CAR PARKING SPACE IN APARTMENTS AND HOUSING SOCIETIES
Nahalchand Laloochand P.Ltd. vs Panchali
Co-Op.Hng.Sty.Ltd. on 31 August, 2010
Author: R Lodha
Bench: R.M. Lodha, A.K. Patnaik
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 2 (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:
7 The carpet area of any of the 56 flats/tenements in
Panchali building is not less than 35 sq. mtrs.
7 The parking space either enclosed or unenclosed,
covered or open cannot be a `building'.
7 It is compulsory requirement to provide for parking
spaces under DCR.
7 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.
7 The model agreement does not contemplate the flat
purchasers to separately purchase the stilt parking spaces.
7 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 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
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 `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 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 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 [1942] 1 All E.R. 2211
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 181 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.
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.
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(c) as under :
"S.2(c).- `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;"
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; (c) 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); (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;
(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 :
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).
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."
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.
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 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 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 (c)
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.
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 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? AIR 1972 Bombay 343
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.
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 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 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 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 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;
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;
(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 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 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
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 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 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 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
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 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.
..............................J
(R. M. Lodha)
.............................J
(A. K. Patnaik)
New Delhi.
August 31, 2010.
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