Consumer protection: Developer free to form building-wise societies

The National Commission noted that flat purchasers had given informed consent for FSI utilisation, so they could not question the additional construction later

Landowner Raj Kalamadir entrusted Ramniklal Kanji Vera, a developer, with redeveloping a property at Parel in Mumbai by demolishing the old building and constructing one or more new buildings on the plot. The landowner gave the redevelopment rights through an agreement executed in October 2003 and a supplementary agreement executed in August 2004.

 

The developer constructed Shiromani A Wing, comprising 47 flats, and handed over possession in 2007. He later constructed another building, called Shiromani B Wing, with 27 flats, and handed over possession in 2010.

 

While forming the society, 23 flat purchasers voted in favour of a single society, three were neutral, and the remaining 48 opted for two separate societies. The builder accordingly formed two societies. When it came to the execution of conveyance, the A Wing members did not cooperate. Instead, Shiromani A Wing Cooperative Housing Society (CHS), the complainant, approached the National Consumer Disputes Redressal Commission (National Commission) in 2017 with a complaint against the developer, the landowner, and the adjacent Shiromani B Wing CHS. The complainant alleged that the developer had illegally rented out the terrace to Bharti Airtel, converted stilt parking into offices, sold the common space for commercial gains, failed to render accounts, and committed various other breaches.

 

The landowner stated that there was no privity of contract (direct contractual relationship) with the society, so the complaint was not maintainable. The B Wing Society questioned the maintainability of the complaint on the ground that there was no consumer-service provider relationship. The developer contested the complaint, contending that two separate societies were formed because the majority of the members did not want a single society for the two buildings. The developer also contended that the complaint was time-barred as the complainant had filed it nine years after the A Wing flat holders had been put in possession.

 

The National Commission observed that Section 7A of the Maharashtra Ownership Flats Act (MOFA) permits a builder to raise additional construction, subject to the developer having made true and full disclosure to the flat purchasers, as held by the Supreme Court in Jayantilal Investments vs Madhuvihar CHS. The Commission noted that the developer had obtained the specific informed consent of the flat purchasers for the utilisation of FSI (floor space index) and held that it was not proper to question the additional construction put up after approval had been obtained. The Commission also observed that there was no embargo on the formation of two separate societies for the two wings. The Commission observed that the complainant had produced no evidence in respect of the other allegations, such as letting out the terrace and converting open spaces into offices.

 

Accordingly, the Bench comprising Justice Ram Surat Ram Maurya and Bharatkumar Pandya directed the complainant to inform the developer whether it was willing to accept the conveyance along with a proportionate share in the common amenities and recreational area. Upon receipt of an affirmative reply, the Commission directed the developer and the landowner to jointly execute the conveyance within one month. It granted no other relief, compensation, or costs. The Commission dismissed the complaint against Shiromani B Wing CHS.

 

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The writer is a consumer activist