Anand Swaroop Maini vs M/S. Laxmi Enterprises

IA No.17624/2018

IA for early hearing is allowed.

Issue notice of this revision petition to the respondent. Notice is accepted by learned counsel for the respondent who is present in court today and states that he is ready with arguments. Hence, the arguments heard.

The present revision petition has been filed against the order of the State Commission dated 29.12.2015 in Appeal No.1202 of 2013 whereby the appeal of the respondent against the order dated 1.5.2013 of the District Forum, Lucknow in Complaint Case No.335 of 2003 was allowed. The present revision petition has been filed by the complainant/petitioner against the said impugned order.

The brief undisputed facts of the case are that the complainant had purchased a residential flat 1B, Prakash Apartment, 44-A, Cantt Road, Lucknow from the respondent. The possession of the said flat was delivered on 14.11.1999. There is no dispute of the fact that the entire cost of the flat was received by the respondent. The sale deed qua the said flat however, remained unexecuted for a long time and the complainant/ petitioner filed a complaint seeking direction against the opposite party/respondent for execution of the sale deed in terms of the provisions of The Uttar Pradesh Apartment (Promotion of Construction, Ownership and Maintenance) Ordinance, 2003 alongwith the percentage of undivided interest underneath the land of the flat and also rights of the petitioner in common areas and facilities. He also claimed other reliefs like damages, compensation and cost.

After considering the evidences on record and going through the various provisions of the said ordinance, the District Forum allowed the complaint and directed the respondent to execute the sale deed providing for the ownership of the flat in question with undivided interest in the common area and facilities appurtenant to such apartment and also awarded compensation of Rs.5,000/- and compensation of Rs.2,500/- as cost of litigation.

The said order was challenged by the respondent before the State Commission and the State Commission framed the following issues on the basis of contentions raised in the appeal. The following issues are reproduced as under:

Whether the provisions of the Act are effective in the context of the present matter?

Whether there is any deficiency in the service of the appellant/opposite party?

On the issue no.1 the State Commission held as under:

"On the applicability of the provisions of UP Ownership of the Flats Act, 1975, Section 2 of the Act reads as under:

Application of the Act- This applies only to property, the sole owner or all the owners of which submit the same to the provisions of this Act by duly executing and registering a Declaration setting out the particulars referred to in Section (10).

Providing further that no property shall be submitted to the provisions of this Act, unless it is actually used or is proposed to be used for residential purposes.

Provided further that the sole owner or all the owners of the land on which building is situated may submit such land to the provisions of this Act with a condition that he or they, shall grant a lease of such and to the owners of the flats, the terms and conditions of the lease being disclosed in the declaration either by annexing a copy of the instrument of lease to be executed to the Declaration or otherwise.

Under this Section facts of the required declaration have been mentioned in Section 10. In implementation of Section 2 of this Act declaration mentioned in Section 10, has not been done by the appellant who is the owner of the disputed building. hence the provisions of this Act cannot be accepted as effective in the context of the present case, but the leaned District Forum has accepted the provisions of the above Act in the light of Section 19 of the Act.

This fact is not disputed that the sale document of the flat in question has not been executed in favour of the respondent/complainant. The respondent/complainant cannot be considered as the owner of this flat because of non-execution of the sale document. This is not the statement of the respondent/complainant that the required declaration as per Section 2 of the Act has been made by the appellant. In the situation of making the declaration as mentioned in Section 10 by the owner of the property in Section of the Act, provisions of the Act have been stated to be effective. This is the statement of the appellant that no such declaration has been made by him. Hence the provisions of this Act cannot be accepted as effective. The conclusion of the learned District Forum in this context is found defective."

The above discussion of the State Commission clearly shows that the case of the complainant was not covered under the said Act and application of the said Act by the District Forum while granting relief was incorrect. On that basis, it also rejected the claim of the complainant.

Aggrieved by these findings, the present revision petition has been filed. It is argued on behalf of the petitioner that after the promulgation of the new Act, i.e. The Uttar Pradesh Apartment (Promotion of Construction Ownership & Maintenance Act, 2010) (herein after called the Act), all the flat owners by virtue of Section 2 of the said Act automatically have acquired the proportionate right in the land underneath of the flat and also the facilities of the common area by virtue of Section 3(i) of the said Act. It is further argued that this Act does not differentiate whether the property acquired before passing of the Act or after passing of this Act. It is further argued that this Act has the overriding effect over any other law for the time being in operation which were/are contrary to the operation of this Act as is clear from Section 31 of the said Act. It is further argued that even if the sale deed would have been executed in the year 1999, by virtue of this Act, the petitioner would have acquired proportionate right in the land as the Act has a binding effect on all the existing and future flat buyers. The reliance is placed on the findings of the Allahabad High court in M/s Designarch Infrastructure Pvt. Ltd. and others Vs. Vice-Chairman, Ghaziabad Development Authority and others, (2013) 9 ADJ 594, particularly paragraph -65 of the said order. It is further argued that today even if anyone goes for the execution of the sale deed, he has to pay the stamp duty as per the prevailing rate and not on the old cost of the flat and the Registrar has also to follow the prevalent law and he has to register the sale deed in terms of the provisions of this Act.

It is argued on behalf of the respondent that what they sold was only the flat and no right in the common area was sold and while costing the flat, they have not included the price of the common land and they did not sell the proportionate right.

I have given thoughtful consideration to the arguments and contentions of learned counsel of the parties and perused the relevant record. Admittedly the sale deed was not executed at the time when the flat was sold. The possession was handed over on taking the cost of the flat. The only question is as to what is the state of affairs today after passing of this Act, Section 2 of the Act is reproduced as under:

"2. Application:- The provisions of this Act shall apply to all buildings having four or more apartments in any building constructed or converted into apartment and land attached to the apartment, whether freehold or held on lease excluding shopping malls and multiplexes."

From the bare reading of this Section, it is apparent that this Act applies to all the buildings which has four or more apartments and land attached to the said apartment whether freehold or held on lease. Section 31 of the Act reads as under:

"31. Overriding effect of this Act:- (1) The provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force;

(2) Save as otherwise expressly provided in sub-section (1) of provisions of this Act, shall be in addition to, and not in derogation of any other law for the time being in force."

Both these provisions make it clear that this Act has an overriding effect on all the existing laws which were prevalent prior to passing of this Act. The Allahabad High Court in M/s Designarch Infrastructure Pvt. Ltd. and others Vs. Vice-Chairman, Ghaziabad Development Authority and others (supra) after considering various judgments of the Hon'ble Supreme Court and interpreting various provisions of the Act summed up its conclusion as under:

"65. (1) The U.P. Apartment Act, 2010 and the U.P. Apartment Rules, 2011 provides for a complete code for regulating the rights, duties and liabilities and for resolving the issues and disputes between the promoters and the apartment owners. The Act has overriding effect under Section 31 (1) over all other laws on the subject notwithstanding anything inconsistent therewith contained in any other law for the time being enforced.

(2) The provisions of the Transfer of Property Act, 1882, in view of Section 29 of the U.P. Apartment Ownership Act, 2010, shall in so far as they are not inconsistent with the provisions of the Act apply to the transfer of any apartment together with its undivided interest in the common areas and facilities appurtenant thereto made by the owner of such apartment, where such transfer is made by sale, lease, mortgage, exchange, gift or otherwise as they are applied to the transfer of any immovable property.

(3) The apartment owner under Section 3 (d) will not only the person or persons owning an apartment or the promoter or his nominee in case of unsold apartments with an undivided interest in the common areas and facilities appurtenant to such apartment in the percentage specified in the Deed ofApartment and includes the lessee of the land on which the bulding containing such apartment has been constructed, where the lease of such land is for a period of thirty years or more; it includes the spouse and children of the apartment owner and a lawful tenant of the allottee/ owner of the allotment, which will also include officer or employee of the company/ firm or association, which owns an apartment under a valid allotment letter and its tenant. It will also include a person holding valid power of attorney of the allottee/ owner of the apartment, where it is owned individually, jointly or in the case of a company/ firm/ society and occupied wihtout any right of occupation either as family member, tenant, employee or person holding power of attorney will not be included in the definition of apartment owner.

(4) The U.P. Apartment Act, 2010, which has come into force w.e.f. 19.3.2010 is applicable to all the buildings, which have three or more than three apartments intended for any type of independent use including enclosed spaces located on one or more floors to be used for residential or official purposes or for the purpose of practising any profession or for carrying on any occupation, trade or business, excluding shopping malls and multiplexes. The word 'apartment' includes any garage or room whether or not adjacent to the building in which such apartment is located, if it has independent access to public street, road or to a common area leading to such street, road, used for parking cars or for residence of any domestic aid. The garage or such rooms, however, do not have any independent status as apartment, to carry with it any rights of common areas and facilities.

(5) Each of the chapters namely Chapter-II Duties and Liabilities of Promoters; Chapter III Right and Obligations of Apartment Owners; Chapter IV Ownership, Heritability and Transferability of Apartment; Chapter V Declaration of Building and Deed of Apartment; Chapter VI Association of Apartment Owners and Bye-laws for the Registration of the Affairs of such Association; Chapter VII Common Profits, Common Expenses and Other Matters, are independent and that the rights and liabilities under these chapters can be enforced independently unless these are essentially depending upon rights and liabilities in other chapters subject to Chapter VIII 'Miscellaneous' with the ultimate control of the State Government of which directions have to be carried out by the competent authority as defined in Rule 2 (c) of the Rules, 2011.

(6) Chapter V Declaration of Building and Deed of Apartment, carries within it the content, which fulfills the primary objective of the Act. The declaration under Section 12 falling in the said chapter, with which the complete information as provided in Form-A under Rule 3 of the Rules of 2011 with Annexure-A to F and Schedule A, must be enclosed as mandated by Section 13 with the deed of transfer, is mandatory for handing over possession of any apartment constructed after the commencement of the Act and also to get such transfer deed registered under the provisions of the Registration Act, 1908.

(7) Under Section 5 (1) of the U.P. Apartment Act, 2010 every person to whom any apartment is sold or transferred by the promoter shall subject to other provisions of the Act be entitled to exclusive ownership and possession of the apartment so sold or otherwise transferred. He is under sub-section (2) entitled to the exclusive ownership and possession of apartment and shall be entitled to such percentage of undivided interest in the common areas and facilities as may be specified in the deed of apartment and such percentage shall be computed by taking, as a basis, the area of the apartment in relation to the aggregate area of all apartments of the building. Such percentage of undivided interest under sub-section (3) (a) in the common areas and facilities shall have a permanent character, and shall not be altered without the written consent of all the apartment owners and approval of the competent authority, and which shall not be separated from the apartment to which it pertains. It shall be deemed to be conveyed or encumbered with apartment, even though such interest is not expressly mentioned in the conveyance or other instrument. The common areas and facilities under sub-section (4) can not be transferred and will remain undivided with the apartment. These can not be partitioned or subject to any division and will be enjoyed by the apartment owner under sub-section (5), without hindrance or encroaching upon the lawful rights of the other apartment owners.

(8) The ''limited common areas and facilities', which are specified in writing by the promoter before the allotment, sale or other transfer of any apartment as reserved for use of certain apartment or apartments to the exclusion of the other apartments as defined in Section 3 (s) and the ''independent areas', which have been declared but not included as common areas for joint use of apartments, and which may be sold by the promoter without the interference of other apartment owners under Section 3 (p), must be clearly defined and delineated in the declaration under Section 12, failing which the promoter will not be entitled to claim these common areas and facilities to be limited or independent. Any dispute with regard to common areas and facilities, limited common areas and facilities and independent areas, and for its provisions in the declaration is subject to decision by the competent authority as defined under Rule 2 (c) of the Rules of 2011. The failure to submit the declaration and its enclosure with the deed of transfer and its non-registration will disentitle the promoter from claiming common areas and facilities in the property in which the apartments are built to be limited common areas and facilities or independent areas.

(9) The association of apartment owners is to be registered by the Registrar, Deputy Registrar or Sub-Registrar under the Societies Registration Act as amended in the State of U.P. If bye-laws are inconformity with the model byelaws as notified on 16.11.2011, the Registrar/ Deputy Registrar/ Sub-Registrar cannot refuse to register association on the ground that it contains less than minimum number of members of the society under the Societies Registration Act or that it does not comply with any of the provisions of the Societies Registration Act as amended in the State of U.P. The registration of the association is in compliance with the provisions of the U.P. Apartment Act, 2010, U.P. Apartment Rules, 2011 and model byelaws. It shall be the joint responsibility of the promoter and apartment owners to obtain the registration. The Registrar/ Deputy Registrar/ Sub Registrar shall not refuse to register the association, if the promoter does not join even after one month's notice given by the apartment owners or 33% of the apartment owners, whichever is more. It is clarified that the completion of all infrastructure services and completion certificate from local authority will not be a ground to deny the registration, as the issuance of completion certificate depends on the steps to be taken by the promoter. The delay caused by him in obtaining such certificate will defeat the object of formation of the society and the enforcement of the rights and liabilities of the promoter and the apartment owners. In such case the society will be registered provisionally under the certificate to be given by the competent authority as defined in Rule 2 (c) of the Act, who will give a time period to the promoter to provide all infrastructure services and to obtain completion certificate, failing which the promoter will invite the punishment for the offence as prescribed under Section 25 of the Act including the punishment of imprisonment under Section 25 (1) of the Act.

(10) The ''competent authority' within the meaning of Rule 2 (c) as defined will include Vice Chairman of the Development Authority in whose notified development area the building is situate or the Collector of the district, where no such development authority exists. In case of the Industrial Development Authority the competent authority shall be the Chief Executive Officer of the Industrial Development Authority. For the purposes of discharging functions and duties and resolving the disputes the competent authority will be entitled to delegate its powers to an officer not below the rank of Joint Secretary including Legal Advisor of the authority and any Sub Divisional Magistrate of the district in case of a district. The competent authority shall set up mediation and conciliation centres in each authority, or the district, which will resolve to mediate the disputes at the first instance between the disputing parties.

(11) Any dispute raised before the competent authority shall be decided by the competent authority or delegatee as provided above or his delgatee as provided above, to be decided by the officer notified by the State Government under Section 27 (2) and (3) of the Act, before it is brought before the Court of law.

(12) The competent authority will also be entitled to verify the contents of the declaration under Section 12 of the U.P. Apartment Act, 2010 and to decide any question, which may arise out of such declaration.

(13) The model byelaws as notified on 16.11.2011 under sub-section (6) of Section 14 of the U.P. Apartment Act, 2010, if not approved and appended to the application for registration, made prior to the enforcement of the Act shall be adopted in the first meeting of the association of apartment owners and will be registered by the Registrar. Any amendment in the model bye-laws will be made in accordance with the Bye Law 58 of the Model Byelaws to be approved by the owners representing atleast 2/3rd of the total number of units in the building with the prior approval of the competent authority and will thereafter be registered by the Registrar of Societies without insisting upon complying with the provisions of any other Act including Societies Registration Act as amended in the State of U.P. No alteration in the declaration given by the promoter under Section 12 shall be permitted except in accordance with the Act and for which the approval of the development authority or regulating authority in which such property is situate will be necessary and thereafter with the approval of the association of apartment owners by resolution passed by the apartment owners in which vote of promoter shall not be counted. The development authority or regulating authority may in such case demand a NOC from the apartment owners before allowing any alteration in the building plans as a condition for granting approval.

(14) The FAR or any additional FAR is a property, appended to rights in the property on which the building is constructed, and is thus a property in which the apartment owners have interest by virtue of the provisions of the UP Apartment Act, 2010. The purchase of additional FAR is not permissible to be appropriate by the promoter without any common benefits to the apartment owners. The consent of the apartment owners obtained by resolution in the meeting of the apartment owners by majority will be necessary for purchasing additional FAR. Its utilization will also be subject to the consent of the apartment owners".

It is not disputed by the learned counsel for the respondent that this order was not impugned before the Hon'ble Supreme Court, thus this order has a binding effect and there is no other contrary interpretation to the Uttar Pradesh Apartment (Promotion of Construction, Ownership & Maintenance Act, 2010).

Learned counsel for the respondent has not produced any case law which are contrary to the findings given in the said judgment. The findings of the Allahabad High court in M/s Designarch Infrastructure Pvt. Ltd. and others Vs. Vice-Chairman, Ghaziabad Development Authority and others (supra) is that this Act governs all the existing flats owned by the flat owners and/or any other future ownership of the flat by way of subsequent sale deed. The fact is that by this Act, as already discussed, all the flat owners who were owning a flat by virtue of promulgation of this Act, became entitled for the proportionate undivided share in the land underneath their flat and also the common use of the common facilities. In view of this fact, the sale deed has to be executed in terms of this Act. The argument that the sale deed should be executed in terms of provisions of the Act prevalent in the year 1999 is meritless because this Act overrides all the other Acts in operation prior to its promulgation.. The impugned order, therefore, suffers from potent illegality and therefore, is hereby set aside and the order of the District Forum is hereby confirmed.

With these observations, the present revision petition stands disposed of.