Orissa High Court
Z Estates Pvt. Ltd vs Z1 Resident'S Welfare on 11 March, 2022
Author: M.S. Raman
Bench: M.S. Raman
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.A. No.204 of 2022
Z Estates Pvt. Ltd. .... Appellant
Mr. Saurjya Kanta Padhi, Senior Advocate
with Mr. Satya Smruti Mohanty, Advocate
-versus-
Z1 Resident's Welfare
Association, Bhubaneswar
& Others .... Respondents
Mr. Sukanta Kumar Dalai, Advocate
(for Respondent No.1)
Mr. Dayananda Mohapatra, Advocate
(for Respondent No.2/B.D.A.)
Mr. L. Samantaray, AGA
(for Respondent No.3/State)
CORAM:
JUSTICE JASWANT SINGH
JUSTICE M.S. RAMAN
ORDER
Order No. 11.03.2022
01. 1. This matter is taken up through Virtual/Physical mode.
2. The present intra-court appeal has been filed against the interim order dated 17.02.2022, wherein the learned Single Judge has passed the restraining order for carrying out the construction in the project land (measuring 26.184 acres) under the approval dated 20.06.2016 (wrongly recorded as 20.08.2016 in the order) issued by the Bhubaneswar Development Authority and also directed not to create any third party rights qua the project land till the next date of listing on 22.03.2022.
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3. Learned counsels for the appellant and the Respondent No.1 have been heard at length including on grant of interim stay.
Learned counsel for the appellant states that a Letter Patent Appeal/Writ Appeal is maintainable against an interim order if it against well settled position of law or suffers from an error apparent on the face of the record or may adversely prejudice the rights of the parties against whom an interim order has been passed as in the present case.
4. It is undisputed that the present development is being carried out by the appellant-a licenced colonizer (hereinafter referred to as "Developer") over a project land measuring 26.184 acres wherein 28 towers approximately 1550 apartments are to be constructed/ developed for the residential apartments along with related amenities including commercial and retail areas called "Z-ONE ("Project") in phases over a period of time. Respondent No.1 (writ petitioner before the learned Single Judge) is a Resident Welfare Association (hereinafter referred to as "Association") of the flats/ allottees of the eight (8) towers constructed in Phase-I of the Project measuring 4.193 acres. The Association by filing the writ petition has challenged the approval letter dated 20.06.2016 issued by the Bhubaneswar Development Authority (BDA), whereby inter alia permission for construction as per the laid down // 3 // parameters has been granted for Phase-II. Further challenges to the Memo dated 10.12.2021, whereby the BDA has rejected the complaints of the Association regarding flouting of terms and conditions of the granted permissions, by the Developer.
5. The case of the Association in sum and substance is that while granting approval letter dated 20.06.2016 additions and alterations have been permitted in the constructions to be made for Phase-II, and the rights of the members of the Association (of Phase-I) in the proportionate and undivided interest in the entire project land have been curtailed while restricting it to the area measuring 4.193 acres of Phase-I, without the consent of the allottees of the Association.
6. Per contra, the stand of the Developer is that the writ petition after delay of five years of approval letter dated 20.06.2016 apart from involving interpretation of the agreement to sale of the year 2011 and Sale Deeds of the year 2016 in favour of the members of the Association would not be maintainable. The stand of the Developer is that the projected claim of the Association is contrary to Clauses 1(viii), 1(ix), 10, 25, 31, 37(a) and 45 of the agreement for transfer and Clauses A, B and C of the Sale Deed executed in the year 2016. It is not disputed that no alterations in the constructions in Phase-I have been made or permitted as also there is no change in the proportionate and // 4 // undivided interest of the common areas of the allottees of Phase-I, i.e., the Association, for which the costs have been loaded on them as per their agreements of Sale/Sale Deeds. Furthermore, the entire Project Land (26.184 acres) will have development of other Towers/ units in Phases (like presently ongoing Phase-II) over and above the development of Phase-I wherein allotments have been/will be made to the allottees who will also have share in the common areas and facilities declared for the entire 26.184 acres and share of such common areas and facilities common for the entire 26.184 acres cannot be restricted to the allottees of Phase-I. It is also contented by the Developer and not disputed by the Association that the construction activity being questioned now in the year 2022 is ongoing from the year 2016 onwards and third party rights on such development (namely development of Phase-II of the Project land) have been created in favour of 589 allottees (who are not party in the present petition), who have paid 95% of their sale consideration and are awaiting the possession of their Apartments developed as per the approved plans, norms and specifications without any violation.
It is further contended that the learned Single Bench in the interim Order dated 17.02.2022 has based its conclusion on the fact that the Approvals of the year 2011 and Approvals of year 2016 have some similar plot numbers but the Single Bench has erred in // 5 // not considering that the 2016 Approval is only a revised approval of the Plans approved in the year 2011 wherein :
• Phase-I buildings regarding which the "As Built" plans submitted regarding development undertaken and completed over a portion (4.193 acres) of the Project Land were approved;
• Approval regarding the upcoming Phase-II which was to be constructed on another portion of land in the project land, thus the Plot Numbers (constituting the completed development of Phase-I and to be constructed Phase-II) would naturally be common. It has also been categorically asserted by the Developer that while undertaking the development in Phase-II, the buildings of Phase-I has been kept intact and undisturbed as also the proportionate and undivided interest of the flat owners of Phase-I of the common areas has not been changed/altered.
7. Fundamental to the development of the Group Housing Projects and the rights of the Apartment Holder in the property constituting the Group Housing, the Apartment (Dwelling Unit) is made a separate entity and the common areas and facilities are provided within and outside the building which are necessary for the usage and enjoyment of such apartment and in such common areas and facilities, the Apartment // 6 // Owners have proportionate rights and Association of Apartment owners have the right to enjoy and administer.
It is the matter of common knowledge and established fact that the development of the Group Housing Complexes on a larger development area, consisting of multiple towers are developed in a phased manner. In a phased development, normally some of the towers are launched and sold by the Developer and further towers in the Complex are developed as future developments over a period of time to cater to the financial backups to carry out expansive development activities, covering the land cost, need/demand basis as also the payment of the Government charges and dues. After a phase/some of the towers are completed and the internal services have been laid, upon the grant of occupancy certificate, the Developer provides for the rights of the allottee qua the apartment as also for the common areas and facilities necessary for the enjoyment and usage of that apartment. Thus, at that stage, the rights of the Apartment owners are frozen qua his apartment along with undivided proportionate share in common areas facilities in that phase/portion for which he has paid sale price, which becomes an alienable and transferable entity, awaiting the freezing of rights qua common areas and facilities in entire Project land upon completion of future development in the Project Land, if so necessary and provided by the Developer towards the usage and enjoyment of each // 7 // Tower and the Apartment/Unit therein. It is also common knowledge that as and when Occupancy Certificate for further towers in the Complex is received, the declaration of the rights of the allottees for towers in that Phase is provided. It is with such mechanism, the development made in phases in the entire project land balances out the rights of apartment owners of the already developed phases with the rights of the Apartment Owners in the developing/to be developed phases.
8. Thus, the present Phased development made on the basis of the approved plans, norms and sanctions cannot be faulted, unless shown to be in contravention of the building norms, approved plans and sanctions or in any manner curtailing the usage/enjoyment of the Unit/Apartment in the already developed Phase-I as in the present case.
The reliance on the judgment of "Supertech Limited versus Emerald Court Owner Resident Welfare Association & Others" (2021) 10 SCC 1, by the Association is also not applicable in the facts of the present case as there is no contention that the Developer has raised the construction in the area of 4.193 acres which has been provided/declared for the Phase-I having allotments by the allottees of Association and have violated the building bye-laws/ regulations in carrying out development in the Phase-II of the Project land, especially when there is a categoric // 8 // stand of the Developer that while carrying out the development in Phase-II the development carried out in Phase-1 including proportionate undivided share in common areas has been kept undisturbed and untouched as also no change in the layout in the Plans as approved in 2011 has been made and the area of the Association in Phase-I stands frozen. On the specific query being raised to the counsel for the Appellant - Developer that whether any cost of the Project Land over and above 4.193 acres has been charged from the allottees of Phase-1 which was responded in the negative and also agreed by the counsel for the Association/Respondent No.1.
9. In fact, learned counsel for the Association very fairly stated that challenge primarily is directed against the BDA summarily rejecting the complaint of the Association in respect of the deficiencies/illegalities committed by the Developer in carrying out the constructions.
We find that challenge to the revised Plans approved in the year 2016 are in fact the plans wherein the completed development of the Phase-I is also approved through the "As Built" drawings and as such the impact of the challenge to the Plans of 2016 is also having adverse impact on the completed development/Towers possessed by the allottees/ members of the Association.
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10. It is settled law that the bilateral agreements executed inter-se between the private entities are in private law domain and are not amenable to the jurisdiction of the High Court by invoking the public law domain under Article 226 of the Constitution of India. It is also an uncontroverted fact that the Association towards their rights and claims have already approached the Real Estate Regulatory Authority under the Real Estate (Regulation and Development) Act 2016, this court is not transgressing in to the alternative remedies available and availed by the Association.
11. In the facts so mentioned in the appeal and discussed above, the balance of convenience lies in favour of the Developer and the prima facie case is made out in favour of the Developer against the restraining order for construction activity on the project land (other than the land in respect of Phase-I of the project land). The loss being suffered by the Developer as well as the allottees of Phase-II caused due to the escalation of prices of commodities involved in construction activity, the adverse effect on stoppage of finishing/completion works on the partly constructed towers of Phase-II and the right to occupy of the 589 allottees of the apartments in Phase II of the development work, whose rights are created way back in the year 2016 and who are not even parties before writ court to indicate their stand against the adverse // 10 // order are vital considerations weighing in our mind towards the consideration of the present appeal.
12. Issue formal notice for 11th of April, 2022.
Mr. Sukanta Kumar Dalai, learned counsel for Respondent No.1, Mr. Dayananda Mohapatra, learned counsel for Respondent No.2/BDA and Mr. L. Samantaray, learned counsel for Respondent No.3/ State appear and waive of notice on behalf of them. Let requisite number of copies of the Writ Appeal be furnished to them within three working days.
13. In view of the above, the operation of the interim order 17.02.2022 is stayed and an opportunity is given to the parties to submit any additional documents/ compilation for the appeal to be taken up for final disposal on 11.04.2022. It is clarified that the present stay shall not preclude the proceedings to continue before the learned Single Bench in the writ petition in any manner.
14. Urgent certified copy of this order be granted on proper application.
(Jaswant Singh) Judge (M.S. Raman) Judge March 11th 2022 Cuttack AKK