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Kalpita Enclave Co-operative Housing Society Ltd. and ors. Vs. Kiran Builders Pvt. Ltd. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMumbai High Court
Decided On
Case NumberAppeal from Order Nos. 159 of 1980 and 450 of 1985 and Civil Revision Application No. 628 of 1980
Judge
Reported in1987(1)BomCR355; (1986)88BOMLR100; 1986MhLJ110
ActsMaharashtra Ownership Flats (Regulation of the Promotion of Construction, Sales, Management and Transfer) Act, 1963 - Sections 7, 7(1) and 7(2)
AppellantKalpita Enclave Co-operative Housing Society Ltd. and ors.;ishwar Chinga Shetty and anr.;dharshan Si
RespondentKiran Builders Pvt. Ltd.;jivanji Bhulabhai Patel by His Heirs and ors.;sardar Saudagar Singh Bhala S
Appellant AdvocateJ.J. Mehta, ;Shekhar Naphade and ;M.K. Nesari, Advs. in A.O. 450/85, ;N.V. Walawalkar, Adv. for ;R.T. Walawalkar, Adv. in A.O. 159/80 and ;P.S. Patank, Adv. in C.R. A. 628/80
Respondent AdvocateM.V. Paranjape and ;S. Rahimtoola, Advs. i/b., R.D. Sethna and Co., in A.O. 450/85, ;A.G. Parikh, Adv. for respondents 1A to I.C.I.E. IG. and respondents 2 and 3, in A.O. 159/80, ;R.K. Rao, Adv. for r
Excerpt:
maharashtra ownership flats (regulation of the promotion of construction, sale, management and transfer) act, (mah. xiv of 1963), sections 7(1), 7(2) - civil procedure code (v of 1908), section 9--maharashtra housing and area development act, 1976 (mah. xxviii of 1977), sections 188, 189--jurisdiction of authority constituted under section 7(2) of ownership flats act--extent of--contravention of section 7(1) of ownership flats act and unauthorised change in construction by promoter--civil court whether has jurisdiction to decide disputes raised by flat-purchasers in suits against promoter.;section 7 of the ownership flats act imposes an obligation on the promoter to construct the buildings and otherwise develop the property strictly in accordance with the agreements entered into with the.....r.a. jahagirdar, j.1. the two appeals and the petition raise an important question of law relating to the jurisdiction of the authority constituted under section 7(2) of the maharashtra ownership flats (regulation of the promotion of the construction, sale, management and transfer) act, 1963 (hereinafter referred to for brevity's sake as the 'ownership flats act'). though the question which arises in all these three matters is common, for the sake of convenience i proceed to narrate the facts involved in appeal no. 450 of 1985 from order. i will refer to the arguments advanced in support of that appeal by mr. j.i. mehta appearing for the appellants and also refer to the arguments urged on behalf of the appellants in the other appeal and on behalf of the petitioner in the civil revision.....
Judgment:

R.A. Jahagirdar, J.

1. The two appeals and the petition raise an important question of law relating to the jurisdiction of the authority constituted under section 7(2) of the Maharashtra Ownership Flats (Regulation of the Promotion of the Construction, Sale, Management and Transfer) Act, 1963 (hereinafter referred to for brevity's sake as the 'Ownership Flats Act'). Though the question which arises in all these three matters is common, for the sake of convenience I proceed to narrate the facts involved in Appeal No. 450 of 1985 from order. I will refer to the arguments advanced in support of that appeal by Mr. J.I. Mehta appearing for the appellants and also refer to the arguments urged on behalf of the appellants in the other appeal and on behalf of the petitioner in the Civil Revision Application. All the arguments on behalf of the persons who are challenging the view taken by the City Civil Court at Bombay are being dealt with and disposed of without some times specifically referring to the particular advocate who has made those arguments. Similarly the arguments on behalf of the respondents in all these matters are dealt with.

2. Now to the facts in Appeal No. 450 of 1985 from Order. The appellants (hereinafter referred to as the 'plaintiffs') filed a suit, being S.C. Suit No. 3226 of 1985, in the City Civil Court at Bombay for an injunction restraining the respondents (hereinafter referred to as the 'defendants'), which is a Private Limited Company, from carrying on certain construction which, according to them, are in contravention of the agreements entered into by the plaintiff with the defendant. Plaintiff No. 1 itself is a Co-operative Housing Society having been so registered some time in the year 1985. Plaintiffs Nos. 2, 3, and 4 are purchasers of flats in the buildings which are to be owned by the first plaintiffs. The building have been constructed by the defendant which, as mentioned above, is limited company and which acted as the promoter in respect of these buildings. Some time in the year 1975 the plans for the construction of buildings on the land were submitted by the defendants and sanctioned by the Bombay Municipal Corporation. It is the contention of the plaintiff that 15% of the total area on which some building were to be constructed was reserved, according to the plans sanctioned by the Bombay Municipal Corporation, for recreation purposes. This area comes to about 3752 square metres. In the plans on which reliance has been placed by the plaintiffs, the areas which were to be reserved for recreation purpose have been shown by the letters G-1, G-2 and G-3. The buildings themselves were completed and the plaintiff have contended with sufficient success that plaintiff Nos. 2, 3, and 4 and several other purchasers of the flat have been put in possession of their respective flats. There is for example a letter dated 11th May, 1983 written by the Municipal Corporation to Mr. Phadke, the Chief promoter, in which details of the occupation certificates given have been mentioned in respect of the several buildings. The rest of the property, namely, the open spaces have not been naturally given in possession of the plaintiffs. This is partly for the reason that the co-operative society to which the conveyance had to be made in accordance with section 10 of the Ownership Flats Act had not yet been formed. It has been contended on behalf of the defendants before me, and there is considerable substance in this contention, that the entire property cannot be aid to have been given in possession of any of the plaintiffs.

3. Subsequently, namely, on 15th February, 1984 the promoter surrendered to the Municipal Corporation an area of 2200 square metres of the property which would otherwise have been conveyed to the co-operative society. In lieu of the property so surrendered by the promoter, the Municipal Corporation allowed the promoter to utilise extra floor space Index. Taking advantage of this permission given by the Municipal Corporation, the defendant is, according to the plaintiffs, constructing certain additional building on areas which, according to the plans originally sanctioned were reserved for recreation purposes or, at any rate, were to remain as open spaces. The plaintiffs insisted that when they purchased the flats from the promoter, they did so after the representations which were apparent, namely that the property would be developed in accordance with the plans which had been then sanctioned by the Municipal Corporation. The plans and specifications of the building as approved by the Bombay Municipal Corporation were naturally shown to them and these unmistakably indicated that an area of 3752 square metres indicated in the map as G-1, G-2, and G-3 was to be reserved for recreation purposes or at any rate, was to kept open. Implicit in this representation on which the plaintiffs acted was the fact that no buildings of any kind would be constructed by the promoter.

4. With these allegations the plaintiffs filed for the aforesaid suit in the City Civil Court at Bombay.

5. In the said suit the plaintiff prayed for a mandatory order of injunction that the defendant be ordered and directed to complete and perfect their title to the land and to convey the said land together with the buildings standing thereon to the first plaintiff. It was also prayed that the defendant be restrained by an order of injunction from proceedings with the construction in regard to any plan sanctioned by the Municipal Corporation on the land shown as G-2 and G-3 of the pay-out plans. In the said suit they took out a Notice of Motion bearing No. 2488 of 1985 for interim relief in terms of prayer Clause (c) of the plaint wherein it has been prayed that pending the hearing and final disposal of the suit, the defendants be restricted by an order of injunction from proceedings with the construction of the buildings on the land shown as G-2 and G-3 of lay-out plans.

6. The learned trail Judge by his judgement and order dated 5th June, 1985 dismissed the Notice of Motion by holding that under section 7(2) of the Maharashtra Ownership Flats Act the only authority which can deal with the questions of the type raised by the plaintiffs was the Housing Commissioner or any officer not lower in rank than the Superintending Engineer as the State Government may specify. The learned trail Judge thought that was the only view which he could legitimately take in view of the judgement of a Division Bench of this Court delivered on (2nd September, 1983 by Walikar, J., with Vaze, J.)1. In other words, the learned trial judge interpreting sanction 7(2) of the Ownership Flats Act in the light of the judgement given by the Division Bench of this Court thought that the Housing Commissioner as mentioned in the aforesaid provisions or an officer of the rank mentioned in the aforesaid section had exclusive jurisdiction to deal with any complaint in respect of any unauthorised change in the construction which the plaintiffs had alleged was being made by the defendants in the suit. It is again this order of the learned trial Judge dismissing the Notice of Motion that Appeal No. 450 of 1985 from order has been preferred.

7. In Civil Revision Application No. 628 of 1980 the facts are similar. There the petitioners are the plaintiffs in L.C. Suit No. 3748 of 1980. The possession pursuant to the agreements entered between the promoter and the purchaser of the flats was given between December 1972 and January 1979. The plaintiffs have alleged that some time in June 1980 more than one year after the possession was given, the promoter started making unauthorised construction by covering the stilts on the ground floor thereby converting open space into tenements. On 11th July, 1980 the suit was filed and prayers restraining the defendant-promoter from continuing with the possession were made. It may be added that in this suit, namely, Suit No. 3748 of 1980, the Municipal Corporation was also made a party and a prayer for injunction restraining the Municipal Corporation from sanctioning the plans submitted by the promoter was made. A Notice of Motion bearing No. 2811 of 1980 was taken out and interim relief in terms of the main prayer of prohibitive injunction made in the suit was made in the Notice of Motion. Initially ad interim order of injunction has been granted of this Notice of Motion . Subsequently the learned trial Judge by his order dated 21st July, 1980 directed that the ad interim order passed earlier would continue till the mid-night of 25th July, 1980, which necessarily ment that the ad interim injunction was to stand vacated after that particular date. It is against this order that the revision application has been preferred by the plaintiffs. It is true that subsequently the learned advocate appearing for the plaintiffs in the City Civil Court allowed the Notice of Motion to be dismissed. On 30th July, 1980 the present civil revision application has been preferred.

8. The facts in Appeal No. 159 of 1980 from order are also some whatsimilar. The plaintiffs, who are the purchasers of flats in a building to be constructed by the promoter, filed a suit, being Suit No. 4191 of 1979, in August 1979. The possession of the flats purchased by the plaintiffs was given on or about 26th April, 1978. Thereafter say the plaintiff, the promoter contrary to section 7(1) of the Ownership Flats Act started unauthorised construction some time in June 1979, that is, again more than one year the possession was given. Prayers similar in type to these made by the plaintiffs in the order two suits were also made by the plaintiffs in this suit.

9. From what has been staged so far about the facts in these three suits it is clear that the plaintiffs in all these suits are purchasers of flats from a promoter who is required to abide strictly by the provisions contained in the Ownership Flat Act and also naturally by the terms of the agreements under which the plaintiffs agreed to purchaser the flats. In all these cases possession in said to have been given to the different plaintiffs; again in all these cases, the promoter is said to have started some constructions more than one year the possession of the flats had been given to the plaintiffs. In all these cases, it has also been alleged by the plaintiffs that the proposed construction started by the promoters one year after the date of possession are contrary to section 7(1) of the Ownership Flats Act or at any rate, they are contrary to the convenants contained in the agreement pursuant to which the plaintiffs agreed to purchase the flats.

10. When Appeal No. 159 of 1980 from Order and Civil Revision Application No. 628 of 1980 originally came up before my Brother S.K. Desai, J., for final hearing, he noticed a judgment of a Single Judge of the Court governing the field on the question of the exclusive jurisdiction of the authority mentioned in section 7(2) of the Ownership Flats Act. Indeed in these two matters, which were before my Brother S.K. Desai, J., the City Civil Court had relied upon the judgment of the learned Single Judge and accordingly it held that the Civil Court had no jurisdiction to decide the disputes raised by the plaintiffs in their respective suits. Desai, J., after reading the judgement of the single Judge to which now I will proceed to make reference, though that the case was not correctly decided. He was not inclined to agree with the view taken by the learned single Judge in that case and proceeded to refer the matter to the Division Bench.

11. At this stage it may also be noted that another judgement of Apte, J., dated 29th June, 1976 in (Civil Revision Application No. 185 of 1976)2, was also bought to the notice of Desai, J. The judgment of Apte, J., proceeded on the basis that the Civil Court had jurisdiction to deal with questions of contravention of section 7(1) of the Ownership Flats Act and in appropriate cases, the Civil Court could legally issued orders of injunction restraining the promoter from committing any act contrary to the provisions of the Ownership Flat Act. The question of the exclusive nature of the jurisdiction of the authority mentioned in section 7(2) of the Ownership Flats Act, however had not been raised specifically before Apte, J., and, therefore, had not been decided.

12. The judgement of Apte, J., also concerned itself with another question namely, whether the consent mentioned in section 7(1) of the Ownership Flats Act could mean a blanket consent given to the promoter by the purchasers of the flats without specifying which particular structure could in variation of the plans originally sanctioned were consented to. Apte, J., had in terms and unequivocally held that a blanket consent obtained by the promoter from the intending purchasers of flats is not the consent envisaged under section 7(1) of the Act. Desai, J., therefore, rightly held that there was no question of any conflict between the judgement of Apte, J., and the judgement of Naik, J., which had decided on the question of the jurisdiction of the authority under section 7(2) of the Act in so far as the question of consent was concerned. With great respect, this is so far as the question and in fact in a later judgement delivered by another Single Judge of this Court, namely, Aggarwal, J., in (Appeal No. 575 of 1982, from order with Appeal No. 875 of 1982, from order both decided on 9th February, 1983)3 : : 1984(2)BomCR505 it has been held that consent in section 7(1)(ii) of the Ownership Flat Act must be understood to mean positive consent to specific items of work or alternation to be carried out or particular additional structure to be built by the promoter. A blanket consent or authority obtained by the promoter at the time of entering into the agreement for sale or at the time of handing over possession is not the consent contemplated by section 7(1)(i) or section 7(I)(ii). Such a blanket consent or authority would sew up or nullify the provisions of the Ownership Flat Act which are meant for the protection of the purchasers of flats under the Ownership Flat Act. Aggarwal, J., has, with great respect, rightly held that the promoter cannot under the cloak of the blanket consent obtained under the proforma agreement for sale carry out the work of additional structure thus nullifying the provisions which are made essentially for the protection of the purchasers of flats. Therefore, it can be stated that so far as the question of the type of consent required under section 7(1) of the Ownership Flats Act is concerned the judgement of Apte, J., which is the same as that of Agarwal J can be said to be final word on this subject at present. It has also been stated by Desai, J., that there is no view which is contrary to the view taken by Apte, J.

13. The reference to the Divisions Bench was made by Desai, J., by a detailed judgement dated 27th October, 1980. Desai, J., examined the judgement of V.A. Naik, J., given on 24th October, 1966 in (Appeal No. 299 of 1965 from order)4, and was of the opinion that if disputes of the type which had arisen in Appeal No. 159 of 1980 from Order and Civil Revision Application No. 628 of 1980 are referrable to the Housing Commissioner and are held to be within his exclusive control and jurisdiction, it would make it mockery by the various provisions contained in and right conferred on the purchasers by the Ownership Flats Act. Since however, Naik, J., had taken a view which had almost ousted the jurisdiction of the Civil Court to entertain the suit and grant relief, Desai, J., had thought it necessary to refer both the matters to a larger Bench.

14. Before proceedings to consider the judgment of the Bench, which is naturally binding upon me, it would be advantageous to briefly the view taken by Naik, J., in Appeal No. 299 of 1965 from order. The facts of that case disclosed that the promoter was proposing to construct an additional floor on the terrace. The question was whether the additional floor on the terrace amounted to an additional structure and thus fell within the meaning of section 7(1)(ii) of the Ownership Flats Act. The learned Counsel appearing for the plaintiff in that case had conceded that the first part of Clause (ii) may not apply. In order words, it was conceded before Naik, J. That the construction of an additional floor complained of in that case did not amount to an alternation in the structure of the buildings. Naik, J., proceeded to hold that construction of an additional floor on the terrace amounted to additional structure.

15. The next question that was to be decided by Naik, J., was whether under sub-section (2) of section 7 of the Ownership Flats Act the words 'any unauthorised change in the construction' included within its compass the 'additional structures' mentioned in the second part of Clause (ii) of section 7(1) of the Ownership Flats Act. The words 'additional structures' mentioned in Clause (ii) or even the words 'alteration in the structure' to be found in clause (i) of sub-section (1) of section 7 were missing in sub-section (2) of section 7. On the other hand what is contemplated by sub-section (2) is 'any defect in the building or material used or any unauthorised change in the construction'. Naik, J., held as follows :-

'It appears to me that legislature instead of retyping all three items has used a comprehensive phraseology viz. unauthorised change. This expression obviously embraces the words 'alternations in the structure of the flat, alternations in the structure of the building ' as also the words 'construct an additional structures'. Prima facie therefore, if there is a dispute between the parties on the question relating to the construction of the additional structure that must also be referred to the Housing Commissioner .'

16. The order of reference made by Desai, J., to the Division Bench naturally centred round the question as to whether the phrase 'unauthorised change in the construction ' to be found in sub-section (2) of section 7 included within its ambit 'any additional structures' that is mentioned in section 7(1). If that is so, the next question was whether the Housing Commissioner would have jurisdiction to decide on the question whether there is any unauthorised change in the construction as mentioned in sub-section (2) of section 7.

17. The view of Naik, J., has been specifically and unequivocally up held by the Division Bench by the judgement delivered by its on 24th September, 1983. The Division Bench has subjected the relevant provisions of the Act to detailed review and after noticing the view of Naik, J., as well as the view of Desai, J., has unequivocally upheld the view of Naik, J. In other words, the Division Bench has taken the view agreeing with Naik, J., that additional structures mentioned in section 7(1) of the Ownership Flats Act were necessarily included in the phrase 'any unauthorised change in the construction ' mentioned in sub-section (2) of section 7. If this is so, then naturally the authority mentioned in sub-section (2), namely, the Housing Commissioner or an officer of the rank mentioned therein will have exclusive jurisdiction to grant relief in respect of the complaints made by the purchasers of the flats.

17-A. It was argued before the Division Bench that when additional structures are constructed, it may not be possible having regard to the limited nature of the powers given to the authority under section 7(2) for that authority to prevent further mischief or to demolish construction which had already been made by the promoter contrary to the provisions of section 7(1). The Division Bench held that though the authority under section 7(2) could not be regarded as Court capable of committing contempt of himself could order and direct stoppage of the further work or order rectification, removal and award compensation. The Division Bench felt that merely because there is no machinery provided for the enforcement of the orders of the authority under section 7(2), it could not be said that he had no exclusive jurisdiction to decide matters and fix up the liability as mentioned in section 7(2) of the Act. The Division Bench, however, was careful enough to mention that the jurisdiction of the authority under section 7(2) of the Act necessarily depended upon the existence of certain jurisdictional facts, namely, alternations in respect of the flat and unauthorised change in the construction. It has been so stated in paragraph 16 of the judgement of the Division Bench.

17-B. There is also the necessity of the further existence of an additional fact which could invest the authority under section 7(2) with the exclusive jurisdiction to decide the questions arising under section 7(2). In a latter paragraph of the judgement the Division Bench has proceeded to lay down as follows :-

'With respect, therefore, we agree with the view taken by Naik, J., and would, however, like to clarify that the Housing Commissioner has exclusive jurisdiction to decide all disputes arising under section 7 of the Act, but only such disputes which are to be referred to him under the circumstances and within the limitation as prescribed under section 7(2).'

(Emphasis Provided)

The Division Bench did not decide the question arising in the two matters and directed that the same be placed before a Single Judge for disposal on merits. Indeed liberty in one case was given to the Advocate for the purchasers of the flats to contend before the Single Judge that the suit which has been filed by them in the Civil Court was not the one which fell within the limited scope and compass of section 7 of the Ownership Flats Act. It is thus that these two matters have come up before me for final hearing. Along with these two matters Appeal No. 450 of 1985 from Order, facts of which have been narrated by me in details has also been heard.

18. A careful reading of the judgement of the Division Bench shows that the authority under section 7(2) of the Ownership Flats Act has exclusive jurisdiction to decide all questions arising under that provision. The Division Bench has also unequivocally, as already mentioned by me above, held that the exclusive jurisdiction of the authority under section 7(2) of the Ownership Flats Act depends upon the existence of the jurisdictional facts and also upon the existence of the circumstances mentioned in section 7(2). If the facts mentioned in section 7(2) are present and the other requirements also mentioned in section 7(2) are satisfied, then and then alone the authority under section 7(2) will have exclusive jurisdiction to deal with questions mentioned in section 7(2) of the Act. The Division Bench has not naturally held the questions which fall outside the scope of section 7(2) or questions arising in circumstances not mentioned in section 7(2) can legitimately be handled by the authority mentioned in section 7(2). Though, with great respect, the law has been clearly laid down by the Division Bench in the aforesaid judgement, for the purpose of ready reference. I would analyse section 7(2) of the Ownership Flats Act. This would also enable me to apply the ratio of the Division Bench judgement correctly to the facts of the cases before me.

19. Sub-section (2) of section 7 of the Ownership Flats Act comes into operation only after the building is constructed and completed and the possession of the same is given to the purchasers of the flats. I say that the said provisions applied only after the possession of the flats is given to the purchasers because in the first place, the purchasers have to bring any defect in the building or material used or any unauthorised change in the construction that has been made to the notice of the promoter. This can naturally be done only after the possession is given. Secondly, it is also provided that this act of bringing to the notice of the promoter the defect in the building or unauthorised construction has to be done within one year from the date of handing over possession. The starting point for the period of limitation within which the flat purchaser has to bring to the notice of the promoter the defect or the unauthorised construction is the date on which the possession of the flat is given to the flat purchaser. Obviously, therefore, the provisions of section 7(2) will not apply if the possession has not been given.

20. Secondly, the dispute must release to 'any defect in the building or material used' or to 'any unauthorised change' which phrases must necessarily include any additional structure that has been made by the promoter. Thirdly, such defect or the unauthorised structure has to be brought to the notice of the promoter within one year form the date on which the purchaser takes the possession of the flat. After this is done, the promoter shall wherever it is possible rectify the defect without further charge to the purchaser of the flat and where such rectifications is not possible, he shall give to the flat purchaser reasonable compensation. All these provisions are contained in the first part of sub-section (2).

21. If the promoter refuses to accept that there is a defect or there is any unauthorised change in the construction or refuses to rectify the defect or refuses to give reasonable compensation to the flat purchaser for the defect or change, then naturally a dispute can be said to have arisen. When such a dispute arises, it can be referred by the flat purchaser for a decision to the authority mentioned in section 7(2) of the Ownership Flats Act. Here again it has been specifically provided that the dispute has to be referred to the authority within a period of two years from the date of handing over possession. From these provisions one can easily notice that within one year from taking the possession, a dispute has to be raised by the flat purchaser and if it is not amicably settled with the promoter, it can be referred to the authority under section 7(2) within a period of two years from the date of taking possession.

22. Any decision that is given by the authority under section 7(2) of the Ownership Flat Act cannot be executed by the authority himself. This is why the Division Bench pointed out that a decision given by the authority, though not enforceable by the authority, gave a cause of action to the flat owner to file a suit in the Civil Court. In paragraph 24 of its judgement the Division Bench has clearly stated that the order or decision made by the authority under section 7(2) can certainly constitute a cause for cation for the aggrieved party to file a suit for seeking those reliefs. When such a decision is given by the authority and a suit is filed by the aggrieved party in the Civil Court, naturally the Civil Court at that stage will be fully competent to deal with every questions that has been raised by the aggrieved party. It is in this sense that the Division Bench has said that the Civil Court would be required to first decide disputed facts contemplated by section 7 of the Act, which are jurisdictional facts to be determined by the Housing Commissioner for exercising his jurisdiction. There would thus be two forums functioning in same area resolving similar disputes' (Paragraph 25 of the judgement of the Division Bench).

23. Before I proceed to mention the cases which do not fall within the four corners of section 7(2) of the Ownership Flats Act, it would be relevant to state that neither in the Act nor in the Rules framed under the Act any provision has been made as to when the possession of the flats should be given to the purchasers thereof. There is no provision, for example, that possession of the flats can be given only after the entire property is conveyed to the purchasers. Section 10 states that 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 a company. In other words, a duty has been cast upon the promoter to bring about the formation of a co-operative society or a company to whom the property is to be conveyed after it has been developed. Under section 11 of the Ownership Flats Act the promoter is enjoined to take all the steps necessary to complete his title and convey either to the co-operative society or to the Company as mentioned in section 10, his right, title and interest in the land and building. These two sections which deal with the taking of steps in the direction of the conveyance of the property to the flat owners do not mention that the possession of the flats cannot be given before the property is conveyed to the corporate body to be formed for that purpose of the purchasers of the flats. Under Rule 5 framed under the provisions of the Ownership Flats Act it is provided that the agreement of sale referred to in section 4 of the Ownership Flats Act shall contain among other things the date by which the possession of the flat is to be handed over to the purchaser. This date may be conceivably, therefore, vary from the date by which the property is to be conveyed to the society or the Company of the purchasers of flats.

23-A. It is thus clear to me that the possession of the flats of even of the building or of the entire property could conceivably be given to the flat owners or the co-operative society or the Company that may be formed before the formal conveyance of the entire property is effected. The Legislature could not have obviously overlooked this fact because in sub-section (2) of section 7 the starting point of limitation within which the defects are to be brought to the notice of the promoter and, if they are not attend to, then to the Housing Commissioner is stated to be the date on which the possession has being given. I have already mentioned above and it is so clearly implied in the judgment of the Division Bench that sub-section (2) of section 7 cannot became operative unless the possession of the flats or of the buildings, as the case may be, is given to the flat owners or to the corporate body that is formed for the purpose. It is worth repeating that sub-section (2) of section 7 deals with a situation where possession of the completed flats or buildings is given. Therefore, the said provision further states that any defect in the building or material or any unauthorised change in the construction detected by the flat owners is to be brought within one year from the date of taking possession to the notice of the promoter. Possession obviously cannot be given of a building which is under construction. Possession also cannot in advance be given of any construction that the promoter may intend to make on the property. Therefore, the parameters within which action is to be taken under section 7(2) by the authority are that there must be, in the first place, possession given of the completed flats or building to the person or the society concerned and a defect, if detected within one year after such possessions is given, is to be attend to in the manner provided therein. I have no difficulty in saying so on the basis of the judgement given by the Division Bench which in all humility is totally binding upon me.

21. The Division Bench has already stated that the matters are to be disposed of by the Single Judge in the light of the law laid down by it in relation to the jurisdiction of the authority under section 7(2) of the Ownership Flats Act. This now I proceed to do. While summarising the facts of each of the three matters before me I have already stated that the common feature of all this matters is that possession in each case has been to the plaintiffs in the three different suits. It is also a further common feature of all this matters that the unauthorised construction which is being challenged by the plaintiffs in each of these suits has been commenced one year after the possession has in fact been given to the plaintiffs. In all these cases, property has not been conveyed to the body corporate as required under section 11 of the Act. The plaintiffs, therefore, in all these cases are not the full fledged owners of the property. If they were, any act that would be done by the promoter on the property would have amounted to an act of trespass making me liable both under the civil and the criminal law. Since the property has not being conveyed to the body corporate or society, the promoter has taken liberty to further erect some structure which according to the plaintiffs, are not consistent with the agreements entered into with the purchasers of the flats and also not consistent with the plans and specifications on the basis of which the plaintiffs agreed to purchase the flats. It is not enough, say the plaintiffs, that after they had agreed to purchase the said flats the Municipal Corporation has permitted certain alternations or sanctioned new plans according to which the promoter in each case is proceeding to make the additional structures. The sanction of the Municipal Corporation for any alternation or for a new plan does not make the proposed construction any the less unauthorised because the unauthorised construction that is contemplated in section 7(2) of the Ownership Flats Act is the structure which is not authorised as per section 7(1). A structure ceases to be an authorised structure if it does not conform to the plans and specification approved by the local authority on the basis of which the flats owners have agreed to purchase the flats. If any alternation is to be made or any structure is to be constructed, it is necessary that the promoter must obtain for such alternation or structure the consent of the person who has agreed to purchase the flat. If, however, he fails to do so and then proceeds to make any alternation or make any additional structure, that alternation or that additional structure will be an unauthorised construction.

25. This unauthorised construction, if it has already being made before the possession is given, will be completely covered by the provisions of section 7(2) of the Ownership Flats Act. If, however, the unauthorised construction is made or is being made after the possession has being given, then, in my opinion the provisions of section 7(2) will not be applicable because, as already mentioned above and it is worth repeating, section 7(2) will apply only to a situation where the possession of completed structure is given to the flat owners or to the body corporate, as the case may be. In all these cases, therefore, where after giving the possession, the promoter has ventured to, with or without the sanction of the Municipal Corporation, construct a new building or a new structure which is not warranted by the promises contained in the agreement with the flat purchasers, obviously there is a contravention of section 7(1) of the Ownership Flats Act. At the same time since it is unauthorised construction which is not covered by the provisions of section 7(2), the authority under section 7(2) will naturally not have jurisdiction to entertain any complaint from the flat owners in respect of the same. A contravention of section 7(1) of the Ownership Flats Act gives rise to the cause of action to the plaintiffs in each of these cases and since these cause of action is not within the jurisdiction, let alone the exclusive jurisdiction of the authority mentioned under section 7(2), the plaintiffs' remedy is only in the Civil Court. The contravention of section 7(1) of the Ownership Flats Act gives a cause of action because any construction carried on by the promoter which is not in accordance with the plans and specifications of the building on the basis of which the flat owners agreed to purchase the flats will be an unauthorised construction. A negative obligation placed upon the promoter by section 7, if broken, must necessarily give rise to a civil cause of action, though it has not been made a penal offence under the provisions of this Act. I do not see how when such a cause of action arises, the Civil Court can be said to have no jurisdiction to hear and decided the same. It is only when the defect in the building or material of a flat or a building of which possession is given or when possession of a structure is given which is found to be unauthorised, that the question of initiating a process for the purpose of rectification of the defect or of obtaining the compensation as outlined in section 7(2) can be started and that also in respect of the properties of which possession has being given. It is clear, therefore, that when the promoter is proceeding to make alterations or additional structures which are in contravention of section 7(1), he is liable to be proceeded against in a Civil Court which alone has got jurisdiction.

26. Mr. Paranjape and Mr. A.G. Parikh who have appeared for the promoters in two of the matters have contended that any contravention of section 7(1) of the Ownership Flats Act cannot be dealt with or remedied except in accordance with the prescribed under section 7(2) of the Act. It is their contention that even if there is a contravention of section 7(1), no complaint of the same can be made in the Civil Court because sub-section (2) of section 7 provides for the remedy which can be regarded as total and complete. This remedy provides not only for the rectification of the defect where these can be done but also provides for the compensation where such rectification can be done. Sub-section (2) of section 7, therefore, is comprehensive enough to take cognizance of every possible contravention of sub-section (1) of section 7 and it must be held to be the intention of the Legislature that the authority mentioned in section 7(2) alone should deal with all the cases that will arise under section 7. According to the arguments of the learned Advocate, no cause of action arises before possession is given; cause of action arise only after possession in given; in the latter case, the procedure which has been prescribed under section 7(2) must be strictly complied with. If within one year the possession is given no defect or unauthorised structure is brought to the notice of the promoter, it cannot be remedied later. The Civil Court will not have, even after the expiry of the period of limitation jurisdiction to deal with these grievances.

27. I refuse to accept this interpretation placed by the learned Advocates on the scope of sub-sections (1) and (2) of the section 7 of the Ownership Flats Act. I refuse, to accept that contravention of section 7(1) though giving rise to a cause of civil action, cannot be made the subject matter of a suit merely because at some later stage when these contravention is completed and perfected, the legislature provided for remedy under section 7(2). Section 7(1) imposes an obligation upon a promoter not to do a particular act. It bestows upon the flat owners a right to see that such a prohibited act is not done. If a duty is breached, a cause of action automatically accrue to the party affected thereby to enforce its right. It was suggested at some stage that if individual grievances can be raised and agitated even before the building is completed or the possession is given, it may make room for multifarious litigation resulting in the delay in the construction and completion of the project for the benefit of all. If, for example, it is interpreted that any alteration made in structure of the building or the construction of any additional structure must necessarily receive the previous consent of each and every person who has agreed to take the flats, then one discordant voice will result in large scale inconvenience, injustice to the other flat owners. I do not see how this argument can be used for the purpose of preventing an aggrieved party from resorting to a Civil Court where a right has accrued to him. Indeed the fear, in my opinion, is unfounded if the promoter acts honestly and abides by the solemn undertakings which he has given in the agreement entered into by him with the purchasers of the flats. If the law says that without the consent of all flat purchasers no alteration in the structure of the building can be made or no additional structure or any additional structure not warranted by the agreements and the plans and the specifications can be constructed, it is not open to the promoters to turn round and say that they would take the consent of only some of the persons and make some alterations. This is in clear defiance of the mandatory language contained in section 7(1). An argument like this for enabling the promoters to make what could be blatantly unauthorised changes in the constructions cannot be countenanced.

28. Similarly after the possession is given but before the property is conveyed to the flat owners or the body corporate representing them, the promoter cannot be allowed to further develop the property in contravention of the obligations contained in the agreements read with the plans and specifications on which those agreements are based. If, of course, the property is conveyed, any act on the part of the promoter would be rank trespass. If, however, the property is not conveyed, it would be a contravention of section 7 of the Ownership Flats Act and though the possession of the property is given, the further unauthorised structure that is taking place will be outside the jurisdiction of the authority mentioned in section 7(2) for reason which I have given in great details earlier. In such a case, the flat owners or the society or the body corporate representing them, as the case may be, is at liberty to approach the Civil Court which alone has jurisdiction to deal with such a situation. The Civil Court examining the facts and circumstances of each case is entitled to and it is indeed obliged to pass such orders as may be necessary to protect the interests of the flat-owners who are normally unorganised. It is for the protection of this class of persons that the Ownership Flats Act has been passed and any interpretation which militates against this intention of the law must be enchewed.

29. It was also suggested that the individual disputes are not contemplated under section 7(2) of the Ownership Flats Act. It is not possible to accept this argument. The agreement is entered into by the promoter with individual flat owner. Each individual flat owner is, therefore, interested in seeing that the construction of the entire building and of the property which forms the subject-matter of the agreement proceeds strictly in accordance with the covenants contained in his agreement and plans and specifications on the basis of which the flat-owners were persuaded to enter into the agreements. In this sense, every flat-owner has got an individual as well as equal right in seeing that the construction of the building and the development of the property as a whole take place strictly in accordance with the agreement, the plans and specifications. Merely because some flat-owners who as already mentioned above, are normally not-owners who as already mentioned above are normally not organised do not assert their right or do not join others in asserting the rights collectively, it does not mean that the promoter can with impunity proceed with the contravention of section 7(1). It is not possible to accept the proposition that the dispute can only be collective dispute.

30. Next it was contented by Mr. Paranjape particularly that what is contemplated under sub-section (2) of section 7 of the Ownership Flats Act is the remedy of the defect in the building or any alternation in the building or any unauthorised change in the construction of the building which has already been constructed, possession of which has been given to the flat owners. A dispute can be raised under sub-section (2) of section 7. If sub-section (2) of section 7 is meant to take care of the disputes which arise as a result of the contravention of section 7(1), then one must also proceed to interpret sub-section (1) in such a manner that it contemplates disputes only about the buildings or the unauthorised alteration of the building. The next step in the argument of Mr. Paranjape was that neither sub-section (1) nor sub-section (2) was meant to cover anything that is done by the promoter apart from the buildings which were agreed to be given in the possession of the flat owners. If, therefore, there is open land, proposed building on which was not the subject-matter of the agreement or the original plans and specifications preceding the agreement, then no dispute could be raised by the flat owners either under sub-section (1) or sub-section (2) of section 7.

31. Mr. Paranjape says that neither the moral nor the legal obligation which can be attributed to the promoter under the provisions of this Act contemplates anything more then giving well -built flats and building to the purchaser of the flats and there is in obligation not to construct any other building on the open space if such construction is permissible by the rules and regulations of a local authority. If such rules and regulations of the local authority permit such construction, it will not be unauthorised construction as mention in the sub-section (2) of section 7.

32. It is impossible to accept this argument. It must be noted that when a person agrees to purchase a flat in a proposed building which is to be constructed according to the plans and specifications of the building which are approved by the local authority as provided in the Act itself, then he is asking for and in getting a promise that the property will be developed strictly in accordance with the plans and specifications approved. It is not correct to say as it was sought to be said, that the plans and specifications of the building must be construed narrowly to mean the actual specifications of the building itself. Whenever the plans and specifications of a building are approved by the local authority, it has done so in the context of several other factors such as keeping certain areas open or developing other property in such a manner as required by the rules and regulations of the local authority. If, therefore, the flat owner has agreed to purchase a flat in a building he has agreed to do so on the promise held out by the promoter to develop the property in accordance with the plans approved by the local authority at the time of the agreement. If, of course, such plans permitted the construction of some buildings, then such a construction would not be naturally in contravention of section 7. If, however, as originally contemplated, the plans and specifications on the basis of which the flat owner agreed to purchase the flat did not contemplate the construction of one or more buildings, then the construction of any other building not mentioned in the original plans and specifications will be clean contrary to the provisions contained in section 7(1). This despite the fact that subsequently the construction of the additional building may be sanctioned by the Municipal Corporation as a special case or upon change in the rules and regulations of that Municipal Corporation. It is one thing to say that a building or a construction is authorised or legal on the basis of prevalent laws, rules and regulations of the local authority, it is quite another thing to say that a building is authorised because it is in accordance with the plan, specifications, agreements referred to in section 7(1). What is permissible under the Bombay Municipal Corporation Act does not necessarily become permissible under the provisions of the Ownership Flats Act. In such cases, the flat purchasers have remedy in the law because a wrong have been committed and since this wrong cannot be remedied under the provisions of section 7(2), the only forum in which this can be agitated is the Civil Court.

33. Before I proceed to summarise the propositions that emerge from the discussion of the law made by me above in the light of the binding propositions laid down by the Division Bench, it is relevant to mention that the Housing Commissioner referred to in sub-section (2) of section 7 is the one appointed under one or the other Housing Boards Act mention therein. The Maharashtra Housing and Area Development Act, 1976, has, with effect from the appointed day, which is 5th December, 1977, repealed the Bombay Housing Board Act and the Madhya Pradesh Housing Board Act under which the Housing Commissioner referred to in section 7(2) of the Act was appointed. The necessary consequence is the abolition of the post of the Housing Commissioner which in turn means that under sub-section (2) of section 7 the Housing Commissioner as one of the authorities for resolving the disputes is no longer available. However, under the said provision the Government may appoint any officer not lower in the rank then a Superintending Engineer to exercise the powers under section 7(2) of the Ownership Flats Acts. In the paper book of Appeal No. 450 of 1985 from Order, a copy of the letter dated 11th June, 1985 addressed by the Under-Secretary of the Government of Maharashtra in the Housing and Special Assistance Division to the promoter of the first plaintiff has been reproduced. This letter mentions that the post of Housing Commissioner is not in existence and the power to resolve the disputes arising under section 7(2) has not been conferred on any other officer by the Government. At this moment, therefore, there is no forum at all available to a person aggrieved within the meaning of section 7(2) of the Ownership Flats Act. It is no solution to this problem to suggest that an aggrieved party may compel the Government to appoint an authority for the purpose of discharging the duties under section 7(2). By the time such a thing is done, the time limit within which the grievances of the flat owners are to be attended to will have passed or will have considerably been spent. Section 5 of the Limitation Act is for obvious reason not applicable. In such situation where a forum provided by the law is totally unavailable, it can be safely stated that the Civil Court will have jurisdiction to decide those disputes which would have been otherwise within the jurisdiction of the authority contemplated by section 7(2). Looked at from either point of view, therefore, all these three suits which have been filed in the City Civil Court are maintainable in that Court and are not barred either expressly or by necessary implication by the provisions contained in section 7 of the Ownership Flats Act.

34. Now I may proceed to summarise the propositions that have emerged from the discussion of law made by me above.

1) Section 7 of the Ownership Flats Act imposes an obligation on the promoter to construct the buildings and otherwise develop the property strictly in accordance with the agreements entered into with the flat purchasers and the plans and specifications upon the basis of which the agreement are entered into.

2) The said provision, therefore, also bestows a corresponding right upon the flat purchaser to compel the discharge of this obligation on the part of the promoter.

3) If a breach of this obligation is noticed in the flats or buildings possession of which has been given to the flat purchaser or to the body corporate representing the flat purchasers, then that breach can be remedied only in the manner provided by sub-section (2) of section 7.

4) If, however, the breach of the obligation or the contravention of section 7(1) is noticed to apprehended before the possession is given, action or its prevention can be brought in a Civil Court; section 7(2) operates only after the possession is given; apprehended contravention is not covered by that provision.

5) Since section 7(2) applied to completed structure, any act towards further contravention even after the possession is given can be prevented by filling a suit in the Civil Court.

6) The contravention contemplated in section 7(1) or in section 7(2) which includes alteration in the structure or the construction of the additional structure is not confined to the construction of the buildings only; this contravention may extend to the construction of any additional structure not in the original plans and specifications as approved by the local authority. Thus if the original plans and specifications on the basis on which the persons were persuaded to purchase the flats disclosed that certain areas will be kept open, it would be a clear contravention of the agreements as well as of law if the promoter proceeds to construct additional structure on those open spaces even with the section of the Municipal Corporation.

7) If, however, the property is conveyed to the flat purchaser or to the body corporate representing them, then naturally the promoter cannot and will not meddle with the property because with an act on his part will amount to an act of trespass making him liable for both civil and criminal action.

35. On the facts of Appeal No. 450 of 1985 from Order we have already seen that the promoter is threatening to construct a new building which was not warranted by the original plans and specifications. No doubt, he is doing this on the strength of the sanction given by the Municipal Corporation, which sanction may also be legal. But construction even in accordance with the legal sanction, if prohibited by section 7(1) of the Ownership Flats Acts, will be illegal, which is patently the situation in this case. The Civil Court, therefore, has jurisdiction in the light of the propositions outlined above to hear and dispose of this suit. The order passed by the Civil Court on 5th June, 1985 dismissing the Notice of Motion in S.C. Suit No. 3226 of 1985 is liable to be set aside and is set aside. That Notice of Motion is restored to the life of the City Civil Court which will hear and dispose of the same in accordance with the law after assuming jurisdiction to try the suit which is undoubtedly possesses. Till the Notice of Motion is taken out for the order and till an order on the same is passed by the City Civil Court, interim injunction granted by this Court will continue.

36. It is noticed that the Civil Revision Application No. 628 of 1980 is strictly not maintainable. While narrating the facts of this case I have noted that the Civil Revision Application was filed against the order dated 21st July, 1980 which continued interim relief only upto a particular date. Even against this order an appeal could lie, which however, had not been filed. Subsequently the Notice of Motion in which the order of 21st July, 1980 had been passed has been allowed to be dismissed. Against that, no appeal has been preferred. This revision application will, therefore, have to be dismissed. Since, however the Court below has proceeded on the basis that it has no jurisdiction to entertain the suit and therefore, to grant any interim relief and since now it is held that the City Civil Court has jurisdiction to entertain the suit, the plaintiffs in Suit No. 3748 of 1980 are at liberty to take out a fresh Notice of Motion for appropriate relief which will be granted by the Court examining the facts and circumstances of that case. The interim order passed by this Court will continue till 30th November, 1985.

37. In a result, Appeal No. 450 of 1985 from order is allowed with costs. The order dated 5th June, 1985 passed by the City Civil Court in the Notice of Motion taken out in S.C. Suit No. 3226 of 1985 is set aside and the said Notice of Motion is restored to the file of the City Civil Court which will hear and dispose of the same in accordance with law. The interim relief granted by the Court shall continue to operate against the defendant till the learned Judge of the City Civil Court passes as appropriate order in the said Notice of Motion.

38. Rule given in City Revision Application No. 628 of 1980 discharge. However, the plaintiff in Civil Suit No. 3748 of 1980 are at liberty to take out a fresh Notice of Motion for appropriate relief on the basis that the City Civil Court has jurisdiction to hear and dispose of their suit. Interim relief granted by this Court during the pendency of the Civil Revision Application shall continue till 30th November, 1985.

39. Appeal No. 159 of 1980 from order is adjourned till 2nd September, 1985 on a motion made by Mr. Parikh, for final orders.


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