Bombay High Court Upholds Deemed Conveyance of Juhu Land to Housing Society; Holds Lessor Who Participated in Construction Became MOFA Promoter Bound to Transfer Ownership Rights
Landowner-Lessor Can Become MOFA Promoter by Participating in Construction: Bombay High Court Upholds Society’s Ownership Through Deemed Conveyance
Facts
The petitioners, Rohini Gupta and another, are the legal heirs of original landowner Kundanlal Laxmichand Gupta. They challenged an order dated 23 June 2025 of the District Deputy Registrar and Competent Authority granting a certificate of unilateral deemed conveyance of land admeasuring 3,901.70 sq. m. in favour of Respondent No. 3, the co-operative housing society.
The larger land, situated at Survey No. 71, CTS No. 1049/D, Juhu Village, Mumbai Suburban District, had been leased by the petitioners’ father in 1975 to Deepak B. Raheja and Kamla C. Wadhwa for 98 years, expiring on 14 October 2072. The lessees/developers constructed the building known as “Queens Park”, sold flats under MOFA and the purchasers thereafter formed the respondent Society.
In 1978, the developers assigned their leasehold rights to the Society.
The Society subsequently applied under Section 11 of the Maharashtra Ownership Flats Act, 1963 (MOFA) for unilateral deemed conveyance of the land itself.
The landowners contended that because the developers possessed only leasehold rights and had already assigned those rights to the Society in 1978, the Society could neither obtain the landowners’ ownership rights nor maintain a further deemed-conveyance proceeding.
Issues
The principal issue identified by the High Court was whether the original landowner and his legal heirs could themselves be treated as “promoters” within Section 2(c) of MOFA.
This gave rise to related questions:
- Whether a landowner who leases land to a developer can nevertheless become a promoter by “causing” construction.
- Whether the Society could receive ownership rights in the land when the developers themselves initially held only leasehold rights.
- Whether the 1978 assignment of the lease exhausted the developers’ and landowners’ obligations under Section 11 MOFA.
- Whether there can be multiple promoters for the same project.
- Whether the deemed-conveyance order was invalid because notice had originally been addressed to the petitioners’ deceased father.
- Whether the Competent Authority’s deemed-conveyance order finally determined the parties’ substantive title rights.
Petitioners’ Arguments
The petitioners argued that their father was merely the lessor/landowner, while Respondent Nos. 4 to 7 were the promoters who actually constructed and sold the flats.
Under Section 11 MOFA, according to them, a society could acquire only whatever right, title and interest the promoter possessed. Since the developers had only leasehold rights, the Society could at best obtain those leasehold rights—not the landowners’ reversionary ownership.
They further argued that those leasehold rights had already been assigned to the Society by the Indenture of Assignment dated 17 March 1978. Therefore, there was no failure by the promoter attracting Section 11(3), and consequently no jurisdiction in the Competent Authority to grant deemed conveyance.
The petitioners also relied upon absence of privity with the flat purchasers, contended that the order had been passed against a deceased person, and alleged violation of natural justice.
Society’s Arguments
The Society argued that the landowner was not a passive lessor.
The terms of the 1975 lease demonstrated that he had actively participated in and controlled significant aspects of construction. Therefore, he had “caused” the building to be constructed and independently fell within the definition of promoter under Section 2(c) MOFA.
The Society further contended that the agreements with flat purchasers contemplated eventual perfection of ownership in the land and that purchasers had contributed amounts specifically towards acquiring the lessor’s reversionary rights.
Accordingly, the 1978 assignment of the developers’ leasehold interest did not exhaust the separate statutory obligation resting upon the landowner as another promoter.
Analysis of the Law
1. “Promoter” under MOFA extends beyond the person physically constructing the building
Section 2(c) defines promoter to include a person who constructs or “causes to be constructed” a building of flats for sale.
The Court held that these words deliberately widen the definition.
A landowner who simply permits an independent developer to construct with complete freedom may remain only a landowner. But where the owner actively participates in construction, controls how it is undertaken, or participates in the project or sale structure, he can wear “two hats”—landowner and promoter.
MOFA being beneficial legislation protecting flat purchasers, the definition of promoter must be sufficiently broad to capture those who substantively cause the project to come into existence.
2. Terms of the lease showed active participation by the lessor
The Court examined the 1975 Lease Deed in detail.
Among other matters, the lessor:
- prescribed the period within which construction had to be completed;
- could require removal of unsuitable construction material;
- could insist upon correction of deviation from sanctioned plans;
- required insurance of the building in the joint names of lessor and lessee;
- could himself insure the building upon the lessee’s default;
- possessed rights of re-entry; and
- would ultimately acquire ownership of the building when the lease expired or was earlier terminated.
These were not characteristics of a completely passive lease of vacant land.
The Court therefore concluded that the lessor had fully participated in causing construction and consequently fell within Section 2(c) MOFA.
3. Future ownership of the building was particularly significant
The Court attached considerable importance to the clause under which, upon expiry of the lease in 2072, the building itself would vest in the lessor.
If the lessor were excluded from the definition of promoter, the developer—who would not ultimately own the building—could not effectively convey complete ownership to the Society.
The Court therefore held that the person who was contractually destined to acquire ownership of the structure must also bear MOFA’s statutory conveyance obligation.
Precedent Analysis
Haroon Hussain Khatri v. Competent Authority
This decision was central to the Court’s reasoning.
There too, a lease contemplated that the building constructed by the lessee would revert to the lessor upon expiry. The Court had held that construction was therefore effectively caused by the landowner through the lessee, making the lessor a promoter under Section 2(c) and attracting Section 11 obligations.
The Court found the present lease demonstrated an even greater degree of lessor participation than Haroon Hussain Khatri.
A.H. Wadia Trust v. State of Maharashtra
The petitioners relied upon A.H. Wadia Trust for the well-established proposition that a society ordinarily cannot obtain through deemed conveyance a higher right than the promoter himself possessed.
The Court accepted the principle but distinguished it.
In A.H. Wadia Trust the landowners remained merely landowners. Here, the petitioners’ father himself became a promoter through participation in the construction arrangement. Consequently, his own ownership rights were independently subject to Section 11.
Vaidehi Akash Housing
The petitioners relied upon Vaidehi Akash to argue that absence of privity prevented MOFA obligations being imposed upon the landowners.
The Court distinguished that authority because it involved a redevelopment arrangement on a principal-to-principal basis, whereas the present case concerned whether the terms of an original land lease themselves demonstrated that the lessor had caused construction.
Accordingly, the issue here turned upon the specific terms of the lease, not merely contractual privity.
Prestige Garden A-1 CHSL
The Court relied upon this authority for the proposition that there can be no estoppel against a statutory right.
Therefore, the Society’s acceptance of the 1978 lease assignment did not prevent it from subsequently invoking its statutory entitlement under Section 11 against another promoter.
Arunkumar H. Shah HUF v. Avon Arcade Premises CHS
The Supreme Court authority was relied upon for the important proposition that a deemed-conveyance order does not finally and conclusively determine substantive title disputes between parties.
Accordingly, dismissal of the writ petition did not bar the petitioners from filing an appropriate civil suit concerning their asserted title rights.
Court’s Reasoning
The Court found that there could be more than one promoter in a housing project.
Here, both the developers/lessees and the landowner qualified as promoters because construction had effectively been caused jointly by them.
The developers fulfilled only part of the Section 11 obligation when they assigned their leasehold rights to the Society in 1978. That did not discharge the landowner-promoter’s separate obligation to convey his own right, title and interest.
Accordingly, there remained a statutory “failure” attributable to the landowner within Section 11(3), giving the Competent Authority jurisdiction to entertain the deemed-conveyance application.
The Court consequently rejected the argument that the Society could never obtain ownership merely because the original developers possessed only a lease.
Once the landowner himself was brought within the definition of promoter, the Society was entitled to seek conveyance of the landowner-promoter’s rights as well.
The Court also rejected the natural justice challenge. The petitioners admitted receiving notice issued in their father’s name and had themselves communicated with the Competent Authority. Having chosen not to appear and contest the proceedings, they could not subsequently complain that they were denied an opportunity of hearing.
Conclusion
The Bombay High Court upheld the unilateral deemed conveyance of 3,901.70 sq. m. of Juhu land in favour of the Society.
It held that the petitioners’ father was not a mere lessor. By actively controlling and participating in construction and retaining a contractual right ultimately to acquire ownership of the building, he had “caused” construction and thereby became a promoter under Section 2(c) MOFA.
Since both the lessees/developers and the landowner were promoters, the 1978 assignment of leasehold rights by the developers constituted only partial fulfilment of Section 11 obligations. The landowner’s own obligation to convey his ownership rights remained unperformed, giving the Competent Authority jurisdiction under Section 11(3).
The Court further observed that the deemed conveyance would enable the Society to undertake redevelopment without obstruction and would advance the beneficial object of MOFA. At the same time, the petitioners remained free to institute a civil suit because deemed conveyance does not finally adjudicate competing title claims.
The writ petition was dismissed with no order as to costs.
Case Details
Case: Rohini Gupta & Anr. v. District Deputy Registrar, Co-operative Societies & Ors.
Court: Bombay High Court, Civil Appellate Jurisdiction
Case Number: Writ Petition No. 5991 of 2026
Neutral Citation: 2026:BHC-AS:36937
Judge: Justice Sandeep V. Marne
Reserved On: 25 August 2026
Pronounced On: 8 September 2026
Property: Approximately 3,901.70 sq. m., Survey No. 71, CTS No. 1049/D, Juhu Village, Mumbai Suburban District, occupied by the building “Queens Park.”
Result: Writ petition dismissed; unilateral deemed conveyance upheld; landowner/lessor treated as a promoter under MOFA because of his active participation in construction and rights over the building.
