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TMI Blog2010 (8) TMI 816X X X X Extracts X X X X X X X X Extracts X X X X ..... f stilt parking space is not included in the FSI and such area is not assessable to the corporation taxes - in reaching the conclusion that stilt parking space is part of ‘common areas’ but in our view even if these two aspects are excluded, in what we have discussed above stilt parking space/open parking space of a building regulated by MOFA is nothing but a part of ‘common areas’ and, accordingly, we answer question no. (iii) in the affirmative. What are the rights of the promoter vis-à-vis society (of flat purchasers) in respect of open parking space/s / stilt parking space/s? - Held that:- As a necessary corollary to the answers given by us to question nos. (i) to (iii), it must be held that stilt parking space/s being part of ‘common areas’ of the building developed by the promoter, the only right that the promoter has, is to charge the cost thereof in proportion to the carpet area of the flat from each flat purchaser. Such stilt parking space being neither ‘flat’ under Section 2(a-1) nor ‘garage’ within the meaning of that provision is not sellable at all. - C.A. 2544 OF 2010 - - - Dated:- 31-8-2010 - R. M. Lodha and A. K. Patnaik, JJ. JUDGMENT Of these seven ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missed the suit with costs. 5. The promoter preferred first appeal before the High Court which was dismissed on April 25, 2008. 6. For brevity, we shall describe Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 as MOFA , Maharashtra Ownership Flats (Regulations of the Promotion of Construction, Etc.) Rules, 1964 as 1964 Rules , Development Control Regulations for Greater Bombay, 1991 as DCR , Maharashtra Apartment Ownership Act, 1970 as MAOA , The Maharashtra Regional and Town Planning Act, 1966 as MRTP Act and Transfer of Property Act as T.P. Act . The summary of findings recording by the High Court: 7. While dismissing the appeal, the High Court recorded the following findings : The carpet area of any of the 56 flats/tenements in Panchali building is not less than 35 sq. mtrs. The parking space either enclosed or unenclosed, covered or open cannot be a building . It is compulsory requirement to provide for parking spaces under DCR. It is obligatory on the part of the promoter to follow the DCR. The agreement signed under MOFA between the developer and the flat purchaser must be in confor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition of flat in Section 2(a-1) of MOFA; Section 2(a-1) creates an artificial definition of flat and since in common parlance a garage would not be considered as a flat, the legislature clarified and explained that the term flat means and includes a garage ; as long as premises are covered from the roof or which have a covered roof and used for the parking of vehicles, that would qualify as garage and since stilt parking spaces are covered parking spaces and form part of the building, they fall within the definition of a garage ; even if stilt parking spaces do not fall within the definition of flat , they are nevertheless sellable as independent units since right to sell such spaces flows from the bundle of rights associated with ownership of the property and Sections 10 and 11 of MOFA read with Rule 9 of 1964 Rules are not exhaustive of the rights retained by the promoter upon execution of conveyance. Moreover, if stilt parking spaces are treated as common areas then the proportionate price for the same would have to be paid by each flat purchaser, irrespective of whether he requires the parking space or not and there may be situations where the number of parking s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s listed it, then every flat purchaser is proportionately required to contribute for the same. 10. In the appeal filed by one Chirag M. Vora, Mr. Sunil Gupta, learned senior counsel appeared. He argued that MOFA was enacted and enforced in the year 1963 as a regulatory piece of legislation and barring the few aspects in respect of which MOFA makes specific inroads into the rights of the promoter in the matter of construction, sale, management and transfer of flats, all other aspects of the right of the promoter who enters into contract with the flat purchaser remain unaffected and undisturbed. His submission is that MOFA gives a wide meaning to the word flat so that buildings of all permutations and combinations may be covered within the scope of that Act and keeping in mind both the plain language of Section 2(a-1) as well as the object of that Act, widest meaning to the word flat deserves to be given so that the plain language is satisfied and also the object of the Act is better subserved. He adopted the line of interpretation put forth by Mr. Tanmaya Mehta that garage includes covered parking spaces and even open parking spaces and is a flat in itself under Section 2( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not override this right of a promoter. Secondly, learned senior counsel would submit that the provisions of MOFA must not be made to depend on the provisions of some other enactment just because the subject matter of the two legislations appears to be the same. In this regard, he referred to Maxwell Interpretation of Statutes, 12th Edition, pages 69 to 70 and G.P. Singh on Principles of Statutory Interpretations, 8th edition, pages 150 to 160. He, thus, submitted that for the purposes of understanding the meaning of flat under Section 2(a-1) of MOFA, the provisions of MAOA may be looked at but there would be no justification in understanding the expression, flat defined in MOFA with reference to MRTP Act, DCR, rules related to FSI and the provisions concerning property tax in the Bombay Municipal Corporation Act. 11. On the other hand, Mr. Neeraj Kumar Jain, learned senior counsel and Mr. Umesh Shetty, learned counsel for the Societies stoutly supported the view of the High Court. The issues: 12. In view of the contentions outlined above, the questions that arise for consideration are : (i) whether stand alone garage or in other words garage as an independent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taking one or more of such flats, be liable to give or produce, or cause to be given or produced, the information and the documents hereinafter in this section mentioned. (2) A promoter, who constructs or intends to construct such block or building of flats, shall (a) make full and true disclosure of the nature of his title to the land on which the flats are constructed, or are to be constructed; such title to the land as aforesaid having been duly certified by an Attorney-atlaw, or by an Advocate of not less than three years standing, and having been duly entered in the Property card or extract of Village Forms VI or VII and XII or any other relevant revenue record; (b) make full and true disclosure of all encumbrances on such land, including any right, title, interest or claim of any party in or over such land; (c) to (h) .. (i) not allow persons to enter into possession until a completion certificate where such certificate is required to be given under any law, is duly given by the local authority (and no person shall take possession of a flat until such completion certificate has been duly given by the local authority); (j) to (l) .. (m) when the flats are adv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, if any; (viii) percentage of undivided interest in the common areas and facilities appertaining to the flat agreed to be sold; (ix) statement of the use for which the flat is intended and restriction on its use, if any; (x) percentage of undivided interests in the limited common areas and facilities, if any, appertaining to the flat agreed to be sold; (b) .. 18. Section 10 casts duty upon the promoter to take steps for formation of co-operative society or company, as the case may be. The said provision reads as follows : S.10.- (1) As soon as a minimum number of persons required to form a Co-operative society or a company have taken flats, the promoter shall within the prescribed period submit an application to the Registrar for registration of the organization of persons who take the flats as a co-operative society or, as the case may be, as a company; and the promoter shall join, in respect of the flats which have not been taken, in such application for membership of a co-operative society or as the case may be, of a company. Nothing in this section shall affect the right of the promoter to dispose of the remaining flats in accordance with the provisions of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned Competent Authority accompanied by the true copies of the registered agreements for sale, executed with the promoter by each individual member of the society or the company or the association, who have purchased the flats and all other relevant documents (including the occupation certificate, if any), for issuing a certificate that such society, or as the case may be, company or association, is entitled to have an unilateral deemed conveyance, executed in their favour and to have it registered. (4) .. (5) .. 20. Section 16 of MOFA provides that the provisions contained therein are in addition to the provisions of the T. P. Act and shall take effect notwithstanding anything to the contrary contained in the contract. Re: question nos. (i) and (ii): (A) What is `flat ? 21. For proper consideration of questions (i) and (ii) as afore-referred, it is of considerable importance to ascertain the import and meaning of the term flat defined in Section 2(a-1) of MOFA. Rather the answer to the questions presented for consideration must squarely or substantially depend on what is a flat . Justice G.P. Singh in the Principles of Statutory Interpretation (12th edition, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atural meaning of the word flat is a separate self-contained dwelling. 26. In Words and Phrases, Permanent Edition, (West Publishing Company), Vol. 17, while dealing with the term `flat generally, it is stated : The word flat has no technical, legal meaning, so that a court can pronounce absolutely one way or the other. A building is a flat or not, and, where the testimony is conflicting, the question is one of fact . 27. Advanced Law Lexicon by P. Ramanatha Aiyar (3 rd edition, 2005) explains the term flat , in the following way `in the ordinary use of the term a flat is a self-contained set of rooms, structurally divided and separately owned or let from the rest of a building, which for the most part consists of other flats separated in like manner . 28. Reverting back to the definition of the term flat under Section 2(a-1), for a flat within the meaning of this definition clause, the set of premises has to be a separate and self-contained that forms part of the building which is used or intended to be used for residence or office, showroom or shop or godown or for carrying on industry or business. Separateness of one premises from another premises physica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the user. This does not appear to be a correct reading of the expression. We are not persuaded to accept such construction. We think that statutory definition of flat must be construed keeping in view the intent of the legislature and the context of the statute and, seen thus, the phrase, and includes a garage in the bracket does not bring in garage by itself within the meaning of word flat . If stand alone `garage (or a garage by itself) were intended by the legislature to be a flat within the meaning of Section 2(a-1), that could have been conveniently conveyed by use of the expression or garage after the word business in the same breath as preceding uses. The bracketed phrase is rather indicative of the legislative intention to include a garage as appurtenant or attachment to a flat which satisfies the ingredients of Section 2(a-1). To this extent Mr. Pravin K. Samdani is right in his submission. It is clear to us that stand alone garage or in other words garage as an independent unit by itself is not a flat within the meaning of Section 2(a-1) and we answer question (i) in the negative. The judgment of Bombay High Court in Dr. K.R. Agarwal Vs. Balkrishn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e these. From the SHORTER OXFORD DICTIONARY: A building for the storage or refitting of motor vehicles. From the NEW CENTURY DICTIONARY : A building for sheltering, cleaning or repairing motor vehicles. To put or keep in a garage. From the NEW STANDARD DICTIONARY: A building for stabling or storing of motor vehicles of all kinds. From NUTTAL S STANDARD DICTIONARY : A storehouse for motor vehicles. Those are four definitions from leading dictionaries all containing at any rate one word in common, and that is building. As there is no evidence as to how the general public understand the word garage, I suppose one is entitled to use one s own knowledge. I am inclined to think that ordinary man in the street does regard a garage as connoting some sort of a building; how far he would go I do not know. I do not know whether he would think that there should be a wall all round it, or whether it would be sufficient if there were three sides walled in and a roof. I have one in mind where there is a row of sheds without any protection in front, which are commonly spoken of as garages, but I am going to apply here the test suggested by counsel for the insured. He said A garage i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng a flat for residence or one of the uses mentioned in Section 2(a-1) really think that open to the sky or open space for parking motor vehicles is a garage? We do not think so. The word garage may not have uniform connotation but definitely every space for parking motor vehicles is not a garage. A roofless erection could not be described a garage. What is contemplated by a garage in Section 2(a-1) is a place having a roof and walls on three sides. It does not include an unenclosed or uncovered parking space. It is true that in condition No. 2, Form V the words covered/open garage have been used but, in our view, the word open used in the Model Form V cannot override the true meaning of term garage in Section 2(a-1). As a matter of fact, none of the provisions of MOFA regards open garage connoting flat or an appurtenant/attachment to a flat. We do not think undue importance should be given to word open which has loosely been used in condition No. 2, Form V. The true meaning of the term garage in Section 2(a-1), we think, is not affected by a Model Form V appended to the 1964 Rules. 36. The question then is as to whether the stilted portion or stilt area of a bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se; Lift; Terraces over the roof of the building; Landings on each floor; Columns and beams of the building Playgrounds, if any. According to him, the following could be part of Limited Common Areas : Separate lift attached to a particular flat and/or certain number of flats; Terrace attached to a flat; Servants toilet on each floor, meant for the user of the flats on that particular floor; The aforesaid list as suggested by the learned senior counsel, in our opinion, is not exhaustive. It may not be out of place to refer to Section 3(f) of MAOA which defines common areas and facilities as follows: 3(f) common areas and facilities , unless otherwise provided in the Declaration or lawful amendments, thereto means (1) the land on which the building is located; (2) the foundations, columns, girders, beams, supports, main walls, roofs, halls, corridors, lobbies, stairs, stair-ways, fire-escapes and entrances and exits of t he buildings; (3) the basements, cellars, yards, gardens, parking areas and storage spaces; (4) the premises for the lodging of janitors or persons employed for the management of the property; (5) installations of central s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is whether such part of the building is normally in common use. Then it was submitted that if a parking space is sold to a flat purchaser, it is to the exclusion of other flat purchasers and, therefore, logically also it cannot be part of common areas . This submission is founded on assumption that parking space (open/covered) is a garage and sellable along with the flat. We have, however, held in our discussion above that open to the sky parking area or stilted portion usable as parking space is not garage within the meaning of Section 2(a-1) and, therefore, not sellable independently as a flat or along with a flat. As a matter of fact, insofar as the promoter is concerned, he is not put to any prejudice financially by treating open parking space/stilt parking space as part of common areas since he is entitled to charge price for the common areas and facilities from each flat purchaser in proportion to the carpet area of the flat. MOFA mandates the promoter to describe common areas and facilities in the advertisement as well as the agreement with the flat purchaser and the promoter is also required to indicate the price of the flat including the proportionate price of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransfer of flats and the flat purchasers were being exploited. The effect of MOFA may be summarized as follows. First, every promoter who constructs or intends to construct block or building of flats in the area to which MOFA applies has to strictly adhere to the provisions contained therein, i.e., inter alia, he has to make full and true disclosure of the nature of his title to the land on which the flats are constructed and also make disclosure in respect of the extent of the carpet area of the flat and the nature, extent and description of the common areas and facilities when the flats are advertised for sale. Secondly, the particulars which are set out in Section 4(1A) (a) (i) to (x) have to be incorporated in the agreement with the flat purchaser. Thirdly, the promoter has to apply to the Registrar for registration of the organization (co-operative society or company or condominium) as soon as minimum number of persons required to form such organization have taken flats. As regards unsold flats, the promoter has to join such organization although his right to dispose of unsold flats remains unaffected. Fourthly, and more importantly, the promoter has to take all necessary step ..... X X X X Extracts X X X X X X X X Extracts X X X X
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