Case Note & Summary
The Bombay High Court heard two first appeals remanded by the Supreme Court in a dispute between Madhuvihar Cooperative Housing Society (the society) and Jayantilal Investments, a promoter. The society and five flat purchasers had filed a suit in 1997 seeking conveyance of the suit land and permanent injunction restraining the promoter from constructing additional wings under an amended plan approved in 2001. The suit plot originally admeasured 6071 sqm, with a sanctioned layout in 1985 for one building with seven wings. The promoter obtained occupation certificate in 1989 and handed over possession. Amendments to the Development Control Regulations later increased permissible FSI, and the promoter secured sanction for additional construction using TDR. The Maharashtra Ownership Flats Act was amended in 1986, inserting Section 7A to nullify the effect of the Kalpita Enclave judgment and permit additional structures without flat takers' consent. The trial court partly decreed the suit, allowing the promoter to complete construction as per the 2001 amended plan and directing conveyance within three years. On first appeal, a Single Judge reversed this, directing immediate conveyance and permanent injunction against any further construction. The Supreme Court, on further appeal by the promoter, set aside the Single Judge's order, holding that the impact of Section 7A was not considered, and remitted the matter for fresh adjudication. After remand, the High Court reheard both appeals. The promoter argued that the retrospective deletion of the bar on additional construction and Section 7A granted an absolute right to construct additional buildings under the same scheme. The society maintained its claim for immediate conveyance and protection against derogation from the original layout. The judgment reproduced does not contain the final decision of the High Court on remand, as the provided text ends with the submissions of the promoter's counsel.
Headnote
A) Real Estate - Additional Construction by Promoter - Section 7A, Maharashtra Ownership Flats (Regulation of the promotion of construction, Sale, Management and Transfer) Act, 1963 - The retrospective amendment removed the requirement of flat takers' consent for additional structures if part of a scheme/project in the layout; the earlier Single Judge failed to consider this and the Supreme Court remanded for reexamination, requiring the High Court to assess the promoter's right to construct additional wings (Paras 2(c), 9).
B) Real Estate - Conveyance Obligation Under MOFA - Rule 8, Maharashtra Ownership Flats (Regulations of the Promotion of Construction, etc.) Rules, 1964 - The trial court directed conveyance within three years, but the Single Judge ordered immediate conveyance; the Supreme Court indicated that the promoter's duty to convey must be balanced against the right to exploit development potential, and remanded for a fresh determination (Paras 2(h), 3).
C) Civil Procedure - Effect of Supreme Court Remand - The Supreme Court set aside the Single Judge's order for ignoring Section 7A and remitted the matter with directions to re-consider the rights of both parties afresh, binding the High Court to evaluate the promoter's statutory rights and the society's entitlement to conveyance and injunction (Paras 1, 6).
Issue of Consideration
Whether, in view of Section 7A of MOFA, the promoter is entitled to construct additional wings on the suit plot after completion of the original scheme and whether the society is entitled to immediate conveyance and injunction.
Law Points
- Section 7(1)(ii) of MOFA as amended retrospectively
- Section 7A excludes additional structures from consent requirement
- promoter has right to construct additional buildings under a scheme
- society entitled to conveyance under Rule 8
- implied trust
- Kalpita Enclave ruling overruled
- TDR increases FSI
Case Details
2010 LawText (BOM) (10) 107
First Appeal No. 786 of 2004 with First Appeal No. 989 of 2004
For Madhuvihar Coop Society: Mahendra Ghelani, Ms. Veena Advani, Pratik Shah; For Jayantilal Investments: Pradeep Sancheti, Senior Advocate, with Vatsal Shah, instructed by Kumud A Bhatia; For Municipal Corporation: Vinod Mahadik
First Appeal No. 786 of 2004: Madhuvihar Cooperative Housing Society & Others; First Appeal No. 989 of 2004: Jayantilal Investments
First Appeal No. 786 of 2004: Jayantilal Investments & Others; First Appeal No. 989 of 2004: Madhuvihar Cooperative Housing Society & Others
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Nature of Litigation
Civil suit by cooperative housing society and flat purchasers against the promoter and municipal corporation for conveyance of land and permanent injunction restraining further construction.
Remedy Sought
The society sought conveyance of title to the suit land and injunction against further construction by the promoter under an amended plan approved in 2001.
Filing Reason
The promoter, after completing the original scheme and handing over possession, proposed to construct additional wings using enhanced FSI/TDR without conveying the land to the society, which the society opposed as derogatory to their rights.
Previous Decisions
Trial court (City Civil Court, L.C. Suit No. 4385 of 1997) decreed suit in part on 2004-03-31, allowing promoter to complete construction as per amended plan dated 2001-03-29 and directing conveyance within 3 years. On first appeal, Single Judge of High Court on 2006-03-16 allowed Society's appeal and dismissed promoter's appeal, directing immediate conveyance and permanent injunction. Supreme Court in Civil Appeal No. 3233 of 2006 on 2007-01-10 set aside Single Judge's order and remitted matter for fresh decision.
Issues
Whether, in view of Section 7A of MOFA, the promoter is entitled to construct additional structures on the suit plot after the original scheme was completed and the society was formed?
Whether the society is entitled to a decree of conveyance of the land immediately despite the promoter's claim of unexhausted development potential?
What is the effect of the Supreme Court's remand order on the interpretation of Sections 7 and 7A?
Submissions/Arguments
Mr. Sancheti, counsel for the promoter, argued that the deletion of 'or make any additional construction' from Section 7(1)(ii) by the 1986 amendment and the insertion of Section 7A clarified that such construction under a scheme is never barred, entitling the promoter to construct additional wings without flat takers' consent.
Judgment Excerpts
On 12-11-1986, the Maharashtra Ownership Flats (Regulation of the promotion of construction, Sale, Management and Transfer) Act, 1963... was amended retrospectively. Under that amendment, Section 7A was inserted, thereby excluding 'additional structures' from the scope of Section 7(1)(ii)...
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.
Procedural History
Suit No. 4385/97 filed in City Civil Court; decreed partly on 2004-03-31. Society filed First Appeal No. 786 of 2004; promoter filed First Appeal No. 989 of 2004. Single Judge on 2006-03-16 allowed Society's appeal and dismissed promoter's. Supreme Court on 2007-01-10 set aside Single Judge's order and remitted the matter to High Court for fresh decision. Present judgment after rehearing both appeals.
Acts & Sections
- Maharashtra Ownership Flats (Regulation of the promotion of construction, Sale, Management and Transfer) Act, 1963: 7, 7A
- Urban Land (Ceiling and Regulation) Act, 1976: 21(1)
- Maharashtra Ownership Flats (Regulations of the Promotion of Construction, etc.) Rules, 1964: Rule 8
