ETERNIA COOPERATIVE HOUSING SOCIETY LTD. Vs. LAKEVIEW DEVELOPERS

JUDGEMENT

(1.) Powai is a suburban area in north-east Mumbai. It lies about half Mumbai's north-western suburb of Jogeshwari and the northeastern suburb of Vikhroli. The Powai Lake is a large water body just south of the city's fabled Sanjay Gandhi National Park. To the north-east of this lake is the Indian Institute of Technology, Mumbai (IIT-B). On the south/south-eastern shore is an area known as the Powai Area Development Scheme ("PADS"). This is a sprawling development of some 230 acres, all of it being developed by one or more entities in the Hiranandani Group, a conglomerate of realestate developers. Defendants Nos.1 to 11 are all individuals or entities in that group. The PADS is divided into different sectors. One of these is Sector IV-A, a roughly trapezoidal area of some 30 acres. It does not directly abut the lake; it is a few hundred metres from the lakeshore. It is the proposed further development on Sector IV-A by Defendants Nos. 1 to 11 ("the Hiranandanis") that is the heart of the present dispute.

(2.) The eight Plaintiffs and Defendant No.12 are all co-operative housing societies of fully constructed residential apartment buildings in Sector IV-A (collectively, including Defendant No.12, "the Societies"). Mr. Kapadia for the Plaintiffs argues that the buildings of the Societies were not all built simultaneously or in one go. They were constructed one by one, and as each was constructed, the Hiranandanis showed on the various building plans, a reducing Floor Space Index ("FSI") or quotient of buildability remaining available till, details aside, none was left. There is also one additional commercial building, named 'Galleria' , on Sector IV-A. What the Hiranandanis now propose is to erect several more buildings on Sector IV-A. This they cannot do, Mr. Kapadia says, without the Societies' consent, and there is, in any case no inherent or intrinsic FSI remaining available in Sector IV-A; it would have to be 'imported' and 'loaded on'. At no point did the Hiranandanis indicate that Sector IV-A had any additional buildable potential, either with the importation and loading-on of Transferable Development Rights ("TDR"), slum re-development FSI, or any other form of additional building rights. Under the provisions of Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 ("MOFA"), the Hiranandanis do not have any statutory entitlement to build any further on Sector IV-A without the Societies' consent. The failure to seek that consent is, he says, an estoppel against the Hiranandanis and an acquiescence. What they do have is a contractual and statutory liability to execute a conveyance in favour of a federation of these Societies (or an apex society). The right to develop further and the obligation to convey title are, Mr. Kapadia says, independent arguments.

(3.) Mr. Chinoy for Defendants Nos. 1 to 3 and Mr. Madon for Defendants Nos. 7 to 11 decry Mr. Kapadia's submissions. They come too late in the day, they say, for the Societies remained somnolent for a very long time: between 2005 and 2011 they said nothing, though aware since at least 2007 of the changing configuration of the development. The only trigger to the present cause of action, Mr. Chinoy argues, is that the Hiranandanis are now required by a binding decision of a Division Bench of this court to provide a large number of 'middle-income group' ("MIG") housing. This is the Hiranandanis' obligation under its lease from the 13th Defendant, the Mumbai Metropolitan Region Development Authority ("MMRDA"). Such development is also the statutory intendment under MOFA. At no point was the Societies' consent necessary for this additional development; and, consequently, no question of estoppel or acquiescence arises. A public purpose is sought to be achieved by the additional development, and this cannot be allowed to be stymied by elitist arguments; and elitist it is, Mr. Chinoy insists, for the only cause for the suit is the proposed development of these additional MIG buildings. These will affect or perhaps even block the Societies' members' grand views of Powai Lake, but that is no reason to deny the fulfilment of a wider public objective. The Societies have no legal right to rooms with a view. That concern is irrelevant and must yield to the Hiranandanis' proposed development, one that is now with a view to a room for those not as fortunate. This, Mr. Chinoy says, is the classic NIMBY syndrome: Not In My Back Yard. Carrying this further, Mr. Chinoy's arguments suggest that Mr. Kapadia's interpretation of the governing statute, MOFA, and in particular Sections 7 and 7A of it, would generate in a city like Mumbai yet another syndrome, and that is, though Mr. Chinoy does not use the word, the BANANA syndrome: Build Almost Nothing Anywhere Near Anyone. Mr. Chinoy does say that this is an entirely unviable situation in Mumbai. It would stifle and stymie all multi-building scheme-based development on large plots. This is not, he says, by any means the statutory intent. Nothing in MOFA prohibits additional development or additional buildings per se. MOFA does not deal with additional construction except in a positive sense in Section 7A. It does not restrict anyone to any particular layout or plan. That section is legislative policy, and in the context of a multi-building project or the development of a township, any rigid or fixed notions of aye or nay have no place. What the law requires is that a flat owner be informed of the probability or potentiality of additional construction. A builder may say to prospective flat purchasers, "this is my scheme, and, subject to my plans being approved, I may construct further buildings." He need say nothing further. To demand affirmation of every new construction is to revert the law to a position prior to its amendment, something that is wholly impermissible. Mr. Kapadia's case on representations being made, Mr. Chinoy argues, is a point sought to be made not under statute but under contract, two very different things.