Jayantilal Investments vs Madhuvihar Co-operative Housing Society

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2007 Supreme(SC) 33

2007(1) Supreme 694
SUPREME COURT OF INDIA
(From Bombay High Court)
Dr. Arijit Pasayat and S.H. Kapadia, JJ.
M/s Jayantilal Investments—Appellant
versus
Madhuvihar Co-operative Housing Society & Ors.—Respondents
Civil Appeal No. 3233 of 2006
Decided on 10-1-2007
Counsel for the Parties :
For the Appellant : G.E. Vahanvati, S.G., Sunil Gupta, Sr. Advocate, Kavin Gulati, Nakul Diwan, Avinash Pandey, Ms. Rashmi and T. Mahipal, Advocates.
For the Respondents : M.K. Gilani, Harshad V.H. Pratap Venugopal, E. Venukumar (for M/s. K.J. John & Co.), Pallav Shishodia, Atul Y. Chitale, Mrs. Suchitra Atul Chitale, Ms. Sujeeta Srivastava and Madhup Singhal, Advocates.

Headnote:Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963—Sections 3, 4, 7, 7A (As Amended) 10, 11—Maharashtra Ownership Flats (Regulations of the Promotion of Construction etc.) Rules, 1964—Rule 8—Obligations of Promoter under MOFA—Rights of promoter to make alterations or additions in the structure of the building—An agreement was arrived at between vendors and Promoter—Appellant-promoter obtained NOC for construction of a building with 7 wings and 137 tenements for weaker section—However, layout plan was revised and approved with 5 wings having additional floors on the original plot—Agreements entered into between promoter and flat takers for sale of flats—Amendment of MOFA inserting Section 7A excluding ‘additional structures’ from the scope of Section 7(1)(ii), lifting requirement of consent of flat takers—Appellant issued an advertisement for commencement of construction in accordance with the amended plan under which the competent authority sanctioned 5+2 wings applying the newly available FSI—Respondent, a Co-operative Society and its members filed a suit against promoter for conveyance, injunction restraining the promoter from putting up further constructions—Appellant promoter was restrained permanently from making any construction over the suit plot—It was held that appellant was prohibited from putting up additional constructions after the plan stood disclosed to flat takers—Whether this case falls within the ambit of amended Section 7(1)(ii) or u/s 7A of MOFA—Matter remitted to the High Court for reconsideration.
Held : In the impugned judgment, the High Court has failed to examine the question as to whether the project undertaken in 1985 by the appellant herein was in respect of construction of additional buildings or whether the project in the lay out plan of 1985 consisted of one building with 7 wings. The promoter has kept the requisite percentage of land open as recreation ground/ open space. Relocation of the tennis court cannot be faulted. The question which the High Court should have examined is: whether the project in question consists of 7 independent buildings or whether it is one building with 7 wings? The answer to the above question will decide the applicability or non-applicability of Section 7(1)(ii) of MOFA, as amended. The answer to the above question will decide whether the time to execute the conveyance has arrived or not. This will also require explanation from the competent authority, namely, Executive Engineer, “R” South Ward, Kandivali, Mumbai-400067 (Respondent No. 8 herein). In the dates and events submitted by the appellant-promoter, there is a reference to the permission granted by ULC authorities dated 16.11.1984 which states that the owner/developer shall construct a building with 7 wings. One needs to examine the application made by the promoter when he submitted the lay out plan in 1985. If it is the building with 7 wings intended to be constructed in terms of the lay out plan then the High Court is also required to consider the effect of the judgment in the case of Ravindra Mutneja and Ors. v. Bhavan Corporation and Ors. 2003 (5) BomCR 695 in which the learned single Judge has held that if a building is put up as a wing of an existing building, it cannot be constructed without the prior permission of the flat takers. In that connection, the High Court shall also consider Permission dated 16.11.1984 under section 21(1) of ULC Act, application made to the competent authority when initial lay out plan was sanctioned, applications for amendments to lay out plans made from time to time and also agreements between promoter and flat takers. (Para 19)

JUDGMENT

Kapadia, J.— What are the rights and obligations of a promoter under the provisions of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 (“MOFA”) is the question which has arisen for determination in this civil appeal.

2. On 26.8.1980 an agreement was arrived at between the vendors and the appellant herein (M/s Jayantilal Investments-Promoter) in respect of 8559.57 sqm. of land in CTS No. 1068 village Kandivili, Tehsil Borivili, Greater Mumbai. Subsequently, under a Revised Draft Development Plan, a 44 ft. wide road was indicated and, consequently, the area admeasuring 8559.57 sqm. stood divided. On account of this division, a plot admeasuring 6071 sqm. emerged as the suit land. On 16.11.1984 the appellant-promoter obtained NOC under Section 21(1) of the Urban Land Ceiling Act, 1976 (“ULC Act”) permitting it to construct a building with 7 wings and 137 tenements for weaker section. The construction was to be made in accordance with the prevailing Municipal Regulations, Town Planning requirements and Statutory Regulations. On 21.10.1985 the lay out plan was sanctioned. It indicated 1 building with 7 wings. At that time, due to existence of a narrow road as access, the promoter was entitled only to FSI of 0.75. This plan was amended in 1986, 1987, 1989, 1992 and 1994 without any objection from the flat takers. At this stage, it may be mentioned that on 6.5.1986 the lay out plan was revised and approved with 5 wings having additional floors as well as FSI of 1.00 due to construction of 44 ft. wide DP road on the original plot admeasuring 8559.57 sqm. of land.

3. From time to time, agreements stood entered into between the appellant and the flat takers for sale of flats. These agreements are dated 7.12.1985, 11.4.1987, 18.1.1989, 30.4.1989, 27.7.1991 etc.

On 12.11.1986 MOFA was amended retrospectively. Under that amendment Section 7A was inserted excluding ‘additional structures’ from the scope of Section 7(1)(ii) and thereby lifted the requirement of consent of flat takers. However, the said amendment was restricted to the plots falling under a scheme or a project under the lay out plan. The object behind enacting Section 7A was to overcome the judgment of the Bombay High Court in the case of Kalpita Enclave Co-operative Housing Society Ltd. v. Kiran Builders Private Ltd. 1986 MhLJ 110. On 12.4.1989 on receiving occupation certificate, possession of flats was handed over to the flat takers. Some flats remained to be sold. They stood in the name of the appellant-promoter.

5. On 25.3.1991, the Development Control Regulations were framed which resulted in an increase of FSI from 1 to 1.8 on account of the introduction of the concept of TDR. For the first time under this concept, lands stood separated from the development potential of the plot. Consequently, the lay out plan stood amended and the appellant obtained sanction on 25.5.1992 for construction of the building in question with 6 wings by consumption of the balance FSI of 1.00. The appellant accordingly issued an advertisement for commencement of construction in accordance with the amended plan. However, it is the case of the appellant that on account of financial paucity the construction got stuck.

6. Respondent No. 1 is the Co-operative Society registered on 20.1.1993. The lay out plan was once again amended on 26.11.1994. The building in question with 6 wings was shown in the amended plan. The plan was duly sanctioned. It is important to note that this plan of 1994 was sanctioned in favour of the appellant on account of purchase of additional TDR by the appellant.

In 1997 on account of Slum TDR, the permissible FSI stood increased to 2 from 1.8.

7. On 12.8.1997 the Co-operative Society-respondent No. 1 and five flat takers (members) instituted suit no. 4385/97 against the appellant-promoter for conveyance, injunction restraining the promoter from putting up further constructions and questioning the val

Click Here to Read the rest of this document

2007 Supreme(SC) 33

Cases Referred (1)