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Bombay High Court dismisses corporates’ plea to form condominium at business park in Mumbai’s Lower Parel


TheBombay High Courthas dismissed a joint petition filed by Cipla,

HDFC Bank

,Tata Capitalthat had challenged formation of co-operative society of the unitholders of PeninsulaBusiness ParkinLower Parelbusiness district of Mumbai.

The principal challenge was on the basis that an earlier order that directed the formation of a co-operative society did not hear did not hear CIPLA, HDFC Bank and Tata Capital before passing the order.

Cipla, HDFC Bank, Tata Capital had purchased their offices in Peninsula Business Park from

Peninsula Land

in and around 2012. Peninsula executed a Deed of Declaration dated 9th August 2016 to form a PBPCondominiumfor all units sold in Peninsula Park under the provisions of Maharashtra Apartment Ownership Act (MAO Act). Peninsula had informed the Deputy Registrar of Co-operative Societies about this on 10th August 2016.

On 15th February 2019, one of the unit purchasers Kamal Kishore Sharma filed an application to form a Co-operative Society of the unit holders of Peninsula Park.

On the basis of the application, the authority under the Maharashtra Societies Act 1960 (MCS Act), on 9th October 2019, directed the Deputy Registrar to register form Co-op Society for the units of the commercial complex. Following this, the Deputy Registrar issued a certificate of registration for formation of Co-op Society.

While dismissing the writ petition, the division bench of RD Dhanuka and V G Bisht, reiterated the principle that MOFA is applicable to ’apartments’ governed under MAO Act.

“The grievance of Cipla, HDFC Bank and Tata Capital is understandable. An apartment owner in a condominium, not only owns the apartment or unit but is also entitled to proportionate right in the land below the building where the apartment is situated. On the other hand, in a co-operative society, it is the Co-operative Society who is the owner of the building and land, and a flat owner is an allottee of a flat and holds shares in the capital of the Co-operative Society,” said Huzefa Nasikwala, founding partner of Nasikwala Law Office.

According to him, the court has reiterated that a duty is cast on the promoters of a project to form society, failing which flat owners can take steps to form the society.

The court also held that CIPLA, HDFC Bank and Tata Capital were required to inform the Registrar and not Deputy Registrar under the provision of Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) Act, 1963 (MOFA).

The Court also took into account that even CIPLA, HDFC Bank and Tata Capital had given consent to form Co-op Society prior to 15th February 2019 and had subsequently withdrawn it.

The court has observed that Cipla, HDFC Bank and Tata Capital were now in minority opposing formation of Co-operative Society. The order explains the interplay between MOFA, MAO Act and MCS Act as regards formation of Co-operative Societies. The court stressed the fact that, under Section 10 of provisions of MOFA, the duty is cast on the promoter to form the Society, and if no action is taken by it, the flat purchasers can approach competent authority to form the Co-op Society.

Source

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