Hc & sc judgments aoa with index v1.7

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APARTMENT OWNERS ACT SEE INDEX AT END
HC & SC Judgments AOA with INDEX V1.7 ©2013 Sarvadaman Oberoi
Bombay High Court
Rajendralal Shadilal And Co. Pvt. ... vs The State Of
Maharashtra And Anr. on 29 August, 1979
Equivalent citations: AIR 1980 Bom 261
Bench: V D Andlentin, J Deshpande
JUDGMENT
Deshpande, J.
1. This petition under Arts. 226 and 227 of the Constitution of
India is directed against an order of requisition dated 20th
May, 1976 passed under Bombay Land Requisition Act, 1948
(hereinafter referred to as the Act), The petitioner is a limited
concern registered under the Companies Act. Constructing
building and selling the flats therein is its business. For this
purpose, the Company purchase plots, raise construction
thereon consisting of several flats, and then sell the same to
the needy purchasers for profit and then get a society of such
purchasers formed under the Cooperative Societies Act of
1960 as required under the Maharashtra Ownership Flats
(Regulation of the Promotion of Construction, Sale,
Management and Transfer) Act, 1963 (hereinafter referred to
as the Ownership Flats Act), in whose favour the Company
executes the conveyance. The petitioner purchased a plot No.
B/359 at Mount Pleasant Road and constructed a building
thereon known as Rajat Apartments consisting of ground floor
and six upper floors up to 43' from the Bench mark,

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comprising of 56 flats and 44 garages. A Co-operative Society
of the purchasers of the flats was formed on 5th Feb., 1968
petitioners themselves having become member in respect of
the unsold flats in terms of Section 10 of the Ownership Flats
Act. On 13th June, 1969, the petitioners executed a
conveyance in favour of the said society named as 'Rajat
Apartments Co-operative Housing Society' Under the terms of
the said conveyance deed, the petitioners reserved rights to
raise two more floors, sell the flats therein for their benefit on
condition of the said purchasers of the flats, agreeing to
become members of the said society according to their bye-
laws. The two floors were accordingly constructed by 1972
after the settlement of the dispute with a neighbouring society
under a consent decree in Suit No. 58 of 1965 on the Original
Side of this Court. All the flats excepting No. 82 on the 8th
floor are now sold. Though the occupation certificate was
obtained during the process of construction itself by 13-10-
1970, the completion certificate was not obtained till 19th
Apr., 1977 long after this writ petition was filed. According to
the petitioners, flat No. 82 remained unsold due to their certain
dispute with the society.
2. In response to the representations, the Government decided
in 1957 not to exercise its power of requisition of residential
quarters under the Act and made a statement to that effect on
the floor of the Assembly. The Government, was, however,

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driven to withdraw the said commitment in 1975 and gave
wide publicity to the same in the Newspapers. As flat No. 82
had remained unsold even by that time, and not occupied by
any one, an intimation of vacancy was lodged by the
petitioners on 25th July, 1975 under Section 6 (2) of the Act
under the,, impression of its applicability to the same. The
Controller of Accommodation in reply called for certain
details on 20th Apr., 1976 which were given immediately. The
Respondent No. 3, however, passed the impugned order on
10th May, 1976, under Section 5 of the Act requisitioning the
said flat. The validity of this requisition is challenged in this
petition.
3. The respondents have filed two affidavits. It is unnecessary
to refer to the same as the facts, relevant to the disposal of the
points raised before us, are not in dispute.
4. Mr. R.C. Dalai, the learned Advocate for the Appellant
challenges the validity of the order on the ground of want of
notice and an opportunity, to show cause against the proposed
requisition before the order was passed. It is not in dispute
that, beyond asking details under its letter dated 20-4-1976 as
to the name of the Society, the date of its registration and the
name of the person in possession of the flat, the petitioner was
never informed of the proposal as to requisition, nor was he
ever called upon to show cause against the proposed
requisition. Mr. Gumaste, the Learned Advocate appearing for

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the Respondents, relied in defence, entirely on the absence of
any provisions in the Act or the Rules, making it obligatory to
give such notice or hearing. This defence is wholly untenable
in the circumstances of this case. The order, has the effect, of
depriving petitioner of the possession of the flat, as also
affects adversely its saleability in the market for which it was
avowedly constructed, as part of their business activities as
averred in the petition and not disputed by the Respondents. It
is difficult to conceive of any purchaser of such a flat once it is
found to be under requisition and occupied by the allottee
thereof. The impugned order directly affects petitioner's
fundamental rights to hold property and carry on business,
guaranteed under Article 19(1) (f) and (g) of the Constitution.
5. Secondly, the power of requisition under the Act is
conditional, on (a) continued non-residence in the building by
the owner or his tenant for six months under the proviso to
Section 5 (1), if Section 5 is invoked and (b) existence of
vacancy under Section 6 (1) of the Act if Section 6 is invoked.
Section 5 (2) and Section 6 (4) require the authority concerned
to hold "enquiry" and make a "declaration" as to the existence
of the said situations. Even in the absence of any provision for
notice and hearing, the principles of natural justice require that
persons liable to be so adversely affected, should be given an
opportunity to have their say before any action is actually
taken. This is what the Supreme Court has held in the case of

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Madan Gopal Agarwal vs District Magistrate, Allahabad AIR
1972 SC 2656. Failure of the respondent to afford such
Opportunity is fatal indeed.
6. It is true, compliance with principles of natural justice is not
a question of mere formality and when no rules to that effect
exist and no particular form is prescribed, substantial
compliance therewith, may satisfy the requirements. Mr.
Gumaste relied on the two letters of the petitioners and one
from the respondents, adverted to earlier, to show how the
petitioners did have an opportunity to have their say. This
contention is devoid of any merit The intimation of vacancy
itself was given by the petitioners on 28-7-1975 under the
wrong impression as to the application of Section 6 of the Act,
though the flat was neither "let nor intended to be let" in terms
thereof, but was intended for sale. The query from the
Government in its letter dated 20-4-1976 was based on the
same impression. That the impugned order is passed under
Section 5 demonstrates how the correspondence proceeded on
the wrong premises. Far from complying with the principles of
natural justice, the correspondence does not serve any purpose
whatsoever. The respondent did not care to contact the
petitioner and hear then say even for the purpose of "enquiry"
required to be made by it under Section 5 (2) to ascertain if it
was a case of continuous non-residence for six months as
contemplated under the proviso to Section 5 (1). It is difficult

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to appreciate how any such enquiry could be said to be
complete and effective without any attempt even to contact the
petitioners at-least for ascertaining the facts, if not for hearing
objections. The impugned order, in our opinion, is liable to be
struck down on this ground itself.
7. It is true that the declaration under Section 5 (2) of the Act
is indicated to be conclusive. This, however, does not make it
immune from interference of this Court, in exercise of its
powers under Article 226 of the Constitution. Judgment of the
Supreme Court in the case of Lila Vati Bai v. State of
Bombay, AIR 1957 SC 521, is directly in point. Apart from
the same having been made without any opportunity to the
petitioners to have their say, recitals in the order demonstrate
how the declaration is based entirely on unfounded
assumptions. On the facts averred in the petition and not
disputed by the respondents it shall have to be held that the
building was constructed by the petitioners, as part of their
business activities, to sell the flats therein and earn profit. The
building now belongs to Co-operative Housing Society though
the flat in dispute is at the disposal of the petitioner for sale,
under the terms of conveyance between them and the Society.
The purchaser member and not the petitioner is "entitled" to
reside in the flat under the bye-laws of the society. The
contrary recitals in the first two paras of the impugned order

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therefore, are not factually correct and only show how the
order is based on unfounded and misconceived assumption.
8. Mr. Dalai then contends that flats held by the builders like
the petitioners in Housing Co-operative Society formed in
compliance with the Ownership Flats Act in the process of
construction and sale continue to be exempted from
requisition under the proviso to Sub-section (1) of Section 5 of
the Act and question of their ceasing to be so exempted on
account of the non-residence cannot arise till the same is sold,
and the purchaser, for whose residence it is constructed, fails
to reside therein of his volition. The contention appears to us
to have been well founded.
9. Section 5 (1) reads as follows :
"If in the opinion of the (State) Government it is necessary or
expedient so to do, the (State) Government may by order in
writing requisition any land for (any public purpose);"
The proviso thereto reads as follows :
"Provided that, no building or part thereof wherein the owner,
the landlord or the tenant, as the case may be, has actually
resided for a continuous period of six months immediately
preceding the date of the order shall be requisitioned under
this Section."
Sub-section (1) enables the Government to requisition any
land. The building is only one specie of the wider concept of
the land, under its definition in Section 4 (1). Exemption from

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requisition under the proviso is confined to the buildings used
for residence and is conditional on their being used for such
actual residence. It is the actual non-residence therein
continuously for six months, that excludes it from exemption
and exposes it to the liability of requisition.
10. It is, however, necessary to note that what exempts the
building from requisition is the continued residence of the
owner, landlord or the tenant. This proviso and another
substantive provision of Section 6; of the Act, contemplating
requisition of building 'let or intended to be let" only if and
when Vacancy"" therein occurs, appears to have been based
on the legislative recognition of the actual occupants greater
need of the building, than that of those houseless persons for
whom requisition powers are sought to be invoked. In other
words, possession of the actually needy occupants is not
intended to be disturbed presumably on the hypothesis, that
dishousing the one set of needy resident occupants, for
housing another set of the needy claimants would not serve
any purpose. The words of the proviso "as the case may be"
appear to have been intended to emphasis how, such actual
occupants subsequent non-residence, and not that of anybody
else, is relevant, for the proviso.
11. But, this necessarily assumes that the building is ready, fit,
and available for such residence on the date from which the
period of six months fatal non-residence is to be calculated.

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Building under construction, (or reconstruction, or overall
repair) cannot be said to be so fit, habitable or capable of
being occupied for actual residence notwithstanding there
being the "building" none the less. Building can remain so
under construction, and, so inhabitable, for more than six
months for variety of reasons. This process of construction
may thus result in the involuntary non-user and non-residence
of the owner or his tenant, for whose residence it is
constructed, for a fairly long time. The question is: can such
involuntary and forced non-residence result in the
inapplication of the proviso and the exemption engrafted
'therein? According to Mr. Dalai, it does not, because non-
residence is involuntary and inevitable; such process of
construction at the hands of the builders like the petitioners
can take longer time, continuing as it does not only till actual
construction is complete, but also till the flats in the building
are sold to the purchasers for residence of whom the same are
constructed.
12. Mr. Gumaste on the other hand contends that when
exemption under proviso is confined to the building actually
under residential occupation, it cannot be extended to the
building under construction hot so occupied. Now, it must be
conceded that, the wording of the proviso does not give any
express indication on this point, for want of clear wording.
There are, however, two factors which militate against

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excluding the residential building under construction from the
exemption even when unoccupied. Firstly, where the building
under construction is unfit for the residence of the owner or
his tenant, the same must be deemed to be equally unfit for the
residence of any one else for whose benefit the same is
intended to be requisitioned, and no public purpose can be
served by the requisition of such unfinished and defective
building. Existence of public purpose is the condition
precedent for acquisition of any land or building under Section
5 (1) of the Act. Such defective buildings thus not being liable
to requisition, their exemption is implicit and express
indication in the proviso was unnecessary.
13. Secondly, obvious incapability, of any building under
construction being used for residence by itself, was enough to
warrant omission of any reference in the proviso to the effect
of such non-residence therein, by anyone. The negative
language of this proviso against this background, suggests
legislative intent to prevent requisition of the residential
building, or any part thereof, such as the flat, as long as owner,
or his tenant, for whose residence the same is constructed,
continuously resided, therein after such construction, and such
residence continued for six months before the proposed order.
The question of calculating the period of six months of non-
residence, is not contemplated to arise until the construction is
completed. Period consumed by the process of construction is

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liable to be excluded from consideration under the wording of
this proviso for the above obvious reasons. It would indeed be
odd if the proviso were to exclude the building under
construction from exemption, when the same was being
constructed for the residence of those whose residence is
intended to be protected by exemption thereunder.
14. The proviso requires calculating the six months period of
non-residence-, backwards from the date of the proposed
order. The question of fixing starting point of such non-
residence is equally important. Fixation of the starting of this
six months period is respect of any building once occupied,
and left thereafter, may not present any difficulty. Six months
period would begin from the date of such vacating of the
building. In places, afflicted by the scarcity of the
accommodation, tendency of the needy is to occupy the
quarters even before the construction is completed. The date
of the first occupation for actual residence in a newly
constructed building may not thus ordinarily present any
difficulty. Contemplated enquiry under Section 5 (2) to
ascertain the period of non-residence is adequate safeguard
against the possible abuses or deliberately postponing actual
occupation. In all such cases, the authority concerned baa still
to find in the course of "enquiry" when the owner or his tenant
could have started his residence after the building is

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completed, to determine his fatal period of non-residence of
six months.
15. Such fixation of starting point is exposed to a few
uncertain factors when, rather than carry on construction on
one's own supervision the same is entrusted to any
professional building contractor or is undertaken by the
builders themselves on their own initiative, as in the present
case, by investing their own monies in purchasing plots,
raising buildings, of flats, and garages thereon, for sale on
profit, as part of their business activity. The process of sale by
them to the purchaser for whose residence it is constructed,
also becomes the integral part of the process of construction in
such cases. Readiness and availability of any building for
residence has to be determined by reference to the person for
whose residence it is constructed, without regard to whether
building is constructed by the owner under his supervision, or
got constructed through a building contractor or is constructed
for his benefit by the builders on their own initiative as part of
their business. This entire period consumed in this process of
construction and sale, resulting in the involuntary non-
residence of the person concerned i.e. the owner or his tenant
for whom it is undertaken, shall have to be excluded while
determining such starting point of fatal non-residence. Where
construction is undertaken by the builders on their initiative
and with their own money, the period of six months shall

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necessarily have to be calculated from the date of delivery of
possession to the purchaser on which date the flat or building
can be deemed to have been ready, fit and available for his
residence therein. The Government or the officer authorised to
requisition and make enquiries, can ill afford to lose sight of
these exigencies inherent in the process of construction and
availability of the flat to the owner or the tenant for whose
actual residence the construction is raised.
16. The building in "dispute is sold by the builder to the
Housing Co-operative Society in 1969 before the construction
of the 7th or the 8th floor. Under the sale deed, the petitioners
reserved their right to raise two more stories and sell the flats
therein for their benefit on the condition of such purchasers
agreeing to join the Society as its members. The two stories
and the flat in dispute appear to have been constructed by
1972. The flat is claimed to have remained unoccupied. None
has resided therein for years. The flat is still unsold. This delay
is apparently abnormal. But, petitioners attribute this to their
bona fide dispute with the society. This claim is supported by
the extracts of minutes of the Society's annual meetings from
year to year and is not disputed by the respondent. Mr.
Gumaste contends at the Bar that, the builder has not sold it
deliberately in an anxiety to fetch still higher price, is not
borne out by any material and appears to be highly improbable
and far-fetched. Though the right to sell the flat vests in the

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builders under the sale deed with the Society, they do not
claim any right to reside, it having been constructed for the
purchasers. It may not even be suitable for their residence. As
discussed earlier, non-residence by the builder thus is not
relevant for the proviso. As the situation stands today, none
can be said "not to have resided therein continuously for six
months" to exclude the application of the proviso and the
exemption thereof. Mr. Dalai, therefore, appears to us to be
right in contending that the question of calculating the period
of six months non-residence in a flat constructed by a builder
cannot arise till he finds his purchaser, and consequential
inapplication of exemption does not arise, in the present case.
17. Our above interpretation of Section 5 (1), however,
extends the period of exemption in respect of flats constructed
by the builders on their own initiative, even after the
completion of the construction and make them immune from
requisition till the same are sold to the purchasers for
residence. Requisition power will not be exercisable in respect
thereof in spite of the urgency of the public purpose and the
flats remaining vacant without any actual residence. Fault, in
our opinion, is not with OUT interpretation but with the text of
the proviso itself. Construction of building containing flats and
garages, by the builders with their own capital is a recent
innovation in the construction activities and peculiar problems
raised by the processes involved may not have been present to

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the mind of the legislature when the Act was passed in 1948.
Surprisingly enough, notwithstanding the builders being
statutorily required under the Ownership Flats Act of 1963, to
get a Co-operative Society (or a Limited Company) formed of
the purchasers of the flats, the Co-operative Societies Act of
1960, the rules or the model bye-laws thereunder are not
suitably amended to accord with the requirements of the said
Ownership Flats Act. Thus the definition of a "member" under
Section 2 (19) of the Co-operative Societies Act, does not deal
in any of its Clauses (a) to (d) with the statutory membership
of the builder, nor does Rule 10 (5) expressly cover the
category of society contemplated by the Ownership Flats Act,
nor the model bye-laws, take notice of the fact that the
Housing Society formed in terms of the Ownership Flats Act
consists of members who purchase the flats before becoming
its member, and does not contemplate allotment of flats to
them afresh. It is indeed time that the authorities pay attention
to these anomalies.
18. However, the question whether the Act can be validly
amended to authorise requisition of the unsold flats, held by
the builders like the petitioners for sale, requires close
scrutiny. Any such provision is likely to have adverse effect
on the business activity of such builders and their contention
of Section 5 (1) in that event, being unreasonably restrictive
and as such violative of their fundamental rights under Article

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19(1)(f)(g) of the Constitution cannot be dismissed as being
wholly without substance. No purchaser would purchase flats
under requisition, and the capital of the builders involved
therein would get locked for uncertain period during
requisition. It may also affect the functioning of the co-
operative society or the company, formation of which in terms
of the Ownership Flats Act is so obligatory. Any proposal for
amendment must take notice of this as also the inevitable time
required for finding purchasers, and settlement of bona fide
disputes that may inevitably crop up in this contemplated
process. Suffice it to note at this stage that the exemption from
requisition engrafted in the proviso to Section 5 (1) does not
cease to operate in respect of any flat, in a newly constructed
building governed by the Ownership Flats Act till the process
of construction including the one of sale to the purchaser for
his residence is complete.
19. Mr. Gumaste drew our attention to the Rules "The
Bombay Land Requisition (Exemption) Rules, 1948" framed
by the Government in exercise of its powers under Clause (iv)
of Sub-section (2) of Section 19 of the Act. "Buildings owned
by a Housing Cooperative Society or the members thereof,
under the bye laws of the society" are exempted under Rule 4
from requisition contemplated under Section 5 or 6 of the Act,
under item at serial No. (1) Col. (1) of the Schedule attached
to the rules.. The terms and conditions of such exemption are

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enumerated in column No. 3 of the Schedule. Mr. Gumaste
contends that any such exemption presupposes application of
the Act to the buildings owned by the society or to the flats
owned by its members and their exclusion from the exemption
under the proviso to Section 5 (1) of the Act, This was relied
on by Mr. Gumaste to reinforce his contention against our
above interpretation of the proviso, under which exemption
thereunder continues to apply to the unsold flats in a society
formed in compliance with the Ownership Flats Act. The
contention is equally plausible. It is plain that no question of
exemption under Rule can arise if any Housing Society
building or flat therein is exempt under the proviso to Section
5 (1) itself.
20- Now, as a result of the conveyance of 1969, the title of the
entire building including that of 7th or 8th floor constructed
subsequently by the builders in terms of covenant therein,
stand vested in the society. Even so, such title and ownership
of the society cannot be said to be exclusive in that the right of
sale, of the flats therein including that of flat No. 82 in dispute,
under the terms of the same conveyance still stands vested in
the builder and is liable to be transferred to the purchaser after
its purchase by him subject to his becoming a member of the
society. Thus exemption intended for the building of the
Housing Society under first part of the column 1 may not
cover a building subject to such dual ownership of the member

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and the society, and must be limited to the instances when
building or a portion thereof exclusively belongs to the
society.
21. It is however the second part of this exemption clause in
this column that will be attracted where part of it, such as a
flat is held by a member. Terms and conditions for the
contemplated exemption are also to be complied with by the
members and not by the society. Exemption is made
conditional on (1) the ownership of the member of such flat
flowing from the bye-laws of the society; (2) the member
being entitled to use or occupy the flat (3) his making an
application for permission to occupy, to the Officer designated
in this behalf and (4) getting such permission (5) his not
letting it to anybody else or otherwise not parting with
possession thereof (6) not keeping it vacant for more than a
month and (7) reporting the vacancy of more than a month
within the' time prescribed therefor.
22. It must be noted that no occasion to comply with these
conditions can arise in respect of any unsold flat in a society
formed in compliance with the Ownership Flats Act till it is
sold by the builders to any purchaser for residence. It is no
doubt true that the builders are also members of the society
and nothing can prevent them from residing in the flat if they
chose, which in turn obviously would depend on their need
and its suitability for their residence, as also the permissibility

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under the bye-laws and compliance with the relevant
Municipal Laws. What, however, is relevant under column (3)
is such "member's entitlement" to use and occupy under the
bye-laws of the society, and not the absence of any
impediment in the using or occupying it. As seen earlier, the
builders have to promote a Co-operative Society as soon as
they get minimum number of purchasers required for the
formation thereof and have to become its members in respect
of the unsold flats. In other words, they become members of
such housing society under statutory compulsion as such
builder, and have to continue to be such member till all the
flats constructed by them are sold. They do not become
member for securing any flat for their residence. Housing
Society is defined in Section 2(16) of the Co-operative
Societies Act to mean a society formed for securing houses for
its members. Any builder member having become member
under the statutory compulsion, for sale of Ids other unsold
flats, is certainly not such member. Section 2 (9) enables every
society to have some other nominal, associated or
sympathiser, members who are not contemplated to be
beneficiaries of its Such objects. Builder member is only
another species of such non-beneficiary members, being
entirely a creature of the Ownership Flats Act, meant for its
own requirements, with liberty to hold all the unsold flats for
sale for the contemplated limited purpose in spite of the

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contrary provision of the bye-laws of any society and the
conception of any such society under Section 2 (16). The bye-
laws do not permit holding of more than one flat or selling
thereof (vide model Bye-laws 9 (b) and 71A to 71D). Builder
member thus is not entitled to hold any flat in terms of the
bye-laws of the Society nor is he entitled to use or occupy the
flat under the Co-operative Societies Act, Rules or Bye-laws
of the Society. He is also not consequently entitled to make
any application for permission in terms of col. 3 of the
Schedule of the Rule, since application for permission can be
made only when a purchaser purchases it for his residence and
becomes member of the society in terms of his obligations
under the terms of the purchase from the builder who in turn is
under an obligation to sell only on such purchaser agreeing to
be member of such society. Such purchaser on being a
member alone, can be said to be entitled to use and occupy the
flat.
23. The occasion to make application and comply with the
other conditions can only arise after such purchaser becomes a
member. The exemption under Rule 4 r.w. schedule may be
attracted at this stage and result in the loss of exemption under
the proviso to Section 5 (1). Sub-clause (2) in Col. (3)
indicates how vacancy caused on non-compliance or breach of
the terms entails the loss of exemption.

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24. The contention of Mr. Gumaste that no building of any
Housing Society or no flat therein can claim exemption till the
member is entitled to use and occupy gets permission in terms
of the requirement of column 3 of the schedule, appears to us
to be wholly untenable. Rule itself does not contemplate first
application of the Act and subsequent exemption. Allowance
shall have to be made to the period consumed not only by the
process of construction of such building as also allotment of
flats therein to the members and their making application,
getting permission for the same reason as the proviso to
Section 5 (1) was found by us to be applicable to the building
till the involuntary non-residence is found to have actually
occurred. Rules do not contemplate, suspension of or
exclusion from such exemption during this indispensable
formative initial process. These contemplate exclusion from
exemption only after non-residence thereof. This way alone
statute seeking to deprive the citizens of their property can be
construed. We have already discussed how the flats in a
building of a Co-operative Housing Society formed in terms of
the Ownership Flats Act, is firstly exempt under the proviso to
Section 5 (1) of the Act and how the exemption under Rule 4
is attracted as soon as the same is sold to any purchaser and he
becomes member of the said society. Though the exemption
contemplated under the rule is conditional on compliance with
the terms of third column of the schedule, there is no basis for

22
assumption that the said exemption stands suspended till the
terms are complied with.
25. Close examination of the proviso to Section 5 (1) and the
R. 4 and the Schedule, does indicate intention to treat the
Cooperative Societies' buildings and flats therein, differently
in the matter of exemption from other buildings and their
parts. The proviso itself contemplates conditional exemption
to the building and the rule contemplates extending the
conditional limited exemption on slightly different basis to the
buildings of any housing society and flats held by its
members. It is not relevant, here to consider the propriety and
basis of this different treatment or its constitutional validity.
Underlying intent, not to disturb the possession of anybody in
actual possession or intended immediate possession on the
construction, is common to the proviso of Section 5 (1) and
Rule 4 read with the Schedule. The wording of the said
proviso and Rules concerned thereunder, however, suffers
from the same singular defect in that it does not take notice of
the peculiar features of the Co-operative Housing Society
buildings, and the flats regulated by the Ownership Flats Act
under the scheme of which the person for whose residence the
flat is constructed, does not come into picture till the flat is
sold to him. This discussion also further demonstrates how the
"enquiry" in this case was wholly misdirected and
misconceived. The Order is thus liable to be quashed.

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26. Rule is thus made absolute with costs.
27. Rule made absolute.

24
Bombay High Court
Association Of Commerce House ... vs Vishandas
Samaldas And Ors. on 8 December, 1980
Equivalent citations: (1981) 83 BOMLR 339
Bench: M Chandurkar, R Bhonsale
JUDGMENT
M.N. Chandurkar, J.
1. This Letters Patent appeal filed by defendant No. 1 arises
out of a suit for specific performance of an agreement dated
31st October, 1964 in respect of certain property, the identity
of which is in dispute, entered into by original defendant No. 1
in favour of the plaintiff who is respondent No. 1 in this
appeal. The suit was decreed by the City Civil Court and that
decree has been confirmed by a learned Single Judge of this
Court while dismissing an appeal filed by the present appellant
who was defendant No. 2 in the suit.
2. Most of the material facts relating to the building in
question are not now in dispute. The present appellant, which
is a limited company under the Indian Companies Act,
described itself as the Association of the Commerce House
Block Owner Ltd. "Commerce House" is the building in
question, which has godowns, basement, shops on the ground
floor and office premises on the first to the sixth floor. The
Commerce House was constructed by defendant No. 1, who is
the promoter, and the construction was completed finally in

25
1961, though most of the part of the construction was
completed in 1959. Prior to the owners of the Blocks in the
Commerce house constituting themselves into the appellant-
company, they functioned as Association of Block Owners
formed in the year 1959 and were known as the Commerce
House Owners, Association to whom the possession and
management of the building was handed over by defendant
No. 1. The Association continued to be in possession till 31st
December, 1964 and the management came into the hands of
the present company with effect from 1st of January, 1965.
Admittedly since then, the appellant-company has been in
management. The ownership of the building was transferred in
favour of the appellant by a regular transfer deed dated 11th
March, 1967. The completion certificate was issued by the
Corporation on 14th January, 1963. At this stage, it may be
mentioned that the Maharashtra Ownership Flats (Regulation
of the Promotion of Construction, Sale, Management and
Transfer) Act, 1963 (hereinafter referred to the "Ownership
Flats Act") came into force on 10th February, 1964.
3. The plaintiff-respondent No. 1, who was admittedly in the
employment of defendant No. 1, promoter and, on his own
admission, was attending to the matters of defendants No. 1 in
connection with the Municipal Corporation and other legal
matters, claimed to have entered into an agreement to
purchase premises which were described in the agreement (Ex.

26
A) as "Office No. 516 on the 5th floor of the said building
including the open terrace facing Rope Walk Lane." The
consideration for the sale was to be Rs. 10,000/- and on the
date of the agreement Rs. 5000/- were shown to have been
paid as earnest money and the balance of Rs. 5000/- was
agreed to be paid within six months from the date of the
agreement is signed by the plaintiff and by defendant No. 1
who is the son of one Ishwardas Bhatia, who is examined in
this case as a witness for defendant No. 1. According to the
plaintiff, on the day on which he had entered into this
agreement, he was delivered possession of what admittedly
was on open terrace. It was the case of the plaintiff-respondent
No. 1, that the present appellant by letter dated 15th February,
1965 had alleged that there was no such agreement as
contended by the plaintiff and that there were no premises
bearing room No. 516 on the fifth floor in the Commerce
House at all and that the alleged agreement if any, was sham
and bogus and incapable of the creating any interest, right of
claim in favour of the plaintiff. According to the plaintiff, after
he had addressed a letter to the Chairman of the appellant-
company intimating to him about the agreement entered into
between the plaintiff and defendant No. 1, the Chairman of the
appellant-company informed the father of defendant No. 1
about the alleged agreement on which the father of defendant
No. 1, promised to look into the matter and he latter informed

27
the appellant by letter dated 17th February, 1965 that the
plaintiff had obtained the said agreement on a representation
that he had good relations with the Chairman and the Directors
of the appellant-company and that some Directors had assured
the plaintiff that the appellant would have no objection to the
construction of a room which was referred to as room No. 516
in the said agreement on the terrace on the fifth floor and
relying on such assurances and representations, the said
agreement was entered into. The plaintiff alleged that the said
agreement was cancelled by defendant No. 1 by the letter
dated 30th March, 1965. That was how the plaintiff filed a suit
in the Bombay City Civil Court praying for a declaration that
the said agreement was valid and subsisting and for specific
performance of the said agreement against defendant No. 1
and further for recovery of vacant and peaceful possession of
the said premises from the present appellant or defendant No.
1 or either of them. In the alternative, the plaintiff claimed
refund of the earnest money of Rs. 5000/- with interest.
4. The plaint shows that the case sought to be made out by the
plaintiff in the plaint was that he had agreed to purchase open
space bearing No. 516 and not any office premises as
described in the agreement. The dimensions of the said been
space which was the terrace were given as 56' x 14' situated
between office rooms Nos. 516 and 522 on the fifth floor and
bounded by a parapet wall towards Rope Walk Lane towards

28
West and a full wall up to coiling abutting on the passage in
the East with an opening on the northern side for putting up a
door. The immediate cause for the suit, according to the
plaintiff, was that defendant No. 1, had put up a door in the
opening on the northern side and the plaintiff had put his own
lock which, however, he found removed on or about 17th
February, 1965 after the Chairman of the appellant-company
had replied to the plaintiff's letter dated 6th February, 1965.
That is how the claim that the plaintiff was wrongfully
dispossessed was made.
5. The suit was mainly contested by the present appellant on
the ground that there did not exist any room No. 516 or office
premises bearing No. 516 in the building Commerce House.
The appellant's case was that the open terrace was never
numbered as 516 and that the alleged agreement was sham and
colourable document brought about collusively to deprive the
appellant of its right over the said terrace and was not binding
on the appellant. The appellant's case was that the F.S.I. had
been fully utilised and under the rules and regulations of the
Bombay Municipal Corporation, the said terrace had to be left
open. The jurisdiction of the City Civil Court was also
challenged as, according to the appellant, the value of the
subject-matter was beyond the pecuniary jurisdiction of the
City Civil Court. In addition to the plea of the agreement
being sham and bogus, the agreement was alleged to be in

29
contravention of the provisions of sections 4 and 7 of the
Ownership Flats Act. The appellant had denied that defendant
No. 1, had put up any door in the side wall on the northern
side. According to the appellant, since the year 1960-61, there
was a barricade of 9" in height running from south to north
between office premises Nos. 51 and 522 abutting on the
passage, but when it was found that the rain water flowed over
this barricade, a 3' high wall over the beam of the fourth floor
from the south end to the north end with no opening left was
constructed in 1964. It was also alleged that the said 3' high
wall was further raised to the beam of the sixth floor between
20th January, 1965 and 6th February, 1965 and it was at that
time that the door in the northern end of the wall was fixed
and locked by the appellant.
6. Defendant No. 1 in his written statement also denied that
there was any office No. 516 on the fifth floor. He denied that
the open space was No. 516. He also denied that he had agreed
to sell and the plaintiff had agreed to purchase open space
alleged to be No. 516. The subject-matter of the alleged
agreement was stated to be neither certain nor definite but
vague and the agreement was, therefore, alleged to be void for
uncertainly. The agreement was also alleged to be void on the
ground of non-existence of the alleged premises. Defendant
No. 1 had alleged that the agreement was got executed by the
plaintiff on a misrepresentation that he would get the consent

30
of the Directors of the appellant and, therefore, according to
defendant No. 1, he was entitled to cancel the agreement
which he did and tendered the sum of Rs. 5000/- to the
plaintiff which he declined to accept wrongfully. Defendant
No. 1 supported defendant No. 2 appellant when he had taken
the plea that the door was provided by the appellant-company
who had put up its lock.
7. The trial Court negatived the challenge to its jurisdiction
and held that the suit was maintainable before it. With regard
to the contention that the agreement was void because it was
not registered as required by section 4 of the Ownership Flats
Act, the trial Court held that section 49 of the Indian
Registration Act could not be invoked and the agreement
could not be said to be null and void. With regard to the issues
relating to the agreement being void on the ground of
uncertainly and non-existence of the subject-matter, the trial
Court held that what was intended to be given to the plaintiff
was merely the terrace and it was the plaintiff who was to
construct on that terrace a portion which was to be numbered
as 516. Thus, according to the trial Court, the agreement could
not be said to be void on the ground of uncertainly or non-
existence of the subject-matter. The trial Court further held
that the Ownership Flats Act was not retrospective and section
7 of the said Act had, therefore, no application. Even
otherwise, according to the trail Court, section 7 was not

31
attracted because what was agreed to be sold by defendant No.
1 was only open terrace and there was no question of
defendant No. 1 putting up any structure on the terrace. The
trial Court found that since the building was constructed and
the flats and the premises were sold much prior to the coming
into force of the Flats Ownership Act, if at all defendant No. 2
wanted to establish that there was some kind of restriction on
defendant No. 1 in dealing with the open terrace, that could be
done only by a specific agreement between defendant No. 1
and defendant No. 2, which was not the case before the Court.
On the issue of cancellation of the agreement, the Court found
that defendant No. 1 could not avoid the contract on the
ground misrepresentation because, according to the trial Court,
defendant No. 1's father had admitted that he had agreed to
enter into the agreement because the plaintiff was in his
service and if he was going to get say benefit, he would not
come in his way. The trial Court, however, negatived the
plaintiff's claim that he was placed in possession of the terrace
in part performance of the agreement dated 31st October,
1964. It negatived the claim of the appellant that the
transaction was sham and bogus. The trial Court found that it
was not necessary for defendant No. 1 to obtain the consent of
the present appellant for transferring the terrace to the
plaintiff. The trial Court did not rule out the possibility of the
plaintiff as also of defendant No. 1 thinking that in course of

32
time, the plaintiff would also be able to build a small structure
on the terrace such as other office owners had done. The
plaintiff was thus hold entitled to a decree for specific
performance and he was directed to deposit the balance of the
purchase price of Rs. 5000/- the agreement being held to be
binding on defendant No. 2. The decree further directed that
the share money and other charges payable to the appellant
should be informed to the plaintiff's Advocate within four
weeks from the date of the judgment.
8. The appeal filed by the appellant against the judgment and
decree of the trial Court was heard by a learned Single Judge
of this Court and the learned Judge found that issues which
were framed on the pleadings of the plaintiff and defendant
No. 1 become conclusive because defendant No. 1 had not
filed any appeal and the present appellant could not challenge
the findings on those issues in the appeal filed by it. The
learned Judge restricted the scope of the appeal only to those
issues which were raised between the plaintiff and the
appellant-second defendant. The judgment of the learned
Judge shows that only four contentions were raised before him
namely :
(1) that the trial Court had no jurisdiction to try the suit as the
value of the subject-matter of the suit was over Rs. 25,000/-

33
(2) that the agreement being in contravention of the provisions
of the Maharashtra Ownership Flats Act was illegal and not
bind on it;
(3) the said agreement being not genuine and being bogus and
collusive was not binding on it; and lastly
(4) that the plaintiff was not entitled to specific performance
of the agreement.
9. The learned Judge upheld the finding of the trial Court on
the issue of jurisdiction and the correctness of that finding is
not now challenged in this appeal.
10. The learned Judge confirmed the view of the trial Court
that section 7 of the Ownership Flats Act was not attracted
because the Act was not retrospective and even otherwise,
according to the learned Judge, the agreement itself did not
speak of any construction or any intended construction against
or in addition to the sanctioned municipal plan so as to
contravene the provisions of the Ownership Flats Act. The
learned Judge also negatived the contention that the agreement
was sham and bogus. He referred to the three grounds on
which the agreement was alleged to be sham and bogus,
namely; (1) that the plaintiff was an employee of defendant
No. 1; (2) that the payment of Rs. 5000/- was not genuine and
inadequate; and (3) that the premises could not have been sold
under the municipal by-laws. Certain other circumstances such
as non-payment of the share amount and the ground rent and

34
maintenance charges by the plaintiff were also considered.
These, according to the learned Judge did not affect the
genuineness of the agreement. The learned Judge found that
there was no prohibition in law for transferring or selling the
terrace to the plaintiff, nor was any contractual prohibition
brought to the notice of the learned Judge, according to him. It
appears that it was contended before the learned Judge that the
plaintiff cannot make out a case for specific performance
different from the one found in the agreement. This contention
was obviously with reference to the fact that the premises
agreed to be sold were office No. 516, while, according to the
plaintiff, in the suit, he claimed a right to purchase the open
terrace. The learned Judge found that it was permissible for
the trial Court to consider the evidence as to what was
intended to be sold because, according to the learned Judge,
there was in fact no office No. 516 on the fifth floor when the
agreement was made. The learned Judge took the view that it
was permissible for the Court to determine by extrinsic
evidence, such as acts done under the agreement, the true
meaning of the agreement and the intention of the parties.
Relying on the correspondence between the parties, which
undoubtedly was subsequent to the agreement, the learned
Judge found that the agreement was in respect of open terrace
and not the office premises. On the view which the learned

35
Judge took, he dismissed the appeal. This decree is now
challenged by the appellant in this appeal.
11. The learned Advocate-General appearing on behalf of the
appellant has at the outset proceeded to argue the appeal on
the footing that the agreement was not a sham or a bogus
agreement for the purposes of the contentions raised by the
appellant based on the provisions of the Ownership Flats Act,
though it may be pointed out that the question with regard to
the sham and bogus nature of the transaction was also later
argued. The learned Advocate-General contended that the
correspondence between the parties clearly referred to a sale
of room No. 516 or office No. 516 and according to the
learned Advocate-General, in view of the fact that definition
of 'promoter' under the Act is modified in respect of buildings
which are complete on the date on which the Act comes into
force, the bar under section 7 will be attracted in the present
case.
11-A. Mr. Parikh appearing on behalf of the plaintiff has
drawn our attention to the agreement (Ex. A) and according to
the learned Counsel, it is no body's case that under the
agreement any construction was to be made. It was pointed out
by the learned Counsel that the agreement refers to
construction of a building and it does not refer to any new
construction in addition to what is already constructed. The
learned Counsel pointed out that it was common ground

36
between the plaintiff and defendant No. 1 that the agreement
was in respect of open space only. Consequently, according to
the learned Counsel since no construction was intended by the
promoter under the agreement, the bar of section 7 of the
Ownership Flats Act would not be attracted in the present
case.
12. In order to decide whether the provisions of section 7 of
the Ownership Flats Act would be attracted, it is first
necessary to consider the scope of the provisions of section 7
and then consider the rival contentions between the parties as
to whether what is agreed to sold under the agreement was an
office room or only an open terrace.
13. Now, as already, pointed out, the Ownership Flats Act
came into force on 10th February, 1964. Admittedly the
Commerce House in question was a completed construction in
the year 1961, that is, long before the Act had come into force.
At the same time, the agreement (Ex. A) the specific
performance of which is now sought by the plaintiff, was
entered into after the Act had came into force. The preamble
of the Ownership Flats Act shows that the legislation became
necessary because of the abuse and malpractices indulged in
and difficulties faced in the promotion of construction and the
sale and management and transfer of flats taken on ownership
basis. The Legislature found it necessary to make provision
during the period of shortage of housing "for the regulation of

37
the promotion of the construction sale and management and
transfer of flats taken on ownership basis in the State of
Maharashtra". There can hardly be any dispute that the Act
was intended to regulate the activities of a promoter who has
been defined in Clause 2(c) of the Act as meaning a person
who constructs or causes to be constructed a block or building
of flats or apartments for the purpose of selling some or all of
them to other persons, or to a company, co-operative society
or other association of person, and includes his assignees; and
where the person who builds and the person who sells are
different persons, the term includes both. Therefore, a builder
and a seller of flats, whether he is the same person or they are
different persons, are included in the definition of a promoter
in section 2(c) of the Ownership Flats Act.
14. Section 3 of the Ownership Flats Act prescribes general
liabilities of the promoter and these provisions will show that
they are intended to safeguard the interest of the potential flat
owners in all its aspects such as the title to the land, any
encumbrance on the land on which the building is to be
constructed, the exact nature of the accommodation which the
potential buyer is to buy and the quality of the construction
such as the fixtures, fitting and amenities which are intended
to be provided. The promoter has to specify the date by which
possession of the flat is to be handed over. As a matter of flat
all the necessary details, disputes with respect to which

38
normally arise in respect of property, have to be disclosed by
the promoter.
15. Section 4, which we shall discuss in detail later, requires
the promoter to enter into a written agreement before any
payment is accepted and the agreement has to be registered.
16. Section 5 requires a promoter to maintain separate
accounts of sums taken as advance or deposit and to be trustee
therefore and disburse them for purposes for which they are
given.
17. Under section 6 the responsibility for payment of
outgoings till the property is transferred is placed on the
promoter.
18. Then comes section 7(1) with which alone we are
concerned. It reads as follows :--
7(1) "After the plans and specifications of the buildings, as
approved by the local authority as aforesaid, are disclosed or
furnished to the person who agrees to take one or more flats,
the promoter shall not make---
(i) any alterations in the structure described therein in respect
of the fat of flats which are agreed to be taken, without the
previous consent of that person or
(ii) make any other alterations in the structure of the building,
or construct any additional structures, without the previous
consent of all the persons who have agreed to take the flats".

39
Under section 7 there is a prohibition against the promoter
from making any alterations in the structures described in the
plans and specifications of the building sanctioned by the local
authority. This cannot be done without the previous consent of
the person who takes one or mere flats. Sub-clause (i) thus
prohibits the promoter from making any alteration in the flat
once the flat owner has agreed to purchase that flat. Sub-
clause (ii) deals with the alteration in the structure of the
building or construction of any additional structures and
section 7 has the effect of prohibiting the promoter from
constructing any additional structures or alterating the
structures of the building unless previous consent of all the
persons who have agreed to take the flats is taken.
19. Normally a law made by the legislature operates
prospectively but it is also well established that when a law
operates on some thing which exists on the date of which the
Act has come into force, such operation cannot be termed as
retrospective operation of the law. It operates in the future.
Apart from this, though normally the Ownership Flats Act is
intended to regulate the conduct of promoters after the Act has
come into force and the provisions show that it will positively
apply in respect of buildings which the promoters are to put up
after the Act has come into force, there is clear indication
given in section 17 of the Act that the Act would also operate
in respect of buildings which have been constructed and are

40
complete on the date on which the Act has come into force.
Section 17 of the Act in so far as is material reads as follow :--
17. "As respect flats which on the commencements of this Act
have already been constructed, or converted, the provisions of
sections 2, 6, 8, 9, 10, 11, 12, 13, 14, 15 and 16 apply with the
following modifications, that is to say---
(a) in section 2, in Clause (c), the words 'means a person who
constructs' shall be read as if the words 'means a person who
has constructed' had been substituted;
(b) ........
(c) ........
(d) .........
(e) .........
The provisions of section 17 will show that except the
provisions of section 3, 4, 5, and 7, the other provisions have
been expressly mentioned as being applicable in respect of
flats which have already been constructed or converted. The
reasons is obvious. Section 3 deals with the liability of a
person who intends to construct or constructs block. It would,
therefore, be applicable to a case where a block or building of
flats is to be constructed after the coming into force of the Act.
The specific mention of section 3 in section 17 would be
necessary because even if an additional construction is to be
made in the case of an existing block or a building of flats, the
provisions of section 3 would be automatically attracted

41
because such a promoter would specifically by the description
in section 3 be one who intends to construct a block or a flat as
contemplated by section 2(a). Clause (c) of section 2 defines
the phrase "to construct a block or building of flats or
apartments", a phrase which is to be found in the definition of
a promoter in section 2(c) and this is said to include a
conversion of a building or part thereof into flats or
apartments. Therefore, wherever a building standing on the
date of the coming into force of the Act new flats or
apartments are to be constructed section 3 will be attracted.
Consequently section 4 will also be attracted. The promoter
will also have to comply with section 5. Now, when we come
to section 7, the modification in the definition of a promoter in
the case of flats which have already been constructed because
relevant. The definition of 'promoter' as modified by section
17 Clause (a) will mean that a person who has constructed a
block or building of flats for the purpose of selling some or all
of them to other persons or to the person specified therein will
described as a promoter. If the amended definition of promoter
is read into the provisions of section 7, then it is obvious that
even in respect of a building which is completed, if a person
has agreed take one or more flats after the coming into force
of the Act, the promoter, that is, the person who has
constructed the building will have the liabilities or the
obligations specified in sub-clauses (i) or (ii) of section 7(1)

42
fastened to him. In other words, if there is a building which is
fully constructed on the date on which this Act has come into
force, the promoter is disabled from making any alterations in
the structure in respect of flat or flats which are agreed to be
taken by a person or persons without the consent of that
person or person. Similarly the promoter that is the person
who has constructed the building is disabled from making any
other alterations in the structure of the building or from
constructing any additional structure without the previous
consent of all the persons who have agreed to take the flats. It
was this construction of section 7 which the learned Advocate
General canvassed when the contended that the alleged
agreement between the plaintiff and defendant No. 1 being for
the purchase of Office No. 516, defendant No. 1, who was a
promoter in view of the modified definition in the Act, was
not entitled to make any other alterations or constructor any
additional structure without the previous consent of all the
persons who have agreed to make the flats, which would mean
that defendant No. 1 had to obtain the consent of the appellant
defendant No. 2 company.
20. It was obviously with a view to get over the bar of section
7 that the agreement was sought to be constructed and put
forth by the plaintiff as one in respect of the sale of an open
terrace. The learned Advocate General pointed out that the
agreement specifically refers to Office No. 516 on the fifth

43
floor of the said building including the open terrace facing
Rope Walk Lane and this, according to him, was also the case
of the plaintiff in two letters addressed by him to defendant
No. 2. These two letters are dated 6th February, 1965 and 14th
June, 1965. The letter dated 6th February, 1965 is addressed
by the plaintiffs Counsel to Kishinchand P. Bijlani as
Chairman of the appellant company. This notice clearly states
that the plaintiff had purchased the office premises from the
said Shri Bhatia on ownership basis, more particularly known
as Room No. 516, fifth floor, Commerce House 140, Medows
Street, Fort, Bombay 1. The said office premises also include
an open terrace facing Rope Walk Lane. The letter dated 14th
June, 1965 is again a notice given by the plaintiffs Advocate
to the appellant in which while describing the premise, of
which the plaintiff is the owner as a portion of the building
Commerce House, it is described as Office No. 516 on the
fifth floor of the said Commerce House Building and which is
located between Office Nos. 515 and 522 including an open
terrace facing Rope Walk Lane. These two would thus show
that even according to the plaintiff, what was agreed to be
purchased under the agreement what was described in the
agreement as Office No. 516 including the open terrace facing
the Rope Walk Lane. How, admittedly there is no office room
bearing No. 516. What is, however, contended on behalf of the
plaintiff by Mr. Parikh is that the agreement itself does not

44
refer to any construction and since admittedly on the day of
the agreement there was no office room, it would be open to
the plaintiff to adduce evidence to show that though the
premise are described as Office No. 516, what was intended
by the parties was that the open terrace was to be transferred
to the plaintiff. The learned Counsel for the plaintiff has
contended that it will be open to the plaintiff to refer to the
surrounding circumstances in order to show that what was
intended by the parties was a transaction in respect of an open
terrace.
21. Now, as already pointed out, the agreement is very specific
and refers to an office Room No. 516 and the transaction is
said to include the transfer of an open terrace. There is some
dispute between the parties as to whether the plan, which has
been exhibited as Exhibit B. was given by defendant No. 1 to
the plaintiff. Exhibit B according to the plaintiff is a plan
which forms part of the agreement and is attached to the
agreement and was given by defendant No. 1 to the plaintiff, a
position which is disputed by defendant No. 1. The plaintiff
himself does not appear to be very sure as to what is his case
about this plan. He has no doubt stated in the examination in
chief that the plan was given to him by defendant No. 1 along
with the agreement and further, according to him, when the
plan was given to him, the red lines drawn on the plan were in
existence. The red lines on Exhibit B show the area of the

45
open terrace between office premises No. 515 of 522. The
plaintiff had, however, to admit that neither in the plaint nor in
the correspondence, had he disclosed that defendant No. 1 had
given him any plan. It may be pointed out that the plan
(Exhibit B) is sought to be used by the plaintiff in order to
show that 516 was the number given to the open terrace by
defendant No. 1 and that when the argument refers to office
Room No. 516, the reference into the area indicated by the
figure 516 on the plan (Exhibit B). It was suggested to the
plaintiff that this plan was not given to him by defendant No. 1
and that it was only an additional copy of the plan prepared by
the plaintiff himself to be annexed to the plaint. The plaintiff
admitted that "In plan exhibit B, the block numbers are written
by me." He has stated that he wrote the number of the block
before the copies were made of Exhibit B, but he did not
remember who prepared the copies of the plan. The admission
made by the plaintiff that the numbers of the blocks in the plan
(Exhibit B) are written by him would clearly indicate that
prior to these numbers being written by the plaintiff, there was
nothing to indicate which part of the premises of the
Commerce House could be identified as having No.
516. It has to be noted that at one stage the plaintiff Counsel
himself had informed the trial Court that the plan (Exhibit B)
was not given to him by defendant No. 1. A part of the cross-
examination of the plaintiff was completed on 23rd January,

46
1974. When it was continued again on the next day, the
plaintiff admitted in cross-examination that before he left the
Court on 23rd January, 1974, his Advocate had informed the
Court under his instruction that the plan (Exhibit B) was not
the plan given to him by defendant and that was only a copy of
the plan given to him by defendant No. 1 and that he would
produce the other plan. Thus on plaintiffs instructions the
Court was informed that Exhibit B was not the plan given by
defendant No. 1. This statement, according to the plaintiff,
was made by mistake and he denied that the plan (Exhibit B)
was not given to him by defendant No. 1. The plaintiff also
admitted that Exhibit B does not show that the suit premises as
an office and when asked as to how the number 516 was
given, he stated that the whole of the area between office Nos.
516 and 522 would be
516. When he was further asked as to who was meant by the
words "including the open terrace" he stated that he meant the
whole terrace. When the father of defendant No. 1 was
examined as a witnesses, he was asked about the plan and he
stated that at the time the agreement was signed, no plan was
given to the plaintiff by him. On being shown Exhibit B he
stated, "I have not given this plan to the plaintiff. He might
have taken it from the office when he was working with me".
These statements were made in examination in chief and it

47
does not appear that the matter was pursued further in cross-
examination.
22. Exhibit B does not bear signature of any person, either the
plaintiff or defendant No. 1. It does not even show as to who
had made the plan. On the plaintiff own showing, the numbers
on this plan are put by him. Admittedly, the plaintiff was in
the employment of defendant No. 1 and was attending to all
legal matters as well as matters connected with Municipal
Corporations. It is not, therefore, improbable that the plan
could have come into his possession otherwise than in normal
course. The evidence shows that this plan was not a part of the
alleged agreement and it cannot, therefore, be used to identify
the premises which were now, according to the plaintiff, only
open terrace which was to be transferred to defendant No. 1.
The plain must, therefore, be left out of consideration.
23. It is at this stage necessary to consider the argument of the
learned Counsel for the plaintiff that it was never intended that
defendant No. 1 was to construct any structure. Leaving for
the moment the question as to whether other evidence could
be considered to really appreciate what was meant by the
premises described in the agreement, such a construction
would be wholly inconsistent with the agreement itself. The
agreement on the face of it is an agreement between a builder
and another person who claims to be a buyer of certain
premises. In such an agreement where the persons to be

48
transferred are described as an office room alone with the
adjoining open terrace, it is obvious that if the agreement was
intended to be genuine, it could be only in respect of a
structure which could be called an office room. The words in
the agreement clearly refer to an office room and merely
because it now suits the plaintiff and defendant No. 1 both to
say that nothing was intended to be constructed by defendant
No. 1, that cannot ignore the terms of the agreement with
regard to the premises intended to be transferred. It is no doubt
true that both the plaintiff and defendant No. 1 have been
changing their stands from time to time with regard to the
premise. We have referred earlier to the two letter dated 6th
February, 1965 and 4th June, 1865 where a positive case is
made out by the plaintiff that the agreement is in respect of an
office room and the adjoining part of the terrace. The plaintiff
has stated that defendant No. 1 was not to construct anything
in the suit premises except the door and then he added, "I was
to construct". D.W. 1, Ishwardas Bhatia, who was really the
person who used to manage the affairs of defendant No. 1 who
is his son and in whose hand in the hand written portion on the
alleged agreement with regard to the earnest consideration and
the time of payment of the balance of the purchase price, has
expressly stated that "possession of the premises was to be
given to the plaintiff after the construction was put up with the
consent of defendant No. 2 and the Municipal Corporation".

49
(para 13) We fail to see what other meaning these words can
convey except that the office room was to be constructed by
defendant No. 1 and after the construction was complete, the
possession was to be given. If according to the plaintiff he was
to construct, then the question of defendant No. 1 giving
possession after the construction was put up would not arise at
all. D.W. 1 Ishwardas Bhatia has clearly stated that it was he
who had negotiated with the plaintiff in respect of the premise
which the plaintiff was to take on ownership basis. He has
stated that there was no negotiation as such as between a buyer
and a seller because the plaintiff was in his office and he had
only discussions with him. He has also stated that the plaintiff
told him that in the terrace on the fifth floor, there was a
possibility constructing six office premises and the witness
Ishwardas had told him that since "we had constructed
completely and since there was no further F.S.I. available, it
would not be possible for any one to construct that terrace".
According to Ishwardas, the plaintiff told him that he would
manage with the Municipal Corporation and members of
defendant No. 2 and "That is how he induced me to enter into
this agreement". Ishwardas has also stated that there are no
office premises or premise bearing No. 516 or 518 of 519 of
520 or 521. In cross-examination he has stated that apart from
signing the agreement, his son had not taken any part at the
time of negotiation in respect of the agreement. Ishwardas has

50
further stated, giving reasons as to why he cancelled the
agreement, that it was not possible for him to give possession
because possession was already with defendant No. 2 and that
it was not possible for any one to put up any structure as
possession was with defendant No. 2. The evidence, therefore,
show that so far as the construction was concerned, the
question of possession being transferred to the plaintiff would
have arisen only after the construction was made by defendant
No. 1. There is thus no substance in the contention of the
plaintiff that it was he who was to construct the office
premises.
24. The plaintiff had also admitted that he wanted to buy this
space for the purpose of using "that is to say, for storing or
even for using it as an office". It is difficult for us to imagine
how unless the open terrace was built upon, it could be used as
an office. If the agreement is read as it is, it appears to us to be
unambiguous and it clearly indicates that what was intended to
be purchased was not open space of the terrace but an office
room which had to be constructed by defendant No. 1.
25. We must how deal with the contention raised that since at
the site there was no construction at all, parties really intended
to purchase open space and that to establish this, oral evidence
contrary to the terms of the agreement was permissible. This
contention found favour with the learned Single Judge who
relied on a decision of the Supreme Court in Abdulla Ahmed

51
vs Animendra Kissen Mitter AIR 1950 SC 15, where while
dealing with the provisions of section 92 of the Evidence Act,
it was held by the Supreme Court that extrinsic evidence to
determine the effect of an instrument is permissible where
there remains a doubt as to its true meaning and it was
observed that evidence of Acts done under it is a guide to the
intention of the parties in such a case and particularly when
Acts are done shortly after the date of the instrument. Now,
there can be no doubt about the principle laid down in this
decision. One of the prerequisite for considering extrinsic
evidence is that there must be a doubt as to the true meaning
of a document. In the present case, there was no question of
any Acts done under the agreement in question. Notices issued
by parties to such other are not Acts done under an agreement.
It is only when the parties Act according to the terms of the
agreement, as they understanding it, in implementation of the
agreement that it can be said that the parties have acted under
the agreement. The later part of the dictum of the Supreme
Court, therefore, is not of any assistance so far as the present
case is concerned.
26. Mr. Parikh appearing on behalf of the plaintiff has
extensively quoted before us from Halsbury's Laws of
England and has referred us to certain decisions. But before
we go to these authorities, it is necessary to point out that Mr.
Parikh has heavily relied on proviso 6 to section 92 of the

52
Evidence Act and on section 95 of the Evidence Act. Under
section 92 of the Evidence Act when the terms of any contract,
grant or other disposition of property are reduced to the form
of a document, no evidence of any oral agreement or statement
shall be admitted as between the parties to any such document
for the purpose of contradicting, varying, adding to or
subtracting from its terms. Proviso 6 to section 92 provides
that any fact may be proved which shows in what manner the
language of a document is related to existing facts. Now, it is
well established that unless there is any doubt about the
meaning of the words used in the document, oral evidence
would not be permissible. The sixth proviso to section 92 has
to be read to be read along with the provisions of section 94
and 95 of the Evidence Act. Under section 94 it is clearly
provided that when language used in a document is plain in
itself and when it applies accurately to existing facts, evidence
may not be given to show that it was not meant to apply to
such facts. Now, when section 94 refers to the language
applying to existing facts, it refers to facts existing at the time
of the agreement and merely because on the date of the
agreement between a builder and a purchaser, the premises
intended to be purchased are not in existence, no doubt is
thrown on the language of the document which in the light of
the then existing facts was clear and unambiguous. The crucial
facts in the instant case are that defendant No. 1, was a

53
builder. Any agreement with a builder, if it is Act in respect of
a flat which is exiting would be in respect of a flat which is to
be constructed. But merely because a builder agrees to
construct a flat or a potential purchaser of a flat agrees to
purchase a flat to be constructed, no ambiguity is introduced in
the agreement and such a case would, therefore, not fall within
section 94 of the Act. Equally inapplicable would be the
provisions of section 95 which provides that when language
used in a document is plain in itself, but is unremeaning in
reference to existing facts, evidence may be given to show that
it was used in a peculiar sense. It is difficult for us to
appreciate how the language of the agreement in question can
be said to be unremeaning in any respect. The document is
clear and unambiguous that the agreement is to purchase
office premises. Indeed that has been the case of the plaintiff
in the two letters dated 6th February 1965 and 14th June,
1965.
27. In Asfar M.N. Taeki v. Dharamasey Tricandas it was
pointed out that while construing a contract the Court is
entitled and bound to take into consideration the surrounding
circumstances which must have been present to the minds of
the parties at the time of catering into the contract, but this rule
as to surrounding circumstances cannot be extended to enable
a party to prove that when he wrote one thing, he meant and
should be understood to mean something totally different. To

54
allow such evidence in a suit other than a suit for rectification
would be a plain violation of the Evidence Act. It is no doubt
true, as contended by the learned Counsel for the plaintiff on
the basis of paragraph 1460 from Halsbury's Laws of England,
4th Edition, Volume 12, that the intention must be gathered
from the written instrument read in the light of such extrinsic
evidence as is admissible for the purpose of construction and it
is the function of the Court to ascertain what the parties meant
by the words which they have used. But these observations
themselves point out that the extrinsic evidence which can be
looked into must be such as is admissible for the purpose of
construction of the document and the matter will, therefore,
have to be governed by the provisions of sections 92, 94 and
95 of the Evidence Act which, as we have already pointed out,
rule out any consideration of extrinsic evidence which can be
looked into must be such as is admissible for the purpose of
construction of the document and the matter will, therefore,
have to be governed by the provisions of section 92, 94 and 95
of the Evidence Act which, as we have already pointed out
rule out any consideration of extrinsic evidence in the instant
case. Even in Halsbury's Laws of England, it is clearly stated
that extrinsic evidence will be admissible only in the case of
latent ambiguity which cannot otherwise be resolved.
Paragraph 1490 at page 622 reads as follows :---

55
"The object of interpretation is, as already stated, to ascertain
the intention of the parties to the instrument as expressed by
the words they have used ; and, since the words are the sale
guide to the intention, extrinsic evidence of that intention is
not admissible save in the case of talent ambiguity which
cannot otherwise be resolved.
Extrinsic evidence is, however, admissible both to ascertain
where necessary the meaning of the words used, and to
identify the persons or objects to which they are to be applied,
for example to connect the language of a deed with the
property conveyed, and since the meaning and the application
will depend upon the circumstances surrounding the author at
the time when the words used, the same principle requires that
evidence of such circumstances should be admitted".
The kind of cases of latent ambiguity in order to resolve which
oral evidence is admissible are specifically dealt with by
section 94 and 95 of the Evidence Act unless a case falls
squarely within those provisions, oral evidence will be
inadmissible.
28. It was contended by Mr. Parikh that having regard to the
meaning of the word 'flat' in the Act, the case must be treated
as one of inaccurate description in the agreement and,
therefore, he agreement must be construed as one in respect of
the terrace. A flat has been defined in section 2(a) of the
Ownership Flats Act as meaning "a separate and self

56
contained set of premise used or intended to be used for
residence, or office, or show room or shop or godown and
includes a garage, the premises farming part of a building and
include an apartment". It is not the plaintiff's case that the
open terrace is an apartment. The inclusive portion of the
definition has, therefore, to be left out of consideration. It is,
however, difficult for us to appreciate how the definition of a
flat which is self contained can even remotely be construed as
taking in an open terrace by itself. We are not dealing with a
case of a terrace which is appurtenant to a flat. What the
learned Counsel wants to argue is that the flat contemplated by
section 2(a) of the Ownerships Flats Act need not have walls
or roofs, a contention which must be rejected on the words of
the definition of flat. The definition of flat contemplates
premises in the context of their use or intended use. A terrace
cannot be used for residence nor for office or as a show room
nor as a shop nor a godown nor as a garage. Indeed the
premises contemplated by 'flat' obviously refer to a structure
which can be used for any of the purpose specified in the
definition.
29. The learned Single Judge has observed in paragraph 44 of
the judgment that the finding recorded by the trial Court that
the agreement was for the whole of the open terrace was
recorded on the issue which arose on the pleadings between
the plaintiff and the defendant No. 1 and defendant No. 1 had

57
not challenged that finding because he had not filed any
appeal. The learned Judge holds that the finding is conclusive
against defendant No. 2 also and the appellant was not entitled
to agitate the correctness of that finding was not challenged by
the present appellant in the memo of appeal. The grounds of
appeal in the first appeal which have been reproduced in
extenso in the judgment under appeal to us to have clearly
objected to that finding. Ground No. 9 clearly raised a
contention that the trial Court ought to have considered that
the case of the plaintiff about the subject matter of the suit was
inconsistent inasmuch as in the agreement, the suit premises
were described as Office No. 516. Then in ground No. 25, the
ground raised is that the trial Court had erred in holding that
what was intended to be given to respondent No. 1 plaintiff
was the whole of the terrace. Ground No. 28 also raised the
same controversy. The observations made by the learned
Single Judge that the correctness of the finding that the
agreement was in respect of an open terrace was not
challenged in the first appeal are not borne out by the record.
30. Now, so far as the right of the appellant to challenge the
finding which was given in respect of tan agreement which is
now held to be binding on the present appellant is concerned,
it is difficult for us to see how the appellant can be prevented
from challenging that finding on the ground that defendant
No. 1 had not filed any appeal. The appellant was the owner of

58
the property, the property was constructed at the instance of
the appellant, the possession was handed over to the appellant,
and it could hardly be disputed that if a finding is to bind a
party to a suit, that party would be entitled to challenge the
finding notwithstanding the fact that defendant No. 1 had not
challenged that finding. The present appellant had denied the
agreement wholly. It was the case of the plaintiff that the
agreement was only in respect of the terrace. The question as
to whether the agreement was valid at all and if so, to what
property it related was not in issue which arose only between
plaintiff and defendant No. 1. It very much arose between the
plaintiff and defendant No. 1 2, also and, therefore, the failure
of defendant No. 1 to challenge the decision of the trial Court
could not prevent defendant No. 2 appellant from challenging
that finding.
31. Mr. Parikh for the plaintiff has referred us to the
correspondence on which reliance was placed by the learned
Single Judge for coming to a finding that the agreement
should be constructed as being in respect of the terrace. It
consisted of various letters dated 6th February, 1975, 16th
February, 1975, 17th February, 1975, 18th February, 1975, 4th
March, 1975 and 30th March, 1975. The letter dated 30th
March, 1975 is the letter by which the contract is purported to
be cancelled by defendant No. 1. Heavy reliance was placed
by Mr. Parikh on the letter dated 1st March, 1965 which is

59
addressed by the plaintiffs Advocate to defendant No. 1 in
which it was mentioned that defendant No. 1 had sold to the
plaintiff "a portion of the said building which consisted of and
was numbered by you as office No. 516 on the fifth floor and
which is located between office Nos. 515 and 522, including
an open space i.e. terrace facing Rope Walk Lane". The
learned Counsel wanted to point out that this letter shows that
the plaintiff has understood the agreement to be in respect of
an open terrace. Now, apart from the fact that as already
pointed out, no extrinsic evidence in this case would be
admissible because there is no ambiguity whatsoever in the
terms of the agreement and, as also pointed out, the
correspondence prior to the suit when dispute between the
parties arose could be no struck of imagination fall within the
term "surrounding circumstances". It is apparent that having
once taken the stand in the two letter dated 6th February, 1965
and even the letter dated the 14th June, 1965, the only way we
can read the correspondence between the plaintiff and the two
defendants is that the plaintiff is trying desperately to convert
an agreement which is expressly in respect of an office into
one in respect of an open terrace, an effort which is wholly
impermissible under the law of evidence.
32. Mr. Parikh has relied on a decision of the Supreme Court
in Godhra Electricity Co. v. State of Gujarath, . That was a

60
case dealing with the construction of a notification issued
under the Electricity Act, 1912, granting a licence to an
electrical undertaking. The date of the notification of the grant
of the licence was 16th November, 1922. The licence was,
however signed by the licenser on 17th November, 1922 and
the notification was published in the Gazette of 23rd
November, 1922. The licence was for 50 years and one of the
clauses of the licence was said that "the date of the notification
in the Gazette that the licence has been granted was to be the
date of the commencement of the licence". In the notice to
purchases the undertaking served by the Government on 8th
November, 1971, the date of the expiry of the 50 years, period
was specified as 15th November, 1972 obviously because the
licence was assumed to have concerned from 16th November,
1922. It appears that it was contended on behalf of the Electric
Co. that the date of the commencement of the licence should
be taken as 23rd November, 1922 on which date the
notification was published and, therefore, the notice of
purchase was invalid. In that context the Supreme Court
pointed out that when both the parties subsequently say that by
the word or phrase which in the context is ambiguous they
meant a particular thing, it only supplies a glossary as to the
meaning of the word or phrase and the enquiry is to be as to
what the intention of the parties was from the language used.
It was then observed as follows :---

61
"If the meaning of the word or phrase or sentence is clear,
extrinsic evidence is not admissible. It is only when there is
latent ambiguity that extrinsic evidence in the shape of
interpreting statement in which both parties have concurred
should be admissible".
The Supreme Court has pointed out in that case that in the
process of interpretation of the terms of the contract, the Court
can frequently get grant assistant from the interpreting
statements made by the parties themselves or from their
conduct under it. On facts it was held that in that case that the
date of commencement of the licence was 16th November,
1922. Now, when the Supreme Court referred to the
"interpreting statement", these observations did not mean that
a notice issued by one party to another after the disputes with
regard to the contract had already commenced should be taken
as giving an indication as to what the parties intended. It was
found in that case that on earlier occasion when an amendment
to the licence was made the date of the licence was taken as
16th November, 1922 in a Gazette notification by which the
amendment was introduced. It was that kind of interpretation
of the notification that was intended to be referred in Godhra
Electricity Co.'s case as being permissible to be looked into
for the purpose of removing the latent ambiguity. This
decision will not, therefore, be of any assistance to the
plaintiff.

62
33. Mr. Parikh has also relied on the decision in Abdulla
Ahmed vs Animendra Kissen Mitter AIR 1950 SC 15, which
is also relied on by the learned Judge in order to hold that
extrinsic evidence was admissible to show that the agreement
between the parties was in respect of an open terrace. In
Abdulla Ahmed's case, the Supreme Court pointed out that
extrinsic evidence to determine the effect of an instrument is
permissible where there remains a doubt as to its true meaning
and evidence of acts done under it is a guide to the intention of
the parties in such a case and particularly when acts are done
shortly after the date of the instrument. We have already
pointed out that so far as the terms of the agreement are
concerned, there is no doubt at all having regard to the manner
in which the premises agreed to be sold are described. We
have also pointed out that subsequent correspondence between
the parties cannot fall within the description of acts done
under the instrument. The decision in Abdulla Ahmed's case
is, therefore, not of any assistance and, with respect, we may
point out that the learned Judge was not justified in relying on
that decision.
34. The learned Counsel for the plaintiff cited two other
decisions before us. In Balvant Vishnu v. Mishrilal
Shivnarayan, A.I.R. 1925 Bombay 115, the question was
whether the contract was a wagering transaction and in that
context, this Court held that while construing a contract, the

63
Court should land towards a construction favouring the
validity of a contract rather than its illegality. In Sethurama v.
Ramchandra, A.I.R. 1936 Madras 528, the Madras High Court
had observed that in interpreting a document the Court should
place itself in the position of the parties to ascertain in the best
way what was the intention of the parties when they entered
into the transaction. Both these decisions, in our view are
wholly inapplicable to the facts of the present case where we
are called upon to construe a contract, the terms of which are
expressed clearly and in no ambiguous language and such a
contract must be construed on the plain meaning to be given to
the words used by the parties.
35. The next argument of the learned Advocate General was
based on the provisions of section 4 of the Ownership Flats
Act. Section 4 of the Act read as follows :---
"Notwithstanding anything contained in any other law, a
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, before he accepts any sum or
money as advance payment or deposit, which shall not be
more than 20 percent of the sale price enter into a written
agreement for sale with each of such persons who are to take
or have taken such flats, and the agreement shall be registered
under the Indian Registration Act, 1908 and such agreement
shall contain the prescribed particulars; and to such agreement

64
there shall be attached such documents or copies thereof, in
respect of such matters, as may be prescribed."
The learned Advocate-General contended that in order that an
agreement in respect of a purchase of a flat on ownership basis
is valid, it is imperative that the agreement should be
registered as such registration has been made mandatory by
the provisions of section 4. The learned Advocate-General
contended that non-compliance with the provisions of section
4 of the Act will make the agreement unenforceable as it will
be in breach of section 4. Such an agreement, according to the
learned Advocate-General, was not a valid and legal document
at all and no claim for specific performance of such an
agreement would be maintainable in law. At one stage the
learned Advocate-General contended that the effect of
providing that the agreement should be registered under the
Indian Registration Act was to add one more item to the list of
documents specified in section 17 of the Registration Act and,
therefore, the provisions of section 49 of the Registration Act
will be attracted. Later on, however, the learned Advocate-
General did not pursue his argument that to an agreement
which is not registered as required by section 4 of the
Ownership Flats Act, the provisions of section 49 of the
Registration Act would be attracted.
36. Mr. Parikh for the plaintiff has objected that the contention
that an agreement which is not registered in compliance with

65
the provisions of section 4 of the Ownership Flats Act is not a
valid and legal document at all is being raised for the first time
in this Letters-Patent appeal because, according to the learned
Counsel, what was urged before the learned Single Judge was
that the agreement was inadmissible because of the provisions
of section 49 of the Registration Act. Mr. Parikh has invited
our attention to paragraph 20 of the judgment of the learned
Single Judge where the learned Judge has observed that the
contention that the agreement was inadmissible in evidence by
reason of section 49 of the Registration Act was rightly
negatived by the trial Court and that the Counsel for the
second defendant has rightly not pressed the contention at the
hearing. Mr. Parikh has relied on these observations of the
learned Judge and contended that the contention now raised
before us by the learned Advocate-General cannot be allowed
to be raised.
37. Now, it is no doubt true that what was argued before the
learned Single Judge was that for want of registration as
required by section 4 of the Ownership Flats Act, the
agreement in question could not be received in evidence as
required by section 49 of the Registration Act. It is also no
doubt true that Mr. Parikh has pointed out to the proviso to
section 49 of the Registration Act which enables an
unregistered document to be received as evidence of a contract
in a suit for specific performance or as evidence of part

66
performance of a contract for the purposes of section 53-A of
the Transfer of Property Act. That question, however, does not
now arise because the learned Advocate-General has no
pressed his contention based on the provisions of section 49 of
the Registration Act and, in our opinion, rightly so because the
provisions of section 49 of the Registration Act and, in our
opinion, rightly so because the provisions of section 49 of the
Registration Act specifically refer to a document which is
required by section 17 of the Act or by any provision of the
Transfer of Property Act to be registered and admittedly the
requirement in section 4 of the Ownership Flats Act is a
requirement independent of the provisions of section 17 of the
Registration Act or the provisions of the Transfer or Property
Act. It is, however, difficult for us to see how the appellant
can be prevented from arguing that the requirement of section
4 of the Ownership Flats Act is a mandatory requirement and
that if this mandatory requirement of registration is not
complied with, the document cannot be looked at as a valid or
a legal document at all. This is a pure question of law based on
the construction of section 4 of the Ownership Flats Act. The
contentions raised by the learned Advocate-General will,
therefore, have to be considered on merits.
38. So far as the merits of the contention are concerned, Mr.
Parikh has argued that the Ownership Flats Act does not itself
lay down a consequence of non-registration of the agreement

67
registration of which is required by section 4 of the Act. The
learned Counsel contended that having regard to the scheme
and object of the Ownership Flats Act, it was clear that the
provisions in section 4 of that Act were made for the benefit of
the purchaser of the flats. It was pointed out that the obligation
to have the document registered is on the promoter and the
penalty for breach of the provisions of section 4 is also to be
levied on the promoter under section 13 of the Act. The
learned Counsel, therefore, contended that since there is no
obligation under section 4 of the purchaser to have the
document registered, the document cannot be treated as void.
The learned Counsel further contended that holding the
agreement for sale of a flat to be void because it is not
registered would defeat the very object of the Act which is to
protect the purchaser of flats. It was argued by the learned
Counsel that treating the document as void would really place
a premium on the negligence of the promoter and it will be he
who will stand to benefit by not getting the agreement
registered if it is treated as void. The learned Counsel,
therefore, contended that as between the parties, the agreement
must be treated as good and binding.
39. A careful reading of the provisions of section 4 of the
Ownership Flats Act will show that it begins with a non
obstante clause. Section 4 requires the promoter to enter into a
written agreement of sale each of the persons who are to take a

68
flat or flats on ownership basis before the promoter accepts
any money as advance payment or deposit. By enacting
section 4 the Legislature has also restricted the quantum of
advance payment or deposit and a promoter cannot advance
payment or deposit of more than 20% of the sale price.
Section 4 of the Ownership Flats Act further provides that "the
agreement shall be registered under the Indian Registration
Act, 1908." It further prescribes details of the particulars
which the agreement is to contain. Section 4 also requires that
such documents or copies thereof as may be prescribed shall
be attached to the agreement. Rules have been made under the
Act and Rule 5 of the rules which are described as "The
Maharashtra Ownership Flats Rules, 1964" specific the
particulars which are to be stated in the agreement. Rule 5
reads as follows :---
5. "Particulars to be contained in agreement for sale.---The
agreement for sale referred to in section 4 shall, inter alia,
contain the following particulars namely :---
(a) if the building is to be constructed, the liability of the
promoter to construct it according to the plans and
specifications approved by the local authority where such
approval is required under any law for the time being in force;
(b) the date by which the possession of the flat is to be handed
over to the purchaser;

69
(c) the price to be paid by the flat purchaser and the intervals
at which instalments thereof may be paid;
(d) the precise nature of the organisation to be constituted of
the persons who have taken or are to take the flats".
Rule 6 prescribes the documents copies of which are to be
attached to the agreement. These copies are :---
(a) the certificate by an attorney-at-law or Advocate under
Clauses (a) of sub-section (2) of section 3;
(b) the plans and specifications of the flat to be sold.
Section 3(2)(a) referred to in Rule 6 requires that the promoter
shall "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." If the requirements of section 4
are thus looked at, it will be clear that the object of the
Legislature in enacting the provisions of section 4 is to ensure
that there are genuine agreements or sale in respect of flat or
flats to be taken on ownership basis and the further object
appears to be that there will be notice to any prospective
purchaser of flats of any earlier agreement of sale of the flat
which he intends to purchase because registration of an
agreement will be sufficient notice to an intending purchaser
who would want to ensure that the flat which the promoter is
agreeing or contracting to sell to him is not already the

70
subject-matter of any agreement for sale with any of the
purchaser. The requirement as to the particulars specified is
Rule 5 and to the documents which are attached to the
agreement also will show that the Legislature was anxious to
protect the interests of the purchasers. Once the plans are
attached to the agreement and a certificate as to the title of the
promoter to the land on which the building is to come up is
ensured, the promoter will be bound to construct according to
the plans attached to the agreement and it will be ensured that
the purchaser will be delivered possession of same premises
which he had contracted to purchase. The particulars refer to
the date by which the possession of the flat is to be handed
over as also the price which is to be paid by the flat purchaser
and the intervals at which instalments thereof may be paid.
40. If we carefully read the provisions of section 4, it will be
noticed that a negative language is used in respect of the
amount of advance payment or deposit which the promoter is
entitled to receive. At other places, the Legislature has used
the word 'shall' and so far as the agreement is concerned the
provisions will read that "a promoter......shall.......enter into a
written agreement for sale......" and "the agreement shall be
registered under the Indian Registration Act" and "such
agreement shall contain the prescribed particulars."
41. Normally when in a statutory provision the word 'shall' has
been used, it would be construed as a mandatory provision,

71
but there may be cases where even though the word 'shall' has
been used by the Legislature, on a proper construction the
provision may be found to be directory in nature. It is true that
so far as section 4 is concerned, there is no provision which
sets out the consequence of non-compliance with the
provisions of section 4. Section 13, which deals with the
penalty for failure to comply with or contravention by a
promotor of the provisions of the Act, provides as follows :---
13. "Any promoter who, without reasonable excuse, fails to
comply with or contravenes any provisions of this Act, or of
any rule made thereunder shall where no other penalty is
expressly provided for, on conviction, be punished with
imprisonment for a term which may extend to one year or with
fine which may extend to two thousand rupees, or with both;
and a promotor who commits criminal breach of trust of any
amount advanced or deposited with him for the purposes
mentioned in section 5 shall, on conviction, be punished with
imprisonment for a term which may extend to four years, or
with fine, or with both."
By this provision non-compliance or contravention of any
provision of the Ownership Flats Act or any rule made
thereunder shall make the promoter liable, on conviction, to
punishment with imprisonment for a term which may extend
to one year or with fine which may extend to Rs. 2000/- or
with both where no other penalty is expressly provided for.

72
Though section 13 creates non-compliance or contravention of
a provision of the Act a penal offence, there does not appear to
be any provision in the Act itself which provides that the
agreement, if it is not in compliance with the provisions of
section 4, shall be void.
42. Mr. Parikh was relying on this circumstance of the absence
of any provisions specifying the effect of non-compliance in
order to contend that as between the plaintiff and the
promoter-defendant No. 1, the agreement must still be treated
as valid and enforceable.
43. It is no doubt true that section 4 uses an affirmative
language and is not couched in negative language which
normally is used in a mandatory or imperative provision.
There is, however, enough evidence in the section itself to
indicate that the provision of section 4 is mandatory in
character. An agreement for sale of immovable property need
not necessarily be in writing nor is it one of the documents
which under section 17 of the Registration Act is required to
be registered. Notwithstanding the law that an agreement in
respect of immovable property need not be registered, section
4 provides that the agreement shall be a written agreement and
the agreement shall be registered. Section 4 appears to us to be
really in four parts and the non obstante clause will govern the
first three parts of the section. The first part of the section
omitting the positive prohibition of not accepting more than

73
20% of the sale price requires that notwithstanding anything
contained in any other law, a promoter shall "enter into a
written agreement of sale" The second part with regard to the
registration will show that "notwithstanding anything
contained in any other law,.........the agreement shall be
registered under the Indian Registration Act, 1908." These are
the two principal parts of the section which will be governed
by the non obstante clause. Thus inspite of the fact that under
the general law an agreement of sale of immovable property is
not required to be registered, under the Ownership Flats Act it
is specifically required to be registered.
44. It will be proper at this stage to deal with the argument of
Mr. Parikh that the obligation is on the promoter alone and
that the purchaser may not be able to get the agreement
registered. It is no doubt true that primarily it is for the
promoter to have the agreement registered. But if the
provisions of section 4 are read with the provisions of the
Registration Act, it does not appear to us that the purchaser is
helpless in a case where the promoter declines to have the
agreement of sale registered. Section 4 uses the words "the
agreement shall be registered under the Indian Registration
Act." By the use of the words "under the Indian Registration
Act" it is clear that the mechanics of registration or the
procedure for registration as provided by the Registration Act
will automatically be attracted. The provisions which will be

74
attracted will be those in Part IV to Part VII of the
Registration Act. Part IV (sections 23 to 26) deals with the
time of presentation. Part V (sections 28 to 31) deals with the
place of registration. When we come to part VI of the
Registration Act, we find that under section 32(a) a document
can be presented for registration by a person executing a
document or a person claiming under the document.
Therefore, if a promoter declines or avoids to get a document
registered, it will be perfectly permissible for the person
claiming under the document, namely, the purchaser to present
it for registration.
45. Now the question which has to be decided is whether
merely because no provision as to the consequence of non-
compliance with section 4 of the Act is made in the Ownership
Flats Act, the provisions of section 4 should be construed as
directory and not mandatory.
46. It is well established that no general rule can be laid down
to decide whether a provision is directory or mandatory. "No
universal rule," said Lord Campbell L.C.," can be laid down
for the construction of statutes, as to whether mandatory
enactments shall be considered directory only or obligatory
with an implied nullification for disobedience. It is the duty of
Courts of Justice to try to get at the real intention of the
Legislature by carefully attending to the whole scope of the
statute to be construed." (See Maxwell on The Interpretation

75
of Statutes, 12th edition, page 314). The learned author has
further pointed out that where the whole aim and object of the
Legislature would be plainly defeated if the command to do
the thing in a particular manner did not imply a prohibition on
doing it in any other manner, no doubt can be entertained as to
the intention. (See Maxwell on the Interpretation of Statutes,
12th edition, pages 315-316).
47. Dealing with absolute and directory enactments, Craies
has observed as follows :---
"When a statute is passed for the purpose of enabling
something to be done, it may be either what is called an
absolute enactment, or a directory enactment, the difference
being, as explained in Wood-Word v. Sarsons (1875 L.R. 10
C.P. 733, 746), that 'an absolute enactment must be obeyed or
fulfilled exactly, but it is sufficient if a directory enactment be
obeyed or fulfilled substantially'; i.e. that the act permitted by
an absolute enactment is lawful only if done in accordance
with the conditions annexed to the statutory permission."
(See Craies on Statute Law, 17th Edition, page 260). The
learned author dealing with the inference to be drawn from
affirmative language used in a statute has quoted the following
rule at page 264:
"Every statute limiting anything to be in one form, although it
be speak in the affirmative, yet includes in itself a
negative;.....if an affirmative statute which is introductive of a

76
new law direct a thing to be done in a certain way, that thing
shall not, even if there be no-negative words, be done in any
other way."
At page 269 the learned author observes :---
"If the object of a statute is not one of general policy, or if the
thing which is being done will benefit only a particular person
or class of persons, then the conditions prescribed by the
statute are not considered as being indispensable."
Where, therefore, there is no provision laying down a
consequence of non-compliance with another provision, we
must look at the policy of the act and the intention of the
Legislature in enacting a particular provision.
48. The tests referred to above have also been laid down by
the Supreme Court in a series of cases and it is sufficient for
our purpose to refer to the decision in State Of Mysore & Ors
vs V. K. Kangan & Ors AIR 1975 SC 2190. In paragraph 10
of the judgment, the Supreme Court has observed as follows :-
"In determining the question whether a provision is mandatory
or directory, one must look into the subject-matter and
consider the importance of the provision disregarded and the
relation of that provision to the general object intended to be
secured. No doubt, all laws are mandatory in the sense they
impose the duty to obey on those who come within its
purview. But it does not follow that every departure from it
shall taint the proceedings with a fatal blemish. The

77
determination of the question whether a provision is
mandatory or directory would, in the ultimate analysis, depend
upon the intent of the law-maker. And that has to be gathered
not only from the phraseology of the provision but also by
considering its nature, its design and the consequences which
would follow from construing it in one way or the other."
49. We must, therefore, bear these tests in mind while
deciding the question as to whether section 4 is mandatory in
character or not. The very purpose of the act is, as already
pointed out, to prevent malpractices rampant in the business of
construction of flats which were sold to intending purchasers
on ownership basis. In order to prevent such malpractices
which were increasingly being practised, according to the
Legislature, the Ownership Flats Act was made to regulate the
activities of promotion of the construction of, the sale and
management and transfer of flats taken on ownership basis. If
this be the object of the Legislature in enacting the provisions
of the Ownership Flats Act, then it is obvious that section 4 is
a salutary provision intended to prevent any bogus sales and it
was also intended to safeguard the interests of the purchasers.
As a matter of fact, it was a part of public policy to see that
people are not cheated has been specifically required to be
made in writing, the amount of the advance deposit has been
restricted, the agreement is required to be registered and the
agreement has to contain such details as are necessary to

78
ensure that the purchaser gets a flat in accordance with what
he had bargained for and with a clear title in respect of the
property. If section 4 is not held to be mandatory, one of the
important purpose of the act will be defeated inasmuch as the
purchasers will be at the mercy of the promoter, if he cannot
insist upon all the necessary details with regard to the intended
purchase of flat and if he wants to avoid any further disputes,
he cannot insist upon a written agreement of sale which has to
be registered. On a careful scrutiny of the provisions of section
4 of the Ownership Flats Act, therefore, we are inclined to
take the view that section 4 contains an absolute enactment
which must be obeyed absolutely. If such absolute enactment
is not obeyed, the consequence will be that the agreement
between the promoter and the purchaser will be wholly invalid
and altogether void creating no rights between the parties. It is
no doubt true that in a given case, it will be the intending
purchaser who might suffer if he connives at the failure of the
promoter not to have the agreement registered, but for that, the
intending purchaser will himself have to be blamed because
there is enough provision in the Registration Act which will
enable the intending purchaser to have the document
registered.
50. Once section 4 is held to be mandatory and the
consequence of non-compliance with the provisions of section
4 will be to invalidate the transaction, there is no question of

79
such a transaction being binding between the parties. It is not,
therefore, necessary to refer to two decisions which Mr. Parikh
has relied upon in support of the contention that the agreement
must be treated as binding between the parties. These decision
are Bhikanbhai v. Hiralal, I.L.R. 24 Bombay, 622,
and Nazaralli Sayed Imam v. Babamiya Duroyatimaba,
I.L.R. 40 Bombay 64.
51. In the view which we have taken, it is also not necessary to
discuss the two decisions of the Supreme Court on which Mr.
Parikh has relied in support of his contention that section 4 of
the Ownership Flats Act should be construed as directory. In
H.N. Rishbud v. State of Delhi, [1955] 1 S.C.R. 1150, the
Supreme Court has observed that there is no universal rule to
aid in determining whether mandatory enactments shall be
considered directory only or obligatory with an implied
nullification for disobedience. It is the duty of the Court to try
to get at the real intention of the Legislature by carefully
attending to the whole scope of the statute to be construed. In
State Of U. P vs Manbodhan Lal Srivastava, AIR 1975 SC
912, it was pointed out that the use of the word 'shall' in a
statute, though generally taken in a mandatory sense, does not
necessarily mean that in every case, it shall have that effect,
that is to say, that unless the words of the statute are
punctiliously followed, the proceeding or outcome of the
proceeding, would be invalid.

80
52. Having taken the view that the provisions of section 4 are
mandatory and the agreement was, therefore, statutorily
required to be registered the plaintiff cannot found any rights
on such an agreement and the agreement must be treated as
invalid and ineffective.
53. The next contention raised by the learned Advocate-
General was that the agreement must be treated as void having
regard to the provisions of section 56 of the Contract Act. The
first paragraph of section 56 provides that an agreement to do
an act impossible in itself is void. The learned Advocate-
General contended that having regard to the fact that under
section 7(1) Clause (ii) of the Ownership Flats Act since an
additional structure could not be constructed without the
consent of the other flat owners, that is, the appellant-
company, the agreement to sell an office room was void. It is
not necessary for us to consider this agreement in detail, but it
does appear that at the time when the agreement was made,
the consent of the other flat owners who had later constituted
themselves into the appellant-company was not at all taken
and defendant No. 1 could not have, therefore, constructed any
additional structure at all. Indeed such a construction was
impossible and the agreement would, therefore, be hit by
section 56 of the Contract Act.
54. Strictly speaking the findings recorded by us are sufficient
to decide the appeal. The learned Advocate-General has,

81
however, argued that the facts in this case are much too
eloquent to lend to any other conclusion except that the
agreement was a sham and bogus one. Now, we have
proceeded so far on the footing that the agreement was a
genuine agreement to sell and we had already earlier
mentioned that the plea of bogus and sham agreement was not
given up. Normally, the finding recorded by both the courts
below that the agreement was not a bogus or a sham
agreement would have become a finding of fact. It, however,
appears from the judgments of the two courts below that both
the courts have negatived the contentions of the appellant with
regard to the requirements of section 4 and section 7 of the
Ownership Flats Act. We have already hold that the appellant
was entitled to plead the invalidity of the agreement in the
light of the provisions of sections 4 and 7 of the Ownership
Flats Act. Now, when these findings are recorded in favour of
the appellant, the plea of bogus and sham transaction will have
to be considered in that perspective. The learned Single Judge
has no doubt given certain reasons which we have earlier
referred to namely, with regard to the financial capacity of the
plaintiff of the plaintiff as well as the relationship of master
and servant between the plaintiff and defendant No. 1 and the
failure of the plaintiff to pay either share amount or ground
rent or maintenance charges in respect of the property in
dispute. Notwithstanding the findings on these points, it

82
appears to us that the view which we have taken on the
provisions of sections 4 and 7 of the Ownership Flats Act will
have a serious impact on the question as to whether the
transaction in question was a genuine transaction or not. We
have already referred to the admission of the plaintiff that he
was in the employment of defendant No. 1 and that he was
looking after legal matters as well as matters connected with
Municipal Corporation of Greater Bombay. Ishwardas has
deposed that he had told the plaintiff that there was no F.S.I.
and that the entire F.S.I. had been exhausted. But, according to
Ishwardas, the plaintiff had told him that he would manage
with the Corporation. The fact that the plaintiff was dealing
with the Corporation on behalf of defendant No. 1 would show
that he was familiar with matters relating to construction of
flats and buildings. It is difficult even to comprehend that a
person who is so closely connected with the building in
question that he would enter into an agreement of sale in
respect of office premises for the construction of which there
was no scope at all. The evidence of Ishwardas that he had
told that there was no F.S.I. left has not been challenged, nor it
the case of the plaintiff in evidence that there was sufficient
F.S.I. available to enable a construction of an office room. In
these circumstances, it is difficult to hold that the transaction
was a genuine transaction.

83
55. Mr. Parikh has, however, pointed out that the genuineness
of the transaction was apparent from the fact that the
defendant No. 1 had agreed to refund Rs. 5000/- which are
shown to have been received as advance money in the
agreement of sale. The contention appears to be that if the
transaction was really not a genuine transaction, defendant No.
1 would not have gone to the extent of depositing that amount
in Court.
56. Now, it is no doubt true that when the notice of
cancellation of the agreement was served on 30th March,
1965, defendant No. 1 sent a cheque of Rs. 5000/- along with
the notice of cancellation. Now, it is difficult for us to see how
this conduct of defendant No. 1 can be used against the
appellant to meet the contention that the agreement was a
sham and bogus transaction. Even if a sham and bogus
transaction to create a difficulty in the way of the appellant
had to be put up as between the plaintiff and defendant No. 1,
each of them had to put forth the transaction as a genuine one.
defendant No. 1 was a promoter and having taken a stand
earlier with regard to the transaction that it was genuine, it
would not have been possible for defendant No. 1 to take a
somersault and take a stand that the transaction was a bogus
one, which would clearly have landed him into difficulties.
Therefore, the mere fact that defendant No. 1 volunteered to
send the cheque for Rs. 5000/- by way of refunding the

84
amount alleged to have been received was no guarantee of the
genuineness of the transaction. Having record to the
knowledge of the plaintiff in respect of the building which was
fully constructed and to the fact that there was no further
scope for construction, it is obvious that the plaintiff and
defendant No. 1, who were closely associated with each other,
had entered into a transaction which could not be called a
genuine transaction.
57. In the view which we have taken, we must hold that the
trial Court and the learned Single Judge were in error in
decreeing the plaintiff's suit for specific performance. The
judgment and decree passed by the trial Court as confirmed by
the learned Single Judge is, therefore, set aside and the
plaintiff's suit is dismissed with costs. The appeal is allowed
with costs throughout.
58. The Counsel for the plaintiff-respondent No. 1 applies for
leave to appeal to Supreme Court. We do not think that this is
a matter in which a certificate of fitness under Article 133 of
the Constitution of India can be granted. The provisions of
sections 4 and 7 have been constructed on their plain terms
and we do not think that any other construction is possible
having regard to the subject of the Act. Application for leave
is rejected.
59. The amount of Rs. 10,000/- in fixed deposits made at the
instance of the appellant shall be refunded to the appellant.

85
Bombay High Court
Neena Sudarshan Wadia (Smt.) vs Venus Enterprises on 9
February, 1983
Equivalent citations: 1984 (2) BomCR 505
Bench: R Aggarwal
JUDGMENT
R.A. Aggarwal, J.
1. Both these appeals involve chiefly the interpretation of the
provisions of section 7(1)(i) and (ii) of the Maharashtra
Ownership Flats (Regulation of the Promotion of
Construction, Sale, Management and Transfer) Act, 1963
(hereinafter referred to as "the said Act") and the relevant rules
made thereunder in 1964, and therefore, they have been heard
together and can be disposed of by a common judgment along
with the subsidiary points.
2. In Appeal No. 575 of 1982 from Order a learned Judge of
the Bombay City Civil Court has construed the provisions of
section 7(i) and (ii) of the said Act against the flat-owner i.e.
the plaintiff and in favour of the promoter i.e. the defendants,
while in Appeal No. 875 of 1982 from Order another Judge of
the Bombay City Civil Court has held in favour of the flat
owner and against the promoter.
3. Facts in Appeal No. 575 of 1982 from order.
Briefly stated, the plaintiff purchased from the defendants Flat
No. 503 in 'Jaldarshan' situated at Cimbai, Bandra, Bombay,

86
for a consideration of Rs. 1,23,200/-. The defendants showed a
sanctioned plan dated 17th April, 1978 to the plaintiff, on the
basis of which the defendants were to construct a seven-
storeyed building with shops on the ground floor. Thereafter,
the plaintiff booked flat No. 503 on the fifth floor of the
proposed building and made various payments. The
defendants by their letter dated 25th June, 1979 addressed to
the plaintiff confirmed having sold flat No. 503 in 'Jaldarshan'
at a price of Rs. 1,23,200/- and recorded the receipt of the
three payments aggregating to Rs. 31,000/-. As the
construction work proceeded, the defendants called upon the
plaintiff to make further payments and she accordingly paid in
all a sum of Rs. 1,26,000/- inclusive of security deposit etc.
The occupation certificate was issued by the Bombay
Municipal Corporation on or about 20th December, 1980.
Thereafter, the defendants had put the plaintiff in possession
of the said flat. The plaintiff contended that once a sanctioned
plan for seven-storyed building and 14 shops on the ground
floor was shown at the time of the purchase and various flat-
owners have purchased the respective flats on the basis of that
sanctioned plan dated 17 the April, 1978, it was not open to
the defendants to construct additional structures without the
previous consent of all the persons who had agreed to take the
flats. Her case is that at no time her consent was obtained by
the defendants and hence the action of the defendants in

87
putting up additional construction or structures is in
contravention of the provisions of the said Act. The plaintiff
further stated that 16 flat owners had filed a suit against the
defendants for the same relief and, therefore, she awaited for
the decision in that suit. It is in these circumstances that the
plaintiff approached the Court for a permanent injunction to
restrain the defendants from construction additional structures
and for mandatory injunction directing the defendants to
demolish the additional structures constructed by the
defendants without the consent of the plaintiff, and for other
interim reliefs. The plaintiff also took out a Notice of Motion
for interim relief and in the affidavit in support made by her
husband Sudershan Wadia as her constituted attorney, she
reaffirmed the statements made in the plaint.
4. On behalf of the defendants, their partners filed an affidavit
in reply taking up various legal contentions, to which
reference will be made hereafter. But on merits, it was
contended that the plaintiff does not have the agreement for
sale of the flat as required by the mandatory provisions of
section 4 of the said Act. Therefore, in the absence of any
written agreement duly registered as required by section 4, the
agreement between the plaintiff and the defendants is wholly
invalid and altogether void creating no rights in favour of the
plaintiff. This submission was based on a decision of the
Division Bench of this Court in the case of the Association of

88
Commerce House Block Owners' Ltd. v. Vishndas Samaldas,
(1981) 83 Bom.L.R. 339 (hereinafter referred to as
"Commerce House Owners, case"). It was pointed out that
following the said decision the Bombay City Civil Court had
dismissed all the Notices of Motion for interim reliefs taken
out in various suits filed by those who had agreed to purchase
the flats from the defendants. Reference was made to Notice
of Motion No. 5629 of 1981 in Bombay City Civil Court Suit
No. 6788 of 1981 and the judgment dated 18th December,
1981 dismissing the said Notice of Motion. The defendants,
therefore, submitted that the present Notice of Motion was
also liable to be dismissed. With regard to the allegations in
the plaint and the affidavit in support for the limited purpose
of the present Notice of Motion, the defendants contended that
the plaintiff's husband Sudarshan Wadia came to the
defendants' office and was introduced as an investor by a
common friend one O.P. Kapila. The plaintiff's husband
wanted to keep two flats, flat No. 502 in the name of his father
and flat No. 503 in the name of his wife. The defendants
further contended that in December 1978 the said Sudershan
Wadia again came and he was shown proforma of the
agreement which the defendants had got prepared for entering
into with various persons to whom the defendants might agree
to sell flats in the said building. The said Sudarshan approved
the said agreement and agreed to all the terms and conditions

89
thereof). supplied). The plaintiff's husband was told that two
separate agreements would have to be signed for the two flats.
The plaintiff's husband, however, told him that he was an
officer of the Government of India working in the Customs
Department and since he would not be in a position to account
for the investments being made by him in the name of his
father and wife, the defendants should not insist on signing the
agreements. He further stated that he would be re-selling the
flats and making profit and nothing would therefore come on
record. Therefore, on the request of the plaintiff's husband, no
agreements were signed but two typed letters were issued to
him for the flats booked by him. Later on, he informed the
defendants that he had decided to come and stay in flat No.
502 himself and hence the agreement for the said flat be made
in the name of his father. Accordingly, the agreement in
respect of flat No. 502 was duly prepared, averred the
defendants in paragraph 14 of the affidavit, and signed on 21st
April, 1979. The defendants relied upon the said agreement
which was duly executed after it was approved by the
plaintiff's husband. Thereafter, the plaintiff's husband took
possession of flat No. 502 some time in May 1981 and he
along with the plaintiff has been staying in flat No. 502. The
defendants denied that they had put the plaintiff in possession
of flat No. 503. In this connection, the defendants' case, as set
out in paragraph 18 is that the plaintiff's husband had taken the

90
suit flat No. 503 for the purpose, of re-selling the same and
hence at his request all the formalities of executing the
agreement, giving possession and signing papers therefore
were kept pending. The plaintiff's husband had approached the
deponent of the affidavit in reply on several occasions for
giving him one of the keys of flat No. 503 as and when he
wanted to show the same to a prospective purchaser or a
broker and at his request instructions were given to the site
supervisor, R. Shukla who used to give him one of the keys of
the latch of outer door of flat No. 503, which the plaintiff's
husband used to return after showing the flat to the
prospective purchasers. In or about the last week of May 1982,
the plaintiff's husband requested the said R. Shukla to give
him the key of the said flat for showing it to a prospective
buyer and accordingly the said Shukla gave him one of the
keys. The plaintiff's husband, however, did not return the key
and after the notice of the filing of the present suit was given
to the defendants by the plaintiff's Advocate, it was found that
the plaintiff's husband had put up a lock on the Aldrop of the
main door of flat No. 503. Thus, according to the defendants,
flat No. 503 is vacant and unoccupied and that the possession
thereof has not been given to the plaintiff and the same is still
in the possession of the defendants. The defendants denied
that the plans of the building were at any time seen by the
plaintiff. According to the defendants, a sum of Rs. 1.24.700/-

91
was paid towards flat No. 503 and further amounts remain
payable on possession. With regard to the proforma agreement
approved by the plaintiff's husband, as averred in paragraph 20
of the affidavit, the defendants' case that they have a right to
make any additions or alterations in the structures as
mentioned in the said agreement and the said terms are
binding on the plaintiff. The work of putting up the additional
structures was commenced in July 1981 and in law the
defendants are entitled to put up the same. The structures are
put up above the shop in a wing and that wing is different
from the one in which flat No. 503 is situate. According to the
defendants, they have got every right to put up the said
structures as per the plans duly approved by the Municipal
Corporation of Greater Bombay. The structures are on the
other columns and as such there is no change whatsoever in
the existing structures.
5. It may be mentioned that the affidavit in support of the
Notice of Motion was made by the plaintiff's husband
Sudarshan Wadia as her constituted attorney. He made an
affidavit in rejoinder. He referred to some new facts, namely,
about the statement made on behalf of the defendants in the
Bombay City Civil Court Suit No. 6788 of 1981 at the time of
hearing of the Notice of Motion therein, that the additional
construction on shops Nos. 8 to 14 was restricted only to two
the additional floors, for which alone the Municipal sanction

92
had been obtained. Contrary to that statement, the defendants
started putting up additional structure on the third floor in the
second week of June 1982. With regard to the allegations
about the booking of the two flats the plaintiff's husband stated
that both his wife and his father have independent source of
income and payment in respect of their respective flats had
been made by them by cheques and that the defendants have
indulged in these allegations to create prejudice. He denied the
allegations about the circumstances in which, according to the
defendants, he had taken possession of flat No. 503 and
submitted that towards the end of November 1981 the plaintiff
was put in possession of the said flat by the defendants. The
defendants thereafter forwarded to the plaintiff bills claiming
maintenance and other charges.
6. The defendants have made an affidavit in surrejoinder, in
which reliance is placed on the two permissions given by the
Municipal Corporation, one under I.O.D. dated 6th July, 1981
for construction of two additional floors and the other under
I.O.D. dated 6th May, 1982 for construction of another two
additional floors.
7. Facts in Appeal No. 875 of 1982 from Order :
In this matter, the plaintiffs are the flat-owners. The building
constructed by the defendants is know as "Kunjan
Apartments". This Kunjan Apartments consists of ground and
four upper floors and there are in all 21 flats including of those

93
persons who get the flats as alternative accommodation to
their existing tenements. Six of the flat owners have filed the
present suit. Their case is that the defendants have completed
the construction of the building on the said land bearing C.T.S.
No. 644 and put the acquires of the various flats in possession.
According to the plaintiffs, the defendants handed over the
management of the said building and the and to the various
acquirers of the flats and/or the tenements in the said building
and confirmed the same by their letter dated 23rd December,
1980, Ex. A to the plaint. According to the plaintiffs, since
then they and other acquirers of the flats in the said building
are managing the affairs of the said building. The plaintiffs
also referred to the agreement of sale to the said land executed
by the defendants with the various acquirers of the flats and/or
tenements in the said building. It is the plaintiffs' case that the
acquirers of the flats and/or tenements in the said building
have formed a committee consisting of the plaintiffs and
authorised them to manage the affairs of the said building in
the land. According to the plaintiffs, since 23rd December,
1980, the defendants were left with no right title and interest
in the said land, save and except the obligations to form a co-
operative society of the acquirers of various flats and/or
tenements in the said building and/or to convey the said land
with the said building. The plaintiffs alleged that the
defendants in collusion and/or connivance with the Municipal

94
Corporation officers had succeed in getting some plains for
construction of two garages sanctioned on the said land
bearing C.T.S. No. 644. On or about 9th July, 1982, the
defendants slumped some building materials on a portion of
the said land. On 10th July, 1982, some workers were sent by
the defendants and they have started digging operation on the
said land and on enquiries from the said labourers the
plaintiffs learnt that the defendant had got sanction for
construction of two garages in the said land. The plaintiffs
were shocked and surprised to get the said information and
they immediately attempted to contract the defendant but
failed in their attempts. The plaintiffs, therefore, by their
Advocates's letter dated 11th July, 1982 addressed to the
defendants complained against the said high-handed action on
the part of the defendants. The plaintiffs further pointed out
that the possession of the said building having been given to
the occupants of the said flats and the building having been
constructed and completed according to the sanctioned plans,
the defendants were not entitled to construct any structure on
the said land including the said garages without the consent of
the plaintiffs and that none of the occupants of the flats were
interested in acquiring the garages. It was learnt that the
defendants were contemplating to dispose of the said garages
to some outsider who would be utilising the same for
commercial purposes. It was further stated that even according

95
to the agreement entered into between the defendants and the
acquirers of the flats, there was no covenant with regard to the
defendants being entitled to construct any garages on the said
land. The plaintiffs further stated that the defendants were not
entitled to construct and/or let the said garages for being
utilised for any purpose other than parking a motor vehicle.
The plaintiffs also contended that the defendants have handed
over the possession of the said land and the building and the
management thereof to the plaintiffs and, therefore, they are
not entitled to construct any structure without the previous
consent of the plaintiffs. It was also contended that no plans
can be amended and/or no additional construction can be
availed by the defendants without the prior consent or
permission of the plaintiffs and other acquirers of the flats
and/or tenements in the said building as per the provisions of
the Maharashtra Ownership Flats (Regulation of the
Promotion of Construction, Sale, Management and Transfer)
Act, 1963 (hereinafter referred to as "the said Act") and the
Rules made thereunder.
8. The defendants' case is set out in their affidavit in reply to
the Notice of Motion. According to them, they are
constructing two garages on the said land after obtaining
sanction from the Municipal Corporation of Bombay on 7th
March, 1981. The defendants rely upon Clause 34 of the
agreement for sale and according to them, under that clause

96
they have a right to make additions and alterations as may be
permitted by the Bombay Municipal Corporation and other
competent authorities. The defendants have constructed one
building i.e. the suit building, and with regard to the remaining
building the defendants are negotiating with the tenants to
vacate the occupied land to enable the defendants to consume
full available balance F.S.I. by constructing the second
building on the said land. As soon as the construction of the
second building on the said land is over, the defendants will
execute conveyance in favour of the proposed society. Till
then the defendants were and are the absolute owners of the
entire property. According to the defendants, merely the
management of the 21 flats is given to the Committee as per
the letter dated 23rd December, 1980. The defendants have
denied that they have handed over the possession of the said
land and the building and the management thereof to the
plaintiffs. The defendants inter alia deny that the garages
cannot be constructed around a building and let out and/or
sold to any strangers or outsiders not occupying any portion of
the said building and/or the land as alleged. The defendants
also deny that they are not entitled to construct any structure
on the said land without the previous consent of the plaintiff.
9. The plaintiffs made an affidavit in rejoinder. According to
them, the agreements have been entered into by the defendants
with the occupiers only after handing over possession of the

97
respective flats and it was represented to the plaintiffs that the
said agreements were on usual terms. The plaintiffs have thus
signed and executed the said agreements on the said assurance
and without reading the contents of the same.
10. Decision of the lower Court appealed against in A.O. No.
575 of 1982.
In view of the fact that the plaintiff did not have an agreement
in writing for sale of the suit flat, the learned Judge Shri Cazi
did not accept her case that she had become owner of flat No.
503. According to the learned Judge the plaintiff could not
have become the owner of immoveable property of the value
of more than rupees one hundred without any conveyance in
her favour by the defendants, and as there is no conveyance of
the property by the defendants, the title of the defendants has
not passed either to the society or to the plaintiff. With regard
to the provisions of section 7 of the said Act, the learned Judge
took the view that the agreement that is referred to in section 7
is the one which under section 4 of the said Act has to be a
written agreement and that written agreement has to be
registered under the Indian Registration Act, 1908. But in the
present case, the plaintiff does not have any written agreement
for sale of the flat and if the plaintiff is relying upon any oral
agreement or any unregistered written agreement for sale of
the flat to her, such agreement would be totally void as held in
Commerce House Owners' case. Further, section 7

98
contemplates previous consent of these parties who have
properly registered agreements in their favour and since it is
not the case of the plaintiff that there are other persons who
have properly registered agreements in their favour, the
question of the defendants action being contrary to the
provisions of section 7 of the said Act did not arise. On the
question of delay in taking out the present proceedings, the
learned Judge held in favour of the defendants. For these
reasons, the Notice of Motion was dismissed.
11. Decision of the lower Court appealed against in A.O. No.
872 of 1982.
The learned Judge Shri Ratnaparkhi accepted the contention of
the plaintiff that the defendants could not raise additional
structure without the previous consent of all the purchasers as
provided under section 7(1) of the said Act. The learned Judge
rejected the contention of the defendants based on the
provisions of Clause 34 of the agreement which did not speak
about the express consent to a particular act, but contemplated
a blanket consent without knowing what the fact is. The
agreement in question was executed on 5th December, 1979.
At that time, the plans sanctioned by the Municipal
Corporation showed that there were no garages and only some
open space was kept for parking the cars and it was not clear
from the record as to when this idea of constructing garages
struck the mind of the defendants, because it was not a

99
subject-matter of the original plan and it must have struck the
mind of the defendants some time thereafter. However, in
December 1979, a blanket consent was obtained from all the
intended purchasers that they would grant their consents to all
the actions of the builders, whatever the nature thereof would
be. Thus, according to the learned Judge this was a consent
without knowing the nature of the Act. What section 7
contemplates is a free consent by the purchasers to a particular
act of which they are conscious, and therefore, the consent
referred to in Clause 34 of the agreement is a blanket authority
given to the Builder and is not a consent contemplated under
section 7 of the said Act. The defendants submitted the plans
on 7th March, 1981, and the same were sanctioned on 26th
November, 1981 and, therefore, such a consent could not be
fastened on the plaintiffs without the knowledge of such a
plan. Since the construction of the garages was not shown in
the plans which were got approved by the defendants and
never contemplated or asked for at the beginning, the consent
embodied in Clause 34 of the agreement could not be a
substitute for the consent contemplated under section 7(1) of
the said Act.
Submission in both matters :
12. The first matter, A.O. No. 575 of 1982 was argued in
person by Shri Sudharshan Wadia, the husband of the plaintiff.
He contended for sale envisaged under section 4 in respect of

100
the flat purchased by the plaintiff and its registration under the
Indian Registration Act, 1908, as mentioned section 4 does not
debar the plaintiff from preventing the defendant promoters
from contravening the provisions of section 7, by constructing
additional structures without the previous consent of the
plaintiff. The submission was that after a promoter has
disclosed or furnished to a purchaser of the flat the plans and
specifications of the flat and the building, the promoter has not
right either to make alterations in the float without the
previous consent of the purchaser concerned or to make any
alterations in the structures of the building or construct
additional structures without the previous consent of all the
persons who have purchased the flats, it was also submitted
that in the present case, the building has been constructed as
per the sanctioned plans and, therefore, the promoters could
not start with the work of construction of additional structures
without first obtaining consent of all flat owners. It was also
contended that the provisions of section 7 are independent of
section 4 and the Court can give effect to the same even if the
required agreement for sale has not been executed and duly
registered; as otherwise the protection granted to the flat
owners and the malpractice sought to be eradicated by section
7 would be rendered meaningless. As against this, Shri Kikla,
learned Counsel appearing for the defendant-promoters,
submitted that having regard to the ratio of the decision of

101
Commerce House Owners' case, unless there is a written
agreement duly registered under the Indian Registration Act,
no right can accrue in favour of the plaintiff for invoking the
provisions of section 7. Since admittedly the plaintiff has no
written agreement, the defendant are not required to obtain her
consent. Shri Kikal's submission was that a promoter is
required to obtain previous consent under section 7 of those
persons only who have valid and enforceable agreements
under section 4.
In the second matter, Shri Sawant, learned Counsel appearing
for the promoters appellants, submitted that the right
contemplated under section 7 would be available only when
the agreements are registered under section 4 even though the
flat owners and the promoter might have entered into the
required agreement for sale in respect of their respective flats.
Unless such agreements are duly registered the flat owners
cannot avail of section 7. According to Shri Sawant, the Act
presents a composite scheme and section 7 is not an
independent right. Shri Pandey, learned Counsel appearing for
the respondents-plaintiff in the second matter, referred to the
various provisions of the said Act to show the various stages
of the application of the Act to building and that for the
purpose of section 7, non-registration of an agreement for sale
cannot come in the way of the flat owners from claiming the
relief.

102
13. Now, in order to appreciate these rival contentions in both
the matters, which principally involve the interpretation of the
provisions of section 7(1)(ii) of the said Act, one has to bear in
mind the relevant provisions. It is a short Act consisting of 18
sections. The title and preamble of the Act are sufficiently
clear. The title and preamble refers to the reasons which led
the State Government to enact this law. This Act regulates, in
the State of Maharashtra, the promotion of the construction of,
the sale and management, and the transfer of flats on
ownership basis. It says that---
"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 of Maharashtra, sundry abuses,
malpractices and difficulties relating to the promotion of the
construction of, sale and management and transfer of flats
taken on ownership basis exist and are increasing;
"AND WHEREAS, the Government in order to advise itself as
respects the manner of dealing with these matters, appointed a
committees by Government Resolution in the Urban
Development and Public Health Department No. 6.248/79599-
F, dated the 20th May, 1960, to inquire into and report to the
State Government on the several matters referred to aforesaid
with the purpose of considering measures for their
amalioration;

103
AND WHEREAS, the aforesaid committee has submitted its
report to Government in June 1961, which report has been
published for general information;
AND WHEREAS, it is now expedient after considering the
recommendations and suggestions made therein to make
provisions during the period of the such shortage of housing
for the regulation of the promotion of the construction, sale
and management and transfer, of flats taken on ownership
basis in the State of Maharashtra;"
In Commerce House Owner's case, it is observed that the Act
was intended to regulate the activities of a promoter. At page
359 of 83 Bom.L.R. 339, it is observed that the very purpose
of the Act is to prevent malpractices rampant in the business
of construction of flats which were sold to intending
purchasers on ownership basis. In order to prevent such
malpractices, which were increasingly being practised,
according to the Legislature, the Ownership Flats Act was
made to regulate the activities of promotion of the
construction of, the sale and management and transfer of flats
taken on ownership basis. While considering the policy of the
said Act and the intention of the Legislature in enacting
section 4, the view expressed is that section 4 is intended to
prevent any bogus sales and it is also intended to safeguard the
interests of the purchasers. It is also opined that it was a part
of public policy to see that people are not cheated out in the

104
bargain for flats on ownership basis and that is why the
agreement has been specifically required to be made in writing
under section 4 and also required to be registered. To my
mind, as discussed hereafter, the same policy and intention of
the Legislature runs in enacting the provisions of section 7 and
it is a part of the same public policy to see that flat owners are
not cheated by the promoters by making changes in the flats
and the structures of the building without the previous consent
of the persons who made the bargain with the promoters.
14. Section 2(a) defines "flat."
"Promoter" is defined under section 2(c).
Section 3 speaks of general liabilities of promoter. Sub-section
(1) of section 3 says that notwithstanding anything in any
other law, a 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 produced,
the information and the documents mentioned in sub-section
(2). Sub-section (2) last down the following eleven liabilities
of a promoter :---
"(2) A promoter, who constructs or intends to construct such
block or building of flats, shall---
(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

105
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;
(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) give inspection in seven days' notice or demand, of the
plans and specifications" of the building built or to be build on
the land"; such plans and specifications having been approved
by the local authority which he is required so to do under any
law for the time being in force;
(d) disclose the nature of fixtures, fittings and amenities
(including the provision for one or more lifts) provided or to
be provided;
(e) disclose on reasonable notice or demand if the promoter is
himself the builder, the prescribed particulars as respects the
design and the materials to be used in the construction of the
building, and if the promoter is not himself the builder
disclose, on such notice or demand, all agreements (and where
there is no written agreement, the details of all agreements)
entered into by him with the architects and contractors
regarding the design, materials and construction of the
buildings;

106
(f) specify in writing the date by which possession of the flat
is to be handed over (and the shall have over such possession
accordingly);
(e) prepare and maintain a list of flats with their numbers
already taken or agreed to be taken, and the names and
addresses of the parties, and the price charged or agreed;
'to be charged therefore, and the terms and conditions if any
on which the flats are taken or agreed to be taken';
(h) state in writing, the precise nature of the organisation of
persons to be constituted and to which title is to be passed, and
the terms and conditions governing such organisation of
persons who have taken or are to take the flats;
(i) not allow persons to enter into possession until a
completion certificate, where such certificate is required to 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);
(j) make a full and true disclosure of all outgoings (including
ground rent, if any, municipal or other local taxes, taxes on
income, water charges and electricity charges, revenue
assessment, interest on any mortgage or other encumbrances if
any;
(k) make a full and true disclosure of such other information
and document in such manner as may be prescribed; and give
on demand true copies of such of the documents referred to in

107
any of the clauses of this sub-section as may be prescribed at a
reasonable charge therefore."
Reading of section 3 shows that the obligations are cast on a
promoter who may intend to construct a building on
ownership basis. These obligations are of a far reaching
nature. It is made obligatory on the part of a promoter to place
all the cards mentioned under section 3(2)(a) to (k) before the
intending purchasers even though he may not have started the
construction of a building of flats or blocks. These provisions
intend to safeguard the interest of intending purchasers as well
as actual buyers of flats.
So far as section 4 is concerned, it has been interpreted in
Commerce House Owner's case, to which reference will be
made hereafter.
Under section 5, a promoter is made a trustee, inter alia, of the
amounts received as advance or deposit from persons
intending to purchase or who have purchased flats. The
promoter is enjoined upon to hold such moneys for the
purposes for which they were taken. These provisions make it
imperative on the part of the promoter to apply and use the
moneys for the purpose for which he obtained the same from
the purchasers of the flats. Under section 13, punishment upto
four years has been fixed for committing original breach of
trust of the money received under the section. For unspecified
classes of criminal breach of trust, Indian Penal Code provides

108
for imprisonment upto three years under section 406, I.P.C.
But under this Act, a new category of criminal breach of trust
by a promoter is enacted. Even the State Government has
acquired power under section 5 to appoint an officer by
general or special order, who can demand from the promoter
information about the application of the money under section
5 and a promoter is required to make full and true disclosure
of all transactions in respect of the account maintained by him.
Section 5 also requires a promoter not to keep moneys in his
private coffers but to put them in a Bank. Such an account has
to be a separate account and cannot be mixed with the other
bank account of the promoter.
By section 6, a promoter is made responsible for payment of
outgoings till the property is transferred.
Section 7, with which we are mainly concerned, will be
considered separately.
Section 8 makes provision for refund of amount with interest
in case the promoter fails to give possession in accordance
with the terms of the agreement.
Section 9 debars a promoter from mortgaging or creating
charge on a flat or land without the previous consent of the
persons who take a agree to take the flats, and if a promoter
creates any mortgage or charge without such previous consent
after the agreement referred to in section 4 is registered, the
right and interest of such persons are protected.

109
Sections 10 and 11 relate to steps to be taken for formation of
a Co-operative Society or a Company and to convey title etc.
Section 12 casts liabilities on a flat-taker. Sub-section (1)
thereof says, every person who has executed an agreement to
take a flat shall pay at the proper time and place the price, his
proportionate share of the Municipal taxes, water and
electricity charges, ground rent (if any) and other public
charges, in accordance with his agreement with the promoter.
By sub-section (2) of section 12, any person who has executed
an agreement to take a flat and who, without reasonable
excuse, fails to comply with or contravenes sub-section (1), on
conviction, is liable to pay fine which may extend to two
thousand rupees.
Section 13 speaks of offences by a promoter. Any promoter
who, without reasonable excuse, fails to comply with a
contravenes any provisions of this Act for of any rule made
thereunder, shall, where no other penalty is expressly provided
for, on conviction, be punished with imprisonment for a term
which may extend to one year or with fine which may extend
to two thousand rupees or with both, and a promoter who
commits criminal breach of trust of any amount advanced or
deposited with him for the purpose mentioned in section 5, on
conviction, is liable to jail sentence upto four years or with
fine or with both.

110
By section 17, various provisions of the Act are made
applicable to flats which had already been constructed before
the coming into force of the said Act, i.e. 10-2-1964.
15. Going back to the left out section 4, as stated earlier, the
same has been interpreted in Commerce House Owners' case
and, therefore, I am bound by that interpretation. Section 4
runs in the following terms :---
"4. Notwithstanding anything contained in any other law, a
building of flats, all or some of which are to be taken or are
taken on ownership basis, shall, before he accepts any sum of
more than 20 per cent, of the sale price enter into a written
under the Indian Registration Act, 1908 and such agreement
shall contain the prescribed particulars, and to such agreement
there shall be attached, such documents or copies thereof, in
respect of such matters as may be prescribed."
The Division Bench in Commerce House Owners' case has
held that these provisions are mandatory and the learned
Judges have observed at page 357, 83 Bombay L.R. as
following :---
"An agreement for sale of immovable property need not
necessarily be in writing nor is it one of the documents which

111
under section 17 of the Registration Act is required to be
registered. Notwithstanding the law that an agreement in
respect of immoveable property need not be registered, section
4 provides that the agreement shall be a written agreement and
the agreement shall be registered. Section 4 appears to us to be
really in four parts and the non obstante clause will govern the
first three parts of the section. The first part of the section
omitting the positive prohibition of to accepting more than
20% of the sale price requires that notwithstanding anything
contained in any other law, a promoter shall 'enter into a
written agreement of sale'. The second part with regard to the
registration will show that 'Notwithstanding anything
contained in any other law.................the agreement shall be
registered under the Indian Registration Act, 1908.' These are
the two principal parts of the section which will be governed
by the non obstante clause. Thus inspite of the fact that under
the general law an agreement of sale of immoveable property
is not required to be registered, under the Ownership Flats Act
it is specifically required to be registered."
While speaking of the consequence of non-compliance with
the provisions of section 4, it is observed at page 359 :---
"The very purpose of the Act is, as already pointed out, to
prevent malpractices rampant in the business of construction
of flats which were sold to intending purchasers on ownership
basis. In order to prevent such malpractices which were

112
increasingly being practised, according to the Legislature, the
Ownership Flats Act was made to regulate the activities of
promotion of the construction of, the sale and management
and transfer of flats taken on ownership basis. If this be the
object of the Legislature in enacting the provisions of the
Ownership Flats Act, then it is obvious that section 4 is a
statutory provision intended to prevent any bogus sales and it
was also intended to safeguard the interests of the purchasers.
As a matter of fact, it was a part of public policy to see that
people are not cheated out in the bargain for flats on
ownership basis. That is why the agreement has been
specifically required to be made in writing, the amount of the
advance deposit has been restricted, the agreement is required
to be registered and the agreement has to contain such details
as are necessary to ensure that the purchaser gets a flat in
accordance with what he had bargained for with a clear title in
respect of the property.
"If section 4 is not held to be mandatory, one of the important
propose of the Act will be defeated inasmuch as the
purchasers will be at the mercy of the promoter, if he cannot
insist upon all the necessary details with regard to the intended
purchase of flat and if he wants to avoid any further disputes,
he cannot insist upon a written agreement of sale which has to
be registered. On a careful scrutiny of the provisions of section
4 of the Ownership Flats Act, therefore, we are inclined to

113
take the view that section 4 contains an absolute enactment
which must be obeyed absolutely. It such absolute enactment
is not obeyed, the consequence will be that the agreement
between the promoter and the purchaser will be wholly invalid
and altogether void creating no rights between the parties. It is
no doubt true that in a given case, it will be the intending
purchaser who might suffer if he connives at the failure of the
promoter not to have the agreement registered but for that, the
intending purchaser will himself have to be blamed because
there is enough provision in the Registration Act which will
enable the intending purchaser to have the document
registered. Once section 4 is held to be mandatory and the
consequence of non-compliance with the provisions of section
4 will be to invalidate the transaction, there is no question of
such a transaction being binding between the parties......"
At page 360, the learned Judges, before proceeding to the next
contention conclude with the following remarks :---
"Having taken the view that the provisions of section 4 are
mandatory and the agreement was, therefore, statutorily
required to be registered, the plaintiff cannot found any rights
on such an agreement and the agreement must be treated as
invalid and ineffective."
The result in that case was that the plaintiff's suit for specific
performance of an agreement dated 31st October, 1964 in

114
respect of certain property, which 1986 Mh.L.J. 110this Court
was dismissed.
16. We now go to section 7. Shri Sawant, learned Counsel
appearing in the second matter submitted that though in
Commerce House Owners' case, provisions of section 7 have
been considered, but the full implications of section 7(1)(ii) of
the Act have not been considered, especially the effect of
section 4 on section 7, in a case where a purchaser of a flat has
entered into an agreement for sale but that agreement is not
registered. In the appeal in which Shri Kikla appears, in that
case there is not even a written agreement for sale. Now
section 7(1) is in these terms :---
"7(I) After the plans and specifications of the building, as
the promoter shall not make,
(i) any alterations in the structures described therein in respect
of the flat or flats which are agreed to be taken, without the
previous consent of that person; or
consent of all the persons who have agreed to take the flats."
(underlined words are emphasised).
17. These provisions are couched in simple and plain language
and present no difficulty in understanding their meaning and

115
import. A mere reading of these provisions brings home the
central theme thereof. After the plans and specifications of the
building are approved by the local authority, and after such
plans and specifications have been disclosed or furnished to
the person who has agreed to take one or more flats, the
promoter is enjoined by law not to make alterations in the
structure of the flats without the previous consent of the
person in respect of whose flat the alteration is to be made by
the promoter. Like-wise, the promoter is prohibited from
making any alterations to the structure of the building, or
construct any additional structures, without the previous
consent of all the persons who have agreed to take the flats, it
is obvious that the purchaser of a flat gets a picture of the
building built or to be built on the land, from the plans
approved by the local authority. It is on the basis and faith of
that plan that he contracts to buy the flat from the promoter. It
seems to me that in order that the promoter should adhere to
the approved plans that these provisions are enacted. Before
the enactment of these provisions, one of the malpractices and
irregularities that was found out in the building industry in this
metropolis was that the promoter or builder, without the
consent of the flat owners, could put up additional storeys or
structures on the building itself or erect additional building or
shops or garages on the land. This left the flat-owners high
and dry. The flat-owners were thus never sure of what the

116
ultimate structures of the building and the land adjoining
thereto would be. It appears that these provisions are intended
to eradicate such malpractices and irregularities. In the
Commerce House Owners' case the scope of the provisions of
section 7 fell for consideration. At page 346 of (1981) 83
Bom.L.R. 339, the following observations are to be found :---
"Under section 7 there is prohibition against the promoter
from making any alterations in the structures described in the
plans and specifications of the building sanctioned by the local
authority. This cannot be done without the previous consent of
the person who takes one or more flats. Sub-clause (i) thus
prohibits the promoter from making any alteration in the flat
once the flat-owner has agreed to purchase that flat. Sub-
clause (ii) deals with the alteration in the structures of the
building or construction of any additional structures and
section 7 has the effect of prohibiting the promoter from
constructing any additional structures or altering the structure
of the building unless previous consent of all the persons who
have agreed to take the flats is taken."
Again at page 374, it is stated this :
"If the amended definition of promoter is read into the
provisions of section 7 then it is obvious that even in respect
of a building which is completed, if a person has agreed to
take one or more flats after the coming into force of the Act,
the promoter, that is, the person who has constructed the

117
building will have the liabilities or the obligations specified in
sub-clause (i) or (ii) of section 7(1) fastened on him. In other
words, if there is a building which is fully constructed on the
date on which this Act has come into force, the promoter is
disabled from making any alterations in the structures in
respect of flat or flats which are agreed to be taken by a person
or persons without the consent of that persons or persons.
Similarly the promoter that is, the person who has constructed
the building is disabled from making any other alterations in
the structure of the building or from constricting any
additional structure without the previous consent of all the
persons who have agreed to take the flats."
Thus the view taken by the Division Bench in the above case
is that a promoter is not entitled to make any other alteration
or construct any additional structure without the previous
consent of all the persons who have agreed to take the flats.
18. Before dealing with the question of the effect of section 4
on section 7 in cases where there is no agreement for sale of
the flat at all or the agreement for sale is not registered under
the Indian Registration Act, it is convenient to consider the
aspect of the consent of the flat-owners for the purpose of
alteration in the structure of the building or constructing any
additional structures as laid down under Clause (ii) of sub-
section (1) of section 7. In this connection in the first matter,
in which Shri Kikla appears for the promoters, there is a

118
dispute about the proforma agreement for sale having been
approved by Shri Sudharshan Wadia, the husband of the
plaintiff but it seems to me prima facie, that the promoters'
would in this behalf is more reliable at this stage because it is
unlikely that Shri Sudharshan was not shown the proforma
agreement for sale got prepared by the promoters for
execution with persons who may agree to purchase flats.
Moreover, at about the same time, Shri Sudharshan had dealt
on behalf of his father for the purchase of another flat in the
same building. Among the clauses referred, reliance was
placed on Clauses 3 and 15 which are in these terms :---
"3. The Builders have informed the purchaser/s that the said
building plans and specifications in respect of the said multi-
storeyed building have been duly sanctioned by the Municipal
Corporation of Greater Bombay subject to the terms and
conditions imposed by the Municipal Corporation of Greater
Bombay. It is agreed by and between the parties hereto that
the Builders shall be entitled to make such changes and/or
alterations and additions in the said building plans as required
by the Municipal Corporation of Greater Bombay which the
Builders may deem fit and proper and the Purchasers hereby
irrevocable consents to the Builders for carrying out such
changes and/or alterations and additions."
"15. The Builders shall have a right until the execution of the
said conveyance in favour of the proposed Society or Limited

119
Company or otherwise as aforesaid to make additions or put
up additional structures, floors and storeys on the said building
which shall be the property of the Builders and the Builders
will be entitled to dispose of the same in such manner as they
may deem fit as aforesaid."
The promoters were also obtaining a letter from the purchasers
of the flat at the time of handing over possession and
concluding paragraph of the proforma letter is as follows :
"I declare that I will not raise any objection on your starting
any additional construction by building additional floors on
the building or by constructing any extension as per B.M.C.
Rules & Regulations. I further agree to your forming the Co-
operative Society after the completion of your additional
floors and extension."
19. In the second matter, Shri Sawant referred to Clause 34 of
the agreement for sale, the material portion whereof runs as
follows :---
"The Builders shall have a right until the execution of the
conveyance in favour of the proposed Society or Limited
Company to make additions, alterations, raise storeys or put
up additional structures as may be permitted by Municipality
and other Competent Authorities. Such additions, alterations,
structures and storeys will be the sole property of the Builders
who will be entitled to dispose it off in any way they choose
and the flat-holder hereby consents to the same........"

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20. It may be mentioned in fairness to Shri Kikla that this
aspect of the matter had been argued in the beginning, but
when the matter was re-argued after the second matter was
also taken up for hearing along with the first one. Shri Kikla
did not refer to the same.
21. Now, we have to understand the meaning of the word
'consent' as used in Clause (ii) of sub-section (1) of section 7.
After the plans and specifications of the building as proved by
the local authority are disclosed or furnished to a person who
agrees to take a flat from the promoter, a prohibition is
claimed on the promoter not to make any alterations in the
building or constructed additional structures. This prohibition
can be lifted if before the promoter carries out the alterations
in the building or before he starts the work of additional
construction, the promoter obtains the consent of all the
persons who have agreed to take the flats. For the purpose of
obtaining consent, a promoter must ask the flat-owners for
their permission and reveal to them the nature of the proposed
alterations to the building or of the additional structures to be
constructed as, without such disclosure, the flat-owners cannot
know for what work the permission is sought and for what
work they are required to consent. Again in response to a
request for consent, there must be an affirmative acceptance
from all the persons who have agreed to take the flats. The
word "consent" in the context of the section does not mean

121
implied consent such as by conduct or acquiescence or
circumstance that might be consent. Consent in this section is
to be understood to mean as positive consent to specific items
of work or alteration to be carried out or particular additional
structure to be built by a promoter. This seems to be the object
of enacting these provisions of obtaining precious consent of
the flat-owners as otherwise the malpractices and irregularities
intended to be eradicated by this enactment would continue to
flourish and the promoters would not be deterred by the penal
provision of section 13. A blanket consent or authority
obtained by a promoter at the time of entering into an
agreement for sale or at the time of handing over possession is
not the consent contemplated by section 7(1)(i) or (ii) for such
a blanket consent or authority would sew up or nullify these
provisions. Now in the first matter the original sanction on the
basis of which the flats were sold by the defendants-
promoters, was obtained from the local authority on 17th
April, 1978. Thereafter these defendants started putting up
additional structures on the basis of plan sanctioned by the
local authority on 6th July, 1981. This work was carried on by
these defendants without the previous consent of the plaintiff
as well as sixteen other persons who had purchased the flats.
These sixteen persons had filed a suit being Bombay City
Civil Court Suit No. 6788 of 1981 against these defendants. In
that suit, these defendants had stated that the additional

122
structures on shops Nos. 8 to 14 were restricted to two
additional floors as per plans dated 6th July 1981. Contrary to
this, these defendants obtained further sanction from the local
authority for constructing additional structures on shops Nos.
8 to 14 under plans approved on 6th May, 1982. It is patent
that the additional work carried out on shops Nos. 8 to 14
under the plans dated 6th July, 1981 and 6th May, 1982 is
without the consent of the plaintiff and other persons who
have purchased the flats. These defendants cannot under the
cloak of the blanket consent obtained under the proforma
agreement for sale carry out the work of additional structures
and thus set at naught the provisions of section 7(1)(ii).
Likewise, in the second matter also, the original sanctioned
plan dated 5th December, 1979 was the sectioned plan on the
basis of which the flats were sold. The defendants in the
second matter had also sought to build garages on the strength
of Clause 34 of the agreement for sale without previously
obtaining the consent of all the persons for constructing
garages in the open space of the building.
Therefore, there is no manner doubt that the additional
structures constructed or intended to be constructed are in
breach of the provisions of section 7(1)(ii).
22. This takes me to another submission of Shri Sawant
According to Shri Sawant the word "additional" means
extension either vertical or horizontal to the structure of the

123
building. In this connection, Shri Sawant made reference to
the meaning of the word "additional" as contained in New
Webster Dictionary of the English language, 1981 edition,
page 13 where the meaning of the word "additional" is given
as "supplementary, more, added, extra." Shri Sawant also
referred to the meaning of the word "additional" as contained
in Random House Dictionary of the English language,
unabridged edition, page 17, where the meaning mentioned is
"added, supplementary". To my mind the meaning "more,
added, extra" of the word "additional" appears to be more
appropriate. It is difficult to accept the meaning suggested by
Shri Sawant, that the word "additional" means only extension
either vertically or horizontally to an existing structure.
23. Shri Sawant next submitted that if any unauthorised work
of putting up additional structure is carried out, then a
promoter is liable to compensate the flat-owners and for that
purpose a machinery is provided under sub-section (2) of
section 7. Now, the provisions of section 7(2) make reference
to the defects in a building of material used or any
unauthorised change in the construction. The unauthorised
change mentioned here does not cover case of making
alterations in the building or constructing additional structure,
the construction whereof is barred under sub-section (1) of
section 7. Therefore, I do not find any merit in this
submission.

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24. The last contention of Shri Kikal and Shri Sawant was that
unless there is a written agreement for sale duly registered
under the Indian Registration Act, the flat-owner cannot avail
of the provisions of section 7. Shri Kikla also emphasised that
in such case, a promoter is not required to obtain previous
consent under section 7, as there is no valid and enforceable
agreement between the flat-owner and the promoters. In other
words, the promoters can carry out the work of additional
construction at their sweet Will so long as they succeed in
obtaining sanction of the local authority. Now, I have quoted
above the observations in the Commerce House Owners's case
on which reliance was placed by learned Counsel and Shri
Sudharshan Wadia. In my view, section 4 and section 7 are
independent. These provisions are intended to safeguard the
interest of the flat-owners in different ways. The effect of want
of a registered agreement for sale, as I understand by the
decision in the Commerce House Owners' case, is that a flat-
owner may not be able to enforce a contractual obligation or
succeed in a suit for specific performance or claim protection
from encumbering his rights and interest in the flat or the land
under section 9, but the absence of a registered agreement
under section 4 cannot deprive a flat-owner of his right title
and interest in the flat or the land or prevent him from
enforcing the provisions of the Act. In the first matter, though
the plaintiff does not have an agreement for sale, but she has

125
paid the price of the flat, she has obtained a letter recording
the sale of the flat to her and she is also in possession of the
flat. In the second matter, there are agreements for sale and the
flat-owners are in possession of their respective flats and are
managing the affairs of their flats. Shri Sudharshan Wadia also
referred to the provisions of section 17 of the Act, which make
applicable certain provisions of the Act to flats which are
already in existence and relied upon the observations in
Commerce House Owners's case at page 347 quoted earlier. In
that case, it has been observed that a promoter in respect of a
building standing on the date of the coming into force of the
Act is also disabled from making any alteration in the
structure of the building or from constructing any additional
structure without the previous consent of all persons who have
agreed to take the flats. In case of such flat-owners to whom
the provisions of section 17 are applicable, the existence of a
registered agreement for sale under section 4 is not a condition
precedent to the enforcement of the obligations under section
7. The liabilities or obligations, as fastened on a promoter as
observed in the Commerce House Owners' case, squarely
apply to the present case. Therefore, to my mind, the absence
of the registered agreement for sale cannot came in the way of
the plaintiffs in both the matters in invoking the provisions of
section 7(1)(ii) nor are the promoters in the first matter
absolved from obtaining the consent of the plaintiff in that

126
case because of her not possessing a registered agreement for
sale.
Remaining discussion in A.O. No. 575 of 1982:
25. In the matter, by a letter dated 5th June, 1979, the
defendants-promoters have sold flat No. 503 to the plaintiff
for Rs. 1,23,200/-, out of which a sum of Rs. 31,000/- was
received on the date of the passing of the said letter. Prima
facie, receipt of Rs. 31,000/- was in excess of 20 per cent of
the sale, price, which was the maximum advance money
which the defendants could receive from the plaintiff. It is not
in dispute that the plaintiff-appellant has made further
payments by cheques, though according to her, she has paid in
all Rs. 1,26,000/- whereas according to the defendants they
have received Rs. 1,24,700/-. There is, however, a dispute
between the plaintiff and the defendants about handing over
possession of Flat No. 503 to the plaintiff. Prima facie, it
appears that there is a great deal of doubt in the explanation of
the defendants on the circumstances in which the plaintiff took
possession. It does not appear that the plaintiff has purchased
the flat for the purpose of investment through her husband, as
made out by the defendants. The plaintiff has made all the
payment by cheques. As soon as the defendants agreed to sell
the flat to the plaintiff on 25th June, 1979, the defendants must
have, in the registers required to be maintained under the Act
and the Rules made thereunder i.e. Rule 18(2), made entries

127
about the name of the purchaser, address of the purchaser,
whether, purchased or agreed to be purchased, date of
agreement, the price settled, etc. as required by Form II
prescribed by Rule 18(2). Again, under Form III prescribed by
or the same Rule, the defendants must have recorded in the
register the amounts received and the disbursements made.
Having regard to these provisions, it is difficult, prima facie,
to take the view that the plaintiff's husband was intending to
screen the transaction as a Government servant, as contended.
26. About the circumstances leading to the taking of
possession, I am only dealing with one or two circumstances
for taking a prima facie view. One circumstance is that if the
plaintiff of her husband had taken possession of the flat in
illegal manner as contended by the defendants, the defendants,
as promoters would not have slept over this illegal act. Shri
Kikla submitted that the defendants came to know of the
plaintiff's husband taking possession in an illegal manner only
when the suit was filed. This also, prima facie, does not appeal
to me because, according to the defendants, their supervisor
Shukla was on the scene throughout and if Shukla had given
the key to the plaintiff's husband and the plaintiff's husband
has failed to return it, he could not have ignored the matter for
months together. The other circumstance is that the defendants
have preferred bills upon the plaintiff and claimed
maintenance charges for the period from May 1981 to October

128
1981. One bill is dated 10-12-1981 claiming payment of
Municipal taxes, water tax and maintenance charges for two
months of November and December 1981. The other bills
dated 10-1-1982 claiming the same kind of charges for the
months of January and February 1982 and also for the months
of May 1981 to October 1981. The present suit was filed in the
middle of June 1982. Having regard to these circumstances,
prima facie, it is not possible to disentitle the plaintiff from
seeking the interlocutory relief if she is otherwise entitled to it
in law.
27. Shri Kikla contended that the plaintiff is not entitled to an
interlocutory relief on account of the latches on her part. In
this connection, what is material to bear in mind is that after
the original plans were approved by the Municipal
Corporation on 7-4-1978, which was the basis on which the
defendants had agreed to construct the flats and the building
and the shops, the defendants had twice obtained further
Municipal permission for construction. The first sanction
dated 6-7-1981 related to construction of two floors and shops
Nos. 8 to 14. In this connection, the defendants had made a
statement to the Court, to which reference has been made
above, whereby the defendants even made the Court believe
that the sanction obtained by the defendants was only upto two
additional floors. On behalf of the defendants, it could not be
shown, prima facie, that the defendants had obtained the

129
consent of the plaintiff or the other purchasers of the flats in
respect of the second sanction dated 6-5-1982 for further two
additional floors. The defendants have, prima facie,
contravened the provisions of section 7. The latches pointed
out by Shri Kikla were that the plaintiff was aware of the
developments in the earlier suit and was watching and waiting
for the result of that suit and it is only after the disposal of the
Notice of Motion in that suit that the plaintiff has filed the
present suit. I do not think that in the circumstances of this
case the plaintiff's conduct in awaiting the outcome of a suit
involving the same points could be a ground for refusing the
relief. The defendants are guilty of misleading the Court in the
previous suit. After the passing of the order dated 18-12-1981
in the previous suit the defendants again sought to obtain
sanction from the local authority on 6-5-1982 for raising two
additional storeys.
Order in A.O. No. 875 of 1982 :
28. For these reasons, the appeal is allowed. The order of the
trial Court dismissing the plaintiff's Notice of Motion is made
absolute in terms of prayers (a) and (b) with costs throughout.
Order in A.O. No. 875 of 1982 :
29. In view of the above discussion; this appeal must fail.
However, in the view that I have taken, the defendants are not
entitled to construct additional structure, i.e. the two garages
or any other structure on the open land around 'Kunjan

130
Apartments'. Accordingly, the injunction granted by the trial
Court is modified and pending the hearing and final disposal
of the suit, the defendants, their servants and agents and any
person or persons claiming through or under them are
restrained from constructing any garages and or any structure
on the land around the building knowing as 'Kunjan
Apartments' on C.T.S. No 644, Kasturba Cross Road, Malad
(West), Bombay 400 064. The defendants will, however, be at
liberty to construct the second building on the said plot of land
without affecting the rights of the flat-owners of Kunjan
Apartments in any manner in order to utilise F.S.I. if any.
Subject to this modification, the appeal is dismissed with
costs.
30. At this stage of the passing of the final order, Shri Kikla
makes an oral application on behalf of the respondents for
leave to appeal to the Supreme Court. In the absence of Shri
Sawant. It was indicated that the appellants in the other matter
were also seeking leave to appeal to the Supreme Court. Later,
Shri Sawant indicated that he was not making such an
application.
31. Shri Kikla submitted that this case involves a substantial
question of law of general importance and that many builders
in the city would be affected by this judgment. Shri Kikla
further indicated that some matters are pending in this Court,
but he was not very sure. In view of this, final order on the

131
oral application is served. Shri Sudarshan Wadia submits to
the orders of the Court.
32. Shri Kikla states that there are about 20 appeals pending,
in which the decision appealed against is either in favour of
the purchasers of flats, flat-owners or in favour of the
promoters-builders. Now it, therefore, seems that two views
are possible and some learned Judges have taken one view and
others a different view. The question becomes more important
and significant by virtue of the decision of the Division Bench
Commerce House Owners' case, (1981) 83 Bom.L.R. 339,
holding that the consequence of non-compliance with the
provisions of section 4 is that it invalidates the transaction and
there is no question of the transaction between the purchaser
of the flat and the promoter being binding between them. It is
further held that the provisions of section 4 being mandatory,
the agreement of sale is, therefore, statutorily required to be
registered and if the same is not registered, a plaintiff cannot
found any rights on such an agreement and the agreement
must be treated as invalid and ineffective. That being the
position of the law as laid down by the Division Bench of this
Court, the question posed on behalf of the respondents seeking
leave was that since there is no registered agreement for sale
of the suit flat, the plaintiff can not avail of the provisions of
section 7 and in such a case the defendants were not required
to obtain the previous consent of the plaintiff under section 7

132
as there is no valid and enforceable agreement between the
parties. As discussed above, the absence of the agreement for
sale and its non-registration does not take away the right of the
purchaser of a flat to avail of the statutory prohibition
contained in section 7(1)(ii). A promoter cannot carry out any
additional construction or make any alteration in the building
without the consent of all the flat-owners under section
7(1)(ii), notwithstanding the non-execution of the agreement
for sale or non-registration therefore, nor can he by obtaining
blanket consent of the purchasers of the flats at the time of
entering into the agreement for sale or at the time of delivering
possession of the flat set at nought the provisions of section
7(1)(ii).
33. Therefore, the case involves a substantial question of law
of general importance and, in my opinion, the same needs to
be decided by Their Lordships of the Supreme Court. The
required certificate be issued accordingly.

133
Bombay High Court
Kalpita Enclave Co-Operative ... vs Kiran Builders Pvt.
Ltd. on 16 August, 1985
Equivalent citations: 1987 (1) BomCR 355, (1986) 88
BOMLR 100
Bench: R Jahagirdar
JUDGMENT
R.A. Jahagirdar, J.
1. The two appeals and the petition raise an important question
of law relating to the jurisdiction of the authority constituted
under section 7(2) of the Maharashtra Ownership Flats
(Regulation of the Promotion of the Construction, Sale,
Management and Transfer) Act, 1963 (hereinafter referred to
for brevity's sake as the "Ownership Flats Act"). Though the
question which arises in all these three matters is common, for
the sake of convenience I proceed to narrate the facts involved
in Appeal No. 450 of 1985 from order. I will refer to the
arguments advanced in support of that appeal by Mr. J.I.
Mehta appearing for the appellants and also refer to the
arguments urged on behalf of the appellants in the other
appeal and on behalf of the petitioner in the Civil Revision
Application. All the arguments on behalf of the persons who
are challenging the view taken by the City Civil Court at
Bombay are being dealt with and disposed of without some
times specifically referring to the particular advocate who has

134
made those arguments. Similarly the arguments on behalf of
the respondents in all these matters are dealt with.
2. Now to the facts in Appeal No. 450 of 1985 from Order.
The appellants (hereinafter referred to as the 'plaintiffs') filed a
suit, being S.C. Suit No. 3226 of 1985, in the City Civil Court
at Bombay for an injunction restraining the respondents
(hereinafter referred to as the 'defendants'), which is a Private
Limited Company, from carrying on certain construction
which, according to them, are in contravention of the
agreements entered into by the plaintiff with the defendant.
Plaintiff No. 1 itself is a Co-operative Housing Society having
been so registered some time in the year 1985. Plaintiffs Nos.
2, 3, and 4 are purchasers of flats in the buildings which are to
be owned by the first plaintiffs. The building have been
constructed by the defendant which, as mentioned above, is
limited company and which acted as the promoter in respect of
these buildings. Some time in the year 1975 the plans for the
construction of buildings on the land were submitted by the
defendants and sanctioned by the Bombay Municipal
Corporation. It is the contention of the plaintiff that 15% of
the total area on which some building were to be constructed
was reserved, according to the plans sanctioned by the
Bombay Municipal Corporation, for recreation purposes. This
area comes to about 3752 square metres. In the plans on which
reliance has been placed by the plaintiffs, the areas which

135
were to be reserved for recreation purpose have been shown
by the letters G-1, G-2 and G-3. The buildings themselves
were completed and the plaintiff have contended with
sufficient success that plaintiff Nos. 2, 3, and 4 and several
other purchasers of the flat have been put in possession of
their respective flats. There is for example a letter dated 11th
May, 1983 written by the Municipal Corporation to Mr.
Phadke, the Chief promoter, in which details of the occupation
certificates given have been mentioned in respect of the
several buildings. The rest of the property, namely, the open
spaces have not been naturally given in possession of the
plaintiffs. This is partly for the reason that the co-operative
society to which the conveyance had to be made in accordance
with section 10 of the Ownership Flats Act had not yet been
formed. It has been contended on behalf of the defendants
before me, and there is considerable substance in this
contention, that the entire property cannot be aid to have been
given in possession of any of the plaintiffs.
3. Subsequently, namely, on 15th February, 1984 the promoter
surrendered to the Municipal Corporation an area of 2200
square metres of the property which would otherwise have
been conveyed to the co-operative society. In lieu of the
property so surrendered by the promoter, the Municipal
Corporation allowed the promoter to utilise extra floor space
Index. Taking advantage of this permission given by the

136
Municipal Corporation, the defendant is, according to the
plaintiffs, constructing certain additional building on areas
which, according to the plans originally sanctioned were
reserved for recreation purposes or, at any rate, were to remain
as open spaces. The plaintiffs insisted that when they
purchased the flats from the promoter, they did so after the
representations which were apparent, namely that the property
would be developed in accordance with the plans which had
been then sanctioned by the Municipal Corporation. The plans
and specifications of the building as approved by the Bombay
Municipal Corporation were naturally shown to them and
these unmistakeably indicated that an area of 3752 square
metres indicated in the map as G-1, G-2, and G-3 was to be
reserved for recreation purposes or at any rate, was to kept
open. Implicit in this representation on which the plaintiffs
acted was the fact that no buildings of any kind would be
constructed by the promoter.
4. With these allegations the plaintiffs filed for the aforesaid
suit in the City Civil Court at Bombay.
5. In the said suit the plaintiff prayed for a mandatory order of
injunction that the defendant be ordered and directed to
complete and perfect their title to the land and to convey the
said land together with the buildings standing thereon to the
first plaintiff. It was also prayed that the defendant be
restrained by an order of injunction from proceedings with the

137
construction in regard to any plan sanctioned by the Municipal
Corporation on the land shown as G-2 and G-3 of the pay-out
plans. In the said suit they took out a Notice of Motion bearing
No. 2488 of 1985 for interim relief in terms of prayer Clause
(c) of the plaint wherein it has been prayed that pending the
hearing and final disposal of the suit, the defendants be
restricted by an order of injunction from proceedings with the
construction of the buildings on the land shown as G-2 and G-
3 of lay-out plans.
6. The learned trail Judge by his judgement and order dated
5th June, 1985 dismissed the Notice of Motion by holding that
under section 7(2) of the Maharashtra Ownership Flats Act the
only authority which can deal with the questions of the type
raised by the plaintiffs was the Housing Commissioner or any
officer not lower in rank than the Superintending Engineer as
the State Government may specify. The learned trail Judge
thought that was the only view which he could legitimately
take in view of the judgement of a Division Bench of this
Court delivered on (2nd September, 1983 by Walikar, J., with
Vaze, J.)1. In other words, the learned trial judge interpreting
sanction 7(2) of the Ownership Flats Act in the light of the
judgement given by the Division Bench of this Court thought
that the Housing Commissioner as mentioned in the aforesaid
provisions or an officer of the rank mentioned in the aforesaid
section had exclusive jurisdiction to deal with any complaint

138
in respect of any unauthorised change in the construction
which the plaintiffs had alleged was being made by the
defendants in the suit. It is again this order of the learned trial
Judge dismissing the Notice of Motion that Appeal No. 450 of
1985 from order has been preferred.
7. In Civil Revision Application No. 628 of 1980 the facts are
similar. There the petitioners are the plaintiffs in L.C. Suit No.
3748 of 1980. The possession pursuant to the agreements
entered between the promoter and the purchaser of the flats
was given between December 1972 and January 1979. The
plaintiffs have alleged that some time in June 1980 more than
one year after the possession was given, the promoter started
making unauthorised construction by covering the stilts on the
ground floor thereby converting open space into tenements.
On 11th July, 1980 the suit was filed and prayers restraining
the defendant-promoter from continuing with the possession
were made. It may be added that in this suit, namely, Suit No.
3748 of 1980, the Municipal Corporation was also made a
party and a prayer for injunction restraining the Municipal
Corporation from sanctioning the plans submitted by the
promoter was made. A Notice of Motion bearing No. 2811 of
1980 was taken out and interim relief in terms of the main
prayer of prohibitive injunction made in the suit was made in
the Notice of Motion. Initially ad interim order of injunction
has been granted of this Notice of Motion . Subsequently the

139
learned trial Judge by his order dated 21st July, 1980 directed
that the ad interim order passed earlier would continue till the
mid-night of 25th July, 1980, which necessarily meant that the
ad interim injunction was to stand vacated after that particular
date. It is against this order that the revision application has
been preferred by the plaintiffs. It is true that subsequently the
learned advocate appearing for the plaintiffs in the City Civil
Court allowed the Notice of Motion to be dismissed. On 30th
July, 1980 the present civil revision application has been
preferred.
8. The facts in Appeal No. 159 of 1980 from order are also
somewhat similar. The plaintiffs, who are the purchasers of
flats in a building to be constructed by the promoter, filed a
suit, being Suit No. 4191 of 1979, in August 1979. The
possession of the flats purchased by the plaintiffs was given
on or about 26th April, 1978. Thereafter say the plaintiff, the
promoter contrary to section 7(1) of the Ownership Flats Act
started unauthorised construction some time in June 1979, that
is, again more than one year the possession was given. Prayers
similar in type to these made by the plaintiffs in the order two
suits were also made by the plaintiffs in this suit.
9. From what has been staged so far about the facts in these
three suits it is clear that the plaintiffs in all these suits are
purchasers of flats from a promoter who is required to abide
strictly by the provisions contained in the Ownership Flat Act

140
and also naturally by the terms of the agreements under which
the plaintiffs agreed to purchaser the flats. In all these cases
possession in said to have been given to the different
plaintiffs; again in all these cases, the promoter is said to have
started some constructions more than one year the possession
of the flats had been given to the plaintiffs. In all these cases,
it has also been alleged by the plaintiffs that the proposed
construction started by the promoters one year after the date of
possession are contrary to section 7(1) of the Ownership Flats
Act or at any rate, they are contrary to the convenants
contained in the agreement pursuant to which the plaintiffs
agreed to purchase the flats.
10. When Appeal No. 159 of 1980 from Order and Civil
Revision Application No. 628 of 1980 originally came up
before my Brother S.K. Desai, J., for final hearing, he noticed
a judgment of a Single Judge of the Court governing the field
on the question of the exclusive jurisdiction of the authority
mentioned in section 7(2) of the Ownership Flats Act. Indeed
in these two matters, which were before my Brother S.K.
Desai, J., the City Civil Court had relied upon the judgment of
the learned Single Judge and accordingly it held that the Civil
Court had no jurisdiction to decide the disputes raised by the
plaintiffs in their respective suits. Desai, J., after reading the
judgement of the single Judge to which now I will proceed to
make reference, though that the case was not correctly

141
decided. He was not inclined to agree with the view taken by
the learned single Judge in that case and proceeded to refer the
matter to the Division Bench.
11. At this stage it may also be noted that another judgement
of Apte, J., dated 29th June, 1976 in (Civil Revision
Application No. 185 of 1976)2, was also bought to the notice
of Desai, J. The judgment of Apte, J., proceeded on the basis
that the Civil Court had jurisdiction to deal with questions of
contravention of section 7(1) of the Ownership Flats Act and
in appropriate cases, the Civil Court could legally issued
orders of injunction restraining the promoter from committing
any act contrary to the provisions of the Ownership Flat Act.
The question of the exclusive nature of the jurisdiction of the
authority mentioned in section 7(2) of the Ownership Flats
Act, however had not been raised specifically before Apte, J.,
and, therefore, had not been decided.
12. The judgement of Apte, J., also concerned itself with
another question namely, whether the consent mentioned in
section 7(1) of the Ownership Flats Act could mean a blanket
consent given to the promoter by the purchasers of the flats
without specifying which particular structure could in
variation of the plans originally sanctioned were consented to.
Apte, J., had in terms and unequivocally held that a blanket
consent obtained by the promoter from the intending
purchasers of flats is not the consent envisaged under section

142
7(1) of the Act. Desai, J., therefore, rightly held that there was
no question of any conflict between the judgement of Apte, J.,
and the judgement of Naik, J., which had decided on the
question of the jurisdiction of the authority under section 7(2)
of the Act in so far as the question of consent was concerned.
With great respect, this is so far as the question and in fact in a
later judgement delivered by another Single Judge of this
Court, namely, Aggarwal, J., in (Appeal No. 575 of 1982,
from order with Appeal No. 875 of 1982, from order both
decided on 9th February, 1983)3 : it has been held that consent
in section 7(1)(ii) of the Ownership Flat Act must be
understood to mean positive consent to specific items of work
or alternation to be carried out or particular additional
structure to be built by the promoter. A blanket consent or
authority obtained by the promoter at the time of entering into
the agreement for sale or at the time of handing over
possession is not the consent contemplated by section 7(1)(i)
or section 7(I)(ii). Such a blanket consent or authority would
sew up or nullify the provisions of the Ownership Flat Act
which are meant for the protection of the purchasers of flats
under the Ownership Flat Act. Aggarwal, J., has, with great
respect, rightly held that the promoter cannot under the cloak
of the blanket consent obtained under the proforma agreement
for sale carry out the work of additional structure thus
nullifying the provisions which are made essentially for the

143
protection of the purchasers of flats. Therefore, it can be stated
that so far as the question of the type of consent required
under section 7(1) of the Ownership Flats Act is concerned the
judgement of Apte, J., which is the same as that of Agarwal J
can be said to be final word on this subject at present. It has
also been stated by Desai, J., that there is no view which is
contrary to the view taken by Apte, J.
13. The reference to the Divisions Bench was made by Desai,
J., by a detailed judgement dated 27th October, 1980. Desai,
J., examined the judgement of V.A. Naik, J., given on 24th
October, 1966 in (Appeal No. 299 of 1965 from order)4, and
was of the opinion that if disputes of the type which had arisen
in Appeal No. 159 of 1980 from Order and Civil Revision
Application No. 628 of 1980 are referrable to the Housing
Commissioner and are held to be within his exclusive control
and jurisdiction, it would make it mockery by the various
provisions contained in and right conferred on the purchasers
by the Ownership Flats Act. Since however, Naik, J., had
taken a view which had almost ousted the jurisdiction of the
Civil Court to entertain the suit and grant relief, Desai, J., had
thought it necessary to refer both the matters to a larger
Bench.
14. Before proceedings to consider the judgment of the Bench,
which is naturally binding upon me, it would be advantageous
to briefly the view taken by Naik, J., in Appeal No. 299 of

144
1965 from order. The facts of that case disclosed that the
promoter was proposing to construct an additional floor on the
terrace. The question was whether the additional floor on the
terrace amounted to an additional structure and thus fell within
the meaning of section 7(1)(ii) of the Ownership Flats Act.
The learned Counsel appearing for the plaintiff in that case
had conceded that the first part of Clause (ii) may not apply. In
order words, it was conceded before Naik, J. That the
construction of an additional floor complained of in that case
did not amount to an alternation in the structure of the
buildings. Naik, J., proceeded to hold that construction of an
additional floor on the terrace amounted to additional
structure.
15. The next question that was to be decided by Naik, J., was
whether under sub-section (2) of section 7 of the Ownership
Flats Act the words "any unauthorised change in the
construction" included within its compass the "additional
structures" mentioned in the second part of Clause (ii) of
section 7(1) of the Ownership Flats Act. The words
"additional structures" mentioned in Clause (ii) or even the
words "alteration in the structure" to be found in clause (i) of
sub-section (1) of section 7 were missing in sub-section (2) of
section 7. On the other hand what is contemplated by sub-
section (2) is "any defect in the building or material used or

145
any unauthorised change in the construction". Naik, J., held as
follows :-
"It appears to me that legislature instead of retyping all three
items has used a comprehensive phraseology viz. unauthorised
change. This expression obviously embraces the words
'alternations in the structure of the flat, alternations in the
structure of the building " as also the words 'construct an
additional structures'. Prima facie therefore, if there is a
dispute between the parties on the question relating to the
construction of the additional structure that must also be
referred to the Housing Commissioner ."
16. The order of reference made by Desai, J., to the Division
Bench naturally centred round the question as to whether the
phrase "unauthorised change in the construction " to be found
in sub-section (2) of section 7 included within its ambit "any
additional structures" that is mentioned in section 7(1). If that
is so, the next question was whether the Housing
Commissioner would have jurisdiction to decide on the
question whether there is any unauthorised change in the
construction as mentioned in sub-section (2) of section 7.
17. The view of Naik, J., has been specifically and
unequivocally up held by the Division Bench by the
judgement delivered by its on 24th September, 1983. The
Division Bench has subjected the relevant provisions of the
Act to detailed review and after noticing the view of Naik, J.,

146
as well as the view of Desai, J., has unequivocally upheld the
view of Naik, J. In other words, the Division Bench has taken
the view agreeing with Naik, J., that additional structures
mentioned in section 7(1) of the Ownership Flats Act were
necessarily included in the phrase "any unauthorised change in
the construction " mentioned in sub-section (2) of section 7. If
this is so, then naturally the authority mentioned in sub-section
(2), namely, the Housing Commissioner or an officer of the
rank mentioned therein will have exclusive jurisdiction to
grant relief in respect of the complaints made by the
purchasers of the flats.
17-A. It was argued before the Division Bench that when
additional structures are constructed, it may not be possible
having regard to the limited nature of the powers given to the
authority under section 7(2) for that authority to prevent
further mischief or to demolish construction which had
already been made by the promoter contrary to the provisions
of section 7(1). The Division Bench held that though the
authority under section 7(2) could not be regarded as Court
capable of committing contempt of himself could order and
direct stoppage of the further work or order rectification,
removal and award compensation. The Division Bench felt
that merely because there is no machinery provided for the
enforcement of the orders of the authority under section 7(2),
it could not be said that he had no exclusive jurisdiction to

147
decide matters and fix up the liability as mentioned in section
7(2) of the Act. The Division Bench, however, was careful
enough to mention that the jurisdiction of the authority under
section 7(2) of the Act necessarily depended upon the
existence of certain jurisdictional facts, namely, alternations in
respect of the flat and unauthorised change in the construction.
It has been so stated in paragraph 16 of the judgement of the
Division Bench.
17-B. There is also the necessity of the further existence of an
additional fact which could invest the authority under section
7(2) with the exclusive jurisdiction to decide the questions
arising under section 7(2). In a latter paragraph of the
judgement the Division Bench has proceeded to lay down as
follows :-
"With respect, therefore, we agree with the view taken by
Naik, J., and would, however, like to clarify that the Housing
Commissioner has exclusive jurisdiction to decide all disputes
arising under section 7 of the Act, but only such disputes
which are to be referred to him under the circumstances and
within the limitation as prescribed under section 7(2)."
(Emphasis Provided)
The Division Bench did not decide the question arising in the
two matters and directed that the same be placed before a
Single Judge for disposal on merits. Indeed liberty in one case
was given to the Advocate for the purchasers of the flats to

148
contend before the Single Judge that the suit which has been
filed by them in the Civil Court was not the one which fell
within the limited scope and compass of section 7 of the
Ownership Flats Act. It is thus that these two matters have
come up before me for final hearing. Along with these two
matters Appeal No. 450 of 1985 from Order, facts of which
have been narrated by me in details has also been heard.
18. A careful reading of the judgement of the Division Bench
shows that the authority under section 7(2) of the Ownership
Flats Act has exclusive jurisdiction to decide all questions
arising under that provision. The Division Bench has also
unequivocally, as already mentioned by me above, held that
the exclusive jurisdiction of the authority under section 7(2) of
the Ownership Flats Act depends upon the existence of the
jurisdictional facts and also upon the existence of the
circumstances mentioned in section 7(2). If the facts
mentioned in section 7(2) are present and the other
requirements also mentioned in section 7(2) are satisfied, then
and then alone the authority under section 7(2) will have
exclusive jurisdiction to deal with questions mentioned in
section 7(2) of the Act. The Division Bench has not naturally
held the questions which fall outside the scope of section 7(2)
or questions arising in circumstances not mentioned in section
7(2) can legitimately be handled by the authority mentioned in
section 7(2). Though, with great respect, the law has been

149
clearly laid down by the Division Bench in the aforesaid
judgement, for the purpose of ready reference. I would analyse
section 7(2) of the Ownership Flats Act. This would also
enable me to apply the ratio of the Division Bench judgement
correctly to the facts of the cases before me.
19. Sub-section (2) of section 7 of the Ownership Flats Act
comes into operation only after the building is constructed and
completed and the possession of the same is given to the
purchasers of the flats. I say that the said provisions applied
only after the possession of the flats is given to the purchasers
because in the first place, the purchasers have to bring any
defect in the building or material used or any unauthorised
change in the construction that has been made to the notice of
the promoter. This can naturally be done only after the
possession is given. Secondly, it is also provided that this act
of bringing to the notice of the promoter the defect in the
building or unauthorised construction has to be done within
one year from the date of handing over possession. The
starting point for the period of limitation within which the flat
purchaser has to bring to the notice of the promoter the defect
or the unauthorised construction is the date on which the
possession of the flat is given to the flat purchaser. Obviously,
therefore, the provisions of section 7(2) will not apply if the
possession has not been given.

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20. Secondly, the dispute must release to "any defect in the
building or material used" or to "any unauthorised change"
which phrases must necessarily include any additional
structure that has been made by the promoter. Thirdly, such
defect or the unauthorised structure has to be brought to the
notice of the promoter within one year form the date on which
the purchaser takes the possession of the flat. After this is
done, the promoter shall wherever it is possible rectify the
defect without further charge to the purchaser of the flat and
where such rectifications is not possible, he shall give to the
flat purchaser reasonable compensation. All these provisions
are contained in the first part of sub-section (2).
21. If the promoter refuses to accept that there is a defect or
there is any unauthorised change in the construction or refuses
to rectify the defect or refuses to give reasonable
compensation to the flat purchaser for the defect or change,
then naturally a dispute can be said to have arisen. When such
a dispute arises, it can be referred by the flat purchaser for a
decision to the authority mentioned in section 7(2) of the
Ownership Flats Act. Here again it has been specifically
provided that the dispute has to be referred to the authority
within a period of two years from the date of handing over
possession. From these provisions one can easily notice that
within one year from taking the possession, a dispute has to be
raised by the flat purchaser and if it is not amicably settled

151
with the promoter, it can be referred to the authority under
section 7(2) within a period of two years from the date of
taking possession.
22. Any decision that is given by the authority under section
7(2) of the Ownership Flat Act cannot be executed by the
authority himself. This is why the Division Bench pointed out
that a decision given by the authority, though not enforceable
by the authority, gave a cause of action to the flat owner to file
a suit in the Civil Court. In paragraph 24 of its judgement the
Division Bench has clearly stated that the order or decision
made by the authority under section 7(2) can certainly
constitute a cause for action for the aggrieved party to file a
suit for seeking those reliefs. When such a decision is given by
the authority and a suit is filed by the aggrieved party in the
Civil Court, naturally the Civil Court at that stage will be fully
competent to deal with every questions that has been raised by
the aggrieved party. It is in this sense that the Division Bench
has said that the Civil Court would be required to first decide
disputed facts contemplated by section 7 of the Act, which are
jurisdictional facts to be determined by the Housing
Commissioner for exercising his jurisdiction. There would
thus be two forums functioning in same area resolving similar
disputes" (Paragraph 25 of the judgement of the Division
Bench).

152
23. Before I proceed to mention the cases which do not fall
within the four corners of section 7(2) of the Ownership Flats
Act, it would be relevant to state that neither in the Act nor in
the Rules framed under the Act any provision has been made
as to when the possession of the flats should be given to the
purchasers thereof. There is no provision, for example, that
possession of the flats can be given only after the entire
property is conveyed to the purchasers. Section 10 states that
as soon as a minimum number of persons required to form a
co-operative society or a company have taken flats, the
promoter shall within the prescribed period submit an
application to the Registrar for registration of the organisation
of persons who take the flats as a co-operative society or as a
company. In other words, a duty has been cast upon the
promoter to bring about the formation of a co-operative
society or a company to whom the property is to be conveyed
after it has been developed. Under section 11 of the
Ownership Flats Act the promoter is enjoined to take all the
steps necessary to complete his title and convey either to the
co-operative society or to the Company as mentioned in
section 10, his right, title and interest in the land and building.
These two sections which deal with the taking of steps in the
direction of the conveyance of the property to the flat owners
do not mention that the possession of the flats cannot be given
before the property is conveyed to the corporate body to be

153
formed for that purpose of the purchasers of the flats. Under
Rule 5 framed under the provisions of the Ownership Flats
Act it is provided that the agreement of sale referred to in
section 4 of the Ownership Flats Act shall contain among
other things the date by which the possession of the flat is to
be handed over to the purchaser. This date may be
conceivably, therefore, vary from the date by which the
property is to be conveyed to the society or the Company of
the purchasers of flats.
23-A. It is thus clear to me that the possession of the flats of
even of the building or of the entire property could
conceivably be given to the flat owners or the co-operative
society or the Company that may be formed before the formal
conveyance of the entire property is effected. The Legislature
could not have obviously overlooked this fact because in sub-
section (2) of section 7 the starting point of limitation within
which the defects are to be brought to the notice of the
promoter and, if they are not attend to, then to the Housing
Commissioner is stated to be the date on which the possession
has being given. I have already mentioned above and it is so
clearly implied in the judgment of the Division Bench that
sub-section (2) of section 7 cannot became operative unless
the possession of the flats or of the buildings, as the case may
be, is given to the flat owners or to the corporate body that is
formed for the purpose. It is worth repeating that sub-section

154
(2) of section 7 deals with a situation where possession of the
completed flats or buildings is given. Therefore, the said
provision further states that any defect in the building or
material or any unauthorised change in the construction
detected by the flat owners is to be brought within one year
from the date of taking possession to the notice of the
promoter. Possession obviously cannot be given of a building
which is under construction. Possession also cannot in
advance be given of any construction that the promoter may
intend to make on the property. Therefore, the parameters
within which action is to be taken under section 7(2) by the
authority are that there must be, in the first place, possession
given of the completed flats or building to the person or the
society concerned and a defect, if detected within one year
after such possessions is given, is to be attend to in the manner
provided therein. I have no difficulty in saying so on the basis
of the judgement given by the Division Bench which in all
humility is totally binding upon me.
21. The Division Bench has already stated that the matters are
to be disposed of by the Single Judge in the light of the law
laid down by it in relation to the jurisdiction of the authority
under section 7(2) of the Ownership Flats Act. This now I
proceed to do. While summarising the facts of each of the
three matters before me I have already stated that the common
feature of all this matters is that possession in each case has

155
been to the plaintiffs in the three different suits. It is also a
further common feature of all this matters that the
unauthorised construction which is being challenged by the
plaintiffs in each of these suits has been commenced one year
after the possession has in fact been given to the plaintiffs. In
all these cases, property has not been conveyed to the body
corporate as required under section 11 of the Act. The
plaintiffs, therefore, in all these cases are not the full fledged
owners of the property. If they were, any act that would be
done by the promoter on the property would have amounted to
an act of trespass making me liable both under the civil and
the criminal law. Since the property has not being conveyed to
the body corporate or society, the promoter has taken liberty to
further erect some structure which according to the plaintiffs,
are not consistent with the agreements entered into with the
purchasers of the flats and also not consistent with the plans
and specifications on the basis of which the plaintiffs agreed
to purchase the flats. It is not enough, say the plaintiffs, that
after they had agreed to purchase the said flats the Municipal
Corporation has permitted certain alternations or sanctioned
new plans according to which the promoter in each case is
proceeding to make the additional structures. The sanction of
the Municipal Corporation for any alternation or for a new
plan does not make the proposed construction any the less
unauthorised because the unauthorised construction that is

156
contemplated in section 7(2) of the Ownership Flats Act is the
structure which is not authorised as per section 7(1). A
structure ceases to be an authorised structure if it does not
conform to the plans and specification approved by the local
authority on the basis of which the flats owners have agreed to
purchase the flats. If any alternation is to be made or any
structure is to be constructed, it is necessary that the promoter
must obtain for such alternation or structure the consent of the
person who has agreed to purchase the flat. If, however, he
fails to do so and then proceeds to make any alternation or
make any additional structure, that alternation or that
additional structure will be an unauthorised construction.
25. This unauthorised construction, if it has already being
made before the possession is given, will be completely
covered by the provisions of section 7(2) of the Ownership
Flats Act. If, however, the unauthorised construction is made
or is being made after the possession has being given, then, in
my opinion the provisions of section 7(2) will not be
applicable because, as already mentioned above and it is worth
repeating, section 7(2) will apply only to a situation where the
possession of completed structure is given to the flat owners
or to the body corporate, as the case may be. In all these cases,
therefore, where after giving the possession, the promoter has
ventured to, with or without the sanction of the Municipal
Corporation, construct a new building or a new structure

157
which is not warranted by the promises contained in the
agreement with the flat purchasers, obviously there is a
contravention of section 7(1) of the Ownership Flats Act. At
the same time since it is unauthorised construction which is
not covered by the provisions of section 7(2), the authority
under section 7(2) will naturally not have jurisdiction to
entertain any complaint from the flat owners in respect of the
same. A contravention of section 7(1) of the Ownership Flats
Act gives rise to the cause of action to the plaintiffs in each of
these cases and since these cause of action is not within the
jurisdiction, let alone the exclusive jurisdiction of the authority
mentioned under section 7(2), the plaintiffs' remedy is only in
the Civil Court. The contravention of section 7(1) of the
Ownership Flats Act gives a cause of action because any
construction carried on by the promoter which is not in
accordance with the plans and specifications of the building on
the basis of which the flat owners agreed to purchase the flats
will be an unauthorised construction. A negative obligation
placed upon the promoter by section 7, if broken, must
necessarily give rise to a civil cause of action, though it has
not been made a penal offence under the provisions of this
Act. I do not see how when such a cause of action arises, the
Civil Court can be said to have no jurisdiction to hear and
decided the same. It is only when the defect in the building or
material of a flat or a building of which possession is given or

158
when possession of a structure is given which is found to be
unauthorised, that the question of initiating a process for the
purpose of rectification of the defect or of obtaining the
compensation as outlined in section 7(2) can be started and
that also in respect of the properties of which possession has
being given. It is clear, therefore, that when the promoter is
proceeding to make alterations or additional structures which
are in contravention of section 7(1), he is liable to be
proceeded against in a Civil Court which alone has got
jurisdiction.
26. Mr. Paranjape and Mr. A.G. Parikh who have appeared for
the promoters in two of the matters have contended that any
contravention of section 7(1) of the Ownership Flats Act
cannot be dealt with or remedied except in accordance with
the prescribed under section 7(2) of the Act. It is their
contention that even if there is a contravention of section 7(1),
no complaint of the same can be made in the Civil Court
because sub-section (2) of section 7 provides for the remedy
which can be regarded as total and complete. This remedy
provides not only for the rectification of the defect where
these can be done but also provides for the compensation
where such rectification can be done. Sub-section (2) of
section 7, therefore, is comprehensive enough to take
cognizance of every possible contravention of sub-section (1)
of section 7 and it must be held to be the intention of the

159
Legislature that the authority mentioned in section 7(2) alone
should deal with all the cases that will arise under section 7.
According to the arguments of the learned Advocate, no cause
of action arises before possession is given; cause of action
arise only after possession in given; in the latter case, the
procedure which has been prescribed under section 7(2) must
be strictly complied with. If within one year the possession is
given no defect or unauthorised structure is brought to the
notice of the promoter, it cannot be remedied later. The Civil
Court will not have, even after the expiry of the period of
limitation jurisdiction to deal with these grievances.
27. I refuse to accept this interpretation placed by the learned
Advocates on the scope of sub-sections (1) and (2) of the
section 7 of the Ownership Flats Act. I refuse, to accept that
contravention of section 7(1) though giving rise to a cause of
civil action, cannot be made the subject matter of a suit merely
because at some later stage when these contravention is
completed and perfected, the legislature provided for remedy
under section 7(2). Section 7(1) imposes an obligation upon a
promoter not to do a particular act. It bestows upon the flat
owners a right to see that such a prohibited act is not done. If a
duty is breached, a cause of action automatically accrue to the
party affected thereby to enforce its right. It was suggested at
some stage that if individual grievances can be raised and
agitated even before the building is completed or the

160
possession is given, it may make room for multifarious
litigation resulting in the delay in the construction and
completion of the project for the benefit of all. If, for example,
it is interpreted that any alteration made in structure of the
building or the construction of any additional structure must
necessarily receive the previous consent of each and every
person who has agreed to take the flats, then one discordant
voice will result in large scale inconvenience, injustice to the
other flat owners. I do not see how this argument can be used
for the purpose of preventing an aggrieved party from
resorting to a Civil Court where a right has accrued to him.
Indeed the fear, in my opinion, is unfounded if the promoter
acts honestly and abides by the solemn undertakings which he
has given in the agreement entered into by him with the
purchasers of the flats. If the law says that without the consent
of all flat purchasers no alteration in the structure of the
building can be made or no additional structure or any
additional structure not warranted by the agreements and the
plans and the specifications can be constructed, it is not open
to the promoters to turn round and say that they would take the
consent of only some of the persons and make some
alterations. This is in clear defiance of the mandatory language
contained in section 7(1). An argument like this for enabling
the promoters to make what could be blatantly unauthorised
changes in the constructions cannot be countenanced.

161
28. Similarly after the possession is given but before the
property is conveyed to the flat owners or the body corporate
representing them, the promoter cannot be allowed to further
develop the property in contravention of the obligations
contained in the agreements read with the plans and
specifications on which those agreements are based. If, of
course, the property is conveyed, any act on the part of the
promoter would be rank trespass. If, however, the property is
not conveyed, it would be a contravention of section 7 of the
Ownership Flats Act and though the possession of the property
is given, the further unauthorised structure that is taking place
will be outside the jurisdiction of the authority mentioned in
section 7(2) for reason which I have given in great details
earlier. In such a case, the flat owners or the society or the
body corporate representing them, as the case may be, is at
liberty to approach the Civil Court which alone has
jurisdiction to deal with such a situation. The Civil Court
examining the facts and circumstances of each case is entitled
to and it is indeed obliged to pass such orders as may be
necessary to protect the interests of the flat-owners who are
normally unorganised. It is for the protection of this class of
persons that the Ownership Flats Act has been passed and any
interpretation which militates against this intention of the law
must be eschewed.

162
29. It was also suggested that the individual disputes are not
contemplated under section 7(2) of the Ownership Flats Act. It
is not possible to accept this argument. The agreement is
entered into by the promoter with individual flat owner. Each
individual flat owner is, therefore, interested in seeing that the
construction of the entire building and of the property which
forms the subject-matter of the agreement proceeds strictly in
accordance with the covenants contained in his agreement and
plans and specifications on the basis of which the flat-owners
were persuaded to enter into the agreements. In this sense,
every flat-owner has got an individual as well as equal right in
seeing that the construction of the building and the
development of the property as a whole take place strictly in
accordance with the agreement, the plans and specifications.
Merely because some flat-owners who as already mentioned
above, are normally not-owners who as already mentioned
above are normally not organised do not assert their right or
do not join others in asserting the rights collectively, it does
not mean that the promoter can with impunity proceed with
the contravention of section 7(1). It is not possible to accept
the proposition that the dispute can only be collective dispute.
30. Next it was contented by Mr. Paranjape particularly that
what is contemplated under sub-section (2) of section 7 of the
Ownership Flats Act is the remedy of the defect in the
building or any alternation in the building or any unauthorised

163
change in the construction of the building which has already
been constructed, possession of which has been given to the
flat owners. A dispute can be raised under sub-section (2) of
section 7. If sub-section (2) of section 7 is meant to take care
of the disputes which arise as a result of the contravention of
section 7(1), then one must also proceed to interpret sub-
section (1) in such a manner that it contemplates disputes only
about the buildings or the unauthorised alteration of the
building. The next step in the argument of Mr. Paranjape was
that neither sub-section (1) nor sub-section (2) was meant to
cover anything that is done by the promoter apart from the
buildings which were agreed to be given in the possession of
the flat owners. If, therefore, there is open land, proposed
building on which was not the subject-matter of the agreement
or the original plans and specifications preceding the
agreement, then no dispute could be raised by the flat owners
either under sub-section (1) or sub-section (2) of section 7.
31. Mr. Paranjape says that neither the moral nor the legal
obligation which can be attributed to the promoter under the
provisions of this Act contemplates anything more than giving
well -built flats and building to the purchaser of the flats and
there is no obligation not to construct any other building on
the open space if such construction is permissible by the rules
and regulations of a local authority. If such rules and
regulations of the local authority permit such construction, it

164
will not be unauthorised construction as mention in the sub-
section (2) of section 7.
32. It is impossible to accept this argument. It must be noted
that when a person agrees to purchase a flat in a proposed
building which is to be constructed according to the plans and
specifications of the building which are approved by the local
authority as provided in the Act itself, then he is asking for
and is getting a promise that the property will be developed
strictly in accordance with the plans and specifications
approved. It is not correct to say as it was sought to be said,
that the plans and specifications of the building must be
construed narrowly to mean the actual specifications of the
building itself. Whenever the plans and specifications of a
building are approved by the local authority, it has done so in
the context of several other factors such as keeping certain
areas open or developing other property in such a manner as
required by the rules and regulations of the local authority. If,
therefore, the flat owner has agreed to purchase a flat in a
building he has agreed to do so on the promise held out by the
promoter to develop the property in accordance with the plans
approved by the local authority at the time of the agreement.
If, of course, such plans permitted the construction of some
buildings, then such a construction would not be naturally in
contravention of section 7. If, however, as originally
contemplated, the plans and specifications on the basis of

165
which the flat owner agreed to purchase the flat did not
contemplate the construction of one or more buildings, then
the construction of any other building not mentioned in the
original plans and specifications will be clean contrary to the
provisions contained in section 7(1). This despite the fact that
subsequently the construction of the additional building may
be sanctioned by the Municipal Corporation as a special case
or upon change in the rules and regulations of that Municipal
Corporation. It is one thing to say that a building or a
construction is authorised or legal on the basis of prevalent
laws, rules and regulations of the local authority, it is quite
another thing to say that a building is authorised because it is
in accordance with the plan, specifications, agreements
referred to in section 7(1). What is permissible under the
Bombay Municipal Corporation Act does not necessarily
become permissible under the provisions of the Ownership
Flats Act. In such cases, the flat purchasers have remedy in the
law because a wrong have been committed and since this
wrong cannot be remedied under the provisions of section
7(2), the only forum in which this can be agitated is the Civil
Court.
33. Before I proceed to summarise the propositions that
emerge from the discussion of the law made by me above in
the light of the binding propositions laid down by the Division
Bench, it is relevant to mention that the Housing

166
Commissioner referred to in sub-section (2) of section 7 is the
one appointed under one or the other Housing Boards Act
mention therein. The Maharashtra Housing and Area
Development Act, 1976, has, with effect from the appointed
day, which is 5th December, 1977, repealed the Bombay
Housing Board Act and the Madhya Pradesh Housing Board
Act under which the Housing Commissioner referred to in
section 7(2) of the Act was appointed. The necessary
consequence is the abolition of the post of the Housing
Commissioner which in turn means that under sub-section (2)
of section 7 the Housing Commissioner as one of the
authorities for resolving the disputes is no longer available.
However, under the said provision the Government may
appoint any officer not lower in the rank then a
Superintending Engineer to exercise the powers under section
7(2) of the Ownership Flats Acts. In the paper book of Appeal
No. 450 of 1985 from Order, a copy of the letter dated 11th
June, 1985 addressed by the Under-Secretary of the
Government of Maharashtra in the Housing and Special
Assistance Division to the promoter of the first plaintiff has
been reproduced. This letter mentions that the post of Housing
Commissioner is not in existence and the power to resolve the
disputes arising under section 7(2) has not been conferred on
any other officer by the Government. At this moment,
therefore, there is no forum at all available to a person

167
aggrieved within the meaning of section 7(2) of the Ownership
Flats Act. It is no solution to this problem to suggest that an
aggrieved party may compel the Government to appoint an
authority for the purpose of discharging the duties under
section 7(2). By the time such a thing is done, the time limit
within which the grievances of the flat owners are to be
attended to will have passed or will have considerably been
spent. Section 5 of the Limitation Act is for obvious reason
not applicable. In such situation where a forum provided by
the law is totally unavailable, it can be safely stated that the
Civil Court will have jurisdiction to decide those disputes
which would have been otherwise within the jurisdiction of
the authority contemplated by section 7(2). Looked at from
either point of view, therefore, all these three suits which have
been filed in the City Civil Court are maintainable in that
Court and are not barred either expressly or by necessary
implication by the provisions contained in section 7 of the
Ownership Flats Act.
34. Now I may proceed to summarise the propositions that
have emerged from the discussion of law made by me above.
1) Section 7 of the Ownership Flats Act imposes an obligation
on the promoter to construct the buildings and otherwise
develop the property strictly in accordance with the
agreements entered into with the flat purchasers and the plans

168
and specifications upon the basis of which the agreement are
entered into.
2) The said provision, therefore, also bestows a corresponding
right upon the flat purchaser to compel the discharge of this
obligation on the part of the promoter.
3) If a breach of this obligation is noticed in the flats or
buildings possession of which has been given to the flat
purchaser or to the body corporate representing the flat
purchasers, then that breach can be remedied only in the
manner provided by sub-section (2) of section 7.
4) If, however, the breach of the obligation or the
contravention of section 7(1) is noticed to apprehended before
the possession is given, action or its prevention can be brought
in a Civil Court; section 7(2) operates only after the
possession is given; apprehended contravention is not covered
by that provision.
5) Since section 7(2) applied to completed structure, any act
towards further contravention even after the possession is
given can be prevented by filling a suit in the Civil Court.
6) The contravention contemplated in section 7(1) or in
section 7(2) which includes alteration in the structure or the
construction of the additional structure is not confined to the
construction of the buildings only; this contravention may
extend to the construction of any additional structure not in the
original plans and specifications as approved by the local

169
authority. Thus if the original plans and specifications on the
basis on which the persons were persuaded to purchase the
flats disclosed that certain areas will be kept open, it would be
a clear contravention of the agreements as well as of law if the
promoter proceeds to construct additional structure on those
open spaces even with the section of the Municipal
Corporation.
7) If, however, the property is conveyed to the flat purchaser
or to the body corporate representing them, then naturally the
promoter cannot and will not meddle with the property
because with an act on his part will amount to an act of
trespass making him liable for both civil and criminal action.
35. On the facts of Appeal No. 450 of 1985 from Order we
have already seen that the promoter is threatening to construct
a new building which was not warranted by the original plans
and specifications. No doubt, he is doing this on the strength
of the sanction given by the Municipal Corporation, which
sanction may also be legal. But construction even in
accordance with the legal sanction, if prohibited by section
7(1) of the Ownership Flats Acts, will be illegal, which is
patently the situation in this case. The Civil Court, therefore,
has jurisdiction in the light of the propositions outlined above
to hear and dispose of this suit. The order passed by the Civil
Court on 5th June, 1985 dismissing the Notice of Motion in
S.C. Suit No. 3226 of 1985 is liable to be set aside and is set

170
aside. That Notice of Motion is restored to the life of the City
Civil Court which will hear and dispose of the same in
accordance with the law after assuming jurisdiction to try the
suit which is undoubtedly possesses. Till the Notice of Motion
is taken out for the order and till an order on the same is
passed by the City Civil Court, interim injunction granted by
this Court will continue.
36. It is noticed that the Civil Revision Application No. 628 of
1980 is strictly not maintainable. While narrating the facts of
this case I have noted that the Civil Revision Application was
filed against the order dated 21st July, 1980 which continued
interim relief only upto a particular date. Even against this
order an appeal could lie, which however, had not been filed.
Subsequently the Notice of Motion in which the order of 21st
July, 1980 had been passed has been allowed to be dismissed.
Against that, no appeal has been preferred. This revision
application will, therefore, have to be dismissed. Since,
however the Court below has proceeded on the basis that it has
no jurisdiction to entertain the suit and therefore, to grant any
interim relief and since now it is held that the City Civil Court
has jurisdiction to entertain the suit, the plaintiffs in Suit No.
3748 of 1980 are at liberty to take out a fresh Notice of
Motion for appropriate relief which will be granted by the
Court examining the facts and circumstances of that case. The

171
interim order passed by this Court will continue till 30th
November, 1985.
37. In a result, Appeal No. 450 of 1985 from order is allowed
with costs. The order dated 5th June, 1985 passed by the City
Civil Court in the Notice of Motion taken out in S.C. Suit No.
3226 of 1985 is set aside and the said Notice of Motion is
restored to the file of the City Civil Court which will hear and
dispose of the same in accordance with law. The interim relief
granted by the Court shall continue to operate against the
defendant till the learned Judge of the said Notice of Motion.
38. Rule given in City Revision Application No. 628 of 1980
discharge. However, the plaintiff in Civil Suit No. 3748 of
1980 are at liberty to take out a fresh Notice of Motion for
appropriate relief on the basis that the City Civil Court has
jurisdiction to hear and dispose of their suit. Interim relief
granted by this Court during the pendency of the Civil
Revision Application shall continue till 30th November, 1985.
39. Appeal No. 159 of 1980 from order is adjourned till 2nd
September, 1985 on a motion made by Mr. Parikh, for final
orders.

172

173
Gujarat High Court
The Competent Officer, Gujarat ... vs K.B. Parmar And
Ors. on 15 April, 1991
Equivalent citations: AIR 1993 Guj 5, (1992) 1 GLR 79
Bench: C Thakkar
ORDER
C.K. Thakkar, J.
1. This group of petitions is filed against the order dated May
30, 1987 passed by the District Judge, Bhavnagar in various
appeals filed before him under Section 9 of the Gujarat Public
Premises (Eviction of Unauthorised Occupants) Act, 1972
(hereinafter referred to as 'the Public Premises Act').
2. The facts giving rise to the present controversy may now be
shortly stated.
"The petitioner is a 'Board' i.e. the Housing Board constituted
under Section 3 of the Gujarat Housing Board Act, 1961
(hereinafter referred to as 'the Housing Board Act'). The
respondent in each petition is an allottee of a tenament either
in Middle Income Group (MIG for short) or in Lower Income
Group (LIG for short) Scheme of Housing Board at
Bhavnagar. It is the case of the petitioner-Board that the
allottees had not paid rent equivalent to amount of instalments
due and payable under the agreement to sell entered into
between the Housing Board on one hand and the allottees who
are tenants of the Board on the other hand. Since the

174
instalments of several months were not paid by them, they
were liable to be evicted under Section 4(i)(a) of the Public
Premises Act. An officer on Special Duty was appointed by a
notification dt. September 12, 1974 issued under the
provisions of the Public Premises Act, as Competent Officer.
He issued notices under Section 4 of the Public Premises Act
calling upon the allottees to show cause why the orders of
eviction should not be passed against them. After following
the procedure laid down under the Public Premises Act, the
Competent Officer passed orders of eviction on November 25,
1986 against the allottees.
3. Being aggrieved by the said orders of eviction, the
respondent-allottees preferred various appeals before the
District Judge, Bhavnagar under Section 9 of the Public
Premises Act. After hearing the parties, the learned District
Judge came to the conclusion that the appellant-allottees were
not governed by the provisions of the Public Premises Act but
were governed by the provisions of the Housing Board Act
and the proceedings initiated by the Competent Officer under
the provisions of the Public Premises Act were therefore,
without jurisdiction. He was also of the opinion that it was not
proved that the allottees were defaulters in payment of the rent
equivalent to instalment of the hire-purchase amount. He,
therefore, quashed and set aside the orders of eviction as being

175
illegal and contrary to law, and discharged notices issued
against them.
4. It is against these orders passed by the District Judge,
Bhavnagar under Section 9 of the Public Premises Act, that
the present petitions are filed by the petitioner-Board in this
Court.
5. Mrs. Mehta, the learned Counsel for the petitioner-Board
has raised two contentions. Firstly, she contended that in view
of passing of the Gujarat Public Premises (Eviction of
Unauthorised Occupants) Act, 1972 and particularly in view
of Section 19 of the said Act, the Bombay Government
Premises (Eviction) Act, 1955 and "any other corresponding
law providing for the eviction of occupants from public
premises", stood repealed. Thus, the corresponding provisions
pertaining to eviction of the persons from the Board premises
under the provisions of the Gujarat Housing Board Act, 1961
stood expressly repealed. Secondly, and in the alternative, she
contended that even if the District Judge was right in holding
that the provisions contained in the Housing Board Act
relating to the eviction of the persons from the Board premises
did not stand repealed even after the enactment of the Public
Premises Act, and this court is of the opinion that the District
Judge was right in holding so, then also, the petitioner-Board
was having two parallel and concurrent remedies to proceed
against the persons who were unauthorisedly occupying the

176
Board premises, namely; either to proceed against them under
the Housing Board Act, or under the Public Premises Act, and
if the Board has proceeded under one of the statutes, the said
action cannot be held to be contrary to law or without
jurisdiction.
6. Mr. K.G. Vakharia and Mr. N.N. Gandhi, on the other hand,
supported the orders passed by the District Judge and
submitted that all the petitions are required to be dismissed
inasmuch as the conclusion of law recorded by the District
Judge that the provisions of the Public Premises Act are not
applicable but the provisions of the Housing Board Act are
applicable to 'the present respondents are correct and in
accordance with law and by no stretch of imagination, it can
be said that there is an error apparent on the face of the record
committed by the District Judge, which requires to be
interfered with in the present proceedings. They have also
submitted that even on merits, the petitioner-Board has not
made out a case for eviction of respondents and a finding of
fact has been recorded by the District Judge that the
respondents are not defaulters and, therefore, no eviction
orders can be passed against them.
7. Since an important question of law is involved in the
present petitions, I have heard the learned Counsel of both the
sides at a considerable length. So far as the Housing Board
Act is concerned, as stated in the preamble, it was enacted

177
with a view to consolidate and amend the law relating to the
Housing Board in the State of Gujarat. The 'Board' is defined
under Sub-section (3) of Section 2 as Housing Board
constituted under Section 3. The 'Board Premises' is defined in
Sub-section (4) of Section 2 as any premises belonging to or
vesting in the Board or taken on lease by the Board or
entrusted to the Board under the Act for management and use
for the purpose of the Act. 'Competent Authority' is defined in
Sub-section (8) of Section 2 as 'any person authorised by the
State Government by notification in the Official Gazette, to
perform the functions of the competent authority under
Chapter VI for such area as may be specified in the
notification' and shall be a person who is holding or has held
an office, which is not lower in rank than that of a Deputy
Collector or the Assistant Housing Commissioner under the
Board. Section 3 provides for the establishment of Board by
the State Government in the Official Gazette which shall be a
body corporate having perpetual succession and a common
seal and may sue and be sued in its corporate name and shall
be competent to acquire and hold property both movable and
immovable and to contract and do all things necessary for the
purposes of the Act. For the purpose of the Act as well as for
acquisition of land, the Board is deemed to be a local
authority. The provisions of the relevant Rent Act will not
apply to any land or building of the Board. The Board shall

178
consist of the Chairman and 10 other members appointed by
the State Government. Any member may resign from his
office by submitting his resignation to the State Government.
The State Government has also power to remove any member
in certain circumstances. Chapter III provides for Housing
Schemes. Chapter IV lays down procedure for acquisition and
disposal of land. Chapter VI confers powers on the Board to
evict persons from the Board premises. Section 56 of the Act
is a material provision and it reads as under:--
"56. Power to evict certain persons from Board Premises:--
(1) If the competent authority is satisfied -
(a) that the person authorised to occupy any Board premises
has -
(i) not paid rent lawfully due from him in respect of such
premises for a period of more than six months, or
(ii) sub-let, without the permission of the Board, the whole or
any part of such premises; or
(ii-a) committed any act contrary to the provisions of the
Gujarat Ownership Flats Act, 1973 (Guj. 13 of 1973) or of any
Declaration, Deed of Apartment or of the bye-laws made
under that Act or of any rules or regulations made under such
bye-laws; or
(iii) otherwise acted in contravention of any of the terms,
express or implied under which is authorised to occupy such
premises; or

179
(b) that any person is in unauthorised occupation, of any
Board premises,
the competent authority may, notwithstanding anything
contained in any law for the time being in force, by notice
served (i) by post or (ii) by affixing a copy of it on the outer
door or some other conspicuous part of such premises or (iii)
in such other manner as may be prescribed, order that person
as well as any other person who may be in occupation of the
whole or any part of the premises, shall vacate them within
one month of the date of the service of the notice.
(2) Before an order under Sub-section (1) is made against any
person the competent authority shall inform the person by
notice in writing of the grounds on which the proposed order
is to be made and given him a reasonable opportunity of
tendering an explanation and producing evidence, if any and
to show cause why such order should not be made, within a
period to be specified in such notice. If such person makes an
application to the competent authority for extention of the
period specified in the notice the competent authority may
grant the same on such terms as to payment and recovery of
the amount claimed in the notice as it deems fit. Any written
statement put in by such person and documents produced in
pursuance of such notice shall be filed with the record of the
case and such person shall be entitled to appear before the
authority proceeding in this connection by advocate, attorney

180
or pleader. Such notice in writing shall be served in the
manner provided for service of notice under Sub-section (1).
(3) If any person refuses or fails to comply with an order made
under Sub-section (1), the competent authority may evict that
person from, and take possession of the premises and may for
that purpose use such force as may be necessary.
(4) If a person who has been ordered to vacate any premises
on the grounds mentioned in Sub-clause (i) or (iii) of clause
(a) of Sub-section (1) within one month of the date of the
service of the notice or such longer time as the competent
authority may allow, pays to the Board, the rent in arrears or
carries out or otherwise complies with the terms contravened
by him to the satisfaction of the competent authority, as the
case may be, the competent authority shall, in lieu of evicting
such person under Sub-section (3) cancel its order made under
Sub-section (1) and thereupon such person shall hold the
premises on the same terms on which he held them
immediately before such notice was served on him.
Explanation:-- For the purposes of this section and Section 57,
the expression "unauthorised occupants", in relation to any
person authorized to occupy any Board premises includes the
continuance in occupation by him or by any person claiming
through or under him of the premises after the authority under
which he was allowed to occupy the premises has been duly
determined."

181
Section 57 empowers the Board to recover rent or damages as
arrears of land revenue. Section 58 enables the Board to
recover rent by deducting it from the salary or wages of
certain employees in certain cases. Section 59 provides for an
appeal against the order passed Under Sections 56 or 57 and it
reads as under:--
"59. Appeal:--
(1) Any person aggrieved by an order of the competent
authority under Section 56 or Section 57 may, within one
month of the date of the service of the notice under Sub-
section (1) of Section 56 or Sub-section (1) or (2) of Section
57, as the case may be, prefer an appeal to the State
Government:
Provided that the State Government may entertain the appeal
after the expiry of the said period of one month, if it is
satisfied that the appellant was prevented by sufficient cause
from filing the appeal in time.
(2) On receipt of an appeal under Sub-section (1), the State
Government may after calling for a report from the competent
authority, and after making such further inquiry, if any, as may
be necessary, pass such orders as it thinks fit and the order of
the State Government shall be final. (3) Where an appeal is
preferred Under Sub-section (1), the State Government may
stay the enforcement of the order of the competent authority
for such period and on such conditions as it thinks fit."

182
Section 60 bars jurisdiction of civil courts. Chapter VII deals
with finance, accounts: and audit, of the Board's funds and
plenary powers have been conferred on the State Government
in this respect also.
8. After the Act was enacted in the year 1961, certain
provisions were subsequently amended. Since in this petition
we are concerned with the power to evict a person from the
Board premises, I will refer to only to those amendments
which were made in Chapter VI. It appears that originally a
person occupying the Board premises could be evicted if the
competent authority was satisfied that he had not paid rent for
a period of more than two months, the said provision was
amended and for 'two months' the words 'six months' were
substituted by Gujarat Act No. 1 of 1973. Similarly in Section
56(1)(a), as originally enacted in 1961, there were only three
clauses (i), (ii) and (iii). However, by Gujarat Act No. 13 of
1973, after clause (ii) and before clause (iii), clause (ii-a) came
to be added and the Board was authorised to evict a person if
he had committed breach of the provisions of law mentioned
in the said clause. Moreover, Section 60 excluding jurisdiction
of Civil Courts was also amended by Act 1 of 1973.
9. Reference to the above amendments is necessary and
material in view of the rival contentions of the parties and in
view of the finding recorded by the District Judge. How-ever,
before I express any opinion on that aspect, it is necessary to

183
refer to the relevant provisions of the Public Premises Act
also.
10. As stated in the preamble, the Act was enacted to provide
for the eviction of Unauthorised occupants from public
premises and for certain incidental matters. 'Competent
Officer' is defined in Section 2(a) as 'an Officer appointed as
such by the State Government under Section 3'. 'Corporate
authority' is defined under clause (b) as 'any Municipal
Corporation, Municipality, Panchayat or other Corporation'
referred to in clause (f) of Section 2, 'Public Premises' is
defined in clause (f), which reads as under:--
"(f) "Public premises" means any premises belonging to or
taken on lease or requisitioned by, or on behalf of the State
Government, and includes any premises belonging to, or taken
on lease, by, or on behalf of-
(i) any Municipal Corporation constituted under the Bombay
Provincial Municipal Corporations Act, 1949 or any
Municipality constituted under the Gujarat Municipalities Act,
1963;
(ii) a panchayat constituted under the Gujarat Panchayats Act,
1961;
(iii) any Corporation (not being a company as defined in
Section 3 of the Companies Act, (1956) established by or
under a Central or 'State Act, and owned or controlled by the
State Government; and

184
(iv) any University established or incorporated by or under
any law in the State of Gujarat or any institution recognised by
the University Grants Commission or declared by the Central
Government to be a University, in accordance with the
provisions of clause (f) of Section 2 or of Section 3 as the case
may be, of the University Grants Commission Act, 1956."
'Unauthorised Occupation' is defined in clause (h) as 'an
occupation by any person of the public premises without
authority for such occupation, and includes the continuance in
occupation by any person of the public premises after the
authority (whether by way of grant or any other mode of
transfer) under which he was allowed to occupy the premises
has expired or has been determined for any reason whatsoever.
Under Section 3, the State Government can appoint certain
officers as competent officers under the Act. Section 4
empowers the Competent Officer appointed by the State
Government by a notification in the Official Gazette under
Section 3 of the Act to issue show cause notice for evidence. It
reads as under:--
"4(1) If the competent officer is satisfied -
(a) that the person authorised to occupy any public premises
has -
(i) not paid rent lawfully due from him in respect of such
premises for a period of more than two months, or

185
(ii) sub-let, without the permission of the State Government,
or, as the case may he, the corporate authority the whole or
any part of such premises or
(iii) committed or is committing such acts of waste as are
likely to diminish materially the value, or impair substantially
the utility, of the premises, or
(iv) otherwise, acted in contravention of any of the terms,
express or implied, under which he is authorised to occupy
such premises, or
(b) that any person is in unauthorised occupation of any public
premises, or
(c) that any public premises are required for any other purpose
of the State Government or, as the case may be, the corporate
authority to whom such premises belong,;
the competent officer shall, notwithstanding anything
contained in any other law for the time being in force issue in
the manner hereinafter provided a notice in writing calling
upon all persons concerned to show cause why an order of
eviction should not be made,
(2) The notice shall -
(a) specify the grounds on which the order of eviction is
proposed to be made, and
(b) require all persons concerned, that is to say, all persons
who are, or may be in occupation of or claim interest in, the
public premises, to show cause, if any, against the proposed

186
order on or before such date as may be specified in the notice,
being a date not earlier than ten days from the date of issue
thereof.
(3) The competent officer shall cause the notice to be served
by post or by having it affixed on the outer door or some other
conspicuous part of the public premises, and in such other
manner as may be prescribed whereupon the notice shall be
deemed to have been duly given to all persons concerned.
(4) where the competent officer knows or has reasons to
believe that any persons are in occupation of the public
premises, then, without prejudice to the provisions of Sub-
section (3), he shall cause a copy of the notice to be served on
every such person by post or by delivering or tendering it to
that person or in such other manner as may be prescribed.
(5) If any person makes an application to the competent
officer for extension of the period specified in the notice, the
competent officer may grant the same on such terms as to
payment and recovery of the amount claimed in the notice as it
deems fit."
Section 5 provides procedure for eviction of unauthorised
occupants. Section 6 empowers the authority to dispose of the
property left in public premises by unauthorised occupants.
Section 7 confers power on the Competent Authority to
require payment of the rent or damages in respect of the public

187
premises. Section 9 provides for an appeal, which reads as
under :--
"9(1) An Appeal shall lie from every order of the competent
officer made in respect of any public premises under Section 5
or Section 7 to an appellate officer who shall be the district
judge of the district in which the public premises are situate or
such other judicial officer in that district who has for at least
ten years held a Judicial Office in the State as the district
Judge may designate in this behalf.
(2) An Appeal under Sub-section (1) shall be preferred -
(a) in the case of an appeal from an order under Section 5
within fifteen days from the date of the service of the order
under Sub-section (1) of that section; and
(b) in the case of an appeal from an order under Section 7
within fifteen days from the date on which the order is
communicated to the appellant;
Provided that the appellate officer may entertain the appeal
after the expiry of the said period of fifteen days, if he is
satisfied that the appellant was prevented by sufficient cause
from filing the appeal in time.
(3) Where an appeal is preferred from an order of the
competent officer, the appellate officer may stay the
enforcement of that order for such period and on such
conditions as he deems fit.

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(4) Every appeal under this section shall be disposed of by the
appellate officer as expeditiously as possible.
(5) The costs of any appeal under this section shall be in the
discretion of the appellate officer.
(6) For the purposes of this section the principal Judge of the
Ahmadabad City Civil Court shall be deemed to be the district
Judge of the district, and the City of Ahmedabad shall be
deemed to be a district."
The order passed in appeal is made final under Section 10 of
the Act. The authority has power to recover the rent, etc. as an
arrears of land revenue (Section 14) and by deducting it from
salary or wages from certain employees in certain
circumstances (Section 15). Section 16 bars jurisdiction of
Courts, Section 17 protects any action taken in good faith.
Section 19 provides for repeal of certain statutes. It reads:
"19. The Bombay Government Premises (Eviction) Act, 1955
and any other corresponding law providing for the eviction of
occupants from public premises are hereby repealed:
Provided that anything done or any action taken (including
rules or orders made, notices issued, evictions ordered or
effected, damages assessed, rents or damages or costs
recovered and proceedings initiated) or purported to have been
done or taken under the corresponding provisions of this Act,
and shall be deemed to be and to have always been, as valid
and effective as if such thing of action was done or taken

189
under the corresponding provisions of this Act, as if this Act
had been in force when such thing was done or such action
was taken."
11. It is submitted by Mrs. Mehta that from the above
provisions of both the statutes, it is clear that the Housing
Board Act was enacted in the year 1961, while Public
Premises Act was enacted in 1972. In other words, the Public
Premises Act was enacted later in point of time, and it is a
special law relating to the public premises and, therefore, is
required to be given effect to. She also submitted that the
expression 'Public Premises' has been defined in Section 2(f)
in very wide 'terms and over' and above any premises
belonging to or taken on lease or requisition and by, or on
behalf of the State, Government, it includes any premises
belonging to, or taken on lease, by or on behalf, of, any
Corporation established by or under a Central or State Act and
owned or controlled by the State Government. She submitted
that so far as the premises belonging to or taken on lease or
requisitioned by or on behalf of the State Government is
concerned, the definition is exhaustive inasmuch as the
expression 'means' is used by the legislature, but so far as
other premises are concerned, it is of wide amplitude in view
of the fact that the expression used by the legislature is not
'means' but 'includes'. In other words, so far as other premises
are concerned, the definition as not exhaustive but inclusive.

190
She submitted that it cannot be contended that the Housing
Board is not a Corporation established under a State Act and
controlled by the State Government. No doubt, Mr. Gandhi,
contended that the Housing Board cannot be said to be a
Corporation within the meaning of Section 2(f)(iii) of the
Public Premises Act. But in my opinion, the said contention is
not well founded. Looking to various' provisions of the
Housing Board Act and also looking to the power conferred
on the State Government. I am of the opinion that the Housing
Board can be said to be a Corporation established under the
Act of 1961 and is controlled by the State Government and,
therefore, premises belonging to or taken on lease by or behalf
of the Board can be said to be 'Public Premises' within the
meaning of Section 2(f) of the Public Premises Act. The
resultant effect is that the provisions of the Public Premises
Act are applicable to premises belonging to or taken on lease
by or Behalf of the Housing Board.
12. There is an additional reason also why the submission of
Mrs. Mehta requires to be accepted. If it is held as contended
on behalf of the respondents that the Housing Board Act is
exhaustive and self contained legislation even with regard to
eviction of unauthorised occupants of Board premises and that
detailed provisions have been made in the Housing Board Act,
the legislature while enacting 'Public Premises' Act, would
have excluded the premises of the Housing Board from the

191
definition clause and also from the operation of the Public
Premises Act. The legislature, however, has not done so. It
cannot be presumed that the legislature has done anything in
futility or without application of mind or in ignorance of the
provisions of other Statutes. In fact not only in the definition
clause the premises of the Board are included, but a
notification under Section 3 of the Public Premises Act has
been issued by the State Government in the Official Gazette
appointing an officer on Special Duty as the competent Officer
for the purpose of exercise of the power conferred under the
Public Premises Act. Therefore, the conclusion reached by the
District Judge that the provisions of the Public Premises Act
are not applicable to the Board premises cannot be sustained.
In my opinion this is a jurisdictional error requires to be
corrected by issuing a writ of certiorari.
13. Mr. Vakharia, the learned counsel for the respondents
heavily relied on the definition of the 'Board premises' and
contended that the provisions of the Public Premises Act
Cannot apply to the Board Premises in view of the fact that the
Public Premises Act can apply only to the 'Public Premises'
and not the 'Board Premises'. He submitted that the 'Board
Premises' cannot be said to be 'Public Premises'. It cannot
however, be ignored that the expression 'public premises' as
defined in Clause(f) of Section 2 of the Public Premises Act is
inclusive and in its sweep it would also include 'Board

192
Premises'; provided the conditions laid down in that clause are
fulfilled. As discussed above, all the said conditions are
fulfilled in the present case, namely;' (i) the Board Premises is
premises belonging to or taken on lease by or on behalf of the
Corporation; (ii) the Corporation is established under the
Gujarat Housing Board Act, 1961; and (iii) the said
Corporation is controlled by the State Government and hence
the 'Board premises' would mean 'public premises'. Therefore,
the contention raised on behalf of the respondents requires to
be rejected and the submission made on behalf of the Board
requires to be accepted.
14. But in my opinion, the contention raised on behalf of Mrs.
Mehta that in view of the provisions of the Public Premises
Act, the provisions relating to the unauthorised occupation of
the Board premises in Housing Board Act stood repealed,
cannot be accepted. I have quoted Section 19 earlier which
provides for repeal of certain Acts. Mrs. Mehta attempted to
argue that this is a case of express repeal. According to her,
the Bombay Government Premises (Eviction) Act, 1955 and
'any other corresponding law providing for eviction of the
occupants from the public premises' are repealed. She
submitted that this is a case of express repeal and one has to
forget the provisions concerned the unauthorised occupation
and eviction contained in the Housing Board Act in view of
Section 19 of the Public Premises Act. I am afraid I cannot

193
uphold the said argument of Mrs. Mehta. So far as the
principles of interpretation of statutes are concerned, they are
very clear. It is well known that repeal is of two types; (i),
Express Repeal and (ii) Implied Repeal. So far as express
repeal is concerned, there is no difficulty since the legislature
itself provides for repeal of a named statute or statutes. In the
instant case, by Section 19 the legislature has expressly
repealed the Bombay Government Premises (Eviction) Act,
1955. This is express repeal. In view of express repeal, it is not
open to the Court now to refer to, rely on or base its decision
on the Bombay Government Premises (Eviction) Act, 1955.
But Mrs. Mehta is not right in submitting that the relevant
provisions of the Housing Board Act are expressly repealed.
When the legislature in Section 19 has stated that any other
corresponding law providing for the eviction of the occupants
from the public premises, is repealed' it cannot be said to be
express repeal but implied repeal. One has to consider the
relevant provisions of both the statutes, namely, the provisions
of the Public Premises' Act and of the Housing Board Act and
relying upon and following the well established principles of
Interpretation of Statutes come to a conclusion Whether the
provisions of the Housing Board Act stood repealed or
whether both the statutes stand together and, can be given
effect to by harmonious construction. If it is possible the
'corresponding law' cannot be treated as repealed, but must be

194
given effect to. On the other hand, if one comes to the
conclusion that 'corresponding law' cannot be given effect to
without violating the provisions of the repealing statute, by
applying the doctrine of implied repeal, no effect can be given
to that 'corresponding law.'
15. In this connection, my attention is invited to a decision of
this Court (Coram: B. K. Mehta, J.) in the case of State v.
Surabhai Mafatbhai, reported in (1982) 23 (2) GLR p. 596. In
that case, a notice was issued by the City Deputy Collector,
Ahmedabad under Section 202 of the Bombay Land Revenue
Code, 1879, calling upon the occupant to handover the vacant
possession of the land within thirty days since he was in
unauthorised occupation of the land. The said action was,
challenged by him by filing a suit in the City Civil Court,
Ahmedabad, contending, inter alia, that in the light of the
provisions contained in Section 19 of the Public Premises Act,
Section 202 of the Code, being 'corresponding law' stood
repealed. The City Civil Court accepted that argument and
held that Section 202 of the Bombay Land Revenue Code
stood repealed by Section 19 of the public Premises Act. The
State approached this Court. The learned single Judge came to
the conclusion that the City Civil Court was not right in
coming to the conclusion that the provisions of Section 202
stood repealed by Section 19 of the Public Premises Act.

195
16. After considering the ambit and scope of the expression
'corresponding law' this Court indicated some broad tests for
determining whether there is implied repeal of a particular
statute. The Court observed;
Firstly, whether there is a positive and irreconcilable
repugnancy between the provision of old and new statute.
Secondly, whether the two statutes relate to the same subject
matter and have the same purpose; and
Thirdly whether the new statute purports to replace the old one
in its entirety or only partially.
Another rule of law recognized in the principles of
interpretation is that the enactment of a general law broad
enough in it its scope and application to cover the field of
operation of a special or a local statute will generally not
repeal a statute which limits its operation to a particular phase
of the subject covered by the general law to particular locality
within the jurisdictive scope of general law to particular
locality within the jurisdictive scope of general statute.
17. Considering the provisions of both the statutes, namely,
the Public Premises Act and the Bombay Land Revenue Code,
this Court came to the conclusion that by the Public Premises
Act, the relevant provisions of the Bombay Land Revenue
Code did not stand repealed. The Court concluded "I have not
been able to appreciate how the learned City Civil Judge has
considered this provision contained in Section 202 of the Code

196
as a corresponding law, or part thereof, and, therefore,
consequently repealed in light of the provision contained in
Section 19 of the Public Premises Act. The substantive and
procedural law of summary eviction in the Code is a special
law in respect of the Government land. It is no doubt true that
"public premises" as defined in Section 2(f) of the Public
Premises Act means any premises belonging to Government
including any land which has been defined in the same terms
as defined in the Code. It appears that the learned Judge was,
therefore, persuaded to take the view that since the Public
Premises Act provides for eviction from the public premises, it
would also take in its sweep the eviction of unauthorised
occupants from the Government land and, therefore, the
procedural law as held down in Section 202 of the Code being
the same subject matter and, therefore, would amount to
corresponding law and necessarily stood repealed. In my
opinion, the learned Judge overlooked the well-recognised
rule of law of interpretation that enactment of a general law
broad enough in its scope and application to cover the field of
operation of a special, or local statute will generally not repeal
a statute which limits its operation to a particular phase of the
subject covered by the general law."
18. I am in respectful agreement with the view taken by my
learned brother Mehta, J. As stated by me hereinabove this is

197
not a case of express repeal and in the facts and circumstances
of the case, implied repeal cannot be presumed.
19. In this connection two cases decided by the Supreme Court
require to be considered. In Jain Ink Manufacturing Co. v.
L.I.C. of India, reported in AIR 1981 SC 670, the appellant
was inducted as a tenant by one Mithanlal, who was the owner
of the suit premises. The premises were, however, purchased
by the Life Insurance Corporation of India, at the auction sale
in execution proceeding and the appellant in view of the same
attorned to the new landlord. The new landlord gave a notice
under Section 106 of the Transfer of Property Act to the
appellant and determined his tenancy. It appears that
meanwhile the Public Premises (Eviction of Unauthorised
Occupants) Act, 1971 (Central Act) came into force and a
notice under Section 4(1) of the Act was issued to the
appellant by the State Officer. The appellant raised some
preliminary objections which came to be overruled and he
approached the High Court by filing a writ petition. The main
contention on behalf of the appellant was that the Estate
Officer had no jurisdiction to proceed with the matter under
the Public Premises Act in view of the fact that provisions of
the Delhi Rent Control Act, 1958 were applicable to his case.
The said contention having been negatived by the High Court,
the appellant approached the Supreme Court. The Supreme
Court took into account certain factors for the purpose of

198
coming to the conclusion that the provisions of the Public
Premises Act were applicable to the facts of the case and that
the appellant could not claim protection of the Rent Act. In the
first place, the Rent Act was passed in the year 1959 while the
Premises Act was passed in 1971. Secondly though in both the
Acts there were non obstante clauses the question to be
determined was whether the non obstante clauses operated in
the same field or had two different spheres though there might
be some amount of overlapping. The Court observed that in
such cases the conflict should be resolved by reference to the
object and the purpose of the law under consideration. After
referring to the earlier judgment in Ram Narain v. Simla
Banking Industrial Co. Ltd., reported in AIR 1956 SC 614, the
Court observed:
"In the light of the principles laid down in the aforesaid cases
we would test the position in the present case. So far as the
Premises Act is concerned it operates in a very limited field in
that it applies only to a limited nature of premises belonging
only to particular sets of individuals, a particular set of juristic
persons like companies, corporations or the Central
Government. Thus, the Premises Act has a very limited
application. Secondly, the object of the Premises Act is to
provide for eviction of unauthorised occupants from public
premises by a summary procedure so that the premises may be
available to the authorities mentioned in the Premises Act

199
which constitute a class by themselves. That the authorities to
which the Premises Act applies are a class by themselves is
not disputed by the counsel for the appellant as even in the
case of Northern India Caterers Pvt. Ltd. v. State of
Punjab, (1967) 3 SCR 399 : (AIR 1967 SC 1581) such
authorities were held to form a class and, therefore, immune
from challenge on Article 14 of the Constitution. Similarly,
the summary procedure prescribed by the Premises Act is also
not violative of Article 14 as held by this Court in Manganlal
Chhaganlal (P) Ltd. v. Municipal Corporation of Greater
Bombay, (1975) 1 SCR 1 : (AIR 1974 SC 2009).
Thus it would appear that both the scope and the object of the
Premises Act is quite different from that of the Rent Act. The
Rent Act is of much wider application than the Premises Act
inasmuch as it applies to all private premises which do not fall
within the limited exceptions indicated in Section 2 of the
Premises Act. The object of the Rent Act is to afford special
protection to all the tenants or private landlords or landlords
who are neither a Corporation nor Government or Corporate
Bodies. It would be seen that even under the Rent Act, by
virtue of an amendment a special category has been carved out
Under Section 25B which provides for special procedure for
eviction to landlords who requires premises for their personal
necessity. Thus, Section 25B itself becomes a special law
within the Rent Act. On a parity of reasoning, therefore, there

200
can be no doubt that the, Premises Act as compared to the
Rent Act, which has a very broad spectrum, is a special Act
and override the provisions of the Rent Act."
In these circumstances, the Supreme Court came to the
conclusion that the Premises Act had overriding effect over
the provisions of the Rent Act.
20. Very recently in Ashok Marketing Ltd. v.. Punjab National
Bank reported in (1990) 4 SCC 406 : (AIR 1991 SC855)
almost an identical question arose. Referring to Jain Ink
Manufacturing Co. Ltd. (supra), the Supreme Court reconciled
the provisions of the Public Premises Act as well as Delhi
Rent Control Act and observed as under (at page 878):
"The Rent Control Act makes a departure from the general law
regulating the relationship of landlord and tenant contained in
the Transfer of Property Act inasmuch as it makes provision
for determination of standard rent, it specifies the grounds on
which a landlord can seek the eviction of a tenant, it prescribes
the forum for adjudication of disputes between landlords and
tenants and the procedure which has to be followed in such
proceedings. The Rent Control Act can, therefore, be said to
be a special statute regulating the relationship of landlord and
tenant in the Union Territory of Delhi. The Public Premises
Act makes provision for a speedy machinery to secure eviction
of unauthorised occupants from public premises. As opposed
to the general law which provides for filing of a regular suit

201
for recovery of possession of property in a competent Court
and for trial of such a suit in accordance with the procedure
laid down in the Code of Civil Procedure, the Public Premises
Act confers the power to pass an order of eviction of an
unauthorised occupant in a public premises on a designated
officer and prescribes the procedure to be followed by the said
officer before passing such an order. Therefore, the Public
Premises Act is also a special statute relating to eviction of
unauthorised occupants from public premises. In other words,
both the enactments, namely, the Rent Control Act and the
Public Premises Act, are special statutes in relation to the
matters dealt with therein. Since, the Public Premises Act is a
special statute and not a general enactment the exception
contained in the principle that a subsequent general law cannot
derogate from an earlier special law cannot be invoked and in
accordance with the principle that the later laws abrogate
earlier contrary laws, the Public Premises Act must prevail
over the Rent Control Act."
Regarding non obstante clause contained in both the Acts, the
Court stated:
"As regards the non obstante clauses contained in Sections 14
and 22 and the provisions contained in Sections 50 and 54 of
the Rent Control Act, it may be stated that Parliament was
aware of these provisions when it enacted the Public Premises
Act containing a specific provision in Section 15 barring

202
jurisdiction of all courts (which would include the Rent
Controller under the Rent Control Act). This indicates that
Parliament intended that the provisions of the Public Premises
Act would prevail over the provisions of the Rent Control Act
in spite of the abovementioned provisions contained in the
Rent Control Act."
In the above view of the matter, the Court finally concluded-
"For the reasons aforesaid, we are unable to accept the
contention of the learned counsel for the petitioners that the
provisions contained in the Public Premises Act cannot be
applied to premises which fall with the ambit, of the Rent
Control Act. In our opinion, the provisions of the Public
Premises Act, to the extent they cover premises falling within
the ambit of the Rent Control Act, override the provisions of
the Rent Control Act and a person in unauthorised occupation
of public premises under Section 2(e) of the Act cannot invoke
the protection of the Rent Control Act."
21. From the above two judgments of the Supreme Court, it
becomes clear that what is required to be seen by the Court in
construing the statutes which come up for interpretation is the
ambit and scope of both the Statutes, operation of the fields
occupied by them, underlying object of the enactments, time
of the bringing into force the respective statutes; policy and
the legislative intent as conveyed by the language used in both
the Statutes, etc.

203
22. An additional factor to be considered, by the Court while
interpreting the Statute in question is 'whether the legislature
itself has treated a particular legislation having been repealed
by the subsequent statute'. In case of express repeal, there is no
difficulty at all. But in case of implied repeal, such difficulty
may arise. Since I am of the opinion that the instant case is not
of express repeal, it is necessary to consider whether the
legislature itself has treated the relevant provisions of the
Housing Board Act as repealed. The Public Premises Act is
Gujarat Act 12 of 1973. It was brought into force on June 26,
1973. Relying On these facts the learned counsel for the
respondents submitted that had the legislature considered and
treated Section 56 of the Housing Board Act as repealed, it
would neither have amended Clause (i) of Section 56(1)(a) nor
inserted clause (ii-a) thereto. They also submitted that the
Court will not presume that the legislature has made an
amendment in the statute which was repealed and that any
amendment, modification, substitution or addition in the
statute has been made by the legislature in futility or without
application of mind and that it should be ignored. In this
connection my attention was invited to the case of Municipal
Corporation, Delhi v. Shivshanker, reported in AIR 1971 SC
815 : (1971 Cri LJ 680). In that case also a similar contention
was advanced that in view of the enactment of the Essential
Commodities Act, 1955 and the Fruit Products Order, 1955

204
issued thereunder, the provisions of the Prevention of Food
Adulteration Act, 1954 stood impliedly repealed. Considering
the purpose and object of both the statutes, the Court rejected
the said argument. The Court also observed: "The two
provisions may, therefore, have within these narrow limit
conterminous fields of operation." Both the statutes can
function with full vigour side by side in their own parallel
channels. Even if they happen to some extent to overlap,
Section 26 of the General Clauses Act fully protects the guilty
parties against double jeopardy or double penalty."
But an important factor was also taken into account by
Hon'ble Supreme Court and it was the amendments made from
time to time in both the enactments. Even though the Essential
Commodities Act was enacted in 1955, the Food Adulteration
Act and the Rules made thereunder came to be amended in
1956 and again in 1960. Relying upon this aspect the Court
observed;
"The subsequent amendments of the Adulteration Act and of
the Essential Commodities Act by the Parliament and the
amendment of the Adulteration Rules would also tend to
negative any legislative intendment of implied repeal of the
Adulteration Act by the Essential Commodities Act or the
Fruit Order."
23. In my opinion, what Shiv Shanker's case (supra) lays down
is that a subsequent amendment made in a statute goes a long

205
way in deciding, whether an enactment is treated by the
legislature as having been repealed. If Section 56 of the
Housing Board Act is treated as having been repealed by the
Public Premises Act by the legislature, there was no necessity
for the legislature to amend Clause (i) or to insert Clause (iia)
in Sub-section (1) which was done by Act No. 1 of 1973 and
13 of 1973 respectively. This circumstance in my opinion,
therefore, goes to show that the legislature has not treated
Section 56 of the Housing Board Act as repealed.
24. A similar view is also taken by the High Court of Bombay
in the case of Arjoon Babloo v. G. V. Jawalker reported in
AIR 1981 Bom 72.
25. There is still one more reason why the provisions of the
Housing Board Act cannot be said to be impliedly repealed. I
have quoted the relevant provisions of Section 4 of the Public
Premises Act and Section 56 of the Housing Board Act earlier.
Looking to the provisions of both the statute it becomes clear
that a person can be said to be in unauthorised occupation of a
public premises if he has not paid rent for a period of more
than two months. On the other hand, if the person is occupying
the Board premises, he can be said to be in unauthorised
occupation only if he does not pay rent for a period of more
than six months. Now, if the contention of Mrs. Mehta is
accepted that in view of the Public Premises Act, the relevant
provisions of the Housing Board Act stood repealed; even

206
though as per the amendment made by the Legislature by Act
1 of 1973 in the Housing Board Act, a person cannot be said
to be in unauthorised occupation till he is in arrears of rent for
more than six months, he would incur liability of eviction
under the Public Premises Act as soon as he was in arrears of
rent for more than two months. This is not the intention of the
legislature. In fact, Clause (i) of Section 56(1)(a) was amended
and the words 'six months' were substituted for the words 'two
months'. The Court cannot ignore the legislative intent and the
amendment made in the statute in 1973.
26. A similar is the effect of insertion of Clause (iia) in
Section 56(1)(a) of the Housing Board Act. In the Public
Premises Act, there is no provision relating to the commission
of any act contrary to the provisions of the Gujarat Ownership
Flats Act, 1973 or of the Declaration, Deed of Apartment or of
the bye-laws made under that Act or of any rules or
regulations made under such bye-laws. This ground is
available only under the Housing Board Act in respect of the
Board premises. This is also an addition made by the
Legislature by Gujarat Act No. 13 of 1973. It cannot be
forgotten that the Public Premises Act is Act No. 12 of 1973.
If the doctrine of implied repeal is applied and the provisions
of the Housing Board Act are treated as impliedly repealed the
Court cannot give effect to the legislative amendment made by
Gujarat Act No. 13 of 1973 and the said amendment will have

207
to be ignored. It is settled principle of interpretation of statutes
that the Court will not presume that the legislature has made
any amendment in a repealed statute. Thus, the amendments
made in the Housing Board Act in 1973 also tend to negative
any legislative intendment of implied repeal of that Act by
virtue of Section 19 of the Public Premises Act.
27. Having given thoughtful and anxious consideration to the
question involved in these petitions and applying the well
established principles laid down in various decisions referred
to above to the facts and circumstances of the present case, I
am of the view that the Public Premises Act has neither
expressly nor impliedly repealed any of the provisions of the
Housing Board Act for the following reasons. Both the
statutes, viz. the Public Premises Act as well as the Housing
Board Act have been enacted by the same legislature; both of
them deal with premises belonging to certain specified
categories; both of them make a departure from the general
law regulating the relationship of landlord and tenant
contained either in the Transfer of Property Act or in the
Bombay Rents, Hotel and Lodging House Rates Control Act,
1947; both of them lay down summary procedure for eviction
of unauthorised occupants from the premises belonging to the
specified categories; the Public Premises Act has not expressly
repealed any of the provisions of the Housing Board Act; the
legislature has not treated the provisions of the Housing Board

208
Act as having been impliedly repealed which is apparent from
the amendments made in the Housing Board Act by Acts 1 of
1973 and 13 of 1973. For all these reasons, in my considered
opinion both the statutes can be said to be special statutes and
none of the provisions of the Housing Board Act has been
repealed by Public Premises Act.
28. But the question then is whether the provisions of the
Public Premises Act would also be applicable to the premises
of the Housing Board in question. From the above discussion,
in my judgment, the District Judge was right in observing that
the Housing Board Act cannot be said to be a 'corresponding
law' within the meaning of Section 19 of the Public Premises
Act and, therefore, it does not stand repealed by the Public
Premises Act. But that does not necessarily meal) that the
provisions of the Public Premises Act would not be applicable
to the premises of the Gujarat Housing Board. As pointed out
earlier, the expression "Public Premises" includes any
premises belonging to or taken on lease by or on behalf of the
Corporation -- Gujarat Housing Board. This fact cannot be
ignored by the Court while deciding the matters. In the
exercise of the powers under Section 3 of the Public Premises
Act, the Competent Officer is also appointed and initially the
orders are passed by the Competent Officer. This fact is not
disputed by the respondents. In fact it is against the orders
passed by the Competent Officer that the respondents

209
approached the District Court by filing 396 appeals. Thus,
looking to the provisions of the Public Premises Act, it cannot
be contended that the premises of the Gujarat Housing Board
cannot be said to be a public premises within the meaning of
the Public Premises Act. In these circumstances, in my
opinion, the alternative contention of Mrs. Mehta requires to
be accepted that if the provisions of the Housing Board Act as
well as Public Premises Act are applicable to the respondents,
the Board is at liberty to take action under either of the laws.
That point is also no longer res integra. In Manganlal
Chhaganlal (P) Ltd. v. Municipal Corporation of Greater
Bombay, reported in AIR 1974 SC 2009, a similar question
arose before the Court. Two parallel procedures were provided
for the purpose of recovery of possession of property. One
mode provided the forum of Civil Courts while the other
provided the forum of the Administrative Authorities. The first
one was the ordinary mode of filing a Civil Suit, while the
other was of a summary nature; more drastic, onerous and
harsh. It was contended on behalf of the petitioner that the
onerous, harsh and drastic procedure was violative of Article
14 of the Constitution of India and if ordinary procedure was
available, drastic procedure could not be resorted to. The
Supreme Court rejected the contention of the petitioner and
held that if two modes of procedure are provided by a statute
one ordinary and other drastic the statute would not be bad on

210
that ground. The fact that in such cases the executive will
choose which cases are to be tried under the special procedure
will not affect the validity of the statute.
The Court, therefore, held that if two procedures are provided
by the Act, the executive authority had power to choose any
mode and to proceed accordingly.
29. In Arjoon Babloo, the High Court of Bombay also relying
upon Maganlal Chhaganlal (AIR 1974 SC 2009) held that the
Railway authorities had power to proceed against unauthorised
occupants either under the Public Premises Act or under the
Railway Act.
30. In view of the above discussion, in my opinion, it cannot
be said that by Public Premises Act, Chapter VI or Section 56
is impliedly repealed. As per the well settled principle of
interpretation of the statute and the judgments of the Supreme
Court, as well as of this Court, such implied repeal cannot be
inferred. I am of the opinion that it also cannot be said that
since the provisions of the Housing Board Act are applicable,
provisions of the Public Premises Act cannot apply to the
premises in question. In view of the fact that the premises in
question can be said to be not only, the Board Premises within
the meaning of the Housing Board Act, but also public
premises within the meaning of the Public Premises Act the
provisions of both the Acts can be applied. If this is the legal
position" as per the ratio laid down in Maganlal Chhaganlal's

211
case (supra) the authority has choice to proceed either under
the Housing Board Act or under the Public Premises Act.
31. I wish to make one thing clear from the provisions of
Section 56 of the Housing Board Act, as amended in 1973, an
occupant of the premises of the Board does not incur liability
of eviction until he does not pay rent for a period of more than
six months while an occupant of the public premises under the
Public Premises Act incurs such liability if he does not pay
rent due for a period of more than two months. Thus, the
protection given to the occupiers under the Housing Board Act
is wider than the protection granted under the Public Premises
Act. There is no specific ground of eviction in the Housing
Board Act for committing acts of waste etc. which is found in
the Public Premises Act. On the other hand, an occupier of the
premises of the Housing Board is liable to eviction if he
commits any act contrary to the provisions of the Gujarat
Ownership Flats Act, 1973, or of any Declaration, Deed of
Apartment or of the bye-laws made under that Act or of any
rules or regulations made under such bye-laws. The said
provision does not find place in the Public Premises Act.
Therefore, the grounds of eviction mentioned in both the
statutes can be said to be substantive law relating to eviction
and the occupiers of the Board premises, in my judgment are
governed by the provisions of the Housing Board Act only and
not by the Public Premises Act. It is only after an occupier

212
incurs the liability of eviction under the provisions of the
Housing Board Act that the Board may initiate proceedings
against him for eviction either under the Housing Board Act or
under the Public Premises Act.
32. Mr. Vakharia as well as Mr. Gandhi, learned counsel for
the respondents contended that the procedure followed by the
competent officer in the instant case is not proper and the
orders having been passed without affording reasonable
opportunity of being heard and without application of mind
are violative of the principles of natural justice and fair play.
The learned District Judge has also upheld the said contention.
In my opinion, the learned District Judge is right on this point.
Mrs. Mehta also could not point out anything against the
finding recorded by the District Judge on this aspect. In these
circumstances, even though the petitions filed by the Board
are required to be allowed the matter will have to go back to
the competent authority by directing him to afford reasonable
opportunity of being heard to the respondents and pass orders
afresh in accordance with law and in the light of observations
made in this judgment after complying with the principles of
natural justice.
33. In the result the petitions are partly allowed. The order of
the District Judge, Bhavnagar, setting aside the order of
eviction is hereby confirmed on the ground that the eviction
order was passed by the Competent Officer without affording

213
reasonable opportunity to the respondents. However, his
decision that the provisions of the Gujarat Public Premises
Act, 1972 are not applicable to the premises of the Gujarat
Housing Board is reversed and it is held that none of the
provisions of the Gujarat Housing Board Act, 1961 stands
repealed either expressly or by necessary implication by the
Gujarat Public Premises Act, 1972. It is clarified that after an
occupier of the Board Premises incurs liability of eviction
under the provisions of the Gujarat Housing Board Act, 1961,
it is open to the Board authorities to proceed against such
unauthorised occupant either in accordance with the
provisions of the Housing Board Act or under the Public
Premises Act. Rule is accordingly made absolute with no
orders as to costs.

214
Bombay High Court
Khatri Builders vs Mohmed Farid Khan And Ors. on 19
September, 1991
Bench: A Savant
JUDGMENT
A.V. Savant, J.
1. This appeal seeks to challenge the order dated 19th March
1979 passed by the City Civil Court in Notice of Motion No.
4996 of 1978 taken out by the plaintiffs in their Suit No. 6861
of 1978. The suit has been filed on the 26th December 1978
by 17 plaintiffs, who are the Flat Owners in a building called
'Aashiana' situate at 22. Club Road (Maratha Mandir Road),
Bombay 400 008. The said 17 plaintiffs are respondents Nos.
1 to 17 in this appeal. The appellant in this appeal viz. M/s.
Khatri Builders is defendant No. 1 in the said suit. Defendants
Nos. 2, 3 and 4 are the other Fat owners, who are respondents
Nos. 18. 19 and 20 in this appeal. The suit has been filed for
the relief of injunction restraining the first defendant promoter
from constructing any additional structure or construction on
the terrace of the building 'Aashiana'.
2. It appears that in 1976 the plaintiffs entered into the usual
agreement for purchase of flats in the building to be
constructed by 'the appellant who is the 'promoter' within the
meaning of the provisions of section 2(c) of the Maharashtra

215
Ownership Fats (Regulation of the Promotion of Construction,
Sale, Management and Transfer) Act, 1963 (for short, the
Ownership flats Ltd). The building was to consist of ground
floor stilts and five floors with four flats each, resulting in a
total of 20 flats. In accordance with the Agreements entered
into in 1976 the construction of the building with ground plus
5 floors was completed around May 1978. There is no dispute
that the possession of the Fats was handed over to the
plaintiffs and the other flat owners around June, 1978. In the
meanwhile, the appellant promoter acquired an additional
piece of adjoining land, referred to in the plaint as 'house
gully' which was about 5 feet wide and as result of the
acquisition of the said house gully, the appellant became
entitled to an additional F.S.I. of 500 sq. ft. The appellant,
therefore, proposed to put up a terrace flat of about 500 sq.ft.
and submitted plans for construction of the said terrace flat.
The Planning Authority approved the said plans on September
20, 1978. The appellant, therefore, made preparations for
constructing the terrace flat, as a result of which the present
suit was filed on the 26th December 1978.
3. By the Notice of Motion the plaintiffs prayed for ad-interim
reliefs restraining the appellant from constructing any
additional structure or putting construction of any nature
whatsoever on the terrace of the said building 'Aashiana'. The
learned trial Judge, who heard the motion took the view that-

216
(a) the Civil Court had the necessary jurisdiction to entertain
the suit and that such a dispute did not lie within the exclusive
jurisdiction of the Housing Commissioner, as provided in sub-
section (2) of section 7 of the Maharashtra Ownership Flats
(Regulation of the Promotion of Construction, Sale.
Management and Transfer) Act, 1963; and
(b) the plaintiffs were entitled to an injunction restraining the
appellant from putting up any structure or carrying out any
construction on the terrace of the said building.
It is this order dated 19th March 1979, which is challenged in
this appeal.
4. I have heard Shri Abhyankar for the appellant promoter and
Shri Sawant for the respondents plaintiffs. Shri Abhyankar for
the appellant has made the following submissions:---
(i) In view of the judgment of the Division Bench of this Court
in A.O. No. 159/80 and C.R.A. No. 628/80 decided on 2nd
September 1983 and reported in Ishwar Chinga Shetty v.
Jivanji Bhulabhai Patel, 1987(2), Bombay Cases Reporter,
page 371, such a suit cannot lie in the Civil Court in as much
as the Housing, Commissioner has got the exclusive
jurisdiction to entertain such a suit;
(ii) The ouster of jurisdiction contemplated by sub-section (2)
of section 7 would operate even during the construction of the
building as also after the construction irrespective of the fact

217
as to whether possession has been given to the flat owners or
not;
(iii) The provision of ouster jurisdiction of the Civil Court
contained in section 7(2) of the Ownership Flats Act, 1963
would also apply whether the additional construction is
complete or not; and
(iv) In view of the insertion of section 7-A by Maharashtra Act
No. 36 of l986 which has amended certain parts of section 7 of
the 'Ownership Flats Act', the ratio of the decision of
Jahagirdar, J., reported in (1986) 88, Bombay Law Reporter,
page 100:20.F.C. 15 viz., Kalpita Enclave Co-operative
Housing Society Ltd v. Messrs Kiran Builders Pvt.
Ltd., would no longer be applicable to the facts of the present
case.
5. In order to appreciate these contentions, it is necessary, at
the outset, to reproduce section 7 of the unamended
Ownership Flats Act, 1963, as it stood on the date of the filing
of the suit, which reads as under ;---
"7(1) After the plans and specifications of the building, as
the promoter shall not make---
(i) any alterations in the structure described therein in respect
of the flat or flats which are agreed to be taken, without the
previous consent of that, person; or

218
consent of all the persons who a have agreed to take the flats.
(2) Subject to sub-section (1), the building shall be constructed
and completed in accordance with the plans and specifications
aforesaid, and if any defect in the building or material used, or
if any unauthorised change in the constructions is brought to
the notice of the promoter within a period of one year from the
date of handing over possession, it shall wherever possible be
rectified by the promoter without further charge to the persons
who have agreed to take the flats, and in, other cases such
persons shall be entitled to receive reasonable compensation
for such defect or change. Where there is a dispute as regards
any defect in the building or material used, or any
unauthorised change in the construction, or as to whether it is
reasonably possible for the promoter to rectify any such defect
or change, or as regards the amount of reasonable
compensation payable in respect of any such defect or change
which cannot be, or is not rectified by the promoter, the matter
shall, on payment of such fee as may be prescribed, be
referred for decision to the Housing Commissioner appointed
under the Bombay Housing Board Act, 1948 if the building is
situated in the Bombay or Hyderabad area and to the Housing
Commissioner appointed under the Madhya Pradesh Housing
Board Act, 1950 if the building is situated in the Vidarbha

219
region of the State, or to any officer not lower in rank than a
Superintending Engineer as the State Government may by
general or special order specify in this behalf, within a period
of two years from the date of handing over possession. The
Housing Commissioner or such officer shall after inquiry
record his decision, which shall be final".
Before the learned trial Judge it was contended on behalf of
the promoter that in view of the scheme of section 7 of the
said 1963 Act reproduced above, the Civil Court would not be
competent to entertain the dispute which can be entertained by
the Housing Commissioner alone. It was then contended that
under the Agreements entered into in the year 1976 with the
flat owners viz., the plaintiffs, they had initially, while
entering into agreements in the year 1976 given their consent
authorising the promoter-appellant to make additions,
alteration and to raise an additional storey at any time, as may
be permitted by the Bombay Municipal Corporation. Reliance
was placed by the appellant on Clauses 3 and 12 of the said
1976 Agreement. In particular, the appellant placed reliance
on the closing portion of Clause 12 of the said Agreement,
which reads as under:---
"The party of the first part shall have a right to make
additions, alterations, raise additional storey or structures at
any lime as may be permitted by the Bombay Municipal
Corporation and such additional structures or storeys shall be

220
the sole property of the party of the first part who shall be
entitled to deal or dispose it of in any way they choose".
Relying upon this clause, it was contended before the learned
trial Judge that the consent given by the flat owners at the time
of entering into agreements was a valid consent for the
purpose of section 7 of the Ownership Flats Act and that it
was not necessary for the promoter to obtain fresh consent of
the fat owners even in a case where the flat owners were put in
possession of the flats and as a result of the subsequent
developments the promoter had become entitled to put up an
additional floor on the terrace of the building. Both these
contentions have been rejected by the trial Court. Hence, this
appeal.
6. Coming to the first contention of Shri Abhyankar about the
exclusion of the jurisdiction of the Civil Court to decide the
disputes raised by the plaintiffs, a reference must first be made
to the decision of V.A. Naik, J., dated 24th October 1966 in
Appeal from Order No. 299 of 1965. That was the case of Shri
Kantilal v. Ganesh Sadashiv, In Kantilal 's case, the facts were
some what identical with the facts of the present case in as
much as the promoter was proposing to construct an additional
flat on the terrace. The question was whether the additional
flat on the terrace amounted to an additional structure and thus
fell within the meaning of section 7(l)(ii) of the Act. V.A.
Naik. J., held that construction of an additional flat on the

221
terrace amounted to an additional structure within the meaning
of section 7(l)(ii) of the Act.
7. The decision in Kantilal's case was rendered in October,
1966. On 29th June 1976 Apte, J., decided Civil Revision
Application No. 185 of 1976 of Shakuntaladevi Purushottam
Jogai v. Sunita Traders,. Apte, J., proceeded on the footing
that the Civil Court had jurisdiction to deal with the questions
of the contravention of the provisions of section 7(1) of the
Act. However, it must be conceded that the question of
exclusive nature of the jurisdiction of the authority mentioned
in section 7(2) viz., of the Housing Commissioner, was not
specifically raised before Apte, J., and was, therefore, not
decided. Apte, J., however, considered the question as to
whether the consent given by the flat owners at the time of
entering into agreements with the promoter would be the
consent contemplated by section 7(1) of the Act. The learned
Judge held that a blanket consent obtained by the promoter
from the intending purchasers of the flats was not the consent
envisaged under section 7(1) of the Act. This decision was
rendered on June 29,1976.
8. R.L. Aggarwal, J., had occasion to consider the position
again in Smt. Neena Sudarshan Wadia v. M/s. Venus
Enterprises, A.O. No. 575 of 1982 with A.O. No. 875 of 1982,
decided on February 9,1983, reported in 1984(2) Bom.C.R.
505. Aggarwal, J., came to the conclusion that the promoter

222
cannot under the cloak of the blanket consent obtained under
the proforma agreement of sale carry out the work of
additional structures thus nullifying the provisions which are
made essentially for the protection of the purchasers of flats.
9. S.K. Desai, J., also had occasion to consider the question in
A.O. No. 159 of 1980 with Civil Revision Application No.
628 of 1980. On an examination of the judgment delivered by
V.A. Naik, J., on 24th October 1966 in A.O. No. 299 of 1965,
S.K. Desai, J., was of the opinion that the view that if a
dispute of the type which had arisen in Appeal from Order No.
159/1980 and C.R.A. No. 628/1980 was referrable to the
Housing Commissioner and was held to be exclusively within
his jurisdiction, it would make a mockery of the various
provisions contained in the said 1963 Act and of the right
conferred on the purchasers of flats by the Ownership Flats
Act. S.K. Desai, J., therefore, referred the matter to a Division
Bench. .
10. The Division Bench came to the conclusion that the
exclusive jurisdiction of the authority under section 7(2) of the
Act depended upon the existence of jurisdictional facts viz.
(i) alteration in respect of the structure of the flat or building
without the consent of the flat owners;
(ii) defect in the building;
(iii) use of defective material; and
(iv) unauthorised change in the construction.

223
The Division Bench, therefore, came to the conclusion that if
the facts mentioned in section 7(2) were present and the other
requirements as mentioned in section 7(2) were satisfied, then
and then alone the authority mentioned under section 7(2) will
have exclusive jurisdiction to deal with those questions
mentioned in section 7(2) of the Act. After having said this in
Para 16, the Division Bench dealt with the question of ouster
of the jurisdiction of the Civil Court either by express
provision or by necessary implication. In para 18 of the
judgment, the Division Bench considered the arguments of the
plaintiffs in the case referred to the Division Bench and at the
end of para 18 observed as under :---
"We may repeat that the contention of Shri Walavalkar that
the nature of the present suit as a whole claiming declaration
and injunction against defendant No. 4 does not fall within the
limited scope and compass of section 7 can be raised by him
before the teamed Single Judge for consideration".
11. After having said as above, the Division Bench referred to
the decision of the Supreme Court in Dhulabhai v. State of
Madhya Pradesh, AIR 1968 SC 78 on the question of the
exclusion of the jurisdiction of the Civil Court. It also referred
to the decision of the Supreme Court in the case of Premier
Automobiles v. Kambrar Shantaram, AIR 1975 SC 2238on the
question of the exclusion of the jurisdiction of the Civil Court.
After referring the decision of the Supreme Court in the case

224
of Income Tax Officer v. M.K. Mohammed Kunhi, in A.I.R.
1969 Supreme Court, 430, the Division Bench observed in
para 25 of the judgment, at page 381 of the Report as under:---
"A Civil Court, no doubt, can grant relief of declaration and
injunction, including interim injunction, but for grant of such
reliefs to the aggrieved flat owners, the Civil Court would be
required to first decide disputed facts contemplated by section
7 of the Act, which are jurisdictional facts to be determined by
the Housing Commissioner for exercising his jurisdiction.
There would thus be two forums functioning in the same area
resolving similar disputes."
After having answered the reference thus, the Division Bench
directed that the matters be placed before the teamed Single
Judge for decision.
12. Pursuant to the above Division Bench decision, the matters
were placed before R.A. Jahagirdar, J., and the said decision
of the learned Single Judge in Kalpita Enclave Co-operative
Housing Society Ltd.'s case is the one which is reported in
(1986) 88, Bombay Law Reporter, page 100. Jahagirdar, J.,
summed up the facts of the cases before him and observed that
the plaintiffs in the three suits were purchasers of flats from
the promoter who was required to abide strictly by the
provisions contained in the 1963 Act and also to abide by the
terms and conditions of the agreement under which the
plaintiffs had agreed to purchase the flats. In all the cases

225
before Jahagirdar, J., possession was delivered to the different
plaintiffs and the promoter had started some construction more
than a year after the possession of the flats was given to the
plaintiffs. In all the cases before Jahagirdar, J., the proposed
construction started by the promoter was contrary to the
provisions of section 7(1) of the Act inasmuch as there was no
consent obtained from the plaintiffs for starting the said
construction and, at any rate, the said action of the promoter
was contrary to the covenants contained in the agreements
pursuant to which the plaintiffs had agreed to purchase the
flats.
13. Jahagirdar, J, referred to the decision of V.A. Naik, J.,
rendered on 24th October, 1966, the decision of Apte. J.,
rendered on 29th June, 1976 and the decision of R.L
Aggarwal, J., rendered on February 9, 1983. After referring
the Division Bench decision, Jahagirdar. J., observed, thus, at
page 107 :
"This unauthorised construction, if it has already been made
before the possession is given, will be completely covered by
the provisions of section 7(2) of the Ownership Flats Act. If,
however, the unauthorised construction is made or is being
made after the possession has been given, then, in my opinion,
the provisions of section 7(2) will not be applicable because,
as already mentioned above and it is worth repeating, section
7(2) will apply only to a situation where the possession of

226
completed structure is given to the flat owners or to the body
corporate, as the case may be. In all these cases, therefore,
where after giving the possession, the promoter has ventured
to, with or without the sanction of the Municipal Corporation,
construct a new building or a new structure which is not
warranted by the promises contained in the agreement with the
flat purchasers, obviously there is a contravention of section
7(1) of the Ownership Flats Act. At the same time since it is
unauthorised construction which is not covered by the
provisions of section 7(2), the authority under section 7(2) will
naturally not have jurisdiction to entertain any complaint from
the flat owners in respect of the same. A contravention of
section 7(1) of the Ownership Flats Act gives rise to a cause of
action to the plaintiffs' in each of these cases and since this
cause of action is not within, the Jurisdiction, let alone the
exclusive jurisdiction of the authority mentioned under section
7(2), the plaintiffs' remedy is only in the Civil Court. The
contravention of section 7(1) of the Ownership Flats Act gives
a cause of action because any construction carried on by the
promoter which is not in accordance with the plans and
specifications of the building on the basis of which the flat
owners agreed to purchase the flats will be an unauthorised
construction A negative obligation placed upon the promoter
by section 7, if broken, must necessarily give rise to a civil
cause of action, though it has not been a penal offence under

227
the provisions of this Act I do not see how when such a cause
of action arises, the Civil Court can be said to have no
Jurisdiction to hear and decide the same. It is only when the
defect in the building or material of a flat or a building of
which possession is given or when possession of a structure is
given which is found to be unauthorised, that the question of
initiating a process for the purpose of rectification of the
defect or of obtaining the compensation as outlined in section
7(2) can be started and that also in respect of the properties of
which possession has been given. It is clear, therefore, that
when the promoter is proceeding to make alterations or
additional structures which are in contravention of section
7(1), he is liable to be proceeded against in a Civil Court
which alone has got jurisdiction."
14. Jahagirdar, J., thereafter referred to the arguments
advanced on behalf of the promoters at pages 107 and 108 of
the Report and rejected the said arguments at page 108. The
argument that alternate machinery provided by section 7(2) of
the Act was not satisfactory or that at the particular moment
the forum was not available to the person aggrieved within the
meaning of section 7(2) of the Act was also considered by
Jahagirdar, J. In the end, Jahagirdar, J., summarised his
conclusions as under:
(1) Section 7 of the Ownership Flats Act, imposes an
obligation on the promoter to construct the buildings and

228
otherwise develop the property strictly in accordance with the
agreements entered into with the flat purchasers and the plans
and specifications upon the basis of which the agreements are
entered into.
(2) The said provision, therefore, also bestows a
corresponding right upon the flat purchaser to compel the
discharge of this obligation on the part of the promoter.
(3) If a breach of this obligation is noticed in the flats or
buildings possession of which has been given to the flat
purchaser or to the body corporate representing the flat
purchasers, then that breach can be remedied only in the
manner provided by sub-section (2) of section 7.
(4) If, however, the breach of the obligation or the
contravention of section 7(1) is noticed or apprehended before
the possession is given, action for its prevention can be
brought in a Civil Court, section 7(2) operates only after the
possession is given, apprehended contravention is not covered
by that provision.
(5) Since section 7(2) applies to completed structures, any act
towards further contravention even after the possession is
given can be prevented by filing a suit in the Civil Court.
(6) The contravention contemplated in section 7(l) or in
section 7(2) which includes alteration in the structure or the
construction of additional structure is not confined to the
construction of the buildings only; this contravention may

229
extend to the construction of the additional structure not in the
original plans and specifications as approved by the local
authority. Thus if the original plans and specifications on the
basis of which the persons were persuaded to purchase the
flats disclosed that certain areas will be kept open, it would be
a clear contravention of the agreements as well as of law if the
promoter proceeds to construct additional structures on those
open spaces even with the sanction of the Municipal
Corporation .
(7) If, however, the property is conveyed to the flat purchasers
or to the body corporate representing them, then naturally the
promoter cannot and will not meddle with the property
because such an act on his part will amount to an act of
trespass making him liable for both civil and criminal action."
15. In view of the above, in my view it is not possible to
accept any of the contentions raised by Shri Abhyankar. I am
in respectful agreement with the views expressed by
Jahagirdar, J., which have been summarised above and it is not
necessary for me to repeat the said discussion over again. In
view of the conclusions summarised by Jahagirdar, J.,
therefore, the first contention of Shri Abhyankar that it is the
Housing Commissioner who alone has exclusive Jurisdiction,
must be rejected.
16. Similarly, the second contention that the ouster of
Jurisdiction contemplated by sub-section (2) of section 7

230
operates also during construction and after the construction
irrespective of the fact whether the possession was given to
the flat owners or not must also be rejected.
17. The third contention of Shri Abhyankar that the ouster of
jurisdiction would also take effect whether the additional
construction is complete or not is also liable to be rejected.
Once it is held that the attempt of the promoter in trying to put
up a terrace flat amounts to making any other alteration in the
structure of the building or construct any additional structure
without the previous consent of all the persons who have
agreed to take the flats as contemplated by Clause (ii) of sub-
section (1) of section 7 of the said 1963 Act, it must follow
that the Civil Court alone has Jurisdiction. As summarised in
proposition No. 4 by Jahagirdar, J., the breach of the
obligation or contravention of section 7(1), if it is noticed or
apprehended before possession is given, action for its
prevention can be brought in a Civil Court. Section 7(2)
operates only after possession is given; apprehended
contravention is not governed by section 7(2). Similarly,
assumed up in proposition No. 6 by Jahagirdar, J., the
contravention contemplated in section 7(1) or in section 7(2)
which includes alteration in the structure or the construction of
additional structure is not confined to the construction of the
buildings only. This contravention may extend to the
construction of any additional structure not in original plans

231
and specifications as approved by the local authority. As far as
the present case is concerned, what the appellant proposes to
do is to put up an additional flat on the terrace as sanctioned
by the Planning authority pursuant to his acquiring additional
F.S.I. in the year 1977. In my view, the dispute clearly falls
within the mischief of Clause (ii) of sub section (1) of section
7 of the Act. It must be pointed out that when the suit was
filed in the year 1978, section 7 stood, as has been reproduced
above. As far as section 7(1 )(ii) of the Act is concerned, there
is an amendment by virtue of Maharashtra Act No. 36 of 1986,
and the provision now reads as under:---
"Section 7(l)(ii) any other alterations or additions in the
structure of the building without the previous consent of all
the persons who have agreed to take the flats in such
buildings".
In my view, the change in the phraseology of Clause (ii) of
sub-section (1) of section 7, as amended by Maharashtra Act
No. 36 of 1986 would not make any difference in the facts of
the present case where the question involved is whether the
appellant promoter can be permitted to put up an additional
floor on the terrace.
18. Shri Abhyankar's last contention is based on section 7-A
which has been inserted by Maharashtra Act No. 36 of 1986.
Section 7-A reads as under:---

232
"7-A. For the removal of doubt, it is hereby declared that
Clause (ii) of sub-section (1) of section 7 having been
retrospectively substituted by Clause (a) of section 6 of the
Maharashtra Ownership Flats (Regulation of the promotion of
construction, sale, management and transfer) (Amendment)
Act, 1986 (hereinafter in this section referred to as "the
Amendment Act"), it shall be deemed to be effective as if the
said Clause (ii) as so substituted had been in force at all
material times, and the expression "or construct any additional
structures" in Clause (ii) of sub-section (1) of section 7 as it
existed before the commencement of the Amendment Act and
the expressions "constructed and completed in accordance
with the plans and specifications aforesaid" and "any
unauthorised change in the construction" in sub-section (2) of
section 7 shall, notwithstanding anything contained in this Act
or in any agreement, or in any judgment, decree or order of
any Court, be deemed never to apply or to have applied in
respect of the constructions of any other additional buildings
or structures constructed or to be constructed under a scheme
or project of development in the layout after obtaining the
approval of a local authority in accordance with the building
rules or building bye-laws or Development Control Rules
made under any law for the time being in force"
According to the learned Counsel, the insertion of section 7-A
was to get over the difficulty created by the Judgment of

233
Jahagirdar, J., in the case of Kalpita Enclave Co-operative
Housing Society Ltd. v. Messrs Kiran Builders Pvt
Ltd., reported in (1986) 88, Bombay Law Reporter, 100
referred to above However, the Statement of Objects and
Reasons of the Amending Act No 36 of 1986 reads as under:
"The prohibition of making additions and alterations under
this provision is in relation to a building wherein the
purchasers of the flats have taken or to take flats. It was never
intended that this provision should operate even in respect of
construction of additional buildings according to a scheme or
project of development of total layout. In Kalpita Enclave Co-
operative Housing Society Ltd. v. Kiran Builders Private
Ltd, 1986 Mh.L.J. 110, the High Court of Bombay has held
that the contravention contemplated in section 7(1) or in
section 7(2) which includes alterations in the structure or
construction of additional structures, is not confined to the
construction of the buildings only; and this contravention may
extend to the construction of any additional structure not in the
original plans and specifications as approved by me local
authority Such an interpretation of these provisions would
result into the flat purchasers in one building objecting to the
additions and alterations being made in any other buildings,
although such alterations and additions are consented to by the
persons who have taken or who are to take flats in such other
buildings or even if they are permissible under the building

234
rules or building bye-laws or Development Control Rules and
are approved by the local authority. This would further result
into retarding the growth of construction of buildings and
increasing the housing stock. If the total layout permits
construction of more buildings in accordance with the building
rules or building bye-laws or the Development Control Rules,
made under any law for the time being in force, there should
be no impediment in construction of the additional buildings.
While approving any proposals for construction of additional
buildings in the layout the local authority will, no doubt, see to
it that the open spaces, etc., to be provided under the building
rule or building bye-laws or Development Control Rules are,
in fact provided. It is, therefore, proposed to amend section
7(l)(ii) suitably and also to make a suitable provision for
removal of doubt in respect thereof."
In view of the above, in my view, the amendment would not
make any difference to the point involved in the present
appeal. If in a given case, the layout permits the construction
of more building or buildings in accordance with the Building
Rules and Bye-Laws, it is possible to say that there should be
no impediment to the construction of additional building or
buildings. While, therefore, in a given case, if on a plot of
land, buildings " A &" "B" existed, which have been occupied
by the flat owners and if a third building "C" is being put up
the question would be as to whether despite the third building

235
"C" being permissible in accordance with the Building Rules
and Bye-Laws, can the flat owners in Buildings A & B raise
an objection. I need not go into this question in this case since
I am only concerned with the question of a terrace flat being
constructed on an existing structure. In my view, in the facts
of this case, the insertion of section 7-A by the Amending Act
36 of 1986 would not make any difference to the ratio of the
judgment of Jahagirdar, J. If, therefore, the plaintiffs have
objected 10 the terrace flat being constructed, in my view the
Civil Court would have jurisdiction to entertain the suit of the
plaintiffs and the plaintiffs would be entitled for an injunction
prayed for.
19. The conclusions reached above would also be in tune with
the Preamble of the Ownership Flats Act and the object of
protecting the interests of the flat owners who are normally
unorganised. It is for the protection of this class of persons
that the Ownership Flats Act has been passed. Keeping this in
mind, therefore, all the four contentions raised by Shri
Abhyankar must fail.
20. Accordingly, the appeal fails and the same is dismissed.
However, in the facts and circumstances of the case, there
shall be no order as no costs.

236
Delhi High Court
Sagar Apartments Flat Owners ... vs Sequoia Construction
Pvt. Ltd. ... on 31 March, 1993
Equivalent citations: 51 (1993) DLT 308, 1993 (26) DRJ 71,
1993 RLR 446
Bench: A Kumar
JUDGMENT
Arun Kumar, J.
(1) This order will dispose of I.A.12694/92 an application
filed by the plaintiffs under Order 39 Rules 1 and 2 of the
Code of Civil Procedure and another application being I.A.No.
12795/92 filed by defendant No. 1 under Order 39 Rule 4 of
the Code of Civil Procedure. The plaintiffs have prayed for
grant of interim injunction against defendant No. 1 restraining
it from engaging in any construction activity, either of
demolition or addition or iteration in the front block of
existing building called 'Sagar Apartments' at 6, Tilak Marg,
New Delhi. An ex parte interim order was passed on 16th
October, 1992 restraining defendant No. 1 from engaging in
any construction activity including demolition
/addition/alteration in the front block of the existing building
called 'Sagar Apartments' at 6. Tilak Marg. New Delhi.
Defendant No.1 moved I.A.12795/92 under Order 39 Rule4 of
the Code of Civil Procedure for vacation of the said ex parte
interim order.

237
(2) The plaintiffs have filed the present suit for declaration,
injunction and rendition of accounts. The plaintiff No.1 is an
Association of flat owners in the building known as 'Sagar
Apartments' while the other plaintiffs are some of the flat
owners in the said multi-storeyed building. Defendant No. 1
M/s Sequoia Construction (Pvt.) Ltd. is the promoter/builder
of the said multi-storeyed building complex. Defendant No.2
is New Delhi Municipal Committee while defendant No.3, is
the Union of India through the Secretary, Ministry of Urban
Development and the Land & Development Officer. The
declaration sought in the present suit is that the areas and
amenities listed in schedule 'A' , to the plaint are "common
areas and facilities" appurtenant to the apartments and that
defendant No. 1 or anyone claiming through it is not entitled
to claim any right, title or interest therein of whatsoever
nature. Further the declaration is sought that defendant No.1
has no right to make any construction of whatsoever nature
either by way of addition, alteration or modification or in any
other manner in the building complex. The mandatory
injunction is sought against the New Delhi Municipal
Committee defendant No.2 to ' demolish all illegal and
unauthorised construction in the said building. Plaintiffs have
also prayed for permanent injunction to restrain defendant
No.1 from engaging in any construction activity in the
aforesaid building. Plaintiffs have also sought rendition of

238
accounts from defendant No. 1 regarding the amounts
collected by the said defendant from the plaintiffs on account
of ground rent/lease money and by way of claims of
compensation from Insurance Company, non-utilisation of
collection made on account of fire fighting installation etc.
(3) Defendant No. 1 is a construction Company. It acquired
the lease hold rights with respect to the plot No.6, Tilak
Marg,New Delhi and got plans sanctioned for construction of
a multistoried building thereon. The lease deed with respect to
the plot was executed by the President of India through the
Land and Development Officer, New Delhi in favor of
defendant No.1 on 18th December, 1970. On 31st May, 1971
the New Delhi Municipal Committee sanctioned building
plans for construction of 68 dwelling units (56 in the Tower
Block and 12 in the Front Block) on the said plot. The
permissible Far (Floor Area Ratio) at that time was 150.
(4) As per information supplied by defendant No.1 vide
affidavit dated 20th January, a fresh plan was sanctioned by
the New Delhi Municipal Committee on 11th March,1977
whereby construction of 11 dwelling units (1 in Tower Block
and 10 in the Front Block) was permitted. In Pursuance of
these sanctions 79 flats were constructed and a completion
certificate was obtained on 26th July, 1979. Sanction for one
more flat in the Front Block was obtained on 1st February,
1980 and the same was added as per the sanction. It is

239
admitted on behalf of the construction company that with the
construction of those 80 dwelling units an FAR of 150 was
achieved.
(5) The matter did not rest there. The construction Company
again applied for sanction to add 7 dwelling units in the Front
Block. The sanction was accorded on 31st January, 1983. Out
of this only two units are stated to have been constructed and
for remaining 5 units extension of time to construct was
sought from the New Delhi Municipal Committee. The
extension was granted in the first instance up to 30th January,
1988. However, construction was not carried out during the
extended period. Extension was again sought and was granted
on 30th June,1992 valid up to 31st January, 1993.
(6) The plaintiffs have filed an affidavit controverting these
facts. They have emphasised that there is lot of unauthorised
construction in the building i.e. construction contrary to and
beyond the sanctioned plans. According to plaintiffs
basements have been converted into flats and sold by
defendant No.1. At this stage it is neither necessary nor it is
possible to go into the question of unauthorised construction
except that it appears that there is some unauthorised
construction in the building as is clear from notices issued by
the New Delhi Municipal Committee in this behalf copies
whereof have been placed on record.

240
(7) There is no dispute that the dwelling units/apartments
constructed in the building have been sold by the construction
company to various parties after Realizing full sale
consideration from them. The documents of transfer are called
agreements/license deeds in view of restrictions on outright
sale. Possession of the apartments has been delivered to the
respective parties long ago in pursuance of the agreements.
(8) According to the plaintiffs even if the Far was increased
subsequently, defendant No.1 was not entitled to any benefit
from this because it had already far exceeded even the
increased FAR.
(9) The plaintiffs in the present suit and the other connected
suits are purchasers of the dwelling units constructed in the
building. Plaintiff No.1 is the Flat Buyers' Association.
Though several points have been raised on behalf of the
parties, the hearing has been confined to the following points:
1.Rights of the plaintiffs under the Delhi Apartment ownership
Act, 1986.
2.Rights of the plaintiffs under the license agreements
executed between the apartment buyers and defendant No. 1.
3.Whether the permission of the L.& D.O. to make further
construction is a sine qua non before any construction activity
is undertaken ?

241
4.Is there any valid revalidation/extension of the plans which
were sanctioned by the New Delhi Municipal Committee
regarding the additional construction ?
5.Balance of convenience and irreparable loss and injury.
PLAINTIFFS' Rights Under The Delhi Apartment ownership
Act,
(10) Plaintiffs have heavily relied on the provisions of the
Delhi Apartments ownership Act (hereinafter referred to as the
Act). It has been submitted that admittedly the building in
consideration is a multi-storeyed building in which the
plaintiffs have acquired interests in the respective apartments
allotted to them by defendant No.1. The defendant No. I has
executed license deeds in favor of the plaintiffs which confer
certain rights on them. Plaintiffs have in most of the cases,
paid the entire consideration for acquiring their rights in the
apartments and have obtained physical possession thereof in
purulence of payment of the entire consideration and
execution of the agreement/license deeds. The
agreement/license deeds are subsisting documents and are
very much in force. In these circumstances, it is submitted that
the Act applies and the benefits conferred under the Act on the
allotters/apartment owners have to be honoured, upheld and
preserved and the promoter of the multi-storeyed building
complex can not infringe the rights of the plaintiffs in this

242
behalf. At this stage, it may be worth-while to refer to certain
relevant provisions of the Act.
SECTION 3 'Allottee', in relation to an apartment, means the
person to whom such document has been allotted, sold or
otherwise transfer by the promoter;
SECTION 3(e) 'Apartment owner' means the person or
persons owning an apartment and in undivided interest in the
common areas and facilities appurtenant to such apartment in
the percentage specified in the deeds of apartments;
Section 3(j) " Common Areas and facilities", in relation to a
multi storeyed building means-
i) the land on which such building is located and all
easements, rights and appurtenances belonging to the land and
the building;ii) the foundations, columns, girders, beams, main
walls, roofs, halls, corridors, lobbies, stairs, stairways, fire-
escapees and entrances and exits of the building;iii) the
basement, cellars, yards, gardens, parking areas, shopping
centres, schools and storage spaces;iv) the premises for the
lodging of janitors or persons employed for the management
of the property;v) installations- of central services, such as,
power, light, gas, hot and cold water, heating, refrigeration, air
conditioning, incinerating and sewerage;vi) The elevators,
tanks, pumps, motors, fans, compressors, ducts and in general
all apparatus and installations existing for common use;vii)
Such other community and commercial facilities as may Be

243
prescribed; andviii) all other parts of the property necessary or
convenient to its existence, maintenance and safety, or
normally in common use. Section 3(n) "Deed of apartment"
means the deed of apartment referred to in Section 13: Section
3(w) "Promoter" means the authority, person or co-operative
society, as the case may be, by which, or by whom, any multi-
storeyed building has been constructed; Section 4 4.(1). Every
person to whom any apartment is allotted, sold or otherwise
transferred by the promoter, on or after the commencement of
this Act, shall, save as otherwise provided in section 6, and
subject to the other provisions of this Act, be entitled to the
exclusive ownership and possession of the apartment so
allotted, sold or otherwise transferred to him.2) Every person
to whom any apartment was allotted, sold or otherwise
transferred by the promoter before the commencement of this
Act shall, save as otherwise provided under section 6 and
subject to the other provisions of this Act, be entitled, on and
from such commencement, to the exclusive ownership and
possession of the apartment so allotted, sold or otherwise
transferred to him.3) Every person who becomes entitled to
the exclusive ownership and possession of an apartment under
Sub Section (1) or Sub Section (2) shall be entitled to such
percentage of undivided interest in the common areas and
facilities as may be specified in the Deed of Apartment and
such percentage shall be computed by taking, as a basis, the

244
value of the apartment in relation to the value of the property.
4)(a) The percentage of the undivided interest of each
apartment owner in the common areas and facilities shall have
a permanent character, and shall not be altered without the
written consent of all the apartment owners.(b) The percentage
of the undivided interest in the common areas and facilities
shall not be separated from the apartment to which it
appertains and shall be deemed to be conveyed or encumbered
with the apartment, even though such interest is not expressly
mentioned in the conveyance or other instrument. 5) The
common areas and facilities shall remain undivided and no
apartment owner or any other person shall bring any action for
partition or division of any part thereof, and any convenant to
the contrary shall be void. 6) Each apartment owner may use
the common areas and facilities in accordance with the
purposes for which they are intended without hindering or
encroaching upon the lawful rights of the other apartment
owners. 7) The necessary work relating to maintenance, repair
and replacement of the common areas and facilities and the
making of any additions or improvements thereto, shall be
carried out only in accordance with the provisions of this Act
and the bye-laws. 8) The Association of Apartment owners
shall have the irrevocable right, to be exercised by the Board
of Manager to have access to each apartment from time to
time during reasonable hours for the maintenance, repairs or

245
replacement of any of the common areas or facilities therein,
or accessible there from, or for making emergency repairs
therein necessary to prevent damage to the common areas and
facilities or to any other apartment or apartments. Section 6 is
important mainly for the purpose that it ensures full payment
of the consideration to the promoter before any interest in the
apartment is conferred on the allottee. 13.(1) Whenever any
allotment, sale or other transfer of any apartment is made, the
promoter shall - a) in the case of an allotment, sale or other
transfer made after the commencement of this Act, within
three months from the date of such allotment, sale or other
transfer or .b) in the case of any allotment, sale or other
transfer made before the commencement of this Act, within
six months from the date of such commencement, execute a
Deed of Apartment containing the following particulars
namely :- i) the name of the allottee, ii) description of the land
on which the building and the common areas and facilities are
located; and whether the land is free-hold or lease-hold, and if
lease-hold, the period of such lease. iii) a set of floor plans of
the multi-storeyed building showing the layout and location,
number of apartments and bearing a verified statement of an
architect certifying that it is an accurate copy of the portions of
the plans of the' building as filed with, and approved by, the
local authority within the jurisdiction of which the building is
located. iv) description of the multi-storeyed building, stating

246
the number of storeys and basements, the number of
apartments in that building and the principal materials of
which it is constructed, v) the apartment number, or statement
of the location of the apartment, its approximate area, number
and dimension of rooms, and immediate common area to
which it has access, and any other data necessary for its proper
identification, vi) description of the common areas and
facilities and the percentage of undivided interest appertaining
to the apartment in the common areas and facilities, vii)
description of the limited common areas and facilities, IF any,
stating to which apartments their use is reserved, viii) value of
the property and of each apartment and a statement that the
apartment and such percentage of undivided interest are not
encumbered in any manner whatsoever on the date of
execution of the Deed of Apartment, . ix) statement of the
purposes for which the building and each of the apartments are
intended and restricted as to use. xxx",Section 24 1) The
provisions of this Act shall have effect notwithstanding
anything inconsistent therewith contained in any other law for
the time being in force or in any contract, undertaking or other
instrument and all apartment owners, tenants of owners,
employees of owners and tenants, or any other person who
may, in any manner, use the property or any part thereof to
which this Act applies, shall be subject to the provisions of
this Act and the bye-laws and the rules made there under:

247
Provided that nothing contained in this sub-section shall affect
the right, title or interest acquired by any allottee or other
person in common areas and facilities from any promoter on
or before the 28th day of February, 1986. 2) All agreements,
divisions and determinations lawfully made by the Association
of Apartment owners in accordance with the provisions of this
Act and the bye-laws shall be deemed to be binding on all
apartment owners."An Act to provide for the ownership of an
individual apartment in a multi-storeyed building and of an
undivided interest in the common areas and facilities
appurtenant to such apartment and to make such apartment
and interest heritable and transferable and for matters
connected therewith or incidental thereof. Whereas with a
view to securing that the ownership and control of the material
resources of the community are undistributed as to subserve
the common good, it is expedient to provide for the ownership
of an individual apartment in a multi-storeyed building and of
an undivided interest in the common areas and facilities
appurtenant to such apartment, and to make such apartment
and interest heritable and transferable and to provide for
matters connected therewith or incidental thereto."
(11) The Act ensures that the promoter of the multi-storeyed'
building gets full consideration for the apartments constructed
by it before the rights of the purchasers of the apartments
come into play. At the same time, it safeguards the rights of

248
the apartment owners, particularly, in common areas and
amenities provided in the multi-storeyed building complex.
The common areas and facilities have been defined in Section
3 of the Act. A reference to the definition shows that the
definition takes under its sweep a whole lot of amenities,
facilities, common areas including foundations, columns,
guarders, beams, supports, main walls, roofs, corridors,
lobbies, stairs, fire escapes, entrances and exits. This shows
that the intention is that even such basic things pertaining to
the building like foundation pillars, beams and guarders
should be treated as common facilities in order to ensure that
the strength of the building in which each apartment owner
has an inherent interest is protected. Section 4 puts the interest
of the apartment owner in the common areas and facilities in
the same proportion as the value of the apartment has to the
value of the property. Sub Section 4 of Section 4 of the Act
ensures that the percentage of the undivided interest of each
apartment owner in the common areas and facilities has a
permanent character. It is provided that it shall not be altered
without the written consent of all the apartment owners. Again
the intention is to firmly protect the interest of each apartment
owner in the common areas and facilities.
(12) According to the learned counsel for the plaintiffs, these
provisions of the Statute confer on the apartment
owners/allotters certain inalienable and indefeasible rights

249
which ought to be protected and the builder/promoter can not
be allowed to do anything which infringes such rights of the
plaintiffs who are apartment owners/allotters with respect to
the building complex in the suit. Reliance is also placed on
Section 24 of the Act which has an over-riding effect. Section
24 lays down that notwithstanding anything inconsistent with
the provisions of the Act including any law or agreement or
instrument, the provisions of the Act and the bye-laws and the
rules therein will prevail. It is the case of the plaintiffs that the
proposed construction of additional apartments in the building
will prejudicially affect the rights of the plaintiffs in the
common areas and facilities in the building which are
safeguarded under the Act and, therefore, the plaintiffs seek to
restrain the defendant from carrying on any such activity.
(13) The case of defendant No. 1 in this behalf is two fold:
1.The plaintiffs can not take advantage of the Act because the
Act is a conditional legislation and till the conditions are
fulfilled, the Act is not enforceable.
2.The Deeds of Apartments envisaged under the Act have not
been executed and unless and until the same are executed, no
rights of the apartment owners/ allottees come into existence.
(14) Regarding the first point, it is submitted that the rights
under the Act' have not matured as rights because of non-
fulfilment of the various conditions precedent before the
application of the Act. One such condition pointed out is that

250
the competent authority which has to register the Deeds of
Apartments under Section 13 of the Act has not so far been
notified. Therefore, it is submitted that the Deeds of
Apartment can not be executed and unless and until the same
are executed, the rights created by the statute do not mature.
Counsel for defendant No. I has relied on Emperor Vs.
Benoari Lal Sanna and others, Air 1945 Privy Counsel 48, The
State of Bombay Vs. Narottamdas Etc. , Inder Singh Vs. The
State of Rajasthan, and Hamdard Davakhana and others Vs.
Union of India. I am afraid the analogy of these cases can not
be applied to the situation in hand.
(15) In Hamdard Davakhana Vs. Union of India, the
difference between conditional legislation and delegated
legislation was explained. It was held that when the legislation
is complete in itself and the legislature has itself made the law
and the only question left to the delegate is to apply the law to
an area of to determine the time and manner of carrying it into
effect, it is conditional legislation. In the case of the Delhi
Apartment ownership Act, the legislation was complete in
itself. Only the date of its being brought into effect remained
to be notified. This date was also notified in 1988. Therefore,
nothing remained to be done. Non-appointment of the
competent authority under the Act does not make it a
conditional legislation.

251
(16) Sardar Inder Singh Vs. The State ofRajasthan, , The State
of Bombay Vs. Narottamdas Jethabhai, AIR 1951 Bombay 69
and Emperor Vs. Benoari Lal Sarma, AIR 1945 P.C. 48
enunciate the same principle. The test for a conditional
legislation is whether the legislation was full and complete
when it left the legislative chamber. What remains to be done
is not any law making function, but only to execute the
legislative will by determining the date and time of
enforcement of the Statute, lf: at all the Delhi Apartment
ownership Act was a conditional legislation because the date
of its enforcement remained to be notified, the condition
stands satisfied with the enforcement of the Statute.
(17) The Delhi Apartment ownership Act came into existence
in the year 1986. However, this was enforced in the year 1988.
Passing of the legislation and enforcing the same clearly
shows that the Act is intended to be live wire rather than a
dead letter. Merely because the competent authority has not
been notified so far, does not render the statute otiose. The Act
defines common areas and facilities and as such spells out
various things in a multi-storeyed building complex which are
covered under the sweep of the definition of common areas
and facilities. The effect of non notifying the competent
authority can at best be that the Deeds of Apartment can not
be executed. This does not mean that by non execution of the
deeds of apartment, rights and interests of the apartment

252
owners/allotters are obliterated. The non execution of the
deeds of apartments may mean that the exact percentage of the
interest of the individual apartment owners in relation to the
building complex is not specified. But it can not surely mean
that their rights and interest evaporate in thin air. The
proposed construction of addition a complex on the existing
terrace in the front block will mean additional load on the
foundation, columns, guarders, beams, supports, main walls of
the building. It will mean further pressure on the stairs,
stairways, fire escapes, entrances and exits of the building.
The number of inhabitants and users of the common facilities
will increase. The pressure on existing sewerage system
designed with a view to coping with the building proposed to
be constructed initially, the open spaces, parking areas etc.
will also increase. There will also be more sharers of these
facilities which will necessarily effect the rights and interests
of the existing apartment owners in the building.
(18) So far as the question of non execution' of the Deeds of
Apartment is concerned, the plaintiffs submit that as per
Section 13 of the Act, the responsibility is cast on the
promoter to do the needful. It is further submitted that the
plaintiffs have done whatever they were required to do under
the Act in as much as they have paid the entire sale
consideration. Therefore, no fault can be attributed to the
plaintiffs regarding non execution of the Deeds of Apartment.

253
On the other hand, it is submitted on behalf of defendant No. 1
that the non execution of the Deeds of Apartment is because of
the fact that the competent authority under the Act has not
been notified by the Government so far. In other words, the
defendant No. 1 also claims to be not at fault in the matter of
non execution of the Deeds of Apartment. It follows from this
that neither party can be blamed for non execution of the
Deeds of Apartment. However, non execution of the Deeds of
Apartment can not be taken as giving license to the
promoter/builder to go on and on with additional construction
in the building so as to defeat the rights and interests of the
apartment owners/allotters in the existing building complex.
The question remains should the promoter/builder be allowed
to take advantage of this situation for which in any case the
plaintiffs are not responsible? A reference to the provisions of
Section 13 of the Act and the rules framed under the Act
called the Delhi Apartment ownership Rules, 1987 shows that
in the Deeds of Apartment, the description of the common
areas and facilities and the percentage of undivided interests
appertaining to the apartment in the common areas and
facilities, the description of the multi-storeyed building with
number of storeys and basements, number of apartments in the
building etc. has to be given. The sanctioned plan of the
building has to be annexed. These provisions show that the
intention of the statute is that on execution of Deeds of

254
Apartment, the state of the building is frozen, the rights and
interests of the apartment owners in the building get
crystalised so that in future there is no scope for maneouvre.
From Section 6 of the Act when it ensures that the promoter
gets full consideration for sale of the apartments, it should
follow that after payment of full consideration there should be
some protection or safeguards for the rights of apartment
owners/allotters. The non-execution of the Deeds of
Apartment should not mean that the building as well as the
rights of the existing apartment owners remain in a fluid state.
The builder may keep on adding floors after floors and
apartments after apartments so as to satisfy its greed for
money and thereby adversely affect the rights of the existing
apartment owners in the common areas and facilities and also
increase the burden on the foundations of the building. As
already noticed admittedly the builder obtained a completion
certificate with respect to this building in the year 1979 after
constructing the building as per the existing sanctioned plan.
The builder also admittedly exhausted and achieved the
maximum permissible FAR at the relevant time.
Contemporaneously, all the apartments were also sold, sale
consideration realised and possessions delivered. For all
practical purposes, the project was complete and over at that
stage. In the year 1986, The Delhi Apartment ownership Act
was enacted and it came into force in the year 1988. After the

255
enforcement of the Act, the provisions creating interest of the
apartment owners in the common areas and facilities have to
be honoured. The promoter has for its own reasons not carried
out the additional construction for about 10 years. Now that
the statute is in force, the builder can not be permitted to act in
violation thereof.
(19) Learned counsel for the builder submits that the builder
had a pre-existing right for further construction as per the
sanctioned plan which accrued to it in the year 1983.
Therefore, it is submitted that the builder is entitled to
complete the additional construction. The pre-existing right, if
any, became subject to the Act when the same came into force.
Section 24 of the Act is an over-riding provision. Therefore,
this argument is not tenable. Further, it is submitted on behalf
of the builder that unless and until the entire project is
complete, rights, if any, of the apartment owners do not get
crystalised and, therefore, the plaintiffs can not prevent the
builder from carrying out further construction. The answer to
this submission is that the project admittedly was completed in
the year 1979. The sanction for additional construction which
came in the year 1983 was not availed of by the builder for its
own reasons. In the meanwhile, the statute came into force and
the sanction for further construction which does not take note
of the rights created by the statute can not be permitted if it
defeats the rights created by the statute in favor of the

256
apartment owners. In other words any action in violation of
the Statute cannot be permitted.
(20) For the proposition that the rights of the plaintiffs under
the Act have not matured reliance was also placed on Babu
Lal Vs.Hazari Lal, . This appears to be totally misplaced. It
was held in this case that till Sale-Deed is executed in favor of
the Decree Holder, no right or title in the property passes to
him. From this, it is urged that till the competent Authority
under the Delhi Apartment ownership Act is appointed, the
plaintiffs cannot avail of Section 4 of the Act. The analogy of
a suit for specific performance of an agreement to sell a
property filed by the vendee is totally alien to the point under
consideration regarding applicability of the provisions of a
Statute duly enacted by the Parliament and enforced.
(21) Reliance has also been placed on Faqir Chand Vs. Ram
Rattan, in support of the contention that because of non-
appointment of the Competent Authority, there is no
machinery to put the Act into operation. Section 14 of the
Delhi Development Act deals with prevention of the use of
any land or building in the zone otherwise than in conformity
with zonal plan. In this context, the Supreme Court held that
the Section does not contemplate complete prohibition of the
use of the land or building for purposes other than that
permitted in the zonal plan. Such uses can be continued
subject to terms and conditions prescribed by the regulations

257
provided it had been there even before the zonal plan. No such
regulations had been framed. The previous use could be
continued till regulations are framed. I do not see how this
analogy applies to facts of the case in hand.
(22) It had also been contended on behalf of defendant No. 1
that the perpetual lease in favor of the said defendant is
governed by the provisions of the Government Grants Act.
The said Act being a special law prevails over other laws.
Section 3 of the Government Grants Act merely upholds the
primacy of the terms of lease granted under the said Act over
everything else. The terms of the perpetual lease deed granted
by the Government in the present case are in no way in
conflict with the provisions of the Delhi Apartment ownership
Act. The perpetual lease deed and the Delhi Apartment
ownership Act operate in different areas and for different
purpose. I fail to see the relevance or purpose of this
argument. The perpetual lease deed does not contain any
clause excluding the applicability of other laws in areas not
dealt with under it.
(23) In any case the above discussion shows that important
legal issues have been raised which will require further
detailed consideration at the final stage of the suit and at this
stage, prima-facie, I am inclined to accept the case of the
plaintiffs in this regard. There is yet another reason which
impels me to take this view. Assuming for the sake of

258
argument that the statute does not apply or it does not confer
any rights on the plaintiffs for the present, I am of the view
that the claim of the plaintiffs to a right or interest in the
common areas and facilities in the multi-storeyed building
complex is reasonable and justifiable and equity demands that
the interests of the plaintiffs need to be protected.
(25) The main reason advanced on behalf of defendant No. 1
for non-application of the provisions of the Delhi Apartment
ownership Act is the non-execution of the Deeds of
Apartment. In view of the above discussion and particularly
for the following reasons.
1.Under the Act the Deeds of Apartment are required to be
executed by the promoters of the building;
2.Plaintiffs are in no way responsible for their nonexecution;
3.Plaintiffs have fully performed their obligation under the Act
in as much as they have paid full consideration for their
respective apartments;
4.The Act is meant to confer certain rights on the apartment
owners and is a legislation for their benefits;
5.Equity demands that even if the Act does not apply, the
property be preserved in the status quo condition, till the Act
applies.
(25) I am of the considered view that the plaintiffs ought not
be denied the advantage of the beneficial provisions of the
Act. The plaintiffs, therefore, have a strong prima-facie case in

259
their favor requiring preservation of the property in the same
position as it was in existence on the day of grant of the ex
parte interim order on 16th October, 1992. A contrary view
will encourage the builder to avoid execution of the Deeds of
Apartments so that the provisions of the Act may not become
applicable and he continues to make money from the building
by raising additional construction. The Act is a legislation
meant primarily for the protection of the flat buyers from the
unscrupulous practices of the builders. The Court should
endeavor to uphold this legislative intent.
2. Rights of the plaintiffs' under the license agreements :
(26) It has been contended on behalf of the plaintiffs that
under the license agreements executed between the purchasers
of the apartments and defendant No. 1 certain rights are
conferred on the purchasers and those rights are liable to be
protected. The defendant No. I can not be permitted to defeat
such rights of the plaintiffs/ purchasers of apartments. On the
basis of clause 8 of the agreement, it is submitted that the
purchasers acquire the right to perpetual, heritable and
transferable license in the premises sold to them forming part
of the multi-storeyed building complex. Reliance has been
particularly placed on clause 18 of the agreement. The same is
reproduced as under: That until the specific flat/space the
subject matter of this Agreement of license is given to the
Second party, the first party, shall have right to raise any

260
additional storeys or put up any additional structures as may
be permitted by the Municipal Committee or any other
competent authorities. Such additional structures and storeys
shall be for the sole benefit of the first party who will be
entitled to dispose them off in any way it may choose and the
second party hereby consents to the same and shall not be
entitled to raise any objection thereto. The roof terrace of the
entire building including the parapet walls, basement, ground
floor and any other area not specifically mentioned in the
agreement of the second party singly shall always be the
property of the first party and the agreement with the second
party and all other licenses of flats/spaces in the said building
shall be subject to the aforesaid right of the first party who
shall be entitled to use the said roof terrace including the
parapet walls etc. for any purpose including the display of the
advertisements and sign-boards or for open air
restaurant/cinema or any other use and the first party shall
always have the right of casement to the roof terrace and
parapet walls etc.
(27) On the basis of the contents of the said clause, it is
submitted that the builder/ promoter is entitled to raise
additional storeys or put up additional structures as may be
permitted by the Municipal Committee or any other competent
authority only until the specific flat/space subject matter of the
agreement is given to the purchaser. Thus, according to the

261
plaintiffs after possession of an apartment is handed over to
the purchaser, the builder/promoter forfeits all his rights, if
any, to raise additional storeys or additional structures.
Admittedly the possession of the apartments stands delivered
to the respective purchasers long time back and in view of
clause 18 of the agreement the builder can not be permitted to
raise any additional construction in the building complex. The
aforesaid clause 18 is a part of the agreement by which both
the parties are admittedly bound. The agreement is subsisting
and therefore, the rights and obligations cast on the parties
under the said agreement have to be complied with and
enforced. The rights flowing to the plaintiffs under clause 18
are liable to be protected and, therefore, the defendant No. 1 is
liable to be restrained from raising any additional storeys or
structures in the building.
(28) In reply to the aforesaid contention on behalf of the
plaintiffs, it has been submitted on behalf of defendant No.1
that clause 18 has to be read as a whole. It is further submitted
that clause 18 has to be read Along with clause 6 of the
agreement and a combined reading of both these clauses
shows that the contention of the plaintiffs is untenable. At this
stage, clause 6 of the agreement may also be reproduced. The
same is as under That saving and excepting the particular
flat/space office cum shop hereby agreed to be acquired by the
second party, the second party shall have no claim or right of

262
any nature or kind over or in respect of all or any open spaces,
parking places, lobbies, staircase, lifts, terraces, roofs,
basement and ground floor which will all and singular remain
the property of the first party for all times, but subject to the
right of the Second Party as mentioned hereafter. However,
the first option to acquire the parking spaces shall be given to
the Second Party.
(29) From the aforesaid clause of the agreement, it appears
that the builder/promoter has reserved a right to all or any
open space, parking space, lobbies, staircase, lifts, truces,
roofs, basement and ground floor. The Clause further provides
that all these will remain the properties of the builder/promoter
for all times. Under clause 6 only a limited right regarding the
particular flat/space subject matter of the agreement has been
conferred on the purchaser and the right with respect to the
common space has been reserved by the builder/promoter to
itself.
(30) Regarding clause 18 of the agreement, it has been
submitted that the meaning being assigned to the said clause
on behalf of the plaintiff on the basis of the use of the word
"until" is misconceived. According to the learned counsel for
defendant No. 1 such an interpretation would lead to
absurdities. To illustrate this, it is pointed out that the
plaintiffs interpretation would mean that the moment
possession of any flat is delivered by the defendant No. 1, its

263
right to make further instruction will come to an end. In the
event of the building being still under consideration and the
builder choosing to handover possession of flats, which are
complete to the purchasers the builder would be prevented
from completing the building as per interpretation of the
plaintiffs of clause 18 of the agreement.
(31) It is further submitted that in the later part of clause 18,
the right to roof, terrace of the entire building including
parapet walls, basement, ground floor and any other area not
subsequently mentioned in the agreement has been given to
the builder/promoter and he is entitled to use such areas for
any purpose including display of advertisements, signboards,
open air restaurants, cinema etc. This shows that as per clause
18 itself, the right to common areas including roofs, terraces
etc. has been reserved to the builder/ promoter and the
argument advanced on behalf of the plaintiffs on the basis of
clause 18 is not tenable.
(32) Having considered submissions on behalf of both the
parties in relation to interpretation of clauses 6,8 and 18 of the
agreement, prima-facie, I am of the view that the license
agreement does not confer any exclusive rights on the
plaintiffs regarding common areas roofs, terraces etc.except
their normal use for purpose of enjoyment of their respective
apartments. Reading of clause 18 as a whole Along with
clause 6 of the agreement shows that rights to such areas has

264
been reserved by the builder/promoter in its favor. Use of
word "until" in clause 18 can not be interpreted to mean that
the right of the builder/promoter to raise additional
construction is available only until Recession of the flat/space
subject matter of the agreement is delivered to the purchaser
and not thereafter.
(33) Plaintiffs also relied on clause 30 of the agreement.
Clause 30 reads as under :- That after the possession of the flat
is handed over to the Second Party if any additions or
alterations in, about or relating to the said building are
thereafter required to be carried out at the behest of the
Government, Municipality or any other statutory authority,
than the same shall be carried out by the First Party in co-
operation with the Second Party and/or licensees of the other
Flats in the said building at their cost and the First Party shall
not be in any manner liable or responsible for the same. A bare
reading of this clause shows that it applies when any further
construction is required to be carried out in the building at the
behest of the Government, Municipality or any other statutory
authority. The present case does not relate to any construction
at the behest of such authorities. Therefore, clause 30 is not at
all attracted. Whether permission of the Land & Development
Officer to make further construction was required before hand
?

265
(34) Exhibit R.1/4 dated 24th August,1992 is the letter
whereby revalidation of plans for additions/alterations in the
building was granted by the New Delhi Municipal Committee.
The revalidation has been granted subject to certain conditions
which have been indicated in the said letter. Condition No. 12
and 14 in the said letter have been relied upon on behalf of the
plaintiffs in support of the point under consideration. They are
as under:
CONDITIONNo.12: The plans be got approved separately
under the terms of lease from the Lessor i.e. Land &
Development Office.
CONDITIONNo.14: The sanction will be void, ab initio if
auxiliary conditions mentioned above are not complied.
A copy of the perpetual lease deed dated 22nd April,1963
granted by the President of India with respect to the plot No-6,
Tilak Marg, New Delhi has also been placed on record. Clause
5 of the said lease deed provides :
"THE Lessee will not without the prior consent in writing of
the Lessor or of such officer or body as the Lessor may
authorise in this behalf make any alterations or additions to the
buildings erected on the said demised premises so as to affect
any of the architectural or structural features thereof or errect
or suffer to be erected or any part of the said demised
premises, any building other than and except the building
erected thereon at the date of these persons".

266
(35) It is contented on behalf of the plaintiffs that clause 5 of
the perpetual lease deed dated 22nd April, 1963 makes it
obligatory to have a prior permission of the Lessor or any
officer or body authorised by the Lessor before any additions
or alterations can be made in the existing structure on the
building. Further on the basis of conditions No. 12 and 14 of
the letter of revalidation issued by the New Delhi Municipal
Committee, it is submitted that without prior permission of the
Land & development Officer, the defendant No. I cannot be
permitted to make any additions or alterations in the existing
building on plot No.6, Tilak Marg, New Delhi.
(36) Admittedly, no permission of the Land & Development
Officer has been obtained for carrying out the
additions/alterations in the building. Written statement has
been filed on behalf of the Land & Development Officer,
defendant No.3 to the effect that no such permission has been
obtained by defendant No.1. However, it is submitted on
behalf of defendant No. 1 that no such permission is necessary
in view of the fact that the Land & Development Officer was
himself present in the meeting of the New Delhi Municipal
Committee in which the resolution was passed granting
revalidation of the plans for additions or alterations for the
building in question. His permission will be deemed to be
granted. Defendant No. I has also relied on a judgment of this

267
Court in Shanti Swaroop Bhatia Vs. the Land & Development
Officer, C.W.No. 1343/76 decided on l8th February,1991.
(37) Apart from this, it has been submitted on behalf of
defendant No.1 that if the Lessee commits breach of any of the
conditions of the perpetual lease dated 22nd April,1963, the
same is not fatal. The Lesser may take appropriate action in
accordance with the provisions of the lease deed by issuing
show cause notice. In such an event, the Lessee would be
entitled to defend its action which may include raising the plea
of estoppel on the ground that the Land & Development
Officer was present in the meeting in which the plans for
additional construction were sanctioned by the New Delhi
Municipal Committee. Thus, according to defendant No.1, the
matter would be between the Lessor and the Lessee and the
plaintiffs do not come in the picture at all and, therefore, the
plaintiffs are not entitled to any relief on the basis of this
ground according to the learned counsel for defendant No.1.
Prima-facie I am of the view that there is a lot in favor of what
has been contended on behalf of defendant No. 1 in this behalf
and, therefore, this ground alone is not enough to grant
injunction sought by the plaintiffs against defendant No.1.
(38) 4. Revalidation of plans: Exhibit R.1/4 is the letter by
which the New Delhi Municipal Committee granted
revalidation of the building plans. It is submitted on behalf of
the plaintiffs that in the year 1988, when the New Delhi

268
Municipal Committee granted the revalidation of the plans, the
Delhi Apartment ownership Act had come into force and the
New Delhi Municipal Committee could not over-look the
rights of the apartment owners created under the Act. Various
points have been raised on behalf of the plaintiffs in this
connection. They are :-
A) There is no power in the Punjab Municipal Act (which
applies to areas under the New Delhi Municipal Committee) to
grant revalidation of building plans. The only power is under
the Unified Building Bye-laws, 1983 framed by the Delhi
Development Authority. The Unified Building Bye Laws have
not been duly adopted by the New Delhi Municipal
Committee and, therefore, they cannot be pressed in to service
for granting revalidation of plans.
B) The sanctioned plans had lapsed in the year 1988. There
could be no revalidation of plans which had lapsed.
C) Under Section 194 of the Punjab Municipal Act whatever
time that is allowed for construction has to be allowed at the
time of sanction of plans. There is no power to extend the
time.
D) Bye law 6.8 is beyond the Act and, therefore, is invalid.
E) When there are deviations and notice regarding
unauthorised construction has been issued, there can be no
revalidation.

269
(39) In this connection, it has been submitted on behalf of
defendant No. 1 that revalidation of sanctioned plans is really
extension and extension can be granted any time and any
number of times. Reliance has been placed on Rajeshwar
Pershad Versus Municipal Corporation of Delhi, 1989(39)
Delhi Law Times 212. On the basis of this judgment, it is
submitted that the law regarding extension is quite liberal and
this Court should not interject the proposed construction on
this ground. Counsel for the New Delhi Municipal Committee
has placed on record a copy of the notification showing that
the Unified Building Bye Laws have been duly adopted by the
New Delhi Municipal Committee. The interpretation of
Section 194 of the Punjab Municipal Act sought to be put on
behalf of the plaintiffs that no revalidation of plans can be
granted under the said provisions does not prima-facie appear
to have much force. I also do not consider that bye law 6.8 is
beyond the provisions of the statute. In view of the fact that
this Court has taken a very liberal view regarding revalidation
of the building plans in Rajeshwar Pershad's V.MCD 1989
(39) DLT 212.1 do not consider that this point raised on behalf
of the plaintiffs has much force.
(40) 5. Balance of convenience, irreparable loss and injury :
According to the learned counsel for the plaintiffs, the
considerations of balance of convenience and irreparable loss
and injury require that in the facts and circumstances of the

270
case the interim order as sought by the plaintiffs be granted in
their favor . The plaintiffs submit that in view of rights
conferred on the plaintiffs, by the Delhi Apartment ownership
Act,1986 regarding common space and facilities the plaintiffs
are entitled to have their such rights preserved and protected.
If the defendant No. 1 is permitted to carry out the proposed
construction, such rights of the plaintiffs will be seriously
prejudiced and irretrievably lost. It is further submitted that
plaintiffs have raised serious legal issues in the suit which
require further examination and in order to preserve the rights
of the plaintiffs, interim injunction as prayed ought to be
granted. If no interim order staying further construction is
granted the suits will become infructuous. A direct result of
the further construction would be that the pressure on the
common areas and facilities will increase and proportionate
share of the plaintiffs therein will get reduced. Section 4 of the
Act protects this proportion and the further construction will
be directly in contravention of section 4 of the Act. The
increase in number of apartments will mean increase in
requirement of water supply .electricity, parking space in the
building. There will be more pressure on the existing sewer
system which had been designed in view of the construction
originally proposed. The number of users of the staircase,
drive-way, lifts and open space will increase which will also
adversely affect the interests of the plaintiffs. Further it is

271
submitted that once the construction takes place, it will be
difficult to put the clock back. The learned counsel for the
plaintiffs has also submitted in this connection that admittedly
the plans for additional construction were sanctioned in the
year 1983 and defendant No. 1 has waited for ten years to
make the additional construction. So when it suited defendant
No. 1 not to construct or it was not convenient to defendant
No. 1 to carry out construction, it waited. The balance of
convenience, therefore, demands that defendant No. 1 may
further wait till the decision of the suit. It is also submitted on
behalf of the plaintiffs that by waiting defendant No. 1 does
not suffer any irreparable loss and injury. On the other hand,
allowing the construction at this stage will seal the fate of the
present suit and the rights of the plaintiffs will be lost for ever.
(41) On the other hand, it is submitted on behalf of defendant
No. 1 that the plaintiffs have no prima-facie case and,
therefore, they are not entitled to any interim order. Without
prejudice to this, it is submitted that in view of the constant
rise in cost of construction, the defendant No. I may be
permitted to carry out the construction as per the sanctioned
plans and if at all the Court considers it necessary in the facts
of the present case, certain conditions may be imposed on
defendant No. I including the condition that construction will
be subject to final orders of this Court which may include
removal of entire such construction if the Court so directs.

272
(42) I have given my careful consideration on this aspect of
the case. The conduct of defendant No. 1 in the present case
shows that equity can not be said to be in its favor. Defendant
No.1 admitted in its letter dated 16th December, 1990
annexure R. 1/3 that it had completed the construction in the
year 1979 and obtained a completion certificate after
achieving the maximum FAR permissible at that time. This
fact is also admitted in the affidavit 20th January,1993 filed on
behalf of the defendant No.1. Having completed the building
and having obtained a completion certificate, for all practical
purposes the building achieved a finality. Various apartments
were sold by defendant No. 1 on that basis all consideration
for the same-was realised, possession was delivered. The
purchasers of the apartments purchased the same on the basis
of whatever was indicated as the common areas, and facilities
as per the then existing sanctioned plans. I have already
expressed a view that de hors the Delhi Apartment ownership
Act, equity demands that till the rights and contentions of the
parties are further examined, the apartment purchasers ought
to be protected. Further construction which the builder i.e.
defendant No.1 proposes to raise is an act of extracting more
benefits out of the building and the same are to a large extent
at the expenses of the existing apartment owners. Builder's
greed knows no limits.

273
(43) Even though, the rights in the common areas and space,
terraces etc. have been preserved under the license agreement
by-defendant No.1, the question will still be open as to
whether merely on the basis of such clauses in the agreement,
defendant No.1 can be allowed to defeat and damage the rights
and interests of the apartment owners of the building. It may
be open to plaintiffs to urge that the license agreement is a
type of agreement which the apartment purchasers were
required to sign on dotted lines. They had no options in this
regard. This aspect may also be germane for consideration of
the rights and obligations of the parties created under the
license agreement. Today law has advanced to a great extent
in this area and when the parties to an agreement have an
unequal bargaining power the rights and obligations under
such an agreement are liable to be interpreted and considered
by the Courts.
(44) As per the Statute which is in force the Deeds of
Apartment are required to be executed. The only hurdle
pointed out in this behalf is non appointment of the competent
authority. The competent authority may be appointed any
time. Thereafter, apparently, there will be no excuse for non-
execution of the deeds of apartment on the part of the builder/
promoter. The consideration before me today is, should the
building not be preserved as it is for that day when the Deeds
of Apartment would come into existence? On that day

274
question will arise as to what should be the crucial date on
which the situation got freezed for the purpose of determining
the rights of the purchasers of the apartments. At that stage
also the plaintiffs may endeavor to establish that situation qua
the complete building structure freezed on the ground of
completion certificate in the year 1979. If further construction
is allowed at this stage, it will mean foreclosing this issue. The
plaintiffs will be met with a fait accompli. The further
construction in the building would retrievably change the
position to the prejudice of the plaintiffs and other apartment
owners.
(45) There is yet another danger in permitting the
construction. The Government may again change its policy
and may further increase the FAR. Defendant No. 1 will try to
raise further additional construction. If construction is
permitted at this stage on account of increase in FAR, further
construction will have to be permitted at that stage also on
account of further increase in FAR. This will mean an
unending situation and apparently it will mean a seal of
authority from the Court for such further construction on the
part of the greedy builders.
(46) The Act applies to multi-storied buildings constructed
prior to its coming into force. The building in the present case
admittedly came into existence prior to this Act coming into
force.The intention of the Legislature is clear that the benefits

275
of the Statute should be conferred also on the purchasers of
apartments in multi-storeyed buildings constructed prior to the
enforcement of the Statute. The building was originally
admittedly completed in the year 1979 and completion
certificate was obtained on 26th July, 1979. Had the Act been
in force at that time, the Deeds of Apartment would have had
to be executed and the sanctioned plan of the year 1979 would
have formed part thereof. This further means that the rights of
the apartment purchasers in the building, particularly, in its
common areas and facilities would have got crystalised at that
stage. The Act, however, came into 'force in the year 1988.
Therefore, any additional construction, which is raised after
the enforcement of the Act has to be subject, to the Act and
the rights of the parties created under the Act have to be taken
into consideration and if so required preserved. Any view to
the contrary would mean that the building will be constantly in
a state of flux and the rights of the apartment purchasers
would always remain in a state of fluidity. For the buildings
which came into existence prior to enforcement of the Act, six
months time is granted under the Act for the execution of the
Deeds of Apartment. This is intended to ensure that the rights
of the parties created under the Statute get crystalised soon
after the enforcement of the Statute. When the Statute has
been enforced, the purchasers of the apartments must get some
protection against the builder. The Court has to ensure that the

276
legislative intent is fulfillled rather than allow it to be flouted.
Therefore, the building ought to be preserved and further
construction ought to be stopped.
(47) There is possibly no answer to the point that defendant
No.1 has waited for almost ten years after the sanction of the
plans for additional construction in 1983 to start the
construction. The only reason advanced on behalf of defendant
No.1 to justify permission to construct is constant increase in
cost of construction. In view of the various important issues
raised in the case, this reason is not enough to pursuade me to
permit further construction at this stage. Secondly, if the cost
of construction increases, the value of the property increases
in a higher ratio'.
(48) For all these reasons, I am of the view that the ex parte ad
interim injunction restraining defendant No.1 from raising any
further construction including demolition/ addition/alteration
in the front block of the building called 'Sagar Apartments' at
6, Tilak Marg, New Delhi- 110001 ought to be confirmed. The
ex parte interim order dated 16th December,1992 is, therefore,
confirmed.
(49) I.A.12694/92 and I.A.12795/92 are disposed in the above
terms. In the circumstances of the case, there will be no order
as to costs.
(50) It is clarified that the above view is,of course, subject to
final decision of the suit.

277
Supreme Court of India
Dr. G.N. Khajuria & Ors vs Delhi Development Authority
& Ors on 31 August, 1995
Equivalent citations: 1996 AIR 253, 1995 SCC (5) 762
Author: Hansaria
Bench: H B.L.
PETITIONER:
DR. G.N. KHAJURIA & ORS.
Vs.
RESPONDENT:
DELHI DEVELOPMENT AUTHORITY & ORS.
DATE OF JUDGMENT31/08/1995
BENCH:
HANSARIA B.L. (J)
BENCH:
HANSARIA B.L. (J)
RAMASWAMY, K.
CITATION:
1996 AIR 253 1995 SCC (5) 762
1995 SCALE (5)172
ACT:
HEADNOTE:
JUDGMENT:
JUDGMENT
HANSARIA,J.

278
The appellants are some of the residents of Sarita Vihar.
According to them, respondent No. 1, Delhi Development
Authority (DDA), permitted a nursery school to be opened in
Park No.6 of Pocket `A' of Sarita Vihar by respondent No.2 in
complete violation of the provisions of Delhi Development
Act, 1957 (for short `the Act'). When they approached with
this grievance, the High Court of Delhi found no merit and
dismissed the writ petition.
2. The short and important point which is required to be
determined is whether the school in question is in possession
of the land in question in violation of the statutory provisions
contained in the Act. According to Shri P.P. Rao, learned Sr.
Counsel appearing for the appellants, there is no escape from
the conclusion that the school was allowed to be opened in the
park in violation of what has been contained in Sections 7 and
8 of the Act. The stand of DDA on the other hand, as put
forward by Shri Jaitley, is that the appellants have either mis-
conceived the stautory provisions or are interested, for one
reason or the other, in seeing that the nursery school does not
function at the place allotted to it by the DDA. The counsel for
respondent No.2 butresses this submission by contending that
a school having been allowed to be opened and this
respondent having spent substantial amount of money in
raising a permanent structure at the site, we may not do
anything, at this stage, to uproot the school which would cause

279
not only financial loss to the respondent but would hamper the
educational progress of the students as well.
3. A perusal of Sections 7 and 8 of the Act, which find place
in Chapter III under the heading "Master Plan and Zonal
Development Plans", shows that the Development Authority is
under an obligation to prepare a master plan which shall
define the various zones into which Delhi may be divided for
the purposes of development. Section 8 enjoins that a zonal
development plan may contain a site-plan and use-land for the
development of the zone and show the approximate locations
and extents of land-uses proposed in the zone, inter alia, for
such public works and utilities as schools, public and private
spaces. This is what finds place in sub-section (2) of Section 8.
Clause (d) of sub-section (2) provides that the zonal
development plan to be prepared by the Authority would in
particular contain provisions, inter alia, for the allotment or
reservation of land for open spaces, gardens, recreation
grounds and schools, as mentioned in sub-clause (ii). Our
attention is further invited by Shri Rao to Rule 4 of the Delhi
Development (Master Plan and Zonal Development Plan)
Rules, 1959, whose sub-rule (3) (g) states that a draft master
plan may include "education, recreation and community
facilities plan" indicating proposals for parks, open spaces,
recreational, educational and cultural centres.

280
4. Relying on the aforesaid provisions, the submission
advanced for the appellants is that the Development Authority
was under an obligation to specify in the zonal development
plan, locations and extents of land-uses, inter alia, for parks
and schools. According to Shri Rao, the land which ultimately
was allotted to respondent No. 2 for opening a nursery school
had originally been kept reserved for park because of which
the land could not have been allowed to be used for opening
the school by any executive or administrative decision of the
DDA.
5. Shri Jaitley contends that the zonal development plans are
really required to show in broad cutlines "Approximate
locations of High Schools and Primary Schools" as has been
mentioned in what has been described as "Sub-Division
Regulations" a copy of which is placed at page 196 of the
paper book. It is submitted by Shri Jaitley that nursery schools
are not required to be indicated either in the master plan or the
zonal development plan, as they are not taken to be schools
stricto sensu, but are akin to recreational places, some space
for which is required to be reserved in residential colonies in
the lay-out meant for them. The further limb of this
submission is that in the lay-out for Pocket `A' of Sarita Vihar,
some space was, in fact, reserved for nursery schools. Not
only this, Shri Jaitley would contend that there was no park at

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all at the place where the school was allowed to be
established.
6. We would agree with Shri Jaitley that in the zonal
development plan visualised by Section 8 of the Act, land used
for nursery school may not be indicated, as a distinction is
permissible to be made between a high school and a primary
school on one hand and nursery school on the other. Even so,
we are of the firm view that any lay-out for residential colony,
like that of Sarita Vihar, has to indicate space reserved, not
only for nursery school, but for park. This follows from what
has been stated in Sections 8(2) (a) and 8(d) (ii) of the Act and
Rule 4(3) (g) of the aforesaid Rules. We have thought it fit to
mention about this aspect because in the lay-out plan of Sarita
Vihar, as put on record, we find no mention about reservation
of space for park. This is simply inconceivable to us.
7. We also do not entertain any doubt that at the site at which
the school was allowed to be opened, there was a park. This is
apparent from the report submitted by Director (Monitoring)
to the Vice-Chairman of the Development Authority pursuant
to his order dated 26.10.1992 which he came to pass on a
reference being made to him by the Chief Secretary on
23.10.1992. The Chief Secretary had passed the order on a
representation made by some residents of Sarita Vihar, Pocket
`A', complaining about unauthorised construction in Park
No.6. The Director (Monitoring) visited the site on 2.11.1992

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and found that a part of the park located in Pocket `A' had
actually been enclosed with a boundary wall by an institution
named Rattanatrya Educational Research Institute, which body
is none else than respondent No.2. The report further says that
the Institute was running a nursery school in a few temporary
barracks constructed along with one of the boundary walls. On
discussion with some office bearers of the Institute it was
informed that the land in question measuring 800 sq. metres
had been allotted to the Institute by the DDA in July 1988 for
the purpose of running a nursery school. The Director
(Monitoring) reported that the residents of surrounding areas
started making objections when this Institute took up the
construction of a regular school building after getting the plan
duly sanctioned from the Building Department of the DDA.
The report has categorically mentioned that in the original lay-
out (which we understood to be of 1984) there was no
provision for a nursery school in the park in question.
Subsequently, however, some portion of the park was carved
out for the nursery school. That such a park exists was sought
to be proved by Shri Rao by producing certain photographs as
well, one of which contains a sign board mentioning about
"D.D.A. Park".
8. We, therefore, hold that the land which was allotted to
respondent No.2 was part of a park. We further hold that it
was not open to the DDA to carve out any space meant for

283
park for a nursery school. We are of the considered view that
the allotment in favour of respondent No.2 was misuse of
power, for reasons which need not be adverted. It is, therefore,
a fit case, according to us, where the allotment in favour of
respondent No.2 should be cancelled and we order
accordingly. The fact that respondent No.2. has put up up
some structure stated to be permanent by his counsel is not
relevant, as the same has been one on a plot of land allotted to
it in contravention of law. As to the submission that
dislocation from the present site would cause difficulty to the
tiny tots, we would observe that the same has been advanced
only to get sympathy from the Court inasmuch as children, for
whom the nursery school is meant, would travel to any other
nearby place where such a school would be set up either by
respondent No.2 or by any other body.
9. The appeal is, therefore, allowed by ordering the
cancellation of allotment made in favour of respondent No.2.
It would be open to this respondent to continue to run the
school at this site for a period of six months to enable it to
make such alternative arrangments as it thinks fit to shift the
school, so that the children are not put to any disadvantageous
position suddenly.
10. Before parting, we have an observation to make. The same
is that a feeling is gathering ground that where unauthorised
constructions are demolished on the force of the order of

284
courts, the illegality is not taken care of fully inasmuch as the
officers of the statutory body who had allowed the
unauthorised construction to be made or make illegal
allotments go scot free. This should not, however, have
happen for two reasons. First, it is the illegal action/order of
the officer which lies At the root of the unlawful act of the
concerned citizen, because of which the officer is more to be
blamed than the recepient of the illegal benefit. It is thus
imperative, according to us, that while undoing the mischief
which would require the demolition of the unauthorised
construction, the delinquent officer has also to be punished in
accordance with law. This, however, seldom happens.
Secondly, to take care of the injustice completely, the officer
who had misused his power has also to be properly punished.
Otherwise, what happens is that the officer, who made the hay
when the sun shined, retains the hay, which tempts other to do
the same. This really gives fillip to the commission of tainted
acts, whereas the aim should be opposite.
11. We, therefore, call upon respondent No.1 to make an
enquiry and inform the Court within three months as to who
are the officers who had made the unauthorised allotment and
permitted unauthorised construction. On knowing about this,
such further orders would be passed as deemed fit and proper.
12. Put up after three months.

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Andhra High Court
CSR Estates, Flat Owners Welfare ... vs Hyderabad Urban
Development ... on 2 November, 1998
Equivalent citations: 1998 (6) ALD 547, 1998 (6) ALT 540
Bench: B Raikote
ORDER
1. The petitioner, CSR Estates Flat Owners' Welfare
Association, Kothapet, Ranga Reddy District, has filed this
writ petition for a writ of Mandamus or any other appropriate
writ, order or direction declaring the action of respondent No.)
i.e., Hyderabad Urban Development Authority, in granting
modification in building permission vide proceedings
No.696/P4/H/94datcd2-l-1988, in favour of respondent No.3,
as illegal, arbitrary and contrary to law. By the impugned
proceedings, the respondent No. 1 has permitted certain
modifications and alterations in the original sanctioned plan
dated 19-7-1991 in favour of the respondent No-3, who is a
builder. This action of respondent No.l is now being
challenged by the petitioners' Association.
2. In the affidavit filed in support of the writ petition it is
alleged by the petitioners' Association that it is a registered
Association under the Societies Registration Act and the
petitioners' association consists of all the flat owners residing
in the apartments known as CSR Estates, situated at Kothapet,
Ranga Reddy District. The respondent No.3 is the builder of

286
the said apartment. It is further stated that the respondent No.
1 - Hyderabad Urban Development Authority notified certain
sites for apartment housing at Saroomagar in the year 1989,
inviting buildings to purchase plots of 1,200 Sq.Mts, each, in
public auction for the purpose of building residential
complexes in 48 plots. The said notification issued by
respondent No.l further stated that the purchaser of plots will
be permitted to build ground floor, plus three storeys or
ground floor plus four storeys, in case they decide to leave
ground floor for parking, in case the purchaser chooses the
second alternative, a minimum of I/3rd of the parking area will
have to be kept for open parking and it shall not be sold to any
prospective purchaser of flats. The writ affidavit further states
that in pursuance of the said notification, the respondent No.3
applied for allotment of plot and he was successful in getting
plot No.42, admeasuring 1,280 sq.mts. at Kothapet. He
applied for permission to construct apartment complex
consisting of stilt and four floors. Accordingly, this plan was
sanctioned by respondent No. 1 on 19-7-1991 and according
to such plan, the stilt area consists of generator room, A.C.
plant, electrical cabin, watchman room, store room, office
room and open parking area of flat owners, which will be a
common area. The construction was started in the year 1991
and it was completed by 1993 and in all 42 flats were built.
Immediately thereafter, the members of the petitioners'

287
association purchased the flats by entering into agreements
with the respondent No.3 and accordingly, the sale deeds were
also executed in favour of some of the flat owners and they are
yet to be executed in case of some other flat owners. The
respondent No.3 has charged Rs.20,000/- extra for each flat
owner towards open parking in the stilt. They further
contended that each flat owner became the owner of undivided
land approximately at 16.7 sq.mts., out of the total land. The
respondent No.3 being a greedy builder did not complete the
construction in time in all respects and he did not put up the
compound wall. When the flat owners wanted to put up a
compound wall, he went to the Civil Court and obtained an
injunction against them in OS No.444 of 1997 and on the
application filed by the members of the petitioners'
association, the said injunction was vacated and ultimately the
petitioners constructed the compound wall. The respondent
No.3 thereafter planned to convert the stilt area into closed
mulgies, so that he could lease them out to various parties for
running shops, which the petitioners were opposing. But the
respondent No.3 was harassing the petitioners by filing police
complaint, criminal cases etc. The respondent No.3, in order to
achieve his object, has applied to respondent No.l for
sanctioning closed parking in the stilt area, for conversion of
four flats in the ground floor for commercial area and to
construct further floor on the terrace. The respondent No.l

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without any notice and opportunity to the petitioners has
sanctioned on 2-1-1998 such modifications sought by the
respondent No.3. Immediately thereafter, the respondent No.3
filed a suit in OS No. 135 of 1998 before the Principal Junior
Judge, East and North, Ranga Reddy District and obtained an
exparte injunction against the members of the petitioners'
Association, restraining them for interfering with the
constructions he would make in the building. Under the
strength of the exparte order of the Court, he hurriedly
constructed closed mulgies in the stilt and also started
construction of an additional floor on the terrace. He also
converted four flats in the ground floor for commercial
purpose as per the modified plan. Even in the area shown for
electrical cabin, watchman room, store room and office room
in the stilt, he built mulgies for commercial purpose.
3. With the above allegations, the petitioners' Association
contended that the modified plan sanctioned by respondent
No. 1 dated 2-1-1998 was without notice to the flat owners
and the same was illegal, arbitrary and prejudicial to the
interests of the flat owners. Therefore, the impugned
proceedings are liable to be set aside.
4. The learned Counsel appearing for the petitioners'
Association by relying upon the pleadings raised in the writ
petition contended that respondent No.l could not permit the
modifications to the original plan, and according to the

289
original plan, there can be only ground floor plus four storeys
and l/3rd of the ground floor must be left open for parking
area and it shall not be sold to any purchaser. And if that is so,
neither the respondent No. 1 could permit nor respondent No.3
could effect modifications to the building. He further
contended that the complex in question is a residential
complex and respondent No.3 cannot use it for commercial
purpose. He further submitted that under A.P. Apartments
(Promotion of Construction and Ownership) Act, 1987 (in
short 'the Act'), after the plans, specifications and the nature of
the fixtures, fittings, amenities and common areas as
sanctioned by the appropriate authority and after builder enters
into agreement with the flat purchasers, such builder is not
entitled to make any additions or alterations, without the
previous consent of the flat owners. He further submitted that
flat owners have not consented for any such modifications and
as such respondent No.3 is not entitled to effect any
modifications. He further contended that this Act has been
made to have overriding effect on all other law and if such
modifications are permitted as sought by respondent No.3,
interests of such flat owners would be seriously affected and
the very object of the Act and the Rules framed thereunder
would be defeated. In support of his contentions, he took me
through the various provisions of the Act and submitted that
this is a fit case for this Court to issue appropriate writ or

290
direction as prayed for. The Counsel for the petitioners has
also filed affidavits of eight flat owners as directed by this
Court vide order dated 11-8-1998, in view of the objection of
the Counsel for the respondents that the person who has filed
affidavit in support of the writ petition does not own any flat.
5. The respondent No.3 filed a vacate petition/counter denying
the allegations made by the petitioners' Association. It is stated
in the counter that while determining F.S.I, ratio, the height of
the building formulated by the Government was wrongly
applied by respondent No.l while granting the original plan
and in those circumstances, the respondent No.3 applied to the
Government for amendment of the plan and accordingly, the
Government vide G.O.Rt. No.689 M.A. dated 26-8-1997
considered the representation of the respondent No.3 and
accepted the case that regarding plot No.42 Urban
Development Authority had included balcony area also for the
calculation of the F.A.R. and accordingly relaxed zoning
regulations in favour of C.S.R. Estates in plot No.42, to the
extent that balcony area be excluded for the calculation of
F.S.I, upto 0.90 mts of width of balcony, In view of this
relaxation by the Government, respondent No.3 applied for
amendment of the plan to the respondent No. 1 for
modification of the original plan to the extent the respondent
No.3 is eligible to put up construction under F.A.R. and
accordingly by the impugned proceedings, the respondent No.l

291
has permitted and according to this modified plan, respondent
No.3 is effecting the modifications in the building. It is further
contended that the consent of the petitioners' Association was
not necessary, since the members of the petitioners'
Association have permitted as per the clause in the sale deed
that the vendor/ respondent No.3 shall have right to construct
further floors above the terrace of the building and the
purchasers shall not have any objection for the additional
construction and in view of the said clause, the petitioners
cannot complain against the construction according to the
modified plan, since this respondent No.3 is at liberty to
undertake construction activity over the terrace. It is further
alleged that the construction undertaken as per the amended
plan does not affect the individual flats, which were
constructed as per the original sanctioned plan and the
apartment owners are not affected in any way by such
construction. In these circumstances, the allegations of the
petitioners' Association that a notice is required under Section
6 of the Act, cannot be sustained and the said Section would
not be applicable to the facts of this case, since there is no
material alteration to the plan, which was disclosed to the
purchasers in relation to the individual flats and subsequent
amended plan is nothing but the continuation of the earlier
sanctioned plan. Moreover, there are about eight unfinished
flats in the entire building which are not sold yet, of which this

292
respondent No.3 continues to be the owner. With these
allegations, the respondent No.3 requested this Court to
dismiss the writ petition.
6. The Hyderabad Urban Development Authority respondent
No.l filed a separate counter and stated that in view of the
relaxation granted by the Government vide G.O. Rt. No.689
M.A., dated 26-8-1997, this respondent approved the modified
plan. In fact, Government granted relaxation of zoning
regulations exempting balcony area for the purpose of
calculation of F.S.I. Basing on that relaxation, the respondent
No. 1 processed the application of the respondent No.3 and
granted permission for construction of two units (flats) on
fourth floor and two units of fifth floor, which would come to
a total area of 165.58 sq.mts. along with four covered garages
in stilt floor. It further stated that after granting the permission,
as per the amended plan, the height of the building and the
F.S.I, used are within permissible limits. However, it stated
that this authority has not granted any 'no objection certificate'
for conversion of four flats for commercial purpose i.e., for the
use of commencing Vysya Bank and the same is not being
used for Vysya Bank as on today and, therefore, there is no
change in the use of the plan and consequently there is no
alteration in the plan and the contention of the flat owners is
untenable, as their individual flats would not be affected by

293
change in the plan. On these grounds, this respondent No. 1
also prayed for the dismissal of the writ petition.
7. Respondent No.2 - Municipality has not filed any counter.
But the Counsel appearing for this respondent contended that
the alleged modified plan is illegal.
8. The Counsels for the respondents 1 and 3 contended that the
modified plan was issued to the respondent No.3 only within
the area the respondent No.3 was eligible to put up certain
constructions on the site in question as per the F.S.I. They
contended that respondent No. 1 wrongly included balcony
area also for the calculation of the F.A.R. and, therefore, after
excluding the same, whatever the area over which respondent
No.3 was entitled to put up construction, the same has been
permitted. The learned Counsels for the respondents also
relied upon clause 4 of the sale deeds, contending that for such
construction over the terrace floor, all the flat owners have
agreed in the sale deeds and whatever the open area they were
entitled to according to the sale-deeds, all the flat owners
possess it and the same is not affected. Therefore, the present
writ petition is misconceived and the same is liable to be
dismissed. The learned Counsels submitted that the petitioners'
Association has not challenged the G.O. issued by the
Government relaxing zoning regulations in favour of
respondent No,3 and consequently, they could not challenge
the impugned proceedings for approving the modified plan.

294
They also contended that the petitioners are not affected and
Section 6 of the Act would not be applicable to the facts of
this case and the petitioners are not entitled to any notice
before issuing the modified plan. Moreover, now the four flats
in the first floor approved for commercial purpose is with the
consent of the flat owners and therefore, it cannot be said that
such use of flats for starting bank in the building was violative
of any law, and it cannot be said that housing of bank is for
commercial purpose. Consequently, they requested that the
writ petition may be dismissed.
9. On the stand taken by both the sides in their pleadings and
also in their arguments, I find that there are few facts which
are clearly undisputed. It is not in dispute that the original plan
approved provided stilt/ ground floor plus four floors (second
alternative mode), with a minimum of l/3rd of the parking
area, which has to be kept for open parking and it shall not be
sold to any prospective purchaser of the flats. It is also not in
dispute that no notice was issued to the members of the
petitioners' Association before sanctioning the modified plan
by the impugned proceedings dated 2-1-1998. But the case of
the respondents is that, such modified plan does not effect any
substantial alteration in the original plan and the area of the
flat owners would not be affected and as such the petitioners
cannot make any grievance. The further case of the
respondents is that the modified plan has been issued as per

295
the relaxation granted by the Government. But it is not the
case of the respondents that Government at least issued a
notice to the flat owners before issuing the G.O. Rt. No.689
MA, dated 26-8-1997. With this background in view, I have to
consider whether the impugned proceedings approving the
modified plan of respondent No.3 is permissible or not under
the Act.
10. I scanned through the entire Act in order to appreciate the
rival contentions. The preamble of the Act states that in view
of the Eighteenth Report of the Andhra Pradesh State Law
Commission and on the lines of the Maharashtra Act, a
legislation is necessary to regulate the promotion of
construction and sale of apartments in multi-storied buildings
on ownership basis and also to provide "for the transferability
and heritability by the individual purchaser of not only the
particular apartment but also the fractional interest to it in the
common areas and facilities". Under Section 3(d) of the Act,
"Common areas and facilities'' arc defined as under:
"(d) "Common areas and facilities" unless otherwise provided
in the declaration, means:
(i) the land on which the building is located;
(ii) foundation, columns, girders, beams, supporters, main
walls, roofs including terraces, halls, corridors, stairs,
stairways, fire-escapes and entrances and exits of the building;

296
(iii) basements, cellars, yards, gardens, parking areas,
children's playground and storage spaces;
(iv) the premises of the lodging of janitors, or caretakers or
persons employed for the management of the property;
(v) installations of general services, such as power, light, gas,
hot and cold water, heating, refrigeration, air conditioning and
incinerating;
(vi) elevators, tanks, wells and bore-wells, pumps, motors,
fans, compressors, ducts and in general all apparatus and
installations existing for common use;
(vii) such other community and commercial facilities as may
be provided for in the building plan and Declaration;
(viii) all other parts of the property necessary or convenient to
its existence, maintenance and safety or normally in common
use;"
Section 4 of the Act determines the duties and liabilities of the
promoters, so as to make full disclosure in writing of his title
to the land and the building, in which the apartments are to be
constructed, all encumbrances, plans and specifications
approved by the local authority, including the particulars of
the designs and materials proposed to be used etc. I think it
appropriate to extract the relevant portion of Section 4 as
under:
"4. General Liabilities of Promoter ;--

297
(1) Any promoter who intends to sell an apartment, shall, on
being so required by an intending transferee, make a full and
true disclosure in writing of-
(a) his title to the land on and the building, in which the
apartments are, or are to be constructed;
(b) all encumbrances, if any, on such land or building and any
right, title, interest or claim or any person in or over such land
or building;
(c) the plans and specifications approved by the local authority
as the case may be or the Urban Development Authority of the
entire building of which the apartments form part;
(d) the nature of fixtures, fittings and amenities which have
been or are proposed to be provided;
(e) the particulars in respect of the designs and materials
which have been or are proposed to be used in the construction
of the building, together with the details of all agreement
entered into by him with the Architects. Engineers and
Contractors;
(f) all outgoings, including ground rent if any, municipal or
other local taxes, taxes on income, water and electricity
charges, revenue assessment, interest of any mortgage or other
encumbrances, if any, in respect of the land, building and
apartments;
(g) such other information and documents as may be
prescribed.

298
(2) Such promoter shall also-
(a) specify in writing the date by which possession of the
apartments is to be handed over to such transferee.
(b) supply in writing a list of all the apartments which have
already been taken or agreed to be taken, together with their
distinctive numbers, names and addresses of the transferees,
either actually or intended, the prices paid or agreed to be paid
therefor and any other particulars as may be prescribed.
(c) transfer the open space earmarked for parks, play grounds,
market places and for other common use free of cost to the
Government through a registered gift deed."
Under Section 7 of the Act, it is further provided that the
promoter shall, on payment of price, execute a proper
conveyance of the apartment in accordance with the
agreement executed in terms of Section 5 of the Act and give
possession of the apartment to the transferee after discharging
all encumbrances unless the apartment is sold subject to
certain encumbrances. From the above relevant provisions
(which I have noticed for the purpose of this case), it is clear
that apart from the building sold under the agreement by the
promoter/builder, certain other common areas and facilities
also such owners would be entitled to under law. Under
Section 4 of the Act, before selling the flats as per the
agreement contemplated under Section 5, the builder should
make full disclosure of his title, entire plan, specifications,

299
fittings, designs etc. Under Section 6 it is further mandated
that after the plans, specifications and the nature of the
fixtures, fittings, amenities and common areas as sanctioned
by the local authorities, which are disclosed to the intending
transferees under Section 4 of the Act, the promoter shall not
make any additions and alterations therein, if it affects any
apartment, without the previous consent in writing and if it
affects more than one apartment, without the previous consent
in writing of all the transferees who intend to take those
apartments and all other additions or alterations shall
necessarily be carried out only with the prior approval of the
local authority. In the instant case, it is no doubt true that as
contemplated under Section 6(2) of the Act, the approval of
the local authority has been taken, but the previous consent of
transferees are not taken for additions and alterations sought
under the modified plan. But the case of the respondent Nos.l
and 3 is that there is no material alteration in the building as
per the modified plan and what has been permitted, is the
construction within the permissible area as per the
F.S.I./F.A.R., since earlier balcony area was computed in the
F.S.I./F.A.R., and the same has been permitted. But in my
opinion, the stand taken by respondent Nos.l and 3 is not
acceptable for more than one reason.
11. As per the modified plan, respondent No.3 is now
permitted for construction of two units (flats) on the fourth

300
floor, two units on fifth floor and four covered garages in stilt
floor. The modified plan also has permitted the respondent
No.3 for the use of four flats for commercial purpose., for
utilising the same for commencing Vysya Bank in the first
floor. These modifications are material modifications to the
building in all sense of the term and the same cannot be done
contrary to the declaration or disclosure already made under
Section 4 of the Act. As I have already noted above, before
any flat is sold, the builder or promoter is required to make
full disclosure in writing to the intending transferees of his
title to the land, all encumbrances, the plans and specifications
approved by the local authority or the Urban Development
Authority. He shall also disclose the nature of fixtures,
fittings, and amenities which have been or are proposed to be
provided etc., and under Section 4(2) of the Act, he shall
transfer the open space earmarked for parks, playgrounds,
market places and for other common use free of cost to the
Government through a registered gift deed. In other words,
once the builder constructs the building as per the disclosure
of the plan under Section 4, he shall complete the building
according to such plan, if some construction is yet to be done
according to the plan after selling of all the flats, he shall have
to simply complete those constructions and leave the building
and go. Whatever the remaining common areas and facilities
which are provided as per the plan approved and all other

301
amenities, as contemplated under the definition of "common
areas and facilities", it is the flat owners who shall be entitled
to the same to the extent of their percentage of undivided
interest as per Section 9 of the Act and the said ' 'common
areas and facilities" as expressed in the declaration duly
executed and registered as provided in this Act shall not be
altered without the consent of all the flat owners. Instead of
noting the substance of Section 9 of the Act, I think it
appropriate to extract relevant portion of Section 9 as under:
"9. Common areas and facilities :-- Each apartment owner
shall be entitled to the percentage of undivided interest in the
common areas facilities as expressed in the Declaration. Such
percentage shall be computed by taking as basic the value of
the apartment in relation to the value of the property, and such
percentage shall also reflect the limited common areas and
facilities.
(2) The percentage of undivided interest of each apartment
owner in the common areas and facilities as expressed in the
Declaration shall not be altered without the consent of all the
apartment owners expressed in an amended Declaration duly
executed and registered as provided in this Act. The
percentage of undivided interests in the common areas and
facilities shall not be separated from the apartment to which it
appertains, and shall be deemed to be conveyed or
encumbered with the apartment even though such interest is

302
not expressly mentioned in the conveyance or either
instrument."
From the above Section it is clear that after the declaration of
the plan by the builder under Section 4 of the Act, the builder
has no right to touch the plan or the declaration plan, as
provided for whatever the reasons. If he has left more vacant
space than what is permitted by F.S.I./F.A.R., he has left as
per the plan voluntarily. Assuming for the sake of argument
that there is a mistake, that mistake becomes final, the moment
the plan is approved. In this view of the matter, it follows that
now the builder cannot say that he was seeking amendment of
the original plan because in the original plan balcony area was
also included in the F.S.I./F.A.R. and the same could not have
been included and, therefore, to the extent of area covered by
balcony he was entitled to put up farther construction. If there
is to be any modification to the original building as per the
plan, it shall be with the consent of all the flat owners
expressed in an amended declaration duly executed and
registered as provided in this Act. Therefore, there cannot be
any other mode of amending the plan, except as per the
"amended declaration duly executed and registered''. In fact,
under Section 14 of the Act, such declaration is made a
statutory declaration and under Section 14(b) it shall contain
the "description of the building stating the number of storeys
and basements, the number of apartments and the principal

303
materials of which it is or is to be constructed". Under Section
14(d), such declaration also shall consist' 'description of the
common areas and facilities". Section 14(2) of the Act, further
directs that the declaration referred to under Section 14(1) may
be amended under such circumstances and only in such
manner as may be prescribed. In the instant case, it is the not
the case of the respondents that the original declaration
contemplated under Section 4 read with Section 14 of the Act
was amended by duly executed and registered, as provided in
this Act. From this it follows that according to the approved
plan whatever space is left for car parking in the stilt floor and
whatever the space left in other floors as per the plan, the same
cannot be modified at all. Any other interpretation would lead
to a disastrous conclusion. If it were to be said that builders
can make use of the unsold flats or any common areas in any
way they like, it would lead to clearly breach of provisions of
this Act and the very spirit of the Act. By the impugned
proceedings and (amended plan) the respondent No.3 is
permitted now to put up an additional flats over and above the
building already constructed. He is permitted to put up two
flats in the fourth floor and two flats in the fifth floor and he
was also permitted to convert the stilt floor into four covered
garages. This modified plan is consequently contrary to
Sections 4, 6 and 14 of the Act. It should be made clear that if
after selling some flats, if there remains some more flats to be

304
sold by the builder, such builder would be just like any other
co-owner, as if he has also purchased those flats by himself.
When once the first flat is purchased by any person, for the
first time, such purchaser and the builder become common
owners for all the amenities and facilities that are provided or
to be provided, only according to the plan approved. As I have
already stated above, if some more construction is to be made
according to the plan approved, he could only complete the
same and nothing more. The object of the Act is to protect
such poor and middle class flat owners as against the builders,
so as to see that the purchaser should know what is the flat he
has purchased and what are the facilities in that apartment
area. Suppose beautiful parks and lakes are provided in the
plan approved, for the purpose of apartment, they vest with the
apartment owner as common facilities as "deemed to be
conveyed with the apartment" in terms of Section 9(2) of the
Act, even though such right or interest is not specifically
mentioned in the conveyance or in the instrument. With regard
to this position of law, the contention of the respondents
cannot be accepted.
12. Under Section 11 of the Act it is further provided that "no
apartment owner shall add any material structure or excavate
any additional basement or cellar or do any other work which
would be prejudicial to the soundness or safety of the property
or would reduce the value thereof or impair any easement of

305
hereditament". From this it follows that even the owner of the
apartment also cannot take up any work, which would be
prejudicial to the soundness and safety of the building. In the
instant case, respondent No.3 now proposed to put up two
additional flats over the top of the building and the same he
cannot do. In all probability, the foundation that is provided as
per the original plan takes only the building as per the plan.
Whatever it may be, the impugned proceedings permitting the
respondent No.3 to construct certain constructions as per the
modified plan is illegal.
13. However, the learned Counsel for the respondent No.3
heavily relies on clause (4) included in all the sale deeds,
which reads as under:
"That it is specifically agreed that the Vendor shall have a
right to construct further floors over and above the terrace of
the building and the Purchaser/ Purchasers shall have no
objection for the proposed additional construction."
This clause is prima facie ultra vires of Sections 4, 6 and 14 of
the Act. As I have stated above, unless there is an amended
declaration duly executed and registered by all the flat owners,
there cannot be any modification to the existing plan and the
building constructed according to it. It is a common principle
of law that any contract prohibited by law would be a void
contract. In fact Section 23 of the Indian Contract Act is to the
same effect. Therefore, respondent No.3 - builder cannot rely

306
upon this clause for the purpose of seeking a modified plan to
put up further constructions. As I have already stated above, if
according to the plan already declared under Sections 4 and 14
of the Act, if some more construction is to be done, at the most
he can complete that and he cannot put up any further
construction.
14. So far as the allotting of four flats in favour of Vysya Bank
is concerned, the serious objection of the petitioners is that the
building being for residential purpose, the builder cannot use
for commercial purposes. But the builder relied upon one
resolution dated 1-2-1993, said to have been passed by
Saroornagar Huda Apartments Welfare Association. The
learned Counsel for the respondent No.3 further contends that
according to this resolution, the Vysya Bank Limited is
permitted to open their extension counter in their association.
From the reading of the resolution filed at material page No.5,
I find that this is not the resolution of the petitioners'
Association, which is called C.S.R. Estates Flat Owners'
Welfare Association. This is an association pertaining to plot
No.42, over which the present multi-storied building is
constructed and they are the purchasers and if that is so, the
said resolution dated 1-2-1993 is not the one passed by the
petitioners' Association. If taking that there is a common
association called Saroornagar Huda Apartments Welfare
Association, the said resolution does not show in which

307
building such bank should be housed. At any rate, the
petitioners are not bound by the said resolution of some other
association. It is also pertinent to note at this stage itself that
resolution is dated 1-2-1993 and the same is extracted
hereunder for ready reference:
"Saroornagar Huda Apartments Welfare Association (Regd.
No.698 of 1990)
Flat No.307, Jaya Apartments, HUDA Complex, Saroornagar,
Hyderabad.
Date: 1-2-1993
Resolution
1. It is resolved that the Vysya Bank Limited who are our
Principal Bankers, be permitted to open their Extension Court
in our institution/association/society premises.
2. It is further resolved to provide necessary accommodation
to house the Extension Counter proposed at our premises and
that we have no objection to the public having access to the
extension counter.
Sd/- Sd/-
(R- Srinivasa Raju) (A.V.A. Sharma)
President. Secretary.
In fact in the instant case, the construction of the building is
almost completed in the year 1993 and as per the case of the
respondents, the builder started selling the flats after 1993 and
such flats were sold even till the year 1997-98. From this it

308
follows that the said resolution does not apply to the
petitioners' apartment, which is in plot No.42. If this is the
position of facts, it follows that without the consent of the
owners of the building, the four flats in the first floor could not
have been given for the Vysya Bank for commercial purpose.
The building in question is a residential building and without
the consent of the flat owners, the same could not have been
given for commercial purposes to the Vysya Bank and
accordingly, the modified plan providing four flats in the first
floor for banking purposes also is illegal.
15. The learned Counsels for respondents 1 and 3 strenuously
placed reliance on G.O.Rt. No.689 M.A. dated 26-8-1997,
issued by the Government and contended that the Government
relaxed the zoning regulations in favour of C.S.R. Estates in
plot No.42 to the extent that balcony area be excluded for the
calculation of F.S.I, and, therefore, the respondent No.3 is
entitled to construct in the balcony area which was wrongly
included as per the original plan. This Act has been given
overriding effect under Section 32 of the Act and the
Government relaxing the zoning regulations cannot come in
conflict with Sections 4 and 14 of the Act. The Government
also has no power to modify the original declaration along
with the plan made or deemed to have been made under
Sections 4 and 14 of the Act, unless it is by way of amended
declaration by all the flat owners duly executed and registered.

309
If this is the position of law, the petitioners would not be
bound by the said G.O.Rt. No.689 M.A. dated 26-8-1997,
issued by the Government and the writ petition not
challenging the same specifically, would have no
consequence.
16. For the above reasons, I am of the opinion that the
modified building plan approved by the respondent No.l vide
proceedings No.696/P4/H/94 dated 2-1-1998 is illegal and
without jurisdiction and contrary to law and procedure.
According, I pass the order as under:
17. The writ petition is allowed. The impugned proceedings
are quashed with a further direction to respondent No.3 not to
put up any building or any alterations contrary to original
sanctioned plan and if any construction is made in pursuance
of the amended plan, the same shall be demolished within a
period of two months from today. In case of default, the
respondent No.2 shall take appropriate steps to demolish the
same at the cost of respondent No.3, within a period of two
months thereafter. No costs.

310
Kerala High Court
Lissy Lyju And Anr. vs Tahsildar And Ors. on 18 August,
2000
Equivalent citations: AIR 2001 Ker 82
Bench: J Koshy, M Ramachandran
JUDGMENT
Koshy, J.
1. All these original petitions are filed challenging the orders
of assessment under the Kerala Building Tax Act, 1975
(hereinafter referred to as 'the Act). The buildings in question,
though integral ones, portions of which are alleged to belong
to various persons separately and they claimed separate
assessment in their names. Their claim is based upon the
definition of 'building' in Section 2 (e) of the Act as well as
Explanation 2 to the above sub-section. It is also submitted
that tax is payable by the owner and if a separate ownership in
separate flat, apartment or separate portions is proved, there
should be separate assessment based upon the definition of
'owner' as well as the liability to pay tax. These buildings are
also commercial buildings and a contention was raised by the
Revenue that, in any event, Explanation to Section 2 (e) of the
Act is not applicable to commercial buildings. Considering the
various contentions, the learned single Judge referred these
matters to the Division Bench following the reference order
which we quote below ;

311
"An important question relating to the, interpretation of
explanation 2 to Section 2 (e) of the Kerala Building Tax Act,
1975 arises for consideration in these cases. The buildings in
question, though integral ones, are alleged to belong to various
persons in portions and these persons claimed separate
assessments under the Act over the portions alleged to belong
to them. There are cases where a single building has been put
up on land belonging in co-ownership to various persons and
the portions are different floors of the building and are
claimed as belonging to each under some arrangement
between them; cases where the building is claimed as
belonging even to persons who do not have any ownership in
the land, but who claim to have contributed to the construction
and thereby claim an identified portion of the building as their
own; there is also a case where the building is alleged to have
been constructed on land lying contiguous of various owners,
with the respective portions separated by common walls, but a
common hall is put in the upstairs. All these raise complicated
questions of law, particularly the last one mentioned as to how
the assessment of the entire building is to be completed.
2. Incidentally, in some of these cases, the question of capital
value is also involved. I am only referring to it as a question
arising in these cases, but the question which requires serious
consideration is the question of joint ownership and the
interpretation of explanation 2 to Section 2(e) of the Act. I

312
may also mention that in many of these cases the buildings
concerned are shopping complexes and the question will arise
whether portions thereof can be treated as apartments or to
which alone reference is made in Explanation 2 mentioned
earlier.
Having regard to the complexity of the questions involved. I
refer these cases for decision by a Division Bench."
2. Before going through the merits of the matter, we may refer
to the provisions in S. 2 (e) of the Act is as follows :
"2 (e) 'building' means a house, outhouse, garage, or any other
structure, or part thereof, whether of masonry, bricks, wood,
metal or other material but does not include any portable
shelter or any shed constructed principally of mud, bamboos,
leaves, grass or thatch or a latrine which is not attached to the
main structure."
'Owner1 is defined under Section 2 (1) as follows :
" 'Owner' includes a person who for the time being is
receiving, or is entitled to receive, the rent of any building,
whether on his own account or on account of himself and
others or as an agent, trustee, guardian or receiver for any
other person or who should so receive the rent or be entitled to
receive it if the building or part thereof were let to a tenant;"
Section 2 (1) was added to the definition clause with effect
from 10-2-1992 defining 'residential' building' which is as
follows :

313
"(1) residential building means a building or any other
structure or part thereof built exclusively for residential
purpose including out-houses or garages appurtenant to the
building for the more beneficial enjoyment of the main
building but does not include hotels, boarding places, lodges
and the like".
Before amendment with effect from 10-2-1992, building tax
was assessed based on the capital value of the building.
Thereafter, method of assessment is based on the plinth area.
Two rates of tax are provided after the amendment for
'residential buildings' and other buildings.
3. Section 7 compels the owner of the building to file return in
the prescribed manner and Section 9 deals with assessment
and owner has to file a return in the prescribed manner.
4. Contention of the petitioners is that the building includes
part of the building under Section 2 (e) and Explanation 2
further explained the above stating that If different apartments
are owned by different persons and the cost of construction of
the building is met by all such persons jointly, each such
apartment shall be deemed to be a separate building. It is
argued that there is no distinction between 'commercial
building' and residential building' in the main section.
Considering the definition of 'owner' and method of
assessment, it is argued that if part of the building owned
separately and can be used independently. It should be

314
assessed separately. On a reading of the provision as a whole
especially considering the object and method of assessment
etc. only such an inference can be made. Explanation only
makes the matter clear that if there are different apartments or
flats, they should be assessed separately even if it is jointly
owned and Explanation 2 cannot restrict the meaning of
definition 'building'. According to the Revenue, a very wide
definition of 'building' is given only to show that part of the
building also should be included as a building and while
assessing in the capital value method or plinth are method,
value or area of part of the building also should be included.
Explanation 2 is actually an exemption given and it should be
strictly constructed and it grants exemption only to apartments
and flats and apartments and flats refer only to residential
buildings and not commercial buildings and Explanation 1
also gives exemption for accommodations given to workers
under the Factory Act or Plantations which shows that
exemption is only for residential building.
5. Before we go into the details of the case, we may also refer
to some of the points referred by both sides regarding the
principles of interpretation. It is argued that the first and most
elementary rule of construction is literal construction. The
object of all interpretation is to ascertain the intention of the
Parliament and intention of the Parliament should be deduced
from the language used. What is intended by the Legislature

315
has to be found out by the words actually they have expressed.
When no definition is given in the Act and when the words are
not clear or unequivocal only, the problem of interpretation
arises.
6. It is held by the Supreme Court in Commissioner of Income
Tax, AP v. Taj Mahal Hotel. AIR1972 SC 168 that the words
used in the State should be construed in the popular sense. The
Supreme Court held as follows:
"6. Now it is well settled that where the definition of a word
has not been given, it must be construed in its popular sense if
it is a word of every day use. Popular sense means 'that sense
which people conversant with the subject matter with which
the statute is dealing, would attribute to it."
In this Act, the word 'flats' and 'apartments' are not defined
and building itself is defined in an inclusive way . In Ramavtar
Budhaiprasad v. Asst. Sales Tax Officer, AIR 1961 SC 1325
the Supreme Court had considered the question whether betel
leaves will come under the heading Vegetable' and held as
follows :
"(4) ......But it was submitted that betel leaves are vegetables
and therefore they would be exempt from Tax under item 6.
Reliance was placed on the dictionary meaning of the word
'vegetable' as given in Shorter Oxford Dictionary where the
word is defined as of or pertaining to comprised or consisting
of, or derived, or obtained from plants or their parts. But this

316
word must be construed not in any technical sense nor from
the botanical point of view but as understood in common
parlance. It has not been defined in the Act and being a word
of every day use it must be construed in its popular sense 'that
sense which people conversant with the subject matter with
which the statute is dealing would attribute to it."
It is well settled that the Act should be read as a whole
considering all the provisions of the Act as held Attorney
General v. Brown, (1920) 1 KB 773. It is an elementary rule
that construction should be made of all the parts together and
not of one part only by itself.
7. In taxing statutes imposing pecuniary burden on the
assessee, the provisions of the Act should be strictly
construed. In taxing statutes one has to look solely on what is
normally said. There is no equity about a tax and there is no
presumption as to tax. A burden of tax can be imposed by
clear and unambiguous provisions. In A. V. Fernandez v. State
of Kerala, AIR 1957 SC 657 the Supreme Court held as
follows : (Para 29)
"In construing fiscal statutes and in determining the liability of
a subject to tax one must have regard to the strict letter of the
law and not merely to the spirit of the statute or the substance
of the law. If the Revenue satisfied the Court that the case falls
strictly within the provisions of the law, the subject 'can be
taxed, if, on the other hand, the case is not covered within the

317
four corners of the provisions of the taxing statute, no tax can
be imposed by inference or by analogy or by trying to probe
into the intentions of the legislature and by considering what
was the substance of the matter."
The same view was expressed in Commissioner of Sales-tax v.
Modi Sugar Mills Ltd., AIR 1961 SC 1047. It was also
pointed out that even though there is no equity for taxation, if
there is ambiguity or two views are possible, than one which is
favourable to the assessee should be considered. In this
connection, we refer to the decision of the Supreme Court
reported in Mysore Minerals Ltd., v. Commissioners of
Income-tax (1999) 6 JT (SC) 444 : (AIR 1999 SC 3185) where
it was held that if two views are possible, one which is
favourable to the assessee should be taken. Based upon the
decision of the Supreme Court, in Commissioner of Income-
tax v. J.H. Cotla, AIR 1985 SC 1698 it was held as follows :
"Though equity and taxation are often strangers, attempts
should be made that these do not remain always so and if a
construction results in equity rather than in injustice, then such
construction should be preferred to the literal construction."
8. It was contended that if the word 'apartment' refers to
building for residential purposes, the word 'flat' is used not
with the same meaning. In State Level Committee v.
Morqardshammar India Ltd, (1996) 1 SCC 108 : (AIR 1996
SC 524) the Supreme Court held that surplusage should not be

318
preferred as two expressions used cannot mean the same thing.
If the two means the same thing subsequent expression will
become surpulsage. In Aswini Kumar Ghose v. Arabinda
Bose, AIR1952 SC 369 also it was held that the words in the
statute should not be brushed aside as being surplusage.
9. Again, it was argued that Explanation to Section 2 (e)
cannot restrict or enlarge the definition of word 'building' in
Section 2. Explanation is used to explain the meanings in the
words contained in the section which became part and parcel
of the enactment and the explanation cannot restrict the scope
of the section. Normally, an explanation is made to harmonize
or clear up any ambiguity in the main section and the words in
the Explanation cannot be taken. Therefore, it is argued that
separate flats and apartments separately owned by different
persons should be assessed separately even on the basis of the
main section. They also cited the decision of the Supreme
Court in Dr. M.K. Salpekar v. Sunil Kumar Shamsunder
Chaudhari, AIR 1988 SC 1841 where it was held that when
the section deals, with two categories of cases, residential and
non-residential accommodation, an explanation to the section
which is limited in scope to one category, namely, residential
accomodation, cannot affect the scope of the section with
reference to second category, namely, non-residential
accommodation. It was also pointed out that since part of the
building also can be called as building, considering the fact

319
that owner has to pay the tax, a part of the building owned by
the owner is separate building as per the definition of Section
2 (e). In this connection, they also cited the decision
in Notified Area Committee Nangal Township v. Bhakra
Management Board, Chandigarh, (1999) 5 JT (SC) 349 : (AIR
1999 SC 2569) that row of quarters or bungalows in one block
allotted to different persons shall be considered as separate for
the purpose of house tax under the Municipalities Act. Hence
the definition of building as such should be taken into account.
10. Now, we may refer to the decision rendered by the Kerala
High Court regarding the same point, that is, regarding the
assessment of multi-storeyed building considering the
definition of Section 2 (e) and Explanation. In the decision
reported in Balan v. State of Kerala, (1990) 1 Ker. LT 428 the
Court was considering the assessment of a building
constructed by seven co-owners. It was held as follows :
"6. The cumulative effect of the charging Section 6 is that
every building that is constructed after 1st day of April 1973
and the capital value of which exceeds rupees seventy five
thousand is liable to building tax. What then is a building for
the purpose of levy of the tax. The word 'building' is defined
in the Act and therefore the building which would be made the
subject-matter of the assessment shall satisfy the requirements
prescribed by the definition. I shall now read the definition :
"Section 2 (e) :

320
'Building' means a house, out-house, garage, or any other
structure, or part thereof, whether of masonry, bricks, wood,
metal or other material, but does not include any portable
shelter nor any shed constructed principally of mud, bamboos,
leaves, grass or thatch or a latrine which is not attached to the
main structure.'
Of the two explanations appended to this definition,
Explanation 2 is relevant, it reads :-
'Where a building consists of different apartments or flats
owned by different persons and the cost of construction of the
building was met by all such persons jointly, each such
apartment or flat shall be deemed to be a separate building'.
This explanation says that where a building consists of
different apartments or flats owned by different persons and
the cost of construction of such building was met by such
persons jointly, each such apartment or flat, by a fiction, has
been treated as a separate building. It is thus clear that but for
this fiction introduced by this Explanation a building which
consists of different apartments or flats owned by different
persons, as they admittedly have met the cost of construction
jointly, also would have been treated as a single unit for the
purpose of levying the building tax. In other words this
Explanation suggests that no other building the cost of
construction of which is met jointly by several persons, can be
treated as separate units for the purpose of levying the

321
building tax. That is the intention of then legislature is clear
from this Explanation. If that be the position the building in
dispute which was constructed for the purpose of using it as a
theatre necessarily has to be treated as one unit for the purpose
of levying the tax even assuming the cost of construction of
the building is met jointly by the petitioners. The scheme of
the Act, in my view, does not warrant a decision to the
contra."
There, the Court was considering the question of a single
theatre, that is, one theatre not separate by meats and bounds
and held that since seven persons jointly constructed a single
building, it can be assessed only as one building.
11. Next decision cited was the decision of T.L. Viswanatha
Iyer, J. reported in Bhrattathiripad v. Tahsilda (1994) 1 Ker.
LT 790. There, it was multi-storeyed building constructed
jointly by owners. The portion of the building claimed by each
member stands on his share of the land. Even though it was
one common building separate portions of the building were
owned by different persons. It was held as follows :
"6. The consolidation of nineteen returns into one, and the
assessment of the entire building as a single unit, is also not
warranted either in law or on the facts of this case. As per the
partition effected between the parties, which is recorded in
Ext. P1, each of the nineteen persons is entitled to a defined
identified portion of the 77.5 cents of land. Nothing has been

322
pointed out to discredit the genuineness of the oral partition or
its validity. The portion of the building claimed by each
member stands on his share of the land. It is true that the entire
building is one in the sense that it is a continuous one with
common walls separating the portions of two adjoining
owners. But otherwise, each of the nineteen persons is the
owner of the shop rooms standing on the share of the property
allotted to him. In such circumstances, I am of the opinion that
even without resort to Explanation 2 to Section 2 (e) of the
Act, the portions of the building belonging to each are liable to
be assessed only separately and not as one single consolidated
building. Building is defined in Section 2 (e) as including a
part thereof and therefore the total structure comprising of
sixty seven shop rooms, though structurally one, constitutes
different buildings in the hands of the respective owners, for
the purposes of the Act. This is not a case where the structure
is put up on co-ownership property, with each one of the co-
owners claiming a portion of the building as his, though the
land on which that portion stands is held in co-ownership.
This is a case where each of the owners is the owner of the
building as well as the land on which it stands, so that his title
to the building is absolute and complete. He is the exclusive
owner thereof. None of the owners' portions of the structure,
has any right over the portions of the building held by the
others. The building in its entirety does not belong to the

323
nineteen persons together, merely because they are owners of
portions thereof, any more than it can be said that street-house
in a Palakkad Agraharam or elswhere belongs jointly to all the
citizens of the village. Since each of the nineteen persons is
the owner of separate defined portion of the building with full
title thereto, it has to be assessed in his hand separately. The
assessment of the building in the hands of all the nineteen
owners as a consolidated unit is not warranted by the
provisions of the Act. As I stated earlier, this result follows
even without resort to Explanation 2 to Section 2 (e), the
applicability of which was disputed by the Government
Pleader."
There, the Court was considering a commercial building and
was of the opinion that even without resorting to Explanation
2 to Section 2 (e) each portion of the building can be assessed
separately.
12. Another decision cited is S. Balu v. State of Kerala, 1994
Ker. LJ (Tax cases) 278. There it was held that assessment of
multi-storeyed building consisting of 22 residential flats
should be assessed separately. It was held as follows :
"3. ..........The building is an integral one consisting of twenty
two flats. It is a multistroeyed one. The land belongs to the
various flat owners in co-ownership, after the transfer effected
to them of the undivided interest in the land, the transfer being
effected after the construction of the flats was complete. What

324
Explanation 2 lays down is that if a building consists of
different apartments or flats owned by different persons, and
the cost of construction of the building is met by such persons
Jointly, each apartment or flat shall be deemed to be separate
building. The ingredients of the Explanation are : (a) the
existence of a building; (b) that building must consist of
different apartments or flats; (c) the apartments or flats must
be owned by different persons and (d) the cost of construction
of the building should be met by such persons jointly. If these
ingredients concur, each of the apartments or flats will be
deemed to be a separate building, though the building is one
structurally and there is an intergral connection between the
various parts of the building. The Explanation in effect splits
an otherwise integral unit or building into multiple buildings,
liable to be assessed separately. It would have been otherwise
going by the main part of the definition alone. Evidently, this
has been done to encourage construction of apartments and
flats and to alleviate the burden that will otherwise fall heavily
by assessing the entire building as one unit."
According to His Lordship, this Explanation was added to
encourage construction of apartments and flats and to alleviate
the burden that will otherwise fall heavily by assessing the
entire building as one unit. It was also held that even if the
interest in land and ownership is transferred subsequent to the
construction of the flat, it should be assessed separately. Here,

325
we are not considering transfer of the interest after the
construction. In all these cases under consideration buildings
are commercial buildings and buildings were constructed by
co-owners. A Division Bench of this Court in Kurian George
v. Tahsildar, (1995) 2 Ker.LT 457 : (1995 AIHC 6198) held
that when a building is constructed consisting of separate and
distinct apartments or flats jointly by a group of persons, each
flat or apartment shall be treated as a separate building if each
one of the co-owners claims a portion of the building as his
and each of the co-owners is the owner of that portion of the
building having absolute title to it. The decision reported in
Bhattathiripad's case (1994 (1) Ker LT 790) (supra) was
approved in the above decision of the Division Bench and
Balan's case was distinguished as that was a case of
construction of a single theatre. A decision under the Kerala
Buildings (Lease and Rent Control) Act, 1965 is also cited to
show that one shop room in a row of shop rooms can be a
building for the purposes of that Act, that is, Madal Gopalan v.
Rohini, 1977 Ker LT 386 by v. Khalid J. (as he then was). The
Division Bench was considering a commercial building.
13. We may now analyse the case referred to us in the
background of the principles of interpretation referred earlier
and also considering the decisions cited before us. Before
going into the details of the facts, to understand the popular
meaning of the term 'apartment' and 'flat' as appearing in

326
Explanation 2 to S. 2 (e), we may refer to various meanings
given in standard dictionaries. It is true that popular meaning
may not be the same as that was given in the dictionary. As
held by Krishna Iyer, J. Dictionaries are not dictators of
statutory construction.(State Bank of India v. N. Sundara
Money - AIR 1976 SC 1111). But it is permissible to refer to
dictionaries to find out the meaning of the word as is
understood in common parlance subject to the scheme, context
and legislative intention of the Act. Apartment is mainly a
term used in America for residential units. Apartment and
Apartment House are defined in Black's Law Dictionary as
follows :
"Apartment: A part of a house occupied by a person, while the
rest is occupied by another, or others. As to the meaning of
this term, see People v. Clair, 38 Cal. 137."
"Apartment House : A building arranged in several suites of
connecting rooms, each suite designed for independent
housekeeping, but with certain mechanical conveniences, such
as heat, light, or elevator services, in common to all families
occupying the building."
'Apartment' and 'Apartment House' are defined in Webster's
Illustrated Contemporary Dictionary as follows :
"Apartment : One of several rooms or suites of rooms in one
building equipped for housekeeping."

327
"Apartment house : A multiple dwelling building divided into
a number of apartments."
In Oxford Encyclopaedia Dictionary, three meanings are given
for the word 'Apartment'. They are :
"1. A room in a building; a division in a house, separated from
others by partitions;
2. A set or suite of rooms; and
3. A compartment."
"Apartment House" is defined in Encyclopaedia Britanica as
follows :
"Apartment House, called Block of Flats in Great Britain, a
building containing more than one dwelling unit, each
designed for housekeeping. These units may be grouped in
many ways and vary in size, appointments, and facilities,
providing a wide variety of living accommodations capable of
satisfying the requirements of many different types of
families."
Even though in certain dictionaries it is stated that part of a
house also can be called an apartment, generally, it refers to a
residential unit in a building complex or in a hotel where a
family can independently live. In Kerala Apartment
Ownership Act, 1983 'apartment' is defined as follows :
" 'apartment' means a part of the property intended for any
type of independent use, including one or more rooms or
enclosed spaces located on one or more floors (or part or parts

328
thereof) in a building, intended to be used for residential
purposes and with a direct exit to a public street, road, or
highway or to a common area leading to such street, road or
highway;"
From the totality of circumstances, one can come to the
conclusion that the word 'apartment' is mainly used for
residential accommodation and not for commercial rooms.
Therefore, the word 'apartment' in Explanation 2 may not
apply to commercial complex. But, in the explanation, the
word 'flat' is also used. According to Blacks' Law Dictionary a
'flat' means :
"A floor or separate division of a floor, fitted for housekeeping
and designed to be occupied by a single family.
Cent. Dict. A building, the various floors of which are fitted
up as flats, either residential or business."
Under the Webster's Illustrated Contemporary Dictionary, a
'flat' means : "A set of rooms on one floor or apartment." it is
not stated that it should be for residential purposes whereas the
Black's Law Dictionary points out that 'flats' can be used for
business purposes also. According to Webster's Revised
Unabridged Dictionary, it may refer to "a floor, loft, or storey
in a building." it also shows that it can include "a floor of a
house, which forms a complete residence in itself." Jowitt's
Dictionary of English Law refers to a 'flat' as "a separate self-
contained dwelling unit." However, that was based on the

329
decision of Murgatroyd v. Tresarden (1947) KB 316 on
interpretation of a flat as used in Housing finance Act. 1972
and that is not a general definition. In oxford Dictionary it is
defined as follows:
"Floor, storey, suite of rooms usually on one floor forming
complete residence."
Even though the term 'flat' can be referred to a separate
apartment unit, on a reading of Black's Law Dictionary 'flat'
can be used for business also and not for residence alone. An
independent part of house can be called a flat if it can be
independently used. If apartment and flat can have the same
meaning it was not necessary for the Legislature to use the
word 'flat' after 'apartment' in Explanation 2 to Section 2 (e), If
such is the interpretation, the word 'flat' becomes surplusage.
As mentioned in Corpus Juris Secondum, the term 'flat' can be
used in different senses and a flat in its original etymological
sense is a floor in a building or a portion of such a floor.
14. The learned advocates appearing for the assessees pointed
out various advertisements showing that flats are available for
rent for business purposes as well as residential purposes. It is
stated that an independent floor or part of the floor of a
building if it can be independently used it can be a flat
irrespective of the user whether it is residential or commercial.
Considering the scheme of the Act, the present popular
meaning in India for the term 'flat' etc. we are of the opinion

330
that unlike the apartment, flat need not be for residential
purpose only as defined in Black's Law Dictionary. It can be
for business purposes also. Therefore, the term 'flat' used in
Explanation 2 to Section 2 (e) is not limited to residential
purposes only but also for commercial purposes.
15. As held by the Supreme Court in Dr. M.K. Salpekar v.
Sunil Kumar Shamsunder Chaudhari, MR1988 SC 1841
explanation cannot restrict the scope of the main term
'building'. Apart from the explanation which is intended to
help the co-owners who are constructing flats and apartments
jointly, if a separate definite portion of the building is owned
separately by a person and can be used separately it can be
assessed separately. Section 2 (e) makes no difference
between commercial or residential building. It specifically
mentions part of the building also and the assessment is on the
owner of the building. Act has to be interpreted as a whole.
Part of the building if independently, can be used with
separate door and with independent access and separately
owned it can be assessed separately even without the aid of
explanation especially considering the definition of 'owner'
and assessment is in respect of the owner of the building. Flats
and multi-storeyed buildings are jointly made by co-owners
considering the exorbitant cost and reducing the expenses.
However, if the building is not coming under the explanation
of Section 2 (e), such buildings or independent self-sufficient

331
portion of the building cannot claim assessment as a separate
building unless the owner has got ownership in separate
definite portion of the building which has got independent
access. In other words, if it is jointly owned by several
persons, it cannot be stated that it is a separate building and
each part should be owned by separate persons for claiming
separate assessment unless one will come under the
Explanation. We affirm the decision in Bhattathiripad v.
Tahsildar, (1994) 1 KerLT 790 and agree with the Division
Bench reported in Kurian George v. Tahsildar (1995) 2 Ker
LT 457 : (1995 AIHC 6198).
16. We have answered the reference in general. Each
assessment depends upon the facts of each case. Whether the
portion of the building claimed for assessment is a separate
unit, whether it is constructed by co-owners, whether each
portion is separately owned by co-owners, whether benefit of
the explanation to Section 2 (e) can be claimed by joint
owners, whether annual value fixed by the Municipal
authorities can be accepted etc. have to be decided on the facts
of each case. In none of these cases, assessing authority
considered these questions in detail. There are questions of
annual value involved in some cases. Some of the cases were
decided even without a hearing. Therefore, we are of the
opinion that a fresh hearing should be granted and fresh orders
should be passed by the assessing authority in all these cases.

332
The amounts paid towards tax either as per the interim orders
of this court or as a condition precedent in filing the appeal
etc. Should be adjusted only after passing final orders. The
impugned orders are set aside with freedom to pass fresh
order. Assessing authorities are directed to reconsider the
matter and pass fresh orders with notice to the parties.

333
Gujarat High Court
Centre Point Welfare Association vs Nita International
[Alongwith ... on 8 March, 2001
Equivalent citations: (2001) 4 GLR 2777
Bench: B Patel, R R Tripathi
JUDGMENT
B.C. Patel, J.
1. Special Civil Application No. 8931 of 2000 has been filed
by Centre Point Welfare Association. S.C.As. No. 8553 of
2000 and 8781 of 2000 have been filed by the Nita
International. Spl. C.A. No.8930 of 2000 has been filed by
Nijhawan Travels Pvt. Ltd., occupier of shops No. 54 and 48.
2. On 17/8/2000 it was stated before the Court by the learned
counsel appearing for the Centre Point Welfare Association-
occupiers, (hereinafter referred to as "Association" or
"Occupiers") that all the 4 complexes i.e. A, B, C and D shall
not be used for the purpose other than residence and they shall
discontinue the use as office complex by mid-night of Sunday
- 20/8/2000.
3. On 1/9/2000 the Court passed an order in Civil Application
No. 7851 of 2000 to the effect that the matter is already
pending before the Apex Court and hence the Court is not in a
position to pass any order more particularly when the
cognizance is already taken by the Apex Court.

334
4. S.C.A. No. 8781 of 2000 was filed by Nita International for
quashing and setting aside the notice dated 20/7/2000 u/S. 260
(1) of the Bombay Provincial Municipal Corporations Act (for
short 'the BPMC Act') and notice u/S. 260 (2) of the BPMC
Act dated 5/8/2000. It was also prayed that the respondent
Corporation should seal the shops and offices in Centre Point
since the same are being used without Building Use
permission (hereinafter referred to as "B.U. Permission") and
the petitioner requested to direct the Ahmedabad Municipal
Corporation (for short "Corporation") to remove the shops
from the cellar as the shops were constructed against approved
plan and to see that the space is made available for the purpose
of parking. The petitioner also prayed for a direction to the
Corporation to provide fire safety measures as the
developer/builder has not provided.
5. The Division Bench heard the matters and considered the
submissions made by the learned counsel for the petitioners -
occupiers - shop keepers that they were not only cheated but
were defrauded; that the builder had acted in breach of the
provisions contained in the law and therefore, they should not
be made to suffer. The Court considering the decision of the
Apex Court in the case of MANJU BHATIA V/S. NEW
DELHI MUNICIPAL COUNCIL AND ANR. (1997) 6 S.C.C.
370 and particularly para. 12, of the judgment, issued notice to
the builder firm and also its partners (hereinafter referred to as

335
"Builder"). In response to the notices, the Builder M/s.
Hasmukh Shah and its partners Mr. Hasmukh Shah and Mr.
Upendra Shah appeared before the Court.
6. Before considering the submissions made by the learned
counsel for the Builder, it would be just and proper to consider
the background. The Court found that the use of the building
was not in conformity with the zoning regulations in so far as
the building in question is concerned. The plans were
submitted for the use of the construction of the building for the
purpose of residence only with certain number of shops to
fulfil the need of the persons who may occupy the building or
the residents of nearby areas. The tower in question was
erected contrary to the building regulations. Instead of the use
for the purpose of the residence, the tower in question was
being used for the purpose of office complex. The Court
pointed out that such use will cause nuisance and/or
annoyance to the other genuine occupiers of the building.
People who have purchased the property for the purpose of
residence, if were told that part of the building is to be used
for the purpose other than the residence, then they may not
have purchased a flat in such a tower as the buyers may think
that they will not get peace on account of the nuisance and
annoyance which is a necessary consequence of commercial
use. When people are buying the property with the bonafide
belief that they will have a good residential complex and

336
without disturbance of others they will be in a position to
enjoy a housing accommodation, they must be permitted to
enjoy the property for the purpose for which they have spent.
The Court found that from the inception several illegalities
were committed and the officers of the Corporation had not
taken any measures to stop the same.
7. The Court noticed that in the cellar and on the ground floor
the Builder instead of providing common amenities and
parking, converted the area of common amenities and parking
into shops and disposed of as such. Learned counsel appearing
for the petitioners - occupiers pointed out that the documents
were stereo-typed, and, there was no mention about the
permission for construction of shops in large number, being
granted by the Corporation It seems that they were persuaded
to buy the shops. The shops constructed in the cellar as well as
on the ground floor were in contravention of the provisions of
the building regulations. Before the Court the fact that the
construction of shops being shops nos. 1 to 27 in the cellar and
shops nos. 28, 29, 30, 31, 44, 45, 46 and 48 on the ground
floor were not in accordance with the building regulations, and
thus the construction was unauthorised, was not disputed. It
was pointed out in the judgment that common amenities were
required to be provided in the building. The area meant for
common amenities cannot be used for any other purpose, i.e.
for shops or parking. The Court pointed out that the common

337
amenities will provide an opportunity to the occupiers to live
in real society. The Court expressed the opinion that when the
construction is not in conformity with the regulations it cannot
be permitted to stand and should be removed without fail. The
Court also noted that for all these years the residents of this
building could not raise their voice though the building was
used for the purpose other than for which the plans were
submitted and approved. The Court also found that the Builder
constructed a wall and boundary with a view to facilitate shop
keepers to carry on business in the place which was meant for
parking and/or common amenities. The Builder charged huge
amount for this. The Court was of the view that the breach
cannot be pardoned and cannot be permitted to continue.
8. The Court also noted that the 9th floor of the building was
not approved by the Corporation. The copies of the plans were
placed before the Court which were signed by the office
bearers of Amichand Park Cooperative Housing Society
Limited (hereinafter referred to as 'society') as the owner, Shri
R.H. Patel as Engineer, Shri Jayesh J. Desai as Structural
Engineer, and Shri Patel R.H. as Clerk of Works. From the
plans, it was clear that the same were signed by one Mr.
Upendra Shah as owner and as an office bearer of the society.
It is clear from the judgment that it was submitted before the
Court that at the relevant time he was the person having
control over Amichand Park Coop. Housing Society Ltd. The

338
grievance was made before the Court by learned Advocate for
Association Mr. Patel that even the day on which the judgment
was delivered, the administration was not handed over by said
Upendra Shah to the members of the Cooperative Housing
Society, who are actually occupying the building for
residential purpose. The grievance was made that though they
are the best persons to look after the building, its
administration is yet not handed over to them and control rest
with the said Upendra Shah, a builder and a partner of M/s.
Hasmukh Shah.
9. The Court pointed out that the plan (sheet no.8) shows the
height of the tower in question. In all 8 floors were to be
constructed. The plan shows that there is 3 mtrs. height of
cellar. The cellar plinth is of 2 mtrs. Thereafter, there are 8
floors each consisting of 2.60 mtrs. The height of the building
as indicated in the plan was 30 mtrs. without taking into
consideration the height of parapet wall on the terrace. The
Court pointed out that as per the building regulations it was
not permissible to erect a building having more than 30 mtrs.
height. The plan also shows that the building with the height
of 30 mtrs., was sanctioned by the Corporation. There was no
sanction to erect or construct 9th floor. The Corporation
granted permission being permission no. 28 dated 12/8/1992,
which is clear from the stamp put on the plans. The Court was
convinced that construction was not in accordance with the

339
approved plans but was in violation of building regulations
and bye-laws. It was clear from the documentary evidence
placed on record that:-
(i) construction of shops in the cellar was in contravention of
the provisions contained in the building bye-laws, regulations,
etc.
(ii) Shops on the ground floor bearing nos. 28, 29, 30, 31, 44,
45, 46 and 48 were not part of the original plan and were
constructed not in accordance with the regulations and bye-
laws and also plans which were submitted before the
Municipal Corporation and approved by the Corporation.
These Shops were constructed without any sanction.
(iii) That the 9th floor which was constructed in the tower in
question was in breach of building regulations and no
permission whatsoever could have been granted by the
Commissioner. Though no permission was granted, the builder
erected 9th floor.
10. The construction was admittedly therefore in breach of the
building regulations. By detailed judgment considering the
submissions made by the learned counsel the Court arrived at
the conclusion aforesaid. The Corporation demolished
particular part of the building which was contrary to the
building regulations.
11. Ilyias Chataiwala, member of the association i.e. Centre
Point Welfare Association has filed an affidavit interalia

340
pointing out that the tower no.1 in Centre Point, the building
in question has been constructed by the builder / organisers /
Contractor M/s. Hasmukh Shah in violation of the provisions
of the B.P.M.C. Act and the building regulations framed
thereunder consciously with a view to dupe the members of
the association. It is specifically averred in the affidavit that it
has been disclosed during the proceedings before this Court
that the builder firm had constructed the shops in the area
which was earmarked for the purpose of parking and for
providing common amenities for the benefit of the occupiers
of the tower. It is also averred that the entire 9th floor has been
constructed without even getting the plans approved for the
said floor from the Corporation. He has submitted that the
plans were submitted in 1984. The plans were approved in the
year 1992. Though there was no reference to construction of
9th floor in the plan the builder has constructed 9th floor.
12. In the affidavit, it is further pointed out that the contractor
constructed 27 shops in the lower plaza and 8 shops in the
upper plaza in contravention of the building regulations. The
Corporation demolished the shops which were unauthorisedly
constructed.The persons who purchased the shops did not
know at the relevant time that the contractor/builder
constructed the said shops in violation of the building
regulations. The persons purchased the shops in question in
good faith from the builder firm and they signed the

341
agreement. According to the deponent on behalf of the
association, the agreements are illegal and the signatures were
obtained on the information furnished by the builder that the
construction of the entire building was strictly in accordance
with law. The shop keepers purchased the shops and
established their business by investing huge amounts. In view
of the demolition of the shops they are now on the streets and
have lost their source of income. According to the purchaser
of such shops, a person who has committed wrong is enjoying
the fruits of his misdeeds. It is further submitted in the
affidavit that it would be practically impossible for shop
keepers to find out suitable premises elsewhere in the same
area or locality to establish a new business or business in a
different locality will take certain number of years to get the
business established.
13. The deponent has further stated that the builder passed on
the entire tower no.1 as office complex and in view of the fact
that it is in residential locality, they had to convert the
premises into residence though they paid price for having their
offices. Some have converted the office as residence & some
of them are in the process of converting the same into
residence. It is averred in para 4 that the loss is suffered on
account of the fact that the builder has suppressed true facts
from the shop keepers as regards the irregularities committed
by it in the construction of the building. On behalf of the

342
Association, it is submitted that had the builder/developer
disclosed true facts about irregularities, illegalities and
unauthorised construction, the shopkeepers and office owners
in the building would not have parted with money for shops
and offices. The deponent has stated that the builder cheated
the members of the Association and committed breach of trust.
It is stated that the persons are entitled to claim damages from
the builder for the losses suffered by them.
14. The deponent has referred about the fact that the Building
Use permission was never obtained; that the fire safety system
was not provided in the building in question. It is further
pointed out that the builder has not provided the fire lift
though he was under an obligation to provide it under the
agreement. It is further averred that the builder was under an
obligation to provide basic amenities, water, electricity, fire
safety, fire lift, lift, and parking in the building. It is further
averred that it was the duty of the builder to provide common
amenities in the building at the place earmarked for that
purpose in the plans.
15. The deponent has referred Section 57 of the Bombay Land
Revenue Code with a view to point out that without paying
conversion charge to the State Government, the builder has
disposed of the property in violation of the provisions
contained in the Bombay Land Revenue Code. It was his
obligation to pay these charges to the Government.

343
16. Excluding 9th floor, total area of demolished shops comes
to 7419 sq.ft and considering the present market value at the
rate of Rs.3500/- per sq.ft. loss suffered by the shop keepers
comes to Rs.2,59,66,500/-. Considering the amount of
furniture and fixtures at the rate of Rs.750/per sq.ft. they have
suffered a loss to the tune of Rs.55,64,250/-. They have
indicated goodwill at the rate of Rs.750/- per sq.ft. which
comes to Rs.55,64,250/-. Considering the Misc. Expenses i.e.
electric connection, telephone etc. at the rate of Rs.200/- per
sq.ft. comes to Rs.14,83,800/-. The Association has also
pointed out that the cost of the second lift, fire safety
equipment, borewell etc. comes to Rs.50 lacs and thus total
sum of Rs.3,80,14,550/- is the approximate damage suffered
by the members of the Association. Over and above
conversion charges from the residence to commercial or the
difference between market rate for residence and commercial
premises is to be paid by the builder. It is contended that the
members of the Association purchased the building for their
offices. It is for the builder/developer who is engaged in the
business of building construction to know that the area is in
"residential zone" and the premises could be utilised only for
the permissible uses in a predominantly residential zone and
no part of the building can be used for the purpose of office
complex etc. yet the builder has asked the members to
purchase for their offices. It was his duty not to offer the

344
building for office purpose, yet with a view to earn wrongful
gain he has put others to wrongful loss and not only the shop
keepers whose shops are demolished but even the present
occupiers of the building who purchased offices in the
building for the purpose of offices are suffering as they cannot
make use of the building for office purpose.
17. On behalf of the Association, Shri Pranlal Kalaria has also
filed an affidavit on 21.9.2000 pointing out the breaches
committed by the builder. It is pointed out in para 5 that the
brochure clearly reveals that the shops were proposed to be
constructed in the lower plaza. These details were misleading.
In fact, the portion below the lower plaza was required for the
purpose of parking as emerged during the proceedings and
according to the plans sanctioned by the Ahmedabad
Municipal Corporation. He categorically stated that all the
members were told that the plans as indicated in the brochure
were approved by the Municipal Corporation. He has
specifically stated that what was shown to the members at the
time of purchase of individual units was infact the brochure
and not the approved plans. Zerox copy of the brochure is
produced on record. He has also pointed out that the
agreements were entered into with the builder during the
period between 1988 and 90 i.e. much before the plans were
approved by the Municipal Corporation. According to the
deponent there was no question of plans being approved and

345
being shown to the members before buying the property as the
plans were approved much after completion of construction.
The deponent Shri Pranlal has stated that the builder has come
out with false statements on oath with a view to suit his
purpose and that is further demonstrated by the fact that the
construction of the 9th floor in the tower in question was never
under contemplation in any of the plan submitted to the
Corporation. The deponent Shri Pranlal has stated that "I say
that in fact no plans were shown to any of the members of the
association and in fact no plan contemplating the construction
of the 9th floor in this plan exists today.". In view of this clear
picture, Shri Pranlal has stated that the builder has made false
statements on oath. It is clearly stated by Shri Pranlal that in
the year 1989 the builder commenced the construction of
tower no.1 as commercial building without approval of the
plans as it now emerges. In the agreement, it is clearly stated
that the members were allotted either shops or office premises.
Some have not entered into any agreement but they have been
given allotment letters and in the said allotment letters, it is
clearly indicated that they were allotted commercial units.
Thus, contrary to the building regulations, in a residential
zone, commercial complex was constructed and units were
allotted. The builder has never sold or allotted the premises in
question as residential units to any of the members of the
association. From the purchasers about 90% of the amount

346
was taken prior to handing over possession. In Para 9, Shri
Pranlal has pointed out that as per Item No. VIII of clause 5 of
the xerox copy of the agreement, fraction of the purchase price
was required to be paid against possession of the unit. As per
the said clause only 10% of the total purchase price was
required to be paid against possession. It is also indicated in
the affidavit by Shri Pranlal that the modus operandi adopted
by the builder was with an intention of placing a member of
the Association who does not pay the balance amount at the
time of taking over possession in an embarrassing position, in
as much as if he does not pay the amount or if he refuses to
sign the agreement, he would not be given possession of the
unit even though he might have paid substantial amount
towards purchase price and he would also not be refunded the
amount which he might have paid till that date. Such amount
was to be paid only after re-sale of the property. According to
the Association, the members were thus left with no
alternative but to sign the agreement irrespective of the recitals
being prejudice to their interest. It is specifically averred by
Shri Pranlal that the builder has placed himself in a
dominating position as against the servient position of the
purchaser and the members were left with no alterative but to
sign the agreement irrespective of the recitals being prejudicial
to their interest. Shri Pranlal has also referred about goodwill
& huge investment made by them in the shops and offices and

347
has prayed to direct the builder to pay the amount by way of
damages. The Association has also made a grievance that the
builder has come out with a case that the builder entered into
an agreement with Amichand Park Cooperative Society but
the details of such agreements are not made known to the
Association. Even records of the society have not been handed
over to the Association by the builder. All the members are
not given share certificates. Apart from disposing the space
meant for parking and common amenities by construction of
unauthorised shops, the Association has pointed out that the
terrace was meant for the welfare of the Association/Society.
The terrace belongs to the society. The terrace contained
drainage lines, electric lines and telephone cables. In flagrant
violation of rules and in breach of law, the builder has
assigned the rights in favour of Nita International with a view
to earn huge profit.
18. It is also pointed out by the Association in the affidavit
that the builder has laid much stress on the fact that the
allottees/purchasers of the shop have taken possession. It is an
eye wash. The buyers were required to pay to the builder
amounts towards purchase price from time to time. It is
pointed out in Para 21 that the builder handed over the
possession to the concerned allottee. Clause XIX which is
reproduced in the affidavit of the builder if read, it is evident
that it was stated that "the entire project including the office

348
complex is not yet completed". Thus it is clear that in
residential zone, office complex was constructed. This is not
permissible and Corporation cannot permit the use of
buildings for any other purpose than indicated in the
predominantly residential zone. The builder/developer has
disclosed his tactic apprehension that the permission as
required might not be granted because some construction was
carried out in contravention of the building regulations and
with a view to circumvent the obligation of the
builder/developer for obtaining permission, the phrase was
incorporated in the clause. The builder/Developer was under
an obligation to pay compensation to the members of the
Association in case any unit or any portion of the unit was
required to be demolished or is not allowed to be used as
office. As stated by the Association nearly 90% of the
purchase price was paid by the occupants to the builder in
good faith before completion and occupation of the building
and therefore members were left with no alternative but to
sign the document i.e. the possession receipt as required by the
builder.
19. The Apex Court in the case of CENTRAL INLAND
WATER TRANSPORT CORPN. LTD. vs. BROJO
NATH reported in AIR 1986 SC 1571 had an occasion to
consider unconscionable contracts. In the instant case there
was gross inequality of the bargaining power together with

349
terms unreasonably favourable to the stronger party, viz. the
builder. It was not a standard agreement. In paragraph 84 of
the aforesaid case (AIR 1986 SC 1571), the Court pointed out
about reasonableness or fairness of clauses in contract where
there is inequality of bargaining power. The Apex Court also
considered a case of GILLESPIE BROTHERS & CO.LTD.
vs. ROY BOWLES TRANSPORT LTD reported in (1973) 1
QB 400. The Apex Court also considered the case of
LLOYDS BANK LTD. vs. BUNDY reported in (1974) 3 ALL
ER 757 wherein Lord Dening first clearly enunciated his
theory of 'inequality of bargaining power'. The Court
emphasised the observations that :
"There are cases in our books in which the courts will set aside
a contract, or a transfer of property, when the parties have not
met on equal terms, when the one is so strong in bargaining
power and the other so weak that, as a matter of common
fairness, it is not right that the strong should be allowed to
push the weak to the wall. ..."
The Apex Court also considered the speech of Lord Diplock in
paragraph 85 of the judgment. We reproduce the part which
was emphasised by the Apex Court:-
" Was the bargain fair?. The test of fairness is, no doubt,
whether the restrictions are both reasonably necessary for the
protection of the legitimate interests of the promisee and
commensurate with the benefits secured to the promisor under

350
the contract. For the purpose of this test, all the provisions of
the contract must be taken into consideration".
In paragraph 90, the Apex Court observed as under:-
"Should then our courts not advance with the times? Should
they still continue to cling to outmoded concepts and outworn
ideologies? Should we not adjust our thinking caps to match
the fashion of the day? Should all jurisprudential development
pass us by, leaving us floundering in the sloughs of
nineteenth-century theories? Should the strong be permitted to
push the weak to the wall? Should they be allowed to ride
roughshod over the weak? Should the courts sit back and
watch supinely while the strong trample under foot the rights
of the weak? We have a Constitution for our country. Our
judges are bound by their oath to 'uphold the Constitution and
the laws'. The Constitution was enacted to secure to all the
citizens of this country social and economic justice. Article 14
of the Constitution guarantees to all persons equality before
the law and the equal protection of the laws. The principle
deducible from the above discussions on this part of the case is
in consonance with right and reason, intended to secure social
and economic justice and confirms to the mandate of the great
equality clause in Art. 14. This principle is that the courts will
not enforce and will, when called upon to do so, strike down
an unfair and unreasonable contract, or an unfair and
unreasonable clause in a contract, entered into between parties

351
who are not equal in bargaining power. It is difficult to give an
exhaustive list of all bargains of this type. No Court can
visualize the different situations which can arise in the affairs
of men. One can only attempt to give some illustrations. For
instance, the above principle will apply where the inequality
of bargaining power is the result of the great disparity in the
economic strength of the contracting parties. It will apply
where the inequality is the result of circumstances, whether of
the creation of the parties or not. It will apply to situations in
which the weaker party is in a position in which he can obtain
goods or services or means of livelihood only upon the terms
imposed by the stronger party or go without them. It will also
apply where a man has no choice, or rather no meaningful
choice, but to give his assent to a contract or to sign on the
dotted line in a prescribed or standard form or to accept a set
of rules as part of the contract, however, unfair, unreasonable
and unconscionable a clause in that contract or form or rules
may be. This principle, however, will not apply where the
bargaining power of the contracting parties is equal or almost
equal. This principle may not apply where both parties are
businessmen and the contract is a commercial transaction. In
today's complex world of giant corporation with their vast
infrastructural organisations and with the State through its
instrumentalities and agencies entering into almost every
branch of industry and commerce, there can be myriad

352
situations which result in unfair and unreasonable bargains
between parties possessing wholly disproportionate and
unequal bargaining power. These cases can neither be
enumerated nor fully illustrated. The court must judge each
case on its own facts and circumstances."
20. Mr. Patel, learned advocate for the Association submitted
that facts and circumstances narrated by him clearly indicate
that the builder in the instant case was in a stronger position.
He took almost 90% of the amount and the shopkeepers had
no alternative but to enter into the agreements. According to
him, therefore also, the agreement is not binding. We make it
clear that we are not deciding the matter solely on the ground
that the agreement is not binding, but we are disposing of
these matters on various other grounds stated in this judgment.
However, suffice it to say that reading several clauses of the
contracts, it is clear that the builder, after collecting major
amount (90%) towards purchase price, executed the
documents having all conditions in his favour. Shopkeepers
had no voice in change of plans that may be required at the
instance of Corporation. No provision with regard to return of
money if plans were to be changed or varied was made. About
return of money, shopkeepers were not certain as to when they
will get the amount back, if subsequently declined to make the
full payment. It was builder's obligation to first get the plans
approved, and after construction, to inform Corporation in

353
time and only after B.U. Permission is granted to allow the
persons to occupy. Despite legal obligation, without such
permission, the builder put the shopkeepers in possession.
Reading the entire document which was read and re-read in
Court by counsel for parties, in the facts and circumstances of
the case narrated, it leaves no doubt that the aforesaid
principles will have to be applied in the facts of the present
case.
21. Both the sides, viz. the shopkeepers and the builders have
referred to Articles of Agreement and the terms of the
agreement. Clause II of the agreement provides that by virtue
of the agreement for sale dated 5.11.1980, the Panchwati
Estate Owners Association is entitled to purchase the property
as described in the First Schedule to the Agreement. Reading
clause 3 of the agreement, it appears that there was an
agreement dated 15.1.1981 between the said Association
whereby the builders have been given absolute authority and
power to enroll members, to construct buildings and to allot
shops/flats in the said building on such payments as may be
agreed upon from time to time and to do all things and acts
necessary and expedient in connection therewith for and on
behalf of the Association. It is required to be noted that after
the aforesaid date, plans have not been produced before the
Municipal Corporation for its approval for the building to be
constructed on behalf of the Association, but the plans have

354
been produced by Amichand Park Co-Op. Housing Society
Limited. It is not the case of the builder that plans were
subsequently drawn on behalf of the Association by the
builder. It is not the case of the Corporation also that the plans
were produced on behalf of the Association by the Builder.
The builder had right to sell the shops/flats in the said building
to different purchasers with a view to ultimately making
purchasers of the shops/flats members and shareholders of the
Association. About the changes to be made in the plans which
were already submitted to the Corporation, we have made a
reference earlier, but suffice it to say that the agreement refers
that the purchaser irrevocably consented to the builders for
carrying out such changes. By the agreement it was not open
to the purchaser to further investigate the title of the property
and no requisition or objection shall be raised on any matter
relating thereto. On the date of execution of the agreement
with Nita International, partner of M/s. Hasmukh Shah, Mr.
Hasmukh Shah has signed the documents and it is undated. On
the date of agreement, by way of deposit or earnest money, a
sum of Rs.1 lakh was collected by the builder against the total
sum of Rs.2,50,000/-. The remaining sum was to be paid
against the possession. The amount is referred as deposit or
earnest money in clause 6 also. Promise was given that on
30th July 1989, subject to availability of material, possession
will be given. It was specifically mentioned in clause 12 that

355
as soon as the building was notified by the builder as
complete, purchaser of the shops/flats shall pay the arrears of
the amount within a period of 15 days of such notice and
under no circumstances, possession of the property was to be
given unless and until all payment required to be made against
the agreement was made to the builder. In case of refund, we
have indicated as to when the amount was to be refunded.
There is a further clause in the agreement that after the
building is complete and ready and fit for occupation, and
after the Association as aforesaid is registered, and only after
all the shops/flats in the said building has been sold and
disposed of by the builder and the builder has received all dues
payable to them under the terms of the agreement with various
purchasers of flats/shops in the said building, the builder shall
obtain necessary conveyance of the said property directly in
favour of the said Association from original owners.
A conjoint reading of the different clauses of this agreement
makes it absolutely clear that M/s. Hasmukh Shah was a
'builder'. Clause 9 of the agreement states that the "builder
with the intention of development the said property has
arranged to start construction". Hence he is also the
'developer'. It is the builder, who with an intention to develop
the property commenced the activities, and as per clause 3 had
the 'power to enroll members' which clearly indicates that the
builder was the 'promoter' of the scheme.

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22. To regulate promotion of the construction of, and the sale,
management and transfer of flats on ownership basis and to
provide for the ownership of an individual apartment and to
make such apartment heritable and transferable, the
legislature, after receiving the assent of the President, has
enacted an act known as the Gujarat Ownership Flats Act,
1973 (hereafter referred to as the Flats Act). By Notification
No. GH/J 14 (A)/73 FOB-1473-A(i) published on 1.8.1973,
the Government of Gujarat appointed 1st August 1973 as the
date on which the said Act came into force in the areas of
Ahmedabad Municipal Corporation and other Municipal
Corporations. Similarly, by Notification No. GH/I 15 of
83/FOB-1473/TH published on 16.6.1983 the Government of
Gujarat appointed 16th May 1983 as the date on which the
flats act came into force in the area of AUDA and other Urban
Development Authorities. It is required to be noted that the
Developer in the instant case has violated the provisions of the
Flats Act.
Section 2 (a) defines 'flat' as under:
2.(a). "" "Flat" means a separate and self-contained set of
premises forming part of a building and used or intended to be
used for residence, or office, or show-room, or shop or
godown or garage; and includes an apartment.
Explanation.- Each set of premises shall be deemed to be
separate, and self contained notwithstanding that common

357
provision is made for sanitary, washing, bathing or other
conveniences in respect of two or more sets of premises. ""
Section 2 (c) defines 'promoter' as under:-
2.(c). "" "promoter" means a person who constructs or causes
to be constructed, a block or building of flats for the purpose
of selling on ownership basis some or all of them to other
persons, or to a company, co-operative society or other
association of persons, and includes his assignees; and where
the person who constructs or causes to be constructed and the
person who sells are different persons, the term includes
both."
Section 4 of the Flats Act provides that before accepting
advance payment or deposits, the promoter has to enter into an
agreement and the agreement is required to be registered. The
said section 4 reads as under:
"Notwithstanding anything contained in any other law for the
time being in force a 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, before he
accepts any sum of money as advance payment or deposit,
which shall not be more than 20 per cent of the sale price,
enter into a written agreement for sale with each of such
persons who are to be taken or who have taken such flats, and
the agreement shall be registered under the Registration Act,

358
1908 and such agreement shall contain the prescribed
particular; ... "
Section 5 of the Flats Act mandates that whatever amount
received is to be credited as advance or deposit and any sum
so taken is to be kept in a separate bank account.
In the instant case, it is clear that more than 20% of the
amount has been taken as deposit or earnest money, which is
clear from the agreement produced on record. Thus, the
acceptance of the amount itself is in clear breach of the
provisions of the Flats Act.
23. So far as the liabilities of the promoter are concerned,
section 3 provides for the same. Section 3(2)(i) reads as under:
(2) A promoter, who constructs or intends to construct such
block or building of flats, shall (i). not allow persons to enter
into possession until a completion certificate, where such
certificate is required to 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). "
24. Section 7 of the Flats Act contemplates that after the plans
and specifications are disclosed, no alterations or additions are
to be made without consent of persons who have agreed to
take the flats. Reading the section it is clear that the builder is
prohibited from making any alterations in the structure of the
building or from making additional structure without the

359
previous consent of all the persons who have agreed to take
the flats. The Promoter has to convey title and execute
documents accordingly as contemplated under section 11 of
the Flats Act. Sub-section (2) of Section 7 of the Flats Act is
also required to be taken into consideration. If the approved
plans were disclosed by the builder, the occupiers/shopkeepers
would have called upon the builder to rectify the defect or
would have called upon to pay compensation. The builder,
without the approved plans carried out the construction and
failed to rectify the unauthorised changes made by the builder
after approval. If there was disclosure of the approved plans,
action could have been taken by the shopkeepers. The builder,
without bothering about the provisions, carried out the
construction so as to make a wrongful gain. The act of the
builder is in utter disregard to the provisions of law.
25. In the instant case, it appears that in the name of the Co-
Operative Society, plans were placed before the Corporation
for approval. In the agreement it is mentioned that the
Association has called upon the builder by giving absolute
authority and power to enrol members and to construct the
building etc. and to do everything on behalf of the
Association. It is clear that partner of the builder was
managing the affairs of the Co-Operative Society at the
relevant time. Under the name of the Association, the same
person acquired right and title to enrol the members and to sell

360
the property and entered into agreement of sell the property
copies of which are produced on record. However, there is
nothing to show that any conveyance has been executed in
favour of the Association or individually with the
shopkeepers. The Flats Act mandates that when the building is
to be constructed, it will be the liability of the promoter to
construct it according to the plans and specifications approved
by the local authority where such approval is required under
any law for the time being in force.
26. There are other provisions which we are not referring to in
detail. Suffice it to say that the aforesaid provisions were
clearly breached in the instant case and the agreement was
executed. Apart from the fact that the contract cannot stand in
the eye of law in view of the judgment reported in 1986 SC
1571 which we have discussed above, it also appears that the
agreement is in contravention of the provisions of the Flats
Act and the promoter / builder has not followed the provisions
contained in the aforesaid Flats Act and even the officers of
the Corporation kept mum.
27. In the affidavit in para 23, the Association has pointed out
that the builder has made an averment that "" "the builder is
ready and willing to provide such deficit parking as well as
common amenities area from this available FSI on the same
plot of land" demonstrate the irregularities committed by him
in the construction of the building."" It is further pointed out

361
that "" "Similarly as regards the illegal construction of 9th
floor, the averments "the builder is ready and willing to refund
the cost of the premises received from the allottees" amounts
to tacit admission on part of the deponent that the said portion
of the building was constructed in violation of the plans
sanctioned by the Corporation."" It was submitted by the
Learned Counsel appearing for the Association as well as for
Nita International that the builder has carried out illegal and
unauthorised construction and has duped the innocent persons
and therefore they must be awarded adequate compensation.
28. On behalf of the Association, it was pointed out that the
original plans were produced before the Court for perusal and
the xerox copies were also placed on record. For the first time
they came to know that the tower no.1 having 8 storeys in the
plan was sanctioned for residential purpose and thus the
builder has committed fraud by stating that the property has
been constructed for commercial use. Repeatedly before the
Court, the Counsel was also asked to produce copy of the
plans which according to the builder has shown to the
members of the Association but no plans were placed on
record. On behalf of the Association, Learned Counsel
submitted that it is very unfortunate that the innocent shop
keepers and the members put their hard earnings for buying
office complex and/or shops relying on the words of the
builders. In view of the fact that the brochure was published

362
and relying on that major share was paid before the building
was completed. The occupiers were put in possession on full
payment. On behalf of the Association, it was submitted that
all the shop keepers whose shops are demolished are uprooted
and they cannot get themselves established in any central
place. It was further submitted that persons who purchased
office complexes are not in a position to use as such in view of
the fact that it is a residential zone. As per the affidavit of Shri
Hasmukh Shah, it was constructed as office/commercial
complex. It is clear that it was handed over to the occupiers as
such.
29. So far as the contestant i.e. Nita International is concerned,
in July 1989, it entered into an agreement for shop nos. 30 and
31 on the ground floor with the builder. These shops were
constructed in the area meant for common amenities. Nita
International was also allotted shop no.47 on the ground floor
and other shop no.27 in the said complex. The builder entered
into an agreement with Nita International for the terrace of
shop nos. 30 & 31 along with the right to use the staircase for
going to the terrace. It is in regard to these unauthorised
construction notices were issued by the Corporation for which
suit was filed. Notices were issued under Section 260(1) and
260(2) of the B.P.M.C. Act as also under Section 268 of the
B.P.M.C. Act. Notice under Section 268 was issued as
building use permission was not obtained. Ultimately Special

363
Civil Application No. 8781 of 2000 was filed. Centre Point
Welfare Association filed the application being Civil
Application No. 7029 of 2000 which was converted into
Special Civil Application No. 8931 of 2000.
30. Nita International in its affidavit has given the area of the
shops & the payment made for the shops and the terrace which
comes to Rs. 1195750/-. The said Nita International was
engaged in the business of hotel and parlour, and spent huge
amount for internal decoration and has claimed this amount by
way of damages. Nita International has pointed out that in the
year 1999-2000 net profit was Rs.24,40,530/for which he has
annexed a copy of the statement. The said Nita International
stated on oath that the valuation made by very eminent firm
i.e. Space Management Limited was to the tune of
Rs.1,28,32,500/-. Regarding the availability of the premises on
behalf of Nita International, it is pointed out that near
Panchvati Circle at the rate of Rs.4000/per sq.ft. area is
available and considering the stamp duty and registration etc.,
it will require to pay huge amount. Other premises near Arvish
Auto Showroom, Mithakali is available at the rate of
Rs.8000/per sq.ft on the ground floor and Rs.2000/- per sq.ft.
in the basement. Nita International has placed reliance on the
report of Ajay D Bhatt, approved Architect and Valuer dated
17.7.2000 stating that the valuation including the interior
comes to Rs.1,42,65,000/-. In Para 8, Nita International has

364
pointed out that its sister concern had taken a loan from Bank
of India where Nita International had given shop nos. 30, 31
and 27 by way of collateral security. Now it is stated that Nita
International will have to face lot of difficulties. It is further
pointed out that staff of 103 persons was engaged and there
would be loss of service to them which would adversely affect
the financial liability of Nita International. Nita International
also claimed that several proceedings were required to be
initiated not only in the Trial Court but before the High Court
and the Apex Court and it had incurred expenditure including
fees to the tune of Rs.5 lacs and requested the Court to direct
the builder to pay these amounts.
31. It was submitted on behalf of Nita International that the
builder by suppressing the material fact and by showing some
sketch stating that the plans are approved induced the
shopkeepers to buy the property. It was contended that had the
builder placed correct facts that the shops are not constructed
as per the plan, then Nita International would not have
purchased the shops. It was submitted that the Corporation has
made it clear that the plans were approved for the first time in
1992, and therefore the builder could not have shown the plan
approved by the Municipal Corporation when the deal took
place. Before the Court even the Counsel for the builder was
called upon to produce the plans approved by the Corporation
which were shown to Nita International but the Counsel did

365
not produce any plan. Mr.Vyas, Learned Counsel submitted
that from this the only inference that can be drawn is that the
builder by showing some plans which may be according to the
property constructed but not as per the approved plans made
the buyers to believe that the construction is as per the plans.
If the persons putting faith on the builder have purchased the
property and later on it is found that by suppressing the
material fact and by showing some plans which were never
approved by the Corporation if the buyers were offered the
shops, it can be said that the act was fraudulent and buyers
were duped. The plan that is shown in the Brochure does not
resemble the plan approved by the Corporation.
32. It is clear that with a view to have a wrongful gain to
himself and with a view to cause wrongful loss to the buyer,
the builder entered into the agreement. If there was honest
intention on the part of the builder he would not have put the
occupiers in possession till the plans were
sanctioned/approved by the Corporation and the building
permission was granted by the Corporation. The builder would
have requested the occupiers to wait till the plans are
approved. He should not have handed over the possession
before the building use permission was granted. After the
property was constructed without the approval of the plans by
the Corporation, the builder disposed of the property and that
reveals that the act was done with an intention of causing

366
wrongful gain to himself and wrongful loss to the buyers and
thus the act was not bonafide. The law requires that there must
be completion certificates and permission to occupy or use the
building. Section 263 of the Act reads as under:-
263. Completion certificates, permission to occupy for use.
(1). Every person shall, within one month after the completion
of the erection of a building or the execution of any such work
as is described in section 254, deliver or send or cause to be
delivered or sent to the Commissioner at his office, notice in
writing of such completion, accompanied by a certificate in
the form prescribed in the bye-laws signed and subscribed in
the manner so prescribed, and shall give to the Commissioner
all necessary facilities for the inspection of such building or of
such work and shall apply for permission to occupy the
building.
(2). No person shall occupy or permit to be occupied any such
building, or use or permit to be used the building or part
thereof affected by any work, until -
(a). permission has been received from the Commissioner in
this behalf, or,
(b). the Commissioner has failed for twenty-one days after
receipt of the notice of completion to intimate his refusal of
the said permission."
33. It is not the case of the builder that as per the plan after
completion of erection of building as contemplated in Section

367
263(1), a notice in writing accompanied by a certificate in the
form prescribed etc. was given to the Commissioner and that
the Commissioner did not take any action on the basis of this
application.
34. Sub-section (2) makes it clear that no person shall permit
the building to be occupied or used or permit to be used the
building or part thereof until permission has been received
from the Commissioner. In the instant case before the plans
were sanctioned for erection of a building, the building was
erected and that too contrary to the plans which could be
approved by the Corporation. The plans were approved in
1992 and the construction carried out was contrary to the
approved plans. It is the builder who has permitted the
shopkeepers to occupy the building or has permitted to use
that building without permission being granted by the
Corporation. Building regulations and building rules as found
in Chapter XII of Appendix IV of the B.P.M.C. Act is a
relevant provision required to be taken into consideration.
Rule 10 in Chapter XII of Appendix IV prohibits the use of
the building without written permission of the Commissioner
or otherwise in conformity in terms of such permission.
Reading several sub-clauses it is clear that the building or part
of the building can be used for the purpose for which the
permission was granted and not for any other purpose. If the
building or part of the building is required to be used then

368
permission of the Commissioner is a must. In the instant case,
the space shown in the plan meant for common amenities and
the parking has been permitted for a different use by the
builder by taking money from the shop keepers. Thus, it is in
breach of the provisions of the BPMC Act, rules and
regulations. It is required to be noted that the builders have not
produced any material on record, that they were authorised to
dispose of the building (particularly shops erected in parking
place and common amenities and 9th floor erected contrary to
the provisions of building regulations). If they were authorised
by the owner of the building they ought to have placed such
document on record. Non-production of such document
clearly indicates that without authority, the persons have been
inducted in the building which otherwise the owner (Society)
could not have permitted to occupy the building.
35. In the Town Planning Scheme, the area in the occupation
of the individual holder of land is generally reduced by way of
contribution out of that plot for maintaining the services
beneficial to the community with an object to provide
amenities for the benefit of the residents. Similarly, the
parking is to be provided for the benefit of the persons who
are occupying the building. Out of the total FSI used 5% is to
be provided by way of common amenities for the benefit of
persons occupying the flats/building. The Legislature has not
given that right to any developer to dispose of the same in the

369
manner which he likes but the law mandates that the
builder/developer should see that as per the plans approved by
the Corporation, the facilities are provided. These provisions
are made to ensure healthy surrounding to the people living in
congested localities and to provide facilities conducive to
healthy living.
36. At the cost of repetition, we would like to point out that
the builder has not produced any material on record pointing
out his right to dispose of the property i.e. shops
unauthorisedly erected. The builder was not the owner of the
plot, he was merely a developer and it was his duty to develop
the plot as per the rules and regulations in the building bye
laws and not at his whims and caprice to earn profit by making
use of the parking space and public amenities for construction
of shops. In absence of any proprietary right in the plot itself
as a developer, the developer could have exercised the right
which the owner could have exercised for construction of a
property but in the instant case, it seems that though the
builder had no right in the property, assumed the role of owner
of the plot in question and disposed of the property i.e. the
shops and 9th floor by way of sale in contravention of various
provisions of law. We do not find any agreement signed by the
society in favour of the builder while submitting an
application to the Corporation for erection of a building
permitting the builder to have exclusive right of sale. Even

370
before the Court no document is produced by the builder
entitling him to erect the building as he liked and to sell the
same.
37. In case of DUNGARLAL HARICHAND VS. STATE OF
GUJARAT & OTHERS REPORTED IN 1976 (17) GLR
1153, 3 Judges bench pointed out in paragraph 9 that:
"For proper framing of schemes and implementing them, the
individual rights are made subordinate to the wider social
interests of the society and civil amenities. The individual
interests are not allowed to outweigh and prevail over the
wider social interests so as to thwart or torpedo salutary social
schemes of town planning for the benefit of the public as a
whole. Schemes such as the one with which we are concerned
ought not to be allowed to suffer and individual interests have
to be subordinated so as to subserve public good as they are to
be expeditiously implemented in accordance with the true
legislative intention of the Act. An elaborate procedure is
prescribed under the Act and the Rules to achieve the desired
objective."
38. In view of the principle enunciated hereinabove, even the
society which happens to be the owner of the plot in question
could not have disposed of the parking area or the area meant
for common amenities as that was meant for the members
occupying the building under the scheme and therefore the

371
builder had no right whatsoever to unauthorisedly construct
and to dispose of such part.
39. In contrast to the builder's interest, the interest of the
occupiers of the building, which is recognized by law, cannot
be allowed to outweigh. The interest of the members would
prevail over the individual interest of the builder-developer,
who had no right under the statute or the rules to erect the
building in contravention of the provisions so as to thwart or
torpedo the salutary scheme of the Town Planning Scheme for
the benefit of the members of the Society as a whole. As
pointed out by the court, the provision for parking is not only
in the interest of the members/occupiers of the building, but in
the interest of general public as that would reduce the burden
on the road as road would be available for movement of traffic
and not for parking of vehicles. Division Bench of this Court
indicated in the earlier orders passed in these matters as well
as in the judgment in A.O. No. 441/98 decided on 6.9.2000
that if the buildings are not erected in accordance with the
plans approved, the construction would be unauthorised and
against the public interest.
40. It is required to be noted that at least the Association
placed on record illustrative cases and according to us that
would clearly indicate as to what could be the real price. Shop
No.8 belongs to one Sureshbhai B Rana. He has placed on
record that he purchased the property from the erstwhile

372
occupant of that shop on or about 9.3.99 and the purchase
amount was Rs.3,75,000/- & considering the size of the shop
which is 208 sq.ft. the price would come to Rs.1800/- per
sq.ft. Shop No.9 belongs to one Sureshkumar Keshavlal
Bhagat who has filed an affidavit interalia pointing out that the
shop is situated in the lower level (it is clear from Annexure to
the affidavit) and that the possession was taken on 9.3.1999
for which the purchase price paid was Rs.3,80,000/-.
Considering the area of the shop being 208 sq.ft. the value
would come to Rs.1827/- (to be precise Rs. 1826.92 ps.) One
Dineshkumar Mafatlal Parekh who was having shop no.10 has
placed on record that from the erstwhile owner he purchased a
shop on or about 25.6.1998 and the possession was taken on
27.6.1998. The purchase amount was Rs.1,50,000/-.
Considering the size of the shop which is 212 sq.ft. the amount
would come to Rs.750/-.
41. In view of the difference stated in the affidavits about the
present market value, when we put a pointed question to the
Learned Advocate it was stated that there are valuation reports
on the record. The structure of the complex is of RCC Frame
with brick masonry walls. There was flooring of good
material. Concealed wiring is provided throughout the
premises. Water and drainage facilities are provided by
Ahmedabad Municipal Corporation. Building is located in
fully developed locality and all civic amenities are easily

373
available in the nearby vicinity. Considering the location of
the premises, nature of construction and the prevailing market
rates in the nearby vicinity, valuation was required to be made.
Mr.Vyas, Learned Counsel submitted that it is on these basis
the valuer has put the value of the property after inspecting the
property.The Architect is also Bank of India panel valuer. He
visited the site to determine fair market value of the total
property in possession of Nita International, a partnership
firm. Report is in great detail and he has recorded the value of
Shop No.30, 31, their lower mezzanine and upper level
mezzanine floor. He has also indicated the value of Shop No.
47, upper kitchen and store and north and open margin
covered with temporary structure. According to Mr.Vyas,
Learned Counsel, the total valuation of the property comes to
Rs.1,42,65,000/as on 17.7.2000.If M/s. Nita International is
required to search the premises for its business in the locality
at least this much amount would be required to be invested. It
is submitted that M/s. Nita International provided granite
floorings in shops and passage and provided good quality of
furniture and fixtures. There was kota stone flooring in the
kitchen and store with glazed tile "dado", Open terrace was
provided with crazy marble flooring with good quality light
fixtures. Ceramic tile flooring was provided in north side
margin covered with esthetically good looking temporary
structure. Looking to the nature of the construction, location of

374
the premises for shop nos. 30 & 31, the valuer has arrived at
the rate of Rs.7500/- per sq.ft. So far as lower mezzanine area
is concerned which was of 300 sq.ft. the rate is arrived at
Rs.5000 per sq.ft. and the upper level mezzanine which was of
800 sq.ft. the rate arrived is of Rs.4500/- sq.ft. The valuer has
considered the price as indicated in the report. Mr.Vyas,
Learned Counsel further submitted that considering the price
fixed for lower kitchen per sq.ft. at rate of Rs.4500/- & upper
kitchen and store at the rate of Rs.1150/- per sq.ft. and the
north side open margin covered with temporary structure at
the rate of Rs.900/per sq.ft. Learned Counsel Mr. Vyas
submitted that the valuer has taken into consideration several
aspects, size of the room, location of the room, nature of
construction etc. for arriving at a conclusion. He further
submitted that M/s. Nita International has spent huge amount
for the purpose of business. He submitted that so far as
building material, door and ornamental fixtures are concerned,
it depends upon the taste of the person. One may like to have
ordinary tiles, one may like to have kota stone, one may like to
have ordinary marble and one may like to have pure white
marble with double polish for the purpose of flooring, the
price of work would vary on account of the material used for
the purpose of beautifying the building. It is submitted that
even for security one may go for door made from iron grills or
one may simply have the door prepared from press wood

375
which is cheaply available in the market. One may use formica
with better wood to fix it or one may use teak wood for the
purpose of door with polish having better design and
ornamental fixtures. One may use simple chain to close the
door or one may use ornamental fixture with better locking
system.
42. No doubt it depends on the taste of the person and for the
purpose for which the building is to be used. Therefore, there
would not be the same price for all the shops in question.
Mr.Vyas submitted that M/s. Nita International was employing
103 persons that would indicate the size of business which it
was carrying on. On the record details of persons working and
the remuneration paid is also indicated.
43. Mr. Hasmukh Shah, partner of M/s. Hasmukh Shah
Builders, Ahmedabad, filed an affidavit on 6/9/2000. In para.
3 of the affidavit it has been specifically stated by Mr. Shah
that the building complex was constructed in or about year
1988-89. The said complex consists of 3 residential towers
and one commercial complex. It was stated that shop-cum-
residential complex consists of parking place, lower level,
upper level and 9 floors. Mr. Hasmukh Shah has relied upon
the agreement entered into between one of the shop owners
with the Builder. The relevant clauses are reproduced in the
affidavit, which are as under :-

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"(1) The Builders will construct a building in accordance with
the building plans prepared by M/s. Hasmukh C. Patel,
Architects of Ahmedabad, on the said property, more
particularly described in the First Schedule hereunder written.
It is agreed between the parties that the Builders will be
entitled to make changes and variations in the said building
plans as required by the Municipal Corporation of Ahmedabad
and which the Builders may deem fit and appropriate and the
Purchaser hereby irrevocably consents to the Builders carrying
out such changes.
(2) The Purchaser has seen the said building plans and
specifications in accordance with which the said building is
proposed to be constructed.
(3) to (10) xxx xxx xxx xxx
(11) IT IS HEREBY EXPRESSLY AGREED THAT the
terrace in the said building shall always belong to the Builders
and they shall be entitled to deal with and dispose of the said
terrace in such manner as they may deem fit. In the event of
the Builders obtaining permission from the Ahmedabad
Municipal Corporation or from the Competent authority for
additional construction then the Builders shall be entitled to
make such additional construction and shall be entitled to
dispose off such additional construction constructed by them
to such persons at such rate and on such terms as the Builders
may deem fit. The builders shall be entitled in that event to

377
allot the said property to any other purchaser and then the said
property shall be in exclusive possession of the such
purchaser. The builder shall have a right to run a Restaurant or
Hotels on the terrace of the said building or let it or sell it for
use as a restaurant. The Association of the shops/flats that may
be formed by the purchasers of the property shall admit and
allow the builders and other persons to go to the terrace of the
said building in the Restaurant or Hotels.
44. Thus, it is clear that the plans drawn by M/s. Hasmukh C.
Patel, Architect were shown and not the plans approved by the
Corporation. It is nowhere stated that the plans approved by
the Corporation were shown to the occupiers. Before the plans
could be approved, the building contrary to the plans was
erected and persons were put in possession contrary to the
building regulations. Plans were approved much after the
possession was handed over.
45. Shri Hasmukh Shah has come out with the case that the
agreement was executed prior to the commencement of the
construction. After the building was constructed a possession
receipt was executed on 1/8/1990.The relevant clauses of the
possession receipt read as under:-
"(E) I/We undersigned record and confirm the following :
(i) to (xviii) xxx xxx xxx
(xix) The entire project including of office complex is not yet
complete and the building use permission is not obtained still

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the builders have handed over the possession of the premises
booked by me at my request and at my risk and
responsibilities and on my undertaking and assurance that if
any notice or proceeding shall arise by any authority including
Municipal Corporation for use and occupation, I/We shall
alone be liable and/or answerable for the same and neither the
builders, nor the association and/or its office bearers will be
liable or answerable for the same.
(xx) to (xxii) xxx xxx xxx xxx"
46. BPMC Act prohibits the occupancy of a building without
B.U. Permission. At the same, it says that no person shall
permit any one to occupy the building or shall not permit
anyone to use the building. (We have discussed this aspect in
paragraphs 32, 33 and 34 earlier). Thus, the person erecting
the building and in the instant case, the builder who entered
into separate agreements with others in the name of
development of land permitted others to occupy the building.
Mr. Upendra Shah, partner of M/s. Hasmukh C. Shah, was in
fact, the person erecting the building in the name of society.
On behalf of the Builder i.e. Mr. Upendra Shah, Mr. Hasmukh
Shah executed the documents. Thus, persons were permitted
to occupy the premises in contravention of the provisions of
law or were illegally put in possession. To cover up this, in
possession agreement, reference is made of clause (xix). If act
committed is illegal, the liability of such illegal act cannot be

379
fastened on others. The person who has committed such illegal
act cannot be exonerated.
47. Upendra Shah, partner of M/s.Hamukh Shah, has placed
on record his affidavit interalia stating that none of the parties
- either Nita International or the occupiers of the building who
are the members of the Centre Point Welfare Association are
entitled to any relief against the builder. The builder or its
partners were not parties to the original proceedings.
Therefore, by way of present proceedings no relief can be
granted. It was contended that the High Court cannot invoke
extra ordinary jurisdiction under Article 226 without evidence
being laid and on mere oral submissions the relief cannot be
granted. However, it is required to be noted that on the record
necessary documents have been produced by the parties and
therefore it is not a case where there is no documentary
evidence and that the Court is required to pass an order on
mere oral submissions.
48. It is further contended in the affidavit that each and every
occupier was aware about all the true facts and state of affairs
and had full knowledge and information regarding permission
for construction granted by Ahmedabad Municipal
Corporation, the zone in which building was constructed and
also the fact that the Building Use Permission was not granted
by the Corporation till they were put in possession.

380
49. In para 8 of the affidavit, it is stated that no action was
proposed to be taken by the Commissioner under Section 260
of the B.P.M.C. Act. Therefore, the claimants ought not to
have consented for passing order of demolition of respective
premises occupied by them.
50. It seems that the deponent Shri Upendra Shah has not
come to the Court with clean hands. Special Civil Application
NO. 8781 of 2000 has been filed by Nita International for
quashing and setting aside the notices under Section 260(1) &
260(2) of the B.P.M.C. Act. Along with Special Civil
Application No.8781 of 2000, the judgement delivered by City
Civil Court is annexed from which it is clear that the
Corporation issued notice under Section 260(1) of the
B.P.M.C. Act on 7.10.1996. It is clear from the record that the
construction was carried out and completed without the plans
being approved and without the approval of the plans, the
persons were put in possession. It was also prayed to remove
unauthorised construction. M/s. Nita International prayed for
removal of illegal construction.
51. When the facts are placed before the Court pointing out
unauthorised construction contrary to the provisions of the
B.P.M.C. Act, building regulations etc., the same should not
be continued to be in existence. Sufficient evidence was
produced on record indicating that the construction was illegal
and unauthorised. Therefore, the deponent instead of blaming

381
others should blame himself. The deponent in his affidavit has
raised contention with regard to the applicability of the
Gujarat Town Planning and Urban Development Act, 1976
and that the permission under the B.P.M.C. Act is not
required. The petitioner raised further contention which the
Court has considered in the Special Civil Application
No.10899 of 2000 filed by the builder which has been rejected
and therefore the Court need not consider the same in detail.
The deponent has referred to General Development Control
Regulations and particularly, regulation 12.9(3)(i)(xii) which
requires 5% of the total built up area for common amenities
and for a watchman quarter not exceeding 50 sq.mtrs (60
sq.yards). The deponent contended that the provisions for
compulsory providing 5% area for common amenities is ultra
vires. All these submissions have been considered by the
Court in Special Civil Application No. 10899 of 2000 filed by
the present builder. The Court has held that the requirement of
keeping 5% of FSI reserved for common amenities and for
watchman quarter to look after the building and the occupiers
cannot be said to be inconsistent with the provisions made in
the Gujarat Town Planning and Development Act. It is also
held that the scheme has become final after it received
sanction from the Government and became part & parcel of
the Act itself. Considering the various judgements of the Apex
Court and the High Court of Gujarat, the contentions have

382
been rejected and therefore it is required to be rejected in the
present petition.
52. The learned Advocate appearing for the Ahmedabad
Municipal Corporation submitted that the plans were approved
for only residential purpose. He further submitted that, (i) the
shops constructed in the cellar were in violation of the
provisions contained in the building by-laws, regulations, etc.,
(ii) shops on the ground floor bearing Nos. 28, 29, 30, 31, 44,
45, 46 and 48 were never indicated in the original plans, and
were not constructed not in accordance with the building by-
laws, regulations and the plans submitted before the
Corporation and approved by the Corporation, and, (iii)
construction of 9th floor is in violation of building regulations.
9th floor was not shown in the plan and maximum permissible
height having reached at 8th floor, 9th floor could never have
been permitted by the Corporation. The developers/builders
erected shops contrary to the provisions of law and by
concealing these facts, transferred the shops as if they were
erected in accordance with the approved plan and in
accordance with law.
53. Mr.Bhatt, Learned Counsel appearing for the builder
submitted that the claim is vague and cannot be entertained by
this Court. He further submitted that the brochure published
by the builder is only an advertisement of the proposed
project. According to him it was nothing but an invitation to

383
offer as contemplated in the Indian Contract Act. According to
him, the written contract is in the form of possession receipt
which is produced on the record and the reliance is placed on
the said receipts. Shri Upendra Shah has filed an affidavit
wherein in Para 6 he has stated that it is not true that the
members were kept in the dark regarding the plans sanctioned
by Ahmedabad Municipal Corporation. Shri Upendra Shah
has denied that the representation was made by him that the
premises are meant for commercial purpose and the averments
made by Shri Hasmukh Shah in his affidavit are true. It is
required to be noted at this juncture that Shri Hasmukh Shah
in his affidavit in Para 3 has stated that "the said complex
consists of 3 residential towers and 1 commercial complex".
Therefore, it is clear that there was representation to the
persons who purchased the property from this builder that the
tower in question is a commercial complex and it is in view of
this representation the members have purchased the property
for their office purposes which is made clear in the affidavit
on behalf of the association by Shri Ilyias Chataiwala.
54. In Para 16, the builder has come out with a case that the
regulation for making provisions of common amenities and
parking are ultra vires. Was he not aware when he submitted
the plans for erection of the building? Why he did not
challenge at the same time? This contention which he raised
separately has been negatived by the Court for which we have

384
made reference earlier. In Para 28 of the affidavit, the builder
has come out with a case that if the premises allotted is found
unauthorised and if the petitioners claim any compensation,
they must hand over the possession of the property to these
respondents, i.e. builders. Today the occupiers are not in
possession. When the affidavit was filed they were not in
possession and it seems that just for the sake of raising
grounds, the averments are made in the affidavit. It is stated
that the subject matter of the petition is only unauthorised
construction with reference to the B.P.M.C. Act and Town
Planning act and the dispute regarding title of the property
cannot be the subject matter of this petition and the possession
must revert back to these respondents, i.e. the builders. It is
required to be stated that the builder is not the owner of the
property in question. The plans were submitted by the owner
of the plot i.e. M/s. Amichand Park Co-operative Housing
Society Ltd. which is clear from the plans. Only the owner of
the property in question can transfer the property. It is not the
case of the builder that the builder was authorised by
Amichand Park Co.op. Housing Society Limited to erect the
shop in question unauthorisedly and was also authorised to
transfer on behalf of Amichand Park Co.op. Society. The
builder cannot have a better title then Amichand Park Co.op.
Society. If the society itself was not permitted to construct the
shops as per the plans, the builder certainly could not carry out

385
the construction in violation of the building regulations and
cannot dispose of the shops.So far as Nita International is
concerned, on behalf of the builder, it is stated that Nita
International is trying to convert the proceedings of a writ
petition into a civil suit by not only claiming refund of
purchase price but by making exaggerated claim of damages.
It is stated that the claim of damages having been made by the
petitioner is clearly outside the scope of writ jurisdiction. His
claim requires leading of evidence, proof of documentary
evidence and an opportunity to these respondents to cross-
examine the witnesses. It is further pointed out that the claim
is not restricted to refund of the purchase price. It is further
pointed out in the affidavit by the builder that Nita
International itself is a wrong-doer since it had put up
substantial unauthorised construction and thereafter was using
the part of the building unauthorisedly. It is also further
pointed out that even while examining the claim of refund of
the purchase price, it is necessary to take into consideration
the use made by the petitioners for all these years. On behalf
of the builder, reliance is placed on clause 25 which restricts
the use of a building for restaurant or hotel and for such other
purpose which may be harmful to the Association or other
occupiers of the shops/flats in the said building. Even with
regard to the terrace, it is indicated that the purchaser shall not
put up any structure in the open terrace. For putting up neon

386
signs or boards, prior permission of the builder was required.
It was therefore submitted that the claim of Nita International
is highly exaggerated, whether the amount was spent or not is
a subject matter of evidence. Even while examining the claim
of refund of the purchase price on behalf of the builders, it is
stated that it is necessary to take into consideration use made
by the occupier for all these years.
55. On behalf of both the sides, details were placed on record
in tabular form etc., i.e. the statement indicating the details of
purchase price, present valuation, good-will amount etc.
56. On behalf of the Builder, dispute is raised about the
present market value, good will or the present valuation of the
property of the same size in the vicinity. One thing is certain:
the acceptance of purchase amount is not disputed by the
builder.
57. It was contended by the builder that the place meant for
parking and common amenities does not provide title,
therefore, the question is to whom it should go back and
whether the possession should be restored to the builder or
that it should be restored to the society? It was contended that
except the builder, none has a right to use the space meant for
parking and for common amenities.
58. It is required to be noted that one partner of the builder,
namely, Upendra C. Shah, has signed the plans as an owner
for the Society. Thus, it is he who knew that the society is the

387
owner and not the builder/developer, and, therefore, the
possession must be restored to the owner of the building in
question, namely, the society and not the builder/developer.
The builder was merely a developer and was required to
develop the property in accordance with law and not at his
sweet will or as per his whims and caprice. No document
showing right, title or interest in the property has been placed
before this Court either by the builder firm or its partner.
Merely because he was the signatory to the document for the
disposal of the shops, he cannot claim right as an owner of the
space meant for parking and common amenities. The Building
Law requires that the owner must erect a building in
accordance with the plans approved and the developer was,
thus, duty bound to erect a building as per the plans approved
and therefore, we find no substance in the contention raised by
the builder that right and title with regard to the space meant
for parking and common amenities vested in him and it should
be restored to him.
59. Earlier, the Division Bench passed orders in the petition
filed by Nita International (Spl.C.A. No.8553/2000 on
24.8.2000) and also in AO No. 441/1998 (decided on
6.9.2000), considering the decisions rendered by this High
Court in the case ISHWARLAL vs. SURAT MUNICIPAL
CORPORATION reported in 1996 (3) GLR 1 -wherein a
Division Bench held that intimation is a must by the owner on

388
completion and one cannot occupy the premises without prior
permission of the Municipal Commissioner-, and in the case
of YOGESH D SHETH vs. AHMEDABAD MUNICIPAL
CORPORATION reported in 1996 (3) GLR 416 -wherein the
Court pointed out regarding the shops constructed in parking
place contrary to the byelaws of the Corporation and the
approved plan and in the case of EMPIRE CONSTRUCTION
& HOTEL CO. LTD. vs. AHMEDABAD MUNICIPAL
CORPORATION reported in 1995 (2) GLR 1293 -wherein the
Court considered the question of unauthorised constructions.
The Court in the above matters also considered the case
of DR. G.N. KHAJURIA vs. DELHI DEVELOPMENT
AUTHORITY reported in (1995) 5 SCC 762. The decision of
the Division Bench delivered on 24.8.2000 wherein it was
held that the construction was illegal and unauthorised was
challenged by way of preferring a Special Leave Petition
before the Apex Court, which was ultimately rejected by the
Apex Court. Thus the finding with regard to the unauthorised
construction insofar as the building is concerned, is final.
60. The Court, in Appeal from Order No. 441 of 1998 where
parking place was not provided though indicated in the plans,
after considering provisions for parking, in paragraph 27 of
the judgment, held that it is bounden duty of the owner to
provide parking. In paragraph 30 of the judgment in the
aforesaid case, the Court observed:

389
"So far as the parking arrangement is concerned, strict
compliance is absolutely necessary. In the year 1997, with the
Regional Transport Office, Ahmedabad, 9,18,589 vehicles
were registered till July 1997. Thereafter number of vehicles
must have been registered and approximately 12 lakhs
vehicles are registered with the RTO. Considering the
population of the Ahmedabad for every four persons, there is
one vehicle. Obviously that would require sufficient place for
parking also. Over and above these vehicles, there are
thousands of visitors to the city every day who are coming in
their own vehicles or by hired vehicles. Number of transport
buses, regularly operate in city by Ahmedabad Municipal
Corporation not only within the city limits but within larger
area covered under Development Act. Approximately 50,000
autorickshaws are operating providing quick transport service.
Transport buses are operated by private transporters from
various parts in the city. Over and above this, State Road
Transport Corporation operates buses from congested area of
the city which are passing through various roads of the city.
Their frequency/trips have also increased. All these aspects
were required to be taken into consideration. Looking to the
fast development and need of the people vehicles are
increasing every day in the city. In view of expansion of city,
and considering distance and time use of vehicles has
increased a lot. On account of blessings of the concerned

390
department, even some residential buildings are permitted to
be used as office complexes without prior approval, without
providing parking. Office complex is occupied by many
people and the premises are to be visited by number of people
which would lead to abnormal movement of traffic and that
really causes the problems for the residents of Ahmedabad.
Neither police is able to manage nor the Corporation is able to
manage in this regard".
61. Article 21 of the Constitution must be strictly enforced.
Local government is bound to see that the life of the persons
residing in the city is made meaningful, complete and worth
living.
62. People in search of work, move to urban agglomeration.
All amenities and living conveniences also attract people to
move from rural areas to cities. Industry is equally responsible
for concentration of population around the industries.It is the
responsibility of the local government to see that the people
who are coming to the cities are under the law compelled to
have accommodation in such a way that it may not affect
adversely the life and liberty of other citizens. It appears that
keeping this aspect in mind, the Development Act as well as
the provisions contained in the Corporation Act are required to
be strictly implemented. Right to decent environment and
smoke free and pollution free environment follows from the
quality of life which is guaranteed by Art. 21 of the

391
Constitution. The Rules are made with a view to see that
proper parking facilities are provided and roads are
sufficiently widened to see that on account of increase in
number of vehicles, people moving on their own from one
place to another place are not adversely affected.
63. On account of requisite parking being not provided, the
roads are being congested on account of bottle-necking, and
the people suffer a lot. That would affect their health and
would create several problems. On account of absence of
parking, the people park their vehicles on the roads and
footpath, as a result of which, common man finds it very
difficult for moving from one place to another place.This
causes not only inconvenience but causes health hazards and
in our view, the action not taken by the officers to avoid such
a situation would not only require to be condemned but action
should be taken by the Corporation.
64. It is required to be noted that said Hasmukh Shah has
referred notices having been issued by the Corporation u/S.
268 of the BPMC Act in respect of irregularities regarding
change of use only. It may be noted that even according to the
deponent no notice was issued for illegal construction and the
irregularity which is alleged in para. 6 of the affidavit is with
regard to change of user only and not with regard to
unauthorised construction or construction in violation of
building regulations/bye-laws. It is further contended that the

392
occupants having acquiesced in not taking steps in the year
1989-90, they have no right to make any grievance against
builder for the alleged non-compliance.
65. It is required to be noted that if there is a question of
change of user, the question may be required to be considered
in different perspective. But in the instant case as it is found
that there was unauthorised construction and it is not the case
of builder that at any point of time prior to the present
proceedings all occupants were made aware about
unauthorised construction, the question suggested by him does
not arise. In para. 8 of the affidavit it is stated by Mr.
Hasmukh Shah that the final plot no. 673/2 of the T.P. Scheme
no. 3 Ahmedabad is owned by Amichand Park Cooperative
Housing Society Ltd. Thus owner of the plots in question
where the towers have been constructed belong to Amichand
Park Cooperative Housing Society Ltd., is a known fact to the
builder. Use of F.S.I.or availability of F.S.I. is of no
consequence in this matter.
66. Mr. Hasmukh Shah has stated that the part of the area
which was shown as parking area is used as shop. The area is
very meagre. He has stated that "without prejudice to the
rights and contentions regarding such alleged use subject to
the provisions of law, it is most respectfully submitted that the
builder is ready and willing to provide such deficit area as well
as common amenities area from the available FSI on the same

393
plot of land. If such permission is granted, the shops in the
parking area as well as the shops located in the common
amenities area would thereafter be stand regularised. At this
stage, I would like to clarify that common amenities area is
included in the used FSI and if used for other purpose, if any,
would only amount to change of use and would not be subject
to demolition."
67. The words 'change of use' or 'change of user' are clear in
the meaning they are conveying. When a premises constructed
for residence as per approved plans is put to a different use
without any change in construction, namely, office, there will
be change of use simplicitor, as understood. If there is
alteration in the design, additional construction or addition or
alteration in original design, such alteration or addition would
be unauthorised and would not be permissible for any use as
no permission is obtained. It will amount to not only change of
use but also to erect a building as mentioned in section 253 of
the BPMC Act. However, at the time of erection of building or
even part of a building is not erected as per approved plans, it
amounts to unauthorised construction. If there is a desire to
convert the part of a building or the Building into a stall, shop,
warehouse, godown or office not originally constructed for the
use as such, and for such conversion, if changes are made then
it would be considered as erection of a building as provided in
sections 253 and 254 of BPMC Act. Thus, the question

394
involved is of unauthorised construction. So far as entire tower
(except 9th floor and shops in question) is concerned, as the
erection is as per plan, but builder passed on the property to
others specifically stating as office complex, the persons were
using as office premises and on realising the consequences
they put the property to residential use. No orders were passed
with regard to that part of the building by the Division Bench.
That was the change of user.
68. With regard to 9th floor, Mr. Hasmukh Shah has stated in
para. 10 that "without prejudice to the rights and contentions
which may be canvassed at the time of hearing of the petition,
I most humbly and respectfully submit that without prejudice
to the right of further appeal and subject to the final order of
the Apex Court, the Builder is ready and willing to refund the
cost of the premises received from the allottee. I further say
that as per the new regulations, which are proposed before the
State Government it may be possible that this structure can
also be regularised in view of the permission for higher
height." It is contended by him that to award compensation
without going into the details of evidence, it would be
premature decision and that too without a trial. It is further
contended in the affidavit that allottees acquired the premises
only for the purpose of investment and having usufructs fruits
of the same either by way of rent or by way of using the
premises for their own purpose can not claim any

395
compensation. In such an eventuality, it would not be fair to
burden the builder after lapse of 11 years. It is further averred
that during the interregnum period some of the allottees have
taken the advantage of price escalation.
69. Alongwith the affidavit xerox copy of the documents are
placed on record. The brochure / agreement refers to builder,
contractor and architect. In the agreement the builder M/s.
Hasmukh Shah, a Partnership firm has shown itself as "the
Builders" and sellers. There is a reference to the agreement for
sale dated 5/11/1980 and the agreement dated 15/1/1981
between the association and the Builder. Copies of the
documents are not placed on record. Therefore, it would not
be proper to place reliance on statements which are found in
the agreement. In clause 3 it is specifically mentioned that the
Builders have been given absolute authority and power to
enroll members, to construct building and to allot shops/flats
in the said building on such payment as may be agreed upon
from time to time and to do all things and acts necessary and
expedient in connection therewith for and on behalf of the
association. In clause 5 it is mentioned that the Builders have
prepared plans for construction of building consisting of
ground floor and upper storeys. In clause 6 it is mentioned that
the Builders have already prepared plans of the said building
for sanction of the Municipal Corporation of Ahmedabad. In
clause 9 it is mentioned that the Builder with the intention of

396
developing the said property has arranged to start construction
on the said property to be named "CENTRE POINT" in
accordance with the plans prepared by M/s. Hasmukh C. Patel,
Architects of Ahmedabad and the said plans and specifications
which have been sanctioned and approved by the purchasers.
In the agreement it is further provided as under :-
"(1) The Builders will construct a building in accordance with
the building plans prepared by M/s. Hasmukh C. Patel
Architects of Ahmedabad, on the said property more
particularly described in the First Schedule hereunder written.
It is agreed between the parties that the Builders will be
entitled to make changes and variations in the said building
and which the Builders may deem fit and appropriate and the
Purchaser hereby irrevocably consents to the Builders carrying
out such changes."
70. There is a reference that the purchaser was shown the
building plans and specifications. In the agreement there is
reference to the amount paid. It appears that the sum of
Rs.1,46,000/- was paid as purchase price in respect of one
shop no. 44 on the upper level floor admeasuring 200 sq. ft.
carpet area in the said building. Even in the document there is
no reference to plans approved by Corporation having been
shown to the occupiers. Changes in the plans were at the
discretion of the builder. It is nowhere stated that after changes

397
made in the plans, the same were shown to the buyers and they
agreed for the same. The Builder agreed to handover
possession in July, 1989. There is no reference that the same
will be handed over after B.U. permission is granted. The
Builder agreed to give possession of the aforesaid shop on or
before 31st day of July 1989 subject to availability of cement,
iron, water for construction and other building materials, etc.
The buyer was told by the Builder that the terrace shall always
belong to the Builder and in the event of the Builder obtaining
permission from the Corporation or from the Competent
Authority for additional construction, the Builder shall be
entitled to make such additional construction and shall be
entitled to dispose of such additional construction. The Builder
shall have right to run a restaurant or hotel on the terrace of
the said building or let or sell it for use as restaurant. The
association of the shops/flats that may be formed by the
purchasers of the property shall admit and allow the Builder or
other persons to go to the terrace of the said building. Clause
31 reads as under :-
"31. After the building is complete and ready and fit for
occupation and after the Association as aforesaid is registered
and only after all the Shops/Flats in the said building have
been sold and disposed of by the Builders and the Builders
have referred all dues payable to them under the terms of the
agreement with various purchasers of Shops/Flats in the said

398
Building, the Builders shall obtain necessary Conveyance of
the said property directly in favour of Association from the
original owners."
71. The agreement is signed by Upendra C. Shah at two places
- at the bottom of the document in the name of Upendra C.
Shah as partner and at other place for M/s. Hasmukh Shah as
partner. The document appears to have been signed by the
person in whose favour it was executed.
72. It was obligatory for the builder to get the conveyance
deed in favour of purchaser after the building is fit for
occupation and amount of consideration in full is received.
The builder has not produced any conveyance deed executed
by the owner of the plot.
73. So far as the possession receipt is concerned, it is very
interesting to note that the sub-clause (D) of clause 1 reads as
under :-
"The builders are constructing the building as per the plans
sanctioned by the Municipal Corporation and as per the
specifications suggested by the owners. The construction of
our booked flat/shopping is now complete. The office complex
in lieu of original residential building no. 1 is in progress. So
far the undersigned is concerned, possession of
flat/shop/office no. 44 is handed over to the undersigned by
the builders on 1/8/90."
Clause (xvii) reads as under :-

399
"It is agreed that the construction (of) office complex in live
(lieu) of original building No.1 is in progress and I/We shall
have no any right, title or the interest in respect of the above
extra construction and I/We shall not obstruct the builder to
carry out such further construction."
The clause (xix) of the printed receipt form reads as under :-
"The entire project including of office complex is not yet
complete and the building use permission is not obtained still
the builders have handed over the possession of the premises
booked by me at my request and at my risk and
responsibilities and on my undertaking and assurance that if
any notice or proceeding shall arise by any authority including
Municipal Corporation for use and occupation, I/We shall
alone be liable and/or answerable for the same and neither the
builders nor the association and/or its office bearers will be
liable or answerable for the same."
74. It appears that the document is signed on 1/8/1990.
Possession was handed over soon after the construction
without waiting for approval of the plans or B.U. permission.
The representation made to the effect that the builder was
constructing the building as per plans sanctioned by the
Corporation is a false statement. The representation could not
have been made by the builder on 1/8/1990 as the plans were
not sanctioned on or before that date. It is nowhere pleaded by
the builder that plans were sanctioned prior to 1/8/1990.

400
Before the Court sanctioned plans signed by Amichand Park
Co-Op. Housing Society Limited were produced for perusal
from which it is clear that the plans were sanctioned on
12.8.1992, vide Rajachitti No. 28. Despite repeatedly asked by
the Court the builder has not produced the plans shown to the
buyers. From the documents it is very clear that a false
representation was made that the builder was constructing
building as per sanctioned plans though the facts were within
his knowledge that the plans were not sanctioned.
75. It was submitted on behalf of the builder that the B.P.M.C.
Act does not confer any title to any person. It was further
submitted that the petition is filed for violation of provisions
contained in the BPMC Act and not for any breach of the
provisions contained in the Transfer of Property Act. It was
submitted that such rights cannot be decided in a petition filed
for breach of the provisions of the BPMC Act. It is required to
be noted that it is not contended by the original petitioners, i.e.
occupiers, that the rights and titles have been conferred on
them. Their say is that it is the builder who executed the
documents and put them in possession of the shops and office
complex constructed contrary to the Building Regulations.
The builder does not become the owner of the space in
question. It was further contended that some of the occupiers
have transferred the shops and the persons who are put in
possession have no right to claim amount. It is required to be

401
noted that it is the builder who has put the persons in
occupation of the property and the persons, who put others in
occupation of the property, would not lose their right and they
would stand in the shoes of the erstwhile owners and will be
entitled to claim the amount.
76. It was contended before the Court that the plans were
submitted before the Corporation somewhere in the year 1983.
The shopkeepers and others entered into agreements in or
around July-1989 or thereafter. They were put in possession in
the year 1990. The revised plans were also placed before the
Corporation much earlier. However, without the revised plans
being sanctioned, the construction was carried out and it
seems that in the year 1996, notices under section 260(1) and
(2) of the Act were issued on the basis of the plans which were
sanctioned in 1992. The building is neither constructed as per
the plans originally produced in 1983 before the Corporation
nor as per the plans approved subsequently in 1992 by the
Corporation. It is not the case of the builder that erection of
shops in question was in conformity with the plans produced
before the Corporation in the year 1983 and subsequently,
plans were submitted with the consent of the occupiers in
question. Thus, the builder/developer, who was in
management of the society at the relevant time, left the
occupiers at the mercy of the Almighty God after collecting
money from them.

402
77. The owner of the property could have transferred the rights
in the property and the builder has not produced anything on
the record authorising him to transfer the shops. Such a
document should have been placed on record by the builder
from his custody, but, has not been produced and in absence of
such document, it is difficult to accept his contention that the
builder was authorised to dispose of the shops at his sweet
will. It is required to be noted that before the Court, no
shopkeeper has produced share certificate issued by the
society to substantiate his claim that he was the member of the
society.
78. It is this builder who knew very well that the land belongs
to the Cooperative society and it is this builder who has signed
the plans in the capacity of Chairman/Secretary of the Society.
On behalf of the builder, it was submitted that it was for the
occupier to take appropriate care before buying the property. It
is required to be noted that the person who is out to dispose of
the property has to disclose the true character of the property
and if he suppresses any material, he is not entitled to say that
the buyer should have enquired. It is a builder who put in
circulation a booklet, a brochure or other literature i.e. the
plans, etc., and it is his brochure in writing which was
accepted by others. Even reading the clauses of the agreement
which we have discussed earlier, it is clear that it is nowhere
revealed that he has shown the plans which were approved by

403
the Corporation, but has stated that merely, plans were shown.
The learned counsel for the builder submitted that in view of
section 19A of the Indian Contract Act, 1872, if there is undue
influence, then, the agreement which is a contract, is voidable
at the option of the party whose consent was so obtained. It
was further submitted that in view of section 65 of the Indian
Contract Act, 1872, when an agreement is discovered to be
void, or when a contract becomes void, any person who has
received any advantage under such agreement or contract is
bound to restore it, or to make compensation for it, to the
person from whom he received it. It was submitted that in
view of this provision, it is clear that it is a matter of contract
and the party must be relegated to the Civil Court.
79. When before the Court, it is very clear that the builder has
put the occupiers in possession of the property which he was
not authorised to construct, then, after lengthy hearing, to ask
the occupiers to approach other forum would amount to waste
of time of the Court and would cause injustice to the persons
who are the sufferers. Ordinarily, the Court which decides the
issue about the construction whether it is in accordance with
law or not would be the proper Court which can decide to pay
the just compensation or at least the principal amount paid by
the person with interest or the present market value and can
award compensation at the rate which is prevailing in the
market at the time of deciding the matter. The occupiers put

404
faith in the builder and after a decade, it is found that they
were duped and the shops have been demolished by the
Corporation after the Court arrived at a conclusion that the
construction was unauthorised, it would be improper to ask the
occupiers to approach other forum when the Court itself has
sufficient material with it to arrive at a just conclusion. If the
Court is deciding the matter with regard to the damages, the
matter would be different, but, if the Division Bench of this
Court earlier recorded a finding that the construction was
illegal and before this Court it is established that the builder
has received amount from the occupiers for such construction,
then, the Court would be justified in awarding just
compensation.
80. It is required to be noted that when there is great delay in
deciding the matters and when the Court is in a position to
decide the fact that part of the building so erected was
unauthorised, then, in that case, it is not necessary to ask the
occupiers to go to the Civil Court for their just claim. It is the
obligation of the person who has received the amount to return
the same. The person who has received the amount for illegal
construction must repay with interest or he should repay the
cost prevailing today in the market for the property of similar
size which was given by the builder and that the occupier
would require to purchase.

405
81. There is nothing to show that builder/developer ever
communicated about unauthorised construction to any of the
shopkeeper. Thus, all shopkeepers were not aware about the
same and the builder/developer has not produced any evidence
indicating that he conveyed that construction is illegal. No
material is placed to show that owner of shop no.4 was aware
about illegal construction. Hence, there is no substance in the
submission.
82. What is required to be borne in mind is that the
builder/developer was neither the owner of the plot/land nor
was authorised by the society, the owner, to erect a building in
contravention of Building Regulations and to induct the
shopkeepers. The Builder/Developer in absence of any
documentary evidence in his favour executed by the society
authorising him to transfer the rights in favour of shopkeepers
has no case. The Builder/Developer erected Building contrary
to the plans approved subsequently and did not make changes
so as to resemble as the construction carried out as per plans
sanctioned. The builder-developer has accepted the plans
approved/sanctioned by the Corporation. The
Builder/Developer has not taken consent of shopkeepers in
making changes or has not subsequently informed them and
has not paid the amount back to the shopkeepers. As per the
agreement which is reproduced in affidavit by Mr. Hashmukh
Shah, the builder was entitled to change the plan as to make

406
variation in the Building Plan as required by the Corporation
and purchasers irrevocably consented to carry out such
changes. As per the plans, though he was required to make
changes had not made changes in the construction. Why?
Immediately demand would have been made for return of the
amount. This was not acceptable to the builder and hence, did
not inform the shopkeepers about approval of the plans and
did not carry out changes. The Builder/developer knew that
the construction is unauthorised and it was his duty to return
the amount. Thus, the facts are established that
builder/developer collected money from shopkeepers knowing
full well that construction was unauthorised and did not return
the amount. When these facts are established, the question to
be decided by the Court is what should be the just
compensation. If damages are claimed , claiming under
various heads, which can be decided only after a trial, this
Court may not entertain such claim. So far as just
compensation is concerned, on the basis of amount received,
with interest or present market value, it would be just and
proper to direct the builder/developer to pay just
compensation.
83. On behalf of the builder, it was submitted that so far as
Shop No. 4 is concerned, it was purchased in the year of 1995
subsequent to the notice. The person who occupied the shop
originally, knowing fully well that it is illegal, ought not to

407
have transferred the shop or ought to have disclosed about the
illegal construction.
84. The Association has filed an Affidavit and has placed on
record the fact that the occupiers came to know that the
construction was not permissible or in the space meant for
parking and common amenities shops were constructed only
during the hearing of the Special Civil Applications. Even, 9th
floor was erected without permission of the Corporation and
contrary to the provisions of law and therefore, they submitted
that it is not correct to say that it was known to even the
original occupier of Shop No. 4 that it was an unauthorised
construction.
85. It was submitted on behalf of the builder, that the law of
limitation applies to the proceedings and therefore, within a
period of 3 years, action ought to have been taken. It is
required to be noted that till Division Bench of this Court
decided the matter on 24.8.2000, it was not known to the
occupiers that the construction is unauthorised, illegal and
contrary to the provisions of law and that the construction is
carried out in the parking and the space meant for common
amenities. The builder has not placed any material on record
that these facts were within the knowledge of the occupiers,
but, on the contrary, he has come out with a case that this
space meant for common amenities and parking is contrary to
the provisions of law and suggestion of the builder is that he

408
was justified in erecting the shops. The period prescribed in
the law of limitation will begin to run only when the occupiers
came to know that the construction was unauthorised and
when the Division Bench of this Court held that the
construction was unauthorised. Therefore, there is no merit in
the submission.
86. It was submitted that when a right flows from a contract,
then, the Court is not entitled to pass any order under Article
226 of the Constitution of India. On behalf of the builder, it
was submitted that ordinarily, where a breach of contract is
complained of, the party complaining of such breach may sue
for specific performance of the contract, if the contract is
capable of being specifically performed or the party may sue
for the damages; such a suit would ordinarily be tried by the
Civil Court. A right to relief flowing from a contract has to be
claimed in a Civil Court where a suit for specific performance
of contract or for damages could be filed. Reliance was placed
on the decision of the Apex Court in the case of
the DIVISIONAL FOREST OFFICER V. BISHWANATH
TEA CO. LTD., reported in AIR 1981 SC 1368. In that case
the Company tried to enforce through a writ petition the right
to remove timber without the liability to pay royalty. It was
held that the Company was not enforcing its right under rule-
37 of the Assam Land and Revenue and Local Rates
Regulation, but was seeking to enforce a contractual right

409
under the specific terms of the contract of lease agreed to
between the Company and the Government.
87. On behalf of the builder, it was submitted that in case of
GANDHI R. LINES VS. COLLECTOR OF
BANASKANTHA, reported at 1999 (4) GCD 2627, the
Division Bench of this Court has taken a view that on broad
principles, it must be noted that application under Article 226
of the Constitution of India is not maintainable for
enforcement or breach of contractual rights against a party to
the contract irrespective of the fact that whether such a party is
private individual or the State because such dispute involves
questions of facts which can be investigated in a suit rather
than in the writ proceedings. In that case, the appellant was
required to lift sugar from the factory situated within the State
of Gujarat or from any other place or from the godown and it
was required to supply at various shops and/or godowns of
Nominee. The appellant was also required to see that the quota
of sugar allocated is not lapsed. Condition no.2 of the contract
provided for a dispute with regard to the charges to be paid
considering the distance and that the decision of the Collector
shall be final. Condition No.6 of the contract fastened the
appellant with liability if damages were suffered by the
Nominee. The appellant, if not, transporting sugar as agreed,
then, the nominee was required to purchase sugar from open
market and was required to get it transported, and the

410
appellant was liable to pay entire amount with costs.
Condition No.13 provided for forfeiture of the amount
deposited either in part or in full. The Collector has, as per the
Condition no.13 of the contract, forfeited the amount. It was
submitted before the Court that the charges only were required
to be recovered from him and it was not proper for the
Collector to forfeit the entire amount of Rs.1 lakh. The Court
in para-17 pointed out that :
"17. It is required to be noted that in every case of breach of
contract, the person aggrieved by the breach is not required to
prove the actual loss or damage suffered by him before he can
claim the amount and the Court is competent to award
reasonable compensation in a case of breach even if no actual
damage is proved to have been suffered in consequence of
breach of contract. In cases of breach of some contract, it may
be impossible for the Court to assess the compensation arising
first from the breach, while in other cases, compensation can
be calculated in accordance with the established rules. Where
the Court is unable to assess the compensation the sum named
by the parties, if it be regarded as a genuine pre-estimate may
be taken into consideration as the measure of reasonable
compensation, but not if the sum named is in the nature of a
penalty."
88. The Court pointed out that the nominee was not made a
party to the proceedings who entered into an agreement with

411
the appellant. The sum of Rs.1 lac was deposited for due
performance of the contract. It was not only towards carting
charges or the loss which might have been suffered. It was
with a view to see that there is proper distribution and that too,
of levy sugar, the amount was got deposited with a right to
forfeit in case of breach of contract. It is in this background
that the matter was left to the discretion of the Collector to
decide. It was submitted that the Court should not issue writ to
compel the person to remedy a breach of contract pure and
simple. It is required to be noted that this is not a matter of
pure and simple breach of contract. It is not the case that after
entering into an agreement, the occupiers were not put in
possession and therefore, the claim was made, but, it is the
case where unauthorised construction contrary to the
regulations was carried out about which occupiers were never
informed that erection of the building is not as per plans
approved. It is in view of the breach of the Building
Regulations and illegal constructions in violation of the
provisions made in the relevant law, innocent persons suffered
and not because of the breach of the contract and therefore,
there is no substance in the argument.
89. In the instant case, had it not been brought to the notice of
the Court by one of the petitioners that the construction is
illegal, contrary to the building by-laws and without approval
of the plans, none would have come to know about the same.

412
Under the Statute, when the Corporation has to play a very
important role in permitting the parties to erect a building and
after the party erecting a building or a builder after erecting a
building, inducts others in the property by unauthorised
construction, the situation stands on a different footing
altogether. It may be in view of the sweet will of the Officers
of the Corporation, after approval of the plans, they might not
have visited the building or even before approval of the plans,
they might not have visited the building and the plans might
have been approved.
90. However, as per Building Regulations soon after the
commencement of the work of erection of a building as per
stages indicated in the rules, the builder/developer was
required to inform the Corporation about completion of each
stage of work. As per the rules, the officers of the Corporation
were expected to visit the site of the building at every stage.
After approval or deemed approval of the stage further work
was to be carried out. After completion of erection of a
building notice under section 263 of the BPMC Act was
required to be given by the person erecting the building (in the
instant case, developer/builder). It is only after this notice,
question of building use permission will arise. It is the duty of
the builder/developer not to permit any one to occupy the
building till Building Use Permission is granted. In the instant
case, in violation of the Building Regulations, building was

413
erected, persons were put in possession and the Corporation
provided essential services. (It was the duty of officers of
Corporation looking after the work of erection of building,
etc., to see that no unauthorised erection work commences and
if commenced to stop the same under the provisions of the
B.P.M.C.. Act). The building in question came to be erected in
a centrally located area of Ellisbridge. It is not the case of the
officers of the Corporation that without their knowledge,
building came to be erected. The builder has not placed any
thing on record to show that stagewise (in the present case,
cellar, ground floor and upto 9th floor), Corporation was
informed about the completion of each stage. Had the officers
of the Corporation visited as per the stages or at the time of
approval of plans, illegalities could have been detected. When
huge construction activities were being carried out it was the
duty of the officers of the Corporation to visit the site and to
prevent the use of such unauthorised construction and ought
not to have provided essential services.
91. In the present case, the Building laws were required to be
strictly followed. Officers of the Corporation were expected to
be vigilant. Mere look at the provisions would show that the
Officers were authorised to stop the erection and could have
posted guards to see that activities are not carried out unless
and until plans are approved and construction is as per plans.
(During this session of hearing in some cases, we have noticed

414
that the Corporation posted security guards to see that no
activities of construction are carried on or buildings are not
occupied). As and when officers of the Corporation thought it
proper, they have exercised the powers. Even building
construction with some variations were sealed so as to see that
the same are not occupied. Thus, for one or the other reason,
the building in question came to be erected contrary to
regulations, and without Building Use permission has allowed
to put to use after providing essential services.
92. On behalf of the builder, it was submitted that only the
Apex Court under Article 32 of the Constitution has awarded
compensation who suffered personal injuries at the hands of
the Officers of the Government and causing of the injuries
which amounted to tortuous act. Learned Advocate for the
builder submitted that the High Court under Article 226
cannot pass any order with regard to compensation.
93. The Apex Court in case of INDRA SAWHNEY vs.
UNION OF INDIA reported in (1992) SUPP. 3 SCC 217 para
302) has pointed out that :-
" ... the requirement of efficiency is overriding mandate of the
Constitution. An inefficient administration betrays the present
as well as future of the Nation. ... "
An inefficient administration is harmful to the society. The
persons in charge of administration on account of their
inefficiency would cause considerable damage to the society,

415
national interests, and image of the Nation. Therefore, if the
person who is in charge is not acting in accordance with law
and by neglecting his lawful duties, allows others to act in
contravention of the provisions of law, he is like a deadwood.
Despite the plans submitted, the authorities of the local
government has not bothered whether building erected is in
accordance with law or not. How they provided essential
services? The construction of shops and the 9th floor of the
building were in total breach of all the laws and yet, no action
is taken by the Ahmedabad Municipal Corporation. Municipal
Commissioner and the officers of the Town Development
Department have not bothered to carry out their obligation
under the laws.
94. It is required to be noted that the Apex Court in the case
of COMMON CAUSE, A REGISTERED SOCIETY v.
UNION OF INDIA, reported at 1999 (6) SCC 667, in para-39,
40 and 41 has pointed out as under :
39. Under Article 226 of the Constitution, the High Court has
been given the power and jurisdiction to issue appropriate
writs in the nature of mandamus, certiorari, prohibition, quo
warranto and habeas corpus for the enforcement of
fundamental rights or for any other purpose. Thus, the High
Court has jurisdiction not only to grant relief for the
enforcement of fundamental rights but also for "any other
purpose" which would include the enforcement of public

416
duties by public bodies. So also, the Supreme Court under
Article 32 has the jurisdiction to issue prerogative writs for the
enforcement of fundamental rights guaranteed to a citizen
under the Constitution.
40. Essentially, under public law, it is the dispute between the
citizen or a group of citizens on the one hand and the State or
other public bodies on the other, which is resolved. This is
done to maintain the rule of law and to prevent the State or the
public bodies from acting in an arbitrary manner or in
violation of that rule. The exercise of constitutional powers by
the High Court and the Supreme Court under Articles 226 and
32 has been categorised as power of "judicial review".Every
executive or administrative action of the State or other
statutory or public bodies is open to judicial scrutiny and the
High Court or the Supreme Court can, in exercise of the power
of judicial review under the Constitution, quash the executive
action or decision which is contrary to law or is violative of
fundamental rights guaranteed by the Constitution. With the
expanding horizon of Article 14 read with other articles
dealing with fundamental rights, every executive action of the
Government or other public bodies, including instrumentalities
of the Government, or those which can be legally treated as
"Authority" within the meaning of Article 12, if arbitrary,
unreasonable or contrary to law, is now amenable to the writ
jurisdiction of this Court under Article 32 or the High Court

417
under Article 226 and can be validly scrutinised on the
touchstone of the constitutional mandates.
41. In a broad sense, therefore, it may be said that those
branches of law which deal with the rights/duties and
privileges of the public authorities and their relationship with
the individual citizens of the State pertain to "public law",
such as constitutional and administrative law, in
contradistinction to "Private law" fields which are those
branches of law which deal with the rights and liabilities of
private individuals in relation to one another."
95. It is very clear that in the instant case, it was a duty of the
public authority to see that the building is erected in
accordance with the Building Regulations and no unauthorised
construction is carried out of whatsoever nature. It is in view
of the breach committed by these authorities, the occupiers are
required to suffer. It was equally the duty of the
builder/developer to follow the provisions contained in the
various Acts and Regulations or Building By-laws and on
account of negligence or connivance of the public officers, the
builder has successfully permitted others to occupy the
unauthorised construction. It is not merely individual dispute
or it is not merely dispute between the builder and the
occupier. The Court while examining the actions of the public
Officer pertaining to the public law domain, made an order.
The innocent shopkeepers are the sufferers. The Court pointed

418
out in para-42 in the case of COMMON CAUSE, (supra) that
the distinction between private law and public law as noticed
by the Apex Court in LIC OF INDIA V. ESCORTS
LIMITED, reported in 1986 (1) SCC 264 wherein the Court
observed as under :
"The difficulty will lie in demarcating the frontier between the
public law domain and the private law filed. It is impossible to
draw the line with precision and we do not want to attempt it.
The question must be decided in each case with reference to
the particular action, the activity in which the State or
instrumentality of the State is engaged when performing the
action, the public law or private law character of the action
and a host of other relevant circumstances".
96. An individual (group of persons, firm, etc.) is required to
carry out the work of erection of a building for occupation of
others and only competent persons, duly qualified, authorised
and registered with public authorities under the law, or rules,
or regulations are permitted to erect a building under direct
supervision and control of the authority. It is found that not
only the builder, but an engineer, an architect, a clerk of works
duly qualified, authorised and registered for the purpose of
erection of a building erected a building in contravention of
the provisions of laws and Rules and Regulations. The act of
such persons coupled with the act of the authority
supervising/controlling the work is required to be considered

419
as answerable stage wise. After inspection, on finding that
work is contrary to provision, if action was taken, matter
would be different. Even while approving the plans, on visit to
the site if unauthorised construction namely 9th floor, and
shops erected were ordered to be demolished, question would
be different. The act of the officers is in clear breach. So far as
an engineer, an architect, structural engineer or clerks of
works are concerned, they were the persons working for the
developers. The builder / developer / engineer, etc., will have
to understand for their liability themselves inter se.
97. In the case of EMPIRE CONSTRUCTION & HOTEL V.
MUNICIPAL CORPORATION OF THE CITY OF
AHMEDABAD, REPORTED IN 1995 (2) GLR 1293, the
Court considered the provisions contained in sections 260 and
263 of the Act. In the said decision, it is held that a citizen
cannot invoke Article 14 of the Constitution to perpetuate a
wrong because no action is taken in respect of another citizen.
The Court pointed out in para 7 as under.
7. The above provisions from the Bye-laws and Regulations of
the respondent Corporation made it necessary for the
petitioner to provide for parking space in the plan of the
building and which admittedly was shown in the cellar of the
building as noted above. It is clear while putting up the
partition walls in the said cellar, the space intended for parking
purpose was converted by such construction into other use to

420
which the said area is now being put to by the petitioner.
Provisions of Sec. 254(1)(d)(ii) of the said Act require that
every person who shall intend to make alteration in a building
involving conversion of any passage or space in the building
into a room or rooms shall give notice to the Commissioner, in
the form prescribed in the Bye-laws, containing the
information required to be furnished under the Bye-laws.
therefore, if the conversion of any space such as parking space
is made into a room or rooms by erecting partition walls
contrary to the provisions of the Rules or Bye-laws, provisions
of Sec. 260 would be attracted and proceedings can be taken
by the Municipal Commissioner in respect of such conversion
of parking space into rooms. therefore, the Municipal
Commissioner was authorised to take proceedings against the
petitioner under Sec. 260 of the said Act and the impugned
order falls within the powers conferred on the Municipal
Commissioner under the said Act. The expression
"Commissioner may remove" appearing in Sec. 260(2) of the
said Act does not authorise the Commissioner not to take
action in cases where no sufficient cause is shown and the
contravention of provisions of the Rules or Bye-laws is
established. In other words, it would not be open for the
Commissioner to arbitrarily decide as to against whom action
should be taken and against whom it should not be taken. The
discretion, if any, under sub Sec.(2) of Sec. 260 cannot be

421
arbitrarily exercised and the Commissioner is required to
function keeping in view the purpose underlying the said
provision, namely, removal of building or work which is
found to be in contravention of the Rules or Bye-laws. From
inaction, if any, in cases similar to that of the petitioner's
building, it cannot be inferred that the Municipal
Commissioner has taken any decision not to proceed against
other similar breaches of Rules or Bye-laws."
98. In the case of LUCKNOW DEVELOPMENT
AUTHORITY vs. M.K. GUPTA reported in (1994) 1 SCC
243, the Apex Court observed in paragraph 8 (page 259) as
under:-
"' The theoretical concept that King can do no wrong has been
abandoned in England itself and the State is now held
responsible for tortuous act of its servants. The First Law
Commission constituted after coming into force of the
Constitution on liability of the State in tort, observed that the
old distinction between sovereign and non-sovereign functions
should no longer be invoked to determine liability of the State.
Friedmann observed:
"It is now increasingly necessary to abandon the lingering
fiction of a legally indivisible State, and of a feudal conception
of the Crown, and to substitute for it the principle of legal
liability where the State, either directly or through
incorporated public authorities, engages in activities of a

422
commercial, industrial or managerial character. The proper
test is not an impracticable distinction between governmental
and non-governmental function, but the nature and form of
activity in question.
xxxx xxxx xxx xxx xxxx
In any case the law has always maintained that the public
authorities who are entrusted with statutory function cannot
act negligently. As far back as 1878 the law was succinctly
explained in Geddis v. Proprietors of Bann Reservoir thus:
"I take it, without citing cases, that it is now thoroughly well
established that no action will lie for doing that which the
Legislature has authorised, if it be done without negligence,
although it does occasion damage to anyone; but an action
does lie for doing what the Legislature has authorised, if it be
done negligently."
Under our Constitution sovereignty vests in the people. Every
limb of the constitutional machinery is obliged to be people
oriented. No functionary in exercise of statutory power can
claim immunity, except to the extent protected by the statute
itself. Public authorities acting in violation of constitutional or
statutory provisions oppressively are accountable for their
behaviour before authorities created under the statute like the
commission or the courts entrusted with responsibility of
maintaining the rule of law. .. "'
In paragraph 10 (at page 262) the Apex Court observed thus:

423
"The jurisdiction and power of the courts to indemnify a
citizen for injury suffered due to abuse of power by public
authorities is founded as observed by Lord Hailsham in
Cassell & Co. Ltd. v. Broome on the principle that 'an award
of exemplary damages can serve a useful purpose in
vindicating the strength of law'. An ordinary citizen or a
common man is hardly equipped to match the might of the
State or its instrumentalities. That is provided by the rule of
law. It acts as a check on arbitrary and capricious exercise of
power. In Rookes vs. Baranard it was observed by Lord
Devlin 'the servants of the government are also the servants of
the people and the use of their power must always be
subordinate to their duty of service'. A public functionary if he
acts maliciously or oppressively and the exercise of power
results in harassment and agony then it is not an exercise of
power but its abuse. No law provides protection against it. He
who is responsible for it must suffer it."
99. In the said judgment, the Apex Court examined the
question that today the issue thus is not only of award of
compensation but who should bear the brunt? The Court
pointed out that when the Court directs payment of damages
or compensation against the State the ultimate sufferer is the
common man. It is the taxpayers money which is paid for
inaction of those who are entrusted under the Act to discharge
their duties in accordance with law. The Apex Court also

424
pointed out that in case amount is directed to pay from the
public fund, the same should be recovered from those who are
found responsible for such unpardonable behaviour by
dividing it proportionately where there are more than one
functionary.
100. In the case of PRATIBHA COOPERATIVE HOUSING
SOCIETY V. STATE OF MAHARASHTRA, reported in
(1991) 3 SCC 341, the Apex Court has pointed out as under.
"We are also of the view that the tendency of raising unlawful
construction and unauthorized encroachment is increasing in
the entire country and such activities are required to be dealt
with by firm hands. Such unlawful constructions are against
the public interest and hazardous to the safety of occupiers and
residents of multi-storey buildings."
101. In para 7 of the judgment in PRATIBHA's (supra) case,
the Apex Court observed that this case should be of pointer to
all the builders that making of unauthorized construction never
pays and is against the interest of the society at large. The
rules and regulations and byelaws are made by the
Corporations or development authorities taking in view the
larger public interest of the Society and is a bounden duty of
the citizens to obey and follow such rules which are made for
their own benefits.
102. The nature of the construction, if permitted, would affect
the public at large. Individual has a right including the

425
fundamental right within a reasonable limit, It inroads the
public rights leading to public inconvenience and therefore it
is to be curtailed to that extent. It is required to be noted that
under the provisions restrictions are imposed to ward off all
possible public inconvenience and for safety. There is gross
violation of building regulation, byelaws and in breach of
building plans, rules and building regulations, building is
erected. One must bear in mind that the violation of the
concerned setback will not make it feasible for the
Corporation to widen the abutting road in future and that will
bring an individual closer to the danger of the road. Waiver of
requirements cannot be permitted for several reasons. It would
deprive the adjacent plot, its occupants of light and air and
also make it impossible for fire engine to be used to fight a fire
in high rise buildings. The violation of FSI will result in undue
strain on civic amenities such as water, electricity, sewage
collection and disposal. It is required to be noted that the
absence of requirements regarding fire staircases and other fire
prevention and fire fighting measures would seriously
endanger the occupants resulting in the death trap causing
severe inconvenience to the public at large in case of fire.
103. With regard to illegal constructions, only the
constructions on one road, i.e. C.G. Road, must be a pointer to
the authorities to indicate that without the blessings and
unwritten consent of the officers of the local authority, the

426
constructions could not have been completed and the premises
could not have been put for use and occupation. In Appeal
from Order No.441 of 1998 with regard to unauthorised
construction, in paragraph 32, the Court observed as under:-
"In the year 1997, when Special Civil Application No.
9988/1985 was heard the aforesaid aspects were considered. It
was also pointed out to the Court hearing that application that
only on the CG road, there are 57 new constructions of
buildings, out of which only 11 buildings have provided
parking place, but the other, though in the plans indicated that
they have provided for parking, in fact, have not provided
parking. It was also noted that there are some buildings for
which Building Use Permission is not granted, and yet the
buildings are used for shops, offices and hotels. Parking place
has been converted into shops. Counsel for the Municipal
Corporation submitted in that matter that the residential zone
has been converted into commercial zone by unauthorised act
of the builders or the occupiers. Even then, till today, we find
that in most of the cases, no action has been taken by the
Corporation and in some cases they are restrained from taking
action either by an order of injunction status quo or stay or
have illegally charged fees and has allowed the use contrary to
law/Rules, which are not carried in the appeal and the
Corporation has kept mum thereafter".

427
104. Learned counsel appearing for the builder submitted that
the High Court cannot issue writ and therefore, this Court
should not pass any further orders. He further contended that
the remedies are available to the persons whose shops have
been demolished on account of the unauthorised construction
made by the builder as per the say of the Corporation which
has been accepted by the Court. In the case of COMMON
CAUSE A REGISTERED SOCIETY V. UNION OF
INDIA, (1999) 6 SCC 667,the Apex Court pointed out as
under.
"39. Under Article 226 of the Constitution, the High Court has
been given the power and jurisdiction to issue appropriate
writs in the nature of mandamus, certiorari, prohibition, quo
warranto and habeas corpus for the enforcement of
fundamental rights or for any other purpose. Thus, the High
Court has jurisdiction not only to grant relief for the
enforcement of fundamental rights but also for " any other
purpose" which would include the enforcement of public
duties by public bodies. So also, the Supreme Court under
Article 32 has the jurisdiction to issue prerogative writs for the
enforcement of fundamental rights guaranteed to a citizen
under the Constitution."
105. It is required to be noted that in the instant case, large
number of occupiers were put in possession of the shops and
offices by the builder/developer who has constructed

428
unauthorisedly in violation of the laws. The builder could
erect the building on account of the sheer negligence of the
executive or administrative authorities of the Ahmedabad
Municipal Corporation. Without the permission of the
Corporation, building could not have been erected and without
the supply of essential services, building could not have been
occupied for use and therefore, when on account of wilful
omission or negligence or consent or connivance on the part of
the officers of the Corporation, builder/developer is permitted
to carry out the construction in breach of law and if persons
are put in possession by the builder/developer without the
building use permission being granted, the injury which is
caused to the persons would attract the provisions of public
law. The Apex Court in the aforesaid case pointed out as
under.
"Public law field, since its emergence, is ever expanding in
operational dimension. Its expanse covers even contractual
matters. Public law remedies have also been extended by the
Supreme Court in realm of tort. In exercise of jurisdiction
under Article 32 of the Constitution, this Court has awarded
compensation to the petitioners who suffered personal injuries
at the hands of the officers of the Government and the causing
of injuries which amounted to tortious act was compensated
by the Court."

429
106. It is at this stage necessary to refer to the case of Mrs.
Manju Bhatiya & others v. New Delhi Municipal Council and
others [(1997) 6 SCC 370]. The Court considered the case of
construction of the building known as "White House" which
came to be constructed and possession was delivered to the
purchasers, the appellant being one of them. At a later stage, it
was found that the builder constructed the building in violation
of the building regulations. Consequently, flats of the top 4
floors were demolished. The Court pointed out "general
principles of equity" in para 5 which is as under.
"5. "General Principles of Equity" that `equity' is a word with
many meanings. In a wide sense, it means that which is fair
and just, moral and ethical; but its legal meaning is much
narrower".
"Developed system of law has ever been assisted by the
introduction of a discretionary power to do justice in particular
cases where the strict rules of law cause hardship. Rules
formulated to deal with particular situations may subsequently
work unfairly as society develops. Equity is the body of rules
which evolved to mitigate the severity of the rules of the
common law."
"Principles of justice and conscience are the basis of equity
jurisdiction, but it must not be thought that the contrast
between law and equity is one between a system of strict rules
and one of broad discretion. Equity has no monopoly of the

430
pursuit of justice. Equitable principles are rather too often
bandied about in common law courts as though the Chancellor
still had only the length of his own foot to measure when
coming to a conclusion. Lord Radcliffe, speaking of common
lawyers, said that equity lawyers were "both surprised and
discomfited by the plenitude of jurisdiction and the
imprecision of rules that are attributed to `equity' by their
more enthusiastic colleagues". Just as the common law has
escaped from its early formalism, so over the years equity has
established strict rules for the application of its principles.
Indeed, at one stage the rules became so fixed that a "rigor
aequitatis" developed; equity itself displayed the very defect
which it was designed to remedy. We will see that today some
aspects of equity are strict and technical, while others leave
considerable discretion to the court."
107. The Apex Court examined the question pertaining to the
building contract in para 6 and pointed out as under.
"Whenever a contractor is liable to a third person in this way,
the building owner may also be vicariously liable for the
builder's acts or omissions, or, perhaps more correctly, will be
a joint tort-feasor."
108. The Court quoted with the approval of section 2 dealing
with "damages" wherein the author has stated as under.
"Under the complicated provisions of many building contracts
the possible breaches of contract by the contractor are

431
numerous, and in each case, the general principles set out must
be applied in order to determine what, if any, damage is
recoverable for the breach in question. Typical breach of the
less common kind are, for example, unauthorised sub-
contracting, failure to insure as required, failure to give
notices, payment of unauthorised wages, and so on, which,
depending on the particular circumstances of the case, may or
may not cause damage. The commonest breaches causing
substantial damage, and hence giving rise to litigation, may be
broadly divided into three categories, namely, those involving
abandonment or total failure to complete, those involving
delay in completion, and those involving defective work."
"In the case of defective work it should also be remembered
that the final certificate may, in the absence of an overriding
arbitration clause, bind the employer and prevent him from
alleging defective work altogether, and many contracts where
no architect is used, particularly private-developer sales (or
sales of houses `in the course of erection') may, depending on
their terms, extinguish liability upon the later conveyance
under the caveat emptor principle."
109. The Apex Court dealt with the said principle and pointed
out as under.
"The courts, in their desire to escape from the rule of fitness
for habitation upon the purchase of a new house from a builder
if the house is completed at the time of the contract of sale,

432
have been able to justify a refusal to apply the rule of caveat
emptor by finding that at the time of sale the house was `in the
course of erection', and frequently apply the implied term as to
habitability to houses which are virtually completed at the
time of sale. Furthermore, while it might at first sight seem
logical that the warranty of fitness should extent only to the
work uncompleted at the time of sale, this difficulty has been
brushed aside, and, once a building has been held to be in the
course of erection, the warranty has been applied to the whole
building including work already done."
110. In the instant case, it is required to be noted that the law
mandates that the person must obtain certificate for use of a
building. The person who has erected the building and put
persons in possession knowing full well his obligation to
obtain certificate from the competent authority cannot be
excused at all. After considering the question pertaining to
"tortuous liability", "contract and tort", "breach of trust and
other equitable obligations" etc. in para 11 the Apex Court
pointed out as under.
"11. In this backdrop, it would be seen that in the tort liability
arising out of contract, equity steps in and tort takes over and
imposes liability upon the defendant for unquantified damages
for the breach of the duty owed by the plaintiff in a common
law action for damages and enjoins upon the defendant to
make the damages suffered by the plaintiff on account of the

433
negligence in the case of the duties or breach of the obligation
undertaken or failure to truthfully inform the warranty of title
and other allied circumstances. In this case, it is found that
four floors were unauthorisedly constructed and came to be
demolished by the New Delhi Municipal Council. It does not
appear that the owners of the flats were informed of the
defective or illegal construction and they were not given
notice of caveat emptor. Resultantly, they are put to loss of
lakhs of rupees they have invested and given as value of the
flats to the builder-respondent."
111. In the instant case, it is found that the 9th floor as well as
shops in question which came to be demolished were erected
unauthorisedly and the owners were not informed of the
defective or illegal construction. Resultantly, occupiers were
asked to suffer huge loss. The builder/developer also put
others in possession by stating that the building is made for
offices only which in fact could not have been used for the
purpose other than the residential purpose and as such huge
loss has been caused to the shopkeepers and others.
112. In view of the aforesaid decision of the Apex Court, the
builder was impleaded as of the respondents herein and
despite the builder was repeatedly called upon to produce
plans which he had shown to the occupiers, he failed to
produce the same. The builder could not have produced the
plans approved by the Corporation as plans were never

434
approved at the time when the persons were put in possession
but the plans were approved much after.
113. It is also required to be noted that the difference between
the public and private law was examined by the Apex Court in
the case of NILABATI BEHERA ALIAS LALIT BEHERA
V. STATE OF ORISSA & ORS [ (1993) 2 SCC 746] Dr.
Anand, J (as His Lordship then was) in a separate concurring
judgment laid down as under.
"34. The public law proceedings serve a different purpose than
the private law proceedings. The relief of monetary
compensation, as exemplary damages, in proceedings under
Article 32 by this Court or under Article 226 by the High
Courts, for established infringement of the indefeasible right
guaranteed under Article 21 of the Constitution is a remedy
available in public law and is based on the strict liability for
contravention of the guaranteed basic and indefeasible rights
of the citizen. The purpose of public law is not only to civilize
public power but also to assure the citizen that they live under
a legal system which aims to protect their interests and
preserve their rights. Therefore, when the court moulds the
relief by granting "compensation" in proceedings under
Article 32 or 226 of the Constitution seeking enforcement or
protection of fundamental rights, it does so under the public
law by way of penalising the wrongdoer and fixing the
liability for the public wrong on the State which has failed in

435
its public duty to protect the fundamental rights of the citizen.
The payment of compensation in such cases is not to be
understood, as it is generally understood in a civil action for
damages under the private law but in the broader sense of
providing relief by an order of making 'monetary amends'
under the public law for the wrong done due to breach of
public duty, of not protecting the fundamental rights of the
citizen. The compensation is in the nature of exemplary
damages' awarded against the wrong doer for the breach of its
public law duty and is independent of the rights available to
the aggrieved party to claim compensation under the private
law in an action based on tort, through a suit instituted in a
court of competent jurisdiction or/and persecute the offender
under the penal law."
"35. This Court and the High Courts, being the protectors of
the civil liberties of the citizen, have not only the power and
jurisdiction but also an obligation to grant relief in exercise of
its jurisdiction under Articles 32 and 226 of the Constitution to
the victim or the heir of the victim whose fundamental rights
under Article 21 of the Constitution of India are established to
have been flagrantly infringed by calling upon the State to
repair the damage done by its officers to the fundamental
rights of the citizen, notwithstanding the right of the citizen to
the remedy by way of a civil suit or criminal proceedings. The
State, of course has the right to be indemnified by and take

436
such action as may be available to it against the wrongdoer in
accordance with law through appropriate proceedings. Of
course, relief in exercise of the power under Article 32 or 226
would be granted only once it is established that there has
been an infringement of the fundamental rights of the citizen
and no other form of appropriate redressal by the court in the
facts and circumstances of the case, is possible. The decisions
of this Court in the line of cases starting with Rudul Sah v.
State of Bihar and Anr., [1983] 3 SCR 508 granted monetary
relief to the victims for deprivation of their fundamental rights
in proceedings through petitions filed under Article 32 or 226
of the Constitution of India, notwithstanding the rights
available under the civil law to the aggrieved party where the
courts found that grant of such relief was warranted. It is a
sound policy to punish the wrongdoer and it is in that spirit
that the Courts have molded the relief by granting
compensation to the victims in exercise of their writ
jurisdiction. In doing so the courts take into account not only
the interest of the applicant and the respondent but also the
interests of the public as a whole with a view to ensure that
public bodies or officials do not act unlawfully and do perform
their public duties properly particularly where the fundamental
rights of a citizen under Article 21 is concerned. Law is in the
process of development and the process necessitates
developing separate public law procedures as also public law

437
principles. It may be necessary to identify the situations to
which separate proceedings and principles apply And the
courts have to act firmly but with certain amount of
circumspection and self restraint, lest proceedings under
Article 32 or 226 are misused as a disguised substitute for civil
action in private law. Some of those situations have been
identified by this Court in the cases referred to by Brother
Verma, J."
114. The person engaged in erection of a building is required
to erect the building in accordance with law and for such
construction as pointed out in the regulations or bye-laws he
has to approach the Corporation. As per the permission or
deemed permission granted, he has to carry out construction
but in any case, he cannot carry out construction by
committing breach of building regulations. At the same time,
it is the duty of the officers of the Corporation to visit the site
and grant clearance for further erection of the building and for
further stages. It was the duty of the builder to make an
application for building use permission and after such
permission is granted, he could have given possession to the
purchasers. It was the duty of the Corporation not to supply
essential services such as water and drainage without the
building use permission granted by it. If law mandates that the
building cannot be occupied without building use permission,
it necessarily presupposes that it is the duty of the officers of

438
the Corporation not to supply essential services such as
drainage and water so as to see that the building is not used or
occupied. Section 159 and section 161 of the BPMC Act
makes it clear that without the permission of the
Commissioner, the owner or occupier is not entitled to cause
his drain empty into the municipal drains. Violation of this
provisions is an offence. Without BU Permission, the facilities
of drainage could not have been provided. Thus, as stated
earlier, the act of putting in possession of unauthorised
construction is in breach of public duty by both the public
officers and the developer/builder. In view of the aforesaid
decision, the Court moulds the relief by granting
compensation. In proceedings under Art. 226 of the
Constitution of India, it is the duty of the Court under the
public law to penalise the wrong doers and to fix the liability
for the public wrong on the State/Corporation which has failed
to discharge public duty and to protect the citizens. On
account of failure in discharge of the duties by the officers of
the Corporation, the persons were put in possession by the
builder/developer. As pointed out by the Apex Court, it is only
monetary amends and not the damages in the nature of
exemplary damages against the wrong doers for breach of
public law and is independent of their rights available to the
aggrieved party.

439
115. In the instant case, it is clear that the public officers have
either consented the act of erection of the building and
occupation of the building or that act is on account of their
connivance. Even if it is presumed that there was no consent
or connivance, there is certainly omission on their part and this
omission is willful. In a centrally located place in Ellisbridge
area, if 4 multi-storey towers have come into existence, would
it not be noticed by the officers of the Corporation in charge of
the area? They were aware about the construction because the
plans were before them. It is not their case that they were not
aware about the erection of the building.
116. With regard to the submission made by the learned
advocate appearing for the builder that the powers under Art.
226 of the Constitution of India cannot be exercised by the
High Court in a matter where the Court has arrived at a
conclusion that the construction is unauthorised and therefore
the occupiers are entitled to the just compensation, one has to
read the decision of the Apex Court in the case of ROHTAS
INDUSTRIES LTD. & ANR. V. ROHTAS INDUSTRIES
STAFF UNION AND OTHERS, [ (1976) 2 SCC 82]. The
Apex Court has pointed out as under.
"9. The expansive and extraordinary power of the High Courts
under Article 226 is as wide as the amplitude of the language
used indicates and so can affect any person __ even a private
individual __ and be available for any (other) purpose __ even

440
one for which another remedy may exist. The amendment to
Article 226 in 1963 inserting Article 226(1A) reiterates the
targets of the writ power as inclusive of any person by the
expressive reference to `the residence of such person'. But it is
one thing to affirm the jurisdiction, another to authorise its
free exercise like a bull in a china shop. This Court has spelt
out wise and clear restraints on the use of this extraordinary
remedy and High Courts will not go beyond those wholesome
inhibitions except where the monstrosity of the situation or
other exceptional circumstances cry for timely judicial
interdict or mandate. The mentor of law is justice and a potent
drug should be judiciously administered. Speaking in critical
retrospect and portentous prospect, the writ power has, by and
large, been the people's sentinel on the qui vive and to cut
back on or liquidate that power may cast a peril to human
rights. We hold that the award here is not beyond the legal
reach of Article 226, although this power must be kept in
severely judicious leash."
117. The said decision has been again considered in the case
of U.P. STATE COOPEARTIVE LAND DEVELOPMENT
BANK LTD. V. CHANDRA BHAN DUBEY AND
OTHERS [ (1999) 1 SCC 741 at page 753.
"10. Many rulings of the High Courts, pro and con, were cited
before us to show that an award under Section 10-A of the Act
is insulated from interference under Article 226 but we

441
respectfully agree with the observations of Gajendragadkar, J.
(as he then was) Engineering Mazdoor Sabha (SCR at p. 640)
which nail the argument against the existence of jurisdiction.
The learned Judge clarified at p. 640:
"Article 226 under which a writ of certiorari can be used in an
appropriate case, is, in a sense, wider than Article 136,
because the power conferred on the High Courts to issue
certain writs is not conditioned or limited by the requirement
that the said writs can be issued only against the orders of
Courts or Tribunals. Under Article 226(1), an appropriate writ
can be issued to any person or authority, including in
appropriate cases any Government, within the territories
prescribed. Therefore, even if the arbitrator appointed under
Section 10-A is not a tribunal under Article 136 in a proper
case, a writ may lie against his award under Article 226'."
"20. The term `authority' used in Article 226, in the context,
must receive a liberal meaning unlike the term in Article 12.
Article 12 is relevant only for the purpose of enforcement of
fundamental rights under Article 32. Article 226 confers
powers on the High Courts to issue writs for enforcement of
the fundamental rights as well as non-fundamental rights. The
words `any person or authority' used in Article 226 are,
therefore, not to be confined only to statutory authorities and
instrumentalities of the State. They may cover any other
person or body performing public duty. The form of the body

442
concerned is not very much relevant. What is relevant is the
nature of the duty imposed on the body. The duty must be
judged in the light of positive obligation owned by the person
or authority to the affected party. No matter by what means
the duty is imposed, if a positive obligation exists mandamus
cannot be denied."
"22. Here again we may point out that mandamus cannot be
denied on the ground that the duty to be enforced is not
imposed by the statute. Commenting on the development of
this law, Professor de Smith states: `To be enforceable by
mandamus a public duty does not necessarily have to be one
imposed by charter, common law, custom or even contract'.
We share this view. The judicial control over the fast-
expanding maze of bodies affecting the rights of the people
should not be put into watertight compartment. It should
remain flexible to meet the requirements of variable
circumstances. Mandamus is a very wide remedy which must
be easily available ` to reach injustice whereever it is found'.
Technicalities should not come in the way of granting that
relief under Article 226. We, therefore reject the contention
urged for the appellant on the maintainability of the writ
petition."
118. In the case of MISCELANEOUS MAZDOOR SABHA
& OTHERS V. STATE OF GUJARAT & OTHERS [ 1992
GLR 1065], the moot question before the Court was whether a

443
private company like respondent no. 3 or others can be
covered by the phrase of `any person" employed by sub-clause
(1) of Art. 226? In that case, there was closure of a unit and
thus, large number of persons were affected by that action. It
was not the case of the individual termination of employment.
The Court pointed out as under in the aforesaid judgment.
"This was not the case of individual termination of
employment either on the ground of misconduct or on the
ground of retrenchment as retrenchment presupposes that
when the concern is going on, some working force as contra-
distinguished from the entire working force, gets terminated
from service."
"... These would be individual disputes pertaining to one or
two or number of workmen similarly situated as compared to
their other colleagues who are still retained in service. So far
as such grievances are concerned, even though employers may
not be liable to be proceeded against under Art. 226(1) as
being `person', they may not be liable to be proceeded against
under Art. 226(1) as their actions would remain in the domain
of private rights and obligations."
119. The Court pointed out in para 12 about the statutory
obligation as under.
"...If these statutory obligations cast on the company like
respondent no. 3 are in the domain of private duty and not
public duty, then obviously the petitioner's petition would not

444
lie and the remedy will be by way of proceedings under the
Act.
"In our view, when the entire working force in a concern is
dispensed with without following the statutory provisions of
Secs. 25FFA and 25FFF, it cannot be said that such wholesale
termination would still remain in the domain of private rights
and obligations between the concerned workmen on the one
hand and the employer on the other. But such wholesale
termination contrary to these provisions would project a
picture of violation of public duty as it affects the entire
working force and their dependents. Such action would, also
be violative of Art. 21 of the Constitution and even if petition
under Art. 226 may not lie against such companies for
enforcement of Art. 21, still the question will remain whether
they can with impunity violate statutory obligations flowing
form Secs. 25FFA and 25FFF and in an arbitrary manner
dispense with the entire working force of their concerns and
still urge that what they have done is affecting private rights
and duties and statutory obligations enacted to control such
actions are not imposing public duties. In our view, such a
contention would not be available to the concerned respondent
on such fact situations. Provisions like Secs. 25FFA and
25FFF have been enacted by the Legislature with a view to
seeing that the concerns do not snap the livelihood of entire
segment of working force as it is bound to spell economic

445
disaster for vast segment of the society consisting of not only
the entire working force but their large number of dependents
who would be put to economic death. Consequently, when the
dispute does not remain between a workman or a group of
workmen on the one hand and the employer on the other but it
becomes comprehensive one encompassing the entire working
force and when it is alleged that this is done in breach of
statutory duty on the part of the employer, then in such
contingencies, once the employer is covered by the sweep of
Art. 226(1) even a private employer would be liable to be
called upon by a writ of mandamus or any other suitable writ,
order or direction in the nature of mandamus to perform its
statutory obligations of public nature flowing from such action
on its part, and to suffer the consequences of its action being
declared null and void."
120. It is required to be noted that the case of an individual
giving a contract for erecting a building for his own bungalow
would stand on different footing. But when the
builder/developer invites people by putting in circulation
brochure, advertisement etc. to buy flat/ office, shop etc. it
does not become the case of an individual person entering into
a contract with other individual. When a premises is erected in
violation of the buildings regulations and the same is put in
use without permission, large number of persons are likely to
be affected. In such a contingency, the matter is to be viewed

446
in a different manner. Breach of provisions of law/regulations
for the benefit of public at large, would fall within the ambit of
breach of public duty. When in breach of the regulations the
builder erects the building and without bringing to the notice
of the persons interested in buying the property, the nature of
defective/unauthorised construction of such property puts
them in possession, the builder/developer/engineer, structural
engineer, clerk of works/ officers of the Corporation, - all
concerned act in violation of public duty. The builder was
required to erect the building as per the regulations and his
action was required to be checked by the officers of the
Corporation. As stated earlier, Building Use Permission was
compulsory to put others in possession and only thereafter
essential services could be provided. But in the instant case,
without the plans being approved, the building was erected
and the essential services were provided by the Corporation
and this could not have been done without the consent or
connivance or omission or commission of the officers of the
Corporation. Therefore, this situation is required to be
considered from a different angle altogether.
121. What the Division Bench has stated in para 13 in the case
of MISCELLANEOUS MAZDOOR SABHA V. STATE OF
GUJARAT & OTHERS [1992 (2) GLR 1065] is required to
be considered at this stage. In para 13, it is pointed out by the
Division Bench as under.

447
"13. It is true that mandamus or writ in the nature of
mandamus cannot be issued to any person unless the
concerned person is enjoined to exercise a public duty.
However, as seen above, the aforesaid statutory provisions of
the Act do impose a public duty on the concerned employer
when he decided to close down the concern and to dispense
with the entire working force. The statute itself has provided
for certain guidelines and procedural safeguards to be
followed and once these statutorily imposed procedural
safeguards are thrown to the winds by the concerned
employer, result would be that his action will spell utter
disaster to a sizeable segment of society, viz., the entire
working force as well as members of their families depending
on them. Such type of provision, therefore, has to be treated to
be a provision imposing statutory public duty on the
concerned employer. In this connection, we may profitably
draw upon the analogy of situations wherein there are
disturbances of `law and order' on the one hand and `public
order' on the other. It is well settled by a catena of decisions of
the Supreme Court and this Court that individual assault on a
person on a public street may cause disturbance of law and
order. But if the assault mounted is of such magnitude that it
disturbs even tempo of public life in a given locality, it would
amount to disturbance of public order. Similarly, if the action
of the employer hurts an individual workman or group of

448
workmen similarly situated but does not harm their colleagues
who continue to work in the concern, the nature of statutory
obligation cast on the employer while passing the orders of
termination of services of the concerned individual workman
or group of workmen may remain in the realm of private duty
and may not be available for being corrected by a writ of
mandamus, but if the action of the employer in closing down
the concern results in uniform treatment to the entire working
force and if it is alleged to be contrary to the statutory
procedure enacted by the legislature for safeguarding the
entire working force in the concern and which would naturally
include safeguarding interest of the dependent family
members who are total outsiders to the employer-employee
relationship and who also are likely to suffer from economic
death on account of their bread winners losing livelihood, then
in such cases of comprehensive breaches of statutory
obligations, where public policy itself would remain violated
and stultified, even tempo of public life of sizeable segment of
society would stand disturbed and to that extent, therefore, the
action of the employer would amount to breach of public duty
cast on it by the relevant statutory provisions like Secs. 25FFA
and 25FFF."
122. In the instant case, para 13 of the aforesaid judgment is to
be read with greater force. From the provisions contained in
the Bombay Provincial Municipal Corporation Act and the

449
building regulations as applicable, it is very clear that the
statutory provisions of public duty are imposed on the
concerned builder/developer/owner when it is decided to erect
a building.
123. That was the case by which several persons were affected
on account of the action sought to be taken by the employer.
This is also a case where number of shopkeepers, occupiers of
the office complex and the persons who occupied 9th floor are
the sufferers including their family members as the
shopkeepers and others would not be in a position to carry on
their business at their place and that would certainly attract the
provisions.
124. In the instant case from the material placed before the
Court, the following facts emerge.
(i) Builder/developer invited public to buy flats/offices/shops
to be erected in 4 towers known as "Centre Point".
(ii) The Division Bench of this Court has pointed out that the
area where the building in question was erected was at the
relevant time in "predominantly residential zone". Even today
also, it is in predominantly residential zone and therefore, the
premises can be used only for the purpose of residence.
(iii) The Division Bench of this Court pointed out that from
the plans it is clear that the permission was sought for erection
of 8 storied building for residential use. Cellar was to be used
for parking only and the shops on the ground floor bearing

450
numbers 28, 29, 30, 31, 44, 45, 46 and 48 were not in the
original plan. In the place meant for parking and public
amenities shops were constructed unauthorisedly in breach of
the provisions contained in various provisions. The 9th floor
was constructed in the tower in question in breach of building
regulations and no permission could have been granted by the
Commissioner in view of the restricted height.
(iv). It is clear from the record that the persons with whom the
builder entered into agreements were not shown the plans. The
builder has not produced the plans before the Court alleged to
have shown to the shopkeepers. That plans being in his
possession, it was for him to produce the same before the
Court.
(v). Moneys were taken from the shopkeepers by making
representation that the builder will construct the building in
accordance with the building plans prepared by M/s. Hasmukh
C. Patel, Architects of Ahmedabad and that the builders will
be entitled to make changes and variations in the said building
which the builder may deem fit and appropriate and the
purchasers irrevocably consented to the builder to carry out
such changes. The builder/developer has not produced before
the Court the plans prepared by M/s. Hasmukh C. Patel or
even he has not placed before the Court plans approved by the
Corporation as stated by him in subclause (D) of clause 1, but

451
in the proceedings, the Corporation being respondent-party
has produced the plans and the builder, though obliged has not
carried out changes as per approved plans. It appears that at no
point of time, the changes made in the plan were brought to
the notice of the occupiers and in fact, the plans have been
approved much after the persons were put in possession. It is
an admitted fact by one of the partners of M/s. Hasmukh Shah,
that the entire project including the office complex was not
completed and the building use permission was not obtained,
yet the builder/developer delivered possession of the premises
booked by the persons concerned. Thus, it is clear that in
violation of the provisions contained in the BPMC Act, the
builder permitted the shopkeepers to occupy the premises and
it was his duty not to permit anyone to occupy the building
without the building use permission being granted. (Sec. 263
of the BPMC Act). The construction being unauthorised and
demolished by the Corporation, the builder is liable to pay just
compensation.
125. In the instant case, in view of the facts which are placed
before the Court, it is proved beyond reasonable doubt that the
builder collected money for erection of shops and the 9th floor
which were erected in contravention of the provisions of the
building regulations and were required to be demolished. The
builder could not point out that the purchasers were made
aware about unauthorised construction at the time when they

452
were handed over possession of the premises. These material
facts were suppressed. In a case like this where the trial court
or the appellate court or the revisional court is required to
examine the record and the Court is satisfied about illegal or
unauthorised construction, then to avoid duplication of trials,
the Court should make endeavour to do justice by awarding
just compensation. Just compensation would mean amount
received by the builder for erection of the building and the
interest thereon. However, with regard to damages, if any
claim is made for which further evidence may be required,
then in such case for such part of the claim if Civil Suit is filed
for damages then at the time of awarding damages in
subsequent Civil Suit relating to the same matter, the court has
to bear in mind the sum paid or recovered as compensation
awarded by the Court. The instant case is not a case of breach
of contract. The shopkeepers suffered on account of
negligence /consent/connivance on the part of the officers of
the Corporation and also on account of breach of the
obligation undertaken to erect the building in accordance with
building regulation and failure to truthfully inform the
warranty of title and other allied circumstances. It is not a case
of breach of contractual rights but they were put in possession
of a property the erection of which was found to be illegal and
that was demolished. There is no need of oral evidence for
deciding the dispute and the matter is to be considered in the

453
facts and circumstances of the case and documentary evidence
placed on record.
126. Is it not a case of fraud on statute by the persons
interested? Why the building was erected without the plans
being sanctioned or why the persons were put in possession
without the building use permission being granted? Why
essential services were provided by the officers of the
Corporation? A picture was created as if the building was
erected in accordance with law.After the plans are drawn by
the Architect, the builder represents that he will make
necessary changes, ordinary man who is not conversant with
this branch of law would accept the statement made by the
builder before him and would act accordingly. But in the
instant case, at no point of time,shopkeepers were informed
about the correct position and were put in possession. This is
not an act of one person and the persons concerned did not
bother to follow the provisions and obviously in view of such
situation, it can be said that the persons interested joined hands
and committed fraud and obtained monetary gain. When
builder made a representation about the erection of a building
as per plan and would make changes as required by
Corporation (so as to bring the erection with the conformity of
regulations) and as the essential services were provided by the
Corporation no doubt would be raised by a citizen. In the
instant case, it is further required to be noted that the

454
document namely plans which were shown to the shopkeepers
have not been produced by the builder. It may be that some
plans were shown but it is not the case of the builder also that
the plans which were approved by the Corporation were
shown. Thus, the plans were shown with an intention to make
the people to believe that what the builder is doing is as per
the plan. If plans which were shown to the shopkeepers would
have been produced, it would have been clear whether the
plans exhibited by the builder were approved by the
Corporation or not. What is the reason that those plans are not
produced before the Court?
127. Officers of the Corporation were armed with power
coupled with the duty. Power to regulate the erection of
building activities goes with the obligations and functions to
give power of regulation stretches beyond the same. Grant of
permission checks within its sweep of power in appropriate
cases to revoke or cancel permission as incidental or
supplemental power to grant. Otherwise, power to regulate
would be whittled down or even frustrated and with such wide
powers given, if officers of the Corporation are acting
arbitrarily, they must be held liable. In the instant case, they
have acted contrary to law by providing essential services
without the building use permission being granted and without
the building plans being approved. They have neither

455
inspected before granting B.U. Permission nor have taken any
action.
128. In the case of DELHI DEVELOPMENT AUTHORITY
V. SKIPPER CONSTRUCTION CO. (P) LTD. &
ANOTHER [(1996) 4 SCC 622] the Apex Court has observed
in para 37 as under.
"37. Before parting with this case, we feel impelled to make a
few observations. What happened in this case is illustrative of
what is happening in our country on a fairly wide scale in
diverse forms. Some Persons in the upper strata [which means
the rich and the influential class of the society] have made the
'property career' the sole aim of their life. The means have
become irrelevant - in a land where its greatest son born in this
century said "means are more important than th[e ends". A
sense of bravado prevails; everything can be managed; every
authority and every institution can be managed. All it takes is
to "tackle" or "manage" it in an appropriate manner. They
have developed an utter disregard for law nay, a contempt for
it; the feeling that law is meant for lesser mortals and not for
them. The courts in the country have been trying to combat
this trend, with some success as the recent events show. But
how many matters can we handle. How many more of such
matters are still there? The real question is how to swing the
polity into action, a polity which has become indolent and soft
in its vitals? Can the courts alone do it? Even so, to what

456
extent, in the prevailing state of affairs? Not that we wish to
launch upon a diatribe against anyone in particular but Judges
of this Court are also permitted, we presume, to ask in
anguish, "what have we made of our country in less than fifty
years"? Where has the respect and regard for lag gone? And
who is responsible for it?"
129. After the Urban Land (Ceiling & Regulation) Act, 1976
was brought into force, situation changed and the Hon'ble Law
Minister while repealing the Act has stated on the floor of the
Parliament as to how the Act was misused. We need not repeat
the same here. Suffice it to say that in view of the provisions
contained in the Bombay Tenancy and Agricultural Lands Act,
a person other than farmer within the area stipulated cannot
buy any land for any purpose other than the agriculture. The
property careers, not only in breach of the provisions
contained in the Urban Lands (Ceiling & Regulation) Act,
1976, but also in violation of building regulations construct
properties so as to enrich themselves. Suffice it to say that in
the decision which this High Court has delivered in Special
Civil Application No. 6794/92 decided on 4.10.2000, in case
of Consumer Protection Council vs.Ahmedabad Municipal
Corporation, the Division Bench considered the submissions
in detail and pointed out the fantastic increased use of
vehicles. The Court considered the decisions of the Apex
Court reported in AIR 1986 SC 180 (Olga Tellis) and of

457
Ahmedabad Municipal Corporation vs. Nawabkhan
Gulabkhan reported in AIR 1997 SC 152. The Court
emphasised on use of public street that there should be no
obstruction in flow of Traffic or passing/repassing by the
pedestrians. Division Bench pointed out in para 54 of the
judgment in the case of Consumer Protection Council that if
parking as required is not provided by the builder/developer,
occupier would park their vehicles on the public road.
Considering several aspects rule makers have made specific
provision of providing parking and that cannot be converted in
shops or flats. The builder/developer cannot put others in
possession by converting the parking or public amenities into
shops. The Act which is illegal was known to him.
130. Even the Commissioner pointed out that about 9200
unauthorised structures have been erected which can be
divided into major breach, minor breach and erection of
buildings on lands belonging to Corporation or the State. If
that is not dealt with strictly many more structures would
come up. Widening of the roads at public cost will be futile
exercise. The buildings are erected in violation of Building
Regulations and in some cases, there is extensive breach of
FSI but surprisingly all the buildings are provided with the
amenities such as water and drainage. Could it be done
without the active assistance of the officers of the
Corporation?

458
131. In this matter, question of public accountability is
involved. The Apex Court in the case of MAHESH
CHANDRA vs. REGL. MANAGER, U.P.F.C. reported in
(1993) 2 SCC 279 and in the case of LUCKNOW
DEVELOPMENT AUTHORITY reported in (1994) 1 SCC
243 has pointed out this aspect.
132. The Apex Court has pointed out in DR. G.N.
KHAJURIA vs. DELHI DEVELOPMENT
AUTHORITY reported in (1995) 5 SCC 762 as under:
"10. Before parting, we have an observation to make. The
same is that a feeling is gathering ground that where
unauthorised constructions are demolished on the force of the
order of the courts, the illegality is not taken care of fully
inasmuch as the officers of the statutory body who had
allowed the unauthorised construction to be made or make
illegal allotments go scot free. This should not, however, have
happened for two reasons. First, it is the illegal action/order of
the officer which lies at the root of the unlawful act of the
citizen concerned, because of which the officer is more to be
blamed than the recipient of the illegal benefit. It is thus
imperative, according to us, that while undoing the mischief
which would require the demolition of the unauthorised
construction, the delinquent officer has also to be punished in
accordance with law. This however, seldom happens.
Secondly, to take care of the injustice completely, the officer

459
who had misused his power has also to be property punished.
Otherwise, what happens is that the officer, who made the hay
when the sun shined, retains the hay, which tempts others to
do the same. This really gives fillip to the commission of
tainted acts, whereas the aim should be opposite."
133. The Court has pointed out on several occasions that there
should be accountability and liability of public servants in
administrative matters, and there should be transparency in all
what they do. The Apex Court in the case of COMMON
CAUSE vs. UNION OF INDIA reported in (1999) 6 SCC 667
has pointed out (see Head Note "O") that Executive or
administrative actions of State or its instrumentalities or
statutory or public bodies which are in violation of
fundamental rights or which are arbitrary or oppressive in
violation of Art. 14 or any statute are open to judicial review.
134. In the result, the builder and its partners are held liable to
return the amount taken from the purchasers of the shops
illegally constructed in the parking place and common
amenities, i.e. shops No. 1 to 7, 11 to 27, 28, 29, 30, 31, 44,
45, 46 and 48 and, therefore, are directed to return it along
with 15% of interest from the date of taking the amount till the
date of payment of the amount, except for shops belonging to
Nilkamal Patel (Shop No. 28) and Siddharth Mehta (Shop No.
46), about whom we were told that they shall settle the dispute
out of the Court). Occupier of the 9th floor, represented by

460
learned Advocate Mr. Puj, also conveyed that his client will
settle the matter out of the Court. As regards shops No. 8, 9
and 10 it is submitted before us that they have subsequently
purchased the shops from the original allottees in the year
1998-99 and they are entitled to the price what they have paid.
We therefore direct that they be paid the price by the builder
which they have paid to the original allottees as reflected in
paragraph 40 of the judgment, and we are not inclined to grant
any interest to them. The amount as directed shall be paid
within four weeks. The builder is held liable for exemplary
cost of this proceedings. The builder and its partners jointly
and severally are held liable to pay to each shopkeepers who
are adversely affected, the sum of Rs. 10,000/- by way of cost,
except the owner of 9th floor and two shopkeepers, viz.
Nilkamal Patel (shop No. 28) and Siddharth Mehta (shop
No.46). Exemplary cost of Rs.50,000/- shall be deposited by
the builder in the court within four weeks which shall be
remitted to the State Exchequer. The cost shall also be paid
within a period of four weeks from today. It goes without
saying that this amount of compensation is not determined as
per the prayer made but it is just compensation.
135. It was for the Corporation to see that the building is
erected in accordance with the Building Regulations. It was
for the Corporation to see that common amenities and parking
facilities are provided and that the 9th Floor was not

461
constructed. It is a matter of surprise that the day on which the
plans were approved, 9th floor was already erected, yet these
Officers of the Corporation have not taken any action in the
matter. A serious view of the matter is required to be taken
against the Ahmedabad Municipal Corporation also. It is a
matter of great surprise that before the plans are approved,
even the Corporation has provided the drainage system to the
occupiers of the building. This clearly indicates that erection
of building could not be without the unwritten permission or
blessings of the officers of the Corporation. It is very clear that
the Officers of the Corporation have aided or abetted in the act
of illegal erection of the building. Therefore, it is a fit case
wherein directions are required to be given to the Corporation
to pay only 10% (ten percent) of the amount of compensation
of the principal amount and not interest, which is required to
be paid by the builder/developer to each of the shopkeepers
affected. The amount shall be deposited with the Registry of
this Court which will be paid to the builder subsequently only
after he has complied with the order with regard to return of
the amount to the aforesaid shopkeepers. We are of the view
that but for the act of negligence or connivance, the building
could not have been erected. In the manner in which it has
come into existence, it would be for the Commissioner to
recover the amount from the erring Officers, by examining the
record from the stage of submission of plans till the date of

462
filing of the present petitions for their act/omission, etc., and
for providing drainage and water connections, etc. If the
drainage connection was connected without written
permission of the Commissioner or if the permission has been
obtained by mis-representation, the question is how it could be
continued.
136. The builder has not provided firesafety measures as
required under the BPMC Act and the Rules. By order dated
25.07.2000 passed in Special Civil Applications No.
4578/1997 with 6258 of 2000, a Division Bench of this Court
directed that in all highrise buildings in Ahmedabad, fire
safety measures are to be provided. It was also directed to
issue public notice to provide firesafety measures in high-rise
buildings within a period of four weeks from the date of
publication. The provisions with regard to firesafety is also
discussed in the order passed by this Court on 24/08/2000
passed in SCA No. 8553 of 2000 and others, wherein a
Division Bench of this Court quoted the observations made by
another Division Bench in Spl. C.A. No. 4578 of 1997.
However, the State came out with an Ordinance, known as the
Gujarat Regularisation of Unauthorised Development
Ordinance 2000 (Gujarat Ordinance No. 6 of 2000) published
on 22.11.2000.
We have perused the provisions contained in the Ordinance.
Sub-clause 4 of Section 4 of the Ordinance relates to firesafety

463
measures. Sub-clause 4 (c) is applicable in the instant case
which only provides that the designated authority may permit
installation of diesel generating set instead of electric supply
to the main fire pump within a period of three months. Section
4 (5) provides that where a person fails to comply with
directions given to him by the designated authority, the
designated authority shall install the required fire safety
equipments and recover the cost thereof from the person as an
arrear of land revenue.
People residing in highrise buildings cannot be left to the
mercy of the Babus / Bureaucrats who failed in exercising
their powers in this case which is clear from the various
decisions of the Courts. Even after the Ordinance, we have not
come across a single case wherein direction is issued by the
designated authority to provide firesafety measures. The
judgment was delivered in SCA No. 4578/97 with 6258/2000
on 25.7.2000. Even after the direction issued by this Court and
confirmed by the Apex Court (by rejecting leave to Appeal),
the citizens residing in highrise buildings are again at the
mercy of the government. The directions were given with a
view to see that people get protection, but in view of the
Ordinance, the provisions are not enforced. As indicated, the
discretion is given only whether to use the electric motor or
diesel generating set and nothing more, insofar as firesafety
measures are concerned. The Ordinance does not say that fire

464
safety measures are not to be provided in highrise buildings.
Under the circumstances, we call upon the Municipal
Commissioner to remain personally present before the Court
on 16.3.2001 and to explain as to why no actions are taken by
him though the Commissioner is the designated authority
under the ordinance.
In view the ordinance No.6 of 2000, every builder who is duty
bound, is taking shelter under the provisions of the Ordinance.
Neither the State government nor the Municipal Corporation
has provided fire safety measures. Under the umbrella of the
Ordinance, the builders who were duty bound to provide fire
safety measures are protected. We do not express any opinion
about the legality or otherwise of the Ordinance No.6 of 2000
as the said Ordinance is challenged and the issue is pending
before another Division Bench.
It is required to be noted that earlier the Government itself
made mandatory provisions in view of the National Building
Code, to provide firesafety measures in highrise buildings.
However, it seems that the same was a mere show. The
Government, on one hand is framing law, and on the other
hand do not take any effective steps for implementation of the
law. The Babus / Bureaucrats were and are required to
implement the provisions for the safety of people at large,
failed in discharging their duties. BU Permission could not
have been granted without provisions of fire safety measures.

465
High-rise buildings without firesafety measures have come up
because the officers of the Municipal Corporation failed in
discharging their duties. Hence, without expressing any
opinion about the legality or otherwise of the Ordinance,
considering the provisions of Ordinance No. 6 of 2000, it
would be most appropriate to direct the Ahmedabad Municipal
Corporation to provide fire safety measures as required under
the National Building Code as adopted by Ahmedabad
Municipal Corporation within a period of two months and the
Corporation shall thereafter recover the cost of the same from
the builder, as it was his responsibility to provide the building
with fire safety measures.
137. Special Civil Applications No. 8931 of 2000 and 8781 of
2000 are allowed accordingly. Special Civil Application No.
8930 of 2000 (converted from C.A.No. 7028 of 2000) was
filed as the Corporation has issued notice for the use of shops
No. 48 and 54 on the ground floor. So far as shop No. 54 is
concerned, the Court, in the earlier order, has not recorded any
finding. However, with regard to shop No. 48, a finding has
been recorded, and, therefore, Spl. C.A. No.8930/00 is
allowed only qua shop No. 54 is concerned, and the petition
accordingly is allowed partly. Spl. C.A. 8593/200 stand
rejected.

466
Gujarat High Court
Narendra Shankarbhai Patel vs State Of Gujarat on 30
April, 2001
Author: H Rathod
Bench: H Rathod
JUDGMENT
H.K. Rathod, J.
1. Heard Mr. R.M. Vin, learned advocate for the petitioner and
Mr. A.D. Oza, learned Public Prosecutor with Mr. S.K. Patel,
learned APP on behalf of the respondent State.
"The relief has to be granted by the Court according to sound
legal principles and ex debito justitiae. The Court has to
administer justice between the parties and cannot convert itself
into an instrument of injustice or an engine of oppression.
While exercising the powers, the Court must keep in mind the
well settled principles of justice and fair play and should
exercise the discretion only if the ends of justice require it, for
justice is not an object which can be administered in vacuum."
[Extract : Vaish Degree College Vs. Laxminarayan reported in
AIR 1976 SC page 888 ]
"Law cannot be interpreted and enforced divorced from their
effect on human beings for whom the laws are meant.
Undoubtedly, rule of law must prevail but as is often said, rule
of law must run akin to rule of life. And life of law is not logic
but experience ..' While administering law it is to be tempered

467
with equity and if the equitable situation demands after setting
right the legal formulations not to take it to the logical end,
this Court would be failing in its duty if it does not notice
equitable considerations and mould the final order in exercise
of its extraordinary jurisdiction."
[Extract : Municipal Board, Pratapgadh Vs. M.S.Chawla
reported in AIR 1982 SC page 1493 ]
"Article 226 grants an extraordinary remedy which is
essentially discretionary although founded on legal inquiry. It
is perfectly open for the Court, exercising this flexible power,
to pass such order as public interest dictates and equity
projects;
`Courts of equity may, and frequently do, go much further
both to give and withhold relief in furtherance of the public
interest than they are accustomed to go where only private
interests are involved. Accordingly, the granting or
withholding of relief may properly be dependant upon
considerations as of public interest."
[Extract : Shivshankar Dal Mill Vs. State of Hyryana reported
in AIR 1980 SC page 1037 ]
Rule. Mr. A.D. Oza, learned Public Prosecutor waives service
of Rule on behalf of the respondent State.
2. The brief facts of the present petition are as under :-
The police Inspector Shri R.L. Chavda of Navrangpura Police
Station, Ahmedabad City has filed a FIR being C.R.No.I-76 /

468
2001 of Navrangpura Police Station on 16th February, 2001 at
8.15 P.M. against the present petitioner and three other
unnamed persons for offence punishable under Section 304
read with Section 120(B)(i), 418 and 420 of IPC and under
Section 3(2)(c)(i) and Section 7(1)(i)(ii) (2) read with Section
42 of the Gujarat Ownership Act. The allegations in the FIR in
short are that the petitioners in conspiracy with three other
unnamed persons was responsible as `Builder' for defective
construction of a building viz. `SETU APARTMENTS' which
was made contrary to the rules and regulations under the
Ownership Act by using sub standard materials knowingly and
wilfully that the construction was likely to collapse resulting
in damage to life and property on the fateful day viz. 26th
January, 2001 and because of unprecedented earthquake of
very high intensity and long duration, a portion of `Setu
Apartments' got partially damaged resulting in the partial
collapse of about four flats one over the other and the falling
debris caused the death of one person named Deval who at the
relevant time was a guest in the flat owned and occupied by
one Madhukar Shankarlal, Flat No.202. That on coming to
know about the filing of the FIR, the petitioner voluntarily
surrendered himself on 9th February, 2001 to the police at
Navrangpura Police Station and after one remand, the
applicant is in judicial custody since then.

469
The present petitioner has filed application being Criminal
Misc. Application No.599 of 2001 in the City Sessions Court
at Ahmedabad for releasing him on bail and the said
application has been rejected by Court No.20 by judgment and
order dated 30th March, 2001 and hence the order passed by
the Additional Sessions Judge, Ahmedabad dated 30th March,
2001 is under challenge in the present petition by the
petitioner under Section 439 of CrPC 1973 on the ground that
the petitioner is completely innocent and he is not the builder
but in his capacity as Chairman of non trading association
namely Bijal Association got constructed through the qualified
people after plans etc. were prepared by technical civil
engineer personnel and approved by the officers of the
Ahmedabad Municipal Corporation.
The petitioner in the present petition has submitted that in fact
he had absolutely no connection with the building or even
management in question and even before the FIR was filed
against him, he himself out of humanitarian considerations
undertook urgent repairs of the pillars etc. strengthened them
by additional construction for which he has spent about
Rs.2.25 lacs for which he has got bills and accounts. It is also
submitted that out of sixteen blocks, in twelve flats occupants
have started residence after the repairs and they reside in their
respective flats even today. Moreover, present petitioner also
took upon himself a complete reconstruction of the four

470
damaged flats for which negotiation were going on between
the petitioner and the flat owners before his surrendered to
custody. According to the petitioner, even a draft contract to
that effect was prepared. According to the petitioner, he is
prepared even today to reconstruct the damaged portion of the
building at his own expense and restore the damaged flats to a
condition in which the affected flat owners can occupy and
stay in their flats with complete guarantee of safety and
security. It is also submitted that the petitioner is prepared to
carry out and abide by any conditions that may be imposed by
this Court.
3. Learned Advocate Mr. R.M. Vin appearing on behalf of the
petitioner has submitted that present petitioner Shri
NARENDRA SHANKARBHAI PATEL is prepared to file
undertaking before this Court to the effect that damaged
building `Setu Apartments' was constructed during my
Chairmanship of the Bijal Association under whose aegis,
Setu Apartment was built. The same was built under my
Supervision and guidance. That as regards the damaged
building, the petitioner undertake to reconstruct and restore all
the four flats by undertaking constructing myself at my entire
cost. However, if the flat owner or owners choose and desire
to pay tome any amount by way of contribution as may be
received from the Government aid or any agency by him or
them, it will be open to me accept the same but I will not

471
compel in any way any of them to make any such contribution
by resorting to litigation or in any other manner I further
undertake to complete the construction by the end of February,
2002 and put the respective flat owners in actual possession of
their respective flats. If I fail in any way to deliver possession
of reconstructed flats to the respective owner or owners by the
end of February, 2002, I will pay rent compensation at the rate
of Rs.5000/- per month to each of such flat owner. If however
any flat owner chooses not to have reconstructed flat, I will
pay him the price thereof paid by him. Mr. Vin, learned
advocate appearing on behalf of the petitioner has also further
submitted that the petitioner is ready to pay Rs.75,000/- to the
legal heirs of the deceased Deval Ajit Dattatreya within three
months of the date of release of the petitioner from jail.
4. Learned advocate Mr. Vin has prepared draft undertaking
and copy of the said draft undertaking has also been given to
the learned PP Shri A.D. Oza. However, Mr. A.D. Oza,
learned PP has verified the statement made by the present
petitioner in the draft undertaking and according to him, the
present petitioner has taken sufficient care of interest of the
members as well as the person who died in such incident.
5. In the present petition, this Court has issued notice on 26th
April, 2001 made it returnable on 27th April, 2001 and
thereafter the matter has been adjourned by this Court on 30-

472
4-2001, the respondent State has filed reply against the present
petition which is taken on record.
6. I have considered the averments made in the present
application and also considering the statement of Mr. R.M.
Vin, learned advocate for the petitioner in respect of the draft
undertaking so also considering the submissions made by both
the learned advocates for the respective parties without
deciding the merits of the matter and considering the request
of both the learned advocates for the parties who requested not
to pass reasoned order and therefore considering the matter
and before passing the final order, according to my opinion,
some observations made by the Apex Court as well as
Division Bench of this Court while dealing with such
application which are pertinent to quote in relevance of the
facts and circumstances of this case which are reproduced as
under :-
Recently, the Apex Court in case of GAYA PRASAD V.
PRADEEP SRIVASTAVA reported in (2001) 2 SCC page
604, para-19 observed as under :-
"The time is running out for doing something to solve the
problem which has already grown into monstrous form. If a
citizen is told that once you resort to legal procedure for
realisation of your urgent need you have to wait and wait for
23 to 30 years, what else is it if not to inevitably encourage
and force him to resort to extra-legal measures for realising

473
the required reliefs. A Republic, governed by rule of law,
cannot afford to compel its citizens to resort to such extra-
legal means which are very often contra-legal means with
counterproductive results on the maintenance of law and order
in the Country."
There is recent observation of the Apex Court in case
of MAKAHN LAL BANGAL V. MANAS
BHUNIA, reported in (2001) 2, SCC 652, para-26,
"An alert Judge actively participating in court proceedings
with a firm grip on oars enables the trial smoothly negotiating
on shorter routes avoiding prolixity and expeditiously
attaining the destination of a just decision. The interest of the
counsel for the parties in conducting the trial in such a way so
as to gain success for their respective clients is understandable
but the obligation of the Presiding Judge to hold the
proceedings so as to achieve the dual objective search for truth
and delivering justice expeditiously - cannot be subdued.
However, sensitive the subject matter of trial may be; the
courtroom is no place of play for passions, emotions and
surcharged enthusiasm."
Recent observation of the Apex Court in case
of GOVERNMENT OF A.P. V. A.P. JAISWAL reported in
(2001), 1 SCC 748, para-24 which runs as under :
"Consistency is the cornerstone of the administration of
justice. It is consistency which creates confidence in the

474
system and this consistency can never be achieved without
respect for the rule of finality. It is with a view to achieve
consistency in judicial pronouncements, the Courts have
evolved the rule of precedents, principle of stare decisis etc.
These rules and principles are based on public policy and if
these are not followed by courts then there will be chaos in the
administration of justice."
There is recent observation of the Division Bench of this
Court in case of PEOPLES UNION FOR C.L. VS. STATE
[Coram : D.M.Dharmadhikari, C.J.] reported in 2001 (1)
G.L.R., page 547 observed that;
"A Judge on assuming office during his tenure sits cut-off
from the society as he cannot continue to be in public life, but
as he also comes from the society with his own experience of
it, he is better stationed at a distance from the problems of the
society to view them in a more objective, detached and
dispassionate manner, than those involved in it, and for that
reason, he is more suited to resolve conflicts and competing
claims of the individual and the society. [ para 22 ]".
The Apex Court in a decision rendered in case of JOGINDAR
KUMAR VS. STATE OF UP reported in AIR 1994 S.C. page
1349, certain observations are quoted as under :-
`No arrest can be made because it is lawful for the Police
Officer to do so. The existence of the power to arrest is one
thing. The justification for the exercise of it is quite another.

475
The police Officer must be able to justify the arrest apart from
his power to do so. Arrest and detention in police lock-up of a
a person can cause incalculable harm to the reputation and
self-esteem of a person. No arrest can be made in a routine
manner on a mere allegation of commission of an offence
made against a person. It would be prudent for a Police Office
in the interest of protection of the constitutional rights of a
citizen and perhaps in his own interest that no arrest should be
made without a reasonable satisfaction reached after some
investigation as to the genuineness and bona fides of a
complaint and a reasonable belief both as to the person's
complicity and even so as to the need to effect arrest. Denying
a person of his liberty is a serious matter. The
recommendations of the Police Commission merely reflect the
constitutional concomitants of the fundamental right to
personal liberty and freedom. A person is not liable to arrest
merely on the suspicion of complicity in an offence. There
must be some reasonable justification in the opinion of the
Officer effecting the arrest that such arrest is necessary and
justified. Except in heinous offences, an arrest must be
avoided if a police officer issues notice to person to attend the
Station House and not to leave station without permission
would do. The, there is the right to have some one informed.
That right of the arrested person, upon request, to have
someone informed and to consult privately with a lawyer was

476
recognised by Section 56(1) of the Police and Criminal
Evidence Act, 1984, in England. These rights are inherent in
Arts. 21 and 22(1) of the Constitution and require to be
recognised and scrupulously protected. For effective
enforcement of these fundamental rights, the Supreme Court
issued the following requirements :
(1) An arrested person being held in custody is entitled, if he
so request to have one friend relative or other person who is
known to him or likely to take an interest in his welfare told as
far as is practicable that he has been arrested and where is
being detained.
(2) The police officer shall inform the arrested person when he
is brought to the police station of this right.
(3) An entry shall be required to be made in the Diary as to
who was informed of the arrest. These protections from power
must be held to flow from Arts. 21 and 22(1) and enforced
strictly.
It shall be the duty of the Magistrate, before whom the
arrested person is produced, to satisfy himself that these
requirements have been complied with. The above
requirements shall be followed in all cases of arrest till legal
provisions are made in this behalf. These requirements shall
be in addition to the rights of the arrested persons found in the
various Police Manuals."

477
23. In India, Third Report of the National Police Commission
at Pg-32 also suggested :
"... An arrest during the investigation of a cognizable case may
be considered justified in one or other of the following
circumstances :-
(i) The case involves a grave offence like murder, dacoity,
robbery , rape etc. , and it is necessary to arrest the accused
and bring his movements under restraint to infuse confidence
among the terror stricken victims.
(ii) The accused is likely to abscond and evade the process of
law.
(iii) The accused is given to violent behavior and is likely to
commit further offences unless his movements are brought
under restraint.
(iv) The accused is a habitual offender and unless kept in
custody he is likely to commit similar offences again.
It would be desirable to insist through departmental
instructions that a police officer making an arrest should also
record in the case diary the reasons for making the arrest,
thereby clarifying his conformity to the specified guidelines .."
The Apex Court in case of GURCHARAN SINGH V. STATE
[ DELHI ADMN. ] reported in AIR 1978 page 179 has in
para-22 observed as under :-
"In other non-bailable cases the court will exercise its judicial
discretion in favour of granting bail subject to sub sec (3) of

478
Section 437, Cr.P.C. , if it deems necessary to act under it.
Unless exceptional circumstances are brought to the notice of
the Court which may defeat proper investigation and a fair
trial, the court will not decline to grant bail to a person who is
not accused of an offence punishable with death or
imprisonment for life. It is also clear that when an accused is
brought before the Court of a Magistrate with the allegation
against him of an offence punishable with death or
imprisonment for life, he has ordinarily no option in the matter
but to refuse bail subject, however, to the first proviso to
Section 437 (1) Cr.P.C. and in a case where the Magistrate
entertains a reasonable belief on the materials that the accused
has not been guilty of such an offence. This will, however, be
an extraordinary occasion since there will be some materials at
the stage of initial arrest, for the accusation or for strong
suspicion of commission by the person of such an offence."
The Apex Court in case of STATE VS. CAPTAIN JAGJIT
SINGH reported in AIR 1962 SC 253 (Supra) has made
observed as under :-
`It (the High Court) should then have taken into account the
various considerations, such as, nature and seriousness of the
offence, the character of the evidence, circumstances which
are peculiar to the accused, a reasonable possibility of the
presence of the accused not being secured at the trial,
reasonable apprehension of the witnesses being tampered

479
with, the larger interests of the public or the State, and similar
other considerations, which arise when a court is asked for bail
in a non bailable offence. It is true that under Section 498 of
the Code of Criminal Procedure, the powers of the High Court
in the matter of granting bail are very wide; even so where the
offence is non bailable, various considerations such as those
indicated above have to be taken into account before bail is
granted in a non bailable offence", we are of the opinion that
the above observations equally apply to a case under Section
439 of the new Code and the legal position is not different
under the new Code."
7. After considering the above observations as well as the
averments made in the application and considering the draft
undertaking which has been suggested by the learned advocate
Mr.Vin, it is a duty of the Court to see and protect the interest
of the person who have become victim in such grave incident
and simultaneously also to consider the fate of the persons
who are behind the bar because of this incident.
8. After considering the aforesaid statement made by the
learned advocate Mr. R.M. Vin appearing for the petitioner to
the effect that the petitioner will file necessary undertaking
which has been suggested as above and considering the
submissions of both the learned advocates and further
considering the fact that as per the statement made at the Bar
by learned advocate Mr.Vin, that necessary undertaking will

480
be filed by the petitioner before this Court within 10 days from
the date of release and considering the peculiar facts and
circumstances emerging of this case so also taking into
consideration observations made by the Hon'ble Apex Court
and the Division Bench of this Court, following order is
passed.
The parties do not press for reasoned order. Considering the
submissions made on behalf of the parties, and having regard
to the circumstances and facts of the case, the application is
allowed and he is ordered to be released on bail in connection
with Crime Register No. I- 76 / 2001 registered at
Navrangpura Police Station for the offence charged against
him in this application on executing bond of Rs.25,000/- each
(Rupees Twenty Five Thousand only) with one surety of the
like amount to the satisfaction of the lower Court and subject
to the conditions that he shall,
a) not take undue advantage of his liberty or abuse his liberty;
b) not to try to tamper or pressurize the prosecution witnesses
or complainant in any manner;
c) maintain law and order and should co-operate the
investigating officers;
d) not act in a manner injurious to the interest of the
prosecution;
e) mark their presence before Navrangpura Police Station on
every Sunday between 9.00 a.m. to 2.00 p.m. till filing of the

481
chargesheet and after filing of the chargesheet against the
present petitioner, shall mark his presence before the aforesaid
police station once in a month preferably on 1st Sunday of
each month till the trial is over.
f) furnish the address of his residence to the I.O. and also to
the Court at the time of execution of the bond and shall not
change the residence without prior permission of this Court;
g) surrender his Passport, if any, to the lower court within a
week;
3. If breach of any of the above conditions is committed, the
City Sessions Judge, Ahmedabad will be free to issue warrant
or take appropriate action in the matter.
4. Bail before the lower Court having jurisdiction to try the
case. It would be opened to the trial court concerned to give
time to furnish the solvency certificate if prayed for.
9. In view of statement made by the learned Advocate Mr.
R.M. Vin on behalf of the petitioner, necessary undertaking
which is annexed to this order, is directed to be filed before
this Court within 10 days from the date of the release of the
petitioner without fail.
10. It is further directed to the petitioners to supply xerox copy
of the affirmed undertaking to the office of the Public
Prosecutor, concerned trial court and to the concerned
investigating officer.

482
11. It is also made it clear that the amount of Rs.75,000/- in
respect of victim who died in the incident, shall not come in
the way for claiming compensation in accordance with law.
12. It is further directed to the petitioners that in pursuance of
the statement made before this court, necessary undertaking as
referred to in this order is required to be filed before this Court
by the petitioner within 10 days from the date of release and
the such undertaking is required to be strictly complied with
by the petitioner without fail, otherwise in the event of non
compliance of any such term of the said undertakings, the
respondent State as well as the concerned members of `Setu
Apartments' - a building in question in the present order, are
entitled to file necessary application before this Court for
cancellation of order granting bail in favour of the petitioner.
13. It is open for the parties including the concerned members
of the said `Setu Apartments' and legal heirs of the victim in
case of any difficulty in respect of any such terms as
incorporated in the undertaking will be at liberty to apply
before this Court by way of necessary application.
14. This order is passed by this Court considering the peculiar
facts and circumstances of the case as well as considering the
undertaking of the petitioner and undertaking to make the
payment to the victim, therefore this order may not be treated
as precedent for other similar cases.

483
15. However, it is made it clear that undertaking that may be
filed by the petitioner before this Court pursuant to the order
passed by this Court, will not come in the way in any manner
while facing and / or defending the proceedings arising from
C.R. No. I - 76 / 2001 of Navrangpura Police Station. It is also
made it clear that the present undertaking which will be filed
by the present petitioner only in connection with relief of grant
of bail in favour of the petitioner and therefore such
undertaking will not amounts to an admission of the petitioner
in respect of criminal liability which will be obviously
required to be faced by the petitioner in respect of the offence
registered against him pursuant to C.R. No. I - 76 / 2001 -
Navrangpura Police Station.
16. Before parting with the present order, according to my
opinion, the humanitarian stand and approach taken by the
petitioner is in real sense satisfying the genuine rehabilitation
of the members affected on account of earthquake and have
become victim of this unprecedented earthquake.
Rule is made absolute accordingly. Direct service is permitted
today.

484
Supreme Court of India
Gayatri De vs Mousumi Cooperative Housing ... on 16
April, 2004
Author: . A Lakshmanan
Bench: S R Babu, . A Lakshmanan, G Mathur.
CASE NO.:
Appeal (civil) 3523 of 1998
PETITIONER:
Gayatri De
RESPONDENT:
Mousumi Cooperative Housing Society Ltd. & Ors.
DATE OF JUDGMENT: 16/04/2004
BENCH: S. Rajendra Babu , Dr. AR. Lakshmanan & G.P.
Mathur.
JUDGMENT:
Dr. AR. Lakshmanan, J.
This appeal involves several interesting questions as will
appear from the facts set out hereunder:
The appellant herein filed a writ petition before the High
Court of Calcutta praying, inter alia, for cancellation of the
letter dated 1.11.1988, issued by the Special Officer of the
Society, for declaration that the possession of the Flat being
No. A- 2 on 5th Floor should be given to the legal heirs of late
Sati Prasanna Bhowmick, the deceased member, upon receipt
of all dues in respect of the said apartment by the said Society

485
and for an interim order of injunction restraining the society
and the Special Officer from alienating transfer of the said
apartment No.2 to anybody other than the legal heirs of the
deceased member and for other reliefs.
The father of the appellant/writ petitioner Sati Prasanna
Bhowmick has died intestate in August, 1985 leaving being
him the following legal heirs :
a) Smt. Gayatri De - Married daughter b) Smt. Atri Das - -do-
c) Smt.Maitry Roy - -do-
d) Smt. Anita Sarkar - -do-
d) Sri Subrata Bhowmick - son
e) Smt.Mita Das - Married daughter
The said legal heirs, namely, the four daughters and the son
have separately, by letters, given their consent thereby
authorising the appellant to take possession of the flat being
No.A-2 from the respondent-Society. The appellant has been
authorised by all the legal heirs of late Sati Prasanna
Bhowmick to take possession of the flat stands in the name of
their deceased father.
The appellant's father, owner of rent free land at 15 B
Ballygunge, Calcutta-700 019, entered into an agreement on
18.10.1977 for sale of the land in question on which the said
Society desired to make the apartment. On 27.10.1980, an
indenture was entered into between the father of the appellant
and the Housing Society. The total price was Rs.13,90,069.28

486
against which the earnest money amounting to Rs.7,30,000/-
was paid towards part payment of the price. Clauses 10 and 12
of the agreement of 1977 runs as follows: "Page B"
It is worth mentioning, in this connection, that Priti was the
name of the pre-deceased wife of the said Sati Prasanna
Bhowmick and the late mother of the appellant herein. By
letter dated 29.11.1982, the Society intimated the father of the
appellant that they had favourably considered the application
and accepted the membership under the terms and conditions
contained in the said letter. The father of the appellant had
been informed by the said letter that the Society had allotted
him a three bed rooms flat on facing flat No. A-2 having
covered area of 1268 sq.ft. approximately (including common
area) on 5th floor in the project of the society. The estimated
cost of the flat was mentioned at Rs.2,53,600/- @ Rs.200/- per
sq.ft. inclusive of proportionate land value.
Clause 13 of the said letter runs as follows:
"Page D"
On 13.10.1980, the Society issued two share certificates
bearing Nos. 51 and 52 in favour of Sati Prasanna Bhowmick,
since deceased and a flat being No.A-2 on the 5th floor at the
said multi storied building had been allotted to him under their
letter dated 29.11.1982. The Secretary of the society made
demands of payments for the flat in question and the other
flats allotted to other members. Series of correspondences

487
went on and the father of the appellant took time to clear all
the dues. Some trouble arose which hampered the progress of
the said society and other litigations were cropped up. One
Mr.Arun Prakash Sarkar, an advocate of the High Court at
Calcutta, had been appointed as a Special Officer. The Special
Officer intimated this under his signature that the High Court
had authorised him to take immediate steps to have the
construction work continued and also to give liberty to him to
consider the question of allotment of applications etc, The
father of the appellant, since deceased, who was an aged ailing
octogenarian became ill and could not take any further steps
regarding his own flat namely, A-2/5 which had been allotted
to him as already mentioned hereinabove. It is worth
mentioning, in this connection, that since after the early part of
1983, there was neither any demand for money nor of any
communication regarding his liability in respect of the said flat
from the end of the said Society during the life time of Sati
Prasanna Bhowmick.
By letter dated 6.12.1986, Dr. Subrata Bhowmick, son of Sati
Prasanna Bhowmick, since deceased, the erstwhile allotee in
respect of flat No. A-2/5 wrote a letter to the Special Officer
of the Society intimating him about the demise of his father
and mentioning therein that they had since found that their
father did not leave any nominee for the flat mentioned above.
It was also mentioned therein that they were taking such

488
action under the West Bengal Cooperative Societies Act, 1983
(hereinafter referred to as "the Act") and the laws to get their
father's interest transferred to one out of all brothers and
sisters and as some of them were outside Calcutta and even
outside India and it was likely to take time. No reply was sent
by the Society to the letter dated 18.12.1986. The Special
Officer, for the first time, on 1.11.1988 wrote a letter to Dr.
Subrata Bhowmick that in accordance with the Act, the Rules
made thereunder and the bye-laws of the Society, a claim for
transfer of interest is required to be made within a stipulated
time and as no claim for transfer of the interest of their late
father has been made in time, the flat in question has already
been re-allotted and the Society will make payment of the
amounts made after deduction in accordance with law.
The appellant filed a writ petition in the High Court of
Calcutta for a mandamus commanding respondents 2 and 3 to
withdraw, cancel and not to give effect to the purported letter
dated 1.4.1988 issued by the Special Officer of the Society
and to forbear from acting on the basis thereof and pursuant
thereto. Other consequential reliefs/prayers were also made.
The writ petition was resisted by the Special Officer of the
Society submitting therein that the said writ petition was not
maintainable in law and sustainable on facts and should be
rejected in limine. The appellant filed an affidavit in reply
denying and disputing the correctness of the statements,

489
contentions and submissions made in the affidavit-in-
opposition. It was specifically stated that the Special Officer
having been appointed by the High Court and the decision and
action of the Special Officer could not be assailed in any Court
subordinate to the High Court and as such the High Court was
moved against the wrongful and illegal action of the Special
Officer. In spite of availing the remedy of reference of the
dispute to the Registrar under the Act, which according to the
appellant, was no bar to the maintainability of the writ
application, it was asserted that the appellant was ready and
willing to pay the balanced amount in respect of the said flat
and also prepared to comply with all the formalities in respect
of the said flat. The writ application was heard and disposed of
on 2.7.1992 by a learned single Judge. The ordering portion of
the said judgment is reproduced hereinbelow:
"page N & O"
Against the aforesaid judgment and order, the Society
preferred an appeal before the Division Bench. The Division
Bench allowed the appeal filed by the Society and dismissed
the writ petition filed by the appellant. It reads thus:
"(a) Since the entire amount has not been paid, no right, title
and interest had passed in favour of the father of the appellant
Sati Prasanna Bhowmick ; (b) The provisions of the Act and
the Rules made thereunder leave no manner of doubt that the
appellant does not have any right to allotment of a flat nor the

490
heirs of the deceased could claim title in relation to the flat in
question in violation of the provisions of Chapter IX of the
said Act ; (c) The heirs nominated after the expiry of the
stipulated period could not derive any right contrary to or
inconsistent with the provisions of the Act. The writ petition
was not maintainable for non-impleading the necessary party
and no writ will lie against the respondent-Society.
Being aggrieved by and dissatisfied with the judgment of the
Division Bench, the appellant filed this appeal by way of
special leave petition.
We heard Shri V.R. Reddy & Shri Tapas Ray, learned senior
counsel, appearing for the appellant and Shri S.B. Sanyal,
learned senior counsel assisted by Shri Somnath Mukherjee,
learned counsel, appearing for the respondents.
Shri V.R. Reddy took us through the pleadings, affidavits filed
before the High Court as well as before this Court and the
annexures. He made the following submissions:
He submitted that in the event of death of a member, the legal
heirs of such deceased member are entitled to inherit and give
allotment of the apartment which the deceased member was
entitled to. In the instant case, the deceased member died
leaving no more nominating any person to inherit the
apartment. According to Shri V.R. Reddy, in the event of the
deceased member dies leaving no more nominating any person
to inherit the apartment, the interest of the deceased member

491
could be inherited by all the legal heirs or by one of the legal
heirs in the event other legal heirs give their rights in favour of
such single legal heir. He submitted that the Cooperative
Society is not competent to re-allot a valid allotment in favour
of the deceased member even when all financial obligations
are complied with, ignoring the rights of legal heirs of such
deceased member. He invited our attention to Sections 79, 80,
82, 85, 87 and the corresponding Rules.
Shri V.R. Reddy further submitted that the writ petition was
maintainable since the order impugned was passed by the
Special Officer, appointed under the provisions of the Act and
as such he is a statutory officer and, therefore, he should be
regarded as a public authority and, therefore, the writ petition
filed by the appellant is maintainable in law.
Shri V.R. Reddy also submitted that the right and interest of
the legal heirs of the deceased member could not be denied in
the event of time taken in nominating, particular legal heirs for
the same could not be done within three months from the date
of the death of the member because of certain unavoidable
circumstances as the legal heirs were not available
immediately in giving their consent and giving up their rights
in favour of the single legal heir in whose favour the property
desired by all the legal heirs to be transferred. More so, when
the Cooperative Society was intimated well in advance
seeking extension of time in providing particular name in

492
whose favour the property the legal heirs desired to be
transferred. Shri V.R. Reddy contended that the valid
membership in favour of deceased member could not be
cancelled only because the name of the nominee in whose
favour of the property was to be transferred had taken some
time for selecting such nominee by all the legal heirs.
Countering the arguments, Shri S.B. Sanyal, learned senior
counsel appearing for the respondents, submitted as under: (a)
the judgment and order impugned in this appeal is
unexceptionable;
(b) the father of the appellant paid only Rs.one lakh against
the title cost of the flat of Rs.2.60 lakhs despite several
reminders during his life time and as such, acquired no right,
title or interest in his allotted flat No. A-2/5 under Section 87
of the Act and under Rule 153 of the Rules framed thereunder;
(c) The present appellant cannot claim any such title or
interest over the same by way of inheritance. The modality for
such devolution by inheritances are stipulated under Section
80(1)(a),(b) & (c) of the Act. The appellant having failed to
comply with such
formalities of the claim, automatic entitlement to the right,
title and interest in the flat was no longer available to the
appellant.
As per the directions of this Court dated 13.4.1998, the
nomination register along with the zerox copy thereof was

493
submitted. The said register is a statutory register under
Section 79 of the Act and Rule 127 of the Rules and is
conclusive evidence that late Sati Prasanna Bhowmick did not
appoint any nominee in respect of his flat.
The writ petition filed by the appellant is not maintainable as
the respondent-Society is not a State or even the
instrumentality of the State within the meaning of Article 12
of the Constitution of India. According to Shri S.B. Sanyal,
the Society is an autonomous body, duly governed by an
elected Board under the provisions of the Act and the bye-
laws of the Society and the Society is not recipient of any
State assistance in the form of shares, subsidy loans, working
capital etc. and there there is no State control or State nominee
or Government Officers on deputation to the service of the
Society. Therefore, he would submit that since the Society is
governed by the Act, Rules and bye-laws devoid of any
elements of public law warranting remedy in the form of
mandamus, the writ petition is not maintainable. The appellant
forfeited her right to the shares and interest of late Sati
Prasanna Bhowmick because of her negligence to prefer the
claim with probate, letter of administration or succession
certificate before the Board within the period of 90 days as
stipulated in Section 90(1)(b) and (c) of the Act. The appellant
has also discharged her onus for preferring he claim within the
stipulated period. It was submitted that sub-Section (3) of

494
Section 85 of the Act being a special statute would govern the
relationship of the parties and thus the question of his heirs
and successors being automatically entitled thereto does not
arise and the membership which was heritable could be
claimed in the manner laid down under the Act and Rules
framed thereunder. The appellant being allottee of Flat No.4-
A/2 in the same building is not entitled to a second flat being
No.5-A/2 under Section 85(3) of the Act and Rule 135 (2) of
the Rules. The third party allottee was not made a party to the
writ petition.
Concluding his arguments, Shri S.B. Sanyal submitted that the
appellant is a stranger so far as Flat No.5-A/2 is concerned.
She is neither the nominee of late Sati Prasanna Bhowmick
nor the one claiming right, title and interest of late Sati
Prasanna Bhowmick under Section 80 (1)(b) and (c) of the Act
within 90 days of his demise to the satisfaction of the Board
and thus forfeited her right to succession to the subject flat
under Section 72 and Section 87(2) of the Act and Rule 153 of
the Rules. Shri S.B. Sanyal further submitted that even though
the appellant is not entitled to any right, shares and interest of
late Sati Prasanna Bhowmick, the respondent-Society is ready
and willing to refund the amount to the appellant.
We have given our thoughtful consideration to the arguments
advanced by the learned senior counsel appearing on either

495
side with reference to the pleadings, records, annexures and
the case laws.
Before we proceed to deal with the issues in question, it is
beneficial to consider the relevant provisions of the Act and
the Rules made thereunder.
Sections 2(28), 2(32), 79, ..(pages 6-11)
We shall now deal with the question whether the right of
ownership of a flat in multi-storied building under the Act is
ineritable and transferable. The other question as to whether in
the event of the deceased member dies leaving no more
nominee any person to inherit the apartment interest of the
deceased member for such apartment should be inherited by
all the legal heirs or by one of the legal heirs in the event other
legal heirs give their rights in favour of such single legal heir
may also arise.
Section 87 of the Act deals member's right of ownership and
sub- Section(3) of the said Section makes it abundantly clear
that a plot of land or a house or an apartment in a multi-storied
building shall constitute a heritable and transferable
immovable property within the meaning of any law for the
time being in force provided that notwithstanding anything
contained in any other law for the time being in force such
heritable and transferable immovable property shall not be
partitioned or sub-divided for any purpose whatsoever. In
terms of the Act and the Rules, the heirs of a deceased person

496
are, therefore, entitled to inherit the flat allotted to the
deceased as in the instant case. Admittedly, the flat in question
was allotted to the father of the appellant who died thereafter
and as a consequence thereof, the heirs of the said deceased
became and would be entitled to the estate and as a result
thereof to the said flat with proportionate interest in the land.
Section 80 of the Act deals with disposal of the deceased
member's share or interest and clause (b) of sub-Section(1)
speaks that if there is no nominee or if the existence or
residence of the nominee cannot be ascertained by the Board
or if, for any other cause the transfer cannot be made without
unreasonable delay to the person who appears to the Board to
be entitled in accordance with the Rules, possession of such
shares or interest as part of the estate of the deceased
members; or sub-Section (c) on the application of the person
referred to in clause (b) within three months from the date of
death of member to such person as may be specified in the
application which clearly indicates that while disposing of
deceased member's share or interest the preferential claim
always goes to the heirs and legal representatives of the
deceased member in absence of any nominee. Section 82(b) of
the Act is very specific that notwithstanding anything
contained elsewhere in this Act or any other law for the time
being in force when the membership of a member by a
cooperative society referred to in clause (a) terminates by

497
reason of death or any other cause his possession of, or
interest in, in land held by him under Cooperative Society
shall vest in his heirs or in the person, if any, nominated by
him under Section 79, if such heir is willing to be admitted as
a member of the Society.
Section 80(c) of the Act makes it clear that on the death of the
member of the Society, his share or interest in the Society
shall be transferred on the application of the person referred to
in clause (b) within three months from the date of the death of
the member of such person as may be specified in the
application. Therefore, transfer of shares or interest can be
made only by a Society and not by the legal heirs because if it
is read by a Cooperative Society after the word "transfer" then
the meaning and application becomes clear which means it is
an obligation of the Society to transfer the share or interest of
the deceased member within the stipulated period referred to
in Section 80 of the Act.
While disposing of the appeal, the learned Judges of the
Division Bench of the High Court gave much stress on sub-
Section (3) if Section 85 of the Act as also Rule 135 of the
Rules taking the present case to be a case for admission of
membership which is not in the instant case. In the present
case, the question of admission of membership becomes
absolutely immaterial, the real question, however, is of
transfer of devolution of interest of a deceased member. The

498
appellant being one of the heirs of the deceased member was
and still is entitled to succeed to the estate of the deceased
member as per the mandatory provisions of the statutes and
that being so the right, title and interest of the deceased
member in the apartment of the Society devolves upon his
heirs and in that background , Section 85(3) and Rule 135(5)
neither have nor can have any application in the instant case
because there cannot be any manner of doubt that on the death
of a member of a Society his share or interest in the Society
shall, in the absence of a nominee, be transferred to a person
who appear to the Board to be entitled to in accordance with
Rules, possession of such interest as part of the estate of the
deceased member and herein in the instant case the son who
himself is admittedly not a member of the Society in question
or any other Housing Society became entitled to be considered
for such allotment immediately he gave notice to the
appropriate authority which too long before the alleged re-
allotment was said to have been made, In our opinion, the
order passed by the Special Officer re-allot the flat to a
stranger even after he had received letter regarding transfer of
ownership in favour of legal heirs in December, 1986, long
before such alleged re-allotment, claimed to have been made
in April, 1988, that is, more than 16 months from the receipt
thereof when giving any opportunity of being heard and
without deciding the question as to who was entitled to the

499
said flat in accordance with law. The said action of the Special
Officer who is a statutory functionary was not only improper
but also illegal, arbitrary and motivated.
In fact, the respondent-Society has informed that the allotment
in favour of the deceased allottee stood cancelled because of
no appropriate person could be named as legal heir of the
allottee in whose in whose favour respondent-Society was to
make the allotment and as such the Society has been
threatening of re-alloting the earmarked flat for the deceased
allottee to a stranger ignoring the rights of the legal heirs.
It is now brought to our notice that the flat has not been
allotted to a third party and remains vacant. The allotment
letter of membership of the flat to the father of the appellant
(Annexure P-4) dated 29.11.1982 clearly stipulates that the
right and the interest in the Society of the member will be
governed by the provisions of the Act, the Rules made
thereunder and the bye-laws of the Society and that the
members will also be liable to be discharged his obligations as
the member of the Society in accordance with the
abovementioned Act, Rules and the bye- laws.
It was then argued by Shri S.B. Sanyal that the appellant being
allottee of Flat No. 4-A/2 in the same building is not entitled
to a second flat being No. 5-A/2 under Section 85(3) of the
Act and Rule 135 of the Rules. This argument cannot be
countered with reference to the letter dated 6.12.1986, the

500
letter written by Dr. Subrata Bhowmick to the Special Officer
of the Society. The said letter reads thus: Page 57
The letter is self explanatory.
Dr. Subrata Bhowmick, son of late Sati Prasanna Bhowmick
brought to the notice of the Society about the death of his
father in August, 1985 and also by intimating the Society that
since their did not leave any nominee, they are taking such
action under the Act and laws to get their father's interest
transferred to one of us-brothers or sisters. This letter has not
been noticed by the Division Division Bench. Therefore, the
argument of Shri S.B. Sanyal has no force at all. Now, we
come to the maintainability of the writ petition. We have
already elaborately extracted the arguments advanced by both
the senior counsel on the question of maintainability of the
writ petition and hence, we are not repeating the same again.
In the instant case, the Division Bench authorised Mr. Arun P.
Sircase, an advocate, to act as Special Officer and to take
immediate steps to have the construction work continued and
while taking steps to try and negotiate with M/s Mukhje and
Associates to have the work done through them. In discharge
of his statutory function, the Special Officer of the Society
issued letter dated 6.4.1985 (annexure P-7) to all the members
to clear their dues in respect of the flat allotted to them as soon
as possible. The very same Special Officer, exercising his
statutory function, issued a letter dated 1.11.1988 (Annexure

501
P-10_ to the father of the appellant herein that since no claim
for transfer of the interest of late Sati Prasanna Bhowmick has
been made in time by the legal heirs, the flat in question has
already been re-allotted and since no claim for payment of the
value of the share or interest has been made by any person
entitled in law to receive the payment lying in the deceased
member's account after deduction of the amount, if any,
payable to the Society. The Society will make payment in
accordance with law. The appellant herein filed a writ petition
in question in the nature of mandamus commanding the
respondent therein not to give effect to the letter dated
1.11.1988 issued by the Special Officer of the Society and to
forbear from acting on the basis thereof and pursuant thereto.
Thus it is seen that the subject matter of the writ petition is the
order passed by the Special Officer in discharging of his
statutory functions, the writ petition is maintainable in law.
The Special Officer is appointed under the provisions of the
Act and as such he is a statutory Officer and, therefore, he
should be regarded as a public authority. Apart from that Art.
226 of the Constitution is not confined to issue of writ only to
a public authority, the bar extends also to issue directions to
any person. In our opinion, in a case where the Cooperative
Society is under the control of a Special Officer, a writ would
lie.

502
Andhra High Court
Atluri Purushotham, S/O Sri ... vs 1 ... on 13 April, 2005
THE HONOURABLER SRI JUSTICE G.BIKSHAPATHY -
THE HONOURABLE SRI JUSTICE P.S.NARAYANA
WRIT PETITION NO. 15716 of 2004 and WRIT PETITION
No. 22354 OF 2004
13-04-2005
Atluri Purushotham, S/o Sri Veeraraghavaiah R/o Gunadala
Centre, Vijayawada-4
Vijayawada-Guntur-Tenali-Mangaligiri Urban Development
Authority, rep by Vice-Chairman, Vijayawada and others
Counsel for the Petitioner:MR.M.V.DURGA PRASAD
Counsel for the Respondent No.: GP FOR MUNCIPAL
ADMN. & URBAN DEV.
WRIT PETITION NO : 22354 of 2004
1 P.G.K. Murthy, S/o. Sri P.S.R.Rao,
Builder of Homewell Constructions H.No. 45-1-3/2,
Gunadala, Vijayawada - 4.
2 Uday Shankar, S/o. Sri V. Nageswar,
H.No. 45-1-3/2, Gunadala, Vijayawada - 4.
3 Harichandana, W/o. Sri A. Madhusudhana Rao, H.No. 45-1-
3/2, Gunadala, Vijayawada - 4. ..... PETITIONERS
AND

503
1 The Vijayawada-Guntur-Tenali - Mangalagiri, Urban
Development . Authority, Rep by its Vice-Chairman, Line
Center, Eluru Road, Vijayawada.
2 The Vijayawada Municipal Corporation, Rep by its
Commissioner, Vijayawada-1. .....RESPONDENTS
Counsel for the Petitioner:MR.B.V.SUBBAIAH
Counsel for the Respondent No.:
MR.T.S.VENKATARAMANA
COMMON ORDER: (Per the Hon'ble Sri Justice
P.S.Narayana)
1.One Sri Atluri Purushotham, the Writ Petitioner in W.P.No.
15716 of 2004 had set the law into motion by questioning
G.O.Ms. 33 M.A., Municipal Administration and Urban
Development (M2) Department, dated 3-2-2001 and also
sanction plan issued by Respondent No.1. The 1st respondent
is Vijayawada- Guntur-Tenali-Mangalagiri Urban
Development Authority, and the 2nd respondent is
Vijayawada Municipal Corporation. Respondents No. 3 to 5
are the parties who obtained the sanctioned plan. Respondent
No.6 is Government of Andhra Pradesh, represented by
Secretary Municipal Administration.
2. The writ petitioner had prayed for a relief of Writ of
Mandamus declaring the G.O.Ms.No.33 MA, Municipal
Administration and Urban Development (M2) Department,
dated 3-2-2001, as illegal and contrary to the provisions of the

504
A.P. Urban Areas (Development) Act, 1975 and the
Hyderabad Municipal Corporation Act, 1955, A.P. Fire
Services Act, 1999 and A.P. Apartments Act, 1987 and the
rules made there under and further declare that the plan
sanctioned by the 1st Respondent Vide File NO. RC
C2/906/04 and permit bearing B.P.No.121/4/VJA, dated 29-7-
2004 as illegal and further direct the Respondents not to make
or allow to make as the case may be any constructions in the
premises bearing No. 45-1-3/2, Gunadala, Vijayawada,
without maintaining the minimum set backs of four metres
around the proposed building of the Respondents 3 to 5 herein
and obtaining NOC from the 7th respondent and to pass such
other orders in the circumstances of the case.
3.Respondents 3 to 5 herein filed Writ Petition No. 22354 of
2004 praying for issuance of writ, order or direction more
particularly one in the nature of writ of mandamus declaring
the action of the respondents in issuing proceedings
No.R.C.C2-906, dated 23-9-2004, through which the writ
petitioners' building permission was cancelled, as violative of
G.O.Ms.No.423 MA dated 31-7-1998 and also violative of
G.O.Ms. No.33 MA dated 3-2-2002, and also violative of
G.O.Ms.No.484 MA dated 1-11-2002, and also violative of
Principles of Natural Justice and also violative of Articles
14,19 and 21 of the Constitution of India and to pass such
other order in the circumstances of the case.

505
4.The writ petitioner in W.P.No.15716 of 2004 was impleaded
as Respondent NO.3 in Writ Petitioner No. 22354 of 2004 and
this writ petition is filed as against Respondent No.1 and 2,
Vijayawada-Guntur-Tenali-Mangalagiri Urban Development
Authority, and Vijayawada Municipal Corporation. (for the
purpose of convenience, the parties would be referred to as
arrayed in writ petition NO. 15716 of 2004) Since, the parties
are virtually the same and the questions involved also being
common, both the writ petitions are being disposed of by this
common order.
5.It may be relevant to note that initially writ petition No.
15716 of 2004 was disposed of on 23-9-2004. But, however,
the same was recalled on 3-12-2004 in Rev.WPMP No.28402
of 2004 and reliance is placed on the judgment just to show
the stand taken by the Vijayawada Municipal Corporation at
the first instance. It is pertinent to note that the Vijayawada
Municipal Corporation had not filed any separate counter
affidavit in the present litigation.
6.SUBMISSIONS OF MR. M.V.DURGA PRASAD
Mr. M.V.Durga Prasad learned counsel representing the writ
petitioner in W.P.No. 15716 of 2004 and Respondent No.3 in
Writ Petitioner No. 22354 of 2004 made the following
submissions.
7.The learned counsel would maintain that though Public
Interest is involved, this is a matter where writ petitioner, as

506
neighbour, had questioned the action of the respondents and
the neighbour has locus standi to question the same when the
authorities are not acting in accordance with law or there is
violation and contravention of the Rules and Regulations
relating thereto and the statutory provisions. The learned
counsel also would submit that the concerned competent
authorities are expected to adhere to law and enforce the law,
especially in view of the public interest involved. The learned
counsel would also submit that Government has no power to
issue G.O.Ms.No.33 MA, Municipal Administration and
Urban Development (M2) Department, dated 3-2-2001. The
learned counsel had drawn attention of this Court to different
provisions of A.P. Urban Areas Development Act, the Rules
and Regulations inclusive of the Zoning Regulations, the
Provisions of A.P. Apartments (Promotion of Construction
and Ownership) Act and certain Rules in relation thereto and
also the provisions of A.P. Fire Services Act, 1999. The
counsel also made elaborate submissions relating to the strict
liability as in Reylands V. Fleeter and would submit that since
the sanctioned plan had been initially granted by the Urban
Development Authority in contravention of the provisions
referred to supra, the cancellation is in accordance with law.
Even otherwise, G.O.Ms.No.33 MA, Municipal
Administration and Urban Development (M2) Department
dated 3-2-2001 does not disclose the source of power, and the

507
question of delegation would come into play when the
Government is having the power. The learned counsel also
made submissions relating to the prior approval which is
essentially required both under A.P. Apartments Act and A.P.
Fire Services Act. The learned counsel had further drawn the
attention of this Court to the respective pleadings of the parties
and would attack the G.O. aforesaid as arbitrary and
unconstitutional. The learned counsel places reliance on
several decisions while making elaborate submissions in this
regard. The counsel also pointed out the set backs and the
contraventions in relation thereto.
8.SUBMISSIONS OF MR.B.V.SUBBAIAH
Sri B.V.Subbaiah representing respondents No. 3 to 5 in
W.P.No. 15716 of 2004 had taken this Court through the order
of cancellation and would submit that this was made without
notice and without observing the principles of natural justice.
The counsel also would submit that none of the
contraventions, which are being ventilated by the present writ
petitioner, had been made the grounds in the impugned order
of cancellation, which is questioned in Writ Petition No.
22354 of 2004. The learned counsel also submits that the
matter in fact came before the First Court on the ground that
this is a Public Interest Litigation and in fact no public interest
is involved. The learned counsel also would submit that the
rights of the neighbours would be limited rights and G.O.Ms.

508
No.33 MA, Municipal Administration and Urban
Development (M2) Department, dated 3-2-2001 is based on
the policy decision of the Government and it is neither
irrational nor against any statutory or constitutional
provisions. The learned counsel also would maintain that if
any contraventions are made in carrying out the building
activity, the competent authorities definitely are at liberty to
set right the things by rectifying the same by ordering the
removal thereof. The learned counsel also made elaborate
submissions relating to the different provisions of the Statues
and regulations which already had been referred to supra and
also drawn the attention of this Court to certain provisions of
the Hyderabad Municipal Corporation Act and ultimately
would contend that the Urban Development Authority acted in
an arbitrary manner without any reason to cancel the sanction,
that too without notice. The mere fact that the first Court
recorded stand of the Corporation in the judgment in
W.P.No.15716 of 2004 dated 23-9-2004. This would not alter
the situation in any way, since the said order was recalled. The
learned counsel ultimately would submit that this is just a
mala fide action initiated by a neighbour owing to private
grievance and hence in view of the private dispute between the
parties and in the peculiar facts and circumstances, the
cancellation cannot be sustained. Learned counsel also placed
reliance on certain decisions to substantiate his contentions.

509
9.SUBMISSIONS MADE BY Mr.P.SRINIVAS, COUNSEL
FOR RESPONDENT No.1. Learned Standing Counsel
appearing for Urban Development Authority had pointed out
that in the light of the contentions, inasmuch as power to
cancel is there, the power had been exercised in a proper
manner. The counsel would also maintain that G.O.Ms. No.33
MA, Municipal Administration and Urban Development (M2)
Department dated 3-2-2001 has been issued as a policy
decision and the source of power can be traced to Section 59
of Andhra Pradesh Urban Areas Development Act. The
learned counsel also would contend that larger public interest
should be taken into consideration and it must yield to smaller
public interest. The interest of the neighbour is the smaller
public interest whereas the policy adopted in G.O.Ms. No.33
is in larger interest.
10.SUBMISSIONS MADE BY G.P. FOR MUNICIPAL
ADMINISTRATION:
The learned Government Pleader for Municipal
Administration had drawn the attention of this Court to the
stand taken by the Government and would submit that this is a
policy decision and the counsel also had drawn the attention of
this Court to the relevant portion of the counter affidavit filed
in this regard and would submit that this being a policy
decision, the Court should be very slow in interfering with
such matters.

510
11.Heard the counsel on record.
12.The relief prayed for in respect of the writ petition filed by
Respondent Nos. 3 to 5 already had been referred to supra.
The writ petition No.15716 of 2004 is filed by a neighbour
complaining certain contraventions or violations. Aggrieved
by the cancellation of the sanctioned plan, respondent Nos. 3
to 5 filed Writ Petition No.22354 of 2004. The respective
stands taken by the authorities in both the writ petitions are
virtually the same. It is stated that the writ petitioner in
W.P.No.15716 of 2004 is a retired Principal having served as
a lecturer in English in several reputed educational institutions
including Andhra Layola College, Vijayawada and as a
Shakespeare Scholar he translated the complete works of
Shakespeare and thus dedicated his retired life to literal
activity. It is stated that the writ petitioner purchased land to
an extent of 23 1/4 cent equivalent to about 1100 square yards
at Gunadala village in the year 1960 and constructed two
sheds on the North-Western side of the said land leaving 1 1/2
feet area on the North side of the said wall for the purpose of
having a bund to support the said wall. Later, the petitioner
also constructed a house thereon and has been residing therein.
The said area is earmarked for residential purpose in the
master plan and no multi-storied buildings are permitted in
that area as per the Master Plan and Zonal Development Plan.
Further a specific stand is taken by the writ petitioner that

511
respondents Nos.3 to 5 are claiming to be the G.P. Holders in
respect of the property abutting the petitioner's premises on its
north west side. It was further stated that the respondents Nos.
3 to 5 started construction work. They dug anger holes and
pits for the purpose of footings to raise columns just at the
distance of one and a half feet from the petitioner's premises,
practically leaving nothing as set back. Immediately, the
petitioner made representations to the Respondent Nos.1 and 2
personally and as well as in writing. The 2nd respondent gave
the petitioner an endorsement Memo stating that the 1st
respondent had granted exemption to the Respondents Nos.3
to 5 under G.O.Ms. No.33, dated 3-2-2001 and
G.O.Ms.No.484 dated1-11-2002 in respect of set backs and
coverage. The petitioner therefore made representations on 3-
7- 2004, 12-7-2004 and 28-7-2004 clearly stating that even the
alleged G.Os did not permit the exemption from maintaining
the set backs, till the minimum permissible F.A.R. is achieved,
without requirement for any relaxation as per Clause (4) (b) (i)
of the said G.O. It also turned out that the endorsement given
to the Petitioner dated 1-7-2004 is not true, as alleged in the
endorsement, as such permission was in fact given to the
Respondents 3 to 5 much later now. Therefore, the 2nd
respondent removed all the illegal structures made by the
Respondents NO. 3 to 5 in the forenoon of 29-7-2004.
However, to the shock and surprise of the petitioner, the 1st

512
respondent released a plan thereafter with the date of 29-7-
2004 sanctioning the plan without any set backs towards the
Petitioner's premises. It is further averred that contrary to the
usual practices and functioning of the 1st respondent, all the
notings on the sanctioned plan from top to bottom bear the
same dated i.e. 29-7-2004, which speaks volumes about the
manipulations on the part of the Respondents. It is further
stated that though the petitioner has been complaining fro the
beginning about the absence of set backs, Respondents 1 and 2
have not chosen to give any kind of opportunity of hearing to
the petitioner nor they have considered the objections pointed
out by the petitioner in his representations, while granting the
sanction, particularly about the set backs. Hence, the
impugned proceedings are vitiated by violation of principles
of natural justice. It is stated that the 1st respondent sanctioned
the plan for stilt and five upper floors with thirty three
residential apartments in all, illegally. It is further averred that
as per the G.O..Ms.No.423 MA and UD (MI) Department
dated 31-7-1998 governing the floor area ratio and other
standards of building requirements in all the Municipal
corporations in the State, the minimum set backs to be left
around the building are four meters for any building from 11
to 18 meters of height i.e. stilts plus five floors in a building in
a plot up to 1000 square meters. The plot of the Respondents 3
to 5 herein is less than 1000 square meters and the proposed

513
building as per the sanctioned plan is stilt plus five upper
floors. Those set backs around the building as required under
law, are also necessary for the purpose of safeguarding the
easementary rights as to light and air of the neighbours and
also for the purpose of crisis management in case of fire
accident,. These building rules are made in the public interest
which created a vested right in the neighbouring house
owners. Further, even the Municipal Corporation Building
Bye-laws under G.O.Ms.No.905 dated 7-8-1981 are extended
to all the Municipal corporations which are framed in exercise
of the statutory power under the Hyderabad Municipal
Corporation Act. The A.P. Apartments Act, 1987 and the
Rules made there under also provide for the elaborate fire
protection requirements. Part IV to X of National Building
Code of India are expressly made applicable to all buildings
by the Municipal Corporation Building Bye-Laws Act, 1981.
Further, the clearance from Director fire services is mandatory
by virtue of provision of A.P. Apartments Act, 1987 and also
the A.P. Fire Service Act,1999. The Section 13(3) of the A.P.
Fire Services Act, 1999 prohibits any authority or officer
competent to approve building plans before constructions
under the relevant law for the time being from according
approval except on production of a no objection certificate
under sub-section (2) thereof and any violation thereto is an
offence under sub- section (4) read with section 26, thereof.

514
The proposed building sanctioned by the respondents is of
more than 15 meters and hence down by the relevant laws
including multistoried Building Regulations and A.P. Fire
Services Protection Act, 1999. But no such NOC required
under section 13 of A.P. Fire Services Act, 1999 is obtained
by the respondents 2 to 5 herein. These Acts and Laws
including Zoning Regulations and the National Building Code
are made in public interest and create a right in favour of
neighbouring owners and cast a statutory public duty on the
respondent authorities. No exemption can be granted by any
authority in respect of these building laws. In fact, Clause (15)
of the said G.O.Ms.No.423 clearly declares that "the
Government or any other authority shall have no powers
hereafter to relaxations any site from the provisions of the
Building stipulations either in part or in total". Therefore, the
alleged exemption under G.O.Ms.Nos. 33 and 483 and
approval of plan under the impugned proceedings by the sixth
respondent is illegal and without any jurisdiction.
13.It is further averred that G.O.Ms.No.483 is issued only for
the purpose of specified roads in the area of Hyderabad
Municipal Corporation. Hence, it has no application as such to
the Municipal Corporation of Vijayawada at all. Even the
G.O.Ms. No.33 dated 3-2-2001 says, if the permissible F.A.R.
can be achieved with the stipulated set backs/coverage in such
cases, the set backs and coverage shall be insisted as per the

515
rules, it is was brought to the notice of the Respondents 1 and
2 by the Petitioner. And, G.O.Ms.No.33 clearly declares that
under no circumstances, the relaxation should be granted for
the purpose of enhancing the F.A.R. The permissible F.A.R.is
specified in the G.O.Ms. No.423. The second respondent
Municipal Corporation falls in category B in the table annexed
to the said G.O. If the building is in below 1000 square meters
area, the permissible F.A.R. up to the height of 18 meters is
1.40 only. However, the sanctioned plan clearly shows that the
F.A.R. is 1.67 and the gross F.A.R. is 2.18. Significantly,
when the actual extent is only about 950 square meters, the
sanctioned plan shows as if it is in an extent of 1011.75 square
meters. If the actual extent is taken into consideration, the
F.A.R. is more. But, even otherwise, in view of the fact that
the F.A.R. at the rate of 1.40 under G.O.Ms. No.423 can be
achieved, there is absolutely no need for any amount of
relaxation under G.O.Ms.No.33. Thus, the action of the first
respondent is contrary to even G.O.Ms. No.33.
14.It is further stated that the G.O.Ms.No.33 is incompetent
and without jurisdiction. It is submitted that the Building Bye-
Laws are framed under the Municipal Corporation Act and
Urban Areas Development Act. There is no provision for
relaxation in the Hyderabad Municipal Corporation Act, 1955
or A.P. Urban Areas (Development) Act, 1975 or in the
Vijayawada Municipal Corporation Act, 1981 or A.P. Fire

516
Services Act, 1999 and therefore, the provisions, regulations
and the rules made there under cannot be relaxed at all. At any
rate the power to grant exemption under the G.Os and Rules is
exclusively vested in the Government. This power of
relaxation was relinquished as a matter of Policy by the
Government itself. And, the Government being a delegatee
under the Rules cannot further sub-delegate the power as such
action is ultra vires the Statute and hence, the G.O.Ms.No.33
is liable to be declared as illegal. Further, the G.O.Ms.No.33
gives arbitrary power to the supporting officers and suffers
from the vice of excess delegation. At any rate, the mandatory
provisions of the Building Laws made in Public Interest can
not be relaxed by any authority.
15.It is also stated that with the active support of the 2nd
respondent, the Respondents 3 to 5 again started making
illegal constructions without maintaining any set backs
whatsoever, much less as required under aforesaid laws.
Though an illusory set back of one and a half feet is shown in
the sanctioned plan, the Respondents 3 to 5 are practically
covering the entire land without keeping any set backs on
account of the F.A.R. illegally permitted. The construction
proposed by the Respondents 3 to 5 is possible only by
covering the entire existing land.
16.1st respondent filed counter affidavit taking specific stand
that there is no prohibition under law to construct multi-storied

517
building. Further, specific stand was taken that the building
permission was sanctioned for 845.93 square meters and as
per the sanctioned plan Respondents NO.3 to 5 have to leave
1.05 meters which is equivalent to 3 meters and in fact they
started construction of the building by leaving the said open
space and the authorities granted building permission by
invoking provisions contained in G.O.Ms.No.33, dated 3-2-
2001, which has been made applicable to the Urban
Development Authority by G.O.Ms.No.484, dated 1-11-2002.
The representations in this regard also had been referred to
and the other allegations had been denied. Further, it was
averred that the construction of the buildings are governed by
the provisions of the Zoning Regulation Act. It is stated that
the constructions of the buildings are governed by the
provisions of the zoning Regulations prepared for the
Vijayawada Municipal Corporation area. The Multi storied
Building Regulations 1981, the Municipal Corporation
Building Bye-laws 1981 are superceded by the Zoning
Regulations. Subsequently, the Government keeping the
public interest and other relevant considerations issued the
Rule regarding rationalization of floor area ratio and other
standards of building requirements in G.O.Ms.No.423, dated
31.07.1998. These Rules also will apply to the Vijayawada
Municipal Corporation limits. These rules are general in
nature and will be insisted in the normal conditions. It is

518
further averred that some extraordinary situations also will
occur or happened and for that extra situations the insisting of
the normal rules will not be practicable and unless some
relaxation are granted it will be highly impossible for the
owners of the property to enjoy their properties. One such
extraordinary situation is when some portion of the owner of
the property was affected by the road widening, they will be
prevented from constructing any building on the remaining
area. In several areas of the Corporation it became necessary
to widen the roads so as to enable the public to smoothly
travel on those roads. The widening of the roads is also public
purpose and it is also convenient for the public and smooth
flow of the traffic. To acquire huge extent of land by payment
of compensation means practically preventing the Authority
from widening the existing roads. It is highly impossible for
the Government or the Authorities to pay the enormous
compensation to acquire the properties of the citizens for the
purpose of road widening. Hence in the interest of the public
and keeping the public convenience and safety, the
Government adopted a scheme where under the land of the
citizen will be taken on free of cost for the purpose of
widening the roads and in compensation thereof the owner
shall be given some reasonable incentives, such as permission
to construct additional area (FAR) and relaxing the rules
relating to set backs and coverage. These are the extraordinary

519
cases in which relaxations are permissible to the normal rules.
The persons whose properties are affected in the road
widening programme and who surrendered their land on free
of cost will fall into a different category and different
treatment is permissible as per Article 14 of the Constitution
of India. While relaxing the rule of set back and coverage, the
Government has taken care to protect the interest of the public
also. In the G.O.Ms.No.33 it was specifically stated that the
relaxation will be granted only in case where the permissible
FAR cannot be achieved on plots after road widening. The
present case will fall in that category. Moreover, in the zoning
regulations applicable to the Vijayawada in the multi-storied
Building Regulations as well as in the Building Bye-laws,
there is a specific provision empowering the Government to
grant relaxation from the rules. The vested right of the
petitioner is not taken away in any manner with regard to
easementary right of light, air and fire accidents. The A.P.
Apartments Act will have no application for the grant of
Building permission. On the other hand, as the provisions of
the said Act permissions has to be obtained from the authority
or the Urban Development Authority before starting
constructions. As per Section 25 of the said Act the owner of
the Apartment shall be required to provide all the Fire
preventive devices in consultation with the Director General
of Fire Services. There is no necessity of obtaining the 'No

520
Objection Certificate' from the Authorities under the Fire
Services Act, 1999 before the Building Plans are sanctioned.
As per Clause 14 of the G.O.Ms.No.423, dated 31.07.1998 the
provisions of Multi-storied Building Regulation are excluded
to the Buildings with stilt + 5 floors of 18 meters height.
17.According to him clause 15 of the G.O.Ms.NO.423, dated
31-7-1998 has no application in view of G.O.Ms.No.33 dated
3-2-2001. G.O.Ms.No. 484 will apply to the Vijayawada
Municipal Corporation also. The plan was sanctioned with the
additional FAR as provided under G.O.Ms.No.33 and the
sanction plan is not contrary to the said G.O.
18.Respondents 3 to 5 also, in the counter affidavit in
substance had taken the same stand.
19.6th respondent, Government of Andhra Pradesh
represented by Secretary filed a counter affidavit wherein it
was averred that in the year 1997, the Commissioner and
Special Officer, Municipal Corporation of Hyderabad has
stated that Municipal Corporation of Hyderabad has taken up
major programmes for Road widening in Twin Cities of
Hyderabad and Secunderabad besides junction improvement
and stated that a number of properties have been demolished
for the road widening programme and the local people are
cooperating with the local body by giving affected portion and
they are emphasizing to give permissions quickly within the
left over space after road widening. Therefore, the

521
Commisisoner and Special Officer, Municipal Corporation of
Hyderabad has requested the Government for issue of
delegation of powers to relax the Zoning Regulations to
facilitate him to take on the spot decision for speedy road
widening programme and grant permission for reconstruction
of buildings.
20.It is further averred that Government after careful
examination of the above proposal and also keeping in view
the road widening programme taken up in the State have
considered the request of Commissioner, Municipal
Corporation of Hyderabad and issued orders in G.O.Ms.No.15
M.A. Dt. 15-1-1998 by delegating powers to Commissioners
of all Municipal Corporations, Municipalities/Vice- Chairman
of Urban Development Authorities in the State to grant certain
incentives in terms of granting additional FSI and relaxation of
set backs/coverage to the extent required (when the
permissible FAR cannot be achieved with the stipulated
setbacks (in plots of less than 500 square meters). As per this
G.O. in road widening cases whenever the land is surrendered
on free of cost to the local body then a) In addition to the
permissible FSI to the total extent of the plot area additional
FSI of 0.5 shall be considered to the extent of the land affected
in road widening surrendered free of cost and b) Wherever
permissible FSI cannot be achieved on plots upto 500 square
meters after road widening with the stipulated set backs as per

522
rules and Zoning Regulations, the set back relaxation and
coverage can be considered by the Commissioners of Local
Body to utilize the permitted FSI, and while exercising the
above powers the Local Body shall ensure public safety,
smooth flow of traffic and also ensure proper building line.
21.It is further stated that after issue of above orders, in 1998
the Commissioner, Municipal Corporation of Hyderabad has
requested the Government to consider the extending the above
relaxation powers in road widening cases without limitation of
plot area and to be made applicable wherever the land is
surrendered free of cost for road widening purpose. The
request of the Commissioner, Municipal Corporation of
Hyderabad was considered favourably in view of the road
widening programme taken up by the Municipal Corporation
of Hyderabad and accordingly orders were issued in
G.O.Ms.No.483 M.A. dated 24-8-1998 authorising the
Commissioner, Municipal Corporation of Hyderabad to grant
additional FAR to an extent of 1.0 (earlier o.5) over the land
affected in road widening and to consider the relaxation of
Setback and Coverage to the extent required irrespective of the
plot area when the permissible FAR cannot be achieved with
the stipulated setbacks.
22.It is further averred that later in the year 2000, the
Commissioner, Municipal Corporation, Guntur has requested
the Government to extend the above relaxation powers to

523
Guntur Municipal Corporation also so as to enable him to take
up the road widening programme affectively. Government
after careful consideration of the matter and also keeping in
view the road widening programme being taken up by the all
Municipal Corporations in the State has extended the above
G.O. to all other Municipal Corporations o the state and issued
orders in G.O.Ms. No.33 M.A. dated 3-2-2001. As per the said
G.O. the Commissioners of all Municipal Corporations were
authorized to grant additional FAR to an extent of 1.0 ( earlier
o.5) over the land affected in road widening and surrendered
on free of cost and to consider the relaxation of Setback and
Coverage to the extent required irrespective of the plot area
when the permissible FAR cannot be achieved with the
stipulated set backs.
23.Further, it is submitted that in the said G.O. it was
stipulated that i) while exercising the above powers, the
Municipal Corporation shall finalise the suitable building line
i.e. front setback for the complete portion of the road taken up
for widening keeping in view the developments existing on the
ground, feasibility and smooth flow of traffic and notify the
same for the benefit of owners of the sites affected in road
widening. No construction shall be allowed in violation of
such notified building line; ii) While exercising the above
powers the Municipal Commissioner shall ensure public
interest, safety and smooth flow of traffic; and iii) The

524
Commissioner of Visakhapatnam, Vijayawada, Guntur,
Rajamundry, Kurnool and Warangal shall constitute a
Committee with Municipal Commissioner as Chairman,
Regional Director of Municipal Administration, Regional
Deputy Director of Town Planning, Deputy City Planner i.e.
Head of the Town Planning Wing and Municipal Engineer as
Members for giving the permission for
reconstruction/construction where the land is surrendered on
free of cost.
24. It is further stated that the above G.O. was issued with a
view to facilitate the road widening programme being taken up
by the local bodies. But, at any cost this G.O. neither entitles
any individual to demand for set back relaxations as required
by him nor authorizes the Commissioners to give relaxations
as sought for by any individual and the request of the each
individual has to be decided on merits of each case and while
exercising the above powers, the Commissioner or the
Committee so constituted under the said G.O. shall ensure
public interest, safety and smooth flow of traffic etc. If the
Committee feels that the relaxations sought for by any
applicant who has surrendered the land on free of cost, is
against the public interest, safety and smooth flow of traffic,
then same has to be invariably rejected. Further by virtue of
this rejection if any land owner/building owner withdraws his
willingness to surrender the road widening portion on free cost

525
then same has to be acquired by following due process of law
and in no circumstances the buildings shall be allowed against
the public interest and safety and smooth flow of traffic.
25.Thus, in the counter affidavit, the Government justifies the
action in issuing the G.O.Ms. No.33 referred to supra.
26.In the writ petition filed by Respondent NO. 3 to 5
questioning the cancellation, substantially the same grounds
have been repeated that the cancellation is in violation of
principles of natural justice and the sanctioned plan is in
accordance with law and virtually several details relating to
the obtaining of the sanctioned plan and the G.Os in relation
thereto had been referred to and specific stand was taken that
the said G.Os. had been issued as a matter of Policy decision
and the same is not in violation of Articles 14, 19 and 21 of
the Constitution of India. In the counter affidavit filed by the
1st respondent, the same stand had been repeated and the 3rd
respondent filed counter affidavit repeating the same stand
taken by them in writ petition 15716 of 2004. Before further
proceeding with the matter, it may be appropriate to have a
look at the relevant G.Os. at the first instance. G.O.Ms.No.33
M.A.,Municipal Administration and Urban Development (M2)
Department reads as hereunder:
"GOVERNMENT OF ANDHRA PRADESH
ABSTRACT

526
Municipal Corporations -Road Widening - delegation of
powers for according certain incentives for re-construction-
construction - Orders - issued.
MUNICIPAL ADMINISTRATION AND URBAN
DEVELOPMENT
(M2) DEPARTMENT
G.O.Ms.No.33 MA., Dated:3rd February,2001.
Read the following:
1. G.O.Ms.No. 15 MA., dated 15-1-1998.
2. G.O.Ms.No. 483 MA,dated 24-8-1998.
3. From the Commr. Mpl.Corpn., Guntur
4. Rc.No.1/2000/CP/G1, dated 31-8-2000.
1. In the Government orders 1st read above, certain powers
have been delegated to the urban local bodies/Urban
Development Authorities to grant additional F.A.R. to an
extent of 0.5 over the land affected in road widening and
surrendered free of cost and in such case to consider the
relaxation of setbacks and coverage to the extent required
when the permissible FAR cannot be achieved on plots upto
500 sq.mts. This was restricted where major stretches of road
widening have been undertaken by the Local Authority and
not in isolated cases.
2.In the reference 2nd read above, on the request by the
Commissioner and Special Officer Municipal Corporation of
Hyderabad further orders have been issued authorizing the

527
Commissioner and Special Officer, Municipal Corporation of
Hyderabad to grant additional F.A.R. to an extent of 1.0 over
the land affected in road widening and surrendered free of cost
for constructing/reconstructing building as per notified land
use of Master Plan/Z.D.P. and in such cases to consider the
relaxation of setbacks and coverage to the extent required
when the permissible FAR cannot be achieved.
3.In the reference 3rd read above Commisisioner, Municipal
Corporation, Guntur has requested the Govt. to extent the
above said relaxation powers to Guntur Municipal Corporation
also in road widening cases wherever the land is surrendered
free of cost in the alignment of notified M.P/Z.D.P. roads.
4.Government after careful consideration of the above matter
and also keeping in view the road widening programme
proposed by the Guntur Municipal Corporation and to
facilitate widening of roads in other Corporations on the line
of Municipal Corporation of Hyderabad have decided to
delegate the powers to the extent given below to the all
Commissioners of Municipal Corporations Viz.,
Visakhapatnam, Vijayawada, Guntur, Rajahmundry, Warangal
and Kurnool in modification to G.O. first read above.
A)F.A.R. : In addition to the permissible FAR to total extent
of the plot area, additional F.A.R. of 1 shall be considered to
the extent of the land affected in road widening and

528
surrendered free of cost for construction/reconstructing
building as per the notified land use of Master Plan/Z.D.P.
B) Set-back & Coverage:
i)Wherever permissible FAR can not be achieved on plots
after road widening and land surrendered free of cost. With the
stipulated set backs as per rules and Zoning Regulations the
relaxation of set back and coverage can be considered by the
Commissioner. However, if the permissible FAR can be
achieved with stipulated setbacks/coverage in such cases
setbacks and coverage shall be insisted as per the rules.
ii)While exercising the above powers Municipal Corporations
shall finalise a suitable building line i.e. front set back for the
complete portion of the road taken up for widening keeping in
view the developments existing on the ground feasibility and
smooth flow of traffic and notify the same for the benefit of
owners of the sites affected in road widening. No construction
shall be allowed in violation of such notified building line. iii)
While exercising the above powers the Municipal
Commissioners shall ensure public interest, safety and smooth
flow of traffic. iv) These orders are applicable for the sites
affected in road widening as per notified M.P./Z.D.P. roads
and where affected land is surrendered free of cost.
5.The Commissioners of Municipal Corporations of
Visakhapatnam, Vijayawada, Guntur, Rajahmundry, Kurnool
and Warangal shall constitute committee as given below for

529
giving the permissions for reconstruction/construction where
the land is surrendered free of cost as per the above orders.
1. Municipal Commissioner Chairman
2.Regional Director of Municipal Administration
. Member
3. Regional Deputy Director of Town Planning . Member
4. Deputy City Planner .
Member
5. Municipal Engineer . .
Member
The delegation of powers referred above shall be exercised
only by the Municipal Commissioners and shall not be further
delegated to any other officers.
(BY ORDER AND IN THENAME OF THE GOVERNOR
OF ANDHRA PRADESH )
LINGARAJ PANIGRAHI
SECRETARY TO GOVERNMENT"
27.G.O.Ms.No. 483 M.A. dated 24-8-1998 reads ;
ABSTRACT
Municipal Corporation of Hyderabad - Road widening and
demolition of affected properties - Delegation of Powers for
according certain relaxations to Building Regulations / Zoning
Regulations - Orders -Issued

530
MUNICIPAL ADMINISTRATION 7 URBAN
DEVELOPMENT (M1) DEPARTMENT G.O.Ms.No.483
M.A. Dated: 24th August,1998.
Read the following:
1. G.O.Ms. No.15, M.A., dt.15-1-1998.
2. From the C/MCH, Lr.No. 270/TPS/MCH/
HO/97-98/101, DT. 3-4-1998.
3. From theC/MCH, Lr.No.270/TPS/MCH/
HO/97-98/275,dt.30-6-1998.
4.From the C/MCH D.O.Lr. No.270/TPS/
MCH/HO/907/98/321,dt. 24-7-98.
5.G.O.Ms.No.423, M.A., dt.31-7-98.
.....
ORDER:
In the Government orders 1st read above, certain powers have
been delegated to the Local Authorities/Urban Development
Authorities to relax the Zoning Regulation in respect of F.A.R.
to an extent of 0.5 over the land affected in road widening and
surrendered free of cost and in such cases setbacks and
coverage to the extent required when the permissible FAR
cannot be achieved on plots upto 500 sq. mtrs. This was
restricted to the cases where major stretches of road widening
have been undertaken by the Local Authority and not in
isolated cases.

531
2.In the reference 2nd to 4th read above the Commissioner and
Special Officer, Municipal Corporation of Hyderabad has
requested to consider for extending the said relaxation powers
in road widening cases without limitation of plot area and to
be made applicable wherever the land is surrendered free of
cost in the alignment of notified M.P./Z.D.P. roads in
Municipal Corporation of Hyderabad area.
3.Municipal Corporation of Hyderabad has further informed
that most of the owners of the properties whose sites area
affected in road widening are coming forward for approval of
building plans for commercial purpose as after road widening
the site left over are useful for commercial purpose. Further,
most of the structures along these roads where road widening
has been taken up has already been developed as commercial
use.
4.Therefore, the Commissioner and Special Officer, Municipal
Corporation of Hyderabad has requested for orders authorizing
to permit commercial uses along the (18) roads which have
been taken up for widening by Municipal Corporation of
Hyderabad as per notified M.P./Z.D.P. and has enclosed a list
of 18 roads/junctions where major road widening has been
taken up by the Municipal Corporation of Hyderabad.
5.Government after careful consideration of the above
proposals and also keeping in view the road widening
programme staken up by Municipal Corporation of Hyderabad

532
have decided delegate the powers to the extent given below to
the Commissioner and Special Officer Municipal Corporation
of Hyderabad in modification to G.O. 1st read above.
A) F.A.R.: In addition to the permissible F.A.R. to the total
extent of the plot area Addl. F.A.R. of 1.00 shall be considered
to the extent of the land affected in road widening and
surrendered free of cost for constructing/re-constructing
building as per notified land use of Master Plan/Z.D.P. B) Set-
back & Coverage: i)Wherever permissible Far cannot be
achieved on plots after road widening with the stipulated set
backs as per rules and Zoning Regulations the relaxation of set
back and coverage can be considered by the Commissioner of
Municipal Corporation of Hyderabad.
ii) While exercising the above powers the MCH shall finalise
a suitable building line (i.e. front setback) for the complete
portion of the road taken up for widening keeping in view the
developments existing on the ground, feasibility and smooth
flow of traffic and notify the same for the benefit of owners of
the sites affected in road widening. No construction shall be
allowed in violation of such notified building line.
iii) While exercising the above powers the Municipal
Corporation of Hyderabad shall ensure public interest and
safety and smooth flow of traffic. iv) The relaxation powers
referred above are applicable for the sites affected in road

533
widening as per notified M.P./Z.D.P. roads and where affected
land is surrendered free of cost.
C(i)The Commissioner & Special Officer, Municipal
Corporation of Hyderabad is authorized to grant permissions
to construct/re-construct of the buildings for commercial use
though the land use is earmarked for residential or other uses
except recreational use as per notified M>P./Z.D.P. and where
the land is surrendered free of cost for road widening in the
stretches of (18) roads as given in annexure and where the site
is having direct frontage to the said road. Commercial use
shall be restricted to the extent of the depth of such plots only
and in such cases the additional FAR on the land surrendered
free of cost for road widening shall be restricted to 0.50 only.
Municipal Corporation of Hyderabad shall furnish a copy of
all such sanctioned plans to the Vice Chairman, Hyderabad
Urban Development Authority for necessary further action and
to update the M.P./Z.D.P. from time to time. ii)The
Commissioner and Special Officer, Municipal Corporation of
Hyderabad shall collect development charges/conversion
charges along with other charges as per rules while according
such permissions in the stretches of (18) roads as given in
annexure.
The relaxation powers referred above shall be exercised only
by the Commissioner, MCH, and shall not be further delegated

534
to any other Officers. (BY ORDER AND IN THE NAME OF
THE GOVERNOR OF ANDHRA PRADESH )
N.S.HARIHARAN
PRINCIPAL SECRETARY TO GOVERNMENT"
28.Likewise G.O.Ms.No. 484, dated 1-11-2001 reads as
hereunder.
ABSTRACT
Vijayawada, Guntur,Tenali, Mangalagiri Urban Development
Auithority, Vijayawada- Vijayawada City Development Plan-
Delegation of certain powers to Vice-Chairman, VGTMUDA
as was stipulated in G.O.Ms.No.33 M.A.dated 05-02-2001-
Orders-Issued.
MUNICIPAL ADMINISTRATION AND URBAN
DEVELOPMENT(H2) DEPARTMENT. G.O.Ms.No.484,
M.A. Dated: 1-11-2002
Read the following:
1.G.O.Ms.No.33, MA-dated 03-02-2001.
2.From the Vice Chairman, VGTMUDA, Letter .No.C2-
172/01,dated 12-07-2002.
ORDER:
In the G.O.first read above, orders were issued authorizing the
Commissioners of Vijayawada, Visakhapatnam, Guntur,
Rajamundry, Warangal, Kurnool to give certain incentives in
terms of additional FAR/Relaxation of Setbacks/Coverage to

535
the persons who have surrendered the land on free of cost for
widening of any Master Plan Road/Zonal Development Plan
Road to facilitate the road widening programme being taken
up by the Municipal Corporations.
2 As per the above G.O., the Commissioners of the concerned
Municipal Corporation has to constitute a committee with
Regional Director,Municipal Administration, Regional Deputy
Director of Town Planning, Deputy City Planner and
Municipal Engineer as Members under the Chairmanship.
3 In the reference second read above, the Vice-Chairman
Vijayawada, Guntur,Tenali,Mangalagiri Urban Development
Authority has stated that as a part of Vijayawada City
Development Plan they are undertaking widening of Karl
Marx Road and Mahatma Gandhi Road and also proposing to
widen and develop certain internal roads in the Vijayawada
City. Further stated that many land owners abutting to the
above road are willing to surrender the land on free of cost for
the purpose of road widening and requested the Government
to delegate the powers to him for granting incentives.
4 The Government after careful examination of the matter
hereby delegate the powers to Vice-Chairman, Vijayawada,
Guntur,Tenali, Mangalagiri Urban Development Authority
authorizing him to give incentives to the extent given in G.O.
first read above to the persons who have surrendered the land
on free of cost for widening of any Master Plan road/Zonal

536
Development Plan road being taken up by VGTUDA. in
modification to G.O.first read above.
5 The Vice-Chairman, Vijayawada, Guntur,Tenali,
Mangalagiri Urban Development Authority shall constitute
committee as given below for giving the permissions for
reconstruction/construction where the land is surrendered free
of cost:
a. Vice-Chairman, VGTMUDA : Chairman
b. Municipal Commissioner,VMC : Member
c. Chief Planning Officer, : Member
. VGTMUDAConvenor
d. Depy. City Planner VMG : Member
6 Further while exercising these powers the Vice-Chairman,
Vijayawada, Guntur,Tenali, Mangalagiri Urban Development
Authority.
a. Shall finalise a suitable building line for the complete
portion of the road taken up for widening keeping in /view the
developments existing on the ground, feasibility land smooth
flow of traffic and notify the same for the benefit of owners of
the site as affected in road widening and no constructions shall
be allowed in violation of such notified building line;
b. Shall ensure public interest, safety and smooth flow of
traffic.
7. The delegation/powers referred above shall be exercised of
only by the Vice- Chairman, Vijayawada, Guntur, Tenali,

537
Mangalagiri Urban Development Authority and shall not be
further delegated to any other officer."
29.It may be convenient to have a look at the order initially
made in Writ Petition No. 15716 of 2004. The said order reads
as hereunder.
"ORAL ORDER:
(Per The Honourable Sri Devinder Gupta, the Chief Justice)
The petitioner is questioning the action of respondents in
having permitted Respondents 3 to 5 to raise construction
without set backs, which is contrary to the zonal regulations in
respect of set backs. Petitioner sought direction to declare
G.O.Ms.No.33 of Municipal Administration and Urban
Development Department, dated 3.2.2001 as illegal and
contrary to various provisions and to declare the plan
sanctioned by the first respondent and permit dated 29.7.2004
as illegal with further directions to respondents not to allow
the Respondents 3 to 5 to make any construction in the
premises bearing No.45-1- 3/2,Gundala, Vijayawada without
maintaining the minimum set backs of four meters around the
proposed building of Respondents 3 to 5.
Since copies of the petition have been served on the
Respondents 1 and 2 and 6 and 7, Writ Petition was taken-up..
Since the name of counsel for the Respondent NO.1 was not
shown in the cause list, the same was directed to be shown
today, and, the same has been shown in the cause list, but,

538
Respondent No.1 is absent. Learned Standing Counsel for
Respondent No.2 states that he has got instructions from the
Commissioner, Vijayawada Municipal Corporation, and the
following are his instructions.
" Sri P.G.K.Murthy and Others have applied to the
Vijayawada-Guntur- Tenali-Mangalagiri Urban Development
Authority(V.G.T.M.U.D.A.) for grant of relaxation of Zoning
Regulations in respect of set backs for the proposed
construction of apartment building with Stilt floor for parking
and 5 upper floors for residential flats at D.No.45-1-
3/2,Gunadala in the name of Sai Residency Apartments vide
their application dt:15-3-2004 . The site under reference is
situated abutting to Eluru Road (Kaarl Marx Road) which is
proposed to widen to 120' as per Master Plan. The
Government vide G.O.Ms.No.33, M.A.dated 3.2.2001 have
delegated certain powers to the committee headed by the
Commissioner to grant additional floor area and relaxation of
certain Zoning regulations in the sites where the owners give
the road widening portion at free of cost to the local body. As
the widening of Eluru Road and Bundar Road in Vijayawada
are taken up by V.G.T.M.U.D.A., the Government have
delegated similar powers to Vice-Chairman,V.G.T.M.U.D.A.,
vide G.O.Ms.No.484 M.A. dt.1.11.2002 to grant permissions
for building constructions in the sites abutting to these two
roads. Accordingly, the V.G.T.M.U.D.A. after placing

539
application under reference in the Committee, approved plans
for the said apartment building with relaxation of set backs
vide B.P.No.121/2004 in R.C.2.906/2004,dt.29.7.2004. As per
the approved plan, the set back of 1.5 mtrs. On rear side is
shown after relaxing the set back of 2.5 mtrs. On this side for
surrendering of road widening portion of 165.82 square meters
at free of cost.
On commencing of construction of rear side part of the
building, the adjacent resident Sri A.Purushotham has raised
objection vide his Complaint No.35027/2004, dt.3-7-2004 and
28-7-2004 that the construction is commenced in deviation to
the approved plan by covering OTS ducts and that he will
suffer from lack of ventilation due to the relaxation granted by
the authorities to the proposed apartments building. As the
builder has commenced the construction based on the
permission granted by the V.G.T.M.U.D.A., the matter
regarding objection raised by the neighbour has been brought
to the notice of the Vice Chairman, V.G.T.M.U.D.A., through
D.O. letter No.Rc.G5.15482/80,ddt.30-7-2004 and requested
the Vice-Chairman,V.G.T.M.U.D.A. to reconsider the
relaxation granted to the building under reference.
Accordingly, this subject was kept in the Agenda for the next
meeting conducted on 15-9-2004 and I have personally
attended the said meeting along with City Planner and it was
decided by the Committee to revoke the relaxations granted

540
and to direct the application to submit revised plans.
According to the decision taken in the committee meeting the
construction work commenced by the applicant has been
stopped. The application commenced the construction in only
50% of the site on rear side and laid stilt floor slab covering
the ventilation ducts. Due to intervention of the department,
the said construction is totally stopped at this stage and
applicant is required to submit revised plan with sufficient set
backs without inconvenience to the neighbour and to submit to
the building committee for further consideration."
In view of what has been stated by the learned counsel for
Respondent No.2 that the Committee has decided to revoke
the relaxation granted and to direct respondents 3 to 5 to
submit revised plan, and, construction work has been directed
to be stopped, no other or further direction deserves to be
issued in this Writ Petition, except, by directing respondents 1
and 2 that they will ensure that no construction is permitted to
be carried out by respondents 3 to 5 in accordance with old
sanctioned plan, and, their revised plan submitted will not be
taken up for consideration and no decision will be taken
thereon till the respondents 3 to 5 demolish the construction
raised by them in the set backs. Ordered accordingly.
The Writ Petition stands disposed of . No costs."
30.On a prima facie reading of the order of cancellation
referred to supra, none of the grounds which are being

541
ventilated by the petitioner had been referred to nor had been
relied upon by the Urban Development Authority. But,
however, it was specified that they laid stilt without leaving
open to sky which is against the sanctioned plan in this regard
and show cause notice was issued under Section 42(1) and
43(1) of the Act and it was further stated that the
Commissioner, Vijaywada had written a letter to the said
office for refusing the issue of relaxation of setbacks and the
office had taken a decision in the committee meeting in
accordance with the rules and regulations. Further they had
not removed the slab put up in the OTS area as ordered by
their staff. Hence, they were informed that the approved plan
given to them by giving relaxation of setbacks had been
cancelled and they were directed to revise the plan. They were
further directed not to make any construction unless the
revised plan is granted.
31.The learned counsel for the Writ petitioner placed strong
reliance on Sections 12,13,14,57 of A.P. Urban Areas
Development Act and Zoning Regulations and Sections 2(h)
and 13 of A.P. Fire Services Act, 1999 and Section 3(a) and
3(c) of A.P. Apartments Act and Rule 15 of the Rules in
relation thereto and complained that these are the
contraventions by virtue of which the approved plan itself is
not in accordance with law and hence the cancellation is
sustainable. No doubt, the very foundation relating to the said

542
action is G.O.Ms.No.33 and the same had been questioned in
the Writ petition. G.O.Ms. 33 already had been referred to
supra. It is the stand taken by the Government that G.O.Ms. 33
was issued as a Policy measure exercising power under
Section 59 of the A.P. Urban Development Authorities Act.
Reliance is placed on a decision of a Division Bench of this
Court in Dr. C.Kulsum Reddy Vs. State of A.P. Municipal
Administration and Urban Development (ML) Department
1wherein the Division Bench following Ram Jawaya V. State
of Punjab2 and distinguishing the decision in Consumer
Action Group Vs. State of Tamil Nadu3 while dealing with
G.O.Ms. No. 419 M.A. and UD (ML) Department, dated 30-7-
1998 relating to unauthorized constructions held :
"The last argument which was made by the learned Additional
Advocate General was that in terms of Article 154 of the
Constitution the Government has an executive power to issue
such directions and the impugned G.O.is referable to Article
154. This is settled law that the executive power would not be
available to the Government to defeat a statute. Ordinarily the
executive power is the power which is exercised by the
executive for the residual functions of the Government that
remain with it after the legislative and judicial functions are
taken away. If the State Government is empowered under a
definite entry to legislate and there isno legislation it may
exercise the power but once there is legislation the

543
Government cannot use its executive power to defeat the
legislation. The only way in such a situation is amendment in
the legislation. This is settled law and the Courts have
consistently taken this view that when a power is sought to be
exercised in a particular way by the legislation the executive
has to follow the methodology laid down by such legislation.
In this regard we may refer to a judgment of Supreme Court in
Ram Jawaya V. State of Punjab. It is a Constitutional Bench
judgment which has not undergone any major changes to our
knowledge from 1955. We would like to quote para 12 of the
judgment. The Hon'ble Chief Justice B.K.Mukherjea as His
Lordship then was speaking for the Court said;
". It may not be possible to frame an exhaustive definition of
what executive function means and implies. Ordinarily the
executive power connotes the residue of Governmental
functions that remain after legislative and judicial functions
are taken away. The Indian Constitution has not indeed
recognized the doctrine of separation of powers in its absolute
rigidity but the functions of the different parts or branches of
the Government have been sufficiently differentiated and
consequently it can very well be said that our Constitution
does not contemplate assumption, by one organ or part of the
State, of functions that essentially belong to another. The
executive indeed can exercise the powers to departmental or

544
subordinate legislation when such powers are delegated to it
by the legislature.
It can also, when so empowered, exercise judicial functions in
a limited way. The executive Government however, clan never
go against the provisions of the Constitution or of any law.
This is clear from the provisions of Article 154 of the
Constitution but, as we have already stated, it does not follow
from this that in order to enable the executive to function there
must be a law already in existence and that the powers of the
executive are limited merely to the carrying out of these laws"
The laws made by the legislature are bound to be followed by
everybody including the Government. Therefore, we are of the
considered view that the impugned G.O. has been issued
without any authority of law."
32.This G.O. is issued as a policy measure in exercise of
power under Section 59 of the Act. In Krishnan Kakkanth Vs.
Government of Kerala4, the Supreme Court held:
" To ascertain unreasonableness and arbitrariness in the
context of Article 14 of the Constitution, it is not necessary to
enter upon any exercise for finding out the wisdom in the
policy decision of the State Government. It is immaterial if
abettor or more comprehensive policy decision could have
been taken. It is equally immaterial if it can be demonstrated
that the policy decision is unwise and is likely to defeat the
purpose for which such decision has been taken. Unless the

545
policy decision is demonstrably capricious or arbitrary and not
informed by any reason whatsoever or it suffers from the vice
of discrimination or infringes any statute or provisions of the
Constitution, the policy decision cannot be struck down. It
should be borne in mind that except for the limited purpose of
testing a public policy in the context of illegality and
unconstitutionality, Court should avoid "embarking on
uncharted ocean of public policy".
33. Strong reliance was placed on the decision of the Supreme
Court in State of Punjab Vs. RamLubhaya Bagga5, in this
regard. No doubt submissions at length relating to the power
to cancel when not specifically conferred on the authority
were made and submissions also were made that power to
sanction the plan would be taken as having implied power to
cancel the permission granted by way of relaxation by virtue
of G.O.Ms.No.33. The legality of G.O.Ms.No.33 also had
been attacked in the light of the Urban Development Act. On a
careful scrutiny of G.O.Ms. NO.33 it is clear that the G.O.,
had been issued by exercising powers under Section 59 of the
Act. Though, the same had not been specifically referred to,
the contention that such power is not there at all cannot stand
to legal scrutiny. Inasmuch as the same has been introduced as
a policy measure, it cannot be said to be irrational or against
any statutory provision or violation of any of the constitutional
provisions. The Division Bench in the above said decision first

546
cited, no doubt held the G.O. questioned therein was issued
without any authority of law but the same is distinguishable on
facts. Apart from this aspect of the matter, Section 450 of
Hyderabad Municipal Corporation Act, 1955 dealing with the
power of Commissioner to cancel the permission on material
misrepresentation reads thus,
"450. Power of Commissioner to cancel permission on the
ground of material misrepresentation by applicant:- If at any
time after permission to proceed with any building or work
has been given, the Commissioner is satisfied that such
permission was granted in consequence of any material
misrepresentation or fraudulent statement contained in the
notice given or information furnished under Section 428 or
433 or if the further information if any, furnished, he may
cancel such permission and any work done there under shall
be deemed to have been done without his permission."
34.It is not the case of either of the parties that the Corporation
has exercised such power in this regard. Apart from this
aspect, before cancellation no notice in fact had been issued
and no opportunity had been given to respondents 3 to 5 in
this regard. The only ground of attack appears to be that
without maintaining the setbacks, the building construction is
being proceeded with. In Consumer Action Group Vs. State of
Tamil Nadu6, the Apex observed at para 38 as follows:

547
"We may shortly refer to the possible consequences of the
grant of such exemption under Section113-A by collecting
regularization fees. Regularisation in many cases, for the
violation of front setback, will not make it easily feasible for
the corporation to widen the abutting road in future and bring
the incumbent closer to the danger of the road. The waiver of
requirements of side setback will deprive adjacent buildings
and their occupants of light and air and also make it
impossible for a fire engine to be used to fight a fire in a high
rise building. The violation of floor space index will result in
undue strain on the civil amenities such as water, electricity,
sewage collection and disposal. The waiver of requirements
regarding fire staircase and other fire prevention and fire
fighting measures would seriously endanger the occupants
resulting in the building becoming a veritable death trap. The
waiver of car parking and abutting road width requirements
would inevitably lead to congestion on public roads causing
severe inconvenience to the public at large. Such grant of
exemption and the regularization is likely to spell ruin for any
city as it affects the lives, health, safety and convenience of all
its citizens. This provision, as we have said, cannot be held to
be invalid as it is within the competence of the State
Legislature to legislate based on its policy decision, but it is a
matter of concern. Unless check at the nascent stage is made,
for which it is for the State to consider what administrative

548
scheme is to be evolved, it may be difficult to control this
progressive illegality. If such illegalities stay for long, waves
of political, humanitarian, regional and other sympathies
develop. Then to break it may become difficult. Thus, this
inflow has to be checked at the very root. The State must act
effectively not to permit such situation to develop in the wider
interest of the public at large. When there is any provision to
make illegal construction valid on that ground of limitation,
then it must mean that the statutory authority in spite of
knowledge has not taken any action. The functionary of this
infrastructure has to report such illegalities within the shortest
period, if not, there should be stricter rules for their non-
compliance. We leave the matter here by bringing this to the
notice of the State Government to do the needful for salvaging
the cities and country from the wrath of these illegal colonies
and construction".
35.In M.C.Mehta Vs. Union of India7 it was held by the Apex
Court " The growth of illegal manufacturing activity in
residential areas has been without any check and hindrance
from the authorities. The manner in which such large-scale
violations have commenced and continue leaves no manner of
doubt that it was not possible without the connivance of those
who are required to ensure compliance with law and reasons
are obvious. Such activities result in putting on extra load on
the infrastructure. The entire planning has gone totally

549
haywire. The law-abiders are suffers. All this has happened at
the cost of health and decent living of the residents of the city
violating their constitutional rights enshrined under Article 21
of the Constitution of India. Further, it is necessary to bear in
mind that the lawmakers repose confidence in the authorities
that they will ensure implementation of the laws made by
them. If the authorities breach that confidence and act in
dereliction of their duties, then the plea that the observance of
law will now have an adverse effect on the industry or the
workers cannot be allowed. Within the framework of law,
keeping in view the norms of environment, health and safety,
the Government and its agencies, if there was genuine will,
could have helped the industry and workers by relocating
industries by taking appropriate steps in the last about 15
years. On the other hand, it encourage illegal activities."
36.Likewise in Corporation of Calcutta Vs. Mulchand
Agarwala8 it was observed by the Apex Court at para 7 and 8
as follows: " It was next argued by learned counsel for the
respondent that it was open to the Corporation to have asked
for demolition of the building in the proceedings taken by it
under S. 488 and as it did not ask for it and was content with
the imposition of fine, it was precluded from claiming that
relief in the present proceedings. This argument is based on S.
536, which is as follows:

550
"Whether under this Act or under any rule or by law made
there under any person is liable in respect of any unlawful
work,
a)to pay a fine, and
b) to be required to demolish the work.
A Magistrate may, in his discretion and subject to the
provisions of Ss. 363, 364 and 493, direct the said person to
pay the fine and also to demolish the work
In his order dated 9-4-1954 the learned Chief Justice
expressed a doubt whether the Corporation could apply for a
demolition order, when instituting an application under S. 488
for breach of R.62 of Sch. XVII. We are inclined to share this
doubt. What R.62 prohibits is the erection of a building
without permission, and under that Rule, the breach is
complete when the erection has commenced, without
reference to whether the construction is being carried on or
completed.
A question of demolition cannot therefore arise with reference
to a breach of R.62l. It can arise only when the construction of
the building is carried on or completed otherwise than in
accordance with the terms of the permission or in breach of
any of the provisions of the Act or the rules. Now, in the table
annexed to S.488, while a breach of R.62 of Sch.XVII is made
punishable with fine which may extend to Rs.200, there is no

551
similar provision with reference to breach of Rr.3,14,25 and
32 of that Schedule.
But there is, instead, a provision that when a direction is asked
for under S. 363 (1) for demolition, an order can be passed
imposing fine which may extend to Rs.250. Under that
section, it should be noted, an application for an order for
demolition can be made on three grounds viz., 1) that the
erection of building has been commenced without permission,
(2) that it has been carried on or completed otherwise than in
accordance with the terms of the permission, or 3) that it has
been carried on or completed in breach of the provisions
contained in the Act or the rules.
But, there is this difference between an application based on
ground No..1 aforesaid and one founded on grounds Nos. 2
and 3, that while a question of demolition cannot arise with
reference to the former when the charge is commencement or
the construction without permission - and at that stage no
question of demolition of a building necessarily arises it does
arise as regards the latter. Therefore, when an application is
made under S. 488, whether an order could be made under
S.536 for demolition will depend on the ground on which it is
founded.
And, where, as in the present case, the application was based
solely and exclusively on a breach of R.62 of Sch. XVII, no
order could have been passed for demolition under S.536. It is

552
immaterial for the present purpose that the building had been
completed when the order was passed on 11-4-1951 on the
application under S.488, because the power to pass an order
under S.536 would depend on what the charge as actually laid
in the petition was and not on what it might have been".
37.Reliance was also placed on the decision in Sarada Bai Vs.
Smt. Shakuntala Bai 9, wherein it was observed
" The learned counsel for the 1st respondent questions the
locus standi of the petitioners to file the present Civil Revision
Petition and submits that they cannot invoke Art. 227 of the
Constitution for setting aside the impugned orders dated 6-12-
1989 and 7-3-1990. He submits that they are not parties to the
suit O.S.No. 1932 of 1985 or to E.P.No. 3 of 1988 and that
they are not in any way affected by the impugned orders and
therefore cannot question the impugned orders under Art. 227
of the Constitution. I do not agree. Whether the house of the
1st petitioner bearing No. 21-2-131/7 to 9 is opposite to the
suit premises of the 1st respondent bearing No.21-2-142/1 to 4
or not, it cannot be disputed that the petitioners are neighbours
to the the suit premises and they are in close proximity to the
suit premises. In the reply affidavit filed by the 1st petitioner,
she states that her house is situated to the west of the suit
premises with only a road of about 12 feet width in between.
She complains that the original width of the said road was 18
feet 9 inches but it was narrowed down on account of the

553
encroachments made by the 1st respondent. Some of the
petitioners along with certain others also filed O.S.No.2333 of
1985 before the Vth Assistant Judge, City Civil Court,
Hyderabad questioning the constructions being made by the
1st respondent in the suit premises and the same is pending.
The1st petitioner and another also filed O.S.No.979 of 1987
on the file of the IInd Assistant Judge, City Civil Court,
Hyderabad for a declaration that the 1st respondent was not
entitled to make constructions contrary to G.O.Rt. NO. 1835
dated 29-10-1984 granted by the 2nd respondent and the same
is also pending. The effect of the impugned orders in E.P.No.3
of 1988 and E.A.No.23 of 1990 is to regularize the
constructions made by the 1st respondent which are being
questioned by the petitioners. In their suits. It is their case that
the 1st respondent is relying on the impugned orders in the
said suits. Some of the petitioners also filed I.A.No.340 of
1985 to implead themselves as defendants in O.S.No.1932 of
1985 and it is the case of the petitioners that the said suit was
referred to Lok Adalath without notice to them even when the
said I.A. was pending and that a settlement was arrived at
behind their back. Therefore it cannot be said that they have
no locus standi".
38.Likewise in Om Prakash Gupta Vs. State of A.P.10 it was
observed at paras 9,19 and 20 by one of us ( G.Bikshapathy,J.

554
"The admitted facts are that the Petitioners 1 to 3 are the
residents in the same locality and neighbours of the 3rd
respondent. 4th petitioner is not related to the other petitioners.
However, he is interested in the prosecution of the case against
the 3rd respondent. It is not in dispute that the 3rd respondent
purchased the house bearing NO. 21-2-142/1 to 4 having a
total extent of 102 Square Yards. The Government issued
orders of relaxation from zoning regulations to enable the 3rd
respondent to construct the ground and first floors in
G.O.Rt.No.1835 dated 29-10-1984. In pursuance of the said
G.O., the 2nd respondent Municipal Corporation issued the
permit in Permit No. 61/51 dated 28-11-1984 with the
following conditions:-
1. Permission accorded does not bar the applications of
provisions of Urban Land (Ceiling and Regulation ) Act, 1976.
2. Permission is accorded as per plan without any
encroachments over Municipal or Government land.
3. As per G.O.(Rt) No. 1835 M.A., dated 29-10-1984 on
conditions that ; I. The party should not project Balcony
towards Northern and Western side. II. The party should not
disturb the privacy of the neighbour on opening of ventilation
or window and should produce N.O.C. of neighbour. III. The
petitioner should not propose further vertical expansion at any
time in future as per agreement executed.

555
From this permission, it is manifest that the 3rd respondent
had executed an agreement to the effect that she shall not
propose any vertical expansion in future. After obtaining the
permission from the Municipality, the 3rd respondent started
construction of the premises. However, it is the case of the
petitioners that the area falls under commercial zone. To
enable the 3rd respondent to construct the first floor, zoning
regulations were relaxed and permission was granted, but,
according to the petitioners, the 3rd respondent also raised
second floor construction and the 2nd respondent issued
notices under Sections 461, 452 and 636 of the Act, against
which the 3rd respondent filed O.S.56 of 1985 and obtained
status quo orders. This was subsequently numbered as
O.s.No.1932 of 1985 on the file of the II Assistant Judge, City
Civil Court, Hyderabad. It appears that the suit was referred to
Lok Adalat and it is understood to have been settled and in
accordance with the settlement the suit ended in compromise
decree dated 24-2-1986. It is necessary to extract the relevant
portion on G.O.Rt.No.1835, Housing Municipal
Administration and Urban Development Department, dated
29-10-1984. It reads
Under Regulation 12 of the Zoning Regulations 1981, the
Government hereby relax the provisions of Regulations 9-2-1,
10 and 6-1-2 of the said regulations to the extent indicated
below in favour of Smt. Shakuntala for change of roof of the

556
ground floor and construction of first floor in P.No.21-2-
142/1-4 at Gulzar House.
Z.R.9-2-1(i) To the full extent of 10'-00" towards Northern
sides for ground and first floor.
ii) To the full extent of 10'-00 towards Eastern side for ground
and first floor.
iv) To the full extent of 5'-00" towards Southern side.
10.Coverage: To the full extent.
6-1-2: To allow residential building in Commercial use Zone.
2. The relaxation in Para (1) above is subject to the following
conditions: a) The petitioner should not project balconies
towards Western and Northern side.
b) The petitioner should not disturb the privacy of the
neighbours on Eastern and Southern sides by way of opening
of ventilations or windows and should produce 'No Objection
Certificate' from them.
c) The petitioner should not propose further vertical expansion
at any time in future.
4. The Special Officer, Municipal Corporation of Hyderabad
is requested to take necessary action accordingly and issue a
building permit to the petitioner. In terms of the settlement,
the suit was decreed on 24-2-1986 in the following terms:-
1. That the plaintiffs shall apply to the defendant Municipal
Corporation of Hyderabad within three months from the date
of decree for regularization of the suit constructions by

557
levying compounding fee with requisite number of plans
showing the unauthorized construction/ deviations and
thereupon the defendant Municipal Corporation of Hyderabad
shall regularize the construction by compounding the offence
within three months from the date of submission of plans.
2. That the Plaintiff shall pay the compounding fee, permit fee,
property tax arrears up to date and also betterment charges, if
not already paid, within the time fixed by the Municipal
Corporation of Hyderabad. This compounding shall be
without prejudice to third party's right including the Municipal
properties and the scheme of road widening.
3. That the Plaintiff shall not make any further construction in
anticipation of compounding without specific permission of
the Municipal Corporation of Hyderabad.
It appears that the 3rd respondent contrary to the terms of the
decree in O.S.No.1932 of 1985 started constructing second
floor and filed E.P.No.57 of 1986 in the suit for regularization
of all unauthorized constructions including the second floor.
The learned II Assistant Judge dismissed the said E.P. on 5-
10-1987 holding that the 3rd respondent was not entitled for
execution of the decree in view of the unauthorized
constructions including that of the second floor and
conversion of the use of the premises from domestic to
commercial, and also on the ground that she had not paid the
property tax arrears up to date. However, the 3rd respondent

558
again filed E.P.No.3 of 1988 for the execution of the decree
dated 24-2-1986 and the same was allowed by the Civil Court
on 6-12-1989.
Admittedly, the 3rd respondent has committed number of
violations. Even though the suit was filed and decree was
obtained through the intervention of Lok Adalat, she did not
even comply with the conditions mentioned in the decree.
There was a clear condition in the decree that the 3rd
respondent shall not make any further construction in
anticipation of compounding without specific permission of
the Municipal Corporation of Hyderabad. But, the 3rd
respondent giving a complete go bye to the judgment and
decree dated 24-2-1986 constructed first floor and
subsequently third floor also. Though the Government issued
G.O.Ms. No.87 dated 12-2-1992, it has to be seen whether the
conditions have been complied with by the 3rd respondent.
Even in the initial exemption granted by the Government, it
was made clear that she shall not project balconies towards
Western and Northern side and that the 3rd respondent shall
not disturb the privacy of the neighbours. The most important
condition is that the 3rd respondent should not propose further
vertical expansion at any time in future and to this extent, the
3rd respondent has also executed an agreement. When those
are the conditions and when those conditions have not been
fulfilled, the 3rd respondent is not entitled to seek any sanction

559
from the Municipality. Having committed before the
Municipality that she shall not propose further vertical
expansion, it is most unreasonable on her part to construct
second and third floors and then make an application to the
authorities for grant of permission and having waited for the
expiry of statutory period to commence the construction is
highly objectionable. Further grave irregularity that was
committed by the 3rd respondent is that taking advantage of
G.O.Ms.No.87 she filed an application for regularisation of
unauthorized constructions. The Municipal Corporation of
Hyderabad did not obviously bother to correlate the permit
sanctioned earlier and regularized the constructions in a rather
routine way. Had the Municipality perused the earlier
sanction, they could have realized that second and third floor
construction is not permissible as the 3rd respondent herself
gave an agreement that she shall not propose second and third
floors in future. To set at naught all these irregularities, the3rd
respondent had withdrawn the civil proceedings pending
before the various courts including the Writ Petition before
this Court on the sanction having been granted on 21- 11-1992
but yet the question remains whether the entire construction is
in accordance with law. There are no disputed facts in the
instant case. The 3rd respondent has admittedly purchased the
premises having 102 Square Yards and she is bound to make
construction only within the said area in accordance with the

560
rules and the sanction granted by the Municipal Corporation of
Hyderabad. Even according to the counter of the 2nd
respondent Commissioner, it is now made clear that even the
ground and first floors of the house have not been regularized
as the conditions mentioned in the G.O issued by the
Government relaxing the zoning regulations have not been
fulfilled. When such is the situation, the regularization of 2nd
and 3rd floors cannot be said to be valid. As already observed
by me the Corporation has not acted diligently. Regularisation
of irregular constructions cannot be extended to encroachment
either in Government land or other's land. One cannot
encroach another's land and construct as he wishes and make
application for regularization under G.O.Ms.No.87. It can only
be done within the permissible limits of law. Under these
circumstances, it has to be necessarily held that the entire
construction is without any valid permission as on date. The
Commissioner of Municipality has categorically stated that
there is an encroachment on the public road and that the
balconies and other constructions were made in gross
violations of the sanction issued by the authorities in Permit
No. 61/51 dated 28-11-1984. Accordingly, the latter Permit
No. 405/66 dated 21-11-1992 is declared as illegal and invalid.
The ground reality as on today is that the 3rd respondent has
constructed the entire premises with ground plus three floors
and admittedly the entire construction is not backed by any

561
valid permission. Even the very vertical construction of
second and third floors is contrary to the commitment given
by the 3rd respondent herself. Be that as it may since the
constructions have already come up the only course left is to
how best the construction should be regularized. The 3rd
respondent who has taken the law in her hands cannot invoke
the sympathy from this Court, more especially when she had
constructed the second and third floors knowing fully well that
she is not entitled to in the wake of her commitment. The
public passage existing on the premises is also a narrow
passage and the 3rd respondent has again encroached the
passage and constructed the house, number of balconies
projections are constructed and thereby encroaching on the
right of privacy of the neighbours. The construction of the
building illegally and contrary to the law and the conditions
imposed by the authorities pose serious threat to the
neighbours' right and also a threat to public health. The
transgression of building laws by the persons is an act of
aggression on the rights of society. The Government was
cautious enough in granting relaxation in 1984 itself by stating
that the 3rd respondent shall not propose any vertical
construction in future, but yet the 3rd respondent in gross
violation of the said permit started construction. Though it is
the case of the 3rd respondent that she has constructed on 102
square yards, it is now confirmed that the 3rd respondent has

562
constructed on more than 102 square yards by encroaching
either the Government land or other's land. It would not be
open for the 3rd respondent to contend that even if she had
encroached others land, so long as there is no objection from
them, it would not be open for this Court to hold that the 3rd
respondent is an encroacher. This contention cannot be
accepted inasmuch as the 3rd respondent is bound to confine
the constructions within the area of 102 square yards only.
Simply because the neighbour for various reasons may not be
staying in that place and the place was kept vacant, it does not
mean that she can take undue advantage of the absence of the
neighbour and make constructions as she likes. When the
permission was specifically granted for construction over 102
square yards, it must be constructed only on that land and it
cannot be extended to any other place, either on the public
place or on the place of others. Any departure from the permit
sanctioned by the Municipality should be treated as having
deleterious effect on the health and well being of not only the
neighbours but also the public who have a right to use the
lane. The tendency of raising unlawful constructions and
unauthorised constructions/ encroachments in the twin cities
are required to be dealt with by firm hands and such unlawful
constructions are against public interest and hazardous to the
safety of occupiers and residents of neighbouring houses."

563
39.In Kamalamma Vs. Subba Rao11 LPA 117 & 147 of 1969
dated 27-6-1972, while dealing with Section 444 of
Hyderabad Municipal Corporation Act and suit by adjacent
owner against neighbour and Corporation, Sri S.Obul Reddy
Justice and Sri G.Venkataramana Sastry Justice observed:
"Held Per Obul Reddi, J.: The action is misconceived. The Act
does not confer any rights, express or implied, against
neighbours who proposes to construct buildings in breach of
the building rules. Under Chapter XII of the Act the
Legislature has not intended to vest in a private individual also
the right to have the building of a neighbour pulled down
merely for the reason that there is some deviation from the
sanctioned plan in the construction of the buildings. The fact
that free passage of light and air to the adjacent building is
diminished by way of another building coming up by its side
will not necessarily lead to the inference that it is a matter
affecting the general public. Chapter XII of the Act nowhere
gives an indication that an adjacent owner of a building has an
implied right of action against his neighbour, who has
constructed a building in contravention of the provisions of the
Act and the rules made there under. It is for the adjacent
owner if he feels that there is any damage or injury to his
amenities either in the matter of free flow of air and light or
sanction for the reason that the plans of the proposed building
of the neighbour are not in accordance with the Municipal

564
laws, to move the High Court and obtain a writ of Mandamus
against the Corporation to observe the Municipal Laws in the
matter of sanctioning building plans for consideration. The
fact that, in the instant case, the Corporation, in fact, acted
upon his representations and directed demolition of the
constructions that were coming up is not a ground for
approaching the Court to obtain mandatory or perpetual
injunction even if it be against the Corporation, after the
building was constructed. In the instant case the Corporation,
though proposed to take action against the defendants 1 and 2
for breach or violation of the building rules in constructing a
new building, however eventually compromised its position
with them accepting a penalty or compounding fee thus
regularizing an irregular act of defendants 1 and 2. The
Corporation thereby lost its right under the provisions of the
Act to take any action thereafter against the defendants 1 and 2
and when the Corporation had lost its right by regularizing
what was irregular the plaintiff cannot ask any relief against
the Corporation for pulling down that portion of the building
constructed without leaving a space of 3', much less against
defendants 1 and 2.
Per Venkatarama Sastry J: There is no express provision in the
Act imposing any duty enforceable by an aggrieved
individual. In such a situation, an individual cannot sue for a
breach of statutory duty, unless two conditions are satisfied

565
viz.(1) unless, the statute imposes a duty enforceable by him
and (2) unless the statute imposes a public duty. In this case
the statute imposes a public duty and not a duty enforceable by
an aggrieved individual. It is not open to the Court to issue any
mandatory injunction which would interfere with the right of
the corporation either to condone the offence or compound the
offence when the statute permits it".
40.Reliance also was placed on Divyanagar Plot Owners
Association, Kachwanisingaram Vs. Government of Andhra
Pradesh12, a judgment delivered by one of us (the Hon'ble Sri
Justice G.Bikshapathy). Reliance was also placed on Friends
Colony Development Committee Vs. State of Orissa13 where
in illegal constructions under Orissa Development Authority
1982 had been dealt with by the Apex Court. At Paras 24,25
and 26 Apex Court held ;
" Structural and lot-area regulations authorize the municipal
authorities to regulate and restrict the height, number of stories
and other structures; the percentage of a plot that may be
occupied; the size of yards, courts, and open spaces, the
density of population; and the location and use of buildings
and structures. All these have in view and do achieve the
larger purpose of the public health, safety or general welfare.
So are front setback provisions, average alignments and
structural alterations. Any violation of zoning and regulation
laws takes the toll in terms of public welfare and convenience

566
being sacrificed apart from the risk, inconvenience and
hardship which is posed to the occupants of the building. (For
a detailed discussion reference may be had to the chapter on
Zoning and Planning in American Jurisprudence. 2d. Vol. 82).
Though the municipal laws permit deviations from sanctioned
constructions being regularized by compounding but that is by
way of exception. Unfortunately, the exception, with the lapse
of time and frequent exercise of the discretionary power
conferred by such exception, has become the rule. Only such
deviations deserve to be condoned as are bona fide or are
attributable to some misunderstanding or are such deviations
as where the benefit gained by demolition would be far less
than the disadvantage suffered. Other than these, deliberate
deviations do not deserve to be condoned and compounded.
Compounding of deviations ought to be kept at a bare
minimum. The cases of professional builders stand on a
different footing from an individual constructing his own
building. A professional builder is supposed to understand the
laws better and deviations by such builders can safely be
assumed to be deliberate and done with the intention of
earning profits and hence deserve to be dealt with sternly so as
to act as a deterrent for future. It is common knowledge that
the builders enter into under hand dealings. Be that as it may,
the State Governments should think of levying heavy penalties
on such builders and there from develop a welfare fund which

567
can be utilized for compensating and rehabilitating such
innocent or unwary buyers who are displaced on account of
demolition of illegal constructions.
The application for compounding the deviations made by the
builders should always be dealt with at a higher level by
multimembered High Powered Committee so that the builders
cannot manipulate. The officials who have connived at
unauthorized or illegal constructions should not be spared. IN
developing cities the strength of staff which is supposed to
keep a watch on building activities should be suitably
increased in the interest of constant and vigilant watch on
illegal or unauthorized constructions."
41.Reliance was also placed on V.M.Kurian Vs. State of
Kerala.14 in Saddi Narasimha Reddi Vs. Commissioner
Municipal Corporation of Hyderabad15, in Commssioner of
Police, Bombay Vs Gordhandas Bhanji.16, relating to the
aspect of demolition and the guidelines in relation thereto.
Reliance was also placed on a decision of 3 ACES, a
partnership firm Vs. Municipal Corporation of Hyderabad17..
42.Submissions at length were made relating to the aspect of
Public Interest Litigation and reliance was placed on Dattaraj
Nathuji Thaware Vs. State of Maharashtra18. It is not in
controversy that G.O.Ms. No. 33 was issued as a policy
measure and in the light of Section 59 of the A.P. Urban
Development Authorities Act. There cannot be any doubt that

568
the Government has power to cancel G.O.Ms. No. 33 and the
same is not arbitrary or it cannot be said that the same is in
violation of Articles 14 and 21 of the Constitution of India.
Apart from this aspect of the matter, this G.O. was issued only
as a policy measure keeping in view the larger interest of the
public. In the order of cancellation, none of the grounds which
have been canvassed by the writ petitioner had been referred
to by the Urban Development Authority. PIL cannot be
stretched too far equally concept of judicial activism. The
Courts while exercising judicial review can exercise the same
within its para meters and limitations. There is some
controversy whether it is Public Interest Litigation or not. In
fact, one of us (the Hon'ble Sri Justice P.S.Narayana) in the
commentary on "Public Interest Litigation" at page 15 while
dealing with the aspects to be considered, had commented as
follows:
1. "While deciding matters concerned with "Public interest
litigation", the Courts are expected to act with care and
caution;
2. The Courts are bound to come to the rescue of weaker
sections, downtrodden of the society where the grievances
concerned with such sections of society are brought to the
notice of the Court by way of "Public Interest Litigation".

569
3. "Public Interest Litigation" is not in the nature of "adversary
litigation' but it is a challenge to Government and officers to
make the basic human rights meaningful.
4. Courts must be careful to see that under the guise of
redressing a 'public grievance', they should not encroach upon
the sphere reserved by the Constitution to the executive and
the Legislature.
5. Courts should not give scope to any one to indulge in
reckless allegations under the guise of "public interest
litigation".
6. Courts have to see whether the persons moving the Court
have sufficient interest and whether there is 'public injury' and
whether the act is a "bona fide" one.
7. Even in the domain of 'Public interest litigation", a third
party will not be welcome to question statutory orders relating
to property.
8. Courts must be slow and also should act carefully while
dealing with "political questions' by way of 'public interest
litigation'.
9. Courts should be reluctant to decide matters involving pure
"political questions'.
10. Courts before dealing with such questions should carefully
scrutinize whether such "political questions also involve the
determination of any 'legal' or 'constitutional right' or
obligation.

570
11. Courts must be very vigilant in deciding such matters since
a clear demarcation in such matters into the categories
specified in (9) and (10) may not be always possible.
12. Courts should be satisfied that the 'Public interest litigation
is a 'bona fide' litigation and not a 'mala fide' one."
43. Initiating action ventilating the grievance of private
interests under the guise of public interest cannot be permitted.
A specific stand was taken in the counter affidavit filed by
respondents No. 3 to 5 that because of the private dispute
between the parties, the writ petitioner had resorted to file this
litigation. No doubt if bona fide public would be affected by
violation of building laws, Litigation can be maintained in
public interest, but not otherwise. In Dattaraj Nathuji
Thaware's case the Apex Court observed in paras 11,12 and 13
as follows.
". It is depressing to note that on account of such trumpery
proceedings initiated before the Courts, innumerable days are
wasted, which time otherwise could have been spent for the
disposal of cases of the genuine litigants. Though we spare no
efforts in fostering and developing the laudable concept of PIL
and extending our long arm of sympathy to the poor, the
ignorant, the oppressed and the needy whose fundamental
rights are infringed and violated and whose grievances go
unnoticed, unrepresented and unheard; yet we cannot avoid
but express our opinion that while genuine litigants with

571
legitimate grievances relating to civil matters involving
properties worth hundreds of millions of rupees and criminal
cases in which persons sentenced to death facing gallows
under untold agony and persons sentenced to life
imprisonment and kept in incarceration for long years persons
suffering from undue delay in service matters - Government or
private, persons awaiting the disposal of cases wherein huge
amounts of public revenue or unauthorized collection of tax
amounts are locked up, detenu expecting their release from the
detention orders etc., etc., are all standing in a long serpentine
queue for years with the fond hope of getting into the Courts
and having their grievances redressed, the busy bodies,
meddlesome interlopers, wayfarers or officious interveners
having absolutely no public interest except for personal gain
or private profit either of themselves or as a proxy of others or
for any other extraneous motivation or for glare of publicity
break the queue muffing their faces by wearing the mask of
public interest litigation and get into the Courts by filing
vexatious and frivolous petitions and thus criminally waste the
valuable time of the Courts and as a result of which the queue
standing outside the doors of the Courts never moves, which
piquant situation creates frustration in the minds of the
genuine litigants and resultantly they loose faith in the
administration of our judicial system.

572
.Public interest litigation is a weapon which has to be used
with great care and circumspection and the judiciary has to be
extremely careful to see that behind the beautiful veil of public
interest an ugly private malice, vested interest and or publicity
seeking is not lurking. It is to be used as an effective weapon
in the armory of law for delivering social justice to the
citizens. The attractive brand name of public interest litigation
should not be used for suspicious products of mischief. It
should be aimed at redressal of genuine public wrong or pubic
injury and not publicity oriented or founded on personal
vendetta. As indicated above, Court must be careful to see that
a body of persons or member of public, who approaches the
Court is acting bona fide and not for personal gain or private
motive or political motivation or other oblique considerations.
The Court must not allow its process to be abused for oblique
considerations by masked phantoms who monitor at times
from behind. Some persons with vested interest indulge in the
pastime of meddling with judicial process either by force of
habit or from improper motives, and try to bargain for a good
deal as well to enrich themselves. Often they are actuated by a
desire to win notoriety or cheap popularity. The petitions of
such busy bodies deserve to be thrown out by rejection at the
threshold, and in appropriate cases with exemplary costs.

573
The Council for Public Interest Law set up by the Ford
Foundation in USA defined the 'Public interest litigation' in its
report of Public Interest Law, USA, 1976 as follows:
"Public Interest Law is the name that has recently been given
to efforts provide legal representation to previously
unrepresented groups and interests. Such efforts have been
under taken in the recognition that ordinary market place for
legal services fails to provide such services to significant
segments of the population and to significant interests. Such
groups and interests include the proper environmentalists,
consumers racial and ethnic minorities and others".
44.In the light of G.O.Ms. No.33 when the plan had been
approved, the same cannot be cancelled at any rate.
Cancellation without notice, apart from the grounds specified
in the cancellation are totally untenable. It is no doubt true the
neighbour has no locus standi to maintain the action in relation
to contravention of any laws, provided
i)such contravention would affect his legal rights and not
otherwise. ii) Every deviation, minor or minute, cannot pave
way to the cancellation of building permission.
iii) While cancelling such permission principles of natural
justice may have to be adhered to
iv) Competent Authorities may exercise discretion at the time
of cancellation and such discretion should be exercised in
accordance with law and not in an arbitrary or capricious way.

574
45.Authorities are always having liberty to see that the builder
adheres and proceeds with the construction in accordance with
the sanctioned plan and any violation thereof can be rectified
in accordance with law. Deviations, unconcerned with
infraction of rights of neighbour, may be complained of to the
Competent Authorities and the Competent Authorities may
have to take a decision to proceed with the same in accordance
with law. Neighbours rights cannot be stretched too far so as
to affect the rights of the owners of the property. It is needless
to say that the builders, neighbours and the competent
authorities under relevant statute may have to act within their
para meters as per law, but not beyond thereto.
46.In the light of the aforesaid discussion, it is needless to say
that the impugned order of cancellation questioned in Writ
Petition No. 22354 of 2004 cannot be sustained. But, however,
it is made clear that the competent authorities are at liberty to
proceed with in accordance with law to see that the violations
or contraventions to the sanctioned Building Plan are rectified
and the construction be proceeded only in accordance with the
sanctioned plan.
47.In the light of the said safeguards available to the writ
petitioner, the writ petitioner cannot complain of several other
aspects which are more concerned with the Urban
development Authority vis--vis the builder. Inasmuch as the
rights of the neighbour are limited only to the extent of the

575
neighbour's right being affected by such contravention, if any,
the same cannot be made a ground for cancelling the
permission, inasmuch as this Court is inclined to uphold the
validity of G.O.Ms.No.33. It is needless to say that the
respondents No.3 to 5-writ petitioners in W.P.22354 of 2004
are bound to succeed and accordingly Writ Petition No. 22354
of 2004 is hereby allowed. However, it is made clear that the
competent authorities are at liberty to initiate appropriate
action for the purpose of rectifying the contraventions if any in
the construction activity of Respondents No. 3 to 5 in Writ
Petition No. 15716 of 2004. Except giving the said liberty no
further relief can be granted in favour of the writ petitioner in
W.P.No.15716 of 2004 and accordingly W.P.No.15716 of
2004 is disposed of, in the light of the aforesaid directions.
48.In the light of the foregoing discussion, the parties do bear
their own costs.
?1 2002 (3) ALT 536 (D.B.)
2 AIR 1955 SC 549
3 2000(7)SCC 425
4 AIR 1997 SUPREME COURT 128
5 AIR 1998 SUPREME COURT 1703
6 (2000) 7 Supreme Court Cases 425
7 SCC 2004 (6) 588
8 AIR 1956 SC 110
9 AIR 1993 ANDHRA PRADESH 20

576
10 1997 (2) ALD 115
11 1972(2) APLJ (Short notes) 54
12 2000(4) ALD 625
13 AIR 2005 SC 1
14 AIR 2001 SC 1409
15 1981 (1) ALT 46
16 AIR 1952 SC 16
17 1994 (3) ALT 73 (F.B.)
18 2005(2) ALD 10 (SC)

577
Andhra High Court
Dr. V. Sundara Rao And Ors. vs Director, Town And
Country ... on 30 August, 2005
Bench: C Somayajulu
ORDER
C.Y. Somayajulu, J.
1. Questioning the permission given to the 4th respondent by
the 3rd respondent Municipality for construction of 24
apartments consisting of stilt and five floors, in a site
measuring 618.66 square yards in Kanchirajuvari Street,
Tanuku, petitioners filed this petition.
2. The case of the petitioners, in brief, is that they are all
residents of Kanchirajuvari Street, which is also known as
Babugari Street, and connects Rashtrapathi Road on the North
and Sthree Samajam Road on the South. The width of
Kanchirajuvari Street varies from 1'7'6" to 19'6", including the
open land and drainage channel constructed on the road
margins on its both sides. Respondents 1 to 3 refused
permission to M/s. B.S.R. Constructions to construct 30
apartments with stilt, ground and 4 floors in about 610 square
meters of site in Kanchirajuvari Street, opposite to the house
of the 1st petitioner on the ground of the road width being less
than the mandatory 40 feet. Though the width of the road is
not increased thereafter, respondents 1 and 3 seem to have

578
granted permission to the 4th respondent to construct a multi-
storied building in the Kanchirajuvari Street on the basis of a
report submitted by the second respondent relating to road
width, without taking into consideration the objections of the
residents of Kanchirajuvari Street. Since the apartments
proposed to be constructed by the 4th respondent would
violate the provisions of the A.P. Apartments (Promotion of
Construction and Ownership) Act, 1987 (hereinafter referred
to as 1987 Act) and the Rules made thereunder, and also the
provisions of the A.P. Fire Services Act, 1999 (hereinafter
referred to as 1999 Act) and the various G.Os., relating to set
backs, open spaces and fire safety regulations, permission
granted to the 4th respondent is liable to be set aside.
3. The allegations in the counter-affidavit of the first
respondent (filed on behalf of respondents 1 and 2), in brief,
are, the width of the Kanchirajuvari Street varies from place to
place and is not uniform, the minimum width being 18' and the
maximum width being 32'. With a view to reduce traffic
congestion, 3rd respondent-Municipality proposed to connect
Rastrapati Road and Sthree Samajam Road by widening the
Kanchirajuvari Street upto 40' and accordingly prepared a
Master Plan under Section 14(3) of A.P. Town Planning Act,
1920, for which the Government has given its approval vide
G.O. Ms. No. 480 M.A., dated 19-9-2000. It is true that
permission for construction of a multi-storied building was not

579
granted to M/s. B.S.R. Constructions due to insufficient road
width. Since the report of the second respondent, who made a
personal inspection of the area on 12-10-2004 in pursuance of
the application for construction of a multi-storied building
submitted by the 4th respondent, showed varying road width,
second respondent returned the application of 4th respondent
on 6-11-2004 for nonavailability of 9 meters width road, with
instructions to the 3rd respondent-Municipality to release
sanction only if 9 meters width road is physically available.
Only after the 3rd respondent-Municipality furnished
information that the existing road width in front of the site of
the 4th respondent is 9 meters, was the permission accorded to
the 4th respondent for construction of the apartments, in view
of the G.O. Ms. No. 422 M.A., dated 31-7-1998.
4. The allegations, in brief, in the counter-affidavit filed on
behalf of the 3rd respondent are, the width of Kanchirajuvari
Street, including drain on either side, varies from 17'6" to
19'6" but the width of that road from Sthree Samajam Road
upto Door No. 33-8-20 is uniformly 30'. Keeping in view the
narrowness of that road and the density of the vehicular traffic
plying thereon, a 40' wide road was proposed in the Master
Plan, and so whenever permissions for construction of new
buildings are sought in that road, owners are being asked to
handover the required width of site, free of cost, for
implementation of the Master Plan and for the proposed road

580
widening, as per G.O. Ms. No. 422 M.A., dated 31-7-1998.
Application submitted by M/s. B.S.R. Constructions was
returned due to insufficient road width. Permission sought by
the 4th respondent for construction of apartments in the site
bearing No. 33-8-20 was approved after getting clearance
from the first respondent because the same is in accordance
with the rules and regulations, including the road width.
5. On behalf of the 4th respondent, its Managing Partner filed
his counter-affidavit inter alia contending that 3rd respondent,
after obtaining approval from the 1st respondent, granted
permission to construct apartments to it as the existing road
width is 9.14 meters from Shree Samajam Road upto its site,
though the width of the remaining portion of the road, from
their site upto Rasthrapathi Road varies from 19' to 32', and
since Government approved the Master Plan in G.O. Ms. No.
480 M.A., dated 19-9-2000, for widening the Kanchirajuvari
Street upto a width of 40', with a condition that it should
handover 3 meters wide strip of its site abutting the road, to
the local authority. Only after obtaining a report from the 2nd
respondent that on physical verification it was found that the
width of the road is 30', and that the required site was handed
over to the 3rd respondent under a gift deed, permission to
construct was accorded to it. The width of the Kanchirajuvari
Street stood reduced only due to encroachments, which are not
being removed by the 3rd respondent. Rejection of the

581
application of M/s. B.S.R. Constructions for construction of a
multi-storied building has no relevance for considering its
application. The allegation that its proposed construction
would violate 1987 and 1999 Acts and the Rules made
thereunder is not true. Since huge amounts are invested for
purchase of the site and since foundation was already laid and
since advances from several willing purchasers of apartments
were taken, it would be put to great hardship if construction is
stayed and so the petition may be dismissed.
6. The main contention of the learned Counsel for petitioners
is that since the width of Kanchirajuvari Street is between
17'6" to 19'6" from the site of 4th respondent to Rashtrapathi
Road, petitioners and other residents of that street who are
residing near that narrow width of road would be put to any
amount of inconvenience and nuisance due to traffic
congestion etc. It is his contention that inasmuch as 4th
respondent did not also comply with the requirements of 1987
and 1999 Acts, it cannot be permitted to proceed with
construction of a multi-storied building in that street and so
respondents 1 to 3 granting permission to the 4th respondent
when they refused permission for construction of such type of
a building at a place which is a few yards away from the site
of the 4th respondent is highly irregular and improper. He
placed strong reliance on M.C. Mehta v. Union of India 2004
(1) SCC 571 where it is held that Municipality has

582
constitutional responsibility in respect of matters enumerated
in Schedule XII of the Constitution, on V.M. Kurian v. State
of Kerala, AIR 2001 SC 1409, arising under the Kerala
Municipalities Act, 1964, where it was held that rules relating
to restriction with regard to maximum height of the building
contained in the Kerala Buildings Rules, 1964 and the Kerala
Municipalities Act, 1964 are mandatory in nature and are
required to be complied with and that there cannot be any
relaxation of the rules which are mandatory in nature. He also
relied on Dr. C. Kulsum Reddy, State of A.P., (D.B.), in
support of his contention that unauthorized constructions
cannot be regularized. He also relied on Sarada Bai And
Others vs Smt. Shakuntala Bai And Another AIR 1993 AP 20
and Yaseen Khatoon v. Commissioner, Municipal Corporation
of Hyderabad 2005 (3) ALD 779, 2005 (4) ALT 252, in
support of his contention that a neighbour can question the
unauthorized constructions and prevent the same through
Court. He also relied on S. Narasimha Reddi v. Corporation of
Hyderabad, 1981 An.W.R. 166 and Friends Colony
Development Committee v. State of Orissa, (2004) 8 SCC
733, in support of his contention that unauthorized or illegal
constructions cannot be permitted by the municipalities. He
also relied on K. Ramadas Shenoy v. The Chief Officers,
Town Municipal Council, UDIPI, AIR 1974 SC 2177, where
it was held that inasmuch as illegal construction of a cinema

583
hall would materially affect to the residents in a residential
area, Municipal Authorities cannot grant permission for
construction of a cinema hall in a residential area. He also
relied on The Supreme Court Monitoring Committee v.
Mussoorie Dehradun Development Authority, 1997 (11) SCC
605, where the apex Court took judicial notice of the
unwillingness or inability of the Municipal Authorities all over
India to stop illegal constructions and contended that Courts
should come to the rescue of the residents of the area when the
local authority fails to discharge its statutory duties. According
to him, the partners of 4th respondent, in order to show that
the width of the road in front of its site is more, had changed
the course of the drainage channel and showed the area thus
annexed by them as a part of the road to mislead the
authorities, when the width of the Kanchirajuvari Street being
three meters bears testimony by the plaques put up by the
Municipality at both the ends of that road.
7. The contention of the learned Government Pleader,
appearing for respondents 1 and 2, is that since respondents 1
and 2 issued directions to the 3rd respondent to release the
permission only if all the mandatory requirements are satisfied
by the 4th respondent, they cannot be said to have committed
any irregularity.
8. The contention of the learned Standing Counsel for 3rd
respondent is that since fourth respondent complied with all

584
the requirements and had donated the requisite land and since
Kanchirajuvari Street is proposed to be widened to 40' as per
the Master Plan, 3rd respondent did not commit any
irregularity in according permission to the 4th respondent for
construction of the multi-storied building.
9. The main contention of the learned Counsel for 4th
respondent is that since this petition is filed only with a view
to harass the partners of 4th respondent, who invested huge
amounts into the project, and since the real intention of the
petitioners is to prevent any structure above the height of their
buildings coming up in Kanchirajuvari Street, this petition is
vitiated by mala fides and lack of bona fides, because the
width of the road in front of the proposed construction is more
than 30' and since an area of 22.38 square meters equivalent to
26.76 square yards was gifted by the fourth respondent to the
3rd respondent under a registered gift deed dated 11-11-2004
and since Kanchirajuvari Street would be widened to 40' as
per the Master Plan approved by the Government. It is his
contention that question whether 4th respondent complied
with the provisions of 1987 Act or 1999 Act and the Rules
made thereunder would be relevant only at the time of
completion of the building but not at this stage.
10. In reply, the contention of the learned Counsel for
petitioners is that as per Section 13 of 1999 Act construction
of a high raise building can be commenced only after

585
obtaining permission from the officials of the Fire Service
Department and since no such permission is produced, 4th
respondent, in any event, cannot proceed with the construction
of the building.
11. On being asked, the learned Counsel for 4th respondent
produced the sanctioned plan, which shows that the site of the
4th respondent, in which the construction is approved, is
bounded on the North by the house of G. Raja Rao (35.35
meters), on the East by High School ground (14.63.meters), on
the South by Amrutha Apartments (35.35 meters) and on the
West by road (14.63 meters). The total width of the road in
front of the site of the 4th respondent, Amrutha Apartments
and the house of G. Raja Rao is shown as 12.20 meters
(including 1.53 meters width area on both sides of the road,
described as 'M.P. widening', probably denoting Master Plan
widening) in that plan. Even from that plan it is clear that the
width of the road actually existing in front of the site of the 4th
respondent, is 9.14 meters. As per the approved plan the
height of the construction of the stilt is 2.50 meters and five
floors each of a height of 2.75 meters. Thus, excluding the
height of parapet wall on the terrace portion, the total height of
the proposed construction would be 16.85 meters. Copy of the
gift deed dated 11-11-2004 produced by the learned Counsel
for 4th respondent shows that a strip of 1.53 meters width and

586
14.63 meters length was handed over to the 3rd respondent by
the partners of the 4th respondent as a gift.
12. Admitted topographical sketch of the Kanchirajuvari
Street, with the existing buildings, is produced before me. As
per that sketch the width of Kanchirajuvari Street from Sthree
Samajam road upto the Northern boundary of the site of the
4th respondent is 30'. From the house of G. Raja Rao (shown
in the approved plan) which is adjacent to the site of the 4th
respondent on the North and which is shown as property
bearing No. 33-8-19 in the admitted sketch, the width of the
Kanchirajuvari Street upto Rashtrapathi Road varies from
20'5" to 19'. As per the said sketch the width of the road in
front of the house of the 1st petitioner is 31'1" and so it is clear
that the width of Kanchirajuvari Street is not uniformly of 30'
throughout, because it varies from 30' to 31'1; 20'5" to 22' and
22' to 19' at different places, though it is said to be of 30' width
from the Northern end of the 4th respondent's site upto Shree
Samajam Road on the South.
13. Clause 6.3 of the G.O. Ms .No. 422 M.A., dated 31-7-
1998, relied on by the learned Counsel for both sides, reads :
"Minimum abutting road width :--Group Housing shall be
permitted on 12.2 Mtrs. (40) wide roads. However Group
Housing shall also be permitted on 9 Mtrs wide road subject to
handing over of 3 Mtrs. Wide strip to the local authority on

587
free of cost subject to the condition that the remaining plot
shall be 335 Sq. Mtrs. or more."
'Group Housing' as per the Clause 6.1 of the said G.O. means
'development of buildings having five or more dwelling units
and common services on a given site or plots'. So, the
sanctioned plan of the 4th respondent clearly relates to 'Group
Housing'. Since the net area belonging to the 4th respondent,
available for construction as per the approved plan, is 494.79
square meters, condition relating to the plot being more than
335 square meters mentioned in the above Clause 6.3 is
satisfied by the 4th respondent, but the point is whether the
condition relating to the width of the road in that Clause is
satisfied or not.
14. The contention of the learned Counsel for the 4th
respondent is that since 4th respondent gifted a part of its land
to the 3rd respondent-Municipality and since the approved
Master Plan proposes widening of the Kanchirajuvari Street to
40', condition relating to the minimum width of the road
prescribed in Clause 6.3 extracted above is satisfied. The
contention of the learned Counsel for petitioners is that since it
is not known when the Master Plan would be implemented,
and since the owners of the flats that come up have a right to
use the road to go to Rashtrapathi Road and Shree Samajam
Road also and since the width of the road from the northern
boundary of the site of the 4th respondent upto Rashtrapathi

588
Road is less than 30', to be precise varies from 30' to 20'5",
20'5" to 22' and 22 to 19', there would be any amount of
inconvenience to the petitioners and the other house owners in
that street.
15. From a meaningful and a proper construction of Clause 6.3
extracted above, the width of the road in which Group
Housing i.e. multi-storied flats are to be constructed should be
9 meters or 30 feet from one end to the other end throughout,
and so it is not enough if the width of the road from the
proposed construction to one end of the road only is 9 meters.
In view thereof, I am unable to agree with the contention of
the leaned Counsel for 4th respondent that since the width of
the road in front of the 4th respondent's site towards South
upto Mahila Samajam road is uniformly 30' and above,
condition relating to road width mentioned in Clause 6.3. is
satisfied.
16. Fourth respondent gifted an area 22.38 meters i.e., 14.63
meters length X 1.53 meters width abutting the road to the 3rd
respondent, when the requirement as per the above extracted
Clause 6.3 is the applicant handing over of 3 meters wide strip
to the local authority. Since the width of the site gifted by the
4th respondent to the 3rd respondent is 1.53 meters only, it
cannot be said that 4th respondent complied with the condition
relating to gifting of the area by it mentioned in Clause 6.3
also. The contention of the learned Counsel for 4th respondent

589
that 4th respondent need gift only 1.5 meters wide site and the
owner opposite to the site of the 4th respondent will have to
gift 1.53 meters site cannot be accepted, because the owner of
the site opposite to the site of 4th respondent has no obligation
to gift any area to 3rd respondent-Municipality, that too to
facilitate the constructions to be made by the 4th respondent.
Only when the owner of the site opposite to the site of the 4th
respondent also wants to construct multi-storied flats would he
be under an obligation to handover 3 meters wide site to the
3rd respondent-Municipality, but he is under no obligation to
handover any site of his for the benefit of the 4th respondent,
when Clause 6.3 extracted above clearly requires the applicant
only gifting 3 meters wide site to the local authority.
17. The other contention of the learned Counsel for 4th
respondent relates to the approval of the Master Plan to widen
Kanchirajuvari Street to 40' and the liability of the owner of
the site opposite to the site of the 4th respondent to surrender a
portion of his land, or his land being acquired for
implementation of the Master Plan, and for that reason,
according to the learned Counsel, it would be enough if 4th
respondent gifts 1.53 meters wide site to the 3rd respondent. I
am unable to agree with the said contention for two reasons,
(i) if Master Plan is implemented and the road is made into 40'
wide road question of 4th respondent gifting any property does
not arise because Group Housing can be permitted on 40' wide

590
road, and (ii) as per Clause 6.3, persons intending to construct
Group Housing in a street of 30' width have to handover 3
meters wide strip to the local authority free of cost. Thus,
handing over 3 meters wide strip to the local authority free of
cost by the builder of 'Group Housing' would arise only if the
condition precedent of the entire road in front of the proposed
'Group Housing' being 9 meters i.e., about 30 yards in width.
So, if the width of the entire road is not 9 meters throughout,
even if the builder hands over 3 meters wide strip in front of
the building to be constructed free of cost to the local
authority, he cannot be granted permission to construct.
18. Since the width of Kanchirajuvari Street throughout is not
uniformly 9 meters and is far less than 9 meters towards
Rashtrapathi Roads side, and since Clause 6.3 above extracted
is not complied with in its entirety by the 4th respondent,
respondents 1 to 3 were in error in approving the plan of the
4th respondent.
19. The other contention relates to the 4th respondent not
obtaining required permissions under the 1999 Act. As per
Section 13 of 1999 Act (which came into force on 1-2-2001)
any person proposing to construct a high raise building or a
building to be used for any purpose other than residential
purpose, or a building proposed to be used for residential
purpose of more than 15 meters in height, such as Group
Housing, multi-storey flats, workup apartments, etc., shall

591
have to apply to the Director General or any member of the
service duly authorized by him in this behalf, before
submitting the building plans to the authority or officer
competent to approve the same under the relevant law for the
time being in force, for a No Objection Certificate along with
such fee as may be prescribed. Since the building proposed to
be constructed by the 4th respondent is of a height of 16.85
meters, provisions of Section 13 of 1999 Act have to be
complied with by the 4th respondent before its plan can be
sanctioned or approved by the 3rd respondent. Since no
material is placed on record to show that the said requirement
was complied with, 1 see no force in the contention of the
learned Counsel for the 4th respondent that a no objection
from the fire services authorities can be obtained
subsequently.
20. In view of my above findings, I feel it not necessary to go
into the other contentions raised by the learned Counsel for the
parties.
21. Hence, the petition is allowed. Rule Nisi is made absolute
and the 4th respondent is restrained from proceeding with the
construction of a multi-storied building in its site in the
Kanchirajuvari Street, and respondents 1 to 3 are directed to
see that no multi-storied building in Kanchirajuvari Street is
constructed till the requirement of Clause 6.3 of the G.O. Ms.
No. 422 M.A., dated 31-7-1998 and Section 13 of the A.P.

592
Fire Service Act, 1999, are satisfied. Parties are directed to
bear their own costs.

593
Andhra High Court
Pallavi Enclave Flat Owners ... vs State Of A.P., Municipal
... on 24 January, 2006
Bench: V Rao
ORDER
V.V.S. Rao, J.
1. Pallavi Enclave Flat Owners Welfare Association (the
Association, for brevity) and nineteen (19) of its members
filed the instant writ petition seeking a writ of Mandamus
declaring the orders of the State of Andhra Pradesh, the first
respondent herein - in G.O.Rt.No. 706, dated 17-6-1995 as
illegal and arbitrary, to set aside the same and consequently
direct respondents 2 and 3 -namely, Visakhapatnam Urban
Development Authority (VUDA) and Visakhapatnam
Municipal Corporation (VMC) to demolish illegal
constructions made by fourth respondent in the premises
known as Pallavi Enclave in Survey Nos.2/3, 44/3A, 3B, 44/4
and 44/5 of Dondaparthy Village, Visakhapatnam. The
petitioners also seek a direction to the fourth respondent to
surrender 763.84 Sq. metres of site and also the land covered
by 40 feet service road to enable VMC to lay said road. Be it
noted that by G.O.Rt.No.706, dated 17-6-1995 the first
respondent purporting to exercise the powers vested under
A.P. Urban Areas (Development) Act, 1975 (hereafter called,

594
Urban Development Act) relaxed Regulation 10(B)(ii) of
VUDA Zoning Regulations to an extent of 164.36 Sq.metres
so as to allow 184.36 Sq.metres as against permissible area of
20.00 Sq.metres for the construction of twelve (12) petty
shops in excess area of stilt floor area in favour of Sri K.
Subba Raju, the Managing Partner of M/s. Rama Raj
Enterprises, the fourth respondent herein.
2. Elaborate pleadings are on record. To resolve the
controversy, however, it is necessary only to notice the
admitted facts, duly pointing out the allegations, which are not
disputed or denied by the rival parties to the case. This is
because ultimately the entire case depends on the
interpretation of Section 59 of Urban Development Act,
Regulation 12 of Zonal Regulations of Hyderabad Urban
Development Authority, 1981 (HUDA Regulations, for
brevity) and Regulation 19 of Hyderabad Multi-Storied
Building Regulations, 1981 (MSB Regulations). Be it noted
that HUDA Regulations are applicable to VUDA also.
3. The fourth respondent is a partnership firm engaged in the
business of real estate development. The firm applied to VMC
seeking permission for construction of Multi-storied
residential apartment block in the premises admeasuring
2,508.03 Sq.mts at Dondaparthy village. As the area falls
within the limits of VUDA, the building plans submitted by
the fourth respondent were forwarded to VUDA. By

595
proceedings D.Dis.No. 1341/91-G3, dated 16-8-1991, VUDA
approved the plans restricting floor area ratio (FAR) to below
1:1.50. The request of fourth respondent for construction of 12
shops in the stilt floor area reserved for parking was rejected.
VUDA also directed to delete two dwelling units in third floor
besides imposing other conditions. There is no denial that in
the original plans, the entire stilt area was shown and
earmarked for parking. VUDA directed to maintain parking as
shown in the original plans and also directed the fourth
respondent to handover 40 feet service road to VMC. In
pursuance of an advertisement issued by fourth respondent in
December 1991, the petitioners 2 to 20 purchased residential
flats from the firm. The fourth respondent executed sale deeds
in favour of purchasers, in respect of proportionate area of
land on which apartments were being constructed.
4. On 27-11-1992, the fourth respondent made a
representation to first respondent through VMC requesting to
alter the conditions imposed by VUDA regarding demolition
of two apartments in the third floor and refusal for
construction of shop rooms in the stilt floor. The first
respondent, after considering the request of the fourth
respondent, issued orders in G.O.Rt.No.477 dated 17-4-1993
granting permission for construction of two dwelling units in
the third floor, but refused permission for construction of shop
rooms in the stilt floor. Be that as it is, the fourth respondent

596
constructed twelve shop rooms in the stilt area in anticipation
of favourable orders from the first respondent. Though VMC
directed the fourth respondent to submit revised plans as per
the orders in G.O.Rt.No.477 dated 17-4-1993, the same was
not done, but the fourth respondent completed construction of
flats. It is alleged that after the petitioners entered into
agreement for purchase of flats, the fourth respondent insisted
on their giving consent for using stilt area for construction of
shops threatening that the firm would not deliver the flats
purchased by them. Having paid entire sale consideration, the
petitioners had no other go, except to give consent letters to
the fourth respondent. The fourth respondent constructed
twelve shop rooms in the stilt area and a pent house on the
third floor without there being any permission from any
authority. These unauthorised and illegal constructions were
brought to the notice of the authorities. After Issuing notices
dated 21-9-1993, VMC demolished 12 shops in stilt floor.
5. The fourth respondent filed W.P. No. 14905 of 1993 and
obtained ad interim orders of stay of demolition. Though this
Court directed the fourth respondent not to make any further
constructions, the fourth respondent again constructed 12 shop
rooms on 06-10-1993 and this was also disclosed in the report
submitted by the Commissioner of VMC to this Court. The
fourth respondent again made another representation to the
first respondent seeking relaxation with regard to construction

597
of 12 shop rooms in the stilt area. The first respondent, issued
orders in G.O.Rt.No.706 dated 17-6-1995-relaxing Regulation
10(B)(ii) of Zonal Regulations. Apart from raising various
contentions, it is also the contention of the petitioners that the
State Government issued impugned order without applying its
mind to the situation and without authority of law.
6. The first respondent through its Deputy Director, Municipal
Administration, filed counter affidavit sustaining the
impugned Government Order. Reliance is placed on
Regulation 12 of Zonal Regulations, 1981 and Regulation 19
of MSB Regulations. It is stated that initially all the requests
received for relaxation/regularisation of the unauthorised
construction, were being placed before a Committee and
decision was taken in accordance with the recommendation of
the said Committee. In 1998, the Government took a policy
decision not to exercise power of relaxation and accordingly
issued new FAR policy and Housing Regulations in
G.Q.Ms.No. 422 dated 31-7-1978 and G.O.Ms.No. 423 of
even date. It is further stated that impugned G.O. was issued
after obtaining remarks from VMC, keeping in view that there
is sufficient parking space available in the stilt floor subject to
the condition that the fourth respondent should surrender
760.83 Sq.metres for 40 feet service road abutting N.H.5 in
favour of VMC. If the fourth respondent fails to comply with
the same, it shall be open to VMC to proceed against

598
unauthorised constructions made contrary to the sanctioned
plan. Even after lapse of six years, the fourth respondent has
not complied with the conditions imposed by the Government
and therefore, VMC has not granted any licences for carrying
on any trade or business in the 12 shops, which are kept vacant
till now.
7. VUDA has filed a separate counter affidavit stating that
building permission was granted restricting FAR to 1:1.5 and
for construction of residential flats with stilt floor exclusively
for parking. VUDA however was not aware of the deviations
made by the fourth respondent as the powers of VUDA were
delegated to VMC by orders of the Government vide
G.O.Ms.No. 502 dated 23-10-1991. It is categorically stated
that it is VMC, which has to implement the plans in view of
the delegation of powers of VUDA under Urban Development
Act.
8. VMC also has filed separate counter affidavit. It is stated
that Dondaparthy village where the land is situated was
included in VMC limits, that the plan submitted by the fourth
respondent for construction of stilt floor, ground floor + three
upper floors, was forwarded to VUDA on 05-6-1991, that
VUDA granted permission on 16-8-1991 specifically directing
the fourth respondent to handover 40 feet service road free of
cost to VMC and that the permission for construction of shops
in the stilt floor was refused. While submitting remarks to the

599
Government on the representation submitted by the fourth
respondent regarding construction of two residential flats on
third floor and for construction of 12 shops in the stilt floor,
VMC specifically did not make any recommendation for such
construction and that the Government issued orders in G.O.Rt.
No.477 granting exemption for construction of two residential
flats on the third floor subject to the condition that the fourth
respondent to surrender 760.83 Sq.metres of land for laying 40
feet service road abutting N.H.5. Pursuant to the orders of the
Government, VMC gave an endorsement to the fourth
respondent to surrender the site for laying service road. When
fourth respondent constructed 12 petty shops unauthorisedly,
they were demolished by VMC, but fourth respondent
reconstructed the shops subsequently after obtaining interim
orders from this Court. The 12 shops constructed by the fourth
respondent in the stilt floor contrary to the directions issued by
the Government in G.O.Rt.No.477 dated 17-4-1993. In view
of the impugned orders, the revised plan submitted by the
fourth respondent was forwarded to the Government and that
the third respondent is not in favour of allowing 12 petty shops
in the stilt floor.
9. The fourth respondent filed a counter affidavit through its
Managing Partner, K.Subba Raju. The case of the fourth
respondent is as follows. A plan was submitted to VMC.
When certain objections were raised, a revised plan was

600
submitted on 29-7-1991. The plans were forwarded to VUDA,
which accorded permission for construction of stilt floor +
three floors duly deleting two dwelling units in the third floor
and further imposing a condition that the service road should
be handed over to VMC. The fourth respondent was also
directed to pay a sum of Rs.1,11,720/-. Aggrieved by this, the
fourth respondent filed W.P.No. 12025 of 1991 and this Court
passed interim orders on 17-9-1991 directing release of the
plan immediately on condition of depositing the said amount.
VMC accordingly released plans calling upon the firm to
handover 40 feet service road free of cost. When the
Government revised permissible FAR to 1:2, fourth
respondent submitted an application on 27-11-1992 seeking
approval for construction of two flats on third floor, twelve
petty shops in the stilt floor. This representation was
forwarded by the VMC to the Government. Government
issued orders in G.O.Rt.No.477 dated 17-4-1993 relaxing
Zonal Regulations and permitting construction of two flats in
third floor. Thereafter, on 15-5-1993, VMC issued
endorsement calling upon the fourth respondent to comply
with the said condition. As no orders are passed on the
application of the fourth respondent, in accordance with
Section 433 of Hyderabad Municipal Corporations Act, 1955
(HMC Act, for brevity), the firm proceeded with construction
and completed the construction of two flats and petty shops as

601
per deemed approval under Section 437 of HMC Act. The
firm again filed W.P.No.14905 of 1993 when there was a
threat of demolition of the shops and two flats in the third
floor. This Court stayed demolition on 05-10-1993. In the
meanwhile, the first respondent issued impugned order
relaxing Regulation 10(B)(ii) of Zonal Regulations. On 01-7-
1997, W.P.No. 12025 of 1991 filed by the fourth respondent
was allowed by Division Bench of this Court holding that
leaving 40 feet service road free of cost does not arise and that
if the land is required, VUDA has to acquire the land paying
compensation to fourth respondent. It is further alleged by the
fourth respondent that all the flat owners while taking
possession gave letters to the firm that they are satisfied with
the space provided for parking, which is more than 640
Sq.metres as against 395 Sq.metres and that they have no
objection for the builder using open area northern side of the
stilt floor as per his discretion. Therefore, the petitioners are
estopped from filing the writ petition. The allegation that the
fourth respondent is constructing a pent house on the third
floor is denied. It is stated that only small room is constructed
in the third floor for providing accommodation to the
Supervisor of the flats.
10. The learned Counsel for the petitioners, Sri K.V.
Subrahmanya Narsu, submits that the Government of A.P. has
no jurisdiction to issue the impugned Government Order by

602
relaxing VUDA Zoning Regulations. He would further urge
that having noticed that parking for all the flat owners was
provided in the stilt floor of the building for which VMC
granted permission, Government of Andhra Pradesh earlier
rejected the request of the fourth respondent vide orders in
G.O.Rt.No.477, dated 17-04-1993 and there were no changed
circumstances warranting the issue of the impugned order. He
further submits that the fourth respondent has no right of his
own on the land on which the flats were constructed as the
title in the land was proportionately alienated in favour of
petitioners 2 to 20 as well as others and therefore the
Government could not have permitted the fourth respondent to
construct twelve petty shops on the land belonging to the flat
owners. He placed reliance on Judgment of this Court in
C.S.R. Estates v. H.U.D.A., which was affirmed by the
Division Bench of this Court in C. Shekar Reddy v.
C.S.R.Estate Flat Owners Welfare Association 2003 (3) ALT
413. The learned Counsel would urge that the stilt floor, which
is meant for parking of the vehicles, cannot be altered. Lastly,
he would urge that the exercise of power by the Government is
illegal and that VUDA Zoning Regulations do not empower
the Government to grant relaxation permitting the fourth
respondent to construct twelve petty shops in the stilt floor.
11. The learned Government Pleader for Municipal
Administration and the learned standing counsel for VMC

603
reiterated the submissions and contentions made in the counter
affidavit filed by the first respondent and the third respondent.
The learned standing counsel for VMC further submits that the
VMC has not granted any permission for commencing any
business and that the shops are kept vacant. He also submits
that once the shops were demolished after following the
procedure under HMC Act, but the fourth respondent
reconstructed the shops after obtaining status quo orders from
this Court. He also submits that VMC is not in favour of
construction of shops in stilt floor, which is meant for parking.
12. The learned Counsel for the fourth respondent, Sri
Raghavacharyulu, submits that Regulation 10(B) (ii) of
VUDA Zoning Regulations enable the Government to grant
relaxation. According to the learned Counsel, such power
vests in the Government by reason of Section 34 read with
Section 59 of Urban Development Act. Secondly, he would
urge that as per the original approved plan dated 16-08-1991
construction of residential flats in stilt floor leaving 260 square
metres for parking is permissible and therefore construction of
shops in the stilt floor is not illegal. He lastly submits that
petitioners 2 to 20 have given consent letters for constructions
of petty shops and therefore they are estopped from raising
objections for the same. In support of his contention that
contravention of the building plan, which is not prejudicial to
public interest, can be condoned, he placed reliance on the

604
decision of the Supreme Court in Rajatha Enterprises v. S.K.
Sharma AIR 1989 SC 860.
13. In the background of the case and in the light of the rival
submissions two points would arise for consideration: the first
point is whether the Government has any power to grant
relaxation in favour of fourth respondent enabling the
constructions of twelve petty shops in the stilt floor of the
building. The second point is whether the Government has
exercised the power validly in accordance with law. The two
points require consideration together. Before doing so, it is
necessary to notice the relevant provisions from the relevant
statutes.
14. The VMC was established under Section 3 of
Visakhapatnam Municipal Corporation Act, 1979 (VMC Act).
Section 7 of the VMC Act by reference incorporates HMC
Act, the Rules and Regulations made there under in VMC Act.
Therefore, HMC Building Bye laws are made applicable to
VMC. The HUDA and VUDA both were constituted under
Urban Development Act. HUDA in exercise of powers
conferred under Section 59 of the Urban Development Act,
with prior approval of Government of Andhra Pradesh,
promulgated Zoning Regulations of Bhagyanagar Urban
Development Authority Zoning Regulations, 1981 (HUDA
Zoning Regulations, for brevity). HUDA also made MSB
Regulations, 1981. VUDA by resolution No. 363, dated 13-

605
10-1998, made/ approved VUDA Zoning Regulations. These
Regulations were approved by the Government of Andhra
Pradesh in G.O.Ms. No.274, dated 23-05-1989 read with
G.O.Ms. No.440, dated 09-08-1989. The VUDA MSB
Regulations were also approved by the Government as
adopted by VUDA. In the counter affidavit filed by the first
respondent, a reference is made to Regulation 12 of HUDA
Zoning Regulations and Regulation 19 of MSB Regulations as
amended by G.O.Ms. No.39, Housing, Municipal
Administration & Urban Development Department, dated 21-
01-1982. These two provisions read as under.
Regulation 12 of Zoning Regulations
12. The Government may either suo-motu or on an application
exempt any proposal for development of any site, Sub-
division, layout from any of the provisions of these
regulations.
Regulation 19 of HUDA MSB Regulations
19. Power of Government to exempt
The Government may, on an application exempt any of the
provisions of these regulations and all except the regulations
No. 8, 10(ii) and (iii) and 11 subject to the following
limitations, which shall apply to all cases of buildings.
Sl.No. Plot area Extent of
relaxation
for
residential
buildings
Extent of
relaxation
for non-
residential
buildings
Extent of
relaxation
for other
buildings
or users

606
1. Less than
250 sq.mts.
No limit Upto 60% ---
2. Between
250 and
500 sq.mts.
Upto 50% Upto 40% ---
3. Above 500
sq. mts.
Upto 30% Upto 20% ---
4. For
religious
uses
--- --- Upto 60%
irrespective
of the area
of the plot
5. Parking
spaces for
residential
buildings
of flats
Upto 30%
6. Parking
spaces for
offices,
commercial
and other
non-
residential
buildings
Upto 20%
15. Insofar as Regulation 12 of HUDA Zoning Regulations is
concerned, the same confers power on the Government to
exempt any proposal from any of the provisions of the
Regulations. But Regulation 19 of HUDA MSB Regulations
restricts the power of exemption and lays down that
Regulation 8, 10 (ii) and (iii) and 11 cannot be exempted in
any case. Be it noted, Regulation 8 of MSB Regulations deals
with means of access and circulation. Regulation 12 deals with
parking spaces and Regulation 11 height of the buildings.
Insofar as Zoning Regulations and VUDA MSB Regulations
are concerned, there is no power vested in the Government to
relax the Regulations. The learned Government Pleader for

607
Municipal Administration and learned standing counsel for
VUDA, have not brought to the notice of this Court any
provision empowering the Government to relax VUDA
Zoning Regulations and VUDA MSB Regulations.
16. As per Regulation 16 of VUDA Zoning Regulations, the
land use can be primary residential, mixed residential,
commercial, light industrial and general industrial. As per
Regulation 16.10.a, in the primary residential zone, buildings
shall be permitted only for residence, hotels, dormitories,
schools, parks, playgrounds, taxi stands, motor-pumping
installations etc. Regulation 16.10.b is to the effect that certain
other activities/uses other than mentioned in 16.10.a, may be
permitted with special sanction of the authority. These uses
inter alia include petty shops dealing with daily essentials
including retail sale of provisions, soft drinks, cigarettes,
newspapers, tea stalls etc., subject to floor area not exceeding
20 square metres. Strong reliance is placed on this Regulation
by the learned Counsel for the fourth respondent to contend
that even in a primary residential zone, business shops can be
permitted by the authority.
17. In the light of the above discussion, this Court is of
considered opinion that under VUDA Zoning Regulations or
under VUDA MSB Regulations, there is no power vested in
the Government or authority to exempt any person from the
provisions of the Act, Reliance placed by the learned Counsel

608
on Sections 34 and 59 of the Urban Development Act is
misconceived. Section 34 requires every urban authority to
carry out the directions as may be issued by the Government
from time to time for efficient administration of said Act and
empowers the Government to inspect the office of the
authority. Section 59 confers the powers on the urban
authority to make regulations to carry out the purposes under
the Urban Development Act. Though Section 12 of the Urban
Development Act empowers the Government as well as the
urban authority to modify the Master Plan or Zonal
Development Plan, there is no specific power conferred on the
Government or authority to grant exemption to any person
from the provisions of the Act.
18. The impugned G.O.Rt.No.706, dated 17-06-1995, does not
refer to any provisions of any Act or any Regulation.
However, as noticed supra, the counter affidavit filed on
behalf of the first respondent refers to Regulation 12 of
HUDA Zoning Regulations and Regulation 19 of HUDA
MSB Regulations. Assuming that the fourth respondent was
granted exemption and permitted to construct petty shops in
the stilt floor under these Regulations, can it be said that the
first respondent exercised power properly and legally? Section
6 of the Urban Development Act requires the urban authority
to prepare a master plan for an urban area or group of urban
areas declared to be development area. Section 7 further

609
requires the urban authority to prepare Zonal development
plan for each of the zones into which the development area
may be divided and such Zonal development plan may contain
a site plan for development of the zone and show approximate
locations and extent of land uses for the purposes of housing
(residential), business (commercial), recreational and the like.
What are the purposes, for which construction will be allowed
in a delineated area or land in the Zonal development plan, is
contained in the Zonal Regulations. Regulation 6.1 of HUDA
Zonal Regulations visualizes VI zones for specific
development like residential, commercial etc. Regulation 6.1.2
provides that various building and occupancy uses to be
permitted in the respective zones would be as given in
Appendix C. In Appendix C of HUDA Regulations, C-1 deals
with purely residential zones - R1, whereas C-2 deals with
residential zone with shop lines at ground floor - R2. C.1.1
enumerates the uses and accessory uses which can be
permitted in buildings or premises meant for purely residential
zone. C-2 in Appendix C describes uses permissible in
residential zone with shop lines and lays down that a building
or premises with shop lines along a street in a residential zone
may be used for the purposes of, personal service
establishment, hat and shoe repair, professional service
offices, tailor shops, laundry shops, shops for goldsmiths, lock
smiths, watch repair, optical glass, musical instruments, flour

610
mills etc. The establishment of shops in the building for
residential purpose is, however, subject to condition that such
area should be with the shop line and all the goods offered for
sale shall not be kept in the passages. It further stipulates that
such shops should be abutting a street on which the shop line
is marked with access from the front. In so far as VUDA
Zoning Regulations are concerned, as per Regulation 16.10.a
in a primary residential zone only such things as enumerated
in 16.10.b can be permitted with special sanction of the
authority. In a residential zone, if somebody likes to use a
building for any of the purposes mentioned in 16.10.b, a
special permission is required from the urban authority. No
person can be exempted from using the land in residential
zone for non-residential purposes without special sanction of
the authority. Reading HUDA Regulations as well as VUDA
Regulations, it is not possible to accept the submission that
these Regulations permit the conversion of stilt floor into a
shopping complex by constructing 12 shop rooms. Stilt floor
as understood is area where the height of the roof is 8 feet,
which is meant for parking the vehicles. Therefore, no
construction is permissible in the parking area.
19. The learned Counsel for the petitioners and the learned
Counsel for the fourth respondent have taken this Court
through the necessary permissions as well as sanctioned
building plan. These would show that though the fourth

611
respondent initially proposed construction of shops in the area
earmarked as stilt floor whether or not it is more than the
required area, was meant only for parking. It is also mentioned
that under VUDA MSB Regulations (See Regulation 10)
every building is required to provide parking space and
parking facilities for the use of the occupants and of persons
visiting the premises within the site to the satisfaction of the
Commissioner of VMC and Executive Authority of VUDA.
Such parking facilities should conform to the standards
specified in Annexure IV. As per the said Annexure in a
residential complex with a dwelling unit with a floor area of
60 square metres to 80 square metres, one parking space for
every four dwelling units may be provided and in case the
floor area of each building unit is 80 to 100 square metres, the
builder has to provide one space for every two dwelling units.
The dimension of parking shall be 5 metres x 2.5 metres with
a minimum width of drive way of 3.5 metres and the number
of car spaces required will be calculated on 75% of the total
floor area in the building.
20. In this case, initially the fourth respondent submitted a
plan proposing to construct shops facing north. The entrance
of the main building is from the western side and therefore the
moment one enters the building one has to go to the parking
area through the portion where shops are constructed. VUDA
rightly rejected permission for construction of the shops in stilt

612
area because the entire stilt is intended for parking only.
Therefore, Regulation 16.10.b has no application for two
reasons. The said Regulation permits taking up of construction
for the uses other than residential uses and the same does not
permit the conversion of stilt parking in a residential complex
into a commercial area. Secondly, as per the building plan
sanctioned by VUDA, stilt floor was intended for parking only
and therefore shops cannot be constructed in the area, which
would amount to violation of Regulation 10 of VUDA MSB
Regulations.
21. Whether any construction is permissible in the area meant
for parking and whether parking area can be converted by the
builder into shopping area especially after parting with title by
executing sale deeds in favour of the flat owners? These
questions were considered by this Court with reference to the
Andhra Pradesh Apartments (Promotion of Construction and
Ownership) Act, 1987, (the Apartments Act, for brevity) in
C.S.R.Estates (1 supra). The order of HUDA granting
modification to the building was challenged in the said case.
The builder obtained permission for construction of stilt and
four floors and sold away 42 flats collectings amount of
Rs.20,000/- extra from each owner towards open parking in
the stilt. Sale deeds were also executed in favour of the flat
owners conveying the ownership in respect of proportionate
extent of land after taking possession of the flats, the owners

613
association constructed compound wall. Thereafter, the
builder approached HUDA seeking sanction for closed
parking in the stilt area, for conversion of four flats in the
ground floor for commercial use and to construct further floors
on the terrace. The same was sanctioned on 02-01-1998. The
builder then approached the civil Court and obtained ex parte
injunction and constructed closed mulgies in the stilt and
started constructing additional floor in the terrace besides
converting four flats in the ground floor for commercial
purpose. At that stage, the flat owners association filed writ
petition. It was contended before this Court that the builder is
not entitled to make any additions or alterations in a ground
floor meant for parking. This Court considered the
submissions in the light of the provisions in Apartments Act
and after referring to Sections 3(d), 4, 6 and 7 of the
Apartments Act, observed that, "whatever space is left for
parking in the stilt floor and whatever the space left in other
floors as per the plan, the same cannot be modified by the
builder". This Court further observed as under.
If it were to be said that builders can make use of the unsold
flats or any common areas in any way they like, it would lead
to clearly breach of provisions of this act and the very spirit of
the Act. By the impugned proceedings (amended plan) the
respondent No.3 is permitted now to put up an additional flats
over and above the building already constructed. He is

614
permitted to put up two flats in the fourth floor and two flats in
the fifth floor and he was also permitted to convert stilt floor
into four covered garages. This modified plan is consequently
contrary to Sections 4, 6 and 14 of the Act. It should be made
clear that if after selling some flats, if there remains some
more flats to be sold by the builder, such builder would be just
like any other co-owner, as if he has also purchased those flats
by himself. When once the first flat is purchased by any
person, for the first time, such purchaser and the builder
become common owners for all the amenities and facilities
that are provided or to be provided, only according to the plan
approved. As I have already stated above, if some more
construction is to be made according to the plan approved, he
could only complete the same and nothing more. The object of
the Act is to protect such poor and middle class flat owners as
against the builders, so as to see that the purchaser should
know what is the flat he has purchased and what are the
facilities in that apartment area. Suppose beautiful parks and
lakes are provided in the plan approved, for the purpose of
apartment, they vest with the apartment owner as a common
facilities as "deemed to be conveyed with the apartment" in
terms of Section 9(2) of the Act, even though such right or
interest is not specifically mentioned in the conveyance or in
the instrument. (emphasis supplied)

615
22. The decision of the learned single Judge in C.S.R.Estates
(1 supra) was confirmed by the Division bench in C.Shekar
Reddy (2 supra). Though the order of the learned single Judge
for demolition of the structures made pursuant to the
impugned proceedings was set aside giving directions to the
HUDA to issue notice to the flat owners before deciding the
matter.
23. At this stage, the submission of the fourth respondent on
the question of consent given by the flat owners need to be
considered. It is the case of the petitioners that all of them
were forced to give consent letters because the fourth
respondent threatened not to hand over flats if such consent
letters are not given. The learned Counsel for the petitioners
submits that when once the sale deed is executed by the
builder, every apartment owner shall be entitled to the
undivided interest in the common area and the same shall not
be altered without the consent of all the apartment owners
expressed in the declaration executed and registered. Reliance
is placed on Section 9 of the Apartments Act. There is force in
the submission of the learned Counsel for the petitioners. In
C.S.R.Estates (1 supra), the learned single Judge considered
this aspect of the matter. It was held therein:
If he has left more vacant space than what is permitted by
F.S.I/FAR., he has left as per the plan voluntarily. Assuming
for the sake of argument that there is a mistake, that mistake

616
becomes final, the moment the plan is approved. In this view
of the matter, it follows that now the builder cannot say that he
was seeking amendment of the original plan because in the
original plan balcony was also included in the F.S.I/F.A.R and
the same could not have been included and, therefore, to the
extent of area covered by balcony he was entitled to put up
further construction. If there is to be any modification to the
original building as per the plan, it shall be with the consent of
all the flat owners expressed in an amended declaration duly
executed and registered as provided in this Act. Therefore,
there cannot be any other mode of amending the plan, except
as per the amended declaration duly executed and registered.
In fact, under Section 14 of the Act, such declaration is made a
statutory declaration and under Section 14(b) it shall contain
the "description of the building stating the number of storeys
and basements, the number of apartments and the principal
materials of which it is or is to be constructed". Under Section
14(d), such declaration also shall consist description of the
common areas and facilities. Section 14(2) of the Act, further
directs that the declaration referred to under Section 14(1) may
be amended under such circumstances and only in such
manner as may be prescribed. In the instant case, it is not the
case of the respondents that the original declaration
contemplated under Section 4 read with Section 14 of the Act
was amended by duly executed and registered, as provided in

617
this Act. From this it follows that according to the approved
plan whatever space is left for car parking in the stilt floor and
whatever the space left for car parking in the stilt floor and
whatever the space left in other floors as per the plan, the same
cannot be modified at all. (emphasis supplied)
24. In this case, the fourth respondent has not placed before
this Court any amended declaration duly consented to by the
flat owners and duly registered altering the percentage of
undivided interest in each owner. Therefore, the consent
letters if any by the petitioners 2 to 20 do not bar the remedy
in these proceedings.
25. The learned Counsel for fourth respondent placed strong
reliance on M/s. Rajatha Enterprises(3 supra), in support of the
contention that the shop rooms constructed in the stilt do not
in any manner cause prejudice to the flat owners. The facts in
the said case may be noticed. M/s. Rajitha enterprises obtained
a lease of the premises in Bangalore from Government of
Karnataka for construction of shopping complex cum school
on the basis of licence granted by the Corporation of the City
of Bangalore. Permission granted by Corporation was
questioned in the High Court in a writ petition, which was
partly allowed on 18-07- 1986. When the Special Leave
Petition was pending before the Supreme Court, the
Commissioner directed the builder to reduce the height of the
building having total floor area of 30,415 square feet. In view

618
of this, the Special Leave Petition was disposed of giving
liberty to the builder to approach the High Court. The High
Court set aside the orders of the Commissioner to demolish
fifth floor but the Commissioner was given liberty to
compound deviation. However, the order of the Corporation
for demolition of sixth floor was upheld. Again the builder
filed the Special Leave Petition. It was contended that the
excess floor area constructed by the builder was negligible and
compoundable. The Supreme Court found that the actual
excess area in possession and enjoyment of the builder was
only 2,682 square feet, which is within the compoundable
limits. Therefore, the Supreme Court came to the conclusion
that in the absence of any detriment to public safety or
evidence of any public inconvenience and when there is no
evidence of dishonest or fraud, the illegal portion cannot be
demolished. This decision has no application to the case on
hand.
26. As already noticed hereinabove, construction of multi-
storeyed apartment blocks or group housing is now governed
by the Apartments Act. When once the builder sells away
flats, houses, he has nothing to do with the property. Even if
such builder keeps for himself a flat or two, his status would
be that of a co-owner and he cannot claim a priority right or
pre-emption right. The building laws are inflexible and
inexorable laws intended for development in the larger interest

619
of the present and future generation of people. If all the
violations in the constructions of buildings are condoned or
compounded, it would be mockery of the rule of law. Any
contravention of law in the construction of building must
entail in demolition as a rule and compounding the violation
must be rarest exception. In M.I. Builders Private Limited v.
Radhey Shyam Sahu 1999 AIR SCW 2619., dealing with this
aspect, the Supreme Court ruled.
High Court has directed dismantling of the whole project and
for restoration of the park to its original condition. This Court
in numerous decisions had held that no consideration should
be shown to the builder or any other person where
construction is unauthorised. This dicta is now almost
bordering rule of law. Stress was laid by the appellant and the
prospective allottees of the shops to exercise judicial
discretion in moulding the relief. Such discretion cannot be
exercised which encourages illegality or perpetuates an
illegality. Unauthorised construction, if it is illegal and cannot
be compounded, has to be demolished. There is no way out.
Judicial discretion cannot be guided by expediency. Courts are
not free from statutory fetters. Justice is to be rendered in
accordance with law. Judges are not entitled to exercise
discretion wearing robes of judicial discretion and pass orders
based solely on their personal predilections and peculiar
dispositions. Judicial discretion wherever it is required to be

620
exercised has to be in accordance with law and set legal
principles.
27. In a recent decision in Friends Colony Development
Committee v. State of Orissa, (2004) 8 SCC 733, the Supreme
Court while observing that, "violation of Zoning and
Regulation laws takes the toll in terms of public welfare and
convenience being sacrificed", laid down as under.
Though the municipal laws permit deviations from sanctioned
constructions being regularized by compounding but that is by
way of exception. Unfortunately, the exception, with the lapse
of time and frequent exercise of the discretionary power
conferred by such exception, has become the rule. Only such
deviations deserve to be condoned as are bona fide or are
attributable to some mis-understanding or are such deviations
as where the benefit gained by demolition would be far less
than the disadvantage suffered. Other than these, deliberate
deviations do not deserve to be condoned and compounded.
Compounding of deviations ought to be kept at a bare
minimum. The cases of professional builders stand on a
different footing from an individual constructing his own
building. A professional builder is supposed to understand the
laws better and deviations by such builders can safely be
assumed to be deliberate and done with the intention of
earning profits and hence deserve to be dealt with sternly so as

621
to act as a deterrent for future. It is common knowledge that
the builders enter into under hand dealings.
(emphasis supplied)
28. In view of the observations made by the Supreme Court in
M.I. Builders Pvt. Ltd, (4 supra) and Friends Colony
Development Committee (5 supra), the submission of the
learned Counsel for fourth respondent cannot be accepted. As
already observed above, fourth respondent's request for
construction of shops in the stilt floor was rejected by VUDA
as well as the first respondent in 1993. There was no reason
again in 1995 to exempt the fourth respondent from the
provisions of the Zoning Regulations. Secondly, there is no
provision in VUDA Zoning Regulations or VUDA MSB
Regulations, empowering the first respondent to grant
exemption. Thirdly, Regulation 16.10 of VUDA Zoning
Regulations promotes the use of land for non-residential
purposes with special sanction of the urban authority, which
itself refused such sanction and therefore the builder cannot be
permitted to raise constructions. Lastly, it is averred in the
counter affidavit of VMC as well as in the affidavit of
petitioners that though the shops were demolished by VMC,
the fourth respondent obtained interim orders from this Court
and reconstructed in October, 1993 and therefore this Court
can neither condone nor compound the contravention.

622
29. For the above reasons, writ petition is allowed to the extent
and a direction shall issue to Visakhapatnam Urban
Development Authority and Visakhapatnam Municipal
Corporation to take action for removal of the shops
constructed in the stilt floor of Pallavi Enclave in Survey
Nos.2/3, 44/3A, 3B, 44/4 and 44/5 of Dondaparthy Village,
Visakhapatnam, immediately. There shall, however, no order
as to costs.

623
Bombay High Court
Gladhurst Coop. Housing Society ... vs Dr. (Mrs) V.B.
Shah And Anr. on 5 May, 2006
Author: S Dharmadhikari
Bench: S Dharmadhikari
JUDGMENT
S.C. Dharmadhikari, J.
1. These matters are directed to be heard together as they
involve common question of law and fact. Accordingly, they
were heard together and being disposed of by this common
Judgment.
2. W.P.1812 of 1987 invokes this Court's jurisdiction under
Article 227 of Constitution of India to challenge a judgment
and order of Maharashtra State Coop. Appellate Court dated
19th February 1987 in Appeal No. 468 and 469 of 1986. A
copy of this judgment and order is annexed as Annexure 'K' to
the petition.
3. The first appeal is directed against a judgment and decree of
City Civil Court, in L.C. Suit No. 3005 of 1985. This
judgment and order is dated 24th April/2nd May 2002.
4. Petitioner in Writ Petition is also appellant in the first
appeal. The petitioner is appellant No. 9. It was original
defendant No. 5 in the above civil suit. It would be convenient

624
to refer to the facts in the first appeal for appreciating rival
contentions.
5. The above suit was filed by the original plaintiff (Appellant
Nos. 1 to 8) against M/s. D. Raheja and Company, Mr. B.M.
Shah and Dr. Mrs. Vibha B. Shah as also Municipal
Corporation and Gladhurst Cooperative Housing Society Ltd.
(hereinafter referred to as the Society). Prayer in the plaint is
that City Civil Court should issue a decree and order of
permanent injunction restraining defendants, their servants
and/or agents or any person or persons claiming by or under or
through them from undertaking, carrying out or proceeding
with the work of any changes in the original plan and designs
of the building and/or in the external appearance of elevation
and/or flat Nos. 1 and 2. In substance, the prayer is that the
Building Gladhurst situate at P.M. Road, Santacruz (W),
Mumbai 400 054 in which flat Nos. 1 and 2 are situate should
not be used for any purpose other than private housing. A
mandatory injunction is sought against defendants to the suit
to restore the said flats to their original condition and to
remove, alter or demolish the changes unauthorisedly effected
in the said flats. There is a prayer for mandatory order and
direction directing Municipal Corporation to revoke, cancel
and withdraw the permission, if any, granted to defendant
Nos. 2 and 3 for change of user of the said flats for any other
purpose than residential one.

625
6. Parties to the appeal shall be referred to by their original
nomenclature. The plaintiffs are purchasers of residential flats
in the building Gladhurst. By diverse agreements for sale
entered into by them with the first defendant builder, they
purchased flats for residential use and occupation. According
to them, the agreements are covered by the provisions of
Maharashtra Ownership Flats (Regulation of the permission of
construction, sell, management and transfer) Act, 1963 (for
short Ownership Flats Act.)
7. After referring to the agreement and more particularly
Clause 12 thereof, which provides that the flat holders shall
not use flats for any purpose other than residence, it is
contended that all purchasers agreed to purchase their
respective flats on solemn undertaking and on the basis that no
non residential user of any of the flats in the building will be
permissible. It was pointed out that:
The defendant Nos. 2 and 3 have agreed to purchase from 1st
defendant Flat Nos. 1 and 2 in the B Wing on the ground floor
of the said building. Around the end of March, 1985 the
plaintiff and other members of the said committee learnt that
the defendant Nos. 2 and 3 proposed to use the said flats
exclusively for a non-residential purpose by starting their
Nursing Home, Dispensary, polyclinic, etc. in the said
premises and proposed to carry out additions and alterations
within and outside the said flats in diverse ways. Thereupon,

626
the said Committee took up the matter with the 1st defendants
vide its letter dated 27th March 1985 and sought from them
clarifications and explanations on the said issue.
On 7th April 1985 a General Body meeting of the said flat
purchasers was held at which defendant Nos. 2 and 3 were
also present. At the said meeting, the issue of the proposed
change of use of the said flat No. 1 and 2 by defendant Nos. 1
and 2 was discussed, when defendant No. 2 in terms agreed
that he and his wife would not start a Nursing Home in the
said premises. However on 22nd April 1985 the defendant
Nos. 2 and 3 undertook and carried out various extensive
alterations and changes in the said flat such as removal of
partition walls, changing location and size of door and
windows in the said flat and/or closing the originally provided
doors and windows and opening new ones in place and stead
thereof. Not content with the said internal changes
unauthorisedly carried out by them, they proceeded to carry
out substantial changes in the structure of the said building so
as to destroy, damage or disturb the external elevation and
uniformity of the said building as enumerated below:
(i) In place of the windows as originally provided in the
eastern wall of the living room of Flat No. 2, the defendant
Nos. 2 and 3 provided an entrance door and a widow by
demolishing the said wall and shifting the position of the said
window. The alteration is in the structure of the building for

627
which none of the flat purchasers including the plaintiffs ever
consented.
(ii) A small window in the Eastern wall of the living room of
Flat No. 1 was removed and replaced by a far bigger window
by demolishing part of the said wall which resulted in the
change and alteration in the plans and specifications of the
said building.
(iii) Stilted portion marked by letter "C" on Exh. A to the
plaint constitutes common area not sold or saleable to any
individual flat purchaser. The defendant nos. 2 & 3
demolished the eastern wall of the said stilted portion and
fixed a door therein with a view to providing a direct access to
flat No. 1 from the open space, around the said property. In the
process the said defendants destroyed part of the garden in the
open space adjoining the said portion. This change is indicated
by letter "D" on Exh. A to the plaint and clearly constitutes
change and alterations in the said building.
(iv) In the southern wall of the open garage shown by letter E
on Exh. A the defendant Nos. 2 and 3 fixed a door so as to
include the said open garage in the said flat No. 1. The said
newly opened door is shown by letter E on the Exh. A.
Defendant Nos. 2 and 3 proposed to make use of the said open
garage meant exclusively for parking cars, as a waiting room
for the patients of defendant No. 3.

628
The defendant Nos. 2 and 3 hastened to carry out the said
work with utmost speed on a holiday with a view to for
stalling the action which the other flat purchasers or the
committee would take against them. They carried out the said
work without the consent of the committee or the other flat
purchasers and/or without regard to safety, security and/or
their comfort or convenience.
8. In the plaint, it is thereafter alleged that when the committee
sought clarification from first defendant, it denied having
permitted any change of user. They pointed out that the stilted
portion indicated by letter "C" at Exh. A to the plaint was not
sold by it to defendant Nos. 2 and 3. They assured the
Committee to look into the matter and suitably advice
defendant Nos. 2 and 3 to desist from using the flat for non
residential purpose without obtaining permission and consent
of all flat purchasers. The impression given, according to
plaintiffs, by defendant No. 1 is that consent with regard to the
changes also would be sought by the defendant Nos. 2 and 3.
The plaint proceeds to allege that defendant No. 1 indeed
talked with defendant Nos. 2 and 3 and advised them to stop
their activities. The work was stopped since 25th April 1985,
leaving the plaintiffs to believe that defendant Nos. 2 and 3
have realised their mistake. However, activities recommenced
and that is how the suit came to be filed claiming aforesaid
reliefs.

629
9. Reliance was placed in the plaint on the fact that the
activities have not been permitted by the ad-hoc committee of
society. The builder also having denied granting any
permission or approval, the activities are not in accordance
with law. That apart, Section 7(1) of the ownership Act does
not permit any alterations in the structure without prior
consent of the plaintiffs. The activities are also contrary to the
D.C. Rules then prevailing for the city. The plaint refers to
several rules and then proceeds to set out the nature of the
reliefs sought in the plaint.
10. It appears from the record that the first defendant, in
interlocutory proceedings in the suit, filed an affidavit and
took a specific stand that flat Nos. B-1 and B-2 on ground
floor of the building were purchased by defendant Nos. 2 and
3 on the terms and conditions contained in the agreement for
sale dated 10th January 1985. Under the agreement for sale,
every flat holder has to use the flat as private residence and
one parking space is provided for parking vehicle. By a
separate letter, defendant Nos. 2 and 3 requested defendant
No. 1 to allow them to use the said flat as a nursing home and
assured defendant No. 1 that other flat purchasers in the
building will have no objection for such use by them.
Defendant Nos. 2 and 3 also stated that they will manage with
Municipal Corporation. On such representation and assurance,

630
defendant Nos. 2 and 3 obtained no objection from defendant
No. 1 Builder.
The said letter clearly stated that if, other flat purchasers have
no objection, then, the first defendant also has no objection to
the change of user by defendant Nos. 2 and 3. Defendant No. 1
pointed out that defendant Nos. 2 and 3 obtained their
permission for three door openings in the said two flats.
However, other flat purchasers did not give no objection for
this act and vehemently opposed use of the flat for the purpose
of nursing home. The builder has blamed defendant Nos. 2
and 3 for taking advantage of the cooperation extended and
under the garb of the same, extensive repairs have been carried
out by defendant Nos. 2 and 3 and alterations and changes of
permanent nature have been made. The builder confirmed that
the members of the ad hoc committee of the flat purchasers
approached it and objected defendant Nos. 2 and 3 using the
flats for the purpose of nursing home. An attempt was made to
contact defendant Nos. 2 and 3. The assurances given by
defendant No. 3 have been noted in this reply so also the reply
confirms the objections of the ad-hoc committee in the
meeting and the assurances given therein by defendant Nos.2
and 3 not to open nursing home and restrict the user of the part
of the flats for consultation.
11. Defendant Nos. 2 and 3 filed written statements and while
denying all the allegations averred that the flats have been

631
purchased by them from defendant No. 1. They denied the
authority of the ad-hoc committee. The written statement
having been drafted by party in person, it does not make a
proper reading and some times there are assertions coupled
with denials. The denials are of the statements in the meeting.
It is contended that the door openings in the flat are legal and
permitted. There is permission by the Municipal Corporation
for use of nursing home. It is contended that there is
permission to enclose a portion marked "C" by collapsible
gate. Reliance is placed on permissions given by B.M.C. Thus,
the suit according to defendant Nos. 2 and 3 is not
maintainable and deserves to be dismissed. The written
statement is annexed to the compilation tendered during the
course of submissions at page 20 to 30.
12. The stand of Municipal Corporation appears to be that, the
defendant Nos. 2 and 3 through their Architect Patil and
Associates made an application by the letter dated 24th
January 1985 for the change of user from residential to
Nursing Home, dispensary for Flat No. B-1 and B-2 of ground
floor in the building along with no objection issued by the
defendant No. 1. as also ground floor plan indicating the
proposed change of user in Flat No. B-1 and B-2 and
requested to grant the said permission, after considering the
defendant No. 2 and 3's application for the proposed change of
user from residential to nursing home. The Corporation

632
approved the said application for change of user on 26th
February 1985, on certain terms and conditions. According to
the said approval the Corporation issued a letter dated 5th
March 1985 informing Architect of defendant Nos. 2 and 3
that there is no objection to change the user of flat No. B-1 as
detailed in the accompanying plan subject to the conditions
mentioned therein. In reply to the said approval letter dated
5th March 1985, the Corporation received a letter dated 24th
May 1985 from the Architect of defendant Nos. 2 and 3
stating therein that the work for the change of user as shown
on the plan approved has been carried out under his
supervision and the said work commenced on 5th April 1985
and the same was completed on 23rd April 1985. Thereafter,
completion certificate was requested for by defendant Nos. 2
and 3 under SECTION 353(A) of the Corporation's Act.
According to the Corporation, it had already approved the
plans according to the provisions of the Act, building bye-laws
and D.C. Rules on 5th March 1985 and as per the letter dated
24th May 1985 defendant Nos. 2 and 3 have carried out the
work. According to Corporation, plaintiff's suit has, therefore,
become infructuous and the same be dismissed. According to
Corporation, on 8th May 1985 it received an application for
change of user in flat No. B-2 for which the Corporation
approved the plans on 28th May 1985 informing the Architect
of defendant Nos. 2 and 3 that there is no objection to change

633
of user of the flat No. B-2 as detailed in the accompanying
plans subject to the conditions of the approval letter issued by
Corporation. According to Corporation plans for change of
user from residential to nursing home were approved as per
building bye-laws and D.C. Rules and provisions of law.
Before sanctioning the plan for flat No. B-2 the plaintiff
rushed to this Court and filed the present suit for obtaining
mandatory injunction order to revoke, cancel and withdraw the
permission granted by defendant Nos. 2 and 3. Defendant Nos.
2 and 3 have carried out the work as per the approved plans by
Corporation. Under the circumstances, the suit has become in
fructuous. Therefore, the plaintiff is not entitled to any relief
in terms of prayer of suit. Thus, their stand is that the suit is
misconceived and in any event rendered in fructuous.
13. As far as the writ petition is concerned, the same arises out
of appellate proceedings before the Cooperative Appellate
Court. These appeals were directed against the judgment and
award in two cases filed by the Society in Coop. Court bearing
Case Nos.1005 and 1006 of 1985. First case was filed to claim
declaration that respondent Nos. 1 and 2 (original appellants)
have no right to retain Flat No. B-2 for non residential use and
they be directed to demolish illegal additions, alterations and
to restore the flat to its original condition. They should also be
directed to reinstate the garden adjoining the flat and remove
encroachment on the stilts and other portions of the society. In

634
other words a restraint order be placed on their using or
converting the flat for nursing home or maternity home or
hospital or clinic or dispensary.
14. The second case 1006 of 1986 also instituted by the
society as disputants, claims similar declaration with regard to
Flat No. B-1.
15. The written statement of original defendant Nos. 2 and 3
who were the only opponent in these coop. cases, was filed
and the assertions therein are more or less same as that of the
written statement in the suit. The case is that the flats have
been purchased for the purpose of use as nursing home and
that other purchasers were aware of the same.
16. The above cases/ disputes was placed before the Coop.
Court and by a common judgment rendered therein, the
following award was made:
1. Opponents are hereby declared as not entitled to use
premises for nursing home purposes in disputant society's
building and opponents servants and agents are hereby
restrained from using flat No. B-1 and B-2 in disputant
society's building, Gladhurst for Nursing Home purposes.
17. Aggrieved by this judgment and award, defendant Nos. 2
and 3 who were original opponents preferred appeals to the
Coop. Appellate Court and Appeal Nos. 468 and 469 of 1989
were allowed by the Coop. Appellate Court by the judgment
and order dated 19th February 1987. In other words, judgment

635
and order of the Coop. Court (Trial Court) is set aside. The
common judgment of the appellate court in the above appeals
is subject matter of challenge in the present petition.
18. As far as civil suit is concerned, the same, after pleadings
were complete, was taken up for hearing and final disposal.
The issues were framed and issues 1 and 2 are relevant and
they were answered thus:
(1) Whether the permission of change of user granted by the
Defendant No. 4 in favour of Defendant Nos. 2 and 3 was
granted in violation of the D.C. Regulation and the provisions
under the B.M.C. Act: IN THE NEGATIVE.
(2) Do the plaintiffs prove that for change of user from
residential to commercial their permission is essential under
the terms and conditions of Deed of Agreement in between the
plaintiff/ flat purchaser and the builder/Developer Defendant
No. 1.: IN THE NEGATIVE
19. The evidence-in-chief of plaintiff No. 13 (V.V. Kamat)
was recorded on affidavit, whereas defendant No. 2 who is
appearing before me in person stepped into witness box. As
far as Corporation is concerned, on its behalf, defendant No. 4
stepped into witness box. He was cross examined by the
appellants herein. These witnesses have been cross-examined
by parties.
20. The trial court, by an exhaustive judgment has held that
the appellants are not entitled to succeed in the light of its

636
findings on issue Nos. 1 and 2. The suit was, therefore,
dismissed with costs. The judgment and decree of the trial
court to the above effect is dated 24th April 2002.
21. Since Issue Nos. 1 and 2 in the suit and in the case before
Coop. Court are identical so also parties being common to
both proceedings, writ petition and first appeal were directed
to be decided together.
22. Mr. R.V. Pai, learned Counsel appearing for Society has
urged that the controversy in coop. Court case as well as the
suit stands fully covered by a decision of the Supreme Court in
the case of Dadar Avanti Coop. Hsg. v. M.C.G.B., 1996
SCALE (2) 137. He submits that identical controversy was
before the Supreme Court and the Supreme Court has
observed that at the relevant time, the D.C. Rules for Greater
Bombay did not permit any non residential user in residential
zone and/or premises. Once this is the conclusion in law, then
both, the judgment of the Coop. Appellate Court as well as
Trial Court are patently unsustainable, erroneous and deserve
to be set aside. In his submission, before the City Civil Court,
during the course of the proceedings, the judgment of the
Supreme Court (supra) was available. He submits that despite
clear pronouncement of law therein, the trial court has
unnecessary gone into completely extraneous and irrelevant
issues. In his submission, there is no scope of interpretation of
relevant D.C. Rules. On the other hand, the broad

637
categorisation by Supreme Court with regard to user of the
premises being residential and non residential, there cannot be
any justification for going into the aspect as to whether
Nursing home is covered by the term "clinics", as used in D.C.
Regulations. He submits that in the light of the pronouncement
with regard to identical regulations by the Supreme Court, it is
clear that D.C. Regulations in question does not cover nursing
home. Therefore, the issue as to whether it is clinic or not does
not survive for consideration.
23. Mr. Pai has invited my attention to the judgment of the
Civil Court in the suit and has challenged the findings of the
learned Judge to the effect that the term "clinic" as found in
Rule 7(iii) of the D.C. Rules for Mumbai excludes nursing
home and the terms clinic and nursing home are synonyms of
each other.
24. He submits that reliance by the trial court on the
judgment/order delivered in Appeal From Order No. 662 of
1986 dated 19th September 1986 by this Court is misplaced.
He submits that the deletion of the word "Group Medical
Centre" from the D.C. Rule 7(iii) and further aspect as to
whether the same would cover nursing home or not is
something which is not surviving after the Supreme Court
decision. The Supreme Court decision is clear inasmuch as
prior to their amendment in 1991, the D.C. Rules did not
contemplate any non residential user.

638
25. Mr. Pai has submitted that admittedly there is no provision
enabling the non residential user on the ground floor in this
case. He submits that as far as the non registration of the
society and the possession and user of the defendant Nos. 2
and 3 is concerned, the case would be governed by Clause 12
of the agreement for sale of the flats in question. Both sides
viz., builder as well as defendant Nos. 2 and 3 have submitted
to Clause 12. It is prescribing restrictions upon user and the
said clause cannot be held to be void. He submits that the
finding of the trial court is erroneous. Mr. Pai has invited my
attention to the Civil Court observation on validity of Clause
12. He submits that it is erroneous to contend that prohibition
contemplated by the clause is contrary to the provisions
contained in the B.M.C. Act, M.R.T.P. Act and D.C. Rules,
then in force. He submits that such clauses being ab initio void
and incapable of being acted upon is a finding rendered by the
civil court, contrary to the statutory provisions as also the
materials placed on record. If the clause is void ab initio and
not binding upon parties to the agreement, then, it was not
necessary for the civil court to scrutinise, so called
concessions granted by the builder to defendant Nos. 2 and 3.
He submits that the civil court has ignored the affidavit filed
by the builder. The statements therein have remained
uncontroverted. In any event, if the clause cannot be acted
upon in the light of the D.C. Rules, then, the judgment of

639
Supreme Court interpreting the D.C. Rules in question was
binding upon the civil court and such binding decision of the
Highest Court of the land should not have been brushed aside.
26. Mr. Pai was at pains to emphasise the fact that in a housing
society, a member cannot be permitted to use the premises
meant for residence for non residential purpose in
contravention of the provisions of law, for that would go
against the very spirit of Cooperative movement. The flat
purchasers in a building which is meant for residence have got
together and formed a society. Its by-laws containing a
prohibition with regard to non residential user is binding upon
the member. He submits that Bye-law is in the nature of a
contract and there is no challenge to bye-laws. When the Bye-
laws prohibit such user, then the courts below ought to have
upheld the contentions of the society and restrained defendant
Nos. 2 and 3 from continuing with the use of the flats in
question for non residential purpose or a nursing home.
27. The last submission of Mr. Pai is that looked at from any
angle, the action of defendant Nos. 2 and 3 is prohibited. Their
right to practice their profession is always subject to
reasonable restrictions and in residential premises, if non
residential user is prohibited and such prohibition is in public
interest, the defendant Nos. 2 and 3 cannot be heard to contend
that they may be allowed to continue their activity on the
ground that they purchased the flats specifically for such user.

640
28. In addition to the judgment of the Supreme Court (supra),
Mr. Pai relies upon the following decision:
Director of Settlements A.P. v. M.R. Apparao and Ors., (2002)
4 SCC 638.
29. Defendant No. 2 to the suit and opponent No. 1 to the
dispute Mr. Bhupendra Shah appears in person, on behalf of
himself as well as his wife, who is medical practitioner. Mr.
Shah submits that the submissions of Mr. Pai do not deserve to
be accepted. He placed strong reliance upon D.C. Rules
prevailing at the relevant time and a notification dated 28th
February 1991 amending the D.C. Rules for Mumbai. He
submits that notification being very clear inasmuch as what is
allowed by the D.C. Rules till such time as the amendment
was proposed thereto is specifically saved by the notification
and the amended D.C. Rules, as well. In other words, his
submission is that the purpose of amending the D.C. Rules is
not to take away the facility, concession and permission
granted by the earlier D.C. Regulations and even after the
same stood amended, insofar as, the user prior to the new D.C.
Rules, the same is specifically saved. In his submission, the
society is deliberately, distorting the facts. He refers to a
compilation tendered by the B.M.C. In addition, he relies upon
the application made by his wife and him jointly on 24th
February 1985. In his submission, on that date, D.C. Rules of
1978 were prevalent. He submits that on the ground floor,

641
clinics and nursing homes were permitted by B.M.C. He relies
upon D.C. Rule No. 7 and submits that it contemplates four
uses/items. One of the user is clinic. He submits that it
includes nursing home. He submits that the enactment insofar
as registration of nursing home is concerned, it refers to the
broad classification and, therefore, the term clinic as used in
the D.C. Rules in question must include a nursing home. It has
been so registered from 1979 to 1982. Dr. Shah sought to
contend that the Corporation and the other parties were
registering large number of nursing homes, whether public or
private during the relevant period and, therefore, it was also
understood by the B.M.C. that the term "clinic" would include
nursing home.
30. Defendant No. 2 then invited my attention to some
documents from the compilation viz., Exh.38 and Notification
or Circular at page 152.
He submits that Condition No. 4 imposed under the aforesaid
documents with regard to registration under the Nursing Home
Registration Act is complied with and he invites my attention
to the certificate in that behalf issued on 17th February 1985,
page 141. He also invites my attention to circular at page 159
issued by the B.M.C. thereunder. The powers have been
clearly delegated and it is not as if the Executive Engineer or
Director (ESP) had no authority to grant permission to
defendant No. 2 for such user. Mr. Shah then invites my

642
attention to page 162 of the compilation and submits that
stringent of the conditions have to be applied and in the
present case, as far as the old rules are concerned, the
Regulation 7(iii) would hold field in the light of clarification/
circular dated 30th April 1985. He submits that thus there is
nothing illegal in the defendant Nos. 2 and 3 utilising the flats
for use as nursing home. Once the builder as well as B.M.C.
has permitted such user and admittedly, the same is
commenced before registration of the Coop. Society in
question, then, it is not open now to urge that the user is
contrary to law, illegal and, therefore, deserves to be
prohibited or stopped.
31. Mr. Shah made strenuous attempt to distinguish the
judgment of the Supreme Court in Dadar Avanti case. He
submits that the relevant period as far as this case is
concerned, is 1985 to 1987. He submits that judgment of the
Supreme Court must been seen in the factual background in
which the same came to be rendered. He submits that there
was a user therein of second floor by the concerned member
(Dr. Nerker). He submits that there was no completion
certificate. Even the provisional occupation certificate was not
granted. He submits that, that was the position on the date
when Dr. Nerkar applied. He submits that when the
notification dated 1st April 1985 is seen in the context of these
facts, it is clear that the Doctor occupying the second floor

643
residential premises/ flat in the building Dadar Avanti could
not have established or set up the nursing home. Another
distinguishing feature, according to Mr. Shah is that in the
case of Dadar Avanti, Society was already formed and in the
case at hand when the defendant Nos. 2 and 3 applied, the
society was not formed. That apart, defendant Nos. 2 and 3
had clearly intended to buy flats for use as nursing home as
they had residential premises at Dadar. Mr. Shah was at pains
to point out that Section 4 of the Ownership Flats Act does not
apply. Section 4 applies when construction is in progress. He
submits that the conclusion of the City Civil Court and that of
the Coop. Appellate Court is fair, just and proper.
32. Defendant Nos. 2 and 3 did not go as far as supporting the
findings on the validity of Clause 12 of the Agreement. He
submits that the word "Void" must be corrected. However,
conditions including Clause 12 are capable of being relaxed by
the builder. He submits that as far as opening three doors is
concerned, no permission of the builder was required. Any
door opening in the stilt or other portion of premises, then
building permission is required and not otherwise. He submits
that the petition and appeal are both filed malafide and with a
view to harass the party in person and his wife. He submits
that in addition to his oral submissions, the written statement
before the trial court Exh.71 be also considered. He tenders a
compilation and also relies upon the provisions of

644
Maharashtra Ownership Flats Act and more particularly
Section 2(a) and Section 4(A) thereof. He submits that the
term nursing home is defined in Nursing Home Registration
Act. He submits that the term Nursing Home as defined is
synonymous to the word "clinic" appearing in D.C.
Regulations. In any event, the registration granted after
inspection, under the Nursing Homes Act as also certificate
granted on 17th April 1985 thereunder, has not been
challenged by the society. In these circumstances, both in the
appeal as well as in the petition no case is made out for
interference by this Court and both may be dismissed with
costs.
33. Mr. Anil Singh, appearing for Municipal Corporation
invites my attention to issues framed by the civil court in the
suit. He submits that the suit filed by the appellants herein was
ex facie bad in law and not maintainable. He submits that no
notice was given under Section 527 of the B.M.C. Act. The
suit must fail on that ground alone. He submits that it is not
the case of parties before this Court and before the Courts
below that Section 527 of the B.M.C. Act is either not
applicable or if applicable, the provisions thereof are ultra
vires and of no legal effect. In any event, Section 527 is not
violative of Article 14 of the Constitution. He submits that this
point was raised in the written statement specifically and,

645
therefore, non compliance with this statutory provision must
entail in dismissal of the suit on that ground alone.
34. That apart, he submits that the suit was not maintainable
because, as far as, the permission contemplated for user of the
premises and/or change therein is concerned, the same is
traceable to Section 44 of M.R.T.P. Act. Grant of permission
is contemplated by Section 45 thereunder. Section 46
prescribes the period of validity of permission granted vide
Section 45. Section 47 provides for appeal in case a party is
aggrieved by refusal of permission or conditional grant of
permission. Appeal lies to the State Government. Thus, in this
light that Section 49 of M.R.T.P. Act must be seen and if so
seen and considered, there is a finality attached to the
permissions granted under the M.R.T.P. Act. Consequently, no
suit can lie to challenge the permission, in the City Civil
Court, in the light of the prohibition contained in Section 149.
The trial court, therefore, had no jurisdiction to entertain and
try the suit. Mr. Singh, submits that insofar as the permission
in question is concerned, it is traceable to the then D.C. Rule
7(iii). Alternatively, it is traceable to Regulation 7(ix). He
submits that in case it is contended that the concept of nursing
home was not there at all and in any event, after deletion of
the term "Group Medical Centre" from D.C. Rules, then
Regulation 7(ix) contemplating permission as "Hospital" can
always be resorted to. Mr. Singh submits that there is a power

646
to delegate under the D.C. Rules as well as B.M.C. Act and
M.R.T.P. Act. In these circumstances, defendant No. 2 and 3
are right in their submission that their user was not prohibited.
Mr. Singh adopts the submissions of defendant Nos. 2 and 3 in
that behalf and invites my attention to the fact that prior to
1979 nursing homes were not there at all and still permissions
were granted and which have been left undisturbed and
unchallenged. In these circumstances, the judgment and decree
of the trial court should not be interfered with and both appeal
as well as writ petition be dismissed.
35. In the light of the oral and written arguments on record,
the issue that arises for determination, in these proceedings, is
whether the user of the premises by defendant Nos. 2 and 3 for
nursing home is permitted by the agreement with the flat
purchasers and under the D.C. Regulations for Greater
Mumbai.
36. Any finding thereon would necessarily depend upon the
applicability of the decision of the Supreme Court in the case
of Dadar Avanti.
37. Before I proceed to render my findings and conclusions, it
would be necessary to refer to some admitted facts.
38. From the record it is clear that the society has been formed
by flat purchasers. The society is consisting of tenaments/ flats
which are used as private residence. Clause 12 in the

647
agreement for sale which has been entered into by the flat
purchasers including defendant Nos. and 3 reads thus:
12. The flat holders shall not use the said premises for any
purpose other than as a private residence (and the car parking
space for parking a motor vehicle)
39. In addition thereto, provisions of the Ownership Act do
not in any manner state that the stipulations therein are per se
bad. On the other hand, Section 4 of the Ownership Flats Act
is noticed and the agreement and these provisions read
together, it would be apparent that the same do not run counter
to or affect the terms and conditions in the agreement for sale
in any manner. The same read thus:
4. Promoter before accepting advance payment or deposit to
enter into agreement and agreement to be registered.
[(1)] Notwithstanding anything contained in any other law, a
building of flats all or some of which are to be taken or are
taken on ownership basis, shall, before, he accepts any sum of
more than 20 per cent, of the sale price enter into a written
under [the Registration Act, 1908 (hereinafter in this section
referred to as "the Registration Act, 1908"] [and such
agreement shall be in the prescribed form.]

648
[(1A)] The Agreement to be prescribed under Sub-section (1)
shall contain inter alia the particulars as specified in Clause
(a); and to such agreement there shall be attached the copies of
the documents specified in Clause (b)-
(a) particulars -
(i) if the building is to be constructed, the liability of the
promoter to construct it according to the plans and
specifications approved by the local authority where such
approval is required under any law for the time being in force;
(ii) the date by which the possession of the flat is to be handed
over to the purchaser;
(iii) the extent of the carpet area of the flat including the area
of the balconies which should be shown separately;
(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; and the intervals
at which installments thereof may be paid;
(v) the precise nature of the organisation to be constituted of
the persons who have taken or are to take the flats;
(vi) the nature, extent and description of common areas and
facilities;
(vii) the nature, extent and description of limited common
areas and facilities, if any;
(viii) percentage of undivided interest in the common areas
and facilities appertaining to the flat agreed to be sold;

649
(ix) statement of the use for which the flat is intended and
restriction on its use, if any;
(x) percentage of undivided interests in the limited common
areas and facilities, if any, appertaining to the flat agreed to be
sold;
(b) copies of documents,-
(i) the certificate by an Attorney-at-law or Advocate under
Clause (a) of Sub-section (2) of Section 3;
(ii) Property Card or extract of Village Forms VI or VII and
XII or any other relevant revenue record showing the nature of
the title of the promoter to the land on which the flats are
constructed or are to be constructed;
(iii) the plans and specifications of the flat as approved by the
concerned local authority]
40. Assuming that above provision so also provisions of the
Ownership Flats Act would have to be read in context and
along with M.R.T.P. Act and B.M.C. Act as also D.C.
Regulations, even then, the issue is whether in residential
building non residential user (nursing home) of the nature
commenced and continued by defendant Nos. 2 and 3 is
permissible or not? In other words, whether the non residential
user (nursing home) is permitted by the D.C. Rules, then
prevailing. It is well settled that the D.C. Regulations are
traceable and form part and parcel of Development Plan. (see

650
Section 22(m) of M.R.T.P. Act). As far as D.C. Regulations at
the relevant time are concerned, the same read thus:
Development Control Rules-Greater Bombay (As modified
and sectioned by Government of Maharashtra) (as amended
upto 1-8-1978 with subsequent modifications as appendices)
printed at Municipal Printing Press, Bombay" As far as D.C.
Rules are concerned, they are for greater Bombay. Part I deals
with permissions and zones. Rule 4 deals with use as
specifically designated on development plan. If use of a site is
specifically designated on the D.P. then it shall be used only
for the said purpose. Rule 4(a) and (b) read together with (c)
provides that when use of the site is specifically designated on
the development plan, it shall be used for the purpose so
designated. When the use of building/ premises is not
specifically designated on the development plan, it shall be in
conformity with the zone in which they fall. Rule 5 provide
for zone or districts. It reads thus:
5. Zones or districts :For the purpose of the development plan
and these rules Greater Bombay has been divided into the
following classes or zones :
1. (a) Residential
(b) Residential with shop lines along streets;
2. Commercial
3. Industrial
(a) General, (b) Special and

651
4. Green or No Development Zones.
41. Part II deals with residential zone. Rule 7 therein deals
with rules in residential zones. Rule 7 insofar as it is relevant
for these matters reads thus:
7. Use provision in Residential Zones In residential zones
building or premises shall be used only for the following
purposes and their accessory uses
(i) Any residences :
(ii) Customary home occupations.
(iii) Medical and dental practitioners, clinics and dispensaries
and group Medical Centres.
(iv) Professional offices and studies of a resident of the
premises and incidental to such residential use, not occupying
a floor area exceeding 200 sq.ft.
(v) Residential hotels or lodging houses in independent
buildings or parts of buildings or on separate floors thereof
with the special written permission of the Commissioner, who
will take into consideration suitability of the site, size and
shape of the plot, means of access, water and sanitary
arrangements etc. before granting the permission.
(vi) Education Buildings including hostels, religious
Buildings, community halls and welfare centres and
gymnasiums, except trade Schools.
Provided that the Municipal Commissioner may be order in
writing direct that the montessory schools, Kindergarden

652
Classes or Bal Mandirs in a part of any residential building
maybe conducted preferably on the ground floor, if the area
thereof is not less than 37.16 sq. mt. (400 square feet); and on
condition that no nuisance is likely to be caused to the
residents of the Buildings.
(ix) Correctional or mental institutions, institutions for the
children, the aged or widows, sanitoria and hospitals (except
veterinary hospitals) with the special written permission of the
Commissioner provided that those principally for contagious,
disease, the insane or for correctional purpose shall be located
not less than 150 ft. from any adjoining premises.
(x) Research, experimental and testing laboratories not
involving any danger of fire or explosion nor of any
obnoxious nature and located on a site not less than 10 acres in
area and when the laboratory is kept at least 100 ft. from any
of the boundaries of the site and the accessory residential
buildings 100 ft. from the laboratory.
42. The argument before me is that stipulations in the
agreement for sale apart, if the building or premises fall in a
residential zone and in such zone, if premises can be used by
Medical and Dental Practioners, or as clinics and dispensaries,
then, merely because the flats are situate in residential
building does not mean that the activity of defendant Nos. 2
and 3 is per se illegal.

653
43. For me, it is not necessary to go into the other submissios
as to whether clinic would include nursing home or not and
what is the effect of the deletion of the term Group Medical
Centres from the D.C. Rule No. 7(iii). In my view, such
submissions and arguments are not open after the Supreme
Court decision in the case of Dadar Avanti. For that purpose, it
is necessary to refer to the judgement of the Supreme Court in
Dadar Avanti Coop. Socy. v. MCGB and ors. rendered on 9th
February 1996 in Civil Appeal No. 3239 of 1996. This civil
appeal arose from a judgment and order of this Court dated
14th September 1994 in W.P.826 of 1988.
44. This petition was filed by the appellants before the
Supreme Court. The dispute in the petition as well as the issue
before the Supreme Court was whether Municipal Authorities
could have permitted the respondent Nos. 3 and 4 before the
Supreme Court (Dr. Nerkar and his wife), to convert their flats
on the second floor of the building from residential purpose to
that of a commercial one for opening of a surgical nursing
home.
45. The appellant Coop. Society consisted of members who
purchased flats in the building Dadar Avanti. The building
was constructed by one M/s. Amar Builders. They submitted a
plan on 25th July 1979 for construction of ground plus 13
floors in Dadar area. The plan which was approved by the
Corporation indicated that the ground floor was to be used for

654
clinics and garages while the upper floors will be used for
residential purpose. Dr. Nerkar, a medical practioner
purchased flat Nos. 3 and 4 on the 2nd floor. The grievance of
the society and its members was that Dr. Nerkar converted the
flats on the second floor for surgical nursing home and thereby
violated not only the terms and conditions in the sanctioned
plan but also created a situation where a surgical nursing home
in a residential building became hazardous to people at large.
46. The dispute with the B.M.C. raised by the society was to
the user by the Doctor -a medical practitioner of flat Nos. 3
and 4 of the second floor as surgical nursing home. The
occupation certificate was applied for the entire building
except flat Nos. 3 and 4 on the second floor. The Corporation
granted provisional occupation certificate on 14th January
1987 for the entire building except these flats.
47. The members/ medical practitioners named above, applied
to the Municipal Corporation seeking its permission for
change of user of the flat from residential to commercial. The
society and its members objected to grant of such permission.
The Ex. Engineer Building Proposals (City) vide his order
dated 20th April 1987 rejected the application of the members/
medical practitioners on the ground that the proposal was not
in conformity with the existing D.C. Rules. Against the order
of the Ex. Engineer, a representation was made by the
member/ medical practitioner to the Commissioner, B.M.C.,

655
who by his order dated 31st July 1987 reversed the order of
Ex. Engineer and granted no objection certificate for change
of user of the flats. The society moved this Court challenging
the order of Municipal Commissioner. The first writ petition
was allowed by this Court on the ground that the
Commissioner did not hear the society before granting
permission. The matter was thus remanded to the
Commissioner. Once again by his final order dated 18th
December 1987, he confirmed that the user of both flats as
surgical clinic is in conformity with the existing D.C. Rules
and building by-laws applicable to Greater Mumbai. He also
held that the occupants of the building were aware of the fact
that these flats were intended to be used for running a surgical
clinic. With these observations, he permitted change of user.
The society challenged this order by the second writ petition,
in which the judgment, impugned and challenged before the
Supreme Court was delivered by this Court.
48. After noticing the contentions and more specifically the
contention that in the year 1987 at which point of time the
order was passed under the building regulations, it was not
permissible to apply and to grant change of user of the nature
claimed by the medical practitioner, It was held by the
Supreme Court that this Court had erred in law in granting
such permission merely on the ground that such permission
could have been granted originally when the plan for building

656
was sanctioned. It was also contended that the allottee cannot
claim substantive right of change of user and when such is an
application made, the relevant regulation in force must be
adhered to by the authority while considering such application.
The submissions have been noted in para 3 of the judgment
and the Supreme Court in paras 4 and 5 has observed thus:
4. The Act is intended to make provisions for planning the
development and use of land and to ensure that Town
Planning Schemes are made in a proper manner and their
execution is made effective. In a city like Bombay where there
is acute dearth of vacant sites and where there is rapid increase
of population, unless developmental authorities are conferred
with power to regulate constructions of buildings and unless
development takes place in a planned manner it will be
hazardous for a healthy living. With this end in view the Act
has been enacted constituting Regional Planning Boards and
providing for development plans by a Development Authority.
The Act also provides the procedure to be followed in
preparing and sanctioning development plans and it also
provides for control of development and use of land included
in the development plans. The Act confers power on the
Planning Authority to take such remedial measure if it comes
to its notice that there has been unauthorised development.
The Planning Authority has also the power to require removal
of authorised development or use if the authority thinks it

657
expedient in the interest of proper planning and its area. Such
drastic power has been conferred on the authority with the
obvious object that the said authority would act in a manner
which is not detrimental to the human health and the
unauthorised development or user of the land should be
prohibited from such user so that there would be development
of the city in a planned manner. If such unauthorised user of
the land is not checked by such planning Authority then in
cities like Bombay where the growth rate of inhabitant is fast
it would be difficult to have a comfortable living.
5. Before we focus our attention on the different provisions of
the Act it would be appropriate to notice the admitted facts,
namely, the builder submitted the plan of the building in July
1979 which was approved by the Corporation. The approved
plan indicated that only the ground floor would be used for
clinics and garages and rest of the floors would be used for
residential purposes. The architect of the building even when
applied for "Occupation Certificate" in September 1986 he did
not make an application for Flats Nos. 3 and 4 on the second
floor as the allottees were insisting on using the same as clinic
which was contrary to the sanctioned plan. Respondents 3 and
4 made an application in April 1987 seeking change of user of
the plots.
49. When the attention of the Supreme Court was invited to
the fact that in subsequent D.C. Regulation viz., Regulations

658
of 1991 which have come into force with effect from 25th
March 1991, clinics are permitted in residential areas upto
second floor with a condition that there should be separate
access, the Supreme Court has observed:
23. In course of hearing it was also pointed out to us by the
counsel appearing for the Development Authority that in the
subsequent Regulation of 1991 (Development Control
Regulation for Greater Bombay, 1991) which has come into
force with effect from 25/3/1991 clinics are permissible in
residential areas upto second floor with the condition that
there should be a separate access. The High Court while
dismissing the writ applications has taken that into
consideration and has found that there has been no error in
granting permission in the order of the Commissioner. It is to
be noted that the order of the Additional Commissioner is
dated 18/12/1987, allowing such change of user of the flats
from residential to surgical clinic and the Regulation of 1991
came into force with effect from 25/3/1991 and, therefore, the
said regulation could not have been pressed into service for
deciding the legality of the order of the Additional
Commissioner. In the aforesaid premises we hold that the
Additional Commissioner had no power to allow the change of
user sought for by respondents 3 and 4 and the High Court
also committed error in upholding the said order. We
accordingly, set aside the order of the Additional

659
Commissioner as well as the High Court and allow this appeal.
Needless to mention that since the Regulation of 1991
empowers the authority concerned to allow change of user it
would be open for the respondents to move the authority
afresh and the said authority may pass appropriate orders in
accordance with the Regulations of 1991 which is said to be in
force. This appeal is allowed.
50. From a reading of these observations, conclusions and
findings of the Supreme Court, it is clear that the Supreme
Court has clearly held that when the application was made for
change of user under the regulation in force, it was not
permissible to allow change of user from residential to
commercial, though at a later point of time, the regulation is
changed and such permission can be accorded, subject to
certain terms and conditions. The Supreme Court, therefore,
held that the new D.C. Rules cannot be of any assistance and
once the D.C. Rules, then in force, did not permit change of
user from residential to commercial, then no permission as
claimed by medical practitioner could have been granted.
51. It is not possible for me to accept the contentions of
defendants that this judgment will have no application to the
facts and circumstances of the present case. With greatest
respect, it is not possible to accept the submission that
attention of the Supreme Court was not invited to the
Regulation which was prevailing on the date when the

660
construction before it was commenced or when it granted
provisional occupation certificate. It is impossible to accede to
the submission that when Dr. Nerkar applied for change of
user the regulations which are now brought to my notice were
in force. A Supreme Court decision cannot be held to be not
binding on the ground that some fact was not brought to its
notice or that some submission, although, canvassed, was not
considered by the Supreme Court. With regard to the binding
nature of the Supreme Court decision, the mandate flows not
only from Article 141 of the Constitution but also from
judicial discipline which requires that a decision of the
Superior Court does not lose its binding effect as far as the
Court subordinate to it, merely because, some facts allegedly
escaped its attention. This aspect has been succinctly
summarised in a recent decision of the Supreme Court
in Director of Settlements, A.P. and Ors. v. M.R. Apparao and
Anr. reported in A.I.R.2002 S.C. 1598 where the Supreme
Court has observed thus:
7. So for as the first question is concerned, Article 141 of the
Constitution unequivocally indicates that the law declared by
the Supreme Court shall be binding on all Courts within the
territory of India. The aforesaid Article empowers the
Supreme Court to declare the law. It is, therefore, an essential
function of the Court to interpret a legislation. The statements
of the Court on matters other than law like facts may have no

661
binding force as the facts of two cases may not be similar. But
what is binding is the ratio of the decision and not any finding
of facts. It is the principle found out upon a reading of a
judgment as a whole, in the light of the questions before the
Court that forms the ration and not any particular word or
sentence. To determine whether a decision has declared law' it
cannot be said to be law when a point is disposed of on
concession and what is binding is the principle underlying a
decision. A judgment of the Court has to be read in the context
of questions which arose for consideration in the case in which
the judgment was delivered. An 'obiter dictum' as
distinguished from a ratio decidendi is an observation by
Court on a legal question suggested in a case before it but not
arising in such manner as to require a decision. Such an obiter
may not have a binding precedent as the observation was
unnecessary for the decision pronounced, but even though an
obiter may not have a bind effect as a precedent, but it cannot
be denied that it is of considerable weight. The law which will
be binding under Article 141 would, therefore, extend to all
observations of points raised and decided by the Court in a
given case. So far as constitutional matters are concerned, it is
a practice of the Court not to make any pronouncement on
points not directly raised for its decision. The decision in a
judgment of the Supreme Court cannot be assailed on the
ground that certain aspects were not considered or the relevant

662
provisions were not brought to the notice of the Court (See
and AIR 1973 SC 794). When Supreme Court decides a
principle it would be the duty of the High Court or a
subordinate Court to follow the decision of the Supreme
Court. A judgment of the High Court which refuses to follow
the decision and directions of the Supreme Court or seeks to
revive a decision of the High Court which had been set aside
by the Supreme Court is a nullity. (See and
). We have to answer the first question bearing in mind the
aforesaid guiding principles. We may refer to some of the
decisions cited by Mr. Rao in elaborating his arguments
contending that the judgment of this Court dated 6th February,
1986 cannot be held to be law declared by the Court within the
ambit of Article 141 of the Constitution. Mr. Rao relied upon
the judgment of this Court in the case of Pandit M.S.M.
Sharma v. Shri. Sri Krishna Sinha and Ors. 1959 Supl (1) SCR
806, wherein the power and privilege of the State Legislature
and the fundamental right of freedom of speech and
expression including the freedom of the press was the subject
matter of consideration. In the aforesaid judgment it has been
observed by the Court that the decision in Gunupati
Keshavram Reddy v. Nafisul Hasan, AIR 1954 SC 636, relied
upon by the counsel for the petitioner which entirely
proceeded on a concession of the counsel cannot be regarded

663
as a considered opinion on the subject. There is no dispute
with the aforesaid proposition of law.
52. In the case at hand, as far as cooperative Court is
concerned it had no occasion to have a look at the decision of
the Supreme Court. However, while trying the suit, the Civil
Court had definitely before it the same. The Civil Court refers
to this judgment in paras 38 and 39 of its judgment and order
and observes as under:
38. Learned Advocate Mr. V.V. Pai for the plaintiffs
submitted that the Hon'ble Supreme Court held in the case of
Dadar Avanti CHS Ltd. v. B.M.C. (Civil Appeal No. 3239 of
1996 @ SLP (Civil) No. 18187 of 1995 dtd. 9/2/1996) that the
definitions of building operation in Sec.2(5), development in
Sec.2(7) and land in Sec.2(14) make it very especially clear
that the building or part of building, if it has been sanctioned
for specific purpose the user of the same for any other purpose
unless permitted by Competent Authorities would be in
contravention of provision of Act. The Hon'ble Supreme Court
found in that case that under sanctioned plan only the ground
floor was permitted to be used as commercial purpose and the
Architect had applied for completion certificate only in respect
of other flats and shop premises except flat Nos. 3 and 4
allotted to the respondents since they wanted to use the same
for commercial purpose though under sanctioned plan only
ground floor has been permitted to be used as commercial

664
purpose. The Apex Court was not called upon to decide
whether the Nursing home was included in the definition of
clinic and therefore, that point has not been commented upon
or touched by the Hon'ble Supreme Court but relying on the
Oxford Dictionary meaning and the judgment of our Hon'ble
High Court delivered in O.A. No. 3239 of 1996, I am of the
view that the facts of Dadar Avanti case were different.
Hence, the ratio of the Hon'ble Supreme Court delivered in
that case is not applicable to the facts and circumstances of our
case.
39. It was contended before the Hon'ble Supreme Court that
when Application for change of user was made in 1987 under
Regulation in force it was not permissible for allowing the
change of user from residential to commercial through at a
later point of time the Regulation had been changed and such
permission could be accorded subject to certain terms and
conditions which include requirement of making an
independent access to the building. The Hon'ble Supreme
Court turned down the said plea of Respondent nos. 3 & 4 that
they could seek change of user in 1987 for the flats they
occupied on second floor. The ratio of this case is not
applicable to the facts and circumstances of our case. In our
case the Gladhurst building was constructed by builder
Defendant No. 1 for residential purpose and in terms of
Development Control Rules in force since 7-1-1967

665
Regulation 7(iii) permitted any residential zone's building to
be used for medical or dental practitioner's clinic and
dispensary and group medical centre and the permission of
change of user granted by BMC is in respect of ground floor
flats of Defendant No. 2 and 3 and not flats which were on the
second floor. So on ground floor the permission to run the
clinic or nursing home was permissible in terms of Regulation
7(iii) of Development Control Rules framed by the
Government for Greater Bombay. So the facts of Dadar
Avanti case are different from the fact obtainable in our suit
and therefore, this ruling is not applicable to the facts and
circumstances of our case. In our case the BMC rightly
granted the permission to the Defendant nos. 2 and 3 after
considering all the aspects of the matter and after considering
the No Objection given by the Defendant No. 1 Builder, the
owner of the Building and the Rules and Regulations in force
at that time.
53. In my view, the learned Judge could not have
distinguished the judgment of the Supreme Court by observing
as above. The Supreme Court had before it the factual aspects
in toto. It was not the case of B.M.C. also before this Court as
also the Supreme Court that at the relevant time, the D.C.
Regulations permitted the user contemplated, proposed,
commenced or continued by Dr. Nerkar. Unlike the stand
taken in the written statement in the suit, before the Supreme

666
Court, the Corporation did not urge that the Rule 7(iii) would
cover the usage as surgical nursing home. In fact, the stand
taken was as recorded by the Supreme Court in para 3 viz.,
that when the plan was originally sanctioned, the change from
residential to commercial was permitted. Therefore, it is futile
to urge and observe as well that this decision of the Supreme
Court would not apply to the case at hand. The finding of the
trial court that the building before it, was constructed for
residential purpose and the D.C. Rules in force on 7th January
1967 permitting the user as above or the permission could
have been granted in respect of ground floor flats, is not at all
sustainable.
54. In the present case, the Civil Court has observed very
clearly that Flat Nos. B-1 and B-2 are situate on the ground
floor and the then D.C. Rules make a distinction between
ground floor and upper floors. The D.C. Regulations placed
before me, more particularly Regulation No. 7(iii) do not state
in any manner that a medical and dental practitioner's clinic
and dispensary can be set up in premises in residential zone
provided they are situated on the ground floor. The distinction
that is made by the learned Judge of the City Civil Court is not
permissible in the light of phraseology of Regulation 7
reproduced above. Therefore, in my view, the location of the
flats is no ground for distinguishing the binding judgment of
the Supreme Court.

667
Therefore, the finding that on the ground floor nursing home
was permissible is of no use to distinguish the judgment of
Supreme Court. Before the Supreme Court, the sanctioned
plan showed this user. Before me, that is also not the position.
If sanctioned plan had permitted such user, then it was not
necessary to apply to the Builder and to Corporation under
Rule 7 of D.C. Rules. The Builder's affidavit belies this
position. The other finding that B.M.C. has rightly granted the
permission and after considering no objection by the builder,
is also of no assistance. Firstly, in the very same para, where
the judgment of the Supreme Court has been distinguished by
the learned Judge of the Civil Court, there is no occasion to
observe that B.M.C. permission was granted after considering
NOC by the builder and that it has been so granted by
considering other aspects as well. If this is the observation
made, then, it is clear that the learned Judge was aware that he
could not have brushed aside the binding judgment.
55. In my view, therefore, the controversy is fully covered by
the decision of the Supreme Court. The Supreme Court had on
facts clearly observed that the plan of building before the
Supreme Court, approved by the Corporation, allowed ground
floor to be used for clinics and garages and upper floors to be
used for residential purposes but by this it cannot be said that
the D.C. Rules then prevailing permitted any commercial
activity or activity of the nature commenced by defendant

668
Nos. 2 and 3 on the ground floor of the residential building. In
fact, no attempt was made by the Corporation to justify this
finding of the City Civil Court.
56. It is only a faint attempt by party in person to justify the
said finding and for that purpose he places reliance upon
certain notifications.
57. The applications made on 24th January 1985 by defendant
Nos. 2 and 3 are for approval of change of user of the ground
floor flats from residential to nursing home for medical
dispensary and clinic as permitted under Section 7(3) of Part II
of D.C. Rules. To these applications, what was enclosed was
the plan of the ground floor flats, agreement dated 10th
January 1985, its registration details and the letter of Builder
(defendant No. 1) dated 11th January 1985. The letter of
builder is eloquent enough because, the no objection granted
by the builder is conditional viz., on obtaining permission
from Corporation. On the applications made by defendant
Nos. 2 and 3, 4th defendant through its officers makes the
endorsement that there is existing ground plus six floor
building. The permission sought by the Architect is for change
of user of two flats on the ground floor. Flat B-1 abuts 40 feet
wide road whereas Flat B-2 is behind stilt. Upon charging
some premium, permission could be granted is the
endorsement. Premium has been paid. On 5th March 1985
Corporation grants permission subject to the conditions

669
enlisted therein. Defendant Nos. and 3's Architect addressed
compliance letter on 8th May 1985. Similar is the
correspondence with regard to other flat i.e. Flat No. B-2.
58. It appears that the matter was thereafter again examined by
the Law Officer of B.M.C. and the decision was taken that
permission to register nursing home would always be without
prejudice to the rights of B.M.C. to take action under the D.C.
Rules. The Law Officer of Corporation advised that change of
user is not done and the requirements under the Bombay
Nursing Home Registration Act and Rules thereunder are
fulfilled. The registration granted after affixing rubber stamp
on the format which was given below this letter.
59. I find nothing in the Circulars dated 29th April 1985 and
26th April 1985 by which it could be said that the decision of
Supreme Court (Supra) would not apply.
60. It is also necessary to refer to the deposition of defendant
No. 2 in the Civil suit recorded on 29th March 2001. He
produced all the above documents and in the cross
examination in para 4 this is what is stated:
The changes for my flats B-1 and B-2 are shown in the
approved plan in Ex. colly. Builder has not given any plan for
the change of user of flat No. B-1 and B-2. Builder had
permitted me to put three separate doors as per Ex.-9. Ex-5
Plan relates in respect of construction of three doors. Ex. 9
letter issued by builder is pertaining to permission granted for

670
the construction of three doors. Plan annexed to Ex.9 is the
same plan given by builder to me. There is no signature of the
builder on the said plan annexed to Ex.9.
...I do not have the copy of the application filed by me through
Architect to BMC, for approval of Plan Ex.9.
...It is not true that defendant No. 1 builder has not given a
permission to open the door on the stilt portion i.e. towards
East side of flat No. B-1. Doors are shown in Plan Ex. 5.
There is no door to labour room. Ex.6 has been issued on
17/4/1985.
... I applied to the builder to issue me the permission for the
change in user. I do not have the copy of the letter in the
Court. I applied to the builder as per the terms I purchased
flats for Nursing Home and I intended to give this letter to the
Corporation and the Bank. Rs.8200/- payment was made to the
Corporation for staircase premium on 27/5/1985 i.e. as per
Ex.10 colly.
... I have obtained the permission of change of user of my both
flats.
61. The Corporation's witness in the cross examination states
as under:
... Permission for change of user is granted under Sec. 342 of
BMC Act. Taking into consideration the development Control
Rooms in force in 1985, permissions seem to have been
granted. I have put in more than 11 years service in BMC.

671
This was residential zone. As per rules and regulations in force
in 1985, and even till today in residential zone, permission can
be granted for Nursing Home. It is the special permission
granted by BMC. I cannot tell as per record what which
regulations in force governing such matter.
... The development control rules quoted in the plaint at pages
7 and 8 are not known to me.
... It is not true to say that we had granted permission for
alteration, additions and change of users to Mr. B.M. Shah and
his wife by overlooking the then rules and regulations in force.
62. Thus, above mentioned documents and the circulars do not
support the case that building regulations, then in force,
permitted change of user from residential to commercial. It is
only by relying upon the abovementioned regulations that the
permission is sought to be justified, but as observed by me,
one cannot conclude that the attention of Supreme Court was
not invited to all these aspects and that the Supreme Court
decision is in ignorance of the D.C. Rules, then in force. State
of evidence being what it is, it is not safe to conclude that the
regulations which are now placed before me were the one
relied upon by the Corporation. In any event, the Supreme
Court having observed that no change from residential to
commercial/ non residential was permissible, then, no reliance
can be placed on the above documents. As to whether
Corporation permitted user of ground floor premises for non

672
residential purpose in a residential zone, nothing has been
brought on record. That is not even the case of Corporation in
the deposition Therefore, the distinction sought to be made by
the party in person on the basis that before the Supreme Court,
second floor premises were involved whereas ground floor
premises can always be utilised for commercial/ non
residential use, is baseless.
63. Thus, the conclusion reached by the Courts below is
contrary to the materials produced before them. The Supreme
Court decision is binding on them. That apart, the basis of
distinguishing it is not sound at all. Even the Regulations
produced before me do not support the stand of defendants 2
and 3 as well as B.M.C. The evidence to substantiate the pleas
in their written statement is not reliable and trustworthy at all.
The admissions therein are fatal to their case. Therefore, the
attempt to justify their actions must fail. As observed above, in
these state of affairs, it is not necessary to go into other issues
and decide other contentions. Assuming that Clause 12 of the
Agreement must be read in the light of D.C. Rules then
prevailing, even then, the permission granted by B.M.C. must
fail once the Rules do not contemplate any change of user as
held by the Supreme Court. Further attempt to point out that
relevant D.C. Rules were not perused and interpreted by the
Supreme Court also fails for reasons recorded above.

673
64. In the light of above findings, it is not necessary to decide
whether the term "Clinic" would include "Nursing Home" or
not. In any event, that plea is not open after the Supreme Court
decision.
65. To conclude, the judgment under appeal rendered by the
City Civil Court, therefore, is erroneous and unsustainable.
The same is, therefore, quashed and set aside. First Appeal
No. 129 of 2003 is allowed and a permanent injunction shall
issue restraining defendant Nos. 2 and 3 from using or
continuing the use of Flat No. B-1 and B-2 situate in
Gladhurst Building for non-residential purpose unless they
obtain fresh permission from B.M.C. by invoking D.C. Rules
1991 as amended till date. Same conclusion to follow with
regard to the judgment of the Coop. Appellate Court. The
same also stands quashed and set aside. Rule is made absolute
accordingly.
66. However, as observed by the Supreme Court, if
continuance of the user by Defendant Nos. 2 and 3 is
permissible under the D.C. Rules now in force, then, it is
always open for defendant Nos. 2 and 3 to apply for such
permission or continuation. Any application, if made, in that
behalf would be considered in the light of the regulations
prevailing now and should be dealt with in accordance with
law.

674
67. As far as C.R.A. No. 273 of 2003 is concerned, the
grievance of party in person is that some remarks have been
made against him in the judgment under appeal and more
particularly in para 52 thereof, while disposing of chamber
summons No. 1105 of 2000. His grievance is that the action of
taking out chamber summons was justified. In any event,
remarks should not have been made against him and they were
not called for at all.
68. Since I have just now decided the wider controversy and
the arguments were confined before me to the same, in my
view, it is not necessary to take cognisance of the grievance
made in chamber summons No. 1105 of 2000 which is taken
out by defendant No. 2. The order of the learned trial Judge
not inclined to take action on this chamber summons and
dismissing it is sustained. However, considering the fact that
the defendant No. 2 was appearing in person, he had to take
time and effort to prepare himself and he was required to
attend court on several dates so also he being a senior citizen,
the remarks made by the trial Judge are expunged. C.R.A.
disposed of accordingly.
69. As far as Contempt Petition No. 176 of 1989 is concerned,
considering the averments therein and the reply filed to the
same, in my view, the remedy of the party-in-person was not
to invoke the contempt jurisdiction of this Court but to take
out appropriate proceedings, if in his submission, there is

675
obstruction to his carrying on the activities. In any event, since
the judgment under appeal is set aside, the F.A. is allowed so
also the petition and permission is granted to defendant No. 2
to apply to B.M.C. in the light of D.C. Regulations now
prevailing, it will not be necessary to enter into earlier
controversy. Needless to state that upon permissions being
granted under the D.C. Regulations now in force, it would be
open for defendant No. 2 and 3 to carry on their non-
residential activities but since injunction is granted by me and
the order under appeal is set aside, there is no need to entertain
the grievance of petitioner with regard to breach of interim
orders passed by this Court. Even otherwise that is an aspect
which cannot be properly decided on affidavit. In my view,
there is substance in the contention that the averments in the
contempt petition do not enlist specific acts of violation or
breach of interim orders.
70. In the circumstances, there will be no order on the
contempt petition. It is dismissed with no order as to costs.
71. In view of disposal of Writ Petition Civil Application No.
2356 of 2004 taken out by respondent in Writ Petition 1812 of
1987 is disposed of. Similarly Civil Application No. 828 of
1990 taken out by respondent in Writ Petition 1812 of 1987
does not survive and the same is disposed of accordingly. In
view of disposal of first appeal No. 129 of 2003, Civil

676
Application No. 1034 of 2005 does not survive and the same
is disposed of accordingly.

677
Bombay High Court
Chheda Housing Development ... vs Bibijan Shaikh Farid
And Ors. on 15 February, 2007
Equivalent citations: 2007 (3) MhLj 402
Author: F Rebello
Bench: F Rebello, V Tahilramani
JUDGMENT
F.I. Rebello, J.
1. This an Appeal by the Plaintiff. Along with the Appeal
respondent Nos. 1 to 9 and Respondent Nos. 10 and 11 have
also filed cross objections. All of them are being heard and
finally disposed of by this judgment.
2. The Appeal is preferred by the Appellant who is the original
plaintiff. The respondent Nos. 1 to 9 are the original defendant
Nos. 1 to 9, Respondent No. 10 is the original defendant No.
10, respondent No. 11 is the original defendant No. 11 and
respondent Nos. 12 and 13 are the original defendant Nos. 12
and 13. The respondent Nos. 1 to 9 are the legal heirs of one
late Shaikh Farid Shaikh Kalander, who had filed a suit in
respect of the suit property and other properties against
Behramjee Jeejeebhoy Pvt. Ltd. being Suit No. 2105 of 1989,
claiming adverse possession against Behramjee Jeejeebhoy
Pvt. Ltd. Consent terms came to be filed on 22nd June, 1992
under which a declaration was granted declaring late Shri
Shaikh Farid Shaikh Kalandar to be the owner of the property.

678
The consent decree came to be registered on 24th August,
2000. It is the case of the Appellants that on 20th April, 2004
there was a Memorandum of Joint development entered into
between 10th respondent and the appellants for joint
development of the property which was identified as a specific
part of Plot C-2 in terms of the lay out scheme/Sub Division
sanctioned under reference No. C/Office-7A/Sub
Division/SR/3496 dated 15th October, 2002. A certificate had
been issued by the Advocates and Solicitors for respondent
No. 10 that the title in the said property was in late Shaikh
Farid Shaikh Kalandar and respondent No. 10. Respondent
NO.10 in respect of the cause of action against respondent
Nos. 1 to 9 filed a suit being Suit No. 2180 of 2004, for
various reliefs amongst others for an injunction against
respondent Nos. 1 to 9 from causing any obstruction or
hindrance or interfering with the right of the respondent No.
10 from exercising the power under the Power of Attorney.
The plaint was amended by adding respondent No. 11 as
defendant. The suit came to be decreed on 10th March, 2005.
The Appellants contend that another certificate was issued on
23rd March, 2005 by the Advocate for Respondent No. 10,
certifying that the certificate of title dated 16th March, 2004
issued by the Advocates was still good and the said property
was free from all encumbrances and reasonable doubts.

679
At this stage it may be pointed out from the pleadings that the
case of Respondent Nos. 10 and 11 is that there was an
agreement entered into between the respondent Nos. 10 and 11
on 22nd January, 2004 whereby the respondent NO.11 was
entrusted the right to develop the larger property. It may also
be added that in respect of the sub division plots identified as
sub plot No. A1, B and C1 were to be developed by one
M/s.R.N.A. Builders. An agreement came to be entered into
on 24th March, 2005 between the respondent Nos. 1 to 9 and
10th respondent on the one hand and the appellants on the
other whereby development rights were granted to the
Appellants in respect of 2,00,000 sq.ft. of plot C-2. One of the
Clauses in the Agreement was that the area admeasuring 2.00
lakh sq.ft. to be built was by utilising the FSI of 1.00 i.e. 1.00
lakh sq.ft. and by respondent Nos. 1 to 10 making available
TDR to the extent of balance 1.00 lakh sq.ft. which would be
available and/or generated from the larger portion of the
property or by acquiring slum TDR from the market if
required. Pursuant to this agreement the joint development
agreement of 28th April, 2004 was returned back as cancelled.
On the same day respondent Nos. 1 to 10 issued letter of
confirmation that it authorised respondent No. 10 to initiate
and execute development agreement of lakh sq.ft.on Plot C-2.
The Appellants paid to respondent Nos. 1 to 11 a sum of Rs.
2,60,00,000/-, the receipt whereof is acknowledged by

680
respondent Nos. 1 to 10. Further part consideration of Rs.
40.00 lakhs was to be paid within 15 days from the owners
obtaining Plinth Commencement Certificate. The balance
amount was to be paid in 5 equal quarterly instalments and the
last instalment was to be Rs. 1.35 crore. A sum of Rs. 5.00
lakhs was to be paid on completion of transaction and on
execution of vesting documents including Conveyance in
favour of the Society/Societies, Organisations as may be
formed and registered by the Developers of premises in the
building/s to be constructed by the Developers under the
Agreement. The possession was given to the appellant by
letter dated 24th March, 2005 and recorded. A supplemental
agreement was entered into on 25th March, 2005 whereby the
price was increased to Rs. 3.35 crores.
Pursuant to a public notice on 14th May, 2005 a claim was
filed by the 11th respondent. The Respondent No. 11 is a
company incorporated under the Indian Companies Act and
whose Directors are the members of the family of respondent
No. 10. Pursuant to this, correspondence was exchanged on
one hand between the Appellants and Respondent No. 1 to
10. As Respondent Nos. 11, 12 and 13 were developing on an
area which was to be provided as access to Plot No. C-1, a
notice was also given to them. A suit came to be filed in which
Notice of Motion was taken out, being Notice of Motion No.

681
1915 of 2005 for ad-interim relief. The impugned order came
to be passed on 1st September, 2005.
3. The defence of Respondent Nos. 10 is that there were two
immovable properties belonging to respondent Nos. 1 to 10,
one at Goregaon and the other the suit property at Kandivali.
Respondent No. 10 approached the appellants for financial
assistance for development the property at Goregaon to the
tune of Rs. 5.00 crores. Accordingly, two allotment letters
dated 24th March, 2004 and 20th April, 2004 were issued to
secure part payment of Rs. 2.50 crores which had to be made
by the appellants. It was the understanding that payment was
to be made against these two allotment letters. The Appellants,
however,desired that there should be a proper security as they
are investing a considerable sum and the appellants sought
security of 8.00 lakhs sq.ft. of FSI of suit property and that is
how the joint development agreement in respect of Kandivali
property was executed, as the Appellants apprehended that on
account of several tenants and occupants in Goregaon
property, the development proposal may not be feasible and in
those circumstances the property would not constitute an
adequate security. It is in these circumstances a security was
given of 8.00 lakhs which was subsequently was reduced, as
the appellants failed to bring in further sum of Rs. 2.50 crores.
The security was reduced to 2.00 lakh sq.ft. In the alternative
it was submitted that the Agreement was adjudicated and

682
stamped as a Development Agreement and the law is settled
that Development Agreement cannot be specifically enforced.
The respondent No. 11 have adopted the stand of the
respondent No. 10. It was pleaded that there is suppression of
material facts and that the suit as filed is not maintainable. The
Appellants were aware of the Agreement entered into between
the respondent Nos. 10 and 11 on 22nd January, 2004 and it is
not open to the Appellants to contend that it was only noticed
during the search of the proceedings of the City Civil Court.
The Agreement between respondent Nos. 10 and Respondent
No. 11 are prior agreements and must take precedence to the
Agreement between the appellants and respondent Nos. 1 to
10. Respondent No. 11 made payment to respondent No. 10 as
per Agreement dated 22nd February, 2004 and development
work was in progress. The stand of respondent Nos. 12 to 13
is that the appellants have an alternative access in terms of the
development plan of the property and as such the relief as
prayed for could not be granted. Respondent Nos. 1 to 9
adopted the stand of respondent No. 10.
4. The learned Single Judge held, relying on the Agreement
that the area agreed to be sold was part of Plot C-2. based on
the sanctioned lay out. The learned single Judge also held that
at the prima facie stage it was not possible to hold whether the
Agreement is a Development Agreement. The learned single
Judge held that the Agreement would have to be read as a

683
whole and material will have to be considered which could
only be done at the trial of the suit. The contention urged that
in view of Section 14 of the Specific Relief Act, the
Agreement could not be enforced was rejected by the learned
Judge by holding that the issue can only be decided at the final
hearing of the suit. The various other contentions urged in
support of the contention that the Agreement was a
development agreement were rejected on the ground that the
document would have to be construed by considering the other
material on record and the evidence. After so holding and on
considering the documentary evidence, the learned single
Judge held that he was satisfied that a prima facie case has
been made out. The learned Judge thereafter was pleased to
make the Motion absolute in the following terms:
Defendants, their servants, agents are restrained by an order
and injunction from in any manner disposing of or alienating
and encumbering an area admeasuring 2 lakh sq.ft. on Plot No.
C-2 more particularly described in second schedule to the
Agreement dated 24th March, 2005 as also utilising benefit of
TDR/DRC generated by defendant Nos. 1 to so as to adversely
affect Plaintiffs right to construct and sell the said area in
accordance with the agreement Exh.F-4 to the Plaint.
After this order was pronounced certain additional
submissions were made and the learned Judge thereafter was
pleased to further order as under:

684
46. In my view, once the injunction/interlocutory relief is to
protect right of Plaintiffs under this agreement, plaintiff cannot
get anything more than what is the entitlement under the
agreement. Hence, the defendant Nos. 1 to 11, their servants,
agents are restrained by an order and injunction from in any
manner disposing of or alienating the area of 2 lakh sq.ft. to be
used and utilised by construction of building as shown on plan
annexed as Annexure "B" to the agreement, available as free
sale on the property being part of property being C-2 shown
shaded in the same plan and more particularly described in the
Agreement so as not to adversely affect plaintiffs right under
the same. The injunction granted in the foregoing paragraphs
be read in this light and the clause in the Agreement
reproduced above.
5. The Appellants are aggrieved by these observations in
para.46 of the order, which according to them has resulted in
denying them protections for their right of development of
additional 1,00,000 sq.ft. by way of TDR on the suit plot.
They are also aggrieved by the non-grant of the injunction in
respect of the suit way.
6. There was a delay in preferring the Appeal, which on a
Motion taken out being Notice of Motion No. 3537 of 2005
the delay was condoned. It is only after this, did the
respondent Nos. 1 to 9 and 10 and 11 file their cross
objections.

685
7. On behalf of the Appellants the issues raised and
submissions made are as under:
(a) After having held, that the Plaintiffs have made out a prima
facie case and having made the notice of Motion absolute in
terms as mentioned in para.42 of the judgment, could the
learned Judge clarify the order by adding a rider at the end of
para.46 of the judgment which reads as under:
The injunction granted in the foregoing paragraphs be read in
this light and the clause in the Agreement reproduced above"
which rider has the effect of nullifying the protection to the
appellants and thereby permitting the respondents to deal with
the TDR to the extent which could be made available by the
respondents to the appellants by acquiring or purchasing slum
TDR from the open market free from all encumbrances,
claims and dues.
(b) Whether inspite of the specific provision in the agreement
granting to the appellants right of way through the Plot No. 2A
to Plot A-2 of the respondents property the relief in respect
thereof should have been refused.
8. On the other hand on behalf of the respondent No. 10 it is
contended that the Agreement was an agreement for security
and in the alternative is a development agreement and
consequently the appellants are not entitled to specific
performance of the agreement.

686
On behalf of respondent No. 11 it is submitted that the rights
of the respondent No. 11 were antecedent/prior to the rights of
the appellants as the agreement entered into between the
respondent No. 11 and respondent No. 10 was dated 22nd
January, 2004 prior to the agreement between the appellants
and respondent Nos. 1 to 10 which was on 20th April, 2004
and further that the agreement dated 22nd January, 2004 had
been acted upon and that the agreement between the appellants
and respondent Nos. 1 to 10 was an agreement for
development and consequently could not be specifically
enforced.
On behalf of the respondent Nos. 1 to 9 the argument
advanced on behalf of the respondent No. 10 has been
adopted.
9. On behalf of respondent No. 12 and 13 it is contended that
the issue relating to right of way was not seriously pressed or
argued or placed for consideration before the learned single
Judge. At any rate, it is submitted that the appellants are
claiming right on plot C-2 which has an access in terms of the
approved plan. In these circumstances the Appellants on the
ground that there was an existing right of way can claim no
right as pursuant to the approved lay out plan it is the plan as
approved, which has make provided for access to the various
sub divisions.

687
10. From the above submissions of the parties the principal
contentions which have to be decided are:
(1) Whether the appellants have made out a prima facie case
that the agreement relied upon was an agreement for sale and
not an agreement for security and/or alternatively an
agreement for development which could not be specifically
performed. If prima facie case is made out, for specific
performance then whether the appellants are entitled to an
injunction to restrain the respondents from alienating,
transferring or using the TDR available from the suit plot and
the remaining plot pending the hearing and final disposal of
the suit.
(2) Whether the appellants have made out a case for grant of
injunction in what is described as the existing right of way,
after a lay out plan has been approved on 15th October, 2002
and an access has been provided to Plot C-2 to the D.P. Road.
11. We shall first deal with the contention as to whether the
appellants have made out a prima facie case. In this context
prima facie, a finding will have to be first recorded, that there
is an agreement which can be specifically performed. It is only
on arriving at this conclusion, can it be said that the appellants
have made out a prima facie case warranting grant of interim
injunction subject to the other requirements of balance of
convenience and irreparable loss and injury. The learned
Single Judge on a consideration of the various documents

688
including the agreement has come to the prima facie finding
that the agreement is an agreement to sell, which can be
specifically enforced. The respondents, therefore, will have to
make out a case that the finding by the learned single Judge is
perverse. The view taken by the learned trial Court, ordinarily
will have to be upheld, if it was a view capable of being taken,
irrespective of the Appellate Court arriving at a conclusion
that another view is probable which is a better view and as
long as the findings based on which the view is taken are not
perverse.
Before we answer the issue, let us consider the judgments
cited at the bar for the proposition as to which contract can be
specifically enforced. Let us first deal with the judgment relied
upon by the appellants. In the case of Vallammal Rangarao
Ramachar v. Muthukumaraswamy Gounder and Anr. (1982) 3
SCC 508, the Supreme Court noted, that there were
interpolations of material nature in the document and no
explanation was offered on that count. The Appeal preferred
by one of the appellants (Defendant No. 2) was dismissed. The
Court held that the motivated interpolation in a solemn
document completely vitiates the document. In the other
Appeal which was pending, the Court noted that the High
Court after evaluating the evidence recorded a conclusion that
the plaintiff was always ready and willing to perform his part

689
of the agreement and consequently found no reason to differ
from the view taken by the High Court.
At this stage we may note the judgment, reliance on which
placed by the Counsel for respondent No. 11 namely Bharat
Barrel & Drum Mfg. Co. Ltd. v. Hindustan Petroleum
Corporation Ltd. and Ors. AIR 1998 Bom.170. The issue
before the Division Bench of this Court was consideration of
explanation to Section 16(c) of the Specific Relief Act. That
explanation requires that the plaintiff must aver performance
of or readiness and willingness to perform the contract
according to its true construction. The learned Division Bench
held, that the correct interpretation would be, if the plaintiff
avers his readiness and willingness to perform the contract
according to its true construction by the Court. The Court also
noted that in an ordinary suit for specific performance where
the parties are ad idem about the interpretation of the
agreement it is not necessary that the plaintiff should adopt
any particular set off words to indicate that he was and is
ready and willing to perform the agreement. The Court on the
facts of that case was considering not an ordinary suit for
specific performance, but a case where parties were not at ad
idem about the interpretation of an agreement. The ratio of the
judgment therefore is that parties must aver readiness and
willingness to perform the contract according to the
interpretation the Court places upon it in a case where there is

690
a dispute about its true interpretation. The ratio of that
judgment will, therefore, have to be applied in a case where
there is a dispute as to the true interpretation of a document for
agreement to sell. The parties must aver in such a case that
they are ready and willing to perform the contract as the Court
interpreted by the Court. In the instant case firstly we are at an
interim

Hc & sc judgments aoa with index v1.7

Hc & sc judgments aoa with index v1.7

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Hc & sc judgments aoa with index v1.7