TaxTMI 
TaxTMI 
2010 (8) TMI 816
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....s a Private Limited Company. As a promoter, it developd few properties in Anand Nagar, Dahisar (East), Mumbai and entered into agreements for sale of flats with flat purchasers. The flat purchasers are members of Panchali Co-operative Housing Society Ltd. (for short, 'the Society'). The promoter filed a suit before the Bombay City Civil Court, Bombay for permanent injunction restraining the Society (defendant) from encroaching upon, trespassing and/or in any manner disturbing, obstructing, interfering with its possession in respect of 25 parking spaces in the stilt portion of the building. The promoter set up the case in the plaint that under the agreements for sale it has sold flats in its building and each flat purchaser has right in respect of the flat sold to him and to no other portion. It was averred in the plaint that each flat purchaser has executed a declaration/undertaking in its favour to the effect that stilt parking spaces/open parking spaces shown in the plan exclusively belong to the promoter and that the declarant has no objection to the sale of such spaces by it. The defendant (Society) traversed the claim and set up the plea that the promoter has no right to sell ....
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....he is authorized to sell either to flat purchaser or any outsider. It is part and parcel of the Society building and it cannot be a separate premises available for sale. As soon as the Corporation issues the occupation certificate and the Society is registered, the building as well as the stilt parking spaces, open spaces and all common amenities become the property of the Society. • The stilt parking spaces cannot be put on sale by the developer as he ceases to have any title on the same as soon as the occupation certificate is issued by the Corporation and it becomes 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. The stilt 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. * • Un....
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....e different line of argument. He contended that the provisions of MOFA permit a promoter to sell garage/open/covered car parking space along with the flat. His submission is that MOFA does not define the word 'garage' and that word has to be understood and interpreted in accordance with the plain grammatical meaning and not with reference to DCR which have been framed under MRTP Act having different legislative object. As to whether the stilt parking spaces are 'common areas', Mr. Pravin K. Samdani would submit that MOFA does not list out the 'common areas' and 'limited common areas' while MAOA does define these terms and parking spaces thereunder are 'common areas and facilities' unless otherwise provided in the declaration by the owner of the property. Under MOFA, it is for the promoter and under MAOA, the declarant has to prescribe at the outset the 'common areas' and 'limited common areas'. He referred to Sections 3(2)(h), 4(1)(a)(v), 10 and 11 of the MOFA and submitted that the promoter must at the outset indicate the nature of organization (condominium or society or company) that would be formed at the time of sale of flats and on formation of such organization, the promoter ....
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....expression 'set of premises'; it is the alternative to the 'set of premises' and not merely to the different users of the set of premises mentioned in Section 2 (a-1). Mr. Sunil Gupta, learned senior counsel would submit that each stilt parking space as well as each open parking space is a 'flat' in itself de hors the other accommodations amounting to 'flat' under Section 2(a-1) of MOFA. In support of his argument, he relied upon a decision of this Court in the case of Municipal Corporation of Greater Bombay & Ors. v. Indian Oil Corporation Ltd. 1991 Suppl. (2) SCC 18. In the alternative, he submitted that if the stilt parking space or open parking space is not held to be a 'flat' under Section 2 (a-1), still that space/area cannot be treated as part of 'common areas and facilities'. Firstly, he submitted that common areas and facilities do not include garage/parking spaces and such parking spaces remain ungoverned by MOFA. Sections 3 and 4 of MOFA concern with matters pertaining to 'common areas and facilities' but MOFA does not define the meaning of 'common areas and facilities'. Section 3(2)(m)(iii) leaves it to the promoter to disclose to his flat purchaser the nature, extent a....
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.... As regards other statutory provisions, we shall refer to them wherever necessary. Relevant provisions of MOFA: 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: "S.2(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 or for carrying on any industry or business (and includes a garage), the premises forming part of a building and includes an apartment. Explanation.-Notwithstanding that provision 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." 15. 'Promoter' is defined in Section 2(c) as under : "S.2(c).- `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, or apartments for the purpose of selling some or all of them to other persons, or to a company, co-operativ....
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....s, if any. (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." 17. Section 4 of MOFA mandates that promoter before accepting advance payment or deposit shall enter into an agreement with the prospective flat purchaser and such agreement shall be registered. It provides as follows: "S.4.- (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 the Registration Act, 1908" and such agreement shall be in the prescribed form. (1A) The agreement to be prescribed under subsection (1) shal....
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.... 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." 19. There is also obligation cast upon promoter to execute the 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 complete his 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 building, and execute all relevant documents therefore 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....
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....2, the following statement is made: ".......the interpretation clause will control in the absence of anything else in the act opposing the interpretation fixed by the clause. Nor should the interpretation clause be given any wider meaning than is absolutely necessary. In other words, it should be subjected to a strict construction." 22. The definition of term 'flat' in MOFA at the time of its enactment was this: 'flat' means a separate and self contained set of premises used or intended to be used for residence, or office, showroom or shop or godown (and includes a garage), the premises forming part of a building. By Maharashtra Act No. 15 of 1971, the definition of 'flat' got amended and the words 'and includes an apartment' were inserted after the word `building'. Thereafter by Maharashtra Act 36 of 1986, the words 'or for carrying on any industry or business' were inserted after the word 'godown' and before the bracketed portion `(and includes a garage)'. 23. Before we analyze Section 2(a-1), if we ask what the term 'flat' means, apart from the statutory definition, the reply must be that though it has no uniform meaning but in its natural and ordinary meaning, 'flat' is a....
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....ng of the term 'flat' but nevertheless such premises that form part of building must be separate and selfcontained. A set of premises is called self-contained if it has the following basic amenities available: (a) sanitary; (b) washing, bathing and (c) other conveniences (cooking etc.) for the use of its occupant/s although as provided in the explanation appended to Section 2(a-1) such provision may be common to two or more sets of premises. The nature of construction and user are important features of this definition clause. A unit or accommodation to fit in the definition of 'flat' must meet twin-test namely: (i) self contained test and (ii) user test. The other predominant characteristic is that it must form part of a building. Crucially, for the relevant premises to be 'flat': * It must be a separate and self contained premises; * It must form part of building; * It must be used or intended to be used for any of the uses namely-residence, office, showroom, shop, godown or for carrying on any industry or business. 29. In the discussion made above, we have not referred to the bracketed portion namely - '(and includes a garage)' so far. What is the meaning and significance of t....
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....English from the French language and means 'keeping under cover' or 'a place for keeping' of wagons as well as automobiles. Concise Oxford English Dictionary (10th edition, revised) explains 'garage'- 1 a building for housing a motor vehicle or vehicles. 2 an establishment which sells fuel or which repairs and sells motor vehicles. 31. Webster Comprehensive Dictionary, International edition (Vol. 1) explains the word 'garage'-a building in which motor vehicles are stored and cared for. 32. Words and Phrases, Permanent Edition, (West Publishing Company), Vol. 17, states that 'garage' generally is a station in which motorcars can be sheltered, stored, repaired, cleaned, and made ready for use; it is also place for private storage for motorcars; stable for motor cars. 33. The DCR define two expressions 'garage-private' and 'garage-public' in Regulations 2(47) and 2(48) respectively. According to these Regulations, 'garage-private' means a building or a portion thereof designed and used for the parking of vehicles and 'garage-public' means a building or portion thereof designed other than as a private garage, operated for gain, designed and/or used for repairing, serving, hiri....
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....if there is no roof; but this is worse than that, though I agree that the walls are very good here. Wherever you put a car in this yard, in addition to there being no shelter from above, there will be no shelter on two sides. That seems to me to be really conclusive." He, thus, submitted that even a place with merely a roof may well be a 'garage'. By placing reliance on condition No. 2 in Form V of 1964 Rules, learned senior counsel submitted that for the purposes of MOFA, even an open parking space is tantamount to a 'garage'. 34. The relevant portion of condition No. 2, Form V appended to 1964 Rules reads as under: "2. The Flat Purchaser hereby agrees to purchase from the Promoter and the Promoter hereby agrees to sell to the Flat Purchaser one flat No. .......... of the Type .......... of carpet area admeasuring .......... sq. meters (which is inclusive of the area of balconies) on .......... floor as shown in the Floor plan thereof hereto annexed and marked Annexures 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....
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....rking space and such space is a garage. We are unable to agree. The test accepted by Atkinson, J. in Barnett and Block1 also does not support this argument. Even as per that test a place having roof but offering no shelter or protection on two sides cannot be a garage. It is worth repeating what Atkinson,J. said, `....I am inclined to think that the ordinary man in the street does regard a garage as connoting some sort of building; how far he would go I do not know. I do not know whether he would think that there should be a wall all round it, or whether it would be sufficient if there were three sides walled in and a roof. I have one in mind where there is row of sheds without any protection in front, which are commonly spoken of as "garages".' Atkinson,J. applied the test of `reasonable protection and shelter for car' as was suggested by the counsel for the insurer while construing the term `garage' in a policy of insurance. For the purposes of MOFA, and particularly Section 2(a-1), the term 'garage' must be considered as would be understood by a flat purchaser and such person would contemplate garage which has a roof and wall on three sides. Our answer to question No. (ii) is, t....
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....cilities as may be provided for in the Declaration; and (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 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 fore 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 t....
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....tisement 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' and, accordingly, we answer question no. (iii) in the affirmative. Re: question no. (iv) - what are the rights of a promoter vis-à-vis society in respect of stilt parking spaces? 39. We have now come to the last question namely- what are the rights of a promoter vis-à-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 argument is founded on the premise, firstly....