Builder Must Obtain Written Consent Of All Flat Owners For Layout Changes: Allahabad High Court

The Allahabad High Court has held that a promoter must obtain the written consent of all apartment owners under Section 5(3)(a) of the Uttar Pradesh Apartment (Promotion of Construction, Ownership and Maintenance) Act, 2010 before altering the plans, specifications and common areas of the building that were disclosed to them when they bought their flats.

Section 5(3)(a) of the Act, 2010 gives each apartment owner's percentage of undivided interest in the common areas and facilities a permanent character, alterable only with the written consent of all the apartment owners and the approval of the competent authority. Section 4(1)(c) and (d) require a promoter who intends to sell an apartment to disclose in writing the approved plans and specifications of the entire building and the details of all common areas and facilities.

The bench of Justice Saral Srivastava and Justice Sudhanshu Chauhan held,

“Therefore, we are of the view that before making any change in plan and specification approved by the local authority of the entire building of which the apartment forms part of and the details of common areas and facilities as per approved layout plan or building plan, the Promoter has to obtain written consent of apartment owners as provided in Section 5 (3)(a) of the Act 2010.”

“Therefore, we reject the contention of learned counsel for the respondents that so far as the alteration and specification in the plan is within the permissible limit of FAR, the consent of apartment owners is not required.”

The group housing layout at 95, Katori Mill, Mohan Nagar, Sahibabad, Ghaziabad was sanctioned on 29.05.2006 for 34 towers and 904 dwelling units, and cancelled on 03.07.2010 after officers of the Hindon Air Base objected to the promoter's title. The Ghaziabad Development Authority then compounded the map three times, on 15.11.2011, 13.01.2015 and 18.12.2024, the last regularising the ninth and tenth floors of Towers 16, 17, 18 and 19 and two new towers.

Eleven apartment owners came to the High Court saying their consent had never been taken, that the Authority was hand in glove with Promoter, and that land of the Indian Air Force had been counted in working out the permissible floor area ratio.

The promoter and the Authority replied that consent under Section 5(3)(a) is attracted only where the promoter seeks to increase the sanctioned number of dwelling units in the original layout; that 1603 units were permissible on the available FAR as against 1096 sanctioned, so neither the common areas nor the common facilities stood reduced; and that the petitioners do not live in the towers to which floors were added and cannot complain.

The Court referred to its Division Bench decision in M/s Designarch Infrastructure Pvt. Ltd. and Another Vs. Vice Chairman, Ghaziabad Development Authority and Others, which records that the percentage of undivided interest specified in the deed of apartment is permanent, cannot be altered without the written consent of all apartment owners and the approval of the competent authority, and that common areas cannot be transferred or partitioned.

It also relied on the Supreme Court's decision in Supertech Limited Vs. Emerald Court Owner Resident Welfare Association & Others, where revised plans that reduced the value of each flat owner's undivided interest in the common areas were held to breach Section 5 because consent had not been sought. That decision also holds that beyond the minor additions and alterations allowed by Section 4(4), a promoter cannot change plans and specifications without the previous consent of the intending purchaser, and that the protection runs in favour of those to whom the plans were disclosed when they were intending purchasers.

The Court observed that on the record, the sale deed of the first petitioner was executed on 07.09.2012, after the first compounding, yet recited only the layout sanctioned on 29.05.2006 and said nothing about the compounding of 15.11.2011. Condition no. 3 of that deed granted the purchaser proportionate undivided ownership rights in the freehold land beneath the complex and in the common areas and facilities.

“If after execution of the sale deed, the Promoter (vendor) changes the layout plan and specifications of the building which had been shown to the vendee at the time of purchase, and such change results in reducing the ground coverage area, common areas and other facilities, that would amount to curtailment or reduction in percentage of undivided interest of each apartment owner in ground coverage area, common areas and facilities, which have a permanent character as per Section 5 (3) (a) of the Act, 2010 and cannot be altered without written consent of all the apartment owners.”

The Court found that the extra FAR had been consumed in the basement, mumty, the ground floor and the balconies.

“In the instant case, it is evident from the record that Promoter has deviated and used the FAR by extending balconies of many apartments in several towers which establishes that the Promoter has made these deviations only with an object to sell these apartments on higher price to achieve maximum financial gain from sale of such apartment.”

The Court also found substance in the complaint carried in the association's 2015 petition that common areas had been sold along with the ground floor flats. It noted that the Authority's own record identified 85 persons in whose favour ground floor common space had been conveyed and who had raised boundary walls and rooms on it.

Section 5(4) of the Act, 2010 forbids the sale of common areas and facilities, and such a sale is an offence under Section 25, observed the Court.

An FIR under Sections 420, 467, 468 and 471 IPC was registered on 11.04.2018 as Case Crime No. 0749 of 2018, but a final report was filed on the footing that the dispute was civil and compoundable. The Court observed that

“We are shocked to see that the Final Report is submitted without enquiring into the allegations in the FIR.”

It noted that the investigating officer had neither inspected the site nor recorded the promoter's statement, confining himself to the statement of the society's general manager. The Court suspended Inspector Surendera Singh and directed an inquiry against him for dereliction of duty, and directed the Commissioner of Police, Ghaziabad to identify the officer who approved the final report, with the State Government to inquire into his conduct.

The Court also held that the promoter had transferred flats and handed over possession without a completion certificate, in breach of Section 15A of the Uttar Pradesh Urban Planning and Development Act, 1973 and Section 4(5) of the Act, 2010. It rejected his plea that such a certificate stood deemed to have been granted, and declined to hold the apartment owners responsible for occupying their flats in that situation.

“It is a clear case where the Promoter has misrepresented the correct facts and played fraud upon the apartment owners by selling common areas, and thus, has committed an offence.”

The Court also found that the Promoter had included land owned by by the Indian Air Force, and the Development Authority had included the aforesaid land for calculating FAR which is "per se illegal".

The Court directed registration of an FIR against the promoter within two weeks for fraud, misrepresentation and violation of the Act, 2010, to be investigated by an officer not below the rank of Additional Commissioner of Police, Ghaziabad.

The Vice Chairman of the Ghaziabad Development Authority was directed to head a three member committee which, after notice and hearing to the 85 persons, will identify the common areas sold to them, demolish any construction raised there and hand the areas back to the society within six months. The promoter was directed to refund the sale price of those areas with the cost of construction as quantified by the committee and interest at 10% from the dates of payment.

The third compounding dated 18.12.2024 was set aside with a direction to demolish the ninth and tenth floors of Towers 16, 17, 18 and 19 and the whole of Towers 27 and 28 within two months. Costs of Rs. 25 lakhs were imposed on the promoter and Rs. 50,000 per petitioner on the Authority. Both writ petitions were allowed.