Allahabad High Court's stay on construction in Omaxe Grandwoods comes as a warning to all developers

Allahabad High Court's stay on construction in Omaxe Grandwoods comes as a warning to all developers

real estate Updated: Jun 26, 2015 13:30 IST
Allahabad High Court,Omaxe Grandwoods,Uttar Pradesh Apartment (Promotion of Construction

Today builders change building plans at the drop of a hat, violating construction norms without fear of legal repercussions. However, a great concern is that development authorities in Noida and Greater Noida are wilfully disregarding the Uttar Pradesh Apartment (Promotion of Construction, Ownership and Maintenance) Act, 2010. They are offering additional FAR (floor area ratio, which allows builders to add more structures or floors to buildings); and clearing changes in building plans without ensuring if consent has been taken from residents in the projects as per the Apartment Act.

The matter was brought to light when the Allahabad High Court recently came to the rescue of homebuyers, restraining real estate developer Omaxe from further building any structures in its completed project, Grandwoods, in Sector 93, Noida.

How a developer was permitted by the Authority to revise its project plan after completion of the project is a question that only the top officials of the Authority can answer.

Grandwoods, launched in 2006 on a 1,20,000 sq mt plot in sector 93B, Noida, was allowed 1.5 FAR in its original layout plan. Apartments were sold till 2010 on the basis of the original layout plan. When the project was almost ready, on May11, 2011, Omaxe applied for 33% extra FAR. Two days later, on May 13, 2011, the builder also applied for a completion certificate. A few days later, on May 31, Omaxe was given the required FAR, which meant that the builder could add more structures or build further on them.

Soon after that, in July 2011, Omaxe started construction on the basis of the revised plan and allegedly encroached upon common areas and facilities such as parks and common parking. In August, 2011, the apartment owners filed a writ petition in the Allahabad High Court (HC) for scrapping the revised plan for violation of the UP Apartment Act 2010. They alleged that villas would be built as per the new plans on areas meant for parks with grass lawns.

The HC granted an interim stay on construction on August 30, 2011, but in 2014, the developer again encroached upon another park area and started excavation work to construct two high-rise towers called Riyasat. Grandwoods resident Dipesh Jain filed another petition with the HC on April 2015. He pleaded that as per provision 4 (4) of the UP Apartment Act, consent of buyers was necessary for alterations in housing plans. No consent was given by the homebuyers, nor did anyone seek their consent for making alterations or changes in the original housing plans. Rather, Jain alleged, the entire process was kept under wraps by the respondents (Noida Authority and the developer) to avoid any legal action and bring about permanent changes.”

Extra FAR of “33% had enabled respondent 4 (Omaxe) to encroach upon the common undivided open park area for the construction of an apartment tower named Riyasat, thereby reducing the exit passage below the applicable National Building Code. Extra floors and extra buildings have been added to the original sanctioned plan in the declared group housing scheme which is not permitted under law as no consent was obtained before the plans were amended,” Jain alleged.

After hearing the petitioner the HC said, “Respondent no.4 (Omaxe) got the layout originally sanctioned for construction of 25 towers. Subsequently respondent no 4 (Omaxe) made additional purchase of 33% FAR and got sanction of constructing two additional towers, 26 and 27, over the green area earmarked in the original layout, without the consent of the apartment owners in violation of the statutory provisions contained in the UP Apartment (Promotion of Construction, Ownership and Maintenance) Act, 2010.”

The High Court also said “that the additional purchase of FAR without consent of apartment owners has been held to be illegal by a Division Bench of this Court in the case of M/s Designarch Infrastructure Private Limited & another vs. Vice Chairman, Ghaziabad Development Authority & others... in the following terms: The FAR or any additional FAR is a property, appended to rights in the property on which the building is constructed, and is thus a property in which the apartment owners have interest by virtue of the provisions of the UP Apartment Act, 2010. The purchase of additional FAR is not permissible to be appropriated by the promoter without any common benefits to the apartment owners.

The consent of the apartment owners obtained by resolution in the meeting of the apartment owners by majority will be necessary for purchasing additional FAR. Its utilisation will also be subject to the consent of the apartment owners,” the HC held.

Citing a previous case, of Prakash Pvs vs. New Okhla Industrial Development Authority, the HC held that on similar grounds this Court entertained the petition and granted an interim stay on August 30, 2011. “For all the reasons we deem it appropriate to restrain the respondent no 4 (Omaxe) from raising any constructions as per revised sanction,” the HC ordered.

It also issued a notice to Noida Authority and asked it to file its reply within four weeks. When contacted for its reaction, no Noida Authority official was available for any comment.

Changes of layout plans are common in Noida and Greater Noida. “It has created multiple problems in group housing projects. Reputed developers have indulged in such practices in collusion with Noida Authority. The change in construction plan midway in any project delays the completion of the whole project. Developers promise a park facing flat and then erect a tower in the green area. This judgment will encourage more and more buyers to take their builders to court in case of FAR violation,” says Rahul Rathod, a Supreme Court lawyer.

Allegations are false, misleading: Omaxe

Though the Allahabad High Court (HC) refused to entertain developer Omaxe’s argument to dismiss the plea by the residents of its project Grandwoods, the developer put up a strong case in its favour, arguing that the petitioner filed the writ petition by concealing material facts with some ulterior motives to gain undue benefits from Omaxe.

The builder questioned the filing of the petition after four years from the date of approval of the revised layout plan in July 2011, and also tried to convince the HC that Grand Omaxe was a separate project which was demarcated by boundary walls. The rights of the allottees of Grand Omaxe was limited to the common areas and facilities within the boundary of Grand Omaxe only, it claimed.

“The petitioner had made a completely false and misleading statement in paragraph 25 of the writ petition wherein it has been stated that the apartment building named Riyaasat has been allowed to be constructed in the open park area in pursuance of plan dated May 30, 2011. Further, the petitioner seeks parity of the order dated August 8, 2011 passed in the case of Prakash PVS. In fact the facts of the present case are completely different from the facts of the case of Prakash PVS where the construction of some villas were proposed in the open area with the Omaxe Grandwoods project. However, no such construction has been proposed within Omaxe Grandwoods Project as alleged in the writ petition,” the developer said.

Omaxe also argued that the petitioner was a resident of Victoria, Omaxe Grand, and he was challenging the construction of a new proposed building beyond the boundary of the Grand Omaxe project, which was not permissible under the law.

Drawing the attention of the court to a clause in the allotment letter of the petitioner which says, “the allottee agrees and authorises the company to make additions to or put up additional structures in/upon the project building or additional units and/or structures anywhere in the said project as may be permitted by the Competent Authorities…” the builder argued, “the aforesaid clause clearly stipulates of a situation where some additional structures can be put up by the builder, if the same is permissible under the law and authorisation has been granted by the competent authority.”

First Published: Jun 26, 2015 13:07 IST