HC: Developer bound by MOFA agreements, can’t exceed disclosed plans
Bombay High Court rules that a developer cannot construct additional floors beyond what is disclosed in agreements with flat buyers under the Maharashtra Ownership Flats Act. The court upheld an order restraining M/s KM Realty from building a G+16-storey building instead of the originally planned G+7 storied structure. The developer argued that the consent of existing flat buyers was not required, but the court rejected this argument.
MUMBAI: The Bombay High Court recently held that a developer cannot undertake additional construction beyond what is disclosed in Maharashtra Ownership Flats Act (MOFA) agreements entered with flat buyers. A single judge bench of justice Sandeep Marne upheld the order from the Bombay City Civil Court, restraining M/s KM Realty from constructing a G+16-storey building instead of the originally planned G+7 storied structure in Chunabhatti.
“Prima facie, a disclosure made in the MOFA agreement about the number of floors would also bind the developer and it would not be open for the developer to construct additional floors than the one disclosed in the MOFA agreement,” said Marne while rejecting the developer’s appeal challenging the City Civil Court order of February 22, 2023.
The City Civil Court passed the interim order on a suit filed by Diamond Hill Co-operative Housing Society formed by flat buyers in two of the three buildings constructed by KM Realty, off Sion Chembur Road in Chunabhatti East.
The property development began in 2004, and after completing two buildings by October 2010, the developer sought the housing society’s non-objection for the third building, initially planned as G+7 floors. However, in November 2019, the plans were revised to a G+16-storey structure, prompting the housing society to file a suit before the City Civil Court contending that the third building was not in terms of the disclosure made in MOFA agreements and the additional floors and wider plinth area of the proposed building will alter their living conditions.
Acting on their plea, on February 22, 2023, the civil court restrained the developer from proceeding with the new plans but allowed the developer to construct a G+7-storey building, as disclosed in the MOFA agreements.
The developer argued that since the flat purchasers consented to use and utilisation of the balance FSI (floor space index) potential of the plot, the number of floors or area of the footprint of the new building would be irrelevant, and it would be open for the developer to make necessary alterations in the additional building as may be necessary for consuming entire balance FSI potential of the plot.
Justice Marne rejected the argument, observing that “under the guise of utilising the available FSI potential, the developer cannot be permitted to turn the disclosed plans and layout topsy-turvey, thereby completely frustrating the objective behind the statutory framework of MOFA and MOFA Rules,” which mandate the developer to make true and full disclosure of his plans in the layout to flat buyers. The bench also dismissed the argument that the consent of flat purchasers from the existing buildings was not required since their amenities were not reduced in any manner, there was no question of obtaining their consent for the construction of the third building as per revised plans.