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.