# NAHALCHAND LALOOCHAND PVT. LTD v. PANCHALI CO-OPERATIVE HOUSING SOCIETY LTD

- **Citation:** [2010] 10 S.C.R. 804
- **Court:** Supreme Court of India
- **Decided:** 2010-08-31
- **Case number:** Civil Appeal No. 2544 of 2010
- **Bench:** R.M. Lodha, A.K. Patnaik
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/nahalchand-laloochand-pvt-ltd-v-panchali-co-operative-housing-society-ltd-26159
- **Pages:** 40

## Headnote

Maharashtra Ownership Flats (Regulation of the
Promotion of Construction, Sale, Management and Transfer)
C Act, 1963:
s. 2(a-1) - Stilt parking space - Rights of promoter viva-vis housing society - Held: Stilt parking space is neither
covered by term 'flat' nor 'garage' but is a part of 'common
0 areas' - MOFA restricts the rights of promoter in the block or
building constructed for flats or to be constructed for flats to
which the Act applies - Promoter has no right to sell any
portion of such building which is not 'flat' within the meaning
of s. 2(a-1) nor has he the right to sell stilt parking space -
E He only has the right to sell unsold flats - Entire land and
building has to be conveyed to the organization -
Maharashtra Ownership Flats (Regulations of the Promotion
of Construction, Etc.) Rules, 1964 - Development Control
Regulations for Greater Bombay, 1991 -
Maharashtra
Apartment Ownership Act, 1970- Maharashtra Regional and
F
Town Planning Act, 1966 - Transfer of Property Act, 1882 -
Urban Development.
s. 2(a-1) - 'Flat' - Meaning of- Held: Flat is a separate
and self-contained set of premises that forms part of the
G building and is used or intended to be used for residence or
office, showroom or shop or godown or for carrying on industry
or business -
Stand alone garage or garage as an
independent unit by itself is not a 'flat' within the meaning of
s. 2(a-1) - Interpretation of Statutes.
H
804
NAHALCHAND LALOOCHAND PVT. l TD. v. PANCHAL! CO805
•
OPERATIVE HOUSING SOCIETY LTD.
s. 2 (a-1) - Stilt parking space/open parking space of A
building - Held: Stilt parking space/open parking space of a
building regulated by MOFA, is a part of 'common areas'- It
may be usable as a parking space but does not tantamount
to a 'garage' within the meaning of s. 2(a-1) rlw condition No.
2 Form V of 1964 Rules, thus not saleable independently as
B
a flat or along with a flat - Maharashtra Ownership Flats
(Regulations of the Promotion of Construction, Etc.) Rules,
1964.
Purpose of Maharashtra Ownership Flats (Regulation of C
the Promotion of Construction, Sale, Management and
Transfer) Act, 1963 - Explained.
Words and Phrases:
'Flat' - Connotation of, in the context of premises.
D
'Garage' - Conntation of.
The appellant, a promoter, developed few properties
and entered into agreements for sale of flats with the flat
purchasers, namely, the members of the respondent coE
operative housing society. The appellant filed a suit for
permanent injunction restraining the respondent society
from encroaching upon, trespassing and/or in any
manner disturbing, obstructing, interfering with its
possession in respect of 25 parking spaces in the stilt
F
portion of the building. The appellant submitted that each
flat purchaser would have a right in respect of the flat
sold to him and to no other portion; and that each flat
purchaser had executed a declaration/undertaking in its
favour to the effect that stilt parking spaces/open parking
G
spaces shown in the plan exclusively belonged to the
promoter and that the declarant would have no objection
to the sale of such spaces by it. The respondent
contended that the promoter had n_o right to sell or
H
806
SUPREME COURT REPORTS
[2010] 10 S.C.R.
A
dispose of spaces in the stilt portion and that the
undertakings given by the flat purchasers were not
binding being contrary to law and based on such
undertakings, the promoter did not acquire any right to
sell stilt parking spaces. The trial court dismissed the suit
B
filed by the promoter. The High Court dismissed the
appeal. Therefore, the promoter filed the instant appeal.
Dismissing the appeal, the Court
HELD: 1.1 The term 'flat' apart from the statutory
C
definition, though has no uniform meaning but in its
natural and ordinary meaning, 'flat' is a self-contained set
of premises structurally divided and separately owned
for dwelling. [Para 23) [829-G]
D
E
F
1.2 The definition of the term 'flat' u/s. 2(a-1) of the
Maharashtra Ownership Flats (Regulation of

## Text

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A
B
[2010] 10 S.C.R. 804
NAHALCHAND LALOOCHAND PVT. LTD.
v.
PANCHAL! CO-OPERATIVE HOUSING SOCIETY LTD.
(Civil Appeal No. 2544 of 2010)
AUGUST 31, 2010
[R.M. LODHA AND A.K. PATNAIK, JJ.]
Maharashtra Ownership Flats (Regulation of the
Promotion of Construction, Sale, Management and Transfer)
C Act, 1963:
s. 2(a-1) - Stilt parking space - Rights of promoter viva-vis housing society - Held: Stilt parking space is neither
covered by term 'flat' nor 'garage' but is a part of 'common
0 areas' - MOFA restricts the rights of promoter in the block or
building constructed for flats or to be constructed for flats to
which the Act applies - Promoter has no right to sell any
portion of such building which is not 'flat' within the meaning
of s. 2(a-1) nor has he the right to sell stilt parking space -
E He only has the right to sell unsold flats - Entire land and
building has to be conveyed to the organization -
Maharashtra Ownership Flats (Regulations of the Promotion
of Construction, Etc.) Rules, 1964 - Development Control
Regulations for Greater Bombay, 1991 -
Maharashtra
Apartment Ownership Act, 1970- Maharashtra Regional and
F
Town Planning Act, 1966 - Transfer of Property Act, 1882 -
Urban Development.
s. 2(a-1) - 'Flat' - Meaning of- Held: Flat is a separate
and self-contained set of premises that forms part of the
G building and is used or intended to be used for residence or
office, showroom or shop or godown or for carrying on industry
or business -
Stand alone garage or garage as an
independent unit by itself is not a 'flat' within the meaning of
s. 2(a-1) - Interpretation of Statutes.
H
804
NAHALCHAND LALOOCHAND PVT. l TD. v. PANCHAL! CO805
•
OPERATIVE HOUSING SOCIETY LTD.
s. 2 (a-1) - Stilt parking space/open parking space of A
building - Held: Stilt parking space/open parking space of a
building regulated by MOFA, is a part of 'common areas'- It
may be usable as a parking space but does not tantamount
to a 'garage' within the meaning of s. 2(a-1) rlw condition No.
2 Form V of 1964 Rules, thus not saleable independently as
B
a flat or along with a flat - Maharashtra Ownership Flats
(Regulations of the Promotion of Construction, Etc.) Rules,
1964.
Purpose of Maharashtra Ownership Flats (Regulation of C
the Promotion of Construction, Sale, Management and
Transfer) Act, 1963 - Explained.
Words and Phrases:
'Flat' - Connotation of, in the context of premises.
D
'Garage' - Conntation of.
The appellant, a promoter, developed few properties
and entered into agreements for sale of flats with the flat
purchasers, namely, the members of the respondent coE
operative housing society. The appellant filed a suit for
permanent injunction restraining the respondent society
from encroaching upon, trespassing and/or in any
manner disturbing, obstructing, interfering with its
possession in respect of 25 parking spaces in the stilt
F
portion of the building. The appellant submitted that each
flat purchaser would have a right in respect of the flat
sold to him and to no other portion; and that each flat
purchaser had executed a declaration/undertaking in its
favour to the effect that stilt parking spaces/open parking
G
spaces shown in the plan exclusively belonged to the
promoter and that the declarant would have no objection
to the sale of such spaces by it. The respondent
contended that the promoter had n_o right to sell or
H
806
SUPREME COURT REPORTS
[2010] 10 S.C.R.
A
dispose of spaces in the stilt portion and that the
undertakings given by the flat purchasers were not
binding being contrary to law and based on such
undertakings, the promoter did not acquire any right to
sell stilt parking spaces. The trial court dismissed the suit
B
filed by the promoter. The High Court dismissed the
appeal. Therefore, the promoter filed the instant appeal.
Dismissing the appeal, the Court
HELD: 1.1 The term 'flat' apart from the statutory
C
definition, though has no uniform meaning but in its
natural and ordinary meaning, 'flat' is a self-contained set
of premises structurally divided and separately owned
for dwelling. [Para 23) [829-G]
D
E
F
1.2 The definition of the term 'flat' u/s. 2(a-1) of the
Maharashtra Ownership Flats (Regulation of the
Promotion of Construction, Sale, Management and
Transfer) Act, 1963 (MOFA) means that the set of premises
has to be a separate and self-contained that forms part
of the building which is used or intended to be used for
residence or office, showroom or shop or godown or for
carrying on industry or business. Separateness of one
premises from another premises physically and also in
use or intended use for one of the uses specified in the
definition clause containing the necessary facilities for
self-contained accommodation is sine qua non for a unit
being covered by the definition of 'flat' occurring in
Section 2(a-1) which includes an 'apartment'. It must be
a separate unit conforming to the description capable of
being used for one of these purposes-namely, residence,
G office, showroom, shop, godown or for industrial or
business purposes. Alternative uses in Section 2(a-1) do
expand the ordinary meaning of the term 'flat' but
nevertheless such premises that form part of building
H
NAHALCHAND LALOOCHAND PVT. LTD. v. PANCHAL! CO807
OPERATIVE HOUSING SOCIETY LTD.
must be separate and self-contained. A set of premises
A
is called self-contained if it has the following basic
amenities available: (a) sanitary; (b) washing, bathing and
(c) other conveniences (cooking etc.) for the use of its
occupant/s although as provided in the exp.lanation
appended to section 2(a-1) such provision may be
B
common to two or more sets of premises. The nature of
construction and user are important features of the
definition clause. [Para 28] [830-G-H; 831-A-D]
1.3 A unit or accommodation to fit in the definition of
'flat' must meet twin-test namely: (i) self-contained test C
and (ii) user test. The other predominant characteristic is
that it must form part of a building. [Para 28] [831-D]
1.4 On technical linguistic basis, the bracketed
phrase '(and includes a garage)' can only attach to the
D
word preceding it. That may not be happy construction
nor such construction by reading bracketed portion with
the preceding word 'business' appropriately reflects the
meaning of the phrase. The scope of the bracketed
phrase has to be seen in the context of the definition
E
given to the word 'flat' which is true indication of intent
of the legislature. The suggestion that the phrase 'and
· includes a garage' must be read with the 'set of premises'
and not with the user, does not appear to be a correct
reading of the expression and cannot be accepted. The
F
statutory definition of 'flat' must be construed keeping in
view the intent of the legislature and the context of the
statute and, seen thus, the phrase, 'and includes a
garage' in the bracket does not bring in 'garage' by itself
within the meaning of word 'flat'. If stand alone 'garage'
G
(or a garage by itself) were intended by the legislature to
be a 'flat' within the meaning of Section 2(a-1), that could
have been conveniently conveyed by use of the
expression 'or garage' after the word 'business' in the
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808
SUPREME COURT REPORTS
[2010] 10 S.C.R.
A same breath as preceding uses. The bracketed phrase is
rather indicative of the legislative intention to include a
'garage' as appurtenant or attachment to a flat which
satisfies the ingredients of Section 2(a-1 ). It is clear that
stand alone 'garage' or in other words 'garage' as an
B independent unit by itself is not a 'flat' within the meaning
of Section 2(a-1 ). [Para 29) [831-G-H; 832-A-D]
c
Municipal Corporation of Greater Bombay and Ors. v. ·
Indian. Oil Corporation Ltd. 1991 Suppl. (2) SCC 18 -
referred to.
Dr. K.R. Agarwal vs. Balkrishna AIR 1972 Bombay 343
- disapproved.
Murgatroyd v. Tresarden 63 T.L.R. 62; Barnett & Block
0 v. National Parcels Insurance Company Ltd. (1942) 1 All E.R.
221 - referred to.
'Principles of Statutory Interpretation' by Justice G.P.
Singh 12th edition, 2010; 'Construction of Statutes' by Earl T.
Crawford 1989 reprint p 362; Concise Oxford English
E Dictionary 10th edition, revised; Webster Comprehensive
Dictionary, International edition Vol. 1; Stroud's Judicial
Dictionary 5th edition, Vol. 2; Words and Phrases, Permanent
Edition, West Publishing Company, Vol. 17; Advanced Law
Lexicon by P. Ramanatha Aiyar 3rd edition, 2005; Maxwell
F Interpretation of Statutes 12th Edition, pp. 69 to 70 - referred
to.
2.1 The Development Control Regulations for Greater
Bombay, 1991 define two expressions 'garage-private'
G and 'garage-public' in Regulations 2(47) and 2(48)
respectively. The 'garage-private' means a building or a
portion thereof designed and used for the parking of
vehicles an'd 'garage-public' means a building or portion
thereof designed other than as a private garage,
H
NAHALCHAND LALOOCHAND PVT LTD. v. PANCHAL! CO809
OPERATIVE HOUSING SOCIETY LTD.
operated for gain, designed and/or used for repairing,
A
serving, hiring, selling or storing or parking motor-driven
or other vehicles. The word 'garage' occurring in Section
2(a-1) must be given a meaning that general public or for
that matter a flat purchaser of ordinary prudence would
give to that word or understand by that word. [Para 33]
B
Barnett & Block v. National Parcels Insurance Company
Ltd. (1942) 1 All E.R. 221 - referred to.
Concise Oxford English Dictionary 10th edition, revised;
Webster Comprehensive Dictionary, International edition Vol.
C
1; Words and Phrases, Permanent Edition, West Publishing
Company, Vol. 17 - referred to.
2.2 It cannot be said that open parking space is
tantamount to a 'garage' within the meaning of Section
2(a-1) read with condition No. 2 Form V of 1964 Rules. A
person buying a flat for residence or one of the uses
mentioned in Section 2(a-1) will not really think that open
to the sky or open space for parking motor vehicles is a
garage. 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 a garage. What is contemplated by a 'garage'
in Section 2(a-1) is a place having a roof and walls on
three sides. It does not include an unenclosed or
uncovered parking space. In condition No. 2, Form V the
words 'covered/open garage' have been used but the
word 'open' used in the Model Form V cannot override
D
E
F
the true meaning of term 'garage' in Section 2(a-1 ). As a
matter of fact, none of the provisions of MOFA regards
'open garage' connoting 'flat' or an appurtenant/ G
attachment to a flat. Undue importance should not be
given to word 'open' which has loosely been used in
condition No. 2, Form V. The true meaning of the term
'garage' in Section 2(a-1 ), is not affected by a Model Form
V appended to the 1964 Rules. [Para 35]
H
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SUPREME COURT REPORTS
[2010] 10 S.C.R.
A
2.3 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 MOFA, such portion could not be
treated as garage. Even as per the test accepted in
B *Barnett & Block case, a place having roof but offering no
shelter or protection on two sides cannot be a garage.
For the purposes of MOFA, and particularly Section 2(a1 ), the term 'garage' must be considered as would be
understood by a flat purchaser and such person would
c contemplate garage which ha::; a roof and wall on three
sides. [Para 36]
*Barnett & Block v. National Parcels Insurance Company
Ltd. (1942) 1 All E.R. 221 - referred to.
D
3.1 MOFA does not define nor it explains 'common
areas and facilities' though the said phrase is used at
various places in that Act. It is true that interpretation
clause or legislative definition in a particular statute is
meant for the purposes of that statute only and such
E legislative definition should not control other statutes but
the parts of the property stated in clauses (2), (3) and (6)
of Section 3(f) as part of 'common areas and facilities' for
the purposes of MAOA are what is generally understood
by the expression 'common areas and facilities'. This is
F fortified by the fact that the areas which could be termed
as 'common areas' in a building regulated by MOFA are
substantially included in the clauses of Section 3(f) of
MAOA. Looking to the scheme and object of MOFA, and
there being no indication to the contrary, there is no
G justifiable reason to exclude parking areas (open to the
sky or stilted portion) from the purview of 'common areas
and facilities' under MOFA. [Para 37]
3.2 It cannot be said that under MOFA it is for the
NAHALCHAND LALOOCHAND Pvr LTD. v. PANCHAL! CO811
OPERATIVE HOUSING SOCIETY LTD.
promoter to prescribe and define at the outset the
A
'common areas' and unless it is so done by the promoter,
the parking area cannot be termed as part of 'common
areas'. A promoter cannot takeout common passage/
lobbies or stair case or RG area out of purview of
·common areas and facilities' by not prescribing or B
defining the same in the ·common areas'. It is not
necessary that all flat purchasers must actually use
'common areas and facilities' in its entirety. The relevant
test is whether such part of the building is normally in
common use. Open to the sky parking area or stilted c
portion usable as parking space is not 'garage' within the
meaning of Section 2(a-1) and, therefore, not saleable
independently as a flat or along with a flat. As a matter of
fact, the promoter is not put to any prejudice financially
by treating open parking space/stilt parking space as part D
of 'common areas' 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. [Para 38)
3.3 MOFA mandates the promoter to describe
'common areas and facilities' in the advertisement as well
E
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.
F
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.
Even if the two aspects, namely, that the area of stilt G
parking space is not included in the FSI and such area
is not assessable to the Corporation taxes, are excluded;
nevertheless, stilt parking space/open parking space of
a building regulated by MOFA is nothing but a part of
'common areas'. [Para 38)
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SUPREME COURT REPORTS
[2010] 10 S.C.R.
A
4. Since 'Stilt parking space' is not covered by the
term 'garage' much less a 'flat', but is a 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
B purchaser. Such stilt parking space being neither 'flat' u/
s. 2(a-1) nor 'garage' within the meaning of that provision
is not saleable at all. [Para 39)
5.1
MOFA was enacted by the Maharashtra
Legislature as it was found that builders/developers/
C 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. First,
every promoter who constructs or intends to construct
block or building of flats in the area to which MOFA
D 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
E 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
F Registrar for 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
G 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.
H [Para 40]
NAHALCHAND LALOOCHAND PVT LTD. v. PANCHAL! CO813
OPERATIVE HOUSING SOCIETY LTD.
5.2 The submission that there is no provision either
A
express or by necessary implication in MOFA restricting
the sale of stilt or open parking spaces and the promoter
continues to have contractual, legal and fundamenta1
right to dispose of the stilt/open parking space in the
manner in which he proposes and his consumers accept,
B
if accepted, the mischief with which MOFA is obviously
intended to deal with would remain unabated and flat
purchasers would continue to be exploited indirectly by
the promoters. MOFA does restrict the rights of the
promoter in the block or building constructed for flats or c
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
organization. The only right remains with the promoter is
0
to sell unsold flats. It is, thus, clear that the promoter has
no right to sell 'stilt parking spaces' as t.hese are neither
'flat' nor appurtenant or attachment to a 'flat'. Thus, the
finding of the High Court that undertakings are neither
binding on the flat purchasers nor the society also
E
warrants no interference. [Paras 40 and 41]
/CIC/ Bank Ltd. v. S/DCO Leathers Ltd. and Ors. (2006)
10 SCC 452; Kamataka State Financial Corporation v. N.
Narasimahaiah and Ors. (2008) 5 SCC 176; Bhikhubhai
Vith/abhai Patel and Ors. v. State of Gujarat and Anr. (2008)
F
4 sec 144 - referred to.
Case Law Reference:
(1942) 1 All E.R. 221
Referred to.
Para 10, 33,
36
G
1991 Suppl. (2) sec 18
Referred to.
Para 10
63 TLR 62
Referred to.
Para 25
AIR 1972 Bombay 343
Disapproved.
Para 29
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SUPREME COURT REPORTS
[2010] 10 S.C.R.
A
(2006) 1 o sec 452
(2008) s sec 116
(2008) 4 sec 144
Referred to.
Referred to.
Referred to.
Para 40
Para 40
Para 40
B
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
c
2544 of 2010.
From the Judgment & Order dated 25.04.2008 of the High
Court of Judicature at Bombay in First Appeal No. 2182 of
2007.
WITH
C.A. Nos. 2449, 2456, 2545, 2546, 2547, 2548 of 2010.
Pravin K. Samdani, Neeraj Kumar Jain, Tanway Mehta,
D Kush Chaturvedi (for Vikas Mehta), Mahesh Agarwal, E.C.
Agarwala, Rahul Dwarkadas, Gaurav Goel, Neha Aggarwal,
Deepti, Pragya, Gaurav Aggarwal (for Manik Karanjawala),
Umesh Shetty, Nitin Bhardwaj, Pratham Kant, J.N. Solanki,
Umang Shankar, Buddy A. Raganadhan, A.V. Rangam,
E Praveen Chaturvedi, Aparna Jha for the appearing parties.
The Judgment of the Court was delivered by
R.M. LODHA, J. 1. Of these seven appeals which arise
from the judgment dated April 25, 2008 passed by the High
F Court of Judicature at Bombay (Appellate Jurisdiction), five are
at the instance of the original plaintiff and the other two are by
the parties, who were not parties to the proceedings before the
High Court or the trial court but they are aggrieved by the
findings recorded by the High Court as they claim that these
G findings are affecting their rights.
The facts:
2. Few important questions of law arise in this group of
H appeals. It will be convenient to formulate the questions after
NAHALCHAND LALOOCHAND PVT. LTD. v. PANCHAL! CO815
OPERATIVE HOUSING SOCIETY LTD. [R.M. LODHA, J.]
we set out the material facts and the contentions of the parties.
The narration of brief facts from S.C. Suit No. 1767 of 2004
wil! suffice for consideration of these appeals. Nahalchand
Laloochand Private Limited is a Private Limited Company. As
A
B
a promoter, it developd few properties in Anand Nagar, Dahisar
(East), Mumbai and entered into agreements for sale of flats
with flat purchasers. The flat purchasers are members of
Panchali Co-operative Housing Society Ltd. (for short, 'the
Society'). The promoter filed a suit before the Bombay City Civil
Court, Bombay for permanent injunction restraining the Society
(defendant) from encroaching upon, trespassing and/or in any c
manner disturbing, obstructing, interfering with its possession
in respect of 25 parking spaces in the stilt portion of the
building. The promoter set up the case in the plaint that under
the agreements for sale it has sold flats in its building and each
flat purchaser has right in respect of the flat sold to him and to
D
no other portion. It was averred in the plaint that each flat
purchaser has executed a declaration/undertaking in its favour
to the effect that stilt parking spaces/open parking spaces
shown in the plari exclusively belong to the promoter and that
the declarant has no objection to the sale of such spaces by it.
The defendant (Society) traversed the claim and set up the plea
that the promoter has no right to sell or dispose of spaces in
the stilt portion and that the undertakings given by the flat
purchasers are not binding being contrary to law and based on
such undertakings, the promoter has not acquired any right to
sell stilt parking spaces.
3. The parties let in evidence (oral as well as documentary)
in support of their respective case.
4. On April 4, 2007, the Presiding Judge, City Civil Court,
Greater Bombay dismissed the suit with costs.
5. The promoter preferred first appeal before the High
Court which was dismissed on April 25, 2008.
EF
G
6. For brevity, we shall describe Maharashtra Ownership
H
816
SUPREME COURT REPORTS
[2010] 10 S.C.R.
A
Flats (Regulation of the Promotion of Construction, Sale,
Management and Transfer) Act, 1963 as 'MOFA', Maharashtra
Ownership Flats (Regulations of the Promotion of Construction,
Etc.) Rules, 1964 as '1964 Rules', Development Control
Regulations for Greater Bombay, 1991 as 'OCR', Maharashtra
B Apartment Ownership Act, 1970 as 'MAOA', The Maharashtra
Regional and Town Planning Act, 1966 as 'MRTP Act' and
Transfer of Property Act as 'T.P. Act'.
The summary of findings recording by the High Court:
C
7. While dismissing the appeal, the High Court recorded
D
E
F
G
H
the following findings :
1
The carpet area of any of the 56 flats/
tenements in Panchali building is not less
than 35 sq. mtrs.
2
The parking space either enclosed or
3
4
5
6
· unenclosed, covered or open cannot be a
'building'.
It is compulsory requirement to provide for
parking spaces under OCR.
It is obligatory on the part of the promoter to
follow the OCR. 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 MOFA between the promoter and
the flat purchasers cannot be diluted by any
NAHALCHAND LALOOCHAND PVT. LTD. v. PANCHALI CO817
OPERATIVE HOUSING SOCIETY LTD. [R.M. LODHA, J.]
contract or an undertaking to the contrary. The
A
undertakings contrary to OCR will not be
binding either on the flat purchasers or the
Society.
7
The stilt parking space is a common parking
B
area available and the developer is obliged
to provide the same under the OCR 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 c
any outsider. It is part and parcel of the
Society building and it cannot be a separate ·
premises available for sale. As soon as the
Corporation issues the occupation certificate
and the Society is registered, the building as
0
well as the stilt parking spaces, open spates
and all common amenities become the
property of the Society.
8
The stilt parking spaces cannot be put on
sale by the developer as he ceases to have
E
any title on the same as soon as the
occupation C' ·tificate is issued by the
Corporation and it becomes the property of
the society on its registration.
9
The stilt parking spaces cannot be termed as
F
'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.
G
10
It is immaterial if the purchase agreement
does not include stilt car parking spaces in
the common area of amenities. The stilt car
parking spaces is part of the common
amenities and it cannot be treated to be a
H
A
B
c
818
SUPREME COURT REPORTS
[2010] 10 S.C.R.
separate premises/garage which could be
sold by the developer to any of the members
of the society or an outsider.
11
Under MOFA, the developer's right is
restricted to the extent of disposal of flats,
shops and/or garages, which means that any
premises which is included in the Flat Space
Index (FSI) can be sold by the developer/
promoter. The stilt parking space is not
included in the FSI nor it is assessable for
the Corporation taxes.
The submissions:
8. Mr. Tanmaya Mehta, learned counsel appearing for the
D promoter-Nahalchand Lal.oochand Private Limited (appellant)
contended that: the stilt parking space being 'garage', as an
independent unit is covered by the definition of 'flat' in Section
2(a-1) of MOFA; Section 2(a-1) creates an artificial definition
of 'flat' and since in common parlance a garage would not be
E considered as a flat, the legislature clarified and explained that
the term 'flat' means ...... and 'includes a garage'; as long as
premises are covered from the roof or which have a covered
roof and used for the parking of vehicles, that would qualify as
'garage' and since stilt parking spaces are covered parking
spaces and form part of the building, they fall within the
F definition of a 'garage'; even if stilt parking spaces do not fall
within the definition of 'flat', they are nevertheless sellable as
independent units since right to sell such spaces flows from the
bundle of rights associated with ownership of the property and
Sections 10 and 11 of MOFA read with Rule 9 of 1964 Rules
G are not exhaustive of the rights retained by the promoter upon
execution of conveyance. Moreover, if stilt parking spaces are
treated a..; 'common areas' then the proportionate price for the
same would have to be paid by each flat purchaser, irrespective
of whether he requires the parking space or not and there may
H be situations where the number of parking spaces will not be
NAHALCHAND LALOOCHAND PVT LTD. v. PANCHAL! CO819
OPERATIVE HOUSING SOCIETY LTD. [R.M. LODHA, J.]
equal to the number of flats and, thus, a person who has paid
A
proportionate price for the common parking space may find
himself without parking space, even though he has paid for the
same. Lastly, the learned counsel submitted that in any event
the promoter undertakes that the parking spaces shall be sold
only to persons purchasing flats within tqe subject layout, i.e.
B
the purchasers of flats in the seven buildings which form part
of the layout and exist in close proximity.
9. Mr. Pravin K. Samdani, learned senior counsel for one
of the appellants viz., Maharashtra Chamber of Housing Industry
C
adopted a little different line of argument. He contended that
the provisions of MOFA permit a promoter to sell garage/open/
covered car parking space along with the flat. His submission
is that MOFA does not define the word 'garage' and that word
has to be understood and interpreted in accordance with the
plain grammatical meaning and not with reference to OCR
D
which have been framed under MRTP Act having different
legislative object. As to whether the stilt parking spaces are
'common areas', Mr. Pravin K. Samdani would submit that
MOFA does not list out the 'common areas' and 'limited
common areas' while MAOA does define these terms and
E
parking spaces thereunder are 'common areas and facilities'
unless otherwise provided in thr '.leclaration by the owner of
the property. Under MOFA, it is for the promoter and under
MAOA, the declarant has to prescribe at the outset the
'common areas' and 'limited common areas'. He referred to
F
Sections 3(2)(h), 4(1 )(a)(v), 10 and 11 of the MOFA and
submitted that the promoter must at the outset indicate the
nature of organization (condominium or society or company)
that would be formed at the time of sale of flats and on formation
of such organization, the promoter joins such organization with
G
a right and power to dispose of remaining flats that would
include the remaining unsold open/covered parking space/
garage and the organization is transferred unsold open/
covered parking spaces only if all the flats have been sold by
the promoter. Learned senior counsel would submit that it is
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820
SUPREME COURT REPORTS
(2010] 10 S.C.R.
A wholly irrelevant whether stilt/podium/basement/covered car
park attracts FSI or not but the only relevant criterion is whether
the promoter has listed it as a part of common area or not and
if he has not done so then it is sellable. If he has listed it, then
every flat purchaser is proportionately required to contribute for
B the same.
10. In the appeal filed by one Chirag M. Vora, Mr. Sunil
Gupta, learned senior counsel appeared. He argued that MOFA
was enacted and enforced in the year 1963 as a regulatory
piece of legislation and barring the few aspects in respect of
C which MOFA makes specific inroads into the rights of the
promqter in the matter qf construction, sale, management and
transfer of flats, all other aspects of the right of the promoter
who enters into contract with the flat purchaser remain
unaffected and undisturb(;ld. His submission is that MOFA gives
D a wide meaning to the word 'flat' so that buildings of all
permutations and combinations may be covered within the
scope of that Act and keeping in mind both the plain language
of Section 2(a-1) as well as the object of that Act, widest
meaning to the word 'flat' deserves to be given so that the plain
E language is satisfied and also the object of the Act is better
subserved. He adopted the line of interpretation put forth by Mr.
Tanmaya Mehta that 'garage' includes covered parking spaces
and even open parking spaces and is a 'flat' in itself under
Section 2(a-1). Relying upon Barnett & Block v. National
F Parcels Insurance Company Ltd. 1, learned senior counsel
submitted that the minimum requirement of garage is that there
should be roof (even if there are no walls) and for the purpose
of MOFA, not only a covered parking space like a stilt parking
space but also an open parking space is tantamount to
G 'garage'. According to learned senior counsel the word
'garage' is not to be. read simply as another kind of user as
contra.>ted with residence, office, showroom or shop or godown
or industry or business rather it has to be read in contrast and
juxtaposed against the expression 'set of premises'; it is the
H
1.
[1942) 1 All E.R. 221.
NAHALCHAND LALOOCHAND PVf. LTD. v. PANCHAL! CO821
OPERATIVE HOUSING SOCIETY LTD. [R.M. LODHA, J.]
alternative to the 'set of premises' and not merely to the different
A
users of the set of premises mentioned in Section 2 (a-1).
Mr. Sunil Gupta, learned senior counsel would submit that each
stilt parking space as well as each open parking space is a
'flat' in itself de hors the other accommodations amounting to
'flat' under Section 2(a-1) of MOFA. In support of his argument,
he relied upon a decision of this Court in the case of Municipal
Corporation of Greater Bombay & Ors. v. Indian Oil
Corporation Ltd. 2. In the alternative, he submitted that if the stilt
parking space or open parking space is not held to be a 'flat'
under Section 2 (a-1), still that space/area cannot be treated
B
c
as part of 'common areas and facilities'. Firstly, he submitted
that common areas and facilities do not include garage/parking
spaces and such parking spaces remain ungoverned by MOFA.
Sections 3 and 4 of MOFA concern with matters pertaining to
'common areas and facilities' but MOFA does not define the
D
meaning of 'common areas and facilities'. Section 3(2)(m)(iii)
leaves it to the promoter to disclose to his flat purchaser the
nature, extent and description of the common areas and
facilities. Section 4, by mentioning a prescribed form of
agreement, rather opened the possibilities for the promoter to
continue to exercise his traditional and pre-Act right to dispose
E
of such parking spaces according to his choice. The stilt/
covered/open parking spaces do not figure as part of the
common areas and facilities in any project and remain within
the contractual, legal and fundamental rights of the promoter to
dispose of the same in the manner in which he proposes and
. his customers accept. Section 16 of MOFA does not override
this right of a promoter. Secondly, learned senior counsel would
submit that the provisions of MOFA must not be made to
depend on the provisions of some other enactment just because
F
the subject matter of the two legislations appears to be the
G
same. In this regard, he referred to Maxwell Interpretation of
Statutes, 12th Edition, pages 69 to 70 and G.P. Singh on
Principles of Statutory Interpretations, 8th edition, pages 150
2.
(1991] Suppl. (2) sec 18.
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822
SUPREME COURT REPORTS
[2010] 10 S.C.R.
A to 160. He, thus, submitted that for the purposes of
understanding the meaning of 'flat' under Section 2(a-1) of
MOFA, the provisions of MAOA may be looked at but there
would be no justification in understanding the expression, 'flat'
defined in MOFA with reference to MRTP Act, OCR, rules
s related to FSI and the provisions concerning property tax in the
Bombay Municipal Corporation Act.
11. On the other hand, Mr. Neeraj Kumar Jain, learned
senior counsel and Mr. Umesh Shetty, learned counsel for the
C Societies stoutly supported the view of the High Court.
The issues:
12. In view of the contentions outlined above, the questions
that arise for consideration are : (i) whether stand alone 'garage'
0
or in other words 'garage' as an independent unit by itself is a
'flat' within the meaning of 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
E
space in such building is part of 'common areas and facilities'
and (iv) what are the rights of the promoter vis-a-vis society (of
flat purchasers) in respect of open parking space/s I stilt parking
space/s.
13. All these questions have to be considered in the light
F
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.
G
H
Relevant provisions of MOFA:
14. The definition of 'flat' in Section 2(a-1) is most vital and
during course of arguments it has been rightly said that meaning
of the word 'flat' is the actual fulcrum of MOFA. Section 2(a-1)
reads thus:
"S.2(a-1).- "Flat" means a separate and self-contained set
NAHALCHAND LALOOCHAND PVf. LTD. v. PANCHAL! CO823
OPERATIVE HOUSING SOCIETY LTD. [R.M. LODHA, J.]
of premises used or intended to be used for residence,
or office, show-room or shop or godown or for carrying on
any in-dustry or business (and includes a garage}, the
premises forming part of a building and includes an
apartment.
Exp/anation.-Notwithstanding that provision is made for
sanitary, washing, bathing or other conveniences as
common to two or more sets of premises, the premises
shall be deemed to be separate and self-contained."
15. 'Promoter' is defined in Section 2(c) as under :
A
8
c
"S.2(c).- 'Promoter' means a person and includes a
partnership firm or a body or association of persons,
whether registered or not who constructs or causes to be
constructed a block or building of flats, or apartments for
0
the purpose of selling some or all of them to other persons,
or to a company, co-operative society or other association
of persons, and includes his assi9nees; and where the
person who builds and the person who sells are different
persons, the term includes both;"
16. The general liabilities of the promoter are set out in
Section 3. To the extent it is relevant to the present case it
reads thus:
E
"S.3.- (1) Notwithstanding anything in any other law, a
F
promoter who intends to construct or constructs a block or
building of flats, all or some of which are to be taken or
are taken on ownership basis, shall in all transactions with
persons intending to take or taking one or more of such
flats, be liable to give or produce, or cause to be given or
G
produced, the information and the documents hereinafter
in this section mentioned.
(2)
A promoter, who constructs or intends to construct
such block or building of flats, shallH
A
B
c
824
SUPREME COURT REPORTS
[2010] 10 S.C.R.
(a) make full and true disclosure of the nature of his
title to the land on which the flats are constructed, or are
to be constructed; such title to the land as aforesaid having
been duly certified by an Attorney-at-law, or by an
Advocate of not less than three years standing, and having
been duly entered in the Property card or extract of Village
Forms VI or VII and XII or any other relevant revenue record;
(b) make full and true disclosure of all encumbrances
on such land, including any right, title, interest or claim of
any party in or over such land;
(c) to (h)
(i) not allow persons to enter into possession until a
completion certificate where such certificate is required to
0
be given under any law, is duly given by the local authority
(and no person shall take possession of a flat until such
completion certificate has been duly given by the .local
authority);
E
F
G
H
(j) to (I)
(m) when the flats are advertised for sale, disclose
inter alia in the advertisement the following particulars,
namely:-
(i) the extent of the carpet area of the flat including
the area of the balconies which should be shown
separately;
(ii) 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; and the intervals at which the
instalments thereof may be paid;
(iii) the nature, extent and description of the
common areas and facilities;
NAHALCHAND LALOOCHAND PVT. LTD. v. PANCHAL! CO825
OPERATIVE HOUSING SOCIETY LTD. [R.M. LODHA, J.]
(iv) the nature, extent and description of limited
A
common areas and facilities, if any.
(n) sell flat on the basis of the carpet area only:
Provided that, the promoter may separately
charge for the common areas and facilities in
proportion 'to the carpet area of the flat'.
Explanation.-For the purposes of this clause, the
carpet area of the flat shall include the area of the
balcony of such flat."
17. Section 4 of MOFA mandates that promoter before
accepting advance payment or deposit shall enter into an
agreement with the prospective flat purchaser and such
agreement shall be registered.