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White Towers Co-Op. Hsg. Society Ltd., Mumbai v. S.K Builders, Mumbai And Others
Factual and Procedural Background
This appeal arises from an order dated 3-5-2007 passed in Notice of Motion No. 3665 of 2006 in Suit No. 132 of 2007. The impugned order granted ad-interim relief restraining defendant No. 5 and any person claiming through the respondents from constructing any building exceeding seven floors in “E” Wing, while rejecting other reliefs sought in the notice of motion. The appellants' grievance concerns a plot of land forming part of the society's plot, which they claim was amalgamated with an adjoining plot without their consent, despite the new layout plan having been approved by competent authorities. The appellants contend that this amalgamation and development contravene the disclosure obligations under the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963, as interpreted by the Apex Court in Jayantilal Investments v. Madhuvihar Co-operative Housing.
Legal Issues Presented
- Whether the promoter can carry out development in a plot contrary to the disclosure made to flat takers at the time of the agreement, particularly regarding amalgamation of the society's plot with adjoining land and subsequent construction.
- Whether the impugned ad-interim order correctly interpreted the Apex Court’s ruling in Jayantilal Investments' case concerning the rights of flat takers and promoters under the Maharashtra Ownership Flats Act and related rules.
- Whether the portion of the society's plot amalgamated with the adjoining plot can be excluded from the restraint imposed by the injunction granted in the impugned order.
Arguments of the Parties
Appellants' Arguments
- The appellants assert that the promoter violated the law as laid down by the Apex Court in Jayantilal Investments v. Madhuvihar Co-operative Housing by proceeding with development contrary to the disclosures made to flat takers at the time of the agreement.
- They contend that the learned single Judge erred by relying solely on paragraph 17 of the Apex Court’s judgment and ignoring the rights assured to flat takers and cooperative societies in relation to the land incorporated in the development scheme.
- The appellants emphasize that the amalgamation of their plot portion with an adjoining plot and the approved new layout were effected without their consent and contrary to the statutory disclosure obligations.
Respondents' Arguments
- The respondents argue that the learned single Judge correctly understood the ratio in Jayantilal Investments' case, limiting the flat takers’ assured right to the original FSI disclosed at the time of agreement.
- They maintain that all other development rights of promoters and builders remain intact and safeguarded, and that the appellants have not challenged the approved layout plan for the amalgamated plot.
- The respondents also point out that the impugned order was an ad-interim order and the notice of motion remains pending for final disposal.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Jayantilal Investments v. Madhuvihar Co-operative Housing, JT 2007 (2) SC 368 | The promoter's statutory obligation under the Maharashtra Ownership Flats Act, 1963 and related rules to make full and true disclosure of the entire project, including development potential and any amalgamation, to flat takers at the time of agreement; the requirement that development must not be contrary to such disclosure. | The court found that the impugned order erred in relying solely on paragraph 17 of the Apex Court's judgment without considering the full scope of the disclosure obligation, especially paragraphs 19, 20, and 21. The court emphasized that changes in the project not disclosed at the time of agreement cannot be allowed without proper procedure, thus modifying the injunction accordingly. |
Court's Reasoning and Analysis
The court analyzed the impugned order's reliance on paragraph 17 of Jayantilal Investments' judgment and found it insufficient and incorrect. The Apex Court had mandated under the Maharashtra Ownership Flats Act and Rules that promoters must disclose the entire project, including any development potential such as additional FSI or amalgamation of plots, at the time of agreement with flat takers. This obligation is statutory and mandatory.
The court noted that the learned single Judge failed to consider that any portion of the society's plot amalgamated with an adjoining plot without disclosure to flat takers violates this principle. Consequently, the promoter cannot claim an unrestricted right to develop such amalgamated portions contrary to the original disclosure.
Accordingly, the court held that the injunction granted must be modified to include restraint on construction on the portion of the society's plot amalgamated with the adjoining plot until the notice of motion is finally disposed of. The court clarified that its observations are limited to the interim disposal of the appeal and should not influence the learned single Judge's final decision on merits.
Holding and Implications
The appeal was allowed and the impugned order was modified to restrain construction on the portion of the society’s plot amalgamated with the adjoining plot until final disposal of the notice of motion.
The direct effect is that the promoter’s right to develop the amalgamated portion is subject to the statutory disclosure obligations and pending final adjudication. No costs were ordered. No new precedent was set beyond the application and clarification of the existing Apex Court ruling in Jayantilal Investments' case.
R.M.S Khandeparkar, J.:— Heard. Admit. Learned counsel appearing on behalf of the respective respondents waive service. By consent, heard forthwith.
2. This appeal arises from the order dated 3-5-2007 passed in Notice of Motion No. 3665 of 2006 in Suit No. 132 of 2007. By the impugned order, the learned single Judge granted ad-interim relief in the nature of prayer clause c(ii) thereby restrained the defendant No. 5 and any person claiming through the respondents, from constructing any building other than 7 floors in “E” Wing while rejecting the other reliefs which were asked for in the notice of motion.
3. The main grievance of the appellants relate to the plot of land forming part of the plot wherein the societies building is situated and claims to have been amalgamated with the adjoining plot and wherein the new layout thereof has been approved for the developments therein by the competent authorities sans the consent of the appellants in relation to the portion of their plot so amalgamated with the adjoining plot.
4. It is the contention on behalf of the appellants that ignoring the law laid down by the Apex Court in Jayantilal Investments v. Madhuvihar Co-operative Housing, reported in JT 2007 (2) SC 368 and particularly whereby the Apex Court had clearly held that once the entire project is placed before the flat takers at the time of the agreement in terms of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963, then the promoter is not expected to carry out development in the plot contrary to the disclosure made to the flat takers. It is the contention on behalf of the appellants that the learned single Judge by merely referring to para 17 of the judgment in Jayantilal Investments' case (supra), had totally ignored the right assured to the flat takers and the co-operative societies having their structures in the land which is sought to be developed by the builders and promoters contrary to the disclosure made regarding the proposed development in such plots at the time of entering into the agreement with the flat takers in the building either already constructed and to be constructed in such plot.
5. On the other hand, it is the case of the respondents that the ratio of the decision in Jayantilal Investments' case has been correctly understood by the learned single Judge and considering the same the only right which has been assured to the flat takers is that the original FSI available to the society, as disclosed at the time of entering into the agreement, is not disturbed and except that all the other rights of the promoters and builders to develop the plot of land are safe-guarded and considering the same, no fault can be found in the impugned order. Besides, there is already the layout plan approved in relation to the amalgamated plot which includes the part of the society's plot and the same has not been challenged by the appellants. It is the further contention on behalf of the respondents that the impugned order is merely an ad-interim order and the notice of motion is still pending before the learned single Judge to be disposed of.
6. Bare perusal of the impugned order discloses that the same has been passed solely referring to para 17 of the decision in Jayantilal Investments' case by merely observing that if the contention based on paragraphs 19 and 21 of the said decision are taken into consideration, then the para 17 of the decision would stand diluted. With respect, we are unable to agree with the view taken by the Page: 896learned single Judge. The Apex Court in Jayantilal Investments' case, has clearly observed in para 20, after taking into consideration the provisions of Clauses 3 and 4 of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction etc.) Rules, 1964, that the said provisions 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 one building scheme or multiple number of buildings scheme. Having observed so in relation to the statutory provisions in Clauses 3 and 4 of the said Rules, the Apex Court has further ruled that:
“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 developeability has to be harmoniously read with the concept of registration of society and conveyance of title.”
7. Obviously, the flat takers stand assured that in case of any change to be made in the project, as was disclosed to the flat takers at the time of entering into agreement, the same has to be by following the proper procedure and without disturbance of the rights accrued to the flat purchasers in relation to the flats and all benefits attached to the flats including in relation to the land on which the building having such flat is situated. Taking into consideration the same, if a portion of the plot wherein the structure having the flat is situated is to be excluded and is to be amalgamated in the neighbouring plot, and the project in this regard is not disclosed to the flat takers at the time of the agreement being entered with the flat takers, it would be totally contrary to the decision of the Apex Court in Jayantilal Investments' case. This aspect has not been considered by the learned single Judge while passing the impugned order.
8. Taking into consideration the law laid down by the Apex Court in Jayantilal Investments' case, therefore, it cannot be said that the respondent No. 5 would be entitled to carry out the construction as a matter of right in the portion of the land of the society's plot which is stated to have been amalgamated with the neighbouring plot. In fact, the learned single Judge, in para 9 of the impugned order, does make reference to this aspect. However, without considering the same, thereafter, proceeded to grant the relief of injunction. Being so, the impugned order to the extent it excludes such portion of the society's plot from being subject to restraint, needs to be modified and the relief in the nature of Clause c(ii) granted by the impugned order needs to be modified to exclude such relief in relation to the society's plot which is said to have been amalgamated in Page: 897the adjoining plot till disposal of the notice of motion and subject to the decision in the notice of motion.
9. Needless to say that all the observations made hereinabove are for the purpose of disposal of the present appeal against the ad-interim order and the learned single Judge should not get influenced in any manner with the said observations while deciding the notice of motion on merits, after hearing the parties.
10. The appeal accordingly succeeds; the impugned order is accordingly modified in above terms till the disposal of the notice of motion. There shall be no order as to costs.
Appeal allowed.
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