:1: IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE JURISDICTION FIRST APPEAL NO. 2182 OF 2007 Nahalchand Laloochand Pvt. Ltd. ..Appellant Vs. Panchali Co-Operative Housing Society Limited. ..Respondent Mr. F. E. Devitre, Senior Advocate with Ms. Rajani Iyer, Senior Advocate with Mr. Venkatesh Dhond, Mr. Vineet B. Naik i/by M/s. Prakash and Company for appellant. Mr. G.N. Salunke with Mr. S.R. Sharma for respondent. CORAM: CORAM: CORAM: B.H. MARLAPALLE,J. B.H. MARLAPALLE,J. B.H. MARLAPALLE,J. Reserved Reserved Reserved on : February 13, 2008. on : February 13, 2008. on : February 13, 2008. Pronounced Pronounced Pronounced on : on : on : April 25, 2008. April 25, 2008. April 25, 2008. JUDGMENT: JUDGMENT: JUDGMENT: 1. This appeal is directed against the Judgment and Decree passed by the learned Judge of the City Civil Court, Greater Mumbai on 4/4/2007 in S.C. Suit No. 1767 of 2004. The said suit was dismissed with costs. 2. The suit was filed by the appellant-company :2: for the following substantial relief: "That the defendants, office bearers, committee members, members, servants, agents or any other person claiming through them be restrained by an order of permanent injunction of this Hon’ble Court from encroaching upon/ trespassing on the suit premises and/or in any manner disturbing/ obstructing /interfering with the possession of the plaintiffs in respect of the suit premises i.e. 25 number of parking spaces in the stilt portion of the building by name Panchali, as more particularly shown in the plan annexed at Exhibit "A" hereto, situated at Indraprasta Enclave, N.L. Complex, Anand Nagar, Dahisar (East), Mumbai 400 068." 3. The plaintiff is a Private Limited Company, representing itself as a developer/builder/promoter as defined under the Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) Act, 1963 (for short the MOFA). It had purchased from the original owners, :3: namely, Anjani Krishna Boritkar and others land bearing CTS Nos.1458 (Pt), 1459 (Pt), 1472 (Pt), 1474 (Pt), 1475 (Pt), 1476 (Pt), 1478 (Pt) and 1482 (Pt) situated in village Dahisar, Taluka Borivali, Mumbai Suburban District and which was declared as excess vacant land by the Additional Collector and Competent Authority (Urban Land Ceiling), Greater Mumbai. The appellant then decided to construct seven multi storeyed buildings and shopping complex on the said land in accordance with the building plans and specification duly approved by the Mumbai Municipal Corporation (the Corporation for short). One of the said seven multi storeyed buildings is by name "Panchali" which has stilt plus seven upper floors having two wings, "A" and "B" with 56 flats (the Building for short). The building has enclosed parking area below the stilt. There are in all 28 stilt parking spaces as per the plans approved by the Corporation. Between February 2001 to August 2003, on the basis of the agreements signed between the promoter and the individual flat purchasers, the plaintiff-promoter sold each of the 56 flats and the construction was completed some times in mid 2002. On 19/8/2002 the Corporation issued the occupation :4: certificate. The flat purchasers formed a Co-operative Society, which was registered on or about 8/10/2003 and it was named as "Panchali Co-operative Housing Society". Before the society was registered, three parking spaces were sold and remaining 25 were purportedly in the possession of the plaintiff. It is alleged that on 22/2/2004 the committee members of the society tried to take forcible possession of the remaining 25 parking spaces by breaking open the locks of the appellant. It appears that the plaintiff has enclosed all the parking lots by a collapsable gate/grill door and had locked each one of them. On 21/3/2004, even the residents of other buildings also resorted to the similar action. The plaintiff filed police complaints on 11/3/2004 and 22/3/2004 and finally approached the trial court in Civil Suit No. 1767 of 2004 and others. Thus the suit property is the enclosed car parking spaces in the stilt portion in the building named "Panchali". 4. In the suit a permanent injunction has been prayed in respect of the suit parking lots mainly on the following grounds:- :5: (a) As per the agreement for sale signed with every flat purchaser, the plaintiff intended to sell either residential flat/stilt parking space/open parking space in the said building on ownership basis. (b) Each of the flat purchaser had executed a declaration/undertaking at the time of taking over possession of the respective flats in favour of the plaintiff, inter alia to the effect, that each purchaser unconditionally and irrevocably agreed that stilt parking spaces and open parking spaces shown in the plan belonged exclusively to the plaintiff, that they would have no claim of whatsoever nature to the same and that they will not object to the sale of the same by the plaintiff to any person, that the flat purchaser understands that he/she/they shall not be allowed to park his/her/their vehicle in the suit premises until and unless he/she/they has/have purchased from the plaintiff a stilt parking space or open parking space as shown in the plan and that :6: each flat purchaser undertaken not to park his/her/their vehicle in the said property until and unless the same is purchased from the plaintiff. (c) The stilt parking space is included in the definition of flat as given under Section 2(a) of the MOFA and it is not a part of the common areas and it is like a private garage. 5. The defendant - society filed Written Statement and opposed the suit on the grounds that, (a) the plaintiff has no absolute right to sell or dispose off the parking spaces in the stilt portion, more particularly under the provisions of the MOFA and the plaintiff is entitled to only sale flats/shops/garages; (b) the D.C. Rules 1991 restrict the rights of the promoters to sell parking spaces; (c) the undertakings allegedly given by the flat purchasers are not binding on the society :7: and in any case such an undertaking is contrary to the provisions of the MOFA and, therefore, it requires to be declared as illegal and bad in law; (d) the defendant - society never attempted to take forcible possession of the stilt parking spaces and, therefore, the plaintiff was not entitled for the reliefs prayed in the suit. 6. As per the final order passed on 24/7/2006 the following issues were framed by the trial court and answered accordingly:- ISSUES FINDINGS (1) Do the plaintiffs prove that In the negative they have absolute right to sell/dispose of the parking space under the stilt? (2) Do the provisions of the In the MOFA restrict the rights of affirmative plaintiffs/promoters to sell /dispose of the parking spaces? (3) Do the provisions of the In the Development Control Rules affirmative 1991 restrict the rights of the plaintiffs/promoters to sell/dispose of the parking spaces? :8: (4) Do the Defendants prove that In the the undertaking given by the affirmative respective flat purchasers is not binding upon the Defendants namely the co- operative societies? (5) Do the Defendants prove that In the the undertaking referred to affirmative in paragraph 7 of the Plaint purported to have been executed by the respective flat purchasers are contrary to the provisions of the MOFA and as such illegal? (6) Do the Defendants prove that In the the undertaking referred to affirmative in paragraph 7 of the Plaint are contrary to the D.C. Rules and as such illegal? (7) Do the Plaintiffs prove that In the negative the residents of the respective buildings attempted to take possession of the stilt portion with the use of force? (8) Are the Plaintiffs entitled In the negative to the reliefs asked in the Plaint? (9) What order? As per final order . Issue Nos.4 to 6 deal with the undertaking furnished by the purchasers and hence they have been decided together. Similarly Issue Nos. 1,2 and 3 have been decided together. Certain documents were :9: brought on record before the trial court and the following documents are relevant for deciding this appeal:- (a) Exh.-A : Copy of the agreement dated 27/05/2002. (b) Exh.-D : Letter dated 4/3/05 from the Corporation to the plaintiff. (c) Exh.-E : Undertaking executed by one flat owners. (d) Exh.-F Colly: Sanctioned plan alongwith forwarding letter dated 19/8/02. (e) Exh.-G : Original I.O.D. dated 3/5/1997. (f) Exh.-H Colly: Original letter dated 27/2/01 alongwith approved amended plan. (g) Exh.-J : Original office copy of the plaintiff’s letter dated 26/3/02. (h) Exh.-M Colly: Affidavit of examination in chief of Rajesh Himatlal - PW 1. (i) Exh.-1 : Affidavit of examination in chief of Hariharan T. Iyer - DW 1. (j) Exh.-2 : List of documents along with the copies of original documents. (k) Exh.-3 Colly: Copies of tax receipts showing that the Defendants paid municipal taxes. (l) Exh.-4 Colly: Copy of the complaint filed by Defendants society in B.M.C. (m) Exh.-5 : Copy of the complaint filed by the Defendants society against the :10: plaintiff in Metropolitan Magistrate Court. 7. Before we deal with the merits in the challenge to the order passed by the trial court, it would be necessary to reproduce certain provisions of the MOFA, Clauses of the model form of agreement, namely, Form-V prescribed by the State Government, Development Control Rules and Regulations and Model bye-laws 2001 framed under the Co-operative Societies Act, 1960. FLAT FLAT FLAT Sec.1(a). "Flat" means a separate and self-contained set of premises used or intended to be used for residence, or office, show-room or shop or godown of for carrying on any industry or business and includes a garage, the premises forming part of a building and includes an apartment. Explanation.- Notwithstanding that provision :11: is made for sanitary, washing, bathing or other conveniences as common to two or more sets of premises, the premises shall be deemed to be separate and self-contained; Promoter Promoter Promoter Sec.2(c). "promoter" means a person who constructs or causes to be constructed a block or building of flats or apartments for the purpose of selling some or all of them to other persons, or to a company, co-operative society or other association of persons, and includes his assignees; and where the person who builds and the persons who sell are different persons, the term includes both; Sec.3(2)(d) - A promoter, who constructs or intends to construct such block or building of flats, shall - (d) disclose the nature of fixtures, fittings and amenities (including the provision for one or more lifts) provided or to be provided; :12: (h) state in writing, the precise nature of the organisation of persons to be constituted and to which title is to be passed; and the terms and conditions governing such organisation of persons, who have taken or are to take the flats; Sec. 3(m)(ii)(iii)(iv) - (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; :13: (iii) the nature, extent and description of the common areas and facilities; (iv) the nature, extent and description of limited common areas and facilities if any. Sec.4(1A)(a)(iii)(iv). (1A) The agreement to be prescribed and sub-section (1) shall contain inter alia the particulars as specified in clause (a); and to such agreement there shall be attached the copies of the documents specified in clause (b),- (a) particulars - (iii) the extent of the carpet area of the flat including the area of the balconies which should be shown separately; (iv) the price of the flat including the :14: 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 instalments thereof may be paid; Sec. 10 (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. (2) If any property consisting of building or buildings is constructed or to be constructed :15: and the promoter submits such property to the provisions of the Maharashtra Apartment Ownership Act, 1970, by executing and registering Declaration as provided by that Act then the promoter shall inform the Registrar as defined in the Maharashtra Co-operative Societies Act, 1960, accordingly; and in such cases, it shall not be lawful to form any co-operative society or company. Sec. 11. 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 :16: which may be in his possession or power. Sec.16.- The provisions of this Act, except where otherwise provided, shall be in addition to the provisions of the Transfer of Property Act, 1882, and shall take effect notwithstanding anything to the contrary contained in any contract. Clauses Clauses Clauses of the model form of agreement, of the model form of agreement, of the model form of agreement, FORM-V. FORM-V. FORM-V. Clause 2: The Flat Purchaser hereby agrees to purchase from the Promoter and the Promoter hereby agrees to sell the Flat Purchaser one Flat No. ........ of the Type ............. of carpet area admeasuring ...... sq.metres (which is inclusive of the area of balconies) on Floor as shown in the floor plan thereof hereto annexed and marked Annexure D/shop No. ...../ covered/ open Garage No....... in the .......Building (herein referred to as "the Flat") for the price of Rs......... including Rs........ being the proportionate price of :17: the common area and facilities appurtenant to the premises, the nature, extent and description of the common/limited common areas and facilities which are more particularly described in the Second Schedule hereunder written.... Clause 4 - The Promoter hereby declares that the Floor Space Index available in respect of the said land is ..... sq.mtrs. only and that no part of the said floor space index has been utilised by the Promoter elsewhere for any purpose whatsoever. In case the said floor space index has been utilised by the promoter elsewhere, then the Promoter shall furnish to the flat purchaser all the detailed particulars in respect of such utilisation of the said floor space index by him. In case while developing the said land the Promoter has utilised any floor space index of any other land or property by way of floating floor space index, then the particulars of such floor space index shall be disclose by :18: 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 registration of the society the residual F.A.R. (F.S.I) shall be available to the society. Clause 5 - In case the Promoter is acting as an agent of the vendor/Lessor/Original Owner of the said land, the Promoter hereby agrees that he shall, before handing over possession of the flat to the flat purchaser and in any event before execution of a conveyance/ assignment of lease of the said land in favour of a corporate body to be formed by the purchasers of flats/shops/garages in the building to be constructed on the said land (hereinafter referred to as "the Society"/ the Limited Company"), make full and true disclosure of the nature of his title to the said land as well as encumbrances, if any, including any right, title, interest or claim of any party in or over the said land and :19: shall as far as practicable ensure that the said land is free from all encumbrances and that the Vendor/Lessor/Original Owner the Promoter has/have absolute, clear and marketable title on the execution of a conveyance/assignment of lease of the said land by the Promoter in favour of the said Society/Limited Company. Clause 11 - The Flat Purchaser shall use the Flat or any part thereof or permit the same to be used for purpose of residence/office/ showroom/shop/godown for carrying on any industry or business. He shall use the garage or parking space only for the purpose of keeping or parking the Flat Purchaser’s own vehicle. Clause 13 - Unless it is otherwise agreed to by and between the parties hereto the Promoter shall, within four months of registration of the Society or Limited Company, as aforesaid cause to be transferred to the Society or :20: Limited Company all the right, title and the interest of the Vendor/Lessor/Original Owner/Promoter and/or the owners in the aliquot part of the said land together with the building/s by obtaining/ or executing the necessary conveyance/ and or assignment of lease of the said land (or to the extent as may be permitted by the authorities) and the said building in favour of such Society or Limited Company, as the case may be such conveyance/ assignment of lease shall be in keeping with the terms and provisions of this Agreement. Clause 24 - IT IS ALSO UNDERSTOOD AND AGREED BY AND BETWEEN THE PARTIES hereto that the terrace space in front of or adjacent to the terrace flats in the said building, if any, shall belong exclusively to the respective purchaser or the terrace flat and such terrace spaces are intended for the exclusive use of the respective terrace Flat Purchaser. The said terrace shall not be enclosed by the Flat Purchaser till the permission in writing is :21: obtained from the concerned local authority and the Promoter or the Society, or as the case may be, the Limited Company. . Sections 5 and 53 of the Transfer of Property Act, read as under:- 5."Transfer of property" defined.- In the following sections "transfer of property" means an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself and one or more other living persons; and "to transfer property" is to perform such act. . In this section "living person" includes a company or association or body of individuals, whether incorporated or not, but nothing herein contained shall affect any law for the time being in force relating to transfer of property to or by companies, associations or bodies of individuals. :22: 53.Fraudulent transfer.- (1) Every transfer of immovable property made with intent to defeat or delay the creditors or the transferor shall be voidable at the option of any creditor so defeated or delayed. . Nothing in this sub-section shall impair the rights of a transferee in good faith and for consideration. . Nothing in this sub-section shall affect any law for the time being in force relating to insolvency. . A suit instituted by a creditor (which term include a decree-holder whether he has or has not applied for execution of his decree) to avoid a transfer on the ground that it has been made with intent to defeat or delay the creditors of the transferor shall be instituted on behalf of, or for the benefit of, all the creditors. (2) Every transfer of immovable property made :23: without consideration with intent to defraud a subsequent transferee shall be voidable at the option of such transferee. . For the purposes of this sub-section, no transfer made without consideration shall be deemed to have been made with intent to defraud by reason only that a subsequent transfer for consideration was made. 8. The Government of Maharashtra by its notification dated 20/2/1991 has sanctioned and published the Development Control Regulations (DCR) for Greater Bombay, 1991. Regulation No.2 defines certain terms and the relevant of those for the present consideration are reproduced as under:- 2(7) "Amenity" means roads, streets, open spaces, parks, recreational grounds, play grounds, gardens, water supply, electric supply, street lighting, sewerage, drainage, public works and other utilities, services and conveniences. :24: 2(11) "Building" means a structure, constructed with any materials whatsoever for any purpose, whether used for human habitation or not, and includes - foundation, plinth, walls etc., verandas, balconies, any wall enclosing or intended to enclose any land or space, tanks constructed for storage of chemicals. 2(13) "Built-up area" means the area covered by a building on all floors including cantilevered portion, if any, but excepting the areas excluded specifically under these Regulations. 2(15) "Carpet area" means the net usable floor area within a building excluding that covered by the walls or any other areas specifically exempted from floor space index computation in these Regulations. 2(31) "External wall" means an outer wall of a building not being a party wall even though :25: adjoining a wall of another building and also means a wall abutting on an interior open space of any building. 2(47) "Garage-Private" means a building or a portion thereof designed and used for the parking of vehicles. 2(48) "Garage-Public" means a building or portion thereof, designed other than as a private garage, operated for gain, designed and/or used for repairing, servicing, hiring, selling or storing or parking motor-driven or other vehicles. 2(64) "Open space" means an area forming an integral part of a site left open to the sky. 2(67) "Parking space" means an enclosed or unenclosed covered or open area sufficient in size to park vehicles. Parking spaces shall be served by a driveway connecting them with a street or alley and permitting ingress or egress of vehicles. :26: 2(91) "Tenement" means an independent dwelling unit with a kitchen, or a cooking alcove. . Regulations 35 (2) and 36 read as under:- 35. Floor Space Index Computation- (1) ... (2) Exclusion from FSI computation - The following shall not be counted towards FSI:- (a) ....... (b) ....... (c) ....... (d) ....... (e) ....... (f) Area of unenclosed but covered parking spaces as provided in clause (b) (i) of sub-regulation (5) of Regulation 36. 36. Parking spaces.- Wherever a property is developed or redeveloped, parking spaces at :27: the scale laid down in these Regulations shall be provided. When additions are made to an existing building, the new parking requirements will be reckoned with reference to the additional space only and not to the whole of building but this concession shall not apply where the use is changed. (1) General Space Requirements.- (i) Types.- The parking spaces mentioned below include parking spaces in basements or on a floor supported by stilts, or on upper floors, covered or uncovered spaces in the plot and lock-up garages. (ii) Size of Parking Space.- The minimum sizes of parking spaces to be provided shall be as shown below:- (a) Motor vehicle 2.5 m x 5.5 m. (b) Scooter, Motor-cycle 3 sq.m. (c) Bicycle 1.4 sq.m. (d) Transport Vehicle 3.75 m. x 7.5 m. :28: (iii) Marking of Parking Spaces - Parking spaces shall be paved and clearly marked for different types of vehicles. (iv) ...... (v) ...... (2) Quantitative Requirements - Four wheeled auto-vehicles. - Parking spaces for four wheeled