA. It is contended that the MMRDA has followed due procedure before granting additional FSI to the 1 st defendant. It has scrutinized the plans and the building, construction of which is now in contemplation is a separate and distinct building, the plans of 13/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit which have been sanctioned by MMRDA. Last but not the least, the MMRDA contends that by virtue of Clause (9) of the First Schedule to MRTP Act, any suit against the MMRDA is barred unless prior notice of two months is served on the relevant authority. That in the present case, such notice had not been served and therefore the suit against MMRDA is bad in law, not maintainable and by that reason, no relief can be granted in the suit, motion or interim application.
18. Plaintiffs then contended that merely because the Competent Authority and District Deputy Registrar of Co-operative Societies had observed that MOFA does not apply, the plaintiffs cannot be non-suited. It is contended that the order of the said Competent Authority is subject matter of appeal pending before the Joint Divisional Registrar and that the fact of grant of deemed conveyance or otherwise does not in any manner conclude the issue finally as between parties, since an aggrieved party can always seek redressal of their grievances before a Civil Court. The next submission on behalf of the plaintiffs is to the effect that while the order of the District Deputy Registrar of Co-operative Societies is not binding, the defendant no.1 cannot also take advantage of the order dated 1st October 2018 passed in the notice of motion. Vide that order, the court had recorded a statement on behalf of the Advocates for defendant nos.1 to 7 to the effect that as on that date the defendants 2, 3 and 7 had carried our piling work and in support thereof, an Architect's 14/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit certificate was annexed to the affidavit-in-reply. The court observed that the matter could be disposed finally and that any work carried on would be subject to further orders of the court.
19. According to Dr. Chandrachud, the fact that the Motion was pending does not in any manner prevent the present application from being urged. He submitted that the court intended to hear the motion finally and had listed it after a couple of weeks; however, due to paucity of time, the court could not take up the matter. The plaintiffs cannot be faulted for that, nor can the defendants take advantage of it. In the light of the aforesaid, it was contended that the plaintiffs are entitled to the reliefs sought against the defendants, as otherwise they would be prevented from exercising their rights under law and would be deprived of the advantages of a beneficial legislation. On behalf of the plaintiffs, it was also contended that while some plaintiffs had filed a suit in the City Civil Court at Bombay seeking to prevent the defendants from physically entering upon the suit property for construction purposes, mere pendency of that suit cannot prevent the present suit from being urged and the relief being granted. It is therefore contended that the reliefs in the present motion are liable to be granted and may be granted.
20. In support of the case of the plaintiffs reliance is placed on the following decisions:-
15/39
IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit
(i) Lakeview Developers Vs. Eternia Co-operative Housing Society Ltd.1;
(ii) Malad Kokil Co-operative Housing Society Ltd. Vs. Modern Construction Co. Ltd.2;
(iii) Ravindra Mutneja & Ors. Vs. Bhavan Corporation & Ors.3;
(iv) Nutan Kumar & Ors. Vs. IInd Additional District Judge & Ors.4;
(v) Subhash Ramchandra Navare & Anr. Vs. Premji Meghji Rambia & Ors.5;
(vi) Bajranglal Eriwal & Ors. Vs. Sagarmal Chunilal & Ors.6.
21. Some of these judgments in turn referred to earlier judgments of the Supreme Court including Jayantilal Investments Vs. Madhuvihar Co-op. Housing Society & Ors.7 and Kalpita Enclave Co-operative Housing Society Vs. 1 2015 SCC OnLine Bom. 3824 2 2012 SCC OnLine Bom. 1310 3 2003 (5) Mh.L.J. 23 4 (2002) 8 SCC 31 5 2020 SCC OnLine Bom. 316 6 2008 (5) Mh.L.J. 571 7 (2007) 9 SCC 220 16/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit Kiran Builders Pvt. Ltd8 in a judgment of the Bombay High Court. Reliance is also placed on the decision of Subhash Ramchandra Navre & Anr. Vs. Premji Meghji Rambhia9, in which this court has observed that the court had already decided in Mazda Construction Company and Shree Chintamani Builders (supra) that an order directing execution of deemed conveyance does not conclude the right, title and interest of the parties, since they can always urge the same before a Civil Court.
22. Dr. Chandrachud laid specific stress on the observations of Supreme Court in Nutan Kumar & Ors. Vs. IInd Additional District Judge & Ors.10 to the effect that unless a Statute specifically provides that a contract contrary to the provisions of a Statute would be void, the contract would remain binding between the parties and could be enforced between the parties themselves. Relying upon this observation in paragraph 13 of the Judgment in Nutan Kumar, the plaintiffs contended that in the present case, there is a clear agreement to submit to MOFA and once having submitted to the provisions of MOFA, that contract cannot be defeated by virtue of the provisions of the MMRDA.
23. On behalf of the defendants 1 to 7, Mr. Sen submitted that the 8 1986 MhLJ 110 9 (2020) SCC Online Bom. 316 10 (2002) 8 SCC 31 17/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit provisions of MOFA are not applicable to the suit plot. The suit proceeds on the basis that MOFA as an enactment would apply to the defendants' activities on the suit plot; however, this was not correct. He makes reference to the Oshiware District Centre notified under the Act, which was approved by the State Government by a notification dated 16th January 1992. It is submitted that the planning proposal contemplates guided development of the land with owner participation, to which I have already made reference to above. In the instant case, it is contended that the defendants have paid a premium to MMRDA in a sum of Rs.28,17,28,617/- for FSI of 3, out of which defendants are liable to pay an aggregate sum. Out of this sum, an amount of Rs.16,88,42,741/- has already been paid in different phases. The payments are being made, as required, and this will entitle defendant no.1 to secure the right to fully and completely develop the plot at their cost and also allocate built-up area equivalent to 10% of the plot area to the MMRDA free of cost. This construction has been carried out under the owner participation scheme and defendant no.1 has already expended Rs.38 crores for construction of Wing A, which is occupied by the plaintiffs.
24. Mr. Sen contended that the estimated costs of construction of Wing B is about Rs.80 crores and the defendant no.1 had already spent about 35% of that amount. It is submitted that by virtue of Section 31 of the MMRDA Act and the application of Schedule-II, the provisions of MOFA do not apply to the 18/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit suit plot or any of the construction activities thereat. Mr. Sen also made reference to the order dated 15th December 2016 passed by the Competent Authority under Section 5(a) of MOFA, rejecting the application under Section 10 of MOFA for seeking to form a society of flat purchasers. It is contended that the application was rightly rejected since MOFA was not attracted in the case of the suit plot. Therefore, the competent authority under the MOFA lacked the jurisdiction to pass any order under Section 10. According to the defendants, this order of 15th December 2016 has not been challenged and has attained finality. This appears contrary to the submission made on behalf of the plaintiffs that an appeal against that order is pending before the Joint Divisional Registrar.
25. Mr. Sen further contended that the reference made to clause (28) of the agreement for sale is misconceived since the clause is part of a standard form agreement employed by defendant no.1. It did not refer to obligations of the Developer in relation to provisions of MOFA and nor did the plaintiffs contemplate the applicability of MOFA at the material time. He submitted that neither plaintiffs nor defendant no.1 are entitled to contract out of Section 31 read with Schedule-II of MMRDA and MMRDA has not consented to applicability of provisions of MOFA to the plot in question. Making reference to the affidavit-in-reply filed on behalf of the MMRDA by one Pradeep M. Yadav, Additional Chief (Urban Design), Town and Country Planning 19/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit Division, he submitted that the MMRDA had clearly taken up the contention that the MOFA does not apply to it. Mr. Sen contended that defendant no.1 is only an agency, acting on behalf of MMRDA, in terms of the owner participation scheme and is entitled to exploit FSI that is owned by MMRDA. It is submitted that the question that arises in the suit is only whether the plaintiffs are entitled to prevent utilization of FSI of 3 by MMRDA and by the defendant no.1 under the scheme formulated pursuant to the Act. According to Mr. Sen, this cannot be done and the MMRDA alone is entitled to chart the course of action since MOFA does not apply to MMRDA properties. It is further submitted that if the court was to hold that the plaintiffs were entitled to restrain the defendant no.1 from proceeding with its development, it would prevent MMRDA from receiving the premium for utilization of FSI and the built-up area to which it is entitled. He submitted that the consent of the plaintiffs was not at all contemplated in the present case since Section 7 of the MOFA did not apply. If any order was to be passed against the defendants, this would also affect the development potential under the Oshiware District Centre scheme, of which the suit is a part since the land owners have all sold their lands to be leased back for a limited period of time and on conditions specified in the lease agreements.
26. Furthermore, it is contended that the plaintiffs' objections have been considered by the Competent Authority under the MMRDA Act, which has 20/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit rejected the plaintiffs' contentions vide an order dated 20th February 2018 on the ground that the objections raised were contrary to the scheme under which the ODC contemplates exploitation of land potential. This order dated 20th February 2018 is said to have attained finality since the plaintiffs have not challenged the same. Mr. Sen contended that the plaintiffs were well aware of the proposed construction. He submitted that the plaintiffs were guilty of suppressing material facts inasmuch as Annexure-A to the agreement for sale, which is a layout plan, had not been disclosed in the plaint. The plaintiffs have also not given any reason for not disclosing this vital document. Making reference to the reliance placed by the plaintiffs on no objection certificates to be granted by the Fire Department, Mr. Sen clarified that the defendants had initially proposed to construct Wing B, which had been abandoned since the same was not compliant with Fire Brigade requirements. Wing B was initially contemplated as a low rise building; however the building could not be then constructed owing to planning constraints. It is now submitted that upon increase of FSI, the Fire Brigade has granted a fresh No Objection Certificate dated 4 th October 2019, which document confirms that the proposed new construction is in compliance with the Development Control Regulations and provides for all fire safety aspects as well.
27. The defendants 1 to 7 have further contended that the averments in the interim application are false and misleading. The plaintiffs admit that the plot 21/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit is owned by MMRDA, but in paragraph 29 of the IA, the plaintiffs have contended that the plaintiffs and the other flat holders residing in the existing building Universal Garden-1 are the collective and absolute owners of the suit plot of land and that their rights would be adversely affected if the illegal building is now constructed. According to the defendants, the averment, as above, is not only contrary to the rest of the averments in the plaint but also the contents of the agreements for sale executed between the various plaintiffs and the 1st defendant, all of which state that the plot is owned by MMRDA and has been leased for a period of 60 years. The defendants have also contended that the plaint is delayed and amounts to laches on the part of the plaintiffs.
28. The plaintiffs apparently attempted to physically obstruct and interfere with the construction activity as a result of which the defendant no.1 filed Short Cause Suit No.999 of 2018 in the City Civil Court at Dindoshi and sought and obtained an ad-interim injunction restraining the plaintiffs from interfering with the on-going construction. Thereafter, it appears that the Competent Authority vide an order dated 5th July 2017, rejected an application made under Section 9(3) of the Maharashtra Co-operative Societies Act, 1960 seeking registration of the society of flat purchasers, including the plaintiffs. This order was challenged in a Writ Petition No.5957 of 2017, but on 5th February 2018, the said writ petition is said to have been withdrawn contending that they would make their challenge in the appeal. 22/39
IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit That appeal is since pending. The suit has been filed only thereafter and according to the defendants, it is only by way of an afterthought. Ad-interim reliefs were not granted in the suit and it is contended that even today, there is no ground for granting any relief. Meanwhile, the defendant no.1 has proceeded with the construction activities, spent substantial amounts of monies by way of premium payable to MMRDA as well as towards construction costs. The project has since been registered under the Real Estate (Regulation and Development) Act, 2016. The defendants have further contended that the 1st defendant has allotted various premises to third parties, who were not present before the court and that the grant of any interlocutory relief at this stage would prejudice the rights of third-party purchasers and MMRDA, who is entitled to receive further premium and allocation of built- up area. According to defendant no.1, the RERA also provides for deposit of 70% of amounts collected in a separate designated RERA Account and to be utilized for the purposes of construction. The scheme therefore is statutorily required to comply with these obligations and if defendant no.1 is prevented from allotting, selling premises and collecting amounts, the construction activity would also be seriously affected. On facts, therefore, it is contended that no case whatsoever is made out for grant of relief. Thus, defendant no.1 seeks that the Motion and IA be rejected.
29. That brings us to the stand taken by defendant no.8-MMRDA. On behalf of the MMRDA, Mr. Kulkarni has filed short written submissions inter 23/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit alia contending that the MMRDA as a Planning Authority, under Section 2(19) of the MRTP Act, is entitled to deal with the notified area under the Oshiware District Centre and that in accordance with Section 159A of the MRTP Act, the provisions of the First Schedule are applicable to New Town Development Authority and a Special Planning Authority referred to in Section 40. The First Schedule reveals that the relevant authority in the schedule and described as a Development Authority may be a Special Planning Authority contemplated in Section 40 and clause (5) of the First Schedule provides that nothing contained in the MOFA would apply to the relevant authority. As such, it is contended that the MOFA does not apply to the MMRDA. This aspect is also to be found in Schedule-II read with Section 31 of the MMRDA Act, On behalf of the MMRDA, Mr. Kulkarni has contended that clause (9) of the First Schedule to MRTP Act requires prior notice of two months to be served on the Metropolitan authority and thus the suit is bad for want of such notice. Furthermore, the provisions of MOFA having been excluded by specific reference in Schedule-II and in the light of the Indemnity Bond signed by the flat purchasers, there is no occasion to question the right of MMRDA. In any event, no relief is being sought against the MMRDA, except for the prayer for grant of the NOC, as contemplated in the notice of motion. MMRDA has reiterated that the plaintiffs as flat purchasers cannot claim any right in additional FSI that may be usable on the suit plot and are therefore estopped from raising such contentions. 24/39
IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit Furthermore, MMRDA is said to have followed proper procedures while granting additional FSI and have scrutinized the plans before granting sanction. Mr. Kulkarni confirms that the building in which the plaintiffs claim ownership rights is a separate and distinct building and plans now sanctioned by MMRDA are in respect of a completely separate building. In that view of the matter, it is contended that the motion be dismissed.
30. Having considered the parties submissions, it is clear that on a reading of Section 31, read with Schedule-II of the MMRDA Act, the MOFA does not apply to MMRDA or lands vested in them. According to the plaintiffs, by contracting to the contrary, MOFA can be made applicable to the performance of obligations under the agreements between the plaintiffs and the 1st defendant. The question that would arise is whether it is possible to make an enactment applicable by agreement when it is statutorily excluded from purview of another ? To my mind, the question is not one of contracting out or of a contract contrary to a statutory provision, but it is a question whether by agreement of parties, a statute, which is otherwise expressly excluded by statute can be made applicable by contracting parties. To my mind, the answer must be in the negative. There can be situations when, absent a prohibition the two contracting parties may agree upon an arbitration clause being incorporated in the agreement between them. By that consensual arrangement, the provisions of the Arbitration and Conciliation Act 1996 would be made applicable in the event of any disputes arising 25/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit between them. In this case the question is whether the exclusion of the provisions of MOFA by a later enactment, namely, the MMRDA Act will prevent parties from invoking provisions of MOFA. The agreement between the parties, namely, "the contract" makes several references to the provisions of MOFA. It is not only clause (28) of the agreement that makes reference to MOFA. When one peruses the agreements for sale, one sees that apart from clause (28), the recital (bb) also makes express provision to MOFA. This can be seen from Annexure-II to the affidavit-in-reply filed on behalf of defendant nos.1 to 7. It reproduces a standard form agreement in relation to flats at Universal Garden. At that point in time, it appears that the 1st defendant was known as "A.Surti Developers Private Limited" and in recital paragraph (bb), the agreement provides that the flat purchasers have demanded from the developers and the developers have offered inspection of all documents of title and other agreements as are specified in the Maharashtra Ownership Flats Act. In clause (10), specific reference is made to the provisions of MOFA find reference. Apart from clause (10), clauses (14) and (15) make reference to various provisions, which reveal that the purchasers of the flats shall not have any rights in respect of any floor space index sanctioned by the Municipal Corporation or MMRDA or any other local authority. These are provisions in the agreement which clearly indicate that the consumption of future FSI would not be affected by the terms of the agreement and the developers will have absolute right to put up additional 26/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit construction or consume any balance FSI or TDR on the property. Although prima facie it may appear that these are provisions that fly in the face of settled law to the effect that once the flat purchasers are in a position to form the society and the time for formation of society was expired, no further exploitation of the plot could take place these are aspects which would come into play only if the provisions of MOFA were made applicable. In the facts at hand, the land belongs to the MMRDA. The scheme for acquisition of land in a common pool pursuant to the setting up of the Oshiware District Centre and the subsequent arrangement for lease back specifically provide that the Maharashtra Ownership Flats Act will not be applicable to the development in question. It may not be out of place to mention that Annexure-A to the Standard Agreement for Sale is a lay-out plan and the lay-out plan clearly envisages construction of a separate property alongside the building that was contemplated in the agreement. The fact that the flats in question in Universal Garden - Wing A were part of the Oshiware District Centre is evident from Exhibit-D to the plaint, which clearly sets out that MMRDA is a Special Planning Authority in relation to the suit plot. Moreover, copy of the commencement certificate annexed as Exhibit-B4 to the plaint dated 16th February 2010, clearly makes reference to the proposed development of residential building beyond the plinth level and of ground + 22 floors. Reference to Wing A would clearly entail that there was a possibility or a further wing or more wings being constructed.
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31. It is also pertinent to note that upon occupancy certificate being issued on 21st February 2014, a set of As-Built Drawings No.1 to 6 were enclosed therewith. Upon perusal of Annexure-III to the affidavit-in-reply, enclosed with the occupancy certificate, one finds that there is a clear demarcation of area for future development. This is evident from the plan appearing at page 138 to the affidavit-in-reply filed on behalf of defendant no.1. In the light of these documents, it is not possible to accept the contentions of the plaintiffs that the entire development potential had been exhausted when the first wing i.e. Wing A was constructed. It is not possible to accept the contention of the plaintiffs that they were led to believe that apart from Wing A, there would be no other construction put up on the suit plot of land. One must also not lose sight of the fact that each of the plaintiffs are believed to have executed indemnity bonds, a sample of which is to be found at Annexure-IV to the affidavit-in-reply. The document at hand is one which is executed by the 1st plaintiff, who was the purchaser of flat 1503. Clause (3) of the said undertaking / indemnity bond dated 21st February 2014 reveals that the deponent was made aware of the fact that there was undeveloped land situate on the East side of the Universal Garden, which was going to be developed by the developer with the podium and other amenities similar to Universal Garden Tower-1. Both towers, Universal Garden and the upcoming tower, are likely to be developed on the remaining part of the land and would be connected with each other by a podium. Access was to be given by the 28/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit developer from the podium to Universal Garden for the upcoming tower, so that egress and ingress to the occupants of the upcoming tower was ensured. Clause (5) of the said undertaking / indemnity bond dated 21 st February 2014 contained an undertaking that the deponent would not stop or restrain or in any manner obstruct the occupants of the upcoming building and that the use of the road and access would not be in any manner prevented. This is a clear indication of the fact that all the flat purchasers were made aware of the possibility of the proposed building being put up on the suit plot. Apart, it is quite clear from the affidavits on behalf of defendant no.1 that substantial efforts have gone into further FSI being issued.
32. Exhibit-XIV to the affidavit-in-reply is a letter dated 8th September 2017 addressed by MMRDA to the plaintiffs' Advocates. It is a response to a legal notice pertaining to the grant of additional FSI to the 1st defendant. It appears that several queries were raised by the plaintiffs in relation to the grant of additional FSI and in response, the MMRDA has clearly emphasized the fact that vide a Government Notification dated 18 th November 2015, FSI in respect of the Oshiware District Centre had been increased from 1.5 to 3 in relation to residential developments and that in view of this increase, the developer had applied for availing of the additional FSI by paying premium. The Chief Promoter of the plaintiffs' proposed society had in the meanwhile vide a letter dated 27th March 2016 objected to the grant of additional FSI. These objections were placed before the Ad-Hoc Committee and the developer 29/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit i.e. defendant no.1 was requested to submit his response. This was done vide a letter dated 17th May 2016, wherein the 1st defendant pointed out that under the agreements for sale, clause (15) and (15.1) clearly stipulated that the purchasers would not have any right in respect of the FSI. Furthermore, the indemnity bonds-cum-undertakings had clearly set out that the purchasers were aware of the proposed additional construction and had agreed not to object to the same. Plaintiffs' Advocates were also informed that upon considering these aspects, MMRDA vide letter of 2nd February 2017 issued a demand letter calling upon the defendant no.1 to make payment of additional premium and that upon payment of additional premium, a Supplementary Lease Deed dated 17th July 2017 had been executed. Despite this intimation, it appears that the plaintiffs did not take any action at the material time. Moreover, in the penultimate paragraph of the reply, MMRDA had clearly pointed out that Section 7-A of MOFA is not applicable to MMRDA and that the section is applicable only to a promoter under MOFA. In the instant case, any alterations or additions to an approved building, if proposed, the consent of the petitioners may have been required in case the 1 st defendant was the promoter. However, in the present case, the MMRDA being the Planning Authority and not the promoter, as defined under MOFA, those provisions do not apply. When we consider the framework under which the MMRDA has operated, one will find that under Section 40 of the MRTP Act, the State Government had appointed the MMRDA as the Special Planning Authority. It 30/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit is in that sense a local authority. The local authority was thereafter entrusted with the planning proposal of the Oshiware District Centre, as approved by the State Government. Lands were therefore acquired from participating land owners and were leased back. The proposal to modify paragraph (7.2.1) of the planning proposal in respect of the Oshiware District Centre was mooted as early as September, 2008. They proposed to double the FSI from 1.5, which was then available. Meanwhile, on 24th December 2008, MMRDA is seen to have granted approval for development of a residential building on the suit plot. A commencement certificate was issued on 16th February 2010. Agreements for sale were executed and thereafter it seems that an occupation certificate was issued on 21st February 2014 in respect of Universal Garden A Wing consisting of 132 flats. It is only in November, 2015 that the State Government issued a notification relating to enhancement of FSI from 1.5 to
3. This enhancement was in consequence of the resolution dated 10 th September 2008 proposing the change to paragraph (7.2.1). The area upon which construction has now commenced was clearly earmarked for future development in keeping with the notification and as demarcated on the plan, which was known to the plaintiffs. The plaintiffs' contention that provisions of MOFA would have to be complied with and that the defendants 1 to 7 were in breach of the MOFA obligations has not found favour with the competent authority under MOFA, which found that the registration of society could not have been granted for want of jurisdiction since MOFA did not apply to the 31/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit lands vesting in MMRDA. The fact that lands vest in MMRDA cannot be questioned and this is a policy matter which the MMRDA has been following in respect of development of lands at the ODC. Despite this clear stand on behalf of the defendants, the plaintiffs took no action. Later, MMRDA had granted in principle approval for utilizing the additional FSI as early as December 2016. In February, 2017 the 1st defendant is believed to have paid a sum of Rs.3,58,51,200/- towards the additional premium. As a result, a supplementary agreement of lease came to be executed in July 2017. All along, the plaintiffs took no action. When the plaintiffs attempted to take law into their own hands, the defendant no.1 was compelled to file a suit in the City Civil Court to prevent the plaintiffs' attempts to obstruct the construction work. On all counts, I find that the plaintiffs have failed to make the grade on prima facie case and on balance of convenience as well. As far as the aspect of application of MOFA is concerned, I am of the view that the provisions of Section 7 of MOFA cannot be invoked in this case. The exclusion by a statute of another cannot be set right by a contract to the contrary. That brings me to consider the precedents cited in support of the plaintiffs' case.
33. The question that is to be considered is whether the effect of the embargo under Section 7 of MOFA would come into play in the instant case. None of the decisions cited consider the effect of the express bar in the MMRDA Act to provisions of MOFA. In Lakeview (supra), the court had 32/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit occasion to consider the role of BMRDA as it was then known in development of certain properties. However, that is a case where the Bombay Metropolitan Region Development Authority, as it was then known, had sanctioned a scheme called Powai Area Development Scheme (PADS) in relation to land and villages in Powai and Tirandaz of Taluka Kurla. The State Government also issued a notification authorizing the BMRDA to undertake the execution of that project and the suit lands in that case vested in the BMRDA. Subsequently, the land owners entered into an agreement for development- cum-sale with the 1st defendant granting development rights in relation to the lands. A tripartite agreement was then entered into between the State Government, defendant nos.13 to 19, which included land owners. However, the focus was not on the applicability of MOFA and the bar contained in section 31 of the MMRDA Act r/w Schedule-II. The case of the developer there that until all the lands had been exploited, it was not obliged to grant conveyance in favour of any of the societies. Under the tripartite agreement, a license / permission was granted to land holders to develop the entire land. The lease was for 80 years, to be executed in favour of the land owners or their nominees. Of these land holders seeks to enter into agreements with developers for development of the entire land, which was sub-divided into sectors and the developers thereafter entered into agreements with flat purchasers. Out of the 80 years of the lease term, 26 years had already expired and that is when the plaintiffs' and the societies filed suits to seek 33/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit conveyance of the land. The issue of further construction had not been expressly dealt with in the manner it concerns the present case.
34. In Lakeview the promoters had contended that they shall be entitled to deal with, dispose of and alienate all additional floors by exploiting additional FSI without any objections from the flat purchasers. It was further contended that till the entire land in the scheme was developed, the question of conveying or assigning the property by lease in favour of the societies did not arise. This was found to be fallacious by the Division Bench. The main question that fell for consideration in Lakeview is whether a developer can construct additional buildings though they were not shown in a lay-out plan by utilizing additional FSI under various regulations or whether societies are entitled to get fungible FSI under the relevant provisions of the Development Control Regulations and consequently whether the plaintiffs societies are entitled to seek a direction to the developers to convey and assign the properties to them. These are aspects which do not fall for consideration in the present case where we are concerned with a fact situation where future development was already disclosed in the plan and specifically agreed to by the plaintiffs. The fact situation in Lakeview was therefore quite distinct and different from the issue in hand. Furthermore, Lakeview was not required to consider whether or not the provisions of MOFA can be contractually introduced under agreements for sale when the basic development of the area is under the provisions of the MMRDA Act. For all these reasons, I am of the 34/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit view that the judgments cited on behalf of the plaintiffs do not come to their assistance.
35. Section 2(d) of the MMRDA Act, the definition of "land" includes benefits to arise out of the land and things attached worth and therefore, on a conjoint reading of the relevant sections, the MOFA has no application to the land owned or vested in MMRDA or to the benefits of FSI arising therefrom. These sections makes it clear that MOFA will not apply to any of these lands. The suit plot is owned by MMRDA and is developed in accordance with the terms of the Lease Deed dated 15th July 2008 and the owner participation scheme, as contemplated in Chapter 6 of the planning proposal.
36. On scrutiny of the Agreement for Sale I find that recital clauses (d), (ee) and clauses (2.2), (3), (15), (15.1) and (15.2) of the agreements for sale. My attention has been invited to these relevant clauses as part of Exhibit-G1 to the plaint. These clauses reveal that defendant no.1 was then constructing A Wing and that defendant no.1 intended to develop in due course further structures on the land in accordance with sanctioned plans. These were to be carried out phase-wise by constructing additional commercial and residential structures subject to the necessary approvals being granted. The lay-out plan annexed to the agreement for sale as Annexure-A did earmark a portion of the suit plot for a "proposed building". Each of the agreements for sale are said to make reference to buildings that are yet to be constructed. The construction 35/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit now underway is therefore clearly fitting the description of the further construction that was contemplated in the said annexure and which forms part of the agreements for sale. It is further submitted that as early as 10 th September 2008, the MMRDA had passed a resolution bearing No.1160 to increase FSI from 1.5 to 3 in the Oshiware District Centre. That the proposal then forwarded to the State Government had been sanctioned on 18 th November 2015. Increase in FSI was already in contemplation and was expected even when the agreements for sale were executed. This appears to be the reason for the plaintiffs being called upon and their executing the indemnity bonds.
37. The plaintiffs were aware of the fact that the lay-out plan included reference to Wing-B and at the time of seeking and taking possession of their respective flats, the plaintiffs have furnished an indemnity and undertaking not to interfere in any manner with the future construction on the plot. The defendant no.1 attributes to the plaintiffs' knowledge of the Supplementary Lease Deed at-least as early as 3rd August 2017 and the approval of building plans for construction of the 2nd wing. Hence, on that date, the plaintiffs had sought cancellation of Supplementary Lease Deed by objecting to the approval of plans for construction of Wing B. The objections raised by the defendant no.1 were rejected by the MMRDA on 20th February 2018 with no challenge to that order. A commencement certificate was then issued on 23 rd February 36/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit 2018 and even at this stage, there was no challenge to the decision dated 20 th February 2018.
38. Ordinarily where only flats are constructed and sold without any interest in the land the agreements would be governed by MOFA. If any undivided interest in the land is sought to be transferred to the flat purchaser the transaction would be governed by Maharashtra Apartment Ownership Act since it would entail conveyance of the undivided interest proportionate to the area of the flat and the formation of a condominium. The land may be transferred to a company wherein flat purchasers are shareholders. In the present case it is evident that defendant no. 1 has agreed that the MOFA model will be followed and that is what is seen from the contents of the agreement and the various clauses. To that extent the plaintiff may be right in contending that defendant no. 1 is bound by MOFA. However a distinction needs to be made due to the involvement of MMRDA. MMRDA is owner of the land. The lands are now leased for a limited period of time. The plaintiffs have made an incorrect statement that they are absolute owners of the land. MMRDA is also entitled to some constructed area. In these circumstances the plaintiffs attempt to enforce provisions of section 7 upon defendant nos 1 to 7 will necessarily prejudice MMRDA as well, because consequent upon the express exclusion of the MOFA in respect of the lands vested in the MMRDA none of the sections of MOFA can be enforced against MMRDA. For that reason also no relief can be granted to the plaintiff. 37/39
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39. I make it clear that the plaintiffs will always be at liberty to seek enforcement of other terms of the agreement including the obligations defendant no. 1 has undertaken as provided in MOFA but none of these obligations could entail any prejudice to MMRDA. Enforcement of clause 7 would detrimentally affect MMRDA rights and MMRDA would also be required to negotiate with the plaintiffs who may seek further benefits. Considering the fact that the plaintiffs have all executed indemnity bonds referred to above and had complete knowledge of the possibility of Wing coming up. The balance of convenience does not favour the plaintiff. Delay in approaching the Court as dealt with elsewhere in this order must also be held against the plaintiff. No case is made out for grant of relief and in that view of the matter, the plaintiffs' cannot restrict the rights of the 1st defendant to exploit further FSI as granted by the MMRDA.
40. In the light of the above, I pass the following order :-
(i) Notice of Motion and Interim Application are both dismissed.
(ii) Plaintiffs shall be at liberty to apply to MMRDA for permission to install a bore-well, if otherwise permissible in law. If such an application is made, MMRDA shall 38/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit decide the application within a period of two months and pass a reasoned order.
(iii) No order as to costs.
(iv) This order shall be digitally signed by the Private Secretary of the court.
(A. K. MENON, J.) Sneha Digitally signed by Sneha A. Dixit A. Dixit Date: 2020.11.26 14:28:25 +05'30' 39/39 IAL-3986-2020 With NMS-1358-2019 In S-610-2019 Dixit