CRIMINAL COMPLAINT FOR OFFENSES UNDER MOFA AGAINST BUILDER – Sec 13

Yes you can file a criminal complaint against builders if cheated under the Maharashtra ownership flats Act.

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By Ajit R. Powar

updated on 06.08.2024

Criminal Complaint against Builders –

Based on the observations of The Bombay High Court in a recent Judgment, for all offenses under Mahatarshtra Ownership of Flats Act ( MOFA) also you can get an FIR filed by a concerned police officer as they are cognizable and non-bailable offenses being punishable with imprisonment which may extend to three years. Well for a long time, it was a standard practice that Police were avoiding Filing an FIR / taking cognizance of a complaint under the provisions of MOFA more particularly in respect of offense under section 13(1) of the Act.

Some corrective steps were taken by the Special IGP Maharashtra Police in 2016 in respect of criminal complaints against builders, by issuing a Circular directing the respective police authorities to take action against errant builders by registering complaints and initiating Penal action against them. This circular has effectively helped allottees who have been finding a fairly good response from the police in filing an FIR in a complaint under MOFA . While it is an accepted position that the offense under section 13(2) of MOFA ( committing criminal breach of trust of any amount advanced or deposited under section 5) is cognizable and non-bailable, we have heard professionals expressing their apprehensions about the police being able to take cognizance for offenses under section 3,4,10 & 11  with punishments less than three years. It is also not uncommon to hear about cognizance not being taken in respect of offenses under section 13(1) of MOFA ie. contravention or non-compliance of provisions of sections 3,4,5 (without the element of criminal breach of trust), 10 & 11.

The issue involved with offenses under section 13(1) of MOFA as referred to above, was in respect of the punishment prescribed. The section provides that ‘if the promoter fails to comply with or contravenes the provisions of section 3,4,5, 10 & 11 he shall, on conviction, be punished with imprisonment for a term which may extend to three years or with fine or with both.’ As the punishment was up to to three years and not three years or more it was not being interpreted as a cognizable offense as is prescribed by part II of schedule I of CR.p.c. (classification of offenses against laws other than IPC).

Part II of Schedule I of CR.pc. classifies offenses in, laws other than IPC on the basis of punishment imposable for such offenses. The offenses punishable with imprisonment for life or imprisonment for more than 7 years or punishable with imprisonment for three years and upwards but not more than 7 years are classified as cognizable and non-bailable.

However, recently The Bombay High Court, in the case of Piyush Shubhasbhai Ranipa  vs  State of Maharashtra, reiterated while considering some of its own precedents that ‘ bare reading of this part II of Schedule I of Cr.pc. shows that, if offenses in other laws are punishable with imprisonment for three years and upwards then the offenses are cognizable and non-bailable. Wherever it is possible to impose punishment extending to three years, this category would apply, because in such offenses it is possible to impose a sentence of exactly three years. In such cases, offenses would be cognizable & non-bailable. This judgment plays an important role in respect of criminal complaint against builders which were earlier treated purely of civil nature.

Therefore by applying the same analogy, as the offence under section 13(1)  is punishable with imprisonment for a term which may extend to three years, the said offense is to be treated as a cognizable and non-bailable offense. Therefore a police officer is required to take cognizance of the same and consequently, the officer has to file an FIR.

Section 3 of MOFA lays down the general liabilities of the Promoter, Section 4 requires the promoter to enter into a registered agreement for sale with the buyers before he accepts any advance from them, Section 5 requires the Promoter to maintain an  Account for sums taken as advance and deposit and disburse them for the purposes for which they are given, Section 10 requires him to take steps for formation of a cooperative society or company and section 11 requires the Promoter to convey the title as per the provisions contained therein. Any non-compliance or contraventions of these provisions of MOFA would amount to an offence under section 13(1) and of course, section 13(2) which is a cognizable and non-bailable offense. If the concerned Police officer does not take cognizance you can approach the Magistrate under section 156(3) of CR.pc. to Order an Investigation or File a complaint under section 200 of CR.pc. before the Magistrate.

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The contents of this article are the views and opinions of the author on the subject matter. The readers are expected to take expert advice based on the facts and circumstances of their case.