MOFA – No conveyance for 21 years – Director of Satellite Developers sentenced to  two years jail

 

MOFA – No conveyance for 21 years – Director of Satellite Developers sentenced to  two years jail


Builders violate the provisions of the Maharashtra Ownership of Flats Act (MOFA) with impunity. But MOFA contains harsh punishments which aggrieved purchasers of flats do not resort to for fear of retaliation or ignorance or both.

The following case is a good example how effective MOFA can be.

 


Facts

 

Ravindra Hingwala, one of the flat owners of a building in Ghatkopar, Mumbai, moved the Magistrate’s Court in 2006 against Kiran Amin, Director of Satellite Developers Pvt. Ltd.  (builder) for not completing the conveyance.  The completion certificate of the building was obtained in 1989. The mandatory housing society was registered in 1996. But conveyance has still not been given.

 

Hingwala told the Magistrate that he had purchased the flat from Jasmine Builders Pvt. Ltd. In 1992, Satellite Developers Pvt. Ltd. took over the rights and liabilities of Jasmine Builders Pvt. Ltd.


Hingwala argued that according to Section 11 of the MOFA, Kiran Amin, Director of Satellite Developers Pvt. Ltd. should have conveyed the property to the housing society within four months from the registration of documents.

 

Builders Arguments

 

The Builder contended that the Complainant could not move the court on his own in the absence of the co-operative housing society.

The Builder also contended that the fact that the question of conveyance is presently a subject of arbitration is a reasonable cause for not handing over possession of the plot to the Complainant and therefore, no offence under Section 13(1) of MOFA is made out.

 

The Builder further contended that new buildings were constructed by the accused in 2003 on the same land, which is required to be conveyed to Gayatri Dham, therefore conveyance cannot be executed in favour of it.

 

(Section 13(1) of MOFA provides that if the promoter is able to show reasonable cause because of which it is not possible to give conveyance, same could not constitute an offence under this Act.)  

 

Decision and Jail

 

Sri V V Patil, Magistrate at Vikhroli Court relied on the observations of the Sessions Court which had dismissed the appeal of the accused against the issuance of process in the case. The Sessions Court had observed that a Complainant, being a member of the society, is entitled to get conveyance on his behalf from the promoters under Section 11 of the MOFA. “Promoters are under legal obligation to convey the title and execute the documents in his favour. They did not convey with this legal provision. The Complainant is, thus, an aggrieved person,” the Sessions Court had said.

 

The Magistrate pointed out that the grounds of reasonable excuse raised by the accused has been rejected by the Bombay High Court and Supreme Court over the years in appeals filed by the accused. “Moreover, the offence was committed in June 1996, and there was no other construction on the land except Gayatri Dham building. Therefore, there was no excuse for the accused to withhold the conveyance,” the Magistrate held.

 

The Magistrate said, “For more than 10 years, the complainant is awaiting conveyance of the plot, which the accused failed to give. Considering the facts of the case, the conduct of the accused and intention of the legislature behind enacting the legislation, I am of the view that the accused be dealt with necessary punishment under the Act.”


Sri V V Patil, the Magistrate found Kiran Amin, Director of Satellite Developers Pvt. Ltd, guilty under the provisions of the Maharashtra Ownership of Flats Act (MOFA) and sentenced him to simple imprisonment for 2 years.

 

I am giving the link to the full decision:

http://services.ecourts.gov.in/ecourtindia/cases/display_pdf.php?filename=/orders/200349000972006_1.pdf&caseno=Summons%20Cases%20SS/4900097/2006&cCode=12&appFlag=

Criminal Action under MOFA

 

Criminal Cases under MOFA

Very few criminal cases are filed against builders and land owners under the Provisions of MOFA (Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) Act, 1963) and other sections of the IPC.

I do not know the exact reasons.  Most flat owners, and even lawyers, are not aware that violation of the provisions of MOFA is a criminal offence. Other flat owners are too scared of the builders and are often threatened by them.

In one of the rare cases, in August 2015, Sree Jugal Sreegopal Saraf, a resident of Pedder Road, Mumbai registered a cheating case against Praful Satra, Chairman and Managing Director of Satra Group of Companies and his colleagues.

According to the Complainant  Sree Jugal Sreegopal Saraf,  Praful Satra and his company, had approached him for an upcoming commercial project in Borivli called the Dream Mall.
Sree Jugal Sreegopal Saraf and his six friends booked six shops for a total amount of Rs. 6,91,79,500. Only after making the payments,  Sree Jugal Sreegopal Saraf and his six friends realized that the builder had cheated them by showing them forged documents because the project was under the Slum Rehabilitation Authority (SRA) Scheme.


The Economic Offences Wing of the Mumbai Police made investigations and arrested Praful Satra on 5 January 2016  for cheating 7 persons to the tune of Rs. 6.92 crores by selling an SRA Scheme as Commercial plot on the basis of forged documents.


Praful Satra’s Juhu JVPD Project

In 2011, Praful Satra, who developed a Juhu residential tower, was dragged to the Bombay high court for large-scale violations, including having car parking decks outside flats that allegedly could be later amalgamated into the flats’ carpet areas. The matter is now pending in the Supreme Court. Before the Supreme Court, Praful Satra has cited instances of 18 similar projects in Mumbai’s western suburbs to justify his case.


Of the 196 parking slots in this building, 99 are on habitable floors (stilt and podium), with nine on each floor. The average size of a flat in the tower was shown as around 2,000 sq ft. However, the builder provided an equivalent space outside each flat for car decks.

The BMC said the total car deck area in the building was around 75,000 sq ft, which fetched the builder an additional Rs 150 crore (sold at the prevailing rate of about Rs 20,000 per sq ft in Juhu). Besides basement and podium parking, the builder was allowed to construct nine car park decks on each floor of the building, which has three wings of 11 floors each and 33 flats. The project was approved when Jairaj Phatak was BMC chief.

Satra’s JVPD Scheme project has become a test case for builders who build car parking slots adjoining apartments on higher floors. Civic activists allege that these slots are not really for parking, but are sold illegally at market rates and later surreptitiously amalgamated into the flat by the owner in connivance with the developer.

 The entire news article about Satra’s arrest  is available at the following link:

http://www.mid-day.com/articles/mumbai-builder-held-for-duping-buyers-of-rs-7-crore/16835156