MANU/MH/1351/2008

Equivalent/Neutral Citation: 2009(1)BomC R361

IN THE HIGH COURT OF BOMBAY

Notice of Motion No. 1966 of 2008 in Suit No. 1698 of 2008
Decided On: 25.06.2008
Megh Ratan Co-operative Housing Society Ltd. Vs. Rushabh Rikhav Enterprises and Ors.
Hon'ble Judges/Coram:
D.G. Karnik, J.
Counsels:
For Appellant/Petitioner/Plaintiff: M.P. Vashi, Adv.
For Respondents/Defendant: V.V. Tulzapurkar, Adv., i/b., Doijode Associates for
defendant No. 3, Srivastava, Adv., i/b., Consulta Juris, Adv. for defendant No. 2, Akshay
Patil and Pallavi Joshi Jagtap, Advs., i/b., J. Sagar Associates for defendant No. 1 and
H.G. Pimple and Sirsikar, Advs. for B.M.C. defendant No. 4
JUDGMENT
D.G. Karnik, J.
1. Heard for ad interim relief.
2 . By this motion, the plaintiffs seek several reliefs such as-(a) a mandatory order of
injunction, directing the defendant No. 1 to convey the suit land bearing Survey Nos.
256 and 257 and C.T.S. No. 5244 to 5256 of village Ghatkopar-Kirol, Tal. Kurla, Dist.
Mumbai (for short the suit land'); (b) the order of injunction, restraining the defendant
Nos. 1 to 3 from acting upon the conveyance dated 21st of June, 2006 and/or
development agreement dated 8th June, 2004; (c) direction to the defendant No. 4
Municipal Corporation to revoke and cancel the plans sanctioned including one
sanctioned on 10th of April, 2007 and to cancel and revoke the permission granting TDR
to be used by the defendants Nos. 1, 2 and 3 etc., and injunction to the defendants Nos.
1 to 3 from carrying on any illegal construction; (d) restraining the defendants from
removing existing underground water tank and pump room, meant to be used as a
common area and facility by the members of the plaintiffs society; (e) a mandatory
order of injunction to restore the water pipeline as originally provided; (f) not to
interfere with the peaceful use and enjoyment of free access by the members of the
plaintiffs to their flats; (g) to restrain the defendants from cutting or allowing to cut
various trees; (h) appointment of the receiver and (i) appointment of the Court
Commissioner.
3. Defendant No. 1 was an owner of the suit land. As an owner as well as builder and
promoter, he decided to develop the suit land. Part of the old structures were
demolished and the part of the structure are yet to be demolished. The development
was proposed to be made in stages. The building plans were initially sanctioned in the
year 1978. A copy of the sanctioned building plan is produced at Exh. 'I' to the plaint.
The plans were modified on 26th of August, 1987 and the copy of the modified plan is
at Exh. 'J' to the plaint. There are some further modifications made in the plans to
which I would have an occasion to refer a little later.
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4 . On 15th of September, 1988, the defendant No. 1 entered into an agreement with
Smt. Vijayaben Sobhagchand Shah and Anr., agreeing to sell to them one flat in the
proposed construction. A copy of the agreement is filed at page 56 of the plaint. Similar
agreements were entered into with the other prospective flat purchasers. According to
Mr. Tulzapurkar, some changes are made in the agreements which have been entered
into in the year 2002 or thereafter; however, that changes are not very material. In any
event the agreements made with most of the flat purchasers prior to 2002 are similar to
the agreement at page 56 of the plaint. The defendant is bound by all the covenants
made in those agreements with each of the individual flats owners.
5 . Part of the building has been constructed and the flat purchasers who have taken
flats in that portion are occupying their respective flats. A Co-operative Housing Society
of the flat owners has also been formed, who is the plaintiff herein. The plaintiff society
is espousing the cause of itself as well as its flats holder members.
6 . After constructing part of the building, the defendant No. 1 decided to entrust its
rights to another developer to develop the remaining part. Initially the development
rights were agreed to be transferred by the defendant No. 1 to defendant No. 2.
Subsequently, the defendant No. 1 with the consent of the defendant No. 2 transferred
his development rights to the defendant No. 3.
7 . Mr. Vashi, learned Counsel appearing for the plaintiffs submitted that under the
Maharashtra Ownership Flats Act, 1963 (for short 'MOF Act'), the defendant No. 1 is
obliged to transfer the entire suit land in favour of the plaintiff society. The conveyance
made by the defendant No. 1 in favour of defendant No. 3, being contrary to the
provisions of the MOF Act, is null and void and so the plaintiff has sought a declaration
to that effect in the suit and also claimed interim relief to that effect in the motion. In
my view question of validity of the conveyance cannot be and need not be gone into at
the ad interim stage. Without considering the evidence to be adduced by the parties, it
would not be possible to hold whether the conveyance made by the defendant No. 1 in
favour of the defendant No. 3 is legal or illegal. So no ad interim regarding it can be
granted. Similarly, consideration of the mandatory reliefs claimed can also wait till the
hearing of the motion.
8 . Mr. Vashi, learned Counsel appearing for the plaintiff invited my attention to the
various building plans at Exh. 'I' to Exh. 'L' to the plaint. He strongly submitted that the
building plan dated 26th August, 1987, a copy of which is as Exh. 'J' was disclosing the
names Smt. Vijayaben S. Shah and other as flat holders when they booked their flats.
According to him, the defendants are, therefore, bound to carry on construction only in
accordance with the building plan at Exh. 'J' and are not allowed to carry on any
modification in the said plan without the consent of the flat holders. He submitted that
with the help of the officers of the defendant No. 4, the defendant Nos. 1 to 3 got the
building plans modified and sanctioned on 10th of April, 2007. A copy of the modified
building plans is at Exh. 'L' to the plaint. He submitted that the defendants were not
entitled to modify the building plans nor can they carry on the construction in
accordance with the modified plans at Exh. 'L' to the plaint. That clearly violates the
rights of the flat holders and therefore, by way of ad interim order, the defendants be
restrained from carrying on any constructions in accordance with the building plan at
Exh. 'L' to the plaint.
9 . Before I turn to the modification of plans, the copies of which are produced on
record, it would be appropriate to refer to the relevant provisions of the MOF Act.
Section 7 of the MOF Act, as it stood prior to its amendment by the Maharashtra

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Amending Act No. 36 of 1986 read as under:
7.(1) After the plans, and specifications of the buildings 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 alterations in the structures described therein in respect of the
flat or flats which are agreed to be taken, without the previous consent
of that person; or
(ii) any other alterations in the structure of the building, [or construct
any additional structures] without the previous consent of all the
persons who have agreed to take the flats.
Section 7 of the MOF Act was amended by the Maharashtra Amending Act No. 36 of
1986. After the amendment, the Section 7 reads as under:
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 alterations in the structures described therein in respect of the
flat or flats which are agreed to be taken, without the previous consent
of that person;
(ii) any other alterations in the structure of the building without the
previous consent of all the persons who have agreed to take the flats in
such building.
(2) (Sub-section (2) being not relevant for this case is not reproduced.)
In addition to the amendment of Section 7 as mentioned above, the legislature also
inserted a new section "7A" into the MOF Act by the Maharashtra Amending Act, 36 of
1986. Section 7-A reads as under:
7-A. 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 judgement, decree or order of any Court, be deemed
never to apply or to have applied in respect of the construction of any other
additional buildings or structures constructed or to be constructed under a

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 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.
At this stage it would be appropriate to refer to the object of Section 7 and reasons for
its amendment and insertion of Section 7-A in the MOF Act. Section 7 of MOF Act, as it
originally stood, required the promoter, inter alia, not to construct any additional
structures without consent of all the flat takers. In (Kalpita Enclave Co-operative
Housing Society v. Kiran Builders Pvt. Ltd.) MANU/MH/0306/1985 : (1986)88BOMLR100
, this Court held that in view of Section 7, a promoter was not entitled to put up
additional structures not shown in the original layout plan without the consent of flat
takers. That was not the intention of the legislature. In order to get over this unintended
consequence which had arisen on account of the decision of this Court in Kalpita
Enclave, Section 7 was amended with retrospective effect and Section 7-A was added.
Section 7 was amended and the words "or construct any additional structures" were
deleted. New Section 7-A was added to further clarify the position that the consent of
the flat holders in a building is not necessary in respect of construction in the scheme
or layout after obtaining the approval of a local authority in accordance with the
building Bye-laws or the Development Control Rules. Section 7(A) in such cases does
not enable the intending flat holders to prevent construction of the additional plots in
accordance with the said scheme.
1 0 . With this background, I would now examine the building plans. Exh. 'J' is the
original plan dated 26th August, 1987 and the modified building plan dated 10th of
April, 2007 is at Exh. 'L'. The building plan at Exh. 'J' dated 26th of August, 1987
contemplates construction of two buildings namely, 'A' and 'B'. In the present matter, I
am not concerned with the building 'B'. The building 'A' consists of three arms or wings
and looks like a mirror image of English letter 'C'. At the top, i.e. on the North there is
upper arm or wing running east-west. The second arm or wing runs north -south and
forms eastern part of the building. The lower arm runs east - west and is situate at the
southern side of the property. The three arms or wings together makes one building 'A'.
The area statement given in the plan 'J' shows that the total area of the land to be
2874.80 sq.mtr.; the permissible F.S.I. is 2558.87 sq.mtr., and the F.S.I. proposed to
be consumed by the building is 2490.84 sq.mtrs. In between north and south arms of
the building 'A' there is an open space shown as recreation ground for the common use
of the flat holders. This plan was disclosed to the flat purchasers and the building 'A'
was to be constructed accordingly. On this basis the flat holders proposed to purchase
the various flats.
11. The plan 'J' was modified and approval for the modified plan was granted by the
defendant No. 4 Municipal Corporation on 10th of April, 2007. The defendants now
propose to construct the buildings as per the modified plan dated 10th April, 2007, at
Exh. 'L'. At this stage it may be noted that the lower i.e. Souther arm/wing of the
building 'A' has already been constructed and the flat takers are occupying the flats in
the said arm of the building. However, instead of errecting the remaining two
arms/wings a separate new building is proposed to be constructed. Further more, the
amended plan does not show the building 'B' at all and it is not clear what was
happened to it. The area statement in the plan Exh. 'L' shows the area of the plot to be
the same viz. 2874.80 sq. mtrs. but permissible F.S.I. is altered and shown as 4567.06
sq.mtrs. and the area of the proposed building area is shown as 4460 sq. mtrs. Thus
apart from the modification in building 'A' and deletion of two wings (northern and
eastern wings) what is clearly visible is that though the plot area remains the same, the
permissible F.S.I. has gone up from 2794.87 sq. meters to 4570. sq. mtrs. and the
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proposed built up area has gone up from 2490.64 sq. mtrs. to 4460 sq. mtrs. The F.S.I.
proposed to be consumed has thus increased from 1 to 1.83 sq.mtrs.
12. According to Mr. Tulzapurkar, this F.S.I. has gone up because of the modification in
the Development Control Rules which permit a developer to acquire transferable rights
(for short the T.D.R.). According to him, a owner of the land is entitled to buy in the
market T.D.R. and load it on the proposed construction on the plot. Accordingly the
defendants have acquired additional TDR and loaded the same and thereby the F.S.I. is
increased from 1 to 1.83 sq.mtrs. i.e. to say by 1917 sq.mtrs..
1 3 . In (Jayantilal Investments v. Madhuvihar Co-op. Hsg. Society)
MANU/SC/7012/2007 : AIR2007SC1011 , the Supreme Court while considering the
provisions of Sections 7 and 7-A of MOF Act, in para 17 of its judgment has observed as
follows:
The obligation of the promoter under MOFA to make true and full disclosure of
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 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 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 utilized by the Promoter elsewhere for
any purpose whatsoever. In case the said floor space index has been
utilized by the Promoter elsewhere, then the Promoter shall furnish to
the Flat Purchaser all the detailed particulars, in respect of such
utilization of said floor space index by him. In case while developing
the said land the Promoter has utilized 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 F.A.R. (F.S.I.) 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

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 the residual F.A.R. (F.S.I.) shall be available to the Society.
(emphasis supplied)
The Supreme Court has held that Clause No. 4 of the model agreement prescribed under
the MOF Act and MOF Rules, incorporates the statutory obligation and a promoter is
required to declare to the flat takers the floor space index available in respect of the
land in square metres and the floor space index which the promoter has utilised. In case
the promoter has utilised FSI of any other land or property as a floating F.S.I. he is
required to disclose the same to the flat takers.
14. As stated earlier, the defendant No. 1 had disclosed to the flat purchasers that the
total F.S.I. proposed to be consumed as per the plan at Exh. 'J' was 2490.84 sq. mtrs.
Now the defendants propose to consume 4460 sq. mtrs. of the F.S.I. by utilising
floating F.S.I. or T.D.R. of another property to the extent of 1970 sq. mtrs. This was not
disclosed to the flat purchasers nor their consent was not obtained for such additional
utilisation of the FSI. Prima facie, this could not have been done without consent of the
flat takers.
15. MOF Act and Rules also requires the promoter to disclose to the flat purchasers the
common areas and facility and amenities. The agreement at Exh. 56 states that the
particulars of the common area and facilities are disclosed in the II Schedule to the
agreement. However, the defendant No. 1 failed to incorporate schedule II in the
agreement and did not disclose specifically the common areas and facility. One may,
therefore, prima facie look to the sanctioned building plan for the purpose of common
areas and facilities. The plan Exh. 'J' shows recreation ground, which prima facie is
common area and facility The plan at Exh. J dated 26th August, 1987 shows that the
area of recreation ground to be 315. 93 sq.mtrs. In the new plan at Exh. 'L' the area of
recreation ground is kept blank. But a bare look of the plan Exh. 'J' shows that the area
of recreation has been considerably reduced. This proposed modification of reduction in
a common area facilities has not been approved by the flat takers though the
respondent No. 4 Municipal Corporation has denied that there is change in the
recreation area, the approved plan dated 10th April, 2007 does not show or give exact
area of recreation ground. In the circumstances, prima facie it appears that the
amenities of the flat holders would be reduced if the building is allowed to be
constructed in accordance with the modified plan at Exh. 'L'. In the circumstances, in
my view the plaintiffs are entitled to an injunction, restraining the defendants from
carrying on construction in accordance with the modified plan dated 10th April, 2007,
Exh.'L' as to the plaint or any other plan other than the plan Exh. 'J' to the plaint till the
final disposal of the motion. Ordered accordingly. The defendants are further restrained
from removing existing underground water tank and pump room and preventing ingress
and egress to the plaintiff and its members to their flats till the final hearing and
disposal of the motion.
1 6 . Mr. Tulzapurkar, learned Counsel for the defendant No. 3 submitted that the
operation of this order may be stayed for some time. He submitted that the modified
plan was sanctioned in April, 2007 and the construction was started soon thereafter and
that the plaintiff and its members were aware of the said construction. Some third party
agreements have also been entered by the plaintiffs. Hence, the operation of this order
be stayed for some time to enable the defendants to move the appeal Court. Operation
of this order is stayed for the period of two weeks subject to the condition that the
plaintiffs shall disclose in 48 hours on affidavit the third party agreements and that they
shall not create nor agree to create any new third party interests or agreements during
the said period.
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17. All other reliefs in the motion would be considered at the interim stage.
18. Ordered accordingly.
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