Land Owners Can't Retain Any Portion Once Sale Deed Is Executed Over Entire Area For Construction Of Apartment Complex: Karnataka High Court

The Karnataka High Court recently said that land owners cannot retain any portion of land once the sale deeds were executed in respect of the entire area for the purpose of the construction of an apartment complex.

A Single judge, Justice N S Sanjay Gowda, allowed the petition filed by Keerthi Harmony Apartment Owners Association, and set aside the licence granted by Bruhat Bengaluru Mahanagara Palike (BBMP) to developer Hanumantha Reddy for constructing an apartment complex.

It said “The grant of approval by the BBMP to build a new apartment complex would be wholly illegal and as such, Annexures 'A' and 'B' are accordingly quashed.”

On 28.01.2005, M/s. Keerthi Estates Private Limited had entered into a Joint Development Agreement with respondent Nos.5 to 12 (land owners) under which it was agreed that the Builder would construct an apartment complex over an area measuring 05 acres 16 guntas i.e., 2,35,224 square feet, which belonged to the land owners and that they would share the built-up area in a proportion agreed to under the Joint Development Agreement.

The Bangalore Development Authority approved the plan provided the Builder should execute a relinquishment deed in respect of the area reserved for two roads. Thus the entire property was bisected into two bits. In the major portion of the land, the apartment building were to be built. In the particular plot, measuring 1104.40 sq.mtr, a Rain Water Harvesting Unit and Sewage Treatment Plant (for short, 'RWHU & STP') were supposed to be set up.

Accordingly sale agreements were executed wherein it was indicated that the Schedule 'A' property was the entire property measuring 5 acres 16 guntas or 2,35,224 square feet. Howver, the builder had set up the RWHU & STP within the apartment complex and not as indicated in the approved plan.

On 03.04.2018, the land owners ade an application to the BBMP for permission to construct an apartment complex, comprising of a basement, stilt, ground plus three floors, in the area measuring 990.54 sq.mtr, on the very area in which according to the original approved plan, the RWHU & STP were to be established.

The BBMP, considering this bit of property to be an independent bit of property which had been retained by the owners, has proceeded to grant its approval of the building plan, for constructing an apartment complex.

The petitioner contended that the flat owners had purchased an undivided interest in the entire property owned by the land owners to an extent of 2,35,224 sq.ft. and by virtue of these alienations made by the land owners, the land owners had not retained any portion of 05 acres 16 guntas exclusively.

Further, even if the RWHU & STP had been established within the main property in which the apartment complex had been constructed, that would not result in the title remaining with the land owners.

The land oweners opposed the plea submitting that even as per the approved plan, 1104.40 sq.mtr. had been reserved for future development by the owners and it was therefore clear that this extent of the land was the property belonging to the land owners and had not been conveyed to the apartment owners. Moreover, what was conveyed to the owners of the apartment complex was only the built up area and they could not therefore claim any extent of land over and above the said built up area of the plot.

It was said that BBMP had accepted the deviations from the originally approved plan and had levied a compounding fine and as a consequence, the area which had been earlier earmarked for establishing a RWHU & STP became free for the independent use of the land owners.

Finally it was said that owners of the Apartment can have absolutely no use for this portion of the land which was separated from the apartment complex by a 15 meter road and the attempt by the petitioner's Association was only to blackmail and to extract money from the Builder and the land owners.

Findings:

The bench referred to Section 7 of the Karnataka Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1972, which bars any alterations in the structures without the consent of the persons who have agreed to purchase the apartment flats.

The bench said “On the plan being approved by the BDA on 29.03.2007 which stipulated that the RWHU & STP would have to be established in the bit of property abutting the road, the Builder could not have changed this location.”

It added “Even if the Planning Authority agreed for this change of location, the requirement of securing the consent of the persons who had agreed to purchase the flat would still be needed.”

Referring to Section 3(f)(1) of the Karnataka Apartment Ownership Act, 1972, which provides that if a deed of declaration has been executed by the apartment owners and the provisions of the Act are made applicable, the court said that a common area would mean the land on which the building is located. Thus, in law, the entire land on which the building is located becomes a common area.

It noted the deed of declaration in which they have declared that the entire extent measuring 2,35,224 sq.ft. is the area on which the apartment complex is constructed. Schedule 'B' to the sale deed also stipulates that an undivided interest, specified in the sale deeds, of the entire area was being conveyed to the owners of the apartment complex.

The court held “In light of the clear stipulation that an undivided interest in respect of the entire land had been conveyed to all the apartment owners; merely because a lesser extent was stipulated as a built up area, that would never lead to the inference that the owners had retained the remaining portion.”

Allowing the petition the court said “The BBMP could not have entertained the plea of the erstwhile land owners who put forth the representation that they had retained an extent of 1104.40 sq.mtr. and were entitled to put up a new apartment building on that extent.”

Appearance: Advocate Beena P K for Petitioners

Advocate Sammith S FOR R-1.

Advocate K.S Mallikarjuna Reddy FOR R-2 TO R-4.

Advocate M.Ramachandra Reddy for R-5 TO R-7, R-9 TO 12; SRI.K.KRISHNE., ADVOCATE FOR R-13.

Citation No: 2025 LiveLaw (Kar) 178

Case Title: Keerthi Harmony Apartment Owners Association AND M/S KEERTHI ESTATES PVT. LTD & Others

Case No: WRIT PETITION NO. 19151 OF 2021

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