The Bombay High Court, through a judgment dated April 4, 2025, delivered by Justice Somasekhar Sundaresan, has directed Macrotech Developers Ltd., the builder of Lodha World Towers in Worli, to collect Federation Common Area Maintenance (FCAM) charges at the rate agreed upon in the original agreement between the parties. This order shall remain in effect until the completion of arbitration proceedings.
The petitions were filed by residents of Lodha World Towers, including high-net-worth individuals like Santanu Sengupta and others, under Section 9 of the Arbitration and Conciliation Act, 1996. They sought interim relief for full access to all common amenities such as the clubhouse, gym, spa, and other facilities. The residents argued that despite paying FCAM charges upfront, they were denied access to these services by the developer.
The residents claimed they had paid FCAM charges for 30 months in advance, as per the agreement. These charges were initially set at ₹4.5 per square foot and subject to annual inflation of 7.5% to 10%. Any increase beyond that required mutual consent. However, Macrotech Developers allegedly escalated the charges to ₹9.92 per square foot without such consent and blocked residents’ access to amenities due to alleged defaults.
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In response, Macrotech contended that only a few residents had objected, while most continued paying the revised charges without protest. The developer stated that allowing defaulting residents access would be unfair to those who regularly paid.
The Court calculated that using a 10% simple annual escalation, the charges would only increase by ₹3.6, reaching ₹8.10 per square foot in eight years. When calculated on a compounded basis, ₹4.5 would rise to ₹9.65 per square foot in the same period—still less than the amount billed.
The Court highlighted that the agreement did allow the developer to deny access to amenities in case of non-payment. However, the rate of FCAM charges also had to strictly follow the agreement terms.
"The Court held that FCAM charges must be provisionally computed at ₹4.5 per square foot from October 2017, applying a 10% compounded annual escalation rate.""The court questioned how the charges could rise from ₹4.5 to ₹9.92 per square foot, even under a 10% annual increase, since the FCAM charges started from October 2017."
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- Calculate provisional FCAM charges for each petitioner within one week and share the computation.
- Petitioners must pay the charges within two weeks of receiving the calculation.
- Upon payment, Macrotech must restore full access to common amenities without placing unreasonable restrictions.
Additionally, the Court directed the developer to:
- Submit an audited report within four weeks from the date of arbitration, detailing commercial use of common areas and income earned since October 2017.
- Disclose information about unsold flats and the corresponding FCAM charges to enable fair distribution of maintenance costs during arbitration.
All payments made under this order will be subject to adjustments depending on the final arbitral award.
"This order ensures a fair and balanced interim solution while arbitration continues, without compromising the rights of either party."
The case was concluded accordingly.
Case Title: Santanu Sengupta & Ors. v. Macrotech Developers Ltd.
Case Number: 2025:BHC-OS:5828
Judgment Date: April 4, 2025
Judge: Justice Somasekhar Sundaresan
Petitioners' Lawyers: Mr. Navroz Seervai, Sr. Advocate with AMR Law
Respondent's Lawyers: Mr. Sharan Jagtiani, Sr. Advocate with Wadia Ghandy & Co.
