In a significant ruling on June 10, 2025, the High Court of Judicature at Bombay, presided over by Justice Gauri Godse, overturned an interim injunction that had halted construction and sales in a project by M/s. Krishna Constructions. The appeal, filed by Krishna Constructions (defendant nos. 1-3), challenged an interim order issued on July 16, 2024, by the 15th Joint Civil Judge, Pune, in a suit brought by a flat purchaser (respondent no. 1).
The case, Appeal From Order No. 744 of 2024, centered on allegations by the plaintiff, a purchaser of a flat in the Lotus Court housing complex, that the developers had illegally constructed additional floors and altered the sanctioned layout without informed consent. The plaintiff had sought rectification of his agreement under The Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 ("MOFA"), specific performance of the rectified agreement, and a declaration that the additional floors and corresponding flat purchase agreements were illegal.
The trial court had partially granted the plaintiff's request for a temporary injunction, restraining the promoters from further construction on the additional floors, dealing with or creating third-party interests, and handing over possession to purchasers of these additional units. It also restrained the Pune Municipal Corporation (defendant no. 4) and its officers (defendant nos. 5-6) from sanctioning or revising plans for the additional construction not disclosed to the plaintiff, and prevented other flat purchasers (defendant nos. 8-105) from creating third-party interests.
However, the High Court found that the trial court had "misinterpreted all the relevant terms and conditions of the agreement" and "completely ignored that the substantive prayer in the suit is to challenge the clauses in paragraph 11 of the suit agreement, which pertain to the informed consent of the plaintiff for the proposed additional construction."
Key Arguments and Court's Findings:
Informed Consent: The appellants argued that the plaintiff's agreement, specifically paragraph 11, contained clauses indicating "specific and informed consents" regarding additional construction and the full potential of the land. The High Court, prima facie, agreed, stating that "the clauses in agreement contain the plaintiff's informed consent as contemplated under Section 7 of the MOFA, and the appellants/defendants appear to have complied with the requirement of true and full disclosure, as contemplated under Section 3 of MOFA."
Plaintiff's Conduct and Delay: The High Court noted the plaintiff's delay in filing the suit (September 14, 2023), after construction on additional floors was "completed and third-party rights were already created." Furthermore, the court highlighted that the plaintiff had, in a letter dated November 25, 2023, sought possession of the suit flat without raising any grievance about the additional construction. The court found the plaintiff's grounds in the suit to be an "afterthought."
Termination of Agreement: The promoters had intimated the cancellation of the plaintiff's agreement with a refund on November 27, 2023, after the suit was filed. The court observed that the plaintiff had not challenged this termination in the suit.
Balance of Convenience and Irreparable Loss: The High Court criticized the trial court for ignoring the "three golden rules for the grant of a temporary injunction: prima facie case, balance of convenience and irreparable loss." It stressed the "drastic consequences" of the injunction on the promoters and the flat purchasers of the additional floors (defendant nos. 8-105), whose rights were created and who would suffer "irreparable loss" that "cannot be compensated in terms of money."
Previous Judgments: The court extensively referred to past judgments, including Jayantilal Investments vs. Madhuvihar Co-op Housing Society and Others and Manratna Developers, Mumbai vs. Megh Ratan Co-operative Housing Society Ltd, to articulate the legal principles surrounding informed consent and a promoter's right to develop property to its full potential in accordance with sanctioned plans. It emphasized that if the entire project's potential is disclosed at the time of agreement, prior consent for additional construction in accordance with layout plans and regulations may not be required.
The High Court concluded that the trial court's decision was "perverse and contrary to the well-settled legal principles" and that the injunction was "not sustainable." Consequently, the appeal was allowed, and the impugned judgment and order of the lower court dated July 16, 2024, were set aside.
Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) Act, 1963
