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CIVIL APPELLATE JURISDICTION
SECOND APPEAL NO. 223 OF 2019
Shri. Vitthal Laxman Patil
Thane
…Appellant
(Ori. Plaintiff No.1)
(Resp. Nos. 1 & 2 Original Deft.
Nos. 1 & 2 & Resp.3, Original
Bagkar, Ms. Mamta Magare i/by Bagkar & Co. for Appellant.
Mr. Y.S. Jahagirdar, Senior Counsel a/w Mr. Sanjay Borkar, Ms. Rashmi Telang i/by Mr. Jayesh M. Joshi for Respondent No.1.
Mr. Mandar P. Patil a/w Mr. Anurag H. Jadhav, Advocate for
Intervenor.
Mr. Ajit Pitale a/w Mr. Siddharth Pitale for Respondent No.2- TMC.
JUDGMENT
1. Heard Mr. Ram Apte, learned Senior Counsel a/w Mr. Vaibhav Sugdare, learned Counsel appearing for the Appellant, Mr. Jahagirdar, learned Senior Counsel along with Mr. Sanjay Borkar, learned Counsel appearing for Respondent No.1, Mr. Ajit Pitale, learned Counsel appearing for the Respondent No.2 and Mr. Mandar Patil, learned Counsel appearing for the Intervenor. Dusane/Vaibhav
2. The challenge in this Second Appeal is to the Judgment and Decree dated 20th December 2014 passed by the learned 5th Joint Additional Civil Judge, Senior Division, (T.M.C.), Thane in Regular Civil Suit No. 376 of 2010 as well as to the Judgment and Decree dated 14th March 2016 passed by learned Principal District Judge, Thane in Regular Civil Appeal No.2 of 2015.
3. In the said Regular Civil Suit No.376 of 2010, the Appellants i.e. the Plaintiffs inter alia sought following reliefs: “a. this Hon'ble Court be pleased to hold and declare that the Defendant/ Promoter is liable and duty bound to discharge his obligations under the provisions of the Maharashtra Ownership of Flats Act, 1963 and the Rules made thereunder towards the Plaintiffs; b. this Hon'ble Court be further pleased to hold and declare that the Defendant No.1 by causing the unwarranted delay in formation of the operative housing society/ies or Apex Body co- or limited company, in respect of the buildings of the said Kores Nakshatra Complex, has committed breach of the provisions of Maharashtra Ownership of Flats Act, 1963. c. this Hon'ble Court be pleased to hold and declare that the acts of the Defendant No.2 in sanctioning the plans of construction of the additional building No.16 in the said Complex standing on lands bearing Survey No.146/1(P), 147/1B, 149/1B, 149/3, 150/6, 152/P, lying being and situated at Pokharan Road No.1, Revenue Village Panchapakhadi, Thane, or any portion thereof, without giving an opportunity to the Plaintiffs of being heard and without following due process of law, are bad, ultra-vires and illegal, and of no avail to the Defendant No.1; d. this Hon'ble Court be pleased to direct and decree the Defendant No.1 to discharge their obligations by forming and registering the co-operative housing society/ies or co- limited company or apex body, of the buildings of the said Kores Nakshatra Complex and convey the property in favour of such Co-operative Society/ies or limited company or apex body, as the case may be; e. this Hon'ble Court be pleased to direct and decree the Defendant No.2 to cancel and revoke the plans and specifications sanctioned / approved by them in favour of the Defendant No.1 for construction of the additional building No.16 or any other constructions in the said Complex, standing on lands bearing Survey No.146/1(P), 147/1B, 149/1B, 149/3, 150/6, 152/P, lying being and situated at Pokharan Road No.1, Revenue Village Panchapakhadi, Thane, or any portion thereof; f. the Defendant No.1, their agents, servants, employees, contractors and/or any other person/s claiming through or under them be restrained by an Order of permanent perpetual injunction from commencing and/or carrying out the construction of the building No.16 or any other constructions in the said Complex or any portion thereof, either as per the said plans and/or specifications sanctioned by the Defendant No.2, and/or creating any third party interest with respect to any of the premises of the said additional Building in the said Complex;” (Emphasis added)
4. The said Suit has been dismissed by the impugned Judgment and Decree dated 20th December 2014. The Civil Appeal No.2 of 2015 filed challenging the same has also been dismissed, by the impugned Judgment and Decree dated 14th March 2016.
5. The substantial question of law framed in this Second Appeal is set out in paragraph 3 of the order of learned Single Judge dated 25th January 2019 which is reproduced hereinbelow for ready reference:- Whether, after making disclosure to flat purchasers of a sanctioned layout plan showing a certain number of buildings and open and amenity spaces including Recreation Ground ('RG') and their locations as per the requirements of Maharashtra Ownership Flats Act (“MOFA”), it is permissible to a promoter to construct an additional building on the RG area shown in the layout plan without seeking consent from the flat purchasers?
6. The learned Single Judge by Order dated 25th January 2019 passed in this Second Appeal set aside the Order passed by the learned Trial Court dismissing the Suit as well as the Order passed by the learned Appellate Court dismissing the Appeal and the Suit has been remanded back to the Trial Court to the extent they relate to the reliefs claimed against Respondent No.1- Defendant No.1- Promoter for fresh hearing in accordance with law on the issue and in the light of law discussed in the said Order.
7. The said Order of the learned Single Judge dated 25th January 2019 passed in this Second Appeal has been challenged by the present Respondent No.1 before the Supreme Court by filing Civil Appeal No.4801 of 2022. The said Appeal has been partly allowed by the Supreme Court by order dated 19th July 2022. The relevant portion of the Supreme Court Order is in paragraph Nos. 8 to 10, which reads as under:- “(8) After having heard the learned senior counsel for the appellant and learned counsel for the first respondent, we are of the view that it may not be necessary for the matter to be remanded back. We notice that the suit is filed in 2010. The appellant would point out that construction of the additional building has been completed up to the 5th floor. (9) Learned senior counsel for the appellant would point out that the duty of disclosure flows from Sections 3 and 4 of the 1963 Act. He submits that as to whether such duty has been discharged, should, primarily, be gathered from the terms of the agreement and a perusal of the agreement would make it clear that the appellant has discharged the duty of disclosure as per the requirement. He has also a case that the case that is found by the High Court is not what was argued before the trial Court or the appellate Court.” (10) We would think that leaving open the contentions of the parties, but not disturbing what is found in paragraph 17, the High Court will undertake the task of deciding the second appeal without a further remit to the trial Court. To the said extent, the impugned judgment will stand modified. The appeal is allowed to the said extent. We request the High Court, since the matter is arising out of the Suit of the year 2010, to dispose of the second appeal as early as possible. It is required to be noted that although the Supreme Court has held that the remand of the matter to the learned Trial Court is not necessary and to that extent, the judgment of the learned Single Judge stands modified, it is specifically held that, although contentions of the parties are kept open, what has been held by the High Court in paragraph No.17 has not been disturbed. Thus, paragraph No.17 of the Order passed by the learned Single Judge is confirmed by the Supreme Court. The said paragraph No.17 reads as under: “17. The lower appellate court appears to have been swayed by the fact that there was no documentary evidence in support of the plaintiffs' case that they had paid premium price for purchase of their flat relying on the promise of additional recreational space. The court observed that this was not proved; besides, the plaintiffs flat was 30 meter away from building No.16 and there was no obstruction (?) to his view of RG No.2. That is completely besides the point. Whether he paid any particular premium or whether he had any particular view is immaterial. What is material is that the purchaser agreed to purchase the flat on the basis of the promoter's disclosures. These were: there would be 15 buildings in the proposed layout (may be with the possibility of an additional construction by use of FSI/TDR); and there would be large recreational spaces (RG Nos.[1] and 2) located at the places indicated in the layout. On these disclosures, the purchaser thought it worth his while to purchase the flat. If that is so, considering the duty of disclosure which includes duty to conform to such disclosure on the part of the promoter, the question to be considered was whether the purchaser could now be told that the open recreational space of RG No.2 would be constructed upon and there would be 4 RGs at 4 different locations (may be with an overall additional area).”
8. In the above background, I have heard the submissions of the parties, after remand, on earlier dates.
9. Mr. Ram Apte, learned Senior Counsel a/w Mr. Vaibhav Sugdare, learned Counsel for the Appellant raised following contentions:-
(i) Learned Counsel pointed out paragraph Nos. 11, 17 and 19 of the Judgment of the learned Single Judge as also the Supreme Court Judgment particularly paragraph Nos. 7 and 10 of the same.
(ii) Learned Counsel pointed out brochure (page 79 of compilation) and shown the position of Building No. 15 and also shown position of R.G.-2. He submitted that Building No.16 is not shown in the said brochure. He pointed out copy of plan sanctioned layout (page 78 of the compilation) and submitted that this sanctioned plan has been shown to the flat purchasers. He submitted that said sanctioned plan also do not show construction of building No.16. He also pointed out letter dated 21st November 2009 of Thane Municipal Corporation, Thane, (page 72 of compilation) wherein it is specifically stated that the plans cannot be sanctioned for building No.16 since as per the sanctioned layout, the said portion has been shown as R.G. He also pointed out the proposal dated 1st December 2009 (pages 72-73 of compilation) submitted by the Architect of the Respondent No.1. He has also pointed out Occupation Certificate on pages 74 to 77 inter alia regarding the Occupation Certificate for building Nos. 14 and 15. Learned Counsel pointed out oral evidence of PW-1 and DW-1 and more particularly their cross-examination.
(iii) Learned Counsel further submitted that in view of the law laid down by the Supreme Court in the case of Jayantilal Investments v. Madhuvihar Co-operative Housing Society[1] and more particularly paragraph 15 of the said judgment submitted that brochure is a disclosure. In any case learned Counsel submitted that the said R.G. is also part of sanctioned plan/sanctioned layout and therefore the same can not be changed without the consent of the flat purchasers.
(iv) The learned Counsel relied on the following Judgments:-
1. Eternia Co- Operative Housing Soc. Ltd. Vs.
2. Jayantilal Investments Vs Madhuvihar Co op Hsg society and others.[3]
3. Madhuvihar Co-Op Hsg Society and others Vs. M/s Jayantilal Investments Company & Ors.[4]
4. Malad Kokil Co-Operative Housing Society Ltd. & Anr. Vs. Modern Construction Co. Ltd. & Ors.[5]
5. M/s. Dosti Corporation Vs. Sea Flama Cooperative Housing Society Ltd. & Ors.[6]
(v) Learned Counsel submitted that as per the relevant provision of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 (“MOFA”) as interpreted by this Court and the Supreme Court, there can not be any change in the sanctioned plan/sanctioned layout as disclosed to the flat purchasers without the consent of the flat purchasers. He therefore submitted that substantial question of law be answered in favour of the Appellants and the Second Appeal be allowed.
10. At this stage, it is required to be noted that the Apex Society i.e. Kores Nakshatra CHS Association Ltd. i.e. Federation of Fine Co-op. Housing Societies consisting total 15 buildings having 420 flats filed Civil Application No.178 of 2017 seeking intervention. It 4 2010(6) Bom.C.R.517 to 537 5 2013(2) Bom.C.R. 414 6 2016 (5) Mh.L.J 102-136 is submitted by Mr. Mandar Patil, learned Counsel for the Intervenor that when the Suit was filed, the Society was not formed and therefore the Society could not file the Suit. The said Apex Society has been formed on 11th March 2013. It is submitted by the learned Counsel for the Intervenor that building No.16 was not part of original sanctioned plan and therefore, it is incumbent for the Respondent No.1 to obtain written consents from the flat purchasers. It is further submitted that the construction of building No.16 is in the garden plot to which all the members of 15 buildings are entitled to. Thus, it is submitted that the Intervenor- Apex Society also supports the Appellant.
11. Mr. Jahagirdar, learned Senior Counsel along with Mr. Borkar, learned Counsel raised following contentions:-
(i) Learned Counsel pointed out findings of the learned Appellate
Court recorded in paragraphs 21 to 25. He pointed out the question of law, which has been referred to in paragraph 3 of the Order of the learned Single Judge dated 25th January 2019. He pointed out the Plaint, which has been annexed at pages 85 and prayer clauses at page 99. He pointed out agreement executed between the Appellant and the Respondent and particularly page 3 of the same. Learned Counsel submitted that thus necessary disclosure has been made. Learned Counsel submitted that what has been sold to the Appellant is the only flat No.701, admeasuring 721 sq.ft. He pointed out Clause No.1 on page 5 of the Agreement. He further pointed out Clause No.2 (a), (b), (c) and (d) of the agreement and submitted that complete disclosure as well as various layout plans are also disclosed. He submitted that thus the flat purchaser have given informed consent. He pointed out Sub- Clause (f) of Clause (7) of the Agreement. He pointed out page 79 and submitted that even layout has been disclosed. He also pointed out that in sanctioned plan on page 78, future expansion is mentioned. He submitted that thus there is full disclosure and the consent taken for future development as more particularly set out in the agreement.
(ii) Learned Counsel pointed out Section 7(a) of MOFA and submitted that the requirement is that Sections 3 and 4 is to be followed. He submitted that when the Housing project contemplates several buildings, housing project is required to be allowed to exploit entire potential.
(iii) Learned Counsel submitted that the reliance placed by the
Appellant on various Judgments which are with respect to only one building and not multiple buildings as in the present case. He submitted that in this particular case, recreational ground is only shifted and the same has not been reduced, but it has been increased. He submitted that the sum and substance of the entire legal position is that F.S.I. cannot be violated and minimum area of R.G. cannot be changed. He pointed out paragraph Nos. 10, 22(3), 30 to 35 of the Judgment of learned Single Judge in the case of Madhuvihar CHS (supra). Learned Counsel submitted that in Madhuvihar CHS (supra), it has been held that the concerned project is consisting of 7 wings of single building. He submitted that admittedly in the present case, the project consists of several buildings, 15 buildings are already constructed and proposed building No.16 was being constructed when the suit was filed.
(iv) Learned Counsel also pointed out paragraph Nos. 15, 20, 41
(v) Learned Counsel also relied on Judgment of this Court in the case of Kalpita Enclave Co-operative Housing Society Ltd. Vs. Kiran Builders Pvt. Ltd.[7] It is submitted by learned Senior Counsel that Section 7(A) has been introduced in view of the Judgment of Kalpita (supra) and therefore, Section 7(A) is applicable to the present case.
(vi) Learned Counsel pointed out letter dated 22nd April 2010 addressed by Deputy Director of Town Planning of the Thane Municipal Corporation, Thane to the Advocate of the Society. By relying on said letter, it is the submission of learned Senior Counsel for the Respondent that there is no curtailment of the R.G. area to be allotted to the Society. He submitted that said letter dated 22nd April 2010 makes it clear that there is no curtailment in R.G. area, the same is being relocated and in fact the R.G. area is increased. He submitted that various clauses of the agreement specifically show that there is complete disclosure and consent is taken for the proposed construction. It is submitted by learned Senior Counsel that as the R.G. area is increased and what is done is only relocation of R.G. area, no consent is required. In any case even if consent is required, the same is also taken, as per the relevant clauses of the agreement. 7 (1987) 1 Bom. CR 355
(vii) It is submitted that both the Courts have recorded finding of fact. Thus, it is submitted that no interference in the impugned Judgments are required.
12. In view of the rival submissions and in the light of observations of the Supreme Court as contained in the Order dated 19th July 2022 passed in Civil Appeal No. 4801 of 2022, remanding back the matter to this Court, it is necessary to consider following substantial question of law framed by learned Single Judge in this Second Appeal. “Whether, after making disclosure to flat purchasers of a sanctioned layout plan showing a certain number of buildings and open and amenity spaces including Recreation Ground ('RG') and their locations as per the requirements of Maharashtra Ownership Flats Act ("MOFA"), it is permissible to a promoter to construct an additional building on the RG area shown in the layout plan without seeking consent from the flat purchasers?”
13. For consideration of the question of law raised in this Second Appeal, certain provisions of the MOFA and more particularly Sections 3, 4, 4A, 7, 7A, 10 and 11 are relevant. The relevant portion of these Sections are reproduced hereinbelow: “3. General liabilities of promoter (1) Notwithstanding anything in any other law, a who intends to construct or constructs a block or building of flats, all or some of which are 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 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, 3[and having been duly entered in the Property card or extract of Village Forms 'Tl 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 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.].
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 4{the Registration xvi of Act, 1908 (hereinafter in this section referred to as "the Registration Act")]
1908. 5[and such agreement shall be in the prescribed form.]. '[(lA) 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 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 (b) copies of documents,-
(i) the certificate of an Authority-at-law or Advocate under clause (a) of sub-section (2) of section 3;:
(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 subsection (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 subsection (1), at any time before the commencement of the Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) (Amendment and of Validating Provisions) Act, 1983, and such agreement was not presented for
1984. 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 subsection, 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 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.]. [4A. Effect of non-registration of agreement required to be registered under Section 4 Where an agreement for sale entered into under sub-section (1) of section 4, whether entered into before or after the commencement of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) (Amendment and Validating Provisions) Act, 1983, remains unregistered for any reason, then notwithstanding anything contained in any law for the time being in force, or in any judgment, decree or order of any Court, it may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1963, or as evidence of part performance of a contract for the purposes of Section 53A of the Transfer of Property Act, 1882, or as evidence of any collateral transaction not required to be effected by registered instrument.].
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 person 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 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, 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 section 18 of the Maharashtra Housing and Area Development Act, 1976, 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.]. 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 (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 had 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 expressions "constructed and completed in accordance with the plans and specifications 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 judgment, decree or order of any Court, be deemed never to apply or to have applied in respect of the construction of any other additional buildings 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 bye-laws or Development Control Rules made under any law for the time being in force.”
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 co-operative society or a company have taken flats, the promoter shall within the prescribed period submit an application to the Registrar for registration of the organisation of persons who take the flats as a 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 cooperative 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 provided in the Maharashtra Co-operative Societies Act, 1960 (Mah. Act 24 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, Assistant Registrar concerned, to register the society: Provided further that, no such direction to register any society under the preceding proviso shall be given to the District Deputy Registrar, Deputy Registrar or, as the case may be, Assistant Registrar, by the Competent 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 or buildings is constructed or to be constructed and the promoter submits such property to the provisions of the Maharashtra Apartment Ownership Act, 1970 (Mah. Act 15 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 Co-operative Societies Act, 1960 (Mah. Act 34 of 1961), accordingly; and in such cases, it shall not be lawful to form any co-operative society or company.]
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 flat-takers [or apartment owners] his right, title and interest in the land and building, and execute all relevant documents therefor in 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 subsection (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 (Act 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 (Act 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 (Act 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’
14. It is also important to note relevant rules framed under MOFA namely Maharashtra Ownership Flats (Regulation of the Promotion of Construction Etc), Rules 1964 (“MOFA Rules”). The relevant rules are as follows:
3. Manner of making disclosure (1) A promoter for the purposes of making disclosure of any document referred to in section or prescribed thereunder shall produce the original of such document before the person intending to take or taking lone or more flats. The promoter shall display or keep all the documents, plans or specifications (or copies thereof) referred to in clauses (a), (b) and (c) of sub-section (2) of the said section at the site and permit inspection thereof;. Such person may ask the promoter all relevant questions for seeking further information or clarification in respect of any document of matter required to be disclosed, produced or furnished by or under the provisions of the Act; and the promoter shall be legally bound to answer all such questions to the best of his knowledge and belief. (2) The promoter while making disclosure of the outgoings as required by clause (j) of sub-section (2) of section 3 shall state the basis on which any estimated figures or other, information is given. (3) The promoter shall, when the flats are advertised for sale, disclose inter alia in the advertisement the particulars as required by sub-clauses (i) to (iv) (both inclusive) of clause (m) of sub-section (2) of section 3.
4. True copies of certain documents to be given A promoter shall, on demand and payment of a reasonable charge therefor, give to any person intending to take or taking one or more flats 3 true copies of the following documents, namely:- (a) all documents of title relating to the land on which the [flats] are constructed or are to be constructed, which are in the promoter's possession or power b) the certificate by an Attorney-at-law or Advocate referred to in clause (a) of sub-section (2) of section 3;
(c) All documents relating to encumbrances (if any) on such land, including any right, title, interest or claim, of any party in or over such land;
(d) the plans and specifications of the building built or to be built on the land referred to in clause (c) of sub-section (2) of section 3; (e) a list of fixtures, fittings and amenities (including the provision for one or more lifts) provided or to be provided for the flat; (f) a list referred to in clause (g) of sub-section (2) of section 3; (g) a list of all outgoings referred to in clause (i) of subsection (2) of section 3 and the basis on which any estimated figures or other information is given to the person intending to take or taking the flat.
5. Particulars to be contained in agreement The promoter shall before accepting any advance payment or deposit, enter into an agreement with the flat purchaser in Form V containing the particulars specified in clause (a) of sub-section (1A) of section 4 and shall attach thereto the copies of the documents specified in clause (b) of the said sub-section (1A).
8. Period for submission of application for registration of cooperative society or company of Flat purchasers Where a co-operative society or a company of persons taking the flats is to be constituted, the promoter shall submit an application to the Registrar for registration of the cooperative society or the company as the case may be, within four months from the date on which the minimum number of persons required to form such organisation have taken flats. Where the apartment takers propose to submit the apartments to the provisions of the Maharashtra Apartment Ownership Act, 1970, by executing Declarations and Deeds of Apartments as required by that Act, the promoter shall inform the Registrar as defined in the Maharashtra Cooperative Societies Act, 1960, as soon as possible after the date on which all the apartment owners (being not less than five) have executed such Declaration and Deeds of Apartment.)
9. Period for conveyance of title of promoter to organisation of Flat purchasers If no period for conveying the title of the promoter to the organisation of the flat purchasers is agreed upon, the promoter shall (subject to his right to dispose of the remaining flats, if any) execute the conveyance within four months from the date on which co-operative society or the company is registered or, as the case may be, the association of flat takers is duly constituted. When a promoter has submitted his property to the provisions of the Maharashtra Apartment Ownership Act, 1970 by executing and registering a Declaration as required by section 2 of that Act, and no period for conveying the title of the promoter in respect of an apartment to each apartment-taker is agreed upon, the promoter shall execute the conveyance or deed of apartment in favour of each apartment-taker within four months from the date the apartment-taker has entered into possession of his apartment. The promoter shall file with the Competent Authority a copy of the conveyance executed by him under sub-section (1) of section 11 within a period of two months from the date of its execution.
15. It is also necessary to set out relevant portion of Form No.5 which is Model Form of Agreement to be entered into between the Promoter and Purchasers of flat as contained in MOFA Rules. The relevant part of the said Model Form of Agreement to be entered into between the Promoter and the Purchasers of flat is as follows:- [FORM V] Model Form of Agreement to be entered into between Promoter and Purchaser of Flat EXPLANATORY NOTES 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.
1. The Promoter shall construct the said building/s consisting of ground and upper floors on the said land in accordance with the plans designs, specifications approved by the concerned local authority and which have been seen and approved by the Flat Purchaser with only such variations and modifications as the Promoter may consider necessary or as may be required by the concerned local authority/the Government to be made in them or any of them: Provided that the Promoter shall have to obtain prior consent in writing to the flat purchaser in respect of such variations or modifications which may adversely affect the flat of the purchaser.
2. The Flat Purchaser hereby agrees to purchase from the Promoter and the Promoter hereby agrees to sell to the Flat Purchaser one flat No. of carpet area admeasuring area of balconies)on and marked Annexures D/Shop No. the 1. of the Type sq. metres (which is inclusive of the floor as shown in the Floor plan thereof hereto annexed in /covered/open Garage No. Building (hereinafter referred to as "the Flat") for the price of Rs. including Rs. being the proportionate price of the common areas and facilities appurtenant to the premises, the nature extent and description of the common/ limited common areas and facilities/limited common areas and facilities which are more particularly described in the Second Schedule hereunder written.
3. The Promoter hereby agrees to observe, perform and comply with all the terms, conditions, stipulations and restrictions if any, which may have been imposed by the concerned local authority at the time sanctioning the said plans or thereafter and shall, before handing over possession of the Flat to the Flat purchaser, obtain from the concerned local authority occupation and/or completion certificates in respect of the Flat.
4. The Promoter hereby declares that the Floor Space Index available in respect of the said land is …… square 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 utilised by the Promoter elsewhere, then the Promoter shall furnish to the Flat Purchaser all the detailed particulars in respect of such utilisation of 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.
5. In case the Promoter is acting as an agent of the Vendor/Lessor/Original Owner of the said land, then, the Promoter hereby agrees that he shall, before handing over possession of the Flat to the Flat Purchaser and in any event before execution of a conveyance/assignment of lease of the said land in favour of a corporate body to be formed by the purchasers of flats/shops/garages in the building to be constructed on the said land (hereinafter referred to as "the Society"/"the Limited Company") make full and true disclosure of the nature of his title to the said land as well as encumbrances, if any, including any right, title, interest or claim of any party in or over the said land, and shall, as far as practicable, ensure that the said land is free from all encumbrances and that the Vendor/Lessor/Original Owner/the Promoter has/have absolute, clear and marketable title to the said land so as to enable him to convey to the said Society/Limited Company such absolute, clear and marketable title on the execution of a conveyance/assignment of lease of the said land by the Promoter in favour of the said Society/Limited Company.
12. The Flat Purchaser along with other purchasers of flats in the building shall join in forming and registering the Society or a Limited Company to be known by such name as the Flat Purchaser may decide and for this purpose also from time to time sign and execute the application for registration and/or membership and other papers and documents necessary for the formation and the registration of the Society or Limited Company and for becoming a member, including the bye-laws of the proposed Society and duly fill in, sign and return to the Promoter within...... days of the same being forwarded by the Promoter to the Flat Purchaser, so as to enable Promoter to register the organisation of the Flat Purchaser under section 10 of the said Act within the time limit prescribed by rule 8 of the Maharashtra Ownership Flats (Regulation of the promotion of construction, Sale, Management and Transfer) Rule,
1964. No objection shall be taken by the Flat Purchaser if any changes or modifications are made in the draft bye-laws, or the Memorandum and/ or Articles of association, as may be required by the Registrar of Cooperative Societies or the Registrar of Companies, as the case may be, or any other Competent Authority.
13. Unless it is otherwise agreed to by and between the parties here to the Promoter shall, within four months of registration of the Society or Limited Company, as aforesaid cause to be transferred to the society or Limited Company all the right, title and the interest of the Vendor/Lessor/Original Owner/Promoter and/or the owners in the aliquot part of the said land together with the building/s by obtaining/or executing the necessary conveyance/'assignment of lease of the said land (or to the extent as may be permitted by the authorities) and the said building in favour of such Society or Limited Company, as the case may be such conveyance/¹ assignment of lease shall be in keeping with the terms and provisions of this Agreement.
20. Having contained in this Agreement is intended to be nor shall be construed as a grant, demise or assignment in law of the said Flats or of the said Plot and Building or any part thereof. The Flat Purchaser shall have no claim save and except in respect of the Flat hereby agreed to be sold to him and all open spaces, parking spaces, lobbies, staircases, terraces, recreation spaces etc., will remain the property of the Promoter until the said land and Building is transferred to the Society/Limited Company as hereinbefore mentioned.
22. The Flat Purchaser and/or the Promoter shall present this Agreement as well as the conveyance/'assignment of lease at the proper registration office within the time limit prescribed by the Registration Act and the Promoter will attend such office and admit execution thereof.] Second Schedule Above Referred to (Here set out the nature, extent and description of common areas and facilities/limited common areas and facilities.)
16. The above provisions of MOFA and MOFA Rules framed thereunder as well as Model Form of Agreement provided in MOFA Rules inter alia safeguards the rights of the flat purchasers in the following manner:-
(i) By making obligatory on the Promoter to make full and true disclosure;
(a) Of the nature of his title to the land; (b) 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) Of 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;
(ii) Mention 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;
(iii) Display or keep all the documents, plans or specifications referred under Section 3(2), (a), (b) and (c), at the site and permit inspection to the proposed flat purchasers;
(iv) While advertising the flat for sale, disclose the nature extent and description: (a) of common areas and facilities; and (b) of limited common areas and facilities, if any;
(v) Promoter before accepting advance payment or deposit to enter into agreement and agreement to be registered. (a) The agreement shall be in the prescribed form as mentioned in form V of the MOFA. (b) The agreement shall contain all the particulars, specifications and copies of documents mentioned under Section 4 clause (a) and (b) of MOFA.
(c) The agreement shall contain percentage of undivided interest in the common areas and facilities pertaining to the flat agreed to be sold.
(d) The agreement shall attach the copies of documents such as the plans and specifications of the flat as approved by the concerned authority.
(vi) Where an agreement for sale entered into under sub-section
(1) of section 4, remains unregistered for any reason, then notwithstanding anything contained in any law for the time being in force, or in any judgment, decree or order of any Court, it may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1963, or as evidence of part performance of a contract for the purposes of Section 53A of the Transfer of Property Act, 1882, or as evidence of any collateral transaction not required to be effected by registered instrument.
(vii) After the plans and specifications of the building, as approved by the local authority as aforesaid, are disclosed or furnished to the person who agrees to take one or more flats, the promoter shall not make. (a) 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; (b) Any other alterations or additions in the structure of the building without the previous consent of all the persons who have agreed to take flats; in such building.
(viii) The Promoter shall not apply in respect of the construction of any other additional buildings or structures constructed or to be constructed under a scheme or project of development in the layout without taking consent of the flat purchasers and the same shall be only after obtaining the approval of a local authority in accordance with the building rules or building bye-laws or Development Control Rules made under any law for the time being in force.
(ix) As soon as a minimum number of persons required to form a co-operative society have taken flats, the promoter shall within the prescribed period submit an application to the Registrar for registration of the organisation of persons who take the flats as a co-operative society 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. This shall not affect the right of the promoter to dispose of the remaining flats in accordance with the provisions of this Act.
(x) 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 Promoter’s right, title and interest in the land and building, and execute all relevant documents therefor in 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.
(xi) The Promoter shall construct the said building/s consisting of ground and upper floors on the said land in accordance with the plans designs, specifications approved by the concerned local authority and which have been seen and approved by the Flat Purchasers with only such variations and modifications as the Promoter may consider necessary or as may be required by the concerned local authority/the Government to be made in them or any of them. Provided that the Promoter shall have to obtain prior consent in writing of the flat purchasers in respect of such variations or modifications.
(xii) It is very important that the Promoter shall specifically mention in the flat purchaser’s Agreement the Floor Space Index available in respect of the concerned land 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 utilised by the Promoter elsewhere, then the Promoter shall furnish to the Flat Purchaser all the detailed particulars in respect of such utilisation of 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.
(xiii) Promoter to register the organisation of the Flat Purchaser under section 10 of the said Act within the time limit prescribed by rule 8 of the Maharashtra Ownership Flats (Regulation of the promotion of construction, Sale, Management and Transfer) Rule,
1964.
(xiv) Unless it is otherwise agreed the Promoter shall, within four months of registration of the Society or Limited Company, as aforesaid cause to be transferred to the society or Limited Company all the right, title and the interest of the Vendor/Lessor/Original Owner/Promoter and/or the owners in the aliquot part of the said land together with the building/s.
17. Section 7 and 7A of MOFA Act as well as relevant rules and format of the agreement to be entered into between the flat purchasers and developer have been considered by the Supreme Court in the case of Jayantilal (supra). The relevant paragraphs are paragraphs 15 to 19, which read as under:
(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 byelaws 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 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 proforma 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 Registrar for registration of the society within four months from the date 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-a-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. 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: “3. The promoter hereby agrees to observe, perform and comply with all the terms, conditions, stipulations and restrictions, if any, which may have been imposed by the local authority concerned at the time of sanctioning the said plans or thereafter and shall, before handing over possession of the flat to the flat purchaser, obtain from the local authority concerned occupation and/or completion certificates in respect of the flat.
4. The promoter hereby declares that the floor space index available in respect of the said land is … square 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 utilised by the promoter elsewhere, then the promoter shall furnish to the flat purchaser all the detailed particulars in respect of such utilisation of 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. The residual FAR (FSI) in the plot or the layout not consumed will be available to the promoter till the registration of the society. Whereas after the registration of the society the residual FAR (FSI), shall be available to the society.” (emphasis supplied)
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 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.” Thus, the Supreme Court in Jayantilal Investments (supra) has held that reading of Sections 3, 4, 7, 7-A, 10 and 11 of MOFA as well as Rules 3, 4, 5, 8 and 9 of MOFA Rules and agreement as prescribed under Form V and explanation note to said Form V, it is 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-a-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. 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 one-building scheme or multiple number of buildings scheme. The said 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 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.
18. Thus, it is mandatory that at the time of execution of the agreement with the flat purchasers the promoter is obliged statutorily to place before the flat purchasers the entire project/scheme, be it a one-building scheme or multiple number of buildings scheme. 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, etc. Thus, it is very clear that true and full disclosure is the obligation of the Promoter and binding nature of the consent, if any, given by the flat purchasers is required to be ascertained on the basis of disclosure made.
19. The Supreme Court in the case of Jayantilal Investments (supra) after considering the question of law and answering the same in paragraphs 15 to 19 as set out hereinabove remanded back the matter to the High Court. A learned Single Judge after remand, passed the Order in the said case between Madhuvihar CHS and Ors. Vs. Jayantilal Investments and Ors.8. The relevant portion of the said Judgment are paragraphs 42 to 47, which read as under: “42. In the present case, the scheme was floated in the year 1985, showing 7 wings. The building was completed in the year 1989 and the purchasers who had entered into agreement with the promoter were put in possession. In this respect, it would also be relevant to refer to condition No. 4 of the occupation certificate dated 12th April, 1989 issued by the Bombay Municipal Corporation, which reads thus: 8 2010 6 Bombay Cases Reporter 517 “That, the Co-operative Society shall be formed and registered within three months from the dale of issue hereof, or before B.C.C. whichever is earlier.”
43. That leaves us to the next question, as to whether the consent which is deemed to be given in the clauses of agreement would be a valid consent for the purposes of section 7 of the MOFA. The learned Counsel appearing for the promoter, relying on various clauses i.e. Clauses 1,8, 10, 11 12, 15, 17, 18, 38 and 51 of the agreement entered between the promoter and the flat owners, strenuously contends that there is implied consent for the additional construction.
44. Recently, after judgment of the Apex Court in the present case, considering import of the said judgment, the learned Single Judge of this Court, had an occasion to consider the issue which is raised by the promoter herein, in the case of Bajranglal Eriwal & others Vs. Sagarmal Chunilal & others, 2008(6) Bom CR 887, wherein it is observed thus: The provisions of the Act, as construed now by the judgment of the Supreme Court, would leave no manner of doubt that the statutory bar upon the promoter altering the structure of a flat agreed to be purchased under Clause (i) of sub-section (1) of section 7 and of making any other alterations or additions in the structure of the building under Clause (ii), can be lifted only subject to a disclosure by the developer of the entire project or scheme. The previous consent that is contemplated by sub-section (1) of section 7 must be an informed consent. An informed consent is one which is freely given, after a flat purchaser is placed on notice by a complete and full dis- closure of the project or scheme which the builder intends to implement. The consent that is contemplated by sub-section (1) of section 7 is, therefore, a specific consent which is relatable to the particular project or scheme of the developer which is intended to be implemented. The observations of the Supreme Court in Jayantilal Investments, bring about a balance between the rights of the promoter on the one hand and a flat purchaser on the other. There is a statutory embargo upon the making of alterations either in an individual flat or in respect of the structure of the building after the disclosure of the plans and specifications of the building. This embargo was introduced by the legislature specifically to obviate the kind of malpractices that were taking place. The lifting of the embargo is conditional on the grant of previous consent. The lifting of the embargo must be confined strictly within the parameters which have been envisaged by the legislature and it is in that context the Supreme Court has held that the consent can be regarded as valid if there has been a full dis- closure by the developer of the entire project which he has to implement. Thus construed, there can be no manner of doubt that it is not open to a developer/promoter to rely upon a general consent. To allow such generalized consents to operate would defeat the public policy which underlies the provisions of sub- section (1) of section 7 as interpreted by the Supreme Court. It is a well settled principle of statutory interpretation that the interpretation which the Court places on a statute must be purposive, so as to achieve the object and intent of the legislature. The Maharashtra Ownership Flats Act, 1963, is an Act to regulate the promotion of the construction of the sale and management, and the transfer of flats on ownership basis. The preamble specifically provides that the State Government was conscious of the fact that on account of an acute shortage of housing, there were "sundry abuses, malpractices and difficulties relating to the promotion of the construction of, and the sale and management and transfer of flats taken on owner- ship basis." The legislature has found that such malpractices not merely existed, but they were increasing. It is in this background that the Court must adopt a purposive interpretation of law and that interpretation which would defeat the object of the legislature must be eschewed." The learned Single Judge of this Court, while taking the aforesaid view, has also relied on the judgments of other Single Judges of this Court, in the cases of Neena Sudarshan Wadia Vs. Venus Enterprises 1984(2) Bom.C.R. 505; (Tejal Residency Co- operative Housing Society Ltd. Vs. Brihan Mumbai Municipal Corporation)14, 2007(6) All.M.R. 861; (Khatri Builders Vs. Mohmed Farid Khan) 15, 1992(1) Bom.C.R. 305; and in the case of Ravindra Mutenja (cited supra).
45. The similar argument, which is advanced before this Court, fell for consideration before the learned Single Judge of this Court, in the case of Neena Sudarshan Wadia Vs. Venus Enterprises, 1984(2) Bom.C.R. 505, wherein the learned Single Judge has observed thus: "Now, we have to understand the meaning of the word 'consent' as used in Clause (ii) of sub-section (1) of section 7. After the plans and specifications of the building as approved by the local authority are disclosed or fur-nished to a person who agrees to take a flat from the promoter, a prohibition is claimed on the promoter not to make any alterations in the building or constructed additional structures. This prohibition can be lifted if before the promoter carries out the alterations in the building or before he starts the work of additional construction, the promoter obtains the consent of all the persons who have agreed to take the flats. For the purpose of obtaining consent, a promoter must ask the flat owners for their permission and reveal to them the nature of the proposed. alterations to the building or of the additional structures to be constructed as, without such disclosure, the flat owners cannot know for what work the permission is sought and for what work they are required to consent. Again in response to a request for consent, there must be an affirmative acceptance from all the persons who have agreed to take the flats. The word "consent" in the context of the section does not mean implied consent such as by conduct or acquiescence or circumstance that might be consent. Consent in this section is to be understood to mean as positive consent to specific items of work or alteration to be carried out or particular additional structure to be built by a promoter. This seems to be the object of enacting these pro- visions of obtaining previous consent of the flat owners as otherwise the malpractices and irregularities intended to be eradicated by this enactment would continue to flourish and the promoters would not be deterred by the penal provision of section 13. A blanket consent or authority obtained by a promoter at the time of entering into an agreement for sale cr at the time of handing over possession is not the consent contemplated by section 7(1)(i) or (ii) for such a blanket consent or authority would sew up or nullify these provisions.
46. Thus, there is consistent view of this Court, that the blanket consent or authority obtained by the promoter, at the time of entering into agreement of sale or at the time of handing over possession of the flat, is not consent within the meaning of section 7(1) of the MOFA, inasmuch as, such a consent would have effect of nullifying the benevolent purpose of beneficial legislation.
47. It is, thus, clear that it is a consistent view’ of this Court, that the consent as contemplated under section 7(1) of the MOFA has to be an informed consent which is to be obtained upon a full disclosure by the developer of the entire project and that a blanket consent or authority obtained by the promoter at the time of entering into agreement of sale would not be a consent contemplated under the provisions of the MOFA. I am in respectful agreement with the consistent view. The interpretation placed by the learned Single Judges of this Court is in consonance with the benevolent provisions of the MOFA which have been enacted for protecting flat takers.”
20. There is one more judgment, which will be relevant i.e. Dosti Corporation, Mumbai Vs. Sea Flama CHS, Mumbai & Ors.9. It is required to note the submission of learned Senior Counsel of the Respondent No.1 that the decision in the case of Dosti Corporation (supra) is arising out of the interim order and therefore same is not relevant. However, it is required to be noted that the said decision 9 (2016) 5 Mah. LJ 102 is on the basis of various provisions of MOFA and Rules framed thereunder and on the basis of earlier decisions concerning the interpretation of the various provisions of MOFA and MOFA Rules. The relevant part is paragraph Nos. 88 to 90, which read as under: “88. It is held that the additional FSI cannot be claimed by the Developer for putting up any additional building not under the approved plan. The failure and neglect to register the society and convey the property would certainly not give any right to the Developer to step upon the property or to claim any FSI. The FSI belongs to the plot. The plot must be taken to be conveyed after the statutory period and thus the FSI that would be available only to the true owner of the plot. Failure to convey would not constitute the Developer a true owner. That would be putting a premium upon his default and that would constitute an abuse of legal process. It is held that any FSI for putting up any additional construction not in the initial sanctioned plan can therefore never enure for the benefit of the Developer except with the express written permission of all the flat purchasers or the Society, after its formation. It is held that such FSI would belong to and can be exploited by none other than the Society of flat purchasers. This Court in the said judgment of Ratna Rupal Co-operative Housing Society Ltd. (supra) also adverted to the judgment of Division Bench in case of Manratna Developers (supra) and distinguished the same. Admittedly in this case, the defendant No. 1 did not disclose any plan in respect of the additional construction sought to be put up by the defendant No. 1 to the plaintiff and defendant Nos. 3 to 5 society before obtaining such sanction from the Municipal Corporation nor obtained their disclosed consent.
89. This Court in case of Ravindra Mutenja (supra) has held that once the buildings shown in the approved plan submitted in terms of the regulations under an existing scheme filed before the authorities under MOFA Act, have been completed and possession handed over, the builder/owner cannot contend, that because he has not formed the society and/or not conveyed the property by sale deed under the Act, he is entitled to take advantage of any additional F.S.I. that may become available because of subsequent events. It it held that it would be so at the stage the building is under construction or the building is not completed and/or purchasers are not put in occupation provided such building forms part of the development plan and/or lay out plan already approved. Subsequent amendment of the lay out plan after the building plan is registered under MOFA, without the consent, primafacie, of the flat purchasers would not be permissible.
90. It is held in the said judgment that once the building is completed and the purchasers are put in occupation in terms of plan filed and the time to form the society or convey the property in terms of the agreement or the Rules framed under MOFA is over, the permission of such purchasers would be required. It is held that if property had been conveyed, prima-facie the remaining F.S.I. or F.S.I. which become subsequently available on the facts of the case, would be to the society to whom the land had to be conveyed.”
21. Thus, it has been held by this Court in Madhuvihar CHS (supra), Bajranglal Eriwal & others Vs. Sagarmal Chunilal & others10, Neena Sudarshan Wadia Vs. Venus Enterprises11, Ravindra Mutenja Vs. Bhavan Corporation12 and Dosti Corporation (supra) as follows:-
(i) The statutory bar upon the promoter altering the structure of a flat agreed to be purchased under Clause (i) of sub-section (1) of section 7 and of making any other alterations or additions in the structure of the building under Clause (ii), can be lifted only subject to a disclosure by the developer of the entire project or scheme. The previous consent that is contemplated by sub-section (1) of section 7 must be an informed consent. An informed consent is one which is freely given, after a flat purchaser is placed on notice by a complete and full dis- closure of the project or scheme which the builder intends to implement. The consent that is contemplated by sub-section (1) of section 7 is, therefore, a specific consent which is relatable to the particular project or scheme of the developer which is intended to be implemented. 10 2008(6) Bom CR 887 11 1984(2) Bom.C.R. 505 12 2003 (5) Mah. L.J. 23
(ii) It is not open to a developer/promoter to rely upon a general consent. To allow such generalized consents to operate would defeat the public policy which underlies the provisions of subsection (1) of section 7 as interpreted by the Supreme Court.
(iii) The meaning of the word 'consent' as used in Clause (ii) of sub-section (1) of section 7 is explained as under:- After the plans and specifications of the building as approved by the local authority are disclosed or furnished to a person who agrees to take a flat from the promoter, a prohibition is claimed on the promoter not to make any alterations in the building or constructed additional structures. This prohibition can be lifted if before the promoter carries out the alterations in the building or before he starts the work of additional construction, the promoter obtains the consent of all the persons who have agreed to take the flats. For the purpose of obtaining consent, a promoter must ask the flat owners for their permission and reveal to them the nature of the proposed. alterations to the building or of the additional structures to be constructed as, without such disclosure, the flat owners cannot know for what work the permission is sought and for what work they are required to consent. Again in response to a request for consent, there must be an affirmative acceptance from all the persons who have agreed to take the flats. The word "consent" in the context of the section does not mean implied consent such as by conduct or acquiescence or circumstance that might be consent. Consent in this section is to be understood to mean as positive consent to specific items of work or alteration to be carried out or particular additional structure to be built by a promoter.
(iv) A blanket consent or authority obtained by a promoter at the time of entering into an agreement for sale or at the time of handing over possession is not the consent contemplated by section 7(1)(i) or (ii).
(v) Blanket consent or authority obtained by the promoter, at the time of entering into agreement of sale or at the time of handing over possession of the flat, is not consent within the meaning of section 7(1) of the MOFA, inasmuch as, such a consent would have effect of nullifying the benevolent purpose of beneficial legislation.
(vi) The consent as contemplated under section 7(1) of the
MOFA has to be an informed consent which is to be obtained upon a full disclosure by the developer of the entire project and that a blanket consent or authority obtained by the promoter at the time of entering into agreement of sale would not be a consent contemplated under the provisions of the MOFA.
(vii) The additional FSI cannot be claimed by the Developer for putting up any additional building not under the approved plan. The failure and neglect to register the society and convey the property would certainly not give any right to the Developer to step upon the property or to claim any FSI. The FSI belongs to the plot. The plot must be taken to be conveyed after the statutory period and thus the FSI that would be available only to the true owner of the plot. Failure to convey would not constitute the Developer a true owner. That would be putting a premium upon his default and that would constitute an abuse of legal process. It is held that any FSI for putting up any additional construction not in the initial sanctioned plan can therefore never enure for the benefit of the Developer except with the express written permission of all the flat purchasers or the Society, after its formation. It is held that such FSI would belong to and can be exploited by none other than the Society of flat purchasers.
(viii) Once the buildings shown in the approved plan submitted in terms of the regulations under an existing scheme filed before the authorities under MOFA Act, have been completed and possession handed over, the builder/owner cannot contend, that because he has not formed the society and/or not conveyed the property by sale deed under the Act, he is entitled to take advantage of any additional F.S.I. that may become available because of subsequent events.
22. Before applying the law laid down by the Supreme Court and this Court, to this case, it is necessary to set out the relevant factual aspects.
(i) Admittedly while purchasing the flat, layout has been shown to the flat purchasers. The said layout is on page 79 of the additional compilation. A scanned copy of page-79 is reproduced hereinbelow for ready reference:- Perusal of the above layout clearly shows that the purchasers have been specifically shown the location of recreational grounds. The subject Recreational Ground is in front of Building Nos. 14 and 15.
(ii) Mr. Jahagirdar, learned Senior Counsel relied on copy of sanctioned layout plan, which is on page 78 of the compilation. The relevant part of the same is also scanned and reproduced hereinbelow:
(iii) The Recreational Ground Area is also shown in tabular form in the said sanctioned layout plan (Page-78). The same is also scanned and reproduced as follows:-
(iii) Thus, what has been shown as future expansion in said sanctioned layout plan has materialised where the building Nos.14 and 15 have been constructed and the same is specifically shown in the layout plan shown to the purchasers. It is admitted position that in the sanctioned layout plan (page 78 of compilation) and in the layout plan shown in the brochure (page 79 of the compilation), the position of R.G. is shown at the same place and the future expansion shown on page 78 is shown as building Nos. 14 and 15 on the layout plan on page 79. Thus, it is clear that recreation garden is clearly shown just opposite building Nos.14 and 15.
23. In view of above factual aspects and in view of the legal position as set out earlier it is necessary to set out the relevant clauses regarding disclosure as contained in the “Agreement For Sale” executed with the flat purchasers:-
2. DISCLOSERS BY PROMOTER AND ACCEPTANCE BY THE PURCHASER: The Promoter has disclosed to the purchaser and after going through the relevant records and all previous sanctioned layout and plans and after thorough discussions and deliberations, the Purchaser has ascertained to his satisfaction and has irrevocably accepted as binding upon him and upon those claiming through and under him as under: a) The Purchaser is aware that under the prevailing laws, rules and regulations, the Promoter shall NOT be entitled to make any change or variation in the area of the said premises agreed to be purchased by the Purchaser under this Agreement. The Purchaser is further aware that under the said laws, rules and regulations, SAVE AND EXCEPT THE AFORESAID RESTRICTION, otherwise, the Promoter is at liberty and is entitled, with prior approval from concerned authorities; but without requiring to obtain any further consent or concurrence from the Purchaser to get amended, revised, modified and/or re-designed from time to time the layout of the Said Property; and/or to further sub-divide the Said Property in independent parts or to amalgamate the said property with any adjoining property. The Promoter is further at liberty to make the changes, amendments and modifications in the said sanctioned plans including the change in height and location of the buildings, the size and location of the open spaces and scope and nature of the development of recreation area including Club House/Community Hall if provided. The Promoter shall further be entitled to at Promoter's sole discretion and without requiring to obtain any further consent or concurrence from the Purchaser to exclude any portion from the present development and, in effect, to reduce the area of the said property or to acquire additional property and to increase the scope of area of the land to be developed. The Promoter further is entitled to make any other changes whatsoever in the planning of the entire complex. It is specifically agreed and understood that for making aforesaid changes the Promoter is not required to obtain any consent or concurrence from the Purchaser. Without prejudice to the above, if at all such consent or concurrence is required to be obtained from the Purchaser, then and in that case, the Purchaser hereby gives and deemed to have given his irrevocable consent and concurrence for making all and every of the aforesaid changes as may be desired by the Promoter. b) The Promoter has disclosed to the Purchaser that the Promoter has got the amended plans sanctioned on the basis of said property as undivided Property. The Promoter intends, i) To sub-divide the Said Property in two or more parts, thereby separating the project known as "KORES TOWERS" with land appurtenant thereto and coinciding with the Floor Space Index (FSI) consumed therein as a sub-divided plot forming a separate legal entity and to convey such housing complex known as "KORES TOWERS" with such appurtenant sub-divide plot, in the name of apex society which may be formed by the Purchasers in various buildings in the said housing project known as "KORES TOWERS". ii) The Promoter may develop the remaining portion of the said property as one property with the complex thereon known as "KORES NAKSHATRA" being developed thereon and to convey such remaining property to the Apex Society to be formed by premises Purchasers in "KORES NAKSHATRA". iii) The Promoter may further sub-divide remaining property into further sub plots forming separate legal entity and to convey such sub-plots with development thereon in favour of respective apex societies. It is specifically agreed by the Purchaser that for making the sub-division in aforesaid manner or in any other manner as the Promoter may deem fit and proper, the Promoter shall not be required to obtain any consent or concurrence from the Purchaser herein or from any other purchasers or from the societies and Apex Societies in respective housing complexes. As per revised Development Control Rules of Thane Municipal Corporation, the Promoter is required to develop the portion or different portions of the Said Property as amenity space and to hand over the same to the Municipal Corporation as per rules and regulations and policy of the Municipal Corporation. Promoter has handed over the possession of a portion under reservation to the Thane Municipal Corporation. As per the prevailing rules, the Promoter is entitled to receive the FSI/TDR (Transferable Development Rights) and/or compensation out of such amenity space, so developed, as also out of said portion under reservation handed over to Thane Municipal Corporation. Such FSI/TDR shall be the sole property of the Promoter and the Promoter shall be entitled to load the said FSI/TDR either on the said adjoining complex known as "KORES TOWERS" or on the present project known as "KORES NAKSHATRA" or on any other project which may be developed in remaining part of the Said Larger Property or, if permissible, to transfer or sale such FSI/TDR on other property in Receivable Zone as per the Development Control Rules. The Promoter alone shall be entitled to receive all the benefits including the monetary benefits of development of such amenity space and/or FSI/TDR and/or other benefits arising therefrom and the Purchaser and the Society/Apex Society/Societies shall have no right whatsoever therein. d) The Promoter shall be entitled to consume the FSI on the said property which may be presently available as per prevailing rules and regulations as well as which may become available in future due to changes in laws, rules and regulations, in further construction in the said property or by transferring such FSI on some other property. The Promoter further shall be entitled to purchase the TDR from elsewhere and to load, use and utilize the same in further construction in the said property by constructing additional floors on existing buildings or constructing additional buildings as per law, rules and regulations for the time being in force. The Purchaser shall not be entitled to raise any objection for utilization of such FSI/TDR from other properties to said property or FSI/TDR from the said property to other properties. Such additional structures and storeys shall be the property of the Promoter alone and the Promoter shall be entitled to sell and dispose off and otherwise to deal with the same, at Promoter's sole discretion without requiring to render any account thereof or to obtain any further or separate consent or concurrence from the 7 Purchaser.
24. A bare perusal of the disclosure and consent as contained in clause No.2 of the “Agreement of Sale” is not the informed consent. As per the settled legal position, blanket consent or authority obtained by the promoter, at the time of entering into agreement of sale or at the time of handing over possession of the flat, is not consent within the meaning of section 7(1) of the MOFA, inasmuch as, such a consent would have effect of nullifying the benevolent purpose of beneficial legislation. The consent as contemplated under section 7(1) of the MOFA has to be an informed consent which is to be obtained upon a full disclosure by the developer of the entire project and that a blanket consent or authority obtained by the promoter at the time of entering into agreement of sale would not be a consent contemplated under the provisions of the MOFA. The above quoted disclosure and consent as set out in the agreement do not give any particulars namely what is the F.S.I. available for the project, how much T.D.R. will be utilised etc. This is very relevant in view of the Form-V as contained in the Rules framed under MOFA. Note No.1 of said Form V specifically provides that the promoter shall disclose the floor space index available in respect of the concerned land and if floor space index of any other land or property by way of flooring space, space index etc. i.e. T.D.R. is proposed to be utilised on the said land, then the particulars of such floor space index i.e. T.D.R. shall be disclosed by the promoter to the flat purchasers. Perusal of the above disclosure do not show that the promoter has given full disclosure concerning the same. By no stretch of imagination, it can be said that the said disclosure is full disclosure and consent obtained is an informed consent. As per the settled legal position, the consent as contemplated under section 7(1) of the MOFA has to be an informed consent which is to be obtained upon a full disclosure made by the developer of the entire project and that a blanket consent or authority obtained by the promoter at the time of entering into agreement of sale will not be a consent contemplated under the provisions of the MOFA. Thus, there is no substance in the contention of the Respondent No.1 that the Respondent No.1 has made complete disclosure and the flat purchasers have given informed consent.
25. It is also required to be noted that although the Supreme Court remanded the matter, it has been specifically held by the Supreme Court that what is held by the High Court in paragraph No. 17 is not disturbed. In said paragraph 17, it has been held by the High Court that not only large recreational spaces are shown in the sanctioned layout / layout but their locations are also indicated in the layout. It has been further held by the High Court that the duty of disclosure which includes duty to conform such disclosure on the part of the promoter and therefore, it is observed that in view of this position whether the purchaser of flat could now be told that the open recreational space of RG No.2 would be constructed upon and there would be 4 RGs at 4 different locations (may be with an overall additional area). These findings recorded in paragraph No.17 of the Order dated 25th January 2019 of the learned Single Judge are confirmed by the Supreme Court.
26. It is also admitted position as noted hereinabove that the Civil Application No.178 of 2017 has been filed by Kores Nakshatra CHS Association Limited, which is the Apex Society consisting of total 15 no. of buildings and 420 flat purchasers and said the Apex Society consisting of 15 buildings and 420 flats purchasers are supporting the present Appellant. In that behalf, it is the contention of the learned Senior Counsel that this Society has also filed an application for impleadment as party before the learned Trial Court and the said application was rejected and thus the said Civil Application is not maintainable. In any case, the factor which can be required to be taken into consideration that all the Society members are supporting the present Appellant. In fact this is very relevant as one of the contention raised on behalf of the Respondent No.1 is that only one flat purchaser out of 420 flats purchasers is objecting to construction of building No.16 on R.G. plot. Thus, it is clear that all the 420 flat purchasers are supporting the present Appellants.
27. It is an admitted position that the sanctioned layout plan (Page-78) which has been disclosed to the flat purchasers is dated 19th January 2005 which specifies the location of these recreational grounds. The occupation certificates were issued to these buildings in or about 2008-2009. The future expansion shown on the said sanctioned layout (page-78) is also constructed where building Nos. 14 and 15 are constructed. The occupation certificate for the same is received on 27th February 2009. The flat purchasers purchased the respective flats in the year 2007 or even before that. Thus, in view of this factual position, it is necessary to consider Section 10 of the MOFA Act, which provides that as soon as minimum number of persons required to form a co-operative society or a company have taken flats, the promoter shall within the prescribed period, submit an application to the Registrar for registration of the organization of persons who take the flats as a co-operative society. Rule 8 of the MOFA Rules provides that the promoter shall submit an application to the Registrar for registration of the co-operative society or the company as the case may be, within four months from the date on which the minimum number of persons required to form such organisation have taken flats. Thus, it is clear that atleast in the year 2007, minimum number of flat purchasers were there and it was the duty of the promoter to take steps to apply for formation of co-operative society.
28. Section 11 provides that the 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 cooperative 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 accordance with the agreement executed under Section 4 of MOFA within a period of four months as per Rule 9 of MOFA Rules. In view of this position, what has been held by learned Single Judge in the case of Dosti Corporation (supra) in paragraph 88 to 90 is very relevant that the additional F.S.I. cannot be claimed by the Developer for putting up any additional building not under the approved plan, the failure and neglect to register the society and convey the property would certainly not give any right to the Developer to step upon the property or to claim any FSI. The F.S.I. belongs to the plot and the plot must be taken to be conveyed after the statutory period and thus the FSI that would be available only to the true owner of the plot. Failure to convey would not prejudice a true owner and the same would be putting a premium upon his default and that would constitute an abuse of legal process. It has been held that such F.S.I. would belong to and can be exploited by none other than the Society of flat purchasers. As far as the present case is concerned, the Developer is loading T.D.R. on the said land. Thus the observations in the case of Dosti Corporation (supra) are also squarely applicable to the present case. In any case, as already held hereinabove the consent which is incorporated in the “Agreement of Sale” executed with the flat purchasers is not the informed consent and therefore not the consent contemplated under MOFA.
29. Although it is the contention raised by the learned Senior Counsel appearing for the Respondent No.1 that the area which was shown in the sanctioned layout plan to be allotted to the flat purchasers or to the societies towards R.G. is more than what is proposed to be provided due to modification. However, what is required to be noted that a learned Single Judge has already held in paragraph 79 that the Respondent has disclosed the position of R.G-I and R.G-II and that area of the same as well as location of the same and the duty of disclosure also includes duty to conform to such disclosure on the part of the promoter. Thus, it is clear that the promoter is duty bound to take consent of the flat purchasers for changing the location of R.G. as well as loading TDR on the said plot. This is in terms of Section 7, 7A r/w Section 4 of MOFA agreement in Form V particularly Clauses No. 4 and 5 of the said model Form of agreement.
30. In this background, it is necessary to see letter dated 21st November 2009 of the Executive Engineer, City Development Department, Thane Municipal Corporation, Thane addressed to Architect of the promoter, wherein Thane Municipal Corporation has specifically stated that the proposed building No.16 proposed to be constructed on the area shown as R.G. in the sanctioned layout plan and therefore the same cannot be permitted. Thus, it is clear that in this particular case, once disclosure is made to flat purchasers, about open and amenity spaces including recreation ground and their location as per requirements of MOFA as per the sanctioned layout plan dated 19th January 2005 and as contained in brochure, it cannot be said that it is permissible for the promoter to construct an additional building on the R.G. area shown in layout area without seeking consent of the flat purchasers. As already held hereinabove the consent, if any, as contained in the agreement executed by the flat purchasers can not be termed as informed consent. Accordingly, question of law raised in the present Second Appeal is answered.
31. In view of the answer to the question of law in the manner set out hereinabove Judgment and Decree dated 20th December 2014 passed by the learned 5th Joint Additional Civil Judge, Senior Division, (T.M.C.), Thane in Regular Civil Suit No. 376 of 2010 as well as the Judgment and Decree dated 14th March 2016 passed by learned Principal District Judge, Thane in Regular Civil Appeal No.2 of 2015 are quashed and set aside and the said Regular Civil Suit No.376 is decreed in terms of prayer clause (c), (e) and (f).
32. As far as other prayers are concerned, it is admitted position that during pendency of the Suit, Society has been registered and accordingly prayer clause (b) and partly prayer clause (d) is worked out. The Society is at liberty to adopt appropriate proceedings with respect to other reliefs.
33. Accordingly, the Second Appeal is disposed of in above terms with no order as to costs.
34. At this stage, a request is made to stay this Order, however, as this is the case where the promoter has failed to perform his statutory duty under the provisions of MOFA and has in fact acted contrary to the same the said prayer is rejected.
35. This order was dictated in Open Court on earlier dates and completed today.
36. As I am conducting the Court at least for 2 - 2 & ½ hours almost every day after regular Court hours, leaving the Chamber after correcting/signing daily orders after 10:30 pm-11:30 pm on almost all the Court working days and reading the case papers at my residence up to 02:00 am, reading the case papers in the morning at least for one hour and also attending the Chamber on almost all Saturdays/Sundays/Holidays for completing pending work, uploading of this order is delayed. (MADHAV J. JAMDAR, J.)