[Nahalchand Laloochand
P. Ltd. v. Panchali Co-op. Housing Society Ltd., AIR 2010 SC 3607]
The issue which arose for
consideration was in respect of encroachment on the parking spaces in the
stilt portion of the building by the promoter/developer of the building. The
promoter set up the case that under the agreement for sale it has sold flats
in its building and no other portion. The High Court had held that the stilt
parking spaces cannot be put on sale by the developer as he ceases to have any
title on the same and it becomes the property of society. The appeal arises
from the aforesaid order of the High Court which have effect on rights on
several developers.
The Supreme Court observed
that 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.
The definition of ‘flat’
occurring in S. 2(a-1) of MOFA includes an ‘apartment’. It must be a separate
unit conforming to the description capable of being used for one of these
purposes, namely, residence, office, showroom, shop, godown or for industrial
or business purposes. Alternative uses in S. 2(a-1) of MOFA do expand the
ordinary meaning of the term ‘flat’, but nevertheless such premises that form
part of building must be separate and self-contained.
The words ‘and includes a
garage’ in definition of word flat in S. 2(a-1) are put in brackets. The
bracketed phrase is indicative of the legislative intention to include a
‘garage’ as appurtenant or attachment to a flat which satisfies the
ingredients of S. 2(a-1). The open parking space does not tantamount to a
‘garage’ within the meaning of S. 2(a-1). The word ‘garage’ may not have
uniform connotation, but definitely every space for parking motor vehicles is
not a garage. A roofless erection could not be described as garage. What is
contemplated by a ‘garage’ in S. 2(a-1) is a place having a roof and walls on
three sides. It does not include an unenclosed or uncovered parking space.
That being so,
open parking space cannot be sold as flat or along with flat.
Stilted portion or stilt
area of building is not a garage under the Act. A stilt area is a space above
the ground and below the first/floor having columns that support the first
floor and the building. It may be usable as a parking space, but for the
purposes of the Act, such portion could not be treated as garage. The 1963 Act
(MOFA) does not define nor does it explain ‘common areas and facilities’
though said phrase is used at various places in that Act. This expression is
however defined in S. 3(f) of the 1970 Act (MAOA). Looking to the scheme and
object of MOFA, and there being no indication to the contrary, there is no
justification to exclude parking areas (open to the sky or stilted portion)
from the purview of ‘common areas and facilities’ under MOFA.
It is true that under MOFA
it is for promoter to prescribe and define at the outset the ‘common areas’,
but it cannot be said that the parking area cannot be termed as part of
‘common areas’ if they are not so defined by promoter. The fact that as
open/stilt parking space is treated as part of ‘common areas’, every flat
purchaser will have to bear proportionate cost for the same although he may
not be interested in such parking space at all cannot be a consideration
relevant for the consideration of term ‘common areas and facilities’ in MOFA.
It is not necessary that all flat purchasers must actually use ‘common areas
and facilities’ in its entirety. By treating open/stilt parking space as
common area, the promoter is not put to any prejudice financially since he is
entitled to charge price for the common areas and facilities from each flat
purchaser in proportion to the carpet area of the flat.
MOFA mandates the promoter
to describe ‘common areas and facilities’ in the advertisement as well as the
‘agreement’ with the flat purchaser and the promoter is also required to
indicate the price of the flat including the proportionate price of the
‘common areas and facilities’. If a promoter does not fully disclose the
common areas and facilities, he does so at his own peril. The ‘stilt parking
space’ is not covered by the term ‘garage’ much less a ‘flat’ and that it is
part of ‘common areas’. The only right that the promoter therefore has, is to
charge the cost thereof in proportion to the carpet area of the flat from each
flat purchaser. Such stilt parking space being neither ‘flat’ under S. 2(a-1)
nor ‘garage’ within the meaning of that provision is not saleable at all. The
promoter has no right to sell any portion of such building which is not ‘flat’
within the meaning of S. 2(a-1) and the entire land and building has to be
conveyed to the organisations; the only right remains with the promoter is to
sell unsold flat. Promoter has no right to sell ‘stilt parking spaces’ as
these are neither ‘flat’ nor appurtenant or attachment to a ‘flat’.
