1 lgc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLAE JURISDICTION APPEAL FROM ORDER NO.1195 OF 2009 WITH CIVIL APPLICTION NO.1495 OF 2009 M/s.Noopur Developers ] a registered partnership firm formed under ] the Indian Parnership Act, 1932 having its ] address at 4, Vishal Apt., L.T.Road, ].. Appellant/ Borivali(West), Mumbai-400 092 ]Original Defendant versus 1. Himanshu V Ganatra ] age 46 years ] ] 2. Parul Hinanshu Ganatra ] age 42 years ] both adults Indians inhabitants having ] residing at Flat No.701 and 702, ] “A” Wing, Megh Bldg., situate at ] Junction of Factory Lane, S.V.Road ] Borivali(West), Mumbai 400 092 ] ] 3. Sureshkumar Umedmal Jain ] age 54 years ] ] 4. Nirmala Sureshkumar Jain ] age 51 years ] both adults Indian Inhabitants having ] residing at Flat No.703 and 704, ] “A” Wing, Megh Bldg., situate at ] Junction of Factory Lane, S.V.Road ] Borivali(West), Mumbai 400 092 ] ] 5. Manoj V Vora ] age 45 years ] 2 6. Chetna Manoj Vora ] age 43 years ] both adults Indians inhabitants having ] residing at Flat No.601 and 602, ] “A” Wing, Megh Bldg., situate at ] Junction of Factory Lane, S.V.Road ] Borivali(West), Mumbai 400 092 ] ] 7. Kewalchand J Jain ] age 61 years ] 8. Nileshkumar Kewalchand Jain ] age 35 years ] ] 9. Kalawati Kewalchand Jain ] age 59 years ] all adults Indians inhabitants having ] residing at Flat No.603 and 604, ] “A” Wing, Megh Bldg., situate at ] Junction of Factory Lane, S.V.Road ] Borivali(West), Mumbai 400 092 ] ] 10. Laxmichand Malshi Chheda ] age 56 years ] ] 11. Hemlata Laxmichand Chheda ] age 53 years ] both adults Indians inhabitants having ] residing at Flat No.501 and 502, ] “A” Wing, Megh Bldg., situate at ] Junction of Factory Lane, S.V.Road ] Borivali(West), Mumbai 400 092 ] ] 12. Mahesh Roopchand Talsera ] age 41 years ] ] 13 Kiran Roopchand Talsera ] age 44 years ] both adults Indians inhabitants having ] residing at Flat No.503 and 504, ] “A” Wing, Megh Bldg., situate at ] Junction of Factory Lane, S.V.Road ] Borivali(West), Mumbai 400 092 ] 3 14 Pravin Dhanrak Khimavat ] age 47 years ] 15 Veena Pravin Khimavat ] age 44 years ] both adults Indians inhabitants having ] residing at Flat No.401 and 402 ] “A” Wing, Megh Bldg., situate at ] Junction of Factory Lane, S.V.Road ] Borivali(West), Mumbai 400 092 ] ] 16 Jinnalal L Jain ] age 61 years ] ] 17 Pinkesh J Jain ] age 26 years ] ] 18 Manjula J Jain ] age 58 years ] ] 19 Mitesh J Jain ] age 30 years ] ] both adults Indians inhabitants having ] residing at Flat No.301 and 302 ] “A” Wing, Megh Bldg., situate at ] Junction of Factory Lane, S.V.Road ] Borivali(West), Mumbai 400 092 ] ] 20 Vikas H Jain ] age 38 years ] ] 21 Rekha Vikas Jain ] age 37 years ] ] 22 Sheela H Jain ] age 40 years ] ] 23 Kailash H Jain ] age 42 years ] ] both adults Indians inhabitants having ] residing at Flat No.303 and 304 ] 4 “A” Wing, Megh Bldg., situate at ] Junction of Factory Lane, S.V.Road ] Borivali(West), Mumbai 400 092 ] ] 24 Sanjay Harakchand Jain ] age 48 years ] ] 25 Meena Sanjay Jain ] age 35 years ] ] both adults Indians inhabitants having ] residing at Flat No.203 and 204 ] “A” Wing, Megh Bldg., situate at ] Junction of Factory Lane, S.V.Road ] Borivali(West), Mumbai 400 092 ] ] 26 Lalit C Jain ] age 48 years ] ] 27 Asha Lalit Jain ] age 46 years ] ] all adults Indians inhabitants having ] residing at Flat No.201 and 202 ] “B” Wing, Megh Bldg., situate at ] Junction of Factory Lane, S.V.Road ] Borivali(West), Mumbai 400 092 ] ] 28 Navnitbhai Manilal Shah ] age 57 years ] ] 29 Dhanlaxmi Navnitbhai shah ] age 55 years ] ] both adults Indians inhabitants having ] residing at Flat No.203 and 204 ] “B” Wing, Megh Bldg., situate at ] Junction of Factory Lane, S.V.Road ] Borivali(West), Mumbai 400 092 ] ] 30 Bhartesh J Shah ] age 50 years ] 5 31 Piyush Bhartesh Shah ] age 47 years ] ] both adults Indians inhabitants having ] residing at Flat No.301 and 302 ] “B” Wing, Megh Bldg., situate at ] Junction of Factory Lane, S.V.Road ] Borivali(West), Mumbai 400 092 ] ] 32 Rajubhai C Jain ] age 48 years ] ] 33 Saraswati R Jain ] age 46 years ] ] both adults Indians inhabitants having ] residing at Flat No.303 and 304 ] “B” Wing, Megh Bldg., situate at ] Junction of Factory Lane, S.V.Road ] Borivali(West), Mumbai 400 092 ] ] 34 Ramnik Jivraj Saiya ] age 53 years ] ] 35 Pravina Ramnik Saiya ] age 50 years ] ] both adults Indians inhabitants having ] residing at Flat No.401 and 402 ] “B” Wing, Megh Bldg., situate at ] Junction of Factory Lane, S.V.Road ] Borivali(West), Mumbai 400 092 ] ] 36 Dinesh Popatlal Rathod ] age 33 years ] ] 37 Pushpaben Popatlal Rathod ] age 55 years ] ] both adults Indians inhabitants having ] residing at Flat No403 and 404 ] “B” Wing, Megh Bldg., situate at ] 6 Junction of Factory Lane, S.V.Road ] Borivali(West), Mumbai 400 092 ] ] 38 Krishnankant V Shah ] age 58 years ] ] an Indians inhabitants having ] residing at Flat No.502 ] “B” Wing, Megh Bldg., situate at ] Junction of Factory Lane, S.V.Road ] Borivali(West), Mumbai 400 092 ] ] 39 Hasumati Mulraj Parmar ] age 56 years ] ] 40 Hitesh Mulraj Parmar ] age 38 years ] ] both adults Indians inhabitants having ] residing at Flat No.503 and 504 ] “B” Wing, Megh Bldg., situate at ] Junction of Factory Lane, S.V.Road ] Borivali(West), Mumbai 400 092 ] ] 41 Surbhi Manmohandas Shah ] age 67 years ] ] both adults Indians inhabitants having ] residing at Flat No.601 and 602 ] “B” Wing, Megh Bldg., situate at ] Junction of Factory Lane, S.V.Road ] Borivali(West), Mumbai 400 092 ] ] 42 Ketan N Shah ] age 36 years ] ] both adults Indians inhabitants having ] residing at Flat No.701 and 702 ] “B” Wing, Megh Bldg., situate at ] Junction of Factory Lane, S.V.Road ] Borivali(West), Mumbai 400 092 ] ] 7 43 Mahendra K Soneji ] age 53 years ] ] both adults Indians inhabitants having ] residing at Flat No.703 and 704 ] “B” Wing, Megh Bldg., situate at ] Junction of Factory Lane, S.V.Road ] Borivali(West), Mumbai 400 092 ].. Respondents ] (Original Plaintiffs) Mr.V A Thorat, Senior Advocate, with Mr.Jain and Mr.G S Godbole i/by M/s. L J Law for the Appellants Mr. Niranjan Lapashiya with Ms.Uma Jha i/by M/s.Niranjan & Co. for Respondent Nos. 1 to 43. CORAM : C.L.PANGARKAR, J. DATE : 14th JANUARY 2010 JUDGMENT :- 1. This Appeal has been preferred by the Original Defendant against whom an order of injunction has been passed. 2. The facts giving rise to this Appeal are as under :- The Original Defendant/Appellant is a promoter. He constured a building known as “Megh” at Borivali-Mumbai on Original Plot No.78, Final Plot No.120. He constructed the building having two wings `A’ and `B’ on the said plot. The Plaintiffs purchased the flats in wings `A’ and `B’. Both the wings consist of Ground+7 upper floors. Besides wings `A’ and `B’, there is in existence structure of W.C., Pump 8 Room Suction Tank, Underground Water Tank and old building. In the year 1997, the Defendant/Appellant reprsented to the Plaintiffs that the Defendant is the owner of the property and he has requisite permission for redevelopment of the said property. When the said flats were offered for sale it was also represented that an area of 335 sq.mtrs. would be left for recreation ground and there would be space for parking of cars etc. The Defendant/Appellant therefore entered into agreement for sale for various flats and as stated earlier the Plaintiffs purchased some of the flats. The Plaintiffs were requesting the Defendant/Appellant to form a co-operative society but the Defendant/Appellant avoided to do so. According to the Plaintiffs since the Defendant/Appellant avoided to form a society, the Defendant/Appellant has lost his right to develope the property and use the TDR. The Plaintiffs further contended that the Defendant/Appellant is now seeking demolition of old building which was standing on the said plot and has decided to construct a new building. The Plaintiffs submit that the Defendant/Appellant has no right to do so, inasmuch as the rights of the Plaintiffs would be affected thereby. The Defendamt/Appellant cannot take disadvantage of his own wrong. Further it is contended by the Plaintiffs that without consent of the Plaintiffs, the Defendant/Appellant cannot 9 make any addition, alteration and/or change in the sanctioned plan and the Defendant’s proposed construction of new building is in breach of provisions of law. The Plaintiffs/Respondents, therefore, sought an injunction. 3. The Defendant/Appellant resisted the said Application of the Plaintiffs by filing an affidavit. It is the contention of the Defendant that the Defendant has every right to make construction. The Plan was approved by the Municipal Corporation. Further it is the contention of the Defendant that the old building was in occupation of the tenants and the tenants have recently vacated that building and due to vacation of that building, an additional FSI has become available to the Defendant. The Defendant has therefore a right to use the said FSI and therefore intends to make that construction. It is also contended by the Defendant that major part of construction is over and the Plaintiffs have approached the Court deliberately after the major part of the construction is over. It is contended that this is being done by the Plaintiffs in order to pressurise the Defendant. Further it is contended that the injunction relief being an equitable, the Plaintiffs should have promptly approached the Court. 10 4. The learned Judge of the trial Court after hearing the parties found that the Plaintiffs were entitled to an injunction as they have made out a prima facie case. Holding so, he has granted injunction in favour of the Plaintiffs. Being aggrieved by the said order, the Defendant/Appellant has preferred this Appeal. 5. I have heard the learned senior counsel for the Appellant/Defendant and the learned counsel for the Respondents/Plaintiffs. The Defendant is a promoter/owner of a plot admeasuring 2642 sq.mtrs. The Defendant constructed one building having two wings consisting of Ground+7 upper floors. The plans of Wings A and B were approved way back in 1993. Certificate of occupation was issued by the Municipal Corporation in 2002. The Plaintiffs purchased their respective flats in these two wings. It is the contention of the Plaintiffs that the Defendant/Appellant had shown approved plan to the Plaintiffs and in that plan one old residential building, W.C. etc were shown. It is also their contention that the old building, the WC and other small structures were in fact shown to be retained and yet the Defendant has now demolished the old building, the WC etc and has undertaken construction of new building which is an additional structure. 11 6. The Defendant contended that as a promoter /developer, the land and the FSI vests in it, it has a right to make construction. It was also contended that the construction sought to be made is in no way illegal, since the Municipal Corporation has approved the plan of the new additional building. There is no dispute about the fact that the old building was in occupation of the tenants and the tenants have now vacated the said old building. There is also no dispute about the fact that under the DCR besides actual FSI, an excess FSI becomes available to the developer and he can make use of it. 7. The Plaintiffs mainly contended that once the building to be constructed on a plot is occupied by the purchasers, the developer cannot make any construction on the said plot without consent of the flat owners. The Appellant/Defendant also mainly contended that the flat owners have no business to object in view of the insertion of Section 7A of the Maharashtra Ownership Flats Act and also the amendment whereby the words “whereas after the registration of the society the residual FAR shall be available to society” are deleted from Clause 4 of the model agreement under the rules framed under the Act. The Gazette Notification dated 6/3/1997 goes to show that the said words are deleted from the clause 4. The society is not as yet 12 registered is a fact. This model agreement has a statutory force is also not disputed. Clause 4 now says that untill society is registered, the said residual FSI shall vest in the promoter. 8. The Government was required to insert Section 7A in the act so as to over come the interpretation put by the Court in the case of Kalpita Enclave Co-operative Housing Society Ltd. v. Kiran Builders Private Ltd, reported in 1986 Mh.L.J. 110 and to explain what the legislature actually intended. Section 7 was interpreted in Kalprita’s case to mean that the promoter is prohibited from making any construction once the promoter hands over the flats to the purchasers. The amendment makes it clear that consent of the flat purchasers was never applicable to the construction of additional building by the promoter. By the amendment, the legislature not only inserted Section 7A to the Act but deleted the words “or construct additional structures” from Section 7(1)(ii). That clause reads now as follows :- “Section 7 :- After plans and specifications are disclosed no alterations or additions without consent of persons who have agreed to take the flats; and defects noticed within [three years] to be rectified (1) After the plans and specifications of the 13 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) ................. (ii) any other alterations or additions in the structure of the building without the previous consent of all the persons who have agreed to take the flats in such building” 9. This Court had an occasion to interprete Sections 7 and 7A in two following decisions. One such decision is reported in 2003(5) Bombay Case Reporter 695 in the case of [Ravindera Mutenja & others v/s. Bhavan Corporation & others.]. The Court observed as under :- “13. The real issue as has been noted earlier is what is the stage up to which the developer/owner can put up additional construction after the building in terms of the registered plan has been constructed and occupied. In my opinion, once the buildings shown in the approved plan submitted in terms of the regulations under an existing scheme filed before the authorities under MOFA Act, have been completed and possession handed over, the 14 builder/owner cannot contend, that because he has not formed the society and/or not conveyed the property by sale deed under the Act he is entitled to take advantage of any additional F.S.I. that may become available because of subsequent events. That would be so at the stage the building is under construction or the building is not completed and/or purchasers are not put in occupation provided such building forms part of the development plan and/or lay out plan already approved. Subsequent amendment of the lay out plan after the building plan is registered under MOFA, without the consent, prima facie, of the flat purchasers would not be permissible. It may be possible to accept that the development plan could be 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 plan filed and the time to form the society or convey the property in terms of the agreement or the Rules framed under MOFA is over, the permission of such purchasers would be required. In the instant case, the building completion certificate for the plaintiff's building, was issued in 15 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 F.S.I. or F.S.I. which become subsequently available on the facts of the case, would be to the society to whom the land had to be convened. The record shows that the building was approved in December, 2001. It cannot prima facie, be said that defendants 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. 14. We may now examine the judgments of this Court to find out whether the construction of the provisions would be contrary to the law as interpreted by this Court. The first such judgment is in the case of (Smt. Neena Sudershan Wadia v. M/s. Venus Enterprises)2, 1984(2) Bom.C.R. 505. The judgment is before section 7-A was introduced. The issue therein involved the 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 and whether that amounted to consent contemplated by section 7. This Court held that notwithstanding the agreement 16 of sale and non registration thereof nor obtaining blanket consent of the purchasers of the flat at the time of entering into agreement for sale and delivering possession of the flat, cannot deprive the flat owners of invoking the provisions of section 7(i), (ii) of the Act as it stood before its amendment in 1986. The promoters/builder/owners could not, under the cloak of the blanket consent obtained under the proforma agreement for sale, carry out the work of additional structures and thus set at naught the provisions of section 7(i), (ii). The Court also held expression additional means only extension either vertically or horizontally to an existing structure. We may now consider the judgment in (The Mohatta Nagar Co-operative Housing Society Ltd. v. M/s. Vishram Khimji & Sons and others)3, 1994(1) Bom.C.R. 444. On the facts of that case the land totally admeasured 2351 sq. yds. The builders between 1962 to 1966 sold certain flats. Out of admitted 21 purchasers of flats, the agreement in respect of 14, provided for construction of one building subject to construction of upper floor if permitted by Municipal Corporation. Six flat owners entered into an agreement which restricted the plot of the building to 1104 sq. yds. The original plot with approval of the authorities had been sub- 17 divided in the year 1967. The unconstructed plot admeasured 1,250 sq. yds. F.S.I. for the plot of 1,250 sq. yds. had not been exhausted. Possession of the plot was held to be with the owners/developers. The suit was filed in the year 1970. Amendment to section 7 as also insertion of section 7-A was in 1986. Section 7-A was introduced to clarify that the amendment to section 7(i), (ii) was deemed never to apply in respect of any additional building or structure constructed or to be constructed under a scheme or project of development in the lay out 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. On those set of facts and considering the Statement of Objects and Reasons the learned Judge observed the intention behind the amendment becomes apparent that it was to remove the impediment of new building and set out as under "if total lay out permits constructing of more building in accordance with the building Rules or building bye-laws or the Development Control Rules, where such proposal for additional construction was already approved or was submitted in future to the appropriate authority......." Therefore the learned Judge held that it would include not only proposals which are already approved but also proposals which could be 18 sent for approval of the local authority. On the facts of that case consistent with the project of development of the suit plot, the right of the defendants was upheld. It may be noted that the planning authority had approved the sub-division of the plot, before the amendment. Therefore a building with necessary permission could be constructed in the said sub-division plot. If this aspects are considered the correct ratio of the judgment can be really understood. The law may be explained thus. An owner of the land or developer considering the provisions of the Maharashtra Regional and Town Planning Act, 1966 and development regulations framed thereunder, if a scheme or lay out plan has been approved, whether the building is constructed or not then the owner developer inspite of MOFA can carry out development of such structure or building. It may be also possible to hold that with a development permission under development regulations if obtained, the owner/developer can develop, but as long as the permission was obtained and could be legally obtained. If under the permission granted for construction the society had to be registered within a time frame and the land had to convey to the society under the agreement within a time frame and if not, within the time set 19 out under Rule 9, after that time frame the owner/developer, is legally precluded from putting up of further construction without consent. At any rate if building is to be put up as a wing of an existing building considering section 7, it cannot be constructed without permission of the flat purchasers. There can, therefore, be no question of further development by the owner of developer. This is considered in the judgment in (Kalpita Enclave Co-op Housing Society Ltd. and others v. M/s. Kiran Builders Pvt. Ltd. and others)4, 1987(1) Bom.C.R. 355 : 1986 Mh.L.J. 110, as proposition seven. In (Vrindavan (Borivali) Co-operative Housing Society Ltd. v. Karmarkar Brothers and others)5, 1983(2) Bom.C.R. 267 : 1982 Mh.L.J. 607, a learned Judge noted the statutory duty cast on the owner/developer and observed after considering the various sections of MOFA as under ".....All these liabilities read with further obligation under sections 10, 11 and 12 go to show that the promoter is under a statutory obligations who should complete the and pass a conveyance to the organization named thereunder." The ratio of this decision appears to be two fold. One that whether or not the society is formed the FSI must vest in the society, if the time to form the society’ statutorily fixed under Rule 9’ has expired. Time 20 fixed by Rule 4 is four months. The second ratio is that if the building is to be put up as a wing, the permission of the society would be required. 10. The Division Bench of this Court in a decision reported in 2008 (6) ALLMR 550, in the case of M/s.Manratna Developers v/s. Megh Ratan Co-operative Housing Soc. Ltd. has observed thus :- “Para-6 :- Coming to the question as to whether the consent of the flat owners is required by the developer/promoter for raising the additional structure/building, the change in position of law will have to be addressed to. Section 7 of Maharashtra Ownership Flats Act, 1963 (“MOFA” for short) was interpreted by the Bombay High Court in Kalpita Enclave Co- operative