Supreme Court of India
DLF LIMITEDversusMANMOHAN LOWE AND OTHERS
- Citation
- 2013 INSC 820
- Decided
- 10 December 2013
- Disposal
- Appeal(s) allowed
- Bench
- K S RADHAKRISHNAN
Holding
The colonizer may, at its discretion, include or exclude community and commercial facilities in the declaration; apartment owners have only a user right over such facilities and the competent authority cannot entertain objections to the declaration on that ground.
Summary
The apartment owners of Silver Oaks Apartments filed a writ petition seeking to quash DLF Limited's declaration under the Haryana Apartment Ownership Act, alleging that the declaration omitted certain community and commercial facilities as "common areas and facilities". The High Court held that the owners were entitled to an undivided interest in those facilities and directed the DTCP to consider their objections. On appeal, the Supreme Court examined the interplay between the Apartment Act and the Haryana Development and Regulation of Urban Areas Act, noting that Section 3(f)(7) of the Apartment Act gives the colonizer discretion to include or exclude community and commercial facilities, which are governed by Section 3(3)(a)(iv) of the Development Act. The Court held that such facilities are meant for the benefit of the entire colony and apartment owners are entitled only to a right of user, not an undivided interest, and the competent authority cannot entertain objections to the declaration on this ground. Consequently, the High Court’s direction to the DTCP was erroneous and the writ petition was dismissed.
Issues considered
- The colonizer's obligation under Section 3(f) of the Haryana Apartment Ownership Act to include community and commercial facilities in the statutory declaration.
- Whether apartment owners are entitled to an undivided interest in community and commercial facilities covered by Section 3(3)(a)(iv) of the Development Act.
- The scope of discretion granted by Section 3(f)(7) of the Apartment Act in relation to the facilities mentioned in the Development Act.
- Whether the competent authority under Section 3(i) of the Apartment Act can entertain objections to the declaration concerning those facilities.
- Whether the High Court erred in directing the DTCP to decide the apartment owners' objections.
Legislation cited
- Development Rules, 1976s. Rule 11
- Haryana Apartment Ownership Act, 1983s. 11(2), s. 3(f), s. 3(i), s. 6
- Haryana Development and Regulation of Urban Areas Act, 1975s. 2(d), s. 3(3)(a)(iv)
- Haryana Development and Regulation of Urban Areas (Management) Act, 2003
- Registration Act, 1908
Subjects
Apartment ownershipCommon areas and facilitiesColonizerDeclarationCommunity and commercial facilitiesUser rightHaryana Development ActCompetent authorityUndivided interest
Judgment
[2013] 16 S.C.R. 979
DLF LIMITED A
v.
MANMOHAN LOWE AND OTHERS
(Civil Appeal No. 10930 of 2013)
DECEMBER 10, 2013
B
[K.S. RADHAKRISHNAN AND A.K. SIKRI, JJ.]
Urban Development - Haryana Apartment Ownership
Act, 1983 - ss. 3(i), 3(f), 11 (2) - Haryana Development and
Regulation of Urban Areas Act, 1975- ss. 3(3)(a)(iv) - Rights C
of the apartment owners vis-a-vis the colonizers - Apartment
owners filed writ petition. seeking writ of certiorari to quash
declaration filed by appellant-colonizer, on the ground that the
same was not in conformity with s.3(f) of the Apartment Act
since the appellant failed to include certain areas of the D
complex as "common areas and facilities" within the
declaration, thereby effectively depriving the apaltment
owners of their rights over the same - High Court held in
favour of the apartment owners - On appeal, held: In a given
case if the developer does not provide common areas or E
facilities like corridors, lobbies, staircases, lifts and fire
escape etc. the Competent Authority can look into the
objections of the apartment owners but when statute has given
a discretion to the colonizer to provide or not to provide as
per s.3(f)(7) of the Apartment Act the community and F
commercial facilities referred to in s. 3(3)(a)(iv) of
Development Act, no objection could be raised by the
apartment owners and they cannot claim any undivided
interest over those facilities except the right of user - High
Court erred in directing the DTCP (Director, Town and Country G
Planning) to decide the objections of the apartment owners
with regard to the declaration made by the appellant-colonizer.
The Apartment owners of Silver Oaks Apartments,
DLF Qutub Enclave, Phase-1, Gurgaon, filed writ petition
979 H
980 SUPREME COURT REPC~TS [2013] 16 S.C.R.
A seeking a writ of certiorari to quash the declaration dated
19.04.2001 filed by the appellant-colonizer, on the ground
that the same was not in conformity with Section 3(f) of
the Haryana Apartment Ownership Act, 1983 since the
appellant failed to include certain areas of the complex
B as "common areas and facilities" within the declaration,
thereby effectively depriving the apartment owners of
their rights over the same.
While the Apartments owners maintained the stand
C that "community and commercial facilities", like providing
community centre, schools, shops etc., would fall within
the statutory definition of "common areas and facilities"
under Section 3(f) of the Apartment Act, the colonizers
maintained the stand that it can be so only if the colonizer
has provided so in the statutory declaration filed by it
D under Section 3(f) of the Apartment Act.
The High Court held that the apartment owners are
entitled to undivided interest in common areas and
common facilities under Section 6 of the Apartment Act
E and would be vitally affected if those areas are not
declared as common areas. The High Court also held,
inter alia, that the competent authority under Section 3(i)
of the Apartment Act is under an obligation to decide the
objections of the apartment owners to the declaration
F filed by the colonizer-appellant.
Allowing the appeal, the Court
HELD:1. The expression "colonizer" is defined
under Section 2(d) of the Haryana Development and
G Regulation of Urban Areas Act, 1975 (Development Act).
As per Section 3(3)(a)(iv) of the Development Act obliges
the colonizer to construct at his own cost schools,
hospitals, community centers and other buildings on the
lands set apart for that purpose, or also can get them
H constructed by any other institution or an individual, at
DLF LIMITED v. MANMOHAN LOWE AND OTHERS 981
its own cost, but the ownership of land set apart for the A
said purpose continues with the colonizer. Option is also
provided under Section 3(3)(a)(iv) to the colonizer to
transfer to the Government, at any time, if so desired by
the Government, free of cost, the land set apart for
schools, hospitals, community centers and community B
buildings, in which case, the Government shall be at
liberty to transfer such land to any person or institution,
including a local authority on such terms and conditions
as it may deem fit. But, the ownership of the Colonizer
cannot be transferred or divested, unless the colonizer c
volunteers to transfer the same free of cost to the
Government. Community and other facilities like schools,
hospitals, community centers, shops etc. provided in the
land set apart under Section 3(3)(a)(iv) are, therefore,
meant for the benefit of the entire colony and not for the 0
apartment owners in one part of the colony and the costs
incurred in discharge of the statutory obligations cannot
be passed on/transferred from the plot owners/apartment
owners by the colonizer. [Paras 21, 24, 25] [997-G, H;
1004-C-E, G, H]
E
DLF Qutub Enclave Complex Educational Charitable
Trust v. State of Haryana and others (2003) 5 SCC 622: 2003
(2) SCR 1; Ansal Properties and Industries Limited. v. State
of Haryana and Another (2009) 3 SCC 553: 2009 (1 ) SCR
553 - referred to. F
2. It is the obligation of the colonizer to construct
schools, community centers and commercial facilities on
the lands set apart ·for! that purpose in the colony under
Section 3(3)(a)(iv) of the Development Act and also on the
basis of agreement executed between the colonizer and G
the DTCP (Director, Town and Country Planning). No
obligation is cast on the colonizer under the Apartment
Act or the Rules framed thereunder to provide those
facilities which are specifically mentioned under Section
3(3)(a)(iv) of the Development Act. But the Colonizer has H
982 SUPREME COURT REPORTS [2013] 16 S.C.R.
A to provide various other facilities like "common areas and
facilities", to the apartment owners, as provided under
the Apartment Act. [Para 28] [1007-E-H]
3. The Apartment Act casts an obligation on the
colonizer to file a statutory declaration. Section 6 read
8 with Section 3(f) of the Apartment Act clearly indicates
that clauses 1 to 8, except 7 of Section 3(f) are to be
provided by the colonizer to the apartment owners and
each apartment owner is entitled to an undivided interest
in the common areas and facilities, in the percentage
C expressed in the declaration. The only exception is clause
7, which gives a right to the colonizer either to provide
or not to provide in the declaration, the community and
commercial facilities referred to in Section 3(3)(a)(iv) of the
Development Act. There is a marked difference between
D "common areas and facilities" and "community and
commercial facilities". A colonizer is duty bound to
provide all the common areas and facilities as per Section
3(f), except community and commercial facilities referred
to in Section 3(f)(7). "Common areas and facilities"
E referred to in Section 3(f)(7) of the Apartment Act has a
co-relation with the "Community and Commercial
facilities" referred to in Section 3(3)(a)(iv) of the
Development Act. It is for that reason that a discretion has
been given to the colonizer to either provide the same or
F not to provide the same in the declaration referred to in
Section 3(f) of the Apartment Act. The expression "may"
used in Section 3(f)(7) of the Apartment Act clearly
indicates that no duty is cast on the colonizer to give an
undivided interest over those community and commercial
G facilities exclusively to the apartment owners of a
particular colony, since the same have to be enjoyed by
other apartment owners of DLF City, Phase I, II and Ill as
well. Even otherwise, the colonizer could not have parted
with his ownership rights exclusively to one Colony
H alone. [Para 32] [1011-G-H; 1012-A-E]
DLF LIMITED v. MANMOHAN LOWE AND OTHERS 983
4. Section 11 of the Apartment Act deals with A
"contents of declaration". "Contents of deed of
apartment" is dealt with in Section 12 of the Act. What is
discernible is that each apartment owner shall be entitled
to an undivided interest in the common areas and
facilities in the percentage expressed in the declaration B
and such percentage shall be computed by taking as a
basis the value of the apartment in relation to the value
of the property. Common areas and facilities shall also
remain undivided and the apartment owner or any other
person can. use the common areas and facilities in c
accordance with the purpose for which they are intended
without entering or encroaching upon the rights of other
apartment owners. Apartment owners are entitled to an
undivided interest in the common areas and facilities in
the percentage expressed in the declaration, within the D
meaning of Section 3(f) (1) to (6) and (8) and it is also
open to the colonizer to provide, at its own cost, the
community and commercial facilities referred to in clause
7 of Section 3(f) read with Section 3(3)(f)(iv) of the
Development Act by including them in the declaration.
E
Colonizer cannot also, under certain circumstances,
confer any undivided interest to an exclusive set of
apartment owners to the detriment of similar apartment
owners, who have apartments in other phases of a larger
colony or city. Apartment owners are, therefore, not
entitled to an undivided interest or possession over those F
community and commercial facilities, referred to in
Section 3(3)(a)(!v) of the Development Act, unless
specifically provided by the colonizer in the statutory
declaration. [Para 33, 34 and 35] [1012-F; 1014-C; 1015-
C-G] G
Ownership Vs. User:
5. The ownership right over the land earmarked for
schools, hospitals, comm1,rnity centers ~nd other
community buildings referred to in Section 3(3)(a)(iv) of H
984 SUPREME COURT REPORTS [2013] 16 S.C.R.
A the Development Act vests on the colonizer. That
ownership can be divested by the colonizer through a
declaration under Sections 11 to 13 read with Section 3(f)
of the Apartment Act. The colonizer has to provide those
facilities in discharge of its legal obligations under the
B Development Act and the Act itself has recognized its or
his legal ownership over the area set apart for those
facilities under Section 3(3)(a)(iv) of the Act. All the same,
the right to enjoy those facilities referred to in Section
3(3)(a)(iv) of the Development Act, whether shown in the
c declaration or not, under the Apartment Act, cannot be
restricted or curtailed and the apartment owners have no
other right, except the right of "user". Community
centers, nursery schools, shops etc., therefore, being part
of the approved layout plans by the DTCP, can be used
by the apartment owners and, being part of the larger
0
colony, are intended for independent use of all the
apartment owners having direct exit to common areas, to
the public street, road, etc. All those facts would indicate,
so far as apartment owners are concerned, they have
E only a right of user, so far as the facilities provided under
Section 3(3)(a)(iv) of the Development Act are concerned.
[Para 36] [1015-H; 1016-A-E]
6. Some structures were developed by the developer
i.e. the appellant to which it is claiming its exclusive right.
F These structures are two nursery schools, three shops
and one community centre, which cannot be treated as
"common areas and facilities" within the definition of
Section 3(f) of the Act. They are parts of planning for
larger area, which plans were submitted by the appellant.
G It is not meant for the exclusive use of the flat owners of
Silver Oaks Apartments. Position would have been
different had these been integral parts of the facilities, in
the sense that these facilities are essential for the
enjoyment of the flats. [Para 37] [1016-H; 1017-A-B]
H
DLF LIMITED v. MANMOHAN LOWE AND OTHERS 985
7. Common passages, staircases, lifts etc. are the A
examples of such common areas and facilities. Likewise,
stilt parking area may be treated as part of common areas
and facilities, in certain circumstances. Here these
structures are the part of the larger area of about 130
acres in respect of which 7 licenses were obtained for B
development of the colony. Silver Oaks Apartments,
which comprises of 14.75 acres, is only a part thereof. The
nursery schools, shops and community centre are meant
for the development of the entire colony and are not
confined only to these apartments. Further, it is clear that c
the developer is given right to transfer these "community
buildings and community centers". Likewise, even
schools cannot be termed as part of "integral
development" use whereof would be confined to
residents of these apartments. Even the shops which are D
inside the boundary walls have their opening from
outside to enable the shopkeepers to cater to the
customers not only from these apartments, but outsiders
as well. [Para 38] [1017-H; 1018-C-F]
Cost not on Apartment owners: E
8. The Colonizer is legally obliged under Section
3(3)(a)(iv) of the Ai:t to construct at his own cost the
community and commercial facilities stipulated therein
and an agreement has to be entered into by the Colonizer
with the DTCP (Director, Town and Country Planning) F
under the Development Act by which the Colonizer is
prohibited by law from recovering the cost of providing
those facilities from the apartment owners. [Para 39]
[1017-H; 1018-A]
G
9. Section 3(3)(a)(iv) of the Development Act read
with the agreement executed by the colonizer would
indicate that ownership of the portion of the land set apart
for the common areas and facilities referred to therein
vest with the Colonizer so also the obligation "at his own
cost" to provide those facilities in the land set apart for H
986 SUPREME COURT REPORTS [2013] 16 S.C.R.
A the said purpose. The Colonizer cannot recover cost of
land or the amounts spent by him for providing those
facilities from the apartment owners. It is for the said
reason that clause 7 of Section 3(f) of the Apartment Act
has not made it obligatory, on the part of the Colonizer
B to include the "community and commercial" facilities in
the declaration. If the colonizer includes the same within
the declaration, then Section 6 of the Apartment Act will
kick in, consequently, the apartment owners would be
entitled to the undivided interest in respect of the
C community and commercial facilities provided therein
without bearing the cost incurred by the colonizer in
purchasing the land and the cost of construction. The
colonizer could not have included the community and
commercial facilities referred to in Section 3(3)(a)(iv) of the
Development Act, because the same is meant for the
0
benefit of the entire colony, not merely the flat/apartment
owners in one part of the colony since they form part of
the lay out plans duly approved, which takes in plotted
area and the group housing societies area as well. [Para
E 40] [1019-A-E]
Naharchand Laloochand Private Limited v. Panchali Co-
operative Housing Socities Limited (2010) 9 SCC 536: 2010
(10) SCR 804 - held inapplicable.
Competent Authority:
F
10. The High Court has committed an error in
directing the DTCP to decide the objections of .the
apartment owners with regard to the declaration made by
the colonizer. The Competent Authority is defined under
G Section 3(i) of the Apartment Act. Section 11 (2) provides
for filing of declaration in the office of the Competent
Authority. Section 24A of the Act prescribes penalties and
prosecution for failure to file a declaration and Section
248 permits the prosecution only with the sanction of the
Competent Authority. In a given case if the developer
H does not provide common areas or facilities like corridors,
DLF LIMITED v. MANMOHAN LOWE AND OTHERS 987
lobbies, staircases, lifts and fire escape etc. the A
Competent Authority can look into the objections of the
apartment owners but when statute has given a
discretion to the colonizer to provide or not to provide
as per Section 3(f)(7) of the Apartment Act the facilities
referred to in Section 3(3)(a)(iv) of Development Act, no B
objection could be raised by the apartment owners and
they cannot claim any undivided interest over those
facilities except the right of user. In the instant case the
apartment owners have raised no grievance that they are
being prevented from using the community and c
commercial facilities referred to in Section 3(3)(a)(iv) of
Regulation Act, but they cannot claim an undivided
interest or right of management over them. [Para 43]
[1021-8-F]
11. The Haryana Development and Regulation of D
Urban Areas (Management) Act, 2003 came into force on
03.04.2003. By virtue of the amended definition of
"external development works", the scope of the said
expression has been widened and the State Government
has given a Wider discretion in expending the amount E
collected from the colonizer as external development
charges. The Amendment Act does not seek to transfer
an obligation of actually carrying out the external
development work upon the colonizer. [Para 44] [1021-
G-H; 1022-A, B] F
12. The High Court has not properly appreciated or
applied the various statutory provisions of the Regulation
Act and the Rules framed thereunder, the terms of
licences issued, agreements executed between the
colonizer and the DTCP vis-a-vis the various provisions G
of the Apartment Act, the statutory declaration made by
the colonizer and the Sale Deeds executed between the
parties. In such circumstances, the judgment of the High
Court is set aside. [Para 45] [1022-D-E]
H
988 SUPREME COURT·REPORTS [2013] 16 S.C.R.
A Case Law Reference :
2003 (2) SCR 1 referred to Para 11
2010 (10) SCR 804 held inapplicable Para 16
2009 (1) SCR 553 referred to Para 26
B
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
10930 of 2013.
From the Judgment and Order dated 09.09.2009 of the
High Court of Punjab & Haryana at Chandigarh in CWP No.
C 960 of 2000.
WITH
Contempt Petition (C) D. No. 29500 of 2012.
Mukul Rohatgi, Uday U. Lalit, Randip Singh Rai, Vikas
D singh T. R. Andhyarjuna, Narender Hooda, Sr. AAG, Pravin
Bahadur, Mallika Joshi, Amit Agarwal, Prit Pal Nijjar, Rajan
Narain, Rajeev Anand, Saurabh Kirpal, Ranjita Rohtagi, Gagan,
Gupta, lmran Ahmad Abbasi, Deepika Kalia, Sanket, Vaibhav
Gaggar, Garima Malhotra, Gauhar Miraza, C.S. Ashri, Anubha
E Agarwal, Ambuj Agarwal, Kamal Mohan Gupta, Santosh Paul,
Arti Singh, Piyus Sharma, Madhu Tewatia, Sidhi Arora for the
Appearing Parties.
The Judgment of the Court was delivered by
K.S. RADHAKRISHNAN, J. 1. Leave granted.
F
2. This appeal arises out of a writ petition filed by the
Apartment owners of Silver Oaks Apartments, DLF Qutub
Enclave, Phase-1, Gurgaon, seeking a writ of certiorari to quash
the declaration dated 19.04.2001 filed by the Appellant, on the
G ground that the same is not in conformity with Section 3(f) of
the Haryana Apartment Ownership Act, 1983 (for short "the
Apartment Act") since the appellant failed to include certain
areas of the complex as "common areas and facilities" within
the declaration, thereby effectively depriving the apartment
H owners of their rights over the same.
DLF LIMITED v. MANMOHAN LOWE AND OTHERS 989
[K.S. RADHAKRISHNAN, J.]
3. The Division Bench of the Punjab and Haryana High A
Court accepted their contention and held that the apartment
owners are entitled to undivided interest in common areas and
common facilities under Section 6 of the Apartment Act and
would be vitally affected if those areas are not declared as
common areas. The Court also held, inte-r alia, that the B
competent authority under Section 3(i) of the Apartment Act is
under an obligation to decide the objections of the apartment
owners to the declaration filed by the colonizer-appellant herein.
Aggrieved by the same, this appeal has been preferred by the
colonizer. c
4. The colonizer purchased large extent of lands in villages
Chakarpur, Sarhaul, Shahpur, Nathupur and Sikanderpur Ghosi,
Tehsil and District Gurgaon, Haryana, with a view to develop a
residential colony to be known as DLF Qutab Enclave Complex.
Any intending company or association having land for converting D
it in the colony, was required to apply for licence under the
Haryana Development and Regulation of Urban Areas Act,
1975 (for short 'the Development Act'). The colonizer submitted
an application in accordance with Section 3 of the Development
Act for necessary licences. During the years 1980-81 seven E
licences were obtained by the Colonizer in relation to 130.62
acres. Licences were granted by the Director, Town and
Country Planning, Haryana (DT(;P) in accordance with the
provisions of the Development Act. The Department of Town
and Country Planning, Haryana (the Department) in the year F
1982 approved the group complex, Silver Oaks, as part of the
colony being developed by the Colonizer. Licences were
initially granted for two years, and later got periodically
renewed. On 30.05.1990 a condition was imposed by the
Competent Authority that the Colonizer should provide G
Economically Weaker Sections Complex (EWS) and service
units to the extent of 10% of main dwelling units. Consequently,
revised plan was submitted, which was approved by the
Competent Authority on 08.11.1990 in which residential blocks
comprising parking in basement, EWS Flats and three shops H
990 SUPREME COURT REPORTS [2013] 16 S.C.R.
A were approved. There was further revision for zoning and
building plan in the years 1992 and 1995.
5. The Department, in the meantime, circulated norms for
provision of community facilities vide DTCP Endst No.20028
dated 24.11.1988. During the year 1990, agreements were
8
entered into between the Colonizer and the Apartment Owners
of the above-mentioned complex. Apartment buyers agreement
provided for sale of a quantified 'super area' against the sale
consideration specified in the agreement. The 'super area'
comprises of an exclusive right to use the common area within
C the building in which the apartment was situated. Agreement
also states that the colonizer will transfer and convey its right,
title and interest in the said site, common area and common
facilities in favour of the co-operative society or limited company
or association of persons, etc. in accordance with the
D provisions of the Apartment Act and the Rules framed
thereunder.
6. The Colonizer later applied for completion certificate on
15.04.1996 for group housing scheme measuring 14.75 acres.
E The Apartment Act, though was enforced by notification dated
08.09.1986, issued by the Haryana Department, the same was
rescinded on 24.10.1997 as the concerned department which
notified the Act was the Town Planning Department.
Consequently, a fresh notification dated 10.11.1997 was issued
F by the Department notifying the applicability of the Act in the
entire State of Haryana. Later several sale deeds were
executed by the Colonizer in favour of the apartment owners in
the year 1997, wherein both had agreed that they would conform
to the provisions of the Apartment Act. Writ Petition No.960 of
2000 was filed by respondents 1 to 5, before the Punjab &
G Haryana High Court, seeking a direction to the Colonizer to file
a deed of declaration in relation to the Complex under the
Apartment Act.
7. The Department later gave a partial completion
H certificate to the Colonizer on 22.01.2001, subject to the
DLF LIMITED v. MANMOHAN LOWE AND OTHERS 991
[K.S. RADHAKRISHNAN, J.]
condition of filing a deed of declaration under the Apartment A
Act within 90 days. Later the Department on 14.03.2001 revised
the earlier partial completion certificate for the complex, inter
alia, requiring the Colonizer to file a deed of declaration within
a period of 90 days. It was also provided that the responsibility
of the ownership of common areas and common facilities as B
well as their management and maintenance should continue to
vest with the Colonizer till such time the responsibility was
transferred to the statutory condominium association under the
Apartment Act.. The Colonizer accordingly on 19.04.2001 filed
the "deed of declaration" along with bye-laws of the statutory c
condominium association (Silver Oaks Condominium
Association for short 'the SOCA') as required under Section
11 (2) of the Apartment Act. The Colonizer on 20.04.2001
issued a letter to the SOCA stating that all the dwelling units,
areas, with the common areas and facilities along with other D
assets, plant and machinery and equipments, as declared in
the declaration stands transferred tc::i the SOCA for the
maintenance. The Colonizer on 23.04.2001 also wrote a letter
to the SOCA requesting them to take over the responsibility of
maintaining common areas and facilities along with other
assets, plant and machinery and equipments etc. E
8. The SOCA on 27.04.2001 passed a resolution that it
would take over the responsibility of managing of common
areas and facilities along with other assets, plants and
rr>achinery and other equipments, as transferred to the F
Association by the Colonizer. The same was confirmed by the
Association by sending a letter on 03.05.2001 to the Colonizer.
9. Writ Petition No.960 of 2000, filed by respondents 1 to
5 was later amended, challenging the declaration filed by the G
Colonizer, stating that the same was not in conformity with the
mandate of the Apartment Act, and that the common areas and
facilities should also include shops or parking areas,
community centers, nursery school and other common facilities.
Amendment sought was allowed by the High Court on
H
992 SUPREME COURT REPORTS [2013] 16 S.C.R.
A 26.11.2001. Before the High Court Silver Oak Society also got
themselves impleaded as party. The High Court also impleaded
the statutory SOCA as a party respondent to the writ petition.
The High Court also sought a clarification from the Department
with regard to the meaning of expression "common areas and
B facilities". The Department clarified that the "common areas
and common facilities" need to be defined categorically in the
declaration to be filed under Section 2 of the Apartment Act
which may or may not include community buildings, shops etc.
10. The Division Bench of the High Court after hearing all
C the parties took the view that the question whether primary
schools, shops or community center are common areas or any
other objection of the flat owners could be decided by the
Competent Authority, having regard to the provisions, objects
and spirit of the Act. Further, the Court also took the view that
D it is not the intention of the Legislature that the developer/
Colonizer assumes absolute power of declaring or not
declaring areas, normally in common use, to be common areas.
The Court also held that Section 11, which deals with the
contents of the declaration, cannot be read as giving absolute
E power to the Colonizer/developer to exclude common areas
from the said concept. The Court also held that the apartment
owners are entitled to object to the contents of the declaration
and it is for the Competent Authority to decide cross-objections.
The Court after holding so, disposed of the writ petition with a
F direction to the Competent Authority to take a decision on the
various objections raised by the apartment owners and the
association. The legality of which is the question that arises for
consideration in this appeal.
G 11. Shri Mukul Rohatgi, learned senior counsel appearing
for the Colonizer, submitted that the High Court has completely
misunderstood the scope of various provisions of the
Development Act and the Rules framed thereunder as well as
the Apartment Act, and the Rules framed thereunder. Learned
senior counsel submitted that the judgment of the High Court
H
DLF LIMITED v. MANMOHAN LOWE AND OTHERS 993
[K.S. RADHAKRISHNAN, J.]
has the effect of rendering the provisions of the Development A
Act, particularly, Section 3(3)(a)(iv) otiose in as much as it
compels the Colonizer to divest its ownership rights in re.lation
to community and commercial facilities developed by it in terms
of the provision of the Development Act. Learned senior
counsel also submitted that the direction of the High Court that B
the declaration must categorise the whole property into
"apartment, common areas and facilities" and "limited common
areas and facilities" is contrary to Section 3(f) of the Apartment
Act, which itself, accord'ing to the learned senior counsel, does
not compel the Colonizer to divest its ownership rights in c
community and common facilities developed by it as part of the
obligation under the Development Act. Learned senior counsel
also submitted that the High Court has failed to appreciate that
the community and commercial facilities, in SOCA, were
provided as part of the Colonizer's over all obligations under D
Section 3(3)(a)(iv) of the Development Act for the colony as a
whole and the same cannot be considered separate only on
account of being located at a specific site in the colony i.e.
inside the Silver Oaks Complex. Learned senior counsel
placed considerable reliance on the Judgment of this Court in E
DLF Qutub Enclave Complex Educational Charitable Trust
v. State of Haryana and others (2003) 5 sec 622 and
submitted that community facilities and amenities are not part
of the "development work" under the Development Act.
12. Shri Vikas Singh, learned senior counsel appearing F
for the applicants in IA No.4 of 2013, supported the Colonizer's
contentions and also submitted that the High Court has not
properly appreciated the scope of Section 3(f) of the Apartment
Act. Learned senior counsel pointed out that the expression
"unless the context requires in the declaration" or "lawful G
amendments thereto" which finds a place in Section 3(f) of the
Act has been completely overlooked by the High Court.
Learned senior counsel also submitted that the Colonizer is not
under an obligation either under the conditions of licence under
the Development Act or under the provisions of the Apartment H
994 SUPREME COURT REPO~TS [2013] 16 S.C.R.
A Act to declare certain areas to be common areas and facilities.
13. Mr. Narender Hooda, learned Additional Advocate
General, Haryana, appearing for the State of Haryana,
submitted that the internal community facilities are required to
be provided by the colonizer in terms of Section 3(3)(a)(iv) of
8
the Development Act, at his own cost and the expenditure
incurred cannot be passed on to the apartment owners and
colonizer continues to be the exclusive owner of such community
facilities and is free to incorporate or not, any or all such internal
community facilities in the declaration required to be filed in
C terms of the Apartment Act. Learned AAG also submitted that
in the instant case Silver Oaks is a part of a large colony of
130 acres and the same cannot be treated as an independent
colony but only a portion of large colony of 130 acres. Further
it is pointed out that all community facilities provided in the
D colony of 130 acres of which Silver Oaks is only one part is
meant for the use and enjoyment of all the residents of the
colony.
14. Shri T.R. Andhiyarujina, learned senior counsel
E appearing for the applicants in IA No.3 of 2010 submitted that
the High Court is right in holding that the intention of the
legislature is that the Colonizer cannot be conferred with an
absolute power to declare or not to declare areas normally in
common use, to be common areas. Learned senior counsel
F submitted that apartment owners are always entitled to object
to the contents of the declaration if the contents are not in
conformity with the statutory provisions and spirit of the
Apartment Act. Learned senior counsel submitted that the High
Court has only directed the Competent Authority to examine the
G objections raised by the apartment owners ar.d it is for the
Competent Authority to decide as to whether the declaration
is in conformity with the Apartment Act and the Rules and
Regulations framed thereunder.
15. Mrs. Madhu Tewatia, learned counsel appearing for the
H SOCA, took us extensively to the provisions of the Apartment
DLF LIMITED v. MANMOHAN LOWE AND OTHERS 995
[K.S. RADHAKRISHNAN, J.]
Ownership Act and the Rules framed thereunder and submitted A
that the group housing complexes are totally independent and
distinct entity in terms of sanctions, applicability of development,
control, norms etc. vis-a-vis plotted colonies. Learned counsel
also submitted that the internal development work shall include
common facilities in the building complex, for example, B
common sewerage, water supply, common staircases,
corridors, ramps, lifts, chutes etc. and the community buildings
are in addition to the provisions of development work mentioned
in Rule 5 of Development Rules, 1976. Referring to the licence
agreement ·under th.e Development Act, learned counsel c
pointed out that the common areas and facilities do not vest
or belong to the builder and the responsibility of ownership or
common areas and facilities, as well as their management,
shall continue to vest with the Colonizer only till the responsibility
is transferred to the owners of the dwelling units under the D
Apartment Act.
16. Learned counsel also submitted that the development
charges and construction work in the colony are paid for by the
apartment owners. Learned counsel also referred to the
Judgment of this Court in Naharchand Laloochand Private E
Limited v. Panchali Co-operative Housing Socities Limited
(201 O} 9 SCC 536, and submitted that this Court, while.
interpreting para-materia definition of common areas and
facilities held that parking area, common area and facilities and
that even the factum of not having taken money from the F
apartment owners could not change the character and nature
of common area even though the builder may not have charged.
Learned counsel also submitted that Judgment in DLF Qutub
Enclave (supra) can be distinguished on facts and law and is
not applicable to the case on hand since in the instant case, G
learned counsel submits, this Court is concerned with the group
housing multi-storied society unlike plotted colonies.
17. Shri Santosh Paul, learned counsel appearing for the
. applicants in IA No.5 of 2013, submitted that the Colonizer/ ' H
996 SUPREME COURT REPORTS (2013] 16 S.C.R.
A Developer in the State of Haryana have with impunity violated
the provisions of the Apartment Act. Learned counsel submitted
that under Section 6 of the Act each apartment owner is entitled
to an undivided interest in common areas and facilities and that
percentage of undivided interest of common areas and facilities
B shall be deemed to be conveyed or encumbered with the
apartment even though such interest is not expressly mentioned
in the conveyance or instrument. Learned counsel also made
reference to the licence format LC-7 and other relevant
provisions of the Development Act as well as the Apartment
c Act and submitted that the Developer/Colonizer having
connivance with the authorities taken shelter under Section 3(1)
to sustain for profiteering. Learned counsel, therefore,
submitted that there is no reason to upset the findings recorded
by the High Court which are in tune with the over all public
D interest so that the rights of the vulnerable sections of the
society would be safeguarded from the colonizers.
18. We find that the issue involved in this case is of
considerable importance in the real estate sector, especially
in the urban areas, while developing a Scheme in connection
E with the plot development or group housing, hence, it is
necessary to examine the various legal issues which arise for
consideration in this appeal. The primary question that has
come up for consideration is with regard to the rights of the
apartment owners, vis-a-vis the colonizers over "community and
F commercial facilities" referred to in Section 3(f)(7) of the
Apartment Act.
19. Apartments owners, as already stated, maintained tne
stand that "community and commercial facilities", like providing
G community centre. schools, shops etc., would fall within the
statutory definition of "common areas and facilities" under
Section 3(f) of the Apartment Act. The colonizers maintained
the stand that it can be so only if the colonizer has provided so
in the statutory declaration filed by it under Section 3(f) of the
H Apartment Act.
DLF LIMITED v. MANMOHAN LOWE AND OTHERS 997
[K.S. RADHAKRISHNAN, J.]
20. We are, in this case, concerned with the rights and A
obligations which flow to a colonizer, vis-a-vis, the apartment
owners on the basis of the Development Act as well as the
Apartment Act. Let us first examine the relevant provisions of
the Development Act.
The Development Act:
B
21. Section 2(c) of the Development Act defines the term
"colony", which reads as follows:
"2(c) "colony" means an area of land divided or proposed c
to be divided into plots or flats for residential, commercial,
industrial, cyber city or cyber park purposes or for the
construction of flats in the form of gr0ttp housing or for the
construction of integrated c~mmercial complexes, but an
area of land divided or proposed to be divided-
D
(i) ~ for the purpose of agriculture; or
(ii) as a result of family partition, inheritance,
succession or partition ·of joint holding not with the
motive or earning profit; or E
(ii) in furtherance of any scheme sanction under any
other law; or
(iii) by the owner of a factory for setting Lip a housing
colony for the labour or the employees working in F
the factory; provided there is no profit motive; or
(iv) when it does not exceed one thousand square
metres or such less area as may be decided from
time to time in an urban area by Government for the G
purposes of this sub-clause, shall not be a colony."
The expression "colonizer" is defined under Section 2(d)
which reads as follows :-
"2(d). "colonizer" means an individual, company or H
998 SUPREME COURT REPORTS (2013] 16 S.C.R.
A association or body of individuals, whether incorporated
or not, owning land for converting it into a colony and to
whom a licence has been granted under this Act."
The expression "development works" is defined under
Section 2(e) of the Act to mean as "internal and external
8 development works". Section 2(g) defines the expression
"external development works" and reads as follows:
"2(g). "External development works" include water supply,
sewerage, drains, necessary provisions of treatment and
C disposal of sewage, sullage and storm water, roads,
electrical works, solid waste management and disposal,
slaughter houses, colleges, hospitals, stadium/sports
complex, fire stations, grid sub-stations etc. and any other
work which the Director may specify to be executed in the
D periphery of or outside colony/area for the benefit of the
colony/area."
The word "flat" is defined under Section 2(gg) of the Act,
which reads as follows:
E "2(gg). "Flat" means a part of any property, intended to be
used for residential purposes, including one or more
rooms with enclosed spaces located on one or more
floors, with direct exit to a public street or road or to a
common area leading to such streets or roads and
F includes any garage or room whether or not adjacent to
the building in which such flat is located provided by the
colonizer/owner of such property for use by the owner of
such flat for parking any vehicle or for reside'nce of any
person employed in such flat, as the case may be."
G
The expression "group housing" is defined under Section
2(hh) of the Development Act, which reads as follows:
"2(hh). "Group housing" means a building designed and
developed in the form of flats for residential purpose or any
H
DLF LIMITED v. MANMOHAN LOWE AND OTHERS 999
[K.S. RADHAKRISHNAN, J.]
ancillary or appurtenant building including community, A
facilities, public amenities and public utility as may be
prescribed."
Section 2(hhh) defines the expression "integrated
commercial complex", which reads as follows :- 8
"2(hhh). "integrated commercial complex" means building
containing apartments sharing common services and
facilities and having their undivided share in the land and
meant to be used for office or for practicing of any
profession or for carrying on any occupation, trade, C
business or such other type of independent use, as may
be prescribed."
The expression "internal development works" is defined
under Section 2(i), which reads as follows: D
• "2(i). "Internal development works" mean -
(i) metalling of roads and paving of footpaths;
(ii) turfing and plantation with trees of open spaces; E
(iii) street lighting;
(iv) adequate and wholesome water-supply;
(v) sewers and drains both from storm and sullage · F
water and necessary provision for their treatment
and disposal; and
(vi) any other work that the Director may think
necessary in the interest of proper development of
a colony." G
Section 3 of the Development Act deals with application
for licence, which reads as follows :-
"3. Application for licence;· (1) Any owner desiring to
H
1000 SUPREME COURT REPORTS [2013] 16 S.C.R.
A convert his land into a colony shall, unless exempted under
section 9, make an application to the Director, for the grant
of licence to develop a colony in the prescribed form and
pay for it such fee and conversion charges as may be
prescribed. The application shall be accompanied by an
B income-tax clearance certificate;
Provided that if the conversion charges have already been
paid under the provisions of the Punjab Scheduled Roads
and Controlled Area Restriction of Unregulated
Development Act, 1963 (41of1963), no such charges shall
c be payable under this section.
(2) On receipt of the application under sub section (1 ), the
Director shall, among other things, enquire into the
following matters, namely:-
D
(a) title to the land;
(b) extent and situation of the land;
(c) capacity to develop a colony;
E
(d) the layout of a colony;
(e) plan regarding the development schemes of the
colony land to those of the neighbouring areas.
F (f) conformity of the development schemes of the
colony land to those of the neighbouring areas.
(3) After the enquiry under sub-section (2), the Director, by
an order in writing, shall -
G (a) grant a licence in the prescribed form, after the
applicant has furnished to the Director a bank
guarantee equal to twenty five per centum of the
estimated cost of development works in case of
area of land divided or proposed to be divided into
H plots or flats for residential, commercial or industrial
DLF LIMITED v. MAN MOHAN LOWE AND OTHERS 1001
[K.S. RADHAKRISHNAN, J.]
purposes and a bank guarantee equal to thirty- A
seven and a half per centum of the estimated cost
of development works in case of cyber city or cyber
park purposes as certified by the director and has
undertaken-
8
(i) to enter into an agreement in the prescribed form for
carrying out and completion of development works in
accordance with licence granted;
(ii) to pay proportionate development charges if the
external development works as defined in clause (g) of C
section 2 are to be carried out by the Government or any
other local authority. The proportion in which and the time
within which, such payment is to be made, shall be
determined by the Director;
D
(iii) the responsibility for the maintenance and upkeep of
all roads, open spaces, public park and public health
services for a period of five years from the date of issue
of the completion certificate unless earlier relieved of this
responsibility and thereupon to transfer all such roads, open E
spaces, public parks and public health services free of
cost to the Government or the local authority, as the case
may be;
(iv) to construct at his own cost, or get constructed by any
other institution or individual at its cost, schools, hospitals, F
community centers and other community buildings on the ·
lands set apart for this purpose, or to transfer to the
Government at any time, if so desired by the Government,
free of cost the land set apart for schools, hospitals,
community centers and community buildings, in which case G
the Government shall be at liberty to transfer such land to
any person or institutions including a local authority on such
terms and conditions as it may deem fit;
(v) to permit the Director or any other officer authorized H
1002 SUPREME COURT REPORTS (2013] 16 S.C.R.
A by him to inspect the execution of the layout and the
development works in the colony and to carry out all
directions issued by him for ensuring due compliance of
the execution of the layout and development works in
accordance with the licence granted;
B
Provided that the Director, having regard to the amenities
which exist or are proposed to be provided in the locality,
is of the opinion that it is not necessary or possible to
provide one or more such amenities, may exempt the
licensee from providing such amenities either wholly or in
c part;
(vi) to fulfill such terms and conditions as may be
specified by the director at the time of grant of license
through bilateral agreement as may be prescribed.
D
(b) refuse to grant a licence, by means of a speaking
order, after affording the applicant an opportunity of
being heard.
4. the license so granted shall be valid for a period of
E two years, and will be renewable from time to time for a
period of one year, on payment of prescribed fee:
Provided that in the licensed colony permitted as a special
project by the Government, the license shall be valid for a
F maximum period of five years and shall be renewable for
a period as decided by the Government."
22. The colonizer, in the instant case, has entered into an
agreement LC-IVA under Rule 11 of the Development Rules,
1976, whereby the colonizer has agreed to comply with the
G execution of internal development works, external development
works and to construct at his own cost, community centers,
community buildings, schools, hospitals etc. in the areas
earmarked for the same in the layout plan of the colony. Internal
development works are to be executed by the colonizer
H between boundaries of the licensed colony and the cost of the
DLF LIMITED v. MANMOHAN LOWE AND OTHERS 1003
[K.S. RADHAKRISHNAN, J.]
internal development works, to be recovered from the plot A
holders/apartment owners in the colony. External development
works are works required to be executed at the periphery of
the colony or outside the colony limits which are of larger and
more substantial nature and meant to serve the needs of a
larger area than one colony like town level infrastructure work B
facilities etc. External development works, which includes water
supply, sewerage, roads, electrical works, solid waste
management disposal, colleges, hospitals, stadium etc. are to
be executed exclusively by the State Government and not by
the colonizer. Section 3(3)(a)(ii) and the statutory agreement toc
be entered into between the colonizer and the State
Government would indicate that colonizer is required to deposit
with the Government the entire cost of external development
works as quantified by the State Government, cost of the same
invariably passed on by the colonizer to the plot holders/ D
apartments owners on pro-rata basis. Further, the responsibility
for the maintenance and upkeep of all roads, open spaces,
public parks and public health services for a period of five years
is on the Colonizer from the date of issue of the completion
certificate.
E
23. We may now examine the most crucial issue with
regard to the scope of Section 3(3)(a)(iv) of the Development
··Act. As per the said provision, an obligation is cast on the
colonizer to construct "at its own cost" or get constructed by any
other institution or an individual at its own cost, schools, . F
hospitals, community centers and other community buildings on
the land set apart for the said purpose. In the alternative, the
colonizer can also transfer to the Government, at any time, if
so decided by the Government, free of cost, the land set apart
for schools, hospitals, community centers and community G
buildings, in which case, the Government shall be at liberty to
transfer such land to any person or institution, including a local
authority on such terms and conditions, as it may deem fit. In
such situation, the cost of construction can either be met by the
Government or by the transferee of the Government. The cost H
1004 SUPREME COURT REPORTS [2013) 16 S.C.R.
A incurred in discharging the obligations under Section 3(3)(a)(iv),
as already indicated, has to be borne either by the colonizer
or, on transfer of the land free of cost, by the Government or
the Government transferee. The cost incurred for construction,
in that event, cannot be passed on or recovered from the plot
B holders/apartment owners in the colony.
24. Section 3(3)(a)(iv) obliges the colonizer to construct at
his own cost schools, hospitals, community centers and other
buildings on the lands set apart for that purpose, or also can
get them constructed by any other institution or an individual,
C at its own cost, but the ownership of land set apart for the said
purpose continues with the colonizer. Option is also provided
under Section 3(3)(a)(iv) to the colonizer to transfer to the
Government, at any time, if so desired by the Government, free
of cost, the land set apart for schools, hospitals, community
D centers and community buildings, in which case, the
Government shall be at liberty to transfer such land to any
person or institution, including a local authority on such terms
and conditions as it may deem fit. But, the ownership of the
Colonizer cannot be transferred or divested, unless the
E colonizer volunteers to transfer the same free of cost to the
Government. The colonizer has taken a specific ground in this
appeal that even before filing the writ petition, they had already
transferred its right to construct two nursery schools, community
center and the shops in Silver Oaks Group Housing to third
F parties and it is for the third parties to construct the same,
though ownership of the land vests with the colonizer.
25. Community and other facilities like schools, hospitals,
community centers, shops etc. provided in the land set apart
G under Section 3(3)(a)(iv) are, therefore, meant for the benefit
of the entire colony and not for the apartment owners in one
part of the colony and the costs incurred in discharge of the
statutory obligations cannot be passed on/transferred from the
plot owners/apartment owners by the colonizer. The facilities
to be provided under Section 3(3)(a)(iv) are based on the
H
DLF LIMITED v. MANMOHAN LOWE AND OTHERS 1005
[K.S. RADHAKRISHNAN, J.]
prescribed norms which are population based and the number A
of each type of amenity and its placement at various places in
the colony (plotted areas or group housing) are, as per the lay-
out plans duly approved by the DTCP under the Development
Act. DTCP has prescribed the requirement for each ame~ity/
commercial facility for DLF City Phase I, II & Ill, comprising of B
a total area of 1542 acres, under a composite layout plan of
all the three phases, treating three phases as a single colony.
As per the approved layout plans, these amenities are
earmarked at various sites in the colony, some In the plotted
areas and some in the group housing areas. So far as the c
present case is concerned, we notice that the layout plans
pertaining to lands covered under various licenses in the colony
are not restricted to 130 acres alone, wherein Silver Oaks Group
Housing is located in 14.75 acres.
26. In Ansa/ Properties and Industries Limited. V. State D
of Haryana and Another (2009) 3 SCC 553, this Court had
occasion to examine the scope of Section 3(3)(a)(iv) along with
. the Regulations Act. In that case, the Court held as follows:
"42. The responsibility regarding construction of community E
centres and other community buildings could be
discharged by adopting any of the three options as
mentioned hereinbefore and each one of such options is
an independent option and one cannot be connected and
related with the other. We cannot read the provision F
relating to construction at the own cost of the developer
the schools, hospitals, community centres and other
community buildings on the land set apart for this purpose,
into an independent alternative provision relating to transfer
of such land to the Government free of cost. The aforesaid G
option given to the developer to construct the community
centres and other community buildings at its own cost is .
when he can utilise himself to manage it. Therefore, we
cannot read the aforesaid provision in the manner sought
to be read by Mr Chaudhari, for reading by adding certain
H
1006 SUPREME COURT REPORTS [2013] 16 S.C.R.
A words in the aforesaid manner does not appear to be the
intention of the legislature while enacting the aforesaid
legislation, for otherwise the legislature would have
explicitly said so in the body of the main part of the section
itself.
B
In that case, the State Government sought to recover the
cost of construction over the land set apart for providing facilities
which were taken over by the Government as part of "external
development charges". This Court held that Section 3(3)(a)(iv)
only provides for the land to be transferred to the State and no
C provision of the Act authorizes the State Government to recover
charges towards cost of construction.
27. Later, in DLF Qutub Enclave Complex Educational
Charitable Trust v. State of Haayana and Others (2003) 5
o sec 622, while dealing with the scope of the above mentioned
provision, this Court held as follows:
"34. At the outset, we may notice that the cost of
development works indisputably is to be raised from the
plot-holders, but as construction of schools, hospitals,
E
community centres and other community buildings do not
come within the purview of the term "development works'',
the costs therefore are not to be borne by them.
35. The expression "development works" as noticed
F herein before is not synonymous with "amenity". The
expression "amenity" has been used only in the proviso
appended to sub-clause (v) of Section 3(3)(a) and Rule
2(b) of the Rules. Rules are subservient to the Act, although
they may be read conjointly with the Act, if any necessity
G arises therefor. Even Rule 5 specifies the obligation of the
colonizer as regard providing for the development works.
The expression "amenity" as defined in Rule 2(b) of the
Rules is wider than "development works". No principle of
construction of statute suggests that a wider expression
H used in the rule may be read in the statute employing
DLF LIMITED v. MAN MOHAN LOWE AND OTHERS 1007
[K.S. RADHAKRISHNAN, J.]
narrower expression. Even in the rule the said expr~ssions A
have been used for different purposes. The licence also
does not postulate that all amenities m'ust be provided by
the colonizer at its own expense. If the terms "development
works" and "amenity" are treated as carrying the same
meaning, the plot-holders may be held to be bound to B
meet the costs for construction of schools, hospitals,
community centres etc. The cost of construction in terms
of the said provisions thereof is to be borne by DLF or its
nominees.
36. Right of transfer of land is indisputably incidental to the
c
right of ownership. Such a right can be curtailed or taken
away only by reason of a statute. An embargo upon the
owner of the land to transfer the same in the opinion of this
Court should not be readily inferred. Section 3(3)(a)(iv) of
the Act does not expressly impose any restriction. The D
same is merely a part of an undertaking ...... "
28. We have to now examine the rights of apartment
owners over the facilities referred to in Section 3(3)(a)(iv) of the
Development Act in the light of the Apartment Act. As already E
indicated, it is the obligation of the colonizer to construct
schools, community centers and commercial facilities on the
lands set apart for that purpose in the colony unde;r Section
3(3)(a)(iv) of the Development Act and also on the basis of
agreement executed between the colonizer and the DTCP. No F
obligation is cast on the colonizer under the Apartment Act or
the Rules framed thereunder to provide those facilities which
are specifically mentioned under Section 3(3)(a)(iv) of the
Development Act. But the Colonizer has to provide various
other facilities like "common areas and facilities", to the G
apartment owners, as provided under the Apartment Act. In this
regard, reference may be made to certain provisions of the
Apartment Act.
H
1008 SUPREME COURT REPORTS [2013] 16 S.C.R.
A The Apartment Act:
29. Section 3(a) of the Apartment Act deals with the word
"apartment'', which reads as follows:
"3(a). "Apartment" means a part of the property intended
B for any type of independent use, including one or more
rooms or enclosed spaces located on one or more floors
or part or parts thereof, in a building, intended to be used
for residential purposes and with a direct exit to a public
street, road or highway or to a common area leading to
c such street, road or highway."
Sectiqn 3(b) defines the term "apartment owner" which
reads as follows:
"3(b) "Apartment owner" means the person or persons
D owning an apartment and undivided interest in the common
areas and facilities in the percentage specified and
established in the declaration."
Section 3(f) defines the term "common areas and
E facilities" which reads as follows:
"3(f) "Common areas and facilities: unless otherwise
provided in the declaration or lawful amendments thereto
means-
F (1) the land on which the building is located;
(2) the foundations, columns, girders, beams, supports,
main walls, roofs, halls, corridors, lobbies, stairs,
stair ways, fire escapes and entrances and exits of
G the building;
(3) the basements, cellars, yards, gardens, parking
area and ·storage spaces;
(4) the premises for the lodging of janitors or persons
H employed for management of the property;
DLF LIMITED v. MANMOHAN LOWE AND OTHERS 1009
[K.S. RADHAKRISHNAN, J.]
(5). installation of central services such as power, light, A
gas, hot and cold water, heating refrigeration, air
conditioning and incinerating;
(6) the elevators, tanks, pumps,. motors, fans
. compressors, ducts and in general all apparatus 8
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 C
convenient to its existing maintenance and safety
. or normally in common use."
Section 3(h) defines the term "common profits" which
reads as follows:
D
"3(h}. "Common profits" means the balance of all income,
rents, profits and revenues from the common areas and
facilities remaining after the deduction of the common
expenses."
E
Section 3U) defines the word "declaration" which reads as
under;
,,
"3U). "Declaration" means the instrumentto be executed
and got registered in the prescribed form and includes the
amended declaration." F
Section 4 of the Act deals with the "status of apartments"
which reads as under:
"4. Status of apartments.- Each apartment, together with G
its undivided interest in the common areas and facilities,
appurtenant to such apartment, shall for all purposes
constitute heritable and transferable immovable property
within the meaning of any law for the time being in force
in the State of Haryana."
H
1010 SUPREME COURT REPORTS [2013) 16 S.C.R.
A Section 5 of the Act deals with "Ownership of apartments"
which reads as follows:
'5. Ownership of apartments.- (1) Each apartment owner
shall be entitled to the exclusive ownership and possession
of his apartment in accordance with the declaration.
B
(2) Each apartment owner shall execute a deed of
apartment in relation to his apartment in the manner
prescribed."
c 30. The status of apartments together with its undivided
interest in common areas and facilities, appurtenant to such
apartment, shall for all purposes constitute heritable and
transferable immovable property and each apartment owner
shall be entitled to the exclusive ownership and possession of
0 his apartment in accordance with the declaration.
31. Section 6 of the Act deals with "common areas and
facilities" which reads as follows:
"6. Common areas and facilities. - (1) Each apartment
E 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 apartments in relation
to the value of the property; and such percentage shall
F reflect the limited common areas and facilities.
(2) The percentage of the undivided interest of each
apartment owner in the common areas and facilities as
expressed in the declaration shall have a permanent
character and shall not be altered without the consent of
all the apartment owners and expressed in an amended
declaration duly executed and registered as provided in
this Act. The percentage of the undivided interest in the
common areas and facilities shall not be separated from
the apartment to which it appertains and shall be deemed
to be conveyed or encumbered with the apartment even
DLF LIMITED v. MANMOHAN LOWE AND OTHERS 1011
[K.S. RADHAKRISHNAN, J.]
though such interest is not expressly mentioned in the A
conveyance or other instrument.
(3) 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 8
the property has been removed from the provisions of this
Act as provided in Sections 14 and 22. Any covenant to
the contrary shall be null and void.
(4) Each apartment owner may use the common areas and
facilities in accordance with the purpose for which they are C
intended without hindering or encroaching upon the lawful
rights of the other apartment owners.
(5) The necessary work of maintenance, repair and
replacement of the common areas and facilities and the D
making of any addition or improvements thereto shall be
carried out as provided herein and in the bye-laws.
(6) The association of apartment owners shall have the
irrevocable right, to be exercised by the Manager or Board
of Managers thereof, to have access to each apartment E
from time to time during reasonable hours as may be
necessary for the maintenance, repair and replacement of
any of the common areas and facilities therein or
accessible there from or for making emergency repairs
therein necessary to prevent damage to the common F
areas and facilities or to another apartment or apartments."
Declaration:
32. The Apartment Act casts an obligation on the colonizer G
to file a statutory declaration. Section 6 read with Section 3(f)
of the Apartment Act clearly indicates that clauses 1 to 8, except
7 of Section 3(f) are to be provided by the colonizer to the
apartment owners and each apartment owner is entitled to an
undivided interest in the common areas and facilities, in the
percentage expressed in the declaration. The only exception H
1012 SUPREME COURT REPORTS [2013] 16 S.C.R.
A is clause 7, which gives a right to the colonizer either to provide
or not to provide in the declaration, the community and
commercial facilities referred to in Section 3(3)(a)(iv) of the
Development Act. There is a marked difference between
"common areas and facilities" and "community and commercial
s facilities". A colonizer is duty bound to provide all the common
areas and facilities as per Section 3(f), except community and
commercial facilities referred to in Section 3(f)(7). "Common
areas and facilities" referred to in Section 3(f)(7) of the
Apartment Act has a co-relation with the "Community and
c Commercial facilities" referred to in Section 3(3)(a)(iv) of the
Development Act. It is for that reason that a discretion has been
given to the colonizer to either provide the same or not to
provide the same in the declaration referred to in Section 3(f)
of the Apartment Act. The expression "may" used in Section
D 3(f)(7) of the Apartment Act clearly indicates that no duty is cast
on the colonizer to give an undivided interest over those
community and commercial facilities exclusively to the
apartment owners of a particular colony, since the same have
to be enjoyed by other apartment owners of DLF City, Phase
I, II and Ill as well. Even otherwise, the colonizer could not have
E parted with his ownership rights exclusively to one Colony
alone.
33. Section 11 of the Act deals with "contents of
declaration" which is extracted below:
F
"11. Contents of declaration - (1) The declaration shall
contain the following particulars, namely :-
(a) description of land on which the building and
improvements are to be located and whether the
G land is freehold or leasehold;
(b) description of the building stating the number of
storeyes and basement, the number of apartments
and the principal materials of which it is or is to be
H constructed;
DLF LIMITED v. MANMOHAN LOWE AND OTHERS 1013
[K.S. RADHAKRISHNAN, J.]
(c) the apartment number of each apartment and A
statement of its location, approximate area, number
of rooms and immediate common area to which it
has access and any other data necessary for its
proper identification;
B
(d) description of the limited common area and
facilities;
(e) description of the limited common area and
facilities, if any, stating to which apartment their use
is reserved; · C
(f) value of the property and of each apartment and the
percentage of undivided interest· in the common
areas and facilities appertaining to each apartment
and its owner for all purposes, including voting and D
a statement that the apartment and such
percentage of undivided inter·est are not
encumbered in any manner whatsoever or not on
the date of the declaration;
. (g) statement of the purposes for which the building E
and each of the apartments are intended and
restricted as to ljse;
(h) the name ofa person to receive service of process
in the cases hereinafter provided, together with the F
residence or place of business of such persons
which shall be within the cit>'I town or village in which
the building is located; ·
(i) . provisions as to the percentages of votes by the. G
: apartment owners which shall be determinative of
whether to rebuild; repair; restore or sell· the.
property in the event of damage or oestructio.n of
all or part of the property; · · ·
. . .
0) . any other details in connection with the property H
1014 SUPREME COURT REPORTS (2013] 16 S.C.R.
which the person executing the declaration may
deem desirable to set forth consistent with this Act;
and
(k) The method by which the declaration may be
amended consistent with the provisions of this Act.
(2) A true copy of each of the declaration and bye-laws and
all amendments to the declaration or the bye-laws shall be
filed in the office of the competent authority:"
"Contents of deed of apartment" is dealt with in Section
12 of the Act which reads as follows:
"12. Contents of deed of apartment. - (1) The deed of
apartment shall include the following particulars, namely :-
(a) a description of the land as provided in Section 11
or the postal address of the property, including in
either case the number, page and date of executing
the declaration, the date and serial number of its
registration under the Indian Registration Act. 1908
and the date and other reference, if any, of its filing
with the competent authority;
(b) the apartment number of the apartment in the
declaration and any other data necessary for its
proper identification;
(c) statement of the use for which the apartment is
intended and restrictions on its use, if any;
(d) the percentage of undivided interest appertaining
to the apartment in the common areas and facilities;
and
(e) any further details which may be desirable to set
forth consistent with the declaration and this Act.
DLF l.JMITED v. MAN MOHAN LOWE AND OTHERS 1015
[K.S. RADHAKRISHNAN, J.]
(2) A true copy of every deed of apartment shall be filed A
in the office of the competent authority."
34. Section 13 of the Act states that the declaration and
all amendments thereto and the deed of apartment in respect
of each apartment and the floor plan of the building referred to
B
in sub-section (2) shall be registered under the Indian
Registration Act.
35. If we scan through the above mentioned provisions,
what is discernible is that each apartment owner shall be
entitled to an undivided interest in the common areas and c
facilities in the percentage expressed in the declaration and
such percentage shall be computed by taking as a basis the
value of the apartment in relation to the value of the property.
Common areas and facilities shall also remain undivided and
the apartment owner or any other person can use the common D
areas and facilities in accordance with the purpose for which
they are intended without entering or encroaching upon the
rights of other apartment owners. Apartment owners are entitled
to an undivided interest in the common areas and facilities in
the percentage expressed in the declaration, within the E
meaning of Section 3(f) (1) to (6) and (8) and it is also open to
the colonizer to provide, at its own cost, the community and
commercial facilities referred to in clause 7 of Section 3(f) read
with Section 3(3)(f)(iv) of the Development Act by including
them in the declaration. Colonizer cannot also, under certain F
circumstances, confer any undivided interest to an exclusive set
of apartment owners to the detriment of similar apartment
owners, who have apartments in other phases of a larger colony
or city. Apartment owners are, therefore, not entitled to an
undivided interest or possession over those community and
G
commercial facilities, referred to in Section 3(3)(a)(iv) of the
Development Act, unless specifically provided by the colonizer
in the statutory declaration.
Ownership Vs. User:
H
1016 SUPREME COURT REPORTS [2013] 16 S.C.R.
A 36. We have clearly indicated that the ownership right over
the land earmarked for schools, hospitals, community centers
and other community buildings referred to in Section 3(3)(a)(iv)
of the Development Act vests on the colonizer. That ownership
can be divested, as already indicated, by the colonizer through
B a declaration under Sections 11 to 13 read with Section 3(f)
of the Apartment Act. The colonizer has to provide those
facilities in discharge of its legal obligations under the
Development Act and the Act itself has recognized its or his
legal ownership over the area set apart for those facilities under
c Section 3(3)(a)(iv) of the Act. All the same, the right to enjoy
those facilities referred to in Section 3(3){a)(iv) of the
Development Act, whether shown in the declaration or not,
under the Apartment Act, cannot be restricted or curtailed and
the apartment owners have no other right, except the right of
D "user". Community centers, nursery schools, shops etc.,
therefore, being part of the approved layout plans by the DTCP,
can be used by the apartment owners and, being part of the
larger colony, are intended for independent use of all the
apartment owners having direct exit to common areas, to the
public street, road, etc. All those facts would indicate, so far
E as apartment owners are concerned, they have only a right of
user, so far as the facilities provided under Section 3(3)(a)(iv)
of the Development Act are concerned.
37. Learned counsel for respondents sought to argue that
F the Silver Oaks Apartments is a 'gated' colony and, therefore,
the developments which have taken place inside the boundary
walls of that colony are to be treated as parts of internal
development works and, therefore, these are parts of common
areas. In this very direction, it was further submitted that these
G are the necessary and essential facilities which have to be
provided to the flat owners by the developers, for the common
use of the flat owners. Though, this argument appears to be
attractive, it has no merit when we examine the nature of
structures developed by the developer i.e. the appellant to
H which it is claiming its exclusive right. These structures are two
DLF LIMITED v. MAN MOHAN LOWE AND OTHERS 1017
[K.S. RADHAKRISHNAN, J.]
nursery schools, three shops and one community centre, which A
cannot be treated as "common areas and facilities" within the
definition of Section 3(f) of the Act. As already pointed out
above, they are parts of planning for larger area, which plans
were submitted by the appellant. It is not meant for the exclusive .
use of the flat owners of Silver-Oaks Apartments. Position B
would have been different had these been integral parts of the
facilities, in the sense that these facilities are essential for the
enjoyment of the flats.
38. Common passages, staircases, lifts etc. are the C
examples of .such common areas and facilities. Likewise, stilt
parking area may be treated as part of common areas and
facilities, in certain circumstances. Here these structures are
the part of the larger area of about 130 acres in respect of
which 7 licenses were obtained for development of the colony.
Silver Oaks Apartments, which comprises of 14. 75 acres, is D
only a part thereof. The nursery schools, shops and community
centre are meant for the development of the entire colony and
are not confined only to these apartments, as already noted in
detail above. Further, as per our detailed discussion
hereinabove, it is clear that the developer is given right to E
transfer these "community buildings and community centers".
Likewise, even schools cannot be termed as part of "integral
development" use whereof would be confined to residents of
these apartments. Even the shops which are inside the
boundary walls have their opening from outside to enable the F
shopkeepers to cater to the customers not only from these
apartments, but outsiders as well. Therefore, on these facts, we
are not impressed by the argument predicated on "gated
colony".
G
Cost not on Apartment owners:
39. We have found that the Colonizer is legally obliged
under Section 3(3)(a)(iv) of the Act to construct at his own cost
the community and commercial facilities stipulated therein and
an agreement has to be entered into by the Colonizer with the H
1018 SUPREME COURT REPORTS [2013] 16 S.C.R.
A DTCP under the Development Act by which the Colonizer is
prohibited by law from recovering the cost of providing those
facilities from the apartment owners. The operative portion of
the agreement executed by the colonizer reads as follows:
"U) That only convenient shopping sufficient for
8
requirement of the Group Housing will be allowed
which shall be approximate one shop per one
thousand persons, covering a maximum area of
200 sq. ft. per shop.
c (k) That adequate educational, health, recreational and
cultural amenities to the norms and standards
provided in the respective Development plan of the
area shall be provided.
D The owner shall at his own cost construct the
primary-cum-nursery school, community building/
dispensary and first aid centre on the land set apart
for this purpose, or if so desired by the Govt. shall
transfer to the Govt. at any time free of cost land
thus set apart for primary cum nursery school,
E
community building/dispensary and first aid centre,
in which case the Govt. shall be at liberty to transfer
such land to any person or instruction including a
local authority on such terms and conditions as it
may lay down.
F
(o) That the owner shall abide by the provisions of the
Haryana Apartment and Ownership Act, 1983.
(p) That the responsibility of the ownership of the
G common areas and facilities as well as their
management and maintenance shall continue to
vest with the colonizer till such time the responsibility
is transferred to the owners of the dwelling units
under the Haryana Apartment and Ownership Act,
1983."
H
DLF LIMITED v. MANMOHAN LOWE AND OTHERS 1019
[K.S. RADHAKRISHNAN, J.]
40. Section 3(3)(a)(iv) of the Development Act read with A
the above-mentioned clauses in the agreement would indicate
that ownership of the portion of the land set apart for the
common areas and facilities referred to therein vest with the
Colonizer so also the obligation "at his own cost" to provide
those facilities in the land set apart for the said purpose. The B
Colonizer cannot recover cost of land or the amounts spent by
him for providing those facilities from the apartment owners. It
is for the said reason that clause 7 of Section 3(f) of the
Apartment Act has not made it obligatory, on the part of the
Colonizer to include the "community and commercial" facilities c
in the declaration. If the colonizer includes the same within the
declaration, then Section 6 of the Apartment Act will kick in,
consequently, the apartment owners would be entitled to the
undivided interest in respect of the community and commercial
facilities provided therein without bearing the cost incurred by D
the colonizer in purchasing the land and the cost of construction.
In our view, the colonizer could not have included the community
and commercial facilities referred to in Section 3(3)(a)(iv) of the
Development Act, because the same is meant for the benefit
of the entire colony, not merely the flat/apartment owners in one
E
part of the colony since they form part of the tay out plans duly
approved, which takes in plotted area and the group housing
societies area as well.
41. We have also gone through the Apartment Buyer's
agreement/conveyance deed. The exact extent of area sold by F
the colonizer to an apartment owner is mentioned therein. The
operative portion of the same reads as follows:
"1. That the Company hereby agrees to sell and the
Apartment Allottee hereby agrees to acquire the said G
premises as detailed below at the rate mentioned
against it and upon the terms and conditions set out
hereunder as mutually agreed by and between the parties
thereto.
H
1020 SUPREME COURT REPORTS (2013] 16 S.C.R.
A Particulars Apartment Super Area Rate (s) per
i.e. Bldg. No. No. (Appx) sq meter
121 82 98.28 sq. mtr. Rs.6189/-
3(a) That the Apartment Allottee agress that the Super
B Area for the purpose of calculating the sale price
in respect of the said premises shall be inclusive
of the area under the per!phery walls, area under
columns and walls within the Apartment, half of
the area of the walls common with other apartments
C adjoining the said apartment and also
proportionate share of the common area in the
building i.e. stairs, ramps, walk ways, lobbies,
lift wells, shafts and the like ....... "
42. Considerable reliance was placed by the apartment
0
owners on the Judgment of this Court in Naharchand
Laloochand Private Limited (supra). First of all, the Judgment
is not at all dealing with the community and commercial facilities
in a group housing society with reference to the provisions of
E Section 3(3)(a)(iv) of Development Act. The above-mentioned
Judgment was delivered in the context of the Maharashtra
Ownership of Flats Act, 1963 (MOFA) and the Development
Control Regulation (OCR) framed under the Maharashtra
Regional Town Planning Act, 1966. In that case this Court was
required to examine as to whether a stilt parking can be
F considered to be a garage under the definition of "flat" under
MOFA. As per the format provided under MOFA only a "flat" or
"dwelling unit" or "shop" or "garage" can be sold by a developer.
Stilt parking could not be separately sold in terms of the
provisions of the MOFA, a statutory format of the agreement
G and the provisions of the OCR. Such a restriction is not there
either under the 1975 Regulation Act or the Apartment Act and
there is no occasion to consider whether stilt parking can be
sold along with the apartment. In any view, the present case is
not concerned with the question of stilt parking. We are in this
H case, pointedly concerned with the facilities provided under
DLF LIMITED v. MANMOHAN LOWE AND OTHERS 1021
[K.S. RADHAKRISHNAN, J.]
Section 3(3)(a)(iv) of Development Act, consequently, the A
reasoning of Naharchand La/oochand Private Limited (supra)
are inapplicable to the facts of this case, if examined in the light
of the Regulation Act and the Apartment Act.
Competent Authority:
8
43. We are also of the view that the High Court has
committed an error in directing the DTCP to decide the
objections of the apartment owners with regard to the
declaration made by the colonizer. The Competent Authority is
defined under Section 3(i) of the Apartment Act. Section 11 (2) C
provides for filing of declaration in the office of the Competent
Authority. Section 24A of the Act prescribes penalties and
prosecution for failure to file a declaration and Section 24B
permits the prosecution only with the sanction of the Competent
Authority. In a given case if the developer does not provide D
common areas or faciliti~s like corridors, lobbies, staircases,
lifts and fire escape etc. the Competent Authority can look into
the objections of the apartment owners but when statute has
given a discretion to the colonizer to pro"'.ide or not to provide
as per Section 3(f)(7) of the Apartment Act the facilities referred E
to in Section 3(3)(a)(iv) of Development Act, in our view no
objection could be raised by the apartment owners and they
cannot claim any undivided interest over those facilities except
the right of user. In the instant case the apartment owners have
raised no grievance that they are being prevented from using F
the community and commercial facilities referred to in Section
3(3)(a)(iv) of Regulation Act, but they cannot claim an undivided
interest or right of management over them.
44. We may also refer to the contention raised by the
apartment owners that the Judgment in DLF Qutab Enclave G
(supra) is not applicable in view of the Haryana Development .
and Regulation of Urban Areas (Management) Act, 2003 which
came into force on 03.04.2003. We have gone through the
amended definition of "external development works". By virtue
of the amendment, the.scope of the said expression has been . H
1022 SUPREME COURT REPORTS [2013] 16 S.C.R.
A widened and the State Government has given a wider
discretion in expending the amount collected from the colonizer
as external development charges. The Amendment Act does
not seek to transfer an obligation of actually carrying out the
external development work upon the colonizer. The Statement
s of Objects and Reasons of the Bill of 2003 which led to the
amendment indicates that though the various decisions of the
High Court have gone in favour of the Department, the
amendment was necessitated to make certain provisions more
comprehensive. In other words, the amendment has no effect
c on the Judgment of this Court in DLF Qutab Enclave (supra).
45. We are of the view that the High Court has not properly
appreciated or applied the various statutory provisions of the
Regulation Act and the Rules framed thereunder, the terms of
D licences issued, agreements executed between the colonizer
and the DTCP vis-a-vis the various provisions of th~ Apartment
Act, the statutory declaration made by the colonizer and the
Sale Deeds executed between the parties. In such
circumstances, we are inclined to set aside the judgment of the
E High Court and dismiss the writ petition filed before the High
Court. The appeal is, therefore allowed. However, there will be
no order as to costs. Applications for intervention are allowed.
Contempt Petition (Civil) No. of2013(0.No.29500 of 12)
F 46.The interim orders passed by this Court are merged
in the aforesaid judgment. In such circumstances, no further
orders are necessary in the Contempt Petition and the same
is disposed of accordingly.
Bibhuti Bhushan Bose appeal Allowed
Search Indian case law
Ask in plain English, not just keywords. 25,000 AI words free, no card.
Try "Apartment ownership"Sign in to search