Writ petition challenging Deemed Conveyance certificate issued under MOFA. Court held redevelopment agreement governed by MOFA. Lessee deemed Promoter. Clause reserving land rights to lessee did not invalidate conveyance obligation. Petition dismissed.
Writ Petition dismissed with no order as to costs; Deemed Conveyance certificate upheld.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
Digitally signed by LAXMIKANT LAXMIKANT GOPAL GOPAL CHANDAN CHANDAN Date: 2023.07.05 14:25:16 +0530
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.349 OF 2020
| 1] | Saurin Ketan Jariwala | ] | |
|---|---|---|---|
| Being Partner of M/s. SPE Worldwide | ] | ||
| 703, Parshwa Kunj Co-operative Housing | ] | ||
| Society Ltd. 2 ndBabulnath Cross Lane, |
] | ||
| Behind Jain Mandir, Mumbai – 400 007 | ]… | .. Petitioner. | |
| Versus | |||
| 1] | State of Maharashtra Through Office Government Pleader, |
] ] |
|
| Original Side, High Court, Bombay | ] ] |
||
| 2] | Competent Authority, District Deputy Registrar Co-operative Societies, Mumbai (1) Malhotra House, 6 thFloor, Opposite G.P.O. Mumbai – 400 001 |
] ] ] ] ] |
|
| 3] | Parshwa Kunj Co-operative Housing Society Lt Through its Chairman/Secretary |
d] ] |
|
| Plot No.10, Survey No.427, 2 ndBabulnath Cros Lane, Behind Jain Mandir, Mumbai – 400023 |
s] ] ] |
||
| 4] | Joint Sub-registrar of Assurance, Mumbai City, Ground Floor, Old Custom Hous |
] e] |
|
| Fort, Mumbai 400023. | ]… | .. Respondents. |
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Mr. Anshul Anjarlekar i/by Raval Shah & Co. for the Petitioner. Mrs. P. H. Kantharia, GP, for Respondent No.1/State.
Mr. Ankit Lohia a/w Ms. Usha Tiwari a/w Mr. Manshi Jain for Respondent No.3.
CORAM : ARIF S. DOCTOR, J. Reserved on : 27th April 2023 Pronounced on : 03rd July 2023
JUDGMENT :
of Deemed Conveyance both dated 17th October 2019 passed by Respondent
No. 2 i.e. the District Deputy Registrar Co-Operative Societies, Mumbai, being
the Competent Authority under the provisions of the Maharashtra Ownership
of Flats (Regulation of the Promotion of Construction, Sales Management and
Transfer) Act, 1963 (“MOFA”) on an Application filed by Respondent No.3
under Section 11 of MOFA.
The relevant facts are as follows :-
partnership firm known as Venisons. By and under a Deed of Assignment and
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Transfer dated 14th November 1979 entered into between one Ms. Tehmina
Khorshed Karanjia and Venisons, the building known as “Quetta Terrace” (“the said building”), and land bearing Plot No.10, Cadastral Survey No.427 of Malabar Hill Division in D Ward (“the said land”) was leased to Venisons. The members of Respondent No. 3 were the tenants in respect of the flats in the said
building.
decided to redevelop the same. It was for this purpose that from the year 1991 Venisons entered into various agreements with the tenants of the said building
for redevelopment of the same and to provide alternate accommodation to the
existing tenants.
redevelopment of the said building. The Bombay Building Repair and Reconstruction Board granted an NOC dated 9th March, 1993 and Condition
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No. 1 whereof was as follows, viz.
July 1994 whereby new flat numbers were allocated in the to be constructed
building to the existing tenants.
January 1997 with the tenants for inter-alia settling the terms and conditions
of the Co-operative Society that would be formed by the tenants.
Petition and based on which the Application for Deemed Conveyance had been
filed. It is useful at this juncture to set out the following relevant clauses of the
said Agreement viz. :-
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in respect of the said flat and the rights power and authorities of the said society to manage, look after and attend to the affairs and matters of the said new building. All costs, charges and expenses of the formation, incorporation and registration of the said Society and or any other documents and or agreements will be shared by the members of the said Society in proportion to the area of their respective premises.
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undisputed exclusive rights to the future F.S.I. or any other construction right, use of every open space in the compound, terrace, basement, parking space, etc. The Tenants/Occupiers shall form the said Co-Operative Housing Society to which the right of ownership to the building if called upon by the said society, shall be conveyed other than all rights, interest, claims as stated herein above. The Landlord shall have the right to sell, transfer assign or give on rent, lease or deal in any manner they like about their right to the aforesaid remaining property with them and the Tenants/Occupiers including the Co-Operative Housing society shall give consent as and when demanded by the Landlord in this regard. The landlords have allowed the said new building to be constructed on the said plot of land on the basis of irrevocable licence in that behalf granted by them to the tenants.
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and obtained.”
Deemed Conveyance in the year 2018.
Submissions of Mr. Anshul Anjarlekar, on behalf of the Petitioner.
Agreement, submitted that the members of Respondent No. 3 were only entitled
to ownership of their respective flats and nothing more. He submitted that
Clause 6 was explicit and clear inasmuch as the land on which the said building stood as also all the rights in the said land were to be retained by the
Petitioner. He submitted that therefore the question of Respondent No.3 being entitled to a conveyance of the said land based on this Agreement did not arise.
He submitted that all that the members of Respondent No.3 were entitled to was
ownership of their respective flats and nothing more.
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never sold for any monetary consideration. He submitted that the tenants had
only paid construction cost for their respective flats and nothing more. He
pointed out that as per Section 2 (c) of MOFA the term promoter includes only a person who sells the property, i.e. building, apartment, or flat to any person. He submitted that in the present case, Venisons, admittedly, had not sold a single
flat to any person and thus the question of Venisons being a Promoter, as defined under MOFA did not arise. He therefore submitted that there was no question much less any obligation in law for Venisons to convey and transfer
the said land and/or any rights therein in favour of Respondent No. 3.
not in accordance with Section 4 of the MOFA and therefore Respondent No.2
could not have in law passed the Impugned Order. Learned Counsel submitted
that Clause 6 was explicit and Respondent No.2 was to act strictly in terms of
the Agreement, and not interpret the same. He therefore submitted that given
Clause 6 of the Agreement, Respondent No.2 could not have allowed the
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Application for a Deemed Conveyance. He then submitted that it was well settled that in an Application filed under Section 11 of the MOFA, the Competent Authority cannot adjudicate upon the issues of title as also the civil rights of the parties to the Agreement in respect of which the Deemed Conveyance has been sought. In support of his contention, he placed reliance upon the following two judgments:-
the said Agreement and pointed out that the same specifically recorded that the
tenants shall be recognized as the owners of their respective flats allotted to
them under the said Agreement dated 21st July 1994 and that Venisons shall
continue to be the exclusive owner of the plot of land on which the said
building stood. Basis the said recitals he submitted that therefore, a tenant only
1 Writ Petition No.3912 of 2012
2 Writ Petition No.11802 of 2013
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had the right limited to their respective flat and not with regards to the land,
which was under exclusive ownership of the Petitioner. He pointed out that Venisons would therefore have undisputed and exclusive rights to the future F.S.I. or any other construction right, use of every open space in the compound, terrace, basement, parking space etc. Learned Counsel reiterated that Venisons
had never sold a single flat in the entire building or in the property and the tenants were recognized as owners by the said Agreement only with respect to the flats allocated to them and nothing more.
governed by the provisions of MOFA since, viz.
MOFA.
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prescribed in Form V of the MOFA Rules. He pointed out that the said Agreement was also not in the form or format as prescribed under the MOFA Rules.
the Impugned Order and the said Certificate issued on the basis thereof were
required to be set aside and recalled and cancelled.
Submissions of Mr.Ankit Lohia, on behalf of Respondent No.3.
Agreement was squarely governed by MOFA and the same was made explicit
in Clause 4 of the said Agreement.
the members of Respondent No.3 were originally the tenants in respect of the
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flats in the said building; (ii) Venisons was granted permission to redevelop the
said building after obtaining requisite consents of the Co-operative Housing
Society to be formed by the tenants; (iii) the tenants on payment of consideration became owners of their respective flats in redeveloped building; and (iv) the said agreement specifically provided that the provisions of MOFA would govern the rights and obligations between the parties. Basis this, he submitted that there was no manner of doubt that the provisions of MOFA would apply in all its rigour and that therefore Respondent No.3 was entitled to a Deemed Conveyance as prayed for in the said Application made before
Respondent No.2.
permission for redevelopment vide the NOC dated 9 th March, 1993 which did
not contemplate Venisons recovering the construction cost from the members of Respondent No. 3. He submitted that the construction was carried on by
Venisons pursuant to the said NOC in its capacity as a developer/redeveloper of
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the said land and building. He thus submitted that this coupled with the fact
that Venisons had recovered the cost of construction from the members of Respondent No.3 made plain that Venisons was a Promoter as defined under
MOFA.
value and that to three times more. He submitted that it was therefore evident that what was paid under the said agreement was consideration for sale of the said flat though the nomenclature used was construction cost.
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Court in the case of Ramniklal Tusidas Kotak & ors v/s. M/s. Varsha Builders and
others 3 to submit that the members of Respondent No.3 having paid valid sale consideration to the lessee (i.e. Venisons) and the lessee having given ownership right under the said Agreement to the tenants (the members of Respondent
No.3), the lessee (the Petitioner) would fall within the definition of “Promoter”
as defined under Section 2(c) of the MOFA. He submitted that once the
provisions of the MOFA were applicable, any clause and/or provision in the Agreement to which the MOFA would apply which was contrary to the mandate of the MOFA would be void. He, therefore, submitted that Clause 6 of
the said Agreement was clearly bad in law and null and void. In support of his
contetion, he placed reliance upon the judgment of this Court in the case of Ratna Rupal Co-op. Housing Society Ltd vs. Rupal Builders & others4 in which
this court in paragraph 5 thereof has held as under:-
3 AIR 1992 Bom. 62
4 2011 (5) Bom. C.R. 561
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upon the judgment of this Court in the case of Tushar Jivram Chauhan and another v/s. State of Maharashtra and others 5 to submit that the Agreement for
Sale cannot be contrary to the provisions of law. Learned Counsel then submitted that the Agreement being governed by MOFA and Venisons being a Promoter it was incumbent upon Venisons in terms of Section 11 of MOFA to
have taken all the necessary steps to convey its right, title and interest in the
said land and building in favour of Respondent No.3.
5 2015(4) Mh. L. J. 867
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Lohia Learned Counsel for Respondent No.3 submitted that in the present case there was no question of interpretation of any clauses of the said Agreement. He
submitted that the Impugned Order was not based on interpretation of any clauses of the said Agreement but based on the provisions of the MOFA. Without prejudice, he then submitted that in any event the Petitioner’s right under Clause 6 of the said Agreement would not be affected by the grant of
Deemed Conveyance as it was well settled that a Deemed Conveyance cannot affect the legal right if any in the property which the Petitioner could always assert in a Civil Suit. In support of his contention, Learned Counsel placed reliance upon a judgment of this Court in the case of Smt. Gracy Dmello & ors v/s. Andheri Amarendra Co-op. Housing Society Ltd and ors. 6 `
Agreement and considered the case law cited and after a careful consideration
6 2016 SCC Online Bom. 10843
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of the same, have no hesitation in holding that the present Writ Petition
deserves to be dismissed for the following reasons, viz.
A. Clause 4 of the said Agreement is clear and unambiguous. The said clause in terms provides that (i) the Agreement and (ii) the relations between the parties shall be governed by MOFA. Therefore, it is beyond the pale of doubt that the Parties had agreed that their respective rights and obligations pursuant to the redevelopment would be governed by the provisions of MOFA. This naturally means that the provisions of MOFA would apply in full. Additionally, not even an attempt was made by Learned Counsel for the Petitioner to demonstrate as to how once the parties having agreed that the provisions of MOFA would apply, application of the same could be circumscribed either in the manner suggested by the Petitioner or even otherwise in law.
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as defined under MOFA. Section 2(c) of MOFA defines Promoter as
follows, viz.
“2. In this Act, un1ess the context otherwise requires; -
(c) "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 terms includes both;”
There is no dispute that (i) Venisons (being a partnership firm) was
the lessee of the said building (ii) Venisons, pursuant to permission granted, redeveloped the said land and building and (iii) Venisons received consideration from the tenants against which Venisons
allotted flats on an ownership basis to the tenants. There is and can
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be no doubt therefore that Venisons would squarely fall within the
definition of a Promoter as defined under MOFA. Given this fact it was incumbent upon Venisons to discharge all its obligations as a promoter under MOFA, this would inter-alia include Venisons transferring all its right, title and interest in the said land and building to Respondent No.3. Since Venisons did not however do so, Respondent No.3 was left with no option but to file the Application for Deemed Conveyance.
C. The fact that the said Agreement was not in the format prescribed by MOFA or that the same did not specifically mention sale price, is also immaterial since the parties had agreed categorically in Clause 4 that the provisions of MOFA would apply. It is not in dispute that Venisons did not redevelop the said building on its own cost but did so after taking requisite “construction costs” from the tenants. Respondent No.3 has demonstrated that the construction cost paid by
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the tenants was infact much higher than the market value of the said
flat allotted on an ownership basis. Therefore, it is clear that the construction cost was nothing but consideration for sale of the said flat on an ownership basis. Therefore it is not open for the Petitioners (assuming the Petitioners are successors in interest of Venisons) to contend that only construction cost was paid by the tenants and that the tenants and/or Respondent No. 3 did not have the benefits of the rights under MOFA.
D. While Clause 6 undoubtedly reserves the rights in the said land in favour of Venisons (Landlords), the legality and effect of such a clause would have to be construed in the overall facts of the case. In the present case, as I have already held that there is no doubt that (i) the parties had agreed that the provisions of MOFA would apply; (ii) Venisons was the Promoter as defined under MOFA in respect of the
redevelopment carried out and (iii) that the said flats were infact sold
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to the tenants on an ownership basis. Thus Venisons would therefore
be required to discharge all its obligations as a Promoter under MOFA and consequently was required to take all the necessary steps to complete its title and convey the same to Respondent No.3 i.e. the Co-operative Society formed on the basis of which the redevelopment permission was granted. Should the Petitioner however seek to assert any right in respect of what is stated in Clause 6, then it would be open to the Petitioner to do so in an appropriate proceeding before a Civil Court.
Petition with no order as to costs.
(ARIF S. DOCTOR, J.)
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3 issues framed by the court
Whether a redevelopment agreement governed by MOFA requiring the landlord to retain land makes the agreement void for the purposes of Section 11.
Whether the lessee falls within the definition of 'Promoter' under Section 2(c) of MOFA when receiving consideration to construct and transfer flats.
Whether the Competent Authority could validly issue a certificate for Deemed Conveyance under MOFA despite the agreement's retention of land rights.
Colour shows how this judgement treated each authority
Mazda Constructions Company vs. Sultanabad Darshan CHS LtdReferred¶101
(1) Mazda Constructions Company vs. Sultanabad Darshan CHS Ltd.1
Marathon Next Gen Realty Limited vs. The Competent AuthorityReferred¶102
(2) Marathon Next Gen Realty Limited vs. The Competent Authority, District Dy. Registrar of Co-operative Societies2
Ramniklal Tusidas Kotak & ors v/s. M/s. Varsha Builders and othersRelied on¶158
Ramniklal Tusidas Kotak & ors v/s. M/s. Varsha Builders and others 3
Ratna Rupal Co-op. Housing Society Ltd vs. Rupal Builders & othersRelied on¶164
Ratna Rupal Co-op. Housing Society Ltd vs. Rupal Builders & others4
Tushar Jivram Chauhan and another v/s. State of Maharashtra and othersRelied on¶172
Tushar Jivram Chauhan and another v/s. State of Maharashtra and others 5
Smt. Gracy Dmello & ors v/s. Andheri Amarendra Co-op. Housing Society Ltd and orsRelied on¶184
Smt. Gracy Dmello & ors v/s. Andheri Amarendra Co-op. Housing Society Ltd and ors. 6
2 provisions across 1 enactments
Saurin Ketan Jariwala
State of Maharashtra
Competent Authority, District Deputy Registrar
Parshwa Kunj Co-operative Housing Society Ltd
Joint Sub-registrar of Assurance
ARIF S. DOCTOR
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
