Circular Issued By Inspector General of Police, Ground Realities & Builders Obligation towards Flat Purchasers

Complaints

By Accommodation Times News Service

By Adv. Vinod Sampat 

It is an open secret that ever since the enactment of Maharashtra Ownership Flats (MOF) Act, flat purchasers have been exploited. In my view every political party has got builders as its leaders who are able to protect the commercial interest of builder-lobby. The origin of areas like New Cuffe Parade and Upper Worli in my view are nothing but marketing strategies to promote the project.

The law stipulates that carpet area has to be mentioned. How many builders mention about the same in advertisements is left to my readers to guess.

Let me substantiate my views. Why it is that MOF Act is a toothless Act? To begin with their is no machinery in the government which has any systematic check on the builders. The standard reply is we have resource constraint. I ask a simple question. What stops the government from obtaining data from builders at the time when they submit the proposal for construction to municipal authorities as regards status of their past projects? Why cannot a hefty amount in the nature of deposit or a lien of say 10% of the total construction be an IOD condition and it should be released only after receipt of occupation certificate and Conveyance in favour of legal entity? No wonder some call the full page advertisements given by builders in newspapers jokingly as advertisements to fool the purchasers. The enclosed data obtained under the right to information act as regards receipt of occupation certificate, building completion certificate will shed light. That is why I call it the system’s failure.

Statistics With Regards To Receipt of Oc, Bldg. Completion Certificate From BMC

YEAR

NO. OF PROPOSAL RECEIVED

NO. OF IOD ISSUED

NO. OF CC

ISSUED

NO. OF OC ISSUED

NO. OF BCC ISSUED

% OF IOD RECD

% OF CC ISSUED

% OF OC ISSUED

% OF BCC ISSUED

2003-04

2143

1469

1871

951

202

68.50

87.30

44.38

9.43

2004-05

1937

1355

1948

911

168

69.95

100.56

47.03

8.67

2005-06

1766

1289

1829

967

168

72.99

103.56

54.57

9.51

2006-07

1720

1195

1731

887

143

69.47

100.64

51.57

8.31

2007-08

1602

1100

771

831

120

68.66

48.12

51.87

7.49

2008-09

1398

990

1528

590

133

70.81

109.29

42.20

9.51

2009-10

860

409

789

270

44

47.55

91.74

31.39

5.11

2010-11

1418

1062

1444

545

72

74.89

101.83

38.43

5.07

2011-12

1526

972

1402

936

96

63.69

91.87

61.33

6.29

Total

14370

9841

13313

6888

1146

68.48

92.64

47.93

7.97

I have no hesitation in saying that not even 15% of the Co-operative Housing societies in Maharashtra have the Conveyance of properties in their names.

The only thing builders are afraid as of date is consumer courts. The enclosed judgments may be of use to co-operative societies and flat purchasers.

Sr.

No.

Parties Name

Court Citation

Contents

 

1.

SMT. NEENA SUDARSHAN WADIA   ..  Appellant

Versus

M/S. VENUS ENTERPRISES              …  Respondent

&

KUNJAN CONSTRUCTION CO.           … Appellant

Versus

DEEPAKBHAI R. SHAH AND OTHERS

.. Respondents

 

1984 (2) Bom. C. R. 505

Before R. L. Aggarwal, J.

APPEAL No.575 of 1982

“Consent” —— Cannot mean blanket authority obtained at the time of agreement for sale or handing over possession of  flat

A blanket consent or authority obtained by a promoter at the time of entering into an agreement for sale or at the time of handing over possession is not the consent contemplated by section 7(1) (i) or (ii) for such a blanket consent or authority would sew up or nullify these provisions.

The promoters cannot, under the cloak of the blanket consent obtained under the proforma agreement for sale, carry out the work of additional structures and thus set at naught the provisions of section 7 (1)(ii).

2

Friends Colony Development Committee

…….Appellant

V/s.

State of Orissa and others

…… Respondents.

 

AIR 2005 SUPREME

COURT 1

(From: 1996 AIHC 5515 (Orissa))

R. C. LAHOTI, C. J. AND ASHOK BHAN, J.

Civil Appeal No. 12984 of 1999, D/- 1-11-2004.

Heavy penalty to be imposed on erring professional builders

3.

Lata Construction and others                                 …Appellants

Versus

Dr.RameshchandraRamniklal Shah and other    …Respondents

1986-2002 CONSUMER 6211 (NS)

SUPREME COURT OF INDIA

Hon’bleMr. Justice S. Saghir Ahmad and

Hon’bleMr. Justice R. P. Sethi

Cause of action in continuous in nature in certain cases.

4.

M/s. Sharma Properties Pvt. Ltd.                                         …Appellant

Vs.

Prerna Co-operative Housing Society                                      …Respondent

 

 

 

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISION

NEW DELHI

FIRST APPEAL NO. 347 OF 1999

(Form the order dated 7.6.99 in CC No. 308/91 of the state Commission, Maharashtra)

BEFORE:-

HON’BLE JUSTICE D. P. WADHWA.                                               PRESIDENT

MR. B.K. TAIMNI, MEMBER

Occupation Certificate

5.

Madhuvihar Co-op. Hsg. Society,      & others

… Appellants (Orig. Plaintiffs)

v/s.

M/s. Jayantilal Investments,

…  Respondents (Original Defendants)

IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE

First Appeal No. 786 of 2004

And

First Appeal No.  989 of 2004

FIRST APPEAL NO. 786 of 2004

Changes in Building Plan.

6

NahalchandLaloochand

Pvt.Ltd,Appellant

V/s.

Panchali Co-operative Housing Society Limited.                                                                                               ..Respondent

IN THE HIGH COURT OF APPELLATE JUDICATURE AT BOMBAY JURISDICTION

FIRST APPEAL NO. 2182 OF 2007

Coram : MARLAPALLE J.

Section 5  read  with  Section  53-A  of  the Transfer  of  Property Act, 1882  does not  permit  the enclosed stilt parking spaces  to  be sold either to third parties or to the  members of  the Society.

Open Parking or stilt parking space cannot be sold by the builder.

7

NahalchandLaloochandPvt. Ltd.                 …Appellant

v/s

Panchali Co-operative Housing Society Ltd.

…. Respondent

Versus

 

 

WITH

 

 

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICT-ION

CIVIL APPEAL NO. 2544 OF 2010

CIVIL APPEAL NO. 2545 OF 2010

CIVIL APPEAL NO. 2546 OF 2010

CIVIL APPEAL NO. 2547 OF 2010

CIVIL APPEAL NO. 2548 OF 2010

CIVIL APPEAL NO. 2449 OF 2010

CIVIL APPEAL NO. 2456 OF 2010

JUDGEMENT

R.M. Lodha, J.

Open Parking or stilt parking space cannot be sold by the builder.

8

M/s.Noopur Developers

Original Defendant

Versus

Himanshu V Ganatra& others.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

CIVIL APPELLAE JURISDICTION

APPEAL FROM ORDER NO.1195 OF 2009 WITH CIVIL APPLICTION NO.1495 OF 2009

Builder cannot carry out construction without flat purchasers consent once co operative society is formed.

 

9

Environ Emanual Co-op. Hsg. Soc. Ltd.

       Complainant

VERSUS

 

The Environ Enterprises INC,

          Opponent

Thane Additional Consumer Grievances Redressal Forum,

Konkan Bhavan, Navi Mumbai.                                    Consumer Complaint No. 91/2008

Date of Complaint : 10.05.2008

Date of Decision : 19.09.2008

Order of Conveyance given in 128 days in favor of society.

 

 

10

Natalia C H S Ltd.

          Complainant

VERSUS

M/s NAVBHARAT DEVELOPMENT CORPORATION

Opponent

MUMBAI SUBURBAN DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, AT BANDRA

 

Consumer Complaint No. MSDF/388/2008.

Date of Filing :-15/July/2008

Date of decision :-01/July/2010

Order of Conveyance given in favor of society. Builder told to obtain the building completion certificate and also pay the increased stamp duty liability that would be applicable after a period of four months from the date of formation of the society. Penalty of Rs. 500/- per day imposed on the builder after __ days if he does not obtain the conveyance and the building completion certificate.

11

RATNA Rupal CHS Ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

NOTICE OF MOTION NO. 2327  OF 2000

INSUIT NO. 3323 OF 2000

Ratna Rupal Co­operative Housing Society Ltd.     )….. Plaintiffs

Vs.

Rupal Builders & Ors.

)….. Defendants

Mr. Anil C. Singh a/w. Mr. Anil D. Yadav i/b. Amit G. for the Plaintiffs)

Mr. Kevic Setalvad a/w. Mr. Diren Shah i/b. Vimla & Co., for Defendants)

CORAM : SMT. ROSHAN DALVI, J.    )

Date of Reserving for

Order 🙂

10thJune, 2011)

Date of Pronouncing the Order: )

27thJune, 2011)

Rights in tdr belongs to society.

 

Look at the authority TRAI. A telephone call hardly costs Re. 1/- but how efficiently check has been kept by the authority? A flat can cost more than crore of Rupees but the element of supervision and control in my view is totally lacking. When the builders started selling open terrace, stilt, car parking, garden areas, why did our housing department and urban department remain a silent spectator since 1963? Only after the judgment of Supreme Court in the case of NahalchandLaloochand vs PanchaliCo operative Housing Society Ltd. the practice of cheating has to a certain extent been curtailed. Why have the government authorities not black-listed some of the builders who have failed to comply with their statutory obligations? Government Officers in my view are also partners in crime when they overlook their obligations. We all know slums have come up on government lands. Why has hardly any action including suspension of government employees not been done for allowing slums to multiply? The ground reality in my opinion is government employees know that many premises in slums are in excess of the permitted height but would dare not antagonise the slum lords. Why cannot BMC officers have a continuous system of checking flats for misuse of niche, drying space areas? Same is the case with compliances as regards fire-fighting equipments and maintenance of the same.

Let me share with you observations of the supreme courtwhile delivering the judgment in the case of Friends Colony.Chief Justice Shri R. C. Lahoti and Justice, Shri Ashok Bhan of the Supreme Court has in the case of Friends Colony Development Committee – Appellants v/s The State of Orissa &Ors. – Respondents in Civil Appeal No. 12984 of 1999 decided on 11th November 2004 (AIR SC 2005) page 1, have held (with regards to illegal construction), regularization of deviations is permissible only in case of bonafide deviations. The application to regularize has to be dealt with by a multimember high-powered committee. The Supreme Court has held that heavy penalty is to be imposed on erring professional builders.While delivering the abovesaid judgment the Supreme Court has held that a fund to compensate the purchasers may be created.The Supreme Court has in the above said case has held that the cases of professional builders stand on a different footing from an individual constructing his own building. A professional builder is supposed to understand the laws better and deviations by such builder can safely be assumed to be deliberate and done with the intention of earning profits and hence the same is deserved to be dealt with sternly so as to act as a deterrent for future.

Now coming to our MOF Act the same in my view is in force. Sec. 11 stipulates Promoter to convey title etc. The implications of the same in my view is anything and everything connected with transfer of property has to be done by our builder friend. The role of a builder does not come to an end with collection of money and handing over possession of flat. He has to procure building completion certificate in Mumbai as per the provisions of section 353A of Mumbai Municipal Corporation Act. Building Completion Certificate application has to be submitted by the builder’s professionals which includes surveyor, engineer, structural engineer, supervisor or architect. Not even in 10% of the cases are building completion certificates issued, and this is due to non-compliance on the part of the builder. Even property card has to be transferred in the legal entity’s name.Strangely our government officer friends are masters at losing files in building proposal department. Not a few files but thousands of files are lost. As usual no action worth mentioning is being taken against the officials. I have been informed that our ex-Chief Minister had openly stated Standing Committee of the Bombay Municipal Corporation is an ‘understanding committee’ for the betterment of corporation. I am informed that there is drastic change in the life styles of Corporators after they acquire power. Persons staying in glass houses are reluctant to throw stones at one another. That reminds me to state that many buildings in Mumbai which have glass covering the four sides of the building i.e. glass cladded façade could be fsi scams as regards misuse of niche, drying space, flower bed areas, chajjas being used as office premises, residential premises. Of course after the new policy the same have stopped. In my view the said violations could be easily of more than 500 crores as of date.  No wonder people are tempted to call BMC as Bachelor’s and Masters of Corruption. I am informed that the BMC offices themselves have unauthorized constructions. If the BMC Commissioner wants proof of the same I can consider rendering my help for the same. My letter to the Municipal Authorities with instances is also on record.

Section 64C of the Mumbai Municipal Corporation Act is of immense use to tax payers and rti activists. The same should be used 24×7 by tax payers when violations are done by BMC officers. The same is reproduced hereunder.

64C. DISCIPLINARY ACTION

(1)          Every Municipal Officer and servant shall be bound to discharge his official duties and the official work assigned or pertaining to him most diligently and as expeditiously as feasible:

Provided that, normally no file shall remain pending with any Municipal Officer or servant in any Department or office under the Corporation for more than seven working days:

Provided further that, immediate and urgent files shall be disposed of by any Municipal Officer or servant as per the urgency of the matter, as expeditiously as possible, and preferably the immediate file in one day or the next day morning and the urgent file in four days:

Provided also that, in respect of the files not required to be referred to any other Department within the Corporation not required to be submitted to any Statutory Committee, the concerned Department of the Corporation shall take the decisions and necessary action in the matter within forty-five days and in respect of the files required to be referred to any other Department but not to any Statutory Committee, decision and necessary action shall be taken within three months.

(2)          Any willful or international delay or negligence in discharge of the official duties or in carrying out the official work assigned or pertaining to such Municipal Officer and servant shall amount in dereliction of official duties and shall make such Municipal Officer or servant liable for appropriate disciplinary action under the relevant disciplinary rules applicable to such employees.

(3)          The concerned competent authority, on noticing or on being brought to its notice any such dereliction of duties on the part of any Municipal Officer or servant, after satisfying itself about such dereliction on the part of such Municipal Officer or servant shall, take appropriate disciplinary action against such defaulting Municipal Officer or servant under the relevant disciplinary rules including taking entry relating to such dereliction of duty in the Annual Confidential Report of such Municipal Officer or servant.

However, all said and done the moot question is how many of us are aware of such laws and have the will to fight the high and the mighty?

The recent circular issued by Inspector General of Police Shri Pravin Dixit signed on 1-7-2016 directing police officers in Maharashtra to file FIR for MOF Act and MRTP Act violations was required to be issued in 1963 when MOF Act was introduced. Why it is that matter has to be referred to law and judiciary department after issuance of circular rather than taking approval in advance before issuing any circular? The builder-lobby with lightning speed seems to have met Chief Minister. After the initial instances of filing FIR in a few instances the momentum has come to a standstill. Is it a victory of ‘note-bank’ over vote bank? Well time will tell us the outcome as regards the life span of the said circular. In all probability the circular is referred to law and judiciary department. The moot question that arises is when projects costing thousands of crores per annum in aggregate are being taken up why has the government not taken steps worth mentioning to keep a check on the activities of builders. I personally feel that if RERA is implemented (which I doubt very much) in letter and spirit than 50% of the builders in a few years would shift to some other profession. Till date no formalities for registration of builders or estate agents have commenced in Maharashtra. As of date the only qualification to be a builder is a sweet tongue and a smiling face. Even a plumber or an electrician is issued license with certain compliances.

Let us see the mockery of justice. To begin with laws are drafted at times by incompetent officers. Courts do not frame laws. They only interpret laws. One high court judge personally told me if laws are drafted without ambiguity substantial time of the court would be saved and justice can be delivered speedily. Now coming to our real estate laws I have no hesitation in saying that. Not even 5% of the agreements in my opinion are drafted as per MOF Act. The statutory clauses are invariably missing. Note 1 of model agreement (commonly known as Form-V) stipulates that certain clauses are mandatory in nature and have got to be incorporated in each and every agreement being executed by builder. One of the clauses talks about the FSI potential. Builders do not mention about the same as they are very keen to use the future FSI and TDR benefits. Similarly Note 2 mentions that the chain of developers having right in the property from the name as appearing in property card should be incorporated as a confirming party. Builders are reluctant to comply with this statutory obligation as they fear that in the event of a dispute with the land owners than the owners earlier parties will not come for registration and may even terminate the power of attorney. My question to the bankers financing individual flat purchasers is when you have a legal department why are such statutory violations being overlooked? But then in my view it is an open secret and an unwritten rule that the big and mighty dominate the laws of the land. If builder does not do the construction on time banks don’t release the fund. However, interest for the same is recovered from the innocent flat purchasers. Is this fair? Similarly, when the law was enacted that the licencee would become the owners in the seventies by paying a few months’ rent many big corporate houses grabbed the flats of poor people who were nowhere at fault. Landlords as of date are in fact landless lord. In my opinion kind looks have been exploited by the government because of political compulsions. All said and done I am of the view that if the government authorities are serious they can improve the system if they have the will to improve. The need of the day is to do operation rather than giving pain killers.
 

 

 

 

 





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