MUMBAI: On Wednesday, the Bombay High Court upheld a deemed conveyance awarded by a deputy registrar to a commercial cooperative society in Andheri East. The court ruled that a law established for public interest cannot be superseded by a contract between a builder and flat purchasers that allows the builder to retain development rights over the land.
Krishna Developers challenged the deemed conveyance granted to Corporate Centre Premises Co-operative Society Ltd., which represents the unit owners of three buildings registered in 2007. The builder’s lawyer argued for executing the conveyance while reserving specific rights under the agreements with flat purchasers. However, the High Court asserted: “Parties cannot, through agreement, bypass a legislative mandate.”
Ongoing disputes over lack of conveyance are common in Mumbai, hindering court proceedings as builders try to maintain development rights over the land.
Justice Amit Borkar, in a ruling stemming from a 2024 petition, noted that Krishna Developers’ main complaint was that the conveyance granted to the society was “unfavourable to him.” The High Court expressed that disagreement with the outcome does not constitute a jurisdictional error.
The conveyance was approved for the three buildings after an Occupancy Certificate (OC) was issued and all permissible Floor Space Index (FSI) was used according to the sanctioned plan. This was observed following a hearing involving advocate Deepak Chitnis for the builder, Aloka Nadkarni as additional government pleader, and Arun Panickar, the society’s counsel.
Panickar pointed out that despite the builder’s willingness to execute the conveyance, he failed to act within the statutory period, thus necessitating the deemed conveyance process.
A conveyance to the society is mandated by law in public interest once the building is complete. “Section 11 of the Maharashtra Ownership Flats Act (MOFA) imposes a duty on the authority to intervene when the promoter has not executed the conveyance within the allotted time. The authority enforces a statutory obligation created for public benefit,” the court emphasized.
The court also remarked that the records showed no remaining development rights with the promoter after the completion of the three buildings. “Once the available FSI was consumed and occupation certificates were issued, the promoter’s legal obligation to convey became absolute, limited to what is recorded in the sanctioned plan,” the High Court stated, adding, “The promoter cannot use private contractual terms to evade a public law duty imposed by MOFA.”
The High Court clarified that its intervention is justified only when there is a clear lack of jurisdiction, breach of natural justice, or significant legal error. “None of these grounds are present here,” the court noted.
In response to objections from the builder regarding the society management, the court asserted that the authority considering conveyance does not determine complex title issues. “In that context, objections about the society’s internal management must be approached with caution. Societies operate through elected representatives, and while disputes over eligibility, elections, or resolutions may arise, these matters fall under the Co-operative Societies Act and are to be resolved in appropriate forums. They do not render every action taken by the society invalid,” the High Court concluded.
