A promoter must provide full disclosure of the entire development project at the time of agreement. Constructing additional buildings on land previously earmarked as recreational space in the sanctioned layout requires specific, informed consent from purchasers; blanket consent clauses do not satisfy this mandatory statutory requirement.

Headnote:(A) Ownership Flats Act, 1963 - Sections 3, 4, 7, 7A, 10 and 11 - Promoter’s liability - Disclosure obligations - Construction of additional buildings - Earmarked recreational areas in sanctioned layout plans.

(B) Informed Consent vs. Blanket Consent - Requirement of disclosure under Section 7 - The statutory bar on altering structures in a building or layout can only be lifted through informed consent obtained from flat purchasers based on a complete and full disclosure of the entire project or scheme by the developer. Blanket clauses in sale agreements do not satisfy the requirement for specific, informed consent. (Paras 17, 19 and 21)

Facts of the case:
The dispute involved the construction of an additional building on land specifically earmarked as a recreational ground in the sanctioned layout plan disclosed to flat purchasers. The developer attempted to justify the construction by relying on broad clauses in the standard sale agreements, which granted them liberty to modify the project plan. The purchasers challenged this, arguing that the earmarked recreation space was an amenity central to the initial disclosure and could not be repurposed without specific consent.

Findings of Court:
The court held that the developer occupies a position of mandatory disclosure. Since the recreation ground was explicitly marked in the layout plan shown to the purchasers, the promoter cannot unilaterally alter its use for constructing an additional building. The judicial consensus maintains that consent for such alterations must be specific and informed, and generalized authorization clauses in agreements are ineffective against the statutory protections provided to purchasers.

Issues: Whether a promoter is permitted to construct an additional building on land previously earmarked as a recreational ground in a sanctioned layout plan without seeking explicit and informed consent from the flat purchasers.

Ratio Decidendi: A promoter is statutorily obligated to disclose the entire development project at the time of sale. Repurposing land earmarked for recreation requires specific, informed consent from all flat purchasers. Blanket consent clauses included in purchase agreements are insufficient to override the protective provisions of the legislation, which exist to prevent developers from abusing their dominant position and to ensure the realization of promised amenities.

Result: Appeal allowed. The impugned judgments were set aside, and the suit was decreed in terms of the prayers seeking to restrain the construction and revoke sanctioned plans regarding the affected area.

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.

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

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