MOFA and additional construction: consent dispensed with only for disclosed layout-based development, not indefinite delay of conveyance

MOFA's amended scheme on additional construction is explained as permitting further development without prior consent only where it forms part of the project disclosed in the approved layout plan. Section 7A does not create an unrestricted right to keep developing the property or to defer conveyance until all development potential is exhausted. The promoter's continuing duties of full disclosure under Sections 3 and 4, and the statutory obligations relating to society formation and transfer of title under Sections 10 and 11, remain in force. The article also identifies the project characterisation as decisive, because whether the scheme involved one building with wings or separate additional buildings determines the reach of Sections 7(1)(ii) and 7A and the timing of conveyance.

---

---

Issues: (i) Whether the amended provisions relating to additional construction under MOFA permitted the promoter to claim a right to carry out further development without prior consent of flat takers and to defer conveyance until the entire development potential of the plot was exhausted. (ii) Whether the project in question was a single-building scheme with wings or a scheme for additional buildings, so as to determine the applicability of Section 7(1)(ii) and Section 7A of MOFA and the time when the obligation to convey title arose.

Issue (i): Whether the amended provisions relating to additional construction under MOFA permitted the promoter to claim a right to carry out further development without prior consent of flat takers and to defer conveyance until the entire development potential of the plot was exhausted.

Analysis: The statutory scheme of MOFA was held to require a balance between the promoter's right to develop the property and the statutory obligations of disclosure, formation of society, and conveyance. Section 7A removed the requirement of prior consent for additional construction where the construction formed part of a scheme or project in the layout plan, but it did not create an indefinite right to postpone conveyance. The promoter's obligations under Sections 3 and 4, including full disclosure of the FSI and development potential, remained mandatory, and Sections 10 and 11 continued to govern formation of the society and transfer of title. The right to additional construction thus depended on the approved plan and the nature of the project disclosed at the outset.

Conclusion: Section 7A did not confer an unrestricted or perpetual right on the promoter to delay conveyance until all development potential was exhausted.

Issue (ii): Whether the project in question was a single-building scheme with wings or a scheme for additional buildings, so as to determine the applicability of Section 7(1)(ii) and Section 7A of MOFA and the time when the obligation to convey title arose.

Analysis: The High Court was found to have failed to determine the crucial factual question whether the original layout envisaged one building with seven wings or separate buildings. That characterization was decisive both for the applicability of Section 7(1)(ii) and Section 7A and for deciding whether the promoter's obligation to convey title had matured. The matter also required examination of the sanctioned plans, the ULC permission, the amendments to the layout plan, and the agreement with flat takers. Since this foundational issue had not been properly adjudicated, the matter required reconsideration.

Conclusion: The impugned judgment was set aside and the matter was remitted for fresh consideration on the decisive factual and legal questions.

Final Conclusion: The legal position under MOFA was clarified to the extent that additional development must be tested against the scheme disclosed in the approved layout and the promoter's continuing statutory duties of disclosure and conveyance; however, because the decisive factual character of the project had not been determined, the matter was sent back for reconsideration.

Ratio Decidendi: Section 7A of MOFA removes the need for flat takers' consent for additional construction only where such construction is part of the project disclosed in the approved layout, and it does not postpone the promoter's statutory obligation to convey title once that obligation becomes enforceable under Sections 10 and 11.

---