Mandatory For Promoter To Take Flat Owner's Consent Before Any Addl Construction Takes Place In Housing Society: Bombay HC [Read Judgment]

Mandatory For Promoter To Take Flat Owners Consent Before Any Addl Construction Takes Place In Housing Society: Bombay HC [Read Judgment]

The Bombay High Court has held that it is mandatory for promoters to fully disclose their construction plans in a sanctioned layout plan to flat owners and take their consent in case any additional construction is to be done.

Justice SC Gupte was hearing a second appeal against a judgment of a district court in Thane. The second appeal was filed by one Vitthal Patil, after the district court confirmed another judgment passed by a civil court in Thane wherein Patil's suit was dismissed.

Case Background

According to the appellant, in January 2007, he entered into a flat purchase agreement with Kores India Real Estate Division. The agreement referred to a layout dated January 19, 2005 showing 15 buildings to be constructed by Kores, including the building containing the appellant's flat. The layout also showed various open and amenity spaces.

In October 2009, the appellant and others noted some activities suggesting a proposed construction of an additional building, i.e., Building No.16, on the suit property. Once the appellant objected to the said additional construction, the concerned planning authority rejected the proposal for additional construction.

Thereafter, a fresh proposal was submitted wherein the space proposed to be a recreational ground (RG) was said to be replaced by the building in question. Hence the appellant filed a suit objecting to the said proposal.

Judgment

Senior Advocate RS Apte appeared on behalf of the appellant and Senior Advocate PS Dani appeared for defendant Kores India.

The court examined the judgment of the Supreme Court in the case of Jayantilal Investments vs. Madhuvihar Coop. Housing Society and provisions of the Maharashtra Ownership of Flats Act (MOFA).

The court concluded that in accordance with the MOFA, promoters were bound to disclose plans to construct a building on the proposed RG area: "MOFA has two sets of provisions to ensure that the flat purchasers get what they were promised by the promoter when the purchase agreements were made. This was deemed necessary since usually such agreements are entered into before a building is constructed or a project of multiple buildings is completed. Having once entered into an agreement and invested a substantial amount for purchase of the flat, the flat purchaser, who would hardly be expected to be in a bargaining position and who more or less would have signed on the dotted line when he executed the agreement, has practically no effective remedy in general law to ensure that he actually gets what was promised to him at the time of the agreement. MOFA, therefore, steps in and provides for the purchaser's rights and corresponding obligations of the promoter to keep to the bargain."

The court further noted: "What is material is that the purchaser agreed to purchase the flat on the basis of the promoter's disclosures. These were: there would be 15 buildings in the proposed layout (may be with the possibility of an additional construction by use of FSI/TDR); and there would be large recreational spaces (RG Nos.1 and 2) located at the places indicated in the layout. On these disclosures, the purchaser thought it worth his while to purchase the flat. If that is so, considering the duty of disclosure which includes duty to conform to such disclosure on the part of the promoter, the question to be considered was whether the purchaser could now be told that the open recreational space of RG No.2 would be constructed upon and there would be 4 RGs at 4 different locations."

"A developer cannot disclose one or the other buildings or areas for additional construction and then construct it somewhere else. He must keep to his disclosure," Justice Gupte observed.

Thus, the second appeal was allowed and the suit has been remanded to the trial court, i.e., civil court, Thane, for a fresh hearing in accordance with law.

Read the Judgment Here