The Land classified as Common Area belongs to the Flat Owners and cannot be sold by the Builder: Madras High Court

The Madras High Court has held in the recent judgment Abbotsbury Owners’ Association v. The Member Secretary[1] that Builder cannot take advantage of the mistake in the calculation of UDS (Undivided Shares) and make the flat purchasers pay for the unsold portion of the UDS. The Flat Owners association had contended that the disputed area was shown as a common facility in the non-FSI construction. The builders contended that as the ownership of the non-FSI area was not given to flat owners, they could not claim it, however, the Madras High Court did not agree with this contention of the builders.

3^rd Respondent in the present case had obtained a sanctioned plan for the construction of 77 residential flats in a piece of land that was abutting Sir CP Ramaswamy Road, Alwarpet, Chennai in 2001. The planning permission was obtained on 27.08.2001 and the 3^rd respondent sold the apartments along with the necessary undivided share of the land. Further, the builder constructed a building in non-FSI Area and then, built-up area of 200000 sq. Ft. was handed over to 77 flatowners of the building and it was claimed that in the handing over agreement, all the flat owners agreed that non-FSI building was not part of UDS, and that the builder had rights to that.

As a consequence of this, the builder sold the non-FSI part to the second respondent, in response to that,the Association of Flat Owners filed a petition claiming that there has been a violation of the sanctioned plan. Chennai Metropolitan Development Authority also initiated action.

In response to that, Builder i.e., Respondent No. 3 and the purchaser Respondent No. 2 in present proceedings, filed writ petitions. In the course of proceedings that ensued, respondent no. 2, who has purchased non-FSI area had filed an affidavit promising to restore the building to its rightful usage.

The Division Bench ruled:

“4. ………. It is made clear that after restoration, the petitioners are directed to intimate the same to the respondent and it is for the respondent to inspect and verify the same………”

For Non-Compliance with the above order, a writ petition was filed by the association of flat owners. A counter-affidavit was filed by the 2nd respondent. It stated:

“11. …………However, the time sought for presently and as mentioned supra will be strictly adhered to and in any event the restoration of the building to its original usage as non FSI as sanctioned would be restored on or before 31.01.2015.”

Division Bench granted time, although after non-compliance with the said order; Chennai Metropolitan Development Authority issued a de-occupation notice to the tenant as well as the owner, following which, Writ Petition Nos. 7183 & 7199 of 2015 were filed and an application in MP No. 1 of 2015 was filed to seek an extension of time in handing over the building. Through an order dated 12.01.2017; Division Bench passed an order directing the builder and owner to indicatea time that will be required to restore the building to its original state. But at the same time, Respondent No. 3 tried to file an application under Section 49 of the Tamil Nadu and Country Planning Act.

The present instant petition is filed by the Association of Flat Owners, demanding that the possession of disputed land must be handed over to them. After counter affidavits were filed, in rejoinder, Association mentioned that there have been deliberate violations of the undertakings that Respondents 2 and 3 had filed before this court earlier.

Even the counsel on behalf of the Association had contended that previously, both in W.P.Nos.41786 of 2006 etc., batch and in W.P.No.19374 of 2014; the respondents, builder and purchaser had given unequivocal undertakings that disputed land will be restored to its original use. The court observed that the contentions of the 3^rd respondent that there was a genuine mistake in calculating UDS area cannot be believed by the court based on the fact that 3^rd respondent is not a novice but a prominent builder.

The Court observed that the builder repeatedly maintained that purchasers did not pay for the remaining UDS, but the court found it unable to accept as no promoter charges separately for building and the land. The Court held that this was a deliberate wrongdoing on part of the builder. The Court held that the flat owners will be entitled to the entire UDS as calculated by the 3^rd Respondent and presented in a tabular format and attached to the affidavit filed by the authorized signatory of the 3^rd respondent on 28.11.2022.

The Court took into consideration the position of the 3^rd respondent as the builder who had built several apartment complexes in the city. The third respondent filed an affidavit on 28.11.2022 stating that it would arrange for the execution of the sale deed of remaining UDS, upon the payment of consideration and additional stamp duty. Court held that builder cannot take advantage of the mistake in calculations and make purchasers pay for it. The court observedthat by reducing the UDS, land shown in conveyance was also reduced and consequently the revenue of government was also reduced.

[1]W.P.No.5765 of 2020