Office Floors Cannot Become Service Apartments: Madras High Court's Greams Dugar Decree

Greams Road in Chennai has an office building called Greams Dugar. Two of its owners bought 4,492 square feet on the sixth floor and 3,209 square feet on the seventh. They began work inside the floors. The owners association says the plan was to turn office space into service apartments, with many rooms, each with an attached toilet and kitchen. The owners say they were only doing internal partitions with light materials, replacing worn sanitary fittings and tiles, and that service apartments are a commercial use anyway.

On October 30, 2026, the Madras High Court decreed the association's suit as prayed. The floors are to be used as offices. The case is about a commercial building, but its reasoning applies to anyone who buys a unit in a shared building in Chennai, whether it is an office floor or a flat.

The short answer. In C.S. No. 286 of 2020, Justice K. Govindarajan Thilakavadi held that ownership of an apartment "is not an absolute right divorced from the sanctioned plan," the deed, the construction agreement, the covenants, the bye-laws and the apartment ownership law. The court declared that the sixth and seventh floors are commercial units to be used for office purposes only and restrained conversion into boarding, lodging or service apartments. The trade-off: buyers get protection from neighbours changing the character of a building, but the same rules limit what you can do with your own unit, so the use written into your deed and bye-laws matters as much as the price.

What was the Greams Dugar dispute about?

The association asked for two things: a declaration that all floors, including the sixth and seventh, are commercial units for office use only, as per the approved plan and construction agreement, and an injunction restraining the two owners from converting those floors into a boarding, lodging or service apartment, or any purpose other than office.

The association argued that the conversion was "not merely an internal renovation but a change in the nature and mode of user," and that it would increase occupancy, water use, sewage and drainage, and use of lifts and common facilities, with consequences for fire safety. It relied on the construction agreement, covenants in the sale deeds, the Tamil Nadu Apartment Ownership Act, 1994 and the association's bye-laws.

The owners admitted ownership. They argued that their sale deeds allow commercial use, that service apartments are commercial, that there was no structural alteration, and that no extra water or drainage burden would arise. They also disputed the association's standing and the authority of its treasurer to give evidence.

Why did the court rule for the association?

The court made two moves. First, it read the statute. It said Section 8 of the 1994 Act prohibits an apartment owner from doing any work or putting the apartment to any other use that would jeopardise the soundness or safety of the property, reduce its value or impair an easement, and prohibits material structural additions or excavation of an additional basement or cellar without the previous unanimous consent of the other owners. It noted that Section 23 makes owners and users subject to the act and bye-laws, and makes lawful decisions of the association binding.

Second, it read the documents. The court said the question was not whether the owners could use their premises for a commercial purpose, but whether "Commercial Purpose" permits a change from the sanctioned and agreed office use into a boarding, lodging or service apartment facility. It explained that a service apartment involves residential type accommodation, repeated short term occupation, sleeping accommodation, attached bathrooms and kitchens, and different patterns of water use, drainage, lift usage, waste and fire safety. "Merely because both activities may be described generally as 'Commercial'," the court said, it does not follow that a covenant restricting premises to office use "becomes meaningless."

The evidence also mattered. The owners filed a detailed written statement but did not enter the witness box or lead any evidence. The association produced photographs and its treasurer's evidence. The statutory authorities named in the suit, the Chennai Metropolitan Development Authority, the Greater Chennai Corporation and the fire services department, remained ex parte.

How did each side's argument fare?

Does the 1994 Act still apply to Chennai apartments?

The judgment discusses the Tamil Nadu Apartment Ownership Act, 1994. Tamil Nadu has since passed the Tamil Nadu Apartment Ownership Act, 2022, Act No. 44 of 2022, which received the President's assent on December 15, 2022. Its long title describes it as an act "to repeal and re-enact" the 1994 law, and Section 31 repeals the 1994 Act, with savings for things done under it. The act comes into force on a date the state government notifies.

The 2022 Act keeps the same basic structure the court relied on. Section 9(1) requires each apartment owner to comply with the conditions and restrictions in the bye-laws. Section 9(2) says a failure to comply is a ground for an action for sums due, damages or injunctive relief, maintainable by the association or an aggrieved apartment owner. Section 9(3) says a subsequent apartment owner is bound by the declaration and the bye-laws. Section 23 makes owners, tenants, employees and anyone using the property subject to the act, the bye-laws and the rules, and makes lawful decisions of the association binding on all owners.

For a buyer, Section 9(3) is the key line. If you buy a resale unit, you take it with the building's declaration and bye-laws, whether or not you have read them.

What does this mean for flat buyers, not just office owners?

The same logic applies to residential buildings. A flat comes with an undivided interest in common areas and facilities. The court noted that the 1994 Act's definition of common areas includes foundations, columns, beams, main walls, roofs, terrace, fire escapes, water supply, sewerage, drainage, elevators and fire facilities, and concluded that enjoyment of an individual apartment "cannot consequently be considered in isolation from the common structure and common facilities of the building."

That cuts both ways. It protects you if a neighbour wants to turn a flat into something that loads the lifts, water and drainage you share. It also limits you if you plan to change the use or structure of your own unit. PropNewz explained what you co-own in our guide to common areas and the association handover, and set out the documents a Chennai buyer can ask a builder for in our checklist of RERA documents from booking to handover.

What should a Chennai buyer check before buying a unit in a shared building?

The Greams Dugar owners argued that their sale deeds allowed commercial use. The court looked further, at the construction agreement of November 11, 1995 and its Schedule D, the sanctioned plan, the covenants and the bye-laws. A buyer should do the same before paying.

1. Read the use clause in the parent sale deed and your own draft deed, and note the exact words used for permitted use.
2. Ask for the sanctioned plan and check the use marked for your floor or unit.
3. Ask for the original construction agreement or declaration and any schedules that describe use or specifications.
4. Ask the association for a copy of its bye-laws and any resolutions on use, renovation or letting.
5. If you plan any change of use or major renovation, ask in writing what consent the bye-laws require.
6. Ask whether any suit or dispute about use or alterations is pending in the building.
7. Have a lawyer compare the deed, plan and bye-laws for conflicts before you sign.

What happens after the decree?

The suit was decreed as prayed for, which means the declaration and the permanent injunction sought by the association were granted. The judgment does not record any order on costs, and it does not say whether either side intends to appeal. For the building, the immediate effect is that the sixth and seventh floors are declared office units and the owners and those claiming through them are restrained from converting them into boarding, lodging or service apartments.

For everyone else, the lesson is simpler. In an apartment building, your title is real, but it is not the only document that governs what you can do. Read the rest before you buy.

Frequently asked questions

What did the Madras High Court decide in the Greams Dugar case?

On October 30, 2026, in C.S. No. 286 of 2020, it decreed the owners association's suit as prayed, declaring the sixth and seventh floors to be commercial units for office use only and restraining the two owners from converting them into boarding, lodging or service apartments or any non-office purpose.

Is a service apartment not a commercial use?

The court said the real question was whether the expression commercial purpose permits a change from the agreed office use. It held that a general commercial label does not make an office only covenant meaningless, because service apartments involve very different patterns of occupation, water, drainage, lift use and fire safety.

Does the Tamil Nadu Apartment Ownership Act, 1994 still apply?

The judgment applied the 1994 Act. Tamil Nadu's Apartment Ownership Act, 2022, Act No. 44 of 2022, repeals and re-enacts it, with savings, and comes into force on a date notified by the state. Section 9(3) of the 2022 Act binds a subsequent apartment owner to the declaration and bye-laws.

What should a buyer check before buying a unit in a shared building?

Read the use clause in the parent and draft sale deeds, check the use marked on the sanctioned plan, obtain the construction agreement or declaration and the association's bye-laws, ask what consent is needed for any change of use or renovation, and ask whether any use dispute is pending.

Last updated 2026-11-01. PropNewz Team.