Builders can't misuse society land: HC

MUMBAI: In an important order that strengthens the hand of the flat buyer vis-a-vis the builder, the Bombay high court has ruled that there can be no additional construction on a housing society plot if the buyers had not been informed of the same at the start. In land-starved Mumbai, builders often utilise undeveloped portions of a housing society to construct new buildings using additional construction rights in the form of Floor Space Index (FSI) or Transfer of Development Rights (TDR). This practice may now come to an end with the court ruling that unless it was initially disclosed to flat buyers, no part of the land belonging to their housing society can be used for additional construction. The court said that builders have to make a “true and full disclosure’’ about the housing project while signing the sale agreement with a buyer. The order was made in the case of an application by a Jogeshwari housing society opposing the builder’s plan to amalgamate a part of the society’s land with an adjoining plot to construct a 14-storey tower. A division bench comprising Justice R M S Khandeparkar and Justice A V Nirgude restrained the developer, Pranay Constructions Pvt Ltd, from using any part of the society’s land for the tower. “The promoter is not only required to make a disclosure concerning the inherent FSI, he is also required at the stage of layout plan to declare whether the plot in question in future is capable of being loaded with additional FSI/floating FSI/TDR,’’ said the judges. “In other words, at the time of the agreement, the promoter is obliged statutorily to place before the flat takers the entire project\scheme.’’ According to Mukesh Vashi, the lawyer representing the Jogeshwari housing society, the provisions in the Maharashtra Ownership Flats (Regulation of the Promotion of Construction) Rules as well as Supreme Court judgments on the issue are in favour of flat buyers. “Not only is the builder required to reveal details of the land, amenities and facilities to the buyer, but the development potential of the land on which the housing society stands as well,’’ said Vashi. The HC judgment comes on the heels of a series of orders in the last few years protecting the rights of buyers. Earlier this year, the HC had held that builders cannot change their building plans arbitrarily and add extra floors without the specific consent of the flat purchasers. Another ruling had stated that builders were bound to honour the promises made in their brochures even if these were not part of the sale agreement. In the case at hand, a first suit was filed by the White Towers Cooperative Housing Society, Jogeshwari (West) seeking orders to the builder to provide the conveyance deed of the land. A subsequent application was moved before the court against the proposal by the builder to construct a multi-storeyed tower by amalgamating a portion of the society’s land with an adjoining plot. Vashi argued that the proposal was against the interests of the buyers as they had been kept in the dark about the builder’s expansion plan. The lawyers for the builders countered this saying that a builder had the right to develop a plot of land as long as he was not modifying the existing building. They further contended that the layout plan for the new construction had been approved by the BMC and had not been challenged by the petitioners. The court did not see things this way. “The obligation (to make full disclosure) remains unfettered,’’ said the judges. “Obviously, the flat takers stand assured that in case of any change to be made in the project as was disclosed to the flat takers at the time of entering into agreement, the same has to be by following the proper procedure and without disturbance of the rights accrued to the flat purchasers in relation to the flats and all benefits attached to the flats, including in relation to the land on which the building having such flat is situated.’’ They added that builders could not carry out construction on a society’s plot as a matter of right. shibu.thomas1@timesgroup.com
29 May 2008, 0615 hrs IST, Shibu Thomas
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