Bombay High Court
Blue Heaven Co Op Hsg. Soc Ltd. Thr Its ... vs Punit Construction Co Pvt Ltd. And Ors on 21 November, 2024
Author: Sharmila U. Deshmukh
Bench: Sharmila U. Deshmukh
2024:BHC-AS:44347
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 2455 OF 2023
1) M/S. Blue Heaven Co-op Housing Society Ltd, )
A Co-operative Housing Society registered )
under the mandate of Maharashtra Co-operative )
Societies Act, 1960 and having its Registered )
Office at Plot 8A, Sector 35, Kamothe, )
Navi Mumbai, Through its Secretary/ )
Chairman Shri. Aman Chandulal Patel ) ...Petitioner
Versus
1. M/s. Punit Construction Company Pvt. Ltd., )
a Company registered under the )
Companies Act, 1956 and )
having its registered office at )
'Center Point Building', Office No. 103, )
1st Floor, Plot No.21, Sector-6, )
Nerul, Navi Mumbai. )
2. Anjani Hrudaynth Patil, )
Age: Adult )
3. Malati Prakash Thakur )
Age: Adult )
No. 2 and 3 are Indian Inhabitants )
Residing at - Village Tembhode, )
Post Kalamboli, Panvel -410206 )
4. Janu Vijay Bhagat )
Age: Adult, Indian Inhabitant, )
Residing Village Post Aadai, )
Tal.: Panvel-410206 )
5. Janabai Shripat Patil )
Age: 53 years )
6. Pravin Shripat Patil )
Age: 34 years )
7. Prasad Shripat Patil )
Age: 32 years )
Nos. 5 are Indian Inhabitants, )
residing at 187 Navade, )
Near Vitthal Mandir, Panvel Raigad 410208 )
8. Sandhya Nilesh Patil )
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Age 30 years, Indian Inhabitant, )
Residing At Post-Morbe, )
Panvel, Raigad )
9. Joint Registrar, Co-Op. )
Societies (CIDCO) & the Competent Authority )
having office at Railway Station Complex, )
Tower No. 8, 5th Floor, C.B.D. Belapur, )
Navi Mumbai )
10. City & Industrial Development Corporation of )
Maharashtra Ltd., a Company registered )
under the Companies Act, 1956 )
and having its registered office at )
"Nirmal", 2nd Floot, Nariman Point, )
Mumbai-400021 and administrative office )
at CIDCO Bhavan, CBD-Belapue, )
Navi Mumbai-400614. )
11. Manager Town Service-2, )
(12.5% Department) )
City & Industrial Development Corporation )
of Maharashtra Ltd )
Office At - CIDCO Bhavan, )
CBD-Belapur, Navi Mumbai. ) ...Respondent.
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Mr. N. V. Walawalkar, Senior Advocate along with Mr. Suresh Sabrad, Mr. Pratik
Sabrad, Mr. Amey Sawant, Neha Zanje for the Petitioner.
Mr. Surel S. Shah, Senior Advocate along with Mr. Chinmay Acharya for the
Respondent No.7 and 8.
Mr. Mayur Khandeparkar, Nishant Tripathi, Pranav Vaidya i/b M. Tripathi & Co.,
for the Respondent No. 1.
Dr. Abhinav Chandrachud, Mr. Omkar Kulkarni for the Respondent Nos. 2 to 4.
Mr. Girish S. Godbole, Senior Advocate along with Mr. Chinmay Acharya for the
Respondent No. 5 and 6.
Mr. Rohit Sakhadeo for the Respondent No. 10 and 11 - CIDCO.
Ms. P. J. Gavhane, AGP for the Respondent-State.
------------
Coram : Sharmila U. Deshmukh, J.
Reserved on : September 5, 2024.
Pronounced on : November 21, 2024.
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Judgment :
1. By this petition filed under Article 227 of the Constitution of
India, exception is taken to the order dated 18 th January 2023 passed
by the Competent Authority dismissing the Petitioner's Application No
561 of 2011 filed under Section 11(3) of the Maharashtra Ownership of
Flats (Regulation of Promotion of Construction of sale, Management
and Transfer) Act, 1963 [for short "MOFA"].
FACTUAL MATRIX:
2. As discerned from the pleadings, the case of the Petitioner is
that by an Indenture styled as "Agreement to Lease", the Respondent
No 10- CIDCO granted license to Ambo Gadge and Shripat Patil to enter
upon the subject land and to develop the same by constructing
buildings within a period of four years. CIDCO also agreed to grant
lease of the subject plot jointly to Ambo Gadge and Shripat Patil.
3. It is stated that vide an Agreement for Assignment cum Sale cum
Development executed on 15th May, 2023, Ambo Gadge and Shripat
Laxman Patil granted development rights to the Respondent No.1 for
monetary consideration of Rs.56,00,000/- and on 23 rd May, 2003, the
Respondent No.1 was appointed as Constituted Attorney by Ambo
Gadge and Shripat Laxman Patil. Subsequently commencement
certificate was granted by Respondent No 10 on 3 rd August, 2003 and
between August 2003 to September, 2003, Respondent No 1
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commenced the construction and entered into registered agreements
for sale with the individual flat purchasers in or around January, 2004.
4. It is stated that on 23rd June, 2004, Ambo Gadge and Shripat Patil
applied to Respondent No 10 for transfer of subject plot to the
Respondent No 1. On 20th February 2006, occupancy certificate was
issued pursuant to which the Respondent No.1 handed over possession
of tenements in the developed project to the respective flat
purchasers. On 2nd May, 2006, transfer charges were paid to
Respondent No 10 for granting permission to transfer the subject plot
in favour of Respondent No.1. A draft unexecuted Tripartite
Agreement was lodged for adjudication under Section 31 of
Maharashtra Stamp Act, 1958 on 25th May, 2006. On 9th October, 2006,
the Respondent No 10 granted transfer permission.
5. In the year 2010, some of the members of the Petitioner Society
filed Consumer Complaint No.272 of 2012 seeking a direction to the
Developers, Ambo Gadge and Shripat Patil for registration of the Co-
operative Housing Society as mandated by Section 10 of MOFA and for
conveyance of land and building as mandated by Section 11 of MOFA.
Vide order dated 20th August 2016, the Consumer Forum directed the
Respondent No.1 to register the Co-operative society within a period
of 45 days and convey the plot within 30 days of the registration of
Society and directed the owners to co-operate. As there was non
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compliance of the order passed by the Consumer Forum, Execution
Application No. 7 of 2018 was filed which is stated to be pending.
6. Due to non compliance of the Consumer Forum's order, the
members of the Society with the assistance of Respondent No.1
registered the cooperative housing society under section 10 of MOFA
on 24th May, 2018.
7. Vide order dated 26th November 2018, passed in Execution
Application No.7 of 2018, the Consumer Forum directed the
Respondent No.1 to convene a meeting of all the flat purchasers, enter
into an agreement with them for reconstruction of building in view of
the deteriorating condition of the building, pay transit rent and put the
flat purchasers in reconstructed building.
8. By notice dated 30th May 2012, the Petitioner-society called upon
the Respondent No.1 and Shripat Patil and Ambo Gadge to convey the
land and building. In the first Annual General Meeting of the
Petitioner Society held on 11 th June 2018, resolution was passed
authorising the Managing Committee to file an application for
conveyance.
9. Alleging non compliance of MOFA obligations, the Petitioner
filed an application under Section 11(3) of MOFA seeking certificate for
execution of unilateral deemed conveyance. To the said application,
said Shripat Patil filed his response denying the agreements with
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Respondent No.1 or that he had received consideration of Rs
56,00,000/. Respondent No.1 supported the case of Petitioner-society.
The Competent Authority rejected the application of the Petitioner by
order dated 5th July 2019.
10. On 11th September, 2019, Special Civil Suit No.358 of 2019 was
filed by Shripat Patil against the Society, Respondent No 1 and others
for declaration of ownership, that the Petitioner-society and its
members are in unlawful use and possession of the said plot, for
direction to vacate and handover the vacant and peaceful possession
of the plot, that the Respondent No.1 never had any right to enter into
agreement for sale of flats and that the agreements for sale are not
binding on the legal heirs of Ambo Gadge and Shripat Patil and for
injunction.
11. Shripat Patil filed an application under Section 21A of the
Maharashtra Co-operative Societies Act, 1960 [for short "the MCS Act"]
seeking de-registration of the Society which came to be rejected by the
Commissioner and Registrar of Cooperative Societies vide order dated
9th July 2019. The order of rejection was challenged by the
Respondent No.2 under Section 152 of the MCS Act which was rejected
by the Hon'ble Minister by order dated 7 th April 2022 as against which
connected Writ Petition No. 8200 of 2023 is filed.
12. The Petitioner challenged the rejection of the application filed
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under Section 11 of MOFA by Writ Petition No.11786 of 2019 and vide
order dated 30th January, 2020 this Court set aside the order of 5 th July
2019 and remanded the application to the Competent Authority for
reconsideration. Pursuant to remand, the Competent Authority vide
order dated 20th May 2021 allowed the application granting certificate
of deemed conveyance which was subsequently registered.
13. Respondent Nos.2 to 4 and 5 to 8 filed separate Petitions
challenging the order of deemed conveyance dated 20 th May 2021 on
the ground that legal heirs of Ambo Gadge were not heard and vide
order 30th November 2022, this Court directed de novo hearing. The
Competent Authority after hearing afresh rejected the application by
order dated 27th January 2023 which is impugned in this petition.
14. As the building started dilapidating, Panvel Municipal
Corporation issued notice under Section 264 of the Maharashtra
Municipal Corporations Act and between July to December 2022
demolition of the building was carried out.
SUBMISSIONS:
PRELIMINARY OBJECTION:
15. At the outset, Dr. Chandrachud learned counsel for the
Respondent Nos.2 to 4 raised a preliminary objection of
maintainability on the ground of availability of an alternate remedy of
filing civil suit. He would submit that the order of grant or rejection of
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the deemed conveyance does not conclude the issue of right, title and
interest in the property and the Petitioner has the alternate remedy of
filing the suit and therefore this Court may not exercise its powers
under Articles 226 and 227 of the Constitution of India. In support of
the preliminary objection, he relies upon the following decisions:
Subhash Ramchandra Navare v. Premji Meghji
Rambia1;
Shimmering Heights CHS Ltd v. State of
Maharashtra;2 and
Mehboob Ali Humza v. Dist. Sub Registrar,
Mumbai3.
16. To counter the submissions, Mr. Walawalkar, learned Senior
Advocate appearing for the Petitioner would point out that the
decisions on which reliance has been placed arise out of grant of
deemed conveyance and Petitions were at the instance of promoters
and in that context the Courts have held that the grant of deemed
conveyance does not conclude the issue of right title and interest in
the property. In support, he relies upon following decisions :
Vishnu Krishna Dhadphale v. Competent Authority and
District4; and
New Manoday CHS Ltd v. Uday Madhavrao Jagtap;5
1 2020 SCC OnLine Bom 316.
2 WP No. 3129/2016 (Bom HC), dtd. 6-4-2016.
3 WP No.1170/2014 (Bom HC) dtd, 24-6-2016.
4 2017 SCC OnLine Bom 4834.
5 WP (OS) 1421/2024 (Bom HC), dtd. 30-4-2024.
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17. Mr. Khandeparkar, Learned Counsel appearing for Respondent
No.1 would support Mr. Walawalkar and would submit that this Court
has taken that view in a challenge by the promoters to grant of
deemed conveyance claiming a right in the project and in that context,
the Courts have held that if the contractual rights are claimed, the
appropriate remedy is to file civil suit. He would submit that the
Competent Authority has non-suited the Petitioner by going into the
title dispute and thus there is an error in jurisdiction.
ON MERITS:
18. Mr. Walavalkar would submit that this Court in the earlier
remand vide order dated 30th January, 2020 has clearly set out the
remit of inquiry by Competent Authority and despite thereof the
Competent Authority travelled way beyond its jurisdiction. He would
further submit that the order of Consumer Forum directing conveyance
still stands and has attained finality. He would point out the
documents submitted to CIDCO for the purpose of obtaining
development permissions annexed at page Nos.142 to 218 which are
signed by the deceased Shripat Patil and deceased Ambo Gadge. He
would further submit that the civil Suit filed by the Respondent Nos. 5
to 8 does not seek any declaration that the documents submitted to
CIDCO for permissions are fraudulent documents. He submits that as
the necessary permissions and approvals have been applied for and
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granted in name of the owners, the construction was caused by the
owners of property who are promoters.
19. He would submit that pursuant to proper resolution the Society
was registered and application for deemed conveyance was filed. He
would further submit that notice for demolition was issued in the year
2017, building was vacated in the year 2018, water and electricity
connection was discontinued in August 2019 and the demolition had
taken place in December 2022. He would further submit that the
application seeks enforcement of MOFA obligations and the
demolition of building is irrelevant. He submits that the development
was completed in the year 2006 and came to be occupied after
receiving occupation certificate, which was to the knowledge of the
owners and no action was taken by the owners to challenge authority
of the Respondent No. 1 till filing of deemed convenance application in
the year 2018.
20. He has taken this Court in detail through the findings of the
Competent Authority and would submit that the Competent Authority
has practically decided the issues of civil suit. He submits that the
Petitioner was entitled to deemed conveyance as the development
agreement was acted upon, the building was constructed pursuant to
the permissions granted by the CIDCO and the agreements with the
flat purchasers were registered agreements. He submits that the
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Competent Authority failed to notice that the owners have acquiesced
in the development. He submits that by coming to a finding that as the
development agreement was unstamped, unregistered agreement, the
Respondent No.1 did not have any right to sell the flats, the
Competent Authority has travelled beyond its jurisdiction and granted
prayer clause (f) of the civil suit. He would further submit that as the
owners are promoters and the flat purchasers agreements were not
executed pursuant to power of attorney granted under the
Development Agreement, the non registration of development
agreement is immaterial.
21. He points out that one of the reasons for rejection was defect in
the application, in which case it was incumbent on the Competent
Authority under the Rules framed under MOFA to call upon the
Petitioners to rectify the defect.
22. Mr. Khandeparkar, learned counsel for Respondent No.1 would
draw attention of this Court to Section 2(c) of MOFA which defines
"promoter" and would submit that as the building was caused to be
constructed by the owners, the owners are promoters. He would
further submit that under Rules framed under MOFA, the agreement
is required to be in mandatory Form-V and Clause 13 of the said
agreement which is non derogable, provides for registration of Society
by the promoter within a period of 4 months and the execution of
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conveyance in favour of the society and in default of obligation, the
Competent Authority has the necessary jurisdiction. He would further
point out that under Section 16 of MOFA, the provisions of MOFA have
been given an overriding effect over the provisions of the Transfer of
Property Act, 1882.
23. He would further submit that the defect, if any, in the application
cannot constitute a ground for rejection as Rule 13(c) of the Rules
enjoins upon the Competent Authority to issue notice in Form-VIII to
rectify the defects and thereafter to admit and register the
application. He submits that as, notices were already issued on 22 nd
June 2018 the same implies that the application was complete in all
respects. He submits that in any event the defect in the application
was in respect of certain "Blanks" which defect is irrelevant.
24. He submits that the rights under MOFA were already created by
execution of the flat purchaser agreements and there is an order of the
Consumer Forum directing the Respondent No.1 to redevelop the
property. He submits that considering that the building is demolished,
the conveyance of the land will have to be granted which will include
the development potential of the land. The statutory rights of the
Petitioner-society cannot be defeated by reason of demolition by
passage of time as the same would amount to the Promoters taking
advantage of their default. He submits that under section 11(5) of the
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MOFA, the obligation of promoter is required to be fulfilled by the
Competent Authority and therefore the matter may be remanded only
for the purpose of issuing of the certificate which cannot be done by
this Court in exercise of powers Article 227 of the Constitution of India.
In support of his submissions he relies upon the following decisions:
Ravi Jagganath Agarwal v. Prince Tower CHS Ltd6;
Zora Singh v. J. M. Tandon7; and
25. Per contra Dr. Chandrachud, learned counsel for the Respondent
Nos.2 to 4 would draw the attention of this Court to the Agreement to
Lease executed by the owners with CIDCO. Pointing out to Recital (D)
at page 106 and clause (1) at page 107 and clause (7) at page 113, he
submits that the said agreement only grants license to the owners to
construct a building, pursuant to which lease was to be executed for a
period of 60 years. He would therefore submit that the Petitioners
cannot claim conveyance and at the highest what could be granted
were leasehold rights. He would further submit that the development
agreement executed between the owners and Respondent No.1 was
an unregistered sham agreement and the provisions of Section 49 of
the Registration Act would come into play. He submits that the
permissions applied in the name of Ambo Gadge at page 148 with
CIDCO was entirely without the knowledge and consent of Ambo
6 2024 SCC OnLine Bom 1015.
7 1971(3) SCC 834.
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Gadge. He would submit that the flat purchasers agreement based on
which the Conveyance is sought was not executed by Ambo Gadge nor
power of attorney was executed by Ambo Gadge in favour of
Respondent No.1 to execute the flat purchasers agreement. He would
submit that the grant of deemed conveyance in favour of the
Petitioner-society would result in divesting CIDCO of its ownership
rights.
26. He would submit that a tripartite agreement was required to be
executed between Ambo Gadge, Shripat Patil, CIDCO and the
Respondent No.1. He submits that Ambo Gadge expired in the year
2010 and in the year 2016 the Consumer Complaint was instituted in
the name of Ambo and his wife, and it is not shown whether his wife
had been served with the copy of said complaint. He would further
point out that there is a fraud committed in the registration of Society
as 192 members are shown and for purpose of registration, the
requirement was of 51% and only 75 members had signed the
application for registration. He would further point out that the the
authorisation for filing application under Section 11 of MOFA was
pursuant to resolution of the Society of 24 th June 2018 whereas the
indemnity bond executed by the Chairman of Petitioner-society was
notarised on 12th June 2018. He would submit that the issues as to
whether the conveyance or lease could be granted by examining the
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agreement with CIDCO, fraudulent registration of agreement,
resolution etc, would bar the jurisdiction of the Competent Authority
and the application for deemed conveyance has rightly been rejected.
27. Mr. Godbole, learned Senior Advocate appearing for the
Respondent Nos.5 to 8 would submit that the Agenda at page 249 was
not filed before the Competent Authority for the meeting to be held
on 11th June 2018. He would further point out the application under
Section 11(3) of the MOFA and would submit that stamps are dated
12th June 2018 and the accompaniments to application at page 621
refer to meeting held on 24th June 2018. He submits that the
documents have been notarized on 12th June 2018 whereas the
meeting is shown to have been held on 24 th June 2018, which creates
doubt about authorisation.
28. He would further submit that agreement between the
Owners and CIDCO was an agreement to lease and not agreement of
lease and there is no tripartite agreement mandatorily to be executed
in case of transfer of the land by allottees in favour of 3 rd person. He
submits that unless there is compliance by execution of necessary
agreements with CIDCO, the Respondent No.1 does not have any right
in the said property which could be conveyed to Petitioner-society. He
submits that even the Owners do not have leasehold rights but an
inchoate right to get the lease deed. He would further point out the
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replies filed by Respondent No.3 and the Respondent Nos. 2.1 to 2.3
and would submit that all these issues were placed for consideration
before the Competent Authority. He submits that the documents
executed were fraudulent documents.
29. He would further submit that the accompaniments to the
application required to be submitted under Rule 12 in Form VII and
which read along with the GR of 2018 provided for a list of documents
which were not tendered along with the application and therefore one
of the grounds for rejection of application was the defect in the
application. He would further submit that under section 11(3) and
11(4) of MOFA, the Competent Authority is empowered to verify the
authenticity of documents. Pointing out to the definition of "flat"
given under section 2(a)(i) of MOFA, he submits that as the building is
not in existence the Competent Authority has rightly rejected the
application.
30. Mr. Surel Shah, learned Senior Advocate appearing for the
Respondent Nos.7 and 8 submits that under Section 11 of MOFA, the
promoter is required to convey his right, title and interest in the land
and building and as the building is demolished, the application for
deemed conveyance only in respect of land is not maintainable. He
would further point out that Clause 7 of agreement provides that the
Corporation will grant and licensee will accept a lease and therefore
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the agreement was an agreement to enter into a lease. He would
further submit that the Competent Authority cannot direct CIDCO to
execute a lease in favour of the Society in exercise of powers under
Section 11 of MOFA. He submits that there is collusion in filing of the
application as the Respondent No.1, i.e., the builder as well as the
Applicant is one and the same.
31. In rejoinder, Mr. Walavalkar would submit that what is sought is
conveyance of a right and CIDCO will remain the owner of property and
there will only be the transfer of right to get the leasehold rights of
CIDCO. He would submit that GR dated 22 nd June 2018 is not
applicable as the application for deemed conveyance was filed on 12 th
June 2016. He submits that the rights already vested in the Society to
obtain conveyance by virtue of the Consumer Forum's order, which was
prior to demolition of building. He submits that there is no relevancy of
the aspect of dual ownership as what is sought is the transfer of
leasehold rights.
32. Mr. Khandeparkar would submit that it is settled position that
mere pendency of civil suit will not result in rejection of an application
for deemed conveyance and the title dispute will be decided in the civil
suit. He would further submit that Competent Authority has held that
Director of Respondent No.1 was earlier appointed as Chairman of the
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Society, however, thereafter elections were held and new committee
has came in and therefore deficiency stands cured. He submits that
Section 11 of the MOFA casts a statutory obligation for the benefit of
Society to transfer the rights of promoter which rights have vested in
the Society in the year 2006 when the occupation certificate was issued
and the right to obtain conveyance arose. He submits that the
promoter cannot be permitted to use the disadvantage of demolition
of building to his advantage to wriggle out of the statutory obligations.
He submits that as the rights under MOFA were created, the existence
of building is irrelevant. He would submit that for the purpose of grant
of lease, the construction had to be completed within period of 4 years
which has been done. He submits that tit is not the stand of CIDCO
that as there is a breach, there cannot be any execution of tripartite
agreement.
33. Mr. Sakhadeo, learned counsel appearing for the CIDCO would
submit that as per the terms of agreement to lease, upon the erection
of building within a period of 4 years, lease will have to be executed.
He would submit that there is no privity of contract between CIDCO
with the Society and the owner was a mere licensee.
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REASONS AND ANALYSIS :
Preliminary Objection:
34. I shall first deal with the preliminary objection relating to the
maintainability of Petition raised by Dr. Chandrachud as regards the
alternate remedy of filing a suit. The present Petition has been filed
under Article 227 of Constitution of India against the order of
Competent Authority rejecting the application for deemed conveyance.
Under Article 227 of Constitution of India, the High Court has the
power of superintendence over all Courts and tribunals throughout the
territories in relation to which it exercises jurisdiction and can interfere
where there is refusal to exercise jurisdiction. It is well settled
proposition of law that the existence of an alternate remedy is not per
se a constitutional bar to exercise jurisdiction under Article 226/227 of
Constitution of India. The issue is whether the remedy of filing a suit is
an alternate remedy which will question the maintainability of the
Petition at the threshold. The challenge in the present Petition is to the
refusal of the Competent Authority to exercise the jurisdiction vested
in it under Section 11 of MOFA. A catena of decisions have held that
the grant of deemed conveyance does not conclude the issue of right
title and interest in the property in respect of which deemed
conveyance has been granted and aggrieved parties are entitled to
institute a suit before the Civil Court to substantiate their claim. The
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law laid down is that in event the parties seeks to establish any right
title and interest in the subject property, the grant of deemed
conveyance will not come in the way of the civil proceedings as it does
not amount to concluding the issue of title in the property. The Court
refuses to entertain the Petition under Article 226/227 against a
challenge to the order of grant of deemed conveyance where the
issues pertaining to right, title and interest in property are raised in
which case the parties are relegated to the filing of civil suit to
establish their right in the property. Accepting the contention of Dr.
Chandrachud will amount to laying fetters on the powers under Article
226/227 of Constitution of India. In my view, the remedy of filing a civil
suit to conclude the issue of title is an appropriate remedy to which
parties can be relegated and not an alternate remedy which will
question the very maintainability of the Petition under Article 227 of
Constitution of India. In the decisions of Subash Ramchandra Navare
(supra) and Shimmering Heights CHS Ltd (supra) and Mehboob Ali
Humza (supra), the challenge was by the promoters to the grant of
deemed conveyance claiming contractual rights in the subject property
and in that background this Court refused to exercise the jurisdiction
under Article 226/227 and relegated the parties to filing of civil suit.
None of the decisions relied upon by Dr. Chandrachud lay down as an
absolute proposition of law that the filing of civil suit is the only
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remedy available against the orders passed under Section 11 of MOFA,
in which event the rule of self imposed restraint should be invoked.
The preliminary objection is, thus, liable to be rejected.
PROCEEDINGS BEFORE THE COMPETENT AUTHORITY:
35. Alleging non compliance of the statutory obligations, the
Petitioner through its Chairman Jimmy Narendra Patel and Secretary
Rajesh Ravjibhai Patel filed an application on 12 th June, 2018 under
Section 11(3) of MOFA seeking certificate entitling the Petitioner to
unilateral deemed conveyance of the subject plot. Following two
rounds of remand by the High Court to the Competent Authority, the
Competent Authority by the impugned order dated 18 th January, 2023
rejected the application for deemed conveyance. It is however not
necessary to burden the judgment with the details of the previous
litigation leading to de novo hearing by the Competent Authority.
36. The Application was resisted by the legal heirs of Ambo Gadge
and Shripat Laxman Patil broadly on following grounds:
(a) The application filed under Section 11 of MOFA suffers
from several defects.
(b) The Agreement of Assignment cum Sale dated dated 15th
May, 2003 in favour of the Respondent No.1 is an unstamped,
unregistered fraudulent document not executed by the owners.
(c) The Respondent No.1 got executed 26 agreements of sale
of flats in the year 2016 in favour of its Directors or associate
concerns.
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(d) There is no tripartite agreement executed between the
original allottees and CIDCO for valid transfer/assignment of
lease.
(e) There is no privity of contract between the original
allottees and flat purchasers.
(f) All documents submitted to CIDCO for permissions
including transfer application dated 23 rd March, 2004 for transfer
of plot to Respondent No.1 are forged documents.
FINDINGS OF THE COMPETENT AUTHORITY:
37. Broadly summarizing, the Competent Authority rejected the
application for the following reasons:
[a] The Agreement of Assignment cum Sale cum Development
dated 15th May 2003 being an unregistered unstamped notarised
document and not as per the transfer scheme of CIDCO did not create
any rights in the Respondent No 1 or the flat purchasers.
[b] There is no material on record to substantiate the appointment
of Jimmy Patel as Chairman as per the Bye-laws and as per Clause (A)
(1)(iii) of GR dated 22nd June, 2018. The resolution is dated 24 th June,
2018 and the application has been filed on 12 th June, 2018 which
creates a doubt about the authorisation to file the Application.
[c] The Director of Respondent No.1 developer and the Chairman
of Petitioner-Society through whom the Application for deemed
conveyance are one and same person.
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[d] The commencement certificate and occupation certificate have
been issued in name of Ambo Gadge and Laxman Patil. The owners not
being the signatories to the flat purchasers agreement and the flat
purchaser's agreement having being executed by Respondent No.1-
developer without the owner's consent and without any power of
attorney is not binding upon the owners.
[e] Some of the flats have been sold by the developer even after
disconnection of water and electricity connection for a consideration
of Rs. 1,00,000/ and lesser market value is shown.
[f] The Applicants have suppressed the fact of demolition of the
building in October, 2022 and has not approached the Authority with
clean hands.
[g] The application under Section 11(3) of MOFA is defective due
to absence of requisite accompaniments, certain blanks in the
documents and containing incorrect and incomplete information.
[h] There is no tripartite agreement between CIDCO and Ambo
Gadge and Laxman Patil and no rights can be created by an
unregistered document.
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STATUTORY FRAMEWORK OF MOFA:
38. Under the statutory scheme of Section 11 of MOFA, an
obligation is cast upon the "Promoter" to take all necessary steps to
complete his title and convey to the organisation of persons, who take
flats, which are registered either as co-operative society or company or
association of apartments, his right, title and interest in the land and
building by executing a document in that regard in accordance with the
agreements executed under Section 4 of MOFA.
39. In event of non compliance of the obligation by the Promoter to
convey his title to the Society, Sub-Section (3) of Section 11 permits the
co-operative society to approach the Competent Authority seeking
certificate that the Society is entitled to have the unilateral deemed
conveyance executed in their favour and to have it registered.
40. Under Sub Section (4) of Section 11, the Competent Authority,
upon receipt of an application through members of co-operative
society under sub-section 3, is required to conduct an enquiry and after
verifying the authenticity of the documents submitted, by giving the
Promoter a reasonable opportunity of being heard, after arriving at a
satisfaction as to the entitlement of the Society is required to issue a
certificate conveying the right, title and interest of the promoter in the
land and building in favour of the Applicant as deemed conveyance.
Section 11 of MOFA reads thus :
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"11. Promoter to convey title, etc., and to execute
documents, according to the agreement.
(1) A promoter shall take all necessary steps to complete his
title and convey to the organisation of persons, who take flats,
which is registered either as a co-operative society or as a
company as aforesaid or to an association of flat takers or
apartment owners , his right, title and interest in the land and
building, and execute all relevant documents therefor in
accordance with the agreement executed under section 4 and if
no period for the execution of the conveyance is agreed upon,
he shall execute the conveyance within the prescribed period
and also deliver all documents of title relating to the property
which may be in his possession or power.
(2) It shall be the duty of the promoter to file with the
Competent Authority, within the prescribed period, a copy of
the conveyance executed by him under sub-section (1).
(3) If the promoter fails to execute the conveyance in favour
of the Cooperative society formed under section 10 or, as the
case may be, the Company or the association of apartment
owners, as provided by sub-section (1), within the prescribed
period, the members of such Co-operative society or, as the case
may be, the Company or the association of apartment owners
may, make an application, in writing, to the concerned
Competent Authority accompanied by the true copies of the
registered agreements for sale, executed with the promoter by
each individual member of the society or the Company or the
association, who have purchased the flats and all other relevant
documents (including the occupation certificate, if any), for
issuing a certificate that such society, or as the case may be,
Company or association, is entitled to have an unilateral
deemed conveyance, executed in their favour and to have it
registered.
(4) The Competent Authority, on receiving such application,
within reasonable time and in any case not later than six
months, after making such enquiry as deemed necessary and
after verifying the authenticity of the documents submitted and
after giving the promoter a reasonable opportunity of being
heard, on being satisfied that it is a fit case for issuing such
certificate, shall issue a certificate to the Sub-Registrar or any
other appropriate Registration Officer under the Registration
Act, 1908, certifying that it is a fit case for enforcing unilateral
execution, of conveyance deed conveying the right, title and
interest of the promoter in the land and building in favour of
the applicant, as deemed conveyance.
(5) On submission by such society or as the case may be, the
Company or the association of apartment owners, to the Sub-
Registrar or the concerned appropriate Registration Officer
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appointed under the Registration Act, 1908, the certificate
issued by the Competent Authority alongwith the unilateral
instrument of conveyance, the Sub-Registrar or the concerned
appropriate registration Officer shall, notwithstanding anything
contained in the Registration Act, 1908, issue summons to the
promoter to show cause why, such unilateral instrument should
not be registered as 'deemed conveyance' and after giving the
promoter and the applicants a reasonable opportunity of being
heard, may on being satisfied that it was fit case for unilateral
conveyance, register that instrument as, 'deemed conveyance'."
41. In the context of the present case, the definition of promoter
under Section 2(c) of MOFA assumes significance and reads thus:
"promoter" means a person and includes a partnership firm or a
body or association of persons whether registered or not who
constructs or causes to be constructed a block or building of flats
or apartments for the purpose of selling some or all of them to
other persons, or to a company, co-operative society or other
association of persons, and includes his assignees; and where the
person who builds and the person who sells are different persons,
the term includes both."
42. In exercise of powers under Section 15 of MOFA, The
Maharashtra Ownership Flats (Regulation of the Promotion of
Construction etc.) Rules, 1964 have been framed. Rule 5 prescribe the
particulars to be contained in the agreement which is required to be in
accordance with Form V. Clause 13 of the Model Agreement, which
clause is non derogable, provides for the covenant as to conveyance
which reads thus:
"13. Unless it is otherwise agreed to by and between the
parties hereto the Promoter shall, within four months of
registration of the Society or Limited Company, as aforesaid
cause to be transferred to the Society or Limited Company all
the right, title and the interest of the Vendor/Lessor/Original
Owner/Promoter and/or the owners in the aliquot part of the
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said land together with the building/s by obtaining/or
executing the necessary conveyance/assignment of lease of the
said land (or to the extent as may be permitted by the
authorities) and the said building in favour of such Society or
Limited Company, as the case may be such conveyance/
assignment of lease shall be in keeping with the terms and
provisions of this Agreement."
43. Rule 13 of Rules of 1964 prescribes the procedure for scrutiny of
applications and notice to parties and Sub-Rules (1) and (2) of Rule 13
read thus:
"13. Scrutiny of applications and notice to the parties, etc.-
(1) Registration of applications.-
(a) On receipt of an application, the office of the
Competent Authority shall endorse on it the date of its receipt
and shall as soon as possible, examine it and satisfy itself that
the person presenting it has authority to do so and that it
conforms with all the provisions of the Act and the Rules made
thereunder.
(b) If the Competent Authority is satisfied that the
application is complete in all respect, it shall cause the
application to be registered, as admitted, in the appropriate
register maintained under these Rules.
(c) If the application is not complete, the Competent
Authority may send notice in the Form VIII, to the applicant/s to
rectify the defects or comply with such requirements, as it may
deem fit to conform with all the provisions of the Act, and these
Rules, within a period of fifteen days of the receipt of the said
notice. The Competent Authority may, for sufficient cause, may
give further extension of not more than fifteen days to comply
with the requirements.
If the above defect in an application is rectified, the
Competent Authority shall cause it to be admitted and register
the application in the appropriate register.
(2) Maintenance of registers and procedure for issuing
notice, etc.-
The Competent Authority shall maintain the Register of
applications received by it in Form IX.
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On admitting the application, the Competent Authority
shall, within a period of fifteen days thereof, issue a notice in
Form X to the opponent/s requiring him/them to file the written
statement on the day, date and place as may be specified
therein. Such notice shall be served on the opponents by
registered post acknowledgment due or under certificate of
posting on the last known address."
UNDISPUTED FACTS OF PRESENT CASE:
44. The undisputed facts borne out from the record is that the
Petitioner Society is constructed on land admeasuring 4000 square
meters being GES Plot No 8A, Sector No 35, Kamothe Phase II, Navi
Mumbai, Taluka Panvel, District Raigad. The said plot was agreed to be
leased by Respondent No.10-CIDCO vide Agreement to Lease dated
25th November, 2002 executed between Respondent No 10 and Ambo
Balya Gadge and Shripat Laxman Patil and license was granted to Ambo
and Shripat to construct building/s for residential/commercial use. The
approvals and sanctions for construction were granted by CIDCO in
name of Ambo Gadge and Shripat Patil. The building came to be
constructed by the Respondent No 1 Developer, who entered into
agreements for sale with the individual flat purchasers. On 20 th
February, 2006, the Respondent No.10 issued Occupancy Certificate in
name of Ambo Gadge and Shripat Patil. The Certificate of Registration
of the Petitioner Society was issued on 24th May, 2018. During the
period August, 2022 to December, 2022, the building came to be
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demolished pursuant to order of demolition issued by the Planning
Authority being dilapidated.
WHETHER THE OWNERS ARE PROMOTERS AND BOUND BY THE FLAT
PURCHASER'S AGREEMENTS:
45. The debate in the present case would centre upon the right of
the flat purchasers to enforce the MOFA obligations against the
Owners. There is no opposition from Respondent No 1 Developer to
grant of conveyance to the Petitioner. The Petitioner has been non-
suited by Competent Authority by casting a doubt upon the right of the
Respondent No. 1 to carry out construction and execute the flat
purchasers agreement, to which the Owners are not signatories, on
basis of unregistered unstamped agreement dated 15th May 2003.
46. The source of right of the Owners to the subject property, is the
Agreement to Lease dated 27th April, 2022, the execution whereof has
not been disputed by the Owners. By the said agreement, what was
granted to the Owners was a license to enter upon the subject plot and
construct the building within the prescribed period of four years and
upon certification thereof, the Owners acquired the right to obtain an
Agreement of Lease in their favour.
47. In execution of the rights granted under the license, the
Petitioner Society came to be constructed. The various permissions and
approvals for the construction came to be granted by CIDCO in the
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name of the owners and was pursuant to the Agreement to Lease
executed by CIDCO in favour of the Owners upon applications filed by
the Owners with CIDCO containing their signatures. Although the
construction was carried out by the Respondent No 1, the sanctions
were obtained in the name of the Owners.
48. As discussed above, the MOFA obligations are imposed on the
Promoter, which expression has been defined in Section 2(c) as the the
person or entity which constructs or causes to be constructed a block
or building of flats for purpose of selling some or all of them to other
person.
49. The Application for deemed conveyance is resisted by the
Owners by disowning the execution of development agreement dated
15th May, 2003 executed with the Respondent No.1-developer and
labelling the documents submitting to CIDCO as fraudulent. Even if
the contention as regards the Agreement dated 15th May, 2003 being
unregistered unstamped and fraudulent is accepted for sake of
arguments and the agreement is dis-regarded, the factum of the
various permissions and approvals being granted in the name of the
Owners cannot be discarded without the same being set aside by a
Competent Court.
50. The Agreement to Lease dated 25 th November, 2002 has not
been disputed by the Owners which makes it incumbent to erect the
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building within prescribed period of four years. It is therefore difficult
to digest that inspite of the mandatory condition, no steps were taken
by the Owners to cause the construction in order to obtain the lease
hold rights. It is also difficult to comprehend and accept the silence and
inaction on part of the Owners during the period from the execution
of the Agreement in the year 2002 till the resistance to the deemed
conveyance in the year 2018.
51. For the Owners to be covered by the definition of Promoter, it
had to be seen whether the construction was caused by the Owners.
The plethora of documents such as the application for Development
Permission dated 5th June, 2003 submitted by the Architect in name of
Ambo Gadge & Ors, the commencement certificate issued in name of
Ambo Gadge and Shripat Patil and the Occupancy Certificate issued in
name of Ambo Gadge and Shripat Patil leads to the inevitable
conclusion that the construction was at the instance of the Owners.
52. There is nothing more which is required to satisfy the precise
definition of Promoter which includes the person or entity who causes
the construction of building/s. It is very well for the Owners to disclaim
the construction carried out by the Respondent No.1 by disputing the
factum of execution of development agreement, however, as all
approvals and permissions stand in the name of the Owners, which
have not been set aside by any Competent Court, the Owners are
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covered by the definition of Promoter under Section 2(c) of MOFA.
53. Although the execution of Agreement of Assignment cum Sale
cum Development dated 15th May, 2003 is disputed, there is on record
the application dated 23rd July 2004 seeking permission from CIDCO
for transfer of the said plot in favour of the Respondent No.1, which
application has been signed by both the owners. Along with the
application, the allotment letter as well as the requisite indemnity
bond was executed which is also signed by owners. Prior to the grant
of occupancy certificate in the year 2006, the application was made to
CIDCO in the year 2004 was for transfer of said plot in favour of the
Developer which would indicate the knowledge of the owners about
the development on plot. The permission to transfer has been granted
by CIDCO vide order dated 9 th October, 2006. Although it is sought to
be contended that these documents are fraudulent documents and not
signed by the owners, in the civil suit filed in the year 2019 there is no
prayer seeking cancellation of these documents as being fraudulent.
Cumulative consideration of the documents on record would inevitably
lead to the conclusion that the Owners caused the construction of the
Petitioner-Society.
54. The definition of expression "Promoter" is of widest amplitude
and is so defined to ensure that the intention of Legislature to enact
MOFA, which was to curb the menace of sundry abuses, malpractices
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and difficulties relating to the promotion of the construction of, and
the sale and management and transfer of flats taken on ownership
basis, is achieved. The Owners fall within the definition of "Promoter"
under Section 2(c) of MOFA and are bound to convey their right title
and interest in the land and building in accordance with the flat
purchaser's agreement. The Owners cannot be permitted to contest
the execution of the Agreement with the Developer and thereby
question the right of the flat purchasers to obtain deemed conveyance
of the land and building.
55. There has to be specific pleadings of fraud and nothing has been
demonstrated which will even prima facie indicate fraud in obtaining
various permissions from CIDCO for the construction. In any event, it is
not the function of Competent Authority to go into the validity of the
permissions. It was sufficient for grant of deemed conveyance that all
permissions and approvals were issued by CIDCO in the name of the
Owners and thus the Owners fall within the definition of promoter.
56. Viewing the dispute from another angle, upon a reading of the
agreement to lease entered into between the CIDCO and owners,
there was an obligation to erect the buildings within a period of 4 years
and if the owners seek to disown the construction carried out, it will
amount to breach of conditions of the agreement to lease. In that
event, even the owners cannot be said to have a right to get an
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agreement of lease in their favour from the CIDCO in respect of the
said plot and consequently no right to even contest the application for
deemed conveyance.
57. The Competent Authority lost sight of the definition of Promoter
under Section 2(c) of MOFA and while accepting the factual position of
permissions and sanctions as well as the occupation certificate being
issued in name of Owners, failed to appreciate that the Owners would
then fall within the definition of Promoter and would be bound by the
flat purchaser's agreement. Once the Owners are held to be
promoters, they are bound by MOFA agreements and the non
registration of the agreement of assignment cum development cum
sale dated 15th May 2003 becomes immaterial for grant of relief of
deemed conveyance.
58. Perusal of the flat purchasers agreement discloses recitals
referring to the agreement to lease dated 25 th November 2002 as well
as the agreement of assignment-cum-sale-cum-development dated 15 th
May 2003 executed in favour of the developer and also makes
reference to the commencement certificate annexed at Exhibit-A to
the application, which is issued in the name of owners and it is based
on this assurance and representation that the approvals have been
issued in name of the Owners pursuant to an agreement to lease
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executed by CIDCO ,, which rights have been assigned by the Owners in
favour of developer by an agreement dated 15 th May 2003, that the flat
purchasers have been convinced to invest in the project. It is now too
late for the owners to do a volte face and say that they were unaware
of any development being carried out on their plot of land and that the
agreement executed with the developer is fraudulent document and
no permission was obtained from CIDCO by them. That would amount
to 166 flat purchases being rendered homeless after having parted
with valuable consideration, which cannot be countenanced. The issue
as regard the fraudulent nature of documents or right, title and
interest of the owners is an issue to be decided in the civil suit and
cannot be a ground to non-suit the Petitioners.
VALIDITY OF THE IMPUGNED ORDER OF COMPETENT AUTHORITY:
59. The remit of inquiry by the Competent Authority in adjudicating
an application under Section 11 of MOFA has been succinctly laid down
by this Court in Mazda Construction Company v. Sultanabad Darshan
CHS Ltd8 which view has been consistently followed in latter decisions.
Paragraph 20 of the said decision lays down as under:
"To my mind, reading of Sections 10 and 11 together with
Section 5A would make it amply clear that what is to be
performed by the Competent Authority is a duty and
obligation which the promoter is to perform in law. That is to
convey the title and execute the documents according to the
agreement. If that is the duty which is to be performed by the
8 2012 SCC OnLine Bom 1266
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promoter, but which he fails to perform, then, the Competent
Authority steps in to fulfil it. That is a duty towards the flat
purchasers and which duty cannot be avoided except at the
cost and pains of legal proceedings including a criminal
prosecution. In these circumstances and when sections 10 and
11 are read together and harmoniously with the preceding
sections including those which contain the particulars of the
agreement, then, it becomes absolutely clear that what has to
be conveyed even by a deemed conveyance, which is an
unilateral act and which enables the flat purchasers to acquire
the Promoter's right, title and interest in the land and the
building. Therefore, it cannot be said that an unilateral deemed
conveyance conveys something more than what belongs to the
Promoter. Section 11(1) provides for conveyance of Promoter's
right, title and interest in the land and building as is clear from
the words "his right, title and interest...." appearing therein. I
am not in agreement with Mr. Samdani that there are no
guidelines guiding and enabling the Competent Authority to
grant a deemed conveyance and therefore, the powers are
likely to be abused or exercised arbitrarily in every such case.
There are inbuilt checks and safeguards inasmuch as what is to
be issued is a certificate entitling a unilateral deemed
conveyance. It is not a document which stands alone or is a
distinct transaction. It is a grant or conveyance in terms of
what the agreement between parties stipulates and provides
for being conveyed to the flat purchasers. Therefore, the
Applicant is permitted to apply to the Competent Authority u/s
11(3) and such application is to be accompanied by true copies
of the registered agreements for sale executed by the
Promoter with each individual member/flat purchaser and
other relevant documents. It is to further that and to insist on
the promoters fulfilling their obligations within the prescribed
period, but noticing that their failure has resulted in hardship
to flat purchasers, that the Legislature has stepped in. To my
mind, this is not a power which can be exercised by the
Competent Authority in ignorance of or by brushing aside the
earlier provisions and contents of the agreement with the flat
purchasers. Equally, the Competent Authority has to take into
consideration the contents of other relevant documents."
60. Section 11(4) of MOFA confines the inquiry to examine the
existence of a registered Society, the members of which have entered
into flat purchasers agreement under Section 4 of MOFA and to look
into the covenants in the agreement and after arriving at a finding of
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non compliance by the Promoter, to step into the shoes of promoter
and to comply with the obligations.
61. The Competent Authority being tasked with the duty to grant
Certificate for execution of Unilateral Deemed Conveyance, in
accordance with the terms of the Flat Purchasers Agreement, the
covenant in the agreement assumes significance. Clause 36 of the said
agreement reads as under:
"the Developers shall endeavour to have the said property
transferred and conveyed in favour of the association / society
in respect of the said property and the said property and the
building erected thereon within the prescribed period time
from the date on which the Developers has sold and received
payment for all the premises and sold and handed over
possession of the premises to the respective members/
purchaser whichever is later PROVIDED THAT the Developers
has been paid and has received full consideration amount
payable by all the Premises Holder."
62. Once the non performance of obligations as envisaged by the
MOFA is established, the Competent Authority is mandated to comply
with the promoter's obligations. It is not open for the Competent
Authority in the limited extent of jurisdiction to delve into the validity
of the documents executed between the parties including the issue of
title and to reject the application of deemed conveyance on the ground
of validity of the documents.
63. The conspectus of the findings of Competent Authority is that
the Agreement of Assignment executed on 15th May 2003 being an
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unregistered unstamped notarised document and not as per the
transfer scheme of CIDCO did not create any rights in the Respondent
No.1 or the flat purchasers. The documents submitted are incomplete
documents containing blanks. Despite notice being issued by planning
authority for vacating the dilapidated premises during the period from
20th July 2016 to 3rd August 2016, 26 flat purchasers agreement were
executed for a sum of Rs.1,00,000/- only, and more than 30
tenements/commercial shops are in the name of directors of the
Respondent No.1-developer. There was suppression of the fact of
demolition of building and conveyance under Section 11(1) of MOFA
can be of the land and building. The building is not in existence and the
authenticity of the agreements is pending before the civil Court.
64. The rejection of the application by arriving at the above findings,
in my view, goes way beyond the jurisdiction of Competent Authority.
It was not necessary to consider the validity of Agreement of
Assignment dated 15th May, 2003 as all permissions such as the
commencement certificate and the occupancy certificate were issued
in name of the Owners and having caused the construction, the Owners
were Promoters under MOFA and bound by the flat purchasers
agreement. For the same reason the finding of the Competent
Authority that there is no privity of contract between the owners and
the flat purchasers cannot be accepted.
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65. The right of Respondent No.1 to enter into flat purchasers
agreement was not an issue to be considered by the Competent
Authority when it noticed that the permissions were obtained by the
Owners making them Promoters. The flat purchasers cannot be caught
in the cross-fire between the developer and the Owners and be
deprived of their entitlement to deemed conveyance where non
compliance of MOFA obligations is established. Learned Single Judge
of this Court has in New Manoday CHS Ltd (supra) held that if any
person claims that promoter is not the owner in respect of the land on
which building is constructed, it is for that person to institute civil suit
and establish his rights to the land. Pendency of such title disputes
cannot be a ground for not conveying land under Section 11 by the
Competent Authority. The authenticity and validity of the Agreement
is an issue to be decided by the Civil Court. The manner of sale of the
flats could not be gone into by the Competent Authority under Section
11 of MOFA. The Competent Authority has ventured in the title dispute
between the parties by holding that the development agreement is not
validly executed and therefore no rights accrue to the flat purchasers.
The rights of the flat purchasers flow from the statutory obligations
under MOFA which includes the owner as promoter.
66. As far as the validity of appointment of Chairman who is said to
be director of Respondent No.1-developer is concerned, the
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conveyance, if any, would be in the name of Society and not in the
name of any individual member and therefore whether the chairman
has been validly elected or not is an issue beyond the jurisdiction of
Competent Authority. In any event, any defect in authorisation stands
cured by a new committee being appointed. Further, the statutory
provisions does not bar the developer from purchasing flats in the
building and having done so, becomes member of the Society and
would not create an embargo on filing an application under Section
11(3) of MOFA.
67. As regards the finding on the demolition of building, Mr.
Khandeparkar is right in submitting that the right to obtain the
conveyance was triggered in the year 2006 as Section 11 of MOFA
imposes an obligation on the promoter to complete his title and
convey his right, title and interest in the land and building in
accordance with the agreement executed under Section 4 of MOFA and
if no period is agreed upon, then within the prescribed period of 4
months from the date of registration of Society. It is therefore clear
that the subsequent event of demolition of building, pursuant to a
statutory notice, will not extinguish either the right of the flat
purchasers to obtain the conveyance of land or obligation of the
promoter to convey the same to the flat purchasers. The promoters
cannot commit default of their statutory obligations and then turn the
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default to their advantage by denying right of conveyance by claiming
that the demolition of building has extinguished the right of the flat
purchasers to obtain the conveyance. Adopting such an approach will
giving a leeway to the defaulting promoters to deliberately delay the
compliance of their statutory obligations and then prejduice the rights
of the flat purchasers on the ground of occurrence of subsequent
adverse events.
68. The questioning of the authority for filing the application for the
reason that the resolution authorising the Chairman and Secretary to
file the application for deemed conveyance was passed on 24 th June
2018 whereas the indemnity bond as well as the affidavits have been
notarized on 12th June 2018 cannot be sustained, once the Competent
Authority had admitted the application and issued notices and the
application having gone through two rounds of remand by the High
Court. Rule 13 of the Rules under MOFA tasks the Office of Competent
Authority to scrutinise the application presented and after satisfying
itself that the person presenting it has the authority to do so and that
it conforms with the provisions of MOFA Act and Rules to permit the
registration of application. An opportunity to rectify the defects is
given by sending notice in Form-VIII In the present case, no such Form-
VIII notice was issued to the Petitioner so as to enable them to rectify
the defects and the issuance of notice to the parties thus implies the
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completion of the application. In the absence of granting an
opportunity to the Petitioners to rectify the alleged defect, there can
be no adverse finding on the said issue.
69. The sale of flats by the Developer to the family members and
associate concerns at an alleged undervalued rate is not an issue which
can be considered in an adjudication under Section 11 of MOFA. There
is no embargo placed by MOFA upon the Promoter-Developer to
purchase the flats in the developed building and while registration of
Deemed Conveyance, the deficit stamp duty on the flats, if any, can be
recovered by revenue authorities. The Competent Authority in its
limited jurisdiction is not required to go into the validity of the flat
purchasers agreement.
70. The decision of Shree Chintamani Builders v. State of
Maharashtra9 clarified the position laid down in Mazda Construction
(supra) that the issuance of deemed conveyance will not conclude the
right, title and interest of the parties and it is open for a civil suit to be
filed to establish the right, title and interest which the owners have
done in the present case. However, the filing of civil suit will not come
in to the way of Competent Authority to discharge its duty under
Section 11 of the MOFA. The Competent Authority has taken into
consideration extraneous grounds of validity of development
9 (2016) SCC OnLine Bom 9343.
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agreement and title disputes to non suit the Petitioners which is
unsustainable.
RELIEF TO BE GRANTED:
71. The Affidavit in reply filed by CIDCO states that the subject plot
was vested in CIDCO by virtue of Land Acquisition Unit Case/Award No
150 and in lieu of the land acquisition under 12.5% Scheme, the subject
plot was allotted to Ambo Gadge and Shripat Patil vide allotment letter
dated 27th September, 2002. An Agreement to Lease dated 25 th
November, 2002 was executed between CIDCO and Ambo Gadge and
Shripat Patil. Pertinently, the Deponent further states that presently,
the subject plot stands in the name of Ambo Gadge and Shripat Patil.
72. The Agreement to Lease came to be executed between CIDCO
and the Owners on 25th November, 2002 by which license was granted
to the Owners to construct the building/s on the subject plot. Clause 7
of the Agreement provides for grant of lease of land and building for
period of 60 years by CIDCO upon the certification of the construction
being erected in accordance with the terms.
73. Coming to the statutory entitlement of the Petitioner, it is only
the Promoter's right which can be conveyed to the Petitioner. The
Owners had the right under the Agreement to Lease to obtain lease of
land and building for period of 60 years form CIDCO upon certification
of the construction. The occupancy certificate has been granted and
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thus the right to obtain lease from CIDCO has ripened. In its Affidavit in
reply there is no contest by CIDCO to grant of the lease in respect of
subject land. It is this right of the Owners to obtain assignment of
lease which will have to be granted. By grant of deemed assignment of
lease, there is no interference in the ownership rights of CIDCO as
there is no objection demonstrated by CIDCO which would have
disentitled the Owners to obtain assignment of lease.
74. Clause 13 of the Model Form-V Flat Purchaser Agreement,
reproduced hereinabove, provides for transfer of right, title and
interest of the Owner / Promoter together with the building by
obtaining or executing the necessary conveyance or assigning of lease
of the said land in favour of the Society. It is, therefore, clear that it is
not only the conveyance of the land which can be granted but also the
assignment of lease. In the present case, although the application may
have been made for execution of a deemed conveyance, the
Competent Authority is entitled to mould the relief and grant
certificate for assignment of lease in favour of the Society.
CONCLUSION:
75. The Competent Authority exercises limited jurisdiction while
adjudicating an application under Section 11 of MOFA, which
jurisdiction does not extend to delving into the legality and validity of
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the agreements executed between the parties. In case of title dispute,
the remedy is to file a substantive suit for title. In the present case, the
Application for deemed conveyance has been rejected primarily on the
ground that the Agreement between the Owners and the Developers
did not grant any right to the Developer or the flat purchasers being an
unregistered unstamped document. Apart from the fact that the
validity of the Agreement could not be decided in exercise of limited
jurisdiction, the planning permissions having been obtained in name of
the Owners, the Owners were "Promoters" under MOFA and were
bound by the flat purchaser's agreement. The interse dispute between
the Owner and Developer cannot be permitted to jeopardize the right
of the flat purchasers to obtain conveyance of promoter's right under
MOFA. The title dispute is an issue to be adjudicated in the Civil Court
in the pending Civil Suit, and rights will be crystallized in civil
proceedings. The Competent Authority having noticed non compliance
of the statutory obligations by Promoter had no option but to step in
and fulfill the statutory obligations. Instead of doing so, the
Competent Authority has delved into the title dispute of the Owners
and Developers and rejected the Petitioner's application.
76. In the present case, the Competent Authority has non suited the
Petitioners on a title dispute which constitutes an error in jurisdiction
warranting interference under Article 227 of the Constitution.
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Resultantly, Petition succeeds. In light of the discussion above, the
following order is passed :
: ORDER :
(a) The impugned order dated 18th January, 2023 passed by the Competent Authority in Deemed Conveyance Application No.6236 of 2023 is hereby quashed and set aside.
(b) The Deemed Conveyance Application No.6236 of 2023 is remitted to the Competent Authority for the limited purpose of issuance of Certificate entitling the Petitioner to leasehold rights in respect of the subject plot.
77. Rule is made absolute in above terms.
78. In view of the disposal of Writ Petition, nothing survives for consideration in the pending civil/interim applications and the same stand disposed of.
[Sharmila U. Deshmukh, J.]
79. At this stage, Mr. Godbole, learned Senior Advocate appearing for the Respondent Nos.5 and 6 seeks stay to the present judgment. The judgment is stayed for a period of six weeks from date of uploading the judgment on official website.
[Sharmila U. Deshmukh, J.]
Patil-SR (ch) 46 of 46
Signed by: Sachin R. Patil
Designation: PS To Honourable Judge
Date: 21/11/2024 18:30:21