Societies, not builders, are eligible for revenue from advertising hoardings

By Legal Bureau

Earnings from hoardings are usually land up with the builders even though the hoarding may be atop the flat owner’s terrace.

Recently though in a landmark order the National Consumer Disputes Redressal Commission (NCDRC) upheld the order passed by the Central Mumbai District Consumer Forum (CMDCF) ruling that the builder should deposit future earnings from the hoardings with the society.

The CMDCF had passed an interim order, asking Tab Advertising to deposit its future payments with the society from August 2008 till the case is decided.

In the dispute, the society had maintained that the builders had not conveyed the property to the housing society within four months of the society’s registration as assured.

Tab Advertising, which had installed the hoarding, paid some amount to the society from November 2006 to December 2007. The society was registered in July 2007. However, the payment to the society stopped six months after the registration. The builders, however, pocketed their sum since July 2006.

The builders argued that as per clause 27 of the Sale Agreement with individual flat owners, they had clarified that they would retain the rights of the hoardings. The society’s lawyer, however, successfully argued that the clause should be struck down as it was against the Maharashtra Ownership of Flat Act (MOFA).

The builders and the company were asked to furnish account details of payments from July 2006 to August 2008. The National Consumer Commission held, “We are not inclined to interfere with the interim order passed by the district forum, which has been affirmed by the state commission.”

The builders maintain that there are pending suits over disputes related to this society and hence the matter is still sub-judice.