ANOTHER RELIEF TO FLAT OWNERS

Posted on 7 April 2001

Unlike any other state in our country , Maharashtra has the unique distinction of regulating construction , sale, management ,transfer etc. of the flats by enacting the Maharashtra Ownership Flats (Regulations of the Promotion of Construction sale, Management and Transfer ) Act, hereinafter referred to as MOFA, as early as the year as 1963 . In terms of the provisions of the said Act, a number of obligations are enjoined upon a promoter , which term includes a “builder’ also . Section 4 requires a promoter to enter into a written agreement in the form , as prescribed by the Rules framed under the said Act, with the purchaser and not to accept more than 20% of the sale price as consideration . Such an agreement shall contain, interalia, the particulars such as liability to construct the building according to the plans and specifications , as approved by the local competent Authority, date by which the possession is to be handed over, carpet area of the flat, price of the flat , nature of the organisation to be constituted of flat purchasers , description of common areas and facilities with the percentage of undivided interests therein etc. The copies of the certificate about the title investigation, property card showing the nature of the title of the promoter of land and sanctioned plans and specifications shall be required to be annexed with such an agreement. The agreement shall also be required to be stamped as per Article 25 of the Bombay Stamp Act and registered as per the provisions of the Indian Registration Act, 1908, to make it a binding contract between a seller and a purchaser.

In terms of Section 7 of MOFA, a promoter shall not make any alteration in the structure from the approved plans and specifications, as disclosed to the flat purchaser without his previous consent of the flat purchaser . our consent of the flat purchaser . In terms of Section 10,as soon as a minimum number of persons, required to form a co-operative society or a company, have taken flats , the promoter shall take all the necessary steps to convey his rights , title and interest in the land and building in favour of the organisation of flat takers in accordance with Sec. 11 and shall also deliver all the documents of title relating to the property, which may be in his possession or power .Sec 13 renders breach of any such provision of the MOFA a criminal offence punishable with imprisonment ranging from one year to three years with fine upto Rs. 10,000/- or with both.

Inspite of all these provisions , which re of mandatory nature , instances of dispute are on the increase day by day . There is an apt age- Old saying as “ SARE JHAGDE DUNIYA MEIN ZAR , ZORU AUR ZAMEEN KE HAI” ( all disputes in this world pertain to wealth , woman and property ).

May be ,also because the more we try to bind ourselves within the four walls of a written instrument , the more are the attempts to wriggle out of the obligations on the slightest pretext, bidding good-bay to the morality , honesty, fair-play , justice, equity in the transaction which ,ultimately , results into the hardening of the attitudes leading to litigation between the parties .It is well known a fact these days in our country that the justice is not only a delayed process but write expensive too on account o hefty fees charged by the advocates and the amount of court tee required to be paid for adjudication . It is again the State Bar Council has recently , come out with novel scheme of providing the assistance of the advocates , from a panel to be maintained by it , to the needy litigants at a reasonable fee. It is hoped that it shall be a successful experiment and other State Bar Councils shall also follow suit in time to come.

Such a controversy , in fact, arose between the vrindavan (Borivli) Housing Co-operative Society Ltd. And the builders M/s . Karmarkar Brothers , wherein the dispute , inter alia , was the demand of the builder of the charge each flat owner in excess of the amount of the purchase price as mentioned in the agreement of sae and their reluctance to execute the deed of conveyance in favour of the society. The society filed a suit for declaration and mandatory injunction and paid the court fee on the nominal value of Rs.300/- as per the provisions of Section 6 (vi) )(j) of the Bombay Court Fee Act , 1959 . The lower court held on 16^th march . 1978 , that the suit was beyond the pecuniary valuation of the court for the purpose of court fees as the consideration amount of the conveyance was more than Rs. 2 lacs and , therefore , returned the plaint for presentation to the proper court . The matter came up by way of appeal before Hon’ble Mr. Justice S. J .Deshpande of the Bombay High Court , who as there was no earlier authority on the point , went into the rival contentions vis-a-vis the relevant provisions of the MOFA carefully in the case reported as Vrindavan ( Borivli) Co-operative Housing Society Ltd. V/S. Karmarkar Bros. In 1982 . MHLJ-607 and to quote the wordings of the Lordships would be more appropriate to appreciate the implications of the matter here in under :-

“ the plaintiff in this case is seeking relief for enforcement of the statutory provisions as contained in Section 10,11 and 12 of the said Act. It is true that Section 11 refers to an agreement but agreement in not an ordinary agreement like a contract of sale . because this agreement is to be executed in conformity with section 4.It is to be registered . And this agreement involves statutory compulsions to provide certain terms therefore the ordinary contracts of sale can not be equated with this sort of agreement …the transfer of title contemplated be Section 11 is not an individual , right and liabilities …so the obligations provided in the agreement referred to in Section 4 and read with Section 11 and statutory and the performance of which can be claimed by the plaintiff … therefore if the plaintiff is seeking relief in regard to enforcement of these obligations in my opinion , the suit can not be an ordinary suit for specific performance of a contract of sale.

The relief which the plaintiff is now claming for enforcement of these obligations is not susceptible of monetary valuation and is not otherwise provided by the Court fees Act also … therefore the suit valued by the plaintiff is properly valued under Section 6(iv)(j) of the Bombay Court Fee Act… Under Section 6(x1) of the Bombay Court Fee Act the contract of Sale ordinarily will mean a contract entered into by parties voluntarily and according to their will and pleasure without any reference to any statute … the provision of Section (xi) of the Bombay Court Fee Act clearly , shows that the contract of sale as known to it ,as nothing to do with statutory obligations …..The present suit filed by the plaintiff is not a suit simplicatior for specific performance . It is a suit to enforce compliance of statute …. Section 13 also provides that a promoter who fails to comply with the provisions of this Act is liable to criminal actions …from this it can be reasonable inferred that the agreement which is the basis a provided by Section 4 for conveyance to be executed can not be said to be subject matter of an ordinary contract of sale. Because if an ordinary contract of sale is violated there will be only a remedy of damages or for specific performance and no such penal consequences could follow…..therefore principal relief which plaintiff is claiming relates to the performance of the obligations under the statue and such a relief being incapable of monetary valuation, the valuation made by the plaintiff in this case relying on the clause 6(iv) (j) of the Court Fee Act is correct”.