Bombay High Court Affirms Housing Society’s Right to Deemed Conveyance, Limits Developers’ Challenges to Civil Court, and Reinforces MOFA Obligations on Timely Land Transfer

1. Court’s Decision:

• The High Court dismissed the writ petition filed by the developers, thereby upholding the order of the Competent Authority, which granted the deemed conveyance in favor of the housing society.
• The Court found that the society had a valid statutory and contractual right to seek conveyance under the MOFA Act, as the promoter had failed to execute the deed despite the statutory obligation.
• The Court clarified that any objections related to excess conveyance, sub-division of property, or the 9-meter-wide access road should be pursued in civil court rather than through writ jurisdiction.
• The judgment emphasized that Competent Authorities do not adjudicate ownership disputes; their role is limited to enforcing statutory obligations.

2. Facts:

• The housing society had been formed after the developer constructed a building and sold flats to individual buyers under agreements governed by the MOFA Act.
• The society had obtained an Occupation Certificate as early as 2004, yet the developer failed to execute the conveyance deed.
• Due to the inaction of the developer, the society applied for a deemed conveyance before the Competent Authority, which granted conveyance for a total area of 5794.85 square meters, including undivided rights in a Recreational Ground (RG) area.
• The developer opposed the order, arguing that the conveyance included excess land beyond what was agreed upon in the original sale agreements.

3. Issues:

1. Did the Competent Authority exceed its jurisdiction by granting conveyance of an area larger than what was mentioned in the agreements?
2. Was the inclusion of the RG area legally justified under the MOFA Act?
3. Were procedural lapses in the society’s application (e.g., notarization, resolution defects) significant enough to invalidate the deemed conveyance?
4. Should disputes regarding sub-division, access roads, and title be decided in MOFA proceedings or in a civil court?

4. Petitioner’s (Developer’s) Arguments:

• The deemed conveyance order included more land than was covered under the sale agreements, including the RG area, which was never meant to be transferred.
• The application for conveyance was defective as it lacked notarization and was not filed in the prescribed form.
• The agreements executed under the MOFA Act recognized the developer’s right to a 9-meter-wide access road, but this was ignored in the order.
• The Competent Authority lacked the power to decide complex property disputes, which should instead be determined in a civil suit.
• The developers had already expressed willingness to execute a limited conveyance but were ignored by the society, which opted for unilateral conveyance.

5. Respondent’s (Housing Society’s) Arguments:

• The developer failed to execute the conveyance deed despite statutory obligations under MOFA, justifying the need for deemed conveyance.
• The Occupation Certificate had been issued in 2004, and the developer’s inaction over decades warranted intervention by the Competent Authority.
• The agreements referenced the entire layout plan, which included the RG area, meaning the society had rights over it.
• Any disputes related to the access road or sub-division of property should be resolved separately, as they did not affect the society’s right to conveyance.
• The order merely enforced statutory and contractual rights, and any grievances related to excess conveyance should be addressed in civil court.

6. Analysis of the Law:

• Section 11 of the MOFA Act:
  • Requires developers to execute a conveyance deed in favor of housing societies within a stipulated time.
  • If the developer fails to do so, the society can apply for deemed conveyance.
• Rule 8(1) of the MOFA Rules:
  • Specifies that the conveyance must be executed within four months of society formation.
• Competent Authority’s Role:
  • Can only enforce pre-existing rights under agreements and sanctioned plans.
  • Cannot adjudicate complex property disputes (e.g., sub-division, ownership rights).
• Jurisdictional Limits:
  • Disputes over additional land, sub-division, or access roads should be decided in civil court, not through MOFA proceedings.

7. Precedent Analysis:

1. Mazda Construction Company v. Sultanabad Darshan CHS Ltd. (2012 SCC OnLine Bom 1266):
   • Clarified that deemed conveyance must align with the sanctioned plan and agreements.
2. Zainul Abedin Yusufali Massawala v. Competent Authority (2016 SCC OnLine Bom 6028):
   • Held that Competent Authorities cannot decide property title disputes.
3. Mehboob Ali Humza v. District Sub-Registrar (2016):
   • Stated that boundary descriptions take precedence over numerical survey numbers in conveyance disputes.
4. Nahalchand Laloochand Pvt. Ltd. v. Panchali CHS (2010) 9 SCC 536:
   • Recognized that common areas, including RGs, vest in societies unless explicitly excluded.

8. Court’s Reasoning:

• The conveyance order did not grant more than what was contemplated in the agreements; the extent was aligned with the sanctioned plan.
• The society’s entitlement to common areas, including the RG, is consistent with MOFA and judicial precedents.
• Alleged procedural defects (e.g., notarization) did not undermine the society’s substantive right to conveyance.
• The Competent Authority acted within its jurisdiction in granting conveyance but did not adjudicate title disputes.
• Any claim of excess conveyance or access road disputes must be resolved in civil court, not in MOFA proceedings.

9. Conclusion:

• The writ petition was dismissed as there was no legal basis to interfere with the Competent Authority’s decision.
• The petitioners (developers) were granted liberty to file a civil suit for their claims regarding sub-division, access rights, or alleged excess conveyance.
• No costs were awarded to either party.

10. Implications:

1. Developers’ Obligations:
   • This ruling reinforces that developers must execute conveyance deeds as per statutory timelines, or face unilateral conveyance orders.
2. Housing Societies’ Rights:
   • Societies can rely on deemed conveyance provisions to secure legal title when developers fail to act.
3. Competent Authority’s Powers:
   • Its role is limited to enforcing statutory obligations, not adjudicating property disputes.
4. Civil Court Jurisdiction:
   • Disputes over excess land, sub-division, and access rights must be resolved in civil litigation.
5. Common Areas Ownership:
   • Societies have legitimate rights over common amenities like RGs unless explicitly excluded in agreements.

Also Read – Jammu & Kashmir and Ladakh High Court Quashes Preventive Detention Order Under NDPS Act, Citing Non-Application of Mind, Procedural Violations, and Unexplained Delays, Reinforcing Constitutional Safeguards Against Arbitrary Detention