22 Apr 2121

Any submission made to the property in the absence of register by the all apartment owners then such declaration cannot be considered a declaration executed as per the provisions of the Maharashtra Apartment Ownership Act 1970 - Bombay High Court

Case : CIPLA Limited v. The Competent Authority and Ors. Writ Petition (L) No. 3706 of 2019 Along with Interim Application (L) No. 7183 of 2020

Court : Bombay High Court

Bench : Justice R. D. Dhanuka and Justice V. G. Bisht

Decided on : 22 Apr 2121

Relevant Statutes

Article 226 of the Indian Constitution

Section 2 , 3(a) , 3 (b) , 3(e) and 3(r) of The Maharashtra Apartment Ownership Act 1970

Section 11 of the Maharashtra Apartment Ownership Act 1970

Section 10(2) and Section 11(2) Maharashtra Ownerships Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer Act, 1963

Section 3 of Maharashtra Cooperative Societies Act, 1960

Brief Facts and Procedural History

1. There were three separate agreements for sale dated 5th November 2012. Respondent no.5 sold units 101 and 102, 401 and 402 and unit No. 1301 and 1302 of Tower A along with exclusive right to use 27, 31 and 28 car parking spaces in Peninsula Business Park On 6th December 2012, the petitioner acquired from the respondent no.5 the entire Tower C of ground level and five upper floors comprising of unit no.101, 102, 201, 301, 401 and 501 along with exclusive use of a pantry/cafeteria and 45 car parking spaces for a total amount of Rs.95,12,88,450.

2. On 20th February 2014, the petitioner acquired from one Samartha Development Corporation unit no.701 and 702 of Tower B in the said premises along with exclusive use of 28 car parking spaces for a total consideration of Rs.33,91,84,000 and Rs.34,79,60,000 by an under two separate Agreements for Sale. On 9th August 2016, respondent no.5 executed and registered a declaration under Section 2 of the Maharashtra Apartment Ownership Act, 1970.

3. On 10th August 2016, Respondent no.5 informed the Deputy Registrar of Co-operative Societies, about the execution and registration of the Deed of Declaration. On 21st October 2016 and 23rd November 2016, respondent no.5 and the unitholders held meetings for handing over all the affairs. On 13th February 2017, respondent no.5 through email attached a Draft Deed of Apartment which was to be executed by all the unit holders or to provide details of the individual unit holders for executing the Deed of Apartments. 

4. On 24th April 2019, the petitioner addressed a letter to the Competent Authority, withdrawing their consent to form a society and called respondent no.1 to stop the process of registering and passed the impugned order without giving an opportunity of hearing to the petitioner and directed the respondent no.2 to take further steps for registration society by the application filed by the respondent no.3 (through his account consultant). These interim applications were filed by the original respondent nos.4 and 5 for modification of the order dated 19th December 2019 and an Interim Application is also filed by the HDFC Bank Limited.

5. On 25th September 2012, three separate Agreements for Sale, the respondent no.5 sold unit no. 1601, 16th Floor, Tower an in Peninsula Business Park to the petitioner no.1 .Respondent no.5 sold unit nos. 1602, 16th Floor of Tower A, to the petitioner no.2. On 24th June 2013, 6th June 2013, 27th May 2013 and the respondent no.5 sold from one Alok Realtors unit nos. 401, 402, 501, 502, 601, 602, 1001 and 1002 of Tower B, Peninsula Business Park to petitioner no.1. 

The Issues of the Case

Whether the Respondent no-5 developer has entered into the deed of declaration unilaterally or not under Section 2 of the Maharashtra Apartment Ownership Act 1970?

Whether the developer had complied with the requirements under Section 10(2) of the Maharashtra Ownerships Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer Act 1963 or not before the Registrar Cooperative Society to register the society which is proposed by Respondent no 3?

Whether the Competent Authority had the powers to declare the title of the developer or the Unit Holders or to decide the validity of the deed of declaration?

The Observations of the Court

1. The Honourable Bombay High Court observed that if there is more than one owner of the property then all the owners of the property have to execute and register a declaration on the basis of Section 2, 3(a), 3 (b), 3(e) and 3(r) of The Maharashtra Apartment Ownership Act 1970, Thus the deed of declaration cannot be executed unilaterally for submitting the property. The Deed of Declaration was not in compliance with Section 11 of the Maharashtra Apartment Ownership Act 1970.

2. The Honourable Bombay High Court observed that any submission made to the property in the absence of register by all apartment owners then such declaration cannot be considered a declaration executed as per the provisions of the Maharashtra Apartment Ownership Act 1970 and held that no prejudice is caused to the petitioners in the view of respondent no.-4 society which have been registering as General Society, not Housing Society.

3. The Honourable High Court observed one of the judgments i.e  Krishnarao Bakaramji Hadge vs The State of Maharashtra, 1996 SCC OnLine Bom 49 and held that the letter dated 10th August 2016 was not addressed to the right authority and also not under section 10(2) Maharashtra Ownerships Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer Act 1963   but was wrongly addressed to Deputy Registrar of the Co-operative societies under section 11 (2) Maharashtra Ownerships Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer Act 1963.

4. All the unitholders are required to execute jointly such a deed of declaration with the developer. It was stated that the mandatory requirement is not complied as per Section 10(2) of the Maharashtra Ownerships Flats (Regulation of the Promotion  of Construction, Sale, Management  and Transfer Act 1963   The intimation given by the promoter under Section 11(2) of the Maharashtra Ownerships Flats (Regulation of the Promotion  of Construction, Sale, Management  and Transfer Act 1963  cannot be considered as compliance of the duty of the promoters under section 10(2) of the Maharashtra Ownerships Flats (Regulation of the Promotion  of Construction, Sale, Management  and Transfer Act 1963 

5. The Honorable Bombay High Court observed that it is not the duty of the Competent to check whether the developer had complied with the mandatory obligation of section 10 (1) and Section 10(2) of the Maharashtra Ownerships Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer Act 1963 and also held that as per the Section 10 (2) of the Maharashtra Ownerships Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer Act 1963. The information of execution and registration of the deed of declaration has to be made to the Registrar and the Competent Authority can be the officer not below the rank of Deputy Register of the Cooperative Societies and he will be subordinate to the  Registrar appointed under Section 3 of Maharashtra Cooperative Societies Act,1960.

6. The Honourable Bombay High Court observed that the petitioner was not entitled to be heard by the Competent Authority under Section 10(1) of the MOFA Act and had no locus to raise any objection before the competent authority The Honourable  High also did not set aside the order passed by the Competent Authority as there is no such patent illegality or impugned error in the judgment or no interference is made out under Article 226 of Indian Constitution.

7. The Honourable High court referred to one of the judgments and applied the principles laid down in this judgment i.e. Indian Cork Mills Private Limited vs. The State of Maharashtra, 2018 SCC OnLine Bom 1214 and also in another judgment, Paul Parambi Chief Promoter Springs CHS Ltd and others vs. The Bombay Dyeing and Manufacturing Company Ltd and Ors, 2017 (1)ABR, 673, the principles laid down here will apply to the facts to this case and would be a binding precedent on this court.

The Decision Held by the Court

Writ Petitions are dismissed. Interim Application (L) No. 1 of 2021 filed by the HDFC in Writ Petition (L) No. 3706 of 2019 filed by Cipla Ltd is rejected and Interim Application (L) No. 7183 of 2020 was dismissed.

Click here to view/download the judgement >