The Bombay High Court recently held in the case of Goel Ganga Foundati on vs Federati on of Swarganga Co.opSociety Limited and Ors that only the flat purchasers have a right to use and utilize the common areas under the Maharashtra Ownership of Flats (Regulation of Promotion, Construction Sale, Management and Transfer) Act 1963 (MOFA). This update briefly analyses this judgement.

BACKGROUND
Goel Ganga Foundation (Petitioners) runs an international school which was constructed by the Respondent No 14 (Promoter) who granted a license to the Petitioner to use the building from April 2014 to March 2019 vide a leave and license agreement. The Promoter along with the construction of the school, developed residential buildings and sold them to flat purchasers. Further, the Promoter unilaterally allotted 110 stilt parking spaces to the Petitioner in March 2010 after executing agreements with flat purchasers, but before societies were formed. The respondent societies sought deemed conveyance as per Section 11 under MOFA and accordingly the competent authority granted the deemed conveyance in 2013.

The Petitioners instituted a suit before the trial court for injunction against the Promoter and other respondents and an order was passed to temporarily restrain the respondents from blocking the entry gate and obstructing the Petitioner’s school, its employees, and visitors from parking their vehicles in the 110 stilt parking spaces. However, the learned district judge set aside the said order of the trial court. Therefore, the Petitioners challenged the order of the district judge before the Bombay High Court in the present case.

HELD
The Bombay High Court dismissed the present petition with exemplary cost and held that since cost of the common areas had been recovered by the Promoter from each flat purchaser in proportion to the area of their respective flats, only the flat purchasers have a right to use and utilize the common areas. It relied on the decision of the Apex Court passed in Nahalch and Laluch and (2010) 9 SC 536 to hold that stilt parking spaces, being neither a flat nor a garage within the meaning of Section 2a (1) of MOFA, is not saleable. The same falls under the definition of “common areas and facilities” under Secti on 3(f) of MOFA and, hence, the Promoter has no right to grant use of such stilt parking spaces to a third person, who is not a flat purchaser. The Court further observed that the order of deemed conveyance does not allow the Promoter to allot the stilt parking spaces to the Petitioner in defiance of rights of the flat purchasers.

MHCO Comment: This judgement clarifies the position of flat purchasers / members of a society over car parking spaces and their right to use and utilise the common areas. In our experience, we have seen at multiple occasions such disputes come up where in the promoter / developer / builder allots car parking spaces of a society to a third party, thereby depriving the right of the members of the society. This judgement will help flat purchasers from being exploited by the developers.

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Author: Bhushan Shah - Partner | Keerthi Kamath – Associate

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This update was released on 25 Oct 2023.

The views expressed in this update are personal and should not be construed as any legal advice. Please contact us directly on +91 22 40565252 or legalupdates@mhcolaw.com for any assistance.

Legal Update Team
MANSUKHLAL HIRALAL & COMPANY
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