First Appeal No.786 of 2004,First Appeal No.989 of 2004

7th October, 2010

Petitioner Counsel: Mr. MAHENDRA GHELANI,Ms. VEENA ADVANI , Mr. PRATIK SHAH
Respondent Counsel: Mr. PRADEEP SANCHETI,Mr. VATSAL SHAH,Ms. Kumud A. Bhatia,Mr. VINOD MAHADIK

Cases Cited:
Kalpita Enclave Co-operative Housing Society Ltd. Vs. Kiran Builders Pvt. Ltd., 1986 Mh.L.J. 110 : 1987(1) Bom.C.R. 355 [Para 2,10,11]
Manratna Developers Vs. Megh Ratan Co-operative Housing Society Ltd., 2008(6) ALL MR 550=2009(2) Bom.C.R. 836 [Para 11,55]
White Towers Co-operative Housing Society Ltd. Vs. S. K. Builders, 2008(4) ALL MR 838=2008(6) Bom.C.R. 371 [Para 11,38]
Bajranglal Eriwal Vs. Sagarmal Chunilal, 2008(6) Bom.C.R. 887 [Para 11,44]
Ralph D'souza Vs. Danny D'souza, 2006(4) ALL MR 519=2006(3) Bom.C.R. 326 [Para 11]
The Mohatta Nagar Co-operative Housing Society Ltd. Vs. M/s. Vishram Khimji & Sons, 1994(1) Bom.C.R. 444 [Para 11]
Smt. Neena Sudarshan Wadia Vs. M/s. Venus Enterprises, 1984(2) Bom.C.R. 505 [Para 19,44,45]
Bhuvaraha Maithreyan, Through the Power of Attorney Holder Dr. Tara Maithreyan Vs. Municipal Corporation for the City of Pune, 2003 Vol. 105(3) Bom.L.R. 803 [Para 19]
Nahalchand Laloochand Pvt. Ltd. Vs. Panchali Co-operative Housing Society Ltd., Civil Appeal No.2544/2010 Dt.31-08-2010 [Para 19,57]
Megh Ratan Co-operative Housing Society Ltd. Vs. Rushabh Rikhav Enterprises, 2009(1) Bom.C.R. 361 [Para 39]
Ravindra Mutenja Vs. Bhavan Corporation, 2003(3) ALL MR 521= 2003(5) Bom.C.R. 695 [Para 41,42,44,56]
Tejal Residency Co-operative Housing Society Ltd. Vs. Brihan Mumbai Municipal Corporation, 2007(6) ALL MR 861 [Para 44]
Khatri Builders Vs. Mohmed Farid Khan,, 1992(1) Bom.C.R. 305 [Para 44]

JUDGMENT

JUDGMENT:- The present appeals, which have been remanded for decision afresh, as per the judgment of the Supreme Court, in Civil Appeal No.3233 of 2006, challenge the judgment and decree, dated 31st March, 2004, in L.C. Suit No. 4385 of 1997, passed by the learned Judge of the City Civil Court, Greater Mumbai.

2. The facts, in brief, giving rise to the filing of present appeals, are as under:

(a) On 26-8-1980, an agreement was arrived at between the vendors and the appellant in Appeal No. 989/2004 (original defendant no.1 - hereinafter referred to as "promoter"), in respect of 8559.57 sqm. of land in CTS No. 1068 at village Kandivili, Tehsil Borivali, Greater Mumbai. Subsequently, under the Revised Draft Development Plan, a 44 ft. wide road was indicated and, consequently, the area admeasuring 8559.57 sqm. stood divided. On account of this division, a plot admeasuring 6071 sqm. emerged as the suit land. On 16-11-1984, the promoter obtained NOC under Section 21(1) of the Urban Land Ceiling Act, 1976 ("ULC Act") permitting it to construct a building with 7 wings and 137 tenements for weaker section. The construction was to be made in accordance with the prevailing Municipal Regulations, Town Planning requirements and Statutory Regulations. On 21-10-1985, the layout plan was sanctioned. It indicated 1 building with 7 wings. At that time, due to existence of a narrow road as access, the promoter was entitled to FSI only of 0.75. This plan was amended in 1986, 1987, 1989, 1992 and 1994 without any objection from the flat takers. At this stage, it may be mentioned that on 6-5-1986, the layout plan was revised and approved with 5 wings having additional floors as well as FSI of 1.00 due to construction of 44 ft. wife DP road on the original plot admeasuring 8559.57 sqm. of land.

(b) From time to time, agreements stood entered into between the promoter and the flat takers for sale of flats. These agreements are dated 7-12-1985, 11-4-1987, 18-1-1989, 30-4-1989, 27-7-1991, etc.

(c) On 12-11-1986, the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 (For short, hereinafter referred to as "MOFA") was amended retrospectively. Under that amendment, Section 7-A was inserted, thereby excluding "additional structures" from the scope of Section 7(1)(ii) and thereby lifting the requirement of consent of flat takers. However, the said amendment was restricted to the plots falling under a scheme or a project under the layout plan. The object behind enacting Section 7-A was to overcome the judgment of this Court, in the case of Kalpita Enclave Co-operative Housing Society Ltd. Vs. Kiran Builders Private Ltd. (1986 Mh.L.J. 110). On 12-4-1989, on receiving occupation certificate, possession of flats was handed over to the flat takers. Some flats remained to be sold. They stood in the name of the promoter.

(d) On 25-3-1991, the Development Control Regulations were framed which resulted in an increase of FSI from 1 to 1.8 on account of the introduction of the concept of TDR. For the first time, under this concept, lands stood separated from the development potential of the plot. Consequently, the layout plan stood amended and the promoter obtained sanction on 25-5-1992 for construction of the building in question with 6 wings by consumption of the balance FSI of 1.00. The promoter accordingly issued an advertisement for commencement of construction in accordance with the amended plan. However, it is the case of the promoter that on account of financial paucity the construction got stuck.

(e) The plaintiff no.1 is the Co-operative Society registered on 20-1-1993. The layout plan was once again amended on 26-11-1994. The building in question with 6 wings was shown in the amended plan. The plan was duly sanctioned. It is important to note that this plan of 1994 was sanctioned in favour of the promoter on account of purchase of additional TDR by the promoter.

(f) In 1997 on account of Slum TDR, the permissible FSI stood increased to 2 from 1.8.

(g) On 12-8-1997, the Cooperative Society/plaintiff and five flat takers (members) instituted Suit No.4385/97 against the promoter for conveyance, injunction restraining the promoter from putting up further constructions and questioning the validity of the sanction given by the competent authority to the amended plan dated 29-3-2001 under which the competent authority sanctioned 5 + 2 wings applying the newly available FSI.

(h) By judgment and order dated 31-3-2004, the Bombay City Civil Court at Mumbai (trial court) partly decreed the suit, permitting the promoter to complete construction as per the amended plan dated 29-3-2001. The trial court gave a period of three years to the promoter for executing conveyance in favour of the Co-operative Society under the provisions of MOFA. Being aggrieved by the grant of three years time to the appellant, the Co-operative Society preferred First Appeal No.786/2004 before this Court. A cross appeal was preferred by the promoter, being First Appeal No.989/2004 in which the promoter contended that under the agreement between the promoter and the flat takers no time limit for execution of the conveyance could be set as the promoter was entitled to exploit the full potential of the plot in question and till such time as the development potentiality of the plot in question stood exhausted, the promoter was not statutorily obliged to execute a conveyance in favour of the Co-operative Society. In this connection, reliance was placed on the provisions of Section 7-A of MOFA.

3. By the judgment and order dated 16th March 2006, the learned Single Judge of this court, allowed First Appeal No.786/2004 filed by the Co-operative Society, and dismissed First Appeal No. 989/2004 filed by the promoter. By the said judgment, the learned Single Judge directed the promoter to convey right, title and interest and execute all relevant documents in respect of Madhu Vihar Scheme in CTS No.1068/1 admeasuring 6071 sqm. situated at village Kandivali (West), Mumbai (For short, hereinafter referred to as "the suit plot"), in favour of the Cooperative Society. By the said judgment, the learned Single Judge also restrained the promoter, permanently, from making any construction over the suit plot. The learned Single Judge has held that the promoter had floated the Scheme/Project under the name and style "Madhu Vihar Scheme" on the suit plot, in accordance with the layout plan and, that the said Scheme stood completed with the construction of the flats/shops and the garden.

4. The learned Single Judge has further held that the Society was registered on 20-1-1993 and under Rule 8 of the Maharashtra Ownership Flats (Regulations of the Promotion of Construction, etc.) Rules, 1964 (For short, hereinafter referred to as "the Rules"), the promoter was statutorily obliged to convey the title to the Society which they failed to do so even after the Scheme was completed and possession of the flats was handed over to the flat takers. By the said judgment, the learned Single Judge has held that there was an implied trust created; that the promoter was the trustee and that the flat takers were the beneficiaries. By the said judgment, it was further held that under Section 7 of the MOFA, the appellant was prohibited from putting up additional constructions after the plan stood disclosed to the flat takers; that the promoter was not entitled to make any alteration in the structure without the prior consent of the flat takers; that the promoter could not make any additions in the structure of the building without the prior consent of the Society.

5. The learned Single Judge has further held that the construction of Madhu Vihar started in 1985; that section 7-A was inserted in 1986 and that Madhu Vihar Scheme got completed in 1989. The learned Single Judge has further held that since the plans were changed at least four times between 1985 and 1989, in which no additional wing like the one proposed in the plan approved on 29th March, 2001 was included, and therefore, the promoter was not entitled to derive any benefit from Section 7-A of the MOFA and, as such, was not entitled to construct additional building in the suit plot.

6. Being aggrieved by the judgment and order passed by the learned Single Judge, the promoter went in appeal before the Supreme Court. The Supreme Court, vide judgment and order dated 10th January 2007, in Civil Appeal No.3233/2006, was pleased to set aside the judgment and order passed by the learned Single Judge of this court and remit the matter to this court for re-consideration.

7. As per the order of remand passed by the Apex Court, the parties were heard afresh in both the appeals.

8. For the sake convenience, the parties are referred to as "the Promoter" and "the Society", respectively.

9. Mr. Sancheti, learned Counsel appearing on behalf of the promoter, submits that the legislature has deleted the expression "or make any additional construction" from Clause (ii) of Sub-Section 1 of Section 7 of MOFA, by amendment vide Maharashtra Act 36 of 1986. It is further submitted that for removal of doubt, Section 7-A has been inserted by the said amendment which specifically provides that Clause (ii) of Sub-Section 1 of Section 7, having been retrospectively substituted by Clause "a" of Section 6 of the Maharashtra Ownership Flats (Regulations of the promotion of construction, sale management and transfer) (Second Amendment) Act, 1986, it shall be deemed to be effective as if the said clause "ii" as so substituted had been in force at all material times; and the expression "or construct any additional structures" in Clause (ii) of Sub-Section (1) of Section 7, shall be deemed never to apply or to have applied in respect of the construction of any other additional buildings or structures constructed or to be constructed under a scheme or project of development in the layout after obtaining the approval of a local authority in accordance with the building rules or building bye-laws or Development Control Rules made under any law for the time being in force.

10. The learned Counsel appearing for the promoter, therefore, submits that the legislative intent is very much clear. He submits that from the statement of objects and reasons, for bringing out the amendment in 1986, it is clear that the said amendment was necessary in view of the judgment of this court, in the case of Kalpita Enclave Co-operative Housing Society Vs. Kiran Builders Pvt. Ltd. (1986 Mh.L.J. 110). He submits that the purpose of the amendment was to permit the promoters to fully exploit potential of the plots and increase the availability of houses. He submits that the legislative intent is clear, that if the total layout permits construction of more buildings in accordance with the building rules or the building bye-laws or the Development Control Rules, there should be no impediment in construction of additional building and for construction of the additional building, consent of the flat takers or the persons residing in other building in the layout, would not at all be necessary. In the alternative, he submits that assuming that the consent is necessary, perusal of the recitals 7, 8, 12, 13, and Clauses 1, 8, 10, 11, 12, 15, 17, 18, 38 and 51 of the agreement entered between the promoter and the flat takers would make it clear that the flat takers had given consent for additional structure and no separate consent would be necessary.

11. In support of the aforesaid submissions, the learned Counsel appearing for the promoter relies on the judgment of Division Bench of this Court, in Appeal No. 599 of 2002 (Grand Paradi Co-operative Housing Society Ltd. & 31 others Vs. Mont Blanc Properties & Industries Pvt. Ltd. & another), and in the case of Manratna Developers Vs. Megh Ratan Co-operative Housing Society Limited & others (2009(2) Bom.C.R. 836) : [2008(6) ALL MR 550]. The learned Counsel also relies on the judgment of Division Bench of this court, in the case of White Towers Cooperative Housing Society Ltd. Vs. S.K. Builders & others (2008(6) Bom.C.R. 371) : [2008(4) ALL MR 838]; the judgments of learned Single Judge of this court, in the case of Bajranglal Eriwal & others Vs. Sagarmal Chunilal & others (2008(6) Bom.C.R. 887); in the case of Ralph D'souza & others Vs. Danny D'souza & others (2006(3) Bom.C.R. 326) : [2006(4) ALL MR 519]; in the case of The Mohatta Nagar Co-operative Housing Society Ltd. Vs. M/s. Vishram Khimji & Sons and others (1994(1) Bom.C.R. 444); and in the case of Kalpita Enclave Co-operative Housing Society Ltd. and others Vs. Messrs. Kiran Builders Pvt. Ltd. (1987(1) Bom.C.R. 355).

12. The learned Counsel appearing for the promoter further submits that from the perusal of the evidence, it would be clear that the building which was subject matter of dispute is an additional building and not a wing of the building where the flat takers, who are members of the Society, were residing. He submits that there is not even a challenge, that the building was contrary to any bye-laws, regulations, etc. and, as such, they had no right to object in the construction of the additional building. The learned Counsel further submits that the permission under the provisions of Urban Land Ceiling (For short, hereinafter referred to as "ULC") Act, 1976, was subject to the provisions of the MOFA and, therefore, reference to the permission granted by ULC authorities, was also not necessary for considering as to whether the additional building could be constructed without the consent of the Society, or not.

13. The learned Counsel appearing for the promoter further submits that the provisions of Section 11 of the MOFA and Rule 9 of the Rules, which would require the conveyance to be executed within a period of four months from the date on which the Co-operative Society is registered, would be applicable only when the period for executing the conveyance has not been provided in the agreement between the parties. He submits that as per the agreement between the parties, following four pre-conditions, which are pre-requisite for seeking a conveyance, have not been fulfilled:

(1) Payment is not made,

(2) The last flat sold in 1992,

(3) The conditions, which the flat takers are required to comply, have not been complied,

(4) The balance construction, which the promoter is entitled to construct, is not yet complete.

He, therefore, submits that unless the aforesaid conditions are fulfilled, the Society does not get any right to seek conveyance in favour of the Society.

14. Mr. Ghelani, learned Counsel appearing on behalf of the Society, on the contrary, submits that the scope of the present appeal is limited to examine as to whether the original scheme propounded by the promoter, amended up to 1987, discloses to the purchasers, if the scheme consisted of one building with wings or it contemplates construction of additional building. He submits that a conjoint reading of the provisions of the MOFA, with the Rules thereunder, would clearly show that the promoter is required to disclose entire scheme to the flat taker. He submits that the representations contained in brochure published by the promoter are binding on him. He further submits that the amenities which were assured in the brochure and which were, in fact, provided are being taken away by the additional construction which is not permissible in law. He submits that the clause in statutory agreement which provides that residual FAR (FSI) in the plot or the layout not consumed will be available to the promoter only till registration of the Society, whereas after registration of the Society, the FAR (FSI) shall be available to the Society, was very much existence at the relevant time; since the said portion is deleted only by amendment in March, 1997.

15. The learned Counsel appearing on behalf of the Society further submits that in the entire agreement, the reference is only to a building and not buildings. He, therefore, submits that a representation was given to the flat takers, that one building consisting various wings would be constructed and not an additional building will be constructed. He further submits that in Clause 7 of the agreement, a representation is given, that the construction would be made in accordance with the scheme sanctioned by the Urban Land Ceiling authorities. He further submits that the reliance on the alleged consent in various clauses of the agreement is of no use to the promoter. He submits that by various judicial pronouncements, it is a settled law that the consent as contemplated under Section 7 of the MOFA has to be informed consent and not a blanket consent.

16. The learned Counsel appearing for the Society further submits that the plan shown in brochure is totally different than the plan of 2001. Various amenities, like children's play area, sitting area for senior citizens, garden, fountain, parking, which was already provided, are being taken away under the plan of 2002.

17. The learned Counsel appearing for the Society further submits that the consent would not have been necessary, had additional structure been disclosed in the layout at the time of offering flats to the flat takers.

18. The learned Counsel appearing for the Society submits that the judgment of Division Bench of this court, in the case of Grand Paradi Co-operative Housing Society Ltd. (cited supra), would not be applicable to the facts of the present case, inasmuch as, the issue regarding blanket consent was neither raised nor considered by this court.

19. The learned Counsel appearing for the Society relies on the judgment of the learned Single Judge of this court, in the case of Smt. Neena Sudarshan Wadia Vs. M/s. Venus Enterprises (1984(2) Bom.C.R. 505), and in the case of Bhuvaraha Maithreyan, Through the Power of Attorney Holder Dr. Tara Maithreyan Vs. Municipal Corporation for the City of Pune & others (2003 Vol. 105(3) Bom. L.R. 803). He further relies on the recent judgment of the Apex Court, dated 31st August 2010, in Civil Appeal No.2544 of 2010 and companion appeals, in the case of Nahalchand Laloochand Pvt. Ltd. Vs. Panchali Co-operative Housing Society Ltd.

20. Mr. Sancheti, learned Counsel appearing for the promoter, in rejoinder, submits that a conjoint reading of provisions of Sections 7 and 7-A of the MOFA, leaves no scope for doubt, that the consent of only persons in the building is necessary and not of the persons in the other buildings. He submits that what is material is the approval of the local authority and not the persons residing in the other buildings. He further submits that the statutory agreement itself provides that the variations, as considered necessary by the promoter, are permissible and, therefore, the attack of the Society on the clauses of the agreement is not sustainable.

21. Though the learned Counsel appearing for the parties have advanced their arguments on various aspects of the matter, I find that this court would be required to decide the appeals within the parameters as laid down by the Apex Court while remitting the matter to this court for decision afresh. The Apex Court has observed thus:

"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 S.7(1)(ii) or whether it falls within the ambit of S. 7-A of MOFA. As stated above, under S.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 was 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 S.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-400 067 (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 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 the case of Ravindra Mutneja and others Vs. Bhavan Corporation and others (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 S.21(1) of 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.

21. For the aforesaid reasons and in view of the law enunciated by us vide this judgment, the impugned judgment is set aside and the matter is remitted to the High Court for reconsideration." (Emphasis supplied)

22. In that view of the matter, the following points would arise for consideration of this court:

(1) As to whether the project undertaken in the year 1985, by the promoter, was in respect of construction of 7 independent buildings or whether it is one building with 7 wings ?

(2) Whether the promoter is liable to convey his right, title and interest in the land and building, to the Society, and execute all relevant documents necessary for the execution of the conveyance ?, and

(3) Whether the promoter is entitled to make additional construction on the suit land without consent of the persons who have taken flats in the building constructed by the promoter on the suit land ?

23. For considering the controversy, in question, it would be necessary to refer certain provisions of the MOFA. Clause "m" of Sub-Section 2 of Section 3 of the MOFA reads thus:

"General liabilities of promoter -

(1) .................................

(2) A promoter, who constructs or intends to construct such block or building of flats, shall -

(a) to (l) ........................................................

(m) when the flats are advertised for sale, disclose inter alia in the advertisement the following particulars, namely:-

(i) the extent of the carpet area of the flat including the area of the balconies which should be shown separately;

(ii) the price of the flat including the proportionate price of the common areas and facilities which should be shown separately, to be paid by the purchaser of flat; and the intervals at which the instalments thereof may be paid;

(iii) the nature, extent and description of the common areas and facilities; and

(iv) the nature, extent and description of limited common areas and facilities, if any."

24. Perusal of Section 4 of the MOFA would reveal that the promoter before he accepts any sum of money as advance payment or deposit, which shall not be more than 20 percent of the sale price enter into a written agreement for sale with each of such persons who are to take or have taken such flats, and the agreement shall be registered under the Registration Act, 1908 (XVI of 1908); and such agreement shall be in the prescribed form.

The unamended Section 7 of the relevant rules reads thus:

"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 words, "or construct any additional structures", were deleted by the amendment vide Maharashtra Act 36 of 1986. By the said amendment, Section 7-A was added and it provides that the amendment to Section 7 would apply retrospectively and it provided that it shall be deemed to be effective as if the said clause (ii) as so substituted had been in force at all material times; and the expression "or construct any additional structures", be deemed never to apply or to have applied in respect of the construction of any other additional buildings or structures constructed or to be constructed under a scheme or project of development in the layout.

25. The relevant portion of Section 10 of the MOFA reads thus:

"Promoter to take steps for formation of co-operative society or company - (1) As soon as a minimum number of persons required to form a co-operative society or a company have taken flats, the promoter shall within the prescribed period submit an application to the Registrar for registration of the organisation of persons who take the flats as a co-operative society or, as the case may be, as a company; and the promoter shall join, in respect of the flats which have not been taken, in such application for membership of a Co-operative society or as the case may be of a company. Nothing in this section shall affect the right of the promoter to dispose of the remaining flats in accordance with the provisions of this Act.

Provided that, if the promoter fails within the prescribed period to submit an application to the Registrar for registration of society in the manner provided in the Maharashtra Cooperative Societies Act, 1960 (Mah. XXIV of 1961), the Competent Authority may, upon receiving an application from the persons who have taken flats from the said promoter, direct the District Deputy Registrar, Deputy Registrar or, as the case may be, Assistant Registrar concerned, to register the society:

Provided further that, no such direction to register any society under the preceding proviso shall be given to the District Deputy Registrar, Deputy Registrar or, as the case may be, Assistant Registrar, by the Competent Authority without first verifying authenticity of the applicants' request and giving the concerned promoter a reasonable opportunity of being heard."

26. The relevant portion of Section 11 of the MOFA reads thus:

"Promoter to Convey title, etc., and execute documents according to agreement - (1) A promoter shall take all necessary steps to complete his title and convey, to the organisation of persons, who take flats, which is registered either as a co-operative society or as a company as aforesaid, or to an association of flat takers or apartment owners his right, title and interest in the land and building, and execute all relevant documents therefor in accordance with the agreement executed under section 4 and if no period for the execution of the conveyance is agreed upon, he shall execute the conveyance within the prescribed period and also deliver all documents of title relating to the property which may be in his possession or power."

27. Section 16 of the MOFA provides that the provisions of this Act, except where otherwise provided, shall be in addition to the provisions of the Transfer of Property Act, 1882 (IV of 1882) and shall take effect notwithstanding anything to the contrary contained in any contract.

28. The relevant portion of Rule 9 reads thus:

"Period for conveyance of title of promoter to organisation of flat purchasers - If no period for conveying the title of the promoter to the organisation of the flat purchasers is agreed upon, the promoter shall (subject to his right to dispose of the remaining flats, if any) execute the conveyance within four months from the date on which the Cooperative society or the company is registered or, as the case may be, the association of the flat takers is duly constituted."

29. The clauses 3 and 4 of Form V, which is a model form of agreement to be entered into between promoter and purchaser of flat, are declared to be statutory and mandatory by the legislature. The same are reproduced in the paragraph 17 of the judgment of the Apex Court, which is reproduced hereafter.

30. Therefore, the first question that will have to be decided in accordance with the directions of the Apex Court is, as to whether the project undertaken in 1985 by the promoter consisted of 7 independent buildings or whether it was one building with 7 wings. The Apex Court, in this respect, has directed this court to examine the application made by the promoter when he submitted the plan in 1985 and also the permission granted by the Urban Land Ceiling authorities under Section 21(1) of the Urban Land Ceiling Act, 1976. The Apex Court has further directed this court to consider the application for amendment to the layout plan made from time to time and also agreement between promoter and the flat takers.

31. As directed by the Apex Court, I have verified the plans submitted by the promoter, from time to time, from 1985. The sanction plan dated 21st October 1985, which is at Exhibit 28, would show that the plan consists of 7 wings which are interlinked to each other. The plan of 1987, which at Exhibit 33, consists of 5 wings which are again interlinked to each other. The sanction plan dated 12th April 1989, which is at Exhibit 34, would again show that it consists of 5 wings which are interlinked to each other. The plan sanctioned on 20th May 1992, which at Exhibit 36, would show that it is a plan of 6 wings which are interlinked to each other. The plan dated 26th November 1994, which at Exhibit 37, would again show that it is 6 wings interlinked to each other. Perusal of the sanction plan, dated 29th March, 2001, which is at Exhibit 38, would reveal that for the first time, it shows 5 wings interlinked to each other with the construction of one additional proposed building. The plan also shows the plinth for wing "F", which was in accordance with the plans of 1992 and 1994, was proposed to be demolished. It is, thus, clear that though initially in the year 1985, the sanction plan was shown consisting 7 wings interlinked to each other, and thereafter, vide amended plans sanctioned from time to time of 1994, the number of wings are changed from 7 to 5 and thereafter from 5 to 6, it is only the sanction plan of 2001, which shows the layout of 5 wings interlinked to each other along with one proposed additional building.

32. The Apex Court has also directed this court to consider the permission granted by the authorities under Section 21(1) of the ULC Act. It would be relevant to refer to some of the clauses of the said permission. The relevant clauses read thus:

"Clause 5 : The said persons shall reserve 10 percent of the dwelling units for sale to the allottees nominated by the Government of Maharashtra as specified below:-

11 tenements having built up area 40.00 sq.mt.

1 tenement having built up area 30.00 sq.mt.

2 tenements having built up area 62.30 sq.mt.

tenements distribute proportionately on 1st, 2nd and 3rd floor in building with 7 wings.

1. Building No. Building with 7 wings.

2. 10 % Reservation of tenements for Govt.

nominees - 14 tenements consisting built up area of 594.60 sq.mt.

Clause 8 : The said persons shall make a statement on the basis of outright purchase and no such case the selling price shall be as below:

Schedule “A”
Type of Tenement	Built up area of tenements	No. of tenements	Selling price
			Per sq.mt.	Per sq.ft.
	40.00	86	1453.00	135.00
	30.00	39	(This rate is applicable only for 10 % Govt. nominees quota only)
		137	tenements and shops.

Clause 9 : The said persons shall convey the land under the building and land to be kept open as per building regulations, Development Control Rules of Greater Bombay Municipal Corporation to the buyers of the tenements as and when they form Cooperative Housing Society.

Clause 13 : The area required to be kept open according to the D.C. Rules, building regulations of Bombay Municipal Corporation, Town Planning Rules and other statutory regulations shall always be kept open. This part of the land shall not be used for any construction whatsoever, even if there is a change in F.S.I. in future permitting additional construction."

33. It is, thus, clear that the said permission also contemplates one building with 7 wings. Not only this, but the number of tenements constructed is also shown as 137 of various sizes. In the plan which was presented to the flat takers, representation was given that the amenities, that would be made available, were for occupants of 137 tenements. However, by the layout of 2002, not only the building is sought to be constructed on the area which was to be kept as open, but almost the same number of occupants are likely to be added in the layout, thereby depriving the members of the Society, the amenities that were already provided.

34. It is, thus, clear that there is no manner of doubt from the sanction plans, as well as, the permission granted by the Urban Land Ceiling authority, that the project in question, as projected by the promoter and sanctioned by the Corporation in the year 1985, was of 7 wings which were interlinked to each other and not of 7 independent buildings. Not only this, but the perusal of the brochure would reveal that the layout which was presented by the promoter to the flat takers would show that the said project was one building with various wings interlinked to each other. Perusal of the plan which is annexed with the agreement between the promoter and the purchaser of the flat would also reveal that the plan shows one building with various wings interlinked to each other and it does not show the additional building which is shown in the plan of 2001. Perusal of the plan of 1985, with the plan of 2001, would reveal that there is a substantial change in the layout plan.

35. That leads us to the next question, as to whether it was necessary for the promoter to have obtained consent of the flat takers residing in the flats constructed by the promoter on the suit plot and as to whether he could have constructed the additional structure without their consent.

36. The Apex Court, in the judgment, while remitting the matter to this court, after considering all the relevant provisions, has observed thus:

"15. ................................ Consequently, reading S.7 and S. 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 S.7(1)(ii) with S. 7-A of the MOFA as amended. Therefore, having regard to the Statement of Objects and Reasons for substitution of S.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 S.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 (supra). By insertion of S.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 layout 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 S.3 which imposes statutory obligations on the promoter to make full and true disclosure of particulars mentioned in S.3(2) including the nature, extent and description of common areas and facilities. As stated above, sub-section (1A) to S. 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 utilised elsewhere, and if it is utilised, the promoter has to give particulars of such utilization to the flat takers. Further, under the pro forma 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 Ss.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 S.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 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 S. 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 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 of the flat takers remains unfettered even after the inclusion of S.7-A in MOFA. That obligation remains unfettered even after the amendment made in S.7(1)(ii) of MOFA. That obligation is strengthened by insertion of sub-section (1A) in S.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 Cls.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 Cls.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 takers. 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 of sanctioning the said plans or thereafter and shall, before handing over possession of the flat to the flat purchases, 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 utilised 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)

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.

19. In our view, the above condition of true and full disclosure flows from the obligation of the promoter under MOFA vide Ss.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 put up additional construction in accordance with the layout plan, building rules and Development Control Regulations etc."

37. The Apex Court, in the aforesaid judgment, in unequivocal terms, has held that the obligation of the promoter under MOFA to make true and full disclosure of the flat takers remains unfettered even after the inclusion of S.7-A in MOFA. It has further been held that the obligation remains unfettered even after the amendment made in S.7(1)(ii) of MOFA. It has further been observed, that the obligation is strengthened by insertion of sub-section (1A) in S.4 of MOFA by Maharashtra Amendment Act 36/86. The Apex Court has also held that as per Clauses 3 and 4 of the Rules, which are declared to be statutory and mandatory by the Legislature, the promoter is not only obliged statutorily to give the particulars of the land, amenities, facilities etc., but is also obliged to make full and true disclosure of the development potentiality of the plot which is subject matter of the agreement. It has further been held that the promoter is not only required to make disclosure concerning the inherent FSI, but 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 unequivocal terms, the Apex Court has 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. The Apex Court has held that the obligation remains unfettered because the concept of developability has to be harmoniously read with the concept of registration of society and conveyance of title. It has been held that 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 layout plan, building rules and Development Control Regulations etc.

38. A Division Bench of this court, in the case of White Towers Co-operative Housing Society Ltd. Vs. S. K. Builders & others [2008(4) ALL MR 838] (cited supra), while considering the judgment of the Apex Court, in the present case, has observed thus:

"The Apex Court in Jayantilal Investments' case, has clearly observed in para 20, after taking into consideration the provisions of Clauses 3 and 4 of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction etc.) Rules, 1964, that the said provisions are declared to be statutory and mandatory by the Legislature because the promoter is not only obliged statutorily to give the particulars of the land, amenities, facilities, etc., he is also obliged to make full and true disclosure of the development potentiality of the plot which is the subject matter of the agreement. The promoter is not only required to make disclosure concerning the inherent 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/T.D.R. In other words, at the time of execution of the agreement with the flat takers, the promoter is obliged statutorily to place before the flat takers the entire project/scheme, be it a one building scheme or multiple number of buildings scheme. Having observed so in relation to the statutory provisions in Clauses 3 and 4 of the said Rules, the Apex Court has further ruled that:

"the above condition of true and full disclosure flows from the obligation of the promoter under MOFA vide sections 3 and 4 and Form V which prescribes the form of agreement to the extent indicated above. This obligation remains unfettered because the concept of developability has to be harmoniously read with the concept of registration of society and conveyance of title."

Obviously, the flat takers stand assured that in case of any change to be made in the project, as was disclosed to the flat takers at the time of entering into agreement, the same has to be by following the proper procedure and without disturbance of the rights accrued to the flat purchasers in relation to the Flats and all benefits attached to the flats including in relation to the land on which the building having such flat is situated. Taking into consideration the same, if a portion of the plot wherein the structure having the flat is situated is to be excluded and is to be amalgamated in the neighbouring plot, and the project in this regard is not disclosed to the flat takers at the time of the agreement being entered with the flat takers, it would be totally contrary to the decision of the Apex Court in Jayantilal Investments' case. This aspect has not been considered by the learned Single Judge while passing the impugned order."

39. 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 Co-operative Housing Society Ltd. Vs. Rushabh Rikhav Enterprises & others (2009(1) Bom.C.R. 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.

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. metres. 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."

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.

41. The Apex Court, in the aforesaid judgment, has specifically directed this court, to consider the effect of the judgment of the learned Single Judge of this court, in the case of Ravindra Mutenja and others Vs. Bhavan Corporation and others (2003(5) Bom.C.R. 695) : [2003(3) ALL MR 521]. The learned Single Judge, in the case of Ravindra Mutneja, has observed thus:

"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 layout plan already approved. Subsequent amendment of the layout 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 modified as long as the right of the purchasers and the benefits which they are entitled to including recreational and open areas are not effected by the revised development plan. Once the building is completed and the purchasers are put in occupation in terms of polan 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 7-A of the Act." (Emphasis supplied)

The learned Single Judge, therefore, in unequivocal terms has held that once the building shown in the approved plan submitted in terms of the regulations under an existing scheme, has been completed and possession handed over, the builder/owner cannot contend, that because he has not formed the society and has not conveyed the property under the MOFA, he is entitled to take advantage of any additional F.S.I. that may become available because of subsequent events. It has further been held 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.

42. In the present case, the scheme was floated in the year 1985, showing 7 wings. The building was completed in the year 1989 and the purchasers who had entered into agreement with the promoter were put in possession. In this respect, it would also be relevant to refer to condition No.4 of the occupation certificate dated 12th April, 1989 issued by the Bombay Municipal Corporation, which reads thus:

"That, the Co-operative Society shall be formed and registered within three months from the date of issue hereof, or before B.C.C. whichever is earlier."

It is not in dispute, that in furtherance to the statutory obligation enjoined upon the promoter, in view of Section 10 of the MOFA and Rule 8 of the Rules, though the promoter had initially taken steps for forming of Co-operative Society, the matter was not taken to logical end. As such, the flat takers were required to move the appropriate authority for registration of the Society. Accordingly, the competent authority granted registration to the plaintiff no.1/Society on 20th January, 1993. It is further to be noted that though the appeal was preferred by the promoter against the said order, the appeal was rejected. It could, thus, be seen that the promoter was under the statutory obligation in view of Section 11 of the MOFA read with Rule 9 of the Rules, to execute conveyance in favour of the Society, within a period of four months. In view of the judgment of the learned Single Judge of this court, in the case of Ravindra Mutenja, [[2003(3) ALL MR 521] (cited supra), once the building shown in the approved plan was completed and possession handed over and the time frame prescribed for registration of the Society and conveying land to the Society is over, the promoter was legally precluded from putting up further construction without consent.

43. That leaves us to the next question, as to whether the consent which is deemed to be given in the clauses of agreement would be a valid consent for the purposes of Section 7 of the MOFA. The learned Counsel appearing for the promoter, relying on various clauses i.e. Clauses 1, 8, 10, 11, 12, 15, 17, 18, 38 and 51 of the agreement entered between the promoter and the flat owners, strenuously contends that there is implied consent for the additional construction.

44. Recently, after judgment of the Apex Court in the present case, considering import of the said judgment, the learned Single Judge of this court, had an occasion to consider the issue which is raised by the promoter herein, in the case of Bajranglal Eriwal & others Vs. Sagarmal Chunilal & others (2008(6) Bom.C.R. 887), wherein it is observed thus:

"The provisions of the Act, as construed now by the judgment of the Supreme Court, would leave no manner of doubt that the statutory bar upon the promoter altering the structure of a flat agreed to be purchased under Clause (i) of sub-section (1) of section 7 and of making any other alterations or additions in the structure of the building under Clause (ii), can be lifted only subject to a disclosure by the developer of the entire project or scheme. The previous consent that is contemplated by sub-section (1) of section 7 must be an informed consent. An informed consent is one which is freely given, after a flat purchaser is placed on notice by a complete and full disclosure of the project or scheme which the builder intends to implement. The consent that is contemplated by sub-section (1) of section 7 is, therefore, a specific consent which is relatable to the particular project or scheme of the developer which is intended to be implemented. 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. This embargo was introduced by the legislature specifically to obviate the kind of malpractices that were taking place. The lifting of the embargo is conditional on the grant of previous consent. The lifting of the embargo must be confined strictly within the parameters which have been envisaged by the legislature and it is in that conjtext the Supreme Court has held that the consent can be regarded as valid if there has been a full disclosure by the developer of the entire project which he has to implement. Thus construed, there can be no manner of doubt that it is not open to a developer/promoter to rely upon a general consent. To allow such generalized consents to operate would defeat the public policy which underlies the provisions of sub-section (1) of section 7 as interpreted by the Supreme Court. It is a well settled principle of statutory interpretation that the interpretation which the Court places on a statute must be purposive, so as to achieve the object and intent of the legislature. The Maharashtra Ownership Flats Act, 1963, is an Act to regulate the promotion of the construction of the sale and management, and the transfer of flats on ownership basis. The preamble specifically provides that the State Government was conscious of the fact that on account of an acute shortage of housing, there were "sundry abuses, malpractices and difficulties relating to the promotion of the construction of, and the sale and management and transfer of flats taken on ownership basis." The legislature has found that such malpractices not merely existed, but they were increasing. It is in this background that the Court must adopt a purposive interpretation of law and that interpretation which would defeat the object of the legislature must be eschewed." (Emphasis supplied)

The learned Single Judge of this court, while taking the aforesaid view, has also relied on the judgments of other Single Judges of this court, in the cases of Neena Sudarshan Wadia Vs. Venus Enterprises (1984(2) Bom.C.R. 505); Tejal Residency Cooperative Housing Society Ltd. Vs. Brihan Mumbai Municipal Corporation (2007(6) ALL MR 861); Khatri Builders Vs. Mohmed Farid Khan (1992(1) Bom.C.R. 305); and in the case of Ravindra Mutenja [2003(3) ALL MR 521] (cited supra).

45. The similar argument, which is advanced before this court, fell for consideration before the learned Single Judge of this court, in the case of Neena Sudarshan Wadia Vs. Venus Enterprises (1984(2) Bom.C.R. 505), wherein the learned Single Judge has observed thus :

"Now, we have to understand the meaning of the word 'consent' as used in Clause (ii) of sub-section (1) of section 7. After the plans and specifications of the building as approved by the local authority are disclosed or furnished to a person who agrees to take a flat from the promoter, a prohibition is claimed on the promoter not to make any alterations in the building or constructed additional structures. This prohibition can be lifted if before the promoter carries out the alterations in the building or before he starts the work of additional construction, the promoter obtains the consent of all the persons who have agreed to take the flats. For the purpose of obtaining consent, a promoter must ask the flat owners for their permission and reveal to them the nature of the proposed alterations to the building or of the additional structures to be constructed as, without such disclosure, the flat owners cannot know for what work the permission is sought and for what work they are required to consent. Again in response to a request for consent, there must be an affirmative acceptance from all the persons who have agreed to take the flats. The word "consent" in the context of the section does not mean implied consent such as by conduct or acquiescence or circumstance that might be consent. Consent in this section is to be understood to mean as positive consent to specific items of work or alteration to be carried out or particular additional structure to be built by a promoter. This seems to be the object of enacting these provisions of obtaining previous consent of the flat owners as otherwise the malpractices and irregularities intended to be eradicated by this enactment would continue to flourish and the promoters would not be deterred by the penal provision of section 13. A blanket consent or authority obtained by a promoter at the time of entering into an agreement for sale or at the time of handing over possession is not the consent contemplated by section 7(1)(i) or (ii) for such a blanket consent or authority would sew up or nullify these provisions." (Emphasis supplied)

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.

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.

48. It is further pertinent to note that in view of Clause 9 of the ULC permission, the promoters were required to convey the land under the building and land to be kept open as per building regulations, Development Control Rules of Greater Bombay Municipal Corporation to the buyers of the tenements as and when they form Cooperative Housing Society. It is further pertinent to note that under Clause 13 of the ULC permission, the part of the land which was required to be kept open according to the D.C. Rules, building regulations of Bombay Municipal Corporation, Town Planning Rules and other statutory regulations was always required to be kept open and that the same could not have been used for any construction whatsoever, even if there is a change in F.S.I. in future permitting additional construction.

49. It can, thus, be seen that the building having been completed in 1989 and the Co-operative Society registered on 20th January 1993, and the appeal filed by the promoter challenging the same having been rejected, the promoter was under statutory obligation in view of Section 11 of the MOFA, read with Rule 9 of the Rules, to execute the conveyance within 4 months from the date on which the Cooperative Society was registered. The said obligation is fortified by Clause 9 of the ULC permission and Clause 4 of the commencement certificate dated 12th April, 1989. The contention of the learned Counsel for the promoter, that the precondition to execute the conveyance had not been fulfilled and, as such, the conveyance could not have been sought by the Society, does not appeal to me.

50. In this respect, the learned Counsel appearing for the promoter has placed reliance on Clauses 38 and 51 of the agreement. It is submitted that in view of Clause 38, unless the entire payment was made, the promoter was not obliged to execute conveyance. Clauses 38 and 51 of the agreement, read thus:

"Clause 38 : It is expressly agreed between the Builders and the Purchaser that notwithstanding what is contained in these presents the Builders shall have option even prior to the registration of Co-operative Society, Limited Company, Incorporated Body or Condominium of Apartments as the case may be to take conveyance in respect of the said lands described in the Fourth Schedule hereunder written either in their favour or in favour of one or more persons who may be purchaser or purchasers of flat/shop/parking space and other premises in the said proposed Building to be known as MADHUVIHAR or in the name of such person or persons who may be the promoters of the proposed Cooperative Society, as defined under the Maharashtra Ownership Flats Act, 1962; and in the event of such conveyance or conveyances being taken by the Builders in favour of any of the aforesaid person or persons as the case may be, then and in that event such person or persons shall transfer the said lands in favour of any Co-operative Society, Limited Company, Incorporated Body or Condominium of Apartments upon compliance of all the terms and conditions of this agreement by the Purchaser and other purchasers of flats/shops/parking spaces and premises in the said Building to be known as MADHUVIHAR and upon all such flats/shops/parking spaces and other units being sold and full amount of consideration being received by the Builders and all terms conditions and convenants of such agreement or agreements being observed and performed by the Purchaser and all such purchasers of flats/shops/parking spaces and other premises.

Clause 51 : After the Building is completed and ready and fit for occupation and after the Society or Limited Company or any other Incorporated Body of the Purchasers of the flats/shops/parking spaces in the building is incorporated registered and only after all the flats/shops/parking spaces in the said building have been sold and disposed off by the Builders and after the Builders have received all dues payable to them under the terms of the agreement with various flats/shops/parking spaces holders, the Builders shall obtain a conveyance in respect of the said property from the said J.F. Mendes & another in favour of the said Society or Limited Company or the Incorporated Body within a reasonable period. Such conveyance shall be in such form and contain such terms and conditions and covenants as the Builders' Solicitors may in their absolute discretion determine."

51. In this respect, it is further submitted by the learned Counsel appearing for the promoter, that the defence witness no.1 himself has admitted that the last flat was sold somewhere in January or February, 1992. The learned Counsel appearing for the promoter relies on the evidence of defence witness no.1, wherein he states that he has not received full consideration from some of the flat purchasers. I find that the said contention is without any substance. The defence witness no.1, Chirag, himself has admitted in his evidence, that most of the flats were sold in the year 1989 and that the last flat was sold in January or February, 1992. The said witness further admits in his cross-examination in paragraph 8, that he did not submit the account to the Society till filing of a suit. Except a mere denial to a suggestion that no amount was payable except the amount admitted by the plaintiff towards electricity and water, there is nothing in his evidence to show that any steps were taken to demand the dues from purchasers of flats.

52. In view of this specific admission, that the last flat was sold in 1992 and that there being no evidence to show that any demand was made by the promoter from flat purchasers towards any dues, the contention, that since the entire flats were not sold and the payment was not received, the time to execute conveyance had not arrived, is totally without substance. In view of Section 11 of the MOFA and Rule 9 of the Rules, the promoter was duty bound to execute the conveyance within a period of four months from the formation of the Society. This position is fortified by Clause 9 in the ULC permission and Condition no.4 in the occupancy certificate issued by the Corporation. The promoter cannot be permitted to derive advantage of his own wrong in not complying with the statutory obligation.

53. In this respect, it will also be relevant to note that Clause 4 of the statutory agreement in Form V, which was in existence at the relevant time, also included the following portion:

"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."

It is to be noted that the clauses were made statutorily mandatory vide notification dated 12th January, 1990 and the aforesaid portion was deleted vide amendment to the Rules notified on 6th March, 1997. The right to get the conveyance executed accrued in favour of the Society, within a period of 4 months, from 12th January, 1993 i.e. the date of registration of the Society. It can, thus, be seen that the aforesaid portion in Clause 4 was very much in existence when the right to get conveyance executed in favour of the Society was approved and, as such, after registration of the Society, the residual F.A.R. (F.S.I.) was available to the Society and not to the promoter.

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 Co-operative Housing Society Ltd. Vs. Mont Blanc Properties & Industries Pvt. Ltd. & another (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 to be noted that in paragraph 7 of the judgment, the learned Judges of the Division Bench have held that the agreement in question, between the parties was executed in the year 1971 and in the year 1971, the format in which the agreement is to be entered was not prescribed and that the same was prescribed for the first time, in the year 1986. In that view of the matter, the learned Judges observed, in paragraph 8 of the judgment, thus:

"Thus, as in 1971, there was no form prescribed under section 4 in which the builder had to enter into an agreement, in law, the agreement entered between the builders and the flat purchasers for execution of lease of the flats of the building and the land underneath of the building in favour of the flat purchasers or the society, would be valid and binding between the parties. In our opinion, prima facie, therefore, there is no substance in the contention raised on behalf of the plaintiffs that they are entitled to have conveyance in their favour in terms of amended section 4 and form of the agreement prescribed thereunder and not in accordance with the agreement entered into between them and the defendant no.1."

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)

55. In so far as the judgment of Division Bench of this court, in the case of Manratna Developers Vs. Megh Ratan Co-operative Housing Society Limited & others (2009(2) Bom.C.R. 836) : [2008(6) ALL MR 550], the same also will not be applicable to the facts of the present case. Perusal of paragraph 12 of the judgment would reveal that the plaintiff, who was flat purchaser in lower arm of building "A", was in occupation of small portion of the building. From the perusal of the judgment, it would reveal that the scheme was for development of the property in a phased manner and not one building scheme, as in the present case. The Division Bench prima facie found that the amenities in the form of recreation ground, etc. are nowhere reduced and, as such, in the facts of the case, finding that no prima facie case was made out by the plaintiff, interfered with the order passed by the learned Single Judge. At the cost of repetition, it is to be noted that the present project was never intended to be a project for phased development.

56. Though various judgments of the learned Judge have been referred to, by the learned Counsel appearing on both sides, on the interpretation of Section 7(1) of the MOFA, in my view, reference except to the judgment of Ravindra Mutenja & others Vs. Bhavan Corporation & others (2003(5) Bom.C.R. 695) : [2003(3) ALL MR 521], would not be necessary, inasmuch as, the law has been explicitly laid down by the Apex Court in the judgment while remanding the matter to this court. The applicability of the judgment in the case of Ravindra Mutenja has already been considered herein above, as was specifically directed by the Supreme Court in the judgment of remand.

57. In the recent judgment dated 31st August 2010, in the case of Nahalchand Laloochand Pvt. Ltd. Vs. Panchali Cooperative Housing Society Ltd. (Civil Appeal No.2544 of 2010), the Supreme Court had an occasion to consider the purpose for enacting MOFA by the legislature, wherein Their Lordships have observed in paragraph 40 of the judgment, thus:

"MOFA was enacted by the Maharashtra Legislature as it was found that builders/developers/promoters were indulging in malpractices in the sale and transfer of flats and the flat purchasers were being exploited. The effect of MOFA May be summarized as follows. First, every promoter who constructs or intends to construct block or building of flats in the area to which MOFA applies has to strictly adhere to the provisions contained therein, i.e., inter alia, he has to make full and true disclosure of the nature of his title to the land on which the flats are constructed and also make disclosure in respect of the extent of the carpet area of the flat and the nature, extent and description of the common areas and facilities when the flats are advertised for sale. Secondly, the particulars which are set out in Section 4(1A)(a)(i) to (x) have to be incorporated in the agreement with the flat purchaser. Thirdly, the promoter has to apply to the Registrar for registration of the organization (co-operative society or company or condominium) as soon as minimum number of persons required to form such organization have taken flats. As regards unsold flats, the promoter has to join such organization although his right to dispose of unsold flats remains unaffected. Fourthly, and more importantly, the promoter has to take all necessary steps to complete his title and convey to the organization his right, title and interest in the land and building and execute all relevant documents accordingly."

58. In that view of the matter, I am of the considered view that the promoter was statutorily obliged to execute conveyance in favour of the Society within a period of 4 months from 20th January, 1993 i.e. the date of registration of the Society. I am also of the considered view, that the additional structure which was not forming part of the original layout in the year 1985, could not have been constructed without consent of the Society.

59. In so far as the direction by the learned trial court, prescribing the period for executing conveyance in favour of the plaintiffs, of 3 years, is concerned, it is a common ground by the promoter and the Society, that such a direction by the learned trial court was not permissible in law. As such, no discussion would be necessary in so far as the correctness of the said direction is concerned.

60. In so far as the direction for appointment of commissioner for taking accounts to verify and to take accounts as provided in Order 20, Rule 16 of the Code of Civil Procedure, is concerned, since the learned trial court has given sound and cogent reasons in paragraph 31 of the judgment, as to why appointment of commissioner is necessary, no interference is warranted in the same.

61. In the result, First Appeal No.786/2004 will have to be allowed and First Appeal No.989/2004 will have to be dismissed.

62. Hence, the following order:

(i) First Appeal No.786/2004 is allowed and First Appeal No.989/2004 is dismissed.

(ii) The defendant no.1 is directed to forthwith transfer and convey and cause to transfer and convey the suit property i.e. "Madhu Vihar" Scheme, in CTS No. 1068/1, admeasuring 6071 square metres situated at Kandivali (West), Mumbai, to the plaintiffs and to do all acts deeds matters and things necessary for effectively transferring, conveying and vesting the same into the plaintiffs.

(iii) The defendant no.1 is restrained from erecting any additional structure over the suit property i.e. "Madhu Vihar" Scheme, in CTS No. 1068/1, admeasuring 6071 square metres situated at Kandivali (West), Mumbai, without the consent of the persons with whom he has entered into agreements to take flats in the building constructed on the suit plot.

(iv) The direction of the learned trial court, in so far as rendering of the accounts by the promoter and appointment of commissioner is concerned, the same stands confirmed.

(v) Parties shall bear their own costs.

63. Civil Applications, if any, stand disposed of.

64. At this stage, the learned Counsel appearing for original defendant no.1 requests for stay of this judgment for a period of 10 weeks. Mr. Ghelani, learned Counsel appearing for the original plaintiffs, vehemently opposes the prayer.

65. However, taking into consideration the facts and circumstances, I am inclined to stay the judgment for a period of six weeks. In that view of the matter, this judgment is stayed for a period of six weeks from today.

Ordered accordingly.