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Ag­grieved by the GDA’s or­der, the devel­oper had then ap­pealed to the Al­la­habad HC to set it aside. The HC then clubbed this pe­ti­tion with those of other group hous­ing projects in Indi­ra­pu­ram that were em­broiled in vi­o­la­tion is­sues and, on Novem­ber 14, 2013, gave a land­mark ver­dict which in­ter­preted the UP Apart­ment Act in favour of the home­buy­ers.

RWAs were the gain­ers

The HC up­held the pro­vi­sion of the UP Apart­ment Act which said that once a group hous­ing project was com­plete, the devel­oper would ob­tain com­ple­tion cer­tifi­cate, give pos­ses­sion of the apart­ments to the home­buy­ers, help form the RWA and then hand over com­mon ar­eas and fa­cil­i­ties to the as­so­ci­a­tion.

“As far as FAR is con­cerned, Sec­tion 4 (4) of the UP Apart­ment Act states that once the devel­oper dis­closes plans and spec­i­fi­ca­tions to home­buy­ers and signs a writ­ten agree­ment with them, he can’t make any changes in the build­ing plans with­out the con­sent of the home­buy­ers. The high court up­holds the pro­vi­sion too,” says Harsh­vard­han, an RWA of­fice-bearer of eHomes.

The HC also in­ter­preted a pro­vi­sion of the act which says that once the project is com­plete, a devel­oper can pur­chase addi- tional FAR with the con­sent of the ma­jor­ity of res­i­dents in a group hous­ing project and that the apart­ment own­ers will share the ben­e­fits from this ad­di­tional FAR. “FAR util­i­sa­tion will also be sub­ject to the con­sent of the apart­ment own­ers,” the Al­la­habad HC held while in­ter­pret­ing the UP Apart­ment Act 2010.

Builders ap­proached SC

Un­sat­is­fied with the HC rul­ing, Des­ig­narch then ap­proached the SC, ar­gu­ing that “the HC ven­tured to ad­ju­di­cate on the is­sues not raised/in­volved in the suit be­fore it, the most sig­nif­i­cant (such is­sue) be­ing with re­gard to the rights over the ad­di­tional FAR re­tained by the devel­oper for fur­ther de­vel­op­ment or pur­chased by the devel­oper from the mu­nic­i­pal au­thor­ity sub­se­quent to de­vel­op­ment/con­veyance of apart­ments to in­di­vid­ual buy­ers.” The builder also ar­gued that the HC had er­ro­neously held that “The FAR or any ad­di­tional FAR is a prop­erty, ap­pended to rights in the prop­erty on which the build­ing is con­structed, and is thus a prop­erty in which the apart­ment own­ers have in­ter­est by virtue of the pro­vi­sions of the UP Apart­ment Act, 2010. The pur­chase of ad­di­tional FAR is not per­mis­si­ble to be ap­pro­pri­ated by the pro­moter with­out any com­mon ben­e­fits to the apart­ment own­ers. The con­sent of the apart­ment own­ers ob­tained by res­o­lu­tion in the meet­ing of the apart­ment own­ers by ma­jor­ity will be nec­es­sary for pur­chas­ing ad­di­tional FAR. Its util­i­sa­tion will also be sub­ject to the con­sent of the apart­ment own­ers.”

Sil­ver Oaks ver­sus e-Homes

En­cour­aged by the SC judg­ment in the mat­ter of Sil­ver Oaks So­ci­ety in Gur­gaon, which gives builders rights over com­mu­nity and com­mer­cial fa­cil­i­ties, Mukul Ro­hatgi had at­tempted to con­vince the court that the same was ap­pli­ca­ble in UP too.

How­ever, se­nior coun­sel Ra­jeev Dhawan and SK Pal, on be­half of e-Homes RWA, said that the UP Apart­ment Act and Haryana Apart­ment Act were markedly dif­fer­ent be­cause the lat­ter de­fined ‘com­mon area and fa­cil­i­ties’ very dif­fer­ently.

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