Supreme Court of India
NAHALCHAND LALOOCHAND PVT. LTD.versusPANCHALI CO-OPERATIVE HOUSING SOCIETY LTD.
- Citation
- 2010 INSC 563
- Decided
- 31 August 2010
- Disposal
- Dismissed
- Bench
- RAJENDRA MAL LODHA
Holding
Stilt parking spaces are neither flats nor garages; they are part of the common areas, and the promoter cannot sell them, only charge a proportionate cost to flat purchasers.
Summary
The promoter, Nahalchand Laloochand Pvt. Ltd., developed a building and sold flats to members of Panchali Co‑operative Housing Society Ltd., asserting a right to sell 25 stilt parking spaces as separate units. The society contended that the promoter could not sell those spaces because they were not "flats" under the Maharashtra Ownership Flats Act (MOFA) and should be treated as common areas. The Supreme Court examined the statutory definition of "flat" in s.2(a‑1) of MOFA, the meaning of "garage", and the status of stilt parking spaces, concluding that a stand‑alone garage is not a flat and that stilt parking spaces are not garages but form part of the building's common areas. Consequently, the promoter has no right to sell the parking spaces; he may only charge a proportionate share of their cost to flat purchasers. The Court dismissed the appeal, upholding the lower courts' rulings.
Issues considered
- Whether a stand‑alone 'garage' qualifies as a 'flat' within the meaning of s.2(a‑1) of the Maharashtra Ownership Flats Act, 1963.
- Whether a stilt or open parking space in a building regulated by MOFA constitutes a 'garage'.
- If the stilt/open parking space is not a garage, whether it forms part of the 'common areas and facilities' under MOFA.
- What rights, if any, does the promoter have vis‑à‑vis the society concerning the stilt parking spaces.
Legislation cited
- Development Control Regulations for Greater Bombay, 1991
- Maharashtra Apartment Ownership Act, 1970
- Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963s. 10, s. 11, s. 16, s. 2(a-1), s. 2(c), s. 3, s. 4
- Maharashtra Ownership Flats (Regulations of the Promotion of Construction, Etc.) Rules, 1964
- Maharashtra Regional and Town Planning Act, 1966
- Transfer of Property Act, 1882
Subjects
Flat definitionStilt parkingCommon areasPromoter rightsStatutory interpretationReal estate lawMOFAGarage
Judgment
[2010] 10 S.C.R. 804
A NAHALCHAND LALOOCHAND PVT. LTD.
v.
PANCHAL! CO-OPERATIVE HOUSING SOCIETY LTD.
(Civil Appeal No. 2544 of 2010)
AUGUST 31, 2010
B
[R.M. LODHA AND A.K. PATNAIK, JJ.]
Maharashtra Ownership Flats (Regulation of the
Promotion of Construction, Sale, Management and Transfer)
C Act, 1963:
s. 2(a-1) - Stilt parking space - Rights of promoter viv-
a-vis housing society - Held: Stilt parking space is neither
covered by term 'flat' nor 'garage' but is a part of 'common
0 areas' - MOFA restricts the rights of promoter in the block or
building constructed for flats or to be constructed for flats to
which the Act applies - Promoter has no right to sell any
portion of such building which is not 'flat' within the meaning
of s. 2(a-1) nor has he the right to sell stilt parking space -
E He only has the right to sell unsold flats - Entire land and
building has to be conveyed to the organization -
Maharashtra Ownership Flats (Regulations of the Promotion
of Construction, Etc.) Rules, 1964 - Development Control
Regulations for Greater Bombay, 1991 - Maharashtra
Apartment Ownership Act, 1970- Maharashtra Regional and
F Town Planning Act, 1966 - Transfer of Property Act, 1882 -
Urban Development.
s. 2(a-1) - 'Flat' - Meaning of- Held: Flat is a separate
and self-contained set of premises that forms part of the
G building and is used or intended to be used for residence or
office, showroom or shop or godown or for carrying on industry
or business - Stand alone garage or garage as an
independent unit by itself is not a 'flat' within the meaning of
s. 2(a-1) - Interpretation of Statutes.
H 804
NAHALCHAND LALOOCHAND PVT. l TD. v. PANCHAL! CO- 805
• OPERATIVE HOUSING SOCIETY LTD.
s. 2 (a-1) - Stilt parking space/open parking space of A
building - Held: Stilt parking space/open parking space of a
building regulated by MOFA, is a part of 'common areas'- It
may be usable as a parking space but does not tantamount
to a 'garage' within the meaning of s. 2(a-1) rlw condition No.
2 Form V of 1964 Rules, thus not saleable independently as B
a flat or along with a flat - Maharashtra Ownership Flats
(Regulations of the Promotion of Construction, Etc.) Rules,
1964.
Purpose of Maharashtra Ownership Flats (Regulation of C
the Promotion of Construction, Sale, Management and
Transfer) Act, 1963 - Explained.
Words and Phrases:
'Flat' - Connotation of, in the context of premises. D
'Garage' - Conntation of.
The appellant, a promoter, developed few properties
and entered into agreements for sale of flats with the flat
purchasers, namely, the members of the respondent co- E
operative housing society. The appellant filed a suit for
permanent injunction restraining the respondent society
from encroaching upon, trespassing and/or in any
manner disturbing, obstructing, interfering with its
possession in respect of 25 parking spaces in the stilt F
portion of the building. The appellant submitted that each
flat purchaser would have a right in respect of the flat
sold to him and to no other portion; and that each flat
purchaser had executed a declaration/undertaking in its
favour to the effect that stilt parking spaces/open parking G
spaces shown in the plan exclusively belonged to the
promoter and that the declarant would have no objection
to the sale of such spaces by it. The respondent
contended that the promoter had n_o right to sell or
H
806 SUPREME COURT REPORTS [2010] 10 S.C.R.
A dispose of spaces in the stilt portion and that the
undertakings given by the flat purchasers were not
binding being contrary to law and based on such
undertakings, the promoter did not acquire any right to
sell stilt parking spaces. The trial court dismissed the suit
B filed by the promoter. The High Court dismissed the
appeal. Therefore, the promoter filed the instant appeal.
Dismissing the appeal, the Court
HELD: 1.1 The term 'flat' apart from the statutory
C definition, though has no uniform meaning but in its
natural and ordinary meaning, 'flat' is a self-contained set
of premises structurally divided and separately owned
for dwelling. [Para 23) [829-G]
D 1.2 The definition of the term 'flat' u/s. 2(a-1) of the
Maharashtra Ownership Flats (Regulation of the
Promotion of Construction, Sale, Management and
Transfer) Act, 1963 (MOFA) means that the set of premises
has to be a separate and self-contained that forms part
of the building which is used or intended to be used for
E
residence or office, showroom or shop or godown or for
carrying on industry or business. Separateness of one
premises from another premises physically and also in
use or intended use for one of the uses specified in the
definition clause containing the necessary facilities for
F self-contained accommodation is sine qua non for a unit
being covered by the definition of 'flat' occurring in
Section 2(a-1) which includes an 'apartment'. It must be
a separate unit conforming to the description capable of
being used for one of these purposes-namely, residence,
G office, showroom, shop, godown or for industrial or
business purposes. Alternative uses in Section 2(a-1) do
expand the ordinary meaning of the term 'flat' but
nevertheless such premises that form part of building
H
NAHALCHAND LALOOCHAND PVT. LTD. v. PANCHAL! CO- 807
OPERATIVE HOUSING SOCIETY LTD.
must be separate and self-contained. A set of premises A
is called self-contained if it has the following basic
amenities available: (a) sanitary; (b) washing, bathing and
(c) other conveniences (cooking etc.) for the use of its
occupant/s although as provided in the exp.lanation
appended to section 2(a-1) such provision may be B
common to two or more sets of premises. The nature of
construction and user are important features of the
definition clause. [Para 28] [830-G-H; 831-A-D]
1.3 A unit or accommodation to fit in the definition of
'flat' must meet twin-test namely: (i) self-contained test C
and (ii) user test. The other predominant characteristic is
that it must form part of a building. [Para 28] [831-D]
1.4 On technical linguistic basis, the bracketed
phrase '(and includes a garage)' can only attach to the D
word preceding it. That may not be happy construction
nor such construction by reading bracketed portion with
the preceding word 'business' appropriately reflects the
meaning of the phrase. The scope of the bracketed
phrase has to be seen in the context of the definition E
given to the word 'flat' which is true indication of intent
of the legislature. The suggestion that the phrase 'and
· includes a garage' must be read with the 'set of premises'
and not with the user, does not appear to be a correct
reading of the expression and cannot be accepted. The F
statutory definition of 'flat' must be construed keeping in
view the intent of the legislature and the context of the
statute and, seen thus, the phrase, 'and includes a
garage' in the bracket does not bring in 'garage' by itself
within the meaning of word 'flat'. If stand alone 'garage' G
(or a garage by itself) were intended by the legislature to
be a 'flat' within the meaning of Section 2(a-1), that could
have been conveniently conveyed by use of the
expression 'or garage' after the word 'business' in the
H
808 SUPREME COURT REPORTS [2010] 10 S.C.R.
A same breath as preceding uses. The bracketed phrase is
rather indicative of the legislative intention to include a
'garage' as appurtenant or attachment to a flat which
satisfies the ingredients of Section 2(a-1 ). It is clear that
stand alone 'garage' or in other words 'garage' as an
B independent unit by itself is not a 'flat' within the meaning
of Section 2(a-1 ). [Para 29) [831-G-H; 832-A-D]
Municipal Corporation of Greater Bombay and Ors. v. ·
Indian. Oil Corporation Ltd. 1991 Suppl. (2) SCC 18 -
referred to.
c
Dr. K.R. Agarwal vs. Balkrishna AIR 1972 Bombay 343
- disapproved.
Murgatroyd v. Tresarden 63 T.L.R. 62; Barnett & Block
0 v. National Parcels Insurance Company Ltd. (1942) 1 All E.R.
221 - referred to.
'Principles of Statutory Interpretation' by Justice G.P.
Singh 12th edition, 2010; 'Construction of Statutes' by Earl T.
Crawford 1989 reprint p 362; Concise Oxford English
E Dictionary 10th edition, revised; Webster Comprehensive
Dictionary, International edition Vol. 1; Stroud's Judicial
Dictionary 5th edition, Vol. 2; Words and Phrases, Permanent
Edition, West Publishing Company, Vol. 17; Advanced Law
Lexicon by P. Ramanatha Aiyar 3rd edition, 2005; Maxwell
F Interpretation of Statutes 12th Edition, pp. 69 to 70 - referred
to.
2.1 The Development Control Regulations for Greater
Bombay, 1991 define two expressions 'garage-private'
G and 'garage-public' in Regulations 2(47) and 2(48)
respectively. The 'garage-private' means a building or a
portion thereof designed and used for the parking of
vehicles an'd 'garage-public' means a building or portion
thereof designed other than as a private garage,
H
NAHALCHAND LALOOCHAND PVT LTD. v. PANCHAL! CO- 809
OPERATIVE HOUSING SOCIETY LTD.
operated for gain, designed and/or used for repairing, A
serving, hiring, selling or storing or parking motor-driven
or other vehicles. The word 'garage' occurring in Section
2(a-1) must be given a meaning that general public or for
that matter a flat purchaser of ordinary prudence would
give to that word or understand by that word. [Para 33] B
Barnett & Block v. National Parcels Insurance Company
Ltd. (1942) 1 All E.R. 221 - referred to.
Concise Oxford English Dictionary 10th edition, revised;
Webster Comprehensive Dictionary, International edition Vol. C
1; Words and Phrases, Permanent Edition, West Publishing
Company, Vol. 17 - referred to.
2.2 It cannot be said that open parking space is
tantamount to a 'garage' within the meaning of Section D
2(a-1) read with condition No. 2 Form V of 1964 Rules. A
person buying a flat for residence or one of the uses
mentioned in Section 2(a-1) will not really think that open
to the sky or open space for parking motor vehicles is a
garage. The word 'garage' may not have uniform E
connotation but definitely every space for parking motor
vehicles is not a garage. A roofless erection could not be
described a garage. What is contemplated by a 'garage'
in Section 2(a-1) is a place having a roof and walls on
three sides. It does not include an unenclosed or
F
uncovered parking space. In condition No. 2, Form V the
words 'covered/open garage' have been used but the
word 'open' used in the Model Form V cannot override
the true meaning of term 'garage' in Section 2(a-1 ). As a
matter of fact, none of the provisions of MOFA regards
'open garage' connoting 'flat' or an appurtenant/ G
attachment to a flat. Undue importance should not be
given to word 'open' which has loosely been used in
condition No. 2, Form V. The true meaning of the term
'garage' in Section 2(a-1 ), is not affected by a Model Form
V appended to the 1964 Rules. [Para 35] H
810 SUPREME COURT REPORTS [2010] 10 S.C.R.
A 2.3 A stilt area is a space above the ground and
below the first floor having columns that support the first
floor and the building. It may be usable as a parking space
but for the purposes of MOFA, such portion could not be
treated as garage. Even as per the test accepted in
B *Barnett & Block case, a place having roof but offering no
shelter or protection on two sides cannot be a garage.
For the purposes of MOFA, and particularly Section 2(a-
1), the term 'garage' must be considered as would be
understood by a flat purchaser and such person would
c contemplate garage which ha::; a roof and wall on three
sides. [Para 36]
*Barnett & Block v. National Parcels Insurance Company
Ltd. (1942) 1 All E.R. 221 - referred to.
D 3.1 MOFA does not define nor it explains 'common
areas and facilities' though the said phrase is used at
various places in that Act. It is true that interpretation
clause or legislative definition in a particular statute is
meant for the purposes of that statute only and such
E legislative definition should not control other statutes but
the parts of the property stated in clauses (2), (3) and (6)
of Section 3(f) as part of 'common areas and facilities' for
the purposes of MAOA are what is generally understood
by the expression 'common areas and facilities'. This is
F fortified by the fact that the areas which could be termed
as 'common areas' in a building regulated by MOFA are
substantially included in the clauses of Section 3(f) of
MAOA. Looking to the scheme and object of MOFA, and
there being no indication to the contrary, there is no
G justifiable reason to exclude parking areas (open to the
sky or stilted portion) from the purview of 'common areas
and facilities' under MOFA. [Para 37]
3.2 It cannot be said that under MOFA it is for the
NAHALCHAND LALOOCHAND Pvr LTD. v. PANCHAL! CO- 811
OPERATIVE HOUSING SOCIETY LTD.
promoter to prescribe and define at the outset the A
'common areas' and unless it is so done by the promoter,
the parking area cannot be termed as part of 'common
areas'. A promoter cannot takeout common passage/
lobbies or stair case or RG area out of purview of
·common areas and facilities' by not prescribing or B
defining the same in the ·common areas'. It is not
necessary that all flat purchasers must actually use
'common areas and facilities' in its entirety. The relevant
test is whether such part of the building is normally in
common use. Open to the sky parking area or stilted c
portion usable as parking space is not 'garage' within the
meaning of Section 2(a-1) and, therefore, not saleable
independently as a flat or along with a flat. As a matter of
fact, the promoter is not put to any prejudice financially
by treating open parking space/stilt parking space as part D
of 'common areas' since he is entitled to charge price for
the common areas and facilities from each flat purchaser
in proportion to the carpet area of the flat. [Para 38)
3.3 MOFA mandates the promoter to describe
'common areas and facilities' in the advertisement as well E
as the 'agreement' with the flat purchaser, and the
promoter is. also required to indicate the price of the flat
including the proportionate price of the 'common areas
and facilities'. If a promoter does not fully disclose the
common areas and facilities, he does so at his own peril. F
Stilt parking spaces would not cease to be part of
common areas and facilities merely because the
promoter has not described the same as such in the
advertisement and agreement with the flat purchaser.
Even if the two aspects, namely, that the area of stilt G
parking space is not included in the FSI and such area
is not assessable to the Corporation taxes, are excluded;
nevertheless, stilt parking space/open parking space of
a building regulated by MOFA is nothing but a part of
'common areas'. [Para 38) H
812 SUPREME COURT REPORTS [2010] 10 S.C.R.
A 4. Since 'Stilt parking space' is not covered by the
term 'garage' much less a 'flat', but is a part of 'common
areas' of the building developed by the promoter, the only
right that the promoter has, is to charge the cost thereof
in proportion to the carpet area of the flat from each flat
B purchaser. Such stilt parking space being neither 'flat' u/
s. 2(a-1) nor 'garage' within the meaning of that provision
is not saleable at all. [Para 39)
5.1 MOFA was enacted by the Maharashtra
Legislature as it was found that builders/developers/
C promoters were indulging in malpractices in the sale and
transfer of flats and the flat purchasers were being
exploited. The effect of MOFA may be summarized. First,
every promoter who constructs or intends to construct
block or building of flats in the area to which MOFA
D applies has to strictly adhere to the provisions contained
therein, i.e., inter alia, he has to make full and true
disclosure of the nature· of his title to the land on which
the flats are constructed and also make disclosure in
respect of the extent of the carpet area of the flat and the
E nature, extent and description of the common areas and
facilities when the flats are advertised for sale. Secondly,
the particulars which are set out in Section 4(1A) (a) (i) to
(x) have to be incorporated in the agreement with the flat
purchaser. Thirdly, the promoter has to apply to the
F Registrar for registration of the organization (co-operative
society or company or condominium) as soon as
minimum number of persons required to form such
organization have taken flats. As regards unsold flats, the
promoter has to join such organization although his right
G to dispose of unsold flats remains unaffected. Fourthly,
and more importantly, the promoter has to take all
necessary steps to complete his title and convey to the
organization his right, title and interest in the land and
building and execute all relevant documents accordingly.
H [Para 40]
NAHALCHAND LALOOCHAND PVT LTD. v. PANCHAL! CO- 813
OPERATIVE HOUSING SOCIETY LTD.
5.2 The submission that there is no provision either A
express or by necessary implication in MOFA restricting
the sale of stilt or open parking spaces and the promoter
continues to have contractual, legal and fundamenta1
right to dispose of the stilt/open parking space in the
manner in which he proposes and his consumers accept, B
if accepted, the mischief with which MOFA is obviously
intended to deal with would remain unabated and flat
purchasers would continue to be exploited indirectly by
the promoters. MOFA does restrict the rights of the
promoter in the block or building constructed for flats or c
to be constructed for flats to which that Act applies. The
promoter has no right to sell any portion of such building
which is not 'flat' within the meaning of Section 2(a-1) and
the entire land and building has to be conveyed to the
organization. The only right remains with the promoter is 0
to sell unsold flats. It is, thus, clear that the promoter has
no right to sell 'stilt parking spaces' as t.hese are neither
'flat' nor appurtenant or attachment to a 'flat'. Thus, the
finding of the High Court that undertakings are neither
binding on the flat purchasers nor the society also E
warrants no interference. [Paras 40 and 41]
/CIC/ Bank Ltd. v. S/DCO Leathers Ltd. and Ors. (2006)
10 SCC 452; Kamataka State Financial Corporation v. N.
Narasimahaiah and Ors. (2008) 5 SCC 176; Bhikhubhai
Vith/abhai Patel and Ors. v. State of Gujarat and Anr. (2008) F
4 sec 144 - referred to.
Case Law Reference:
(1942) 1 All E.R. 221 Referred to. Para 10, 33,
36 G
1991 Suppl. (2) sec 18 Referred to. Para 10
63 TLR 62 Referred to. Para 25
AIR 1972 Bombay 343 Disapproved. Para 29 H
814 SUPREME COURT REPORTS [2010] 10 S.C.R.
A (2006) 1o sec 452 Referred to. Para 40
(2008) s sec 116 Referred to. Para 40
(2008) 4 sec 144 Referred to. Para 40
B CIVIL APPELLATE JURISDICTION : Civil Appeal No.
2544 of 2010.
From the Judgment & Order dated 25.04.2008 of the High
Court of Judicature at Bombay in First Appeal No. 2182 of
2007.
c
WITH
C.A. Nos. 2449, 2456, 2545, 2546, 2547, 2548 of 2010.
Pravin K. Samdani, Neeraj Kumar Jain, Tanway Mehta,
D Kush Chaturvedi (for Vikas Mehta), Mahesh Agarwal, E.C.
Agarwala, Rahul Dwarkadas, Gaurav Goel, Neha Aggarwal,
Deepti, Pragya, Gaurav Aggarwal (for Manik Karanjawala),
Umesh Shetty, Nitin Bhardwaj, Pratham Kant, J.N. Solanki,
Umang Shankar, Buddy A. Raganadhan, A.V. Rangam,
E Praveen Chaturvedi, Aparna Jha for the appearing parties.
The Judgment of the Court was delivered by
R.M. LODHA, J. 1. Of these seven appeals which arise
from the judgment dated April 25, 2008 passed by the High
F Court of Judicature at Bombay (Appellate Jurisdiction), five are
at the instance of the original plaintiff and the other two are by
the parties, who were not parties to the proceedings before the
High Court or the trial court but they are aggrieved by the
findings recorded by the High Court as they claim that these
G findings are affecting their rights.
The facts:
2. Few important questions of law arise in this group of
H appeals. It will be convenient to formulate the questions after
NAHALCHAND LALOOCHAND PVT. LTD. v. PANCHAL! CO- 815
OPERATIVE HOUSING SOCIETY LTD. [R.M. LODHA, J.]
we set out the material facts and the contentions of the parties. A
The narration of brief facts from S.C. Suit No. 1767 of 2004
wil! suffice for consideration of these appeals. Nahalchand
Laloochand Private Limited is a Private Limited Company. As
a promoter, it developd few properties in Anand Nagar, Dahisar
(East), Mumbai and entered into agreements for sale of flats B
with flat purchasers. The flat purchasers are members of
Panchali Co-operative Housing Society Ltd. (for short, 'the
Society'). The promoter filed a suit before the Bombay City Civil
Court, Bombay for permanent injunction restraining the Society
(defendant) from encroaching upon, trespassing and/or in any c
manner disturbing, obstructing, interfering with its possession
in respect of 25 parking spaces in the stilt portion of the
building. The promoter set up the case in the plaint that under
the agreements for sale it has sold flats in its building and each
flat purchaser has right in respect of the flat sold to him and to D
no other portion. It was averred in the plaint that each flat
purchaser has executed a declaration/undertaking in its favour
to the effect that stilt parking spaces/open parking spaces
shown in the plari exclusively belong to the promoter and that
the declarant has no objection to the sale of such spaces by it.
E-
The defendant (Society) traversed the claim and set up the plea
that the promoter has no right to sell or dispose of spaces in
the stilt portion and that the undertakings given by the flat
purchasers are not binding being contrary to law and based on
such undertakings, the promoter has not acquired any right to
sell stilt parking spaces. F
3. The parties let in evidence (oral as well as documentary)
in support of their respective case.
4. On April 4, 2007, the Presiding Judge, City Civil Court,
G
Greater Bombay dismissed the suit with costs.
5. The promoter preferred first appeal before the High
Court which was dismissed on April 25, 2008.
6. For brevity, we shall describe Maharashtra Ownership H
816 SUPREME COURT REPORTS [2010] 10 S.C.R.
A Flats (Regulation of the Promotion of Construction, Sale,
Management and Transfer) Act, 1963 as 'MOFA', Maharashtra
Ownership Flats (Regulations of the Promotion of Construction,
Etc.) Rules, 1964 as '1964 Rules', Development Control
Regulations for Greater Bombay, 1991 as 'OCR', Maharashtra
B Apartment Ownership Act, 1970 as 'MAOA', The Maharashtra
Regional and Town Planning Act, 1966 as 'MRTP Act' and
Transfer of Property Act as 'T.P. Act'.
The summary of findings recording by the High Court:
C 7. While dismissing the appeal, the High Court recorded
the following findings :
1 The carpet area of any of the 56 flats/
tenements in Panchali building is not less
D than 35 sq. mtrs.
2 The parking space either enclosed or
· unenclosed, covered or open cannot be a
'building'.
E 3 It is compulsory requirement to provide for
parking spaces under OCR.
4 It is obligatory on the part of the promoter to
follow the OCR. The agreement signed under
MOFA between the developer and the flat
F
purchaser must be in conformity with the
model form of agreement (Form V)
prescribed by the State Government.
5 The model agreement does not contemplate
G the flat purchasers to separately purchase the
stilt parking spaces.
6 The rights arising from the agreement signed
under the MOFA between the promoter and
the flat purchasers cannot be diluted by any
H
NAHALCHAND LALOOCHAND PVT. LTD. v. PANCHALI CO- 817
OPERATIVE HOUSING SOCIETY LTD. [R.M. LODHA, J.]
contract or an undertaking to the contrary. The A
undertakings contrary to OCR will not be
binding either on the flat purchasers or the
Society.
7 The stilt parking space is a common parking B
area available and the developer is obliged
to provide the same under the OCR when the
carpet area of the flat is 350 sq. meters It is
not an additional premises/area that he is
authorized to sell either to flat purchaser or
any outsider. It is part and parcel of the
c
Society building and it cannot be a separate ·
premises available for sale. As soon as the
Corporation issues the occupation certificate
and the Society is registered, the building as
well as the stilt parking spaces, open spates 0
and all common amenities become the
property of the Society.
8 The stilt parking spaces cannot be put on
sale by the developer as he ceases to have E
any title on the same as soon as the
occupation C' ·tificate is issued by the
Corporation and it becomes the property of
the society on its registration.
F
9 The stilt parking spaces cannot be termed as
'open/covered garages' and Clause 2 of the
Model Agreement-Form V provides for
sale of covered/open garage in addition to
the flat/shop.
G
10 It is immaterial if the purchase agreement
does not include stilt car parking spaces in
the common area of amenities. The stilt car
parking spaces is part of the common
amenities and it cannot be treated to be a H
818 SUPREME COURT REPORTS [2010] 10 S.C.R.
A separate premises/garage which could be
sold by the developer to any of the members
of the society or an outsider.
11 Under MOFA, the developer's right is
B restricted to the extent of disposal of flats,
shops and/or garages, which means that any
premises which is included in the Flat Space
Index (FSI) can be sold by the developer/
promoter. The stilt parking space is not
included in the FSI nor it is assessable for
c the Corporation taxes.
The submissions:
8. Mr. Tanmaya Mehta, learned counsel appearing for the
D promoter-Nahalchand Lal.oochand Private Limited (appellant)
contended that: the stilt parking space being 'garage', as an
independent unit is covered by the definition of 'flat' in Section
2(a-1) of MOFA; Section 2(a-1) creates an artificial definition
of 'flat' and since in common parlance a garage would not be
E considered as a flat, the legislature clarified and explained that
the term 'flat' means ...... and 'includes a garage'; as long as
premises are covered from the roof or which have a covered
roof and used for the parking of vehicles, that would qualify as
'garage' and since stilt parking spaces are covered parking
spaces and form part of the building, they fall within the
F definition of a 'garage'; even if stilt parking spaces do not fall
within the definition of 'flat', they are nevertheless sellable as
independent units since right to sell such spaces flows from the
bundle of rights associated with ownership of the property and
Sections 10 and 11 of MOFA read with Rule 9 of 1964 Rules
G are not exhaustive of the rights retained by the promoter upon
execution of conveyance. Moreover, if stilt parking spaces are
treated a..; 'common areas' then the proportionate price for the
same would have to be paid by each flat purchaser, irrespective
of whether he requires the parking space or not and there may
H be situations where the number of parking spaces will not be
NAHALCHAND LALOOCHAND PVT LTD. v. PANCHAL! CO- 819
OPERATIVE HOUSING SOCIETY LTD. [R.M. LODHA, J.]
equal to the number of flats and, thus, a person who has paid A
proportionate price for the common parking space may find
himself without parking space, even though he has paid for the
same. Lastly, the learned counsel submitted that in any event
the promoter undertakes that the parking spaces shall be sold
only to persons purchasing flats within tqe subject layout, i.e. B
the purchasers of flats in the seven buildings which form part
of the layout and exist in close proximity.
9. Mr. Pravin K. Samdani, learned senior counsel for one
of the appellants viz., Maharashtra Chamber of Housing Industry C
adopted a little different line of argument. He contended that
the provisions of MOFA permit a promoter to sell garage/open/
covered car parking space along with the flat. His submission
is that MOFA does not define the word 'garage' and that word
has to be understood and interpreted in accordance with the
plain grammatical meaning and not with reference to OCR D
which have been framed under MRTP Act having different
legislative object. As to whether the stilt parking spaces are
'common areas', Mr. Pravin K. Samdani would submit that
MOFA does not list out the 'common areas' and 'limited
common areas' while MAOA does define these terms and E
parking spaces thereunder are 'common areas and facilities'
unless otherwise provided in thr '.leclaration by the owner of
the property. Under MOFA, it is for the promoter and under
MAOA, the declarant has to prescribe at the outset the
'common areas' and 'limited common areas'. He referred to F
Sections 3(2)(h), 4(1 )(a)(v), 10 and 11 of the MOFA and
submitted that the promoter must at the outset indicate the
nature of organization (condominium or society or company)
that would be formed at the time of sale of flats and on formation
of such organization, the promoter joins such organization with G
a right and power to dispose of remaining flats that would
include the remaining unsold open/covered parking space/
garage and the organization is transferred unsold open/
covered parking spaces only if all the flats have been sold by
the promoter. Learned senior counsel would submit that it is H
820 SUPREME COURT REPORTS (2010] 10 S.C.R.
A wholly irrelevant whether stilt/podium/basement/covered car
park attracts FSI or not but the only relevant criterion is whether
the promoter has listed it as a part of common area or not and
if he has not done so then it is sellable. If he has listed it, then
every flat purchaser is proportionately required to contribute for
B the same.
10. In the appeal filed by one Chirag M. Vora, Mr. Sunil
Gupta, learned senior counsel appeared. He argued that MOFA
was enacted and enforced in the year 1963 as a regulatory
piece of legislation and barring the few aspects in respect of
C which MOFA makes specific inroads into the rights of the
promqter in the matter qf construction, sale, management and
transfer of flats, all other aspects of the right of the promoter
who enters into contract with the flat purchaser remain
unaffected and undisturb(;ld. His submission is that MOFA gives
D a wide meaning to the word 'flat' so that buildings of all
permutations and combinations may be covered within the
scope of that Act and keeping in mind both the plain language
of Section 2(a-1) as well as the object of that Act, widest
meaning to the word 'flat' deserves to be given so that the plain
E language is satisfied and also the object of the Act is better
subserved. He adopted the line of interpretation put forth by Mr.
Tanmaya Mehta that 'garage' includes covered parking spaces
and even open parking spaces and is a 'flat' in itself under
Section 2(a-1). Relying upon Barnett & Block v. National
F Parcels Insurance Company Ltd. 1 , learned senior counsel
submitted that the minimum requirement of garage is that there
should be roof (even if there are no walls) and for the purpose
of MOFA, not only a covered parking space like a stilt parking
space but also an open parking space is tantamount to
G 'garage'. According to learned senior counsel the word
'garage' is not to be. read simply as another kind of user as
contra.>ted with residence, office, showroom or shop or godown
or industry or business rather it has to be read in contrast and
juxtaposed against the expression 'set of premises'; it is the
H 1. [1942) 1 All E.R. 221.
NAHALCHAND LALOOCHAND PVf. LTD. v. PANCHAL! CO- 821
OPERATIVE HOUSING SOCIETY LTD. [R.M. LODHA, J.]
alternative to the 'set of premises' and not merely to the different A
users of the set of premises mentioned in Section 2 (a-1).
Mr. Sunil Gupta, learned senior counsel would submit that each
stilt parking space as well as each open parking space is a
'flat' in itself de hors the other accommodations amounting to
'flat' under Section 2(a-1) of MOFA. In support of his argument, B
he relied upon a decision of this Court in the case of Municipal
Corporation of Greater Bombay & Ors. v. Indian Oil
Corporation Ltd. 2. In the alternative, he submitted that if the stilt
parking space or open parking space is not held to be a 'flat'
under Section 2 (a-1), still that space/area cannot be treated c
as part of 'common areas and facilities'. Firstly, he submitted
that common areas and facilities do not include garage/parking
spaces and such parking spaces remain ungoverned by MOFA.
Sections 3 and 4 of MOFA concern with matters pertaining to
'common areas and facilities' but MOFA does not define the D
meaning of 'common areas and facilities'. Section 3(2)(m)(iii)
leaves it to the promoter to disclose to his flat purchaser the
nature, extent and description of the common areas and
facilities. Section 4, by mentioning a prescribed form of
agreement, rather opened the possibilities for the promoter to
continue to exercise his traditional and pre-Act right to dispose
E
of such parking spaces according to his choice. The stilt/
covered/open parking spaces do not figure as part of the
common areas and facilities in any project and remain within
the contractual, legal and fundamental rights of the promoter to
dispose of the same in the manner in which he proposes and F
. his customers accept. Section 16 of MOFA does not override
this right of a promoter. Secondly, learned senior counsel would
submit that the provisions of MOFA must not be made to
depend on the provisions of some other enactment just because
the subject matter of the two legislations appears to be the G
same. In this regard, he referred to Maxwell Interpretation of
Statutes, 12th Edition, pages 69 to 70 and G.P. Singh on
Principles of Statutory Interpretations, 8th edition, pages 150
2. (1991] Suppl. (2) sec 18. H
822 SUPREME COURT REPORTS [2010] 10 S.C.R.
A to 160. He, thus, submitted that for the purposes of
understanding the meaning of 'flat' under Section 2(a-1) of
MOFA, the provisions of MAOA may be looked at but there
would be no justification in understanding the expression, 'flat'
defined in MOFA with reference to MRTP Act, OCR, rules
s related to FSI and the provisions concerning property tax in the
Bombay Municipal Corporation Act.
11. On the other hand, Mr. Neeraj Kumar Jain, learned
senior counsel and Mr. Umesh Shetty, learned counsel for the
C Societies stoutly supported the view of the High Court.
The issues:
12. In view of the contentions outlined above, the questions
that arise for consideration are : (i) whether stand alone 'garage'
0 or in other words 'garage' as an independent unit by itself is a
'flat' within the meaning of Section 2(a-1) of MOFA; (ii) whether
stilt parking space/open parking space of a building regulated
by MOFA is a 'garage'; (iii) If the answer to aforesaid questions
is in the negative, whether stilt parking space/open parking
E space in such building is part of 'common areas and facilities'
and (iv) what are the rights of the promoter vis-a-vis society (of
flat purchasers) in respect of open parking space/s I stilt parking
space/s.
13. All these questions have to be considered in the light
F of statutory provisions. At this stage we notice some of the
provisions of MOFA. As regards other statutory provisions, we
shall refer to them wherever necessary.
Relevant provisions of MOFA:
G 14. The definition of 'flat' in Section 2(a-1) is most vital and
during course of arguments it has been rightly said that meaning
of the word 'flat' is the actual fulcrum of MOFA. Section 2(a-1)
reads thus:
H "S.2(a-1).- "Flat" means a separate and self-contained set
NAHALCHAND LALOOCHAND PVf. LTD. v. PANCHAL! CO- 823
OPERATIVE HOUSING SOCIETY LTD. [R.M. LODHA, J.]
of premises used or intended to be used for residence, A
or office, show-room or shop or godown or for carrying on
any in-dustry or business (and includes a garage}, the
premises forming part of a building and includes an
apartment.
8
Exp/anation.-Notwithstanding that provision is made for
sanitary, washing, bathing or other conveniences as
common to two or more sets of premises, the premises
shall be deemed to be separate and self-contained."
15. 'Promoter' is defined in Section 2(c) as under : c
"S.2(c).- 'Promoter' means a person and includes a
partnership firm or a body or association of persons,
whether registered or not who constructs or causes to be
constructed a block or building of flats, or apartments for 0
the purpose of selling some or all of them to other persons,
or to a company, co-operative society or other association
of persons, and includes his assi9nees; and where the
person who builds and the person who sells are different
persons, the term includes both;"
E
16. The general liabilities of the promoter are set out in
Section 3. To the extent it is relevant to the present case it
reads thus:
"S.3.- (1) Notwithstanding anything in any other law, a F
promoter who intends to construct or constructs a block or
building of flats, all or some of which are to be taken or
are taken on ownership basis, shall in all transactions with
persons intending to take or taking one or more of such
flats, be liable to give or produce, or cause to be given or G
produced, the information and the documents hereinafter
in this section mentioned.
(2) A promoter, who constructs or intends to construct
such block or building of flats, shall-
H
824 SUPREME COURT REPORTS [2010] 10 S.C.R.
A (a) make full and true disclosure of the nature of his
title to the land on which the flats are constructed, or are
to be constructed; such title to the land as aforesaid having
been duly certified by an Attorney-at-law, or by an
Advocate of not less than three years standing, and having
B been duly entered in the Property card or extract of Village
Forms VI or VII and XII or any other relevant revenue record;
(b) make full and true disclosure of all encumbrances
on such land, including any right, title, interest or claim of
any party in or over such land;
c
(c) to (h)
(i) not allow persons to enter into possession until a
completion certificate where such certificate is required to
0 be given under any law, is duly given by the local authority
(and no person shall take possession of a flat until such
completion certificate has been duly given by the .local
authority);
(j) to (I)
E
(m) when the flats are advertised for sale, disclose
inter alia in the advertisement the following particulars,
namely:-
(i) the extent of the carpet area of the flat including
F
the area of the balconies which should be shown
separately;
(ii) the price of the flat including the proportionate
price of the common areas and facilities which
G should be shown separately, to be paid by the
purchaser of flat; and the intervals at which the
instalments thereof may be paid;
(iii) the nature, extent and description of the
common areas and facilities;
H
NAHALCHAND LALOOCHAND PVT. LTD. v. PANCHAL! CO- 825
OPERATIVE HOUSING SOCIETY LTD. [R.M. LODHA, J.]
(iv) the nature, extent and description of limited A
common areas and facilities, if any.
(n) sell flat on the basis of the carpet area only:
Provided that, the promoter may separately
charge for the common areas and facilities in 8
proportion 'to the carpet area of the flat'.
Explanation.-For the purposes of this clause, the
carpet area of the flat shall include the area of the
balcony of such flat." c
17. Section 4 of MOFA mandates that promoter before
accepting advance payment or deposit shall enter into an
agreement with the prospective flat purchaser and such
agreement shall be registered. It provides as follows:
D
"S.4.- (1) Notwithstanding anything contained in any other
law, a promoter who intends to construct or constructs a
block or building of flats all or some of which are to be
taken or are taken on ownership basis, shall, before, he
accepts any sum of money as advance payment or E
deposit, which shall not be more than 20 per cent of the
sale price enter into a written agreement for sale with each
of such persons who are to take or have taken such flats,
and the agreement shall be registered under the
Registration Act, 1908" and such agreement shall be in the F
prescribed form.
(1A) The agreement to be prescribed under sub-section
(1) shall contain inter alia the particulars as specified in
clause (a); and to such agreement there shall be attached G
the copies of the documents specified in clause (b)-
(a) particulars-
(i) if the building is to be constructed, the liability
of the promoter to construct it according to the plans H
826 SUPREME COURT REPORTS (2010] 10 S.C.R.
A and specifications approved by the local authority
where such approval is required under any law for
the time being in force;
(ii) to (v) .....
B (vi) the nature, extent and description of limited
common areas and facilities;
(vii) the nature, extent and description of limited
common areas and facilities, if any;
c (viii) percentage of undivided interest in the
common areas and facilities appertaining to the flat
agreed to be sold;
(ix) statement of the use for which the flat is
D intended and restriction on its use, if any;
(x) percentage of undivided interests in the limited
common areas and facilities, if any, appertaining to
the flat agreed to be sold;
E (b) ..... "
18. Section 10 casts duty upon the promoter to take steps
for formation of co-operative society or company, as the case
may be. The said provision reads as follows :
F
"S.10.- (1) As soon as a minimum number of persons
required to form a Co-operative society or a company
have taken flats, the promoter shall within the prescribed
period submit an application to the Registrar for
registration of the organization of persons who take the
G
flats as a co-operative society or, as the case may be, as
a company; and the promoter shall join, in respect of the
flats which have not been taken, in such application for
membership of a co-operative society or as the case may
be, of a company. Nothing in this section shall affect the
H right of the promoter to dispose of the remaining flats in
NAHALCHAND LALOOCHAND PVT. LTD. v. PANCHAL! CO- 827
OPERATIVE HOUSING SOCIETY LTD. [R.M. LODHA, J.]
accordance with the provisions of this Act. A
Provided that, if the promoter fails within the
prescribed period to submit an application to the Registrar
for registration of society in the manner provided in the
Maharashtra Co-operative Societies Act, 1960, the
B
Competent Authority may, upon receiving an application
from the persons who have taken flats from the said
promoter, direct the District Deputy Registrar, Deputy
Registrar or, as the case may be, Assistant Registrar
concerned, to register the society :
c
Provided further that, no such direction to register
any society under the preceding proviso shall be given to
the District Deputy Registrar, Deputy Registrar or, as the
case may be, Assistant Registrar, by the Competent
Authority without first verifying authenticity of the applicants' D
request and giving the concerned promoter a reasonable
opportunity of being heard."·
19. There is also obligation cast upon promoter to execute
the documents of title and convey to the co-operative society
E
or the company or an association of flat purchasers/apartment
owners, right, title and interest in the land and building by virtue
of Section 11 which reads thus:
"S.11.- (1) A promoter shall take all necessary steps to
complete his title and convey to the organization of F
persons, who take flats, which is registered either as a co-
operative society or as a company as aforesaid, or to an
association of flat takers or apartment owners his right, title
and interest in the land and building, and execute all
relevant documents therefore in accordance with the G
agreement executed under section 4 and if no period for
the execution of the conveyance is agreed upon, he shall
execute the conveyance within the prescribed period and
also deliver all documents of title relating to the property
which may be in his possession or power. H
828 SUPREME COURT REPORTS [2010] 10 S.C.R.
A 2. It shall be the duty of the promoter to file with the
Com;:ietent Authority, within the prescribed period, a copy
of the conveyance executed by him under sub-section (1 ).
3. If the promoter fails to execute the conveyance in favour
of the co-operative society formed under Section 10 or,
B
as the case may be, the company or the association of
apartment owners, as provided by sub-section (1 ), within
the prescribed period, the members of such co-operative
society or, as the case may be, the company or the
association of apartment owners may, make an
c application, in writing, to the concerned Competent
Authority accompanied by the true copies of the registered
agreements for sale, executed with the promoter by each
individual member of the society or the company or the
association, who have purchased the flats and all other
0 relevant documents (including the occupation certificate,
if any), for issuing a certificate that such society, or as the
case may be, company or association, is entitled to have
an unilateral deemed conveyance, executed in their favour
and to have it registered.
E
(4)
(5) "
20. Section 16 of MOFA provides that the provisions
F contained therein are in addition to the provisions of the T. P.
Act and shall take effect notwithstanding anything to the contrary
contained in the contract.
Re : question nos. (i) and (ii):
G (A) What is 'flat'?
21. For proper consideration of questions (i) and (ii) as
afore-referred, it is of considerable importance to ascertain the
import and meaning of the term 'flat' defined in Section 2(a-1)
H of MOFA. Rather the answer to the questions presented for
NAHALCHAND LALOOCHAND PVT LTD. v. PANCHAL! CO- 829
OPERATIVE HOUSING SOCIETY LTD. [RM. LODHA, J.]
consideration must squarely or substantially depend on what A
is a 'flat'. Justice G.P. Singh in the 'Principles of Statutory
Interpretation' (12th edition, 2010) says that the object of a
definition of a term is to avoid the necessity of frequent
repetitions in describing all the subject matter to which that word
or expression so c:!efined is intended to apply. In other words. B
the definition clause is inserted for the purpose of defining
particular subject-matter dealt with and it helps in revealing the
legislative meaning. However, the definitive clause may itself
require interpretation because of ambiguity or lack of clarity in
its language. In the 'Construction of Statutes' by Earl T. c
Crawford (1989 reprint) at page 362, the following statement
is made: " ....... the interpretation clause will control in the
absence of anything else in the act opposing the interpretation
fixed by the clause. Nor should the interpretation clause be
given any wider meaning than is absolutely necessary. In other 0
words, it should be subjected to a strict construction."
22: The definition of term 'flat' in MOFA at the time of its
enactment was this: 'flat' means a separate and self-contained
set of premises used or intended to be used for residence, or
office, showroom or shop or godown (and includes a garage), E
the premises forming part of a building. By Maharashtra Act
No. 15 of 1971, the definition of 'flat' got amended and the
words 'and includes an apartment' were inserted after the word
'building'. Thereafter by Maharashtra Act 36of1986, the words
'or for carrying on any industry or business' were inserted after F
the word 'godown' and before the bracketed portion '(and
includes a garage)'.
23. Before we analyze Section 2(a-1), if we ask what the
term 'flat' means, apart from the statutory definition, the reply G
must be that though it has no uniform meaning but in its natural
and ordinary meaning, 'flat' is a self contained set of premises
structurally divided and separately owned for dwelling. Concise
Oxford English Dictionary (10th edition, revised) explains 'flat'
-a set of rooms comprising an individual place of residence
H
830 SUPREME COURT REPORTS [2010] 10 S.C.R.
A within a larger building.
24. Webster Comprehensive Dictionary; International
edition (Vol. 1) explains 'flat'- 1. a set of rooms on one floor,
for the occupancy of a family; apartment. 2. A house containing
such flats.
8
25. In Stroud's Judicial Dictionary (5th edition, Vol. 2), a
reference has been made to the observations of Somervell L.J,
in Murgatroyd v. Tresarden, 63 T.L.R. 62 and it is stated; the
natural meaning of the word 'flat' is a separate self-contained
C dwelling.
26. In Words and Phrases, Permanent Edition, (West
Publishing Company), Vol. 17, while dealing with the term 'flat'
generally, it is stated :
D "The word 'flat' has no technical, legal meaning, so that a
court can pronounce absolutely one way or the other. A
building is a 'flat' or not, and, where the testimony is
· conflicting, the question is one of fact".
E 27. Advanced Law Lexicon by P. Ramanatha Aiyar (3rd
edition, 2005) explains the term 'flat', in the following way- 'in
the ordinary use of the term a flat is a self-contained set of
rooms, structurally divided and separately owned or let from the
rest of a building, which for the most part consists of other flats
F separated in like manner'.
28. Reverting back to the definition of the term 'flat' under
Section 2(a-1), for a 'flat' within the meaning of this definition
clause, the set of premises has to be a separate and self-
contained that forms part of the building which is used or
G intended to be used for residence or office, showroom or shop
or godown or for carrying on industry or business.
Separateness of one premises from another premises
physically and also in use or intended use for one of the uses
specified in the definition clause containing the necessary
H facilities for self-contained accommodation is sine qua non for
NAHALCHAND LALOOCHAND PVT. LTD. v. PANCHAL! CO- 831
OPERATIVE HOUSING SOCIETY LTD. [R.M. LODHA, J.]
a unit being covered by the definition of 'flat' occurring in Section A
2(a-1) which includes an 'apartment'. In other words, it must be
a separate unit conforming to the description capable of being
used for one of these purposes-namely, residence, office,
showroom, shop, godown or for industrial or business
purposes. Alternative uses in Section 2(a-1) do expand the B
ordinary meaning of the term 'flat' but nevertheless such
premises that form part of building must be separate and self-
contained. A set of premises is called self-contained if it has
the following basic amenities available: (a) sanitary; (b) washing,
bathing and (c) other conveniences (cooking etc.) for the use c
of its occupant/s although as provided in the explanation
appended to Section 2(a-1) such provision may be common
to two or more sets of premises. The nature of construction and
user are important features of this definition clause. A unit or
accommodation to fit in the definition of 'flat' must meet twin-
0
test namely: {i) self contained test and (ii) user test. The other
predominant characteristic is that it must form part of a
building. Crucially, for the relevant premises to be 'flat':
1 It must be a separate and self contained
premises; E
2 It must form part of building;
3 It must be used or intended to be used for
any of the uses namely-residence, office,
showroom, shop, godown or for carrying on F
any industry or business.
29. In the discussion made above, we have not referred
to the bracketed portion namely - '(and includes a garage)' so
far. What is the meaning and significance of this bracketed G
portion? On technical linguistic basis, the bracketed phrase can
only attach to the word preceding it. That may not be happy
construction nor such construction by reading bracketed portion
'(and includes a garage)' with the preceding word 'business'
appropriately reflects the meaning of the phrase. The scope of H
832 SUPREME COURT REPORTS [2010] 10 S.C.R.
A the bracketed phrase has to be seen in the context of the
definition given to the word 'flat' which is true indication of intent
of the legislature. It was suggested by learned senior counsel
and counsel for the promoters that the phrase 'and includes a
garage' must be read with the 'set of premises' and not with
B the user. This does not appear to be a correct reading of the
expression. We are not persuaded to accept such construction.
We think that statutory definition of 'flat' must be construed
keeping in view the intent of the legislature and the context of
the statute and, seen thus, the phrase, 'and includes a garage'
c in the bracket does not bring in 'garage' by itself within the
meaning of word 'flat'. If stand alone 'garage' (or a garage by
'
itself) were intended by the legislature to be a ·'flat' within the
meaning of Section 2(a-1), that could have been conveniently
conveyed by use of the expression 'or garage' after the word
'business' in the same breath as preceding uses. The
0
bracketed phrase is rather indicative of the legislative intention
to include a 'garage' as appurtenant or attachment to a flat.
which satisfies the ingredients of Section 2(a-1). To this extent
Mr. Pravin K. Samdani is right in his submission. It is clear tO
us that stand alone 'garage' or in other words 'garage' as an
E independent unit by itself is not a 'flat' within the meaning of
Section 2(a-1) and we answer question (i) in the negative. The
judgment of Bombay High Court in Dr. K.R. Agarwal Vs.
Balkrishna3 to the extent the expression 'or garage' has been
read after the word 'godown' in para 5 (clause 2) of the report
F does not state the correct legal position in what we have
already said above.
(B) Whether stilt parking space is a garage?
G 30. The next question is, whether stilt parking space in a
building regulated by MOFA is a 'garage'. The term 'garage'
has not been defined in MOFA and, therefore, we need to first
find out what is the extent and scope of that term in Section
2(a-1). The general term 'garage' is appropriated in English
H 3. AIR 1972 BOMBAY 343.
NAHALCHAND LALOOCHAND PVT. LTD. v. PANCHAL! CO- 833
OPERATIVE HOUSING SOCIETY LTD. [R.M. LODHA, J.]
from the French language and means 'keeping under cover' or A
·a place for keeping' of wagons as well as automobiles.
Concise Oxford English Dictionary (10th edition, revised)
explains 'garage'- 1 a building for housing a motor vehicle or
vehicles. 2 an establishment which sells fuel or which repairs
and sells motor vehicles. B
31. Webster Comprehensive Dictionary, International
edition (Vol. 1) explains the word 'garage'-a building in which
motor vehicles are stored and cared for.
32. Words and Phrases, Permanent Edition, (West C
Publishing Company), Vol. 17, states that 'garage' generally is
a station in which motorcars can be sheltered, stored, repaired,
cleaned, and made ready for use; it is also place for private
storage for motorcars; stable for motor cars.
D
33. The OCR define two expressions 'garage-private' and
'garage-public' in Regulations 2(47) and 2(48) respectively.
According to these Regulations, 'garage-private' means a
building or a portion thereof designed and used for the parking
of vehicles and 'garage-public' means a building or portion
E
thereof designed other than as a private garage, operated for
gain, designed and/or used for repairing, serving, hiring, selling
or storing or parking motor-drive· or other vehicles. In our view,
we must give to the word 'garage' occurring in Section 2(a-1)
a meaning that general public or for that matter a flat purchaser
of ordinary prudence would give to that word or understand by
F
that word. Learned senior counsel Mr. Sunil Gupta referred to
Barnett and Block1 wherein Atkinson, J. stated as follows:
"Now what is a garage? No evidence was given to
suggest or prove that the word "garage" in the trade had G
got any special meaning, and it was agreed to take four
dictionary definitions set out in the agreed statement of
facts. The four definitions were these. From the SHORTER
OXFORD DICTIONARY: '"A building for the stg_rage or
refitting of motor vehicles." From the NEW CENTURY H
834 SUPREME COURT REPORTS [2010] 10 S.C.R.
A DICTIONARY : "A building for sheltering, cleaning or
repairing motor vehicles. To put or keep in a garage." From
the NEW STANDARD DICTIONARY: "A building for
stabling or storing of motor vehicles of all kinds." From
NUTIAL'S STANDARD DICTIONARY: "A storehouse for
B motor vehicles." Those are four definitions from leading
dictionaries all containing at any rate one word in common,
and that is "building." As there is no evidence as to how
the general public understand the word "garage," I suppose
one is entitled to use one's own knowledge. I am inclined
c to think that ordinary man in the street does regard a
garage as connoting some sort of a building; how far he
would go I do not know. I do not know whether he would
think that there should be a wall all round it, or whether it
would be sufficient if there were three sides walled in and
a roof. I have one in mind where there is a row of sheds
D
without any protection in front, which are commonly spoken
of as "garages," but I am going to apply here the test
suggested by counsel for the insured. He said "A garage
is a place where one can get reasonable protection and
shelter for a car." Can I say that you are getting reasonable
E
protection and shelter for a car, if there is nothing to protect
the car from above - if there is no roof of any sort? I think
the ordinary man, as counsel for the insurers suggested,
who took a house with a garage, if he came and found
merely an open shed without any roof, would think he had
F been swindled, however high the walls might be. I cannot
think that one is entitled to say that it is adequate or
reasonable protection or shelter if there is no roof; but this
is worse than that, though I agree that the walls are very
good here. Wherever you put a car in this yard, in addition
G to there being no shelter from above, there will be no
shelter on two sides. That seems to me to be really
conclusive."
He, thus, submitted that even a place with merely a roof may
H well be a 'garage'. By placing reliance on condition No. 2 in
NAHALCHAND LALOOCHAND PVf. LTD. v. PANCHAL! CO- 835
OPERATIVE HOUSING SOCIETY LTD. [R.M. LODHA, J.]
Form V of 1964 Rules, learned senior counsel submitted that A
for the purposes of MOFA, even an open parking space is
tantamount to a 'garage'.
34. The relevant portion of condition No. 2, Form V
appended to 1964 Rules reads as under: B
"2. The Flat Purchaser hereby agrees to purchase from the
Promoter and the Promoter hereby agrees to sell to the
Flat Purchaser one flat No ........... of the Type .......... of
carpet area admeasuring .......... sq. meters (which is
inclusive of the area of balconies) on .......... floor as C
shown in the Floor plan thereof hereto annexed and marked
Annexures D/S hop No........... /covered/open Garage No .
. . . . . . . . . . in the .......... Building (hereinafter referred to as
"the Flat") for the price of Rs ........... including Rs .......... .
being the proportionate price of the common areas and D
facilities appurtenant to the premises, the nature extent and
description of the common/limited common areas and
facilities/limited common areas and facilities which are
more particularly described in the Second Schedule
hereunder written. The Flat Purchasers hereby agrees to E
pay to that Promoter balance amount of purchase price of
Rs ........... (Rupees ......................... ) having been
paid to the Promoter on or uefore the execution of his
agreement in the following manner."
35. We do not perceive any force in the argument that open
F
parking spac~ tantamounts to a 'garage' within the meaning
of Sectiorf2(a-1) read with condition No. 2 Form V of 1964
Rules. Can a person buying a flat for residence or one of the
uses mentioned in Section 2(a-1) really think that open to the
sky or open space for parking motor vehicles is a garage? We G
do not think so. The word 'garage' may not have uniform
connotation but definitely every space for parking motor
vehicles is not a garage. A roofless erection could not be
described a garage. What is contemplated by a 'garage' in
Section 2(a-1) is a place having a roof and walls on three sides. H
836 SUPREME COURT REPORTS [2010] 10 S.C.R.
A It does not include an unenclosed or uncovered parking space.
It is true that in condition No. 2, Form V the words 'covered/
open garage' have been used but, in our view, the word 'open'
used in the Model Form V cannot override the true meaning of
term 'garage' in Section 2(a-1). As a matter of fact, none of
B the provisions of MOFA regards 'open garage' connoting 'flat'
or an appurtenant/attachment to a flat. We do not think undue
importance should be given to word 'open' which has loosely
been used in condition No. 2, Form V. The true meaning of the
term 'garage' in Section 2(a-1), we think, is not affected by a
c Model Form V appended to the 1964 Rules.
36. The question then is as to whether the stilted portion
or stilt area of a building is a garage under MOFA. A stilt area
is a space above the ground and below the first floor having
columns that support the first floor and the building. It may be
D usable as a parking space but we do not think that for the
purposes of MOFA, such portion could be treated as garage.
It was argued that the test accepted by Atkinson, J: in Barnett
& Block1-that a garage is a place where one can get
reasonable protection and shelter for a car-is satisfied by stilt
E car parking space and such space is a garage. We are unable
to agree. The test accepted by Atkinson, J. in Barnett and
Block1 also does not support this argument. Even as per that
test a place having roof but offering no shelter or protection on
two sides cannot be a garage. It is worth repeating what
F Atkinson,J. said, ' .... I am inclined to think that the ordinary man
in the street does regard a garage as connoting some sort of
building; how far he would go I do not know. I do not know
whether he would think that there should be a wall all round it,
or whether it would be sufficient if there were three sides walled
G in and a roof. I have one in mind where there is row of sheds
without any protection in front, which are commonly spoken of
as "garages".' Atkinson,J. applied the test of 'reasonable
protection and shelter for car' as was suggested by the counsel
for the insurer while construing the term 'garage' in a policy of
H insurance. For the purposes of MOFA, and particularly Section
NAHALCHAND LALOOCHAND PVT. LTD. v. PANCHAL! CO- 837
OPERATIVE HOUSING SOCIETY LTD. [R.M. LODHA, J.]
2(a-1), the term 'garage' must be considered as would be A
understood by a flat purchaser and such person would
contemplate garage which has a roof and wall on three sides.
Our answer to question No. (ii) is, therefore, no.
Re: question no. (iii) - Whether stilt parking spaces are 8
part of 'common areas and facilities'?
37. The High Court has held that the stilt car parking
spaces are part of the common amenities. Is the High Court
right in its view? MOFA does not define nor it explains 'common
areas and facilities' though the said phrase is used at various C
places in that Act. Mr. Pravin K. Samdani, learned senior
counsel for Maharashtra Chamber of Housing Industry
submitted that following could be termed as part of the 'common
areas':
D
1 15% Recreation Ground (RG) Area;
2 Recreational facilities and/or club house on
above · RG Areas;
3 Society Office; E
4 Security guards cabin;
5 Common passage/lobbies;
6 Stair case; F
7 Lift;
8 Terraces over the roof of the building;
9 Landings on each floor; G
10 Columns and beams of the building
11 Playgrounds, if any.
H
838 SUPREME COURT REPORTS [2010] 10 S.C.R.
A According to him, the following could be part of 'Limited
Common Areas':
1 Separate lift attached to a particular flat and/
or certain number of flats;
B 2 Terrace attached to a flat;
3 Servants toilet on each floor, meant for the
user of the flats on that particular floor;
C The aforesaid list as suggested by the learned senior counsel,
in our opinion, is not exhaustive. It may not be out of place to
refer to Section 3(f) of MAOA which defines 'common areas
and facilities' as follows:
"3(f) "common areas and facilities", unless otherwise
D provided in the Declaration or lawful amendments, thereto
means-
(1) the land on which the building is located;
(2) the foundations, columns, girders, beams, supports,
E main walls, roofs, halls, corridors, lobbies, stairs, stair-
ways,· fire-escapes and entrances and exits of t he
buildings;
(3) the basements, cellars, yards, gardens, parking areas
F and storage spaces;
(4) the premises for the lodging of janitors or persons
employed for the management of the property;
(5) installations of central services, such as power, light,
G gas, hot and cold water, heating, refrigeration, air
conditioning and incinerating;
(6) the elevators, tanks, pumps, motors, fans,
compressors, ducts and in general all apparatus and
H
NAHALCHAND LALOOCHAND PVT. LTD. v. PANCHAL! CO- 839
OPERATIVE HOUSING SOCIETY LTD. [RM. LODHA, J.]
installations existing for common use; A
(7) such community and commercial facilities as may be
provided for in the Declaration; and
(8) all other parts of the property necessary or convenient
to its existence, maintenance and safety, or normally in B
common use;"
It is true that interpretation clause or legislative definition in a
particular statute is meant for the purposes of that statute only
and such legislative definition should not control other statutes c
but the parts of the property stated in clauses (2), (3) and (6)
of Section 3(f) as part of 'common areas and facilities' for the
purposes of MAOA are what is generally understood by the
expression 'common areas and facilities'. This is fortified by
the fact that the areas which according to the learned senior 0
counsel could be termed as 'common areas' in a building
regulated by MOFA are substantially included in aforenoticed
clauses of Section 3(f) of MAOA. Looking to the scheme and
object of MOFA, and there being no indication to the contrary,
we find no justifiable reason to exclude parking areas (open to
E
the sky or stilted portion) from the purview of 'common areas
and facilities' under MOFA.
38. It was argued that under MOFA it is for the promoter
to prescribe and define at the outset the 'common areas' and
unless it is so done by the promoter, the parking area cannot F
be termed as part of 'common areas'. We are quite unable to
accept this submission. Can a promoter take common
passage/lobbies or say stair case or RG area out of purview
of ·common areas and facilities' by not prescribing or defining
the same in the 'common areas'? If the answer to this question G
is in negative, which it has to be, this argument must fail. It was
also submitted that by treating open/stilt parking space as part
of 'common areas', every flat purchaser will have to bear
proportionate cost for the same although he may not be
interested in such parking space at all. We do not think such H
840 SUPREME COURT REPORTS [2010] 10 S.C.R.
A consideration is relevant for the consideration of term 'common
areas and facilities' in MOFA. It is not necessary that all flat
purchasers must actually use 'common areas and facilities' in
its entirety. The relevant test is whether such part of the building
is normally in common use. Then it was submitted that if a
B parking space is sold to a flat purchaser, it is to the exclusion
of other flat purchasers and, therefore, logically also it cannot
be part of 'common areas'. This submission is founded on
·. assumption that parking space (open/covered) is a 'garage'
and sellable along with the flat. We have, however, held in our
c discussion above that open to the sky parking area or stilted
portion usable as parking space is not 'garage' within the
meaning of Section 2(a-1) and, therefore, not sellable
independently as a flat or along with a flat. As a matter of fact,
insofar as the promoter is concerned, he is not put to any
prejudice financially by treating open parking space/stilt parking
0
space as part of 'common areas' since he is entitled to charge
price for the common areas and facilities from each flat
purchaser in proportion to the carpet area of the flat. MOFA
mandates the promoter to describe 'common areas and
facilities' in the advertisement as well as the 'agreement' with
E the flat purchaser and the promoter is also required to indicate
the price of the flat including the proportionate price of the
'common areas and facilities'. If a promoter does not fully
disclose the common areas and facilities he does so at his own
peril. Stilt parking spaces would not cease to be part of
F common areas and facilities merely because the promoter has
not described the same as such in the advertisement and
agreement with the flat purchaser. Although there is some merit
in the contention of the appellant that High Court erred in
placing reliance on the t.vo aspects-namely, that the area of
G stilt parking space is not included in the FSI and such area is
not assessable to the corporation taxes - in reaching the
conclusion that stilt parking space is part of 'common areas'
but in our view even if these two aspects are excluded, in what
we have discussed above stilt parking space/open parking
H space of a building regulated by MOFA is nothing but a part of
NAHALCHAND LALOOCHAND PVT LTD. v. PANCHAL! CO- 841
OPERATIVE HOUSING SOCIETY LTD. [R.M. LODHA, J.]
'common areas' and, accordingly, we answer question no. (iii) A
in the affirmative.
Re: question no. (iv) - what are the rights of a promoter
vis-a-vis society in respect of stilt parking spaces?
39. We have now come to the last question namely-what B
are the rights of a promoter vis-a-vis society (of flat purchasers)
in respect of stilt parking space/s. It was argued that the right
of the promoter to dispose of the stilt parking space is a matter
falling within the domain of the promoter's contractual, legal and
fundamental right and such right is not affected. This argument C
is founded on the premise, firstly, that stilt parking space is a
'flat' by itself within the meaning of Section 2(a-1) and in the
alternative that it is not part of 'common areas'. But we have
already held that 'stilt parking space' is not covered by the term
'garage' much less a 'flat' and that it is part of 'common areas'. D
As a necessary corollary to the answers given by us to question
nos. (i) to (iii), it must be held that stilt parking space/s being
part .of 'common areas' of the building developed by the
promoter, the only right that the promoter has, is to charge the
cost thereof in proportion to the carpet area of the flat from each E
flat purchaser. Such stilt parking space being neither 'flat' under
Section 2(a-1) nor 'garage' within the meaning of that provision
is not sellable at all.
40. MOFA was enacted by the Maharashtra Legislature as
F
it was found that builders/developers/promoters were indulging
in malpractices in the sale and transfer of flats and the flat
purchasers were being exploited. The effect of MOFA may be
summarized as follows. First, every promoter who constructs
or intends to construct block or building of flats in the area to
which MOFA applies has to strictly adhere to the provisions G
contained therein, i.e., inter alia, he has to make full and true
disclosure of the nature of his title to the land on which the flats
are constructed and also make disclosure in respect of the
extent of the carpet area of the flat and the nature, extent and
description of the common areas and facilities when the flats H
842 SUPREME COURT REPORTS [2010] 10 S.C.R.
A are advertised for sale. Secondly, the particulars which are set
out in Section 4(1A) (a) (i) to (x) have to be incorporated in the
agreement with the flat purchaser. Thirdly, the promoter has to
apply to the Registrar for registration of the organization (co-
operative society or company or condominium) as soon as
B minimum number of persons required to form such
organization have taken flats. As regards unsold flats, the
promoter has to join such organization although his right to
dispose of unsold flats remains unaffected. Fourthly, and more
importantly, the promoter has to take all necessary steps to
c complete his title and convey to the organization his right, title
and interest in the land and building and execute all relevant
documents accordingly. It was argued by Mr. Tanmaya Mehta,
learned counsel for the promoter that in view of the provisions
of MOFA, Section 6 of T.P. Act and Article 300A of the
Constitution, the right of the promoter to transfer parking spaces
0
is not at all restricted. Relying upon the decisions of this Court
in /CIC/ Bank Ltd. v. S/DCO Leathers Ltd. & Ors .. 4 , Kamataka
State Financial Corporation v. N. Narasimahaiah & Ors. 5 and
Bhikhubhai Vithlabhai Patel & Ors., v. State Of Gujarat & Anr. 6,
he submitted that the provisions contained in MOFA must be
E construed strictly and there is no provision either express or by
necessary implication in MOFA restricting the sale of stilt or
open parking spaces. Mr. Sunil Gupta also argued that
promoter continues to have contractual, legal and fundamental
right to dispose of the stilt/open parking space in the manner
F in which he proposes and his consumers accept. We think this
argument does not bear detailed examination. Suffice it to say
that if the argument of learned senior counsel and counsel for
promoter is accepted, the mischief with which MOFA is
obviously intended to deal with would remain unabated and flat
G purchasers would continue to be exploited indirectly by the
promoters. In our opinion, MOFA does restrict the rights of the
4. (2006) 10 sec 452.
5. (2008) 5 sec 116.
H 6. (2008) 4 sec 144.
NAHALCHAND LALOOCHAND PVT. LTD. v. PANCHAL! CO- 843
OPERATIVE HOUSING SOCIETY LTD. [RM. LODHA, J.]
promoter in the block or building constructed for flats or to be A
constructed for flats to which that Act applies. The promoter has
no right to sell any portion of such building which is not 'flat'
within the meaning of Section 2(a-1) and the entire land and
building has to be conveyed to the organisation; the only right
remains with the promoter is to sell unsold flats. It is, thus, clear B
that the promoter has no right to sell 'stilt parking spaces' as
these are neither 'flat' nor appurtenant or attachment to a 'flat'.
41. In view of the above, it is not at all necessary to deal
with the factual submissions advanced by Mr. Tanmaya Mehta.
Having regard to the answer to question no. (iv), the finding of C
the High Court that undertakings are neither binding on the flat
purchasers nor the society also warrants no interference.
42. These appeals, accordingly, fail a_nd are dismissed with
no order as to costs.
N.J. Appeal dismissed.
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