2. Considerable construction activity is carried on in Mumbai by individuals and corporates. Public Financial Institutions have come forward to provide very substantial financial assistance in shape of bridge loans and construction loans to Builders and Developers and Home loans to flat Purchasers. This financial output has given entirely a new dimension to the construction industry in Mumbai.
3. The construction industry is set to create more and more housing stock to provide the same to the ultimate users in Mumbai on ownership basis.
4. It is recongnised in most cases that the land Owner has no expertise, experience, infrastructure, resources, co-ordinating or organizing skills to undertake development work in respect of any developable piece of land. This responsibility can be undertaken only by Developers having the above attributes.
5. The construction activities of the Builders and Developers in Maharashtra are regulated by the Maharahstra Ownership Flats Act, 1963. The full title of the Act is
“The Maharashtra Ownership of Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer Act), 1963”.
The Act has a very wide amplitude and imposes various responsibilities on the Builders/Developers which they may ignore to discharge only under the threat of penal proceedings including imprisonment.
6. The Builders / Developers were found to indulge in unbusiness like and unethical activities which compelled the Legislature to step in and enact the Maharashtra Ownership Act.
7. I would make it clear that in this lecture I will only give gist of the main provisions of the Act without going into the technicalities of various sections.
8. The Act has been amended on quite a few occasions to plug some loopholes which came to light in course of its administration. However, in the interest of consumers and for controlling the activities of the Developers (which may be harmful to the consumer interest) there is considerable need for widening the scope of the Act and making more strigent provisions therein. This aspect will have to be considered by the Government on the consumer becoming more and more aware of his rights. Apart from the provisions of the Ownership Flats Act fortunately there is a wholesome trend as appearing from the several decisions of the Consumer Courts which have held that Developers selling flats on ownership basis are liable to the flat Purchasers for deficiencies in carrying out their obligations. It is held by the Consumer Courts that Builder/Developer while constructing and selling flats is supplying / rendering services and is answerable to the consumer for deficiencies in such services. Consumer Courts have succeeded in providing to an extent quicker and cheaper justice to flat Purchasers and/or their housing societies in respect of quite a few range of consumer grievances.
9. The Ownership Flats Act applies to the construction and sale of flats. The term flat has been given a wider definition in the Act. In Section 2 (a) the term ‘flat’ is defined to mean a separate and self contained set of premises used or intended to be used for residence, or office, or show room, or shop or godown or for carrying on any industry or business and includes a garage, the premises forming part of a building and includes an Apartment. Thus it would...