Court’s Decision
The Bombay High Court dismissed a writ petition filed by a developer challenging the order of the Competent Authority under Section 11 of the Maharashtra Ownership Flats (Regulation of the Promotion, Construction, Sale, Management and Transfer) Act, 1963 (MOFA) granting deemed conveyance in favour of a co-operative housing society.
Justice N.J. Jamadar upheld the authority’s finding that the developer’s failure to execute the conveyance despite completion of the project and possession being handed over to flat purchasers entitled the society to seek unilateral conveyance.
The Court observed:
“Conveyance is not a benevolent gesture from the builder; it is a statutory right of the flat purchasers flowing from the mandate of MOFA.”
Accordingly, the High Court refused to interfere under Article 227 of the Constitution, holding that the authority’s order was legal, reasoned, and consistent with settled law.
Facts
The dispute arose from a housing project comprising multiple wings constructed by a developer in suburban Mumbai. All flats were sold to purchasers between 2007 and 2012, who subsequently formed a co-operative housing society in 2013. Despite repeated demands, the developer failed to execute a conveyance deed in favour of the society, citing pending completion certificate (CC) and additional development potential on the land.
The society issued several notices and ultimately filed an application under Section 11 of MOFA before the Competent Authority seeking unilateral deemed conveyance. After hearing both sides and examining documentary evidence, the authority allowed the society’s application, directing execution and registration of the conveyance deed in its favour.
The developer challenged this decision before the High Court, contending that it still retained development rights and that conveyance would extinguish those rights. The society opposed the petition, asserting that the developer’s interest ceased once all flats were sold and possession delivered.
Issues
- Whether the Competent Authority erred in granting deemed conveyance in the absence of a full occupation certificate and when additional FSI remained unutilized.
- Whether the developer could resist conveyance on the ground of retaining development rights or pending municipal approvals.
- Whether the Competent Authority’s powers under Section 11 of MOFA extend to adjudicating disputed ownership and title issues.
Petitioner’s Arguments
The developer argued that the Competent Authority acted beyond its jurisdiction in granting deemed conveyance when title to the property was allegedly disputed. It was contended that the project was incomplete, as additional floors were proposed under a pending redevelopment plan, and therefore, execution of conveyance at this stage would prejudice the developer’s contractual rights.
The petitioner further asserted that the society had not obtained a full occupation certificate, which was a mandatory precondition to conveyance. Relying on the development agreement, the builder claimed it retained residual rights to develop balance FSI and that the society’s application was premature.
It was also contended that Section 11 of MOFA does not empower the authority to determine title or extinguish a developer’s interest, and any such disputes must be resolved by a civil court. The builder argued that the authority’s order was mechanical, ignoring vital evidence of ongoing construction permissions.
Respondent’s Arguments
The housing society, represented through its managing committee, submitted that the entire project was completed, sold, and handed over more than a decade ago, and the developer’s claim of “residual development” was a pretext to withhold conveyance. The society highlighted that the mandatory period of four months under Section 11(1) of MOFA for execution of conveyance had long expired, making unilateral conveyance automatic upon failure of the promoter.
The respondents pointed out that the Competent Authority’s jurisdiction was limited to verifying whether the promoter had fulfilled its obligation to convey, and not to decide on ownership disputes. They relied on Supreme Court and Bombay High Court precedents which held that a builder’s rights are extinguished once possession is handed over and sale deeds are executed.
They emphasized that the lack of a final occupation certificate cannot stall conveyance, as flat purchasers’ statutory rights under MOFA prevail over administrative delays. The society further argued that since the builder had already conveyed portions of the land to third-party purchasers and executed registered agreements with all members, the conveyance of undivided interest was legally justified.
Analysis of the Law
The Court undertook a detailed analysis of Section 11 of MOFA, which mandates that the promoter must execute a conveyance deed within four months of registration of the co-operative society or company formed by the flat purchasers. Failure to do so empowers the society to seek unilateral conveyance from the Competent Authority.
Justice Jamadar reiterated that the Competent Authority’s role is administrative, limited to ensuring that the legal right of the society is not frustrated by the developer’s inaction. The authority is not required to adjudicate complex ownership disputes unless they are bona fide and supported by documentary evidence.
The Court stressed that MOFA’s object is consumer protection, ensuring that builders do not retain control or profits from property already sold to purchasers. It relied on the legislative intent expressed in the Statement of Objects and Reasons of the 1986 amendment to MOFA, which introduced deemed conveyance to counter the rampant malpractice of withholding conveyance deeds.
Precedent Analysis
- Mazda Construction Company v. Sultanabad Darshan CHS Ltd. (2013) 2 Bom CR 241 – The Court cited this case to reaffirm that the Competent Authority is empowered to grant deemed conveyance once ownership and possession have been transferred, and the builder’s rights have ceased.
- Tirandaz Subha Co-op Housing Society v. State of Maharashtra (2016 SCC OnLine Bom 10250) – Held that pending occupation certificate or residual FSI does not bar conveyance, as the society’s right is independent and statutory.
- Lakeview Developers v. State of Maharashtra (2023 SCC OnLine Bom 1759) – The Bench relied on this precedent to highlight that the authority’s function is summary and administrative, not adjudicatory.
- Kalpita Enclave CHS Ltd. v. State of Maharashtra (2021 SCC OnLine Bom 4235) – Reiterated that the failure to execute conveyance is a continuing breach, and the right to seek deemed conveyance is not extinguished by delay.
- Jayantilal Investments v. Madhuvihar Co-op Housing Society (2007) 9 SCC 220 – Supreme Court held that MOFA is a beneficial legislation; conveyance must not be delayed by technical objections.
- Neelkamal Realtors v. State of Maharashtra (2018) 1 SCC 800 – Cited for reinforcing that the legislative intent of MOFA is to protect flat purchasers from exploitation by developers.
Through these precedents, the Court underscored that completion or residual development rights cannot dilute a statutory conveyance once the project is occupied and society formed.
Court’s Reasoning
Justice Jamadar rejected the petitioner’s contention that absence of a completion certificate rendered the conveyance invalid. He clarified that the law does not condition the right to conveyance upon grant of an occupation certificate, but on the transfer of possession and sale of units.
He observed that the builder’s claim of unutilized FSI was untenable, as any future development on the plot would still require the society’s consent after conveyance. The Court noted that allowing developers to indefinitely delay conveyance citing “balance FSI” would defeat the entire purpose of MOFA.
The Court held that the Competent Authority’s order was reasoned, based on evidence, and consistent with binding precedents. There was no jurisdictional error warranting interference under Article 227.
Justice Jamadar concluded:
“The statutory right of the society to obtain conveyance cannot be subverted by speculative claims of the builder. Law recognizes no perpetual developer control over property already transferred to flat purchasers.”
Conclusion
The High Court dismissed the petition, upholding the Competent Authority’s decision granting unilateral deemed conveyance to the society. The Court directed the Sub-Registrar to complete registration of the conveyance deed within four weeks and instructed municipal authorities to update property records accordingly.
The judgment reaffirmed that developers cannot indefinitely withhold conveyance by citing residual rights, pending approvals, or incomplete certificates, as MOFA’s protection operates automatically once statutory conditions are met.
Implications
This ruling fortifies the rights of co-operative housing societies to secure ownership of land and building through deemed conveyance, even when developers resist or delay. It clarifies that administrative deficiencies or pending FSI cannot stall the statutory transfer of ownership.
The judgment sends a strong message to promoters that delay tactics and residual claims will not survive judicial scrutiny, and that societies can independently assert ownership once flats are sold and possession handed over.
Judgments Cited and Relevance
| Case Name | Legal Principle | Application in Present Case |
| Mazda Construction Company (2013) | Competent Authority’s summary jurisdiction. | Applied to validate authority’s power. |
| Tirandaz Subha CHS (2016) | FSI or pending OC not a bar to conveyance. | Rejected developer’s technical plea. |
| Jayantilal Investments (2007) | Conveyance is a statutory right under MOFA. | Central guiding principle. |
| Kalpita Enclave (2021) | Delay doesn’t extinguish right to conveyance. | Affirmed society’s timely application. |
| Lakeview Developers (2023) | Administrative nature of Section 11 power. | Confirmed authority’s jurisdiction. |
| Neelkamal Realtors (2018) | MOFA protects flat purchasers’ interests. | Reinforced statutory interpretation. |
FAQs
1. Can a builder refuse conveyance citing unutilized FSI or incomplete occupation certificate?
No. The Court held that such grounds are irrelevant under Section 11 of MOFA, as conveyance is a statutory right once possession and sale are complete.
2. What is a deemed conveyance under MOFA?
It allows a housing society to obtain ownership of land and building without the builder’s cooperation, through an order of the Competent Authority.
3. Can the Competent Authority decide title disputes?
No. The authority’s role is administrative, not adjudicatory. It only verifies statutory compliance, not ownership conflicts.
