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Vitthal Laxman Patil Vs. Kores (India) Ltd. and Ors. - (High Court of Bombay) (25 Jan 2019)

Promoters are obliged under MOFA to make true and full disclosure of a sanctioned layout plan

MANU/MH/0089/2019

Property

The case of the Plaintiff was that after having disclosed a sanctioned layout containing 15 buildings and open and amenity spaces including Recreation Ground (RG) and having executed agreements for sale on the basis of such disclosure, it was impermissible for Defendant No. 1 to construct any additional building on the RG area of the layout without the consent of the flat purchasers including the Plaintiff.

The question raised in present case is whether, after making disclosure to flat purchasers of a sanctioned layout plan showing a certain number of buildings and open and amenity spaces including RG and their locations as per the requirements of Maharashtra Ownership Flats Act, 1963 ("MOFA"), it is permissible to a promoter to construct an additional building on the RG area shown in the layout plan without seeking consent from the flat purchasers.

Section 7 of MOFA, prohibits the promoter, after the plans and specifications are disclosed, from making alterations or additions without the consent of persons who have agreed to take flats from him.

This provision was interpreted by Court in the case of Kalpita Enclave Co-operative Housing Society Ltd. and Ors. vs. Kiran Builders Pvt. Ltd., to mean that the promoter was not only prohibited from making alterations to the flat or the structure of the building but even from putting up additional structures not shown in the original layout plan without the consent of flat takers. The State legislature thereafter stepped in and amended Section 7 by deleting the words "or constructs any additional structures" and inserting in their place the words " or additions in the structure of the building". To make the position explicit, Section 7A was added to MOFA.

Consequently, amended Section 7 and Section 7A together now make it clear that the question of taking prior consent of flat takers arises only when an addition to the structure of the building is to be carried out and not when additional structures (i.e. structures independent of the building concerned) are to be erected.

There is, however, another set of provisions in MOFA, read with the rules framed thereunder, which deal with the obligations of the promoter, firstly, to disclose all particulars of the building or project involving more than one buildings and then to construct in accordance with such particulars. Provisions require the promoter to make a full disclosure of the proposed building and its amenities or the project of buildings and their amenities, and then to comply with such disclosure whilst constructing the building/s or implementing the project.

The Supreme Court in Jayantilal Investments vs. Madhuvihar Co-operative Housing Society and Ors. held that the obligation of the promoter under MOFA to make true and full disclosure to the flat takers remained unfettered even after the amendment of MOFA by Maharashtra Amendment Act 36 of 1986. The promoter is not only obliged statutorily to give to the purchasers the particulars of the land, building, amenities, facilities, etc., he is also obliged to make full and true disclosure of the development potentiality of the plot which is the subject matter of the agreement and if any departure is to be made in the scheme so disclosed, consent of flat takers must be obtained.

The second appeal is allowed and the impugned orders of the courts below are set aside to the extent they relate to the relief claimed against defendant No. 1 promoter and the suit is remanded to the trial court for a fresh hearing in accordance with law.

Relevant : Kalpita Enclave Co-operative Housing Society Ltd. and Ors. vs. Kiran Builders Pvt. Ltd. MANU/MH/0306/1985; Jayantilal Investments vs. Madhuvihar Co-operative Housing Society and Ors. MANU/SC/7012/2007

Tags : DISCLOSURE   DUTY   SANCTIONED PLAN  

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