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In a landmark ruling that significantly affected the real estate sector across India, the Supreme Court in Nahalchand Laloochand Pvt. Ltd. v. Panchali Co-op. Housing Society Ltd. (2010) 9 SCC 536 held that a builder cannot sell open or stilt parking spaces as independent units to individual flat purchasers. The Court held that open parking spaces and stilt parking are common amenities forming part of the common areas of a housing project and cannot be treated as saleable "garage" units under the Maharashtra Ownership Flats Act or its equivalents. This ruling has been widely applied across Indian jurisdictions.
What the Supreme Court Ruled
The Supreme Court distinguished between a "garage" — which is an enclosed, covered structure forming a separate unit — and an "open parking space" or "stilt parking space." The latter, the Court held, cannot be the subject of independent sale. A stilt parking space is a covered area created as a structural necessity beneath the raised floors of a building and forms part of the building's common amenities. The Court directed that such spaces must be treated as part of the common areas to be maintained by the housing society or residents' association, and not as a separately purchased asset of any individual flat owner.
Implications for NRI Flat Buyers
NRIs who purchased flats in India and were sold parking spaces as separate units — with a separate agreement and separate payment — have a strong legal basis to seek refund of the amount paid for the parking space, or alternatively, to claim that the parking entitlement now forms part of the common property to which all residents have equal access. If the builder has already transferred the parking space to another buyer, the aggrieved flat owner can file a complaint before the District Consumer Disputes Redressal Commission or the RERA authority for the state in question.
RERA's Position on Parking Spaces
The Real Estate (Regulation and Development) Act, 2016 (RERA) and most State RERA authorities have adopted the position consistent with the Supreme Court's ruling. Builders are required to disclose the total carpet area being sold, and parking spaces — unless they qualify as enclosed garages — are not to be sold separately. Several RERA authorities have imposed penalties on developers found selling open or stilt parking as independent units. NRIs who purchased such spaces from developers after the introduction of RERA in their state can file a RERA complaint in addition to or instead of a consumer forum complaint.
How to Seek Remedy
The relief available depends on the specific facts — whether the builder is still active, whether the housing society has been registered, whether RERA is applicable, and whether money was separately paid for the parking. The primary avenues are:
- RERA Complaint: If the project was registered under RERA, a complaint before the RERA authority of the relevant state seeking refund of the parking amount or correction of the title is the most direct route.
- Consumer Forum: If RERA is not applicable (pre-RERA projects), a complaint before the District Consumer Disputes Redressal Commission is an effective remedy. No advocate is strictly required, though legal assistance is advisable.
- Civil Suit: Where the amount involved is significant or the dispute is complex — such as where title to the parking space has been transferred to a third party — a civil suit for declaration and injunction before the civil court is the appropriate remedy.
NRIs in the USA, UK, or Canada who face this issue can instruct a local advocate through a Power of Attorney to represent them before the relevant forum. Most RERA proceedings allow for virtual hearings, making physical presence unnecessary.
Key Takeaways for NRI Property Buyers
If a builder has sold you a parking space as a separate unit, do not assume that the transaction is legally valid simply because you hold an agreement or a payment receipt. The Supreme Court's ruling applies across India, and the money paid for an unlawfully sold parking space is recoverable. Legal advice should be sought before accepting any settlement proposed by the builder or the housing society, as such settlements sometimes waive rights that are otherwise well-founded in law.
How a Law Firm Can Assist
An individual is entitled to file a complaint before the Consumer Forum or RERA without legal representation. However, the assistance of a lawyer experienced in real estate disputes — particularly in cross-border NRI matters — can be valuable. A lawyer can assess whether the Supreme Court ruling in Nahalchand applies on the specific facts, identify the correct forum, draft the complaint, attend hearings, and advise on whether any settlement offered by the builder is in the client's best interests. For NRIs based abroad, having a reliable advocate on the ground in India avoids the cost and inconvenience of travel.