MAHARASHTRA OWNERSHIP FLATS (REGULATION OF THE PROMOTION OF CONSTRUCTION, SALE, MANAGEMENT AND TRANSFER) ACT, 1963

MAHARASHTRA OWNERSHIP FLATS (REGULATION OF THE PROMOTION OF CONSTRUCTION, SALE, MANAGEMENT AND TRANSFER) ACT, 1963

Preamble - THE MAHARASHTRA OWNERSHIP FLATS (REGULATION OF THE PROMOTION OF CONSTRUCTION, SALE, MANAGEMENT AND TRANSFER) ACT, 1963

THE MAHARASHTRA OWNERSHIP FLATS (REGULATION OF THE PROMOTION OF CONSTRUCTION, SALE, MANAGEMENT AND TRANSFER) ACT, 1963

[Act No. 45 of 1963][1]

[16th December, 1963]

PREAMBLE

An Act to regulate [2] [* * *], in the State of Maharashtra, the promotion of the construction of, the sale and management, and the transfer of flats on ownership basis.

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 of Maharashtra, 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 are increasing;

AND WHEREAS, the Government in order to advise itself as respects the manner of dealing with these matters appointed a Committee by Government Resolution in the Urban Development and Public Health Department No. S. 248-79599-F, dated the 20th May, 1960, to inquire into and report to the State Government on the several matters referred to aforesaid with the purpose of considering measures for their amelioration;

AND WHEREAS, the aforesaid Committee has submitted its report to Government in June 1961, which report has been published for general information;

AND WHEREAS, it is now expedient after considering the recommendations and suggestions made therein, to make provision during the period of such shortage of housing, for the regulation of the promotion of the construction, sale and management and transfer, of flats taken on a ownership basis in the State of Maharashtra; 

It is hereby enacted in the Fourteenth Year of the Republic of India as follows :-

Section 1 - Short title, extent and commencement

Short title, [3] [extent and commencement]

(1)     This Act may be called the Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) Act, 1963.

(2)     It extends to the whole of the State of Maharashtra.

(3)     This section shall come into force at once; and the remaining provisions of this Act shall come into force in [4] [such] areas, and on such dates as the State Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different areas.

[5] [(4) * * *]

[6] [(5) * * *]

Section 2 - Definitions

In this Act, unless the context otherwise requires,-

[7] [(a) "Competent Authority" means a Competent Authority appointed under section 5A;]

[8] [(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 [9] [or for carrying on any industry or business] (and includes a garage), the premises forming part of a building [10] [and includes an apartment].

Explanation. - Notwithstanding that provisions 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 ;

(b)?? ?"prescribed" means prescribed by rules made under this Act;

(c) ? [11] ["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 [12] [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;

(d) ???"Registrar" means the Registrar as defined in the Maharashtra Co-operative Societies Act, 1960, or, as the case may be, in the Companies Act, 1956;

(e) ??"to construct a block or building of flats 2[or apartments]" includes to convert a building or part thereof into flats 2[or apartments];

[13] [(f) the expressions, "apartment" and " apartment owner" shall have the meanings, respectively assigned to them in the Maharashtra Apartment Ownership Act, 1970.] 

Section 3 - General liabilities of promoter

(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 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, [14] [and have 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)      give inspection on seven days' notice or demand, of the plans and specifications of the building built or to be built on the land; such plans and specifications having been approved by the local authority which he is required so to do under any law for the time being in force;

(d)      disclose the nature of fixtures, fittings and amenities (including the provision for one or more lifts) provided or to be provided;

(e)      disclose on reasonable notice or demand if the promoter is himself the builder, the prescribed particulars as respects the design and the materials to be used in the construction of the buildings, and if the promoter is not himself the builder disclose, on such notice or demand, all agreements (and where there is no written agreement, the details of all agreements) entered into by him with the architects and contractors regarding the design, materials and construction of the buildings;

(f)       specify in writing the date by which possession of the flat is to be handed over (and he shall hand over such possession accordingly);

(g)      prepare and maintain a list of flats with their numbers already taken or agreed to be taken, and the names and addresses of the parties and the price charged or agreed to be charged therefor, and the terms and conditions if any on which the flats are taken or agreed to be taken;

(h)     state in writing, the precise nature of the organisation of persons to be constituted and to which title is to be passed, and the terms and conditions governing such organisation of persons who have taken or are to take the flats;

(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)       make a full and true disclosure of all outgoings (including ground rent, if any, municipal or other local taxes, taxes on income, water charges and electricity charges, revenue assessment, interest on any mortgage or other encumbrances, if any); (k) make a full and true disclosure of such other information and documents in such manner as may be prescribed; and give on demand true copies of such of the documents referred to in any of the clauses of this sub-section as may be prescribed at a reasonable charge therefor; 

[15] [(l) display or keep all the documents, plans or specifications (or copies thereof) referred to in clauses (a), (b) and (c), at the site and permit inspection thereof to persons intending to take or taking one or more flats; 

(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 installments thereof may be paid; 

(iii) ??the nature, extent and description of the common areas and facilities; and (iv) the nature, extent and description of limited common areas and facilities,if any.] 

[16] [(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.]

NOTES Statement of Objects and Reasons.--The Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) Act, 1963, has been enacted to regulate the promotion of the construction of, the sale and management and the transfer of flats on ownership basis and to effectively prevent the sundry abuses and malpractices which were on the increase, consequent upon the acute shortage of housing in several areas of the State.

It has come to the notice of the State Government that the promoters are not selling the flats on the basis of carpet area. The flat purchaser is often unable to understand exactly the difference between Carpet Area, Built-up area and super Built-up Area of a flat. As a result the objective behind the said enactment is not fully achieved.

The Government of Maharashtra has declared a New Housing Policy, aimed at preventing such malpractices, which, inter alia, provides that the sale and purchase transactions of the flats shall be on the basis of the carpet area only. To give effect to the said policy, it is necessary to amend the Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) Act, 1963, to provide that the promoter shall sell the flat on the basis of the carpet area of the flat, and may separately charge for common areas and facilities, in proportion to the carpet area of such flat.--[Mah. Act 23 of 2008.]

It was held by the High Court in the case of Leela Enterprises v. Bombay Municipal Corporation & Ors., 2006 (2) Bom. C.R. 368 that Act enacted for the benefit if the flat purchaser, obtaining building permission is condition precedent for executing an agreement for sell of flat. Lawprovide inspection of sanction plan before execution.

Section 4 - Promoter before accepting advance payment or deposit to enter into agreement and agreement to be registered

[17] [(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 [18] [the Registration Act, 1908 (hereinafter in this section referred to as "the Registration Act")] [19] [and such agreement shall be in the prescribed form.]

[20] [(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)      the date by which the possession of the flat is to be handed over to the purchaser;

(iii)     the extent of the carpet area of the flat including the area of the balconies which should be shown separately; 

(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; and the intervals at which installments thereof may be paid; 

(v)      the precise nature of the organisation to be constituted of the persons who have taken or are to take the flats; 

(vi)    the nature, extent and description of the 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 of which the flat is intended and restriction of 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)      copies of documents,-

(i)       the certificate by an Attorney-at-law or Advocate under clause (a) of sub-section (2) of section (3); 

(ii)      Property Card or extract of Village Forms VI or VII and XII or any other relevant revenue record showing the nature of the title of the promoter to the land on which the flats are constructed or are to be constructed; 

(iii)     the plans and specifications of the flat as approved by the concerned local authority.] 

[21] [(2) Any agreement for sale entered into under sub-section (1) shall be presented by the promoter or by any other person competent to do so under section 32 of the Registration Act, at the proper registration office for registration, within the time allowed under sections 23 to 26 (both inclusive) of the said Act and execution thereof shall be admitted before the registering officer by the person executing the document or his representative, assign or agent as laid down in sections 34 and 35 of the said Act also within the time aforesaid:

Provided that, where any agreement for sale is entered into, or is purported to be entered into, under sub-section (1), at any time before the commencement of the Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) (Amendment and Validating Provisions) Act, 1983, and such agreement was not presented for registration, or was presented for registration but its execution was not admitted before the registration officer by the person concerned, before the commencement of the said Act, then such document may be presented at the proper registration office for registration, and its execution may be admitted, by any of the persons concerned referred to above in this sub-section, on or before the 31st December, 1984, and the registering officer shall accept such document for registration, and register it under the Registration Act, as if it were presented, and its execution was admitted, within the time laid down in the Registration Act :

Provided further that, on presenting a document for registration as aforesaid if the person executing such document or his representative, assign or agent does not appear before the registering officer and admit the execution of the document, the registering officer shall cause a summons to be issued under section 36 of the Registration Act requiring the executant to appear at the registration office, either in person or by duly authorised agent, at a time fixed in the summons. If the executant fails to appear in compliance with the summons, the execution of the document shall be deemed to be admitted by him and the registering officer may proceed to register the document accordingly. If the executant appears before the registering officer as required by the summons but denies execution of the document, the registering officer shall, after giving him a reasonable opportunity of being heard, if satisfied that the document has been executed by him, proceed to register the document accordingly.]

NOTES

Statement of Objects and Reasons.--A number of promoters did not register the agreements executed by them under section 4 in spite of the clear and specific provision in that section and the penal provision made in section 13. In the Association of Commerce House Block Owners Limited v. Vishndas Samaldas, (1981) 83 Bom. L.R. 339, the High Court had held that section 4 contains an absolute enactment, which must be obeyed absolutely. If such absolute enactment was not obeyed, the consequence is that the agreement between the promoter and the purchaser was wholly invalid and altogether void, creating no rights between the parties. In view of this judgment hundreds of purchasers were not able to take proceedings for specific performance of such agreements and to get conveyance from the promoter for transferring his right, title and interest to them. Taking advantage of the situation, the very purpose of the Act of safeguarding the rights of the bona fide purchasers is being defeated by the bad conduct of some of the promoters, Moreover, non-registration of large number of such documents entails loss of revenue to Government, because the registration fee payable to Government was being evaded.

It was, therefore, necessary to undertake legislation to validate the non-registered agreements and to give to the promoters or the persons claiming rights under such agreements, an opportunity to get them registered, within a reasonable period upto the 3lst December, 1984, so that these agreements, may again become enforceable. Thereby Government will get its due revenue from registration fees on the agreements, which will then be presented for registration. It was also necessary to provide, as a permanent safeguard on the lines of the proviso to section 49 of the Registration Act, 1908 (XLI of 1908), that if any agreement entered into under section 4(1) of the Ownership Flats Act remains unregistered for any reasons, it can be received as evidence for certain purposes specified in section 4A inserted in the Ownership Flats Act. The Act seeks to achieve this objects. (M.G.G. Pt. V. 1983, p. 449).

Norms or format of contract.--In this case the plaintiff has sued for specific performance of an agreement/contract of sale/purchase of the suit premises and incidental reliefs. The strict norms or format is not a mandatory requirement for a writing to constitute a contract between the parties though a formal agreement incorporating the entitlement of the flat purchasers under a MOFA is a statutory requirement.

The specific performance is a discretionary remedy and the relief of injunction is an equitable relief. If a specific contract between the parties is made out, the property contracted for deserves to be protected pending the suit.--Sushil Javahar Shivdasani v. Air Inn Put Ltd., 2009 (2) All M.R. 53; See also Panchanan Dhara v. Monmatha Nath Maity, 2006 (5) SCC 340.

Section 4A - Effect of non-registration of agreement required to be registered under section 4

[22] [Where an agreement for sale entered into under sub-section (1) of section 4, whether entered into before or after the commencement of the Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) (Amendment and Validating Provisions) Act, 1983, remains unregistered for any reason, then notwithstanding anything contained in any law for the time being in force, or in any judgement, decree or order of any Court, it may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1963, or as evidence of part performance of a contract for the purposes of section 53A of the Transfer of Property Act, 1882, or as evidence of any collateral transaction not required to be effected by registered instrument.]

Section 5 - Promoter to maintain separate account of sums taken as advance or deposit and to be trustee therefor; and disburse them for purposes for which given

The promoter shall maintain a separate account in any bank of sums taken, by him, from persons intending to take or who have taken flats, as advance or deposit, including any sums so taken towards the share capital for the formation of cooperative society or a company, or towards the outgoings (including ground rent, if any, municipal or other local taxes, taxes on income, water charges, electricity charges, revenue assessment, interest on any mortgage or other encumbrances, if any); and he shall hold the said moneys for the purposes for which they were given and shall disburse the moneys for those purposes and shall on demand in writing by [23] [a Competent Authority], make full and true disclosure of all transactions in respect of that account.

Section 5A - Competent Authority

[24] [The State Government may by notification in the Official Gazette, appoint an officer, not below the rank of the District Registrar of Co-operative Societies, to be the Competent Authority, for an area or areas to be specified in such notification and different officers may be appointed as Competent Authority for different local areas, for the purposes of exercising the powers and performing the duties under sections 5, 10 and 11 of this Act.]

NOTIFICATION No. MO. 2008/CR-24/(Part-II)/RR-2, dated 23rd June, 2008 (M.G.G., Pt. IV-B, pp. 636-638)

n exercise of the powers conferred by section 5-A of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 (Mah. XLV of 1963), the Government of Maharashtra hereby appoints the Officers specified in column (2) of the schedule, appended hereto to be the Competent Authorities for the areas, respectively, specified against them in column (3) of the said schedule for the purposes of exercising the powers and performing the duties under sections 5, 10 and 11 of the said Act.

Section 6 - Responsibility for payment of outgoings till property is transferred

A promoter shall, while he is in possession and where he collects from persons who have taken over flats or are to take over flats sums for the payment of outgoings even thereafter, pay all outgoings (including ground rent, municipal or other local taxes, on income taxes, water charges, electricity charges, revenue assessment, interest on any mortgage or other encumbrances, if any), until he transfers the property to the persons taking over the flats, or to the organisation of any such persons, [25] [where any promoter fails to pay all or any of the outgoings collected by him from the persons who have taken over flats or are to take over flats, before transferring the property to the persons taking over the flats or to the organisation of any such persons, the promoter shall continue to be liable, even after the transfer of the property, to pay such outgoings and penal charges (if any) to the authority or person to whom they are payable and to be responsible for any legal proceedings which may be taken therefor by such authority or persons.]

NOTES

Statement of Object and Reasons.--The responsibility of the promoter who collects sums for the payment of outgoings to pay such outgoings until he transfers the property to the organisation of Flat Owners is placed statutorily on the promoter. This Act further amended by Mah. Act No. 36 of 1986 to provide that where any promoter fails to pay all or any of the outgoings collected by him before transferring the property to persons who have taken over flats or their organisation, the promoter shall continue to be liable, to pay such outgoings even after the transfer of the property and be responsible for any legal proceedings which may be taken therefore by any authority or person for the recovery of the dues (M.G.G., Part V 1986 p. 410).

Section 7 - After plans and specifications are disclosed no alterations or additions without consent of persons who have agreed to take the flats; and defects noticed within three years to be rectified

[26] [three years]

(1)     After the plans and specifications of the building, as approved by the local authority as aforesaid, are disclosed or furnished to the person who agrees to take one or more flats, the promoter shall not make ?

(i)       any alteration in the structures described therein in respect of the flat or flats which are agreed to be taken, without the previous consent of that persons; 

[27] [(ii) any other alterations or additions in the structure of the building without the previous consent of all the persons who have agreed to take flats in such building.] 

(2)     Subject to sub-section (1), the building shall be constructed and completed in accordance with the plans and specifications aforesaid; and if any defect in the building or material used, or if any unauthorised change in the construction is brought to the notice of the promoter within a period of [28] [three years] from the date of handing over possession, it shall wherever possible be rectified by the promoter without further charge, to the persons who have agreed to take the flats, and in other cases such person shall be entitled to receive reasonable compensation for such defect or change. Where there is a dispute as regards any defect in the building or material used, or any unauthorised change in the construction, [29] [or as to whether it is reasonably possible for the promoter to rectify any such defect or change, or as regards the amount of reasonable compensation payable in respect of any such defect or change which cannot be, or is not, rectified by the promoter,] the matter shall, on payment of such fee as may be prescribed [30] [and within a period of three years from the date of handing over possession, be referred for decision, (i) in an urban agglomeration as defined in clause (n) of section 2 of the Urban Land (Ceiling and Regulation) Act, 1976, to such competent authority authorised by the State Government under clause (d) of section 2 of that Act, and (ii) in any other area, to such Deputy Chief Engineer or to such other officer of the rank equivalent to that of Superintending Engineer in the Maharashtra Service of Engineers, of a Board established under section 18 of the Maharashtra Housing and Area Development Act, 1976, as the State Government may, by general or special order, specify in this behalf. Such competent authority, Deputy Chief Engineer or, as the case may be, the other officer of a Board shall, after inquiry, record his decision, which shall be final.]

NOTES

Statements of Objects and Reasons,-Maharashtra Act No. 36 of 1986 has further amended section 7 so as to extend the time limit for bringing to the notice of promoter any defect in the building or material used or any unauthorised change in the construction from one year to three years from the date of handing over possession. It also provides that disputes as regards any defect in the building or material used shall be referred within a period of three years instead of within two years as at present to such competent authority in an urban agglomeration or to such Deputy Chief Engineer or to such other officer of the rank equivalent to that of Superintending Engineer in the Maharashtra Service of Engineers of a Board established under section 18 of the Maharashtra Housing and Area Development Act, 1976 as the State Government may by general or special order specify in this behalf.--(M.G.G., Pt. V of 1986, p. 410).

In the instant case motion of interim relief arises in a suit which has been instituted principally to enforce the obligation of the developer under the Man. Ownerships Flats Act, 1963. While considering the contentions made by the Council appearing on behalf of the plaintiffs and also Counsel for defendant, the High Court held that section 7(l)(ii) prohibits alteration in approved plans without consent of purchasers. Section 7-A was added in 1986 to make this position all more explicit. The Apex Court in the case of Jayantilal Investments v. Madhuvihar Co-op. Hsg. Society, 2007 DGLS (Soft) 26 : 2007 (9) SCC 220 : AIR 2007 SC 1011 has held that clauses (3) and (4) of Model Form are of statutory nature and promoter/developer is required to make full disclosure about potentiality of plot, as to additional FSI or TDR etc. Once it is so disclosed at the time of agreement, no further consent of flat purchasers will be required. This consent however has to be an informed consent and not a general consent. Court has therefore to adopt purposive interpretation clauses of agreement.

In view of this the Court observed that the construction of 18th floor which is to be constructed in the instant case is in breach of obligation cast on developer in terms of section 7(1) of the Act. The High Court allowed the notice of motion in terms of prayers.--Bqjranglal Eriwal & Ors. v. Sagarmal Chunilal & Ors., 2008 (6) Bom. C.R. 887 : 2008 (5) Man. L.J. 571 : 2008 (6) AIR Bom. R. 312.

Modified building plan without consent of flat owners violates rights of flat holders.--In this case it was held by the High Court that amenities of flat holders would be reduced if construction is allowed in accordance with modified form, then the plaintiffs are entitled to injunc-

tion, restraining defendant from carrying on construction in accordance with modified plan. The Supreme Court in the case of M/s. Jayantilal Investment v. Madhuvihar Co-op. Hsg. Society, 2007 DGLS (Soft) 26 : 2007 (2) All M.R. 398 : 2007 (9) SCC 220 : AIR 2007 SC 1011, observed that every agreement between the promoter and the flat taker shall comply with the prescribed Form 5. In that prescribed form there is a explanatory note which inter alia states that clauses (3) and (4) shall be statutory and mandatory and shall be retained in each and every individual agreement between the promoter and flat taker.--MeghRatan Co-op. Hsg. Society Ltd. v. Rushabh Rikhav Enterprises & Ors., 2009 (1) Bom. C.R. 361.

The same point was discussed in the case of White Towers Co-op. Hsg. Society Ltd. v. S. K. Builders & Ors., 2008 (6) Bom. C.R. 371 : 2008 (4) Mah. L.J. 894 : 2008 (4 All M.R. 838 (D.B.). The Apex Court in the case of Jayantilal Investments v. Madhu Vihar Co-op. Hsg. Society has ruled that rules 3 and 4 of the Mah. Ownership Flats Rules, 1964 are declared as statutory and mandatory by Legislature and promoter is not only obliged to give particulars of land amenities, facilities and also make full disclosure of development potentiality of plot and place same before flat purchaser. Therefore a part of a plot is to be amalgamated or excluded from projects and it is not disclosed to purchasers, it would be contrary to rules and decision in 2007 DGLS (Soft) 26.

Registrar and Divisional Joint Registrar have the power to determine whether person is entitled to become a member or not. Sections 22 and 23 of the Mah. Co-operative Societies Act have to be harmoniously construed. In this case the society had opposed the admission of new member on flats constructed in breach of section 7 of M.O.F.A. was entitled to go into legality of the same. It is not open for society to reject membership if construction was illegal, it could be corrected by civil suit. The High Court restored the order of the Deputy Registrar and set aside the order of Divisional Joint Registrar.--Videocon Appliances Ltd. v. Maker Chambers V. Premises Cooperative Society Ltd. & Ors., 2006 (1) Bom. C.R. 6 : 2006 (1) All M.R. 97 : 2005 (4) Bom. L.R. 198.

Section 7A - Removal of doubt

[31] [For the removal of doubt, it is hereby declared that clause (ii) of sub-section (1) of section 7 having been retrospectively substituted by clause (a) of section 6 of the Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) (Amendment) Act, 1986 (hereinafter in this section referred to as "the Amendment Act"), it shall be deemed to be effective as if the said clause (ii) as so substituted had been in force at all material times; and the expression "or construct any additional structures" in clause (ii) of sub-section (1) of section 7 as existed before the commencement of the amendment Act and the expression "constructed and completed in accordance with the plans and specifications as aforesaid" and "any unauthorised change in the construction" in sub-section (2) of section 7 shall, notwithstanding anything contained in this Act or in any Agreement, or in any judgement, decree or order of any Court, be deemed never to apply or to have applied in respect of the construction of any other additional buildings or structures constructed or to be constructed under a scheme or project of development in the layout after obtaining the approval of a local authority in accordance with the building rules or building bye-laws or Development Control Rules made under any law for the time being in force.]

NOTES 

Construction as per sanctioned modified plan-permissibility-- In this case respondent-plaintiff filed suit for injunction to restrain appellant-defendants from carrying on construction. Local authority had sanctioned modified plan on being satisfied that the defendants were not constructing in excess of what is permissible amenities in the form of recreation ground are, in no way reduced. The Double Bench of Bombay High Court observed that the defendants had prima facte complied with requirements of true and full disclosure. In view of insertion of section 7-A, plea that consent of flat owner was not obtained was not tenable. The High Court refuse to grant injunction.--Manratna Developers, Mumbai v. Megh Ratan Co-op. Hsg. Society Ltd., Mumbai & Ors.. 2009 (2) Man. L.J. 115 (DB).

Section 8 - Refund of amount paid with interest for failure to give possession within specified time or further time allowed

If -    (a) the promoter fails to give possession in accordance with the terms of his agreement of a flat duly completed by the date specified, or any further date or dates agreed to by the parties, or

(b) ??the promoter for reasons beyond his control and of his agents, is unable to give possession of the flat by the date specified, or the further agreed date and a period of three months thereafter, or a further period of three months if those reasons still exist, then, in any such case, the promoter shall be liable on demand (but without prejudice to any other remedies to which he may be liable) to refund the amounts already received by him in respect of the flat (with simple interest at nine per cent. per annum from the date he received the sums till the date the amounts and interest thereon is refunded), and the amounts and the interest shall be a charge on the land and the construction if any thereon in which the flat is or was to be constructed, to the extent of the amount due, but subject to any prior encumbrances.

Section 9 - No mortgage etc., to be created without consent of parties after execution of agreement for sale

No promoter shall, after he executes an agreement to sell any flat, mortgage or create a charge on the flat on the land, without the previous consent of the persons who take or agree to take the flats, and if any such mortgage or charge is made or created without such previous consent after the agreement referred to in section 4 is registered, it shall not affect the right and interest of such persons.

Section 10 - Promoter to take steps for formation of co-operative society or company

[32] [(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 organisation 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 cooperative society or as the case may be of a company. Nothing in this section shall effect the right of the promoter to dispose of the remaining flats in accordance with the provisions of this Act :

[33] [Provided that, if the promoter fail within the prescribed period to submit an application to the Registrar for registration of society in the manner provided in the Maharashtra Cooperative 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.]

[34] [(2) If any property consisting of building or buildings is constructed or to be constructed [35] [and the promoter submits such property to the provisions of the Maharashtra Apart - ment Ownership Act, 1970, by executing and registering a Declaration as provided by that Act] then the promoter shall inform the Registrar as defined in the Maharashtra Cooperative Societies Act, 1960, accordingly; and in such cases, it shall not be lawful to form any co-operative society or company.

[36] [* * *]

NOTES

Interpretation of Statutes.--Under section ,10(1) of the Ownership Flats Act, a promoter is under obligation to submit an application for registration of society upon minimum number of flat owners required for registration have taken up flats. Section 10(2) of the Act envisages that a promoter is entitled under the provisions of section 2 of Apartment Ownership Flat Act by giving declaration under section 11 of the said Act that sole owner of all flats agree that property will for all purposes be heritable and transferable within meaning of any law for the time being in force.

In instant case agreements to provide that society owners will be registered under Maharashtra Co-operative Societies Act. In this case only a part of land is retained by promoter by which building has been constructed, section 6 of the Mah. Co-operative Societies Act provides that if number of member is 10, society can be registered. In the instant case even so 27 out of 34 member in building meet requirement of 60% stipulated under government policy though government policy cannot override statutory provisions of 10 members. Individual agreement with purchaser provide that different societies will be registered. Therefore, other defence essential amenities of three buildings cannot be divided is not tenable because separate societies can be registered and conveyance can be paid either to individual societies or to a confederation of societies as a stipulated agreement. - Padmavatt Constructions Co. & Ors. v. State of Maharashtra &Anr., 2007 (1) Bom. C.R. 609': 2007 (3) All M.R. 780 : 2007 (3) Mah. L.J. 402 : 2007 (4) AIR Bom. R. 54.

Section 11 - Promoter to convey title, etc., and execute documents, according to agreement

[37] [(1)] A promoter shall take all necessary steps to complete his title and convey to the organisation 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 [38] [or apartment-owners], his right, title and interest in the land and 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 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.

[39] [(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) ??The Competent Authority, on receiving such application, within reasonable time and in any case not later than six months, after making such enquiry as deemed necessary and after verifying the authenticity of the documents submitted and after giving the promoter a reasonable opportunity of being heard, on being satisfied that it is a fit case for issuing such certificate, shall issue a certificate to the Sub-Registrar or any other appropriate Registration Officer under the Registration Act, 1908, certifying that it is a fit case for enforcing unilateral execution of conveyance deed conveying the right, title and interest of the promoter in the land and building in favour of the applicant, as deemed conveyance.

(5) ??On submission by such society or as the case may be, the company or the association of apartment owners, to the Sub-Registrar or the concerned appropriate Registration Officer appointed under the Registration Act, 1908, the certificate issued by the Competent Authority along with the unilateral instrument of conveyance, the Sub-Registrar or the concerned appropriate Registration Officer shall, notwithstanding anything contained in the Registration Act, 1908, issue summons to the promoter to show cause why such unilateral instrument should not be registered as 'deemed conveyance' and after giving the promoter and the applicants a reasonable opportunity of being heard, may, on being satisfied that it was a fit case for unilateral conveyance, register that instrument as 'deemed conveyance'.]

NOTES Enforcement of Development Agreement.--Obligation casts on owners of land of convey not only constructed portion but also his interest in land beneath construction.--Chheda Hsg. Development Corporation v. Bibijam Shaikh Farid & Ors., 2007 (2) Bom. C.R. 587 : 2007 (3) All M.R. 780 : 2007 (3) Man. L.J. 402 : 2007 (4) AIR Bom. 54.

Section 12 - General liabilities of flat-taker

(1)     Every person who has executed an agreement to take a flat shall pay at the proper time and place the price, his proportionate share of the municipal taxes, water and electricity charges, ground rent (if any) and other public charges in accordance with his agreement with the promoter; and where a co-operative society or a company of persons taking the flats is to be constituted, cooperate in the formation of such society or company, as the case may be.

(2)     Any person who has executed an agreement to take a flat and who, without reasonable excuse, fails to comply with or contravenes sub-section (1) shall, on conviction, be punished with fine which may extend to two thousand rupees.

Section 12A - Manager not to cut off, withhold, curtail or reduce essential supply or service

[40] [(1) No person, who is a promoter, or who is in-charge of management or connected with the management of a block or building of flats, whether as member of a managing committee, director, secretary or otherwise, or is responsible for the maintenance thereof (hereinafter in this section referred to as "the manager") shall, without just and sufficient cause, either by himself or through any person, cut off, withhold, or in any manner curtail or reduce, any essential supply or service enjoyed by the person who has taken a flat (or by any person in occupation thereof through or under him) in respect of the flat taken or agreed to be taken by him.

(2) ??The person who has taken or agreed to take the flat or the occupier may, if the manager has contravened the provisions of sub-section (1), make an application to the Court for a direction to restore such supply or service.

(3)? ?If the Court on enquiry finds that the applicant or the person through or under whom he is in occupation has been in enjoyment of the essential supply or service, and that it was cut off or withheld or curtailed or reduced by the manager without just and sufficient cause, the Court shall make an order directing the manager to restore such supply or service before a date to be specified in the order.

(4) ??The manager who fails to restore the supply or service before the date so specified, shall for each day during which the default continues thereafter, be liable upon a further direction by the Court to that effect, to fine which may extend to one hundred rupees.

(5)?? Notwithstanding anything contained in any law for the time being in force, -

(a)      in Greater Bombay, the Court of Small Causes, Bombay,

(b)      in any area for which a Court of Small Causes is established under the Provincial Small Cause Courts Act, 1887, such Court, and

(c)      elsewhere, the Court of the Civil Judge (Senior Division), shall have jurisdiction to decide any application made under sub-section (2), and no other Court shall have jurisdiction to entertain such application. No appeal shall lie from any order made on such application; but in Greater Bombay a bench of two judges of the Court of Small Causes, Bombay, which shall not include the Judge who made such order, and elsewhere the District Court, may for the purpose of satisfying itself that the order made was according to law, call for the case in which such order was made and the Bench or Court aforesaid or the District Judge or any Judge to which the case may be referred by the District Judge, shall pass such order with respect thereto as it or he thinks fit.

(6) ??Any manager who contravenes the provisions of subsection (1) shall, on conviction, be punished with imprisonment for a term which may extend to three months, or with fine, or with both.

(7)? ?The offence under sub-section (6) shall be cognizable, and shall not be triable by any Court inferior to that of a [41] [Metropolitan Magistrate, or a Judicial Magistrate of the First Class].

Explanation 1. - In this section, essential supply or service includes the supply of water, electricity, lights in passages and on stair-cases, and lifts and conservancy or sanitary service.

Explanation II. - For the purposes of this section, withholding any essential supply or service shall include acts or omissions attributable to the manager on account of which the essential supply or service is cut off by the local authority or any other competent authority.]

NOTES Statement of Objects and Reasons.--Government noticed that unscrupulous promoters of ownership flats and sometimes even flat owners themselves, combine against other flat owners to withhold essential supplies and services like water, electricity, common lights, etc., so as to harass and force them to quit, or sell out their flats. It was now found essential that some kind of protection such as was given in the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, be given to persons having ownership flats and their tenants, so that they were protected from this kind of harassment. In the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, section 24 protects the tenant from such harassment by a landlord; but since the relationship of landlord and tenant does not exist between persons withholding essential supplies and services and the flat-owner or his tenant, this protection might not be extended to flat-owners and their tenants. Consequently, it was found necessary to make provisions for the protection of flat-owners and their tenants against the form of harassment which has now become common. This Act is designed to achieve these objects.

Section 13 - Offences by promoters and consequences on conviction

[42] [and consequences on conviction]

[43] [(1) Any promoter who, without reasonable excuse, fails to comply with or contravenes, the provisions of section 3, 4, 5 (save as provided in sub-section (2) of this section), 10 or 11 shall, on conviction, be punished with imprisonment for a term which may extend to three years or with fine, or with both.

(2)? ?Any promoter who commits criminal breach of trust of any amount advanced or deposited with him for the purposes mentioned in section 5 shall, on conviction, be punished with imprisonment for a term which may extend to five years, or with fine, or with both.

(3) ??Any promoter who, without reasonable excuse, fails to comply with, or contravenes, any other provision of this Act or of any rule made thereunder, shall, if no other penalty is expressly provided for the offence, be punished, on conviction, [44] [with imprisonment for a term which shall not be less than six months but which may extend to one year or with fine which shall not be less than ten thousand rupees but which may extend to fifty thousand rupees or with both.]

[45] [(4) When any promoter is convicted of any offence under this Act, except offence under section 12A, such promoter shall be disqualified from undertaking construction of flats for a period of five years from the date of such conviction. However, such disqualification shall not affect the permission for construction of flats already granted before incurring such disqualification and shall also not debar the promoter from seeking or being granted any additional requisite permissions which may be required from the concerned local authorities for completion of constructions already undertaking by him.

(5) ??The Competent Authority shall, on such conviction of a promoter under this Act, subject to the orders of the appellate court, if any, or after the 'expiry of the appeal period, forward the name of the convicted promoter to the local authorities under his jurisdiction, with a direction that such promoter shall not be granted permission under the relevant law for undertaking any construction of flats during the period of such disqualification, specifically mentioning such period.

(6)? ?On receiving such intimation from the Competent Authority, notwithstanding anything contained in any other law for the time being in force, the concerned local authority shall not grant such promoter any permission or licence under the relevant law for construction of flats for a period for which the promoter is so disqualified.

Section 13A - Power of Magistrate to pass sentences under this Act

Notwithstanding anything contained in the Code of Criminal Procedure, 1973, it shall be lawful for a Metropolitan Magistrate or a Judicial Magistrate of the First Class to pass on any person convicted of any offence under this Act a sentence of imprisonment or of fine or both as provided in the relevant section of this Act, in excess of his powers under section 27 of the said Code.]

Section 13B - Competent Authority to be public servant

[46] [The Competent Authority shall be deemed to be a public servant within the meaning of section 21 of the Indian Penal Code.

Section 13C - Proceedings before Competent Authority to be judicial proceedings

All proceedings before a Competent Authority shall be deemed to be the judicial proceedings for the purposes of sections 193 and 228 of the Indian Penal Code.

Section 13D - Competent Authority deemed to be Civil Court for certain purposes

Every Competent Authority shall be deemed to be a Civil Court for the purposes of sections 345 and 347 of the Code of Criminal Procedure, 1973.

Section 13E - Indemnity for acts done in goods faith

No suit, prosecution or any other legal proceedings shall lie against any Competent Authority in respect of anything which is in good faith done or purported to be done by him under this Act.]

Section 14 - Offences by companies

(1)     If the person committing an offence under this Act is a company, every person who at the time the offence was committed was in charge of and was responsible to the company for the conduct of business by the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly :

Provided that, nothing contained in this sub-section shall render any such person liable to such punishment provided in this Act if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.

(2)     Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed with the consent or connivance of, or is attributable to any negligence on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

Explanation. - For the purposes of this section, -

(a)      "company" means a body corporate and includes a firm or other association of individuals; and

(b)      "director" in relation to a firm means a partner in the firm,

Section 15 - Power to make rules

(1)     The State Government may, subject to the condition of previous publication, by notification in the Official Gazette, make rules for carrying into effect the provisions of this Act.

(2)     In particular and without prejudice to the generality of the foregoing power such rules may provide for all or any of the following matters, namely :-

(a)      under section 3, the particulars as respects the design and the materials to be used in the construction of the building and the other information and documents to be disclosed, the manner in which disclosure to be made and the documents of which true copies shall be given by the promoter;

[47] [(b) under section 4, the form of agreement;]

(c)?? ?under section 10, the period within which the promoter shall submit an application for registration of a co-operative society or a company;

(d)?? ?under section 11, the period within which the promoter shall execute the conveyance;

(e) ??any other matter which has to be, or may be, prescribed by rules.

(3)     Every rule made under this section shall be laid as soon as may be after it is made before each House of the State Legislature while it is in session for a total period of thirty days which may be comprised in one session or in two successive sessions, and if, before the expiry of the session in which it is so laid or the session immediately following, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, and notify such decision in the Official Gazette, the rule shall from the date of publication of such notification have effect only in such modified form or be of no effect, as the case may be; so however that any such modification or annulment shall be without prejudice to the validity of anything previously done or omitted to be done under that rule.

Section 16 - Act to be in addition to Transfer of Property Act and to override contract to the contrary

The provisions of this Act, except where otherwise provided, shall be in addition to the provisions of the Transfer of Property Act, 1882, and shall take effect notwithstanding anything to the contrary contained in any contract.

Section 17 - Application of certain provisions to flats already in existence

As respects flats which on the commencement of this Act have already been constructed, or converted, the provisions of sections 2, 6, 8, 9, 10, 11, 12, 13, 14, 15 and 16 apply with the following modifications, that is to say-

(a)      in section 2, in clause (c), the words "means a person who constructs" shall be read as if the words "means a person who has constructed" had been substituted;

(b)      in section 8, if the date specified or agreed to has already passed at the commencement of this Act, then the promoter shall give possession within three months from such commencement of this Act; and if for any reasons beyond his control and of his agent, the promoter has been unable to give possession of the flat within three months from such commencement, he shall give possession thereof within a period of three months thereafter, or a further period of three months if those reasons still exist; and thereafter the promoter shall be liable on demand to refund the amounts on the terms and conditions provided in the said section;

(c)      in section 9, the words and figure "after the agreement referred to in section 4 is registered" shall be read as if the words "after the commencement of this Act" had been substituted;

(d)      in section 10, the words "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" shall be read as if the words "Where the minimum number of persons required to form a co-operative society or a company have taken flats, the promoter shall within three months from the commencement of this Act" had been substituted;

(e)      in section 11, the words and figure "in accordance with the agreement executed under section 4" shall be read as if the words "in accordance with any agreement made in respect thereof had been substituted and the words "within the prescribed period" shall be read as if the words "within three months from the commencement of this Act" had been substituted.

Section 18 - Act not to apply to Housing and Area Development Authority and Boards

[48] [Nothing in this Act shall apply to the Maharashtra Housing and Area Development Authority and the Boards established under the Maharashtra Housing and Area Development Act, 1976.]