Rajkumar Gulati & Ors. v. S.D. Corporation Private Ltd. & Ors.

15. Plaintiffs allege that the project has been substantially recharacterized and expanded to consist of six distinct buildings as against only 2 disclosed buildings of Towers A and B. That under 2009 disclosed Page Nos. 8 of 170 plan, only three sale buildings were to come up viz. Tower-1 (Wing-A), Tower-2 (Wing-B) and space for Tower-C without disclosing any details. However, in the 2024 plans, now in addition to Towers-1 and 2 (Wings-A and B), following additional constructions have been put up/are sought to be put up:

(i) Composite building (Wing-B) ground + 49 floors named ‘Imperial Edge’.

(ii) Sale Wing-C and Wing C-1

(iii) Townhouse (Wing-D).

16. According to the Plaintiffs, the third Tower disclosed in layout plan of 2009 without providing any further particulars has indeed been constructed by the developers in the form of the building named ‘Imperial Edge’ and that therefore no further sale building can be constructed in the layout.

17. Defendant No.5-Condominium called upon Defendant No.1 by letter dated 28 April 2025 to comply with its obligations under MOFA and convey the entire land and the building. Defendant No.1 gave reply dated 25 June 2025 refusing to do so and justifying its actions. Plaintiffs have accordingly filed the present Suit seeking following prayers:- (a) That this Hon’ble Court be pleased to direct Defendant Nos/1 to 4 to perform all their statutory obligations under the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1964 including but not limited to

(i) Taking all necessary steps to form or cause to be formed a co-operative housing society of the Flat purchasers; (ii)Thereafter, obtaining and/or causing to be obtained the lease in respect of the land and buildings forming part of the free sale component of the project namely Towers ‘A’ and ‘B’ in ‘The Imperial’ and, upon such lease being granted, transferring the right, title and interest therein, together with all benefits, appurtenances, easements and entitlements attached thereto, Page Nos. 9 of 170 including the common areas and amenities, in favour of the said society, in accordance with the applicable statutes; (iii)Specifically performing the (i)Agreement for Sale dated 25th January 2008 executed between Plaintiff No.1 and Defendant No.1, (ii)Agreement for Sale dated 28th April 2008 executed between Plaintiff No.2 and Defendant No.1, and (iii)Agreement for Sale dated 4th June 2012 executed between Plaintiff No.3 and Defendant No.1, excluding the aspects pertaining to the Club House and other common amenities, for which separate declaratory reliefs have been independently sought; and doing all such acts, deeds and things necessary and expedient in accordance with the sanctioned plan dated 31st December 2009; (iv)Making a full, true and complete disclosure of the status of the construction of Towers ‘A’ and ‘B’ in ‘The Imperial’ including but not limited to the approved plans and sanctions issued to Defendant Nos.[1] to 4, from time to time by the various concerned authorities, including the Slum Rehabilitation Authority (SRA), till date. (b)that this Hon’ble Court be pleased to declared the Impugned Declaration dated 16th October 2012, executed by Defendant No.1 (Exhibit ‘F’) as illegal, void and contrary to law, and forthwith rescind and cancel the same. (c)That this Hon’ble Court be pleased to declare the Impugned Supplemental Declaration dated 30th April 2024, executed by Defendant No.1 (Exhibit ‘Q’) as illegal, void and contrary to law and forthwith rescind and cancel the same; (d)That this Hon’ble Court be pleased to declare that Defendant Nos.[1] to 3 and their servants, agents, persons, claiming through or under them have no right, title or interest in the common areas and amenities forming part of the project, including the Club House comprising Health club, Spa, Swimming Pool, Guest Rooms, Restaurants, and Convenience Stores and all Podium Levels including Levels 5, 6 and 8. (e) That this Hon’ble Court be pleased to declare that the Plaintiffs and other flat purchasers have exclusive share, right, title and interest in respect of the Club House comprising amenities such as a Health club, Spa, Swimming Pool, Guest Rooms, Restaurants, and Convenience Stores and all Podium Levels including levels 5, 6 and 8. (f)That this Hon’ble Court be pleased to restrain Defendant Nos.[1] to 4 or any of them have no right, title or interest in the ‘refuge area’ in Towers ‘A’ and ‘B’ of ‘The Imperial’; (g)That this Hon’ble Court be pleased to restrain Defendant Nos.[1] to 4 by permanent order and inunction from interfering with the possession and management of the affairs of the Club House and including usage Page Nos. 10 of 170 of the same by the Plaintiffs and the other flat purchasers in ‘The Imperial’; (h)That this Hon’ble Court be pleased to restrain Defendant Nos.[1] to 4 by a permanent order and injunction from carrying out any construction of any nature whatsoever in ‘The Imperial’ and the larger plot of CS 725(pt) and 1/725(pt) contrary to the layout plan dated 31st December 2009 (i)That this Hon’ble Court be pleased to restrain Defendant Nos.[1] to 4 by a permanent order and injunction from preventing the Apartment/Flat purchasers, including the Plaintiffs herein, from accessing and using the said podiums and parking in ‘The Imperial’; (j)That this Hon’ble Court be pleased to restrain Defendant Nos.[1] to 4 by a permanent order and injunction from occupying the ‘refuge area’ in Towers ‘A’ and ‘B’ of ‘The Imperial’. (k)That this Hon’ble Court be pleased to pass an order and decree directing Defendant Nos.[1] to 4 to pay to the Plaintiffs a s um of Rs.500,00,00,000/- (Rupees Five Hundred Crores only) as compensation for prolonged delay and continued deprivation caused to the Plaintiffs and other flat purchasers in the performance of their statutory obligations, including but not limited to the formation of a cooperative society, obtaining a lease in respect of the land and building forming part of the free sale component and upon such lease being granted, transferring the right, title and interest therein, together with all benefits, appurtenances, easements, and entitlements attached thereto, and the unlawful retention and commercial exploitation of common areas and amenities. l) That pending the hearing and final disposal of the present Suit, this Hon’ble Court be pleased to appoint the Court Receiver, High Court, Bombay, or any other fit and proper person as Receiver in respect of the Club House, all the Podium Levels including Levels 5, 6 and 8 and the refuge area in the building ‘The Imperial’ with all powers under Order XL of the Code of Civil Procedure, 1908, including the power to take possession thereof and appoint the Plaintiff(s) as agent(s) of the Court Receiver without payment of royalty or other charges. m)That pending the hearing and final disposal of the present Suit, this Hon’ble Court be pleased to order and direct Defendant Nos.[1] to 4 to make a full, true, and complete disclosure of the status of the construction in ‘The Imperial’, including but not limited to the approved plans/sanctions issued to Defendant Nos.[1] to 4 from time to time by various concerned authorities till date; n) That pending the hearing and final disposal of the present Suit, this Hon’ble Court be pleased to restrain Defendant Nos.[1] to 4 from undertaking any construction activities or sale of flats in the free-sale buildings i.e. Tower ‘A’ and ‘B’ of ‘The Imperial’ in contravention to the Page Nos. 11 of 170 vested rights of the Plaintiffs and contrary to the last sanctioned disclosed plan; o)That pending the hearing and final disposal of the present Suit, this Hon’ble Court be pleased to restrain Defendant Nos. 1 to 4, their servants, agents, officers, and assigns from in any manner taking any steps pursuant to or in furtherance of the layout plan dated 31st December 2009 (Exhibit ‘C’) or any part thereof, including carrying out any further construction activities of any nature whatsoever in contravention to the vested rights of the Plaintiffs and contrary to the last disclosed layout plan dated 31 December 2009; p)That pending the hearing and final disposal of the present Suit, this Hon’ble Court be pleased to restrain Defendant Nos.[1] to 4, their servants, agents, officers, and assigns from in any manner taking any steps pursuant to or in furtherance of the layout plan dated 31 December 2009 (Exhibit ‘C’) or any part thereof including alienating, encumbering, selling, transferring, and/or creating any third party rights of any nature whatsoever in ‘The Imperial’ or any part thereof; q) For ad-interim reliefs in terms of prayers (l) to (p) hereinabove; r) For costs; s) For such further and other reliefs as this Hon’ble Court may deem fit and proper in the facts and circumstances of the present case.

18. In their Suit, Plaintiffs have filed Interim Application (Lodg.) No. 25478/2025 seeking temporary injunction in terms of following prayers:- (a) That pending the hearing and final disposal of the present suit, this Hon’ble court be pleased to appoint the Court Receiver, High Court, Bombay, or any other fit and proper person as Receiver in respect of the Club House, the Podium Levels 5, 6, and 8 and the refuge area in the building ‘The Imperial’ with all powers under Order XL of the Code of Civil Procedure, 1908, including the power to take possession thereof and appoint the Applicant (s) as agent (s) of the Court Receiver without payment of royalty or other charges. (b)That pending the hearing and final disposal of the present Suit, this Hon’ble Court be pleased to order and direct Defendant No.1 to make a full, true, and complete disclosure of the status of the construction in ‘The Imperial’, including but not limited to the approved plans/sanctions issued to Defendant No.1 from time to time by the various concerned authorities till date; Page Nos. 12 of 170 (c)That pending the hearing and final disposal of the present Suit, this Hon’ble Court, be pleased to restrain Defendant Nos.[1] to 4 from undertaking any construction activities or sale of flats in the free-sale buildings i.e., Tower ‘A’ and ‘B’ of ‘The Imperial’ in contravention to the vested rights of the Applicant and contrary to the last sanctioned disclosed plan; (d)That pending the hearing and final disposal of the present Suit, this Hon’ble Court be pleased to restrain Defendant No.1, their servants, agents, officers and assigns from in any manner taking any steps pursuant to or in furtherance of the layout plan dated 31st 2009 (Exhibit ‘’) or any part thereof, including carrying out any further construction activities of any nature whatsoever in contravention to the vested rights of the Applicants and contrary to the last disclosed layout plan dated 31st December 2009. (e)That pending the hearing and final disposal of the present Suit, this Hon’ble Court be pleased to restrain Defendant No.1, their servants, agents, officers and assigns from in any manner taking any steps pursuant to or in furtherance of the layout plan dated 31st 2009 (Exhibit ‘’) or any part thereof, including alienating, encumbering, selling, transferring and/or creating any third party rights of any nature whatsoever in ‘The Imperial’ or any part thereof; (f) for ad-interim reliefs in terms of prayers (a) to (e) hereinabove. (g)for costs; and (h)for such further and other reliefs as this Hon’ble Court may deem fit and proper in the facts and circumstances of the present case.

19. The Defendants have appeared in the suit. Defendant No.1 has filed Affidavit-in-Reply opposing the Interim Application. Defendant No.5 has also filed its Affidavit-in-Reply putting forth its stand and justifying formation of Condominium of apartment owners. Defendant Nos. 2 to 4 have adopted the reply filed by Defendant No. 1. Plaintiffs have filed their Affidavit-in-Rejoinder. Since pleadings in the Interim Application are complete, the same is taken up for hearing and disposal. Page Nos. 13 of 170 SUBMISSIONS

20. The real contest is between Plaintiffs and Defendant Nos.[1] to 4, who are the developers for the impugned proposed construction. Though Defendant No.5 is a Condominium of apartment owners of Towers A and B, it has not taken specific stand with regard to the main dispute and its role, as of now, it is confined only to the issue of formation of Condominium. Accordingly, Mr. Samdani, the learned Senior Advocate appearing for Plaintiffs has canvassed elaborate submissions in support of Plaintiffs’ case. Plaintiffs’ case is countered by Defendant Nos.[1] to 4 on whose behalf, submissions are canvassed by Mr. Tulzapurkar, Mr. Kadam, Mr. Andhyarujina, the learned Senior Advocates appearing for Defendant Nos.[1] to 3 and Mr. Tamboly, the learned counsel appearing for Defendant No.4. Ms. Singhania the learned counsel has appeared on behalf of Defendant No.5-Condominium. The submissions canvassed by learned counsel appearing for parties are briefly captured in paragraphs to follow.

SUBMISSIONS ON BEHALF OF PLAINTIFFS

21. Mr. Samdani, the learned Senior Advocate appearing for the Plaintiffs would submit that the proposed development taken up by Defendant Nos.[1] to 4 as per the revised LOI dated 27 May 2024 and revised layout plan dated 24 July 2024 is in the teeth of the provisions of Sections 7 and 7A of MOFA. He would submit that though the LOI dated 3 September 2005 was appended to MOFA agreements executed with flat purchasers of Towers-A and B, Plaintiffs admit the position that the revised LOI dated 10 December 2009 clubbing the Tardeo slum scheme with Wadala slum scheme as well as OC layout plan dated 31 Page Nos. 14 of 170 December 2009 would constitute the ‘last disclosed plan’ to the flat purchasers of Towers-A and B. He would therefore submit that Defendant Nos.[1] to 4 cannot construct anything beyond what was disclosed to the flat purchasers under the last disclosed plan dated 31 December 2009. According to him, the FSI sanctioned for rehab and sale components must be treated as frozen in 2009 in terms of the LOI dated 10 December

2009. In support, he would rely upon judgment of the Apex Court in Jayantilal Investments Versus. Madhuvihar Coop. Housing Society and Others[1] and judgments of this Court in Lakeview Developers & Ors. Versus. Eternia CHS Ltd. & Ors[2],and Malad Kokil CHS Ltd. Versus. Modern Construction Co. Ltd. & Ors[3].

22. Mr. Samdani would further submit that all slum dwellers in suit have already been rehabilitated under the present slum scheme (Scheme-1). That even in respect of clubbed Scheme-2 at Wadala, all the Project Affected Persons (PAPs) tenements are to be provided at Wadala Scheme (Scheme-2) except only 27 PAP tenements in present Scheme-1. That therefore the disclosed building plans must be treated as frozen in terms of sanctioned buildings upto the plan of 31 December 2009 when Occupancy Certificate of Towers-A and B was obtained. That Tower-C in 2009 plan had only been shown as tentative and there was no sanctioned plan for Tower-C, for which consent of the flat purchasers was obtained. That in absence of informed consent of flat purchasers in respect of Tower-C, construction thereof cannot be undertaken as held by this Court in Malad Kokil CHS (supra) and K.M. Realty Vs. Diamond Hill CHS Ltd.[4]

23. Mr. Samdani would further submit that by LOI dated 27 May 2024, Defendant Nos.[1] to 4 are taking advantage of Development Control Promotion Regulations, 2034 (DCPR, 2034) for procuring higher FSI and have accordingly obtained LOI for total FSI of 4.21 instead of FSI of 3.00 as sanctioned in 2009 plan. That by the 2024 revised layout plan, an attempt is made by Defendant Nos.[1] to 4 to (i) construct Towers- C and C-1, (ii) construct a building named Townhouse (Wing-D), (iii) make structural changes in the existing Towers-A and B by converting common areas and amenities into private portions to be sold with consumption of FSI which were originally free of FSI (iv) construct additional flats in Towers-A and B in parts of refugee areas and (v) construct a shop below the ramps. That conversion of common amenities spaces free of FSI into sale portions by feeding the same with FSI is in the teeth of judgment of the Apex Court in Nahalchand Laloochand Private Limited vs Panchali Cooperative Housing Society Limited[5]. That the proposed constructions/alterations violate provisions of MOFA as the developers have obtained higher FSI potential of the project by taking advantage of their own wrong by not conveying land to the Condominium. That construction of additional buildings and flats/units in existing Towers A and B are in violation of Sections 7 and 7A of MOFA. That the Developers have failed to obtain informed written consent for utilisation of incremental FSI under LOI dated 27 May 2024 and revised building plans dated 24 July 2024. That covenants in MOFA agreements, or letters executed at the time of securing possessions of flats containing blanket consent are unenforceable as there was no informed disclosure to the flat purchasers in respect of the further proposed development in the layout. He would rely upon judgments of this Court

Page Nos. 16 of 170 in Dosti Corporation vs Sea Flama Co-operative housing Society Limited[6], Mahavir Terrace CHS Ltd. Vs. Shree. Govindram K Tibrewala[7] and Murarilal Kotia and Anr. Vs. Ashok Punjabi and Ors[8].

24. Mr. Samdani would further submit that the unilateral declaration of 2012 executed by Defendant No.1 is not in accordance with MAO Act or Regulations made thereunder and the same is non est in the eyes of law. That therefore execution of supplemental unilateral declaration in 2025 for the purpose of addition of buildings, flats and areas is clearly unlawful, illegal and contrary to the provisions of MAO Act. That in a scheme under DCR 33(10), no Condominium is contemplated and only societies of rehab and free-sale components are provided with separate leases for each of them. That such conditions are also provided for in the OC dated 31 December 2009. Defendants having accepted various conditions stipulated in LOI, IOA and part OC, cannot act in breach of the same.

25. Mr. Samdani would counter the contention raised on behalf of Defendant Nos.[1] to 4 that provisions of MOFA do not apply to the development in question. He submits that the subject land is not owned by Maharashtra Housing and Area Development Authority (MHADA) nor does it belong to or vest in MHADA. That a representation was made to the flat purchasers while selling the flats that the land belongs to the State Government. That the title certificate of M/s. Kanga & Co. appended to MOFA agreements also describes the land as belonging to the Collector of Mumbai/MCGM. That in the P.R. card produced along 6 (2016) 5 MHLJ 102

Page Nos. 17 of 170 with compilation of documents, total land admeasuring 54,219.25 sq.mtrs is shown to be owned by Governor of Maharashtra out of which land admeasuring 33,100 sq.mtrs is stated to be leased to MHADA and a new City Survey number is carved out bearing City Survey No.4/725 admeasuring 33,100 sq.mtrs in favour of MHADA. That there is nothing on record to indicate that the sale component buildings are constructed only in respect of City Survey No.4/725 which is alleged to have been leased out to MHADA. He would alternatively submit that under Section 15A of the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971 (Slum Act), the subject land will ultimately vest in SRA, who would lease out the same to the rehab and sale component societies. That therefore it cannot be contended that the land belongs to MHADA for the purpose of application of Section 190 of Maharashtra Housing and Area Development Act, 1976 (MHADA Act). That therefore MOFA is fully applicable to the project in question.

26. Mr. Samdani would further submit that even if the subject land is momentarily treated as being leased out to MHADA, Section 190 of MHADA Act or Section 18 of MOFA do not have the effect of exclusion of applicability of MOFA to the project undertaken by a private developer on MHADA land. That MOFA is enacted in the year 1963 whereas MHADA Act is a subsequent legislation of the year 1976. An amendment has been effected to Section 18 of MOFA vide Maharashtra Act XII of 1986 with a view to bring provisions of MOFA on par with Section 190 of MHADA Act. That while amending Section 18 of MOFA, the Legislature was fully aware of provisions of Section 190 of MHADA but amended Section 18 of MOFA in such a manner so as to exclude only MHADA and the Boards established under MHADA Act from application of MOFA. Application of MOFA is consciously not Page Nos. 18 of 170 excluded in respect of lands belonging to or vesting in MHADA. That therefore harmonious reading of provisions of Section 190 of MHADA Act and Section 18 of MOFA would mean that applicability of MOFA stands excluded only when the development is undertaken by MHADA or by any Boards established under MHADA Act. If a development is undertaken by a private developer on a land belonging to or vesting in MHADA, provisions of MOFA would continue to apply for such development. That there is conscious exclusion of the terms ‘or to any land or building belonging to or vesting in, any such authority’ in section 18 of MOFA as contradistinct from provisions of Section 190 of MHADA Act. That such exclusion is to cure the mischief of misinterpretation of Section 190 of MHADA Act so as to exclude obligations arising out of MOFA to private developers undertaking construction on MHADA land. In support reliance is placed on judgment of this Court in Julie Amitabh Parekh and Ors. V/s. Reliance Asset Reconstruction Company Ltd. And Ors.[9] and of the Supreme Court in V. K. Ashokan Vs. Assistant Excise Commissioner and Ors.10

27. Mr. Samdani would further submit that provisions of MHADA Act must be interpreted contextually and textually and in support he would rely upon judgment of the Apex Court in Reserve Bank of India vs Peerless General Finance & Investment Co Ltd & Ors.11. That Section 190 in MHADA Act is only in the context of Authority, premises of Authority and building or buildings which are developed, let out or disposed off by the Authority itself. That Section 190 does not have any application to a land which is leased or disposed off by MHADA for being developed by a developer. In the present case, the land is not taken

Page Nos. 19 of 170 up for development by MHADA itself. It is not even leased by MHADA to Defendant No.1. That therefore Section 190 of MHADA Act has no application to the subject land. That Section 190 applies only when MHADA is performing the role of promoter/developer. That there is distinction between development undertaken by MHADA and development undertaken by private entity. That provisions of MOFA stand excluded only when development is undertaken by MHADA itself and for all private developments even on MHADA lands, provisions of MOFA would fully apply. That judgment of Division Bench of this Court in Shahed Kamal and Ors. Versus. Pagarani Universal Infrastructure Pvt. Ltd & Ors.12 delivered in the context of provisions of Section 31 of Mumbai Metropolitan Region Development Authority Act, 1974 (MMRDA Act) has no application to the present case. That there is clear distinction between the language used in Schedule II, Clause II of the MMRDA Act and Section 190 of the MHADA Act. That in any case the judgment in the case of Shahed Kamal (supra) was cited before the Division Bench of this Court while delivering the judgment in Shivaji Nagar Rahivashi CHS Ltd. & Anr. Versus. State of Maharashtra & Anr.13 in which it is held that the expression ‘any land or building vested in or under the control of Central or State Government or of local authority’ have to be read conjunctively for the purpose of application of exemption under Section 124F of the Maharashtra Regional and Town Planning Act, 1966 (MRTP Act) and that such exemption can be made applicable only when the authority itself is undertaking the development. That the law laid down in the subsequent judgment in Shivaji Nagar (supra) explaining the ratio in Shahed Kamal (supra) would bind this Court. That in any case, the facts in the case of Shahed Kamal (supra) were

Page Nos. 20 of 170 distinguishable as the land in question was admittedly owned by MMRDA, which is the Special Planning Authority for the planning zone in question. In the present case, apart from absence of any documentary proof of land being owned by MHADA, no development permissions for the project are issued by MHADA which are all granted by SRA, who is the planning authority for the present project.

28. Mr. Samdani would further submit that if contentions of Defendant Nos.[1] to 4 about exclusion of provisions of MOFA to all developments undertaken on MHADA land is accepted, the same would lead to absurdity as large number of redevelopment of buildings on MHADA land would leave the developers scot-free thereby severely affecting the rights of flat purchasers.

29. Mr. Samdani would counter the submission raised on behalf of Defendant Nos.[1] to 4 that provisions of Slum Act would have primacy over the provisions of MOFA and that MOFA will not apply with all the rigors in case of slum schemes. There is no provision either under the Slum Act or MRTP or DC Regulations seeking to exclude applicability of MOFA in respect of free sale component buildings constructed under slum schemes. That use of non-obstante clause in Sections 3 and 4 of MOFA makes it clear that provisions of Act would apply to all developments including construction, sale and management of flats in free sale component buildings in a slum scheme. That there is no conflict between the provisions of Slum Act, MRTP and MOFA and therefore MOFA would have full applicability even to slum scheme project. That MOFA applies in addition to the provisions of Transfer of Property Act. MOFA is a beneficial legislation enacted for protecting the rights of flats Page Nos. 21 of 170 purchasers as held by the Apex Court in Nahalchand Laloochand (supra). That therefore provisions of MOFA will have to be interpreted to aid the intent and purpose for which the Act has been enacted.

30. Mr. Samdani would further submit that provisions of Section 15A of Slum Act would not mean primacy of Slum Act over MOFA when it comes to sale component building. That in any case, the amended Section 15A with effect from 26 April 2018 cannot have retrospective application. That in fact Section 15A of Slum Act militates against the argument that the land belongs to MHADA. That in any case provision for grant of lease in respect of slum scheme land would not mean that there is any conflict between Section 11 of MOFA and Section 15A of the Slum Act.

31. Mr. Samdani would further counter the submissions on behalf of Defendant Nos.[1] to 4 that flexibility in slum project makes disclosure within the meaning of Sections 7 and 7A impossible. He would submit that once the scheme is placed before the flat purchasers, clubbing of another scheme is impermissible without the consent of flat purchasers. Relying on judgment of this Court in Jitendra Santilal Shah & Ors. Vs. Zenal Construction Pvt. Ltd.14 he would submit that mere permissibility of approval of plan/FSI under the DCR does not mean that developer can construct a structure in violation of provisions of Sections 7 and 7A of MOFA. That it is permissible to make true and full disclosure within the meaning of Sections 3 and 4 of MOFA even under a slum scheme. That DC Regulations always cap the upper limit of FSI which in the present case was capped at 2.227 before clubbing and 2.996 after clubbing. That in the present case, there was no fluctuation either in

Page Nos. 22 of 170 rehab area or in sale component area till DCPR 2034 came into effect. That therefore the developer would be bound by disclosure made to the flat purchasers of Towers-A and B. That the argument that sale component goes up with increase in obligation to complete rehab tenement is misconceived as the FSI for rehab portion and PAP portion is determined on the basis of density of slum dwellers. If density is higher, the PAP goes down and if density is lower, PAP goes up. Therefore, even if more slum dwellers are held eligible, they can always be accommodated against PAP. That in any case, if higher built-up area (BUA) in sale component is sanctioned beyond disclosure made to flat purchasers, such excess BUA can always be used in other schemes/projects in the form of TDR. That therefore mere availability of higher BUA due to fluctuation in eligibility of slum dwellers or increase in area of rehab tenements cannot be a ground for violating the disclosures made to flat purchasers of sale component buildings.

32. Mr. Samdani would further submit that the balance FSI cannot be allowed to be built upon in the layout as the same has not been disclosed or presented to the flat purchasers at any point of time or in any plan. That the proposal to utilise balance FSI in Towers-C and C[1] under the 2024 plan is impermissible on account of non-disclosure. That the proposed Tower-C and Tower-C-1 is an additional ‘wing’ to be constructed by extending the podium of Towers-A and B which is impermissible as the same is not additional ‘building’ but a ‘wing’ of Towers-A and B. That balance sanctioned BUA of 29,552.45 sq.mtrs cannot be utilised for construction of Towers-C and C-1 on account of non-disclosure. The said FSI will have to be treated as frozen as on 31 December 2009 and would accordingly vest in the Condominium. That therefore no construction in the form of Towers-C and C-1 can be put up. Page Nos. 23 of 170 That Defendant No.1 cannot be permitted to take benefit of its own wrong by not conveying the land in favour of the Condominium and take advantage of the additional FSI/built up area made available under DCPR, 2034.

33. Mr. Samdani would further submit that the new building, Wing-D named ‘Townhouse’ has never been disclosed to the flat purchasers. That the said building is also attached to the podium and therefore it cannot be contended that the said building is outside the portion of land on which sale component buildings are to be constructed. That in any case, there is no document on record to accept the contention of Defendant Nos.[1] to 4 that the buildings ‘Imperial Edge’ or ‘Townhouse’ fall outside the property described in the Second Schedule to the MOFA Agreements.

34. Lastly and alternatively, Mr. Samdani would submit that the balance unutilized FSI as per 2009 last disclosed plan would only be 29,851.32 sq.mtrs. He would take the Court through computation of sanctioned BUA to demonstrate that total BUA sanctioned was 1,58,858.72 sq.mtrs out of which the area sanctioned for sale component was 88,003.51 sq.mtrs. BUA of 49,421.87 sq.mtrs has already been utilised for Towers-A and B leaving balance available BUA of 38,581.64 sq.mtrs. He would submit that Defendant No.1 has utilised BUA of 7,145.40 sq.mtrs for construction of building ‘Imperial Edge’ which is required to be deducted from balance available BUA. He would thereafter deduct 416.80 sq.mtrs for guest-room sale FSI, 329.39 sq.mtrs for FSI at even level and 874.37 sq.mtrs towards sale FSI. According to Mr. Samdani, only built-up area admeasuring 29851.32 sq.mtrs is available for construction of Tower-C if the same is permitted Page Nos. 24 of 170 to be constructed. As against this, under the LOI of 24 May 2024 issued under DCPR, 2034, Defendant No.1 has obtained enhanced free-sale BUA of 1,91,625 sq.mtrs as against originally sanctioned BUA of 88,003.51 sq.mtrs for sale component under 2009 LOI. That this freesale FSI is obtained by shifting large chunk of additional PAP to Wadala and by swapping free-sale FSI from Wadala to the subject project at Tardeo. That this enhanced free sale FSI of about 1,03,621.49 sq.mtrs is being used for construction of Towers-C and C-1, Townhouse building, additional flats in existing Towers-A and B and converting common amenities of the project into saleable areas. Mr. Samdani would therefore alternatively pray that construction of Tower-C be restricted at the highest at 29,552.47 sq.mtrs.

35. On above broad submissions, Mr. Samdani would pray for making Interim Application (L) No.25478/2025 absolute in terms of the prayers made therein.

SUBMISSIONS ON BEHALF OF DEFENDANT NOS.[1] TO 4

36. Mr. Tulzapurkar, the learned Senior Advocate appearing for Defendant No.1, Mr. Kadam, the learned Senior Advocate appearing for Defendant No.2, Mr. Andhyarujina, the learned Senior Advocate appearing for Defendant No.3 and Mr. Tamboly, the learned counsel appearing for Defendant No.4 have advanced submissions opposing the Interim Application. Together they represent the Developers, who are proposing to undertake development in terms of the revised LOI dated 27 May 2024 and revised Layout plan dated 24 July 2024. Since their submissions overlap and since a common note of written submissions is tendered, a common gist of submissions canvassed by them is recorded. Page Nos. 25 of 170

37. It is submitted on behalf of the Developers that the present slum scheme is being implemented under regulation 33(10) of DCR 1991 on ‘larger property’ admeasuring 53,765.33 sq.mtrs. The MOFA agreements describe the ‘larger property’ separately from ‘said property’ in the second schedule on which development of three sale component towers was proposed to be undertaken. That therefore right, if any, of the flat purchasers is only in respect of the ‘said property’ and not in respect of the ‘larger property’. That therefore Plaintiffs cannot have any semblance of right qua any construction undertaken by the developers on ‘larger property’ which is outside the ‘said property’. That clear disclosure is made to the flat purchasers of Towers ‘A’ and ‘B’ that third Tower ‘C’ would come adjacent to the first two Towers and within the ‘said property’. That developers are constructing two wings of the third Tower-Wings ‘C’ and ‘C1’ in the said property as per the disclosure made to the flat purchasers. Any free-sale construction put up outside said property and within larger property cannot be a matter of concern for Plaintiffs. That the building ‘Imperial Edge’ already constructed and the building ‘Townhouse’ proposed to be constructed, fall outside the ‘said property’ and therefore are not hit by disclosure requirement.

38. That while implementing the slum scheme, Defendant No.1 has already constructed on ‘larger property’ 13 rehabilitation buildings (11 on ‘larger property’ and 2 on ‘Wadala property’) comprising approximately 3160 rehab tenements, one building for police housing, one composite building and one sale building. As on date, balance of 193 slum dwellers remain to be rehabilitated (inclusive of 76 slum dwellers in MP Mill Scheme) and 1046 tenements for PAPs remain to be constructed for SRA/Government for which purpose construction of one rehab building on ‘larger property’ and two rehab buildings on Page Nos. 26 of 170 Wadala land are pending. Grant of any interim order would disturb rehabilitation of 193 slum dwellers and construction of 1046 PAP tenements.

39. That provisions of MOFA are not applicable to the project in question on account of section 190 of MHADA Act and Section 18 of MOFA. That the subject property is MHADA land and it also belongs to and vested in MHADA. That Government of Maharashtra has leased portion of ‘larger property’ admeasuring 33,100 sq.mtrs to MHADA vide Memorandum dated 2 February 1988 and 2 February 1989 inter alia for rehabilitation of slum dwellers which is demarcated as C.S. No.4/725. On 7 August 2020, a demarcation has been carried out in pursuance of which, MHADA land has been physically demarcated by separating the same from C.S. Nos.725(pt) and 1/725(pt) and by allocating separate C.S. No.4/725. That the entire land on which sale component buildings are constructed is MHADA land. That the terms ‘vesting in’ and ‘belonging to’ include cases where a land or building is taken on lease. In support, reliance is placed on Division Bench judgments of this Court in Akola Municipal Council V/s. Nilkanth Athalye15 and M. Mohammed and Etc. V/s. Union of India and Ors16.

40. Developers submit that improvement and clearance of slum is one of the main functions of MHADA as is evident not only from Statements of Objects and Reasons of MHADA Act but also from provisions thereof. That Memorandum dated 2 February 1989 leases out land to MHADA for rehabilitation of slum dwellers. That Section 18 of MOFA excludes applicability of the Act to MHADA. Additionally,

Page Nos. 27 of 170 Section 190 of MHADA Act provides for exclusion of provisions of MOFA not only to MHADA but also to ‘land and building belonging to and vesting in, any such authority’. That Section 18 of MOFA was enacted in 1963 i.e. even prior to MHADA Act of 1976. That 1986 amendment to Section 18 of MOFA was only for the purpose of substitution of erstwhile Bombay Housing Board and Vidarbha Housing Board by MHADA and therefore it cannot be contended that any conscious exclusion is made in respect of lands belonging to and vesting in MHADA while amending Section 18 of MOFA. That therefore the argument of curing of mischief by amending Section 18 is clearly misplaced.

41. That a pari materia provision of Section 31 read with Schedule II, Clause II of MMRDA Act has been considered by Division Bench of this Court in Shahed Kamal (supra) in which it is held that MOFA does not apply to land or building belonging to or vesting in MMRDA. That Section 31 and Schedule II(II) of the MMRDA Act are pari materia with Section 190 of MHADA Act. That SLP filed against judgment in Shahed Kamal has been dismissed by the Supreme Court. That Plaintiffs’ attempt to distinguish the judgment in Shahed Kamal by relying on Division Bench Judgment in Shivaji Nagar (supra) is misplaced as the Division Bench has interpreted a taxing provision under Section 124F of MRTP Act, which provision is not pari materia with Section 190 of MHADA Act or Section 31 and Schedule II Clause II of MMRDA Act. Also, the judgment in Shivaji Nagar is appealed before the Supreme Court in which leave has been granted. That therefore provisions of MOFA cannot apply to the subject scheme and therefore the suit filed by Plaintiff for enforcement of their alleged right Page Nos. 28 of 170 under MOFA is not even maintainable and therefore there is no question of granting of any temporary injunction in their favour.

42. That it is otherwise impossible in a slum scheme to make any disclosure to the flat purchasers of proposed development as per Sections 3, 4, 7 and 7A of MOFA. That in a slum scheme FSI does not arise from land and that the same is neither pre-existing nor can it be known or computed with precision. That the BUA for rehab component depends on number of eligible slum dwellers and the sale component BUA depends on the quantum of rehab BUA. That the principle of FSI in a slum scheme not flowing from land has been recognised in HDIL Vs. Mumbai International Pvt. Ltd. and Anr.17, Priya Constructions Vs. SRA18 and Yash Developers Vs. Harihar Krupa CHS Ltd 19. Since the exact FSI/BUA is impossible of being projected, there is no question of disclosure of the same in agreements executed under Sections 3 and 4 of MOFA. That therefore there is no question of violation of any disclosure under Sections 7 or 7A of MOFA.

43. That the provisions of MOFA are required to be construed in the light of provisions of Slum Act. That the rehab component of slum scheme has actually undergone change from time to time in the present scheme having effect on the sale component area as well. In all slum schemes initiated prior to 2016, there has been a vast change in respect of rehab component area due to notification dated 1 October 2016. That in the present case, the number of slum dwellers indicated as 1433 and PAPs indicated as 421 have increased substantially to 3353 slum dwellers and 1046 PAPs by the time the last LOI dated 10 July 2024 is issued.

Page Nos. 29 of 170 Correspondingly there is an increase in rehab component from 55,436.41 sq.mtrs. to 1,61,695.45 sq.mtrs. That the law provides that all eligible slum dwellers must be given rehab tenements. As number of slum dwellers increase, there is corresponding increase in rehab component. Such increase has taken place on account of various factors such as certification of eligibility of slum dwellers, extension in cut-off date for eligibility, increase in the area of rehab component and increase of minimum rehab density. That as per notification dated 15 October 1997, the minimum area per slum dweller was 225 sq.ft., which has increased to 269 sq.ft vide notification of 2008/2012 and further increased to 300 sq.ft. as per Regulation 1.[1] of DCPR 2034. That increase in rehab component also results in increase in sale component making it impossible for the developer to project the maximum BUA available in sale component while implementing a slum scheme for the purpose of making disclosure under Sections 3 and 4 of MOFA.

44. That the slum Act would have primacy over MOFA. Rehabilitation of slum dwellers is the sine qua non and the primary objective behind implementation of slum scheme and the same must be allowed to be fully implemented without any fetters. That grant of FSI for free-sale development is only an incident arising out of implementation of slum scheme and the same is only to incentivise the object of rehabilitation of slum dwellers. Free sale FSI therefore arises and is born only out of and because of rehab construction. That legislative intent to give primacy to provision of Slum Act is evident inter alia from Section 15A of the Slum Act, which clearly demonstrates the conflict between Section 11 of MOFA with regard to timeline as well as manner in which conveyance of land is to be made. That Section 15A of Slum Act prevails over Section 11 of MOFA on account of use Page Nos. 30 of 170 of non obstante clause in Section 15A. That Slum Act being more beneficial legislation, aimed at serving larger public interest of rehabilitating the slum dwellers and clearance of slum areas, the same would prevail over MOFA and no provision of MOFA can be interpreted to mean a fetter on implementation of a slum scheme. Additionally, Slum Act is a latter legislation and therefore provisions thereof would prevail over any inconsistent provision of earlier and general legislation of MOFA. In support, reliance is placed on judgment of the Apex Court in Vodafone Idea Cellular Ltd. V/s. Ajay Kumar Agarwal20.

45. That role of a developer implementing slum scheme is akin to a licensee, who can be changed under the provisions of Section 13(2) of the Slum Act and therefore no claim can be made by flat purchasers against the developer under MOFA. That the position in slum scheme is fundamentally different making provisions of Section 3, 4, 7, 7A and 11 of MOFA inapplicable. The situation in relation to FSI in slum scheme is fluid and evolving and therefore there is no question of disclosing what is not even known. Reliance is placed on judgment of this Court in Manratna Developers V/s. Megh Ratan CHS and Ors.21 Various provisions of Regulation 33(10) read with Appendix IV of DCR 1991 make it clear that total development potentiality /FSI can never be crystallised making it impossible to disclose availability of BUA/FSI to flat purchasers in agreements executed under Sections 3 and 4 of MOFA.

46. That the concept of vesting of balance FSI in favour of a society/condominium can never apply in relation to slum scheme. This

21 (2009) 2 MhLJ 115 Page Nos. 31 of 170 is because FSI neither flows out of land nor is capable of being precisely computed. BUA for sale component becomes available only as an incentive for construction of rehab tenements. BUA for sale component being granted for compensating developer for construction of rehab tenements, it is absurd to vest alleged balance sanctioned BUA in favour of Condominium of Plaintiffs.

47. Without prejudice, it is submitted on behalf of the developers that full and complete disclosure has already been made by them to flat purchasers of Towers ‘A” and ‘B’. Approximate height of the Tower ‘C’ and total number of floors was disclosed to the flat purchasers vide NOCs issued by Chief Officer (CFO). That Plaintiffs’ own Occupancy Certificate dated 16 January 2014 expressly discloses Tower ‘C’ comprising of 57 floors and height of 292 meters. That rights of a developer to make additions or alterations in the structure of the building vis-a-vis his obligation to form society and convey title must be balanced as held by the Apex Court in Jayantilal Investments (supra). In addition to MOFA agreements, flat purchasers have also executed consent letters expressly consenting to construction of two additional highrise buildings with structural integration, interlinks and interconnections. That thus full and complete disclosure is made and uniform consent is obtained from the flat purchasers. Relying on judgment of this court in Krishna Constructions and Ors. V/s. Subhash Uttam Dalvi and Ors.22 it is contended that once the entire project is placed before the flat purchasers then promoter is not required to obtain prior consent of flat purchasers so long as additional construction is in accordance with layout land, building rules and DCR. Reliance is also placed on judgment of this Court in M/s. S & M Enterprises Vs.

Page Nos. 32 of 170 Pallazo Building No.1 CHSL and Ors.23 in support of contention that insistence of flat purchasers for disclosure of development potential of plot in MOFA agreement cannot be countenanced.

48. That the present one is a one-off case as the scheme was initiated prior to issuance of notification dated 1 October 2016. By that notification, a clarity is achieved with regard to total rehab component and correspondingly the total sale component. That LOI of 2024 is now frozen and no balance potential now remains. That restricting developer to complete SRS in accordance with part OC dated 31 December 2009 would seriously affect the slum scheme as eligible slum dwellers would be left out from rehabilitation process.

49. That the argument of permissibility to avail TDR in respect of balance FSI potential while implementing Slum scheme cannot be implemented in the present case as TDR can be granted only where full FSI cannot be used on site on account of constraints such as height restrictions, etc. That developer will not be able to recover the expenditure incurred for construction of rehab tenements considering the rates at which TDR is sold.

50. That ‘Imperial Edge’ cannot be treated as third Tower disclosed in MOFA Agreements. Imperial Edge is constructed outside the ‘said property’. That Tower ‘C’ is disclosed to be adjacent to Tower ‘A’ and ‘B’. Imperial Edge cannot be treated as a building constructed adjacent to Tower ‘A’ and ‘B’. It has never formed part of the project as defined under MOFA Agreements. There is layout road and rehab building between Towers ‘A’ and ‘B’ and Imperial Edge, which is not

23 Civil Writ Petition 12297 of 2022 decided on 28 July 2025 Page Nos. 33 of 170 connected by podium of Towers ‘A’ and ‘B’. That construction of ‘Imperial Edge’ commenced on 25 October 2012 and completed in 2020 without any grievance by Plaintiff. A separate Condominium has been formed in respect of Imperial Edge. That therefore Plaintiffs’ building (Towers ‘A’ and ‘B’) have absolutely no connection with the building

51. It is submitted on behalf of the developers that all the judgments relied upon by Plaintiffs in support of disclosure agreement under Section 7 and 7A of MOFA do not pertain to slum schemes and therefore have no application to the facts of the present case. Judgment of this court in K.M. Realty (supra) is no longer a good law on account of order passed by Supreme Court on 1 August 2025.

52. That Plaintiffs are not entitled to any reliefs in respect of the Club House which is exclusively possessed by Defendant No.1 since

2014. That under Clause 35 of Agreement for Sale (AFS), ownership and management of Club House is specifically retained by Defendant No.1. Plaintiffs are using Club House since 2014 by payment of charges and membership fees. That Club House is not a part of common area and facilities and is the sole entitlement of Defendant No.1. By letter dated 26 March 2013, the Condominium was informed that the sale building excluding Club House would be submitted to MAO after completion of entire project. Defendant No.1 has provided Plaintiffs with amenities such as library, yoga room, board room, garden and swimming pool admeasuring over 29,775.35 sq.ft. which are distinct from and located outside the Club House. As of now, only some part of club house is proposed to be converted into FSI. That in any case, Club Page Nos. 34 of 170 House is not included under the definition of ‘amenities’ in Regulation 2(7) of DCR.

53. It is submitted on Developers’ behalf that no irreparable harm would be caused to the Plaintiffs if injunction is refused. Plaintiffs have sought damages of Rs.500 crores in the Suit. That balance of convenience is clearly in favour of Defendants No. 1 to 4 and against the Plaintiffs. Developers have expended substantial sum of monies of approximately Rs.2,500 crores and have also created third party rights by way of a registered mortgage in Wing-C and FSI that could be utilised therein in favour of Catalyst Trusteeship Ltd. That grant of temporary injunction would affect implementation of slum scheme. That therefore no injunctive relief at this stage of the suit can be granted in favour of Plaintiffs.

54. On above broad submissions, Defendant Nos. 1 to 4 have prayed for rejection of the Interim Application. However, upon being queried by the Court as to whether Defendant Nos.[1] to 4 are proposing to convert various FSI free areas of existing Towers-A and B into residential flats by use of FSI made available under the LOI dated 27 May 2024 and layout plan dated 24 July 2024, Mr. Kadam after taking instructions, has made a statement that Defendant Nos.[1] to 4, shall not at this juncture, construct or sell any flat in any portion of Tower-A and B buildings without seeking consent of Defendant No.5-Condominium. It is however submitted on behalf of the Developers that the application for temporary injunction filed by plaintiffs, so far as balance proposed development is concerned, be rejected. Page Nos. 35 of 170 SUBMISSIONS ON BEHALF OF DEFENDANT NO.5

55. Ms. Singhania, the learned counsel appearing for Defendant No.5-Condominium would submit that a minuscule number of apartment owners (48 plaintiffs) have filed the present Suit as against total 230 apartment owners, who are members of Defendant No.5- Condominium. That no temporary injunction is sought qua the Condominium, which is formed vide Deed of Declaration dated 16 October 2012. Plaintiffs’ prayer for formation of co-operative society instead of Condominium and grant of lease of land and building in favour of such society cannot be granted. That Defendant No.5 has been duly and legally constituted by 2012 registered declaration. That there is no prohibition for formation of Condominium by flat purchasers of sale component building. That the term ‘Society’ used by SRA is in general sense referring to collective body of flat purchasers and that there is nothing in law which prohibits formation of condominium of apartments. That Plaintiffs’ amended prayer for appointment of Court Receiver in respect of various amenities deserves rejection as the Condominium has been managing the said amenities for the last 13 long years. That in the event any Court Receiver is appointed in respect of Club House, podium levels or refugee areas, Defendant No.5- Condominium be appointed as the agent of the Court Receiver.

REASONS AND ANALYSIS

56. Plaintiffs are the purchasers of flats in Towers-A and B of the building ‘The Imperial’. They are aggrieved by the proposed action of the Developers in carrying out further development in the land in the Page Nos. 36 of 170 form of construction of Towers-C and C-1, building named ‘Town House’ (Wing-D), conversion of some of the vacant floors in their Towers-A and B into flats and conversion of some of FSI free amenity spaces into saleable areas by feeding them with FSI. According to plaintiffs, the proposed development undertaken by the developers vide LOI dated 27 May 2024 and layout plan dated 24 July 2024 is in violation of disclosures made to the flat purchasers of Towers-A and B and in the teeth of provisions of Sections 7 and 7A of MOFA. Accordingly, the Suit is filed to restrain Defendant Nos. 1 to 4- Developers from undertaking the proposed development in the layout. Plaintiffs have also prayed for other reliefs such as formation of a cooperative housing society instead of a condominium, specific performance of Agreements for Sale executed with flat purchasers, etc. Plaintiffs have also challenged Declaration dated 16 October 2012 forming Defendant No.5-Condominium. They have also challenged Supplemental Declaration dated 30 April 2025 unilaterally registered by Defendant No.1, inter alia, for the purpose of undertaking the impugned construction. Plaintiffs have also sought declaratory reliefs qua the Club House (comprising amenities of health club, spa, swimming pool, guest rooms, restaurants, convenience store etc.) and qua podium levels including levels- 5, 6 and 8 in the project and for restraining Defendant Nos.[1] to 4 from claiming any rights therein and for restraining the Defendant Nos.[1] to 4 from Plaintiffs exercising exclusive rights in the Club House and podium levels.

57. While Plaintiffs’ suit is essentially premised on their alleged rights flowing through the provisions of MOFA, the developers have taken a plea that provisions of MOFA are not applicable to the project in question. Alternatively, it is also contended by them that all Page Nos. 37 of 170 provisions of MOFA are otherwise unenforceable in respect of a slum scheme. In the event the above two defences fail, the Developers have also raised an alternate defence that the impugned construction fully adheres to the disclosures made to the flat purchasers of Towers-A and

58. Before proceeding to decide the exact points that arise for determination in the light of respective pleas raised by the rival parties, it would be necessary to briefly consider the background in which the disputes between the parties have arisen. Such background would present a clear picture as to why plaintiffs, who are 48 out of 270 flat purchasers in Towers-A and B, are opposing further construction undertaken by the Developers.

BACKGROUND GIVING RISE TO THE CONTROVERSY AND ITS EXACT NATURE

59. Defendant No.1 came to be appointed as a Developer by SRA for implementation of Slum Rehabilitation Scheme in respect of land admeasuring 54,360 sq.mtrs bearing C.S. No.725 (Pt), 1/725 (Pt) of Malbar and Cumbala Hill Division by combining three slum societies of Nav Maharashtra Nagar Sahakari Griha Nirman Sanstha Ltd, New Jaiphalwadi CHS Ltd and Janata Hill CHS Ltd. Accordingly, LOI dated 14 January 1999 was issued by SRA for implementation of Slum Scheme. The initial LOI dated 14 January 1999 was revised from time to time. On 3 September 2005, a revised LOI was issued by SRA in favour of Defendant No.1, under which Defendant No.1 was under obligation to handover 330 tenements to SRA/MCGM for PAPs each with carpet area of 20.90 sq.mtrs free of cost and also to rehabilitate all eligible slum Page Nos. 38 of 170 dwellers. The SRS was sanctioned under Regulation 33(10) of DCR,

1991. The FSI sanctioned for the scheme was 2.227 and total BUA approved for implementation of SRS was 1,21,070.54 sq.mtrs, out of which rehab component was 61,251.94 sq.mtrs whereas sale component sanctioned was 59,818.60 sq.mtrs.

60. In accordance with the LOI dated 14 January 1999 as revised on 3 September 2005, Defendant No.1 procured Intimation of Approval (IOA) dated 29 August 2002 and Commencement Certificate (CC) dated 6 September 2002 for construction of sale Towers-A and B. The CC dated 6 September 2002 was extended from time to time. Under IOA and CC, Defendant No.1 commenced the work of construction of Towers-A and B by utilising FSI for sale component sanctioned under the LOI. Defendant No.1 thereafter entered into Agreements for Sale of flats in Towers-A and B. Copy of Agreement of Sale dated 26 January 2008 executed by Defendant No.1 in favour of Plaintiff No.1 has been filed alongwith the plaint at Exhibit-A. In the said Agreement for Sale, the entire land admeasuring 54,360 sq.mtrs is described as ‘larger property’, whereas the portion of larger property on which two saleable residential buildings of 60 storeys each (Towers-A and B) were being constructed is described as ‘the said property’. Under the Agreement for Sale, Defendant No.1-Developer disclosed to the flat purchasers that in addition to Towers-A and B, a third building adjacent to the said two Towers would also be constructed in the ‘said property’. A tentative layout indicating the location of the three residential Towers was appended to the Agreements for Sale at Annexure-A and A-1. It was indicated in the Agreements that the building plans for third saleable building were yet to be finalised and were submitted for approval. Page Nos. 39 of 170

61. It appears that Defendant No.1 was also appointed as a Developer in respect of another Slum Scheme at Wadala in respect of Plot bearing Nos.94 (Pt), 104 (Pt), 105(Pt) and 106(Pt) of Salt Pan Division, F/N Ward of Shiv Prerana SRA CHSL (Scheme No.2). Defendant No.1 applied to SRA for clubbing of the Scheme at Tardeo (Scheme No.1) with the Scheme at Wadala (Scheme No.2). SRA approved the proposal submitted by Defendant No.1 and issued LOI dated 10 December 2009 for the purpose of clubbing of Scheme Nos.[1] and 2. Under the clubbed Scheme, increased FSI of 2.966 for Scheme No.1 and lesser FSI of 1.717 for Scheme No.2 was sanctioned in accordance with Clause-7.[8] of Appendix-IV of D.C. Regulation NO. 33(10). Under the clubbed Scheme, the total BUA admissible in respect of Scheme No.1 was sanctioned at 1,58,858.72 sq.mtrs, out of which BUA of 70,855.21 sq.mtrs was for rehab component and BUA of 88,003.51 sq.mtrs was for sale component. Under the clubbed scheme, Defendant No.1 applied for and secured permission for shifting of rehab BUA of 5841.84 sqmtrs from Scheme No.1 (Tardeo) to Scheme No.2 (Wadala) and in return, secured additional sale component BUA of 16,001.84 sq.mtrs for utilisation in Scheme No.1 by deducting the same from Scheme No.2.

62. Thus, on account of clubbing of Tardeo and Wadala Slum Schemes, Defendant No.1 shifted the rehab BUA from Tardeo to Wadala and in return, got sale component BUA shifted from Wadala to Tardeo. This was apparently done as Tardeo is a more affluent locality in Mumbai as compared to Wadala commanding higher real estate prices. Defendant No.1 took advantage of such situation and got the two Schemes clubbed under Clause-7.[8] of Appendix-IV of DCR 33(10) and secured right to construct more saleable area at Tardeo in lieu of Page Nos. 40 of 170 constructing more rehab area in Wadala. Defendant No.1 also got reduced the liability of construction of 297 PAP tenements at Tardeo by shifting 200 PAP tenements to Wadala. Thus, Defendant No.1 had liability to construct 297 (-) 200 = 97 PAP tenements at Tardeo and he agreed to construct 138 (+) 200 = 338 PAP tenements at Wadala.

63. As observed above, clubbing of the two schemes immensely increased the sale component BUA at Tardeo from 59,818 sq.mtrs (2005 LOI) to 88,003.51 sq.mtrs (2009 LOI). However, none of the flat purchasers at Tardeo Scheme of Towers-A and B of ‘The Imperial’ building ever questioned clubbing of the two Schemes. Mr. Samdani has accordingly fairly submitted that Plaintiffs are not opposed to the clubbed LOI dated 10 December 2009 or the revised layout plan sanctioned in pursuance thereof. On the basis of the revised LOI dated 10 December 2009, Defendant No.1 got sanctioned a revised layout plan dated 31 December 2009 while securing part Occupancy Certificate for sale Tower buildings-A and B. Plaintiffs have described the amended layout plan dated 31 December 2009 as ‘the last disclosed sanctioned plan’ in para-3.[8] of the Plaint. Proforma-1 to the amended layout plan dated 31 December 2009 indicates that based on sanctioned FSI of 2.996, the total permissible BUA for the entire larger property was 1,58,858.72 sq.mtrs out of which BUA of 54,116.33 sq.mtrs was utilised for construction of rehab building nos.[1] to 5, 7, 8, 9 and 11. The BUA utilized for construction of Towers-A and B was indicated at 49,421.87 sq.mtrs. Thus, total BUA proposed to be consumed for rehab and two sale Towers was about 1,03,538.20 sq.mtrs by consuming FSI of 1.9528 sq.mtrs. The balance available BUA of about 55,320.67 sq.mtrs was still available possibly for completion of other rehab buildings and for construction of Tower-C. Page Nos. 41 of 170

64. It appears that Defendant No.1 did not commence construction of Tower-C by utilising the balance FSI available as per the revised layout plan of 31 December 2009. Full Occupancy Certificate in respect of Towers-A and B was issued by SRA on 16 October 2014 by approving the proposed amended plans submitted by Defendant No.1.In the amended plans dated 16 October 2014, Defendant No.1 apparently made computations on the basis of round figure FSI of 3.00 (instead of 2.996). Accordingly, the total available BUA was indicated 159054.99 sq.mtrs. It appears that in addition to Towers-A and B already constructed and proposed Tower-C, Defendant No.1 decided to construct another building named ‘The Imperial Edge’ on portion of ‘larger property’ and at a place where rehab component buildings were being constructed. The said building was indicated as ‘Composite Building No.1’ with total BUA of 13,001.79 sq.mtrs, comprising of rehab portion of 5856.39 sq.mtrs and sale portion of 7145.40 sq.mtrs. Similarly, some sale portion (1121.45 sq.mtrs) was also added in other rehab building Nos.2, 3, 4, 5, 6A, 7, 8, 9 and 11. For Towers-A, B and C, the sale component BUA was indicated at 79,725.99 sq.mtrs.

65. This is how instead of constructing only three sale towers in the larger property, Defendant No.1 undertook construction of fourth sale tower by name ‘The Imperial Edge’ comprising of G + 49 floors. On 20 October 2020, Occupancy Certificate in respect of the building ‘The Imperial Edge’ was issued indicating consumption of sale component BUA of 7053.75 sq.mtrs. Plaintiffs or any other flat purchasers were not aggrieved by construction of sale building ‘The Imperial Edge’ in the larger property. Plaintiffs however now claim that ‘The Imperial Edge’ is the third Tower proposed by Defendant No.1- Page Nos. 42 of 170 Developer and disclosed in the Agreements for Sale, which is a reason why no objection was raised to its construction.

66. Plaintiffs believe that the entire development so far as sale component buildings are concerned, is complete and that Defendant No.1 cannot put up any further construction of sale component in any part of the land. However, it appears that Defendant No.1 applied to SRA for issuance of further revised LOI and on 27 May 2024, a further revised LOI has been issued by SRA in respect of the clubbed schemes by sanction of increased FSI of 4.21. It appears that the increase in the FSI is on account of twin factors of coming into effect of DCPR 2034 w.e.f. 13 November 2018 and issuance of notification dated 1 October 2016 by Urban Development Department of Govt. of Maharashtra under Section 37(2) of MRTP Act under which some amendments are effected to Appendix IV and Regulation 33(10) of DCR 1991. Under the original provision of Clause 3.12 of Appendix IV, the minimum density of rehabilitation component on a plot was 500 tenements per hectare. As per notification dated 1 October 2016, it was directed that if total number of slum dwellers in the scheme are less than 650 per hectare, the scheme shall be sanctioned by taking all slum dwellers in account and if final eligibility is less than the constructed tenements then the remaining tenements shall be treated as PAPs/affordable housing, rental housing, staff quarters, etc. If tenement density is between 650 to 800, all slum dwellers shall be counted for construction of tenements with in situ FSI of 3.00 and if after finalisation of eligibility the eligible tenements density comes out to be more than 650 per hectare, FSI of 4.00 shall be sanctioned. If total number of slum dwellers is more than 800 per hectare, FSI of 4.00 shall be sanctioned. In case of ongoing schemes, it was directed that where tenement density is more than 650, considering Page Nos. 43 of 170 total number of slum dwellers listed in certified Annexure II and the appeals for eligibility are pending, such schemes shall be considered for grant of FSI 4 and remaining tenements, after finalisation of appeals, are to be treated as PAPs/ affordable housing/ Rental housing/ staff quarters, etc. It appears that since the scheme of Defendant No.1 was ‘ongoing scheme’, it has taken benefit of notification dated 1 October 2016 in addition to taking the benefit of DCPR 2034 on account of which FSI of 4.21 is sanctioned to it in the revised LOI dated 27 May

2024. It appears that there were less slum dwellers in the clubbed schemes and therefore about 1040 tenements are being constructed as PAP tenements. Defendant No.1 has transferred 1013 out of 1040 tenements at Wadala (Scheme No.2) and only 27 PAP tenements are retained at Tardeo (Scheme No.1).

67. Under the revised LOI dated 27 May 2024, Defendant No.1 is sanctioned total BUA of 2,26,490.39 sq.mtrs (as against previously sanctioned BUA of 1,59,054 sq.mtrs.). The sale component is now 1,91,625.60 sq.mtrs., which includes BUA of 34,735.77 sq.mtrs. transferred from Wadala Scheme and BUA of 1,29,426.22 sq.mtrs. becoming available at Tardeo Scheme. Additionally fungible compensatory BUA of 27,463.61 sq.mtrs. under DCPR 2034 is also added. This is how the total sale component BUA now available as per latest LOI dated 27 May 2024 is 1,91,625.60 sq.mtrs.

68. Based on revised LOI dated 27 May 2024 a revised layout plan dated 24 July 2024 has been sanctioned by SRA, under which following construction is proposed to be undertaken by Defendant No.1:- Page Nos. 44 of 170

(i) Tower with wings ‘C’ and ‘C1’ at the disclosed location sharing common podium with Towers ‘A’ and ‘B’.

(ii) Building named ‘Townhouse’ (Wing- ‘D’) with G + 9 floors attached to the common podium of Towers ‘A’ and ‘B’. (iii) 10 Additional flats on 16th, 23rd, 31st, 38th and 45th floors in Towers ‘A’ and ‘B’ as well as extension of duplex flats on 51st floor by adding one more floor.

(iv) Renovation and refurbishment of Club House by putting additional construction and feeding the Club House with FSI.

(v) Construction of one shop at the ground level.

69. On 2 August 2024, a Commencement Certificate has been procured by Defendant No.1 on the basis of amended layout plan dated 24 July 2024. On 30 April 2025, Supplemental Declaration has been executed and registered unilaterally by Defendant No.1. In the Supplemental Declaration, Defendant Nos.[2] to 4 are described as codevelopers of the project. The supplemental declaration seeks to make various changes in the original Declaration dated 16 October 2012 so as to bring the same in tune with revised LOI dated 27 May 2024, layout plan 24 July 2024 and CC dated 2 August 2024.

70. Thus, as against BUA of 1,58,858.72 sq.mtrs. in the last disclosed plan of 31 December 2009, the first Defendant-Developer is now sanctioned total BUA of 2,26,490.39 sq.mtrs. On account of clubbing of the two slum schemes and shifting rehab area from Tardeo (Scheme No. 1) to Wadala (Scheme No. 2) and corresponding shifting of sale component area from Wadala to Tardeo, there is massive increase in the sale component area under the revised LOI dated 27 May

2024. In the last disclosed plan of 31 December 2009, the sale Page Nos. 45 of 170 component BUA was 88,003.51 sq.mtrs., which is now increased in the LOI dated 27 May 2024 to 1,91,625.60 sq.mtrs. Thus, the sale component area is 2.[2] times increased as compared to originally sanctioned sale component area in 2009. Thus, as against the originally planned development in sale component portion of the scheme, Defendant Nos.[1] to 4 are now constructing more than twice the area, which has given rise to the present litigation.

71. In the light of the above massive additional construction undertaken by Defendant No.1 in conjunction with Defendant Nos.[2] to 4, Plaintiffs have filed the present Suit contending that no additional construction can be undertaken by Defendant Nos.[1] to 4 by utilising any sale component FSI as the additional construction is contrary to the disclosure made to the flat purchasers of Towers ‘A’ and ‘B’ and in the teeth of provisions of Sections 7 and 7A of the MOFA.

72. Having broadly set out the exact nature of controversy between the parties, I now proceed to examine various issues, answers to which would determine plaintiff’s entitlement to temporary injunction.

STATUTORY SCHEME OF MOFA

73. MOFA is a beneficial legislation, enacted to regulate the activities inter alia of construction and sale of flats. It is aimed at protecting the interests of flat purchasers and to prevent the mischief by private developers in accepting consideration without executing agreements for sale of flats, in constructing in excess of disclosure, not forming collective bodies of flat purchasers, not conveying land/building to such collective bodies, etc. MOFA governs four Page Nos. 46 of 170 activities of construction, sale, management and transfer. It regulates the activities of promoters of construction of buildings and mandates that the construction is carried out in accordance with the sanctioned permissions issued by the planning authorities. It also regulates the activity of sale of flats to the flat purchasers by ensuring execution of registered agreement for sale, making of necessary disclosures to flat purchasers, etc. It provides for compulsory formation of collective body of flat purchasers for management of the buildings. Lastly, it also provides for compulsory conveyance and transfer of title in the land and building by the promoter in favour of collective body of flat purchasers.

74. For the purpose of determination of various issues involved in the Interim Application, it would be appropriate to take a quick stock of the relevant provisions of MOFA. The term ‘Promoter’ has been defined under Section 2(c) of MOFA as under:- (c) “promoter” means a person and includes a partnership firm or a body or association of persons whether registered or not who constructs or causes to be constructed a block or building of flats or apartments for the purpose of selling some or all of them to other persons, or to a company, co-operative society or other association of persons, and includes his assignees; and where the person who builds and the person who sells are different persons, the term includes both;

75. Section 3 of MOFA provides for general liabilities of Promoter and provides thus:-

3. General liabilities of promoter. (1) Notwithstanding anything in any other law, a promoter who intends to construct or constructs a block or building of flats, all or some of which are to be taken or are taken on ownership basis, shall in all transactions with persons intending to take or taking one or more of such flats, be liable to give or produce, or cause to be given or produced, the information and the documents hereinafter in this section mentioned. (2) A promoter, who constructs or intends to construct such block or Page Nos. 47 of 170 building of flats, shall— (a) make full and true disclosure of the nature of his title to the land on which the flats are constructed, or are to be constructed; such title to the land as aforesaid having been duly certified by an Attorney-at-law, or by an Advocate of not less than three years standing, and having been duly entered in the Property card or extract of Village Forms VI or VII and XII or any other relevant revenue record; (b) make full and true disclosure of all encumbrances on such land, including any right, title, interest or claim of any party in or over such land;

(c) give inspection in seven days‟ notice or demand, of the plans and specifications of the building built or to be built on the land; such plans and specifications having been approved by the local authority which he is required so to do under any law for the time being in force;

(d) disclose the nature of fixtures, fittings and amenities (including the provision for one or more lifts) provided or to be provided; (e) disclose on reasonable notice or demand if the promoter is himself the builder, the prescribed particulars as respects the design and the materials to be used in the construction of the buildings, and if the promoter is not himself the builder disclose, on such notice or demand, all agreements (and where there is no written agreement the details of all agreements) entered into by him with the architects and contractors regarding the design, materials and construction of the building; (f) specify in writing the date by which possession of the flat is to be handed over (and he shall hand over such possession accordingly); (g) prepare and maintain a list of flats with their numbers already taken or agreed to be taken, and the names and addresses of the parties, and the price charged or agreed to be charged therefor, and the terms and conditions if any on which the flats are taken or agreed to be taken; (h) state in writing, the precise nature of the organisation of persons to be constituted and to which title is to be passed, and the terms and conditions governing such organisation of persons, who have taken or are to take the flats;

(i) not allow persons to enter into possession until a completion certificate where such certificate is required to be given under any law, is duly given by the local authority (and no person shall take possession of a flat until such completion certificate has been duly Page Nos. 48 of 170 given by the local authority); (j) make a full and true disclosure of all outgoings (including ground rent if any, municipal or other local taxes, taxes on income, water charges and electricity charges, revenue assessment, interest on any mortgage or other encumbrances, if any); (k) make a full and true disclosure of such other information and documents in such manner as may be prescribed; and give on demand true copies of such of the documents referred to in any of the clauses of this sub-section as may be prescribed at a reasonable charge therefor;

(l) display or keep all the documents, plans or specifications (or copies thereof) referred to in clauses (a), (b) and (c), at the site and permit inspection thereof to persons intending to take or taking one or more flats;

(m) when the flats are advertised for sale, disclose inter-alia in the advertisement the following particulars, namely:—

(i) the extent of the carpet area of the flat including the area of the balconies which should be shown separately;

(ii) the price of the flat including the proportionate price of the common areas and facilities which should be shown separately, to be paid by the purchaser of flat; and the intervals at which the instalments thereof may be paid;

(iii) the nature, extent and description of the common areas and facilities; and

(iv) the nature, extent and description of limited common areas and facilities, if any; (n) sell flats on the basis of the carpet area only: Provided that, the promoter may separately charge for the common areas and facilities in proportion to the carpet area of the flat. Explanation.— For the purposes of this clause, the carpet area of the flat shall include the area of the balcony of such flat.

76. Thus, every promoter who constructs a block or building of flats must fulfill the liabilities under Section 3 of MOFA. Section 4 provides for compulsory execution and registration of Agreement for sale of a flat before accepting advance payment by the promoter and provides thus: Page Nos. 49 of 170

4. Promoter before accepting advance payment or deposit to enter into agreement and agreement to be registered.— (1) Notwithstanding anything contained in any other law, a promoter who intends to construct or constructs a block or building of flats, all or some of which are to be taken or are taken on ownership basis, shall, before, he accepts any sum of money as advance payment or deposit, which shall not be more than 20 per cent. of the sale price enter into a written agreement for sale with each of such persons who are to take or have taken such flats, and the agreement shall be registered under the Registration Act, 1908 (XVI of 1908) (hereinafter in this section referred to as “the Registration Act”) and such agreement shall be in the prescribed form. (1A) The agreement to be prescribed and sub-section (1) shall contain inter alia the particulars as specified in clause (a); and to such agreement there shall be attached the copies of the documents specified in clause (b),— (a) particulars,—

(i) if the building is to be constructed, the liability of the promoter to construct it according to the plans and specifications approved by the local authority where such approval is required under any law for the time being in force;

(ii) the date by which the possession of the flat is to be handed over to the purchaser;

(iii) the extent of the carpet area of the flat including the area of the balconies which should be shown separately;

(iv) the price of the flat including the proportionate price of the common areas and facilities which should be shown separately, to be paid by the purchaser of flat; and the intervals at which instalments thereof may be paid;

(v) the precise nature of organisation to be constituted of the persons who have taken or are to take the flats;

(vi) the nature, extent and description of limited common areas and facilities;

(vii) the nature, extent and description of limited common areas and facilities, if any;

(viii) percentage of undivided interest in the common areas and facilities appertaining to the flat agreed to be sold;

(ix) statement of the use of which the flat is intended and restriction of its use, if any;

(x) percentage of undivided interests in the limited common areas and facilities, if any, appertaining to the flat agreed to be sold; Page Nos. 50 of 170 (b) copies of documents,—

(i) the certificate by an Attorney-at-law or Advocate under clause

(ii) Property Card or extract of village Forms VI or VII and XII or any other relevant revenue record showing the nature of the title of the promoter to the land on which the flats are constructed or are to be constructed;

(iii) the plans and specifications of the flat as approved by the concerned local authority. (2) Any agreement for sale entered into under sub-section (1) shall be presented by the promoter or by any other person competent to do so under section 32 of the Registration Act, at the proper registration office for registration, within the time allowed under sections 23 to 26 (both inclusive) to the said Act and execution thereof shall be admitted before the registering officer by the person executing the document or his representative, assign or agent as laid down in sections 34 and 35 of the said Act also within the time aforesaid: Provided that, where any agreement for sale is entered into, or is purported to be entered into, under sub-section (1), at any time before the commencement of the Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) (Amendment and Validating Provisions) Act, 1983 (Mah. V of 1984), and such agreement was not presented for registration or was presented for registration but its execution was not admitted before the registration officer by the person concerned, before the commencement of the said Act, then such document may be presented at the proper registration office for registration, and its execution may be admitted, by any of the persons concerned referred to above in this sub-section, on or before the 31st December 1984, and the registering officer shall accept such document for registration, and register it under the Registration Act, as if it were presented, and its execution was admitted, within the time laid down in the Registration Act: Provided further that, on presenting a document for registration as aforesaid if the person executing such document or his representative, assign or agent does not appear before the registering officer and admit the execution of the document, the registering officer shall cause a summons to be issued under section 36 of the Registration Act requiring the executant to appear at the registration office, either in person or by duly authorised agent, at a time fixed in the summons. If the executant fails to appear in compliance with the summons, the execution on the document shall be deemed to be admitted by him and the registering officer may proceed to register the document accordingly. If the executant appears before the registering officer as required by the summons but denies execution of the Page Nos. 51 of 170 document, the registering officer shall, after giving him a reasonable opportunity of being heard, if satisfied that the document has been executed by him, proceed to register the document accordingly.

77. Section 7 of MOFA imposes a restriction on the promoter from making any additions or alterations in the flat or to the structure of the building after disclosure of plans and specifications without the previous consent of the flat purchasers and provides thus:-

7. After plans and specifications are disclosed no alterations or additions without consent of persons who have agreed to take the flats; and defects noticed within three years to be rectified.— (1) After the plans and specifications of the building as approved by the local authority as aforesaid, are disclosed or furnished to the persons who agrees to take one or more flats, the promoter shall not make—

(i) any alteration in the structures described therein in respect of the flat or flats which are agreed to be taken, without the previous consent of that persons;

(ii) any other alterations or additions in the structure of the building without the previous consent of all the persons who have agreed to take the flats in such building. (2) Subject to sub-section (1), the building shall be constructed and completed in accordance with the plans and specifications aforesaid; and if any defect in the building or material used, or if any unauthorized change in the construction is brought to the notice of the promoter within a period of three years from the date of handing over possession, it shall wherever possible be rectified by the promoter without further charge to the persons who have agreed to take the flats, and in other cases such person shall be entitled to receive reasonable compensation for such defect or change. Where there is a dispute as regards any defect in the building or material used, or any unauthorised change in the construction, or as to whether it is reasonably possible for the promoter to rectify any such defect or change, or as regards the amount of reasonable compensation payable in respect of any such defect or change which cannot be, or is not rectified by the promoter, the matter shall, on payment of such fee as may be prescribed, and within a period of three years from the date of handing over possession, be referred for decision,—

(i) in an urban agglomeration as defined in clause (n) of section 2 of the Urban Land (Ceiling and Regulation) Act, 1976 (33 of 1976), to such competent authority authorised by the State Government under clause

(d) of section 2 of that Act, and

(ii) in any other area, to such Deputy Chief Engineer, or to such other Officer of the rank equivalent to that of Superintending Engineer in the Maharashtra Service of Engineers, of a Board established under section 18 of the Maharashtra Housing and Area Development Act, 1976 (Mah. Page Nos. 52 of 170 XXVIII of 1977),as the State Government may, by general or special order, specify in this behalf. Such competent authority, Deputy Chief Engineer or, as the case may be, the other officer of a Board shall, after inquiry, record his decision, which shall be final.

78. Section 7A of MOFA is incorporated by Amendment Act of 1986 when Section 7 was also simultaneously amended and clarifies that the restriction of making additions or alterations to structure of the building under Section 7(1)(ii) shall not apply to construction of an additional building or structures constructed after obtaining approval of the local authority in accordance with the building rules, bye-laws or DCR. Section 7A provides thus:- 7A. Removal of doubt.— For the removal of doubt, it is hereby declared that clause (ii) of sub-section (1) of section 7 having been retrospectively substituted by clause (a) of section 6 of the Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) (Amendment) Act, 1986 (Mah.

XXXVI of 1986) (hereinafter in this section referred to as “the Amendment Act”), it shall be deemed to be effective as if the said clause (ii) as so substituted has been in force at all material times; and the expression “or construct any additional structures” in clause (ii) of sub-section (1) of section 7 as it existed before the commencement of the Amendment Act and the expression “constructed and completed in accordance with the plans and specifications as aforesaid” and “any unauthorised change in the construction” in sub-section (2) of section 7 shall, notwithstanding anything contained in this Act, or in any Agreement, or in any judgement, decree or order of any Court, be deemed never to apply or to have applied in respect of the construction of any other additional building or structures constructed or to be constructed under a scheme or project of development in the layout after obtaining the approval of a local authority in accordance with the building rules or building byelaws or Development Control Rules made under any law for the time being in force.

79. Section 10 of MOFA mandates the promoter to take steps for formation of co-operative society or company and provides thus:-

10. Promoter to take steps for formation of co-operative society or company.— (1) As soon as a minimum number of persons required to form a Cooperative society or a company have taken flats, the promoter shall within Page Nos. 53 of 170 the prescribed period submit an application to the Registrar for registration of the organisation of persons who take the flats as Co-operative society or, as the case may be, as a company; and the promoter shall join, in respect of the flats which have not been taken, in such application for membership of a Co-operative society or as the case may be, of a company. Nothing in this section shall affect the right of the promoter to dispose of the remaining flats in accordance with the provisions of this Act: Provided that, if the promoter fails within the prescribed period to submit an application to the Registrar for registration of society in the manner provided in the Maharashtra Co-operative Societies Act, 1960 (Mah. XXIV of 1961), the Competent Authority may, upon receiving an application from the persons who have taken flats from the said promoter, direct the District Deputy Registrar, Deputy Registrar or, as the case may be, Provided further that, no such direction to register any society under the preceding proviso shall be given to the District Deputy Registrar, Deputy Authority without first verifying authenticity of the applicants, request and giving the concerned promoter a reasonable opportunity of being heard. (2) If any property consisting of building is constructed or to be constructed and the promoter submits such property to the provisions of the Maharashtra Apartment Ownership Act, 1970 (Mah. XV of 1971), by executing and registering a Declaration as provided by that Act then the promoter shall inform the Registrar as defined in the Maharashtra Cooperative Societies Act, 1960 (Mah. XXIV of 1961), accordingly; and in such cases, it shall not be lawful to form any co-operative society or company.

80. Section 11 of MOFA imposes a statutory obligation on the promoter to complete his title and to convey to the collective body of flat purchasers his right, title and interest in the land and the building. Subsections (3) and (4) of Section 11 empowers the Competent Authority to grant conveyance of land and building in favour of collective body of flat purchasers in the event of promoter failing to execute conveyance as per Section 11(1) and (2). Section 11 of MOFA provides thus:-

11. Promoter to convey title, etc., and execute documents, according to agreement.— (1) A promoter shall take all necessary steps to complete his title and convey to the organisation of persons, who take flats, which is registered either as a co-operative society or as a company as aforesaid or to an association of flat takers [or apartment owners], his right, title and interest in the land and building, and execute all relevant documents therefor in Page Nos. 54 of 170 accordance with the agreement executed under section 4 and if no period for the execution of the conveyance is agreed upon, he shall execute the conveyance within the prescribed period and also deliver all documents of title relating to the property which may be in his possession or power. (2) It shall be the duty of the promoter to file with the Competent Authority, within the prescribed period, a copy of the conveyance executed by him under sub-section (1). (3) If the promoter fails to execute the conveyance in favour of the Cooperative society formed under section 10 or, as the case may be, the Company or the association of apartment owners, as provided by subsection (1), within the prescribed period, the members of such Co-operative society or, as the case may be, the Company or the association of apartment owners may, make an application, in writing, to the concerned Competent Authority accompanied by the true copies of the registered agreements for sale, executed with the promoter by each individual member of the society or the Company or the association, who have purchased the flats and all other relevant documents (including the occupation certificate, if any), for issuing a certificate that such society, or as the case may be, Company or association, is entitled to have an unilateral deemed conveyance, executed in their favour and to have it registered. (4) The Competent Authority, on receiving such application, within reasonable time and in any case not later than six months, after making such enquiry as deemed necessary and after verifying the authenticity of the documents submitted and after giving the promoter a reasonable opportunity of being heard, on being satisfied that it is a fit case for issuing such certificate, shall issue a certificate to the Sub-Registrar or any other appropriate Registration Officer under the Registration Act, 1908 (16 of 1908), certifying that it is a fit case for enforcing unilateral execution, of conveyance deed conveying the right, title and interest of the promoter in the land and building in favour of the applicant, as deemed conveyance. (5) On submission by such society or as the case may be, the Company or the association of apartment owners, to the Sub-Registrar or the concerned appropriate Registration Officer appointed under the Registration Act, 1908 (16 of 1908), the certificate issued by the Competent Authority alongwith the unilateral instrument of conveyance, the Sub-Registrar or the concerned appropriate registration Officer shall, notwithstanding anything contained in the Registration Act, 1908 (16 of 1908), issue summons to the promoter to show cause why, such unilateral instrument should not be registered as ‘deemed conveyance’ and after giving the promoter and the applicants a reasonable opportunity of being heard, may on being satisfied that it was fit case for unilateral conveyance, register that instrument as, ‘deemed conveyance’.

81. In exercise of powers under Section 15 of MOFA, the Government of Maharashtra has notified Maharashtra Ownership of Flats (Regulation of the Promotion of Construction, etc) Rules 1964 Page Nos. 55 of 170 (MOFA Rules). Rule 3 of MOFA Rules provides for the manner of making disclosure of documents provided for in Section 3. Rule 4 provides for making available true copies of the documents. Rule 5 provides that the agreement to be executed with flat purchasers as per Section 4 shall be in the format prescribed in Form V of the Rules. Form V to MOFA Rules prescribes a model form of agreement which can be modified or adapted in each case having regard to facts and circumstances. However, clauses 1, 2, 3, 4, 5, 8, 9, 10, 11, 12, 13, and 22 of Form V are statutory and mandatory according to the provision of MOFA and MOFA Rules and must be retained in the agreement. Any covenant in flat purchase agreement contrary to the above statutory clauses become not binding and unenforceable as being ab initio void. The following Note No.1 in the opening part of Form V of MOFA Rules makes this position clear. Note No 1:-This is only a model form of agreement, which will have to be modified and adapted in each case having regard to the facts and circumstances of each case but in any event such clauses 1, 2, 3, 4, 5, 8, 9, 10, 11, 12, 13 and 22 which are statutory and mandatory according to the provisions of the Act and these rules shall be retained in each and every individual agreement/s executed between the Promoter and Flat Purchaser. Any departure or variation from these statutory and mandatory conditions, being violative and ultra vires of the provisions of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 (hereinafter referred to as “the said Act”) will not be binding and enforceable upon the parties, such conditions being void ab initio:

82. Under clause 4 of Form V agreement, the promoter is compulsorily required to declare the FSI available in respect of the land. Clause 4 of Form V agreement reads thus:-

4. The Promoter hereby declares that the Floor Space Index available in respect of the said land is …….. sq. metres only and that no part of the said floor space index has been utilised by the Promoter elsewhere for any purpose whatsoever. In case the said floor space index has been Page Nos. 56 of 170 utilised by the Promoter elsewhere, then the Promoter shall furnish to the flat purchaser all the detailed particulars in respect of such utilisation of the said floor space index by him. In case while developing the said land the Promoter has 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 Promoter to the flat Purchaser. [****]

83. There are prayers in the Suit for formation of a cooperative housing society and for transfer of lease of land and building in favour of such society, for which provisions of Sections 10 and 11 of MOFA are relevant. However, Plaintiffs have not sought any temporary injunction in relation to prayer for formation of society and for conveyance as of now. Their main grievance in the suit is the proposed construction activity undertaken by the Defendant-Developers and the temporary injunction sought by them is to stop the developers from undertaking any further construction contrary to the disclosures made under Sections 3 and 4 and in breach of provisions of Sections 7 and 7A of the MOFA. Thus, for deciding the prayers in the Interim Application, provisions of Section 3, 4, 7 and 7A of MOFA and Rule 5 read with Form V of Agreement are of utmost relevance. From combined reading of provisions of Sections 3, 4, 7 and 7A read with statutory clauses-3 and 4 of Form V Agreement, the broad statutory scheme relating to disclosure appears to be as under: (a) A promoter must disclose at the outset (at the time of execution of agreement for sale of flats) inter alia (i) title and details of the land, including the total land area taken up for development, (ii) total buildable potential of the land by disclosing the FSI available in respect of the land, (iii) plans and specifications of the building(s). Page Nos. 57 of 170 (b) Once the above disclosure is made, no changes can be effected in the building plans affecting the structure of ‘flats’ agreed to be sold under Section 7(1)(i).

(c) If any addition or alteration is made to the disclosed ‘structure of the building’, previous consent of all flat purchasers becomes necessary under Section 7(1)(ii).

(d) This would mean that no ‘additional wing’ to the existing sanctioned building can be added without consent of all flat purchasers, even if disclosed development potential is not violated. (e) However, this restriction does not apply for construction of ‘additional building or structure’ provided construction of such additional building or structure is within the disclosed development potential. (f) If construction of ‘additional building’ is beyond the disclosed development potential, construction thereof is prohibited without consent of all flat purchasers.

84. Having broadly discussed the statutory framework of MOFA and MOFA Rules relating to disclosure provisions, I now proceed to examine the defence of the developers that MOFA does not apply to the instant project. Page Nos. 58 of 170 APPLICATION OF MOFA TO THE PROJECT

85. One of the major defenses raised on behalf of Defendant Nos.[1] to 4 is that provisions of MOFA are not applicable to the land in question and that therefore there is no question of making either any disclosure within the meaning of Sections 3 and 4 or violation of provisions of Sections 7 or 7A of MOFA. It is the contention of Defendant Nos.[1] to 4 that the land on which construction of sale component buildings in the Scheme is undertaken, is MHADA land and that therefore provisions of MOFA are not applicable by virtue of Section 190 of MHADA Act and Section 18 of MOFA. It must be observed at this stage that the defense of non-application of MOFA to the project ‘The Imperial’ is rather dishonest. It is contrary to the representation made to the flat purchasers and is taken conveniently to defeat the challenge to the proposed construction. Agreement for sale executed with flat purchasers of Towers A and B specifically state that the same are executed as per provisions of MOFA. The so called consent letters procurred from the flat purchasers at the time of handing over possession of flats again stated that MOFA applies to the project in question. I therefore proceed to decide the objection of non-application of MOFA raised by Defendant Nos. 1 to 4 keeping in mind the fact that Defendant Nos. 1 to 4 are not very candid in raising the same.

86. Before considering the effect of Section 190 of MHADA Act or Section 18 of MOFA, one factual controversy needs to be resolved. There is no consensus between the contesting parties as to whether the land on which the Project is being executed is MHADA land or not. Plaintiffs dispute that the land belongs to or vests in MHADA. Plaintiffs claim that the land belongs to the State Government/MCGM on which Page Nos. 59 of 170 Slum Scheme has been sanctioned and is being implemented. Thus, ownership of land by MHADA is disputed by Plaintiffs and therefore it would be necessary to record prima-facie findings on factual dispute about ownership of land in question, which I proceed to do.

WHETHER PROJECT IS BEING EXECUTED ON MHADA LAND?

87. As observed above, Defendant Nos.[1] to 4 contend that the land on which construction of sale component buildings in the Scheme is undertaken, is MHADA land and therefore provisions of MOFA are not applicable to the project in question. The claim of Defendant Nos.[1] to 4 about the land vesting in or belonging to MHADA can be summarised thus: (A) According to Defendant Nos.[1] to 4, the Agreement for Sale executed with flat purchasers of Towers-A and B is in respect of land admeasuring 19,944.24 sq.mtrs, which forms a portion of larger property bearing Cadastral Survey Nos. 725 (Pt) and 1/725 (Pt). It is their claim that the said land admeasuring 19,944.24 sq.mtrs. is ‘the said property’ described under the Agreements for Sale. According to them, Cadastral Survey No.725 comprised of a large tract of land, which was acquired for Police Department. Out of the said acquired land at Cadastral Survey No.725, land admeasuring 4.26 hectares was occupied by slum structures. By Memorandum dated 2 February 1989, the Revenue and Forest Department of the Government of Maharashtra decided to demarcate land occupied by slums of 4.26 hectares into two distinct and independent sub-plots as under: Page Nos. 60 of 170

(i) area admeasuring 3.31 hectares to be surrendered by Police Department to MHADA for rehabilitation of slum dwellers.

(ii) area admeasuring 0.95 hectares together with permissible FSI and development density to be retained by Police Department. (B) By Memorandum dated 2 February 1989, the land sanctioned in favour of MHADA was directed to be transferred by Home Department to Revenue Department, whereafter lease for a period of 99 years was to be executed in favour of MHADA. The methodology for determination of lease premium and rent was also suggested in the said Memorandum.

(C) Accordingly, in the P.R. Card for C.S. No.725, area admeasuring 33,100 sq.mtrs was separately carved out and was deducted from C.S. No.725 and shown as separate subdivided C.S. No.4/725 by making a remark ‘as the area has been lease by Govt. Lbl 2588/P.K 543/Go dated 2-2-1989’.

(D) This is how, separate P.R. card for C.S. No.4/725 in respect of land admeasuring 33,100 sq.mtrs was prepared from which name of Governor of Maharashtra was deleted and name of MHADA was added. (E) According to Defendant Nos.[1] to 4, though separate P.R. card was prepared in respect of C.S. No.4/725, actual physical demarcation of land admeasuring 33,100 sq.mtrs was not made. Page Nos. 61 of 170 Defendant No.1 applied for measurement and separate demarcation on 24 July 2015. The measurements were carried out on 6 and 7 August 2015 and a boundary map was prepared and issued to Defendant No.1 on 7 August 2020. The land admeasuring 33,100 sq.mtrs forming part of C.S. No.4/725 has been demarcated in red dotted line in the said Map. (F) According to Defendant Nos.[1] to 4, the Slum Scheme has been undertaken on the said land bearing C.S. No.4/725 which is MHADA land. They contend that C.S. No.4/725 does not appear in any of the documents such as LOI, layout plan etc. as the actual physical demarcation in respect of the land occurred on 7 August

2020.

88. This is how Defendant Nos.[1] to 4 claim that the entire Slum Scheme, and in any case, the construction of sale component buildings bearing Towers with Wings-A, B, C, C-1 and D is being undertaken on plot bearing C.S. No.4/725, which is MHADA land.

89. On the contrary, it is the contention of the Plaintiffs that the land in question belongs to the State Government. They rely upon copy of P.R. card annexed to Agreements for Sale showing State Government as owner of the land bearing C.S. No.725 (Pt) and 1/725 (Pt). They also rely upon Title Certificate of advocate of Defendant No.1 appended to the Agreements for Sale certifying that the land belongs to the Collector/MCGM. Page Nos. 62 of 170

90. In my view, it is difficult to conclusively hold at this juncture that the whole of the Project is being executed only in respect of land bearing C.S. No.4/725 or that the said land belongs to or vests in MHADA. The Defendant-Developers have relied on judgments of this Court in Akola Municipal Council and M. Mohammed. (supra) in support of their contention that the terms ‘vesting in’ and ‘belonging to’ includes cases where a building or land is taken on lease. While there can be no dispute about the above proposition, the issue here is whether actual lease in respect of land admeasuring 33,100 sq.mtrs. was ever executed in favour of MHADA? As observed above, Memorandum dated 2 February 1989 contemplated grant of lease to MHADA for a period of 99 years in respect of land admeasuring 3.31 hectares for rehabilitation of slum dwellers. The Memorandum also discusses the modalities for determination of valuation of the land and the ground rent payable. It would be necessary to reproduce letter dated 2 February 1989, which reads thus:- No.: LBL 2588 / Case No. 583 / G-8 Revenue and Forest Department Mantralaya, Mumbai-400 032 Date: 2 February, 1989 Subject: Land – Mumbai. C.S. No. 725, Malabar Hill Division, M.P. Mill Compound, Tardeo. Memorandum:- I am directed to inform the District Collector, Mumbai, through notification that out of the land acquired for the Police Department, being C.S. No. 725, Malabar Hill, an area admeasuring 4.26 hectares has been encroached upon by slum dwellers. And whereas, it is necessary to resolve the said issue, the Government has taken the following decisions: (A) The said land admeasuring 4.26 hectares (Four point Twenty-Six hectares) shall be demarcated into two distinct and independent sub-plots as under:

1) An area admeasuring 3.31 hectares (Three point Thirty-One hectares), to be surrendered by the Police Department to the Maharashtra Housing and Area Development Authority (MHADA) for the rehabilitation of slum dwellers. Page Nos. 63 of 170

2) An area admeasuring 0.95 hectares (Zero point Ninety-Five hectares), together with the permissible Floor Space Index and development density, shall be retained by the Police Department. The above land shall be clearly shown on the plan and physically demarcated on site as two independent sub-plots. (B) The land to be sanctioned in favour of the Maharashtra Housing and Area Development Authority shall first be transferred by the Home Department to the Revenue Department, and thereafter leased to MHADA for a period of 99 years. The valuation of the said land shall be determined in accordance with paragraph 2(2) of Government Resolution, Revenue and Forest Department, No. LGL.1081/8744/Case No. 1447/G-5, Dt. 16.2.1985, i.e., the rate of divisional acquisition approved under the Urban Land Ceiling Act plus Rs. 2/- per Sq. Mtr. The annual ground rent shall be at 8% of the valuation. The other conditions of the lease shall be in accordance with Annexure "A" attached to the aforesaid Government Resolution.

(C) The Maharashtra Housing and Area Development Authority shall prepare plans, with the permissible F.S.I. and development density, for the rehabilitation of slum dwellers on the area admeasuring 3.31 hectares. The land situated on the slope, upon which construction of buildings shall not be permissible, but whose Floor Space Index shall nevertheless be available to the Authority, and which is required to be used for a garden or plantation, shall be handed over to the Police Department for establishment purposes. Possession of this land shall remain with the Police Department, however, legal ownership shall vest with the Authority.

(D) The area admeasuring 0.95 hectares, which is to be retained by the

Police Department, but is presently in unauthorized possession of slum dwellers, shall be vacated as follows: upon completion of the first phase of construction of buildings on the land sanctioned to them, the Maharashtra Housing and Area Development Authority shall first rehabilitate the slum dwellers occupying the said area, and thereafter vacate the land and hand over possession of the vacant land to the Police Department. The responsibility of removing the encroachments on the said land, and of ensuring that no fresh encroachments take place until possession of the vacant land is handed over to the Police Department, shall rest with the Maharashtra Housing and Area Development Authority. This Memorandum is issued with the concurrence of the Finance Department, vide their informal Reference No. CR 117/Mgmt-9, Dt. 01.02.1989. By order and in the name of the Governor of Maharashtra. (A. G. Deshpande) Assistant Secretary Government of Maharashtra Revenue and Forest Department. (emphasis added) Page Nos. 64 of 170

91. Careful perusal of the Memorandum dated 2 February 1989 would indicate that land admeasuring 3.31 hectares was directed to be handed over to MHADA for the sole purpose of rehabilitation of slum dwellers so that the balance land admeasuring 0.95 hectares would have remained with Police Department, possibly for construction of quarters. Para-E of Memorandum provides for the modalities of development of entire land admeasuring 4.26 hectares which was encroached upon by slum dwellers. It was directed that after construction of first phase of buildings by MHADA, the slum dwellers on land admeasuring 0.95 hectares were to be rehabilitated in those buildings and MHADA was required to handover vacant possession of the said lands to Police Department. Valuation of the land was required to be done and MHADA was to pay annual ground rent @ 8% of such valuation.

92. However, there is nothing on record to indicate that any lease-deed was executed with MHADA or that MHADA paid the ground rent to the State Government.

MHADA has apparently not executed the work of rehabilitation of slum dwellers for which purpose, lease in respect of land admeasuring 3.31 hectares was to be granted in favour of MHADA. On the other hand, the slum scheme in respect of much larger land admeasuring 54,360 sq. mtrs. is implemented by SRA (and not by MHADA) by engaging Defendant No.1 as the developer in

1999. The status chart produced by Defendant No. 1 at Pg. 56 of its Compilation of Documents indicates that even the Police housing building of 15 floors is constructed by it, with OC issued on 13-01-2023. Thus, it is more than apparent that MHADA has not played any role in implementation of the slum scheme in respect of any portion of the land, including the land admeasuring 33,100 sq.mtrs., which was Page Nos. 65 of 170 supposed to be leased out to MHADA for limited purpose of rehabilitation of the slum dwellers. The objective for which the land admeasuring 33,100 sq.mtrs was supposed to be leased out to MHADA has failed. Originally the land admeasuring 33,100 sq.mtrs was supposed to be utilized for construction of tenements for slumdwellers by making vacant the balance portion of 0.96 hectares for being handed over to police department. This has not happened. There was no plan of construction of any free sale component by MHADA. DCR 33(10), which came into effect in 1991, is utilized for implementation of slum scheme through a private developer, who has put up and is further planning to put up substantial sale component buildings, which was not envisaged in 1989 Memorandum. It appears that the neighboring slums are clubbed by the SRA, which has implemented the slum scheme.

93. The LOI dated 3 September 2005 issued by SRA indicates that the slum scheme is implemented in respect of land admeasuring 54360.85 sq. mtrs. Thus, even the area in respect of which the slum scheme is implemented by SRA (54,360.85 sq.mtrs) does not match the area of 33,100 sq.mtrs. which was supposed to be carved out from C.S. No. 725 and leased out to MHADA, and which has ultimately been demarcated as C.S. No.4/725. This is the reason why it is not possible to hold at this juncture with sufficient clarity that the slum scheme in question is implemented by Defendant No.1 only in respect of land which was supposed to be leased out to MHADA vide Memorandum dated 2 February 1989.

94. Also of relevance is the fact that there are absolutely no documents on record to indicate that MHADA exercised any rights in Page Nos. 66 of 170 respect of any portion of land on which the slum scheme is implemented. If the land admeasuring 54,360.85 sq.mtrs., on which slum scheme is implemented, includes the land admeasuring 33,100 sq.mtrs. carved out vide Memorandum dated 2 February 1989 for grant of lease to MHADA, there ought to have been at least some correspondence/documents on record to indicate that MHADA’s concurrence was sought for implementation of the slum scheme by SRA. While one may contend that MHADA and SRA are instrumentalities of State, who both are under obligation to rehabilitate slum dwellers and that therefore it would hardly matter as to which agency implements the slum scheme, at the same time, there appears to be no clarity on the issue as to whether MHADA actually took over lease in respect of land admeasuring 33,100 sq.mtrs. or permitted SRA to implement the slum scheme thereon. Under the Memorandum, MHADA was supposed to prepare the plans for construction of buildings for rehabilitation of slum dwellers. However admittedly, nothing has been done by MHADA for rehabilitation of the slum dwellers and the rehabilitation process is implemented by SRA through a private developer. If MHADA was to itself rehabilitate the slum dwellers or implement the slum scheme, the contention of land being MHADA land could have been accepted. Therefore, mere mutation of name of MHADA on property card in respect of part of the land is not enough, as of now, to conclude that the scheme is implemented on MHADA land.

95. Defendant No.1, who now vehemently claims that the land on which slum scheme is executed is MHADA land, did not represent so to the flat purchasers while executing the Agreements for Sale. Alongwith the said agreements, Defendant No.1 appended copy of Page Nos. 67 of 170 Certificate of Title of its Advocate in which following statement was made:-

2. A part of Larger Property comprising the area covered by Nav Maharashtra Nagar Sahakari Griha Nirman Sanstha Ltd. and new Jaiphalwadi Co-op. Hsg. Soc. Ltd. stands vested in Collector of Mumbai and the balance portion of larger property comprising the area occupied by Janata Hill Co-op. Hsg. Soc. Ltd. stands vested in Municipal Corporation of Greater Mumbai. Thus, prima facie, it appears that the plea of project being executed on MHADA land is conveniently raised by the Defendant-Developers for somehow escaping the liabilities arising out of application of MOFA.

96. Furthermore, the demarcation of CS No. 4/725 done by the City Survey Office vide Map dated 7 August 2020 (produced at pages 12 and 13 of Compilation of Defendants’ documents) also indicates that the entire slum scheme is not being executed only on land bearing CS No.4/725 and substantial portion of the slum scheme is outside the said CS No. 4/725. The demarcation of land bearing CS No. 4/725 is also seen in red dotted lines in the map copied in the latter part of the judgment while discussing the issue of location of the ‘said property’. The said map shows that substantial portion of the land on which slum scheme is implemented is outside CS No. 4/725. Faced with this situation, it is sought to be contended on behalf of Defendant- Developers that though some part of rehab component area may fall outside CS No. 4/725, the sale component is being constructed on land bearing CS No. 4/725, which is leased out to MHADA. Here again, it is seen that some portion of ‘said property’ indicated in the green shading falls outside demarcated CS No. 4/725. It therefore becomes difficult to believe at this stage that the entire sum scheme or even the entire sale Page Nos. 68 of 170 component is being constructed on CS No. 4/725, which was supposed to be leased out to MHADA,

97. Defendant-Developers thus face five difficulties to bring home their contention that the land belongs to or vests in MHADA viz.

(i) absence of any document showing execution of lease of the land in favour of MHADA or MHADA paying the ground rent (ii) absence of any document showing implementation of slum scheme at the instance of MHADA, for which purpose alone, lease of the land of 33,100 sq.mtrs. was to be granted to MHADA, (iii) representation by Defendant No.1 to flat purchasers that the land belongs to State Government and MCGM, (iv) non-matching of area of 33,100 sq.mtrs which was supposed to be leased to MHADA with the land admeasuring 54,360.85 sq.mtrs. on which the slum scheme is ultimately implemented by a different agency i.e. SRA and (v) demarcation map of CS No. 4/725 showing substantial portion of ‘larger property’ and some portion of ‘said property’ falling outside the land supposed to be leased out to MHADA.

98. Therefore, at this stage, it is not possible to conclusively hold that the entire land, on which slum scheme is being implemented or even the land on which sale portion of the scheme is being constructed belongs to or vests in MHADA.

EFFECT OF SECTION 190 OF MHADA ACT AND SECTION 18 OF MOFA

99. Having held that there is lack of clarity about the title in respect of the land in question, it is not really necessary to deal with the contention raised by developers that provisions of MOFA do not apply Page Nos. 69 of 170 to land belonging to or vesting in MHADA on account of provisions of Section 190 of MHADA Act. However since elaborate submissions are canvassed on the issue, I proceed to briefly deal with the same.

100. Under Section190 of MHADA Act, it is provided that MOFA shall not apply to the Authority constituted under MHADA Act or to any land or building belonging to or vesting in such Authority. Section 190 of the MHADA Act provides thus:

190. Mah. XLV of 1963 not to apply to Authority, etc.— The Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 (Mah. XLV of 1963), shall not apply to the Authority duly constituted under the Maharashtra Housing and Area Development Act, 1976 (Mah.

101. Section 18 of MOFA also provides that nothing in the Act shall apply to MHADA and the Boards established under MHADA Act. Section 18 of MOFA provides thus:

18. Act not to apply to Housing and Area Development Authority and Boards.— Nothing in this Act shall apply to the Maharashtra Housing Area Development Authority and the Boards established, under the Maharashtra Housing and Area Development Act, 1976 (Mah.

XXVIII of 1977).

102. Comparative analysis of the two provisions would instantly indicate that there is a marked difference between the way Section 190 of MHADA Act and Section 18 of MOFA are worded. While Section 190 of MHADA Act excludes application of MOFA to:

(i) Authority constituted under MHADA Act;

(ii) land or building belonging to such Authority;

(iii) land or building vesting in such Authority.

103. In contrast, Section18 of MOFA excludes applicability of the Act only to MHADA and Boards established under MHADA Act. Section 18 of MOFA does not exclude its applicability to land or building belonging to MHADA or vesting in MHADA. According to Mr. Samdani, this difference in wordings of the Sections of two enactments is deliberate and conscious. He submits that Section 18 of MOFA has been amended and substituted by Maharashtra Act XII of 1986, which amendment has come into effect after enactment of MHADA Act, 1976. It is contended that the Legislature has consciously not included the words ‘or to any land or building belonging to or vesting in such Authority’ in Section 18 while amending MOFA in the year 1986. Mr. Samdani has placed reliance on the Statement of Objects and Reasons for LC Bill No. VIII of 1986 by which Section 18 of MOFA was proposed to be substituted. According to him, the amendment was effected with a view to bring Section 18 in accordance with provisions of laws in force at that time, including Section 190 of MHADA Act. On the other hand, it is contended on behalf of Defendant Nos.[1] to 4 that the 1986 Amendment to MOFA was only to substitute the office of the Housing Commission under Bombay Housing Boards Act, 1948 and Madhya Pradesh Housing Board Act, 1950, which were repealed. That under Section 7 of MOFA, the Housing Commission was empowered to decide any dispute relating to the amount of compensation which flat purchaser could claim from Promoter. The amendment was brought in essentially to replace the office of Housing Commission with that of the offices currently prescribed under Section 7 of MOFA. It is also contended on behalf of the Defendants-Developers that since Maharashtra Housing Board and Vidarbha Housing Board had ceased to exist on account of repeal of the Page Nos. 71 of 170 two enactments, Section 18 was amended to incorporate MHADA established under MHADA Act of 1976 as a substitute for the two earlier Boards.

104. In my view, even if the contention raised by Mr. Tulzapurkar about the real object of amendment to Section 18 of MOFA in the year 1986 (to replace non-existing Maharashtra Housing Board and Vidarbha Housing Board with MHADA established under 1976 Act) is to be accepted as correct, still the marked difference between the wordings of Section 190 of MHADA Act and Section 18 of MOFA cannot be ignored altogether. If MOFA is not to apply even to land and building belonging to and vesting in MHADA, Section 18 of MOFA would have expressly provided so. From Statement of Objects and Reasons of 1986 Amendment Act, it is clear that the amendment in Section 18 of MOFA was proposed with a view to bring the same in tune with other laws in force, including MHADA Act, which was enacted in 1976. The legislature was thus fully aware that Section 190 of the MHADA Act excluded application of MOFA not just to MHADA but also to land/building belonging or vesting in MHADA. If the intention of the legislature was to secure complete and absolute parity between the provisions of both the enactments, section 18 of MOFA as amended in 1986 would have excluded application of the MOFA also to land/building belonging or vesting in MHADA. However, the legislature consciously did not do so. It has excluded applicability of MOFA only to MHADA and has impliedly extended the applicability of MOFA to land/building belonging to or vesting in MHADA.

105. Thus, there appears to be some inconsistency in the provisions of Section 190 of MHADA Act and Section 18 of the Page Nos. 72 of 170 MOFA. Since MOFA is a beneficial piece of legislation aimed at protecting the interests of flat purchasers, some weightage needs to be given to the provisions of Section 18 of MOFA especially when it comes to the activity of construction and sale of flats by a private developer on MHADA lands. The interpretation placed by Defendant-Developer would result in a situation where every private developer undertaking the activity of construction or sale of flats on MHADA land would escape the liabilities put on promoters by MOFA. To illustrate, if a society, whose building is constructed on MHADA land, undertakes the activity of redevelopment of its building with consent of MHADA and appoints a private developer for redevelopment, the private developer so appointed becomes entitled to sell some of the flats for recouping the expenditure incurred in reconstruction of the building and for earning profits. When he sells such flats and commits default of obligations under Section 3, 4, 7, 7A, 10 or 11 of MOFA, he can claim immunity on a specious ground that the development is carried on land belonging to or vesting in MHADA. He can also escape prosecution under Section 13 of MOFA. In city like Mumbai, large scale private developments are undertaken on MHADA lands and the interpretation of the Defendants would thus result in an absurd situation where private developers redeveloping buildings on MHADA land would stand to gain vis-à-vis their counterparts undertaking development on non-MHADA lands.

106. There is thus conflict in the language of Section 18 of MOFA and Section 190 of MHADA and the benefit of this conflict will necessarily have to be given to the flat purchasers and not to private developers undertaking development on MHADA land. However, there is no such conflict between provisions of MOFA and MMRDA Act. Section 18 of MOFA does not deal with MMRDA at all. It is well Page Nos. 73 of 170 settled that if two interpretations are possible in respect of a statutory provision, the one favorable to the person or class of persons for whose benefit the statute is enacted would be preferred. Applying the principle of beneficial construction, the benefit of absence of words ‘or to any land or building belong to or vesting in Authority’ in Section 18 of MOFA can be given to the flat purchasers and not to developers as MOFA is a beneficial piece of legislation enacted for benefit of the flat purchasers.

107. Also, the subsequent enactment regulating construction and sale of flats viz. Real Estate (Regulation and Development) Act, 2016 (RERA) apparently does not contain any provision to exclude applicability of the RERA to MHADA or to lands belonging to or vesting in MHADA. On the contrary, definition of the term ‘Promoter’ in RERA apparently includes even a development authority or any other public body in respect of allotees of apartments. Definition of the term ‘promoter’ under Section 2(zk) of RERA reads thus: (zk) "promoter" means,---

(i) a person who constructs or causes to be constructed an independent building or a building consisting of apartments, or converts an existing building or a part thereof into apartments, for the purpose of selling all or some of the apartments to other persons and includes his assignees; or

(ii) a person who develops land into a project, whether or not the person also constructs structures on any of the plots, for the purpose of selling to other persons all or some of the plots in the said project, whether with or without structures thereon; or

(iii) any development authority or any other public body in respect of allottees of- (a) buildings or apartments, as the case may be, constructed by such authority or body on lands owned by them or placed at their disposal by the Government; or (b) plots owned by such authority or body or placed at their disposal by the Government, for the purpose of selling all or some of the apartments or plots; or

(iv) an apex State level co-operative housing finance society and a primary cooperative housing society which constructs apartments or buildings for its Members or in respect of the allottees of such apartments or buildings; or Page Nos. 74 of 170

(v) any other person who acts himself as a builder, coloniser, contractor, developer, estate developer or by any other name or claims to be acting as the holder of a power of attorney from the owner of the land on which the building or apartment is constructed or plot is developed for sale; or

(vi) such other person who constructs any building or apartment for sale to the general public. Explanation.--- For the purposes of this clause, where the person who constructs or converts a building into apartments or develops a plot for sale and the person who sells apartments or plots are different person, both of them shall be deemed to be the promoters and shall be jointly liable as such for the functions and responsibilities specified under this Act or the rules and regulations made thereunder; RERA thus seeks to being within its net even the activities of construction and sale of flats by MHADA, which was excluded under MOFA regime. In my view, therefore there was no legislative intent to exclude private developments undertaken on MHADA land from applicability of the regulatory framework of MOFA.

108. Even if the inconsistency between the two provisions is ignored and provisions of Section 190 of MHADA Act are considered on a standalone basis, which seeks to exclude applicability of provisions of MOFA to land/building belonging to or vesting in MHADA, the purpose of such exclusion must be borne in mind. The exclusion is essentially to ensure that interests of MHADA in its land are not affected and MHADA remains better equipped to carry out its functions unhindered by any obligations under MOFA. To illustrate, if MHADA changes premium for grant of NOC for redevelopment of its old buildings, its right to charge premium based on sanctioned FSI is not hindered due to application of provisions of MOFA. In the instant case however, no right of MHADA is affected in any manner due to binding Page Nos. 75 of 170 the private developer with obligations under MOFA. Therefore, in the light of the peculiar facts of the present case, it is difficult to accept the proposition that provisions of MOFA would not apply to the project in question.

109. The sheet anchor of the Defendant-Developers in support of their contention about inapplicability of MOFA to MHADA land is the judgment of Division Bench of this Court in Shahed Kamal (supra). In case before Division Bench, the Plaintiffs/Appellant therein had sought enforcement of rights under MOFA in respect of land which belonged to Mumbai Metropolitan Region Development Authority (MMRDA). The suit plot formed part of Oshiware District Center notified by MMRDA.

MMRDA had acquired the suit plot from the original land owner with right to the original owner to develop the suit plot. Original owner assigned development rights in the suit plot in favour of a developer.

MMRDA executed a lease in favour of original owner through the developer by sanctioning FSI of 1.[5] upon payment of premium by the developer. The developer paid the premium to MMRDA and commenced construction of building. The developer entered into agreements for sale in favour of flat purchasers. An Occupancy Certificate was issued after construction of the building. The flat purchasers claimed that the developer had failed to complete obligation under Section 10 of MOFA by forming a society. In the meantime, the FSI in respect of the suit plot was increased by notification dated 18 November 2015 from 1.[5] to 3.00. The developer accordingly made an application to MMRDA for consuming additional 1.[5] FSI. The flat purchasers objected to such application, which was rejected by MMRDA stating that provisions of MOFA were not applicable to MMRDA. Accordingly, developer got plans sanctioned for Page Nos. 76 of 170 construction of additional building on the suit plot. Flat purchasers accordingly filed Suit seeking enforcement of provisions of MOFA against the developer. The learned Single Judge rejected the Notice of Motion for temporary injunction and this is how an appeal was filed before a Division Bench. The issue before the Division Bench was about applicability of provisions of MOFA to MMRDA and also to land belonging to or vesting in MMRDA. The Division Bench took note of provisions of Section 31 of MMRDA Act and Schedule II, Cause (II) thereof and held in para 29 to 29.[8] as under:-

29. We shall now consider the issue with respect to the interpretation of Section 31 read with Schedule II, Clause II of the MMRDA Act in terms and keeping in mind the object and purpose of the MMRDA Act. 29.[1] Plain Meaning of Section 31 read with Schedule II, Clause II of the MMRDA Act: “Section 31 read with Schedule II, Clause II of the MMRDA Act, reads as follows: “31 – The enactments mentioned in 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.” “ Schedule II [See Section 31] […]

II. The Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) Act, 1963 (Mah XLV of 1963). The said Act shall not apply to the Metropolitan Authority or to any land or building belonging to or vesting in that Authority.” 29.[2] From a plain reading of the aforesaid language contained in Section 31 read with Schedule II, Clause II of the MMRDA Act, it is evident that the exclusion of MOFA by MMRDA Act applies in two ways:

(i) MOFA does not apply to MMRDA;

(ii) MOFA does not apply to any land or building belonging to or vesting in MMRDA. 29.[3] From the aforesaid plain meaning it is clear that the width of the exclusion of MOFA to MMRDA Act is wide and not restrictive. 29.[4] The non-applicability of MOFA is relatable to two distinct events, namely (i) that it will not apply against MMRDA as a statutory authority meaning that rights or obligations under MOFA will not be enforceable as against MMRDA; (ii) it will also not apply to lands or buildings owned by or vesting in MMRDA. The exclusion, therefore, is disjunctive because of the word “or ” The choice of “or ” in the exclusion or ouster provision is Page Nos. 77 of 170 clearly intended to widen the scope of the exclusion and not to restrict it only to MMRDA. 29.[5] The width of the exclusion under the aforesaid provisions is also apparent from the use of word “land ” because land itself has a wide meaning. Section 2(d) of the MMRDA Act defines “land ” to “includes benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth ”. It is now well settled that “benefits to arise out of land ” also include FSI. A structure permanently fastened to the earth is also ‘land’. Therefore, the word “land ” in the aforesaid provision will have to be understood as per its wider statutory definition and applicability of MOFA is excluded not only as to land as also the benefits arising out of land, belonging to or vesting in MMRDA namely, in this case, even FSI. 29.[6] Yet another indication as to the width of the exclusion is in the choice of expressions “…or to any land or building belonging to or vesting in the Authority ”. It may be useful to refer to the meaning explained to the terms ‘vest’, ‘belong to’ or ‘belonging’ as defined in Black’s Law Dictionary relied upon by MMRDA: “vest” as “to give an immediate, fixed right of present or future enjoyment ” “belong” as “to appertain to; to be the property of. Property “belonging” to a person has two general meanings (1) ownership; … (2) less than ownership, i.e. less than an unqualified and absolute title, such as the absolute right of user.” “belonging” as “that which is connected with a principal or greater thing; an appendage, an appurtenance; also ownership.” 29.[7] From the aforesaid definitions, it is evident that the words “belonging to ” is of wider significance and less technical in its meaning. The significance in the choice of words is that the word “vesting ” has a defined legal connotation but to ensure that the ouster of MOFA is not defeated by only using the expression “vesting in the Authority ” the provision also says “belonging to… the Authority ”. The conscious exclusion of MOFA not only against MMRDA but also to the land or building belonging to or vesting in MMRDA makes it abundantly clear that the intention of the legislature was to exclude MOFA completely. To read the definition in the manner suggested by Shri Tamboly for the Appellants would be to ignore the meaning and import of all the words and phrases used in Clause 2 of Schedule II that excludes the applicability of MOFA. 29.[8] From the aforesaid analysis, we are of the view that from a plain meaning of the language contained in Section 31 read with Schedule II, Clause II, application of MOFA to MMRDA Act has been excluded as a whole i.e. not only against MMRDA but also against any land or building belonging to or vesting in MMRDA. Further, as land includes FSI, provisions of MOFA cannot be applied while dealing with any dispute in respect of FSI arising out of the land, which belongs to or vests in the MMRDA. Page Nos. 78 of 170

110. The Division Bench thereafter considered the issue of enforcement of section 7 of MOFA and held in para 35 and 35.12 as under:-

35. The claim of the Appellants as seen from paragraph 37 to 39 and 66 to 67 of the Plaint is that they have acquired rights in the Suit Plot, and the additional FSI or any FSI whatsoever in respect of Suit Plot, which may become available in future, vest in the flat purchasers. The Appellants have specifically prayed, in prayer clause (a) for a declaration that “…the entire FSI…including the future FSI … stood vested in the said flat purchasers including Plaintiffs…”. Thus, the Appellants have sought to enforce their rights under MOFA in respect of the FSI arising out of the Suit Plot, being a land which undisputedly vests in the MMRDA. The said claim of the Appellants is founded on Section 7 of MOFA. ….

35.12 For the above reasons, we hold that enforcement of Section 7 of MOFA, as sought to be invoked by the Appellants in the present case, will cause prejudice to or affect the rights of MMRDA and therefore such enforcement cannot be allowed. We accordingly answer Issue No.

(ii) framed in paragraph 14.[2] in the negative.

111. The Division Bench thereafter proceeded to decide whether it was permissible to incorporate provisions of MOFA by way of contract contrary to the provisions of MMRDA Act and held in para 36 as under:-

36. Shri. Tamboly on behalf of the Appellants has submitted that under Clause 28 of the said Agreement for Sale, the Developer has specifically agreed to be subject to the provisions of MOFA and therefore cannot now seek to renege from the same. 36.[1] In response, Shri. Sen and Shri. Jagtiani, have both submitted that once the applicability of MOFA has been excluded, the developer and flat purchasers under a private arrangement cannot apply the provisions of the MOFA inter se, as the same would affect the rights of MMRDA. 36.[2] We agree with the submissions of Shri Sen and Shri Jagtiani. Since we have already held that the applicability of MOFA as a whole is excluded against MMRDA as well as land or building belonging to or vesting in MMRDA, it cannot be made applicable by the sidewind of a contract (especially one in which MMRDA is not a party). This would undermine the statute i.e. the MMRDA Act and therefore is impermissible. The statutory provisions that exclude the applicability of MOFA, as discussed above, are not derogable provisions that can be derogated from in the Agreements for Sale. Page Nos. 79 of 170 36.[3] In addition, the Agreement for Sale executed between the Appellants and the Developer itself provides that the contract will be subject to the said Lease Deed executed between MMRDA and the Developer (acting as the Constituted Attorney of the owner). The said Lease Deed in turn provides that the terms thereof shall be subject to the MMRDA Act. Thus, the parties were at all times aware that the terms of the said Agreement for Sale are subject to the MMRDA Act and therefore excluded. Hence, even for this reason the Developer and the Appellants cannot agree to incorporate or enforce the provisions of MOFA inter se. 36.[4] Even the Agreement for Sale does not give a clear indication as to whether MOFA will apply since on the one hand Clause 28 of the Agreement for Sale provides that MOFA will be applicable to the obligations of the Developer whereas, on the other hand, Clause 13.[1] of the Agreement for Sale states that the terms thereof are subject to the Lease Deed. There is, therefore, a fundamental contradiction in the terms of the Agreement for Sale itself which indirectly acknowledges the applicability of MMRDA Act but also provides for the application of MOFA which is inconsistent with Section 31 read with Schedule II to the MMRDA Act. 36.[5] Our aforesaid view is also supported by the judgment of this Court in Bank of Baroda (supra) wherein it was held at paragraph 11 that even though the parties are bound by the terms of the agreement, still the terms of the agreement which are contrary to the provisions of law or any statutory requirements, cannot be complied with. 36.[6] For the reasons aforesaid we hold that the since the applicability of MOFA has been excluded by the MMRDA Act, the Developer and flat purchasers contract to incorporate the provisions of MOFA and even if done the same cannot bind the parties inter se.

112. The Division Bench in Shahed Kamal concluded in para 37 as under:-

37. We must note here that the Appellants have also made various submissions and relied on various judgments to contend that the Developer is constructing the said Additional Building without obtaining the informed consent of the flat purchasers. Since we have already held that the applicability of MOFA as a whole has been excluded by Section 31 read with Schedule II, Clause II of the MMRDA Act, we hold that there was no requirement for the Developer to obtain the consent of the flat purchasers before commencing the construction of Additional Building. What was necessary for the Developer was to obtain the permission from the MMRDA, which is the owner of the Suit Plot as well as the Planning Authority and the same has been done. Additional premium for exploiting the further FSI has been paid. The Developer has also developed the reservation on the Suit Plot and handed over the same to MMRDA as required as a condition for developing the Suit Plot. Page Nos. 80 of 170

113. The Special Leave Petition 8837 of 2022 filed before the Supreme Court challenging the judgment of Division Bench has been dismissed by a reasoned order dated 29 April 2025 observing that there are many complex legal issues arising in the litigation which the trial court will have to decide in accordance with law. Without disturbing the judgment of Division Bench, the suit has been directed to be decided in an expeditious manner.

114. Relying on judgment of Division Bench in Shahed Kamal (supra) it is contented on behalf of the Defendant-Developers that the issue of applicability of MOFA to land belonging to or vesting in MHADA stands concluded. On the other hand, it is contended on behalf of the Plaintiffs that the judgment in Shahed Kamal is distinguishable and has no application to the present case. Alternatively, it is submitted on behalf of the Plaintiffs is that judgment in Shahed Kamal is subsequently distinguished in Division Bench judgment in Shivajinagar Rahivasi CHS Ltd (supra).

115. Section 31 and Clause II of Schedule II of MMRDA Act have been culled out in para 29.[1] of the judgment in Shahed Kamal (supra). The wordings of Clause II of Schedule II MMRDA Act appear to be similar to Section 190 of MHADA Act as MOFA does not apply to Metropolitan Authority as well as to any land or building belonging or vesting in that authority. The Division Bench applied the principle of interpretation of plain language of Section 31 and Clause II of Schedule II of MMRDA Act. The Division Bench found that the words in Section 31 and Clause II of Schedule II of MMRDA Act are clear and unambiguous and therefore gave effect to them on the basis of their Page Nos. 81 of 170 plain meaning. If this rule of giving plain meaning to words used in statute is applied to provisions of Section 18 of MOFA, application of provisions of MOFA to land belong to or vesting in MHADA is needs to be necessarily upheld. The Division Bench in Shaheed Kamal held that giving different interpretation to provisions of Section 31 and Clause II of Schedule II of MMRDA Act would amount to adding words to the provision, which is impermissible. If this principle is also applied to Section 18 of MOFA, applying provisions of MOFA to land belonging to or vesting in MHADA would tantamount to adding words to the section 18 of MOFA. Also, the Division Bench has taken note of nonapplicability of MOFA to two distinct events of (i) MMRDA and (ii) lands or buildings owned by or vesting in MMRDA. The Division Bench further noted that choice of the word ‘or’ in exclusion or ouster provision was intended to widen the scope of exclusion and not to restrict it only to MMRDA. If these observations of the Division Bench in Shahed Kamal are applied to the provisions of Section 18 of MOFA, it is seen that the exclusion is only to one eventuality of nonapplicability of provisions of MOFA to MHADA or its Boards. There is no exclusion under Section 18 to the second eventuality of lands or buildings belonging to or vesting in MHADA/ its Boards. In my view therefore, ratio of the judgment in Shahed Kamal would not apply to the interplay between the provisions of Section 190 of MHADA Act and Section 18 of MOFA.

116. Also, the Division Bench has held in Shahed Kamal that enforcement of Section 7 of MOFA affected the rights of MMRDA, which is not the case here. In Shahed Kamal MMRDA was the planning authority which had sanctioned the additional FSI upon receipt of consideration of Rs. 3.58 crores. In the present case, MHADA is not the Page Nos. 82 of 170 planning authority nor its rights are affected in any manner if section 7 restrictions are applied to the private developer. Therefore in the facts of the present case, the objection of non-application of provisions of MOFA to the project in question cannot be upheld.

117. The judgment of the Division Bench in Shahed Kamal (supra) was cited before subsequent Division Bench in Shivajinagar Rahivasi CHS Ltd. (supra) in which the issue before the Division Bench was about exemption from payment of development charges under Section 124F of the MRTP Act in respect of any development of land or building vested in or under the control or possession of the Central or State Government or of any local authority. Section 124F of the MRTP Act provides thus:- 124F. Exemptions.— (1) No development charge shall be levied on institution of use or of change of use, or development of, any land or building vested in or under the control or possession of the Central or State Government or of any local authority. (2) Subject to such conditions as it may impose, the State Government may, by notification in the Official Gazette, exempt partially from the payment of development charge payable on the development of any land or building which is proposed for warehouse or godown or by any educational institution, medical institution or charitable institution. (3) Notwithstanding anything contained in sub-section (1) and (2), the State Government may, by notification in the Official Gazette and subject to such terms and conditions as may be specified therein, exempt partially a Special Township Project undertaken by a private developer under the Special Development Control Regulations made under the provisions of this Act, from payment of the development charges.

118. The issue before the Division Bench in Shivajinagar Rahivasi CHS Ltd. was about payment of development charges in respect of development carried out on MHADA land. It was sought to be contended on behalf of the developers that the exemption under Section Page Nos. 83 of 170 124F of the MRTP Act would apply when the development is undertaken on land belonging to MHADA. Reliance was placed on Division Bench judgment in Shahed Kamal. On the other hand, it was contended on behalf of the planning authority that such exemption is applicable only when the development in question is undertaken by MHADA itself and not when the same is undertaken by private developers on MHADA land. The Division Bench held in paragraphs 291 and 292 as under:

291. We are inclined to accept the submission made by learned counsel for the respondents that purposive interpretation is warranted to the provisions of Section 124F of the MRTP Act. The benefit of ambiguity in all taxing provisions has to be given to the assessee in case of charging provision, whereas in case of exemption, the benefit of ambiguity goes to the revenue. A perusal of the provisions of Chapter VI-A indicates that under the said provision, a fee is imposed to provide public amenities within its area and for the maintenance and improvement of the area under its jurisdiction and the same is in aid of the regulatory powers. The Development Charge allows the Authority to generates a need for resources to fund and maintain the amenities. In our view, Section 124F has to be read ejusdem generis with remaining part of Section 124F, vesting, control, possession as well as, in view of the fact that the exemption is only granted for the development undertaken by the Central or the State Government or Local Authorities and not by private parties. Otherwise, it would fail the test of intelligible differentia having a nexus to the object sought to be achieved.

292. We have perused the Development Agreement brought on record in some of the matters, which made it clear that the development of land is undertaken by the petitioners independently of any Local Authority and on its own accord on the property of the Authority. The petitioners are not appointed by the respondents as contractors and developers. The petitioners, therefore, cannot be allowed to contend that the development or redevelopment is on behalf of or for the exempted category. In our view, since the development is by a private party and not by or on behalf of the Authority, the exemption for Development Charges is not applicable. It cannot be held that the property vests in public authority only because they have title to it, when control and possession is not with the Authority.

119. Thus, while interpreting provisions of Section 124F of the MRTP Act, the Division Bench of this Court has held that the expression ‘any land or building vested in or under the control or Page Nos. 84 of 170 possession of the Central or State Government or of any local authority’ would mean grant of exemption only for development undertaken by Central or State Government or local authorities and not by private parties. Plaintiffs contend that the judgment in Shahed Kamal is distinguished in subsequent judgment of coordinate Bench in Shivajinagar Rahivasi CHS Ltd. It is also contended on behalf of Plaintiffs that similar interpretation needs to be given to the expression ‘to any land or building belonging to or vesting in such authority’ appearing in Section 190 of MHADA Act. However, whether it is necessary to interpret the above expression appearing in Section 190 of MHADA Act becomes questionable as the said expression is absent in Section 18 of MOFA. As observed above, non-inclusion of the said expression in Section 18 of MOFA will have to held as deliberate and conscious. The manner in which Section 18 of MOFA is couched provides guidance to interpretation of Section 190 of MHADA Act. This issue may require detailed consideration which can be done at the stage of final hearing of the suit. At this stage I find it difficult to accept that the land in question is MHADA land in entirety or that provisions of MOFA would not apply to the project in question.

120. In my view therefore, even if it is momentarily accepted that some part of the land in question is MHADA land, the contention raised on behalf of Defendant -Developers about non-application of provisions of MOFA to the project deserves rejection. This court infact does not appreciate the conduct of Defendant No.1 raising the plea of non-application of provision of MOFA to the project after making specific representation to the flat purchasers of Towers A and B that Agreement executed with them are governed by provisions of MOFA. This is like attracting sale of flats by representing that purchaser shall Page Nos. 85 of 170 have all MOFA protection and then wriggling out of that representation when it comes to violation of provisions of Section 7 and 7A of MOFA.

WHETHER PROVISIONS OF SECTIONS 3, 4, 7 AND 7A OF MOFA APPLY TO FREE SALE COMPONENT BUILDINGS IN A SLUM SCHEME ?

121. It is contended on behalf of Defendant Nos.[1] to 4 that it is not possible to visualise the extent of development while effecting a slum scheme and that therefore it is impossible to disclose the FSI planned to be consumed or the extent of construction that would be undertaken in agreements for sale executed with flat purchasers of free sale component buildings. This defence is raised by the developers essentially to counter the contention of Plaintiffs that the proposed construction undertaken by them is in the teeth of provisions of Sections 3, 4, 7 and 7A of MOFA. Since the Plaintiffs allege that the proposed construction in pursuance of the LOI dated 27 May 2024 and layout plan dated 24 July 2024 is contrary to the disclosure made to them in the last disclosed plan of 31 December 2009, Defendant- Developers have raised a defence that neither any disclosure is made to them nor such disclosure can be made to the flat purchasers while executing a slum scheme.

122. According to Defendant-Developers, the FSI in the slum scheme does not emanate from the land as is the case in other developments and therefore it is impossible for a developer to visualise and compute the exact FSI which would be available while executing slum scheme so as to disclose the same to the flat purchasers. It is further contended that free sale component FSI/BUA is generated in a slum scheme corresponding to the rehab area constructed by the Page Nos. 86 of 170 developer and that therefore, the exact quantum of free sale FSI/BUA can be gauged only at the time of final completion of the slum scheme. It is contended that the issue of eligibility of slum dwellers remains pending for a long time and often becomes subject matter of litigation and as the number of eligible slum dwellers increase, the developer becomes liable to construct rehab tenements to accommodate the increased number of slum dwellers and in return receives incentive of additional free sale FSI/BUA. It is also contended that since free sale FSI/BUA is dependent on construction of rehab area, any increase in the size of rehab tenement also changes the free sale FSI/BUA made available to the developer. This is how, according to Defendant- Developers, it is impossible to visualise and compute the exact free sale FSI/BUA that would be available for construction of free sale building in which flats are sold to purchasers by executing agreements for sale. It is therefore contended that the obligations under Sections 3, 4, 7, 7A of MOFA are impossible of being fulfilled by a developer undertaking a slum scheme. Provisions of Section 15A of the Slum Act are also highlighted for the purpose of demonstrating conscious departure from MOFA in the matter of conveyance of land in a slum scheme.

123. The contention raised on behalf of Defendant-Developers that the FSI/BUA in a slum scheme does not arise from land appears to be correct. Rehabilitation of slum dwellers is separately dealt with in DCR, 1991 and DCPR, 2034. Appendix-IV of DCR, 1991 contains provisions of redevelopment of slums. Under Clause-1 of Appendix-IV, hutment dwellers in the slums or in the pavement are entitled to be given free of cost, a residential tenement having the prescribed carpet area in exchange of their structures. All eligible hutment dwellers taking part in Slum Rehabilitation Scheme are required to be rehabilitated according Page Nos. 87 of 170 to the provisions in Appendix-IV. Unlike a private development, where rights are created in favour of a developer in the land (often referred to as ‘development rights’, including right to sell flats), no right is created in favour of the developer who is appointed by SRA to execute the Slum Scheme. The slum dwellers, who are not owners of land, are permitted to form a co-operative society and choose a developer for execution of the slum scheme. The developer so chosen by society of slum dwellers is appointed by the SRA for execution of a slum scheme by issuance of Letter of Intent in its favour. The developer so chosen by slum dwellers and appointed by SRA does not secure any right in the land in respect of which his appointment is made. His task is to construct rehab tenements for rehabilitation of the eligible slum dwellers. To compensate the expenditure incurred by the developer in constructing rehab tenements for eligible slum dwellers, an incentive is provided to him in the form of free sale component FSI. Clause-3.[3] of Appendix-IV deals with ratio in which free sale component FSI can be granted to the developer based on rehab area constructed by him. Under Clause-3.[3] of Appendix-IV of DCR 1991, in the island city for every 10 sq.mtrs BUA of rehab area, additional 7.[5] sq.mtr BUA of free sale component was permissible. The ratio in suburbs was 10 sq.mtrs free sale area for every 10 sq.mtrs of rehab area. In areas such as Dharavi, even higher free sale component area was admissible. Thus FSI in a slum scheme does not emanate from the land and depends of number of eligible slum dwellers. Therefore it is not necessary to discuss the ratio of judgments in HDIL, Priya Constructions or Yash Developers (supra) cited on behalf of the developers in support of their contention of FSI in slum scheme not arising from land.. Page Nos. 88 of 170

124. Thus, in a slum scheme, there is no static FSI emanating from the land. The free sale component made available to the developer depends on the area of rehab component he constructs. Higher the number of rehab tenements, higher free sale component BUA is granted to the developer.

125. The size of rehab tenements is also statutorily regulated by DCR/DCPR. Initially, Clause 1.[1] of Appendix-IV of Regulation 33(10) of DCR, 1991 provided for minimum carpet area of 225 sq.ft. in respect of rehab tenements. This minimum tenement size has gone up from time to time. By Notifications dated 16 April 2008 and 20 June 2012, the size of rehab tenements was increased to 269 sq.ft. Under Regulation

1.1. of DCPR 2034, the size of rehab tenements has further been increased to 300 sq.ft. Since free sale component BUA is dependent on the total area of rehab tenements, increase in the size of rehab tenements also increases the quantum of sale component area made available to the developer as he is required to incur additional expenditure for construction of larger sized tenements.

126. There is yet another factor which also affects the free sale component BUA arising out of slum scheme. Under Clause 3.12 of Appendix-IV of DCR 1991, the minimum density of rehab component on a plot was prescribed as 500 tenements per hectare. This has been increased by Notification dated 1 October 2016 to 650 tenements per hectare. On account of increase in the minimum density of rehab tenements, the total FSI while implementing Slum Scheme (rehab + sale component) has also gone up to 4.00. Page Nos. 89 of 170

127. A developer appointed to implement a slum scheme is under obligation to rehabilitate every eligible slum dweller. Thus, number of eligible slum dwellers on a plot also plays an important role in determining the liability of developer to construct rehab tenements and his entitlement to receive free sale component in return. Many times, determination of eligibility of slum dwellers is a contentious issue. There are remedies provided for in the Slum Act of filing Appeals before the Deputy Collector, Grievance Redressal Committee, Apex Grievance Redressal Committee etc. against the decision of ineligibility while certifying Annexure-II. It therefore requires some time for determination of eligibility of all claimants in a slum scheme and many times, the number of eligible slum dwellers keep on increasing with passage of each day during currency of the slum scheme. The moment the person who is earlier ineligible, is declared eligible, the developer becomes liable to construct rehab tenement for him and in return receives higher BUA in sale component building.

128. The cut-off dates for eligibility have also undergone change from time to time. Under Regulation 33(10) of DCR, 1991, only slum dwellers whose names appeared in electoral roll prepared with reference to 1 January 1995 or a date prior thereto were eligible for rehabilitation. This date came to be extended to 1 January 2000. Now by Notification dated 16 May 2018, the cut-off date for eligibility is further extended to 1 January 2011. Thus, number of eligible slum dwellers for rehabilitation has also undergone change with passage of time.

129. Clauses 2.[5] and 2.[6] of Appendix-IV of DCR 1991 provided for simultaneous construction of rehab and sale component buildings with a caveat that building permission needs to be granted first to Page Nos. 90 of 170 rehabilitation component and thereafter to free sale component. The building permission for 10% BUA for both components can be given simultaneously and thereafter proportionately as decided by the CEO, SRA. Since the developer commences construction of free sale component building almost simultaneously, it is contended that the developer cannot disclose the exact development potential of the project to the flat purchasers while executing the Agreement for Sale as the BUA of sale component keeps fluctuating during implementation of slum scheme.

130. The contention raised on behalf of the Defendant- Developers about practical difficulties in making disclosure of development potential in a slum scheme to flat purchasers at the time of execution of agreements for sale may look attractive in the first blush, but the same is misconceived. The practical difficulties put up by the Defendant-Developers for disclosing development potential of slum scheme cannot be a reason for the Developer to escape the liabilities arising out of MOFA. The first and foremost reason for holding so is absence of any provision either in MOFA or in Slum Act about inapplicability of provisions of MOFA to a Slum Scheme. If legislature intended not to apply provisions of MOFA to slum schemes, a specific provision to that effect would have been made in both the enactments or at least in one of them. As observed earlier, specific provisions are made in other enactments for non-applicability of provisions of MOFA such as MHADA Act, MMRDA Act etc. So far as MHADA is concerned, there are specific provisions both under Section 190 of MHADA Act as well as Section 18 of MOFA for exclusion of applicability of MOFA to MHADA and to its Boards. Thus, wherever Legislature has intended to exclude applicability of provisions of MOFA, it has specifically Page Nos. 91 of 170 provided so. Therefore, exclusion of provisions of MOFA cannot be inferred in relation to slum schemes in absence of an express exclusion provision. Secondly there are actually no practical difficulties for developer undertaking a slum scheme to make necessary disclosures to flat purchasers of sale component building. This is discussed in greater detail in later part of judgment.

131. Since developer appointed by SRA to execute slum scheme constructs a block or a building of flats for the purpose of selling some or one of them to other persons, he fits into the definition of the term ‘Promoter’ in Section 2(c) of MOFA. However, it is not that the developer so appointed by SRA would become Promoter so far as rehab tenement buildings are concerned. This is because for becoming a promoter within the meaning of Section 2(c) of MOFA, a person/entity must construct as well as sell the flats. Since no sale of rehab tenement occurs to slum dwellers, the developer undertaking slum scheme may not fit into the definition of the term ‘Promoter’ so far as rehab buildings are concerned. However, in respect of sale component buildings, the flats therein are constructed for the purpose of sale and the developer appointed to execute slum scheme actually sells them. He would therefore fit into the definition of the term ‘Promoter’ under section 2(c) of MOFA and the activity of construction and sale of free sale component flats would be governed by the provisions of MOFA. Therefore, the contention of non-applicability of provisions of MOFA to slum scheme deserves outright rejection. Provisions of MOFA do apply to the activity of construction and sale of free sale component flats even in a slum scheme and therefore the relationship between the developer appointed by SRA to execute slum scheme and flat purchaser Page Nos. 92 of 170 with whom he executes agreement of sale of free sale component flat would be governed by provisions of MOFA.

WHETHER SLUM ACT HAS PRIMACY OVER MOFA

132. Faced with the difficulty of absence of express provision either in MOFA or in the Slum Act providing for non-applicability of provisions of MOFA, it is contended on behalf of the Defendant- Developers that the Slum Act has primacy over MOFA and that therefore developer’s obligation to rehabilitate the slum dwellers would take precedence over his obligations towards flat purchasers of sale component buildings. It is contended that when a development is under a slum scheme, the provisions of Slum Act with all its incidents arising therefrom become applicable and must be considered and given full effect to. It is contended that rehabilitation of slum dwellers being the main objective of implementation of slum scheme, the same will be allowed to be fully implemented without any fetters. The developers contend that if an initial LOI indicating free sale component BUA is treated as a disclosure made to the flat purchasers under Sections 3 or 4 of MOFA for the purpose of binding the developer in accordance with provisions of Sections 7 or 7A, there would be a fetter on the developer to accommodate eligible slum dwellers or to offer increased rehab tenement area or to provide for rehab tenements as per minimum statutory requirements. It is suggested that with increase in the eligibility of slum dwellers, change in the size of rehab tenements, increase in density or extension of cut-off date etc, the developer becomes liable to construct more number/increased size of rehab tenements and receives in return higher BUA for sale component by way of issuance of revised LOI from time to time. It is therefore contended that if a developer is Page Nos. 93 of 170 tied to the disclosure of BUA for free sale component building as per initial LOI, he would not be able to fulfill obligation to rehabilitate the slum dwellers in accordance with revised LOI. This is how the argument of Slum Act having supremacy over MOFA is sought to be pitched.

133. The sheet anchor of Defendant-Developers in support of contention of primacy of Slum Act over MOFA is Section 15A of Slum Act. As observed earlier, Section 11 of MOFA imposes a statutory obligation on a promoter to convey his right, title and interest in the land and the building in favour of collective body of flat purchasers either within the agreed time limit or in absence of such agreement within the prescribed time limit. Rule 9 of MOFA Rules provides for statutory time limit of four months from the date of formation of cooperative society, company or association of apartments. Thus, provisions of Section 11 of MOFA read with Rule 9 of MOFA Rules make it mandatory for the developer to transfer and convey his right, title and interest in the land and building within four months of formation of society/company/condominium.

134. The two statutory requirements under Section 11 of MOFA of conveyance of promoter’s right, title and interest and period for conveyance, however do not apply in relation to slum scheme and the subject matter of vesting of land under the slum rehabilitation scheme is dealt with by provisions of Section 15A of the Slum Act, which provides thus:- Page Nos. 94 of 170 15A. Vesting of land under Slum Rehabilitation Scheme.— (1) Notwithstanding anything anything contained in this Act or any other law or regulation for the time being in force, relating to transfer of land and property of the State Government or any public authority of State Government, constituted under any law enacted by the State Legislature, on completion of the Slum Rehabilitation Scheme implemented on the plot of land belonging to the State Government or such public authority, as the case may be, duly sanctioned by the Slum Rehabilitation Authority, within thirty days from the completion of rehabilitation component of the Slum Rehabilitation Scheme, the State Government or or the Chief Executive Officer, with the prior approval of State Government may, declare by notification in the Official Gazette, that such land so declared as the Slum Rehabilitation Area shall vest in Slum Rehabilitation Authority: Provided that, where the Slum Rehabilitation Scheme is implemented by any public authority of of State Government, constituted under any law enacted by the State Legislature or urban local body or planning authority or Government Undertaking Agency or any other Government Company, as the case may be, in joint venture with the Slum Rehabilitation Authority, within thirty days from the date of issuance of Letter of Intent (LOI) to such Slum Rehabilitation Scheme, the State Government or the Chief Executive Officer with the prior approval of State Government may, declare by notification in the Official Gazette, that such land so declared as the Slum Rehabilitation Area shall vest in Slum Rehabilitation Authority: Provided further that, such notification shall be published only after the Slum Rehabilitation Authority has paid compensation to the concerned public authority, urban local body or planning authority, as the case may be, admissible for the land acquisition under section 17. (2) The State Government, or urban local body or planning authority or any public authority of the State Government established under any law enacted by the State Legislature in respect of the Slum Rehabilitation Scheme under sub-section (1), shall be entitled to receive from the Slum Rehabilitation Authority, a compensation as determined under section 17. (3) The Slum Rehabilitation Authority shall recover the amount of compensation paid by it under sub-section (2), from the developer of the Slum Rehabilitation Area or from the person in whose favour it executes the lease of such land. (4) The Slum Rehabilitation Authority, subject to such terms and conditions as it may consider expedient for securing the purposes of this Act, shall lease that part of the land on which rehabilitation component of the Slum Rehabilitation Scheme has been constructed, to the Co-operative Society of the slum dwellers on thirty years lease at such annual lease rent as may be prescribed from time to time, and such lease shall be renewable for a further period of thirty years on the same terms and conditions. (5) The Slum Rehabilitation Authority, subject to such terms and conditions as it may consider expedient for securing the purposes of this Act, shall lease that part of land on which free sale component of the Slum Rehabilitation Scheme shall be constructed, or is being constructed, to the Developer of such Scheme or to the Organisation or Association or Company or Co-operative Society formed by the purchasers of such free sale area on thirty years’ lease at such annual lease rent as may be prescribed from time to time, and such lease shall be renewable for a further period of thirty years on the same terms and conditions. Page Nos. 95 of 170

135. Thus, under Section 15A of the Slum Act, the land on which Slum Rehabilitation Scheme is undertaken vests in SRA upon completion of the Scheme and a Notification to that effect is required to be issued by the State Government / CEO of SRA within 30 days of the completion of the Scheme. The SRA thereafter grants lease of part of the land on which rehab component is constructed to the cooperative society of slum dwellers for tenure of 30 years and the part of land on which free sale component building is constructed is to be leased to the society/association of flat purchasers for a period of 30 years.

136. In a slum scheme, a developer is in the nature of licensee appointed by the SRA for rehabilitation of slum dwellers. As observed above, the developer does not have any right, title or interest in the land on which slum scheme is implemented. Therefore, there is no question of any right in the land being transferred or conveyed by developer implementing slum scheme to society or association of flat purchasers. On account of this peculiar position, a separate provision is required to be made regarding conveyance of title in respect of land on which slum scheme is implemented, which is made in the form of Section 15A of the Slum Act. Under Section 15A, the land first vests in the SRA upon completion of scheme and thereafter separate leases thereof are to be granted in favour of rehab component societies and free sale component societies. Section 15A thus provides for automatic vesting of land in SRA with statutory duty on SRA to execute leases in favour of the two societies.

137. I do not see any conflict between provisions of Section 11 of MOFA and Section 15A of the Slum Act. A separate and distinct Page Nos. 96 of 170 provision for conveyance of land on which slum scheme is implemented is required to be made in the Slum Act in the form of Section 15A as the developer cannot convey anything to societies of rehab component and sale component as he himself does not own any land. Since conveyance of land under Section 11 of MOFA is not possible on account of absence of any right, title or interest of promoter in the land, the conveyance is separately provided for under Section 15A of the Slum Act. The objective behind Section11 of MOFA and Section15A of the Slum Act appear to be common i.e., to handover rights in the land in favour of collective body of unit purchasers. Section 15A also ultimately ensures that rehab component society and sale component society ultimately secure right in the land on which their respective buildings are constructed. In future if rehab or sale component buildings are required to be demolished and reconstructed, their respective societies have the necessary rights in the land for undertaking reconstruction of buildings after securing necessary permissions from SRA. This exactly is an objective under Section11 of MOFA as well which seeks to create a right in favour of collective body of flat purchasers to undertake redevelopment of building without any fetter from the promoter after securing conveyance.

138. Since there is no conflict between provisions of Section11 of MOFA and Section15A of Slum Act, there is no question of one enactment having supremacy over the other. The provisions, on the other hand, can be harmoniously interpreted so as to protect the interest of flat purchasers in sale component buildings and of erstwhile slum dwellers in rehab component buildings. Flat purchasers in sale component buildings can exercise all rights under MOFA relating to the three activities of construction, sale and management. The fourth Page Nos. 97 of 170 activity of transfer of land is provided for by Section 15A of the Slum Act.

139. It is also contended on behalf of the developers that Section 15A begins with non obstante clause ‘notwithstanding anything contained in this Act or any other law or regulation for time being in force’ and that therefore, provisions of Slum Act must prevail over MOFA. As observed above, the non obstante clause in Section 15A of Slum Act is necessary on account of absence of any right or title in the land of the developer appointed to implement the slum scheme. Therefore, a special provision is made under Section 15A of Slum Act so as not to leave a vacuum in the area of transfer of right, title and interest in the land on which slum scheme is implemented.

140. No doubt, Slum Act is also a beneficial legislation aimed at clearance of slums, improvement of urban areas and rehabilitation of slum dwellers. However, MOFA is equally beneficial piece of legislation governing much larger populace indulging in the activity of purchase of flats. The two legislations operate in their respective fields, and both can harmoniously co-exist. To my mind, there is nothing in MOFA, which seeks to put any fetter on developer implementing slum scheme in an effective manner. The argument of disclosure requirement under Sections 3, 4, 7 and 7A of MOFA restricting implementation of slum scheme in an effective manner is wholly without any basis deserving outright rejection. Even if a developer implementing slum scheme is imposed with the burden of constructing additional rehab tenements or larger sized rehab tenements, any disclosure made to the flat purchasers in respect of free sale component buildings would not come in his way of constructing additional rehab tenements as the disclosure so made is Page Nos. 98 of 170 restricted only to sale component buildings. In fact, Section15A of Slum Act envisages grant of separate leases of land to rehab societies and free sale societies indicating that the one does not have any relationship with another. Mere availability of additional BUA in free sale component on account of increase in number of eligible slum dwellers cannot be a ground for violating disclosure made to free sale component flat purchasers on the pretext of putting a fetter on construction of rehab tenements. This aspect has been dealt with in greater details in the latter part of the judgment. I therefore do not see any conflict between the two legislations for the purpose of inferring supremacy of one over another.

141. The argument of Slum Act serving larger public interest of rehabilitation of slum dwellers as compared to MOFA dealing with limited class of persons in support of contention of supremacy is again misconceived. The very assumption on the part of Defendant-developers that MOFA deals with limited class of persons is itself erroneous. In a metropolitan city like Mumbai as well as considering large urbanisation in the State like Maharashtra, where over 50% population lives in urban areas, it cannot be contended by any stretch of imagination that MOFA is beneficial only to limited class of persons. It applies to each and every activity of construction and sale of flats as compared to limited application of Slum Act where the land is declared as slum area. However, it is not necessary to consider the concept of supremacy of one Act over the other as there is no inconsistency between the two enactments and both can simultaneously co-exist. As observed above, except the activity of transfer of right and title in the land, all other activities of construction, sale and management of flats and buildings in sale component of slum scheme can be governed by MOFA without any inconsistency. The developer can be made liable to execute agreement Page Nos. 99 of 170 before acceptance of advance payment when he sells flats in sale component building of slum scheme. If he is relieved of that obligation under Section 4 of MOFA, by accepting erroneous argument of the developers, such flat purchasers would be exploited by accepting payments without any need for execution and registration of agreement for sale. The developer undertaking slum scheme can also be made liable to disclose nature of his right to sell flats, encumbrance on project, plans and specifications of buildings, nature of fixtures/fittings/amenities, material to be used in construction, the date of possession etc. as mandated under Section 3 of MOFA. I do not see any difficulty in fastening these liabilities arising out of MOFA on developer undertaking a slum scheme. Therefore, there is no inconsistency between the provisions of Slum Act and MOFA. Mere difference in manner of transfer of right in the land in slum scheme as compared to other private development by virtue of difference in mechanism under Section 11 of MOFA and Section 15A of Slum Act cannot be a reason enough to infer any inconsistency between the two legislations. The reason for such difference has already been dealt with in the preceding paragraphs. Therefore, the two enactments can co-exist without causing any violence to one another.

142. It is also sought to be suggested by Defendant-developers that Slum Act is a latter legislation and therefore provisions thereof, to the extent of inconsistency, must prevail over earlier legislation of MOFA. As observed above, there is no inconsistency between the provisions of MOFA and Slum Act and therefore the contention of latter legislation prevailing over the former need not be considered. Therefore, reliance by developers on judgment of the Apex Court in Vodafone Idea Cellular Ltd. (supra) is misplaced. Page Nos. 100 of 170

143. Therefore, the contention on behalf of the Defendant Developers about supremacy of Slum Act over MOFA, conveniently raised for the purpose of escaping the liabilities arising out of MOFA, is clearly misconceived and deserves rejection.

EVEN IF MOFA APPLIES, WHETHER DISCLOSURE OBLIGATION UNDER MOFA CAN BE RELAXED IN RELATION TO SLUM SCHEME?

144. It is alternatively sought to be suggested on behalf of the defendant-developers that all rigors of MOFA, particularly those under Sections 7 and 7A, cannot apply to a developer undertaking slum scheme. This submission again is premised on the alleged practical difficulties in disclosing the exact construction potential to the flat purchasers and the need to provide necessary flexibility to the developer undertaking slum scheme for the purpose of fulfilling the primary objective of rehabilitation of slum dwellers.

145. The broad statutory scheme relating to disclosure requirement under Sections 3 and 4 of MOFA read with Rule 5 of MOFA Rules has already been discussed above. According to the Defendant-developers, it is impossible to disclose to the flat purchaser the FSI available for development as FSI does not flow out of land and the BUA sanctionable is also uncertain. That it is also impossible to disclose the exact plans and specifications of the building(s) which are likely to fluctuate on account of changes effected in the slum scheme due to issuance of revised LOI from time to time. Page Nos. 101 of 170

146. I am unable to agree with the contention that it is impossible for a developer undertaking slum scheme to disclose either the FSI or development potentiality or plans and specifications to the flat purchasers of sale component building. When a slum scheme is sanctioned and a developer is appointed, SRA issues LOI, which contains full particulars of the FSI sanctioned, total BUA for whole scheme with bifurcation thereof into rehab and sale component, etc. In the present case also, such details were indicated in the initial LOI dated 3 September 2005, copy whereof is appended to flat purchase agreements. Defendant No.1 had also appended the plans and specifications of sale component building to the flat purchasers. It therefore cannot be contended that the development potentiality of the plot can never be disclosed to the flat purchasers.

147. Coming to the aspect of fluctuations in the FSI and development potential, it must be observed that the present case is a unique one where there is large scale fluctuation in development potential (reasons for which are discussed in latter part of the judgment). Otherwise ordinarily, even in relation to a slum scheme, there need not be large scale fluctuations in the development potential of sale component building(s). So far as possible fluctuations on account of eligibility of slum dwellers is concerned, the situation is now taken care of by Notification dated 1 October 2016, which mandates that developer undertaking slum scheme must take into account all slum dwellers (irrespective of their eligibility) and construct rehab tenements accordingly. Thus, the FSI for total development and particularly the BUA sanctioned for sale component now corresponds to the total number of slum structures surveyed irrespective of eligibility of individual slum dwellers. In the event lesser number of slum dwellers are Page Nos. 102 of 170 found eligible as compared to total number of rehab tenements constructed, the balance tenements are to be treated as PAP tenements/ affordable housing / rental housing/ staff quarters, etc. Thus, after 2016, there is greater degree of certainty about development potential of a slum scheme. Even in cases prior to 2016, eligibility disputes of few slum dwellers could not be cited as a pretext for not disclosing the development potential of sale component building(s). In extreme situations where eligibility dispute takes unreasonably long time for decision, arrangements could be made for offering PAP tenements to the subsequently declared eligible slum dwellers, if all rehab tenements of the scheme are exhausted. If the development potential of a scheme is exhausted and a slum dweller is subsequently declared eligible, his accommodation in some other PAP tenement does not create any further incentive for the developer to carry out additional construction in the sale component building. So far as increase in size of rehab tenements is concerned, the same did not affect the schemes in which actual construction work had already started, thereby having no effect on the disclosed development potential. Notification dated 14 May 2008 increasing the size of rehab tenements from 225 sq. ft. to 269 sq. ft. specifically excluded completed schemes and ongoing schemes. The extension of cutoff date for eligibility also need not affect the disclosed development potential as slum dwellers who subsequently acquire eligibility due to extension of cut-off date can be accommodated in other PAP tenements. It thus appears that disclosure of development potential in respect of sale component buildings is not an impossibility. The argument of lack of clarity and certainty in respect of development potential under a slum scheme raised by Defendant-Developers therefore cannot be accepted as an abstract proposition. Page Nos. 103 of 170

148. The Defendant-Developers have relied upon judgment of Division Bench of this Court in Manratna Developers (supra) in support of their contention of impossibility of securing consent of flat purchasers under Sections 7 and 7A of the MOFA in relation to development carried out in phased manner. However, the judgment does not deal with execution of a slum scheme. The Division Bench in Manratna Developers has decided an appeal against an ad-interim order passed by the learned Single Judge restraining the Appellants therein from carrying out construction in accordance with modified sanctioned plans. The developer therein had undertaken development of large plot of land comprising inter alia vacant plot together with various dilapidated old structures occupied by tenants in a phased manner. In the facts of that case where further construction was undertaken after vacation of premises by tenants, the Division Bench has made following observations in para 12 of the judgment:-

12. Taking over all view of the matter whats surfaces is that the defendants have constructed only one wing of a building which is very small portion even according to the original sanctioned plan. Rest of the property could not be developed though was intended to be developed in phased manner, as according to the appellants, the premises were not vacated by the tenants. However, after a portion of the plot was vacated by the tenants residing in the dilapidated structures, it became feasible for the defendants to develop the property upto its permissible full potential and thus modified plans in accordance with the building bye-laws were submitted to the Corporation. The local authority, on being satisfied that the defendants were not constructing anything in excess of what is permissible according to the potential of the property, sanctioned the modified plan and after approval of the modified plans, the appellant was proceeding to carry out the construction which was objected to by the flat purchasers of erstwhile lower arm of Building “A”. The amenities in the form of recreation ground are, in no way, reduced. The consent of the flat purchasers after amendment of section 7 and insertion of section 7A is not necessary if additional structures/buildings are to be raised after obtaining approvals or sanction from the’ Municipal Corporation. The balance of convenience lies in favour of the defendants, as restraining them from carrying out the proposed construction which has been sanctioned by the Municipal Corporation, Page Nos. 104 of 170 would cause undue hardships and inconvenience and lock the property for years. We are also of the view that the agreements entered into with the flat purchasers clearly postulate the development of the property in phased manner, according to the sanctioned plans or modified plans sanctioned in due course of time. Thus, prima facie, the appellants/defendants appear to have complied with the requirement of true and full disclosure as envisaged by Clauses 3 and 4. There could not have been disclosure in regard to TDR, as the very concept of TDR was not prevailing when the agreement was entered into in the year 1988 and had been introduced by the Development Control Rules in the year 1991. Hence, the appellants/defendants can not be blamed on that count.

149. By relying on judgment in Manratna Developers it is contended on behalf of the contesting Defendants that something which did not exist or not known cannot be disclosed. In Manratna Developers the concept of TDR was not prevalent when flat purchase agreements were executed in 1988 and was introduced subsequently in DCR 1991. In my view, the judgment in Manratna Developers, rendered in the facts of that case, cannot be relied upon in support of an abstract proposition that in every case where an unknown development potential becomes subsequently available, the developer gets relieved of obligations under Sections 3, 4, 7, 7A of MOFA. In any case, the judgment cannot be relied upon in support of contention that in every slum scheme, unknown FSI becoming available to a developer would become a reason for escaping the liabilities under Sections 7 and 7A of MOFA.

150. Thus, there are no practical difficulties in disclosure of development potential to flat purchasers of sale component building in a slum scheme. Even otherwise, even if there is any practical difficulty in facts of a particular case, the same cannot be a reason for excluding all rigors of MOFA to sale component building when neither MOFA nor Slum Act postulates exclusion of disclosure required to Slum Scheme. Page Nos. 105 of 170

151. Therefore, the contention of absence of liability for a developer undertaking slum scheme to disclose development potential of sale component building or plans and specifications thereof under Sections 3, 4, 7 and 7A of MOFA is accordingly rejected.

DEVELOPER RESPONSIBLE FOR CREATION OF SITUATION OF INCREASE IN FSI AND TAKING BENEFIT OF ITS OWN WRONG

152. The present case involves massive increase in FSI and BUA sanctioned by SRA from time to time. Initially, FSI of only 2.227 was sanctioned by SRA vide LOI dated 3 September 2005. After clubbing Wadala Scheme with Tardeo Scheme, Defendant No.1 secured benefit of additional FSI of 2.996 vide LOI dated 10 December 2009. Then, Defendant No.1 has taken benefit of Notification dated 1 October 2016 and DCPR, 2034 and has secured FSI of 4.21 vide LOI dated 27 May

2024. On account of increase in the FSI from time to time, the total BUA, rehab component as well as sale component have also changed from time to time as is clear from the following chart:- LOI FSI Total BUA sanctioned Rehab component Sale component 3.9.2005 2.227 1,21,070.54 61,251.94 59,818 10.12.2009 2.996 1,58,858.72 70,855.21 88,003.51 27.5.2024 4.21 2,26,490.39 62,328.40 1,91,625.60 (1,29,436.22 Slum BUA + 27,463.61 Fungible BUA)

153. The implementation of slum scheme apparently started more than 25 years ago, with issuance of initial LOI dated 14 January 1999. Thus, by now more than 26 years have passed since initiation of the Page Nos. 106 of 170 slum scheme and the same is still incomplete. So far as slum dwellers of Tardeo Scheme are concerned, the same are apparently long since rehabilitated. Construction of all rehab buildings of Tardeo Scheme is apparently complete. From the status of construction placed on record at page-56 of compilation filed on behalf of Defendant No.1, it appears that Occupancy Certificates of some of the rehab buildings were issued 24 years back on 28 June 2001. What has happened in the present case is that main objective of clearance of slum at Tardeo is long since complete. Defendant No.1 has taken the benefit of clubbing Wadala Scheme with Tardeo Scheme and has been constructing more and more PAP tenements with a view to secure higher sale component BUA to be constructed and sold at Tardeo. Defendant No.1 has taken the benefit of sanction of increased density of slums/rehab tenements for the purpose of construction of higher number of PAP tenements. The Regulations now permit construction of requisite number of tenements depending on plot size irrespective of the actual slum dwellers, who need to be rehabilitated. Construction of higher number of rehab tenements results in availability of larger housing stock which then can be used for accommodating project affected persons or for implementation of schemes of low-cost housing, rental housing or such tenements can also be used as staff quarters. By keeping slum scheme pending forever and by clubbing the same with Wadala Scheme, Defendant No.1 has been milking the higher BUA sanctioned from time to time on account of permissibility to build higher number of PAP tenements. For constructing higher number of PAP tenements, Defendant No.1 secures higher sale component area. It has taken benefit of clubbing of the two schemes by transferring PAP tenements meant to be constructed at Tardeo to Wadala. The last LOI dated 27 May 2024 would indicate that Defendant No.1 was supposed to construct 1040 PAP tenements in Page Nos. 107 of 170 combined schemes, out of which 1013 PAP tenements are transferred by it at Wadala and would be constructing only 27 PAP tenements at Tardeo. However, for constructing only additional 27 PAP tenements at Tardeo, Defendant No.1 has secured a bonanza of free sale component BUA of 1,91,625.60 sq.mtrs at Tardeo by transferring sale component BUA of 34,735.77 sq.mtrs from Wadala to Tardeo and also securing the benefit of fungible FSI of 27,463.61. This is not to suggest any illegality or irregularity in sanction of increased sale component BUA in the scheme. The new norms permit construction of increased number of tenants per hectare of land and this might benefit the Government in rehabilitating PAP’s or in offering low cost/rental housing in otherwise expensive city of Mumbai. The question however is whether the developers can be permitted to add construction contrary to the disclosures made to flat purchasers of Tower A and B merely because the changed norms permit sanction of increased sale component BUA?

154. Thus, the act of keeping the slum scheme pending for over 25 years has largely benefited the Defendant No.1. Even if the initial LOIs of 14 January 1999 and 3 September 2005 are ignored and the clubbed LOI dated 10 December 2009 is taken into consideration (which is the last disclosed plan as per plaintiffs also), Defendant No.1 was supposed to construct sale component building with BUA of only 88,003.51 sq.mtrs, out of which it has already consumed sale component BUA of 49,421.84 sq.mtrs for construction of Towers-A and B. It has further constructed the building ‘Imperial Edge’ with sale component BUA of 7145.40 sq.mtrs and was left with sale component BUA of only 31,436.24 sq.mtrs. However, by keeping the slum scheme pending forever, Defendant No.1 is now seeking to construct buildings and structures by using total sale component BUA of 1,91,625.60 sq.mtrs. Page Nos. 108 of 170 Thus, as against the sale component BUA of 88,003.51 sq.mtrs sanctioned in 2009, Defendant No.1 is now armed with two and half times higher BUA of 1,91,625.60 sq.mtrs.

155. The above constant increase in the BUA for Defendant No.1 is on account of its own wrong of keeping the slum scheme pending forever. Defendant No.1 is now citing the pretext of continuous fluctuations in the FSI and sanctioned BUA for escaping from the obligations under MOFA by taking a specious defence that it is impossible to make any disclosure with regard to development potentiality in a slum scheme. Thus, the defence of Defendant No.1 about inapplicability of rigors of provisions of Sections 3, 4, 7 and 7A of MOFA stems out of its own wrong in milking higher FSI and sale component BUA by keeping the slum scheme pending for over 25 years. Otherwise, it is easily possible for developers undertaking slum schemes to disclose the development potential at least qua the sale component buildings to the flat purchasers. I am therefore not inclined to accept the pretext of fluctuating FSI and BUA in the present scheme cited by Defendant No.1 for escaping the obligations arising out of MOFA.

FRUSTRATION OF MOFA OBJECTIVES BY NON-APPLICATION OF ALL ITS RIGORS TO SLUM SCHEMES

156. As per the 2011 census figures, over 40% of population of Mumbai reportedly resided in slums. The slum schemes are envisaged with the objective of clearing the slums and improving the lives of slum dwellers by providing them basic necessary housing facilities. Construction of sale component flats in a slum scheme is permitted for incentivizing the appointed developer to construct rehab tenements free Page Nos. 109 of 170 of cost. On account of implementation of slum schemes over large part of lands in Mumbai City, substantial portion of housing stock for sale thereof to the citizens also gets unlocked through slum schemes. Thus, large number of flat purchasers in City of Mumbai do purchase flats in sale component buildings of slum schemes. As observed above, MOFA regulates four activities of construction, sale, management and transfer in relation to the flats and building. MOFA is intended to be applied to every project of the promoter who undertakes to construct and sale flats, unless there is express exclusion like projects developed by MHADA or its Boards or MMRDA, etc. The Legislature has not expressly or even by implication, excluded applicability of provisions of MOFA to sale component buildings under slum schemes. It is not the legislative intent to exclude a large scale activity of construction and sale of flats in slum schemes from MOFA, where over 40% of Mumbai’s population resides/used to reside in slums. On the contrary, by not expressly excluding applicability of MOFA to slum scheme projects, it appears to be the intention of Legislature to govern the activity of construction and sale of flats in sale component buildings of slum schemes.

157. Considering the scale of activity of construction of sale component buildings under sum schemes, if applicability of MOFA or of any provisions thereof is excluded to slum scheme projects, the same would exclude substantial portion of construction activity from being regulated by provisions of MOFA. It definitely is not the legislative intent to let developers undertaking slum schemes off the hook of MOFA. Therefore, mere possible fluctuations in the rehab or sale component BUA in a slum scheme cannot be a reason to exclude applicability of provisions of Sections 3, 4, 7 and 7A of MOFA. If the contention of Defendant Nos.[1] to 4 is accepted, large chunk of projects Page Nos. 110 of 170 in Mumbai City would stand excluded from applicability of provisions of MOFA, which definitely is not the legislative intent.

158. In fact, present one is a classic case representing the chaos that would result out of acceptance of argument of Defendant Nos.[1] to 4 about non-applicability of provisions of Sections 3, 4, 7 and 7A of MOFA to slum scheme projects. If developers implementing slum scheme projects are relieved of the obligation to make disclosures about development potentiality of sale component buildings and plans and specifications etc., such developers would be at liberty to make additions and alterations as per their whims and caprices thereby seriously affecting the otherwise recognised rights of flat purchasers under MOFA. Defendant Nos.[1] to 4 have proposed construction of 10 additional flats in Tower A and B buildings under a specious plea of non-applicability of all rigors of MOFA to slum scheme projects. This is what would happen if applicability of provisions of Sections 7 and 7A is excluded to slum scheme where the developers would add floor and flats in completed buildings.

159. It is therefore necessary to balance the rights of flat purchasers of sale component buildings with rights flowing in favour of developer while implementing a slum scheme. Though, a developer must be permitted to construct sale component flats/units and to sell the same, which is the only source of revenue for him to recoup the expenditure incurred for construction of rehab tenements, at the same time, this right of developer to exploit full permissible and available development potential of sale component BUA must be somewhere balanced with the rights of flat purchasers with whom he has executed the agreements for sale. After 2016, since developers implementing slum Page Nos. 111 of 170 schemes are permitted to construct rehab tenements by taking into consideration all slum dwellers, irrespective of their eligibility and since minimum density of rehab tenements is prescribed per hectare of land, ordinarily there cannot be any fluctuation in the scheme as the developers are now under obligation to construct maximum possible rehab tenements which also result in corresponding sale component BUA for them. However, in a case like present one where the scheme is pending for years together resulting in increased entitlement of sale component area with passage of each day, the entitlement of the developer to construct higher sale component BUA needs to be balanced with the right of the flat purchasers to whom flats are sold with disclosures about development potentiality of plot. Mere availability of higher sale component area on account of non-completion of slum scheme for several years, cannot be a ground to encroach upon the rights of the flat purchasers flowing through Sections 3, 4, 7 and 7A of MOFA.

160. Even otherwise, I do not see any reason why a home buyer purchasing a flat in sale component building of a slum scheme needs to be put on different pedestal than his counterpart purchasing flat in a non-slum scheme. It is not that the sale component buildings in slum schemes are in any manner inferior to other non-slum projects. Several upmarket projects in Mumbai City have been constructed through slum schemes. In fact, the flats in ‘The Imperial’ project are one of the most expensive real estate purchases in India made by the members of the Condominium. Apart from the two elevational crowns on Towers-A and B, the building ‘The Imperial’ also wore the crown of being the tallest building in India for several years in the past. The flat purchasers of the building are thus many of the elite members of the society. They were Page Nos. 112 of 170 sold flats by referring to the provisions of MOFA by Defendant No.1. The question is whether Defendant No.1, while selling the apartments in the plush towers A and B, informed the purchasers that they are purchasing inferior quality of real estate which would not BE governed by provisions of MOFA? Whether the flat purchasers were made aware that by purchasing flats in the project ‘The Imperial’ they would be denuded of rights and entitlements under MOFA which other flat purchasers are entitled to enjoy in the neighbouring non-slum developments? The answers to the questions appear to be in the negative. On the contrary, Defendant No.1 specifically represented the flat purchasers that the transaction would be governed by MOFA. However, when it came to binding the Defendant No.1 by disclosures made to the flat purchasers, it has taken a rather dishonest stand that MOFA either does not apply in entirety to the project or in any case, the rigors of disclosure of development potentiality flowing out of sections 3, 4, 7 and 7A do not apply to the project.

161. Considering the position that the flat purchasers of sale component buildings under slum schemes cannot be classified as a different class than other home buyers in non-slum scheme buildings, in my view, it is necessary to apply all provisions of MOFA (except Section

11) to sale component buildings of slum scheme with a view to protect the rights of flat purchasers therein.

DISCLOSURE MADE TO FLAT PURCHASERS OF TOWERS ‘A’ AND ‘B’

162. As observed above, contrary to the contention now raised of impossibility to make disclosure of development potential and plans and Page Nos. 113 of 170 specifications to flat purchasers of sale component buildings by developer undertaking slum scheme, Defendant No.1 did make the necessary disclosures to the flat purchasers of Towers ‘A’ and ‘B’ of the building ‘The Imperial’. Also contrary to the stand now taken that the provisions of MOFA do not apply to the project in question, recital X of the Agreement for Sale did refer to provisions of MOFA, which reads thus:- X) The Flat Purchaser/s has/have inspected the site and seen the said Saleable Residential Buildings under construction and has/have taken inspection of all the documents specified under the Maharashtra Flat Ownership (Regulation of The Promotion of Construction, Sale Management And Transfer) Act, 1963 (hereinafter referred to MOFA) as Rules framed there under and has/have been satisfied with the same;

163. Thus, as stated in recital X of Agreement for Sale, the Defendant No.1 provided inspection of the necessary documents to the flat purchasers as required under Section 3 of MOFA. Additionally, the necessary documents as required under Section 4 of MOFA are also appended to the Agreement for Sale. Defendant No.1 appended copy of LOI dated 3 September 2005 which indicated the total developmental potential of the entire plot admeasuring 54,365.85 sq.mtrs (the larger property). The sale component BUA permissible in situ was indicated in the LOI and disclosed to the flat purchasers as 59,818.60 sq.mtrs. The FSI proposed to be consumed was also indicated at 2.227. Defendant No.1 also appended to the agreement for sale copy of commencement certificate as validated upto 27 July 2007.

164. The Agreements for Sale made a disclosure to the flat purchasers of Towers ‘A’ and ‘B’ that Defendant No. 1 had undertaken construction of only two saleable residential building of 60 storey each Page Nos. 114 of 170 on portion of larger property and that a third building would also come up adjacent to the two saleable residential buildings. A tentative layout of three buildings was also appended to Annexure A and A-1 to the Agreement for Sale. Recitals II, III and V of the agreements read thus:- II) The Developers/Promoters are presently constructing buildings on a portion of the Larger Property for rehabilitation of slumdwellers (hereinafter referred to as “Rehab Buildings”) and buildings for free sale in the open market (hereinafter referred to as “Saleable Residential Buildings”) in another portion under the said scheme in the present phase to the said Project to be followed by additional construction; III) The Developers/Promoters have, at present, obtained sanction from the Slum Rehabilitation Authority (“SRA”) for construction of two Saleable Residential Buildings of 60 storeys each (comprising of ground plus 11 levels plus 49 levels) on a portion of the Larger Property, as more particularly described in the Second Schedule hereunder written (hereinafter referred to as the “said Property”) and are proposing to construct, subject to further sanction of the SRA, a third building on the said Property adjacent to the Saleable Residential Buildings, tentative present layouts of which are annexed hereto as Annexure “A” and Annexure “A-1” respectively. It is expressly clarified, agreed and confirmed that the said layouts are subject to changes from time to time as may be permitted by the authorities, depending upon the further changes in the nature and extent of additional constrcution which may be permitted; V) The building plans in respect of the two Saleable Residential Buildings presently being constructed are approved by SRA under Intimation of Approval (“IOA”) bearing No. SRA/ENG/581/D/GL/AP dated 28th August, 2002 and the commencement Certificate bearing No. SRA/ENG/581/D/GL/AP dated 6th September 2002, the validity whereof is extended as from time to time, by the SRA, a copy whereof is hereto annexed and marked as Annexure “C”. Building plans for the Third Saleable Building are yet to be finalised and submitted for approval;

165. Furthermore, clause 9(a) of Agreement for Sale also made a disclosure about third high rise building coming up on the said property, which reads thus: 9.(a) The Developers/Promoters propose to construct, subject to prior sanction of the SRA a third high rise building on the said Property as may be approved by the SRA and other authorities, adjacent to “the Page Nos. 115 of 170 Imperial”, a tentative layout of which is annexed and marked as

166. Shortly after execution of Agreements for Sale, which contained a covenant for clubbing of the slum scheme with another scheme under clause 7, Defendant No.1 clubbed Scheme No.1 at Tardeo (The Imperial Scheme) with Scheme No.2 at Wadala and SRA issued revised LOI dated 10 December 2009 by sanctioning higher FSI of 2.996 and increased sale component area to 88,003.51 sq.mtrs. Based on the revised LOI dated 10 December 2009, Defendant No.1 secured sanction for revised layout plan on 31 December 2009, which also happened to be the part occupancy certificate for Towers ‘A’ and ‘B’. Thus, the occupancy certificate in respect of Towers ‘A’ and ‘B’ was sanctioned by SRA while simultaneously amending the layout plan based on revised LOI dated 10 December 2009. Faced with this situation, the Plaintiffs have fairly accepted the revised layout plan/ OC plan dated 31 December 2009 as ‘the last disclosed sanctioned plan’. In this regard it would be apposite to reproduce the pleadings in para 3.[8] of the Plaint as under: 3.[8] Even on a perusal of the Layout Plan dated 31st December 2009, sanctioned by SRA, it is evident that the land situated at C.S. Nos. 725 (pt) and 1/725 (pt) was shown to comprise Tower 1 and Tower 2, each having 10 Podium Floors + 1 Entrance Floor + 49 Floors, and a space earmarked for a third tower. The Plaintiffs state that their vested rights, including those of other similarly situated flat purchasers, crystallised on the basis of the development as represented in the said sanctioned layout of 2009, and the entire consideration was paid and flats purchased based on this configuration. The Layout Plan dated 31st December 2009 is hereinafter refereed to as ‘the last disclosed sanctioned plan’. A copy of the said Layout Plan dated 31st 2009 is annexed at EXHIBIT ‘C’ hereto.

167. Thus, for the purpose of deciding Plaintiffs’ entitlement for temporary injunction, the disclosure made in 2009 plan will have to be Page Nos. 116 of 170 taken into consideration ignoring the earlier disclosure made vide LOI dated 3 September 2005 appended to the Agreements for Sale.

168. In the OC-cum-revised layout plan dated 31 December 2009, Defendant No.1 continued the disclosure of proposed construction of Tower ‘C’ by indicating the location thereof in the layout. It also indicated the details of construction of rehab buildings in the larger property. The total BUA sanctioned as per revised layout plan dated 31 December 2009 was 1,58,858.72 sq.mtrs, out of which area admeasuring 54,116.33 sq.mtrs was shown to have been consumed for construction of rehab buildings and area of 49,421.87 was shown to have been consumed for construction of Towers ‘A’ and ‘B’. Thus, out of total sanctioned BUA 1,58,858.72, area of only 1,03,538.20 was consumed leaving the balance sanctioned BUA of 55,320.67 sq.mtrs. unconsumed.

169. Plaintiffs thus do not dispute the position that the last disclosed sanctioned plan of 2009 disclosed construction of 3 saleable towers and balance sanctioned BUA of 55,320.67 remaining unconsumed. They however contend that this entire BUA of 55,320.67 sq.mtrs was not for construction of the third sale tower. According to Plaintiffs, the revised LOI dated 10 December 2009 had sanctioned sale component area of only 88003.51 sq.mtrs. out of which BUA of 49,421.87 sq.mtrs was consumed in construction of Towers ‘A” and ‘B’ thereby leaving only BUA of 38,581.64 sq.mtrs for construction of the third saleable Tower. Page Nos. 117 of 170

170. It also appears that Defendant No.1 had secured fire NOCs for carrying out construction in the ‘said property’. In the NOC issued by the Chief Fire Officer of MCGM on 28 June 2000, it was stated that Towers-1 and 3 (which are Towers-A and B) would comprise of stilt plus 44 floors and that Tower-2 (which is Tower-C) would consist of stilt + 56 floors with height of 264.80 mtrs. Similarly, CFO’s letter dated 12 April 2002 had also indicated the height of all the three buildings. On 28 march 2005, Airport Authority of India had issued NOC for construction of 3 wings with height upto 246.98 meters. Clause-(X) of MOFA Agreement indicates that the flat purchasers had taken inspection of all the documents. Thus, the flat purchasers of Towers-A and B were aware not only of construction of Tower C but also about its approximate floors and height.

171. Also, while issuing the full OC in respect of Towers A and B on 16 October 2014, Tower C building was disclosed in the layout comprising of 57 floors with height of 292 meters.

172. Thus, proposed construction of Tower-C was clearly disclosed to the flat-purchasers of Towers A and B. WHAT EXACTLY IS ‘SAID PROPERTY’ DESCRIBED IN AGREEMENTS FOR SALE

173. Faced with the difficulty that proposed construction of Tower-C was disclosed to them, Plaintiffs have contended that the building ‘Imperial Edge’ is the third saleable tower disclosed to the flat purchasers in the Agreements for Sale and that therefore no further construction, especially in the form of Towers ‘C’ and ‘C1’, can be Page Nos. 118 of 170 undertaken by the Defendant-Developers. While the issue as to whether the building ‘Imperial Edge’ is the third saleable tower or not is being discussed separately, the answer to the said issue also lies in the enquiry into the description of the ‘said property’ in the Agreements for Sale executed with purchasers of flats in Towers ‘A’ and ‘B’.

174. As observed above, the entire land on which slum scheme is being implemented admeasuring 54,360 sq.mtrs forming part of CS Nos.725 (pt) and 1/725(pt) of Malbar and Cumbala Hill Division is described as ‘larger property’ in first Schedule to the Agreement. Recital II, which is reproduced above, states that Defendant No.1 was constructing buildings ‘on a portion of the larger property’ for rehabilitation of slum dwellers and buildings for free sale in the open market ‘in another portion’ under the said scheme. Similarly, recital III to the Agreement further clarified that two saleable residential buildings were being constructed ‘on a portion of the larger property’ which has been more particularly described in the second schedule and which is referred to as the ‘said property’.

175. According to Defendant-Developers, land admeasuring 19,944 sq.mtrs on which construction three sale towers as disclosed in Agreement for Sale is undertaken, is the ‘said property’. For the purpose of convenience, Defendant Nos.[1] to 4 has indicated ‘said property’ within the ‘larger property’ in green shade in the map produced alongwith their compilation of documents. It would be apposite to reproduce the said convenience map below:- Page Nos. 119 of 170

176. Plaintiffs seriously dispute the above map as the green shading was not indicated in the map attached to the MOFA agreements. It is contended on Plaintiffs’ behalf that the said property in second schedule is unidentifiable. It would therefore be necessary to reproduce description of the ‘larger property’ and the ‘said property’ appearing in first and second schedule to the Agreements for Sale respectively:-

THE FIRST

SCHEDULE ABOVE REFERRED TO: (Description of the Larger Property) All that piece or parcel of land or ground bearing C. S. Nos. 725 (pt) and 1/725 (pt) of Malabar and Cumballa Hill Division admeasuring in the aggregate 54,360 sq. mtrs. or thereabouts together with structures standing thereon consisting of an amalgamation of three Slum Rehabilitation Schemes viz., Nav Maharashtra Nagar Sahakari Griha Nirman Sanstha Limited, New Jaiphalwadi Co-operative Housing Society Limited and Page Nos. 120 of 170 Janata Hill Co-operative Housing Society Limited, situate at Tardeo, Mumbai and bounded as follows:- On or towards the North: C.S. No. 3/725(pt) On or towards the South: Police Staff Quarters On or towards the East: C.S. No. 2/730, 3/730 and 728 On or towards the West: Cumballa Hill, C.S. Nos. 3A/723 and 9/722

THE SECOND

SCHEDULE ABOVE REFERRED TO: (Description of the Said Property) All that piece or parcel of land or ground bearing C.S. Nos. 725 (pt) and 1/725(pt) of Malabar and Cumballa Hill Division being a portion of the Larger Property on which the two towers (known as “The Imperial”) under the free sale component are being constructed by S.D. Corporation Private Limited.

177. It appears that the first Defendant developer appended to the Agreements for Sale at Annexure ‘A’ and ‘A1’, ‘tentative present layouts’ of the three saleable Towers being constructed on the ‘said property’ which clearly indicated the location at which the three Towers were to come up. In the copy of Agreement for Sale produced alongwith the Plaint copies of Annexure ‘A’ and ‘A1’ are not very clear. Alongwith their compilation Defendant Nos.[1] to 4 have produced colour copies of Annexure ‘A’ and ‘A1’.

178. From the ‘tentative present layouts’ at Annexure ‘A’ and ‘A1’ appended to the Agreements for Sale, the demarcation of portion of ‘larger property’ for construction of buildings for rehabilitation of slum dwellers and portion for construction of saleable residential building is clearly visible. Thus, the flat purchasers of Towers ‘A’ and ‘B’ were clearly informed about the exact portion of land on which three saleable Towers were to come up. In that view of the matter, I am inclined to prima facie accept the contention of Defendant Nos.[1] to 4 that the green Page Nos. 121 of 170 shaded portion in the map reproduced above is the ‘said property’ described under the Agreements for Sale.

179. Identification of the ‘said property’ in the Agreements for Sale was necessary as the agreements are restricted only to the ‘said property’ and the flat purchasers had absolutely no concern with the balance portion of the ‘larger property’, on which buildings for rehabilitation of slum dwellers have been constructed. In fact, there is a six-meter-wide internal road separating the portion of ‘larger property’ on which rehab buildings are constructed and the ‘said property’. Identification of the exact ‘said property’ is also necessary for the purpose of examining the contention of Plaintiffs about violation of disclosures made to them. The disclosures made to the flat purchasers of Towers ‘A’ and ‘B’ is thus restricted only to the ‘said property’ which is now identified. Plaintiffs would have no concern with the activities carried out by Defendant -Developers in balance portion of the ‘larger property’. It would otherwise be absurd to expect full and complete disclosure of the manner in which slum rehabilitation buildings were to be constructed by the first Defendant developer to the flat purchasers of Towers ‘A’ and ‘B’. It would also be too ambitious on their part to control and regulate construction activities of rehab buildings located on balance portion of the said property. This is a reason why Mr. Samdani has rightly not stretched the case of the Plaintiffs to the extent of alleging violation of disclosures in relation to construction of rehab tenements.

180. Having identified the exact location of the ‘said property’ within the ‘larger property’ I now proceed to examine whether the Page Nos. 122 of 170 ‘Imperial Edge’ can be treated as the third saleable Tower disclosed to flat purchasers of Towers ‘A’ and ‘B’. WHETHER ‘IMPERIAL EDGE’ IS THE THIRD SALEABLE TOWER?

181. In the last disclosed sanctioned plan dated 31 December 2009, the first Defendant-Developer had proposed to construct in the North Eastern portion of the plot ‘Rehab Building No.1 Wing-A’ of G+ 16 floors. It appears that the same position continued while getting sanctioned revised plan dated 16 October 2014. However, what Defendant No.1 has actually constructed at that place are two buildings, which are described in OC plan dated 20 October 2020 as ‘(REHAB) composite building No.1 (Wing A)’ of G+19 floors and ‘(SALE) composite building No.1 (Wing B)’ of G +49 floors. This Wing B composite sale building of G+49 floors is the ‘Imperial Edge’.

182. According to Plaintiffs, since the building ‘Imperial Edge’ comprising of G + 49 floors, is a sale component building, it is the third saleable tower contemplated under the disclosure made to the purchasers of flats in Towers ‘A’ and ‘B’. Plaintiffs do not dispute that the building ‘Imperial Edge’ is not located at the tentative location indicated in Annexure ‘A’ and ‘A1’ plans appended to Agreements for Sale. They do admit that the building ‘Imperial Edge’ has been constructed at a place where only rehab buildings were supposed to be constructed. However, since only three saleable towers were contemplated in the disclosure made to the flat purchasers, Plaintiffs contend that the building ‘Imperial Edge’ must necessarily be treated as the third saleable tower and that therefore Defendant – Developers are Page Nos. 123 of 170 required to be restrained from constructing proposed towers ‘C’ and ‘C1’ at the originally disclosed place as they would actually constitute fourth and fifth saleable towers, construction of which was never disclosed to them. On the other hand, it is the contention of Defendant Nos. 1 to 4 that Tower C, with Wings 1 and 2, is the third residential saleable tower as was disclosed.

183. I am unable to accept the contention of Plaintiffs that the ‘Imperial Edge’ can be treated as the third saleable tower. In the earlier part of the judgment, an enquiry has been conducted about the exact location of the ‘said property’ within the ‘larger property’ and as observed earlier, outcome of the said enquiry would decide whether the building ‘Imperial Edge’ is the third saleable tower or not. After locating the ‘said property’ within the ‘larger property’ it is clear that the building ‘Imperial Edge’ has been constructed outside the ‘said property’. As observed above, flat purchasers of Towers ‘A’ and ‘B’ were entitled to disclosure as per Sections 3 and 4 of MOFA only in respect of extent of development within the ‘said property’. They were not required to be disclosed the extent and potentiality of the development in the entire ‘larger property’. They have absolutely no concern with the rest of the ‘larger property’ where rehab buildings were to be constructed. Defendant No.1 has constructed the building ‘Imperial Edge’ at a place where rehab buildings were to be constructed and not in any part of the ‘said property’. Construction of the building the ‘Imperial Edge’ by Defendant No.1 would therefore not violate any of the disclosures made to the flat purchasers of Towers ‘A’ and ‘B’ of building ‘The Imperial’.

184. Therefore, the building ‘Imperial Edge’ cannot be treated as the third saleable tower within the meaning of disclosure made to the Page Nos. 124 of 170 flat purchasers in the Agreements for Sale. Tower ‘C’ disclosed in the Agreements for Sale to be constructed within the ‘said property’ is yet to be constructed and in my view, Defendant Nos.[1] to 4 cannot be restrained from constructing Tower ‘C’ within the ‘said property’. The issue however is about the extent to which construction of Tower ‘C’ can be undertaken by Defendant Nos.[1] to 4. Before determining the extent to which construction of Tower ‘C’ can now be undertaken by the Defendant Nos. 1 to 4, it would first be necessary to deal with Plaintiffs’ contention of vesting of balance unutilized FSI in the Condominium. PLAINTIFFS’ CONTENTION OF VESTING OF BALANCE SANCTIONED SALE COMPONENT FSI

185. Plaintiffs have contended that the balance sanctioned sale component FSI remaining unutilised after construction of Towers-A and B and the building ‘Imperial Edge’ would vest in the condominium. However, I am unable to concede to the said submission. As observed above, FSI in a slum scheme does not flow out of land. Usually, the principle of vesting of additional FSI generated through change in FSI norms/policies is applied in relation to right of a co-operative society to have conveyance of the land. The principle ensures that delay in conveyance of land and building to the society does not result in the developer taking benefit of sanction of increased FSI on account of change in FSI norms/policies. In a slum scheme however, conveyance of land cannot be undertaken unless the whole scheme is complete. Unlike private development, where a society, construction of whose building is complete, can seek conveyance of proportionate land during Page Nos. 125 of 170 pendency of layout development, such proportionate conveyance of land cannot be sought in a slum scheme on account of peculiar provisions of Section 15A of the Slum Act, under which lease of land is contemplated only after completion of the slum scheme. Since developer undertaking slum scheme does not own any right in the land, he cannot be compelled to convey proportionate land either under section 11(3) and (4) of MOFA or by filing a suit. The scheme of Section 15A of the Slum Act envisages vesting of the land in the name of SRA after completion of the scheme and thereafter SRA granting separate leases in favour of societies of slum dwellers and sale component buildings. Also, the additional sale component area is sanctioned to the developer on account of fulfillment of obligation to construct additional rehab tenements. The developer recoups the expenditure incurred for construction of additional rehab tenements by sale of additional sale component area. It would be absurd to vest ownership in such additional sale component area in favour of collective body of flat purchasers. Therefore, the principle of vesting of balance unutilised FSI or additional FSI flowing out of change in norms cannot be made applicable in a slum scheme.

186. Turning back to the issue of extent of construction of Tower ‘C’, I first proceed to examine the combined effect of clubbing of two slum schemes, sanction of increased density vide Notification of 2016 and coming into effect of DCPR-2034 on the sanctioned sale component BUA. Page Nos. 126 of 170 THE BONANZA OF MASSIVE BUA NOW AVAILABLE WITH DEVELOPERS

187. As observed above, Defendant No.1 has clubbed scheme No.1 at Tardeo (Imperial Scheme) with Scheme No.2 at Wadala. Such clubbing was permitted under Clause 7 of Agreement for Sale and is otherwise permissible under Clause 7.[8] of Appendix IV of DCR 1991, which provides thus: 7.[8] In case of two or more number of slums taken up for development by same owner/developer/ NGO/Co-operative Society of the Slum dwellers, both Rehab and Free Sale Components of the said slums can be combined and located in any proportion in those plots provided in any plot, the FSI does not exceed 2.[5] subject to the condition that the said slums have the same ratio of Rehab component to Free Sale Component as laid down in the Clause 3.[3] to 3.[5] of this Appendix.

188. Plaintiffs have not contemporaneously objected to clubbing of two schemes, which has resulted in issuance of LOI dated 10 December 2009 and layout plan dated 31 December 2009. In fact, the part OC of Towers ‘A’ and ‘B’ flow out of the revised layout plan dated 31 December 2009, which appears to be the reason why Plaintiffs have not challenged clubbing of the two schemes and have instead accepted the changes effected to the original scheme vide LOI dated 10 December 2009 and revised layout plan dated 31 December 2009.

189. Clubbing of the two schemes also entitles the Developer to shift rehab and sale component areas from one scheme to the another. Since Tardeo is more affluent area of Mumbai city than Wadala, the Defendant No.1 opted to shift rehab component buildable at Tardeo to Wadala Scheme and has correspondingly brought sale component Page Nos. 127 of 170 buildable at Wadala to Tardeo Imperial scheme. Clubbing of the two schemes has thus largely benefited Defendant No.1, who had shifted sale component BUA of 16001.84 sq.mtrs. from Wadala to Tardeo. This is how the total buildable sale component at Tardeo scheme rose to 88,003.51 sq.mtrs. Defendant No.1 consumed area of 7145.40 sq.mtrs. from sanctioned free component area for construction of the building ‘Imperial Edge’. Sale component of 49421.87 sq.mtrs was already consumed for construction of Towers ‘A’ and ‘B’. This left sale component of about 31,436.24 sq.mtrs. for construction of Tower ‘C’ within the ‘said property’.

190. However, what is now done by Defendant No.1 is to secure a revised LOI dated 27 May 2024 under which benefit of increased FSI of

4.00 is granted on account of increase in minimum density of tenement to 650 per Hectare vide notification dated 1 October 2016. Defendant No.1 took benefit of increased minimum rehab tenement density vide Notification dated 1 October 2016 in respect of both the schemes at Tardeo and Wadala. Under LOI dated 10 December 2009, Defendant No.1 was to construct only 97 PAP tenements at Tardeo and 338 PAP tenements at Wadala. On account of Notification dated 1 October 2016, Defendant No.1 received sanction for construction of 1040 PAP tenements at Tardeo, which resulted in corresponding additional sale component area for Tardeo Scheme. However, instead of constructing 1040 PAP tenements at Tardeo, Defendant No.1 has shifted 1013 PAP tenements at Wadala Scheme and he would construct only 27 tenements at Tardeo Scheme. Page Nos. 128 of 170

191. Thus, on account of clubbing of the two schemes, Defendant No.1 has secured further bonanza in the year 2024 on account of increase in the minimum density of tenements to 650 per Hectare. By shifting the liability to construct PAP tenements from Tardeo to Wadala and by shifting sale component area from Wadala to Tardeo, Defendant No.1 has secured massive sale component BUA of 1,91,625.60 sq.mtrs. at Tardeo Scheme.

192. If Defendant No.1 was to construct Tower ‘C’ at the relevant time in 2009, it would have come up with BUA of 38,581.64 sq.mtrs., which was left over from sanctioned sale component area of 88,003.51 sq.mtrs. after consuming area of 49,421.87 sq.mtrs for Towers ‘A’ and ‘B’. As observed above, Defendant No.1 has utilised sale component area of 7145.40 for construction of the building ‘Imperial Edge’ and whether it can recoup the said lost sale component area by carrying out construction outside the said property is being discussed in the latter part of the judgment. For the moment, I consider the balance buildable area for Tower ‘C’ as per 2009 plan at 38,581.64 sq.mtrs.

193. As against construction of Tower ‘C’ with BUA of 38,581.64 sq.mtrs, Defendant No.1 is now armed with massive sale component BUA of 1,35,058.33 sq. mtrs. (total 191625.60, less BUA used for Towers A & B of 49421.87 and 7145.40 for Imperial Edge) which is about four times the area with which Tower ‘C’ could have been constructed in 2009. This bonanza is secured by Defendant No.1 on three counts of (i) increase in tenement density by 2016 Notification (ii) swapping of additional buildable PAP from Tardeo to Wadala with the sale component area from Wadala to Tardeo and (iii) sanction of Page Nos. 129 of 170 fungible and other FSI under DCPR 2034. The total FSI now sanctioned is 4.21.

194. In the light of the above position, the next issue that arises for consideration is whether Defendant Nos.[1] to 4 can be permitted to undertake further construction in the ‘said property’ or even in the ‘larger property’ by utilizing the balance available sale component BUA of about 1,35,058.33 sq. mtrs?

PROPOSAL FOR CONSTRUCTION OF ADDITIONAL FLATS AND OTHER AREAS IN TOWERS A & B.

195. As observed above, Defendant Nos.[1] to 4 are now armed with copious quantum of sale component BUA of 1,91,625.60 sq.mtrs. The sale component BUA now made available to the Defendant - Developers is so massive that they are apparently finding it difficult to load the same in entirety in Tower ‘C’, even after dividing it into two wings of ‘C’ and ‘C1’. The Developers have accordingly proposed a construction of a new building named ‘Town House’ comprising of 9 floors. Since the sanctioned BUA would have still remained unconsumed, Defendant Nos.[1] to 4 have now decided to construct additional residential flats within Towers ‘A’ and ‘B’. They want to construct 10 additional residential flats on 16th, 23rd, 31st, 38th and 45th floors in both Towers ‘A’ and ‘B’ of ‘The Imperial’. According to Plaintiffs, construction of those 10 flats are in refugee areas of Towers A and B. They also want to extend the penthouses in Towers A and B by one more level. It appears that the massive sale component BUA of 1,91,625.60 sq.mtrs. would still remain unconsumed, which is why Defendant Nos.[1] to 4 have decided to construct within the podium Page Nos. 130 of 170 levels 1 to 11 of Towers A and B several constructions by feeding FSI thereto. They also want to construct one shop at level 1. They also want to extend and convert the current Club House area by feeding the same with available FSI. This is clear from the Supplemental Declaration unilaterally executed and registered by Defendant No.1 on 30 April 2025, relevant portion of which reads thus: New additions to the definition of the said Property (from what was earlier defined in the said Declaration): (e) 10 (ten) new apartments sanctioned by SRA, and being constructed by the Grantor Nos. 2, 3 and 4 on the 16th, 23rd, 31st, 38th and 45th floors (equivalent to floor nos. F-5, F-12, F-20, F-27 and F-34 as per the Latest Revised IOA) of both wings 'A' and 'B' of The Imperial, (shown on the IOA plans ref. no. SRA/ENG/581/D/GL & MHL & ML/AP dated 24.07.2024 approved by SRA annexed hereto as "Annexure H"); (f) Podium levels of Imperial defined as LVL-1 to 11 (shown on the plan approved by the SRA as P9a to P[1] and shown on site as LVL -1 to

11) consisting of one basement (LVL -1), a drop-off lobby (LVL 0) and 9 podiums for parking, services, driveways, ramps, stilt, temporary site offices, The Imperial Club and other spaces spread across multiple levels, double height level 10 and a service floor at Level 11 and as detailed in the table and plans annexed hereto as "Annexure F"; (g) One (1) shop at Level '-1' as sanctioned by SRA vide the Latest Revised IOA and shown on the plans annexed hereto as "Annexure H". (h) Wing D townhouse as sanctioned by SRA vide the Latest Revised IOA, and as shown on the plan annexed hereto as "Annexure H".

196. There can be no modicum of doubt that the proposed additions to Towers A and B buildings would be straightaway hit by provisions of Section 7(1)(ii) of MOFA. They would undoubtedly amount to additions to the structure of the building within the meaning of Section 7(1)(ii) of MOFA.

197. The acts of Defendant-Developers are thus so brazen that, in addition to construction of additional structures in the larger property, Page Nos. 131 of 170 they want to construct additional flats in existing Towers A and B buildings, which received part OC on 31 December 2009 and full OC on 16 October 2014. Section 7 of MOFA is aimed at curbing this kind of mischief by the promoters. Here, additional flats are proposed to be constructed in the building, which is being occupied by flat purchasers for 16 long years. This Court would have been justified in coming down heavily upon Defendant Nos. 1 to 4 for their brazen proposal of effecting further construction within the existing Tower A and B buildings, in podium or any other part thereof. However, a statement is made on behalf of Defendant Nos.[1] to 4 by Mr. Kadam, on instructions, that no changes in Towers ‘A’ and ‘B’ buildings shall be made without seeking prior written consent of the condominium. Thus, as of now Defendant Nos.[1] to 4 are not proposing to carry out any construction or make any changes to existing Tower ‘A’ and ‘B’ buildings. If the statement was not made, the Court would have otherwise restrained the Defendant Nos. 1 to 4 from making any additions or alterations to Tower A and B Buildings and to its podium levels (except to the extent of joining the podium of Tower C).

198. At the same time, since additional flats would come up in the project ‘The Imperial’ in the form of construction of Tower C in the said property, if the developers are desirous of augmenting any common amenities within the podium levels, they can approach the flat purchasers of Tower A and B for their consent and if such augmentation of amenities benefit all the flat purchasers, I do not see any reason why Plaintiffs or flat purchasers of Towers A or B would object to such augmentation. However unilateral act of making additions to the existing building is something which would be frowned upon by the court. Page Nos. 132 of 170

199. This leaves the issue of construction of Towers ‘C’ and ‘C1’ and building ‘Town House (wing D)’. I proceed to decide the extent to which Towers ‘C’ and ‘C-1’ and ‘Town House’ building can be constructed.

PROPOSED BUILDINGS TOWER ‘C’ (WINGS C & C-1) AND ‘TOWN HOUSE’

200. In the revised sanctioned layout dated 24 July 2024, Defendant Nos. 1 to 4 have proposed construction of disclosed Tower C by dividing the same into two wings of ‘C’ and ‘C-1’. The description of proposed C Wing shown in the copy of the sanctioned layout plan, produced with Compilation, is slightly unclear. Tower C appears to have been described as ‘Wing C’ with base floor, 12 podium floors, 1 entrance floor, 3 floors of AME/RECR, 1 service floor and 44 floors. Wing ‘C-1’ is shown to have base floor, 13 podium floors, 1 entrance floor, 3 floors of AME/RECR, 1 service floor and 01 floor. Height of Towers C and C-1 is shown as 212.30 meters.

201. Additionally, Defendant Nos. 1 to 4 have also proposed construction of additional structure named ‘Town House’ (Wing D), which appears to be a relatively smaller structure of Ground plus 9 floors. The layout plan of 24 July 2024 depicting various constructions already put up and proposed in the larger property copied below for ease of reference: Page Nos. 133 of 170

202. Thus, proposed construction of the Tower C (Wings C and C-1) appears to be at the disclosed location. Construction of proposed building ‘Town House’ (Wing D) was admittedly not disclosed to the flat purchasers of Towers A and B. It’s a new building or structure introduced by the developers for the first time. Town House building is apparently proposed to be constructed on portion of property indicated as ‘Green Hill Slope’.

203. However, if location of proposed building ‘Town House’ is seen on green shaded map reproduced above, it is seen that its location is outside the description of the ‘said property’. Since Town House building would be constructed outside the boundaries of the ‘said property’ and it would be outside the scope of disclosure made to the flat purchasers of Towers A and B. As observed above, Plaintiffs cannot Page Nos. 134 of 170 seek to regulate construction on portion of land, which did not form part of MOFA Agreements executed with them. Since Town House building is being constructed outside the ‘said property’ I do not find any difficulty in permitting construction of the same.

204. However, Mr. Samdani has alternatively submitted that even if Town House building is held to be outside the ‘said property’, its construction still violates provisions of Section 7 of MOFA. Plaintiffs submit that Defendant Nos.[1] to 4 are joining Town Hall building to the podium of Towers-A and B and that therefore the same would become part of building of the Condominium. As of now, it is not clear as to whether the Town House building would be attached to ‘The Imperial’ building or its podium. From the layout plan, it does appear that the building ‘Town House’ is touching the podium of Tower A and B. Therefore, in the event, Defendant Nos.[1] to 4 are proposing to attach ‘Town House’ building to the podium of ‘The Imperial’ building, such action would be hit by the provisions of Section 7 (1)(ii) of MOFA. The act of attaching ‘Town House’ building to any part of ‘The Imperial’ building or to its podium would constitute an addition to the structure of the building within the meaning of Section 7(1)(ii) of MOFA. Therefore, while there can be no restraint on Defendant Nos.[1] to 4 constructing ‘Town House’ building outside the ‘said property’, such building cannot be attached in any manner to ‘The Imperial’ building.

EXTENT TO WHICH TOWER C CAN BE CONSTRUCTED

205. Now that the issues relating to additional constructions within Towers A and B and construction of ‘Town House’ building are resolved, what remains to be dealt with is the issue of extent of Page Nos. 135 of 170 construction of the third saleable Tower within the ‘said property’ which is now proposed as Wings-C and C-1 by Defendant Nos.[1] to 4. Having prima facie failed in establishing that Tower-C cannot be constructed even in the ‘said property’, Plaintiffs have raised an alternate contention that the developers would be bound by the disclosure made in the last disclosed plan of 2009 and cannot construct the third saleable town beyond the balance sale component BUA therein. I have already held that provisions of MOFA apply to the project in question. Defendant No.1 has made disclosure to the flat purchasers of Towers-A and B initially in the form of LOI dated 3 September 2005 and subsequently in the form of revised LOI dated 10 December 2009 read with OC layout plan dated 31 December 2009. Plaintiffs themselves accept that the layout plan dated 31 December 2009 needs to be treated as ‘the last disclosed plan’ to the flat purchasers. Therefore, the issue for consideration is whether construction of Tower-C needs to be in strict conformity with the disclosures made under the O.C. layout plan dated 31 December 2009.

206. I have already discussed the statutory framework of MOFA relating to disclosure requirement. The issue of permissibility for a promoter to carry out construction contrary to disclosures made under Sections 3 and 4 of MOFA and Form-V Agreement under MOFA Rules has repeatedly attracted attention of Courts. It would be apposite to refer to few of the judgments. The Apex Court judgment in Jayantilal Investments (supra) highlights the importance of disclosure requirement under Sections 3 and 4 of MOFA. It is held in paragraph-15 to 19 of the judgment as under: Page Nos. 136 of 170

15. The judgment of the Bombay High Court in Kalpita Enclave case [1986 Mah LJ 110: (1987) 1 Bom CR 355] was based on the interpretation of unamended Section 7 of MOFA. Consequently, it was held that a promoter was not entitled to put up additional structures not shown in the original layout plan without the consent of the flat takers. Thus, consent was attached to the concept of additional structure. Section 7 was accordingly amended. Section 7-A was accordingly inserted by Maharashtra Amending Act 36 of 1986. Section 7-A was inserted in order to make the position explicit, which according to the legislature existed prior to 1986, implicitly. Section 7 of MOFA came to be amended and for the purpose of removal of doubt, additional Section 7-A came to be added by Maharashtra Act 36 of 1986. By this amendment, the words indicated in the parenthesis in the unamended Section 7(1)(ii), namely, “or construct any additional structures” came to be deleted and consequential amendments were made in Section 7(1)(ii). Maharashtra Act 36 of 1986 operated retrospectively. Section 7-A was declared as having been retrospectively substituted and it was deemed to be effective as if the amended clause had been in force at all material times. Further, it was declared vide Section 7-A that the abovequoted expression as it existed before commencement of the amendment Act shall be deemed never to apply in respect of the construction of any other additional buildings/structures, constructed or to be constructed, under a scheme or project of development in the layout plan, notwithstanding anything contained in the Act or in any agreement or in any judgment, decree or order of the court. Consequently, reading Section 7 and Section 7-A, it is clear that the question of taking prior consent of the flat takers does not arise after the amendment in respect of any construction of additional structures. However, the right to make any construction of additional structures/buildings would come into existence only on the approval of the plan by the competent authority. That, unless and until, such a plan stood approved, the promoter does not get any right to make additional construction. This position is clear when one reads the amended Section 7(1)(ii) with Section 7-A of MOFA as amended. Therefore, having regard to the Statement of Objects and Reasons for substitution of Section 7(1)(ii) by Amendment Act 36 of 1986, it is clear that the object was to make legal position clear that even prior to the amendment of 1986, it was never intended that the original provision of Section 7(1)(ii) of MOFA would operate even in respect of construction of additional buildings. In other words, the object of enacting Act 36 of 1986 was to change the basis of the judgment of the Bombay High Court in Kalpita Enclave case [1986 Mah LJ 110: (1987) 1 Bom CR 355]. By insertion of Section 7-A vide Maharashtra Amendment Act 36 of 1986 the legislature had made it clear that the consent of flat takers was never the criteria applicable to construction of additional buildings by the promoters. The object behind the said amendment was to give maximum weightage to the exploitation of development rights which existed in the land. Thus, the intention behind the amendment was to remove the impediment in construction of the additional buildings, if the total layout allows construction of more buildings, subject to compliance with the building rules or building bye-laws or Development Control Regulations. At the same time, the legislature had retained Section 3 which imposes statutory obligations on the promoter to make full and true disclosure of particulars mentioned in Section 3(2) including the nature, extent and description of Page Nos. 137 of 170 common areas and facilities. As stated above, sub-section (1-A) to Section 4 was also introduced by the legislature by Maharashtra Act 36 of 1986 under which the promoter is bound to enter into agreements with the flat takers in the prescribed form. Under the prescribed form, every promoter is required to declare FSI available in respect of the said land. The promoter is also required to declare that no part of that FSI has been utilised elsewhere, and if it is utilised, the promoter has to give particulars of such utilisation to the flat takers. Further, under the pro forma agreement, the promoter has to further declare utilisation of FSI of any other land for the purposes of developing the land in question which is covered by the agreement.

16. Therefore, the legislature has sought to regulate the activities of the promoter by retaining Sections 3 and 4 in the Act. It needs to be mentioned at this stage the question which needs to be decided is whether one building with several wings would fall under amended Section 7(1)(ii). Section 7-A basically allows a builder to construct additional building provided the construction forms part of a scheme or a project. That construction has to be in accordance with the layout plan. That construction cannot exceed the development potentiality of the plot in question. Section 10 of MOFA casts an obligation on the promoter to form a cooperative society of the flat takers as soon as minimum number of persons required to form a society have taken flats. It further provides that the promoter shall join the society in respect of the flats which are not sold. He has to become a member of the society. He has the right to dispose of the flats in accordance with the provisions of MOFA. Section 11 inter alia provides that a promoter shall take all necessary steps to complete his title and convey the title to the society. He is obliged to execute all relevant documents in accordance with the agreement executed under Section 4 and if no period for execution of the conveyance is agreed upon, he shall execute the conveyance within the prescribed period. Rule 8 inter alia provides that where a cooperative society is to be constituted, the promoter shall submit an application to the on which the minimum number of persons required to form such society (60%) have taken flats. Rule 9 provides that if no period for execution of a conveyance is agreed upon, the promoter shall, subject to his right to dispose of the remaining flats, execute the conveyance within four months from the date on which the society is registered.

17. Reading the above provisions of MOFA, we are required to balance the rights of the promoter to make alterations or additions in the structure of the building in accordance with the layout plan on the one hand vis-à-vis his obligations to form the society and convey the right, title and interest in the property to that society. The obligation of the promoter under MOFA to make true and full disclosure to the flat takers remains unfettered even after the inclusion of Section 7-A in MOFA. That obligation remains unfettered even after the amendment made in Section 7(1)(ii) of MOFA. That obligation is strengthened by insertion of sub-section (1-A) in Section 4 of MOFA by Maharashtra Amendment Act 36 of 1986. Therefore, every agreement between the promoter and the flat taker shall comply with the prescribed Form V. It may be noted that, in that prescribed form, there is an explanatory note which inter alia states that clauses 3 and 4 shall be statutory and shall be retained. It shows the intention of the legislature. Page Nos. 138 of 170 Note 1 clarifies that a model form of agreement has been prescribed which could be modified and adapted in each case depending upon the facts and circumstances of each case but, in any event, certain clauses including clauses 3 and 4 shall be treated as statutory and mandatory and shall be retained in each and every individual agreements between the promoter and the flat taker. Clauses 3 and 4 of the Form V of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, etc.) Rules, 1964 are quoted hereinbelow:

18. The above clauses 3 and 4 are declared to be statutory and mandatory by the legislature because the promoter is not only obliged statutorily to give the particulars of the land, amenities, facilities, etc., he is also obliged to make full and true disclosure of the development potentiality of the plot which is the subject-matter of the agreement. The promoter is not only required to make disclosure concerning the inherent FSI, he is also required at the stage of layout plan to declare whether the plot in question in future is capable of being loaded with additional FSI/floating FSI/TDR. In other words, at the time of execution of the agreement with the flat takers the promoter is obliged statutorily to place before the flat takers the entire project/scheme, be it a onebuilding scheme or multiple number of buildings scheme. Clause 4 shows the effect of the formation of the Society.

19. In our view, the above condition of true and full disclosure flows from the obligation of the promoter under MOFA vide Sections 3 and 4 and Form V which prescribes the form of agreement to the extent indicated above. This obligation remains unfettered because the concept of developability has to be harmoniously read with the concept of registration of society and conveyance of title. Once the entire project is placed before the flat takers at the time of the agreement, then the promoter is not required to obtain prior Page Nos. 139 of 170 consent of the flat takers as long as the builder puts up additional construction in accordance with the layout plan, building rules and Development Control Regulations, etc. (emphasis and underlining added)

207. Thus, in Jayantilal Investments, the Apex Court considered amendments to Section 7 and introduction of Section 7A in the light of retention of provisions of Sections 3 and 4 and statutory clauses-3 and 4 of Form-V Agreement and held that a promoter is also obliged to make full and true disclosure of the development potentiality of the plot. He is not only required to make disclosure concerning the inherent FSI but also whether the plot is capable of being loaded with additional FSI/floating FSI/TDR. The Apex Court held that a promoter is statutorily obliged to place before the flat takers the entire project/scheme. Once such project/scheme is placed before the flat purchasers, it is not necessary to secure consent of flat purchasers for construction of building/structure sanctioned in accordance with the disclosed scheme.

208. Division Bench of this Court in Lakeview Developers (supra) has held that if the full development potential of the land is exhausted and the obligation for conveyance of land in favour of the society has arisen as per MOFA and if the developer fails to do so, then any further benefit which would accrue to the developer on account of additional TDR/FSI made available cannot be used by him for the purpose of construction of additional buildings. The Division Bench held in paragraphs-55, 56, 57, 64 and 65 as under:

55. In our view, therefore, from the aforesaid judgment, it is clear that the developer cannot claim that he can continuously exploit the building potential for eternity without conveying the land in favour of the Society. The obligation to convey the land in favour of the Society within a prescribed time and the obligation to make true and full disclosure under Clauses 3 and Page Nos. 140 of 170 4 of Form V remains unfettered. If the full development potential of the land is exhausted and the obligation for conveyance of land in favour of the Society has arisen as per the Act and Rules and if the developer fails to do so then any further benefit which would accrue to the developer on account of any additional TDR or FSI made available, cannot be used by him for the purpose of construction of additional buildings. For example, recently, the Government of Maharashtra has announced that the FSI which would be available in the City of Greater Mumbai would be increased by 0.6. The benefit of this announcement cannot be availed by a developer who has not conveyed the property in favour of the Society though he was under legal obligation to do so, having fully developed the building potential of the land under building as per true and full disclosure under Section 3 and 4 of the said Act and Clauses 3 and 4 of Form V of the said Rules. He, therefore, cannot having failed in his obligation to convey the property within the time prescribed thereafter claim that full building potential has not been utilized and claim right to construct further buildings.

56. In our view, from the facts and circumstances of the present case, it can be seen that though the developer/promoter had fully utilized the full FSI/potential of the land and was under an obligation to convey the property after construction of the 10th building on Sector IV-A, he is now trying to construct four other buildings by claiming additional TDR and trying to load it on the four additional buildings. In our view, prima facie, it can be seen that full development potential/FSI has already been utilized by the developer and his claim that additional buildings were constructed by utilizing the additional TDR prima facie does not appear to be correct if the layout plan produced by the Plaintiffs/Societies is taken into consideration.

57. Since the judgment of the Apex Court in Jayantilal Investments (supra) is the only judgment on the point under the MOFA, ratio of the said judgment will prevail and will be binding on this Court for that purpose. In our view, it is not necessary to minutely scrutinize the ratio of the judgments which have been shown to us by Mr. Aspi Chinoy the learned Senior Counsel appearing on behalf of the developer, though we can observe that the facts in most of these cases are different and, therefore, even otherwise the ratio of these judgments will not apply to the facts of this case. The contention of the developer that he is entitled to carry on the construction till the entire land i.e. the land not only in Sector IV-A but in all Sectors 1 to 13 is developed, is not correct. Neither the tripartite agreement nor the lease agreement executed between the land owners and developer nor the individual agreement between the developer and the flat purchasers can be construed in this manner as it would render the statutory provisions of MOFA nugatory. Even if such contractual conditions are mentioned in the contract, statutory obligation would override the contractual clauses in the agreement. Reliance on the note below the proforma of the lease therefore is misconceived and it cannot be used to interpret the meaning which is sought to be given by the developer that till the entire land is fully developed in all sectors, he is entitled to exploit the development potential in the land in Sector IV-A.

64. In our view, the said submission is fallacious and without any substance. A clause in the agreement between the flat purchasers and the developer cannot be construed to mean that the developer can continue to develop the Page Nos. 141 of 170 land for eternity and on the basis of some clause in the agreement refuse to convey the property which is contrary to the provisions of Section 7 read with Section 7-A and Sections 3 and 4 of the said Act and Rules 3 and 4 of Form V of the said Rules. As observed in Jayantilal Investments (supra), all these provisions have to be construed harmoniously. The clauses in the agreement cannot be construed in such a way as to make the obligations cast on the developer under Sections 3 and 4 and Rules 3 and 4 and Rule 8 and 9 of Form V redundant. If these clauses are read in such a manner, the purpose of the Act would be defeated. The provisions of the Act and Rules seek to strike a balance between the right of the developer to develop the property to its full potential and, at the same time, protect the rights of the flat purchasers

(i) to ensure that there is no alteration in the building and (ii) within a prescribed period title of the property is conveyed in favour of the Society. In the present case, the developer is trying to interpret clauses in the flat purchasers’ agreement and the note annexed to the lease deed in such a manner as to defeat the rights of the Societies in getting the land conveyed in their favour. If the interpretation which is sought to be made by the promoter/developer is accepted then till the entire 230 acres of land is not constructed/developed, the flat purchasers would not get the land conveyed in their favour. A lease was to be executed for a period of 80 years out of which 26 years have already been over. There is a large part of the vacant land in all the 13 Sectors. The promoter will continue to develop the said property and refuse to convey the land in favour of the Societies.

65. From the layout charts which have been shown to use, it can be seen that prima facie the Plaintiffs have made out a case that the entire consumable FSI has already been consumed after 10th building was constructed. The additional FSI and TDR which was utilized for construction of last two buildings was made available to the developer from the road set back area and other amenities which were provided and out of that these 10 buildings have been constructed. Prima facie, promoter/developer has not been in a position to show that the buildings were constructed out of additional TDR such as Slum TDR or TDR which is purchased by the developer. The development potential therefore, prima facie, in our view, has been fully consumed after the 10th building was constructed and, therefore, even otherwise, promoter/developer was under an obligation to convey the land in Sector IV-A in favour of the Societies. (emphasis and underlining added)

209. In Malad Kokil CHSL (supra), this Court has reiterated the importance of disclosures made to the flat purchasers by the promoters and impermissibility to construct contrary to the disclosed layout. This Court held in paragraph-50 to 53 as under:

50. As discussed herein above, as held by the Apex Court in the case of Jayantilal Investment, it is obligatory on the part of the promoter to make full and complete disclosure of the development potentiality of the plot which is a subject matter of agreement. It has also been held that promoter is not only required to make disclosure concerning inherent FSI but he is also required Page Nos. 142 of 170 at the stage of the layout plan to declare whether plot in question in future is being capable of loaded with additional FSI/floating FSI/TDR. As held by the Apex Court, at the time of execution of the agreement promoter is statutorily obliged to place before the flat takers the entire project/scheme. It has been held by the Apex Court that once the entire scheme is placed before the flat takers at the time of the agreement then the promoter is not required to obtain prior consent of the flat taker as long as the construction is in accordance with layout plan, building rules and DCR.

51. It will, therefore, have to be seen as to whether the impugned construction which the developer desires to construct is in accordance with the full disclosure that he is required to make and as to whether it is in accordance with the layout plan which was presented to the flat purchasers at the time of execution of the agreement. As already discussed herein above, the disclosure that the developer made to the members of the plaintiff-society regarding the proposed S-5 building, which also was to be constructed if permitted by the Corporation, was to have ground + one floor. The same was located in one corner of the open plot abutting S-4 building. Insofar as the members of the appellant-society is concerned, in the agreement which have been entered into in 1982, there is a reference to S-5 building of ground + one floor. Insofar as members who have entered into agreement in 1984, there is no mention in so far as 5-5 building is concerned. It is pertinent to note that in neither of the layouts annexed to 1982 agreement or 1984 agreement the proposed S-5 building is shown. On the contrary the area which is parallel to S.V. Road on one side and is surrounded by paved pathway on all other sides is shown as an open area. It is thus clear that the lay out placed before the flat takers either does not show S-5 building or if it shows S-5 building, the same is shown to consist of ground + one floor. In my considered view. therefore, in view of the law laid down by the Apex Court in Jayantilal Investment, since the construction which is sought to be made is not in accordance with layout plan presented to the flat takers, the same cannot be permitted unless there is a consent of the members of the plaintiffs and the appellant-society.

52. I am unable to accept the contention on behalf of the developer that if in the layout an area is earmarked for proposed construction, it hardly matters if the layout shows a building of 1 + 1 floor and the construction is in fact of four storeys, 10 storeys or 28 storeys. In my view the said argument is heard to be rejected. If such an argument is accepted, it would frustrate the very purpose of beneficial legislation like MOFA.

53. The very purpose that the entire layout should be presented to the flat purchasers and that there should be full disclosure made to him is with the purpose that he should be aware as to what is the entire layout of the scheme in which he is going to purchase the property. Suppose the original layout shows only the proposed building of ground + one, the flat taker would purchase the same with the knowledge that only few more persons are likely to join the Society and there would not be much effect on the facilities, amenities etc. provided to the members of the Society. However, if a structure of ground + one is converted in a towering structure of 28 storeys, the entire scenario would change. The number of additional members that would reside on the said plot would increase by substantial number, thereby Page Nos. 143 of 170 putting an additional load on the infrastructure, amenities, facilities etc. available on the said plot. In any case, if this is permitted, the very purpose of requiring a developer to make full and complete disclosure would stand frustrated. I am, therefore, unable to accept the contention of the learned Counsel for the developers in that regard.

210. In Dosti Corporation V/s. Sea Flama Co-operative Housing it is held that mere existence of a clause in the agreement permitting the developer to carry out additional construction, in absence of any disclosure about the exact nature of construction, would not entitle it to carry out such additional construction, without obtaining prior consent of the flat purchasers in writing. Paragraph 100 of the judgment reads thus:

100. In my view, merely because there was a clause in the agreement for sale that the defendant No. I would be entitled to carry out construction on a portion outside the yellow line boundary in future and had alleged to have obtained the blanket consent of the flat purchasers, since there was no disclosure or full disclosure about the proposed construction on the portion of the land outside the yellow line boundary area and the fact whether the land in question was capable of any further construction on the date of sanction of such layout plan, the defendant No. 1 could not have applied for amendment to the sanctioned plan without obtaining prior consent of the flat purchasers in writing. Such blanket consent in the agreement for sale without full disclosure is contrary to the provisions of MOFA and cannot be enforced by the developer. In my view, the judgment of this Court in case of Malad Kokil Co-operative Housing Society Ltd. (supra) squarely applies to the facts of this case. There is thus no merit in the submissions made by Mr. Chinoy, learned senior counsel for the defendant No. 1 that there was informed and full disclosure made to the flat purchasers about the development on two portions of the suit plot outside the yellow boundary line. Admittedly, the defendant No. I had amended the plan more than once after showing such plan to the flat purchasers without obtaining any informed consent after making full disclosure of the proposed amendment by the developer on the suit plot.

211. In K.M. Realty (supra), the developer therein had disclosed the proposed additional building, which was sanctioned as G+7. However, the developer got the plans sanctioned for G+16 floors 24 2016 5 MhLJ 102 Page Nos. 144 of 170 building with expanded plinth and commenced its construction. The City Civil Court passed order of temporary injunction against the developer, who filed Appeal from Order before this Court. One of the contentions raised before this Court by the developer therein that the ratio of the judgments in Jayantilal Investments, Dosti Corporation and Malad Kokil CHSL apply only in cases where additional FSI under changed norms is available and a developer is planning to put additional construction by using the additional FSI. This Court however found that factually the developer therein was utilizing the additional FSI as well as fungible made available under DCPR-2034, on account of which he had secured building permission for G+16 floors with expanded plinth. This Court accordingly restrained the developer therein from constructing additional building beyond the disclosure of G + 7 floors and beyond the disclosed plinth. This Court rejected the contention of necessity to provide flexibility for developers to construct additional building contrary to the disclosure for availing the admissible FSI/BUA. This Court also did not permit utilisation of additional FSI flowing through DCPR, 2034. It appears that the judgment of this Court in K.M. Realty was challenged before the Apex Court in SLP (C) No. 3420/2025, which has been disposed of by order dated 1 August 2025 by permitting the developer therein to carry out construction of the building by noting developer’s statement it would use only balance FSI potential as per DCR 1991, without using even fungible FSI admissible under DCR

1991. The Apex Court has also restrained the developer from alienating the flats till disposal of the suit, which is directed to be decided in time bound manner. Thus, even the order passed by the Apex Court in K M Realty does not disturb the ratio of judgment of this Court which had disallowed construction by utilizing additional and fungible FSI under DCPR 2034. Page Nos. 145 of 170

212. While it appears to be a settled position that a promoter cannot be permitted to carry out any construction beyond disclosure made to the flat purchasers, Defendant Nos.[1] to 4 have relied upon judgment of Single Judge of this Court in Krishna Constructions (supra) in support of their contention that disclosure of full potential of the project and developability and informed consent of flat purchasers cannot be decided by any straight jacket formula. The judgment is also relied upon in support of contention that additional construction can always be put up in the plot provided the same is sanctioned by the planning authority. In Krishna Constructions, the Plaintiff therein had entered into Agreements for Sale of flats and before construction of the building could be completed by handing over possession of flats, the developer secured amended permissions for construction of additional flats in the project. Judgments in Jayantilal Investments, Lakeview Developers, Dosti Corporation and Malad Kokil CHSL were cited before the Court. The Court has distinguished those judgments by holding in paragraph-21 of Krishna Developers that the suits in those cases were filed after completion of construction and formation of society of flat purchasers. In Krishna Developers, the construction was not only incomplete when plans were amended, but the court took note of Clause-11 of the MOFA Agreement, under which consent of the plaintiff therein was obtained for putting up additional construction up to declared development potential. This Court held in Krishna Constructions in paras-22, 23 and 24 as under:

22. Thus, considering the well-established legal principles as discussed above, it is necessary to balance the rights of the promoter to make alterations or additions in the structure of the building in accordance with the layout plan on the one hand vis-à-vis his obligations to form the society and convey the right, title and interest in the property to that society. At the time of execution of the agreement with the flat purchasers, the promoter is obliged statutorily to place Page Nos. 146 of 170 before the flat purchasers the entire project/scheme, be it a one-building scheme or multiple number of buildings scheme and the condition of true and full disclosure flows from the obligation of the promoter under MOFA vide Sections 3 and 4 and Form V, which prescribes the form of agreement and this obligation remains unfettered because the concept of developability has to be harmoniously read with the concept of registration of society and conveyance of title. Thus, once the entire project is placed before the flat takers at the time of the agreement, then the promoter is not required to obtain prior consent of the flat takers as long as the builder puts up additional construction in accordance with the layout plan, building rules and Development Control Regulations. Thus, the issue of disclosure of the full potential of the project and developability, and the informed consent of the flat purchaser cannot be decided on any straightjacket formula, in as much as, these issues would depend upon the facts of each case. The concept of informed consent cannot be stretched beyond the statutory obligations of the Promoter as contemplated under Sections 3 and 4 of MOFA and form V, which prescribes the format of the agreement.

23. In the present case, the flat purchase agreement discloses the revised layout and revised commencement certificate dated 27th May 2011 and 13th October 2015 for the construction of multi-storied buildings, amenity space, open space and the area under internal roads. Paragraphs 1 to 5 of the agreement disclose the specifications of the complex. Paragraph 11 of the agreement discloses the particulars regarding the explicit consent of the plaintiff regarding the promoter’s entitlement to consume FAR and Transferable Development Rights, extended construction and additional floors. The clauses in paragraph 11 also provides for the developer’s right to exploit the full potentiality of development even if possession of units is handed over and the entitlement of the promoter to make changes in the elevation and specifications of the complex, on a condition that such changes shall not materially affect the internal plan and location of the unit sold to the plaintiff.

24. It is important to note that the layout of the 2015 annexed to the plaintiff’s agreement discloses the complete area statement, including permissible tenements of 123 out of which 62 tenements are shown as proposed. Thus, the clauses providing the plaintiff’s consent in paragraph 11 of the agreement are to be read with reference to the area statement and the tenement statement in the approved layout annexed to the agreement. It is further pertinent to note that the relevant clauses containing the plaintiff’s consent, recorded in paragraph 11 of the agreement, are challenged by the plaintiff in the suit. The challenge to the amended plans of 2019 on the ground that it is without the plaintiff’s consent is based on the substantive prayer to challenge the clauses containing the plaintiff’s consent to enable the developer to utilise the full potential of the land, including extension to the construction and additional floors. Thus, the plaintiff signed the agreement, with full knowledge about the scope of the project and he consenting for the promoter to utilise the full potentiality of the project. However, by filing the suit, the plaintiff for the first time raised objection to the clauses of the agreement containing his consent and sought to withdraw his consent. Prima facie, the clauses in agreement contain the plaintiff's informed consent as contemplated under Section 7 of the MOFA, and the appellants/defendants appear to have complied with the Page Nos. 147 of 170 requirement of true and full disclosure, as contemplated under Section 3 of MOFA.

213. From the findings recorded by this Court in para-24 of the judgment in Krishna Constructions, it appears that what was disclosed to the Plaintiff therein at the time of execution of the Agreement for Sale dated 20 January 2017 was the layout plan of 2015 in which the complete Area Statement was disclosed indicating permissible tenements as ‘126’. Thus, the Plaintiff therein had purchased the flat with full understanding that the project had development potential of 126 tenements, out of which only 62 tenements were proposed to be constructed at the time when the Agreement was executed. After execution of Agreement for Sale and before completion of construction of the building, fresh Commencement Certificate dated 4 May 2019 was issued for construction of 110 tenements. The Commencement Certificate was further revised on 1 June 2022 for construction of 126 tenements. Thus, in Krishna Constructions, the Plaintiff therein was fully made aware of the development potential of the plot of 126 tenements, which was in accordance with the provisions of Sections 3 and 4 of MOFA where the Promoter is under obligation to disclose the development potential of the project. Despite being disclosed the development potential of 126 tenements, Plaintiff therein sought to bind the developer to construction of only 62 tenements, which were sanctioned at the time of execution of MOFA agreement. Another important distinguishing factor in the case of Krishna Constructions is that the Plaintiff therein was aggrieved by Clause-11 of the MOFA Agreement under which he had given consent for carrying out construction of the building to the extent of full available development potential. This Court held that Clause-11 of the Agreement was required to be read alongwith the declared Area Statement of Page Nos. 148 of 170 sanctioned layout plan of 2015. Faced with the situation that consent was given for construction of building upto the disclosed potential of 126 tenements, the Plaintiff therein had challenged Clause-11 of the MOFA agreement in his suit. Therefore, the judgment in Krishna Constructions, rendered in peculiar facts of that case, cannot be cited in support of an abstract proposition that in every case, developers can carry out construction which is sanctionable by the planning authority, even though the same is contrary to the disclosure made to the flat

214. Defendant-Developers have also relied upon judgment of Single Judge of this Court in S & M Enterprises (supra) in support of their contention that development potential of the building need not be disclosed in the Agreement for Sale. The challenge before the learned Single Judge in S & M Enterprises was to the order passed by the Competent Authority granting deemed conveyance of the entire land and building in favour of Respondent-Society. In that case, the developer had undertaken phase-wise construction and was yet to complete construction of building in the second phase. Instead of granting conveyance of proportionate land in favour of the society, the Competent Authority had conveyed the entire land in favour of the society putting fetter on the right of the developer to complete entire construction in the land. It is in the light of this factual position that the learned Single Judge has made observations in para 15 of the judgment about non-requirement of disclosure about development potential of the plot in the agreement for sale. The judgment rendered in the facts of that case, and particularly dealing with the issue of deemed conveyance, cannot be cited in support of a proposition that in every case, there need not be disclosure of development potential in MOFA Agreements. Page Nos. 149 of 170

215. Thus, the law declared by the Supreme Court in Jayantilal Investments is that the developer is statutorily required to disclose the development potential of the plot. Section 7(1)(ii) prohibits additions or alterations to the building contrary to the disclosed plans and specifications, which are statutorily required to be disclosed under Sections 3 and 4 of MOFA read with clauses 3 and 4 of Form V. Construction of a wing to the existing building amounts of addition under Section 7(1)(ii) and therefore additional construction within a building or additional wing thereto cannot be constructed without consent of flat purchasers. The restriction under Section 7(1)(ii) on addition or alteration applies even if development potential is balance. However as per Section 7A, construction of an additional building/structure does not constitute an addition or alteration to the building within the meaning of Section 7(1)(ii) and consent of flat purchasers is not necessary for construction of such additional building/structure in the layout. However, since Sections 3 and 4 of MOFA and statutory clauses 3 and 4 of Form V agreement are retained by the Legislature even after introduction of Section 7A, construction of additional building/structure in the layout cannot exceed the disclosed development potential. Therefore, though plans or specifications of additional building/structure in the layout need not be disclosed and the promoter has the necessary flexibility in that regard, he can construct additional building/structure only to the extent of disclosed development potential. This, in my view, is the broad statutory scheme of Sections 3,4,[7] and 7A of MOFA as interpreted by the Supreme Court in Jayantilal Investments. Page Nos. 150 of 170

216. The legislative objective behind compulsory disclosure by promoters about development potentiality and plans and specifications is to enable the flat purchasers to make an informed decision while purchasing the flats. Various factors play role in decision making process while purchasing the flat. While location, cost of flat, reputation of developer, connectivity, access roads etc. are the main considerations usually applied by flat purchasers while making their decision, the density of construction on the plot also becomes one of the vital considerations while making the decision. The density of construction, apart from becoming matter of choice of the flat purchasers, also affects the cost of flat. To illustrate, a project constructed with incentive FSI, such as public parking, IT& ITES, hospitality, etc, is likely to have more flats/units than the project constructed with base FSI. In the former case, if incentive FSI 4.00 is sanctioned for a plot admeasuring 10,000 sq.mtrs., the development potential of the plot would be 40,000 sq.mtrs., on which about 400 flats of size of 1,000 sq.ft can be constructed. In the latter case, if base FSI of 1.33 is sanctioned, development potential of the plot would be 13,300 sq.mtrs, on which only 133 flats of size of 1,000 sq.ft can be constructed. Thus, the former project would have much higher density than the latter. When both projects are put up before a flat purchaser, he makes an informed decision by applying the consideration of sharing the apartment on plot admeasuring 10,000 sq.mtrs with 400 flat owners or 133 flat owners. The density also affects cost of the flat, which is likely to be cheaper in the former project as compared to the latter one. All that Sections 3, 4, 7 and 7A of MOFA and Clauses-3 and 4 of Form-V of MOFA Rules seek to ensure is that the developer does not alter the project from latter to the former after execution of Agreements for Sale. Page Nos. 151 of 170

217. This is why ‘construction in accordance with sanctioned permissions’ and ‘construction in accordance with disclosure’ are two distinct concepts. Merely because something is constructable in accordance with the applicable DCR, it does not mean that it can be constructed contrary to the disclosures made to the flat purchasers. If disclosure of project involving lesser density is made (by specifying FSI/BUA to be utilized, with or without details as to number of buildings, number of floors, height of buildings, their plinth, etc) and on that basis, an informed decision is made by the flat purchasers to purchase the flats, the developer cannot be permitted construct buildings in excess of the disclosed density merely because higher FSI/BUA is made available due to change of norms/policy. This is why disclosure made to flat purchaser by the developer assumes significance and MOFA seeks to bind the developer to the disclosure made to the flat

218. Thus, merely because the development control regulations permit putting up of additional construction, the developer cannot put up such additional construction, if the same contravenes the disclosure made to the flat purchasers in accordance with Sections 3 and 4 of MOFA and clauses 3 and 4 of Form V agreement and if the same is in the teeth of Section 7 or 7A of MOFA. This view is also adopted by Single Judge of this Court in Jitendra Shantilal Shah (supra) in which it is held as under:

66. In the present case, the question is whether even assuming that the building permissions have been granted in accordance with the provisions of the Bombay Municipal Corporation Act and the MRTP Act, a flat purchaser is entitled to challenge the construction itself as being violative of MOFA. The challenge in the present case is not to the sanctioned plans alone/per-se, but to the right to even submit the plans/carry out the construction in view of the provisions of MOFA. Page Nos. 152 of 170

219. In the present case, a clear disclosure is made to the flat purchasers of Towers-A and B at the time of securing part Occupancy Certificate that only three sale component Towers-A, B and C would come up in the said property whose development potential would only be 88,003.51 sq.mtrs. Having consumed BUA of 49,421.87 sq.mtrs for construction of Towers-A and B, the developer can construct Tower-C by utilising balance BUA of 38,581.64 sq.mtrs. Any change in the FSI norms or policy relating to density of slum/rehab tenements occurring subsequently cannot be a ground for putting up any additional construction exceeding the disclosure made in respect of the ‘said property’.

220. The conspectus of the above discussion is that Defendant Nos.[1] to 4 cannot be permitted to construct Tower-C contrary to the disclosure made about development potentiality in the last disclosed OC plan dated 31 December 2009.

221. As observed above, the last disclosed OC plan of 31 December 2009 reflected total permissible built-up area of 1,58,858.72 sq.mtrs. which was distributed in the LOI dated 10 December 2009 into rehab component of 70,855.21 and sale component of 88,003.51 sq.mtrs. Thus, the total sale component BUA under LOI dated 10 December 2009 and layout plan dated 31.12.2009 was 88,003.51 out of which BUA of 49,421.87 is utilised in construction of Towers-A and B leaving behind balance sale component BUA of 38,581.64 sq.mtrs for construction of Tower-C. Page Nos. 153 of 170

222. In my view therefore Tower-C can be constructed by utilising sale component BUA upto the extent of 38,581.64 sq.mtrs. only.

RELIANCE BY DEFENDANT -DEVELOPERS ON CONSENT LETTERS

223. Defendant Developers have relied upon letters executed by various flat purchasers at the time of securing possession of their respective flats in support of contention that express consent is given by the flat purchasers for construction of two additional high-rise buildings with structural integrations, interlinks and interconnections. It appears that at the time of handing over possession of flats in Towers ‘A’ and ‘B’, Defendant No.1 has procured signatures of the flat purchasers on format letters. It must be observed at the very outset that even the consent letters gave representation to the flat purchasers that what was executed with them were “MOFA Agreements’. This is clear from Para 1 of the consent letter referring to the agreement for sale as ‘MOFA agreement’ and also from opening sentence of para 11 of the consent letters stating that ‘As agreed to pursuant to the provisions of the said MOFA Agreement….’

224. Developers have relied on Clause 9 (XVII) (c) of the consent letters, which reads thus:c) I/We am/are aware that the project as envisaged comprises interalia of four high rise buildings of which two only are presently complete and of the remaining two, one tower building may include Serviced Apartments/Hotel in addition to residential flats/apartments/units and parking spaces etc. and the other will comprise of multilevel car parking with additional construction above the same comprising of residential/commercial units etc. and all the four towers are and shall be part of integrated development with structural integration, interlinks and interconnections required and as may be permitted from time to Page Nos. 154 of 170 time. I/We irrevocably and expressly agree to, confirm and consent to the same.

225. In my view, such blanket consent obtained at the time of delivery of possession of flats in Towers ‘A’ and ‘B’ cannot override disclosure made about development potentiality of the ‘said property’ in MOFA agreements read with layout plan dated 31 December 2009. The consent is blanket because it virtually permits the developer to do anything and everything in the ‘said property’. In Clause 9 (XVII) (c) Defendant No.1 has procured consent for construction of service apartments /hotel in one out of the four towers. In the LOI dated 10 December 2009 or layout plan dated 31 December 2009, construction of such service apartments/hotel was not envisaged. In that view of the matter blanket consent secured in the form of letters at the time of handing over possession of flats in Towers ‘A’ and ‘B’ cannot be a reason for permitting Defendant Nos.[1] to 4 to carry out construction contrary to the disclosure in 2009 plan. Even otherwise, the flat purchasers of Towers ‘A’ and ‘B’ may not have much choice but to sign the format letters while securing possession of their respective flats. After paying entire amount of consideration, if the flat purchaser is made to sign on a format document as a precondition for handing over possession of flat, he may not be left with any other choice but to sign the same with a view to ensure possession of the flat. The agreement executed under Section 4 regulates the transaction of sale and activity of construction of flats and building and not any subsequent letter procured at the time of delivery of possession of flat. In Dosti Corporation (supra) this Court has frowned upon developers obtaining blanket consent and has held that the blanket consent or authority obtained by the developer at the time of entering into agreement for sale or at the time of handing over possession of the flat is not a consent within the meaning of Section 7(1) Page Nos. 155 of 170 of MOFA. Therefore reliance by the Defendant-Developers on the consent letters for carrying on construction contrary to the last disclosed plan of 2009 is misplaced. PLAINTIFFS’ CONTENTION THAT FSI UTILISED FOR ‘IMPERIAL EDGE’ MUST BE DEDUCTED FROM BALANCE BUA FOR TOWER-C BUILDING

226. It is Plaintiff’s contention that if Tower-C building is permitted to be constructed by this court by utilisation of balance sale component BUA as per last disclosed sanctioned plan of 2009, the BUA consumed for construction of the building ‘Imperial Edge’ needs to be deducted. As observed above, sale component BUA of 7145.40 sq.mtrs is consumed for construction of the building ‘Imperial Edge’. However, I have already held that Plaintiffs cannot object to the construction of the building ‘Imperial Edge’ as the same falls outside the boundaries of the ‘said property’. The issue that arises for consideration is whether BUA utilised for construction of building outside the said property needs to be deducted for restricting construction of Tower-C within the said property.

227. As observed above, Plaintiff is now armed with sale component BUA of 1.91,625.60 sq.mtrs. However, by binding the developers to the disclosure made in the 2009 plan, the Court is permitting them to construct Tower-C to the extent of balance sale component BUA of 38,581.64 sq.mtrs. The picture therefore that emerges is as follows:- Page Nos. 156 of 170 Sale Component BUA now available with developers Maximum BUA utilisable for construction of Tower-C as per disclosed plan of 2009 1,91,625.60 sq.mtrs 38,581.64 sq.mtrs

228. The developers have in their kitty the entire permissible and loadable BUA of 38,581.64 sq.mtrs., in fact, they have much more than that. In such a situation, can the developer be restrained from putting up construction of Tower-C upto the maximum disclosure made to the flat purchasers on the ground of consumption of part of BUA for construction of the building ‘Imperial Edge’? Answer to the question appears, to my mind, to be in the negative. In the present case, the Court is restricting the developers to put up Tower-C upto the level of disclosure made in 2009 plan. Otherwise, the developers could have utilised the entire balance sale component BUA for construction of Tower-C. However, upholding the contention of plaintiffs that construction of Tower-C cannot exceed the development potential disclosed to the flat purchasers, the Court is restricting the construction up to the then balance available BUA of 38,581.64 sq.mtrs. In that view of the matter, merely because the developers have utilised some portion of sale component BUA of 7145.40 sq.mtrs for construction of the building ‘Imperial Edge’ outside the said property, it cannot be a ground for further restricting the entitlement of the developers to construct Tower-C by deducting Edge building’s BUA. While permitting construction of building ‘Town House’ (Wing-D), falling outside the boundaries of the said property, this Court has permitted utilization of the available BUA under the revised LOI dated 27.5.2024. Therefore, such available BUA can also be utilized for sustenance of the building Page Nos. 157 of 170

229. In that view of the matter, the contention of the plaintiffs that Tower- C can be constructed by utilization of BUA of only 29,552.47 sq.mtrs is liable to be rejected. Defendant Nos.[1] to 4 can be permitted to construct Tower-C by utilization of balance available sale component BUA of 38,581.64 sq.mtrs as per the last disclosed plan of

2009.

WHETHER TOWER-C WOULD BE A ‘WING’ OR AN ‘ADDITIONAL BUILDING’

230. Having held that construction of Tower-C building was disclosed to flat purchasers of Towers A and B and that the same can be constructed by utilizing sale component BUA of 38,581.64 sq.mtrs, the next objection of the Plaintiffs to construction of Tower C is that construction of the same violates provisions of Section 7(1)(ii) of MOFA as it is an addition to the existing building. It is the contention of the plaintiffs that Tower-C, if constructed, would be a ‘wing’ of existing building comprising of Towers-A and B since podium of Tower-C is being attached to the podium of existing Towers. Plaintiffs therefore contend that construction of additional Wing to the existing Towers, violates provisions of Section[7] of MOFA. Reliance is placed on judgment of the Apex Court in Jayantilal Investments (supra).

231. As observed above, under Section7(1)(ii) of MOFA, after disclosure of plans and specifications of the building, as approved by the local authority to the flat purchasers, a promoter cannot make any other alterations or additions in the structure of the building without previous consent of all the persons who have agreed to take flats in such Page Nos. 158 of 170 buildings. Section 7A has been inserted by Maharashtra Act 36 of 1986, under which it is clarified that the fetter under Section 7(1)(ii) does not apply in respect of construction of additional buildings or structures constructed or to be constructed under a scheme or project of development in the layout after obtaining approval of the local authority.

232. There is no dispute to the position that Tower-C will have common podium with Towers-A and B. Since Towers-A, B and C will be attached by a common podium, Tower-C building would necessarily be an additional ‘wing’ of existing Towers-A and B. There is no dispute to the position that various common amenities in respect of the project ‘The Imperial’ are located within various podium levels. The MOFA agreement executed with flat purchasers of Towers-A and B describe the term ‘the project’ to mean and include all saleable residential buildings constructed and to be constructed on the ‘said property’. The definitions of the terms ‘project’ and ‘the saleable residential buildings’ in clauses-1

(iii) and (iv) of MOFA agreements is as under:-

(iii) The “Project: for the purpose of this Agreement shall mean and include the Saleable Residential Buildings being constructed and to be constructed on the said Property and any future amalgamation, if any, proposed with respect to the said Property; (iv) “The Saleable Residential Buildings” being constructed by the Developers/Promoters on the said Property shall be known as “The Imperial” and shall be for free sale in the open market.

233. There is no dispute to the position that Tower-C is also a part of the project and also one of the three saleable residential buildings. The flat purchasers of Towers-A and B were thus fully made aware of the position that all the three saleable residential buildings in the Project would share common amenities provided for the Project. Most of those Page Nos. 159 of 170 common amenities are located in and on the common podium. It therefore cannot be contended that the flat purchasers never envisaged joining of podium of Tower-C with the podium of the existing Towers- A and B. Therefore, even though Tower-C can be considered as ‘wing’ of existing Towers A &B buildings, it cannot be contended that construction thereof would tantamount to addition or alteration in the structure of existing Towers-A and B buildings. Construction of Tower C with common podium was disclosed to the flat purchasers of Towers A and B. Contention raised by plaintiffs about violation of provisions of Section 7(1)(ii) of MOFA while constructing Tower-C is accordingly rejected.

USE OF SALE COMPONENT AREA REMAINING UNUTILISED

234. As observed above, Defendant No.1 is now armed with total sale component area of 1,91,625.60 sq.mtrs as against previously sanctioned sale component area of 88,003.51 sq.mtrs. The Court is proposing to restrain Defendant Nos.[1] to 4 from constructing Tower-C in the ‘said property’ by utilizing sale component BUA in excess of 38,581.64 sq.mtrs. On account of this restriction, certain portion of sanctioned sale component BUA would remain unutilisable and the question arises as to what needs to be done with the same. The distribution of sale component BUA now sanctioned to Defendant No.1 vide LOI dated 27 May 2024 would be as under: Sanctioned Sale Component BUA as per LOI dated 27.5.2024 1,91,625.60 BUA utilised in construction of Towers-A and B 49,421.87 BUA utilised in construction of ‘The 7145.00 Page Nos. 160 of 170 Imperial Edge’ BUA permitted to be utilised for construction of Tower-C 38,581.64 BUA remaining unutilised 96,476.69

235. There is no doubt to the position that the sale component BUA of 1,91,625.60 sq.mtrs. has been sanctioned to the Defendant No.1-Developer on account of fulfillment of obligation of construction of rehab tenements or PAP tenements in both Tardeo, as well as Wadala schemes. Defendant No.1 has either already constructed such rehab and PAP tenements or is going to construct the same.

236. As observed above, the restriction for carrying out construction contrary to the disclosure would apply only to ‘the said property’ and not to the balance portion of the ‘larger property’. It appears that Defendant Nos.[1] to 4 have proposed construction of a new building named ‘Town House’ which falls outside the boundaries of the ‘said property’. Therefore, subject to the restriction of not attaching the ‘Town House’ building to the podium or any part of Towers-A, B and C buildings, there can be no restriction on the Defendant-Developers utilising the balance sale component BUA for construction of ‘Town House’ building. If any sale component FSI still remains unconsumed, Defendant Nos.[1] to 4 can exercise the option of securing TDR in respect thereof in terms of Clause-3.[9] of Appendix-IV of DCR, 1991 which provides thus: 3.[9] Notwithstanding the provisions in 3.[8] above, on account of constraints such as height restrictions, uneconomical site conditions, etc; if the full 2.[5] FSI cannot be used on the same site, TDR may be allowed as may be necessary even without consuming FSI upto 2.[5] on the same site. However, TDR may be allowed only when the frame work for one complete building Page Nos. 161 of 170 in rehab component is constructed or when 10% of the rehab component has been constructed on site and the said TDR will not exceed 50 percent of the construction of rehab component at any point of time till the total rehab component has been completed. On completion of the total rehab component balance TDR will be allowed. There appears to be similar provision under Clause 3.[9] of Regulation 33(10)(VIII) of DCPR 2034, which reads thus: 3.[9] Notwithstanding the provisions in 3.[8] above, the slum dweller society/NGO/Developer undertaking the scheme may opt to claim TDR in lieu of sale component available for the scheme, on account of constraints such as height restrictions, uneconomical site conditions, etc.; if the full permissible FSI cannot be used on the same site, TDR may be allowed as may be necessary without consuming permissible FSI on the same site. However, TDR may be allowed only when the frame work for one complete building in rehab component is constructed or when 10% of the rehab component has been constructed on site and the said TDR will not exceed 50 percent of the construction of rehab component at any point of time till the total rehab component has been completed. On completion of the total rehab component balance TDR will be allowed.

237. It is sought to be contended on behalf of Defendant- Developers that TDR can be allowed only when eventualities of constraints such as height restrictions or uneconomical sight conditions occur. That such eventualities are not present in the instant case and that therefore TDR cannot be allowed in respect of balance unutilised sale component BUA. I am unable to agree. Clause-3.[9] provides for indicative or inclusive list of eventualities in which TDR can be allowed. Thus, height restrictions or uneconomical sight conditions are not the only two eventualities in which TDR can be allowed. Clause-3.[9] also uses the word ‘etc.’ after enumerating the two eventualities indicating thereby that the list of eventualities is not exhaustive. Thus, TDR would ideally be allowed in the event the developer is not permitted to use all the sanctioned BUA. In the present case, this Court is restraining Defendant-Developers from using BUA in excess of 38,581.64 sq.mtrs Page Nos. 162 of 170 and therefore Defendant No.1 would be entitled to secure TDR in respect of the balance unutilised sale component BUA. This arrangement would not cause any prejudice to Defendants-developers, who can utilise the TDR in some other project or monetise the same for recouping the cost of construction of rehab/PAP tenements.

238. The submission raised on behalf of Defendants-Developers that exercising option of securing TDR would render the scheme unviable/unworkable on account of developers’ inability to recover compensation envisaged under the scheme for construction of rehab component does not appeal to the Court. Firstly, Defendant No.1 is the creator of the situation that it is facing. This has already been discussed in the preceding paragraphs. Secondly, the alleged inability of the Defendant-developers to recoup the cost of construction of rehab tenements cannot be a ground for permitting them to violate the disclosures made to the flat purchasers of Towers-A and B. Defendants- Developers have opted for clubbing of the two schemes and this option is not exercised by way of charity. Clubbing of schemes has resulted in a bonanza for efendant-Developers, who have conveniently shifted PAP tenements at Wadala and sale component BUA at Tardeo. Thus, in lieu of constructing PAP tenements in less affluent locality of Wadala, Defendant-developers have secured sale component BUA to be constructed at affluent locality of Tardeo. Thirdly, it is otherwise not factually possible to accept the contention of inability to recoup cost of construction of rehab/PAP tenements at Wadala by utilisation of TDR at some other site or by monetisation thereof. Defendant Nos. 1 to 4 are professional developers, fully equipped to make use of TDR in best possible manner. What they may loose on account of securing is TDR is loss of opportunity of earning huge profits by selling the sale component Page Nos. 163 of 170 BUA at Tardeo. They are seeking to profiteer at the cost of existing flat purchasers of Towers A and B. They have already milked profits in the slum scheme by constructing in far excess than the initially planned development. As against only three saleable residential buildings, they have already constructed three and are permitted to construct two more. Possible loss of opportunity to make further profits in the project cannot be a reason for encroaching upon the rights of the flat purchasers. Fourthly, if Defendant Nos. 1 to 4 do not desire to procure TDR, they can apply to SRA for shifting back the sale component area at Wadala and construct PAP tenements at Tardeo if the same is feasible. Thus, there are variety of options available for the Defendant-Developers for dealing with the balance unutilised sale component BUA and mere factum of some BUA remaining unutilised cannot be a reason for permitting them to construct contrary to the disclosure made in 2009 layout plan.

APPOINTMENT OF COURT RECEIVER FOR CLUB HOUSE AND PODIUM

239. Plaintiffs have prayed for appointment of Court Receiver in respect of the club house, podium levels-5, 6 and 8 and refugee areas in the building and for their appointment as agents of the Court Receiver. The prayer for appointment of Court Receiver qua refugee areas is essentially aimed at preventing proposed construction of additional residential flats at 16th, 23rd, 31st, 38th and 45th floors of Towers-A and B. Similarly, the prayer for appointment of Court Receiver in respect of additional construction at podium levels 5, 6 and 8 are aimed at preventing Defendant Nos.[1] to 4 from carrying out any additional construction therein. It has been clarified on behalf of Defendant Nos.[1] to 4 that they shall not carry out any construction within any part of Page Nos. 164 of 170 structure of Towers-A and B without the consent of the Condominium. In that view of the matter, prayer for appointment of Court Receiver qua podium levels and refugee areas need not be considered.

240. So far as prayer for appointment of Court Receiver in respect of Club House is concerned, in my view, no interim relief deserves to be granted in favour of plaintiffs at this stage. The part Occupancy Certificate in respect of Towers-A and B was granted on 31 December 2009 and full occupancy Certificate is granted on 16 October 2014. The Club House is being operated by the contesting defendants for last several years. Plaintiffs and other Condominium members have been making use of the club house by paying membership fees. Defendant Nos.[1] to 4 are not preventing any Condominium members, including plaintiffs, from making use of the Club House. In that view of the matter, prayer for appointment of a Court Receiver in respect of a Club House need not be considered at this stage. However, in the event any obstruction is made to access or use by the plaintiffs, they would be at liberty to file appropriate application for claiming reliefs in that regard. Therefore, it would be prudent to maintain the status quo prevailing for the last several years during pendency of the suit.

241. I am therefore not inclined to grant the relief of appointment of Court Receiver in respect of Club house, podium levels or refugee areas. DEVELOPERS’ OBJECTION OF DELAY

242. One of the defences raised by Defendant Nos.[1] to 4 for opposing grant of temporary injunction in Plaintiffs’ favour is delay in Page Nos. 165 of 170 filing the Suit and in applying for injunction. It is contended that Defendant No.1 constructed the building ‘Imperial Edge’ in pursuance of layout plan of 2014 and completed the same by procuring OC on 20 October 2020. It is contended that plaintiffs never objected to construction of building ‘Imperial Edge’ and cannot now be permitted to file the present suit or injunction by relying on provisions of Sections 7 and 7A of MOFA. In my view, however, the objection of delay sought to be raised on behalf of Defendant Nos.[1] to 4 is clearly misconceived. I have already held that plaintiffs cannot object to construction outside the boundaries of the ‘said property’ and therefore non-raising of objection to construction of the building ‘Imperial Edge’ cannot be treated as delay in filing the suit. The proposed construction is undertaken by Defendant Nos.[1] to 4 on the strength of LOI dated 27 May 2024 and layout plan dated 24 July 2024. Plaintiffs were not contemporaneously made aware about issuance of the said LOI and layout plan. They procured information about the same through correspondence made under Right to Information Act, 2005. Actual construction activity has not commenced at the site. In my view, therefore the suit has been filed with the necessary alacrity, and the relief of temporary injunction cannot be denied to the Plaintiffs on the baseless objection of delay raised by Defendant Nos.[1] to 4. CONCLUSIONS

243. Plaintiffs thus have made out a strong prima facie case for grant of injunction to restrain Defendant Nos.[1] to 4 from putting up any construction in the ‘said property’ exceeding BUA of 38,581.64 sq.mtrs. They have however not made out prima facie case to restrain Defendant Nos.[1] to 4 from putting up ‘any construction’ in larger property or the Page Nos. 166 of 170 said property by utilising sale component BUA vide LOI dated 27 May 2024 or layout plan dated 24 July 2024. Therefore, Defendant Nos.[1] to 4 can be permitted to construct Tower-C in the said property up to potential of 38,581.64 sq.mtrs only. Plaintiffs have also made out a prima facie case to restrain defendant Nos.[1] to 4 from attaching, in any manner, the building ‘Townhouse’ (Wing-D) to any part of, and particularly to the podium of Towers-A, B and C. Defendant Nos.[1] to 4 can construct the building ‘Town House’ by utilising the sanctioned sale component BUA vide LOI dated 27 May 2024 without attaching the same either to the podium or any part of Towers-A, B and C. The balance sale component BUA, which cannot be utilised in the said property or in the larger property, can be used by Defendant Nos.[1] to 4 by securing TDR therefor from SRA. Defendant Nos.[1] to 4 have already made a statement for not carrying out any construction in Towers-A and B in pursuance of the LOI dated 27 May 2024 or layout plan dated 24 July 2024. So far as club house is concerned, no prima facie case is made out by the Plaintiffs for grant of any temporary injunction for appointment of Court Receiver.

244. Plaintiffs would suffer irreparable loss if injunction restraining Defendant Nos.[1] to 4 from utilising BUA beyond 38,581.64 sq. mtrs for construction of Tower C is not granted. If defendants are permitted to carry out construction contrary to the disclosure made in 2009 plan, the action cannot be reversed as equities would be created by selling the flats to third party flat purchasers. Mere seeking of prayer for damages of Rs. 500 crores by Plaintiffs in the suit cannot be a ground for permitting Defendant Nos. 1 to 4 to proceed with all the proposed construction. Also, mere creation of alleged mortgage in favour of Page Nos. 167 of 170 Catalyst Trusteeship Ltd by Defendant Nos. 1 to 4 cannot be a ground for permitting them to construct in violation of disclosures.

245. On the other hand, no serious loss or prejudice would be caused to Defendant Nos.[1] to 4 if their proposed activity construction of Tower-C is restricted to BUA of 38,581.64 sq.mtrs. The proposed action of Defendant Nos.[1] to 4 to carry out further construction by utilising massive sale component BUA of 1,91,625.60 sq.mtrs. is nothing but encashing of an opportunity created on account of delay in completion of slum scheme. Therefore, no loss or prejudice would be caused to Defendant Nos.[1] to 4 if such opportunity of profiteering, due to their own wrong, is delayed till decision of the suit. Afterall, by utilising BUA of 38,581.64 sq.mtrs, Defendant Nos.[1] to 4 can still construct a huge structure which is apparent from comparison of BUA of only 49,421.sq.mtrs in Towers-A and B. The Defendant-Developers would thus be able to put up construction of Tower C with BUA equivalent to 80% of Towers-A and B. Additionally, they are also permitted to construct building ‘Town House’ or any other structure within balance portion of larger property (except the ‘said property’). They can also either secure TDR for balance sale component BUA or shift the same to Wadala scheme (where it originally emanated from), if permissible. This is a reason why the Court believes that no serious loss or prejudice would be caused to the defendant-developers if they are restricted from constructing Tower-C in excess of BUA 38,581.64 sq.mtrs. Therefore, balance of convenience is clearly tilted in favour of the plaintiffs and against Defendant Nos. 1 to 4.

246. Plaintiffs have thus made out a case for grant of partial injunctive reliefs, as discussed above, during pendency of the suit. Page Nos. 168 of 170 ORDER

247. The Application filed by the Plaintiffs for temporary injunction accordingly succeeds partly, and I proceed to pass the following order:

(i) During pendency of the suit, there shall be temporary injunction against Defendant Nos.[1] to 4 from carrying out any construction within the ‘said property’ (as identified in the judgment), except construction of Tower-C at the disclosed location by utilising maximum sale component BUA of upto 38,581.64 sq.mtrs.

(ii) Accordingly, Defendant Nos.[1] to 4 are restrained from constructing Tower-C building by exceeding sale component BUA of 38,581.64 sq.mtrs.

(iii) During pendency of the Suit, Defendant Nos. 1 to 4 shall not carry out any construction or make any additions to or alterations in buildings of Towers-A and B without the consent of flat purchasers thereof.

(iv) During pendency of the Suit, Defendant Nos.[1] to 4, though entitled to construct the building ‘Town House’ (Wing-D) or any other structure in balance portion of the ‘larger property’ (excepting the ‘said property’), they shall not attach the such building(s)/structure(s) to the podium or any part of Towers-A, B and C of ‘The Imperial’ Building. Page Nos. 169 of 170

(v) Plaintiffs’ prayer for appointment of Court Receiver in respect of the Club House and podium levels is rejected.

(vi) Defendant Nos. 1 to 4 shall be at liberty to apply to SRA for issuance of Development Rights Certificate in respect of the balance unutilized sale component BUA.

(vii) Construction of Tower-C in the ‘said property’ or any other building/structure in the ‘larger property’ by Defendant Nos.[1] to 4 shall be subject to final outcome of the Suit and unit purchasers therein shall be informed by Defendant Nos.[1] to 4 about this condition while effecting sale of units therein.

248. With the above directions, the Interim Application (L) No.25478/2025 is partly allowed and disposed of. [SANDEEP V. MARNE, J.]

249. After the judgment is pronounced, the learned counsel appearing for Defendant Nos.[1] to 4 would pray for stay of the direction for capping of construction of Tower-C building upto maximum sale component BUA of 38,581.64 sq.mtrs. The request is opposed by the learned Senior Advocate appearing for the Plaintiff. Considering the nature of findings recorded in the judgment, so also the fact that construction of Tower-C building is yet to commence, I do not find any need to stay the said direction. The request is accordingly rejected. [SANDEEP V. MARNE, J.]