law vs case law on ‘flats’ - taxguru.in › wp-content › uploads › 2014 › 02 ›...
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LAW vs Case Law
On ‘Flats’
V. Swaminathan B.Sc., B.L., FCA
PROLOGUE
As is, by and large, known, the Constitution of
India, the nation’s basic charter, is the supreme law
of the land. And all other laws are subordinate to
the Constitution; and as such, must be read and
interpreted in the light of the constitutional
provisions.
The authority to legislate by the Union and States
is as conferred by Article 246 of the Constitution.
Of the three independent lists as provided in the
Seventh Schedule to the Constitution, List- II
comprises the entries over which the State
legislatures have the exclusive powers to legislate.
Anyone concerned is expected, rather needs, to be
aware, the Constitution itself has, over the recent
years, been subjected to drastic amendments; and
many are purported to have been made so as to
remain in tune mainly with growingly changing
socio-economic environments. Even so, in a
manner of plain speaking, quite a few of the
amendments do not, in public opinion, seem to have
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been done objectively and with a public-centric
approach; instead, happen to have been thrust upon
the people, - thereby rendering the age-old and
time-recognised-honoured human rights, one being
the very basic right namely, – the “right to
property”, a laughing stock. Conceptually, though,
that is really a bundle of rights, principally
comprise the so called ‘ownership’; with all other
appended and accompanying rights/interests.
One of the amendments so effected and sticking as
a sore thumb /-point is the 44th Amendment(s) of
1978; resulting in drastically decolouring or
dubbing what earlier was regarded a ‘fundamental’
right, into a ‘constitutional - or ‘statutory- right. As
commented critically by a Researcher in her
published Article,- “the amendment bestowed upon
the Indian socialist state a licence to indulge in
what Fredric Bastiat termed legal plunder. This is
one of the classic examples when the law has been
perverted in order to make plunder look just and
sacred to many consciences.” Whatsoever that
means in real life terms to a property holder, in
one’s perspective, there could conceivably be no
denying that, even so, for understanding and/or
construing any provision of an enactment, in proper
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light, –such as, of state, MOFA herein - none can
rightly afford to bypass or side-step the connected
overriding provisions and vital implications of the
other primary central/state statutes, besides any
other, the three time tested ones, - the T P Act,
Contract Act, Registration Act.
INTRODUCTION
The case law for study herein is the SC judgment
reported @ SC on Car Parking. (Nahalchand’s case).
The legislation of relevance is the special law of
Maharashtra embodied in two enactments, called
the Maharashtra Ownership Flats Act, 1963 and the
Maharashtra Apartment Ownership Act, 1970.
They, in terms, respectively govern the property in
the form of ‘units’of a building, commonly known
as ‘Flats’and ‘Apartments’. For brevity, in the
ensuing discussion, they are referred to as MOFA
and MAOA.
In the instant case, to support the mutually
contradicting stance, both parties have chosen to
respectively put up pleas claiming how the relevant
provisions of MOFA have to be construed; and
differently interpreted.
To briefly recap at the outset, so as to serve as a
backdrop:
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A plethora of rules /principles of interpretation
have been evolved and enunciated by courts in
decided cases over the years to serve as aids for
the purpose of construing any statutory provision.
That is to ascertain the intention of the law makers,
so as to make it effective and accomplish the
objective of any enactment. As there are several
of them, court has to, for its purpose of
adjudication, select the most appropriate one or
more of them not only for a proper understanding
of, but also for construing any provision, depending
on the type of issue (s), to the end of adjudicating
having regard/in accordance with the relevant
provisions of the applicable governing enactment.
That is easier said than done / doable. In that
endeavour, no need to underline, it is the duty and
responsibility of counsels for both sides to be of
every assistance to courts.
This write-up is intended, and may be, read as a
supplement to the earlier write-up published @
Nahalchand's Case (I).
The viewpoints stressed therein, in a nut shell:
The only point of dispute for court to decide and settle was whetherthe promoter was entitled to be granted the prayer for 'injunction'against the OPs. Going by an understanding of the arguments
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advanced, and the reasoning and findings given, the court has to besimply taken to have said "NO". That is, on the ground that thepromoter has no such lawful right to retain, for a separate sale, thedisputed property, being the 'stilt car parking slots', forming part andparcel of the Common Areas and Facilities”(CAF). That being so,the court's further observation (Para 40 of the judgment – whichreads : “It is, thus, clear that the PROMOTER HAS NO RIGHTTO SELL `stilt parking spaces' as these are neither `flat' norappurtenant or attachment to a `flat'. (FONT supplied) mighthave to be regarded merely as an observation in the nature of "obiterdictum"; as distinct from “precedent”
Further that, with due respect to the wisdom of the
judiciary, but in no manner offending it, the only
way to reconcile the said observation might be to
take it to mean that a promoter selling units of a
building as ‘flats’, hence governed by MOFA, has
“no right to sell separately”any such portion of the
building complex, which is necessarily part and
parcel of CAF. This is a straight forward and
common sense point, readily inferable; hence
requiring no long drawn process of reasoning, more
so, any interpretation of the law in its legal sense.
Anyone proceeding on a different premise / understanding ofthe SC case, whether or not based on any legal /expert advice orotherwise, will be doing so at his own peril; by reason of theprospect of his having to face a lifelong (or even beyond)'infantile' / 'imbecile' litigation.
2. To reinforce, though at the cost of repeating:
The instant case is one of civil law dispute between
the two parties; and only them, none else. The final
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ruling given is having regard only to the particular
facts of the case; and based on the interpretation of
the given provisions of the MOFA as canvassed. If
rightly viewed, from a legal perspective, in
essence, what has been held is that all areas and
facilities in a building complex of the kind herein, -
meant, by the very nature, for common enjoyment,
that is, other than/distinct from the areas of the
flats in exclusive possession and enjoyment of the
respective takers, in their own individual rights,-
do not but constitute part and parcel of the
“common areas and facilities”, within the meaning
of MOFA.
To proceed on that premise, if at all, the only other
aspect which requires a separate study,- that is
independent of / sans the instant case, - is this:
What the “limited”area, as envisaged by the law
connotes; and, whether promoter has a lawful right
to sell to a flat taker, who has paid a price,
inclusive or otherwise, the facility of parking his
car / vehicle, stilt or open, so that the latter has a
right to occupy and enjoy such area, as ‘limited’, to
the exclusion of the rest of the flats takers, in the
same manner as he has in respect of the exclusive
area of his flat.
An Analysis of SC Judgment
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3.1. The factual matrix as per narrationin the SC Judgment is reproduced below:
< 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 outthe material facts and the contentions of the parties. Thenarration of brief facts from S.C. Suit No. 1767 of 2004 willsuffice for consideration of these appeals. NahalchandLaloochand Private Limited is a Private Limited Company. As apromoter, it developed few properties in Anand Nagar, Dahisar(East), Mumbai and entered into agreements for sale of flatswith flat purchasers. The flat purchasers are members ofPanchali Co-operative Housing Society Ltd. (for short, `theSociety'). The promoter filed a suit before the Bombay City CivilCourt, Bombay for permanent injunction restraining theSociety (defendant) from encroaching upon, trespassing and/orin any manner disturbing, obstructing, interfering with itspossession in respect of 25 parking spaces in the stilt portion ofthe building. The promoter set up the case in the plaint thatunder the agreements for sale it has sold flats in its buildingand each flat purchaser has right in respect of the flat sold tohim and to no other portion. It was averred in the plaint thateach flat purchaser has executed a declaration/undertaking inits favour to the effect that stilt parking spaces/open parkingspaces shown in the plan exclusively belong to the promoterand that the declarant has no objection to the sale of suchspaces by it. The defendant (Society) traversed the claim andset up the plea that the promoter has no right to sell or disposeof spaces in the stilt portion and that the undertakings given bythe flat purchasers are not binding being contrary to law andbased on such undertakings, the promoter has not acquired anyright to sell stilt parking spaces. >
3.2. For ready reference and appreciation, certain
portions of the operative part of the Judgment, as
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selected for the present purpose (UPPERCASE/ITALICS
supplied), are set out below; while specific
comments are inset, other detailed comments are
being separately furnished later:
A) The summary of findings of the High Court as given in theSC judgment (with BIG FONT supplied):
While dismissing the appeal, THE HIGH COURT RECORDED THE
FOLLOWING FINDINGS:
The carpet area of any of the 56 flats/tenements in Panchalibuilding is not less than 35 sq. mtrs.
The parking space enclosed or unenclosed, covered or opencannot 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 MOFAbetween the promoter and the flat purchasers cannot be dilutedby any contract or an undertaking to the contrary. Theundertakings contrary to DCR will not be binding either on theflat purchasers or the Society.
The stilt parking space is a common parking area available andTHE 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
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PARCEL OF THE SOCIETY BUILDING AND IT CANNOT BE SEPARATE
PREMISES AVAILABLE FOR SALE. As soon as the Corporationissues the occupation certificate and the Society is registered,the building as well as the stilt parking spaces, openspaces and all common amenities become theproperty of the Society.
The stilt parking spaces cannot be put on sale by the developeras he ceases to have any title on the same as soon as theoccupation certificate is issued by the Corporation and itbecomes the property of the society on its registration.
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.
IT IS IMMATERIAL IF THE PURCHASE AGREEMENT DOES NOT INCLUDE
STILT CAR PARKING SPACES IN THE COMMON AREA OF AMENITIES. Thestilt 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.
Under MOFA, the developer's right is restricted to the extent ofdisposal of flats, shops and/or garages, which means that anypremises which is included in the Flat Space Index (FSI) can besold by the developer/promoter. The stilt parking space is notincluded in the FSI nor is it assessable for the Corporationtaxes.
B) OBSERVATIONS, FINDINGS, AND OPINION OF SC:
Q
> 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
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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.
<> Thus seen, the main focus has been on the provisionsof MOFA. However, the proposition thrown up, as may benoted from the analytical study attempted herein, for anincisive consideration, is this: - The two enactments, forthe reasons brought out, are prima facie not self -contained / -sufficient codes; and therefore, must be readtogether, as mutually interlinked /complementary; not ona standalone basis.
> 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:
.......
In the same vein the other arguments of either
parties, it might be noted, have been set out, and
considered mainly having regard to the statutory
definitions of the other words/expressions used in
the statute namely, ‘common areas’, ‘garage’, …
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<> As may be readily inferred, simply following upon thelines of arguments of both sides, the court appears to haveconfined itself, in considering the point of and settling theprivate dispute, with the main focus, as urged, merely oninterpretation of the statutory definitions of the words /expressions under reference.
>18. Section 10 casts duty upon the promoter to take steps forformation of co-operative society or company, as the case maybe. The said provision reads as follows:
S.10. (1) As soon as a minimum number of persons required toform a Co-operative society or a company have taken flats, thepromoter shall within the prescribed period submit anapplication to the Registrar for registration of the organizationof persons who take the flats as a co-operative society or, as thecase may be, as a company; and the promoter shall join, inrespect of the flats which have not been taken, in suchapplication for membership of a co-operative society or as thecase may be, of a company. Nothing in this section shall affectthe right of the promoter to dispose of the remaining flats inaccordance with the provisions of this Act.
Provided that,….
Provided further that,
>19. There is also obligation cast upon promoter to executethe 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 completehis 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
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BUILDING, AND EXECUTE ALL RELEVANT DOCUMENTS THEREFOR IN
ACCORDANCE WITH THE AGREEMENT EXECUTED UNDER SECTION 4
and if no period for the execution of the conveyance is agreedupon, he shall execute the conveyance within the prescribedperiod and also deliver all documents of title relating to theproperty which may be in his possession or power.
The specially marked words “IN ACCORDANCE WITH THE
AGREEMENT EXECUTED UNDER SECTION 4”are so crucial, asrequiring to be given the due importance; ought not to beglossed over. That is, one would urge, necessary, for aproper understanding and appreciation of the purport andimport of Section 11. And, if so done, it is bound to berealised that, the final conveyance to the registered society(or company or association) as envisaged, would be of theentire property (land and building) in the complex; butthat should/could only be, subject to, not only theexclusive rights to the ‘flat’, so also the proportionate right/ interest in the common areas and facilities (thoughundivided, but not excluding but including the right tosuch part of them as demarked “limited”, and passed on,“as appurtenant thereto”, to individual flat taker(s), as perthe terms spelt out in the “agreement to sell”respectivelyentered into.
Also needs to be specially noted that, Section 11, in terms,covers / applies to ‘apartments’as well, albeit ‘apartments’are, generally speaking, governed by the separateenactment i.e. MAOA. Further that, in the MAOA itselfthere is no provision to cover the mandate of “finalconveyance”; for which, therefore, one has to necessarilyturn to and take into consideration what is provided in,besides MOFA, the rules framed there under (Rules 8 and9). Similar such clinching clues are to be found in both theenactments, elsewhere as well. Most significant of all is, -clause 25 of FORM V, prescribed for MOFA, which reads:“This Agreement shall always be subject to the provisions
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of the Maharashtra Apartment Ownership Act, and therules…”
>20. Section 16 of MOFA provides that the provisionscontained therein are IN ADDITION TO THE PROVISIONS OFTHE T. P. ACT and shall take effect notwithstanding anythingto the contrary contained in the contract.
By necessary implication, (a) for a proper understanding/ construing the implication of the provisions of MOFA,the elated provisions of the TP Act ought to be kept inview, and given due weight age; and (b) though not sospelt out,- so also, besides any other, of the related /connected provisions of the Contract Act, RegistrationAct.
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) ....
(B) WHETHER STILT PARKING SPACE IS A GARAGE?
………
> 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
> 34. The relevant portion of condition No. 2, Form vappended to 1964 rules reads as under:
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THE FLAT PURCHASER HEREBY AGREES TO PURCHASE FROM THE
PROMOTER AND THE PROMOTER HEREBY AGREES TO SELL to the FlatPurchaser one flat No. .......... of the Type .......... of carpet areaadmeasuring .......... sq. meters (which is inclusive of the area ofbalconies) on .......... floor as shown in the Floor plan thereofhereto annexed and marked Annexure 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 Purchasershereby agrees to pay to that Promoter balance amount ofpurchase price of Rs. .......... (Rupees .......... ...............) havingbeen paid to the Promoter on or before the execution of hisagreement 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....
In perceiving as aforesaid, Paragraph 11 of FORM V, thesecond of two sentences therein, which reads, -“HeSHALL USE THE GARAGE OR PARKING SPACEonly for propose of for keeping or parking the Flatpurchaser’s own vehicle”-has apparently been lost sight of;that mentions “parking space”, in addition to “garage”.
> 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 does IT EXPLAIN `COMMON AREAS
AND FACILITIES' THOUGH THE SAID PHRASE IS USED AT VARIOUS PLACES
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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':
………
The aforesaid list as suggested by the learned senior counsel, inour 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. “Definitions – In this Act, unless the context
otherwise requires,-“*
*(IN THE JUDGMENT THE opening WORDS, IN INVERTED COMMAS,
ALBEIT CRUCIAL requiring to be focussed on, NOT FOUND)
………
(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) ...
(3) the basements, cellars, yards, gardens, PARKING AREAS and storage spaces;
(4) to (7).....
(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
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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 AFORE NOTICED
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.....
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' ...
> 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
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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
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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., v. State of Gujarat & Anr., 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
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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 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'.
The case law cited, on a quick reading, does not appear tobe of any direct relevance or of real help to support thearguments. Be that as it may, as is seen, the court itself hasnot considered necessary, hence not considered the caselaw cited.
Concerning the view the court has taken, as borne out in
the last sentence of paragraph 40. , that reads, - “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”,-
read, - besides other detailed comments herein
later,- the inset comments under earlier
paragraphs 19 and 20 of the judgment.
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> 41. In view of the above, it is not at all necessary to deal withthe factual submissions advanced by Mr. Tanmaya Mehta.Having regard to the answer to question No. (iv), the finding ofthe High Court that undertakings are neither binding on the flatpurchasers nor the society also warrants no interference.
UQ
NOTE: To make it clear, while reproduced above are onlysome portions on a selective basis, it is recommended,being necessary, to mindfully read the whole of theJudgment for an independent study and understanding.
(UPPER CASE/Italics supplied)
4. OWN INEPENDENT OBSERVATIONS and
VIEWPOINTS:
A) Facts as narrated are not seen to cover or
provide any clue on the following:
(a) Whether as per approved plan, ‘stilt parking’
and ‘open parking’had been demarcated?
(b) Whether in the agreement (s) for sale with
flat takers those were disclosed, so also the
price there for, either as part of lump sum or
separately, and charged for and collected from
the flats takers?
(c) Whether there were sale deeds executed
and registered? If so, how the provision for car
parking, both stilt and open, and consideration
there for were disclosed?
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(d) Whether the 25 stilt car parking slots
retained by the promoter were the surplus
remaining; that is, excluding those covered (as
queried) in (b) and (c) above?
(e) Whether the promoter had any unsold flats
left with it, after the CHS was formed and
registered?
(f) Whether the formal conveyance as mandated
by Section 11 of the MOFA has been duly
effected? If answer is ‘yes’, did the promoter
have any unsold flats even then?
Note: Had the aforesaid and any other
further relevant facts been gone into, in
details, and brought on record, that could
have been of immense assistance for firstly
the lower courts, to adjudicate the point of
dispute in proper light and better
perspective.
B) Interpretation of MOFA
The commentary and cited case law in the popular
text book published by Law Book House (2003
Edn.) on MOFA, etc., are of guidance. At pgs. xli,
xlii, the case law summed up under the topic head,
- GARAGE USED FOR OTHER THAN PARKING CAR, provide useful
information. None of those old court cases have
been cited in the instant case or even referred;
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hence the judicial view taken in the past, especially
on the import or significance of the concepts such
as, ‘common areas’and garage’seems to have been
over sighted.
Similarly, no notice is seen to have been taken of
some of the other useful information available.
Particularly, those are on the history and historical
developments of the state legislation on ‘flats’. One
believes that, those could have thrown more light,
so as to assist the court in adjudicating the dispute
in the instant case in all its ramifications. To be
precise, as one sees, had it been so stressed, the
court would possibly have been persuaded to veer
round to the view that after all, the two enactments,
MOFA and MAOA, though prima facie are separate ,
not really so but would have be necessarily read
together, not in isolation, for certain practical
purposes. For example, in the instant case, for a
proper constriction and understanding of the true
import of the terms such as ‘limited’common
areas- of which special definition is found in
MAOA, but not in MOFA.
To dilate:
At page 10 of the book -
i) In the very nomenclature of the enactment,
the word ‘ownership’is used.
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The first limb of the preamble to the MOFA
(1963) reads:
< WHEREAS, it has been brought to the notice
of the State Government that, consequent on
the acute shortage of housing in the several
areas of the State... sundry abuses,
malpractices, and difficulties relating to the
promotion of the construction of, and the sale
and management and transfer OF FLATS TAKEN
ON OWNERSHIP BASIS exist and or increasing. >
The third limb reads:
< AND WHEREAS, it is now expedient after
considering the recommendations and
suggestions made ... to make provision
during the period of such shortage of
housing for the regulation ...., OF FLATS ON
OWNERSHIP BASIS.... >
ii) At page 15 of the book, read the commentary
on case law on – Whether Flat can be
attached and sold in execution of a decree?
It is to be noted that, earlier, there was a
controversy on the point of issue, and in the
absence of a clear cut provision in MOFA, the
dispute had to be resolved by adverting to
the provisions of the State Co-op. Societies
Act, and settled through a long drawn
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process of reasoning. Incidentally, even after
the 1986 retroactive amendment of the
definition of “Flat”(section 2 (a)), to include
‘an apartment’, no specific provision has been
made enabling the flat holder to mortgage
and obtain home loan. In other words, for
obtaining home loan, a flat holder has to
necessarily rely on the specific provision in
the other enactment namely, MAOA. No need
to add that, such is the position that has come
to be/ is being accepted and followed all
along for the granting of home loans by
lending institutions also to ‘flat holders’, not
only to ‘apartment purchasers’. Incidentally,
that such is the position has been recognised
also for tax purposes. The reference is to,
among others, the allowance of tax incentives
in respect of home loan, also to ‘flat holder’.
That is very much intended may be seen
from the several provisions of the I T Act;
for example, see the comprehensive language
of section 269 UA, intended to cover both
types of units, i.e. flats, besides apartments.
At page 151 of the book, the expert commentary, in
the same vein, reads:
< Prior to 1970 it was felt that on account of
shortage of lands in urban areas the majority
of...could not think in terms of owning houses on
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individual basis. True, there was an ever-growing
tendency to construct multi-storeyed flats,
apartments, and the like on ownership basis but
persons purchasing.... did not have a marketable title
thereto and could not obtain any loan by mortgaging
such flats, felt necessary to legislate.... The above
Act was therefore passed to provide for the
ownership of an individual apartment in a building
and to make such apartment heritable and
transferable property, and to provide for matters
connected with the said purposes.>
To be noted: The above narrated legislative historygoes to explain that, the basic objective was to vestpurchasers of both flats and apartments with‘ownership rights’, alike.
ON THE CONCEPT OF, - “COMMON AREAS AND FACILITIES”
As specially defined in MOFA, the term “common
areas and facilities”, of course, means and includes,
- the land on which the building stands, and all
other wedded but common areas or facilities; which
again is an expression specially defined, as to mean
and include certain items specified. However,
should one have to go by a strict and narrow view,
as has been done in the instant case, then that
would inevitably lead to a strikingly piquant /bizarre
situation. In that, all those other facilities known to
be provided by promoter’s as agreed with flat
takers but not found a mention, e.g. swimming pool,
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club house, and the like, or those compulsorily
required to be provided as per the mandates of
local regulations e.g. so called, - ‘Rain Water
Harvesting’, Sewerage Treatment Plant’and the
like, though physically located outside of the flat,
would be left uncovered by the concept of
“common areas and facilities”as defined. Albeit,
those also are, taken into account for pricing, and
required to be available to the flat takers, for
common use and enjoyment,- for the purposes for
which they are intended or required.
Another aspect that has not been argued, hence
left unconsidered by court (s) is this:
Statutory interpretation by Francis Bennion, 2nd
Edn., section 288, with the heading “presumption
that updating construction to be given”states one
of the rules thus (page 617):
< It is presumed that parliament intends the
court to apply to an ongoing act a construction
that continuously updates its wording to allow
for changes since the act was initially framed
(an updating construction). While it remains law,
it is to be treated as always speaking. This
means that in its application on any date, the
language of the enactment, though necessarily
embedded in its own time, is nevertheless to be
construed in accordance with the need to treat it
as current law. >
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With that in focus, if one were to test the
interpretation (as urged, -and accepted by court) of
the word ’garage’, the only inference possible is
that for a proper construction, what ought to be
borne in mind are these: Any such concept as
‘garage’keeps on changing over the years. Going
by natural presumption, the word ‘garage’has been
used in the 1963 enactment, as that was the type
of facility for car parking known at that point in
time and in vogue. But it is only in course of time
later, over the years, the new ideas of having for
car parking, -stilts, underground parking, even the
lately known high / multi level car parking, have
come in vogue. In view thereof, if the above rule of
construction were to be followed, then, in today’s
context, even though the same term ‘garage’has
continued to be used, it must be given a new
meaning, as to accommodate or yield to take within
its ambit also the new kinds of later innovations;
that is, besides stilt, also the others as afore said.
Further, the words “appurtenant to flat”have no
small significance but must be given the meaning as
intended and warranted; that has not been done in
the instant case.
In fact, as said earlier herein, the court itself has
observed to the effect that the meaning as assigned
in MOAO to the concepts dealt with cannot be
simply ignored. Another reason, as canvassed, even
if to take a common sense view, both the Acts must
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be read together, for the purpose of construing the
meaning of ‘limited common area’. If so done, one
submits, that demarcated stilt car parking area(s)
will automatically come within the scope of the said
term; hence, to be covered/included in FORM V.
That is, same as in the deed of conveyance to
apartment purchaser under MAOA.
No need to add and pinpoint that, to hold otherwise,
that would have the patently unintended or
unwarranted consequence. That is, result in
denying / depriving flat takers the unquestionable
fundamental rights to transfer, inherit, mortgage, so
on; that would fly in the face of the very objective
of the MOFA, also of the allied enactment, MAOA.
For similar reasoning, even if ‘flat’were to be taken
requiring to be construed so strictly as argued and
accepted, as to exclude ‘stilt car parking’, there
seems to be nothing in MOFA in support. On the
contrary, for reasoning advanced herein, the stilt
car parking slots, it can be forcefully argued, must
be given the same meaning as under MAOA and
regarded as “limited common area” also under
MOFA. If so done, what must inevitably follow is
that flat taker, same way as apartment taker, has a
lawful right for an exclusive occupation and
enjoyment of the assigned slot(s) out of the
common areas exclusively for his parking.
Following through such reasoning, the view that
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promoter has no right to sell, or if done for a price
that will be illegal,- as heard to being opined even
by experts in legal circles, -is bound to fall like a
pack of cards. This is no different from, but
supported by the same logic, or reasoning behind
that flat taker is regarded to have an inherent right
to mortgage and obtain home loan, so on ; also that,
any such term in MOFA, not specifically covered in
the definition section, ought to, for all practical
purposes, be widely construed. To be so done,
keeping in focus the most fundamental rule of all;
namely the rule of ‘purposive interpretation’, --
which if simply understood, merely means that it
must be such an interpretation as to serve or sub
serve eventually the purpose or the object of
accomplishing the legislative intent behind.
For the above purpose, to take a narrow view, -
that is MOFA and MAOA are two entirely
independent enactments,- would make a non sense
of , and offend, the very wisdom or objective of the
legislation or legislative intent behind. It is
observed that, certain observations in the instant
case itself,- read closely paragraph 37 (the
concluding lines therein) of the judgment, - the SC,
as may be inferred, is inclined / leaning towards
such a line of reasoning as canvassed above; but,
regrettably though, has stopped short of pursuing it
any further.
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“Question of law”
In the first place, in one’s perception, a fundamental
point (poser) that arises for an analytical study is
this: Does the matter necessarily involve a
‘question of law’, so as to require a long drawn
process of reasoning, -as is seen to have been
resorted to, - for arriving at a convincingly
judicious answer? To put it differently, is it not
preferable to adopt a different line of reasoning, but
which in comparison entails no complicity, if that
would lead to same conclusion as of now. That is,
for the court to decide, the promoter’s contested
action in retaining the stilt car parking slots, with
intent to sell separately, is unlawful, not being in
accordance with the governing law; hence, its
prayer for an order of injunction against the OPs
cannot be granted but should be rejected.
To be precise, had the OPs put up their case on
such different grounds and advanced arguments
accordingly, as suggested herein, the court’s
decision would still have been the same and in their
favour. For that matter, possibly, the dispute would
not have had to be taken up to court.
To add:
A) According to the scheme of the provisions as
embodied in MOFA, sale of a flat is required to be
made for a price as agreed with flat taker. As
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clearly spelt out in Section 4, the written
‘agreement for sale’there under should be in the
prescribed form. The form so prescribed is FORM
V (inserted by G.N. of 10-4-1987, w.e.f. 13-4-
1987).
B) Section 4 (1A) lays down what all are the
particulars which the prescribed ‘agreement’for
sale taken “on ownership basis”should inter alia
include. As specified in clause (a) therein, the
particulars the agreement should contain, among
others, are, -
........
(iv) 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; ..”
(v) the precise nature of the organisation to be
constituted of the persons who have taken flats
or are to take the flats;
(vi) the nature, extent and description of the
common areas and facilities;
(vii) the nature, extent and description ofLIMITED , COMMON AREAS AND FACILITIES, IF ANY;
(viii) percentage of undivided interest in the
limited common areas and facilities if any,APPERTAINING TO THE FLAT AGREED TO BE SOLD;
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(b) (This enumerates copies of documents requiring
to be attached to the agreement for sale in FORM
V)....
The foregoing are mandatory provisions; hence, are
required to be mindfully read, and harmoniously and
strictly construed. If so done, so far as one could
see, the promoter will be within his lawful right
only if it /he effects sale of any facility, - to be
precise any special type of car parking, such as stilt
car parking as in the instant case, - in terms /
pursuance of the same document – i.e. the
agreement for sale (FORM V) entered into for
effecting the sale of ‘flat’as such. To put it
differently, if promoter does not do so or does it
any differently, as in contemplation in the instant
case, it / he will be exposing self to legal action, of
every conceivable sort in general, more so on the
ground of having committed an ‘offence’ as
envisaged in inter alia, section 13 and 14 of MOFA
itself. So prefer to leave it as is, following the same
wisdom implied in the SC‘s related cryptic
observations in a related context of the Judgment.
Be that as it may, now, looking into the successive
judgments of HC and SC, it is obvious that both
courts have proceeded on same lines; that is,
inferably, toeing the lines with, and /or conceding /
to following upon the lines of arguments as
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advanced by both sides - on the premise that there
are “questions of law”requiring adjudication. And,
for that purpose, as urged, that an interpretation of
certain words/expressions used in MOFA has to be
embarked on/ gone through.
C) At this juncture the under mentioned aspects, as
commonly understood, and put in a language for a
layperson to easily make out, are essentially
required to be borne in mind:
According to well settled and largely followed
principles / rules, as elicited in a plethora of case
law:
Not all questions are to be regarded as ‘questions
of law’, particularly as requiring a judicial
interpretation. But only any question on which the
position in law is not clear, or not clear enough to
decide single-mindedly and firmly affirm, and hold
that there is only one view possible which could be
intelligently and judiciously (in its profound sense)
held out. And more so, without having to go through
a long drawn argumentative process and reasoning.
In short, an appeal ought not to be entertained
unless the court is satisfied that, legally but strictly
speaking, there is no scope for holding a contrary
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view or a better one at that to please the eyes of
law.
In the instant case, counsels are seen to have gone
on, so to say, to convince the court on the merits or
otherwise of own independent arguments. In doing
so, they are seen to have harped on mainly the
statutory definitions of the words, - ‘flat’, ‘common
areas and facilities’, ‘garage’, so on.
In doing so, however, it is noted that, court’s
attention has not been drawn to, besides others, -
hence not considered by the court(s) –the following
intricate facets:
(a) The opening words of section 2 of the MOFA,
which reads, -
“Definitions. –In this Act, UNLESS THE
CONTEXT OTHERWISE REQUIRES, - “
(b) The principle of interpretation that has been
receiving more and more attention of courts,
in recent times, graphically described as,
“UPDATING CONSTRUCTION”.
The said principles, in a manner of urging, may
have to be construed to be an extension of the
other rules of interpretation enunciated by courts in
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decided cases, commonly to aid ascertainment of so
called “Contextual Meaning”.
Those and the other appropriate rules of
interpretation could have been summoned for
assisting/useful guidance, in the exercise of
interpretation gone through; which, however, has
not been done in the course of arguments by both
the sides.
As is imagined, perhaps, had the foregoing been
argued and relied upon, the court would have been
convinced that the correct position in law is readily
decipherable, even without having to go through the
long drawn process of reasoning as urged by the
parties.
In the Judgment, the main observations refer to the
mandatory provisions of section 10 and section 11
of MOFA. Those provisions, if closely read and
incisively understood, are sure to have been noted
to be clarificatory and self-sufficient enough for
concluding that the promoter’s action in retaining
some stilt parking slots, with intent to sell
separately, that is outside of and after execution
and registration of the “agreements to sell”is in
any case, a misguided action / misadventure, and
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clearly in contravention of the scheme of the
provisions of sections 11 and 12 of MOFA. To be
precise, the point sought to be made is. even as per
a plain and straight forward reading of only
sections 11 and 12, on a standalone basis, the point
of dispute would have come to be settled no
differently than now. That is, without having had to
go through the painful long drawn process of
“interpretation” resorted to, of the words/
expressions namely, ‘flat”, “garage”and “common
areas and facilities”and “limited”“common areas
and facilities”.
On the aspect of principles of interpretation to be
borne in mind, what are categorised as External
Aids are of the utmost importance. ‘Legislative
History and Background’is one of them, to be taken
as of significant relevance herein.
As lucidly summed up in text books:
The legislative history of a statute could be traced
and considered to understanding its scope. Held
permissible for ascertaining the evil sought to be
remedied.
Further, to sustain the presumption of
constitutionality, consideration may be had even to
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matters of common knowledge, the history of the
times and every conceivable state of facts existing
at the time of legislation. Therefore, due
importance must be given to the legislative history,
context and background.
It is permissible to look into the Statement of
Objects and Reasons of the Bill for the purpose of
appreciating the background and the antecedent
factual matrix leading to the legislation. Also, for
finding out the intention of the legislature and to
interpret and determine the true scope of the
provision, provided of course, there be ambiguity in
a genuine sense.
The words and expressions defined in one statute
as judicially interpreted do afford a guide to the
construction of same words or expressions used in
another , should both statutes are pari materia
legislations or it is specifically provided in one
statute to give the same meaning to the words as
defined in another statute.
Had these been kept in focus, as would have been
ideally expected, and brought up in the course of
the proceedings, as one sees it, there could have
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been no justification for the dispute to have been
settled in better light?
SC in re. PODAR CEMENT
This write-up herein might not be complete without
drawing attention to the earlier one attempted in
this series, and posted @LAW and ('vs'?) CASE LAW On
“FLATS”–A Critical Study - TaxGuru. That represents a case
study of the SC judgment delivered in re CIT vs
Podar Cement Ltd. (reported on this website
@Owner vs Beneficial Owner- of Flats ; also in 226
ITR 625). In which, the concept of “PRECEDENT”,
having regard to the factual matrix of that case, has
been specially brought out in detail, which is of a
direct relevance herein as well.
Some of the other aspects covered / viewpoints
shared in that article, with particular reference to
the same property holder’s rights in flats as in the
instant case, would be of common relevance.
That is a case in which, as distinct from the instant
case, the predominant issue concerned a dispute
between the Revenue and taxpayer, Nonetheless,
what needs to be pinpointed/noted is that, the apex
court, in dealing with the connected aspect, of the
rights of a holder of flats in a building complex, has
followed a diagonally opposite line of reasoning, as
distinct from the instant case. For a useful hint, in
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that case,- the ruling is to the effect that the most
essential criterion of all, underlying the concept of
“ownership”, so as to satisfy the acid test of
“ownership”, the pre-requisites,- to quote from the
judgment –are mainly these:
“(a) The power of enjoyment (e.g., the
determination of the use to which the res is to
be put, the power to deal with produce as he
pleases, the power to destroy);
(b) possession which includes the right to
exclude others;
(c) power to alienate inter vivos, or to charge
as security;
(d) power to leave the res by will.
The Judgment further reads: “One of the most
important of these powers is the right to exclude
others. The property right is essentially a
guarantee of the exclusion of other persons from
the use or handling of the thing…But every owner
does not possess all the rights set out above—a
particular owner’s powers may be restricted by law
or by an agreement he has made with another.
(refer to G.W. Paton on Jurisprudence, 4th edn., pp.
517-18)”
For getting a full grip of the ratio of the said court
decision, so as to appreciate why the ruling in that
case is not reconcilable but prima facie contradicts
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the ruling in the instant case, it is strongly
suggested, may be read, in full.
EPILOGUE
For underlining and driving home effectively certain
related humane aspects, it may be, not out of
context but, appropriate to share the outstanding
wisdom of a legal luminary, - a great thinker and
humanist of our times, all rolled into one,- behind
the following quotes:
LAWYERS, PRESS, JUDICIARY
Lawyers
In a vast democracy like India, many citizens
are bound to be undimensional. But no lawyer
has any excuse for being undimensional. By
his learning and equipment and by his
professional competence he is better qualified
than the rest of the citizenry to take an active
part in the making of laws and their formulation
of public policies. He would be failing his
country if he did not do his duty. The lawyer
has to act as a catalyst. The responsibilities
which today lie on the shoulders of the lawyers
are far greater than at any time in world
history.
We produce lawyers who seem lost without case
law to support their propositions. The average
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lawyer, who finds himself without a precedent to
cite, is like a tycoon without balance sheet, jazzman
without a trumpet, a gossip without a club.
A lawyer with a well furnished mind alone can be
truly a counsellor at law; he alone can, not merely
look up precedents, but guide his client along the
path of wisdom, even of generosities which may
appear irrelevancies to the preoccupied client. In
the hands of such a lawyer, the law represents the
application of reason to noble and purposeful ends.
Man has been defined as a rational animal. But
you cannot live in India without being
constantly reminded that this definition was
given to man by man himself in a characteristic
moment of self-adulation.
In the last..decades, we have taken plenty of
wrong turns at the crossroads , misused time,
taken gold for dross and dross for gold;
however, would like to reaffirm my
unquenchable confidence in the long-term
future of India.
To faithfully follow upon and continue to live
with the same spirit and pessimistic outlook, in
the context herein, one may wish to simply add,
-may be, it is, frankly speaking, not but too late
in the day to even realise the gravity of the
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obtaining scenario; but that is not to say, by
any yardstick used for measuring time, it may
not be late for everyone concerned to wake up
to the realities all around only to think of and
striving own best for bringing about a change /
improvement for a better tomorrow (!).
The New York State Legislature passed a major
Piece of consumer legislation in 1977 to ensure
that laws affecting common people would be
“plain- language laws”. Attempt to likewise
cure our laws of their incredible fuzziness is
more than overdue, by decades.
There can be no excellence in the law without
excellence in lawyers.
JUDICIARY
Quoting Pathak J, from a landmark SC Judgment,
observed:
Q
......The responsibility fixed on the court is serious
one. And there is no need to warn that this power
...can have grave consequences if the content of its
potential is not truly appreciated and realized by
those who wield it. Whenever a Court breaks new
ground, the development and recognition of new
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rights is often accompanied by the birth of
problems surfacing also for the first time..... UQ
Source: ‘Memorial’lecture delivered on the
subject of SC’s judgment in “the Judges’case”
PRESS
The Press must make a sharp distinction between a
story, the publication of which is dictated by public
interests, and a story which is entirely sleazy ad
sensational. Not only has the right but also duty to
expose the truth fully.
(TO add: In any event, the Press has a
basic duty not to give undue publicity or
unduly project and propagate anything, the
nuisances of which even a law expert may
have no competence to be reasonably sure
on or explain satisfactorily if questioned, -
as to what is “the truth”, or attendant
misconception)
Unfortunately, the 1980s has been a degraded
decade- even progressions like the legal,
accountancy and medical professions, have
become commercialized. The same evil has
afflicted journalism. Professions have sunk to
the lower level of business. We are living in
times when professional or business ethics
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sounds like an oxymoron, a contradiction like a
hot ice –cube or a tiny giant. Today the main
idea of most newspapers, journals or magazines
is to maximise readership, regardless of the
higher values which ought to animate
journalism.>
In a lighter vein, a reading of above leaves one, even though not
normally used to or has a fancy to exaggerate or eulogize, with an
unpredictable urge to visualize or admire the tax gatherers’
exemplary forethought in giving no different status to the two, -
professionals and businessmen. Reference is to the long-range vision
and wisdom in framing and bringing to taxation even as long back as
in 1922, income of both under the same head, - old section 10 (1)
(new section 28) of IT Act.
<> The above are quotes from the memorable
published articles and speeches, of legal legend,
Palkhivala, a widely acclaimed scholar par
excellence, with the backing of his erudite
knowledge, also lifelong exposure and practical
experience in the field of law practice.
(Source: WE, THE PEOPLE and We, the
Nation; the two books are worthwhile to be
read not once but times over as one will do
of the Bible, the Bhagavad Geeta, or the
like)
These are being shared in the fervent hope that
may serve, as intended, the purpose of inciting,
inducing, or provoking the others to appreciate, and
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try and imbibe the righteous spirit and public-
centric approach.
Tail Piece:
To end with an optimistic note:-
No doubt, as things stand as of now, there appears
to be no scope for hoping, in the foreseeable future,
any positive or sincere move forward from the men
in governance, either in the states or at the centre,
towards a change in the overall scenario, for the
better.
In the interim, the only hope on hopes that could
provide some solace is that, the Judiciary, noted
and commended of late for its proactivism, may not
waver in its endeavours but think of and come to
the rescue, by providing some relief/bring succour
to the thus far victimised buying community -
purchasers /owners of flats or apartments. What is
immediately called for is the realisation by the
judiciary of the need for construing the extant state
enactments (governing the construction and sale of
multi-storeyed buildings / ‘units’thereof), not only
of Maharashtra but of every other State, in such a
manner as to, not to resort to a technical or hyper
technical approach, with the sole aim of bringing
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home justice to the investing public. As said herein
before, that could be attempted and accomplished,
to begin with, by construing the enactment (s)
cohesively; that is, as legislation for saving and
protecting the lawful rights of the investing people
spoken of herein. May be, desirably do so, suo
motu; say, by treating the matter as one deserving
to be taken on as a PIL. Alternatively, do so on the
very next occasion the court is called upon to opine
in the matter.
Disclaimer: The foregoing brief analysis is intended to convey own
thoughts and viewpoints, based on an independent study of the covered
limited aspects. Welcome to share, should anyone, especially a
competent law expert in field practice, entertain any doubt or has a
better view to offer after an independent study, so as to serve the
objective of common good.
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