TaxTMI 
TaxTMI 
2024 (4) TMI 1286
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....g with the illegal construction of new towers namely Octavius and Verona in the location of the clubhouse for Phase - II and from marketing/selling the flats in the third respondent's development "House of Hiranandani" situated in Egattur, Chennai without abiding by the original DTCP approved plan in respect of Phase - II, dated 15.06.2012 along with building permit, dated 15.10.2012 which is renewed on 28.01.2016. B. The case of the appellant: 2. The appellant is a society registered under the Tamil Nadu Societies Registration Act, 1975. It is the association of homeowners in Hiranandani Upscale, a residential complex situated at No.5/63, Old Mahabalipuram Road, Egattur Village, Chennai. The third respondent namely, M/s.Hiranandani Developers Private Limited permitted a township proposing to be a gated community project of building integrated tower blocks of apartments of varying sizes under the name and style 'House of Hiranandani' earlier known as 'Hiranandani Upscale'. It is developed over the land measuring 120 acres in phases. The third respondent initially obtained plan approval from the second respondent namely, the Directorate of Town and Country Plan....
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....obligation is cast upon the third respondent to hand over all the common areas to the association of allottees under the provisions of the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as 'RERA Act'). The new plan is sanctioned by the authorities in violation of Section 14(2)(ii) of the RERA Act. The homeowners are severely affected because the third respondent did not adhere to the promises made concerning the amenities. Only based on the original plan that they will have the common area, space, number of towers etc., the decision has been made by the homeowners to buy the houses at the price offered by the third respondent and after selling the flats, unilaterally, alteration of plan, abandoning the clubhouse for Phase - II and putting up of two new residential towers to be sold to prospective purchasers, completely violates rights of the homeowners of the appellant Association and hence the Writ Petition. C. The case of the respondents : 3. The Writ Petition was resisted by the respondents. On behalf of the second respondent, the Assistant Director, District Office of Town and Country Planning, Chengalpattu filed a counter-affidavit. In th....
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....nd amenities in the construction of building; (f) other requirements or licenses or clearances required for the site or premises or activity under various other laws. Therefore, it is the case of the second respondent that it only took into account the title and availability of the land and the floor space index and whether or not the existing residents are entitled to the amenity of the building and whether any other requirement is required is not its lookout as per Rule 11(e) and (f) of the said Rules. 3.3. The third respondent filed an affidavit. In paragraph No.9 of the affidavit, the earlier planning approvals, dated 15.06.2012, 15.10.2012 and 28.01.2016 are all admitted. It is the case of the third respondent that they completed the buildings of Phase - I comprising six towers in the name and style of Seawood, Pinewood, Brentwood, Greenwood, Birchwood and Bridgewood. The third respondent has completed part of Phase - II of the township which comprised seven towers in the name and style of Oceanic, Edina, Bayview, Sinovia, Tiana, Amalfi and Anchorage. The third respondent is in the process of developing Octavius, Verona, Bayheaven in Phase - I. Based on the sanctioned plans, ....
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....econd respondent and other relevant authorities for revision of plan approval and the impugned plan approval was granted for the development of the said towers namely, Octavius and Verona. 3.6. Even as per the impugned plan approval, the third respondent only sought to move the amenity namely, the clubhouse, behind the said towers, Octavius and Verona. Thus, the clubhouse is as per the directions given in the revised sanction plan. This is, by no stretch of imagination, a withdrawal of common facility by the third respondent. 3.7. Thus, the third respondent does not have to procure a separate No Objection Certificate/consent from each of the allottees including the appellant for the revision. The township is an ongoing project. The third respondent had acted in consonance with Explanation - II of Rule 4 and Section 14 of the RERA Act. The appellant has only 239 residents as part of its association, whereas, the township has more than 2000 occupants and therefore, lacks the requisite majority to present the Writ Petition. The appellant Association is well aware that the clubhouse is presently used by all of its members without any complaints. The third respondent has also procured....
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....nstruction agreement, the allottees have also specifically consented and empowered the third respondent to file necessary renewal/revision application and therefore the third respondent did not have to procure any fresh consent of two-third of the allottees to act on the revised plan. The authorities have duly taken into account the limitations of permission as contained in Rule 11 of the Tamil Nadu Combined Development and Building Rules, 2019 and the project is taken up in a phased manner and the third respondent is only sought to move the amenity to the new location as proposed in the revised plan. Thus, after proper scrutiny of the documents and requirements, the impugned plan has been granted. 4.3. Further, the learned Single Judge found that the space, in which the clubhouse is originally scheduled to be put up, is not covered in the sale deeds issued to the members of the appellant Association. But, it is shown only as an amenity. No other person owns undivided share in respect of the site, on which, the new clubhouse is to be located. Therefore, the learned Single Judge found no merits in the twin contentions raised in the Writ Petition namely, the requirements of a consen....
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....ch consent is not required where the original plan was sanctioned before the coming into force of the Act given the Explanation to Rule 4 of the TNRERA Rules and consent was given through recital 'L' and Clause - 10.3 of the construction agreement. 5.2. The second respondent is duty bound to consider the provisions of the RERA Act more specifically Section 14 which mandates that the developer shall not alter the original sanctioned plan without the prior written consent of two-thirds of allottees in the project and if the project is intended to be developed in phases, then, without the prior written consent of two-third of allottees in the phase concerned. The impugned order did not consider any consent at all. The impugned order is violative of Section 14 of the RERA Act. The term 'common areas' in Section 14(2) of the RERA Act has been defined to include the entire area of the project or the phase as the case may be and also community and commercial facilities. The clubhouse is a community facility as per recital 'K' and Annexure - IV of the construction agreement. In view of the same, as per the definition in Section 2(n)(i) and (vii) of the RERA Act, th....
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....house in Building No.37 is a part of their 'phase' based on the brochure. That is a deliberate misreading of the brochure. The brochure promises an amenity and the third respondent is still committing to provide the amenity. The brochure cannot be used to decide the legal definition of the term 'phase'. The third respondent is registering each tower (and appurtenant land) under the RERA Act thereby, making each tower a phase. The same is also in consonance with the planning approval. 5.7. Therefore, the originally proposed clubhouse building is not the common area within the meaning of the Act and that building is not part of the relevant phase of any of the members of the appellant Association. As far as the promised amenities are concerned, there is a blue turtle clubhouse which is open to the members of the association and the other residents. The extent of the Club House area in the old Building No.37 is preserved and is being relocated in the area as indicated in the revised plan. That will also be opened to the members of the appellant Association and the other respondents. There is no diminution in the amenities available to the members of the appellant Asso....
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....ted supra), relied upon by the learned Senior Counsel for the appellant, is entirely misplaced and is different from the facts of the present case. Therefore, the learned Single Judge has correctly decided the Writ Petition and the same does not call for any interference. F. The Discussion and Findings : 6. We have considered the rival submissions made on either side and perused the material records of the case. 6.1. Firstly, it is admitted that the brochure which is produced at page No.273 of Volume - II of the appeal paper book is the brochure prepared by the third respondent for marketing the apartments in the township. It contains the master plan for the development of the entire township. As per the master plan, Building No.17 is shown as a clubhouse and sports hall for Phase - I and Building No.18 is shown as a clubhouse for Phase - II. However, upon consideration of the detailed floor-wise plan of Building No.18 of Phase - II, it can be seen that only two floors of the said building are proposed as a club house and the rest of the floors/built-up areas are saleable commercial areas as shops and retail spaces. The construction agreements are accepted as pari materia and un....
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.... their specific consent and empower the Promoter to file necessary renewal/ revision application with the appropriate authority and to comply with any statutory requirement for such renewal/revisions." 6.4. Clause - 17.2 of the said agreement reads as follows :- "17.2. AMENITIES & FACILITIES The common facilities and amenities of the said Building will be the common amenities of the said Building and common amenities in the Development which are in form of common pathways, open areas shall be common to the said Complex and all the phases thereof, as more specifically given hereunder in Annexure III and Annexure IV." 6.5. The relevant portion of Annexure - IV of the said agreement reads as follows :- "CLUB HOUSE: 1. The Promoter shall provide access to a Club House having facilities such as Swimming Pool, Gymnasium, Squash, Badminton Court, Aerobics center, Spa & Salon, Table Tennis, Tennis Court, Cafe, Locker rooms near sports facilities, etc. and/or such amenities as may be desired by the Promoter. The Allottee by virtue of his ownership of the said unit stands eligible for a membership into the club house subject to payment of the necessary one time membership payment, ....
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....d, thereby, granting revised plan approval. The details of the blocks that are already built, blocks that are sought to be removed, and the blocks that are newly proposed including the total FSI, and building area are all furnished in the impugned order itself in detail and the parameters containing the overall particulars are reproduced hereunder :- "Site area - 483923.10 sq.m Total FSI area - 1198001.49 sq.m + Non FSI area = 202422.53 sq.m Total building area - 1400424.02 sq.m Total block - 60 Blocks OSR Area 48347.39 sq.m already gifted to local body Details of already built 16 blocks Block 1 to 10 and 11, 11A, 13 and 14 block-34 (School Building) block-35 (Club House) Details of earlier approved building but construction not commenced (27 blocks have been stationed without any change) Block-15B, 17, 19B, 21, 22A, 22B, 23, 25A, 25D, 26A, 26B, 27A, 27B, 28A, 28B, 30A, 30B, 31A, 31B, 40, 44, 45, 46, 46B, 47, 48 & 49 Details of earlier approved existing blocks to be removed (14 blocks) Block- 15A, 16, 18, 19A, 19C, 20, 25B, 25C, 29, 32A, 32B, 33 & 36 Details of earlier approved blocks that have to be halted (3 blocks) Block 12, 37, 48 Details of New Propo....
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.... the buyers' interests and streamlines the duties and responsibilities of both sides. Penalties are provided for violation. The Grievance Redressal mechanism for speedy dispute redressal of the disputes is also provided under the Act. The RERA Act is intended to achieve the following objective :- "The Real Estate Act is intended to achieve the following objectives: a) ensure accountability towards allottees and protect their interest; b) infuse transparency, ensure fair-play and reduce frauds & delays; c) introduce professionalism and pan India standardization; d) establish symmetry of information between the promoter and allottee; e) imposing certain responsibilities on both promoter and allottees; f) establish regulatory oversight mechanism to enforce contracts; 2 g) establish fast- track dispute resolution mechanism; h) promote good governance in the sector which in turn would create investor confidence." 6.10. It is relevant to extract paragraph Nos.6 to 10 of the judgment of the Hon'ble Supreme Court of India in M/s.Newtech Promoters and Developers Pvt. Ltd. Vs. State of U.P and Ors.1 which read as follows :- "6. At the given time, the real estate and housing sect....
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....ment or building, as the case may be, in an efficient and transparent manner and to protect the interest of consumers in real estate sector and establish the Real Estate Appellate Tribunal to hear appeals from the decisions, directions or orders of the Authority." 9. It was introduced with an object to ensure greater accountability towards consumers, to significantly reduce frauds and delays and also the current high transaction costs, and to balance the interests of consumers and promoters by imposing certain responsibilities on both, and to bring transparency of the contractual conditions, set minimum standards of accountability and a fast-track dispute resolution mechanism. It also proposes to induct professionalism and standardisation in the sector, thus paving the way for accelerated growth and investments in the long run. 10. Some of the relevant Objects and Reasons are extracted as under: "4. (d) to impose liability upon the promoter to pay such compensation to the allottees, in the manner as provided under the proposed legislation, in case if he fails to discharge any obligations imposed on him under the proposed legislation; *** (f) the functions of the Authority ....
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....ural reasons duly recommended and verified by an authorised Architect or Engineer after proper declaration and intimation to the allottee. Explanation.--For the purpose of this clause, "minor additions or alterations" excludes structural change including an addition to the area or change in height, or the removal of part of a building, or any change to the structure, such as the construction or removal or cutting into of any wall or a part of a wall, partition, column, beam, joist, floor including a mezzanine floor or other support, or a change to or closing of any required means of access ingress or egress or a change to the fixtures or equipment, etc. (ii) any other alterations or additions in the sanctioned plans, layout plans and specifications of the buildings or the common areas within the project without the previous written consent of at least two-thirds of the allottees, other than the promoter, who have agreed to take apartments in such building. Explanation.--For the purpose of this clause, the allottees, irrespective of the number of apartments or plots, as the case may be, booked by him or booked in the name of his family, or in the case of other persons such as ....
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....existing projects.-(1) On the date of coming into force of sub-section (1) of section 3 of the Act, promoters of all ongoing projects shall within the time specified in the said sub-section, make an application to the Authority in the form and manner provided in rule 3. Explanation I.- Any agreement already entered between the promoter and the allottee before commencement of these rules shall not be affected. Explanation II .- If the project has been conceived to be developed in phases, where the plans for the initial phase are approved by the planning authority prior to the date of coming into force of sub-section (1) of section 3 of the Act, then for such projects the requirement of obtaining two third consent from existing allottee, under clause (ii) of sub-section (2) of section 14 of the Act is exempted for addition/revision/modification of plans for subsequent phase/s of development, provided the scheme of developing the project in phased manner has been agreed upon by the allottee and promoter in the agreements executed between them; Explanation III.- If the approval from the planning authority is obtained for larger extent of land, but where the development is conceiv....
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....excess/rest of the lands which are to be developed in the subsequent phases, in which case, when it develops the subsequent phases, in respect of any addition or revision or modification of the subsequent phases, it needs to take consent from the respective allottees of the subsequent phase alone and the consent of the earlier phase need not be taken. The same is also in sync with the purposes of the Act and Section 14(2) of the RERA Act as all the details of the development in respect of the phases which are to be developed in a later date will not be disclosed to the buyers. In essence, if a promoter discloses the details as to the number of towers, number of residential occupants, and of the extent of the common areas, amenities etc., after holding out to the buyer and making them to purchase/inviting them to purchase the apartment, thereafter, he loses the right to unilaterally alter or make additions unless there is consent of the two-thirds of the allottees. 6.15. In this regard, Section 2(n) of the Act defines common areas which is as follows :- "2.... .... .... ..... (n) "common areas" mean-- (i) the entire land for the real estate project or where the project ....
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....cess of developing Octavius, Verona, Bayhaven (Phase-I)." (emphasis supplied) 6.18. As per the clause in the construction agreement, it was contended that the entire project is being executed in Phase - I and Phase - II which was extracted supra. Paragraph No.7 of the counter-affidavit filed in the present Writ Appeal is as follows:- "7. I state that after obtaining the relevant sanctions, the 3rd Respondent completed the buildings of Phase I, which comprises of six towers, namely, Seawood, Pinewood, Brentwood, Greenwood, Birchwood and Bridgewood that comprised of 1094 Units/Apartments. I state that the 3rd Respondent has partly completed Phase II of the Project, namely, seven towers that have been completed are, Oceanic, Edina, Bayview, Sinovia, Tiana, Amalfi and Anchorage that comprised of 1174 Units/Apartments. There are three structure/towers under development, namely, Octavius, Verona and Bayhaven-Villas (which forms part of Phase II)." (emphasis supplied) Thus, the version as per the counter-affidavit filed in the Writ Appeal is that these new towers are part of Phase - II. 6.19. During the reply arguments, Mr. Srinath Sridevan learned Senior Counsel would submit that ....
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....ding No.18 is a common area as it is represented as the club and commercial facility for the seven buildings which are originally termed as Phase - II and thus, cannot be altered without the consent of the two-third owners in respect of each of the seven towers. It must be seen that the very purpose of the Act is to prevent the promoters from holding out one thing and thereafter carrying out another. Any purchaser of the apartment in all these seven buildings of Phase - II agreed for a particular price by taking into account the number of residential towers which are coming up within the gated community. If there are going to be more number of towers than the original one which is promised, then, the entire land topography and occupancy changes. 6.24. The price of the original apartment is agreed upon considering the original master plan which is held out to the buyer. Therefore, accepting the arguments of the learned Senior Counsel for the third respondent, that an equivalent clubhouse area will be provided in another new building/floor of the sports complex would defeat the very purpose of Section 14 of the Act. From the wordings of Section 14 of the Act which is a non-obstante ....
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.... to be made by any act or omission of the party proposing, accepting or revoking by which he intends to communicate such proposal, acceptance or revocation, or which has the effect of communicating it." Therefore, at the relevant point in time, when it was expressly held out that there would be 6 + 7 residential towers only, it cannot be said that the allottees of the flat have acceded to or consented that the promoter is allowed to put any number of towers or to do away with the clubhouse and commercial facility. 6.28. Even as per the case of the promoter, the third respondent, the change was undertaken by it, only considering market conditions in the year 2020 and therefore, what was not contemplated at the time of agreeing could not have been consented upon by the parties. In any event, consent that is granted by a particular owner is different from the written consent of two- thirds of the allottees. In respect of a building or flat of a particular buyer/allottee, if any change in plan is made, then, the consent which is taken in the agreement with that particular allottee may hold good. But the nature of consent which is required under Section 14(2) of the Act is the written....