Court’s Decision
The Bombay High Court (Justice Sandeep V. Marne) dismissed the interim application filed by the plaintiffs-societies seeking to restrain the defendant-society from proceeding with its redevelopment based on a decree and conveyance deed executed in 2010 and 2023 respectively. The Court held that the plaintiffs failed to make out a prima facie case for injunction and emphasized that the issue of “division of land proportionate to built-up area under different FSI regimes” would require detailed adjudication at the trial stage, not at the interim stage.
The Court observed —
“Whether the principle of division of land proportionate to the built-up area utilized for construction of each building is to be followed in cases where buildings are constructed by using different FSI is a tricky issue.”
It was held that the decree dated 18 November 2010 had attained finality, and the conveyance executed in favour of the defendant-society could not be disturbed through a subsequent suit. The balance of convenience, according to the Court, was in favour of permitting the defendant-society to proceed with its redevelopment due to the dilapidated condition of the buildings constructed in 1973–75.
Facts
The plaintiffs were co-operative societies formed in 2009 in respect of “Building No.2” consisting of Wings A and B, constructed in 2008 within a common layout originally owned by M/s Comproind Pvt. Ltd. The first defendant-society was formed in 1975 for “Building No.1,” which stood on land admeasuring 2399.55 sq.mtrs.
M/s Comproind sold the entire layout to subsequent owners, who in 2004 entered into an agreement with the defendant-society to treat the entire land as a common layout for FSI purposes. Based on this, the developers constructed Building No.2 and obtained occupancy in 2008.
In 2007, the defendant-society had filed L.C. Suit No. 3454/2007, seeking conveyance of the land under Section 11 of the Maharashtra Ownership Flats Act (MOFA). The City Civil Court decreed the suit in 2010 directing the developers to convey CTS No.507/C and 50% of CTS No.507/B to the defendant-society. The decree was executed in 2023 through the Registrar acting as Court Commissioner. The plaintiffs, alleging deprivation of their share, challenged both the decree and the conveyance deed, seeking to restrain redevelopment.
Issues
- Whether the plaintiffs-societies could challenge the 2010 decree and the subsequent conveyance executed in 2023 in favour of the defendant-society.
- Whether land in a common layout should be divided proportionate to built-up area consumed when buildings are constructed under different FSI regimes.
- Whether the plaintiffs had established a prima facie case to restrain redevelopment pending the suit.
Petitioner’s Arguments
The plaintiffs contended that the conveyance deed was executed behind their back, and since their societies were registered before the 2010 decree, they should have been impleaded. They argued that the decree caused an FSI imbalance, rendering their own construction illegal, as the defendant-society had taken an unfair share of land and rights in the layout.
Counsel Dr. Abhinav Chandrachud submitted that:
- The 2004 agreement expressly allowed amalgamation of plots and sharing of FSI for development of both buildings, thereby entitling the plaintiffs to a proportionate share.
- The decree was obtained by misrepresentation and could not bind the plaintiffs.
- The defendant’s redevelopment, if allowed, would make the plaintiffs’ structures unlawful and deprive them of access and parking space.
The plaintiffs asserted entitlement to 66.59% of the total land area based on built-up area consumption, relying on their architect’s report.
Respondent’s Arguments
Senior Advocate Mr. Vineet Naik, appearing for the defendant-society, argued that the suit was barred by res judicata, as the same issues had been settled by the 2010 decree which attained finality. The plaintiffs, claiming through the original developers, could not reopen concluded litigation.
He emphasized that:
- The 2004 agreement clearly acknowledged ownership of the defendant-society over CTS No.507/C and 50% of CTS No.507/B.
- The conveyance executed pursuant to the decree was lawful and binding.
- The plaintiffs had themselves benefited from the defendant’s consent for FSI amalgamation and could not now challenge the same.
- The defendant’s building, being 50 years old and unsafe, required urgent redevelopment.
The defendant submitted its own architect’s report showing that the plaintiffs’ construction consumed TDR of 3463.90 sq.mtrs, and by proportionate division, the defendant’s share of land would still be higher. Hence, no injunction could be granted.
Analysis of the Law
The Court analysed Section 11 of the Maharashtra Ownership of Flats Act, 1963 (MOFA), emphasizing the promoter’s obligation to convey land to the society of flat purchasers. While conveyance in a single-building project is straightforward, difficulties arise in multi-building layouts where buildings are constructed at different times and under evolving FSI policies.
Justice Marne explained that the principle of proportionate conveyance based on built-up area consumed is well recognised and also endorsed by the Government Resolution dated 22 June 2018, permitting conveyance in proportion to constructed area. However, he observed that the situation becomes complex when different buildings are built using varying FSIs (base, incentive, or TDR-loaded FSI).
The Court noted that Building No.1 (defendant) was constructed under FSI 1.00, while Building No.2 (plaintiffs) used higher FSI and TDR benefits, resulting in a significant imbalance in built-up area. This, the Court observed, was a matter of detailed examination at trial rather than at the interim stage.
Precedent Analysis
The Court referred to and relied upon:
- Government Resolution dated 22 June 2018 — Recognising the principle of proportionate conveyance based on built-up area.
- City Civil Court Judgment dated 18 November 2010 — Which had conclusively adjudicated ownership and conveyance rights in favour of the defendant-society under MOFA.
- Section 115 of the Evidence Act — Applied by the City Civil Court earlier to hold that the defendant was estopped from denying consent granted in the 2004 agreement.
The High Court held that since the decree was never challenged, it attained finality, and the plaintiffs could not seek to indirectly nullify it through a fresh suit.
Court’s Reasoning
The Court reasoned that while the plaintiffs’ contention regarding FSI imbalance and equitable division raised substantial questions, those could only be decided after evidence is led. At the interim stage, the plaintiffs could not restrain the defendant from exercising rights under a valid decree and conveyance deed.
Justice Marne observed:
“Once the decree dated 18 November 2010 and the subsequent conveyance have attained finality, the challenge to them in a collateral proceeding cannot be sustained.”
The Court also noted that the redevelopment of Defendant No.1’s dilapidated building was urgent, and halting it would cause greater prejudice to its members than any speculative harm to the plaintiffs.
Conclusion
The Court dismissed the plaintiffs’ interim application, holding that:
- No prima facie case existed to restrain redevelopment;
- The balance of convenience favoured the defendant-society; and
- The decree and conveyance deed could not be stayed at the interim stage.
However, Justice Marne clarified that the issue of proportionate division and FSI computation would remain open for detailed adjudication during the final hearing of the suit.
Implications
This judgment reinforces that:
- Redevelopment rights based on valid conveyance deeds cannot be stalled by subsequent societies on speculative FSI disputes.
- Concluded decrees under MOFA cannot be collaterally challenged through fresh litigation.
- The principle of proportionate conveyance remains significant, especially where different buildings within a common layout use different FSIs, but such issues require comprehensive evidence.
- Courts will lean against injunctions that delay redevelopment of unsafe buildings, particularly in Mumbai’s ageing housing stock.
