A bat­tle royal for own­er­ship rights

A much-an­tic­i­pated case which could set a bench­mark for res­o­lu­tion of ‘com­mon area’ dis­putes in res­i­den­tial projects is com­ing up for a fi­nal hear­ing in the Supreme Court on July 23

HT Estates - - NEWS - Jee­van Prakash Sharma

Mil­lions of apart­ment owners are wait­ing with bated breath for the Supreme Court’s ver­dict on a case in­volv­ing realty ma­jor DLF and about 750 apart­ment owners in its pres­ti­gious Sil­ver Oaks project in Gur­gaon, slated for fi­nal hear­ing on July 23, 2013. DLF had ap­pealed to the apex court for a so­lu­tion fol­low­ing a Pun­jab and Haryana High Court ver­dict on Septem­ber 9, 2009, up­hold­ing the Sil­ver Oak res­i­dents’ plea to have school, shops and com­mu­nity cen­tre as part of com­mon ar­eas and fa­cil­i­ties in the project.

Be­tween 1981-1982, the direc­tor gen­eral, town and coun­try plan­ning, Haryana, granted li­cences to DLF to de­velop 130.62 acres, com­pris­ing 14.75 acres for group hous­ing and 115.87 acres for plot­ted colony. Ac­cord­ing to the group hous­ing build­ing plans which were fi­nalised in 1995, DLF got the ap­proval for con­struct­ing res­i­den­tial blocks, EWS flats, park­ing, shops, com­mu­nity cen­tre, two pri­mary schools etc among other fa­cil­i­ties. How­ever, since the realty ma­jor ap­plied for a com­ple­tion cer­tifi­cate on April 15, 1996, but didn’t file the deed of dec­la­ra­tion (See Five Points) within 90 days af­ter ob­tain­ing the cer­tifi­cate, the res­i­dents of Sil­ver Oaks ap­proached the Pun­jab and Haryana High Court seek­ing a di­rec­tion to file the said dec­la­ra­tion.

Dur­ing the pen­dency of the pe­ti­tion, the de­vel­oper filed the deed on April 19, 2001, which was chal­lenged by the apart­ment owners as it did not in­clude cer­tain ar­eas such as schools, shops, com­mu­nity cen­tres as com­mon ar­eas and fa­cil­i­ties and de­prived the apart­ment owners their rights. “When a de­vel­oper files a deed of dec­la­ra­tion, the law re­quires him to de­mar­cate the ‘apart­ment’, ‘com­mon ar­eas and fa­cil­i­ties’ and ‘re­stricted com­mon ar­eas and fa­cil­i­ties’. The flat owner gets ex­clu­sive rights over the apart­ment and un­di­vided in­ter­est in com­mon area fa­cil­i­ties (the per­cent­age is spec­i­fied in the dec­la­ra­tion). DLF did not in­clude schools, shops and com­mu­nity cen­tre in the com­mon ar­eas in the dec­la­ra­tion and claimed ex­clu­sive own­er­ship of th­ese fa­cil­i­ties which by rights be­long to the res­i­dents. As far as the law is con­cerned, there is no am­bi­gu­ity over the fact that schools, shops and com­mu­nity cen­tre are a part of the com­mon ar­eas and fa­cil­i­ties,” says Amit Jain, direc­tor gen­eral, Fed­er­a­tion of Apart­ment Owners As­so­ci­a­tion.

The Pun­jab and Haryana High Court had ruled in favour of the res­i­dents of Sil­ver Oaks af­ter de­bat­ing whether the dec­la­ra­tion filed by DLF was con­clu­sive or could be ques­tioned and whether the area of pri­mary schools, shops and com­mu­nity cen­tres could be treated as com­mon area. In its rul­ing the HC had said, “The dec­la­ra­tion must cete­gorise the en­tire prop­erty into ei­ther apart­ments, com­mon ar­eas and fa­cil­i­ties or limited com­mon ar­eas and fa­cil­i­ties.”

Dis­miss­ing the al­le­ga­tions of all the res­i­dents, DLF had ar­gued in the HC that the dec­la­ra­tion deed it had filed was in con­so­nance with statu­tory pro­vi­sions of the Haryana build­ing laws. The con­tested ar­eas were not part of com­mon ar­eas and fa­cil­i­ties and were owned by the de­vel­oper, who could de­mar­cate it as com­mon area or sell it. DLF also cited the SC judg­ment in the DLF Qutab En­clave Com­plex Ed­u­ca­tional Char­i­ta­ble Trust vs State Of Haryana (2003) case and ar­gued that it was not un­der any obli­ga­tion (un­der the con­di­tion of li­cence as per the Haryana De­vel­op­ment and Reg­u­la­tion of Ur­ban Ar­eas Act 1975 or un­der the pro­vi­sions of The Haryana Apart­ment Own­er­ship Act 1983) to de­clare the con­tested ar­eas as com­mon ar­eas and fa­cil­i­ties.

Chal­leng­ing the HC judg­ment, DLF has raised sev­eral le­gal ques­tions on the va­lid­ity of the judg­ment, plead­ing that com­pelling it to cat­e­gorise the whole prop­erty into ‘apart­ment’, ‘com­mon ar­eas and fa­cil­i­ties’ and ‘limited com­mon ar­eas and fa­cil­i­ties’ was con­trary to the sec­tion 3 (f) of Haryana Apart­ment Own­er­ship Act 1983 which it­self did not com­pel the owner/de­vel­oper of a build­ing/prop­erty to di­vest its own­er­ship right in com­mu­nity and com­mer­cial fa­cil­ity de­vel­oped by it as part of its obli­ga­tion un­der the Haryana De­vel­op­ment and Reg­u­la­tion of Ur­ban Ar­eas Act 1975.

The res­i­dents then al­leged that the de­vel­oper had charged them money for su­per area for the con­struc­tion of com­mu­nity build­ings, shops, schools etc - and thus DLF could not claim ex­clu­sive rights over th­ese. Ac­cord­ing to them, both the 1975 act and 1983 act had clear pro­vi­sions for the de­vel­oper to de­clare apart­ment, com­mon ar­eas and fa­cil­i­ties and re­stricted com­mon ar­eas and fa­cil­i­ties.

Says an RWA mem­ber from a group hous­ing project, “If you see the Haryana Apart­ment Own­er­ship Act 1983, it says ‘com­mon prof­its means the bal­ance of all in­comes, rents, prof­its and rev­enues from the com­mon ar­eas and fa­cil­i­ties”. It means that the RWA will lease out shops and schools and earn prof­its on them. The act also states that ‘the com­mon prof­its of the prop­erty shall be dis­trib­uted among, and the com­mon ex­penses shall be charged to, the apart­ment owners ac­cord­ing to the per­cent­age of the un­di­vided in­ter­est in the com­mon ar­eas and fa­cil­i­ties.’ There is no am­bi­gu­ity in any­thing.”

He also said that as the de­vel­oper ob­tained a li­cense to con­struct res­i­den­tial apart­ments it could not sell com­mer­cial units such as shops and schools. ATS Greens Gau­tam Budh Na­gar Sec­tor 20 Sec­tor-25 Sec­tor-61 Sec­tor-62 Sec­tor-93 Sec­tor 82 Al­pha-I (Gr Noida) Delta-II (Gr Noida) Sec­tor 36 (Gr Noida) Sigma-4

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An RTI re­ply re­veals that in its first draft re­ply to be filed in the Supreme Court, the DGTPC Haryana had de­cided to in­clude schools, shops and com­mu­nity cen­tres in com­mon ar­eas and fa­cil­i­ties. Later it re­versed its stance

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