The Bombay High Court recently ruled that if a flat purchase agreement requires the promoter to transfer land rights to a housing society, the competent authority must grant a certificate of deemed conveyance as per Section 4 and 11(3) of the Maharashtra Ownership Flats Act, 1963. The court heard petitions from the New Manoday Cooperative Housing Society challenging orders rejecting deemed conveyance and attempting deregistration of the housing society due to title disputes. The High Court stated the Authority lacked jurisdiction to consider title issues and must only review developer agreements. It also directed the Authority to issue deemed conveyance.
The Bombay High Court recently ruled that the competent authority must grant deemed conveyance if the flat purchase agreement mandates the promoter to transfer their rights, title, and interest in the land to the housing society.
The High Court ruling stated that the Competent Authority should not consider title disputes between original owners and promoters when reviewing applications for unilateral deemed conveyance under Section 11(3) of the Maharashtra Ownership Flats Act (MOFA), 1963.
The bench clarified that Section 11 imposes an obligation on the promoter to complete the land title transfer to the Society. Section 11(3) empowers the Authority to do so if the promoter fails, as mandated by Section 11(1). Therefore, the Authority's role under Section 11(3) is limited to facilitating what was agreed upon in the Section 4 agreement.
Thus, in effect, if the flat purchase agreement under Section 4 of the Act requires the promoter to transfer their land rights to the society, the competent authority has no choice but to issue a certificate of deemed conveyance as per the Section 4 Agreement.
The court was hearing separate petitions filed by the New Manoday Co-operative Housing Society, located in Kanheri village in Borivali East, challenging orders passed by the Competent Authority under MOFA on October 18, 2023, rejecting its application for a unilateral deemed conveyance of land measuring 1,583 square meters. The second petition challenged a January 24, 2024, order of the minister, co-operation directing the divisional joint registrar of co-operative societies to initiate action for de-registration of the New Manoday housing society.
Both the orders had been passed in view of pendency of a civil dispute between the legal heirs of the original landowners regarding some properties, including the 1,583 sq mts land on which the society building was constructed way back in 1977. The housing society was registered in November 1978.
While the housing society filed for unilateral deemed conveyance with the Competent Authority under MOFA, the legal heirs of the original landowner filed an application for de-registration of the housing society.
The High Court has now stated the Authority lacked jurisdiction to consider title disputes. The Authority only needed to review the agreement with flat purchasers and issue the deemed conveyance. Since the promoter failed its Section 11(1) obligation, there was no basis to reject the society's deemed conveyance application. The court directed the Authority to issue the conveyance to the society.
Regarding deregistration, the court said dismantling a 46-year-old cooperative society now would cause chaos. The minister's order failed to consider this and must be withheld for now.
The ruling provides clarity on the limited scope of authorities when reviewing deemed conveyance applications. By disallowing consideration of different title disputes and focusing only on agreements, it aims to protect housing societies from arbitrary decisions. At the same time, preventing deregistration of an established society upholds the rights and stability of resident members. The orders strike a balance between various stakeholder interests governed by the MOFA.
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