Bombay High Court
Mahavir Terrace Co-Operative Housing ... vs Shri.Govindram K Tibrewala on 18 October, 2024
Author: Sharmila U. Deshmukh
Bench: Sharmila U. Deshmukh
2024:BHC-AS:41548
FA-530-2018-16F.doc
IN THE HIGH Court OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
FIRST APPEAL NO.530 OF 2018.
Mahavir Terrace CHS Ltd,
A Society duly registered under
Maharashtra Co-operative Societies
Act, 1960 through its Member having
its address at CTS No.3814 and 3815
Village Kole Kalyan, Shivaji Nagar,
Santacruz (E), Mumbai 400 055. ...Appellant
Versus
1. Shri Govindram K. Tibrewala
being promoter of Shri Mahavir
Terrace C.H.S. (Proposed)
Adult, Indian Inhabitant, residing
At 22, Nutan Laxmi CHS Ltd.
J.V.P.D. Scheme, Vile Parle
(West), Mumbai 400 049.
2. Shivkumar Prahladrai Modi
being promoter of Shri Mahavir
Terrace C.H.S. (Proposed)
Adult, Indian Inhabitant, residing
at 502, Green Blaze, Juhu
Versova, Link Road, Andheri
(West), Mumbai 400 053.
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3. Shri Babulal Khimraj Jain,
being promoter of Shri Mahavir
Terrace C.H.S. (Proposed)
Adult, Indian Inhabitant, residing
at Flat No.404, 4" Floor,
Kadambari Building, Shri Mahavir Terrace CHS
(proposed), C.S. Road, Vakola
Bridge, Santacruz (East),
Mumbai 400 055. ...Respondents
------------
Mr. Atul Damle, Senior Advocate a/w. Ms. Payal Vardhan i/b Mr.
Janardhan P. Singh for the Appellant.
Mr. Sanjiv A. Sawant, Mr. Heramb Kadam, Ms. Samiksha S. Mane for
Respondent No.3.
------------
Coram : Sharmila U. Deshmukh, J.
Reserved : 22nd August, 2024.
Pronounced on: 18th October, 2024.
JUDGMENT:
1. The Appeal is at the instance of original plaintiff being aggrieved by the Judgment dated 10th January 2018 passed by the City Civil Court dismissing S.C. Suit No. 5573 of 2006. The suit was initially instituted by the individual members of the present Appellant Society and subsequently during the pendency of the proceedings, the present Appellant Society came to be substituted as Plaintiff. For sake of rsk 2 of 35 FA-530-2018-16F.doc convenience, the parties are referred to by their status before the Trial Court.
2. The case of the original Plaintiffs is that the Defendants are promoters of Mahavir Terrace Co-operative Housing Society Ltd. Vide registered Deed of Conveyance dated 16th August 1989, the Defendants, as promoters of the proposed Society purchased the suit property from the Vendors. Subsequently the Defendants commenced construction of building "Kadambari" on suit property, executed agreement with the individual flat purchasers and put them in possession of their respective premises prior to the year 1992. The management of the proposed Society was handed over to the Plaintiffs with an assurance to register the Society which was not done. The Defendant No.3 is the resident of premises situated on 4 th floor of the building. On 31st January 2005, the Defendants without informing the Plaintiffs and without their consent obtained IOD from the office of the Executive Engineer, Mumbai Municipal Corporation for addition and alteration to the said building in in violation of Section 7 (1) (ii) of the Maharashtra Ownership Flats, (Regulation of extent, the promotion of Construction, Sale, Management and Transfer) Act, 1963, (for short, MOFA). Hence the suit came to be filed seeking declaration that the Defendants are not entitled to carry out or effect any addition and/or alteration to the existing building "Kadambari" as originally rsk 3 of 35 FA-530-2018-16F.doc sanctioned, for a declaration that any IOD or CC issued or sanctioned are unlawful, illegal and null and void and for enforcement of the obligations under MOFA by getting the Society registered and conveying the title of the property in favour of the Society and for permanent injunction.
3. The Suit came to be resisted by Defendant No.3 contending that consent of the Plaintiffs under Section 7 of MOFA is required to be obtained only if such additions or modifications adversely affect the flats of the flat purchasers. All residual rights to the FSI in respect of the suit property belongs to the Defendants as promoters and developers until registration of the Society and execution of deed of conveyance in favour of such registered Society and the construction has been proposed is based on FSI/TDR which belongs to the defendant. It was contended that the suit property was developed by the Defendants by constructing a building consisting of ground plus four upper floors and was sold to the Plaintiffs. Defendant had purchased flat in the said building on the 4 th floor and as minimum number of members to form Society were not available, Society could not be formed. After construction of the said building some FSI was still left unconsumed and Defendants decided to construct additional 4th and 5th floor by utilising the balance/unutilised FSI and obtaining TDR which right has been reserved for the benefit of the Defendants rsk 4 of 35 FA-530-2018-16F.doc under the agreement with the flat purchasers. The flat purchasers never objected to the proposed additional construction. The original plaintiff Nos.1 and 2 by their letter dated 27 th March 2002 gave their written consent/no objection to the Defendants for utilising the FSI for constructing additional floors upon the said building. Before getting the amended plans sanctioned, the Defendants by letter dated 2 nd December 2002 addressed to all the flat purchasers who are the residents of "Kadambari" put on record that the defendants propose to construct part of 4th and 5th floors. The said letter was received and duly acknowledged by all the Plaintiffs and no objection in that behalf was raised and thus they are deemed to have granted specific consent to the Defendants.
4. The parties went to trial. The Trial Court framed about eight issues and answered the issue as regards the consent of the Plaintiffs against the Plaintiffs. Vide impugned Judgment dated 10th January 2018, the Trial Court dismissed the Suit. The findings of the Trial Court can be broadly summarized as under:
(a) Clause 6 of the Flat Purchaser's agreement provides for the residual FSI to be utilised by the Developers till registration of Society and registered of Deed of Conveyance.
(b) The Society was registered on 21 st December, 2006 and Conveyance was executed in favour of Society on 16 th August, rsk 5 of 35 FA-530-2018-16F.doc 1989 and the residual FSI will be available to the developer till registration of Society or conveyance whichever is later.
(c) Two members of the Society had given their no objection for utilising the FSI and remaining members were well aware about the construction in view of the communication dated 2 nd December, 2005-Exhibit 28.
(d) Consent of all flat purchasers are not required as it was already taken in the agreement executed between the flat purchasers and the developer.
(e) The Civil Court does not have the jurisdiction to declare that the plans or IOD are unlawful, illegal null and void and the same will have to be challenged under Section 51 of the MRTP.
5. Heard Mr. Atul Damle, Learned Senior Advocate for the Appellant-Original Plaintiff and Mr. Sanjiv A. Sawant, Learned Counsel appearing for Respondent No 3-Original Defendant No 3.
6. Mr. Damle, has taken this Court through the Deed of Conveyance executed between the erstwhile owner and Defendant No.1 dated 16 th August 1989 and would point out that the defendants had purchased the property in their capacity as the promoters of Mahavir Terrace CHS Ltd. (proposed). Drawing attention of this Court to the various Recitals and Clauses in the flat purchaser's agreement executed on 11 th July 1998, he would point out the recital in the agreement is that the rsk 6 of 35 FA-530-2018-16F.doc purchasers will hold the property as trustees of the proposed Society. Drawing attention to Clause (6) of the Agreement, he submits that the Society was registered on 21st December 2006 and the property card is issued in the name of the Society and therefore residual FSI would belong to the Society. He submits that the conveyance was executed in favour of the Defendants as promoters of the plaintiff Society and thus the conveyance was in favour of the plaintiff Society. and He would further submit that as per Clause 35 of the agreement, the developer was only permitted to construct additional structures like Society office, station for electricity etc and no consent was given for construction of additional floors on the existing building. He would further point out Clause 38 of the agreement and would submit that if any additional FSI was available before execution of the conveyance in favour of the Society then the developer shall be entitled to use the same. He submits that there is difference between Clause 6 and Clause 38 as clause 6 provides for the residual FSI to vest in the Society upon the registration of the Society and deed of conveyance which ever is later, whereas Clause 38 provides for additional FSI to be available to the developer before execution of conveyance in favour of the Society. He submits that the Trial Court has dismissed the suit on two grounds that consent was not required to be obtained as consent was already taken at the time of the agreement and secondly that consent has rsk 7 of 35 FA-530-2018-16F.doc been given by virtue of the letters dated 2 nd December 2005 and 27th March 2002 addressed by the original plaintiff Nos.1 and 2. He would further submit that the consent of 2 nd December 2005 cannot be said to be valid consent as the same is in the form of a letter sent for information of the flat purchasers and the signatures are only acknowledgment of receipt of the said letter and cannot constitute consent of the flat purchasers. He submits that immediately thereafter the suit came to be filed and therefore it cannot be said that the Plaintiffs did not object to the said additional construction. In support he relies upon the following decision:
1.Kalpita Enclave V. Kiran Builders1
2.Jayantilal Investments V. Madhuvihar Coop Housing Society2
3.Madhuvihar Co-op Housing Society V. J. I.3
4.Vitthal V. Kores (India) Ltd.4
5.Grand Paradi Co-operative Hsg. Society Ltd. V. Mont Blanc Properties,5
6.Noopur Developers V. Himanshu,6
7. Per contra, Mr. Sawant, learned counsel for Respondent No.3 would submit that as per Clause 6 of the flat purchaser's agreement, the residual FSI was available to the developers till registration of 1 1986 Mh. L. J. 110 2 (2007) 9 SCC 220 3 2011 Mh. L.J. 641 4 2019 (3) Mh. L.J. 857 5 2010 SCC OnLine Bom 608 6 2010 (7) Mh. L.J. 694 rsk 8 of 35 FA-530-2018-16F.doc Society or registration of Conveyance whichever is later. He submits that on 31st January 2005, IOD was issued and C.C. was issued on 28 th March 2006. Pointing out to the consent letter of 27 th March 2002 and the communication of 2nd February 2005, he submits that the consent was given by the members and they had never objected. He would further point out the cross examination of the Plaintiff and would submit that the plaintiffs examined plaintiff No.12 who has deposed that he is not aware whether plaintiff Nos.1 and 2 have given consent.
He submits that Plaintiff Nos.1 and 2 did not step into the witness box to deny the consent. He would further point out the affidavit of evidence of the plaintiff and would submit the notice dated 4 th November 2006 issued to the defendants which was replied by the defendants by reply dated 28th November 2006 produced by the witness. Pointing out to the said communication he would submit that the defendants had specifically stated that plaintiffs have given their written consent for the construction work by the Defendants. He would further submit that the Trial Court has rightly noted from the cross examination of the plaintiff that he has shown ignorance whether 603 square meters were utilized or not in the construction of the building. He would submit that the clauses in the flat purchasers agreement has not been challenged by the Plaintiffs. He would further point out that the Trial Court has taken into consideration the consents rsk 9 of 35 FA-530-2018-16F.doc which were issued by the Plaintiffs. Pointing out clause 3 of the Agreement, he submits that prior consent is required to be taken where the variation adversely affects flats of the purchaser. He would further submit that the Trial Court has followed the decision in the case of Grand Paradi Co-operative Housing Society Limited (supra) and that it is settled that unless the plaintiff shows that consent was obtained by adopting illegal means, they are bound by the consent. He submits that the Trial Court has rightly noted that the consent of the flat purchasers is not required in view of the consent recorded in the agreement. He submits that residual FSI is being used by the Defendant No.3 for himself and not for any commercial exploitation. He would submit that there is implied consent in the agreement which has been accepted in the cross examination. He would further submit that the Plaintiffs have not proved that the consent was fraudulent. In support he relies upon the following decision:
1. Grand Paradi Co-operative Hsg. Society Ltd. V. Mont Blanc Properties,7
2. Jamuna Darshann Co-op Hsg. Society Ltd. V. M/s. JMC & Meghani Builders,8
3. Venus Vasant Valley Co-operative Housing Society Ltd. V. Sheth Shelters Private Ltd.,9 7 2010 SCC OnLine Bom 608 8 2008 (1) All MR 789 9 IA. No. 3069 of 2021 IN SUIT No. 771 of 2018 rsk 10 of 35 FA-530-2018-16F.doc
8. In rejoinder Mr. Damle, learned counsel would submit that in the case of Grand Paradi Co-operative Hsg. Society Ltd. (supra) agreement was of the year 1971 and at that time Form V was not prescribed and in that view of the mater, the clauses in the Agreement were held to be binding. He submits that there were total 17 Plaintiffs and there was no requirement for Plaintiff Nos.1 and 2 to step into the witness box and in any event consent cannot be said to be an informed consent.
POINTS FOR DETERMINATION:
9. The following points would arise for determination:
(i). Whether the Defendants are entitled to the unconsumed residual FSI and the additional FSI of the suit property, which can be utilised by the Defendants for the purpose of putting up additional construction on the 4 th and 5th floor of the building without obtaining the consent of the Plaintiffs ?
(ii). Whether the clauses in the flat purchaser's agreement dated 11th July, 1998 and the communications dated 27 th March 2002 and 2nd February 2005 constitute consent of the members of the Plaintiff Society to the proposed additional construction?
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AS TO POINT NO (i):
10. The Defendants as promoters have executed flat purchaser's agreement with the individual flat purchasers recording the agreement between the parties. The Flat Purchaser's Agreement dated 11 th July, 1998 has been produced by the Plaintiffs during the evidence and has been marked as Exhibit 9. The relevant recitals and covenants in the indenture reads as under:
"AND WHEREAS the Promoters/Developers have informed the Acquirer that the acquirer of the terrace flat i. e. the flat on the 4th floor of the proposed building to be constructed on the said property shall have an exclusive right to use and enjoy the terrace area on the 4th floor level to the exclusion of all other acquirers of flats/units in the proposed building. CLAUSE 3. The Developers shall construct the said building consisting of ground floor and four upper floors on the said property in accordance with the plans, designs and specifications approved by the Municipal Corporation of Greater Bombay and which have been seen and approved by the Acquirer, with only such variations and modifications as the Developers may consider necessary or as may be required by the concerned local authority the Government to the made in them or any of them Provided that the Developers shall have to obtain prior consent in writing of the Acquirer in respect of such variation or modifications, which may adversely affect the flat of the Acquirer. The Developers have informed the Acquirer and the Acquirer is aware that the Developers have already constructed rsk 12 of 35 FA-530-2018-16F.doc the ground floor and the four upper floors of the said building and that only certain internal work remains to be executed.
6.The Developers hereby declare that the floor space Index available in respect of the said property is 662.20 square meters only and that the same will be utilised by the Developers in the said building to be constructed on the said property as mentioned in the recitals hereinabove and that no part of the said floor space Index has been utilized by the Developers elsewhere for any purpose whatsoever. In case any part of the said floor space index has been utilised by the Developers elsewhere, then the Developers shall furnish to the Acquirer all the detailed particulars in respect of such utlization of the floor space Index by the Developers. In case while developing the said property the Developers have utilised any floor space index of any other land or property by way of floating floor space index then the particulars of such floor space index shall be disclosed by the Developers to the Acquirer. The residual F.S.I. in the said property not consumed will be available to the Developers till the registration of the society and the registration of a Deed of Conveyance of the said property and the building to the constructed thereon, whichever is later, whereas after the registration of the society and the Deed of Conveyance, the residual F.S.I. shall be available to the society. ( Emphasis supplied)
35. IT IS HEREBY EXPRESSLY AGREED that so Iong as it does not in any way affect or prejudice the rights hereunder granted in favour of the Acquirer in respect of the said premises the Developers shall be liberty to sell, assign, mortgage or otherwise deal with or dispose of their right, title or interest in the said rsk 13 of 35 FA-530-2018-16F.doc property or any part thereof or in the said building being constructed by the Developers. The developers shall be free to construct any additional structures like sub-station for electricity, Co-operative Society's office, co-operative departmental stores, temple or place of workshop, covered and enclosed garages in open compound, underground and overhead tanks, structure for watchmen's cabin, toilet units for domestic servants, septic tank and soak pits, the location of which are not particularly marked or shown upon the ground floor plans or lay- out plans of the said property. The Acquirer shall not interfere with the said rights of Developers or obstruct the Developers in the exercise of such rights whether by way of any disputes raise of Court Injection under Section 7 of the Maharashtra Ownership Flats Act and/or under any other provision of law or otherwise however. The Developers shall always be entitled to sign on behalf of the Acquirer undertakings and indemnities required by the Municipal Corporation or any other State or Central Government or Competent authorities under any law concerning construction of buildings for implementation of their scheme for development of the said property.
38. The Acquirer shall be liable to pay all the costs, charges and expenses for stamp duty and registration charges and for lodging this agreement for registration and having the same registered and shall indemnify the Developers and shall keep the Developers indemnified at all times in respect thereof and also in structures and storeys on the said building which shall be the property of the Developers and the Developers will be entitled to dispose of the same in such manner as they deem fit and the Acquirer shall have no objection against the same. If any rsk 14 of 35 FA-530-2018-16F.doc additional F.S.I. is available to the Developers before the execution of the Conveyance in favour of the proposed society/limited company/corporate body, the Developers shall be entitled to utilize the same and also to sell and dispose off the premises that may be constructed by utilising such additional F.S.I. irrespective of the fact that the premises and/or the management of the said building has been handed over to or taken over by the Co-operative Society limited company/corporate body, the developers shall be entitled to utilise the same and also to sell and dispose off the premises that may be constructed by utilizing such additional F.S.I. irrespective of the fact that the premises and/or the management of the said building has been handed over to or taken over by the Co-operative Society/limited Company/corporate body or ad-hoc committee or any other body of such purchasers."
11. Clause 6 of the Agreement reproduced above indicates that the entitlement of the parties to the unconsumed residual FSI is based on the happening of certain event i.e. the registration of Society or registration of Conveyance Deed whichever is later. In the instant case, the Deed of Conveyance was already executed in favour of the proposed Plaintiff Society in the year 1989 whereas the registration of the Society has taken place in the year 2006. In the cross examination, DW-1 has admitted that the Society is the owner of the suit land.
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12. The flat purchaser's agreement dated 11 th July, 1998 has been executed under Section 4 of MOFA. Section 10 of MOFA obliges the Promoter to form a Co-operative Society as soon as the minimum number of members required to form the Co-operative Society had taken flats. Rule 8 provides for the application for registration to be submitted by Promoter within four months thereof. Admittedly in the present case, there is non compliance by the Defendants in complying with the obligations under Section 10 of MOFA read with Rule 8 of Rules of 1964.
13. There is no evidence led by the Defendant No 3 that the Society could not be registered as mandated by the statutory provisions of MOFA. There was thus a statutory obligation on the Promoter to register the Society and admittedly there is a default. The Promoter cannot be permitted to take advantage of its own wrong and then claim right to the unconsumed residual FSI on the basis that as the Society was not registered till the year 2006 in terms of Clause 6 of the Flat Purchasers agreement, the Promoter will be entitled to the unconsumed residual FSI. If such contention is accepted, the same would amount to putting a premium on illegality and the Promoter can postpone the registration of the Society infinitely to take advantage of the unconsumed FSI by incorporating such clauses in the Flat Purchasers Agreement.
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14. Although the portion of Clause 4 of prescribed Form V which provided for the residual FSI to be available to the Society after registration was deleted vide amendment to the Rules notified on 6 th March, 1997, Clause 6 of the Flat Purchasers Agreement in the present case is couched in similar words. In case of Ravindra Mutneja and others vs Bhavan Corporation and others 2003(5) Mh.L.J 23, the learned Single Judge of this Court has held thus:
"The real issue as has been noted earlier is what is the stage up to which the developer/owner can put up additional construction after the building in terms of the registered plan has been constructed and occupied. In my opinion, once the buildings shown in the approved plan submitted in terms of the regulations under an existing scheme filed before the authorities under MOFA Act, have been completed and possession handed over, the builder/owner cannot contend, that because he has not formed the society and/or not conveyed the property by sale deed under the Act he is entitled to take advantage of any additional F.S.I. that may become available because of subsequent events. That would be so at the stage the building is under construction or the building is not completed and/or purchasers are not put in occupation provided such building forms part of the development plan and/or layout plan already approved. Subsequent amendment of the layout plan after the building plan is registered under MOFA, without the consent, prima facie, of the flat purchasers would not be permissible. It may be possible to accept that the development plan could be rsk 17 of 35 FA-530-2018-16F.doc modified as long as the right of the purchasers and the benefits which they are entitled to including recreational and open areas are not effected by the revised development plan. Once the building is completed and the purchasers are put in occupation in terms of plan filed and the time to form the society or convey the property in terms of the agreement or the rules framed under MOFA is over the permission of such purchasers would be required. (Emphasis supplied) In the instant case, the building completion certificate for the plaintiffs building, was issued in the year 1997. The builder/owner defendant Nos. 1, 3 and 4 had to put up the construction, based upon the permission/license granted. The defendant Nos. 1, 3 and 4 had to construct the building and to convey the title by sale deed in terms of Rule 9. If property had been conveyed, prima facie the remaining FSI or FSI which become subsequently available on the facts of the case, would be to the society to whom the land had to be conveyed. The record shows that the building was approved in December, 2001. It cannot prima facie, be said that defendant Nos. 1, 2, 4 and 5 have any rights under which they are entitled to put up an additional building contrary to section 7A of the Act." (Emphasis supplied)"
15. The Learned Single has held once the building shown in the approved plan has been completed and possession handed over, the builder cannot contend that because he has not formed the society and rsk 18 of 35 FA-530-2018-16F.doc not conveyed the property under MOFA, he is entitled to take advantage of the additional FSI that may become available because of subsequent events. Once the building has been completed and the purchasers are put in possession in terms of plan filed and time to form the society or convey the property in terms of the agreement or the rules framed under MOFA is over, the permission of such purchasers would be required.
16. In Noopur Developers vs Himanshu V. Ganatra (supra), this Court, while considering the clauses in the agreements executed in that case giving right to promoter to carry out additional construction by reason of additional FSI being available, has held that the clauses has to be considered in context of requirement of disclosure of the entire scheme to be carried out in the layout. The Promoter is required to make disclosure concerning the inherent FSI and also at the stage of layout plan he is required to declare whether the plot in question in future is capable of being loaded with additional FSI/floating FSI/TDR. Necessarily therefore, if the entire scheme including the information about TDR/FSI is not disclosed then the promoter loses the right to use the residual FSI.
17. Considering the settled position in law the reliance by Mr. Sawant on clause 3 of the Flat Purchaser's agreement is clearly misplaced.
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18. Plaintiff No 12, who has been examined on behalf of the Plaintiffs, has deposed that the Society had purchased the suit property vide agreement dated 16th August 1989 from the vendors. He has further deposed that the Plaintiffs are owners of the suit property and has produced the Agreement dated 16 th August, 1989 and the property card showing the name of the Plaintiffs as owners. In cross examination he has admitted that on the day of conveyance i.e. 16 th August, 1989, the Society was not registered.
19. Exhibit -32 i.e. the Agreement dated 16 th August, 1989 has been executed between the owners and the Defendants in their capacity as Promoters of the proposed Plaintiff Society. The relevant Recitals in the Agreement dated 16th August, 1989 reads thus:
"AND WHEREAS the Purchasers will hold the said property for and on behalf of and as the express trustees of the said Shri Mahavir Terrace Co-operative Housing Society (Proposed) or a society which may be incorporated with any other name by the Promoters for the purpose of the said property described in the First Schedule hereunder written.
"AND WHEREAS the Purchasers proposed to incorporate a co- operative society comprising as its members all the acquirers/allottees or purchasers of flats/units proposed to be constructed on the said property by the Purchasers and have therefore requested the Vendor and the Legatees to execute this Deed of Conveyance in favour of the Purchasers in their capacity as such promoters of the proposed Shri Mahavir Terrace Co-
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operative Housing Society or a society which maybe formed and registered with any other name, which the Vendor and the Legatees have agreed to do in the manner hereinafter appearing:"
20. It is clear from the above Recitals that the Deed of Conveyance was executed by the Defendants as promoters of the Plaintiff Society and for and on behalf of and as the express trustees of the Plaintiff Society. There was thus a Conveyance in the year 1989 itself by the erstwhile owners in favour of the proposed Plaintiff Society through the Defendants as trustees on behalf of the proposed Society. By the said Indenture the suit property i.e. land ad-measuring 662.20 square meters was thus conveyed in favour of the proposed Plaintiff Society in the year 1989 itself. The Defendants thereafter constructed the building and entered into flat purchaser's agreements with the individual members under MOFA.
21. Clause 38 governs the entitlement of the parties to the additional FSI which may be available to the Developers before the execution of the Conveyance in favour of the proposed society/limited company/corporate body, in which case the Developers shall be entitled to utilise the same and to dispose off the premises constructed. The conveyance has already been registered in favour of the proposed Society on 16th August, 1989 and therefore there is no rsk 21 of 35 FA-530-2018-16F.doc question of applicability of Clause 38 of the Indenture dated 11 th July, 1998.
22. In his evidence, the Defendant No 3 has deposed that after the construction of the building, the entire TDR of 662.2 square meters plus balance FSI of 57.10 square feet from the 662.2 square meters FSI was available for construction with the Defendant. The Defendants therefore proposed to utilise the additional FSI as well as the unconsumed residual FSI. The additional construction is thus sought to be carried out by utilising the additional FSI in form of TDR of 662.2 square meters available after construction. The entitlement to the TDR of 662.2 square meters is governed by Clause 38 of the Agreement dated 11th July, 1998 and after the conveyance is executed in the year 1989 in favour of proposed Society, the Defendants are not entitled to the additional FSI.
23. The construction is proposed to be carried out by the Defendants by utilising the unconsumed residual FSI and the additional FSI available. As far as the unconsumed residual FSI is concerned, the same will be available to the Defendant only till the registration of the Society or the registration of conveyance whichever is later. As far as conveyance is concerned, the Agreement dated 16th August, 1989 has been executed by the Defendants as promoters of the proposed Society and as trustees for and on behalf of the Society. The property rsk 22 of 35 FA-530-2018-16F.doc card stands in the name of the Society. The property thus stood conveyed in the year 1989 in favour of the Society through the Defendants as promoters and trustees.
24. As far as registration of Society is concerned, the Defendants having failed to comply with the mandatory statutory obligations under Section 10 MOFA read with Rule 8 and having failed to get the Society registered cannot take advantage of its own default and claim entitlement to the unconsumed residual FSI without the consent of Plaintiffs for the reason that the Society was not registered till the IOD was obtained in the year 2005. As held in Ravindra Mutneja (supra) once building is completed and purchasers put in occupation and time to form Society is over, permission of such purchasers would be required.
25. Accordingly, I answer Point No (i).
AS TO POINT NO (ii):
26. In the present case, in the year 1992, the flat purchasers were put in possession of their individual flats and in the year 2003, the management of the proposed Society was handed over to the members. Clause 3 of the Flat Purchasers Agreement reads thus:
"The Developers shall construct the said building consisting of ground floor and four upper floors on the said property in rsk 23 of 35 FA-530-2018-16F.doc accordance with the plans, designs and specifications approved by the Municipal Corporation of Greater Bombay and which have been seen and approved by the Acquirer, with only such variations and modifications as the Developers may consider necessary or as may be required by the concerned local authority the Government to the made in them or any of them Provided that the Developers shall have to obtain prior consent of the Acquirer in respect of such variation or modifications which may adversely affect the flat of the Acquirer. The Developers have informed the Acquirer and the Acquirer is aware that the Developers have already constructed the ground floor and the four upper floors of the said building and that only certain internal work remains lo be executed."
27. The plans annexed to the flat purchasers agreement denotes that the sanctioned plans which were disclosed to the flat purchasers were for ground plus four upper floors which was disclosed to the flat purchasers.
28. PW-1 has deposed that the Defendants had commenced construction of the suit property without the consent of the members. In the cross examination, the case of the Defendants was that there was no need to take consent by reason of Clause 35 of the flat purchaser's agreement. PW-1 has denied having knowledge as to whether the Plaintiff No 1 and 2 had given consent by letter dated 27 th March, 2002. PW-1 has admitted that the document dated 2 nd February, rsk 24 of 35 FA-530-2018-16F.doc 2005 bears his signature. DW-1 in his evidence has deposed that Plaintiff No 1 and 2 had given their No Objection to construction of additional floors and by letter dated 2 nd February, 2005 he had informed all members about proposed construction, which letter was duly received by all members. DW-1 has admitted in cross examination that immediately after sale of the flats to Plaintiff Nos 1 and 2, their consent was taken for additional construction on 27th March, 2002.
29. The Defendants rely on Clause 6, 35 and 38 of the Flat Purchaser's agreement, Consent letter of the Plaintiff No 1 and 2 dated 27th March, 2002 and the letter dated 2nd February, 2005. Clause 35 of the Flat Purchasers agreement reads thus:
35. IT IS HEREBY EXPRESSLY AGREED that so Iong as it does not in any way affect or prejudice the rights hereunder granted in favour of the Acquirer in respect of the said premises the Developers shall be liberty to sell, assign, mortgage or otherwise deal with or dispose of their right, title or interest in the said property or any part thereof or in the said building being constructed by the Developers. The developers shall be free to construct any additional structures like sub-station for electricity, Co-operative Society's office, co-operative departmental stores, temple or place of workshop, covered and enclosed garages in open compound, underground and overhead tanks, structure for watchmen's cabin toilet units for domestic servants, septic tank and soak pits, the location of which are not particularly marked or shown upon the ground floor plans or lay-
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out plans of the said property. The Acquirer shall not interfere with the said rights of Developers or obstruct the Developers in the exercise of such rights whether by way of any disputes raise of Court Injection under Section 7 of the Maharashtra Ownership Flats Act and/or under any other provision of law or otherwise however. The Developers shall always be entitled to sign on behalf of the Acquirer undertakings and indemnities required by the Municipal Corporation or any other State or Central Government or Competent authorities under any law concerning construction of buildings for implementation of their scheme for development of the said property.
30. Under Section 7 of MOFA, after the plans and specifications are disclosed there can be no alteration or additions in the structure of the building without the previous consent of all the persons who have agreed to take the flats in such buildings. By virtue of amendment to Section 7A, it was clarified that Clause (ii) of sub-section 1 of Section 7 will not apply in respect of construction of any other additional building or structures constructed in the layout. The statutory provisions mandates previous consent of all the flat purchasers before commencing additions in the structure of the building. In the instant case, the Defendants proposed to construct additional floors on the same structure. One of the conditions of C.C. is submission of consent letter of all members to the proposed addition.
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31. As far as Clause 35 of the Agreement is concerned, the same provides that the Developer shall be free to construct any additional structure such as sub station, Society office, departmental stores, garages, underground tanks etc for the construction of which the flat purchaser will not create any obstruction. The said Clause cannot constitute a consent by the flat purchasers for construction of additional floors on the existing structure of the building. Sufficient guidance can be taken from the decision in Bajranglal Eriwal and others vs Sagarmal Chunilal and orthers 2008(5) Mh.L.J. 571 where the Court has held as under:
"The provisions of the Act, as construed now by the judgment of the Supreme Court, would leave no manner of doubt that the statutory bar upon the promoter altering the structure of a flat agreed to be purchased under Clause (i) of sub-section (1) of section 7 and of making any other alterations or additions in the structure of the building under Clause (ii), can be lifted only subject to a disclosure by the developer of the entire project or scheme. The previous consent that is contemplated by sub- section (1) of section 7 must be an informed consent. An informed consent is one which is freely given, after a flat purchaser is placed on notice by a complete and full disclosure of the project or scheme which the builder intends to implement. The consent that is contemplated by sub-section (1) of section 7 is, therefore, a specific consent which is relatable to the particular project or scheme of the developer which is intended rsk 27 of 35 FA-530-2018-16F.doc to be implemented. The observations of the Supreme Court in Jayantilal Investments, bring about a balance between the rights of the promoter on the one hand and a flat purchaser on the other. There is a statutory embargo upon the making of alterations either in an individual flat or in respect of the structure of the building after the disclosure of the plans and specifications of the building. This embargo was introduced by the legislature specifically to obviate the kind of malpractices that were taking place. The lifting of the embargo is conditional on the grant of previous consent. The lifting of the embargo must be confined strictly within the parameters which have been envisaged by the legislature and it is in that context the Supreme Court has held that the consent can be regarded as valid if there has been a full disclosure by the developer of the entire project which he has to implement. Thus construed, there can be no manner of doubt that it is not open to a developer/promoter to rely upon a general consent. To allow such generalized consents to operate would defeat the public policy which underlies the provisions of sub-section (1) of section 7 as interpreted by the Supreme Court. It is a well settled principle of statutory interpretation that the interpretation which the Court places on a statute must be purposive, so as to achieve the object and intent of the legislature. The Maharashtra Ownership Flats Act, 1963, is an Act to regulate the promotion of the construction of the sale and management, and the transfer of fiats on ownership basis. The preamble specifically provides that the State Government was conscious of the fact that on account of an acute shortage of housing, there were "sundry abuses, malpractices and difficulties relating to the promotion of the rsk 28 of 35 FA-530-2018-16F.doc construction of, and the sale and management and transfer of flats taken on ownership basis." The legislature has found that such malpractices not merely existed, but they were increasing. It is in this background that the Court must adopt a purposive interpretation of law and that interpretation which would defeat the object of the legislature must be eschewed."
(Emphasis supplied)
32. In Neena Sudarshan Wadia vs Venus Enterprises 1984 (2) Bom.C.R 505 , the Court held as under:
"Now, we have to understand the meaning of the word 'consent' as used in Clause (ii) of sub-section (I) of section 7. After the plans and specifications of the building as approved by the local authority are disclosed or furnished to a person who agrees to take a flat from the promoter, a prohibition is claimed on the promoter not to make any alterations in the building or constructed additional structures. This prohibition can be lifted if before the promoter carries out the alterations in the building or before he starts the work of additional construction, the promoter obtains the consent of all the persons who have agreed to take the flats. For the purpose of obtaining consent, a promoter must ask the flat owners for their permission and reveal to them the nature of the proposed alterations to the building or of the additional structures to be constructed as, without such disclosure, the flat owners cannot know for what work the permission is sought and for what work they are required to consent. Again in response to a request for consent, there must be an affirmative acceptance from all the persons rsk 29 of 35 FA-530-2018-16F.doc who have agreed to take the flats. The word "consent" in the context of the section does not mean implied consent such as by conduct or acquiescence or circumstance that might be consent. Consent in this section is to be understood to mean as positive consent to specific items of work or alteration to be carried out or particular additional structure to be built by a promoter. This seems to be the object of enacting these provisions of obtaining previous consent of the flat owners as otherwise the malpractices and irregularities intended to be eradicated by this enactment would continue to flourish and the promoters would not be deterred by the penal provision of section 13. A blanket consent or authority obtained by a promoter at the time of entering into an agreement for sale or at the time of handing over possession is not the consent contemplated by section 7(I)(i) or (ii) for such a blanket consent or authority would sew up or nullify these provisions." (Emphasis supplied)"
33. The settled legal position is that for the consent to be an informed consent as contemplated by Section 7(1) of MOFA, there must be full and complete disclosure of the nature and extent of construction proposed by the developer. There cannot be an implied consent such as by conduct or acquiescence. Similarly the blanket consent obtained at the time of entering into flat purchasers agreement or at the time of handing over possession is not held to be consent under Section 7(1)(i) of MOFA.
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34. Examining the facts of the present case in light of the settled position in law, as discussed above, Clauses 6 and 38 of the Flat Purchasers agreement which merely refers to the entitlement of the parties to the residual and additional FSI without anything further does not amount to an informed consent as to the proposed construction. Admittedly the sanctioned plan placed before the flat purchasers at the time of execution of the flat purchaser's agreement was for construction of ground plus four upper floors.
35. The Consent letter dated 27th March, 2002 of the Plaintiff No 1 and 2 has been admitted by DW-1 to have been obtained at the time of sale of the flat. The contents read as under:
This is to record that we have no objection to your utilising TDR/FSI and constructing additional floors on the building, KADAMBARI, at Bullsroyee Colony Road, Vakola Bridge, Santacruz East, Mumbai 400 055 as long as the same does not affect our rights to the ground floor Flat No 1 or to the open car park space sold by you to us."
36. The contents of the communication dated 2 nd February, 2005 addressed by the Defendants the residents of Kadambari reads thus:
"This is to inform you that as a Constituted Attorney Owner of Smt. Ruby Fernandes, I propose to construct part of 4 th floor and 5th floor over the existing building of Ground plus three floors rsk 31 of 35 FA-530-2018-16F.doc plus part 4th floor.
Propose construction of part 4th floor and 5th floor will be occupied by me.
This is for your information."
37. The communication is then signed by the members as token of receipt. At the relevant time when the communication dated 27 th March, 2002 and 2nd February, 2005 were addressed, the plans were not sanctioned for the additional construction as IOD was issued on 31st January, 2005. The communication dated 27 th March, 2002 was issued at the time of taking possession of the flat and a blanket consent was taken, which does not satisfy the requirement as contemplated by Section 7 of MOFA. The communication dated 2 nd February, 2005 is merely an information given in common to all residents of the building and the signature by the recipients is only token of receipt of the communication. The communications cannot constitute consent much less an informed consent in the absence of full and complete disclosure of the exact nature of the proposed construction.
38. In Grand Paradi Co-operative Housing Society Limited & Ors. vs. Mont Blanc Properties & Industries Pvt. Ltd. & Anr. 10, on which reliance has been placed by the City Civil Court, the Division Bench of 10 2011 (5) Bom. C. R. 249 rsk 32 of 35 FA-530-2018-16F.doc this Court was considering the Appeal against the Notice of Motion seeking an order of temporary injunction. In facts of that case, the injunction was sought against carrying out further construction on vacant land without obtaining previous consent of the members of the Society. The Division Bench was concerned with the position where the Developer was seeking to put up additional structure and considering the position which existed prior to the amendment of 1986 to Section 4 of the MOFA Act by which Form No.V came to be prescribed and in the absence of any Form prescribed under Section 4 held that agreement entered between the builders and flat purchasers would be valid and binding between the parties. The Division Bench in that fact situation held that consent was given by the members of the Society in the year 1971 with full knowledge of the law then in force and they cannot be permitted to resile from such express consent unless they make out a case that their consent was obtained by illegal means and therefore they will be bound by the consent. The Court was considering whether prima facie case has been made for the entitlement of the Society to the entire land and the building and the findings of the Court are prima facie findings at the interim stage. The facts are clearly distinguishable as the case was covered by Section 7-A of MOFA and not Section 7 of MOFA.
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39. In case of Jamuna Darshan Co-op Hsg Society Ltd and Ors vs M/s JMC & Meghani Builders and Ors (supra) , the Court was considering an application seeking temporary injunction from carrying out construction. In that case, the Learned Single Judge held that the flat purchaser cannot be heard to obstruct the development activity in relation to an open plot so long as their original structure and flats remain unaltered and undisturbed. Pertinently, the Learned Single Judge did not accept the contention about non requirement prior consent of the flat purchaser by observing that Section 7 of MOFA protects the rights of flat purchaser to the limited extent of any alteration in the structure described in the agreement in respect of the flats which are agreed to be purchased by them. The decision would assist the case of the Plaintiff that as addition was proposed to the existing structure of the flat purchasers, the informed prior consent was necessary.
40. The blanket consent obtained under the Flat Purchasers Agreement and the communications dated 27 th March, 2002 and 2nd February, 2005 cannot constitute an informed consent as contemplated under Section 7 of MOFA. The Defendants having failed to obtain prior consent of the members of the Plaintiff Society were not entitled to put up the additional construction on the existing structure.
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41. Point No (ii) is answered accordingly.
42. In light of the above, the following order is passed:
:ORDER:
(a) First Appeal is allowed;
(b) S. C. Suit No.5573 /2006 stands decreed in terms of prayer clauses (a) and (d);
(c) Decree to be drawn up accordingly.
[Sharmila U. Deshmukh, J.] rsk 35 of 35 Signed by: Rajeshwari S. Karve Designation: PA To Honourable Judge Date: 18/10/2024 18:47:55