Ambawadi Apartments Owners Association & 9­Defendants

1. The present First Appeal has been filed by the appellant being aggrieved and dissatisfied with the impugned judgment and order rendered in Regular Civil Suit No.2521/1982 dated 31.03.1988 on the grounds stated in the memo of appeal. It is contended inter alia that the judgment and decree of the Court below are contrary to law and evidence on record. It is contended that the Court below has failed to appreciate and interpret

erroneously interpreted and applied the facts and the provisions of the Gujarat Ownership Flats Act, 1973 and thereby committed an error. It is contended that the Court below has failed to appreciate that as per Clause 11 of the agreement to the acknowledgment of the allottees and other members, there is clear and specific condition reserving rights of the terrace in favour of the appellant­association. It is contended that the Court below has erred in appreciating the provisions of Sections 18 to 41 of the Gujarat Ownership Flats Act, 1973 and also booklet at Exh.42. It is contended that the Court below has failed to appreciate that the public policy underlying the Act is required to be considered and the statutory provisions cannot be overlooked or ignored. In other words, it is contended that there is specific condition in the agreement that they have booked the flats of three floors and in future, if they want to construct, they are entitled to do so subject to the Rules & Regulations of the Government and Municipal Corporation. In other words, relying upon Clause 11 of the agreement, it is contended that the allottee of the respective flat/unit would not have any right to make use of the terrace and the plaintiff is entitled to display boards of advertisement of Neons Sign Board and take income thereof.

2. In the reply to the notice of motion, which has also been treated as reply­cum­written statement at Exh,28, it is contended that in the notice dated 12.07.1981 given by the plaintiff, the appellant­plaintiff has admitted the possession of the respondents and also use and occupation of the terrace by the respective defendants­respondents. There is a reference to some quarrel, which led to filing of NC complaint. It is contended that the appellant­plaintiff is the association, which has been registered as NTC and having purchased the land and developed 'A' & 'B' Block, the possession thereafter has been given to the respondent­ original defendants along with the terrace. It is contended that as the plaintiff had refused to sign and delivered the possession, the signatures were obtained containing such clause, which are interpreted erroneously.

3. Heard learned counsel, Mr.Yatin Soni for the appellant and learned counsel, Mr.S.M. Shah for the respondent nos.1 and 2.

4. Learned counsel, Mr.Soni has submitted that the Court is required to consider in this appeal whether Civil Court has right to say that Clause 11 of the agreement between the appellant association­original plaintiff and its members is not valid and/or illegal and against the public policy. Learned counsel, Mr.Soni submitted that in Suit filed by the plaintiff, such prayer could not be considered as defendant has not filed the said Suit. Learned counsel, Mr.Soni submitted that under the provisions of the Gujarat Ownership Flats Act, 1973, the allottees of the flats/units cannot be said to be owners. He submitted that in any case, the sale deed is not executed even with respect to each individual flat or unit. Learned counsel, Mr.Soni submitted that therefore, the land and the entire property vest in the appellant­plaintiff, who had purchased the land and, thereafter, developed it and allottees like the respondents are enjoying the possession or right under such agreement to sale between the parties. He submitted that on the basis of such agreement to sale the flat/unit in the building, can the respective unit/flat holders have title or ownership based on such agreement to sale? Learned counsel Mr.Soni submitted that under the provisions of the Transfer of Property Act, immovable property or right in the immovable property would not be transferred without the execution of the sale deed or any writing. He, therefore, strenuously submitted that mere an agreement to sale does not confer any right, title or interest or any ownership to the respective allottees, who are the members of the appellant association­original plaintiff. Learned counsel, Mr.Soni submitted that Section 18(f) of the Act has not been properly appreciated. He referred to the provisions of the Gujarat Ownership Flats Act, 1973 and pointedly referred to Section 18(f) of the said Act. He submitted that the plaintiff is the owner of the entire property as the land has been purchased, thereafter, developed it. As on today, it belongs to the appellant association­ plaintiff. He submitted that the defendants, who are the allottees of flats or the members of the association are enjoying the possession and/or any right in such units/flats pursuant to the agreement to sale between the appellant and the respective allottee as there is no sale deed. Therefore, learned counsel, Mr.Soni submitted that if the ownership has not been transferred or title in the property is still with the appellant­ plaintiff, it has every right to make use of the same and the allottees of the flats cannot claim any right on the terrace as they are allotted pursuant to such agreement to sale the respective unit of the flat only. Again, he referred to the agreement to sale entered into between the appellant association­plaintiff and the respondents­respective allottees, which is produced at Exh.59 and submitted that according to this agreement, there is specific condition in the agreement and the allottees are given the flats and there is specific marking with red colour in the map. It is, therefore, the case of the appellant­plaintiff that with full knowledge of all terms and conditions including the terms and conditions with regard to the terrace right of the appellant­plaintiff when the respondents­original defendants have purchased and accepted the allotment of the flats, now they cannot join the issue. It is specifically contended that the allottees are given the possession of only red mark flat portion in the plan supplied with the agreement. In the agreement, there is a specific term clearly stating that the allottees would have no right over the terrace. Learned counsel, Mr.Soni referred to this aspect and also deposition of witnesses, who have been examined at Exh.96 & 100, who have deposed that the agreement is correct and as per the terms and conditions of the agreement/contract, when the plaintiff have retained the right, title or interest in the terrace, which is supported by these witnesses also, the respondents­original defendants cannot claim any right. He submitted referring to Section 18(1)(2) of the Act that the terrace right would suggest the above portion of the premises is the terrace. Learned counsel, Mr.Soni submitted that Gujarat Ownership Flats Act, 1973 does not prohibit the sale and transfer with terrace right. He referred to the dictionary for the meaning of word floor, ceiling, roof etc. He submitted that the portion that is not a common facility has referred to in Section 18(2) of the Act.

5. Learned counsel, Mr.Soni submitted that for making any claim in such property, the title has to be with the person, who is claiming and Transfer of Property Act requires that the title in property can be transferred only in the manner provided in the Act. He, therefore, submitted that unless there is a document like sale deed, the property cannot be said to have passed nor it can be said to have sold unless there is a registered sale deed. Learned counsel, Mr.Soni submitted that admittedly there is no sale deed. Learned counsel, Mr.Soni submitted that admittedly there is no sale deed executed between the appellant and the respondents, who are the allottees and they are enjoying the possession only pursuant to the agreement to sale.

6. Learned counsel, Mr.Soni therefore submitted that when the parties have entered into an agreement with knowledge, they are governed by the terms of the agreement or the contract. He submitted that Class 11 of the agreement was specifically made with the knowledge of the respondents­original allottees and they have accepted such terms and conditions and it has not been disputed. Therefore, learned counsel, Mr.Soni submitted that the Court below has failed to appreciate this aspect and on the ground of public policy, it has committed an error in interpreting these provisions of the agreement. It was submitted that if any of terms and conditions was not acceptable then the parties would have altered it, but the respondents having accepted cannot now dispute on such conditions. He submitted that Clause 11 of the agreement was required to be struck down and the interpretation has been made but no issue has been framed and, therefore, the Court below has exceeded the jurisdiction. Learned counsel, Mr.Soni submitted that as it is a matter of agreement between two parties, there is no question of any public policy.

7. Learned counsel, Mr.S.M. Shah submitted that the Court would normally refuse to go behind the terms of the agreement and the findings would not be disturbed unless the findings given by the Court below are contrary to the relevant record and material. He submitted that Suit has been filed for injunction and Section 43L of the Specific Relief Act provides that such injunction could be granted and no sale deed is necessary. He submitted that merely because the sale deed is not executed, it does not mean that no right has flown or accrued in favour of the allottees under the agreement to sale. Learned counsel Mr.Shah submitted that admittedly the appellant­plaintiff as an association has organized and constructed the flats, which have been allotted to the respondents­original defendants by said agreement to sale for each individual flat or unit with necessary common amenities and facilities and possession has also been handed over. Learned counsel Mr.Shah submitted that therefore, in part performance of the contract or agreement to sale, when the possession has been parted as required under Section 53A of the Transfer of Property Act, the submission made by other side that the respondents­original plaintiff­allottees have no right, title in the property or the land except the unit/flat allotted to the members is misconceived.

8. Learned counsel, Mr.Shah referred to the agreement, more particularly, Clause 9 read with Clause 11 and tried to emphasize with regard to the 'use of common' and 'non exclusive'. He submitted that as per this agreement, what has been allotted is flat/unit to respective members with exclusive right of unit or flat with amenities and facilities to be enjoyed in common. He, therefore, submitted that parking or staircase or terrace may not be mutually exclusive allotted but it would form part of common amenities and facilities to be used in common by the members. He submitted that the submission made with regard to the terrace right that the appellant­plaintiff has not sold any such right as per the agreement to sale is required to be considered on the basis of the material and evidence. Learned counsel, Mr.Shah submitted that though it has been contended that the allottees have agreed and accepted with the knowledge the terms and conditions and, therefore, now they are estopped from raising any issue is required to be considered in light of the facts and the background of the case. It is required to be noted that ceiling of one flat would be a floor of the unit/flat, which is on the next floor and that is how even the terrace is a roof or ceiling for the flat, which is allotted to the respective members and it cannot be said that there is no right in respect of such ceiling or the terrace. Therefore, learned counsel, Mr.Shah submitted that considering the submission that as the sale deed is not executed, there is no right in favour of the respondents and they are enjoying only pursuant to the agreement to sale cannot be accepted. In fact, when the possession has been given with the aforesaid agreement to sale in part performance of the agreement, the allottees or the members have every right as a member of the association including the proportionate and undivided share in the land in question to be used in common as in the entire flats, which have been constructed by forming association and the ownership of the land would be collective and there will be an undivided share of each unit/flat holder. He, therefore, submitted that the present Appeal may not be entertained and the judgment and order given by the Court below is just and proper.

9. In view of these rival submissions, it is required to be considered whether the present Appeal can be entertained or not.

10. Though the submissions have been made at length referring to the records, a close scrutiny of the material would reveal that the controversy is relating to the rights over the terrace of the two buildings constructed by the appellant­plaintiff as an association/organizer of which the respondents­original defendants are the members.

11. The first contention, which has been made referring to the Transfer of Property Act and the Gujarat Ownership of Flat Act is required to be considered. The Gujarat Ownership of Flat Act has been brought into force with the purpose of such object of making the right of each flat/unit holder. Sections 17 and 18 refer to the declaration on which the reliance is placed by learned counsel, Mr.Soni has to be read in context with the provisions of the Act. As rightly submitted, in such organization like the appellant­plaintiff, the members are forming the association for the purpose of development and construction of the flat/unit which is then allotted to each individual members exclusive for the use with other amenities and facilities to be used and occupied in common and not exclusively. The preamble of the Gujarat Ownership of Flat Act refers to this aspect that what has been sold by whatever document is unit or the flat with common amenities and facilities as every member or the flat holder will have undivided share in the land over which the entire structure of building consisting of different flats or the units have been constructed. Association, which is formed, is a collective body, which is giving shape to the intention of the members and after having finalized and constructed flats or the units, the members are allotted the flats or the unit respectively subject to the terms and conditions, which they enjoy and occupy exclusively. However, the flat or unit which they enjoy or occupy has necessary other common amenities and facilities like staircase, parking, compound etc. and every member or the flat holder has undivided share in the land. The submissions which are sought to be made that the land is not given and the unit holder or flat holder like the defendants are occupying pursuant to only agreement to sale as flat or unit only and, therefore, they have no say with regard to the other part including the terrace is misconceived. Even if under misconception or some signatures are obtained, it would not change the position in asmuchas the clause in the agreement to sale and the entire agreement to sale has to be read as a whole. It is well accepted principles of interpretation that the document like the agreement to sale has to be read as a whole. Further, the text of the document is required to be read in the context of the fact or the relevant provisions of law like the Gujarat Ownership Flats Act, 1973 and the Transfer of Property Act. Therefore, when the respondents, who are unit holders, have been allotted flats pursuant to the agreement to sale and they are enjoying and occupying the possession of such flats with common amenities and facilities including terrace, it cannot be said that merely because they are using, no right can be claimed as per the agreement. In fact, Clause 9 read with Clause 11 of the agreement has to be read together and whether there is a reference to use in common. Further, a close look at the entire agreement to sale, it would make it clear that the respondents, who are the flats holders, have been put in possession in part performance of this agreement to sale and they have been using the unit i.e. flat along with common amenities and facilities like staircase, terrace, compound, parking etc. Therefore, it has to be read in context of the provisions of the Gujarat Ownership Flats Act, 1973, which provides for such facilities to be enjoyed as 'use in common' and 'not exclusively'.

In other words, it pre­supposes that when the unit holder/flat holders is allotted a flat, he will have a right of enjoyment of common amenities and facilities like compound, staircase and other facilities, which may be there including the terrace in common and nobody can claim as a matter of right for exclusively right thereof. The Gujarat Ownership Flats Act, 1973 defines any area and facilities has provided in Section 18(1)(f) as under :­ “(f) “common areas and facilities” unless otherwise provided in the Declaration or lawful amendments thereto, means­

(1) the land on which the building is located;

(2) the foundations, columns, girders, beams, supports, main walls, roofs, halls, corridors, lobbies, stairs, stair­ways fire­escapes and entrances and exists of the buildings;

(3) the basements, cellars, yards gardens, parking areas and storage spaces;

(4) the premises for the lodging of janitors or persons employed for the management of the property;

(5) installations of central services, such as power, light, gas hot and cold water, heating, refrigerations, air­conditioning and incinerating;

(6) the elevators, tanks, pumps, motors, fans, compressors, ducts and in general all apparatus and installations existing for common use;

(7) such community and commercial facilities as may be provided for in the Declaration; and

(8) all other parts of the property necessary or convenient to its existence, maintenance and safety, or normally in common use;”

12. Moreover, Section 21(1) of the said Act refers to common areas and facilities and provides that “Each apartment owner shall be entitled to an undivided interest in the common areas and facilities in the percentage expressed in the Declaration. Such percentage shall be computed by taking as a basis the value of the apartment in relation to the value of the property; and such percentage shall reflect the limited common areas and facilities.”

13. Further, Section 21(3) provides that “The common areas and facilities shall remain undivided, and no apartment owner or any other person shall bring any action for partition or division of any part thereof, unless the property has been removed from the provisions of this Part as provided in Sections 29 and 37. Any covenant to the contrary shall be null and void.”

14. Word 'Declaration' has also been defined and the Declaration has to be made with regard to common amenities and facilities. Therefore, the submission, which have been made by learned counsel, Mr.Soni, is required to be appreciated in context of this specific statutory provisions along with the evidence as to whether in the declaration when it is claimed that the terrace would be common amenities and facilities, whether there could be any restriction by a clause in the agreement.

15. It is required to be mentioned that learned counsel, Mr.Soni has referred to the Oxford Dictionary for the purpose of meaning of terrace, which reads “Terrace. 1. Raised level place, natural or artificial, esp. raised walk in garden or level space in front of building on sloping ground; (geol) horizontal shelf or beach bordering river, lake, or sea. 2. Row of houses on raised site or on face of rising ground; row of houses of uniform style built in one block. ~ v.t. Form into, furnish with, terrace(s).'

16. Again, the word 'roof' is defined as upper covering the use of the building. Meaning thereby, when the flat or the unit is constructed, obviously it need to have roof as a ceiling. In multi­storied building like the flats consisting of more than two levels, a ceiling or roof of one unit or the flat would be a flooring for the flat or the unit at the next higher level and that is why while interpreting the provisions of the Gujarat Ownership Flats Act, 1973, regard must be had to such broad preposition. It is in this background, the claim made by the appellant­ plaintiff based on narrow interpretation of Clause 11 of the agreement to sale that the right has been reserved by the appellant­plaintiff for further use by them, which cannot be objected by the unit or flat holders cannot be believed or accepted. In fact as discussed above, each flat holder or unit holder has a right of enjoyment in common facilities like terrace or the compound and in fact, he has undivided share in the land and has also right in common use such terrace in common. Therefore, when the submission is made that the respective unit holder is given a separate unit or flat only and he cannot have any right beyond that itself is inconsistent with the statutory provisions under the Gujarat Ownership Flats Act, 1973 or under the Cooperative Societies Act. Any such organization or association, which is formed by the members for the development of such residential flats, the association, which is collectively representing the members or the unit holders would develop and construct the super structure on the land and each individual member or flat holder is allotted a unit or flat exclusively along with common amenities and facilities to be enjoyed by them in common. Further undivided share or right in the land on which super structure is constructed would remain and it is on the basis of such right or undivided share in the entire land or the property, on which, the super structure is constructed, the unit holders or the allottees of the flats are entitled to use and posses the common amenities and facilities meant for all such members like the staircase, terrace, garden, parking, compound etc. Therefore, when the members themselves have a right under the statute, it cannot be restricted or claimed by the clause or the wordings in agreement that the members will not have any right to claim and enjoy the terrace in common and the appellant association or the builder or the organizer can have exclusive right in respect of such super structure or the buildings to make use of the terrace of such building or the super structure which itself belonged to the unit holders or the flat holders collectively. As stated above, the portion or the roof is ceiling to the building and it would be forming a ceiling of the flat at the last floor, which cannot be claimed as an exclusive property or exclusive right for use by anybody either members or the even Organizer or such association like the appellant­plaintiff that they have right to use make such right of terrace or building for their own commercial purpose and the right is denied to the independent flat holder. If that is permitted, it would also amount to negating the right of flat or unit holder to enjoy the amenities and facilities, which is allotted to them in asmuchas if the terrace is permitted to be used, it could be used for the commercial purpose like restaurant or any other purpose where there is ingrace or outgrace of the people, which in turn would create nuisance for the allottees of the flats and it would affect their right of peaceful enjoyment of the flat or the unit allotted to them. It may have other repercussion like security, privacy, maintenance etc. It is in this background as rightly discussed by the Court below referring to Clause 11 in the agreement that such a right cannot be made as otherwise it would be against the public policy. There is specific reference to Section 18(f) of the Gujarat Ownership Flats Act, 1973 and in Part­II, “common areas and facilities, which have been defined and reproduced.” Sub clause (2) of Section 18(f) provides that “the foundations, columns, girders, beams, supports, main walls, roofs, halls, corridors, lobbies, stairs, stair­ways fire escapes and entrances and exists of the building.”

17. The word roof as discussed above is a ceiling and it would be covered by definition of common areas and facilities and, therefore, the terrace would certainly form a part of the flat, which is allotted and sold to the respective flat holders or unit holders on ownership basis. Again it is well settled that if any right is claimed contrary to the statutory provisions or the public policy, clause in the agreement has to be read and interpreted in background of such policy. Therefore, as required under Clause (f) of Section 18, there may not be any specific recitals or the declaration that by itself would not deny the right to independent flat holder or unit holder to occupy and enjoy the common amenities and facilities in common. It is in this background, the Court below has after considering the provisions and also after considering the public policy as well as underlying object of the Gujarat Ownership Flats Act, 1973 found that any such provisions or the clause relating to the terrace is required to be struckdown as an unenforceable and it is inconsistent with the provisions of the Act.

18. It is required to be mentioned that if the statutory provisions of the Gujarat Ownership Flats Act, 1973 with underlying object of the Gujarat Ownership Flats Act, 1973 is perused, the submissions made with regard to the title in the immovable property based on the provisions of the Transfer of Property Act are without any merit. The provisions of the Transfer of Property Act would have to be considered in the background of the facts. No doubt the Transfer of Property Act provides that for the transfer of title in any immovable property, it has to be through writing like sale deed and Gujarat Ownership Flats Act, 1973, which is a special statute created for providing the respective rights of the parties providing about the manner in which the rights and the title in property in the super structure can be transferred or enjoyed. The transfer of property in the flat or unit, which is a unit in the entire building or the super structure constructed on the land in which the unit holder will have an undivided share including the right of common amenities and facilities along with the exclusive right to enjoy the unit or flat. The Transfer of Property Act would be applicable for the transfer of the title in the property but for regulation of such right or providing mutually exclusively or common facilities to be enjoyed in common, Gujarat Ownership Flats Act, 1973 provides for such situation. The submission made by learned counsel, Mr.Soni that because the sale deed is not executed and there is agreement to sale, the title in the property is not transferred as per the provisions of the Transfer of Property Act is without any merit as Section 53A of the Transfer of Property Act provides for the part performance and the possession of the immovable property in part performance of the agreement to sale or the contract.

19. Therefore, when admittedly unit or flat has been given to the respective unit holder along with the possession and it can be said to be part performance of the agreement to sale and merely sale deed is not executed in respect of that particular unit, it does not make any change so far as the right of the flat holder to enjoy common amenities and facilities are concerned as even after the sale deed, it would refer to the exclusively right qua particular unit or the flat to be enjoyed with common amenities and facilities, in which, the flat is situated or is a part of the super­structure. Therefore, it does not have any bearing and the submission that without such sale deed, no right, title or interest can be claimed by the respondents­ original defendants cannot be accepted.

20. Therefore, this Court is in broad agreement with the reasons given and the conclusion arrived at by the Court below, which does not call for any interference in the present Appeal. Therefore, the present First Appeal deserves to be dismissed and accordingly stands dismissed. Interim relief, if any, stands vacated.

/patil

Sd/­

(RAJESH H.SHUKLA, J.)