“Informed-Consent Clauses & Pre-Society Development Rights” – Commentary on
M/s Krishna Constructions & Ors. v. Subhash Uttam Dalvi & Ors.
(Bombay High Court, Appeal From Order No. 744 of 2024, decided 10 June 2025)

1. Introduction

The Bombay High Court, per Godse J., has vacated a sweeping interim injunction that had halted additional construction in a Pune residential project and had paralysed dealings with 110 already-sold flats. The dispute pits M/s Krishna Constructions (the promoter) and its partners against Mr Subhash Dalvi, a single flat purchaser, who sought to block the promoter from using the site’s remaining development potential. A 2024 trial-court order had restrained the promoter, the Pune Municipal Corporation (PMC), the project architect and 98 other purchasers from any activity concerning the “extra floors” erected after 2019. The High Court has now set aside that order, holding that:

1. the purchaser had given informed contractual consent to future vertical expansion,
2. no society/association of purchasers yet exists, hence MOFA’s consent requirement does not bite, and
3. the trial court misapplied the three-pronged test for temporary injunctions.

The judgment crystallises a key doctrinal point under the Maharashtra Ownership of Flats Act, 1963 (MOFA): where the agreement itself discloses the full developable potential and secures the purchaser’s explicit consent, a promoter need not obtain fresh consent for additional structure until the stage of society formation / conveyance.

2. Summary of the Judgment

• The appeal by the promoter was allowed; the trial court’s injunction of 16 July 2024 was quashed.
• The High Court held that the plaintiff’s 2017 agreement (Clause 11) contained a clear, specific and informed consent allowing the promoter to utilise full FSI/TDR and add floors.
• No prima facie case, balance of convenience or irreparable injury was shown; on the contrary, 110 third-party purchasers and the promoter would suffer drastic loss if the injunction continued.
• The trial court’s findings of “collusion” with PMC were labelled “ill-founded and imaginary”.
• Because the plaintiff never challenged the promoter’s post-suit termination of his agreement, his claim to specific performance was tenuous at the interim stage.

3. Detailed Analysis

3.1 Precedents Cited & Their Influence

The Court undertook an extensive comparative analysis:

• Jayantilal Investments v. Madhuvihar CHS (SC 2007) – leading ruling that post-1986 MOFA amendments delete the need for consent for additional structures if built per sanctioned plans. The High Court used it as the primary touch-stone.
• Manratna Developers v. Megh Ratan CHS (Bom DB 2009) – distinguished in the trial court but relied on in appeal to show that, where phased development and explicit contractual permission exist, injunction should be refused.
• Madhuvihar CHS v. Jayantilal Investments (Bom 2011 on remand) & Lakeview Developers (Bom 2015) – both protective of purchasers after society formation. The High Court distinguished them since no society has yet been formed and the plaintiff is a solitary buyer, not a collective body.
• Ambalal Sarabhai Enterprise Ltd. v. KS Infraspace LLP (SC 2020) – reaffirmed that temporary injunctions in specific-performance suits are intrinsically discretionary; a “strong prima facie case” is essential.
• Wander Ltd. v. Antox India (SC 1990) – cited to recall the appellate self-restraint principle, but ultimately the High Court found the lower view perverse, hence interference was justified.

3.2 Court’s Legal Reasoning

1. Full & True Disclosure: The 2015 sanctioned plan annexed to the agreement explicitly showed 126 permissible tenements (only 62 proposed at signing). Thus the purchaser was on notice of the remaining FSI stock.
2. Informed Consent Clauses: Clause 11 allowed use of additional TDR, extension of floors, alteration of elevation and specifications provided the purchaser’s flat and amenities were not materially affected. Challenging that clause is tantamount to rewriting the contract, and no prima facie invalidity was shown.
3. Stage of Development: Society formation and conveyance duties under MOFA ss. 10-11 trigger a different regime; until then, promoter retains the right to exploit unused potential (subject to DC Rules and planning permissions).
4. Three Injunction Tests: The trial court, in focusing on “triable issues”, failed to measure (i) strong prima facie case, (ii) balance of convenience (110 purchasers vs. 1), (iii) irreparable injury (monetary compensation adequate for plaintiff).
5. Laches & Conduct: Plaintiff demanded possession in Jan 2023 without any complaint on extra floors; suit was filed only in Sept 2023 after construction was almost complete – indicative of acquiescence and disentitling delay.
6. Public-law Allegations Rejected: Assertions of “collusion” between PMC, architect and promoter were unsupported and ignored procedural fairness standards. Courts cannot assume corruption without pleadings or proof.

3.3 Impact Assessment

The judgment is poised to influence Maharashtra’s crowded MOFA/RERA litigation space in several ways:

• Strengthens Validity of “Future Development” Clauses: Where agreements contain detailed disclosures and purchaser consent, courts are unlikely to halt on-going construction at an interim stage.
• Clarifies Consent Timing: Consent under §7 is relevant post-society formation; individual purchasers in an unregistered project possess limited veto power.
• Elevates Balance-of-Convenience Test: Courts must weigh the interests of later-stage purchasers and investment flux; one buyer cannot freeze a multi-crore project by pleading abstract “structural integrity” fears.
• Reduces Injunction-Buyout Strategies: Developers have long complained of single-purchaser suits used to negotiate premium settlements. The ruling curtails that tactical leverage.
• Guidance for Municipal Corporations & RERA Authorities: Once sanctioned plans accord with DC Rules, planning bodies may proceed without apprehension of later judicial reversal absent fraud.

4. Complex Concepts Simplified

• MOFA (1963): State Act regulating sale & promotion of flats; key for disclosure duties, society formation and conveyance.
• Section 7 / 7-A: Control promoter’s right to alter building plans. Post-1986, additional structures okayed by planning authorities need no purchaser consent until society formed.
• FSI (Floor Space Index): Ratio between built-up area and plot area; higher FSI allows taller/bulkier buildings.
• TDR (Transferable Development Rights): Development quantum transferred from one parcel to another; can be loaded onto the project to add floors.
• Temporary (Interlocutory) Injunction: Court order maintaining status quo until the case is decided; granted only if the plaintiff shows: (i) strong prima facie case, (ii) balance of convenience in his favour, (iii) irreparable harm without relief.
• Society Formation & Conveyance: Under MOFA §§10-11, promoter must form a co-operative society of purchasers and transfer title. Once done, residual FSI belongs to the society, strengthening purchaser control.

5. Conclusion

Krishna Constructions v. Dalvi realigns the compass of interim-relief jurisprudence under MOFA. It emphasises that contractual informed-consent clauses, backed by sanctioned plans, can immunise promoters from individual purchasers’ injunction bids while the project is still in the developer’s hands. The decision balances investor confidence with consumer protection by requiring proof of non-disclosure or statutory breach before courts restrain construction. Future litigants must therefore:

• scrutinise whether full project potential was disclosed at signing,
• consider the stage of society formation and conveyance, and
• prepare robust evidence of prejudice beyond monetary compensation.

In the broader context, the judgment fosters development certainty across Maharashtra’s vertical skyline while preserving the purchasers’ ultimate safeguard – the right to assert collective control once their society comes into existence.