District court earmarks builder’s boundary

PUNE: A district court here has held that a developer is legally obliged to make full disclosure of the development potential of a plot, which is a subject matter of an agreement with flat buyers. This includes aspects such as FSI available, already utilized and to be utilized.
The developer can’t start any additional construction on such plot after conveying it to the association of apartment owners, the court said.It held that such additional construction also can’t happen without prior consent.
District judge Jayraj D Wadane made these observations on December 19 while dismissing an appeal by Gera Developments Private Ltd against the temporary injunction granted by a joint civil judge senior division, against the construction of a third building on land conveyed to a housing society, Gera Emerald City in Baner.
The developer had constructed two buildings as part of the project and handed over possession of flats, besides, executing a registered deed of declaration conveying the land to the association of apartment owners and a registered deed of apartment declaring individual shares of unit holders.
Later, the developer started constructing the third building and the association challenged it in a suit on grounds that the developer had no rights over such construction without its consent.
The trial court had issued a temporary injunction and it was upheld by the district court, prompting the developer to move the Bombay high court, which remanded the matter to the district court for fresh adjudication.
Among other things, the developer argued that unit purchasers knew about the future construction, besides, a deed of declaration cannot be deemed as conveyance.
The court, however, cited Supreme Court rulings in relation to full and true disclosure by the developer and observed, “Prima facie at this stage.. inference is not possible that, there was an entire disclosure on the part of the promoter builder to the unit purchasers.”
It further ruled that pursuant to the deed of declaration, the interest in the land and the building along with respective apartments, were transferred in favour of respective unit purchasers of the association. Hence, at this stage, inference cannot be drawn that deed of declaration is not a conveyance deed, it said.