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IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2544 OF 2010
Nahalchand Laloochand Pvt. Ltd. ...Appellant
Versus
Panchali Co-operative Housing Society Ltd. ...Respondent
WITH
CIVIL APPEAL NO. 2545 OF 2010
CIVIL APPEAL NO. 2546 OF 2010
CIVIL APPEAL NO. 2547 OF 2010
CIVIL APPEAL NO. 2548 OF 2010
CIVIL APPEAL NO. 2449 OF 2010
CIVIL APPEAL NO. 2456 OF 2010
JUDGEMENT
R.M. Lodha, J.
Of these seven appeals which arise from the judgment dated April 25, 2008 passed by the High Court of Judicature at Bombay (Appellate Jurisdiction), five are at the instance of the original plaintiff and the other two are by the parties, who were not parties to the proceedings before the High Court or the trial court but they are aggrieved by the
findings recorded by the High Court as they claim that these findings are affecting their rights. The facts:
2. Few important questions of law arise in this group of appeals. It will be convenient to formulate the questions after we set out the material facts and the contentions of the parties.The narration of brief facts from S.C. Suit No. 1767 of 2004 will
suffice for consideration of these appeals. Nahalchand Laloochand Private Limited is a Private Limited Company. As a promoter, it developd few properties in Anand Nagar, Dahisar (East), Mumbai and entered into agreements for sale of flats with flat purchasers. The flat purchasers are members of Panchali Co-operative Housing Society Ltd. (for short, `the Society'). The promoter filed a suit before the Bombay City Civil Court, Bombay for permanent injunction restraining the Society (defendant) from encroaching upon, trespassing and/or in any manner disturbing, obstructing, interfering with its possession in respect of 25 parking spaces in the stilt portion of the building. The promoter set up the case in the plaint that under the
agreements for sale it has sold flats in its building and each flat purchaser has right in respect of the flat sold to him and to no other portion. It was averred in the plaint that each flat purchaser has executed a declaration/undertaking in its favour to the effect that stilt parking spaces/open parking spaces shown in the plan exclusively belong to the promoter and that the declarant has no objection to the sale of such spaces by it. The defendant (Society) traversed the claim and set up the plea that the promoter has no right to sell or dispose of spaces in the stilt portion and that the undertakings given by the flat purchasers are not binding being contrary to law and based on such undertakings, the promoter has not acquired any right to sell stilt parking spaces.
3. The parties let in evidence (oral as well as documentary) in support of their respective case.
4. On April 4, 2007, the Presiding Judge, City Civil Court, Greater Bombay dismissed the suit with costs.
5. The promoter preferred first appeal before the High Court which was dismissed on April 25, 2008.
6. For brevity, we shall describe Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 as `MOFA',
Maharashtra Ownership Flats (Regulations of the Promotion of Construction, Etc.) Rules, 1964 as `1964 Rules', Development Control Regulations for Greater Bombay, 1991 as `DCR', Maharashtra Apartment Ownership Act, 1970 as `MAOA', The
Maharashtra Regional and Town Planning Act, 1966 as `MRTP Act' and Transfer of Property Act as `T.P. Act'.
The summary of findings recording by the High Court:
7. While dismissing the appeal, the High Court recorded the following findings :
* The carpet area of any of the 56 flats/tenements in Panchali building is not less than 35 sq. mtrs.
* The parking space either enclosed or unenclosed, covered or open cannot be a `building'.
* It is compulsory requirement to provide for parking spaces under DCR.
* It is obligatory on the part of the promoter to follow the DCR. The agreement signed under MOFA between the developer and the flat purchaser must be in conformity with the model form of agreement (Form V) prescribed by the State Government.
* The model agreement does not contemplate the flat purchasers to separately purchase the stilt parking spaces.
* The rights arising from the agreement signed under the MOFA between the promoter and the flat purchasers cannot be diluted by any contract or an undertaking to the contrary. The undertakings contrary to DCR will not be binding either on the flat purchasers or the Society.
7 The stilt parking space is a common parking area available and the developer is obliged to provide
the same under the DCR when the carpet area of
the flat is 350 sq. meters It is not an additional
premises/area that he is authorized to sell either
to flat purchaser or any outsider. It is part and
parcel of the Society building and it cannot be a
separate premises available for sale. As soon as
the Corporation issues the occupation certificate
and the Society is registered, the building as well
as the stilt parking spaces, open spaces and all
common amenities become the property of the
Society.
7 The stilt parking spaces cannot be put on sale by
the developer as he ceases to have any title on
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the same as soon as the occupation certificate is
issued by the Corporation and it becomes the
property of the society on its registration.
7 The stilt parking spaces cannot be termed as
`open/covered garages' and Clause 2 of the
Model Agreement--Form V provides for sale of
covered/open garage in addition to the flat/shop.
7 It is immaterial if the purchase agreement does
not include stilt car parking spaces in the common
area of amenities. The stilt car parking spaces is
part of the common amenities and it cannot be
treated to be a separate premises/garage which
could be sold by the developer to any of the
members of the society or an outsider.
7 Under MOFA, the developer's right is restricted to
the extent of disposal of flats, shops and/or
garages, which means that any premises which is
included in the Flat Space Index (FSI) can be sold
by the developer/promoter. The stilt parking
space is not included in the FSI nor it is
assessable for the Corporation taxes.
The submissions:
8. Mr. Tanmaya Mehta, learned counsel appearing for
the promoter--Nahalchand Laloochand Private Limited
(appellant) contended that: the stilt parking space being
`garage', as an independent unit is covered by the definition of
`flat' in Section 2(a-1) of MOFA; Section 2(a-1) creates an
artificial definition of `flat' and since in common parlance a
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garage would not be considered as a flat, the legislature
clarified and explained that the term `flat' means...... and
`includes a garage'; as long as premises are covered from the
roof or which have a covered roof and used for the parking of
vehicles, that would qualify as `garage' and since stilt parking
spaces are covered parking spaces and form part of the
building, they fall within the definition of a `garage'; even if stilt
parking spaces do not fall within the definition of `flat', they are
nevertheless sellable as independent units since right to sell
such spaces flows from the bundle of rights associated with
ownership of the property and Sections 10 and 11 of MOFA
read with Rule 9 of 1964 Rules are not exhaustive of the rights
retained by the promoter upon execution of conveyance.
Moreover, if stilt parking spaces are treated as `common areas'
then the proportionate price for the same would have to be paid
by each flat purchaser, irrespective of whether he requires the
parking space or not and there may be situations where the
number of parking spaces will not be equal to the number of
flats and, thus, a person who has paid proportionate price for
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the common parking space may find himself without parking
space, even though he has paid for the same. Lastly, the
learned counsel submitted that in any event the promoter
undertakes that the parking spaces shall be sold only to
persons purchasing flats within the subject layout, i.e. the
purchasers of flats in the seven buildings which form part of the
layout and exist in close proximity.
9. Mr. Pravin K. Samdani, learned senior counsel for
one of the appellants viz., Maharashtra Chamber of Housing
Industry adopted a little different line of argument. He
contended that the provisions of MOFA permit a promoter to
sell garage/open/covered car parking space along with the flat.
His submission is that MOFA does not define the word `garage'
and that word has to be understood and interpreted in
accordance with the plain grammatical meaning and not with
reference to DCR which have been framed under MRTP Act
having different legislative object. As to whether the stilt parking
spaces are `common areas', Mr. Pravin K. Samdani would
submit that MOFA does not list out the `common areas' and
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`limited common areas' while MAOA does define these terms
and parking spaces thereunder are `common areas and
facilities' unless otherwise provided in the declaration by the
owner of the property. Under MOFA, it is for the promoter and
under MAOA, the declarant has to prescribe at the outset the
`common areas' and `limited common areas'. He referred to
Sections 3(2)(h), 4(1)(a)(v), 10 and 11 of the MOFA and
submitted that the promoter must at the outset indicate the
nature of organization (condominium or society or company)
that would be formed at the time of sale of flats and on
formation of such organization, the promoter joins such
organization with a right and power to dispose of remaining flats
that would include the remaining unsold open/covered parking
space/garage and the organization is transferred unsold
open/covered parking spaces only if all the flats have been sold
by the promoter. Learned senior counsel would submit that it is
wholly irrelevant whether stilt/podium/basement/covered car
park attracts FSI or not but the only relevant criterion is
whether the promoter has listed it as a part of common area or
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not and if he has not done so then it is sellable. If he has listed
it, then every flat purchaser is proportionately required to
contribute for the same.
10. In the appeal filed by one Chirag M. Vora, Mr. Sunil
Gupta, learned senior counsel appeared. He argued that MOFA
was enacted and enforced in the year 1963 as a regulatory
piece of legislation and barring the few aspects in respect of
which MOFA makes specific inroads into the rights of the
promoter in the matter of construction, sale, management and
transfer of flats, all other aspects of the right of the promoter
who enters into contract with the flat purchaser remain
unaffected and undisturbed. His submission is that MOFA gives
a wide meaning to the word `flat' so that buildings of all
permutations and combinations may be covered within the
scope of that Act and keeping in mind both the plain language
of Section 2(a-1) as well as the object of that Act, widest
meaning to the word `flat' deserves to be given so that the plain
language is satisfied and also the object of the Act is better
subserved. He adopted the line of interpretation put forth by Mr.
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Tanmaya Mehta that `garage' includes covered parking spaces
and even open parking spaces and is a `flat' in itself under
Section 2(a-1). Relying upon Barnett & Block v. National
Parcels Insurance Company Ltd.1, learned senior counsel
submitted that the minimum requirement of garage is that there
should be roof (even if there are no walls) and for the purpose
of MOFA, not only a covered parking space like a stilt parking
space but also an open parking space is tantamount to
`garage'. According to learned senior counsel the word `garage'
is not to be read simply as another kind of user as contrasted
with residence, office, showroom or shop or godown or industry
or business rather it has to be read in contrast and juxtaposed
against the expression `set of premises'; it is the alternative to
the `set of premises' and not merely to the different users of the
set of premises mentioned in Section 2 (a-1). Mr. Sunil Gupta,
learned senior counsel would submit that each stilt parking
space as well as each open parking space is a `flat' in itself de
hors the other accommodations amounting to `flat' under
Section 2(a-1) of MOFA. In support of his argument, he relied
1
[1942] 1 All E.R. 221
1
upon a decision of this Court in the case of Municipal
Corporation of Greater Bombay & Ors. v. Indian Oil Corporation
Ltd.2. In the alternative, he submitted that if the stilt parking
space or open parking space is not held to be a `flat' under
Section 2 (a-1), still that space/area cannot be treated as part
of `common areas and facilities'. Firstly, he submitted that
common areas and facilities do not include garage/parking
spaces and such parking spaces remain ungoverned by MOFA.
Sections 3 and 4 of MOFA concern with matters pertaining to
`common areas and facilities' but MOFA does not define the
meaning of `common areas and facilities'. Section 3(2)(m)(iii)
leaves it to the promoter to disclose to his flat purchaser the
nature, extent and description of the common areas and
facilities. Section 4, by mentioning a prescribed form of
agreement, rather opened the possibilities for the promoter to
continue to exercise his traditional and pre-Act right to dispose
of such parking spaces according to his choice. The
stilt/covered/open parking spaces do not figure as part of the
common areas and facilities in any project and remain within
2
1991 Suppl. (2) SCC 18
1
the contractual, legal and fundamental rights of the promoter to
dispose of the same in the manner in which he proposes and
his customers accept. Section 16 of MOFA does not override
this right of a promoter. Secondly, learned senior counsel
would submit that the provisions of MOFA must not be made to
depend on the provisions of some other enactment just
because the subject matter of the two legislations appears to be
the same. In this regard, he referred to Maxwell Interpretation of
Statutes, 12th Edition, pages 69 to 70 and G.P. Singh on
Principles of Statutory Interpretations, 8th edition, pages 150 to
160. He, thus, submitted that for the purposes of understanding
the meaning of `flat' under Section 2(a-1) of MOFA, the
provisions of MAOA may be looked at but there would be no
justification in understanding the expression, `flat' defined in
MOFA with reference to MRTP Act, DCR, rules related to FSI
and the provisions concerning property tax in the Bombay
Municipal Corporation Act.
1
11. On the other hand, Mr. Neeraj Kumar Jain, learned
senior counsel and Mr. Umesh Shetty, learned counsel for the
Societies stoutly supported the view of the High Court.
The issues:
12. In view of the contentions outlined above, the
questions that arise for consideration are : (i) whether stand
alone `garage' or in other words `garage' as an independent unit
by itself is a `flat' within the meaning of Section 2(a-1) of
MOFA; (ii) whether stilt parking space/open parking space of a
building regulated by MOFA is a `garage'; (iii) If the answer to
aforesaid questions is in the negative, whether stilt parking
space/open parking space in such building is part of `common
areas and facilities' and (iv) what are the rights of the promoter
vis-`-vis society (of flat purchasers) in respect of open parking
space/s / stilt parking space/s.
13. All these questions have to be considered in the
light of statutory provisions. At this stage we notice some of the
provisions of MOFA. As regards other statutory provisions, we
shall refer to them wherever necessary.
1
Relevant provisions of MOFA:
14. The definition of `flat' in Section 2(a-1) is most vital
and during course of arguments it has been rightly said that
meaning of the word `flat' is the actual fulcrum of MOFA.
Section 2(a-1) reads thus:
"S.2(a-1).- "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 or
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 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."
15. `Promoter' is defined in Section 2© as under :
"S.2©.- `Promoter' means a person and includes a
partnership firm or a body or association of persons,
whether registered or not 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 person who sells
are different persons, the term includes both;"
1
16. The general liabilities of the promoter are set out in
Section 3. To the extent it is relevant to the present case it
reads thus :
"S.3.- (1) Notwithstanding anything in any other law,
a promoter who intends to construct or constructs a
block or building of flats, all or some of which are to be
taken or are taken on ownership basis, shall in all
transactions with persons intending to take or taking
one or more of such flats, be liable to give or produce,
or cause to be given or produced, the information and
the documents hereinafter in this section mentioned.
(2) A promoter, who constructs or intends to
construct such block or building of flats, shall--
(a) make full and true disclosure of the nature
of his title to the land on which the flats are constructed,
or are to be constructed; such title to the land as
aforesaid having been duly certified by an Attorney-at-
law, or by an Advocate of not less than three years
standing, and having been duly entered in the Property
card or extract of Village Forms VI or VII and XII or any
other relevant revenue record;
(b) make full and true disclosure of all
encumbrances on such land, including any right, title,
interest or claim of any party in or over such land;
© to (h) .....
(i) not allow persons to enter into possession
until a completion certificate where such certificate is
required to be given under any law, is duly given by the
local authority (and no person shall take possession of a
flat until such completion certificate has been duly given
by the local authority);
1
(j) to (l) .....
(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;
(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.
(n) sell flat on the basis of the carpet area only:
Provided that, the promoter may separately
charge for the common areas and facilities in proportion
`to the carpet area of the flat'.
Explanation.--For the purposes of this clause, the
carpet area of the flat shall include the area of the
balcony of such flat."
17. Section 4 of MOFA mandates that promoter before
accepting advance payment or deposit shall enter into an
agreement with the prospective flat purchaser and such
agreement shall be registered. It provides as follows:
1
"S.4.- (1) Notwithstanding anything contained in any
other law, a promoter who intends to construct or
constructs a block or building of flats all or some of
which are to be taken or are taken on ownership basis,
shall, before, he accepts any sum of money as advance
payment or deposit, which shall not be more than 20 per
cent of the sale price enter into a written agreement for
sale with each of such persons who are to take or have
taken such flats, and the agreement shall be registered
under the Registration Act, 1908" and such agreement
shall be in the prescribed form.
(1A) The agreement to be prescribed under 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--
(i) if the building is to be constructed,
the liability of the promoter to construct it
according to the plans and specifications
approved by the local authority where such
approval is required under any law for the time
being in force;
(ii) to (v) .....
(vi) the nature, extent and description of
limited common areas and facilities;
(vii) the nature, extent and description of
limited common areas and facilities, if any;
(viii) percentage of undivided interest in
the common areas and facilities appertaining to
the flat agreed to be sold;
1
(ix) statement of the use for which the
flat is intended and restriction on its use, if any;
(x) percentage of undivided interests in
the limited common areas and facilities, if any,
appertaining to the flat agreed to be sold;
(b) ..... "
18. Section 10 casts duty upon the promoter to take
steps for formation of co-operative society or company, as the
case may be. The said provision reads as follows :
"S.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 organization 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.
Provided that, if the promoter fails within the
prescribed period to submit an application to the
Registrar for registration of society in the manner
provided in the Maharashtra Co-operative Societies Act,
1960, the Competent Authority may, upon receiving an
application from the persons who have taken flats from
the said promoter, direct the District Deputy Registrar,
Deputy Registrar or, as the case may be, Assistant
Registrar concerned, to register the society :
1
Provided further that, no such direction to
register any society under the preceding proviso shall
be given to the District Deputy Registrar, Deputy
Registrar or, as the case may be, Assistant Registrar,
by the Competent Authority without first verifying
authenticity of the applicants' request and giving the
concerned promoter a reasonable opportunity of being
heard."
19. There is also obligation cast upon promoter to
execute the documents of title and convey to the co-operative
society or the company or an association of flat
purchasers/apartment owners, right, title and interest in the land
and building by virtue of Section 11 which reads thus:
"S.11.- (1) A promoter shall take all necessary steps to
complete his title and convey to the organization 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 therefore 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 which may be in his possession
or power.
2. It shall be the duty of the promoter to file with the
Competent Authority, within the prescribed period, a
copy of the conveyance executed by him under sub-
section (1).
2
3. If the promoter fails to execute the conveyance in
favour of the co-operative society formed under Section
10 or, as the case may be, the company or the
association of apartment owners, as provided by sub-
section (1), within the prescribed period, the members
of such co-operative society or, as the case may be, the
company or the association of apartment owners may,
make an application, in writing, to the concerned
Competent Authority accompanied by the true copies of
the registered agreements for sale, executed with the
promoter by each individual member of the society or
the company or the association, who have purchased
the flats and all other relevant documents (including the
occupation certificate, if any), for issuing a certificate
that such society, or as the case may be, company or
association, is entitled to have an unilateral deemed
conveyance, executed in their favour and to have it
registered.
(4) .....
(5) ....."
20. Section 16 of MOFA provides that the provisions
contained therein are in addition to the provisions of the T. P.
Act and shall take effect notwithstanding anything to the
contrary contained in the contract.
Re: question nos. (i) and (ii):
(A) What is `flat'?
21. For proper consideration of questions (i) and (ii) as
afore-referred, it is of considerable importance to ascertain the
import and meaning of the term `flat' defined in Section 2(a-1) of
2
MOFA. Rather the answer to the questions presented for
consideration must squarely or substantially depend on what is
a `flat'. Justice G.P. Singh in the `Principles of Statutory
Interpretation' (12th edition, 2010) says that the object of a
definition of a term is to avoid the necessity of frequent
repetitions in describing all the subject matter to which that
word or expression so defined is intended to apply. In other
words, the definition clause is inserted for the purpose of
defining particular subject-matter dealt with and it helps in
revealing the legislative meaning. However, the definitive
clause may itself require interpretation because of ambiguity or
lack of clarity in its language. In the `Construction of Statutes'
by Earl T. Crawford (1989 reprint) at page 362, the following
statement is made: ".......the interpretation clause will control in
the absence of anything else in the act opposing the
interpretation fixed by the clause. Nor should the interpretation
clause be given any wider meaning than is absolutely
necessary. In other words, it should be subjected to a strict
construction."
2
22. The definition of term `flat' in MOFA at the time of
its enactment was this: `flat' means a separate and self-
contained set of premises used or intended to be used for
residence, or office, showroom or shop or godown (and
includes a garage), the premises forming part of a building. By
Maharashtra Act No. 15 of 1971, the definition of `flat' got
amended and the words `and includes an apartment' were
inserted after the word `building'. Thereafter by Maharashtra
Act 36 of 1986, the words `or for carrying on any industry or
business' were inserted after the word `godown' and before the
bracketed portion `(and includes a garage)'.
23. Before we analyze Section 2(a-1), if we ask what
the term `flat' means, apart from the statutory definition, the
reply must be that though it has no uniform meaning but in its
natural and ordinary meaning, `flat' is a self contained set of
premises structurally divided and separately owned for dwelling.
Concise Oxford English Dictionary (10th edition, revised)
explains `flat' --a set of rooms comprising an individual place of
residence within a larger building.
2
24. Webster Comprehensive Dictionary; International
edition (Vol. 1) explains `flat'-- 1. a set of rooms on one floor,
for the occupancy of a family; apartment. 2. A house
containing such flats.
25. In Stroud's Judicial Dictionary (5th edition, Vol. 2), a
reference has been made to the observations of Somervell L.J,
in Murgatroyd v. Tresarden, 63 T.L.R. 62 and it is stated; the
natural meaning of the word `flat' is a separate self-contained
dwelling.
26. In Words and Phrases, Permanent Edition, (West
Publishing Company), Vol. 17, while dealing with the term `flat'
generally, it is stated :
"The word `flat' has no technical, legal meaning, so that
a court can pronounce absolutely one way or the other.
A building is a `flat' or not, and, where the testimony is
conflicting, the question is one of fact".
27. Advanced Law Lexicon by P. Ramanatha Aiyar (3rd
edition, 2005) explains the term `flat', in the following way - `in
the ordinary use of the term a flat is a self-contained set of
rooms, structurally divided and separately owned or let from
2
the rest of a building, which for the most part consists of other
flats separated in like manner'.
28. Reverting back to the definition of the term `flat'
under Section 2(a-1), for a `flat' within the meaning of this
definition clause, the set of premises has to be a separate and
self-contained that forms part of the building which is used or
intended to be used for residence or office, showroom or shop
or godown or for carrying on industry or business.
Separateness of one premises from another premises
physically and also in use or intended use for one of the uses
specified in the definition clause containing the necessary
facilities for self-contained accommodation is sine qua non for a
unit being covered by the definition of `flat' occurring in Section
2(a-1) which includes an `apartment'. In other words, it must
be a separate unit conforming to the description capable of
being used for one of these purposes--namely, residence,
office, showroom, shop, godown or for industrial or business
purposes. Alternative uses in Section 2(a-1) do expand the
ordinary meaning of the term `flat' but nevertheless such
2
premises that form part of building must be separate and self-
contained. A set of premises is called self-contained if it has
the following basic amenities available: (a) sanitary;
(b) washing, bathing and © other conveniences (cooking etc.)
for the use of its occupant/s although as provided in the
explanation appended to Section 2(a-1) such provision may be
common to two or more sets of premises. The nature of
construction and user are important features of this definition
clause. A unit or accommodation to fit in the definition of `flat'
must meet twin-test namely: (i) self contained test and (ii) user
test. The other predominant characteristic is that it must form
part of a building. Crucially, for the relevant premises to be `flat':
7 It must be a separate and self contained premises;
7 It must form part of building;
7 It must be used or intended to be used for any of
the uses namely--residence, office, showroom,
shop, godown or for carrying on any industry or
business.
2
29. In the discussion made above, we have not referred
to the bracketed portion namely - `(and includes a garage)' so
far. What is the meaning and significance of this bracketed
portion? On technical linguistic basis, the bracketed phrase can
only attach to the word preceding it. That may not be happy
construction nor such construction by reading bracketed portion
`(and includes a garage)' with the preceding word `business'
appropriately reflects the meaning of the phrase. The scope of
the bracketed phrase has to be seen in the context of the
definition given to the word `flat' which is true indication of intent
of the legislature. It was suggested by learned senior counsel
and counsel for the promoters that the phrase `and includes a
garage' must be read with the `set of premises' and not with the
user. This does not appear to be a correct reading of the
expression. We are not persuaded to accept such construction.
We think that statutory definition of `flat' must be construed
keeping in view the intent of the legislature and the context of
the statute and, seen thus, the phrase, `and includes a garage'
in the bracket does not bring in `garage' by itself within the
2
meaning of word `flat'. If stand alone `garage' (or a garage by
itself) were intended by the legislature to be a `flat' within the
meaning of Section 2(a-1), that could have been conveniently
conveyed by use of the expression `or garage' after the word
`business' in the same breath as preceding uses. The
bracketed phrase is rather indicative of the legislative intention
to include a `garage' as appurtenant or attachment to a flat
which satisfies the ingredients of Section 2(a-1). To this extent
Mr. Pravin K. Samdani is right in his submission. It is clear to
us that stand alone `garage' or in other words `garage' as an
independent unit by itself is not a `flat' within the meaning of
Section 2(a-1) and we answer question (i) in the negative. The
judgment of Bombay High Court in Dr. K.R. Agarwal Vs.
Balkrishna3 to the extent the expression `or garage' has been
read after the word `godown' in para 5 (clause 2) of the report
does not state the correct legal position in what we have
already said above.
(B) Whether stilt parking space is a garage?
3
AIR 1972 Bombay 343
2
30. The next question is, whether stilt parking space in
a building regulated by MOFA is a `garage'. The term `garage'
has not been defined in MOFA and, therefore, we need to first
find out what is the extent and scope of that term in Section
2(a-1). The general term `garage' is appropriated in English
from the French language and means `keeping under cover' or
`a place for keeping' of wagons as well as automobiles.
Concise Oxford English Dictionary (10th edition, revised)
explains `garage'-- 1 a building for housing a motor vehicle or
vehicles. 2 an establishment which sells fuel or which repairs
and sells motor vehicles.
31. Webster Comprehensive Dictionary, International
edition (Vol. 1) explains the word `garage'--a building in which
motor vehicles are stored and cared for.
32. Words and Phrases, Permanent Edition, (West
Publishing Company), Vol. 17, states that `garage' generally is
a station in which motorcars can be sheltered, stored, repaired,
cleaned, and made ready for use; it is also place for private
storage for motorcars; stable for motor cars.
2
33. The DCR define two expressions `garage-private'
and `garage-public' in Regulations 2(47) and 2(48)
respectively. According to these Regulations, `garage-private'
means a building or a portion thereof designed and used for the
parking of vehicles and `garage-public' means a building or
portion thereof designed other than as a private garage,
operated for gain, designed and/or used for repairing, serving,
hiring, selling or storing or parking motor-driven or other
vehicles. In our view, we must give to the word `garage'
occurring in Section 2(a-1) a meaning that general public or for
that matter a flat purchaser of ordinary prudence would give to
that word or understand by that word. Learned senior counsel
Mr. Sunil Gupta referred to Barnett and Block1 wherein
Atkinson, J. stated as follows:
"Now what is a garage? No evidence was given to
suggest or prove that the word "garage" in the trade had
got any special meaning, and it was agreed to take four
dictionary definitions set out in the agreed statement of
facts. The four definitions were these. From the
SHORTER OXFORD DICTIONARY: "A building for the
storage or refitting of motor vehicles." From the NEW
CENTURY DICTIONARY : "A building for sheltering,
cleaning or repairing motor vehicles. To put or keep in
a garage." From the NEW STANDARD DICTIONARY:
"A building for stabling or storing of motor vehicles of all
3
kinds." From NUTTAL'S STANDARD DICTIONARY :
"A storehouse for motor vehicles." Those are four
definitions from leading dictionaries all containing at any
rate one word in common, and that is "building." As
there is no evidence as to how the general public
understand the word "garage," I suppose one is
entitled to use one's own knowledge. I am inclined to
think that ordinary man in the street does regard a
garage as connoting some sort of a building; how far he
would go I do not know. I do not know whether he
would think that there should be a wall all round it, or
whether it would be sufficient if there were three sides
walled in and a roof. I have one in mind where there is
a row of sheds without any protection in front, which are
commonly spoken of as "garages," but I am going to
apply here the test suggested by counsel for the
insured. He said "A garage is a place where one can
get reasonable protection and shelter for a car." Can I
say that you are getting reasonable protection and
shelter for a car, if there is nothing to protect the car
from above - if there is no roof of any sort? I think the
ordinary man, as counsel for the insurers suggested,
who took a house with a garage, if he came and found
merely an open shed without any roof, would think he
had been swindled, however high the walls might be. I
cannot think that one is entitled to say that it is adequate
or reasonable protection or shelter if there is no roof; but
this is worse than that, though I agree that the walls are
very good here. Wherever you put a car in this yard, in
addition to there being no shelter from above, there will
be no shelter on two sides. That seems to me to be
really conclusive."
He, thus, submitted that even a place with merely a roof may
well be a `garage'. By placing reliance on condition No. 2 in
Form V of 1964 Rules, learned senior counsel submitted that
3
for the purposes of MOFA, even an open parking space is
tantamount to a `garage'.
34. The relevant portion of condition No. 2, Form V
appended to 1964 Rules reads as under:
"2. The Flat Purchaser hereby agrees to purchase
from the Promoter and the Promoter hereby agrees to
sell to the Flat Purchaser one flat No. .......... of the
Type .......... of carpet area admeasuring .......... sq.
meters (which is inclusive of the area of balconies) on
.......... floor as shown in the Floor plan thereof hereto
annexed and marked Annexures D/Shop No. ..........
/covered/open Garage No. .......... in the ..........
Building (hereinafter referred to as "the Flat") for the
price of Rs. .......... including Rs. .......... being the
proportionate price of the common areas and facilities
appurtenant to the premises, the nature extent and
description of the common/limited common areas and
facilities/limited common areas and facilities which are
more particularly described in the Second Schedule
hereunder written. The Flat Purchasers hereby agrees
to pay to that Promoter balance amount of purchase
price of Rs. .......... (Rupees .......... ...............)
having been paid to the Promoter on or before the
execution of his agreement in the following manner."
35. We do not perceive any force in the argument that
open parking space tantamounts to a `garage' within the
meaning of Section 2(a-1) read with condition No. 2 Form V of
1964 Rules. Can a person buying a flat for residence or one of
the uses mentioned in Section 2(a-1) really think that open to
3
the sky or open space for parking motor vehicles is a garage?
We do not think so. The word `garage' may not have uniform
connotation but definitely every space for parking motor
vehicles is not a garage. A roofless erection could not be
described a garage. What is contemplated by a `garage' in
Section 2(a-1) is a place having a roof and walls on three sides.
It does not include an unenclosed or uncovered parking space.
It is true that in condition No. 2, Form V the words
`covered/open garage' have been used but, in our view, the
word `open' used in the Model Form V cannot override the true
meaning of term `garage' in Section 2(a-1). As a matter of fact,
none of the provisions of MOFA regards `open garage'
connoting `flat' or an appurtenant/attachment to a flat. We do
not think undue importance should be given to word `open'
which has loosely been used in condition No. 2, Form V. The
true meaning of the term `garage' in Section 2(a-1), we think, is
not affected by a Model Form V appended to the 1964 Rules.
36. The question then is as to whether the stilted
portion or stilt area of a building is a garage under MOFA. A
3
stilt area is a space above the ground and below the first floor
having columns that support the first floor and the building. It
may be usable as a parking space but we do not think that for
the purposes of MOFA, such portion could be treated as
garage. It was argued that the test accepted by Atkinson, J. in
Barnett & Block1-that a garage is a place where one can get
reasonable protection and shelter for a car--is satisfied by stilt
car parking space and such space is a garage. We are unable
to agree. The test accepted by Atkinson, J. in Barnett and
Block1 also does not support this argument. Even as per that
test a place having roof but offering no shelter or protection on
two sides cannot be a garage. It is worth repeating what
Atkinson,J. said, `....I am inclined to think that the ordinary man
in the street does regard a garage as connoting some sort of
building; how far he would go I do not know. I do not know
whether he would think that there should be a wall all round it,
or whether it would be sufficient if there were three sides walled
in and a roof. I have one in mind where there is row of sheds
without any protection in front, which are commonly spoken of
3
as "garages".' Atkinson,J. applied the test of `reasonable
protection and shelter for car' as was suggested by the counsel
for the insurer while construing the term `garage' in a policy of
insurance. For the purposes of MOFA, and particularly Section
2(a-1), the term `garage' must be considered as would be
understood by a flat purchaser and such person would
contemplate garage which has a roof and wall on three sides.
Our answer to question No. (ii) is, therefore, no.
Re: question no. (iii) - Whether stilt parking spaces are
part of `common areas and facilities'?
37. The High Court has held that the stilt car parking
spaces are part of the common amenities. Is the High Court
right in its view? MOFA does not define nor it explains
`common areas and facilities' though the said phrase is used at
various places in that Act. Mr. Pravin K. Samdani, learned
senior counsel for Maharashtra Chamber of Housing Industry
submitted that following could be termed as part of the
`common areas':
7 15% Recreation Ground (RG) Area;
3
7 Recreational facilities and/or club house on above
RG Areas;
7 Society Office;
7 Security guards cabin;
7 Common passage/lobbies;
7 Stair case;
7 Lift;
7 Terraces over the roof of the building;
7 Landings on each floor;
7 Columns and beams of the building
7 Playgrounds, if any.
According to him, the following could be part of `Limited
Common Areas':
7 Separate lift attached to a particular flat and/or
certain number of flats;
7 Terrace attached to a flat;
7 Servants toilet on each floor, meant for the user
of the flats on that particular floor;
The aforesaid list as suggested by the learned senior counsel,
in our opinion, is not exhaustive. It may not be out of place to
refer to Section 3(f) of MAOA which defines `common areas
and facilities' as follows:
"3(f) "common areas and facilities", unless
otherwise provided in the Declaration or lawful
amendments, thereto means--
(1) the land on which the building is located;
3
(2) the foundations, columns, girders, beams,
supports, main walls, roofs, halls, corridors, lobbies,
stairs, stair-ways, fire-escapes and entrances and exits
of t he buildings;
(3) the basements, cellars, yards, gardens,
parking areas and storage spaces;
(4) the premises for the lodging of janitors or
persons employed for the management of the property;
(5) installations of central services, such as
power, light, gas, hot and cold water, heating,
refrigeration, air conditioning and incinerating;
(6) the elevators, tanks, pumps, motors, fans,
compressors, ducts and in general all apparatus and
installations existing for common use;
(7) such community and commercial facilities
as may be provided for in the Declaration; and
(8) all other parts of the property necessary or
convenient to its existence, maintenance and safety, or
normally in common use;"
It is true that interpretation clause or legislative definition in a
particular statute is meant for the purposes of that statute only
and such legislative definition should not control other statutes
but the parts of the property stated in clauses (2), (3) and (6) of
Section 3(f) as part of `common areas and facilities' for the
purposes of MAOA are what is generally understood by the
expression `common areas and facilities'. This is fortified by the
3
fact that the areas which according to the learned senior
counsel could be termed as `common areas' in a building
regulated by MOFA are substantially included in aforenoticed
clauses of Section 3(f) of MAOA. Looking to the scheme and
object of MOFA, and there being no indication to the contrary,
we find no justifiable reason to exclude parking areas (open to
the sky or stilted portion) from the purview of `common areas
and facilities' under MOFA.
38. It was argued that under MOFA it is for the promoter
to prescribe and define at the outset the `common areas' and
unless it is so done by the promoter, the parking area cannot be
termed as part of `common areas'. We are quite unable to
accept this submission. Can a promoter take common
passage/lobbies or say stair case or RG area out of purview of
`common areas and facilities' by not prescribing or defining the
same in the `common areas'? If the answer to this question is
in negative, which it has to be, this argument must fail. It was
also submitted that by treating open/stilt parking space as part
of `common areas', every flat purchaser will have to bear
3
proportionate cost for the same although he may not be
interested in such parking space at all. We do not think such
consideration is relevant for the consideration of term `common
areas and facilities' in MOFA. It is not necessary that all flat
purchasers must actually use `common areas and facilities' in
its entirety. The relevant test is whether such part of the
building is normally in common use. Then it was submitted that
if a parking space is sold to a flat purchaser, it is to the
exclusion of other flat purchasers and, therefore, logically also it
cannot be part of `common areas'. This submission is founded
on assumption that parking space (open/covered) is a `garage'
and sellable along with the flat. We have, however, held in our
discussion above that open to the sky parking area or stilted
portion usable as parking space is not `garage' within the
meaning of Section 2(a-1) and, therefore, not sellable
independently as a flat or along with a flat. As a matter of fact,
insofar as the promoter is concerned, he is not put to any
prejudice financially by treating open parking space/stilt parking
space as part of `common areas' since he is entitled to charge
3
price for the common areas and facilities from each flat
purchaser in proportion to the carpet area of the flat. MOFA
mandates the promoter to describe `common areas and
facilities' in the advertisement as well as the `agreement' with
the flat purchaser and the promoter is also required to indicate
the price of the flat including the proportionate price of the
`common areas and facilities'. If a promoter does not fully
disclose the common areas and facilities he does so at his own
peril. Stilt parking spaces would not cease to be part of
common areas and facilities merely because the promoter has
not described the same as such in the advertisement and
agreement with the flat purchaser. Although there is some
merit in the contention of the appellant that High Court erred in
placing reliance on the two aspects--namely, that the area of
stilt parking space is not included in the FSI and such area is
not assessable to the corporation taxes - in reaching the
conclusion that stilt parking space is part of `common areas' but
in our view even if these two aspects are excluded, in what we
have discussed above stilt parking space/open parking space
4
of a building regulated by MOFA is nothing but a part of
`common areas' and, accordingly, we answer question no. (iii)
in the affirmative.
Re: question no. (iv) - what are the rights of a promoter
vis-`-vis society in respect of stilt parking spaces?
39. We have now come to the last question namely--
what are the rights of a promoter vis-`-vis society (of flat
purchasers) in respect of stilt parking space/s. It was argued
that the right of the promoter to dispose of the stilt parking
space is a matter falling within the domain of the promoter's
contractual, legal and fundamental right and such right is not
affected. This argument is founded on the premise, firstly, that
stilt parking space is a `flat' by itself within the meaning of
Section 2(a-1) and in the alternative that it is not part of
`common areas'. But we have already held that `stilt parking
space' is not covered by the term `garage' much less a `flat'
and that it is part of `common areas'. As a necessary corollary
to the answers given by us to question nos. (i) to (iii), it must be
held that stilt parking space/s being part of `common areas' of
the building developed by the promoter, the only right that the
4
promoter has, is to charge the cost thereof in proportion to the
carpet area of the flat from each flat purchaser. Such stilt
parking space being neither `flat' under Section 2(a-1) nor
`garage' within the meaning of that provision is not sellable at
all.
40. MOFA was enacted by the Maharashtra Legislature
as it was found that builders/developers/promoters were
indulging in malpractices in the sale and transfer of flats and the
flat purchasers were being exploited. The effect of MOFA may
be summarized as follows. First, every promoter who
constructs or intends to construct block or building of flats in the
area to which MOFA applies has to strictly adhere to the
provisions contained therein, i.e., inter alia, he has to make full
and true disclosure of the nature of his title to the land on
which the flats are constructed and also make disclosure in
respect of the extent of the carpet area of the flat and the
nature, extent and description of the common areas and
facilities when the flats are advertised for sale. Secondly, the
particulars which are set out in Section 4(1A) (a) (i) to (x) have
4
to be incorporated in the agreement with the flat purchaser.
Thirdly, the promoter has to apply to the Registrar for
registration of the organization (co-operative society or
company or condominium) as soon as minimum number of
persons required to form such organization have taken flats. As
regards unsold flats, the promoter has to join such organization
although his right to dispose of unsold flats remains unaffected.
Fourthly, and more importantly, the promoter has to take all
necessary steps to complete his title and convey to the
organization his right, title and interest in the land and building
and execute all relevant documents accordingly. It was argued
by Mr. Tanmaya Mehta, learned counsel for the promoter that
in view of the provisions of MOFA, Section 6 of T.P. Act and
Article 300A of the Constitution, the right of the promoter to
transfer parking spaces is not at all restricted. Relying upon the
decisions of this Court in ICICI Bank Ltd. v. SIDCO Leathers
Ltd. & Ors..4, Karnataka State Financial Corporation v. N.
Narasimahaiah & Ors.5 and Bhikhubhai Vithlabhai Patel & Ors.,
4
(2006) 10 SCC 452
5
(2008) 5 SCC 176
4
v. State of Gujarat & Anr.6, he submitted that the provisions
contained in MOFA must be construed strictly and there is no
provision either express or by necessary implication in MOFA
restricting the sale of stilt or open parking spaces. Mr. Sunil
Gupta also argued that promoter continues to have contractual,
legal and fundamental right to dispose of the stilt/open parking
space in the manner in which he proposes and his consumers
accept. We think this argument does not bear detailed
examination. Suffice it to say that if the argument of learned
senior counsel and counsel for promoter is accepted, the
mischief with which MOFA is obviously intended to deal with
would remain unabated and flat purchasers would continue to
be exploited indirectly by the promoters. In our opinion,
MOFA does restrict the rights of the promoter in the block or
building constructed for flats or to be constructed for flats to
which that Act applies. The promoter has no right to sell any
portion of such building which is not `flat' within the meaning of
Section 2(a-1) and the entire land and building has to be
conveyed to the organisation; the only right remains with the
6
(2008) 4 SCC 144
4
promoter is to sell unsold flats. It is, thus, clear that the
promoter has no right to sell `stilt parking spaces' as these are
neither `flat' nor appurtenant or attachment to a `flat'.
41. In view of the above, it is not at all necessary to deal
with the factual submissions advanced by Mr. Tanmaya Mehta.
Having regard to the answer to question no. (iv), the finding of
the High Court that undertakings are neither binding on the flat
purchasers nor the society also warrants no interference.
42. These appeals, accordingly, fail and are dismissed
with no order as to costs.
(R. M. Lodha)
(A. K. Patnaik)
New Delhi.
August 31, 2010.
4
View the actual judgment from court
IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2544 OF 2010
Nahalchand Laloochand Pvt. Ltd. ...Appellant
Versus
Panchali Co-operative Housing Society Ltd. ...Respondent
WITH
CIVIL APPEAL NO. 2545 OF 2010
CIVIL APPEAL NO. 2546 OF 2010
CIVIL APPEAL NO. 2547 OF 2010
CIVIL APPEAL NO. 2548 OF 2010
CIVIL APPEAL NO. 2449 OF 2010
CIVIL APPEAL NO. 2456 OF 2010
JUDGEMENT
R.M. Lodha, J.
Of these seven appeals which arise from the judgment dated April 25, 2008 passed by the High Court of Judicature at Bombay (Appellate Jurisdiction), five are at the instance of the original plaintiff and the other two are by the parties, who were not parties to the proceedings before the High Court or the trial court but they are aggrieved by the
findings recorded by the High Court as they claim that these findings are affecting their rights. The facts:
2. Few important questions of law arise in this group of appeals. It will be convenient to formulate the questions after we set out the material facts and the contentions of the parties.The narration of brief facts from S.C. Suit No. 1767 of 2004 will
suffice for consideration of these appeals. Nahalchand Laloochand Private Limited is a Private Limited Company. As a promoter, it developd few properties in Anand Nagar, Dahisar (East), Mumbai and entered into agreements for sale of flats with flat purchasers. The flat purchasers are members of Panchali Co-operative Housing Society Ltd. (for short, `the Society'). The promoter filed a suit before the Bombay City Civil Court, Bombay for permanent injunction restraining the Society (defendant) from encroaching upon, trespassing and/or in any manner disturbing, obstructing, interfering with its possession in respect of 25 parking spaces in the stilt portion of the building. The promoter set up the case in the plaint that under the
agreements for sale it has sold flats in its building and each flat purchaser has right in respect of the flat sold to him and to no other portion. It was averred in the plaint that each flat purchaser has executed a declaration/undertaking in its favour to the effect that stilt parking spaces/open parking spaces shown in the plan exclusively belong to the promoter and that the declarant has no objection to the sale of such spaces by it. The defendant (Society) traversed the claim and set up the plea that the promoter has no right to sell or dispose of spaces in the stilt portion and that the undertakings given by the flat purchasers are not binding being contrary to law and based on such undertakings, the promoter has not acquired any right to sell stilt parking spaces.
3. The parties let in evidence (oral as well as documentary) in support of their respective case.
4. On April 4, 2007, the Presiding Judge, City Civil Court, Greater Bombay dismissed the suit with costs.
5. The promoter preferred first appeal before the High Court which was dismissed on April 25, 2008.
6. For brevity, we shall describe Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 as `MOFA',
Maharashtra Ownership Flats (Regulations of the Promotion of Construction, Etc.) Rules, 1964 as `1964 Rules', Development Control Regulations for Greater Bombay, 1991 as `DCR', Maharashtra Apartment Ownership Act, 1970 as `MAOA', The
Maharashtra Regional and Town Planning Act, 1966 as `MRTP Act' and Transfer of Property Act as `T.P. Act'.
The summary of findings recording by the High Court:
7. While dismissing the appeal, the High Court recorded the following findings :
* The carpet area of any of the 56 flats/tenements in Panchali building is not less than 35 sq. mtrs.
* The parking space either enclosed or unenclosed, covered or open cannot be a `building'.
* It is compulsory requirement to provide for parking spaces under DCR.
* It is obligatory on the part of the promoter to follow the DCR. The agreement signed under MOFA between the developer and the flat purchaser must be in conformity with the model form of agreement (Form V) prescribed by the State Government.
* The model agreement does not contemplate the flat purchasers to separately purchase the stilt parking spaces.
* The rights arising from the agreement signed under the MOFA between the promoter and the flat purchasers cannot be diluted by any contract or an undertaking to the contrary. The undertakings contrary to DCR will not be binding either on the flat purchasers or the Society.
7 The stilt parking space is a common parking area available and the developer is obliged to provide
the same under the DCR when the carpet area of
the flat is 350 sq. meters It is not an additional
premises/area that he is authorized to sell either
to flat purchaser or any outsider. It is part and
parcel of the Society building and it cannot be a
separate premises available for sale. As soon as
the Corporation issues the occupation certificate
and the Society is registered, the building as well
as the stilt parking spaces, open spaces and all
common amenities become the property of the
Society.
7 The stilt parking spaces cannot be put on sale by
the developer as he ceases to have any title on
5
the same as soon as the occupation certificate is
issued by the Corporation and it becomes the
property of the society on its registration.
7 The stilt parking spaces cannot be termed as
`open/covered garages' and Clause 2 of the
Model Agreement--Form V provides for sale of
covered/open garage in addition to the flat/shop.
7 It is immaterial if the purchase agreement does
not include stilt car parking spaces in the common
area of amenities. The stilt car parking spaces is
part of the common amenities and it cannot be
treated to be a separate premises/garage which
could be sold by the developer to any of the
members of the society or an outsider.
7 Under MOFA, the developer's right is restricted to
the extent of disposal of flats, shops and/or
garages, which means that any premises which is
included in the Flat Space Index (FSI) can be sold
by the developer/promoter. The stilt parking
space is not included in the FSI nor it is
assessable for the Corporation taxes.
The submissions:
8. Mr. Tanmaya Mehta, learned counsel appearing for
the promoter--Nahalchand Laloochand Private Limited
(appellant) contended that: the stilt parking space being
`garage', as an independent unit is covered by the definition of
`flat' in Section 2(a-1) of MOFA; Section 2(a-1) creates an
artificial definition of `flat' and since in common parlance a
6
garage would not be considered as a flat, the legislature
clarified and explained that the term `flat' means...... and
`includes a garage'; as long as premises are covered from the
roof or which have a covered roof and used for the parking of
vehicles, that would qualify as `garage' and since stilt parking
spaces are covered parking spaces and form part of the
building, they fall within the definition of a `garage'; even if stilt
parking spaces do not fall within the definition of `flat', they are
nevertheless sellable as independent units since right to sell
such spaces flows from the bundle of rights associated with
ownership of the property and Sections 10 and 11 of MOFA
read with Rule 9 of 1964 Rules are not exhaustive of the rights
retained by the promoter upon execution of conveyance.
Moreover, if stilt parking spaces are treated as `common areas'
then the proportionate price for the same would have to be paid
by each flat purchaser, irrespective of whether he requires the
parking space or not and there may be situations where the
number of parking spaces will not be equal to the number of
flats and, thus, a person who has paid proportionate price for
7
the common parking space may find himself without parking
space, even though he has paid for the same. Lastly, the
learned counsel submitted that in any event the promoter
undertakes that the parking spaces shall be sold only to
persons purchasing flats within the subject layout, i.e. the
purchasers of flats in the seven buildings which form part of the
layout and exist in close proximity.
9. Mr. Pravin K. Samdani, learned senior counsel for
one of the appellants viz., Maharashtra Chamber of Housing
Industry adopted a little different line of argument. He
contended that the provisions of MOFA permit a promoter to
sell garage/open/covered car parking space along with the flat.
His submission is that MOFA does not define the word `garage'
and that word has to be understood and interpreted in
accordance with the plain grammatical meaning and not with
reference to DCR which have been framed under MRTP Act
having different legislative object. As to whether the stilt parking
spaces are `common areas', Mr. Pravin K. Samdani would
submit that MOFA does not list out the `common areas' and
8
`limited common areas' while MAOA does define these terms
and parking spaces thereunder are `common areas and
facilities' unless otherwise provided in the declaration by the
owner of the property. Under MOFA, it is for the promoter and
under MAOA, the declarant has to prescribe at the outset the
`common areas' and `limited common areas'. He referred to
Sections 3(2)(h), 4(1)(a)(v), 10 and 11 of the MOFA and
submitted that the promoter must at the outset indicate the
nature of organization (condominium or society or company)
that would be formed at the time of sale of flats and on
formation of such organization, the promoter joins such
organization with a right and power to dispose of remaining flats
that would include the remaining unsold open/covered parking
space/garage and the organization is transferred unsold
open/covered parking spaces only if all the flats have been sold
by the promoter. Learned senior counsel would submit that it is
wholly irrelevant whether stilt/podium/basement/covered car
park attracts FSI or not but the only relevant criterion is
whether the promoter has listed it as a part of common area or
9
not and if he has not done so then it is sellable. If he has listed
it, then every flat purchaser is proportionately required to
contribute for the same.
10. In the appeal filed by one Chirag M. Vora, Mr. Sunil
Gupta, learned senior counsel appeared. He argued that MOFA
was enacted and enforced in the year 1963 as a regulatory
piece of legislation and barring the few aspects in respect of
which MOFA makes specific inroads into the rights of the
promoter in the matter of construction, sale, management and
transfer of flats, all other aspects of the right of the promoter
who enters into contract with the flat purchaser remain
unaffected and undisturbed. His submission is that MOFA gives
a wide meaning to the word `flat' so that buildings of all
permutations and combinations may be covered within the
scope of that Act and keeping in mind both the plain language
of Section 2(a-1) as well as the object of that Act, widest
meaning to the word `flat' deserves to be given so that the plain
language is satisfied and also the object of the Act is better
subserved. He adopted the line of interpretation put forth by Mr.
1
Tanmaya Mehta that `garage' includes covered parking spaces
and even open parking spaces and is a `flat' in itself under
Section 2(a-1). Relying upon Barnett & Block v. National
Parcels Insurance Company Ltd.1, learned senior counsel
submitted that the minimum requirement of garage is that there
should be roof (even if there are no walls) and for the purpose
of MOFA, not only a covered parking space like a stilt parking
space but also an open parking space is tantamount to
`garage'. According to learned senior counsel the word `garage'
is not to be read simply as another kind of user as contrasted
with residence, office, showroom or shop or godown or industry
or business rather it has to be read in contrast and juxtaposed
against the expression `set of premises'; it is the alternative to
the `set of premises' and not merely to the different users of the
set of premises mentioned in Section 2 (a-1). Mr. Sunil Gupta,
learned senior counsel would submit that each stilt parking
space as well as each open parking space is a `flat' in itself de
hors the other accommodations amounting to `flat' under
Section 2(a-1) of MOFA. In support of his argument, he relied
1
[1942] 1 All E.R. 221
1
upon a decision of this Court in the case of Municipal
Corporation of Greater Bombay & Ors. v. Indian Oil Corporation
Ltd.2. In the alternative, he submitted that if the stilt parking
space or open parking space is not held to be a `flat' under
Section 2 (a-1), still that space/area cannot be treated as part
of `common areas and facilities'. Firstly, he submitted that
common areas and facilities do not include garage/parking
spaces and such parking spaces remain ungoverned by MOFA.
Sections 3 and 4 of MOFA concern with matters pertaining to
`common areas and facilities' but MOFA does not define the
meaning of `common areas and facilities'. Section 3(2)(m)(iii)
leaves it to the promoter to disclose to his flat purchaser the
nature, extent and description of the common areas and
facilities. Section 4, by mentioning a prescribed form of
agreement, rather opened the possibilities for the promoter to
continue to exercise his traditional and pre-Act right to dispose
of such parking spaces according to his choice. The
stilt/covered/open parking spaces do not figure as part of the
common areas and facilities in any project and remain within
2
1991 Suppl. (2) SCC 18
1
the contractual, legal and fundamental rights of the promoter to
dispose of the same in the manner in which he proposes and
his customers accept. Section 16 of MOFA does not override
this right of a promoter. Secondly, learned senior counsel
would submit that the provisions of MOFA must not be made to
depend on the provisions of some other enactment just
because the subject matter of the two legislations appears to be
the same. In this regard, he referred to Maxwell Interpretation of
Statutes, 12th Edition, pages 69 to 70 and G.P. Singh on
Principles of Statutory Interpretations, 8th edition, pages 150 to
160. He, thus, submitted that for the purposes of understanding
the meaning of `flat' under Section 2(a-1) of MOFA, the
provisions of MAOA may be looked at but there would be no
justification in understanding the expression, `flat' defined in
MOFA with reference to MRTP Act, DCR, rules related to FSI
and the provisions concerning property tax in the Bombay
Municipal Corporation Act.
1
11. On the other hand, Mr. Neeraj Kumar Jain, learned
senior counsel and Mr. Umesh Shetty, learned counsel for the
Societies stoutly supported the view of the High Court.
The issues:
12. In view of the contentions outlined above, the
questions that arise for consideration are : (i) whether stand
alone `garage' or in other words `garage' as an independent unit
by itself is a `flat' within the meaning of Section 2(a-1) of
MOFA; (ii) whether stilt parking space/open parking space of a
building regulated by MOFA is a `garage'; (iii) If the answer to
aforesaid questions is in the negative, whether stilt parking
space/open parking space in such building is part of `common
areas and facilities' and (iv) what are the rights of the promoter
vis-`-vis society (of flat purchasers) in respect of open parking
space/s / stilt parking space/s.
13. All these questions have to be considered in the
light of statutory provisions. At this stage we notice some of the
provisions of MOFA. As regards other statutory provisions, we
shall refer to them wherever necessary.
1
Relevant provisions of MOFA:
14. The definition of `flat' in Section 2(a-1) is most vital
and during course of arguments it has been rightly said that
meaning of the word `flat' is the actual fulcrum of MOFA.
Section 2(a-1) reads thus:
"S.2(a-1).- "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 or
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 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."
15. `Promoter' is defined in Section 2© as under :
"S.2©.- `Promoter' means a person and includes a
partnership firm or a body or association of persons,
whether registered or not 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 person who sells
are different persons, the term includes both;"
1
16. The general liabilities of the promoter are set out in
Section 3. To the extent it is relevant to the present case it
reads thus :
"S.3.- (1) Notwithstanding anything in any other law,
a promoter who intends to construct or constructs a
block or building of flats, all or some of which are to be
taken or are taken on ownership basis, shall in all
transactions with persons intending to take or taking
one or more of such flats, be liable to give or produce,
or cause to be given or produced, the information and
the documents hereinafter in this section mentioned.
(2) A promoter, who constructs or intends to
construct such block or building of flats, shall--
(a) make full and true disclosure of the nature
of his title to the land on which the flats are constructed,
or are to be constructed; such title to the land as
aforesaid having been duly certified by an Attorney-at-
law, or by an Advocate of not less than three years
standing, and having been duly entered in the Property
card or extract of Village Forms VI or VII and XII or any
other relevant revenue record;
(b) make full and true disclosure of all
encumbrances on such land, including any right, title,
interest or claim of any party in or over such land;
© to (h) .....
(i) not allow persons to enter into possession
until a completion certificate where such certificate is
required to be given under any law, is duly given by the
local authority (and no person shall take possession of a
flat until such completion certificate has been duly given
by the local authority);
1
(j) to (l) .....
(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;
(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.
(n) sell flat on the basis of the carpet area only:
Provided that, the promoter may separately
charge for the common areas and facilities in proportion
`to the carpet area of the flat'.
Explanation.--For the purposes of this clause, the
carpet area of the flat shall include the area of the
balcony of such flat."
17. Section 4 of MOFA mandates that promoter before
accepting advance payment or deposit shall enter into an
agreement with the prospective flat purchaser and such
agreement shall be registered. It provides as follows:
1
"S.4.- (1) Notwithstanding anything contained in any
other law, a promoter who intends to construct or
constructs a block or building of flats all or some of
which are to be taken or are taken on ownership basis,
shall, before, he accepts any sum of money as advance
payment or deposit, which shall not be more than 20 per
cent of the sale price enter into a written agreement for
sale with each of such persons who are to take or have
taken such flats, and the agreement shall be registered
under the Registration Act, 1908" and such agreement
shall be in the prescribed form.
(1A) The agreement to be prescribed under 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--
(i) if the building is to be constructed,
the liability of the promoter to construct it
according to the plans and specifications
approved by the local authority where such
approval is required under any law for the time
being in force;
(ii) to (v) .....
(vi) the nature, extent and description of
limited common areas and facilities;
(vii) the nature, extent and description of
limited common areas and facilities, if any;
(viii) percentage of undivided interest in
the common areas and facilities appertaining to
the flat agreed to be sold;
1
(ix) statement of the use for which the
flat is intended and restriction on its use, if any;
(x) percentage of undivided interests in
the limited common areas and facilities, if any,
appertaining to the flat agreed to be sold;
(b) ..... "
18. Section 10 casts duty upon the promoter to take
steps for formation of co-operative society or company, as the
case may be. The said provision reads as follows :
"S.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 organization 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.
Provided that, if the promoter fails within the
prescribed period to submit an application to the
Registrar for registration of society in the manner
provided in the Maharashtra Co-operative Societies Act,
1960, the Competent Authority may, upon receiving an
application from the persons who have taken flats from
the said promoter, direct the District Deputy Registrar,
Deputy Registrar or, as the case may be, Assistant
Registrar concerned, to register the society :
1
Provided further that, no such direction to
register any society under the preceding proviso shall
be given to the District Deputy Registrar, Deputy
Registrar or, as the case may be, Assistant Registrar,
by the Competent Authority without first verifying
authenticity of the applicants' request and giving the
concerned promoter a reasonable opportunity of being
heard."
19. There is also obligation cast upon promoter to
execute the documents of title and convey to the co-operative
society or the company or an association of flat
purchasers/apartment owners, right, title and interest in the land
and building by virtue of Section 11 which reads thus:
"S.11.- (1) A promoter shall take all necessary steps to
complete his title and convey to the organization 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 therefore 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 which may be in his possession
or power.
2. It shall be the duty of the promoter to file with the
Competent Authority, within the prescribed period, a
copy of the conveyance executed by him under sub-
section (1).
2
3. If the promoter fails to execute the conveyance in
favour of the co-operative society formed under Section
10 or, as the case may be, the company or the
association of apartment owners, as provided by sub-
section (1), within the prescribed period, the members
of such co-operative society or, as the case may be, the
company or the association of apartment owners may,
make an application, in writing, to the concerned
Competent Authority accompanied by the true copies of
the registered agreements for sale, executed with the
promoter by each individual member of the society or
the company or the association, who have purchased
the flats and all other relevant documents (including the
occupation certificate, if any), for issuing a certificate
that such society, or as the case may be, company or
association, is entitled to have an unilateral deemed
conveyance, executed in their favour and to have it
registered.
(4) .....
(5) ....."
20. Section 16 of MOFA provides that the provisions
contained therein are in addition to the provisions of the T. P.
Act and shall take effect notwithstanding anything to the
contrary contained in the contract.
Re: question nos. (i) and (ii):
(A) What is `flat'?
21. For proper consideration of questions (i) and (ii) as
afore-referred, it is of considerable importance to ascertain the
import and meaning of the term `flat' defined in Section 2(a-1) of
2
MOFA. Rather the answer to the questions presented for
consideration must squarely or substantially depend on what is
a `flat'. Justice G.P. Singh in the `Principles of Statutory
Interpretation' (12th edition, 2010) says that the object of a
definition of a term is to avoid the necessity of frequent
repetitions in describing all the subject matter to which that
word or expression so defined is intended to apply. In other
words, the definition clause is inserted for the purpose of
defining particular subject-matter dealt with and it helps in
revealing the legislative meaning. However, the definitive
clause may itself require interpretation because of ambiguity or
lack of clarity in its language. In the `Construction of Statutes'
by Earl T. Crawford (1989 reprint) at page 362, the following
statement is made: ".......the interpretation clause will control in
the absence of anything else in the act opposing the
interpretation fixed by the clause. Nor should the interpretation
clause be given any wider meaning than is absolutely
necessary. In other words, it should be subjected to a strict
construction."
2
22. The definition of term `flat' in MOFA at the time of
its enactment was this: `flat' means a separate and self-
contained set of premises used or intended to be used for
residence, or office, showroom or shop or godown (and
includes a garage), the premises forming part of a building. By
Maharashtra Act No. 15 of 1971, the definition of `flat' got
amended and the words `and includes an apartment' were
inserted after the word `building'. Thereafter by Maharashtra
Act 36 of 1986, the words `or for carrying on any industry or
business' were inserted after the word `godown' and before the
bracketed portion `(and includes a garage)'.
23. Before we analyze Section 2(a-1), if we ask what
the term `flat' means, apart from the statutory definition, the
reply must be that though it has no uniform meaning but in its
natural and ordinary meaning, `flat' is a self contained set of
premises structurally divided and separately owned for dwelling.
Concise Oxford English Dictionary (10th edition, revised)
explains `flat' --a set of rooms comprising an individual place of
residence within a larger building.
2
24. Webster Comprehensive Dictionary; International
edition (Vol. 1) explains `flat'-- 1. a set of rooms on one floor,
for the occupancy of a family; apartment. 2. A house
containing such flats.
25. In Stroud's Judicial Dictionary (5th edition, Vol. 2), a
reference has been made to the observations of Somervell L.J,
in Murgatroyd v. Tresarden, 63 T.L.R. 62 and it is stated; the
natural meaning of the word `flat' is a separate self-contained
dwelling.
26. In Words and Phrases, Permanent Edition, (West
Publishing Company), Vol. 17, while dealing with the term `flat'
generally, it is stated :
"The word `flat' has no technical, legal meaning, so that
a court can pronounce absolutely one way or the other.
A building is a `flat' or not, and, where the testimony is
conflicting, the question is one of fact".
27. Advanced Law Lexicon by P. Ramanatha Aiyar (3rd
edition, 2005) explains the term `flat', in the following way - `in
the ordinary use of the term a flat is a self-contained set of
rooms, structurally divided and separately owned or let from
2
the rest of a building, which for the most part consists of other
flats separated in like manner'.
28. Reverting back to the definition of the term `flat'
under Section 2(a-1), for a `flat' within the meaning of this
definition clause, the set of premises has to be a separate and
self-contained that forms part of the building which is used or
intended to be used for residence or office, showroom or shop
or godown or for carrying on industry or business.
Separateness of one premises from another premises
physically and also in use or intended use for one of the uses
specified in the definition clause containing the necessary
facilities for self-contained accommodation is sine qua non for a
unit being covered by the definition of `flat' occurring in Section
2(a-1) which includes an `apartment'. In other words, it must
be a separate unit conforming to the description capable of
being used for one of these purposes--namely, residence,
office, showroom, shop, godown or for industrial or business
purposes. Alternative uses in Section 2(a-1) do expand the
ordinary meaning of the term `flat' but nevertheless such
2
premises that form part of building must be separate and self-
contained. A set of premises is called self-contained if it has
the following basic amenities available: (a) sanitary;
(b) washing, bathing and © other conveniences (cooking etc.)
for the use of its occupant/s although as provided in the
explanation appended to Section 2(a-1) such provision may be
common to two or more sets of premises. The nature of
construction and user are important features of this definition
clause. A unit or accommodation to fit in the definition of `flat'
must meet twin-test namely: (i) self contained test and (ii) user
test. The other predominant characteristic is that it must form
part of a building. Crucially, for the relevant premises to be `flat':
7 It must be a separate and self contained premises;
7 It must form part of building;
7 It must be used or intended to be used for any of
the uses namely--residence, office, showroom,
shop, godown or for carrying on any industry or
business.
2
29. In the discussion made above, we have not referred
to the bracketed portion namely - `(and includes a garage)' so
far. What is the meaning and significance of this bracketed
portion? On technical linguistic basis, the bracketed phrase can
only attach to the word preceding it. That may not be happy
construction nor such construction by reading bracketed portion
`(and includes a garage)' with the preceding word `business'
appropriately reflects the meaning of the phrase. The scope of
the bracketed phrase has to be seen in the context of the
definition given to the word `flat' which is true indication of intent
of the legislature. It was suggested by learned senior counsel
and counsel for the promoters that the phrase `and includes a
garage' must be read with the `set of premises' and not with the
user. This does not appear to be a correct reading of the
expression. We are not persuaded to accept such construction.
We think that statutory definition of `flat' must be construed
keeping in view the intent of the legislature and the context of
the statute and, seen thus, the phrase, `and includes a garage'
in the bracket does not bring in `garage' by itself within the
2
meaning of word `flat'. If stand alone `garage' (or a garage by
itself) were intended by the legislature to be a `flat' within the
meaning of Section 2(a-1), that could have been conveniently
conveyed by use of the expression `or garage' after the word
`business' in the same breath as preceding uses. The
bracketed phrase is rather indicative of the legislative intention
to include a `garage' as appurtenant or attachment to a flat
which satisfies the ingredients of Section 2(a-1). To this extent
Mr. Pravin K. Samdani is right in his submission. It is clear to
us that stand alone `garage' or in other words `garage' as an
independent unit by itself is not a `flat' within the meaning of
Section 2(a-1) and we answer question (i) in the negative. The
judgment of Bombay High Court in Dr. K.R. Agarwal Vs.
Balkrishna3 to the extent the expression `or garage' has been
read after the word `godown' in para 5 (clause 2) of the report
does not state the correct legal position in what we have
already said above.
(B) Whether stilt parking space is a garage?
3
AIR 1972 Bombay 343
2
30. The next question is, whether stilt parking space in
a building regulated by MOFA is a `garage'. The term `garage'
has not been defined in MOFA and, therefore, we need to first
find out what is the extent and scope of that term in Section
2(a-1). The general term `garage' is appropriated in English
from the French language and means `keeping under cover' or
`a place for keeping' of wagons as well as automobiles.
Concise Oxford English Dictionary (10th edition, revised)
explains `garage'-- 1 a building for housing a motor vehicle or
vehicles. 2 an establishment which sells fuel or which repairs
and sells motor vehicles.
31. Webster Comprehensive Dictionary, International
edition (Vol. 1) explains the word `garage'--a building in which
motor vehicles are stored and cared for.
32. Words and Phrases, Permanent Edition, (West
Publishing Company), Vol. 17, states that `garage' generally is
a station in which motorcars can be sheltered, stored, repaired,
cleaned, and made ready for use; it is also place for private
storage for motorcars; stable for motor cars.
2
33. The DCR define two expressions `garage-private'
and `garage-public' in Regulations 2(47) and 2(48)
respectively. According to these Regulations, `garage-private'
means a building or a portion thereof designed and used for the
parking of vehicles and `garage-public' means a building or
portion thereof designed other than as a private garage,
operated for gain, designed and/or used for repairing, serving,
hiring, selling or storing or parking motor-driven or other
vehicles. In our view, we must give to the word `garage'
occurring in Section 2(a-1) a meaning that general public or for
that matter a flat purchaser of ordinary prudence would give to
that word or understand by that word. Learned senior counsel
Mr. Sunil Gupta referred to Barnett and Block1 wherein
Atkinson, J. stated as follows:
"Now what is a garage? No evidence was given to
suggest or prove that the word "garage" in the trade had
got any special meaning, and it was agreed to take four
dictionary definitions set out in the agreed statement of
facts. The four definitions were these. From the
SHORTER OXFORD DICTIONARY: "A building for the
storage or refitting of motor vehicles." From the NEW
CENTURY DICTIONARY : "A building for sheltering,
cleaning or repairing motor vehicles. To put or keep in
a garage." From the NEW STANDARD DICTIONARY:
"A building for stabling or storing of motor vehicles of all
3
kinds." From NUTTAL'S STANDARD DICTIONARY :
"A storehouse for motor vehicles." Those are four
definitions from leading dictionaries all containing at any
rate one word in common, and that is "building." As
there is no evidence as to how the general public
understand the word "garage," I suppose one is
entitled to use one's own knowledge. I am inclined to
think that ordinary man in the street does regard a
garage as connoting some sort of a building; how far he
would go I do not know. I do not know whether he
would think that there should be a wall all round it, or
whether it would be sufficient if there were three sides
walled in and a roof. I have one in mind where there is
a row of sheds without any protection in front, which are
commonly spoken of as "garages," but I am going to
apply here the test suggested by counsel for the
insured. He said "A garage is a place where one can
get reasonable protection and shelter for a car." Can I
say that you are getting reasonable protection and
shelter for a car, if there is nothing to protect the car
from above - if there is no roof of any sort? I think the
ordinary man, as counsel for the insurers suggested,
who took a house with a garage, if he came and found
merely an open shed without any roof, would think he
had been swindled, however high the walls might be. I
cannot think that one is entitled to say that it is adequate
or reasonable protection or shelter if there is no roof; but
this is worse than that, though I agree that the walls are
very good here. Wherever you put a car in this yard, in
addition to there being no shelter from above, there will
be no shelter on two sides. That seems to me to be
really conclusive."
He, thus, submitted that even a place with merely a roof may
well be a `garage'. By placing reliance on condition No. 2 in
Form V of 1964 Rules, learned senior counsel submitted that
3
for the purposes of MOFA, even an open parking space is
tantamount to a `garage'.
34. The relevant portion of condition No. 2, Form V
appended to 1964 Rules reads as under:
"2. The Flat Purchaser hereby agrees to purchase
from the Promoter and the Promoter hereby agrees to
sell to the Flat Purchaser one flat No. .......... of the
Type .......... of carpet area admeasuring .......... sq.
meters (which is inclusive of the area of balconies) on
.......... floor as shown in the Floor plan thereof hereto
annexed and marked Annexures D/Shop No. ..........
/covered/open Garage No. .......... in the ..........
Building (hereinafter referred to as "the Flat") for the
price of Rs. .......... including Rs. .......... being the
proportionate price of the common areas and facilities
appurtenant to the premises, the nature extent and
description of the common/limited common areas and
facilities/limited common areas and facilities which are
more particularly described in the Second Schedule
hereunder written. The Flat Purchasers hereby agrees
to pay to that Promoter balance amount of purchase
price of Rs. .......... (Rupees .......... ...............)
having been paid to the Promoter on or before the
execution of his agreement in the following manner."
35. We do not perceive any force in the argument that
open parking space tantamounts to a `garage' within the
meaning of Section 2(a-1) read with condition No. 2 Form V of
1964 Rules. Can a person buying a flat for residence or one of
the uses mentioned in Section 2(a-1) really think that open to
3
the sky or open space for parking motor vehicles is a garage?
We do not think so. The word `garage' may not have uniform
connotation but definitely every space for parking motor
vehicles is not a garage. A roofless erection could not be
described a garage. What is contemplated by a `garage' in
Section 2(a-1) is a place having a roof and walls on three sides.
It does not include an unenclosed or uncovered parking space.
It is true that in condition No. 2, Form V the words
`covered/open garage' have been used but, in our view, the
word `open' used in the Model Form V cannot override the true
meaning of term `garage' in Section 2(a-1). As a matter of fact,
none of the provisions of MOFA regards `open garage'
connoting `flat' or an appurtenant/attachment to a flat. We do
not think undue importance should be given to word `open'
which has loosely been used in condition No. 2, Form V. The
true meaning of the term `garage' in Section 2(a-1), we think, is
not affected by a Model Form V appended to the 1964 Rules.
36. The question then is as to whether the stilted
portion or stilt area of a building is a garage under MOFA. A
3
stilt area is a space above the ground and below the first floor
having columns that support the first floor and the building. It
may be usable as a parking space but we do not think that for
the purposes of MOFA, such portion could be treated as
garage. It was argued that the test accepted by Atkinson, J. in
Barnett & Block1-that a garage is a place where one can get
reasonable protection and shelter for a car--is satisfied by stilt
car parking space and such space is a garage. We are unable
to agree. The test accepted by Atkinson, J. in Barnett and
Block1 also does not support this argument. Even as per that
test a place having roof but offering no shelter or protection on
two sides cannot be a garage. It is worth repeating what
Atkinson,J. said, `....I am inclined to think that the ordinary man
in the street does regard a garage as connoting some sort of
building; how far he would go I do not know. I do not know
whether he would think that there should be a wall all round it,
or whether it would be sufficient if there were three sides walled
in and a roof. I have one in mind where there is row of sheds
without any protection in front, which are commonly spoken of
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as "garages".' Atkinson,J. applied the test of `reasonable
protection and shelter for car' as was suggested by the counsel
for the insurer while construing the term `garage' in a policy of
insurance. For the purposes of MOFA, and particularly Section
2(a-1), the term `garage' must be considered as would be
understood by a flat purchaser and such person would
contemplate garage which has a roof and wall on three sides.
Our answer to question No. (ii) is, therefore, no.
Re: question no. (iii) - Whether stilt parking spaces are
part of `common areas and facilities'?
37. The High Court has held that the stilt car parking
spaces are part of the common amenities. Is the High Court
right in its view? MOFA does not define nor it explains
`common areas and facilities' though the said phrase is used at
various places in that Act. Mr. Pravin K. Samdani, learned
senior counsel for Maharashtra Chamber of Housing Industry
submitted that following could be termed as part of the
`common areas':
7 15% Recreation Ground (RG) Area;
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7 Recreational facilities and/or club house on above
RG Areas;
7 Society Office;
7 Security guards cabin;
7 Common passage/lobbies;
7 Stair case;
7 Lift;
7 Terraces over the roof of the building;
7 Landings on each floor;
7 Columns and beams of the building
7 Playgrounds, if any.
According to him, the following could be part of `Limited
Common Areas':
7 Separate lift attached to a particular flat and/or
certain number of flats;
7 Terrace attached to a flat;
7 Servants toilet on each floor, meant for the user
of the flats on that particular floor;
The aforesaid list as suggested by the learned senior counsel,
in our opinion, is not exhaustive. It may not be out of place to
refer to Section 3(f) of MAOA which defines `common areas
and facilities' as follows:
"3(f) "common areas and facilities", unless
otherwise provided in the Declaration or lawful
amendments, thereto means--
(1) the land on which the building is located;
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(2) the foundations, columns, girders, beams,
supports, main walls, roofs, halls, corridors, lobbies,
stairs, stair-ways, fire-escapes and entrances and exits
of t he buildings;
(3) the basements, cellars, yards, gardens,
parking areas and storage spaces;
(4) the premises for the lodging of janitors or
persons employed for the management of the property;
(5) installations of central services, such as
power, light, gas, hot and cold water, heating,
refrigeration, air conditioning and incinerating;
(6) the elevators, tanks, pumps, motors, fans,
compressors, ducts and in general all apparatus and
installations existing for common use;
(7) such community and commercial facilities
as may be provided for in the Declaration; and
(8) all other parts of the property necessary or
convenient to its existence, maintenance and safety, or
normally in common use;"
It is true that interpretation clause or legislative definition in a
particular statute is meant for the purposes of that statute only
and such legislative definition should not control other statutes
but the parts of the property stated in clauses (2), (3) and (6) of
Section 3(f) as part of `common areas and facilities' for the
purposes of MAOA are what is generally understood by the
expression `common areas and facilities'. This is fortified by the
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fact that the areas which according to the learned senior
counsel could be termed as `common areas' in a building
regulated by MOFA are substantially included in aforenoticed
clauses of Section 3(f) of MAOA. Looking to the scheme and
object of MOFA, and there being no indication to the contrary,
we find no justifiable reason to exclude parking areas (open to
the sky or stilted portion) from the purview of `common areas
and facilities' under MOFA.
38. It was argued that under MOFA it is for the promoter
to prescribe and define at the outset the `common areas' and
unless it is so done by the promoter, the parking area cannot be
termed as part of `common areas'. We are quite unable to
accept this submission. Can a promoter take common
passage/lobbies or say stair case or RG area out of purview of
`common areas and facilities' by not prescribing or defining the
same in the `common areas'? If the answer to this question is
in negative, which it has to be, this argument must fail. It was
also submitted that by treating open/stilt parking space as part
of `common areas', every flat purchaser will have to bear
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proportionate cost for the same although he may not be
interested in such parking space at all. We do not think such
consideration is relevant for the consideration of term `common
areas and facilities' in MOFA. It is not necessary that all flat
purchasers must actually use `common areas and facilities' in
its entirety. The relevant test is whether such part of the
building is normally in common use. Then it was submitted that
if a parking space is sold to a flat purchaser, it is to the
exclusion of other flat purchasers and, therefore, logically also it
cannot be part of `common areas'. This submission is founded
on assumption that parking space (open/covered) is a `garage'
and sellable along with the flat. We have, however, held in our
discussion above that open to the sky parking area or stilted
portion usable as parking space is not `garage' within the
meaning of Section 2(a-1) and, therefore, not sellable
independently as a flat or along with a flat. As a matter of fact,
insofar as the promoter is concerned, he is not put to any
prejudice financially by treating open parking space/stilt parking
space as part of `common areas' since he is entitled to charge
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price for the common areas and facilities from each flat
purchaser in proportion to the carpet area of the flat. MOFA
mandates the promoter to describe `common areas and
facilities' in the advertisement as well as the `agreement' with
the flat purchaser and the promoter is also required to indicate
the price of the flat including the proportionate price of the
`common areas and facilities'. If a promoter does not fully
disclose the common areas and facilities he does so at his own
peril. Stilt parking spaces would not cease to be part of
common areas and facilities merely because the promoter has
not described the same as such in the advertisement and
agreement with the flat purchaser. Although there is some
merit in the contention of the appellant that High Court erred in
placing reliance on the two aspects--namely, that the area of
stilt parking space is not included in the FSI and such area is
not assessable to the corporation taxes - in reaching the
conclusion that stilt parking space is part of `common areas' but
in our view even if these two aspects are excluded, in what we
have discussed above stilt parking space/open parking space
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of a building regulated by MOFA is nothing but a part of
`common areas' and, accordingly, we answer question no. (iii)
in the affirmative.
Re: question no. (iv) - what are the rights of a promoter
vis-`-vis society in respect of stilt parking spaces?
39. We have now come to the last question namely--
what are the rights of a promoter vis-`-vis society (of flat
purchasers) in respect of stilt parking space/s. It was argued
that the right of the promoter to dispose of the stilt parking
space is a matter falling within the domain of the promoter's
contractual, legal and fundamental right and such right is not
affected. This argument is founded on the premise, firstly, that
stilt parking space is a `flat' by itself within the meaning of
Section 2(a-1) and in the alternative that it is not part of
`common areas'. But we have already held that `stilt parking
space' is not covered by the term `garage' much less a `flat'
and that it is part of `common areas'. As a necessary corollary
to the answers given by us to question nos. (i) to (iii), it must be
held that stilt parking space/s being part of `common areas' of
the building developed by the promoter, the only right that the
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promoter has, is to charge the cost thereof in proportion to the
carpet area of the flat from each flat purchaser. Such stilt
parking space being neither `flat' under Section 2(a-1) nor
`garage' within the meaning of that provision is not sellable at
all.
40. MOFA was enacted by the Maharashtra Legislature
as it was found that builders/developers/promoters were
indulging in malpractices in the sale and transfer of flats and the
flat purchasers were being exploited. The effect of MOFA may
be summarized as follows. First, every promoter who
constructs or intends to construct block or building of flats in the
area to which MOFA applies has to strictly adhere to the
provisions contained therein, i.e., inter alia, he has to make full
and true disclosure of the nature of his title to the land on
which the flats are constructed and also make disclosure in
respect of the extent of the carpet area of the flat and the
nature, extent and description of the common areas and
facilities when the flats are advertised for sale. Secondly, the
particulars which are set out in Section 4(1A) (a) (i) to (x) have
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to be incorporated in the agreement with the flat purchaser.
Thirdly, the promoter has to apply to the Registrar for
registration of the organization (co-operative society or
company or condominium) as soon as minimum number of
persons required to form such organization have taken flats. As
regards unsold flats, the promoter has to join such organization
although his right to dispose of unsold flats remains unaffected.
Fourthly, and more importantly, the promoter has to take all
necessary steps to complete his title and convey to the
organization his right, title and interest in the land and building
and execute all relevant documents accordingly. It was argued
by Mr. Tanmaya Mehta, learned counsel for the promoter that
in view of the provisions of MOFA, Section 6 of T.P. Act and
Article 300A of the Constitution, the right of the promoter to
transfer parking spaces is not at all restricted. Relying upon the
decisions of this Court in ICICI Bank Ltd. v. SIDCO Leathers
Ltd. & Ors..4, Karnataka State Financial Corporation v. N.
Narasimahaiah & Ors.5 and Bhikhubhai Vithlabhai Patel & Ors.,
4
(2006) 10 SCC 452
5
(2008) 5 SCC 176
4
v. State of Gujarat & Anr.6, he submitted that the provisions
contained in MOFA must be construed strictly and there is no
provision either express or by necessary implication in MOFA
restricting the sale of stilt or open parking spaces. Mr. Sunil
Gupta also argued that promoter continues to have contractual,
legal and fundamental right to dispose of the stilt/open parking
space in the manner in which he proposes and his consumers
accept. We think this argument does not bear detailed
examination. Suffice it to say that if the argument of learned
senior counsel and counsel for promoter is accepted, the
mischief with which MOFA is obviously intended to deal with
would remain unabated and flat purchasers would continue to
be exploited indirectly by the promoters. In our opinion,
MOFA does restrict the rights of the promoter in the block or
building constructed for flats or to be constructed for flats to
which that Act applies. The promoter has no right to sell any
portion of such building which is not `flat' within the meaning of
Section 2(a-1) and the entire land and building has to be
conveyed to the organisation; the only right remains with the
6
(2008) 4 SCC 144
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promoter is to sell unsold flats. It is, thus, clear that the
promoter has no right to sell `stilt parking spaces' as these are
neither `flat' nor appurtenant or attachment to a `flat'.
41. In view of the above, it is not at all necessary to deal
with the factual submissions advanced by Mr. Tanmaya Mehta.
Having regard to the answer to question no. (iv), the finding of
the High Court that undertakings are neither binding on the flat
purchasers nor the society also warrants no interference.
42. These appeals, accordingly, fail and are dismissed
with no order as to costs.
(R. M. Lodha)
(A. K. Patnaik)
New Delhi.
August 31, 2010.
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View the actual judgment from court
Gunjan Pathak