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LAW vs Case Law

On ‘Flats’

V. Swaminathan B.Sc., B.L., FCA

PROLOGUE

As is, by and large, known, the Constitution of

India, the nation’s basic charter, is the supreme law

of the land. And all other laws are subordinate to

the Constitution; and as such, must be read and

interpreted in the light of the constitutional

provisions.

The authority to legislate by the Union and States

is as conferred by Article 246 of the Constitution.

Of the three independent lists as provided in the

Seventh Schedule to the Constitution, List- II

comprises the entries over which the State

legislatures have the exclusive powers to legislate.

Anyone concerned is expected, rather needs, to be

aware, the Constitution itself has, over the recent

years, been subjected to drastic amendments; and

many are purported to have been made so as to

remain in tune mainly with growingly changing

socio-economic environments. Even so, in a

manner of plain speaking, quite a few of the

amendments do not, in public opinion, seem to have

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been done objectively and with a public-centric

approach; instead, happen to have been thrust upon

the people, - thereby rendering the age-old and

time-recognised-honoured human rights, one being

the very basic right namely, – the “right to

property”, a laughing stock. Conceptually, though,

that is really a bundle of rights, principally

comprise the so called ‘ownership’; with all other

appended and accompanying rights/interests.

One of the amendments so effected and sticking as

a sore thumb /-point is the 44th Amendment(s) of

1978; resulting in drastically decolouring or

dubbing what earlier was regarded a ‘fundamental’

right, into a ‘constitutional - or ‘statutory- right. As

commented critically by a Researcher in her

published Article,- “the amendment bestowed upon

the Indian socialist state a licence to indulge in

what Fredric Bastiat termed legal plunder. This is

one of the classic examples when the law has been

perverted in order to make plunder look just and

sacred to many consciences.” Whatsoever that

means in real life terms to a property holder, in

one’s perspective, there could conceivably be no

denying that, even so, for understanding and/or

construing any provision of an enactment, in proper

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light, –such as, of state, MOFA herein - none can

rightly afford to bypass or side-step the connected

overriding provisions and vital implications of the

other primary central/state statutes, besides any

other, the three time tested ones, - the T P Act,

Contract Act, Registration Act.

INTRODUCTION

The case law for study herein is the SC judgment

reported @ SC on Car Parking. (Nahalchand’s case).

The legislation of relevance is the special law of

Maharashtra embodied in two enactments, called

the Maharashtra Ownership Flats Act, 1963 and the

Maharashtra Apartment Ownership Act, 1970.

They, in terms, respectively govern the property in

the form of ‘units’of a building, commonly known

as ‘Flats’and ‘Apartments’. For brevity, in the

ensuing discussion, they are referred to as MOFA

and MAOA.

In the instant case, to support the mutually

contradicting stance, both parties have chosen to

respectively put up pleas claiming how the relevant

provisions of MOFA have to be construed; and

differently interpreted.

To briefly recap at the outset, so as to serve as a

backdrop:

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A plethora of rules /principles of interpretation

have been evolved and enunciated by courts in

decided cases over the years to serve as aids for

the purpose of construing any statutory provision.

That is to ascertain the intention of the law makers,

so as to make it effective and accomplish the

objective of any enactment. As there are several

of them, court has to, for its purpose of

adjudication, select the most appropriate one or

more of them not only for a proper understanding

of, but also for construing any provision, depending

on the type of issue (s), to the end of adjudicating

having regard/in accordance with the relevant

provisions of the applicable governing enactment.

That is easier said than done / doable. In that

endeavour, no need to underline, it is the duty and

responsibility of counsels for both sides to be of

every assistance to courts.

This write-up is intended, and may be, read as a

supplement to the earlier write-up published @

Nahalchand's Case (I).

The viewpoints stressed therein, in a nut shell:

The only point of dispute for court to decide and settle was whetherthe promoter was entitled to be granted the prayer for 'injunction'against the OPs. Going by an understanding of the arguments

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advanced, and the reasoning and findings given, the court has to besimply taken to have said "NO". That is, on the ground that thepromoter has no such lawful right to retain, for a separate sale, thedisputed property, being the 'stilt car parking slots', forming part andparcel of the Common Areas and Facilities”(CAF). That being so,the court's further observation (Para 40 of the judgment – whichreads : “It is, thus, clear that the PROMOTER HAS NO RIGHTTO SELL `stilt parking spaces' as these are neither `flat' norappurtenant or attachment to a `flat'. (FONT supplied) mighthave to be regarded merely as an observation in the nature of "obiterdictum"; as distinct from “precedent”

Further that, with due respect to the wisdom of the

judiciary, but in no manner offending it, the only

way to reconcile the said observation might be to

take it to mean that a promoter selling units of a

building as ‘flats’, hence governed by MOFA, has

“no right to sell separately”any such portion of the

building complex, which is necessarily part and

parcel of CAF. This is a straight forward and

common sense point, readily inferable; hence

requiring no long drawn process of reasoning, more

so, any interpretation of the law in its legal sense.

Anyone proceeding on a different premise / understanding ofthe SC case, whether or not based on any legal /expert advice orotherwise, will be doing so at his own peril; by reason of theprospect of his having to face a lifelong (or even beyond)'infantile' / 'imbecile' litigation.

2. To reinforce, though at the cost of repeating:

The instant case is one of civil law dispute between

the two parties; and only them, none else. The final

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ruling given is having regard only to the particular

facts of the case; and based on the interpretation of

the given provisions of the MOFA as canvassed. If

rightly viewed, from a legal perspective, in

essence, what has been held is that all areas and

facilities in a building complex of the kind herein, -

meant, by the very nature, for common enjoyment,

that is, other than/distinct from the areas of the

flats in exclusive possession and enjoyment of the

respective takers, in their own individual rights,-

do not but constitute part and parcel of the

“common areas and facilities”, within the meaning

of MOFA.

To proceed on that premise, if at all, the only other

aspect which requires a separate study,- that is

independent of / sans the instant case, - is this:

What the “limited”area, as envisaged by the law

connotes; and, whether promoter has a lawful right

to sell to a flat taker, who has paid a price,

inclusive or otherwise, the facility of parking his

car / vehicle, stilt or open, so that the latter has a

right to occupy and enjoy such area, as ‘limited’, to

the exclusion of the rest of the flats takers, in the

same manner as he has in respect of the exclusive

area of his flat.

An Analysis of SC Judgment

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3.1. The factual matrix as per narrationin the SC Judgment is reproduced below:

< The facts:

2. Few important questions of law arise in this group of appeals.It will be convenient to formulate the questions after we set outthe material facts and the contentions of the parties. Thenarration of brief facts from S.C. Suit No. 1767 of 2004 willsuffice for consideration of these appeals. NahalchandLaloochand Private Limited is a Private Limited Company. As apromoter, it developed few properties in Anand Nagar, Dahisar(East), Mumbai and entered into agreements for sale of flatswith flat purchasers. The flat purchasers are members ofPanchali Co-operative Housing Society Ltd. (for short, `theSociety'). The promoter filed a suit before the Bombay City CivilCourt, Bombay for permanent injunction restraining theSociety (defendant) from encroaching upon, trespassing and/orin any manner disturbing, obstructing, interfering with itspossession in respect of 25 parking spaces in the stilt portion ofthe building. The promoter set up the case in the plaint thatunder the agreements for sale it has sold flats in its buildingand each flat purchaser has right in respect of the flat sold tohim and to no other portion. It was averred in the plaint thateach flat purchaser has executed a declaration/undertaking inits favour to the effect that stilt parking spaces/open parkingspaces shown in the plan exclusively belong to the promoterand that the declarant has no objection to the sale of suchspaces by it. The defendant (Society) traversed the claim andset up the plea that the promoter has no right to sell or disposeof spaces in the stilt portion and that the undertakings given bythe flat purchasers are not binding being contrary to law andbased on such undertakings, the promoter has not acquired anyright to sell stilt parking spaces. >

3.2. For ready reference and appreciation, certain

portions of the operative part of the Judgment, as

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selected for the present purpose (UPPERCASE/ITALICS

supplied), are set out below; while specific

comments are inset, other detailed comments are

being separately furnished later:

A) The summary of findings of the High Court as given in theSC judgment (with BIG FONT supplied):

While dismissing the appeal, THE HIGH COURT RECORDED THE

FOLLOWING FINDINGS:

The carpet area of any of the 56 flats/tenements in Panchalibuilding is not less than 35 sq. mtrs.

The parking space enclosed or unenclosed, covered or opencannot be a `building'.

IT IS COMPULSORY REQUIREMENT TO PROVIDE FOR PARKING SPACES

UNDER DCR.

IT IS OBLIGATORY ON THE PART OF THE PROMOTER TO FOLLOW THE DCR.

THE AGREEMENT SIGNED UNDER MOFA BETWEEN THE DEVELOPER AND

THE FLAT PURCHASER MUST BE IN CONFORMITY WITH THE MODEL FORM

OF AGREEMENT (FORM V) PRESCRIBED BY THE STATE GOVERNMENT.

THE MODEL AGREEMENT DOES NOT CONTEMPLATE THE FLAT

PURCHASERS TO SEPARATELY PURCHASE THE STILT PARKING SPACES.

The rights arising from the agreement signed under the MOFAbetween the promoter and the flat purchasers cannot be dilutedby any contract or an undertaking to the contrary. Theundertakings contrary to DCR will not be binding either on theflat purchasers or the Society.

The stilt parking space is a common parking area available andTHE DEVELOPER IS OBLIGED TO PROVIDE THE SAME UNDER THE DCR

WHEN THE CARPET AREA OF THE FLAT IS 350 SQ. METERS IT IS NOT AN

ADDITIONAL PREMISES/AREA THAT HE IS AUTHORIZED TO SELL

EITHER TO FLAT PURCHASER OR ANY OUTSIDER. IT IS PART AND

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PARCEL OF THE SOCIETY BUILDING AND IT CANNOT BE SEPARATE

PREMISES AVAILABLE FOR SALE. As soon as the Corporationissues the occupation certificate and the Society is registered,the building as well as the stilt parking spaces, openspaces and all common amenities become theproperty of the Society.

The stilt parking spaces cannot be put on sale by the developeras he ceases to have any title on the same as soon as theoccupation certificate is issued by the Corporation and itbecomes 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. Thestilt 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.

Under MOFA, the developer's right is restricted to the extent ofdisposal of flats, shops and/or garages, which means that anypremises which is included in the Flat Space Index (FSI) can besold by the developer/promoter. The stilt parking space is notincluded in the FSI nor is it assessable for the Corporationtaxes.

B) OBSERVATIONS, FINDINGS, AND OPINION OF SC:

Q

> 12. In view of the contentions outlined above, the

questions that arise for consideration are:

(i) WHETHER STAND ALONE `GARAGE' OR IN OTHER WORDS `GARAGE' AS

AN INDEPENDENT UNIT BY ITSELF IS A `FLAT' WITHIN THE MEANING OF

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SECTION 2(A-1) OF MOFA; (ii) WHETHER STILT PARKING SPACE/OPEN

PARKING SPACE OF A BUILDING REGULATED BY MOFA IS A `GARAGE'; (III)

IF THE ANSWER TO AFORESAID QUESTIONS IS IN THE NEGATIVE, WHETHER

STILT PARKING SPACE/OPEN PARKING SPACE IN SUCH BUILDING IS PART

OF `COMMON AREAS AND FACILITIES' AND (IV) WHAT ARE THE RIGHTS OF

THE PROMOTER VIS-`-VIS SOCIETY (OF FLAT PURCHASERS) IN RESPECT OF

OPEN PARKING SPACE/S / STILT PARKING SPACE/S.

> 13. All these questions have to be considered in

the light of statutory provisions. At this stage we

notice some of the provisions of MOFA. As regards

other statutory provisions, we shall refer to them

wherever necessary.

<> Thus seen, the main focus has been on the provisionsof MOFA. However, the proposition thrown up, as may benoted from the analytical study attempted herein, for anincisive consideration, is this: - The two enactments, forthe reasons brought out, are prima facie not self -contained / -sufficient codes; and therefore, must be readtogether, as mutually interlinked /complementary; not ona standalone basis.

> 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:

.......

In the same vein the other arguments of either

parties, it might be noted, have been set out, and

considered mainly having regard to the statutory

definitions of the other words/expressions used in

the statute namely, ‘common areas’, ‘garage’, …

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<> As may be readily inferred, simply following upon thelines of arguments of both sides, the court appears to haveconfined itself, in considering the point of and settling theprivate dispute, with the main focus, as urged, merely oninterpretation of the statutory definitions of the words /expressions under reference.

>18. Section 10 casts duty upon the promoter to take steps forformation of co-operative society or company, as the case maybe. The said provision reads as follows:

S.10. (1) As soon as a minimum number of persons required toform a Co-operative society or a company have taken flats, thepromoter shall within the prescribed period submit anapplication to the Registrar for registration of the organizationof persons who take the flats as a co-operative society or, as thecase may be, as a company; and the promoter shall join, inrespect of the flats which have not been taken, in suchapplication for membership of a co-operative society or as thecase may be, of a company. Nothing in this section shall affectthe right of the promoter to dispose of the remaining flats inaccordance with the provisions of this Act.

Provided that,….

Provided further that,

>19. There is also obligation cast upon promoter to executethe 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 completehis 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

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BUILDING, AND EXECUTE ALL RELEVANT DOCUMENTS THEREFOR IN

ACCORDANCE WITH THE AGREEMENT EXECUTED UNDER SECTION 4

and if no period for the execution of the conveyance is agreedupon, he shall execute the conveyance within the prescribedperiod and also deliver all documents of title relating to theproperty which may be in his possession or power.

The specially marked words “IN ACCORDANCE WITH THE

AGREEMENT EXECUTED UNDER SECTION 4”are so crucial, asrequiring to be given the due importance; ought not to beglossed over. That is, one would urge, necessary, for aproper understanding and appreciation of the purport andimport of Section 11. And, if so done, it is bound to berealised that, the final conveyance to the registered society(or company or association) as envisaged, would be of theentire property (land and building) in the complex; butthat should/could only be, subject to, not only theexclusive rights to the ‘flat’, so also the proportionate right/ interest in the common areas and facilities (thoughundivided, but not excluding but including the right tosuch part of them as demarked “limited”, and passed on,“as appurtenant thereto”, to individual flat taker(s), as perthe terms spelt out in the “agreement to sell”respectivelyentered into.

Also needs to be specially noted that, Section 11, in terms,covers / applies to ‘apartments’as well, albeit ‘apartments’are, generally speaking, governed by the separateenactment i.e. MAOA. Further that, in the MAOA itselfthere is no provision to cover the mandate of “finalconveyance”; for which, therefore, one has to necessarilyturn to and take into consideration what is provided in,besides MOFA, the rules framed there under (Rules 8 and9). Similar such clinching clues are to be found in both theenactments, elsewhere as well. Most significant of all is, -clause 25 of FORM V, prescribed for MOFA, which reads:“This Agreement shall always be subject to the provisions

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of the Maharashtra Apartment Ownership Act, and therules…”

>20. Section 16 of MOFA provides that the provisionscontained therein are IN ADDITION TO THE PROVISIONS OFTHE T. P. ACT and shall take effect notwithstanding anythingto the contrary contained in the contract.

By necessary implication, (a) for a proper understanding/ construing the implication of the provisions of MOFA,the elated provisions of the TP Act ought to be kept inview, and given due weight age; and (b) though not sospelt out,- so also, besides any other, of the related /connected provisions of the Contract Act, RegistrationAct.

Re: question nos. (i) and (ii):

(A) WHAT IS `FLAT'?

> 21. FOR PROPER CONSIDERATION OF QUESTIONS (I) AND (II) AS AFORE-

REFERRED, IT IS OF CONSIDERABLE IMPORTANCE TO ASCERTAIN THE

IMPORT AND MEANING OF THE TERM `FLAT' DEFINED IN SECTION 2(A-1) ....

(B) WHETHER STILT PARKING SPACE IS A GARAGE?

………

> 30. THE NEXT QUESTION IS, WHETHER STILT PARKING SPACE IN A

BUILDING REGULATED BY MOFA IS A `GARAGE'. THE TERM `GARAGE' HAS

NOT BEEN DEFINED IN MOFA AND, THEREFORE, WE NEED TO FIRST FIND

OUT WHAT IS THE EXTENT AND SCOPE OF THAT TERM IN SECTION 2(A-1).

THE GENERAL TERM `GARAGE' IS APPROPRIATED IN ENGLISH FROM THE

FRENCH LANGUAGE AND MEANS

> 34. The relevant portion of condition No. 2, Form vappended to 1964 rules reads as under:

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THE FLAT PURCHASER HEREBY AGREES TO PURCHASE FROM THE

PROMOTER AND THE PROMOTER HEREBY AGREES TO SELL to the FlatPurchaser one flat No. .......... of the Type .......... of carpet areaadmeasuring .......... sq. meters (which is inclusive of the area ofbalconies) on .......... floor as shown in the Floor plan thereofhereto annexed and marked Annexure 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 PRICE OF THE

COMMON AREAS AND FACILITIES APPURTENANT TO THE PREMISES,

THE NATURE EXTENT AND DESCRIPTION OF THE COMMON/LIMITED

COMMON AREAS AND FACILITIES/LIMITED COMMON AREAS AND

FACILITIES WHICH ARE MORE PARTICULARLY DESCRIBED IN THE

SECOND SCHEDULE hereunder written. The Flat Purchasershereby agrees to pay to that Promoter balance amount ofpurchase price of Rs. .......... (Rupees .......... ...............) havingbeen paid to the Promoter on or before the execution of hisagreement in the following manner;

> 35. WE DO NOT PERCEIVE ANY FORCE IN THE ARGUMENT THAT OPEN

PARKING SPACE TANTAMOUNTS TO A `GARAGE' WITHIN THE MEANING OF

SECTION 2(a-1) READ WITH CONDITION NO. 2, FORM V, OF 1964 RULES. CAN

A PERSON BUYING A FLAT FOR RESIDENCE OR ONE OF THE USES

MENTIONED IN SECTION 2(a-1) REALLY THINK THAT OPEN TO THE SKY OR

OPEN SPACE FOR PARKING MOTOR VEHICLES IS A GARAGE? WE DO NOT

THINK SO....

In perceiving as aforesaid, Paragraph 11 of FORM V, thesecond of two sentences therein, which reads, -“HeSHALL USE THE GARAGE OR PARKING SPACEonly for propose of for keeping or parking the Flatpurchaser’s own vehicle”-has apparently been lost sight of;that mentions “parking space”, in addition to “garage”.

> 37. THE HIGH COURT HAS HELD THAT THE STILT CAR PARKING SPACES

ARE PART OF THE COMMON AMENITIES. IS THE HIGH COURT RIGHT IN ITS

VIEW? MOFA DOES NOT DEFINE NOR does IT EXPLAIN `COMMON AREAS

AND FACILITIES' THOUGH THE SAID PHRASE IS USED AT VARIOUS PLACES

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IN THAT ACT. Mr. Pravin K. Samdani, LEARNED SENIOR COUNSEL FOR

MAHARASHTRA CHAMBER OF HOUSING INDUSTRY SUBMITTED THAT

FOLLOWING COULD BE TERMED AS PART OF THE `COMMON AREAS':

………

The aforesaid list as suggested by the learned senior counsel, inour opinion, is not exhaustive. IT MAY NOT BE OUT OF PLACE TO

REFER TO SECTION 3(f) OF MAOA WHICH DEFINES `COMMON AREAS

AND FACILITIES' AS FOLLOWS:

3. “Definitions – In this Act, unless the context

otherwise requires,-“*

*(IN THE JUDGMENT THE opening WORDS, IN INVERTED COMMAS,

ALBEIT CRUCIAL requiring to be focussed on, NOT FOUND)

………

(f) Common areas and facilities UNLESS OTHERWISE PROVIDED IN

THE DECLARATION OR LAWFUL AMENDMENTS, thereto means--

(1) THE LAND ON WHICH THE BUILDING IS LOCATED;

(2) ...

(3) the basements, cellars, yards, gardens, PARKING AREAS and storage spaces;

(4) to (7).....

(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

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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 AFORE 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 THE `COMMON AREAS' AND

UNLESS IT IS SO DONE BY THE PROMOTER, THE PARKING AREA CANNOT BE

TERMED AS PART OF `COMMON AREAS'. WE ARE QUITE UNABLE TO ACCEPT

THIS SUBMISSION.....

IF A PROMOTER DOES NOT FULLY DISCLOSE THE COMMON AREAS AND

FACILITIES HE DOES SO AT HIS OWN PERIL. STILT PARKING SPACES WOULD

NOT CEASE TO BE PART OF COMMON AREAS AND FACILITIES MERELY

BECAUSE THE PROMOTER HAS NOT DESCRIBED THE SAME AS SUCH IN THE

ADVERTISEMENT 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' ...

> 39. WE HAVE NOW COME TO THE LAST QUESTION NAMELY-- WHAT ARE

THE RIGHTS OF A PROMOTER VIS-`-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

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ARGUMENT IS FOUNDED ON THE PREMISE, FIRSTLY, THAT STILT PARKING

SPACE IS A `FLAT' BY ITSELF WITHIN THE MEANING OF SECTION 2(A-1) AND

IN THE ALTERNATIVE THAT IT IS NOT PART OF `COMMON AREAS'. BUT WE

HAVE ALREADY HELD THAT `STILT PARKING SPACE' IS NOT COVERED BY

THE TERM `GARAGE' MUCH LESS A `FLAT' AND THAT IT IS PART OF

`COMMON AREAS'. AS A NECESSARY COROLLARY TO THE ANSWERS GIVEN

BY US TO QUESTION NOS. (i) TO (iii), IT MUST BE HELD THAT STILT PARKING

SPACE/S BEING PART OF `COMMON AREAS' OF THE BUILDING DEVELOPED

BY THE PROMOTER, THE ONLY RIGHT THAT THE PROMOTER 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 SECTION 2 (a-1) NOR `GARAGE' WITHIN THE

MEANING OF THAT PROVISION IS NOT SELLABLE AT ALL.

> 40. MOFA WAS ENACTED BY THE MAHARASHTRA LEGISLATURE AS

IT WAS FOUND THAT BUILDERS/DEVELOPERS/PROMOTERS WERE

INDULGING IN MALPRACTICES IN THE SALE AND TRANSFER OF

FLATS AND THE FLAT PURCHASERS WERE BEING EXPLOITED. The

effect of MOFA may be summarized as follows.

First, every promoter who constructs or intends to

construct block or building of flats in the area to

which MOFA applies has to strictly adhere to the

provisions contained therein, i.e., inter alia, he has

to make full and true disclosure of the nature of his

title to the land on which the flats are constructed

and also make disclosure in respect of the extent of

the carpet area of the flat and the nature, extent

and description of the common areas and facilities

when the flats are advertised for sale. Secondly,

the particulars which are set out in Section 4(1A)

(a) (i) to (x) have to be incorporated in the

agreement with the flat purchaser. Thirdly, the

promoter has to apply to the Registrar for

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registration of the organization (co-operative

society or company or condominium) as soon as

minimum number of persons required to form such

organization have taken flats. As regards unsold

flats, the promoter has to join such organization

although his right to dispose of unsold flats remains

unaffected. FOURTHLY, AND MORE IMPORTANTLY, THE PROMOTER

HAS TO TAKE ALL NECESSARY STEPS TO COMPLETE HIS TITLE AND CONVEY

TO THE ORGANIZATION HIS RIGHT, TITLE AND INTEREST IN THE LAND AND

BUILDING AND EXECUTE ALL RELEVANT DOCUMENTS ACCORDINGLY. IT

WAS ARGUED BY Mr. Tanmaya Mehta, LEARNED COUNSEL FOR THE

PROMOTER THAT IN VIEW OF THE PROVISIONS OF MOFA, SECTION 6 OF T.P.

ACT AND ARTICLE 300A OF THE CONSTITUTION, THE RIGHT OF THE

PROMOTER TO TRANSFER PARKING SPACES IS NOT AT ALL RESTRICTED.

Relying upon the decisions of this Court in ICICI

Bank Ltd. v. SIDCO Leathers Ltd.& Ors..4,

Karnataka State Financial Corporation v. N.

Narasimahaiah & Ors.5 and Bhikhubhai Vithlabhai

Patel & Ors., v. State of Gujarat & Anr., he

submitted that the provisions contained in MOFA

must be construed strictly and there is no provision

either express or by necessary implication in MOFA

restricting the sale of stilt or open parking spaces.Mr. Sunil Gupta ALSO ARGUED THAT PROMOTER CONTINUES TO

HAVE CONTRACTUAL, LEGAL AND FUNDAMENTAL RIGHT TO

DISPOSE OF THE STILT/OPEN PARKING SPACE IN THE MANNER

IN WHICH HE PROPOSES AND HIS CONSUMERS ACCEPT. We

think this argument does not bear detailed

examination. Suffice it to say that if the argument of

learned senior counsel and counsel for promoter is

accepted, the mischief with which MOFA is

19


obviously intended to deal with would remain

unabated and flat purchasers would continue to be

exploited indirectly by the promoters. IN OUR

OPINION, MOFA DOES RESTRICT THE RIGHTS OF THE

PROMOTER in the block or building constructed for

flats or to be constructed for flats to which that Act

applies. The promoter has no right to sell any

portion of such building which is not `flat' within

the meaning of Section 2(a-1) and the entire land

and building has to be conveyed to the organisation;

the only right remains with the promoter is to sell

unsold flats. It is, thus, clear that the promoter has

no right to sell `stilt parking spaces' as these are

neither `flat' nor appurtenant or attachment to a

`flat'.

The case law cited, on a quick reading, does not appear tobe of any direct relevance or of real help to support thearguments. Be that as it may, as is seen, the court itself hasnot considered necessary, hence not considered the caselaw cited.

Concerning the view the court has taken, as borne out in

the last sentence of paragraph 40. , that reads, - “It is,

thus, clear that the promoter has no right to

sell `stilt parking spaces' as these are neither

`flat' nor appurtenant or attachment to a flat”,-

read, - besides other detailed comments herein

later,- the inset comments under earlier

paragraphs 19 and 20 of the judgment.

20


> 41. In view of the above, it is not at all necessary to deal withthe factual submissions advanced by Mr. Tanmaya Mehta.Having regard to the answer to question No. (iv), the finding ofthe High Court that undertakings are neither binding on the flatpurchasers nor the society also warrants no interference.

UQ

NOTE: To make it clear, while reproduced above are onlysome portions on a selective basis, it is recommended,being necessary, to mindfully read the whole of theJudgment for an independent study and understanding.

(UPPER CASE/Italics supplied)

4. OWN INEPENDENT OBSERVATIONS and

VIEWPOINTS:

A) Facts as narrated are not seen to cover or

provide any clue on the following:

(a) Whether as per approved plan, ‘stilt parking’

and ‘open parking’had been demarcated?

(b) Whether in the agreement (s) for sale with

flat takers those were disclosed, so also the

price there for, either as part of lump sum or

separately, and charged for and collected from

the flats takers?

(c) Whether there were sale deeds executed

and registered? If so, how the provision for car

parking, both stilt and open, and consideration

there for were disclosed?

21


(d) Whether the 25 stilt car parking slots

retained by the promoter were the surplus

remaining; that is, excluding those covered (as

queried) in (b) and (c) above?

(e) Whether the promoter had any unsold flats

left with it, after the CHS was formed and

registered?

(f) Whether the formal conveyance as mandated

by Section 11 of the MOFA has been duly

effected? If answer is ‘yes’, did the promoter

have any unsold flats even then?

Note: Had the aforesaid and any other

further relevant facts been gone into, in

details, and brought on record, that could

have been of immense assistance for firstly

the lower courts, to adjudicate the point of

dispute in proper light and better

perspective.

B) Interpretation of MOFA

The commentary and cited case law in the popular

text book published by Law Book House (2003

Edn.) on MOFA, etc., are of guidance. At pgs. xli,

xlii, the case law summed up under the topic head,

- GARAGE USED FOR OTHER THAN PARKING CAR, provide useful

information. None of those old court cases have

been cited in the instant case or even referred;

22


hence the judicial view taken in the past, especially

on the import or significance of the concepts such

as, ‘common areas’and garage’seems to have been

over sighted.

Similarly, no notice is seen to have been taken of

some of the other useful information available.

Particularly, those are on the history and historical

developments of the state legislation on ‘flats’. One

believes that, those could have thrown more light,

so as to assist the court in adjudicating the dispute

in the instant case in all its ramifications. To be

precise, as one sees, had it been so stressed, the

court would possibly have been persuaded to veer

round to the view that after all, the two enactments,

MOFA and MAOA, though prima facie are separate ,

not really so but would have be necessarily read

together, not in isolation, for certain practical

purposes. For example, in the instant case, for a

proper constriction and understanding of the true

import of the terms such as ‘limited’common

areas- of which special definition is found in

MAOA, but not in MOFA.

To dilate:

At page 10 of the book -

i) In the very nomenclature of the enactment,

the word ‘ownership’is used.

23


The first limb of the preamble to the MOFA

(1963) reads:

< WHEREAS, it has been brought to the notice

of the State Government that, consequent on

the acute shortage of housing in the several

areas of the State... sundry abuses,

malpractices, and difficulties relating to the

promotion of the construction of, and the sale

and management and transfer OF FLATS TAKEN

ON OWNERSHIP BASIS exist and or increasing. >

The third limb reads:

< AND WHEREAS, it is now expedient after

considering the recommendations and

suggestions made ... to make provision

during the period of such shortage of

housing for the regulation ...., OF FLATS ON

OWNERSHIP BASIS.... >

ii) At page 15 of the book, read the commentary

on case law on – Whether Flat can be

attached and sold in execution of a decree?

It is to be noted that, earlier, there was a

controversy on the point of issue, and in the

absence of a clear cut provision in MOFA, the

dispute had to be resolved by adverting to

the provisions of the State Co-op. Societies

Act, and settled through a long drawn

24


process of reasoning. Incidentally, even after

the 1986 retroactive amendment of the

definition of “Flat”(section 2 (a)), to include

‘an apartment’, no specific provision has been

made enabling the flat holder to mortgage

and obtain home loan. In other words, for

obtaining home loan, a flat holder has to

necessarily rely on the specific provision in

the other enactment namely, MAOA. No need

to add that, such is the position that has come

to be/ is being accepted and followed all

along for the granting of home loans by

lending institutions also to ‘flat holders’, not

only to ‘apartment purchasers’. Incidentally,

that such is the position has been recognised

also for tax purposes. The reference is to,

among others, the allowance of tax incentives

in respect of home loan, also to ‘flat holder’.

That is very much intended may be seen

from the several provisions of the I T Act;

for example, see the comprehensive language

of section 269 UA, intended to cover both

types of units, i.e. flats, besides apartments.

At page 151 of the book, the expert commentary, in

the same vein, reads:

< Prior to 1970 it was felt that on account of

shortage of lands in urban areas the majority

of...could not think in terms of owning houses on

25


individual basis. True, there was an ever-growing

tendency to construct multi-storeyed flats,

apartments, and the like on ownership basis but

persons purchasing.... did not have a marketable title

thereto and could not obtain any loan by mortgaging

such flats, felt necessary to legislate.... The above

Act was therefore passed to provide for the

ownership of an individual apartment in a building

and to make such apartment heritable and

transferable property, and to provide for matters

connected with the said purposes.>

To be noted: The above narrated legislative historygoes to explain that, the basic objective was to vestpurchasers of both flats and apartments with‘ownership rights’, alike.

ON THE CONCEPT OF, - “COMMON AREAS AND FACILITIES”

As specially defined in MOFA, the term “common

areas and facilities”, of course, means and includes,

- the land on which the building stands, and all

other wedded but common areas or facilities; which

again is an expression specially defined, as to mean

and include certain items specified. However,

should one have to go by a strict and narrow view,

as has been done in the instant case, then that

would inevitably lead to a strikingly piquant /bizarre

situation. In that, all those other facilities known to

be provided by promoter’s as agreed with flat

takers but not found a mention, e.g. swimming pool,

26


club house, and the like, or those compulsorily

required to be provided as per the mandates of

local regulations e.g. so called, - ‘Rain Water

Harvesting’, Sewerage Treatment Plant’and the

like, though physically located outside of the flat,

would be left uncovered by the concept of

“common areas and facilities”as defined. Albeit,

those also are, taken into account for pricing, and

required to be available to the flat takers, for

common use and enjoyment,- for the purposes for

which they are intended or required.

Another aspect that has not been argued, hence

left unconsidered by court (s) is this:

Statutory interpretation by Francis Bennion, 2nd

Edn., section 288, with the heading “presumption

that updating construction to be given”states one

of the rules thus (page 617):

< It is presumed that parliament intends the

court to apply to an ongoing act a construction

that continuously updates its wording to allow

for changes since the act was initially framed

(an updating construction). While it remains law,

it is to be treated as always speaking. This

means that in its application on any date, the

language of the enactment, though necessarily

embedded in its own time, is nevertheless to be

construed in accordance with the need to treat it

as current law. >

27


With that in focus, if one were to test the

interpretation (as urged, -and accepted by court) of

the word ’garage’, the only inference possible is

that for a proper construction, what ought to be

borne in mind are these: Any such concept as

‘garage’keeps on changing over the years. Going

by natural presumption, the word ‘garage’has been

used in the 1963 enactment, as that was the type

of facility for car parking known at that point in

time and in vogue. But it is only in course of time

later, over the years, the new ideas of having for

car parking, -stilts, underground parking, even the

lately known high / multi level car parking, have

come in vogue. In view thereof, if the above rule of

construction were to be followed, then, in today’s

context, even though the same term ‘garage’has

continued to be used, it must be given a new

meaning, as to accommodate or yield to take within

its ambit also the new kinds of later innovations;

that is, besides stilt, also the others as afore said.

Further, the words “appurtenant to flat”have no

small significance but must be given the meaning as

intended and warranted; that has not been done in

the instant case.

In fact, as said earlier herein, the court itself has

observed to the effect that the meaning as assigned

in MOAO to the concepts dealt with cannot be

simply ignored. Another reason, as canvassed, even

if to take a common sense view, both the Acts must

28


be read together, for the purpose of construing the

meaning of ‘limited common area’. If so done, one

submits, that demarcated stilt car parking area(s)

will automatically come within the scope of the said

term; hence, to be covered/included in FORM V.

That is, same as in the deed of conveyance to

apartment purchaser under MAOA.

No need to add and pinpoint that, to hold otherwise,

that would have the patently unintended or

unwarranted consequence. That is, result in

denying / depriving flat takers the unquestionable

fundamental rights to transfer, inherit, mortgage, so

on; that would fly in the face of the very objective

of the MOFA, also of the allied enactment, MAOA.

For similar reasoning, even if ‘flat’were to be taken

requiring to be construed so strictly as argued and

accepted, as to exclude ‘stilt car parking’, there

seems to be nothing in MOFA in support. On the

contrary, for reasoning advanced herein, the stilt

car parking slots, it can be forcefully argued, must

be given the same meaning as under MAOA and

regarded as “limited common area” also under

MOFA. If so done, what must inevitably follow is

that flat taker, same way as apartment taker, has a

lawful right for an exclusive occupation and

enjoyment of the assigned slot(s) out of the

common areas exclusively for his parking.

Following through such reasoning, the view that

29


promoter has no right to sell, or if done for a price

that will be illegal,- as heard to being opined even

by experts in legal circles, -is bound to fall like a

pack of cards. This is no different from, but

supported by the same logic, or reasoning behind

that flat taker is regarded to have an inherent right

to mortgage and obtain home loan, so on ; also that,

any such term in MOFA, not specifically covered in

the definition section, ought to, for all practical

purposes, be widely construed. To be so done,

keeping in focus the most fundamental rule of all;

namely the rule of ‘purposive interpretation’, --

which if simply understood, merely means that it

must be such an interpretation as to serve or sub

serve eventually the purpose or the object of

accomplishing the legislative intent behind.

For the above purpose, to take a narrow view, -

that is MOFA and MAOA are two entirely

independent enactments,- would make a non sense

of , and offend, the very wisdom or objective of the

legislation or legislative intent behind. It is

observed that, certain observations in the instant

case itself,- read closely paragraph 37 (the

concluding lines therein) of the judgment, - the SC,

as may be inferred, is inclined / leaning towards

such a line of reasoning as canvassed above; but,

regrettably though, has stopped short of pursuing it

any further.

30


“Question of law”

In the first place, in one’s perception, a fundamental

point (poser) that arises for an analytical study is

this: Does the matter necessarily involve a

‘question of law’, so as to require a long drawn

process of reasoning, -as is seen to have been

resorted to, - for arriving at a convincingly

judicious answer? To put it differently, is it not

preferable to adopt a different line of reasoning, but

which in comparison entails no complicity, if that

would lead to same conclusion as of now. That is,

for the court to decide, the promoter’s contested

action in retaining the stilt car parking slots, with

intent to sell separately, is unlawful, not being in

accordance with the governing law; hence, its

prayer for an order of injunction against the OPs

cannot be granted but should be rejected.

To be precise, had the OPs put up their case on

such different grounds and advanced arguments

accordingly, as suggested herein, the court’s

decision would still have been the same and in their

favour. For that matter, possibly, the dispute would

not have had to be taken up to court.

To add:

A) According to the scheme of the provisions as

embodied in MOFA, sale of a flat is required to be

made for a price as agreed with flat taker. As

31


clearly spelt out in Section 4, the written

‘agreement for sale’there under should be in the

prescribed form. The form so prescribed is FORM

V (inserted by G.N. of 10-4-1987, w.e.f. 13-4-

1987).

B) Section 4 (1A) lays down what all are the

particulars which the prescribed ‘agreement’for

sale taken “on ownership basis”should inter alia

include. As specified in clause (a) therein, the

particulars the agreement should contain, among

others, are, -

........

(iv) the price of the flat including the

proportionate price of the common areas and

facilities which should be shown separately, to

be paid by the purchaser of flat; ..”

(v) the precise nature of the organisation to be

constituted of the persons who have taken flats

or are to take the flats;

(vi) the nature, extent and description of the

common areas and facilities;

(vii) the nature, extent and description ofLIMITED , COMMON AREAS AND FACILITIES, IF ANY;

(viii) percentage of undivided interest in the

limited common areas and facilities if any,APPERTAINING TO THE FLAT AGREED TO BE SOLD;

32


(b) (This enumerates copies of documents requiring

to be attached to the agreement for sale in FORM

V)....

The foregoing are mandatory provisions; hence, are

required to be mindfully read, and harmoniously and

strictly construed. If so done, so far as one could

see, the promoter will be within his lawful right

only if it /he effects sale of any facility, - to be

precise any special type of car parking, such as stilt

car parking as in the instant case, - in terms /

pursuance of the same document – i.e. the

agreement for sale (FORM V) entered into for

effecting the sale of ‘flat’as such. To put it

differently, if promoter does not do so or does it

any differently, as in contemplation in the instant

case, it / he will be exposing self to legal action, of

every conceivable sort in general, more so on the

ground of having committed an ‘offence’ as

envisaged in inter alia, section 13 and 14 of MOFA

itself. So prefer to leave it as is, following the same

wisdom implied in the SC‘s related cryptic

observations in a related context of the Judgment.

Be that as it may, now, looking into the successive

judgments of HC and SC, it is obvious that both

courts have proceeded on same lines; that is,

inferably, toeing the lines with, and /or conceding /

to following upon the lines of arguments as

33


advanced by both sides - on the premise that there

are “questions of law”requiring adjudication. And,

for that purpose, as urged, that an interpretation of

certain words/expressions used in MOFA has to be

embarked on/ gone through.

C) At this juncture the under mentioned aspects, as

commonly understood, and put in a language for a

layperson to easily make out, are essentially

required to be borne in mind:

According to well settled and largely followed

principles / rules, as elicited in a plethora of case

law:

Not all questions are to be regarded as ‘questions

of law’, particularly as requiring a judicial

interpretation. But only any question on which the

position in law is not clear, or not clear enough to

decide single-mindedly and firmly affirm, and hold

that there is only one view possible which could be

intelligently and judiciously (in its profound sense)

held out. And more so, without having to go through

a long drawn argumentative process and reasoning.

In short, an appeal ought not to be entertained

unless the court is satisfied that, legally but strictly

speaking, there is no scope for holding a contrary

34


view or a better one at that to please the eyes of

law.

In the instant case, counsels are seen to have gone

on, so to say, to convince the court on the merits or

otherwise of own independent arguments. In doing

so, they are seen to have harped on mainly the

statutory definitions of the words, - ‘flat’, ‘common

areas and facilities’, ‘garage’, so on.

In doing so, however, it is noted that, court’s

attention has not been drawn to, besides others, -

hence not considered by the court(s) –the following

intricate facets:

(a) The opening words of section 2 of the MOFA,

which reads, -

“Definitions. –In this Act, UNLESS THE

CONTEXT OTHERWISE REQUIRES, - “

(b) The principle of interpretation that has been

receiving more and more attention of courts,

in recent times, graphically described as,

“UPDATING CONSTRUCTION”.

The said principles, in a manner of urging, may

have to be construed to be an extension of the

other rules of interpretation enunciated by courts in

35


decided cases, commonly to aid ascertainment of so

called “Contextual Meaning”.

Those and the other appropriate rules of

interpretation could have been summoned for

assisting/useful guidance, in the exercise of

interpretation gone through; which, however, has

not been done in the course of arguments by both

the sides.

As is imagined, perhaps, had the foregoing been

argued and relied upon, the court would have been

convinced that the correct position in law is readily

decipherable, even without having to go through the

long drawn process of reasoning as urged by the

parties.

In the Judgment, the main observations refer to the

mandatory provisions of section 10 and section 11

of MOFA. Those provisions, if closely read and

incisively understood, are sure to have been noted

to be clarificatory and self-sufficient enough for

concluding that the promoter’s action in retaining

some stilt parking slots, with intent to sell

separately, that is outside of and after execution

and registration of the “agreements to sell”is in

any case, a misguided action / misadventure, and

36


clearly in contravention of the scheme of the

provisions of sections 11 and 12 of MOFA. To be

precise, the point sought to be made is. even as per

a plain and straight forward reading of only

sections 11 and 12, on a standalone basis, the point

of dispute would have come to be settled no

differently than now. That is, without having had to

go through the painful long drawn process of

“interpretation” resorted to, of the words/

expressions namely, ‘flat”, “garage”and “common

areas and facilities”and “limited”“common areas

and facilities”.

On the aspect of principles of interpretation to be

borne in mind, what are categorised as External

Aids are of the utmost importance. ‘Legislative

History and Background’is one of them, to be taken

as of significant relevance herein.

As lucidly summed up in text books:

The legislative history of a statute could be traced

and considered to understanding its scope. Held

permissible for ascertaining the evil sought to be

remedied.

Further, to sustain the presumption of

constitutionality, consideration may be had even to

37


matters of common knowledge, the history of the

times and every conceivable state of facts existing

at the time of legislation. Therefore, due

importance must be given to the legislative history,

context and background.

It is permissible to look into the Statement of

Objects and Reasons of the Bill for the purpose of

appreciating the background and the antecedent

factual matrix leading to the legislation. Also, for

finding out the intention of the legislature and to

interpret and determine the true scope of the

provision, provided of course, there be ambiguity in

a genuine sense.

The words and expressions defined in one statute

as judicially interpreted do afford a guide to the

construction of same words or expressions used in

another , should both statutes are pari materia

legislations or it is specifically provided in one

statute to give the same meaning to the words as

defined in another statute.

Had these been kept in focus, as would have been

ideally expected, and brought up in the course of

the proceedings, as one sees it, there could have

38


been no justification for the dispute to have been

settled in better light?

SC in re. PODAR CEMENT

This write-up herein might not be complete without

drawing attention to the earlier one attempted in

this series, and posted @LAW and ('vs'?) CASE LAW On

“FLATS”–A Critical Study - TaxGuru. That represents a case

study of the SC judgment delivered in re CIT vs

Podar Cement Ltd. (reported on this website

@Owner vs Beneficial Owner- of Flats ; also in 226

ITR 625). In which, the concept of “PRECEDENT”,

having regard to the factual matrix of that case, has

been specially brought out in detail, which is of a

direct relevance herein as well.

Some of the other aspects covered / viewpoints

shared in that article, with particular reference to

the same property holder’s rights in flats as in the

instant case, would be of common relevance.

That is a case in which, as distinct from the instant

case, the predominant issue concerned a dispute

between the Revenue and taxpayer, Nonetheless,

what needs to be pinpointed/noted is that, the apex

court, in dealing with the connected aspect, of the

rights of a holder of flats in a building complex, has

followed a diagonally opposite line of reasoning, as

distinct from the instant case. For a useful hint, in

39


that case,- the ruling is to the effect that the most

essential criterion of all, underlying the concept of

“ownership”, so as to satisfy the acid test of

“ownership”, the pre-requisites,- to quote from the

judgment –are mainly these:

“(a) The power of enjoyment (e.g., the

determination of the use to which the res is to

be put, the power to deal with produce as he

pleases, the power to destroy);

(b) possession which includes the right to

exclude others;

(c) power to alienate inter vivos, or to charge

as security;

(d) power to leave the res by will.

The Judgment further reads: “One of the most

important of these powers is the right to exclude

others. The property right is essentially a

guarantee of the exclusion of other persons from

the use or handling of the thing…But every owner

does not possess all the rights set out above—a

particular owner’s powers may be restricted by law

or by an agreement he has made with another.

(refer to G.W. Paton on Jurisprudence, 4th edn., pp.

517-18)”

For getting a full grip of the ratio of the said court

decision, so as to appreciate why the ruling in that

case is not reconcilable but prima facie contradicts

40


the ruling in the instant case, it is strongly

suggested, may be read, in full.

EPILOGUE

For underlining and driving home effectively certain

related humane aspects, it may be, not out of

context but, appropriate to share the outstanding

wisdom of a legal luminary, - a great thinker and

humanist of our times, all rolled into one,- behind

the following quotes:

LAWYERS, PRESS, JUDICIARY

Lawyers

In a vast democracy like India, many citizens

are bound to be undimensional. But no lawyer

has any excuse for being undimensional. By

his learning and equipment and by his

professional competence he is better qualified

than the rest of the citizenry to take an active

part in the making of laws and their formulation

of public policies. He would be failing his

country if he did not do his duty. The lawyer

has to act as a catalyst. The responsibilities

which today lie on the shoulders of the lawyers

are far greater than at any time in world

history.

We produce lawyers who seem lost without case

law to support their propositions. The average

41


lawyer, who finds himself without a precedent to

cite, is like a tycoon without balance sheet, jazzman

without a trumpet, a gossip without a club.

A lawyer with a well furnished mind alone can be

truly a counsellor at law; he alone can, not merely

look up precedents, but guide his client along the

path of wisdom, even of generosities which may

appear irrelevancies to the preoccupied client. In

the hands of such a lawyer, the law represents the

application of reason to noble and purposeful ends.

Man has been defined as a rational animal. But

you cannot live in India without being

constantly reminded that this definition was

given to man by man himself in a characteristic

moment of self-adulation.

In the last..decades, we have taken plenty of

wrong turns at the crossroads , misused time,

taken gold for dross and dross for gold;

however, would like to reaffirm my

unquenchable confidence in the long-term

future of India.

To faithfully follow upon and continue to live

with the same spirit and pessimistic outlook, in

the context herein, one may wish to simply add,

-may be, it is, frankly speaking, not but too late

in the day to even realise the gravity of the

42


obtaining scenario; but that is not to say, by

any yardstick used for measuring time, it may

not be late for everyone concerned to wake up

to the realities all around only to think of and

striving own best for bringing about a change /

improvement for a better tomorrow (!).

The New York State Legislature passed a major

Piece of consumer legislation in 1977 to ensure

that laws affecting common people would be

“plain- language laws”. Attempt to likewise

cure our laws of their incredible fuzziness is

more than overdue, by decades.

There can be no excellence in the law without

excellence in lawyers.

JUDICIARY

Quoting Pathak J, from a landmark SC Judgment,

observed:

Q

......The responsibility fixed on the court is serious

one. And there is no need to warn that this power

...can have grave consequences if the content of its

potential is not truly appreciated and realized by

those who wield it. Whenever a Court breaks new

ground, the development and recognition of new

43


rights is often accompanied by the birth of

problems surfacing also for the first time..... UQ

Source: ‘Memorial’lecture delivered on the

subject of SC’s judgment in “the Judges’case”

PRESS

The Press must make a sharp distinction between a

story, the publication of which is dictated by public

interests, and a story which is entirely sleazy ad

sensational. Not only has the right but also duty to

expose the truth fully.

(TO add: In any event, the Press has a

basic duty not to give undue publicity or

unduly project and propagate anything, the

nuisances of which even a law expert may

have no competence to be reasonably sure

on or explain satisfactorily if questioned, -

as to what is “the truth”, or attendant

misconception)

Unfortunately, the 1980s has been a degraded

decade- even progressions like the legal,

accountancy and medical professions, have

become commercialized. The same evil has

afflicted journalism. Professions have sunk to

the lower level of business. We are living in

times when professional or business ethics

44


sounds like an oxymoron, a contradiction like a

hot ice –cube or a tiny giant. Today the main

idea of most newspapers, journals or magazines

is to maximise readership, regardless of the

higher values which ought to animate

journalism.>

In a lighter vein, a reading of above leaves one, even though not

normally used to or has a fancy to exaggerate or eulogize, with an

unpredictable urge to visualize or admire the tax gatherers’

exemplary forethought in giving no different status to the two, -

professionals and businessmen. Reference is to the long-range vision

and wisdom in framing and bringing to taxation even as long back as

in 1922, income of both under the same head, - old section 10 (1)

(new section 28) of IT Act.

<> The above are quotes from the memorable

published articles and speeches, of legal legend,

Palkhivala, a widely acclaimed scholar par

excellence, with the backing of his erudite

knowledge, also lifelong exposure and practical

experience in the field of law practice.

(Source: WE, THE PEOPLE and We, the

Nation; the two books are worthwhile to be

read not once but times over as one will do

of the Bible, the Bhagavad Geeta, or the

like)

These are being shared in the fervent hope that

may serve, as intended, the purpose of inciting,

inducing, or provoking the others to appreciate, and

45


try and imbibe the righteous spirit and public-

centric approach.

Tail Piece:

To end with an optimistic note:-

No doubt, as things stand as of now, there appears

to be no scope for hoping, in the foreseeable future,

any positive or sincere move forward from the men

in governance, either in the states or at the centre,

towards a change in the overall scenario, for the

better.

In the interim, the only hope on hopes that could

provide some solace is that, the Judiciary, noted

and commended of late for its proactivism, may not

waver in its endeavours but think of and come to

the rescue, by providing some relief/bring succour

to the thus far victimised buying community -

purchasers /owners of flats or apartments. What is

immediately called for is the realisation by the

judiciary of the need for construing the extant state

enactments (governing the construction and sale of

multi-storeyed buildings / ‘units’thereof), not only

of Maharashtra but of every other State, in such a

manner as to, not to resort to a technical or hyper

technical approach, with the sole aim of bringing

46


home justice to the investing public. As said herein

before, that could be attempted and accomplished,

to begin with, by construing the enactment (s)

cohesively; that is, as legislation for saving and

protecting the lawful rights of the investing people

spoken of herein. May be, desirably do so, suo

motu; say, by treating the matter as one deserving

to be taken on as a PIL. Alternatively, do so on the

very next occasion the court is called upon to opine

in the matter.

Disclaimer: The foregoing brief analysis is intended to convey own

thoughts and viewpoints, based on an independent study of the covered

limited aspects. Welcome to share, should anyone, especially a

competent law expert in field practice, entertain any doubt or has a

better view to offer after an independent study, so as to serve the

objective of common good.

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