Appeal No. 599 of 2002,Notice of Motion No. 94 of 2002,Suit No. 99 of 2002

20th April, 2010

Petitioner Counsel: Mr. Milid Sathe,V.R. Dhond, J.P. Sen,Bachubhai Munim & Co.
Respondent Counsel: Mr. Ravi Kadam,Mr. S.U. Kamdar,Mr. Vinit Naik, P.K. Shroff, Mr. S.B. Kotak, D.V. Deokar, Jaylaxmi Gaud, V.P. Shroff,P.K. Shroff & Co.,Mr. Tushad Cooper,Ravjit Shetty,Hariani & Co.

Cases Cited:
Jayantilal Investiments Vs. Madhuvihar Co-op. Hsg. Society, 2007(2) ALL MR 398 (S.C.)=(2007) 9 SCC 220 [Para 4,9]
Bajranglal Eriwal Vs. Sagarmal Chunilal, 2008 (6) Bom.C.R. 887 [Para 4]
Jamuna Darshan Co-op.Hsg.Soceity Ltd. Vs. M/s. J.M.C. & Meghani Builders & Ors., Notice of Motion No. 2220 of 2007 Dt.12/1/2009 [Para 5]

JUDGMENT

JUDGMENT :- By this Appeal, the appellants challenge the order passed by the learned single Judge of this court dated 3rd April, 2002. The appellants are the plaintiffs. The plaintiffs are a co-operative housing society. It has filed the civil suit, claiming a decree of declaration that the members of the plaintiff no.1 society and defendant no.2 society are the only beneficial owners of the property bearing city survey no.572 of Malabar Hill and Cumballa Hill Division, more particularly described in Schedule 'A'to the conveyance deed. They are also seeking a decree, directing the defendant no.1 to execute conveyance in favour of plaintiff no.1 -society in respect of their entire right, title and interest in the lands and buildings, more particularly described in schedule 'A'to Exhs. 'C'and 'D'in favour of plaintiff no.1 in terms of the provisions of Maharashtra Ownership Flats (Regulation of Promotion of Construction, Sale, Management and Transfer) Act, 1963 (hereinafter referred to as the 'Act').

2. In the suit the plaintiffs had taken out a notice of motion, claiming several interim reliefs. The principal interim relief claimed is that defendant no.1 shall not raise any additional construction on the vacant land. That notice of motion bearing no. 94 of 2002 which was heard by the learned single Judge of this court was dismissed by order dated 3rd April, 2002. It is this order of the learned single Judge which is challenged in the present Appeal.

3. On the land in question, which is admittedly owned by the defendant no.1, there are 3 buildings and 14 row houses which are occupied by the members of the plaintiff no.1 society. There is one more building constructed by the defendant no.1 which is occupied by the members of the defendant no.2 society. Admittedly, the defendant no.1 who had entered into agreement in the year 1971 with the members of the plaintiff no.1 society agreed to grant lease of the flats in the building or row houses constructed by the defendant no.1. Defendant no.1 had agreed that the lease deed for a term of 999 years in respect of the flats and the land on which the building into which the flats owners are having their flats, will be executed. The case of the plaintiff in the plaint, however, is that despite this term in the lease deed, the society is entitled to the transfer of ownership of the entire plot in its favour because of the provisions of the Act. It is further the case of the plaintiff that defendant no.1 cannot raise any further construction on the vacant land without obtaining previous consent of the members of the plaintiff no.1- society. These contentions have been negatived by the learned single Judge.

4. The learned counsel appearing for the appellants submits, relying on the judgment of the Supreme Court in the case of Jayantilal Investiments vs. Madhuvihar Co-op. Hsg. Society, reported in (2007) 9 Supreme Court Cases 220 : [2007(2) ALL MR 398 (S.C.) : 2007 ALL SCR 857], that in view of the provisions of section 7 and 7-A of the Act, irrespective of the agreement entered into between the parties, the plaintiff is entitled to have conveyance of the entire property in its favour. The learned counsel also relied on the judgment of the learned single Judge in the case of Bajranglal Eriwal vs. Sagarmal Chunilal, reported in 2008 (6) Bom. C.R. 887 and submitted that the learned single Judge has wrongly interpreted the judgment of the learned single Judge of this court in the suit filed by defendant no.2. The learned counsel submitted that in view of that order passed by the learned single Judge, really speaking order of temporary injunction, should have been passed in favour of the plaintiff. The learned counsel submits that the defendant no.1 was obliged to execute conveyance of the property in favour of the plaintiff in terms of the provisions of the Act in the year 1989 itself. He submits that in 1989 entire FSI which was available as per the law then in force was exhausted by the defendant no.1 and now taking advantage of its own wrong, the defendant no.1 claims to construct additional structures on the land. The learned counsel submits that if defendant no.1 is permitted to raise additional construction on the land, it will cause permanent injury to the interest of the plaintiff. The learned counsel submits that if the additional structure is to be raised, which is not shown in the layout plan, a specific consent of the flat owners is necessary and general consent is not enough.

5. On the other hand, the learned counsel appearing for the defendant no.1 relies on the judgment of the Supreme Court in the case of Jayantilal Investments, referred above, to contend that considering the law that was in force when the agreement was entered into, the rights between the parties will be governed by the agreement that was entered into between the parties and therefore, the plaintiff would be entitled to conveyance of the property as contemplated by the agreement and nothing more. The learned counsel also relies on the judgment of the learned single Judge of this court in notice of motion no. 2220 of 2007 in suit no. 3938/2001 between Jamuna Darshan Co-op.Hsg.Soceity Ltd., vs. M/s. J.M.C. & Meghani Builders & Ors., dated 12th January, 2009 to contend that the agreement which was entered into before the format of the agreement was prescribed under the Act, the applicants will be governed by the terms of the agreement and also on a judgment of a Division Bench of this Court in Appeal No. 253/ 2009, decided on 22nd June, 2009, whereby the judgment of the learned single Judge in the case of Jamuna Darshan Coop. Housing Society Ltd, has been confirmed.

6. Before us mainly two contentions were urged. One, that though in the agreement between the parties it is contemplated that only lease of the building and the land on which building stands would be executed for a period of 999 years in favour of the plat purchasers and their society, the society is entitled to have a sale deed of the entire plot executed in its favour. Second, even if the construction of any additional building on the land can be made by the respondent no.1, he will have to get specific consent of the flat holders.

7. Sofar as the first contention is concerned, it is the provisions of section of the Act which are relevant. Provision of section 4 as it stood in 1971 when the agreement between the parties was entered into it require the builder to enter into an agreement with the flat purchasers in a form. But in 1971, the format in which the agreement is to be entered into was not prescribed. It was prescribed for the first time in the year 1986. This position has been considered by the learned single in his judgment in the case of Jamuna Darshan Co-operative Housing Society Ltd., to which we have made a reference above. The observations made by him in paragraph 37 are relevant. They read as under :

37. It is not possible to agree with Shri Anturkar that the Supreme Court was dealing with a case of the nature before me. The Supreme Court was in fact dealing with a situation where the Agreements were admittedly entered into after the amendments to the Ownership Flats Act. None disputed before the Supreme Court that the amendment would apply. Such is not the case before me. Before me, the question is as to whether the agreement in the prescribed form which is to be entered into by the promoter in terms of the amended rule would be applicable to the agreements executed prior to the amendment. The format itself came into force in 1986 whereas the agreements in the case before me are admittedly executed prior to that date. To that extent, Shri Samdani appears to be prima facie right in his contention that the requirement that every agreement between the promoter and the flat purchasers should comply with the prescribed form (V) is something which is not applicable to the instant case and more particularly the suit agreement. Once these agreements are not to comply with the amended provisions, then, it cannot be contended by the plaintiff that they govern the field.

8. 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. Clause 14 of the Agreement between the parties contemplates execution of lease deed of the property. Clause 14 reads as under :

14. The Vendors shall execute in favour of the Society or the Limited Company to be formed by the Purchasers of the Flats in the said buildings as also of the Purchasers of houses in the row of houses a lease for a term of 999 years in respect of the portion of the said property on which the building is to be constructed by the Vendors. The lease will also include the Conveyance of the buildings to be constructed as aforesaid. If for any reason it is decided to have separate cooperative Societies or Limited Companies of the purchasers of flats in the buildings and also of the Purchasers of row of houes separate leases may be executed in favour of the different bodies. Such lease and/or leases shall be in such form as shall be prepared by Messrs. Bhaishankier Kanga and Girdharlal. The lease rent shall be calculated at the rate of Rs.1/- per month per flat and the row of houses. (emphasis supplied)

In our opinion, therefore, the plaintiffs are not right in contending, prima facie, that the agreement between them is to be disregarded and they are to be given conveyance of the entire plot, though the agreement between them does not contemplate that.

9. Sofar as the second contention advanced before us is concerned, it is based on the provisions of section 7 and section 7-A of the Act. As observed above, the agreement was entered into in the year 1971. At that time, section 7 read as under :

7. After plans and specifications are disclosed no alteration or additions without consent of persons who have agreed to take the flats; 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 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

That provision was amended in the year 1986 and section 7-A was also added in the year 1986 with retrospective effect. These provisions have been considered by the Supreme Court in its judgment in the case of Jayanatilal Investiments vs. Madhuvihar Co-op. Hsg. Society [2007(2) ALL MR 398 (S.C.) : 2007 ALL SCR 857], referred above, and the Supreme Court has observed thus in paragraph 15 :

....... 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 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, subject to compliance with the building rules or building bye-laws or Development Control Regulations. .......

10. 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 sells 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. Sofar as the present case is concerned, we find that the members of the appellants/plaintiff no.1 society have clearly given their clear consent to defendant No.1 to raise additional structures. Clause 10 of the agreement reads as under :

10. The Vendors shall have a right until the execution of the lease in favour of the proposed Society or the Limited Company to make additions, or put up additional structures or stories as may be permitted by the Government of Maharashtra and other competent authorities and such additional structures and stories shall be the property of the Vendors who will be entitled to dispose off the same in such manner as they deem fit PROVIDED THAT the above does not in any way affect or prejudice the right hereinafter granted in favour of the Purchasers in respect of the flat agreed to be purchased by the Purchaser the Vendors shall be at liberty to sell assign or otherwise deal with or dispose of their right title or interest in the said property or in the said building to be constructed by the Vendors.

11. This consent was given by the members of the plaintiff society in the year 1971 with full knowledge of the law then in force. Now they cannot be permitted to resile from such express consent given by them. In our opinion, once the flat purchasers give their consent at the time of entering into the agreement to purchase the flat unless they make out a case that their consent was obtained by adopting any illegal means, they will be bound by the consent given by them. In our opinion, therefore, fresh consent at the time of raising every additional construction will not be necessary. It is pertinent to be noted that the defendant no.1 was always ready to execute the deed in favour of the society in accordance with the agreement but it could not be executed because society wanted a conveyance as per amended provisions of the Act. We thus find that the plaintiffs have not made out a prima facie case that they are entitled to have sale deed of entire land and the building executed in their favour and the defendant no.2 society.

12. It goes without saying that if the defendant no.1 wants to raise any additional structure on the land, he will have to get the building plan sanctioned. Obviously, full enquiry as to whether any FSI is available to him for construction of the additional buildings will be made by the planning authority before sanctioning the building plan and therefore, in our opinion, it is not necessary for us to hold enquiry into the question whether the entire FSI has been exhausted or there is any FSI still in balance which can be used by the defendant no.1 to raise additional structures.

13. The only question that we have to consider presently is whether an order of temporary injunction can be made, restraining the defendant no.1 from raising any additional structure even if he is otherwise entitled to do so in law. We find, at the instance of the plaintiffs, the defendant no.1, cannot be restrained from raising additional structure on the land, if he is otherwise entitled to do so in accordance with law. The Appeal, therefore, fails and is dismissed.

14. At this stage, a request is made that the interim order passed earlier which is in operation till date should be continued for a period of twelve weeks. The request is opposed on behalf of the defendant no.1. In our opinion, as interim order is still operating, the request cannot be rejected. The interim order which is presently operating, therefore, will continue to operate for a period of 12 weeks from today, however, that will not prevent the defendant no.1 from submitting his building plans for approval to the Corporation. It is made clear that even if the buildings plans are sanctioned by the Corporation, the defendant no.1 shall not be entitled to commence any construction pursuant to those building plans for a period of 12 weeks from today.

Appeal dismissed.