In this blog post, Sagar Gursahani provides legal solutions to property disputes arising in flats located in Gujarat, Maharashtra, and Goa. 

 

Introduction

The purpose of the development of flats at such an increasing rate is an acute shortage of land in a country of 1.25 Billion people. The land is less and families are more. Therefore, the construction of flats has increased at an enormous rate in the country. The construction of multiple units on a piece of land requires that the construction takes place in an organized as well as in a structured approach. Certain mandatory conditions are imposed on the Builders/developers by the competent authorities so that the construction does not violate the rights of any of the people.

The prices of the property are exorbitant in our times, and a civil dispute in a court of law takes not less than a decade. There are a lot of complications that arise between the builders, developers and the flat buyers before and after apartments have been constructed. The disputes that arise out of the apartments involve the banks, builders, end users, investors as well as government authorities. The builders/promoters usually take loans from the banks and provide the land itself as the security. Additionally, the builders might give them a personal guarantee or a bond signed by them. If the builders fail to repay the loan as per the loan agreements and terms of the guarantee, the banks usually resort to Debt Recovery Tribunal to recover its dues. Debt Recovery tribunal is a forum wherein the Banks and financial Institutions approach for expeditious adjudication as well as recovery of the debts. With the coming of SARFAESI Act in 2002, the recovery of debts due to banks and financial institutions has become more simplified, and the banks recover the money from their debtors without even knocking the doors of the court. Otherwise, the property disputes go on for decades in a civil court.

Due to the increase in malpractices, shams, dual sale by the builders as well as difficulties faced by the purchasers of property due to the irregularities in construction by the builders, a need was felt for the introduction of a statute whereby all the real estate related matters would be solved. Real Estate Regulatory Authority Act, 2016 is a strong step to maintain the transparency in the real estate sector as well as to create a check on the malpractices that are done by the builders while selling off the flats to the end-users as well as investors. The important provisions of the RERA Act have also been discussed in this guide.

One of the landmark amendments pertaining to the property law came via 44^th Amendment in the Constitution. It was through this amendment that the ‘Right to property’ which was a ‘Fundamental Right’ made into a ‘Constitutional Right.’ The right to land was a fundamental right and thereby it was very difficult for the government to proceed with its socialistic agenda of reforms pertaining to land reforms. As part of the 44^th Amendment, 1978, two articles 19(1)(f) as well as Article 31 were deleted from the constitution. Thereafter, a new Article 300A was inserted by the constitution. By the insertion of this Article; the right to property was made into a Constitutional Right. There were two exceptions that have been created by the 44^th Amendment. Firstly, where the acquired property belongs to an educational institution established and administered by a minority, the state has to ensure that the amount fixed/determined for the attainment of such property would not abrogate the rights of the minority. Secondly, where the state has acquired any property, which is made for personal cultivation, and the land is within the ceiling limits as applicable under the law, then the state must pay compensation to the respective person at the market value for the land/building or the structure made on it.

 

Family Settlement

It is very important to understand what a family settlement is. A family settlement is an agreement between members of a family whereby they amicably and mutually decide to divide and distribute the family property amongst themselves. It is usually done so as to divide the joint property. Thereby a settlement agreement is usually drawn up, and bifurcation of the assets of the family is done.

The Supreme Court in the case of Ram Charan v. Girja Nandini[1] has tried to explain the purpose of a family settlement.

The court held that the word ‘family’ is not to be understood in a narrow sense of being a group of persons recognized in law having a right of succession in the property at the time of the dispute. It is actually the expectation that such a settlement would result in ensuring amity, goodwill and good relations amongst people having relationships. The object of a family settlement is to settle the existing as well as future disagreements arising amongst the members of a family.

What is necessary under a family agreement is that the people amongst whom the agreement takes place must be either related to each other, by love, affection, trust[2]. Another purpose of creation of family settlement is that the relations between the family remain amicable and peaceful and the settlement between the family is done without animosity and hatred. In Sadhu Madho Das v. Pandit Mukand Ram[3], the court stated that it was a well settled position that a compromise or family settlement is based on the assumption that there is an antecedent title of some sort in the parties and thereby the agreement acknowledges and defines what the title is, the rights of each of the party is recognized, and every party relinquishes all their claims to the property. The court further held that conveyance is not required as the title is not passed from one person to another.

 

Maharashtra

It would be appropriate to have a look at the position of flat regulations in the state of Maharashtra. Before 1963, the state of realty sector was despicable in Maharashtra as there were sundry abuses, malpractices as well as mismanagement issues relating to the construction, sale, management, and transfer of flats which were taken on ownership basis.

The Maharashtra Ownership Flats (Regulation of the Promotion, Construction, Sale, Management, and Transfer) Act, 1963 (“the MOFA”) was enacted with a view to regulating the promotion, construction, sale, management and transfer of flats sold on an ownership basis in Maharashtra. It lays down the responsibilities of real estate developers/builders with respect to flats sold by them as well as the rights of flat buyers. The aim of the act was to safeguard the interest of the flat purchasers and show transparency as well as discipline by putting an end to malpractices.

It is very important to understand the definition of a flat. As per MOFA, 1963, a flat is “A separate and self-contained premises, which is used or is intended to be used as a Residence, Office, Show-room, Shop, Go down, carrying on any industry or business including a Garage and the premises forms part of a building.” The term flat also includes an apartment.

MOFA regulates the activities commencing from entering into an agreement with a builder (called promoter) with the intending buyers of the flats and ends with the transfer of the building and the land to the society or the company after such society or the company is formed wherein the builder/ promoter has to complete the necessary formalities for their formation.

 

Issues Pertaining to Maharashtra Ownership of Flats Act, 1963

A promoter[4] under the MOFA Act has been vested with a lot of responsibilities under the act. Basically, he is a person who constructs a building of flats which are sold by him. Under section 3 of the MOFA Act, the liabilities of the promoter are explained. First of all, a promoter is supposed to make full and true discloser of the nature of the title to his land wherever the lands are constructed/to be constructed and must be certified by an advocate and must have been entered in the property card or the extract of a village or another revenue record. A promoter must further disclose to the prospective buyers about all the encumbrances which exist on the land or which may occur in a future course of time. He is also required to give an inspection of the buildings built on a notice of seven days or sanctioned plans as well as specification of the building which has been approved by the local authority. The promoter must also disclose the nature of fixtures, fittings as well as other amenities provided or that would be provided. He must also specify in writing the tentative date by which the possession of the flat would be handed over. He should prepare the list of flats with the flat numbers which have been taken/agreed to be taken, the names and the respective addresses of the parties, the price charged as well as the terms and conditions of the flats. If some organization has taken the flats, he must also state in writing the nature of the organization of persons to be constituted, title to be passed as well as terms and conditions governing such organization who have taken the flat. A Promoter/developer must get the completion certificate from the competent authority before transferring/selling it to the buyer. This means that he is supposed to get no-objection certificates from various departments of the development authority for basic amenities such as water and electricity. The promoter must also disclose the extent of carpet area including balconies, the price of the flat with intervals of installments, nature as well as the description of common area and facilities. He is responsible for paying all outgoings including all the taxes in respect of flat until he transfers the property to the flat owners/society/company. In a case wherein the promoter fails to fulfill his promise and deliver the possession of the flat within the specified date in the agreement or any further agreed date or 6 months wherein it is beyond the control of the promoter, then he would be liable to refund the amounts received by him as well as 9% interest per annum till the amount is refunded. Once the agreement of sale has been executed, the promoter is not allowed to create any mortgage or any charge on the flat without the consent of the purchaser of the flat. The promoter is liable to execute a written agreement which would be registered under the registration act before he accepts any payments as an advance which would be not more than 20% of the actual sale price. The promoter also has to take steps for formation of a cooperative society or a company. The Application for the formation of the society must be submitted to the society within a span of 4 months from the date of possession of the flats. Other than the formation of a cooperative society, he is also liable to convey the title to the cooperative society of the flat buyers within a span of 4 months from the date of formation of the society. Under Section 5 of MOFA, the Promoter is supposed to have separate bank accounts of all the sums taken as advance or deposit.

It is very important to note that as per section 4A of MOFA, even if an agreement is not registered under section 4, it would be admissible as part of the evidence in a suit for specific performance or as evidence for part performance under section 53A of Transfer of Property Act.

The provisions of MOFA, 1963, as well as the provisions of the Maharashtra Co-operative Societies Act, 1960, the rules framed thereunder and the bye-laws of the society, run parallel to each other. If the promoter has surrendered the property to the provisions of the Maharashtra Apartment Ownership Act, 1970 (MAOA), registered a declaration u/s. 2 of MAOA, 1970 in that case, it is mandatory for the promoter to notify the Registrar of Co-operative Societies the fact of registering a declaration under the MAOA. In that case, it will not be legitimate to form a co-operative society or a company and each apartment owner gets rights to the exclusive ownership of his apartment in accordance with the provisions contained in the declaration by the promoter u/s. 2 of MAOA.

 

What happens when the Promoter fails to deliver possession on the date mentioned in the sale agreement?

As earlier stated, if the promoter is not able to deliver the possession of the flat as per the date which has been mentioned in the sale agreement or 6 months from the date in case of reasons beyond the control of the promoter, then the promoter shall be liable to refund the amount to the flat taker along with an interest of 9% interest per annum till the date of refund.

In the case of Debraj Chatterjee & Anr. Vs. M/S. Unitech Limited[5], the parties had entered into a Buyers Agreement dated 22.10.2008 with the Bengal Unitech Universal Infrastructure Pvt. Ltd., who were the builders having total consideration of Rs. 73,14,272/- wherein a flat which had a super carpet area of 2249 sq. feet was allotted to the complainant. As per the said agreement, subject to the force majeure clause, the possession of the flat was to be delivered to the flat taker by 30.09.2011. The opposite party, that is the builders, defaulted on their commitment of delivering the possession to the complainant till the aforesaid date and the complaints sought the refund of Rs. 55, 42, 279/- paid by them alongwith interest @18% per annum. The National Consumer Disputes Redressal forum held that there has been deficiency in service by the Builders in providing the service and thereby they are liable to refund the entire amount received from the complainants plus the compensation as simple interest @12 % per annum from the date when the payment was made to the date when the entire amount along with compensation is paid by virtue of the present judgment. The builders were also made to pay Rs 2 lacks as compensation to the complainants for the mental agony, turmoil as well as harassment to the complainants.

Conveyance of the Title

Section 10 of MOFA says that if the minimum number of persons required for forming a co-operative society or a company has acquired the flats, the promoter has to submit the application for the formation of a cooperative society within a span of 4 months from the date when the requisite numbers of people have taken the flats.

Offences

A promoter who is found guilty for contravention of section 3[6], section 4[7], section 5[8], section 10[9] or section 11[10], shall be liable, if found guilty, with a term up to 3 years and/or fine. It must be further noted that if a promoter commits a criminal breach of trust with respect to any advance or deposit given to him if found guilty, be punished for a term up to 5 years and/or fine. The penalty for contravening any other provision of the Act, if found guilty would be for a term of upto 1 year and/or a fine of Rs. 10,000.

Liability of a flat taker 

It is very important to understand the liability of a flat taker when he purchases a flat. Under section 12 of MOFA, 1963, every person who has executed an agreement to take a flat would have to pay the price at the proper time and place as well as his proportionate share of Municipal taxes, water as well as electricity charges, the ground rent and other public charges in accordance with the agreement that have been done. Any person who has taken a flat, executed necessary agreement and who without any reasons, fails to comply, disregards and does not pay his dues, would be punished with a fine which may extend to two thousand rupees.

 

Deemed Conveyance

Deemed Conveyance came into scenario via an amendment to MOFA Act 2008 whereby sub-section (3) (4) and (5) to Section 11 of MOFA were inserted. It is a situation wherein the promoter fails to execute a conveyance in favor of the cooperative society. Sub-section (3) provides that if the promoter fails to execute the conveyance in favor of the society or the company or the association, the members of such organization may make an application in writing to the Competent Authority accompanied by the true copies of the agreement for sale executed by each individual member or the occupation certificate, if any, for issuing a certificate that such society/ company/ association is entitled to have a unilateral conveyance executed in its favor and to have it registered[11].

The unilateral conveyance was done by notification of the amending Rules under MOFA via Notification No. FOB 2008/CR 170/PR II dated 27th September 2010. The deemed conveyance is required to be registered as per 9(2) of MOFA Rules.

In the case of Chief Promoter vs. 5 The State Of Maharashtra, the High Court of Bombay held that it was the duty of the promoter to convey the title and execute the documents according to the agreement. If the promoter fails to perform his duty, then the competent authority steps in to fulfill it. The court further stated that if we read section 10 and 11 together and in harmonious construction, deemed conveyance is a unilateral act and it enables the flat purchasers to acquire the rights of the Promoter, his titles and the interest in the building/land. A lot of checks and safeguards are required to be done before issuing a certificate of unilateral deemed conveyance to the party. It is simply a grant of the conveyance to a party as per the agreement between the flat buyer and the builder/developer of land. The court held that because the builders have failed to perform their duty of conveying the title in favor of the buyer, the competent authority had to intervene. The court further observed that the word “unilateral” has some significance. Once the competent authority grants a unilateral deemed conveyance in favor of the applicant, he is entitled to have the execution of the certificate and avail all the rights, title and interests associated with the property.

The Cooperative Housing Societies were getting exploited by the owners of the property as well as the builders. Therefore it was the need of the hour to bring in the provision of deemed conveyance. However, it must be noted that it is the legal duty of the builder or the owner of the land to convey the title of the property in the name of Cooperative Housing Society.

The conveyance is a very important aspect of the reconstruction work or selling any units (Flats) of the Cooperative Housing Society can be done only once the conveyance has been done in favor of Cooperative Housing Society. Before the Conveyance can been done, the Cooperative Society only has the possessory rights without any legal rights of re-development or marketability.

Therefore, the Cooperative Housing Society can resort to deemed conveyance if the builder/developer has failed to convey the property in favor of the society.

To obtain deemed conveyance, the Cooperative Housing Society has to collect relevant documents which may include society registration certificate, Building Approved Plan, Property Card or the 7/12 Extract, ULC Order, Copies of Agreement for sale of flat purchasers, Non-Agricultural Order, City Survey Map, Stamp Duty paid Proof, Layout Plan, Registration Receipts, Draft Conveyance Deed, Architect Certificate about utilization of FSI and the proportionate land entitlement Occupation Certificates etc.

The Managing Committee prepares the Members of the Cooperative Housing Society for Deemed Conveyance by convening a Special General Meeting (SGM) of the society by giving a notice about the same and highlighting what is the agenda of the meeting. In the meeting, the committee notes down the difficulties that may be faced in obtaining the Conveyance from the Land Owners/ Developers of the Property. It also discusses the effects, procedure, advantages and disadvantages of transfer of conveyance to the members.

Certain Resolutions are also passed during the SGM, such as Resolution for going ahead with the Deemed Conveyance, the appointment of Authorized Representative to represent the case before the competent authority, Appointment of Legal Consultant for Deemed Conveyance, Contribution of each member. At this point of time, the society starts moving forward to the Documentation stage.

The Appointed Authorized Representatives needs to make an application before the Competent Authority which has been constituted by the Government of Maharashtra. The Co-operative Housing Society needs to make a Conveyance Deed and submit the same before the Collector of Stamps to pay Stamp Duty along with proof of payment of Stamp Duty by each of the individual occupants.

The concept of Deemed Conveyance has been of much importance in the recent past. Most of the Cooperative Housing Societies in Mumbai do not have a conveyance from the Builders/ Property Developers. Therefore the conveyance remains in the name of the builder himself. The situation has been alike in most of the Maharashtra including Mumbai. In order to ensure that the interest of the flat buyers and the Cooperative Housing Societies at large is taken care of, competent authorities have been appointed so that the aggrieved parties may be heard by them and thereby conveyance may be transferred in favor of the Cooperative Housing Society. Once the aggrieved parties approach the competent authority, it executes the conveyance deed in favor of the society on behalf of the builder/promoter/land owner. One of the major challenges for obtaining deemed conveyance is the collection of documents required from various government departments. There are instances when the land owner/developer/builder is not willing to sign the conveyance deed in favor of Co-operative Housing Society, then the District Deputy Registrar has the authority to sign conveyance deed as a promoter. The Co-operative Housing Society will have to make an application to the competent authority, i.e District Deputy Registrar in a format as mentioned along with all the necessary documents. Documents which are required to obtain deemed conveyance are as follows:

• 7/12 Extract, Village Form No. 6 and property card.
• List of details of the purchasers of the flat as well as copies of registered agreements of sale entered by them with the promoter including the proof of payment.
• Location plan as well as layout plan of the building that has been sanctioned by the appropriate authority.
• Survey plan by the revenue department.
• Architect certificate of the constructed areas as well as Floor Space Index details.
• Details of all the common area, facilities as well as a structure constructed on the land.
• Latest Title and the search report of past 30 years by a qualified advocate.
• A Order
• Copies of ULC Certificate(applicable under Urban Land Ceiling Act, 1976)
• Copy of approval of building plan from BMC as well as other authorities
• Details of the society registration
• Occupation certificate, commencement certificate and completion certificate.
• Power of attorney or development agreement or agreement of sale executed by the landlord with the promoters or the builders to develop the land.
• Draft copies of the conveyance deed
• Copies of the legal reminders sent to the builders or the promoters or any other interested parties responsible for executing the conveyance deed[12].

 

Procedure For Deemed Conveyance 

Whenever the land or the property is conveyed to the Co-operative Housing Society, it implies that the property is legally transferred in his name and thereby all the municipal taxes would be drawn in the names of members. If the property has a legal title, the Cooperative Housing Society can take the benefits of the Floor Space Index. The Plot of land has some developmental potential in the Floor space Index (FSI). The FSI may vary depending upon the location and the user zone of the plot. Thus, when the legal title of the Co-operative Housing Society has been transferred, the society can take the benefits of Floor Space Index and therefore the potential development of a plot can be carried out. Most of the times, the builders deliberately don’t transfer the Conveyance in favor of the Cooperative Housing Society with a motive of making use of the Floor Space Index at a future point in time. It must be noted that conveyance is the right of the members of the Society as well as Cooperative Society on the whole. The procedure for obtaining the Deemed Conveyance is as follows:

• The Managing Committee, first of all, prepares the members of the Co-operative Housing Society for the Deemed Conveyance.
• Once the list of members has been prepared, the Managing Committee would collect, organize all the documents and prepare a case as required for the Deemed Conveyance.
• The Cooperative Housing Society then files a case before a Competent Authority. It is contested out of which an order of Deemed Conveyance is issued.
• Thereafter, the Inspection is done, and the scrutiny committee reports to the office of the Competent Authority and summons are issued giving notices to the Land Owners as well as the Property Developers to appear for the hearing. The purpose of sending such notice is to ensure that they are being given an opportunity to present their case and thereby, the decision is taken in a neutral manner.
• A deed of deemed conveyance is adjudicated, stamped as well as registered and thereafter, the competent authority incorporates the name of the Co-operative Housing Society in the land revenue record.
• Once the land, property or the building is conveyed in favor of the Cooperative Housing Society, the title of the property is recorded for property cards as well as revenue records. Once this has been done, the title is free as well as marketable.

Advantages of Deemed Conveyance

One of the biggest advantage of deemed conveyance is that the titles of the property is legally transferred from the owners of the property/developers of land to the ultimate owners/occupants who have paid the price for it. It would be appropriate to sought out the advantages of the Deemed Conveyance:

• Legal Owner: As soon as the title of the property/land is issued in the name of Cooperative Housing Society, the Government recognizes the Cooperative Housing Society as the legal owner of the property. The Cooperative Housing society is a corporate body having perpetual succession and a common seal. Therefore, the property can vest in the name of the society.
• Benefits of additional FSI: As discussed earlier, Floor Space Index is measured in terms of square meter and depicts the space area on the plot where construction can be done. The benefits of FSI can only be utilized once conveyance has been done. Most of the builders are hesitant to convey the title as they think about availing more Floor Space Index (FSI) at a later point in time.
• Property becomes sellable and marketable: If the conveyance of the Co-operative Housing Society is not done, the entire property and all the flats appurtenant to it remain in the name of the original owner/builder/land developer and thereby the purchaser doesn’t have the legal right to sell the property. All the documents are vested in the name of the builder/land developer himself and thereby the land is not free or marketable. Once the conveyance has been done, the property is sellable.
• Raising of loans as well as reconstruction of property: If the Cooperative Housing Society requires funds, it can raise funds by seeking a loan and mortgaging the property itself. If the property title is not in the name of the Co-operative Housing Society, it would not be able to secure loans and mortgage property as it is not the legal owner of property. Also, if the Society has the conveyance done, it can apply for no objection certificate from the town planning department and go for reconstruction of the building. In the case of Tushar Jivram Chauhan And Anr vs. The State Of Maharashtra[13], the Bombay High Court observed that the uncleared/without description/vague boundary description are a matter of issue when it comes to transfer of property between the parties. It also noted that the competent authority is under an obligation to see that the deemed conveyance and/or unilateral conveyance, must be confirmed as well as satisfied, based upon the written agreement between the parties before passing an order on any such applications.

 

Issue pertaining to Parking Facilities in a Cooperative Housing Society

A very important question that arose before the Supreme Court in the case of Nahalchand Laloochand P. Ltd vs. Panchali Cooperative Housing Society[14] was whether the ‘parking space’ in a flat is independently sellable or not. The court ruled in the favor of the buyer and held that builders and developers cannot sell parking areas independently as it formed part of the “common facilities” to the buyer. The developer has the obligation to provide the parking space under Development Control Rules when the carpet area exceeds 350 sq. metre. It is not an area which is in addition to the flat. It forms part and parcel of the apartment.

The court discussed the concept of garage-private[15] as well as garage public as given in the DCR Regulations and answered the question whether the stilted portion or stilt area of a building is a garage under MOFA. If a promoter has not disclosed the common areas and facilities provided as part of the flat, it will not cease to be part of the same just because he has not described the same as free in the apartment. The court further added that the ‘stilt parking space’ is neither ‘flat’ nor ‘garage’ and therefore not sellable. As per the mandate of MOFA, the promoter is required to describe the ‘common facilities and amenities’ in the advertisement as well as in the ‘agreement.’ Therefore, open to the sky parking area or stilted portion which can be used as a parking space is not a ‘garage’ and cannot be sold independently as a flat.

 

Maharashtra Slum Areas (Improvement, Clearance, And Redevelopment) Act, 1971

Slum Rehabilitation Scheme was an idea which came out during 1996 to get rid of Mumbai’s Slum Problem. As per the census of 2011, around 52.07 lakh people out of 1.21 crores, people reside in slums in Mumbai. Only 4 percentage of the total slum dwellers have been rehabilitated so far. A lot of activists feel that the basic problem behind the problem with the development of slum area is the casual approach of the government towards it.

It is an act to make improvement as well as clear the slum areas in the State of Maharashtra and their redevelopment. Under the act, a Rehabilitation Authority has been constituted which carries on Slum Rehabilitation Schemes. The competent authority under the Act creates the Slum Rehabilitation Schemes and publishes the same in the Official Gazette. A reasonable period of not less than thirty days is given to the general public for submission of objections and suggestions. The Chief Executive Officer of the Slum Rehabilitation Scheme would consider the objections and the suggestions and carry out the modifications as deemed fit and finally publish the same, with the approval of Chief Executive Officer of the Slum Rehabilitation Authority who shall consider the objections and suggestions, if any, received within the specified period in respect of the said Provisional Scheme and after considering the same, carry out such modifications as deemed fit or necessary, finally publish the said scheme, with the approval of the State Government or, as the case may be, the Slum Rehabilitation Authority in the Official Gazette, as the Slum Rehabilitation Scheme.

There are a few parameters or guidelines for declaring an area as the slum rehabilitation area. These are:

• Basic and essential parameters of development of slum rehabilitation area under the Slum Rehabilitation Scheme;
• provision for obligatory participation of the landholders and occupants of the area declared as the slum rehabilitation area under the Slum Rehabilitation Scheme in the implementation of the Scheme;
• Provision relating to transit accommodation pending development of the slum rehabilitation area and allotment of tenements on development to the occupants of such area, free of cost.
• Scheme for development of the slum rehabilitation areas under the Slum Rehabilitation Scheme by the landholders and occupants by themselves or through a developer and the terms and conditions of such development; and the option available to the Slum Rehabilitation Authority for taking up such development in the event of non-participation of the landholders or occupants;
• Provision regarding sanction of Floor Space Index and transfer of development rights; if any, to be made available to the developer for development of the slum rehabilitation area under the Slum Rehabilitation Scheme;
• Provision regarding non-transferable nature of tenements for a certain period, etc.[16].

Once the area is declared as a Slum Rehabilitation Area, the Slum Rehabilitation Authority determines to re-develop such land by delegating it to some agency.

The competent authority also has a duty to undertake the improvement works in any area, and if it is of the opinion that the occupiers should vacate their premises, it must give them the notice to vacate by a specified date and offer the occupiers alternative sites in any other areas. If the occupier fails to vacate and shift to the alternative site offered to him within the area specified to him, the responsibility of authority to provide him alternative site ceases. The authority after giving 15 days clear notice to the person who has been removed, affix a copy of the notice in the conspicuous place, remove, dispose of any property remaining on the premises via public auction. Once the property has been sold, after deducting the expenses of sale, the remaining sale proceeds would be paid as may be entitled to the same[17].

 

Transferable Development Rights (TDR)

In certain circumstances, the development potential of a plot of land may be separated from the land itself and may be made available to the owner of the land in the form of Transferable Development Rights (TDR)[18]. These Rights may be made available and be subject to the Regulations in Appendix VII of Development Control Rules[19]. It basically means the development potential of the land which was suspended because of the reservation of land in the Development Plan for Mumbai by the Government of Maharashtra.

The government has found out a special way of compensating the landowner under which the development potential of the land is detached from the reserved land, the land stands transferred to the government and the development rights equal to the development potential attached to the reserved land are transferred to the owner to be used in some other land as per the provisions of Development Control Rules. So, therefore the owner of the reserved land is compensated by additional Floor Space Index which can be used on some other land by the owner. These detached rights are called TDR, which are formalized by municipal commissioner via Development Rights Certificates (DRC). The owner of DRCs can transfer them like a negotiable instrument for valuable consideration. If a Developer/Builder surrenders his plot of land and offers to build homes free of charge for the slum dwellers, he gets the Development Rights proportionate to the plot of land surrendered by him northward of that plot. He could sell the property which has been developed by him. The Transferable Development Rights(TDR) serves as an incentive for the builders so that they construct homes for the underprivileged and the slum dwellers. Therefore, the builders make and develop residence for slum dwellers and earn the TDRs.

The grant of such TDR’s to the builders led to the construction of the buildings in an arbitrary and chaotic manner. Therefore, a city activist, one Mr. Bhagwanji Raiyani, who was the founder of an NGO called the Janhit Manch, filed a public Interest Litigation in the High Court of Bombay asking for a complete ban on the operation, allowing and use of Transferable Development Rights. Therefore in the present case of Janhit Manch And Bhagvanji v. The State Of Maharashtra[20], the question that arose before the court was whether the state, which was financially enabled to provide housing to encroachers on public and private lands residing in structures as well as the slum dwellers is justified in granting TDR’s to builders by permitting to increase the F.S.I. The objective of the state was to protect the slum dwellers as well as to evict the parks, gardens, footpaths and roads from encroachment.

The petitioner pleaded before the court regarding the concern for the open spaces and parking and about the manifold increase in the population and traffic congestion due to the indiscriminate use of Transferable Development Rights in the suburbs including areas of Vile Parle, Mumbai.

It was also pleaded by the petitioner that the discretion conferred upon the Municipal Commissioner was being exercised arbitrarily, irrationally and the open spaces have been reduced to 3 meters between the buildings, regardless of the height, which was more or less a mockery of the notion of side open spaces being sufficient to provide adequate light and air at all floor levels. Moreover, if the TDR was allowed, the location of these areas was such that there would have been no room for increasing the infrastructure to cope up with the increase in residence/structures.

The court after analyzing the facts of the case, appointed a Committee of experts comprising architects, social activists, lawyers, bureaucrats and retired State and BMC Officers to review the TDR policy in the larger interest taking into consideration the submissions made by the petitioner as well as to frame norms and guidelines for future implementation.

The court held that the existing infrastructure in terms of Parks, Play grounds, open spaces, water supply, sanitation and sewerage disposal, ambient quality of air and public transport were inadequate. There is serious congestion on roads and railways. Yet considering object and purpose behind the Slum Rehabilitation Scheme for those residing in slums and shelters, the court rejected the challenge under Articles 14, and it cleared the decks for corridors along the Western and Central railway lines.

The notification dated 16^th January, 2016 had linked the utilization of TDR to the width of the roads and plot size, allowing higher vertical development for wider roads and curbing construction of skyscrapers on narrow roads. The notification has also jotted down cases where compensation in terms of Transferable Development Rights (TDR ) is permissible and cases where it is not permissible[21]:

CASES ELIGIBLE FOR TRANSFERABLE DEVELOPMENT RIGHTS (TDR ):–

• Lands under various reservations for public purposes, new roads, road widening, etc. which are subjected to acquisition, proposed in Draft or Final Development Plan, prepared under the provisions of the Maharashtra Regional and Town Planning Act,1966;
• Lands under any deemed reservations according to any regulations prepared as per the provisions of Maharashtra Regional & Town Planning Act, 1966;
• Lands under any new road or road widening proposed under the provisions of Maharashtra Municipal Corporation Act;
• Development or construction of the amenity on the reserved land;
• Unutilized FSI of any structure or precinct which is declared as Heritage structure or Precinct under the provisions of Development Control Regulations, due to restrictions imposed by that regulation;
• In lieu of constructing housing for slum-dwellers according to regulations prepared under the Maharashtra Regional & Town Planning Act, 1966;
• The purposes as may be notified by the Government from time to time, by way of, modification to, a new addition of, any of the provisions of sanctioned Development Control Regulations.

CASES NOT ELIGIBLE FOR TRANSFERABLE DEVELOPMENT RIGHTS (TDR):–

It shall not be permissible to grant Transferable Development Rights (TDR) in the following circumstances:—

• For earlier land acquisition or development for which compensation has been already paid partly or fully by any means;
• Where an award of land has already been declared and which is valid under the Land Acquisition Act, 1894 or the Right to Fair Compensation & Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 unless lands are withdrawn from the award by the Appropriate Authority according to the provisions of the relevant Acts.
• In cases where the layout has already been sanctioned, and layout roads are incorporated as Development Plan roads prior to these regulations.
• for the width of road that would be necessary according to the length as per Development Control Regulations;
• If the compensation in the form of FSI / or by any means has already been granted to the owner.
• Where lawful possession including by mutual agreement /or contract has been taken.
• For an existing user or retention user or any required compulsory open space or recreational open space or recreational ground, in any layout.
• For any designation, allocation of the use or zone which is not subjected to the acquisition.

 

Scheme of Redevelopment

The Development control Rules (DCR) act as a guide to every person who wishes to develop and redevelop any building or alter the building. Under the DCR rules, a person who intends to carry out the construction needs to give a notice to the commissioner along with the plans as well as statements of the construction that is to be done. Any construction thereof has to be done in conformity of the regulations provided. Under the regulations, the Metropolitan Commissioner has the final authority to interpret, construe the provisions of the regulations.

 

Issues Regarding FSI (Floor Space Index)

Under the new DCR Rules, the areas for balcony, flower-beds, terraces, voids, niches have been included in Floor Space Index. FSI means the quotient of the ratio of the combined gross floor area of all floors, excepting areas specifically exempted under these Regulations, to the total area of the plot.

Floor Space Index (FSI) = Total covered area on all floors/Plot area[22].

Thereby, FSI implies the ratio between the built-up area allowed and plot area available. Floor Space Index is directly proportional to the Built up area. The Higher the FSI, the higher is the Built up area.

There are a lot of disputes wherein the Floor Space Index is excessively used by the Builders or wherein the height of the building is done, or the construction of the building is carried out in excess to carrying of construction beyond the permissible limits or if the revised plan has not been approved by the planning authority.

The Supreme Court in one such case has held that the revised plans submitted by the architect had not been approved by the Planning Authority and the flat buyers were aware of the same. In such a scenario, it is the buyers of the flats who have purchased the flat to sue the builder/developer for costs or return of their money. Therefore, the flat buyers cannot seek a direction for regularization of the illegal and unauthorized construction made by the developers/builders. The court further held that regularization of any such illegal construction would lead to the destruction of the purpose of Development Control Rules itself[23].

Any person who carries of such development/construction illegally and in violation of the Rules as well as without permission of the Planning Authority is liable to get punished as there is a requirement that the land must be restored to its original position.

There is no provision under the Act for condonation of illegal construction by the developers/builders and promoters or regularization. It is the obligation of the promoters as well as developers to obtain sanctions under MOFA, 1963 and inform about the same to the buyers of the flat.

In a case involving unlawful constructions as well as unauthorised encroachments up to the extent of 24000 sq foot, the Supreme Court while coming hard on the builders held that making of unauthorized constructions is against the interest of the society at large and ordered that the demolition of the excessive constructed property must be demolished[24].

In the case of Promoters & Builders Association v. Pune Municipal Corporation & Ors[25], a writ petition was filed by the promoters and builders Association of Pune, which was a society registered under the provisions of Societies Registration Act against Pune Municipal Corporation as well as State of Maharashtra challenging the Development Control Rules that were modified. The main relief that was sought was that the writ of mandamus be issued to implement DCR Rule N-2.4.11(b) so that the road area in respect of the plot, which is reserved for the road can be utilized being 0.4 FSI on the same plot and the balance unutilized FSI, if any, can be converted into TDR and can be used anywhere on a receiving plot to the extent of 0.4 FSI, in addition to the 0.4 FSI permissible on the receiving plot for amenities under Rule N-2.4.11(a) and direct the Municipal Corporation to forthwith dispose of the applications which had been submitted by the members of the petitioner Association. The question that arose before the Supreme Court was whether the State Government can make any change by its own in the modifications submitted by Planning Authority or not. The apex court observed that the DCR was framed under Section 158 of the Act. Rules framed under the provisions of a statute form part of the statute and thereby DCR have a statutory force. After having seen the sanctioned plans, as well as having a look at the construction work, the Supreme Court dismissed the petition recording the fact on behalf of Pune Municipal Corporation that the Constructions were not in violation of clause (b) of D.C.R – 2.4.11.

Issues Pertaining to Cooperative Societies

As per Section 10[26] of Maharashtra Ownership of Flats Act, 1963 the promoter has to register the organization in the form of a cooperative society or in the form of a company.

The Cooperative societies Act is governed by the Maharashtra Co-operative Societies Act, 1960. The Cooperative society is by a legal fiction owner of the property and has a possessory right in the premises. If the builder has not completed the project as per the agreement, the flat buyers as individuals or cooperative society as a whole may sue for specific performance of the contract with the builders.

One of the biggest reasons for disputes under the Cooperative Housing Societies is the Redevelopment by the builders/developers. The managing committees, in collusion with the Builders and the Developers, on various issues including relocating while redevelopment of the society is being carried on, deny them of their fundamental rights, basic amenities as well as issues pertaining to parking facilities. The other kinds of issues that prevail in the Cooperative Housing Societies include day to day functioning of the societies, including disputes arising between various members of the society, between the Managing Committees and members of society as well as use of parks, swimming pools or other amenities.

If the general body of the Co-operative society has taken a decision with regards to redevelopment and the same has been sanctioned by majority of the members of society, the decision of the body of the Cooperative society is valid till the time it is in force. In the Jasmina Constructions Pvt. Vs Mandapeshwar Kripa Co-Operative[27], out of 84 members of the society, 77 had vacated their respective premise for the purpose of redevelopment and there was a unanimous resolution to that extent. The members contended that there was permanent dispossession by the builder. The plaintiffs had already invested huge amounts for the redevelopment of the society, and had provided necessary alternate accommodation to all the members as well as the dispossession was only for the temporary period till the construction and/or completion of the project. The Court granted eight weeks’ time to the five contesting defendants.

 

Procedure for Registration of Cooperative Housing Society

It would be appropriate to discuss the procedure of Registration of the Cooperative Housing Society. The above mentioned documents are submitted to the Registrar. After the scrutiny of the documents is done by the concerned Registrar, he would make an arrangement of issuing certificate of registration of the society under Section 9(1) of the Maharashtra Co-operative Housing Society Act, 1960. A copy of the registered bye laws, memorandum regarding registration of the society is sent to the chief promoter. The order for registration of the society must be sent for publishing in the government gazette. The First general body meeting of the Promoter members would be organized by the Chief Promoter within a span of 3 months from the date of registration of society[28]. If the meeting was not taken by the chief promoter then the complaint can be made to the Registrar and after appointing the authorized officer, such a meeting can be conducted. If the registration of the society is denied, then an Appeal can be made under section 152 to the immediate senior officer. If the Registrar does not take any action on the proposal received for registration, then it is deemed that the society has been registered. The information regarding the procedure of working of the society as well as the bye laws can be given to the members in the first meeting by the office bearer representatives of the District Federation and officers from the co-operation department[29].

 

Builder-Non-Cooperation Co-operative Housing Society

If builder/promoter delays to register the Co-operative Housing Society, then in that case, the application for registration of society be submitted in Form 6 (Rule 12) before the authorized officer (District Dy. Registrar) in the respective district, who have given power under section 10(1) of the Maharashtra Ownership Flats Act 1963

While submitting the said proposal, following documents are Necessary –

•  7/12 extract of the land or property card.
• Competent Authority Certificate regarding non-Agricultural land.
• Order regarding applicable/non-applicable Land ceiling Act Map of the construction approved by the competent authority.
• Letter of given permission for construction.
• Completion certificate of Construction.
• Development Agreement if the land is taken for development.
• Power of Authority letter of the Land.
• Copy of the Title search Report.
• Agreement copy of the flat purchased.
• Architect certificate regarding construction.
• List of the Members.
• Scheme of the Society.
• Application regarding reservation of Name.
• Minimum 10 Members shall necessary for the registration of the Society.
• Application for registration of Society (A Form)
• Table containing information of the society (B Form)
• Table containing information of the members (C Form)
• Statement of Accounts of the members (D Form)
• Notarised guarantee letter of the chief promoter of society on the stamp paper of Rs. 100/-
• Notarised Indemnity Bond of the members who applied for the registration of society on the stamp paper of Rs. 200/-
• Affidavit of the Members (Minimum 10 promoters’ Affidavit)
• Two copies of bye laws approved by the Commissioner, Co-operation and Registrar, Maharashtra State, Pune.
• Bank balance statement of the promoter members who have deposited Rs.500/- each as a share and admission fee Rs.100/- in District Central Co-operative Bank after getting sanction for the reservation of name in district of Rs.2500/- paid as society Registration fee in the Government Treasure[30].

Redressal before the Consumer Court

The Buyer of the real Estate can file a case before the consumer court if he falls within the definition of a “Consumer[31]” under the Consumer Protection Act, 1986

Failure to deliver possession

Let us understand the repercussions when the builder fails to deliver the possession within a stipulated time as given in the agreement.

• Satish Kumar Gajanand Gupta vs. M/s SrushtiSangam Enterprises (India) Ltd &Ors[32]

In the present facts of the case, even after paying the earnest money, the builder failed to deliver the possession within a stipulated time. However, the buyer of the said property was not classified as a consumer by the court as the complainant was a resident of Delhi and he intended to purchase some permanent accommodation at Mumbai for his stay during his business visits to save on the expenditure incurred in hotels.  The National Consumer Disputes Redressal forum held that the transaction was related to the business activity and, thereby, it will fall in the category of commercial purpose, and the complainant will not fall within the definition of a consumer under the Consumer Protection Act, 1986. The same view has been taken in the case of Jag Mohan Chhabra & Anr. vs. DLF Universal Ltd[33] which was somewhat a similar case. Therefore, it was held that the complaint was not maintainable under the Consumer Protection Act, 1986. In the present case, the same view was reiterated while dismissing the complaint. However, the court granted liberty to the complainant to approach the Civil Court to seek remedy.

• Swaran Talwar & 2 others v. M/s Unitech Limited[34]

The grievance of the complainants is that though they booked flats more than eight years ago, the opposite party had failed to offer possession to them and the project was nowhere near completion even though 95% of the cost was already paid. As per the agreement, the apartment was proposed to be delivered to the Allottees within 36 months. The complainants alleged that the money was used elsewhere and the court held that such a practice constitutes unfair trade practice within the meaning of Section 2(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practice for the purpose of selling the product of the builder. Though, such a practice does not specifically fall under any of the Clauses of Section 2(r) (1) of the Act that would be immaterial considering that the unfair trade practices which have been given in Section 2(r) (1) of the Act are inclusive and not exhaustive. After waiting for a span of nine years of having booked their flats with the opposite party, the court ordered that the complainants were entitled to get the amount as well as interest refunded at the rate of 18% per annum compounded quarterly.

• Deficiency in services

The Consumer Protection Act defines Deficiency in Services to mean any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service[35].

In the case of Smt.Shilpa Ismail vs ShriNemchand Chedda[36], the complainant had paid a total amount of Rs.12 Lakhs by cheque and this fact has been confirmed by M/s. Preet Sonal Investment & Finance Co. Pvt. Ltd. through its Director. Before the construction had not even started, the complainant approached this Commission. Even after the receipt of payment  of   Rs.12 Lakhs, Opponent had not executed Agreement for Sale of flat in favor of the complainant.  This in itself amounts to statutory deficiency of service on the part of opponent besides contractual obligations to perform under the contract. The court observed as follows “Under Section 4 of the Maharashtra Ownership Flats Act, 1963 on receipt of nearly 20% of total cost of flat, Opponent/builder is duty bound to execute the Agreement of Sale in favor of flat purchaser and then to accept remainder amount of consideration.  This statutory provision contained in the Maharashtra Ownership Flats Act, 1963 has been violated in a blatant manner by the Opponent.  There was no dispute that the amount of Rs.12 Lakhs has been received by the Opponent and till today he has not informed that he is in a position to give the flat to the complainant.  Therefore, there has been deficiency in service on the part of opponent in not starting the construction as well as not giving possession of the flat booked by the complainant”.

Forum below therefore examined various points raised by the complainant and held that there was a deficiency in service on the part of builder/developer. The consumer courts have hit the builders with high rates of penalty including refund of amount paid as well as heavy interest if there is delay in delivery of flats as per the agreement between the Builder and the consumer. Very importantly, the purchaser of the flat must fall within the definition of Consumer as per the Consumer Protection Act, 1986. So if the construction of flats remains in limbo for years, the Purchasers of flats have an explicit right to approach the Consumer Courts to recover not only the Principal amount paid by them, but also the interest on the amount paid by them.

Deficiency in service, improper amenities, ceiling leakage, improper drainage system, incomplete fire safety system, low quality of electrical wiring, improper water provisions, not providing the occupation certificate, etc. are some of the major complaints against the builders.

 

Remedies available with the Buyer of the Flat

It would be now appropriate to consider the remedies that would be available with the buyer of the Flat. These remedies include all the forums and courts which the flat purchaser can approach.

• Filing of Civil Suit

In a case wherein the Builder commits breach of statutory or contractual obligation between him and the purchaser of flat, it is the right of the purchaser to approach the civil court. If the construction of the flats has not been completed, the buyers who have paid the amount can approach the civil court. However, it takes years to decide the outcome of a civil suit.

• Complaint before a Consumer Court

A complaint before the Consumer Court is to provide for better protection of the interests of consumer. Any person who hires any services for consideration is a consumer under the Act. It is important to note that the buyer of the flat fits in the definition of a “Consumer” within the meaning of Consumer Protection Act, 1986. It provides remedies to a consumer against deficient services. When a land is allotted or developed by a statutory authority or it constructs a house for the benefit of a common man, it is as such, “service” by a builder or contractor. When the possession of the property is not delivered within a stipulated period, the delay so caused is denial of “service”. Such disputes or claims are termed as deficiency in rendering of service of particular standard, quality or grade. A person who applies for allotment of building site or for a flat constructed by the Development Authority or entered into an agreement with a builder or a contractor is a potential user and the nature of construction is covered in the expression “service” of any description. Thus, the Consumer Protection Act provides protection against the malpractices of the builders and developers. Any person dissatisfied by the services or delayed delivery of possession can approach the consumer forum for redressal. The consumers can approach the Redressal Forums for deficiency in service at different stages of housing.

Lucknow Development Authority Vs. M.K.Gupta[37], in the present case, the Supreme Court was of the following opinion:

Construction of a house or flat is for the benefit of person for whom it is constructed. He may do it himself or hire services of a builder or contractor. The latter being for consideration is service as defined in the Act. Similarly when a statutory authority develops land or allots a site or constructs a house for the benefit of a common man it is as much a ‘service’ as by a builder or contractor. The one is contractual service and other a statutory service. If the service is defective or it is not what was represented then it would be unfair trade practice as defined in the Act. Any defect in construction activity would be denial of comfort and service to a consumer. When possession of property is not delivered within stipulated period the delay so caused is denial of service. Such disputes or claims are not in respect of immoveable property as argued but deficiency in rendering of service of particular standard, quality or grade. Such deficiencies or omissions are defined in sub-clause (ii) of clause (r) of Section 2 as unfair trade practice. If a builder of a house uses substandard material in construction of a building or makes false or misleading representation about the condition of the house, then it is denial of the facility or benefit of which a consumer is entitled to claim value under the Act. When the contractor or builder undertakes to erect a house or flat then it is inherent in it that he shall perform his obligation as agreed by him. A flat with a leaking roof, or cracking wall or substandard floor is denial of service. Similarly when a statutory authority undertakes to develop land and frame housing scheme, it, while performing statutory duty renders service to the society in general and individual in particular.

Chandigarh Housing Board Vs. Avtar Singh and Ors[38], The issue that was raised before the Supreme Court was that whether the members of the Societies who would have been benefited by allotment of land under the 1991 Scheme were consumers within the meaning of section 2(d) of the Consumer Protection Act, 1986. The Scheme was framed for allotment of land to the Societies for construction of multistoried structures (dwelling units/flats) for their members, but the provisions contained therein not only regulated the relationship of the Societies with their members, but also made them jointly and severally responsible for payment of the earnest money etc. The Finance Secretary and the Board issued directions from time to time for payment of the earnest money and interest by the members of the Societies.

By making applications for allotment of land, the Societies will be deemed to have hired or availed the services of the Chandigarh Administration and the Board in relation to housing construction as elucidated and explained in M.K. Gupta’s case and Balbir Singh’s case. If the scheme had been faithfully implemented and land had been allotted to the Societies, their members would have been the actual and real beneficiaries. Therefore, they were certainly covered by the definition of `consumer’ under Section 2(d)(ii), the second part of which includes any beneficiary of the services hired or availed for consideration which has been paid or promised or partly paid and partly promised.

• Complaint before Competition Commission of India

The complaint can also be made before the Competition Commission of India against the builders/developer if the builders have dishonestly abused their dominant position, have entered into anti-competitive agreements, denying market access to the competitors, using tactics like predatory pricing to oust the competitors from the market etc.

In the case of Confederation of Real Estate Brokers’ Association of India v. Magicbricks.com and Ors., the informant, was a confederation of thirty five real estate broker’s association, having a combined membership of approximately 20,000 real estate brokers. Opponents on the other hand were various online portals having various online portals engaged in the activities pertaining to real estate lsiting, property finder solutions etc. It was the case of the informants that the Opponents had advertised ‘No Brokerage Policy’ on their websites, mobile applications, newspapers and was imposing unfair and discriminatory conditions on the traditional real estate brokers. The Opponent further stated that Opponents were engaged

in auction of properties and through the offer of ‘buy directly from owners’ on the website and newspaper advertisements.

Informant also raised a point that the opponents have abused the dominant position by imposing unfair and discriminatory condition with respect to fee charged for listing of property, denying market access to the competitors like brokers and mediators; as well as to eliminate competition by charging no fee or commission. The competition commission perused the website ranking figures of Alexa.com through which the informant had tried to prove the dominance of opponents. The commission held that the dominance of any of the Opponents cannot be judged from the said ranking figures as the ranking was limited to only the websites/portals and does not include the offline brokers. It was just based on the traffic attracted by the websites and the same keeps on changing based on the number of page reviews. Thereby, the commission came to the observation that none of the opponents were dominant in the relevant market and there could be no case of abuse.

In the case of BhimSen vs. Delhi Development Authority[39], while dealing with the allegation of unfair trade practice on part of DDA, the MRTP Commission held that a misrepresentation or false representation to the complainant on the ground that a flat would be allotted to him followed by failure to offer the allotment was a failure on the part of DDA and amounted to deficiency in service.

The Competition Commission of India in the case of Belaire Owner’s Association v. DLF Limited[40]stated that the real estate industry has a lot of linkages with other sectors of the economy and that the investment in real estate sector results in additions made to the GDP of the country. The informant stated that DLF abused its dominant position and has imposed arbitrary, unfair and unreasonable conditions on the apartment. It was also stated that DLF has acted in an unfair, irrational manner and they have allotted land and given licenses, permissions and clearances.

Commission having placed reliance on several Supreme Court judgments concluded that the housing activities that are undertaken by development authorities were considered as services under the definition of service under section 2(o) of the Consumer Protection Act, 1986. DLF had the highest market share, i.e 45% and the market share of the nearest competitor was 19%, which was more than twice of its competitor. Furthermore, DLF had an early mover’s advantage and also occupied a leadership position. CCI observed that DLF had abused its dominance by imposing unfair conditions on the buyer via Provisional Booking Agreement, signed by buyer after having paid substantial costs. The discriminatory conditions of sale imposed by the DLF were arbitrary and CCI imposed a penalty of Rs. 630 crores on DLF.

 

Role of Real Estate (Regulation and Development) Act, 2016

As the demand for the houses have increased due to the growth of population, the real estate developers, promoters and builders have resorted to unscrupulous practices and insensitive behavior towards the consumers. Some of the practices include dual selling of single flats, deficiency in services, delay in giving possession. The consumer courts have tried to provide remedy only if the purchaser of the flat falls within the definition of a ‘consumer’ under the Consumer protection Act, 1986. There was a need of a statute which tries to bring transparency in transactions and keeps a check as well as fixes accountability of the promoters, builders and developers.

Real estate act is an effort which has tried to boost investment, bring transparency, and protect home buyers, consumers as well as investors in the real sector. It has also set up an adjudicating mechanism as well as an appellate tribunal from the decisions of Real Estate regulatory authority for an efficient disposal of cases.

The purchasers of real estate units have a specialized forum called the “Real Estate Regulatory Authority”, which would be setup within a year of coming of the act. Under section 31 of the act, all the disputes regarding the Real Estate would be filed by the aggrieved person against the promoter or the real estate agent if it contravenes any of the provisions of this act or any rules and regulations made. For the promotion of the real estate sector, the authority would also make recommendations to the appropriate government regarding protection of interest of the allottees, allocation of single window system for time bound project approval, measures to encourage investment in the real estate sector etc, encourage construction of environmentally sustainable and affordable housing.

 

Registration with the Regulatory Authority

The promoter is also supposed to register the project at the initial stage before he books, sells, or offers apartments for sale. If the project has started before the commencement of this Act, the promoter has to put an application before the regulatory authority within three months of commencement of the act.

Other than the details of the promoter, the project launched by the promoter, commencement certificate as well as the sanctioned plan of the project, the application for registration must also include a declaration with an affidavit stating that he has a legal title to the land, free from encumbrances, time period within which the project would be completed. Also, 70 % of the amount realized from the real estate project from the allotees shall be deposited in a separate account to be maintained with a bank for the cost of construction and cost of land. The amount that has been deposited can be withdrawn once it has been certified by an engineer, an architect and chartered accountant in this regards.

The promoter is further required to get his accounts audited within six months after the end of every financial year by a practicing chartered accountant.

Real estate Regulatory Authority not only registers the projects undertaken by the builders, it might also refuse to register if the builder fails to observe and comply with the provision of the act.

If the promoter fails to comply with the orders passed by RERA, he would be liable to a penalty which would extend up to 5 percentage of the estimated cost of the project.[41]

If a promoter fails to comply with the orders or directions of RERA, he shall be liable to a penalty, which may extend up to five percent of the estimated cost of the project as determined by the Authority

 

Advertisement issued by the promoter

The advertisement published by the promoter must mention the website address of the Regulatory Authority where all the details of the registered project have been entered. Whenever any advance has been paid by any person on the basis of false information provided in the prospectus, any person who made such an advance or a deposit on the basis of that information contained in the notice, advertisement or prospectus and has sustained any loss or damage because of the incorrect, false statement, would be compensated by the promoter in that regards. Even if any person wants to withdraw from the project when false and incorrect information has been stated via advertisements, notice and prospectus, the entire amount invested by him would be returned to him.

A promoter cannot accept more than 10% as an advance payment or an application fee, from a person without entering into a written agreement of sale. He is also not allowed to make any alterations, additions, modifications in the approved and sanctioned plans, without the previous written consent of 2/3 of the allottees, who have agreed to take apartments in buildings.

There has also been limitation with regards to transfer and assignment. No transfer of rights and liability can take place in respect of the ongoing project in favor of the third party without the consent of 2/3 of the allottees. There is also a provision pertaining to refund of amount by the promoter if he is not able to deliver the possession in accordance with the agreement of sale or discontinuance of his business as a promoter. The promoter shall also obtain insurance in favor of the allottees; provide compensation in case there is a defective title deed.

Other than the Regulatory Authority, there is an Appellate Tribunal, wherein any person aggrieved by the decision of regulatory authority may appeal within a span of 60 days from the date of receipt of order. The appellate Tribunal has the same powers as that of a civil court and shall make an attempt to dispose of the appeal within sixty days. An appeal against the Appellate Tribunal may be filed before the High Court.

 

Disputes arising between Landlord and Tenant with regards to flat

The Maharashtra Rent control Act, 1999 deals with a relation between a landlord and a tenant. It deals with eviction, assuring a fair return on investment by the landlords. There are several disputes with regards to eviction of tenant, payment of excessive rent. It states that the rent in excess to the standard rent is illegal.

Leave and License Agreements

The Act applies to the whole state of Maharashtra including the areas known as Vidharba and Marathwada. The premises to which the Act applies are buildings or structures or parts thereof and the land appurtenant thereto including garages and outhouses thereon. The landlord can also increase rent reasonably for any improvement or structural alteration to premises carried out with the written consent of 70% of the tenants. The landlord is also entitled to increase the rent by amount not exceeding 15% per annum of the expenses incurred due to special alterations made or additional amenities provided. Landlord can also charge fine, premium or deposit as consideration for grant or renewal of a lease of any premises or giving consent.

As per section 14 of this Act, a duty is casted upon the landlord of the premises to keep it in good repairs. If the landlord fails to get the repairs as required even after 15 days of giving the notice, the tenant would get the repairs done and the cost of the repairs would be deducted from the rent. The landlord is not entitled to the recovery or possession of any premises if the tenant pays or is ready and willing to pay standard rent and permitted increases.

Section 16 of the act deals with the recovery of possession. It may be recovered when there is damage to the property, erection of permanent structure, nuisance, sub-letting without permission, bonafide requirement of landlord etc.

Section 24 provides for the recovery of possession by landlord on expiry of license period. Under section 29 of the act, the landlord has the right to inspect the premises after giving an opportunity to the tenant.[42]

A recent judgment of the Consumer court has also stated that a person who has taken a flat under lease to reside for 11 months cannot be defined as a consumer and cannot get protection under the Consumer Protection Act, 1986. The court was of the view that the tenants had the alternate remedy under the Maharashtra Control Act, 1999.

 

Gujarat

Gujarat Cooperative Societies Act, 1961 – Introduction

Cooperative Societies are body corporates setup under section 37 of Gujarat Cooperative Societies Act. They are a registered entity having a perpetual succession and a common seal and have the power to acquire, hold as well as dispose property, to enter into contracts as well as to institute and defend suits and other legal proceedings. If we consider section 4 of the Cooperative Society Act, the object of the Cooperative Society is the promotion of the economic interest of the society for the general welfare of the members or public. The Cooperative Society shall not be registered, if registrar is of the opinion that it is economically unsound, or the registration may have an adverse effect on any other society or if it is of the opinion that the working of Cooperative Society will contravene the public policy.

In the case of Rasiklal Patel v/s Kailashgauri Mehta,[43] the Hon’ble Gujarat High Court has struck down secs. 96 (c) (d), (e) as well as the words “any past or present agent, deceased agent” and Explanation – II as ultravires to Art.14 of the Constitution. The same is confirmed by Supreme Court in District Registrar. (Assit.) v. Vikrambhai Ratilal Dalal[44]. The judgment has appreciated the position that the society could avail the machinery created under the statute against non-member and the same is not available for the non-member against the society.

If we read the provision of section 96[45], the society is supposedly the main party to the dispute as the dispute touches upon the constitution, management or business of a society. The society is a body corporate under the provision of section 37 and if a society is not joined under the dispute under section 96 of the Act, it cannot be said to be a dispute. The internal dispute inter se between members wherein there is no direct or indirect role of the society is not a dispute under section 96. In the case of Govindlal Jivanlal Desai v/s Girishchandra Vadilal Vani[46], the Hon’ble Gujarat High Court has held the following, “The dispute in question between the parties is firstly, not between them in their capacity as the members of the society. Secondly, the dispute does not concern the society at all. It does not deal with constitution, management or business of the society if the old member pays money of share certificates to the new member or not. The society is not in any concerned with it.”

The society exercises its powers either in the general body under section 73 or by the managing committee as per section 74.

Cooperative Housing Societies are the need of this hour. They work like local self-governance bodies. The Cooperative Housing societies are run by the Managing Committees and the Cooperative Housing Society Members. The Managing Committee gets elected and volunteer for better working of the society as well as to ensure the day to day working of the society. It is the duty of the Cooperative Society to study the Municipal Corporation Bye Laws, Municipal Corporation Society Act, 1960 and Municipal Corporation Society Rules, 1961 and function accordingly. The implementation of the act was made by the Cooperation Department. The Cooperation Department works for the betterment of the Cooperative Society, it prevents exploitation of the borrowers by the private money lenders under the Bombay money lender Act 1946 as well as act for the implementation of the Gujarat Ownership of the Flats Act, 1973.

 

Rights of Members of Cooperative Housing Society

The powers of admitting a member are vested with the managing committee under Rule 33(1) of Municipal Corporation Rules but the managing committee of a Cooperative Society does not have a right to remove a member or expel a member. As against the company law, the co-operative law provides for a single vote for a member irrespective of his shareholding. However, the powers of expulsion of members are vested with the Registrar under Section 36 which is subject to appeal under Section 153 and revision under Section 155. The Annual General Meeting is vested with the powers under section 36 to start the proceedings of expulsion. A society may, by resolution passed by three-fourth majority of all members who are present as well as voting at a general meeting, expel a member for acts which are detrimental to the working of the society. The resolution is not valid unless and until the concerned member has been given an opportunity of being heard before the General body. The resolution if passed, after an opportunity has been given to the member, goes to the Registrar and gets his approval. Therefore, the powers for induction of a member are with the managing committee but the powers of removal of a member are vested only with the Registrar of Cooperative Societies, once the resolution has been passed by the General Body. The approval or the disapproval of the Registrar must be communicated to the society within a span of three months from the date of submission of resolution. However, if there has been an absence of such communication, the resolution would be made effective. The Registrar also has the power to sanction the admission or the re-admission in special circumstances[47]. The right of the members also includes the voting rights of a member. According to the section 28 of the Cooperative Society Act, the voting right has been limited to one vote per member irrespective of his shareholding in the society.

 

Right to Participate in AGM

The members of the Cooperative Housing Society have a right to participate in the management of the society. The members of the society have the right to participate in the General Meeting particularly the Annual General Meeting under section 77 and Special General Meeting under section 78 of the Gujarat Cooperative Housing Society Act, 1961. The members indirectly have the control by participating in the meeting of the society and in the election process of the committee. They also have a right to review the performance of the members of the selected committee by checking the Balance Sheet, Annual Report, Cash Flow Statement, Auditor’s Report as well as other document and asking the elected members in case of any doubts regarding the same. The procedure of the participation of the members in the AGM as well as Special General Meeting is followed as per the bye laws which are consistent with the Act and Rules.

 

Right of Members to See Books and Accounts of the Society

As per the Section 33 of the Cooperative Societies Act, the Members of society have the rights to inspect the profit and Loss Account of the members of the committee as well as the minutes of General Meeting of the Society, the books, records as well as last audited Annual Balance Sheet of the society free of cost at the office of the society office during the office hours or any time fixed for the purpose by the society. If the member requires the copy of any of the document, the society would, on request in writing of the member, furnish a copy of the same on the payment of fees.

Section 40 of the Act reiterates the point that every society would keep a copy of the act, rules, bye laws as well as the list of all the members of the society at the registered address of the society. The act, rules, bye laws of the society would also be open to inspection to the public, free of charge during the time specified by the society. This section is very important as it has made all the documents of the society as public documents open to the scrutiny so that the powers as well as the limitation of the society are well defined and the society works within the limits provided to it. The society is supposed to work within the bounds of its Memorandum of Association[48] and Article of Association[49] under the Company Law.

 

Right to File Suit

Under section 98[50] of the Act, a separate forum has been provided for the settlement of the disputes called the Board of Nominees before whom any member of the society can file the dispute cum suit. Therefore, if a member of the society has a dispute with regards to actions of the society or any of the disputes touching the constitution, management or business of a society. If the dispute has been pending with the Board of nominees, the registrar may/at any time, by providing reasons in recording, withdraw the dispute from the Board of nominees and may decide the dispute himself or may refer the dispute again to any other nominee, or board of nominees.

The question with regards to disputes becomes very important when it comes to elections. A member may challenge the election as a ordinary member even though he is not contesting the election. As per Rule 75 of Gujarat Specified Cooperative Societies elections Rule 1982, even the voter can file an election petition before the Board of Nominees. Thereby, an additional right has been provided to an ordinary voter in addition to a contesting candidate. It must be noted that all the voters may not be members but most of the members are voters.

 

Right to Transfer Interest

Section 30 and 31 of the Act talks about Right to transfer Interest or share held by the Member in a society. The legal heir of a member does not automatically become a member. An application to that effect has to be submitted to the society and the society has to approve it. When it comes down to Housing societies, the application of the legal heir is generally accepted without much hue and cry.

 

Disputes within the Cooperative Society

Whilst the cooperative society are working on the day to day basis, there are chances of disputes arising between the members of Cooperative Societies and the Managing committees. One of the best ways to find solution to the problem is when the managing committee members invite the aggrieved members shows them the relevant documents and explains the relevant rules and regulation. Under the civil laws as well as cooperative disputes, there are special provisions and machineries to deal with the disputes. Section 96 of Gujarat Cooperative Society talks about the disputes and says that any dispute which touches the constitution, management or the business of a society would be referred to the Registrar[51] in the prescribed form either by any of the parties to the dispute or by a federal society to which the society is affiliated or by a creditor of the society if the parties include the

1. Society, any of its agent, present or past committee, any past or present servant or nominee.
2. Any of the members, past members, or a person claiming through them or a deceased member of a society which is a member of the society
3. Any other person, other than the member of the society who has been granted a loan by the society, or with whom the society had transactions under the provisions of section 46.
4. A surety of member, or a person other than a member who has been granted a loan by the society
5. Any other society or the liquidator of the society.

As earlier stated, whenever any dispute, question arises whether it is a dispute or not, the question shall be considered by the registrar himself, whose decision would be final in this regards. The term dispute and what else a dispute might include have been covered by the Explanation itself. A dispute may include

• A claim by a society for any debt or demand due to it from a member, past member or the nominee, heir or legal representative of a deceased member, without such a debt or demand be admitted or not.
• A claim by a surety for any sum or demand due to him from the principal borrower in respect of a loan by a society and recovered from the surety owing to the default of the principal borrower, whether such a sum or demand be admitted or not.
• A claim by a society for any loss caused to it by a member past member; or deceased member by any officer, past, officer or deceased officer, by any agent, past agent or deceased agent, or by any servant, past servant or by its committee, past or present whether such loss be admitted or not.
• A refusal or failure by a member, a past member or a nominee, heir or legal representative of a deceased members to deliver possession to a society of land or any other assets resumed by it for breach of conditions of the assignment[52].

As earlier stated, when it comes to deciding the legal heir of a member under a Cooperative Society, it can be determined under section 31 of the Act. However, the society does not have the jurisdiction to decide upon the issues pertaining to succession, disputed legal heirs of a member as a separate forum of civil court exists for the same. With regards to succession issues, and dispute among the legal heirs of a member, the power is vested with the civil courts. The succession laws including the personal laws including the Hindu Succession Act, 1956, Shia and sunni laws as well as the Indian Succession Act, 1925 have the power to decide the issues pertaining to the same. Thus, neither the registrar nor the Board of nominees has the jurisdiction to decide upon the same. A golden principle of law says that the special law prevails over the general law. Therefore, Succession laws being the special law prevail over all the Cooperative Society laws when it comes to deciding the rights of legal heir and inheritance issues.

It must also be noted that the society is the distinct legal person and the committee members are distinct natural persons and in certain cases, depending on the facts and circumstances of the case, committee[53] members may be personally liable for the deeds rather misdeeds of the society.

In the case of Deccan mercantile co-operative Bank v/s Dalichand[54], the Supreme Court of India held that any dispute which concerns the property purchased by the society from one of its members does not touch the business of the society. The court of small cause is the appropriate forum which has the exclusive jurisdiction to deal with such dispute under the Rent Act to entertain a proceeding by a landlord for ejectment of a tenant. The lease was executed by the owner in his capacity as member of the society and therefore there was no dispute between the society and a person claiming through a member. Therefore, the registrar does not have the jurisdiction to try the dispute.

 

Goa

Introduction

The population of state of Goa has grown from 7.6 lakhs in 1961 to more than 1.5 million in the year 2010. To regulate the construction as well as sale of flats, shops and accommodation, Goa law commission drafted a legislation called the Goa Real Estate (Promotion Control and Development) Bill to prevent sham, irregularities as well as to keep a check on the builders as well as land developers. The population of Goa has increased by leaps and bounds over the period of time which has resulted in demand of apartments as well as a regulation to safeguard the interests of the buyers.

The act has tried to deal with the malpractices that the builders or the land developers involve in, including advance booking of accommodation on the basis of advertisements as well as allowing investors to withdraw from the deal they have entered if they are not satisfied.

Furthermore, it seeks to cover the responsibilities of the promoter including forming proper agreements, forming Cooperative Housing Societies.

Goa has been a world’s holiday destination since decades; however, it saw a real estate boom only in the early nineties. People not of Goan origin started buying apartments/villas for themselves for their holidaying purposes. Builders as well as Real Estate Developers saw this as an opportunity and started the construction activities to meet the increasing demands of people.

With the boom in real estate sector, there was a need felt for a legislature on apartments as well as villas in Goa. A initiative was taken during 1993 by Ramakant D Khalap who brought a bill before the Goa Legislative Assembly, which was modeled on the lines of the Maharashtra Law. However, the bill was never implemented and brought in the form of an act. Another bill was brought before in the house by a private member Radharao F Gracias but was subsequently witdrawn. Thereafter, growth of apartment/vila took place and it contemplated concepts like

Exclusive right of occupation in respect of a building, use and enjoyment of common areas, amenities and services, liabilities pertaining to maintenance of common area, undivided right in the land on which apartments stand. The problem that arose in Goa was that most of the Goa people were owning an apartment without a valid title. Moreover, they did not even have a valid agreement to sell. Many invested their earnings of lifetime in an apartment of which they did not have a valid title. It happened because the legislations pertaining to mandatory conveyance of title to Cooperative Housing Societies did not exist in the state of Goa. As per the Goa Law Commission Report, there have been a lot of burning issues after the boom in the real estate industry growth. Some of them have been as follows:

1. The promoter/Builder had no proper marketable title to the property.
2. The common areas like parking areas, open spaces, and terraces were sold sometimes even to non – flat owners.
3. No co-operative society or any organization is formed to take care of the complex.
4. Flats are sold only on the basis of agreements of sale or contracts to construct.
5. Sources of water and power are not specified.
6. No provision for sewage and waste disposal is made.
7. Security arrangements are lacking
8. The builders flout every rule in the book while constructing and allotting the flats.
9. In many cases, there is not even a proper document of handing over/documents of completion and occupation of the building.
10. Construction of the building is sub-standard[55].

The Law Commission called for suggestions from the people of Goa at large as well as stake holders of the real estate sector to incorporate them in the proposed legislation. The stakeholders as well as the common people of goa, gave several suggestions including

a) Unscrupulous builders resorted to illegalities as regards licenses and approvals.

b) Builders/promoters failed to convey proper title to the real estate purchaser.

c) Builders/promoters failed to deliver documents of the possession and conveyance of ownership to the buyers of residential properties.

d) Builders/promoters failed to constitute co-operative society or a valid legal organization of flat owners for management of the society.

e) Sale of flats to more than one person i.e. the dual selling of flats.

f) Sale of common parking places, open spaces, terraces, etc to different persons sometimes even to persons other than flat owners.

Other than the suggestions set out by the stakeholders, CREDAI (Confederation of Real Estate Developers Association of India) through its Goa Branch approached the law commission and made suggestions regarding a Model Act for Real Estate Regulation of Development. The Act suggested that there should be establishment of Regulatory Authorities as well as Appellate Tribunal. The law commission was also of the view that there should be no authorities other than the statutory authorities in Goa to avoid multiplicity of authorities, corruption as well as red tapism. Therefore, the proposed legislations has included the following salient features. The name of the bill was “Goa Real Estate (Promotion, Control and Development) Bill 2011.

1) Compulsory execution of agreement containing details including carpet area, details of construction, and providing of all documents establishing title.

2) Compulsory transfer of apartment along with land and building to cooperative society or association and only in case where such organization cannot be formed, individuals Sale Deeds can be executed with proportionate rights in the land.

3) Prohibition on Mortgage of land/apartment without consent of the purchaser.

4) No receipt of money without letter of allotment or without entering into agreements.

5) Prohibition to collect the entire amount of consideration before delivery of possession.

6) Penalty in case of non- compliance of the provisions of the Act. By another recommendation the Law Commission desires to propose reduction in Stamp Duty to 1% for Housing Co-operative Societies as well as reduction of Registration fees from the existing 2% to 1% as a measure of promoting incorporation of Co-operative Housing Society as against other forms of conveyance of ownership. With the above views in mind and in consideration of the views of both builders/promoters as well as existing and prospective flat owners and upon consideration of Model Law proposed by Government of India and Model Law by CREDAI[56].

 

Marriages in Goa and distribution of Property

In Goa, marriage is a contract made between two persons of different sex with the purpose of legitimately constituting a family and it is solemnized before the Office of Civil Registrar. The religious ceremonies are often performed by the parties, days or months after the Civil Marriage, at their convenience and thereafter the couple starts living together as husband and wife. Certain persons are prohibited from contracting marriage between each other. For example, any spouse convicted of committing/abetting murder of the other spouse shall not marry the person who had been convicted of committing/abetting the same offence. One of the striking features of the Portuguese Civil Code is the Matrimonial Regime. The spouses can agree between themselves at the time of marriage, the manner in which their properties will be managed and disposed of during their matrimony. This is with respect to the assets they have at the time of marriage as also the assets including property they may acquire after marriage. It is also necessary to provide about the legal actions that third parties can take as against the assets of the married couple. Such agreements are called Matrimonial Regimes. The two prominent regimes prevailing under the Code are (1) Communion of Assets and (2) Total Separation of Assets. The prospective spouses, before marriage can opt between these regimes. They are free to choose any hybrid regime such as separation of assets acquired by each of them before marriage and communion of assets acquired after marriage. The regime chosen by the parties must be incorporated in a public deed executed before the marriage. In case the parties do not execute any such deed opting for the matrimonial regime, it is presumed that they are opting for the regime of communion of assets. Communion of Assets, as the name implies means that the assets brought by both of them becomes one after marriage and therefore belongs to both of them together. The communion ends by the dissolution of marriage. On the dissolution of marriage by divorce, the total property is to be divided into two parts and each half is allotted to each spouse, irrespective of what they had brought at the time of marriage, or what each one has acquired thereafter. In case of death of one of them, the half of the property and assets is owned by the surviving spouse and the other half goes to the mandatory heirs, i.e., the sons and daughters who have equal share in the assets of the deceased parent. The parent can dispose by will his property only to the extent of 50% the other 50% shall necessarily go to the legal heirs, hence the name “mandatory heirs”. In case of Separation of Assets, each of the parties to the marriage will continue owning the assets that he or she has brought to the marriage exclusively and on the death of one of them, the assets of the deceased will pass to the legal heirs. In both the regimes, administration of the properties vests in the husband. However the immoveable properties shall not be alienated without the consent and agreement of both. The Portuguese Code of 1867 is a mammoth legislation with parallel decrees substituting various provisions of the Code. Deciphering the Code, which is in Portuguese language, was itself a herculean task for the lawyers and judges in Goa. The state of Goa was a portugese colony and still follows the Portugese Civil Code of 1867. One of the basic provisions of the Civil Code of Goa talks about Equality. This means that the act does not discriminate on the basis of caste, ethnicity or gender and therefore is applicable on all Goans.

The state of Goa is till governed by the law of Portugese personal laws relating to marriage/divorce and succession. All the laws of the country are applicable to the State of Goa except the personal laws applicable to Hindus, Muslims, Christians etc. This means that irrespective of the caste, religion and beliefs of a person, and therefore there is one portugese family law relating to marriage, divorce, succession applies to Goans.

 

Effect of Marriage

Under the said laws of Goa, both husband and wife have equal share in the property. The husband and wife share half a share of the property held by them before and after the marriage solemnizes. Both the husband and wife are co sharers in the property and therefore if a conveyance of the property is done, both the husband and wife should be parties if a conveyance deed is made and if the conveyance deed is made by one of them, it is absolutely void. The concept is called Community Property Law therein. There is also a necessary registration of marriage because of which the woman acquires the right. Therefore, in a case involving legal separation, the women is entitled to fifty percent of the husband’s income and is not dependent on her husband’s alimony, gift or charity. Thus, there is a legal protection that has been accorded to the women as well as the chances of disputes between the husband and the wife has also been diminished. Similar is the case regarding inheritance, wherein if one of the couple dies, the other spouse gets half of the property possessed by them and the remaining goes to the children. The Civil Code of Portugese also bans Polygamy as well as Triple Talaq which is frequently prevalent in the Muslims residing in India. Family and Succession Law, Property Law (except its transfer) and Tort Law, are however still in force in Goa, Daman and Diu. They apply not only to Christians born there during Portuguese administration and to their descendants, but also to non-Christians in all matters not regulated in their Codes of Usages and Customs.

The Code has, thus, proved to be a powerful weapon to create and forge a cohesive, well-The High Court of Goa in the case of Shri Damodar Ramnath Alve vs Shri Gokuldas Ramnath Alve[57] knitted and homogeneous society with its citizens living in peace and harmony, as well as to strengthen that basic unit of the society – the family – by safe- guarding the interests of the children and of the widows. Therefore, a whole rounded protection is given to the women when it comes to property laws.

 

 

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References: 

[1] 1965 SCR (3) 841

[2] http://www.indialawjournal.org/archives/volume3/issue_1/article_by_mohit.html

[3] 1955 SCR (2) 22

[4] Under Section 2(c) of Maharashtra Ownership of Flats Act, 1963, a Promoter mean a person who constructs or causes to be constructed a block or building of flats for the purpose of selling some or all of them to other persons, or to a company, co-operative society or other associations of persons, and includes his assignees, and where the person who builds and the person who sells are different persons, the term includes both;

[5]CONSUMER CASE NO. 1188 OF 2015 delivered on 19 May, 2016

[6] General Liabilities of promoter

[7] Promoter before Accepting Advance Payment or Deposit to Cuter into Agreement and Agreement to be registered

[8] Promoter to maintain separate Account of sums taken as advance or deposit and to be trustee therefor, and disburse them for purposes for which given

[9] Promoter to take steps for formation of Cooperative Society or company

[10] Promoter to Convey title, etc. and Execute Documents, According to Agreement

[11] Section 11- Promoter to convey title, etc. and execute necessary documents, according to agreement

A promoter shall take all necessary steps to complete his title and convey to the organization of persons, who take flats, which is registered either as a cooperative society or as a company as aforesaid, or to an association of flat takers [or apartment owners] his right, title and interest in the land and building, and, execute all relevant documents therefor in accordance with the agreement executed under section 4 and if no period for the execution of the conveyance is agreed upon, he shall execute the conveyance within the prescribed period and also deliver all documents of title relating to the property which may be in his possession or power.

[12] Reference taken from http://deemedconveyance.in/

[13] WRIT PETITION (STAMP) NO. 17637 OF 2014 delivered on 24 March, 2015

[14] AIR2010 SC 3607

[15] Regulations 2(47) of DCR defines ‘garage-private’ which means a building or a portion thereof designed and used for the parking of vehicles whereas Regulation 2(48) of DCR defines `garage-public’ which means a building or portion thereof designed other than as a private garage, operated for gain, designed and/or used for repairing, serving, hiring, selling or storing or parking motor-driven or other vehicles.

[16]Section 3(b) Slum Rehabilitation Scheme

[17] 5B. Power of competent Authority to require occupiers to vacate premises

[18] TRANSFERABLE DEVELOPMENT RIGHTS (TDR) — Transferable Development Rights (TDR) is compensation in the form of Floor Space Index (FSI) or Development Rights which shall entitle the owner for construction of built-up area subject to provisions in this regulation. This FSI credit shall be issued in a certificate which shall be called as Development Right Certificate (DRC). Development Rights Certificate (DRC) shall be issued by Municipal Commissioner under his signature and endorse thereon in writing in figures and in words, the FSI credit in square meters of the built-up area to which the owner or lessee is entitled, the place from where it is generated and the rate of that plot as prescribed in the Annual Statement of Rates issued by the Registration Department for the concerned year. The afforested definitions of TDR and DRC have been taken from NOTIFICATION from URBAN DEVELOPMENT DEPARTMENT dated January 16, 2016

https://www.pcmcindia.gov.in/admin/cms_upload/submission/4020242081454326567.pdf

[19] Section 34 of Development Control Rules

[20] [2007](2) ALLMR 110

[21] https://www.pcmcindia.gov.in/admin/cms_upload/submission/4020242081454326567.pdf; Notification available

[22] Rule 2(3)(42) of the Development Control Regulations for Greater Bombay, 1991 (DCR)

[23] Esha Ekta Apartments Co-operative Housing Society Limited and others v. Municipal Corporation of Mumbai and others SLP(C) NO. 33471 of 2011

[24] Pratibha Co-Operative Housing … vs State Of Maharashtra And Ors 1991 AIR 1453

[25] Review Petition (civil) 1809 of 2005

[26]Section 10 Promoter to take steps for formation of cooperative society or company.

(1) As soon as a minimum number of persons required to from a Cooperative society or a company have taken flats, the promoter shall within the prescribed period submit an application to the Registrar for registration of the organization of persons who take the flats as Co-operative society or, as the case may be as, a company; and the promoter shall join, in respect of the flats which have not been taken, in such application for membership of a Co-operative society or as the case may be, of a company. Nothing in this section shall affect the right of the promoter to dispose of the remaining flats in accordance with the provisions of this Act : 2[Provided that, if the promoter fails within the prescribed period to submit an application to the Registrar for registration of society in the manner provided in the Maharashtra Co-operative Societies Act, 1960, the Competent Authority may, upon receiving an application from the persons who have taken flats from the said promoter, direct the District Deputy Registrar, Deputy Registrar or, as the case may be, Assistant Registrar concerned, to register the society : Provided further that, no such direction to register any society under the preceding proviso shall be given to the District Deputy Registrar, Deputy Registrar or, as the case may be, Assistant Registrar, by the Competent Authority without first verifying authenticity of the applicants, request and giving the concerned promoter a reasonable opportunity of being heard.]

(2) If any property consisting of building is constructed or to be constructed 3[and the promoter submits such property to the provisions of the Maharashtra Apartment Ownership Act, 1970, by executing and registering a Declaration as provided by that Act] then the promoter shall inform the Registrar as defined in the Maharshtra Co-operative Societies Act, 1960, accordingly; and in such cases, it shall not be lawful to form any co-operative society or company.

[27] SUIT (LODGING) NO. 229 OF 2010

[28]Rule 59 of the Maharashtra Co-operative Societies Rules 1961

[29] http://www.roselandresidency.com/data/Housing%20Manual%202012%20English.pdf; A manual published by the Government of Maharashtra

[30] http://www.roselandresidency.com/data/Housing%20Manual%202012%20English.pdf A manual by Government of Maharashtra

[31]  “consumer” means any person who, (i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

(ii) ¹² [hires or avails of] any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who ¹² [hires or avails of] the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person.

[32] CONSUMER COMPLAINT NO. 296 OF 2011

[33] (2007) CPJ 199 (NC)

[34] CONSUMER CASE NO. 347 OF 2014

[35] Section 2(g) of Consumer Protection Act, 1986

[36] 21 November, 2007

[37]1994 AIR 787

[38]Arising out of SLP(C) No. 21740 of 2007

[39]MANU/MR/0012/2003

[40]Case No. 19 of 2010

[41] Section 63 of RERA

[42]http://mja.gov.in/Site/Upload/GR/Civil%20Summary%20of%20Workshop%20dated%2022.3.2015%20in%20Chandrapur%20District.pdf

[43] 1971  GLR  355

[44] 1987 (Supp) SCC 27

[45] PROCEDURE FOR DECIDING DISPUTES-

96. (1) Notwithstanding anything contained in any other law for the time being in force, any dispute touching the constitution, management or business of a society shall be referred in the prescribed from either by any of the parties to the dispute, or by a federal society to which the society is affiliated, or by a creditor of the society, to the Registrar, if the parties thereto are from amongst the following : (a) a society, its committee, any past committee, any past or present officer, any past or present any past or present servant or nominee, heir or legal representative of any deceased officer, deceased magnet or deceased servant of the society, or the Liquidator of the society; (b) a member, past member or a person claiming through a member, past member or a deceased member of a society, or a society which is a member of the society; (c) a person, other than a member of the society, who has been granted a loan by the society, or with whom the society has or had transactions under the provisions of section 46, and any person claiming through such a person : (d) a surety of a member, past member or a deceased member, or a person other than a member with has been granted a loan by the society under section 46, whether such a surety is or is not a member of the society : (e) any other society, of the Liquidator of such a society.

(2) When any question arises whether for the purposes of sub – section (1) a matter referred to for decision is a dispute or not, the question shall be considered by the Registrate, whose decision shall be final. Disputes.

Explanation 1. – For the purpose of this sub – section, a dispute shall include- (i) a claim by a society for any debt or demand due to it from a member, past member or the nominee, heir or legal representative of a deceased member, without such a debt or demand be admitted or not ; (ii) a claim by a surety for any sum or demand due to him from the principal borrower in respect on a loan by a society and recovered from the surety owing to the default of the principal borrower, whether such a sum or demand be admitted or not ; (iii) a claim by a society for any loss caused to it by a member, past member, or deceased member, by any officer, past officer or deceased officer, by any agent, past agent deceased agent, or by any servant, past servant or deceased servant, or by its committee, past or present whether such loss be admitted or not; (iv) a result or failure by a member, a past member or a nominee, heir or legal representative of a deceased member, to deliver possession to a society of land or any other asset resumed by it nor Disputes. breach of conditions of the assignment.

Explanation II. – For the purposes of this section, the expression “agent” includes in the case of a housing society, an architect, engineer or contractor engaged by the society.

[46]1982 GLH (UJ-8) 6

[47] Section 36 – Expulsion of Members

[48] Section 4 of Companies Act, 2013 deals with Memorandum of Association of a company. It is a legal document which includes the objects for which a company is made, the capital of the company, liability of the members of the company.

[49] Section 5 of Companies Act, 2013 deals with Articles of Association of a company. It says that the articles of a company shall contain the rules and regulations for management of the company. The articles shall not prevent a company from including such additional matters in its articles as considered necessary for the management.

[50] 98. Settlement of Disputes

(1) If the Registrar is satisfied that any matter, referred to him is a dispute, within the meaning of section 96 the Registrar shall, subject to the rules, decide the dispute himself, or refer it for disposal to a nominee, or a board of nominee, appointed by the Registrar : Provided that no person who is connected with a dispute or with the society at any or has previously inspected the society or audited its accounts shall be appointed as a nominee or as member of the board of nominees to settle the dispute.

 

(2) Where any dispute is referred under sub – section (1) for decision to the Registrar’s nominee or board of nominees, the Registrar may at any time, for reasons to be recorded in writing withdraw such dispute from his nominee, or board of nominees, and may decide the dispute himself, or refer it again for decision to any other nominee, or board of nominees, appointed by him. (3) Notwithstanding anything contained in section 96, the Registrar may, if he thinks fit, suspend proceedings in regard to any dispute, if the question at issue between a society and a claimant or between different claimants, is one involving complicated question of law of or fact, until the question has been tried by a regular suit instituted by one of the parties or by the society. If any such suit is to instituted within two months from the – Registrar’s order suspending proceedings, the Registrar shall take action as is provided in sub – section (1).

[51] Registrar of Cooperative Societies :Under Section 3 of the Gujarat Cooperative Societies Act, 1961, a Registrar means the following (1) For carrying out the purposes of this Act, the State Government shall appoint a person to be the Registrar of Co – operative Societies for the State. (2) To assist the Registrar in the functions under this Act, the State Government may appoint such number of Additional Registrars, Joint Registrars, Deputy Registrars, Assistant Registrars and other persons with such designations as it may think fit. (3) The State Government may, be general or special order, confer on a person or persons appointed under sub – section (2) all or any of the powers of the Registrar under this Act. (4) Every person appointed under sub – section (2) shall work under the general guidance, and the superintendence and control of the Registrar.

 

[52] Explanation to Section 96 of Gujarat Cooperative Societies Act, 1961

[53] The term Committee under section 2(5) of the Gujarat Cooperative Society(Amendment) Act, 2013 refers to the Managing Committee or other governing body of a society to which the direction and control of the management of the affairs of the society is entrusted to.

[54] AIR 1969 SC 1320

[55] http://goalawcommission.gov.in/reports/report13.pdf

 

[56] http://goalawcommission.gov.in/reports/report13.pdf

[57] 1997 (4) BomCR 653