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TMI Blog2007 (1) TMI 568X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant for executing conveyance in favour of the Co-operative Society under the provisions of MOFA. Being aggrieved by the grant of three years time to the appellant, the Cooperative Society (Respondent No. 1 herein) preferred to the Bombay High Court First Appeal No. 786/04. A cross appeal was preferred by the appellant-promoter being First Appeal No. 989/04 in which the appellant contended that under the agreement between the appellant and the flat takers no time limit for execution of the conveyance could be set as the appellant was entitled to exploit the full potential of the plot in question and till such time as the development potentiality of the plot in question stood exhausted, the appellant was not statutorily obliged to execute a conveyance in favour of the Co-operative Society. In this connection reliance was placed on the provisions of Section 7A of MOFA. By impugned judgment dated 16.3.2006 the Bombay High Court allowed First Appeal No. 786/04 filed by the Co-operative Society and simultaneously dismissed First Appeal No. 989/04 filed by the appellant herein. By the impugned judgment, the High court directed the appellant to convey right, title and interest and ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the lay out plans between 1985 and 1989 and, therefore, the appellant-promoter was not entitled to derive any benefit from Section 7A of MOFA and, consequently, the appellant was not entitled to construct additional building in the above suit plot. Hence this civil appeal. Mr. Sunil Gupta, learned senior counsel appearing on behalf of the appellant submitted that Section 7 of MOFA enjoined the promoter, inter alia, not to construct any additional structure without the consent of the flat takers in the agreed building. This provision was applied by the Bombay High Court in the case of Kalpita Enclave (supra). The said judgment prohibited the developer from constructing the additional structure in the agreed building. Learned counsel submitted that the State Legislature imposed such a restriction on the promoter contrary to the object of the Act and, consequently, the legislature stepped in to change the basis of the judgment of the Bombay High Court in Kalpita Enclave case (supra) by enacting the Amending Act No. 36/86 retrospectively. According to the learned counsel, the said Amending Act deleted the said restriction and left the promoter free to construct any additional structur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the D.C. Regulations were enacted in 1991 and the concept of TDR was introduced, the appellant got increased FSI of 1.8, consequent upon which the plan was amended and 6 wings came to be sanctioned on 25.5.1992. Similarly, when the FSI was increased to 2, the plan was got amended and accordingly the appellant obtained a sanction for construction of 5 + 2 wings. Learned counsel, therefore, urged that the sanction obtained by the appellant on 29.3.2001 for construction of 5 + 2 wings on the suit plot was in terms of the original Plan sanctioned on 21.10.1985 when 7 wings stood sanctioned. In the circumstances, learned counsel urged that the appellant was entitled to construct 5 + 2 wings which was contemplated even in the original Plan dated 21.10.1985. Accordingly it was submitted that, in the facts and circumstances of this case, the amended provisions of Sections 7 and 7A of MOFA were applicable and, consequently, the appellant was not obliged to execute a conveyance in favour of the society till the appellant is in a position to fully exploit the development potentiality of the suit plot. In the alternative, it is urged that, in any view of the matter, the appellant is not entitl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obtained by the promoter from ULC authorities was to construct a building with 7 wings. Learned counsel urged that Section 7A was not applicable to the present case since in the present case the scheme consisted of one building with 6 to 7 wings. Moreover, it was further pointed out that Section 7A applies when there is a project or scheme which indicates phase wise development of a large plot made known to the intending flat takers. Section 7A in such cases does not empower the intending flat takers to prevent construction of additional building according to such scheme. As a corollary, it was urged that Section 7A does not confer any additional benefits or rights to a promoter to construct additional building which did not form part of the scheme/project in the lay out disclosed to the flat takers and, in any event, not after the obligation to convey has become operative and enforceable under Sections 10 and 11 read with Rules 8 and 9 of the Rules. Learned counsel urged that in the present case the society has been registered in 1993. He submitted that in the present case, on facts, the obligation to convey has become enforceable under Sections 10 and 11. He clarified that mere f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s required to form a cooperative society as soon as the minimum number of flat takers is reached and, thereafter, the conveyance has to be executed in favour of the society within four months after the formation thereof in terms of Section 11. He submitted that MOFA has been enacted to regulate the activities of the builders and not to confer benefits on them. He submitted that Section 7A was inserted only for removal of doubts and to provide that the deleted words "construct any additional structure" shall be deemed never to have been there notwithstanding any judgment, decree or order of any court which means that the builder could construct any additional structure without the consent of the flat purchasers. However, it is pointed out that Section 7A does not have the effect of conferring any rights on builders to claim an exemption from their obligations under Sections 10 and 11 of MOFA. Before dealing with the point in issue one needs to look at original Section 7 which was in existence in the Statute prior to its amendment by Maharashtra Amending Act No. 36/86. The unamended Section 7 reads as follows: "7.(1) After the plans, and specifications of the buildings as approved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retrospectively substituted and it was deemed to be effective as if the amended clause had been in force at all material times. Further, it was declared vide Section 7A that the above quoted expression as it existed before commencement of the Amendment Act shall be deemed never to apply in respect of the construction of any other additional buildings/ structures, constructed or to be constructed, under a scheme or project of development in the lay out plan, notwithstanding anything contained in the Act or in any agreement or in any judgment, decree or order of the court. Consequently, reading Section 7 and Section 7A, it is clear that the question of taking prior consent of the flat takers does not arise after the amendment in respect of any construction of additional structures. However, the right to make any construction of additional structures/ buildings would come into existence only on the approval of the plan by the competent authority. That, unless and until, such a plan stood approved, the promoter does not get any right to make additional construction. This position is clear when one reads the amended Section 7(1)(ii) with Section 7A of the MOFA as amended. Therefore, ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded Section 7(1)(ii). Section 7A basically allows a builder to construct additional building provided the construction forms part of a scheme or a project. That construction has to be in accordance with the lay out plan. That construction cannot exceed the development potentiality of the plot in question. Section 10 of MOFA casts an obligation on the promoter to form a cooperative society of the flat takers as soon as minimum number of persons required to form a society have taken flats. It further provides that the promoter shall join the society in respect of the flats which are not sold. He has to become a member of the society. He has the right to dispose of the flats in accordance with the provisions of the MOFA. Section 11 inter alia provides that a promoter shall take all necessary steps to complete his title and convey the title to the society. He is obliged to execute all relevant documents in accordance with the agreement executed under Section 4 and if no period for execution of the conveyance is agreed upon, he shall execute the conveyance within the prescribed period. Rule 8 inter alia provides that where a cooperative society is to be constituted, the promoter shall s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct 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 the residual F.A.R. (F.S.I.), shall be available to the Society." (emphasis supplied) The above clauses 3 and 4 are declared to be statutory and mandatory by the legislature because the promoter is not only obliged statutorily to give the particulars ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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