Final Order 3

Order Details: Copy of Judgment
Pdf Text: 1 Judgment in Suit No.17/2020
MHCC010135552019 Presented on : 25.12.2019
Registered on : 02.01.2020
Decided on :13.07.2026
Duration :06Y 06M 13D
EXHIBIT- : 72
IN THE BOMBAY CITY CIVIL COURT AT MUMBAI
S.C. SUIT NO. 17 OF 2020
(CNR No.MHCC01-013555-2019)
Diamond Hill Co-operative Housing Society Ltd.
a Society, Registered and Incorporated under the
provisions of Maharashtra Co-operative Societies
Act, 1960, and having its Registered Office at CTS
No. 13/13, Sion Trombay Road, Kurla (E),
Chunabhatti, Mumbai-400 022
Through Badshah Mehmood Ansari,
Chairman of Diamond Hill CHS,
Age- 53 years, Occu.-Business. ...Plaintiffs
Versus
...Defendants
M/s K.M. Realty
Through its Partners
Mr. Kunal Pankaj Rawal
Age- Not Known &
Mr. Manoj B. Vora
Age- Not Known
Having address at-
F-14, 1st Floor, Prime Mall,
Irla Lane, Vile Parle (W),
Mumbai- 400056.
---------------------------------------------------------------------------------------------------
Appearances:-
Ld. Adv. Mr. Gauraj Shah alongwith Ld. Adv. Mr. Ashish Mishra, Ld. Adv.
Mr. Vishnudutt Mishra, Ld. Adv. Mr. Navjot Singh and Ld. Adv. Mr.
Tushar Amberkar i/b Ld. Adv. Mr. Sanjeet Shukla for plaintiff.
Ld. Adv. Mr. Vishal Kanade alongwith Ld. Adv. Ms. Jai Kanade and Ld.
Adv. Mr. M.P. Vora i/b M/s. Pramod Kumar & Co. for defendant.
---------------------------------------------------------------------------------------------------
-- 1 of 142 --
2 Judgment in Suit No.17/2020
CORAM :SHRI N. V. JIWANE
Spl. CBI JUDGE, (C.R.NO.52)
DATE : 13.07.2026
JUDGMENT
(Delivered on 13.07.2026)
Plaintiff has filed the present suit for declaration,
permanent and mandatory injunction against the defendant. The reliefs
claimed by the plaintiff in the plaint are as under :
(a) That this Hon’ble Court be pleased to declare that the Defendant,
their agents, servants, representatives and all other persons claiming
through the defendant have no right and/or not justified to enter upon,
remaining and/or disturb the plaintiff’s peaceful occupation and
possession on the plot bearing CTS No. 13/13 admeasuring 3957.30 sq.
mtrs. and construct third building C Wing (which is wrongly shown as A
Wing in the plan) consisting of 17 floors beyond and against the
registered agreement.
(b) That this Hon’ble Court be pleased to grant permanent order and
injunction of this Hon’ble Court restraining the defendant, their agents,
servants, representatives and all other persons claiming through the
defendant from entering upon, remaining and/or disturbing the
plaintiff’s peaceful occupation and possession on the plot bearing
Survey (plaintiff left the same blank in prayer clause).
(c) That this Hon’ble Court be pleased to grant permanent order and
injunction of this Hon’ble Court restraining the defendant, their agents,
servants, representatives and all other persons claiming through the
defendant from in any manner dealing with and/or developing the suit
property any part or portion thereof as also not to deal with or sell,
-- 2 of 142 --
3 Judgment in Suit No.17/2020
transfer and/or dispose of any flats or units in the proposed
building/additional structure to be constructed on the suit property as
well as the FSI relating to the suit property or any part or portion
therefore to any other third party and/or from carrying on any activity
of construction on the suit property or any part or portion thereof.
(d) That this Hon’ble Court be pleased to order and decree to
perform all statutory obligation under the provisions of the MOFA and
RERA laws including and not limited to completing the incomplete
works as enumerated herein above relating to the building ‘C’ Wing
(wrongly mentioned as A Wing).
(e) That this Hon’ble Court be pleased to order and decree to make a
full disclosure mandated under the provisions of the MOFA and Rera
laws.
2. Plaintiffs came with a case that, it is a Housing Society.
registered under the provisions of Maharashtra Co-operative Societies
Act, 1960. Defendant is the builder and developer of the 2-building
wing A and B in which the members of the plaintiff are residing.
Defendant has committed several breaches of his contractual
commitments under the statutory agreements entered into by him with
the members of the plaintiff society under the provisions of the
Maharashtra Ownership of Flats Act (MOFA) and Real Estate Regulatory
Authority Act (RERA). Defendant instead of completing the project of
the plaintiff’s, has commenced another adjoining project on the plot of
land, causing grave hardship to the members of the plaintiff society.
Defendant who is the promoter of the plaintiff’s building has failed and
neglected to make true and full disclosures to the flat purchasers, who
are the members of the plaintiffs society, as is required under the
-- 3 of 142 --
4 Judgment in Suit No.17/2020
provisions of MOFA, with regards to the additional structures he is
attempting to construct and is doing so without obtaining their express
consent.
3. It is further pleaded that, after the meeting of the society
held on 26/11/2019, the Architect was appointed and his expert
opinion was obtained. After the report of Architect, it was found that :
i) Newly proposed building as per sanctioned plans by BMC,
state the computation of FSI as per new DCPR 2034. In
which the consumption of FSI as per plot area mentioned.
States no future development prospect for the existing
members of the society.
ii) Additional FSI and FSI as per DCPR 2034 regulation 30 of
Table 12(A) as per road width had been fully utilized and
no future development for future development for existing
member are possible.
iii) As per computation of FSI as per DCPR 1991 states the
portion of RG that should be handed over to the MCGM.
The same has been not handed over till date. Hence, the
RG for the plot has been computed in new regulation DCPR
2034 and the area for the RG which was deducted earlier
in DCPR 1991 is now taken in consideration as per DCPR
2034 the advantage of the same has been fully occupied by
the defendant. The area advantage of 593.58 sq. mtr. has
been utilized.
iv) Over and above parking required has been provided in the
sanctioned plans dated 18/11/2019. Wherein the
-- 4 of 142 --
5 Judgment in Suit No.17/2020
additional parking provided is only specifically mentioned
for new construction of the wing. The parking provided is
in the mentioned property which shall more ever the
regular usage of the existing members. The parking benefit
has been fully utilized by the defendant. The parking
provided shall create nuisance to the existing members.
4. It is further pleaded that, the plaintiff’s building “Diamond
Hill” had been advertised by the defendant during the sale as a
standalone building consisting of 7 floor and having two wings viz.
Wing A and Wing B with each wing having four flats on each floor.
Defendant had advertised and sold flats in the building of the plaintiffs.
Defendant upon selling the flats in the said construction entered into
MOFA agreement with the purchasers of such flats. In or about 2006,
defendant called upon the purchasers to take possession of their flats
within a period of 15 days by stating that the building had been
completed and the flats had been made ready for occupation and where
in a habitable condition. But defendant had left several works of Wing A
and Wing B building incomplete. Defendant not only failed in
completing several works in the Wing A and Wing B building, but also
had failed and neglected in forming the Society and also conveying the
land in favour of society for more than 4 years. Defendant despite
claiming to have completed the construction of the building almost
more than 12 years back i.e. 2006, failed and neglected to complete
several pending works in the building. Several informal meetings took
place between the Committee members of the plaintiffs and the
defendant between 2018 and 30/03/2019, when the several incomplete
works were repeatedly pointed out and discussed with the defendant
and mutually agreeable timeline were fixed for the completion of the
-- 5 of 142 --
6 Judgment in Suit No.17/2020
said works. But defendant except false assurances did not take any steps
to complete those works and even failed and neglected to even reply to
queries raised by the plaintiffs. Eventually when the plaintiff informed
that they would approach the appropriate authorities and the Court of
law to point out his default, small part of the incomplete work has been
completed. Defendant with an intention to get the extension of time to
complete the incomplete work as agreed in the mutually agreed
timeline, raised the ground of paucity of funds and delayed the work
without giving any reasons. On the other hand, defendant by keeping
the incomplete works of the plaintiff on hold, recently proceeded to
obtain permission and sanction in respect of the additional structure
over suit property i.e. plot bearing CTS No.13/13A situated at Village
Kurla-3, Dist. Mumbai Suburban admeasuring 3957.30 sq. mtrs. or any
part or portion thereof.
5. It is further pleaded by plaintiff that the defendants had
kept the following works incomplete :
i) Failure to form Co-operative Housing Society.
Defendant failed and neglected to form a co-operative society at
the defendant own cost and expenses as per the provision of Section 10
of MOFA Act, as soon as minimum numbers of flats were sold by him in
the project. The defendant has already obtained money for the purpose
of formation of the society of the flat purchasers of Wing A and Wing B
of plaintiff’s society, under the clause 31 MOFA agreement executed.
The defendant was being promoter under obligation and duty bound to
form the society of the flat purchasers. But defendant inspite of having
sold maximum numbers of flat in the project, when consulted by the flat
owners, declined to co-operate and form co-operative society of the flat
-- 6 of 142 --
7 Judgment in Suit No.17/2020
owners. Hence, members of the plaintiff’s society were constrained to
form and register the society at their own expenses and cost on
16/01/2017. Members of plaintiff’s society had already paid share
money and entrance fee of Rs. 251/- per flat to defendant and required
to incur expenses of more than Rs.2,500/- for the formation and
registration of the Housing Society. When the plaintiffs informed the
defendant about the formation of society and the expenses incurred for
the formation of society and also provided the detailed account of the
expenses incurred, defendant declined to take note of the same and to
refund the said expenses.
ii) Failure to execute Conveyance.
Defendant failed to execute the Conveyance in favour of the plaintif’s
society as mandated within four months of the formation of the Society.
Despite repeated reminders and requests, defendant failed and
neglected to execute the conveyance in favour of the plaintiff’s society
and now wants to take undue advantage of his own wrong. The
plaintiff’s society is entitled to the land and consequentially also to the
benefit including FSI and TDR etc. arising therefrom. By not conveying
the land, the defendant cannot usurp the FSI and TDR etc. benefit of
plaintiff’s society. Defendant did not perform his obligatory duty to
convey the property in favour of the society in spite of several requests.
Plaintiff is a registered society and is in possession of the land has the
right, interest in the land and entitled to the benefit therefrom.
iii) Failure to provide Audited Accounts.
After formation of plaintiff’s society, plaintiff requested the defendant to
provide audited statement of account of amount and expenses which
the defendant has made from and out of the large sum of money
-- 7 of 142 --
8 Judgment in Suit No.17/2020
collected from the flat purchasers under the MOFA agreement towards
maintenance and other expenses. But defendant has failed to provide an
audited statement of account despite repeated reminders and requests.
It has came to the notice of plaintiff that an amount of Rs. 1,500/-
approximately is lying in excess with the defendant towards the
maintenance, which defendant ought to have refunded to the plaintiff
society. When the plaintiff requested the defendant to refund the said
amount, they again failed and neglected to refund the same.
iv) Failure to handover papers and documents to the Society.
After formation and registration of society and upon defendant being
informed of the same, plaintiff requested the defendant to handover the
important and project related documents and papers to the society. But
defendant has failed to carry out a formal handover of all the important
papers and documents to the society despite repeated reminders and
requests. Defendant failed to provide sanctioned building plans as well
as sanctions and permissions obtained from the concerned authorities,
AMC contract and other services contracts of services such as security,
housekeeping maintenance, lift maintenance contract and lift licenses,
CCTV maintenance contract, electrician and plumbing contracts, fire
safety equipment documents and licenses etc.
v) Failure to obtain a Water Connection and Meter.
Defendant till very recent time had failed and neglected to obtain a
legal water connection and meter from the Bombay Municipal
Corporation. Despite repeated requests and reminders, defendant for
the reason best known to him, kept on delaying application for
obtaining the legal water meter and connection for Wing A and Wing B.
Though, the defendant put the flat purchasers in possession of flats in
-- 8 of 142 --
9 Judgment in Suit No.17/2020
the year 2007, defendant provided water to occupants of the buildings
by way of water tankers. Inspite of plaintiffs pointing out to the
defendant about the poor quality of water and harmful contents of acid
arsenic and aluminum in the said tanker water, defendant took no steps
to make application for the water connection and thereby exposed the
members of society to health hazard. But when the plaintiff informed
the defendant that they would approach the Court pointing out the
failure of the defendant intentionally neglecting in getting legal water
connection and putting members at risk, defendant made an application
to the BMC and obtained a water connection a few year ago in October
2014.
vi) Failure to pay arrears of Property Tax.
Defendant being promoter of the buildings is under statutory obligation
to pay and bear the property taxes and also other tax amount payable to
the Government and BMC till the conveyance was executed in the
favour of society. Defendant was fully aware that large amount of
property tax was pending to be paid on the property over which
buildings of the plaintiffs had been constructed and due to failure to
clear said taxes, water connection and occupation certificate was being
delayed. Inspite of repeated requests and reminders, defendant failed to
clear the property taxes. Therefore, representatives of plaintiffs were
constrained to collect amount from individual flat owners towards the
property tax and to pay the same to the authorities, so as to avoid any
adverse action by the authorities. Plaintiff informed the defendant
about the same and also provided the copies of the receipts of the flat
owner, who had paid the property tax. Defendant is liable to reimburse
the said amount.
-- 9 of 142 --
10 Judgment in Suit No.17/2020
vii) Failure to complete incomplete works of plaintiffs building.
Defendant has not completed the following work and therefore plaintiff
was required to do the said work and required to be paid out of its own
pocket :
a) Security gate was not installed at the south of the building.
b) No boundary wall was constructed exposing the plaintiff’s
property.
c) Society office with interior and window works not completed.
d) Inferior quality of plastering which has caused substantial leakage
and damage to the structure of the plaintiff’s property.
e) Faulty electric wiring and fitting provided through the plaintiff’s
building.
f) Non-maintenance of water pumps installed, which has caused
malfunctions from time to time.
g) Non-maintenance of drainage system.
h) Crakes in the structure of the building.
i) Provided lesser parking space and allotted parking space to
members of plaintiff more than available parking space.
It is further pleaded by the plaintiff that, when effort was made
by the plaintiff to affix a security gate in the building, the unruly
representatives of the defendant stopped the said work and did
not allow the gate to be installed. Due to non-installation of the
security gate, the compound of the plaintiff’s building is left open
-- 10 of 142 --
11 Judgment in Suit No.17/2020
on the south side, thereby providing easy access to anti-social
elements to enter the plaintiffs premises, thus posing an
extremely high security risk situation for the plaintiff.
viii) Failure to register project with MahaRERA in respect of Wing C.
Plaintiffs building comprising of the Wing A and Wing B is in
incomplete project as the Wing C is yet to be completed and there are
several amenities which are yet to be provided and several works are
yet to be completed by the defendant. Being the incomplete layout and
project not having completed, the defendant was required to register
the said project under the provisions of MAHARERA and in spite of
repeated requests and reminders, defendant failed to register and also
declined to register the project under the provisions of MAHARERA.
Defendant by forwarding the ground of paucity of funds, kept several
works incomplete and for which the members of plaintiff’s society were
required to face severe hardships since long. Defendant on one side
gave the reason of paucity of funds for completing the incomplete work,
but on the other hand, initiated the process of obtaining permission for
the additional construction, behind the back of the members of the
plaintiff’s society.
6. It is further pleaded by the plaintiff that, the defendant
without obtaining the express consent and without even informing the
plaintiff’s society commenced the construction on the suit property as
described in Exhibit D on the adjoining of the plot of land. The
defendant has not made as clear and full disclosure of the said
construction or scheme as well as layout of such project or building,
which he intends to construct on the same plot. Without doing so,
defendant has proceeded to amalgamate the project and proceed with
-- 11 of 142 --
12 Judgment in Suit No.17/2020
the construction thereon. The defendant was required to obtain proper
and clear consent of the members of the plaintiff’s society before
perusal of such scheme and commencing the demolition and/or
obtaining any permission regarding the construction of a building on
the adjoining plot of land after disclosing all facts to the plaintiff society
about the construction or scheme as well as layout of such project or
building which he intends to construct on the adjoining plot.
7. The defendant was required to make clear and full
disclosure of the additional construction to the members of the
plaintiff’s society as per law, which additional structure was not a part
of the layout plan which was placed before the flat purchasers at the
time of execution of the MOFA agreement. The defendant was required
to obtain the express consent under Section 7 and 7A of MOFA of the
members of the plaintiff’s society, after making such disclosure
regarding the additional construction, layout, FSI consumption, etc. and
before commencing any work of the additional construction. Further,
even in the MOFA agreement entered in between defendant and the flat
purchasers of the Diamond Hill Building, the defendant has not made a
true and full disclosure of the same, what the defendant intends to
construct on the adjoining plot of land. But the defendant has only
made a fleeing/incomplete reference that he may carry out the
development of the said plot, which is under encroachment and carry
out the development of the said plot. However, defendant has not
provided any details regarding of the said layout or FSI consumption, of
the additional construction which he intends to carry out on the same
plot. The additional structure to be constructed in which the defendant
intends to sale the flats in the open market stating to be a part of the “C-
Wing” of the plaintiff’s building. Further, the defendant has made it
-- 12 of 142 --
13 Judgment in Suit No.17/2020
obligatory on the plaintiffs to admit the flat purchasers of the new
construction as members in the plaintiff’s society, which should not be
binding on the members of plaintiff society.
8. As promoter, the defendant was duty bound to make true
and full disclosure regarding such additional construction, which was at
the time of purchase of plot and at the time of entering into MOFA
agreements with the flat purchasers not a part of the layout plan
annexed to such agreement. Therefore, it was required and mandatory
for defendant to have obtained the express consent from the members
of the plaintiff’s society. Merely a blanket consent which the defendant
has allegedly obtained under the aforesaid clauses, does not hold good
as the defendant has not made any disclosure regarding the layout, FSI
consumption or other requisite details of the additional construction.
Therefore, the plaintiff’s society was constrained to file the present suit
for the reliefs claimed herein-above.
9. Defendant has resisted the suit by filing his written
statement on record at Exh.19. Defendant denies each and every
statement, averment, claim and / or contention set out in the plaint.
Defendant denies that there is any cause of action arose to plaintiff to
file the present vexatious suit and that the plaintiff has not approached
this Court with clean hands. It is contended by defendant that, under a
deed of conveyance dated 31.03.1965 Mr. Divakar Thimppa Bhandary
and others purchased the said property and the defendant acquired
development right in respect of the said property under Development
Agreement dated 03/02/2003.
10. Defendant proposed construction of 3 Wings on the said
property, in phase wise manner, under layout. MCGM approved layout
-- 13 of 142 --
14 Judgment in Suit No.17/2020
plan dated 29/07/2004, which shows 3 independent buildings, 2
buildings of 7 floors and 1 building of 4 floor, subsequently, MCGM
approved/amendment layout plan dated 10/04/2006, which shows 3
independent buildings each having 7 floors. In the first phase of
development, defendant constructed the first two wings, both
comprising of Ground plus 7 upper floors. Defendant sold flats in the
first phase to various purchasers under registered agreement for sale
executed in accordance with the provisions of Section 4 of MOFA. Under
the MOFA agreement, defendant had disclosed the entire scheme of
development on the layout to the flat purchasers. Defendant has
informed the flat purchasers that they shall construct the third
building/wing in the layout by using balance FSI potential of the subject
property. Defendant also expressly reserved its right to use, utilize,
consume and exploit the balance/ remaining FSI potential available in
respect of the subject property as also the benefit of TDR, as may be
approved/sanctioned by the planning authority. Further, the MOFA
agreements entered in between defendant and flat owners specifically
record the said facts and that there is disclosure given by the defendant
about the whole project and the future construction to be made by the
defendant.
11. It is further contended by the defendant that, MCGM issued
Part Occupation Certificate (OC) for the first building on 14/06/2006
and Part OC for the second building on 20/10/2010. Thereafter, on
18/10/2016, the purchasers of flats in A and B Wings made an
application to the Competent Authority and Deputy District Registrar,
Co-operative Societies for registration of Co-operative Society, in
accordance with the provisions of Section 10 of MOFA read with the
Maharashtra Co-operative Societies Act, 1960. Defendant contested said
-- 14 of 142 --
15 Judgment in Suit No.17/2020
application and apprised the authority about the plans approved for the
3rd building with the right to utilize the balance FSI and/or the entire
potential of the said property as per the MOFA agreement. The said
aspect was considered by the Competent Authority and the Deputy
District Registrar and by order dated 06/01/2017 allowed the
application of flat purchasers and plaintiff’s society was ordered to be
registered. In the said order itself it was recorded that, defendant had
the right of further development of the layout as approved by the
Competent Authority, as well as revised layout. The Competent
Authority was also pleased to order to register the plaintiff’s society and
that they will not take any objection to the utilization of balance FSI by
the defendant.
12. It is further contended by the defendant that, on the west
side of the suit property, there was encroachment by one Tulsidas V.
Patel Pvt. Ltd. over 142 sq. mtrs. approximately forming part of the suit
property. A suit bearing L.C. Suit No. 4666 of 2003 was filed by said
Tulsidas V. Patel Pvt. Ltd. against MCGM and defendant. The said suit
was contested by the defendant and was disposed of vide an order
dated 11/07/2017, with a direction that defendant/MCGM shall follow
the due process of law before initiating actual demolition of the
encroachment. Thereafter, defendant followed the due process of law
including making application to City Survey Officer/TLR to have
survey/measurement and finally succeeded to remove the
encroachment over the portion of the suit property in or about 2018-
2019.
13. From 01/11/2018 DCPR 2034 was notified and accordingly
the plans for the 3rd building had to be processed and approved under
DCPR 2034. Therefore, for construction of the Second Phase, defendant
-- 15 of 142 --
16 Judgment in Suit No.17/2020
applied for and obtain approval for a building comprising of Ground
plus 16 upper floors on 28/07/2019. Pursuant thereto, MCGM
sanctioned plans for construction of Ground (Shops) plus three upper
floors (residential use) on 09/09/2019 and issue full Commencement
Certificate dated 26/12/2019. All these facts were within the
knowledge of the plaintiff, but plaintiff intentionally and malafidely
suppressed and concealed the same and filed baseless suit, which is not
maintainable.
14. Further, Mr. Diwakar Bhandary and others are the owners
of the suit property and the reliefs sought by the plaintiffs are in the
nature of assertion of ownership rights, accordingly plaintiff has no
locus to seek the said relief. Third building which is subject matter of
present suit is an independent structure and plaintiff is neither the
owner nor are its members the occupants of the third building, thus as
per law and also Section 7A of MOFA, plaintiff has no right to seek any
relief in respect of the construction of the third building, since no
consent is required. Hence, plaintiff has no locus to file present suit
against defendant and the suit is liable to be dismissed with
compensatory cost.
15. Defendant also raised the ground of non-joinder of
necessary party in the suit. It is contended that, under the deed of
conveyance dated 31/03/1965, Divakar Thimppa Bhandary and others
are the owners of the suit property and vide development agreement
dated 03/02/2003, granted the development right in favour of
defendant, who had constructed the buildings of the plaintiff. The said
fact was well within the knowledge of the plaintiffs, as the same is
mentioned in the MOFA agreements executed with the flat owners.
Therefore, in absence of the owner of the suit property, plaintiff is not
-- 16 of 142 --
17 Judgment in Suit No.17/2020
entitled for claiming any relief in the suit. Hence, the suit is bad for
non-joinder of the necessary party and liable to be dismissed on the said
ground.
16. Further, the plaintiff is estopped from seeking any relief in
the present suit, as the plaintiff has been constituted and registered on
the condition that the plaintiff will not take any objection to the
utilization of the balance FSI by the defendant. This is expressly set out
in the order dated 06/01/2017 passed by the Competent Authority
under Section 10 of MOFA. The said order has attained finality and has
not been challenged by the plaintiff society. In view thereof, the plaintiff
is bound by the principle of estoppel and is disentitle to seek the reliefs
prayed for in this suit and on this count also the said suit is liable to be
dismissed. Not only this but the MOFA Agreement itself demonstrate
that the members of the plaintiff society have granted their express and
informed consent to the scheme of development disclosed by the
defendant, including the construction of the third building and the
utilization of the entire balance FSI potential (including TDR).
Accordingly, plaintiff is estopped from challenging defendants right to
carry on construction of the third building.
17. It is further submitted by the defendant that, from the plans
approved by MCGM, the third building is an independent structure.
Accordingly, the provisions of Section 7A are applicable to the facts of
the present case. A perusal of the MOFA agreement executed by the
members of the plaintiff with defendant have express disclosure
whereby defendant has put the members of the plaintiff society to
notice that there will be three independent buildings/structures in the
layout, though they may be referred as “Wings”. This is also evident
from the sanctioned plans dated 26/07/2004 and 10/04/2006, duly
-- 17 of 142 --
18 Judgment in Suit No.17/2020
approved by MCGM. Further, the MOFA agreement also contain an
express disclosure that defendant shall utilize the entire FSI potential
available in respect of the said property as well as the benefit of TDR as
may be approved/sanctioned by the planning authority and avail the
same for additional construction by way of additional floors on the
buildings (as proposed) and the Wings and/or by construction of
additional structure/building/wings, as may be approved/sanctioned by
the concerned Development Authority. Thus, the defendant has
complied with the requirement of disclosure as applicable under Section
7A of MOFA. Further, as per Section 7A of MOFA, a Promoter is entitle
to construction of additional structure or building under the scheme or
project of development in a layout, after obtaining approval of the
Competent Authority in accordance with the Development Control
Registration Building Rules and Regulations for the time being in force.
It is further contended that, Section 7A was inserted by 1986
Amendment of MOFA to clarify that the requirement of consent of Flat
Purchasers envisaged under Section 7(1) of MOFA was never applicable
in case of construction of additional buildings/structures. Therefore, in
the present case there is no question of requirement of consent of the
plaintiff or its members for the propose of construction of 3rd
Wing/building, which is admittedly an additional and independent
structure disclosed under the layout in the sanctioned plan of 2007.
18. Further, under Section 7A of MOFA, the obligation of the
Promoter is to disclose only the Scheme of the Construction/
Development in the layout. Perusal of the clauses of the MOFA
Agreement executed in 2004 and 2007 shows that (i) defendant has
disclosed and informed the Flat Purchasers about construction of 3rd
wing in the layout and (ii) Defendant has reserved its right and
-- 18 of 142 --
19 Judgment in Suit No.17/2020
entitlement to use, utilize, consume and exploit the balance potential of
FSI and TDR in respect of the suit property for construction of 3rd Wing
having 7 (Seven) or more upper floors, as may be approved/sanctioned
by the Competent Authority. Not only this but Regulation No. 21 of the
Development Control Regulation, 1991 (DCR 1991) provides, the
contents of the layout plan. On perusal of the said regulation, it can be
seen that the layout does not require or provide for total numbers of
Floors or the details of the consumption of FSI/TDR in each structure of
the layout. Thus, the requirement of the disclosure under MOFA
Agreement for additional structure in the layout must be construed in
its context and accordingly defendant had done so, as evident from the
clauses of the MOFA Agreement. Accordingly, 3rd Wing is an additional
structure disclosed in the layout and therefore Section 7A of MOFA is
applicable. Therefore, consent of the Flat purchasers is not required for
the construction of the additional independent structure. When entire
scheme of construction/development was duly disclosed to the flat
purchasers and the proposed construction is within the disclosure made
by the defendant to the flat owners under their respective MOFA
Agreements, then there is sufficient compliance of Section 7A of MOFA
and hence defendant is entitle to construct the 3rd Wing by use,
utilization and consumption of the balance development potential of the
subject property including TDR.
19. It is further the case of defendant that, defendant had
proposed and also disclosed to the flat owners that the redevelopment
of the property shall be done in two phases i.e. 1st Phase comprising of 2
Wings both having Ground + 7 Upper Floors and 2nd Phase comprising
of 3rd Wing having Ground+ 7 or more Upper Floors by use, utilization,
consumption and exploitation of the then balance/remaining potential
-- 19 of 142 --
20 Judgment in Suit No.17/2020
of FSI available in respect of the property as well as the benefit of TDR
as may be approved/sanctioned by the concerned Development
Authority. Admittedly the location of the third building was also
disclosed to the flat purchasers. In the plan of 2007 plinth of the 3rd
Wing having measurement of 19.6 mtrs. X 12 mtrs. was shown,
considering the encroachment on the west side of the property and as
per the statutory open space requirement. Defendant being the
Developer contested the suit and also got removed the encroachment at
its own costs, charges and expenses. After removal of encroachment,
defendant proposed revised plan of 3rd Wing with increased plinth of 28
mtrs. X 12 mtrs. and the MCGM after considering all statutory
provisions and regulations including the open space requirement,
sanctioned the plan with the increased plinth. As per DCPR 1991 there
was no requirement to disclose the plinth measurement in layout. Even
Section 7A of MOFA permits a Promoter/Developer to have construction
of additional building/structure, disclosed in the layout in accordance
with the Building Rules or Building Bye-Laws or Development Control
Regulation made under any law for the time being in force and MCGM
has approved plan for construction of the 3rd Wing in accordance with
the Development Control Rules and Regulations. Therefore, the
defendant is entitled to construct the 3rd Wing with plinth area of 28.12
mtrs. X 12 mtrs. and plaintiff cannot dispute or challenge to the same.
20. Further, though there is increase of the plinth area of the
3rd Wing by 8.37 mtrs. on account of removal of the encroachment on
the west side of the property, the plinth area of the 3rd wing as then
proposed by defendant in 2007 plan was 19.6 mtrs X 12 mtrs has now
been proposed and sanctioned by MCGM is 28 mtrs X 12 mtrs. But
there is admittedly an open space/width of 14.5 mtrs. from the Building
-- 20 of 142 --
21 Judgment in Suit No.17/2020
Line of the 3rd wing to the compound wall. Thus, the open space in west
side has increased from 4.6 mtrs. to 14.5 mtrs. Not only this but since
2007 till date the vehicular ingress and egress over the said property is
only from east side, but due to removal of encroachment and even after
expansion of plinth of the 3rd Wing by 8.37 mtrs. there can be one-way
ingress from east side of the property and egress from the west side of
the property. The same will ensure convenience and un-hindrance to the
occupiers of the building throughout the property.
21. It is further the contention of defendant that, as per the
prevailing Rules and Regulations under DCPR 2034, considering the
benefit of FSI credit available by way of TDR on account of 18.3 mtrs.
available road Fungible compensatory area, etc. an area of 8906.25 sq.
mtrs. is the total permissible Build Up Area available for construction of
the 3rd Wing. Defendant has given the calculation for the same as
under :
FSI STATEMENT AS PER DCPR 2034
Sr. No. Particulars Area in Sq.
Mtrs.
1. Area of plot as per property card 3957.20
2. Deduction for
(a) Road Set-Back Area of Curvature
(b) Any Reservation
(c) Amenity Space as per DCPR 27
Total
3. Balance Area of the Plot 3057.20
4. Deduction for 15% R.G., 10% Amenity
-- 21 of 142 --
22 Judgment in Suit No.17/2020
Space
5. Net area of Plot 3957.20
6. Addition for FSI purpose
7. Zonal Basis FSI (1.00) 3957.20
8. Additions for Floors Space FSI 0.50 FSI as
per DCPR 32
1978.00
9. A) Incentive BUA in lieu of Rehab
Component
(15% on existing BUA or 10 sq. mtrs. per
tenement whichever is higher) as per
DCPR 33(7)(B)
B) Protected FSI proposed as per Reg.
30C of DCPR 2034
C) FSI credit available by DRC 32 I.E.0.5
TDR as per DCPR 1991 0.9 TDR for 18.30
mtrs. Road as per DCPR 2034
3561.48
D) Setback
10. Permissible Floor Area (7+8+9) as per
Reg. 30 of DCPR 2034
9497.28
11. Existing Floor Area
A) Wing-A (Earlier mentioned Wing C)
(O.C. is granted)
1417.48
B) Wing-B (O.C. id granted) 1482.58
C) Wing-C (Earlier mentioned Wing A)
Total of (A+B+C) 2900.06
12. Total Net BUA (10-13) 6597.22
13. Admissible Fungible Compensatory Area 2309.03
14. Total Gross BUA Available 8906.25
-- 22 of 142 --
23 Judgment in Suit No.17/2020
Thus, defendant on account of the express disclosure made
as well as the consent given by the flat purchasers, under the MOFA
Agreement, it is entitled to use, utilize, consume and exploit the
permissible Build Up Area of 8906.25 sq. mtrs as available as per DCPR
2034, for construction of the 3rd Wing.
22. It is further the contention of the defendant that, defendant
is very much entitled to use, utilize, consume and exploit the then
balance/remaining development potentiality as was permissible under
the provisions of DCR 1991, as of the year 2007. Accordingly,
considering the development potential as permissible, that too, without
taking benefit of Fungible compensatory area (which was made
available in 2012) the total permissible Built-Up Area available to
defendant as in the year 2007 for construction of the 3rd Wing was
4420.76 sq. mtrs. As of the year 2006, defendant was entitled to use,
utilize, consume and exploit the said permissible Built-Up Area of
4420.76 sq. mtrs, which purely includes the balance basis Zonal FSI of
the property and TDR (after deducting the Build-Up Area of 2900.06 sq.
mtrs. being the constructed area of the Plaintiff’s Wings) which was
expressly reserved by defendant for construction of the 3rd Wing and
also expressly disclosed by defendant to the flat purchasers as well as
confirmed/consented by the flat purchasers under the MOFA
Agreement. The total permissible Built-Up Area as then available with
defendant in 2007 is as under :
FSI Statement As Per DCR 1991
Sr. No. Particulars Area in Sq. Mtrs.
1. Area of Plot 3957.20
2. Deduction
-- 23 of 142 --
24 Judgment in Suit No.17/2020
a) Road Set Back
b) Proposed Road
c) Any Reservation
3. Balance Area of Plot (1-2) 3957.20
4. Deduction for 15% R.G. 539.58
5. Net Area of Plot 3363.62
6. Addition for FSI --
7. Total Area (5+6) 3363.62
8. Permissible FSI 1.00
9. Permissible BAU 3363.62
10. Additional FSI (0.50) (3 X 0.50) 1978.60
11. FSI Credit available by Development
Right (3 X 0.50)
1978.60
12. Total Permissible BUA (9+10+11) 7320.82
13. Existing BUA for Existing 2 Nos. of
Wings
2900.06
14. Permissible BAU for Proposed 3rd
Wing (12-13)
4420.76
23. Defendant has filed an Affidavit in Rejoinder dated
28/04/2025 in Special Leave Petition (Civil) No. 3420/2025 and had
stated that it proposed to construct the 3rd Wing by use and utilization
of the development potentiality of 4097.45 sq. mtrs. as compared to
potentiality of 4420.76 sq. mtrs. as available under DCR 1991 (without
fungible FSI), which was admittedly prevailing at the time when the
plaintiff’s buildings has been constructed as per the layout plan
disclosed to the purchasers of the premises in the plaintiff’s buildings
-- 24 of 142 --
25 Judgment in Suit No.17/2020
and also as compared to FSI available as per DCPR 2034 and also stated
that it does not intend to avail the benefit of fungible FSI of the entire
plot, which became available in or about 2012. Thus, defendant intends
to utilize and construct the 3rd building with an area of 4097.45 sq.
mtrs. only.
24. Defendant denied that all the alleged short falls pleaded by
the plaintiff are false one and the defendant has not left any work
incomplete and duly complied all the responsibilities casted on it by the
law. Hence, prayed to dismiss the suit with compensatory cost.
25. In view of the rival pleadings of the parties, issues were
framed on 11.03.2026 at Exh. 21, to which I have recorded my findings
with reasons as follows :
Sr.
No.
Issues Findings
1. Does the plaintiff prove that, he is entitled for
declaration that the defendants have no right to
enter upon the suit property and to construct any
building?
Negative
2. Does the plaintiff prove that, he is entitled for
declaration that the defendants have no right to
interfere in the peaceful occupation and
possession of plaintiff on the Plot bearing CTS
No. 13/13 admeasuring 3957.30 sq. mtrs.?
Negative
3. Does the plaintiff prove that he is entitled for
permanent injunction restraining the defendants
and all persons claiming through them, from
entering into and obstructing peaceful possession
of plaintiff over the suit property?
Negative
4. Does the plaintiff prove that, he is entitled for
permanent injunction against the defendant
restraining them from developing the suit
property or any part thereon and to create third
party interest therein?
Negative
-- 25 of 142 --
26 Judgment in Suit No.17/2020
5. Does the plaintiff prove that, he is entitle for
mandatory injunction directing the defendants to
perform all the statutory obligations as per the
provisions of MOFA and RERA Act?
Partly
affirmative
in respect
of relief of
conveyanc
e only
6. Does the plaintiff prove that, he is entitle for a
decree od disclosure as mandatory under the
provisions of the MOFA and RERA Act?
Negative
7. Does the defendant prove that, the suit is bad for
non-joinder of necessary party?
Deleted
vide order
below CS
No.750/
2026
dated
01/04/20
26
8. Does the defendant prove that, the suit is barred
by law of Limitation?
Negative
9. Does the defendant prove that, the suit as framed
and filed by the plaintiff is not maintainable?
Negative
10. What Order and Decree? As per
final order.
26. In order to prove its case plaintiff has examined Mr. Ansari
Abdul Mohammed Rafique (PW-1) vide Examination-in-chief at Exh.23
and Architect Mr. Farzan Juwle (PW-2) at Exh.30. Both these witnesses
were duly cross-examined by the defendant at length. Thereafter,
plaintiff closed its side of evidence by filing Pursis at Exh.42 on
09/04/2026. Plaintiff has relied on following documents which are
marked Exhibits as under :
Sr. No. Nature of Document Exhibit Nos.
1. Registered Article of Agreement dated
05/05/2005. (Admitted by defendant)
25
-- 26 of 142 --
27 Judgment in Suit No.17/2020
2. Share Certificate dated 30/04/2017.
(Admitted by Defendant)
26
3. Resolution of Plaintiff Society dated
23/03/2026.
27
4. Sanctioned plan dated 26/07/2004.
(Admitted by Defendant)
33
5. Amended Plan dated 09/09/2019.
(Admitted by Defendant)
34
6. Letter dated 09/12/2024 by Architect Yash
Agrawal to Executive Engineer, MCGM.
(Admitted by Defendant)
35
7. Amended Building Plan dated 27/11/2025.
(Admitted by Defendant)
36
8. Letter dated 01/04/2025 issued by MCGM
to Architect Yash Agarwal. (Admitted by
Defendant)
37
9. Letter dated 09/10/2025 issued by
Architect Yash Agarwal to Executive
Engineer, MCGM. (Admitted by Defendant)
38
10 Note Sheet issued by MCGM. (Admitted by
Defendant)
39
11. Certificate under Section 63(4) of Bharatiya
Sakshya Adhiniyam.
40
27. In order to prove its defence defendant has examined Mr.
Manoj Babulal Vore (DW-1) vide his Examination-in-chief at Exh. 43
and Additional Examination-in-chief at Exh.43-A. Plaintiff duly cross-
examined said witness at length. Thereafter, defendant closed its side of
evidence by filing Pursis Exh.67 on 17/04/2026. Defendant has relied
on following documents which are marked Exhibits as under :
-- 27 of 142 --
28 Judgment in Suit No.17/2020
Sr. No. Nature of Document Exhibit Nos.
-- 28 of 142 --
29 Judgment in Suit No.17/2020
1. IOD dated 02/06.2003 along with approved
plan.
46
2. Letter dated 22/06/2004 along with
approved layout plan.
47
3. Letter dated 26/07/2004 along with
approved plan.
48
4. Letter dated 10/04/2006 along with
approved plan.
49
5. Deed of confirmation dated 20/09/2008
executed by defendant in favour of
Shamshad Ahemad Alam Khan in respect of
Flat No. 602 in Wing B.
50
6. Part Occupation Certificate dated
14/12/2006 along with completion plan
issued by MCGM infavour of defendant’s
Architect M/s Viral Associates.
51
7. Part Occupation Certificate dated
22/10/2010 along with completion plan
issued by MCGM infavour of defendant’s
Architect M/s Viral Associates.
52
8. Order dated 06/01/2017 passed by
Competent Authority, MOFA and District
Collector, Co-Operative Society in
Application No. 69 of 2016.
53
9. Concession Approval Plan dated
28/07/2019 issued by MCGM.
54
10. Commencement Certificate issued by
MCGM.
55
Documents Referred by Plaintiff to Defendant’s witness during Cross
Examination.
11. Government of Maharashtra Resolution
dated 23/11/2007.
57
12. Application for Concession filed by
Defendant’s Architect Yash Rajesh Agarwal
58
-- 29 of 142 --
30 Judgment in Suit No.17/2020
to MCGM.
13. Speaking Order dated 25/08/2021 issued
by MCGM to defendant.
59
14. Sketch Map showing plans approved in the
year 2004, 2006 and 2019 overlapping.
60
15. Undertaking dated 06/08/2019 given by
defendant to MCGM.
61
16. Note Sheet of MCGM. 62
R E A S O N S
28. Heard learned Advocate for plaintiff and learned Advocate
for defendant. Learned Advocate for plaintiff also filed written notes of
arguments (Exh.69) and Learned Advocate for Defendant also filed
written notes of arguments (Exh.70). Perused plaint, written statement,
oral as well as documentary evidence relied on by both the parties.
29. Learned Advocate for plaintiff argued that, defendant in
breach of the MOFA agreement entered with the flat owners of the
plaintiff’s societies members is carrying out the construction of 3rd
building adjacent to the already constructed two building of plaintiff’s
society. Defendant has no right or authority to commence the
construction of 3rd building “Wing C” which is in breach of the
provisions of Section 3 and 4 of the MOFA, as there was no clear and
complete disclosure made by the defendant to the flat owners, while
executing said agreement. Further, as there was no disclosure given by
the defendant and therefore the defendant was bound to take prior
consent in writing from the flat owners for commencing construction of
the new 3rd building as per the provision of Section 7 and 7A of MOFA.
But as the defendant has also failed to obtained the consent in writing
-- 30 of 142 --
31 Judgment in Suit No.17/2020
of the flat owners prior to commencing the construction of new building
which is also in breach of provisions of Section 7 and 7A of MOFA and
therefore defendant cannot make any new construction of the building.
He further submitted that the defendants witness has categorically
admitted during his cross-examination that he had not obtained any
informed consent in writing from flat owners for construction of the
third building. Said witness goes to admit that there is nothing to show
that he had contemplated and shown proposed new construction and
obtained consent from the flat owners.
30. It is further argued that, the defendant is bent upon to
construct the new 3rd building by availing benefits of DCPR 2034 and
also by availing of TDR benefit, which is not permissible in the facts and
circumstances of the present case. He further submitted that the Hon’ble
Bombay High Court in order dated 08/01/2024 in Appeal from Order
No. 418/2023 while rejecting the appeal of defendant recorded various
findings on the contractual and legal aspects relating to the impugned
construction of the third building, after detail hearing and analysis. The
said findings were also not disturbed by the Hon’ble Supreme Court in
SLP (Civil) No. 3420/2025 decided on 01/08/2025. Therefore, the
findings given by the Hon’ble Bombay High Court itself is sufficient to
decree the suit of the plaintiff.
31. Ld. Advocate for plaintiff also relied on the following
rulings in support of his contention :
i) Malad Kokila Co-operative Housing Society Ltd. -Vs- Modern
Construction Co. Ltd & Ors, reported in 2012 Supreme Court Cases
1310, wherein the Hon’ble Supreme Court in para Nos. 42 to 57 has
observed as under :
“42. Obviously, the flat takers stand assured that in case
of any change to be made in the project, as was disclosed
-- 31 of 142 --
32 Judgment in Suit No.17/2020
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 learning Jayantilal
Investments' case. This aspect has not been considered by
the learned Single Judge while passing the impugned
order."
43. The learned Single Judge of this Court had an
occasion to consider the aforesaid judgment of the Apex
Court, in the case of Megh Ratan Cooperative Housing
Society Ltd. v. Rushabh Rikhav Enterprises 2008 SCC
OnLine Bom 589: (2009) 1 Bom CR 361, wherein the
learned Single Judge has observed thus:
"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.
44. 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."
45. It can, thus, be seen that it is settled position of law,
-- 32 of 142 --
33 Judgment in Suit No.17/2020
as laid down by the Apex Court, that a prior consent of the
flat owner would not be required if the entire project is
placed before the flat taker at the time of agreement and
that the builder puts an additional construction in
accordance with the layout plan, building rules and
Development Control Regulations. It is, thus, manifest that
if the promoter wants to make additional construction,
which is not a part of the layout which was placed before
flat taker at the time of agreement, the consent, as required
under Section 7 of the MOFA, would be necessary."
46. It is thus clear that relying on the judgment of the
Apex Court in the case of Jayantilal Investment it has been
held that at the time of execution of the agreement with the
flat takers, promoters are statutorily obliged to place before
the flat taker the entire project scheme be it one building
scheme or multiple number of building scheme. It has been
further held by the Apex Court that obligations remains
unfettered because the concept of developability has to be
harmoniously read with concept of registration of Society
and conveyance of title. It has been held that once the entire
project has been placed before the plaintiff at the time of
agreement then the promoter is not required to obtain prior
consent of the flat takers as long as builder makes additional
construction in accordance with the lay out plans, building
rules and DC Regulations etc. It has been held that if the
construction which is sought to be made was not a part of
layout which was placed before the flat taker at the time of
agreement, the consent as required under Section 7 of the
MOFA would be necessary.
47. In the present case the plaintiffs have placed on record
one of model agreements which has been entered into
between the developer and one Tehmurash Patel in respect
of buildings S-1, S-2 and S-3. It will be relevant to refer to
recitals III, IV, V and VI of the said agreement which read
thus:
"III. The Vendors are desirous of constructing
building consisting of ground plus six upper storeys in each
of the aforesaid units, which would consist of shops on the
ground floor of various dimensions and residential flats
above the ground floors.
IV. The Vendors are desirous of constructing further
buildings as Unit S/4 consisting of ground and ten upper
storeys and Unit S/5 consisting of ground and one upper
-- 33 of 142 --
34 Judgment in Suit No.17/2020
storey upon plans in respect thereof being sanctioned by the
Municipal Corporation of Greater Bombay.
V. The layout in respect of these amalgamated plots
consists of 15 ft. wide paved paths, pedestrian path-way, car
parking, children park, garden, common toilet for ladies and
gents in each of the aforesaid Units.
VI. The construction of the building relating to S/1
unit is in advanced stage of completion whereas construction
of Units S/2 and S/3 has been started."
48. It can thus clearly be seen that the representation that
was made to the intending purchasers was that the developer
was desirous of constructing a building as 'unit S-4', which
was to consist of ground and 10 floors. A further
representation is made that the developer is also desirous of
constructing unit S-5 consisting of ground and one upper
storey. As already discussed herein above from the perusal of
the layout presented, the said S-5 was shown on a small
portion of open plot parallel to Swami Vivekanand Road.
Insofar as the appellant-society is concerned, the agreements
with the members thereof are executed in the year 1982 and
1984. It will be relevant to refer to clause-IV of the agreement
executed by the developer with Vishnu Kumar Gupta and
Manjuladevi Gupta in June 1982 which reads thus:
"IV. The Vendors are desirous of constructing further
buildings as Unit S/4 consisting of ground and ten upper
storeys and Unit S/5 consisting of ground and one upper
storey upon plans in respect thereof being sanctioned by the
Municipal Corporation of Greater Bombay."
49. It is thus clear that the representation given to the flat
purchasers as in 1982 was that the building S-5 was to consist
of ground + one floor. It is pertinent to note that the layout
which is annexed to the said agreement, does not show
existence of any proposed building S-5, on the contrary, the
entire area parallel to Swami Vivekanand Road is shown
open. Insofar as most of the agreements which were executed
in the year 1984, there is no mention of building S-5. It is to
be noted that in clause-13 of one of such agreements entered
between the developer and one Ramesh Bhatia, the developer
had only reserved his right to make additions or put up
additional structures and storeys on the building being
constructed. It is also pertinent to note that the layout which
is annexed to the said agreement also does not show
existence of any proposed building S-5. As already discussed
-- 34 of 142 --
35 Judgment in Suit No.17/2020
herein above even in respect of the agreements with the
members of the plaintiff Society, the proposed S-5 building is
shown to be a structure of ground + one storey. It appears
that for the first time in the plans which were sanctioned
from 23rd April, 2001, the building S-5 is shown to have a
structure of ground + four floors having a total built up area
of 888.96 sq. meters. No doubt that three members residing
in the S-1, S-2 and S-3 had filed Suit No. 3093/2004
alongwith Notice of Motion No. 2635/2004 in the City Civil
Court wherein the plans sanctioned on 23rd April, 2001 which
was revalidated from time to time was the subject matter. In
the said motion the learned Judge of the City Civil Court
finding that the balance FSI permitted the construction as per
the sanctioned plans therein and further considering that
since the distance of the proposed construction from the
existing building of the plaintiff range from approximately 13
meters to 26 meters and as such there was no obstruction to
the air and light of the existing buildings and that there was
no violation of the DC Regulations dismissed the motion. In
an appeal against order carried to this Court being AO No.
876/2004, the learned Single Judge dismissed AO finding
that apart from recreational ground already maintained in as
provided for the entire layout, the sanctioned plan of building
S-5 indicated that 5% of open spaces could be maintained as
recreational ground. However, the learned Judge made it
clear that respondents shall not create building S-5 except in
accordance with law and sanctioned plan. It is thus clear that
the proceedings before the learned City Civil Judge so also in
appeal against order were pertaining to 2001 plan wherein
building S-5 was to consist of ground + four floors having the
total built up area of 888.96 sq. meters. In any case the said
suit was filed by individual members and not by the present
plaintiff. In that view of the matter, I do not find that there is
substance in the contention raised on behalf of the developers
that said finding would apply as res judicata and as such the
present suit will not be maintainable.
50. As discussed herein above, as held by the Apex Court in
the case of Jayantilal Investment, it is obligatory on the part
of the promoter to make full and complete disclosure of the
development potentiality of the plot which is a subject matter
of agreement. It has also been held that promoter is not only
required to make disclosure concerning inherent FSI but he is
also required at the stage of the layout plan to declare
-- 35 of 142 --
36 Judgment in Suit No.17/2020
whether plot in question in future is being capable of loaded
with additional FSI/floating FSI/TDR. As held by the Apex
Court, at the time of execution of the agreement promoter is
statutorily obliged to place before the flat takers the entire
project/scheme. It has been held by the Apex Court that once
the entire scheme is placed before the flat takers at the time
of the agreement then the promoter is not required to obtain
prior consent of the flat taker as long as the construction is in
accordance with layout plan, building rules and DCR.
51. It will, therefore, have to be seen as to whether the
impugned construction which the developer desires to
construct is in accordance with the full disclosure that he is
required to make and as to whether it is in accordance with
the layout plan which was presented to the flat purchasers at
the time of execution of the agreement. As already discussed
herein above, the disclosure that the developer made to the
members of the plaintiff-society regarding the proposed S-5
building, which also was to be constructed if permitted by the
Corporation, was to have ground + one floor. The same was
located in one corner of the open plot abutting S-4 building.
Insofar as the members of the appellant-society is concerned,
in the agreement which have been entered into in 1982, there
is a reference to S-5 building of ground + one floor. Insofar as
members who have entered into agreement in 1984, there is
no mention in so far as S-5 building is concerned. It is
pertinent to note that in neither of the layouts annexed to
1982 agreement or 1984 agreement the proposed S-5
building is shown. On the contrary the area which is parallel
to S.V. Road on one side and is surrounded by paved pathway
on all other sides is shown as an open area. It is thus clear
that the lay out placed before the flat takers either does not
show S-5 building or if it shows S-5 building, the same is
shown to consist of ground + one floor. In my considered
view, therefore, in view of the law laid down by the Apex
Court in Jayantilal Investment, since the construction which is
sought to be made is not in accordance with layout plan
presented to the flat takers, the same cannot be permitted
unless there is a consent of the members of the plaintiffs and
the appellant-society.
52. I am unable to accept the contention on behalf of the
developer that if in the layout an area is earmarked for
proposed construction, it hardly matters if the layout shows a
building of 1+1 floor and the construction is in fact of four
-- 36 of 142 --
37 Judgment in Suit No.17/2020
storeys, 10 storeys or 28 storeys. In my view the said
argument is heard to be rejected. If such an argument is
accepted, it would frustrate the very purpose of beneficial
legislation like MOFA.
53. The very purpose that the entire layout should be
presented to the flat purchasers and that there should be full
disclosure made to him is with the purpose that he should be
aware as to what is the entire layout of the scheme in which
he is going to purchase the property. Suppose the original
layout shows only the proposed building of ground + one, the
flat taker would purchase the same with the knowledge that
only few more persons are likely to join the Society and there
would not be much effect on the facilities, amenities etc.
provided to the members of the Society. However, if a
structure of ground + one is converted in a towering structure
of 28 storeys, the entire scenario would change. The number
of additional members that would reside on the said plot
would increase by substantial number, thereby putting an
additional load on the infrastructure, amenities, facilities etc.
available on the said plot. In any case, if this is permitted, the
very purpose of requiring a developer to make full and
complete disclosure would stand frustrated. I am, therefore,
unable to accept the contention of the learned Counsel for the
developers in that regard.
54. That leaves to the next question as to whether in view
of various clauses in the agreements to which reference has
been made by the learned Counsel for the developers, there
has been a consent by the flat purchasers for the additional
construction or not?
55. After considering the various judgments on the issue, I
have observed in the case of Madhuvihar Co-operative Hsg.
Society (cited supra).
"46. Thus, there is consistent view of this Court, that the
blanket consent or authority obtained by the promoter, at the
time of entering into agreement of sale or at the time of
handing over possession of the flat, is not consent within the
meaning of Section 7(1) of the MOFA, inasmuch as, such a
consent would have effect of nullifying the benevolent purpose
of beneficial legislation.
56. It is, thus, clear that it is a consistent view of this Court,
that the consent as contemplated under Section 7(1) of the
MOFA has to be an informed consent which is to be obtained
upon a full disclosure by the developer of the entire project and
-- 37 of 142 --
38 Judgment in Suit No.17/2020
that a blanket consent or authority obtained by the promoter at
the time of entering into agreement of sale would not be a
consent contemplated under the provisions of the MOFA. I am
in respectful agreement with the consistent view. The
interpretation placed by the learned Single Judges of this Court
is in consonance with the benevolent provisions of the MOFA
which have been enacted for protecting flat takers."
57. It is thus clear that in unequivocal terms, it has been held
that a blanket consent or authority obtained by the promoter at
the time of entering into an agreement of sale is not a consent
within the meaning of Section 7 of the MOFA. It has to be an
informed consent which is to be obtained on full disclosure by
the developer of the entire project. In that view of the matter,
the contention in that regard is also liable to be rejected.
ii) Dosti Corporation -Vs- Sea Flama Co-op. Hsg. Society Ltd.
reported in 2016 (5) Mh.L.J., wherein the Hon’ble Bombay High Court
in para Nos. 81 to 100 has observed as under :
“81. This court in case of Ravina Mutenia & Others (supra)
has held that once the buildings shown in the approved plan
submitted in terms of the regulations under an existing
scheme filed before the authorities under MOFA have been
completed and possession is handed over, the builder/owner
cannot contend, that because he has not formed the society
and/or not conveyed the property by sale deed under the
provisions of MOFA, he is entitled to take advantage of any
additional F.S.I. that may become available because of
subsequent events. It is held that subsequent amendment of
the lay out plan after the building plan is registered under
MOFA, without the consent, prima facie, of the flat purchasers
would not be permissible. Once the building is completed and
the purchasers are put in occupation in terms of plan filed and
the time to form the society or convey the property in terms of
the agreement or the rules framed under MOFA is over, the
permission of such purchasers would be required. In the said
judgment this court considered a situation where the building
completion certificate for the building of the plaintiffs was
issued in the year 1997. The developer had to put up the
construction, based upon the permission/license granted and
to construct the building and to convey the title by sale deed
in terms of Rule 9. It is held that if property had been
-- 38 of 142 --
39 Judgment in Suit No.17/2020
conveyed, prima facie the remaining FSI or FSI which became
subsequently available on the facts of the case, would be to
the society to whom the land had to be conveyed.
82. This court considered the fact that the building in that
matter was approved in December, 2001. It is accordingly held
that the builder did not have any rights under which they
were entitled to put up an additional building contrary to
section 7-A of the MOFA. It is not in dispute that in this case,
the construction of all four wings was already completed
sometime in the year 2008. The Municipal Corporation had
already issued a completion certificate under the provisions of
Mumbai Municipal Corporation Act in respect of the said four
wings in which the defendant no.1 developer had already
utilized the entire FSI except 2.5 sq.mtrs. It is also not in
dispute that the members of the plaintiff and defendant nos. 3
to 5 society were already put in possession by the defendant
no.1 much prior to the defendant no.1 applying for IOD in
respect of the public parking lot and for other constructions
proposed to be made.
83. This Court in case of Madhuvihar Co-operative Housing
Society (supra) has held that there is consistent view of this
Court, that the blanket consent or authority obtained by the
promoter, at the time of entering into agreement of sale or at
the time of handing over possession of the flat, is not consent
within the meaning of Section 7(1) of the MOFA, inasmuch as,
such a consent would have effect of nullifying the benevolent
purpose of beneficial legislation. It is held that the consent as
contemplated under Section 7(1)of the MOFA has to be an
informed consent which is to be obtained upon a full disclosure
by the developer of the entire project and that a blanket
consent or authority obtained by the promoter at the time of
entering into agreement of sale would not be a consent
contemplated under the provisions of the MOFA.
84. This Court also considered the judgment of Division
Bench in case of Manratna Developers vs. Megh Ratan Co-
operative Housing Society Ltd.2009(2) Bom.C.R.836. The
learned Single Judge of this Court distinguished the said
judgment of the Division Bench in case of Manratna Developers
(supra). In this case though the case of the defendant no.1 is
that the defendant no.1 had proposed to carry out the
construction in a phased manner, the fact remains that the
entire FSI except 2.5 sq.mtrs. was already utilized as then
available under the provisions of Development Control
-- 39 of 142 --
40 Judgment in Suit No.17/2020
Regulation in construction of four wings which have been
occupied by the members of the plaintiff and defendant nos. 3
to 5 society. The construction of all the said four wings which
were subject matter of various agreements of flat purchasers
and the defendant no.1 was over much prior to the date of the
introduction of section 33(24) in the Development Control
Regulations. The defendant no.1 admittedly did not take any
consent of the members of the plaintiff and defendant nos. 3 to
5 society in respect of any future development on the suit plot
based on any informed disclosure to the members of the
plaintiff and defendant nos. 3 to 5 society. None of the parties
had contemplated the introduction of the provisions of
Regulation 33(24) of the Development Control Regulation
when the agreements were entered into between the plaintiff
and defendant nos. 3 to 5 society by the defendant no.1. In my
view there is substance in the submission of Mr.Bharucha and
Mr.Reis, learned senior counsel appearing for the societies that
right to get conveyance of the suit property from the defendant
no.1 in favour of the society had already accrued and thus
without their consent, the defendant no.1 could not have
applied for modification of the plan and/or for carrying out any
further development on the suit property as contemplated
under the provisions of MOFA.
85. This Court in case of Ratna Rupal Co-operative Housing
Society Ltd. (supra) adverted to the judgment of this court in
case of White Towers Co- operative Housing Society Ltd. vs.
S.K. Builders (2008) 6 Bom.C.R.371 and several other
judgments. In case of White Towers Co-operative Housing
Society Ltd.(supra), this court has held that the promoter is not
only required to make disclosure concerning the inherent F.S.I.,
but 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 F.S.I./floating FSI/TDR. It is held that 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. It is further held that the
prior consent of the flat purchasers would only not be required,
if the entire project is placed before the flat purchasers at the
time of the agreement and the developer puts additional
construction in accordance with the layout plan.
86. In the said judgment, it is held that if the developer
wants to make kvm AO117.16 additional construction which is
-- 40 of 142 --
41 Judgment in Suit No.17/2020
not a part of the layout, consent of the flat purchasers would be
required. It is held that once the buildings shown in the
approved plan are completed and possession is handed over,
the Developer cannot contend that because he has not formed
the Society and because he had not conveyed the property, he
can take advantage of the additional FSI which became
subsequently available. Such FSI will go to the society to whom
the land had to be conveyed. It is held that the advantage of
the FSI would be taken only when the building is under
construction and only for the buildings forming part of the
development plan or layout plan already approved. It is held
that subsequent amendment of layout plan without the consent
of the flat purchasers was not permissible. Therefore, once the
building is completed in terms of the plan and the flat
purchasers are to be put in occupation, permission of the flat
purchasers would be required. If subsequently FSI becomes
available under the Development Control Rules, it would be
available to the Society to whom the land had to be conveyed.
87. This court also considered the judgment of this Court in
case of Bajranglal Eriwal and Ors. v. Sagarmal Chunilal and
Ors. 2008 (5) Mh.L.J. 571 = (2008) 6 Bom. C.R. 887 in which
it is held that the specific consent was relatable to the
particular project or the scheme of Development which was
intended to be implemented. The scheme which could be
implemented could only be under the sanctioned plan or a plan
under the layout shown to the flat purchasers. In the absence
of that the statutory embargo to alter or add to any structures
on the plot would continue and would be lifted only upon the
written consent of the flat purchasers. It is held that the
blanket consent taken in the agreement would defeat public
policy and would dilute the purposive object and intent of the
legislature and would not eliminate the abuses and
malpractices which it sought to remedy.
88. It is held that the additional FSI cannot be claimed by
the Developer for putting up any additional building not under
the approved plan. The failure and neglect to register the
society and convey the property would certainly not give any
right to the Developer to step upon the property or to claim
any FSI. The FSI belongs to the plot. The plot must be taken to
be conveyed after the statutory period and thus the FSI that
would be available only to the true owner of the plot. Failure to
convey would not constitute the Developer a true owner. That
would be putting a premium upon his default and that would
-- 41 of 142 --
42 Judgment in Suit No.17/2020
constitute an abuse of legal process. It is held that any FSI for
putting up any additional construction not in the initial
sanctioned plan can therefore never ensure for the benefit of
the Developer except with the express written permission of all
the flat purchasers or the Society, after its formation. It is held
that such FSI would belong to and can be exploited by none
other than the Society of flat purchasers. This Court in the said
judgment of Ratna Rupal Co-operative Housing Society Ltd.
(supra) also adverted to the judgment of Division Bench in case
of Manratna Developers (supra) and distinguished the same.
Admittedly in this case, the defendant no.1 did not disclose any
plan in respect of the additional construction sought to be put
up by the defendant no.1 to the plaintiff and defendant nos. 3
to 5 society before obtaining such sanction from the Municipal
Corporation nor obtained their disclosed consent.
89. This Court in case of Ravindra Mutenja & Ors. (supra)
has held that once the buildings shown in the approved plan
submitted in terms of the regulations under an existing scheme
filed before the authorities under MOFA Act, have been
completed and possession handed over, the builder/owner
cannot contend, that because he has not formed the society
and/or not conveyed the property by sale deed under the Act,
he is entitled to take advantage of any additional F.S.I. that
may become available because of subsequent events. It it held
that it would be so at the stage the building is under
construction or the building is not completed and/or
purchasers are not put in occupation provided such building
forms part of the development plan and/or lay out plan already
approved. Subsequent amendment of the lay out plan after the
building plan is registered under MOFA, without the consent,
prima-facie, of the flat purchasers would not be permissible.
90. It is held in the said judgment that once the building is
completed and the purchasers are put in occupation in terms
of plan filed and the time to form the society or convey the
property in terms of the agreement or the Rules framed under
MOFA is over, the permission of such purchasers would be
required. It is held that if property had been conveyed, prima-
facie the remaining F.S.I. or F.S.I. which become subsequently
available on the facts of the case, would be to the society to
whom the land had to be convened.
91. It is not in dispute that in this case the defendant no.1
had to carry out construction in accordance with the plan
referred to in the agreement for sale and I.O.D. issued by the
-- 42 of 142 --
43 Judgment in Suit No.17/2020
Municipal Corporation based on such sanctioned plan. The
construction of all four wings was fully completed. The
Municipal Corporation had already granted completion
certificate. The members of the plaintiff and defendant nos.3
to 5 society were already put in possession of their respective
flats by the defendant no.1. The subsequent amendment of the
lay out plan in my view could not have been effected by the
defendant no.1 without the consent of the flat purchasers and
such amendment without such consent was not permissible
and thus not binding on the flat purchasers. The judgment of
this Court in case of Ravindra Mutenia & Ors. (supra) squarely
applies to the facts of this case.
92. The Division Bench of this Court in case of Lakeview
Developers (supra) has after adverting to the judgment of the
Supreme Court in case of Javantilal Investments vs.
Madhuvihar Co-operative Housing Society (supra) has held
that though the object behind the amendment in section 7(1)
and insertion of section 7(A) was to give maximum weightage
to the exploitation of development rights which existed in the
land by construction of additional buildings subject to total
layout allowing construction of more buildings and subject to
complying with the building rules or building bye-laws or
Development Control Regulations. It is however clarified that
at the same time this could be done only after full and true
disclosure of particulars mentioned in Section 3(2) is made
incorporating the same as provided under sub-section (1-A) to
section 4 in the agreements with the flat purchasers, which has
to be harmoniously read with section 10 of the MOFA which
cast obligation on the promoter to form a Co-operative
Housing Society of the flat takers and under section 11 to
complete his title and convey the title to the Society within a
prescribed time under Rule 8 of the said Rules.
93. It is held that the developer cannot claim that he can
continuously exploit the building potential for eternity without
conveying the land in favour of the society. The objection to
convey the land in favour of the society within a prescribed
time and the obligation to make true and full disclosure under
clauses 3 and 4 of Form V remains unfettered. This Court had
considered a situation, where the developer had fully utilized
the full F.S.I /potential of the land and was under an obligation
to convey the property after the construction of 10th building
and was trying to construct four other buildings by claiming
additional T.D.R. and trying to load it on 4 additional buildings.
-- 43 of 142 --
44 Judgment in Suit No.17/2020
This Court accordingly held that the full development
potential/F.S.I. had already been utilized by the developer and
his claim that additional buildings were constructed by
utilizing the additional T.D.R. prima-facie did not appear to be
correct if the lay out plan produced by the plaintiff society was
taken into consideration. This Court held that even if there is
any contractual condition mentioned in the contract permitting
the construction till the entire land was developed, the
statutory obligations would override the contractual clauses in
the agreement.
94. In my view, there was neither any disclosure made by the
defendant no.1 to the flat purchasers about any such
development in future based on any further F.S.I. being made
available on the basis of the construction of public parking lot
nor such additional F.S.I. was contemplated at that stage nor
any consent was taken from the flat purchasers after such F.S.I.
was made available for construction of new buildings. The
Division Bench of this Court in case of Lakeview Developers
(supra) has considered similar facts and has rejected the
identical submissions made by the defendant no.1 in this case.
The judgment of the Division Bench of this Court, in my view,
squarely applies to the facts of this case. I am respectfully
bound by the said judgment.
95. A perusal of the said judgment of the Division Bench of
this Court in case of Lakeview Developers (supra) indicates
that the Division Bench has also adverted to the earlier
judgment of the Division Bench of this Court in case Man Ratna
Developers (supra) and has distinguished the said judgment
and has held that the observations made by the Division Bench
of this Court in Man Ratna Developers (supra) did not much
assist the developer. In my view, reliance placed by learned
senior counsel for the defendant no.1 on the judgment of this
Court in case of Man Ratna Developers (supra) would be of no
assistance to the defendant no.1 and is clearly distinguishable
in the facts of this case.
96. This Court in case of Noopur Developers (supra) after
adverting to the judgment of the Division Bench of this Court
in case of Man Ratna Developers (supra) and after adverting to
Rules 8 and 9 framed under the MOFA has held that the
Legislature had certainly intended that the formality of
conveying the title and formation of society must be completed
within the time as stipulated so that an unscrupulous promoter
should not take disadvantage of the same. This Court also held
-- 44 of 142 --
45 Judgment in Suit No.17/2020
that the permission of the flat purchasers would be necessary if
time to form the society and convey the property is over or
expired. This Court after adverting to the judgment of the
Supreme Court has held that the promoter is required to make
disclosure concerning the inherent F.S.I. and also at the stage of
lay out plan he is required to declare whether the plot in
question in future is capable of being loaded with additional
F.S.I. /floating F.S.I./T.D.R. It is held that if the entire scheme
including the information about T.D.R./F.S.I. is not disclosed,
then the promoter loses his right to use the residual F.S.I. It is
held that if the original layout plan would have shown the
proposed construction in phased manner, then the promoter
did have right to construct the additional building without
permission of the flat purchasers.
97. In this case, the original plan shown to the flat
purchasers did not show any construction on any portion of the
land other than those four wings. It is not in dispute that the
plan shown to the flat purchasers was in respect of the entire
plot and not only in respect of those four wings. The entire
F.S.I. except 2.5 sq. mtrs. was already exhausted. The
defendant no.1 had not disclosed that the plot in question was
capable of being loaded with the additional F.S.I./floating
F.S.I./T.D.R. The judgment of this Court in case of Noopur
Developers (supra) squarely applies to the facts of this case.
98. This Court in case of Malad Kokil Co-operative Housing
Soceity Ltd. & Anr. (supra) after adverting to the judgment of
the Supreme Court in case of Javantilal Investments (supra)
has considered a situation where the developer had shown the
layout plan and did not disclose regarding the proposed
additional buildings. It is held that the reason that the entire
layout should be presented to the flat purchaser and that there
should be full disclosure made to him is with the purpose that
he should be aware as to what the entire lay out of the scheme
in which he is going to purchase the property. This Court has
considered an illustration that if the original layout shows only
the proposed building of ground + one, the flat taker would
purchase the same with the knowledge that only few more
persons are likely to join the society and there would not be
much effect on the facilities, amenities etc. provided to the
members of the society. However, if a structure of ground +
one is converted in a towering structure of 28 storeys, the
entire scenario would change. The number of additional
members that would reside on the said plot would increase by
-- 45 of 142 --
46 Judgment in Suit No.17/2020
substantial number, thereby putting an additional load on the
infrastructure, amenities, facilities etc. available on the said
plot.
99. It is held that if this is permitted, the very purpose of
requiring a developer to make full and complete disclosure
would stand frustrated. This Court rejected the contention of
the developer that if any layout area is earmarked for proposed
construction, it hardly matters if the layout shows a building of
1+1 floor and the construction is in fact of four storeys, 10
storeys or 28 storeys. It is held that if such an argument is
accepted, it would frustrate the very purpose of beneficial
legislation like MOFA.
100. In my view, merely because there was a clause in the
agreement for sale that the defendant no.1 would be entitled to
carry out construction on a portion outside the yellow line
boundary in future and had alleged to have obtained the
blanket consent of the flat purchasers, since there was no
disclosure or full disclosure about the proposed construction on
the portion of the land outside the yellow line boundary area
and the fact whether the land in question was capable of any
further construction on the date of sanction of such layout
plan, the defendant no.1 could not have applied for
amendment to the sanctioned plan without obtaining prior
consent of the flat purchasers in writing. Such blanket consent
in the agreement for sale without fill disclosure is contrary to
the provisions of MOFA and cannot be enforced by the
developer. In my view, the judgment of this Court in case of
Malad Kokil Co-operative Housing Society Ltd. & Anr. (supra)
squarely applies to the facts of this case. There is thus no merit
in the submissions made by Mr.Chinoy, learned senior counsel
for the defendant no.1 that there was informed and full
disclosure made to the flat purchasers about the development
on two portions of the suit plot outside the yellow boundary
line. Admittedly, the defendant no.1 had amended the plan
more than once after showing such plan to the flat purchasers
without obtaining any informed consent after making full
disclosure of the proposed amendment by the developer on the
suit plot.
iii) Ratan Rupal Co-operative Housing Society Ltd. -Vs- Rupal
Builders and Ors. reported in 2011 SCC OnLine Bom 779, wherein the
Hon’ble Bombay High Court in para Nos. 22 to 27 has observed as
-- 46 of 142 --
47 Judgment in Suit No.17/2020
under :
“22. Paragraph 38 of the judgment it considered the
observation of the Supreme Court judgment in the case of
White Towers Cooperative Housing Society Ltd. Vs. S.K.
Builders & Ors. (2008) 6 Bom.C.R. 371 thus:
"The promoter is not only required to make disclosure
concerning the inherent F.S.I., 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 F.S.I./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.".
23. The Court, therefore, concluded in paragraph 40 of the
judgment that it is settled position in law that the prior
consent of flat purchasers would only not be required, if the
entire project is placed before the flat purchasers at the time
of the agreement and the Developer puts additional
construction in accordance with the layout plan. It further
concluded that if the Developer wants to make additional
construction which is not a part of the layout consent of the
flat purchasers would be required. The Court further held that
once the buildings shown in the approved plan are completed
and possession is handed over, the Developer cannot contend
that because he has not formed the Society and because he
has not conveyed the property, he can take advantage of the
additional FSI which become subsequently available. That
would go to the society to whom the land had to be conveyed.
The advantage of the FSI would be taken only when the
building is under construction and only for the buildings
forming a part of the development plan or layout plan already
approved. It further held that subsequent amendment of
layout plan without the consent of the flat purchasers was not
permissible. Therefore, once the building is completed in
terms of the plan and the flat purchasers are to be put in
occupation, permission of the flat purchasers would be
required. Therefore, if subsequently FSI becomes available
under the D.C Rules, it would be available to the Society to
whom the land had to be conveyed.
24. Further the Court considered the judgment of the
Supreme Court in Bajranglal Eriwal & Ors. vs. Sagarmal
Chunilal & Ors. (2008) 6 Bom. C.R. 887 holding that the
-- 47 of 142 --
48 Judgment in Suit No.17/2020
specific consent was relatable to the particular project or the
scheme of Development which was intended to be
implemented. The scheme which could be implemented could
only be under the sanctioned plan or a plan under the layout
shown to the flat purchasers. In the absence of that the
statutory embargo to alter or add to any structures on the plot
would continue and would be lifted only upon the written
consent of the flat purchasers.
25. The judgment further held that this consent was not a
general consent made out in the agreement between the flat
purchasers such as the consent relied upon by Mr. Setalvad in
this case. Such a consent would defeat public policy. Such a
consent would dilute the purposive object and intent of the
legislature and would not eliminate the abuses and
malpractices which it sought to remedy. Hence the judgment
observed that the consent must be an affirmative acceptance
of all the purchasers who had agreed to purchase the flats and
could not be even implied consent.
26. The Court in that case held that the Developer was
obliged to execute the conveyance within 4 months from 28th
January 1993 which was the date of the registration of the
Society. It held that the additional structure could not be
constructed by the Developers without the consent of the
Society. It, therefore, injuncted the Developers from putting
up any further additional construction.
27. Consequently, such additional FSI cannot be claimed by
the Developer for putting up any additional building not under
the approved plan. Further the failure and neglect to register
the society and convey the property would certainly not give
any right to the Developer to step upon the property or to
claim any FSI. The FSI belongs to the plot. The plot must be
taken to be conveyed after the statutory period. The FSI
would, therefore, be available only to the true owner of the
plot. Failure to convey would not constitute the Developer a
true owner. That would be putting a premium upon his
default. It would constitute an abuse of legal process. Any FSI
for putting up any additional construction not in the initial
sanctioned plan can therefore never ensure for the benefit of
the Developer except with the express written permission of all
the flat purchasers or the Society, after its formation. Such FSI
would belong to and can be exploited by none other than the
Society of flat purchasers.”
-- 48 of 142 --
49 Judgment in Suit No.17/2020
iv) Eternia Co-operative Housing Society Ltd. & Ors. -Vs- Lakeview
Developers and Ors., reported in 2015 SCC OnLine Bom 723, wherein
the Hon’ble Bombay High Court in para Nos.51 to 62, 68, 69 and 74
has observed as under :
“51. In Jayantilal Investments v Madhuvihar Co-operative
Housing Society & Ors., the Supreme Court had occasion to
consider the MOFA as amended. The matter arose out of an
order of this Court in a First Appeal, by which this Court
allowed the cooperative society's appeal and dismissed that of
the promoter (the appellant before the Supreme Court). This
Court directed the promoter to execute a conveyance in
favour of the society and restrained further construction on
the suit plot. This Court held that the promoter was not
entitled to put up further construction on the plot. It appears
that the impugned construction in that case was of additional
wings. The Supreme Court observed that the purpose of the
1986 amendment to the statute was to remove the basis of the
Kalpita Enclave decision, and the object of the amendment
was to maximize the exploitation of development rights that
existed in the land in question. However, the Supreme Court
also noticed Section 3 of the MOFA, which imposes a statutory
obligation on the promoter to make a "full and true disclosure"
of the particulars mentioned in section 3(2), including the
nature, extent and description of common areas and facilities.
Further, in Section 4(1-A) of the MOFA, also introduced in
1986, a form of the flat purchase agreement was prescribed,
and this form required inter alia a declaration of the FSI
available in respect of that land. The promoter is also required
to disclose that no part of that FSI has been used elsewhere
and, if used, particulars of that utilization are to be set out.
Paragraphs 16 to 20 of this decision of the Supreme Court
read:
16. Therefore, the legislature has sought to regulate the
activities of the promoter by retaining Section 3 and 4 in the
Act. It needs to be mentioned at this stage the question which
needs to be decided is whether one building with several
wings would fall under amended Section 7(1)(ii). Section 7-A
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 layout
plan. That construction cannot exceed the development
potentiality of the plot in question. Section 10 of MOFA casts
-- 49 of 142 --
50 Judgment in Suit No.17/2020
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 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 submit an application to the Registrar for registration of
the society within four months from the date on which the
minimum number of persons required to form such society
(60%) have taken flats. Rule 9 provides that if no period for
execution of a conveyance is agreed upon, the promoter shall,
subject to his right to dispose of the remaining flats, execute
the conveyance within four months from the date on which
the society is registered.
17. Reading the above provisions of MOFA, we are required to
balance the rights of the promoter to make alterations or
additions in the structure of the building in accordance with
the layout plan on the one hand vis-à-vis his obligations to
form the society and convey the right, title and interest in the
property to that society. The obligation of the promoter under
MOFA to make true and full disclosure to 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 Section7(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
-- 50 of 142 --
51 Judgment in Suit No.17/2020
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 Form V 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 local
authority concerned at the time of sanctioning the said plans
or thereafter and shall, before handing over possession of the
flat to the flat purchaser, obtain from the local authority
concerned 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 mtrs.
only and that no part of the said floor space index has been
utilised by the promoter elsewhere for any purpose
whatsoever. In case the said floor space index has been
utilised by the promoter elsewhere, then the promoter shall
furnish to the flat purchaser all the detailed particulars in
respect of such utilisation of said floor space index by him. In
case while developing the said land, the promoter has utilised
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 FAR (FSI) 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 FAR (FSI), shall be available to the society."
(emphasis supplied)
18. 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 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
-- 51 of 142 --
52 Judgment in Suit No.17/2020
or multiple number of buildings scheme. Clause 4 shows the
effect of the formation of the Society.
19. In our view, the above condition of true and full disclosure
flows from the obligation of the promoter under MOFA vide
Section 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 developability has
to be harmoniously read with the concept of registration of
society and conveyance of title. Once the entire project is
placed before the flat takers at the time of the agreement,
then the promoter is not required to obtain prior consent of
the flat takers as long as the builder puts up additional
construction in accordance with the layout plan, building rules
and Development Control Regulations, etc.
20. In the light of what is stated above, the question which
needs to be examined in the present case is whether this case
falls within the ambit of amended Section 7(1)(ii) or whether
it falls within the ambit of Section 7-A of MOFA. As stated
above, under Section 7(1) after the layout plans and
specifications of the building, as approved by the competent
authority, are disclosed to the flat takers, the promoter shall
not make any other alterations or additions in the structure of
the building without the prior consent of the flat takers. This
is where the problem lies. In the impugned judgment, the
High Court has failed to examine the question as to whether
the project undertaken in 1985 by the appellant herein was in
respect of construction of additional buildings or whether the
project in the layout plan of 1985 consisted of one building
with 7 wings. The promoter has kept the requisite percentage
of land open as recreation ground/open space. Relocation 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 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
-- 52 of 142 --
53 Judgment in Suit No.17/2020
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 layout plan in 1985. If it is
the building with 7 wings intended to be constructed in terms
of the layout plan then the High Court is also required to
consider the effect of the judgment in Ravindra Mutneja v.
Bhavan Corpn. [(2003) 5 Bom CR 695] in which the learned
Single Judge has held that if a building is put up as a wing of
an existing building, it cannot be constructed without the
prior permission of the flat takers. In that connection, the
High Court shall also consider permission dated 16-11-1984
under Section 21(1) of the ULC Act, application made to the
competent authority when initial layout plan was sanctioned,
applications for amendments to layout plans made from time
to time and also agreements between promoter and flat
takers.
(Emphasis supplied)
52. The Supreme Court remitted the matter back to the High
Court for a re-consideration. As I read it, there are some
cardinal principles that emerge from Jayantilal. First, the
effect of the 1986 MOFA amendment is clear. There must be a
full and complete disclosure, and once that is done, further
consent of flat purchasers is not necessary. There is a
distinction between a project that is of, say, a single building
with or without multiple wings, and a scheme or layout with
multiple buildings. As the Supreme Court says, that
determines the applicability or non-applicability of Section
7(1)(ii) of the MOFA. But all of this is predicated on the
completeness and accuracy of the disclosure that is made.
53. Before considering the High Court decision that
followed Jayantilal, I must make reference to the 2003
decision in Ravindra Mutenia v. Bhavan Corpn. to which the
Supreme Court referred. The dispute in that case was
whether the construction in question was of several wings of
one building or several buildings under one scheme. Mr.
Justice Rebello, as he then was, said:
12. ... What is relevant therefore, is that there can be
construction of additional building or structure constructed or
to be constructed by the owner/developer under a scheme or
project of development in the lay out after obtaining the
approval of local authority. The real question therefore, is, if
the building in the lay out plan were constructed and there
was no F.S.I. available and the purchasers have been put in
possession but Society is not registered or conveyance effected
-- 53 of 142 --
54 Judgment in Suit No.17/2020
in favour of the society, can it mean the builder because of
subsequent events can alter the lay out and construct
additional building, in accordance with the Building rules or
building Bye-laws or Development Control Rules made under
any law for the time being in force. The Court in my opinion is
not precluded from examining whether the construction prima
facie being put up is as per the development plan as filed and
registered under Section 4 of the MOFA Act. If it is the case of
the defendant Nos. 3 to 5 that building is an independent
building then the developer-defendant No. 3 to 5 must show
that the building plans, as approved and sanctioned are in
terms of the lay out plan and confirm to the requirements of
the building rules and bye-laws when there is an existing
building on the plot. This will require leaving open space and
as also recreational areas. The Mumbai Municipal
Corporation, the licensing authority under Section 302, is also
the development authority under the provisions of the
Maharashtra Regional Town Planning Act 1966. The lay-out
plan would have be approved under the M.R.T.P. Act,
Regulation and bye-laws. Therefore, the builder must obtain
the permission both under the Development Regulation as
also licence under the Mumbai Municipal Corporation Act,
1888.
13. The real issue as has been noted earlier is what is the
stage up to which the developer/owner can put up additional
construction after the building in terms of the registered plan
has been constructed and occupied. In my opinion, once the
buildings shown in the approved plan submitted in terms of
the regulations under an existing scheme filed before the
authorities under MOFA Act, have been completed and
possession handed over, the builder/owner cannot contend,
that because he has not formed the society and/or not
conveyed the property by sale deed under the Act he is
entitled to take advantage of any additional F.S.I. that may
become available because of subsequent events. That would
be so at the stage the building is under construction or the
building is not completed and/or purchasers are not put in
occupation provided such building forms part of the
development plan and/or lay out plan already approved.
Subsequent amendment of the lay out plan after the building
plan is registered under MOFA, without the consent, prima
facie, of the flat purchasers would not be permissible. It may
be possible to accept that the development plan could be
-- 54 of 142 --
55 Judgment in Suit No.17/2020
modified as long as the right of the purchasers and the
benefits which they are entitled to including recreational and
open areas are not affected by the revised development plan.
Once the building is completed and the purchasers are put in
occupation in terms of plan filed and the time to form the
society or convey the property in terms of the agreement or
the rules framed under MOFA is over, the permission of such
purchasers would be required.
In the instant case, the building completion certificate for the
plaintiff's building, was issued in the year 1997. The
builder/owner Defendant Nos. 1, 3 and 4 had to put up the
construction, based upon the permission/license granted. The
defendant Nos. 1, 3 and 4 had to construct the building and to
convey the title by sale deed in terms of Rule 9. If property
had been conveyed, prima facie the remaining FSI or FSI
which become subsequently available on the facts of the case,
would be to the society to whom the land had to be conveyed.
The record shows that the building was approved in
December, 2001. It cannot prima facie, be said that defendant
Nos. 1, 2, 4 and 5 have any rights under which they are
entitled to put up an additional building contrary to Section
7A of the Act.
(Emphasis supplied)
54. I see the present situation very like the one Mr. Justice
Rebello contemplated: buildings having been completed,
possession having been granted and societies formed, FSI
having been shown to be exhausted, promised or assured
layouts having been followed, but no conveyance having been
executed, the developers now contend that new changes in
the building and development law (fungible FSI or additional
FSI, for instance, which were unavailable when the project
began) can now be deployed on the same site, and the hapless
flat purchasers have no say in the matter.
55. Mr. Chinoy then cites the Division Bench decision of this
Court in Manratna Developers v Meghratan Co-operative
Housing Society Ltd., an appeal against an ad-interim order.
There, the case of the plaintiff was that modified plans
reduced the area of the RG meant for flat owners; that
additional FSI was illegally permitted by the planning
authority; and lastly that without the consent of flat
purchasers, no additional structures could be developed if
these were not shown in the original sanctioned plans on
which the flat purchasers agreed to purchase the flats. On a
reading of Section 7 and Section 7A of the MOFA, the Division
-- 55 of 142 --
56 Judgment in Suit No.17/2020
Bench held that no such consent was required. Jayantilal was
referred to and followed. The plaintiff argued that additional
FSI (TDR or floating FSI) had not been initially disclosed and
could not now be used. Since TDR did not exist at the time of
the flat purchase agreement, the other side contended, no
question arose of disclosure. The decision makes it clear that
this, too, was a phased development. The peculiarity in that
case lies in its special circumstances and facts: only one wing
was constructed; the rest could not be taken up in the phases
planned because of some sitting tenants. That area became
free for development only after some tenants vacated. It was
on that basis that the development potential of the land got
then unlocked and the plans were modified and permitted.
The Court found, as a matter of fact, that the developer had
satisfied the overarching condition noted by the Supreme
Court to be an essential part of the MOFA, viz., the
requirement of full and true disclosure. Manratna was carried
to the Supreme Court. The order dated 22nd January 2009 on
the SLP is unreported. It directs that an application under
Order 39 Rules 1 and 2 be heard and finally decided by the
trial court. The developers were permitted to continue
construction, but without claiming equity, and the matter was
thus remitted, the trial court being directed to decide the
matter uninfluenced by either the Division Bench decision or
the order on the SLP.
56. But let us turn Jayantilal in its second iteration when it
once again came before a learned single Judge of this Court:
Madhuvihar Co-operative Housing Society Ltd v Jayantilal
Investments & Ors.11 ("Madhuvihar"). This is actually the
starting point of Mr. Kapadia's arguments. In paragraph 22,
Mr. Justice B.R. Gavai noted the three points that fell for
consideration: first, whether the project in question was of
seven independent buildings or one building with seven
wings; second, whether the promoter had a liability to execute
a conveyance in favour of the society; and third, whether the
promoter was entitled to erect additional constructions on the
plot without the consent of the existing flat purchasers. After
setting out some of the legislative history and provisions, the
learned single Judge noted Section 11 of the MOFA cast an
obligation on the promoter to convey title to the society or
association of flat purchasers. Rule 9 stipulates that where no
period is specified by agreement for the conveyance, it is to be
done within four months from the date on which the
-- 56 of 142 --
57 Judgment in Suit No.17/2020
cooperative society, company or association of flat purchasers
is registered.
57. As a finding of fact, the learned single Judge found that
the project was of one building with seven wings. This was
reflected in various plans as also in the promotional materials
and brochures. Jayantilal was extensively quoted (paragraphs
15 to 19 of the SCC report). In paragraph 37, Mr. Justice
Gavai once again reiterated the imperative of true and full
disclosure, following the interpretation given to Section 3 and
4 of the MOFA by the Supreme Court in Jayantilal. Paragraph
39 of Madhuvihar refers to the decision of the learned single
Judge in Manratna, though that decision was overturned by
the appeal court (the decision to which I have referred above).
Although Mr. Chinoy submits that this has led to an error in
the Madhuvihar decision, I do not think that is so. For when
Mr. Justice Gavai in Madhuvihar refers in paragraph 40 to a
settled position in law, he is not referring to the overruled
decision of the learned single Judge at the ad-interim stage in
Manratna; he is referring to the line of authority from
Jayantilal onward. This is clear from the wording of para 40
itself:
40. It can, thus, be seen that it is settled position of law, as laid
down by the Apex Court, that a prior consent of the flat owner
would not be required if the entire project is placed before the
flat taker at the time of agreement and that the builder puts an
additional construction in accordance with the layout plan,
building rules and Development Control Regulations. It is,
thus, manifest that if the promoter wants to make additional
construction, which is not a part of the layout which was
placed before flat taker at the time of agreement, the consent,
as required under Section 7 of the MOFA, would be necessary.
(Emphasis supplied)
58. The learned single Judge in Madhuvihar then went on
to consider the effect of Ravindra Mutneja (again, in terms of
the Supreme Court order in Jayantilal).
59. Turning to the question of consent, Mr. Justice Gavai
held that the 'consent' contemplated by the 'true and full
disclosure' mandated by the MOFA necessarily had to be an
informed consent. It could not be a blanket or omnibus
consent. The Court held:
46. Thus, there is consistent view of this Court, that the
blanket consent or authority obtained by the promoter, at the
time of entering into agreement of sale or at the time of
-- 57 of 142 --
58 Judgment in Suit No.17/2020
handing over possession of the flat, is not consent within the
meaning of Section 7(1) of the MOFA, inasmuch as, such a
consent would have effect of nullifying the benevolent purpose
of beneficial legislation.
47. It is, thus, clear that it is a consistent view of this Court,
that the consent as contemplated under Section 7(1) of the
MOFA has to be an informed consent which is to be obtained
upon a full disclosure by the developer of the entire project
and that a blanket consent or authority obtained by the
promoter at the time of entering into agreement of sale would
not be a consent contemplated under the provisions of the
MOFA. I am in respectful agreement with the consistent view.
The interpretation placed by the learned Single Judges of this
Court is in consonance with the benevolent provisions of the
MOFA which have been enacted for protecting flat takers.
(Emphasis supplied)
60. A decision of a Division Bench of this Court in Grand
Paradi Co-operative Housing Society Ltd v Mont Blanc
Properties and Industries Pvt. Ltd. & Anr. was also cited before
Mr. Justice Gavai, who found that far from supporting the
promoter, the decision assisted the society before him:
54. In so far as the reliance placed by the learned Counsel
appearing for the promoter, on the judgment of this Court, in
the case of Grand Paradi Cooperative Housing Society Ltd. v.
Mont Blanc Properties & Industries Pvt. Ltd. and Anr. Appeal
No. 599 of 2002, is concerned, in my view, the said judgment
would not be applicable to the facts of the present case. ... It is
further to be noted that as a matter of fact, the observations of
the Division Bench, in paragraph 10 of the judgment, would
rather support case of the Society than the promoter, which
reads thus:
“It is, thus, clear that the builder is always entitled to raise
additional structures if he discloses the additional structures in
the layout plan itself at the time when he sales the flats. No
consent of the flat owners is necessary for raising additional
structures. But if the additional structures are not disclosed in
the layout plan then previous consent of the flat owners is
necessary."
	(emphasis supplied)
61. Mr. Chinoy then places the decision of another learned
single Judge of this Court (Mr. Justice S. C. Dharmadhikari) in
Jamuna Darshan Co-operative Housing Society Ltd & Ors. v
J.M.C. & Meghani Builders.That was an order on a Notice of
Motion by the plaintiffs. The principal relief sought, and on
-- 58 of 142 --
59 Judgment in Suit No.17/2020
which both sides addressed the Court, was the prayer for an
injunction restraining further construction. The two decisions
considered were Jayantilal and Kalpita Enclave, and, it seems,
though not referred to by name, the decision of the Division
Bench in Manratna. Paragraph 43 of Jamuna Darshan
expressly notes that the additional construction impugned was
shown in the layout plans and that these were annexed to the
flat purchase agreements. The plaintiff in that case had
annexed only the agreement, not its annexures; these were
produced before the learned single Judge by the defendants,
who were found to be correct in their submission. I do not see
how this case assists Mr. Chinoy in the matter at hand. It
seems to me to have turned narrowly on the facts of that case
and it is not, I think, possible to import that case to the
present one.
62. Finally, there is the decision of Mr. Justice Gavai in
Malad Kokil Co-operative Housing Society Ltd & Anr. v
Modern Construction Co. Lrd. & Ors. The project in question
had several buildings. There seems to have been a contractual
clause not to construct other building without prior consent.
The learned single Judge referred to the various provisions of
the MOFA, and the decision in Jayantilal and other cases, and
then held:
It is thus clear that relying on the judgment of the Apex Court
in the case of Jayantilal Investment it has been held that at
the time of execution of the agreement with the flat takers,
promoters are statutorily obliged to place before the flat taker
the entire project scheme be it one building scheme or
multiple number of building scheme. It has been further held
by the Apex Court that obligations remains unfettered because
the concept of developability has to be harmoniously read
with concept of registration of Society and conveyance of title.
It has been held that once the entire project has been placed
before the plaintiff at the time of agreement then the
promoter is not required to obtain prior consent of the flat
takers as long as builder makes additional construction in
accordance with the lay out plans, building rules and DC
Regulations etc. It has been held that if the construction which
is sought to be made was not a part of layout which was
placed before the flat taker at the time of agreement, the
consent as required under Section 7 of the MOFA would be
necessary.
(Emphasis supplied)
-- 59 of 142 --
60 Judgment in Suit No.17/2020
.
68. I believe there is a clear line from Jayantilal to Zircon. I
understood Mr. Chinoy's submissions to be an invitation to
hold that Madhuvihar and Malad Kokil were per incuriam (or
something very like it) because those decisions did not follow
the Division Bench in Manratna. But that decision was in an
appeal against an ad- interim order (which it reversed), and in
an SLP from the Division Bench order in Manratna, the
Supreme Court directed the Order 39 Rr 1, 2 application to be
heard and also directed that the trial court hearing that
application would be uninfluenced by the Division Bench
judgment and the observations of the Supreme Court itself.
Now if the Division Bench judgment in Manratna did not bind
the trial court in that very matter, I find it difficult to see how
it could have bound Mr. Justice Gavai in either Madhuvihar or
Malad Kokil. The Division Bench judgment in Manratna can
constitute no precedent. I do not think it is even remotely
possible to find that Mr. Justice Gavai's decisions in
Madhuvihar and Malad Kokil were incorrect, per incuriam or
do not constitute binding law. As to the reference in
Madhuvihar to the ad-interim (over-ruled) order in
Meghratan, it is of no moment, as we have already seen. The
frame of the law that Madhuvihar enunciated was based, in
express terms, on the decision in Jayantilal.
69. How should Jayantilal be read? Mr. Chinoy's submission
seems to me to suggest that so long as the possibility of future
loading of TDR and future additional construction is
mentioned in the FPAs, that is sufficient compliance with the
law and the promoter or developer has no further obligation.
He is not required to be specific about the additional buildings
or the TDR, and any layouts or representations that he may
have made or shown to the flat purchasers are all
inconsequential. I find this a very problematic formulation.
When Mr. Kapadia says, therefore, that the promoter must be
held to the development potential that he showed, without
the TDR, I think that is the correct position in law. To hold
otherwise would necessarily mean accepting the position that
the Division Bench order in Meghratan holds the field and
Gavai J's decisions in Madhuvihar and Malad Kokil are plainly
wrong. I can do no such thing.
.
.
74. In Malad Kokil, Gavai J referred to a government
-- 60 of 142 --
61 Judgment in Suit No.17/2020
notification regarding the amount of TDR that can be used.
There is also an order or notification dated 10th April 2008
and another of 7th December 2007. These are Exhibits "F-1"
and "F-2" to the Affidavit in Rejoinder dated 3rd February
2014. The latter, issued under Section 154 of the Maharashtra
Regional & Town Planning Act, 1966, specifically recognizes
precisely such problems, where after construction is complete,
additional TDR is sought to be loaded. In its office translation,
this notification of 2007 says:
It is brought to the notice of the Government that, while
sanctioning plan in the beginning from the Planning
Authority for development of any land by the Developer, at
that time no inclusion of T.D.R. use therein and after
completion of some construction, then the Housing Society is
formed. But the conveyance deed was not made in the name
of society with structures thereon. Thereafter, again
Developer demands permission for amalgamation of surround
area with vacant plot and the construction was made on that
site without taking approval of the Housing Society or Plot
holder and T.D.R. of said land was utilized on vacant plot and
carried out construction of multi storied building. Therefore,
the right of plot holders are affected. Now, the Government is
giving direction to all Municipal Corporations and all other
planning authorities having provisions of T.D.R. as per Section
154 of the Maharashtra Regional and Town Planning Act,
1966 as follows.
DIRECTION
1) While granting building permission along with use of
T.D.R. by all Municipal Corporations and other Planning
Authorities having provision of T.D.R., T.D.R. of all land
should be permitted in the ratio of balance potential area of
the concerned Housing Society without permitting at same
place.
2) The said order is in force immediately for the date of
this Government Order.”
v) Lakeview Developers and Ors. -Vs- Eternia Co-operative Housing
Society Ltd. & Ors. reported in 2015 SCC OnLine Bom 3824, wherein
the Hon’ble Bombay High Court in para Nos.53 to 57, 76 to 81 has
observed that,
“53. The fact remains that the Apex Court in Jayantilal
Investments (supra) interpreted the provisions of amended
-- 61 of 142 --
62 Judgment in Suit No.17/2020
Section 7-A and tried to harmoniously construe it with other
provisions of the said Act. The observations made by the
Apex Court, therefore, to that extent, are binding on the High
Court and, therefore, any observations which are contrary to
the said observations made by the High Court would stand
automatically overruled and the interpretation given by the
Apex Court shall prevail. In this context, therefore, it will be
necessary to reproduce said paragraphs 15 to 19 from the
said judgment of Apex Court in Jayantilal Investments
(supra). The said paras 15 to 19 read as under:-
“15. The judgment of the Bombay High Court in Kalpita
Enclave case was based on the interpretation of unamended
Section 7 of MOFA. Consequently, it was held that a
promoter was not entitled to put up additional structures not
shown in the original lay out plan without the consent of the
flat takers. Thus, consent was attached to the concept of
additional structure. Section 7 was accordingly amended.
Section 7-A was accordingly inserted by Maharashtra
Amending Act No. 36/86. Section 7-A was inserted in order
to make the position explicit, which according to the
legislature existed prior to 1986, implicitly. Section 7 of
MOFA came to be amended and for the purpose of removal
of doubt, additional Section 7-A came to be added by
Maharashtra Act 36/86. By this amendment, the words
indicated in the parenthesis in the unamended Section 7(1)
(ii) namely, "or construct any additional structures" came to
be deleted and consequential amendments were made in
Section 7(1)(ii). Maharashtra Act No.36/86 operated
retrospectively. Section 7-A was declared as having been
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 7-A 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 7-A 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
-- 62 of 142 --
63 Judgment in Suit No.17/2020
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 7-A of the
MOFA as amended. Therefore, having regard to the
Statement of Objects and Reasons for substitution of Section
7(1)(ii) by the Amendment Act 36/86, it is clear that the
object was to make legal position clear that even prior to the
amendment of 1986, it was never intended that the original
provision of Section 7(1)(ii) of MOFA would operate even in
respect of construction of additional buildings. In other
words, the object of enacting Act No. 36/86 was to change
the basis of the judgment of the Bombay High Court in
Kalpita Enclave case. By insertion of Section 7-A vide
Maharashtra Amendment Act 36/86 the legislature had made
it clear that the consent of flat takers was never the criteria
applicable to construction of additional buildings by the
promoters. The object behind the said amendment was to
give maximum weightage to the exploitation of development
rights which existed in the land. Thus, the intention behind
the amendment was to remove the impediment in
construction of the additional buildings, if the total lay out
allows construction of more buildings, subject to compliance
of the building rules or building bye-laws or Development
Control Regulations. At the same time, the legislature had
retained Section 3 which imposes statutory obligations on the
promoter to make full and true disclosure of particulars
mentioned in Section 3(2) including the nature, extent and
description of common areas and facilities. As stated above,
Sub-section (1A) to Section 4 was also introduced by the
legislature by Maharashtra Act 36/86 under which the
promoter is bound to enter into agreements with the flat
takers in the prescribed form. Under the prescribed form,
every promoter is required to declare the FSI available in
respect of the said land. The promoter is also required to
declare that no part of that FSI has been utilized elsewhere,
and if it is utilized, the promoter has to give particulars of
such utilization to the flat takers. Further, under the
proforma agreement, the promoter has to further declare
utilization of FSI of any other land for the purposes of
developing the land in question which is covered by the
-- 63 of 142 --
64 Judgment in Suit No.17/2020
agreement."
“16. Therefore, the legislature has sought to regulate the
activities of the promoter by retaining Section 3 and 4 in the
Act. It needs to be mentioned at this stage the question which
needs to be decided is whether one building with several
wings would fall under amended Section 7(1)(ii). Section 7-
A 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 submit an
application to the Registrar for registration of the society
within four months from the date on which the minimum
number of persons required to form such society (60%) have
taken flats. Rule 9 provides that if no period for execution of
a conveyance is agreed upon, the promoter shall, subject to
his right to dispose of the remaining flats, execute the
conveyance within four months from the date on which the
society is registered."
“17. Reading the above provisions of MOFA, we are required
to balance the rights of the promoter to make alterations or
additions in the structure of the building in accordance with
the lay out plan on the one hand vis-a-vis his obligations to
form the society and convey the right, title and interest in the
property to that society. 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
-- 64 of 142 --
65 Judgment in Suit No.17/2020
amendment made in Section 7(1)(ii) of MOFA. That
obligation is strengthened by insertion of Sub-section (1A) in
Section 4 of MOFA by Maharashtra Amendment Act 36/86.
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 form V 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 mtrs 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.
-- 65 of 142 --
66 Judgment in Suit No.17/2020
(emphasis supplied)"
“18. 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 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 lay out 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 or buildings scheme. Clause 4
shows the effect of the formation of the Society."
“19. In our view, the above condition of true and full
disclosure flows from the obligation of the promoter under
MOFA vide Section 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
developability has to be harmoniously read with the concept
of registration of society and conveyance of title. Once the
entire project is placed before the flat takers at the time of the
agreement, then the promoter is not required to obtain prior
consent of the flat takers as long as the builder puts up
additional construction in accordance with the layout plan,
building rules and Development Control Regulations etc."
Analysis of the judgment in paras 42 to 45:
54. From the above observations, it can be seen that the Apex
Court has not construed the amendment in Section 7(1) and
insertion of Section 7-A in isolation but has interpreted it in
the light of other relevant provisions viz. Section 3 and 4 of
MOFA and Clauses 3 and 4 of Form V of the said Rules and
the obligation of the developer of registration of Society and
conveying the title. In a nutshell, therefore, though object
behind the said amendment was to give maximum weightage
to the exploitation of development rights which existed in the
land by construction of additional buildings subject to total
layout allowing construction of more buildings and subject to
complying with the building rules or building bye-laws or
Development Control Regulations, at the same time this could
be done only after full and true disclosure of particulars
-- 66 of 142 --
67 Judgment in Suit No.17/2020
mentioned in Section 3(2) is made incorporating the same as
provided under sub-section (1-A) to Section 4 in the
agreements with the flat purchasers, which has to be
harmoniously read with Section 10 of the MOFA which cast
obligation on the promoter to form a Co-operative Housing
Society of the flat takers and under Section 11 complete his
title and convey the title to the Society within a prescribed
time under Rule 8 of the said Rules.
55. In our view, therefore, from the aforesaid judgment, it
is clear that the developer cannot claim that he can
continuously exploit the building potential for eternity
without conveying the land in favour of the Society. The
obligation to convey the land in favour of the Society within a
prescribed time and the obligation to make true and full
disclosure under Clauses 3 and 4 of Form V remains
unfettered. If the full development potential of the land is
exhausted and the obligation for conveyance of land in favour
of the Society has arisen as per the Act and Rules and if the
developer fails to do so then any further benefit which would
accrue to the developer on account of any additional TDR or
FSI made available, cannot be used by him for the purpose of
construction of additional buildings. For example, recently,
the Government of Maharashtra has announced that the FSI
which would be available in the City of Greater Mumbai
would be increased by 0.6. The benefit of this announcement
cannot be availed by a developer who has not conveyed the
property in favour of the Society though he was under legal
obligation to do so, having fully developed the building
potential of the land under building as per true and full
disclosure under Section 3 and 4 of the said Act and Clauses 3
and 4 of Form V of the said Rules. He, therefore, cannot
having failed in his obligation to convey the property within
the time prescribed thereafter claim that full building
potential has not been utilized and claim right to construct
further buildings.
56. In our view, from the facts and circumstances of the
present case, it can be seen that though the
developer/promoter had fully utilized the full FSI/potential of
the land and was under an obligation to convey the property
after construction of the 10th building on Sector IV-A, he is
now trying to construct four other buildings by claiming
additional TDR and trying to load it on the four additional
buildings. In our view, prima facie, it can be seen that full
-- 67 of 142 --
68 Judgment in Suit No.17/2020
development potential/FSI has already been utilized by the
developer and his claim that additional buildings were
constructed by utilizing the additional TDR prima facie does
not appear to be correct if the layout plan produced by the
Plaintiffs/Societies is taken into consideration.
57. Since the judgment of the Apex Court in Jayantilal
Investments (supra) is the only judgment on the point under
the MOFA, ratio of the said judgment will prevail and will be
binding on this Court for that purpose. In our view, it is not
necessary to minutely scrutinize the ratio of the judgments
which have been shown to us by Mr. Aspi Chinoy the learned
Senior Counsel appearing on behalf of the developer, though
we can observe that the facts in most of these cases are
different and, therefore, even otherwise the ratio of these
judgments will not apply to the facts of this case. The
contention of the developer that he is entitled to carry on the
construction till the entire land i.e. the land not only in
Sector IV-A but in all Sectors 1 to 13 is developed, is not
correct. Neither the tripartite agreement nor the lease
agreement executed between the land owners and developer
nor the individual agreement between the developer and the
flat purchasers can be construed in this manner as it would
render the statutory provisions of MOFA nugatory. Even if
such contractual conditions are mentioned in the contract,
statutory obligation would override the contractual clauses in
the agreement. Reliance on the note below the proforma of
the lease therefore is misconceived and it cannot be used to
interpret the meaning which is sought to be given by the
developer that till the entire land is fully developed in all
sectors, he is entitled to exploit the development potential in
the land in Sector IV-A.
.
.
76. The law of precedent is quite well settled. The Apex
Court in Zee Telefilms Ltd. and another vs. Union of India
and others has observed in paras 254, 255 & 256 as under:-
“Precedent
254. Are we bound hands and feet by Pradeep Kumar Biswas
(2002) 5 SCC 111? The answer to the question must be
found in the law of precedent. A decision, it is trite, should
not be read as a statute. A decision is an authority for the
questions of law determined by it. Such a question is
determined having regard to the fact situation obtaining
-- 68 of 142 --
69 Judgment in Suit No.17/2020
therein. While applying the ratio, the court may not pick out
a word or a sentence from the judgment divorced from the
context in which the said question arose for consideration. A
judgment, as is well known, must be read in its entirety and
the observations made therein should receive consideration
in the light of the questions raised before it. (See Punjab
National Bank v. R.L. Vaid (2004) 7 SCC 698).
255. Although decisions are galore on this point, we may
refer to a recent one in State of Gujarat v. Akhil Gujarat
Pravasi V.S. Mahamandal (2004) 5 SCC 155 wherein this
Court held : (SCC p.172, para 19)
"It is trite that any observation made during the course of
reasoning in a judgment should not be read divorced from
the context in which it was used."
256. It is further well settled that a decision is not an
authority for a proposition which did not fall for its
consideration. It is also a trite law that a point not raised
before a court would not be an authority on the said
question. In A-One Granites v. State of U.P. (2001) 3 SCC
537 it is stated as follows : (SCC p.543, para 11)
"11. This question was considered by the Court of Appeal in
ancaster Motor Co. (London) Ltd. v. Bremith Ltd.(1941) 1
KB 675 and it was laid down that when non consideration
was given to the question, the decision cannot be said to be
binding and precedents sub silentio and without arguments
are of no moment”
Observations on provisions of MOFA:
77. The object and reason behind passing of the MOFA can
be seen from the Preamble of the said Act and it was passed
because it became necessary to protect the interest of
buyers/flat purchasers.
78. Division Bench of this Court in Kalpita's case (supra)
has held that if the building plans are to be altered or
changes are made after the agreements were executed with
the flat purchasers, their consent was necessary. The said
judgment, essentially, was given in a case where there was
one building constructed by the developer. There were
several schemes where developer had planned to construct
buildings on one lay out and very often the flat purchasers in
one building were not entitled to raise an objection about
construction of another building in the layout. In order to
resolve the said anomaly which was arisen because of the
judgment in Kalpita's case, Section 7-A was inserted.
-- 69 of 142 --
70 Judgment in Suit No.17/2020
79. In view of addition of Section 7A obligation which was
cast on the developer to give true and proper disclosure
continued in the form of Section 3 and 4 continued.
80. Section 7-A was therefore inserted to reconcile the
conflicting interest of the developer and the flat purchasers.
The principal idea appears to be that the flat purchaser
should not be deprived of the rights which were promised to
him when he purchased the flat not only in respect of the
plan which was shown to him in respect of the existing
building but also the other amenities could not be reduced or
taken away by obtaining permission from the Planning
Authority or Local Authority and, at the same time, right of
the developer to construct the additional buildings which was
permissible under the law and after true and proper
disclosure was made by him to the flat purchaser is also
protected. These conflicting interests therefore have been
reconciled by Section 7 and Section 7A. What was noticed by
the legislature was that the developer, after construction of
the building and formation of the Societies continue to carry
on the construction unabatedly and did not convey the
property in time and, therefore, restriction was put on him by
the MOFA to convey the property as per terms of the contract
or within four months or the competent authority could
direct deemed conveyance to be made in respect of the said
property under section 11 of the said Act. The developer in
most of the cases was found to impose heavy maintenance
charges on the members and would also continue with the
development of the plot without proper and true disclosure
and, therefore, the said restriction was imposed. The Apex
Court, therefore, in the case of Jayantilal has observed that
provisions of completion of conveyance/assignment by the
developer and the provisions for construction of additional
buildings as provided under Section 7A have to be construed
harmoniously.
Law laid down by the Supreme Court on grant of injunction:
81. In the present case, developer on the pretext that he
has right not to convey till the plot is fully developed by
relying on note to the proforma lease agreement is trying to
postpone the conveyance/assignment to eternity and
continue to exploit the land despite exploitation of FSI which
was available to him on the land and, therefore, the learned
Single Judge, in our view, has rightly come to the conclusion
that prima facie case had been made out by the Societies and
-- 70 of 142 --
71 Judgment in Suit No.17/2020
the point of hardship was also in their favour. We concur
with the view which has been taken by the learned Single
Judge. The Apex Court in Gangubai Bably Chaudhary and
Others vs. Sitaram Bhalchandra Sukhtankar has observed
in para 6 as under:-
“6. When an interim injunction is sought, the court may have
to examine whether the party seeking the assistance of the
court was at any time in lawful possession of the property
and if it is so established one would prima facie ask the
other side contesting the suit to show how the plaintiffs were
dispossessed? We pin-pointed this question and heard the
submission. We refrain from discussing the evidence and
recording our conclusions because evidence is still to be led
and the contentions and disputes have to be examined in
depth and any expression of opinion by this court may
prejudice one or the other party in having a fair trial and
uninhibited decision. Having given the matter our anxious
consideration, we are satisfied that this is not a case in
which interim injunction could be refused. Similarly, we are
of the opinion that if respondents are allowed to put up
construction by the use of the F.S.I. for the whole of the land
including the land involved in dispute, the situation may
become irreversible by the time the dispute is decided and
would preclude fair and just decision of the matter. If on the
contrary injunction is granted as prayed for the respondents
are not likely to be inconvenienced because they are in
possession of about 9000 sq. metres of land on which they
can put up construction."
Ultimately, the Court will grant order of injunction and
consider those factors which, in our view, have been rightly
considered by the learned Single Judge. The Apex Court in
Zenit Mataplast Private Limited vs. State of Maharashtra
and has observed in paras 30 and 31 has observed as
under:-
"30. Interim order is passed on the basis of prima facie
findings, which are tentative. Such order is passed as
temporary arrangement to preserve the status quo till the
matter is decided finally, to ensure that the matter does not
become either infructuous or a fait accompli before the final
hearing. The object of the interlocutory injunction is to
protect the plaintiff against injury by violation of his right
for which he could not be adequately compensated in
damages recoverable in the action if the uncertainty were
-- 71 of 142 --
72 Judgment in Suit No.17/2020
resolved in his favour at the trial (vide Anand Prasad
Agarwalla v. Tarkeshwar Prasad, [(2001) 5 SCC 568] and
State of Assam v. Barak Upatyaka D.U. Karmachari Sanstha
[(2009) 5 SCC 694 : (2009) 2 SCC (L&S) 109]."
"31. Grant of an interim relief in regard to the nature and
extent thereof depend upon the facts and circumstances of
each case as no straitjacket formula can be laid down. There
may be a situation wherein the respondent-defendant may
use the suit property in such a manner that the situation
becomes irretrievable. In such a fact situation, interim relief
should be granted (vide M. Gurudas v. Rasaranjan [(2006) 8
SCC 367 : AIR 2006 SC 3275] and Shridevi v. Muralidhar
[(2007) 14 1 (2009) 10 SCC 388 APPL-189-15&128-15.doc
SCC 721). Grant of temporary injunction is governed by
three basic principles i.e. prima facie case; balance of
convenience; and irreparable injury, which are required to
be considered in a proper perspective in the facts and
circumstances of a particular case. But it may not be
appropriate for any court to hold a mini-trial at the stage of
grant of temporary injunction [vide S.M. Dyechem Ltd. v.
Cadbury (India) Ltd. [(2000) 5 SCC 573: AIR 2000 SC
2114] and Anand Prasad Agarwalla [(2001) 5 SCC 568],
SCC p.570, para 6]."
vi) Noopur Developers -Vs- Himanshu V. Ganatra & Ors. reported in
2010(7) Mh.L.J. 694, wherein the Hon’ble Bombay High Court
referring to ruling of M/s. Jayantilal Investments vs. Madhunihar Co-
operative Housing Society & Ors. reported in JT 2007(2) SC 368, has
observed that
"18. Therefore, the legislature has sought to regulate the
activities of the promoter by retaining Sections 3 and 4 in
the Act. It needs to be mentioned at this stage the question
which needs to be decided is whether one building with
several wings would fall under amended 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
-- 72 of 142 --
73 Judgment in Suit No.17/2020
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 submit an
application to the Registrar for registration of the society
within four months from the date on which the minimum
number of persons required to form such society (60%)
have taken flats. Rule 9 provides that if no period for
execution of a conveyance is agreed upon, the promoter
shall, subject to his right to dispose of the remaining flats,
execute the conveyance within four months from the date
on which the society is registered.
19. Reading the above provisions of MOFA, we are required
to balance the rights of the promoter to make alterations or
additions in the structure of the building in accordance with
the lay out plan on the one hand vis-`-vis his obligations to
form the society and convey the right, title and interest in
the property to that society. 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 7A in MOFA. That obligation remains unfettered
even after the amendment made I in Section 7(1)(ii) of
MOFA. That obligation is strengthened by insertion of sub-
section (1A) in Section 4 of MOFA by Maharashtra
Amendment Act 36/86. 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
-- 73 of 142 --
74 Judgment in Suit No.17/2020
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 the residual F.A.R. (F.S.I.), shall be
available to the Society."
(emphasis supplied)
20. 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 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 lay out
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
-- 74 of 142 --
75 Judgment in Suit No.17/2020
statutorily to place before the flat takers the entire project/
scheme, be it a one building scheme or multiple number of
buildings scheme. Clause 4 shows the effect of the formation
of the Society.
21. In our view, 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.
Once the entire project is placed before the flat takers at the
time of the agreement, then the promoter is not required to
obtain prior consent of the flat takers as long as the builder
put up additional construction in accordance with the lay
out plan, building rules and Development Control
Regulations etc..
22. In the light of what is stated above, the question
which needs to be examined in the present case is whether
this case falls within the ambit of amended Section 7(1)(ii)
or whether it falls within the ambit of Section 7A of MOFA.
As stated above, under Section 7(1) after the lay out plans
and specifications of the building, as approved by the
competent authority, are disclosed to the flat takers, the
promoter shall not make any other alterations or additions
in the structure of the building without the prior consent of
the flat takers. This is where the problem lies. In the
impugned judgment, the High Court has failed to examine
the question as to whether the project undertaken in 1985
by the appellant herein was in respect of construction of
additional buildings or whether the project in the lay out
plan of 1985 consisted of one building with 7 wings. The
promoter has kept the requisite percentage of land open as
recreation ground/ open space. Relocation 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,
-- 75 of 142 --
76 Judgment in Suit No.17/2020
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) Bom C.R. 695 in
which the learned single Judge has held that if a building is
put up as a wing of an existing building, it cannot be
constructed without the prior permission of the flat takers.
In that connection, the High Court shall also consider
Permission dated 16.11.1984 under section 21(1) of ULC
Act, application made to the competent authority when
initial lay out plan was sanctioned, applications for
amendments to lay out plans made from time to time and
also agreements between promoter and flat takers."
The Supreme Court says in Para 18 of the Judgment that
Section 7A allows a builder to construct additional building
provided the construction forms part of a scheme or project.
Therefore, what is necessary is that any additional
construction sought to be made must form part of the
original scheme or project. This is made clear by the
Supreme Court in Para 20 of the Judgment. The Judgment
says that the promoter is required to make disclosure
concerning the inherent FSI and also at the stage of lay out
plan he is required to declare whether the plot in question
in future is capable of being loaded with additional
FSI/floating FSI/TDR. Further in para 21, the Supreme
Court says that if the promoter places all these things
before the flat purchasers, then the permission of the flat
purchasers would not be necessary. Necessarily, therefore, if
the entire scheme including the information about TDR/FSI
is not disclosed, then the promoter looses his right to use
the residual FSI. If we look into the original plan, it would
be clear that the plan disclosed construction of one building
only having A and B wings. The plan further shows that one
old building (which is now demolished) and the W.C were
the structures which were to be retained. Thus, what was
-- 76 of 142 --
77 Judgment in Suit No.17/2020
represented was that that old building shown to the east in
plan and the W.C to the north were to be retained. It did
not disclose that as and when the tenants in old building
would vacate the old building, the same would be pulled
down and new construction would be put up there. The
Plan therefore did not show proposed development of these
area in a phased manner. Had the original lay out plan
shown the proposed construction in a phased manner, then
the promoter did have a right to make construction of
additional building without permission of the flat
purchasers. Even if we look into the judgment of Division
Bench of this Court in M/s.Manratna Developers's case, the
ratio is that if the original plan shows the construction of
building in a phased manner on single plot, then the
promoter is not supposed to take consent of the flat owners.
Such is not the case here.
vii) M/s Jayantila Investments -Vs- Madhuvihar Co-operative Housing
& Ors. reported in (2007)9 Supreme Court Cases 220, wherein the
Hon’ble Supreme Court in para Nos. 14, 15, 16, 17, 18 and 19 has laid
down as under:
“14. 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 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."
(emphasis supplied)
The amended Section 7 reads as follows:
“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.
-- 77 of 142 --
78 Judgment in Suit No.17/2020
(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 or additions in the structure of
the building without the previous consent of all the
persons who have agreed to take the flats in such
building."
(emphasis supplied)
15. The judgment of the Bombay High Court in Kalpita
Enclave case (supra) was based on the interpretation of
unamended Section 7 of MOFA. Consequently, it was held
that a promoter was not entitled to put up additional
structures not shown in the original lay out plan without
the consent of the flat takers. Thus, consent was attached
to the concept of additional structure. Section 7 was
accordingly amended. Section 7-A was accordingly
inserted by Maharashtra Amending Act No. 36/86. Section
7A was inserted in order to make the position explicit,
which according to the legislature existed prior to 1986,
implicitly. Section 7 of MOFA came to be amended and for
the purpose of removal of doubt, additional Section 7-A
came to be added by Maharashtra Act 36/86. By this
amendment, the words indicated in the parenthesis in the
unamended Section 7(ii), namely, "or construct any
additional structures" came to be deleted and
consequential amendments were made in Section 7(1)(ii).
Maharashtra Act No. 36/86 operated retrospectively.
Section 7-A was declared as having been 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 7-A 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 7-A, it
-- 78 of 142 --
79 Judgment in Suit No.17/2020
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 7-A of the MOFA as amended. Therefore,
having regard to the Statement of Objects and Reasons for
substitution of Section 7(1)(ii) by the Amendment Act
36/86, it is clear that the object was to make legal position
clear that even prior to the amendment of 1986, it was
never intended that the original provision of Section 7(1)
(ii) of MOFA would operate even in respect of construction
of additional buildings. In other words, the object of
enacting Act No. 36/86 was to change the basis of the
judgment of the Bombay High Court in Kalpita Enclave
case. By insertion of Section 7-A vide Maharashtra
Amendment Act 36/86 the legislature had made it clear
that the consent of flat takers was never the criteria
applicable to construction of additional buildings by the
promoters. The object behind the said amendment was to
give maximum weightage to the exploitation of
development rights which existed in the land. Thus, the
intention behind the amendment was to remove the
impediment in construction of the additional buildings, if
the total lay out allows construction of more buildings,
subject to compliance of the building rules or building by-
laws or Development Control Regulations. At the same
time, the legislature had retained Section 3 which imposes
statutory obligations on the promoter to make full and
true disclosure of particulars mentioned in Section 3(2)
including the nature, extent and description of common
areas and facilities. As stated above, sub-section (1A) to
Section 4 was also introduced by the legislature by
Maharashtra Act 36/86 under which the promoter is
bound to enter into agreements with the flat takers in the
prescribed form. Under the prescribed form, every
promoter is required to declare the FSI available in respect
of the said land. The promoter is also required to declare
that no part of that FSI has been utilized elsewhere, and if
-- 79 of 142 --
80 Judgment in Suit No.17/2020
it is utilized, the promoter has to give particulars of such
utilization to the flat takers. Further, under the proforma
agreement, the promoter has to further declare utilization
of FSI of any other land for the purposes of developing the
land in question which is covered by the agreement.
16. Therefore, the legislature has sought to regulate the
activities of the promoter by retaining Sections 3 and 4 in
the Act. It needs to be mentioned at this stage the
question which needs to be decided is whether one
building with several wings would fall under amended
Section 7(1)(ii). Section 7-A 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 submit an application to
the Registrar for registration of the society within four
months from the date on which the minimum number of
persons required to form such society (60%) have taken
flats. Rule 9 provides that if no period for execution of a
conveyance is agreed upon, the promoter shall, subject to
his right to dispose of the remaining flats, execute the
conveyance within four months from the date on which
the society is registered.
17. Reading the above provisions of MOFA, we are
required to balance the rights of the promoter to make
alterations or additions in the structure of the building in
-- 80 of 142 --
81 Judgment in Suit No.17/2020
accordance with the lay out plan on the one hand vis-a-
vis his obligations to form the society and convey the
right, title and interest in the property to that society. 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 36/86.
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 ..... sq. mtrs. 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
-- 81 of 142 --
82 Judgment in Suit No.17/2020
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 FAR (FSI) 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 FAR (FSI), shall be available to the society."
(emphasis supplied)
18. 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 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 lay out 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. Clause 4 shows the effect of the formation of the
Society.
19. In our view, 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. Once the entire project is placed before the flat
takers at the time of the agreement, then the promoter is
not required to obtain prior consent of the flat takers as
long as the builder put up additional construction in
accordance with the lay out plan, building rules and
Development Control Regulations etc.
viii) Vidhi Builders Pvt. Ltd. -Vs- Arenbee Media Consultant Ltd.
reported in 2012 SCC OnLine Bom 219, wherein the Hon’ble Supreme
Court in para Nos. 11 to 21 has observed as under :
-- 82 of 142 --
83 Judgment in Suit No.17/2020
“11. Section 7(1) of the MOFA provides for the consent
of the purchasers of the flats in a building for any
addition or alteration in the building. In Jayantilal
Investments Vs. Madhuvihar Co-op. Housing Society,
(2007) 9 SCC 220, the scope of Section 7(1) read with
Section 7-A as amended by Maharashtra (Amendment)
Act 36 of 1986 was considered. Their Lordships observed
thus:
14. 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 36 of 1986. The unamended Section 7 reads as
follows:
“7. (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; 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."
(emphasis supplied)
12. The amended Section 7 reads as follows:
“7. After plans and specifications are disclosed no
alterations or additions without consent of persons who
have agreed to take the flats; and 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; or
(ii) any other alterations or additions in the structure of
the building without the previous consent of all the
persons who have agreed to take flats in such building."
(emphasis supplied)
13. The judgment of the Bombay High Court in Kalpita
-- 83 of 142 --
84 Judgment in Suit No.17/2020
Enclave case was based on the interpretation of
unamended Section 7 of MOFA. Consequently, it was
held that a promoter was not entitled to put up
additional structures not shown in the original layout
plan without the consent of the flat takers. Thus, consent
was attached to the concept of additional structure.
Section 7 was accordingly amended. Section 7-A was
accordingly inserted by Maharashtra Amending Act 36 of
1986. Section 7-A was inserted in order to make the
position explicit, which according to the legislature
existed prior to 1986, implicitly. Section 7 of MOFA came
to be amended and for the purpose of removal of doubt,
additional Section 7-A came to be added by Maharashtra
Ac
t 36 of 1986. By this amendment, the words indicated
in the parenthesis in the unamended Section 7(1)(ii),
namely, "or construct any additional structures" came to
be deleted and consequential amendments were made in
Section 7(1)(ii). Maharashtra Act 36 of 1986 operated
retrospectively. Section 7-A was declared as having been
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 7-A
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 layout 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 7-A, 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 7-A
of MOFA as amended. Therefore, having regard to the
Statement of Objects and Reasons for substitution of
Section 7(1)(ii) by Amendment Act 36 of 1986, it is clear
-- 84 of 142 --
85 Judgment in Suit No.17/2020
that the object was to make legal position clear that even
prior to the amendment of 1986, it was never intended
that the original provision of Section 7(1)(ii) of MOFA
would operate even in respect of construction of
additional buildings. In other words, the object of
enacting Act 36 of 1986 was to change the basis of the
judgment of the Bombay High Court in Kalpita Enclave
case. By insertion of Section 7-A vide Maharashtra
Amendment Act 36 of 1986 the legislature had made it
clear that the consent of flat takers was never the criteria
applicable to construction of additional buildings by the
promoters. The object behind the said amendment was to
give maximum weightage to the exploitation of
development rights which existed in the land. Thus, the
intention behind the amendment was to remove the
impediment in construction of the additional buildings, if
the total layout allows construction of more buildings, if
the total layout allows construction of more buildings,
subject to compliance with the building rules or building
bye-laws or Development Control Regulations. At the
same time, the legislature had retained Section 3 which
imposes statutory obligations on the promoter to make
full and true disclosure of particulars mentioned in
Section 3(2) including the nature, extent and description
of common areas and facilities. As stated above, sub-
section (1-A) to Section 4 was also introduced by the
legislature by Maharashtra Act 36 of 1986 under which
the promoter is bound to enter into agreements with the
flat takers in the prescribed form. Under the prescribed
form, every promoter is required to declare FSI available
in respect of the said land. The promoter is also required
to declare that no part of that FSI has been utilised
elsewhere, and if it is utilised, the promoter has to give
particulars of such utilisation to the flat takers. Further,
under the proforma agreement, the promoter has to
further declare utilisation of FSI of any other land for the
purposes of developing the land in question which is
covered by the agreement.
14. Therefore, the legislature has sought to regulate
the activities of the promoter by retaining Sections 3 and
4 in the Act. It needs to be mentioned at this stage the
question which needs to be decided is whether one
building with several wings would fall under amended
-- 85 of 142 --
86 Judgment in Suit No.17/2020
Section 7(1)(ii). Section 7-A 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 layout 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 co-operative
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
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 co-operative
society is to be constituted, the promoter shall submit an
application to the Registrar for registration of the society
within four months form the date on which the
minimum number of persons required to form such
society (60%) have taken flats. Rule 9 provides that if no
period for execution of a conveyance is agreed upon, the
promoter shall, subject to his right to dispose of the
remaining flats, execute the conveyance within four
months from the date on which the society is registered.
15. In para 17 of the Judgment, Their Lordships
considered the Clauses 3 and 4 of Form V of the
Maharashtra Ownership Flats (Regulation of the
Promotion of Construction, etc.) Rules, 1964. As per the
said Clauses, the promoter has to declare the FSI
available to him in respect of the land at the time of
entering into the contract. He is bound to form and
register a society of the purchasers within the specified
period and also to execute conveyance. After referring to
the clauses 3 and 4, Their Lordships observed thus:
18. 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
-- 86 of 142 --
87 Judgment in Suit No.17/2020
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. Clause 4 shows the effect of the formation of
the Society.
16. In our view, 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 developability has to be harmoniously read
with the concept of registration of society and
conveyance of title. Once the entire project is placed
before the flat takers at the time of the agreement, then
the promoter is not required to obtain prior consent of
the flat takers as long as the builder puts up additional
construction in accordance with the layout plan,
building rules, and Development Control Regulations,
etc.
17. From this it is clear that, the declaration as to the
exact available FSI for the land, the FSI already utilized
and the FSI to be utilized are to be specifically declared.
The builder is obliged to make full and true disclosure
of the development potentiality of the plot, which is the
subject matter of the agreement. If the entire project is
placed before the flat purchasers at the time of
agreement, then the promoter is not required to obtain
prior consent of the purchasers as long as the builder
puts up additional construction in accordance with the
layout plan, building rules and DCR. The builder cannot
claim that there was a consent for any additional
construction either on the building or any construction
of the additional building which was not declared in the
layout plan or the sanctioned plan which was shown to
-- 87 of 142 --
88 Judgment in Suit No.17/2020
the purchasers at the time of the agreement. The
blanket consent of the authority obtained by the
promoter at the time of the agreement is not the consent
within the meaning of Section 7(1) of the MOFA. The
consent has to be express, specific and informed.
18. In Bajranglal Eriwal and others Vs. Sagarmal
Chunilal and others, 2008 (6) Bom.CR 887, the learned
Single Judge of this Court observed thus:
11. The judgment of the Supreme Court (in Jayantilal
Investments Vs. Madhuvihar Co-operative Housing
Society) emphasized that the obligation of the
developer is to make a full and complete disclosure of
the entire project to flat purchasers. If there has been a
complete disclosure of the entire project then in such a
case the promoter is not required to obtain the prior
consent of the flat purchasers so long as the layout plan
and building bye laws are complied with. The Court
observed as follows:
Once the entire project is placed before the flat takers
at the time of the agreement then the promoter is not
required to obtain prior consent of the flat takers as
long as the builder puts up additional construction in
accordance with the layout plan, building rules and
Development Control Regulations, etc.
19. The observations of the Supreme Court in
Jayantilal Investments, bring about a balance between
the rights of the promoter on the one hand and a flat
purchaser on the other. There is a statutory embargo
upon the making of alterations either in an individual
flat or in respect of the structure of the building after
the disclosure of the plans and specifications of the
building.
20. In Madhuvihar Co-op. Hsg. Soc. Vs. Jayantilal
Investments, 2010 (6) ALL MR 600, the learned Single
Judge of this Court took the same view and observed
thus:
46. Thus, there is consistent view of this court, that the
blanket consent or authority obtained by the promoter,
at the time of entering into agreement of sale or at the
time of handing over possession of the flat, is not
consent within the meaning of Section 7(1) of the
MOFA, inasmuch as, such a consent would have effect
of nullifying the benevolent purpose of beneficial
-- 88 of 142 --
89 Judgment in Suit No.17/2020
legislation.
47. It is, thus, clear that it is a consistent view of this
court, that the consent as contemplated under Section
7(1) of the MOFA has to be an informed consent which
is to be obtained upon a full disclosure by the
developer of the entire project and that a blanket
consent or authority obtained by the promoter at the
time of entering into agreement of sale would not be a
consent contemplated under the provisions of the
MOFA. I am in respectful agreement with the consistent
view. The interpretation placed by the learned Single
Judges of this Court is in consonance with the
benevolent provisions of the MOFA which have been
enacted for protecting flat takers.
21. In view of the legal position discussed above, it
would be clear that the consent of the purchasers of the
flats or Units in the existing building has to be obtained
in respect of any alteration in the structure, in respect
of the flat or flats which are agreed to be taken as well
as for any other alteration or addition in the structure
of the building. Even after the amendment of 1986, if
any additional construction is to be made, it would be
necessary to obtain the consent if that additional
construction was not shown in the sanctioned plan or
the layout plan which was shown to the purchasers at
the time of agreement. In the present case, at the time
of the agreement, the proposed construction of only
basement, ground and one upper floor was disclosed in
the plan. Even though in the general terms, the builder
reserved the right to utilize the residual FSI or
additional FSI as could be available, he had not
disclosed the exact FSI which was available or the
exact additional FSI which could be available to him as
per the rules and thus, he did not disclose the
potentiality of the development on the said land in
future. The defendant added three more floors after
completion of the building as per the original plan. Not
only that, at present, the construction of one Podium
consisting of about 36 car-parkings is under
construction. According to the plaintiff, it is the
additional construction on the building as it is annexed
and joint with old building, while according to the
defendant, it is a separate construction of the building.
-- 89 of 142 --
90 Judgment in Suit No.17/2020
In either case, I refrain from commenting on the
legality or otherwise of this construction of Podium
because the defendant is restrained by way of
temporary injunction from carrying out any further
construction in the parking area at the north end of
building beyond Podium area of the suit building.
(Emphasize supplied.) It appears that the learned trial
Court injuncted the defendant from carrying out any
further construction and did not restrain the
construction of Podium consisting of the parkings
possibly because this construction is almost completed,
and at this stage, it cannot be demolished. In para 2 of
the impugned order, the trial Court has restrained the
defendant from consuming balance FSI or TDR in
respect of the building in question till the decision of
the suit and that injunction is important. The said
order is consistent with the provisions of law and the
facts and circumstances noted above. Taking into
consideration the facts and the legal position, it is
difficult to find any fault with the impugned order. As
per the original plan, which was shown to the plaintiff,
building was completed in the year 2001 itself, and
most of the Units were purchased by the people. The
defendant was bound to form a co-operative society
within four months and then to execute a conveyance
form within four months after formation of the society.
If the defendant would have complied with his legal
obligations within the time-frame, he could not have
claimed the right to use any residual FSI or any
additional FSI which could be brought on the land. In
fact non-compliance of the legal provisions of Section
11, about the conveyance of the title within the
specified period, is an offence punishable under section
13 of the MOFA. A builder cannot be heard to say that
he did not comply with the provisions of Section 1 and
even though he might have committed the offence
under Section 13, still, he has the right or power to use
the residual FSI or additional FSI which could be
brought on the land. To accept such type of argument
would amount to rewarding the violation of the
provisions of law. Therefore, such argument has to be
rejected.”
-- 90 of 142 --
91 Judgment in Suit No.17/2020
ix) Rajkumar Gulati & Ors. -Vs- S.D. Corporation Pvt. Ltd. & Ors.,
reported in 2025 BHC-OS: 20608, wherein the Hon’ble Bombay High
Court in para No. 22, 51 and 211 has observed that,
“22. Mr. Samdani would further submit that all slum
dwellers in suit have already been rehabilitated under
the present slum scheme (Scheme-1). That even in
respect of clubbed Scheme-2 at Wadala, all the Project
Affected Persons (PAPs) tenements are to be provided
at Wadala Scheme (Scheme-2) except only 27 PAP
tenements in present Scheme-1. That therefore the
disclosed building plans must be treated as frozen in
terms of sanctioned buildings upto the plan of 31
December 2009 when Occupancy Certificate of Towers-
A and B was obtained. That Tower-C in 2009 plan had
only been shown as tentative and there was no
sanctioned plan for Tower-C, for which consent of the
flat purchasers was obtained. That in absence of
informed consent of flat purchasers in respect of
Tower-C, construction thereof cannot be undertaken as
held by this Court in Malad Kokil CHS (supra) and
K.M. Realty Vs. Diamond Hill CHS Ltd.
51. It is submitted on behalf of the developers that
all the judgments relied upon by Plaintiffs in support of
disclosure agreement under Section 7 and 7A of MOFA
do not pertain to slum schemes and therefore have no
application to the facts of the present case. Judgment
of this court in K.M. Realty (supra) is no longer a good
law on account of order passed by Supreme Court on 1
August 2025.
211. In K.M. Realty (supra), the developer therein had
disclosed the proposed additional building, which was
sanctioned as G+7. However, the developer got the
plans sanctioned for G+16 floors building with
expanded plinth and commenced its construction. The
City Civil Court passed order of temporary injunction
against the developer, who filed Appeal from Order
before this Court. One of the contentions raised before
this Court by the developer therein that the ratio of the
judgments in Jayantilal Investments, Dosti Corporation
and Malad Kokil CHSL apply only in cases where
additional FSI under changed norms is available and a
developer is planning to put additional construction by
-- 91 of 142 --
92 Judgment in Suit No.17/2020
using the additional FSI. This Court however found
that factually the developer therein was utilizing the
additional FSI as well as fungible made available under
DCPR-2034, on account of which he had secured
building permission for G+16 floors with expanded
plinth. This Court accordingly restrained the developer
therein from constructing additional building beyond
the disclosure of G + 7 floors and beyond the disclosed
plinth. This Court rejected the contention of necessity
to provide flexibility for developers to construct
additional building contrary to the disclosure for
availing the admissible FSI/BUA. This Court also did
not permit utilisation of additional FSI flowing through
DCPR, 2034. It appears that the judgment of this Court
in K.M. Realty was challenged before the Apex Court in
SLP (C) No. 3420/2025, which has been disposed of by
order dated 1 August 2025 by permitting the developer
therein to carry out construction of the building by
noting developer's statement it would use only balance
FSI potential as per DCR 1991, without using even
fungible FSI admissible under DCR 1991. The Apex
Court has also restrained the developer from alienating
the flats till disposal of the suit, which is directed to be
decided in time bound manner. Thus, even the order
passed by the Apex Court in K M Realty does not
disturb the ratio of judgment of this Court which had
disallowed construction by utilizing additional and
fungible FSI under DCPR 2034.”
x) IREP Credit Capital Pvt.Ltd. -Vs- Tapaswi Mercantile Pvt. Ltd. &
Ors. in Commercial Arbitration Petition (L) No. 1501 of 2019 decided
on 20/12/2019, wherein the Hon’ble Bombay High Court in para No.30
has observed as under :
“30. I will pre-empt another line of attack that I see
hovering on the horizon, though in fairness Mr Kamat
does not take it explicitly today. There is no use and
will be no use saying that Kulkarni J's view in Saifee
Developers was "only at the ad interim stage". That
means nothing, or next to nothing. It muddles two
different facets: a pronouncement on law, and the stage
at which this is done. It is entirely possible, and indeed
often happens (and, given the way we handle our
interim applications, increasingly happens) that a
-- 92 of 142 --
93 Judgment in Suit No.17/2020
question of law is fully decided at an interim or even
ad interim stage. The fact that it is at an ad interim
stage makes it no less binding. One must look at what
was decided, and how. If the pronouncement on law is
said to be a prima facie view, then a different view at a
later stage may be possible. But if the finding on law is
determinative, in the sense there is nothing further to
be discussed or decided at any later stage, and no
different result is possible no matter what facts are
later on record, then that finding must be taken as
concluded, conclusive, binding and not merely a prima
facie view. There may be a final decision on the law
applied to a prima facie finding on facts; the two are
not inconsistent, and nothing is shown to me to suggest
that a finding on law at an ad interim or interim stage
is never binding or need not be followed. Were it so, it
would never be necessary to fully consider the law at
any interim (let alone ad interim) stage. It would only
ever be necessary to return a broad-brush finding of
what the position in law might likely be. Indeed, I
believe this to be a wholly incorrect approach. The only
judicious approach is to apply the correct law to a
prima facie view of the facts. On a fuller examination
of the facts, the legal position remaining unchanged,
there may well be a different outcome. But I do not see
how a fuller examination of facts can alter the position
in law. The dichotomy that Kulkarni J noted and
resolved has nothing at all to do with the facts of any
given case. It was simply a matter of considering a set
of precedents and examining their impact on the
statute. That appears to me to be a sufficiently final
pronouncement on law, subject only to a contrary view
at an appellate stage, and it cannot be brushed aside by
a later bench of coordinate strength only because of the
stage at which it came to be pronounced or decided.
xi) Shri Vitthal Laxman Patil -Vs- Kores (India) Ltd. Real Estate,
reported in (2019) 3 Mh.L.J. 857, wherein the Hon’ble Bombay High
Court in para Nos. 8 and 11 has observed as under :
“8. There is, however, another set of provisions in MOFA, read with the
rules framed thereunder, which deal with the obligations of the
promoter, firstly, to disclose all particulars of the building or project
involving more than one buildings and then to construct in accordance
-- 93 of 142 --
94 Judgment in Suit No.17/2020
with such particulars. These provisions, Sections 3 and 4 read with
clauses 3 and 4 of Form V of Rules (i.e. Maharashtra Ownership Flats
Rules, 1964), are quoted below :
Sections 3 and 4 :
3 Manner of Making disclosure.-
(1) A promoter for the purposes of making disclosure of
any document referred to in section 3 or prescribed
thereunder shall produce the original of such document
before the person intending to take or taking one or
more flats. The promoter shall display or keep all the
documents, plans or specifications (or copies thereof)
referred to in clauses (a), (b) and (c) of sub-section (2)
of the said section 3 at the site and permit inspection
thereof; Such person may ask the promoter all relevant
questions for seeking further information or
clarification in respect of any documents of matter to be
disclosed, produced or furnished by or under the
provisions of the Act; and the promoter shall be legally
bound to answer all such questions to the best of his
knowledge and belief.
(2) The promoter while making disclosure of the
outgoings as required by clause (j) of sub-section (2) of
section 3 shall state the basis on which any estimated
figures or other information is given.
(3) The promoter shall, when the flats are advertised
for sale, disclose inter alia in the advertisement the
particulars as required by sub-clauses (i) to (iv) (both
inclusive) of clause (m) of sub-section (2) of section 3.
4. True copies of certain documents to be given-
A promoter shall, on demand and payment of a
reasonable charge therefor, give to any person
intending to take or taking one or more flats true copies
of the following documents, namely:
(a) all documents of title relating to the land on which
the flats are constructed, or are to be constructed,
which are in the promoter's possession or power;
(b) the certificate by an Attorney-at-Law or Advocate
referred to in clause (a) of sub-section (2) of section 3;
(c) all documents relating to encumbrances (if any) on
such land, including any right, title, interest or claim, of
any party in or over such land;
(d) the plans and specifications of the buildings built or
to be built on the land referred to in clause (c) of sub-
-- 94 of 142 --
95 Judgment in Suit No.17/2020
section (2) of Section 3;
(e) a list of fixtures, fittings and amenities (including
the provision for one or more lifts) provided or to be
provided for the flat;
(f) a list referred to in clause (g) of sub-section (3) of
section 3;
(g) a list of all outgoings referred to in clause (j) of sub-
section (2) of section 3 and the basis on which any
estimated figures or other information is given to the
person intending to take or taking the flat.
Clauses 3 and 4 of Form V :
“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 of sanctioning
the said plans or thereafter and shall, before handing
over possession of the Premises to 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 ........ sq.
mtrs only and that no part of the said floor space index
has been utilised by the Promoter elsewhere for any
purpose whatsoever. In case the said floor space index
has been utilised by the Promoter elsewhere, then the
Promoter shall furnish to the flat purchaser all the
detailed particulars in respect of such utilisation of the
said floor space index by him. In case while developing
the said land the Promoter has utilised 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."
Together these provisions require the promoter to make
a full disclosure of the proposed building and its
amenities or the project of buildings and their
amenities, and then to comply with such disclosure
whilst constructing the building/s or implementing the
project.
11. The long and short of the position discussed above
is that quite apart from the restrictions for development
contained in Section 7 read with Section 7-A of MOFA,
-- 95 of 142 --
96 Judgment in Suit No.17/2020
the promoter's duty of disclosure and keeping to such
disclosure, spelt out inter alia by Sections 3 and 4 of
MOFA read with statutory clauses 3 and 4 of Form V
prescribed in the Rules framed under MOFA, requires
him to put up additional construction only in
accordance with the layout plan disclosed to the flat
takers at the time of entering into the contract for sale
of flats consistent with the building rules contained in
Development Control Regulations. If the building site
contains future development potential, i.e. any
possibility of further construction, whether over one or
the other building or buildings or anywhere else in the
layout plan, the promoter's duty of disclosure requires
him to firstly disclose such future construction; if it is to
be over any particular building or buildings, the
promoter must indicate such building or buildings and
if is over any other area, such other area in the layout
plan. He cannot disclose one or the other buildings or
area/s for such additional construction and then
construct somewhere else. He must keep to his
disclosure. A necessary corollary of this duty of
disclosure is that if any particular area is to be kept
open either as recreation ground (RG) or amenity
space, he cannot, without disclosing a possible future
use of such area, use the area for any additional
construction.
xii) M/s K.M. Realty -Vs- Diamond Hill Co-operative Housing Society
Ltd., in Appeal From Order No. 418 of 2023 decided on 08/01/2024,
wherein the Hon’ble Bombay High Court in the dispute between the
same parties have while deciding the appeal from order has observed
that the defendant has no right to proceed with the construction of the
third building by utilizing the fungible FSI arising out of DCPR 2034.
xiii) M/s K.M. Realty -Vs- Diamond Hill Co-operative Housing Society
Ltd., in SLP (C) No. 3420 of 2025 decided on 01/08/2025, wherein the
Hon’ble Supreme Court in para Nos. 2 to 8 has held that,
“2. We have heard the learned Senior Counsel
appearing for the appellant and the learned Senior
Counsel appearing for the respondent.
3. Pending the shit and order of injunction granted
in favour of the respondent-plaintiff by the Trial Court,
-- 96 of 142 --
97 Judgment in Suit No.17/2020
the High Court has permitted the appellant-developer
to either await final decision of the suit by stopping the
construction where it stands today or to demolish the
same to bring it at par with the plinth/footprint of the
area indicated in 2004 layout plan and then to
construct the third building upto ground + 7 floor.
Though, arguments have been made by both the parties
on factual aspects and on law, we do not wish to go into
the same at this stage as we are dealing with an
Interlocutory Application.
4. Suffice it to take note of the submissions made by
the learned Senior Counsel before the High Court and
also before us that the balance FSI potential under the
Development Control Regulation, 1991 (For short,
‘DCR, 1991’) alone would be utilized and the fungible
area admissible as per 1991 DCR, would not be utilized.
5. In such view of the matter, granting a temporary
injunction would not be to the benefit of both the sides
as for considering the same, what is to be primarily
looked at is an irreparable loss to the plaintiff (s), a
prima facie case established by the plaintiff or balance
of convenience lies in the plaintiff’s favour.
6. Accordingly, we permit the appellant to put up
construction as per the approved plan, with respect to
FSI Potential under DCR, 1991, while making it clear
that the fungible area admissible under the said DCR
shall not be utilized. The said construction is subject to
the decree to be passed in the suit and therefore, no
equities can be claimed.
7. In order to avoid third party rights, we hold that
the appellant shall not alienate the construction to be
made, in favour of he third parties, pending the
outcome of the suit.
8. As the issue sought to be decided in the main
suit, which is primarily legal in nature, on the
interpretation of he MOFA agreement and the
applicability of Sections 7 and 7A of the Maharashtra
Ownership Flat (Regulation of the Promotion of
Construction Sale, Management and Transfer) Act,
1963, we direct the Trial Court to expedite the trial and
complete it within a period of nine months from the
date of receipt of a copy of this order.”
-- 97 of 142 --
98 Judgment in Suit No.17/2020
32. On the contrary, learned Advocate for defendant argued
that, plaintiff has not given the proper description of the suit property
as required under Order VII Rule 2 of Civil Procedure Code. Plaintiff has
filed the suit by pleading that the defendant has advertise standalone
building of 7 floor with 2 Wings A and B and has commenced another
project on adjoining plot of land and also pleaded that recently proceed
to obtain permission and sanction in respect of additional structure and
defendant is in process of constructing third building over suit property
viz. Plot bearing CTS No.13/13A at Village Kurla admeasuring 3957.30
sq.mtrs. It is further pleaded by the plaintiff that the defendant has
proceeded to amalgamate the project and proceed with the
construction. But the plaintiff has suppressed the fact of execution of
MOFA agreement, wherein it was specifically agreed in between
members of plaintiff and defendant that construction of third building
being Ground + 7 or more upper floors by use of balance development
potentiality was disclosed by the defendant. Further the order dated
06/01/2017 of registration of plaintiff’s society, specifically
contemplates that the registration was based on the fact that the
defendant had the right to further development of the layout as
approved by the competent authority as well as revised layout. Further
in the said order itself it is recorded that plaintiff society will not object
the utilization of balance FSI by the defendant. Thus, the defendants
since from the inception has given clear disclosure to the flat owners
about the whole scheme and layout and the same is specifically
mentioned the respective MOFA agreements entered with the flat
purchasers. Thus, there is sufficient and clear disclosure by defendant
given to the flat owners and there is sufficient compliance of the
provisions of Section 3 and 4 of the MOFA. When the flat owners were
having complete disclosure and therefore the consent for additional
-- 98 of 142 --
99 Judgment in Suit No.17/2020
construction is not required. It is further argued that, the documents
filed on record i.e. sanctioned plans from time to time also shows that
there were three buildings proposed to be constructed by the defendant
in phase manner by utilizing the FSI potentiality and TDR. Layout plan
dated 22/06/2004 (Exh.47) shows that the third building was proposed
with Ground + 7 Floor or more upper floors. Therefore, the case of the
plaintiff that there was no disclosure is nothing but falsity of the case of
plaintiff. It is further argued that, plaintiff’s witness No.1 during his
cross examination has categorically admitted that at the time of the
agreement he was informed by the defendant that they will construct 3
buildings on the said property. This admission itself is sufficient to
conclude that defendant has disclosed the whole scheme of layout and
development to the flat owners.
33. It is further argued that, as there was encroachment over
the said property and after removal of said encroachment, area of 142
sq. mtrs. was shown in area calculation of the suit property in the
sanctioned plan. As per DCR 1991 the balance development potential
was 4420.76 sq. mtrs, however defendant had proposed construction of
only 4096 sq. mtrs in 2019 which was well within the development
entitlement under DCR 1991. Further due to removal of encroachment
plinth area was increased as the marginal open space constraint were
removed.
34. It is vehemently argued by the defendant that there is no
prejudice caused to the plaintiff due to construction of the third
building by defendant. Plaintiff has examined PW-2 Architect Mr. Farzan
Juwle who has categorically admitted that the proposed third building
is in the northern side of already constructed buildings and there are no
-- 99 of 142 --
100 Judgment in Suit No.17/2020
windows or doors given to the flats already constructed except the toilet
windows and it is also admitted that toilet ducts are provided for
maintenance and ventilation of toilet of already constructed second
building on the northern side access has been provided. Said witness
has also admitted that due to sanction plan of 09/09/2019 residents of
the already constructed buildings will not be affected in any manner.
35. It is also argued that as there is sufficient compliance of the
provisions of MOFA, all the rulings relied on by the plaintiff are of no
help for the plaintiff and those are not applicable to the facts and
circumstances of the case. He further submitted that the reliance of the
plaintiff on the order passed by the Hon’ble Bombay High Court dated
08/01/2024 in Appeal from Order No. 418/2023 to contend that the
Hon’ble High Court has already decided the issue of dispute between
plaintiff and defendant is misconceived, as those findings were prima
facie one and it was specifically directed in the said order that, this
Court shall not be influenced by the same while deciding the suit finally.
Further, during the trial oral as well as documentary evidence is brought
on record to prove the falsity of the case of the plaintiff and therefore
the suit needs to be decided on the basis of the evidence brought on
record.
36. Learned Advocate for defendant placed reliance on the
following rulings :
i) Venus Vasant Vally Co-operative Housing Society -Vs- Seth
Developers Pvt. Ltd., reported in 2024 SCC OnLine Bom 1054, wherein
the Hon’ble Bombay High Court in para Nos.115, 116, 117, 118, 119,
120, 121, 122, 123, 124, 125, 126, 127 and 128 held that,
-- 100 of 142 --
101 Judgment in Suit No.17/2020
“115. Having considered the submissions, the issue
which arises for determination is whether adequate
disclosure of the development potential of the suit land
has been made in conformity with the mandatory
requirements under Clause 3 and Clause 4 of Form V of
MOFA. It is the contention of Defendant No. 8 that
Clause 3 and Clause 4 of MOFA has been duly complied
with by making specific disclosure regarding
construction of 55,762.08 sq. mtrs, which is equivalent
to 6,00,000 square feet on the suit land/Plot A and Plot
B in the MOFA Agreement. Under Recital 11 of the
MOFA Agreement executed with the members of
Plaintiff’s Society for their respective units, it has been
categorically disclosed to the Plaintiff that 6,00,000
square feet of FSI equivalent to 55,762.08 sq. mtrs shall
be used for construction of Building Nos. 1 to 4 on Plot A
and Building Nos. 1, 7 and 8 on Plot B i.e. CTS 104 B on
the suit land. The present dispute concerns the building
No. 4 and as to whether adequate disclosure was made
to the Plaintiff who are the owners of building No. 3
when the members of the Plaintiff society had entered
into the MOFA Agreement/Agreement for Sale.
116. It would be pertinent to refer to the decision of the
Supreme Court in Jayantilal Investments (supra),
wherein Clauses 3 and 4 of Form V of MOFA came up
consideration. Paragraphs 17 and 18 of the Judgment
reads as under:
“17.Reading the above provisions of MOFA, we are
required to balance the rights of the promoter to make
alterations or additions in the structure of the building in
accordance with the layout plan on the one hand vis-à-vis
his obligations to form the society and convey the right,
title and interest in the property to that society. The
obligation of the promoter under MOFA to make true and
full disclosure to 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 subsection (1-A) in Section
4 of MOFA by Maharashtra Amendment Act 36 of 1986.
-- 101 of 142 --
102 Judgment in Suit No.17/2020
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 Form
V 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
local authority concerned at the time of sanctioning the
said plans or thereafter and shall, before handing over
possession of the flat to the flat purchaser, obtain from
the local authority concerned 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 … sq. mtrs.
only and that no part of the said floor space index has
been utilised by the promoter elsewhere for any purpose
whatsoever. In case the said floor space index has been
utilised by the promoter elsewhere, then the promoter
shall furnish to the flat purchaser all the detailed
particulars in respect of such utilisation of said floor space
index by him. In case while developing the said land the
promoter has utilised 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 FAR (FSI) 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 FAR (FSI), shall be available to the society.”
-- 102 of 142 --
103 Judgment in Suit No.17/2020
(emphasis supplied)
18. 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 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. Clause 4 shows the effect of the formation of the
Society.”
117. Thus, it can be seen from the aforementioned
decision in Jayantilal Investments (supra) that Clauses 3
and 4 were held to be statutory and mandatory. Further,
full and true disclosure of the land, amenities and
facilities and “the development potentiality of the plot”
was required to be made by the promoter/developer and
which plot is the subject matter of the Agreement.
Further, the developer was to disclose the inherent FSI
and whether the plot in question was capable of being
loaded with additional floating FSI/TDR. However, the
Supreme Court in the said decision did not hold that the
Developer is required to disclose the source of FSI.
Further, the developer though required to disclose the
development potentiality of the plot, was not obligated to
mention the number of floors that are to be constructed
as this would be subject to building permission and
Development Control Regulations. Further, the Supreme
Court in considering Clauses 3 and 4 of Form V of MOFA
has held that the condition of true and full disclosure
flows from the obligation cast on the promoter vide
Sections 3 and 4 of the MOFA and Form V, which is the
prescribed form of agreement. The obligation remain
unfettered because the concept of developability has to be
harmoniously read with concept of registration of Society
-- 103 of 142 --
104 Judgment in Suit No.17/2020
and conveyance of title, and once the entire project is
placed before the flat takers at the time of the agreement,
then the promoter is not required to obtain prior consent
of flat takers as long as the builder puts up additional
construction in accordance with the layout plan, building
rules and Development Control Regulations.
118. In the present case, the contention of the Plaintiff is
that there has been non-disclosure as to the development
potential of the layout, as TDR was neither available nor
loaded under the 1997 layout plan.
119. Mr. Jagtiani on behalf of the Plaintiff has referred to
the aforementioned decisions including the decision of this
Court in Malad Kokil (supra), which has held that blanket
consent as represented by the general and one sided
clauses of the MOFA Agreement are not valid consent and
they do not constitute specific consent to a particular
addition to be made to a layout. Such clauses of blanket
consent have been consistently rejected as constituting any
consent for the developer being entitled to carry out
further construction. Further, this Court in Jayantilal
Investments (supra) has held that consent cannot be
implied consent or consent from acquiescence and that the
Developer/Promoter’s obligation is to make a full and
complete disclosure of the development proposed on the
layout. The Developer is obliged to disclose and place
before the purchasers the entire project/scheme of
development on the proposed layout in conformity with
Clauses 3 and 4 of the Model Form Agreement. Further,
such obligation to make true and full disclosure to the flat
takers remains unfettered even after the inclusion of
Section 7A in MOFA. These decisions relied upon by Mr.
Jagtiani are in cases where the layout plan itself had made
inadequate disclosure and the MOFA flat purchase
Agreements had not provided any disclosures as
contemplated under Clauses 3 and 4 of the Model Form
Agreement. However, in the present case, it can be seen
from the Agreement for Sale and in particular Clause 11
thereof, that the disclosure had been made by the
Developer as under:-
“As at present envisaged Floor Space Index (FSI) capable of
generating about 6 lacs sq. ft. (built -up) area will be
-- 104 of 142 --
105 Judgment in Suit No.17/2020
available for construction in four Buildings being Building
Nos 1, 2,[3] and 4 on Plot A and in 3 Buildings (being
Buildings Nos 1, 7 and 8 on Plot B)”
120. Thus, in the Agreement for Sale/MOFA Agreement,
there was a disclosure of the development potential and it
would not be appropriate merely to consider the 1997
layout plan, without considering the MOFA Agreement and
the specific disclosure made therein.
121. Further, it is necessary to consider whether the
disclosure of development potential in Recital 11 of the
MOFA Agreement contemplated TDR and whether TDR
itself was to be loaded as per law, when the layout plan
was sanctioned by the MCGM. It is necessary in this
context to refer to the Notification dated 15th October 1997
(1997 TDR Notification) of the Government of
Maharashtra which introduced Appendix VII (B) Clause 8,
10, 11 read with Clause 13 of the said Notification. This
provided for construction upto 1 additional FSI through
loading of slum TDR on a receiving Plot. The 1997 TDR
Notification had been preceded by notifications, resolutions
and memorandums issued by the Government with respect
to TDR and its utilisation, reference of which is made in the
1997 TDR Notification. The Notifications include a
modification to the DCR for TDR which was published on
25th April 1996 vide Notice in the Maharashtra Government
Gazette for inviting suggestions/objections. Further, on 20th
July 1996, the Slum Rehabilitation Authority approved the
proposal for modification with some amendments and
submitted the revised modification to the State
Government for final sanction on 25th July 1996. The
Government of Maharashtra published the revised
modification as submitted by the Slum Rehabilitation
Authority in the official Gazette for inviting
suggestions/objections on 28th August 1996. The
Government of Maharashtra brought the revised
modification into operation with effect 15th October 1996
till the final sanction was accorded by the State
Government. Thus, on 15th October 1996 revised
modification for TDR was brought into operation. It is on
15th October 1997 that the Government of Maharashtra
sanctioned the revised modification and amended DCR,
-- 105 of 142 --
106 Judgment in Suit No.17/2020
1991 to introduce Appendix VII-B pertaining to TDR. Thus,
the modification for TDR having been brought into
operation on 15th October 1996 and thus, was very much
contemplated when the layout plan was issued in 1997 and
sanctioned by the MCGM on 20th November 1997.
122. It has been held by the Supreme Court in Janhit
Manch (supra) that the alternate mode of compensation,
given to private land owners who have transferred a
portion of their land to the Government as and when the
Government has required such private land to build or
expand public utilities, instead of payment of money is
TDR, which is nothing but a development potential, i.e. in
terms of increased Floor Space Index (“FSI”) awarded in
lieu of area of land given, conferred in the form of
Development Rights Certificate (“DRC”) by the
Government. Thus, it can be seen from this decision that
TDR is part of the development potential in terms of
increased FSI and when in the present case, the disclosure
made in the Agreement for Sale at Recital 11 of the FSI
capable of being generated i.e. 6,00,000 sq. ft. (Built-Up
Area) available for constructing the Buildings including
Building No. 4 on Plot A and the Buildings on Plot B on the
suit land, this would necessarily take TDR into
contemplation. The TDR was permissible when the 1997
layout plan was issued and received sanction by the
MCGM.
123. It is relevant to note that the Defendant No. 8 has
utilised FSI and TDR of 18,079.17 square meters for
building Nos. 1-3. Further, TDR of 513.96 sq. mtrs. was
utilized for building No. 4 in 2014 prior to the ad-interim
order passed by this Court, which had imposed status quo
on such construction. Further, it is necessary to note that
TDR of 3600 square meters had been utilized for Building
No. 3, which is the Plaintiff’s building as has been admitted
in the Report dated 19th May 2022 of T-Square Architects
and Designs appointed by the Plaintiff. Thus, I do not find
merit in the contention on behalf of the Plaintiff that they
were unaware of TDR being proposed to be utilized by the
Defendant No. 1/8 when the Agreements for Sale/MOFA
Agreements were entered into with them. Further, the
Plaintiff was aware of the development potentiality which
-- 106 of 142 --
107 Judgment in Suit No.17/2020
included FSI and increased FSI by way of TDR from the
1997 plan sanctioned by the MCGM on 20th November
1997.
124. I thus, find that there has been adequate disclosure
made by Defendant No. 8 in conformity with Clauses 3
and 4 of Form V of MOFA. Another relevant factor is that
the development potentiality of the suit land, which has
been disclosed by Defendant No. 8 as capable of
generating 6,00,000 sq.ft area for construction of the
Buildings including building No. 4 on the suit land will not
be exceeded by Defendant No. 8 in constructing Building
No. 4. The mere fact of the 1997 layout plan showing
Building No. 4 as stilt plus 14 floors cannot dilute the
disclosure made in Recital 11 of MOFA
Agreement/Agreement for Sale which shows the
aforementioned development potentiality of the suit land.
125. I find much merit in the submission of Mr.
Tulzapurkar on behalf of Defendant No. 8 that Section 7A
of MOFA requires disclosure of the development potential
in the Agreement for Sale and does not require disclosure
of number of floors, as the same is subject to planning
approvals. The increase in floors within the development
potential would not prejudice the Plaintiff in any manner.
Further, no alteration, variation or change has been carried
out in Plaintiff’s building. Thus, there is no reason why
Defendant No. 8 is not entitled to construct the building
No. 4 till 33 floors, considering that Defendant No. 8 is
meeting the development potential and is in no manner
exceeding the same.
126. I find that the decision relied upon by Mr. Jagtiani
namely Malad Kokil (supra) is distinguishable on facts
considering that in that case the additional FSI became
available due to change of law. In the present case,
Defendant No. 8 is not exploiting any additional FSI due
to change of law. Further, in that case, this Court had held
that the Developer had represented that they would
construct ground plus 4 floors and exhaust the
developable potential of the land as available under the
1967 DCR. However, due to change in law, despite the
Developer having already exploited the entire developable
-- 107 of 142 --
108 Judgment in Suit No.17/2020
potentiality of the plot, by not executing the conveyance,
sought to take advantage of additional FSI and submitted
plan to construct the building of Ground + 22 floors. In
the present case, I find that the Developer has made the
adequate disclosure of the developable potentiality of the
suit land and that is as per the requirement of extant law
on the date of sanctioning of the 1997 layout plan and
thus, there is no advantage being taken by the Developer
of any change of law by constructing a building beyond
the developable potentiality.
127. The Plaintiff has not challenged the utilization of
TDR for construction of building No. 1 and its own
building No. 3 which shows that the Plaintiff has accepted
the entitlement of Defendant No. 8 to use the TDR even
when its “source is not disclosed”.
128. It is settled law that where the entire scheme is
disclosed to the purchasers under the Agreement for Sale,
there is no separate requirement of consent for the
construction of a building under that scheme under
Section 7A of MOFA. The judgments of the Supreme Court
in Hubtown Solaris (supra) and Jayantilal Investments
(supra) are apposite.”
ii) Kunhayammed and Ors. -Vs- State of Kerala and Another,
Reported in (2006) 6 SCC 359, wherein the Hon’ble Supreme Court in
para 44 has laid down that,
“44. To sum up our conclusions are :-
(i) Where an appeal or revision is provided against an
order passed by a court, tribunal or any other authority
before superior forum and such superior forum modifies,
reverses or affirms the decision put in issue before it, the
decision by the subordinate forum merges in the decision
by the superior forum and it is the latter which subsists,
remains operative and is capable of enforcement in the
eye of law.
ii) The jurisdiction conferred by Article 136 of the
Constitution is divisible into two stages. First stage is upto
the disposal of prayer for special leave to file an appeal.
The second stage commences if and when the leave to
appeal is granted and special leave petition is converted
-- 108 of 142 --
109 Judgment in Suit No.17/2020
into an appeal.
iiii) The doctrine of merger is not a doctrine of universal
or unlimite application. It will depend on the nature of
jurisdiction exercised by the superior forum and the
content or subject-matter of challenge laid or capable of
being laid shall be determinative of the applicability of
merger. The superior jurisdiction should be capable of
reversing, modifying or affirming the order put in issue
before it. Under Article 136 of the Constitution the
Supreme Court may reverse, modify or affirm the
judgment-decree or order appealed against while
exercising its appellate jurisdiction and not while
exercising the discretionary jurisdiction disposing of
petition for special leave to appeal. The doctrine of
merger can therefore be applied to the former and not to
the latter.
iv) An order refusing special leave to appeal may be a
non-speaking order or a speaking one. In either case it
does not attract the doctrine of merger. An order refusing
special leave to appeal does not stand substituted in place
of the order under challenge. All that it means is that the
Court was not inclined to exercise its discretion so as to
allow the appeal being filed.
v) If the order refusing leave to appeal is a speaking order,
i.e. gives reasons for refusing the grant of leave, then the
order has two implications. Firstly, the statement of law
contained in the order is a declaration of law by the
Supreme Court within the meaning of Article 141 of the
Constitution. Secondly, other than the declaration of law,
whatever is stated in the order are the findings recorded
by the Supreme Court which would bind the parties
thereto and also the court, tribunal or authority in any
proceedings subsequent thereto by way of judicial
discipline, the Supreme Court being the apex court of the
country. But this does not amount to saying that the order
of the court, tribunal or authority below has stood merged
in the order of the Supreme Court rejecting special leave
petition or that the order of the Supreme Court is the only
order binding as res judicata in subsequent proceedings
between the parties.
(vi) Once leave to appeal has been granted and appellate
jurisdiction of Supreme Court has been invoked the order
passed in appeal would attract the doctrine of merger; the
-- 109 of 142 --
110 Judgment in Suit No.17/2020
order may be of reversal, modification or merely
affirmation.
(vii) On an appeal having been preferred or a petition
seeking leave to appeal having been converted into an
appeal before Supreme Court the jurisdiction of High
Court to entertain a review petition is lost thereafter as
provided by sub-rule (1) of Rule (1) of Order 47 of the
C.P.C.”
iii) Vishnu Traders -Vs- State of Haryana and Ors., reported in 1995
Supp (1) SCC 461, wherein the Hon’ble Supreme Court in para 3 has
held that,
“3. In the matters of interlocutory orders, principle of
binding precedents cannot be said to apply. However, the
need for consistency of approach and uniformity in the
exercise of judicial discretion respecting similar causes
and the desirability to eliminate occasions for grievances
of discriminatory treatment requires that all similar
matters should receive similar treatment except where
factual differences require a different treatment so that
there is assurance of consistency, uniformity, predictability
and certainty of judicial approach.”
iv) Suhasini Umesh Karanjkar -Vs- Kolhapur Municipal Corporation
and another, reported in 2100 (4) Mh.L.J. 21, wherein Full Bench of the
Hon’ble Bombay High Court in para 35 has held that,
“35. We may also refer to the interim order in Writ
Petition No. 7973 of 2008 referred to in Paragraph 12 of
the judgment in Dadasaheb’s case (Lata Mangeshkar
Medical Foundation vs. The Dy. Medical Officer of Health
Pune Municipal Corporation and others). That interim
order was passed in an altogether different set of facts
and circumstances. In that case, 8 ultrasound machines
were seized from a charitable hospital with 650 beds and
70 ICU beds and it was in that background that a Division
Bench of this Court (without holding that the authority
does not have the power to seize or seal ultra sound
machines) by an interim order, directed the authorities to
return ultrasound machines seized by the authorities on
an allegation that “certain formalities were not fulfilled
-- 110 of 142 --
111 Judgment in Suit No.17/2020
whilst sonography on patients was conducted which
raises the suspicion that sonography might have been
performed for detecting sex of the foetus.”
An interim order cannot be treated as a precedent while
interpreting the provisions of a statute, and that too when
the Division Bench did not refer to section 30 of the Act.”
37. As to Issue Nos.(1) to (4) and (6):-
As all these issues are interconnected and therefore to
avoid the repetition of reasoning, those are taken together for
discussion. The plaintiff is claiming declaration and permanent
injunction that neither the defendant nor any person claiming through
them have right to enter upon the suit property and to interfere with
the possession of plaintiff over CTS No. 13/13A admeasuring 3957.30
sq. mtrs. and for restraining defendant from entering and developing
any part of the suit property.
38. Plaintiff is a co-operative housing society of the building
namely Diamond Hill having two buildings of 7 floor each. It is not the
disputed fact that defendant is the promoter and developer of those two
buildings viz. Wing A and Wing B. The original owner Mr. Divakar
Thimppa Bhandary and others are the owners of the property and they
had given development rights of property bearing CTS No. 13/13A
situated at Village Kurla admeasuring 3957.30 sq. mtrs. to the
defendant. Accordingly, the defendant floated the scheme of the
construction and development of said CTS No.13/13A and got approved
the plans vide IOD dated 02/06/2003 (Exh.46). Though the plaintiff in
its plaint had pleaded about the defendant’s commencing construction
on the adjoining plot of land, but it is nobodies case that the defendant
is proposing or carrying out any construction on any other plot than
-- 111 of 142 --
112 Judgment in Suit No.17/2020
CTS No.13/13A area admeasuring 3957.30 sq. mtrs. The documents of
approved sanctioned plan filed on record by the defendant at Exhs.46 to
49, occupation certificate at Exh.51 and 52 and concession approval
plans and commencement certificate at Exh.54 and 55 shows that the
defendant had constructed Wing A and Wing B earlier and now trying
to construct Wing C at the adjoining area of already constructed Wing A
and Wing B building. Though the plaintiff is claiming declaration and
permanent injunction against the defendant from entering into plot
bearing CTS No.13/13A admeasuring 3957.30 sq.mtrs., but the fact
remains that the plaintiff has no right or title over the remaining area of
CTS No.13/13A except the two buildings i.e. Wing A and Wing B
already constructed on the said plot of land. The defendant being the
promoter and developer of CTS No.13/13A admeasuring 3957.30
sq.mtrs. have the right to enter upon and to construct the third building
as per the approved plans and FSI available for the remaining land.
39. The main dispute in between plaintiff and defendant is
regarding the construction of new third building by the defendant on
CTS No.13/13A admeasuring 3957.30 sq.mtrs. As per plaintiff, the
defendant in total breach of the provisions of Maharashtra Ownership
of Flats Act (MOFA) is constructing the third building just adjacent to
the already constructed two Wings of plaintiff’s society. As per the
plaintiff, the defendant has not given the disclosure to the flat owners
while entering into MOFA Agreements with them and now proceeding
to construct a high tower building in the said land, which is not
permissible as per the provisions of section 7 and 7A of the MOFA. It is
the contention of plaintiff that defendant has not made clear and full
disclosure of the said construction or scheme as well as layout of such
project or building, which he intends to construct on the same plot. The
-- 112 of 142 --
113 Judgment in Suit No.17/2020
defendant without doing so has proceeded to amalgamate the project
and proceed with the construction. The defendant was required to make
a clear and full disclosure of the additional construction to the members
of the plaintiff’s society, which additional structure was not a part of the
layout plan, which was placed before the flat purchasers at the time of
execution of MOFA Agreement. As there was no disclosure made by the
defendant to the flat owners and therefore the defendant was required
to obtain the express consent of the flat owners. Further it is contention
of the plaintiff that defendant has only made a fleeting/incomplete
reference that he may carry out the development of the said plot which
is under encroachment and carry out the development of said plot, but
the defendant has not provided any details regarding layout or FSI
consumption of the additional construction, which he intends to carry
out on the said plot. As the defendant failed to obtain express consent
from the members of the plaintiff’s society and therefore a mere blanket
consent which the defendant has allegedly obtain under the MOFA
Agreement is against the provisions of law. Thus, the plaintiff is
claiming non-disclosure of the complete layout and FSI consumption by
the defendant while entering into the MOFA Agreement with the flat
owners.
40. On the other hand, the defendant came with the defence
that at the time of entering into MOFA Agreement with the flat owners,
clear and full disclosure of the scheme of project and the development
to be carried out by the defendant was given to the flat owners. The
MOFA Agreement entered in between flat owners and defendant clearly
demonstrate that there was sufficient and clear disclosure of the whole
project, undertaken by the defendant, was given to the flat owners and
there was express consent obtained from the flat owners by the
-- 113 of 142 --
114 Judgment in Suit No.17/2020
defendant. As there was full and clear disclosure given to the flat
owners by the defendant and therefore the defendant is not under
obligation to obtain any consent from the flat owners for the
construction of the third building.
41. To appreciate the contention of both plaintiff and
defendant, it is necessary to evaluate and appreciate the documentary
evidence brought on record by both the parties and also to consider the
oral evidence of the respective parties. Plaintiff has examined PW-1 Mr.
Ansari Abdul Rashid Mohammad Rafique (PW-1) at Exh.23, who
deposed as per the pleadings in the plaint and therefore the same is not
reproduced here. During his cross-examination, it is brought on record
that the said witness purchased the flat vide agreement dated
05.05.2005 (Exh.25) from the defendant. He had admitted that the
contents of plaint regarding encroachment on the part of the property is
true and correct. He shown his ignorance regarding removal of said
encroachment in the year 2018-19. He further admits that in the year
2019, defendant had started the construction of third building. He
further admits that at the time of his agreement, he was informed by
the defendant that they will construct three different buildings on the
said property. When the question was put to the said witness regarding
the construction of third building on the same location as informed at
the time of execution of agreement, he answered that the construction
is on the same location, but making different construction than
informed to them.
42. This witness himself has filed on record the agreement
dated 05.05.2005. In the said agreement, there is specific mention
regarding the construction to be carried out by the defendant -
-- 114 of 142 --
115 Judgment in Suit No.17/2020
“AND WHEREAS as per the plans/scheme being
submitted, the Promoters have presently proposed to
construct three wings i.e. wing A consist of ground+
seven upper floors, wing B consist of Ground + Seven
upper floors and wing C consist of Ground + Four upper
floors by use of potentiality of FSI in respect of portion
of the said property and entitle to and reserve their right
to use, utilize, consume and exploit balance/remaining
potentiality of FSI available in respect of the said
property as also the benefit of TDR in all forms to be
acquired and purchased from the Intending seller so as
to avail the same for additional construction by way of
additional floors on the said building and the wings and/
or by construction of additional structure/building/
wings as may be approved and sanctioned by the
concerned Development authority.”
“5. The Promoters hereby declare that the floor space
index available in respect of the said Project/Layout
building/wing A, Wing B and Wing C on property
described in the schedule hereunder written, is about
(blank) sq.mtrs. as per the plans presently sanctioned by
the Development sanctioning Authorities. The Promoters
are entitled to avail use, utilize, consume and exploit the
benefit of TDR without the benefit of TDR in any
manner whatsoever by whatever named called and in all
forms to be acquired and purchased by them during or
after commencement of construction and/or on
completion of construction the building and/or all or any
-- 115 of 142 --
116 Judgment in Suit No.17/2020
one or more of the said Three wings and as may be
permitted by the concerned Development sanctioning
authority and hereby also reserve their right to consume
and avail the benefit of balance FSI available in respect
of the said property and the benefit of TDR a additional
Buildable area by whatever name called and in all forms
in future and as may be permissible and that no part of
the said floor space index has been utilized by the
Promoters elsewhere for any purpose whatsoever. In case
the said Floor Space Index has been or is being utilized
by the Promoters elsewhere, then the Promoters shall
furnish to the Purchaser/s the requisite detailed
particulars in respect of such utilization of said floor
space index by them. In case while developing the said
property, the Promoters have utilized any further floor
space index of any other property by way of floating
floor, space index or TDR then the particulars of such
floor space index shall be disclosed by the Promoters to
the Purchaser at the time of execution of vesting
documents as contemplated hereinafter. The residual
F.A.R. (F.S.I.) in the property not consumed will always
belong to and be available to the Promoters till the
execution of the Conveyance/vesting documents.”
“6. The Promoters hereby represent and declare and
the Purchaser hereby confirm that as per the
plans/scheme of the project being submitted, the
Promoters have presently proposed to construct three
wings i.e. wing A consist of ground + seven upper floors,
-- 116 of 142 --
117 Judgment in Suit No.17/2020
wing B consist of Ground + Seven upper floors and wing
C consist of Ground + Four upper floors by use of
potentiality of FSI in respect of property/potion of the
said property and entitle to and reserve their right to
use, utilise, consume and exploit balance/remaining
potentiality of FSI available in respect of the said
property as also the benefit of TDR by whatever named
called in all forms to be acquired and purchased from
the Intending sellers so as to avail the same for
additional construction by way of additional floors on
the said building and the wings and/or by construction
of additional structure/building/wings as may be
approved and sanctioned by the concerned Development
authority.”
43. Not only this but the defendant has also filed on record
agreement dated 28.12.2007 (Exh.50) executed in between defendant
and one flat purchaser namely Shamshad Ahmed Aslam Khan of Wing
B. The recital in the said agreement at page no.4 and 5 are as under:
“AND WHEREAS the Promoters have applied for and
obtained sanction of plans, issue of I.O.D. bearing No.
CE/3896/BPES/AL dated 2nd June, 2003 and
Commencement certificate dated 18th May, 2006 for the
purpose of development of the said property by
constructing building thereon.
AND WHEREAS on the necessary application/proposals
being submitted for layout and sub division of the said
entire property, the concerned Executive Engineer (BP)
-- 117 of 142 --
118 Judgment in Suit No.17/2020
Eastern Subs by his letter dated 22nd June, 2004 inter alia
approved the layout and sub -division of the said entire
property on the terms and conditions mentioned therein.
AND WHEREAS as per the plans/scheme being submitted,
the Promoters have presently proposed to construct three
wings i.e. wing A consist of ground + seven upper floors,
wing B consist of Ground + Seven upper floors and wing
C consist of Ground + Seven or more upper floors by use
of potentiality of FSI in respect of portion of the said
property and entitle to and reserve their right to use,
utilize, consume and exploit balance/remaining
potentiality of FSI available in respect of the said property
as also the benefit of TDR in all forms to be acquired and
purchased from the Intending seller so as to avail the
same for additional construction by way of additional
floors on the said building and the wings and/or by
construction of additional structure/building/wings as
may be approved and sanctioned by the concerned
Development authority.”
“AND WHEREAS the Purchasers have demanded from the
Promoters and the Promoters have given to the Purchaser
inspection of all the documents relating to the said
building including sanctioned plans, designs,
specifications prepared by the Architect and/or such other
documents such as Revenue and Survey documents as are
prescribed under the Maharashtra Ownership Flats
(Registration of Promotion of Construction, Sale,
Management and Transfer) Act 1963 hereinafter referred
-- 118 of 142 --
119 Judgment in Suit No.17/2020
to as the said Act) and the Rules made thereunder.”
44. Thus, from the above contents in the agreement under
MOFA executed in between members of the plaintiff society and the
defendant, it is clear that since from the beginning the defendant has
proposed to construct three buildings over said CTS No.13/13A as Wing
A, Wing B and Wing C. In the sanctioned layout plan and
commencement certificate issued by competent authority in the year
2004, the permission was granted to defendant to construct wings i.e.
wing A consist of ground+ seven upper floors, wing B consist of Ground
+ Seven upper floors and wing C consist of Ground + Four upper
floors. While later on vide permission dated 26/07/2004 was obtained
by defendant to construct wing A consist of ground + seven upper
floors, wing B consist of Ground + Seven upper floors and wing C
consist of Ground + Seven or more upper floors by use of potentiality of
FSI in respect of portion of the said property. All these plans were put
before the flat purchasers by the defendant prior to the execution of the
agreement under MOFA. Plaintiff has filed only one agreement of MOFA
(Exh.25) on record and has not produced any other agreement entered
with its members. Similarly, defendant has also produced only one
agreement of MOFA (Exh.50). Defendant has also produced on record
sanctioned plans which were duly amended time to time in the year
2006 and 2019. From all these sanctioned plans it transpires that, the
defendant was having the requisite permission from competent
authority to construct three different buildings on CTS No.13/13A.
Therefore, the contention of the plaintiff that defendant has no right to
enter on CTS No.13/13A for making any construction is found to be
misconceived one. Therefore, it cannot be held that the defendants have
no right and/or not justified to enter upon, remaining and/or disturb
-- 119 of 142 --
120 Judgment in Suit No.17/2020
the plaintiff’s peaceful occupation and possession on the plot bearing
CTS No.13/13A admeasuring 3957.30 sq. mtrs. and construct third
building C Wing.
45. Though, the plaintiff pleading in the plaint shows that, the
plaintiff wants to restrain the defendant from entering upon and
constructing on any part of CTS No.13/13A, but during the evidence
and arguments, it was the case of the plaintiff regarding the breach of
provisions of MOFA by defendants while proceeding with the
construction of third building. As discussed above, the gist of the
dispute is regarding breach of provisions of Section 3 and 4 of MOFA
due to non-disclosure of the layout and plans by the defendant to the
flat purchasers of Wing A and Wing B and in consequence of the same
breach of provisions of Section 7 and 7A of MOFA, as the defendant is
proceeding with the construction of Wing C of 16 floors without
obtaining the prior consent of the flat purchasers.
46. During the arguments plaintiff and defendant has relied on
several rulings as recorded above. The gist of all those rulings can be
summarized as, 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 is capable of being loaded
with additional FSI/floating FSI/TDR. The promoter is statutorily
obliged at the time of execution of the agreement with the flat
purchasers, to place before the flat purchasers the entire
project/scheme, be it one building scheme or multiple numbers of
buildings scheme. Once the entire project is placed before the flat
purchasers at the time of agreement, then the promoter is not required
to obtain prior consent of the flat purchasers, as long as the builder puts
up additional construction in accordance with the layout plan, building
-- 120 of 142 --
121 Judgment in Suit No.17/2020
rules and Development Control Regulations.
47. Thus, in the present case, it is incumbent on the plaintiff to
prove that there was no necessary disclosure given by the defendant at
the time of execution of MOFA agreement and said non-disclosure by
defendant cast mandatory duty on the defendant to obtain prior written
consent from the flat purchasers for carrying on additional construction
over the property bearing CTS No. 13/13A. For the same plaintiff has
examined (PW-1) Ansari Rafique at Exh.23, who deposed that, he
entered into agreement with defendant on 05/05/2005 and defendant
instead of completing the project of the plaintiff’s society, has
commenced another building on the same plot of land causing grave
hardship to the members of the society. He further deposed that
defendant failed and neglected to make true and full disclosure to the
flat purchasers with regard to the additional structure he is attempting
to construct and is doing so without obtaining their express consent and
the promoter is trying to alter the plan without consent of the members
of the plaintiff’s society. He further deposed that, defendant has not
made full and true disclosure of the said construction, the scheme, or
the layout of the project he intends to construct on the adjoining plot
and without disclosure, the defendant has proceeded to amalgamate the
project and commence construction. He further goes to deposed that,
the additional structure was not part of the layout plan presented to the
flat purchasers at the time of the MOFA Agreements. Further, defendant
has only made vague and incomplete references to a possible
development of the said plot, without providing any details regarding
the layout, FSI consumption or other relevant aspects of the additional
construction. But this witness during his cross-examination has
admitted that at the time of his agreement, he was informed by the
-- 121 of 142 --
122 Judgment in Suit No.17/2020
defendant that they will construct three different buildings on the said
property. He also admitted that, the defendants are making the
construction of the third building on the same location, but added that
they are making different construction than informed to them. Thus,
from the above discussed evidence of the plaintiff, it is crystal clear that
at the time of entering into agreement with the flat owner’s, defendant
has disclosed that there will be three buildings constructed on the said
property. The agreements (Exh.25 and 50) itself shows that all the
documents regarding the layout, sanctioned plan and others, were put
before the flat purchasers. Further as the plaintiff has filed one MOFA
agreement (Exh.25) and defendant has filed on record MFA agreement
(Exh.50) and agreements of other flat owners are not produced on
record and therefore the contents of the said agreements need to be
considered to decide the dispute between the parties.
48. As already noted above the contents of the agreement
which clearly demonstrate the terms and conditions entered in between
members of the plaintiff society and the defendant. After going through
the same, it is evident that the defendant has disclosed the layout plan,
sanctioned plans and the availability of FSI in future and the right of
defendant to use the said FSI which will be made available in future, for
the said property. It is also evident that in the sanctioned plan of the
year 2004, the allowed construction of Wing C was Ground plus Four
Floors and the same was later on amended and obtained the sanction
for the construction for Wing C as Ground plus Seven Upper Floors. The
terms of agreement further clearly show that at the time of execution of
agreement itself it was made clear to the flat purchasers that the
defendant is entitle to carry out the construction by use of potentiality
of FSI in respect of portion of the said property and entitle to and
-- 122 of 142 --
123 Judgment in Suit No.17/2020
reserve their right to use, utilize, consume and exploit
balance/remaining potentiality of FSI available in respect of the said
property as also the benefit of TDR in all forms to be acquired and
purchased from the intending seller so as to avail the same for
additional construction by way of additional floors on the said building
and the wings and/or by construction of additional
structure/building/wings as may be approved and sanctioned by the
concerned Development Authority. Further contents of the agreement
also demonstrate that, if due to any further change in the FSI Rules,
more FSI becomes available (including on account of staircase, walls,
lifts, balcony, passage, etc.) then in such event the Promoter alone shall
be entitled to use, utilize, consume and exploit such addition FSI on the
said property by constructing additional structure or additional floor in
the said property. It is also specifically agreed in between the flat
purchasers and the defendant that, the purchasers agrees and undertake
that he/she/they shall not obstruct or object or dispute to the right, title
and interest of the promoter in respect of the use of the
balance/remaining FSI available in respect of the said property and the
additional FSI and/or TDR or Additional Building Area benefit by
whatever named called and in all forms available to the promoter as per
the existing policy or concerned Statute, Rules, Regulations, Circulars
etc.
49. Thus when the members of the plaintiff’s society/flat
purchasers have in clear and unequivocal word agreed to the terms and
conditions of the MOFA agreement executed in between them and the
defendant being promoter/developer and have agreed to the right of
the defendant for the use of additional FSI which will be made available
on the said property and also agreed that the defendant will have the
-- 123 of 142 --
124 Judgment in Suit No.17/2020
right to construct additional building or floor by using the FSI, that may
be made available in future for the said property, then the plaintiffs are
bound by the said agreement and cannot have the right to go behind
the said agreement to deny the right of the defendant to construct Wing
C by using the FSI available of the said property. Therefore, after
evaluating the material placed on record and the contents of the
agreement under MOFA, it is brought on record that defendant has
given the full and true disclosure of the layout plan, sanctioned plan
and all other documents to flat purchasers in respect of the construction
to be carried on by the defendant over CTS No. 13/13A.
50. It is further the case of the plaintiff that, the defendant is
carrying on the construction of third building i.e. Wing C in total
disregard to the plans shown to the flat purchasers and now proceeding
with the construction of Wing C having 16 Floors which is against the
provisions of MOF Act. As far as this contention is concern, plaintiff has
relied on the evidence of (PW-2) Architect Farzan Juwle at Exh. 30. This
witness deposed about his report (Exh.41) prepared after scrutinizing
the proposal submitted by defendant with BMC on 18/11/2019 and
opined as under :
i) The plinth of the proposed Building “A Wing” which is
earlier mentioned as C Wing in the registered sale
agreements of the tenements plan which was submitted
and issued by MCGM dated 18/05/2006 is different as per
new proposal submitted to MCGM dated 18/11/2019.
ii) As per new proposal which consist of Gr + 16 Upper
floor it abuts the building mentioned as “B” Wing. It is
clearly seen that the ventilation of the building is affected.
-- 124 of 142 --
125 Judgment in Suit No.17/2020
The adjoining toilet ducts of the B wing shall not be
accessible in future maintenance hence the ventilation of
the toilet shall be blocked.
iii) Due to the height of new building, it shall also affect
the light and ventilation of building which is already
constructed.
iv) The provided parking as per new proposal states that
the parking for the new building members shall be
accommodated in the plot which shall be in the society
premises shall create nuisance in the society premises.
v) It will clearly seen in the proposal dated 18/05/2006
states that the new building which is to be constructed as
“A Wing” was earlier mentioned to be Gr + 4 Upper floors
wherein the new proposal dated on 18/11/2019 states the
building shall comprise of Gr + 16 floors.
vi) The plinth does not show resemblance of the new
proposal submitted dated on 18/11/2019. The ares of the
plinth which is submitted in new proposal is 28.00 X
12.00 mts which was submitted in previous approval is
19.64 X 12.00 mtr dated in 2006.
51. Said witness also deposed that sanctioned plan dated
28/11/2019 reflects the computation of FSI in accordance with the
DCPR 2034, which show that the computation bases on the plot area
and substantially consumed FSI; Additional FSI permissible under
regulation 30 of Table 12(A) of the DCPR 2034 based on road width,
has been fully utilized; as per DCR 1991 a portion of Recreational
-- 125 of 142 --
126 Judgment in Suit No.17/2020
Ground was required to be handed over to the MCGM and the same
was not done by defendant and despite it under DCPR 2034, the said
Recreational Ground area has been considered in FSI computation and
thereby benefit of area admeasuring 593.58 sq. mtrs. was appropriated
and utilized by the defendant; sanctioned plan dated 18/11/2019
indicates parking in excess of the minimum requirement for newly
constructed wing which is going to adversely affect the regular usage
and enjoyment of the premises by the existing members of plaintiff
society; and that the FSI as per DCR 1991 and DCPR 2034 showing FSI
computation as per old and new approval and the said new construction
leaving no scope for any future development for the existing members
of society and will create nuisance.
52. But during his cross-examination by defendant, said expert
witness has admitted that proposal dated 18/11/2019 is not filed on
record. He further admitted that apart for the sanctioned plans referred
by him, there are other sanctioned plans of the same property on the
official website of MCGM. He further admitted that the deficiency
deposed by him in Court are not recorded in his report Exh.41. He
categorically admitted that as per DCR 1991 the Recreational Ground
was not required to be handed over to MCGM by the developer/owner.
He also admitted that out of 4 sheets of sanctioned plan dated
26/07/2004 were there on the website of MCGM and out of them only
one sheet have been filed by him on record and therefore he cannot
state as to how many parking spaces are shown in the said plan. He also
admitted that in sanctioned plan dated 09/09/2019 (Exh. 34) seven
parking places shown for the already constructed two wings as per
sanctioned plan, were not disturbed. He further admitted that the
proposed new third building is being shown on the northern side of
-- 126 of 142 --
127 Judgment in Suit No.17/2020
already constructed building Wing B and on the northern side wall of
the whole building Wing B there are no windows or doors given to the
flats, except the toilet windows and toilet ducts are provided for the
maintenance and ventilation of those toilets. He admits that in sanction
plan dated 09/09/2019 access to duct is provided. He unequivocally
admitted that due to sanction of new plan dated 09/09/2019 the
finding in his report in respect of ventilation and maintenance of toilet
ducts is no more in existence. He also admits that while giving his
report dated 16/12/2019, he had not considered the approved plan
dated 09/09/2019. He lastly admitted that due to sanctioned plan
dated 09/09/2019, the resident of already constructed two buildings
will not be affected in any manner.
53. Thus, from the evidence of expert witness, it is brought on
record that due to construction of the third building there will not be
any effect on the flat owners of the already constructed two buildings.
Further, the said evidence also made it clear that, neither the ventilation
nor the maintenance of the toilet ducts situated on the northern side
wall of the Wing B building will be affected by the construction of the
third building “Wing C” by the defendant and there is also no effect on
the parking place already allotted to the already constructed two
buildings. It is thus proved that due to construction of the third
building by the defendant, all the shortfalls and effects of construction
of the new building on the already constructed two buildings were
washed out due to sanctioned plan dated 09/09/2019.
54. As already discussed above the defendant was having the
right to construct third building over CTS No. 13/13A area 3957.30 sq.
mtrs., now the question remains regarding the objection of plaintiff in
respect of the construction of 16 Upper floors of new building “Wing C”.
-- 127 of 142 --
128 Judgment in Suit No.17/2020
In this regard it is noteworthy to mention here that, in the sanctioned
plan of 2004, the defendant has taken the sanction of construction of
Third building as Ground + Four Upper Floors. But while entering into
agreement with the flat purchasers itself, it was disclosed that, the
construction will be done by use of potentiality of FSI in respect of the
said property and defendant are entitle and reserves their right to use,
utilize, consume and exploit balance/remaining potentiality of FSI
available in respect of the said property. Not only this but the terms and
conditions of the said MOFA agreement itself discloses that, if there is
any change in the FSI due to change in any rules, regulations or
introduction of any policy and additional buildable area is available on
the said property, then promoter alone shall be entitled for such FSI or
TRD. Thus, the while entering into MOFA agreement itself the flat
purchasers have consent and agreed that the defendant will be entitle
for any additional FSI which will be available for the said property.
Therefore, now it is not available to the flat purchasers to deny the said
right of the defendant to use, utilize, consume and exploit the whole FSI
available for the construction of the third building “Wing C”. The terms
and conditions of the MOFA agreement are binding on both, flat
purchasers as well as the defendant being the promoter/developer.
Therefore, the plaintiff’s society and its members are estopped from
denying the right of the defendant and hence the defendant is entitled
to construct the third building as per the layout plan, building rules and
Development Control Regulations (DCPR).
55. As per the plaintiff, the defendant is carrying out the
construction of third new building in total disregard to the DCR 1991
and utilizing the benefits of the new DCPR 2034 and thereby getting the
benefit/advantage of 593.58 sq. mtrs. For appreciating the said issue, it
-- 128 of 142 --
129 Judgment in Suit No.17/2020
is necessary to look into the documents produced on record and also the
evidence of the defendant. Defendant deposed in consonance with the
written statement filed on record and therefore the same is not
reproduced here for the sake of brevity. During his cross examination, it
is brought on record that, DCPR 2034 came into force some were in the
year 2018. He admits that the sanctioned plan of 2019 contemplates
utilization of TDR, but he explained that the decision to use the TDR or
not is not yet taken. He admits that he had got approved plan in the
year 2019 from MCGM by taking benefit of DCPR 2034. He further
admits the overlapping map (Exh. 60) showing sanctioned plans of the
year 2004, 2006 and 2019. He also admitted that after 22/06/2004
there is no sub-division of CTS No. 13/13A area 3957.20 sq. mtrs. It is
also brought on record that the encroachment was part of CTS No.
13/13A having total area 3957.20 sq. mtrs. of which he had submitted
the plans. He further admitted that he is carrying on construction of
third building as per the plinth shown in the sanctioned plan of the year
2019. He further admitted that he had not obtained any informed
consent in writing from the flat owners for construction of the third
building. He has denied that there was no encroachment on the said
property and deposed false that the same was removed by them.
56. Thus, from the evidence of the defendant it is brought on
record that, the defendant has got sanctioned the plan as per DCPR
2034 which was came in force in the year 2018. Therefore, the effect of
both DCR 1991 and subsequent DCPR 2034 on the proposed
construction of third building by the defendant needs to be taken into
consideration. The defendant has specifically came with the case that in
the year 2007 itself the total Build Up Area available to defendant for
construction of third Wing was 4420.76 sq. mtrs. without taking benefit
-- 129 of 142 --
130 Judgment in Suit No.17/2020
of fungible compensatory area which was made available in the year
2012. This available area was available after deducting the build up
area of 2900.06 sq. mtrs. of already constructed two wings. Thus, the
defendants want to utilize the FSI available on the said land as per DCR
1991 only. In this connection it needs to appreciate that the plaintiff has
filed on record Notesheet (Exh. 39). The contents of the said Notesheet
clearly shows that the amended plans of defendant were scrutinized as
per DCPR 2034 and FSI calculations are based on DCR 1991 as per the
Hon’ble Supreme Court Order and the same is in order as far as FSI
point of view. Thus, it is clear from the said Notesheet that, the
amended plans were approved by the MCGM by taking into
consideration DCR 1991 and not by taking into consideration DCPR
2034. The reason behind the same was that regime of DCR 1991 was
not in existence at the time of sanction of plan in the year 2019, as
regime of DCPR 2034 was came in force in the year 2018 itself.
Therefore, the contention of the plaintiff that the defendant is taking
benefit of the DCPR 2034 while proceeding with the construction of the
third building, is found to be misconceived one and against the record.
57. Another important factor in the present case which goes to
the root of the case is that, there was an encroachment of 142.38 sq.
mtrs. over the said CTS No. 13/13A area 3957.30 sq. mtrs. by the
owner of CTS No. 13/15 situated towards the western side of the said
plot and due to removal of the said encroachment by the defendant, the
said area was made available for construction and for calculation of FSI
of the said plot. The fact of encroachment is evident from the
sanctioned plans 2004, sanctioned plan of 2006 and part occupation
certificates issued from time to time, which shows that the total area of
CTS No. 13/13A was 3957.38 sq. mtrs, encroachment area of 142.38
-- 130 of 142 --
131 Judgment in Suit No.17/2020
sq. mtrs and the balance plot area was shown as 3242.60 sq. mtrs. for
calculating the FSI. Thus, while sanctioning the construction plans
submitted by the defendant, the competent authority has only
considered the area of the plot excluding the area under encroachment
and the available area was only considered for calculating the
construction prospect and FSI. But after removal of encroachment by
defendant, when the amended plans were sanctioned by the competent
authority in the year 2019, the area of encroachment admeasuring
142.38 sq. mtrs being removed was taken into consideration for
calculating the available FSI for the construction on the remaining
portion of land of CTS No. 13/13A admeasuring 3957.20 sq. mtrs after
deducting the area of already constructed two buildings i.e. Wing A and
Wing B. Therefore, though the plaintiff denied the removal of
encroachment by the defendant, but the same is proved on record by
the documentary evidence in the form of Sanctioned Plans and
Occupation Certificates issued by MCGM. Thus, due to removal of
encroachment of area of 142.38 sq. mtrs. the defendant is entitled to
utilize the said area of land for construction by utilizing the permissible
FSI as per DCR 1991.
58. Not only this but one another circumstance proved on
record that, the plaintiff society was got registered by the order of
competent authority Joint Registrar, Co-operative Societies, East
Suburb, Mumbai dated 06/01/2017. In the said proceeding initiated by
the members of the plaintiff society, defendant has filed his objection.
While passing the order of registration of plaintiff’s society, the
competent authority has specifically ordered that the developer has the
right to construct the building as per the sanctioned layout and
amended sanctioned plans and the plaintiff’s society should not object
-- 131 of 142 --
132 Judgment in Suit No.17/2020
for the further construction and use of balance FSI. In the said
proceeding itself the defendant has narrated the further construction
proposed of the third building and the area of the construction. Thus
from the said order itself the plaintiff’s society was allowed to be
registered with the rider that they will not obstruct the construction of
the third building. It is an admitted fact that the said order of
registration of plaintiff’s society is not challenged by any of the parties
and the same has attained finality. Therefore, the said order is found
binding on plaintiff’s society and also on defendant and both of them
cannot go behind the said order. Thus, by the said order also the
plaintiff’s society is estopped from denying the right of the defendant to
construct the third building as per the sanctioned plan approved by the
MCGM.
59. Though during the arguments plaintiff submitted that the
Hon’ble Bombay High Court vide order dated 08/01/2024 in Appeal
from Order No. 418 of 2023 has already held that the defendants are
not entitle to construct additional building as per sanctioned plan of
2019 and the said order is not set aside by the Hon’ble Supreme Court
in SLP (C) No. 3420 of 2025 dated 01/08/2025 and therefore the
finding of Hon’ble High Court are binding and on the same principle,
suit of the plaintiff needs to be decreed. It is further submitted that, the
Hon’ble Bombay High Court in subsequent decision in the case of
Rajkumar Gulati & Ors. -vs- S.D. Corporation Pvt. Ltd. & Ors., reported
in 2025: BHC-OS:20608 has observed that the ratio of judgment in
Appeal from Order No. 418 of 2023 dated 08/01/2024 does not
disturbed by the Hon’ble Supreme Court in SLP (C) No. 3420 of 2025
dated 01/08/2025.
-- 132 of 142 --
133 Judgment in Suit No.17/2020
60. On the other hand, defendants argued that the judgment
passed by Hon’ble Bombay High Court in Appeal from Order No. 418 of
2023 dated 08/01/2024 was merged in the judgment passed by the
Hon’ble Supreme Court in SLP (C) No. 3420 of 2025 dated
01/08/2025 and therefore, the findings in the said judgment cannot be
taken into consideration at the time of deciding the suit on merit. He
further submitted that the findings given by the Hon’ble High Court
were prima facie in nature during the interim stage of the suit and
those findings cannot be said to be binding on this Court while deciding
the matter on merit,6 after the evidence adduced by both the parties.
He further submitted that after oral and documentary evidence
adduced by both the parties, this Court needs to decide the matter on
merit.
61. It is matter of record that after passing the order on Notice
of Motion filed by plaintiff restraining the defendant from carrying on
the construction and the said order was challenged before the Hon’ble
High Court in Appeal from Order No. 418 of 2023, wherein the Hon’ble
High Court vide order dated 08/01/2024 maintained the order on
injunction. Thereafter, the said order was taken before the Hon’ble
Supreme Court by defendant in SLP (C) No. 3420 of 2025 and the
Hon’ble Supreme Court by judgment dated 01/08/2025 allowed the
defendant to carry on construction by imposing conditions. It is worth
while to mention here that the Hon’ble High Court while passing the
judgment dated 08/01/2024 specifically recorded that, “Needless to
observe that all the findings recorded in the present Judgment are
prima facie and the City Civil Court shall not be influenced by the same
while deciding the suit finally.” Thus, the findings given by Hon’ble High
Court in the said judgment were on the basis of material placed at an
-- 133 of 142 --
134 Judgment in Suit No.17/2020
interim stage of the proceeding and at that time evidence of the parties
were not adduced. But now both the parties have adduced their oral as
well as documentary evidence and after appreciating all the material
brought on record, the dispute between both the parties needs to be
decided. Therefore, the contention of the plaintiff that the prima facie
findings given by the Hon’ble High Court are binding at this stage also,
need to be rejected.
62. Thus, from all above discussion it is brought on record that
there was true and clear disclosure of the layout plan, sanctioned
construction plan and the nature of the construction to be carried on by
the defendant over CTS No. 13/13A area 3957. 20 sq. mtrs to the flat
purchasers at the time of executing MOFA agreement and therefore
there is sufficient compliance of the provisions of Section 3 and 4 of
MOF Act and in such background the provisions of Section 7 and 7A of
MOFA has found not applicable to the facts and circumstances of the
present case. Thus, the defendant is entitled to carry on the
construction of the third building as per the approved amended
sanctioned plan by MCGM. Further, by the construction of the third
building by the defendant on the remaining portion of CTS No. 13/13A,
no prejudice whatsoever would cause to the members of the plaintiff’s
society. Therefore, I am of the considered opinion that the plaintiff has
failed to prove Issue Nos. 1 to 4 and 6 and hence they need to be
answered in Negative.
As to Issue No.5:-
63. Plaintiff has come with a case that defendant being the
promoter and developer of the buildings Wing A and Wing B
constructed on CTS No. 13/13A has failed to perform his statutory
-- 134 of 142 --
135 Judgment in Suit No.17/2020
duties of registration of Co-operative Hosing Society of the flat
purchasers of already constructed two building and hence members of
the society was constrained to get the society registered at their own
expenses. In respect of the said claim of the plaintiff, it needs to
consider that the fact that the members of the society themselves
applied for the registration of the Society and on their application the
Sub-Registrar of Co-operative Societies vide order dated 16/01/2017
passed the order of registration of plaintiff society, is not disputed. The
order of registration of society (Exh.53) is placed on record by the
defendant itself. As per the contents of the said order passes by Sub-
Registrar of Co-operative Societies it is crystal clear that as the
defendant failed to register the co-operative housing society after lapse
of 10 years also, the flat purchasers of the Wing A and Wing B were
constrained to apply for registration of the society. Thus, it is brought on
record that the flat purchasers themselves got registered the housing
society namely Diamond Hill Co-operative Housing Society. It was the
duty of the defendant to get register the housing society of the flat
owners with four months and if no time is specified in the agreement,
then with the reasonable period. In this regard it is the defence taken by
the defendant that as the construction of the third building was not
commenced and therefore one housing society for all the three building
was to get registered after the completion of the third building, by
including the flat purchasers of the third building. But the said defence
is found to be contrary to the provisions of law which requires the
promoter/developer to get register the housing society after selling the
minimum flats. It is brought on record that the defendant sole the flats
of Wing A and Wing B in the year 2007 and therefore it was incumbent
on the defendant to get register the housing society within the
reasonable period. But the defendant failed to do so and therefore after
-- 135 of 142 --
136 Judgment in Suit No.17/2020
lapse of 10 years of selling the flats, flat purchasers themselves got
register the housing society.
64. Thought the plaintiff averred about the expenses bourn by
the flat purchaser for the registration of the society, but there is no
evidence adduced by the plaintiff to prove the quantum of the expenses.
Mere pleading of the bearing the expenses without proof of the same, is
not sufficient for the plaintiff to get the said expenses reimbursed from
the defendant. Further, there is no prayed made by the plaintiff in the
suit for reimbursement of the claim of the registration expenses.
Therefore, though the plaintiff proves that they themselves got
registered the housing society as the defendant failed to perform his
duties, no relief can be granted in favour of the plaintiff in that respect.
65. Plaintiff further pleaded about the failure of defendant to
execute the deed of conveyance in favour of the plaintiff society within
four months of formation of the plaintiff society. In this connection it
needs to appreciate the contents of the agreement executed in between
flat purchasers and the defendant. Clause 199 of agreement (Exh. 25)
specifically provides in respect of the execution of conveyance, which is
reproduced as under :
“19. Unless it is otherwise agreed to by and
between the parties hereto the Promoter shall after
completion full development of the Scheme/Project
by construction of all the buildings and wings
including by use of the potentiality of all the benefits
including of TDR in all forms to the fullest on the
said property, within reasonable period of not less
than 24 months of formation / registration of the
-- 136 of 142 --
137 Judgment in Suit No.17/2020
society or Limited Company or organization, as
aforesaid transfer and /or cause to be transferred to
the Society or Limited Company or organization all
their rights, title and interest as the Promoter
/owners and to convey and transfer the said
property together with the buildings by executing
the necessary conveyance/declaration of the suit
property to the extend as may be permitted by
authorities and the said building in favored of such
society or Limited Company or organization as the
case may be such conveyance /declaration shall be
in keeping with the terms and provisions of this
agreement. The Promoter may at their option and
cause to be demised the building in favour of the
said Organization by executing lease for the period
as they decided.”
66. Thus, from the above averments it is clear that there are
two eventualities provided for execution of conveyance in favour of the
Society i.e. i) after completion full development of the Scheme/Project
by construction of all the buildings in all forms to the fullest and ii)
within reasonable period of not less than 24 months of
formation/registration of the society. As per the said term the intention
of the parties needs to gather to come to conclusion as to when the
deed of conveyance was to be executed by the defendant. The said
scheme/project was in respect of construction of the three buildings by
the defendant and after completion of construction of the three
buildings the society was to be formed and thereafter the conveyance
shall be executed in favour of the said housing society. Bur as the
-- 137 of 142 --
138 Judgment in Suit No.17/2020
plaintiff got registered their housing society prior to the
commencement of the construction of the third building, they are
claiming for the conveyance to be executed by the defendant. In this
connection it needs to appreciate that the flat owners had purchased
their respect flats from 2005-2007 of Wing A and Wing B and till this
date the deed of conveyance is not executed. Further the plaintiff
society was registered in the year 2017 itself and thereafter also the
defendant has not executed any conveyance or declaration in its favour.
Therefore, looking to the facts and circumstances of the present case, it
needs to direct the defendant to execute necessary document of
conveyance / declaration in favour of the plaintiff society in respect of
the flats already sold to the flat purchasers of already constructed Wing
A and Wing B within a reasonable period not exceeding six months
from the date of this judgment.
67. Plaintiff further claims that the defendant failed to provide
Audited Accounts and failed to handover papers and documents to the
Society. Thus as above discussed the defendant is bound to execute the
conveyance/declaration in favour of the plaintiff society within six
months from the date of this judgment, and therefore the defendant is
also bound to hand over all the relevant papers/documents to the
plaintiff and also give the audited account of the money received and
expenses incurred by defendant in respect of the maintenance and
other expenditure of flats already constructed.
68. As far as the claim regarding the failure of defendant to
obtain water connection and meter is concerned, there is no evidence
adduced by the plaintiff to prove as to when the water connection was
obtained. In absence of any evidence to prove as to when the water
connection was obtained and as to the demand of the flat owners in
-- 138 of 142 --
139 Judgment in Suit No.17/2020
respect of the providing the water connection, it cannot be said that
the plaintiff has proved that the defendant has failed to provide the
water connection to the already constructed flats in Wing A and Wing
B.
69. As far as the failure of the defendant to pay the property
tax is concerned, (PW-1) Ansari it is brought on record that no letter
given to defendant regarding payment of property tax was filed on
record by the plaintiff. The defendant during his cross examination has
admitted that from 2007 till 2010 it was his responsibility to pay the
property tax of second building. He further deposed that the property
taxes of already constructed building after 2007 till receipt of
Occupation Certificate in the year 2010 was paid from their money.
Except the above evidence there is nothing brought on record by the
plaintiff that there was any arrears of property taxes for the relevant
period of responsibility of defendant. There is no evidence adduced by
the plaintiff to prove any arrears of property taxes to be paid by the
defendant or that those property taxes were paid by the plaintiff which
needs to be reimbursed by the defendant. In absence of any proof of
any failure of defendant to pay the property taxes as per his
responsibility, it cannot be held that the defendant has failed to pay
any property taxes. Hence after all above discussion, I answer the Issue
No. 5 as partly affirmative.
As to Issue Nos. 8 and 9:-
70. Defendant has taken the defence that the suit of the
plaintiff is barred by law of limitation and also the suit is not
maintainable. But it is settled principal of law that the issue of
limitation is mixed question of law and fact and the same needs to be
-- 139 of 142 --
140 Judgment in Suit No.17/2020
decided after scrutinizing the evidence. But in the case in hand except
taking the defence of suit being barred by law of limitation and suit
not maintainable, defendant has not adduced any evidence to prove
the said defence. Merely taking defence is not sufficient to prove the
same. Therefore, in absence of any cogent evidence to prove that the
suit is barred by limitation and the same is not maintainable, hence,
Issue Nos. 8 and 9 need to be answered in Negative.
71. In view of all above discussion and after scrutinizing the
pleadings as well as oral and documentary evidence, I am of the
considered opinion that, plaintiff has failed to prove that, there was no
disclosure given by the defendant in respect of the scheme/project to be
constructed by the defendant over CTS No. 13/13A and that there was
any breach of provisions of MOFA committed by the defendant and
failed to prove Issue Nos. 1 to 4 and 6 and as the plaintiff partly proves
the Issue No.5, hence, the Suit of plaintiff needs to be partly decreed.
Hence, I proceed to pass following order :
ORDER
1. Suit is partly decreed.
2. The prayers in respect of the declaration and injunction as prayed
in prayer clause (a) to (c) of plaint are hereby dismissed.
3. The prayer in respect of prayer clause (d) is partly allowed as
under :
The defendant is hereby directed to execute necessary
document of conveyance / declaration in favour of the
plaintiff society in respect of the flats already sold to the
flat purchasers of already constructed Wing A and Wing
-- 140 of 142 --
141 Judgment in Suit No.17/2020
B within a reasonable period not exceeding six months
from the date of this judgment.
4. Other reliefs claimed by the plaintiff are hereby dismissed.
5. Decree be drawn up accordingly.
(Shri N. V. Jiwane)
Special CBI Judge, C.R.No.52
City Civil & Sessions Court,
Date : 13.07.2026 Gr. Mumbai.
Direct dictated on Computer on : 08.06.2026, 29.06.2026, 06.07.2026
& 13.07.2026
Checked & Singed on : 13.07.2026
-- 141 of 142 --
142 Judgment in Suit No.17/2020
“CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER”
13.07.2026 at 6.37 p.m. Mrs.K.Y. Inamdar
UPLOAD DATE AND TIME NAME OF STENOGRAPHER
Name of the Judge (With Court Room
No.)
HHJ Shri N. V. Jiwane
(C.R.No.52)
Date of Pronouncement of JUDGMENT
/ ORDER
13.07.2026
JUDGMENT/ORDER signed by P.O. on 13.07.2026
JUDGMENT/ORDER uploaded on 13.07.2026
-- 142 of 142 --