Deemed Conveyance Cannot Be Denied to Completed Housing Societies in Multi-Building Layouts: Bombay High Court
Overview of the Judgment
The Bombay High Court delivered a significant ruling addressing the entitlement of co-operative housing societies to obtain unilateral deemed conveyance under Section 11 of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 (MOFA), even when the broader real estate layout of which their building forms a part remains only partially developed. The judgment, authored by Justice G.S. Patel, arose from two connected writ petitions — Marathon Era Co-operative Housing Society Ltd. v. Competent Authority & District Deputy Registrar, Co-operative Societies & Ors., Writ Petition No. 180 of 2018, decided together with Gulmohar Lokmilan Co-operative Housing Society Ltd. & Anr. v. Competent Authority & Ors., Writ Petition No. 295 of 2015 — and was pronounced on 18 April 2024.
The decision addresses a recurring challenge in urban real estate: when a developer constructs multiple residential buildings in phases across a single undivided tract of land, can a society representing flat purchasers in one completed building demand conveyance of its title while the surrounding development remains in progress? The Court answered this question with a carefully calibrated "yes" — but with important qualifications regarding the precise scope and extent of the rights that may validly be transferred.
Background and Statutory Framework
MOFA and the Obligation to Convey
Section 11 of MOFA casts a statutory duty on every promoter to execute a proper conveyance of their right, title and interest in the relevant land and building in favour of the organisation formed by flat purchasers. Where a promoter defaults on this obligation, the concerned society is entitled to approach the designated Competent Authority seeking a certificate of unilateral deemed conveyance — essentially a mechanism enabling flat purchasers to obtain marketable title without the promoter's active cooperation.
The Court reaffirmed that MOFA is a protective legislation enacted in favour of flat purchasers, and its conveyance provisions cannot be rendered toothless merely because a development is structured as a large phased layout involving multiple buildings, shared amenities, and separate co-operative societies.
Facts: Marathon Era Co-operative Housing Society Ltd.
The Development at Lower Parel
The petitioner society, Marathon Era Co-operative Housing Society Ltd., was constituted in the context of a residential complex situated at Lower Parel, Mumbai. The overall development was spread across a property measuring approximately 35,000 square metres and comprised several components — including Marathon Era, Marathon Innova, parking infrastructure, recreational grounds, internal roads, a clubhouse, and various other shared facilities.
As per the agreements executed with flat purchasers in August 2004, Marathon Era consisted of four residential wings occupying an identified land parcel of approximately 6,787.82 square metres within the larger composite property. These agreements further contemplated the application of the Maharashtra Apartment Ownership Act, 1970 and the eventual transfer of rights concerning the building and associated shared facilities.
The society was registered in January 2010, and an occupation certificate was issued in May 2010. Notwithstanding these developments, disputes arose over whether the developer was obligated to transfer title while other portions of the layout remained open for development.
The Conveyance Application and Its Rejection
The society filed an application for unilateral deemed conveyance under Section 11 of MOFA, supported by an architect's certificate claiming entitlement to approximately 56.19% of the total Floor Space Index (FSI) attributable to the larger property. The application also sought extensive rights over common amenities and other portions of the land.
By an order dated 10 April 2017, the Competent Authority declined to grant the conveyance. The principal grounds were that the application sought rights considerably beyond what the governing agreements contemplated, and that the development of the overall layout was yet to reach completion.
Core Legal Questions Examined by the Court
Justice G.S. Patel framed and examined several central legal issues:
- Can a society in a completed building demand conveyance before the entire layout is developed?
- What land and development rights can legitimately form part of such a conveyance?
- How must FSI be treated in multi-building, phased layout developments?
- Can a developer indefinitely withhold title by pointing to anticipated future construction or additional development potential?