LAW vs Case Law - A Critique

INTRODUCTION

The case law vide the SC judgment reported @ SC on Car Parking. (Nahalchand’s case) calls for an analytical study.

The Ruling both the HC and the SC have successively given is against the promoter operating in Maharashtra. It has sold ‘units’ of a building as ‘flats’ to which the law that applies is embodied in MOFA. It is a civil dispute, on a very limited point. That is targeted against the promoter’s act complained of, in its retaining car parking area(s) in the form of ‘stilt car parking’ in the building complex, with the intent of selling ‘separately’, and for a price. The court has held to the effect that the promoter has no right to so retain any area in the building complex, for sale. The reasoning is that all such areas are very much part and parcel of the “common areas and facilities” (CAF) as envisaged by MOFA.

2. The prayer of the promoter and relief sought was for ‘injunction’ against the OPs. The promoter, as observed, has relentlessly pursued its dispute in appeal, before the high court and then the apex court. In doing so, the promoter has claimed and persuaded the court (s) to proceed on the premise that the point(s) of dispute involves question(s) of law, hence requiring adjudication and settlement by court. So far nothing is really amiss; for, by any reasoning, none can think of any possible ground, for truly entertaining any doubt or reservation against the correctness or the essence of the final ruling proving adverse to the promoter. The tragedy is, that, however, has not been allowed to rest there. For, certain observation(s) of the court as found in the judgment, has lead to an obviously unintended consequence; in that, has given rise to a fresh spate of controversy; so also, disputes of a different type. The media, besides others, has spared no pains to try and make its own contribution to the disgusting scenario.    

3. The study herein is confined to the noted controversy that has been so kicked up and started rolling. At the outset, one would urge, that the referred controversy is palpably misconceived and patently unsound. That has no more substance or merit, hence deserves to be simply given its quietus, same way as to proverbial “storm in a tea cup”.

To dilate:

4.1. In the instant case, the dispute relates to a part of the building complex, being stilt parking area, retained by the promoter, with intent to sell separately. No knowing at this late stage as to what really has been the intention. But the fact remains, the promoter has gone on record by way of a commitment during the proceedings to say that it intended to sell the retained areas separately, but only to his purchasers, not to any ‘outsider’.

4.2. If critically perceived and incisively viewed, the point of dispute is narrowed down to this: Whether any such area, being outside of the area of the flats, can at all be lawfully retained by promoter, to sell separately. According to the scheme of the provisions of MOFA, there is no room for even an iota of doubt that all areas (including ‘facilities’), covered by the concept of “Common Areas and Facilities” (CAF), physically located outside of the area (s) of the flat (s), have to be regarded as covered within the general meaning, besides that as per the law. Further that, on a harmonious reading and insightful understanding of the said scheme, it is indisputable that in respect of anyone flat, the transaction with its purchaser has to be evidenced by the document executed and registered, only once, - being that referred to in section 4 of MOFA as Agreement to Sell, - mandated to be in the prescribed FORM V.  To be precise, the law, by no logic, envisages a separate and second document of sale in respect any of the flat purchasers, permitting promoter to sell, and flat taker to purchase, any such specially designated area,- such as for car parking,- being essentially part and parcel of CAF.

As such, what necessarily must follow is that the very idea of the promoter to sell separately stilt car parking is palpably misconceived, and unlawful; as such, is liable to be flawed, and failed, as a non-starter. 

5. The observation in the judgment, that seems to have triggered and been the root cause for the surrounding controversy, as found in paragraph 40 of the SC judgment, reads:

“It is, thus, clear that the PROMOTER HAS NO RIGHT TO SELL `stilt parking spaces' as these are neither `flat' nor appurtenant or attachment to a `flat'. (FONT supplied)

This is an observation, -as commented elsewhere and available in public domain, -which is in the nature of an obiter dictum; as clearly distinct from the concept of ratio decidendi (precedent). These concepts are to be found lucidly explained in the judgment in re. Girnar Traders vs State Of Maharashtra & Ors., Dt. 11 January, 2011 (-Author: S Kumar J).

The post judgment events go to show that it is the mentioned essentially clinching aspect which has been blatantly over sighted; so much so, a chaotic situation has been impudently and ignorantly brought about.

6. What really could have been import or intended to be conveyed by the referred court’s observation is any body’s guess.  Be that as it may, giving due respect to the wisdom of the judiciary, in no manner offending it, the only way to reconcile the said observation might be to take it to mean that a promoter selling units of a building as ‘flats’, hence governed by MOFA has no right to sell SEPARATELY any portion of the building complex necessarily forming part and parcel of CAF. On the flipside, any flat taker who knowingly or otherwise, ventures (OR HAS VENTURED) to enter into any such transaction as aforesaid, - being prima facie unlawful, - with a promoter, will be doing so at his own peril.

KEY NOTE

The only other point of relevance requiring or deserving, an independent consideration,- if at all, for sake of completeness of a study,- is this: Whether, or not, a flat taker, who has paid/or intending to pay a price for an area demarcated for car parking and acquire (d) it in terms of the Agreement in FORM V, has an independent right of occupation and enjoyment of such area, to the exclusion of the rest (i.e. co-purchasers). That is, same way as but no different from the exclusive right (of occupation and enjoyment) of his flat.

Though briefly raised and discussed but not gone into in depth is the significance of the conceptual, so also intended, meaning of the word ‘limited’ used in more than one context in MOFA, in FORM V as well.

There is no gainsaying that requires an analytical study of the subject, with a view to forming an opinion on what can be regarded as the view or better view in the matter.

Disclaimer: The foregoing brief analysis is intended to convey own thoughts and viewpoints, based on an independent study of the covered limited aspects. Welcome to share, should anyone, especially a competent law expert in field practice, entertain any doubt or has a better view to offer after an independent study, so as to serve the objective of common good.  

V Swaminathan B.Sc., B.L., FCA