Case: Esha Ekta Apartments Co-operative Housing Society Ltd. and Ors Vs. Municipal Corporation of Mumbai and Ors

agreement to be entered into between promoter and flat purchaser. 43. The above noted provisions were interpreted by this Court in Jayantilal Investments v. Madhuvihar Cooperative Housing Society (2007) 9 SCC 220. After noticing the relevant statutory provisions the two Judge Bench held: “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-ï¿½-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 to the flat takers remains unfettered even after the inclusion of Section 7-A in MOFA. That obligation remains unfettered even after the amendment made in Section 7(1)(ii) of MOFA. That obligation is strengthened by insertion of sub-section (1-A) in Section 4 of MOFA by Maharashtra Amendment Act 36 of 1986. 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 clauses 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 clauses 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 taker. Clauses 3 and 4 of the Form V 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 local authority concerned at the time of sanctioning the said plans or thereafter and shall, before handing over possession of the flat to the flat purchaser, obtain from the local authority concerned 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 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 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 disclosed by the promoter to the flat purchaser. The residual FAR (FSI) 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 FAR (FSI), shall be available to the society.”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.In our view, 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. 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 puts up additional construction in accordance with the layout plan, building rules and Development Control Regulations, etc.” 44. It is thus evident that the 1963 Act obligates the promoter to obtain sanctions and approvals from the concerned authority and disclose the same to the flat buyers. The Act also provides for imposition of penalty on the promoters. However, the provisions contained therein do not entitle the flat buyers to seek a mandamus for regularization of the unauthorized/illegal construction.45. In view of the above discussion, we hold that the petitioners in the transferred case have failed to make out a case for directing the respondents to regularize the construction made in violation of the sanctioned plan. Rather, the ratio of the above-noted judgments and, in particular, Royal Paradise Hotel (P) Ltd. v. State of Haryana and Ors. (supra) is clearly attracted in the present case. We would like to reiterate that no authority administering municipal laws and other similar laws can encourage violation of the sanctioned plan. The Courts are also expected to refrain from exercising equitable jurisdiction for regularization of illegal and unauthorized constructions else it would encourage violators of the planning laws and destroy the very idea and concept of planned development of urban as well as rural areas.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]In our view, the reasons assigned by the Deputy Chief Engineer and the Appellate Authority are in consonance with the law laid down by this Court in Suresh Estates Private Limited v. Municipal Corporation of Greater Mumbai (supra). The facts of that case were that after purchasing a plot measuring 8983 sq. mtrs. situated at Dr.Babasaheb Jaykar Marg, appellant Nos. 1 and 2 submitted plans to develop the same by constructing a luxury hotel in terms of the D.C. Rules. In the application, the appellants mentioned that they are entitled to additional FSI as per Rule 10(2) of the D.C Rules. The Corporation made a recommendation to the State Government that in view of the CRZ notification and the D.C. Rules, additional FSI be granted to the appellants. The Ministry of Environment and Forest sent communication dated 18.8.2006 to the Principal Secretary, Urban Development Department, Government of Maharashtra clarifying that the D.C. Rules, which existed on 19.2.1991 would apply to the areas falling within the CRZ notification and the wordmeans the rules which prevailed on 19.2.1991. It was also mentioned that the draft regulations of 1989, which came into force on 20.2.1991 would not apply. At that stage, the appellants filed a writ petition before the High Court with the complaint that the Corporation had not communicated its decision within 60 days. The same was disposed of by the High Court with a direction to the State Government to decide the application of the appellants within six weeks. Before this Court, it was argued on behalf of the Corporation that the D.C. Rules would not apply to the development permission sought by the appellants and the 1991 Regulations are applicable in the matter. According to the Corporation, the 1991 Regulations do not provide for additional FSI for the proposed hotel project. It was further argued that the restrictions contained in the CRZ notification will be attracted because the plot is situated in CRZ area. This Court noted that the 1991 Regulations were notified on 20.2.1991 and came into force on 25.3.1991 whereas CRZ notification was issued on 2.2.1991 andas employed in the CRZ notification means the town and country planning regulations in force as on 19-2-1991. If it had been the intention that the town and country planning regulations as in force on the date of the grant of permission for building would apply to the building activity, it would have been so specified. It is well to remember that CRZ notification refers also to structures which were in existence on the date of the notification. What is stressed by the notification is that irrespective of what local town and country planning regulations may provide in future the building activity permitted under the notification shall be frozen to the laws and norms existing on the date of theCourt is of the opinion that Section 46 of the MRTP Act, 1966 would not apply to the facts of the instant case. Further, when the sanctioned DC Regulations for Greater Bombay, 1991 do not apply to areas covered within CRZ II, since those Regulations came into force with effect from 25-3-1991, its previous draft also cannot apply. The draft published is to be taken into consideration so that the development plan is advanced and not thwarted. The draft development plan was capable of being sanctioned, but when the final development plan is not applicable, its draft would equally not apply as there is no question of that plan being thwarted at all. As far as development in the area covered by CRZ II is concerned, one will have to proceed on the footing that the draft plan after CRZ notification never existed. Even otherwise what is envisaged under Section 46 of the MRTP Act is due regard to draft plan only if there is no final plan. The DC Rules of 1967 were in existence as on 19-2-1991 and therefore the plan prepared thereunder would govern the case.An analysis of the above reproduced provisions makes it clear that any person who undertakes or carries out development or changes the use of land without permission of the Planning Authority is liable to be punished with imprisonment. At the same time, the Planning Authority is empowered to require the owner to restore the land to its original condition as it existed before the development work was undertaken. The scheme of these provisions do not mandate regularization of construction made without obtaining the required permission or in violation thereof.40. Circular dated 4.2.2011, on which reliance was placed by Shri Prasad, cannot be invoked for entertaining the prayer for regularization. That circular only contains the procedure for regularization of unauthorized works/structures. It neither deals with the issues relating to entitlement of the applicant to seek regularization nor lays down that the Planning Authority can regularize illegal construction even after dismissal of the appeal filed under Section 47 of the 1966 Act. Therefore, the procedure laid down in Circular dated 4.2.2011 is of no avail to the flat buyers.It is thus evident that the 1963 Act obligates the promoter to obtain sanctions and approvals from the concerned authority and disclose the same to the flat buyers. The Act also provides for imposition of penalty on the promoters. However, the provisions contained therein do not entitle the flat buyers to seek a mandamus for regularization of the unauthorized/illegal construction.45. In view of the above discussion, we hold that the petitioners in the transferred case have failed to make out a case for directing the respondents to regularize the construction made in violation of the sanctioned plan. Rather, the ratio of the above-noted judgments and, in particular, Royal Paradise Hotel (P) Ltd. v. State of Haryana and Ors. (supra) is clearly attracted in the present case. We would like to reiterate that no authority administering municipal laws and other similar laws can encourage violation of the sanctioned plan. The Courts are also expected to refrain from exercising equitable jurisdiction for regularization of illegal and unauthorized constructions else it would encourage violators of the planning laws and destroy the very idea and concept of planned development of urban as well as rural areas.